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Jorgensen v Fair Work Ombudsman [2019] FCAFC 113 (8 July 2019)
Last Updated: 8 July 2019
FEDERAL COURT OF AUSTRALIA
Jorgensen v Fair Work Ombudsman [2019]
FCAFC 113
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Appeal from:
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File number:
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QUD 314 of 2018
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Judges:
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Date of judgment:
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Catchwords:
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CONTEMPT OF COURT – appeal from
orders made by primary judge on conviction and sentences of imprisonment –
where appellant had been found
guilty of contempt of freezing orders –
where appellant third party to freezing orders – where appeal allowed in
part
– declarations set aside – matter remitted to the Federal
Circuit Court of Australia for retrial
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Legislation:
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Cases cited:
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Admark Property Group Pty Ltd (in liq) v GJ
Building and Contracting Pty Ltd [2016] NSWSC 1309
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Registry:
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Queensland
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Division:
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General Division
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National Practice Area:
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Federal Crime and related proceedings
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Category:
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Catchwords
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Number of paragraphs:
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Counsel for the Appellant: |
Mr S C Holt QC with Ms K W Gover |
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Solicitor for the Appellant:
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Lillas & Loel Lawyers
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Counsel for the Respondent:
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Ms E S Wilson QC with Mr M McKechnie
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Solicitor for the Respondent:
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Ashurst Australia
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ORDERS
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LEIGH ALAN JORGENSENAppellant
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AND:
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FAIR WORK OMBUDSMANRespondent
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GREENWOOD, REEVES AND WIGNEY JJ
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DATE OF ORDER:
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COURT ORDERS THAT:
- The
appeal be allowed in part.
- The
Declarations made by Judge Vasta on 3 May 2018 be set aside.
- Order
1 of the orders made on 10 May 2019 by Judge Vasta be set aside.
- The
matter be remitted to the Federal Circuit Court of Australia for retrial
pursuant to s 28(1)(f) of the Federal Court of Australia Act 1976
(Cth), such retrial to be heard by a judge other than Judge Vasta.
- The
cross-appeal filed by the respondent on 30 May 2018 be dismissed.
- The
respondent pay the appellant’s costs of the appeal and first instance
proceedings as agreed or taxed.
- The
appellant be released from the undertakings he gave to the Court on 11 May
2018.
- The
appellant’s passport be returned to him upon request.
REASONS FOR
JUDGMENT
THE COURT:
- This
is an appeal from orders made in the Federal Circuit Court of Australia
which had the effect of convicting the appellant, Mr Leigh Jorgensen, of
contempt of court and sentencing him to a period of imprisonment.
- At
the time of the events in question, Mr Jorgensen operated a business which sold
tours and adventure activities in Far North Queensland.
He appears to have
operated that business through a number of different entities and in a fairly
disorganised and haphazard way,
at least in an administrative and financial
sense. He also appears at times to have underpaid his employees. The latter
feature
of the business brought Mr Jorgensen and at least one of the entities
through which he conducted the business, A.C.N. 156 455 828
Pty Limited, trading
as Trek North Tours, to the attention of the respondent to this appeal, the Fair
Work Ombudsman. The company A.C.N. 156 455 828 Pty Limited is referred
to throughout this judgment as 828 Pty Limited to avoid confusion which
would otherwise arise because Mr Jorgensen and other companies associated with
him also used the trading
name Trek North Tours.
- In
late 2014, the Ombudsman commenced proceedings in the Circuit Court against 828
Pty Limited and Mr Jorgensen alleging that 828
Pty Limited had contravened s
716(5) of the Fair Work Act 2009 (Cth) because it had
failed to comply with compliance notices issued under that subsection. The
compliance notices required 828
Pty Limited to pay a total of $29,956.75
representing the outstanding wages and entitlements of three of its employees.
The Ombudsman
also alleged that Mr Jorgensen was involved in the contraventions
by 828 Pty Limited. Judgment was entered against both 828 Pty
Limited and Mr
Jorgensen in June 2015. 828 Pty Limited was ordered to pay a pecuniary penalty
of $55,000 and to comply with the
compliance notices. Mr Jorgensen was ordered
to pay a pecuniary penalty of $12,000.
- That
was by no means the end of the matter. On 24 July 2015, the Ombudsman sought
and obtained ex parte freezing orders in the Circuit Court which had the
effect of restraining 828 Pty Limited from disposing of or dealing with any of
its assets other than in certain specified circumstances. The freezing orders
were extended on 30 July 2015. The purpose of the
freezing orders was no doubt
to prevent 828 Pty Limited from frustrating the enforcement of the judgment that
had been obtained against
it. The assets of 828 Pty Limited were defined in the
orders as including “where applicable” money held in certain
specified
bank accounts. The specified circumstances in which 828 Pty
Limited was permitted to deal with or dispose of its assets included,
relevantly, where the dealing or disposal was “in the ordinary and proper
course of [its] business”. The orders, including
a penal notice which
warned of the repercussions of any disobedience of the orders, were served on Mr
Jorgensen in his capacity as
the “proper officer” of 828 Pty
Limited.
- In
October 2017, the Ombudsman commenced proceedings against Mr Jorgensen in the
Circuit Court alleging that he was in contempt of
court. The Ombudsman alleged
that Mr Jorgensen caused 828 Pty Limited to breach the freezing orders in early
to mid-August 2017
by causing funds to be transferred on nine occasions from two
bank accounts which were referred to in the freezing orders. It would
also
appear that at the hearing of the contempt charges the Ombudsman contended that,
in causing Trek North Tours to make the transfers
which were said to breach the
freezing orders, Mr Jorgensen knowingly impeded the administration of
justice.
- After
a four day hearing in late April and early May 2018, the primary judge in the
Circuit Court convicted Mr Jorgensen of nine counts
of contempt of court.
On 10 May 2018, the primary judge sentenced Mr Jorgensen to imprisonment for 12
months, but ordered that he
be released on 20 May 2018 if he paid a sum of money
to the Ombudsman which represented the amount that 828 Pty Limited had initially
been ordered to pay the Ombudsman in the underlying proceeding. His Honour
declined to make any costs order.
- Mr
Jorgensen appealed both his conviction and the sentence imposed on him by the
primary judge. The Ombudsman cross-appealed the
primary judge’s refusal
to make a costs order.
- Mr
Jorgensen’s conviction appeal raises three issues. The first is whether
Mr Jorgensen was denied procedural fairness during
his trial in the Circuit
Court by reason of the primary judge’s excessive and inappropriate
interventions during the course
of his evidence. The second is whether the
primary judge misdirected himself in relation to the proper interpretation of
the “ordinary
and proper course of business” exception in the
freezing orders and the relevant mental element of the contempt charges which
had been brought against Mr Jorgensen. The third issue concerns the
primary judge’s use of a particular documentary exhibit
in making what, at
least on his Honour’s view of the contempt charges, was an important
finding against Mr Jorgensen.
RELEVANT PRINCIPLES – CONTEMPT ARISING FROM BREACH OF
COURT ORDERS
- The
Full Court in Kazal v Thunder Studios Inc (California) [2017] FCAFC 111;
256 FCR 90 at [26] cited with approval the following passage from Metcash
Trading Ltd v Bunn (No 5) [2009] FCA 16 at [9], in which Finn J summarised
the principles which apply where the alleged contempt concerns the breach of a
court order and the alleged
contemnor is a party bound by the relevant
order:
... First, the order alleged to be breached must
be clear and unambiguous: see Australian Consolidated Press Ltd v Morgan
[1965] HCA 21; (1965) 112 CLR 483 at 515-516; and be capable of being complied with: see
Australian Prudential Regulation Authority v Siminton (No 7) [2007] FCA
1609 at [40]. Secondly, the proper construction of an order is not a
matter of fact but a question of law: Universal Music Australia Pty Ltd v
Sharman Networks Ltd [2006] FCAFC 41; (2006) 150 FCR 110 at [19]. Thirdly, it is not
necessary for an applicant to prove that an alleged contemnor intended to
disobey the order: ibid, at [17]; nor is it
necessary to prove that the alleged
contemnor understood the true meaning of the terms of an order or that he or she
was aware that
his or her conduct constituted a breach of the order:
Microsoft Corporation v Marks (No 1) [1996] FCA 709; (1996) 69 FCR 117 at 143.
Nonetheless it may be highly relevant to the question of penalty that the
alleged contemnor disobeyed an order because he
or she placed a construction on
it that was not its true construction: Universal Music Australia Pty Ltd
at [38]. Fourthly, deliberate conduct which is in breach of a court
order will constitute wilful disobedience of the order, and therefore a civil
contempt,
unless the conduct be casual, accidental or unintentional: Louis
Vuitton Malletier SA v Design Elegance Pty Ltd [2006] FCA 83; (2006) 149 FCR 494 at [6].
Fifthly, the facts in issue in a contempt charge must be proved beyond
reasonable doubt: Witham v Holloway (1995) 183 CLR 525 at 534.
(Emphasis in original).
- Thus,
where the alleged contemnor is a party specifically bound by the order, it is
not necessary to prove that they intended to disobey
the order. Rather,
deliberate conduct in breach of the order will be taken to constitute
“wilful disobedience” of the
order unless the conduct is
“casual, accidental or unintentional”.
- The
position is, however, different where the alleged contemnor is not a party bound
by the court order. That will include the situation
where the party bound by
the order is a company and the alleged contemnor is a director of the company.
In such a case, the alleged
contemnor is only liable for contempt if it is
proved, beyond reasonable doubt, that they knowingly aided, abetted, counselled
or
procured the breach of the order: Seaward v Paterson [1897] 1 Ch 545
at 555; ICI Australia Operations Pty Ltd v Trade Practices Commission
[1992] FCA 474; (1992) 38 FCR 248 at 255, 266; Australian Competition and Consumer Commission
v World Netsafe Pty Limited (No 3) [2003] FCA 159; 127 FCR 542 at [86];
Cardile v LED Builders Pty Ltd [1999] HCA 18; 198 CLR 380 at [30]. In
such circumstances, the alleged contemnor is not liable as an accessory, but
rather is directly liable for an independent contempt
committed by themselves in
obstructing the course of justice: Zhu v Treasurer of the State of New South
Wales [2004] HCA 56; 218 CLR 530 at [121].
- A
third party not bound by the court order will only be liable for contempt if
they not only know of the order, but also engage in
conduct which is intended to
frustrate, thwart or subvert the purpose of the order. In CCOM
Pty Ltd v Jiejing Pty Limited [1992] FCA 325; 36 FCR 524 at 530-531,
Drummond J referred to the liability of a party not bound by the order in the
following terms:
Mr McCullagh however is not a party to the action and is
not bound by the undertaking. Such a person is not subject to the strict
liability in contempt which rests upon a person bound by an undertaking that is
breached. However a person who is not in terms bound
by an undertaking but who
knows of it and who then does something which disrupts the situation created by
the undertaking may, but
not necessarily must, be guilty of contempt of
court.
Such a person will be guilty of contempt where his conduct, coupled with his
knowledge of the undertaking, shows that he is flouting
the authority of the
court by doing something which he knows will prevent the undertaking given to
the court achieving its intended
object. Such a person will be in contempt,
because he has “knowingly impeded or interfered with the administration of
justice
by the court in the action between A and B”: see
Attorney-General v Times Newspapers Ltd (supra) (at 1003; 405), per Lord
Brandon. See also Seaward v Paterson [1897] 1 Ch 545 at 555 and Z Ltd
v A-Z and AA-LL [1982] QB 558 at 578.
In Attorney-General v Times Newspapers Ltd, Lord Oliver (at 1018-1019;
419), speaking of the circumstances in which a determination could be made that
a stranger to a court
order which had been breached was guilty of contempt,
said:
“... a more dependable guide is to be
found in the way in which the gravamen of the offence is expressed in the
respondent’s
case and which, I think, must be based upon the speeches in
this House in Attorney-General v Leveller Magazine Ltd [1979] AC 440:
‘The publication ... frustrates, thwarts, or subverts the purpose
[and I interpolate that Lord Oliver emphasised that phrase] of the court’s
order and thereby interferes with the due administration
of justice in the
particular action.’ ‘Purpose’, in this context, refers, of
course, not to the litigant’s
purpose in obtaining the order or in
fighting the action but to the purpose which, in seeking to administer justice
between the parties
in the particular litigation of which it had become seized,
the court was intending to fulfil.”
I think the statement by Lord Oliver most clearly
identifies the features that must be present in the conduct of a stranger to an
order of the court or an undertaking given to the court before he can be found
guilty of contempt where the order or undertaking
is
breached.
- Drummond
J also held that a party not bound by the order will not be liable if they had
an honest but mistaken belief as to the meaning
or operation of the order which,
if correct, would mean that their conduct could not amount to an interference
with the operation
of the order. His Honour said, in that regard (at
532):
And if a stranger, in fact, interferes with the
operation of an undertaking given in an action between A and B, but does so in
the
honest but mistaken belief that the undertaking has a particular meaning
which, if correct, would mean that his conduct could not
be an interference with
this operation, then there is equally a lack of the mens rea necessary to put
him in contempt. This is so,
in my view, no matter how unreasonable the
stranger’s mistaken belief is, so long as it is a belief that is honestly
held.
- Those
passages from the judgment of Drummond J in CCOM were referred to with
approval in Sigalla v TZ Limited [2011] NSWCA 334 at
[14]- [16], [28] (Macfarlan JA, Young JA and Handley AJA agreeing); see also
Admark Property Group Pty Ltd (in liq) v GJ Building and
Contracting Pty Ltd [2016] NSWSC 1309 at [23]- [27].
- The
critical point for the purposes of the present appeal is that, because Mr
Jorgensen was not a party to or directly bound by the
freezing order, the
Ombudsman was required to prove that when Mr Jorgensen caused funds to be
transferred from the frozen bank accounts,
he knew that the transfers breached
the freezing order. As will be seen, that in turn required the Ombudsman to
prove, beyond reasonable
doubt, not only that the transfers did not fall within
the “ordinary and proper course of business” exception, but also
that Mr Jorgensen knew that to be the case and did not honestly, but mistakenly,
believe that the transfers fell within the exception.
- Before
addressing the grounds and contentions advanced by the parties in support of the
conviction appeal, it is necessary to consider
in more detail the terms of the
freezing order, the terms of the contempt charge, the evidence which was before
the primary judge
and the primary judge’s reasons for finding that Mr
Jorgensen was guilty of contempt.
THE FREEZING ORDER
- It
is important to emphasise that the freezing order made on 24 July 2015 (and
extended on 30 July 2015) (the freezing order) was directed to or against
828 Pty Limited, not Mr Jorgensen. The freezing order did not directly
restrain Mr Jorgensen from doing
anything, though subpara 5(b) of the
freezing order provided that “[i]f you are ordered not to do something,
you must not do
it yourself or through directors, officers, partners, employees,
agents or others acting on your behalf or on your instructions or
with your
encouragement or in any other way”. Mr Jorgensen was the sole
director of 828 Pty Limited.
- The
central operative subparagraph of the freezing order was subpara 6(a) which
provided as follows:
You must not remove from Australia or in any way dispose
of, deal with or diminish the value of any of your assets in Australia
(‘Australian assets’) up to the unencumbered value of AUD
$84,956.75 (‘the Relevant Amount’).
- Subparagraph
7(1) of the freezing order defined what Trek North Tour’s assets were for
the purposes of the freezing order.
It was in the following terms:
(1) your assets include:
(a) all your assets, whether or not they are
in your name and whether they are solely or co-owned;
(b) any asset which you have the power, directly or indirectly, to dispose of or
deal with as if it were your own (you are to be
regarded as having such power if
a third party holds or controls the asset in accordance with your direct or
indirect instructions);
and
(c) the following assets in particular:
(i) the assets of your business
A.C.N 156 455 828 PTY LTD TRADING AS TREK NORTH TOURS carried on from:
i. Unit 3, 87 Lake Street, Cairns,
ii. 43 The Esplanade, Cairns,
iii. 53-57 The Esplanade, Cairns, and
iv. Shop 10, 93 The Esplanade, Cairns.
or, if any or all of the assets have been sold, the net proceeds of the sale;
and
(ii) any money in any bank accounts held by A.C.N 156 455 828 PTY LTD TRADING AS
TREK NORTH TOURS, including, where applicable, the
following
accounts:
- Account
Number 451643835 held with either Suncorp Bank, Commonwealth Bank or any other
banking institution,
- Account
Number 452798506 held with either Suncorp Bank, Commonwealth Bank or any other
banking institution, and
- Account
Number 452058391 held with either Suncorp Bank, Commonwealth Bank or any other
banking institution.
- The
terms of subpara 7(1)(c)(ii) of the freezing order are somewhat curious. That
is because, while the chapeau refers to money held
in any bank accounts held by
828 Pty Limited, the three accounts then specified do not appear to have been
accounts held in the name
of 828 Pty Limited.
- The
first account, account number 451643835, was an account held at Suncorp Bank in
the name of Yubnub Pty Ltd. This account will be referred to in these
reasons as the Yubnub account. Mr Jorgensen was a director of Yubnub and
a signatory for the Yubnub account.
- The
proceedings in the court below appeared to have been conducted on the basis that
828 Pty Limited was at all relevant times beneficially
entitled to all of the
funds in the Yubnub account and able to deal with them on that basis. It is not
entirely clear why that was
so. The evidence did suggest that that at least
some of the income derived from the business of Trek North Tours was deposited
into
the Yubnub account, even though strictly speaking 828 Pty Limited, not
Yubnub, owned or conducted the business. The evidence did
not, however, appear
to go so far as to suggest that all of the funds in the Yubnub account were at
all times assets of 828 Pty Limited.
Mr Jorgensen operated a number of
different bank accounts in different names and appeared to deal with the funds
in those accounts
without any particular regard to which entity or business was
entitled to them. The precise provenance of the funds in the Yubnub
account at
any given time was not the subject of any evidence or close analysis at the
hearing of the contempt charges.
- The
second account, account number 452798506, was an account held at the Suncorp
Bank in the name “Mr L A Jorgensen t/a Trek
North Tours”. This
account will be referred to in these reasons as the Jorgensen TNT
account. It again appeared to be common ground that some of the revenue
derived from the Trek North Tours business was deposited into this
account. It
was nevertheless an account held in Mr Jorgensen’s name, not in the name
of 828 Pty Limited. Not surprisingly,
Mr Jorgensen was a signatory for this
account.
- The
third account, account number 452058391, was not the subject of any evidence or
consideration at the hearing of the contempt charges.
It was not an account
from which any funds were relevantly transferred.
- The
other curiosity about subpara 7(1)(c)(ii) of the freezing order is that it
includes the words “where applicable”.
It is not entirely clear
what those words mean in the context in which they are used in the freezing
order. In its submissions
on this appeal, the Ombudsman asserted that the words
“where applicable” were superfluous. If that is the case, it is
unclear why they were included in the freezing order. The better view would
appear to be that the words “where applicable”
were intended to
operate so as to ensure that the funds in the three specified accounts were only
considered to be an asset of 828
Pty Limited for the purposes of the freezing
order if the funds were beneficially owned by 828 Pty Limited, or if 828 Pty
Limited
had the power to dispose of the funds as if they were its own.
Ultimately, however, nothing of significance turned or turns on this
issue. As
already noted, the proceeding below appeared to be conducted on the basis that
828 Pty Limited had the power to dispose
of the funds in the relevant accounts
as if they were its own. Mr Jorgensen did not contend that the freezing order
were in any
respect unclear, ambiguous or incapable of compliance.
