Hinde and Hinde
[2010] FamCA 583
•9 July 2010
FAMILY COURT OF AUSTRALIA
| HINDE & HINDE | [2010] FamCA 583 |
| FAMILY LAW – CONTEMPT – Allegations of six counts of contempt – Whether they constitute a flagrant challenge to the authority of the Court – Where husband mortgaged and attempted to sell property from the matrimonial asset pool – Where husband failed to provide entry to the safe – Where husband failed to pay mortgage instalments and indemnify the wife – Where there is insufficient evidence to prove the husband failed to pay outgoings – Where husband failed to provide certificate of insurance – Where husband failed to maintain property in fit and proper state for sale – Five of the six counts of contempt proven beyond reasonable doubt |
| APPLICANT: | Ms Hinde |
| RESPONDENT: | Mr Hinde |
| FILE NUMBER: | BRC | 5920 | of | 2008 |
| DATE DELIVERED: | 9 July 2010 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | Barry J |
| HEARING DATE: | 25 June 2010 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr Grimshaw of Counsel appearing for the Applicant Wife |
| SOLICITORS FOR THE APPLICANT: | Hogan Stanton Lawyers |
| COUNSEL FOR THE RESPONDENT: | The Respondent Husband appearing in person |
Orders
WHEREAS the Court has found MR HINDE of [address] in the State of Queensland has contravened an Order under the Family LawAct namely the Order of Carmody J of 11 December 2006 by:
i.contrary to the terms of Order 4 contracting to sell his property at … Tasmania and such conduct involved a flagrant challenge to the authority of the Court and thereby constituted a contempt;
AND has contravened an order under the Family Law Act namely the Order of Carmody J of 4 March 2008:
ii.in that contrary to Order 2(c)(i) of such order he failed to maintain the property located at A, Queensland in a fit and proper state for sale and such conduct involved a flagrant challenge to the authority of the Court and thereby constituted a contempt.
The Respondent, MR HINDE, is sentenced to a term of four (4) months imprisonment on each count, such terms of imprisonment to be served concurrently.
In the event the Respondent is able to pay the Applicant’s costs and outgoings in accordance with the declaration of Carmody J of 25 June 2008 together with interest accrued since that time and any additional costs as may be ordered arising out of the current proceedings, the Respondent may be released forthwith after serving a term of two (2) months imprisonment.
A Certificate from a Registrar of this Court that the said amount has been paid shall be deemed sufficient proof to order the release from further imprisonment.
WHEREAS the Court has found the Respondent has contravened an Order under the Family Law Act namely the Order of 11 December 2006 by:
i.contrary to the terms of Order 8(b) of the said Order the Respondent refused to disclose the combination of the safe on the premises located at A in the State of Queensland and such conduct involved a flagrant challenge to the authority of the Court.
The Respondent, MR HINDE, is sentenced to a term of one (1) month’s imprisonment on such count, such term of imprisonment to be served concurrently with other terms of imprisonment imposed on this date pursuant to paragraph 1 hereof.
Sentence in relation to a breach of Order 3(a) of the Order made 4 March 2008 (count 3) and breach of Order 3(c) of the Order made 4 March 2008 is adjourned for a period of twelve (12) months.
Count 4 of the Application for Contempt filed 4 December 2009 is dismissed.
IT IS NOTED that publication of this judgment under the pseudonym Hinde and Hinde is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC5920/2008
| MS HINDE |
Applicant
And
| MR HINDE |
Respondent
REASONS FOR JUDGMENT
On the 25 January 2008 for reasons he gave at the time Carmody J made orders for property settlement as between the Applicant and the Respondent.
The Husband during the course of the marriage acquired two properties which he registered in his sole name being a property at A in Brisbane (the matrimonial home) and a farming property in the State of Tasmania.
Shortly after separation in 2004 the Husband agreed to deposit the proceeds from any sale of the A property into his solicitor’s trust account on account of future litigation.
Coinciding with the time the Wife instituted proceedings for property settlement the Husband without notice to the Wife mortgaged both properties in an amount in excess of $400,000 and paid the bulk of the funds to sponsor a third party in his endeavours as a sportsman.
Carmody J found there was no commercial merit from the Respondent’s point of view in paying such sum to the third party. On any view it was bloody minded conduct by the Husband to divest himself of assets to which the Wife may reasonably have made claim.
At paragraphs 12 to 14 of his reasons for judgment Carmody J noted:
“12.The Wife’s lawyers wrote to the Husband’s solicitors on
7 February 2006 foreshadowing an application for property settlement (exhibit 2). He denied receipt. The Wife’s form 1 was filed on 26 March 2006. Within a fortnight the Husband had mortgaged to the ‘hilt’ ($488,000) and transferred $430,836 in ‘sponsorship monies’ to the Second Respondent in two instalments. He used the balance of $57,173 to buy the Toyota truck for $20,000 and for self support.13.The Husband’s actions dramatically reduced the equity in the properties virtually extinguishing the Wife’s unascertained share in the process.
