Charonne and Charonne (No. 2)

[2009] FamCA 561

FAMILY COURT OF AUSTRALIA

CHARONNE & CHARONNE (NO. 2) [2009] FamCA 561

FAMILY LAW – ORDERS – Contravention

APPLICANT: Ms Charonne

RESPONDENT: Mr Charonne

FILE NUMBER: MLC 4853 of 2007

DATE DELIVERED: 19 June 2009

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Dessau J

HEARING DATE: 19 June 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Strum

SOLICITOR FOR THE APPLICANT: Marshalls & Dent

COUNSEL FOR THE RESPONDENT: Mr Skerlj

SOLICITOR FOR THE RESPONDENT: Aitken Partners Pty Ltd

Orders

1. That Charges 1, 3, 4, 5 and 6 of the Contraventions alleged by the wife in her application filed 26 May 2009 shall be dismissed.

2. That Charge 2 in the same application shall be found proven against the husband.

3. That the question of sanction shall be adjourned until 10.00am on 26 June 2009 before me.

IT IS NOTED that publication of this judgment under the pseudonym Charonne & Charonne is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 4853 of 2007

MS CHARONNE

Applicant

And

MR CHARONNE

Respondent

REASONS FOR JUDGMENT

1. Mr and Mrs Charonne are engaged in property proceedings.  Mrs Charonne (“the wife”) has alleged six breaches by the husband of paragraph 13 of interim Orders of this court made on 4 July 2007.  They are set out in her contravention application filed on 26 May 2009, supported by paragraphs 6 to 25 of her affidavit filed on the same day.

2. Broadly, she alleges contraventions relating to the use of monies by Mr Charonne (“the husband”) contrary to injunction, and I will return to the detail as relevant. 

3. At the outset I note that I followed the procedures set out in rule 21.08 of the Family Law Rules.  The husband denies the allegations and has given evidence. 

4. Section 112AD of the Family Law Act provides that if the court is satisfied that a person has without reasonable excuse contravened an order, the court may impose one of a range of sanctions set out in the Act.

5. The meaning of contravening an order is set out in Section 112AB(1)(a) as follows:

   where the person is bound by the order – her or she has:

   (i)intentionally failed to comply with the order; or

   (ii)made no reasonable attempt to comply with the order;

6. Pursuant to s 112AC(2), a person shall be taken to have had a reasonable excuse for contravening an order if:

   (a)      the respondent contravened the order because, or substantially because he or she did not , at the time of the contravention, understand the obligations imposed by the order on the person who was bound by it; and

   (b)     the court is satisfied that the respondent ought to be excused in respect of the contravention.

7. I note the terms of paragraph 13 of the 4 July 2007 Orders:

   That until further order the husband be and is hereby restrained from selling, encumbering, disposing of or dealing in any way with any item of property in which he has a beneficial interest save in the ordinary course of his professional business activities without having first given the wife notice in writing to her solicitors of his intention to do so 14 days prior to.

8. The husband admits that on 18 November 2008 he withdrew a total of $90,000 from the St George bank account referred to in Charge 1, but says he had a reasonable excuse to do so in that the monies were used in the ordinary course of his professional activities. 

9. There is no dispute or complaint that of the $90,000, the sum of $44,000 was used towards stamp duty in relation to the purchase of a property. 

10. Otherwise, he admits that of the $90,000 a sum of $28,000 was paid to Middletons towards his legal fees in these proceedings.  That is relevant to Charge 2.

11. He admits that another $17,640, as set out in what was Charge 3, was paid in to his G Pty Ltd account.  G Pty Ltd is the trustee of what he describes as his “business trust”.  He says that he pays all his business and personal expenses from that account, but this particular sum was used for business expenses. 

12. He admits that a sum of $5,637, relevant to Charge 4, was used by him to pay more family law fees to Middletons.  He says he made a mistake in a previous affidavit when he swore that those monies came from the G Pty Ltd account.  In fact they came from an account he called “the [TB] account”.

13. He denies that an unknown sum of monies or any sum of monies were used for counsel fees (referred to in what was Charge 5), and he admits that of the $17,640 used by him for business purposes, the sum of approximately $12,130 in Charge 6,was included.

