Coalter & Loxton
[2021] FedCFamC1F 283
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 1)
Coalter & Loxton [2021] FedCFamC1F 283
File number(s): SYC 4681 of 2016 Judgment of: HENDERSON J Date of judgment: 15 December 2021 Catchwords: FAMILY LAW – CONTRAVENTION – Respondent pled guilty to 3 counts of breaching financial orders of the Court – Serious, ongoing and flagrant breaches of the Court orders and obligations of disclosure – Respondent failed to attend hearing – Where no reasonable excuse was found
Sentence – applicant mother seeks a term of imprisonment pursuant to the Courts powers under section 112AD(2)(d) of the Family Law Act 1975 (Cth)(“the Act”) – Where the court is satisfied that it would not be appropriate to deal with the contravention under any other option as set out in subsections (a) to (c) of section 112AD(2) of the Act other than term of imprisonment – applicant sentenced to a term of imprisonment of 6 months, suspended on conditions – Warrant to issue, to lie in registry and to be activated in event father fails to comply with conditions of the suspended sentence.Legislation: Family Law Act 1975 (Cth) Part XIIA, ss112AD, 112AE, 112AF, 112AG
Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 6.02
Cases cited: Cluny & Skinner(No 2) [2017] FamCA 547 Division: Division 1 First Instance Number of paragraphs: 132 Date of hearing: 30 November 2021 Place: Sydney Solicitor for the Applicant: Ms Carroll Solicitor for the Respondent: Mr Yakenian ORDERS
SYC 4681 of 2016 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 1)
BETWEEN: MS COALTER
Applicant
AND: MR LOXTON
Respondent
ORDER MADE BY:
HENDERSON J
DATE OF ORDER:
15 DECEMBER 2021
THE COURT FINDS THAT:
1.The respondent, Mr Loxton born … 1985, is found guilty without reasonable excuse of contravening orders made on 12 May 2020.
2.The respondent, is found guilty without reasonable excuse of contravening Orders 1 and 2 of orders made on 20 August 2020
3.The respondent is found guilty without reasonable excuse of contravening Order 3 of orders made on 1 October 2020.
THE COURT ORDERS THAT:
4.Pursuant s 112AD(2)(d) of the Family Law Act 1975 (Cth), the respondent, Mr Loxton born … 1985, is sentenced to a term of imprisonment for 6 months commencing 15 December 2021 and ceasing on 15 June 2022.
5.The sentence is suspended on the following terms and conditions being complied with by the respondent by no later than 4 pm on 2 February 2022 which conditions are as follows;
6.That the respondent, Mr Loxton provide to the Solicitors for the Applicant the following:-
(a)all documents, records, writings, minutes and correspondence pertaining to the purchase and sale of real property by him, B Pty Ltd, C Pty Ltd and any other entity in which he has an interest or control, including by way of a business name, both within the States of New South Wales and Queensland or any other place within Australia;
(b)That the Respondent comply with the Orders of the Court made 16 August 2018 as to the provision of sworn evidence supported by banking records and other relevant documents evidencing the application of money withdrawn from National Australia Bank account no. …77 conducted in the name of C Pty Limited with respect to the following transactions:
(i)12/04/2017 in the sum of $66,070
(ii)13/04/2017 in the sum of $548,045
(iii)27/04/2017 in the sums of $10,000 and $5,000
(iv)03/05/2017 in the sum of $9,000
(v)10/05/2017 in the sum of $5,000
(vi)11/05/2017 in the sum of $5,000
(vii)29/05/2017 in the sum of $9,000
together with details as to the application of the sum of $200,460 paid to the D Lawyers Trust Account by way of cheque drawn upon E Lawyers Trust Account on 04/04/2017 with respect to a contract entered into between C Pty Limited and F Pty Limited.
(c)Copies of statements of account for each bank account conducted by Mr Loxton solely or jointly with another person or to which Mr Loxton has the authority to operate on behalf of another person, company, trust or other entity for the four (4) years prior to today’s date of 30 November 2021.
(d)A copy of documents, be they contracts for the sale of land, settlement statements issued to or by solicitors or conveyancers with respect to the purchase and sale of land, together with such documents indicating, or tending to indicate, the direction of cheques paid on the completion of the purchase and sale of land with respect to transactions conducted by Mr Loxton personally or any other private company, trust, partnership or business in which he has an interest for the past five (5) years.
(e)A copy of documents evidencing the expenditure of funds and the receipt of funds with respect to the purchase or sale of real property by Mr Loxton or any entity, including a private company, partnership, business or trust, including transactions where third persons have acted as his trustee and held property on his behalf for the past five (5) years.
(f)A copy of each and every development application commissioned by a private company, partnership, business or trust in which Mr Loxton has an interest for the development of assets undertaken within the five (5) years prior to 30 November 2021.
(g)Copies of contracts, agreements, communications either by letter or email with local government authorities undertaken by Mr Loxton on his own behalf or by a private company, partnership, business or trust in which he has an interest, including on behalf of third parties brought into existence in the five (5) years preceding 30 November 2021.
(h)Copies of Taxation Returns lodge with the Australian Tax Office, or prepared for lodgement with the Australian Tax Office in the five (5) years prior to 30 November 2021, together with copies of any Notices of Assessment issued by the Australian Tax Office or, if no such Taxation Returns have been lodged, copies of correspondence undertaken by Mr Loxton personally with any accountant including, but not limited to, G Accountants, in the five (5) years preceding 30 November 2021, noting the representation made by Mr Loxton by his previous legal representative on 11 March 2021 to the Court that he was arranging for his accountant to prepare his Tax Returns and collating outstanding disclosure documents.
(i)Copies of all correspondence entered into with Mr H and/or J Lawyers with respect to financial transactions undertaken, including documents evidencing the payment or receipt of moneys with Mr H and J Lawyers.
(j)Copies of documents evidencing the terms of employment, engagement as a contractor or otherwise by Mr Loxton with the company K Pty Limited including the provision by Mr Loxton to media and/or advertising companies material promoting K Pty Limited and/or L Pty Limited for the period commencing five (5) years prior to 30 November 2021.
(k)Copies of all documents relevant to employment, contracts or moneys received for services or invested with the company M Pty Limited by Mr Loxton in the five (5) years prior to 30 November 2021.
(l)A statement from the trustee of each and every superannuation fund of which Mr Loxton is a member and such statement to evidence his benefits in each superannuation fund, including self-managed superannuation funds, as at 30 November 2021
(m)A copy of any Trust Deed of which Mr Loxton is the Appointor, Trustee or Beneficiary, or to which he, a child of his or de facto spouse is an eligible beneficiary with respect to capital or income.
(n)Copies of all correspondence with the following entities with respect to the purchase of property in Suburb N, Queensland, both forwarded and received:
(i)O Pty Limited, trading as O Company.
(ii)P Lawyers
(iii)Q Lawyers
(o)Copies of all correspondence or documents received from the following legal practices
(i)R Lawyers
(ii)S Lawyers
(iii)T Lawyers
(iv)U Lawyers
(v)D Lawyers
(vi)V Lawyers
(vii)W Lawyers
(p)Copies of all applications for loans and representations made to financial institutions by Mr Loxton with respect to making applications for credit or finance on his own behalf or on behalf of C Pty Limited, B Pty Limited, K Pty Limited, M Pty Limited, and L Pty Limited or any other entity in which Mr Loxton has an interest, employment or contract with for the five (5) prior to 30 November 2021.
