Cluny and Skinner (No 3)
[2019] FamCA 602
•23 August 2019
FAMILY COURT OF AUSTRALIA
| CLUNY & SKINNER (NO. 3) | [2019] FamCA 602 |
| FAMILY LAW – CONTEMPT – APPLICATION IN A CASE – STAY OF ORDERS – Where the husband was found guilty of contempt within the meaning of s 112AP of the Family Law Act 1975 (Cth) and was also found to have contravened orders without reasonable excuse within the meaning of s 112AD on 28 April 2017 – Where the husband was given two years to remedy his contraventions of orders or, in default, serve a three month term of imprisonment – Where in the two year period the husband paid less than $1,000 of a debt totalling approximately $521,000 with interest as of 30 July 2019 – Where the orders were stayed for a further two weeks pending the filing of a formal application for a stay pending appeal – Where the husband does not propose to appeal – Where the husband seeks a stay of the term of imprisonment conditional upon his paying $25,000 within seven days and $6,000 per month thereafter – Where even ignoring accruing interest and the husband’s ongoing child support obligations, it would take approximately seven years to remedy the contraventions on the husband’s proposal – Where the husband is attempting to impermissibly re-visit the determination of sanction – Where there is no legitimate basis to stay the orders for sanction already imposed. FAMILY LAW – POWER TO VARY OR DISCHARGE S 112AD ORDER – S 112AK – Where the husband does not establish any basis for that power to be exercised in his favour – Application dismissed. |
| Family Law Act 1975 (Cth) ss 112AD, 112AK, 112AP |
| Cluny & Skinner [2017] FamCA 255 Cluny & Skinner (No 2) [2017] FamCA 547 Cluny & Skinner [2019] FamCA 519 Kendling & Kendling (Contempt) (2008) FLC 93-384; [2008] FamCAFC 154 Tate and Tate (No 4) (2003) FLC 93-139; [2003] FamCA 113 Witham vHolloway (1995) 183 CLR 525; [1995] HCA 3 |
| APPLICANT: | Ms Cluny |
| RESPONDENT: | Mr Skinner |
| FILE NUMBER: | BRC | 812 | of | 2010 |
| DATE DELIVERED: | 23 August 2019 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Kent J |
| HEARING DATE: | 16 August 2019 |
REPRESENTATION
| SOLICITOR FOR THE APPLICANT: | Ms Feeney, Feeney Family Law |
| COUNSEL FOR THE RESPONDENT: | Mr Alexander of Counsel |
| SOLICITOR FOR THE RESPONDENT: | McInnes Wilson Lawyers |
Orders
The Husband’s Application in a Case filed by leave on 16 August 2019 be dismissed.
There be no further stay of Order (3) made on 1 August 2019 (amended 2 August 2019) and the Husband’s term of imprisonment for a period of three (3) months shall commence immediately and continue until 10:00 am on 23 November 2019.
To give effect to Order (2) of this Order, a Warrant of Commitment forthwith issue in the usual form.
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 Cluny & Skinner (No 2) 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 812 of 2010
| Ms Cluny |
Applicant
And
| Mr Skinner |
Respondent
REASONS FOR JUDGMENT
Previous orders
On 28 April 2017, I recorded findings in reasons for judgment[1] then delivered that Mr Skinner (“the husband”) was guilty of contempt within the meaning of s 112AP of the Family Law Act 1975 (Cth) (“the Act”), in that he had contravened an order in a manner involving a flagrant challenge to the authority of the Court. I also recorded findings in those reasons as to the very substantial extent to which the husband had contravened various financial orders made for him to make payments to Ms Cluny (“the wife”) of child support, spouse maintenance, lump sum arrears of ordered payments and costs ordered.
[1]Cluny & Skinner [2017] FamCA 255.
On 10 July 2017, a further hearing was conducted for the purpose of determining the appropriate sanctions to be imposed for the husband’s contempt and for his contraventions of orders. The reasons for judgment of 28 April 2017, read with the reasons for judgment delivered on 31 July 2017[2] following that hearing, detail the determination of sanctions both with respect to contempt as found and the husband’s contraventions of orders. In respect of his contempt, the husband was fined $30,000, a fine which the husband paid, albeit somewhat belatedly.
