Lescosky and Durante - [2020] FamCAFC 179

FAMILY COURT OF AUSTRALIA

LESCOSKY & DURANTE

[2020] FamCAFC 179

FAMILY LAW – APPEAL – CONTRAVENTIONS – Where all of the contraventions were admitted by the appellant – Where it is not the case that the court below in imposing sanctions for contraventions must apply any so-called principle of sentencing – Where Pt XIIIA of the Family Law Act 1975 (Cth) provides an exclusive code for dealing with breaches of orders under that Act – Where the task for the Magistrate was to fix a sanction or sanctions her Honour considered to be the most appropriate in the circumstances (see s 112AD of the Family Law Act 1975 (Cth)) – Where the appellant himself sought that the sanction imposed be a fine and not a term of imprisonment – Where in fixing the fines the Magistrate balanced the total fine against the criminality involved and the circumstances of the case including the appellant’s personal circumstances – Where the appellant misguidedly sought to rely on the Sentencing Act 1995 (WA) – Where the Magistrate was not obliged to make comparisons with any other authorities – Where the Magistrate proceeded on the basis that the appellant’s entitlement to any property settlement proceeds would be sufficient to meet the fines imposed but in the event of a shortfall out of abundant caution her Honour ordered that the appellant have 90 days to make the payment required – Where there is no merit in any of the grounds of appeal – Appeal dismissed.

Family Law Act 1975 (Cth) Pt XIIIA, ss 112AD, 112AG(1)
Sentencing Act 1995 (WA) s 6
Crimes Act 1914 (Cth) s 16A

Abduramanoski and Abduramanoska (2005) FLC 93-215
Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd and Others (1997) 145 ALR 36
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 246 ALR 35
Australian Securities and Investments Commission v Michalik [2004] NSWSC 1259
Hay v Hay (1998) FLC 92-819
Johnson v The Queen (2004) 205 ALR 346
Mill v The Queen (1988) 166 CLR 59
Myers and Myers (2006) FLC 93-291
Schwarzkopff and Schwarzkopff (1992) FLC 92-303

APPELLANT:

Mr Lescosky

RESPONDENT:

Ms Durante

FILE NUMBER:

PTW

7586

2016

APPEAL NUMBER:

WEA

2019

DATE DELIVERED:

28 July 2020

PLACE DELIVERED:

Adelaide

PLACE HEARD:

Perth

JUDGMENT OF:

Strickland J

HEARING DATE:

11 March 2020

LOWER COURT JURISDICTION:

Magistrates Court of Western Australia

LOWER COURT JUDGMENT DATE:

16 October 2019

LOWER COURT MNC:

REPRESENTATION

THE APPELLANT:

In Person

THE RESPONDENT:

In Person

Orders

The appeal be dismissed.

Note: The form of the order is subject to the entry of the order in the Court’s records.

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

Note: This copy of the Court’s Reasons for Judgment may be subject to review to remedy minor typographical or grammatical errors (r 17.02A(b) of the Family Law Rules 2004 (Cth)), or to record a variation to the order pursuant to r 17.02 Family Law Rules 2004 (Cth).

THE APPELLATE JURISDICTION OF THE FAMILY COURT OF AUSTRALIA AT PERTH

Appeal Number: WEA 43 of 2019
File Number: PTW 7586 of 2016

Mr Lescosky

Appellant

And

Ms Durante

Respondent

REASONS FOR JUDGMENT

Introduction

By Amended Notice of Appeal filed on 17 February 2020, Mr Lescosky (“the husband”) appeals against orders made by a Magistrate of the Magistrates Court of Western Australia on 16 October 2019. The appeal is opposed by Ms Durante (“the wife”), although she did not take any active part in the same.
The orders appealed against impose fines on the husband in respect of admitted contraventions, made without reasonable excuse, of orders made on 7 December 2017.

