FRANKLYN & FRANKLYN
[2019] FCCA 431
•1 March 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| FRANKLYN & FRANKLYN | [2019] FCCA 431 |
| Catchwords: FAMILY LAW – Application-Contempt – charges not made out – application dismissed. |
| Cases cited: Oakley & Millar [2019] FamCAFC 12 Kendling & Anor & Kendling (Contempt) [2008] FamCAFC 154 |
| Applicant: | MS FRANKLYN |
| Respondent: | MR FRANKLYN |
| File Number: | DUC 63 of 2018 |
| Judgment of: | Judge Obradovic |
| Hearing date: | 13 August 2018 |
| Date of Last Submission: | 19 September 2018 |
| Delivered at: | Parramatta |
| Delivered on: | 1 March 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr Gardiner |
| Solicitors for the Applicant: | Kenny Spring Solicitors |
| Counsel for the Respondent: | Ms Dalton |
| Solicitors for the Respondent: | Lee Dalton & Associates |
ORDERS
The Application-Contempt filed 3 July 2018 is dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Franklyn & Franklyn is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
DUC 63 of 2018
| MS FRANKLYN |
Applicant
And
| MR FRANKLYN |
Respondent
REASONS FOR JUDGMENT
On 13 August 2018, the Court heard the Application – Contempt filed by the wife on 3 July 2018.
The wife relied on her affidavit filed in support on 3 July 2018, as well as the affidavit of Mr A in support of the application.
The husband, the respondent in the Application – Contempt, notwithstanding his right of silence, filed an affidavit on 25 July 2018, which was read in the proceedings.
Both parties were cross-examined, as was Mr A, licensed stock and station agent.
The husband plead not guilty to the following charges:
a)Charge 1:
That on 24 May 2018 in breach of Order 3(a) made on 10 May 2018, the husband failed to do all such things and sign all such documents as required by the accountant of the partnership, Accountants.
b)Charge 2:
That on 24 May 2018 in breach of Order 4 made on 10 May 2018, the husband failed to provide documents evidencing or tending to show:
i)The sales of all plant, machinery, livestock, grain or wool of the partnership or in his own name in the period from 1 October 2017 to 10 May 2018; and
ii)The current inventory of all plant, machinery, livestock, grain or wool of the partnership or in his own name in the period from 1 October 2017 to 10 May 2018.
c)Charge 3:
That on 10 May 2018 in breach of Order 6 made on 10 May 2018 the husband failed to pay into the joint partnership bank account any monies received prior to and since 10 May 2018 in respect of the sale of any stock, wool, grain, hay or assets of the partnership.
d)Charge 4:
That on 17 May 2018 in breach of Order 7 made on 10 May 2018 the husband failed to disclose to the wife the location of all livestock, grain, plant and equipment, wool or any other property which has been removed from the real property owned by the parties or each of them in the period from 1 November 2017 to 10 May 2018.
e)Charge 5:
That on 14 June 2018 in breach of Order 9 made on 10 May 2018 the husband failed to provide financial documents as set out in same.
f)Charge 6:
That on 15 May 2018 in breach of Order 31 made on 10 May 2018 the husband failed to sign the NGR transfer form to cause the grain to be registered to the partnership’s NGR number … within the required 5 days and has sold the grain prior to having signed such forms.
The parties were directed to file written submissions as follows:
a)The applicant by 3 September 2018;
b)The respondent by 24 September 2018; and
c)The applicant in reply by 2 October 2018.
Only the applicant filed written submissions, albeit not in accordance with the orders. The submissions were filed on 20 September 2018.[1] The respondent therefore makes no submission to the Court.
