Contempt in civil proceedings: responding to breaches of Court orders

When can a party to a civil proceeding end up in jail?  When they breach a Court order and are found guilty of contempt.

Whilst rare when considered in the context of the number of Court orders made every day, the prospect of a conviction for contempt and possible imprisonment should be kept in mind by any party who is subject to a Court order.

Recent matters, including the case of former AFL umpire Troy Pannel who was found to have sold assets in breach of Court orders, show that Courts are increasingly being asked to enforce their authority in relation to dealings in which contempt may have occurred.

The contempt jurisdiction is a powerful tool, capable of addressing a wide range of conduct that is “wilful” or “contumacious” as opposed to merely “casual, accidental, or unintentional”.[1] The consequences of contempt are serious, as the usual outcome of successful contempt proceedings, whether classified as civil or criminal, is punishment.

This article explores how contempt arises in civil proceedings, the legal thresholds for proving it, and the Courts’ approach to punishment.

When can contempt occur?

A plaintiff can initiate the process by filing a “charge of contempt”, which itself must be sufficiently detailed to enable the respondent to answer to the charges put by the plaintiff. It follows that the Courts will not allow a plaintiff to rely upon affidavit evidence if the statement of charge does not sufficiently specify the contempt.[2]

To establish a charge of contempt of Court, the following five elements must be proven beyond a reasonable doubt: [3]

1. an order was made by the Court;
2. the terms of the order are clear, unambiguous and capable of compliance;
3. the order was served on the respondent, or excused in the circumstances, or service dispensed with pursuant to the Rules of the Court;
4. the respondent had knowledge of the terms of the order; and
5. the respondent breached the terms of the order.[4]

To prove contempt of Court, it must be shown that the breach of the Court order was wilful – the person knowingly and deliberately failed to comply.

Importantly, this doesn’t always require a direct intention to disobey an order. A breach caused by carelessness or neglect may still be considered wilful if the person was aware of the order and failed to act appropriately.

The Court’s approach to sentencing

Fundamentally, punishment for contempt aims to uphold and protect the administration of justice by the demonstration of enforcement of Court orders.[5] Therefore, the Court has a broad discretion in determining whether to punish for contempt, and if applicable, the appropriate sanction, noting that:

• a natural person may be punished for contempt by committal to prison, fine, or both;[6] and
• a corporation may be punished for contempt by sequestration, fine, or both.[7]

There are guiding considerations for each of the punishments:

1. Imprisonment: imposed where a non-custodial sentence could not achieve the same purpose.[8]
2. Fines: will be imposed, subject to the contemnor’s ability to pay and considerations such as whether the fine has the potential to diminish the capacity of the contemnor to pay a judgment debtor,[9] or further harm their interests as a creditor.[10]
3. Compensation: may be awarded where the conduct has caused identifiable economic loss or where the Court considers it appropriate.[11]

Furthermore, in determining the severity of any punishment, the Court will consider:[12]

• the contemnor’s personal circumstances;
• the nature and circumstances of the contempt;
• the actual consequences of the contempt;
• the effect of the contempt on the administration of justice;
• the contemnor’s culpability;
• the need to deter the contemnor and others from repeating the contempt;
• the contemnor’s reasons for his or her conduct;
• the absence or presence of a prior conviction for contempt;
• the contemnor’s financial means;
• whether the contemnor has exhibited general contrition and made a full and ample apology.
• whether the contemnor has received, or sought to receive, a benefit or gain from the contempt; and
• the need for denunciation of contemptuous conduct.

Any penalty imposed must be just and appropriate in all the circumstances. Any aggravating factors must first be proved beyond reasonable doubt before such matters can be considered for the penalty.[13]

Examples of contempt of Court

The following cases illustrate the range of penalties imposed by Australian Courts following findings of contempt, highlighting how sentencing is shaped by the nature and seriousness of the breach.

Concluding comments

Contempt of Court is a very serious matter, and can transform a person’s involvement in civil proceedings to a scenario where they face a sentence of imprisonment.

As recent cases demonstrate, Courts are prepared to impose significant penalties, including imprisonment, where conduct is found to be wilful and contumacious.

The legal framework governing contempt is strict, requiring proof beyond reasonable doubt and careful consideration of both aggravating and mitigating factors. Practitioners should be mindful of the procedural requirements and the potential consequences when advising clients or initiating contempt proceedings.

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[1] AMIEU v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 111–112.

[2] CFMEU v BHP Steel [2001] FCA 1758 at [31] (Lee and Finn JJ).

[3] Witham v Holloway (1995) 183 CLR 525 at 534 (Brennan, Deane, Toohey and Gaudron JJ).

[4] Moira Shire (n 1) at [39]; Witt at [45].

[5] Australian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 1621 CLR 98, 107.

[6] Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 75.11(1).

[7] Ibid (2).

[8] Hera Project Pty Ltd v Bisognin (No 2) [2019] VSC 625 [60] (‘Hera Project’).

[9] Testel Australia Pty Ltd v KRG Electrics Pty Ltd [2014] SASC 119 [24].

[10] Hera Project (n 9) [56].

[11] D Rolph, Contempt (The Federation Press, 2023), 820-822.

[12] Deputy Commissioner of Taxation v Gashi (No 3) [2011] VSC 448 [5]; Matthews v ASIC [2009] NSWCA 155 [129].

[13] Hera Project [31].