Relevant Background

The parties are engaged in contested parenting and property settlement proceedings.
In late November 2017, the husband commenced investing in cryptocurrency.
On 4 December 2017, the husband set up two new [bank] accounts and thereafter transferred funds to those accounts in order to make purchases of cryptocurrency. The total sum transferred was $180,000 over an 11 day period.
On 7 May 2018, the wife filed an Application Alleging Contravention by the husband without reasonable excuse, of orders made on 7 December 2017. She filed a further application on 27 June 2018, and two further Amended Applications Alleging Contravention on 13 November 2018.
The orders the subject of the alleged contraventions were as follows:
…
2.        The respondent be restrained by an injunction and in (sic) injunction his (sic) hereby granted restraining him from selling, transferring, encumbering or otherwise disposing of any asset in which he has an interest of whatsoever nature exceeding $1000.00 in value, save in the ordinary course of business.
3.        Prior to selling, transferring, encumbering or otherwise disposing of any asset of whatsoever nature exceeding $1000.00 pursuant to the preceding order, the respondent shall course (sic) to be provided to the applicant’s solicitors not less than seven days written notice of this (sic) intention to deal with such asset and particulars of how the proceeds (if any) are to be applied.
…
5.        The respondent pay or cause to be paid to the applicant solicitors (sic) trust account the sum of $30,000.00 within 14 days of the date of these orders to meet her legal expenses and the characterisation of the payment be adjourned for determination by the Trial Judge.
6.        Within 42 days from the date of these orders, the parties update their disclosure and file an undertaking as to disclosure in the form required by the rules annexing a copy of the disclosure list.
…
On 20 December 2017, the husband’s parent’s home was broken into and his laptop, the ledger Nano wallet containing details of the purchased cryptocurrency, and the packaging box for the Nano wallet which contained the password to access the cryptocurrency, if the Nano wallet was ever lost or stolen, were stolen.
The alleged contraventions were that:
a)On 7 December 2017 the husband caused the transfer of separate amounts of $7,000 and $8,000 from an ZC account into the AQ cryptocurrency account;
b)On 7 December 2017 the husband caused the transfer of $10,000 from the ZC account into the SL cryptocurrency account;
c)On 8 December 2017 the husband caused the transfer of $8,000 from a P account into the AQ cryptocurrency account, and $10,000 from the P account into the SL cryptocurrency account;
d)On 11 December 2017 the husband caused the transfer of two separate amounts of $8,000 from the P account into the AQ cryptocurrency account, and $30,000 from the P account into the SL cryptocurrency account;
e)On 12 December 2017 the husband caused the transfer of $10,000 from the P account into the SL cryptocurrency account and $8,000 from the P account into the AQ cryptocurrency account;
f)On 13 December 2017 the husband caused the transfer of $10,000 from the P account into the SL cryptocurrency account and $8,000 from the P account into the AQ cryptocurrency account;
g)On 14 December 2017 the husband caused the transfer of $10,000 from the P account into the SL cryptocurrency account and $8,000 from the P account into the AQ cryptocurrency account;
h)On 15 December 2017 the husband caused the transfer of $10,000 from the P account into the SL cryptocurrency account and $8,000 into the AQ cryptocurrency account;
i)On 18 December 2017 the husband caused the transfer of $8,000 from the P account into the AQ cryptocurrency account and $10,000 from the P account into the SL cryptocurrency account;
j)On 21 December 2017 the husband failed to pay the sum of $30,000 into the wife’s solicitor’s trust account;
k)On 18 January 2018 the husband failed to file an undertaking as to disclosure.
In relation to the contraventions set out in [9] above, the transfers detailed in a) – i) were not in the normal course of business, prior to causing the transfers the husband did not give notice and did not give particulars of how the funds were to be applied, and the husband’s actions were conducted knowingly in breach of orders 2 and 3 made on 7 December 2017.
In relation to the contravention detailed in [9] j) above, which was in breach of paragraph 5 of the orders, the wife took separate enforcement proceedings, and on 5 June 2018 orders were made which required the sale of a boat. That sale took place, and in September 2018 the funds were provided to the wife’s solicitors in satisfaction of paragraph 5 of the orders.
All of the contraventions were admitted by the husband, and the orders as to penalty which are the subject of this appeal are as follows:
1The Respondent, MR LESCOSKY, be and is hereby fined:
(a)the sum of $54,000.00 in respect of his admitted contraventions without reasonable excuse of paragraphs 2 and 3 of the orders made 7 December 2017 (“the orders”); and
(b)the sum of $5,250.00 in respect of his admitted contravention without reasonable excuse of paragraph 5 of the orders;
(collectively “the sums”).
2The sums are to be paid from the Respondent’s property entitlements as determined by the Trial Judge following the trial listed to commence not before 22 October 2019.
3In the event that the respondent’s entitlements as determined by the Trial Judge are insufficient to meet the sums, then the sums be paid within 90 days of final orders being made.
…

The Appeal

Ground 1

The total effective sentence/penalty does not bear a proper relationship to the overall criminality involved in all of the offences viewed in their entirety and having regard to the circumstances of the case, including those referrable to the [husband] personally. In other words, the total effective sentence breached the first limb and second limb of the totality principle.

