Bain (Deaceased) and Bain

[2016] FamCA 600

FAMILY COURT OF AUSTRALIA

BAIN (DEACEASED) & BAIN [2016] FamCA 600

FAMILY LAW – CONTEMPT - flagrant challenge to the authority of the Court

Family Law Act 1975 (Cth)

G & H (1994) 181 CLR 387
Angelis & Angelis (1978) FLC 90-503
LGM & CAM(Contempt) (No. 2) (2008) FLC 93-355

APPLICANTS: Ms Little and Ms Searle, the Legal Personal Representatives for Ms Bain (Deceased)

RESPONDENT: Mr Bain

FILE NUMBER: BRC 2481 of 2010

DATE DELIVERED: 25 May 2016 (orally);  settled and amended pursuant to Rule 17.02A of the Family Law Rules 2004 and provided to the parties 26 July 2016

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Hogan J

HEARING DATE: 6 October 2015, 4 February 2016, 8 & 31 March 2016, 22 April 2016 and 25 May 2016

REPRESENTATION

COUNSEL FOR THE APPLICANTS: Mr D.J. Morgan

SOLICITOR FOR THE APPLICANTS: Blair Anderson Solicitor

COUNSEL FOR THE RESPONDENT: Mr Richardson SC

SOLICITOR FOR THE RESPONDENT: Hopgood Ganim Lawyers

Orders

IT IS ORDERED THAT

1. The Application – Contempt filed 30 July 2015 is adjourned to 10.00 am on Monday, 25 July 2016.

IT IS DIRECTED THAT

1. By 4.00 pm on Monday, 11 July 2016 the Respondent file and serve any affidavit material intended to be relied upon at the hearing on 25 July 2016.

2. By 4.00 pm on Monday, 18 July 2016 the Applicant provide written notice to the Respondent’s legal representatives detailing those witnesses intended to be relied upon by the Respondent at the hearing on 25 July 2016 who are not required for cross-examination.

NOTATION

1. In the event that the proceedings are not completed on 25 July 2016 the Court intends to list the matter on 26 July 2016 to complete it.

Note: The form of the order is subject to the entry of the order in the Court’s records.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Bain (deceased) & Bain has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

FAMILY COURT OF AUSTRALIA AT BRISBANE

FILE NUMBER: BRC 2481 of 2010

Ms Little And Ms Searle, the Legal Personal Representatives for Ms Bain (Deceased)

Applicants

And

Mr Bain

Respondent

These Reasons, which were delivered orally on 25 May 2016, have been amended pursuant to Rule 17.02A of the Family Law Rules 2004 to correct the typographical error, arising from an accidental slip, in paragraph [72], [73] and [74].

REASONS FOR JUDGMENT

1. On 30 July 2015, the legal personal representatives for Ms Bain, now deceased, filed an Application for Contempt alleging that Mr Bain, former husband of Ms Bain, was in contempt of Court when, on 19 August 2014, he failed to pay $457,786.00 (being the proceeds received by him consequent upon a claim on the life insurance component of an MLC life policy he owned in respect of Ms Bain’s life) into his solicitor’s trust account and hold it there, pending further order of the Court.

2. It is alleged that Mr Bain’s actions constitute a contravention of an order under the Act and involve a flagrant challenge to the authority of the Court. 

3. The Application particularises the alleged contempt as follows:  that in 2014, Ms Bain died; after the death of Ms Bain, Mr Bain made a claim for payment to him under the life insurance component of MLC life policy …;  that Mr Bain has been paid the sum of $457,786.00 - being the life insurance component of that MLC life policy; that he was required by an undertaking evidenced by an order of the Court made by me on 12 December 2013 to pay any payment received by him under the life insurance component of the policy into his solicitor’s trust account, pending further order of this Court;  and that he did not pay that sum or any other amount into his solicitor’s trust account, that sum representing the payment received by him under the life insurance component of the policy.

4. The charge was ultimately put to Mr Bain in the general terms that, in breach of undertaking evidenced in the December 2013 Order, he failed to cause funds received by him from the life insurance component of the policy to be paid into and held in his solicitor’s trust account, pending further order of the Court and, in fact, paid them to various third parties and that his actions were done in flagrant disregard of the undertaking recorded in the December 2013 Order to hold any proceeds received by him from the life insurance component of the policy in his solicitor’s trust account, pending order of the Court and that his actions in this respect involved a flagrant challenge to the authority of the Court.

5. It is established that the substantive proceedings between Mr and Ms Bain commenced on 16 March 2010.

6. On 12 November 2013, I heard Ms Bain’s Application for an interim order that Mr Bain transfer the MLC insurance policy he owned in respect of her life to her and that she transfer an MLC insurance policy she owned in respect of his life to him. 

