Commonwealth Bank of Australia v Salvato (No.5)
[2013] NSWSC 924
•12 July 2013
Supreme Court
New South Wales
Medium Neutral Citation: Commonwealth Bank of Australia v Salvato (No.5) [2013] NSWSC 924 Hearing dates: 19/06/2013 Decision date: 12 July 2013 Jurisdiction: Common Law Before: Garling J Decision: (1) Mr Salvato is ordered to serve a term of imprisonment of three months. Such term of imprisonment is not to commence before Monday 5 August 2013.
(2) Mr Salvato is ordered to pay a fine of $10,000 on or before 2pm Friday 2 August 2013. Such fine is to be paid to the Principal Registrar of the Supreme Court of NSW.
(3) The term of imprisonment in Order 1, is suspended until 4 August 2015, provided that:
(i) Order 2 is complied with; and
(ii) Mr Salvato has not engaged, within that period of suspension, in any conduct which is found to be in contempt of Court.
(4) Mr Salvato is to pay the costs of the Commonwealth Bank of Australia of the proceedings for contempt, including the proceedings on penalty, on an indemnity basis.
(5) Liberty to apply on 72 hours' notice.
Note: if Order 3(ii) is not complied with, then Mr Salvato will be required to serve the term of imprisonment in Order 1, in addition to any penalty imposed for the subsequent contempt.
Catchwords: CONTEMPT OF COURT - defendant guilty of deliberate and intentional contempt of court -appropriate penalty - lack of apology - no evidence tendered -general and specific deterrence - punishment for offence to administration of justice - suspended term of imprisonment Legislation Cited: Crimes (Sentencing Procedure) Act 1999 Cases Cited: Attorney-General (NSW) v Macquarie Publications Pty Ltd (1988) 40 A Crim R 405;
Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd [1986] HCA 46; (1986) 161 CLR 98;
Commonwealth Bank of Australia v Salvato (No.4) [2013] NSWSC 321;
Director of Public Prosecutions v John Fairfax & Sons Ltd (1987) 8 NSWLR 732;
Durack v Gallagher (1982) 44 ALR 272; (1982) FLR 459;
R v West Australian Newspapers Ltd; Ex parte DPP (WA) (1995) 16 WAR 508
Smith v R (1991) 25 NSWLR 1;
Superstar Australia Pty Ltd v Coonan & Denlay Pty Ltd (No.2) [1982] FCA 190; (1982) 65 FLR 432Category: Principal judgment Parties: Commonwealth Bank of Australia (P1)
CBFC Ltd (P2)
Mimmo Salvato (D1)
Victoria Salvato (D2)Representation: Counsel:
D A McLure (P1)
L Johnson (D1)
No appearance (D2)
Solicitors:
Gadens (P1)
L Johnson & Co (D1)
Wisdom Lawyers (D2)
File Number(s): 2011/143979
Judgment
On 10 April 2013, I found that the defendant, Mimmo Salvato, had committed a contempt of Court, because he was in breach of his undertaking given to the Court on 3 December 2012, by failing to give possession of his property at Vaucluse to the Commonwealth Bank of Australia.
My reasons for reaching that conclusion are contained in Commonwealth Bank of Australia v Salvato (No.4) [2013] NSWSC 321.
This judgment, which arises from proceedings on 19 June 2013, deals with the imposition of a penalty for Mr Salvato's contempt of Court.
Procedural Background
On 10 April 2013, immediately after delivery of Salvato (No.4), directions were made which required Mr Salvato to file any evidence together with an outline of submissions, upon which he proposed to rely, on the issue of the penalty to be imposed. Directions were also given for the Commonwealth Bank to file any submissions upon which it proposed to rely.
No evidence or written submissions were filed by Mr Salvato. Submissions were filed by the Commonwealth Bank.
When the proceedings were called on for hearing on 19 June 2013, Mr Salvato was represented by Ms Leigh Johnson, solicitor, who sought, and was granted, leave to file in Court a Notice of Change of Solicitor.
Ms Johnson indicated to the Court that she did not propose to file or adduce any evidence on behalf of Mr Salvato.