[1] Electronically at 4.31pm on 19 September 2018, which is after the close of the Registry operating hours
In Oakley & Millar[2] the Full Court recently held as follows:
[2] [2019] FamCAFC 12 at [30]
The principles applicable to deciding an application alleging contempt were aptly summarised by Aldridge J in Ganem & Ganem (No.2) [2013] FamCA 257 as follows:
10. Contempt pursuant to section 112AP is a criminal proceeding and accordingly each element of each charge must be proven beyond reasonable doubt. (In the Marriage of Tate (2002) 29 Fam LR 195;(2002) FLC 93-107)
11. Contempt under section 112AP has four elements each of which must be proven beyond a reasonable doubt. The first three involve the acts and intentions of the respondent. The fourth is a finding to be made by the trial judge. These four elements are:
· The respondent knew the terms of the orders. (Mead and Mead (2006) FLC 93-267 at 80, 536)
· The respondent deliberately did an act. The act must be wilful and deliberate as opposed to accidental or inadvertent. (In the Marriage of English (1986) FLC 91-729 at 75, 294)
· The act must be intentional. This is not to say that the respondent must intend that the act was in breach of the order, which would make the respondent’s actions contumacious, but the respondent must have intend [sic] to do the act which is alleged to be the contempt. In the Marriage of English, above.
· The act must involve a flagrant challenge to the authority of the court. …
What a “flagrant challenge” to the authority of the Court is, has also been considered by numerous authorities. For example in Kendling and Anor & Kendling (Contempt)[3] the Full Court held as follows:
[188] In Rutherford v Marshal of the Family Court of Australia (1999) FLC 92–866; 25 Fam LR 383, the Full Court noted Counsel for the husband’s submission that “a deliberate intention to break the Court’s order is a necessary component of such a challenge” [original emphasis] as it was contended that “[w]ithout such an intention… there can be no ‘challenge’ because there must be an object of the challenge to which it is specifically directed, in this case the Court.” The Full Court rejected Counsel for the husband’s submission as follows:
We do not accept that submission. An alternative definition of “challenge” found in the Macquarie Dictionary is “a calling to account or into question”. For a breach to come within the section it must be “a flagrant challenge to the authority of the Court” (emphasis added). It does not need to be a challenge directed to the Court, in the sense proposed by Mr Broun. Any act which may properly be described as “flagrant” (which only means “glaring, notorious or scandalous”) and which calls into question the authority of the Court, expressed through its relevant order, may constitute a contempt, within the meaning of the section.
[189] This statement of principle is in line with Hay (1998) FLC 92-819; (1998) 23 Fam LR 247, where the Full Court held that the introduction of the concept of “a flagrant challenge to the authority of the court” in s.112AP did not change the previously existing law, as stated in the following passage from English (1986) FLC 91-729 (at 75-294):
In our opinion the line of authorities, aside from the cases of Stirling and Kitchener, demonstrate that in proceedings for civil contempt it must be established that the respondent knew of the undertaking or order and that his act or omission in breach of that order or undertaking was a wilful, that is, a deliberate act by him as distinct from accidental or inadvertent. It is not necessary in addition to establish that the conduct was contumacious; that is, it is unnecessary to show that the act or omission was done with a deliberate intention to break or disregard the undertaking or order.
[3] [2008] FamCAFC 154
…
[193] The fact that the breaches of the Court’s orders in this case do not represent the most extreme or flagrant challenges to the authority of the Court is not the test. What was required was that the trial Judge be satisfied that these breaches were exceptional or striking…
…
[195] It is to be remembered that s 112AP concerns challenges to the authority of the Court. The fact that such challenges may have significant or enduring adverse consequences for the other party to the matrimonial cause may well be part of the circumstances enlivening the provisions of s 112AP, but in our view their absence does not preclude the section being successfully enlivened in a case where the findings of fact were as they were in this case.
The substantive proceedings were commenced by way of Initiating Application filed on 16 February 2018. It was an application for parenting orders filed by the father/husband. The matter was first before the Court on 5 March 2018, when a number of procedural orders were made.
On 21 March 2018, the mother/wife filed her Response, seeking not only parenting orders but also joining property proceedings. Interim orders were sought not only with respect to disclosure of financial documents and matters, but also an injunction to prevent the husband from disposing of the assets of the parties’ partnership or the stock, wool, hay or grain of the partnership or grazing upon or harvested from the real property owned by or leased by the husband, as well as to pay the wife proceeds of sale of stock, wool, hay or grain sold from 17 October 2017 to date.
