Hera Project Pty Ltd v Bisognin
[2019] VSC 483
•19 July 2019
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S CI 2018 02233
| HERA PROJECT PTY LTD (ACN 163 685 041) | Plaintiff |
| v | |
| GINO ANDREW BISOGNIN | First Defendant |
| and | |
| LEAH JOAN BISOGNIN | Second Defendant |
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JUDGE: | CHAMPION J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 30 January 2019 |
DATE OF JUDGMENT: | 19 July 2019 |
CASE MAY BE CITED AS: | Hera Project Pty Ltd v Bisognin |
MEDIUM NEUTRAL CITATION: | [2019] VSC 483 |
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CONTEMPT OF COURT – Failure to comply with court orders – Continued non-compliance – Defendants failed to attend trial – Defendants self-represented – Contempt proven – Deferred determination of penalty – Supreme Court (General Civil Procedure) Rules 2015 rr 66.05, 66.10, 75.06 – Witham v Holloway (1995) 131 ALR 401; Deputy Commissioner of Taxation v Gashi (No 2) [2011] VSC 351; Legal Services Board v Forster (No 2) [2012] VSC 633; CFMEU v Grocon Constructors (Victoria) Pty Ltd [2014] VSCA 261; Fortune Holding Group Pty Ltd v Zhang (No 2) [2017] VSC 738.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr L. Warren | Russell Kennedy Lawyers |
| For the First Defendant | No appearance | |
| For the Second Defendant | No appearance |
HIS HONOUR:
Introduction
On 11 July 2018 and 9 October 2018, Hera Project Pty Ltd (‘the plaintiff’) applied to the Supreme Court of Victoria for the punishment of Gino Bisognin and Leah Bisognin (‘the defendants’) for contempt of court, pursuant to rr 66.05(1)(a) and 75.06 of the Supreme Court (General Civil Procedure) Rules 2015 (‘the Rules’). The plaintiff alleges by way of two summonses, that the defendants committed contempt of court by failing to comply with two court orders.
Background
In February 2012, the defendants entered a contract for the sale of their land for $3.6 million (‘the 2012 contract’). The contract was subject to conditions requiring steps be taken to subdivide the land, so that the defendants would keep the northern portion of 1A Adrian Street, Cranbourne, and sell the southern portion for development. In July 2013, the plaintiff was nominated as the purchaser under the contract.[1]
[1]By a Sale of Real Estate Nomination Form dated 26 July 2013, signed by the previous purchaser, Joslin Street SA Developments Pty Ltd.
In October 2013, the plaintiff entered into a lease of the land, which substantially increased its value. Shortly after, the defendants sent a rescission notice to the plaintiff and made numerous attempts to terminate the contract of sale.[2]
[2]Bisognin v Hera Project Pty Ltd [2016] VSC 75, [22]–[31] (‘Bisognin’).
The plaintiff commenced proceedings against the defendants in this Court, seeking an order that the defendants undertake certain steps required for the subdivision of the land, as well as declarations that the purported rescission notice was of no effect and the plaintiff had a sufficient interest in the land to lodge a caveat.
The matter was transferred to the County Court and, following court mediation in November 2014, the defendants and the plaintiff entered terms of settlement. On 13 March 2015, in accordance with the settlement, the parties executed a new contract of sale (‘the 2015 contract’). The 2015 contract was in substantially the same terms as the 2012 contract, but with additional ‘best endeavour’ requirements on the plaintiff to register a plan of subdivision by 25 August 2015, failing which, either party could end the contract.[3]
[3]Ibid, [8]; Hera Project Pty Ltd v Bisognin [No 3] [2017] VSC 268, [14] (‘Hera Project [No 3]’).
On 17 August 2015, the defendants commenced proceedings in the Supreme Court against the plaintiff in respect to the contract, which proceeded to trial. In judgment on 4 March 2016, Sloss J found the defendants had undertaken conduct preventing the plaintiff from registering a plan of subdivision.[4] On 22 June 2016, Her Honour ordered the deadline for registering the plan of subdivision be extended to 31 August 2016.[5]
[4]Bisognin (n 2), [315], see further Hera Project [No 3] (n 3), [14]–[22].
[5]Hera Project [No 3] (n 3), [39].
On 22 May 2017, following further proceedings commenced by the plaintiff, Riordan J found the defendants had undertaken conduct that prevented the plaintiff from complying with the new registration date. Further, it became evident that the defendants had entered a contract for the sale of the same land to another party for a higher price. That contract purported to confer an obligation on the defendants to end their contract with the plaintiff, and Riordan J found the defendants had deliberately concealed its existence.[6] His Honour ordered the defendants specifically perform the 2015 contract with the plaintiff.[7]
[6]Ibid [91]–[104]; see also Hera Project Pty Ltd v Bisognin [No 7] [2017] VSC 439, [20] (‘Hera Project [No 7]’).
[7]Hera Project [No 3] (n 3); see also Hera Project [No 7] (n 6), [173].
On 29 June 2017, Riordan J ordered the defendants pay the plaintiff’s costs of those proceedings up to and including that day.[8]
[8]Hera Project [No 7] (n 6).
The contempt proceedings
On 4 June 2018, a title alert indicated that the defendants’ assets were being alienated, causing the plaintiff to make an urgent ex parte application for a freezing order against the defendants. Riordan J refused to deal with the application on short notice and on an ex parte basis, and adjourned the matter to allow the defendants to appear and file material in response.
On 13 June 2018, the plaintiff filed an originating motion and summons in respect to its application for a freezing order against the defendants (‘the 13 June summons’).
The first freezing order
At the hearing on 28 June 2018 for the return of the 13 June summons, Riordan J noted the defendants had failed to provide any evidence or materials despite having been afforded reasonable opportunity. His Honour ruled there was reasonable cause for concern that the defendants had transferred their assets ‘for the purposes of avoiding their liabilities under various costs orders’.[9]
[9]Transcript of Proceedings, Hera Project Pty Ltd v Bisognin, (Supreme Court of Victoria, S CI 2018 02233), The Honourable Justice Riordan, 28 June 2018, 28 (Unrevised ruling).
His Honour made orders adjourning the matter to 16 July 2018 and attaching a freezing order as Schedule 1 to the order (‘the first freezing order’).
The first freezing order provided for the freezing of the defendants’ assets and required them to produce information as follows:
FREEZING OF ASSETS
4.(a) You must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets which are in Australia (‘Australian assets’) up to the unencumbered value of AUD$500,000 (‘the relevant amount’).
(b)If the unencumbered value of your Australian assets exceeds the relevant amount, you may remove any of those assets from Australia or dispose of or deal with them or diminish their value, so long as the total unencumbered value of your Australian assets still exceeds the relevant amount.
5. For the purposes of this order -
(a)your assets include -
(i)all your assets, whether or not they are in your name and whether they are solely or co-owned;
(ii)any asset which you have the power, directly or indirectly, to dispose of or deal with as if it were your own (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions);
(iii)any shares that you hold in any companies including Childers Street Investments Pty Ltd (ACN 611 000 492) and Ginlee Enterprises Pty Ltd (ACN 145 825 538);
(iv)the proceeds of sale of the property known as 1 Adrian Street, Cranbourne East, the property known as 1A Adrian Street, Cranbourne East and the property known as 124 Clipper Quay, Safety Beach.
(b)the value of your assets is the value of the interest you have individually in your assets.
PROVISION OF INFORMATION
6.Subject to paragraph 7, you must –
(a)by 9 July 2018 (or within such further time as the Court may allow) to the best of your ability inform the plaintiff in writing of:
(i)all your assets in Australia…
(ii)the manner in which the proceeds of sale of the property known as 1 Adrian Street, Cranbourne East and the property known as 124 Clipper Quay, Safety Beach were paid, dispersed or otherwise used; and
(iii)your current residential address including details of any rental agreement;
(b)by 9 July 2018, swear and serve on the plaintiff an affidavit setting out the above information;
(c)by 9 July 2018, produce to the Court a copy of:
(i)all documents setting out the borrowing and repayment arrangements between you and CMJ Property Group Pty Ltd … Glowing Opal Pty Ltd … and Craig Charter Investments Pty Ltd…; and
(ii)all documents pertaining to the transfer of the property known as 1A Adrian Street, Cranbourne East from you to Glowing Opal Pty Ltd.
