D B Mahaffy & Associates v Mahaffy

[2015] NSWSC 1959

Supreme Court

New South Wales

Medium Neutral Citation:

D B Mahaffy & Associates v Mahaffy [2015] NSWSC 1959

Hearing dates:

10 December 2015

Date of orders:

18 December 2015

Decision date:

18 December 2015

Jurisdiction:

Common Law

Before:

Schmidt J

Decision:

Mr David Mahaffy found guilty of the contempt alleged in charges 1, 5, 6, 7, 8, 9, 11 and 13 and order:

 

(1)   Mr David Mahaffy is sentenced to serve a total term of imprisonment of 10 months, to commence from the date of his arrest.

 

(2)   That Mr David Mahaffy pay Mr Jeffrey Mahaffy’s costs of these proceedings, other than those dealt with by Garling J in his March 2013 judgment, as agreed or assessed.

 

(3)   A warrant for Mr David Mahaffy’s arrest be issued.

(4) A warrant for Mr David Mahaffy for committal to a correctional centre be issued under s 62(1) of the Crimes (Sentencing Procedure) Act 1999 (NSW).

Catchwords:

CONTEMPT OF COURT – sentencing – seriousness of contempt proven – money order charges – court behaviour charges – subpoena charge – culpability – reason or motive for the contempt – whether contemnor has received or sought to receive a benefit or gain from the contempt – no expression of genuine contrition – character and antecedents of the contemnor – personal circumstances – deterrence – denunciation of contemptuous conduct – discretion not to convict – punishment – costs – warrant to be issued – term of imprisonment imposed

Legislation Cited:

Civil Procedure Act 2005 (NSW)
Crimes (Sentencing Procedure) Act 1999 (NSW)
Supreme Court Act 1970 (NSW)
Supreme Court Rules 1970 (NSW)

Cases Cited:

ASIC v Matthews [2009] NSWSC 285
ASIC v Sigalla (No 6) [2012] NSWSC 83; (2012) 291 ALR 391
Australian Consolidated Press Ltd v Morgan [1965] HCA 21; (1965) 112 CLR 483
Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd [1986] HCA 46; (1986) 161 CLR 98
D B Mahaffy & Associates v Mahaffy [2015] NSWSC 66
D B Mahaffy & Associates v Mahaffy [2015] NSWSC 1223
Gallagher v Durack [1983] HCA 2; (1983) 152 CLR 238
Hinch v Attorney-General (Vic) [1987] HCA 56; (1987) 164 CLR 15
Mahaffy v Administrative Appeals Tribunal [2015] FCA 251; (2015) 65 AAR 283
Mahaffy v Mahaffy [2013] NSWSC 245
Mahaffy v Tax Practitioners Board [2015] AATA 173
Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59
NSW Crime Commission v Field [2003] NSWSC 5
Pang v Bydand Holdings Pty Ltd [2011] NSWCA 69
Principal Registrar of the Supreme Court of NSW v Jando [2001] NSWSC 969; (2001) 53 NSWLR 527
R v Olbrich [1999] HCA 54; (1999) 199 CLR 270
Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309
Wyszenko v Wyszenko [2012] NSWSC 732

Category:

Principal judgment

Parties:

D B Mahaffy & Associates (Plaintiff)
Jeffrey Mahaffy (Defendant)

Representation:

Solicitors:
Mr D Mahaffy, unrepresented (Plaintiff)
Mr J Mahaffy, unrepresented (Defendant)

File Number(s):

2010/119143

Publication restriction:

None

Judgment

1. On 16 February 2015, I concluded that Mr Jeffrey Mahaffy had established the contempt he alleged against his brother, Mr David Mahaffy, in charges 1, 5, 6, 7, 8, 9, 11 and 13 (see D B Mahaffy & Associates v Mahaffy [2015] NSWSC 66). On sentence, Mr Jeffrey Mahaffy pursued his case, that this contempt warranted punishment by imposition of a term of imprisonment. He also sought an order for costs in his favour.

2. The evidence on which each of the charges of contempt were found proven, are discussed in the February judgment.

3. The conduct on which the findings of contempt rested involved failures to obey costs orders made by the District Court, this Court and by the Court of Appeal, which bound Mr David Mahaffy and/or his company, D B Mahaffy & Associates Pty Ltd; a deliberate failure to comply with a subpoena issued by the District Court; the pursuit of a sustained, baseless and deliberate attack on the impartiality, honesty and integrity of McLoughlin DCJ; and the pursuit of baseless allegations of illegality and corruption against White J.

4. Mr David Mahaffy now stands for sentence for that proven contempt.

5. Rule 13 of Part 55 of the Supreme Court Rules 1970 (NSW) provides that where the contemnor is not a corporation, contempt may be punished by committal to a correctional centre, fine or both. The Court may also make orders for punishment on terms. There is no maximum penalty for contempt. The sentence for each contempt found must be determined in accordance with the provisions of the Crimes (Sentencing Procedure) Act1999 (NSW) (see Principal Registrar of the Supreme Court of NSW v Jando [2001] NSWSC 969; (2001) 53 NSWLR 527 at [38] - [45]).

