Fahey v Bird (No 2)
[2023] VSC 540
•12 September 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
TRUSTS, EQUITY AND PROBATE LIST
S ECI 2022 02519
IN THE MATTER of the Will and Estate of Pauline Ann Tyson, deceased
BETWEEN:
| CHLOE ANGEL FAHEY | Plaintiff |
| v | |
| HOWARD BIRD, who is sued as the Executor of the Will of Pauline Ann Tyson, deceased | Defendant |
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JUDGE: | Moore J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 21 July 2023 and 24 August 2023 |
DATE OF JUDGMENT: | 12 September 2023 |
CASE MAY BE CITED AS: | Fahey v Bird (No 2) |
MEDIUM NEUTRAL CITATION: | [2023] VSC 540 |
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CONTEMPT – Where defendant executor failed to comply with court orders and undertaking to produce administration accounts – Where defendant pleaded guilty to contempt – Where contempt is continuing – Contempt criminal in character – Convicted and sentenced to four months’ imprisonment – Sentence wholly suspended on condition that administration accounts prepared within 28 days - Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 75.11 – Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98; Witham v Holloway (1995) 183 CLR 525; Pelechowski v Registrar, Court of Appeal (NSW) (1999) 198 CLR 435; Varnavides v Victorian Civil and Administrative Tribunal (2005) 12 VR 1; Livingspring Pty Ltd v Ng [2007] VSC 9; R v Hinch (No 2) [2013] VSC 554; Construction, Forestry, Mining and Energy Union v Grocon Constructors (Victoria) Pty Ltd (2014) 47 VR 527; Hera Project Pty Ltd v Bisognin (No 2) [2019] VSC 625; R v The Herald & Weekly Times [2021] VSC 253; Prothonotary of the Supreme Court of New South Wales v Whit [2023] NSWSC 264.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr T Mitchell | Devenish Lawyers |
| For the Defendant | In person |
HIS HONOUR:
On 9 May 2023, the defendant pleaded guilty to the following two charges of contempt (the charges):
Charge 1
1.On 9 September 2022, Associate Justice Mukhtar made orders (Orders) in the proceeding that the defendant shall by 22 September 2022 produce to the plaintiff’s solicitor:
(a)a true and just account of the administration of the Estate of Pauline Ann Tyson, deceased (the Deceased); and
(b)a true and just account of the administration of the Chloe Fahey Trust.
2. In breach of the Orders, the defendant did not produce to the plaintiff’s solicitor an account of the administration of the Estate of the Deceased and/or an account of the administration of the Chloe Fahey Trust by 22 September 2022 or at all.
Charge 2
3. On 6 April 2004 and 22 April 2004 (incorrectly referred to as 28 April 2004 in the Affidavit of the Plaintiff affirmed 13 September 2021), the defendant gave an undertaking to the Court that if required by the Court or Registrar, he would make and file or cause to be made and filed in the Court, a true and just account of the administration of the Estate of the Deceased (Undertaking).
4. In breach of the Undertaking, the defendant has failed, neglected and/or refused to honour his said undertaking by failing to make and file or cause to be made and filed a true and just account of the administration of the Estate of the Deceased despite being required by the Registrar to do so.
These reasons for judgment concern the determination of what, if any, penalty is to be imposed on the defendant for his admitted contempts of court.
Background
Pauline Ann Tyson died on 11 December 2003 leaving a will dated 5 December 2003 (the will). By the will, the deceased appointed her son, the defendant, as executor and trustee of her estate. After payment of a number of pecuniary legacies, the deceased gifted half of her residuary estate to the defendant, and the other half to her granddaughter, the plaintiff in the proceeding. At the time of the deceased’s death, the plaintiff was just under two years of age. Pursuant to her will, the deceased provided for the defendant to hold the plaintiff’s share of the residuary of the estate on trust for her to be invested for her benefit (which trust I will refer to as the Chloe Fahey Trust), with her share and interest to be paid to the plaintiff upon her becoming 21 years of age. The plaintiff has recently attained that age.
Probate of the will was granted to the defendant on 30 April 2004. In support of that application, on 6 April 2004 the defendant swore an affidavit in which he deposed as to the deceased’s inventory of assets and liabilities which revealed that the estate had a net value of approximately $427,217, comprised principally of real property in Burwood. After deducting pecuniary legacies in a total amount of $95,000, the value of the residuary estate was approximately $332,217. The value of the plaintiff’s half share of the residuary estate was therefore approximately $166,108.
In his affidavit made on 6 April 2004, the defendant also gave the following undertaking to the Court (the Undertaking):
If I obtain probate I undertake to the Court that I will:
(a)well and truly collect and administer the estate of the deceased according to law;
(b)if required by the Court or by the Registrar, make and file or cause to be made and filed in the Court, a true and just account of the administration of the estate;
(c)if required by the Court, deliver up the grant to the Court.
On six occasions between January and March 2021, the Assistant Registrar of Probates of the Court wrote to the defendant and his former solicitors requesting that he file an administration account of the estate of the deceased. The defendant did not respond to any of these requests and an administration account was not filed.
Commencement of proceeding
On 28 June 2022, the plaintiff commenced this proceeding in which she sought various orders including that the defendant furnish and verify accounts of the estate of the deceased pursuant to r 54.02(2)(b)(i) of the Supreme Court (General Civil Procedure) Rules 2015 (the Rules).
The proceeding was listed for hearing before Mukhtar AsJ on 29 August 2022. The defendant did not appear that day and the hearing proceeded in his absence.
