Domeny and Domeny - [2011] FMCAfam 306

FEDERAL MAGISTRATES COURT OF AUSTRALIA

DOMENY & DOMENY

[2011] FMCAfam 306

FAMILY LAW – Contravention of property orders – repeated directions for disclosure of financial documents – plea of guilty by respondent – finding of no reasonable excuse – consideration of various penalties available and of which may be appropriate in the circumstances – reference to factors to be considered – consideration of whether any penalty other than costs may be required – determination of a fine – consideration of costs argument and whether appropriate to order indemnity costs.

Family Law Act 1975, ss.112AD, 112AD(2) )(a), (b), (c), (d), 112AE(1) - (8), 112AF, 112AG, 117(2A)(d)
Commonwealth Crimes Act 1914, s.4AA

Cummings & Cummings (1976) FLC 90-100
Ibbotson & Wincen (1994) FLC 92-496
McClintock & Levier (2009) FLC 93-401
Colgate-Palmolive Pty Limited & Cussons Pty Limited (1993) FCR 46-225

Applicant:

MS DOMENY

Respondent:

MR DOMENY

File Number:

TVC 654 of 2007

Judgment of:

Coker FM

Hearing date:

22 March 2011

Date of Last Submission:

22 March 2011

Delivered at:

Townsville

Delivered on:

8 April 2011

REPRESENTATION

Counsel for the Applicant:

Mr Middleton

Solicitors for the Applicant:

Bill Petschler Lawyers

Counsel for the Respondent:

Mr Kalimnios

Solicitors for the Respondent:

O'Reilly Lillicrap

ORDERS

That pursuant to the provisions of Section 112AD(2)(c), the Respondent pay a fine of $5,500 (50 penalty units) within 28 days of the date of this Order.
That the Respondent pay the Applicant’s costs on an indemnity basis as agreed and, failing agreement, to be taxed.
Certify for Counsel.

IT IS NOTED that publication of this judgment under the pseudonym Domeny & Domeny is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT TOWNSVILLE

TVC 654 of 2007

MS DOMENY

Applicant

And

MR DOMENY

Respondent

REASONS FOR JUDGMENT

This judgement relates to the final phase to be dealt with in relation to proceedings which were commenced on 29 March 2010 when