The sentencing hearing

6. Mr David Mahaffy did not appear at the hearing of the contempt charge. He was also given, but did not avail himself of, an opportunity to later meet the case advanced against him at that hearing, before judgment was given in February 2015. He subsequently filed, but has not pursued, a notice of intention to appeal the February judgment. Accordingly, the conclusions there reached remain unchallenged.

7. The sentence hearing was initially listed on 13 and 14 August, but it was adjourned on the application of both parties, neither being ready to proceed. Mr David Mahaffy did not appear at the December sentence hearing, although he had earlier appeared at directions hearings, both in person and on some occasions by telephone. He had also provided, by facsimile, an affidavit and submissions on sentence.

8. Before the adjourned hearing in December, Mr David Mahaffy sought to make various informal applications, including applications that the hearing be further adjourned and that I disqualify myself for bias. Such a disqualification application was refused in August, when it was made at a directions hearing (see D B Mahaffy & Associates v Mahaffy [2015] NSWSC 1223).

9. Mr David Mahaffy has been repeatedly informed that such applications cannot be made in this informal way, but should be made in the usual way, by filing a motion supported by affidavit. He did not avail himself of that opportunity. Despite being referred to the Court’s publication for unrepresented litigants, “Representing yourself in civil proceedings in the Supreme Court of New South Wales”, Mr David Mahaffy persisted in repeatedly approaching my associate, by telephone, email and faxed communications, without prior notice to, or consent of, Mr Jeffrey Mahaffy and without providing him even with a copy of such written communications, to attempt to pursue various applications.

10. In the days preceding the sentence hearing, Mr David Mahaffy advised by faxed communication that he would not be appearing, because he could not travel to Sydney for health reasons. He provided a medical certificate which suggested that he suffered from various medical conditions, but did not appear to make any application, or to advance any evidence, even though he was given the opportunity to participate in the sentence hearing by telephone. He also advised that he was being admitted to hospital. There was, however, no evidence about these matters.

11. As I discussed in the February judgment at [20], parties are not entitled to make such informal applications, unsupported by evidence. The sentence hearing thus proceeded in Mr David Mahaffy’s absence, he having received a fair opportunity to be heard.

12. Mr Jeffrey Mahaffy then tendered what he considered to be relevant aspects of the affidavit Mr David Mahaffy had sworn in August, as well as affidavits which he had served. It emerged at the hearing that Mr David Mahaffy had not filed or served the handwritten written submissions which he had faxed to my associate, on Mr Jeffrey Mahaffy.

13. I took the view that Mr David Mahaffy’s written submissions ought to be considered and so provided a copy to Mr Jeffrey Mahaffy and gave him the opportunity to respond, after he considered them during an adjournment.

14. In those submissions, Mr David Mahaffy advanced claims as to his past dealings with Mr Jeffrey Mahaffy, while Mr Jeffrey Mahaffy was in his employment and afterwards, as well as arguments relevant to the litigation which ensued, including that which he and his company pursued unsuccessfully in the District Court against Mr Jeffrey Mahaffy. It was in those proceedings and the resulting appeal and proceedings in this Court, in which the orders which founded various of the findings of contempt for which Mr David Mahaffy is now being sentenced, were made against him. Some of the matters which he raised were relevant to his appeal from the orders made in the District Court, but that appeal failed.

15. Mr David Mahaffy also there made various complaints as to the way he had been represented in those proceedings, by various legal practitioners. He also alleged that Mr Jeffrey Mahaffy had committed various contempt of court. Mr David Mahaffy also there made brief submissions in relation to the charges which were found proven in the February judgment, which he submitted ought not to have been found proven.

16. None of these matters were relevant to the determination of the sentence to be imposed on Mr David Mahaffy, for the contempt which has been found proven on the evidence. The time for making submissions in relation to the contempt charges dealt with in the February judgment has passed.

17. Mr David Mahaffy did not take the opportunity to make submissions on the appropriate sentence. That was a matter for him. What was relevant to the question of sentence, however, was Mr David Mahaffy’s repetition in his submissions and affidavit of further scurrilous attacks on McLoughlin DCJ and White J.

18. Since reserving on the question of sentence, I have received reports that Mr David Mahaffy has purportedly telephoned the Court and made threatening remarks. I have not taken those reports into account in this sentencing exercise.

The applicable principles

19. Contempt of court involves an interference with the administration of justice. In Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd [1986] HCA 46; (1986) 161 CLR 98, the function of punishment for contempt was described at 106 to be:

“(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 as obstructing proceedings in court while it is sitting or publishing comments on a pending case, which have both been described as “criminal contempt” ...”

20. Their Honours added at 112:

"…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."

21. As discussed in Pang v Bydand Holdings Pty Ltd [2011] NSWCA 69 at [102], any contest as to matters such as the seriousness of the conduct for which a sentence is being imposed, must be established on the criminal standard (see R v Olbrich [1999] HCA 54; (1999) 199 CLR 270). Given Mr David Mahaffy’s approach to sentencing, there were no identifiable issues lying between the parties as to this, or other matters relevant to the determination of his sentence.

22. In ASIC v Matthews [2009] NSWSC 285, Barrett J (as his Honour then was) discussed the factors generally to be taken into account in addressing the question of the punishment to be imposed for contempt of court by disobeying an order of the court at [26] - [27]. They are:

“1.    The seriousness of the contempt proved.