7. Mr Bain was not personally present this day.  That was as a consequence of an order I made on 29 October 2013 when I listed what was Ms Bain’s cross-application seeking the transfer of ownership of the policies (this being particularised in paragraph 11 of the Response to an Amended Application in a Case filed by her on 25 February 2013) for hearing at 10.00 am on 12 November 2013.

8. However, Mr Bain had sworn an affidavit on 8 November 2013 - after his appearance at the hearing had been excused.  This was relied upon at the hearing by Counsel, who appeared on his behalf on 12 November 2013, to advance his opposition to the orders sought by Ms Bain. 

9. Paragraph 24 of Mr Bain’s affidavit sworn 8 November 2013 and filed 11 November 2013 is as follows:

   In the event of that I receive any benefit under the life insurance component of my personal protection portfolio, I am willing to undertake to the Court to hold any payment I might receive in the Blackstone Lawyers trust account pending any further order of the Court.

10. Mr Dick, of Counsel, instructed by Mr Springer, a solicitor then either employed by or contracted to Blackston Lawyers, appeared on Mr Bain’s behalf on 12 November 2013. 

11. Mr Springer’s only task or responsibility during his employment with or by Blackston Lawyers in the period from about July 2013 to either 23 or 24 December 2013 was the conduct of Mr Bain’s personal litigation in this Court.  . 

12. Having reserved the decision on 12 November 2013, I made orders and delivered Reasons for Judgment on 13 December 2013.  Mr Bain was not present that day either.  Instead, Mr Cook of Counsel, instructed by Mr Springer, appeared on his behalf.

13. The December 2013 Order records that it is made upon the undertaking of the husband to hold any payment received by him under the life insurance component of MLC life policy … in his solicitor’s trust account, pending further order of the Court.

14. It is immediately apparent that this reflects the contents of paragraph 24 of Mr Bain’s affidavit. 

15. Ms Bain died in 2014. 

16. As a consequence of an Application to MLC, Mr Bain received payment on the life insurance component of MLC life policy … in the amount of $457,786 on 19 August 2014. 

17. Mr Bain did not pay this sum or any part of it into the solicitor’s trust account and hold it there, pending further order of the Court. 

18. All of the funds received by Mr Bain as a consequence of his claim on the life insurance component of the MLC policy have been disbursed and expended.

19. For the Applicants to succeed on the Application currently before the Court, they must establish each element required to be established to found a finding of contempt beyond reasonable doubt.  Any finding of fact must be made beyond reasonable doubt.  In the event that a necessary element is not established to the requisite standard, or the Court is not persuaded of the facts required to establish it beyond reasonable doubt, then the Application must be dismissed. 

20. In the circumstances of this case, I consider that, in order succeed, the Applicants must establish beyond reasonable doubt that Mr Bain, in fact, undertook to the Court that he would hold any proceeds of the life insurance component of the MLC policy he received in his solicitor’s trust account, pending further order of the Court;  and that Mr Bain knew at some time before he received the proceeds from the life insurance component of the MLC policy on 19 August 2014 that the Court had, in fact, accepted the undertaking in those terms;  and that, Mr Bain knew and understood the nature and effect of giving an undertaking to hold any proceeds of the life insurance component of the MLC policy in his solicitor’s trust account, pending further order of the Court; and that Mr Bain received proceeds of the life insurance component of the MLC policy referred to in the December 2013 Order;  and that, Mr Bain’s actions in failing to cause the proceeds he received from the life insurance component of the MLC policy to be paid into and held in his solicitor’s trust account, pending further order of the Court, were in contravention of the undertaking recorded in the December 2013 Order and amounted to wilful or deliberate actions involving a decision to fail to comply with the terms of the undertaking - as distinct from actions undertaken accidentally or inadvertently; and that, in failing to cause the proceeds he received from the life insurance component of the MLC policy to be paid into and held in his solicitor’s trust account, pending further order of the Court and instead causing them to be paid out and disbursed, Mr Bain acted in a manner which amounted to a flagrant challenge to the authority of the Court.

Has the Applicant established beyond reasonable doubt that Mr Bain undertook to the Court in the manner recorded on the face of the December 2013 Order?

1. On 4 February 2016, I delivered written Reasons containing my conclusions in respect of a number of preliminary matters raised by Mr Richardson SC, who appears for Mr Bain. 

2. I accept Mr Richardson’s subsequent submissions that the findings expressed on 4 February 2016 were expressed in the context of determining the preliminary application that an order should then be made pursuant to Rule 17.02 of the Family Law Rules 2004 and were not determinative of the matters now requiring consideration.

