MOLLOY and FOUST
[2020] FCWAM 66
•17 JULY 2020
JURISDICTION : MAGISTRATES COURT OF WESTERN AUSTRALIA AT 150 TERRACE ROAD
ACT: FAMILY LAW ACT 1975
LOCATION: PERTH
CITATION: MOLLOY and FOUST [2020] FCWAM 66
CORAM: GLASS M
HEARD: 10 JULY 2020
DELIVERED : 17 JULY 2020
FILE NO/S: PTW 2835 of 2016
BETWEEN: MS MOLLOY
Applicant
AND
MR FOUST
Respondent
Catchwords:
CONTEMPT - Where allegations are admitted - Where sentence of imprisonment is warranted
Legislation:
Family Law Act 1975 (Cth)
Category: Not Reportable
Representation:
Counsel:
| Applicant | : | Mrs Farmer |
| Respondent | : | Mr Urquhart |
Solicitors:
| Applicant | : | Bannerman Solicitors |
| Respondent | : | Self Represented Litigant |
Case(s) referred to in decision(s):
Abduramanoski & Abudramanoska (2005) FLC 93-215
Ascot Investments v Harper (No 3) (1982) FLC 91-253
Australian Securities and Investments Commission v Michalik [2004] NSWSC 1259
Danchevsky v Danchevsky [1975] Fam 17
Farnell & Anor & Chanbua (2016) FLC 93-700
Faukland & Shikia (2016) FLC 93-706
Hay & Hay (1998) FLC 92-819
In re S-B (Children) (Care Proceedings
Standard of Proof) [2010] 1 AC 678
Kendling & Anor & Kendling (2008) FLC 93-384
M and M [No 5] [2007] FCWA 85
Malec & JC Hutton Pty Ltd (1990) 169 CLR 638
Myers and Myers (2006) FLC 93-291
Re Freston (1883) 11 QBD 545
Schwarzkopff & Schwarzkopff (1992) FLC 92-303
Stradford & Stradford (2019) FLC 93-888
Tate & Tate (No 3) (2003) FLC 93-138
WORDS IN SQUARE BRACKETS REPLACE WORDS USED IN THE ORIGINAL JUDGMENT – PARTIES’ NAMES AND IDENTIFYING DETAILS HAVE BEEN CHANGED
IT IS NOTED that publication of this judgment by this Court under the pseudonym Molloy & Foust has been approved by the Magistrates Court at 150 Terrace Road, Perth pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).
GLASS M:
1 [Mr Foust] admits that he has committed two contempts of this Court. Both constitute a contravention of Orders under the Family Law Act 1975 (“the Act”) and involved a flagrant challenge to the Court’s authority.[1]
[1] Family Law Act 1975, s 112AP(1).
2 The question arising for determination is what punishment is appropriate. I may punish the contempts by committal to prison or fine or both.[2] I have a discretion to order punishment on terms, suspension of punishment, or the giving of security for good behaviour.[3]
Sentencing Principles
[2] Family Law Act 1975, s 112AP(4).
[3] Family Law Act 1975, s 112AP(6).
3 Part XIIIB of the Act is a complete code,[4] and state and federal sentencing law has no application.[5] It affords the Court the “widest possible discretion to mould the sanction to the circumstances of the individual situation within the overall principles and philosophy of the Family Law Act.”[6]
[4] Faukland & Shikia (2016) FLC 93-706 at [14].
[5] Abduramanoski & Abudramanoska (2005) FLC 93-215 at [80].
[6] Schwarzkopff & Schwarzkopff (1992) FLC 92-303 at 79,290.
4 In Abduramanoski & Abduramanoska,[7] the Full Court considered that the following criteria identified by Justice Palmer in Australian Securities and Investments Commission v Michalik to be of potential relevance in determining punishment for contempt of an order involving property or fiscal provisions:
[7] Abduramanoski & Abudramanoska (supra) at [79].
i)the seriousness of the contempt proved;
ii)whether the contemnor was aware of the consequences to himself of what he proposed to do;
iii)the actual or potential consequences of the contempt on the proceedings in which the contempt was committed;
iv)whether the contempt was committed in the context of a proceeding alleging crime or conduct seriously prejudicial to the public interest: see, for example, Von Doussa v Owens (No 3) (1982) 31 SASR 116;
v)the reason or motive for the contempt;
vi)whether the contemnor has received, or sought to receive, a benefit or gain from the contempt;
vii)whether there has been any expression of genuine contrition by the contemnor;
viii)the character and antecedents of the contemnor;
ix)what punishment is required to deter the contemnor and others of like mind from similar disobedience to the orders of the Court;
x)what punishment is required to express the Court's denunciation of the contempt.[8]
The Contempts
[8] Australian Securities and Investments Commission v Michalik [2004] NSWSC 1259 at [29].