2.    The contemnor’s culpability.

3.    The reason or motive for the contempt.

4.    Whether the contemnor has received, or sought to receive, a benefit or gain from the contempt.

5.    Whether there has been any expression of genuine contrition by the contemnor.

6.    The character and antecedents of the contemnor.

7.    The contemnor’s personal circumstances.

8.    The need for deterrence of the contemnor and others of like mind from similar disobedience.

9.    The need for denunciation of contemptuous conduct.”

23. Similar considerations arise when sentences are imposed for other types of contempt. In Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309, Kirby P said with the concurrence of Mahoney JA and Hope JA at 314:

“A conviction of contempt of court is a conviction of an offence, criminal in nature. Punishment of the convicted contemnor must therefore take into account the considerations normally applicable to the punishment of crime and apt to uphold the purpose of this jurisdiction, viz, the undisturbed and orderly administration of justice in the courts according to law. Thus, in determining the punishment which is apt to the circumstances which have led to a conviction of contempt, it is appropriate to bear in mind the purposes of punishing the contemnor; deterring the contemnor and others in the future from committing like contempts; and denouncing the conduct concerned in an approximately emphatic way: see Director of Public Prosecutions v John Fairfax & Sons Ltd (1987) 8 NSWLR 732 at 741. In this jurisdiction, contempt is a common law offence for which there is therefore no maximum penalty in this Court: R v Dunbabin; Ex parte Williams (1935) 53 CLR 434 at 442. Any limits which are imposed upon the Court's powers derive from the purposes stated above and the limitations expressed in the Tenth Article of the Bill of Rights 1688 which restrains the imposition of cruel or unusual punishments or “excessive fines”: see Smith v The Queen (1991) 25 NSWLR

24. There is a distinction drawn in the authorities between technical contempt on the one hand and wilful contempt on the other. A contemnor’s intention is relevant. Technical contempt may be waived by the opposing party. Even in a case of wilful contempt, if an appropriate apology is forthcoming, together with necessary remedial action, the contempt may be dealt with by the apology being accepted by the Court and the question of costs of the proceedings then being dealt with. Mr David Mahaffy has not proffered any apology.

25. Further, not every intentional disobedience of a court order involves a conscious defiance of the authority of the Court, but wilful contempt, when pursued in defiance of the Court, is contumacious contempt. If proven beyond reasonable doubt, such contempt must be dealt with differently on sentence, as discussed in Australian Consolidated Press Ltd v Morgan [1965] HCA 21; (1965) 112 CLR 483 and Registrar of the Court of Appeal v Maniam (No 2) at 314-5 .

26. In ASIC v Matthews; Barrett J concluded that a fine was not an appropriate penalty for the contempt there in question. His Honour concluded that given the defendant’s lack of means, other sentencing options then available, were unlikely to deter him from the activities that gave rise to the charges on which he was being sentenced and that in the circumstances, a term of imprisonment was warranted (see at [50] to [53]). For reasons which I will explain, this is a similar case.

Considerations on sentencing

1. The seriousness of the contempt proved

27. It is apparent on the evidence that Mr David Mahaffy bears his brother considerably animosity. That, however, neither explains nor excuses the contemptuous course of conduct which he has pursued.

28. There can be no question as to the seriousness of the contempts established by the evidence discussed in the February judgment. Mr David Mahaffy's deep dissatisfaction with the outcome of the litigation in which he and his company were involved with his brother, Mr Jeffrey Mahaffy, over many years, in the District Court, this Court and the Court of Appeal, which all sprang out of the breakdown of their working relationship, has been amply revealed in all of the various proceedings in which they have been involved with each other.

29. Orders made against Mr David Mahaffy and his company by the District Court, were challenged unsuccessfully in the Court of Appeal. Despite being bound by those orders and having the means to abide by them, they were not complied with. Nor was a subpoena issued in the District Court proceedings complied with. Mr David Mahaffy also finally did not succeed in the proceedings which he took in the Equity Division of this Court, to stop his brother’s pursuit of the mortgage which he had been granted, over one of Mr David Mahaffy's properties, in the course of the District Court litigation. Mr David Mahaffy also then deliberately pursued a course of conduct designed to frustrate these orders which bound he and his company being enforced.

30. Mr David Mahaffy’s dissatisfaction with the failure of the cases he and his company had advanced against Mr Jeffrey Mahaffy, reached such a level that he also came to advance inappropriate, unwarranted and baseless claims of illegality and corruption, against a judge of the District Court, as well as a judge of this Court. His scurrilous, continued pursuit of these serious, groundless allegations, against McLoughlin DCJ and White J, despite the conclusions reached in the February judgment, is very serious indeed.

31. In considering its seriousness and whether all of this contempt warrants punishment by imprisonment, as Mr Jeffrey Mahaffy urged, Mr David Mahaffy's position as a practicing accountant and his resulting standing in the community, cannot be overlooked, given the reliance which members of the public undoubtedly place on the honesty and integrity of members of that profession.

32. It is convenient to assess the seriousness of each particular contempt found proven in the three groups dealt with in the February judgment: the money order charges; the court behaviour charges; and the subpoena charge.

Money order charges

33. The charges found proven were:

Charge 1 

“David Mahaffy challenged the authority of the Court i.e. the authority of Judge McLoughlin and committed contempt of court by failing to have DB Mahaffy & Associates Pty Ltd pay $136,679.46 toJeffreyMahaffy pursuant to orders made on 4 September 2009 by the District Court of New South Wales.

