NCR Australia Pty Ltd v Credit Connection Pty Ltd

Case •

[2005] NSWSC 1118

•

11 November 2005

No judgment structure available for this case.
CITATION:

NCR Australia v Credit Connection [2005] NSWSC 1118
HEARING DATE(S): 19 & 20 October 2005
 
JUDGMENT DATE : 


11 November 2005

JURISDICTION:

Equity
JUDGMENT OF:

Campbell J

DECISION:

Sentence of 288 hours community service after allowing discount of ten percent for late plea of guilty.
CATCHWORDS:

PROCEDURE - contempt, attachment and sequestration - range of penalties available - principles to take into account in fixing sentence - standard of proof of facts relevant to sentence - availability of imprisonment as a sentence for contempt arising from breach of orders of court in civil proceedings - principles for exercise of discretion to impose imprisonment even if contemnor has not been served with sealed order endorsed with warning that imprisonment is a possible consequence of breach - preconditions for imposition of community service order - effect of plea of guilty - sentencing for multiple contempts - EVIDENCE - burden of proof, presumptions and weight and sufficiency of evidence - standard of proof for facts relevant to sentencing for contempt of court - CRIMINAL LAW - sentencing - whether community service order able to be imposed when imprisonment not possible for that particular offender and offence, but possible for the general category of offences which the offender has committed - meaning of "part of a planned or organised criminal activity" in list of aggravating factors in section 21A Crimes (Sentencing Procedure) Act 1999
LEGISLATION CITED:

Crimes Act 1900
Crimes (Sentencing Procedure) Act 1999
Crimes (Sentencing Procedure) Regulation 2005
Supreme Court Rules 1970
Uniform Civil Procedure Rules 2005
CASES CITED:

A-G for NSW v Whiley (1993) 31 NSWLR 314
Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98
Australian Securities and Investments Commission v Michalik and others [2004] NSWSC 1259; (2004) 52 ACSR 115
Australian Securities and Investments Commission v Michalik and others (No 2) [2004] NSWSC 1260; (2004) 62 NSWLR 335
Clifford v Middleton [1974] VR 737
Drummoyne Municipal Council v Lewis [1974] 1 NSWLR 655
Fullerton v Gardiner (Supreme Court of New South Wales, Powell J, 31 October 1978)
Johnson v The Queen (2004) 78 ALJR 616
Mill v The Queen (1988) 166 CLR 59
Miller & Anor v Eurovox Pty Ltd & Anor [2004] VSCA 211
Principal Registrar of the Supreme Court of New South Wales v Jando (2001) 53 NSWLR 527
R v Dolan [2005] NSWSC 320
R v Henry (1999) 46 NSWLR 346
R v Jurisic (1998) 45 NSWLR 209
R v Olbrich (1999) 199 CLR 270
R v Reynolds [2004] NSWCCA 51
R v Storey [1998] 1 VR 359
R v Tadrosse [2005] NSWCCA 145
R v Thomson; R v Houlton (2000) 49 NSWLR 383
R v Willard [2005] NSWSC 402
R v Wong (1999) 48 NSWLR 340
Regina v Said El Masri [2005] NSWCCA 167
Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309
Ryan v Wright (No 2) [2004] NSWSC 1019
Witham v Holloway (1995) 183 CLR 525
Ritchie's Uniform Civil Procedure (NSW)
PARTIES:

NCR Australia Pty Ltd - Plaintiff/Applicant
The Credit Connection Pty Ltd - First Defendant
Ray Naumoski - Second Defendant/Respondent
Gina Naumoski - Third Defendant
John Cannon - Fourth Defendant

FILE NUMBER(S):

SC 2316/00
COUNSEL:

P Newton - Plaintiff/Applicant
P Doyle - Second Defendant/Respondent
SOLICITORS:

Heidtman & Co - Plaintiff/Applicant
Unrepresented - Second Defendant/Respondent

LOWER COURT JURISDICTION:

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
EQUITY LIST

CAMPBELL J

11 NOVEMBER 2005

2316/00 NCR AUSTRALIA PTY LTD v CREDIT CONNECTION PTY LTD

JUDGMENT

1 HIS HONOUR: This judgment relates to what punishment, if any, should be ordered concerning ten separate charges of contempt of court brought by the plaintiff against the second defendant. Each of those charges relates to the breach of a Mareva order. The second defendant has pleaded guilty to all of the charges.

The Orders Breached

2 In proceedings brought by the plaintiff against four defendants, Young J on 10 May 2000 made a Mareva order which restrained the second defendant from dealing with his assets otherwise than for ordinary household living expenses or for the payment of any rates, taxes or outgoings which were due and payable by him. That order was made following a hearing in which both the plaintiff and the second defendant were represented by counsel. The second defendant was personally present at Court on the day the order was made. The same order was also made against his wife, the third defendant.

3 Thereafter, the Mareva order was varied by Court order on a total of six separate occasions. The first variation was made on 16 May 2000, when the expenditure which was permitted under the order was quantified as being “up to a maximum of $4,000 per month”. That variation was ordered after the second defendant had filed an affidavit which showed the monthly repayments on loans secured by the home he and his wife owned were a little more than $3,000.

4 The second defendant had two items of real estate. One was an interest which he held jointly with his wife in their home at 94 Grey Street Carlton. The other was a strata title unit, in Miranda, which was owned by the second defendant alone.

5 The second variation of the Mareva order was ordered on 21 February 2001. It enabled the second defendant to sell the Miranda unit to a named purchaser for a named sum of money, with the proceeds of sale to be used solely to pay out the existing mortgagee of the premises. It also permitted the second defendant and his wife to execute a mortgage over their home in favour of the Commonwealth Bank of Australia to secure an advance of up to $423,100 for the purpose of paying out the existing mortgagee on their home. It also provided that if those two transactions took place, the maximum amount allowable for payment of ordinary household living expenses or for the payment of any rates, taxes and outgoings due and payable by the second defendant and his wife was reduced to $2,500 each.

6 That variation was ordered after the second defendant had filed an affidavit on 15 February 2001. Part of that affidavit said: “On 16 May 2000 I consented to the following order:-“, and then set out verbatim the terms of the order which had been made on that day. The affidavit explained that the mortgagee of his home and of the Miranda unit had obtained orders for possession against those properties, that he had a purchaser for the unit, and an approval for finance in the stipulated amount from the Commonwealth Bank, to be secured over his home.

7 The Miranda unit was transferred to the named purchaser for the named amount of money, the existing mortgage on the home was paid out, and a fresh mortgage given to the Commonwealth Bank over the home. All those transactions occurred on 23 February 2001. Thus, the reduction to $2,500 per month in the amount the second defendant was permitted to use for expenses took effect from that day.

8 The third variation was made on 4 May 2001. It permitted the second defendant and his wife to give a mortgage over their home to Mr Bowles, solicitor, to secure legal expenses up to $30,000.

9 The fourth, fifth and sixth variations, which were made on 28 September 2001, 28 June 2002, and 19 May 2003 respectively, were all ones which increased the amount of expenditure on legal costs which was permitted. The fifth and sixth variation also imposed a cap on the further legal costs which could be incurred.