3. I consider the following facts relevant to the determination of whether the Applicants have established beyond reasonable doubt that Mr Bain undertook to the Court as recorded on the December 2013 Order are established beyond reasonable doubt:

   a)Mr Bain was not present at the hearing on 12 November 2013, as his attendance had been excused by Order made 30 October 2013;  and

   b)Mr Bain was represented at the November 2013 hearing by Mr Dick, of Counsel, instructed by Mr Springer;  and

   c)Mr Bain had sworn an affidavit after his attendance at the hearing had been excused and the contents of the same included paragraph 24 in the terms as I have outlined earlier;  and

   d)Mr Dick prepared an Outline of Submissions on behalf of Mr Bain and provided these to the Court at the hearing on 12 November 2013;  and

   e)Mr Bain was aware of the written Submissions prepared by Mr Dick on his behalf because Blackston Lawyers received a copy of the same by email from Mr Dick’s secretary on 13 November 2013;  and

   f)the contents of the Submissions prepared by Mr Dick on behalf of Mr Bain for use at the hearing on 12 November 2013 outline that Mr Bain opposed Ms Bain’s Application to transfer the life insurance component of his policy to her at that time because, amongst other reasons, such transfer would defeat the arrangement he said was agreed by the parties (that is, that insurance would be used to pay matrimonial liabilities) and, in any event, defeat any entitlement he would otherwise have to funds under the policy given that Ms Bain intended to appoint or nominate third party beneficiaries;  and

   g)Mr Bain contended that the sole purpose for obtaining the policy was to pay for liabilities of the marriage if either party passed away;  and

   h)Mr Bain contended that the liabilities relevant to the assessment of the net value of the property of the parties for the purpose of the proceedings between them totalled $4,799,814.00 and that, on the available evidence, the amount of matrimonial liabilities would outweigh the value of matrimonial assets; and

   i)that it was contended on Mr Bain’s behalf that, in the event the Court refused to dismiss Ms Bain’s Application, in the alternative, and given the importance of the policy in the context of liquidating matrimonial liabilities and given that the parties contended different positions in respect of the use to which possible insurance proceeds should be put, Mr Bain deposed at paragraph 24 of his affidavit that, in the event he received any benefit under the MLC policy, he is willing to undertake to the Court to hold any payment he receives under the life insurance component of the same in his solicitor’s trust account pending any further of the Court. 

4. Despite the contents of Mr Dick’s written Submissions and their reference to, and use of, the phrase “in the alternative”, Mr Bain’s affidavit itself does not refer to any condition attaching to his willingness to offer to undertake to the Court to hold any funds received by him from MLC in trust pending further order of the Court, nor is his evidence in the affidavit there that his preparedness to offer such an undertaking in the terms sworn to was an alternative proposition, nor that the undertaking was to be regarded as being offered only in certain circumstances.

5. During the hearing in November 2013, Mr Dick made oral submissions to supplement his written Outline.  Those oral submissions included the following (at page 11 of the transcript, lines 34 to 43):

   As your Honour will note from paragraph 24 of the husband’s affidavit he is willing to undertake should he receive any benefit under the life insurance component of his personal protection portfolio he is willing to undertake to hold those proceeds in his solicitor’s trust account pending any further order of the court.  So contrary to the submission made by my learned friend, the husband doesn’t seek to immediately access or take a benefit from the demise of his former wife or the event giving rise to his benefit under that insurance contract.  What he is willing to do is hold those proceeds on trust until these proceedings – until your Honour makes a further order on Application by either party or until your Honour resolves the proceedings on a final basis.

6. And further at page 13, lines 17 to 21:

   We say the safest – in my respectful submission, the safest way to proceed and that the best way to proceed, I should say regardless of safety or otherwise, is for the moneys to be held on trust pending any further order that might need to be made and any – and that would be open to either party to make an Application at a subsequent time.

7. And at lines 27 to 31 on the same page of the transcript:

   The husband does not seek to deny the wife’s appropriate and fair entitlement and just entitlement to the proceeds of any insurance policy.  That ought be done at a trial after all evidence can be tested and your Honour would not be minded to make any order on an interim basis at this time.

8. Mr Dick’s oral submissions contained no reference to the “alternative” proposition advanced in his earlier created written Submissions. 

9. I do not accept the submissions made by Mr Richardson SC to the effect that that which was spoken by Mr Dick during oral submissions should not be regarded as overtaking, as it were, Mr Bain’s position - the earlier position - that the proffering of the undertaking was to be considered only as an alternative to his primary position that Ms Bain’s Application in a Case be dismissed. 

10. Mr Dick’s oral submission referred specifically to paragraph 24 of Mr Bain’s affidavit, which, as I have already noted, is not expressed to be conditional upon anything.

11. In any event, the submission that the undertaking was offered only as an alternative has to be considered, it seems to me, in the context that Ms Bain’s Application was for an order transferring ownership of the insurance policies.  Mr Bain opposed that. 

12. It is clear that, in opposing Ms Bain’s Application, what Mr Bain sought to ensure was that any proceeds payable consequent on a claim on the life insurance component of the MLC policy were held safely so as to be available to meet liabilities he contended were matrimonial liabilities in the property settlement proceedings then on foot and which had been on foot for about five and a half years and that Ms Bain not have the opportunity to make a nomination which removed the same from the purview of the proceedings: that is, his alternative to her obtaining an order that ownership of the policy insuring her life be transferred to her was that any funds sourced by him from the policy and received by him be paid into and held in trust pending further order of the Court.

