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Court of Appeal of New ZealandLast Updated: 2 February 2018
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IN THE COURT OF APPEAL OF NEW ZEALAND
CA55/06
CA150/06 [2007] NZCA 117
BETWEEN VINCENT SIEMER Appellant
AND MICHAEL PETER STIASSNY AND FERRIER HODGSON
Respondents
Hearing: 8 February 2007
Court: William Young P, Glazebrook and O’Regan JJ Counsel: Appellant in Person and A Candy (McKenzie friend)
J G Miles QC and M Flynn for Respondents
Judgment: 4 April 2007 at 3 pm
JUDGMENT OF THE COURT
A The appeals are dismissed.
REASONS OF THE COURT
(Given by William Young P)
SIEMER V STIASSNY AND FERRIER HODGSON CA CA55/06 4 April
2007
Introduction
[1] Mr Vincent Siemer appeals against two judgments of Potter
J in the Auckland High Court. In the first,
delivered on 16 March
2006, she found Mr Siemer and his company, Paragon Services Ltd (previously
Paragon Oil Systems Ltd),
guilty of contempt of court for having breached an
injunction granted by Winkelmann J on 8 April 2005 and varied by Ellen France
J on 5 May 2005. In this judgment, Potter J fined Mr Siemer and Paragon
(jointly and separately) $15,000 and ordered them to
pay costs on a
solicitor and own client basis. In the second judgment, which she
delivered on 2 June 2006, Potter
J quantified costs and disbursements in
the sums of $180,182.78 and $3,386 respectively.
[2] Mr Siemer’s appeal raises many interconnected and overlapping
arguments which we propose to address under the following
headings:
(a) Challenges to the injunctions and arguments based on freedom of
speech;
(b) Challenges to the procedure adopted by the Judge; (c) Claims that the Judge was biased;
(d) Challenges to the factual findings; and
(e) Challenge to the costs award.
But, before we address those heads of argument, it is necessary to say
something about the background to the case and the legal context
in which it
fell to be determined.
Background to the case
[3] Mr Siemer was involved in a dispute with co-shareholders in
Paragon. At one stage in the process, Mr Stiassny was appointed
as a receiver
of Paragon. That receivership came to an end in July 2001.
Differences remained between Mr Stiassny and
his firm, Ferrier Hodgson,
on the one hand, and Paragon and Mr Siemer on the other. These
differences were ostensibly
resolved pursuant to a compromise agreement of 9
August 2001. Under this agreement Paragon and Mr Siemer agreed not to
comment to anyone on any matter arising in or from the receivership (and Mr
Stiassny and Ferrier Hodgson made similar commitments).
We note that, for ease
of reference, we will usually refer to the dispute as being between Mr Siemer
and Mr Stiassny and omit references
to Paragon and Ferrier Hodgson.
[4] Mr Siemer does not accept that he is bound by the 9 August 2001
agreement for reasons which he has explained to us in considerable
detail. He
made numerous complaints about Mr Stiassny to various official bodies, including
the Institute of Chartered Accountants
and the Serious Fraud Office. Then, on
8 April 2005, a billboard appeared on the Farmers Car Park building in Hobson
Street, Auckland
which depicted an image of Mr Stiassny’s face and
contained the words “Michael Stiassny – a true story www.stiassny.org”. This had been
erected by Oggi Advertising Ltd on the instructions of Mr Siemer. It was
adjacent to a billboard for Vector
Ltd, a substantial company of which Mr
Stiassny was the chairman. The website referred to on the billboard contained
material which
related to the Paragon receivership and was very critical of Mr
Stiassny. On 8 April 2005, Mr Stiassny obtained an interim judgment
from
Winkelmann J. The orders made were in the terms applied for as
follows:
1. The first respondent [Mr Siemer] direct the second
respondent [Oggi] to remove the billboard referring to
the applicant
[Mr Stiassny] situation [sic] on the building formerly known as Farmers Car
Park, Hobson Street, Auckland.
2. The first respondent remove all material from the website www.stiassny.org in any way relating to the
applicant.
3. The first respondent be restrained from publicising any
information in any way relating to the application [sic] pending
further order
of the Court. ...
The third order reads a little oddly. We note that the second order
contains the words “in any way relating to the applicant”
and
therefore suspect that the third order was intended to read:
The first respondent be restrained from publicising any information in any
way relating to the applicant pending further order of
the Court.
So expressed it would be consistent with the terms of the second order. On
the other hand, if construed literally, it must still
be taken to preclude
publication of material relating to the subject matter of the application,
namely the contents of the website.
So, one way or another, any further
publication by Mr Siemer of allegations against Mr Stiassny associated with the
Paragon receivership
was precluded.
[5] On 12 April 2005 the website was closed down. Mr Siemer, however,
applied to have the injunction rescinded. This application
was heard on 28
April 2006 by Ellen France J. In a judgment which she delivered on 5 May 2006
she amended the terms of the injunction
so that, relevantly, they
prohibited Mr Siemer from publishing (at [84]):
in any form any information containing allegations of criminal or unethical
conduct or as to improper personal enrichment on the part
of the plaintiffs in
relation to their conduct of the receivership of Paragon Oil Systems Limited;
any claim that the plaintiffs
deliberately over-charged Paragon Oil Systems
Limited in the sum of $10,000; together with information as to the fact of
complaints
made by Mr Siemer and/or Paragon Oil Systems Limited to ICANZ or to
the Serious Fraud Office; and including any information obtained
by Mr Siemer or
Paragon Oil Systems Limited in the course of discovery in any proceedings
pending further order of the Court ...
.
This injunction came into effect on 12 May 2005.
[6] A subsequent appeal to this Court against the judgment of Ellen
France J was dismissed, see Siemer v Ferrier Hodgson CA87/05 13 December
2005.
[7] In the meantime, however, the website had been reactivated. This
occurred on 3 May 2005. The site was then closed down
again on 5 May 2005.
