Okien and Nhan (No. 2)

[2017] FamCA 946

FAMILY COURT OF AUSTRALIA

OKIEN & NHAN (NO. 2) [2017] FamCA 946

FAMILY LAW – PROPERTY – undefended – where respondent does not participate but has removed all assets offshore and left the jurisdiction.

FAMILY LAW – CONTEMPT – where respondent’s disobedience of orders is a flagrant challenge to the court.  Imprisonment only option.

Evidence Act 1995 (Cth)

Family Law Act 1975 (Cth)

Abduramanoski & Abduramanoska (2005) FLC 93-215 Australasian Meat Industry Employees Union & Mudginberri Station Proprietary Limited (1986) 161 CLR 98 Australian Securities and Investments Commission & Michalik [2004] NSWSC 1259 Black & Kellner (1992) FLC 92-287 Fauna Holdings & Mitchell (2000) FLC 93-053 Hay & Hay (1998) FLC 92-819 Ibbotson & Wincen (1994) FLC 92-496 In the Marriage of Weir (1993) FLC-92 338 Kendling and Anor & Kendling (Contempt) (2008) FLC 93-384 LGM & CAM(Contempt) (No 2) (2008) FLC 93-355

APPLICANT:

Ms Okien

RESPONDENT: Mr Nhan

FILE NUMBER: MLC 12009 of 2016

DATE DELIVERED: 10 October 2017

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Cronin J

HEARING DATE: 10 October 2017

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Nehmy

SOLICITOR FOR THE APPLICANT: Sayer Jones

SOLICITOR FOR THE RESPONDENT: No appearance

Orders

1. That the response of the husband filed 7 February 2017 is dismissed.

2. That the objection filed 9 October 2017 by F Law is dismissed.

3. That the oral application by F Law for costs is dismissed.

4. That the documents produced under subpoena as required by the order of Registrar Lethbridge are released for inspection.

5. That the husband pay the wife $343,262 by way of alteration of property interests.

6. That the husband pay the wife’s costs of $19,309.

7. That the husband having been found guilty of flagrant challenge to the court orders, is committed to prison for a period of 18 months from the execution of the warrant.

8. That a warrant for the apprehension of MR NHAN born … 1980 is forthwith to issue for the purposes of the husband serving the period in prison referred to in Order 7 hereof.

9. That all outstanding applications are otherwise dismissed.

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

IT IS NOTED that publication of this judgment by this Court under the pseudonym < Okien & Nhan (No. 2) has been approved by the Chief Justice pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 12009 of 2016

Ms Okien

Applicant

And

Mr Nhan

Respondent

REASONS FOR JUDGMENT

1. In 2007 Ms Okien and Mr Nhan commenced living together.  They married in 2009, and that marriage came to an end in late 2016.  The proceedings before the court today arise out of the ending of that relationship, and the jurisdiction that is being exercised is that under both the enforcement of orders powers but also Part VIII of the Family Law Act 1975 (Cth) (“the Act”).

2. It is important, to immediately observe that Mr Nhan, to whom I will refer in these reasons as “the husband”, has not participated at all today.  The “wife”, Ms Okien, has been represented by counsel.  Unfortunately I have to deal with history so that the orders I propose to make will be sensible. 

Service

1. The first issue relates to whether or not the husband is aware of the proceedings.  Up until 7 September 2017, the husband was represented by a firm of lawyers, F Law.  On 7 September 2017 they filed a Notice of Ceasing to Act and the husband filed a Notice of Address for Service the very next moment.  This was all done electronically.  He gave as his address, an address of an Australian property.  It transpires, however, that he had or now has, left Australia and is living somewhere in Asia.  The precise whereabouts do not matter. 

2. On 8 September 2017 arising out of an interlocutory application to which I shall turn in a moment, I made orders that any further documents that arose in the proceedings were to be served on the husband by email to an electronic address that he had provided (and can be seen in a number of documents to which I shall later refer) and by prepaid post to his last known address that he provided.  I have evidence from the solicitor for the wife, Ms Emily Dawson, that she has had the conduct of the file and, by letter of 4 October 2017 sent to the husband, she enclosed a number of documents, all of which are relevant to the proceedings. 