Charge 5 

“David Mahaffy challenged the authority of the Court, i.e. the authority of Judge McLoughlin and committed contempt of court by failing to pay $25000.00 to Jeffrey Mahaffy within 7 days pursuant to orders made on 16 July 2010 by the District Court of New South Wales.

Charge 8 

“David Mahaffy challenged the authority of the Court, i.e. the authority of Justice Giles and Justice Sackville and committed contempt of court by failing to pay $22000.00 to Jeffrey Mahaffy within 7 days pursuant to orders made on 23 September 2010 by the Supreme Court of New South Wales.

Charge 9

“David Mahaffy challenged the authority of the Court, i.e. the authority of Justice Rein and committed contempt of court by failing to pay $1100.00 to Jeffrey Mahaffy within 7 days pursuant to orders made on 1 October 2010 by the Supreme Court of New South Wales.

Charge 13

“David Mahaffy challenged the authority of the Court, i.e. the authority of the District Court of New South Wales and committed contempt of court by conducting his financial affairs and operating his bank accounts so as to deliberately avoid enforcement of Garnishee Court Orders for judgments and cost orders owing by him and DB Mahaffy & Associates Pty Ltd to Jeffrey Mahaffy.

34. These charges each involved objectively serious contempt of the District Court, this Court and of the Court of Appeal. The particulars of this and the other contempt found proven and the evidence on which those conclusions rested, appear in the February judgment, which should be read together with his judgment.

35. Despite having led evidence in the District Court in 2008, that his company was able to meet any costs order made against it in the proceedings and the evidence that it continued to trade, operating the accountancy business in which Mr David Mahaffy worked as an accountant, after the orders the subject of these charges were made against both Mr David Mahaffy and his company, they were not complied with. The District Court’s orders were not stayed and later, when the appeal against those orders failed, still they were not complied with. Nor were the orders made by Rein J and the Court of Appeal complied with.

34. Mr David Mahaffy was the company’s guiding mind. The evidence established beyond reasonable doubt that the deliberate decisions which resulted in the commission of all of this contempt, were his. The evidence also established beyond reasonable doubt that while Mr David Mahaffy is now a bankrupt, this contempt occurred at times when the company and he had the means to comply with the orders and that it was the result of Mr David Mahaffy's wilful and deliberate conduct, that they were not complied with.

35. Mr David Mahaffy’s intentional actions deliberately obstructed the course of justice. The end result of the steps which he took not only involved abuse of process, by repeated pursuit of relief already sought and denied, but also expenditure of resources which ought to have been directed to meeting the courts’ orders. Instead, those resources were deliberately wasted on the pursuit of the futile and ultimately contemptuous course which Mr David Mahaffy pursued. This is not simply a matter of concern to the parties to those proceedings, but raises questions of the public interest.

36. The evidence also established beyond reasonable doubt that Mr David Mahaffy deliberately conducted his and the company’s affairs in order to defeat Mr Jeffrey Mahaffy’s enforcement of the orders made in his favour. This was a course of conduct pursued in order to interfere with the due administration of justice.

37. This was, undoubtedly, contumacious contempt.

38. The consequences for Mr Jeffrey Mahaffy have been shown to have been significant. His submission that in circumstances where Mr David Mahaffy has been declared bankrupt and the company is being wound up, he has suffered very considerable prejudice, personally and financially, must be accepted. That also sheds light on the nature and seriousness of all of this contempt.

Court behavior charges

41. The charges found proven were:

Charge 7

“David Mahaffy challenged the authority of the Court, i.e. the authority of Judge McLoughlin and committed contempt of court by making various verbal allegations before the court and statements in affidavits and letters tendered to the court that Judge McLoughlin has made “incorrect orders” and “illegal orders” and that Judge McLoughlin is biased towards him.

Charge 11

“David Mahaffy challenged the authority of the Court, i.e. the authority of Justice White and committed contempt of court by making statements in affidavits tendered to the court that Justice White has made “incorrect orders” and “illegal orders” and is also biased towards him.

42. While allegations of alleged bias do not amount to contempt, the other particulars of these charges discussed in the February judgment were established. The conduct there described went far beyond matters of mere discourtesy.

43. This contempt was also objectively serious, involving as it did unwarranted allegations of illegality and corruption on the part of two judicial officers, one of the District Court and the other of this Court, allocated to hear cases involving Mr David Mahaffy and his company. The evidence established beyond reasonable doubt that Mr David Mahaffy pursued his persistent, unsubstantiated, baseless and deliberate attacks on the impartiality, honesty and integrity of McLoughlin DCJ and White J, both of whom were repeatedly described as being corrupt and having acted illegally.

44. His contempt was, on the evidence, by the repetition of his unwarranted attacks, the circumstances in which and the way in which they were each pursued, capable of interfering with the administration of justice. Such attacks are demeaning. They seek to deter individual judges from discharging their allocated judicial duties, in accordance with the judicial oath which binds all judges.

45. Despite the conclusions reached in the February judgment, Mr David Mahaffy has not desisted from his pursuit of those attacks. To the contrary, he has persisted, repeatedly making further such attacks, in a variety of contexts, including in submissions advanced and the affidavit which he swore after the February judgment was given.

