N5609
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 154 OF 2014

IAN AUGEREA,
REGISTRAR OF THE NATIONAL COURT
Plaintiff

V

TODAGIA KELOLA
First Defendant

SOUTH PACIFIC POST LIMITED
Second Defendant

Waigani: Cannings J
2014: 29 May, 10 June

CONTEMPT OF COURT – punishment – disobedience contempt – failure by print journalist and newspaper proprietor to comply with court order that required images of persons published to be frosted; unfrosted images published – different considerations depending on whether contemnor is an individual or a corporation.

Two defendants were convicted after trial of contempt of court for disobeying an order of the National Court. The order restricted the publication of photographs taken of transferees or staff during a site visit by a court party and media personnel (including the first defendant) to a regional processing centre by requiring that "all images published must be frosted or otherwise published in a way that preserves the identity of transferees and staff of the centre". The first defendant participated in the site visit and took photographs. Three days later the first defendant's employer, the second defendant, the publisher of a daily newspaper with nationwide distribution, published in its newspaper a news story and photograph, carrying the first defendant's byline, regarding the site visit. The photograph contained un-frosted images of at least six transferees. This is the judgment on punishment.

Held:

(1)	As different considerations apply depending on whether a contemnor (a person found guilty of contempt) is an individual or a corporation, it is useful to consider each contemnor separately, but apply to each of them a common decision making model, ie:

•	step 1: what is the maximum punishment?
•	step 2: what is a proper starting point?
•	step 3: what punishment has been imposed in equivalent cases?
•	step 4: what are the mitigating and aggravating factors?
•	step 5: what is the appropriate form of punishment?
•	step 6: what should the extent of the punishment be?
•	step 7: should all or part of the punishment be suspended?

(2)	As to the first defendant: there being no maximum penalty for contempt of court, it is useful to set a notional maximum of committal to prison for two years or a fine of K5,000.00 or both; a good starting point is the middle of the range: committal to prison for 12 months or a fine of K2,500.00 or both; in other cases of the disobedience form of contempt, short, sharp prison sentences in the range of ten weeks to 18 months have been the norm; mitigating factors included that the contemnor has no prior convictions, he is highly regarded in his profession and has an exemplary work history, he made a genuine but unsuccessful attempt to comply with the order in contrast to other cases that have involved flagrant disobedience of a court order, whereas aggravating factors are that it was a very significant order that was made by the court and it was absolutely clear and unambiguous in its terms and that by disobeying the order the contemnor created a risk of harm to other persons; given the genuineness of the contemnor's efforts to comply with the order and the fact that the contemnor was not directly responsible for the breach of the order, a fine, not committal to custody, was the appropriate form of punishment; the contemnor was punished at the starting point: a fine of K2,500.00 was imposed; the seriousness of the offence did not warrant any suspension.

(3)	As to the second defendant: there being no statute regulating the print media that provides a relevant benchmark for a penalty regime, an appropriate notional maximum penalty can be derived from the Companies Act: a fine of K100,000.00 or sequestration of assets to that value; a good starting point is the middle of the range: a fine or sequestration of assets to the value of K50,000.00 or both; in other cases of the disobedience form of contempt by a corporation, the punishment has ranged from an order for costs to a fine of K5 million; mitigating factors included that the contemnor has no prior convictions, it is an established and vital component of the media industry, there was no conscious decision or intention on its part or on the part of any of its directors, shareholders or employees to disobey the court's order, whereas aggravating factors are that it was a very significant order that was made by the court and it was absolutely clear and unambiguous in its terms and the defendant failed to have internal controls in place to deal with this sort of court order; given the genuineness of it employees' efforts to comply with the order and the fact that the contemnor was not directly responsible for the breach of the order, a fine, not sequestration of assets, was the appropriate form of punishment; as the mitigating factors balanced the aggravating factors the contemnor was punished at the starting point: a fine of K50,000.00 was imposed; the seriousness of the offence did not warrant any suspension.

(4)	In summary: the first defendant was fined K2,500.00, the second defendant was fined K50,000.00; both fines to be paid within 14 days.