[2]Cluny & Skinner (No 2) [2017] FamCA 547.
There was no appeal by either party from either of the substantive determinations of contempt and contraventions recorded on 28 April 2017; nor from the determination of sanctions as recorded in the reasons delivered on 31 July 2017.
As the reasons for judgment delivered on 31 July 2017 reflect, the husband’s contraventions of financial orders, including for child support involved amounts totalling, at that time, in excess of $250,000 plus interest. With indemnity costs of about $90,000, the husband’s accrued liability was in excess of $300,000 plus his ongoing liability for child support plus interest which had accrued and was continuing to accrue on unpaid sums.
The orders made on 31 July 2017 with respect to sanction for contraventions included an order allowing the husband two (2) years, that is until 31 July 2019, to remedy his contraventions of orders that he pay spouse maintenance, child support, costs and lump sum arrears from earlier orders, together with the indemnity costs of the wife in respect of the contempt and contravention proceedings. Thus, the orders made on 31 July 2017 included an order (Order (3)) that in default of the husband paying to the wife the entirety of the payments identified in those orders the husband should attend the Court at 10:00 am on 1 August 2019 to show cause why, despite his default, he should not be imprisoned for a period of three (3) months from that date.
The reasons for judgment delivered on 31 July 2017 included my reasoning for allowing the husband a two (2) year period to remedy his contumelious and gross breaches of various orders (at [54]-[87]), despite the wife’s opposition to that allowance. In short, the husband had provided evidence of business opportunities he intended to pursue and of his stated ambition to remedy his non-compliance and to see the wife paid in full within the two (2) year period he sought. This was also against the background of his open offer to the wife to agree to a variation of final property settlement orders seeing the entirety of his accumulated superannuation made the subject of a splitting order in the wife’s favour – an offer the wife refused.
The husband also had the benefit of an order returning his passport to him to maximise, as he submitted, his pursuit of these business opportunities. As is explained in the reasons delivered on 28 April 2017, the contempt proceedings centred upon the husband’s breach of an order that he surrender his passport – an order made earlier in these proceedings to secure the husband’s compliance.
As explained in the reasons delivered on 31 July 2017, allowing the husband a two year period to remedy his contraventions, gave effect to the principle that imposition of penalties should be directed primarily to securing compliance with orders of the Court (see reasons for judgment delivered on 31 July 2017 at
[65]-[87]).
Husband’s failure to remedy contraventions
The husband did not remedy his contraventions of orders in the two year period following 31 July 2017. As is reflected in the reasons for judgment delivered on 1 August 2019,[3] the husband had paid only meagre amounts, less than about $1,000 in total, in that two year period such that the total owing had ballooned to about $520,000, taking into account interest and the husband’s further and continuing obligations to pay ordered child support which had been unmet in that period. As is also reflected in the reasons for judgment delivered on 1 August 2019, the husband had made no meaningful or substantial payment despite having received, on his own evidence, income in the order of $170,000 which was not liable to any tax, due to accumulated losses.
[3]Cluny & Skinner [2019] FamCA 519.
As is also noted in the 1 August 2019 reasons, it can be seen that one factor taken into account in favour of the husband as to the imposition of the sanction for contravention, was the husband’s consent to meeting the wife’s substantial costs incurred in successfully pursuing the contempt and contravention proceedings, on an indemnity basis, in the fixed amount of $91,664. That amount was also the subject of orders made on 31 July 2017. Of course, the fact that this sum, together with interest upon it as ordered, has not in fact been paid has the dual consequence that, first, the husband is in further breach of orders of the Court and, second, the process of imposing a sanction has relied, at least in part, on a consideration which has proven to be illusory in practical terms in that the order remains executory due to the husband’s non-compliance.
