LGM & CAM (Contempt) (No 2) - [2008] FamCAFC 1

FAMILY COURT OF AUSTRALIA

LGM & CAM (CONTEMPT)

[2008] FamCAFC 1

FAMILY LAW - APPEAL – Second hearing by a Full Court on remission from the High Court – From decision of Family Court Judge – CONTEMPT – Contravention of court order – Sanctions – Wife seeking that the orders for imprisonment be set aside, the husband’s contempt application be dismissed and that the husband pay costs – In property settlement proceedings interlocutory orders were made restraining the wife from dealing with real property pending division of the matrimonial assets – Contrary to those orders, the wife mortgaged real property, in which she had a half interest, to secure a loan – The wife also sold a property – Arising out of those transactions the husband brought an application for contempt – The wife did not give evidence or call witnesses – The trial Judge found that the wife’s actions constituted contempt – The wife afterwards gave evidence of steps taken by her to purge her contempts – The wife also made offers in relation to paying the husband’s costs of the contempt proceedings – The wife was sentenced for a total period of six months’ imprisonment – The wife was ordered to pay the husband’s costs of the contempt proceedings on an indemnity basis – Whether the trial Judge erred in concluding as a fact that the wife was aware of the terms of the orders and that the orders had been made – Whether the trial Judge should have found that the absence of special service by hand of the amended application for contempt resulted in the failure of the application – Whether incorrect conclusions were drawn in respect to the wife’s attempts to purge her contempt; whether the penalty was plainly unjust; argued that in ordering indemnity costs, the trial Judge failed to take account of the absence of evidence as to the basis upon which the husband’s costs were charged or their quantum; and that the trial Judge wrongly took into account findings central to the conclusion of contempt, for which the wife had already been punished

Family Law Act 1975 (Cth) ss 112AD(1); 112AP; 117
Family Law Rules 2004 r 7.02(1) 7.03; 7.06(1); 19.08(3)

Angelis and Angelis (1978) FLC 90-503
Australian Consolidated Press v Morgan (1965) 112 CLR 483
Croser v Attrill (1990) FLC 92-100
DAI v DAA (2005) FLC 93-215
G v H (1994) 181 CLR 387
Kohan and Kohan (1993) FLC 92-340
PDM & JEM (2006) FLC 93-291
S and S (unreported, delivered 22 July 1996)
Weissensteiner v R (1993) 178 CLR 217

APPELLANT:

LGM

RESPONDENT:

CAM

FILE NUMBER:

SYF

3359

1997

APPEAL NUMBER:

2005

DATE DELIVERED:

10 January 2008

PLACE DELIVERED:

Brisbane

PLACE HEARD:

Sydney

JUDGMENT OF:

Bryant CJ, Finn and Warnick JJ

HEARING DATE:

9 October 2007

LOWER COURT JURISDICTION:

Family Court of Australia

LOWER COURT JUDGMENT DATE:

30 May 2005

LOWER COURT MNC:

[2005] FamCA 417

REPRESENTATION

COUNSEL FOR THE APPELLANT:

Mr Richardson SC with Mr Cook

SOLICITOR FOR THE APPELLANT:

Kennedys Law Firm

COUNSEL FOR THE RESPONDENT:

Mr Bedrossian

SOLICITOR FOR THE RESPONDENT:

Etheringtons Solicitors

Orders

That the appeal against orders 1 to 5 of Cohen J made 30 May 2005 be dismissed.
That the appeal against the costs order (order 3) of Cohen J made 30 May 2005 be allowed.
That within 21 days of this day the wife file and serve any such further submissions as she wishes in writing in respect of:
(i)The application by the husband against the wife for indemnity costs in respect of the amended application for contravention filed 2 September 2004;
(ii)The costs of the appeal to the Full Court, determined by orders made on 25 August 2006;
(iii)The costs of the appeal to this Court.
That within 21 days after service of any submissions made in accordance with order 3 hereof or from the expiry of the time for submissions referred to in that order, the husband file and serve such submissions in writing as he wishes to make in respect of the issues referred to in order 3 hereof.
That the wife file and serve any submissions in reply within 14 days of service of the husband’s submissions.

IT IS NOTED IN CONNECTION WITH THESE ORDERS that the judgment of the Full Court delivered this day will for all publication and reporting purposes be referred to as LGM and CAM (Contempt) (No 2).

THE FULL COURT OF THE FAMILY COURT OF AUSTRALIA AT SYDNEY

Appeal Number: EA 63 of 2005

File Number: SYF 3359 of 1997

LGM

Appellant

And

CAM

Respondent

REASONS FOR JUDGMENT

BRYANT CJ AND WARNICK J:

In property settlement proceedings between [LGM] and [CAM], interlocutory orders made in September 1999 restrained both the husband and the wife:
…from selling, transferring, encumbering, alienating or otherwise dealing with any real property in which they currently have an interest.
On 20 December 2001, the wife mortgaged real property referred to as [the QLD property] in which she had a half interest, to secure a loan of $300,000.00. Her sister … held the other half interest. On 14 February 2003, the wife sold her interest in a property at [NSW] for $144,500.00.
Arising out of these transactions, the husband brought an application that the wife be dealt with for contempt. The hearing of that application took place over two days in early December 2004. The wife did not call evidence. On 17 December 2004, Cohen J delivered reasons for findings about issues relating to service of the husband’s application, duplicity and ambiguity in that application, the wife’s knowledge of the fact of, and meaning of, the order allegedly breached and whether the wife’s actions constituted contempt. In relation to the last question, Cohen J concluded that the wife’s actions did constitute contempt. Subsequently, over a number of days in the first half of 2005, Cohen J heard evidence and took submissions relating to the orders that ought be made consequent on the findings of contempt. In this part of the hearing, the wife gave evidence and called other witnesses. The wife said that she had taken a number of steps towards purging her contempts, including arranging for the mortgagee of the [QLD] property to discharge the mortgage (the lender thereby becoming an unsecured creditor) and borrowing from a friend the sale price of the [NSW] land ($144,500.00) and placing that amount in her solicitor’s trust account “…to be accounted for as a matrimonial asset in the s 79 proceedings.” (Judgment of Cohen J on 30 May 2005).
In addition, the wife offered to pay the husband’s costs of the contempt proceedings at least initially on a party/party basis.
On 30 May 2005, for reasons he then gave, Cohen J sentenced the wife to four months imprisonment for each of the two contempts of the orders (two months of each term to be served concurrently). He also ordered, for reasons he gave in a separate judgment, that the wife pay the husband’s costs of the contempt proceedings on an indemnity basis.
These reasons are for the disposition of the wife’s appeal against the orders of Cohen J. In circumstances which we will shortly describe, it is the second hearing by a Full Court in respect of the appeal.
The grounds of appeal challenge the findings in the 17 December 2004 judgment in two respects:
·that the trial Judge erred in “concluding as a fact that the [wife] was aware of the terms of the orders made by Rose J on 7 September 1999 and that the order had been made; and
·that Cohen J should have found that the absence of special service by hand of the amended application for contempt resulted in the failure of the application.
In relation to the 30 May 2005 judgment, the challenges are that Cohen J:
·drew incorrect conclusions in respect of the wife’s attempts to purge her contempt;
·imposed a plainly unjust penalty;
·in ordering indemnity costs, failed to take account of the absence of evidence as to the basis upon which the husband’s costs were charged or their quantum; and
·wrongly took into account findings central to the conclusion of contempt, for which the wife had already been punished.
In her Notice of Appeal, the wife seeks that the orders for imprisonment and indemnity costs made by Cohen J on 30 May 2005 be set aside; that the husband’s application for contempt be dismissed; and that the husband pay her costs of the appeal and of the proceedings before Cohen J.