Cases cited

The following cases are cited in the judgment:

Concord Pacific Ltd v Thomas Nen [2000] PNGLR 47
Elias Padura v Stephanie Valikvi (2012) N4894
Gabriel Yer v The State (2008) N3326
Ian Augerea v David Tigavu (2010) N4188
John Rumet Kaputin v The State [1979] PNGLR 559
Newsat Ltd v Telikom PNG Ltd (2008) N3673
Peter Luga v Richard Sikani and The State (2002) N2286
Sr Dianne Liriope v Dr Jethro Usurup (2009) N3931
Yap v Tan [1987] PNGLR 227

PUNISHMENT

This is a decision on punishment for an individual and a corporation who were convicted after trial of contempt of court.

Counsel

W Hagahuno, for the plaintiff
I Molloy & D Wood, for the defendants

10th June, 2014 

1. CANNINGS J: This is the decision on punishment for two defendants convicted after trial of contempt of court for disobeying an order of the National Court. The first defendant Todagia Kelola is a journalist with the Post-Courier newspaper and the second defendant South Pacific Post Ltd is the publisher of that daily newspaper, which has nationwide distribution in Papua New Guinea.

2. Their conviction resulted from the publication of a photograph in the Monday 24 March 2014 edition of the Post-Courier. The photograph was of a group of at least six transferees (also known as asylum seekers) accommodated at the Manus Island Regional Processing Centre. The first defendant took the photograph at the Centre three days previously, on Friday 21 March 2014, when he was a member of the Court party that conducted a site visit to the Centre as part of a National Court inquiry (HROI No 1 of 2014) regarding the circumstances of the alleged detention of the transferees. I was the Judge who on 21 March 2014 made an order at Lorengau allowing five media personnel, including the first defendant, to be members of the court party, subject to various conditions including that, though media representatives were permitted to take photographs:

all images published must be frosted or otherwise published in a way that preserves the identity of transferees and staff of the centre.

3. The photograph, which connected to a front-page banner headline and story relating to the Inquiry that carried the first defendant's byline, appeared on page 3. The caption beneath it read:

Freedom please. ASYLUM seekers at the Manus detention centre had the rare opportunity to express their feelings when National Court judge Justice David Cannings led a team into the centre last week as part of an inquiry into their conditions. The Supreme Court has put a temporary stop to the inquiry on Monday. Picture: TODAGIA KELOLA

4. The images of the transferees in the photograph were not frosted. This meant that their identity was not preserved. On 26 March 2014 the plaintiff, the Registrar of the National Court, Mr I V Augerea, acting on direction from the Court under Order 14, Rule 47(1) of the National Court Rules, charged the defendants with contempt of court on the ground that they had, by publishing or facilitating the publication of un-frosted images of transferees, breached the order of 21 March 2014, thereby presenting a real risk of interference with the due administration of justice.

5. At the trial it was found that the order was clear and unambiguous and that it had been served on the defendants. The first defendant was found to have made a genuine but unsuccessful attempt to comply with the order but was found guilty because he deliberately failed to do what was necessary to comply with it. The second defendant was found guilty because two of its employees (the first defendant and the night editor of the newspaper, Mr Fong) knew of the order and what the order required. The second defendant was bound by their conduct, including their negligent acts or omissions, and therefore was held to have also deliberately failed to comply with the order.

ANTECEDENTS

6. Neither contemnor has any prior conviction.

ALLOCUTUS

7. The first defendant, Todagia Kelola, was invited to address the court. He said that since the summons was served on him and the Post-Courier, he had been troubled and kept questioning himself as to what went wrong resulting in the charges. He has been having sleepless nights and his health and work have been affected immensely. He is a rugby league follower and the State of Origin matches used to be games that he looked forward to but the first game came without him having any interest because his case was going to be the next morning. He is very sorry and sincerely apologised for publication of the photo without frosting the faces. As the Court found, he made a genuine but unsuccessful attempt to comply with the Court's order.

8. He emphasised his duty statement as a journalist. Firstly he is required to go out and gather news stories and photos for the paper. Secondly when he comes back he writes a story and supplies the photos to the paper and any other information including confidential documents to support his story and court orders to the editor, chief of staff or night editor. That is where his responsibility usually ends. Whether the story or the pictures get run, on what page they appear, how they will be presented, he usually has no say in it. There is an editorial committee which decides on which story and photos are run, on what page they will appear and how the paper will look the next day. The Committee comprises the editor, night editor, chief of staff, chief sub-editor and the copy cleaner. Reporters and photographers send slugs (storylines) to the chief of staff who then makes a list from which stories are selected.

