Cluny & Skinner

[2017] FamCA 255

FAMILY COURT OF AUSTRALIA

CLUNY & SKINNER [2017] FamCA 255

FAMILY LAW – CONTEMPT – where it is alleged that the husband contravened the terms of an order in a manner which involves a flagrant challenge to the authority of the Court –  where the order required the husband to “hand his passport” to the wife’s solicitors “only to be released by consent of the parties or by an order” of the Court – where the husband provided the wife's solicitors with his passport – where the husband subsequently applied to the Department of Foreign Affairs and Trade for a replacement passport –where the husband falsely declared to the department that he had lost his passport – where the husband subsequently failed to deliver his new passport to the wife's solicitors – where the husband subsequently travelled internationally over a long time – where it is alleged that the husband’s conduct amounts to contempt – where the husband admits the conduct – where the husband asserts that in delivering his passport to the wife’s solicitors he complied with the terms of the order and his subsequent conduct does not amount to a breach of the order – where the husband’s application for, and failure to deposit with the wife’s solicitor, his second passport is found to be contemptuous – where further hearing to occur to determine sanction.

FAMILY LAW – CONTRAVENTION – where the husband was previously ordered to make various cash payments to the wife including by way of child support, spouse maintenance, lump sum arrears and costs – where the husband failed to meet these payments – where in excess of $250,000 remains unpaid – where the husband admits to failing to make the payments – where the husband contends he has a reasonable excuse – where the husband contends his impecuniosity is a reasonable excuse – where adverse credit findings are made – where the husband has failed to establish that he is impecunious – where it is found that the husband contravened the orders without reasonable excuse – further hearing to occur to determine penalty.

Australian Passports Act 2005 (Cth)
Child Support (Assessment) Act 1989 (Cth)
Family Law Act 1975 (Cth)

Family Law Rules 2004 (Cth)

Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (in liquidation) (2007) 161 FCR 513
Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483
Blair & Ors & Perpetual Trustee Co Ltd v Curran (1939) 62 CLR 464
Bryant and Bryant (1996) FLC 92-690
Ganem & Ganem (No. 2) [2013] FamCA 257
Gilmour and Gilmour (1995) FLC 92-591
Gyselman and Gyselman (1992) FLC 92-279
Iberian Trust, Ltd v Founders Trust and Investment Company, Ltd [1932] 2 KB 87
ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 Jackson v Goldsmith (1950) 81 CLR 446
Liesert v Nutsch (1996) FLC 92-665
Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589
Queensland Trustees Ltd & Ors v Commissioner of Stamp Duties (Q) (1956) 96 CLR 131
Ramsay v Pigram (1968) 118 CLR 271
Redland Bricks Ltd. v Morris [1970] AC 652
Redwing Ltd v Redwing Forest Products Ltd (1947) 177 LT Rep 387
Sahari and Sahari (1976) FLC 90-086
Tate and Tate (2002) FLC 93-107
Universal Music Australia Pty Ltd v Sharman Networks Ltd (2006) 150 FCR 110
Wild v Ballard (1997) FLC 92-771
Witham v Holloway (1995) 183 CLR 525

APPLICANT: Ms Cluny

RESPONDENT:	Mr Skinner
FILE NUMBER:	BRC	812	of		2010

DATE DELIVERED: 28 April 2017

PLACE DELIVERED: Brisbane

PLACE HEARD: Brisbane

JUDGMENT OF: Kent J

HEARING DATE: 16, 17 and 18 September 2015

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Minnery

SOLICITOR FOR THE APPLICANT: Anthony Black Family Law Service

COUNSEL FOR THE RESPONDENT: Mr S Williams

SOLICITOR FOR THE RESPONDENT: Barry.Nilsson

Orders

1. Each of the wife’s:

   (a)       Amended Application-Contempt filed 24 August 2015; and

   (b)       Application-Contravention filed 25 August 2015;

   be adjourned for mention before his Honour Justice Kent at 9.30 am on 29 May 2017 for the making of directions with respect to the filing of evidence and submissions, and the fixing of a further hearing date, for the hearing and determination of any sanctions to be imposed. 

2. That the orders sought by the husband in his Amended Response to an Application in a Case filed 5 August 2015 with respect to his passport be adjourned to be determined in conjunction with the hearing and determination referred to in paragraph (1) of these Orders.

3. Pursuant to r 20.07(a) of the Family Law Rules 2004 (Cth) (“the Rules”) IT IS DECLARED that the total amount owing by MR SKINNER to MS CLUNY pursuant to the Orders of this Honourable Court made on 16 April 2013 is as follows:

   (a) Order (2) – $76,867.55 to 20 August 2015 plus interest thereafter calculated in accordance with s 117B of the Family Law Act 1975 (Cth) (“the Act”) and the Rules on any part of that capital sum remaining unpaid from 20 August 2015;

   (b) Order (3) – $14,369.32 to 20 August 2015 plus interest thereafter calculated in accordance with s 117B of the Act and the Rules on any part of that capital sum remaining unpaid from 20 August 2015;

   (c)       Order (5) – $32,200;

   (d) Order (6) – $37,739.34 to 20 August 2015 plus interest thereafter calculated in accordance with s 117B of the Act and the Rules on any part of that capital sum remaining unpaid from 20 August 2015;

   (e) Order (7) – $91,947.57 plus interest thereafter calculated in accordance with s 117B of the Act and the Rules on any part of that capital sum remaining unpaid from 20 August 2015;

   (f)       Order (8) – $2,931.74.

4. Other than with respect to orders sought by the husband in relation to the return of his passport to be dealt with at the further hearing provided for by these Orders, all other orders sought by the husband in any pending application or response filed by him (other than parenting orders applications) be dismissed.

5. All applications for costs of and incidental to any of the proceedings the subject of these Orders be heard and determined in conjunction with the determination referred to in paragraph (1) of these Orders.

6. All other outstanding applications, other than parenting orders applications, be otherwise dismissed.

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 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

1. Mr Skinner (“the husband”) and Ms Cluny (“the wife”) married in 2008, separated on 20 September 2009 and divorced on 22 January 2011.  Their marriage produced a child, B born in 2009.

2. The extensive and prolonged litigation the parties have engaged in following their final separation after a relatively short-lived relationship has produced numerous orders, two of which are the central focus of the present proceedings.

3. On 29 November 2012 Bell J made final property settlement orders together with other orders including an injunction in these terms at paragraph 7:

   7.The Husband forthwith to hand his passport over to the Respondent Wife’s Solicitors, Hirst & Co, to be placed in their safe custody, to only be released by consent of the parties or by an Order of this Honourable Court on the giving of forty-eight (48) hours notice.

4. That injunction is the focus of the wife’s Amended Application-Contempt filed on 24 August 2015 seeking to have the husband dealt with for contempt pursuant to s 112AP (within Part XIIIB) of the Family Law Act 1975 (Cth) (“the Act”) (“the contempt application”).

5. Whilst the details of the alleged contempt are discussed more fully below, suffice to note here that having surrendered his passport to Hirst & Co, the husband subsequently falsely represented to the Department of Foreign Affairs and Trade (“DFAT”) that he had lost his passport, in order to secure for himself a replacement passport, which he thereafter received and retained and used for international travel over an extended period.  The wife contends, in summary, that the husband’s conduct constitutes contempt.  The husband contends, in summary, that having strictly complied with the injunction by handing his passport over to the solicitors, his subsequent conduct was not captured by, and was thus not in breach of, the injunction and thus cannot found the charge of contempt.

6. On 16 April 2013 Bell J made a number of orders (Orders (2), (3), (5), (6), (7) and (8)) requiring various payments by the husband of, inter alia, weekly child support; a lump sum payment by way of retrospective child support; weekly spousal maintenance payments; a lump sum by way of retrospective spousal maintenance; a lump sum for arrears of previously ordered payments plus interest and other orders by way of enforcement of earlier orders pursuant to s 105 of the Act.

7. The 16 April 2013 orders are the subject of the wife’s Application-Contravention filed on 25 August 2015 pursuant to Part XIIIA of the Act (“the contravention application”). Those orders are also the central focus of:

   a)The wife’s Amended Application in a Case filed on 24 August 2015 for a declaration of moneys owing by the husband, together with injunctive relief; and

   b)The husband’s application for orders via his Amended Response to an Application in a Case filed on 5 August 2015 for, inter alia, departure orders pursuant to the Child Support (Assessment) Act 1989 (Cth) (“the CSAA”) to operate retrospectively; the retrospective discharge of child support orders previously made; and the retrospective discharge of orders for spousal maintenance.

8. The trial of these contested applications was heard over the three days of 16, 17 and 18 September 2015.  I record that in circumstances of my unfortunate and regrettable delay in delivering these reasons for judgment, for which I record my unreserved apology to both parties, that the credit findings recorded in these reasons derive from my contemporaneous notes of the evidence given at the trial.  Whilst my delay has necessitated my re-reading of the affidavit evidence and the transcript of the trial, the reading of the transcript has allowed some transcript references to be included in these reasons as a point of reference to matters noted by me about the evidence at trial, or my noted views of that evidence formed at the time. 

Some preliminary and procedural matters

1. A miscellany of procedural or preliminary matters related to one or other of the applications for orders referred to, or as to the evidence in the trial, was resolved at the outset of the trial or in advance of oral evidence being taken.  These included, in no particular sequence or order of priority:

   a)The procedure prescribed by r 21.08 of the Family Law Rules 2004 (Cth) (“the Rules”) being followed in respect of each of the contempt application and the contravention application;

   b)An order being made on 16 September 2015 dismissing the husband’s oral application for dismissal of the contravention application on the husband’s contention of there being no prima facie case, for reasons then delivered extemporaneously;

   c)The husband placing on the record his admission of the allegations in respect of the contravention application and that the wife establishes a prima facie case on the contravention application;[1]

   d)The husband recording his response to the contravention application in terms of his having a “reasonable excuse for contravening an order” within the meaning of Part XIIIA stated, in summary, as being that the husband was financially incapable of complying;

   e)It being confirmed on behalf of the husband that the wife was not required for cross-examination as regards her evidence in support of the contempt application;[2]

   f)The husband stating his response to the contempt application as it being denied by him;[3]

   g)It being confirmed on behalf of the wife that each of the witnesses OO, PP and NN relied upon by the husband in his case were not required by the wife for cross-examination;

   h)That each of the husband and wife respectively, when called to give oral evidence and be cross-examined, would do so in respect of all applications – that is, there would be no separation or instalments of the oral evidence given discretely in respect of any particular application;

   i)With respect to those orders contained in the husband’s Amended Response to an Application in a Case comprising orders being made pursuant to s 79A(1A) of the Act to vary, with the consent of the parties, the property settlement orders made on 29 November 2012, by way of a superannuation splitting order in respect of the husband’s superannuation in favour of the wife pursuant to s 90MT(1)(b) of the Act; that both parties acknowledged such an order was not able to be made by the Court without the consent of both parties. That is, that because the wife refused to consent to that order, it was not open to the Court to make any order as sought pursuant to s 79A(1A) of the Act;

   j)The wife was given leave to amend paragraph 15(e) of her Amended Application in a Case filed on 24 August 2015 to alter the sum there claimed to the amount of $91,947.57;

   k)It being confirmed by the Court and with the parties, that if contempt or contravention was established that there would need to be a separate and subsequent hearing to consider the question of any relevant sanction or penalty to be imposed as a result. 

   [1] Transcript, 16 September 2015, p. 19 l. 35 and p. 20 l. 40.

   [2] Transcript, 16 September 2015, p. 24.

   [3] Transcript, 16 September 2015, p. 25.

2. I would add that as the trial progressed the only witness in the husband’s case ultimately required for cross-examination was the husband himself, and likewise the wife was the only witness in her case who was required for

   
   

   cross-examination.