On 1 August 2019, I was not satisfied that the husband had shown sufficient cause as to why the subject sentence of imprisonment ought not come into effect, and that sentence was imposed. However, conscious that the husband was
self-represented and, as is recorded in the reasons for judgment delivered on 1 August 2019 (at [43]-[46]), I considered it appropriate to temporarily stay the operation of the orders for a period of fourteen (14) days so as to enable the husband to make a formal application for a stay of those orders pending the husband’s appeal from my determination. In exchanges with the husband in the hearing on 1 August 2019, I had pointed out to the husband his right to appeal and, as a consequence of those exchanges, he had foreshadowed an intention to appeal. I adjourned the proceedings to Friday 16 August 2019 for the purpose of considering the husband’s foreshadowed formal application for a stay of orders pending an appeal.
Husband’s Application in a Case filed by leave on 16 August 2019
In the event, the husband did not file any application for a stay pending an appeal. The only document filed by or on behalf of the husband in the 14 day period referred to was a Notice of Address for Service by his current solicitors, obviously recently retained by the husband. Those solicitors instructed counsel retained by the husband at the hearing on 16 August 2019. The wife’s solicitor, Ms Feeney, again appeared for the wife.
At the hearing on 16 August 2019, the husband’s counsel advised that the husband had no intention of mounting any appeal, submitting to the effect that the husband acknowledged that there would be no legitimate basis for an appeal. With reference to the substantive determinations as to the findings of contraventions and the imposition of sanctions, the husband’s counsel submitted to the effect that all that is contained in the respective reasons for judgment is “accepted wholeheartedly” by the husband. Counsel for the husband further submitted that the reasons detailing the husband’s conduct “can’t be cavilled with”. Counsel expressed “surprise” that the husband was given “the indulgence of two years” – a reference to the two year provision in the 31 July 2017 orders, for the husband to remedy his contraventions.
Rather than an application for a stay pending appeal, the husband’s counsel sought leave to file an Application in a Case and an affidavit of the husband together with his Financial Statement. The wife did not oppose leave and it was granted.
By his Application in a Case, the husband seeks a continuation of the stay of the order for his imprisonment conditional upon the husband paying to the wife $25,000 within seven days of orders and then $6,000 per month (commencing October 2019) “until such time as the sum of $521,151.90 has been paid to [the wife]”. The orders sought include an order that the husband pay the wife’s indemnity costs fixed in the amount of $3,500 in respect of the hearing on 16 August 2019. The proposed notation to orders to be made is expressed in the following terms:
Notation:
A.It is noted that the Respondent accepts that upon default of any payment under Order 1, a warrant will issue for his arrest such that he will then serve the period of imprisonment ordered on 2 August 2019.
(Emphasis in original)
The reference to payment “under Order 1” is a reference to the proposed payments of the initial sum of $25,000 and then $6,000 per month. The reference to the order of “2 August 2019” is in fact a reference to the order made on 1 August 2019 which was amended on 2 August 2019. Self-evidently, ignoring interest and the husband’s continuing obligation to pay ordered child support, it would take the husband about seven (7) years or so from now to pay only the capital amount now owing to the wife, at the rate of $6,000 per month. I reiterate that this notional period ignores the husband’s liability to pay interest and the ongoing requirement that he pay child support.
In order for me to reflect upon and consider the husband’s application I ordered, on 16 August 2019, an extension of the stay pending delivery of judgment today. Conditions of that extension were imposed by orders requiring payment by the husband of the initial total sum he proposed of $25,000, plus the wife’s indemnity costs of $3,500 the husband agreed to pay. I assume that at least those ordered payments have been made by today.
The wife’s position
The wife prosecuted the contravention proceedings (as she did the contempt proceedings) to their conclusion. With respect to the contravention proceedings and the sanction imposed, it is legitimate to have some regard to the wife’s wishes, given that the orders the subject of the contravention proceedings are effectively for her benefit, in the face of the husband’s current application. However, consideration of the wife’s position is to be balanced against public policy considerations including maintaining the authority of the Court’s orders and the due administration of justice, which may be undermined by
non-observance of orders being disregarded with impunity. It is fundamentally important to recognise that in this case a sanction has already been determined and imposed for the husband’s contraventions of orders. There has been no challenge on appeal to that determination or the imposition of the sanction, and the husband now confirms there will not be any challenge on appeal to the determination on 1 August 2019 that he failed to show cause as to why the sanction of imprisonment ought not now come into effect.
