LAFFY & GEORGE
[2012] FMCAfam 775
•11 July 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| LAFFY & GEORGE | [2012] FMCAfam 775 |
| FAMILY LAW – Contravention application – contraventions admitted – orders – sentence of imprisonment. FAMILY LAW – Contravention application – application previously dismissed by consent – res judicata. |
| Family Law Act 1975, ss.112AD, 112AD(2), 112(AD(2)(b), 112AD(2A), 112AE, 112AG |
| Chamberlain v Deputy Federal Commissioner of Taxation (1988) 164 CLR 502 Clout & Ors v Klein & Ors [2001] QSC 401 Effem Foods Pty Ltd & Trawl Industries of Australia Pty Ltd, (1993) 43 FCR 510 Lin & Rail Corporation of New South Wales (2011) FCA 261 M67 v The Hon. Phillip Ruddock & Minister for Immigration (2004) FMCA 79 Port of Melbourne Authority & Anshun (1981) 147 CLR 589 Reid & Lynch [2010] FamCAFC 184 |
| Applicant: | MS LAFFY |
| Respondent: | MR GEORGE |
| File Number: | BRC 830 of 2011 |
| Judgment of: | Jarrett FM |
| Hearing date: | 11 July 2012 |
| Date of Last Submission: | 11 July 2012 |
| Delivered at: | Brisbane |
| Delivered on: | 11 July 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr Hackett |
| Solicitors for the Applicant: | Hirst & Co |
| The Respondent appeared on his own behalf |
ORDERS
Upon the Court finding that the respondent husband has, without reasonable excuse, contravened:
(A)the orders made under the Family Law Act1975 by Federal Magistrate Cassidy in the Federal Magistrates Court of Australia at Brisbane on 23 May 2011, in that:
(a)in contravention of paragraph 8 of those orders the respondent, without reasonable excuse, failed to pay the mortgage repayment on the mortgage registered in favour of the National Australia Bank over the property at Property A as and when it fell due on 30 November 2011;
(b)in contravention of paragraph 8 of those orders the respondent, without reasonable excuse, failed to pay the mortgage repayment on the mortgage registered in favour of the National Australia Bank over the property at Property B as and when it fell due on 30 November 2011;
(c)in contravention of paragraph 8 of those orders the respondent, without reasonable excuse, failed to pay the mortgage repayment on the mortgage registered in favour of the National Australia Bank over the property at Property B as and when it fell due on 30 December 2011;
(d)in contravention of paragraph 8 of those orders the respondent, without reasonable excuse, failed to pay the mortgage repayment on the mortgage registered in favour of the National Australia Bank over the property at Property B, as and when it fell due on 31 January 2012;
(e)in contravention of paragraph 8 of those orders the respondent, without reasonable excuse, failed to pay the mortgage repayment on the mortgage registered in favour of the National Australia Bank over the property at Property B as and when it fell due on 29 February 2012;
(f)in contravention of paragraph 8 of those orders the respondent, without reasonable excuse, failed to pay the rates levy in the amount of $265.50 from the (omitted) Council dated 24 November 2011 in relation to the property at Property B as and when it fell due on 28 December 2011; and
(g)in contravention of paragraph 8 of those orders the respondent, without reasonable excuse, failed to pay the rates levy in the amount of $525.25 from the (omitted) Council dated 5 January 2012 in relation to the property at Property B, as and when it fell due on 6 February 2012; and
(B)the orders made under the Family Law Act1975 by Federal Magistrate Cassidy in the Federal Magistrates Court of Australia at Brisbane on 7 March 2012, in that:
(a)in contravention of paragraphs 3 and 4 of the orders dated 7 March 2012 the respondent, without reasonable excused, failed to do all things necessary to deliver possession of the BMW (model omitted) motor vehicle and all instruments of title, log books, service histories, keys and accessories pertaining to that vehicle to the wife outside the Property B property by 4.00 pm on 8 March 2012.
THE COURT ORDERS THAT:
The respondent husband MR GEORGE born (omitted) 1962 be sentenced to a period of imprisonment for a period of three (3) months, to be served immediately.
The respondent husband pay to the applicant wife costs to be taxed and paid in accordance with the Family Law Rules2004 on an indemnity basis.
IT IS NOTED that publication of this judgment under the pseudonym Laffy & George is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT BRISBANE |
BRC 830 of 2011
| MS LAFFY |
Applicant
And
| MR GEORGE |
Respondent
REASONS FOR JUDGMENT
(ex tempore)
This is an application for contravention of certain orders made by Cassidy FM on 23 May, 2011 some other orders made by her Honour on 6 February, 2012 and yet some other orders made on 7 March, 2012.