Background to the appeal hearing before us

The wife’s appeal came before a Full Court (Holden, Coleman and May JJ) on 6 September 2005. That Court gave judgment in respect of part of the appeal on 6 June 2006. In respect of grounds 1 and 2 of the Notice of Appeal, being those grounds asserting error in Cohen J’s conclusion that the wife was aware of the terms of the orders made by Rose J on 7 September 1999, their Honours Holden and Coleman JJ concluded that the appeal ought succeed. Their Honours recorded the “crux of the challenge” for the wife to have been contained in the submission that:
…independently of any general principle about available inferences from silence, it is submitted that in this instance his Honour has drawn inference from the appellant’s failure to volunteer to adduce evidence of her “informed instructions” or, perhaps, of the communications between herself and her lawyers by which her instructions became so informed. In each instance these are matters that are subject of legal professional privilege and the prohibition, as observed earlier, upon drawing any adverse inferences as a consequence of reliance upon the privilege is absolute. Indeed, if the law were to the contrary and permitted the drawing of adverse inferences from the exercise of the privilege this would constitute a substantial erosion of the privilege and in some circumstances render it valueless.
Their Honours dealt with the argument about drawing inferences from silence about matters to which legal professional privilege attached, as follows:
87.We are unable to discern how, in the circumstances before him, the trial Judge could have been satisfied beyond reasonable doubt that the wife knew the contents and meaning of the 1999 orders unless that had arisen as a result of or in circumstances involving a communication, of the kind referred to in s 118 or s 119 of the Evidence Act. No other basis upon which the wife might have acquired such knowledge has been advanced, nor, given that there is no evidence that the wife was ever served with the order, or any document containing a copy of it, or in Court when the orders were made, would such a basis appear likely. Whilst the trial Judge clearly recognised that he had to be satisfied beyond reasonable doubt that the wife knew the “contents and meaning” of the order or orders which she was alleged to have breached, he could only have been satisfied in reliance upon admissible evidence. In our view, the only evidence which could have established the requisite “knowledge” on the part of the wife was evidence which, by virtue of s 118 or s 119, could not in the circumstances have been relied upon by him. The judgment of Murray J in Angelis, cited earlier, is apposite in this respect. Nothing advanced by learned Senior Counsel for the husband in relation to the provisions to client legal advice, or Part 3.10 of the Evidence Act generally militates against this conclusion.
88.Nothing to which we have been referred establishes that the wife expressly or impliedly waived her privilege with respect to the communications pursuant to which she may have come to know the content and meaning of the injunctive orders. Indeed, the conduct of her defence to the husband’s application is utterly inconsistent with any such waiver.
Their Honours then turned to another aspect of grounds 1 and 2, saying:
89.It remains to consider the extent to which the trial Judge was entitled to rely upon the wife’s silence in relation to the issue of her knowledge of the orders which she breached. …
The way in which their Honours dealt with this question can be gleaned from the following passages:
94.Against the background of those authorities, it is necessary to consider whether, in the circumstances of this case, the trial Judge was entitled to rely upon the failure of the wife to “offer an explanation” in relation to her knowledge of the content and meaning of the orders which she breached, given that such matters could only have been “within the knowledge” of the wife.
95.We have earlier quoted paragraph 44 of the trial Judge’s reasons for judgment (see paragraph 64). Although not so expressed, in substance, his Honour’s statement can be interpreted as suggesting that the wife’s silence caused the “hypotheses consistent with innocence” to “cease to be rational or reasonable in the absence of evidence to support them” given that such evidence “if it exists at all, must be within the knowledge of the accused”. If, as Senior Counsel for the husband would contend, it was open to the trial Judge to reach that conclusion on the evidence, his Honour would have been entitled to rely upon the wife’s failure to “offer an explanation” in the manner, and on the basis explained by the High Court in the authorities to which we have referred.
…
97.In our view, the facts and circumstances relied upon by Senior Counsel for the wife provided a foundation for “hypotheses consistent with innocence”. The failure of the wife to give evidence in support of them did not in our view cause such “hypotheses consistent with innocence” to “cease to be rational or reasonable”, as the foundation for those hypotheses remained, and was unaffected by, the wife’s exercise of her right to remain silent. No evidence adduced on behalf of the husband gave rise to circumstances in which the wife’s silence constituted a “failure to provide an explanation or answer”. In those circumstances, we are not persuaded that the case was one of those “rare and exceptional” cases in which the trial Judge was entitled to rely upon the “failure of an accused to offer an explanation”. Without the evidence of the wife, which we have concluded to have been inadmissible, there was no evidence which imposed upon the wife any obligation to provide “an explanation”. In those circumstances, with all due respect to him, the trial Judge’s reliance upon the wife’s silence could only have been for the purpose which the High Court has made clear, in the authorities to which we have referred, was impermissible. The effect of so doing was to relieve the husband of the requirement to prove an essential element of his case, and impose upon the wife an unjustifiable evidentiary onus.
98.Whilst the Court may suspect that the wife well knew of the injunctive orders, the absence of admissible evidence to establish that state of affairs precluded the trial Judge from finding the wife in contempt of the Court’s orders pursuant to s 112AP. …
Having dealt with grounds 1 and 2 and concluded that the appeal was to be allowed, Holden and Coleman JJ considered it unnecessary to decide the remaining grounds of appeal:
…save to record that, the findings of contempt necessarily having to be set aside, so too must the trial Judge’s orders in relation to the imprisonment of the wife and the payment of costs.
Their Honours further considered that, having delivered their reasons, they ought not make orders allowing the appeal, but would await further submissions on the question of remission or dismissal of the husband’s contempt application.
May J, for reasons she gave, decided that the conclusions of the trial Judge which grounds 1 and 2 attacked were open to him and that the appeal should be dismissed.
Following the receipt of further submissions on 25 August 2006, the Full Court ordered that the wife’s appeal be allowed, the orders of Cohen J be set aside, the husband’s amended application for contempt be dismissed, the wife’s appeal against the order for costs made against her on 30 May 2005 be dismissed and there be no order for costs of the wife’s appeals. The court published supplementary reasons.
The husband obtained special leave to appeal to the High Court of Australia, in respect of the matters raised in grounds 1 and 2 of the wife’s appeal to the Full Court of this Court.
On 22 May 2007, the High Court (Gleeson CJ, Hayne, Callinan, Heydon and Brennan JJ) ordered that the appeal against part of the judgment of the Full Court of 25 August 2006 be allowed; that the orders of that day be set aside and “the matter be remitted to a differently constituted Full Court of the Family Court of Australia for hearing and determination in accordance with the reasons of this Court”. The High Court also ordered that the costs of the appeal to the Full Court, including the costs of the proceedings in that Court up to and including its order of 25 August 2006, be reserved to the Full Court hearing the appeal on remission. The High Court ordered that the wife pay the husband’s costs of the appeal to that Court.
The Chief Justice delivered reasons for the orders made, with which reasons the other members of the Court agreed. Of relevance for the appeal before us are the following passages:
…Since the most likely source of the [wife’s] knowledge of the order was her solicitor, the majority appeared to think that drawing an inference that she knew of the order would in some way be inconsistent with legal professional privilege. There is no such inconsistency.
No question of legal professional privilege arose in the proceedings before Cohen J. Neither the respondent nor her solicitor gave evidence, nor was there any attempt on the part of the appellant to adduce any evidence about communications between the [wife] and her solicitor. The rule relating to legal professional privilege does not prevent the drawing, from events and circumstances, of inferences about the knowledge of a party, even if the probable source of such knowledge is a privileged communication. It is a rule that precludes the adducing of evidence in certain circumstances, but it is a rule that had no bearing on the present case.
…
The majority in the Full Court also criticised that part of the reasons of Cohen J in which he said:
“It is inconceivable in the absence of any suggestion to that affect that the applications made to the Judicial Registrar and to Justice Rose were made without the wife’s informed instructions to make them. …”
… In the present case all that Cohen J did was to point to the incontrovertible fact that he was dealing with the question of inferences to be drawn from the events and circumstances of the case in the absence of any countervailing evidence that might have been given by the respondent or her solicitor. It was a fact he could hardly have ignored. He simply pointed to the fact that the evidence upon which he had to decide the case was that adduced by the present appellant and he then asked himself legitimately what was the inference to be drawn in that state of affairs.
Because the majority in the Full Court of the Family Court erroneously considered that the law relating to legal professional privilege was an impediment to the drawing by Cohen J of the inference that he drew, and by implication concluded that the law similarly precluded the Full Court from drawing any such inference, the parties to the appeal to the Full Court have not had a proper consideration of the first of the grounds of appeal to the Full Court, which was that Cohen J erred in concluding as a fact that the respondent was aware of the terms of the orders made by Rose J on 7 September 1999 and that the order had been made.
This court does not have before it the evidence necessary to enable it to reach a conclusion on that first ground of appeal. We are in a position to conclude that the Full Court erred in law in its approach to its consideration of the decision of Cohen J but it remains to the Full Court to deal with the first ground of appeal upon proper principles consistently with the reasons of this court in this appeal.
Upon a further hearing by a differently constituted Full Court of the Family Court it will be open to the parties to canvass the whole of the evidence that was before Cohen J and to do that in the light of this court’s identification of the errors made by the majority of the Full Court in the judgment which gives rise to this appeal.