14.She did not become aware of the suspect transactions until
21 April 2006.”At paragraph 56 of his reasons his Honour noted:
“56.The Husband denied being served with the Wife’s form 1 before borrowing and transferring the money to the Second Respondent but was unable to say when he actually was. However an unchallenged affidavit of a process server deposes to personal service of the Wife’s application on the Husband on 30 March 2006. I have no reason not to accept that to be true.”
It is clear from a reading of his Honour’s reasons that he formed a poor view of the Husband’s credibility. At paragraph 58 he noted:
“58.I also find the contention on behalf of the Wife that on any objective view the combined strength of the totality of the available direct and circumstantial evidence shows that the Husband probably embarked on a course of conduct with the intention of defeating any property settlement order in her favour. Incurring the mortgage debts and entering into a sponsorship deal were integral and indispensible steps in that course of conduct.”
At paragraphs 59 and 60 his Honour found:
“59.The overwhelming bulk of the Husband’s evidence was elusive, evasive, unreliable and entirely unsatisfactory, especially about important events and when they occurred. He was particularly obscure about his receipt of exhibit 2. He ultimately conceded knowing that the Wife was at least talking about starting proceedings in February 2006.
60.It offends common sense to conclude in these circumstances that the Husband – an experienced businessman – honestly believed – even unreasonably – that the $430,000 he gave to the Second Respondent was a good business decision for sound investment in his economic or trading future.”
His Honour’s findings in the property settlement proceedings were of course made on the civil standard of proof.
On 4 December 2009 the Wife filed an application alleging six counts of contempt. These counts are in the following terms:
“1.Date: February 2008 Time: unknown Place: Brisbane/Tasmania
In breach of order 4 made 11 December 2006 by His Honour Carmody J in or around February 2008 the respondent husband contracted to sell his property at […], Tasmania.
2. Date: 15/12/06 Time: approx 10am Place: [A], Brisbane
In breach of order 8(b) made 11 December 2006 by his Honour Carmody J the respondent husband refused to disclose the combination of the safe on the premises located at [A], Queensland.
3. Date: various Time: various Place: Brisbane, Tasmania
In breach of order 3(a) made 4 March 2008 the respondent husband:
1.failed to pay as and when due all payments in respect of the mortgage given by the respondent husband to Perpetual Limited in respect of the property located at [A], Queensland; and
2.failed to pay as and when due all payments in respect of the mortgage given by the respondent husband to the Commonwealth Bank of Australia in respect of the property located at […], Tasmania;
3.failed to indemnify, and to continue to indemnify, the applicant wife in respect of the mortgages.
4. Date: various Time: various Place: Brisbane, Tasmania
In breach of order 3(b) made 4 March 2008 the respondent husband:
1.failed to pay as and when due all outgoings in respect of the property located at:
1.1[A], Queensland; and
1.2[…], Tasmania;
2.failed to indemnify, and to continue to indemnify, the applicant wife in respect of the outgoings.
5. Date: 6/3/08 Time: 5:00pm Place: Brisbane
In breach of order 3(c) made 4 March 2008 the respondent husband failed to insure, or failed to provide the applicant wife with a certified copy of certificates of insurance for the property located at:
1.[A], Queensland; and
2.[…], Tasmania.
6.Date 4/3/08 – April 08 Time: various Place: [A], Brisbane
In breach of order 2(c)(i) made 4 March 2008 the respondent husband:
1.failed to maintain the property located at [A], Queensland in a fit and proper state for sale; and
2.intentionally caused damage to that property.”
In the course of the hearing before me on 25 June 2010 the counts of contempt were amended by the addition of the words, that each count “involved a flagrant challenge to the authority of the court.”
In relation to each count the Husband disputes that his conduct constituted a contempt of court under the terms of s112AP.
The orders said to have been breached were in the following terms:
Order of 11 December 2006:
“…
(4)The Husband be restrained and injunction hereby granted restraining the husband, his servants and/or his agents from:
(a)selling, leasing, mortgaging, charging, encumbering or otherwise dealing with all or any of his interest in the following properties
(i)[A] in the Stat of Queensland bearing real property description Lot […] on RP […];
(ii)[…] in the State of Tasmania bearing real property description Lot […] on SP […];
(b)withdrawing or causing to be withdrawn or transferring or causing to be transferred any sum standing to the credit of any account in the name of the husband, either in his own name or jointly with another person, except for a sum not exceeding $300.00 in any seven (7) period (sic) for the husband’s support or to maintain the current repayments in relation to any registered mortgage.
…
(8)An injunction be granted by way of a mandatory injunction requiring the Husband, his servants and agents:
(a)to permit entry to and a reasonable search undertaken of the premises located at [A], by the persons serving and executing this order for the purpose of giving effect to this order, such search to be undertaken between the hours of 8.00 am and 6.00 pm;
(b)to disclose the combination of a safe or otherwise provide entry to the safe located on the said premises and that in the event that the Husband fails to provide the combination or entry to the safe, the person executing this order be authorised to remove the safe and/or engage a qualified locksmith to open the safe.