9. He undertook to do everything necessary to ensure such a situation never arises again. On Sunday 23 March he returned from Manus after being assigned to cover the National Court inquiry regarding the circumstances of the alleged detention of the transferees. He informed the night editor Lawrence Fong in the presence of chief of staff Michael Misse who were to meet with other members of the committee and decide whether his story and photos would get a run for the next day's paper. Because the order was orally given to him while he was in Manus and he fully understood the order, he passed that information to the night editor and the chief of staff on the understanding that they will take it up to the committee.

10. As the court has found: Mr Fong simply forgot. The first contemnor had no idea or clue as to whether his story was going to appear on the front page or whether his photos would appear on the 3rd page. It was the Committee's prerogative and Mr Fong's responsibility. It was just as if if he were in Manus and he sent his story and photos to Port Moresby.

11. This is the first time for him to be tried in Court. He has never been involved in a civil or criminal case in either the District Court or the National Court. He is the family head and breadwinner, his children are in school and they need his support. His reputation as a reporter speaks for itself through the references annexed to his affidavit. In his entire career he has no disciplinary record. He humbly pleaded that the court impose a fine and not a custodial sentence.

12. Managing director of the second defendant, South Pacific Post Ltd, Kevin Smith, reinforced the unreserved and sincere apology of the company, already provided at the trial through Post-Courier editor Alexander Rheeney and the night editor Lawrence Fong, for publication of the unfrosted images of transferees. It was an event that should never have occurred. On 8 April 2014 he issued a memorandum to all staff requiring that for the purposes of news gathering and publishing they double-check whether there is a court order in place restricting the publication of any article or photograph or the identification of any person in an article or photograph.

13. Mr Smith stressed that the Post-Courier operates under a longstanding code of ethics. Its vision is to "strive to be the best at everything we do, focussed on effectively informing Papua New Guinea and the world, without prejudice so that free speech, free thinking and open participation remain a foundation of the nation". It adheres to the principle of free speech. The second defendant faces many financial challenges in maintaining the role of its newspaper in providing awareness of news issues throughout the whole of Papua New Guinea. Imposition of a large fine in this case would have a devastating effect on the company as it might be forced to ask for unbudgeted financial assistance from its parent company, News Corporation Ltd, which would not necessarily be forthcoming and could well signal the end of the Post-Courier.

PERSONAL PARTICULARS: FIRST DEFENDANT, TODAGIA KELOLA

14. He is 44 years of age. He is from Kaibola village, Losuia, Trobriand Islands, Milne Bay Province. He is married and has six children aged 1 to 18 years of age. He is an active member of the United Church. He completed his grade 12 education at Sogeri National High School in 1989. He completed a Diploma in Media Studies at the University of Papua New Guinea. His career in the media has spanned 22 years: 1992-1999, EM TV news reporter; 1999-2003 Fire Service public relations officer; 2003-2007, Vincy Multi-Media Company chief of staff; and 2007-2014 Post-Courier reporter. He has since 2009 been the chief police and court reporter.

15. A number of character and professional references were provided to the Court:

•	Udu Vai, Manager of National Capital District Commission Public Relations and Cultural Affairs Division, spoke of Mr Kelola's professionalism, trustworthiness, honesty and reliability;
•	Vincent Ain, Managing Director of Vincy Boy Multi-Media Production, spoke of the improvements in production of the NCDC news programs for which Mr Kelola was responsible during his period of employment;
•	Deputy Police Commissioner Simon Kauba MBE, DPS, QPM, highlighted his utmost professionalism;
•	Blaise Nangoi, General Manager, South Pacific Post Ltd, has known Mr Kelola as a reporter for 20 years and holds him in high regard and states that he is a respected member of the Post-Courier news team;
•	Rowan Callick, Asia-Pacific editor of The Australian newspaper, has for some time been an admirer of Mr Kelola's scrupulous and well-written court reporting and regards him as a hard working, modestly rewarded and well intentioned journalist;
•	Loani Ravu Henao, principal of Henaos Lawyers, states that Mr Kelola is a senior court reporter who reports objectively and fairly and discharges his duties ethically and morally.