- The
other critical paragraph to consider is para 10, which specified certain
exceptions to the operation of the freezing order. It
was in the following
terms:
This order does not prohibit you
from:
(a) Paying the remuneration and employee
entitlements of the First Respondent’s employees as required by law;
(b) Paying $15,000 for legal expenses;
(c) dealing with or disposing of any of your assets in the ordinary and
proper course of your business, including paying business expenses
bona fide and
properly incurred; and
(d) in relation to matters not falling within (a), (b) or (c), dealing with or
disposing of any of your assets in discharging obligations
bona fide and
properly incurred under a contract entered into before this order was made,
provided that before doing so you give
the applicant, if possible, at least two
working days written notice of the particulars of the obligation.
(Emphasis added.)
- The
terms of subpara 10(c) of the freezing order are particularly critical having
regard to the issues that arose both before the
primary judge and on appeal.
The important point to note about that subparagraph is that the operative words
are “in the ordinary
and proper course of your business”. The
dealing or disposition of assets in the “ordinary and proper course”
of the business is said to include “paying business expenses bona fide and
properly incurred”, but that is only one example
of such a dealing or
disposition. The exception is not limited to paying business
expenses.
THE CONTEMPT CHARGE
- Section
17 of the Federal Circuit Court of Australia Act 1999 (Cth) provides that
the Circuit Court has the same power to punish contempts of its power and
authority as is possessed by the High
Court in respect of contempts of the High
Court. Rule 19.02(1) of the Federal Circuit Court Rules
2001 (Cth) provides that if it is alleged that a person has committed a
contempt of Court (other than contempt in the face or hearing
of the Court), an
application may be made for the person to be dealt with for the contempt. Rule
19.02(2) provides, amongst other
things, that an application must “state
the contempt alleged”.
- The
application filed by the Ombudsman in the Circuit Court in relation to the
alleged contempt by Mr Jorgensen was in some respects
fairly unclear or
uninformative in terms of stating the “contempt alleged”. The
application sought the following declaration:
1. A declaration that the Respondent is in contempt of
the Court;
(a) in
that:
(i) on or about 4 August 2015,
the Respondent authorised and directed the electronic transfer of funds in the
amount of $2,330.00
from Suncorp Bank Business Everyday Account (BSB 484-799
Number 451643835) in the name of Yubnub Pty Ltd (Yubnub Account), being
an account and moneys in respect of which ACN 156 455 828 Pty Ltd trading as
Trek North Tours (Trek North Tours) had a beneficial interest, into the
Suncorp Bank Access Equity Account (BSB 484-799 Number 503197972) held in the
name of Leigh
Alan Jorgensen/Leigh Jorgensen Family Trust (Family Trust
Account);
(ii) on or about 6 August 2015, the Respondent authorised and directed the
electronic transfer of funds in the amount of $8,001.00
from the Yubnub Account,
being an account and moneys in respect of which Trek North Tours had a
beneficial interest, into the Family
Trust Account;
(iii) on or about 9 August 2015, the Respondent authorised and directed the
electronic transfer of funds in the amount of $9,996.95
from the Yubnub Account,
being an account and moneys in respect of which Trek North Tours had a
beneficial interest, into the Family
Trust Account;
(iv) on or about 9 August 2015, the Respondent authorised and directed the
electronic transfer of funds in the amount of $4,558.00
from the Suncorp Bank
Business Everyday Account (BSB 484-799 Number 452798506) in the name of Leigh
Alan Jorgensen T/A Trek North
Tours (Trek North Tours Account), being an
account and moneys in respect of which Trek North Tours had a beneficial
interest, into the Family Trust Account;
(v) on or about 10 August 2015, the Respondent authorised and directed the
electronic transfer of funds in the amount of $2,569.00
from the Yubnub Account,
being an account and moneys in respect of which Trek North Tours had a
beneficial interest, into the Family
Trust Account;
(vi) on or about 11 August 2015, the Respondent authorised and directed the
electronic transfer of funds in the amount of $4,621.00
from the Yubnub Account,
being an account and moneys in respect of which Trek North Tours had a
beneficial interest, into the Family
Trust Account;
(vii) on or about 12 August 2015, the Respondent authorised and directed the
electronic transfer of funds in the amount of $4,713.64
from the Yubnub Account,
being an account and moneys in respect of which Trek North Tours had a
beneficial interest, into the Family
Trust Account;
(viii) on or about 13 August 2015, the Respondent authorised and directed the
electronic transfer of funds in the amount of $1,255.97
from the Yubnub Account,
being an account and moneys in respect of which Trek North Tours had a
beneficial interest, into the Family
Trust Account; and
(ix) on or about 14 August 2015, the Respondent authorised and directed the
electronic transfer of funds in the amount of $2,990.00
from the Yubnub Account,
being an account and moneys in respect of which Trek North Tours had a
beneficial interest, into the Family
Trust
Account,
(b) in circumstances
where:
(i) on 24 July 2015, Judge
Jarrett made orders addressed to the Proper Officer of Trek North Tours in
Federal Circuit Court Proceeding
No BRG 1009 of 2014 (Order);
(ii) order 6 of the Order restrained Trek North Tours from removing from
Australia or in any way disposing of, dealing with or diminishing
the value of
any assets which are in Australia up to an unencumbered value of
AUD$84,956.75;
(iii) the Respondent was informed of the terms of the Order by email at about
4.21 pm on 24 July 2015 and was aware of the terms
of the Order on or before 30
July 2015;
(iv) the Respondent appeared before Judge Jarrett upon the extension of the
Order on 30 July 2015 (Extended Order);
(v) order 2 of the Extended Order varied the Order so that it had effect until
further order;
(vi) the Respondent was informed of the terms of Extended Order during the
hearing before Judge Jarrett on 30 July 2015 and the orders
were subsequently
emailed to him by Sarah Hedger on 27 August 2015; and
(vii) the withdrawals do not fall within the exceptions listed at paragraph 10
of the Order.
- The
application also sought an order that Mr Jorgensen “be punished or
otherwise dealt with for the contempt”.
- The
grounds of the application were stated as being that Mr Jorgensen, “having
knowledge of the Orders made by Judge Jarrett
[the freezing orders], caused Trek
North Tours [828 Pty Limited] to fail to comply with paragraph 6 of the
Order”.
- Insofar
as it could be said that the application filed by the Ombudsman contained a
statement of the “contempt alleged”,
as required by r 19.02(2) of
the Circuit Court Rules, the statement suggested that the alleged contempt was
comprised of the following
elements.
- First,
that the freezing order restrained 828 Pty Limited from dealing with or
disposing of its assets.
- Second,
that Mr Jorgensen had knowledge of the freezing order.
- Third,
that 828 Pty Limited had a beneficial interest in the funds in the Yubnub and
Jorgensen TNT accounts, or otherwise had the
power to deal with or dispose of
those funds as if they were its own.
- Fourth,
that Mr Jorgensen authorised and directed the electronic transfer of funds from
the Yubnub and Jorgensen TNT accounts to an
account held in the name of either
Leigh Alan Jorgensen or Leigh Jorgensen Family Trust.
- Fifth,
that the “withdrawals” did not fall within the exceptions in
paragraph 10 of the freezing order.
- Sixth,
that Mr Jorgensen thereby caused 828 Pty Limited to fail to comply with
paragraph 6 of the freezing order.
- The
important point to emphasise at this juncture is that, while the Ombudsman
alleged that Mr Jorgensen knew about the freezing order,
it was not specifically
alleged that Mr Jorgensen knew that the funds transfers that he authorised and
directed breached the freezing
order. Similarly, while the Ombudsman alleged
that the transfers or withdrawals did not fall within the exception in paragraph
10(c)
of the freezing order, it was not alleged that Mr Jorgensen knew that
the transfers did not fall within that exception. Nor did
the Ombudsman allege,
in the application at least, that Mr Jorgensen knowingly impeded the
administration of justice or knowingly
aided and abetted 828 Pty Limited’s
failure to comply with the freezing order.
THE OMBUDSMAN’S EVIDENCE AND SUBMISSIONS IN THE CIRCUIT
COURT
- Rule
19.02(2)(c) of the Circuit Court Rules provides that an application which
alleges that a person has committed a contempt must
be “supported by an
affidavit setting out the facts relied on”. The Ombudsman’s
application was supported by an
affidavit sworn by a lawyer employed in the
Ombudsman’s office, Mr Samuel Prain. The Ombudsman subsequently
filed and relied on another affidavit sworn by Mr Prain.
- The
first affidavit sworn by Mr Prain on 11 October 2017 was a lengthy affidavit
which annexed a very large number of documents.
Neither of the parties to this
appeal took the Court to this affidavit or referred to any part of it in their
submissions. That
may perhaps have been because, as will be seen, the primary
judge also did not expressly or directly refer to any part of this affidavit.
The parties also did not include all of the annexures to Mr Prain’s first
affidavit in the Appeal Book. In those circumstances,
it is unnecessary to
refer at length to the contents of Mr Prain’s affidavit or the annexures
thereto. It suffices to make
the following brief points.
- First,
Mr Prain’s first affidavit contained a detailed chronological account of
the underlying proceeding commenced by the Ombudsman
in relation to the alleged
contraventions of the Fair Work Act by 828 Pty Limited and the making and
service of the freezing order against that company. That chronological account
was not contentious.
There was no dispute that Mr Jorgensen was aware of
the freezing order at the time he caused or directed the relevant funds
transfers.
- Second,
Mr Prain’s first affidavit annexed a large bundle of bank statements which
had been produced on subpoena by Suncorp
Bank. The bundle included statements
for a number of different bank accounts, including the Yubnub account, the
Jorgensen TNT account
and the account held in the name Leigh Alan Jorgensen or
Leigh Jorgensen Family Trust. The latter account will be referred to in
these
reasons as the Family Trust account. As was noted earlier, the
Ombudsman’s case was that the nine breaches of the freezing order all
involved transfers of funds
into the Family Trust account. There was no dispute
that those funds transfers occurred or that Mr Jorgensen caused them to be
made.
- Third,
Mr Prain referred in his first affidavit to an “enforcement hearing”
in the Circuit Court. That hearing took place
on 24 March 2016 and was said to
be a hearing in accordance with r 29.11 of the Circuit Court Rules. That
rule provides that a party
may apply to the Circuit Court “to issue a
writ, order or any other means of enforcement of a judgment or order”.
Unfortunately,
the enforcement summons was not included in the Appeal Book and
there is no indication of exactly what orders had been applied for
or were made
pursuant to r 29.11. As a result, it is not known exactly what “writ,
order or any other means of enforcement”
the Ombudsman had applied for.
It is also not entirely clear what the so-called enforcement hearing
specifically involved, though
it appears from the transcript of the enforcement
hearing that Mr Jorgensen had been required to attend court for examination
about
the financial affairs of 828 Pty Limited. Nor, indeed, is it entirely
clear exactly what judgment or order the Ombudsman was seeking
to enforce,
though it may fairly be assumed that it was the judgment which ordered 828 Pty
Limited to pay the amounts which were
the subject of the compliance
notices.
- In
any event, it would appear that Mr Jorgensen was examined by the
Ombudsman’s counsel at the enforcement hearing. Mr Prain’s
first
affidavit annexed a transcript of the enforcement hearing held on 24 March 2016,
including Mr Jorgensen’s evidence.
It would also appear that Mr Jorgensen
produced a number of documents to the Circuit Court during the enforcement
hearing. Mr Prain’s
first affidavit annexed some, but apparently not all,
of those documents, or at least some of them.
- Fourth,
Mr Prain’s first affidavit contained what appeared to be a relatively
uncontroversial narrative of the relevant entries
in the bank statements which
evidenced the relevant funds transfers.
- Mr
Prain’s second affidavit was sworn on 7 February 2018. It simply annexed
various subpoenas and notices to produce which
had been issued to the
Commonwealth Bank of Australia, together with a very large number of bank
statements which had been produced
in answer to the subpoenas and notices. It
also contained Mr Prain’s analysis of the balances of various bank
accounts at
various times. The contents of Mr Prain’s second affidavit
was not referred to in the judgment of the primary judge. Nor
was this Court
taken to any part of it by either party in their submissions in relation to the
appeal. The relevance of Mr Prain’s
analysis of the balances of some
of the bank accounts is not immediately apparent.
- The
only other evidence apparently relied on by the Ombudsman before the primary
judge was documentary evidence in the form of invoices
issued to “Trek
North Tours” by Queensland Rail Limited, a copy of the
discretionary trust deed for the Leigh Jorgensen Family Trust dated 5 February
2014 and a letter from an accountant
based in India which appeared to be dated
1 March 2016 (Exhibit 4). The latter document was produced by
Mr Jorgensen during the enforcement hearing. He was asked some questions
about it during
that hearing. As will be seen, it was tendered by the Ombudsman
in the proceeding before the primary judge so as to provide a “complete
record” of the enforcement hearing. It also featured prominently in the
primary judge’s reasons. The primary judge’s
use or reliance on
Exhibit 4 in making certain findings is the subject of one of Mr
Jorgensen’s appeal grounds.
- The
Ombudsman’s case as articulated in its submissions in the Circuit Court
was that Mr Jorgensen’s conduct in authorising
or directing the
transfers from the Yubnub account to the Family Trust account constituted a
criminal contempt. It was submitted
that Mr Jorgensen was the “proper
contemnor” even though 828 Pty Limited was the party bound by the freezing
order because
he had knowledge of the freezing order and assisted 828 Pty
Limited to disobey them. The Ombudsman submitted that the elements of
the
contempt it was alleging against Mr Jorgensen were: first, the
existence of the freezing order; second, the terms of the freezing order
were clear, unambiguous and capable of compliance; third, knowledge of
the freezing order; and fourth, the alleged contemnor, Mr Jorgensen,
knowingly impeded the administration of justice.
- It
is unnecessary, for present purposes, to outline the Ombudsman’s
submissions in relation to the first three elements. It
would appear that they
were essentially not in issue in the Circuit Court and, even if they were, they
were not the subject of any
relevant issue in this appeal. As for the fourth
element, the Ombudsman’s submission was essentially that Mr Jorgensen
knowingly
impeded the administration of justice because he knew of the existence
of the freezing order and yet authorised or directed the payments
from two of
the frozen bank accounts into the Family Trust account.
- The
Ombudsman’s case was that the relevant transfers contravened the freezing
order because they did not fall within any of
the exceptions in the freezing
order, including the “ordinary and proper course of business”
exception in para 10(c)
of the freezing order. It was submitted in that regard
that Mr Jorgensen’s evidence did not establish a reasonable possibility
that the payments were made in the “ordinary and proper course” of
828 Pty Limited’s business. The Ombudsman’s
primary submission in
that respect was that the payments into the Family Trust account did not
constitute the payment of 828 Pty
Limited’s business expenses.
- In
the Ombudsman’s submission, Mr Jorgensen’s evidence rose no higher
than an assertion that the payments related to “generic
business
expenses” which he was not able to particularise. It was also submitted
that, as at 30 July 2015, when the freezing
order was extended, the Family Trust
account was “in the black” and therefore 828 Pty Limited could not
have owed anything
to Mr Jorgensen in respect of the payment of past
business expenses. The Ombudsman pointed out that each of the payments to the
Family Trust account had the effect of “clearing out” the Yubnub
account and submitted that the apparent intention of
the payments was simply to
reduce the amount of interest payable in respect of any debit balance in the
Family Trust account. The
Ombudsman submitted that, even if the payments had
something to do with the payment of business expenses, they were not
“proper”
because there was no loan agreement between 828 Pty Limited
and Mr Jorgensen and no proper records maintained by the business.
- While
the Ombudsman submitted that the payments did not fall within the exception in
para 10(c) of the freezing order, it was not
submitted, at least directly,
that the evidence established that Mr Jorgensen knew that the payments did not
fall within that exception.
The Ombudsman did attack Mr Jorgensen’s
credibility as a witness and the reliability of his evidence. The submissions
made
in that regard, however, were directed to the question whether Mr Jorgensen
had established a reasonable possibility that the exception
in para 10(c)
of the freezing order applied. They were not directed to Mr Jorgensen’s
evidence that he believed that the payments
fell within that exception.
At the very conclusion of the Ombudsman’s oral submissions it was put
to the primary judge that
he “may think it was a wilful and deliberate
attempt to disobey the orders”, though the precise basis upon which it was
submitted that the primary judge might arrive at that conclusion was not
articulated at all.
- It
is also important to emphasise in this context that the Ombudsman expressly
disavowed that its case against Mr Jorgensen was that
he had intentionally
cleared the Yubnub account so that the funds in that account were not available
for payment of the judgment
debt owing by 828 Pty Limited. The following
exchange occurred in the course of the final submissions for
Mr Jorgensen:
MS GOVER [Counsel for Mr Jorgensen]: My learned friend
– the applicant has submitted that he [Mr Jorgensen] has intentionally
cleared funds specifically to avoid those funds being in the business account,
so that they could be available for payment of the
judgment debt or recovery of
the judgment debt. I apologise if I’ve misstated that.
HIS HONOUR: Yes. I don’t know that ---
MS WILSON [Counsel for the Ombudsman]: I never made that submission, your
Honour.
- Counsel
for the Ombudsman went on to say that, insofar as Mr Jorgensen’s intention
was concerned, the Ombudsman’s case
was only that Mr Jorgensen’s
conduct in transferring the funds in question was intentional in the sense that
“[i]t was
an intentional act to take those funds away”. The primary
judge confirmed that his understanding of the Ombudsman’s
case concerning
Mr Jorgensen’s state of mind was that “these were intentional acts,
in that it wasn’t reckless,
it wasn’t an administrative
oversight” and that it “was a conscious decision to take monies out
of the frozen accounts
for at the very least a purpose of reducing the interest
that would have to be paid by the family trust”.
MR JORGENSEN’S EVIDENCE AND SUBMISSIONS IN THE CIRCUIT
COURT
- Before
the primary judge, Mr Jorgensen relied on an affidavit sworn by him on 30 April
2018. That affidavit included Mr Jorgensen’s
general description of the
business conducted by Trek North Tours and his account of the original
proceedings commenced by the Ombudsman
and the making and service of the
freezing order. It is unnecessary to refer to those aspects of Mr
Jorgensen’s evidence.
Suffice it to say that Mr Jorgensen said that his
understanding was that the freezing order were subject to some exceptions, which
included that he was “permitted to deal with or dispose of funds from the
Frozen Accounts in the ordinary course of [his] business,
including payment of
business expenses”.
- Mr
Jorgensen’s affidavit dated 30 April 2018 included the following evidence
(at [15]-[26]) concerning the funds transfers which
were the subject of the
contempt charges (referred to in the affidavit as the Withdrawals):
- I
confirm that I was the only person with access to and control of the Frozen
Accounts at the time the Withdrawals were made. I cannot
recollect making those
particular transactions but accept that I did.
- The
Trek North Tours business had significant outgoings, including monthly rental
payments for the retails outlets from which it operated
and monthly invoices
from Skyrail and Queensland Rail.
- At
the time the Withdrawals were made, it was my practice was [sic] to pay some
business expenses from the Family Trust Account. I
also paid business expenses
with a Commonwealth Bank Mastercard in my own name (5523 5052 7025 0991)
(the Mastercard).
- I
usually repaid the Mastercard from a Commonwealth Bank Complete Access Account
(BSB 064-804, Account 000436254) in my own name (the CBA Account). I also
transferred large lump sums from the Family Trust Account into the CBA Account.
The CBA Account was closed by the Commonwealth
Bank in around November 2017.
They advised this was for “commercial reasons”. I can no longer
access those accounts and
cannot access by [sic] old bank statements via
internet banking.
- Statements
for the CBA Access Account and Mastercard are included at pages 15 to 104 of
Annexure SP-27 of the affidavit of Samuel
David Walter Prain dated 7 February
2018 (Mr Prain’s Second Affidavit).