The competing considerations as to public and private interests, and the principles involved and the various authorities which have considered these questions, were analysed in detail by the Full Court in Kendling and Anor & Kendling (Contempt) (2008) FLC 93-384 (“Kendling”). Whilst Kendling dealt with a case concerning contempt under s 112AP of the Act, and the sentences of imprisonment imposed for contempt where the parties had subsequently reached an agreement including as to the allowance of an appeal by the husband from orders imposing those sentences, I do not understand there to be any substantial difference in the approach to the considerations referred to, concerning “contraventions” of orders as opposed to breaches amounting to a “contempt” within the meaning of the Act. In Kendling, amongst the many authorities referred to and discussed, is the High Court’s decision in Witham vHolloway (1995) 183 CLR 525. At [60] a lengthy extract is quoted from the judgment of Brennan, Deane, Toohey and Gaudron JJ in that case and that quotation relevantly includes the following:
…
Nor can the dichotomy between proceedings in the public interest and proceedings in the interest of the individual be maintained on the basis that some cases involve an interference with the administration of justice and others merely involve an interference with individual rights. All orders, whether they be Mareva injunctions, injunctions relating to the subject matter of the suit, or, simply, procedural orders, are made in the interests of justice. Non-compliance necessarily constitutes an interference with the administration of justice even if the position can be remedied as between the parties.
…
And as already indicated, proceedings for breach of an order or undertaking have the effect of vindicating judicial authority as well as a remedial or coercive effect. Indeed, if the person in breach refuses to remedy the position, as is not unknown, their only effect will be the vindication of judicial authority. Given that purpose or object cannot readily be disentangled from effect and given, also, that a penal or disciplinary jurisdiction may be called into play in proceedings alleging breach of an order or undertaking, it is necessary to acknowledge, as it was in Mudginberri, that punitive and remedial objects are, in the words of Salmon LJ “inextricably intermixed”.
…
(Emphasis in original)
In Kendling, even where the wife had reached agreement with the husband incorporating her support of his appeal from the orders imposing sanctions for his contempt, the Full Court emphasised the need for the Court to make an independent assessment of the appeal, irrespective of the wife’s position. At [73] the Full Court concluded, after its lengthy discussion of authority:
73.Given the trial Judge’s findings, the matter had in our view gone beyond being purely inter partes, to the extent that it ever was. The wife having successfully invoked the Court’s powers pursuant to s 112AP, and the Court having imposed custodial sentences upon the husband in reliance upon findings made beyond reasonable doubt, we are not persuaded that it would be appropriate to grant the relief sought by the husband simply because the parties jointly request that we do so, or because one party concedes that we should do as the other party asks. In our view, so doing would have the potential to undermine the authority of the Court. Accordingly, we will proceed to consider the husband’s appeal, which was fully agitated before us, and determine the appropriate course to take in the light of our conclusions in that regard.
(Emphasis in original)
It can therefore be seen that even if the wife here had agreed to what the husband is now proposing via his application, that would not have determinative effect. The Court having imposed a sanction, the matter had moved past a purely inter partes dispute. In the event, though, the wife’s position here is far from being one of agreement to what the husband now proposes in his application.
The wife’s starting point, as per the submissions of her solicitor, is that she does not accept or believe anything that the husband has to say or volunteers. With respect to the wife, that is an understandable position given the history of this matter. I have, in the various reasons for judgment delivered, made adverse findings concerning the husband and his credit, which need not be restated here in full.
