KENDALL & KARAS

[2014] FamCA 747

FAMILY COURT OF AUSTRALIA

KENDALL & KARAS [2014] FamCA 747

FAMILY LAW – PROPERTY – Contravention application – Where the wife alleges there was a failure to provide updated bank statements pursuant to court order – Where the husband had knowledge of the order – Where the husband had previously complied with the order – Where leave is granted to the husband to make an application for costs – Where the wife’s contravention application is dismissed.

Family Law Act 1975 (Cth) s 117

APPLICANT: Ms Kendall

RESPONDENT: Mr Karas

FILE NUMBER: SYC 7163 of 2010

DATE DELIVERED: 12 March 2014

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: Aldridge J

HEARING DATE: 12 March 2014

REPRESENTATION

COUNSEL FOR THE APPLICANT: Ms Pender

SOLICITOR FOR THE APPLICANT:

COUNSEL FOR THE RESPONDENT: Mr Bell

SOLICITOR FOR THE RESPONDENT:

Orders

1. That the wife’s application for contravention filed 30 October 2013 against the husband is hereby dismissed.

2. That leave is granted to the husband to make an oral application for costs this day.

3. That the applicant wife shall pay the respondent husband’s costs of the contravention application as agreed or assessed and that assessment and payment shall not be able to be enforced until the conclusion of the property proceedings between the parties.

4. That the contravention application filed 11 December 2013 and the application in a case filed 2 July 2013, are stood over to the listing on 18 March 2014 before the Registrar, to be relisted in a duty list if the applicant wishes to proceed with them.

5. That the costs of the respondent in respect to the contravention application filed 11 December 2013 are hereby reserved.

IT IS NOTED that publication of this judgment by this Court under the pseudonym Kendall & Karas has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 7163 of 2010

Ms Kendall

Applicant

And

Mr Karas

Respondent

REASONS FOR JUDGMENT

1. This is an application for contravention orders that were made by me on 18 September 2013.  On that day by consent, I ordered that within seven days, Mr Karas (“the husband”) provide the applicant Ms Kendall (“the wife”), copies of up-to-date bank account statements covering from the period previously provided to the present date.  A contravention application was filed on 30 October. It alleges that that order was breached and that the husband did not provide a copy of all his bank accounts from the period previously provided to the present date.  The evidence that has been read in support of the matter application has ranged much more widely than the application for contravention.

2. The evidence and the submissions referred frequently to there being a large number of transactions in the husband’s bank accounts which remain unexplained.  It was said that requests have been made for him to explain those transactions and those requests have gone unanswered.  Whether that is so or not, is not relevant to the issue as to whether or not particular bank statements were provided or not provided in response to a particular order.  The contravention application has to be dealt with on the basis of the evidence relevant to that order and that obligation and not wider obligations that are not the subject of these present contravention proceedings. 

3. The evidence of the non-compliance consists of essentially the following paragraph in the applicant’s affidavit:

   After the order of Aldridge J, [the husband] sent me a letter with copies of three of his accounts.  I had previously been supplied with statements for six accounts including his MasterCard.  I wrote to [the husband] and asked him for copies of the missing statements and for the statements of the three other accounts previously supplied including his MasterCard account.  These have not been supplied to me. 

4. Annexed hereto and marked H was a copy of a letter to the respondent asking for the missing bank accounts and also annexed was a copy of his email in response.  A letter that was sent requesting the documents dated 1 October and said:

   I refer to His Honour Justice Aldridge and the orders made by consent on 18 September 2013 you provide us with updated copies of bank statements for all your bank accounts.

   I note you have sent me copies of the following Accounts:

   ·Diamond Awards Card Account Number – …869

   ·Business Transaction Account Number – …193

   ·Business Online Saver Account Number – …222

   ·Complete Access Account Number – …307

   However, I don’t have copies of the following statements and Accounts:

   ·Business Online Saver Account Number- …222

   Statement Number 54 – covering July 2012

   Statement Number 60 – covering January 2013

   §Term Deposit Account Number – …769

   §Gold Awards Card Account Number – …219

   It is requested you provide copies of these accounts for the last twelve months as a matter of urgency.

5. The response to that was dated 8 October 2013 and it said:

   Kindly note that all the documents I’ve consented to provide to you have been furnished to you by registered post. 

   As for your request for statement 54, July 2012, and statement 60, January 2013 (Business On-Line Saver Account), these do not correlate with the current orders (paragraph 4), and you already were provided with these Statements from Edwards Family Lawyers. 

   The term deposit account Statement has also been copied and sent to you on two occasions, however, I now enclose another copy. 

   Please note and read the last financial disclosure, where you will see that the Gold card awards card does not exist. 

   As for your request to provide copies of documents from the last twelve months I refer you to His Honour Justice Aldridge”s Orders dated 18 September in particular paragraph 4. 

   Kindly note that you’ve received copies of all financial documents prior to the last Final Hearing ( 27 May 2013).

6. Then attached to that letter is a term deposit certificate of re-investment at 5 August 2013. 

7. On an application such as the present, it is necessary for the applicant to establish that the respondent was personally served with the application.  There is no evidence of such service, although the respondent has appeared.  It is also necessary before the applicant to establish that the respondent had knowledge of the order.  That would seem to be satisfied by the letter to which I have just referred, in which the direct reference by the respondent to the order in question.