The contempt application

1. It is uncontroversial that in conjunction with s 35, s 112AP is the source of power for Courts exercising jurisdiction under the Act to deal with contempt. Section 35, by its terms, must be read subject to s 112AP so that s 35 does not have the effect of extending the limitations imposed by s 112AP. Further, subject to the terms of these sections the general law of contempt applies.

2. It is likewise uncontroversial that since the decision of the High Court in Witham v Holloway[4] charges of contempt in Australia must be proved beyond reasonable doubt[5] and that approach was confirmed by the Full Court of this Court in Tate and Tate.[6]

   [4] (1995) 183 CLR 525.

   [5] Per Brennan, Deane, Toohey and Gaudron JJ at 534 and McHugh J at 535.

   [6] (2002) FLC 93-107.

3. It bears some emphasis that in a case such as the present, where the contest lies not so much as to the facts of what occurred subsequent to the making of the subject injunction as regards to the husband’s conduct (which as will be discussed are essentially not in issue), but as to whether the terms of the injunction captured that conduct, it is the facts which must be proved beyond reasonable doubt.  That is, the domestic law and its proper application to establish facts is not a matter for proof or disproof.  The proper construction of an order or injunction is not a matter of fact but a question of law (per Branson J with whom Lindgren J substantially agreed and Finkelstein J agreed) in Universal Music Australia Pty Ltd v Sharman Networks Ltd (“Universal”).[7]

   [7] (2006) 150 FCR 110.

4. Section 112AP of the Act provides:

   (1)      Subject to subsection (1A), this section applies to a contempt of a

   court that:

   (a)does not constitute a contravention of an order under this Act; or

   (b)constitutes a contravention of an order under this Act and involves a flagrant challenge to the authority of the court.

5. Obviously enough the wife’s application relies upon subsection (b) of this section. 

6. Section 112AB of the Act provides:

   (1)      A person shall be taken for the purposes of this Part to have                 contravened an order under this Act if, and only if:

   (a)      where the person is bound by the order–he or she   has:

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

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

   (b)      in any other case–he or she has:

   (i)       intentionally prevented compliance with the   order by a person who is bound by it; or

   (ii)      aided or abetted a contravention of the order   by a person who is bound by it.

7. The meaning of “order under this Act” is a term defined under s 112AA.  There is no suggestion that the subject order was not an “order under this Act” within the meaning of that definition. 

8. Section 112AC provides for the meaning of “reasonable excuse for contravening an order” for the purposes of the division. That section provides:

   (1)The circumstances in which a person may be taken to have had, for the purposes of this Part, a reasonable excuse for contravening an order under this Act include, but are not limited to, the circumstances set out in subsection (2).

   (2)      A person (in this subsection called the respondent) shall be taken to     have had a reasonable excuse for contravening an order under this   Act 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.

9. The application of the principles and the procedure to be applied with respect to s 112AP were articulated by Aldridge J in Ganem & Ganem (No. 2)[8] and I respectfully adopt his Honour’s formulation as follows:

   [8] [2013] FamCA 257.

   PRINCIPLES AND PROCEDURE TO BE APPLIED

   9.I take the principles and procedure to be applied to derive from the sections set out above, the general law and Rule 21.08 of the Family Law Rules.

   10.Contempt pursuant to section 112AP is a criminal proceeding and accordingly each element of each charge must be proven beyond reasonable doubt. (In the Marriage of Tate (2002) 29 Fam LR 195;(2002) FLC 93-107)

   11.Contempt under section 112AP has four elements each of which must be proven beyond a reasonable doubt. The first three involve the acts and intentions of the respondent. The fourth is a finding to be made by the trial judge. These four elements are:

   ·The respondent knew the terms of the orders. (Mead and Mead (2006) FLC 93-267 at 80, 536)

   ·The respondent deliberately did an act. The act must be wilful and deliberate as opposed to accidental or inadvertent. (In the Marriage of English (1986) FLC 91-729 at 75, 294)

   ·The act must be intentional. This is not to say that the respondent must intend that the act was in breach of the order, which would make the respondent’s actions contumacious, but the respondent must have intend[ed] to do the act which is alleged to be the contempt. In the Marriage of English, above.

   ·The act must involve a flagrant challenge to the authority of the court. In Bande and Cade 45 FAM LR 376 at 39 the Full Court said:

   The concept of a “flagrant challenge” involves conduct of an exceptional, striking or repeated nature. In Ibbotson and Wincen (1965) [sic] 18 Fam LR 164; (1994) FLC 92 – 496 the Full Court held (at Fam LR 175; FLR 81, 162): “the use of the term “flagrant challenge” … is intended to underline the exceptional or striking nature of the contravention in question and thus to differentiate it from what might be described as a general run of breaches which are intended to be dealt with under section 112AD … it is a question of fact and degree whether the stringent terms of the section are satisfied.

Proved facts

1. On the evidence the following facts established on the wife’s evidence of them, including documentary evidence, many of which were not put in issue by the husband and in fact are the subject of admissions by the husband in his affidavit or oral evidence at trial are, I find, proved beyond reasonable doubt.

2. On and from the making of Order (7) on 29 November 2012 the husband:

   a)Had knowledge of the making of that order; and

   b)Knew that under the terms of that order that once he had handed over his passport in accordance with its terms, in order to obtain his passport he had to either obtain the wife’s consent to its release to him or to obtain a further order of the Court.[9]  

   [9] Transcript, 16 September 2015, p. 30.

3. The husband handed his passport over to the wife’s solicitors pursuant to Order (7) following the making of that order.

4. On 7 January 2013 the husband:

   a)Made a written passport application to DFAT for the issue of a replacement passport declaring for that purpose, inter alia, that the passport (which he had in fact handed to the wife’s solicitors) was lost;

   b)Made a separate declaration to DFAT declaring “I have misplaced my passport and cannot locate it”;

   c)Made those declarations knowing each of them to be false;

   d)Declared in his separate declaration that all of the information contained in it was correct and that he was aware that the penalty for making a false or misleading statement either in writing or orally to obtain an Australian travel document is $110,000 or 10 years imprisonment, or both.[10]

   [10] Annexure “JLC-3” to the wife’s affidavit filed 25 August 2015 and Transcript, 16 September 2015, p. 31 l. 40.

5. On or about 8 January 2013 the husband was informed by correspondence from DFAT to the effect that:

   a)His application for a replacement passport had been successful;

   b)His previous passport had been cancelled;

   c)Should he recover his previous passport DFAT may demand its surrender.[11]

   [11] Annexure “JLC-4” to the wife’s affidavit filed 25 August 2015.

6. On or about 8 January 2013 the husband received and thereafter retained his passport and used it to travel internationally on multiple occasions over the period from then until about April 2015.[12]

   [12] Husband’s affidavit filed 16 September 2015.

7. In a recorded interview with DFAT investigative officers conducted at the Brisbane Passport Office on 16 January 2014 the husband admitted, inter alia:

   a)That he knew of and understood the effect of the subject order of 29 November 2012 as to his passport;

   b)That the form he signed to gain a replacement passport was misleading.[13]

   [13] Annexure “JLC-31” to the wife’s affidavit filed 7 August 2015.

8. On 29 August 2014 the husband pleaded guilty to the offence “make false or misleading statements in relation to Australian travel document applications” pursuant to s 29(1) of the Australian Passports Act 2005 (Cth) (“Australian Passports Act”) in the Magistrates Court.  The order made in consequence appears as Annexure “SPL 1" to the husband’s affidavit filed on 16 September 2015.  There is no issue that despite the husband having been dealt with for this offence, it remains open for him to be dealt with for contempt of court constituted by the same facts.[14]

   [14] See Sahari and Sahari (1976) FLC 90-086.

The alleged acts of contempt

1. In summary, there are three acts of contempt on the part of the husband alleged in the wife’s application, namely:

   a)The act of applying for (and lying in the application for) a replacement passport;

   b)The husband not surrendering the replacement passport he obtained forthwith;

   c)The husband travelling overseas on multiple occasions over an extended period by using the replacement passport.

Was the husband’s conduct in breach of the subject order?

1. The answer to this question obviously depends on the proper construction of the subject order. 

2. The husband contends that a Court may only punish a breach of an injunction or order as a contempt if it is satisfied that the terms of the injunction were clear and unambiguous.  Iberian Trust, Ltd v Founders Trust and Investment Company, Ltd [1932] 2 KB 87 (“Iberian Trust Case”) and the following statement of Luxmoore J is cited in support of that proposition:[15]

   If the Court is to punish any one for not carrying out its order the order must in unambiguous terms direct what is to be done.

   [15] At 95.

3. It is further submitted that consistent with that statement in Redland Bricks Ltd. v Morris [1970] AC 652 it was stated by Lord Upjohn (with whom Lords Reid, Morris, Hodson and Diplock agreed) as but one of a number of principles for the grant of a mandatory injunction:[16]

   If in the exercise of its discretion the Court decides that it is a proper case to grant a mandatory injunction, then the Court must be careful to see that the defendant knows exactly in fact what he has to do and this means not as a matter of law but as a matter of fact, so that in carrying out an order he can give his contractors the proper instructions.

   [16] At 666.

4. The husband contends that as a matter of orthodox construction of the subject injunction, the husband’s conduct by the proven facts referred to cannot found an application for contempt.  It is submitted, first, that the injunction is expressed in unambiguous terms directing the husband to “hand his passport over” to the wife’s solicitors.  It is thus contended that the injunction required the doing of a single act by the husband and there is no issue that the husband did other than comply with that requirement.  It is thus submitted that once that act was performed the order was satisfied and the “strict letter of the order” was complied with.

5. It is thus submitted that the husband’s subsequent conduct was not captured by the terms of the injunction.  It is submitted that there was no express prohibition by the terms of the injunction prohibiting the husband from applying for and obtaining a replacement passport; or from departing the Commonwealth.  It is thus submitted that whilst the husband’s conduct may have breached the “spirit” of the order, that is not the focal enquiry and does not ground a finding of contempt.  The husband refers in his written submissions to authorities said to demonstrate the distinction between breach of the “spirit of an order” and an actual breach of an order.[17]

   [17] Mulvaney Holdings Pty Ltd v Thorne & Ors [2012] QSC 247 unreported per McMeekin J and E Auctioneers & Awle & Anor [2009] FamCA 904 per Loughnan JR (as his Honour then was).

6. Reference has been made to the general law of contempt applying, subject to the relevant statutory provisions.  In a leading UK text, C.J. Miller Contempt of Court, 3rd Edition 2000[18] the following is recorded at paragraph 14.36:

   The necessity of determining whether there has been a factual breach of an order or undertaking on the part of the body or person brought before the court demands that the terms of the order itself be expressed in clear and unambiguous language.  In so far as possible that person should know with complete precision what it is they are required to do or to abstain from doing.  The requirement of clarity has been admirably stated in a leading American case, where it was said of an injunction that:

   it should be as definite, clear and precise in its terms as possible, so that there may be no reason or excuse for misunderstanding or disobeying it; and, when practicable, it should plainly indicate to the defendant all of the acts which he is restrained from doing, without calling on him for inferences or conclusions about which persons may well differ.[19]

   [18] See also Borrie & Lowe: The Law of Contempt, 4^th Edition, 2010 (UK) at 131.

   [19] Citing Collins v. Wayne Iron Works, 227 Pa. 326, 76 A.24, 25 (1910).

7. There are authorities to support the proposition that injunctions should be granted in clear and unambiguous terms which leave no room for the person to whom they are directed to wonder whether or not their future conduct falls within the scope of the injunction; and that contempt proceedings are not appropriate for the determination of questions of construction of the injunction or the aptness of the language in which it is framed.[20]

   [20] See ICI Australia Operations Pty Ltd v Trade Practices Commission (1992) 38 FCR 248 at 259 per Lockhart J and the cases there cited; and Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (in liquidation) (2007) 161 FCR 513 at [104] per Moore, Dowsett and Greenwood JJ.