We will discuss the details of this shortly. It is sufficient at
this stage to note that Mr
Siemer’s explanation for the reactivation
of the website (in apparent breach of the injunction granted by Winkelmann J)
was
that he had sold the website and the information on it to the Talayna
Group of Italy, an entity associated with a Mr
Edmundo Tunney, and that
the reactivation had been at Mr Tunney’s instance. The website was
reactivated again on 19 May 2005
and continued in operation (with information
relating to Mr Stiassny’s involvement in the Paragon receivership on the
website)
up until either late December 2005 or January 2006. Since
then, the website has remained operational but all material
associated with the
Paragon receivership has been removed.
[8] Between 3 May 2005 and December or January 2006, additional
material was, from time to time, placed on the website. As
well, other actions
– the details of which we will discuss shortly – were taken which
drew attention to the website and/or
made allegations against Mr Stiassny.
Mr Stiassny’s position is that Mr Siemer was responsible for this
activity
and that it breached the terms of the injunction.
The relevant legal context
[9] The contempt asserted against Mr Siemer is civil in nature,
involving alleged breaches of court orders, see Arlidge, Eady
and Smith
Contempt (3ed 2005) at [3-1]. So the proceedings before Potter J were
civil and not criminal. Further, given that allegations against Mr Siemer
involved alleged breach of an interim injunction and formed a subset of the
substantive proceedings between Mr Stiassny and Mr Siemer,
the proceedings were
interlocutory, see Arlidge, Eady and Smith at [3-299]. As a consequence the
civil rules of evidence applied,
and in particular, given the interlocutory
nature of the case, hearsay was admissible under (but subject to the
requirements of)
r 249 of the High Court Rules. Further, cross-examination of
deponents required an order of the Court, see r 253.
[10] It was not necessary for Mr Stiassny to establish that Mr Siemer
knew he was breaching the injunction. It was, instead,
sufficient to show that
the relevant actions of Mr Siemer were deliberate. In saying this, we
recognise that there is some authority
which goes (or at least seems to go) the
other way, see for instance Irtelli v Squatriti [1993] QB 83 (CA). But
the weight of authority favours the view we have expressed, see for instance
Attorney-General v Hancox [1976] 1 NZLR 171 (SC), In re Mileage
Conference Group of the Tyre Manufacturers’ Conference Ltd’s
Agreement [1966] 1 WLR 1137 (Restrictive Practices Court), In re M v The
Home Office [1993] UKHL 5; [1994] 1 AC 377 (HL) and Arlidge, Eady and Smith at [3-248] and
[12-88] – [12-93]. A bona fide breach of an order which resulted from
erroneous
legal advice as to the scope of the order is nonetheless a contempt of
court, see Arlidge, Eady and Smith at [3-249].
[11] On the other hand, despite the proceedings being civil in nature, Mr
Siemer was entitled to rely on the privilege against
self-incrimination
and the criminal standard of proof that applied, see Arlidge, Eady and Smith
at [3-39] and [3-43].
Challenges to the injunctions and arguments based on freedom of
speech
[12] Much of what Mr Siemer had to say in support of the appeal
involved challenges to the legitimacy of the injunction
granted by Winkelmann J,
the variation by Ellen France J and, the correctness of the decision of this
Court which dismissed the appeal
from the latter judgment. He also invoked
freedom of speech arguments.
[13] These challenges are irrelevant to this appeal. It is no answer to
an allegation of contempt of court involving breach of
an injunction to assert
that the injunction was wrongly granted. Nor could Mr Siemer realistically have
expected Potter J to have
set aside (in enforcement proceedings) the injunction
which had been granted by Ellen France J and upheld by this Court.
Similar considerations apply to Mr Siemer’s complaints based on freedom
of expression. Freedom of expression is an important
consideration (and indeed
very often the dominant one) when prior restraint is in issue. As well,
freedom of expression
is also relevant to the
interpretation of an injunction which limits the ability of a defendant to
communicate as he or she chooses. But an injunction,
while in force, must be
complied with unless and until it is set aside.
Challenges to the procedure adopted by the Judge
The context
[14] The case had been extensively case managed prior to
the hearing commencing on 26 July.
[15] Prior to the hearing there had been rulings as to which deponents
would be required to attend for cross-examination. The
latter point had been
addressed by Keane J in a judgment delivered on 14 July 2005 (which was amended
by a minute of 19 July 2005).
The position which Keane J arrived at was as
follows:
(a) Mr Siemer’s application to cross-examine two of the deponents
relied on by Mr Stiassny, namely Mr Frederick Thompson
and Mr Campbell Rose, was
granted.
(b) His application to cross-examine a third deponent, Ms Sabrina Vai,
was deferred to the hearing.
(c) Mr Stiassny’s application to cross-examine Mr Siemer was also
in effect deferred.
[16] In the course of the judgment of 14 July, Keane J Pickering v
Attorney- General [2001] NZCA 37; [2001] 2 NZLR 324 (CA) in which McGechan J referred to the
analogy between civil contempt and criminal proceedings. He also
referred to Comet Products (UK) Ltd v Hawkex Plastics Ltd [1971] 1 All
ER 1141 (CA) and went on:
[26] In that case the English Court of Appeal considered that the defendant
ought not to be compelled to answer questions going
to the ultimate issues at
trial. But the Court also founded its decision on the principle identified by
McGechan J in Pickering, that there is a close analogy between committal
and criminal proceedings and that a like balance needs to be
preserved.
[27] Four principles emerge from the judgment of Lord Denning MR, with whom
the other members of the Court largely concurred, the
first of which is, as he
said, at [1143], that criminal and civil contempt, while not identical, are very
nearly aligned:
... a civil contempt, partakes of the nature of a criminal charge. The
defendant is liable to be punished for it. He may be sent to
prison. The rules
as to criminal charges have always been applied to such a proceeding.
[28] The second, as he expressed it at [1144], is correlative:
... a man who is charged with contempt of court cannot be
compelled to answer interrogatories or to give evidence himself
to make him
provide his guilt.