On 8 May 2018, the Court dealt with the parenting proceedings by consent. Both parties were present in Court and legally represented.
On 10 May 2018, orders as to financial matters were made by consent by the Court. Those orders are the subject of these contempt proceedings. The orders were lengthy and detailed, going into 31 paragraphs. Both parties were present in Court and legally represented.
An issue in the property proceedings, from the very beginning, was an alleged lack of full and frank disclosure of financial matters by the husband as well as dissipation of assets by the husband.
Given the evidence which the wife filed in support of the interim orders she sought, and the orders which were ultimately made by consent on 10 May 2018, the husband must have been fully aware of the wife’s allegations and concerns, as noted in the paragraph above.
A useful chronology, which the Court adopts for the purposes of this judgment, was set out in the written submissions filed by the wife in support of the contempt application as follows:
Date
Event
… 1967
Husband’s date of birth
… 1971
Wife’s date of birth
… 2008
Wife’s son, [X], to her deceased prior husband is born
… 2013
Parties meet
… 2013
Parties commence cohabitation at “Town B” property owned by the husband
… 2014
Date of marriage
2015
Wife’s brothers renovate matrimonial home
2015
Partnership Mr Franklyn and Ms Franklyn is established
… 2015
[Y] is born
2015
Parties lease neighbouring properties
2015
Wife receives inheritance of $260,000
2015
Parties jointly purchase adjoining property “Property C”
… 2016
Wife sells Property D property in her name for $850,000 and cleared $408,000
26 July 2016
Wife deposits $376,000 from sale proceeds into joint Rural Bank account
May 2017
Wife purchases commercial property at Property E
30 October 2017
Parties separate. At that time 560 bales of hay are stored on the property and 1500 head of sheep are on the property together with wool and stored grain
November 2017
Husband commences operating his own bank account and farming using joint assets under his sole trader ABN
14 November2017
Wife’s solicitor requests Husband’s solicitor to provide undertaking regarding dealing with partnership assets and property
20 November 2017
Husband’s solicitor provides undertaking
2 March 2018
Wife’s solicitor requests financial disclosure
15 March 2018
Wife’s solicitor requests response to letter of 2 March 2018 requesting financial disclosure
10 May 2018
Property and injunctive orders made by consent
6 June 2018
Wife’s solicitor writes to the Husband’s solicitor requesting compliance with Orders
6 June 2018
Husband’s solicitor writes letter to Wife’s solicitor re sale of grain. Letter has incorrect email address and is not received
6 June 2018
Husband obtains secured $70,000 overdraft facility in his own name
15 June 2018
Husband’s solicitor request copy of Orders
15 June 2018
Orders served on Husband’s solicitors by Wife’s solicitors and non-compliance by Husband with Orders is alleged
26 June 2018
Wife’s solicitors write to Husband’s solicitors requesting compliance with the Court orders
27 June 2018
Husband’s solicitor take steps to comply with Order 31
29 June2018
Husband’s solicitor discloses sale of wheat by Husband
2 July 2018
Wife files s112AP Application and Affidavit
17 July 2018
Husband provides partial disclosure and that there are 8000 sheep
24 July 2018
Husband provides some financial disclosure of machinery and that there are “approximately 877 ewes and 90 lambs” and 25 bales of hay which the Wife says is a deliberately false statement
27 July 2018
Partnership accountant sends letter to parties
31 July 2018
Husband files affidavit re.s.112AP Application
3 August 2018
Mr A, Valuer attends the properties owned and leased by the parties and locates 1640 sheep on the properties, 130 round bales of hay
6 August 2018
Husband sells stock contrary to the Orders using the PIC number attached to the real property of the parties
In respect of each and every charge, the husband agreed in cross-examination that he had the benefit of being represented by a lawyer throughout the period 8-10 May 2018, while the proceedings (both parenting and property) were before the Court. He said that although he was “tired and confused” he “did understand” the orders made on 10 May 2018.[4]
[4] T34:25 and T36:9
Charge 1
That on 24 May 2018 in breach of Order 3(a) made on 10 May 2018, the husband failed to do all such things and sign all such documents as required by the accountant of the partnership, Accountants.