46. In the result there can be no doubt as to the seriousness of this contempt, which was also shown beyond reasonable doubt to have been contumacious. As discussed in Gallagher v Durack [1983] HCA 2; (1983) 152 CLR 238 at 243, such contempt raises two competing principles:

“… One principle is that speech should be free, so that everyone has the right to comment in good faith on matters of public importance, including the administration of justice, even if the comment is outspoken, mistaken or wrong-headed. The other principle is that “it is necessary for the purpose of maintaining public confidence in the administration of law that there shall be some certain and immediate method of repressing imputations upon Courts of justice which, if continued, are likely to impair their authority”: per Dixon J. in R. v. Dunbabin; Ex parte Williams. The authority of the law rests on public confidence, and it is important to the stability of society that the confidence of the public should not be shaken by baseless attacks on the integrity or impartiality of courts or judges. However, in many cases, the good sense of the community will be a sufficient safeguard against the scandalous disparagement of a court or judge, and the summary remedy of fine or imprisonment "is applied only where the Court is satisfied that it is necessary in the interests of the ordered and fearless administration of justice and where the attacks are unwarrantable": R. v. Fletcher; Ex parte Kisch, per Evatt J.” [footnotes omitted]

47. This is such a case.

48. On the evidence, there can be no doubt that Mr David Mahaffy’s conduct was calculated to undermine public confidence in the District and Supreme Courts. What Mr David Mahaffy has wrongly and repeatedly said about both McLoughlin DCJ and White J, which involves the gravest conceivable breaches of their Honours’ duties, is entirely unwarranted.

49. These are the most serious of all of Mr David Mahaffy’s serious contempts.

The subpoena charge

Charge 6

“David Mahaffy challenged the authority of the Court, i.e. the authority of Judge McLoughlin and committed contempt of court by failing to comply with Subpoena to Produce served on him, that was filed on 5 July 2010 and returnable on 16 July 20210 in the District Court of New South Wales.

50. This was also objectively serious and deliberate contempt, interfering as it did with the course of justice.

51. Failure to comply with the subpoena, in defiance of the District Court’s authority, was persisted in, even to the point finally that the defences pleaded in the District Court were struck out and orders were made in favour of Mr Jeffrey Mahaffy.

52. The entirety of this contemptuous conduct also involved a positive course of conduct pursued by Mr David Mahaffy in order to ensure that the subpoena issued by the District Court would not be given effect.

53. This contempt, too, was pursued in order to interfere in the proper administration of justice.

2. Mr David Mahaffy’s culpability

54. The evidence established beyond reasonable doubt that Mr David Mahaffy’s various contemptuous conduct, connected as it was and persisted in, as it has been, over the course of a number of years, was deliberate. His moral culpability for that contempt is considerable.

55. That conclusion is put beyond argument, when it is considered that despite the unchallenged conclusions reached in the February judgment as to the contempt found proven, Mr David Mahaffy took no steps to purge his contempt. Instead, he has persisted in the same conduct on which the conclusions reached in relation to charges 7 and 11, involving McLoughlin DCJ and White J, rested. It is necessary only to refer to a few examples.

56. In relation to McLoughlin DCJ, for example, in the affidavit which Mr David Mahaffy swore on 7 August 2015 he repeatedly said, amongst other things, that his Honour was “a very corrupt judge”, that the Judge had “illegally” given Mr Jeffrey Mahaffy all his costs (at [55]) and that the “cost order is illegal and given by a very corrupt Judge who will be investigated soon” (at [57]). At [84] he referred to his Honour as “[t]he corrupt Judge McLoughlin”. At [121] he used the term “a little corrupt Judge”.

57. In the same affidavit Mr David Mahaffy also referred to Justice White as “a very corrupt Judge” (at [90]).

58. In those circumstances, there can be no question as to Mr David Mahaffy’s culpability for all of this contempt.

3. The reason or motive for the contempt

59. The reason for all of this contempt is apparent on the evidence.

60. Very sadly, as I have said, the evidence disclosed that considerable animosity exists between the two brothers. That helps explain Mr David Mahaffy’s contempt, but does not excuse it.

61. Mr David Mahaffy’s contempt involved a refusal not only to accept decisions which bound he and his company, when they did not favour the cases they advanced, but also a refusal to abide by orders requiring the payment of Mr Jeffrey Mahaffy’s costs and the provision of documents required to be produced to the Court, when subpoenaed. Those refusals were followed by the pursuit of baseless allegations of illegality and corruption on the part of two judicial officers, responsible for unfavourable findings and orders which were made.

62. This conduct was pursued in order to put Mr David Mahaffy above the law which binds all members of the community. It was designed to advantage him and his company, at the expense particularly of Mr Jeffrey Mahaffy and ultimately, it was pursued irrespective of the risk of damage to the integrity of our system of justice.

4. Whether the contemnor has received, or sought to receive, a benefit or gain from the contempt

63. The benefit which Mr David Mahaffy and his company received from the contemptuous course he has pursued, is obvious.

64. Costs orders are not made in order to punish losing parties, but in order to recompense the winning party for a part, at least, of the costs they have been put to, by being brought to court.