- The
repayment of business expenses paid from the Family Trust Account was done on an
ad hoc basis and cashflow through the business
was variable. Rather than
repaying specific amounts for particular business expenses, I would transfer
money into the Family Trust
Account when funds were available in the Trek North
Tours Account or Yubnub Account. This was to reduce the line of credit whenever
I could and lower the interest. I would empty whatever funds were in those
accounts to reduce the overall debt.
- I
would also transfer money from the Yubnub Account to the Trek North Tours
Account to cover business expenses.
- By
the time it went into liquidation, Trek North Tours owed $177,652 to Yubnub for
payment of business expenses. Annexed hereto and
marked
‘LAJ-1’ is a copy of the financial statements for Yubnub for
the year ending 30 June 2016, confirming a debt in that amount.
- The
Trek North Tours business expenses paid from the Family Trust Account included
payments made to the following accounts:
- 084472
791708952 – This is the bank account of Skyrail, referred to in paragraph
5 above. Annexed hereto and marked ‘LAJ-2’ is a copy of an
invoice from Skyrail dated 16 March 2018 which contains these bank account
details.
- 014734
493250736 – This is the bank account of A & K Ankars Pty Ltd, the
lessor of Shop 10, Calypso Plaza, Shields Street
in Cairns. The lease was held
by Yubnub and Trek North Tours operated out of a retail store out [sic] those
premises until it went
into liquidation. This store has now closed. The premises
were leased through Cairns Commercial real estate agents. There was never
any
formal sublease agreement between Yubnub and Trek North Tours in respect of
these premises. Annexed to this affidavit and marked
‘LAJ-3’
is a true copy of an invoice from A & K Ankars Pty Ltd dated 25 July 2016
which contains these bank account details.
- 064013
010030050 – This is a bank account operated by Queensland Rail. Annexed to
this affidavit and marked ‘LAJ-4’ is a true copy of an
invoice from Queensland Rail dated 28 August 2016 which contains these bank
account details. In the past
I have paid Queensland Rail using their bank
details on some occasions, and on other occasions by using the BPAY reference
provided
on the invoice.
- The
Trek North Tours business expenses paid from the Mastercard included frequent
payments made to the following payees:
- “Rainforestation
Pty Kuranda AUS” – Rainforestation is a nature park in Kuranda,
Queensland. As Kuranda is the destination
of the Skyrail, Rainforestation was a
component of Trek North Tours’ daytrip packages; and
- “Queensland
Rail Limi Brisbane AUS” – As to the relationship between Trek North
Tours and Queensland Rail, see paragraph
4 above.
- After
the freezing orders were made, I continued to operate my business and pay
outgoings as I usually would. However, I did not draw
any personal income from
the Frozen Accounts. The Withdrawals were made to repay the Family Trust Account
for business outgoings
previously paid on behalf of Trek North Tours,
particularly the large, frequent payments to Skyrail and Queensland Rail. This
was
my usual practice at that time. The Withdrawals were not for personal
use.
- For
the reasons above, at the time I made the Withdrawals I believed they fell
within the exception to the Freezing Order.
- It
should be noted that the references to Trek North Tours in Mr Jorgensen’s
affidavit were references to 828 Pty Limited and
that the references to the Trek
North Tours account were references to the Jorgensen TNT account.
- As
can be seen, in short summary Mr Jorgensen’s evidence was that it had for
some time been his practice to pay business expenses
payable by Trek North Tours
out of the Family Trust account and to transfer funds from the Yubnub account to
“cover”
those business expenses. That practice continued after the
freezing order were made. Critically, his evidence was that the relevant
funds
transfers were made to repay the Family Trust account for “business
outgoings previously paid on behalf of Trek North
Tours” and that he
believed that they therefore fell within the “ordinary and proper course
of your business” exception
in subpara 10(c) of the freezing order.
- Mr
Jorgensen was cross-examined at considerable length by counsel for the
Ombudsman. He was also questioned at length by the primary
judge during
the course of the cross-examination. The questioning of Mr Jorgensen by both
counsel for the Ombudsman and the primary
judge occurred over three days.
- It
is neither necessary nor desirable at this stage to discuss Mr Jorgensen’s
oral evidence at length. It suffices to say that,
despite extensive questioning
concerning the conduct of the business of Trek North Tours and the operation of
the relevant bank accounts,
Mr Jorgensen maintained that the funds transfers
from the Yubnub and Jorgensen TNT accounts to the Family Trust account were all
repayments of business expenses of the Trek North Tours business which had
earlier been paid out of the Family Trust account. The
business expenses were
first paid from the Family Trust account because that was the only line of
credit available to Mr Jorgensen.
- Mr
Jorgensen conceded that he was unable to say exactly what business expenses the
impugned funds transfers specifically related to
and agreed that the amounts did
not correspond with any particular invoices. Rather, the transfers were made
whenever business funds
became available in, relevantly, the Yubnub account and
generally had the effect of clearing the account until further funds were
paid
into it. This was done in part to ensure that the debit balance of the Family
Trust account was reduced to minimise the amount
of interest that was payable.
He maintained that this was the way he had always conducted the Trek North
Tours business and operated
the relevant accounts and that he therefore believed
that the funds transfers fell within the exception in subpara 10(c) of the
freezing
order. That was because he believed that the funds transfers were in
the “ordinary and proper course” of the business
of Trek North Tours
and 828 Pty Limited.
- In
his submissions to the primary judge, Mr Jorgensen pointed to documentary
evidence which supported or corroborated his case that
the impugned transfers
were simply a continuation of the practice that he had for some time adopted of
first paying business expenses
out of the Family Trust account and then
reimbursing the Family Trust account from business funds when received in the
Yubnub account.
He submitted that an analysis of the Family Trust account
statements showed that, for some considerable time prior to the making
of the
freezing order, business expenses of the Trek North Tours business were
regularly paid out of the Family Trust account. Those
payments included fairly
regular payments to “Skyrail” and Queensland Rail.
- In
relation to the specific funds transfers, Mr Jorgensen pointed out that the
Family Trust account statements showed that on 3 August
2015, the day before the
first of the impugned transfers to the Family Trust account was made, two
“Bpay” payments were
made to Queensland Rail from the Family Trust
account. Those payments, for $24,628.69 and $9,937.60 were referable to
invoices issued
by Queensland Rail to the Trek North Tours business in respect
of the Kuranda Scenic Railway. Those invoices, which were in evidence,
were
dated 13 June and 30 June 2015 respectively. The bank statements also revealed
that on 14 August 2015, an amount of $7,500
was transferred from the Family
Trust account to the Jorgensen TNT account. Mr Jorgensen contended that the
evidence therefore showed
that in the period from 3 August 2015 (the day before
the first of the impugned payments) to 14 August 2015 (the date of the last
of
the impugned payments), the Family Trust account was used to pay $42,066.29
towards the business expenses of the Trek North Tours
business and $41,005.56
was transferred to the Family Trust account from the Yubnub and Jorgensen TNT
accounts.
- In
Mr Jorgensen’s submission, it did not matter that the amounts paid to
reimburse the Family Trust account did not precisely
coincide with the invoices
paid from the Family Trust account. Nor did it matter that Mr Jorgensen’s
way of doing business
was unsophisticated, if not haphazard. The impugned
payments were in keeping with the way the business had always been operated
by
Mr Jorgensen and were therefore made in the ordinary and proper course of the
business.
JUDGMENTS OF THE PRIMARY JUDGE
- On
30 April 2018, the primary judge delivered an ex tempore judgment
rejecting Mr Jorgensen’s application that he had no case to answer.
His Honour found that Mr Jorgensen had a case
to answer based on the evidence
adduced in the Ombudsman’s case because there was scant evidence
concerning the relevant transactions
and the way the bank accounts were
operated. The evidence at that point did not, of course, include the evidence
in Mr Jorgensen’s
affidavit.
- On
3 May 2018, the primary judge delivered an ex tempore judgment (the
Judgment) in which he found that the Ombudsman had proved each of the
nine charges of contempt beyond reasonable doubt and convicted Mr Jorgensen
accordingly.
- The
primary judge accepted the Ombudsman’s submission that the contempt
charges against Mr Jorgensen required the Ombudsman
to prove four elements: that
there was a court order in existence; that the terms of the order were clear,
unambiguous and capable
of compliance; that Mr Jorgensen had knowledge of the
order; and that Mr Jorgensen knowingly impeded the administration of justice:
Judgment at [46]. His Honour found that the first three elements were
“easily met” and that the fourth element was the
focus of the trial:
Judgment at [47]-[50]. His Honour accepted that it was for the Ombudsman to
prove each of the elements beyond
reasonable doubt: Judgment at [52].
- As
for the “exception” in subpara 10(c) of the freezing order, the
primary judge proceeded on the basis that it was for
Mr Jorgensen to show that
there was evidence upon which it could be found that the relevant payments fell
within the exception and
that once that was shown it was for the Ombudsman to
negate the exception beyond reasonable doubt: Judgment at [52]-[53]. It should
perhaps be noted, in this context, that the primary judge’s findings in
this regard are consistent with the decision of Zammit
J in Fortune Holding
Group Pty Ltd v Zhang (No 2) [2017] VSC 738 at [31]- [49]; compare
Australian Securities and Investments Commission v Sigalla (No 3) [2010]
NSWSC 1076 at [46]- [48].
- The
primary judge then purported to address the question whether the relevant
“disposition of assets” occurred in the
“ordinary course of
business and in the proper course of the business”: Judgment at [54]. That
was no doubt a reference
to the question whether the relevant withdrawals or
transfers fell within the exception in subpara 10(c) of the freezing order.
His
Honour considered that the answer to that question turned in part on whether the
relevant withdrawals were “bona fide business
expenses which were properly
incurred”: Judgment at [54]. While it is not entirely clear, it would
appear that the primary
judge accepted that Mr Jorgensen had met his
evidentiary onus of adducing evidence that raised a reasonable possibility that
the
transfers fell within subpara 10(c) of the freezing order and that the
question was whether the Ombudsman had discharged its legal
burden of proving
beyond reasonable doubt that they did not.
- The
primary judge found that the transfers were not the payment of “business
expenses bona fide and properly incurred”
(Judgment at [54]). His
Honour’s reasons for so finding are not, however, entirely clear or easy
to understand. His Honour
appears to have accepted, or at least proceeded on
the basis that, when he made the transfers, Mr Jorgensen was essentially
reimbursing
or repaying the Family Trust account because funds in the Family
Trust account had been used to pay expenses of the Trek North Tours
business.
His Honour in effect found, however, that any reimbursement or repayment
obligations that 828 Pty Limited may have had
to the Family Trust arising from
the use of funds in the Family Trust account to pay business expenses of Trek
North Tours were not
business expenses. His Honour reasoned as follows (at
[59]-[61]):
I do not think that these payments can be categorised as
business expenses. A business expense would occur if the Respondent (or the
company) were paying a creditor but repaying a family trust who has paid a
creditor, is not a business expense itself and certainly
not in this case.
If one goes through the history of how these payments had been made, it is
obvious to me that it does not really matter to the Respondent
as to which
entity pays the bill as long as, whenever there is too much credit in either of
the business accounts that do not have
debit or overdraft facilities, there is
the minimum amount of debt in any other account for which a debit facility is
enabled. That
does not mean that the transferring of money becomes the payment
of a business expense.
I accept the submission of the Applicant that, in such circumstances as obtained
in this case, what was created was at the most,
a financial obligation, maybe
even a legal obligation, on behalf of the business to pay the family trust. Such
obligations are not
business expenses.
- The
primary judge also considered that it was important that the transfers or
withdrawals did not correspond with the “actual”
payments of the
Trek North Tours expenses out of the Family Trust account and that the
withdrawals, in that respect, were “sporadic”:
Judgment at [70].
His Honour also considered that it was significant that the withdrawals on
each occasion “cleared the account”,
by which his Honour meant that
the withdrawals reduced the balance of the Yubnub account to nil or almost nil,
and that the transfers
reduced the “interest rates” on the Family
Trust account: Judgment at [71]. His Honour’s reference to reducing
the
“interest rates” was presumably a reference to the fact that the
transfers into the Family Trust account reduced
the debit balance of that
account and meant that less interest was payable.
- The
primary judge also held that the transfers or withdrawals were not, in any
event, made in the “ordinary and proper course
of [828 Pty
Limited’s] business”: Judgment at [72]. His Honour appears to
have accepted that Mr Jorgensen had, in the
past, conducted the business of Trek
North Tours by using the Family Trust account to pay business expenses and then
reimbursing
the Family Trust account by transferring funds from the Yubnub
account. His Honour held, however, that it did not follow that the
conduct of
the business in that way was “ordinary and proper”: Judgment at
[72]. His Honour reasoned as follows (at
[74]):
The mixing of business funds with personal funds could
never be seen as proper. The non-documenting of loans could never be seen as
proper. The non-existence of any loan agreement could not be seen as proper. The
complete lack of records could not be seen as proper
and it could never have
been seen as a proper conduct of business to periodically clear a business
account solely to ensure that
a family trust account incurred the least amount
of interest payable.
- The
primary judge accordingly found that the transfers or withdrawals did not fall
within the exception in subpara 10(c) of the freezing
order.
- The
primary judge then addressed what he considered to be an “even more
fundamental problem” with Mr Jorgensen’s
conduct which was relevant
to whether he had “knowingly impeded the administration of justice”:
Judgment at [76]. That
problem, according to the primary judge’s
findings, was that from 1 July 2015 the business of Trek North Tours had
“effectively
shut up shop” and was taken over by the business of
Trek North Safaris: Judgment at [78]-[85]. That finding was primarily
based on
the primary judge’s analysis of Exhibit 4, the 1 March 2016 letter from
the Indian accountant, though his Honour also
considered that the letter did
“seem to correspond with what the objective evidence is”: Judgment
at [78].
- The
significance of the primary judge’s finding that on 1 July 2015 the
business of Trek North Tours had effectively been taken
over by the business of
Trek North Safaris was twofold.
- First,
it provided the primary judge with another reason for finding that the transfers
or withdrawals were not “bona fide business
payments and in the ordinary
course of running the business”. That was because, according to the
primary judge, it meant that
“any payments made after 1 July 2015 for
business expenses, were made on behalf of Trek North Safaris”: Judgment at
[82].
- Second,
though it is not entirely clear, the primary judge appears to have found that
the “deliberate decision” by Mr
Jorgensen to “ensure that Trek
North Tours was no longer a going concern from 1 July 2015” was conduct
which defeated,
or had the effect of defeating, the purpose of the freezing
order: Judgment at [84]-[85]. His Honour appears, therefore, to have
found that
it was that conduct by Mr Jorgensen, rather than the impugned transfers or
withdrawals which were the subject of the Ombudsman’s
pleaded case, which
satisfied the element of knowingly impeding the administration of justice.
- On
10 May 2018, the primary judge heard submissions in relation to sentencing Mr
Jorgensen. His Honour handed down an ex tempore judgment (the
Sentence Judgment) in which he imposed the following sentence:
That the Respondent, LEIGH ALAN JORGENSEN be sentenced
to a period of imprisonment in the Lotus Glen Correctional Centre for a period
of twelve (12) months, to be served immediately and upon the balance of
$84,956.75 being paid to the Fair Work Ombudsman, with such
monies to then be
remitted to the relevant employees with in a further 28 days from the date of
these Orders, the Respondent be released
from prison on 20 May 2018 with the
balance of his sentence to be wholly suspended.
- His
Honour made no order as to costs. His Honour also dismissed applications by
Mr Jorgensen for bail and a stay of the sentence.
- It
should, however, be noted that on 11 May 2018, Reeves J ordered that the orders
made by the primary judge on 10 May 2018 be stayed
pending the hearing and
determination of this appeal and that Mr Jorgensen be released on conditional
bail.
- For
reasons that will in due course become apparent, it is unnecessary to refer at
length to the primary judge’s reasons for
imposing the sentence that he
did. It suffices to make the following short points.
- First,
the primary judge reiterated his finding that the impugned transfers to the
Family Trust account were not business expenses
even though “there was an
obligation on the business to repay the trust” which had arisen because
the Family Trust account
had been used to pay business expenses: Sentence
Judgment at [28]. His Honour also explained that, even if that obligation was a
business expense, the “method” by which Mr Jorgensen had come to
make the transfers was “not a proper way in which
to conduct
business” because there were no loan agreements, no records kept of the
expenses and the transfers had the effect
of “clearing of the bank
accounts”: Sentence Judgment at [29].
- Second,
the primary judge did not sentence Mr Jorgensen on the basis that he knew that
the relevant transfers were either not the
payment of business expenses or were
not made in the ordinary and proper course of the business of 828 Pty Limited
trading as Trek
North Tours. Nor did his Honour suggest that Mr Jorgensen knew
that the transfers did not fall within the exception in subpara 10(c)
of the
freezing order. Nor were such findings referred to in the Sentence
Judgment.
- Third,
consistently with the primary judge’s judgment in respect of liability,
his Honour had regard to what he found to be
a “more alarming
aspect” to Mr Jorgensen’s conduct: Sentence Judgment at [30]. The
more alarming aspect was that,
according to his Honour, the business expenses
that were reimbursed by the relevant funds transfers were business expenses of
Trek
North Safaris, not Trek North Tours. That was because Trek North Tours had
been “left to wither and die on the vine”
and Trek North Safaris
“took over” on 1 July 2015: Sentence Judgment at [31]-[33].
- Fourth,
it appears that the primary judge sentenced Mr Jorgensen on the basis that his
conduct which warranted the “sternest
possible condemnation” was his
conduct in “orchestrat[ing] and structur[ing] a series of companies and
businesses so
as to be able to ensure that the Fair Work Ombudsman was never
going to be able to have the judgment” in its favour satisfied
(Sentence
Judgment at [37]). As will be seen, there are a number of difficulties with
that finding, not the least of which is that
the contempt charges brought by the
Ombudsman related only to specific breaches of the freezing order, not some
broader scheme to
defeat the judgment which had been obtained against 828 Pty
Limited.
APPEAL GROUNDS AND SUBMISSIONS
-
Mr Jorgensen’s amended notice of appeal raised four grounds of appeal
against his convictions for contempt. It also included
a ground of appeal
against the sentence imposed by the primary judge.
- The
first ground of appeal was, in short terms, that the primary judge erred in
finding that the relevant transfers did not fall within
the exception in subpara
10(c) of the freezing order because his Honour misconstrued the expressions
“business expenses”
and “ordinary and proper course of your
business”. Mr Jorgensen contended, in essence, that the primary
judge was distracted
by the “messiness” of the manner in which the
business of Trek North Tours was conducted and in particular by the fact
that
the conduct of the business generally included or involved the mixing of
business and personal funds and the inadequate documentation
of transactions.
In Mr Jorgensen’s submission, the fact that he conducted his business
in that general manner did not mean
that the relevant transfers were not made in
the “ordinary and proper course” of the business. The relevant
question
was whether the specific transfers were in “ordinary and proper
course” of the business of Trek North Tours, not whether
the conduct of
that business generally was “proper”. Mr Jorgensen relied, in
support of this ground, on the decision
in Michael Wilson and Partners
Limited v John Forster Emmott [2015] EWCA Civ 1028; [2015] All ER (D)
160 which, he contended, involved analogous facts and circumstances.
- The
second ground was that the primary judge “impermissibly” relied on
Exhibit 4 and as a result erred in finding that
the business of Trek North Tours
was not a going concern from 1 July 2015 and that any payments for business
expenses made after
1 July 2015 were made on behalf of Trek North Safaris. Mr
Jorgensen contended that Exhibit 4, the 1 March 2016 letter from the Indian
accountant, was only admitted on a limited hearsay basis and that he was not
asked any questions about it at the hearing. He submitted
that the document did
not, in any event, support the relevant findings made by the primary judge.
