Coalter & Loxton (No 2)
[2022] FedCFamC1F 869
Federal Circuit and Family Court of Australia
(DIVISION 1)
Coalter & Loxton (No 2) [2022] FedCFamC1F 869
File number: SYC 4681 of 2016 Judgment of: HENDERSON J Date of judgment: 27 September 2022 Catchwords: FAMILY LAW – CONTRAVENTION – Where the applicant has filed a fourth Contravention Application against the respondent – Where the respondent has previously been found guilty of contravening orders without reasonable excuse and sentenced to a term of imprisonment for six months – Where the alleged contraventions are breaches of the orders made following the sentencing of the respondent – Finding the respondent guilty on three counts of breaching orders without a reasonable excuse – Matter adjourned for sentencing.
FAMILY LAW – CONTEMPT – In the face of Court – Whether the respondent’s continued contraventions of orders made to appear in Court in-person or via Microsoft Teams can appear as a contempt in the face of or hearing of Court sufficient to justify issuing a warrant for his arrest to attend Court for sentencing – Finding the respondent’s conduct appears to the Court to be a contempt in the face of or hearing of Court – Application of rule 11.70(1) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) – Orders made for a warrant to lie in the registry for the arrest of the respondent to ensure his attendance at the adjourned date for sentencing.
Legislation: Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 11.70(1)(a), (1)(b). Cases cited: Coalter & Loxton [2021] FedCFamC1F 283.
Witham v Holloway (1995) 131 ALR 401; [1995] HCA 3.
Division: Division 1 First Instance Number of paragraphs: 36 Date of last submissions: 27 September 2022 Date of hearing: 26–27 September 2022 Place: Sydney (via Microsoft Teams) Solicitor Advocate for the Applicant: Ms Carroll Solicitor for the Applicant: Crawford Ryan Lawyers Pty Ltd Solicitor Advocate for the Respondent: Mr Yakenian Solicitor for the Respondent: Juris League Consultancy 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:
27 SEPTEMBER 2022
THE COURT FINDS THAT:
1.The respondent, Mr Loxton born 1985, is found guilty without reasonable excuse of contravening Order 3 of the orders made 19 May 2022.
2.The respondent, Mr Loxton born 1985, is found guilty without reasonable excuse of contravening Order 2 of the orders made 10 August 2021.
3.The respondent, Mr Loxton born 1985, is found guilty without reasonable excuse of contravening Order 6(d), (j) and (k) of the orders made 15 December 2021.
AND THE COURT ORDERS THAT:
4.The Contravention Application filed on 4 August 2022 be adjourned to 10:00am on 9 November 2022 via Microsoft Teams for sentence.
5.The respondent is to attend the Contravention Hearing on 9 November 2022 via Microsoft Teams.
6.Pursuant to rule 11.70(1)(b) of the Federal Circuit and Family Court of Australia (Family Law) Rules 2021, a warrant be issued for the arrest of the respondent, Mr Loxton born 1985, and such warrant to lie in the Registry until 9 November 2022.
7.If the respondent does attend the Contravention Hearing pursuant to order 5, then the warrant pursuant to order 6 be discharged.
8.If the respondent does not attend the Contravention Hearing pursuant to order 5, then the warrant be executed, and the respondent be brought before the Court on the first day on which the Court next sits after his arrest, or as soon as practicable after that date.
9.The applicant is to file and serve submissions with respect to sentence by 4.30pm on 17 October 2022.
10.The respondent is to file and serve submissions in reply with respect to sentence by 4.30pm on 31 October 2022.
11.The respondent is at liberty to file and serve an affidavit, with respect to documents and information sought by the applicant, by 4.30pm on 31 October 2022.
12.The applicant’s costs of and incidental to the Contravention Hearing on 26 and 27 September 2022 be reserved until 9 November 2022.
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 pseudonym Coalter & Loxton has been approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
EX-TEMPORE JUDGMENT
HENDERSON J
Coalter and Loxton is a contravention hearing adjourned from yesterday 26 September 2022. The Contravention Application, was listed before me on 24 August 2022 and listed for hearing of the respondent’s reasonable excuse on 26 September 2022.