By 10 July 2018, the defendants had failed to comply with the first freezing order. The plaintiff emailed his Honour’s Chambers seeking further orders for the defendants’ compliance. His Honour declined to make such orders, and it was noted the plaintiff might file a summons for contempt.
The first contempt summons
On 11 July 2018, the plaintiff filed a summons alleging a charge of contempt of court against each of the defendants (‘the first contempt summons’) as follows:
1.The contempt of court is as follows.
a.You failed to comply with paragraph 6 of Schedule 1 to the Order of the Honourable Justice Riordan made on 28 June 2018 (“the Order”), which Order (indorsed with a notice pursuant to rule 66.10(3) of the Rules) was served upon you as follows:
i.pursuant to paragraph 5 of the Order, by email from the Plaintiff’s solicitor, Leonard Adrian Warren of Russell Kennedy to your solicitor, Craig Stevenson of A Ace Solicitors on 28 June 2018 at the email address [email protected]; and Case: S CI 2018 02233
ii.personally on you on 1 July 2018.
b.The details of that failure to comply with paragraph 6 of Schedule 1 to the Order were set out in the affidavit of Leonard Adrian Warren affirmed 10th July 2018 and filed herein; and
c.The matters set out above were likely, or had the tendency to interfere with or obstruct justice:
(1)by rendering the Order useless or futile; and/or
(2)by defying the authority of the Court and of its orders.
2.Pursuant to the matters contained in paragraph 1 hereof, the Defendants be punished for contempt by committal to prison or fine or both, or otherwise be dealt with for contempt in the manner that this Honourable Court deems appropriate.
The first contempt summons was made returnable on 16 July 2018, and is attached to this decision as Annexure 1.
On 16 July 2018, the plaintiff and defendants appeared before Riordan J. His Honour adjourned to 13 August 2018 and made orders requiring that:
4.By 4pm on 30 July 2018, the Defendants make, file and serve on the Plaintiff an affidavit explaining their failure to comply with paragraph 6 of Schedule 1 to the Orders made by the Honourable Justice Riordan made 28 June 2018.
5.By 4pm on 30 July 2018, the Defendants make, file and serve on the Plaintiff any other affidavits upon which they intend to rely in response to the Plaintiff’s Summons dated 11 July 2018.
On 13 August 2018, at a directions hearing before Riordan J, the defendants provided the Court with three affidavits that purported to comply with the first freezing order. I will address below the degree to which this material satisfies their obligations under that order. It suffices here to say, his Honour made another order that day requiring the defendants to file and serve any further affidavit material in response to the first contempt summons by 4.00pm on 24 August 2018.
The second freezing order
At a further directions hearing on 31 August 2018, Riordan J made an order by consent, attaching as Schedule 2 ancillary orders in support of the first freezing order (‘the second freezing order’).
The second freezing order required the defendants to provide further information as follows:
1.By 4pm on 14 September 2018 (or such further time as the Court may allow), you must inform the plaintiff in writing of the following matters:
a.Details of each payment made to the previous or current solicitors, or to Craig Charter Investments Pty Ltd referred to in paragraph 9 of your affidavit sworn 13 August 2018;
b.Full details of the payments referred to in the table of payments attached as part of Exhibit “A” to your Affidavit sworn 13 August 2018, including the date of each advance, the purpose for that advance, and the application of that advance;
c.Details of any rental agreement, arrangement or understanding (whether oral or in writing) in relation to your residence at 1A Adrian Street, Cranbourne;
d.Details of the date of execution of the Facility Agreement between you and CMJ Property Pty Ltd dated 2016 attached as part of Exhibit “A” to your Affidavit sworn 13 August 2018 (“the Facility Agreement”); and
e.Details of any loan agreement, arrangement or understanding (whether oral or in writing) in respect of the advances of monies referred to in clause 2.1(a) of the Facility Agreement.
2.By 4pm on 14 September 2018 (or such further time as the Court may allow), you must provide to the plaintiff copies of the following documents:
a.a copy of the Mortgages (as defined in the Facility Agreement);
b.all documents concerning the basis of your continued residence at 1A Adrian Street, Cranbourne;
c.all documents concerning the date of execution of the Facility Agreement;
d.all documents concerning the advances of monies referred to in clause 2.1(a) of the Facility Agreement;
e.copies of all Utilisation Requests made under the terms of the Facility Agreement;
f.copies of the valuations referred to in recital C, page 3 of the Deed of Variation between your clients and Glowing Opal Pty Ltd (ACN 624 055 269) dated 30 May 2018 attached as part of Exhibit “A” to your Affidavit sworn 13 August 2018;
g.a copy of the statement of adjustments concerning the sale of 1A Adrian Street, Cranbourne;
h.a copy of the transfer of sale of land for the sale of 1A Adrian Street, Cranbourne to Glowing Opal Pty Ltd (ACN 624 055 269);
i.in relation to 1A Adrian Street, Cranbourne, a copy of the solicitors’ or conveyancer’s file in relation to the contract of sale of land, subsequent variation of that contract, and the transfer of that land.
3.By 4pm on 14 September 2018, you must swear and serve on the plaintiff an affidavit which verifies the information and documents provided to the plaintiff in accordance with paragraphs 1 and 2 hereof.
The hearing of the first contempt summons was adjourned to 11 September 2018, and later further adjourned on the papers at the plaintiff’s request to 17 September 2018.
Hearing of the first contempt summons
On 17 September 2018, the first contempt summons was listed for trial before me. The defendants failed to appear in person and their representative sought an adjournment. After hearing parties’ submissions, I made the following ruling:
The two defendants have not appeared to answer the summons and to defend the allegations made in the summons alleging contempt …
It seems to me, no satisfactory explanation has been offered for their non-appearance … Mr Stevenson, informs me that he last spoke with his two clients late last week. There have been … a number of attempts made to contact them since that time, which appeared to have proven futile …
I am told from counsel appearing for the defendants that the contempt will be admitted. However, I am also told … that no written instructions have been put forward in respect of that …
I am not prepared to proceed to hear the matter in the absence of the two defendants…
I conclude that it is appropriate, in these circumstances, to issue a warrant for the arrest of the two defendants to bring them before the court.
Accordingly, pursuant to r 75.08.1 of the Rules, I issued warrants for the arrest of both defendants and adjourned the matter to a date to be set.
Extension of the second freezing order
The defendants failed to provide any information in compliance with the second freezing order by 14 September 2018. On 26 September 2018, the plaintiff contacted the defendants’ representative and parties executed a proposed consent order to extend the time for the defendants’ compliance. This order was provided to the Court.
On 3 October 2018, Riordan J extended the date for the defendants’ compliance with the second freezing order to 5 October 2018.
The second contempt summons
On 9 October 2018, the plaintiff filed a second summons (‘the second contempt summons’) alleging the defendants had committed further contempt of court by failing to comply with the second freezing order, as extended by Riordan J on 3 October 2018, as follows:
1.The contempt of court is as follows.
(a)You failed to comply with Schedule 2 to the Order of the Honourable Justice Riordan made on 3 October 2018 (“the Order”), which Order (indorsed with a notice pursuant to rule 66.10(3) of the Rules) was served upon you as follows:
(i)pursuant to paragraph 5 of the Orders of the Honourable Justice Riordan made on 28 June 2018, by email from the Plaintiff’s solicitor, Leonard Adrian Warren of Russell Kennedy to your solicitor, Craig Stevenson of A Ace Solicitors on 3 October 2018 at the email address [email protected]; and
(b)The details of that failure to comply with Schedule 2 to the Order are set out in the affidavits of Gareth Andrew James Kerr sworn 8 October 2018 and Leonard Adrian Warren affirmed 8 October 2018 and filed herein; and:
(c)The matters set out above were likely, or had the tendency to interfere with or obstruct justice:
(i)rendering the Order useless or futile; and/or
(ii)defying the authority of the Court and of its orders.