[29] The third, as he made clear at [1144]-[1145], is that this immunity is
not absolute. Intentionally or unintentionally, and
subject always to the
Court’s discretion, a defendant at risk of committal can waive the
immunity by giving, filing and using
affidavit evidence:
If he has filed an affidavit, and, in addition, if he has gone on to use it
in the court, then he is liable to be cross-examined on
it if the court thinks
it right so to order. I would not say that the mere filing is sufficient[,] but
I do say that when it is not
only filed but used, the defendant does expose
himself to a liability to be cross-examined if the judge so rules.
[30] The immunity is, conversely, less than absolute in a second sense. A
defendant who relies on his or her affidavit,
but refuses to be
cross- examined, and is not compelled by order, is at the risk, as Lord Denning
said at [1145], that ‘...
the judge might [think it right] to disregard
the affidavit, or give it very little weight.’
[31] The fourth principle is most pertinent here. If there is to be cross-
examination, Lord Denning said at [1145] (see also Megaw
LJ, Cross LJ, [1147]),
it must be confined to the circumstances of the contempt. Should questions range
rather to what will be in
issue at the substantive hearing that can be unfair in
the contempt proceeding, the object of which is to punish. It can be
objectionable,
equally, as directed to a collateral purpose – a wish to
secure admissions, before the ultimate hearing, going to liability.
[32] These considerations, together, resulted in the defendant in that case
avoiding cross-examination even though he had not merely
filed an affidavit, he
had relied on it. But they are not absolutes. The cross-examination there
proposed touched barely on the contempt
and went much more widely to the
ultimate issues.
[33] Beginning then with unfairness: a defendant at risk of committal, who
seeks to rely on his or her affidavit evidence, but not
be tested on it, in my
view wishes to have it both ways. He or she takes a position that is self
contradictory and without apparent
fairness. And I cannot begin to see
how
that could be assured him or her by s 25(d) of the New Zealand Bill of
Rights Act 1990.
[34] Even where the right to silence is relied on in criminal proceedings,
and not waived, it is not absolute. Adverse inferences
can be taken from a
failure to give an explanation or give evidence, notwithstanding s 25(d): R v
Drain (CA 249/94, 11 October 1994). The corollary surely also applies.
Where a defendant at risk of committal elects to waive the right
of silence to
answer by affidavit any adverse inference, perhaps to achieve more, he or she
must be open to be tested. That is the
risk that any accused person takes, who
elects to give evidence at trial.
...
Conclusion
[37] As I said at the outset, this application, I consider, can
only be advanced and resolved at the hearing itself.
Mr Siemer’s two
affidavits are on the record, and cannot be withdrawn. But he has not yet, as
appears necessary, adopted them
to advance his case. He retains until Mr
Stiassny’s case closes the right to contend then, without referring to his
affidavits,
that there is no case to answer. Then the Judge would, I consider,
be obliged to disregard his affidavits, and Mr Stiassny could
not rely on them
either.
[38] Should, conversely, Mr Siemer rely on his affidavits, but refuse to be
cross-examined, the Judge would have to decide whether
to accept that and accord
the affidavits no weight; or some weight, and if the latter, permit
cross-examination and define its scope.
That decision cannot be
anticipated.
[17] The case was heard on 26 and 27 July and 19 and 20 December 2005. Mr Siemer and Paragon were represented by Mr Colin Henry on the first two days of the hearing. The case was to resume on 5 December 2005 but on that day Mr Henry sought and obtained leave to withdraw. Mr Siemer was not in court and the hearing continued, effectively ex parte, for some time until Mr Siemer arrived with new counsel, Mr Grant Illingworth QC, who managed to obtain an adjournment until
19 December. On that day Mr Illingworth was granted leave to withdraw and
the hearing proceeded with Mr Siemer representing himself
and Paragon
unrepresented.
[18] Potter J, correctly, approached the case on the basis that what was
alleged was a civil contempt and the application was,
strictly, interlocutory in
nature. Accordingly, the case fell to be determined primarily on the basis of
affidavit evidence but subject
to the possibility of additional oral evidence
being called or cross-examination of deponents if permitted by the
Court.
[19] At the hearing before Potter J issues arose as to the
cross-examination of:
(a) Ms Vai;
(b) Mr Garrett;
(c) Mr Tunney; and
(d) Mr Siemer.
Mr Siemer’s complaints about the procedure adopted by the Judge (other
than those that are more conveniently dealt with under
the heading of bias)
relate primarily either to the rulings which the Judge gave in relation to each
of those deponents or, more
generally, to the fact that the contempt of court
case was heard before the substantive proceedings.
Refusal to permit cross-examination of Ms Vai
[20] Mr Stiassny’s primary allegation in relation to the operation
of the website was that the purported sale to Talyana
Group/Mr Tunney was a
sham. Indeed, Mr Stiassny’s position at one stage appeared to be that Mr
Tunney did not exist. Support
for this contention was provided in the affidavit
of Ms Vai, an Italian private investigator. Mr Siemer, however, was able to
produce
an affidavit from Mr Tunney (sworn on 12 December 2005). By 19 December
2005, Mr Stiassny accepted that Mr Tunney existed, was a
resident of the United
States and was an old friend of Mr Siemer. Nonetheless, Mr Siemer wished to
have Ms Vai available for cross-
examination.
[21] Mr Siemer’s application to this effect was declined by Potter
J in a ruling of
19 December 2005. She concluded that cross-examination of Ms Vai would do
little to assist the Court in determining whether the sale
of the website was a
sham. In those circumstances she concluded that it would be disproportionate
in relation to cost and convenience
to require Ms Vai’s attendance,
whether in person or by video link, for cross-examination.
[22] There was no error in this ruling. We accept that, despite
the accepted existence of Mr Tunney, Ms Vai’s
affidavit perhaps retained
some residual significance as to the bona fides of the alleged sale. But once
Mr Tunney surfaced, Ms
Vai’s affidavit was at best of peripheral
relevance. Further, and importantly, as will become apparent, the Judge did not
decide the case against Mr Siemer on the basis that the assignment was a sham.
So the evidence of Ms Vai was, in the end, of no
materiality to the findings
later made against Mr Siemer.