There are nine counts in the application for contravention. Seven of them relate to the orders of 23 May 2011, and might compendiously be referred to as failure by the respondent to make certain mortgage and other outgoing payments in respect of properties situated at Property A, and Property B. The other two matters relate to the respondent’s dealing with a BMW (model omitted) motor vehicle – his sale of that vehicle in breach of an order made on 6 February, 2012 and his failure to deliver up that vehicle to the applicant, pursuant to an order made on 7 March, 2012.
I will deal with the application insofar as it concerns the sale of the BMW (omitted) motor vehicle first. Although the respondent admits selling the vehicle in breach of the order, he says that this application ought to be dismissed because it has already been dealt with by Cassidy FM when her Honour made a consent order dismissing an application for contravention filed by the applicant wife on 21 March., 2012. That order, he argues, operates as an “estoppel” against the applicant in these proceedings. The applicant, whilst conceding that this particular contravention was the subject of her application filed on 21 March, 2012 and dismissed by Cassidy FM by consent nonetheless argues that the application should proceed because there was no decision on the merits of the application – the orders were made by consent.
The conclusion I have come to is that a res judicata operates against the applicant to prevent her from pursuing that particular contravention. My conclusion in that regard starts with a consideration of the decision of the High Court of Australia in Chamberlain v Deputy Federal Commissioner of Taxation (1988) 164 CLR 502. In that case, Deane, Toohey and Gaudron JJ, with whom the other members of the Court agreed – in certain respects, at least – said that an issue estoppel is different to res judicata, and their Honours pointed to statements made by the Chief Justice, Sir Harry Gibbs, and Mason and Aitken JJ in Port of Melbourne Authority & Anshun (1981) 147 CLR 589 as explaining the two different principles. In Anshun their Honours said this (at p.597):
The distinction between res judicata (in England called “cause of action estoppel”) and issue estoppel was expressed by Dixon J. in Blair v. Curran [1939] HCA 23; (1939) 62 CLR 464, at p 532 in these terms: “in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.”
The conclusion in Chamberlain was that a second cause of action by the Deputy Commissioner for Taxation for unpaid tax against Mr Chamberlain was unable to be pursued because of a res judicata that arose out of a judgment made by consent between the same parties in respect of the same tax liabilities – that is to say, the same cause of action. The fact that the first judgment was made by consent between the parties and was not a judgment on the merits and as such had nothing to do with the conclusion that the second action could not proceed.
Chamberlain has been followed on a number of occasions: for example, Lin & Rail Corporation of New South Wales (2011) FCA 261 and Effem Foods Pty Ltd & Trawl Industries of Australia Pty Ltd, (1993) 43 FCR 510. It has also been applied in the Full Court of the Family Court of Australia in Reid & Lynch [2010] FamCAFC 184 by O’Ryan J, who delivered the judgment in that case and with whom Finn and Strickland JJ agreed. At paragraph 229, his Honour said this:
A consent judgment intended by the parties to dispose finally of the substantive proceedings between them will give rise to res judicata – see Chamberlain v Deputy Commissioner of Taxation at 508. The operation of consent orders working an estoppel is an exception to the principle that there must be a decision on the merits. Consent orders absolve the court from the duty to make a decision on the merits and convert an agreement into a judicial decision.
That approach, in respect of consent orders, has been followed by the now Chief Justice of the Family Court when she was the Chief Federal Magistrate in M67 v The Hon. Phillip Ruddock & Minister for Immigration (2004) FMCA 79. In that case, her Honour said this, at [13]:
Although the proceedings dismissed by North J were done by consent, orders that are made by consent are as binding as those pronounced after a contest. They can therefore give rise to a plea of res judicata and issue estoppel as a bar to the litigation on the same issues in subsequent litigation. In McCool v Barnes (1995) FCR 572, the Full Federal Court has said at 582:
It seems now to be clear that a judgment entered by consent is as much a judgment as one obtained after a full argument, and, as such, capable of founding an estoppel. Thus, provided it is clear what the issues involved in the consent order may be, those issues will be taken as having been conclusively determined, so as to prevent their being raised in subsequent proceedings.