2.Pursuant to the matters contained in paragraph 1 hereof, the Defendants be punished for contempt by committal to prison or fine or both, or otherwise be dealt with for contempt in the manner that this Honourable Court deems appropriate.
The second contempt summons was made returnable before me on 19 October 2018, and was joined with the hearing of the first contempt summons. It is attached to this decision as Annexure 2.
Hearing of the first and second contempt summonses
On 19 October 2018, the hearing of both contempt summonses came before me. The defendants again failed to appear and their solicitor made an application to adjourn the hearing. After submissions, I ruled it would be unfair to continue to the hearing in the circumstances where:
(a) a sentence of imprisonment was being called for;
(b) there was an issue as to whether the defendants should be separately represented; and
(c) the Court was informed that Mr Bisognin was unwell, potentially had mental health issues, and had been admitted to hospital that morning and Mrs Bisognin was there supporting him.
As such, I adjourned the matters for directions on 31 October 2018, at which the defendants again failed to appear in person. I adjourned for further directions on 28 November 2018 and the defendants failed to appear once more. The trial of this matter was finally listed and heard 30 January 2019.
Preliminary issues
Procedures and powers to deal with contempt
In relation to the enforcement of judgment and orders,[10] r 66.05 of the Rules provides:
[10]Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 66.01 defines the term ‘judgment’ to include order.
(1) This Rule applies where—
(a)a judgment requires a person to do an act and the act is to be done within a time fixed in the judgment or by subsequent order, and the person refuses or neglects to do the act within that time;
(b)a judgment requires a person to abstain from doing an act, and the person disobeys the judgment.
(2)Where this Rule applies, a judgment may, subject to Rule 66.10, be enforced by one or more of the following means—
(a) committal of the person bound;
(b) sequestration of the property of the person bound; …
Rule 66.10 of the Rules provides:
(1)A judgment shall not be enforced by committal or sequestration unless—
(a)a copy of the judgment is served personally on the person bound; and
(b)if the judgment requires the person bound to do an act within a fixed time, the copy of the judgment is so served a reasonable time before that time expires.
…
(3)A copy of a judgment served under this Rule shall be indorsed with a notice, naming the person served, that the person served is liable to imprisonment or to sequestration of property if—
(a)where the judgment requires the person bound to do an act within a fixed time, the person bound refuses or neglects to do the act within that time; or
(b)where the judgment requires the person bound to abstain from doing an act, the person disobeys the judgment.
Rule 75.06 of the Rules sets out the procedure to be followed for contempt proceedings, relevantly that:
(1)Application for punishment for the contempt shall be by summons or originating motion in accordance with this Rule.
(2)Where the contempt is committed by a party in relation to a proceeding in the Court, the application shall be made by summons in the proceeding …
(4)The summons or originating motion shall specify the contempt with which the respondent is charged.
(5)The summons or originating motion and a copy of every affidavit shall be served personally on the respondent, unless the Court otherwise orders.
Service of relevant orders pursuant to r 66.10(1)
The plaintiff’s summonses charging contempt allege that the defendants’ have failed to comply with the first and second freezing orders. I am satisfied these orders, as well as Riordan J’s order of 3 October 2018 that extended the compliance date of the second freezing order, (collectively, ‘the freezing orders’), were served on the defendants within reasonable time.
In respect to service, order five of Riordan J’s order made 28 June 2018 (‘the substituted service order’) provided:
Any documents to be served by the plaintiff on the defendants in this proceeding may be served on A Ace solicitors by post at 21 Hanlon Street, Bundamba, Queensland or by email to [email protected]
The plaintiff served the first freezing order by email to A Ace Solicitors on 28 June 2018, and personally on each of the defendants at their home address, by the Network Process Service on 1 July 2018.[11]
[11]Affidavit of Leonard Adrian Warren affirmed 10 July 2018, [21], Exhibit LAW 14; Affidavit of Service of Frank Partsch on Leah Joan Bisgonin affirmed 11 June 2018; and Affidavit of Service of Frank Partsch on Gino Andrew Bisgonin affirmed 11 June 2018.
On 27 August 2018, A Ace Solicitors filed a Notice of Appearance on behalf of the defendants.
The second freezing order was sent by email from Riordan J’s chambers to A Ace Solicitors on 3 September 2018, and further served by the plaintiff to that email on 26 September 2018.[12] The plaintiff also served Riordan J’s extension order of 3 October 2018 by email to A Ace Solicitors that same day.[13]
[12]Affidavit of Gareth Andrew James Kerr sworn 9 October, [6], [20].
[13]Ibid [24], [25].
Endorsement pursuant to r 66.10(3)
In proceedings seeking committal or sequestration, it must be shown that the relevant order was endorsed as required by r 66.10(3), so that the person served is warned of the consequences that might follow if they do not perform the act directed.[14]
[14]Clifford v Middleton [1974] VR 737; Chan v Chen (No 3) [2007] VSC 52.
Each of the freezing orders were endorsed pursuant to r 66.10 of the Rules as follows:
TO: GINO ANDREW BISOGNIN
AND TO: LEAH JOAN BISOGNIN
IF YOU:
(A)REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR
(B)DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU TO ABSTAIN FROM DOING,
YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.
Service of summons pursuant to r 75.06(5)
The first contempt summons was served by way of email to A Ace Solicitors on 11 July 2018, in accordance with the substituted service order,[15] and by way of personal service on the defendants at their address, 1A Adrian Street, Cranbourne East by Network Process Service on 12 July 2018.[16]
[15]Affidavit of Leonard Adrian Warren affirmed 16 July 2018. Service by way of substituted service order sufficient per Anderson v Hassett [2007] NSWSC 1310; Ronowska v Kus (No 2) [2012] NSWSC 817, [26], [59] (‘Ronowska (No 2)’).
[16]Affidavit of Service of Frank Partsch of Network Process Service on Leah Joan Bisognin affirmed 13 July 2018; Affidavit of Service of Frank Partsch of Network Process Service on Gino Andrew Bisognin affirmed 13 July 2018.
In his affidavit affirmed on 13 July 2018, Process Server, Mr Frank Partsch states:
[S]ervice was effected by leaving documents on the ground at the front door… [attached photographs].
Prior to service, after knocking on the front door, a male came to the door and spoke to me through the fly screen door. When I asked for Gino and Leah Bisognin, the male said that they are not home and gave his name as John Atherton … I could not see this male’s face clearly… however his voice and figure were similar to the male I previously served on 01 Jul 2018 at 2.30pm )in this same matter) who was identified by Leah Joan Bisognin as being Gino Andrew Bisognin. I believe the male may have been Gino Andrew Bisognin.
…I then re-attended the address on 12 July 2018 at 3:15pm to see whether the documents had been removed and noted that the documents were still on the ground at the front door, however has been slightly moved. I knocked on the front door, I could hear movements inside the house however, no-one came to the door.[17]
[17]Affidavit of Service of Frank Partsch of Network Process Service on Gino Andrew Bisognin affirmed 13 July 2018, [1].
The second contempt summons was served by way of email to A Ace Solicitors on 10 October 2018.[18]
[18]Orders of the Honourable Justice Riordan in Hera Project Pty Ltd (ACN 163 685 041) vs Bisognin, Gino Andrew & ors (Supreme Court of Victoria, S CI 2018 02233), 28 June 2018 (‘Substituted Service Order’); Affidavit of Gareth Andrew James Kerr sworn 18 October 2018.
Having outlined the evidence of service, and relevant parts of the orders, I am satisfied the procedural requirements for contempt proceedings have been complied with.
The defendants’ legal representation
At the hearing before Riordan J on 28 June 2018, the defendants were represented by Mr Anthony Fronis of counsel. Mr Fronis informed the Court that he was instructed by A Ace Solicitors, though a Notice of Appearance had not been filed and he did not have instructions to undertake on their behalf that they would file one.