Although Ms Johnson initially gave that indication, at the later commencement of her submissions, she sought to tender "... a number of references and a statement of Mr Salvato ...". It was apparent from the tender that these documents were unsworn and that she did not intend to call the authors to give evidence. Counsel for the Commonwealth Bank objected to the tender of the documents. Ms Johnson withdrew the tender.
Accordingly, the position finally reached was that there was no evidence adduced or relied upon by Mr Salvato in the course of this hearing on the imposition of a penalty. All that there was before the Court, in this hearing, was the evidence that had already been relied upon as part of the earlier hearing.
Ms Johnson made a number of submissions on behalf of Mr Salvato. Those submissions were contained in an outline of submissions consisting of three pages, which was handed up to the Court, and as well submissions were made orally. It was apparent, as the transcript reveals, that many of these submissions recounted facts, events, assertions and explanations which needed to be supported, but which were wholly unsupported, by any evidence.
It is convenient here to deal with another matter, which was raised by Ms Johnson by way of submission, because it is, in substance, a procedural matter.
Ms Johnson submitted that the Court should refrain from imposing any "conviction" but rather proceed in accordance with the provisions of s 10 of the Crimes (Sentencing Procedure) Act 1999. She said:
"I would say that the Bank has not been disadvantaged, that the equity in the property is so significant that their interest could be protected simply by imposing a costs order. I would ask your Honour to seriously consider a s 10 ..."
The reference to s 10, I understood to be a shorthand reference to an order made by a Court where it finds a person guilty of an offence, but does not proceed to record a conviction, in accordance with the provisions of s 10 of the Crimes (Sentencing Procedure) Act.
Section 10 is in this form:
"10 Dismissal of charges and conditional discharge of offender
(1) Without proceeding to conviction, a court that finds a person guilty of an offence may make any one of the following orders:
(a) an order directing that the relevant charge be dismissed,
(b) an order discharging the person on condition that the person enter into a good behaviour bond for a term not exceeding 2 years,
(c) an order discharging the person on condition that the person enter into an agreement to participate in an intervention program and to comply with any intervention plan arising out of the program.
(2) An order referred to in subsection (1) (b) may be made if the court is satisfied:
(a) that it is inexpedient to inflict any punishment (other than nominal punishment) on the person, or
(b) that it is expedient to release the person on a good behaviour bond.
(2A) An order referred to in subsection (1) (c) may be made if the court is satisfied that it would reduce the likelihood of the person committing further offences by promoting the treatment or rehabilitation of the person.
....
(3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors:
(a) the person's character, antecedents, age, health and mental condition,
(b) the trivial nature of the offence,
(c) the extenuating circumstances in which the offence was committed,
(d) any other matter that the court thinks proper to consider.
(4) An order under this section has the same effect as a conviction:
(a) for the purposes of any law with respect to the revesting or restoring of stolen property, and
(b) for the purpose of enabling a court to give directions for compensation under Part 4 of the Victims Compensation Act 1996 , and
(c) for the purpose of enabling a court to give orders with respect to the restitution or delivery of property or the payment of money in connection with the restitution or delivery of property.
..."
The Crimes (Sentencing Procedure) Act is an Act which makes provision with respect to sentences imposed on offenders. As the terms of that Act make plain, an offender is a person whom a Court has found guilty of an offence. A sentence is the penalty imposed for an offence, or the act of imposing a penalty for an offence, depending upon its usage.
The purposes of sentencing set out in s 3A of the Crimes (Sentencing Procedure) Act are as follows:
"3A Purposes of sentencing
The purposes for which a court may impose a sentence on an offender are as follows:
(a) to ensure that the offender is adequately punished for the offence,
(b) to prevent crime by deterring the offender and other persons from committing similar offences,
(c) to protect the community from the offender,
(d) to promote the rehabilitation of the offender,
(e) to make the offender accountable for his or her actions,
(f) to denounce the conduct of the offender,
(g) to recognise the harm done to the victim of the crime and the community."