The first point to note about this ground of appeal, and the husband’s summary of argument in support of it filed on 17 February 2020, is that it is not the case that the court below in imposing sanctions for contraventions, must apply any so-called principle of sentencing, whether that comes from the common law or from any State or Federal statute, apart of course, from what appears in the Family Law Act 1975 (Cth) (“the Act”) (Abduramanoski and Abduramanoska (2005) FLC 93-215; Myers and Myers (2006) FLC 93-291 (“Myers”)).
Part XIIIA of the Act provides an exclusive code for dealing with breaches of orders under the Act (Schwarzkopff and Schwarzkopff (1992) FLC 92-303 (“Schwarzkopff”)).
Thus, it is not open for the husband to assert error by the Magistrate in failing to follow the “Totality Principle”, or failing to apply s 6 of the Sentencing Act 1995 (WA) or s 16A of the Crimes Act 1914 (Cth). Further, there is ample authority to the effect that “review of the punishments in other cases is of limited assistance, as each case really depends upon the Court’s assessment of the relevant facts” (Australian Securities and Investments Commission v Michalik [2004] NSWSC 1259 at [49], cited with approval in Myers at 80,978).
In s 112AD, the Act affords a sanctioning judicial officer a wide discretion, but one which is to be exercised transparently and in light of the individual facts and circumstances of the case (Schwarzkopff at 79,287-79,288).
The task for her Honour was to fix a sanction or sanctions that her Honour considered to be the most appropriate in the circumstance (s 112AD). And the sentencing options are set out in s 112AD(2) as follows:
112AD(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.
The wife submitted that the husband’s conduct was of such a serious nature that the imposition of a prison sentence was appropriate. Thus, her Honour was first required to address that submission, and she did that taking into account the circumstances of not only the contraventions, but the effect of the same, the likelihood of recovery of the funds, the impact of imprisonment of the husband upon the children of the relationship, and the fact that the trial of the matter was yet to be heard. Her Honour then concluded as follows:
31 On reflection, I do not consider that in all the circumstances of this case a term of imprisonment is appropriate It is clear from the provisions of section 112AE that imprisonment should be considered as the punishment of last resort.
32 I consider that the husband’s admitted contraventions with respect to the transfer of funds to purchase cryptocurrency should be dealt with by way of fine rather than in any other way.
As to the imposition of a fine, it is important to note that that was the sanction sought by counsel for the husband, namely that a term of imprisonment was inappropriate, and instead a fine should be imposed (Transcript 1 July 2019, p.14 lines 13-22).
However, and this is the principal issue in relation to this ground, the submission of counsel was not a fine for each contravention, but one fine for all of the contraventions, on the basis that they comprised one action, and the fine should be at the upper end of the permissible limit for one contravention, namely $12,200 (sic).
What of course her Honour did was impose a fine of $3,000 for each of the 18 contraventions, and aggregate those fines, arriving at a total fine of $54,000. Despite the submissions by the husband’s counsel at the hearing below, it is not now suggested that her Honour was not able to do that under s 112AD. Indeed, her Honour correctly proceeded on the basis that s 112AD(2)(c) “is read as applying to an individual contravention” (at [33]).
What is contended is that in fixing the fines, her Honour should have balanced the total fine against the criminality involved, and the circumstances of the case, including the husband’s personal circumstances. However, that is precisely what her Honour did. Her Honour said this:
33 Section 112AD(2)(c) of the Act allows a court to fine a person not more than 60 penalty units. That provision is read as applying to an individual contravention. Currently a penalty unit is the equivalent of $210.00 meaning that the maximum allowable for each contravention without reasonable excuse is $12,600.00. Generally, fines at the top end of the range are reserved for the most serious of contraventions. The husband concedes that any fine imposed could be at the upper end of the range.
34       The size of the fine in respect of the transfers of funds should be fixed taking into account, amongst any other relevant considerations:
·the fact that the contraventions were conducted knowingly; and
·the maximum penalty available being 60 penalty units for each contravention;
