Westpac Banking Corporation v Bruce Patrick Burke [2011] NSWSC 549 (3 June 2011)

Last Updated: 14 June 2011

Supreme Court New South Wales

Case Title:	Westpac Banking Corporation v Bruce Patrick Burke
Medium Neutral Citation:	[2011] NSWSC 549
Hearing Date(s):	3 June 2011
Decision Date:	03 June 2011
Jurisdiction:	Equity Division
Before:	Bergin CJ in Eq
Decision:	Application allowed
Catchwords:	[CONTEMPT] - [PRACTICE AND PROCEDURE] - application to rely on evidence served late - failure to comply with directions - application for adjournment to explain delay - issue of whether adjournment efficacious where application for order that defendant in contempt for failure to deliver up machinery pursuant to Consent Orders - and where order relied upon did not include notice required under Rule 40.7(3) of the Uniform Civil Procedures Rules 2005
Legislation Cited:	Uniform Civil Procedure Rules 2005
Cases Cited:	Anderson v Hassett [2007] NSWSC 1310 Australia Securities Commission v MacLeod (Federal Court of Australia, 24 February 1993, unreported) Davies v Beyond Building Systems Pty Ltd & Ors [2009] NSWSC 1282 Duncan-Strelec v Tate [2008] NSWSC 1145 Leung v Good Friend Development Pty Ltd [2008] NSWSC 142 McDonnell v Novello [2006] NSWSC 1186 McGuirk v University of New South Wales [2009] NSWSC 1058 McGuirk v University of New South Wales [2010] NSWSC 448 NCR Australia Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118 Toben v Jones [2009] FCAFC 104
Texts Cited:
Category:	Interlocutory applications
Parties:	Westpac Banking Corporation (Plaintiff) Bruce Patrick Burke (First Defendant)
Representation
- Counsel:	Counsel: S Ipp - Plaintiff M Dulhunty - First Defendant
- Solicitors:	Solicitors: DLA Phillips Fox (Plaintiff) Rishworth Dodd & Co (First Defendant)
File number(s):	2010/00097113
Decision Under Appeal
- Court / Tribunal:
- Before:
- Date of Decision:
- Citation:
- Court File Number(s)
Publication Restriction:	Nil

JUDGMENT - EX TEMPORE

1. This is an application brought by the plaintiff for the adjournment of a Notice of Motion seeking orders, inter alia, that the defendant be found to be in contempt of court orders.
   
2. On 27 August 2010 the plaintiff, Westpac Banking Corporation, and the first defendant, Bruce Patrick Burke (the defendant), entered into Consent Orders made by Macready AsJ requiring the first defendant to give possession to the plaintiff of two John Deere Harvesters, one manufactured in 1996 and the other in 2001. There was no timeframe in the order within which the Harvesters were to be delivered up to the plaintiff. That was rectified on 25 October 2010 when Consent Orders were made varying the Order of 27 August 2010 to fix the date for delivery up as 5 November 2010.
   
3. The defendant did not comply with the Orders and on 20 December 2010 the plaintiff's solicitors, DLA Phillips Fox, wrote to the defendant's solicitors, Rishworth Dodd & Co, in terms that included the following:
   

Mr Burke has failed to deliver the Mortgaged Property to the Bank by 5 November 2010 in accordance with order 2 of the Orders. The Bank intends to proceed with an action for contempt in relation to Mr Burke's failure to comply with the Orders.

Please confirm by return that you still act for Mr Burke.

4. On 13 January 2011 Rishworth Dodd & Co replied in the following terms:
   

We refer to previous correspondence and would advise that our client has advised us that the machinery the subject of these proceedings is currently flood bound. It expects to be able to obtain the machinery within 2 weeks and as soon as he does he will deliver same to the office of Pickles Auctions at 21L Yarrandale Road, Dubbo as previously requested. We will confirm delivery of same in the near future.

5. Delivery was not made within the two weeks as promised and after further correspondence and discussion the plaintiff was finally able to recover the 2001 Harvester on 16 February 2011 and the 1996 Harvester on 8 April 2011. There are "combs" to each Harvester. The comb to the 2001 Harvester was recovered on 28 March 2011. It appears there is dispute about the whereabouts of the comb to the 1996 Harvester.
   
