In 2013, the Federal Court ordered a 3 year sentence for contempt of court by Peter Foster. While the original decision reinforced the ACCC’s hard-line approach to contempt of court orders, the Federal Court last month ordered the early release of Peter Foster from Brisbane’s Arthur Gorrie Correctional Centre, confirming its jurisdiction to do so in particular circumstances.

Despite Foster’s unfortunate long line of Court appearances – as a result of original infringements, the ACCC’s zero-tolerance approach toward his ongoing conduct, his flagrant breaches of Court orders, and a number of unsuccessful appeals – it appears that he has single-handedly lead to important clarification regarding the interaction of criminal law with the CCA, resulting in the confirmation of a little-considered aspect of the Federal Court’s jurisdiction.

Timeline

  • 2 September 2005: Justice Lander of the Federal Court made orders regarding Foster after successful ACCC proceedings for resale price maintenance and misleading and deceptive conduct in connection with the marketing of TRIMit — a ‘purported weight loss aid’. Among other things, the orders included that Peter Foster be restrained for five years from:
    • being directly or indirectly knowingly concerned in the promotion or conduct by a corporation of any business relating to weight loss, cosmetic or health industry products or services of any kind; and
    • making representations about the quality of a product or service without believing the representation to be accurate, informing the representee in writing of all information of which he is aware that refutes, qualifies or contradicts any part of the representation, and providing a copy of the Federal Court orders to the representee.
  • March 2006: Foster’s appeal challenging the Federal Court’s jurisdiction to make such orders was unanimously dismissed with the Court stating ‘If the court considers that a complete prohibition, whether permanently or for a specified period, on a respondent’s engaging in a particular field of commercial activity or industry is required to protect the public from conduct of the kind which constituted the contravention, s 80 is wide enough to support such a prohibition as a matter of power’. The decision confirmed the Federal Court’s power to make preventative orders against misleading and deceptive conduct.
  • December 2009: Foster became involved in SensaSlim, a business which manufactured a nasal spray marketed as a weight loss aid, including producing promotional materials containing claims about the effectiveness of the spray without disclosing the court orders to persons receiving these materials.
  • November 2011: The ACCC became aware of Foster’s involvement in SensaSlim and sought orders for the arrest and imprisonment of Foster due to concerns that he might flee the jurisdiction and Foster was arrested on 18 November 2011 and placed in custody but was released a month later.
  • September 2013: The Federal Court found Foster guilty of contempt of court orders, noting ‘it was difficult to envisage a more flagrant and deliberate breach’ of the orders.
  • 24 October 2013: The Federal Court sentenced Foster to 3 years imprisonment with 18 months to have been served and 18 months suspended.
  • 18 March 2014: While Foster had lodged an appeal against the sentence, the Federal Court ordered that if he did not surrender himself by 25 March 2014, his appeal would be dismissed. The appeal was dismissed.
  • October 2014: Foster was finally arrested in Byron Bay after having been on the run for a year.
  • October 2015: The Federal Court handed down its decision regarding Foster’s application under Rule 42.22 of the Federal Court Rules for early release from prison.

The decision

Logan J noted two issues for determination in the most recent decision in relation to Foster:

  1. whether and in what circumstances this Court may order the early release of a person committed to prison for contempt; and
  2. if there is such a power, whether in the particular circumstances of this case an order for Mr Foster’s early release ought to be made?

Civil, not criminal, in nature

The Court noted that r 42.22, which allows applications to be made for early release, did not distinguish between criminal and civil contempts. The Court therefore had to consider the applicability of the case of Attorney-General v James [1962] 2 QB 637, in which it was held that there was no power to order early release in respect of criminal contempt “because the court becomes functus officio upon the fixing of the term of imprisonment”, i.e. it has discharged its duties.

In the earlier 2013 proceedings, Logan J had determined that although civil procedure governed the CCA proceedings, they were criminal in nature and Foster’s deliberate defiance of Court orders constituted criminal contempts. After having regard to findings in the recent High Court case of CFMEU v Boral Resources (itself a contempt case), however, Logan J accepted that he had been erroneous in his initial characterisation and that the proceedings determining charges of contempt were actually of a civil rather than criminal nature. Despite this, however, he stuck to his original assertion that the ACCC was “required to prove the charges it laid against Mr Foster beyond reasonable doubt”.

Differences illusory

Despite the change in characterisation, Logan J notes that any basis for distinction between civil and criminal contempt was largely illusory, as the outcome in either event is punishment, whether it be primarily for the vindication of judicial authority or to coerce individual obedience. Logan J therefore concluded that:

…it is difficult to see how any principled distinction can or ought to continue to be drawn between so-called criminal and civil contempts in relation to the existence of a judicial power to order early release… [A] case touching upon personal liberty is to proceed on the basis that the jurisdiction does indeed exist..

Decision on early release

Logan J did not allow the publication of his decision regarding the second issue for determination, namely whether an early release should be ordered for Foster, with hearing of this part of the case, which included evidence of a “new factor” to be taken into account by the Court, conducted in closed session. Logan J concluded:

Although Mr Foster’s deliberate and false purporting to have been in Fiji when all the while he remained in Australia both at the time of his sentencing for the contempts and thereafter until arrested in 2014 was deeply dismissive of the administration of justice and entirely consistent with the deficiency of character described when he was sentenced for those contempts, there are countervailing considerations, albeit of a nature which must remain for the present confidential, which warrant his early release from prison, subject to the continued contingency of his being required to serve the 18 month balance of the original three year term of imprisonment…

Significance

This case confirms that in orders sought by the ACCC and in subsequent contempt proceedings, the proceedings should be characterised as civil, not criminal in nature. In the case of civil contempts, the decision also confirms that, the court continues to have jurisdiction after sentencing (ie the court is not functus officio once a sentence in respect of a criminal contempt has been imposed) and therefore has jurisdiction to order early release where the contemnor has suffered punishment proportionate to his contempt.

The judgment is one of a number of important decisions on procedural points this year, including the Full Federal Court judgment on the use of agreed penalties in pecuniary penalty cases, which was heard by the High Court in October with judgment now reserved.