Australian Securities and Investments Commission v Reid (No 1) [2006] FCA 699 (8 June 2006)

Last Updated: 8 June 2006

FEDERAL COURT OF AUSTRALIA

Australian Securities and Investments Commission v Reid (No 1) [2006] FCA 699

PRACTICE AND PROCEDURE – application for adjournment based on Dietrich principle – contempt proceeding – nature of contempt proceeding is civil not criminal even though contempt is criminal – Dietrich principle cannot apply – application refused.


Dietrich v The Queen [1992] HCA 57; (1992) 177 CLR 292 cited
Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525 followed
New South Wales v Canellis & Ors [1994] HCA 51; (1994) 181 CLR 309 applied
McGibbon v Linkenbagh (1996) 41 ALD 219 cited
Australian Competition and Consumer Commission v Leelee Pty Ltd [1999] FCA 1121 cited
Nguyen v Minister for Immigration and Multicultural Affairs [2000] FCA 1265; (2000) 101 FCR 20 cited
Commissioner of Taxation (Cth) v La Rosa (2002) 196 ALR 139 cited
Rivera v United States of America [2004] FCAFC 154 cited
Vranic v Chief Executive Officer Centrelink [2004] FCA 1511cited



















AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION v MAXWELL JOHN REID

VID 3023 of 1992




LANDER J
8 JUNE 2006
ADELAIDE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 3023 OF 1992

BETWEEN:	AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION APPLICANT
AND:	MAXWELL JOHN REID RESPONDENT
JUDGE:	LANDER J
DATE OF ORDER:	8 JUNE 2006
WHERE MADE:	ADELAIDE

THE COURT ORDERS THAT:

1. The respondent’s application for a stay of proceedings is refused.
















Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 3023 OF 1992

BETWEEN:	AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION APPLICANT
AND:	MAXWELL JOHN REID RESPONDENT

JUDGE:	LANDER J
DATE:	8 JUNE 2006
PLACE:	ADELAIDE

REASONS FOR JUDGMENT

1 The applicant commenced these proceedings by notice of motion on 17 November 2003 seeking the following orders:

‘1. that the respondent be committed to prison or otherwise punished for contempt of Court for contravening the order of the Honourable Justice Jenkinson made on 10 March 1992 that the respondent be prohibited, pursuant to section 230 of the Corporations Law, until 10 August 2036 from managing a corporation; or in the alternative

2. that the warrant ordered by the Honourable Justice Kenny on 12 February 2002 to lie on the Court file be executed; or in the alternative

3. that the respondent be committed to prison or otherwise punished for contempt of Court in respect of his breach of the undertaking provided by him to the Honourable Justice Kenny on 8 October 2001 that he would not be involved in the management of a company in any form at all in the future;

4. that the respondent pay the applicant´s costs of and incidental to this motion on an indemnity basis; and

5. such further or other orders as the Court deems appropriate.’

2 Accompanying the notice of motion, as required under O 40 r 6 of the Federal Court Rules, was the Statement of Charge which claimed that the contempt committed by the respondent was wilful and contumacious insofar as:

‘1. in breach of paragraph 1 of the order of the Honourable Justice Jenkinson of this Court, made on 10 March 1992, wherein the respondent was prohibited from managing corporations until 10 August 2003, the respondent has been involved in the management of the following corporations:

1.1 Battstone Australia Pty Ltd between about 3 March 2003 and 3 June 2003; and

1.2 Australian Marble Pty Ltd between about 1 February 2003 and 14 July 2003; and

2. in breach of an oral undertaking provided to the Honourable Justice Kenny on 8 October 2001 that he would not be involved in the management of a company in any form at all in the future, the respondent has been involved in the management of the following corporations:

2.1 Battstone Australia Pty Ltd between about 3 March 2003 and 3 June 2003; and

2.2 Australian Marble Pty Ltd between about 1 February 2003 and 14 July 2003.’

3 The complete history of this proceeding can be found in my reasons for judgment in Australian Securities and Investments Commission v Reid [2005] FCA 1274.

4 Relevantly, the matter was listed for hearing on 22 November 2004. However, on 18 November 2004 the respondent, who was then represented by a solicitor, applied for an adjournment. I refused the application. On 22 November 2004, who was then unrepresented, applied for a stay of proceedings on the ground that he was indigent and without legal assistance: Dietrich v The Queen [1992] HCA 57; (1992) 177 CLR 292 (‘Dietrich’). I refused the application and indicated that I would give my reasons at a later date. These are the reasons for my refusal of that application.

5 The procedure which is to be adopted where a party brings contempt proceedings against another party for contempt is regulated by O 40 of the Federal Court Rules and, in particular, O 40 r 7 which provides:

‘(1) Subject to subrule (2), the evidence in support of a charge shall be by affidavit.

(2) The Court may permit evidence in support of a charge to be given otherwise than by affidavit.’

6 The procedure is different from criminal proceedings, where proceedings do not ordinarily go forward on affidavit evidence.