The Westpac Bank Account

10 On 14 February 2003 the second defendant opened a new bank account with Westpac. It had comparatively small balances in it – never more than of the order of $600 – until 18 June 2003, when an amount of $88,737.70 was paid into it.

11 That deposit arose from the fact that Mr Bowles, exercising a mortgagee’s power of sale, sold the home of the second defendant and his wife, and part of the net proceeds of sale came to be paid to the second defendant.

12 Over the period from 23 June 2003 to 3 October 2003 the only credits to the account were for bank interest. By 3 October 2003 the account was in overdraft.

The Charges of Contempt

13 Each of the ten charges of contempt alleges a breach of the order of 10 May 2000 as varied by the six variation orders. Each of the ten charges relates to a different withdrawal from the Westpac account over the period June to September 2003. Those withdrawals can be summarised as follows:

      Charge
      No.      		 Date Days after first charged withdrawal Amount Cumulative Total of withdrawals subject of charges
      1 23/6/03 - $13,505
      $13,505.00
      2 24/6/03 1 $8,184.50
      $21,689.50
      3 27/6/03 4 $8,000
      $29,689.50
      4 30/7/03 37 $9,850
      $39,539.50
      5 7/8/03 45 $5,800
      $45,339.50
      6 12/8/03 50 $5,000
      $50,339.50
      7 20/8/03 58 $5,000
      $55,339.50
      8 29/8/03 67 $4,000
      $59,339.50
      9 5/9/03 74 $4,600
      $63,939.50
      10 12/9/03 81 $6,000
      $69,939.50

14 The time from when the $88,737.70 was deposited into the account (18 June 2003) to the date when the last withdrawal the subject of the tenth charge was made (12 September 2003) is less than three months. Given the amounts of the withdrawals which are the subject of the individual charges, it is inevitable that each of them resulted in more than $2,500 per month being withdrawn. The money withdrawn has disappeared without trace.

15 The trial of the action brought by the plaintiff against, inter alia, the second defendant took place before Austin J on 2, 3 and 4 September 2003. His Honour reserved judgment. His Honour delivered reasons for judgment on 14 January 2004. Pursuant to them, orders were made on 3 March 2004 giving judgment to the plaintiff against each of the second, third, and fourth defendants, for $751,104.43. The judgment against the third defendant has been reversed on appeal, but the judgment against the second defendant remains on foot.

Bringing of the Contempt Charges

16 The contempt charges were made by Notice of Motion filed on 23 March 2004. They were reformulated in an Amended Notice of Motion filed 10 May 2004. As required by Part 55 rule 9 Supreme Court Rules 1970, the Amended Notice of Motion, each of the affidavits in support of it, and the exhibits to such of those affidavits as had exhibits, were served on the second defendant personally. They were served as follows:

      Documents served Date of service
      Notice of Motion and Statements of Charge filed 23/3/04, affidavit of Chan sworn 22/3/04, affidavit of McMurran sworn 23/3/04 23 March 2004
      Affidavit of Chan sworn 14/4/04 and exhibits 15 April 2004
      Amended Notice of Motion 10/5/04, affidavit of McMurran sworn 10/5/04 20 May 2004
      Affidavits of Chan sworn 27/6/05 and 28/6/05 29 June 2005

      From the difference between the dates of filing of a document and the date on which it was served on the second defendant, and from the fact that the plaintiff gives no evidence suggesting any difficulty in effecting service, I infer that there was no difficulty in effecting service of those documents on the second defendant.

17 The trial of the contempt Motion had twice been set down for hearing before the date of the hearing before me, but each of those earlier hearing dates was vacated as a result of problems the second defendant was having in obtaining legal representation and legal aid.

18 It was at the commencement of the hearing before me that I was informed for the first time that the second defendant would plead guilty to each of the ten charges. He had obtained legal representation only shortly before then. The hearing thereupon, and with the consent of counsel for both parties, proceeded with evidence relevant to sentence.

19 By the plea of guilty, the second defendant has admitted that, on each of the ten occasions charged, he has breached the Mareva order (as varied), and that such breaches were deliberate in the sense that they were not merely casual, accidental or unintentional: Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 113.

The Range of Possible Types of Penalty

20 Part 55 rule 13 Supreme Court Rules 1970 provides:

          “(1) Where the contemnor is not a corporation, the Court may punish contempt by committal to a correctional centre or fine or both.
          …
          (3) The Court may make an order for punishment on terms, including a suspension of punishment or a suspension of punishment in case the contemnor gives security in such manner and in such sum as the Court may approve for good behaviour and performs the terms of the security.”

      The provisions of Part 55 rule 13 declare the Court’s inherent power to punish for contempt but do not exhaust it: Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309.

21 The expression “contempt of court” covers a family of different types of legal wrong, all of which have an element in them of interfering with the administration of justice in the courts. Some types of contempt of court, such as interfering with witnesses, have always been recognised as crimes. Others, such as disobedience to court orders made in civil proceedings, are not in themselves criminal, though some aspects of the criminal law can become applicable to them. That Part 55 rule 13 confers on the Court a power to punish contempt by imprisonment does not determine the question of whether it would be in accordance with principle to impose a sentence of imprisonment for the particular type of contempt arising from disobedience to court orders made in civil proceedings.

22 One strand in the historical development of the power of the equity court to punish for a disobedience of its orders has been to impose a sentence of imprisonment of indefinite duration, as a means of persuading the person bound by the order to comply with it. That justification for imprisonment is not available in the present case, where the Mareva order has been broken in ways which are incapable of remedy.

23 The history of the law of contempt concerning breach of orders in civil proceedings shows a fitful recognition of another strand, whereby punishment can be imposed even in relation to breaches of order which are incapable of remedy. Since the decisions of the High Court in Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 and Witham v Holloway (1995) 183 CLR 525 it has been clear that punishment can be imposed for a breach of order made in civil proceedings even if the breach is incapable of remedy. The justification for the punishment in those circumstances is that it is a means of vindicating the court's authority. In particular, imprisonment has been imposed as a sanction for breach of Mareva orders: Australian Securities and Investments Commission v Michalik and others [2004] NSWSC 1259; (2004)52 ACSR 115. As Palmer J said in Australian Securities and Investments Commission v Michalik and others [2004] NSWSC 1259; (2004) 52 ACSR 115 at [32]:

          “… in punishing a contempt, a court of equity acts no differently from a court of common law. The distinction between common law and equity in this context is meaningless. In punishing for contempt, a judge of the Supreme Court is vindicating the authority of the Court itself, regardless of the Division in which the judge happens to be sitting.”

24 Punishment of someone for contempt should take into account the same principles as are applicable to punishment for crime: Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309 at 314. That includes the sentencing principles contained in the Crimes (Sentencing Procedure) Act 1999: A-G for NSW v Whiley (1993) 31 NSWLR 314 at 321 (in relation to its predecessor, the Sentencing Act 1989); Principal Registrar of the Supreme Court of New South Wales v Jando (2001) 53 NSWLR 527 at 536–537; Ryan v Wright (No 2) [2004] NSWSC 1019 at [18] per Gzell J; Australian Securities and Investments Commission v Michalik and others (No 2) [2004] NSWSC 1260; (2004) 62 NSWLR 335 at 343, [38]. (An appeal relating to Ryan v Wright (No.2) was taken, but on guilt, not penalty, and was dismissed: Wright v Ryan [2005] NSWCA 368.)