[23] Mr Siemer argued this aspect of the case before us very much on the
basis that if Ms Vai had been available for cross-examination,
improprieties on
the part of Mr Stiassny, or perhaps his agents, in terms of the way in which his
evidence was put together would
become apparent. It is not obvious why any such
improprieties would be relevant to the question whether Mr Siemer was guilty of
contempt of court. But, in any event, the suggestion that there may have been
such improprieties seems to us to be entirely speculative
and as not warranting
the expense and delay which would have been associated with an order that Ms Vai
be cross-examined.
The abandoned application to cross-examine Mr Tunney
[24] Mr Tunney’s affidavit of 12 December 2005 was lodged extremely late in the piece. Without objection from Mr Stiassny, it was nonetheless accepted as evidence in the case. This affidavit broadly (although by no means precisely) supported Mr Siemer’s assertion that the website had been sold on a bona fide basis prior to the
3 May 2005 reactivation.
[25] Initially Mr Miles QC for Mr Stiassny wished to have Mr Tunney
cross- examined. But eventually, either of his own volition
or at the
suggestion of Potter J, Mr Miles did not persist with this application. Mr
Siemer complains about this. In part, because
he sees the behaviour he
attributes to the Judge as evidence of bias. He takes the view that if Mr
Tunney had been cross-examined
this would have enhanced his case. He also notes
that the Judge was, in her judgment, critical of Mr Tunney’s evidence
despite
the fact that he had not been cross-examined. This latter
point
would have been of some moment had the Judge’s criticisms of Mr
Tunney’s evidence been carried through into a finding
that the sale was a
sham. But although the Judge plainly thought it more likely than not that the
sale was a sham, she was not satisfied
to the criminal standard of proof that
this was so. Given that the issue of sham is no longer before us (as Mr
Stiassny did not
seek to challenge this aspect of the Judge’s ruling) this
consideration is of no moment. We see no valid appeal point here.
[26] Mr Siemer complained to us that the “finding” of sham
which the Judge made on the balance of probabilities was
itself unfair and
prejudicial to him and should not have been made in the absence of
cross-examination. But, in a context in which
proof on the balance of
probabilities was not sufficient, there was no relevant finding. This whole
issue is therefore peripheral,
at best, to the questions which we must
address.
Refusal to permit the cross-examination of Mr Garrett
[27] Mr Garrett is associated with Ferrier Hodgson (and thus Mr
Stiassny). He has sworn a number of affidavits in the case.
Aspects of those
affidavits could be (and indeed were) criticised as involving assertions of
opinion or conclusions. But after
some “pruning”, the affidavits
largely went to the Court as recording the state of the website at particular
times, producing
documents relied on and providing some context for some of the
specific allegations made against Mr Siemer. As Mr Miles put it,
they were in
effect a matter of record (or at least that was what was intended).
[28] No application had been made to have Mr Garrett cross-examined prior to the hearing commencing in July 2005. The case had, as we have noted, been closely case managed. The application to have him cross-examined made by Mr Siemer on
19 December 2005 came out of the blue. There was no obvious point to be
served by cross-examination and it may well have further
delayed the conclusion
of the hearing (even though Mr Garrett was in Court). Mr Siemer did
not offer an
explanation as to why the application had not been signalled
earlier. In those circumstances the Judge was perfectly
entitled to decline
Mr Siemer’s application to cross-examine.
[29] In the course of argument before us we asked Mr Siemer what he
wished to cross-examine Mr Garrett about. From what he said,
it is clear his
primary focus would have been on the merits of the underlying injunction and the
judgment of this Court which upheld
the orders made by Ellen France J. Such
issues as Mr Siemer mentioned, which were potentially relevant to whether he had
acted in
contempt of court, in particular as to inquiries Mr Garrett made as to
certain letters (which we will be discussing later) and stickers
(also to be
discussed later), seemed to us to be largely peripheral. As well, there is no
indication that these points were put
before Potter J.
[30] Accordingly we are of the view that there was no error in the
approach taken by Potter J.
Directing cross-examination of Mr Siemer
[31] In the ruling which was delivered on 20 December 2005, the Judge
directed that Mr Siemer be cross-examined on his affidavits.
As noted, Keane J
had earlier indicated that the question would very largely turn on whether Mr
Siemer relied on his affidavits.
By the time Potter J came to make the ruling
it was clear that Mr Siemer did indeed rely in his affidavits. In dealing
with
this application the Judge said:
[12] Mr Siemer in opposition to the application stated that he has given
his evidence in affidavits filed on oath and that accordingly
he would be guilty
of perjury if he has given untrue evidence. He suggested that the plaintiffs
were conceding that their evidence
was not strong in seeking an application to
cross-examine him. Further, that his rights under the Bill of Rights Act must
be taken
into account in relation to this proceeding, and that given the
Court’s decision to decline his application to cross-examine
the
witness Sabrina Vai it would be unjust to grant the plaintiffs’
application to cross- examine him.
[13] Dealing with each of those points in turn. It is of course a fact
that Mr Siemer has given his evidence on oath in the affidavits
he has filed. I
do not accept the suggestion that it is a necessary implication that the
plaintiffs consider their case to be “not
strong” when they seek a
right to cross- examine Mr Siemer. As I have previously observed, in criminal
proceedings when
an accused person gives evidence then that accused must be
available for cross-examination by the Crown, the opposing party.
[14] I accept that s 25(d) of the Bill of Rights Act confers on Mr Siemer
the right not to be compelled to give evidence but, like
Keane J, I do not see
that that assists him here. It is the very reason why Keane J deferred making a
decision at the time he considered
the plaintiffs’ application. Mr Siemer
has now elected to rely on the affidavits he filed, and he should therefore be
available
for cross-examination.
[15] As to the ruling in relation to the witness Sabrina Vai, that
involved, as do all such applications, a balancing exercise.
Ms Vai’s
evidence related to factual matters which are before the Court in her affidavit.
I reached the conclusion that cross-examination
would not advance those
particular issues significantly to outweigh the cost and inconvenience of
bringing Ms Vai to Court for cross-examination.
To an extent her evidence
relates to peripheral mattes. Mr Siemer’s evidence goes to the heart of
the matter and is directly
relevant to the issues in this case.