Chief Federal Magistrate Bryant, as she then was, went on:
14. In Somanader v Minister for Immigration and Multicultural Affairs (2000) 78 ALR 677, Merkel J held that the dismissal by consent of proceedings in the Federal Court prevented the applicants from raising the same grounds in subsequent proceedings brought pursuant to section 75(v) of the Constitution that have been remitted to the Federal Court. His Honour held that in determining whether res judicata applies the primary question is whether the cause of action in the later proceedings is the same as that which was litigated in the earlier proceedings. For the purposes of the res judicata doctrine, the term "cause of action" is to be understood by reference to the substance of the action and is distinct from its form.
To determine whether a res judicata operates in this case is to determine whether, in substance, the cause of action or the right to be prosecuted by the applicant is the same as that disposed of by the orders made by Cassidy FM on 22 March, 2012 which dismissed the earlier contravention application of 21 March, 2012. In my view, it is. The allegations are in exactly the same form, and the order of Cassidy FM, made as it was by consent, dismissed that contravention application.
In argument, Mr Hackett referred me to the decision of Holmes J of the Supreme Court of Queensland in Clout & Ors v Klein & Ors [2001] QSC 401, but Clout v Klein is distinguishable on the basis that the order that her Honour was considering there, in the context of a res judicata, was an order which was made by default. Her Honour makes that clear commencing at paragraph 4 of her reasons, and to the extent that the orders were made by default there was no determination of the claims – see from paragraphs 25 through to paragraph 28 of her Honour’s reasons. The order I am dealing with here, disposing of the application for contravention filed on 21 March 2012, is not an order by default. It is an order made with the consent of the parties. As Chamberlain and the other cases to which I have referred make clear, it is just as binding and just as efficacious as if the Court had come to its own conclusions and made that order after a full hearing of the application.
For those reasons, I am satisfied that a res judicata operates against the applicant insofar as the contravention application seeks to have the respondent dealt with for a breach of the orders made on 6 February, 2012 by reason of the sale of the BMW motor vehicle. Those matters are not matters with which I am now concerned.
In respect of the applications that relate to the non-payment of mortgages and outgoings, the respondent argues that those matters too are the subject of an estoppel in the nature of that discussed by the High Court of Australia in Port of Melbourne Authority v Anshun (above). In my view, however, that doctrine does not operate so as to prevent the applicant from pursuing the contraventions in these proceedings.
True it is that the contraventions had taken place by the time the contravention application filed on 21 March, 2012 was filed, but it seems to me that Port of Melbourne Authority v Anshun requires something more than the existence of the causes of action at the relevant time. There needs to be something else which suggests that those matters ought to have been pursued at the same time. Some connection between the subject matter of the application that was actually commenced and the matters which ought, it is said, to have been included in those proceedings is required.
The application of 21 May was a contravention application, but it dealt with one allegation in respect of one order; namely the sale of the BMW motor vehicle in breach of the order of 6 February 2012. It did not purport to deal with any other order made by Cassidy FM, and it did not purport in any way to deal with the non-payment of mortgages or any such matter. In those circumstances, I am not satisfied that the principle in Port of Melbourne Authority v Anshun is engaged. Those contravention applications remain live.
The contraventions relating to the failure to make the payments connected with real properties were dealt with by the parties compendiously and I will deal with them compendiously as well. The contraventions are admitted, but Mr George says that he had a reasonable excuse for contravening the orders. To put it shortly, he says that he had no money to make those payments. He argues in both his written submissions and his oral submissions that at the time the orders were made he explained to the Court that he had a reserve from which he could make the payments but that the reserve would run out in October of 2011, and beyond that he would not be able to make any payments.
He says that he was told that he was able to bring an application to vary the orders – he could do that urgently – but when he tried to do that the application, although filed in October of 2011, was not listed until February of 2012. He says that he had no funds available to him to make the relevant payments.
On 1 September 2011, Cassidy FM delivered some reasons for judgment in an application that her Honour then had before her between these parties. Both parties have referred to the reasons for judgment and the applicant has “read” them as part of her case, although of themselves they are of no evidential value. The applicant relies upon what is set out in paragraphs 25 and 26 of those reasons for judgment. Mr George accepted the accuracy of what her Honour sets out in those paragraphs and, indeed, as the reasons themselves make clear, those facts were drawn from Mr George’s own evidence.
The evidence reveals that Mr George received a redundancy payment upon being terminated from his employment, which was a significant sum of money – in the order of $614,000. His evidence was that by the time the proceedings were before Cassidy FM he had spent all but $100,000 of that redundancy payment.
