CARY & DALGARD (No.2)

[2019] FCCA 2206

FEDERAL CIRCUIT COURT OF AUSTRALIA

CARY & DALGARD (No.2) [2019] FCCA 2206

Catchwords:
CHILD SUPPORT – Contravention of financial and disclosure orders – contravention application – separate enforcement proceedings on foot.

Legislation:

Family Law Act 1975 (Cth), ss.112AB, 112AC, 112AD, 117

Federal Circuit Court Rules 2001 (Cth) rr.25B.16(1)(b)(i), 25B.17(2)

Cases cited:

Cary & Dalgard [2018] FCCA 2942

Applicant: MS CARY

Respondent: MR DALGARD

File Number: MLC 7706 of 2009

Judgment of: Judge Harland

Hearing dates: 30 April and 20 May 2019

Date of Last Submission: 20 May 2019

Delivered at: Melbourne

Delivered on: 13 August 2019

REPRESENTATION

Solicitors for the Applicant: Ms Geros of WMB Lawyers

The Respondent appearing in person

ORDERS

1. Count 1 of the contravention application is proved with the respondent having contravened order 6(a) of the orders made on 15 February 2018 without reasonable excuse.

2. Count 2 of the contravention application is proved with the respondent having contravened order 6(b) of the orders made on 15 February 2018 without reasonable excuse.

3. Count 3 of the contravention application is proved with the respondent having contravened orders 4 and 6 of the orders made on 12 April 2018 without reasonable excuse.

4. Count 4 of the contravention application is proved with the respondent having contravened orders 3 and 4 of the orders made on 25 June 2018 without reasonable excuse.

5. Count 5 be struck out.

6. Count 6 of the contravention application is proved with the respondent having contravened order 7 of the orders made on 25 June 2018 without reasonable excuse.

7. In the event of any change in the Respondent’s employment circumstances, the Respondent is to inform applicant’s lawyers and the Department of Human Services: Child Support within 7 days of such change.

8. The Respondent is to keep the Applicant’s solicitor and the Department of Human Services informed of his current address, email and phone number until all outstanding debts are paid in full.

9. The Respondent pay costs in the sum of $10,414 with such sum to be paid in instalments in accordance with Order 3(b) of the Orders made 24 September 2018 in addition to the original amount owing for the applicant’s costs.

10. In respect of the contraventions found in Orders (1) to (4) and (6) above the Respondent is required to attend before Registrar Kaur on 13 August 2019 to enter into a bond without surety or security in accordance with section 112AF of the Family Law Act 1975 for a period of twelve (12) months upon the following conditions:

    (a)to be of good behaviour;

    (b)to comply with orders made on 24 September 2018 until the outstanding sums are paid in full;

    (c)to pay the sum of $10,414 in further costs, such sum to be added to the amount owing pursuant to sum of $15,815.50 in legal costs.

    (d)to notify the Department of Human Services: Child Support and the Applicant in writing within seven (7) days of commencing employment with any new employer the name address and telephone number of that employer.

11. The Applicant is at liberty to apply on seven (7) days’ notice by way of an Application in a Case and an affidavit in support to restore the matter to the List in the event of any default of payment by the Respondent or the Respondent notifying the applicant of any change of employment.

NOTATION

(A)The applicant’s lawyer advises that as at 14 May 2019 the respondent owed $5,560.01 in outstanding child support and $15,815.50 in legal costs, which does not include the additional amount of legal costs set out in Order 11.

(B)Order 3 of the Orders dated 24 September 2018 are as follows:

3. The Applicant has leave to file with the Registrar of the Court two Third Party Debt Notices (‘TPDN’) for issuing on Company B Pty Ltd being:

(a) In the sum of $350.00 per week to be paid to the Registrar of Child Support; and

(b) In the sum of $150.00 per week to be paid to WMB Lawyers.

IT IS NOTED that publication of this judgment under the pseudonym Cary & Dalgard (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT MELBOURNE

MLC 7706 of 2009

MS CARY

Applicant

And

MR DALGARD

Respondent

REASONS FOR JUDGMENT

1. I have previously given reasons in this matter, Cary & Dalgard [2018] FCCA 2942, with respect to the application to enforce a child support debt. This contravention application is related to those proceedings. My reasons for judgment, delivered on 18 October 2018, dealt with the enforcement application and reinstatement of the contravention application which I found the registrar had erroneously dismissed. I will not repeat those reasons here.