8. In Redwing Ltd v Redwing Forest Products Ltd (“Redwing”)[21] a defendant in a passing off action had given certain undertakings which became embodied in an order of the court.  Jenkins J refused to attach the defendant’s directors for contempt of court because the undertakings contained in the orders were not clearly drawn and the questions of construction involved were not easy.  Jenkins J said (at 390):

   I cannot say I think that the undertakings contained in the order were clearly drawn and I cannot say I regard the questions of construction involved in them as entirely easy questions, but in my judgment, a defendant cannot be committed for contempt on the ground that upon one of two possible constructions of an undertaking being given he has broken his undertaking.  For the purpose of relief of this character I think the undertaking must be clear and the breach must be clear beyond all question.

   [21] (1947) 177 LT Rep 387.

9. In the Iberian Trust Case upon which the husband relies, the proceeding for contempt failed because the order in question had not in terms directed the alleged contemnor to do anything; it had directed an outcome rather than being directed to particular conduct. 

10. However, authority in Australia demonstrates that the need to consider the proper construction of the terms of an injunction or order, and potential ambiguity, is not necessarily a bar to contempt proceedings.  In Australian Consolidated Press Ltd v Morgan[22] Barwick CJ at 492 said:

    The appellant submitted that unless the language of the undertaking was unambiguous and certain, it should not be enforced by contempt proceedings: and sought support for the submission in Redwing Ltd v Redwing Forest Products Ltd and Iberian Trust Ltd v Founders Trust and Investment Co.  In my opinion, these authorities do not support this conclusion.  If the order or undertaking is so expressed as to be meaningless, there is of course nothing which can be enforced.  But, if it bears a meaning which the Court is satisfied is one which ought fairly to have been in the contemplation of the person to whom the order was directed or who gave the undertaking as a possible meaning, the fact that that meaning results from a process of construction and involves a choice of possible meanings does not, in my opinion, preclude the Court from enforcing the order or undertaking in the sense which the Court assigns to it.  If the Court is satisfied that the party said to be in contempt bona fide believed himself bound only by a construction which the Court thinks to be erroneous, it may for that reason, in its discretion, refuse to make an order or, if it makes an order, refuse to make an order for costs against that party.  But, even in such a case, the enforcement of the plaintiff’s rights must not be left out of account.  A party who has bona fide acted on an erroneous view of an order or undertaking may, according to the circumstances, none the less be justly adjudged guilty of contempt in procedure.  In my opinion, this is equally so where, because of its terms or circumstances, the order or undertaking requires construction in order to determine its meaning and remove ambiguities patent or latent.

    (Footnotes omitted)

    [22] (1965) 112 CLR 483.

11. In Universal Branson J undertook an extensive review of authority concerning the construction of orders and questions of ambiguity of the terms of an injunction including in the context of contempt proceedings.  As earlier noted, the other members of the Full Court of the Federal Court expressed agreement with her Honour.  At [32] of her judgment Branson J referred to the statement of Barwick CJ quoted above in Australian Consolidated Press Ltd v Morgan (supra).  At [38] Branson J stated:

    Assuming the above contention to raise an issue as to the proper construction of Order 4, the authorities discussed above reveal that an injunction is not rendered invalid, or incapable of founding a charge of contempt, merely because it leaves a respondent with room to wonder whether future conduct falls within it.  At least where the true construction of the order is one which ought fairly to have been in the contemplation of the person to whom the order was directed (see [32] above), the court which entertains the charge of contempt will be required to determine that construction.  Of course, it may be highly relevant to the question of punishment that a respondent failed to comply with the order because he, she or it placed a construction on the order that was not its true construction.

12. The terms of the subject injunction bear repeating:

    The Husband forthwith to hand his passport over to the Respondent Wife’s Solicitors, Hirst & Co, to be placed in their safe custody, to only be released by consent of the parties or by an Order of this Honourable Court on the giving of forty-eight (48) hours notice.

13. In my judgment the construction of this injunction contended for on behalf of the husband is erroneous.  If the terms of the injunction had provided only that the husband hand over his passport, and no more, the position might be different.  However, by its terms the injunction plainly provides for a continuum, specifically, the retention of the passport and expressed terms governing its release which remained operative or executory in effect by the clear terms of the injunction. 

14. On the proper construction of this injunction, read as a whole, the clear and unambiguous corollary of the obligation cast upon the husband to “hand his passport over” was that the husband not hold or retain his passport nor obtain a passport by means outside of those expressly stipulated in the order, that is, by obtaining consent or a further order of the Court for release of his passport.

15. In my judgment that this meaning ought fairly to have been in the contemplation of the husband as a possible meaning, is readily demonstrated not only given the terms of the injunction, but by the feature that the husband resorted to illegal conduct to circumvent the requirements of the injunction in order to obtain a passport to replace (and extinguish) the passport he had handed over.  Further, that the husband resorted to illegality to circumvent the injunction amply demonstrates, beyond any reasonable doubt, that this involved a flagrant challenge to the authority of the Court. 

16. As noted, the husband’s conduct resulted in the passport he had handed over being cancelled and no longer having the status of a passport capable of use as such as identified in the injunction. Section 17 of the Australian Passports Act precludes the issue of a passport to a person who has already been issued with a passport that remains current or valid.  The correspondence from DFAT earlier referred to confirms that upon issue of the replacement passport the husband’s passport that had been handed over, was cancelled.

17. Other than his contention that his conduct did not constitute a breach of the terms of the injunction, a contention I have rejected, the husband did not otherwise contend for any defence of the charge of contempt. That is, the husband did not seek to engage either s 112AB(1)(a) or s 112AC. The husband does not establish any defence.

18. In my judgment it is proved beyond reasonable doubt:

    a)That the husband knew the terms of the subject injunction;

    b)That the husband acted wilfully, deliberately and intentionally in making an application to DFAT for a replacement passport by falsely claiming that his current passport had been lost and he did not know its whereabouts;

    c)That such conduct constitutes a contravention of the subject order and involves a flagrant challenge to the authority of the Court within the meaning of s 112AP(1)(b) of the Act.

19. I therefore find contempt by the husband to be proved beyond reasonable doubt.

20. On the proper construction of the injunction the husband could not himself hold or retain a document meeting the description of “his passport”.  This the husband did by receiving and retaining the replacement passport he illegally caused to be issued to himself in January 2013.

21. In my judgment it is proved beyond reasonable doubt that knowing the terms of the subject injunction:

    a)That the husband acted wilfully, deliberately and intentionally in receiving and retaining the replacement passport he had applied for;

    b)That conduct constitutes a contravention of the subject order and involves a flagrant challenge to the authority of the Court within the meaning of s 112AP(1)(b) of the Act.

22. Thus the husband’s receipt and retention of the replacement passport constitutes contempt within the meaning of s 112AP(1)(b).

23. With respect to the final particular of contempt agitated by the wife, whilst it is clear that the subject injunction was intended to have the effect that it would prevent the husband’s travel, I do not consider that on the proper construction of the terms of the injunction, which does not expressly restrain travel, that the injunction was drawn widely enough to capture that particular conduct.  That is, however reprehensible it may be on the part of the husband to have acted contrary to the clear intent of the subject injunction, I do not consider that the proper construction of the injunction captures the husband’s conduct in travelling overseas on the multiple occasions which he did so subsequent to him obtaining the replacement passport.

24. As earlier outlined, having found the husband guilty of contempt in the respects identified, it will be necessary for there to be a discrete hearing as to the imposition of any penalty to be imposed.

The contravention application

1. On 16 April 2013 Bell J made orders as follows:

   (1)There be a departure from the administrative assessment of child support payable by the Husband to the Wife in respect of the child, [B] born on … 2009.

   (2)Pursuant to sections 117 and 118 of the Child Support (Assessment) Act (Cth), the weekly rate of child support payable by the Husband in respect of the child be fixed at $665, commencing 22 April 2013.

   (3)Pursuant to section 114(h) of the Child Support (Assessment) Act (Cth), by way of retrospective child support, for the period 1 February 2011 to 13 June 2011, the Husband shall pay to the Wife, in respect of the child, the sum of $11,970 plus interest pursuant to section 117B of the Family Law Act 1975 (Cth) and Reg 17.03 of the Family Law Rules 2004.

   (4)The Husband and Wife shall share equally in the costs of the child’s educational expenses, including but not limited to, school fees, compulsory uniforms, books and materials, excursions and

   
   

   extra-curricular activities up until the child reaches the age of 18 years of age.

   (5)By way of spousal maintenance, the Husband shall pay to the Wife, by depositing into a bank account nominated in writing by her, the sum of $350 each week commencing 22 April 2013, until either the child commences school in 2015 or the Wife commences full-time employment, whichever is the earlier date.  

   (6)By way of retrospective spousal maintenance, being for the period 20 September 2009 to 13 June 2011, the Husband shall pay to the Wife, by depositing into a bank account nominated in writing by her, the sum of $31,500 plus interest pursuant to section 117B of the Family Law Act 1975 (Cth) and Reg 17.03 of the Family Law Rules2004.

   (7)Pursuant to section 105 of the Family Law Act 1975 (Cth), the Husband pay to the Wife, arrears payable under Orders (2), (4) and (6) of the Order of Justice Murphy made 14 June 2011, being the amount of $76,321.08 plus interest, pursuant to section 117B of the Family Law Act 1975 (Cth) and Reg 17.03 of the Family Law Rules 2004, to a bank account nominated in writing by the Wife.

   (8)Pursuant to section 105 of the Family Law Act 1975 (Cth), the Husband pay to the Wife, arrears payable under Order (3) of the Order of Justice Young made 3 June 2011, plus interest payable in the amount prescribed in Order (4) of the Order of Justice Young made 3 June 2011.

   (9)The payment of Orders (3), (6), (7) and (8) hereof are to be paid by the Husband to the Wife by close of business on 31 December 2013, into a bank account nominated by the Wife in writing.

   (Emphasis as in original)

1. The wife’s contravention application alleges six acts of contravention, in summary:

   a)Bell J ordered child support to be paid (at Order (2)).  The total to 20 August 2015 that ought to have been paid is $80,465 but the amount that has actually been paid is $3,597.45, with the remaining balance being $76,867.55.  The wife thus contends that the husband has, without reasonable excuse, failed, neglected or refused to make the payments as ordered, save for the small amount referred to; 

   b)Bell J ordered that retrospective child support be paid (at Order (3)) in the amount of $11,970 plus interest.  The wife contends that the husband has without reasonable excuse, failed, neglected or refused to pay this sum; 

   c)Bell J ordered spousal maintenance to be paid (at Order (5)).  The total to 20 August 2015 that ought to have been paid is $32,200, and nothing at all has been paid.  I interpolate here that whilst the allegation in the application is that those payments were to be made to 20 August 2015 under the terms of the order, they ought to have ceased on 27 January 2015 which is the calculation provided in the affidavit of Mr RR filed 24 August 2015, relied upon in the wife’s case to reach the same amount.  The wife contends that the applicable amount of $32,200 has not been paid without reasonable excuse on the part of the husband;

   d)Bell J ordered retrospective spousal maintenance be paid (at Order (6)) in the amount of $31,500 plus interest.  The wife contends that the husband has, without reasonable excuse, failed, neglected or refused to pay this sum;

   e)Bell J ordered payment of amounts of money previously ordered by Murphy J (at Order (7)) for costs, spousal maintenance and child support in the amount of $76,321.08 plus interest.  The wife contends that the husband has, without reasonable excuse, failed, neglected or refused to pay this sum.

2. It can be seen from the terms of the orders made by Bell J that his Honour ordered payments of amounts of money previously ordered by Young J (at Order (8)) in the amount of $10,000 plus interest.  Pursuant to an order made by me following the sale of the husband’s property on or about 6 August 2015 the husband finally made a payment against this outstanding sum, leaving the sum of $2,931.74 outstanding as at 20 August 2015 comprising largely interest owed.