On 13 August 2018, Craig Stevenson of A Ace Solicitors provided an undertaking to the Court that the firm would file and serve a Notice of Appearance on behalf of the defendants. A Ace Solicitors filed and served such notice on behalf of the defendants on 27 August 2018. Mr Stevenson appeared on behalf of the defendants at the hearings on 16 July, 13 August, 31 August, 17 September and 19 October 2018.[19]
[19]Transcript of Proceedings, Hera Project Pty Ltd v Bisognin, (Supreme Court of Victoria, S CI 2018 02233), The Honourable Justice Riordan J, 28 June 2018, 4 – 5; 13 August, 1, 11 – 12; and 31 August, 1; 17 September, 27-29; 19 October, 3.
On 31 October 2018, Mr Stevenson made an oral application for leave to file a Notice of Ceasing to Act on behalf of the defendants, on the basis he had been unable to obtain instructions from his clients. Further details in respect to this issue are outlined in the next section. I granted leave and, on 21 November 2018, A Ace Solicitors filed the notice. From this point, the defendants were unrepresented.
Joint representation
While the charges of contempt must be proven against each defendant individually, I note they both provided largely the same affidavit evidence and had the same representative, who made like submissions on behalf of each.
However, at the hearing on 17 September 2018, I questioned whether the defendants ought to be separately represented. This was due to concerns that their interests and instructions may be different, and that Mr Stevenson may therefore have a conflict of interest in appearing for both. In response, Mr Stevenson confirmed he represented both defendants and had not turned his mind to any potential conflict.[20]
[20]Transcript of Proceedings, Hera Project Pty Ltd v Bisognin, (Supreme Court of Victoria, S CI 2018 02233), The Honourable Justice Champion J, 17 September 2018, 27–28 (‘Transcript of Champion J’).
On 19 October 2018, following discussions that indicated the defendants’ positions as to the contempt charges may not be aligned, the issue of separate representation was again raised.[21] On this occasion Mr Stevenson indicated, ‘if the matter is to proceed, I certainly would seek the leave to withdraw in relation to Leah Bisognin’.[22]
[21]Transcript of Champion J, 19 October 2018, 10–11, 20–23, 48.
[22]Ibid, 23.
Ultimately, as above, Mr Stevenson sought leave to cease representation of both defendants and from 21 November 2018, neither was represented. While neither of them appeared or provided further material to the Court after this time, I will note any relevant differences in their positions as to the contempt charges as they appear.
Proceeding in the absence of the defendants
The defendants did not appear and were not legally represented at the trial of the first and second contempt summons on 30 January 2019. The plaintiff made an application to proceed in their absence.
In Ronowska v Kus(No 2), which involved contempt proceedings where a defendant deliberately avoided service of relevant documents and chose to remain absent from the hearing, Pembroke J observed:
Lord Atkin once said that there was an ‘inviolable rule’ that the trial and sentence for an indictable offence must be conducted in the presence of the accused. Subsequent decisions have however recognised that there must, as a practical necessity, be exceptions to this rule.
The most common jurisprudential basis for an exception to the rule has its foundation in the accused’s own conduct. In certain circumstances, the conduct of an accused will be treated as amounting to a voluntary waiver of his right to be present at trial and sentence. In such circumstances, the accused forfeits the right to be present.[23]
[23]Ronowska (No 2) (n 15), [52]–[53], referencing Lawrence v The King [1933] AC 699, 708; R v Cornwell [1972] 2 NSWLR 1, 3; McHardie v The Queen [1983] 2 NSWLR 733, 741-2; R v Hallocoglu (1991) 29 NSWLR 67, 71-72; R v Vernell [1953] VLR 591; R v Jones [1998] SASC 7021; (1998) 72 SASR 281; R v Howson (1982) 74 Cr App R 172 and R v Jones (No 2) [1972] 1 WLR 887.
Pembroke J found the Court had discretion to proceed in the absence of an alleged contemnor, though noted this discretion should be ‘exercised sparingly’.[24] In circumstances comparable to those in the present case, his Honour found the defendant’s conduct amounted to ‘a voluntary waiver of his right to be present at the hearing against him’.[25] In determining to proceed with the hearing and to sentence the defendant to a term of imprisonment in his absence, his Honour took into account the following factors:
·the strength of the evidence against him;
·the absence of any apparent justification or defence available to him;
·the defiant nature of his conduct in ignoring the original court order and avoiding personal service and arrest;
·the hardship to the plaintiff if the matter did not proceed; and
·‘the interests of justice in swiftly demonstrating the court’s reproach and in not delaying punishment for the willful conduct that he has demonstrated’.[26]
[24]Ronowska (No 2) (n 15), [51].
[25]Ibid, [53].
[26]Ibid, [59].
In the matter before me, both defendants failed to appear at three trial dates set for 17 September 2018, 19 October 2018 and 30 January 2019, as well as each directions hearing on 31 October and 28 November 2018. I have already outlined the service of the summonses on the defendants and there is additional evidence indicating they had knowledge of the proceedings and chose to ignore them.
At the first trial date on 17 September 2018, Mr Stevenson told the Court the defendants were aware of the hearing, noting he had contacted them the previous week and encouraged attendance. He stated he had been unable to contact them since, despite ‘about a dozen’ attempts. Mr Stevenson nonetheless indicated he had instructions to admit the contempt, though ‘there was not an admission that it was an intentional contempt’, and these instructions were not in writing. The following exchange took place:
HIS HONOUR: [Justice Riordan] listed this matter for trial some time back, your clients knew that they had to be here today in order for this trial to proceed.
MR STEVENSON: That is correct, Your Honour.
HIS HONOUR: …and have failed to appear, in effect, defiantly.
MR STEVENSON: … I would suggest that the matter could be heard. I did at one stage have instructions to – if possible they didn’t want to appear and – and it was on my insist – I said ‘well, maybe … you should appear then, it is a requirement because it’s a criminal trial’, they have been not appearing along the way.
HIS HONOUR: And what, in the end if they don’t appear and … I move to find the contempt has been laid out and then we move through to the question of penalty. They … would want me to move to penalty in their absence without hearing from them. Is that how it's going to work?
MR STEVENSON: … if you moved to penalty … I would ask for an adjournment.
There is also evidence the defendants were aware of the warrants issued on 17 September 2018 for their arrest, yet have not surrendered themselves. On 5 October 2018, at a hearing before Riordan J, Mr Stevenson informed his Honour that the defendants were present outside the courtroom. Mr Stevenson stated it was ‘their intention to surrender to the Court in relation to that warrant’, but ‘we couldn’t work out what to do to surrender them’. His Honour declined to deal directly with the matter, noting the proceedings relating to contempt were listed before me.
I note it was open to the defendants on this occasion, or at any stage before the hearing on 30 January 2019, to attend the Court registry, contact my chambers, or make further inquiries as to how to appropriately surrender themselves. It appears that this occasion on 5 October 2018 was the last time either defendant appeared personally at Court, and the warrants for their arrest remain unexecuted at the time of this judgment.
At the hearing on 19 October 2018, Mr Stevenson informed the Court that the defendants called at about 8.30am and told him Mr Bisognin had been admitted to hospital that morning, and Mrs Bisognin had gone with him for support. The plaintiff asserted the defendants knew about the hearing and expressed skepticism about the reason given for their absence, in light of the following:
(a) on 10 October 2018, the defendants’ solicitor filed an application to vacate the hearing on 19 October 2018 and adjourn the trial, on the basis it was their son’s wedding that day. This application was refused on the papers that day; and
(b) on 16 October 2018, the plaintiff’s instructor spoke with Mr Stevenson, who expressed doubts the defendants would attend the hearing.[27]
[27]Exhibit 2, filed at hearing on 19 October 2018 ‘Email from Gareth Andrew James Kerr to Leonard Adrian Warren dated 16 October 2019’.
After the hearing on 19 October 2018, I made the following orders:
1.The defendants file and serve any material, including relevant medical documentation, on which they intend to rely in support of their application to adjourn proceedings in respect of the first and second summons by 4:00pm on 24 October 2018.