13. In essence, his position was that Ms Bain’s Application should be dismissed to prevent her from dissipating (by nominating a beneficiary other than him) the proceeds which would ultimately result from a claim upon the policy.  His opposition to the order she sought included the submission that his entitlement in the proceedings would be defeated if an order was made in the manner that she sought.  It is in this context, then, that the use of the term “alternative” falls to be considered. 

14. I am not persuaded that there was any precondition upon which the proffering of the undertaking rested. 

15. As I have already outlined, nothing in Mr Dick’s oral submissions on the day of the hearing, nor in Mr Bain’s affidavit to which Mr Dick specifically referred suggests such a position.  In fact, the proposition advanced by Mr Dick was clearly that any funds which resulted from a claim on the policy made after Ms Bain’s death should be held safely in trust so that the dispute about the appropriate application of them could be considered at the final hearing.

16. Whatever may have been the position advanced in the written Submissions, the oral submissions made by Mr Dick on Mr Bain’s behalf - such submissions being completely consistent with Mr Bain’s evidence at paragraph 24 of his affidavit - amounted, in my view, to the proffering on Mr Bain’s behalf of the undertaking recorded on the face of the December 2013 Order.

17. I find that in the conduct of the appearance on12 December 2013, including in making the oral submissions made and proffering the undertaking proffered, Mr Dick acted in accordance with Mr Bain’s instructions.  I am satisfied beyond reasonable doubt that Mr Dick acted on instructions at all times during the appearance. 

18. I am also satisfied beyond reasonable doubt that the notion that Mr Dick would proffer the undertaking on Mr Bain’s behalf in his absence during the hearing in November 2013 was clearly known to Mr Bain - given that his affidavit contains his sworn evidence that he was willing to undertake to hold any payment he received from the MLC policy in this solicitor’s trust account pending further order of the Court and that this was contained in an affidavit sworn by him after his attendance at the hearing had been excused.

19. For these reasons, I am satisfied beyond reasonable doubt that, through his Counsel who appeared on his behalf and acted on and in accordance with his instructions, Mr Bain gave, in open Court, the undertaking to the Court in the terms recorded in the December 2013 Order. 

20. I am satisfied beyond reasonable doubt, that when the undertaking was given, proceedings were on foot.  It was offered in open Court in the course of the hearing and was scrutinised and accepted by the Court and the acceptance of it acknowledged and demonstrated by the Court by recording it in the December 2013 Order.

1. In light of the matters outlined thus far, I do not accept the submission that there was no jurisdiction to accept the undertaking.  As noted, Ms Bain’s Application was for transfer of the ownership of the policy so payment sourced in it would be under her control, while Mr Bain’s contention was that ownership of the policy should remain as it was.  It is, as I have said, in this context, then, that the contents of paragraph 24 of Mr Bain’s affidavit need to be considered. 

2. I am also satisfied beyond reasonable doubt that, from not later than the swearing of the final draft of Mr Bain’s affidavit relied on at the hearing on 22 November 2013, he knew of the seriousness and consequences of offering an undertaking in the terms of paragraph 24 of that affidavit in the event that the Court accepted the same.

3. I am satisfied beyond reasonable doubt that Mr Bain knew and understood the nature and effect of giving an undertaking to hold any proceeds he received from the life insurance component of the MLC policy in Blackston Lawyers’ trust account pending further order of the Court. 

Has the Applicant established beyond reasonable doubt that Mr Bain knew at some time before he received the proceeds from the life insurance component of the MLC policy on 19 August 2014 that the Court had in fact accepted the undertaking in the terms recorded on the face of the December 2013 Order?

1. Mr Bain’s evidence is that, at no time prior to dealing with the insurance proceeds, had he seen a copy of the December 2013 Order or the Reasons for Judgment, nor had he been informed that the December 2013 Order had been made on his undertaking.  His evidence is that the funds were provided by MLC to him on 19 August 2014 and were fully exhausted or expended and disbursed almost immediately. 

2. There is no direct evidence led by the Applicants that Mr Bain was aware of the December 2013 Order before 19 August 2014.  There is no evidence that he was served with a copy of the Order.

3. In this case, Mr Bain was not present during the hearing in November 2013, nor when Judgment was delivered and the order pronounced on 13 December 2013.  It appears from the evidence that he had been admitted to hospital a day or two before that and a medical certificate had issued outlining that he was unfit for work from 10 December 2013 to 13 December 2013 because of “medical condition”. 

