Exagym Pty Ltd v Professional Gymnasium Equipment Company Pty Ltd (No 2) [1993] QSC 270 [1994] 2 Qd R 129

Se Cf-3 j:l 70 State Reporting Bureau TRANSCRIPT OF PROCEEDINGS (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau.) :·._ ... ::J CC?:::::s !SSUED SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION I 0.) BYRNE J \ / () 0 0 No 1504 of 1992 EXAGYM PTY LTD ACN 010 378 194 and PROFESSIONAL GYMNASIUM EQUIPMENT COMPANY PTY LTD and MICHAEL QUINN and IMAGINATIVE PRODUCTS PROMOTIONS PTY LTD ACN 883 438 591 and LYNCO PROMOTIONS (A FIRM) and LYN DINES •. DATE 27/08/93 JUDGMENT Plaintiff First Defendant Second Defendant Third Defendant Fourth Defendant Fifth Defendant -- 1 of 8 -- 270893 HIS HONOUR: Some time ago Moynihan SJA granted an· interlocutory injunction restraining Imaginative Products and Promotions Pty Ltd ( "the ·applicant" ) , two other corporations and some individuals associated with the applicant from, among other· things, advertising or selling . 10 gymnasium equipment "using the name Exagym", The order was expressed to subsist until the trial of an action instituted by Exagym Pty Ltd ( "the respondent" ) in which claims are - .. made of passing off and the like. I 20 () Mr Perin is one of the applicant's directors. After service of a sealed copy of the Court's order, the respondent became () aware of activities of Mr Perin which were regarded as contravening the restraint. So the respondent instructed its solicitors to institute proceedings for contempt of 30 Court against the applicant, Mr Perin and two other defendants. 0 To enhance its prospects of success in the contempt 40 c·\ proceedings, the respondent sought the Court' s assistance. ) '---' An ex ·parte application was made to the Chamber Judge. Its· "specific purpose", as the Judge was told, was to seize documents ahd other things from the applicant so that they could be used against the applicant, Mr Perin and other 50 defendants affected by the injunction in the contempt . . proceedings ·the respondent had already resolved to pursue: see' the respondent's solicitors 11 August 1993 letter. 60 2 JUDGMENT -- 2 of 8 -- 270893 The order which the Chamber Judge was prevailed upon to make was obviously inspired by the usual form of an Anton Filler order. It by required the applicant to permit persons nominated the respondent to enter its premises "forthwith" for specified purposes. Those premises were, as the order recites, "the current residential address of the directors of" the applicant. The permitted purposes were: "searching for, inspecting, photographing and recording therefrom, and placing into the custody and control of the plaintiff's solicitors any: (a) documents, 0 (b) drawings, (c) invoices, accounting, business and financial records, and (d) equipment, relating to or evidencing the supply, sale, delivery, and distribution to Queensland of home gym equipment, the 0 subject of the proceedings •.. " 0 When this order was served on Mr Perin, he submitted. Documents and items were seized. The respondent proposes,to use some of this material to prove its case against the alleged contemners at the hearing to commence on Monday. The applicant now seeks an.order setting aside the Chamb~r Judge's order, contending that it should not have peen made because its object was to facilitate proof of co.nduQt exposing the applicant and others to punishment or penalty. 3 JUDGMENT 10 20 30 40 50 60 -- 3 of 8 -- 270893 The order having been made ex parte, it may be set aside if it should not have been made, even though it h.as been completely executed: Colombia Picture 'Industries Inc. v. Robinson [1987] Ch. 38, 84-5; M Dockray and H Laddie, "Filler Problems", (1990) 106 LQR 601, 618. The point of doing so here is to establish a right to the return of the things seized and copies. The order was not in aid of relief sought against the defendants in the litigation, which, put shortly, is the justification for the Anton Filler injunction: see K Puri, "Copyright Protection by Anton Filler Orders", (1991) 11 QL 31. It was not an order issued for a purpose which incidentally involved some chance of revealing evidence tending to disclose an act of disobedience to a Court order. "Rather, its "specific" (or, as Mr Jackson QC preferred to describe it, dominant) purpose was to facilitate proof of the contempt case: proceedings in which the alleged contemners are exposed to punishment (or, in the case of the corporations, sequestration). In my opinion, an injunction should not be granted for such a purpose. Proceedings to punish for disobedience of an injunction used to be regarded as civil, rather than criminal, contempts: see Parker v United States, 153 F. 2d 66 (1946, 1st cir). More recently, attention to their potentially punitive consequences has led to such proceedings being perceived as having a criminal aspect. In Hinch v. Attorney-General (Victoria) (1987) 164 CLR 15, Deane J (at p 49) said: 4 JUDGMENT 10 20 0' 0 30 0 400 50 60 -- 4 of 8 -- 0 270893 "Proceedings seeking the imposition of suchpunishment upon an alleged contemnor (or an order for sequestration in the case of a company) must realistically be seen as essentially criminal