25 In principle, a contempt of court could be punished by anything within the range of penalties that can be imposed for a crime, pursuant to the Crimes (Sentencing Procedure) Act 1999. That range consists of imprisonment (section 5) periodic detention (section 6), home detention, (section 7) community service orders (section 8) good behaviour bonds (section 9), dismissal of the charge accompanied by either a good behaviour bond or a condition that the offender participate in an intervention programme (section 10), deferral of sentence (section 11), suspended sentence (section 12), fine (section 14), or the making of a non association or a place restriction order (section 17A).

26 Sections 6 and 7 make clear that penalties of periodic detention, and home detention, respectively, can be imposed only by “a court that has sentenced an offender to imprisonment … “. Thus, if a sentence of imprisonment has not actually been imposed on a particular offender, it is not open to the court to impose penalties of periodic detention or home detention on that offender.

Standard of Proof of Facts Relevant to Sentence

27 When a Judge is finding facts for the purpose of a sentence concerning crime, a fact which will be used in a way which is detrimental to the offender must be proved beyond reasonable doubt, while a fact which will be used in a way which will be advantageous to the offender can be proved on the balance of probabilities: R v Olbrich (1999) 199 CLR 270 at 281, approving R v Storey [1998] 1 VR 359 at 369. In Witham v Holloway (1995) 183 CLR 525 the High Court held that a contempt could be found proved only if it was established beyond reasonable doubt. The reason was that the punitive nature of the proceedings brought with it the criminal standard of proof. Consistently with that principle, the standard of proof used in deciding factual matters for the purpose of imposing a sentence for contempt of court should be the same as is used in imposing a sentence in criminal matters.

Factual Matters Relevant to the Sentence

28 The second defendant gives evidence that at the time of the withdrawals he was suffering from depression, substance abuse, and alcohol addiction, as well as being subject to pressures in his personal life. The predominant substance which he was abusing was, he says, cocaine. He gives the following evidence:

          “Q. How did the cocaine affect your behaviour?
          A. Well, makes you bullet proof, to some extent. It is a euphoric state. It gives you an enormous amount of stamina. You can stay up three or four days without sleep. It certainly affects your judgment. You don’t see things in a clear and proper way. You tend to look on the bright side of everything, even though if it doesn’t exist.
          Q. What thought did you give to the Mareva Order at the time you made those withdrawals?
          A. None.”

29 The second defendant also says that he did not make the withdrawals from the Westpac account with the intention of depriving the plaintiff of that money. Rather, he says, he did not give the Mareva order a thought at the time, and that his legal advice led him to be very confident of success in the proceedings.

30 There is independent medical evidence that he is presently being treated for depression, which provides at least some support for his evidence that he was suffering depression at the time of the withdrawals. He gives evidence that he has not used any illegal substances for well over a year and a half. That evidence is to some extent confirmed by the result of a pathology test conducted on him, on 14 October 2005, which showed him testing negative to methadone, cannabinoid, opiates, sympathomimetic amines, cocaine metabolites, and barbiturates. He tested positive to benzodiazepines and their metabolites, but that is because he has been prescribed a Valium-like pharmaceutical drug. His general health has improved recently.

31 The second defendant was in some ways not a very satisfactory witness. Cross-examination exposed discrepancies between the evidence he gave at the sentence hearing about how long it was since he had been employed, and evidence he had given in earlier affidavits. I am not satisfied that his recollection is very reliable about his own subjective processes at the time of making the various withdrawals. An affidavit he had filed in connection with the contempt motion, at a time he was unrepresented, and which was not read by his counsel at the sentence hearing but was put to the second defendant in cross-examination, gave a totally unconvincing excuse for the contraventions. In these circumstances, of the topics on which he has given evidence, I do not accept that the withdrawals were made without thought about the Mareva orders, or that he was not aware that the withdrawals would result in the plaintiff being deprived of assets against which to execute any judgment it might eventually obtain. The second defendant is an intelligent and articulate man, and, whatever he might have known about the details of the various variations of the Mareva orders, he knew that there was a Court order on foot which permitted him to dispose of his assets only for particular purposes, and up to a certain amount (which was $4,000 or less) per month. He also knew that that order had been varied from time to time. I accept the balance of his evidence which I have just recounted. I do not accept that his cocaine use at the time of the withdrawals is a mitigating factor or excuse.

32 I accept that the second defendant became bankrupt in 2004 as a consequence of the judgment given against him in these proceedings. Around the time he became bankrupt he separated from his wife and children, and remains separated from them. He has been unemployed for several years. At present he is living with his parents, and his income consists of sickness benefits, of approximately $450 per fortnight, after child maintenance has been deducted. He says, and I accept, that he wants to get back into gainful work, and to resume contact with his children.

33 His general practitioner describes him as having a “fragile mental state”, and reports that he has responded poorly to his existing medications, and that there is some confusion as to his exact diagnosis. His only brush with the criminal law occurred approximately two years ago, when he received a three month suspension of his driver’s licence for a mid-range DUI offence. He is now aged 42. He was in steady employment or operating his own business from the time he left school until the events leading to this litigation. He has expressed a desire to deal with these charges of contempt, and get on with his life. At an interview which was arranged with a probation and parole officer, he attended punctually, showed a co-operative attitude, and stated an intention that if a community service order were imposed he would perform it to completion. The prospects of him rehabilitating himself are good.

Effect of Failure to Serve Order Endorsed with Penal Notice

34 Part 42 Rule 8 Supreme Court Rules 1970 provided:

          “(1) Subject to the rules, a judgment shall not be enforced by committal or sequestration unless—
              (a) a minute of the judgment is served personally on the person bound, and
              (b) if the judgment requires the person bound to do an act within a specified time, the minute is so served before that time expires.
          …
          (3) A minute of a judgment served under this rule must bear a notice (naming the persons concerned) that the person served is liable to imprisonment or to sequestration of property if—
              (a) where the judgment requires the person bound to do an act within a specified time, the person bound refuses or neglects to do the act within that time, or
              (b) where the judgment requires the person bound to do an act forthwith or forthwith upon a specified event and the person bound refuses or neglects to do the act as the judgment requires, or
              (c) where the judgment requires the person bound to abstain from doing an act, the person bound disobeys the judgment.
          …
          (6) Where a person liable to committal or sequestration of his property by way of enforcement of a judgment has notice of the judgment—
              (a) by being present when the judgment is directed to be entered or when the order is made, or
              (b) by being notified of the terms of the judgment whether by telephone, telegram or otherwise,
              the judgment may be enforced by committal of that person or by sequestration of his property notwithstanding that service has not been effected in accordance with this rule.
          (7) The Court may dispense with service under this rule.”

35 Those provisions are now mirrored in Rule 40.7 Civil Procedure Rules 2005.

36 The second defendant was never served personally with a sealed copy of the court orders. Hence, necessarily, he was never served with a minute of a judgment bearing the endorsement referred to in Part 42 rule 8(3).

