Bank of South Pacific Ltd v Sekum [2011] PGNC 176; N4588 (27 May 2011)

N4588

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 425 OF 2010

BETWEEN:

BANK OF SOUTH PACIFIC LIMITED
Plaintiff

AND:

ANTON SEKUM, as its President and PAPUA
NEW GUINEA BANKS & FINANCIAL
INSTITUTIONS WORKERS UNION
First Defendant

AND:

HELEN SALEU, Industrial Registrar, INDUSTRIAL
RELATIONS DIVISION OF DEPARTMENT OF
LABOUR & INDUSTRIAL RELATIONS
Second Defendant

AND:

GEORGE VASO, Secretary for DEPARTMENT
OF LABOUR & INDUSTRIAL RELATIONS
Third Defendant

AND:

THE INDEPENDENT STATE OF
PAPUA NEW GUINEA
Fourth Defendant

Waigani: Hartshorn J.
2010: 10th & 14th December
2011: 11th, 14th & 21st April
: 27th May

Contempt - penalty

Facts:

This is a decision as to the penalty to be imposed for contempt. The contemnor Mr. Joseph Koi, after a trial, was found guilty of contempt of court by breaching Restraining Orders of this Court. After numerous adjournments because of his absence in Court, the Court decided to proceed with this hearing on penalty.

Held:

The appropriate penalty is that Mr. Koi shall pay a fine of K 25,000.00. If payment of that fine is not made within 30 days from today then Mr. Koi shall be imprisoned for a period of six months.

Cases cited:

Papua New Guinea Cases

Kavali v. Hoihoi [1986] PNGLR 329
Yap v. Tan [1987] PNGLR 227
Ross Bishop and Ors v Bishop Brothers Engineering Pty Ltd [1988-89] PNGLR 533
Bishop Brothers v. Ross Bishop (1989) N690
Concord Pacific Ltd v. Thomas Nen [2000] PNGLR 47
The State v. Johnson & Ors (No. 2) (2004) N2586
The State v. Augustine Lausi Ogi (2004) N2761
The State v. Justin Komboli (2005) N2891
The State v. Elias Vilamut & Anor (2009) unreported CR 479/07 delivered at Kokopo 15/5/09
Liriope v. Usurup [2009] N3931

Overseas Cases

Australian Consolidated Press Ltd v. Morgan [1965] HCA 21; (1965) 112 CLR 483
Heatons Transport v. TGWU (1973) AC 15
Australian Meat Industry Employees Union v. Mudginberri Station Pty Ltd (1986) 161 CLR 98
Witham v. Holloway (1995) 183 CLR 525
Vaysman v. Deckers Outdoor Corporation Inc [2011] FCAFC 17

Counsel:

Mr. R. Pato, for the Plaintiff

27th May, 2011

1. HARTSHORN J: The contemnor Mr. Joseph Koi, after a trial, was found guilty of contempt of court. Mr. Koi deliberately and wilfully disobeyed or otherwise refused to and/or neglected the terms and effect of orders of this court and specifically he deliberately and wilfully disobeyed Order 4 of the Restraining Orders that restrained the

"...giving effect to enforcing, facilitating and implementing any resolution and/or decision and/or agreement reached as a result of any Secret Ballot that has been conducted without fully exploring and exhausting settlement procedures available under the Industrial Relations Act:"

2. The facts are detailed in my decision delivered on 11th April 2011. Mr. Koi did not attend court on 11th April. The court adjourned the hearing of submissions as to penalty to 14th April but Mr. Koi again did not appear. The court further adjourned to 21st April to hear submissions as to penalty but again Mr. Koi did not attend and there was no appearance on his behalf.

3. Upon being satisfied that Mr. Koi had been given notice of the hearing, I decided to hear submissions on penalty in his absence. The court was entitled to adopt this course as the principle that a trial should proceed in the presence of an accused person is not absolute. A person can relinquish his right by not attending court where required. There are numerous authorities to this effect: Kavali v. Hoihoi [1986] PNGLR 329, The State v. Johnson & Ors (No. 2) (2004) N2586, The State v. Augustine Lausi Ogi (2004) N2761 and The State v. Justin Komboli (2005) N2891. I also heard submissions as to penalty and passed sentence in respect of an accused person on bail who did not attend court when required in The State v. Elias Vilamut & Anor (2009) unreported CR 479/07 delivered at Kokopo 15/5/09.