4. As noted already, Mr Bain appeared by Mr Cooke of Counsel instructed by Mr Springer on 12 December 2013.  Mr Springer’s file note for the appearance on 12 December 2013 relevantly records that “orders as per reason:  wife’s Application dismissed”.  The Reasons delivered that day include, at page 2, a copy of the Order made that day.  It is, therefore, not the case that one would need to go to anything other than the Reasons to know the terms of the Order made on 13 December 2013. 

5. As it turns out, Mr Bain was discharged, it seems, from hospital on 12 December 2013.  His evidence is that, either later on 12 December 2013 or early on 13 December 2013, Mr Springer told him that Ms Bain’s Application had been dismissed. 

6. Mr Bain says that, at no time before he dealt with the insurance proceeds he received, had he seen a copy of the December 2013 Order or the Reasons for Judgment.  He also says he was not informed by anyone that the December 2013 Order recorded a notation to the effect that orders were made on his undertaking.  He says he did not make any inquiry about the undertaking because his understanding was that it was only offered as an alternative in the event that Ms Bain’s Application was not dismissed.  He says that, because the Application was dismissed, he considered that the events giving rise to his offer of the undertaking did not arise and he had no reason to expect that the Court would have taken a “different course”.

7. Of course, as I have already noted, paragraph 24 of Mr Bain’s affidavit was not framed in the alternative, nor did it raise in any way that his proposed actions as summarised within it were conditional upon any event occurring.  Rather, it is clear in stating that, in the event, he received any benefit under the policy, he was willing to undertake to the Court to hold any payment he might receive in his solicitors’ Trust Account pending any further order of the Court.

8. I do not accept Mr Bain’s evidence in relation to the matters I have just summarised. 

9. I accept that Mr Springer was instructed to treat Mr Bain at all times as the client and to act in his best interests.  I also accept that, in the context of the discharge by him of his professional obligations to Mr Bain as Mr Bain’s solicitor between July 2013 and 23 or 24 December 2013, and in his role as the solicitor for Mr Bain in these proceedings, Mr Springer managed all aspects of them and I accept he did so within the bounds of instructions provided by Mr Bain.

10. It is inherently incredible to me that Mr Springer, engaged only in doing work in respect of Mr Bain’s personal matter in this Court, did not inform Mr Bain of the undertaking recorded in the order in circumstances where paragraph 24 of Mr Bain’s affidavit contains his evidence of his willingness to give an undertaking to hold funds in trust, pending further order of the Court. 

11. After all, it cannot be forgotten that Mr Bain was Mr Springer’s only client and, thus, his only responsibility during this time.

12. Additionally, as well as the fact that Mr Springer worked only on Mr Bain’s matter during the approximately six month period of his contact with, and/or his employment by, Blackston Lawyers, Mr Springer was supervised by Mr Bain.

13. I consider that, having regard to Mr Bain’s professional experience and the fact that he had sworn paragraph 24 of his affidavit - which contains no reference to the idea or concept that his offer (as contained within that paragraph) was conditional upon Ms Bain’s Application being dismissed or on any other eventuality - Mr Bain’s evidence that he did not make any inquiry about the December 2013 Order and that he had no reason to expect that the Court would have taken a “difference course” (namely, the very potentiality clearly anticipated by the fact that paragraph 24 of his affidavit exists as it does) is inherently unbelievable and I do not accept it.

14. It is inherently unbelievable that Mr Bain who had been engaged in his own personal litigation for a number of years, did not make sure he knew whether he was bound by the undertaking he had sworn to in the affidavit, specifically prepared for use at the hearing. 

15. I do not accept Mr Bain’s evidence that Mr Springer, who had been employed by him solely to work on his file, did not tell him at any time before 19 August 2014 that the undertaking proffered by him in paragraph 24 of his affidavit had been accepted and recorded.

16. I consider that it defies all credible reasoning that a solicitor solely employed to manage and run this personal litigation and told to treat that person – Mr Bain – as a client and whose file note records “orders as per reasons” - in circumstances where the Reasons themselves contain the order and in circumstances where there clearly have been prior discussions about the offering of an undertaking to hold funds in trust pending further order of the Court - did not inform his client (Mr Bain) that he was now bound by the terms of an undertaking accepted in the terms it was offered in paragraph 24 of the affidavit – an affidavit by Mr Bain after he knew his attendance at the hearing for which the affidavit had been prepared had been excused.

17. Simply put, I consider that, whilst Mr Bain’s account is possible, it is not, in the least, probable. 

18. This conclusion is not, of course, though the end of the matter because, for the Application to succeed, the Court must be satisfied beyond reasonable doubt that Mr Bain knew at the requisite time he was bound by the undertaking to hold any payment he might receive from the life insurance component of the MLC policy in Blackston Lawyer’s Trust Account, pending any further order of the Court. 

19. As there is no direct evidence of this, it is necessary to look to whether inferences drawn from facts established beyond reasonable doubt, persuade me to conclude that Mr Bain had the requisite knowledge at the requisite time and whether I am persuaded to reach those conclusions beyond reasonable doubt.