On 9 September 2022, Mukhtar AsJ delivered judgment[1] and made declaratory and ancillary orders terminating the Chloe Fahey Trust and requiring the defendant to produce an account of the administration of the deceased estate and of the administration of the Chloe Fahey Trust for the plaintiff.[2] After referring to the evidence about the plaintiff’s failed attempts to communicate with the defendant about his administration of the deceased’s estate, Mukhtar AsJ concluded as follows:[3]
The above account of the situation demonstrates that the defendant, who has responsibilities as executor and trustee to act in the interests of a beneficiary, and to carry out the instructions of the testator, has simply ignored all requests to explain the carriage of his responsibilities and in particular, has failed to respond to any inquiries concerning his conduct of the administration and financial affairs of the Chloe Fahey Trust. The materials do not enable me to understand why he would so flagrantly ignore requests that he was bound to satisfy, as an executor and trustee, for all information concerning the administration of the trust. Even with the institution of legal proceedings he has simply refused to communicate.
[1]See Fahey v Bird [2022] VSC 533.
[2]The orders are set out in [11] below.
[3]Fahey v Bird [2022] VSC 533, [19].
Associate Justice Mukhtar also referred to the plaintiff’s ‘parlous financial situation’[4] and her ‘tragic personal history and the dire financial predicament that she is in’.[5] These findings were in part based upon the following evidence given by the plaintiff:[6]
I was born to drug dependant parents and have suffered abuse as a child. I have lived most of my life under Child Protection Services and Department of Human Services. I gave birth to a child when I was 13 years old and my son is currently in Foster care. I have only completed two years of secondary education. I have been involved in abusive domestic relationships in the past. I am unemployed and at risk of further homelessness. I have no family support. I am currently living in a shared rental property ….
[4]Ibid [20].
[5]Ibid [28].
[6]Ibid [20].
The declaratory relief and orders made by Mukhtar AsJ on 9 September 2022 were in the following terms (the September orders):
THE COURT DECLARES:
1.The plaintiff Chloe Fahey being of full age and legal capacity, and being absolutely entitled to a vested and indefeasible interest in the Chloe Fahey Trust as sole beneficiary of a one half share of the testator's residuary estate as granted under the Will, is entitled at law to terminate the Chloe Fahey Trust by directing the defendant Howard Bird as trustee to pay her entire beneficial interest under the trust to her presently without having to first attain the age of twenty-one years as stated in clause (9) of the Will, and, in bringing this proceeding the plaintiff is to be taken as making such a direction, to which the defendant is bound to accede. Accordingly, the Chloe Fahey Trust is hereby terminated.
AND THE COURT ORDERS:
2.Pursuant to r 6.03 of the Supreme Court (Administration and Probate) Rules 2001 and r 54.02(b)(i) of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), the defendant shall by 22 September 2022 produce to the plaintiff's solicitor, Ms Kellie English of Devenish Lawyers, Level 1, 23 Ringwood Street, Ringwood Victoria:
(a)a true and just account of the administration of the estate of Pauline Ann Tyson (deceased); and
(b)a true and just account of the administration of the Chloe Fahey Trust.
3.The account required by the orders in paragraphs 2(a) and (b) shall contain full particulars of receipts, disbursements, all assets and liabilities and particulars of the distribution of all assets, and in addition, a statement with all supporting documents of any claim to be made by the defendant as trustee of the Chloe Fahey Trust for recoupment for expenses paid by the defendant, and exoneration for liabilities incurred by the plaintiff but unpaid.
4.Any ancillary order or direction of the Court compelling the transfer to the plaintiff of her beneficial interest in the Chloe Fahey Trust is deferred pending the production of the trust accounts by the defendant under paragraph 2 and 3 of these orders.
5.The plaintiff's application under r 67.02 for an oral examination of the defendant or production by him of documents on the 'material questions' in aid of the satisfaction of these orders, is adjourned pending the performance by the defendant of these orders.
6.The defendant shall pay the plaintiff's costs of this proceeding on the indemnity basis under r 63.30.1 and such costs shall be paid by the defendant personally and not out of the estate of the Chloe Fahey Trust.
7.The plaintiff must serve a copy of this order as soon as is practicable on the defendant by personal delivery in a sealed envelope addressed to him at his place of employment at Defence Bank, Level 10, 31 Queen Street, Melbourne, Victoria by presenting the envelope to him personally, or, to a receptionist or some such person at those premises.
8.The plaintiff has liberty to apply to the Court for any further or ancillary orders in aid of the effectuation or carrying out or enforcement of these orders.
The September orders were indorsed with a penal notice and included the following paragraphs by way of narration:
The Court has seen fit to indorse this order with a penal or enforcement notice because the defendant (the plaintiff’s uncle) who carries legal duties as executor and trustee has not participated in the Court's procedures; has not responded to communications from the plaintiff and her solicitors; and has failed to appear at the trial of this proceeding. There are reasonable grounds to apprehend that the defendant is disregarding his legal responsibilities as executor and trustee, to the detriment of the pressing financial needs of the plaintiff as beneficiary.
A copy of the September orders was served on the defendant on 13 September 2022. The defendant did not comply with them.
On 28 September 2022, the plaintiff’s solicitors sent a letter to the defendant which, in summary, stated as follows:
(a) that the defendant had been served with a copy of the September orders on 13 September 2022;
(b) that the defendant had not complied with the September orders and that they considered him to in contempt of court;
(c) that, unless the defendant purged his contempt by doing the things required of him by the September orders by 4 October 2022, the plaintiff would commence an application to have him punished for contempt of court;
(d) that at the hearing of any contempt charge, the plaintiffs intended to submit that the defendant should be imprisoned and fined because his defiance of the Court’s authority extended over a long period, including in the face of the Undertaking;
(e) that the defendant’s contempt was very serious and calculated to undermine the effective exercise of the Court’s jurisdiction over a deceased estate and trust;
(f) that the defendant was fully aware of the consequences of refusing to comply with the Undertaking and the September orders;
(g) that the defendant committed the contempt to cover up his misappropriation of trust assets;
(h) that the defendant expressed no contrition and had not apologised for his contempt; and
(i) that the defendant’s actions required denunciation and that general deterrence was also required.