3. I am satisfied the husband received the documents.  That can be gleaned from two things.  First, the evidence of Ms Dawson is that the email she sent to the husband has not bounced back.  Secondly, on 5 October – so the next day – the husband sent a text message to the wife, and I incorporate here his exact words.  The message is in two parts.  The first part was at 2.15 am, and the second, after he had remembered his wife’s birthday.  The first message reads:

   I chose to ignore several people who warned me of the true reason you were with me.  What I love about this process is that it has finally exposed the real “wife” and the true reason why you pretended to love me all these years; for a bit of fame and money.  Sad it had to take 150-page affidavit to open my eyes.  I wish you all the best finding a guy who will give you $343,262 in exchange for being…

   and the rest is irrelevant. 

4. That message, accepting as I do that it came from the husband, indicates two things.  First, he was well aware of the property order that the wife was seeking – by his reference to the specific amount.  The second is his reference to the 150-page affidavit, which – ironically – the wife had filed in the court on ..... 4 October.  He sent a second message.  That came at 3.30 pm that day and it reads:

   Happy birthday to my slut, whore, gold-digging wife!  Hope you enjoy your present!  Love your ruthless husband! 

5. The text message is also important in respect of the second of the applications to which I have to turn in a moment, relating to the husband’s contemptuous behaviour in respect of court orders. 

6. I am satisfied that the husband had knowledge of the applications filed on 4 October and, more importantly, the evidence upon which the wife relied. 

7. The second matter in relation to service is that arising from the proceedings on 8 September 2017, the wife through her solicitors, issued a subpoena to the solicitors who had ceased to act on 7 September.  The solicitors filed an objection to the subpoena to produce their file.  That was listed before a registrar, who made orders which arose out a compromise between the parties.  It seems, that the documents produced were sent back to the solicitors by agreement on the basis that they would produce their file from 17 August 2017.

8. It is not entirely clear whether that was a waiver of privilege, but in any event, those documents remained with the court.  It is also important to note that on the return date of the objection before the registrar, the solicitors were represented by senior counsel.  The compromise was not to be lightly dismissed. 

9. The registrar made clear that the issue of the costs of the solicitors, not to mention the release of the solicitors’ file, were matters to be heard before me.  All parties knew that the proceedings were before the court today, because I had previously fixed that date.  No appearance was heard from the solicitors this day, and counsel for the wife has indicated that his counterpart said that, from their perspective, the solicitors had complied with their obligations to raise the issue of privilege and they would not be attending.  On the basis of that, I dismiss their oral application for their costs, and I dismiss their objection. 

10. I can presume that the solicitors, having received instructions to object to the subpoena would have been in touch with the husband and if he had not bothered to find out the outcome of that hearing before the registrar, he was waiving any further objection to the documents being released. 

11. In case I am wrong I intend to rely on s 121(2) of the Evidence Act 1995 (Cth), which relates to privilege not being applied in circumstances where it is necessary, to adduce evidence for the enforcement of court orders. That applies to the property application and the contempt application as both fall within that same category. I am satisfied in the circumstances that the wife is entitled to proceed, notwithstanding the absence of the husband.

The applications

1. The wife has two applications before the court. The first relates to an alteration of property interests under s 79 of the Act. The second if an application that the husband be dealt with for contempt of court pursuant to s 112AP of the Act. I propose to deal with the property application first.

Property

1. The wife seeks a number of orders by her amended application filed on 4 October 2017.  Only the first of those orders is relevant.  She seeks an order that the husband pay her $343,262 which was the sum that the husband knew she was pursuing.  The other orders, in my view, are not relevant, because they are effectively an enforcement of that order, if it is made. 

2. These proceedings began in 2016, and a case-assessment conference or directions hearing was listed before a registrar in March 2017. 

3. On 3 February 2017 the husband through his then solicitors filed a response.  It sought no specific orders other than orders saying that he agreed with paragraph 1 and paragraph 3 of the orders sought by the wife.  That requires the court to look back at what the wife’s original application was.  She sought imprecise property orders, indicating that she did not know what the true financial position was.  Whilst that approach might be subject to criticism, it does not matter here, because what it shows is that the husband too wanted an order for the alteration of property interests in whatever the court thought was just and equitable. 

4. In the absence of the husband today, and on the basis that he has made it clear through his text message that he does not intend to participate, the appropriate order is that I dismiss his response filed 3 February 2017.