·that there are 18 transfers of funds in breach of orders over an 11 day period with the total amount transferred being $180,000.00;
·that the husband has expressed contrition with respect to his admitted conduct and these are the first contraventions for which he is to be sanctioned.
35       A fine of $12,600.00 being at the maximum prescribed limit for each contravention is not appropriate given the number of admitted contraventions and the quantum of funds involved. A fine of that amount could not be characterised as appropriate. On balance, I am of the view that a fine should be imposed of $54,000.00 for the admitted breaches to paragraphs 2 and 3 of the orders. I am mindful that the fine is at the lower end of the spectrum for each individual breach, however the total is a significant sum.
36       For reasons set out above, I do not consider a term of imprisonment is appropriate for the husband’s failure to comply with the order that he provide $30,000.00 to the wife’s solicitors on account of the wife’s legal fees.
37       The relevant order has been complied with, albeit following enforcement proceedings commenced by the wife the wife was put to expense and inconvenience as a result of the husband’s breach. In the circumstances a fine of 25 penalty units, being $5,250.00 will be imposed.
38       The husband did not put evidence before the court with respect to his failure to file an undertaking as to disclosure. In any event, this admitted breach is the less serious of all of those for which the husband is to be sanctioned. In the circumstances, and noting that for reasons set out above the respondent is to be find (sic) a significant sum, I do not intend to impose a further sanction for the husband’s failure to comply with a requirement that he file an undertaking as to disclosure.
39       I will order that the fines imposed upon the husband are to be met from his entitlements as might be determined by the Trial Judge, so as not to reduce amounts that might be payable to the wife as and by way of property settlement.
As can be seen, there her Honour also dealt with the other contraventions, and it is important to record that, as well as, how her Honour proposed that payment of the fines be made by the husband, namely from his entitlement in the property settlement proceedings.
Thus, I am not persuaded of any error by her Honour as asserted in this ground of appeal.
Indeed, as it happened, her Honour did what the husband said the sentencing principles and the decided cases required her to do. For example, she identified the maximum allowable fine for each contravention (at [33]), and gave consideration to what each fine should be (at [35]), concluding “that the maximum prescribed limit for each contravention is not appropriate given the number of admitted contraventions and the quantum of funds involved”. Her Honour added that she was “mindful that the fine is at the lower end of the spectrum for each individual breach, however the total is a significant sum” (at [35]).
That approach accords with what the husband has described as the “Totality Principle” (husband’s summary of argument filed on 17 February 2020, paragraph 3), with the quote relied on by the husband from the decision of Gummow, Callinan and Heydon JJ in the High Court case of Johnson v The Queen (2004) 205 ALR 346, namely at [18] where their Honours quoted from the case of Mill v The Queen (1988) 166 CLR 59 at 63 that:
…when … cases of multiplicity of offences come before the court, the court must not content itself by doing the arithmetic and passing the sentence which the arithmetic produces. It must look at the totality of the criminal behaviour and ask itself what is the appropriate sentence for all the offences.
There is also what was said by Grey J in the decision of the Full Court of the Federal Court of Australia in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 246 ALR 35 at [23]:
…What the magistrate was required to do in the present case was to determine an appropriate level of penalty for each contravention, as if it were a separate offence, and then to look at the aggregate of those penalties in the light of the overall conduct of the appellant, to form a view as to whether that aggregate was out of proportion to that overall conduct.
And further, there is what Goldberg J said in Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd and Others (1997) 145 ALR 36 at 53:
The totality principle is designed to ensure that overall an appropriate sentence or penalty is appropriate and that the sum of the penalties imposed for several contraventions does not result in the total of the penalties exceeding what is proper having regard to the totality of the contravening conduct involved…