2.The defendants file and serve any material on which they intend to rely in response to the charge of contempt in the second summons by 4:00pm on 24 October 2018.
As the defendants did not file any material by 24 October 2018, the plaintiff issued a subpoena to the relevant hospital to produce all medical records relating to Mr Bisognin. The documents produced indicated Mr Bisognin was discharged at 10.42am on 19 October 2018. I note the proceedings were adjourned well into the afternoon, to allow the defendants’ counsel to contact them and secure their attendance.
At the directions hearing on 31 October 2018, the defendants again failed to appear and Mr Stevenson applied for leave to file a Notice of Ceasing to Act. The following exchange occurred:
HIS HONOUR: Now, are the Bisognins aware of what the obligations were today?
MR STEVENSON: They are, Your Honour. They are. They’re advised, and they’re on the understanding – they know that there’s a warrant out – there’s a warrant issued against them, and that they're obligated to come today.
HIS HONOUR: And have you provided that information to them in writing?
MR STEVENSON: I have, Your Honour.
HIS HONOUR: Apart from being aware that there’s a warrant outstanding, are they also aware that – of the nature of the order that I made on the last occasion that they provide material to the court today?
MR STEVENSON: They are, Your Honour. They are aware that they were required to come today to provide that, and they were – yes, they do have a copy of their admission chart.
HIS HONOUR: They have a copy?
MR STEVENSON: They told me that they had a copy of their admission – sorry, their hospital records and everything.
HIS HONOUR: Yes. All right. By any chance did you provide them with a copy of the transcript of the hearing on the last occasion?
MR STEVENSON: I didn’t, Your Honour. I don’t have a copy of the transcript on ---
HIS HONOUR: I see. All right. So, as I understand it, then you seek to withdraw on the basis that you are no longer instructed?
MR STEVENSON: That is correct. There are other issues, but that’s the main basis.
HIS HONOUR: And is that a decision that’s been made on your own part? In the sense that you have – you are withdrawing because you’re not instructed, or they’ve terminated your instructions?
MR STEVENSON: Well, it’s an issue where they were given an ultimatum that they needed to see me to provide those instructions or I would terminate. So in that sense, I’ve terminated due to those instructions.
Following the defendants further failed attendance at the directions hearing on 28 November 2018, I made the following orders:
1.The first summons and second summons filed by the plaintiff is listed for trial at 10.30am on 30 January 2019.
2.The plaintiff serve a copy of this order on the defendants at the email addresses and by registered post to the addresses provided by Ace Solicitors in its Notice of Ceasing to Act filed 22 November 2018, with a covering letter stating:
‘We enclose by way of service a copy of the orders made by the Honourable Justice Champion on 19 December 2018. Those orders have set down for trial on 30 January 2019 the plaintiff’s summonses alleging that you have committed a contempt of court. In the event that you do not attend the hearing on 30 January 2019, the Court will entertain an application by the plaintiff that the hearing of those summonses proceed in your absence.’
3.The plaintiff send an SMS to the defendants at the mobile telephone number provided by Ace Solicitors in its Notice of Ceasing to Act filed 22 November 2018, stating:
‘We have sent to you by email and registered post by way of service orders made by the Honourable Justice Champion on 19 December 2018. Those orders have set down for trial on 30 January 2019 the plaintiff’s summonses alleging that you have committed a contempt of court. In the event that you do not attend the hearing on 30 January 2019, the Court will entertain an application by the plaintiff that the hearing of those summonses proceed in your absence.’ [28]
[28]These orders were amended on the papers on 30 November 2018 and 19 December 2018.
The plaintiff served this order on the defendants on 19 and 21 December 2018, in accordance with orders two and three. Significantly, the order specifically states that should the defendants fail to attend, the Court may proceed to hear the summonses in their absence.
Finally, the plaintiff submitted in support of its application to proceed in the defendants’ absence, that the contempt case against the defendants was ‘overwhelming’, that the consequences for the plaintiff were ‘real and significant’, and that it would be in the interest of justice to swiftly demonstrate the Court’s reproach of the defendants’ conduct.[29]
[29]Transcript of Champion J, 28 November 2018, 33-37.
In light of the evidence of service and the defendants’ conduct, I found it reasonable to conclude both were aware of Court proceedings and took an active and defiant stance to ignore them. In essence, I found each of the defendants waived their right to be present at the hearing of the first and second contempt summonses. In deciding to proceed in their absence, I also took into account the strength of the evidence of contempt against them (which will be detailed below), the absence of any justification for their conduct, the hardship to the plaintiff, and the need to uphold and preserve the orderly administration of justice.
Legal principles
Contempt by breach of a court order
A failure by a party to comply with a court order may constitute contempt of court.[30]
[30]Legal Services Board v Forster (No 2) [2012] VSC 633, [43].
To establish contempt by breach of a court order, the plaintiff must prove beyond reasonable doubt,[31] the following five elements:
[31]Witham v Holloway (1995) 131 ALR 401, 408 (‘Witham’); Deputy Commissioner of Taxation v Gashi (No 2) [2011] VSC 351, [17] (‘Gashi (No 2)’); Fortune Holding Group Pty Ltd v Zhang (No 2) [2017] VSC 738, [19] (‘Zhang (No 2)’).
(a) an order was made by the court;
(b) the terms of the order are clear, unambiguous and capable of compliance;
(c) the order was served on the defendant, or excused in the circumstances, or service was dispensed with pursuant to the rules of the court;
(d) the defendant had knowledge of the terms of the order; and
(e) the defendant breached the terms of the order. [32]
[32]National Australia Bank v Juric [2001] VSC 375, [37]; Advan Investments v Dean Gleeson Motor Sales [2003] VSC 201, [31]; Gashi (No 2) (n 31), [18]; Zhang (No 2) (n 31), [33].
Civil or criminal contempt
The law has traditionally distinguished between civil and criminal contempt. The basis of distinction was that civil contempt had a remedial function in coercing compliance with court orders in support of a private interest of a party. Criminal contempt, in contrast, had a punitive and deterrent function, and was concerned with protecting the public interest in the integrity of the judicial process.[33]
[33]Witham (n 31), 406.
However, this distinction has become subject to scrutiny. In Witham v Holloway (‘Witham’), which concerned contempt by breach of a court order, the High Court determined the bases for the distinction between civil and criminal contempt are ‘in significant respects, illusory’.[34] The Court highlighted that:
(a) there is no true dichotomy between proceedings in the public interest and those in the individual’s, as all orders are made in the interests of justice and non-compliance necessarily interferes with its administration; and
(b) there is difficulty in drawing a distinction between proceedings for a punitive purpose and those for remedial or coercive purposes; imprisonment and fines both constitute punishment and are used for both civil and criminal contempt.
[34]Ibid, 408.
It has been observed that while Witham clarified the law of contempt in some ways, it created new confusion in others.[35]
[35]See e.g. Zhang (No 2) (n 31), [20].
In CFMEU v Grocon Constructors (Victoria) Pty Ltd,[36] the Court of Appeal conducted an extensive survey of authorities to ascertain the state of the law of contempt. The Court noted that while there had been a blurring of ‘any bright line of distinction’ between civil and criminal contempt, courts have continued to ‘draw the elusive distinction between “punitive” and “protective” proceedings’.[37]
[36][2014] VSCA 261 (‘CFMEU v Grocon’).
[37]Ibid, [179], citing Rich v Australian Securities & Investments Commission (2004) 220 CLR 129, 145 [32], [33], 148 [41].
With regard to contempt proceedings brought in respect of breach court orders, the Court made the general observation that
their object is most often to coerce the recalcitrant party into compliance, and not to punish the party for that breach. Notwithstanding the fact that such conduct is usually described as ‘civil contempt’, the offending party may be imprisoned or fined as an incentive to comply with court orders.[38]
[38]CFMEU v Grocon (n 36), [136].