An order was made that Mr Loxton, the first respondent, was to appear at that hearing via Microsoft Teams and prepare an affidavit as to reasonable excuse to be served no less than seven days prior to the hearing. Mr Loxton did not appear yesterday, and I stood the matter over to today to allow him to appear. He has not appeared today, telling Mr Yakenian, his lawyer, that he is in a bad reception area and so cannot participate in the hearing. I reject that evidence from Mr Loxton. The only time Mr Loxton has appeared before me is when I had issued a warrant for his arrest and imposed upon him a sentence of imprisonment. Otherwise, any order this Court makes for him to attend even via Microsoft Teams, not personally, is simply disobeyed by him. I propose today to deal with this matter in his absence, and there will be no further adjournments of the Contravention Application.
The Contravention Application to which Mr Loxton has pleaded guilty is firstly that he has breached Order 3 of orders made by the Court on 19 May 2022 in that, on 21 July 2022, he failed to appear in person via Microsoft Teams as was required by the order made 19 May 2022. There is nothing in the draft affidavit which I have received and read on his behalf today as an unsworn statement to satisfy this Court what his excuse was for not appearing on that date, other than his words as follows:
I apologise for my failure to comply with the court’s orders … I have had a very difficult time over the last couple of years culminating in my bankruptcy …
That is an insufficient excuse for not appearing by way of Microsoft Teams. Therefore, I find the respondent guilty of breaching the order of 3 May 2022 to appear in Court on 21 July 2022.
The second breach is that he breached Order 2 of orders made in the Family Court of Australia on 10 August 2021 in that he was ordered to pay the applicant's costs of $3,000 within 14 days of 10 August 2021, and he has failed to do so. Mr Loxton's draft/unsworn statement does not provide any reasonable excuse for his failure to pay that order since 24 August 2021. His bankruptcy occurred in November 2021, and he was ordered to pay this sum by 24 August 2021. He had more than sufficient time to pay that sum before being declared bankrupt and could have sought that sum be paid by his trustee in bankruptcy. The reality is this costs order has been outstanding for many years prior to August 2021. I do not see that the draft/unsworn statement provides a sufficient excuse for his failure to comply with Order 2 of orders made 10 August 2021, and I find him guilty of that contravention.
In relation to the third count; a breach of Order 6 made on 15 December 2021. Mr Loxton was ordered to provide a plethora of financial documents, statements, discussions, to advise to whom money had been transferred, who or where various parties are and/or his involvement in various companies inter alia. The answers to questions that were particularly sought were found in Orders 6(d), 6(j), and 6(k), and he was to within 14 days provide the information sought in those orders. Those orders are in the following terms:
6. …
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.
The unsworn statement provides some further information which was clearly available to Mr Loxton well prior to 15 December 2021, and 2 February 2022 the date the information was to be provided and has been available to him since these transactions were entered into many years ago.
The transactions concern purchasing property in Suburb RR via C Pty Ltd, a company he was a director of, with a deposit of $300,000 and his mother investing $40,000. The purpose of that purchase, he says, was to develop the property for sale. Ultimately, that did not progress. The property then was sold by C Pty Ltd for $1,000,000. Files and money were held in a trust account of a solicitor, D Lawyers. Some two-hundred-odd thousand was paid to those lawyers by way of fees, and $500,000 was transferred to Mr Loxton himself, he says, for a deposit on a property at SS Street, Suburb TT, by way of an option to purchase within 12 months, which he failed to exercise and that money was forfeited, he said, to a Mr UU.
Mr Loxton had failed to provide these people’s names or this evidence until his unsworn statement. I am satisfied that in providing the information in an unsworn statement, that this information had been available to him for some time and was not provided by 2 February 2022 and this is a clear breach of the order made on 15 December 2021, it now being September 2022 and we are first hearing this fresh information. I find he is guilty of breaching Order 6(d) of orders made 15 December 2021 and contravening those orders without a reasonable excuse.
In relation to Order 6(j), this order required him to provide:
j.Copies of documents evidencing the terms of employment, engagement as a contractor or otherwise by [Mr Loxton] with the company [K Pty Ltd] including the provision by [Mr Loxton] to media and/or advertising companies material promoting [K Pty Ltd] and/or [L Pty Ltd] for the period commencing five (5) years prior to 30 November 2021.
The unsworn statement provided refers to the company K Pty Ltd stating it was under the control of a Mr H and that this man also controlled M Pty Ltd as follows:
I was a consultant on an informal basis to [K Pty Ltd] … the website indicates that I was its CEO but that is not correct.
Given this statement is unsworn, it is not in affidavit form, I reject its truth. However, it is the first time that Mr Loxton has even bothered to admit that he had some involvement in these companies. These events occurred some years ago, and it is clear that he has breached the orders made 15 December 2021 to provide that information by 2 February 2022 and has only now in September 2022, by way of an unsworn statement provided some further information. Therefore, I find him guilty of breach of Order 6(j) or orders made 15 December 2021 and contravening those orders without a reasonable excuse.