Structure of Part 42 Rule 8

37 The way in which Part 42 rule 8 Supreme Court Rules 1970 works is that, first, subrules (1) and (3) contain a positive requirement that, before a judgment is enforced by committal, a minute of the judgment be personally served on the person bound, in a form which is endorsed with the notification referred to in subrule (3). The minute of the judgment which is so served must be a minute of the very judgment in relation to which the order for committal is sought. Thus, in the present case, the minute of the judgment which is personally served was required to be a minute of the order of 10 May 2000 and of each of the variation orders which are identified in the Amended Notice of Motion and in the ten Statements of Charge.

38 Subrule (6) creates a discretionary power in the Court to enforce a judgment by committal even if the requirements of the earlier paragraphs in the rule have not been complied with. The circumstance in which that discretionary power arises is either one of the circumstances listed in subrule 6(a) and (b). However, the “judgment” that is there referred to is the judgment that is being sought to be enforced. Thus, in the present case, one of the circumstances in which the discretionary power under subrule 6 could be exercised would be if the second defendant had been present when the order of 10 May 2000, and each of the subsequent varying orders identified in the Notice of Motion and each Statement of Charge, was made. The other is if the second defendant had been notified of the terms of the order of 10 May 2000, and each of the varying orders.

39 Para (7) confers a separate power for the Court to dispense with service. It is in terms unconfined.

Second Defendant’s Awareness of the Terms of the Orders

40 The plaintiff submits that even though the second defendant was not served with an order endorsed as required by Part 42 rule 8(3) it is still open to impose a sentence of imprisonment, because the second defendant had notice of the orders, and so Part 42 rule 8(6) applies. It has not been shown that the second defendant was present when any of the varying orders was made after 10 May 2000. Thus the discretion under Part 42 rule 8(6) cannot arise through the operation of Part 42 rule 8(6)(a).

41 Turning now to Part 42 rule 8(6)(b), I am satisfied beyond reasonable doubt that the second defendant knew of the terms of the order as it had originally been made. He was personally present when it was made. He set out its terms verbatim in his affidavit of 15 February 2001, and said he had consented to it. In another affidavit of 17 April 2001 he gave an accurate paraphrase of the substance of the order as originally made. He swore several affidavits for the purpose of applications to vary the orders.

42 On 14 January 2003 Mr Bowles wrote to the second defendant and his wife, saying:

          “We refer to our telephone conversation today regarding the terms of the mareva injunction currently on foot. So as there will be no doubt about the terms of that injunction we enclose a copy of the order dated 10 May 2000 which, as you know, has been varied on a couple of occasions to allow for disposition of assets and the granting of the mortgage to the writer to secure costs.
          I you have any queries in connection with the terms of the order please contact the writer.”

      I infer that what was enclosed was, as stated, a copy of the order dated 10 May 2000 – ie, not a copy of the order as varied.

43 The second defendant has given evidence to the effect that – at a time which I take from the context of the question to be on or fairly soon after 10 May 2000 – he saw a copy of the order, but did not read it in any detail. He says that the explanation of it given to him by his counsel was that the order meant that he could not sell his property, or his house, and that his solicitor at the time did not expand or correct that explanation. He says that no solicitor ever told him that going to gaol was a possible consequence of breach of the order. He says he regarded it as acting like a caveat over his real estate, and that he did not try to deal with his real estate without the Court’s permission.

44 When the explanation which the second defendant says his counsel gave him of the effect of the order is so inadequate, there is some improbability in the second defendant’s evidence on that topic. When no confirmatory evidence is called, and I have doubts about the accuracy of the second defendant’s recollection, he has not discharged the onus of proof concerning that explanation. Nor am I prepared to accept his unsupported evidence that no solicitor ever told him that going to gaol was a possible consequence of breach of the order. The consequence of that, though, is that there is simply no evidence on the topic of whether the second defendant was aware of the potential consequences of breach of the order.

45 The original Notice of Motion identified the order of which the second defendant was alleged to be in breach as being the order made by Young J on 10 May 2000 as varied by certain other orders. However, it omitted reference to the variations which had been made on 21 February 2001 and 28 September 2001. It also included a reference to yet another variation which was made to the order on 3 March 2004, after the second defendant had made the withdrawals which are the subject of the ten charges. The Statements of Charge which were originally served contained those same errors. As well, each Statement of Charge set out the terms of the order alleged to have been breached, by stating what the order of 10 May 2000 had become after making to it all the variations which the Statement of Charge alleged had been made. Because the variation made on 21 February 2001 was not referred to, each Statement of Charge alleged that the maximum amount of which the second defendant was entitled to divest himself was $4,000 per month.

46 The affidavits served with the original Notice of Motion gave evidence of the same variations to the original order as were referred to in the Notice of Motion itself.

47 An affidavit from a solicitor for the plaintiff sworn 14 April 2004 explains how, on searching the Court file on 29 March 2004, she discovered that the order of 21 February 2001 had been made, and that on the day it was made the second defendant was represented by counsel.

48 The variation of 28 September 2001 had been proved by one of the affidavits served with the original Notice of Motion, and its omission from the original Notice of Motion and original Statements of Charges seems to have been a clerical mistake.

49 If the plaintiff itself, on a serious occasion like seeking to have someone punished for contempt, could make these sorts of mistakes, it is by no means fanciful that the second defendant might have made such mistakes too, concerning the precise nature of the variations.

50 In all these circumstances I am not satisfied beyond reasonable doubt that the second defendant was aware of the precise terms, or even the substance, of each variation which had been made. It follows that neither of the preconditions laid down by Part 42 rule 8(6) for the operation of the discretion to impose a sentence of imprisonment has been shown to apply.

The Discretion Under Part 42 Rule 8(6)

51 Even if I were wrong in concluding that the circumstances for exercise of the discretion under Part 42 rule 8(6) had not arisen, I would not exercise that discretion so as to impose a sentence of imprisonment. In Drummoyne Municipal Council v Lewis [1974] 1 NSWLR 655 Holland J considered a situation where committal for contempt was sought concerning a breach of an injunction, where no minute of the order had been served on the defendants, but they had been informed by letter that (at 657) “… orders had been made in accordance with paragraphs in the summons which were referred to … [and] that, if the orders were disobeyed, proceedings would be taken for contempt of court.” In one such letter the defendants were informed that an application would be made for their “attachment”. Holland J said, at 658:

          “In my opinion, the power provided in 8 (6) ought to be exercised sparingly. To commit a person to prison for disobedience of an order of the Court is a most serious matter and when the rules expressly require in mandatory terms personal service of the order in an official form showing on its face that it emanates from and is authenticated by the seal of the Court with an express statement indorsed thereon that disobedience is liable to lead to "imprisonment", it seems to me that, unless there are special circumstances justifying non-compliance with the requirements of the rules, they ought not to be disregarded by the Court. There is no suggestion in the present case of any attempt by the defendants to avoid service of a minute of the judgment. There is no evidence offered as to why the council chose to adopt its own form of notifying the defendants of the terms of the orders or of the consequences of non-compliance instead of following the rules so as to leave it beyond doubt that the defendants had been told in an authoritative way that imprisonment would follow disobedience.”
          …
          It seems to me that these rules are so framed and the power of the Court so far reaching that the Court itself has a duty to see that the rules are obeyed, unless there are good grounds for disregarding them in a particular case. If they had been obeyed in the present case, I would have had no hesitation making an order committing the defendants for disobedience of the judgment, but I do not see any sufficient reason in the present case for permitting the rules to be disregarded.”