The arguments on this appeal

Ground 1 of the Notice of Appeal reads as follows:
1.That his Honour erred in concluding as a fact that the appellant was aware of the terms of the orders made by Rose J on 7 September 1999 and that the order had been made.
The argument in support of this ground focuses on paragraphs 44 and 45 of the reasons of Cohen J of 17 December 2004. Those paragraphs read:
44.In the matter before me the order allegedly breached was made on the application of the respondent. An identical order had been made ex parte by Judicial Registrar Johnston on 30 August 1999. It was made in the terms of the interlocutory application which had been filed on behalf of the wife. On the return day, 7 September 1999, Justice Rose, after a defended application continued the orders made by the Judicial Registrar. It is inconceivable in the absence of any suggestion to that effect that the applications made to the Judicial Registrar and to Justice Rose were made without the wife’s informed instructions to make them or that she did not know the orders she had sought were made in the form she had sought and therefore that she did not know the contents and meaning of Justice Rose’s order.
45.The respondent must have asked for costs for the application before Justice Rose. Her costs were assessed by Justice Rose at $2,000.00, but the issue of whether they would be awarded to her against the husband was reserved. Again, it is inconceivable that in the light of the costs application and order that she did not know the order made by Justice Rose in the terms she had sought had been made. That she did is, in my assessment, proven beyond reasonable doubt. It is proven to the same standard that she had all the knowledge required to establish contempt before she committed the acts in breach of the orders. She knew the contents and meaning of the order of Justice Rose.
In his written submissions Mr Richardson, Senior Counsel for the wife, summarised the findings in the paragraphs quoted above and then added from the record other matters that fell for consideration, these being:
·There was no evidence that the wife had ever been served with the orders of either 30 August 1999 or 7 September 1999;
·There was no evidence to suggest that the wife was present in court on either 30 August 1999 or 7 September 1999;
·The application filed on her behalf bore an endorsement to state that it was prepared by her then attorney rather that the wife herself;
·None of the affidavit material tendered by the applicant contained any admission by the wife of her knowledge of the orders of 30 August 1999 or 7 September 1999 at or prior to the time of the breaches.
Thus, in his written submissions, Mr Richardson argued:
The primary judge has reached his conclusions by a fact finding process that is dependent upon inference.
In relation to such a process Mr Richardson further argued that a finding of guilt should not be made:
…unless the circumstances are such as to be incompatible with any reasonable hypothesis other than the guilt of the accused or unless guilt is the only rational inference which the circumstances enable [the jury] to draw. By a grammatical inversion the jury may be instructed that they are bound to acquit if the circumstances in their view are susceptible of a reasonably possible explanation consistent with innocence. (Glass JA “The Insufficiency Of Evidence To Raise A Case To Answer” (1981) 55 ALJ 842 at 852-3).
Mr Richardson submitted that among other possible and equally probably inferences, the following arose:
·That the appellant had not seen the precise terms of the application of the ultimate orders;
·Having given her solicitor broad instructions as to her desire to obtain an injunction against the husband she may have left it to the solicitor to formulate an order in terms that were most likely to succeed – he may have thought an order directed to both parties seemed more balanced and likely to succeed (the very nature of the order is such that one would not logically expect the impetus to come from the appellant to seek an order against herself);
·The solicitor may never have explained to the appellant that the order that he sought on her behalf was not only to her benefit but directly imposed obligations against her;
·The making of an application for costs, upon which his Honour seems to have placed considerable weight, may not have involved specific instructions from the appellant at all, but counsel appearing may have, upon forming the view that there were reasonable prospects of success, taken the view that it was within the scope of his or her general retainer to make such an application. The process of inference adopted by his Honour concludes that the respondent must have been aware of the successful terms of the order to thereby provide the instruction to pursue the costs application; and
·The solicitor may never have told the appellant anything more than that she was successful in obtaining the injunction, in circumstances where she never appreciated its precise terms, or, that it was directed to her.
Mr Richardson drew an analogy between the case under appeal and Angelis and Angelis (1978) FLC 90-503 at p 77,635 where Murray J said:
I do find however that the fact that the husband’s counsel was in court at the time of the making of the order is not proof that the husband received adequate notice of the order. It cannot be assumed that the relevant information has reached the husband.
Analogies can at times be a useful tool of reasoning, particularly where principles and their application are being compared. They are of much less utility where inferences of fact are involved when, as here, while the essential question under consideration is the same, the established facts from which inferences might be drawn are different.
This observation is exemplified by the reference which appears in Mr Richardson’s written submissions to Croser v Attrill (1990) FLC 92-100, where Nicholson CJ (with whom Baker and Moss JJ agreed) said in respect of evidence before a trial Judge on an application for contempt:
I do not propose to discuss her Honour's reasons for arriving at this conclusion in any detail but it is sufficient I think for present purposes for me to say that I disagree with her Honour's findings, if the matter had stood as it stood before her Honour purely upon the basis that an order had been made and the various proceedings which I have outlined occurred.
I say that because although it has been held in this Court in Angelis v Angelis (1978) FLC 90-503 at page 77,635, that the mere presence of a solicitor for a party does not entitle the Court to draw the inference that this means that the party has knowledge of an order made, it seems to me that the present case is and stands in an entirely different light than the situation that applied in that case.
In particular, it is, in my view, of considerable significance that the same solicitor and counsel throughout appeared for the husband and the same solicitor and counsel consented during the course of the proceedings to a variation of the original order. In those circumstances, I should have thought that the clearest inference arose from the fact of that consent that the husband was well aware of the order and had given instructions for the giving of such consent.
I find it inconceivable that counsel would consent to an order of this sort without instructions. …
As to Mr Richardson’s submissions earlier set out about the reference by Cohen J to the costs order made on 7 September 1999 we do not read paragraph 45 of Cohen J’s reasons as a finding that, in sequence, the wife was specifically informed on 7 September 1999 of the success of her application with regard to the restraints and in response, she instructed that an application for costs be made. As Mr Richardson suggests, the costs order may have been sought on 7 September 1999 by counsel, without specific reference on that day to the wife. In our view, Cohen J was saying no more than that the fact that costs were sought and an order was made was a circumstance to be added to the others, to which he made reference in the paragraphs in question, in deciding whether or not to draw beyond reasonable doubt, the inference that the wife knew of the making of the restraints and of their meaning.
In response to Mr Richardson’s submissions about the alternative inferences open to Cohen J, Mr Bedrossian, Counsel for the husband, submitted that the suggested inferences were fanciful, rather than possible or equally probable. He argued that this was particularly so since, if drawn, they necessarily involved the implication that the wife’s solicitor had grossly neglected his professional obligations; that he had made an application which involved the proferment of an undertaking by the wife as to damages, which the record shows was given and which sought a restraint against his own client, the wife, without her instructions and without explanation to her of the significance of the application; and that he had failed to advise her of the success of her application.
In G v H (1994) 181 CLR 387 at 390 Brennan and McHugh JJ said:
…An inference is a tentative or final assent to the existence of a fact which the drawer of the inference bases on the existence on some other fact or facts. The drawing of an inference is an exercise of the ordinary powers of human reason in the light of human experience; it is not affected directly by any rule of law. …
This description is apposite to the task which we are now requested to undertake, namely scrutinising the reasoning of Cohen J for the inference he drew that the wife knew of the making of the order and its meaning. We repeat the facts isolated by Cohen J in paragraphs 25, 26, 44 and 45 of his reasons namely:
·the applications included the proferment by the wife of an undertaking as to damages;
·the order breached was twice made on the application of the wife;
·the wife obtained a reservation of her request that the husband pay her costs and the costs were fixed; and
·the wife was in respect of the initiation of and each hearing of, her application, represented by the same solicitor.
In our view, in the exercise of the ordinary powers of human reason in light of human experience of the conduct of litigation by lawyers, the inference drawn by Cohen J beyond reasonable doubt was open to him.
This conclusion is unaffected by the “other matters” referred to by Mr Richardson, to the effect that there was no evidence that the order came to the wife’s attention by other means. Clearly had there been, the process of inference undertaken by Cohen J would probably have been unnecessary.
We note that Mr Bedrossian took issue with the assertion that there was no evidence that either the order of 30 August 1999 or that of 7 September 1999 had been served on the wife. He pointed to affidavit material filed in respect of an application by the husband, initiated in February 2001. The husband sought to be relieved of the restraint imposed by the 7 September 1999 orders so that he could raise money to defend proceedings in the Supreme Court of New South Wales, by a company (referred to as [“Company X”]) in which the wife and other members of her family had interests. Apart from the husband, the wife and their company [“Company Z”] were defendants. Mr Bedrossian pointed to annexation to the affidavit of the husband supporting his application, of a copy of the orders of 30 August 1999 and deposition by the husband to the effect that those orders were continued by the orders of 7 September 1999. However, Cohen J did not address this argument and we find it unnecessary to do so for present purposes.
We have expressed the conclusion of the availability to Cohen J of the inference he drew without reference to the absence of evidence to the contrary. Mr Richardson conceded that the silence of the wife could have been taken into account. In his written submissions, he said:
…where the court has reached a conclusion as to the facts against a respondent from other evidence on a proper basis without recourse to their silence, then silence may provide a proper basis to infer a greater degree of satisfaction with that prima facie conclusion in considering whether it constitutes evidence beyond reasonable doubt. Silence may be taken into account in evaluating the evidence already given.
He also referred to passages to the same effect from Weissensteiner v R (1993) 178 CLR 217 at 229 where Mason CJ, Deane and Dawson JJ said:
… There is a distinction, no doubt of a fine one between drawing an inference of guilt merely from silence and drawing an inference otherwise available more safely simply because the accused has not supported any hypothesis which is consistent with innocence from facts which they jury perceives to be within his or her knowledge.
… silence on the part of the accused at his or her trial cannot fill in any gaps in the prosecution case…It is only when the failure of the accused to give evidence is a circumstance which may bear upon the probative value of the evidence which has been given and which the jury is required to consider, that they may take it into account, and they may take it into account only for the purpose of evaluating that evidence.
Mr Bedrossian also relied upon a passage from Weissensteiner (supra), in which Mason CJ, Deane and Dawson JJ stated, at 227-8:
We have quoted rather more extensively from the cases than would otherwise be necessary in order to show that it has never really been doubted that when a party to litigation fails to accept an opportunity to place before the court evidence of facts within his or her knowledge which, if they exist at all, would explain or contradict the evidence against that party, the court may more readily accept that evidence. It is not just because uncontradicted evidence is easier or safer to accept than contradicted evidence. That is almost a truism. It is because doubts about the reliability of witnesses or about the inferences to be drawn from the evidence may be more readily discounted in the absence of contradictory evidence from a party who might be expected to give or call it. In particular, in a criminal trial, hypotheses consistent with innocence may cease to be rational or reasonable in the absence of evidence to support them when that evidence, if it exists at all, must be within the knowledge of the accused.
Of Cohen J’s dealing with the absence of suggestion by the wife that the applications made to Johnston JR and Rose J were made without her informed instructions, as earlier seen, Gleeson CJ said:
… In the present case all that Cohen J did was to point to the incontrovertible fact that he was dealing with the question of inferences to be drawn from the events and circumstances of the case in the absence of any countervailing evidence that might have been given by the respondent of her solicitor. It was a fact he could hardly have ignored. He simply pointed to the fact that the evidence upon which he had to decide the case was that adduced by the present appellant and he then asked himself legitimately what was the inference to be drawn in that state of affairs.
When the absence of evidence is so used, we are reinforced in the view that we have already expressed, of the availability to Cohen J of the inference under challenge.
It follows that we find no merit in this argument.
In his summary of argument and in oral submissions, Mr Bedrossian pointed to a number of further matters within the evidence, not referred to by Cohen J, but which Mr Bedrossian argued supported the inference drawn. These included reference in a judgment delivered by Cohen J on 2 November 2001, in respect of the husband’s application designed to enable him to raise funds for legal fees to defend the Supreme Court action, to the orders of 7 September 1999. In that judgment, Cohen J referred to the application of the husband “…to lift injunctions imposed on the husband and wife by His Honour Justice Rose on 7 September 1999 which continued orders made by a Judicial Registrar on 30 August 1999 restraining each party from disposing of or encumbering their property… .”
Mr Bedrossian also referred to a Notice of Appeal filed by the wife against Cohen J’s orders of 2 November 2001 and her subsequent request for and receipt of “the entire Family Court file”, on 6 December 2002.
These were not matters referred to by Cohen J and we have made no reference to them in coming to the conclusion we have expressed. In the circumstances we see no reason to discuss them further.

Grounds 3 and 4

These grounds, which we later set out, attack the trial Judge’s findings in respect of service of the amended application for contempt.
By way of background, the husband’s application for contempt was filed on 29 September 2003. The details of the alleged contempt concerned the sale by the wife of the [NSW] property on 14 February 2003. In respect of that application, on 27 October 2003, a Judicial Registrar made orders including one that was really a notation:
3.That in relation to the contravention and contempt proceedings the court noted that service is deemed to have been effected in relation to documents already filed and by consent leave is granted for further service of supporting material to be effected on the solicitor for the party involved.
On 23 September 2004, the husband filed an amended application which added another allegation of contempt, namely that in respect of the mortgage given over the [QLD] property.
In the hearing before Cohen J, the husband relied on the amended application as his initiating document. In support, he relied upon affidavit material filed in September 2003 (ie. before the notation quoted) and other affidavit material filed in September 2004 (ie. after the notation). As Cohen J recorded, the issue about service arose in the following way. At the outset of the hearing, after some discussion identifying the nature of the proceedings and argument about the particulars in the amended application, Cohen J read the allegations to the wife. Through her counsel she denied them. The husband put his evidence before the court. The wife having elected to call no evidence, counsel for the wife became entitled to address last. In his address, counsel submitted for the first time that the husband had made no attempt to prove service and therefore had failed to prove that the relevant application and supporting affidavits had been properly served. In response to those submissions, counsel for the husband sought, and was granted, leave to re-open.
Mr Richardson concedes that there was clear evidence that Cohen J was entitled to accept as he did, that the amended application was delivered to the wife’s solicitors’ office.
In his judgment of 17 December 2004, Cohen J explained his reasons for permitting reopening and for his satisfaction that sufficient service had taken place. In reaching this ultimate conclusion, his Honour reasoned that the amended application came within the term “supporting material” used in the notation to the Judicial Registrar’s order. He said:
It would be quite incongruous to require the affidavit to be served by different method to the amended application.
Grounds 3 and 4 are as follows:
3.That upon the proper construction of order No. 3 made by a Judicial Registrar on 27 October 2003, his Honour erred in concluding that the order authorised a departure from the otherwise mandatory requirement that the respondent’s amended application for contempt filed 23 September 2004 be the subject of special service by hand as a consequence of rule 7.03 Family Law rules 2004.
4.That in the events in paragraph 3 above his Honour erred in failing to find that the absence of special service by hand of the amended application for contempt resulted in the failure of the application.