(q)Copies of residential tenancy agreement, lease, licence or documents tending to evidence a right to occupy residential premises including, but not limited to Z Street, Suburb AA, Queensland and BB Street, Suburb CC and documents evidencing the source of funds for payment of the right to occupy such premises
(r)Such document evidencing the current address and right to occupy such address of Mr Loxton including, but not limited to, residential tenancy agreement, lease, licence or other agreement setting out the terms upon which Mr Loxton is able to occupy such premises.
(s)Copies of any credit card statements issued to Mr Loxton or for which he has made payments on his own behalf or any other person or entity including such private company, business, partnership or trust in which he has an interest for the five years prior to 30 November, 2021.
(t)Copies of all documents evidencing the transfer of money to, or receipt of money from, the persons Ms DD or Ms EE in the five (5) years prior to 30 November 2021.
(u)Documents evidencing the ownership of motor vehicles in the possession or control of Mr Loxton that he has had the use of in the five (5) years prior to 6 August 2021 and not limited to the following makes of vehicle: Motor Vehicle 1, Motor Vehicle 2, Motor Vehicle 3 and Motor Vehicle 4 and a copy of any agreement either as to the commercial hire purchase, lease or financial agreement with a provider or credit or with any other person or entity who has afforded the use of motor vehicles to Mr Loxton in the five (5) years prior to 30 November 2021.
(v)Copies of all documents evidencing flights and accommodation undertaken by Mr Loxton in the three (3) years prior to 30 November 2021 including, but not limited to receipts for the purchase of airfares and for the accommodation provided to Mr Loxton identifying where possible the source of payment for such flights and accommodation, together with the statements from any frequent flyer program to which Mr Loxton may be a member for the three (3) years prior to 30 November 2021.
(w)Copies of all documents evidencing the disposal of property, both real and personal, undertaken by Mr Loxton in the five (5) years preceding 30 November 2021 including, but not limited to, goods and chattels, real property and motor vehicles either held by him personally or by any private company, partnership, business or trust in which he may have an interest.
(x)To pay the applicants costs of $3,000 pursuant to the Orders of 10 August 2021.
7.In event the respondent fails to comply with the conditions of the suspended sentence specified in Order 6 herein, the suspension is lifted and his remaining sentence shall be immediately effective
8.A warrant to issue directed to Mr Loxton to lie in the Registry in the event the respondent does not comply with the conditions of his suspended sentence.
9.In the event that there is no compliance by the respondent with the conditions of his suspended sentence, the warrant to issue forthwith upon the applicant providing to the Court by way of affidavit confirmation of noncompliance with the conditions of the suspended sentence.
10.Upon the warrant being issued the term of imprisonment will come into effect immediately and Mr Loxton is to be arrested and taken to a prison and not released until he complies with the conditions of his suspended sentence or until the sentence expires and upon which ever event occurs first.
11.In the event the respondent complies with the conditions of his suspended sentence the sentence is to be immediately revoked.
Note: The form of the order is subject to the entry in the Court’s records.
Note: This copy of the Court’s Reasons for judgment may be subject to review to remedy minor typographical or grammatical errors (r 10.14(b) Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 10.13 Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth).
Section 121 of the Family Law Act 1975 (Cth) makes it an offence, except in very limited circumstances, to publish proceedings that identify persons, associated persons, or witnesses involved in family law proceedings.
IT IS NOTED that publication of this judgment by this Court under the pseudonyms Coalter & Loxton has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
REASONS FOR JUDGMENT
This is a hearing of the respondent fathers’ reasonable excuse for his failure to comply with orders of the Court going back to 2018 to carry out his obligation of full and frank disclosure and provide discovery as sought and ordered to the applicant, to file an undertaking as to disclosure and failing doing so to file an affidavit explaining his failure to comply and finally to attend Court either in person or electronically on each occasion.
The applicant for the contravention is, Ms Coalter the former de facto partner of the respondent, Mr Loxton. The parties have twin boys, aged 8 years.
On 28 July 2021 the respondent pleaded guilty to all counts of the contraventions alleged by the applicant. He was at that time represented and continues to be represented by Mr Yakenian.
Ms Carroll represented the applicant and Mr Yakenian the respondent.
The material I read was as follows:
(1)For the applicant:
(a)Application for Contravention of Order filed 9 February 2021;
(b)Affidavits of the applicant sworn on 23 January 2021 and 30 September 2021 and annexing exhibits;
(c)Case Outline; and
(d)Proposed orders sought, marked Exhibit 1
(2)For the respondent:
(a)Affidavits of the respondent sworn on 26 June 2020 and 25 August 2021;
(b)Financial Statement filed 26 June 2020
The respondent failed to attend Court either in person or electronically as ordered. This is long standing behaviour by the respondent
The Application for Contravention was filed on 9 February 2021 and the respondent has pleaded guilty to the following counts:
(1)That the respondent failed to comply with an Order made 20 August 2020 in that he failed to:
(a)File in accordance with Order 1 of that order and within 21 days, an undertaking as to disclosure in the terms required by the order no later than 11 September 2020.
(b)The respondent failed to file an affidavit in the circumstances where he was unable to file an undertaking as to disclosure as ordered and, in that affidavit, set out precisely:
(i)Identify all information and documents he has a duty to disclose but has not disclosed;
(ii)Sets out each reason why such information and documents have not been disclosed;
(iii)Details all steps the respondent is taking or will take to satisfy the duty of disclosure in relation to such documents; and
(iv)Date by which the respondent’s duty of disclosure with be completed.
(2)That by order made 12 May 2020, the respondent was required to, within 28 days, comply with Order 5 of orders made on 16 August 2018 which required him to file and serve an affidavit supported by banking records and other relevant documents evidencing the application of monies and withdrawn from the National Australia Bank account number …77 conducted in the name of C Pty Ltd (“the C Pty Ltd account”), and thereafter explain that application of certain sums is set out in subparagraphs a-g of Order 5 made 16 August 2018 and he failed to do so as ordered.
(3)That he breached Order 3 made 1 October 2020 in that he failed, by 10 November 2020, appear via electronic means on 10 November 2020 at 9.30 am in the proceedings before the court.
The applicant sought I impose an immediate term of imprisonment of 6 months upon him in the event his reasonable excuse for his failure to comply was not successful. Further, that when he did comply with the applicant’s request for information, he would be released
The Orders that the applicant asked the court to make for information and documents to be provided by the respondent are set out in Exhibit 1 and are as follows:
(1) That the respondent, Mr Loxton provide to the Solicitors to the Applicant:-
(a) All documents, records, writings, minutes and correspondence pertaining to the purchase and sale of real property by him, B Pty Ltd, C Pty Ltd and any other entity in which he has an interest or control, including by way of a business name, both within the States of New South Wales and Queensland or any other place within Australia;
(b) That the Respondent comply with the Orders of the Court made 16 August 2018 as to the provision of sworn evidence supported by banking records and other relevant documents evidencing the application of money withdrawn from National Australia Bank account no. …77 conducted in the name of C Pty Limited with respect to the following transactions:
(i) 12/04/2017 in the sum of $66,070
(ii) 13/04/2017 in the sum of $548,045
(iii) 27/04/2017 in the sums of $10,000 and $5,000
(iv) 03/05/2017 in the sum of $9,000
(v) 10/05/2017 in the sum of $5,000
(vi) 11/05/2017 in the sum of $5,000
(vii) 29/05/2017 in the sum of $9,000
together with details as to the application of the sum of $200,460 paid to the D Lawyers Trust Account by way of cheque drawn upon E Lawyers Trust Account on 04/04/2017 with respect to a contract entered into between C Pty Limited and F Pty Limited.