Ms Domeny, whom I shall refer to as the applicant, filed an Application for Contravention relating to what she says were breaches of orders of 16 February 2010. Those orders were in these terms:
1. The Respondent file and serve a financial statement setting out his assets and liabilities verified on affidavit within 28 days of today.
2. The Respondent deliver up to the Applicant’s solicitors within 14 days of today the following documents:
(a)A list of companies, trusts and other entities in which the Respondent has an interest;
(b)Income tax returns for the Respondent and all of his entities for the year ended 30 June 2009 and the four years prior to that;
(c)Valuations (if any) of all properties owned by the Respondent or any entity or trust in which the Respondent has an interest;
(d)Bank statements for the last five years for the Respondent and or any entity or trust in which the Respondent has an interest;
(e)Details of any superannuation entitlement held or paid by or to the Respondent;
(f)Financial statements for the Respondent’s controlled entities for the past five financial years;
(g)Current financial statements for the Respondent’s controlled entities since the last formal financial statements together with bank statements for this period;
(h)Any statements of assets and liabilities the Respondent and/or any of his controlled entities has provided to financial institutions over the last five years; and
(i)Financial statements for any trusts that the Respondent is or may be a beneficiary of.
3. Details of assets sold or otherwise disposed of over the last five years.
4. The Enforcement Summons is adjourned to 9.30am on 6 April 2010 for the oral examination of the Respondent and/or such further or other enforcement proceedings as are deemed appropriate to the circumstances of the case.
5. The costs of and incidental to the Application in a case and Enforcement Summons are reserved.
They arose, in fact, from the filing of an Enforcement Summons on 18 January 2010. In that Enforcement Summons, the applicant sought orders with regard to ensuring that there be payment of moneys outstanding to her pursuant to property settlement orders, that were made on 25 May 2007. Those orders included, specifically, orders with regard to the payment to her of a sum of $150,000 and, though some of those moneys were paid, the vast bulk of the sum had not been received, and a result of that with, accrued interest, there was an amount, it was calculated as at 2 November 2009 required to be paid, in the sum of $212,501.33.
There was also, pursuant to the orders of 25 May 2007, an obligation to pay a tax liability which could also attach to the applicant and that had not been paid. As a result of the issuing of the Enforcement Summons, the orders were made on 16 February 2010 requiring the production of documentation. The contravention application noted six contraventions of that order, all of the nature of a failure to comply with the obligation to file and serve a financial statement or to provide documentary evidence required to be produced to enable the Enforcement Summons to be dealt with.
On 6 April 2010 further orders were made which extended the time for operation of the directions of 16 February 2010 to no later than 4pm on 14 May 2010. The contravention application was then listed for hearing on 31 May 2010 and, at that time, the costs of the appearance on 6 April 2010 were reserved.
The respondent, Mr Domeny, failed to comply with the directions either of 16 February 2010 or within the timeframe provided by the extended directions of 16 February 2010, such that on 18 May 2010, which, of course, was subsequent to the time that the extension was granted to, a further contravention application was filed which, again, detailed the failures by the respondent to comply with the orders.
The matter came before the court again on 31 May 2010 and, at that time, the respondent was self represented. He pleaded guilty to the breaches alleged within counts 1, 2, 3, 4, 5 and 6 of the Application for Contravention filed 29 March 2010 and, additionally, pleaded guilty to counts 1 and 2 contained within the contravention application filed on 18 May 2010. The notation in relation to those findings contained within the orders of 31 May 2010 was as follows:
The Court finds that upon admission the Respondent has contravened the orders of the Federal Magistrates Court of Australia made on 16 February 2010 and 6 April 2010 without reasonable excuse on counts, 1, 2, 3, 4, 5, 6 of the Application for Contravention filed 29 March 2010 and counts 1 and 2 of the Application for Contravention filed on 18 May 2010.
Orders were then made by consent, in relation to what was to occur in respect of the proceedings and the contravention itself was to be adjourned to 9.30 am on 15 June 2010, for sentencing. There were many issues that subsequently arose in relation to the sentencing including other proceedings which were instituted in relation to the matter, as well as other orders, including orders which were made with regard to the appointment of a trustee for sale of the interest that the husband had in [C] Pty Ltd and, by extension, to the interest that the husband held in [W] Pty Ltd.
Orders were also made for the respondent to pay the costs of the applicant of and incidental to the enforcement proceedings and the contravention proceedings, on an indemnity basis. As I have indicated, sentencing remained outstanding and on 22 March 2011 this matter came before the court for sentencing.
The sanctions for failure to comply with orders, other than orders and other obligations that do not affect children, is contained within the provisions of Part XIVA of the Family Law Act. In particular Division 2 is relevant and Section 112AD sets out the sanctions for failure to comply with orders. Section 112AD is in these terms:
(1)[Appropriate sanctions] If a court having jurisdiction under this Act is satisfied that a person has, without reasonable excuse, contravened an order under this Act, the court may make an order for the imposing, in respect of the person, of one or more of the sanctions available to be imposed under subsection (2), being a sanction or sanctions that the court considers to be the most appropriate in the circumstances.
(1A)[Sanctions following compliance] The power given to the court under subsection (1) in respect of a contravention of a maintenance order applies even if the order has been complied with before the matter of the contravention comes before the court.
(2)[Available sanctions] The sanctions that are available to be imposed by the court are:
(a)to require the person to enter into a bond in accordance with section 112AF; or
(b)to impose a sentence by order on the person, or make an order directed to the person, in accordance with section 112AG; or
(c)to fine the person not more than 60 penalty units; or
(d)subject to subsection (2A), to impose a sentence of imprisonment on the person in accordance with section 112AE.
(2A)[Imprisonment] The court must not impose a sentence of imprisonment on the person under paragraph (2)(d) in respect of a contravention of a maintenance order unless the court is satisfied that the contravention was intentional or fraudulent.
(3)[Time for order to take effect] An order under subsection (1) may be expressed to take effect immediately, or at the end of a specified period or on the occurrence of a specified event.
(4)[Orders necessary to ensure compliance] Where a court makes an order under subsection (1), the court may make such other orders as the court considers necessary to ensure compliance with the order that was contravened.
As is obvious there are various penalties which can properly be imposed in relation to a failure to comply with orders and obligations not relating to children. They include the imposition of a bond in accordance with Section 112AF or, pursuant to the provisions of Section 112AG, orders in relation to what is commonly referred to as community service. There is also, as is obvious, the opportunity to consider an appropriate fine to be imposed upon a person found to have breached orders of this nature or, finally, pursuant to the provisions of Section 112AD(2)(d), the imposition of a sentence of imprisonment on a person.
I am urged on the part of the applicant in this matter to consider the making of an order for the respondent to be imprisoned, though it was conceded on the part of the applicant that the position now taken by her in relation to this matter had somewhat softened over and above that which was her original stance in relation to the matter, and what is proposed by her is that, if it were found that a period of imprisonment were appropriate, then that that should be suspended for a period, although it was suggested that it would be “subject to the full cooperation of the husband with the wife in relation to all family law issues”.
I shall come to that particular aspect of the matter in due course. If, as is urged upon me, a penalty is to be imposed which includes a sentence of imprisonment then consideration must be given to the provisions specifically set out in Section 112AE, subsection (1) through (8). Section 112AE is in these terms:
Sentences of imprisonment
(1) A sentence of imprisonment imposed on a person pursuant to paragraph 112AD(2)(d) shall be expressed to be:
(a) for a specified period of 12 months or less; or
(b) for a period ending when the person:
(i) complies with the order concerned; or
(ii) has been imprisoned pursuant to the sentence for 12 months or such lesser period as is specified by the court;
whichever happens first.
(2) A court shall not sentence a person to imprisonment pursuant to paragraph 112AD(2)(d) unless the court is satisfied that, in all the circumstances of the case, it would not be appropriate for the court to deal with the contravention pursuant to any of the other paragraphs of subsection 112AD(2).
(3) If a court sentences a person to imprisonment pursuant to paragraph 112AD(2)(d), the court shall:
(a) state the reasons why it is satisfied as mentioned in subsection (2); and
(b) cause those reasons to be entered in the records of the court.
(4) The failure of a court to comply with subsection (3) does not invalidate a sentence.
(4A) A court that sentences a person to imprisonment under paragraph 112AD(2)(d) may:
(a) suspend the sentence upon the terms and conditions determined by the court; and
(b) terminate a suspension made under paragraph (a).
(5) A court, when sentencing a person to imprisonment under paragraph 112AD(2)(d) may, if it considers it appropriate to do so, direct that the person be released upon the person entering into a bond described in subsection (6) after he or she has served a specified part of the term of imprisonment.
(6) A bond for the purposes of subsection (5) is a bond (with or without surety or security) that the person will be of good behaviour for a specified period of up to 2 years.
(7) Without limiting the circumstances in which a court may discharge an order under section 112AK, a court that has sentenced a person to imprisonment for a period expressed as provided by paragraph (1)(b) may order the release of the person if it is satisfied that the person will, if he or she is released, comply with the order concerned.
(8) To avoid doubt, the serving by a person of a period of imprisonment under a sentence imposed on the person under paragraph 112AD(2)(d) for a failure to make a payment under a maintenance order does not affect the person's liability to make the payment.
A court must not impose a sentence of imprisonment upon a person in respect of a contravention unless, as it is suggested in subsection (2):
The court is satisfied that, in all the circumstances of the case, it would not be appropriate for the court to deal with the contravention pursuant to any of the other paragraphs of subsection 112AD(2).