52 No doubt one reason why his Honour did not regard the letters which the Council sent to the defendants as an adequate compliance in substance with the rules is because the endorsement required by Part 42 rule 8(3) specifically notifies the recipient that he or she is liable to “imprisonment” – a concept which ordinary people can be expected to understand, in a way that they might not understand the concept of “attachment”. Other reasons for requiring, in the ordinary case, compliance with the rule are that :


      (a) being personally served with a formal document like a court order is better calculated to bring home to the recipient’s mind the importance of the document with which he or she is served, by comparison with merely receiving such a document in the mail;

      (b) to be told of the liability to imprisonment by a document authenticated by the Court seal confers on that message the authority of the Court itself, and is better calculated to bring the seriousness of the message home to the mind of the recipient than would be a warning or threat emanating merely from an opposite party in litigation; and

      (c) imprisonment would be readily understood by most people to be a possible consequence of committing a serious crime. Even though ordinary members of the community could be expected to understand that breach of a court order made in civil proceedings was wrong and was a serious matter, it cannot be so readily assumed that ordinary members of the community would automatically appreciate that imprisonment was one of the possible consequences of breach of a court order made in civil proceedings.

53 The plaintiff referred me to Fullerton v Gardiner (Supreme Court of New South Wales, Powell J, 31 October 1978, noted in part only in Ritchie’s Uniform Civil Procedure (NSW) para [190,155]). That was a case where the prerequisite for the operation of Part 42 rule 8(6) was satisfied, and the discretion which the court was called on to exercise was whether it was appropriate to order committal of a person notwithstanding that service had not been effected in accordance with that rule. It differed from the present case in that there had been no variations of the order as originally pronounced, the contemnor was present in court when the formal orders were made, and actually consented to those orders. The orders in question were ones prohibiting the contemnor from molesting and interfering with the defendant. There was evidence that the contemnor understood that if he assaulted the defendant he would be in breach of the order, and if he tried to remove the child which he and the defendant had had, from the defendant’s care, he would be acting wrongly, and that if he acted in defiance of the order of the court he would render himself liable to some form of penalty (even though he thought it would take the form of a fine, or a bond) (judgment page 5-6). Further, his Honour found (page 11), that even though the contemnor may not have appreciated the full ambit of the restraint imposed upon him by the injunction, the actions he had engaged in involved a breach of what he understood the restraint imposed upon him to be (page 11).

54 In the present case the second defendant knew that the Mareva order was important. However, I do not find that the second defendant had knowledge of the terms or substance of the order as affected by all the variations, nor do I make any positive findings about the second defendant having a belief about there being any particular consequences which would follow from a breach of the order.

55 Further, there is no reason given why the plaintiff did not serve a copy of the order containing the endorsement required by Part 42 rule 8(3). There is no evidence that the second defendant was avoiding service, or that there were any circumstances of pressing urgency which might make service of an endorsed order impractical. The policy behind Part 42 rule 8, that a person should not be punished by imprisonment, unless it is brought home to him or her that imprisonment is a potential consequence of breach of the order, is not a policy which is lightly to be departed from. I do not see sufficient reason to do so.

The Discretion Under Part 42 Rule 8(7)

56 In Miller & Anor v Eurovox Pty Ltd & Anor [2004] VSCA 211 Vincent JA, with whom Batt and Buchanan JJA agreed, considered the consequences of a failure to serve a person bound by a Mareva order with a copy of the order endorse with a warning of the type required by Part 42 rule 8 Supreme Court Rules 1970. A Victorian rule of court was in terms not materially different to Part 42 rule 8. In an application under the Victorian equivalent of Part 42 rule 8(7) his Honour said, at para [31]:

          “By reason of the penal character of r 75.11 of the Rules for contempt of court, it is necessary that there be strict proof, satisfying the criminal standard, of the conduct constituting the contempt: Witham v Holloway (1996) 183 CLR 525. In so far as a finding of contempt is based upon non-compliance with an order of the Court, it will be necessary, save perhaps in the case of some technical or inconsequential defect, also to establish to the same standard that the formalities associated with the order have been strictly satisfied. A defect may be regarded as inconsequential in this sense, if it can be demonstrated, by some other means, that the person charged was well aware of their obligations under the order and the possible consequences of breaching it.”

57 And at [35]:

          “There is no material before the Court upon which the inference could be properly drawn beyond reasonable doubt that, in the absence of the endorsement, the appellants possessed any knowledge or understanding of the consequences that could follow a breach of the terms of the Mareva Order. In that situation, the failure to comply with the Rules could not properly be regarded as inconsequential.”

58 In so holding, his Honour applied a statement of Kaye J in Clifford v Middleton [1974] VR 737 at 739, 741 that:

          “… Attachment proceedings, being penal and affecting the liberty of the subject, are of a criminal character, so that the utmost strictness in procedure and proof is demanded: Hall & Co v Trigg [1897] 2 Ch 219, at p. 222; Re Bramblevale Ltd [1970] Ch 128; [1969] 3 All ER 1062; Comet Products UK Ltd v Hawker Plastics Ltd [1971] 2 QB 67; [1971] 1 All ER 1141, and Oswald on Contempt, 3rd ed, pp. 210-11. An application to attach a party arising out of disobedience of the Court’s order which, if it requires him to perform an act, must be endorsed with a memorandum in the form or to the effect prescribed by O 41, r 5. The purpose of the endorsement is to warn the party of the consequences which might befall him should he fail to perform the act directed. It follows that a party will not be attached for disobedience of a mandatory order unless he has been served with a copy of the order, although personal service may be dispensed with if it is shown that he has evaded service: Re Tuck ; Murch v Loosemore [1906] 1 Ch 692; Gordon v Gordon [1946] P 99, at p. 103; [1946] 1 All ER 247, and Taylor v Whelan [1962] VR 306, at p.307.
          …
          In my opinion, the power to relieve a party from the consequences of non- compliance with the Rules of the Court where the liberty of the subject is in jeopardy should not be exercised unless the evidence shows that the requirements of and purpose for the particular rule have been fulfilled in a manner otherwise than in the form provided.”

59 I would not want to confine the discretion conferred by Part 42 rule 8(7) by a statement as categorical as the one of Kaye J in the final sentence of the first of the paragraphs from Clifford v Middleton [1974] VR 737 which I have just quoted. However, a very important factor in deciding whether to exercise the discretion under Part 42 rule 8(7) is whether the purpose of Part 42 rule 8 – which I have considered in para [52] above – has in substance been satisfied by some means other than service of a minute of the judgment bearing the required endorsement. In some circumstances though, such as where a person to whom an order was directed was evading service, it might be appropriate to impose a sentence of imprisonment even if all those purposes had not been in substance fulfilled.