2. The respondent concedes that he has breached orders. His engagement with these proceedings has been inconsistent and somewhat half-hearted. Ultimately, as he now realises, this has made his position worse and he has significant costs orders to pay in addition to the child support debt.

3. The contravention application has had some false starts. In part this was due to the non-attendance of the respondent when it was listed for hearing initially, although the hearing could not have proceeded on that day as the solicitor with carriage of the matter was unwell, leaving another solicitor in her office with the invidious task of attending court for the hearing of a matter she was not familiar with. Throughout this matter solicitors from the firm have appeared as advocates rather than briefing counsel. There is nothing wrong with solicitor advocates per se. The first solicitor with carriage of the matter was very experienced. He left the firm. The solicitor who appeared at the contravention hearing is a junior solicitor who had clearly prepared and tried hard but contravention proceedings are technical and difficult. It was necessary to adjourn the matter for written submissions as she was not able to articulate the submissions in accordance with Div. XIIIA and the costs sought. The submissions she prepared are detailed.[1]

   [1]Unfortunately, the submissions contain typographical errors with respect to case names and citations.

4. Given the nature of contravention proceedings it is important to focus on the contraventions that have been pleaded and made out and not other non-compliance with orders, some of which have been addressed by way of costs orders and some of which ultimately have been to the disadvantage of the respondent in failing to provide any evidence to the court with respect to any reasonable excuse. This is not something that the written submissions grapple with at times. To do otherwise risks the respondent being effectively punished twice.

5. The respondent is fortunate that the contravention application only addresses these particular incidents. I am also mindful that I must limit my consideration to the five counts that have been pleaded and established pursuant to the contravention application before me and not other breaches and failures to attend court which are not the subject of this contravention application.

Contraventions

1. The applicant relies on her contravention application and supporting affidavit of Mr Andrianakis sworn 14 August 2018.

2. Six counts are pleaded. I struck out the fifth count due to lack of evidence. What it does is reinforce the pattern of the respondent’s failure to comply with court orders and properly engage in the proceedings. Also against this background is the fact that the proceedings are brought because of the respondent’s failure to meet his child support obligations.

The Law

1. Part XIIIA of the Family Law Act1975 (Cth) deals with contraventions of orders and other obligations that do not affect children. The Orders referred to in the contravention application fall into this category.

2. Section 112AB defines a contravention as occurring when a person bound by an order has either intentionally failed to comply with the order or made no reasonable attempt to comply with the order.

3. The Court must also be satisfied that the respondent either intentionally failed to comply with the order or made no reasonable attempt to comply with the orders. I am satisfied that the respondent made no reasonable attempt to comply with the orders. He was aware of his obligations. He was in court on several occasions and in fact had to be brought to court under arrest twice. The respondent has not established that he has a reasonable excuse. Reasonable excuse is defined by s.112AC. The respondent gave brief evidence in chief and was cross-examined. The respondent did not raise a reasonable excuse as a defence.

4. Section 112AD sets out the sanctions. These include being required to enter into a bond, impose a sentence (such as community service), issue a fine or a sentence of imprisonment.

Count one

1. This count alleges that the respondent breached order 6(a) of the interim orders dated 15 February 2018 pursuant to r.25B.16(1)(b)(i) of the Federal Circuit Court Rules 2001 (Cth) (“the Rules”).

2. The particulars of the alleged contravention is that the respondent failed, without reasonable excuse, to make, file and serve a Financial Statement prior to 5 April 2018 as required by order 6(a) and r.25B.16(1)(b)(i).

3. Order 6(a) of the interim orders made on 15 February 2018 is as follows:

   Pursuant to:

   Rule 25B.16(1)(b)(i) of the Rules, the Respondent be required to make, file and serve a Financial Statement 7 days prior to the Enforcement Hearing.

4. The respondent was not in court on that occasion. He had not turned up to court on the previous occasion being 29 November 2017 either. He did appear in court on 19 February 2018.

5. The applicant relies on paragraphs 1 to 11 of Mr Andrianakis’s affidavit. The applicant states that a letter dated 7 March 2018 was sent to the respondent via post and email requesting he file and serve a Financial Statement in accordance with the orders dated 15 February 2018 seven days prior to the enforcement hearing.

6. The applicant sent an additional letter via post and email to the respondent on 6 April 2018 notifying him that he had failed to comply with order 6(a).