65. The course which Mr David Mahaffy pursued had the result that he and his company have had the use of money which ought to have been paid to Mr Jeffrey Mahaffy to satisfy the very considerable costs orders made by the District Court, this Court and the Court of Appeal in his favour.

66. Mr Mahaffy’s conduct has deprived Mr Jeffrey Mahaffy of the costs to which he was lawfully entitled. There is evidence that Mr David Mahaffy and his company had funds which could have been used to satisfy the orders which bound them, but they were used for other purposes. In the company’s case, that included meeting Mr David Mahaffy’s personal expenses, while various steps were pursued to shelter available funds from Mr Jeffrey Mahaffy’s attempts at enforcement of the orders made in his favour.

67. Mr Jeffrey Mahaffy was also unquestionably caused deliberate damage, by the pursuit of groundless applications, when Mr David Mahaffy refused to accept unfavourable decisions made against him and the company. That, undoubtedly, put Mr Jeffrey Mahaffy to further time, trouble and expense, which he had to fund, in order to resist claims already litigated, the pursuit of which were found to have involved abuses of process.

68. Parties to litigation are not so entitled to put court decisions and orders to nought, in order to advance their own interests.

5. Whether there has been any expression of genuine contrition by the contemnor

69. There is no evidence of Mr David Mahaffy having either remorse or contrition for any of his contempt.

70. When he appeared at the directions hearing in March 2015, after the February judgment was given, Mr David Mahaffy said “[t]his whole matter is actually going to be reheard because of a corrupt judge, Mr McLaughlin[sic]”. He has not resiled from that attitude.

71. The course which Mr David Mahaffy has since pursued at directions hearings when he participated by telephone and what he has said in his written communications, were inconsistent with him either accepting the conclusions reached in the February judgment as to his proven contempt, or having any remorse or contrition for the behaviour on which those conclusions rested.

72. On 17 July, Mr David Mahaffy participated in a directions hearing via telephone. This participation had to be brought to an end because of his vehement abuse, which included:

“You can tell I’m not very happy. This is corrupt. This is corrupt. And the whole system is corrupt.”

And later

“This is highly corrupt. The judges are corrupt.”

73. In the affidavit which Mr David Mahaffy swore on 7 August and the written submissions which he provided on sentence he also repeated his contemptuous remarks about McLoughlin DCJ and White J. This establishes beyond any doubt, that he has no contrition for any of his contempt.

6. The character and antecedents of the contemnor

74. Mr David Mahaffy was a practicing accountant at the time of the District Court proceedings. He is a mature man, obviously well educated, who has, it appears, in the past enjoyed business success. Ordinarily, it might be expected that such a person would be of good character, that notion encompassing as it does both reputation and intrinsic character.

75. There is evidence which shows that Mr David Mahaffy does not have such a character.

76. Mr David Mahaffy has, it appears, a record of convictions in the Local Court, although what he was convicted of, was not revealed by the evidence. It is relevant, however, that those five convictions are being appealed to the District Court. What is pursued in those proceedings, was also not established.

77. Mr David Mahaffy became a bankrupt in 2013. He later ceased being a director of his company, but in January 2015 swore an affidavit in District Court proceedings, stating that he was then its managing director. That does not accord with ASIC searches in evidence.

78. Mr David Mahaffy’s application for renewal of his registration as a tax agent was refused by the Tax Practitioner’s Board on 11 September 2013, after he was found not to be a fit and proper person to hold registration under the Tax Agent Services Act 2009 (Cth). On 8 January 2014, that decision was stayed by the AAT, on certain conditions.

79. Mr David Mahaffy continued to work as an accountant, at his company’s former premises, where another company, Mahaffy Accounting Pty Ltd of which he is secretary, trades. In June 2014, this company advertised in the local press, offering to undertake tax work.

80. It thus appears that Mr David Mahaffy had an ongoing source of income, but still he did not take steps to satisfy any of the cost orders which bound him, an available way to attempt to purge his contempt.

81. On 25 November 2014, however, the AAT’s stay was revoked, after a hearing at which Mr David Mahaffy also did not appear. The revocation of his registration took effect on 1 December 2014.

82. That decision was appealed to the Federal Court. Mr David Mahaffy also did not appear at the hearing on 17 February 2015, when his appeal from the AAT was dismissed as incompetent (see Mahaffy v Administrative Appeals Tribunal [2015] FCA 251; (2015) 65 AAR 283). Final judgment was given by the AAT on 26 March 2015, refusing Mr David Mahaffy’s application for review of the Board’s 2013 decision (Mahaffy v Tax Practitioners Board [2015] AATA 173).

83. None of this sheds favourable light on Mr David Mahaffy’s character.

84. That Mr David Mahaffy has persisted in his pursuit of his contemptuous conduct, despite the conclusions reached in the February judgment, is also relevant to an assessment of his character.

85. His behaviour was so extraordinary that I have had occasion, more than once, to bring to an end his participation in directions hearings by telephone, an opportunity afforded to him, to accommodate his claimed health issues. On the first occasion, in July 2015, that resulted from the following exchange:

“SECOND PLAINTIFF: There will be no sentence hearing, I'll tell you now. There will be no sentence hearing at all. I'm not fucking guilty.

HER HONOUR: Mr David --

SECOND PLAINTIFF: I am not guilty. The person sitting in front of you is the fucking crook and the judge in the district court is a crook and I'll take care of them right away. Fine.