The husband, in his affidavit filed 31 July 2018 swore that he had “provided all the relevant information to accountants in Town F to comply with order 3A made on 10 May 2018”.
The wife’s affidavit does not particularise in her evidence in support of the contempt application, what it is that the husband has not done which was required or necessary so as to cause the accountants to undertake an account of profits, prepare partnership accounts to 10 May 2018 and on a quarterly basis thereafter, update the … farm management system or continue the bookkeeping and accounting services as may be required on behalf of the partnership.
There is no sworn evidence from the accountants at all, least of all suggesting that the matters which they were to attend to have not been attended to due to the husband failing to “do all such things and sigh all such documents” so as to cause the accountants to do such things as they were required to do.
A letter dated 25 July 2018, from Accountants, tendered in the proceedings states that the accountants “need further information” from the husband to complete the business activity statement for the period ending 30 June 2018.
While on a fairly broad reading of the orders one might infer that “within 14 days” might somehow mean “within 14 days of it being required to be done” or “within 14 days of a request being received” rather than “within 14 days of the orders being made”, there is no evidence of any request from the accountants for information or documents from the husband which had not been provided within 14 days.
There is a reference in the letter dated 25 July 2018 to an appointment between the husband and the accountants which had been made. In cross-examination, the husband said he attended that appointment and then had a further appointment.
On the evidence[5] it appears that the only matter “outstanding” as at 25 July 2018 was the Business Activity Statement (“BAS”) for the period ending 30 June 2018. In this regard, firstly, there is no evidence as to when the BAS was due[6], or that it was not completed in time by the accountants due to a failure by the respondent to provide instructions “within 14 days” (whether within 14 days of the orders or of any request being made).
[5] Hearsay as it is
[6] It is the Court’s understanding that a BAS which is for the quarterly period ending 30 June in any given year is due to be lodged with the Australian Taxation Office by 28 July of that year. The Court takes judicial notice of this matter. But also see also for example
There was no explanation in the applicant’s case nor submissions made as to why this matter of the BAS was within the ambit of order 3A. Presumably, it fell within the fourth limb, that is causing the accountants to “continue the bookkeeping and accounting services as may be required on behalf of the partnership.”
It was not explained how a failure by the husband to do something (which is not particularised) within 14 days of 10 May 2018 could have caused the accountants not to be able to continue the bookkeeping and accounting services as required.
It may be that the consent order was poorly drafted as incapable of being enforced in the manner in which it is pressed. In contempt proceedings, the Court must be concerned with the actual wording of the order.
The charge is not made out.
Charge 2
That on 24 May 2018 in breach of Order 4 made on 10 May 2018, the husband failed to provide documents evidencing or tending to show:
a. The sales of all plant, machinery, livestock, grain or wool of the partnership or in his own name in the period from 1 October 2017 to 10 May 2018; and
b. The current inventory of all plant, machinery, livestock, grain or wool of the partnership or in his own name in the period from 1 October 2017 to 10 May 2018.
The husband, although present and represented on 10 May 2018, when the relevant orders were made, did not retain a copy of the orders (or the document he signed). Neither it appears, did his solicitors.
On 6 June 2018, well after the time for compliance with order 4 had expired, the husband’s solicitors wrote to the wife’s solicitors as follows:
… As it stands we do not have a copy of the orders so are unable to advise our client of what needs to be done at certain times.
Could you please email us a copy of the typed transcript of the orders by return and we comply with them promptly (sic)
It is clear that the husband, even as at 6 June 2018 had not provided to the wife and the accountant copies of the documents he was required to provide. He conceded as much in cross-examination.[7] The husband admitted in cross-examination that it was a “pretty straightforward order”[8]. The date on which the information was partly provided according to the husband was on or around 24 July 2018.