…”
Order of 4 March 2008:
“…
(2)That the property situate at [A] in the State of Queensland and more particularly described as Lot […] on RP […] contained in Certificate of Title Reference […] (“the former matrimonial home”) and the property situate at […], Tasmania and more particularly described as Lot […] on Sealed Plan […] contained in Certificate of Title Volume […] Folio […] (“the Tasmanian property”) be sold on the following terms and conditions:
(a)that the wife be appointed trustee for sale (“the trustee”) of the former matrimonial home and the Tasmanian property (“the properties”);
(b)that the Respondent Husband vacate and/or provide vacant possession of the properties no longer than twenty-eight (28) days from the date of these Orders and that upon vacating the properties the Husband deliver to the solicitors for wife (sic) all keys and remote entry devices for the properties;
(c)pending vacating the properties:
(i)the husband maintain the properties in a fit and proper state for sale, and
(ii)permit any agent or auctioneer to enter onto the properties for the purpose of giving effect to these orders;
(d)that the said properties be placed with an auctioneer in each locality for the sale by auction at the earliest possible date;
(e)that the trustee request each auctioneer to recommend a reserve price to be placed on each property for the purpose of the auction sale and accept such recommended reserve price;
(f)that the trustee negotiate with the highest bidder of each property in the event that the reserve price is not reached;
(g)that the trustee accept the advice of each auctioneer as to the acceptance of a price less than the reserve price.
(3)That pending the settlement of the sale of the properties the Respondent Husband shall:
(a)pay as and when due all payments in respect of the mortgage (dealing number […]) given by the Respondent Husband to Perpetual Limited in respect of the former matrimonial home and mortgage (dealing number […]) given by the Respondent Husband to the Commonwealth Bank of Australia in respect of the Tasmanian property and shall indemnify and continue to indemnify the Applicant Wife in respect thereof;
(b)pay as and when due all outgoings in respect of the properties including but not limited to all municipal rates assessments, taxes, insurances, statutory charges, land tax and the like, whether incurred prior to or subsequent to the date of the these (sic) Orders, and shall indemnify and continue to indemnify the Applicant Wife in relation thereof;
(c)at his sole cost and expense forthwith, and no later than 48 hours after the pronouncement of the orders, obtain and keep in full force and effect in the name of the trustee all mortgage, house, public risk and other insurances in relation to the properties and forthwith provide the Applicant Wife’s solicitors with a certificate copy of each insurance;
(d)the Respondent Husband indemnifies the Applicant Wife against all actions, claims, demands, losses, damages, costs and expenses which the Applicant Wife may sustain or incur as a result of any loss, damage or injury from any cause to the inside or outside of the said properties or contributed to by the negligent act or omissions, wilful damage or default of the Respondent Husband or any servant or agent, licensee, invitee, subtenant or other person; and
(e)that the mortgagees for the properties be authorised by the terms of these orders to provide to the trustee any and all information and documentation in relation to the loan, mortgage or security properties as may be required from time to time including but not limited to any loan statements, as to the current status of the mortgages and that the mortgagees be ordered to forthwith notify the trustee in the event that any action is proposed to be taken by the mortgagees in relation to non payment or other default in relation to the mortgages for the properties by the husband.”
Material Relied On By The Applicant
The following material was relied on by the Applicant:
·application for contempt filed 4 December 2009;
·affidavit of the Applicant wife filed 4 December 2009;
·affidavit of Hayley Ubank, solicitor for the Applicant, filed 4 December 2009;
·affidavit of Hayley Ubank sworn 24 June 2010, filed by leave;
·
affidavit of Michelle Hogan, solicitor for the Applicant, filed
4 December 2009;
·affidavit of Michelle Hogan, affirmed 24 June 2010, filed by leave;
·affidavit of Anthony Phillip Mihal, solicitor of Tasmania, filed 22 April 2010.
The Respondent did not seek to file any material.
In written submissions by Counsel for the Applicant at paragraphs 2 and 3 he notes:
“2.The onus of proving contempt rests upon the applicant and all elements of the offence must be established beyond a reasonable doubt.
3.The respondent husband must have knowledge of the terms of the order breached and the meaning of those orders. The breach of those orders must be a deliberate act by the contemnor as distinct from a breach through accident or inadvertence. It is not necessary to prove that a contemnor wilfully intended to contravene an order of the court, but that the act or omission that contravened those orders was a wilful act or omission.”
[footnotes omitted]
At the close of the Applicant’s case I was endeavouring to explain to the Respondent the options available to him to either remain silent or to adduce evidence. In explaining the term “prima facie case” I made some reference to the standard of proof to that point in time being on the balance of probabilities. Upon reflection this was not a correct statement. At all times I have to be satisfied of the facts beyond a reasonable doubt.