(c) Copies of statements of account for each bank account conducted by Mr Loxton solely or jointly with another person or to which Mr Loxton has the authority to operate on behalf of another person, company, trust or other entity for the four (4) years prior to today’s date of 30 November 2021.
(d) A copy of documents, be they contracts for the sale of land, settlement statements issued to or by solicitors or conveyancers with respect to the purchase and sale of land, together with such documents indicating, or tending to indicate, the direction of cheques paid on the completion of the purchase and sale of land with respect to transactions conducted by Mr Loxton personally or any other private company, trust, partnership or business in which he has an interest for the past five (5) years.
(e) A copy of documents evidencing the expenditure of funds and the receipt of funds with respect to the purchase or sale of real property by Mr Loxton or any entity, including a private company, partnership, business or trust, including transactions where third persons have acted as his trustee and held property on his behalf for the past five (5) years.
(f) A copy of each and every development application commissioned by a private company, partnership, business or trust in which Mr Loxton has an interest for the development of assets undertaken within the five (5) years prior to 30 November 2021.
(g) Copies of contracts, agreements, communications either by letter or email with local government authorities undertaken by Mr Loxton on his own behalf or by a private company, partnership, business or trust in which he has an interest, including on behalf of third parties brought into existence in the five (5) years preceding 30 November 2021.
(h) Copies of Taxation Returns lodge with the Australian Tax Office, or prepared for lodgement with the Australian Tax Office in the five (5) years prior to 30 November 2021, together with copies of any Notices of Assessment issued by the Australian Tax Office or, if no such Taxation Returns have been lodged, copies of correspondence undertaken by Mr Loxton personally with any accountant including, but not limited to, G Accountants, in the five (5) years preceding 30 November 2021, noting the representation made by Mr Loxton by his previous legal representative on 11 March 2021 to the Court that he was arranging for his accountant to prepare his Tax Returns and collating outstanding disclosure documents.
(i) Copies of all correspondence entered into with Mr H and/or J Lawyers with respect to financial transactions undertaken, including documents evidencing the payment or receipt of moneys with Mr H and J Lawyers.
(j) Copies of documents evidencing the terms of employment, engagement as a contractor or otherwise by Mr Loxton with the company K Pty Limited including the provision by Mr Loxton to media and/or advertising companies material promoting K Pty Limited and/or L Pty Limited for the period commencing five (5) years prior to 30 November 2021.
(k) Copies of all documents relevant to employment, contracts or moneys received for services or invested with the company M Pty Limited by Mr Loxton in the five (5) years prior to 30 November 2021.
(l) A statement from the trustee of each and every superannuation fund of which Mr Loxton is a member and such statement to evidence his benefits in each superannuation fund, including self-managed superannuation funds, as at 30 November 2021
(m) A copy of any Trust Deed of which Mr Loxton is the Appointor, Trustee or Beneficiary, or to which he, a child of his or de facto spouse is an eligible beneficiary with respect to capital or income.
(n) Copies of all correspondence with the following entities with respect to the purchase of property in Suburb N, Queensland, both forwarded and received:
(i) O Pty Limited, trading as O Company;
(ii) P Lawyers;
(iii) Q Lawyers;
(o) Copies of all correspondence or documents received from the following legal practices:
(i) R Lawyers
(ii) S Lawyers
(iii) T Lawyers
(iv) U Lawyers
(v) D Lawyers
(vi) V Lawyers
(vii) W Lawyers
(p) Copies of all applications for loans and representations made to financial institutions by Mr Loxton with respect to making applications for credit or finance on his own behalf or on behalf of C Pty Limited, B Pty Limited, K Pty Limited, M Pty Limited, and L Pty Limited or any other entity in which Mr Loxton has an interest, employment or contract with for the five (5) prior to 30 November 2021.
(q) Copies of residential tenancy agreement, lease, licence or documents tending to evidence a right to occupy residential premises including, but not limited to Z Street, Suburb AA, Queensland and BB Street, Suburb CC and documents evidencing the source of funds for payment of the right to occupy such premises
(r) Such document evidencing the current address and right to occupy such address of Mr Loxton including, but not limited to, residential tenancy agreement, lease, licence or other agreement setting out the terms upon which Mr Loxton is able to occupy such premises.
(s) Copies of any credit card statements issued to Mr Loxton or for which he has made payments on his own behalf or any other person or entity including such private company, business, partnership or trust in which he has an interest for the five years prior to 30 November, 2021.
(t) Copies of all documents evidencing the transfer of money to, or receipt of money from, the persons Ms DD or Ms EE in the five (5) years prior to 30 November 2021.
(u) Documents evidencing the ownership of motor vehicles in the possession or control of Mr Loxton that he has had the use of in the five (5) years prior to 6 August 2021 and not limited to the following makes of vehicle: Motor Vehicle 1, Motor Vehicle 2, Motor Vehicle 3 and Motor Vehicle 4 and a copy of any agreement either as to the commercial hire purchase, lease or financial agreement with a provider or credit or with any other person or entity who has afforded the use of motor vehicles to Mr Loxton in the five (5) years prior to 30 November 2021.
(v) Copies of all documents evidencing flights and accommodation undertaken by Mr Loxton in the three (3) years prior to 30 November 2021 including, but not limited to receipts for the purchase of airfares and for the accommodation provided to Mr Loxton identifying where possible the source of payment for such flights and accommodation, together with the statements from any frequent flyer program to which Mr Loxton may be a member for the three (3) years prior to 30 November 2021.
(w) Copies of all documents evidencing the disposal of property, both real and personal, undertaken by Mr Loxton in the five (5) years preceding 30 November 2021 including, but not limited to, goods and chattels, real property and motor vehicles either held by him personally or by any private company, partnership, business or trust in which he may have an interest.
(x) To pay the costs of $3,000 pursuant to the Orders of 10 August 2021.
The respondent was and is represented by Mr Yakenian. On 28 July 2021, he pleaded guilty to all counts of contravening court orders and the matter was listed for hearing of his reasonable excuse on 6 August 2021.
The respondent was to file an affidavit setting out his reasonable excuse by no later than 5 pm on 4 August 2021 and was ordered to attend Court personally given the serious sentence the applicant sought I impose upon him.
The hearing of the respondents reasonable excuse was stood over for hearing to 30 November 2021 and he was ordered to attend Court personally given the serious sentence the applicant sought I impose upon him.
The respondent failed to comply with the timetable. However, he did file an affidavit setting out his reasonable excuse on 25 August 2021 and relied upon an affidavit of 26 June 2020 allegedly in compliance with orders made on 12 May 2020 to comply with his obligations of disclosure.
The respondent has not attended any court event and has failed to attend court since 2018, save on 27 April 2020 and 19 April 2021.