Her Honour records where that money went: $72,000 of it was paid to the wife in these proceedings, without an order being necessary for the payment. There were some other payments to her, and some payments of legal fees and payments which Mr George characterises as ordinary living expenses. He also made some payments to or on behalf of his present partner. Those payments are summarised at paragraph 26 of Cassidy FM’s reasons. He spent $27,476.90 on payment towards a mortgage on his partner’s home and in respect of which he has no interest. He spent $15,000 on furniture currently in that home. He spent $25,641.17 on her car, $40,000 on jewellery for her, $22,000 on repayment of a loan that he said he had to draw down from her funds that she had set aside for her own property settlement. He had spent $30,000 on home improvements for the home that his partner owns and in respect of which he has no interest. He had spent nearly $7000 on audio equipment for the home and nearly $4000 on fitness equipment. Mr George was cross-examined before me about his financial circumstances at the time these payments were made. He agreed that there was a joint account that had been established with his partner, into which his partner has and continues to receive her income. She earns a little less than $7000 per week. Mr George agreed with the proposition that had he wished to do so he could have made the payments that were required to be made by the orders of Cassidy FM, and about which the wife now complains. His evidence was that he chose not to do so because he did not see it is as appropriate; the money in the joint account was that of his de facto spouse’s, not his.
The difficulty with Mr George’s argument is that it is clear from the material to which I have referred that he has had available to him a significant sum of money, far in excess of what was required to discharge the obligations under Cassidy FM’s order but he has chosen to expend that money in particular ways. He justifies that stance by saying that of the redundancy amount that he received he viewed certain parts of it as “matrimonial funds” – that is, those amounts which related to long service leave, annual leave, and the like – but that that part of the payment which related to compensation for loss of future income was really not “matrimonial property” and was his alone to do with as he pleased. That may well be true. It may be entirely legally correct, but the orders with which Mr George had to comply do not specify the funds which are to be used to make the payments. The orders do not require any particular source of funds to be used to make the payments – his obligation to make the payments was not qualified by reference to whether the funds used to make the payments could be characterised as “matrimonial funds”. The obligation is simply an obligation to make them.
In the circumstances, I am not satisfied that Mr George has established that he had a reasonable excuse for contravening the orders.
I turn, then, to the final matter raised in the contravention application and that relates to the delivery up of the BMW motor vehicle by Mr George to the applicant. On 7 March, 2012 Cassidy FM ordered that the husband deliver possession of the BMW (model omitted) motor vehicle and all instruments of title, logbooks, service histories, keys, and accessories pertaining to that vehicle to the wife outside the Property B property by 4:00pm on 8 March, 2012. Her Honour had heard argument about whether that order and some others ought to be made, and had reserved her decision. By the time her Honour’s decision was to be handed down, Mr George had sold the subject vehicle. He sold it between the hearing of the wife’s application for the delivery up to her of the vehicle and the time her Honour handed down her decision. Thus, at the time her Honour gave her reasons and judgment that he should deliver the subject vehicle to the wife, Mr George knew that he was no longer in possession of the vehicle because he had traded it on another vehicle and so to that extent it was impossible to comply with the orders.
There seems to be no contention that he remained silent about those matters before Cassidy FM and he permitted her Honour to make the orders of 7 March, 2012 notwithstanding that he had sold the vehicle. Mr George conceded that he had no reasonable excuse for that conduct, nor for contravening the order to deliver the vehicle to the wife.
Although he suggests that he has no reasonable excuse for contravening the order, one might argue that the fact that he did not have the subject vehicle in his possession when time for the compliance with the orders does give rise to a reasonable excuse for contravening the orders. However, having considered that matter, as I think I am bound to do given that Mr George is representing himself, I have come to the conclusion that those facts do not amount to a reasonable excuse for contravening the orders. In circumstances where Mr George has stood silently by and permitted the Court to make orders with which he knew he could not comply, he should not now be heard to say that his non-compliance should be excused on the basis that it was impossible for him to comply with the orders. Moreover, I accept the submissions made by Mr Hackett that there was, of course, nothing to prevent Mr George from going out and purchasing the car again and providing it to the wife. I am satisfied that the orders have been contravened without reasonable excuse, as the wife alleges.
In summary, therefore, I find that all of the counts in the application for contravention filed on 4 April 2012, save for the second-last count, relating to the sale of the BMW motor vehicle, have been proved and that the respondent has not demonstrated on the balance of probabilities that he had a reasonable excuse for any of the contraventions.