- The
third ground of appeal was that the primary judge either failed to make an
essential finding of fact, being that Mr Jorgensen
knowingly impeded the
administration of justice, or in the alternative erred in finding, beyond
reasonable doubt, that he knowingly
impeded the administration of justice. Mr
Jorgensen contended that, while the primary judge identified that it was
necessary for
the Ombudsman to prove that he knowingly impeded the
administration of justice, he made no express finding in that regard. Even
if
such a finding was somehow implicit in his Honour’s reasons, in Mr
Jorgensen’s submission it was not a finding which
was open on the
evidence.
- The
fourth ground of appeal is that Mr Jorgensen was denied procedural fairness as a
result of the primary judge’s “interventions”
during the
hearing.
- The
fifth ground of appeal relates to the sentence imposed on Mr Jorgensen. Mr
Jorgensen contended that the “head penalty”
of imprisonment was
manifestly excessive because it required a period of “actual
custody” to be served.
CONSIDERATION – CONVICTION APPEAL
- Where,
as here, an appeal involves grounds involving allegations of apprehended bias or
denial of procedural fairness along with other
substantive or discrete grounds,
the appeal court should first deal with the issues of bias or procedural
fairness. That is because
those grounds, if made out, would strike at the
validity of the trial and require the matter to be remitted for retrial:
Concrete Pty Ltd v Parramatta Design and Developments Pty
Ltd [2006] HCA 55; 229 CLR 577 at [2] (Gummow A-CJ), [117] (Kirby and
Crennan JJ); Royal Guardian Mortgage Management Pty Ltd v Nguyen
[2016] NSWCA 88; 332 ALR 128 at [9]- [13] (Basten JA) and [259]-[261] (Ward JA
with whom Emmett AJA agreed). If the bias or procedural fairness ground is made
out, it may
then be inappropriate to determine the remaining grounds of
appeal.
- The
appropriate course, then, is to first consider Mr Jorgensen’s fourth
ground of appeal which alleged that he was denied procedural
fairness.
Ground four - Denial of procedural fairness by reason of
excessive interventions
- Mr
Jorgensen contended that excessive intervention by the primary judge during the
course of his evidence at the trial resulted in
or amounted to a denial of
procedural fairness. He contended that the primary judge’s interventions
undermined or disrupted
the orderly elicitation of his evidence and represented
such a fundamental departure from the role of a judge in an adversarial trial
that it compromised the primary judge’s ability to objectively evaluate
the evidence. Mr Jorgensen did not contend that the
extent and nature of the
primary judge’s interventions supported a finding of apprehended bias:
that a fair minded lay observer
might reasonably apprehend that the primary
judge might not bring, or might not have brought, an impartial mind to the
resolution
of the question that the judge was required to decide. The issues or
concepts of apprehended bias and procedural unfairness by excessive
intervention
may overlap, but are nonetheless distinct: RPS v The Queen [2000] HCA 3;
199 CLR 620 at [11]; Toth v Director of Public Prosecutions
(NSW) [2017] NSWCA 344 at [61].
- It
appears that Mr Jorgensen did not pursue any claim of apprehended bias because
counsel who represented him before the primary judge
did not apply for the judge
to recuse himself, or otherwise raise any complaint concerning the
interventions. It is, however, questionable
whether the failure to object in
the particular circumstances of this case would have constituted a form of
waiver: cf. Vakauta v Kelly [1989] HCA 44; 167 CLR 568 at 572. That is
because the interventions occurred throughout the trial and it may in those
circumstances have been difficult to
identify a particular point in time when
objection should have been taken: cf. Nguyen at [31]. The impact or
risks associated with the interventions may also not have materialised until the
ex tempore judgment was delivered by the primary judge: Nguyen at
[32], [255].
Relevant principles
- In
any event, Mr Jorgensen’s ground of appeal relating to the primary
judge’s interventions falls to be determined by
references to the
principles applicable to the situation where excessive interventions by a trial
judge are said to have given rise
to a denial of procedural fairness. Those
principles are fairly well settled. In Galea v Galea (1990) 19 NSWLR
263, Kirby A-CJ (with whom Meagher JA agreed) summarised the relevant principles
or guidelines in the following terms (at 281-282):
- The
test to be applied is whether the excessive judicial questioning or perjorative
comments have created a real danger that the trial
was unfair. If so, the
judgment must be set aside: see E H Cochrane Ltd v Ministry of Transport
[1987] 1 NZLR 146 (NZCA).
- A
distinction is drawn between the limits of questioning or comments by a judge
when sitting with a jury and when sitting alone in
a civil trial. Although there
is no relevant distinction, in principle, between the judicial obligation to
ensure a fair trial whatever
the constitution of the court, great latitude in
questioning and comment will be accepted where a judge is sitting alone. This is
because it is conventionally inferred that a trained judicial officer, who has
to find the facts himself or herself, will be more
readily able to correct and
allow for preliminary opinions formed before the final decision is reached: see
R v Matthews (1983) 78 Cr App R 23; E H Cochrane Ltd v Ministry of
Transport.
- Where
a complaint is made of excessive questioning or inappropriate comment, the
appellate court must consider whether such interventions
indicate that a fair
trial has been denied to a litigant because the judge has closed his or her mind
to further persuasion, moved
into counsel’s shoes and “into the
perils of self-persuasion”: see Sir Robert Megarry, “Temptations of
the
Bench” (1978) 16 Alta L Rev 406 at 409; see also U Gautier,
“Judicial Discretion to Intervene in the Course of the Trial” (1980)
23 Crim LQ 88 at 95-96 and cases there cited.
- The
decision on whether the point of unfairness has been reached must be made in the
context of the whole trial and in the light of
the number, length, terms and
circumstances of the interventions. It is important to draw a distinction
between intervention which
suggests that an opinion has been finally reached
which could not be altered by further evidence or argument and one which is
provisional,
put forward to test the evidence and to invite further persuasion:
see In the Marriage of Lonard (1976) 26 FLR 1 at 10-11; 11 ALR 618 at 626
(FFC); see discussion [1976] ACLD DT 630; cf Ex parte Prentice; Re
Hornby (1969) 90 WN (Pt 1) (NSW) 427; [1970] 1 NSWR 654.
- It
is also relevant to consider the point at which the judicial interventions
complained of occur. A vigorous interruption early in
the trial or in the
examination of a witness may be less readily excused than one at a later stage
where it is designed for the legitimate
object referred to in Jones,
namely of permitting the judge to better comprehend the issues and to weigh the
evidence of the witness concerned. By the same token,
the judge does not know
what is in counsel’s brief and the strength of cross-examination may be
destroyed if a judge, in a
desire to get to what seems crucial, at any stage
prematurely intervenes by putting questions: see Yuill (at 185) and
Gautier (at 117).
- The
general rules for conduct of a trial and the general expression of the
respective functions of judge and advocate do not change.
But there is no
unchanging formulation of them. Thus, even since Jones and Tousek,
at least in Australia, in this jurisdiction and in civil trials, it has become
more common for judges to take an active part in
the conduct of cases than was
hitherto conventional. In part, this change is a response to the growth of
litigation and the greater
pressure of court lists. In part, it reflects an
increase in specialisation of the judiciary and in the legal profession. In
part,
it arises from a growing appreciation that a silent judge may sometimes
occasion an injustice by failing to reveal opinions which
the party affected
then has no opportunity to correct or modify. In part, it is simply a reflection
of the heightened willingness
of judges to take greater control of proceedings
for the avoidance of the injustices that can sometimes occur from undue delay or
unnecessary prolongation of trials deriving in part from new and different
arrangements for legal aid. The conduct of criminal trials,
particularly with a
jury, remains subject to different and more stringent requirements: see
Whitehorn v R [1983] HCA 42; (1983) 152 CLR 657 discussed in R v R (1989) 18
NSWLR 74 at 84F per Gleeson CJ.
- In
R v T, WA [2014] SASCFC 3; 118 SASR 382, Kourakis CJ
identified three basic grounds on which excessive judicial intervention might
give rise to a denial of procedural fairness
or miscarriage of justice.
- The
first ground, which Kourakis CJ referred to as the “disruption
ground” is made out where the interventions unfairly
undermine the proper
presentation of a party’s case: see also Ellis v R [2015] NSWCCA
262 at [65]. In Michel v R [2009] UKPC 41; [2010] 1 WLR
879, Lord Brown described this ground as involving interventions that prevent a
party from doing himself or herself
justice in the giving of his or her
evidence. It may, however, also apply to interventions which occur in the
course of submissions:
see Jones v National Coal Board [1957] EWCA Civ 3; [1957] 2 QB 55 at
63-64.
- The
second ground is where the questioning or interruptions give an appearance of
bias. As noted earlier, however, Mr Jorgensen did
not pursue any claim of
apprehended bias.
- The
third ground, which Kourakis CJ referred to as the “dust of
conflict” ground (an expression coined by Lord Greene
MR in Yuill v
Yuill [1945] 1 All ER 183 at 189), is made out where the questioning or
intervention is “such an egregious departure from the role of a judge
presiding
over an adversarial trial that it unduly compromises the judge’s
advantage in objectively evaluating the evidence from a detached
distance”: R v T at [38]. Kourakis CJ further explained this
ground as follows (at [39]):
I prefer to state the dust of conflict ground in terms
of compromising the capacity of the judge to adjudicate because an appeal court
can never do anything more than speculate as to whether the judicial
officer’s vision was in fact “clouded by the dust
of
conflict”. If the appeal court, on an appeal by way of rehearing,
concludes that a judge’s findings were wrong in
fact on the evidence, it
may correct them without relying on the judge’s excessive judicial
intervention. However, in those
cases in which the facts, as found, were open to
the trial judge, particularly given the judge’s advantage in assessing the
credibility of the witnesses, it is impossible for an appeal court to say
whether or not the judge’s finding in fact proceeded
from a clouded, or
clear headed, evaluation of the evidence. Moreover, because this ground, in
effect, alleges an error of law which
will generally result in a retrial
irrespective of the appeal court’s view of the weight of the evidence, it
is better based
on an objective standard measured by an assessment of the degree
to which the departure from a judge’s traditional role compromises
the
judicial capacity to objectively evaluate the
evidence.
- Needless
to say, there are some entirely proper reasons why a trial judge might intervene
and ask questions of a witness or test counsel’s
submissions. Judges are
no longer expected to remain “as inscrutable as the Sphinx”
throughout the course of a trial:
Johnson v Johnson [2000] HCA 48; 201
CLR 488 at 493; see also Huda & Huda & Latham
[2018] FamCAFC 85 at [1]. In Michel, Lord Brown gave the following
summary of the sorts of interventions that are proper and permissible and those
that are not (at [34]):
Of course he can clear up ambiguities. Of course he can
clarify the answers being given. But he should be seeking to promote the orderly
elicitation of the evidence, not needlessly interrupting its flow. He must not
cross-examine witnesses, especially not during evidence
in-chief. He must not
appear hostile to witnesses, least of all the defendant. He must not belittle or
denigrate the defence case.
He must not be sarcastic or snide. He must not
comment on the evidence while it is being given. And above all he must not make
obvious
to all his own profound disbelief in the defence being
advanced.
- This
passage was cited with approval in Nguyen at [17] (Basten JA) and [172]
(Ward JA); see also Toth at [67].
- Appellate
challenges based on excessive intervention by the trial judge are rarely easy to
evaluate: Nguyen at [14]; Huda at [61]. It is generally necessary
to consider the interventions complained of in the context of the trial as a
whole and the findings
of the trial judge in relation to the key issues,
including, where applicable, findings as to credit.
Analysis of the trial transcript
- A
detailed review and analysis of the trial transcript in this matter clearly
supports a finding that the trial judge’s interventions
were such that
both the disruption ground and the dust of conflict ground are made out. The
primary judge’s interventions
both undermined the proper presentation of
Mr Jorgensen’s case and represented such an egregious departure from the
role of
judge presiding over an adversarial trial that it unduly compromised his
Honour’s capacity to objectively evaluate the evidence.
- Before
addressing the specific features of the primary judge’s interventions
which support that conclusion, it should in fairness
be emphasised that it is
not hard to see why the primary judge considered it necessary at times to
intervene during Mr Jorgensen’s
evidence. Mr Jorgensen was, for the most
part, not an impressive witness. At certain times he appeared evasive and
unable or unwilling
to give direct answers to questions in clear or
comprehensible terms. Some degree of intervention was no doubt warranted or
required
at times to ensure that Mr Jorgensen’s answers were
responsive. Mr Jorgensen’s evidence also appeared at times to be
unclear
or confused. It was no doubt legitimate for the primary judge to intervene at
times for the purpose of seeking clarification
to aspects of Mr
Jorgensen’s evidence.
- The
problem, however, is that on just about any view, the extent and nature of the
primary judge’s interventions went well beyond
those legitimate ends.
- A
review of the transcript of the hearing reveals the following twelve features of
the primary judge’s interventions during
the course of the hearing.
- First,
the primary judge’s interventions during the cross-examination of
Mr Jorgensen began at a very early stage.
- The
cross-examination of Mr Jorgensen commenced with some questions about relatively
uncontroversial issues. Counsel for the Ombudsman
then took Mr Jorgensen to the
transcript of his evidence at the enforcement hearing. Mr Jorgensen was
questioned about evidence
that he had given during the enforcement hearing which
was to the effect that he was not personally liable to pay the penalties that
were imposed on 828 Pty Limited and that he had chosen not to pay those
penalties from his personal finances. Mr Jorgensen’s
evidence in that
regard included that the “company doesn’t have access to my personal
funds”.
- While
it seems tolerably clear that Mr Jorgensen was saying no more than that he was
not personally liable to pay the debts of 828
Pty Limited, the primary judge
appears to have taken exception to that evidence. At that point, his Honour
essentially took over
the questioning of Mr Jorgensen about the evidence he had
given at the enforcement hearing on that topic. After a lengthy series
of
fairly confusing questions asked by the primary judge, Mr Jorgensen eventually
agreed that he gave that evidence at the enforcement
hearing. That prompted the
following question or statement from the primary judge (T50 lines 1-7):
You’ve said it. Okay. I don’t know –
you’re the one that has – that has come out of your mouth.
You’re
the one controlling all these entities, the Yubnub Proprietary
Limited, the Trek North Tours, the Trek North Safaris – I don’t
know
how many other things that you’ve got. You’re the one that has
control over that. You’re the one who has control
over your personal funds
and your family trust and all of those things. Your words are “the company
doesn’t have access
to my personal funds”?---That’s my
understanding, your Honour.
- The
precise relevance of the fact that Mr Jorgensen had not paid the pecuniary
penalties that were imposed on the company from his
own personal finances was
never explained. Counsel for Mr Jorgensen in due course objected to further
questioning on that topic
by counsel for the Ombudsman, arguing that “the
issue isn’t whether my client is in contempt for not paying [the
company’s]
judgment debt” but rather was “whether he’s
in contempt for the transactions particularised” (T53 lines 17-18).
His
Honour appears to have accepted the force of that argument, but held that
questions directed at that topic were nevertheless
relevant.
- Second,
the primary judge’s interventions during the cross-examination of Mr
Jorgensen were frequent and regular. From about
eight pages into the transcript
of the cross-examination, barely a page of the transcript goes by without his
Honour intervening
in some way in the cross-examination. Some of the
interventions are relatively minor, though the vast majority are significant,
substantial and lengthy. Well over half the pages of the transcript of the
cross-examination include some significant intervention
by the primary judge.
In his submissions on appeal, Mr Jorgensen contended that the primary
judge’s questioning of Mr Jorgensen
constituted about 40 per cent of the
questioning during cross-examination. The Ombudsman did not dispute that
calculation in his
submissions. It appears to be a fairly accurate
calculation.
- Third,
the questions that the primary judge asked Mr Jorgensen for the most part were
not non-leading or open questions, but were
closed questions or involved putting
propositions to Mr Jorgensen, often in forceful terms, for his agreement or
comment. The primary
judge’s questioning, for the most part, could fairly
be characterised as constituting cross-examination.
- There
are numerous examples of this type of questioning. It suffices to give one
example, which involved questioning directed to
what was essentially one of the
key factual issues in the proceeding; Mr Jorgensen’s claim that the
impugned transfers were
made so as to reimburse the Family Trust account in
respect of business expenses of Trek North Tours that had been paid out of that
account. At one point of the cross-examination, as counsel for the Ombudsman
was taking Mr Jorgensen through some of the entries
in the relevant bank
statements, the primary judge intervened as follows (T114 line 44 to T115 line
34):
HIS HONOUR: Well, I mean – you know, it –
it just – it really doesn’t make sense, that if you’ve got
business expenses and you’ve got a business account, and you know that
you’ve got bills that are due from your business,
that you just
didn’t pay them out of your business account, and instead put money from
your account into your family trust,
and asked the family trust to pay it. That
doesn’t – that doesn’t make sense?---Can I comment, your
Honour?
Well, you can comment, but you see, this is – this is the point. When you
have money in the account, which is your business
account - - -?---Mmm.
- - - which is your revenue from your business activities?---Mmm.
To which you should be – have a, “Yes. This is my revenue, and these
are my expenses”. Instead, you get your revenue,
you transfer it to
another account, and then you say, “Right. Well, whilst I did have money
to pay for these bills, I will
just put that money into another account, and I
will get that other account to pay the bills?---Okay.
That doesn’t make sense?---The other account would pay the bill, and my
recollection is that the – this account would
owe money for previous
– ..... at call.
Yes. But that’s what you say, but I can’t see any of that?---Your
Honour?
What bill was it that you paid – that you put $12,000 on 9 July? What bill
was it that you put $3500 on 9 July? What bill was
it when you cleared the
account of 16,000?---Yes. If the credit line - - -
None of them?---If the credit line owed – was in debt, that would –
that was for the bills.
Yes?---So it’s - - -
No, no, no. You see, this is – that’s – that’s the point
is, you don’t know whether the credit line
is in debt because of the
bills, or whether you took a holiday, or whether you bought a car, whether you
bought groceries. It’s
just in debt?---Well, it was used for – for
bills, your Honour.
Well, that’s what you say?---Okay.
- Fourth,
on many occasions the primary judge effectively took over the cross-examination
of Mr Jorgensen on a particular topic, often
when counsel for the Ombudsman had
only just begun questioning Mr Jorgensen on that topic. After the primary
judge’s intervention,
counsel for the Ombudsman would sometimes continue
with the questioning on that topic, and sometimes would move onto a new topic
as
there was nothing further to ask on that topic. On other occasions, the primary
judge would intervene and ask Mr Jorgensen about
a different topic to that which
was being addressed by counsel for the Ombudsman. After the primary judge asked
some questions on
that topic, counsel for the Ombudsman would pick up where his
Honour had left off. In that way, the cross-examination often proceeded
as if
there was a form of “tag team” between the primary judge and counsel
for the Ombudsman: cf. Nguyen at [209].
- One
example of this occurred during the cross-examination of Mr Jorgensen about the
trust deed of his family trust. That topic was
introduced by counsel for the
Ombudsman. Counsel for Mr Jorgensen objected to the questions about the trust
deed on the basis of
relevance, arguing that “whether or not Mr Jorgensen
has complied with his obligations as trustee is... neither here nor there”
(T73 lines 16-17). The primary judge overruled that objection on the basis that
he thought that it was relevant, though it is unclear
why. Counsel for the
Ombudsman asked one more question on that topic, at which point the primary
judge effectively took over the
questioning (see from T73 line 31) as
follows:
HIS HONOUR: Yes. That’s not answering the
question. This was set up - - -?---So there’s no - - -
- - - in 2014?---There’s no specific books, your Honour, for – not
yet for the equity access.
No. What did you do to establish and maintain proper books of account?
That’s what you were asked. What did you do?---Engaged
a chartered
accountant. And – and that will happen. And they’ve –
they’ve actually been very busy with -
- -
What, four years busy? “I will get around to it; it has taken me four
years to do this.” Is that what you’re saying?---Four
years?