60 For similar reasons to those which I have given as to why I would not exercise the discretion under Part 42 rule 8(6) if there were occasion to do so, I do not exercise the discretion under Part 42 rule 8(7) to dispense with service of the order completely.

61 It follows that the most effective of the available sanctions for breach of a Mareva order, namely imprisonment, will not be available. That this result is arrived at does not mean that the effectiveness of the Court’s processes, as a general rule, for ensuring compliance with Mareva orders is compromised. Rather, in this particular case, the unavailability of imprisonment is a consequence which the plaintiff has brought upon itself.

Availability of Community Service Order

62 Section 8(1) Crimes (Sentencing Procedure) Act 1999 provides:

          “8(1) Instead of imposing a sentence of imprisonment on an offender, a court may make a community service order directing the offender to perform community service work for a specified number of hours.”

63 There is a question of construction about the meaning of the opening words of section 8(1). One possible reading of them is that if an offence is on its face the type of offence for which imprisonment could be imposed, then, instead of imprisonment, the court can impose a community service order. Another possible reading of them is that a community service order can be imposed only if, in the circumstances of the particular case before the court, imprisonment is an available sentencing alternative for that particular crime of that particular offender.

64 That question is resolved in favour in the of the first of these two possible readings by the decision of the Court of Criminal Appeal in Regina v Said El Masri [2005] NSWCCA 167 where, at [32], Johnson J (with whom Hunt AJA and Hulme J agreed) said:

          “The opening words of s.8(1) (which appear also at the commencement of s.9(1) relating to good behaviour bonds) do not confine the availability of community service orders to cases which otherwise would be visited by imposition of a sentence of imprisonment. A community service order is an important sentencing alternative available to the courts.”

65 Thus, the fact that this is not a case where it is open, under Part 42 rule 8 Supreme Court Rules 1970 to send the second defendant to gaol, does not prevent the court from imposing a community service order, if that is otherwise a suitable punishment.

66 Section 86 of the Crimes (Sentencing Procedure) Act 1999 imposes restrictions on when the court can make a community service order:

          “(1) A community service order may not be made with respect to an offender unless the court is satisfied:
              (a) that the offender is a suitable person for community service work, and
              (b) that it is appropriate in all of the circumstances that the offender be required to perform community service work, and
              (c) that arrangements exist in the area in which the offender resides or intends to reside for the offender to perform community service work, and
              (d) that community service work can be provided in accordance with those arrangements.
          (2) In deciding whether or not to make a community service order, the court must have regard to:
              (a) the contents of an assessment report on the offender, and
              (b) such evidence from a probation and parole officer as the court considers necessary for the purpose of deciding whether to make such an order.”

67 The practical effect of section 86(2) is that a community service order cannot be imposed unless an assessment report has first been obtained. The second defendant has been interviewed by a probation and parole officer, who has provided a report to the Court assessing him as suitable for a community service order in accordance with section 86(1), and nominated a particular office of the NSW Probation and Parole Service as the one to which he should be ordered to report if such a sentence is imposed. I am satisfied that section 86 has been complied with. Thus, a community service order is an available sentencing alternative in the present case.

Principles of Deciding the Actual Sentence for Contempt

68 A sentence for crime is arrived at as a result of an instinctive synthesis of multiple factors. It is, nonetheless, a judicial decision, because principles of law determine the factors that can properly be taken into account, and a judicial judgment can be made by an appellate court of whether the way in which those factors have been taken into account is within the range of legally permissible outcomes. The same applies to sentencing for contempt.

69 The Crimes (Sentencing Procedure) Act 1999 sets out some of the principles of law which are to be applied. Section 3A states the purposes to be achieved:

          “The purposes for which a court may impose a sentence on an offender are as follows:
          (a) to ensure that the offender is adequately punished for the offence,
          (b) to prevent crime by deterring the offender and other persons from committing similar offences,
          (c) to protect the community from the offender,
          (d) to promote the rehabilitation of the offender,
          (e) to make the offender accountable for his or her actions,
          (f) to denounce the conduct of the offender,
          (g) to recognise the harm done to the victim of the crime and the community.”

70 Section 21A sets out some of the factors that are to be taken into account:

          “(1) General
              In determining the appropriate sentence for an offence, the court is to take into account the following matters:
              (a) the aggravating factors referred to in subsection (2) that are relevant and known to the court,
              (b) the mitigating factors referred to in subsection (3) that are relevant and known to the court,
              (c) any other objective or subjective factor that affects the relative seriousness of the offence.
              The matters referred to in this subsection are in addition to any other matters that are required or permitted to be taken into account by the court under any Act or rule of law.
          (2) Aggravating factors
              The aggravating factors to be taken into account in determining the appropriate sentence for an offence are as follows:
              (a) the victim was a police officer, emergency services worker, correctional officer, judicial officer, health worker, teacher, community worker, or other public official, exercising public or community functions and the offence arose because of the victim’s occupation,
              (b) the offence involved the actual or threatened use of violence,
              (c) the offence involved the actual or threatened use of a weapon,
              (d) the offender has a record of previous convictions,
              (e) the offence was committed in company,
              (f) the offence involved gratuitous cruelty,
              (g) the injury, emotional harm, loss or damage caused by the offence was substantial,
              (h) the offence was motivated by hatred for or prejudice against a group of people to which the offender believed the victim belonged (such as people of a particular religion, racial or ethnic origin, language, sexual orientation or age, or having a particular disability),
              (i) the offence was committed without regard for public safety,
              (j) the offence was committed while the offender was on conditional liberty in relation to an offence or alleged offence,
              (k) the offender abused a position of trust or authority in relation to the victim,
              (l) the victim was vulnerable, for example, because the victim was very young or very old or had a disability, or because of the victim’s occupation (such as a taxi driver, bank teller or service station attendant),
              (m) the offence involved multiple victims or a series of criminal acts,
              (n) the offence was part of a planned or organised criminal activity.
              The court is not to have additional regard to any such aggravating factor in sentencing if it is an element of the offence.
          (3) Mitigating factors
              The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows:
              (a) the injury, emotional harm, loss or damage caused by the offence was not substantial,
              (b) the offence was not part of a planned or organised criminal activity,
              (c) the offender was provoked by the victim,
              (d) the offender was acting under duress,
              (e) the offender does not have any record (or any significant record) of previous convictions,
              (f) the offender was a person of good character,
              (g) the offender is unlikely to re-offend,
              (h) the offender has good prospects of rehabilitation, whether by reason of the offender’s age or otherwise,
              (i) the offender has shown remorse for the offence by making reparation for any injury, loss or damage or in any other manner,
              (j) the offender was not fully aware of the consequences of his or her actions because of the offender’s age or any disability,
              (k) a plea of guilty by the offender (as provided by section 22),
              (l) the degree of pre-trial disclosure by the defence (as provided by section 22A),
              (m) assistance by the offender to law enforcement authorities (as provided by section 23).
          (4) The court is not to have regard to any such aggravating or mitigating factor in sentencing if it would be contrary to any Act or rule of law to do so.
          (5) The fact that any such aggravating or mitigating factor is relevant and known to the court does not require the court to increase or reduce the sentence for the offence.”