CORPORATE PARTICULARS: SECOND DEFENDANT, SOUTH PACIFIC POST LTD

16. Mr Smith states in his affidavit that the Post-Courier was established in 1969 and is one of two daily newspapers in the country, the other being The National. This is the first time that South Pacific Post Ltd in its 45-year trading history has been convicted of contempt of court. The majority shareholder of South Pacific Post Ltd is News Corporation Ltd, but 28.8% of the company is owned by Papua New Guinean superannuation funds and mum and dad investors. The Post-Courier employs 189 staff members and has a stable workforce. During the last five years the company has paid approximately K4.6 million every year in tax. Its average annual after-tax profit over that period is K3.6 million. It sponsors many charities.

17. Rowan Callick highlighted the crucial role that the Post-Courier plays in providing media coverage of the work of the courts. Without that coverage courts will operate in the dark and their leadership in guiding conduct, implementing laws and setting social boundaries would go unnoticed. The Post-Courier is PNG's core agenda-setting medium. If it were to cease operating a large gap in the provision of fair, scrupulous and accountable reporting of the work of the courts would be created. The Post-Courier is, in Mr Callick's opinion, a vital pillar of PNG's social sustainability.

SUBMISSIONS BY DEFENCE COUNSEL

18. Mr Molloy highlighted that neither defendant has any prior conviction. It should not be counted against them that they pleaded not guilty. The points they made in their defence were fairly made. They did not waste the Court's time. Both defendants were cooperative with the Court, open and honest about the mistake that was made.

19. The first defendant made a genuine but unsuccessful attempt to comply with the court order. It was not a case of flagrant disobedience of the order, a feature of the case that sets it apart from other disobedience cases such as Sr Dianne Liriope v Dr Jethro Usurup (2009) N3931 in which the contemnor was punished by committal to custody for a period of six months. The first defendant had no intention to commit contempt. The lack of intent is a highly relevant factor warranting a moderate penalty (Gabriel Yer v The State (2008) N3326). Breach of the order happened because of a mistake on the part of the night editor. The circumstances of the present case are very similar to those in Concord Pacific Ltd v Thomas Nen [2000] PNGLR 47, where the trial judge Sheehan J emphasised that "there was no deliberate breach of the court order but rather an ill-advised, unintentional breach". Hence, it was not necessary to impose a fine. The question of punishment for contempt was resolved by there being an order that the contemnor pay the costs of the motion for contempt.

20. As the first defendant explained in allocutus, his employment duties did not ordinarily extend to control over the publishing process. He was aware of the court order and understood it but did not have a written copy it. He is a family man and depends on his employment to support his family. An appropriate penalty would be for the first defendant to pay the legal costs of the Registrar (the plaintiff, who commenced the contempt proceedings), perhaps on an indemnity basis, or to pay a small fine, which could well be suspended.

21. Mitigating the moral guilt of the second defendant, Mr Molloy submitted, is that there was no involvement by the management or members of the board in the publishing of the photo. There was no corporate decision to publish the photo. The conduct of the second defendant was far removed from that of the contemnor, Telikom (PNG) Ltd, in Newsat Ltd v Telikom PNG Ltd (2008) N3673, which was held to have wilfully disobeyed a court order and made a conscious decision not to do what the court ordered it to do, factors which led to the imposition of a fine of K5 million. Also relevant were two pieces of legislation that governed Telikom's business and affairs, the Telecommunications Act 1996 and the Independent Consumer and Competition Commission Act 2002, which created offences punishable by fines up to K10 million. There is no equivalent legislation regulating the business and affairs of the second defendant. The Printers and Newspapers Act Chapter No 151 provides limited regulation of the industry but the offences it creates are punishable by miniscule fines in the order of K200.00. The first defendant is subject to the Companies Act but even the most serious offences – those involving personal dishonesty – have maximum fines of only K200,000.00.

22. Mr Molloy concluded that this is not a case where either defendant is likely to re-offend, and it is not an example of the worst type of contempt, so the fine for each of them should be moderate. In the case of the second defendant, it should be fined no more than its employee, the first defendant, due to there being no element of involvement by the management or the board in the commission of the offence.

SUBMISSIONS BY PROSECUTING COUNSEL

23. Mr Hagahuno conceded the relevance of the mitigating factors outlined by Mr Molloy. He agreed that it was not necessary to impose a custodial penalty on the first defendant. A fine of K2,500.00 to K3,000.00 would be more appropriate. As for the second defendant, a deterrent penalty is required. A fine in the order of K50,000.00 might be appropriate.