As can be seen, the purposes for which a sentence is imposed under the Act on an offender, do not entirely accord with the authorities, to which it will be necessary to come, regarding punishment for contempt. As well, the terms "offender" and "sentence" are inapt to refer to the process of imposing a penalty on a person who has committed a contempt of Court.
The authorities show that contempt of Court is not a crime and does not constitute a criminal offence. A finding of contempt of Court does not appear as a criminal conviction on records maintained by authorities with respect to a person's antecedents and background.
Ms Johnson was unable to point to any case which was authority for the proposition that the Crimes (Sentencing Procedure) Act applied to a Court engaged in the process of imposing a penalty on a person who has been found to have committed a contempt. Nor was she able to point to any case in which a penalty for contempt had been imposed by a Court in reliance on any of the provisions of the Crimes (Sentencing Procedure) Act.
I am not satisfied that the Act has any application to the task upon which the Court is engaged.
Punishment for Contempt - Legal Principles
In Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd [1986] HCA 46; (1986) 161 CLR 98, Gibbs CJ, Mason, Wilson and Deane JJ said at [106]:
"Punishment for contempt serves two functions:
(a) enforcement of the process and order of the Court, disobedience to which has been described as 'civil contempt'; and
(b) punishment of other acts which impede the administration of justice, such a obstructing proceedings in Court while it is sitting or publishing comments on a pending case, which have both been described as 'criminal contempt' ..."
At [112], their Honours said:
"... we would add the comment that lying behind punishment for a contempt which involves wilful disobedience to a court order, is the very substantial purpose of disciplining the defendant and vindicating the authority of the Court."
In short, principle suggests that orders made after a finding of contempt have both a punitive element and a coercive element.
The Court has available to it a wide range of orders. That wide range of orders or remedies is available to a superior court where a finding of contempt has been made "so that it will be better able to meet the exigencies of particular circumstances": see Mudginberri at [114].
The following matters have been considered to be relevant by a number of courts in fixing upon an appropriate penalty for conduct which has been found to be a contempt:
(a) The nature and circumstances of the contempt including the consequences which it has had and may have upon any proceedings in the Court: R v West Australian Newspapers Ltd; Ex parte DPP (WA) (1995) 16 WAR 508;
(b) The impact, including any likely impact, of the contempt on the administration of justice: Durack v Gallagher (1982) 44 ALR 272 at 286-7;
(c) The extent of the contemnor's culpability for the conduct: see Durack at 286-7;
(d) The need to deter the contemnor and others from engaging in a contempt, or else repeating the contempt: Director of Public Prosecutions v John Fairfax & Sons Ltd (1987) 8 NSWLR 732;
(e) The presence or absence of a prior finding of contempt: Attorney-General (NSW) v Macquarie Publications Pty Ltd (1988) 40 A Crim R 405 at 410;
(f) Whether the contemnor has demonstrated genuine contrition and proffered a full and ample apology: Superstar Australia Pty Ltd v Coonan & Denlay Pty Ltd (No.2) [1982] FCA 190; (1982) 65 FLR 432 at 436; and
(g) Where a fine is sought, or else is being considered, the contemnor's financial means, together with their personal circumstances: Smith v R (1991) 25 NSWLR 1.
Submissions of Mr Salvato
Ms Johnson made a number of submissions on behalf of Mr Salvato, principal among which were:
(a) That the contempt of Mr Salvato was only a casual, accidental or unintentional contempt, and was not one where Mr Salvato had a specific intent to defy the authority of the Court;
(b) The contempt of Mr Salvato "... was potentially assisted by the Bank's actions as [Mr Salvato] was at that point under incredible stress and with some justification, considered that the [Commonwealth Bank] had engaged in misleading and deceptive conduct";
(c) The personal circumstances of Mr Salvato at the time of the contempt, namely, "... the serious issues of anxiety and stress ..." mitigate the contempt because, although advice was given to him, Mr Salvato "... did not fully appreciate the full ramifications of the undertakings";
(d) Mr Salvato's behaviour was a result of a misunderstanding on his part "... due to the enormity and stress of the situation, with the contiguous battle to resolve the Bank's issues in regards to negligence, misleading and deceptive conduct ...", and also that Mr Salvato was "... acting under the stress of losing his family and was in a vulnerable position with no support".