HER HONOUR: Mr David Mahaffy please contain yourself.

SECOND PLAINTIFF: No I'm not. I'm fucking pissed off.

HER HONOUR: I'm going to bring this to a close. Your language is --

SECOND PLAINTIFF: I'll bring it to a close all right, don't you worry about that.

HER HONOUR: You will be informed as to the Court's directions. Please disconnect that --

SECOND PLAINTIFF: Fine. Fuck off.

(Telephone link disconnected.)”

86. This is not the conduct of a person of good character.

87. In the result, it cannot be concluded that Mr David Mahaffy’s antecedents or character can be taken into account in his favour on sentencing.

7. The contemnor’s personal circumstances.

88. Mr David Mahaffy has led no evidence about his health, or any other relevant consideration arising from his personal circumstances, to be taken into account on sentencing.

89. Throughout the course of the proceedings, Mr David Mahaffy has referred to his ongoing ill health in oral submissions, as well as in documents sent to the Court, but he did not deal with these matters in his written submissions. He has at times sent medical certificates to the Court, but did not appear to put on evidence about his health, or his personal circumstances, at the sentence hearing. Were he to have done so, that evidence would, no doubt, have been tested.

90. Even accepting that Mr David Mahaffy suffers the ill health which he has claimed from time to time such as diabetes and a heart condition, that provides no excuse for the contempt established on the evidence.

91. As discussed in NSW Crime Commission v Field [2003] NSWSC 5 at [53] - [54], ill health is also not a basis on which punishment for contempt can be avoided and will be a factor taken into account by way of reduction of a term of imprisonment, only where it is established that it will impose serious, adverse effects on health. Mr David Mahaffy has not led such evidence.

92. Nor has Mr David Mahaffy attempted to establish that he has any health conditions which could not be treated in custody. There is no evidence before the Court which provides a basis on which his sentences can be ameliorated on account of his health, or any other relevant personal consideration.

8. The need for deterrence of the contemnor and others of like mind from similar disobedience

93. The contempt established is serious, as I have explained.

94. There is in the circumstances a significant need for deterrence, both for Mr David Mahaffy himself and for others of like mind, to feature in the sentence imposed upon him.

9. The need for denunciation of contemptuous conduct

95. There can in this case be no question as to the need for the Court’s denunciation of all of the conduct which comprises Mr David Mahaffy’s serious contempt.

96. The complete absence of any remorse or acknowledgment of wrongdoing on Mr David Mahaffy’s part is disturbing and weighs against any leniency being afforded to him.

Discretion not to convict

97. The Court, undoubtedly, has a discretion not to convict, even if contempt is established on the evidence (see Pang at [134] - [135]).

98. Given the conclusions which I have reached, particularly when considered in light of the course of conduct which Mr David Mahaffy has pursued since the February judgment was given, it must be concluded that it is not appropriate for that discretion to be exercised in Mr David Mahaffy’s favour. Nor was that a course which he sought.

Punishment

99. In arriving at Mr David Mahaffy’s sentence I have had regard to the purposes of sentence specified in s 3A of the Crimes (Sentencing Procedure) Act. They are:

“(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.”

100. I have considered all possible sentencing alternatives, but on the evidence am satisfied that no penalty other than imprisonment is appropriate for Mr Mahaffy’s serious contempts, involving as they did the blatant, determined and repeated attacks on the integrity of the civil justice system, which I have here discussed. This is not a case where orders can be made in order to coerce compliance with the Courts’ orders.

101. In his March 2013 judgment, Garling J rejected the case then advanced for Mr David Mahaffy, that a failure to comply with a court order requiring the payment of money, could not amount to contempt (Mahaffy v Mahaffy [2013] NSWSC 245). His Honour also took the view that such contempt could result in a term of imprisonment being imposed on Mr David Mahaffy, if deliberate defiance of court orders were established. It has been.

102. In Wyszenko v Wyszenko [2012] NSWSC 732, White J took the view in a case where a money order which the defendant was not in a position to pay, that:

“22    Even if contempt had been established, I would not have been prepared to make any orders for punishment of the contempt. The order in question is for the payment of a sum of money. Except in cases of contempt, the Civil Procedure Act and the Rules do not provide for attachment or committal as a mode of enforcement for the enforcement of a money judgment. Debtors' prison has fallen into disfavour. In Re Davies (1888) 21 QBD 236 Mathew J, albeit in a very different context, said (at 239) that:

"Recourse ought not to be had to process of contempt in aid of a civil remedy where there is any other method of doing justice."

23   That principle was endorsed by Nettle and Ashley JJA in the Court of Appeal in Victoria in Morgan v State of Victoria [2008] VSCA 267; (2008) 22 VR 237 (at [145]). Their Honours said:

"It is a general principle that process by way of contempt should not be lightly employed and not in aid of a civil remedy where some other method of achieving justice is available."

103. This, however is an unusual case, where contempt charges have been successfully pursued, after other methods of achieving justice failed. In the result, it must be accepted that a fine or some other non-custodial sentence is not an appropriate penalty in this case, given the seriousness of the contempts Mr David Mahaffy has committed, when considered together with his lack of contrition for that contempt and the course he continues to pursue. It is apparent that no other sentence is capable of deterring him.