He failed to attend court for the hearing of his reasonable excuse application on 30 November 2021 in circumstances where it was clear to his lawyer and the Court that the applicant was seeking a term of imprisonment be ordered by the court due to his abject failure to comply, at any meaningful level, with the orders made by this court and his obligation pursuant to rule 6.01 of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) (“the Rules”), of full and frank disclosure of his financial dealings.
The relevant procedural chronology is as follows.
On 16 August 2018 orders were made by myself ordering the respondent to file his response material and an Affidavit, supported by banking records and other relevant documents, evidencing the application of money withdrawn from the C Pty Ltd account with respect of specific transactions outlined in subparagraphs a-g.
On 13 November 2018, the first contravention application was filed by the applicant
On 12 December 2018, the contravention was found and the respondent was placed on a good behaviour bound for 12 months, was ordered to comply with the orders made on 16 August 2018 and was ordered to attend court on the 5 March 2019 and on every subsequent court date.
On 5 March 2019 Judge Boyle made orders for the respondent to file and serve an affidavit explaining his absence at court.
On 13 March 2019 a second contravention application was filed by the applicant.
On 3 May 2019 Judge Smith made the following orders:
(3)That the company, B Pty Ltd, (ACN …) be joined to these proceedings noting that this is a company in which the Respondent is the sole director, company secretary and shareholder.
(4)That the Respondent, on his own account, and as a director, company secretary and shareholder of B Pty Ltd, and of any other entity or business name under which he may have a controlling interest or trade as, herewith be restrained by injunction and remain restrained from dealing with the proceeds of sale of real property that he or the company B Pty Ltd may receive upon any sale of the real property known as FF Street, Suburb N in the State of Queensland, being the whole of the land described in Lot …, title reference: …, or of any other real property in which the Respondent, B Pty Ltd, C Pty Ltd (“C Pty Ltd”), the entity known as GG Pty Ltd may have, other than in accordance with this Order
(5)That on the completion of any sale of the property known as FF Street, Suburb N, or the sale of any other real property, by either the Respondent or B Pty Ltd or C Pty Ltd or any other entity in which the First Respondent has an interest, that after the payment of the following:
(a)The costs of sale including commission, discharge of mortgage and any other encumbrance affecting the title;
(b)The costs of conveyancing of the property
(i)Thereafter the balance remaining is to be paid to the trust account of the Applicant's Solicitor, Crawford Ryan Lawyers.
…
(7)Pending the making of further Order that the First Respondent be restrained by injunction from:
(a)Resigning as a director or company secretary or transferring his shares in the company, B Pty Ltd pending further Order of the Court.
(b)Resigning as a director or company secretary or transferring his shares in the company, C Pty Ltd
(c)Instructing any other Solicitor or Conveyancer to act upon the sale of the real property situate and known as FF Street, Suburb N, other than P Lawyers with respect to the sale of that property or any other property owned by the First Respondent, B Pty Ltd, C Pty Ltd or any other entity in which he has an interest or control thereof pending further Order of the Court.
(8)That within 48 hours of the date of service of these Orders upon the First Respondent that he is to provide a copy of an irrevocable authority directed to P Lawyers that requires the payment of the net proceeds of any sale after the completion of the sale of the property at FF Street, Suburb N to be paid to the trust account of Crawford Ryan Lawyers Pty Ltd, and if the Respondent does not provide such written authority within 48 hours of the date of the service of the Orders made by the Court in accordance with this Application, within 48 hours of the date of service, then a Registrar of the Federal Circuit Court at Sydney is appointed to execute such irrevocable authority pursuant to the provisions of Section 106A of the Family Law Act 1975 in the name of the First Respondent including, as a director or company secretary of the company, B Pty Ltd
(9)That pending further Order of the Court that the Solicitors for the Applicant, Crawford Ryan Lawyers Pty Ltd be required to hold the net proceeds of sale in their trust account, or if agreed between the parties by way of controlled monies and each of the parties shall do all such acts and things and provide such information as may be required from time to time to provide for the investment of the monies paid to Crawford Ryan Lawyers Pty Ltd trust account in a controlled monies account.
(10)That within 14 days of the date of the making of this Order the First Respondent provide all documents, records, writings, minutes and correspondence pertaining to the purchase and sale of real property by him, B Pty Ltd, C Pty Ltd and any other entity in which he has an interest or control, including by way of a business name, both within the States of New South Wales and Queensland or any other place within Australia to the Solicitors for the Applicant, Crawford Ryan Lawyers Pty Ltd.
…
(12)Within 14 days, the Respondent file and serve an Affidavit explaining his absence on 5 March 2019 and 3 May 2019 including any medical evidence upon which he intends to rely.
(13)Within 28 days, the Respondent to comply with the extant Orders made on 16 August 2018 to the extent he has not already done so
(14)Within 56 days, the Respondent file and serve their Response to the Contravention Application filed 13 March 2019 and any Affidavit evidence in support of the Orders sought by them.
These orders and directions have not been complied with.
On 5 August 2019 Judge Smith made orders that the respondent file and serve any Response to an Initiating Application or Response to a Contravention Application upon which he intends to rely by no later than 4pm on 9 September 2019
On 14 October 2019 matter was listed before Judge Smith for contravention. There was no appearance by the respondent.
On 4 December 2019 matter was listed before Judge Smith for contravention. There was appearance by the respondent
On 27 April 2020 matter was listed before Judge Smith. The respondent appeared and the matter was adjourned.
On 12 May 2020 matter was listed for mention. The respondent was legally represented. The respondent was ordered to file a financial statement and an affidavit in support of any orders sought and the respondent was ordered to comply with his obligation of full and frank disclosure.
On 26 June 2020 the respondent filed an affidavit annexing NAB records for the C Pty Ltd account between 4 March 2017 and 1 September 2017, and a financial statement.
On 29 June 2020 Judge Smith ordered the parties to attend at conciliation conference and for each party to provide full and frank disclosure.
On 20 August 2020 the matter was listed for mention. Orders were made by Registrar McGrath, that each party file an undertaking that within 21 days, each party must do all things necessary to satisfy their duty of full and frank disclosure and failing that, to file and serve an affidavit.
On 1 October 2020 Judge Smith makes orders that the respondent be required by injunction to appear via electronic means on the next occasion, whether he is legally represented or not and adjourned the matter to November 2020.
On 9 November 2020 Judge Smith adjourns the matter to 19 February 2021 for contravention hearing.
On 9 February 2021 the applicant files an updated contravention application.
On 16 February 2021 the contravention hearing was vacated and relisted on 2 August 2021. Orders were also made for the respondent to appear in person at the hearing, or otherwise via Microsoft Teams.
On 11 March 2021 the matter was listed in the contravention list before Registrar Ryan. There was no attendance by the respondent. The Court was advised that the respondent was arranging for his accountant to prepare his tax returns and is collating outstanding disclosure documents.
On 1 April 2021, the matter was listed and there was no appearance by the respondent. The respondent was put on notice that a warrant may be issued for his arrest if he does not appear.
On 19 April 2021 the matter was transferred to the Family Court of Australia, as it then was, and the respondent was ordered to file a Response to a Contravention Application together with supporting affidavits.
On 24 May 2021 the matter was listed for a case management hearing.
On 7 June 2021 the matter was listed before Registrar McNamara, and the respondent was reminded of the orders of 16 February 2021.
On 9 July 2021 matter is adjourned in chambers.
On 28 July 2021 the respondent is ordered to file and serve affidavit in support no later than 4 August 2021.