5. On the same day the husband filed the response, he also filed a financial statement.  In that financial statement, he disclosed that he had $318,000 in the bank, a motor car which he valued at $20,000, and some various chattels.  Significantly, he said he had an interest in a company in which there were 600,000 issued shares at a value of 10 cents each, although he gave no indication where that figure came from.  He valued the interest that he had in the company at $60,000.  That evidence becomes important in these proceedings because it gives an indication of what he acknowledges exists.

6. The husband did not disclose a number of other assets in which he had interests.  Whilst every litigant who swears a financial statement is responsible for its contents, the Court might be more concerned about a litigant who files a financial statement prepared by his lawyers.  It is endorsed as having been drawn by the solicitor from the firm who represented the husband.  The husband deposed that he had read chapter 13 of the Rules; that he was aware of his obligation to make a full and frank disclosure of his financial circumstances; and, that he had disclosed whatever was required of him.  He said that where he had given an estimate, it was based on his knowledge and given in good faith.  Significantly, he said he had no income, property or financial resources other than as set out in the document.  It has now transpired that was not true.

7. On 21 March 2017, a registrar conducted a procedural hearing.  Both parties were present and both parties had legal representatives there for them.  Specific disclosure orders were made and directions that the parties attend a conciliation conference in June. 

The June hearing

1. On 30 May, the wife filed an application in a case returnable on 15 June.  In it, she sought a number of injunctions including an anti-suit injunction to preclude the husband from pursuing proceedings in Country D but also discovery.  That application was amended on the following day to join Ms C.  Various injunctions were then sought about the husband transferring funds to Ms C.  The Court was sufficiently concerned about what was happening at that time to abridge time and the matter came before me on 7 June.

2. On 7 June, although the husband was not physically present, he was represented by counsel and the court record shows that that counsel was briefed by F Law.  The wife gave an undertaking as to damages because she pursued the joinder of Ms C.  All that needs to be said about the joinder issue is that the husband claimed that some years ago when he was involved in sport, Ms C and he had some contractual arrangement under which he incurred an obligation to her in the vicinity of $500,000 (which calculation included interest to date).  Curiously, nothing seems to have stirred Ms C to pursue her money for many years and she would, presumably, have it, if the husband was telling the truth, the interest just accrued.

3. The husband transferred virtually all of the money in the savings account at that time and then claimed that, did not satisfy Ms C’s debt, it was something to keep her satisfied from issuing proceedings against him.  The obvious problem for the husband was that his action was unilateral.  A further problem was that it was the bulk of the party’s then savings. 

4. On 7 June, I made a number of orders including a third-party injunction restraining Ms C from dealing with the funds transferred by her, pending further order of the Court.  I ordered she pay the money back into a trust account of the husband’s solicitors within seven days.  Some four or five months later, nothing has been heard from Ms C either by way of participation in the proceedings or, indeed, by the compliance with that order.

5. It is further significant that on 7 June, the Court noted the consent of the husband, although he denied the necessity for that order, that he and his servants and agents be restrained by injunction from taking any further steps to transfer money to Ms C or taking steps to transfer funds to any other person without the written consent of the wife, save as might be required to meet reasonable day-to-day business, living and legal expenses.  The last few words were inserted into the order after discussion with the husband’s counsel on the basis that the solicitors were concerned that they would not be paid if the husband had that obligation.  It was clear that the husband was restrained by injunction from transferring funds to any other person without the wife’s consent as was apparent from what he had unilaterally done to that point. 

6. Then, and to date, the husband was also restrained and is restrained by injunction from filing proceedings in Country D, and that included an application for divorce.

7. In June, I then made orders in relation to discovery. 

The August orders

1. On 15 August 2017, the proceedings had to come back again.  This time, the wife brought an application seeking an injunction specifically in relation to two areas that are now relevant.  The first relates to an investment in the husband’s name in a company called B Proprietary Limited.  It seems that the parties and/or the husband alone had an investment with this company in a cash sense and the money was about to be paid to the husband.  The wife’s father had $60,000 owing to him in that investment by the husband.  There was correspondence in evidence to show that the father corresponded with the husband asking to get his money back, and although the husband’s response was somewhat obtuse, one might conclude that he was acknowledging that the debt existed.

