Clay v Clay (No 4)

[2004] TASSC 145

[2004] TASSC 145

CITATION:              Clay v Clay (No 4) [2004] TASSC 145

PARTIES:  CLAY, Marcus John Edward
  CLAY, Curtis Patrick Robert

CLAY, Ann-Maree Louise
by their Litigation Guardian
JANEIRO, Elizabeth Maree
v
CLAY, Geoffrey Edward
CLAY, Vera Irmgard

PUBLIC TRUSTEE

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  M80/2001
DELIVERED ON:  7 December 2004
DELIVERED AT:  Hobart
HEARING DATES:  8, 10 and 22 December 2003,

10 - 13 February, 24 April, 4 May, 29 June, 12 August,
27 October 2004

JUDGMENT OF:  Slicer J
CATCHWORDS:

Procedure – Contempt, attachment and sequestration – Power of court to punish for contempt – In general.
Supreme Court Rules 2000 (Tas), r942(4).
Martin v Trustrum (No 3) (2003) 12 Tas R 131; Australian Competition and Consumer Commission v Hughes (2004) 207 ALR 116, followed.
Australian Competition and Consumer Commission v Australian Taxation Information Services Pty Ltd [1999] FCA 1607; Deputy Commissioner of Taxation v Zhu (unreported, SC (Vic), Beach J, 9 September 1996, BC9604214); Yang (2002) 132 A Crim R 438; Australian Securities and Investments Commission v Matthews (1999) 32 ACSR 404; Deputy Commissioner of Taxation v Hickey [1999] FCA 259, referred to.
Aust Dig Procedure [700]

REPRESENTATION:

Counsel:
           Applicants:  N R Readett and K P Bradshaw
           Public Trustee:  B McManus
           Respondents:  J E Green
Solicitors:
           Applicants:  Clerk Walker & Stops
           Public Trustee:  Public Trust Office
           Respondents:  John Green

Judgment Number:  [2004] TASSC 145
Number of Paragraphs:  11

Serial No 145/2004
File No M80/2001

MARCUS JOHN EDWARD CLAY, CURTIS PATRICK ROBERT CLAY and ANN-MAREE LOUISE CLAY by their Litigation Guardian ELIZABETH MAREE JANEIRO v GEOFFREY EDWARD CLAY and VERA IRMGARD CLAY,
PUBLIC TRUSTEE (No 4)

REASONS FOR JUDGMENT  SLICER J

7 December 2004

1. The circumstances giving rise to these contempt proceedings have been stated in [2004] TASSC 33. On 24 June 2003 following a hearing at which the respondents were represented by counsel, the Court ordered ([2003] TASSC 63) the respondents to furnish and verify accounts of a trust administered by them. They did not comply. Following the removal of the respondents as trustees on 29 September 2003, the applicants initiated proceedings for contempt. Service of the order was effected on 17 November, but in case of irregularity or impossibility, a fresh order was obtained on 24 November and served on the following day. The respondents were brought before the Court on 8 December and found to be in contempt. At a following hearing when each was represented by counsel, a claim of procedural irregularity was unsuccessfully made.

1. The following hearings involving the taking of evidence were a mixture of an inquiry to the disposition of the assets, the sanction appropriate to their contempt and, indirectly, an attempt to show that there had, by reason of mental disability, not been a conscious contempt by the first respondent and an unknowing state on the part of the second respondent because she had left control of the matter to her husband.

1. Geoffrey Clay claimed that his mental condition had deteriorated as a consequence of a heart attack and age.  He further claimed that on realising the seriousness of the application, he had provided all the relevant material in his possession and was unable to recall detail because of his deterioration of memory.