On 6 August 2021 the matter is adjourned.
On 10 August 2021 the respondent was ordered to pay costs to the applicant of $3000 and to provide by way of affidavit, answers and/or information as requested from him by the applicants lawyers and, if he is unable to supply all requested information within 14 days he is to set out in the Affidavit the reasons why he cannot provide that information as Ordered and he has a further 14 days thereafter to provide that information and/or provide answers as requested.
On 25 August 2021 an affidavit was filed by the respondent.
On 1 October 2021 an affidavit was filed by the applicant.
The matter was listed before Justice Henderson for a contravention hearing which was heard on 28 July 2021.
The matter was listed on 5 October 2021 on the respondent’s application that he had a reasonable excuse for his contravention of orders, and ultimately heard on 30 November 2021.
Short Chronology
Parties commenced co-habitation in mid-2011.
Their twins were born in 2013.
Parties separated on 4 August 2014.
FINDINGS
The reality is the respondent has simply ignored every order the court has made in relation to providing documents and information sought by the applicant, or attending Court or filing affidavits as to why he could not comply. He has told the Court he was in the process of filing tax returns on multiple occasions and was seeking an accountant’s assistance to do so. Yet, at the end of November 2021 he has not filed or provided any tax returns.
Contravention of Orders of 12 May 2020
The respondent’s affidavit filed 26 June 2020, deposes that he became a shareholder of C Pty Ltd on about 20 November 2017 and therefore was unaware of any prior financial dealings by that company, being the withdrawal of significant sums of money from the account of the company, commencing 12 April 2017 up to 29 May 2017 totalling some $650,000; and the use of a cheque of $200,460 drawn on E Lawyers Trust Account in respect of a contract entered into between C Pty Ltd and F Proprietary Limited.
His explanation was that he only became a director of the C Pty Ltd on 20 November 2017 and “I am not aware of the financial dealings of the company prior to November 2017” (at para 30). That is an unacceptable answer. If a party becomes a director of a company, they have immediate access to the financial records of that company including records in the past, and he could have been obtained from accountants or the bank.
The respondent has simply failed to engage and carry out what are his obligations of disclosure pursuant to rule 6.01 of the current Rules.
The respondent had an obligation to set out where the money in the C Pty Ltd account, has gone, or on what, or how it has been spent. The applicant asserts that this was money acquired during their relationship and was and should still be available for division between them.
The inescapable conclusion from the respondent’s behaviour is that he has hidden that money using the subterfuge of, “I didn’t become a director until after the events occurred. My mother was the director at the time, not me” as an excuse why he hasn’t disclosed its whereabouts.
It is clear from the applicant’s affidavit filed in answer to the respondent’s affidavit of 25 August 2021 that the respondent continues to conduct business as a sales professional in Queensland and has continued to use his mother to hide his involvement in the purchase of and development of assets as will become clear from the findings that follow. This conduct is support for the applicant’s contention that the respondent has engaged in a course of conduct to defeat the applicant’s claim in this court.
I find the respondent has not made out a reasonable excuse for his failure to comply with orders made on 12 May 2020 to serve an affidavit supported by banking records and other relevant documents, evidencing the application of moneys withdrawn from the C Pty Ltd account, and I find him guilty of that count without reasonable excuse.
Contravention of Orders 20 August 2020
Going now to the count that the respondent has failed to file an undertaking in accordance with an order made 20 August 2020, and in lieu of that undertaking, an affidavit as to why he could not so do. The orders made 20 August 2020 were that he was to provide by way of affidavit, answers and/or information as requested from him by the applicant within 14 days. He has failed to do this
There has been no reasonable excuse proffered by him for that failure whatsoever in any of the material filed. He has not filed an affidavit within the time frame specified setting out all information and documents he has had a duty to disclose; why the information has not been disclosed; steps he has taken to satisfy the disclosure; and a date by which his duty of disclosure will be completed.
In his affidavit sworn on 25 August 2021, the respondent says as follows at paragraph 2, “That I will attempt to comply with the disclosure to the best of my ability”. The disclosure sought by the applicant has been sought since September 2018 and is still not provided.
Multiple orders by multiple registrars and multiple judges have been made to ensure his compliance with disclosure and discovery and he has resisted all these attempts from 2018 to date.
The respondent’s answer, or reasonable excuse to this abject failure to disclose and provide documents was via his lawyer, Mr Yakenian, and was as follows, “Most of the information has been supplied by subpoena and the applicant should know of it”. This is no answer to the respondent’s longstanding failure to carry out his obligation to disclose. I do not accept that this is the case in any event for I was not taken to any subpoenaed material that could have verified this submission in the respondents defence.
Secondly, the respondent’s affidavit of 25 August 2021 at paragraph 3 states, “where I am unable to provide information, I undertake to forward the balance within 14 days unless it is not in my power to do so”.
No information was forthcoming 14 days after he filed the affidavit. No affidavit or submission was made explaining why he was unable to do so.
The respondent asserts at paragraph 4, that all these documents relating to C Pty Ltd were in the Motor Vehicle 3 which was stolen on 4 April 2021. That is no excuse for his failure to provide those documents to the applicant from 2018 when the first order was made until the documents were allegedly stolen in April 2021. There is no reasonable excuse for his failure to comply with that order set out in his affidavit.
The respondent says at paragraph 5 that C Pty Ltd is in liquidation and that the information can be obtained by the liquidator. The respondent’s obligation is to obtain the information, not put it on to the applicant. That is not a reasonable excuse.
At paragraph 6 of his affidavit, the respondent attaches bank records of his personal account at Commonwealth Bank from August 2020-August 2021 which is all he says he has, and he deposes that he has asked the Commonwealth Bank to provide him with all his statements and that he will have those disclosed within 14 days. He did not disclose any further bank statements for those accounts attached to his affidavit. The bank statements attached to his affidavit were in relation to the Commonwealth Bank account, but he did not disclose a HH Bank account which he had referred to in a financial statement filed in 2020 in these proceedings. That is not a reasonable excuse for failure to comply.
At paragraph 7, the respondent states, “all other documents sought have been subpoenaed”. This is not a reasonable excuse for his failure to comply.
The respondent denies he has purchased properties in his name or in the name of a trust or company at paragraph 8. It is clear from the affidavit filed by the applicant and the documents she has attached to that affidavit that this is simply not true. At paragraph 13d of the applicant’s affidavit sworn on 30 September 2021, she says as follows:
…exhibited at TAB F is a copy of a Trust Account Authority executed by Ms JJ and Ms EE providing a direction as to payment of funds. The Trust Account Authority has an alteration with respect to the payment of $272,500, which was to be paid to KK Lawyers Trust Account. The reason recorded is, “Balance deposit payable for Mr Loxton’s purchase of LL Street, Suburb MM”.
(Emphasis per original)
Ms EE is the respondent’s mother. That email is dated 3 June 2021 and is a document from NN Lawyers with whom the respondent and his mother have had dealings in relation to the purchase of properties.
Further, the applicants evidence in her September 2021 affidavit disclosed Mr Loxton was contacting NN Lawyers on 3 June 2021 via email asking as follows:
Please forward funds as matter of urgency for settlement on another property. All funds be dispersed as attached. Mr Loxton (Annexure G to the applicant’s affidavit sworn on 30 September 2021).