Accordingly, it is clear that before consideration is given to a sentence of imprisonment, whether suspended or not, there must be direct consideration of whether it is appropriate to make any other form of order which is available, pursuant to the provisions of section 112AD and whether, in all the circumstances, that would be the proper course to follow.
Here, as I have indicated, it is urged upon me on the part of the applicant that there is no other course that would properly be able to be followed in relation to the matter. The reason that that is urged on the part of the applicant is, as I understand it, summarised as follows:
· A bond would not be appropriate because it would have no real effect upon the respondent. The reason for that, it is suggested, is because there have already been orders made in relation to the appointment of a trustee for sale of the respondent’s interests in the companies to which I have previously referred and, therefore, the bond is not the influence, or would not have the influence upon the respondent that it would be expected to have, if he were required to be doing certain things in relation to the operation of the companies including, of course, the sale of shares.
· It was suggested that a fine would not be appropriate because the maximum available pursuant to the Act is 60 penalty units and the current value of a penalty unit is $110, pursuant to the provisions of Section 4AA of the Commonwealth Crimes Act 1914. The total fine, therefore, would not exceed $6,600 and it was submitted that, as the value of the shares and interests in the mining leases which were held, were so significant, even after the payment of liabilities and the payment of the moneys due and owing to the applicant, the respondent would receive, it was submitted though not necessarily acknowledged on the part of the respondent, in excess of $1 million and, therefore, would not be the proper detriment or punishment for the respondent, in light of his financial circumstances.
It was suggested, therefore, that there was only one appropriate penalty, that being imprisonment. I was not specifically addressed as to the possibility of what is commonly referred to as a community service order, but neither of the legal representatives for the applicant or the respondent appeared to consider that it was an appropriate penalty or a matter that would need to considered by me.
In any event, having looked at the various alternatives, I am satisfied, particularly having been advised of the fact that the respondent has just obtained employment, which includes employment overseas, that it would not be something that could properly be considered as an appropriate sanction for the failure to comply with the orders.
To consider, therefore, whether it was appropriate to impose imprisonment or other penalty there needed to be consideration of what would be the appropriate order to make to punish the breach or breaches that are before me. In that respect I was directed, understandably, to a number of decisions over time in relation to contempt or serious contravention.
It is noteworthy that the first of the decisions to which I was referred was the marriage of Cummings & Cummings (1976) FLC 90-100. In that case the Full Court, which compromised Chief Justice Evatt, Senior Justice Pawley and Justice Fogarty, in considering contempt proceedings turned their minds specifically to factors that did need to be considered in relation to any such decision. At pages 75-461 and 75-462 they said the following:
In deciding whether to impose imprisonment, fine or other penalty there are a number of factors which the Court needs to consider:
(a)the need to consider the parties’ future relationships and the role of counselling;
(b)the need to ensure compliance with a particular order in future;
(c)the need to protect a party from violence or interference;
(d)the need to impose a punishment appropriate to the breach; and
(e)the need to uphold the authority of the Court to make effective orders.
Many of those considerations are not necessarily relevant here. Certainly there is no need to ensure compliance with a particular order in the future. These contraventions arose in relation to property proceedings and, as I have indicated, steps have now been taken to remove the need for continued cooperation and compliance by the respondent.
There is no specific need to protect a party, in this case the applicant, from violence or interference. Certainly there is no suggestion of violence, though it was strongly submitted to me that the effects of the failure by the respondent to comply with the various steps that were required to facilitate the payment, pursuant to the orders of 2007 or, in fact, to produce documentation and other information, pursuant to the orders of February and April 2010, led to both financial and emotional toil being imposed upon the applicant. I am satisfied that there is certainly an element of that arising in relation to this matter, but it is, one would think, with respect, at the lower end of the spectrum.
Additionally, there must be consideration of the need to impose a punishment appropriate to the breach, and, finally, the need to uphold the authority of the court to make effective orders.
The imposition of a punishment appropriate to the breach, is exactly the factors that are being considered in relation to this matter and I will, of course, in due course, turn to the submissions that were made on the part of the respondent.
There is also, obviously, a need to uphold the authority of the court to make effective orders and, in this instance, it is certainly strongly submitted on the part of the applicant, that that is an element here that needs to be considered. The fact is that this matter repeatedly came before the court and undertakings were given by the respondent to provide information and, generally, to cooperate fully with the orders of the court, and yet there were repeated failures on the part of the respondent to take such steps.