The defendant did not respond to the above correspondence.
Summons for contempt
On 14 November 2022, the plaintiff filed a summons for contempt containing the charges. The first return of the summons was 5 December 2022. The defendant appeared in-person that day[7] and the Court informed him about the precise terms of the charges, the seriousness of the proceeding and the potential consequences which could flow from it, including the imposition of fines and imprisonment. The defendant indicated his understanding of these matters; he was encouraged to obtain legal advice and representation. The defendant agreed to a timetable for the filing of affidavits in answer to the charges and the Court ordered that he file and serve any affidavits upon which he intended to rely by 6 February 2023. The summons was adjourned for further directions on 20 February 2023.
[7]The defendant has not been legally represented at any time in the proceeding.
The defendant did not file any affidavits in accordance with the orders made on 5 December 2022 (and has not since filed any affidavits in relation to the summons for contempt).
The defendant did not appear at the return of the hearing of the summons for contempt on 20 February 2023. On that date, the Court ordered that the summons be fixed for hearing on 5 April 2023 and that, pursuant to r 75.08.01 of the Rules, a warrant issue to the Sheriff to arrest the defendant and bring him before the Court.
The defendant was arrested and brought before the Court on 5 April 2023. The defendant was again informed of the charges and he confirmed that he understood them. The defendant sought an adjournment of the hearing to obtain legal advice. The application for an adjournment was not opposed after the Court made a declaration in the following terms to which the defendant consented (the declaration):
The whole of the amount of $131,502.08 (and any interest thereon), held as unclaimed money on behalf of the Estate of Pauline Ann Tyson, last known address 119A Arthurton Road, Northcote Victoria 3070, OTN 534449448864, has vested in, and belongs solely to Chloe Angel Fahey, by operation of the order of the Supreme Court of Victoria dated 9 September 2022 in proceeding S ECI 2022 02519, and should be paid upon request to Chloe Angel Fahey c/- Devenish Lawyers, PO Box 4276 Ringwood 3134.
At the conclusion of the hearing, the defendant was released from arrest and the hearing of the summons adjourned to 9 May 2023.
At the commencement of the hearing of the summons on 9 May 2023, the defendant, who again appeared in person, formally pleaded guilty to the charges.
In the course of the hearing on 9 May 2023, the Court informed the defendant of the importance, for the purposes of assessing penalty for his admitted contempts of court, of the defendant taking action to purge his contempt, including by the filing of an administration account of the deceased’s estate. The defendant told the Court that he would file and serve an account of the deceased’s estate within four weeks. The Court adjourned the proceeding to 21 July 2023 for hearing on penalty.
The defendant did not file an administration account of the deceased’s estate within a period of four weeks, and he has not done so subsequently.
The defendant again appeared in person at the hearing on 21 July 2023. He confirmed his understanding of the seriousness of the charges. The Court granted an application by the defendant for an adjournment which was sought principally to enable him to complete the preparation of an administration account of the deceased’s estate and to obtain legal advice. The hearing on penalty was adjourned to 24 August 2023.
The defendant did not subsequently file an administration account of the deceased’s estate, or any affidavits or submissions in the proceeding.
In the course of the penalty hearing on 24 August 2023, the defendant made two applications for an adjournment, both of which were refused for the reasons delivered ex tempore that day. The hearing on penalty concluded that day. I note that, in the course of the hearing, counsel for the plaintiff informed the Court that the defendant had ‘done everything he needed to do’ in relation to the making of the declaration, and that, about a month after the declaration was made, the plaintiff obtained an amount of approximately $131,500 in unclaimed moneys from the Commonwealth Consolidated Revenue Fund. Counsel for the plaintiff also informed the Court that an additional amount of $7,000 had been paid into the plaintiff’s solicitors’ trust account by the Australian Securities and Investments Commission as interest on the principal sum held in unclaimed moneys.
Legal principles
The Court’s inherent power to punish for contempt is regulated by r 75.11 of the Rules which provides that the Court may punish a natural person for contempt by committal to prison, fine or both. Punishment may also be ordered on terms, including a suspension of punishment.[8]
[8]Supreme Court (General Civil Procedure) Rules 2015 (Vic), r 75.11(4).
Courts have traditionally distinguished between civil and criminal contempt, with civil contempt having a remedial function in coercing compliance with court orders in support of a party’s private interests, and criminal contempt having a punitive and deterrent function to punish offenders for their deliberate defiance of the court’s authority and to protect the public interest in the integrity of the judicial process.[9] However, in Witham v Holloway,[10] which concerned a contempt by breach of court orders, the High Court determined that the bases of the distinction between civil and criminal contempt were ‘in significant respects, illusory’,[11] observing that civil contempt will often carry with it an element of punishment.[12] Notwithstanding those comments, the distinction is nonetheless still observed.
[9]Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483, 499; Witham v Holloway (1995) 183 CLR 525, 530.
[10](1995) 183 CLR 525.
[11]Ibid 534.
[12]Ibid.
The Court of Appeal considered the principles relating to contempt of court in detail in Construction, Forestry, Mining and Energy Union v Grocon Constructors (Victoria) Pty Ltd.[13] The Court stated that, although the circumstances which may give rise to a contempt are many and varied, they have the common characteristic of involving an interference with the due administration of justice, which may include the disobedience of court orders.[14] Although most forms of contempt are regarded as being criminal in nature, breaches of court orders had been characterised differently and were usually described as civil contempts,[15] as the object of such proceedings was often to coerce a recalcitrant party into compliance, not to punish them for breach.[16]
[13](2014) 47 VR 527 (‘Grocon’).