6. The plaintiff's Notice of Motion was filed on 18 March 2011. On 25 March 2011 orders were made for the plaintiff to file and serve any further affidavits on which it intended to rely in support of the application on or before 15 April 2011.
   
7. The Notice of Motion was listed for hearing before me today. Mr S Ipp, of counsel, appeared for the plaintiff and Ms M Dulhunty, of counsel, appeared for the defendant.
   
8. The plaintiff sought to rely on additional affidavit evidence that had only been served on and after 31 May 2011. The defendant objected to those affidavits on the basis that the plaintiff was in breach of the court orders and there had been no explanation to the Court as to why such breaches had occurred or should be excused. The plaintiff then sought an adjournment on two bases: (1) to call evidence in relation to the reasons for the delay (which apparently involved ongoing discussions between the parties); and (2) to provide time to the defendant to deal with the additional affidavits.
   
9. Ms Dulhunty submitted that the adjournment should be refused because the plaintiff's claim is fatally flawed by reason of its failure to comply with Rule 40.7(3) of the Uniform Civil Procedures Rules 2005 (the Rules ). Accordingly it was the defendant's claim that the adjournment should be refused because there is no serious issue to be tried.
   
10. Part 40.7 provides as follows:
    

(1) A judgment is not enforceable by committal or sequestration unless:

(a) a sealed copy of the judgment is served personally on the person bound by the judgment, and

(b) if the judgment requires the person to do an act within a specified time, the sealed copy is so served within that time or, if that time is extended or abridged, within that time as extended or abridged.

(2) If the person is a corporation, the judgment is not enforceable by committal of an officer of the corporation or by sequestration of the property of an officer of the corporation unless, in addition to service under subrule (1):

(a) a sealed copy of the judgment is served personally on the officer, and

(b) if the judgment requires the corporation to do an act within a specified time, the sealed copy is so served before that time expires.

(3) The sealed copy of the judgment must bear a notice (naming the persons concerned) that the person served is liable to imprisonment or to sequestration of property:

(a) where the judgment requires the person to do an act within a specified time, if the person fails to do the act within that time, or

(b) where the judgment requires the person to do an act forthwith or forthwith on a specified event, if the person fails to do the act as so required, or

(c) where the judgment requires the person to abstain from doing an act, if the person disobeys the judgment.

(4) If a person liable to committal or sequestration by way of enforcement of a judgment has notice of the judgment:

(a) by being present when the judgment is directed to be entered, or

(b) by being notified of the terms of the judgment, whether by telephone, telegram or otherwise,

the judgment may be enforced against that person by committal or sequestration without service having been effected in accordance with this rule.

(5) The court may dispense with service under this rule.

(6) This rule does not apply to a committal or sequestration arising from a failure to comply with the requirements of a subpoena.

11. I do not read Rule 40.7(4) as excluding the mandatory requirement for the inclusion of the notice required by Rule 40.7(3). There are very good reasons why the notice "must" be included in the "judgment". As Barrett J said in McDonnell v Novello [2006] NSWSC 1186:
    

[35] An allegation of contempt of court is serious and not to be made lightly. It may lead to loss of liberty. It behoves anyone pursuing such an allegation to do so with precise attention to all matters going to due process.

12. There is no issue that the plaintiff failed to comply with Rule 40.7(3) of the Rules . In his written submissions Mr Ipp conceded that the Consent Orders were not served personally as stipulated in Rule 40.7(1) and that the defendant was not served with a notice under Rule 40.7(3) that he would be liable to imprisonment if he disobeyed the orders. Those written submissions included what was described as an application under Rule 40.7(4) to have the Consent Orders enforced notwithstanding the absence of compliance with Rule 40.7(1) and Rule 40.7(3).
    