It was strongly suggested, therefore, that there was a pattern of conduct by the respondent which included delay and procrastination, but which also then specifically gave rise to an unnecessary incurring of expense and wastage of the court’s time, as well as public or community costs. It was submitted that that was a factor that needed to be looked at and, perhaps arising from a need to consider a deterrent of other persons in the community acting in a similar way, that there had to be a serious penalty imposed.
I am not necessarily convinced that that is the case in this particular matter, though I accept unconditionally that those considerations are appropriate. I am more inclined in this matter very much to the view that, whilst there was obstruction and delay or procrastination on the part of the respondent, it was not done with malice or forethought. Certainly, it was not a situation where there was a determination on the part of the respondent to fail to comply with the orders, but rather, I would think, a failure to, in any real way, properly appreciate the seriousness and significance of the orders that were made and the possible consequence of failure to comply.
In that respect I note that counsel for the respondent, on more than one occasion, emphasised the fact, and it was accepted on the part of the applicant, that, once the respondent was legally represented, there was compliance and there was cooperation provided.
It was submitted that that was indicative of the fact that, rather than a determination to breach the orders with knowledge, it was rather a situation of the respondent being at a loss to deal with the orders that were made and to realise that the difficulties that he may or may not have been experiencing, in relation to provision of information and, in particular, to get into order his own affairs, was not necessarily an all-encompassing excuse for failure to comply with orders.
It is, in my view, a significant factor to be taken into consideration, along with the first of the factors that was referred to by the judges of the Full Court in Cummings & Cummings (supra), in 1976. There is here a very real need to consider the parties’ future relationships with each other.
In that respect there is certainly a situation where there is a child of the relationship and both parents are involved, to varying degrees, in the child’s life. It would therefore be remiss of me, in my assessment, not to be mindful of the fact that, notwithstanding the difficulties that have been experienced in relation to the resolution of financial matters as between the parties, there is an ongoing obligation and necessity for exchange between the applicant and the respondent, as a result of their continued role in relation to the parenting of their child.
These proceedings, of course, relate to obligations in respect of property settlement, but it would be naïve in the extreme to not accept that, whilst there may or may not be penalties or steps taken in relation to property, they will have, at least peripherally, an effect upon the parties’ abilities to deal with each other and, therefore, of course are necessarily required to be considered in relation to the parties’ future relationships.
It is a significant matter and it also, in my view, is significant in light of the suggestion as to the possible compromise that the applicant thought might be appropriate, in relation to this matter. In other words, the imposition of a penalty which included imprisonment, but that any period of imprisonment were to be suspended for a time, but subject to the respondent’s cooperation in all respects with issues in relation to family law.
I could not imagine a more provocative arrangement or order, than would arise in such a situation. It would be what I might call, “a Sword of Damocles” hanging over the head of the respondent, if it were to be suggested that a breach of the order including, for example, the late collection or return of a child, would mean that there was the possibility of there being brought back before the court, a breach in relation to parenting arrangements which might give rise to a period of imprisonment being automatically imposed upon one party or the other.
It is, in my view, an unworkable arrangement and one which I would not consider appropriate. The fact is that there is either a determination that there is no penalty appropriate other than imprisonment and, therefore, imprisonment is imposed or it is a situation where one of the other sanctions available, pursuant to the provisions of Section 112AD are able to be properly considered, in relation to this matter.
I have given consideration to the submissions that have been made in relation to this matter and, in particular, the submissions made on the part of the respondent. In fact, from the respondent’s perspective, it was strongly contended that in fact the appropriate penalty is simply to make an order for costs. I am mindful in that regard, of course, that there is a general acknowledgement that there should be some order for costs made in relation to this matter, though there is dispute as to whether they should be costs on an indemnity basis from 31 May 2010 until the present time, or whether they should be costs ordered on a different basis, including simply party and party costs.
I am not necessarily enamoured of that particular prospect in relation to the matter, because it would then fail to recognise the continued nature of the breach by the respondent in relation to the orders that were made.
I have also given consideration to the other cases that were raised by counsel for the applicant in relation to this matter. I note in particular that Ibbotson & Wincen (1994) FLC 92-496 was referred to me and, in particular, reference was made there to the need to consider, as appeared to be the case here, repeated contraventions of orders in relation to production of documentation as well as, it was submitted, a blatant disregard of the authority of the court.