20. In G & H, Brennan and McHugh JJ said, at 390:

    An inference is a tentative or final ascent to the existence of a fact which the drawer of the inference bases on the existence of some other fact or facts, the drawing of an inference is an exercise of the ordinary powers of human reason in the light of human experience.  It is not affected directly by any rule of law.  Legal principle may confine the basic facts in order to exclude irrelevancies and, where proof beyond reasonable doubt is required, the legal standard of proof precludes of an inference for the purpose of determining and issuing litigation where the basic facts are consistent with an innocent inference.

21. I accept that, when the Court is required to be satisfied beyond reasonable doubt of a fact on the basis of drawing inferences from other facts established beyond reasonable doubt, the inference needs to point in just one direction.  That is, if the inference can also provide an answer of innocence, then a fact is not proved beyond reasonable doubt.

22. I accept that, where proof beyond reasonable doubt is required, the Court is precluded from drawing an inference for the purpose of determining an issue in litigation, when the basic facts are consistent with innocent inference. 

23. I accept that, in order to be satisfied beyond reasonable doubt that Mr Bain knew of the undertaking at the requisite time, the Court needs to find that the circumstances are incompatible with any reasonable hypothesis, other than knowledge, and that that knowledge is the only rational inference which the circumstances enable the Court to draw.  That is, the Court has to consider whether the evidence before it reasonably admits of different conclusions.

24. I also accept that, if I conclude the circumstances are such that they are susceptible of a reasonably possible explanation consistent with a finding of the absence of knowledge at the requisite time, then the fact of knowledge at the requisite time will not have been established beyond reasonable doubt.

25. Mr Richardson SC, during the course of submissions, referred to comments made by Murray J, sitting at first instance, in Angelis & Angelis, at page 77,635. But, as the Full Court (being the Chief Justice and Warnick J in a joint Judgment at paragraph 28 of the same) in LGM & CAM(Contempt) (No. 2) noted, whilst analogies can be at times a useful source of reasoning, they are of much less utility where inferences of fact are involved when, as here, the essential question under consideration is the same but the established facts from which inferences might be drawn are different.

26. In addition to the matters I have already discussed, the following are, I consider, relevant.

27. I accept that Mr Springer resigned on or about 24 December 2013 and ceased engagement, therefore, with Blackston Lawyers.  I also accept that the costs’ submissions he had prepared, following the making of the December 2013 Order, had not been filed with the Court at the time he ceased employment or engagement with Blackston Lawyers.

28. Mr Bain’s evidence is that after Mr Springer ceased his employment, Mr Bain’s file returned to him (Mr Bain) and, thereafter, for a period of time, he had the day to day conduct of it. 

29. The evidence is that Mr Bain instructed other solicitors in about February 2015 2014.  It is clear then that the period of time between Mr Springer leaving Blackston Lawyers and Mr Bain’s new solicitors taking over the conduct of his matter and during which he had actual conduct of it, was about three months.

30. In the course of providing instructions to the solicitors he engaged in about February 2015 2014, Mr Bain reviewed the master file – namely all of the relevant documents relating to his proceedings - which were held at, Blackston Lawyers.  His evidence was that he did not provide the solicitors he engaged in February 2015 2014 with all of the documents from his file, but only those relevant to proceedings that were next to occur, or events that were next to occur;  and that, because the litigation in which he and Ms Bain had been engaged had been on-going for about five and a half years, at that time there were many, many documents he did not provide to that solicitor, Mr MacPherson.

31. It is clear on the evidence that Mr Bain maintained his master file at Blackston Lawyers and, therefore, provided to Mr MacDonnell MacPherson documents he considered relevant to Mr MacDonnell MacPherson’s engagement by him.  As I have said, the evidence is that, in determining what relevant documents to provide to provide to Mr MacDonnell MacPherson, Mr Bain had reviewed his master file:  namely, the documents held by him. 

32. Despite the review process occurring at some time between 23 or 24 December 2013 and about February, and despite the finalisation of the Application in a Case brought by Ms Bain by the making of the December 2013 Order and despite Mr Springer leaving the firm (with the consequence that Mr Bain retook over the management of his matter personally) his evidence is that he did not know the terms of the December 2013 Order in its terms before about October 2014.

33. Mr Bain’s evidence is that he did not see the order in his review of his file after Mr Springer left in December 2013.  I do not accept his evidence. 

34. I find it simply unbelievable that an experienced professional, engaged in his own long-standing litigation, taking up the carriage of his own matter after it had been conducted by a solicitor for about six months, during which period he (Mr Bain) had sworn an affidavit in which he told the Court he was willing to undertake to hold any payment he might receive in trust pending further order of the Court, would not have undertaken a thorough review of the file - especially in circumstances where, in fact, the submissions for costs prepared by Mr Springer on Mr Bain’s behalf were filed with the Court after Mr Springer left and while Mr Bain had carriage of his own matter. 