1. The medical evidence advanced on behalf of Geoffrey Clay is accepted in part.  It is accepted that he has a deteriorating memory consistent with his age, probably accentuated by his heart surgery.  But the Court does not accept that his memory has deteriorated sufficiently to deprive him of the capacity to co-operate with the attempts to make him fully disclose his dealings.  The claim is belied by the list of claimed expenditure provided to his solicitors in July 2003 and the manner in which he gave evidence during these proceedings.  The Court accepts the evidence given and opinion expressed by the medical practitioners who gave evidence on behalf of Geoffrey Clay.  It is accepted that he has suffered from progressive deterioration in mental facility over some years, a condition probably exacerbated by a stroke.  But that deterioration, even if it involves a lessened short term memory capacity, has less import on these contempt proceedings.  He was required to collect and supply material and could have obtained the services of advisers to compile and present an account of the financial dealings.  Even  if details were lacking or difficult to recall, the failure to take any steps for compliance or fully co-operate, as best he was able, with the terms of the order, show indifference, rather than incapacity.

Principles of sanction

1. The basis on which a sentence can be imposed and, if appropriate, suspended, has been stated in Martin v Trustrum (No 3) (2003) 12 Tas R 131 and is adopted here.

1. In this case, the contempt is for failure to comply with a court order directed to the respondents as trustees.  While an executor who fails to file accounts within a prescribed time might be attached (In the Will of Oliver (1884) 10 VLR 28; Re Smith (1899) 24 VLR 730), these proceedings are confined to the lack of response to a specific order. The sanction does not attach to the conduct of the respondents as trustees. However, the continued evasion and conduct since the making of the order are relevant to the matter of sanction.

1. There is a useful compilation of cases involving the fixing of penalty for contempt or breach of court order or undertaking and principles relevant to assessment in Australian Competition and Consumer Commission v Hughes (2004) 207 ALR 116. Those cases show the utility of suspending portion of any sentence as a means of obtaining future co-operation or compliance. Cases such as Australian Competition and Consumer Commissioner v Australian Taxation Information Services Pty Ltd [1999] FCA 1607; Deputy Commission of Taxation v Zhu (unreported, SC (Vic), Beach J, 9 September 1996, BC9604214); Yang (2002) 132 A Crim R 438; Australian Securities and Investments Commission v Matthews (1999) 32 ACSR 404 show a utilitarian approach while recognising that imprisonment ought be a measure of last resort (Deputy Commissioner of Taxation v Hickey [1999] FCA 259). Here no purpose would be achieved through the imposition of a fine.

1. A distinction ought be made between the respondents.  Geoffrey Clay played a more dominant role in the management of the estate and had greater responsibility for the keeping of accounts.  His background in the management of money shows that he had the skills and capacity to provide the Court with much of the material and information required by the order.  He was more able to, and responsible for, compliance with the order of this Court.  Further, he had a greater responsibility for the making of full and open disclosure during the hearing of these proceedings.

1. Vera Clay has had a less active role and was slightly more co-operative during the hearing.  It would seem that she has some ongoing responsibility for one of the children of the deceased and her own dependent child.  It is not appropriate for both to be removed from the family (see generally R v Georgiadis & Ors [No 5] [2001] TASSC 88 at par30; Sinclair v R (1990) 51 A Crim R 418) at the same time. It is appropriate to impose a lesser sanction on her and to suspend its operation, subject to conditions.

1. The health of Geoffrey Clay has little import in the determination of primary sanction.  However, his current state of health is relevant in the question of suspension.  A significant portion of the sanction will be suspended, in part because of his present state of health and in greater part as a method of ensuring future co-operation.  Any question of sanction for the conduct of the estate remains one for the State.

1. The appropriate sanction for Vera Clay is that of two months' imprisonment suspended, and for Geoffrey Clay, four months' imprisonment, partly suspended on conditions.

Orders:

(1)Vera Clay be sentenced to a term of imprisonment for a period of two months wholly suspended on condition that for a period of three years she comply with all reasonable requests made by the Trustee in connection with the administration of the estate and further that she deliver any documents or records pertaining to the administration of the estate which are in her possession or control.

(2)Geoffrey Clay be sentenced to a term of imprisonment for a period of four months, such sentence to be suspended as and from 22 December 2004 on condition that for a period of three years he comply with all reasonable requests made by the Trustee in connection with the administration of the estate and further that he deliver any documents or records pertaining to the administration of the estate which are in his possession or control.