2. The second application related to the sale of a motor car.  The wife’s evidence at that time was that she had come across an attempt by the husband to sell it and she wanted to stop the sale.  The husband had advertised it at a price much lower than the wife said it was worth.  Everybody might have an inflated view of what their property is worth, in this case, the wife sought an expert, albeit that the expert conceded he had not been able to see it and he opined it was worth $70,000.  That was obviously much higher than the amount for which the husband had the car on the market for sale.

3. On 17 August, two days later, I made a number of orders.  Again, the husband, although not present, was represented by his solicitor from F Law.  To give the husband an opportunity to put whatever further information he wanted to before the Court, I granted an adjournment to 8 September, but pending further order, the husband was restrained by injunction upon receipt of the funds from B Proprietary Limited, from disposing of them other than to pay the whole of the amount of the money into the trust account of his solicitors who were then to hold them as trustees for both husband and wife.  I further restrained the husband by injunction from disposing of the motor vehicle without the written consent of the wife.  The reasons for those orders were published after the ex tempore judgment.

The events after the orders

1. The sequence of events immediately thereafter becomes significant, not only in respect of the question of the property alteration orders but also what is still to be dealt in the contempt application.  The day after the orders were made, the husband was notified by his solicitors of the existence of the orders.  That is evidence from the subpoenaed file.  After the order, the husband not only received the money from B Proprietary Limited but he also sold the motor vehicle.

2. If the husband had not formally entered into a contract in relation to the sale of the motor vehicle when the orders were made on 17 August, he certainly received what I accept was its sale proceed within days thereafter.  Having subpoena the husband’s bank records, it shows that three payments totalling $50,000 were received on 25 and 28 August.  The conclusion that I am asked to draw is that that money represents the sale of the motor vehicle.  If it is not, it is a remarkable coincidence because the valuer of the motor car refers to it as a “F” model, and that is the word used in each of the three deposits in the husband’s bank account.  Counsel for the wife urged me to infer that it is the sale proceeds of the car, and having regard to timing, relative to the time that the wife made the application and the orders were pronounced, I am satisfied that it is the proceeds of the sale of the motorcar.  Thus by the time that the matter came back before the court on 8 September, the husband had accessed those two assets. 

3. It is significant, however, that on the hearing of 17 August 2017, the court was told by the solicitor for the husband that he had neither drawn down and received the B Proprietary Limited money nor sold the motor vehicle car.  I am hesitant to place too much weight on that, because one would hope that the solicitor was acting on instructions.  However, counsel for the wife observed that there is no clear indication in the solicitor’s family law file to indicate that he did have those instructions.  On the basis that I should presume that a lawyer would not deliberately mislead the court, I accept he had those instructions, because he made it very clear, that that was the case.  If that is so – and I have no reason to doubt it – then the sale of the car, the receipt of the B Pty Ltd moneys, and the receipt of the car moneys, within days after the orders, adds to the conduct of the husband about which the court will be critical in a moment. 

4. Having adjourned the matter to 8 September 2017, it is then significant, that on 7 September, the solicitors for the husband filed a notice of ceasing to act and sought specific permission from the court not to have to attend.  That permission was granted.  All of this is also relevant to the question of both of the applications before the court. 

The wife’s evidence; property

1. The wife relied on two affidavits.  She observed that in respect of property, some is known to have existed, and that can be seen from the money in the bank accounts, but there are also assets not included in the husband’s financial statement.  Those include a motor scooter and a European motorcar.  Evidence of these can be seen in the husband’s bank records produced under subpoena.  These were all sold around the same period of time to which I have referred.  For reasons that are best known to the husband he identified on the relevant deposits, the purpose or name of the money.  For example – in respect of the deposit that is said to be the European motorcar, – it is tagged with the word “European motorcar”, and the same applies to the motor scooter. 

2. There is no evidence before the court in relation to the values of the husband’s sports equipment, other than the fact that in his financial statement he declared it was worth $20,000.  No indication was given by the husband as to where that figure came from. The husband engaged in his sport at a very high amateur level.  Thus to put a figure of $20,000 for equipment in his financial statement might give one cause to wonder whether a more professional and expert opinion would be sought.  The wife has no idea where that equipment is now, but it means that the court is bereft of the opportunity to have the valuation done. 