[7] T41:20
[8] T40:12
The husband’s evidence in respect of this charge is as follows:
Alleged breach of order 4(a). The only plant, machinery, livestock, grain and wool that has been sold since 1 October 2017 was wheat sold to the … Group on or about 15 June 2018 for $20,490.64 and which was banked into the partnership bank account on 29 June 2018. There were earlier sales of wheat to the … Group of which Ms Franklyn retains the invoices. The income obtained from those earlier sales were used for the day to day running costs of the properties and have been fully utilised.
Alleged breach of Order 4(b): This has been provided to Ms Franklyn’s solicitors on 24 July 2018. Attached and marked “A” is a copy of this letter.
The “earlier sales” referred to in the husband’s affidavit, were deposed to in a later paragraph of the same affidavit – in response to charge 3 of the contempt charges. The sales occurred on 12 February and 27 March 2018.
The husband understood the terms of the order on the day the orders were made. He does not say that it was an inadvertent failure to comply. He was prompted to comply with the order[9] by way of correspondence from the wife’s solicitors to his solicitors sent 6 June 2018, 15 June 2018 and 26 June 2018. Proceedings for contempt were filed on 3 July 2018.
[9] Albeit after the expiry of time pursuant to which the order was to be complied with
The husband’s evidence is that he instructed his solicitors to send a letter to the wife’s solicitors, dated 24 July 2018 “because of the order”. The letter is written on instructions and provides a list of plant and equipment, what stock the husband has, and encloses some bank statements[10] for the period 10 May 2018 to 6 June 2018.
[10] Being for an account number different to the account number referred to in the recipient created invoices
The husband conceded in cross-examination that the information provided in that letter is inaccurate and deficient.[11] As at the date of the contempt hearing, there was no evidence that the order has been complied with.
[11] T42:33-45
The husband annexed to his affidavit copies of the recipient created invoices for the sales in February, March and June. There is no evidence that they were provided to the wife within 14 days of 10 May 2018.
An assertion in an affidavit that the wife retains particular invoices does not explain a failure to comply with an order that the husband provide copies of all documents evidencing or tending to show the sales of, inter alia, grain. All documents means all documents. It includes for example, invoices and bank statements. There was no proviso that documents previously provided were not to be provided. Same cannot be inferred from the wording of the order.
The Court is satisfied that the respondent knew and understood the terms of the order but is not satisfied that it has been proven beyond reasonable doubt that he did not comply with the terms of the order in a deliberate and intentional way. There was some attempt at compliance. The Court is also not satisfied beyond reasonable doubt that the respondent acted in a manner which was a flagrant challenge to the authority of the Court.
Certainly the order has not been complied with, but the charge of contempt is not made out.
Charge 3
That on 10 May 2018 in breach of Order 6 made on 10 May 2018 the husband failed to pay into the joint partnership bank account any monies received prior to and since 10 May 2018 in respect of the sale of any stock, wool, grain, hay or assets of the partnership.
The husband understood the terms of order 6 made on 10 May 2018 and his obligations pursuant to that order.[12]
[12] T46-47
It is important to understand that the husband had to pay by close of business on the day the orders were made “all monies and income received… of the sale of any stock… in the period 1 October 2017 to date [10 May 2018]” and thereafter within 7 days of any further sales from the date of the orders.
As at 10 May 2018 the husband had already sold stock, wool, grain, hay or assets of the partnership between 1 October 2017 and 10 May 2018. Those matters were distinctly within his knowledge. He consented to an order to pay into the partnership account the proceeds of such sales by close of business on that day. He did not do so.
Instead, in his affidavit filed in the contempt proceedings, he swore that the “only money received prior to 10 May was the grain money sold to the … Group, which was expended in the day-to-day running costs of the property.” The husband stated that the sale proceeds were $15,048.02 and $33,359.77. He conceded in cross-examination that he did not put those amounts into the partnership account as required by the order. The money had already been spent as at 10 May 2018. There is no evidence that he tried to pay the money into the account after 10 May 2018. There is no evidence that he retained the funds or that he had other funds sufficient to satisfy the order.
If the money had already been spent as at 10 May 2018, it appears to the Court that the husband may have known that he could not comply with the order. However, the Court is not satisfied that there was a flagrant challenge to the authority of the Court.
Therefore the charge is not made out.