3. As earlier noted, with respect to the wife’s contravention application, the husband admits all of the wife’s allegations made in support of this application, but claims reasonable excuse for contravening the orders within the meaning of s 112AC of the Act. The husband asserts that his financial inability to meet the orders constitutes his reasonable excuse for his contravention of them. It can be accepted that proven financial inability to meet ordered financial obligations may be capable of constituting circumstances founding reasonable excuse.

4. As regards the total amounts calculated as being owing under the respective orders, there was little difference on the evidence relied upon by each party under the orders albeit some differences existed as to the methodology of calculation.  At paragraph 22 of his affidavit filed on 5 August 2015 the husband deposes:

   MONIES OWING TO [MS CLUNY] PURSUANT TO THE ORDERS OF 16 APRIL 2013

   22.On 10 August 2015, I will owe [Ms Cluny] pursuant to the orders of this Honourable Court of 16 April 2013 the sum of $253,563.07.  Annexed hereto and marked Annexure “SPL 5” is a breakdown of the amounts that I owe [Ms Cluny] in tabular form. 

   (Emphasis as is original)

5. For her part the wife relies upon the affidavit of her solicitor, Mr RR, deposing to his calculations of the amounts owing comprising a total owing, as at 20 August 2015 of $256,055.52.  As Mr RR was not required for cross-examination and his calculations are not otherwise the subject of challenge, given the husband’s admissions, these calculations can be accepted as accurate.  In his final submissions counsel for the husband adopted that figure.[23]

   [23] Transcript, 18 September 2015, p. 132 l. 1 – 5.

6. It can thus be readily accepted as established, and I so find, that the husband admits his failures to comply with the identified paragraphs of the 16 April 2013 orders as alleged in the wife’s contravention application, producing a combined total of $256,055.52 as particularised in the wife’s case. It follows that unless “reasonable excuse” within the meaning of s 112AC of the Act is established, then the husband will have contravened the subject orders, within the meaning of s 112AB, enlivening the Court’s power to impose sanctions as prescribed in s 112AD.

Is reasonable excuse established?

1. Obviously enough the husband’s asserted defence of “reasonable excuse”, resting as it does largely upon his evidence as to his asserted financial incapacity over a very extensive and historical period, depends in substantial part upon the husband’s credibility. Likewise, in circumstances where the husband bears the onus of proof in respect of his application for departure orders pursuant to s 114 of the CSAA from the orders made by Bell J on 16 April 2013, to operate retrospectively (discussed further below), assessment of the husband’s credibility is of integral importance.

2. The gravamen of the husband’s contention is that his financial incapacity was brought about in consequence of actions taken, or caused to be taken, by the HSBC Bank (“HSBC”) with respect to his company Skinner Pty Ltd (“SPL”), now in liquidation, which actions on the husband’s evidence commenced in late 2012.  SPL traded as an international business under the business name I Company. 

3. Those actions included, in summary:

   a)The 26 September 2012 imposition by HSBC of the requirement that SPL reduce its overdraft facility with HSBC by $850,000 in a period of seven weeks – a requirement that the husband says was met;[24]

   b)The HSBC’s 20 November 2012 freezing of SPL’s bank accounts;

   c)The 23 November 2012 appointment by HSBC of Deloitte as receivers and managers to SPL.

   [24] Paragraphs 34 and 35 of the husband’s affidavit filed 5 August 2015.

4. Whilst the husband deposes to a “partial retirement” of the receivers and managers on 30 November 2012 and SPL being “handed back to me”, the husband deposes that the consequence of HSBC’s actions was that SPL had to be placed into voluntary administration.  CC Accountants were appointed as liquidators on 10 December 2012. 

5. Relevant to what was referred to in evidence as the “HSBC litigation” (or like descriptions) the husband entered into a series of agreements with the liquidators of SPL assigning to the husband choses in action in respect of claims by SPL/the husband against HSBC and/or the receivers and managers HSBC appointed.  The relevant agreements are Annexures “SPL 10” and “SPL 11” to the husband’s affidavit. 

6. For the reasons which follow, I reject the proposition that “reasonable excuse” within the meaning of s 112AC of the Act is established. In summary, and for the reasons which will be discussed more fully below, that overall conclusion follows upon the following central features:

   a)I do not find the husband to be a credible witness nor his evidence generally to be reliable.  As earlier noted, his assertions as to reasonable excuse largely rest upon his own evidence being accepted and his evidence being found to be reliable;

   b)The evidence before me establishes, in my judgment, that the husband has elected to prioritise the payment, or its equivalent, of substantial child support for his child, T, from his previous marriage with Ms S Skinner, under voluntary arrangements with Ms Skinner not the subject of court order or any formal legally binding obligation, as his preference to meeting the obligations imposed upon him by the subject orders;

   c)The evidence establishes, in my judgment, that the husband has a demonstrated historical capacity to secure for his benefit very significant sums of money when needed and has elected to use those funds for a variety of purposes, including the payment of creditors he has elected to pay, in priority to meeting the obligations imposed upon him by the subject orders;

   d)I do not accept the husband’s explanation of, or characterisation of, substantial funds received by him or entities within his control from offshore sources. 

7. The reasons for the above conclusions as to the husband’s credit will be referred to in the course of discussing other topics as well as being separately addressed.  Before doing so, I wish to address a feature of the husband’s case concerning “reasonable excuse” that ought be addressed.

8. The husband’s written submissions emphasise the importance of “contextualising” the orders made by Bell J on 16 April 2013, and address in some detail what are asserted to be relevant circumstances at the time those orders were made.  In my judgment, when the submissions on this topic are read as a whole what is submitted to be “contextualising” those orders, is in fact an attempt to cast doubt about the legitimacy of the orders or to challenge their making in the first place, notwithstanding that there was never any appeal by the husband against those orders.  There is a similar flavour to the husband’s affidavit evidence asserting confusion on his part at the time the orders were made.  I reject the proposition that this experienced businessman with ready access to lawyers was incapable of obtaining advice on his rights if he sought to institute an appeal from Bell J’s orders. 

9. In my judgment, an important matter of “context” not referred to by the husband concerning Orders (7) and (8) of the orders made on 16 April 2013, which is also relevant to the assessment of the husband’s credit, is that those particular orders were made by way of enforcement, pursuant to s 105 of the Act, of orders made previously by each of Young J (on 10 June 2011) and Murphy J (on 14 June 2011).

10. On 10 June 2011 Young J dismissed the husband’s contravention application and ordered that the husband pay costs fixed in the sum of $10,000 to be paid within 30 days of the orders.  As the reasons delivered by Young J in support of those orders confirm, plainly the issue of costs of those proceedings was joined as between the parties and determined by that final order.  The husband was represented by his then solicitor.  It can be gleaned from the reasons for judgment delivered by Murphy J several days later on 14 June 2011 (at [69]), that at that time the husband was drawing approximately $21,000 per week from the Skinner Family Trust. 

11. In my judgment the evidence clearly establishes that the husband had the capacity to pay the costs order that was made, but elected not to do so.  Thus it was the discretion to enforce that order that was determined by Bell J as part of the orders made on 16 April 2013 at Order (8).  Again, the issue of enforcement having been joined as between the parties, Bell J determined that issue.

12. There was no appeal by the husband from the order originally made by Young J.  Nor was there any appeal by the husband from the orders made by Bell J.  Notably, as the reasons for judgment of Bell J reflect, the husband was at the time of the trial proceedings before Bell J and prior to the making of the subject orders, asserting claimed impecuniosity, an issue likewise resolved by the proceedings before Bell J.  That is, the same issue now sought to be agitated under the characterisation of “context” was raised by the husband before Bell J prior to the making of the 16 April 2013 orders.

13. Likewise, with respect to the proceedings determined by Murphy J on 14 June 2011, the issue joined before his Honour was in respect of costs (Order (6)), departure from the administrative assessment of child support and spousal maintenance. Those issues were determined by the orders made by Murphy J on 14 June 2011 for reasons his Honour delivered extemporaneously. As with the orders made by Young J, there was no appeal from the orders made by Murphy J, and it was those orders that came before Bell J for consideration of enforcement and the discretion to enforce provided by s 105 of the Act in the order Bell J made (at Order (7)) on 16 April 2013.

14. In my judgment, the attempt made on behalf of the husband in these proceedings to “contextualise” the orders made by Bell J on 16 April 2013, which is in reality an effort to re-agitate an issue raised before Bell J prior to the making of the subject orders, confronts a fundamental question of issue estoppel.

15. There cannot be any doubt that Young J rendered a final judgment with respect to costs and that the issues of fact and law his Honour decided, as expounded in his Honour’s reasons for judgment for those orders, were legally indispensable to those decisions.  Likewise that is so with respect to the costs order made by Murphy J and his determination of the question of interim spousal maintenance.  Moreover, given that the issue of impecuniosity was agitated by the husband before Bell J prior to the making of the 16 April 2013 orders, it is plain from a reading of his Honour’s judgment that the issues of fact and law his Honour decided, as expounded in his Honour’s reasons for judgment, were legally indispensable to those decisions.  In my judgment, an issue estoppel binding upon the parties in respect of those issues was thus created.[25]

    [25] See Blair & Ors & Perpetual Trustee Co Ltd v Curran (1939) 62 CLR 464 at 531 per Dixon J; Jackson v Goldsmith (1950) 81 CLR 446 at 466; Queensland Trustees Ltd & Ors v Commissioner of Stamp Duties (Q) (1956) 96 CLR 131; Ramsay v Pigram (1968) 118 CLR 271 at 276 per Barwick CJ; Port of Melbourne Authority v Anshun Pty Ltd (Anshun’s Case) (1981) 147 CLR 589 at 597 per Gibbs CJ, Mason and Aickin JJ.

16. I emphasise that the principle of issue estoppel cannot preclude the husband from challenging interim decisions or from legitimately engaging statutory causes of action, for example, s 114 of the CSAA with respect to child support departure orders. But the point to be made is that the husband’s attempt to “contextualise” Bell J’s orders in his written submissions in defence of the contravention application, extends to attempting to re-agitate concluded issues determined by final orders and judgments, absent there having been any appeal from any of them.

17. Relevant to the husband’s defence of “reasonable excuse” with respect to the orders made by Bell J on 16 April 2013, and also to the assessment of the husband’s credit, the husband’s evidence concerning his financial circumstances does not support a conclusion, with respect to the orders originally made by Young J and Murphy J respectively, other than that the husband elected not to comply with those orders over a lengthy period leading up to the subject enforcement orders made by Bell J on 16 April 2013, the subject of these proceedings.

18. In seeking to “contextualise” the reasons for judgment of Bell J of 16 April 2013, it is submitted on behalf of the husband, wrongly, that it was subsequent to the trial of the proceedings before Bell J that the husband’s company SPL was placed into receivership on 23 November 2012.  As is clear from the reasons for judgment, the trial before Bell J commenced on 3 and 4 September 2012.  As Bell J records at [13] of the reasons, the evidence in the trial was

    
     

    re-opened on 17 January 2013 pursuant to the husband’s application, which clearly post-dates the receivership. 

19. Paragraph [13] of the reasons specifically records that the husband’s company had gone into liquidation and records the husband’s submissions concerning his financial position.  The reasons also record a further re-opening of the evidence at the trial on 21 March 2013 (at [14]).  As appears from [14] to [21] and other parts of those reasons, the issue agitated by the husband as to his asserted impecuniosity was squarely raised before, and determined by, Bell J.  As has been demonstrated on the chronology outlined above, the relevant conduct of HSBC which the husband contends imperilled his financial capacity commenced in late September 2012 and liquidators were appointed to SPL in December 2012.  Those events transpired well prior to the conclusion of the trial before Bell J, and the orders of 16 April 2013, and indeed were facts upon which the husband proceeded in the re-opening before Bell J referred to.