13. In support of this submission Mr Ipp relied upon a number of decisions of this Court including Anderson v Hassett [2007] NSWSC 1310 per Brereton J at [9]; Davies v Beyond Building Systems Pty Ltd & Ors [2009] NSWSC 1282 per Brereton J at [6]; Duncan-Strelec v Tate [2008] NSWSC 1145 per Young CJ in Eq (as his Honour then was) at [17] and [18]; and Leung v Good Friend Development Pty Ltd [2008] NSWSC 142 per Barrett J at [6].
    
14. In Anderson v Hassett [2007] NSWSC 1310 Brereton J said:
    

[9] Mr Hassett was present in court when the relevant order was made by Windeyer J and, on his own evidence, agreed to it. A sealed copy was sent to him by facsimile transmission and by pre-paid post on 2 August 2006. Neither bore the notice to party bound required by UCPR, r 40.7(3), nor was the order served personally on Mr Hassett, as required by UCPR, r 40.7(1). However, UCPR, r 40.7(4) provides that where a party bound has notice of a judgment by being present when the judgment is given, or by being notified of the terms of the judgment by telephone, telegram or otherwise, it may be enforced without service in accordance with r 40.7(1) and (3). As Mr Hassett was in court when the order was made, and on his own evidence agreed to it, and was notified of its terms by facsimile and post, and takes no point about sufficiency of notice of the order, I will accede to the application to deal with the matter pursuant to UCPR, r 40.7(4), notwithstanding that service of the order has not been effected in accordance with r 40.7.

[10] The notice of motion was not served personally on Mr Hassett as required by SCR, Pt 55 r 9, but delivered to a receptionist at his office. However, as he has appeared to oppose the application, and takes no point about adequacy of service, I am prepared to dispense, pursuant to (NSW) Civil Procedure Act 2005, s 14, with further service of the motion.

15. Anderson v Hassett involved a solicitor who had allegedly failed or refused to comply with an order of the Court to produce documents in respect of the estate of which he was the executor. It is not clear from the judgment whether any point was taken as to the existence of a notice as required by Rule 40.7(3) having been served on the defendant. The conclusion reached by Brereton J in paragraph 9 does suggest that if a party has notice of a judgment (presumably one that did not include the penal notice) by being present when the judgment is given then it may be enforced "without service in accordance with r 40.7(1) and (3)". It does not appear that there was any argument in relation to the need for the notice. It may have been of no moment in that case because the alleged contemnor was a solicitor. I am of the view that in that case, in particular in paragraph 9, Brereton J was focusing on the question of service rather than the content of the "judgment". In fact when judgments are given in Court, the matter referred to by Brereton J, there is usually no reference to any possibility of the person being liable to imprisonment or other penalty for non compliance with the judgment. The judgment referred to in Part 40.7 is the judgment entered and sealed for service on the alleged contemnor.
    
16. Mr Ipp relied upon the following passage of Campbell J's (as his Honour then was) judgment in NCR Australia Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118 in which his Honour was dealing with Part 42 r 8 of the Supreme Court Rules 1970, now "mirrored" in Part 40.7 of the Rules :
    

[37] The way in which Part 42 rule 8 Supreme Court Rules 1970 works is that, first, subrules (1) and (3) contain a positive requirement that, before a judgment is enforced by committal, a minute of the judgment be personally served on the person bound, in a form which is endorsed with the notification referred to in subrule (3). The minute of the judgment which is so served must be a minute of the very judgment in relation to which the order for committal is sought. Thus, in the present case, the minute of the judgment which is personally served was required to be a minute of the order of 10 May 2000 and of each of the variation orders which are identified in the Amended Notice of Motion and in the ten Statements of Charge.

[38] Subrule (6) creates a discretionary power in the Court to enforce a judgment by committal even if the requirements of the earlier paragraphs in the rule have not been complied with. The circumstance in which that discretionary power arises is either one of the circumstances listed in subrule 6(a) and (b). However, the "judgment" that is there referred to is the judgment that is being sought to be enforced. Thus, in the present case, one of the circumstances in which the discretionary power under subrule 6 could be exercised would be if the second defendant had been present when the order of 10 May 2000, and each of the subsequent varying orders identified in the Notice of Motion and each Statement of Charge, was made. The other is if the second defendant had been notified of the terms of the order of 10 May 2000, and each of the varying orders.