Ms Johnson, in her prepared written submissions, proffered an apology from her client in these terms:
"4. At first instance, the Defendant concedes that his actions may appear to interfere with or undermine the authority, performance or dignity of the courts of justice or those who participate in their proceedings and apologizes if this were to be."
It will be convenient to deal in turn with the submissions to which I have made reference above.
The first submission was that the contempt was casual, accidental or unintentional. The phrase "casual, accidental or unintentional", was discussed in Mudginberri. There, it was held that where a contempt of Court is alleged to consist of a failure to comply with an order of the Court, it must be proved by the applicant seeking the finding of contempt, that the conduct was wilful and not merely casual, accidental or unintentional.
As I discussed in Salvato (No.4) at [127]-[130], and at [166]-[180], I was satisfied that Mr Salvato's conduct was not properly described as casual, accidental or unintentional.
The authorities actually show, there is no such thing as a "casual, accidental or unintentional contempt", which is what Ms Johnson submitted on behalf of Mr Salvato that the Court should find. It is necessary, in order for a finding of contempt to have been made, that the Court has been satisfied by the finding for the order, that the conduct was not casual, accidental or unintentional. If the conduct was casual, accidental or unintentional, then no contempt is made out.
This submission does not assist in the determination of an appropriate penalty.
The second part of the first submission was that the Court should find that Mr Salvato did not have a specific intention to defy the authority of the Court. The finding of a specific intention is unnecessary for a finding of contempt. However, the intention of the contemnor may be relevant in determining their culpability, and the impact which their conduct may have on the administration of justice. Intention may also be relevant to determining the nature of the penalty which is to be imposed.
In light of the submissions, it is necessary therefore to consider whether or not the contempt of Mr Salvato was intentional.
In addressing this submission, and the question of whether such finding ought be made, I will not repeat all of the facts set out in Salvato (No.4).
In that judgment, I found that:
(a) Mr Salvato was present in Court on 3 December 2012, and he was represented by a solicitor; he, after consideration and receiving legal advice, gave the undertaking and was present when the exchange between counsel for the Commonwealth Bank, the Bench and Mr Salvato's lawyer took place, and which is recorded in [49]. He was also present in Court during the delivery of an ex tempore judgment which, amongst other things, emphasised the seriousness of the undertakings which were proffered, and the effect which those undertakings had upon the Court's decision [50]-[53].
(b) During the proceedings on 3 December 2012, and consistently with the previous course of the proceedings, including the factual material upon which the application of 3 December 2012 was based, in particular the fact that a contract for sale of the property had been exchanged and settlement, with vacant possession, was imminent, no differentiation was made before the Court between the positions of Mr Salvato personally, and that of his family. They were both being treated as identical. As I recorded in [45], there was no suggestion that the giving of vacant possession by Mr Salvato did not include Mrs Salvato or their children.
(c) Although Mr Salvato left the property on or about 4 December 2012, he continued to access the property freely and without restriction, and in all respects, treated it as his home except for the fact that he did not sleep there on a regular overnight basis: see [79].
(d) Mr Salvato's wife, Victoria Salvato, and their two children remained living in the property having first moved in many years prior to the giving of the undertaking, until well after the undertaking had been given, until some time in April 2013. Mrs Salvato was not told by Mr Salvato of the proceedings which had been brought against him by the Bank seeking possession of the property, and he did not tell her of the history of the proceedings, including the giving of the undertaking to the Court on 3 December 2013. Neither Mr Salvato nor Mrs Salvato had prior to the hearing of the proceedings for contempt, made any arrangements for the removal of their household furniture or belongings, nor had any arrangements for alternative accommodation for Mrs Salvato and their children been made until some time in March or April 2013: see [79]-[84].
(e) When the time for compliance with the undertaking arrived, Mr Salvato did not retrieve the keys to the property and made no attempt to provide the keys to the property to the Commonwealth Bank in accordance with his undertaking.