Simply stated, the submissions on behalf of the wife were to the effect that the husband is not to be trusted or believed about any proposal he might advance. This mirrors the wife’s position in July 2017 when she opposed the husband being granted a period of two (2) years in which to remedy his contraventions on the basis of her rejection then that the husband would remedy his contraventions as he promised to do. She has been proven to be correct about that.
The wife, whilst maintaining her opposition to any further stay being granted, submitted that if the Court were to entertain any further stay, at the very least the husband ought to be obliged to meet his ongoing obligation to pay child support of $665 per week, or $2,660 per month, in addition to his proposed payment of $6,000 per month. However, counsel for the husband submitted on his behalf that it would be futile for the husband to agree to, or commit to, that additional amount at this stage as a condition.
Counsel for the husband submitted that the husband would be willing to make ongoing or periodic disclosure of financial statements for the various entities with which he is associated with a view to increasing the $6,000 monthly amount. That submission was made notwithstanding that the husband’s evidence is that he holds only directorships, and not shareholdings, in the relevant entities and there is no direct evidence from any of those entities to the effect that any would voluntarily provide financial information. That aside, the wife rejected the proposition that it ought be encumbent upon her to periodically review financial statements with a view to bringing proceedings back to Court, yet again. The wife contended that in the event the Court acceded to the husband’s application the default provision ought be that if the husband fails to make a relevant payment, the wife simply files an affidavit confirming that for the sentence of imprisonment to take immediate effect.
Fundamentally, adoption of the husband’s current proposal is opposed by the wife and would amount to a substantial variation of the determination that was reached on 31 July 2017, as reflected in the orders then made, as to the sanction to be imposed for the husband’s contraventions. That is so when there has been no appeal from those orders or that determination.
Resolution
Counsel for the husband contended that this Court always has the power to vary its orders, but that broad submission was not supported by reference to any particular provision of the Act or any authority with respect to orders imposing a sanction for contraventions.
Section 112AK is the statutory provision which provides for the variation and discharge of orders made under s 112AD. Whilst that section can then be seen to provide the power to vary or discharge such an order, it does not prescribe the considerations necessary for that power to be invoked and I have not identified any authoritative judicial pronouncements upon the interpretation or operation of that section. No authorities were brought to my attention during argument. I would adopt the approach that the power conferred by s 112AK must be exercised judicially with the relevant criterion being the justice of the case. In other words there must be some feature of the case which renders it necessary, in the interests of justice, for an order under s 112AD to be varied or discharged. An obvious example where the section would be seen to appropriately operate is where, a sanction having been imposed for contravention of orders, the contravention is completely or substantially remedied or redressed. That is not this case. Had the husband substantially remedied his contraventions in the two year period provided for in the 31 July 2017 orders, or at least could be seen to have made some real attempt to so do, the husband might well have been able to argue for a variation or discharge of the order. However, that has not occurred.
Following a contested trial conducted over several days, the husband was, on 28 April 2017, found to have contravened orders in a prolonged and contumelious manner having the consequence of depriving the wife and the parties’ child of substantial total amounts of the financial orders, the subject of the contraventions.
There has been no appeal from the findings made as to the nature and extent of the husband’s contraventions of orders or the circumstances in which they occurred. Indeed as will be referred to, the husband has acknowledged his conduct as found.
After a further hearing directed solely to the question of sanction, the Court determined, on 31 July 2017, that the appropriate sanction for the husband’s contraventions is a term of three (3) months imprisonment. There has been no appeal from that determination.
Primacy was given to the objective of securing compliance with the contravened orders by the allowance of the substantial period of two (2) years from 31 July 2017 for the husband to remedy his non-compliance. However, plainly that objective was not achieved. Indeed, the husband’s breaches of orders for the payment of ongoing child support, for example, have continued.
The reasons delivered on 1 August 2019 reflect the conclusion that the husband had made no real attempt to remedy his non-compliance notwithstanding having at least some capacity to do so on his own evidence. Indeed, at paragraph 10 of his current affidavit filed by leave on 16 August 2019, the husband effectively admits to having had the capacity to make further payments to the wife over the past two years which he simply did not make.