[14]Ibid [129].
[15]Ibid [132].
[16]Ibid [136].
After noting that the modes of potential punishment for civil and criminal contempts were the same as reflected in the terms of order 75 of the Rules, the Court of Appeal emphasised two matters:
First, and importantly, conviction has consistently been held to be available in the case of criminal — but not civil — contempts. That shows a persisting difference in the treatment of civil and criminal contempts constituted by breach of court orders. Second, a finding of criminal contempt is more likely to attract imprisonment and highly likely to result in more severe punishment.
… A conviction has usually followed as a necessary incident of a finding of criminal contempt.[17] Indeed, a finding of guilt of criminal contempt has itself been regarded as the equivalent to a conviction.[18]
[17]See, for example, Deputy Commissioner of Taxation v Gashi [2011] VSC 448 [5].
[18]Izuora v The Queen [1953] AC 327, 334-5; Australian Building Construction and Builders Labourers Federation v David Syme & Co Ltd (1982) 40 ALR 518, 522 (Bowen CJ, Evatt and Deane JJ).
In Hera Project Pty Ltd v Bisognin (No 2),[19] Champion J stated that, although it is generally accepted that disobedience of a court order is civil contempt, it may be a criminal contempt where the contempt is contumacious or a proceeding serves a punitive purpose of punishing a past breach, rather than a remedial purpose of coercing obedience with the order.[20] The latter scenario is not relevant to this proceeding; it is uncontroversial that the summons for contempt was filed for remedial or coercive purposes.
[19][2019] VSC 625 (‘Hera Project (No 2)’).
[20]Ibid [10].
In Hera Project (No 2), Champion J identified that a wilful breach may be contumacious where:[21]
[21]Ibid [11].
(a) the contemnor knows the breach is prohibited and has no reasonable belief that it can be excused;[22]
[22]Ibid, citing In the Marriage of Kitchener (1978) 20 ALR 535.
(b) the breach involves perverse obstinate resistance to authority;[23] or
(c) there is a direct intention to disobey the order.[24]
To similar effect, in R v The Herald & Weekly Times, John Dixon J referred to a contumacious act, as distinct from one which is merely wilful, as involving the ‘deliberate defiance of, or a specific intention to defy, a court order, including, for example, where the person knows that the conduct is prohibited and there is no reasonable belief that it can be excused’.[25]
[23]Ibid, citing Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1985) 9 FCR 194.
[24]Ibid, citing Seymour v Migration Agents Registration Authority (2006) 215 FCR 168.
[25][2021] VSC 253, [220].
These observations underscore the importance of assessing the intention with which an act was done in determining what penalty may be imposed in respect of a contempt, a matter which the Court of Appeal in Grocon identified as being ‘highly relevant’[26] to the question of penalty.
[26]Grocon (n 13) [141].
Although the principles in the Sentencing Act 1991 do not apply in terms to the assessment of a penalty to be imposed upon a contemnor, the Court of Appeal in Varnavides v Victorian Civil and Administrative Tribunal stated that, because of its seriousness, a charge of contempt of court it is to ‘be approached, as far as possible, in a way which is consistent with that adopted when dealing with criminal conduct generally’.[27]
[27](2005) 12 VR 1, 6 [18].
In Pelechowski v Registrar, Court of Appeal (NSW), Kirby J made the following observations about the general principles which apply to the assessment of penalties for contempt:[28]
In approaching this submission, it is essential to remember a number of general propositions which govern punishment for contempts of the kind in question here where the punishment is not limited by statute but is at large. In determining the order which is appropriate to the contempt found, the Court must take into account those general principles which govern the sentencing of persons convicted of criminal offences which are apt to the peculiar character of contempt. The underlying purpose of the law on this form of contempt is to vindicate the due administration of justice. Contempts of the kind illustrated in this case may be technical, wilful but without a specific intent to defy the authority of the Court and contumacious. In the last category a serious act of deliberate defiance of judicial authority is evidenced.
Conceding that such categories of contempt may sometimes overlap, in a case of a technical contempt, where the contemnor has offered an apology which the Court accepts, it will sometimes be sufficient to make a finding of contempt coupled with an order for the payment of costs. Where a wilful contempt is shown, in the sense of deliberate conduct but without specific intent to defy judicial authority, a finding of contempt and an order for the payment of costs may not be sufficient. In such a case, a fine (and sometimes more) may be needed to vindicate the authority of the court. But in a case of contumacious defiance of a court's orders and authority, it will frequently be appropriate for a custodial sentence to be imposed as a response to an apparent challenge to the authority of the law.
Unless courts are seen to respond firmly to deliberate defiance of their orders, their effectiveness in the authoritative determination of disputes of law would be undermined. And if they were not effective, "serious and lasting damage to the fabric of the law may result". Obviously, the culpability of the contemnor is relevant to the order which must be made. The contemnor must then be punished in an emphatic way. He or she must be deterred effectively from any temptation to re-offend. However, the focus of attention is not solely on the contemnor. It is also addressed to the community at large and to any others who might consider acting in a similar manner.
[28](1999) 198 CLR 435, 484-5, [147]-[149] (citations omitted) (‘Pelechowski’).