Charge 4
That on 17 May 2018 in breach of Order 7 made on 10 May 2018 the husband failed to disclose to the wife the location of all livestock, grain, plant and equipment, wool or any other property which has been removed from the real property owned by the parties or each of them in the period from 1 November 2017 to 10 May 2018.
Order 7 required the husband to disclose to the wife certain information within 7 days. He understood the order as and when it was made.
On 27 June 2018 and 17 July 2018, the husband’s solicitors wrote to the wife’s solicitors purporting to provide certain disclosure as to the location of property or other property which had been removed. The husband deposed in his affidavit filed in answer to the contempt application to the fact that “nothing” but the grain sold to … had been removed from the property.
Having read the letter of 27 June 2018, there is nothing in that letter which would satisfy the Court that the husband has complied with his obligations pursuant to order 7. The overt inference about the sale of grain in the amount of $20,490.64 supposedly complying with the husband’s obligation to disclose the location of all property removed from the real property owned by the parties is not accepted.
Having read the letter of 17 July 2018, there is nothing in that letter which would satisfy the Court that the husband has complied with his obligations pursuant to order 7.
However, there is no evidence that the husband has failed to disclose the location of property removed as alleged by the wife, at least not to the criminal standard required. A failure to disclose something would have to be based on factual findings that firstly there was something to be disclosed. There is no evidence to make such a finding. The mere fact that nothing was disclosed cannot ground a finding that there was an intentional act not to disclose something.
The charge is not made out.
Charge 5
That on 14 June 2018 in breach of Order 9 made on 10 May 2018 the husband failed to provide financial documents as set out in same.
The husband knew and understood his obligations pursuant to order 9. He knew that the wife had been complaining of his non-compliance with the order. It was not until 27 June 2018, outside of the 35 day period, that the husband through his solicitors sought to provide the disclosure required.
Interestingly, the letter reads:
We trust you do not require us to provide you with additional copies of the bank statements which you provided to us after obtaining photocopy access to our clients subpoenaed banking records.
We are instructed your client already has our client’s last three income tax returns as she took all the financial documents from the farm office at the time of separation. Does your client deny this to be the case?
A suggestion, for example, that bank statements do not need to be provided because a party has access to subpoenaed documents is not complying with the order. There is no assertion by the husband through his solicitors or otherwise, that the documents he needs to provide pursuant to the order are not “in his possession, custody or control”.
The husband knew he had to provide documents within 35 days.[13]
[13] T55:36.
The husband[14] in the letter of 27 June 2018 indicated that the only loans the husband has were jointly taken with the wife, and that they were taken out during the course of the relationship. In cross-examination, the husband conceded that this was not correct, and that he has an overdraft which is secured by livestock. It is not something which he ever told the wife about.
[14] Via his solicitors
However, the overdraft was obtained after the orders of 10 May 2018, albeit it was prima facie, in breach of the injunction not to encumber property.
While the disclosure was not provided within the 35 days required by the orders, and there is prima facie a breach of the orders, the Court is not satisfied having regard to the information being provided within a further two weeks of the date required, that it was a flagrant disregard for the authority of the Court.
Therefore, the charge is not made.
Charge 6
That on 15 May 2018 in breach of Order 31 made on 10 May 2018 the husband failed to sign the NGR transfer form to cause the grain to be registered to the partnership’s NGR number … within the required 5 days and has sold the grain prior to having signed such forms.
Annexure “F” to the husband’s affidavit clearly shows that the form required to be lodged within 5 days pursuant to order 31 was not lodged within 5 days of the order.
The husband’s evidence however is that he believes the reason the form was not lodged within the required times was the “fault” of his solicitor and that he thought he had specifically provided his lawyers with instructions to get done what needed to be done.
The Court is not satisfied that any breach of the order was a flagrant disregard for the authority of the Court. The charge of contempt is not made out.
Conclusion
For all of the reasons above, orders are made in as outlined at the forefront of these reasons.
I certify that the preceding sixty-four (64) paragraphs are a true copy of the reasons for judgment of Judge Obradovic
Date: 1 March 2019
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