5 On 24 May 2016, the Court made an Order restraining Mr Foust from alienating, encumbering or otherwise disposing of the property at [Suburb A] in the State of Western Australia (“the Property”). On 8 March 2020, Mr Foust entered into a contract for the sale of the Property. The Property was subsequently transferred to an unrelated third party in accordance with the contract.
6 On 1 May 2020, the Court ordered Mr Foust to immediately deposit the sale proceeds from the Property into the trust account of Ms Molloy’s solicitors. Mr Foust has not done so.
The Consequence of the Contempts
7 Mr Foust is the Respondent to ongoing proceedings initiated by Ms Molloy for alteration of the parties’ interests in property following the dissolution of their marriage. Those proceedings have a lengthy history involving a significant number of Court appearances. A final hearing scheduled to commence on 11 May 2020 was adjourned as a result of Mr Foust’s contempts.
8 Ms Molloy seeks final Orders that she retain the proceeds of sale of the Property. After repayment of a mortgage and sales costs, Mr Foust received proceeds of $625,727.65 following the Property’s sale. Ms Molloy’s filed schedule of Assets and Liabilities[9] contends that she has liabilities exceeding her assets of $73,408 and that Mr Foust otherwise has property interests worth $202,705, including land [in Suburb B] worth $165,000, held through a family trust. Although that document contends that Mr Foust has superannuation interests worth $227,965, Mr Foust gave evidence in the contempt hearing that his superannuation interests of $140,000 had been seized by the Australian Securities and Investment Commission. Ms Molloy asserts that her superannuation interests are worth $7,069.
[9] Filed 6 May 2020.
9 It is readily apparent that Ms Molloy’s claim for property relief has been substantially defeated by Mr Foust’s contempts. Were she to retain all of the parties’ non-superannuation assets aside from the proceeds of sale of the Property, she could only retain assets with a value of approximately $129,000 rather than the approximate value of $552,000 she claims.
10 The Orders of which Mr Foust is in contempt sought to preserve the subject matter of the dispute. Punishment is called for not so much for the purpose of upholding the Court’s authority as an end in itself, but in fulfilling Ms Molloy’s expectations that Court orders will be obeyed and sanctions will be imposed if not.[10]
Misleading the Court
[10] Tate & Tate (No 3) (supra) at [62].
11 On 12 March 2020, Ms Molloy filed an Application in a Case seeking that any proceeds of sale of the Property be deposited into a controlled monies account. That Application was supported by an Affidavit in which Ms Molloy deposed to an unnamed friend having told her the Property had been sold. She attached some online searches which did not identify the Property with particularity.
12 Ms Molloy’s Application was returned on 20 March 2020. Mr Foust attended Court and represented himself. He advised the Court that the Property was not on the market. He then said the following:
From 6 March up to probably last week I’ve had 11 real estate people ring me up. 11. And made appointments. I said, “Well, I didn’t make any appointments with anyone.” So something is going on. Right. And two of the people came to my door saying, “We’re – you’re not the person. You don’t sound like the person we spoke to.” So I never called you. I don’t need to sell my house, your Honour. Right. I’ve got a real estate agent – [an acquaintance] is a real estate agency. Right.[11]
[11] Transcript of Proceedings of 20 March 2020 page 3.
13 Mr Foust also said: “I’ve got no intentions of selling my house. My daughter was born in the house.”[12]
[12] Ibid, page 4.
14 When I raised with Counsel then appearing for Ms Molloy the injunction that was in place in relation to the sale of the Property, Mr Foust interjected and said:
Yes, there’s orders in place. I can’t do nothing with the house anyway. So why would I bother with a real estate agent? But these agents have been coming to my house and ringing me up. Who is ringing them up? The same thing happened - - -[13]
[13] Ibid, pages 4-5.