Rule 7.03 referred to in ground 3, requires that the form of service of an application for contempt be “special service by hand”.
Rule 7.06(1) provides:
Special service by hand
(1)A document to be served by hand must be given to the person to be served (the "receiver").
We doubt that an amended “Application – Contempt”, adding a separate count of contempt, fits within the term “supporting material” used in the notation to the Judicial Registrar’s order. To the extent that Cohen J found otherwise we think his Honour erred. But by no means does that result in the conclusion of his Honour that service was adequately effected, being wrong.
We think it quite clear that his Honour also looked at the question of services more broadly. He was asked to do so by counsel for the husband.
In his reasons of 17 December 2004, having expressed the view earlier quoted about the incongruity of requiring the amended application to be served by a different means to an affidavit in support, his Honour discussed the usual insistence that procedural requirements in contempt proceedings be met, the purpose of all rules, namely to achieve fairness to both parties, and the question of whether there was any particular unfairness to the wife in the circumstances. His Honour noted that “the rules relating to the conduct of contempt proceedings are no different from the other rules in that they permit dispensation from the rules.”
Shortly after, his Honour said:
It is necessary to decide whether or not they were served in accordance with the second part of the Judicial Registrar’s order; that is, on the respondent’s solicitor, the method of service which leave was by consent granted or otherwise in accordance with the rules. (emphasis added)
Mr Richardson also recognised the “broader” picture. In his written submissions he said:
The challenge is confined to whether the evidence before his Honour properly supported the conclusion that service, in the face of the requirements of the rules, was effected in an acceptable manner.
Fairly, he referred to the terms of rule 7.02(1) which provides that:
Court's discretion regarding service
(1)A court may find that a document has been served or that it has been served on a particular date, even though these Rules or an order have not been complied with in relation to service.
and further said:
The rules in chapter 7 of the Family Law Rules, as are all subsequent to chapter 1, are, in the event of conflict, subservient to the general rules in chapter 1.
Rule 1.04 provides as follows:
“The main purpose of these Rules is to ensure that each case is resolved in a just and timely manner at a cost to the parties and the court that is reasonable in the circumstances of the case.”
Rule 1.12 specifically authorises the court to dispense with the compliance with any rule, at any time before or after the occasion for compliance arises.
The Full Court has held that the rules authorising dispensation with compliance with rules of court do apply in proceedings under s.112AD and for present purposes it is not disputed that the same conclusion would be reached in proceedings under s.112AP. The nature of those proceedings would be a matter to be brought properly into account in the exercise of discretion.
As to the broader view, his Honour found that even on balance, he was not satisfied that the evidence established direct service by hand. However, he continued:
Nevertheless, the court has a discretion which has been specifically provided for in the rules. It may find that a document has been served on a particular date even though the rules or an order have not been complied with in relation to service (rule 7.02).
… It would be ridiculous to entertain the view or find that although there has been compliance with an order specifying the mode of service, this does not amount to proper, effective and valid service. … I am satisfied beyond reasonable doubt that the respondent’s solicitor, Ms [D] received the amended application-contempt and the husband’s affidavit filed 23 September 2004 on or about the day these documents were filed. He said she saw them in her office at about that time and realised, on seeing them, their general nature. I am satisfied that the same degree that she knew what they were at the time she received them. There is no reasonable doubt that these documents were served upon the respondent at the time her solicitor received them in a manner which would bring them to the respondent’s attention or constructive attention.
While in other circumstances, for example where a respondent did not appear, we might think that it was insufficient to proceed with a contempt application to find that it has come constructively to the notice of that respondent, there is no question here of whether or not the wife was aware of the charges. She appeared, nothing was said about service on her behalf, the charges were read to her and she pleaded to them.
We are firmly of the view that his Honour did not err as asserted in ground 4:
…in failing to find that the absence of special service by hand of the amendment application for contempt resulted in the failure of the application.