I am satisfied beyond a reasonable doubt, that Mr Salvato had no intention of complying with that part of the undertaking which required him to give possession of the property to the Bank.
That conclusion is based upon my satisfaction that as the facts set out in [36] above clearly demonstrate, at no time did Mr Salvato take any steps whatsoever to enable the Bank to have possession of the property. The fact that he personally moved out of the property in the way in which I described in Salvato (No.4), did not amount to compliance with the undertaking, and the giving of possession to the Bank.
The evidence of Mr Salvato which he gave during the hearing on the issue of whether he had committed a contempt, was not accepted in the absence of corroboration.
It may be, but this is speculation, that Mr Salvato thought that arrangements could ultimately be reached with the Bank which would enable his family, at least, to remain in possession of the property. However, as Salvato (No.4) shows, his undertaking was a solemn one, he was aware that the Court treated it seriously, he was told by his lawyer that one of the available penalties for failure to comply with the undertaking was a finding of contempt of Court, which may carry with it a penalty of imprisonment. Compliance with the undertaking, including taking steps to inform his wife, make arrangements for alternative accommodation for his family, and make arrangements for the removal of the household furniture, goods and clothing, were all simple steps which could have been done without any real difficulty on Mr Salvato's part. He took no such steps.
His actions were deliberate and, I am satisfied, intentional. He was aware that his conduct did not comply with his undertaking which meant that it would amount to a contempt. In those circumstances, I am satisfied that his conduct constituted an intentional contempt.
The second submission made by Ms Johnson for Mr Salvato was that the contempt which he committed, was potentially assisted by the Bank's actions. It was said that Mr Salvato considered that the Bank had engaged in misleading and deceptive conduct and was justified in so doing.
There is no evidence before the Court on these proceedings that the Bank has engaged in misleading and deceptive conduct, nor is there any evidence that the Bank's conduct has in any way contributed to the position in which Mr Salvato finds himself. On the contrary, the lengthy history of the proceedings which is set out in Salvato (No.4), indicates that the Bank's claim was one that vindicated its legal rights and entitlements.
On 12 July 2012, a consent judgment was entered in favour of the Bank against Mr Salvato for a little over $1.63M together with interest. A stay of the enforcement of that judgment was refused. On 24 August 2012, orders were made giving judgment for the Bank for possession of the property at Vaucluse. Thereafter the Bank, to enforce its legal rights, took various steps.
As the history recorded in [29]-[34] of Salvato (No.4) shows, all the Bank has done is to take steps to enforce its legal rights. No claim was made during those proceedings that the Bank's earlier conduct with respect to the loan had provided a basis upon which the Bank should not be entitled to enforce its rights.
As well, notwithstanding that the judgment had been entered against Mr Salvato, he did not seek to bring a cross-claim in these proceedings against the Bank, making claims of the kind which are now made by Ms Johnson in her submissions.
The submission that the Bank's actions assisted or contributed to Mr Salvato's contempt is not made out and I reject it.
The third submission made by Ms Johnson for Mr Salvato, addressed the personal circumstances of Mr Salvato at the time of the contempt. It was submitted that there were serious issues of anxiety or stress mitigating the contempt, with the consequence that Mr Salvato did not fully appreciate the fully the ramifications of the undertaking.
There is no evidence at all, tendered by Ms Johnson, which established that at the time of the contempt, namely on 21 December 2012, Mr Salvato was suffering from any serious issue of anxiety and stress which meant that he did not fully appreciate the ramifications of the undertaking.
On the contrary, the Court was told on 3 December 2012, that the ramifications of the undertaking had been fully explained to Mr Salvato by his lawyer, and he was well aware of them. In addition, the Court, in discussion with Mr Salvato's lawyer, noted that the undertaking was serious and a failure to comply with it may have serious consequences.