15 After I had indicated that I was proposing to adjourn Ms Molloy’s Application in a Case, Mr Foust stated that real estate agents started contacting him in 2018 before a scheduled trial and said:
Well, I think it – the – it must be coming from either my ex-wife or Bannermans – lawyers because I’m not – what – what – why should I sell the house for?[14]
[14] Ibid, page 6.
16 Mr Foust also said, “Well – well, if you’re going to adjourn it that’s good. That’s perfect.”[15]
[15] Ibid, page 6.
17 Mr Foust’s representations to the Court on that day were intended to mislead. He had already by the time of that hearing accepted an offer for the purchase of the property. He gave evidence in the contempt proceedings that it was he who contacted the real estate agent he engaged to sell the property and insisted that it remain a private listing.
18 Mr Foust gave evidence in the contempt proceedings that he was “in a very emotional and stressful state at the time”.[16] He deposes to having remained in hospital with his critically ill father the night before for the entire night. He deposes to having had little or no sleep the night before. My observations of Mr Foust’s demeanour on that occasion do not accord with his evidence in that respect. Consistent with his demeanour before me on other occasions, he was argumentative and cantankerous.
Cash withdrawals and diamond purchase
[16] Mr Foust’s Affidavit filed 3 July 2020, paragraph 31.
19 On 14 April 2020, Mr Foust completed the sale of the Property. This was despite having had his attention drawn to the injunction restraining him from selling the Property during Court proceedings on 20 March 2020. Further, despite being aware of the Application for the proceeds to be held in a controlled monies account, he directed the funds to be transferred to his personal account.
20 Mr Foust has withdrawn approximately $425,000 of the proceeds of sale of the Property in cash. He set up three bank accounts with different banking institutions to expedite its withdrawal given daily limits. Those withdrawals took place almost daily from 14 April 2020 until early May 2020.
21 On 27 April 2020, Mr Foust applied $200,000 from the proceeds of sale of the Property to the purchase of diamonds.
Mr Foust’s evidence as to the disposal of the cash and diamonds
22 Despite having no apparent background with problem gambling, Mr Foust gives evidence that he commenced gambling with an underground syndicate in November 2019 resulting in him owing the syndicate over $500,000 by January or February 2020. He gives evidence that he was charged interest of $100,000.
23 Mr Foust’s evidence was vague and imprecise. He claims to have been offered a line of credit by the syndicate. He was unable to answer how much credit he was thereby offered. He denied that there had been any discussion of any interest rate with the syndicate, yet claimed he was required to pay $100,000 in interest. Although he gave evidence that he had kept a notebook of the repayments he made on his debt, he did not give evidence of any precise sums owed or paid. Despite asserting there was a deadline by which the debt had to be paid, he was unable to identify the deadline. He said variously it was “hopefully by the end of May”, “the beginning of May” or “the end of May”.
24 Mr Foust’s evidence contained internal inconsistencies that were unexplained by him. He asserted that he met with members of the syndicate in February 2020 who were by then insisting on payments, and that he feared for his life. Despite the apparent urgency of the situation, he gave evidence of subsequently seeking to delay the sale of the property because he needed to “clear his head” and was dealing with his father’s health crises.
25 Despite his evidence that he told members of the syndicate in February he would make arrangements with the bank to make payments to them, he waited until 24 March 2020 to seek to draw on his existing line of credit secured by mortgage against the property. When asked about the delay, he answered that he didn’t understand the question.
26 At 10:05am on 27 April 2020, Mr Foust emailed Ms Molloy’s solicitors in the following terms:
Please provide me with your trust account details so I will transfer 50% of the proceeds to you on Thursday as I have an appointment at the bank, please send me a signed assurance that those funds will not be touched and remain in the trust account until an agreement is reached.[17]
[17] Exhibit A3.
27 Mr Foust was asked why he sent the email in cross-examination. He answered that he sent the email because he was going to put 50% of the proceeds into “whatever”. When he was asked why he didn’t, he said: “I didn’t have the money did I?” That evidence was false. He had sufficient funds at that time. He also gave evidence that he was going to put something in, but then claimed that he couldn’t.