The Aggravating Factors in Section 21A

71 Of the aggravating factors which are listed in section 21A(2), the only ones which are possibly relevant on the facts of this case are the ones listed in paras (m) and (n). When one applies this legislation to contempt of court as though contempt of court were a crime, the breaches of court order involved in this case involved a series of breaches of the orders, and so factor (m) is made out.

72 In deciding whether the aggravating factor in para (n) is present, there is first a question of construction about what is meant by “organised criminal activity”. In one sense, “organised criminal activity” involves the activities of several people that are planned or co-ordinated to carry out the crime. That is the sense involved in media discussion about whether organised crime is on the increase. In another sense, however, it can include activity that is carried out by just one person, concerning which that person engages in planning or preparation.

73 As a matter of policy, it seems an appropriate matter to take into account as an aggravating factor, in sentencing someone for crime, that the crime is one which involved planning and forethought, rather than being something done on the spur of the moment, even if the crime involved the activity of only one person. Thus policy supports the expression extending to the latter of the two constructions.

74 As well, the aggravating factor in para (n) is expressed in a composite phrase, “part of a planned or organised criminal activity”. There is no reason, as a matter of ordinary English, to think that “planned criminal activity” has any necessary element in it of there being more than one person involved.

75 Finally, the actual practice of the courts has been to treat the factor in para (n) as being present when there is organised activity carried out by just one person (eg R v Dolan [2005] NSWSC 380 at [34]; R v Reynolds [2004] NSWCCA 51 at [37]-[41]), and to treat the factor as being present even if the organisation involved is not complicated (eg R v Tadrosse [2005] NSWCCA 145 at [23]; R v Willard [2005] NSWSC 402 at [32]; R v Dolan [2005] NSWSC 380 at [34]; R v Reynolds [2004] NSWCCA 51 at [37]-[42]. For these reasons I conclude that the factor in para (n) can be present if there is planned organised criminal activity engaged in by just one person.

76 Translating the language of para (n) into language appropriate to contempt of court, the various breaches of order were committed over a fairly lengthy period of time, and involved sufficient repetition and system to lead to the conclusion that they were organised. Thus I take factor (n) into account as an aggravating factor.

The Mitigating Factors in Section 21A

77 Of the mitigating factors which are listed in section 21A(3), ones which might possibly be relevant on the facts of this case are those listed in paras (e), (f), (g), (h) (i) and (k). I accept that those listed in paras (e), (f), (g), (h) and (k) are made out.

78 So far as factor (i) is concerned, there is no evidence of the second defendant having made reparation in any financial sense to the plaintiff. However in his evidence he offered an apology, as follows:

          “Q. Do you have anything yourself to say to the Court about your conduct?
          A. I certainly would like to apologise to the Court if I have breached the orders directly or indirectly, knowingly or unknowingly. That was certainty not my intention. Beyond that, I don't see what else I can say.”

79 The key element in factor (i) is remorse. One element of remorse is that the offender understands the harm that his conduct has caused to the victim, and sincerely regrets having caused that harm. There is none of that expressed here. This apology is more directed to the Court itself. While it is legitimate to take into account an expression of regret directed to the Court itself for breaching its orders, the apology is not unreserved, even insofar as it is directed to the Court. I take that apology into account, but do not give it great weight.

80 As well, I recognise that while a plea of guilty is sometimes an expression of remorse, on other occasions it is a recognition of the inevitable, or a calculated attempt to gain an advantage in sentencing. Hence the guideline offered in R v Thomson; R v Houlton (2000) 49 NSWLR 383 at 412 [118] that “it is not desirable to separate out the factor of a plea as an indication of remorse from other manifestations of remorse.” In the present case, the evidence against the second defendant was extremely strong, and I do not regard his plea as in itself an indication of any significant remorse.

81 Other aspects of the plea of guilty are given special consideration, as a mitigating factor, at paras [84] – [87] below.

Other Possible Factors

82 In a specific context of imposing punishment for a contempt of court consisting of a breach of Mareva orders, Palmer J in Australian Securities and Investments Commission v Michalik & others [2004] NSWSC 1259; (2004) 52 ACSR 115 at [29] listed as appropriate factors:

          “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 166;
          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”

83 To the extent to which these factors are not ones specifically mentioned in section 21A, they can still be taken into account as matters which are legitimate to take into account, even though not necessary to take into account. To the extend that any of these matters have been mentioned in these reasons for judgment, they have been taken into account.

Discount for Plea of Guilty

84 Section 22 of the Crimes (Sentencing Procedure) Act 1999 provides:

          “(1) In passing sentence for an offence on an offender who has pleaded guilty to the offence, a court must take into account:
              (a) the fact that the offender has pleaded guilty, and
              (b) when the offender pleaded guilty or indicated an intention to plead guilty,
              and may accordingly impose a lesser penalty than it would otherwise have imposed.
          (2) When passing sentence on such an offender, a court that does not impose a lesser penalty under this section must indicate to the offender, and make a record of, its reasons for not doing so.
          (3) Subsection (2) does not limit any other requirement that a court has, apart from that subsection, to record the reasons for its decisions.
          (4) The failure of a court to comply with this section does not invalidate any sentence imposed by the court.”

85 Guidelines for the consideration to be given in criminal sentencing to a plea of guilty have been laid down by a five-member bench of the Court of Criminal Appeal (Spigelman CJ, with whom Wood CJ at CL, Foster AJA, Grove and James JJ agreed) in R v Thomson; R v Houlton (2000) 49 NSWLR 383. Such guidelines are not binding on sentencing judges in any formal sense, and do not constrain the exercise of their discretion: R v Jurisic (1998) 45 NSWLR 209 at 220-221; R v Henry (1999) 46 NSWLR 346 at 356-357 [25]-[30]); R v Wong (1999) 48 NSWLR 340 at 349 [32]; R v Thomson; R v Houlton (2000) 49 NSWLR 383 at 401, [72], 413 [124]. The guidelines laid down, at 419 [160], are:

          “(i) A sentencing judge should explicitly state that a plea of guilty has been taken into account. Failure to do so will generally be taken to indicate that the plea was not given weight.
          (ii) Sentencing judges are encouraged to quantify the effect of the plea on the sentence in so far as they believe it appropriate to do so. This effect can encompass any or all of the matters to which the plea may be relevant -contrition, witness vulnerability and utilitarian value - but particular encouragement is given to the quantification of the last-mentioned matter. Where other matters are regarded as appropriate to be quantified in a particular case, for example, assistance to authorities, a single combined quantification will often be appropriate.
          (iii) The utilitarian value of a plea to the criminal justice system should generally be assessed in the range of 10-25 per cent discount on sentence. The primary consideration determining where in the range a particular case should fall, is the timing of the plea. What is to be regarded as an early plea will vary according to the circumstances of the case and is a matter for determination by the sentencing judge.
          (iv) In some cases the plea, in combination with other relevant factors, will change the nature of the sentence imposed. In some cases a plea will not lead to any discount.”

86 The judgment had earlier explained that the “utilitarian value” of a plea as being related to the saving of time and resources of the court system, legal representatives of both prosecution and defence, legal aid administrators, witnesses and jurors which resulted from a trial on the question of guilt not being necessary.