The Court ultimately found contempt proceedings by breach of an order are a ‘hybrid’, to which features of both civil and criminal procedure attach. While some of the safeguards associated with the conduct of criminal trials may be applicable, the ‘full panoply of the criminal law was never imported into the law of civil contempt’.[39] This was upheld by the High Court in CFMEU v Boral Resources (Vic) Pty Ltd,[40] in which the Court referred back to Witham as follows:
[T]o say that proceedings for contempt are essentially criminal in nature is not to equate them with the trial of a criminal charge. There are clear procedural differences[.][41]
[39]Ibid, [127].
[40](2015) 256 CLR 375. The proceedings concerning Grocon Constructors (Vic) Pty Ltd were not appealed to the High Court, which is why the case name refers to Boral Resources (Vic) Pty Ltd instead.
[41]Ibid, [43].
While it is generally accepted that disobedience of a court order will usually be civil contempt, it may be a criminal contempt where:
(a) the contempt is contumacious; or
(b) the proceedings serve a punitive purpose of punishing a past breach, rather than a remedial purpose of coercing obedience with the order.[42]
[42]Mosman Municipal Council v Kelly (No 3) [2009] NSWLEC 92, [58], citing Witham (n 31) and Hearne v Street (2008) 235 CLR 125.
It is widely accepted that it is not necessary to classify contempt as civil or criminal until consideration of the penalty to be imposed, after a finding of contempt has been made.[43] Accordingly, I will defer my conclusions on this matter.
[43]CFMEU v Grocon (n 36), [277]. See also eg. National Australia Bank Limited vJuric [2001] VSC 375, [158]-[160]; Pico Holdings, Inc v Voss [2002] VSC 319, [55], [70], [81]–[84]; Deputy Commissioner of Taxation v Gashi & Anor (No 3) [2011] VSC 448, [11], [16], [18]; Chan v Chen (No 3) [2007] VSC 52, [9].
Intention: technical, wilful or contumacious
The plaintiff does not have to prove that the defendants had an intention to deliberately breach the order. As stated in CFMEU v Grocon:
It is not in doubt that, in relation to breach of a court order, a finding of contempt can be made whether the breach was technical, wilful or contumacious. It is sufficient to establish that the acts of an alleged contemnor were intentional and were calculated (in the sense of ‘likely’) to interfere with the course of justice. It is unnecessary to establish a specific intention to breach the order of the court or to interfere with the proper administration of justice.[44]
[44]CFMEU v Grocon (n 36), [138], citing Anderson v Hassett [2007] NSWSC 1310; Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98, 111; Matthews v Australian Securities and Investments Commission [2009] NSWCA 155, [16]; Lane v Registrar of the Supreme Court of New South Wales (1981) 148 CLR 245, 258; Meissner v The Queen (1995) 184 CLR 132, 144 and R v Rogerson, Nowytager and Paltos (1992) 174 CLR 268, 278.
The deliberate commission of an act or omission which is in breach of an order will be sufficient to constitute contempt.[45] That is, the plaintiff is required to prove only that the accused was aware of the facts that made the relevant act or omission a breach of the order.[46]
[45]Advan Investments v Dean Gleeson Motor Sales [2003] VSC 201, [51].
[46]Commissioner for Consumer Protection v Armstrong (No 4) [2015] WASC 8, [31].
However, the intention with which the act was done will be highly relevant in determining the nature of the contempt and what penalty, if any, is to be imposed.[47]
[47]CFMEU v Grocon (n 36), [136], [138], [140]–[142] (citations omitted).
Consideration of penalty
The penalty for contempt may consist of fines, imprisonment or both.[48]
[48]Supreme Court (General Civil Procedure) Rules 2015 (Vic) r 75.11.
Where the breach of an order is casual, accidental or unintentional, the court may exercise discretion to impose no penalty.[49] Conversely, where the breach is contumacious, the contempt will be treated as criminal rather than civil.[50] Further, where contempt is considered criminal, a court may record a formal criminal conviction.[51] While a sentence of imprisonment is available in cases of civil contempt, it is rarely considered appropriate.[52]
[49]Australasian Meat Industry Employee’s Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98; Markisic v Commonwealth of Australia [2007] NSWCA 92; Advan Investments v Dean Gleeson Motor Sales [2003] VSC 201.
[50]See CFMEU v Grocon (n 36).
[51]Ibid, [173].
[52]Vaysman v Deckers Outdoor Corporation [2011] FCAFC 17 per Bromberg J at [178]; Jones v ACCC [2010] FCAFC 136, [36]; Langer v Australian Electoral Commission(No 2) (1996) 59 FCR 463.
If an alleged contempt is proven, it is not uncommon to adjourn proceedings to provide the contemnors with an opportunity to address the court on the question of penalty and whether a conviction should be recorded. It is accepted the court may defer any finding as to whether the contempt is criminal until after that penalty hearing.[53]
[53]See eg. Chan v Chen (No 3) [2007] VSC 52; and Deputy Commissioner of Taxation v Gashi & Anor (No 3) [2011] VSC 448.
Analysis and conclusions
Making and service of orders
I am satisfied the freezing orders at issue were made by the Court; and were appropriately served on both defendants as outlined above. This was not disputed by the defendants.
Clear, unambiguous and capable of compliance
I am also satisfied the terms of the orders are clear, unambiguous and capable of compliance.
The defendants’ knowledge of the terms
The plaintiff submits the defendants had knowledge of the terms of the freezing orders, and deliberately omitted to provide the information and documents required.
In support of this submission, in respect to the first freezing order, the plaintiff points to the following matters:
·the defendants have been on notice about the particulars of the information and documents sought, and later required by the order, to be produced since 4 June 2018, when the plaintiff first made its application for a freezing order;[54]
·the defendants instructed counsel to appear on their behalf at the hearing before Riordan J on 28 June 2019, at which time the first freezing order was made, and its requirements and time for compliance were discussed;[55]
·the order was served on the defendants as set out at paragraph [36] above;
·upon the defendants’ failure to comply with the first freezing order on 9 July 2018, the plaintiff contacted Mr Stevenson and served the first contempt summons on the defendants;[56]
·the defendants instructed Mr Stevenson to appear at numerous hearings in respect to the first contempt summons;
·on 13 August 2018, the defendants each provided an affidavit (in identical terms) purporting to provide some of the information required by the order, and there is nothing in these documents to suggest they were unaware of the terms of the order or that they could not comply with the terms of the order;[57]
·in his supplementary affidavit of the same day, Mr Bisognin stated his solicitor told him after the hearing on 11 July 2018 that he needed to finalise his affidavit;[58] and
·following the plaintiff’s assertion as to the inadequacy of the information produced, the defendants consented to the making of the second freezing order on 31 August 2018.
[54]Affidavit of Leonard Adrien Warren affirmed 10 July 2018, [4]–[17].
[55]Ibid, [18]–[19]; Transcript of Proceedings, Hera Project Pty Ltd (ACN 163 685 041) vs Bisognin, Gino Andrew & ors, (Supreme Court of Victoria, S CI 2018 02233), The Honourable Justice Riordan J, 28 June 2018, 4 – 27.
[56]Affidavit of Leonard Adrien Warren affirmed 10 July 2018, [27] and 13 August 2018, [6].
[57]Affidavit of Gino Bisognin sworn 13 August 2018; and Affidavit of Leah Joan Bisognin sworn 13 August 2018; Transcript 30 January 2019, 117.
[58]Supplementary Affidavit of Gino Bisognin sworn 13 August 2018, [9].
In submitting the defendants had knowledge of the second freezing order, the plaintiff further points to the following matters:
·the second freezing order was made by consent on 31 August 2018, in circumstances where the defendants were on notice that the plaintiff contended they had failed to comply with the first freezing order;[59]
·the order was served on the defendants as set out at paragraph [37] above;
·on 17 September 2018, Mr Stevenson informed the Court that the defendants had prepared a draft affidavit and some of the documents to be produced in response to the order;[60]
·between 26 September – 3 October 2018, parties negotiated an extension of the compliance date of the second freezing order to 5 October 2018;[61]
·on 5 October 2018, Mr Stevenson informed the Court the defendants had prepared a draft affidavit that would be sworn and provided that day, and agreed to provide his own file in respect to the 1A Adrian Street property;[62]
·the defendants each provided an affidavit (in identical terms) purporting to provide some of the information required by the order, which appear to have been sworn on 5 October 2018 but was not provided to the plaintiff until 8 October 2018;[63] and
·following the defendants’ failure to comply with the second freezing order, on 9 October 2018 the plaintiff served the second contempt summons.[64]
[59]Affidavit of Leonard Adrian Warren affirmed 13 August 2018, [6].