METHODOLOGY

24. As different considerations apply depending on whether the contemnor (a person found guilty of contempt) being punished is an individual or a corporate entity, it is useful to consider each defendant separately, but apply to each of them a common decision making model, ie:

•	step 1: what is the maximum punishment?
•	step 2: what is a proper starting point?
•	step 3: what punishment has been imposed in equivalent cases?
•	step 4: what are the mitigating and aggravating factors?
•	step 5: what is the appropriate form of punishment?
•	step 6: what should the extent of the punishment be?
•	step 7: should all or part of the punishment be suspended?

THE FIRST DEFENDANT, TODAGIA KELOLA

STEP 1: WHAT IS THE MAXIMUM PUNISHMENT?

25. The law under which this matter has been prosecuted – the National Court Rules – does not fix a maximum punishment for contempt. Order 14, Rule 49(1) (punishment) simply states:

Where the contemnor is not a corporation the Court may punish contempt by committal to prison or fine or both.

26. The Court therefore has a very wide discretion as to punishment. In deciding how it should be exercised it is useful as I suggested in Newsat Ltd v Telikom PNG Ltd (2008) N3673 to set a notional maximum. I have in other cases examined laws that provide for punishment for contempt of court or contempt of other constitutional institutions or governmental bodies and concluded that a notional maximum is two years imprisonment or a fine of K5,000.00 or both (Sr Dianne Liriope v Dr Jethro Usurup (2009) N3931; Ian Augerea v David Tigavu (2010) N4188). I follow that approach here. There might be cases in which the nature and extent of the contempt warrant sterner punishment. However, this is not such a case.

STEP 2: WHAT IS A PROPER STARTING POINT?

27. The starting point I use is one year imprisonment or a fine of K2,500.00 or both. I will now consider the form and extent of punishment that has been imposed in previous cases and the mitigating and aggravating factors of the present case.

STEP 3: WHAT PUNISHMENT HAS BEEN IMPOSED IN EQUIVALENT CASES?

28. This is a disobedience type of contempt (Peter Luga v Richard Sikani and The State (2002) N2286). As I pointed out in Elias Padura v Stephanie Valikvi (2012) N4894 it has been customary to punish this sort of contempt with a term of imprisonment. Short, sharp sentences in the range of 10 weeks to 18 months imprisonment have been the norm.

STEP 4: WHAT ARE THE MITIGATING AND AGGRAVATING FACTORS?

29. These are significant matters as they ultimately govern the form and extent of the punishment.

Mitigating factors

1	Lack of intention to disobey the order of the court.
2	He made a genuine but unsuccessful attempt to comply with the order.
3	Breach of the court order was due largely to a mistake of omission by another person.
4	He has no prior conviction for contempt or for any other criminal offence.
5	He is highly regarded in his profession and in the community and has an exemplary work history.
6	As a court reporter he performs a vital role in creating awareness and understanding of the role of the courts in the justice system and maintenance of the Rule of Law.
7	He (and others he relies on, such as the night editor) work under great pressure and the pressing need to meet deadlines means that mistakes will inevitably occur from time to time.
8	He has apologised to the Court; and it was a genuine expression of remorse.
9	He cooperated with the Court and was open and honest about the mistake that was made.

Aggravating factors

1	It was a very significant order that was made by the Court and it was absolutely clear and unambiguous in its terms.
2	By disobeying the order the contemnor created a risk of harm to other persons (relatives and loved ones of the transferees).

30. It should be noted that much of what the first defendant said in allocutus about his limited role in deciding what actually goes to press was more relevant to the decision on verdict than it is to the question of punishment. It is accepted that he made a genuine attempt to comply with the order but the attempt was inadequate and insufficient. His decision to plead not guilty is not an aggravating factor

STEP 5: WHAT IS THE APPROPRIATE FORM OF PUNISHMENT?