In these circumstances there is no merit in this ground of appeal.

Ground 2

The Magistrate did not give any or proper consideration to the sentencing alternatives available pursuant to 112AG(1) of the Family Law Act including a Community Service Order or a work Order.

This is not a ground of appeal that can be sustained. As referred to above, the husband’s own counsel submitted that the appropriate sanction was a fine. Thus, her Honour did not need to look at any alternative sanctions.
There is no merit in this ground of appeal.

Ground 3

That the magistrate failed to give proper consideration to the fact that the 18 contraventions relating to the transfer of funds comprised essentially “one course of action” and her reference to the maximum penalty for each individual contravention indicates that she considered that that number of contraventions, as opposed to their overall impact, were foremost in the Magistrate’s mind when applying the penalty.

Again, the husband has misguidedly sought to rely on the Sentencing Act 1995 (WA), and a comparison with sentences imposed in other cases.
Plainly, her Honour determined to treat each transfer of money by the husband as a discrete breach of the relevant orders. That was open to her Honour, there being no denying that each transfer was in fact a breach of the orders.
It is also not to the point to suggest, as the husband did, that the amounts could have been transferred in one amount. That did not happen, and it must not be forgotten that each transfer was done with a specific and deliberate purpose, namely to purchase separate amounts of cryptocurrency.
It was certainly one course of conduct in that ultimately the husband transferred a total of $180,000 over 11 days to purchase cryptocurrency, but he did it in 18 separate and discrete transactions, each in breach of the relevant orders. Further, it matters not why he did it that way, because he has admitted that each transfer was in breach of the relevant orders, and was done without reasonable excuse.
Again, there is no merit in this ground of appeal.

Ground 4

That the magistrate failed to consider authorities in sentencing including the total monetary value involved in the contravention in comparison to the case of Hay v Hay (1998) FLC 92-819 where the sentence differs significantly in severity between cases and their monetary values of contravention and fines.

This is another ground of appeal that cannot be sustained. As referred to above, Pt XIIIA of the Act provides an exclusive code for dealing with breaches of orders under the Act, and a comparison of penalties imposed in other cases is of limited assistance, given that each case depends on the court’s assessment of the facts.
Her Honour was not obliged to make comparisons with any other authorities, and no error is demonstrated by her Honour not doing so to the extent suggested by the husband.
Her Honour did refer to the decision of the Full Court in Hay v Hay (1998) FLC 92-819, being a case cited to her, and relied on by the husband. The relevance of that case though was that the Full Court set aside a penalty of imprisonment for contravening an injunction, and in re-exercising the discretion, the Full Court imposed a fine. Thus, her Honour took that into account in determining that a sentence of imprisonment was not appropriate in this case.
The husband went further though and submitted that her Honour should have used that case as a guideline for what fine to impose. However, the facts were quite different, as one would expect, and there was no warrant for her Honour to do as suggested by the husband.
There is no merit in this ground of appeal.

Ground 5

That the Magistrate failed to give adequate consideration to the [husband’s] capacity to meet the fine imposed and within the time frame proposed with his unemployed status and in circumstances, where, when adding back the funds that are the subject of the contravention (which are unrecoverable) any tangible assets to be retained by the [husband] in the final property settlement are likely to have been insufficient to meet the fine imposed.

The difficulty with this ground of appeal is that despite what is asserted by the husband, it was not known to her Honour what the outcome of the property settlement proceedings would be (at [28]). Her Honour though proceeded on the basis that the husband’s entitlement would be sufficient to meet the fines she was imposing, but out of abundant caution her Honour also ordered that if there was a shortfall, the husband had 90 days to make the payment required.
Thus, her Honour was acutely aware of the capacity of the husband to pay the fines imposed.
Her Honour also noted in detailing the husband’s case, and again, unlike what is now asserted by the husband, “that [the husband] considers that he can make good any loss” (at [14]).
Again, the husband misguidedly suggests that her Honour failed to comply with the Sentencing Act 1995 (WA), but to repeat, that Act had no application here.
There is no merit in this ground of appeal.

Ground 6

The penalty imposed by the Magistrate does not reflect to an early guilty plea and contrition expressed by the [husband], as her Honour has made note in her Reasons for Decisions, in comparison with sanctions from other cases.

Certainly, “expressions of contrition” and “entering an early guilty plea” are relevant matters for a sentencing judicial officer to take into account.
However, it has not been demonstrated that her Honour failed to take such matters, if present, into account.
As to the suggestion of an early plea, that was disputed by the wife on the basis that the plea was only made on the day of the hearing (at [17]). That timing was not disputed by the husband, and thus that would not be a mitigating factor as suggested by him.
As to the expression of any contrition, her Honour not only referred to that, but clearly took it into account in imposing penalty (at [34]).
Again, in support of this ground, the husband misguidedly attempts to suggest that her Honour erred by failing to have regard to other authorities. However, I do not propose to repeat what I have said above about that submission.
There is no merit in this ground of appeal.

Conclusion

There being no merit in any of the grounds of appeal, the appeal must be dismissed.
The wife took no part in the appeal, and thus there is no issue of costs that arises consequent upon the dismissal of the appeal.

I certify that the preceding fifty-four (54) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Strickland delivered on 28 July 2020.

Associate:

Date: 28 July 2020