20. The written submissions of the husband at paragraph 42 do no more than

    
    

    re-agitate issues raised before Bell J and determined by his Honour, and make some selective references to the reasons for judgment of Bell J which must be read as a whole.

21. The point is advanced in the written submissions that Bell J did not expressly make findings in relation to the husband’s credit.  When the reasons for judgment of Bell J are considered it can be seen that at [27] Bell J stated:

    It is the general practice of civil courts to not make adverse credit findings where the disposition of the case can be achieved by other means. I do not wish to displace that general proposition as the facts before me in relation to the Husband’s non-disclosure, when considered in light of the

    
    

    well-established body of case law relating to disclosure issues, allow me to make a determination in relation to the Husband’s capacity, without the need to make a finding as to his credit.

    (Emphasis added)

22. Thereafter from [28] Bell J makes significantly adverse findings concerning the husband’s non-disclosure in the proceedings.  Failure to disclose is a topic

    
    

    re-visited at [34] of the reasons in addressing the issue of the husband’s capacity to pay a maintenance order.  At [38], for example, is a finding that in light of the husband’s non-disclosure that the trial judge was at liberty to make findings contrary to the husband’s evidence.  At [41] and following are findings concerning the husband’s access to financial resources.  The point is that whilst it may be strictly true to say that Bell J did not make specific credit findings described as such in his reasons for judgment, there were multiple and ample findings tantamount to the same thing when his Honour discussed the husband’s non-disclosure and his true capacity to meet financial obligations.  

23. To the extent that the husband’s contention concerning “reasonable excuse” is directed at the legitimacy of the orders of 16 April 2013 having been made in the first place, when there was never any appeal from them, is rejected as illegitimate.

24. Whilst I am keenly aware that it is the orders of Bell J made on 16 April 2013 that are the subject of the contravention application, and not specifically the earlier orders of each of Young J (10 June 2011) and Murphy (14 June 2011), the fact is that Orders (7) and (8) made by Bell J were made by way of enforcement of those earlier orders pursuant to s 105 of the Act. In my judgment, relevant to assessing the husband’s assertions in these proceedings in respect of the orders of 16 April 2013, that it is only by reason of financial incapacity that he did not meet the obligations these imposed, and relevant to the assessment of the husband’s credit, is the fact that the husband’s longstanding non-compliance with those earlier orders prior to the enforcement orders being made by Bell J. On the husband’s financial circumstances, even putting his own evidence at its highest, it was not any financial incapacity that could explain the husband’s abject failures to comply with those Court-ordered obligations. Reference has already been made to the husband’s financial position as found by Murphy J. Reference has also been made to the husband’s own evidence that in the 2012/2013 financial year “[SPL] was on track to deliver approximately $2,000,000 in profit before tax”.[26]

    [26] Paragraph 40(c) of the husband’s affidavit filed 5 August 2015.

25. Reference has also been earlier made to the husband’s evidence that when HSBC imposed the debt reduction requirement in September 2012, the husband had the financial means to cause no less than $850,000 to be repaid in a period of only seven weeks.  All the while, for example, a costs order of $10,000 against the husband in favour of the wife made by Young J in June 2011 had remained unmet, as indeed did the requirement, for example, under Murphy J’s orders for the husband to pay a modest sum in costs and to pay spousal maintenance. 

1. Taken from the husband’s affidavit filed on 5 August 2015 (at paragraph 56) at the time HSBC appointed receivers to SPL (on 23 November 2012) that company was solvent and profitable.  The husband’s own evidence overall establishes that at least prior to the onset of difficulties with the HSBC commencing in September 2012, the husband must have had the capacity to meet in full the orders made by Young J and Murphy J respectively, but elected not to so do.  As noted, on the husband’s own evidence, he had no relevant financial incapacity until September 2012 at the earliest when he says the bank imposed a “freezing” of the accounts of SPL.

2. Notably, on the husband’s own evidence in cross-examination, at the same time as he was continuing his longstanding breaches of the respective June 2011 orders, the husband was receiving a monthly wage of $74,000 (continuing as at November 2012) and was paying all of his daughter T’s private school fees and various extra-curricular activities.[27]

   [27] Transcript, 17 September 2015, p. 86 l. 20 – 30.

3. There are numerous examples, post-dating the orders of 16 April 2013, of the husband electing to spend funds available to him on many things other than meeting his Court-ordered obligations under the subject orders.  It is unnecessary to specifically traverse each and every example that could be given of this.  The following examples suffice to demonstrate the point. 

4. The husband conceded in cross-examination that in February or March 2014 he received AU$51,000 for the return of a security bond in the United States of America (“USA”) with respect to one of his numerous offshore entities, I Company Limited, registered in USA.  Aside from the meagre sum of $400 the husband nominated in his oral evidence as being applied to his Court-ordered obligations, the husband chose to pay most of the balance to an unsecured creditor (American Express) and other (unnamed) unsecured creditors.  The husband’s assertions in his oral evidence to the effect that threats from unsecured creditors and payments of personal debt ought take priority over his meeting Court-ordered obligations, were, in my view, remarkable in disclosing the husband’s true attitude to compliance with the subject orders.[28]

   [28] Transcript, 17 September 2016, p. 84 l. 20 – p. 85 l. 45.

5. Another example comes from the husband’s evidence concerning SS Pty Ltd.  In the husband’s financial statement filed 5 June 2015 there is a “personal loan schedule” listing an amount owing to SS Pty Ltd of an estimated $600,000.  That amount (not stated as an estimate) is sworn to by the husband in his affidavit filed 5 August 2015 (at paragraph 129) and a “schedule of personal loans” is Annexure “SPL 22” to the husband’s affidavit.  Leaving aside that, when giving oral evidence on 16 September 2015 (only shortly after swearing his affidavit) the husband gave evidence that approximately $120,000 had been paid and that the then amount owing was “approximately” $500,000 (and not $600,000), the effect of his evidence is that from August 2014 he had been reducing the debt owing at the rate of $10,000 per month.  Whilst the husband’s evidence chopped and changed as to the sources from which he met the debt, it appeared that ultimately he contended that the payments were met from the income he was then generating and, as to an estimated 90 per cent of the reduction, or about $100,000, from “loans”.  In short, the husband had the capacity to apply $120,000 at the rate of $10,000 per month to this creditor and elected to do so in priority to even making some attempt at meeting any meaningful proportion of his Court-ordered obligations.  Again, for example, it will be recalled that a costs order of $10,000 made as long ago as June 2011 was included in those obligations and remained unmet.  Week by week the husband was continuing his non-compliance with various of the obligations cast by Bell J’s orders.

6. A further example are the levels and categorisations of the legal fees the husband deposes to in his affidavit filed 5 August 2015 at paragraphs 142 to 159.  Obviously it is mostly the period since the 16 April 2013 orders were made that is relevant, but so too, for the reasons earlier discussed, is the period following the June 2011 orders of Young J and Murphy J respectively.  Of course, some of this expenditure relates to parenting issues the parties have litigated but the point is that the husband has, one way or another, produced significant funds to pay substantial legal fees in priority to meeting his

   
   

   Court-ordered obligations.  In cross-examination the husband estimated that in the previous 12 months he had spent $150,000 on legal fees for litigation in this Court; $50,000 to $60,000 on what is referred to as the HSBC litigation and $7,900 per month on the lease of his premises for his office.[29]  Later in his cross-examination about legal fees and an amount of $115,000 provided to the husband by companies/entities associated with the husband in his business, there was this exchange between counsel for the wife and the husband:[30]

   [29] Transcript, 16 September 2015, p. 44.

   [30] Transcript, 17 September 2015 p. 70 l. 10 - p. 71 l. 5.

   Yesterday I asked you some questions about legal fees in these proceedings, so the Family Court proceedings is what we’re talking about now?---Yes.

   Family and Federal Circuit Court I should say.  And I think we got to the point where in the period 10 August 2015 through to today you have paid in your lawyer’s trust account $115,000?---Barry Nilsson.

   Sorry, that’s what I mean, yes.  That $115,000 is from [V1].  That’s how it came into Barry Nilsson’s Trust Account?---Some from [V1] and some from [V3].

   And those are both companies that you control because you’re making money come into your personal lawyer’s accounts?---I control [V1];  I don’t control [V] – [V3] on its own.

   So did you not just get onto a bank and transfer money from the [V3] account into your solicitors?  Is that not how the money occurred, the money transfer occurred?---It required agreement from the other director.

   Who is the other director of [V3]?---[Ms MM].

   So [V3], as a corporate entity I suppose, had no difficulty paying your personal legal fees?---No.

   I’m sure you suggest that’s a loan?---Yes.

   And this is another miraculous example of you being able to call in quite enormous sums of money at short notice, isn’t it;  that is, $115,000 in about a month?---Yes.

   At any stage did you offer to my client rather than to proceed to this hearing, to pay her $115,000 in full satisfaction of the debt that is outstanding?---No.

   Anything in the vicinity of $115,000?---No.

   That’s because you would rather fight these proceedings, no matter what the cost, than meet your obligations to the court, isn’t it?

   HIS HONOUR:   Obligations to who?

   MR MINNERY:   To court, your Honour.  Sorry, to my client by way of court order is a better question.  Thank you, your Honour.

   Do you want the question again?---If you don’t mind, Mr Minnery, yes.

   That is because you would rather fight these proceedings no matter what the cost than meet your obligations to my client by way of court order?---Yes, yes.

7. That ultimate admission flew in the face of the husband’s earlier evidence answering propositions to the effect that he had not, amongst all of these substantial borrowings, tried to borrow money to meet his obligations under the orders.  The effect of the husband’s evidence was that he had attempted to do so, without success.  That earlier evidence was itself inconsistent with the very substantial funds, totalling in excess of $1.5 million in capital amounts (without adding alleged interest) the husband contends to be loan funds obtained (on a completely unsecured basis) from the 12 individuals he identifies in his evidence – a topic I will shortly turn to.  Indeed, in his oral evidence the husband gave an estimate that since his asserted problems with HSBC arose in late 2012, he or entities associated with him had received loan funds which, with interest, would total in excess of $3 million. 

8. As to child support for his daughter T from his earlier marriage, apart from what has earlier been referred to, the husband’s evidence on this topic (as with his evidence on many topics) appeared to be an exercise in obfuscation.  In the end it seemed that between 3 February 2010 and 19 January 2015 (a period for which subpoenaed invoices were available) the husband had paid the “vast majority” or an estimated 85 per cent of T’s private school fees in substantial amounts.[31]  Obviously, the period of the invoices referred to encapsulates the period following the respective June 2011 orders earlier referred to.  It is thus established that the husband voluntarily paid the private school fees of T under an informal arrangement with her mother, in priority to meeting most of his obligations under the subject orders.  His efforts to distance himself from that conclusion did him no credit.[32]

   [31] Transcript, 17 September 2015, p. 63 – p. 64 l.30.

   [32] Transcript, 17 September 2015, p. 65 l. 25 and p. 66.

9. Further, on the husband’s evidence he was undertaking work in his former wife’s business on an agreed reduced level of remuneration, reduced as a means of his contribution to T’s support.  He gave evidence of being paid $1,000 per month for his work.  On the husband’s evidence the value of that agreed reduction and thus his contribution to T’s support is $1,800 per month.[33]  Thus, whilst not meeting his obligations under the subject orders the husband has been making an $1,800 per month equivalent contribution to his daughter T on a voluntary basis, together with meeting 85 per cent of her substantial private school fees.

   [33] Transcript, 17 September 2015, p. 89.