Sorry.
Well, this was set up in 2014?---Well, it hasn’t ever had, until recently,
equity accessible. Like, a credit - - -
It has had a bank account. There’s moneys going into this bank account.
There are moneys going out of this bank account?---For
- - -
What is it that you’ve done under this deed to establish and maintain
proper books of account?---Approached the chartered accountant,
your Honour, and
– and asked them to tidy all this up.
And?---Well, if they’ve completed - - -
In the end it’s your responsibility. Where are the books? Where are the
books for 2014 when you established this?---I’m
sorry. I don’t
understand the question.
Okay. Let’s get down to basics. 2014 you set this up, right?---Yes.
Okay. 2014 you knew – clause 55:
The trustee must establish and maintain proper books of account.
What did you do? You said, “I went to a chartered accountant.”
Fantastic. You’ve got an account where you’ve
been using it for all
sorts of things, that account. Where are the books for 2014?---Well, it has only
been used the last year or
two – maybe two years, your Honour.
What do you mean it has been used – I’ve got all of these material
that just shows that that account has been used certainly
in 2015 because
that’s where these payments that the Fair Work Ombudsman says were in
contempt have gone?---I believe it was
2015, the equity access. That was the
statements.
Mr Jorgensen, answer my question or there will be another proceeding for
contempt. What have you done to establish and maintain the
proper books of
account?---Approached the chartered accountants to - - -
And where are these proper books of account?---I don’t have them here,
your Honour. They haven’t – they haven’t
- - -
Do they exist?---No, not yet. No.
Yes.
(Emphasis added.)
- Counsel
for the Ombudsman then took up the questioning on this topic and moved onto the
question of whether the trust produced proper
financial statements.
- Fifth,
as also illustrated by the portion of the transcript just extracted, the primary
judge sometimes made threatening or accusatory
statements to Mr Jorgensen. The
statement (emphasised in the extract) that Mr Jorgensen should answer the
primary judge’s
question or there would be another proceeding for contempt
is a particularly clear example of that type of questioning.
- Sixth,
the primary judge frequently interrupted Mr Jorgensen’s answers to
questions that were put to him, both by the primary
judge himself and also by
counsel for the Ombudsman. That is also apparent from the portion of the
transcript that has just been
extracted. It would appear that his Honour did
not see any issue with him interrupting Mr Jorgensen as he gave his evidence.
That
is apparent from the following exchange, which occurred at one point where
Mr Jorgensen had attempted to say something during an
exchange between his
counsel and the primary judge about an aspect of his evidence (T76 lines
39-46):
HIS HONOUR: Do not talk when I’m talking. Do you
understand just plain simple good manners? I’m the only one who can
interrupt
anyone in this court. Do you understand that?---I’m –
I’m very sorry.
And I will do it when I want?---I’m very sorry.
You don’t. Ms Wilson doesn’t. Ms Gover doesn’t. It’s me
and me only; understand?---Yes, your Honour.
- Similarly,
when Mr Jorgensen attempted to say something during an exchange between the
primary judge and counsel for the Ombudsman,
the following occurred (T113 lines
40-45):
HIS HONOUR: Yes. Did I ask you a question?---No, your
Honour.
Well, what – did you just feel as though, “I think I’ll just
enlighten everyone with my knowledge”?---No,
your Honour. I’m
sorry.
You talk when I ask you to talk?---Yes.
- Seventh,
some of the primary judge’s questions were directed at issues that could
fairly be characterised as collateral issues,
or issues that could only have
gone to Mr Jorgensen’s credit. The questioning by the primary judge about
whether the trust
maintained proper books and records is one example of that
type of questioning. At one point the primary judge also, somewhat unfairly,
questioned Mr Jorgensen about whether the effect of his evidence was that 828
Pty Limited had engaged in insolvent trading (see T51
lines 1-23). At another
point, his Honour questioned Mr Jorgensen about how his affidavit came to
include the expression “ad
hoc” when he did not understand what that
expression meant.
- Eighth,
many of the questions put by the primary judge were in an unfair or inadmissible
form and would have been objectionable if
asked by counsel. For example, the
primary judge frequently asked questions which included numerous statements or
multiple questions.
For instance, when asked about the existence of invoices
for the business expenses that had, on Mr Jorgensen’s evidence, been
paid out of the Family Trust account, the primary judge asked the following
question (T137 lines 7-16):
HIS HONOUR: At any time?---Well, the – there are
– obviously the account that has paid the invoices – those invoices
exist.
Do they?---Yes, your Honour.
They haven’t been brought here. I haven’t seen them. I can’t
look at the account, your family trust account, and
see any other invoices other
than these two from Queensland Rail that you say have been paid in the ordinary
accounts – the
ordinary transactions of business. What other invoices are
there? And if there are other invoices why aren’t they
here?
- In
fact, as counsel for Mr Jorgensen subsequently pointed out, there were some
invoices annexed to Mr Jorgensen’s affidavit.
- Other
examples of unfair or inadmissible questions asked by the primary judge appear
in the portions of the transcript which have
already been referred to, or are
referred to in the extracts which follow.
- Ninth,
the primary judge was frequently critical, disparaging or sarcastic towards Mr
Jorgensen and his evidence. For example, at
one stage, his Honour said to Mr
Jorgensen, “if you tell me the truth, that would be a good start”
(T67 line 31) and,
on another occasion, he said, “You’ve been as
evasive as I’ve ever seen a witness” (T68 line 1). On another
occasion, the primary judge interrupted or cut-off Mr Jorgensen’s answer
to a question and said (T138 lines 44-45):
Now, you just keep trying to obfuscate. You keep trying
to make sure that we don’t get to the truth. You had better stop that
because I’m getting very sick of it.
- The
primary judge also responded to one of Mr Jorgensen’s answers by saying
“[y]ou’re kidding me” (T146 line
20). At one point, when Mr
Jorgensen indicated that he did not understand a particular proposition that the
primary judge was putting
to him, his Honour said: “[w]hat, am I talking
Swahili or something, am I” (T119 line 43).
- Perhaps
most significantly, the primary judge expressed disbelief and scepticism about
Mr Jorgensen’s evidence concerning what
was one of the critical
issues in the trial: his belief that the transfers were made in the ordinary and
proper course of the business
of Trek North Tours. When Mr Jorgensen was
questioned about the relevant transfers from the frozen accounts to the Family
Trust
account, he maintained that the transfers were to reimburse the Family
Trust account because that account had been used to pay Trek
North Tours’
business expenses. It was tolerably clear that as he gave evidence Mr Jorgensen
was not able to marry up the
transfers to any specific invoices that had been
paid out of the Family Trust account. Perhaps understandably counsel for the
Ombudsman
nevertheless pressed Mr Jorgensen to specifically identify the
“loans” that each of the transfers was said to be repaying.
The
following exchange occurred in that context (T129 line 9 to T131 line
21).
[MS WILSON] And all of these times that I’ve taken
you to, these ones just here, you can’t tell me what that loan is
for?---Have
I not answered this?
No, just you can’t tell me – we’re at the charges now. You
can’t tell me what that loan is for?---I can tell
you it was a portion of
whatever bills have been paid that was owing.
But you can’t give me any particulars of what bill you are paying with
this amount, can you?---I can’t marry –
sometimes maybe. I mean,
sometimes maybe, but - - -
Well, I’m asking you about this time, on 9 August 2015, can you give me
any particulars of what that “loan repay”
is for?---I’m having
trouble understanding what you’re asking. I feel like I’ve answered
the question, I’m
sorry, your Honour.
HIS HONOUR: No, but you haven’t answered the question?---Well, it’s
- - -
You may feel all sorts of things?---Right.
But you’ve actually got to do things?---Okay.
You may feel you’ve answered the question - - -?---Okay.
- - - but you’ve actually got to answer the question. Now, the whole point
is here is that you’re trying to tell this
court that those payments that
you made after the freezing order were legitimate business expenses in that you
were repaying the
company – sorry, the family trust, because it had repaid
bills?---Yes, your Honour.
So you’ve had what Ms Wilson has gone through and said, right,
you’ve actually cleared the account on 4 August; cleared
the account on 6
August; cleared the account again on 9 August?---Yes, your Honour, when money -
- -
Now, on each of those times you’ve cleared the account, what bill is it
that you are repaying?---The bills that would be presented
in the debits from
the line of credit, your Honour, and there was a substantial amount which
I’m sure will - - -
Well, we haven’t seen any of it?---No.
You understand?---I – yes, your Honour.
I mean, is it - - -?---So my - - -
- - - going to be the sort of “aha,” the big reveal at the end.
Are you going to sort of, you know, razzle dazzle us like Billy
Flynn in Chicago
and sort of have the big bamboozler right at the end? What is it that you are
paying with these amounts?---Business
expenses, your Honour, represented in the
financial statements and the bank statements.
Which just happen to be exactly the same as what amount of money you’ve
got in the account which you’re just clearing?---No,
no, your Honour,
no.
Well, it’s just – is that just coincidence, is it?---I’m
sorry, I apologise, I feel I’ve explained that rather
than have money
sitting in an account doing nothing, it should be saving - - -
I understand that, but you understand that you had a freezing order, you see?
Now, freezing order – getting an account back
to, or as little as
possible, so that you don’t incur bigger interest is not a business
expense, and is not covered in any
way, shape or form by the exceptions in the
freezing order?---My understanding, your Honour, is - - -
No - - -?--- - - - that - - -
- - - I’m telling you that?---Okay.
So you tell me now - - -?---Yes.
- - - what legitimate business expense was that, because if all you’ve
done is cleared the account so that you can have less money
and less interest in
the family trust account then that is totally contrary to the freezing order;
you understand?---Well, my understanding, your Honour - - -
No, do you understand? I don’t care what your understanding is.
I’m telling you what the facts are, because you have said to me
consistently that what you do is say, “Right, well, look, I’ve got a
debit here, and because
of the debit I’m paying interest. So if I’ve
got money in Yubnub, or if I’ve got money in Trek North Tours, because
of
these things I will take that money, I will place it there, that reduces the
line of credit, and therefore reduces the interest”;
that’s what
you’ve done. Now, once the freezing orders came into effect you were not
permitted to do that at all. You
could only pay legitimate business expenses.
Now, you are being taken to the actual payments?---Mmm.
And you have been asked what legitimate business expense was that sum going to,
and we’re waiting for your answer?---In the
ordinary course of my
business, your Honour – and it was very ordinary – that was my
understanding of the exception to
the freeze order, was to – business as
usual, type scenario.
So are you telling me that you now realise that you have totally been in
contravention of the freeze order?---If your Honour thinks that, I
don’t believe I’ve got any right to disagree, but my understanding
was different. It
was normal course of “your business”, and the
normal course of my business was as I’ve explained.
What, that you would use whatever money it was to reduce a debit amount so that
you would pay less interest, notwithstanding that
debit amount may well have
been incurred for non-business reasons?---They were all business reasons, your
Honour.
No, you’ve told me well and truly before today, on a number of occasions,
that that account – the family trust account
– was not there solely
for business?---It wasn’t specifically there for business, your Honour,
but it’s pretty
much all I’ve ever used it for - - -
No, no, no, no, no?--- - - - and that wasn’t a – well, my credit
cards were cut off as well.
No, you’ve – you see, this is what we call making it up as you go
along. It may be that I do have the break and I let
Ms Gover talk to her client,
because I’m trying to see how on earth this – well, from what the
respondent has said now
that the order has not been contravened.
(Emphasis added.)
- The
tone, tenor and content of the questions that were asked by the primary judge
clearly showed that he did not believe Mr Jorgensen
and did not accept that his
evidence brought the transfers within the “ordinary and proper course of
business” exception
in subpara 10(c) of the freezing order. It also
appears that the primary judge either did not fully understand
Mr Jorgensen’s
evidence concerning his belief or understanding that
the transfers fell within that exception, or that he chose to mischaracterise
that evidence. How else could his Honour have come to put to Mr Jorgensen,
in one of the highlighted portions of the transcript
just extracted, that he
understood that Mr Jorgensen had agreed that he had “totally been in
contravention of the freeze orders”.
- Another
example of the primary judge’s obvious attitude to Mr Jorgensen’s
evidence was an exchange which occurred when
counsel for the Ombudsman asked Mr
Jorgensen whether any payments that had been made from the frozen bank accounts
were payments
of wages to the employees of Trek North Tours. While Mr
Jorgensen’s answers to the questions were not entirely clear or
illuminating,
he appeared to be saying that the payments from the frozen
accounts may have been made to reimburse the Family Trust account in respect
of
payments of wages made out of that account. The following exchange occurred in
the context of that evidence:
HIS HONOUR: Mr Jorgensen, I’m getting very,
very sick of this. You are playing dumb. You are clearly not dumb. You are
obfuscating. You
are trying to frustrate. You are not being honest, and this
does not go well for you. Listen to the question and answer it. Again.
MS WILSON: Mr Jorgensen, on 4 August 2015 $2300 came from the frozen Yubnub
account, number 2 on the index of accounts which was
451643835 into account
number 1, Leigh Jorgensen Family Trust 503197972 at Suncorp. This was not for
remuneration and employee entitlements
of the first respondent employees as
required by law?---Not specifically. What – I don’t understand what
- - -
HIS HONOUR: Yes, you do. Don’t you dare play dumb with me?---Well,
if - - -
He doesn’t want to answer and I’m not going to - - -?---Well - -
-
- - - force him from here on in. If he wants to keep playing this stupid
charade, then that’s fine. Just move onto your next question.
MS WILSON: I am just putting the case, your Honour - - -
HIS HONOUR: I know, and you’re - - -
MS WILSON: - - - but it seems pointless.
HIS HONOUR: - - - being extremely fair and he doesn’t want to, as it
were, in any way engage in a proper forensic examination as is required by law.
And if he doesn’t,
that’s fine. That’s fine. I’m
watching. I have to make my mind up at the end, and that’s the way he
wants to do it. I would have thought that would be the most silly
thing that
anyone would do, but that’s fine. You keep going.
(Emphasis added.)
- Counsel
for the Ombudsman then put to Mr Jorgensen that none of the payments from the
frozen accounts “was for any of the exceptions
in the order”. Mr
Jorgensen responded by saying that he understood that they fell within the
“ordinary practice of your
business” exception. The question
whether Mr Jorgensen honestly and reasonably held that belief was perhaps the
central issue
in the trial. At that point the primary judge intervened in the
questioning and, after putting the terms of the exception in subpara
10(c) of
the freezing order to Mr Jorgensen, put the following series of questions (T152
line 40 to T153 line 30):
HIS HONOUR: Yes. Must be in the ordinary and proper - -
-?---Course of your business.
And you say that what you were doing was proper?---Well - - -
You’re going to be telling me that that’s proper, and you’re
going to be telling me that the business expenses
are bona fide and they have
been properly incurred. That’s what you are going to do, isn’t
it?---Well, they are.
They’re proper? You’re telling me that every – after
everything that we have gone through in the last two days,
that you say that all
the way you have handled your business has been proper? No loan agreements that
are written down, no accounting
other than by somehow guesswork off the bank
statements. You’re saying that’s a proper way to conduct a business,
aren’t
you?---It’s how I’ve always ordinarily - - -
No. I don’t care if it’s how you’ve always done it. It must be
proper, not according to the Jorgensen rules of
business. It’s according
to the proper course of a business. And you’re going to tell me that what
you did was a proper
way in which to conduct a business?---What I will say, your
Honour - - -
No. Are you going to say that what you did was conducting a proper –
sorry, that what you were doing was conducting your business
in a proper
way?---It was in the only way.
No. I will ask the question for a third time. Are you going to be telling me
that what you did in conducting your business was proper?---I don’t
know how to answer that because if it’s not proper, your Honour, the
business would have folded very early.
So I don’t know how to answer it
any other way. I’m sorry.
Yes.
MS WILSON: Your Honour, I was going to take him through each and every of
the
exceptions but - - -
HIS HONOUR: There is no need.
MS WILSON: Thank you.
HIS HONOUR: No need to.
- Tenth,
on a number of occasions during the cross-examination of Mr Jorgensen, the
primary judge engaged in discussion or debate with
counsel, in particular
counsel for the Ombudsman, in the presence of Mr Jorgensen. At one point during
the cross-examination, as
counsel for the Ombudsman took Mr Jorgensen through
some entries in relevant bank statements, the primary judge interjected to
inquire
why another transfer which was apparent in the statement was not the
subject of an additional contempt charge. The following exchange
occurred in
the presence of Mr Jorgensen (T142 line 21 to T143 line 25):
HIS HONOUR: Can I just ask – and I don’t
know if you can answer this, Ms Wilson, but we go to that 9 August withdrawal
of
$9996.95.
MS WILSON: Yes. Yes.
HIS HONOUR: Now, that left $672 - - -
MS WILSON: Yes.
HIS HONOUR: - - - or $673. There was 672 that was transferred to account number
9 on our - - -
MS WILSON: Yes.
HIS HONOUR: - - - list. Now, that’s not a charge.
MS WILSON: No. No. It’s - - -
HIS HONOUR: It’s very lucky, isn’t it? There is no reason why that
shouldn’t be a charge.
MS WILSON: Your Honour - - -
HIS HONOUR: You’re being very generous, aren’t you, or have I missed
– have I - - -
MS WILSON: No, no. No, your Honour - - -
HIS HONOUR: - - - looked at this wrong?
MS WILSON: - - - I – I - - -
HIS HONOUR: And I know you haven’t laid the charge or Ms Hartigan
hasn’t.
MS WILSON: I am briefed to meet the – what I’ve got. But - - -
HIS HONOUR: Yes. But there’s nothing – that looks exactly the
same.
MS WILSON: And, in fairness - - -
HIS HONOUR: And the same one with 14 August where 2990 was taken out, leaving
2216.46. That has also been transferred to account
number 9 then.
MS WILSON: Yes. Yes.
HIS HONOUR: And in both instances it has cleared – it has cleared the
account.
MS WILSON: Yes, has cleared the account. That’s the – that’s
the MO.
HIS HONOUR: Yes. Well, I understand that that’s the MO but that’s
– the point is here in some ways there is no
reason why those two
shouldn’t have been charges either on the reasoning that the Fair Work
Ombudsman has had for bringing
these charges.
- It
is difficult to see how the primary judge could have considered it to be
appropriate to engage in this discussion in the course
of the cross-examination
of Mr Jorgensen and in his presence. At the very least, it might well have
indicated not only that, the
primary judge considered that Mr Jorgensen was
“lucky” and the Ombudsman had been “very generous” in
not
charging Mr Jorgensen with further counts of contempt, but also that
the primary judge had already formed a view about the propriety
of Mr
Jorgensen’s “MO”, by which it may be presumed that his Honour
meant Mr Jorgensen’s modus operandi or practice in making transfers
from the Yubnub account to the Family Trust account.
- Eleventh,
on those occasions when counsel for Mr Jorgensen did object to a question, those
objections were often met with hostility
or criticism from the primary judge.
It suffices to give two examples. On one occasion during cross-examination,
counsel for Mr
Jorgensen objected to a question asked by counsel for the
Ombudsman on the basis that the question misstated Mr Jorgensen’s
evidence. His Honour’s response was as follows (T122 lines
9-18):
HIS HONOUR: - - - a question. What on earth do you keep
getting up and objecting – you’re not here to protect this man.
You’ve got to allow – you’ve got to ask – make
objections when there has been something that is either inherently
unfair in
that there has been a statement or something that has been mis-described, or the
question is not a valid question according
to law - - -
MS GOVER: Your Honour, the - - -
HIS HONOUR: - - - not just when you don’t like what it is that Ms Wilson
is asking.
- His
Honour did not expressly rule on the objection, but appears to have considered
that the question was not unfair.