Grounds 5 and 7

We discuss these grounds together as considerations pertinent to each overlap.
Ground 5 reads as follows:
30 May 2005 Judgment
5.That his Honour’s discretion miscarried in that his Honour took into account irrelevant facts which of themselves comprised conclusions which were erroneous in principle in that his Honour:
5.1concluded erroneously that the steps taken by the wife to purge her contempt were ineffective;
5.2concluded erroneously that his views as to the consequences of the steps taken by the wife to purge her contempt in the property settlement proceedings ought diminish the weight or credit to be afforded to her purging acts;
5.3found that the fact that a contemnor’s acts in purging contempt will create an unsecured liability in the hands of the contemnor ought affect the weight to be afforded to the purging acts; and,
5.4found that a fine was an inappropriate punishment by reason of potential consequences in unresolved proceedings between the parties pursuant to s.79 Family Law Act.
Ground 7 is as follows:
7.That his Honour’s discretion miscarried in that the penalty he imposed was plainly unjust and manifestly wrong.
Early in his reasons of 30 May 2005, Cohen J referred to the statements by Windeyer J in Australian Consolidated Press v Morgan (1965) 112 CLR 483 at 498-9 to the effect that a contemnor will be permitted to purge the contempt by:
(a)an apology to the court;
(b)making reparation for the damage caused by the contempt; and
(c)paying costs as between solicitor and client to the applicant in the contempt proceedings.
He noted that Windeyer J made it clear that he was not suggesting that once the contempt is purged, further punishment should not be imposed.
Cohen J noted in respect of the wife’s breaches:
…These transactions could not be regarded as insignificant.
His Honour then turned to the matter of an apology, noting that “the level of contrition is highly relevant to punishment”. He recorded that it was only on 31 March 2005, the day the wife was due to be penalised, that the wife for the first time announced that she wished to purge her contempts and had taken the necessary steps.
Further, in relation to the apology, he said:
84.A critical aspect of the wife’s case is that before 31 March 2005 she already realised that her legal obligations override her concept of her moral obligations and unreservedly apologises for her acts of contempt. I do not regard this as having been established by the wife. Her evidence in the contempt hearing was in many instances patently untrue. She gave the strong impression that she did not care whether she was telling the truth on oath or not. Her view seemed to be a pragmatic one. She seems to continue to believe she was justified in doing what she did. She called her parents to give evidence. They appeared to share her attitudes. She must have known that this would be the character of their evidence. I do not believe the apology which is now relied on as an element in purging her contempt reflects her current attitudes and give it little weight, but it must have some as it is certainly better than if she had she not apologised. I do not accept that she is at all contrite, although no doubt she regrets what she did because it did not succeed as she expected. Her offer to purge her contempt came only at the last moment.
His Honour’s views, apparent from the above passage, on the wife’s lack of credibility generally, had relevance to many matters he considered in relation to penalty.
As to the matter of reparation, Cohen J said:
5.It is important to stress that it is not reversal of the act of contempt which is at the heart of reparation, it is the compensation for the harm done. The degree of harm that the wife has done to the husband by her actions in disregarding the injunction cannot at this stage be assessed. The extent of the matrimonial property will not be known until the s 79 proceedings are completed, so the court cannot know whether the reductions in that property caused by the wife’s contempts and associated payments of the proceeds of the disposal of the property plus the costs of the contempt proceedings will be able to be met from her share of the matrimonial property. Yet the circumstances here make it quite in appropriate to postpone dealing with the contempts until after the s 79 hearing has been completed. Neither party has suggested otherwise. (emphasis added)
We have highlighted the first sentence because we think that, to some extent at least, the submissions for the wife about her actions said to purge the contempt overlook the extent to which they failed to achieve “compensation for the harm done”.
By way of background to the wife’s actions towards purging her contempt, Cohen J found:
24.…that the wife and [the wife’s sister] encumbered their interests in [the QLD property] to the extent of $300,000.00 for the purpose of meeting [Company X’s] costs which had been or were expected to be incurred in an action which, if successful, would have made [the husband and wife’s] proceedings pursuant to s 79 of the Family Law Act redundant. The parties would then seem to have had no assets to divide.
The husband alleged [Company X] was owned and controlled by the wife. The original shareholders of [Company X] were the wife and her mother but subsequently their shareholding was diluted to some extent. As seen earlier, the action was against [Company Z], the husband and the wife. The wife claimed to have borrowed money on security of [the QLD property] to pay outstanding and expected legal fees for [Company X] because the company was really owned by her father and had suffered losses caused by her dealings. As Cohen J said:
25.…I am not in a position to make a finding on this allegation in these proceedings.
In relation to the mortgage over the [QLD] property, Cohen J said:
28.I am satisfied beyond reasonable doubt that the wife entered into the mortgage of [the QLD property] on 20 December while fully appreciating that she was not permitted to do so as a result of the order of Justice Rose, an order which was made on her application. …
47.I am satisfied beyond reasonable doubt that the wife, by encumbering [the QLD property], attempted to pre-empt the Court’s ruling about her interest in [Company X] and [the QLD property]. Her actions may or may not have reduced the pool of assets available for division between the parties in their property proceedings for the benefit of herself and/or her family. I am not in a position to tell until the beneficial ownership of [Company X] is decided. The ownership of [Company X] is still in issue in the property proceedings and will only be decided when these are heard. Irrespective of the ownership of [Company X], the wife has deliberately attempted to negate the husband’s case. This, with its timing, is a very serious aspect of her action in mortgaging [the QLD property].
52.One of the wife’s claims is that she has now, in part, purged her contempt by causing the mortgage over [the QLD property] to be discharged. …While that mortgage existed, [the wife’s sister] and the wife were jointly and severally personally liable for the debt secured by the mortgage over the land. The wife would be entitled to look to [her sister] for an equal contribution to any personal payment the wife might have to make on the loan. The result of the borrowing of $300,000.00 secured by mortgage over the land was that while the matrimonial property was at risk of reduction to the extent of $300,000.00, the probability, because of [the wife’s sister’s] liability, was that the risk of reduction was more likely to be limited to the value of the wife’s interest in [the QLD property]; $150,000.00.
53.The mortgagee has agreed to discharge the mortgage he holds over [the QLD property] and [the wife’s sister] has agreed to this course. However, the money which was borrowed; $300,000.00, on the security of the mortgage remains a debt to the mortgagee. [The wife’s sister] has only agreed to the discharge of the mortgage on condition of being discharged from liability for the debt secured by the mortgage. Thus, [the wife’s sister] would hold her share in the [QLD] land free of the incumbrance and she would be free of any liability for the $300,000.00 debt. Thus, by the wife’s purported purging of contempt, although the action she took which was contrary to the Court order will be reversed, the effect of that contempt which probably left the wife with a liability of $150,000.00 for practical purposes, will leave her with a debt of $300,000.00 and an inability to look to [the wife’s sister] or her share of [the QLD property] for contribution, but with the wife’s share of [the QLD property] unencumbered. I do not accept that the discharge of the mortgage with the adoption of a liability of $300,000.00 will actually purge her contempt to any substantial extent. Even if the wife, in the section 79 proceedings, could be required to meet the indebtedness out of her share after division, the husband is not returned to his position before the wife’s contempt. It is possible that the wife could be bankrupted over the debt before the section 79 proceedings are heard. The disadvantage to the husband caused by her contempt has been effectively increased by the purported purging of it in the manner proposed.
We see no error of reason or law in these passages.
As to the placement of $114,500.00, borrowed by the wife from a friend, into her solicitors’ trust account to be accounted for in the s 79 proceedings, Cohen J said:
69.The validity of regarding this as purging the wife’s contempt in selling [the NSW property] is seen by the fact that what the wife has done is completely neutral in effect on the property available for distribution unless the debt she now has to the friend is isolated so that it is payable out of her share of matrimonial assets undiminished by the debt. The matrimonial assets are, nevertheless, at risk because the wife could be bankrupted by her friend before the section 79 hearing if the wife is unable to repay the debt when it is demanded. The matrimonial assets protected by injunction from disposal may not be released to meet the demand. The matrimonial assets would still have been reduced by what the land would now be worth less the effect of paying off a debt of [Company X] on the value of any interest the wife has in this company.
70.To fully purge her contempt in selling [the NSW property] and using the proceeds of sale to pay off a debt which may or may not have ultimately been her responsibility, I am satisfied beyond reasonable doubt that the wife would need to either obtain the current value of the [NSW] land and pay that value into a trust account pending the outcome of the property proceedings without creating any debt by that payment which, to any extent, reduces her other net assets available for division under section 79.
71.To pay to the trust account interest on the $144,500.00 in addition to the principal at a rate which can be said to compensate for the non-availability of the principal for investment after the land was sold would also tend more toward purging the wife’s contempt. Again, this would have to be done without also reducing the other net assets of the wife which are available for division under section 79. The wife has now promised to do this. I was informed of this on the day this judgement was delivered.
We see no error of reason or law in these passages.
Ground 5.1, as earlier seen, asserts that Cohen J “concluded erroneously that the steps taken by the wife to purge her contempt were ineffective”. His Honour’s use of the term “ineffective” occurred in the following context:
92.The actual extent to which that pool was reduced by her contempts cannot be determined at this stage. It is possible that it was not reduced at all; that is, if she owned [the NSW property] and owns [the QLD property] but would, in any event, be liable for the legal fees she paid. This would be the case if she has a beneficial interest in [Company X] and/or was the person who was ultimately responsible for giving instructions for the suit commenced by [Company X]. The funds accessible in Australia might be reduced in this event because the proceeds of her contempts will have been used to meet a liability of [Company X] thereby relieving that company of using any assets it may have in Taiwan. It will be for the court hearing the section 79 matter to determine the effect of the litigation by [Company X] and the wife’s interest in it. It may be that the wife succeeded in depriving the section 79 pool of assets worth more than $295,500.00.
93.What she certainly has done is fail to await the verdict of the Family Court on the issues of beneficial ownership in circumstances where her actions could greatly harm the husband’s rights in the section 79 proceedings. The first contempt could have reduced the assets of the parties by more than $300,000.00 and the second by the current value of [the NSW property]. The second contempt is as serious as the first because, although it involves a lesser potential reduction in the parties assets, or assets in Australia, it manifests a repeated preparedness over time to flout the Court’s orders. In other words, it is analogous to a second offence. I regard her contempts as extremely serious.
94.The wife has offered to consent to an order that she pay the husband’s costs of the contempt proceedings as taxed on a party/party basis. The husband submits that this is not sufficient and that, because the husband conducted the proceedings to uphold the integrity of the orders and authority of the Court, as well as to conserve the matrimonial property before its division under section 79, he is entitled to indemnity costs from the wife. He submits that his loss in bringing the proceedings, in addition to that created by the matrimonial property reduction, will not be overcome unless the costs the wife pays him are on an indemnity basis and are secured before any taxation by lodgement of $110,000.00.
…
97.…I find that to purge her contempt by payment of the husband’s costs, the wife need only consent to an order that she pay the husband’s costs of the contempt proceedings as taxed on a solicitor/client basis.
98.…Accordingly, the wife’s offer is probably not enough to fully meet her obligation if she wishes to purge her contempt completely in relation to the husband’s legal costs, but does go a large part of the way to doing so. I shall view it in that light and shall act and make a notation that I have acted on the offer by the wife to pay the husband’s costs of these proceedings as taxed on a party/party basis.
…
101.Thus, I am of the view that, apart from the fact of the apology to the Court meeting one of the criteria for purging her contempt, the wife’s claim of having purged her contempt falls significantly short of reparation for the damage caused by each contempt even if the wife has enough and/or will receive enough pursuant to a section 79 order to meet the debts she has created in obtaining the release of the mortgage and the money she has promised to pay into trust to reverse the financial effect of the sale of [the NSW property], although I do not regard the offer to pay the party/party costs as taxed of the husband as insubstantial. There is not likely to be much difference between the amount which would be paid and that offer and the sum payable on solicitor/client costs.
102.Despite the unconditional apology, I do not regard the wife as having proven on balance that she is contrite. Her belated offer to purge her contempt seemed to be more a recognition that her game was up rather than acceptance that she had done anything wrong. Her evidence during the contempt proceedings time after time contained instances of her continuing belief that her contempts were justified. Notwithstanding these findings, it must be said that she has taken considerable steps in purging her contempt despite their ineffectiveness provided it is accepted that she did not realise that, as distinct from contempts in more traditional civil proceedings, the financial elements of purging her contempt would be likely to put her in a position that she will, in any event, be likely to be in on division of that property. The losses she has occasioned will probably come from her share after division; that is, she will be regarded as having received the money lost as an advance on her share. I am not satisfied beyond reasonable doubt that she understood that the actions to purge her contempt will make little difference to the position she would be after the section 79 proceedings are competed if she had not undertaken these actions. I accept on balance that she has intended to purge her contempt.
103.It would be quite inappropriate to levy any financial punishment against the wife. She says she has no assets which are not tied by continuing orders preventing their liquidation. These assets should remain intact to protect the husband’s section 79 rights. If a penalty were to be paid by her, it would not be likely to reduce the pool available to be divided under section 79 unless it was greater than the wife’s share of the pool. It is likely that, in making section 79 orders, the Court would regard a financial penalty the wife has paid as an advance to her of part of her share of the pool. If it were to be paid by others, the purpose and effect of the fine would be diluted. Substantial terms of imprisonment are called for simply because of the deliberatness and seriousness of the wife’s relevant actions, notwithstanding the mitigating factors.
104.Bearing in mind all the aspects of the wife’s plea which I have accepted and the factors in favour of the husband’s submission that very substantial terms be imposed which I have found to have been proven to the necessary degree, I conclude that for the contempt committed on 20 December 2001 she should be sentenced to 4 months imprisonment and for the contempt committed on 14 February 2003 she should be sentenced to imprisonment for 4 months. I regard it as appropriate that part each sentence be served concurrently. That part is 2 months, so the wife will have to serve, in all, 6 months in prison. Were it not for her partial purging of the contempts and the need to care for her disabled daughter, I would have sentenced her to much longer periods of imprisonment and a consequentially longer overall period of imprisonment.
105.The wife should continue to have the opportunity to further purge her contempt. …

We see no error in the weight that his Honour gave to relevant factors or in the terms he used to describe them. We see no error in his Honour’s reasons for rejecting a fine, which included not just a consideration of the financial consequences but the deliberation in and seriousness of the wife’s actions “notwithstanding the mitigating factors”.
In relation specifically to ground 7, Mr Richardson’s oral submissions did not materially add to what appeared in the written summary which was:
In circumstances where the contempt involved a breach confined to financial consequences which had been purged and in particular the impact upon the wife’s ability to fulfil responsibilities (almost exclusive) in caring for a profoundly disabled child of the parties (para 73-78 J2) it is submitted that a custodial sentence was excessive.
Even faced with his Honour’s concerns that the imposition of a fine may have impacted upon the respondent, a clear alternate course, that would have been appropriate, was open to him to impose a fine, stay execution pending determination of the property settlement proceedings and in absence of her paying within particular period then imposing a custodial sentence in default (these propositions were discussed between counsel and his Honour. (Appeal Book 2 p 492-493)
It is submitted that the discretionary penalty imposed was outside of the bounds of a reasonable exercise of discretion and thereby discretion miscarried.
In relation to the child of the parties, the trial Judge said:
73.It is in the public interest for the Court to balance the needs of those who are dependant on or in need of the assistance of a person facing the possibility of imprisonment with the other factors which must be considered to meet the ends of justice.
74.There are two children of the marriage between the parties. Their son, [R], is 19 years old now. It has not been suggested that he has a particular need for the wife’s care. [S], the parties’ other child, is now aged about 16 years. She has lived with and been primarily cared for by the wife since the breakdown of the marriage in 1996. She is quite disabled by a variety of physical, mental and emotional deficits associated with a serious congenital disease.
His Honour then set out at paragraphs 76 to 80 inclusive, considerable detail about the disability of the wife’s daughter and what kind of care and supervision she required. He noted that the child’s problems would be exacerbated by the prolonged absence of the wife resulting from imprisonment. His Honour considered, but rejected, the husband’s claim to be able to care for the child but reviewed the capacity of the wife’s brother, parents and sisters as well as the husband to assist if the wife went to prison. Ultimately he found that the daughter’s need for the wife was a “very compelling factor on the side of reducing the length of any custodial punishment”, but satisfied himself that the child could be cared for during a period of incarceration.
Finally, as to penalty, each case turns much on its own facts. However, the fact of and term of imprisonment is well in line with penalties imposed in cases of some comparability. We refer in particular to PDM & JEM (2006) FLC 93-291, DAI v DAA (2005) FLC 93-215, and S and S (unreported 22 July 1996).
Although across these cases there is much variation in the monetary amounts involved in transactions in breach of orders, and no substantial reparation had been made, and much variation in the term of imprisonment imposed, they demonstrate that the sentence in the case under appeal does not stand out as inconsistent. The imposition of a sanction by Cohen J was a discretionary exercise. The limits of appeal against discretionary judgments are well known. We are not satisfied that the sentence imposed was manifestly excessive.