Count 1
Mr Mihal is a solicitor practising in Tasmania. The Applicant subpoenaed his file in relation to a conveyancing transaction whereby the Respondent as the vendor contracted to sell the Tasmanian property for $180,000 by signing a contract for sale on 17 December 2007.
Mr Mihal provided an affidavit to which he attached the relevant contract of sale and other documents from his file. At an earlier hearing on 29 April 2010 Mr Mihal had withheld his file with other documents in it on the basis that the documents therein were the subject of legal professional privilege. I directed Mr Mihal to forward his conveyancing file to the court and I would rule on the claim for privilege.
By the time the matter came on for the hearing on 25 June 2010 I had not had the opportunity to deliver a decision on this issue. Counsel for the Applicant elected to proceed on the documents already produced from the file as annexed to Mr Mihal’s affidavit. Mr Mihal was not required as a witness for cross examination. His evidence is therefore before the court on an unchallenged basis.
The trial before Justice Carmody had been held on 20 and 21 September 2007. The First Respondent was not legally represented at that hearing. His Honour delivered his reasons for judgment on 25 January 2008. It appears that at that time he directed the parties’ lawyers to confer and email a draft consent minute or competing proposals by the 6 February 2008.
The final orders did not issue until 4 March 2008.
The contract of sale appears to be dated the 31 January 2008 notwithstanding the Husband had signed it in December 2007.
After I ruled a prima facie case had been established in relation to each count the Respondent elected to give evidence.
In the course of giving his evidence the explanation advanced by the Respondent in response to this count of contempt was that he had forgotten the terms of the orders of 11 December 2006.
I categorically reject this explanation.
In written submissions by Counsel for the Applicant at paragraphs 11, 12 and 13 he notes:
“11.The entry into such a contract, even if conditional upon the buyers obtaining finance and being satisfied with inspections etc, imposes obligations upon the respondent husband in respect of the property. In the event the buyers were unaware of the relevant orders, the husband could be required through specific performance to deliver the property to the buyers and the buyers could be entitled to lodge a caveat.
12.The execution of the contract of sale therefore amounts to the respondent husband “otherwise dealing with his interest” within the meaning of the orders and to the potential detriment of the applicant wife.
13.The orders of 11 December 2006 were clear on their face, easily understood and the contract of sale was entered into in flagrant breach of those orders.”
I accept the force and accuracy of the submissions in those terms.
Counsel referred to a decision of O’Reilly J in Winter v Winter [2010] FamCA 282 delivered on 5 March 2010. The question for her Honour in those proceedings was whether assets offered as security in Supreme Court proceedings constituted a dealing with the assets contrary to the terms of an order of this court. I do not find this decision to be relevant to the present matter.
The terms of the order of 11 December 2006 clearly restrained the Respondent from forbade selling the property or otherwise dealing with it. By entering into the contract of sale the Husband sold the property notwithstanding the contract was subject to finance.
A caveat had been lodged on the property. Mr Mihal was made aware of the orders of the court and the sale was subsequently aborted. I find that the conduct of the Husband in contracting to sell the property at the time he did and in the circumstances he did, constituted a flagrant challenge to the authority of the court.
I find this count of contempt established beyond a reasonable doubt.
Count 2
In his written submissions on this count, Counsel for the Applicant notes:
“14.The order dated 11 December 2006 was personally served on the respondent husband on 15 December 2006.
15.Order 8(b) required the respondent husband to disclose the combination of a safe on the premises at the [A] property or to provide entry to that safe.
16.The respondent husband failed to provide entry to the safe and a locksmith had to be sent for to open the safe.”
[footnotes not included]
The evidence to support these submissions is contained in the affidavit of
Ms Hogan filed 4 December 2009.
Counsel had in two passages in his written submissions asserted that the safe contained documents that led to the Applicant Wife discovering the payments to the third party. At the commencement of the hearing he sought for the second sentence of paragraph 16 to be deleted as well as the final sentence of paragraph 36 of his submissions.
There is no evidence in the affidavits relied on which would support a submission as to the contents of the safe. The Husband obviously did not hear or did not understand the amendment to the submissions and endeavoured to make great play of the falsity of the deleted submissions.
In the circumstances of this case where an order had been made in these terms, I find the Husband’s failure to comply with the terms of the order a flagrant challenge to the authority of the court. The Husband’s defence to this claim was that the Wife well knew the combination to the safe. The Wife denied this was the case.
I found the Husband not to be a witness of truth. Regardless of whether the Wife knew the combination of the safe the order required the Husband to disclose the combination of the safe and clearly he failed to do so. This necessitated a locksmith being engaged to open the safe. The rhetorical question could be asked - why would the Wife go to the expense of engaging a locksmith if she knew the combination of the safe?
I am prepared to find beyond a reasonable doubt that the Husband’s conduct constituted a flagrant challenge to the authority of the court and as such his conduct amounted to a contempt of court.