In that matter, however, the actions that led to the husband being brought before the court and imprisoned were very different to the circumstances that exist here. First and foremost, of course, was the fact that it was not in relation to issues with regard to property orders, but rather the holding over or, in fact, abduction of a child and the holding of that child for a very significant period of time, in a country which was not a Hague Convention country, and a determined effort on the part of the husband in that case, to thwart the operation of orders which had properly been made.
In that particular instance the court, in the head note to Ibbotson & Wincen (supra) spoke of the sentence in terms of:
The facts of this case were particularly blatant. It was a conscious and deliberate attempt by the husband to thwart the orders of the Court and to act in complete disregard of the rights of his former wife and his child. In addition, it is important to bear in mind the substantial community interest which is involved in cases of this type and the importance of a general deterrent.
In this instance there was, certainly, two occasions, though the counts are more numerous because of breaches alleged of various of the directions that were made. However, I have not found that the husband made a conscious and deliberate attempt to thwart the orders of the court or to simply disregard the orders. It was rather, if you like, a situation where the husband failed to fully appreciate the consequences that flowed from the breach of the orders and I think there was no direct determination on this part to fail to provide the information or to cooperate with the applicant and with the court, in relation to production of documentation.
That is evidenced particularly by the fact that the behaviours that were the subject of the proceedings stopped once legal representatives became involved, and that is a particular consideration in relation to the matter. I am of the view that the considerations that arose in Ibbotson & Wincen (supra) are clearly able to be distinguished in relation to this matter.
Similarly, in McClintock & Levier (2009) FLC 93-401, the judges of the Full Court were there dealing with an appeal from a sentence of imprisonment in relation to breaches of parenting orders. There is, obviously, a distinction that is drawn between the consequences and effects, not only upon the parties, but also upon children in relation to breaches of parenting orders, as opposed to breaches of orders in relation to matters of property.
I am satisfied that, whilst there is obviously a need to ensure that orders of the court are complied with, this is not an instance where the only possible sanction that could properly be imposed is one of imprisonment. I am far more inclined to the view that the appropriate course is to consider one of those penalties that arise, pursuant to the provisions of Section 112AD(2)(a), (b) or (c).
In this instance I am not of the mind to consider that a bond is appropriate. It does have little influence in relation to this matter and certainly would not be any real recognition of the fact that the orders of the court were breached. Similarly, I am not inclined at all to the view that it would be appropriate to order some form of community service to be performed, by the respondent. To do so would have serious consequences, not only for the respondent, but also, it would appear, for the applicant and the child of the applicant and respondent’s relationship.
I say that particularly in light of the uncontested indication given to me, that the respondent has recently obtained employment which involves work in his particular area of expertise in Papua New Guinea. Obviously, therefore, the obligation to perform some form of community service would have real difficulties in its compliance and enforcement, because of the obligation to work outside of the jurisdiction of the Commonwealth of Australia and also the difficulties that would obviously arise with regard to limited opportunities to perform such community service, when still in Australia.
It would have a flow-on effect, therefore, in that it could and would, I would think, seriously affect the capacity to maintain the employment that has been obtained by the respondent and that, of course, would then have the flow-on effect of difficulties in relation to spending time with the child and, more particularly, providing financially for the child, as has previously been the case.
I must say that in this matter I am inclined to the view that the appropriate penalty is that which is contained within the provisions of Section 112AD(2)(c) relating to a fine of not more than 60 penalty units. As I have noted previously, a penalty unit, pursuant to the Commonwealth Crimes Act Section 4AA, is $110 and, therefore, the maximum fine that could be imposed in this matter would be $6,600. I am not enamoured of the suggestion on the part of the applicant, that this would not be an effective sanction to impose because of the fact that there is a possibility of the respondent having significant funds available to him and, therefore, it would be of lesser consequence than to a person who was not so financially well off. Such an argument is, in my view, somewhat fallacious.
It is, of course, analogous to a suggestion that a penalty for speeding which involves, at least in part, a financial imposition should be greater for a person on a higher income than would be the case of a person on a lower income or in receipt of some form of benefit or pension. The fact is that the fine that is imposed in such a situation is fixed, to reflect the government’s assessment of what is appropriate in the circumstances.