87 In the present case, that utilitarian value has not been great. The hearing on liability, had it proceeded, would have concluded within one day, and the lateness of the plea meant that no work is likely to have been saved in preparation for the trial. Even so, by reason of the plea I shall reduce the sentence which I would otherwise have imposed by 10%.

Decision on sentence

88 The contraventions are serious ones. Being ten in number, and committed over a period of months, they show signs of system. Mareva orders are a most important part of the procedural armoury of the court. It needs to be well understood that breaches of them will be treated by the court seriously. I am satisfied that the second defendant was aware that he was breaching the order, that what he was doing was wrong, and that it was seriously wrong. I am not, however, satisfied that he was aware that imprisonment was a possible consequence of his breach of the order.

89 The effect of the contraventions has been that the plaintiff has been denied a fund for recovery of its judgment, which would otherwise have been available to it. Even if one adopts an approach to construction of the “per month” in the orders, so that a separate amount of $2500 is available each calendar month, the orders permitted the second defendant to withdraw, over the months of June to September 2003 inclusive the sum of $10,000. The amount actually withdrawn over those months was $88,737 70. I approach the matter on the basis most favourable to the second defendant, so that the withdrawals which were not subject of specific charges are ignored. The total amount withdrawn which is the subject of charges is $69,939 50. Thus, the effect of the withdrawals which are the subject of the charges is that the amount available to the plaintiff to meet its judgment has been reduced by $59,939.50. The withdrawals were made for the personal benefit of the second defendant.

90 I have already mentioned the mitigating factors which I take into account. I also bear in mind that the money which the second defendant withdrew was his own money, even though he was subject to a restraint about what he could do with it. The contempts are not the same as a theft of $59,939.50.

91 If the plaintiff had served the second defendant with a copy of the order endorsed as required by Part 46 rule 8, there would have been no real doubt that he knew that imprisonment was a possible consequence of breach. In that situation I would have imposed a sentence of imprisonment. However that course is not open to me.

92 When it is not possible to impose an actual sentence of imprisonment, neither is it possible to impose a penalty of periodic detention, or home detention (para [26] above). When the second defendant is bankrupt and has no means to pay, a fine is inappropriate. Apart from a community service order, none of the other available sentencing options is adequate to meet the seriousness of the contempt. Thus, a community service order is the appropriate type of order to impose.

93 Section 8(2) Crimes (Sentencing Procedure) Act 1999 imposes an upper limit on the number of hours of community service which can be ordered for an offence, of “500, or the number of hours prescribed by the regulations in respect of the class of offences to which the offence belongs, whichever is the lesser.” The relevant regulation is found in clause 22 of the Crimes (Sentencing Procedure) Regulation 2005, which says:

          “For the purposes of section 8(2) of the Act, the prescribed number of hours is:
          (a) 100, for offences for which the maximum term of imprisonment provided by law does not exceed 6 months, or
          (b) 200, for offences for which the maximum term of imprisonment provided by law exceeds 6 months but does not exceed 1 year, or
          (c) 500, for offences for which the maximum term of imprisonment provided by law exceeds 1 year.”

94 As there is no maximum term of imprisonment provided by law for contempt of court, that regulation is not directly applicable in the present case. In a very broad way, however, it provides an indication of public policy about the comparability of maximum sentences of imprisonment, and maximum sentences of community service order, for the one type of offence. That public policy ought be given effect to, so far as possible, in fixing a sentence.

95 The crimes which bear the closest analogy (though an imperfect one) to the nature of the contempt involved here are the crimes involving offences against property, without violence. For the various crimes which are punishable as larceny, section 117 Crimes Act 1900 imposes a maximum penalty of five years imprisonment when tried on indictment. Even bearing in mind that these contempts involved a taking of the second defendant’s own property, I cannot find that there is any clear indication in public policy that the possible maximum sentence for contempt consisting of a breach of a Mareva order ought to be less than 500 hours of community service.

96 When multiple counts of crime are tried at the one time, and found proved, a sentencing judge

          “… must fix an appropriate sentence for each offence, and then consider questions of cumulation or concurrence, as well, of course, as questions of totality: Mill v The Queen (1988) 166 CLR 59.”: Pearce v The Queen (1998) 194 CLR 610 at [45].

97 Under the principle of totality, the court looks to see whether the total sentence that would be arrived at by adding together all the individual sentences for the individual offences is just and appropriate. If it is not, the court has two alternative responses open to it -- either to make the individual sentences wholly or partly concurrent, or to lower the individual sentences below what would otherwise be appropriate to reflect the fact that a number of sentences are being imposed. The former of these courses is preferable: Mill v The Queen (1988) 166 CLR 59 at 63, approved in Johnson v The Queen (2004) 78 ALJR 616 at 623, [18]-[19]. A similar approach should be taken when imposing a punishment for multiple counts of contempt of court that have been heard at the one time.

98 If I were to take into account all the factors relevant to sentence, apart from the second defendant's plea of guilty, I would impose a sentence of 50 hours of community service of the first count. The other counts involved withdrawals of smaller sums of money than the first count, but the differences in amount withdrawn (and, in particular, the differences in the precise amount concerning which there was a breach of the orders arising from a withdrawal of more than $2500 per month being made) were not such as to require any differentiation in the penalty which is appropriate to impose. The most significant factor relevant to penalty, concerning each of them, was that there was a breach of the court order at all. I would impose a sentence of 50 hours of community service in relation to each one of the ten individual charges.

99 In the exercise of the totality principle, it is appropriate to order that some parts of those sentences be served concurrently, as follows:

Count
no
Hours
sentence
Hours to be served concurrently with earlier numbered counts
1
50
2
50
20
3
50
20
4
50
20
5
50
20
6
50
20
7
50
20
8
50
20
9
50
20
10
50
20

100 The overall effect of that conclusion is that the total number of hours to be served would be 320.

101 However, to each of those sentences the discount of 10% for a plea should be applied, with a corresponding discount to the part of the sentence required to be served concurrently, resulting in the following:

Count no
Hours
sentence
Hours to be served concurrently with earlier numbered counts
    1
45
2
45
18
3
45
18
4
45
18
5
45
18
6
45
18
7
45
18
8
45
18
9
45
18
10
45
18
      Thus the overall total sentence to be imposed is 288 hours of community service.

Costs

102 In imposing a costs order for contempt, the Court aims so far as it can to provide full indemnity to a party who obtained a court order which has been breached in a way which amounts to contempt. Thus, the usual order for costs is that the contemnor pay the costs on an indemnity basis. There is no reason to depart from the usual order in the present case.


      1. I sentence the second defendant to perform 288 hours of community service.

      2. I direct the second defendant to report to the NSW Probation and Parole Service at Hurstville within seven (7) days of the making of these orders.

      3. The second defendant is to pay the costs of the plaintiff of this Notice of Motion on an indemnity basis.
      **********
Most Recent Citation
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Cases Cited

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Statutory Material Cited

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Australian Securities and Investments Commission v Michalik [2004] NSWSC 1259
Australian Securities and Investments Commission v Michalik and others (No 2) [2004] NSWSC 1260
Miller v Eurovox Pty Ltd [2004] VSCA 211