[39] Para (7) confers a separate power for the Court to dispense with service. It is in terms unconfined.

...

[91] If the plaintiff had served the second defendant with a copy of the order endorsed as required by Part 46 rule 8, there would have been no real doubt that he knew that imprisonment was a possible consequence of breach. In that situation I would have imposed a sentence of imprisonment. However that course is not open to me.

17. In Davies v Beyond Building Systems & Ors [2009] NSWSC 1282 Brereton J was dealing with a failure to serve a penal notice and said:
    

[5] Dealing first with the question of notice of the order to the respondents, it was not suggested that personal service of the order endorsed with a penal notice in accordance with UCPR r 40.7 (1) and (3) was effected. However, it was established that a sealed copy of the order, albeit without a penal notice, was provided to the solicitors for the respondents prior to expiry of time in compliance with the order. As I found, when it was submitted at the conclusion of the applicant's case that there was no case to answer, there was evidence from which at least, in the absence of evidence to the contrary, it was open to the court to conclude that the defendants had been notified of the terms of the order, whether by telephone, facsimile, email or otherwise, within r 40.7 (4)(b). Not only did no evidence to the contrary emerge, but evidence adduced in Mr Horthy's case affirmatively established that before time for compliance with the order had expired, he had received a copy of the order from the solicitors then acting for him. Neither respondent now disputes that he had notice of the order.

[6] As the evidence stands, I am unable to be satisfied to the requisite standard that a copy bearing the penal notice was served. That, however, as I have said, goes to whether it may be inappropriate to proceed by way of committal or sequestration, and does not prevent a conclusion that there has been a contempt of court for which other sanctions might be available. Indeed it does not necessarily preclude the court even from proceeding by way of committal, if the dispensing power under r 40.7 is exercised although whether such a remedy should be invoked is influenced by whether the contemnor was aware of it, [see NCR Australia Pty Limited NSW v Credit Connection [2005] NSWSC 1118].

18. Additionally, Mr Ipp relied upon the following passage of Toben v Jones [2009] FCAFC 104:
    

[3] The Full Court in Siminton v Australian Prudential Regulation Authority [2006] FCAFC 118; (2006) 152 FCR 129 observed that because liberty of the subject was involved, dispensation with compliance with the requirements of O 37 r 2(3) should not be ordered, unless the evidence shows that the requirements of that rule have been fulfilled in some other way.

19. Finally Mr Ipp relied upon the following passage of Drummond J's judgment in Australia Securities Commission v MacLeod, (Federal Court of Australia, 24 February 1993, unreported), in which his Honour was dealing with the failure to give notice of the penal consequences of failure to comply with a judgment of the Court:
    

However, the absence of notice on the part of the respondent of those consequences, while not depriving the court of jurisdiction under r 2(5) to make an order for committal, would be a discretionary consideration that the court could take into account in deciding whether to order committal where there has not been personal service of an appropriately endorsed judgment or order on the respondent.

20. Reference was also made to McGuirk v University of New South Wales [2009] NSWSC 1058 and [2010] NSWSC 448. However these decisions do not take the matter any further.
    
21. The approach that has been adopted in these decisions is that where a penal notice has not been served, there is no impediment to the Court proceeding to hear the application for a finding of contempt, however the options available to the Court in the exercise of its discretion in sentencing, if a finding of contempt is made, is limited if no notice has been served.
    
22. In those circumstances, Mr Ipp submits that there is a body of authority available to his client to submit that there is a serious issue to be tried as to whether the failure to serve a penal notice is a fatal flaw. At this stage, I am dealing only with an application for an adjournment and with Ms Dulhunty's application that I should not allow it because it would be inefficacious because whatever evidence would be called would not be able to be used efficiently or effectively because of the fatal flaw.
    
23. I am satisfied that there is a serious issue to be tried in respect of whether it is necessary to comply with Rule 40.7(3) before a finding of contempt can be made and it should be considered at the trial of the matter.
    
24. Accordingly, I will allow the adjournment on terms.
    

********************************