[16] I therefore conclude that Mr Siemer should be available for cross-
examination by the plaintiffs, and the plaintiffs’
application will be
granted subject to the cross-examination being confined within the limits of the
nine headings I have previously
set forth in this judgment.
[32] Although Mr Siemer did then give evidence, this evidence in
the main consisted of him declining to answer the questions
directed to him by
Mr Miles despite the Judge’s directions to do so.
[33] We endorse as correct the approach that the Judge took. Mr Siemer
could not fairly expect to rely on his affidavit evidence
but then avoid
cross-examination. It is as simple as that. That this is so had been set out
very clearly in the judgment of Keane
J and Mr Siemer could have been under no
doubt that if he relied on his affidavits he would almost certainly be
cross-examined.
The fact that the contempt of court case was heard before the
substantive proceedings
[34] Mr Siemer sees it as an abuse of process that the
contempt of court proceedings came to be heard before the
substantive claim
against him with the
consequences that he could not rely on evidence that his core allegations
against Mr Stiassny are correct or arguments that the injunction
ought not to
have been granted. Associated with this argument was a contention that
Mr Stiassny is dragging the chain
in terms of getting the substantive
proceeding ready for trial.
[35] We are not in a position, on this appeal, to apportion blame for the
comparatively slow progress of the substantive proceedings.
More
importantly, however, in a situation where an interim injunction has apparently
been defied, both the Court and the plaintiff
can be expected to devote primary
attention to securing compliance with that order and imposing sanctions for any
associated contempt
of court. We are satisfied that there was no abuse of
process in determining the contempt of court application ahead of the
substantive claim.
Claims that the Judge was biased
[36] A good deal of the hearing before us was devoted to the contention
advanced by Mr Siemer that the Judge had displayed bias
towards him. This
contention was supported by the affidavits of Mr Siemer and a number of other
people who had been in Court during
all or part of the hearing. Counsel for Mr
Stiassny did not seek to cross-examine those deponents. There was, as well, an
affidavit
from Mr Garrett which broadly defended the way in which the Judge
conducted the hearing. He was cross-examined before us. We also
heard oral
evidence from Mr Henry who did not swear an affidavit but gave evidence in
response to a witness summons issued by this
Court on the request of Mr Siemer.
Mr Henry made some criticisms of the way the Judge conducted the hearing (for
instance in relation
to comments she made when he used a Latin phrase and for
correcting his pronunciation of the name of Grieg J) but he stopped short
of
describing her as biased.
[37] In advancing his submissions as to bias, Mr Siemer to some extent
relied on the rulings of the Judge as to cross-examination
to which we have
already referred. As well, he complained about the actions of the Judge in
proceeding with the hearing on 5 December
2005 after Mr Henry had withdrawn but
when Mr Siemer was not
himself present. He describe the Judge as having “dismissed”
both Mr Henry and Mr Illingworth (albeit that all the Judge
had done was grant
each of them leave to withdraw as they had requested). More generally,
however, Mr Siemer relied on what he
alleged was a lack of interest in the
submissions which he or his counsel advanced, a more gracious and
accommodating response
to the submissions advanced by Mr Miles, belittling
of Mr Henry and to some extent of Mr Siemer, occasional judicial anger and
what
Mr Siemer saw as the Judge offering assistance to Mr Miles – in allegedly
suggesting that Mr Miles should not persist
with the application to
cross-examine Mr Tunney and providing Mr Miles with a reference to a case that
supported his position as
to Mr Siemer’s inability to represent Paragon
(the case being the well known decision, Re G J Mannix Ltd [1984] 1 NZLR
309 (CA)). Mr Siemer also noted that at the outset the Judge declined his
request for an electronic record to be taken of the proceedings.
[38] Complaints of bias against a Judge are not common but are not
unknown either. It sometimes happens that an unsuccessful
litigant will
attribute the outcome of the case to judicial bias rather than the view the
Judge took of the merits. One of the problems
with such a complaint is that
there is usually no obvious reason why a Judge with no personal or financial
link to the parties or
outcome of the case should be biased. Given this, the
most likely explanation for impugned judicial conduct is usually that it was
a
reaction to unmeritorious arguments or evidence.
[39] Issues of alleged or actual bias sometimes arise out of the way in
which jury trials have been conducted. Even in this
sensitive context, this
and other similar courts have recognised that trial judges are entitled to a
reasonable degree of latitude
in terms of response to the way in which a case
unfolds. Representative cases are R v Parata (2001) 19 CRNZ 352 (CA),
R v Rikys CA428/01 3 July 2002, R v Singh CA333/95 24 July 1996
and R v Sharma CA360/04 and CA364/04 6 July 2006. Of more relevance in
the present context, however, are decisions which concerned proceedings
which were not tried before juries. In this context it is sufficient to cite
two cases.
[40] In Francis v Police HC ROT AP38/01 and AP45/01 20
June 2001, Anderson J was asked to overturn a decision of a District Court
Judge on the grounds
of, inter alia, judicial bias. The transcript of the
hearing revealed that the Judge had:
(a) referred to the appellant’s words as “facile”; (b) told him to shut up; and
(c) called him insolent.
The Judge had, as well, at one stage sent the appellant to the cells to
compose himself. In the view of Anderson J, the appellant
had been querulous
and disrespectful, had extended the trial beyond the allotted time, had talked
over the Judge, introduced red
herrings and embarked on fishing expeditions
during cross- examination. In that context, indications that the Judge had lost
his
temper did not disclose apparent bias.
[41] Broadly to the same effect is the decision of the Court of Appeal of
England and Wales in BLP UK Ltd v Marsh 2003] EWCA Civ 132. The
complaint was that an employment tribunal had displayed bias allegedly
manifested by the chairwoman rolling her eyes, tut-tutting,
snorting, shaking
her head and directing intimidating looks at witnesses giving evidence. The
Employment Appeal Tribunal did
not accept that all the particular complaints
had been made out but accepted that the chair of the tribunal had displayed some
hostility
to the losing party. It nonetheless dismissed an appeal on the basis
that such behaviour was merely a reflection of the chairwoman’s
reactions
to the case as it unfolded and did not show a real possibility of bias. The
Court of Appeal agreed with that approach.