Count 3
In written submissions Counsel for the Applicant notes:
“18.By order 3(a) made 4 March 2008 (and amended on 6 May 2008) the respondent husband was ordered to pay as and when due all monies in respect of the mortgages of the Tasmanian property and the [A] property. Order 3(a) also required the respondent husband to indemnify the applicant wife in respect of all payments in respect of the two mortgages.
19.The respondent husband failed to pay as and when due all monies in respect of the [A] property and the Tasmanian property and both mortgages.
20.The respondent husband failed to indemnify the applicant wife in respect of the defaults on the mortgages of the Tasmanian and [A] properties.”
[footnotes not included]
The order of the 6 May 2008 provided for the Wife to be at liberty to sell the respective properties by private treaty or auction. The order did not replicate the order of 4 March 2008 but simply made an amendment to same as to the method by which the properties could be sold.
At paragraph 61 of his reasons for judgment of the 25 January 2008 Carmody J observed:
“61.The only circumstance I find curiously at odds with guilty or dishonest motive is the fact that the Husband appears to be keeping up the mortgage payments and thereby increasing the equity of redemption.”
In considering this count of contempt and counts 4 and 5 Counsel quite properly drew my attention to a recent decision of Jacobova v Stein [2009] FamCA 1105, a decision delivered on 29 July 2009 by Bennett J sitting in the Family Court in Melbourne.
Her Honour was dealing with an order requiring the Husband to pay half of all tuition fees and charges for the subject child’s schooling. The amount involved was $10,250. The Husband had made no payments of any kind. The Wife’s evidence was that the Husband had given evidence at the Less Adversarial Trial hearing before her Honour that prior to the resumption of the hearing he would pay the arrears owing under the existing order. As it transpired he did not pay the arrears but was declared bankrupt. His liabilities exceeded his assets by more than $500,000.
It is not clear from her Honour’s reasons whether he was declared bankrupt on a creditor’s petition or on his own petition. At the time of the hearing the amount owing was almost $15,000. Her Honour observed there was no evidence adduced by the Applicant Wife that the Husband had the “capacity” or “wherewithall” to comply with the order.
At paragraphs 20, 21 and 23 of her reasons her Honour noted:
“20.The Wife argued that the fact that the Husband consented to orders on the eighth day of a trial and then did not pay or seek to vary or discharge his obligation to do so constituted a flagrant challenge to the authority of the court. Furthermore the Wife argued that it cannot be the case that she could enter into final orders in November 2008 which brings to an end all matters in dispute between herself and the Husband and then, when the Husband fails to pay anything, she be required to prove that the Husband has had the wherewithall to comply.
21.It was submitted on behalf of the Wife that as a matter of social policy, litigants are entitled to place their trust in the authority of the court
…
23.Counsel for the Wife properly cited authorities which contain the principle that the notion of ‘flagrant challenge’ need not encompass an element of intention on the part of the contemnor: Fauna Holdings Pty Ltd & McGillivray & Ors & Mitchell [2000] FAMCA 313; Hay v Hay [1998] FAMCA 95; Witham v Holloway (1995) 183 CLR 525. I accept that this is a correct statement of the law. However, Counsel for the Wife sought to extrapolate the proposition to the extent that the Respondent’s capacity to make a payment in accordance with court orders is not relevant to my determination of whether there has been a ‘flagrant challenge’ to the authority of the court in this instance. She did concede that the Respondent’s capacity may be relevant to the question of sentencing but maintained that it is not relevant to a finding of flagrant challenge. I am not able to accept this submission.”
At paragraph 25 her Honour noted:
“25.I draw a distinction between the wilfulness of an act or omission and the wilfulness of contravening an order by the doing of an act or omission
…
However, in my view, the Applicant must prove to the requisite standard that the alleged contemnor’s failure to do the act, such as pay school fees, was a wilful act or omission.”
The evidence before Carmody J at paragraph 61 (previously quoted) was that as at September 2007 mortgage payments were being made.
Annexed to the affidavit of Hayley Ubank filed 4 December 2009 as annexure 5 is a notice of exercise of power of sale issued by Perpetual Limited to the Husband dated 22 February 2008. I appreciate that the order of Carmody J did not issue until 4 March 2008 but the order of 4 March 2008 imposed an ongoing commitment on the Husband to ensure that the mortgage instalments were paid. An inference could be drawn, and I am prepared to draw such inference from the terms of the notice of exercise of power of sale, that the Husband had ceased the mortgage instalments some time between the trial and the 22 February 2008.
I am not persuaded to follow Bennett J’s reasoning that the onus of establishing capacity to pay rested on the Applicant.
If a Respondent wishes to advance as a justification for non-compliance with an order that he/she did not have the capacity to pay the amount ordered, I would have thought the onus of establishing same (on the civil standard) was on the Respondent.
In any event I find the Respondent did have the capacity to pay the mortgage instalments. He had done so throughout 2007. He had, on his own evidence, permitted tenants who were complete strangers to him to reside on the Tasmanian property rent free. The Husband gave evidence that so far as the A property was concerned he expended considerable sums of money on repainting the roof and the outside of the house. Precisely when this was done was not made clear.