7 The High Court has recognised that contempt proceedings are civil, rather than criminal in nature. In Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525 at 534 the High Court, in addressing the standard of proof to be applied in contempt proceedings, indicated that contempt proceedings are essentially criminal in nature. However, the majority indicated that the rights and procedural obligations ordinarily associated with a criminal trial are dispensed with in contempt proceedings, stating (at 534):

‘It was submitted by counsel for the appellant that, if contempt proceedings are essentially criminal in nature, there is no power to order a retrial of the charges against the appellant ... However, to say that proceedings for contempt are essentially criminal in nature is not to equate them with the trial of a criminal charge. There are clear procedural differences, the most obvious being that criminal charges ordinarily involve trial by jury, whereas charges of contempt do not. There is no basis, in our view, for importing into the law of contempt the nineteenth century rules which allowed a verdict of guilty, given in a jury trial, to be quashed on appeal, but did not permit of an order for retrial. Moreover, the issue, so far as contempt is concerned, is not whether there should be a retrial, but whether there should be a rehearing.

8 The Court’s reasons show that contempt proceedings, or at least the procedure to be adopted in them, is civil rather than criminal in nature even though a Court may find that a person has committed a criminal contempt.

9 There is a long line of authority to suggest that the principle established by Dietrich as to the use of the Court’s inherent power to stay or adjourn proceedings until legal representation is obtained relates only to criminal proceedings.

10 The principle in Dietrich was explained in the joint judgment of Mason CJ, Dawson, Toohey and McHugh JJ in New South Wales v Canellis & Ors [1994] HCA 51; (1994) 181 CLR 309 (‘Canellis’) in the following terms (at 328):

‘... the principle established by the decision in that case is that a court has jurisdiction to grant an adjournment or order a permanent stay of proceedings at a trial until such time as an indigent person charged with a serious criminal offence is provided with legal representation necessary for a fair trial or resources for such representation.’

11 Referring to that principle, their Honours went on to say (at 328):

‘As the majority judgments made clear, that principle is based on, and derives from, the accused’s right to a fair trial.
There is no suggestion in the majority judgments that a court could exercise similar jurisdiction in civil proceedings or in committal proceedings; nor do they suggest that such a jurisdiction should be exercised in favour of an indigent person charged with a criminal offence which is other than serious.’ (Footnote omitted.)

12 This reasoning of the joint judgment in Canellis has been applied in numerous cases.

13 In McGibbon v Linkenbagh (1996) 41 ALD 219 at 228 Kiefel J said:

‘The principle established by Dietrich v R [1992] HCA 57; (1992) 109 ALR 385; 177 CLR 292 as to the use of a court's inherent powers to stay or adjourn proceedings until legal representation is obtained, where it concludes it is necessary for a fair trial, refers only to criminal proceedings: New South Wales v Canellis [1994] HCA 51; (1994) 124 ALR 513, 522; Williams v Official Trustee (1994) 122 ALR 585, 600 . It is not authority for the proposition that in other proceedings or inquiries such a step would be required by dictates of fairness, even where someone faced potentially serious consequences.’

14 In Australian Competition and Consumer Commission v Leelee Pty Ltd [1999] FCA 1121, Mansfield J said (at [61]):

‘The principle recognised in Dietrich ... is a feature of the entitlement to procedural fairness, but it is confined to serious criminal proceedings. That decision was not intended to apply in respect of civil proceedings: New South Wales v Canellis [1994] HCA 51; (1994) 181 CLR 309 at 328-329 per Mason CJ, Dawson, Toohey and McHugh JJ.’

15 In Nguyen v Minister for Immigration and Multicultural Affairs [2000] FCA 1265; (2000) 101 FCR 20, Sackville, Marshall and Lehane JJ in a joint judgment said (at [22] – [24]):

‘The limited scope of the principle in Dietrich was recognised by the High Court in New South Wales v Canellis [1994] HCA 51; (1994) 181 CLR 309. In that case, the issue was whether a stay should be granted of an inquiry under s 475 of the Crimes Act 1900 (NSW) because of doubts concerning the guilt of a convicted person. The question arose because the State had refused to pay the costs of legal representation for certain witnesses required to appear before the inquiry.

The joint judgment of Mason CJ, Dawson, Toohey and McHugh JJ observed (at 328) that the principle established by Dietrich

"is that a court has jurisdiction to grant an adjournment or order a permanent stay of proceedings at a trial until such time as an indigent person charged with a serious criminal offence is provided with legal representation necessary for a fair trial or resources for such representation. As the majority judgments made clear, that principle is based on, and derives from, the accused´s right to a fair trial".

16 Their Honours referred to the High Court’s reasons at 328 cited above and continued at [24]:

‘As these passages show, there is nothing in the reasoning in Dietrich to suggest that the decision applies otherwise than to a court hearing a prosecution for a serious criminal offence under Commonwealth, State or Territory law.’