[60]Transcript of Champion J, 17 September 2018, 7.
[61]Affidavits of Gareth Andrew James Kerr sworn 9 October 2018, [16]–[25].
[62]Transcript of Champion J, 5 October 2018, 5-10.
[63]Affidavits of Gareth Andrew James Kerr sworn 9 October 2018, [27].
[64]Affidavit of Gareth Andrew James Kerr sworn 18 October 2019, [3], Exhibit GK 1.
I accept each of these factors reasonably establish the defendants had knowledge of the terms of both freezing orders. I also note my discussion of factors indicating the defendants had knowledge of the contempt proceedings at [55]–[58] and [61] above, which informed my decision to proceed with this hearing in the absence of the defendants. Further, no submission was made on behalf of the defendants at any stage in any of the proceedings to suggest they did not have knowledge of the terms of the orders.
However, I note there is some limited material that raises some concern as to the extent and nature of the defendants’ knowledge of the orders. In his supplementary affidavit sworn on 13 August 2018, Mr Bisognin apologised to the Court for the delay in providing material in respect of the freezing orders, wherein he explained:
2.I am currently trying to do most of the work on these court matters for my wife and she has currently entrusted me to deal with things.
…
4.I am currently having severe difficulties in coping with my current predicament and I am seeking treatment and assistance from my psychologist…
…
7.I am very concerned that I do not mislead that court and I am finding this whole procedure very difficult to understand.
8.I had originally thought that my trustee in bankruptcy would look after all these court matters once I declared bankruptcy, but I now understand that the freezing order is separate from the bankruptcy and that in any case it will operate until my trustee is actually appointed.
9.Although my solicitor previously advised me that I needed to finalise my affidavit immediately after the last court appearance and I should have understood, it did not appear as if it sunk in as it should have and ordinarily would have.
10.I can only put this down to my current mental health problems which, while largely attributable to this court case, are not in any way limited to the effects on this court case. There was certainly no intentional delay on my part and I again apologise for this delay.
11.So far as I am aware, I have now fully complied with all requirements.
I also note a letter prepared by Suzanne Carmichael of Ipsych Psychology Service in respect to Mrs Bisognin on 21 September 2018, which states:
She is stressed, confused and has trouble making sense of the complexities of current and historical legal proceedings, continuing to leave most legal correspondence to her husband, Gino.
It has been brought to her attention that she was required to appear in court for criminal proceedings. She states that she has no knowledge of this and still has no understanding of what the charges are or the seriousness of the situation she finds herself in.[65]
[65]Affidavit of Craig Stevenson affirmed 10 October 2018, Exhibit A1.
While this letter, and another provided in respect to Mr Bisognin, do not comply with the Court’s expectations in respect of expert evidence, they are some of the only material explaining the defendants’ conduct and state of mind. This material is not sufficient to persuade me the defendants did not have the requisite knowledge of the orders. As discussed at [76]–[77] above, for contempt to be proven, the defendants need not have intended to deliberately breach the orders. Rather, it need only be proven that they were aware of the facts that made the relevant omission a breach. On the material before me, I am satisfied there is significant evidence to establish both defendants had knowledge of the terms of the freezing orders, in addition to knowledge of the subsequent orders relating to the contempt proceedings.
The evidence may, however, go some way in informing any future consideration as to whether the contempt (if established) was unintentional, wilful or contumacious. This, in turn, will be relevant to penalty. I take this opportunity to note some of this evidence is somewhat at odds with Mr Stevenson’s assertions that he fully informed the defendants as to the nature of the proceedings. It also indicates the defendants may have distinct positions that suggest they ought be represented separately in any future proceedings.
Breach of terms of the freezing orders
Was there compliance with the first and second freezing orders?
The plaintiff submits the defendants failed to provide the information or documents required by paragraphs 6(a)–(c) of the first freezing order by 9 July 2019, and continue to be non-compliant with all but paragraph 6(a)(i) of those orders.
The plaintiff also submits the defendants failed to provide the information or documents required by paragraphs 1–3 of the second freezing order by 14 September, and then 5 October 2018.[66] The plaintiff concedes partial attempted compliance with the orders thereafter, but submits the defendants remain non-compliant with paragraph 1.[67]
[66]Affidavit of Gareth Andrew James Kerr sworn on 9 October 2018.
[67]Ibid; Plaintiff, ‘Plaintiff’s Submissions’, Hera Project Pty Ltd v Bisognin, S CI 2018 02233, 30 January 2019 (‘Plaintiff’s Submissions’); Transcript of Champion J, 30 January 2019, 79.
In support of their submissions, the plaintiff points to multiple occasions in the course of proceedings when both Riordan J and I remarked as to the defendants’ failure to comply with the orders, as well as additional orders made that required the defendants to provide affidavits and evidence as to why they had not complied.[68]
Purported compliance and purging
[68]Orders of the Honourable Justice Riordan in Hera Project Pty Ltd v Bisognin (Supreme Court of Victoria, S CI 2018 02233), 16 July 2018.
The following material provided by the defendants purports to comply with the freezing orders:
(a) the affidavits of each of the defendants, sworn on 13 August 2018 in identical terms, which set out some detail as to their assets and legal actions through which they hoped to retrieve assets, attached a copy of the Loan Agreement between the defendants and Craig Charter Investments Pty Ltd, and stated:
9.In relation to the settlement proceeds paid by Hera Project Pty Ltd, this money was all paid as follows:
(a)to my previous solicitors, on account of previous legal fees incurred
(b)to my current solicitors, on account of fees incurred and expected to be incurred
(c)to Craig Charter Investments Pty Ltd on account of a short-term loan that I owed
10.In relation to the funds paid by Glowing Opal to Craig Charter Investments Pty Ltd, I received a small deposit in cash of $1,000, which I spent myself. I paid my conveyancing expenses to my solicitor in the amount of $5,000. The balance of the proceeds ($2,994,000) were paid to Craig Charter Investments for monies owed pursuant to the same short-term loan I had previously partly repaid.
(b) the supplementary affidavit of Mr Bisognin, sworn on 13 August 2018, as outlined above;
(c) the affidavits of each of the defendants, sworn on 5 October 2018 in identical terms, which state they do not have copies of the documents set out in sub-paragraphs 2(a)–(f) of the second freezing order, and that they have provided all other documents they have in their possession; and
(d) two emails from Mr Stevenson on 15 October 2019, attaching a copy of his conveyancing file for the 1A Adrian Street, including a copy of the transfer of sale of land from the defendants to Glowing Opal Pty Ltd.[69]
[69]Affidavit of Gareth Andrew James Kerr sworn 18 October 2018, Exhibit GK1.
The plaintiff accepts paragraph 6(a)(i) of the first freezing order has now been complied with, though notes this was months after the compliance date of 9 July 2018.[70]
[70]Transcript of Champion J, 30 January 2019, 119.
In respect to the defendants’ statements that they do not have the information in sub-paragraphs 2(a)–(f) of the second freezing order, the plaintiff’s representative noted some scepticism, but stated the matter could not be examined as the defendants had failed to appear at any subsequent hearings. The plaintiff seems not to have pursued its charge of continuing contempt on the basis of breach of these terms.[71]
[71]Ibid, 79.
The plaintiff also does not pursue contempt on the basis of breach of sub-paragraphs 2(g)–(i), conceding these documents were provided by Mr Stevenson in his email of 15 October 2019.
However, it is contended these affidavits and emails fail to satisfy any further relevant terms of the freezing orders, of which both defendants remain in breach.[72] In particular, it was argued:
[72]Affidavit of Leonard Adrian Warren affirmed 31 August 2018, [6]–[8], Exhibit ‘LAW 12’ Letter from Leonard Adrian Warren to Craig Stevenson dated 29 August 2018.