This is in respect of a sale by Ms JJ to NN Lawyers of Z Street, Suburb AA. These emails satisfy me that Mr Loxton was involved in a sale of a property at Suburb AA in order to purchase a property at Suburb MM. The email trail that the applicant has been able to discover confirms that these are not the only transactions the respondent has been involved in and in which he has included his mother. The respondent simply lied in paragraph 8 of his affidavit.
The respondent says at paragraph 9 of the same affidavit, “I would state that I was neither a director nor shareholder of [C Pty Ltd]”. That is inconsistent with his affidavit filed in 26 June 2020 paragraph 4 where he says, “On 20 November 2017, I became a director and shareholder of [C Pty Ltd]”.
The respondent says he has not had any development applications commissioned. I do not accept any of the respondent’s evidence in his affidavit given his lies that he has not purchased property or had any dealing with property since 2018 and had not been a director of C Pty Ltd.
At paragraph 12 of his affidavit sworn on 25 August 2021, he asserts that he has not prepared tax returns for the last 10 years and “has just been in contact with OO Accountants at PP Street in Suburb QQ, and will be expediting [his returns]”. Yet, he stated in Court before Registrar Ryan in March 2021, that he was arranging for his accountant to prepare his tax returns and was collating outstanding disclosure documents. Nothing arose from that false statement to the Court.
The applicant, doing her best investigation work, attached to her affidavit sworn on 23 January 2021, Annexure D being a printout taken from the website of K Proprietary Limited (“K Pty Ltd”) which included a profile of the respondent, together with his photographs, describing him as the CEO of K Pty Ltd.
Again, at paragraph 14 of his affidavit sworn on 25 August 2021, the respondent said he would have his employment details in relation to K Pty Ltd provided within 14 days. No such document was provided.
At paragraph 15 of the same affidavit, the respondent states, “I am not involved with the M Proprietary Limited”. The applicant’s Annexure E to her affidavit sworn on 23 January 2021 tells a different story. This is a document from the internet about M Proprietary Limited (“M Pty Ltd”) and the respondent whose photograph appears on the page and is recognised by the applicant as the father of her children and is as follows :
Mr Loxton, [Sales], M Pty Ltd. Mr Loxton has 20+ years of experience across [sales and finance] and has personally delivered [largescale sales projects]. Mr Loxton’s business career has been predominantly focused in Australia....
Again, the respondent lied to the Court asserting he had no involvement with this group, M Pty Ltd.
The father’s affidavit is nothing but a thin tissue of lies, utterings and falsehood. His assertions of attempting to obtain documents such as tax returns, the C Pty Ltd bank records, documents in relation to his employment with K Pty Ltd, failure to provide a lease of properties he has owned, provide his travel details and assertions he does not want to provide his address because he is concerned in some way of the applicant is not accepted by the Court and do not provide a reasonable excuse. The applicant and not the respondent have provided the Court with documents evidencing his dealings in the purchase and sale of properties and documents evidencing his obvious and continued occupation as a sales professional.
These are all important documents for the applicant and the Court in order to determine this matter and the respondent has not satisfied me he has any excuse for his behaviour let alone a reasonable excuse. I find his actions have been designed to frustrate the wife and hide his assets and business dealings from her and the Court and I find he is guilty without reasonable excuse for these contraventions.
Failing to attend Court in person or electronically
The respondent has provided no excuse for his failure to comply with multiple orders he attend Court and I find him guilty without reasonable excuse for contravening orders made 1 October 2020 to so attend.
THE LAW
Going now to penalty.
This is a matter heard under Part XIIA of the Family Law Act 1975 (Cth) (“the Act”), and constitutes a serious breach by the respondent of his obligation to provide full and frank disclosure of his financial dealings and details, both in the past and currently, and failure to abide by any order of this court, including orders such as to pay the applicant’s costs of $3000.
The respondent has failed to attend personally, or by way of Microsoft Teams or any other electronic means, to the court on any occasion since 2018 apart from two appearances in 2020, despite orders he do so.
The respondent has treated the Court and orders of the Court contemptuously. He has treated his obligation under the Law to provide full and frank disclosure, so that the applicant can proceed with her property application contemptuously.
His conduct and attitude is a serious, longstanding, ongoing breach of orders and his attitude bespeaks of antisocial behaviour and conduct towards civilised society and the rule of law under which a civilised society operates.
Section 112AD of the Act sets out the options I have for a breach of financial orders.
An erudite decision of Kent J in Cluny & Skinner(No 2) [2017] FamCA 547 (“Cluny & Skinner (No2.)”) sets out clearly the path I am to take. In his judgement His Honour set out the contraventions of the respondent before him, noting they were serious, substantial and enduring, and that a substantial sum of money was owed to the applicant. In that matter, the respondent had failed to comply with property orders.
The applicant in this matter has been endeavouring to get to the first stage of a property matter in this Court, namely, to identify the pool for division, and she has been thwarted at every attempt to so do by the respondent’s conduct and actions.
His Honour notes that:
…Whilst it is the contraventions [that are alleged by an applicant and which are found that the court is to deal with], it is to be noted that s 112AD(4) permits, where a sanction is imposed under 112AD(1), the making of such other orders as the court considers necessary to ensure compliance with the order that was contravened (at paragraph 55).[1]
[1] Cluny & Skinner(No 2) [2017] FamCA 547 at 55.
Section 112AD sets out the sanctions for failure to comply with orders as follows:
112AD Sanction for failure to comply with orders
If a court having jurisdiction under this Act is satisfied that a person has, without reasonable excuse, contravened an order under this Act, the court may make an order for the imposing, in respect of the person, of one or more of the sanctions available to be imposed under subsection (2), being a sanction or sanctions that the court considers to be the most appropriate in the circumstances.
(1A) The power given to the court under subsection (1) in respect of a contravention of a maintenance order applies even if the order has been complied with before the matter of the contravention comes before the court.
(2) The sanctions that are available to be imposed by the court are:
(a) to require the person to enter into a bond in accordance with section 112AF; or
(b) to impose a sentence by order on the person, or make an order directed to the person, in accordance with section 112AG; or
(c) to fine the person not more than 60 penalty units; or
(d) subject to subsection (2A), to impose a sentence of imprisonment on the person in accordance with section 112AE.
(2A) The court must not impose a sentence of imprisonment on the person under paragraph (2)(d) in respect of a contravention of a maintenance order unless the court is satisfied that the contravention was intentional or fraudulent.
(3) An order under subsection (1) may be expressed to take effect immediately, or at the end of a specified period or on the occurrence of a specified event.
(4) Where a court makes an order under subsection (1), the court may make such other orders as the court considers necessary to ensure compliance with the order that was contravened.
As his Honour says in Cluny & Skinner (No.2) at paragraph 55:
That section thus authorises the court making orders as part of a sanction order or in addition to such an order which addresses ongoing defaults or noncompliance with orders as has occurred here. [2]
[2] Cluny & Skinner(No 2) [2017] FamCA 547 at 55.
This is precisely how the applicant seeks the respondent be dealt with, and sanctioned for his failure to comply with orders and that there be ongoing orders to ensure his compliance into the future to enable the applicant to ascertain the pool for division and finalise this matter.