I turn then to the question of sanction. This application is pursued under section 112AD of the Family Law Act 1975. Section 112AD deals with contraventions of orders other than orders relating to children. It provides that if a Court, having jurisdiction under the Act, is satisfied that a person has, without reasonable excuse, contravened an order under the Act, the Court may make an order for the imposing in respect of the person of one or more of the sanctions available to be imposed under sub-section (2), being a sanction or sanctions that the Court considers to be the most appropriate in the circumstances. Sub-section 112AD(2) provides that:
(2) The sanctions that are available to be imposed by the court are:
(a) to require the person to enter into a bond in accordance with section 112AF; or
(b) to impose a sentence by order on the person, or make an order directed to the person, in accordance with section 112AG; or
(c) to fine the person not more than 60 penalty units; or
(d) subject to subsection (2A), to impose a sentence of imprisonment on the person in accordance with section 112AE.
According to section 112AD(2A):
(2A) The court must not impose a sentence of imprisonment on the person under paragraph (2)(d) in respect of a contravention of a maintenance order unless the court is satisfied that the contravention was intentional or fraudulent.
I am not concerned with a maintenance order. In any event, even if the orders of Cassidy FM that I have found have been breached without reasonable excuse could be seen to be maintenance orders, I am satisfied that the contraventions were intentional. The evidence given by Mr George in cross-examination makes it clear that the contraventions were intentional.
Ordinarily a bond might be appropriate where there are orders in place with which a party has a continuing obligation to comply, and a bond can be conditioned on continued compliance with those orders. It might also include a condition that the person be of good behaviour.
In this case, as I understand the present position, the property proceedings are now adjourned until a date in 2014, and there is little if anything to be done by either of the parties in the meantime. There is certainly nothing that was brought to my attention by way of order with which Mr George has a continuing obligation to comply. In those circumstances, it is difficult to see how a bond might be efficacious in the circumstances.
Mr George himself told me that he has no financial resources and he has no money, and it seems for that reason that a fine would be inappropriate.
These contraventions, in my view, are contumelious disregard of the authority of the Court. They are serious. In my view it is clear from the material before me that Mr George has not taken his obligations under these orders seriously, although he does now say that he understands the seriousness of it. His contrition now, however, belies his actions. There is evidence before me that Mr George does not take orders of the Court very seriously. The affidavit of the wife, filed on 2 July, 2012 contains evidence of Mr George boasting to his friends and family about the way in which a contravention concerning his sale of the BMW motor vehicle was dealt with on the last. He accepted that the entries that he made on his Facebook page, which are in evidence, is just that: boasting on his part about the way in which he managed to have that matter dealt with.
I take Mr George’s demonstrated attitude seriously. To the extent that the evidence to which I have just referred demonstrates a general attitude on the part of Mr George, and to an extent it can be seen as Mr George thumbing his nose at the authority of the Court it is a serious matter. Additionally, I accept the submission that Mr George lied about his conduct when he wrote to the wife’s solicitors on 6 March 2012, saying in response to their inquiry about whether he had disposed of the vehicle, “I have not breached the Court’s order.” The way in which he approached that issue is consistent with his attitude towards compliance with the Court’s orders.
Ms Laffy seeks an order for Mr George to be imprisoned for the contraventions.
The contraventions, taken as a whole, as I have already indicated, represent a serious disregard of the authority of the Court. In those circumstances, I have concluded that it is appropriate to impose a sentence of imprisonment. For the reasons I have already expressed, I am satisfied that some sanction needs to be imposed. Again, for the reasons I have already expressed I am satisfied that it would not be appropriate to deal with the contraventions by imposing a bond or a fine. I know of no arrangements between the Commonwealth and the State of Queensland that would permit me to make an order as set out in s.112AD(2)(b) or 112AG of the Act.
I have had regard to the authorities to which Mr Hackett has taken me. Those authorities deal with contempt applications. This is not a contempt application, but rather a contravention application, but in terms of the serious nature of the contraventions and consequences for the parties, there is, in my view, little difference. Those decisions are of some limited assistance in fixing a penalty.
One matter of significance, in my view, is the need to ensure that Mr George understands the seriousness of his actions. There is also a broader concern to ensure that the Court’s processes are accorded appropriate respect by those who seek to engage the Court’s assistance. In my view there must be some appropriate sanction to mark the Court’s disapproval of the contraventions. The appropriate sanction is a term of imprisonment for three months, commencing immediately.
I certify that the preceding thirty-seven (37) paragraphs are a true copy of the reasons for judgment of Jarrett FM delivered on 11 July, 2012.
Date: 1 August 2012
8
1