It is also relevant to note the observations of Kaye J (as his Honour then was) in R v Hinch (No 2):[29]
The fundamental function of punishment, for the contempt which you have committed, is to uphold and preserve the undisturbed and orderly administration of justice in the courts according to law. The principal purposes of sentences for contempt, which are designed to achieve that end, include specific deterrence, general deterrence and denunciation. Bearing in mind those purposes, the considerations, which are relevant to the imposition of a sentence for contempt, include the objective seriousness of the particular contempt, the context in which the contempt occurred, whether any harm was occasioned by the contempt, the subjective culpability of the person convicted of the contempt, the character and antecedents of the contemnor, and whether any apology has been made by the contemnor for the contempt.
[29][2013] VSC 554, [12] (citations omitted).
Consistent with sentencing principles generally, a sentence of imprisonment for contempt is a penalty of last resort[30] and is rarely appropriate in the case of civil contempt.[31] However, it has also been stated that, in circumstances of an interference with the administration of justice, imprisonment is almost always the appropriate punishment.[32]
[30]See Zhang & Ors v Shi & Ors (No 6) (2022) 67 VR 469, 476, [28] and the authorities there cited.
[31]Hera Project Pty Ltd v Bisognin [2019] VSC 483, [80]; Victorian Legal Services Board v Thexton [2021] VSC 391, [6].
[32]R v Garde-Wilson [2005] VSC 452, [10] (Harper J).
In applying the above principles, the authorities establish that the considerations relevant to determining an appropriate penalty include the following:[33]
[33]See, for example, Hera Project v Bisognin (No 2) (n 19), [30] and R v Witt (No 2) [2016] VSC 142, [93] and the authorities there cited.
(a) the nature and circumstances of the contempt;
(b) the actual consequences of the contempt;
(c) the effect of the contempt on the administration of justice;
(d) the contemnor’s personal circumstances, antecedents and financial means;
(e) the contemnor’s culpability;
(f) the contemnor’s reasons for his or her conduct;
(g) the need to deter the contemnor and others from repeating the contempt; and
(h) whether the contemnor has exhibited general contrition and made a full and ample apology.
Significance of defendant’s status as executor
The significance of the role of executors in the context of contempt of Court was recently examined in detail by Kunc J in Prothonotary of the Supreme Court of New South Wales v Whit.[34] The background to the case was as follows.
[34][2023] NSWSC 264 (‘Whit’).
In 2017, Mr Whit was granted probate of the will of Ronald Whit. In 2018, a proceeding was commenced seeking that the grant be revoked and that Mr Whit file verified accounts. Mr Whit did not appear when the proceeding was listed in February and August 2020. At the hearing on 17 August 2020, Mr Whit was ordered to file and serve an affidavit setting out the assets of the deceased’s estate, the monies received by him and paid out by him as executor of the estate and his reasons for failing to distribute the estate. Mr Whit did not comply with this order and he did not appear on the date when the proceeding was next listed in October 2020. A bench warrant for his arrest was then issued and Mr Whit was arrested and brought before Court in December 2021. The Prothonotary of the Supreme Court of New South Wales then applied to punish Mr Whit for contempt. On 15 December 2021, the Court made orders including that:
1On or before 2 March 2022, [Mr Whit] file and serve either:
(a)an affidavit addressing the matters set out in the Order 6 of the Court’s orders dated 17 August 2020 … ; or
(b) an affidavit explaining non-compliance with Order 1(a) above.
2Order that [Mr Whit], on or before 2 March 2022, produce to the Court and the plaintiff the following documents or things that are in his possession or control:
(a) all bank passbooks, bank statements, cheque books, cheque butts and other documents from all bank account(s) held by the Defendant for the period 1 June 2017 to date;
(b) all bank passbooks, bank statements, cheque books, cheque butts and other documents from all bank account(s) held in the name of or for the benefit of the Estate of the Late Ronald Whit, for the period 1 June 2017 to date; or
(c)provide an affidavit explaining non-compliance with order 2(a) and (b) above.
Mr Whit did not comply with these orders.
On 21 March 2022, the Court made orders which recorded that Mr Whit had indicated that, by 4 April 2022, he would comply with the orders made on 15 December 2021. Mr Whit did not comply with those orders.
On 13 December 2022, Mr Whit, who was legally represented, pleaded guilty to the following charges of contempt:
1. Mr Ronald Whit has committed a contempt of court in that:
…
(h) He failed to comply with an order made by Rein J on 15 December 2021 (Order 1) that, on or before 2 March 2022, he file and serve either:
(a) an affidavit addressing the matters set out in the Order 6 of the Court’s orders dated 17 August 2020; or
(b) an affidavit explaining non-compliance with order 1(a) above.
(i) He failed to comply with an order made by Rein J on 15 December 2021 (Order 2) that, on or before 2 March 2022, he produce to the Court and the plaintiff the following documents or things that are in his possession or control:
(a)all bank passbooks, bank statements, cheque books, cheque butts and other documents from all bank account(s) held by the Defendant for the period 1 June 2017 to date.
(b) All bank passbooks, bank statements, cheque books, cheque butts and other documents from all bank account(s) held in the name of or for the benefit of the Estate, for the period 1 June 2017 to date;
(c) Provide an affidavit explaining non-compliance with order 2(a) and (b) above.
Justice Kunc sentenced Mr Whit to a term of imprisonment for one year, which sentence was suspended if he complied with the orders which gave rise to the proceeding for contempt.
In imposing this penalty, Kunc J made a number of important observations with which I respectfully agree and which are important in the exercise of the sentencing discretion in the context of a contempt of court committed by an executor of a deceased estate.
(a) The fact that the contemnor’s conduct was ‘integrally connected to his role as an executor’ was a ‘significant feature’ in his Honour’s approach to the assessment of penalty.[35] His Honour stated that: [36]
[35]Ibid [2].
[36]Ibid.