8. As has been seen, the letter of 1 October, requested a number of specific documents.  As I understand it, Ms Pender who appeared for the applicant no longer pressed the case in relation to statement No. 54 and statement No. 60 referred to in that letter or the term deposit account number. 

9. The Gold Awards card account is an account that the respondent clearly had. On 18 February, it had an opening balance of $17,961 and had a Commonwealth Awards points balance of some $323,311.  The summary on the bank statement for 18 June 2011 to 19 July 2011, shows an opening balance of zero, new charges of zero, payments and refunds of zero, a minimum payment required of zero dollars and a closing balance of zero dollars.  The second page indicates that the credit limit was $23,400, but the available credit was dollars – zero. 

10. Whilst that statement does not of itself say that the account was closed, having regard to the statement that the available credit was zero and there was a nil opening balance of a nil closing balance, I would infer without further evidence that the account was defunct.  In any event, there is no evidence to suggest that it was used subsequent to that date.  Accordingly, I am not satisfied that there are Gold Awards card accounts that have not been provided in accordance with the order. 

11. Much of the complaint made by the failure to produce accounts arose from a number of documents that were tendered – accounts of the husband that were tendered during the hearing that showed payments in and out of Netbank accounts described variously as “children’s”, “children’s funds” or “[the husband’s initials]”. 

12. It was submitted that these accounts, because they showed moneys both coming in and from the accounts marked “children’s”, “children’s funds” and “[the husband’s initials]”, must have been accounts under the control of the husband and accordingly, he hasn’t provided the statements for those accounts.  There are a number of difficulties with this.  Firstly, those accounts were not identified in the letter of 1 October 2013 or in the proceeding – or by any other letter that was placed in evidence.  They are not mentioned in the contravention application.  Secondly, there are payments in and out of those accounts from an accountant described as Business A, which Ms Pender conceded was a third party.  So the mere fact that there are payments both in and out of the account does not as that concession demonstrates, mean that the accounts to and from which payments were made must be under the control of the husband.

13. Thirdly, there is no evidence that they are, in fact, descriptions of a particular account as opposed to simply descriptions of where the money went.  There is no evidence that those accounts are under the control of the husband or are his accounts.  It is true, as Ms Pender says that, the funds going into and out of those accounts raise suspicions that the husband is not complying with his obligations to give proper disclosure.  Indeed, it is asserted that letters asking for information about those payments and receipts have gone unanswered.  All that may be so, but that is not relevant to the present proceedings.  The present proceedings are concerned solely with the order in relation to provision of bank statements. 

14. Finally it was submitted by the respondent that that order required provision of up-dating bank account statements from the periods previously provided to the present date and was not an order for general provision of bank statements.  The wording of the order to provide bank statements is not entirely clear, but it seems to be an order designed to up-date the provision of bank statements from those previously provided.  A further complicating factor is that the references to the children’s account and the children’s and the husband’s initials are all accounts that refer to an earlier date than the date of the orders.  Those accounts were at that time provided.  It is, therefore, not clear whether the order was intended to cover the bank statements that should have been previously provided, but were not.

15. This is not to say that those bank accounts should not have been provided under an obligation of a disclosure.  If they existed, they clearly should have been.  But it is a different thing to assert that the failure to provide these is a breach of that specific order.  Contravention applications are applications of a kind where the charge needs to be carefully framed and the evidence in support of it tightly focused so as to establish a breach of the contravention alleged.  I am not satisfied on the evidence that has been produced on this contravention application that the contravention as alleged has been made out.  The application is dismissed.

16. The respondent seeks an order for costs on an indemnity basis. Costs have to be determined pursuant to section 117 of the Family Law Act 1975 (Cth), which confers a broad discretion that requires the matters set out in section 117 (2)(a) to be taken to account. There are two matters of particular relevance. The wife is in a very poor financial position and is not presently in a position to pay costs. The second significant factor to be taken into account is that the application was highly unsuccessful. It was, in my opinion, an application that should not have been brought. Whilst it was an application that was designed to seek information about the husband’s movement of funds in circumstances where such an enquiry seems entirely reasonable, it was, nevertheless, an application that did not deal with those issues, but rather a specific and very narrow issue.

17. Submissions were made that went far beyond the issue actually raised by the application and the material in support of the application did not support it.  Taking both those matters into account and bearing in mind the nature of the application, I think it is appropriate that the applicant pay the respondent’s costs.  Taking into account her impecunious position and the nature of the proceedings that the assessment of those costs – and assessment of payment of those costs will be stayed until a determination of the property proceedings.  As to whether or not the costs should be on indemnity basis, generally speaking, payment on indemnity costs is served to cases which are exceptional.

18. Whilst there is some force in the position that this is such an exceptional case, I’m not satisfied having regard for the circumstances, that it is such a case as requires the payment of indemnity costs.  So the payment will be on the usual basis.  Accordingly, I order that the applicant pay the respondent’s costs of the contravention application as agreed or assessed and that assessment and payment not be enforced until the conclusion of the property proceedings between the parties.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Aldridge delivered on 12 March 2014.

Associate: 

Date:  10 September 2014