28 When asked by the Court about the inconsistency between his email proposal and his claim that he then owed an underground gambling syndicate in excess of $500,000, he claimed not to understand the question. In re-examination, he gave evidence that he was just trying to keep the solicitors at bay and that he was going to try and put money into their trust account.
29 Mr Foust’s evidence on this issue lacked credibility. If on 27 April 2020 he owed in excess of $500,000 to a gambling syndicate who he considered would physically harm his children and himself, there is no reason he would have intended to put 50% of the proceeds of sale into the solicitors trust account. He was unable to explain why he would try to pay any money to Ms Molloy’s solicitors rather than pay all of his debt to ensure the safety both of himself and his children. The very same day he sent the email, Mr Foust purchased $200,000 worth of diamonds.
30 Further, Mr Foust paid his credit card balance on 30 April 2020. This is also inconsistent with his evidence that he feared for his life if his underground gambling debt was not paid. When asked in cross-examination whether paying his credit card was more important than paying the standover men who would break his legs, he initially claimed not to understand the question. When the question was repeated, he gave evidence that he always pays his credit card on time. That evidence is unable to be reconciled with his evidence that both his and his children’s safety was at risk.
31 Despite Mr Foust’s evidence that he considered his children’s safety to be at risk and that the threats to them were “very real”,[18] he did nothing to advise the children’s caregivers of any risk to their welfare.
[18] Mr Foust’s Affidavit filed 3 July 2020, paragraph 13.
32 Part way through his cross-examination, the Court was closed on the application of Mr Foust’s counsel. Nevertheless, Mr Foust gave no evidence to identify any of the individuals to whom he handed over $450,000 in cash and $200,000 in diamonds other than by their first names and by reference to generic motor vehicles. His affidavit failed to identify the person he alleges introduced him to the gambling syndicate. When pressed in cross-examination, he disclosed a name, although denied having the person’s phone number despite having known him for 10 or 15 years.
33 He claims that the gambling syndicate he became involved in involves lawyers, politicians, Magistrates and Judges. He identified no individuals involved other than to give the first names of the two members of the syndicate he alleges he was involved with.
34 Mr Foust produced no documents to corroborate any of his evidence. It was his evidence that he had kept a diary setting out the payments he had made to the syndicate which he disposed of after 18 May 2020. By then, he had been made aware from his attendances at Court on 11 and 12 May 2020 that he faced a possible term of imprisonment in relation to the foreshadowed contempt proceedings. Nevertheless, he destroyed the only document that corroborated his evidence. At the time of those Court hearings, on his evidence, he was in possession of a mobile phone which had been provided by the syndicate through which he could conduct his gambling. He failed to adduce any evidence in relation to the phone, for example, its phone number, the phone numbers of anyone who called him or whom he called on the phone, or even a photograph of its existence.
35 Mr Foust called no other witnesses to corroborate his evidence. He gave evidence that he told his brother [X] about his gambling debts. X was available but was not called to give evidence.
36 I do not accept Mr Foust’s account of the disposition of the cash and diamonds. It lacked consistency. To the extent he offered explanations for those inconsistencies, they also lacked credibility. I reject his Counsel’s submission that the inconsistencies were subtle.
37 In rejecting Mr Foust’s evidence of the disposal of assets, I do not accept his purported motive for the contempt. I accept Ms Molloy’s submission that it is more likely his course of contemptuous conduct was intended to defeat Ms Molloy’s claim. At all times his position to the Court is that she should receive no interest in any portion of the Property.
Is a Term of Imprisonment Appropriate?
38 Normally, the purpose of contempt proceedings is to coerce compliance.[19] Imprisonment, even for proven contempt, is a sanction of last resort.[20]
[19] Tate & Tate (No 3) (2003) FLC 93-138 at [57].
[20] Stradford & Stradford (2019) FLC 93-888 at [72]; Kendling & Anor & Kendling (2008) FLC 93-384; Tate & Tate (No 3) (supra); Hay & Hay (1998) FLC 92-819.