·paragraphs 9 and 10 of the affidavits of 13 August 2018 are ‘a very non-compliant response’ to what was required by paragraph 6(a)(ii) of the first freezing order, providing no detail in respect to the manner in which the proceeds of sale of the 1A Adrian Street property were paid, dispersed or otherwise used;[73]
·while the documents produced by Mr Stevenson on 15 October 2019 constituted compliance with paragraphs 2(g)–(i) of the second freezing order, they were not all the documents required by paragraph 6(c) of the first order;[74]
·none of the information required by paragraph 6(a)(iii) of the first freezing order or paragraph 1 of the second freezing order has ever been provided; and
·the defendants failed to provide an affidavit confirming the matters set out in paragraph 6(a), as required by paragraph 6(b) of the first freezing order.
Mr Stevenson’s submissions as to compliance and admissions
[73]Transcript of Champion J, 30 January 2019, 66–67, 119–121.
[74]Plaintiff’s Submissions (n 67).
At the hearing on 17 September 2018, Mr Stevenson submitted the first freezing order had been complied with, suggesting the first contempt had been purged.[75] Despite this, Mr Stevenson also stated he had instructions to admit the contempt as follows:
MR STEVENSON: Yes. I can indicate that the actual contempt is admitted. There is not an admission that it was an intentional contempt without the …
HIS HONOUR: Well, then you’d need to tell me what the elements of contempt are, and indeed address the question of whether or not a contempt can be committed in circumstances where there is no intent. What’s your submission about that?
MR STEVENSON: Your Honour, the four elements are indeed satisfied.[76]
[75]Transcript of Champion J, 17 September 2018, 6–7.
[76]Ibid, 4.
Pressed further, Mr Stevenson indicated:
MR STEVENSON: I do have instructions to admit the contempt.
HIS HONOUR: Are those instructions in writing?
MR STEVENSON: They are not in writing, Your Honour.
HIS HONOUR: Well, how do you want to proceed? Are you .. comfortable in those circumstances where you don't have instructions in writing to admit the contempt to proceed on the basis of what you’ve been told?
MR STEVENSON: Given the seriousness of the … charge and given that my friend in discussions will be … pressing jail time. And there is one further issue which he did raise with me this morning … which I don't have instructions on, is the orders have since been complied with [in July – about a month ago] but on Friday, His Honour has made further orders.[77]
[77]Ibid, 6.
I also note that the plaintiff’s solicitor deposed that, on 18 October 2018, he had telephone communication with Mr Stevenson, who stated the defendants would attend the hearing the following day, and that he was hopeful the contempt would be admitted, though he was still obtaining instructions.[78]
[78]Affidavit of Leonard Adrian Warren affirmed 16 November 2018, [13]–[14].
At the hearing on 19 October 2018, while Mr Stevenson again asserted ‘there certainly was some form of compliance’,[79] the following exchange also occurred:
[79]Transcript of Champion J, 19 October 2018, 33, line 23.
MR STEVENSON: Yes, it is. I should indicate, the facts of the matter are going to be not disputed, in the sense that Mr Warren – he has some affidavits. There will be some argument legally as to … the relevance of material after the summons, as to whether that goes to penalty or actually offence. But the facts will be undisputed. There will be no cross-examination or anything like that. Apart from what’s been discussed.
And the other issue was, with my clients not being here, particularly in light of what’s happened since the last adjournment date – which I note is different to what I had intended at the last adjournment date – I don’t feel comfortable running the trial without my clients being present, in those circumstances because even today – it may very well be that I was able to procure a guilty plea today to save the court’s time but with the client not here … I did speak to them yesterday and that wasn’t the case.
HIS HONOUR: What wasn’t the case?
MR STEVENSON: They weren’t going to pleading guilty to the charges today.
HIS HONOUR: As of yesterday, they were instructing you ---
MR STEVENSON: As of yesterday ---
HIS HONOUR: Just a moment. As of yesterday, they were instructing you that this case would be defended and contested.
MR STEVENSON: They were instructing me to seek the adjournment but they were also instructing me that this case would be contented [sic] in relation to Leah. In relation to Gino, as of yesterday, he had instructed me that he’s likely to plead guilty but I don’t feel comfortable with – because of the reasons
I’ve ---HIS HONOUR: Well, I thought you just told me a few moments ago that there would be no dispute as to the facts.
MR STEVENSON: There won’t be any dispute as to the facts, Your Honour. That’s correct.
HIS HONOUR: So … what’s the nature of the defence?
MR STEVENSON: The nature of the defence will be in relation to Gino depending on the – or in relation to both parties, the capacity to understand and whether or not it’s a casual issue. It will be whether or not it’s a casual – casual non-compliance, or whether or not it’s an intentional non-compliance.[80]
[80]Transcript of Champion J, 19 October 2018, 9-11.
These exchanges, the latter occurring on a date when the matter was listed for trial, indicate admissions would have been made on behalf of the defendants, or at least on the behalf of Mr Bisognin, that he had breached relevant orders. While Mr Stevenson asserts some level of compliance, presumably arising from the affidavits provided in August 2018, he did not point with precision to supporting evidence. Mr Stevenson’s submissions in respect to Mrs Bisognin are even more ambiguous, and clouded by the question as to whether it was proper of him to represent both defendants.
The plaintiff points to Mr Stevenson’s indications that one or both of the defendants had admitted or intended to admit contempt, in support of their allegations. In light of the above excerpts of transcript, and in circumstances where the defendants failed to attend Court throughout the proceedings and were not represented at the final hearing, there is difficulty in determining the weight to be attributed to Mr Stevenson’s statements. Ultimately, I am not confident Mr Stevenson was able to obtain and communicate accurate instructions from each of the defendants.
Nonetheless, the strength of evidence leaves me satisfied both defendants have breached paragraph 6 of the first freezing order and paragraphs 1–3 of the second freezing order, by failing to provide the material by the required date. I further find the defendants continue to be in non-compliance with paragraphs 6(a)(ii) – 6(c) of the first freezing order and paragraph 1 of the second freezing order.
Conclusion
Having considered the submissions and evidence in this matter, I am satisfied that the plaintiff has proved beyond reasonable doubt each of the elements of contempt in respect to the charges set out in the first and second contempt summonses.
I am satisfied the freezing orders made by Riordan J were clear, unambiguous and capable of compliance; that each relevant order was served on each defendant; that each defendant had knowledge of the terms of the orders; and that each defendant failed to comply with the relevant requirements of the orders. I further note both defendants continue to be in contempt in respect to both charges.
Future conduct of proceedings
Having found the charges of contempt proven, I will defer my determination of penalty. This is to provide the defendants with the opportunity to review this judgment and appear before me to make submissions as to the penalty to be imposed.
In circumstances where the defendants failed to appear for the hearing and are no longer represented, I also defer my decision on the nature of the contempt until after the penalty hearing. Procedural fairness requires that the contemnors be put on notice at an early stage of proceedings of the risk of a finding of criminal contempt.[81] It would be reasonable to suggest, in light of the plaintiff’s claims and the procedural steps outlined above, that such notice has been afforded to the defendants. Nonetheless, at this stage, I simply note it is open for me to find there has been criminal contempt in this matter.
[81]CFMEU v Grocon (n 36), [302].
I now invite both parties to make submissions as to:
(a) whether the acts constituting contempt were technical, wilful or contumacious;
(b) whether these proceedings serve a punitive purpose to punish past breach(es), or a remedial purpose to coerce obedience with the orders; and
(c) taking these matters into account, what penalty, if any, should be imposed.
The plaintiff is to file and serve any submissions on which it intends to rely upon in relation to the matters set out in [111] by 4.00pm on 2 August 2019, and the defendants are to each file and serve any submissions in reply by 4.00pm on 9 August 2019. I will list the matter for a hearing on penalty at 9.00am on 16 August 2019.
Annexure 1:
Annexure 2:
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