3. In addition to that paucity of evidence, there is the question of the value of the husband’s various businesses.  I have already mentioned the 600,000 shares – but the wife’s evidence is that is not an accurate description of what he had.  Be that as it may as well, there are a number of other businesses, including a corporate entity and a trust, which the wife knows about and which she deposes to in her affidavit.  None of those were mentioned in the husband’s financial statement.  One in particular is a business which seems to have been lucrative.  That conclusion can be drawn from the husband’s assertion that it is worth 60,000, but the text message shows a picture of the husband eating, which has something to do with one of the businesses called Company G. 

4. All of this leads to the only conclusion open, that I have no clear understanding of what assets or more particularly their values, there are to be divided for the purposes of s 79 of the Act. That is disturbing here because orders were made right by the registrar in early 2017 for proper discovery and valuation. The wife went to an extraordinary amount of trouble to endeavour to rectify some of that problem by reconstructing a balance sheet of the assets. At paragraph [40] of her affidavit, she sets out what might be described as the known assets. Even there, the estimated values of those items can only be drawn from what the husband provided.

5. There is very little here to divide.  The wife at paragraph [41] of her affidavit set out a number of assets, including those that I have just mentioned, and included the money transferred to Ms C, the motor scooter, the European motorcar, the motor vehicle and the B funds, all of which would suggest that, if the husband had not disposed of them, there would be over half a million dollars in assets.  That is even allowing for the inexpert view of the husband as to the values of his sports equipment and the company shares.  The wife urges me to find that I can divide something in the vicinity of half a million dollars.  I accept that.

Justice and equity

1. It is just and equitable in this case, to make an order altering the interests of the parties in property because I find both parties worked on the assumption that, notwithstanding the assets were acquired in the husband’s name, they were theirs to be used jointly.  The evidence indicates that in this long relationship, they were working towards a joint outcome. 

2. In terms of the evidence that is then required to satisfy s 79(4), of the Act, the wife sets out the contributions she made. She was not only responsible largely for the nonfinancial aspects of how the parties conducted their relationship. She was also a significant participant in the business activities of the husband. All of those matters indicate that the parties jointly made an endeavour towards their financial futures.

3. None of that evidence is challenged. Apart from the fact that the husband has not filed any material to dispute what the wife says, his text message says that the wife can do the best she can to recover the money. In my view, on a contribution basis I would find the parties contributed equally. Section 79(4)(e) requires the court when assessing what orders to make to consider the matters in s 75(2) of the Act. The wife sets out the various details of her financial position and her health. There is little that I need to be concerned about. The husband too seems to have developed a new relationship. He seems able to travel internationally without problems, and it would also appear, that he is running a business as well.

4. Section 75(2)(o), requires the court to take into account such other matters as it considers necessary for the purposes of determining what is a just and equitable outcome. In my view, that entitles the court to say that it can do the best it can with whatever evidence it has when it has to divide things in circumstances where the husband has removed all assets to put them beyond the court’s control. Section 75(2) also enables me to presume that the husband is in a stronger position than the wife. He has access to assets that he has not disclosed, and he is running a business which on his account is doing well. On that basis I find an adjustment should be made in the wife’s favour.

5. On the basis of the reconstructed balance sheet, however, the court has to be satisfied that there is property to be divided.  The court has over a number of years made clear its position about people who do not provide proper disclosure.  This is not just a case of nondisclosure.  This is a case where specific assets have been taken by a party in flagrant disregard for court orders.  In both the decisions of Black & Kellner (1992) FLC 92-287, and In the Marriage of Weir (1993) FLC 92-338, the court said that where there was sufficient evidence to support a finding that a party had failed to make full disclosure of assets, the court has still jurisdiction to make an order in relation to unidentified or undisclosed property. In other words, the court can take a robust approach on the basis that, if a party declines or refuses to provide the information, the court can do the best it can and assume that what is put before the court is not disputed.

6. On that basis on the reconstructed balance sheet of the wife, there are assets here in excess of half a million dollars, and therefore an amount she seeks of $343,262 is well within what might be a just and equitable outcome.  On that basis, I am satisfied that an order should be made that the husband pay that sum to the wife.  How that is paid is a matter still in the wife’s hands. 

The contempt application

1. The next application relates to the husband being dealt with for contempt.  This application was filed on 4 October 2017, and the pleadings indicate that there are three contraventions of orders alleged.  The first is that between 17 August 2017 and 25 August 2017, the husband sold the motor vehicle in deliberate breach of the injunction made on 17 August.  The second has some overlap.  This relates to the B Proprietary Limited money.  The allegation  is that the husband disposed of $264,000 from his bank account including $165,000 he had received from the B Proprietary Limited payment on 28 August 2017 and that he did so in deliberate breach of the injunction made on 17 August.  There is an overlap here because having received those funds, he did not pay them into the solicitor’s trust account as he was required to do under the order of 17 August.