Personal loans alleged by the husband

1. Annexure “SPL 22” to the affidavit of the husband filed on 5 August 2015 is a schedule of funds received by the husband from time to time which he claims to be personal loans.  That schedule is as follows:

   SCHEDULE OF PERSONAL LOANS

1 AUD =	0.73	USD	As of	31-Aug-15
Date Received	From	CR	Amount	AUD Total	Interest Rate	Accrued Interest	Outstanding Amount
2012
22-Mar-12	Mr XX, BOP	AUD	50,000	50,000	9 per cent	15,497	65,497
27-Mar-12	Mr YY, BOP	USD	50,000	68,493	9 per cent	21,145	89,638
27-Mar-12	Mr ZZ, BOP	AUD	50,000	50,000	9 per cent	15,436	65,436
30-Mar-12	Mr WW, BOP	USD	50,000	68,493	9 per cent	21,094	89,587
4-Oct-12	Mr WW, BOP	AUD	100,000	100,000	9 per cent	26,162	126,162
17-Oct-12	Mr WW, BOP	AUD	200,000	200,000	9 per cent	51,682	251,682
31-Oct-12	Ms NN	AUD	484,000	484,000	10 per cent	137,111	621,111
1-Nov-12	Ms MM	AUD	200,000	200,000	11 per cent	62,263	262,263
2013
Mr PP	AUD	5,000	5,000	n.a.	0	5,000
1-Nov-13	Mr VV	USD	40,000	54,795	n.a.	0	54,795
1-Nov-13	Mr TT	AUD	20,000	20,000	n.a.	0	20,000
1-Nov-13	Ms UU Skinner	AUD	25,000	25,000	n.a.	0	25,000
1-Nov-13	Mr TT	AUD	10,000	10,000	n.a.	0	10,000
1-Nov-13	Mr VV	USD	2,000	2,740	n.a.	0	2,740
11-Nov-13	Ms UU Skinner	AUD	3,518	3,518	n.a.	0	3,518
2014
8-Jan-14	Ms UU Skinner	AUD	8,858	8,858	n.a.	0	8,858
31-Jan-14	Mr AB	USD	25,000.00	34,247	5 per cent	2,707	36,953
30-Oct-14	Mr WW, BOP	AUD	51,845.73	51,846	3.5 per cent	1,516	53,362
Various	Messrs BC	AUD	17,000.00	17,000	n.a.	0	17,000
Various	Ms UU Skinner	AUD	66,000.00	66,000	n.a.	0	66,000
TOTAL	AUD	1,291,222	1,519,989	354,612.85	1,874,601.70
USD	167,000	228,767

1. There is no dispute in the wife’s case that the husband received these funds.  Indeed a substantial part of her case, via subpoena processes and disclosure, was directed to establishing that very substantial funds have historically come to the husband or to entities he controls, including via persons or entities located offshore, in support of the wife’s contention to the effect that these are not in fact loans but funds to which the husband is entitled.  An alternative contention within the wife’s case, as already referred to, is that the husband’s demonstrated capacity to obtain funds as needed, even via loans, demonstrates his capacity to have complied with the subject orders had he chosen to do so.

2. Only 4 of the 12 individuals identified in the husband’s schedule provided affidavit evidence in the husband’s case (the witnesses PP, NN, YY and MM).  Ultimately, none of those witnesses were required for

   
   

   cross-examination.  However as to the other nominated individuals, my lack of confidence in the husband’s credit and as to the reliability of his evidence more generally, precludes in my judgment ready acceptance of his uncorroborated assertions.  In this respect it is notable that an affidavit from PP was obtained to corroborate a loan for $5,000, yet other alleged loans of significantly greater sums are uncorroborated by evidence from the putative lenders. 

3. On the husband’s case his reason for obtaining loans, and the sole reason he provides in his affidavit or oral evidence, is financial need created by HSBC’s actions earlier referred to, which occurred in late 2012.  Reference has already been made to what the husband says about the performance of SPL in the 2012/2013 financial year.  Reference to the CC Accountants’ report to creditors dated 3 January 2013 and the annual report dated 13 April 2014 (Annexure “SPL 9”) to the husband’s affidavit filed 5 August 2015 includes the 2012 financial statements for SPL, disclosing that the company had an operating profit in the 2012 financial year of $1,481,819.  In summary, the combined effect of this evidence is that there would have been no need for the husband to borrow funds, or at least no explanation for the borrowing, attributable to the actions of HSBC in late 2012.

4. There is thus no explanation by the husband as to why four loans totalling in excess of AU$200,000 would have come from four offshore-based individuals in March 2012.  Only one of those individuals, Mr YY, provided an affidavit in the husband’s case.  At the time of trial Mr YY resided in Asia.  Whilst he was available to be cross-examined by telephone the wife’s counsel ultimately confirmed that he was not required for cross-examination.  Whilst it therefore can be accepted, absent challenge to Mr YY’s evidence, that he loaned the husband US$50,000 on an oral agreement and an unsecured basis, his affidavit is notable for its absence of illuminating any particulars such as the purpose of the loan or anything about recovery.  Mr YY did not, on his evidence, apparently impose any requirement as to how the loan funds were to be directed.  Mr YY describes himself as a business associate and friend of the husband and the accountant for two offshore entities associated with the husband’s business dealings that were the subject of evidence otherwise, V1 Limited and V2 Limited.  As will be discussed, the husband is a

   
   

   co-director with Mr YY of offshore entities said to be owned by Mr YY.  Despite having loaned such a substantial sum in March 2012, Mr YY’s affidavit is silent about recovery or any demands for repayment of the capital sum or the interest now said to have accumulated at the rate of 9 per cent per annum.  Notably, the affidavit does not suggest that Mr YY does not expect full recovery of the sum loaned together with interest.  Mr YY would seemingly be well placed to make such an assessment given the extent of his association with the husband on the evidence, and the fact that he is an accountant and undertakes accounting work for entities associated with the husband.  Notably, Mr YY’s affidavit is silent as to substantial funds the husband says have been advanced to him by Mr YY’s Asian based company, V1 Limited, a matter further discussed below.

5. Obviously enough, Mr YY advanced his loan funds referred to in his affidavit subsequent to the respective June 2011 orders earlier referred to.

6. There is no affidavit or other source evidence from any of the other individuals, namely, Mr XX, Mr ZZ, or Mr WW to corroborate the husband’s evidence as to these being loans or, if they are loans, any evidence as to their purpose, or particulars about recovery.

7. Notably, with respect to the individual identified as Mr WW (otherwise referred to by the husband as Mr WW) this individual has allegedly advanced total loans in capital amounts exceeding AU$420,000.  The husband describes having a “close, professional relationship” with this Asian-based national in his affidavit and as his being dependent on this individual’s ongoing financial support to pursue claims against HSBC and the receivers.  Yet it is that there was no affidavit evidence from this witness forthcoming in the husband’s case in circumstances where, at the same time, an affidavit of Mr PP to corroborate a loan of $5,000 was thought necessary or worthy of inclusion in the husband’s case.

8. As to Ms NN, she provided an affidavit to which was annexed a loan agreement confirming that, apparently on a completely unsecured basis, she advanced a capital loan of AU$484,000 to the husband.  Her affidavit, as with the affidavit of Ms MM in respect of her loan of AU$200,000, is devoid of details as to any discussion with the husband as to the purpose of the loan and, perhaps more importantly, any demands for repayment or expectations of repayment or any discussions whatsoever with the husband, over the years since the loan funds were initially advanced, about any of these topics.

9. All of the alleged loans are advanced on an unsecured basis and many of them post-date the receivership and liquidation of SPL.  The husband asserts that reputational damage occasioned to him in consequence of the actions of HSBC has impacted upon his reputation and capacity to gain employment.  That contention is to be contrasted with the feature that, mainly persons described as business associates, have apparently been willing to advance very substantial funds to the husband on a completely unsecured basis and, even accepting them to be loans, apparently are content to rely on the husband’s personal capacity to repay, not only the capital, but in many cases substantial interest amounts.

10. Whilst I have significant reservations about accepting the husband’s evidence on this topic where any of these alleged loans (the majority of them) are not the subject of corroborative evidence from the nominated lender, I have resolved that in the end result it is unnecessary to reach firm conclusions on this issue. In my judgment, in the context of the husband establishing a case of “reasonable excuse” within the meaning of s 112AC, the evidence overall overwhelmingly favours the conclusion that, one way or another, the husband has had ample means of accessing funds which would have been sufficient to meet his obligations under the subject orders, but has elected not to do so. The husband’s own evidence does not displace that conclusion and it is thus unnecessary to determine the wife’s contention that these funds, or any of them, are in fact funds to which the husband is beneficially entitled.

Further specific findings re: the husband’s credit

1. Having had the opportunity to observe and hear the husband give evidence before me, I am not satisfied that much of his evidence is reliable, where not independently corroborated, nor that the husband was a frank and truthful witness.  Even relatively straight forward or simple questions in cross-examination directed to obtaining clarification of the husband’s relatively complex financial arrangements, provoked what in my assessment was deliberate obfuscation on the part of the husband.  The husband also gave inconsistent evidence.  Examples of both will be referred to.

1. The first and obvious challenge to the husband’s credibility, are the facts earlier referred to concerning his conduct in acting illegally to obtain a replacement passport which I have found to be a contempt of the subject order.  Those facts as to the husband’s conduct demonstrates the husband’s preparedness to tell lies to an authority, under pain of significant potential sanctions, to secure a perceived advantage for himself.  That this was done to circumvent an order of a superior Court, and done relatively shortly after the order had been made, puts the husband’s conduct in context. 

2. At an early point of his cross-examination, it was put to the husband (with respect to paragraph 7 of the 29 November 2012 orders) that he knew perfectly well that after that order was made he needed to either obtain his wife’s consent or apply to the Court to obtain his passport.  The husband initially blankly denied that proposition.  When reference was then made by counsel to what the husband had told the investigative officers from DFAT in their recorded interview, the husband completely changed his earlier answer.[34]  Thus commenced a trend in the husband’s oral evidence of his providing provisional answers to questions or propositions, or non-responsive answers, seemingly in an effort to provoke from his questioner the identification of information or source material being relied upon by counsel for the question or proposition being put to him.  The example referred to was not the only occasion where an initial answer by the husband was completely changed subsequently.

   [34] Transcript, 16 September 2015, p. 30 l. 40.

3. In my assessment the husband deliberately obfuscated in answering what appeared to be straight forward questions as to whether or not Supreme Court proceedings had actually been initiated concerning the HSBC litigation, despite his assertion that between $350,000 and $400,000 had been expended “on the HSBC litigation”.  The husband tread a winding path in his answers to the ultimate conclusion that proceedings had not in fact been instituted.[35]  Moreover, as will be further discussed, what seemed to be clear and unequivocal evidence that $350,000 to $400,000 had been expended “on the HSBC litigation” seemed to undergo some metamorphosis in subsequent oral evidence the husband gave, to the effect that this was a total sum expended over some years prior to the events of late 2012 and was not necessarily confined to “the HSBC litigation”.

   [35] Transcript, 16 September 2015, p. 37 – p. 39.

4. The husband deposes in his affidavit filed 5 August 2015 (paragraphs 70 to 105) as to his various directorships and other involvements with corporate entities both based in Australia and based overseas.  The husband is the sole officeholder and shareholder of two companies, V1 Pty Ltd and V5 Pty Ltd.  On his affidavit evidence the husband uses those entities, apparently interchangeably, to “contract my services”.  Despite the husband’s affidavit by reference to the reported financials for V1 Pty Ltd (Annexure “SPL 20”)[36] revealing that V1 Pty Ltd had operating expenses of $289,297 in the 2015 financial year, well in excess of its reported income of $91,022 (producing a net loss of $198,295); and having reported liabilities of $340,785 exceeding its net assets by $198,295, the husband deposes at paragraph 105[37] that since 22 September 2014, V1 Pty Ltd has been meeting payments on behalf of the husband of $10,000 per month for his personal debt to SS Pty Ltd.  On the husband’s affidavit evidence and the disclosed financial accounts of V1 Pty Ltd at Annexure “SPL 20” that company could not possibly have the capacity to make those payments.  Significantly, they are not reflected in the financial accounts of the company either as loans to the husband or as director’s fees paid to the husband.  If the $10,000 per month was paid by V1 Pty Ltd the amounts paid must be sourced to payments received by that company elsewhere than via that company’s own income or resources.  My own attempts during cross-examination of the husband at trial to obtain his clarification of the true position with respect to his alleged “personal loans” and those allegedly made to one or other of his entities was, in my judgment, met with obfuscation by the husband in the following exchange:[38]

   [36] Husband’s affidavit filed 5 August 2015.