7. On 12 April 2018 the respondent provided to the applicant a document purporting to be a Financial Statement. This document was not filed with the court. This was the day of the enforcement hearing when the respondent was cross-examined as was his wife. He eventually filed a financial statement on 28 June 2018.

8. I find this count proved. The respondent does not have a reasonable excuse.

Count two

1. This count alleges that the respondent breached order 6(b) of the interim orders dated 15 February 2018 pursuant to r.25B.17(2) of the Rules.

2. The particulars of the alleged contravention is that the respondent failed, without reasonable excuse, to produce documents listed in a letter from the applicant’s lawyers to the respondent dated 7 March 2018 as required by Order 6(b) and r.25B.17(2).

3. Order 6(b) of the interim orders made on 15 February 2018 is as follows:

   Pursuant to:

   Rule 25B.17(2) of the Rules, the Applicant serve a list of documents required by her for production by the Respondent at the Enforcement Hearing.

4. The applicant relies on paragraphs 11 to 24 of Mr Andrianakis’s affidavit. The applicant indicates that the respondent failed to produce copies of, amongst other documents, two years’ worth of pay-slips, bank account and credit card statements, in addition to five years’ worth of tax returns. Such documents were requested to be produced prior to or at the enforcement hearing on 12 April 2018.

5. The applicant indicates that on 12 April 2018 at the enforcement hearing the respondent produced one document being an individual PAYG Summary for the year ending 30 June 2016.

6. The tenor of the respondent’s evidence in chief was that he didn’t have some paperwork and that he knew they had subpoenaed information. Of course the applicant had to issue the subpoena because of the respondent’s failure to comply with the orders.

7. The respondent said that he did not have the paperwork to provide. The difficulty is that he did not communicate that. He did not give the impression that he did not make much effort to comply with the orders. He said he was upset that the subpoena asked for documents for five years.

8. I find this count proved. The respondent does not have a reasonable excuse.

Count three

1. This count alleges that the respondent contravened orders 4 and 6 of the interim orders dated 12 April 2018.

2. The particulars given are that the respondent failed, without reasonable excuse, to produce the documents outlined in order 4(a) to (e) inclusive.

3. Orders 4 and 6 of the interim orders made on 12 April 2018 are as follows:

   4. Pursuant to s.36 of the Evidence Act 1995, the Respondent is ordered to provide the following documents:

   a) tax returns, notices of assessments and PAYG Summaries for the last 5 financial years;

   b) business records in his possession for Company D being:

   i) bank statements;

   ii) tax returns, financial statements and BAS statements;

   iii) invoices rendered by the business;

   iv) receipts and invoices for expenses incurred;

   (“Business documents”) for the period of 1 July 2015 to date (“Relevant Period”)

   c) any documents related to the Motor Vehicle F and Motor Vehicle E;

   d) most recent superannuation statement; and

   e) employment documents with Company B Pty Ltd.

   6. The mode of production for the purposes of Orders 5 and 6 [sic] is personal delivery to the Lawyers for the Applicant, Suite 8, 233 Cardigan Street Carlton VIC 3053 by 4:00pm 11 May 2018.

4. The applicant relies on paragraphs 11 to 24 of Mr Andrianakis’s affidavit. The applicant indicates that as pursuant to orders 4 and 6 of 12 April 2018, the respondent did not produce the documents listed. The applicant provides correspondence in Annexure AA-07 indicating that the respondent did not comply with such orders. The applicant further notes in Annexure AA-09 dated 5 June 2018 that as a result of the documents failing to be produced by the respondent, subpoenas were filed and served on Company B, National Australia Bank Limited and Westpac Banking Corporation.

5. The respondent said the applicant subpoenaed the documents. This was only necessary because of his failure to comply. He also says he does not have some of them. Again, he did not communicate this.

6. I find this count proved. The respondent does not have a reasonable excuse.

Count four

1. This count alleges that the respondent breached orders 3 and 4 of the interim orders dated 25 June 2018.

2. The particulars of the alleged contravention is that the respondent failed, without reasonable excuse, to make weekly payments of $100 to the applicant’s lawyers in accordance with the above orders. Specifically, the respondent failed to make such payments on the following dates whereby payment was due: 13 July 2018, 20 July 2018, 27 July 2018 and 3 August 2018.