In addition to the need both to punish Mr Whit and compel his compliance with the orders of which he was in contempt, his sentence may serve as a salutary reminder of the importance the Court attaches to the proper discharge of an executor’s duties and to deter departure from the high standard of conduct which is expected of executors both under the general law and statute.
(b) Justice Kunc undertook the sentencing task having determined that the contemnor’s conduct constituted a criminal contempt which involved a serious or contumacious disregard of orders of the Court.[37] That seriousness was established by two matters: the ‘Executor Issue’ and the ‘Circumstances’.[38] As to the former, his Honour reasoned as follows:[39]
[37]Ibid [95].
[38]Ibid [67], [95].
[39]Ibid [68] – [70], [72].
The Executor Issue is the recognition by the Court that Mr Whit was not just an ordinary civil litigant before the Court. He was an executor being sued in (at least) his capacity as such.
The consequence is that the conduct which Mr Whit has acknowledged was contemptuous is not just to be assessed as a breach of the obligation to which he was undoubtedly subject under s 56(3) of the Civil Procedure Act 2005 (NSW) that “a party to civil proceedings is under a duty to assist the Court to further the overriding purpose and, to that effect, to participate in the processes of the Court and to comply with directions and orders of the Court” (emphasis added). That conduct was also to be measured against the common law (including equity) and statutory obligations of an executor, including to the Court.
Mr Whit sought to be appointed executor of the deceased’s estate. To be an executor is to hold an office (which in this context is a term of legal significance) which, although it might have its origin in a private instrument being a will, is given legal effect by an order of the Court and thereby is not just of a private character. It is a fiduciary position: both morally and legally a position of trust. It is not just a private function, but is a publicly recognised office which also fulfills a public interest to ensure the due administration of estates according to law. Not just those immediately concerned with the proper administration of an estate, but the members of the community generally, are entitled to expect that executors will discharge that office properly. Similarly, the community looks to the Court to ensure that is done and that a failure to meet the required standards of conduct is, where appropriate, penalised and thereby deterred.
…
In making these observations, I do not lose sight of the fact that Mr Whit has pleaded guilty to the particular contempts as charged, being contempt of orders of this Court, as opposed to having been found guilty of breaching his duties as an executor. Nevertheless, his contemptuous conduct occurred in the context of him being an executor and defendant in proceedings affecting the estate committed to his administration. Furthermore, it is, in my respectful opinion, relevant that the Orders were not difficult or complex. The estate that is the subject of these proceedings is not large. If Mr Whit has complied with his duties as an executor, for example, to keep proper records and accounts, it is difficult to see what impediment there may have been to Mr Whit promptly complying with the Orders.
As to the ‘Circumstances’, Kunc J identified eight salient factual features of the case which he said demonstrated the objective seriousness of Mr Whit’s conduct and that it was ‘difficult to imagine circumstances in which a person in Mr Whit’s position could have been more on notice than he was of the seriousness of his situation, what he had to do and what might occur if he failed to do so’.[40] As is evident from the background to the case set out above, some of the ‘Circumstances’ are similar to the facts of this matter and included the following:[41]
[40]Ibid [74].
[41]Ibid [73].
(a) Mr Whit was aware of the seriousness of what was happening in the proceeding.
(b) The seriousness of the proceeding and its potential consequences were clearly explained to Mr Whit.
(c) Mr Whit gave personal assurances to a Justice of the Court that he would comply with the orders the subject of the contempt charge, but he failed to do so at all.
(d) At the time of sentencing, there had been a period of 12 months’ non-compliance with the orders the subject of the contempt charge. As with the defendant in this proceeding, Mr Whit had not purged his contempt.
Additionally, as with the defendant in this proceeding, Mr Whit was arrested and brought before the Court and he pleaded guilty to the charges of contempt.
Criminal or civil contempt?
The defendant’s failure to comply with the Undertaking and the September orders can only be viewed as wilful acts. He did not respond to any of the six requests made by the Assistant Registrar of Probates between January and March 2021 that he file an administration account of the deceased’s estate consistent with the Undertaking he gave to the Court in 2004. He did not appear at the hearing before Mukhtar AsJ on 29 August 2022 when the plaintiff sought and obtained orders that he furnish and verify accounts of the deceased’s estate. He then did not comply with the September orders, which were indorsed with a penal notice, and ignored the correspondence from the plaintiff’s solicitors demanding his compliance and foreshadowing the commencement of this proceeding. His breach of the Undertaking and the September orders has since continued unabated.
I am satisfied beyond reasonable doubt that these wilful breaches by the defendant are contumacious so as to render his contempts of court criminal in character.[42] As is apparent from the matters referred to in the previous paragraph and from the defendant’s appearances in Court since the summons for contempt was filed, there is no doubt that he is fully aware that the breaches of the Undertaking and the September orders are prohibited, and that he has no reasonable belief that his conduct can be excused. Save for the defendant’s vague assertion to which I refer in the following paragraph, he has not advanced any excuse for his failure to comply with the Undertaking and the September orders.
[42]As stated by Cavanough J in Livingspring Pty Ltd v Ng [2007] VSC 9 at [77], the requirement for proof beyond reasonable doubt extends to aggravating features relevant to penalty, including whether the conduct was contumacious.
The defendant’s conduct can also fairly be said to involve a perverse obstinate resistance to the authority of the Court. Since the first return of the summons for contempt on 5 December 2022, the defendant has sought, and has been granted, various opportunities to purge his contempts, as well as to file material in the proceeding. Yet he has done neither. Further, he failed to appear on 20 February 2023 and proffered no explanation for his continuing failures. On 9 May 2023, and then on 21 July 2023, he told the Court that he would file an account of the deceased’s estate. He has not done so. The defendant’s explanation was limited to the following: ‘I don't understand the pathology personally, why I haven't been able to confront and move forward with …what I've said I needed to do’.