[42] It is critical to look at the complaints made by Mr Siemer in the
context of the case that developed. This can perhaps
be best
illustrated by indicating what happened on 26 July 2005.
[43] At the commencement, Mr Henry asked that the full proceedings be
recorded electronically. That is not the usual practice
in the High Court in
civil proceedings.
The request might therefore be thought to have implied that the Judge would
not take an appropriate record of the proceedings. Unsurprisingly,
the Judge
dismissed the application.
[44] This was followed by an application by Mr Henry to the Judge that
she recuse herself. In part this was on the basis of a
complaint that Mr Henry
had made about her to the Chief High Court Judge in relation to another case, a
complaint which the Judge
had not previously known about. Mr Henry also relied
on an earlier decision of the Judge in a criminal case in which she referred
to
profiling practices developed by the New Zealand Customs Service which were
addressed to West African nationals. Mr Henry suggested
that the Judge had in
this way stigmatised West African nationals and that he, too, had been
stigmatised (on the basis that he might
be thought by his appearance to be from
West Africa, although he is in fact from the West Indies). The Judge
understandably took
this application as a scarcely veiled assertion that she was
racist.
[45] When she declined this application, Mr Henry then sought an
adjournment of the proceedings on the basis that Mr Siemer and
Paragon wished to
appeal the judgment on the recusal application. She declined the
application.
[46] Mr Henry then, so it would appear from a ruling delivered
by Potter J, endeavoured to seek an adjournment on the
basis that he had not
had sufficient opportunity to prepare the case. The Judge interrupted this
application, telling him that she
would be prepared to hear such an application
after the plaintiffs had concluded their case.
[47] There followed an application by Mr Henry for an order excluding
from the evidence in the proceedings three of the affidavits
relied on by Mr
Stiassny, an application which was based on a very technical reading of rules
242 and 248 of the High Court Rules.
Given that the case had been case managed
and that no argument on this point had been previously raised, not to mention
the technicality
of the point, the application was not long on
merit.
[48] All of this provided an inauspicious start to the hearing. This is
not to say that Mr Henry (or Mr Siemer for that matter)
were not entitled to
make the applications. But they provide a context in which some irritation on
the part of the Judge is understandable.
[49] When the hearing resumed on 5 December, Mr Henry sought
and was granted leave to withdraw. Mr Siemer knew that
this was going to
happen. He was, however, nonetheless not present in Court. He did not put in
place arrangements for alternative
representation and he did not appear to
represent himself. The Judge continued with the hearing, resulting in the
intervention
from Mr Illingworth. In the end the proceedings were adjourned at
Mr Illingworth’s request until 19 December so there was
no prejudice to Mr
Siemer in any event. We see no grounds for criticism of the Judge in
being prepared to proceed with
the hearing given Mr Siemer’s
non-appearance. This is particularly so given that the website, with
apparently contravening
material on it, was still operating and the
Christmas vacation was fast approaching.
[50] Some aspects of what happened on 19 and 20 December also
warrant attention. The application to cross-examine
Mr Garrett came very late
in the piece, particularly given the case management processes. Perhaps
more relevantly, Mr Siemer’s
response to the Judge’s entirely
predictable direction that he be cross- examined on his evidence was quite
extraordinary.
[51] Against that background, we find that the actions attributed by Mr
Siemer to the Judge did not disclose actual or apparent
bias. This head of
the appeal is dismissed.
Challenge to the factual findings
Overview
[52] The core allegations made by Mr Stiassny against Mr Siemer
can be discussed conveniently under the following headings:
(a) Reactivations, maintenance, continued operation and updating of the
website;
(b) Distribution of stickers; and
(c) Letters sent to the trustees of the Auckland Electricity
Consumer
Trust, accountants and newspapers.
It will also be necessary to discuss, as a discrete topic, the
reliance placed by
Mr Stiassny on hearsay material.
Reactivations, maintenance, continued operation and updating of the
website
[53] The website was created on 14 March 2005. It was registered in the name of Mr Siemer who gave an address in the United States. On 12 April 2005 (after the first injunction) the site was closed down. It was reactivated on 3 May 2005 and closed down again on 5 May 2005 (coincidentally on the same day as the judgment of Ellen France J was released). The website was reactivated on 19 May 2005 and continued in operation until after the hearing before Potter J concluded on
20 December 2005. However, prior to the delivery of Potter J’s first
judgment, the material on the website associated with
Paragon was
removed.
[54] Mr Siemer’s position throughout has been that on 26 April 2005 he sold the website to an entity known as Talayna Group of Italy which is associated with his friend, Mr Edmundo Tunney. He maintained, too, that the basis of the sale was that the website would not be activated until after the resolution of the hearing before Ellen France J which was then pending. So he did not expect it to be reactivated on
3 May and he was able to secure the deactivation on 5 May.
[55] In her findings, the Judge expressed considerable scepticism about the
genuineness of the sale to Talayna but she stopped short
of concluding beyond
reasonable doubt that the sale was a sham. She held nonetheless that Mr Siemer
was in contempt of court in
that he had placed Mr Tunney in a position to
operate the website in a way which was a breach of the injunction, a conclusion
she
supported
by reference to Seaward v Paterson [1897] 1 Ch 545. She also said
that Mr Siemer was in a position to have cancelled the agreement with Mr Tunney
and should have done so. Further,
she concluded that the website had in any
event been updated by Mr Siemer and that this was in breach of the
injunctions.
[56] On this point it is necessary to discuss briefly some of the key
features of the relevant evidence:
(a) On 3 May 2005 Mr Garrett checked the website to find it
fully operative and with some recent updates. One
was a reference to a
Sunday Star Times article which had been an exhibit to an affidavit of Mr
Siemer of 26 April 2005. There was also a reference to certain material not
being included because it had been obtained on discovery in other litigation.
The publication of discovered material has been discussed
at the hearing before
Ellen France J on 28 April 2005.
