Citation: Ryan v Wright (No 2) [2004] NSWSC 1019
Court: Supreme Court of New South Wales, Equity Division
Date: 15 November 2004
Judge(s): Gzell J
Background
The proceedings arose from a commercial dispute between shareholders of an information security company. In September 2003, the first defendant gave an undertaking to the Supreme Court that he and his wife would not compete with the plaintiff company or approach its customers.
In the earlier decision (Ryan v Wright [2004] NSWSC 749), Gzell J found that the first defendant had repeatedly breached those undertakings between 4 September and 23 October 2003. During that period, he made or received dozens of telephone calls and emails to major customers of the plaintiff company, visited one customer's offices on six occasions, and performed work for those customers through a separate company he and his wife controlled. The charges against the wife were not proved.
This judgment addressed penalty. The first defendant filed an affidavit at the penalty hearing, which the court allowed only to the extent it went to his state of mind. He was also cross-examined, having consented to that course.
Legal Issues
- Whether the contempt constituted criminal contempt, or merely civil contempt
- Whether a sentence of imprisonment was appropriate in the circumstances
- Whether the court had power under Part 55 r 13(1) of the Supreme Court Rules 1970 to suspend a custodial sentence upon an undertaking to perform community service
- Whether the Crimes (Sentencing Procedure) Act 1999 applied to contempt proceedings of this kind
Decision
Gzell J found that the first defendant's breaches were deliberate and constituted criminal contempt. The pattern of conduct, spanning nearly seven weeks and involving scores of contacts with three separate customers, disclosed wilful disobedience of the court's orders rather than casual, accidental, or unintentional non-compliance. The defendant's own evidence did not suggest otherwise.
The court rejected the defendant's explanation that he had prepared documents for one customer under his competing company's name on advice from his solicitor, noting that no evidence from the solicitor was tendered and the account was implausible. The court also rejected the defendant's belated apology, characterising his overall conduct and demeanour as reflecting belligerent adherence to his own views rather than genuine contrition.
Mitigating factors were identified, including the defendant's clear criminal record, his longstanding charitable involvement since age 15, and the relatively limited period during which the breaches occurred. However, those factors did not displace the need for a sentence of imprisonment. Gzell J sentenced the defendant to 28 days' imprisonment but suspended that sentence on the condition that he perform 250 hours of voluntary community service.
On the question of power, the court was satisfied it could suspend the custodial sentence upon an undertaking to perform community service, treating that mechanism as consistent with the contempt jurisdiction under the Supreme Court Rules 1970.
Orders Made
- A declaration that the first defendant was guilty of contempt of court
- A sentence of 28 days' imprisonment, to commence 28 days after the order took effect
- Suspension of that sentence on condition that the defendant:
- Undertake in writing within 14 days to perform 250 hours of voluntary service at Uniting Care Burnside Hastings Family Support Centre in Port Macquarie
- Provide within 21 days a certificate from the centre coordinator confirming willingness to supervise the service
- Provide within six months a certificate confirming satisfactory completion of the 250 hours
- Appear before the court as required to be further dealt with regarding compliance
- The first defendant to pay the costs of the proceedings
- The Registrar in Equity to retain the defendant's passport until receipt of the completion certificate or further court order
- Orders (3) and (4) stayed for 14 days and to take effect on termination of any stay of execution
Key Takeaways
- Wilful disobedience of a court undertaking, as opposed to casual or accidental breach, constitutes criminal contempt under the principles affirmed in Mudginberri (161 CLR 98)
- A high volume of deliberate contacts with protected parties over a sustained period is capable of demonstrating the wilfulness required for criminal contempt, even where the contemnor claims a subjective belief that the conduct was permissible
- Belated or conditional apologies, particularly where coupled with an ongoing challenge to the court's findings and a belligerent demeanour in the witness box, are unlikely to be accepted as a purging of contempt
- The Supreme Court held it possessed power under Part 55 r 13(1) of the Supreme Court Rules 1970 to suspend a custodial sentence imposed for contempt upon an undertaking to perform community service, notwithstanding questions about the application of the Crimes (Sentencing Procedure) Act 1999 to contempt proceedings
- Mitigating factors such as the absence of prior criminal history and genuine charitable involvement remain relevant to penalty in contempt proceedings, even in cases of criminal contempt
Legislation and Cases Referenced
Legislation:
- Supreme Court Rules 1970, Part 55 r 13(1)
- Crimes (Sentencing Procedure) Act 1999
- Sentencing Act 1989
- Community Service Orders Act 1979
Cases:
- Ryan v Wright [2004] NSWSC 749
- Australian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98
- Director-General of Department of Fair Trading v Yang (2002) 132 A Crim R 438
- NSW v Whiley (1993) 31 NSWLR 314
- Young v Registrar, Court of Appeal (1993) 32 NSWLR 262
- Wood v Galea (1996) 84 A Crim R 274
- Degman Pty Ltd (in liq) v Wright (No 2) (1983) 2 NSWLR 354