14. Before considering “reasonable excuse” I shall deal with the duplication of charges.  Charge 1 relates to an overall sum of $90,000.  Charges 2 to 6 clearly relate to sums within it.  The husband cannot be charged twice in relation to the same alleged contravention.  I have indicated that Charge 1 shall be dismissed.  I have already indicated for similar reasons that Charges 3 and 5 should be dismissed.  Charge 5 in any event lacked, in my view, sufficient particularity and evidence.

15. Turning then to Charge 2, I am not satisfied that the husband's excuse is a reasonable one.  His claim that $28,000, used by him to pay legal expenses in relation to his family law case, was expended "in the ordinary course of his profession" is what I considered to be a lame excuse.  I reject it.  It is absurd to suggest that payment of a judgment debt, for fees personally incurred, was in any way in the ordinary course of his profession simply because, as he claimed, he could otherwise be bankrupted and unable to practise his profession.  That may well have been the consequence - although it is not the only potential consequence of having a judgment debt - and he gave no evidence of any efforts made by him to avoid it. 

16. The expenditure of this sum of $28,000 was clearly a personal one.  The restraint on the husband was clearly to preserve assets from erosion by personal expenditure.  To claim this as a professional expense requires, in my view, a contortion of logic that takes the excuse beyond being a reasonable one.  I find that charge proven.

17. Charge 4 relates to the sum of $5,637.  It is charged, as I have noted, on the basis that the money came from the G Pty Ltd account.  That was what the husband had sworn in an earlier affidavit upon which the charge was based.  In evidence he swore that he was wrong and it came from a different account.  The fall-out in my view is two-fold.  First, the charge is wrongly expressed.  Secondly, the sum of $5,600 odd dollars is not in fact part of the $17,640 as it appeared, but is over and above that sum.

18. Mr Strum for the wife did not at any point ask me to amend the charge.  In my view I cannot find it proven as alleged, and it should be dismissed.  The husband could be charged with the actual offence.  He is not being acquitted of that as such.  It would be potentially a waste of resources.  That is a matter for the wife.  I can note that, on his own admission, he used the sum of $5,637 to pay his family law legal fees and that is a matter that should properly be taken into account in the property proceedings.  The outcome in relation to that, on the precedent, should be quite clear.

19. As to Charge 6, the husband relies on the reasonable excuse of the monies being used again by way of business expenditure.  The G Pty Ltd account receives funds from various sources including his salary.  From it he pays a mixture of living expenses, child support, support for his elder daughter, and other personal as well as business expenses.  He says that the $17,640 sum - and I can say as an aside it should actually be $17,740, but it has been referred to throughout as $17,640 - was used for business expenses.  He pointed to $10,749 between December 2008 and April 2009 referrable to accountant's fees, car expenses, and interest payments on the H property.  He referred to a further $12,000 withdrawn in the same time-frame, to meet Mastercard repayments for repair of his car and for electricity at the H property.

20. The difficulty is to decipher what has been expended on what, as he has paid for some personal and some business expenses from the one account, and as he has personal income as well as the relevant funds deposited into the account.  I cannot look at it in the limited way suggested by Mr Strum, where I would only look at a narrow time-frame as to what came in and what went out, effectively within a matter of weeks.  I am satisfied that I should take into account the slightly broader time frame which is still only a matter of several months. 

21. I refer to the husband’s 2008 tax return.  The H property expenses are claimed as expenses, as per a rental property schedule.  Accordingly, I accept that the sums of $164, $3,500, $3,200 and $2,451, referred to by him, were incurred in the course of business activities.

22. I note too that 68% of his car expenses are claimable under his tax return.  I accept that in the relevant period he spent $108 on roadside assist, $692 on car insurance and $10,004 on repairs, a total of $10,804, 68% of which is $7,346. 

23. The husband also paid nearly $1,500 in accounting fees. Those H property expenses, car expenses, and accounting expenses equal more than $18,000.  The figures cannot be absolutely precise but I am satisfied that he has sufficiently proven that he has met business or professional expenses so as to constitute a reasonable excuse in relation to Charge 6, and it should be dismissed. 

24. So the only charge that I propose to find proven is Charge 2. 

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dessau

Associate: 

Date:  19 June 2009