At paragraphs 9 and 10 of his affidavit filed by leave on 16 August 2019 the husband deposes (with reference to his application to pay $25,000 and then $6,000 per month):
9.It is now clear to me that I should have undertaken the course of action that this proposal represents long ago, but I do caveat that statement as follows. I have only been recently earning an income that would allow me [sic] pay the amount contemplated in this proposal, and I explain in some detail below how my income is produced and why my income is higher this year than it has been previously.
10.Although the payments I could have made over the last two years would have been much smaller than my current proposal because of my circumstances during that time, I acknowledge that I could have made greater payments than I did.
I find it incredible for the husband to assert that it is “now clear” to him that he ought to have taken action “long ago”. It must have been crystal clear to him that he was sanctioned on 31 July 2017 when that occurred. Equally, it must have been crystal clear, given the contest about the issue, that he was afforded the significant indulgence of being given an opportunity to avoid imprisonment by action taken over the following two (2) years. He has done nothing to avoid the sanction coming into operative effect.
It bears emphasis, as I sought to emphasise in the reasons for judgment delivered on 1 August 2019, that the sanction was imposed on 31 July 2017 for the husband’s antecedent contraventions of orders. The husband is not being sanctioned now for his failure to remedy them in the period since. However, his failure to make any meaningful attempt to remedy his contraventions, despite having an acknowledged capacity to make some better attempt, is plainly of central relevance to the husband’s current application to stay the sanction or vary it.
In my judgment, the orders of 31 July 2017 made by way of sanction for contraventions of orders struck an appropriate balance between, on the one hand, securing compliance with the orders of the Court and, on the other hand, vindicating judicial authority. Indeed, the allowance of the two year period for the husband to remedy his non-compliance, described by the husband’s counsel now, probably aptly, as a surprising indulgence, gave primacy to the former. However, the abject failure of the husband to make any meaningful attempt to remedy his non-compliance in that two year period has, in my opinion, a transformative effect. By a meaningful attempt, I refer to not the amount or degree to which the husband might have remedied his non-compliance, but more specifically to whether he exhausted his capacity and made every effort to attempt to remedy his non-compliance. Clearly he has not done so. By transformative effect, I mean that the position has now been reached in this case, in my judgment, that the vindication of judicial authority must be given appropriate emphasis.
On 1 August 2019, the Court determined that the husband had not shown cause as to why his sentence of imprisonment should not be brought into effect. The Court is now advised by the husband’s counsel, and via the husband’s affidavit filed in support of this application, that the husband does not intend to challenge the determination that he has not shown cause. Indeed, it can be seen that the husband’s affidavit contains significant admissions as to his conduct concerning the contravention proceedings, including his acknowledgement in paragraph 1 (under the heading “[b]ackground”) of his 16 August 2019 affidavit:
I accept that my conduct has been nothing short of contemptuous…
In all of the circumstances, I am unable to see how the husband’s current application can be viewed as anything other than his attempt to re-visit the determination of sanction made on 31 July 2017, for the reasons then given. The reality of the husband’s current application is that in addition to the two (2) year period allowed for in the orders made on 31 July 2017 for the husband to remedy his non-compliance, the husband ought now have many more additional years to do so, albeit on the basis that he maintains the schedule of payments proposed by him, in circumstances where he has made no meaningful efforts over the past two years to remedy his contraventions; nor to meet his ongoing obligation to pay ordered child support.
I am not satisfied that, in these circumstances, there is any legitimate basis for me to stay the orders for sanction already imposed. The circumstances in which a stay of orders involving imprisonment can legitimately be granted are constrained.[4]
[4]Tate and Tate (No 4) (2003) FLC 93-139.
In my judgment, even assuming the power under s 112AK is available to vary or discharge earlier orders, then nothing the husband advances on this application establishes any legitimate basis for that power to be exercised in the husband’s favour.
For these reasons the husband’s Application in a Case is dismissed and I otherwise make the orders set out at the commencement of these reasons for judgment.
I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 23 August 2019.
Associate:
Date: 23 August 2019
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