(b) On the same day Mr Neale Jackson (a Ferrier Hodgson employee),
using the computer and name of his flatmate, logged onto
the website. He made an
on-line comment about the website’s contents and asked a question. On 9
May 2005 he received a response
from Mr Siemer in which he, inter alia,
said:
Our company is back up and running but Stiassny has taken his toll. We
believe there are still a number of documents Stiassny has
retained, certainly
missing. I am sure you will hear plenty of this case in the months ahead as we
are preparing a lawsuit against
him and possibly a criminal
prosecution.
(c) On 9 May 2005, Mr Garrett checked the website www.paragonoilsystems.com and found
material on it directed at the late Mr Robert Fardell QC which repeated
allegations against Mr Stiassny associated
with the Paragon receivership.
Given the nature of the material, it is difficult to see how it could have come
to be on the
website without the assistance of Mr Siemer.
(d) On 25 May 2005 Mr Garrett checked the www.stiassny.org website.
It stated:
25/5/05 Mr Siemer is currently preparing a criminal prosecution against Michael Stiassny. Anyone having any evidence of [sic] question is invited to contact us through the
‘Contact Us’ tab.
The accompanying article bears a notation indicating that Mr Siemer is the
author.
(e) On 26 May 2005 there was more new material on the
website including comment on the process in relation
to Mr
Siemer’s complaint to the Institute of Chartered Accountants
against Mr Stiassny and adverse comments directed
at Ellen France
J.
We note as well that in her judgment the Judge refers to a copy of the
judgment of Ellen France J being placed on the website along
with an interview
with Mr Siemer about it. The affidavit referring to this material was not
included in the case on appeal.
[57] The express terms of the written agreement as to the sale of the
website did not confer a right of cancellation on Mr Siemer.
But in a letter
to Mr Miles, Mr Siemer had referred to an arrangement as to price refund if the
website remained “censured”
for more than 30 days. He had also
given evidence to the effect that it had been agreed between him and Mr
Tunney that
the website should not be activated unless the injunction
granted by Winkelmann J was lifted. So there was an evidential basis
for the
conclusions of the Judge as to Mr Siemer’s ability to prevent the
operation of the website.
[58] In any event, and leaving the cancellation issue aside, Mr Siemer
was guilty of contempt of Court on the simple basis that
his sale of the website
and material relating to Mr Stiassny to Mr Tunney necessarily involved a
publication of that material to
Mr Tunney and was thus a breach of the
injunction granted by Winkelmann J. Further, the course of events associated
with
the reactivation of the
website on 3 May (with material obtained on discovery deleted but
with other material associated with Mr Stiassny included),
its
de-activation on 5 May and reactivation on 19 May (including associated
events which we are about to discuss) and the nature
of the material published
establish that he was a party to its operation. It is inconceivable that the
website could have been operated
as it was (including updates) without his
co-operation.
Distribution of stickers
[59] Mr Stiassny’s case is that on 19 May 2005 Mr Siemer
distributed stickers depicting a photograph of Mr Stiassny and
the words
“Michael Stiassny – a true story www.stiassny.org”. 19 May is of
course the day that the website was reactivated.
[60] The allegation as to distribution of stickers was supported by direct evidence from a Mr Frederick Thompson (who at the time was a solicitor employed by McElroys, the solicitors acting for Mr Stiassny) to the effect that at 1.25pm on
19 May he observed Mr Siemer walk from the lift in the McElroys’
building and promptly take the lift down. Shortly afterwards
he was advised
that stickers had been affixed to the walls of the lifts. He had not, however,
seen the person he identified as
Mr Siemer place stickers in the lifts. There
was also evidence from a Mr Campbell Rose, a solicitor employed by Russell
McVeagh.
He said that at approximately 1.30pm on the same day he saw a
man whom he identified as Mr Siemer leave the toilets
in the Russell McVeagh
offices in the Vero Centre and meet a woman and that they walked together
towards the lift lobby. He then
went to the toilets where he found a sticker.
He immediately left the toilets and saw that the man he had identified as Mr
Siemer
was still waiting for the lift to arrive but the woman was not with him.
He says that he noticed that the man was holding a sticker
in his right hand
which was the same as the sticker which he had found in the toilet.
[61] At trial both men were cross-examined closely by Mr Henry who was
then appearing for Mr Siemer. In an affidavit of 15 June
2005 Mr Siemer denied
visiting either the Vero Centre or McElroys’ offices on 19 May but when he
came to give
oral evidence, he declined to answer questions associated with the
proposition that he was responsible for the placement of the
stickers.
[62] The Judge accepted the evidence of identification given by both men.
There were some infelicities or incongruities associated
with aspects of the
details of what they claimed to have seen. But Mr Thompson in particular was a
strong witness as he had twice
before dealt with Mr Siemer and was thus
well-placed to recognise him. Conceivably, if cross-examined, Mr Garrett
could have
provided a little more context, for instance as to the days on
which stickers were distributed (which were apparently not confined
to 19 May
2005) and the nature of the stickers. But as indicated we see no error in
the decision not to direct cross-examination
of Mr Garrett and the Judge
had to decide the case on the evidence before her. In the context of the
case as a whole (which
of course included the campaign that Mr Siemer
had conducted against Mr Stiassny) the finding of fact made by the Judge was
well open to her and we are not persuaded that it was wrong.
Letters sent to the trustees of the Auckland Electricity Consumer Trust,
accountants and newspapers.
[63] A number of letters were sent in May 2005 to members of the Auckland Energy Consumers Trust which referred to “corporate undertaker Michael Stiassny” and contained a card bearing Mr Stiassny’s image and the legend “Michael Stiassny
– a true story www.stiassny.org”. Also, in May 2005
a letter addressed to “all accountants” under the signature of
“Forensic Investigations”
was sent to a Sheila Davidson. The
envelope had the name Paragon Oil Systems Ltd on it. The letter indicated that
Forensic Investigations
was assisting Mr Siemer to put together a possible
criminal prosecution case against Mr Stiassny and invited those who had similar
experiences to contact Forensic Investigations at its postal address or
through www.stiassny.org. Attached to
the letter was a card featuring Mr Stiassny’s photograph and the words
“Michael Stiassny – a true
story www.stiassny.org”. As well, in late
May 2005 letters were sent to The Independent and possibly
The National Business Review in terms broadly similar to those of the
letters to the trustees of the Auckland Electricity Consumers Trust and Ms
Davidson.