Ground 8

This ground reads as follows:
8.That his Honour erred in exercising his discretion to order the appellant to pay the respondent’s costs at all and further on an indemnity basis in that his Honour:
8.1took into account conclusions as to the outcome of the proceedings affected by this appeal;
8.2failed to take into account the absence of evidence as to the basis upon which the respondent’s costs were charged or their quantum; and
8.3took into account irrelevant matters in that his Honour expressed the facts which were central to the contempt proceedings, for which the appellant had already been punished, as a factor going to her conduct that he held justified a cost order on an indemnity basis.
As seen earlier, among the matters with which the reasons of the Full Court delivered 26 August 2006 on the first hearing of this appeal dealt, was the wife’s appeal against the order for costs of the proceedings before Cohen J. That Full Court dismissed the wife’s appeal in that regard. Essentially, the Full Court considered that, notwithstanding the wife’s success in the appeal against imprisonment and the dismissal of the husband’s application for contempt, Cohen J had made ample findings in respect of the wife’s breaches of court orders and conduct of the proceedings to support the costs order against her. Alternatively, the Full Court said that if it was wrong in rejecting the challenges to the trial Judge’s reasons for ordering indemnity costs, if re-exercising the discretion, the Full Court would make the same costs order as did Cohen J.
The Full Court’s decision in this regard was not the subject of special leave. However, as earlier seen the High Court set aside the order of the Full Court dismissing the wife’s appeal against the costs order. In the circumstances, we hear this part of the appeal afresh.
In view of our conclusions as to the grounds challenging the substantive orders, ground 8.1 has no application.
Cohen J’s reasons for the indemnity costs order in respect of the contempt proceedings were:
1.I have been asked by the husband to make an order in his favour that the wife indemnify him for costs of conducting the contempt proceedings taxed on an indemnity basis. It is my view, applying all of the matters that are required to be considered under section 117(2) of the Act, that this is a case where the provisions of the Act which incline towards no order of costs should be departed from. The circumstances justify that the wife should not only be ordered to pay the husband's costs but that she should be ordered to pay those costs on an indemnity basis. Her conduct, after all, is at the nub of these proceedings. Conduct of a grossly wrongful nature must be and was found in order to establish contempt at the level required under section 112AP of the Act. That conduct in itself involves flagrant breach of orders of the Court.
2.It is a general rule that, where there has been contempt, for a person to purge that contempt they ought to pay solicitor/client costs. However, it is also part of the general law that, in order to purge contempt, the contemnor should act so as to put the other party or the person who suffers damage as a result of the contempt back into the position they were in before the contempt was committed. This in itself does not warrant an order for indemnity costs because, as is made clear in the judgment of Windeyer J in Australian Consolidated Press v Morgan (1965) 112 CLR 483, there is only a need to make costs reparation by paying solicitor/client costs to purge the contempt, so it follows that there is no requirement to pay costs on an indemnity basis in order to make the reparation.
3.Nevertheless, I think that the conduct of the wife in this particular instance has been deliberate and ruthless and is part of a dishonest course of action which amounts to the wife attempting to ensure that the husband receives nothing or as little as possible pursuant to section 79.
As to ground 8.3, which propounds an argument along the lines of “double jeopardy”, conviction and punishment for contempt on the one hand, is in respect of a different and distinguishable “cause of action” to an application for costs, which independently raises further considerations. A possible, partial commonality of relevant facts does not result in two determinations in respect of the same issue, and some overlap of relevant facts can hardly be otherwise when s 117 of the Family Law Act 1975 (Cth) lists as matters the court shall have regard to on a costs application as including:
s 117(2A)
…
(c)the conduct of the parties to the proceedings in relation to the proceedings…
(d)whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e)whether any party to the proceedings has been wholly unsuccessful in the proceedings.
…
We find no merit in ground 8.3.
However, we think there is merit in ground 8.2. Rule 19.08(3) of the Family Law Rules 2004 provides:
(3)A party applying for an order for costs on an indemnity basis must inform the court if the party is bound by a costs agreement in relation to those costs and, if so, the terms of the costs agreement.
In Kohan and Kohan (1993) FLC 92-340 at 79,611 the Full Court of this Court said:
…We are of the opinion that in an appropriate case, the Court has a discretion to order costs on an indemnity basis and that such costs may be ordered, where they have been incurred under a costs agreement which departs from the usual scale of costs. However, it is fundamental to the exercise of that discretion in the Family Court that the Judge should not only understand that such an order is a very great departure form the normal standard, but also that the Judge should know what the terms of the agreement are, to what extent it exceeds the parameters set by the scale and what its likely impact will be on the financial position of each of the parties. This impact is a relevant matter to which the trial Judge should have had regard, when considering the financial circumstances of each of the parties to the proceedings under s117(2A)(a), or perhaps even more as a relevant matter under paragraph (g). The degree to which a costs agreement departs from the established norm and the actual financial significance of such a departure may itself be a reason for not ordering costs on an indemnity basis.
Cohen J did not have the terms of the husband’s costs argument before him.
Mr Bedrossian argues correctly that the rules include a power to dispense with compliance and that the failure of the trial Judge to require compliance with the rule did not prejudice the wife. He points to the proceedings before Cohen J culminating in his orders of 2 November 2001. In those proceedings, as Mr Bedrossian put it:
64.1…extensive disclosure was made to the Court by the Respondent of the extent and nature of past legal expenses incurred (both in the Family Court and in other jurisdictions) and the likely extent of future legal expenses, including by reference to the rates of charge being applied by solicitors and counsel. …
And he further said:
64.2On 9 July 2004, the Trial Judge heard a further application by the Respondent for an interim property order. The primary evidenc3e upon that application included an updated accounting to the Court of the costs incurred by the Respondent in the Supreme Court of New South Wales.
We are not satisfied that Cohen J had this material in mind on 30 May 2005. He did not refer to it. As the passage quoted from Kohan (supra) makes plain, there is a substantial reason for the requirement of evidence of the terms of any costs agreement. It is not a mater only of form or procedure.

Course of the appeal

We will take further submissions, in writing, on whether we ought re-exercise the discretion on the costs of the proceedings before Cohen J or remit the issue to him. We will also take submissions on the costs of the earlier appeal to Full Court and the appeal to this Court.

FINN J:

This is an appeal by [the wife] against all orders made on 30 May 2005 by Cohen J in proceedings brought by [the husband] against the wife under s 112AP of the Family Law Act 1975 (“the Act”) for a contempt of court constituted, in the language of s 112AD(1), by a contravention of an order made under the Act and involving a flagrant challenge to the authority of the court.
Cohen J in fact made two sets of orders on 30 May 2005. The first set of orders together with a notation provided:
1.As punishment for the contempt on 20 December 2001 [LGM] is hereby committed to prison for 4 months commencing forthwith.
2.As punishment for the contempt on 14 February 2003 the said [LGM] is hereby committed to prison for 4 months in addition to the term of imprisonment she is to serve pursuant to Order 1.
3.Two (2) months of each of the terms of imprisonment imposed by Orders 1. and 2. shall be served concurrently.
4.A warrant shall issue forthwith for the purpose of implementing Orders 1., 2. and 3.
5.Leave is hereby granted to the wife to have the matter listed before me at short notice on direct telephone application to my associate if she alleges she has to any further extent purged her contempt or wishes to do so and pursuant to section 112AD(7) wishes to apply for a discharge from prison before the expiry of either term or both terms of commitment to prison.
6.Costs are reserved for one month.
IT IS NOTED:
7.I note that the wife has consented to an order in these proceedings that she pay the husband’s costs of them as taxed on a party/ party basis and has said she will pay money into her solicitor’s trust account and will obtain a discharge of the mortgage over the [QLD] land. I have, in imposing all penalties on her in these proceedings, acted on the basis that she will do these things and cannot resile from the obligation created by the case she has made out in her plea.
The second set of orders made on 30 May 2005 provided for a stay of the first set of orders made that day and also provided:
3. That the wife is ordered to pay the husband’s costs as taxed on an indemnity basis or agreed between the parties within one month.
Prior to his orders of 30 May 2005, his Honour had, in a decision delivered on 17 December 2004, made findings that the wife had committed the two contempts referred to in orders 1 and 2 of his orders of 30 May 2005. By his orders of 30 May 2005, he sentenced her to a total of 6 months’ imprisonment in respect of those contempts (for reasons contained in a judgment delivered on 30 May 2005).
The grounds of appeal pursued by the wife before us are set out in full in the joint judgment of Bryant CJ and Warnick J, but as conveniently summarised by their Honours, they assert that his Honour erred:
·in concluding as a fact that the wife was aware of the terms of the orders made by Rose J on 7 September 1999 and that the order had been made;
·in that he should have found that the absence of special service by hand of the amended application for contempt resulted in the failure of the application;
·in drawing incorrect conclusions in respect of the wife’s attempts to purge her contempt;
·in imposing a plainly unjust penalty;
·in failing in ordering indemnity costs, to take account of the absence of evidence as to the basis upon which the husband’s costs were charged or their quantum; and
·in wrongly taking into account findings central to the conclusion of contempt, for which the wife had already been punished.