- The
second example occurred in the course of the re-examination of Mr Jorgensen. As
will be seen, the primary judge also questioned
Mr Jorgensen extensively during
re-examination. At one point, counsel for Mr Jorgensen attempted to raise an
issue about his Honour’s
questioning. His Honour’s response was
(T185 lines 11-12):
HIS HONOUR: Did I ask you or did I ask the witness? Is
there an objection that you’re taking, or what? What is it that you want
to interrupt me for?
- Counsel
then endeavoured to explain to the primary judge that his questions were
proceeding on the basis that the business of Trek
North Tours had ceased trading
on 1 July 2015 and that that had not been established by the evidence. His
Honour explained his understanding
of the evidence and said “[n]ow is
there something that is objectionable in that question, because if there
isn’t, my
goodness, you had better have a good excuse for getting
up”: (T186 lines 5-7).
- It
is perhaps not difficult to see why counsel for Mr Jorgensen may have been
reluctant to object to the primary judge’s interventions.
- Twelfth,
as just adverted to, the primary judge also intervened extensively during the
re-examination of Mr Jorgensen.
- The
primary judge appears to have taken issue with some of the evidence Mr Jorgensen
gave during re-examination and took it upon himself
to cross-examine Mr
Jorgensen in relation to that evidence. For example, Mr Jorgensen was asked in
re-examination about whether
he had been able to obtain copies of all relevant
invoices of the business and what he had done to try obtain copies of those that
he did not have. Mr Jorgensen’s evidence about those fairly narrow issues
led the primary judge to intervene and question
Mr Jorgensen about whether
Business Activity Statements had been prepared for the business. Not only did
that issue not properly
arise from the evidence that Mr Jorgensen had given
about trying to obtain copies of the invoices, but his Honour’s questions
were in the nature of cross-examination and appeared to be somewhat unfair and
objectionable. The questioning on this topic included
the following (T174 line
14 to T175 line 5):
HIS HONOUR: But Mr Jorgensen, you’re supposed to
do this every year. You’re supposed to be able every financial year to
have a record of what the business brings in and what the business has expended
so that you can look at what is a – what is
your revenue, what are your
expenses, what are your depreciation so that then you’ve got in effect a
sum by which you can then
be taxed. Now that’s the whole point is that if
you’re saying, “Yes, okay I kept all this in my head because at
some
stage it was going to have to go to the accountant and do that,” one would
have expected that to happen in a matter of
months. Where were your BAS
statements for these businesses?---Well the accountants were sent a lot of this
material.
No, I didn’t ask that. I said where are your BAS statements for this
business?---Well not with me now, your Honour, I mean
- - -
Were you actually doing them?---Yes, your Honour.
Every quarter?---I believe so.
So every quarter you would have had to figure out exactly what it is that all
these expenses were?---Yes.
Yes. So there would have to be then an easy record. Go to your BAS statements
and say, “Right this is what I’ve got.”
Then go to your end of
year tax assessments and say, “Right this is what I’ve got.”
Simple. Why is it now that
we’re having to look to try and figure out
what’s happening three years ago? It should have already been done. Have
you
got an answer for that?---Well I don’t – is the question why
don’t I have all the invoices now?
No. Don’t try and change the question. This all should have been done.
According to you that’s what you did. So the whole
point of coming here to
show that you had made legitimate business expenses and that there had been
proper moneys going from one
account to another in furtherance of your business,
that has already been done. And yet you come here today saying there’s
all
sorts of excuses because, you know, people can’t go back three years and
so on. I’m saying to you it should have
already been done. So why
isn’t it here?---At the time it was done, your Honour. At the time it was
done.
So why isn’t that here? If it has already been done - - -?---I – I
believe the financials are here.
- That
is but one example of the primary judge’s intervention during
re-examination. In his submissions on appeal, Mr Jorgensen
contended that the
primary judge’s questioning accounted for almost 27 per cent of the
questioning that occurred during re-examination.
The Ombudsman did not dispute
that calculation. It appears to be a relatively accurate calculation of the
extent of the primary
judge’s questioning.
Conclusions in relation to procedural fairness
- In
its submissions on appeal, the Ombudsman conceded that “the transcript may
evidence a tendency on the part of the primary
judge towards
intervention”. That concession is, to say the very least, an
understatement. In any event, the Ombudsman submitted
that the primary
judge’s intervention did not support a finding of denial of procedural
fairness because the interventions
did not “infringe” either the
disruption ground or the dust of conflict ground.
- As
for the disruption ground, the Ombudsman contended that the primary
judge’s interventions did not prevent Mr Jorgensen from
presenting his
case. The Ombudsman submitted, in that regard, that Mr Jorgensen had been able
to put his case consistently throughout
the hearing: in his opening submissions,
in his evidence and in his closing submissions. It was also said that the
primary judge
had accepted “key aspects” of Mr Jorgensen’s
case. Some reliance was also placed on the fact that Mr Jorgensen’s
counsel did not object to the primary judge’s interventions.
- As
for the dust of conflict ground, the Ombudsman contended that the interventions
could not be said to have prevented the primary
judge from objectively
evaluating the evidence because the majority of the interventions related to
matters concerning Mr Jorgensen’s
credit and yet the primary judge’s
findings did not depend on credit issues. In the Ombudsman’s submission,
because
credit was essentially not in issue, the primary judge’s
interventions did not result in a miscarriage of justice.
- The
Ombudsman’s submissions in relation to both the disruption ground and the
dust of conflict ground have no merit.
- The
mere fact that, in a very general sense Mr Jorgensen’s case remained
consistent throughout the trial, despite the judge’s
interventions, does
not mean that the presentation of his case was not relevantly disrupted. Nor
does the fact that the primary
judge made some findings in
Mr Jorgensen’s favour. While Mr Jorgensen may have been able to put
his case consistently, the
primary judge also consistently challenged and
disparaged the evidence given by Mr Jorgensen in support of his case. And
while the
primary judge may have accepted some minor aspects of Mr
Jorgensen’s case, virtually all of the critical and determinative
issues
were resolved against him.
- The
critical adverse findings that the primary judge made against Mr Jorgensen
included that any obligation that the business had
to reimburse the family trust
was not a “business expense”; that any expenses paid out of the
Family Trust account after
1 July 2015 were not expenses of Trek North Tours;
that in any event the payments to the Family Trust account were not
“proper”
because the business was not conducted in a
“proper” way because there was a mixing of business funds with
private funds
and inadequate documentation; and that Mr Jorgensen had
deliberately ensured that the business of Trek North Tours was no longer
a going
concern after 1 July 2015 so as to defeat the relevant judgment. A review of
the transcript reveals that many, if not most,
of the primary judge’s
interventions occurred while Mr Jorgensen was attempting to deal with those very
issues.
- The
primary judge significantly interrupted and disrupted the orderly flow of Mr
Jorgensen’s evidence concerning what turned
out to be the determinative
issues. His Honour was also sarcastic, disparaging and dismissive of
significant parts of Mr Jorgensen’s
evidence. His Honour’s
aggressive and, at times, unfair questioning appeared on occasion to confuse
Mr Jorgensen and cause
him to make concessions he may not otherwise have
made. His Honour also frequently cut Mr Jorgensen off while he was
endeavouring
to explain critical aspects of his case, in particular his belief
that the impugned transfers fell within the “ordinary and
proper course of
business” exception. The extent and nature of the primary judge’s
interventions were such that it is
impossible to avoid the conclusion that Mr
Jorgensen was relevantly impeded from “giving his account in such a way as
to do
himself justice”: cf. Lockwood v Police [2010] SASC 120; (2010) 107 SASR
237 at [16].
- It
is also of limited significance that Mr Jorgensen’s counsel did raise any
real objections to the primary judge’s interventions.
Indeed, the
suggestion that Mr Jorgensen could have objected to the course taken by the
primary judge is somewhat unrealistic. As
already noted, the interventions
commenced early in the cross-examination and continued at regular intervals
throughout the cross-examination.
As Basten JA pointed out in Nguyen (at
[31]), where the objectionable conduct on the part of the trial judge is an
“unfolding situation”, it is difficult
to identify the point in time
at which objection should have been taken. Perhaps more significantly, as was
the case in Nguyen, it would have been “awkward, to say the
least” for Mr Jorgensen’s counsel to intervene in her
“opponent’s
cross-examination to object to the course being taken by
the judge”: Nguyen at [32] (Basten JA); see also Ward JA at [254].
In those circumstances, as in Nguyen, Mr Jorgensen’s
right to a fair trial was not “waived” because his counsel did not
object. And even if it could
be said that the absence of any objection
indicated that Mr Jorgensen’s counsel did not perceive there to be any
procedural
unfairness at the time, that alone would not compel a conclusion that
the trial was not, in any event, unfair.
- As
for the Ombudsman’s submissions concerning the dust of conflict ground,
while the primary judge may not have expressly based
his findings on Mr
Jorgensen’s credit or credibility, it is nevertheless readily apparent
that his Honour’s rejection
of critical aspects of Mr Jorgensen’s
explanation of the relevant payments and the conduct of his businesses generally
flowed
from the adverse impression that the primary judge had obviously formed
of Mr Jorgensen and the credibility and reliability of his
evidence. It is
difficult to see how else the primary judge could have rejected Mr
Jorgensen’s evidence that the relevant
transfers were made to reimburse
the Family Trust account in respect of business expenses of Trek North Tours, or
found that the
transfers were in any event not made in the “proper”
course of the business of Trek North Tours. The primary judge’s
interventions and the adverse impressions that his Honour formed about Mr
Jorgensen and his credibility as a witness are inextricably
entwined. The
Ombudsman’s submission that the primary judge’s interventions did
not relate to critical aspects of Mr
Jorgensen’s case accordingly has no
merit.
- In
any event, as the earlier analysis of the trial transcript plainly reveals, the
extent and nature of the primary judge’s
interventions clearly supports a
finding that his Honour’s interventions were an egregious departure from
the role of a judge
presiding over an adversarial trial and that his
Honour’s capacity to objectively evaluate the evidence was fundamentally
compromised.
The primary judge conducted much of the cross-examination of
Mr Jorgensen himself and certainly did not observe Mr Jorgensen’s
evidence in a “calm and dispassionate” way or from a “detached
position”: cf. Yuill v Yuill [1945] 1 All ER 183 at 189; cited with
approval by Ward JA in Nguyen at [162]. Not only did his Honour
conduct much of the cross-examination, he also appeared openly hostile to Mr
Jorgensen, was at
times disparaging and sarcastic, commented on the evidence
while it was being given and, not only belittled the case advanced in
Mr
Jorgensen’s defence, but made “obvious to all his profound disbelief
in the defence being advanced” cf. Michel at [34]. A fair trial
was denied to Mr Jorgensen because the primary judge “closed his ... mind
to further persuasion, moved
into counsel’s shoes and ‘into the
perils of self-persuasion’”: Galea at 281, per Kirby A-CJ
referring to Sir Robert McGarry, “Temptations of the Bench” (1978)
16 Alra L Rev 406 at 409.
- It
follows that the primary judge’s interventions during Mr Jorgensen’s
evidence were such that he was denied procedural
fairness, both on the
disruption ground and the dust of conflict ground. The next question is what
order or orders should be made
as a result of that finding. The answer to that
question hinges on whether there has been a miscarriage of justice or whether
the
“proviso” applies.
A miscarriage of justice?
- Section
28(1)(f) of the Federal Court of Australia Act 1976
(Cth), which provides that the Court may, in the exercise of its appellate
jurisdiction, grant a new trial, has been construed as
authorising the dismissal
of an appeal on the basis that, despite error having been found, there was no
substantial miscarriage of
justice. The “proviso” that an appeal
may be dismissed where there has been no miscarriage of justice may apply to a
contempt proceeding where the Court is able to conclude that, despite error
having been found, the evidence admitted at the trial
nevertheless proved beyond
reasonable doubt that the alleged contemnor was guilty of contempt as alleged,
or where the Court is satisfied
that the error could not reasonably be supposed
to have affected the result of the trial: Clampett v
Attorney-General (Cth) [2009] FCAFC 151; 181 FCR 473 at [49]- [52]; see too
Weiss v The Queen [2005] HCA 81; 224 CLR 300 at [45];
Conway v The Queen [2002] HCA 2; 209 CLR 203 at [29]; Windoval Pty
Limited v Donnelly [2014] FCAFC 127; 226 FCR 89 at [80]- [95].
- This,
however, is not a case where the proviso could apply. That is so for two
reasons.
- First,
it is not possible to conclude on the basis of the limited material before this
Court that, despite the denial of procedural
fairness, the evidence admitted at
the trial proved that Mr Jorgensen was guilty of contempt as charged. The
Court was not provided
with the entirety of the record of the trial. This is
also a case where the natural limitations of proceeding on the record do not
permit the appellate court to attain the requisite satisfaction: Weiss at
[41]; OKS v Western Australia
[2019] HCA 10 
; 93 ALJR 438 at [31] . It is
also not possible to conclude that the denial of procedural fairness could not
reasonably be supposed to have affected the
result of the trial.
- Second,
and perhaps more significantly, it is well established that there are some
errors that are so fundamental that they cannot
come within the proviso even if
the appellate court is of the opinion that without the error in question the
appellant would inevitably
have been convicted: Clampett at [51]. In
Wilde v R [1988] HCA 6; (1988) 164 CLR 365, Brennan, Dawson and Toohey JJ said
(at 372-3):
The proviso has no application where an irregularity has
occurred which is such a departure from the essential requirements of the
law
that it goes to the root of the proceedings. If that has occurred, then it can
be said, without considering the effect of the
irregularity upon the
jury’s verdict, that the accused has not had a proper trial and that there
has been a substantial miscarriage
of justice. Errors of that kind may be so
radical or fundamental that by their very nature they exclude the application of
the proviso.
(Footnotes omitted.)
- The
High Court in Weiss at [45] said that cases where there had been a
significant denial of procedural fairness were examples of cases where the court
would
not dismiss an appeal even though persuaded that the evidence properly
admitted at trial proved the accused’s guilt beyond
reasonable doubt.
- The
error or irregularity in question here was unquestionably serious and
fundamental. The denial of procedural fairness occasioned
by the primary
judge’s excessive and unwarranted interventions were such as to
“strike at the validity and acceptability
of the trial and its
outcome”: cf. Concrete at [117] (Kirby and Crennan JJ). Mr
Jorgensen did not have a proper trial and there has accordingly been a
substantial miscarriage
of justice.
- It
follows that the appeal must be allowed and declarations and orders made by the
primary judge which had the effect of convicting
Mr Jorgensen of contempt of
court must be set aside. The matter should also be remitted to the Circuit
Court for a retrial pursuant
to s 28(1)(f) of the Federal Court Act.
- There
remains then the question whether the Court should embark on a consideration of
Mr Jorgensen’s remaining grounds of appeal.
That is an important
question given that Mr Jorgensen’s case is that, if any of the
remaining grounds of appeal are made out,
the Court should order, in lieu of the
orders made by the Circuit Court, that the Ombudsman’s application that Mr
Jorgensen
be punished for contempt be dismissed.
Should the Court consider the remaining grounds of appeal?
- There
is an issue concerning the extent to which the Court should embark on a
consideration of Mr Jorgensen’s remaining grounds
of appeal in
circumstances where the ground alleging denial of procedural fairness has been
upheld. The suggestion, in Concrete, appears to be that where an
allegation of bias or denial of procedural fairness is upheld, the Court should
not then embark on a
consideration of other substantive grounds of appeal,
including where the resolution of the substantive grounds would result in the
Court itself providing the orders which the court below should have made: see
Gummow J at [2], and Kirby and Crennan JJ at [117];
cf. Callinan J at [172].
That appears to be how the relevant observations in Concrete have been
interpreted: Nguyen at [13] (Basten JA) and [259]-[260] (Ward JA);
Denknis v Commonwealth Bank of Australia [2018] FCA 1908 at [17]- [18];
cf. Jamal v Director of Public Prosecutions (NSW) [2019] NSWCA 121 at
[53] (Gleeson JA, with whom White JA and Emmett AJA agreed).
- As
Ward JA pointed out in Nguyen (at [259]), however, there is an apparent
tension between the suggestion in Concrete that the appellate court
should not consider the substantive grounds when an allegation of bias or denial
of procedural fairness
has been upheld and the general principle that an
intermediate appellate court ought generally deal with all grounds of appeal,
not
just what is identified as the decisive ground: cf. Kuru v New South
Wales [2008] HCA 26; 236 CLR 1 at [12]. And as Basten JA pointed out in
Nguyen (at [13]), where the allegation of bias or denial of procedural
fairness has been made out, the result may be that the matter will
be remitted
to the trial court “possibly without any comment upon the validity or
otherwise of the substantive grounds of appeal”.
That would in some
circumstances be an unfortunate or unsatisfactory result. It also appears to be
rather harsh to deny an appellant
the opportunity to have their case finally
resolved in the appellate court on the basis of their substantive grounds of
appeal simply
because they have also alleged that they were denied procedural
fairness at the trial. It is perhaps for that reason that Kirby
and Crennan JJ
in Concrete suggested (at [117]) that an appellant in such circumstances
should be put to an “election” as to which grounds to pursue.
In
Nguyen, however, Basten JA considered (at [11]) that the suggestion that
an appellant be put to an election was “troubling”.
- Fortunately
it is unnecessary to address or resolve these apparent tensions or
inconsistencies. That is because, for the reasons
that follow, Mr
Jorgensen’s remaining grounds of appeal do not in any event compel or
support the making of orders dismissing
the Ombudsman’s application.
Rather, they support the making of orders remitting the matter for retrial.
This case is accordingly
akin to those cases where an allegation of bias or
denial of procedural fairness is made in circumstances where the other appeal
or
review grounds would also only warrant an order remitting the matter for
rehearing. The suggestion appears to be that in such
a case it is permissible
and appropriate to consider the other appeal or review grounds: see Goodwin v
Commissioner of Police [2012] NSWCA 379 at [17]; Toth at [60].
- It
is also possible to address the legal issues that are raised by the remaining
grounds of appeal without considering the evidence
in any great detail and
without expressing views about factual matters which will need to be considered
afresh on remittal to the
Circuit Court. It would, in all the circumstances, be
desirable to address the legal issues so as to provide guidance for the purposes
of the retrial.
- It
follows that in the particular circumstances of this case, it is appropriate to
consider Mr Jorgensen’s remaining grounds
of appeal.
Ground one – Misconstruction of “ordinary and
proper course of ... business” exception
- Mr
Jorgensen’s contention that the primary judge misconstrued the
“ordinary and proper course of business” exception
was based in
large part on the reasoning of the United Kingdom Court of Appeal in
Emmott. In Mr Jorgensen’s submission, the facts in Emmott
were similar or analogous to the facts of his case and that the reasoning of the
court exposes an error or errors in the primary
judge’s reasons for
rejecting Mr Jorgensen’s claim that the impugned transactions fell within
that exception in subpara
10(c) of the freezing order.
- In
Emmott, a freezing order was made against the respondent which included
an exception that the order did not prohibit the respondent from
dealing with or
disposing of its assets in the “ordinary and proper course of
business”. The respondent was a company
incorporated in the British
Virgin Islands which provided legal and consultancy services in Kazakhstan and
Azerbaijan. It was alleged
that the respondent made two large payments in
breach of the freezing order. Both payments were made to companies associated
with
the sole director of the respondent, Mr Wilson. The first payment was said
to be part payment of a loan and the other was said to
be a payment for office
rental, service and maintenance. The applicant contended that the loan was
“fiction” or was
“bogus” and that the rent was
“grossly inflated” and that the agreement to pay it was a sham.
- The
trial judge found that the payments did not fall within the exception and found
the respondent and Mr Wilson guilty of contempt.