   [37] Husband’s affidavit filed 5 August 2015.

   [38] Transcript, 16 September 2015, p. 48 l. 1 – l. 39.

   HIS HONOUR:   Mr Minnery, there’s something I need to clarify because I’m not sure I understand it.

   When you speak about loans from overseas – and you seem to interchange between yourself personally and [V1] – I just want to be clear:  do you get loans from overseas to you personally?  Do you get loans from overseas to [V1] Proprietary Limited or both?---Okay.  It depends on the – on the timing, your Honour.  From [Mr WW] and [Mr YY], they have personally lent me money to assist with what happened with HSBC.

   They’ve lent money to you personally?---Yes, sir.  Yes, your Honour.

   So paid you loans directly, yes?---Yes, your Honour.  [Mr WW] has helped me meet mortgage payments to HSBC in Australia or – in fact, it was his wife that transferred money to meet mortgage payments to HSBC last year.

   You mean mortgage payments for your home?---My home.

   So that’s a personal loan category.  Yes.?---Yes, your Honour.  That was approximately $51,000 from [Mr WW’s] wife, [Ms WW].

   Yes?---And there is a – these gentlemen have – have put funding into [V1] Limited … that has been deployed into various V companies to develop and advance those businesses.

   Well, just focusing on [V1] Proprietary Limited, what I want to know is how much do you say is the total of loans to [V1].  I think that’s not in issue.  That’s the company you solely control?---I solely control that one.

   What’s the total of loans to [V1] Proprietary Limited?---I – I estimate about $400,000, your Honour.

   And, sorry, just to finish off so I’ve got it clear, what’s the total of personal loans to you, whether it’s to pay a mortgage or anything, but categorised as being a loan from anybody to you personally from an offshore person or entity?  What’s the ‑ ‑ ‑?---Offshore person?  I – I have put a schedule in my material, your Honour.  Interest is accruing on some of these – if we span that whole period of time since just before the HSBC receivership, it would be approximately $3 million, I think, including interest.

   (Emphasis added)

5. Leaving aside the observation that the husband’s oral evidence referred to identifying a $3 million estimate fortifies what has already been observed about the husband’s capacity to access funds (and hence relevant to his capacity to discharge Court-ordered obligations if he chose to so do) the evidence referred to does not at all clarify how much of (if at all) the “Schedule of Personal Loans” compiled by the husband evidences any differentiation between what the husband refers to as loans to his company, himself personally, or vice versa.

6. Likewise on this topic, on the next day of the husband’s cross-examination there were these exchanges in the course of his evidence:[39]

   HIS HONOUR:   Maybe this will help you, I don’t know.  You say in paragraph 31 of your affidavit, since filing your affidavit of evidence-in-chief you firstly paid 40,000 to your lawyers on account of legal fees on 10 August this year.  You say the source of those funds was a director’s loan from [V1] Proprietary Limited?---Yes.

   We’ve already established it’s trading at a loss?---Yes.

   You then say:

   I’ve also today paid my solicitors a further sum of 75,000 with 35,000 of that sum being a director’s loan from [V3] and 40,000 being a director’s loan from [V1].

   [39] Transcript, 17 September 2015, p. 81 l. 40 – p. 82 l. 35.

   So just pause here.  10 August 40,000 comes, you say, from a director’s loan from [V1] and more recently another 40,000 director’s loan from [V1], 80,000 from a company you say is running at a loss.  How does it pay it?---From the loan and funds provided from [V1] Limited in [Asia], your Honour.

   To [V]?---[V1] Proprietary Limited.

   If I look at each balance sheet, I will see those loans reflected, will I, in the trading  ‑ ‑ ‑?---Yes.  I believe so, your Honour.  I believe they’re recorded.

   MR MINNERY:   [V1 Asia] is simply a slush fund for you, isn’t it?---No.

   It’s a source of where you’re hiding your money offshore to get out of the reach of my client and your obligation to her, isn’t it?---No.

   In fact, you were able to set it up because you lied to obtain a passport and then went overseas to set it up, didn’t you?---No.

   You are able to pull in vast sums of money from [Asia], for this [V1 Asia], as and when you require it, aren’t you?---As and when the businesses require it.

   No.  As and when you require it is what I’m putting to you?---No.

   And, in a sense, you use [V1], a company, as his Honour says, that is running at a loss to filter as much as you can the source of the money you can call in from other places, don’t you?---No.

   (Emphasis added)

7. It can be seen from these passages of evidence that the husband asserted an estimated $400,000 in “loans” being received by his solely owned and controlled company V1 Pty Ltd from the Asian entity V1 Limited.  It can also be seen that the husband asserted that loans from V1 Limited (Asia) to the husband’s company V1 Pty Ltd were reflected as such in his company’s balance sheet.  It may also be noted that the husband accepted in cross-examination that bank statements for a bank account of his company V1 Pty Ltd revealed that deposits to that account in only the eight month period 18 September 2014 to 31 May 2015 exceeded $350,000 in amount.  These funds the husband characterised, by reference to his earlier evidence, as part of the funds he says were “loans”.[40]  The fundamental difficulty is that the 2015 balance sheet for V1 Pty Ltd, forming part of Annexure “SPL 20” to the husband’s affidavit[41] does not appear to reflect or record such funds as loans or within the stated liabilities recorded.  Moreover, if funds initially provided to V1 Pty Ltd for the purpose of the husband paying his personal debt to SS Pty Ltd, the balance sheet also records as an asset the loans advanced to the husband.  There is no explanation as to why a personal debt of the husband to SS Pty Ltd would be dealt with by deposits from the Asian corporation to the husband’s company rather than to him personally.

   [40] Transcript, 16 September 2015, p. 49 l. 5 – 10.

   [41] Filed 5 August 2015.

8. The husband would have this Court accept that a Asian based corporation, owned and operated by an accountant and completely independent of the husband in terms of the husband having any interest in that entity, would advance $350,000 to $400,000 in “loans” on an entirely unsecured basis to the husband’s company which, according to its financials for the 2015 year, had a net operating loss of approximately $200,000 for the year and liabilities substantially in excess of its assets.  That is not accepted.  In my judgment it is more likely than not that whatever actual arrangements the husband has with respect to, not only this, but other offshore entities and individuals, have not been fully and accurately explained by the husband.

9. The personal debt of the husband to SS Pty Ltd arises from a personal guarantee of the husband, that is, a personal debt owing by him in respect of former leases of commercial premises held by SPL, guaranteed by the husband.  There cannot be any sensible distinction, as sought to be made by the husband, between that as a debt to be paid “as and when the businesses require it” as compared to the husband’s likewise personal obligations imposed by the subject Court orders.  Payment of the SS Pty Ltd debt does not advance in any way the subject “businesses” but is payment of an accrued/historical debt of the husband.  In other words, it has no different status or characterisation as a debt than the debts owing by the husband pursuant to his obligations under the subject orders.

10. As has already been observed, despite the husband’s assertion in oral evidence that loans to V1 Pty Ltd would be reflected in its financial accounts, that is simply not so by reference to the accounts produced by the husband as referred to, even allowing for loans which, on the husband’s version, post-date the balance dates in those financials.

11. Reference has already been made to what, in my judgment, amounted to obfuscation on the part of the husband in his evidence as to whether or not the so-called HSBC litigation had actually been instituted.

12. In my judgment the husband gave inconsistent evidence on the topic of what had actually been spent on the HSBC litigation since the receivership imposed by HSBC in late 2012 as earlier referred to occurred.  There was this exchange between counsel for the wife and the husband during his cross-examination:[42]

    Your reliance on the HSBC litigation in these proceedings is a smokescreen to try and create the illusion of financial hardship on your part, isn’t it?---No.

    You claim it has relevance to these proceedings because you need to spend money on lawyers to pursue it, but, really, you are doing it to affect your financial position, aren’t you?---No.

    How much have you spent on lawyers for the pursuit of that litigation – this is the HSBC receivership litigation – to now, and, of course, round figures are fine?---Mr Minnery, there has been expenditure in various entities in that dispute.

    Sure.  Anything at all related to HSBC?---So if I’m trying to be, you know, global, and include two companies that are now in liquidation at their hand.

    And just so we’re very clear, I said how much has been spent?---This is an estimate:  maybe 350, 400,000.

    And that’s obviously 2012 through to now?---Yes.

    (Emphasis added)

    [42] Transcript, 16 September 2015, p. 39 l. 5 – l. 21.

13. Whilst the husband said that the $350,000 to $400,000 was an estimate, there could not be any doubt that what was being asked of the husband, and his answers were in respect of, the period from “2012 through to now”; nor that it was in respect of the receivership specifically occurring in late 2012 that the husband was being asked about.

14. On the following day (cross-examination of the husband continued on the second day) in the course of his re-examination on the topic of moneys spent on “litigation with HSBC”, I had the following exchange with the husband:[43]

    [43] Transcript, 17 September 2015, p. 92 l. 45 – p. 94 l. 12.

    HIS HONOUR:   Well, just on that then, how much is [V1] Pty Ltd paid of the sum?  I think you gave us – what was it?  The total amount was ‑ ‑ ‑?---Your Honour, I estimate ‑ ‑ ‑

    It was about ‑ ‑ ‑? ---about $30,000.

    30,000 from [V1].  And [Skinner P/L] was one of the companies liquidated, was it?---Yes, your Honour.

    How did it pay cost towards the proceedings that you want to take against the liquidator?  Isn’t that what we’re talking about?---I thought we were talking about total legal spend in the HSBC dispute.

    Yes?---The dispute was running before that company was put in receivership.

    I see.  How much did [Skinner P/L] pay then?---I estimate maybe $80,000 prior to the receivership.

    Well, presumably it didn’t pay any afterwards, did it?---No, it didn’t, your Honour.

    What about [V4]?---[V4], I – an estimate, your Honour, of 20 or 30 thousand dollars.

    Okay.  Well, where does the rest come from?  Because you said it was 350 to 400 was spent yesterday?---But I – perhaps I’m at cross-purposes on the timeline.  I’m trying to recall Mr Minnery’s question from yesterday.

    Well, the essence of the inquiry, as I noted it, and I could be wrong, you were asked about litigation in the Queensland Supreme Court.  You talked about affidavits by you ‑ ‑ ‑?---Yes.

    ‑ ‑ ‑ that was in relation to the HSBC acting improperly.  That you confirmed that whilst yet there’s no claim or statement of claim filed, proceedings are imminent.  You were asked how much has been spent on that dispute thus far, and I took a note of your answer being somewhere between 350 and 400?---Okay.  Your Honour, there are other experts in that dispute.  For example, [LL] Accountants.  There was about $50,000 there. 

    I’m sorry.  I don’t understand that answer.  Are you saying out of the – it wasn’t 350, 400 spent by you or anybody related to you or any entity related to you?  What were you talking about ‑ ‑ ‑?---It sounds ‑ ‑ ‑

    Sorry.  Let’s start again.  What were you talking about yesterday, assuming my right and my note is correct, that your referred to a spend of 350 to 400 thousand?  What were you talking about?---I think Mr Minnery was talking about a range of legal expenses from, if I recall, 2010, and – which well predated that dispute through to current, I believe.