Similarly here, the legislature has provided a maximum penalty. There is a discretion that vests in the court in relation to what is appropriate, but there is no suggestion whatsoever that it should in some way be applied dependent upon the financial circumstances of the party, who is being considered for penalty. To do so would be, in my view, an unrealistic approach in relation to what would be the appropriate penalty and it is, of course, more the case that the court is required to consider the breach and the penalty that should properly apply to the breach, than to consider the financial circumstances of the party alleged to have committed the breach and then to view whether that would be a significant or insignificant imposition upon them.
In the circumstances I am of the view that a fine is appropriate. I am also of the view that, whilst this is not necessarily the most serious of breaches that might lead to the consideration of the imposition of a sanction, it is a serious matter and one that should be properly reflected in the penalty to be imposed. In my assessment it is toward the upper end of any such penalty that would properly be imposed and, in the circumstances, I have come to the view that it would be appropriate to impose a fine the equivalent of 50 penalty units, which would require the respondent to pay a fine of $5,500, and I intend to make such an order with payment required to be made within 28 days of the date of this order.
That, however, is not as I have, at least in passing, mentioned in relation to these proceedings. The reason for that is that, whilst orders were made on 31 May 2010 for the payment by the respondent of the applicant’s costs of and incidental to the enforcement proceedings and to the contravention proceedings filed on 29 March and 18 May 2010 on an indemnity basis, there have been further attendances and steps taken in relation to the proceedings, which have led to further expenses being incurred.
As I indicated, it was acknowledged on the part of the respondent that the real sanction to be made in relation to this matter was that there should be an order for costs. More particularly, it was submitted to me that the costs that should be imposed in relation to this matter should not be on an indemnity basis, certainly from 31 May 2010, but should rather be, if ordered, simply on a party and party basis as envisaged, pursuant to the Federal Magistrates Court’s rules.
In that respect, of course, I am mindful of the guidance that is provided to the court pursuant to the decision of the Full Court of the Federal Court in Colgate-Palmolive Pty Limited & Cussons Pty Limited (1993) FCR 46-225. In particular, consideration of indemnity costs needs to be looked at in light of all of the circumstances surrounding the proceedings and, in particular, the actions or inactions of the person against whom indemnity costs are being considered.
In this instance I am of the view that costs on an indemnity basis are appropriate. The fact is that the application originally brought in relation to enforcement only arose as a result of the failure of the respondent to comply with orders which had been made nearly three years before, in May of 2007. Thereafter, all of the costs that were incurred arose as a direct result of the respondent’s failure to appreciate the consequences of his actions. The applicant should not, under any circumstances, be placed in a position where it is suggested that the costs she has been forced to incur, as a result of the steps taken in relation to this matter, were anything other than as a direct result of the actions on the part of the respondent.
To that end I am mindful, of course, of the various considerations that must be looked at pursuant to the provisions of Section 117(2A) of the Family Law Act and, in particular, those provisions relating to the conduct of the parties, the financial circumstances of the parties and, in particular, subsection (d):
whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court.
In this instance the conduct of the respondent, however it may have come about, either as a direct result of a determined act on his part or a failure to recognise the importance of compliance with orders, is a significant consideration. It is also clear that the proceedings in every respect were necessitated as a result of the failure of the respondent to comply with previous orders of the court, be they the orders initially made with regard to payment of settlement moneys or the subsequent orders which arose, as a result of the institution of enforcement proceedings and contravention proceedings.
The applicant has been put to considerable expense and delay as well as, I accept, some degree of emotional distress, as a result of a continued failure to meet the obligations that have arisen in relation to the orders which were made as early as May of 2007. It would be a serious injustice to the applicant to consider that she would be entirely successful, as she has been in relation to these proceedings, but that because of a failure to consider whether costs should be paid on an indemnity basis, rather than a party and party basis, she would still have to bear significant expenses as a result of continued and repeated applications to the court and appearances before the court.
I am satisfied in this instance that it is appropriate and proper that the respondent should be required to pay on an indemnity basis the entirety of the costs incurred by the applicant, up to the date of this order and intend to make the necessary order for the payment of costs on an indemnity basis, as agreed and, failing agreement, to be taxed.
This matter has also been one which has involved significant exchange between the legal representatives for the parties and repeated difficult issues have come before the court. I am satisfied, of course, that it is appropriate, therefore, that appearances by counsel on behalf of both the applicant and the respondent are necessary and appropriate, again, in relation to these proceedings and I certify for counsel on behalf of both parties in relation to these matters.

I certify that the preceding fifty-eight (58) paragraphs are a true copy of the reasons for judgment of Coker FM

Date: 8 April 2011