The defendant’s conduct is a serious and deliberate defiance of judicial authority and is therefore properly viewed as being contumacious. Given the character of the contempts committed by the defendant and the matters considered below, it is clearly appropriate for a penalty to be imposed.
Consideration
In determining the appropriate penalty to be imposed on the defendant for his admitted contempts of court, it is necessary to first acknowledge that his conduct in respect of the two charges is substantially, but not wholly, overlapping. The conduct which relates to the second charge (the failure to comply with the Undertaking) commenced from about March 2021 after the defendant failed to respond to the requests by the Assistant Registrar of Probates to provide an account, whereas the conduct in relation to the first charge (the failure to comply with the September orders), commenced from 22 September 2022. Nevertheless, the admitted conduct in relation to each of the charges is, in substance, a single course of conduct by the defendant. It is appropriate to assess penalty on that basis, rather than separately in relation to each of the charges.
In addition to the contumacious character of the defendant’s conduct to which I have referred above, there are five matters which I consider are of particular significance in determining the appropriate penalty in the circumstances of this case.
First, it is a matter of profound concern that, despite extensive opportunity to do so, the defendant has not purged his contempt. Not only has he not remedied the effect of his conduct in defying the authority of the Court, his conduct, which damages the integrity of the judicial process, is continuing. The need for specific deterrence is therefore clearly engaged and is a matter to be given substantial weight in determining an appropriate penalty.
Secondly and relatedly, the defendant’s ongoing contemptuous conduct is long standing, having commenced in March 2021, a period of some two and a half years.
Thirdly, as explained by Kunc J in Whit, the defendant is not just an ordinary civil litigant, but an executor sued in his capacity as such. In occupying the office of executor, it has been the defendant’s responsibility to discharge the public interest in ensuring the due administration of estates according to law. His admitted contempts have had a significant adverse effect on the administration of justice because those interested in the affairs of a particular deceased estate, and the community generally, are entitled to expect that executors will properly discharge the duties of that office which, in addition to complying with court orders, includes producing accounts of their administration when properly required to do so. The need to ensure general deterrence therefore also looms large in determining an appropriate sentence. As observed by Kunc J, the sentence which is imposed should:[43]
… serve as a salutary reminder of the importance the Court attaches to the proper discharge of an executor’s duties and to deter departure from the high standard of conduct which is expected of executors both under the general law and statute.
[43]Whit (n 34) [2].
Fourthly, there are two aggravating factors which bear on the assessment of penalty and which underscore the defendant’s culpability.
(a) At the first directions hearing on 5 December 2022, the defendant was informed that the Court was proposing to adjourn the proceeding to 20 February 2023. The defendant, who was invited to express his position in relation to that proposal, said that he had no objection and that the course proposed was ‘fine’. Having agreed to that proposal advanced by the Court, it is of significant concern that the defendant, without explanation, then failed to appear on the adjourned date. As a consequence, it was necessary for a bench warrant to issue and for the defendant to be arrested and brought before the Court. Not only did this result in further unnecessary delay and cost, it demonstrates a continuing contemptuous attitude by the defendant to the authority of the Court.
(b) As I have set out earlier in these reasons, the Court has afforded the defendant a number of indulgences by way of adjournments to enable him to obtain legal representation, file affidavits and to prepare an accounts of the deceased’s estate. He has done none of those things. By seeking and obtaining these various accommodations, and then failing to utilise them in any way, in circumstances where the seriousness of the proceeding had been made clear to him, the defendant has demonstrated a continuing disregard of the authority of the Court.
Fifthly, a matter which emerges from the course of this proceeding is the scarcity of mitigating factors for the Court to take into account in the defendant’s favour in the exercise of the sentencing discretion. The only factor which is unambiguously present and which I take into account by way of mitigation is the fact of the defendant’s guilty plea. Beyond that, there is little else of any weight.
I do not give any weight to the fact that the defendant consented to the making of the declaration and cooperated in facilitating the payment of moneys to the plaintiff from unclaimed moneys. Although these actions may be taken to have afforded an immediate benefit to the plaintiff, it would be unjust to take them into account in mitigation of penalty because to do so would be to wrongly reward the defendant for his delinquency. The plaintiff was unambiguously entitled to her share of the residuary estate when Mukhtar AsJ terminated the Chloe Fahey Trust with the making of the September orders. Instead of ensuring that the plaintiff then immediately received her entitlement, the defendant did nothing, leaving the plaintiff to wait some seven months before he consented to the declaration which, it is to be noted, only facilitated payment of part of her entitlement.[44] This was in circumstances where the plaintiff has been effectively destitute and living in dire circumstances for many years, matters which the defendant must be taken to have known from Mukthar AsJ’s reasons for judgment and from the material filed in this proceeding; she was in urgent need of funds. The defendant’s consent to the declaration was proffered belatedly and to protect his own interests by securing an adjournment of the hearing of the summons for contempt.
[44]As I have noted, the value of the plaintiff’s one half share of the residuary estate was approximately $166,108. The declaration facilitated payment to her of $131,500 plus interest of $7,000.
There is then the question of whether the defendant has exhibited contrition and apologised for his contemptuous conduct. Although at different times before the Court the defendant has made some general remarks which could be viewed as an apology and expression of regret, his statements could not be described as a full and ample apology and expression of contrition. Moreover, my impression was that the statements made by the defendant were principally a plea to avoid being committed to prison, rather than a genuine expression of remorse about his conduct in defying the authority of the Court. My scepticism about the statements made by the defendant is underlined by the fact that he has not purged his contempt and has not provided a cogent and comprehensive explanation for his conduct. I therefore give limited weight to the general apologies and statements of regret expressed by the defendant from the Bar table.