If a condition of anxiety or stress meant that Mr Salvato did not fully appreciate the undertaking, then that is a matter which required proof by evidence including expert evidence, if such evidence was available. There was no evidence tendered on this part of the hearing, and for the reasons which I gave in Salvato (No.4), Mr Salvato's evidence during that hearing was not accepted unless it was independently corroborated, or against his interests. There was no evidence on that hearing which supported this submission, and I reject it.
The fourth submission was that Mr Salvato's behaviour was the result of a misunderstanding due to the enormity and stress of the situation, is in substance, the same as the one with which I have just dealt.
The only difference is that this submission raises the fact that Mr Salvato was acting under the stress of losing his family. It can be readily accepted that, since he moved out of the house, he and his wife were having marital difficulties. No doubt these difficulties caused him some upset and concern.
However, it does seem that he was able to maintain his relationship with his family by visiting his children and caring for them, he was able to maintain his work without interruption and was able to give instructions to his solicitor, Mr Shacklady, with respect to quite complex questions of the state of the balance of the loan outstanding to the Bank.
Whilst I accept that he was upset and concerned at the marital difficulties that he was having with his wife, there is no evidence that those difficulties, or his upset and concern, affected adversely his understanding of, or his ability to comply with, the undertakings.
Apology
As I have earlier recorded, it is a relevant matter for a Court to consider whether a person found guilty of contempt has proffered a fulsome apology. It is relevant because the proffering of an apology goes some way towards mitigating the offence to the administration of justice which is caused by a contempt. Further, it goes some way towards indicating that the contemnor understands that his or her conduct has been inappropriate and has caused offence to the administration of justice. Further, it goes some way towards providing material upon which the Court can act to decide that it is unlikely that the contemnor will behave in that way again. In other words, a full apology may tend to mitigate the need for specific deterrence.
Here Mr Salvato did not, by any evidence, apologise to the Court for his conduct. He did not give any evidence that would enable the Court to draw the conclusion that he now understood that his conduct had constituted a contempt, and appreciated the basis for why that was so.
On the contrary, he was content to have his lawyer put a submission, which of course could not be tested by the Bank or the Court, the effect of which was that he proffered an apology if his conduct in fact appeared to interfere with or undermine the performance or dignity of the Court. I have set out the full terms of the proffered apology earlier at [27].
Consideration of this submission demonstrates that, the words were not those of Mr Salvato, but of his lawyer Ms Johnson, that he was unable to be tested on the truthfulness or sincerity of the apology, nor what he understood by it, and the words used, no doubt upon his instructions, or with his approval, were entirely conditional.
The proffering of this apology does nothing to suggest that Mr Salvato understood or appreciated the seriousness of his contempt of Court, nor that the need for specific deterrence was in any way diminished. On the contrary, the terms of the apology, by their conditional nature, suggest that Mr Salvato does not have any understanding that his conduct in fact amounted to a contempt of Court.
Discernment
The contempt, with which Mr Salvato has been found guilty, was deliberate and intentional.
No apology or meaningful apology has been proffered, and no explanation has been offered in evidence to mitigate the conduct which has been engaged in.
The contempt which was a breach of an undertaking, occurred in circumstances where the undertaking was given by Mr Salvato in order to obtain the indulgence of the Court to order a stay on the execution of a writ of possession. That stay interrupted the Bank's legal rights and secured for Mr Salvato's family, if not for himself, the advantage of remaining in the property, the possession of which was rightfully the Bank's, for an extended period of some months.
Whilst it appears that the Bank is now in possession of the property, and it is now able to sell the property to recoup the debt which is owed by way of the consent judgment of July 2012, whether the Bank will be adversely affected by the delay is unknown. There is no evidence of the likely sale price of the property in the current market.
But the real issues on the question of what order ought be made, is how any such order could both punish Mr Salvato appropriately, and also vindicate the administration of justice by ensuring that the Court's orders are complied with and are not simply ignored.
There is no suggestion that Mr Salvato has been guilty of any previous conduct constituting a contempt of Court. Although the matter had a somewhat tortured history, that is not relevant on any question of penalty.