35. However, again, these findings I have made about Mr Bain’s evidence are, of themselves, insufficient to establish what is required to be established by the Applicant if the Application is to succeed. 

36. I have already mentioned the fact that Mr Springer prepared submissions in support of Mr Bain’s Application that an order for costs be made against Ms Bain in respect of the Application in a Case heard on 12 November 2013 and determined by the Order made in December 2013. 

37. During the course of the hearing on 8 March 2016, I raised with Counsel the fact that Mr Bain had sought an order that Ms Bain pay his costs of and incidental to the Application determined by the December 2013 Order.  I also provided to the parties a copy of the Outline of Submissions filed on Mr Bain’s behalf on 13 February 2014. 

38. In relation to the manner in which I have approached this issue, I repeat and rely on section 144 of the Evidence Act and the authorities to which I have already referred on 31 March 2016 during the course of declining to accede to the application on behalf of Mr Bain to dismiss the Application for Contempt on the basis that the Applicants had failed to establish a prima-facie case.  I also note that the issue that Mr Bain had sought an order for costs had previously been referred to specifically in the Reasons I provided to the parties when I declined to accede to the Application made by Mr Richardson SC on behalf of Mr Bain that the Application for Contempt be dismissed on a summary basis. 

39. I accept that, in a manner provided for in the December 2013 Order, Mr Springer prepared costs submissions in respect of the hearing which occurred on 12 November 2013.  These costs submissions were filed on 13 February 2014.  That is, as I have noted, after Mr Springer ceased engagement with Blackston Lawyers and during the time Mr Bain had the conduct of his own matter personally. 

40. The costs submissions, which are dated 23 December 2013 are entitled “Outline of submissions on behalf of Applicant husband, costs arising from judgment delivered 12 December 2013”.  Clause 3 of them is in the following terms. 

    Pursuant to paragraph 2A of the orders of the Family Court of Australia, Court, dated 12 December 2013, the husband delivers his written reasons applying for costs of the Application to be awarded to him on the standard basis of assessment because:

41. I accept that the written Submissions filed on Mr Bain’s behalf and dated 23 December 2013 were not prepared by him.  I consider that Mr Bain’s evidence about the knowledge of these submissions was very carefully given.  That is, he says he was not involved in the preparation of, nor did he read, the written submission prepared by Mr Springer prior to him (Mr Springer) completing it.  This simply amounts to an assertion that he had not been involved in the preparation of the submissions nor read them before 23 December 2013 - which is about the day of, or before the day on which, Mr Springer ceased engagement at Blackston Lawyers. 

42. Mr Bain’s evidence is that he does not recall the costs submissions being filed electronically.  However, as I have said, this occurred on 13 February 2014, when the management of his own file been taken over by him.  Mr Bain’s evidence is that he did not personally file the written Submissions seeking costs - and this is hardly unusual. 

43. Mr Bain accepts that he may have become aware the submissions remained on the file and may have given instructions for them to have been filed.  There is no evidence that any person other than Mr Bain was, at the time the Submissions were filed, running his matter or responsible for it.  The only sensible, logical and coherent inference which can sensibly be drawn from the fact that the costs submissions were filed when he was the person engaged with and responsible for the conduct of his file or matter is that he caused them to be filed. 

44. That is, this establishes that Mr Bain’s review of the file after Mr Springer left was sufficient to cause him to become aware of the existence of the costs submissions and to cause them to be filed. 

45. It is, of course, relevant, though, to note that, whilst the costs’ submissions refer specifically to the December 2013 Order, it is clear they do not refer specifically to the undertaking recorded in that order.

46. The combination of the fact that:

    a)Mr Bain swore an affidavit containing an offer of an undertaking in the circumstances where it was prepared when he knew he was not going to attend the hearing on 12 November 2013;  and

    b)the contents of paragraph 24 of that affidavit;  and

    c)the fact that Mr Dick acted on instructions during the course of the hearing in November 2013;  and

    d)during the course of his oral submission, referred specifically to paragraph 24 of Mr Bain’s affidavit;  and

    e)Mr Bain’s matter was the only matter in which Mr Springer was engaged during his engagement with Blackston Lawyers and he was present on both occasions of the hearing in November and December 2013 and he worked under Mr Bain’s supervision;  and

    f)the usual course of a solicitor acting for a client would be to inform that person of the terms of an order made - particularly where it involves the Court’s acceptance of an undertaking referred to and proffered by affidavit material prepared by and relied upon by that client at the hearing;  and

    g)Mr Bain was represented by Mr Springer, whose only engagement was for the sole purpose of conducting Mr Bain’s litigation with Ms Bain; and

    h)the costs’ submissions prepared by Mr Springer – consequent upon the Order made on 13 December 2013 – were not filed until a time during which Mr Bain was responsible for the conduct of his own proceedings;  and