His Honour set out the sanctions that apply under section 112AE of the Act. They are as follows:
112AE Sentences of imprisonment
(1) A sentence of imprisonment imposed on a person pursuant to paragraph 112AD(2)(d) shall be expressed to be:
(a) for a specified period of 12 months or less; or
(b) for a period ending when the person:
(i) complies with the order concerned; or
(ii) has been imprisoned pursuant to the sentence for 12 months or such lesser period as is specified by the court;
whichever happens first.
(2) A court shall not sentence a person to imprisonment pursuant to paragraph 112AD(2)(d) unless the court is satisfied that, in all the circumstances of the case, it would not be appropriate for the court to deal with the contravention pursuant to any of the other paragraphs of subsection 112AD(2).
(3) If a court sentences a person to imprisonment pursuant to paragraph 112AD(2)(d), the court shall:
(a) state the reasons why it is satisfied as mentioned in subsection (2); and
(b) cause those reasons to be entered in the records of the court.
(4) The failure of a court to comply with subsection (3) does not invalidate a sentence.
(4A) A court that sentences a person to imprisonment under paragraph 112AD(2)(d) may:
(a) suspend the sentence upon the terms and conditions determined by the court; and
(b) terminate a suspension made under paragraph (a).
(5) A court, when sentencing a person to imprisonment under paragraph 112AD(2)(d) may, if it considers it appropriate to do so, direct that the person be released upon the person entering into a bond described in subsection (6) after he or she has served a specified part of the term of imprisonment.
(6) A bond for the purposes of subsection (5) is a bond (with or without surety or security) that the person will be of good behaviour for a specified period of up to 2 years.
(7) Without limiting the circumstances in which a court may discharge an order under section 112AK, a court that has sentenced a person to imprisonment for a period expressed as provided by paragraph (1)(b) may order the release of the person if it is satisfied that the person will, if he or she is released, comply with the order concerned.
(8) To avoid doubt, the serving by a person of a period of imprisonment under a sentence imposed on the person under paragraph 112AD(2)(d) for a failure to make a payment under a maintenance order does not affect the person’s liability to make the payment.
112AF Bonds
(1) This section provides for bonds that a court may require a person to enter into under paragraph 112AD(2)(a).
(2) A bond is to be for a specified period of up to 2 years.
(3) A bond may be:
(a) with or without surety; and
(b) with or without security.
(4) The conditions that may be imposed on a person by a bond include a condition requiring the person to be of good behaviour.
(5) If a court proposes to require a person to enter into a bond, it must, before making the requirement, explain to the person, in language likely to be readily understood by the person:
(a) the purpose and effect of the proposed requirement; and
(b) the consequences that may follow if the person fails:
(i) to enter into the bond; or
(ii) having entered into the bond—to act in accordance with the bond.
112AG Additional sentencing alternatives
(1) Subject to this section, where:
(a) under the law of a participating State or a participating Territory, a court is empowered (whether generally or in particular cases) to impose a sentence by order or make an order of a kind to which subsection (3) applies in respect of a person convicted of an offence against the law of the State or Territory; and
(b) an arrangement under section 112AN in respect of the State or Territory makes provision for and in relation to the carrying out of sentences imposed, or orders made, of that kind under this Division;
a court exercising jurisdiction in the State or Territory may, pursuant to paragraph 112AD(2)(b), impose a sentence or make an order of that kind.
(2) A sentence imposed on a person, or an order directed to a person, pursuant to paragraph 112AD(2)(b):
(a) shall be such that the total number of hours during which the sentence or order regulates the conduct of the person does not exceed the maximum period in relation to the State or Territory in which the sentence is imposed or the order is made; and
(b) ceases to have effect 2 years after it was made, or after such lesser period as is specified in the order.
(3) This subsection applies to sentences or orders of the following kinds:
(a) a sentence or order known as:
(i) a community service order;
(ii) a work order;
(iii) a sentence of periodic detention;
(iv) an attendance centre order;
(v) a sentence of weekend detention;
(vi) an attendance order; or
(vii) a community based order;
(b) a sentence or order that is similar to a sentence or order referred to in paragraph (a);
(c) a sentence or order prescribed for the purposes of this subsection.
(4) Where a court proposes to impose a sentence on a person, or make an order directed to a person, pursuant to paragraph 112AD(2)(b), it shall, before doing so, explain or cause to be explained to the person, in language likely to be readily understood by the person:
(a) the purpose and effect of the proposed sentence or order;
(b) the consequences that may follow if the person fails to comply with the proposed sentence or order or with any requirements made in relation to the proposed sentence or order by or under the applied provisions; and
(c) if the proposed sentence or order may be revoked or varied under the applied provisions—that the proposed sentence or order may be so revoked or varied.
(5) Where a court exercising jurisdiction under section 112AD in a particular State or Territory imposes a sentence or makes an order pursuant to paragraph 112AD(2)(b), the provisions of the laws of the State or Territory with respect to a sentence or order of that kind that is imposed or made under those laws shall, to the extent provided by the regulations and subject to such modifications as are specified in the regulations, apply in relation to the sentence or order.
(6) In this section:
maximum period, in relation to a State or Territory, means 500 hours or such lesser period as is prescribed in relation to the State or Territory.
participating State means a State in relation to which an agreement under section 112AN is in force.
participating Territory means a Territory in relation to which an agreement under section 112AN is in force.
I am satisfied, pursuant to s 112AD(1) of the Act, that the respondent has without reasonable excuse contravened multiple orders of this court and the orders set out in the applicant’s contravention application specifically. In those circumstances I will proceed to impose a sanction to ensure compliance, that being the purpose of s 112AD.
The sanctions I may impose under s 112AD(2) are
(a)require the respondent to enter into a bond;
(b)impose a sentence by order on him;
(c)fine him not more than 60 penalty units; or
(d)subject to subsection (2A), impose a sentence of imprisonment on the person in accordance with s 112AE of the Act. This is the course the applicant urges upon me.
Section 112AD(2A) of the Act provides:
The court must not impose a sentence of imprisonment on the person, under paragraph 2(d) in respect of a contravention of a maintenance order, unless the court is satisfied the contravention was intentional or fraudulent.
That does not apply here however the respondent’s contravention was intentional.
The Act also states at s 112AD(4) that:
Where the court makes an order under subsection 1, the court may make such other orders as the court considers necessary to ensure compliance with the order contravened.
The sentence of imprisonment imposed under s 112AE(1) and; pursuant to subparagraph (a) can be for a specified period of 12 months or less. The applicant seeks six months.
Such a sentence can also, pursuant to subparagraph (b), be for a period ending when the person either (i) complies with the order concerned or (ii) has been imprisoned for 12 months or such less a period as is specified by the court, whichever happens first.
Pursuant to s112AE(2) of the Act:
A court should not sentence a person to imprisonment…unless the court is satisfied that, in all the circumstances of the case, it would not be appropriate for the court to deal with the contravention pursuant to any of the other paragraphs of subsection 112AD(2), which requires a person to enter a bond, impose a sentence by order, or make an order directed to the person, in accordance with section 112AG, or fine them –
The power of imprisonment also includes a power under subparagraph (4A), that the sentence may be suspended upon terms and conditions determined by the court.
Mr Yakenian on behalf of the respondent, asserted that if I was to impose a term of imprisonment that this is what I would do. I would give the respondent a period of time to comply with orders I would make, being the orders sought by the applicant and that if he failed to do that in the timeframe, then a term of imprisonment would commence.