17 In Commissioner of Taxation (Cth) v La Rosa (2002) 196 ALR 139, Nicholson J considered that the Dietrich principle did not apply in the context of a hearing before the Aministrative Appeals Tribunal, stating (at [120]):

‘Dietrich decided that the common law of Australia does not recognise the right of an accused person to be provided with counsel at the public expense but the courts have power to stay criminal proceedings that will result in an unfair trial. In Nguyen v Minister for Immigration and Multicultural Affairs (2000) 101 FCR 20the Full Court of the Federal Court held that the Dietrich principle had no application in the circumstances of a decision of a tribunal in deportation proceedings: see [17] and [18] of Nguyen. There the court referred to the decision in New South Wales v Canellis [1994] HCA 51; (1994) 181 CLR 309; 124 ALR 513 where the limited scope of the Dietrich principle was recognised, Mason CJ, Dawson, Toohey and McHugh JJ stating it was concerned with the right to a fair trial of a party to criminal proceedings: at CLR 328. The Full Court in Nguyen considered it was clear the High Court did not favour the extension of the Dietrich principle into the field of administrative review.’

18 More recently, in Rivera v United States of America [2004] FCAFC 154, Heerey, Sundberg and Crennan JJ considered whether the principle in Dietrich applied to a review of extradition proceedings under s 21(1) of the Extradition Act 1988 (Cth) (‘the Act’). Their Honours firstly considered s 19(5) of the Act, which provided:

‘In the proceedings, the person to whom the proceedings relate is not entitled to adduce, and the magistrate is not entitled to receive, evidence to contradict an allegation that the person has engaged in conduct constituting an extradition offence for which the surrender of the person is sought.’

19 In a joint judgment, their Honours said (at [26] – [28]):

‘This provision ensures that the merits of the criminal charge are not in issue in the proceedings concerning surrender and there can be no risk that the appellant will incriminate himself if the legislation is adhered to as it has been during the course of this matter. Having as its source and origin an accused person´s common law right to a fair trial, the principle in Dietrich´s case has, in our view, no application to a review of extradition proceedings under s 21(1) of the Extradition Act.

This view is consistent with unanimous views of the High Court in Canellis. In the joint judgment of Mason CJ, Dawson, Toohey and McHugh JJ at 328 their Honours said:

"... the principle established by the decision in that case [Dietrich] is that a court has jurisdiction to grant an adjournment or order a permanent stay of proceedings at a trial until such time as an indigent person charged with a serious criminal offence is provided with legal representation necessary for a fair trial or resources for such representation. As the majority judgments made clear, the principle is based on, and derives from, the accused´s right to a fair trial.

There is no suggestion in the majority judgments that a court could exercise a similar jurisdiction in civil proceedings or in committal proceedings; nor do they suggest that such a jurisdiction could be exercised in favour of an indigent person charged with a criminal offence which is other than serious. Furthermore, and this is of decisive importance in the present case, the principle in Dietrich is concerned with the right to a fair trial of a party to criminal proceedings ; ..."

There is nothing in the facts of this case which would support the application of the principle in Dietrich to these extradition proceedings as contended for by the appellant in reliance upon the observations of Kirby P in Canellis v Slattery. Furthermore there is no requirement for the appellant to seek special leave in person from the High Court: see Milat v R [2004] HCA 17; (2004) 205 ALR 338. Accordingly, we reject the submission that the Dietrich principle can be invoked in these extradition proceedings on the basis contended because no risk of conviction or self-incrimination can arise in these proceedings conducted in accordance with the Extradition Act, for the purposes of determining eligibility for surrender.’

20 In Vranic v Chief Executive Officer Centrelink [2004] FCA 1511, the applicant submitted that she had been denied procedural fairness because she was not legally represented at the hearing before the trial judge. Cooper J rejected this submission, stating at [8]:

‘Procedural fairness in a civil proceedings (sic) does not require that legal representation be provided to a party at trial: New South Wales v Canellis [1994] HCA 51; (1994) 181 CLR 309 at 330; Stuart v Federal Commissioner of Taxation (1996) 96 ATC 4960 (FC) at 4964.’

21 In the circumstances of this case, where the procedure to be adopted in the contempt proceeding is civil rather than criminal, the respondent’s application to stay the proceedings on the basis of Dietrich had to fail because the principle in Dietrich has no application to civil proceedings. It was on this basis that the respondent’s application was dismissed.

22 When the trial commenced, Mr Reid was unrepresented. However, the trial was adjourned to allow his solicitor to appear on his behalf and make submissions in closing: see Australian Securities and Investments Commission v Reid [2005] FCA 1274.

23 After I had found that the contempt which was alleged had been proved, Mr Reid was also represented on the question of penalty: Australian Securities and Investments Commission v Reid (No 2) [2006] FCA 700.

24 Because Mr Reid was later represented, this ruling became somewhat academic.

I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Lander.

Associate:

Dated: 8 June 2006

Counsel for the Applicant:	Mr M Hoffmann QC
Solicitor for the Applicant:	Australian Government Solicitor
Counsel for the Respondent:	The Respondent appeared in person
Date of Hearing:	22 November 2004
Date of Judgment:	8 June 2006