3. Orders 3 and 4 of the interim orders made on 25 June 2018 are as follows:

   3. That the Respondent, until further Order, pay the Applicant’s legal costs ordered on 15 February 2018 an 12 April 2018 in instalments of $100.00 each week to the Applicant’s lawyers to the following account:

   Name of Account: WMB Lawyers Clearing Account

   Bank: Commonwealth Bank of Australia

   BSB Number: …

   Account Number: …

   4. That the payments required by Orders 2 and 3 commence 13 July 2018 and continue each week thereafter.

4. The applicant relies on paragraphs 11 to 24 of Mr Andrianakis’s affidavit. The applicant states in paragraph 28 that correspondence was sent to the respondent and Ms A on 5 July 2018 by way of post and email summarising their required actions in accordance with the orders dated 25 June 2018.

5. When cross-examined about this the respondent said he paid $600 as a lump sum because it was easier for him. The difficulty with this approach is that it makes it impossible for the applicant to plan her finances. Indeed one of her complaints is that when he makes irregular payments it impacts on her housing benefit and she has to continuously update the Department.

6. Compliance with the periodic payments is not about the respondent’s convenience. The only reason the orders for payments of both child support and costs is by way of instalments is because the applicant was unable to identify a source of funds or property which could be seized in satisfaction of the outstanding debts.

7. It would be far preferable for the applicant and her lawyers for the whole of the outstanding debt to be paid in a lump sum now rather than being in the position of uncertainty as to whether or not the respondent will now comply with these orders or whether further enforcement and/or contravention proceedings will need to be brought.

8. I find this count proved. The respondent does not have a reasonable excuse.

Count six

1. This count alleges that the respondent breached order 7 of the interim orders dated 25 June 2018.

2. The particulars of the alleged contravention is that the respondent failed, without reasonable excuse, to provide to the applicant’s lawyers the documents required by orders 4 and 5 of the orders made 12 April 2018 by 4:00pm on Monday 9 July 2018 in accordance with orders 6, 8 and 9 dated 12 April 2018.

3. Order 7 of the interim orders made on 25 June 2018 is as follows:

   That the Respondent and Ms A provide to the Applicant’s lawyer the documents required by Orders 4 and 5 of the Orders made 12 April 2018 by 4pm on Monday 9 July 2018 in accordance with Orders 6, 8 and 9 made 12 April 2018.

4. The applicant relies on paragraphs 28 to 38 of Mr Andrianakis’s affidavit. The applicant states that correspondence was sent to the respondent and Ms A on 5 July2018 by way of post and email summarising their required actions in accordance with the orders dated 25 June 2018.

5. The applicant subsequently indicates that on 26 July 2018 a further letter was sent by email and post to the respondent and Ms A putting them both on urgent notice that a contravention application would be issued against them.

6. The applicant indicates at paragraph 37 of her affidavit that no documents had been received by in accordance with orders 4 and 5 made on 12 April 2018.

7. The respondent did not have a credible explanation for his failure to comply with the order.

8. I find this count proved. The respondent does not have a reasonable excuse.

Sanctions

1. The applicant submits that the respondent’s behaviour has become close to contempt. Whilst I do not accept that submission I stress these contraventions are serious.  The respondent’s conduct has led to increased financial strain on the applicant and has taken up considerable additional court time which should not have been necessary. The respondent says he tried to seek legal advice but could not afford it. He has appeared self-represented throughout.

2. The applicant acknowledges that imprisonment is a sentence of last resort and is not appropriate when there are other sanctions available.

3. The applicant seeks an order that the respondent be placed on a good behaviour bond for two years and that he be fined with such fine to be paid after he has paid the outstanding costs and child support.

4. The Court can impose a fine of up to 60 penalty units. In this case the combination of the costs previously ordered and the further costs ordered today far exceed the outstanding child support debt. The court cannot impose a fine exceeding 60 penalty points. As each unit is $210 the maximum fine is $12,600.

5. At the further hearing on sanctions the respondent submitted that a bond of six months would be appropriate. I do not think that is adequate given the nature of the contraventions and that fact that there is likely to be a significant sum still outstanding at that time.

6. Two years is the maximum length of time I can impose a bond. I find it is appropriate to place the respondent on a bond for a period of two years or until the payments are made in full if that occurs in less than two years. 

7. The respondent told the Court that he has been on a bond previously. The bond is an appropriate sanction and should also emphasise to the respondent the importance of complying with the orders, paying the instalments on time, every time. If he fails to do so he will be back in court facing more serious sanctions, such as community service or even imprisonment.