39 The Full Court in Tate & Tate (No 3) held that another purpose of contempt proceedings is punishment and held:
The purposes of imposing punishment would appear to reflect the need for individual and general deterrence and retribution for the party's failure to comply with the order. Retribution is called for because it is essential to the proper working of the court system that court orders are obeyed. If they are defied or ignored, the whole system of dispute resolution by litigation breaks down. While there are other means of dispute resolution available, in the final analysis a citizen has the right to approach a court to determine a dispute and the court has a duty to do so.[21]
[21] at [57].
40 In Borrie and Lowe The Law of Contempt (3rd Ed at 629), the following principle is stated:
Blatant and aggravated contempts particularly when repeated by a person who has clearly been warned as to the possible consequences of defying an order, will quite properly attract an immediate custodial sentence as a mark both of the gravity of the contempt and the court's disapproval and to deter contemnors and others who might be tempted to breach such an order.[22]
[22] quoted in Tate & Tate (No 3) at [64].
41 Mr Foust has engaged in a course of conduct both in defiance of Court orders and comprising a flagrant challenge to the Court’s authority. That course of conduct involved multiple transactions over a period of several months. I have rejected his evidence of the purported reason for doing so. He was made aware at Court appearances in May and June 2020 of the possibility of imprisonment should he be found to be in contempt. Those warnings did nothing to modify his contemptuous behaviour and did not result in the desired coercion.
42 I consider that neither a fine, nor a suspended term of imprisonment, appropriately reflects the objects of coercion and punishment. Although a sanction of last resort, I consider there to be no alternative but to sentence Mr Foust to a period of immediate imprisonment.
Is an Indefinite Period of Imprisonment Available?
43 Ms Molloy moves the Court to sentence Mr Foust to a period of imprisonment until he purges his contempt. No maximum penalty is prescribed by statute.[23] As to the appropriateness of a fixed term [or] an indefinite period of imprisonment, Lord Denning has held:
It seems to me that when the object of the committal is punishment for a past offence, then, if he is to be imprisoned at all, the appropriate order is a fixed term. When it is a matter of getting a person to do something in the future and there is a reasonable prospect of him doing it then it may be quite appropriate to have an indefinite order against him and to commit him until he does do it. But if there is no such prospect – as here – there should not be an indefinite term.[24]
[23] Family Law Act 1975, s 112AP.
[24] Danchevskyv Danchevsky [1975] Fam 17 at 21.
44 Because I have rejected Mr Foust’s evidence as to the disposal of the cash and diamonds, I am unable to conclude that there is no prospect of Mr Foust paying the proceeds of sale of the Property into a trust account.
45 The question of whether there is a reasonable prospect of Mr Foust complying in full or at least to a significant extent[25] is less straightforward. The forensic difficulty Ms Molloy faces is that the only identified witness who can definitively answer the question is Mr Foust who has a vested interest in misleading the Court in its proper resolution.
[25] Ascot Investments v Harper (No 3) (1982) FLC 91-253 at 77,407.
46 The possibility of Mr Foust purging his contempt is a prediction about the future, which by its very nature cannot be proved.[26] In determining the prospect of a future possibility, I am called upon to estimate the likelihood of the occurrence of that possibility.[27]
[26] Farnell & Anor & Chanbua (2016) FLC 93-700 at 81,280 [477].
[27] Malec & JC Hutton Pty Ltd (1990) 169 CLR 638 per Brennan and Dawson JJ at 639.
47 Writing in the context of assessing the future risk of harm to children, Baroness Hale has held that:
… the law has drawn a clear distinction between probability as it applies to past facts and probability as it applies to future predictions. Past facts must be proved to have happened on the balance of probabilities, that is, that it is more likely than not that they did happen. Predictions about future facts need only be based upon a degree of likelihood that they will happen which is sufficient to justify preventive action.[28]
[28] In re S-B (Children) (Care Proceedings: Standard of Proof) [2010] 1 AC 678 at [9].
48 On balance, I conclude that there is a reasonable prospect of Mr Foust purging his contempt. Mr Foust recently had control of the cash and diamonds. I have rejected his evidence as to their disposal. I infer that he retains some capacity to recover them.
49 I am satisfied that an indefinite period of imprisonment is available. It would carry the maximum incentive for Mr Foust to comply with the order for the repayment of the proceeds of sale.[29]
[29] Miller on Contempt of Court (4th ed), page 40.