    i)Mr Bain sought an order for costs of and incidental to the Application determined by the December 2013 Order in a manner consistent with that provided for by the terms of the order itself (and not in accordance with the procedure provided for in the Rules);  and

    j)given the importance to a professional such as Mr Bain of clearly understanding whether the undertaking proffered in paragraph 24 of his affidavit relied upon at the hearing was or was not accepted by the Court;   and

    k)the fact that Mr Bain undertook a review of his file after Mr Springer left at the end of December 2013 and, as I have found, subsequently caused the costs’ submissions which relied upon the terms of the December 2013 Order to be filed;  and

    l)that he undertook a review of his file in order to ascertain material to provide to solicitors he then engaged, 

    when considered in the exercise in the ordinary powers of human reason, in light of human experience of the conduct of long-standing litigation by a professional (Mr Bain) in his personal capacity by way of the engagement of a lawyer, specifically charged with the conduct of only his litigation, persuades me that knowledge that the undertaking, referred to in paragraph 24 of Mr Bain’s affidavit, had been given and accepted by the Court, as recorded in the Order made in December 2013, is the only rational inference in the circumstances.

1. I am not persuaded that an assessment of the evidence as a whole reasonably admits of any other, or different conclusion.  I am not persuaded that the evidence is susceptible by reasonably possible explanation consistent with an absence of knowledge by Mr Bain at the requisite time. 

2. Having regard to the evidence and for the reasons I have expressed, I am satisfied beyond reasonable doubt that Mr Bain had the requisite knowledge when, on 19 August 2014, he received funds from MLC pursuant to his claim upon the life insurance component of the relevant MLC policy.

3. I do not accept the submissions made by Mr Richardson SC on behalf of Mr Bain, that the fact that funds obtained by Mr Bain from the life insurance component of the MLC policy, were expended on liabilities asserted to be matrimonial liabilities affects a determination of the issue of flagrancy.  In my view, this submission misapprehends the particular of contempt alleged, namely the failure to pay funds into, and hold the same in, the solicitor’s trust account pending further order of the Court.

4. In my view that is where the flagrancy of Mr Bain’s actions are demonstrated and, for this purpose, and at this stage, it matters not the use to which the funds deliberately and flagrantly disbursed in contravention of the undertaking accepted by the Court (as recorded in the December 2013 Order) were put.

5. Further, as I noted to Mr Richardson SC, this submission made in this respect is, in once sense, inconsistent with Mr Bain’s assertion that he had not been aware of and had not read the Reasons for Judgment delivered in December 2013 when he disbursed the payments he received from MLC.

6. I am, therefore, satisfied beyond reasonable doubt that Mr Bain received $457,786.00 as a consequence of his claim on the life insurance component of MLC Life Policy ...  I am also satisfied beyond reasonable doubt that Mr Bain did not pay these funds into, and hold them in, the trust account of Blackston Lawyers pending further order of the Court.

7. I am satisfied beyond reasonable doubt that Mr Bain undertook to the Court that, in the event he received any funds consequent upon a claim on the life insurance component of the relevant policy, he would cause such funds to be paid into his solicitor’s trust account and be held there pending further order of the Court.

8. I am satisfied beyond reasonable doubt that Mr Bain knew of the existence of the December 2013 Order and its terms, which recorded the acceptance by the Court of the undertaking profit on his behalf by Counsel, in the terms consistent with the contents of paragraph 24 of his affidavit, before he failed to cause the funds he received consequent upon his claim on the life insurance component of the policy to be paid into the trust account of Blackston Lawyers and be held there pending further of the Court.

9. I am also satisfied beyond reasonable doubt that Mr Bain’s actions in failing to cause the proceeds to be paid into Blackston Lawyers account and be held there pending further order of the Court - and, instead, causing the disbursement of those moneys - was not incidental or accidental or something which occurred through inadvertence, but, rather, was wilful and intentional and involved a deliberate defiance of the terms of the undertaking.

10. I am satisfied beyond reasonable doubt that, by the manner in which he acted, Mr Bain has demonstrated a flagrant challenge to the authority of the Court because his conduct in failing to cause the funds to be paid into Blackston Lawyer’s trust account and be held there pending further order of the Court, is both exceptional and striking. 

11. For these Reasons then, I am satisfied beyond reasonable doubt that Mr Bain contravened the undertaking given to, and accepted by the Court in proceedings under the Act as recorded in the Order made 13 December 2013, and that the  manner in which he did so involves a flagrant challenge to the authority of the Court such that he has committed a contempt of the Court by failing to pay funds received by him from MLC pursuant to the life insurance component of the relevant policy into the trust account of Blackston Lawyers and hold them there pending further order of the Court.

I certify that the preceding one hundred (100) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Hogan delivered on 25 May 2016.

Associate:                 

Reasons Settled:       26 July 2016