1. In addition to the bond it is appropriate that the respondent pay the applicant’s costs for bringing the contravention application, which would not have been necessary if he had complied with orders.  I address the quantum of those costs below.

Costs

1. The applicant seeks an order for costs she has incurred for the following occasions the case was in court. The basis for the costs at the Federal Circuit Court Scale are set out in the affidavit of Ms Geros. I do not propose to order the costs in amount sought in every instance for the reasons I shall give.

2. Costs are governed by s.117 of the Family Law Act 1975. The contravention proceedings were brought by the applicant in aid of the enforcement proceedings because of the respondent’s ongoing failure to comply with court orders. If it were not for this they would have been unnecessary. In those circumstances it is appropriate that the respondent pay the applicant’s costs. I am mindful that the costs now far outstrip the child support debt but that is the responsibility of the respondent who I suspect is only just now realising this.

3. WMB Lawyers seeks costs for the appearance on 18 March 2019 totalling $3,479.00. It was apparent on that occasion that the solicitor who attended court was not very familiar with the file. The court appearance finished by noon. The respondent did not attend court. I am not prepared to allow the whole of costs for that occasion. I will order that the respondent pay the applicant’s costs for the appearance on 18 March 2019 in the sum of $1,739.50.

4. WMB Lawyers seeks costs for the court appearance on 8 April 2019 in the sum of $3,479.00. The solicitor with carriage of the matter at that time fell ill the morning of the hearing and Ms Geros attended in her place. The respondent did not attend court that day. The hearing would not have been able to proceed because of the illness of the solicitor with carriage of the matter. Ms Geros did spend some hours at court attempting to contact the respondent and made submissions. Given the unexpected nature of the court appearance Ms Geros would not have the opportunity to undertake the preparation that a solicitor normally would. In these circumstances I will allow half the summary hearing fee, the half day appearance and advocacy loading totalling $2,579.50.

5. WMB Lawyers seeks $3,479.00 for the appearance on 16 April 2019 despite Ms Geros acknowledging in her affidavit that she was called in because the respondent had been arrested and brought to court. She notes the appearance was done within the hour. In those circumstances the appropriate costs is the short appearance fee of $305.00.

6. Inexplicably WMB Lawyers seeks the General Federal Law Scale and not the Family Law Scale for the preparation of the final hearing, being the contravention hearing. I will allow the family law amount of $4,775.00. I did not orders costs on 30 April 2019 because it was necessary to order written submissions and an affidavit with respect to costs as Ms Geros was unable to provide the information at the hearing as it should have been. It was for this reason that it was necessary to list the matter for further submissions after the receipt of the written submissions and affidavit. This was after allowing the matter to be stood down for Ms Geros to obtain instructions. This should not have been necessary.

7. The appearance on 20 May lasted for five minutes. I will allow $606. I will also allow the disbursements sought in the sum of $105.

8. I will also allow a further $305.00 for taking the judgment and explaining it to the applicant.

9. The total costs I will order for these dates are:

The appearance on 18 March 2019	$1,739
The appearance on 8 April 2019	$2,579
The preparation of the final hearing	$4,775
The appearance on 16 April 2019	$305
The appearance on 20 May 2019	$606
Disbursements	$105
Taking the judgment and explaining it to the applicant	$305
TOTAL COSTS	$10,414

Conclusion

1. I find counts 1- 4 and 6 proven. The respondent did not have a reasonable excuse. He made little attempt to comply with the orders.

2. Order 3 and 6 of the orders made on 24 September 2018 provide for the following:

   3. The Applicant has leave to file with the Registrar of the Court two Third Party Debt Notices (‘TPDN’) for issuing on Company B Pty Ltd being:

   (a) In the sum of $350.00 per week to be paid to the Registrar of Child Support; and

   (b) In the sum of $150.00 per week to be paid to WMB Lawyers.

   6. Upon the Child Support Debt being paid in full, the Applicant have leave to approach the Registrar of the Court to vary the amount provided for in order 3(b).

3. In practical terms the addition costs the respondent owes as a result of these orders will be added to the amount he must pay by way of instalments pursuant to order 3(b). I also note that the applicant may approach the registrar to vary the Third Party Debt notice once the respondent has paid the amount of outstanding child support to increase the amount of costs the respondent is required to pay by way of instalments.

4. For the reasons I have given I make the orders which appear at the beginning of these reasons.

I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of Judge Harland

Date:  13 August 2019