I have so little confidence in the Husband’s veracity I am not prepared to accept any evidence he gave unless corroborated. In relation to the non-payment of rent by the tenants on the Tasmanian property, they may well have been paying rent and the Husband is being deliberately misleading on that aspect. If he did not seek the payment of rent it adds to the wilfulness of his breach of the order impacting as it does on the veracity of his claim that he had no capacity to pay.
As some form of justification for non-compliance with the order to make the mortgage payments, the Husband relied on paragraph 4(b) of the order of
11 December 2006 (refer paragraph 14 above). I accept that paragraph 4(b) is not well worded but it is the order of 4 March 2008 to which reference must be made when considering whether the court is able to make a finding of contempt. In the event the Husband felt constrained in complying with the orders of 4 March 2008 because of the terms of paragraph 4(b) of 11 December 2006, the obligation was upon him to seek clarification from the court. I note in passing that he did not feel constrained by the terms of paragraph 4(b) in making the mortgage payments in the period from 11 December 2006 up until at least the date of trial in September 2007.
So far as the mortgage instalments are concerned I find the Husband did have the capacity to pay the mortgage instalments on the basis he had done so previously in relation to the A property. In relation to the Tasmanian property he would have had the capacity to pay had he insisted on the tenants paying rent.
It defies belief that the Husband would allow rent free occupation of the property when he says he was on a pension income and was aware of his obligations pursuant to the orders of 4 March 2008.
Annexure 7 to the affidavit of Hayley Ubank filed 4 December 2009 is an email from a Michael Raine, solicitor of Brisbane confirming that his firm acted for Macquarie Mortgages Pty Ltd in relation to the mortgage over the property at A. I assume for present purposes this is one and the same mortgage as referred to in the notice of exercise of power of sale where Perpetual Limited was said to be the mortgagee. The amounts shown as outstanding under the mortgage are in similar terms. I propose to seek clarification on this aspect prior to final orders being pronounced. For present purposes the relevance of the email is that it shows contractual arrears of $13,423 as at May 2008. This is evidence of an ongoing breach of the terms of paragraph 3(a) of the order of 4 March 2008.
Annexure 10 to the affidavit of Hayley Ubank is a letter from the solicitor A J Mullumby acting on behalf of the Commonwealth Bank Group. The letter is in the following terms:
“
…
Commonwealth Bank of Australia and [Hinde]
[…], Tasmania
I act acknowledge (sic) your letter dated 30 April 2008 and refer to the writer’s two telephone conversations with [AB] on the same date.
I confirm that a Viridian Line of Credit is a Bank product that is governed by the Consumer Credit Code. If the borrower defaults, the Bank sends out a series of letters of demand. If the arrears remain unpaid after the expiry of the third letter of demand (the section 80 Notice), the debt is “accelerated” and the full debt is then payable.
Mr [Hinde] did not pay any of the arrears. As at today, the full debt is $173,858.74 plus my ongoing legal costs which are being debited to the Mortgage. Interest is currently increasing at $52.35 a day
Please send to me urgently a copy of the Tasmanian equivalent of a Victorian estate agent’s sale authority. Please also advise me if the property is to be sold by auction or private sale and what is the usual settlement period in Tasmania.
Yours faithfully
A J Mullumby
Solicitor Victoria”
It is clear from the terms of this letter that the Husband had obtained a Viridian Line of Credit with the Commonwealth Bank which was secured by a mortgage over the Tasmanian property. Being in default in making repayments on the Line of Credit the full debt plus ongoing legal costs were being debited to the mortgage. Order 3(a) required that pending settlement of the sale of the Tasmanian property all payments due in respect of the mortgage (dealing number …) given by the Respondent Husband to the Commonwealth Bank of Australia in respect of the Tasmanian property were to be met by him and he was to indemnify and continue to indemnify the Applicant Wife in respect thereto.
At paragraphs 20 to 22 of Ms Ubank’s affidavit she notes:
“20.I am informed by the Applicant Wife and verily believe that at no stage has the Respondent Husband indemnified, nor continued to indemnify, the Applicant Wife for sums in respect of unpaid outgoings on the Tasmanian property or the matrimonial property or the mortgages over same. The Respondent Husband has not paid any monies to my firm in respect of same.
21.At the time the Applicant Wife’s costs application was heard, the Applicant Wife applied for a declaration that the Respondent Husband owed the Wife the sum of $54,979 comprising amounts in respect of the Respondent Husband’s breaches of the indemnities, the damage to the matrimonial home caused by the Respondent Husband and the fixtures forcibly removed from the matrimonial home by the Husband.
22.Annexed hereto and marked with the letters “HLU14” is a true and correct copy of the orders made 26 June 2008.”
The Respondent was given the opportunity to cross examine any of the Wife’s witnesses but apart from a brief challenge to the Wife as to the contents of the safe, elected not to do so.