Section 112AE(5) of the Act grants the Court power to release a party from a term of imprisonment, upon them entering into a bond under paragraph 6, or after they have served a specific part of the term. The bond can be with or without surety or security, and may be expressed that they are to be of good behaviour for a specified period of up to two years.
A sentence can be discharged under section 112AK ( see s 112AE(7) of the Act ) if the court is satisfied that the person will, if released, comply with the order.
Section 112AF of the Act deals with bonds.
Section 112AG of the Act deals with additional sentencing alternatives, such as those available in the State or Territory they are residing in. The respondent currently lives in Queensland. I am unsure and no one has provided me with any information of what the alternates are, such as a community service orders; a work orders; a period of detention order; an attendance order; a sentence of weekend detention; or a community based order. I have no evidence before me on what is available in Queensland, where the respondent lives.
I have an obligation under s 112AG(4) of the Act to explain to a person, in language likely to be readily understood by them, under subparagraph (a), the purpose and effect of the order; subparagraph (b), the consequences that may flow if they do not comply with the proposed order or with any of the requirements of the order and; under subparagraph (c), if the proposed sentence or order can be revoked or varied. I am unable to carry out this obligation as the respondent simply refuses to attend and I will in my judgment, set out these consequences for him so that he may at least read them.
As his Honour sets out in Cluny & Skiner (No. 2)[3] at paragraph 59 of his judgment,
s 112AE(2) prescribes that a court shall not sentence a person to imprisonment unless satisfied that in all the circumstances of the case it would not be appropriate for the court to deal with the contravention pursuant to any of the other paragraphs of subsection 112AD(2).
[3]Cluny & Skinner(No 2) [2017] FamCA 547 at 59.
What was of importance to his Honour in the matter before him then was that a bond would not be of any benefit; a fine would not be of any benefit in having the respondent comply with the order, and his Honour noted at paragraph 68:
That given the [respondent’s] evidence and submissions that he fully intends to redeem himself by paying all he owes to the [applicant], taken with his evidence and submissions that if given sufficient opportunity to pursue identified business prospects …[the respondent would likely] have means to discharge his debts to the [applicant].[4]
His Honour noted the open offer the respondent had made to the applicant, to alternatively deal with his obligation to pay her money, by assigning to her his lifetime accumulated interest in superannuation, which she had refused.
[4] Cluny & Skinner(No 2) [2017] FamCA 547 at 68
His Honour found that these matters were ameliorating circumstances. His Honour said at paragraph 65, “…particular emphasis needs to be placed upon s 112AD(3), s 112AD(4), s 112AE(1), s 112AE(4A) and s 112AE(8) and the combined effect of those provisions,” to the imposition of any sentence of imprisonment imposed pursuant to s 112AD(2)(d). They were as follows:
a)the term of imprisonment for a specified period may be expressed to take effect immediately or at the end of a period, or the occurrence of an event;
b)the court may make such other orders as the court considers necessary to ensure compliance with the order that was contravened (Section 112AD(4));
c)the court may specify that a sentence of imprisonment ends when the person complies with the order concerned (s 112AE(1)(b)(i));
d)the court may suspend a sentence of imprisonment upon the terms and conditions determined by the court (s 112AE(4A));
e)
the serving by a person of a period of imprisonment, imposed for failure to make a payment of ordered maintenance, does not affect the person’s liability to pay
(s 112AE(8))[5]
And as his Honour notes at paragraph 66-67:
These provisions fall to be applied under the over-arching requirement of
section 112AD(1) that the sanction imposed “be the most appropriate in the circumstances” (of the individual case).... [and that] these provisions reflect the principle [set out in the decision of Gaunt and Gaunt (1978) FLC 90-468] that the imposition of penalties should be directed primarily to securing compliance with the subject orders of the Court.[6]
[5] Cluny & Skinner(No 2) [2017] FamCA 547 at 65.
[6]Cluny & Skinner(No 2) [2017] FamCA 547 at 66-67.
The respondent in this matter is not contrite and has not offered to purge his failure to comply at any level.
He has been placed on a bond previously, in 2018, and failed to comply with the then extant orders despite the bond and it is now 2021. The provision of a monetary sanction by way of fine would be of little benefit, given the small amount that that might result in.
I do not know whether there are alternate sentencing options available in Queensland to imprisonment.
The respondent has proffered excuse after excuse why he has not complied with the Courts’ orders, and I have found each and every one of his excuses are without merit.
He has lied in respect of his inability to provide the details of the disposition of money from the C Pty Ltd account in 2017; his failure to provide details of his land property transactions in Queensland, ongoing, as short a time ago as June 2021; to carry out his obligation to provide to the applicant, and the Court, his financial circumstances and dealings.
He has sought to impose upon the applicant the responsibility for his failure to disclose with his assertions and submission by Mr Yakenian that as the applicant issued subpoenas this information should be known to her. A subpoena will not assist the wife to know where the money taken from the C Pty Ltd account landed.
He failed to tell the Court, the applicant and his own lawyer that he had been declared bankrupt on 25 November 2021 and that he is fighting this sequestration order.
Orders were made by Registrar Morgan on 25 November 2021 that the estate of Mr Loxton be sequestrated under the Bankruptcy Act 1966 (Cth). The date of the act of bankruptcy was 1 June 2021. Mr Yakenian disclosed this in his submissions during the hearing however, he had not been informed of these events by his client rather in the execution of a substitued service order on his office via text message.
I do not see anything other than a term of imprisonment will ensure the respondent complies with his obligations and thus I do not see any of the options available to me under s 112AD(2), other than a term of imprisonment are available to ensure compliance with the Court’s orders.
However despite the submission that I should imprison the respondent immediately, I will not follow that course as urged upon me. I will permit the respondent a period of time to comply with the orders I propose to make as a condition of his suspended sentence, pursuant to my power under s 112AD(4).
If he complies with those orders within the timeframe, the sentence will be discharged. If not, the sentence will be brought into effect, he will be arrested under a warrant and imprisoned until he complies with the conditions of his suspended sentence, or the sentence expires.
The term of imprisonment sought by the applicant of six months is an appropriate term. I will suspend the operation of that term until 2 February 2022 and give the respondent his last chance to comply with his obligations contained in the conditions of his suspended sentence.
The sentence will commence on 15 December 2021 and will cease on 15 June 2022, or such earlier time if the respondent complies with the conditions of his suspended sentence and the orders of the Court. There is no other way to have this man comply with orders that have been made by several judges and registrars of this court to provide the information to his former partner that she needs to prosecute her claim.
The respondent can defend that claim and raise whatever case he chooses to raise in answer to that which she brings. That is the way to conduct these matters in accordance with the rule of law.
The respondent’s conduct is at the highest end of a contemptuous attitude to the Court, the mother of his children, and to the rule of law, and cannot be tolerated in our society which is based upon parties complying with orders and abiding by the laws of the land.
The conditions of the suspended sentence are in large part the orders sought by the applicant in Exhibit 1.
If the respondent does not comply with the conditions imposed upon him under the suspended sentence by 2 February 2022, a warrant for his arrest will issue and when executed will result in his imprisonment.
The respondent has brought this consequence upon himself by his abject failure to comply with his obligations under the Law and the orders of the Court.
I certify that the preceding one hundred and thirty-two (132) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Henderson. Associate:
Dated: 15 December 2021