2. The wife, has set out how she traced all of those funds, and on any view, in the absence of the husband denying what he has done, I conclude that he has deliberately and flagrantly breached the orders that I made.

3. The question for the court is how flagrant that breach is.  There are a number of matters that are quite disturbing here.  The first is that the husband has sent the text message to the wife, not only thumbing his nose at her and making pejorative remarks, but thumbing his nose at the court.  It is “come and get me if you dare”.  The second is that he instructed his solicitors to deliberately mislead the court.  It is clear that until 7 September 2017, the court and the wife were of the view that the B funds had not been in his hands and the motor vehicle had not been sold.  On 7 September 2017, a letter tendered in evidence shows that instructions had been given to the exact opposite effect. 

4. The solicitors for the wife had requested details as to what exactly had happened, and the solicitors quite properly indicated that after they obtained instructions, it was conceded that the amounts had been taken by the husband.  That could only be seen as an appalling situation from the husband’s perspective because on an assumption that on 17 August 2017 he had not taken the money and the car had not been sold, he went ahead and deliberately took the proceeds knowing that the order had been made. 

5. The third concern is the fact that the husband has sent the money offshore.  All indications now are that the money has gone somewhere, possibly to the United States.  It is unclear just who holds those funds, but in my view the court should treat that as a flagrant breach of its orders by the husband. 

6. Section 112AP of the Act applies to contempts of court that constitute a contravention of an order under the Act and which involve a flagrant challenge to the authority of the court. In my view, here there is no other explanation other than the husband knew of the orders and that this was a flagrant challenge to the authority of the court.

7. Section 112AP(4) provides that in the case of a natural person in contempt, the court may punish that contempt by committal to prison or fine or both. The court can make an order for punishment on terms.

8. There is no other guiding provision in the legislation as to how the court should interpret not only s 112AP, but also the particular provisions of sentencing.

9. In Abduramanoski & Abduramanoska (2005) FLC 93-215, s 112AP of the Act was considered. The court there found that both state and federal sentencing laws have no application. I accept that applies here. Section 112AP, however, affords a judge a very wide discretion because there is no minimum or maximum punishment provision.

10. In my view, s 112AP must be considered in the light of the particular circumstances of the case. (see Australian Securities and Investments Commission & Michalik [2004] NSWSC 1259). Thus, a review of punishment in other cases is of limited assistance because each case requires the court to make an assessment of the peculiar facts.

11. Limited though they may be, there are cases which can provide assistance;  for example, in Abduramanoski, the Full Court looked at the sentence, which in that case was deemed not to be inappropriate, and in a case of Falkner, a similar provision was considered and the court indicated that the trial judge’s discretion had not miscarried. 

12. Normally the purposes of a contempt application, and in particular any orders that can be made, are to coerce a person who is in breach of an order to comply with it.  Another and different purpose may be for punishment.  The latter would only arise in the event that the court is satisfied that the breach has occurred.  Here, insofar as the court uses the contempt power to coerce a person to rectify a breach, there is little I can conclude other than that the husband is thumbing his nose at the court. 

13. In respect of the second limb of the sentencing process, the court is entitled to take into account that the purpose of punishment is not only to inflict society’s retribution, but also general deterrence so that the community understands what might happen in the event of a failure by the other like-minded people to comply with a court order. 

14. In Australasian Meat Industry Employees Union & Mudginberri Station Proprietary Limited (1986) 161 CLR 98, the High Court said that retribution is called for in these sorts of cases because it is essential for the proper working of the court system that court orders be obeyed. (See also Kendling and Anor & Kendling (Contempt) (2008) FLC 93-384).

15. As Finn J in LGM & CAM(Contempt) (No 2) (2008) FLC 93-355 said, counsel for the applicant is in a different position to that of a prosecutor because there are emotional attachments to the particular outcome. I am conscious that the evidence must be objectively tested and, in the case of unchallenged evidence, plausible. I accept it is here.