4. No maximum punishment is prescribed for contempt. Pursuant to Order 14 Rule 49 (1) National Court Rules, where the contemnor is not a corporation, the court may punish contempt by committal to prison or fine or both.

5. The category of contempt of which Mr. Koi has been found guilty is referred to as disobedience contempt. That is, the failure to comply with an order of the court or an undertaking given to a court. The punishments that have been imposed in this jurisdiction for disobedience contempt were considered by Cannings J in Liriope v. Usurup (2009) N3931. Cannings J noted that in four of the seven cases considered, the primary punishment was committal to custody and in two cases, Yap v. Tan [1987] PNGLR 227 and Bishop Brothers v. Ross Bishop (1989) N690 (appeal against conviction upheld: Ross Bishop v. Bishop Brothers [1988-89] PNGLR 533), committal to custody was the default penalty. In Yap (supra) and Bishop (supra), where fines were imposed with committal to custody being the default penalty, the contempts were in relation to the operation of businesses. In the case of Concord Pacific Ltd v. Thomas Nen [2000] PNGLR 47 in which the contempt was business related, the punishment was an order for costs on a solicitor client basis against the contemnor.

6. The punishment of a fine with or without a default penalty for an order for the payment of costs, to an extent, reflects the punishment that was imposed for disobedience contempt historically. This was referred to in Australian Consolidated Press Ltd v. Morgan [1965] HCA 21; (1965) 112 CLR 483 by Windeyer J:

"When contempt lies in disobedience of a court's order to do something, the contemnor may be imprisoned, until by doing what was ordered he purges his contempt. When contempt lies in disobedience of an injunction not to do something, the contemnor is ordinarily permitted to purge his contempt by an apology to the court, making reparation for the damage done by the forbidden act and paying the costs as between solicitor and client."

The imposition of a fine, which was not permitted in earlier times, can be seen to have replaced the making of reparations in the passage cited.

7. The payment of a fine with or without imprisonment as the default penalty is often the punishment for disobedience contempt imposed in the courts of Australia. The Federal and High Courts of Australia have the power to order that a contemnor, "pay a fine, be committed to prison or both pay a fine and be committed to prison." The decisions of these Courts are persuasive in this jurisdiction.

8. In the recent case of Vaysman v. Deckers Outdoor Corporation Inc [2011] FCAFC 17, a decision of the Full Court of the Federal Court of Australia, Gray J said that:

"The starting point for the process of reasoning in sentencing is the gravity of the offence... In the case of contempt of court involving contravention of, or failure to comply with, court orders, that means assessing the seriousness of the defiance of the Courts authority."

Then later,

"... Restraint is appropriate in imposing sentences of imprisonment for contempt of court involving contravention of, or failure to comply with, orders of the Court. The authority of a court can be brought into disrepute, rather than enhanced, by too great a tendency to punish severely in cases that do not warrant severity."

9. In the judgment of Bromberg J in Vaysman (supra), His Honour had this to say as to punishment for contempt:

".... The question is whether by reference to the harm done, the seriousness of the contempt, any prior relevant misconduct and the physical, mental and other personal conditions of the person to be sentenced, no sentence other than imprisonment is (in all the circumstances) appropriate." "... non-compliance with court orders necessarily constitutes an interference with the administration of justice and thus the public interest of vindicating judicial authority is raised...." "The vindication of judicial authority must necessarily reflect the nature of the challenge to that authority inflicted by the conduct in contempt in question." "Imprisonment, as a disciplinary sanction for contempt, ought to be confined to the most serious of contempts.." "As Keane CJ, Dowsett and Reeves JJ recently observed in Jones v. Australian Competition and Consumer Commission [2010] FCAFC 136 at [36], they would be a serious question of the propriety of a sentence of imprisonment if the charges raised only a case of civil contempt; that is, a case where contumacious conduct was not contended for."