There is no evidence before me of the defendant’s antecedents.
Save that there is evidence that the defendant is married, has a child and works for a bank, matters which I take into account in exercising the sentencing discretion, the defendant did not adduce any evidence of other aspects of his personal circumstances or his financial means.
There was in evidence a statement from the plaintiff that she did not want the defendant to be committed to prison because she did not want his wife and child to suffer, and because she considered that a sentence of imprisonment would hinder the defendant’s ability to pay her what she considers is owing to her. I take this view into account because the plaintiff is the person whose private interests have been adversely affected by the contempts of court committed by the defendant and because she has brought the summons for contempt in the proceeding in which she is the plaintiff. However, these views can in no way be determinative or given particular weight. My task is not to determine an appropriate remedy for the vindication of private rights, but to determine the appropriate sanction to be imposed for the defendant’s conduct in interfering with the due administration of justice by disobeying the Undertaking and the September orders.
Given the objectively serious nature of the contempts committed by the defendant which I have found to be criminal in nature, in order to formally denounce the defendant’s conduct and to vindicate the Court’s authority, it is appropriate that convictions be recorded in respect of both charges.
In Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd, the High Court observed that:[45]
Contempt of court is a distinctive offence attracting remedies which are sui generis:… . It is required of the chosen remedy that it be effective, no more but no less. For, if it is not effective, serious and lasting damage to the fabric of the law may result.
[45](1986) 161 CLR 98, 115 (citations omitted).
While mindful that a sentence of imprisonment is a penalty of last resort, because the contempts committed by the defendant are contumacious, continuing and characterised by the aggravating features to which I have referred, I consider that imprisonment is the remedy which, in the circumstances of the case, will be effective in upholding and preserving the orderly administration of justice. As stated by Kirby J in Pelechowski:[46]
Unless courts are seen to respond firmly to deliberate defiance of their orders, their effectiveness in the authoritative determination of disputes of law would be undermined. And if they were not effective, "serious and lasting damage to the fabric of the law may result".
I have no confidence that a non-custodial sentence will be effective in ensuring that the defendant submits to the authority of the Court and complies with the Undertakings and the September orders.
[46]Pelechowski (n 28), 484-5, [147]-[149] (citations omitted).
Putting aside the mitigating considerations to which I have referred, having regard to the considerations outlined above, I consider that a sentence of six months imprisonment would be an appropriate penalty to denounce the defendant’s conduct and to give effect to the principles of specific and general deterrence. The defendant’s guilty plea is, however, a matter which should be given substantial weight in mitigation as it has obviated the need for the plaintiff to prove the charges and carries with it an acceptance of wrongdoing by the defendant, notwithstanding that he has not purged his contempt. Taking that matter into account, together with the other limited considerations in mitigation, it is appropriate that the defendant be sentenced to serve a period of imprisonment of four months.
However, in light of the indication given by the defendant to the Court during the hearing on penalty that he seeks to consult with a solicitor for the purposes of preparing an account of the deceased’s estate and that he had made arrangements to that end, which indication I am prepared to accept, I will suspend this sentence for a period of 28 days to allow a final opportunity for the defendant to comply with the Undertaking and the September orders.
The plaintiff sought an order that the defendant pay her costs, including reserved costs, on an indemnity basis. Such an order is common in contempt proceedings as it is usually appropriate to fully indemnify a party who has obtained a court order which has been breached in a way which amounts to contempt.[47] Subject to considering any submissions the defendant may wish to make and the terms of the order sought by the plaintiff, my preliminary view is that it is appropriate to award costs on an indemnity basis having regard in particular to the fact that the defendant has admitted to acting in contempt of court which he has not purged, and because the various interlocutory hearings in the proceeding and their associated costs have reflected the approach adopted by the defendant to the proceeding.
[47]Hera Project (No 2) (n 19) [61], citing Deputy Commission of Taxation v Gashi (No 3) [2011] VSC 448 [20] and Fortune Holding Group Pty Ltd v Zhang (No 3) [2018] VSC 22.
The Court makes the following orders:
1. Howard Bird is convicted of contempt of court in that:
(a)in breach of orders made in this proceeding on 9 September 2022 by Associate Justice Mukhtar, he did not produce to the plaintiff’s solicitor an account of the administration of the Estate of Pauline Ann Tyson, deceased and/or an account of the administration of the Chloe Fahey Trust by 22 September 2022 or at all; and
(b)in breach of undertakings he gave to the Court on 6 April 2004 and 22 April 2004, he has failed, neglected and/or refused to make and file, or cause to be made and filed, a true and just account of the administration of the Estate of Pauline Ann Tyson, deceased, despite being required by the Registrar of Probates to do so,
and is sentenced to four months’ imprisonment.
2.The term of imprisonment imposed by paragraph (1) of this Order is wholly suspended on the condition that, by 4.00pm on 18 October 2023, Howard Bird provide to the Registrar of Probates and the solicitors for the plaintiff, Devenish Lawyers:
(a)a true and just account of the administration of the estate of Pauline Ann Tyson, deceased; and
(b) a true and just account of the administration of the Chloe Fahey Trust.
3. The accounts referred to in paragraph (2) of this order be:
(a)prepared in accordance with Form 3-6AA of the Supreme Court (Administration and Probate Rules) 2014 and exhibited to an affidavit of verification filed via RedCrest-Probate on the original probate application (S PRB 2004 04890); and
(b)provided to Devenish Lawyers by way of email to Kellie English at [email protected], or otherwise by way of hand delivery to the offices of Devenish Lawyers at Level 1, 23 Ringwood Street, Ringwood VIC 3134.
4. Liberty to apply.
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