Relevant Background

At some time prior to 30 August 1999 proceedings for property settlement had been instituted between the husband and the wife.
On 30 August 1999 Judicial Registrar Johnston made an order on the application of the wife and in the absence of the husband, restraining both the husband and the wife “from selling, transferring, encumbering, alienating or otherwise dealing with any real property in which they currently have an interest”.
The Judicial Registrar recorded in his orders that “the wife gives the usual undertaking in relation to damages through her solicitor”. He also adjourned the proceedings to 7 September 1999.
On 7 September 1999 when the legal representatives of both parties were before him, and “upon the wife giving the usual undertaking in relation to damages”, Rose J continued (by Order 3 of his orders made that day) the restraining order made on 30 August 1999 until further order.
On 20 December 2001 the wife mortgaged real property known as [“the QLD property”], in which she and her sister both held half interests, to secure a loan of $300,000. The purpose of the loan (according to Cohen J in paragraph 24 of his reasons of 30 May 2005) was to meet the costs of a company, [Company X] (which the husband alleged was owned and controlled by the wife) in litigation which (again according to his Honour) would (if successful) have left no property to be the subject of the property settlement proceedings between the husband and the wife.
On 14 February 2003 the wife sold for $144,500 the interest in certain land at [NSW], to which (according to Cohen J in paragraph 60 of his reasons for judgment of 30 May 2005) she held the legal title.
On 29 September 2003 the husband filed an application that the wife be dealt with for contempt under s 112AP of the Act in respect of the sale of the [NSW] property.
Almost one year later, on 23 September 2004, the husband filed an amended application adding the alleged contempt constituted by the [QLD property] mortgage.
The application, as amended, was heard by Cohen J on 6 and 7 December 2004. On 8 December 2004 his Honour made his findings, which were then formally recorded in the reasons for judgment delivered on 17 December 2004. His Honour’s findings as set out at the end of those reasons were as follows:
47. …
1.That on or about 14 February 2003 the respondent sold and transferred real property in which she had an interest namely the property known as and situate … in the State of New South Wales, folio identifier [XXX/XXXXX X], and that the said sale and transfer constitutes a contravention of Order 3. made by The Honourable Justice Rose on 7 September 1999 in proceedings number SYXXXX/1997 under the Family Law Act 1975 (as amended), and involves a flagrant challenge to the authority of the Court and was and is thereby in contempt of the Court.
2.That on or about 20 December 2001 the respondent mortgaged and thereby encumbered real property in which she had an interest namely the property known as [the QLD property] in the State of Queensland, title reference [XXXXX XXX] and the said mortgaging and encumbering constitute a contravention of Order 3. made by the Honourable Justice Rose on 7 September 1999 in proceedings number SYXXXX/1997 under the Family Law Act 1975 (as amended), and involves a flagrant challenge to the authority of the Court and was and is thereby in contempt of the Court.
There was then a further hearing before his Honour on 28 February, 1 – 2 March, 31 March and 26 May 2005. On 30 May 2005 his Honour made the orders sentencing the wife to serve six months’ imprisonment and requiring her to pay the husband’s costs on an indemnity basis.

The issue of service of the contempt application

In his reasons for judgment delivered on 17 December 2004, Cohen J referred first to the issue of service of the contempt application on the wife. It is thus convenient to deal first with the wife’s complaint that in the absence of special service by hand of the amended application for contempt, that application should have failed.
As Cohen J explained at the commencement of his reasons for judgment, the wife had chosen to call no evidence and her counsel therefore became entitled to address last. In that closing address counsel asserted for the first time that the husband had failed to prove proper service on the wife of the application and supporting affidavits. This was in circumstances where, it should be noted, his Honour had read the contempt allegations to the wife at the commencement of the hearing and she had denied them through her counsel. After counsel for the wife raised the service issue in his final address, counsel for the husband then sought, and was granted, leave to re-open his case to establish proper service.

In re-opening counsel for the husband relied on a notation contained in orders made by Judicial Registrar Loughnan on 27 October 2003 (that is, before the filing of the amended contempt application) which read as follows:
3.That in relation to the contravention and contempt proceedings the Court noted that service is deemed to have been effected in relation to documents already filed and by consent leave is granted for further service of supporting material to be effected on the solicitor for the party involved.
His Honour’s conclusion in relation to the service issue which was in the following terms, can be seen as relying at least to some extent on the Judicial Registrar’s notation:
20.The Court has discretion to find a document has been served, meaning properly served, despite non-compliance with an order. It would be ridiculous to entertain the view or find that although there has been compliance with an order specifying the mode of service, this does not amount to proper, effective and valid service. That the order here was made by consent makes the case for the Court to find that compliance with the order amounts to service even stronger.
21.I am satisfied beyond reasonable doubt that the respondent’s solicitor … received the Amended Application - Contempt and the husband’s affidavit filed 23 September 2004 on or about the day these documents were filed. She said she saw them in her office at about that time and realised, on seeing them, their general nature. I am satisfied to the same degree that she knew what they were at the time she received them. There is no reasonable doubt that these documents were served upon the respondent at the time her solicitor received them in a manner which would bring them to the respondent’s attention or constructive attention.
While I share the reservations which the Chief Justice and Warnick J express concerning any reliance which Cohen J may have placed upon the notation made by a Judicial Registrar on 27 October 2003, I agree with their Honours’ conclusion that his Honour did not err in failing to find that the amended application for contempt should fail because of the absence of special service by hand.
As their Honours observe, there was no question in this case other than that the wife was aware of the charges. She appeared at the hearing with counsel and no complaint was made at the outset concerning a defect in service. The charges were read and she pleaded to them. Only at what was to have been the final address during the hearing, was the service issue raised on the wife’s behalf.
I would not want my conclusion in this case to be taken as in any way undermining the importance of adherence to the rules concerning proper service of contempt applications, and in this regard I endorse the following remarks by his Honour in his reasons for judgment:
8.It is the case, and has been for well over a century, that procedural requirements in contempt proceedings are to be strictly adhered to unless there are strong reasons to do otherwise. As proceedings in which the respondent faces the possibility of imprisonment or other penalty, the applicant and the Court must take them very seriously. As a mark of their seriousness the rules are generally strictly applied.
However in the particular circumstances of this case, Cohen J cannot be said to have erred in his decision in relation to the service issue.

The wife’s knowledge of the restraining order

I come then to the wife’s complaint concerning Cohen J’s conclusion that she was aware of the making of, and of the terms of, the restraining order.
In paragraph 44 of his reasons for judgment of 17 December 2004, his Honour referred to the fact that the orders of 30 August 1999 and 7 September 1999 had been made on the application of the wife and he then went on to conclude:
44.…It is inconceivable in the absence of any suggestion to that effect that the applications made to the Judicial Registrar and to Justice Rose were made without the wife’s informed instructions to make them or that she did not know the orders she had sought were made in the form she had sought and therefore that she did not know the contents and meaning of Justice Rose’s order.
His Honour then continued:
45.The respondent must have asked for costs for the application before Justice Rose. Her costs were assessed by Justice Rose at $2,000.00, but the issue of whether they would be awarded to her against the husband was reserved. Again, it is inconceivable that in the light of the costs application and order that she did not know the order made by Justice Rose in the terms she had sought had been made. That she did is, in my assessment, proven beyond reasonable doubt. It is proven to the same standard that she had all the knowledge required to establish contempt before she committed the acts in breach of the orders. She knew the contents and meaning of the order of Justice Rose.
Earlier in his reasons his Honour set out order 3 of Rose J’s orders of 7 September 1999 and then observed:
25.… the relevant order being:
“3.That upon the wife giving the usual undertaking in relation to damages, I continue the orders made 30 August 1999 until further order.”
No suggestion was made on behalf of the respondent that she had not been shown to have given the undertaking as to damages so no issue over this arises.
26. … It is worth noting here that the injunctive order which the applicant says the respondent disobeyed was originally granted on the respondent’s application by the Judicial Registrar. This order must have been continued by Justice Rose at the instance of the respondent because its continuation was conditional on the respondent wife giving the usual undertaking as to damages.
The submissions made by senior counsel for the wife in an endeavour to establish that Cohen J erred in finding beyond reasonable doubt that the wife was aware of the making of the restraining order and its terms, are recorded in some detail in the reasons of the Chief Justice and Warnick J. But in essence, the submission was that Cohen J’s conclusions were drawn entirely on the basis of inferences in circumstances where other inferences were available which would support contrary conclusions.
However it was persuasively submitted before us by counsel for the husband that the other inferences suggested on behalf of the wife were fanciful in that they would mean that the wife’s solicitor had grossly neglected, or indeed breached, his professional obligations, in that he would have to have, without instructions and without explanation to the wife, sought a restraining order that bound her as well as the husband, and also given an undertaking as to damages on her behalf.
Again I agree with the conclusions of the Chief Justice and Warnick J that when the facts referred to by Cohen J in paragraphs 25, 26, 44 and 45 of his reasons of 17 December 2004 are considered, the conclusion, albeit an inference, which his Honour arrived at (beyond reasonable doubt) was clearly open to him, particularly it should be added, in circumstances where the wife had chosen to call no evidence.
It follows therefore that the wife’s challenge to Cohen J’s findings of contempt as recorded in the concluding paragraph of his reasons for judgment of 17 December 2004 and then in orders 1 and 2 of his orders of 30 May 2005, must fail.