    So you agree with the figure of 350 to 400.  I got that right?---Yes, your Honour.  On that timeframe predate legal spend that I’ve had in that five years.  There’s right.

    In a dispute with the Hong Kong bank?---No, that’s not – no, no.  No.  That’s not all Hongkong Shanghai Bank.

    Well, that’s what I’m – suggest you said yesterday, so we better clarify this then.  What’s the story today?--Okay.

    What were you talking about with 350 to 400 then?---I thought Mr Minnery was referring to my, like, global legal spend with [CD Lawyers], they’re my commercial lawyers, on a range of matters from 2010.  My recollection was the question was along the lines of how much have I spent on lawyers.

    Okay.  I won’t take it further.  (Errors as in original) (Emphasis added)

15. The inconsistency in the husband’s evidence on this topic is readily apparent. 

16. Taken from the husband’s affidavit earlier referred to, apart from being the sole officeholder and shareholder of his own companies referred to, the husband is the director of two Malaysian companies said to be owned by Mr WW, earlier referred to, which companies are referred to as FFP and IPP.  He says he is also a director of V3 Pty Ltd; Skinner Pty Ltd and V2 Pty Ltd.  Further, he deposes to be an advisor or Australian representative of N Company. 

17. The husband is also a director of the company V1 Limited registered in Asia with Mr YY, whom the husband says owns that company.  V1 Limited wholly owns another Asian company, V2 Limited.  The husband is also a director of V2 Limited.

18. On the husband’s evidence the Asian company V1 Limited owns 64 per cent of the shareholding of V3 Pty Ltd with the other 36 per cent owned by Ms MM.  The husband is a director of each of the entities referred to. 

19. Against this background, and what has already been referred to about the husband’s evidence, I consider that the husband deliberately obfuscated in his evidence in response to attempts to identify with precision his financial arrangements generally including in relation to the financial performance of his own business via V1 Pty Ltd.  Counsel for the wife sought to ascertain how it would be that on the one hand a number of people had provided the husband with “vast sums of money” yet he had not obtained funds to meet his obligations under the Court orders.  The husband suggested in that context that he had sought to borrow funds from Mr WW for that purpose whom, apart from the descriptions in the husband’s affidavit, was described by the husband in his oral evidence as a “close, personal friend”.  In that context I sought to ascertain for myself in the course of the husband’s cross-examination what was occurring with respect to the husband’s own business performance.  In my view, the following exchange typifies the husband’s capacity to give less than full and frank evidence, or at least clear evidence, in answer to direct questions:[44]

    [44] Transcript, 17 September 2015, p. 76 l. 1 – p. 77 l. 46.

    HIS HONOUR:   How is this consistent with your earlier evidence that you would rather fight these proceedings than see the obligations under the order met?  You would rather spend money fighting this than seeing the wife paid.  That was your earlier evidence?---Well, your Honour, I – I’ve tried very hard to settle these proceedings.  I – I have tried to get money from friends to meet Bell Js orders.  The – the – the funding to which Mr Minnery refers is for the businesses.  I think yesterday I explained that – the view of [Mr WW] and the other gentleman I referred to is to try and help me get re-established and then meet my various liabilities through profits earned out of these companies as they grow.

    What return to [V] showing?  I mean, you’re spending – my rough figures – $5600 a month on leasing, about $6000 on advertising before we get to any staff costs and the like, the fit-out you’ve referred to, 75,000.  Like, if I look at a balance sheet for it for the first – for the trading period for the six months, how much is it making?---It’s in a small net loss position for the last financial year, your Honour.

    Yes.  What about the first – so the first six months of this year it’s a net loss?---Yes.  This financial year that we are now in, the one closed June 30?

    No.  The net loss for the year completed;  is that right?---Yes.  That year is completed, so, yes, a net loss, your Honour.

    What about this quarter, how’s it going?---Also in a small net loss position.

    How is it subsidising that loss?---From loans that come in from [V1] in [Asia], your Honour.  The – the business is growing at about 40 per cent per annum in revenue and GP at about 37 per cent per annum.  So it will soon ‑ ‑ ‑

    Well, revenue growing 40 per cent from what?---40 per cent overall, your Honour, compared with the ‑ ‑ ‑

    Yes.  From what?--- ‑ ‑ ‑ same time last year.

    Yes.  Okay.  From what?---Year on year.

    What was the revenue last year;  what is the revenue this year to give you your 40 per cent?---Group revenue, I think ‑ ‑ ‑

    No.  [V1] you said.  Was that different to group revenue?

    
    

    ---Okay.  Yes.  Yes.

    Okay.  Well, give me [V] – you said [V1] 40 per cent has grown in revenue from last year to this, and gross profit has grown.  From what to what?---[V1] in isolation, your Honour, it provides accounting, marketing and various other services to other [V] companies.

    Did you hear my question?---I did, your Honour.

    Did you understand my question?---Yes, your Honour.

    What’s the answer?---[V1] Proprietary Limited, I – I – I can’t recall the exact revenue at end of June 30 for that entity alone.

    All right.  Give me the group, then?---Full group about seven million dollars, your Honour.

    And who’s in the group?---In the group is [V3], [V2], [V1] Proprietary Limited, [V5] and I count [V6] as well even though that is a hundred per cent owned by [Ms S Skinner].

    How are they possibly in a group situation, then?  How can you not tell me the figures for [V1], which you acknowledge you own, you’re the sole shareholder, I think, and sole director?---I am.

    You can’t give me any figures for [V1].  It’s spending all this money on renting premises, etcetera, fit-outs and the like, can’t bring it to mind what it made in turnover last year or this or – is that right?---I – I think that it’s less than a million dollars that company, your Honour.

    You think it’s less than a million?---Yes.

    So did it grow 40 per cent?---In revenue it would have – it would have probably doubled.

    It has doubled its revenue.  So it was 500 and now it’s a mil?---Yes.  I think so, your Honour, without having the accounts to refer to.

    But it’s still in a net loss situation?---Yes, your Honour.

    Trading loss?---Yes, your Honour.

    How big a net loss?---For the year – for the year just closed I think at EBITDA maybe about $30,000.

    What about after interest and tax?---There will be no tax liability because of that performance.  Interest – look, maybe 80 or $90,000 loss overall, net.  We forecast that it will move into net profitability by the end of this calendar year, your Honour, if it stays on the current trend.

    Doubling?---It has been, yes.

    So do I take it if you get to the end of this year, by the sound of it, you wouldn’t have any trouble finding money to pay this order;  would that be right?---I think that’s very fair, yes.

1. Comparison between this bracket of evidence and the balance sheet and profit and loss of the company for the 2015 financial year (Annexure “SPL 20”)[45] produces some stark distinctions.  I suppose it is strictly true, as the husband said in evidence, that the “turnover” for V1 Pty Ltd is “less than $1 million”.  In fact its total income recorded in its profit and loss and balance sheet for the 2015 financial year is $91,022.  Its overall loss was not $30,000 as stated by the husband, but is recorded at almost $200,000.  In my judgment, it speaks volumes for the husband’s lack of full and proper disclosure that he could give such evidence in relation to one of the two companies and essentially the main business entity which he says he operates.  In my judgment, reference by the husband to “the group” and the fact that his evidence dissembled when pressed about the performance of only V1 Pty Ltd, fortifies the conclusion that it is more likely than not that the husband has not been full and frank as to the true arrangements he has made with a variety of individuals, and as to his true position with respect to the other entities referred to in terms of his own interests.

   [45] Husband’s affidavit filed 5 August 2015.

2. Apart from the above being an example of the difficulty in having the husband provide clear answers to direct questions, it is notable that in the passage referred to the husband suggested that by the end of the 2015 year he would be, via his asserted improving business performance, able to meet his obligations under the subject orders.

3. In my judgment for the reasons outlined above overall in relation to this topic “reasonable excuse” within the meaning of s 112AC is not established. It follows then that I am satisfied that the wife has established the contraventions particularised in the contravention application and that the power of the Court to impose sanctions for contravention of orders is invoked. As with respect to the contempt application, that will require a further hearing to determine any appropriate sanctions to be imposed.

Orders sought by the husband

1. As it is obviously relevant to the question of any sanctions to be imposed in respect of the contempt application and the contravention application, the question of return of the husband’s passport to him ought be considered in that context.  I therefore propose to adjourn the husband’s Amended Response to an Application in a Case filed on 5 August 2015 seeking orders with respect to the passport, to be determined in conjunction with the final determination of the contempt application and the contravention application. 

2. For similar reasons, it seems to me that the question of costs of these proceedings ought be considered as part of the final determinations to be made with respect to the applications referred to.

Application for child support departure orders

1. The husband bears the onus of proving that in the special circumstances of the case one or more grounds for departure as set out in s 117(2) of the CSAA exists, and that it would be just and equitable, and otherwise proper, to make an order.[46]

   [46] Gyselman and Gyselman (1992) FLC 92-279; Gilmour and Gilmour (1995) FLC 92-591; Liesert v Nutsch (1996) FLC 92-665; Bryant and Bryant (1996) FLC 92-690 and Wild v Ballard (1997) FLC 92-771.

2. For the reasons already discussed, in my judgment it is not established by the husband, to the Court’s satisfaction, that since the making of the orders by Bell J on 16 April 2013, circumstances have arisen as a result of which:

   ·The financial capacity of either party is now significantly reduced (s 117(2)(a)); or

   ·That the costs of maintaining the child have been affected (s 117(2)(b)); or

   ·That the existing order now results in an unjust or inequitable determination of child support (s 117(2)(c)).

3. I reiterate the observations that have already been made about the husband’s apparent attempt to direct submissions challenging the validity of the orders made by Bell J in the first place when there was no appeal from those orders made, as earlier referred to, in the context of the husband having re-opened the trial as already referred to.

4. I am not persuaded by the husband’s evidence, for the reasons already given and having regard to the preceding discussion, that the husband’s “financial capacity” is confined to what he asserts to be his income, including that declared for taxation purposes.  I do not accept that the husband has fully and frankly disclosed his true financial capacity.

5. To the extent that it be necessary to do so, I record that I do not consider that the cross-examination of the wife before me on her evidence establishes any fundamental difference in the wife’s capacity to provide for the child’s needs as compared to the position as it existed before Bell J.  In my judgment, however, it is unnecessary to traverse this aspect in circumstances where the husband does not first establish a ground for departure from the existing order made following a trial.

6. For these reasons the husband’s application for a departure order in respect of child support ought be dismissed.

Spousal maintenance

1. For the same reasons as already outlined, the husband’s application to discharge orders for spousal maintenance ought be dismissed. 

2. I reiterate that there was no appeal from the order for spousal maintenance made by Murphy J in June 2011 which was the subject of the enforcement order made by Bell J on 16 April 2013, likewise not appealed.

3. The spousal maintenance orders made by Bell J expired in effect from the commencement of the child’s schooling. 

4. The application for discharge of the previous spousal maintenance orders made, with retrospective effect, ought be dismissed.

Orders

1. The declarations sought by the wife with respect to the amounts owing pursuant to the orders of Bell J made on 16 April 2013 ought be made.

2. The contempt identified in these reasons in dealing with the contempt application having been established, that application ought be adjourned for the purpose of further directions and the fixing of a hearing date to determine the question of sanction.

3. Likewise, that is so with respect to the contravention application. 

4. As already noted, the question of the husband’s passport and the question of costs of the proceedings more generally, ought be considered as part of the final determination of these proceedings referred to.

5. Otherwise, the husband’s application for orders as contained in his Amended Response to an Application in a Case filed on 5 August 2015 will be dismissed. 

6. For these reasons I make the declarations and orders set out at the commencement of these reasons.

I certify that the preceding one hundred and forty-five (145) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Kent delivered on 28 April 2017.

Associate:

Date:  28 April 2017