10. In this instance, I have found that Mr. Koi disobeyed order no. 4 of the Restraining Orders by giving effect to and facilitating any resolution, decision or agreement reached as a result of the subject secret ballot and that by his conduct, Mr. Koi incited employees of Bank South Pacific Ltd to take industrial action including to go on strike. I concluded that it cannot be said that Mr. Koi was unaware of the Restraining Orders. It is not disputed that he attended court on behalf of the first defendant and unsuccessfully attempted to have the Restraining Orders set aside. He then wrote his letter and purportedly gave advice upon the Restraining Orders. To have written the letter the way that he did and to purportedly give the advice contained therein four days after he had been unsuccessful in setting the Restraining Orders aside, leaves no doubt in my mind that his action in writing the letter was wilful.

11. Wilful behaviour though is not the same as behaviour that is contumacious. In Heatons Transport v. TGWU (1973) AC 15 at 108, a House of Lords decision, Lord Wilberforce speaking on behalf of the House pointed out that a wilful breach was not the same as, "contumacious or insulting behaviour or interference with the administration of justice".

12. It is not alleged that Mr. Koi's conduct was contumacious in the statement of charges although it is contended that he acted deliberately and wilfully. In considering the penalty that should be imposed upon Mr. Koi, I am mindful that his action in writing his letter was deliberate and wilful, incited persons to strike and occurred after he had been unsuccessful in having the Restraining Orders set aside. I am not satisfied however, that the evidence shows that Mr. Koi deliberately embarked upon his actions to in some way, defy the authority of the court. Notwithstanding this, his actions have the effect of undermining the authority of this court and the administration of justice and the imposition of a penalty is necessary to protect both the interests of the plaintiff and the administration of justice. In their joint judgment in Australian Meat Industry Employees Union v. Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 107, this was recognised by Gibbs CJ, Mason, Wilson and Deane JJ when they said that:

"Although the primary purpose in committing a defendant who disobeys an injunction is to enforce the injunction for the benefit of the plaintiff, another purpose is to protect the effective administration of justice by demonstrating that the Courts orders will be enforced."

and in Witham v. Holloway (1995) 183 CLR 525 at 533-4, Brennan, Deane, Toohey and Gaudron JJ stated that:

"Even when proceedings are taken by the individual to secure the benefits of an order or undertaking that has not been complied with, there is also a public interest aspect in the sense that the proceedings also vindicate the court's authority. Moreover, the public interest in the administration of justice requires compliance with all orders and undertakings, whether or not compliance also serves individual or private interests..... All orders, whether they be Mareva injunctions, injunctions relating to the subject matter of the suit, or, simply, procedural orders, are made in the interests of justice. Non-compliance necessarily constitutes an interference with the administration of justice even if the position can be remedied as between the parties.'

13. In considering the penalty to be imposed, I am at a disadvantage as no submissions were made by or on behalf of Mr. Koi in mitigation. I am also unaware of his personal circumstances. There was no evidence of any prior relevant misconduct by Mr. Koi.

14. Having regard to the seriousness of the contempt, the fact that considerable disruption, interference and damage was caused to the operations of Bank South Pacific Ltd and that its customers were seriously affected, the penalty must be substantial. I am of the view that notwithstanding that Mr. Koi's actions were deliberate and wilful they were not contumacious and therefore a primary penalty other than imprisonment is appropriate. I also consider, in line with the decisions of Yap (supra) and Bishop (supra), that as the contemptuous conduct has affected a business operation, the appropriate penalty is a fine with imprisonment being the default penalty. I take into account that Mr. Koi is a lawyer and as such he owes a duty to the court and is aware that its orders must be complied with. As to the fine to be imposed, in Yap (supra) in 1987, the fine imposed for each charge was K5,000.00; the total fine being K15,000.00. I am mindful of the decline in the value and the purchasing power of the local currency since then.

15. In all the circumstances, the appropriate penalty and the one that I impose is that Mr. Koi shall pay a fine of K 25,000.00. If payment of that fine is not made within 30 days from today then Mr. Koi shall be imprisoned for a period of six months.

16. Finally, I order that Mr. Koi is to pay the costs of the plaintiff of and incidental to its notice of motion seeking orders for contempt and all of the hearings associated with it, on a solicitor client basis.

_________________________________________________________

Steeles Lawyers: Lawyers for the Plaintiff
Kople Koi & Company Lawyers: Lawyers for the Contemnor and First Respondent