The Wife and Ms Ubank were present throughout the hearing. I am prepared to find in the totality of the circumstances that Ms Ubank had been properly instructed by the Wife to depose to the matters set out in paragraphs 20, 21 and 22. The fact that this evidence is not replicated in an affidavit by the Wife herself, does not make the evidence inadmissible as hearsay. A solicitor is instructed in legal matters to speak with the authority of the client. I am prepared to find that that is the case.
It appears that for the purpose of the hearing before Justice Carmody on
25 June 2008 affidavits detailing various non-payments were particularised but those affidavits have not been relied on for the purposes of the present hearing.
The declaration made by Justice Carmody in paragraph 4 of the orders of
26 June 2008 is confirmation that there had been no compliance by the Husband with the requirement to indemnify the Wife under the terms of paragraph 3(a) of the orders of 4 March 2008. This is supported by paragraphs 20 to 22 of Ms Ubank’s affidavit quoted above.
Despite the protestations of the Respondent to the contrary, I am prepared to find that he did have the capacity to pay the mortgage instalments for the reasons previously given. I am prepared to find that his refusal to do so constituted a flagrant challenge to the authority of the court. I am prepared to find that there has been a breach of the terms of paragraphs 3(a) and I am satisfied of the facts relied on to establish that breach to the criminal standard of proof.
Count 4
Counsel for the Applicant in his submissions at paragraphs 21 to 24 refers to evidence in the Wife’s material of the Husband failing to pay rates on the A property, failing to pay rates and land tax on the Tasmanian property and failing to indemnify the Applicant Wife in respect of such outgoings.
The evidence to support the non-payment of rates is to be found at paragraphs 11 and 15 of Ms Ubank’s affidavit. Those paragraphs are in the following terms:
“11.On 13 May 2008 I telephoned the Brisbane City Council to ascertain whether the Respondent Husband had been paying the rates in relation to the former matrimonial home in accordance with order 3(b). I was informed by […] of the customer relations centre in the Brisbane City Council that gross rates owing as at 6 May 2008 were $861.02 (inclusive of arrears).
15.On 5 May 2008 I caused to make enquiries with the Central Coast City Council in Tasmania to ascertain whether the Respondent Husband had been paying the rates in relation to the Tasmanian property in accordance with order 3(b). I was informed by […] of the customer relations centre in the Central Coast City Council that rates owing for the current year from 1 July 2007 to 30 June 2008 are $553.38. I was informed that the outstanding rates had been referred to a debt collection agency as the Respondent Husband had failed to pay the current year’s rates by October 2007 nor enter into any instalment arrangement for payment.”
No documentary evidence is produced to support the hearsay evidence adduced in paragraphs 11 and 15 of Ms Ubank’s affidavit. Where the onus of proof is beyond a reasonable doubt I am not prepared to find that this is an appropriate way of establishing a failure to pay rates on the properties.
The appropriate course would have been to adduce the evidence by way of affidavit from authorised personnel at the Brisbane City Council and the Central Coast City Council in Tasmania or simply to attach rates notices evidencing the arrears and the dates such arrears were accumulated. Alternatively, the settlement statements when the properties were sold could be corroborative evidence of the failure to pay rates.
Count 4 - Land Tax
Evidence of the failure to pay land tax in Tasmania was sought to be adduced by relying on annexures 11, 12 and 13 to Ms Ubank’s affidavit being a series of documents received from the Tasmanian Land Titles Office and an email from a client services officer at the State Revenue Office in Tasmania (annexure 13).
It is not readily apparent but I expect evidence of this liability was before Carmody J when he made the declaration on 25 June 2008 previously referred to.
Annexure 13 is evidence that there was unpaid land tax of $1,510.00 on the Tasmanian land which remained unpaid as at 11 April 2008.
However, count 4 asserts the Husband failed to pay all outgoings in respect of the properties at “various” dates. Separate counts could have been brought to make a failure to pay each outgoing as a separate contempt. However, the case has not been presented in that fashion.
Ms Ubank in paragraph 20 of her affidavit reports instructions from the Wife that the Husband has not indemnified her in respect of unpaid outgoings on the two properties. However where there is no proper evidence to support what the outgoings were as I find to be the case in relation to the rates I am not prepared to accept this count of contempt has been made out. Accordingly this count will be dismissed.
Count 5
This count relates to the failure to provide the Applicant Wife with a certified copy of a certificate of insurance for the two properties.
This count of contempt is pleaded in the alternative namely, the Respondent failed to insure or failed to provide the Applicant with a certified copy of insurance for the subject properties.
The Respondent was in fact obliged to attend to both aspects namely, to insure and to notify.
The Applicant is not required to contact every home insurer in Australia to establish the properties were not insured. Order 3(c) establishes an obligation on the Respondent to insure the properties and provide:
“… the Applicant Wife’s solicitors with a certified copy of each insurance.”