It would appear that the trial
judge found that the loan was genuine and the rent was not inflated, but found
nonetheless that the
payments were not made in the “ordinary and proper
course of business”. The factual findings that led the trial judge
to
that conclusion included that the impugned loan repayment was easily the largest
repayment that the respondent had ever made in
respect of the loan, that no
other loan repayments had been made in the preceding four years and that the
rental payment was in fact
the payment of rental arrears that had accumulated
over time and was also easily the largest rental payment ever made by the
respondent.
- The
Court of Appeal allowed an appeal from that judgment. Lord Justice Lewison,
with whom Black and Gloster LJJ agreed, said (at
[20]) that whether a payment is
in the “proper course of business” is likely to depend on the
purpose of the payment
and that “[i]f the payment is to be made in order
to discharge a pre-existing liability of the business incurred in good faith,
then it is difficult to see why that would not be the ‘proper course of
business’”. His Honour noted that the
trial judge appears to have
accepted that the payments were made in the proper course of business and that
the question then was
whether they were made in the ordinary course of business.
- Lord
Justice Lewison stated (at [21]), in that context, that the question whether
payments were “in the ordinary course of business”
is not
necessarily the same as asking whether the payments themselves were
“ordinary”. Rather, the exception deals with
the course of business
and “[i]t is thus the course of business that must be
‘ordinary’”. His Lordship also
accepted (at [22]) that a
payment could be made in the ordinary course of business if it was not a
“routine” or “recurring”
payment and (at [28]) that the
exception is not limited to the payment of “trade creditors”.
- The
main reason given by Lewison LJ for reversing the decision of the trial judge,
however, was that, in focussing on the size and
irregular nature of the
payments, the trial judge had approached the facts too narrowly and had
overlooked a number of other facts.
Those facts included, for example, that
repayments of the loan were made as and when the respondent was able to
“gather in
receivables” (at [30]) and that, similarly, the
respondent had “allowed rent arrears to accumulate in the light of other
demands” (at [31]) and that this accounted for the large and irregular
rental payment.
- Mr
Jorgensen submitted, in effect, that the primary judge made the same types of
errors as those made by the trial judge in Emmott.
- The
difficulty for Mr Jorgensen is that the decision in Emmott really turned
on its own unique facts. Those facts are not entirely analogous to the facts of
his case. And as Gloster LJ observed
(at [35]), what amounts to payments or
disposals in the ordinary course of business is “a highly fact-sensitive
question”.
- Nevertheless,
the reasoning in Emmott does highlight some difficulties with the primary
judge’s reasoning in finding that the relevant transfers were not made in
the ordinary and proper course of 828 Pty Limited’s business.
- First,
it appears that the primary judge did, to an extent, erroneously focus on
whether the transfers themselves were “proper”
or
“ordinary”, as opposed to determining whether they were made in the
ordinary and proper course of 828 Pty Limited’s
business. For example,
the primary judge appears to have found that the payments were not
“proper” because they were
“sporadic” and did not
correspond with any specific invoices that had been paid out of the Family Trust
account. His
Honour did not, however, expressly find that the transfers were
not made to reimburse the Family Trust account in respect of business
expenses
that had been paid out of that account in the past (putting aside, for present
purposes, the finding that the expenses were
the expenses of Trek North Safaris,
a finding that will be addressed later). Indeed, while it is not entirely
clear, it appears
to be implicit in his Honour’s reasoning that he
accepted that that was the case.
- His
Honour also appears to have accepted that Mr Jorgensen had conducted his
business in essentially the same way for some considerable
time prior to the
making of the freezing order. In other words, such sporadic payments or
transfers to the Family Trust account,
which did not precisely match any
invoices paid out of the Family Trust account, were part of the ordinary way the
business had been
conducted for some time. Why, then, were the transfers not in
the ordinary and proper course of the business simply because they
were
sporadic, or did not precisely correspond with any particular invoices? In a
sense, this was similar to the error made by the
trial judge in Emmott,
where the trial judge erroneously focussed on the unusual size of the rental
payment, but ignored the fact that the relevant business
had habitually
accumulated rental arrears until it was able to pay them. And as also found in
Emmott, a payment can be in the ordinary and proper course of business
even if it is not a “routine” or “recurring”
payment.
- Second,
the primary judge also appears to have found that the transfers were not proper
because of the rather haphazard and unsatisfactory
way that Mr Jorgensen
conducted his businesses generally. There was no doubt that Mr Jorgensen had
habitually mixed business funds
with personal funds and had not in any way
documented the existence of any loan arrangement that arose as a result of the
fact that
business expenses were paid out of the Family Trust account. It was
equally clear that the reimbursements did not match particular
invoices. That
appeared to be mainly because Mr Jorgensen only arranged for reimbursement
transfers to be made when business revenue
was received in the Yubnub account.
It also appears that the transfers were made in amounts and at intervals so as
to ensure that
less interest was payable on debit balances on the Family Trust
account.
- The
mixing of business and personal funds and the failure to document loan
relationships or transactions were no doubt undesirable
or unsatisfactory
business practices in a general sense. The same can perhaps be said about the
practice of making reimbursement
transfers at a time and in a manner that made
it difficult to marry-up the reimbursements with particular invoices. That was,
however,
to some extent beside the point in considering whether the transfers
were in the ordinary and proper course of the Trek North Tours
business. That
is because Mr Jorgensen had always conducted his businesses in that rather
undesirable and unsatisfactory way. It
was at least open to find that the
relevant transfers were made in the ordinary and proper course of what was a
poorly or unsatisfactorily
run business. The primary judge’s focus on the
unsatisfactory business practices of Mr Jorgensen appears to have distracted
his
Honour from addressing the correct question raised by the exception. The
question was not whether Mr Jorgensen’s business
practices were not
“proper” in some general business or accounting sense; the question
was whether the transfers or payments
themselves were made in the ordinary and
proper course of the relevant business.
- Finally,
the primary judge’s finding that the transfers did not relate to business
expenses appears also to have been erroneous,
or at least beside the point. As
was found in Emmott, the exception is not limited to the payment of
“trade creditors”, which is similar to saying that it is not limited
to the payment of “business expenses”. The primary judge appeared
to accept that the payment of business expenses out
of the Family Trust account
gave rise to a “financial obligation, maybe even a legal obligation, on
behalf of the business
to pay the family trust”: Judgment at [61]. The
payment of a “financial obligation” can in some circumstances
be a
payment in the ordinary and proper course of a business even if it is not a
business expense.
- It
follows that ground one of the appeal has been made out, at least to the extent
that it may be concluded that the primary judge
misconstrued the scope of the
“ordinary and proper course of ... business” exception in the
relevant orders.
- It
does not follow, however, as implicitly contended by Mr Jorgensen, that the
Court should order that the Ombudsman’s application
for Mr Jorgensen to be
punished for contempt must be dismissed. None of what has just been said about
the primary judge’s
reasoning concerning whether the relevant transfers
fell within the exception compels a finding that, on the evidence that was
before
the primary judge, the relevant transfers did fall within the exception,
or that the Ombudsman failed to prove that they did not.
Nor, as noted earlier,
does the judgment in Emmott compel any such conclusion.
- The
primary judge’s errors in construing the scope of the “ordinary and
proper course of business” exception were
akin to the situation where a
trial judge is found to have misdirected a jury about a material legal issue.
The appropriate order
in such circumstances, subject to the application of the
proviso, is ordinarily that the conviction be set aside and the matter be
remitted for retrial.
- That
would appear to be the appropriate order arising from the success of this ground
of appeal. There is no scope for the application
of the proviso. For the
reasons given earlier it is not possible to conclude on the basis of the
material before this Court that,
despite the primary judge’s error in
construing the scope of the “ordinary and proper course of business”
exception,
the evidence admitted at the trial proved that Mr Jorgensen was
guilty of contempt as charged, or that the error concerning the scope
of the
exception could not reasonably be supposed to have affected the result of the
trial.
Ground two – Reliance on Exhibit 4 and the findings based
on it
- Ground
two of Mr Jorgensen’s grounds of appeal raises three issues: first,
whether the primary judge “impermissibly”
used Exhibit 4 having
regard to the particular circumstances in which it was tendered and relied on in
the court below; second, whether
findings of fact made by the primary judge on
the basis of Exhibit 4 were erroneous; and third, what was the effect or impact,
if
any, of the findings of fact based on Exhibit 4.
- The
circumstances in which Exhibit 4 came to be tendered and relied on were somewhat
unsatisfactory and potentially problematic.
- Exhibit
4 was tendered by counsel for the Ombudsman on the third day of the hearing,
just prior to the completion of the cross-examination
of Mr Jorgensen. The
basis of the tender was explained in the following terms by counsel for the
Ombudsman (T159 lines 1-7):
MS WILSON: Thank you, your Honour. Just as a matter of
housekeeping, which I’ve discussed with my learned friend. In the
enforcement
hearing there was – Mr Jorgensen was cross-examined on a
letter that he provided from Mr Mudit Jain & Associates, chartered
accountants, from Punjab, India. It says that – though it was tendered but
it seems to have not been included in the material.
My learned friend has no
objection to me handing that up so – to make that material complete, and
that’s what I do ...
- The
Ombudsman had already tendered the transcript of the enforcement hearing and a
number of other documents that were produced or
referred to in the course of
that hearing. Mr Jorgensen had produced the letter from the accountant at
the enforcement hearing and
had been questioned about it. It was implicit in
what counsel for the Ombudsman said that his Honour could have regard to Exhibit
4 as being a document about which Mr Jorgensen had given evidence at the
enforcement hearing. That would appear to be what was meant
when it was said
that the document made “that material complete”. Counsel did not,
however, at that point at least,
otherwise explain to the primary judge what the
relevance of the letter was. As also can be seen from what was said,
counsel for
Mr Jorgensen did not object to the tender of the letter, or seek any
limitation or restriction on its use.
- Counsel
for the Ombudsman did not cross-examine Mr Jorgensen about Exhibit 4. In those
circumstances, it was probably not open to
counsel for Mr Jorgensen to
re-examine Mr Jorgensen about it. It perhaps would have been open to
counsel for Mr Jorgensen to seek
leave to ask Mr Jorgensen questions about
the letter, though no such leave was sought. That is perhaps understandable in
circumstances
where nothing had been said about the relevance of the letter or
what, if any, factual findings might be made about it or its contents.
- It
does not appear that counsel for the Ombudsman referred to Exhibit 4 in the
closing submissions that were made to the primary judge.
There is no indication
that the Ombudsman relied on the letter in any way in seeking to make out its
case. That is perhaps consistent
with the suggestion that the document had been
tendered merely as a matter of “housekeeping”.
- It
was the primary judge who first raised the potential significance of Exhibit 4.
That occurred in the course of the closing submissions
by counsel for Mr
Jorgensen. It is readily apparent that his Honour considered that Exhibit 4 was
evidence of the fact that Trek
North Tours had ceased its business operations in
March 2015, or at least by 1 July 2015. Counsel for Mr Jorgensen
endeavoured to
deal with that proposition. She submitted, amongst other things,
that Mr Jorgensen had not been cross-examined about the document
in the contempt
proceedings, that the proposition that Trek North Tours had ceased business
operations in March 2015 was not consistent
with Mr Jorgensen’s evidence,
and that it was possible that the reference in the letter to March 2015 may have
been a “typo”
given that 828 Pty Limited, which was the company that
operated the business of Trek North Tours, was not wound up until June 2016.
Counsel in due course took the primary judge to the evidence that Mr Jorgensen
gave about the letter during the enforcement hearing.
That evidence was not
consistent with the proposition that the business of Trek North Tours ceased in
March 2015.
- In
her submissions in reply, counsel for the Ombudsman did not take up the
proposition advanced by the primary judge to the effect
that Exhibit 4 indicated
that Trek North Tours had ceased its business operations in March 2015 or by 1
July 2015. Indeed, the submissions
advanced on behalf of the Ombudsman were to
the effect that no reliance could be placed on the truth of any of the
statements in
the letter. Counsel said (T260 lines 17-25):
MS WILSON: Yes. That’s right. And the
accountant’s letter was handed up by the respondent to provide a complete
–
their accountant’s letter was handed up yesterday to provide a
complete record of the enforcement hearing. We note that we
can see by the
cross-examination of the respondent at the enforcement hearing that it was a
document that was relied on by the respondent.
This letter does nothing more
than just add more mud to muddied waters. For example, in this letter it says
there’s no liabilities
of the company. And now in his affidavit he says
there are liabilities. It’s prima facie a hearsay document. You
can’t
establish the truth behind that. But it is an assertion that has
been made to the court.
- It
is not immediately apparent why counsel for the Ombudsman suggested that the
letter was “prima facie a hearsay document”
given that it could most
likely be considered to be a business record for the purposes of the business
records exception to the hearsay
rule in s 69 of the Evidence
Act 1995 (Cth). In any event, the point remains that the
Ombudsman did not rely on Exhibit 4 as proving the truth of any statement made
in
it, including that the Trek North Tours business had ceased to operate by
March 2015.
- Despite
the circumstances in which Exhibit 4 was tendered and the approach taken to it
by the parties, it is readily apparent that
the primary judge relied heavily on
it in making significant adverse findings against Mr Jorgensen. Those findings
included that
Trek North Tours had “effectively shut up shop and allowed
Trek North Safaris to take over its operations” (Judgment
at
[78]-[79]); that “from 1 July 2015, the business of Trek North Tours was
not a going concern” (Judgment at [80]);
that any payments made after 1
July 2015, even if they were “bona fide business payments and in the
ordinary and proper course
of running the business”, were made on behalf
of Trek North Safaris, not Trek North Tours (Judgment at [81]-[82]); that
therefore
there “could be no exceptions under order 10(c) for the
business, Trek North Tours” (Judgment at [85]); and that Mr Jorgensen
had
“simply let Trek North Tours ‘wither on the vine’ so as to
defeat the judgment” and had made a “deliberate
decision ... to
ensure that Trek North Tours was no longer a going concern from 1 July
2015” (Judgment at [83] and [85]; also
see Judgment at [24]-[26]).
- If
the primary judge made any finding to the effect that Mr Jorgensen knowingly
impeded the administration of justice, an issue that
is considered later in the
context of ground four of Mr Jorgensen’s amended notice of appeal,
the findings made by his Honour
based on Exhibit 4 seem to have been central to
that finding. That is apparent from paragraph [76] of the Judgment, where his
Honour
effectively introduced his consideration of Exhibit 4 by stating that
there was an “even more fundamental problem” with
Mr
Jorgensen’s conduct which “goes to the heart of whether he has
knowingly impeded the administration of justice”.
- The
Ombudsman contended that the primary judge did not rely on Exhibit 4 in making
any of the findings just referred to. In the Ombudsman’s
submission, the
primary judge made those findings based on other “objective
evidence” and only used Exhibit 4 as a “chronological
prompt”.
The difficulty with that submission is that it is not supported by a fair
reading of the primary judge’s reasons.
The primary judge refers
extensively to Exhibit 4, but only obliquely refers to, and does not identify,
the “objective evidence”
with which Exhibit 4 was said to
correspond. More fundamentally, the Ombudsman was unable to identify the
objective evidence which
the primary judge supposedly relied on. There was no
evidence capable of supporting the primary judge’s findings.
- Was
the primary judge’s reliance on Exhibit 4 in making these findings
“impermissible” as alleged by Mr Jorgensen?
Mr Jorgensen’s
main contention in that regard was that the document was “admitted on a
limited basis that did not permit
it to be used to establish the truth of its
contents”. That contention is at best doubtful. Despite the rather
unclear and
ambiguous statements made by counsel for the Ombudsman concerning
the tender of the exhibit, no order limiting the use to which the
document could
be put, either pursuant to s 136 of the Evidence Act or otherwise, was sought by
counsel for Mr Jorgensen or made by the primary judge.
- It
was, however, procedurally unfair for the primary judge to make the findings he
did based on Exhibit 4. Mr Jorgensen was not cross-examined
about Exhibit 4 by
counsel for the Ombudsman. Nor did the primary judge question Mr Jorgensen
about the document. It was never
put to Mr Jorgensen that he had deliberately
ensured that the business of Trek North Tours was no longer a going concern from
1 July
2015 and had effectively transferred the business to Trek North Safaris
from that date. It certainly was not squarely put to Mr
Jorgensen that he did
that to defeat the judgment and orders that had been made against 828 Pty
Limited. Nor did the Ombudsman make
any submission to the primary judge that he
should make any such findings. The Ombudsman’s pleaded case also did not
include
any such allegation. It was never put to Mr Jorgensen in
cross-examination that the transfers related to business expenses of Trek
North
Safaris, instead of Trek North Tours as he had claimed. Nor did the Ombudsman
invite the primary judge to make any such finding.
- It
is true that the primary judge did raise Exhibit 4 with counsel for Mr Jorgensen
in the course of her final submissions. His Honour
did suggest that it
supported a finding that the business of Trek North Tours had ceased in March
2015. Counsel was able to make
submissions on that point. Those submissions
included that Mr Jorgensen had not been cross-examined about Exhibit 4 or the
findings
that were said to flow from it. In any event, the point remains that
Mr Jorgensen himself was never given the opportunity to respond
to or
address any of the findings of fact that the primary judge ultimately made in
relation to Exhibit 4.
- There
is no question that the primary judge was obliged to afford Mr Jorgensen
procedural fairness. Procedural fairness extends to
require a decision-maker to
identify to a person who may be affected by a decision any adverse conclusion
which has been arrived
at which would not obviously be open on the known
material, though the decision-maker is not obliged to expose his or her mental
processes or provisional views to comment before making the decision:
Commissioner for Australian Capital Territory Revenue v Alphaone Pty Ltd
[1994] FCA 1074; (1994) 49 FCR 576 at 591-592; SZBEL v Minister for Immigration and
Multicultural and Indigenous Affairs [2006] HCA 63; 228 CLR 152 at [29].
There will be a denial of procedural fairness and a substantial miscarriage of
justice where a trial judge makes findings of impropriety
against a witness in
circumstances where the witness was not given an opportunity to address that
issue in cross-examination: see
generally Sullivan v Trilogy Funds Management
Ltd [2017] FCAFC 153; 255 FCR 503 at [265], [325].
- While
Mr Jorgensen’s notice of appeal did not expressly or directly contend that
he was denied procedural fairness because he
was not given an opportunity to
respond to the adverse findings that the primary judge made based on Exhibit 4,
that was the general
tenor of his submissions. He submitted, amongst other
things, that the primary judge’s use of Exhibit 4 was impermissible
because he was not given the opportunity to comment on it, or to affirm or deny
the truth of the hearsay assertions in it, including
that Trek North Tours
discontinued its business operations in March 2015. That was tantamount to an
allegation of denial of procedural
fairness.
- In
any event, and putting issues concerning procedural fairness to one side, there
is considerable merit in Mr Jorgensen’s submission
that the findings made
by the primary judge based on Exhibit 4 were erroneous. The letter from the
accountant was signed and dated
1 March 2016. It concerned 828 Pty Limited
and did not specifically refer to the business of Trek North Tours. While it
does state
that “[t]he Company has discontinued its business operations
with effect from March 2015”, when considered in context,
it is fairly
obvious that that date is a typographical error and should read “March
2016”, which was the date of the
letter. March 2015 was some months
before the default judgment was entered against 828 Pty Limited and some
months before the business
of Trek North Safaris was established. There was no
evidence to suggest that no business at all operated between March 2015 and
1 July 2015. Aside from the letter, there was no evidence whatsoever
that 828 Pty Limited discontinued its business operations as
early as March
2015, and no evidence whatsoever that the business of Trek North Tours ceased
months prior to the default judgment
and months prior to the commencement of the
business of Trek North Safaris. Mr Jorgensen resigned as a director of 828 Pty
Limited
on 1 March 2016, the date of the letter, and the company was wound up
some months later. It is highly unlikely that it would have
ceased business
operations in March 2015 and yet not be wound up for another 16 months.