There is no evidence as to what Mr Salvato's financial position is and whether he can afford a fine. To the extent that it may be relevant, the fact that he is in default of his financial obligations and consented to the entry of judgment in a very significant sum of money against him, tends to suggest that he may not be in a financial position to afford a significant fine, however, no firm conclusion can be reached with respect to this. In other words, there is no evidence which suggests that he could not afford to pay a fine.
Ultimately, the Court must look at the objects to be achieved by the imposition of a penalty for contempt of Court when combined with Mr Salvato's subjective circumstances. In so doing, the Court is conscious that a term of imprisonment is not the only punishment available and ought not be imposed where some other penalty is more appropriate.
Here, I am satisfied that a penalty of a term of imprisonment is appropriate. This was a serious case of contempt. The contempt was deliberate and intentional, and designed to secure a personal advantage for Mr Salvato and his family. Mr Salvato did not ever put himself in a position of complying with the undertaking. At no time prior to the hearing on 12 March 2013, for the contempt, had Mr Salvato done anything to remedy that contempt. He had not given possession of the property to the Bank. The consequence is that the contempt continued for a significant period of time. And this in a context where correspondence with the Bank indicated that such a contempt had occurred, and that proceedings were being taken to proceed with a charge of contempt. Even then, Mr Salvato did not tell his wife and family, or make any arrangements for alternative accommodation for them.
I am satisfied that the appropriate penalty is the imposition of a term of imprisonment of three months. A penalty of this kind marks the Court's disapproval of Mr Salvato's conduct, and is intended to deter other litigants from engaging in similar conduct, and, as well, to deter Mr Salvato from disobeying Court orders in the future.
However, since this is the first occasion upon which Mr Salvato has been found to have committed a contempt of Court, and having regard to the fact that by now the Bank has taken possession of the property, it is appropriate for that term of imprisonment to be suspended for a defined period.
The suspension of the penalty of imprisonment is intended to ensure that Mr Salvato does not, and is not, tempted to ignore any Court order. The Court was informed that Mr Salvato intended to commence proceedings against the Commonwealth Bank. The intended pleadings were not made available to the Court, and accordingly, the nature of that claim is unclear.
However, whether in this litigation, or in any other in which Mr Salvato is a party or has an interest, the suspension of the penalty will ensure that he strictly complies with any Court order. It is necessary to fix a period of time during which the suspension will endure. A period of two years is appropriate. Such a period ought be sufficient to ensure that any contemplated litigation is likely to have run its course.
In addition to the suspended term of imprisonment, it is appropriate that the Court mark its disapproval of Mr Salvato's conduct, and fulfil the purpose of vindication of the Court's authority by the imposition of a fine.
As I have indicated, Mr Salvato led no evidence to suggest that he was impecunious or unable to afford to pay a fine. He gave evidence, in the original hearing, that he managed a nightclub operating at Kings Cross. In all of the circumstances, a fine of $10,000 is an appropriate one to be imposed. Mr Salvato ought to have 21 days to pay the fine.
In addition to this penalty, it is appropriate to order that Mr Salvato pay the Bank's costs of the contempt proceedings on an indemnity basis.
Orders
The Court makes the following orders:
(1) Mr Salvato is ordered to serve a term of imprisonment of three months. Such term of imprisonment is not to commence before Monday 5 August 2013.
(2) Mr Salvato is ordered to pay a fine of $10,000.00 on or before 2pm Friday 2 August 2013. Such fine is to be paid to the Principal Registrar of the Supreme Court of NSW.
(3) The term of imprisonment in Order 1, is suspended until 4 August 2015, provided that:
(i) Order 2 is complied with; and
(ii) Mr Salvato has not engaged, within that period of suspension, in any conduct which is found to be in contempt of Court.
(4) Mr Salvato is to pay the costs of the Commonwealth Bank of Australia of the proceedings for contempt, including the proceedings on penalty, on an indemnity basis.
(5) Liberty to apply on 72 hours' notice.
I note that if Order 3(ii) is not complied with, then Mr Salvato will be required to serve the term of imprisonment in Order 1, in addition to any penalty imposed for the subsequent contempt.
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Decision last updated: 12 July 2013
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