Order 6(k) ordered he was to provide relevant:
k.… employment, contracts or moneys received for services or invested with the company [M Pty Ltd] …
The answer to that in his unsworn statement falls into the same category as his answer to the failure to comply with Order 6(j). It is an unsworn statement and I cannot accept as truth. However, it demonstrates clearly there was information available to Mr Loxton years ago to provide to the applicant, on this issue, and he simply has failed to do that. Therefore, I find him guilty of contravening Order 6(k) of orders made by the Court on 5 December 2021 without reasonable excuse.
I note I have used, as best I can, the information in his unsworn statement to assist me to understand his position. I find he has provided information that has never been provided previously and that certainly would have been within his knowledge concerning a Mr H, various lawyers he has used, moneys that have been transferred, where some $748,000 was transferred or how it was lost, information well-known to him many years ago and still only peripherally referred to in an unsworn statement. I reject that evidence in the sense of it being true and correct, other than it assists this Court to know that he did breach those orders because he failed to disclose the information when he had it to hand, as he was required to do.
The applicant seeks pursuant to rule 11.70 that I issue a warrant for the arrest of the respondent on the grounds that it appears to the Court the respondent is guilty of contempt in the face of or hearing of the Court.[1] If that is what a party’s conduct appears to the Court to be the Court may:
(1)Order the person to attend before the Court.[2]
(2)Issue a warrant for the person's arrest.[3]
[1] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 11.70(1).
[2] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 11.70(1)(a).
[3] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 11.70(1)(b).
The basis of the application under this rule of is the respondent's failure to attend Court on 26 September 2022, despite an order made 24 August 2022 he do so, and failing to attend again on 27 September 2022, despite being ordered to do so on 26 September 2022, for hearing of his reasonable excuse in respect of a Contravention Application filed 24 August 2022. I note that the respondent had failed to attend a similar reasonable excuse hearing in November 2021 for a hearing of a contravention of which he was found guilty and where he was ultimately sentenced to a term of imprisonment.[4]
[4] Coalter & Loxton [2021] FedCFamC1F 283.
The appearances on 26 and 27 September 2022 were to be by way of Microsoft Teams and imposed minimal hardship and difficulties on the respondent, and I note he was represented by a lawyer, Mr Yakenian, on both occasions. His excuse or his reasons for failing to attend via Microsoft Teams on 26 September 2022 via Mr Yakenian was that his mother was in hospital, and he was with her. In support of that excuse, I was provided, and accepted, an admission form in his mother's name, Ms EE for admission to the VV Hospital on 20 September 2022, some six days prior to the hearing date. Nothing further was provided to say she was still in hospital or that her son, Mr Loxton, was with her.
In those circumstances, I stood the matter over to the next day, 27 September 2022, to have the respondent provide me with a proper medical certificate in relation to his mother and his need to be with her and to hear the reasonable excuse part of the Contravention Application, again via Microsoft Teams. The excuse for his failure to attend on 27 September 2022 was that the respondent was in a poor reception area, he had no computer, and he just could not participate in the hearing. It was apparent to me he was not at the hospital with his mother.
I heard the contravention in his absence and found him guilty of the three counts, namely, he breached orders made 19 May 2022 to attend Court on 21 July 2022; he breached Order 2 of the orders made 10 August 2021 for failing to pay the wife a $3,000 costs order by 24 August 2021; and he breached Order 6 of orders made 15 December 2021, in particular Orders 6(d), 6(j), and 6(k), for failing to provide relevant financial and other information by 2 February 2022 in order to progress the matter further.
The contravention has been stood over for sentence to 9 November 2022, and the applicant seeks I:
(1)Sentence the respondent to a term of imprisonment.
(2)Issue a warrant for his arrest to ensure he appears at the sentence.
The applicant relies upon the source of power being a finding of contempt in the face of or hearing of the Court. The applicant further says it is important I do this in this matter given his conduct.
The question for me is, is the respondent's conduct capable of appearing to the court to be a contempt in the face of or hearing of the Court? That is the wording of rule 11.70.[5]
[5] Federal Circuit and Family Court of Australia (Family Law) Rules 2021 (Cth) r 11.70(1).