104. The first money order charge involved the failure of DB Mahaffy & Associates Pty Ltd to pay $136,679.46, ordered on 4 September 2009 (charge 1) and the second, the failure to pay $25,000.00 ordered on 16 July 2010 (charge 5). These charges involved serious, wilful contempt, not simply casual, accidental or unintentional disobedience of the courts’ orders, the first warranting, I have concluded, having considered all of the matters I have discussed, a term of imprisonment of 4 months and the second, a term of imprisonment of 3 months. Charge 6, concerned with the subpoena served in July 2010, also a very serious contempt involving deliberate disobedience of the subpoena, warrants a sentence of 6 months’ imprisonment.

105. The third money order charge, the failure to pay $22,000.00 within 7 days ordered by the Court of Appeal on 23 September 2010 (charge 8), also involving similar deliberate conduct, also warrants a 4 month term of imprisonment. The fourth money order charge, the failure to pay $1,100.00 which Rein J ordered on 1 October 2010 (charge 9), is a less serious contempt, which warrants a 2 month term of imprisonment.

106. The fifth charge money order (charge 13) involved Mr David Mahaffy conducting his financial affairs and operating his bank accounts so as to deliberately avoid enforcement of garnishee court orders for judgments and cost orders which he and DB Mahaffy & Associates Pty Ltd owed Mr Jeffrey Mahaffy. That too, is also objectively very serious, deliberate conduct, also warranting a 4 month term of imprisonment.

107. The two court behaviour charges, charges 7 and 11, are each objectively very serious contumacious contempt, that involving McLoughlin DCJ even more serious than that involving White J. The appropriate sentence for charge 7 is 8 months’ imprisonment and for that involving White J, charge 11, the appropriate sentence is 6 months.

108. Given the number of separate contempts for which Mr David Mahaffy is being sentenced, questions of totality and accumulation of sentences also arise to be considered.

109. I have concluded that the result of that exercise should be an aggregate sentence, as s 53A of the Crimes (Sentencing Procedure Act), permits. Determination of that sentence must be approached in the way discussed in Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59 at 62 - 63, namely in order to ensure a sentence which is just and appropriate for the totality of Mr David Mahaffy’s contempt, regard must be had to what was involved in all of the contempt for which he is being sentenced. That exercise must, in this case, involve considerable concurrency of sentences, particularly given that many of these acts of contempt involve the failure to pay cost orders, which ordinarily would not result in committal. It cannot involve a discount for Mr David Mahaffy’s multiple acts of contempt. It must also, however, avoid the imposition of a crushing sentence upon him. That is a difficult exercise in this case.

110. Having considered all of the matters I have discussed, I have concluded that there must be a total aggregate fixed term sentence of 10 months imposed upon Mr David Mahaffy.

Costs

111. In Hinch v Attorney-General (Vic) [1987] HCA 56; (1987) 164 CLR 15 at 89-90 it was observed that contempt proceedings “proceed in the civil jurisdiction and attract the rule that ordinarily applies in that jurisdiction, namely, that costs follow the event”. As White J discussed in ASIC v Sigalla (No 6) [2012] NSWSC 83; (2012) 291 ALR 391 at [31], the Court has power to order costs under its inherent jurisdiction, preserved by s 23 of the Supreme Court Act1970 (NSW).

112. In his March 2013 judgment on Mr David Mahaffy’s summary dismissal application, Garling J ordered that each party pay his own costs of the motion, including any reserved costs. That reflected that each party had achieved a measure of success on the motion.

113. The remaining costs of the proceedings now arise for determination.

114. Given the conclusions which I have reached, I am satisfied that this is an appropriate case for a costs order to be made in Mr Jeffrey Mahaffy's favour, notwithstanding that he did not establish every contempt charged. Mr David Mahaffy made no submission to the contrary.

115. Given Mr Jeffrey Mahaffy’s overwhelming success in establishing the serious contempt dealt with in this and the February judgment, I am satisfied that justice requires that a costs order be made in his favour.

Warrant

116. Mr Mahaffy advised that he would not appear for sentence. In the circumstances, it is appropriate for Mr David Mahaffy’s sentence to commence from the date of his arrest. I will accordingly order that a warrant for his arrest be issued, as well as a warrant for his committal to a correctional centre, under s 62(1) of the Crimes (Sentencing Procedure) Act .

Orders

117. For the reasons given, I find Mr David Mahaffy guilty of the contempt alleged in charges 1, 5, 6, 7, 8, 9, 11 and 13 and order:

1. Mr David Mahaffy is sentenced to serve a total term of imprisonment of 10 months, to commence from the date of his arrest.

2. That Mr David Mahaffy pay Mr Jeffrey Mahaffy’s costs of these proceedings, other than those dealt with by Garling J in his March 2013 judgment, as agreed or assessed.

3. A warrant for Mr David Mahaffy’s arrest be issued.

4. A warrant for Mr David Mahaffy for committal to a correctional centre be issued under s 62(1) of the Crimes (Sentencing Procedure) Act 1999 (NSW).

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I certify that this and the ……

preceding pages are a true copy of

the reasons for judgment herein

of the Honourable Justice Schmidt

DATE: ………………………………………….

ASSOCIATE: …………………………………

Decision last updated: 18 December 2015