31. Should the Court commit the contemnor to prison? Or impose a fine? Or impose both forms of punishment? As I said in Liriope and Valikvi prison terms for contempt of court provide a more effective deterrent than a fine. It is a better way of signalling the community's condemnation of the contemnor's conduct than a fine. It underlines the seriousness of the matter if a contemnor is required to spend time in prison. It reinforces the absolute duty of everyone to comply with court orders (Yap v Tan [1987] PNGLR 227). Committal to custody should not be regarded as a drastic form of punishment or something reserved for the worst cases of contempt or cases in which the contemnor has no children to care for. For a disobedience contempt the previous cases show that a prison term is often the most appropriate form of punishment: the natural and ordinary consequence of being found guilty of this type of offence (John Rumet Kaputin v The State [1979] PNGLR 559).

32. However, in the special circumstances of this case, given the genuineness of the first defendant's efforts to comply with the order and the fact that he was not directly responsible for the breach of the order, a fine, not committal to custody, is the appropriate form of punishment. I reject the submission that an order for costs would be an appropriate punishment. There needs to be certitude about the penalty. A fine brings certainty and finality (if it is paid within the time set by the Court) to the proceedings and will allow the first defendant to resolve the case, reflect on what has happened and learn from this experience.

STEP 6: WHAT SHOULD THE EXTENT OF THE PUNISHMENT BE?

33. What should the amount of the fine be? The number and the strength of the mitigating factors are greater than those of the aggravating factors. This provides an argument for punishing a little below the starting point. If this were a guilty plea, there would be little difficulty in imposing such a moderate fine. Though this was a case of negligent disobedience of a court order, and not a flagrant breach, a significant fine is necessary to reflect the seriousness of the matter. I fix the fine at K2,500.00.

STEP 7: SHOULD ALL OR PART OF THE PUNISHMENT BE SUSPENDED?

34. Suspending all or part of the fine is an option under Order 14, Rule 49(3) of the National Court Rules, which states:

The Court may make an order for punishment on terms, including a suspension of punishment or a suspension of punishment where the contemnor gives security in such manner and in such sum as the Court may approve for good behaviour and performs the terms of the security.

35. I reject the submission that this is a case warranting suspension of the fine. The mitigating factors have adequately been taken into account in deciding to punish the first defendant with a fine rather than a prison term and in fixing a moderate fine. To suspend the payment of the fine would not reflect the seriousness of the offence. There will be no suspension.

THE SECOND DEFENDANT, SOUTH PACIFIC POST LTD

STEP 1: WHAT IS THE MAXIMUM PUNISHMENT?

36. Order 14, Rule 49(2) (punishment) of the National Court Rules deals with contempt by a corporation:

Where the contemnor is a corporation the Court may punish contempt by sequestration or fine or both.

37. Sequestration entails the court-sanctioned seizure of a contemnor's assets. As in the case of punishment for an individual there is, in the case of a corporation, no maximum punishment, as such. It is useful, as was done in Newsat v Telikom, to look to the legislation that regulates the industry in which the contemnor is operating. However, I agree with Mr Molloy that such an approach does not neatly fit the regulatory, statutory environment in which the second defendant operates. It is more appropriate to refer to the Companies Act and the type of offences it creates and the penalties it provides. I adopt Mr Molloy's submission and apply in this case – as South Pacific Post Ltd is a corporation of significant size as borne out by the amount of its recent after-tax profits, as deposed to by Mr Smith – a starting point of a fine of K100,000.00 or sequestration of assets to that value.

STEP 2: WHAT IS A PROPER STARTING POINT?

38. The starting point is the middle of the range: a fine of K50,000.00 or sequestration of assets to that value.

STEP 3: WHAT PUNISHMENT HAS BEEN IMPOSED IN EQUIVALENT CASES?

39. In Newsat v Telikom the amount of the fine was K5 million.

STEP 4: WHAT ARE THE MITIGATING AND AGGRAVATING FACTORS?

Mitigating factors

1	Lack of intention to disobey the order of the court.
2	Its employee made a genuine but unsuccessful attempt to comply with the order.
3	Breach of the court order was due largely to a mistake of omission by an employee.
4	It has no prior conviction for contempt or for any criminal offence.
5	It has a critical role in dissemination of information about the work of the courts.
6	It operates under great pressure and the pressing need to meet deadlines means that mistakes will inevitably occur from time to time.
7	It has apologised to the Court; and it was a genuine expression of remorse.
8	It has taken steps to ensure that such mistakes do not occur again.
9	It cooperated with the Court and was open and honest about the mistake that was made.