in nature ••• " See also Sun Newspapers Pty Ltd v. Brisbane T.V. Ltd (1989) 92 ALR 535, 541; Comet Products U.K. Ltd v. Hawkex Plastics ~ [1971] 2 QB 67, 73-75; Jennison v. Baker [1972] 2 QB 52, 69-70; The Commissioner of Water Resources v. Federated Engine Drivers and Firemen's Association of Australasia Queensland Branch [1988] 2 QdR 385, 392. Q Since the Glorious Revolution courts of law and equity alike have declined to lend their compulsive process in aid of proceedings which expose persons to punishment or consequences in the nature of a penalty. In Chancery, the issue arose in connection with discovery; and the general rule was established more than 250 years ago. In Smith v. Q Read (1736) 1 AtK 526, 527, Lord Hardwicke LC said: 0 "There is no rule more established in equity, than that a person shall not be obliged to discover what will subject him to a penalty, or anything in the nature of a penalty. Under the rule, a man is not obliged to accuse himself, is implied, that he is not to discover a disability in himself; ••• " This principle has often been applied: see Bishopsgate Investment Management Ltd y. Maxwell [1993] Ch. 1, 17-18; Sorby v. The Commonwealth (1983) 152 CLR 281, 319; The King v. The Associated Northern Collieries ( 1910) 11 CLR 738; Story, Commentaries on Equity Jurisprudence, 2nd Eng. ed. ( 18 9 2 ) , p 1016; cf. Pyneboard Pty Ltd v. Trade Practices Commission (1983) 152 CLR 328, 335-336. 5 JUDGMENT 10 20 30 40 50 60 -- 5 of 8 -- 270893 Exceptionally, the Courts permitted the examination by interrogatories of persons in connection with attachment for contempt. Even this rare vestige of the inquisitional processes of Star Chamber was limited in its operation. In form and in substance those interrogatories had to conform 10 to a specific charge: see S Rapalje, Contempt, (1890) p 170. Blackstone (see Commentaries 8th edition (1778) Book 4, p 287) regarded them, with their potential for self-incrimination, as "not agreeable to the genius of the common law in any other instance." The procedure has not survived in England: Comet Products at p 74. Where, as in Queensland, Rules of Court confer a discretion to order an accused person to "answer on oath ••• interrogatories •.. touching his contempt" (see R.S.C.O. 84 r 6), these days the alleged contemnor is not obliged to answer questions tending to incriminate him: see the decision of Ambrose J concerning the interrogatories delivered in the contempt proceedings in this litigation: 22.July 1993. The antipathy of the common law to compulsory disclosure of wrong-doing which exposed a risk of punishment or penalty conflicts with the notion that the court's coercive powers may be deployed for the avowed purpose of assisting the prosecution of contempt proceedings. It is therefore not surprising that the modern authorities concerning contempt acknowledge that the ·courts will not oblige an alleged contemnor to facilitate proof of the prosecutor's case. JUDGMENT b20 0 30 0 50 60 -- 6 of 8 -- 0 270893 In Crest Homes plc y, Marks [1987] 1 AC 829, Nourse LJ, Croom-Johnson and May L JJ agreeing, said (at p 838): "proceedings for contempt of court, albeit for a civil contempt; are in the nature of criminal proceedings ••• the Court would never make an order for discovery for the purpose, pure and simple, of enabling such proceedings to be brought." See also C.B.S. United Kingdom Ltd y, Perry [1985] FSR 421, 426; Bhimji y Chatwani (No. 3) [1992] 4 All ER 912, 920-921, 928; and A.J. Bekhor & Co. Ltd y. Bilton [1981] 1 QB 923 (where the Court of Appeal held that an order for discovery in aid of a mareva injunction should not be made for the purpose of ascertaining whether there had been past O breaches of the injunction.) It is not to the point that the order was made against a corporation rather than a person. In principle, the same considerations apply: cf. Caltex Refining Co Pty Ltd y. State Pollution Control Commission (1991) 25 NSWLR 118. Nor 0 is it material that the order only req~ired the applicant to permit the seizures, rather than directing it in terms to (), ,. \_ ... hand over the chattels. What matters is that the Court's compulsory process was employed for a purpose foreign to the power. Mr Jackson submitted that, were I to concluQe that the order should be set aside, any consequential orders should not affect the use of the seized material against persons. or 10 20 30 40 50 corporations other than the applicant. I consider that no .SLJcJo( advantage should be derived from the Chamber Judge's order. 60 7 JUDGMENT -- 7 of 8 -- 270893 The order should be set aside. It having been the occasion for the respondent's acquisition of the things seized, they should be returned. Copies have already been filed with affidavits to be relied on at the contempt proceedings. There should be an order that those affidavits be removed 10 from the file and returned to the respondent's solicitors. Then those solicitors must deliver to the applicant's solicitors, for their safe-keeping, the things taken and all copies. 020 I will hear submissions as to the forms of order and costs. 0 HIS HONOUR: Order as per draft. 30 0 a 50 60 8 JUDGMENT -- 8 of 8 --