At paragraph 12 of her affidavit Ms Ubank deposes in relation to the Brisbane property:
“12.As we had not received any formal notification from the Respondent Husband or otherwise, that he had kept in place a policy of insurance for the former matrimonial home the Applicant Wife was forced to arrange and pay for insurance cover. The cost of the home and contents insurance was $78.31 per month. Annexed hereto and marked “HLU8” is a true and correct copy of the certificate of insurance dated 4 May 2008.”
In relation to the Tasmanian land in paragraph 16 of her affidavit Ms Ubank deposes:
“16.As we had not received any formal notification from the Respondent Husband or otherwise, that he has kept in place a policy of insurance fro (sic) the Tasmanian property the Applicant Wife was (sic) been forced to make enquiries to arrange for insurance cover. The Applicant Wife obtained a quote for the cost of the home and contents insurance but at the relevant time the Applicant Wife had insufficient funds to meet this expense.”
The Husband’s justification for the failure to comply with the obligations imposed on him by paragraph 3(c) was that he could not afford same. (Refer cross examination of the Husband).
There is no evidence the Husband made any attempt to comply with the obligation to insure either property by way of enquiry with insurance companies as to the cost of same.
House insurance payments can be made by monthly instalments as the Applicant had to do with Suncorp in relation to the A property.
I am prepared to find the Husband had the capacity to pay by monthly instalments and made no attempt to do so.
I am prepared to find his conduct in not making payments of the insurance premiums amounted to a flagrant challenge to the authority of the court. He was not prepared to pay any amount in relation to financial obligations imposed upon him by the orders be they mortgage payments, land tax or insurance premiums. He did not even have the courtesy to advise the Wife’s solicitors he was unable to insure the properties.
I find count 5 proven beyond a reasonable doubt. I am prepared to find his conduct amounted to a flagrant challenge to the authority of the court.
Count 6
The Wife annexed to her affidavit of 4 December 2009 thirty-seven photos of the A property taken on 5 April 2008 after the Respondent vacated the property.
The Wife also annexes various receipts and quotes she obtained in endeavouring to place the property in a proper state for sale.
The photos and the documents speak for themselves.
The Respondent was cross examined in some detail in relation to the state in which the house had been left. He conceded he had a lawn mower but elected not to mow the lawn as he was concentrating on renovating the inside of the house. For similar reasons he did not weed the garden. He conceded he was responsible for most of the condition of the inside of the house but claimed he was in the process of carrying out renovations to improve the value of the property. I do not accept the Respondent’s evidence. He did what he did in an attempt to improve the property but ran out of money. I find it inconceivable that all toilet seats in the house were broken and in such condition that it necessitated their removal. I refuse to accept that shower heads were needed to be removed before replacements had been acquired. Similar comments apply in relation to virtually every aspect of what the Husband has done including removing towel racks from bathrooms and such like.
The Husband conceded in the course of cross examination that the bathrooms had been renovated around 2004 shortly prior to separation.
The phrase is often used of a model litigant being somebody who has complied in all respects with court directions and behaved to a high standard in the conduct of litigation. The Respondent has, to my mind, been the very antithesis of a model litigant. Our legal system in this jurisdiction would be in chaos if litigants were to be permitted to behave in the way the Respondent has done without sanction.
He mortgaged the two properties to remove any equity in them and proceeded to give away to his employer (head contractor) the proceeds raised. I appreciate that this does not constitute an act of contempt in that the Applicant’s solicitors had not lodged caveats on the property nor had they required the Respondent to give an undertaking to refrain from encumbering the properties in any way. However, it sets the scene for the provocative conduct engaged in by the Respondent subsequent to the determination of Carmody J. He attempted to sell the land in Tasmania contrary to court orders after the date of the trial. He failed to comply in any way, shape or form with the orders requiring him to honour financial obligations in relation to the mortgages, land tax and insurance. Finally, in relation to the A property prior to vacating this property by court order he engaged in conduct which to my mind amounted to wanton vandalism and deliberate neglect.
I reject the Respondent’s explanation he was endeavouring to renovate the property and ran out of funds. Such an explanation would be totally inconsistent with his conduct at all material times to ensure the Wife received as little value as possible from the remaining matrimonial assets.
Pursuant to paragraph 2(c) of the orders of 4 March 2008, there was an obligation on the Respondent to maintain the properties in a fit and proper state for sale pending his vacating the properties. No claim was made in relation to the Tasmanian property as the Respondent was not in occupation of that property at the relevant time. I am prepared to find the conduct of the Respondent in leaving the A property as he did as detailed in the photos and the other evidence before the court constituted a flagrant challenge to the authority of the court. I am prepared to find beyond a reasonable doubt the Respondent’s conduct constituted a contempt of court.
The Respondent is found then to have been in contempt of court in relation to counts 1, 2, 3, 5 and 6. Count 4 will, for the reasons given, be dismissed.
I will hear the parties on the issue of what penalty should be imposed.
I certify that the preceding ninety eight (98) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Barry.
Associate:
Date: 9 July 2010
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