- Putting
the statement about the company ceasing business in March 2015 to one side,
Exhibit 4 otherwise provided no basis for an inference
or finding that the
business of Trek North Tours ceased on 1 July 2015.
- The
primary judge suggested that the letter seemed to “correspond with what
the objective evidence is”: Judgment at [78].
As has already been noted,
however, his Honour did not identify what that “objective evidence”
was. Nor was the Ombudsman
able to take the Court to any compelling evidence
which supported the findings made by the primary judge in relation to Exhibit
4.
- Mr
Jorgensen was questioned, both at the enforcement hearing and by the primary
judge, about the establishment of the business Trek
North Safaris, the
relationship of that business with the business of Trek North Tours and the date
that the business Trek North
Tours ceased to operate. While Mr
Jorgensen’s evidence about those matters was fairly unclear and
unimpressive, he did not
at any time suggest or concede that Trek North Tours
“shut up shop” on or by 1 July 2015. Indeed, the general tenor
of
his evidence was that the two businesses coexisted for some period of time and
were not identical. While there was no dispute
that Trek North Safaris
commenced business on 1 July 2015, it did not necessarily follow that the Trek
North Tours’ business
ceased on that day.
- The
Ombudsman also contended that the primary judge’s finding that the
business of Trek North Tours ceased on 1 July 2015 was
also supported by an
analysis of the relevant bank statements. It is, however, by no means clear
that the primary judge engaged
in any analysis of the bank statements. In any
event, the bank statements alone are not capable of supporting the finding,
particularly
having regard to the evidence which clearly indicated that
Mr Jorgensen operated the various accounts he controlled without any
particular
regard to the person or entity who was the account holder.
- Even
if, contrary to this conclusion, there was some evidentiary basis for finding
that Trek North Tours ceased to carry on business
on 1 July 2015, there is an
even more fundamental difficulty with the primary judge’s finding that the
relevant transfers therefore
related to the reimbursement of the business
expenses of Trek North Safaris, as opposed to business expenses of Trek North
Tours
as Mr Jorgensen had claimed. That difficulty is that Mr Jorgensen’s
case, as ultimately articulated in his submissions to
the primary judge, was
that the impugned transfers reimbursed the Family Trust account in respect of
the payment of two large invoices
issued by Queensland Rail for $9,937.60 and
$24,628.69. Those invoices were dated 13 June and 30 June 2015 respectively.
The later
invoice dated 30 June 2015 for the amount of $24,628.69 was addressed
to Trek North Tours. The invoice dated 13 June 2015 was addressed
to Trek
North, Tudoods Pty Ltd. Mr Jorgensen’s evidence was to the effect that the
reference to Tudoods Pty Limited was a mistake
by Queensland Rail and this
invoice related to the business of Trek North Tours. There was no basis for
concluding that these invoices,
both of which self-evidently referred to the
provision of services prior to 1 July 2015, represented business expenses of
Trek North
Safaris, as opposed to Trek North Tours.
- One
final observation should be made about the primary judge’s reasoning based
on the finding that the business of Trek North
Tours ceased on 1 July 2015. If
that was in fact the case, it would almost certainly follow that the funds which
were received into
the Yubnub account during July 2015 and immediately prior to
the impugned transfers from that account in August 2015 were the property
of
Yubnub trading as Trek North Safaris. The funds could not, in those
circumstances, be considered to be the property of 828 Pty
Limited. It would
seem to follow that the freezing order would not have applied to those funds,
given that the order only restrained
828 Pty Limited from disposing of its
assets. It is unnecessary and perhaps undesirable to express any conclusion in
relation to
this issue given that it was not the subject of any consideration in
the court below. As discussed earlier, the proceedings in the
court below were
conducted on the basis that the funds in the Yubnub account were the property of
828 Pty Limited. This issue does,
however, rather expose fundamental
difficulties with the primary judge’s reasoning.
- It
follows that Mr Jorgensen has made out ground two of his amended notice of
appeal. The primary judge impermissibly relied on Exhibit
4 because his Honour
made findings based on that exhibit without giving Mr Jorgensen the opportunity
to address that exhibit or the
findings that were based on it. His Honour also
made findings that were not supported by Exhibit 4 or any other evidence.
- The
appropriate order to make in relation to these errors is to set aside the order
which had the effect of convicting Mr Jorgensen
of contempt and remit the matter
for retrial for the same reasons as given in relation to ground one.
Ground three – Knowingly impeded the administration of
justice
- This
ground of appeal essentially raised two questions. The first question was
whether the primary judge found, beyond reasonable
doubt, that in authorising or
directing the impugned transfers, Mr Jorgensen knowingly impeded the
administration of justice. The
second question, which only arose if the primary
judge did find that Mr Jorgensen knowingly impeded the administration of
justice,
was whether the primary judge erred in so finding. As will be seen,
however, the more fundamental issue raised by these questions
is whether the
primary judge misdirected himself or otherwise proceeded on the basis of a
misconception or misunderstanding concerning
this element of the contempt
charges faced by Mr Jorgensen.
- There
could be little doubt that the primary judge accepted that, to convict Mr
Jorgensen of the contempt charges brought by the Ombudsman,
it was necessary for
him to be satisfied beyond reasonable doubt that Mr Jorgensen knowingly impeded
the administration of justice.
His Honour accepted the Ombudsman’s
submission that that was an essential element of the contempts with which Mr
Jorgensen
was charged: Judgment at [46].
- It
is in those circumstances somewhat surprising that the primary judge’s
reasons contain no express finding or statement that
he was satisfied beyond
reasonable doubt that Mr Jorgensen had knowingly impeded the administration of
justice. His Honour referred
(Judgment at [76]) to a “fundamental
problem” with what Mr Jorgensen had done which “really goes to the
heart of
whether he has knowingly impeded the administration of justice”,
however he never expressly concluded that he was satisfied
beyond reasonable
doubt that that was the case.
- The
Ombudsman contended that the primary judge’s finding that Mr Jorgensen
knowingly impeded the administration of justice was
“implicit in the
reasons and consistent with the primary judge’s ultimate findings”.
The difficulty with that
submission, however, is that if the finding is implicit
in the primary judge’s reasons and ultimate finding of guilt, the
Ombudsman
did not identify exactly what the basis of any such finding was. Nor
is that readily apparent from his Honour’s reasons.
- To
the extent that it is possible to understand the primary judge’s reasons
concerning the element of knowingly impeding the
administration of justice, it
would appear that his Honour found that the element was made out because Mr
Jorgensen had deliberately
ensured that Trek North Tours was no longer a going
concern after 1 July 2015 so as to defeat the judgment and orders that had been
made against 828 Pty Limited. That appears to be the general tenor and effect
of paragraphs [76] to [85] of the primary judge’s
reasons. His
Honour’s findings in that regard also feature prominently in his reasons
or remarks on sentence.
- If
that was the basis of the primary judge’s finding that Mr Jorgensen had
knowingly impeded the administration of justice,
it gives rise to three fairly
fundamental problems.
- The
first problem is that, for the reasons already given, the primary judge’s
finding that Trek North Tours ceased its business
on 1 July 2015 was not open on
the evidence. It was not a finding that was open on the basis of Exhibit 4,
even if it was permissible
for his Honour to use that exhibit for the purpose of
making that finding, and was not supported by any other evidence.
- The
second problem is that, even if that finding was open on the evidence, the
contempt charges that had been brought against Mr Jorgensen
did not allege that
he had knowingly impeded the administration of justice by causing Trek North
Tours to cease business on 1 July
2015. The charges against Mr Jorgensen were
that, knowing of the freezing order, he caused transfers to be made which
breached that
order. That was the apparent basis of the allegation that he
knowingly impeded the administration of justice. It does not appear
that the
Ombudsman ever pleaded or put its case against Mr Jorgensen on the basis that he
deliberately caused Trek North Tours to
either “shut up shop” or
“wither on the vine” so as to ensure that the judgment against 828
Pty Limited could
never be enforced.
- The
third difficulty is that there was no direct evidence that Mr Jorgensen
knowingly impeded the administration of justice by acting
in a way that was
intended to defeat the judgment and penalty orders that had been made against
828 Pty Limited. The only basis
upon which such a finding could have been made
was that it was an inference that was drawn from the evidence as a whole. To be
satisfied
beyond reasonable doubt that Mr Jorgensen was guilty of contempt,
however, it was necessary for the primary judge to be satisfied
that that
inference was the only reasonable inference and that no other reasonable
inference consistent with innocence was open or
available on the evidence.
There is no indication in the judgment of the primary judge that his Honour
asked himself or addressed
that essential question.
- There
is another possible explanation or basis for the primary judge’s finding
that Mr Jorgensen had knowingly impeded the administration
of justice, if in
fact any such finding was made. That explanation is that his Honour was
proceeding on the basis that this element
would be made out if it was simply
proved beyond reasonable doubt that Mr Jorgensen authorised or directed the
relevant transfers
from the frozen accounts and those transfers breached the
freezing order.
- The
critical paragraph of the primary judge’s reasons which suggest that his
Honour was proceeding on this basis is paragraph
[86], in which his Honour
concluded that “on the three aspects that I have spoken of, I find that
the [Ombudsman] has proven
beyond reasonable doubt that the exceptions do not
apply”. It appeared to be on that basis that his Honour convicted
Mr Jorgensen:
see Judgment at [87]. The primary judge’s reference to
the “exceptions” in the Judgment at [86] is presumably
a reference
to the exceptions in para 10 of the freezing order, though the only real
exception that was in issue was the “ordinary
and proper course of
business” exception in subpara 10(c) of the freezing order. The primary
judge’s reference to the
“three aspects I have spoken of”
would appear to be a reference to the three reasons he had given for why the
relevant
transfers did not fall within the exception in subpara 10(c) of the
freezing order: first, that transfers were not the payment of
business expenses;
second, that the transfers were not in any event “proper”; and
third, that if the transfers were in
respect of business expenses, they were the
expenses of Trek North Safaris, not Trek North Tours.
- If
that was the basis of the primary judge’s finding that Mr Jorgensen had
knowingly impeded the administration of justice,
his Honour was acting on the
basis of a fundamental misunderstanding of this element of the contempt charges
against Mr Jorgensen.
- The
freezing order was made against 828 Pty Limited. Mr Jorgensen was not a party
to and therefore was not directly bound by the
freezing order. The authorities
referred to earlier in these reasons clearly establish that a third party who is
not bound by a
court order will only be liable for contempt arising from a
breach of that order if it is found that they engaged in conduct which
was
intended to frustrate, thwart or subvert the purpose of the order: see in
particular CCOM at [14]-[17]; Sigalla at [14]-[17], [28];
Admark at [23]-[27]. That involves proof that the alleged contemnor not
only knew about the order, but also knew that their conduct involved
or gave
rise to a breach of the order. A party not bound by the order will not be
liable for contempt if they had an honest but
mistaken belief as to the meaning
or operation of the order which, if correct, would mean that their conduct could
not amount to
an interference with the operation of the order.
- It
follows that, to convict Mr Jorgensen of the charges of contempt brought by the
Ombudsman, it was not sufficient for the primary
judge to find, beyond
reasonable doubt, that “the exceptions do not apply”: Judgment at
[86]. It was not enough for
his Honour to be satisfied beyond reasonable doubt
that Mr Jorgensen authorised and directed the transfers and that the transfers
breached the freezing order. It was also necessary for the primary judge to be
satisfied beyond reasonable doubt that Mr Jorgensen
knew that the transfers
breached the freezing order.
- Moreover,
it is abundantly clear that Mr Jorgensen’s case before the primary judge
was that he believed that the impugned transfers
fell within the “ordinary
and proper course of business” exception in order 10(c). That was the
effect of his affidavit
evidence and his evidence during cross-examination. It
was, in those circumstances, necessary for the primary judge to be satisfied
beyond reasonable doubt that Mr Jorgensen did not honestly entertain any such a
belief.
- The
primary judge made no such findings about Mr Jorgensen’s knowledge or
belief. His Honour did not find beyond reasonable
doubt that Mr Jorgensen knew
that the transfers breached the freezing order, or that Mr Jorgensen did not
honestly believe that the
transfers fell within the exception in subpara 10(c)
of the freezing order and therefore did not breach the order.
- It
follows that, whichever way one looks at it, the primary judge erred in the way
he addressed the critical element of the charges
of contempt that had been
brought against Mr Jorgensen. To the extent that his Honour made any finding
that he was satisfied beyond
reasonable doubt that Mr Jorgensen had knowingly
impeded the administration of justice, which itself is questionable, that
finding
was in any event based on an incorrect understanding of the nature and
elements of charges of contempt that the Ombudsman had brought
against Mr
Jorgensen. If his Honour found that Mr Jorgensen knowingly impeded the
administration of justice because he had deliberately
closed the business of
Trek North Tours by 1 July 2015 so as to defeat the judgment against 828 Pty
Limited, that was not the basis
of charges that had been brought by the
Ombudsman and was not, in any event, a finding that was open on the evidence.
If his Honour
found that Mr Jorgensen knowingly impeded the administration of
justice merely because he was responsible for the transfers which
breached the
freezing ordes, his Honour misdirected himself and proceeded on the erroneous
basis that it was not necessary for him
to be satisfied that Mr Jorgensen knew
that the impugned transfers breached the order and that Mr Jorgensen did not
entertain an
honest belief that the transfers fell within the exception in
subpara 10(c) of the freezing order as he claimed.
- To
be fair, it would appear to be clear that the primary judge was led into error
by the way the Ombudsman had put its case. The
statement of the contempt
charges contained in the Ombudsman’s application simply alleged that Mr
Jorgensen knew about the
freezing order and had authorised and directed the
transfers which were alleged to have breached the order. The statement of the
charges did not include any allegation that Mr Jorgensen knowingly impeded the
administration of justice, or any allegation that
Mr Jorgensen knew that the
transfers breached the freezing order or had otherwise engaged in conduct which
was intended to frustrate,
thwart or subvert the freezing order. And while the
Ombudsman eventually put to the primary judge that it was necessary to prove
that Mr Jorgensen had knowingly impeded the administration of justice, it does
not appear that the Ombudsman put to the primary judge
that to make any such
finding, he had to be satisfied beyond reasonable doubt that Mr Jorgensen knew
that the transfers breached
the freezing order. Indeed, it appears that the
Ombudsman was also proceeding on the erroneous basis that it was not necessary
to
prove that Mr Jorgensen intended to disobey the freezing order, or that he
knew that the transfers were in breach of the freezing
order. That is apparent
from the submissions initially put by the Ombudsman in relation to the appeal.
- The
primary judge’s errors in addressing this essential element of the
contempt charges gave rise to a substantial miscarriage
of justice. It is not
possible to conclude that, despite the primary judge having misdirected himself
concerning this essential
element of the charges, the evidence admitted at the
trial nevertheless proved beyond reasonable doubt that Mr Jorgensen did
knowingly
impede the administration of justice. As discussed earlier, this
Court was not provided with the entire trial record and this is
in any event a
case where the natural limitations of proceeding on the record would have
prevented the Court from attaining the requisite
satisfaction. Nor could it be
suggested that the primary judge’s errors could not reasonably be supposed
to have affected
the result of the trial. There is accordingly no room for the
operation of the proviso.
- For
the reasons given in the context of the other grounds of appeal, the appropriate
order to make in respect of this successful appeal
ground is to set aside the
primary judge’s order which had the effect of convicting Mr Jorgensen of
contempt and remit the
matter to the Circuit Court for retrial.
- It
is not appropriate for the Court to order that the Ombudsman’s application
be dismissed. That is because the Court cannot,
on the basis of the material
before it, be satisfied that it would not have been reasonably open to the
primary judge to convict
Mr Jorgensen on the evidence before him had he properly
directed himself concerning the elements of the charges.
SENTENCE APPEAL
- It
is neither necessary nor desirable to address Mr Jorgensen’s sentence
appeal in circumstances where his convictions are to
be set aside and the matter
is to be remitted to the Circuit Court for retrial.
- It
suffices to note that the errors made by the primary judge in addressing and
determining Mr Jorgensen’s liability for contempt
appear to have
infected the exercise of his Honour’s sentencing discretion. In
particular, his Honour appears to have sentenced
Mr Jorgensen on the basis that
the most serious aspect of his contempt was his conduct in causing the business
of Trek North Tours
to “shut up shop” on 1 July 2015 so as to defeat
the judgment. It was this element of the contempt which his Honour
found was
required to be “met with the sternest possible condemnation”
(Sentence Judgment at [37]). As discussed in
detail earlier, the difficulties
with that finding include that: the contempt charges against Mr Jorgensen
related to the impugned
transfers in August 2015, not the shifting of the
business from Trek North Tours to Trek North Safaris on 1 July 2015; in basing
this finding primarily on Exhibit 4, the primary judge effectively denied Mr
Jorgensen procedural fairness; and the finding in any
event was not supported by
Exhibit 4.
- As
has been said, however, since the conviction appeal has been successful and the
matter is to be remitted for retrial, the sentence
appeal (ground 5 in the
amended notice of appeal) should be dismissed.
THE OMBUDSMAN’S CROSS-APPEAL
- The
Ombudsman’s cross-appeal concerned the primary judge’s order that
there be no order as to costs. It is neither necessary
nor desirable to address
the cross-appeal in circumstances where Mr Jorgensen’s appeal is to be
allowed, his convictions are
to be set aside and the matter is to be remitted
for retrial.
CONCLUSION AND DISPOSITION
- The
trial of Mr Jorgensen in respect of the charges of contempt brought by the
Ombudsman substantially miscarried for at least four
reasons.
- First,
the primary judge’s excessive, unwarranted and inappropriate interventions
in the course of the cross-examination of
Mr Jorgensen constituted a denial of
procedural fairness (appeal ground four).
- Second,
there was also a denial of procedural fairness because the primary judge made a
number of material findings based on Exhibit
4 in circumstances where Mr
Jorgensen was not cross-examined about either the exhibit or the findings that
were made in respect of
it (appeal ground two).
- Third,
the primary judge erred or misdirected himself in relation to the meaning and
scope of the “ordinary and proper course
of ... business” exception
in the freezing order (appeal ground one).
- Fourth,
the primary judge misdirected himself in relation to the critical element of the
charges of contempt that had been brought:
that Mr Jorgensen knowingly impeded
the administration of justice (appeal ground three). To the extent that his
Honour made any
finding that Mr Jorgensen had knowingly impeded the
administration of justice, that finding either did not relate to the charges
that had been brought against Mr Jorgensen, or was based on an erroneous belief
that it was not necessary for the Ombudsman to prove
that Mr Jorgensen knew that
the transfers breached the freezing order.
- The
proviso does not apply to any of the errors made by the primary judge. The
appropriate orders to make are to set aside the declarations
and order that had
the effect of convicting Mr Jorgensen of contempt and remitting the matter
to the Circuit Court for retrial.
Given that one of the errors involved the
denial of procedural fairness arising from excessive intervention, it would be
appropriate
for the matter be tried by a Circuit Court judge other than the
primary judge.
- The
sentence appeal and the Ombudsman’s cross-appeal should be dismissed.
- The
Ombudsman should be ordered to pay Mr Jorgensen’s costs, including the
costs of the proceedings before the primary judge.
- The
undertakings given by Mr Jorgensen and the stay and bail orders made by Reeves J
on 11 May 2018 were expressed as being operational
until the determination
of this appeal. For more abundant caution, however, orders should be made
releasing Mr Jorgensen from his
undertakings and directing that his passport be
returned to him upon request.
I certify that the preceding two hundred and
forty-three (243) numbered paragraphs are a true copy of the Reasons for
Judgment herein
of the Honourable Justices Greenwood, Reeves and
Wigney . |
Associate:
Dated: 8 July 2019
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