[64] The case for Mr Stiassny was that Mr Siemer was responsible for all
of this correspondence. In the case of the letters to
the trustees of the
Auckland Electricity Consumer Trust, Mr Stiassny relied on handwriting
evidence from Mr Gordon Sharfe,
who attributed the address details on two of
the envelopes to Mr Siemer. We note in passing that Mr Garrett’s affidavit
did
not address the handwriting on the third envelope. When he gave oral
evidence, Mr Siemer declined to answer questions
addressed to his
responsibility for the letters to Auckland Electricity Consumer Trust and to
accountants and the stickers or cards
apparently sent to the
newspapers.
[65] The evidence adduced by Mr Stiassny on this aspect of the case was
far from complete.
[66] The best evidence on this issue came from Ms Davidson. She gave
direct evidence of the letter (addressed to “all
accountants”) which
she received and the Paragon envelope. In the context of the case as whole,
including reactivation of
the website on 19 May and the evidence of Messrs
Thompson and Rose, it was open to the Judge to infer that Mr Siemer sent this
letter.
[67] There is rather more difficulty with the letters to the Auckland
Electricity Consumers Trust trustees. The relevant letters
and envelopes were
not produced by the recipients but rather were annexures to one of the
affidavits of Mr Garrett. He explained
that he had obtained them from the chief
executive of the Auckland Electricity Consumer Trust. So evidence as to their
receipt is
hearsay. Further, it was only implicit in the material to which Mr
Garrett referred that the envelopes (two of which were linked
to Mr Siemer by
handwriting analysis) contained the offending letters. There had, however, been
no challenge to the admissibility
of this evidence prior to closing submissions.
Further, there are some reasonably obvious points to be made about the envelopes
and
the letters. Mr Siemer admitted in his submissions to the Judge that the
handwriting on two of the envelopes was his. There was
a correspondence between
the dates on the letters and postmarks on the envelopes. The nature of the
letters was such as to suggest
(in the context of the case as a whole) likely
involvement of Mr Siemer. If the envelopes Mr Siemer admitted
addressing had not contained the letters in question, one might have expected
him to have said so. In those circumstances, we think
that the evidence on this
aspect of the case, although in part of a hearsay nature, supported the
conclusion drawn by the Judge.
[68] We reach the same view with respect to the letter sent to The
Independent for reasons which broadly correspond to those just given, this
despite the hearsay nature of the proof that the letter in question
was received
by The Independent. The hearsay arose because the letter was produced as
an exhibit to the affidavit of Mr Garrett and was not produced by its
recipient.
[69] In the case of The National Business Review, there is no
evidence, other than what appeared in the paper, of the letter which was
allegedly sent. In this instance, we think
that it would over stretch the
principles which permit hearsay evidence (which we are about to discuss) to
uphold the Judge’s
findings on this aspect of the case.
The reliance placed by Mr Stiassny on hearsay material
[70] As is apparent from what we said in the course of discussing the
evidence, there were critical features of the case advanced
by Mr Stiassny which
relied on hearsay evidence. Illustrative examples which we have just discussed
are the way in which Mr Stiassny
sought to prove the letters to the trustees of
the Auckland Electricity Consumer Trust, The Independent and The
National Business Review. As well, proof that stickers had been affixed to
the lifts in the McElroy’s building came second hand, through Mr Thompson,
and this too involves hearsay.
[71] Rule 249(2) of the High Court Rules applied to the proceedings (see
[9]
above). That provides :
... the Court may accept statements of belief in an affidavit in which the
grounds for the belief are given if –
(a) the interests of no other party can be affected by the application;
or
(b) the application concerns a routine matter; or
(c) it is in the interests of justice.
[72] The case was also subject to the provisions of the Evidence
Amendment Act (No 2) 1980 as they apply to the admission of hearsay
in civil
cases, but those provisions do not materially advance the position from
the point of view of Mr Stiassny.
[73] The affidavits relied on by Mr Stiassny which contain hearsay
assertions were not drafted with r 249(2) in mind. But broadly
they can be
taken to assert belief on the part of the deponents for reasons which
are stated, namely the assertions
of others. Further, they concern issues
which, while in one sense important, might have been thought to have been
uncontroversial:
that the relevant letters to the trustees of the Auckland
Electricity Consumers Trust were contained in the envelopes in question;
that
the letter to The Independent which was produced had been sent; and that
stickers had been placed in the lifts in the McElroys’ building. The
affidavits which
Mr Stiassny relied on had been subjected to a rigorous vetting
process involving Mr Henry and many passages had been deleted. If
the hearsay
points which we are discussing had been raised, it would probably have been easy
for Mr Stiassny to adduce further direct
evidence on the issues in question. In
that context, it might be thought that it was too late for Mr Siemer to take
such hearsay
points in his closing submissions (as he did for instance in
relation to the letter/envelope issue) or in this Court.
[74] A problem in the case is that the Judge did not address directly why
she acted on the basis of hearsay evidence and, in particular,
did not say why
she considered that it was admissible. It can, however, only have been on the
basis that r 249(2)(c) applied.
We are of the view that her conclusion,
implicit thought it was, that it was in the interests of justice to admit the
hearsay was
correct save in relation to The National Business Review
letter, a copy of which was not produced in evidence.
Challenge to costs award
[75] This challenge was not pursued in the oral submissions and we, in
any event, see no basis upon which we could legitimately
interfere with the way
in which the Judge exercised her discretion to fix costs.
Conclusion
[76] The only respect in which we differ from the Judge as to liability
(The National Business Review letter) is too trivial to warrant, in
itself, any interference with the orders made by the Judge and see no other
basis for interference.
The appeal is dismissed. Mr Siemer is ordered to pay
costs of $6,000 and usual disbursements to Mr Stiassny and Ferrier
Hodgson.
Solicitors:
McElroys, Auckland for the Respondents
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