50 I reject Mr Foust’s submission that the case is most similar to the circumstances of Faukland & Shikia,[30] where the Court apparently accepted the contemnor’s evidence that he suffered from an addiction to methamphetamine and there appeared to be no prospect of proceeds of sale of assets being retrieved. I have rejected Mr Foust’s evidence in relation to the disposal of assets.
Contrition, Mr Foust’s character and antecedents
[30] (2016) FLC 93-706.
51 Mr Foust’s demeanour in giving oral evidence in the contempt hearing was not consistent with his professions of regret. He was argumentative with counsel. He needed to be directed to answer questions on a number of occasions.
52 He told Ms Molloy’s counsel she was “asking a really stupid question”, despite no objection having been taken by his counsel to it. Despite his Counsel interjecting to permit Mr Foust to answer his question, he then took it upon himself to object to the question he was in the process of answering. He said the question was ridiculous and he wouldn’t answer it. He again required direction to answer a question that had properly been put to him.
53 Although Mr Foust gave evidence that he has ruined his whole life as a result of his conduct over recent months, he has made no apology for, nor expressed any remorse, for the consequence of his actions, namely that he has largely defeated Ms Molloy’s claim in this Court. That is particularly surprising in circumstances where the parties share the care of their 14 year old daughter. I am not satisfied that he has expressed any genuine contrition for his conduct.
54 Mr Foust deposes to having the care of his mother, after moving in to live with her after the sale of the Property. He gives evidence that she is 80 years old and suffers from [various health issues] which followed the death of Mr Foust’s father [earlier] this year. Mr Foust deposes to being her primary carer, which includes looking after her house, completing maintenance, gardening, cleaning and cooking. He also deposes to her becoming forgetful and needing someone to keep an eye on her.
55 He has not disclosed to the Court that he receives any payments as his mother’s carer.[31] He has two siblings. Although his brother is mourning the death of his son late last year, the evidence does not suggest that Mr Foust’s siblings are unable to provide any necessary assistance to their mother.
[31] As required by rule 13.06 of the Family Law Rules 2004.
56 Mr Foust has no criminal record. I accept that he has been affected by the loss of his nephew and father in recent months.
57 I place little weight on the character reference from Mr Foust’s brother X, who says that Mr Foust “may have had a lapse in judgment”,[32] in an apparent description of Mr Foust’s sustained contemptuous conduct. I have regard to other character references relied on by Mr Foust which appear to suggest that his character is otherwise unblemished.
Conclusion
[32] Annexure ‘F’ to Mr Foust’s Affidavit filed 3 July 2020.
58 Mr Foust’s contempts have had the effect of depriving Ms Molloy of her claim for property settlement by approximately $423,000 with the result that she can retain assets worth only approximately $129,000. His contemptuous course of conduct included actively misleading the Court and persisted despite warnings of its consequences. Mr Foust has done nothing to attempt to purge his contempt. He paid his credit card bill rather than making any attempt to comply with Orders of this Court. He has shown no remorse for the consequences of his conduct on Ms Molloy.
59 Severe punishment is required not only to deter Mr Foust but others of like mind from similar disobedience of the Court’s orders. It must also express the Court’s denunciation of the contempt.
60 Nevertheless, I accept the submission made on his behalf that he is likely to find incarceration extremely stressful and I accept that an indefinite period of imprisonment would be too severe a sentence. In reaching that conclusion I have particular regard to Mr Foust’s family commitments including both to his aging mother and his daughter.
61 Although review of punishment in other cases is of limited assistance, as each case depends on the Court’s assessment of the relevant facts,[33] I have had regard in particular to two decisions in determining that an appropriate term of imprisonment is 18 months.[34] The Court retains a discretion to discharge that sentence,[35] including in circumstances where Mr Foust purges his contempt.[36] It is open to Mr Foust to apply to make such an application to this Court.
[33] Australian Securities and Investments Commission v Michalik & Ors (supra) at [49].
[34] Myers and Myers (2006) FLC 93-291; M and M [No 5] [2007] FCWA 85; Abduramanoski & Abudramanoska (supra).
[35] Family Law Act 1975 s 112AP(7).
[36] Re Freston (1883) 11 QBD 545 per Fry LJ at 557.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Magistrates Court of Western Australia at 150 Terrace Road.
KB
Secretary17 JULY 2020
2
5
0