Aggravating factors

1	It was a very significant order that was made by the court and it was absolutely clear and unambiguous in its terms.
2	It failed to have internal controls in place to deal with this sort of order.
3	By disobeying the order the contemnor created a risk of harm to other persons (relatives and loved ones of the transferees).

40. I have not found the fact that the management and directors of the company knew nothing about the order to be a weighty consideration. The lack of intention to disobey the order has already been taken into account. It is accepted that what happened was a mistake. But it was a big and significant mistake and the consequences of it – putting a major media entity in contempt of court – must be signified by an appropriate penalty. As in the case of the first defendant, the second defendant's decision to plead not guilty is not an aggravating factor

STEP 5: WHAT IS THE APPROPRIATE FORM OF PUNISHMENT?

41. Sequestration would be a rather drastic punishment, which should be reserved for cases of extreme contempt or perhaps where a corporation does not have the financial capacity to pay a fine. It is not an appropriate form of punishment in the present case and the plaintiff did not press for it. The most appropriate form of punishment is a fine.

STEP 6: WHAT SHOULD THE EXTENT OF THE PUNISHMENT BE?

42. I reject the submission that the second defendant should receive no greater fine than the first defendant. If that were to be the approach the fine here would be a slap on the wrist. The amount of the fine must reflect the seriousness of the offence and the fact that by having no or inadequate internal controls in place the second defendant allowed an operational environment to exist in which a mistake of the magnitude that occurred here was inevitable. 

43. The fine must reflect the size of the corporation and its capacity to absorb a fine. The fine should not, however, be a crushing penalty. The Court would not be doing justice if it imposed a fine that shut down the Post-Courier or that endangered its financial viability. I acknowledge the validity of the statements made by Mr Smith and Mr Callick in support of the critical role of the newspaper and the company that publishes it. It is difficult to overestimate the importance of a free press in maintaining a vibrant constitutional democracy in Papua New Guinea. I uphold Mr Molloy's submission that the circumstances of this case do not warrant a fine of the magnitude of that imposed in Newsat v Telikom. 

44. I take the same approach as taken in the case of the first defendant. There are many mitigating factors but given that this is a matter that was taken to trial the concessions that would have been available in the event of an early guilty plea do not operate. The fine will be at the starting point: K50,000.00.

STEP 7: SHOULD ALL OR PART OF THE PUNISHMENT BE SUSPENDED?

45. No, for the same reason given in relation to the first defendant: it would not reflect the seriousness of the matter.

CONCLUSION

46. Each of the defendants will be fined. Order 14, Rule 47(3) provides that the Court may make an order for punishment "on terms" (or conditions). There are two terms I consider are appropriate. First, each fine must be paid within a limited time, which I fix as 14 days. Secondly, that the plaintiff will be able to take action, if the fine is not paid within the time fixed, to seek alternative punishment. In the case of the first defendant the alternative will be committal to prison for a period of 12 months (that being the starting point equivalent of a fine of K2,500.00). In the case of the second defendant the alternative will be sequestration of assets to the value of the fine of K50,000.00. 

47. As these have essentially been criminal proceedings and the normal practice in such proceedings is that there is no order for costs, I will order that the parties bear their own costs. 

ORDER

(1)	The first defendant shall within 14 days after the date of this judgment pay a pay a fine of K2,500.00 to the Registrar of the National Court, who shall forthwith pay that money into the Consolidated Revenue Fund; and in the event that the fine is not paid within that time the Registrar will be at liberty to apply by notice of motion for committal of the first defendant to custody for a period of 12 months.

(2)	The second defendant shall within 14 days after the date of this judgment pay a fine of K50,000.00 to the Registrar of the National Court, who shall forthwith pay that money into the Consolidated Revenue Fund; and in the event that the fine is not paid within that time the Registrar will be at liberty to apply by notice of motion for sequestration of the second defendant's assets to the value of the fine.

(3)	These proceedings shall be called at Waigani at a time to be notified in the week commencing 30 June 2014 to monitor compliance with this order and mention any unresolved matter relating to these proceedings.

(4)	The parties will bear their own costs.

Judgment accordingly.
__________________________________________________________________Williams Attorneys: Lawyers for the Plaintiff	
Ashurst Lawyers: Lawyers for the Defendants