The penalty imposed

Following his Honour’s findings of contempt in December 2004, the matter came before him again on the issue of penalty on the dates earlier mentioned in February, March and May 2005.
On 31 March 2005, which was the final day of the further hearing, the wife offered an apology to the court and also informed the court of the steps which she had taken to purge her contempt.
In his reasons for judgment delivered on 30 May 2005, his Honour concluded (in paragraph 101) that the wife’s claim to have purged her contempt “falls significantly short of reparation for the damage caused by each contempt”, and (in paragraph 102) that despite the wife’s unconditional apology, he did not regard the wife “as having proven on balance that she is contrite”.
The wife’s endeavour to purge her contempt in relation to the [QLD] property involved arranging for the discharge of the mortgage on that property. However the wife then became liable for the entire debt of $300,000 whereas while the mortgage existed she could have looked to her sister for an equal contribution to the repayment of the loan, as was explained by his Honour in the following paragraphs of his reasons for judgment of 30 May 2005:
52.One of the wife’s claims is that she has now, in part, purged her contempt by causing the mortgage over [the QLD property] to be discharged. The agreements needed for this were made on or immediately before 31 March 2005, the day judgment on penalty was due to be published and the penalty orders were to be made. While that mortgage existed, [the wife’s sister] and the wife were jointly and severally personally liable for the debt secured by the mortgage over the land. The wife would be entitled to look to [the wife’s sister] for an equal contribution to any personal payment the wife might have to make on the loan. The result of the borrowing of $300,000.00 secured by mortgage over the land was that while the matrimonial property was at risk of reduction to the extent of $300,000.00, the probability, because of [the wife’s sister’s] liability, was that the risk of reduction was more likely to be limited to the value of the wife’s interest in [the QLD property]; $150,000.00.
53.The mortgagee has agreed to discharge the mortgage he holds over [the QLD property] and [the wife’s sister] has agreed to this course. However, the money which was borrowed; $300,000.00, on the security of the mortgage remains a debt to the mortgagee. [The wife’s sister] has only agreed to the discharge of the mortgage on condition of being discharged from liability for the debt secured by the mortgage. Thus, [the wife’s sister] would hold her share in the [QLD] land free of the incumbrance and she would be free of any liability for the $300,000.00 debt. Thus, by the wife’s purported purging of contempt, although the action she took which was contrary to the Court order will be reversed, the effect of that contempt which probably left the wife with a liability of $150,000.00 for practical purposes, will leave her with a debt of $300,000.00 and an inability to look to [the wife’s sister] or her share of [the QLD property] for contribution, but with the wife’s share of [the QLD property] unencumbered. I do not accept that the discharge of the mortgage with the adoption of a liability of $300,000.00 will actually purge her contempt to any substantial extent. Even if the wife, in the section 79 proceedings, could be required to meet the indebtedness out of her share after division, the husband is not returned to his position before the wife’s contempt. It is possible that the wife could be bankrupted over the debt before the section 79 proceedings are heard. The disadvantage to the husband caused by her contempt has been effectively increased by the purported purging of it in the manner proposed.
In relation to the contempt constituted by the sale of the [NSW] land, the wife had endeavoured to purge her contempt by borrowing the sale price of $144,500 from a friend and placing it in her solicitor’s trust account to be accounted for in the s 79 proceedings. His Honour’s concerns in relation to the efficacy of this arrangement were as follows – although it will be seen that he provided the wife with an opportunity to meet certain of those concerns:
69.The validity of regarding this as purging the wife’s contempt in selling [the NSW property] is seen by the fact that what the wife has done is completely neutral in effect on the property available for distribution unless the debt she now has to the friend is isolated so that it is payable out of her share of matrimonial assets undiminished by the debt. The matrimonial assets are, nevertheless, at risk because the wife could be bankrupted by her friend before the section 79 hearing if the wife is unable to repay the debt when it is demanded. The matrimonial assets protected by injunction from disposal may not be released to meet the demand. The matrimonial assets would still have been reduced by what the land would now be worth less the effect of paying off a debt of [Company X] on the value of any interest the wife has in this company.
70.To fully purge her contempt in selling [the NSW property] and using the proceeds of sale to pay off a debt which may or may not have ultimately been her responsibility, I am satisfied beyond reasonable doubt that the wife would need to either obtain the current value of the [NSW] land and pay that value into a trust account pending the outcome of the property proceedings without creating any debt by that payment which, to any extent, reduces her other net assets available for division under section 79.
71.To pay to the trust account interest on the $144,500.00 in addition to the principal at a rate which can be said to compensate for the non-availability of the principal for investment after the land was sold would also tend more toward purging the wife’s contempt. Again, this would have to be done without also reducing the other net assets of the wife which are available for division under section 79. The wife has now promised to do this. I was informed of this on the day this judgement was delivered.
I agree with Bryant CJ and Warnick J, that contrary to the wife’s case before us, there is no error in his Honour’s reasoning or his conclusion concerning the limitations or shortcomings of the wife’s endeavours to purge her contempts.
I consider it useful at this point to refer to his Honour’s reasons for concluding that notwithstanding the wife’s apology, she was not genuinely contrite were as follows, which were not, as I understood it, challenged:
84.A critical aspect of the wife’s case is that before 31 March 2005 she already realised that her legal obligations override her concept of her moral obligations and unreservedly apologises for her acts of contempt. I do not regard this as having been established by the wife. Her evidence in the contempt hearing was in many instances patently untrue. She gave the strong impression that she did not care whether she was telling the truth on oath or not. Her view seemed to be a pragmatic one. She seems to continue to believe she was justified in doing what she did. She called her parents to give evidence. They appeared to share her attitudes. She must have known that this would be the character of their evidence. I do not believe the apology which is now relied on as an element in purging her contempt reflects her current attitudes and give it little weight, but it must have some as it is certainly better than if she had she not apologised. I do not accept that she is at all contrite, although no doubt she regrets what she did because it did not succeed as she expected. Her offer to purge her contempt came only at the last moment.
…
102.Despite the unconditional apology, I do not regard the wife as having proven on balance that she is contrite. Her belated offer to purge her contempt seemed to be more a recognition that her game was up rather than acceptance that she had done anything wrong. Her evidence during the contempt proceedings time after time contained instances of her continuing belief that her contempts were justified. Notwithstanding these findings, it must be said that she has taken considerable steps in purging her contempt despite their ineffectiveness provided it is accepted that she did not realise that, as distinct from contempts in more traditional civil proceedings, the financial elements of purging her contempt would be likely to put her in a position that she will, in any event, be likely to be in on division of that property. The losses she has occasioned will probably come from her share after division; that is, she will be regarded as having received the money lost as an advance on her share. I am not satisfied beyond reasonable doubt that she understood that the actions to purge her contempt will make little difference to the position she would be after the section 79 proceedings are competed if she had not undertaken these actions. I accept on balance that she has intended to purge her contempt.
In considering the wife’s complaints against his Honour’s decision to sentence her to a term of imprisonment, it is important to bear in mind that it was impossible at the time the matter was before his Honour, for him to gauge the exact effect of the wife’s actions on the value of the pool of property which would ultimately be available for distribution between the parties. His Honour explained this problem in the following way:
5.It is important to stress that it is not reversal of the act of contempt which is at the heart of reparation, it is the compensation for the harm done. The degree of harm which the wife has done to the husband by her actions in disregarding the injunction cannot at this stage be assessed. The extent of the matrimonial property will not be known until the section 79 proceedings are completed, so the Court cannot know whether the reductions in that property caused by the wife’s contempts and associated payments of the proceeds of disposal of the property plus the costs of the contempt proceedings will be able to be met from her share of the matrimonial property. Yet the circumstances here make it quite inappropriate to postpone dealing with the contempts until after the section 79 hearing has been completed. Neither party has suggested otherwise.
…
92.The actual extent to which that pool was reduced by her contempts cannot be determined at this stage. It is possible that it was not reduced at all; that is, if she owned [the NSW property] and owns [the QLD property] but would, in any event, be liable for the legal fees she paid. This would be the case if she has a beneficial interest in [Company X] and/or was the person who was ultimately responsible for giving instructions for the suit commenced by [Company X]. The funds accessible in Australia might be reduced in this event because the proceeds of her contempts will have been used to meet a liability of [Company X] thereby relieving that company of using any assets it may have in Taiwan. It will be for the court hearing the section 79 matter to determine the effect of the litigation by [Company X] and the wife’s interest in it. It may be that the wife succeeded in depriving the section 79 pool of assets worth more than $295,500.00.
93.What she certainly has done is fail to await the verdict of the Family Court on the issues of beneficial ownership in circumstances where her actions could greatly harm the husband’s rights in the section 79 proceedings. The first contempt could have reduced the assets of the parties by more than $300,000.00 and the second by the current value of [the NSW property]. The second contempt is as serious as the first because, although it involves a lesser potential reduction in the parties assets, or assets in Australia, it manifests a repeated preparedness over time to flout the Court’s orders. In other words, it is analogous to a second offence. I regard her contempts as extremely serious.
The pending property proceedings also made difficult the imposition of a fine as explained by his Honour in paragraph 103:
103.It would be quite inappropriate to levy any financial punishment against the wife. She says she has no assets which are not tied by continuing orders preventing their liquidation. These assets should remain intact to protect the husband’s section 79 rights. If a penalty were to be paid by her, it would not be likely to reduce the pool available to be divided under section 79 unless it was greater than the wife’s share of the pool. It is likely that, in making section 79 orders, the Court would regard a financial penalty the wife has paid as an advance to her of part of her share of the pool. If it were to be paid by others, the purpose and effect of the fine would be diluted. …

Immediately thereafter his Honour concluded that notwithstanding the mitigating circumstances of the wife’s attempts to purge her contempts and her responsibility for her disabled daughter (which was a matter which his Honour explained at considerable length in paragraphs 75 and 76 of his second judgment), substantial terms of imprisonment were required:
103.… Substantial terms of imprisonment are called for simply because of the deliberatness [sic] and seriousness of the wife’s relevant actions, notwithstanding the mitigating factors.
104. Bearing in mind all the aspects of the wife’s plea which I have accepted and the factors in favour of the husband’s submission that very substantial terms be imposed which I have found to have been proven to the necessary degree, I conclude that for the contempt committed on 20 December 2001 she should be sentenced to 4 months imprisonment and for the contempt committed on 14 February 2003 she should be sentenced to imprisonment for 4 months. I regard it as appropriate that part each sentence be served concurrently. That part is 2 months, so the wife will have to serve, in all, 6 months in prison. Were it not for her partial purging of the contempts and the need to care for her disabled daughter, I would have sentenced her to much longer periods of imprisonment and a consequentially longer overall period of imprisonment.
The wife challenges this penalty imposed by his Honour as “plainly unjust and manifestly wrong”.
The decision as to whether a term of imprisonment is an appropriate punishment for the contravention of an order made under the Act where the contravention has been found (as it was in this case) to involve a flagrant challenge to the authority of the court, and then the further decision as to the appropriate length of the term of imprisonment are, in my view, particularly difficult decisions on which minds are likely to vary greatly. This is because, given the relatively few cases that have arisen over the life of the Act and the fact (recognised by the Chief Justice and Warnick J) that each case turns much on its own facts, no sentencing guidelines have been developed (unlike in the criminal law area).
Furthermore, such cases are complicated, to say the least, by the fact that the person in the position of prosecutor (who can, and did in this case, make submissions on penalty) is not an independent public authority, but rather the other party to a failed marriage, or similar relationship, whose motives may well go beyond issues of principle such as the upholding of the dignity of courts and court orders. The discretion in relation to penalty for the contravention of court orders must therefore be exercised with great care.
Minds will, as I have suggested, differ as to the appropriate sentence in the present case, particularly given the wife’s attempts to purge her contempts and also her responsibility to care for her disabled daughter. However, as can be seen from paragraph 104 of his reasons, these were matters which his Honour expressly took into account in the exercise of his discretion in this case, being a case where he had found at the conclusion of his judgment of 17 December 2004, that “the wife’s breaches were pre-mediated and are very serious and undoubtedly amount to a flagrant challenge to the authority of the Court”.
Having regard to the principles governing appellate interference with discretionary decisions, I have not been persuaded that there would be any basis on which this Court would be justified in interfering with his Honour’s decision as to penalty.
Thus, I agree with the Chief Justice and Warnick J that the appeal directed to the sentence of imprisonment imposed on the wife cannot succeed.

Costs issues

I agree with, and have nothing to add to, what the Chief Justice and Warnick J have said in relation to the wife’s challenges to the indemnity costs orders made by Cohen J on 30 May 2005, and in relation to the costs of the earlier appeal to another Full Court and to this Full Court. I agree also with the orders proposed by their Honours in relation to all matters.

I certify that the preceding one hundred and forty-nine (149) paragraphs are a true copy of the reasons for judgment of the Honourable Full Court.

Associate:

Date: 10 January 2008