The respondent has had a legal representative for some period of time who appears on each occasion and does the best he can to represent his client in very difficult circumstances. The respondent has simply failed to appear via Microsoft Teams on 26 September and 27 September 2022 to be cross-examined on his reasonable excuse defence.
He also failed to file an affidavit setting out his reasonable excuse by 20 September 2022, or any affidavit at all, having had a month to do so. I ordered his lawyer to provide the draft affidavit, an unsworn statement, in effect, that he had partially prepared in an endeavour to comply with his client’s obligation to file an affidavit. I read that document in support of his lawyer's submissions that he did have a reasonable excuse for not complying with the orders, and I found after reading that document and hearing submissions, that he had no reasonable excuse and found him guilty of contravening all the orders.
The respondent had attended Court via Microsoft Teams on 24 August 2022 when he was cross-examined by the applicant's lawyers on his abject failure to provide financial disclosure as ordered from the get-go of this matter, but particularly pursuant to the orders made when he was sentenced to a term of imprisonment on 15 December 2021 for 6 months. This appearance was obviously at a time after his sentence had expired, which was sometime in June 2022.
On 15 December 2021, I had sentenced the respondent to a term of imprisonment for six months in relation to his continued contravention of orders, and I suspended the sentence for six weeks to give him time to provide the financial information sought and ordered. He did not provide the information ordered.
His sentence was revived due to the failure to provide the information as ordered by 2 February 2021. The sentence was not carried out as the police could not locate him when the warrant for his arrest issued until after the sentence had expired.
In August 2022, when Mr Loxton appeared by Microsoft Teams, he told the Court he would attend on 26 September to be cross-examined on his reasonable excuse, that he wanted the matter to progress as well, and that he was doing all he could to provide the information. He has failed to do those things.
The respondent has shown he has no regard for the orders of the Court, including his obligation to provide financial information as required under the rules and ordered by the Court and as is necessary to progress and finalise the matter as the applicant wishes to do.
As stated in the High Court decision of Witham v Holloway:
All orders … are made in the interests of justice. Non-compliance necessarily constitutes an interference with the administration of justice even if the position can be remedied as between the parties.[6]
[6] (1995) 131 ALR 401 at 407 (Brennan, Deane, Toohey and Gaudron JJ).
The respondent has, by his actions, wasted valuable Court time, incurred unnecessary costs for the applicant by his failure to appear on the last two occasions, let alone previously, and has interfered significantly with the administration of justice, as this matter simply cannot progress. As I set out in my decision of 15 December 2021, save for 27 April 2020, 19 April 2021,[7] and now, 24 August 2022, since 2018, Mr Loxton has failed to attend any Court appearance, other than those three. He had failed to attend the reasonable excuse hearing on 30 November 2021, after which I sentenced him to a term of imprisonment and has now failed to attend the reasonable excuse hearing in September 2022.
[7] Coalter & Loxton [2021] FedCFamC1F 283 at [14].
I find on these facts that the respondent's conduct and attitude is capable of appearing to the Court as contempt in the face of or hearing of the Court, pursuant to rule 11.70, and that he has, by his conduct, interfered in the administration of justice and progress of this matter.
Having so determined, my options are:
(1)To order a person to attend before the Court.
(2)Issue a warrant for the person's arrest.
It is absolutely pointless for me to order Mr Loxton to attend Court. That has been done multiple times and he fails to attend. The Court must protect its processes, minimise wasting valuable judicial resources, and maintain faith in the system for the aggrieved party. It is a tenant of the proper administration of justice that a Court has a capacity to use coercive powers, albeit reservedly and not lightly, to ensure compliance when all other avenues available to a Court have failed, and they have failed in this matter. All other avenues have failed to have the respondent comply and attend and the only option is, as I set out in my Reasons for Judgment on 15 December 2021[8] to issue a warrant for his arrest.
[8] Coalter & Loxton [2021] FedCFamC1F 283 at [87]–[88], [96].
It is imperative he attends so his lawyer can properly represent him, as I am going to be asked yet again by the applicant to determine this matter by way of a sentence and imprisonment and this is a various serious matter, and the Court takes it seriously. Issuing a warrant is the only option available to ensure he is present at the sentence and that he understands the gravity of his actions and failures to date.
Accordingly a warrant will issue, to lie in the registry to ensure that the respondent attends the sentence hearing on 9 November 2022 by way of Microsoft Teams and if he does not so appear it will be executed.
I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the ex tempore Reasons for Judgment of the Honourable Justice Henderson on 27 September 2022. Associate:
Dated: 14 November 2022
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