16. I have already mentioned Abduramanoski (supra).  In that particular case, the husband had appealed against the severity of the sentence.  The trial judge sentenced the husband to imprisonment for 18 months.  Because of what had occurred, the trial judge noted that consideration would be given to a reduction of that 18 month sentence if the husband remedied the problem by getting the money he had taken out of the country, returned.  The Full Court, on an argument as to whether that was an excessive amount of punishment, did not disturb the decision and noted that the husband had engaged in a positive course of conduct designed to ensure that orders made by the Court would have no effect.  That is clearly what has happened here.  In Hay & Hay (1998) FLC 92-819, an injunction was made by the Court restraining the husband until further order from signing, transferring, encumbering by mortgage or charge or otherwise, or in any way, dealing with various property. The husband then went to his bank and obtained an advance of $400,000 using a property which was property of the parties as security. On a contempt application, the trial judge found the husband guilty of contempt and sentenced him to six months imprisonment.

17. That sentence was subject to an appeal.  The Full Court set aside the penalty of imprisonment and found it inappropriate to impose a term of imprisonment where there was no significant advantage to the wife brought about by the husband’s contempt.  The $400,000 taken could have been adjusted against other assets.  Unlike Hay, the case before me is the opposite.  What the husband has done here is removed assets from the jurisdiction of the Court and then thumbed his nose and said to the wife, “Come and get me.”  On that basis, I find that a period of imprisonment is the only option open. 

18. The words “flagrant challenge” which appear in s 112AP have been considered on a number of occasions. (See Ibbotson & Wincen (1994) FLC 92-496 and Fauna Holdings & Mitchell (2000) FLC 93-053). Ibbotson was a parenting matter, but the Court focused on the “flagrant challenge” and said that the breach in question must be wilful.  That is, was the impugned action deliberate as distinct from inadvertent?  I find that the husband has done this deliberately.  His text message to the wife makes that abundantly clear.

19. I am satisfied in the circumstances that the husband has wilfully and flagrantly challenged the authority of the Court and defied its orders to the extent that the wife faces the prospect of not getting any money. I find that is the worst kind of contempt that this Court could see. In my view, the only appropriate sentence here is one of imprisonment and I fix the period of 18 months imprisonment accordingly. Section 112AP(4) refers to the court punishing “the” contempt. Section 112AP(6) provides for the court to make “an” order for punishment. It is therefore unnecessary to sentence the husband on various breaches or “counts”. He is sentenced for his contempt of the court and as such, one period of imprisonment is appropriate. The sentencing laws do not apply and as such, benefits such as reductions that might apply to other prisoners under sentence do not apply. \

20. The final costs issue between the parties relates to costs.  In the orders I made on 8 September 2017, I reserved the wife’s costs fixed in the sum of $12,309 and on an indemnity basis was found appropriate.

21. The only issue was whether or not those orders should be made.  My then hesitation arose only because of the fact that there was a hearing likely to be relatively soon thereafter but also there was a prospect that the husband’s position might have been explained.  The absence of any explanation and the evidence now makes it clear, that the order for indemnity costs fixed on that date should be made, and accordingly the husband is ordered to pay $12,309. 

22. The final costs issue relates to the costs of today.  Counsel’s fees have been fixed at $7000, which includes appearance and preparation.  Having found the contempt proved and now knowing that what the husband had done was in defiance of the court’s orders, one might conclude that his conduct as a litigant was as bad as his conduct as a party to this marriage.  It is one thing, to deceive a spouse, but it is another, to deceive the court. 

23. Section 117 of the Act provides that in proceedings under the Act each party shall bear their own costs, unless there are circumstances to justify departure from that principle. Having found the contempt proved and knowing now that the assets have been removed offshore, I find there is a justifiable circumstance.

24. The authorities in relation to indemnity costs can only be examined after one considers the provisions of s 117(2A) of the Act. In this case there is no indication that the financial circumstances of the parties are such that they could not afford to pay costs. The husband has failed to meet his obligations towards disclosure and candour. There are no questions of legal aid consideration here. In my view, this is a case where an order for costs should be made. The only question is whether it should be on an indemnity basis or not. Having found in September that the indemnity costs order should be made, I see no reason why now having known the full story this is not one of those cases that fits within the relevant authorities.. In my view, the amount of $7000 is appropriate in the circumstances.

I certify that the preceding seventy (70) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cronin delivered on 10 November 2017.

Associate: 

Date:  22 November 2017