P Law Firm and Sebbe

[2010] FamCA 1033

FAMILY COURT OF AUSTRALIA

P LAW FIRM & SEBBE [2010] FamCA 1033

FAMILY LAW – CONTEMPT

APPLICANT: P Law Firm

RESPONDENT: Mr Sebbe

FILE NUMBER: SYC 3187 of 2007

DATE DELIVERED: 19 November 2010

PLACE DELIVERED: Sydney

PLACE HEARD: Sydney

JUDGMENT OF: The Hon. Justice Cohen

HEARING DATE: 15 November 2010

REPRESENTATION

SOLICITOR FOR THE APPLICANT: Mr P

FOR THE RESPONDENT: No appearance

Orders

1. That the Application – Contempt filed on 16 February 2007 by the Applicant is hereby dismissed.

IT IS NOTED that publication of this judgment under the pseudonym P Law Firm & Sebbe is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth).

FAMILY COURT OF AUSTRALIA AT SYDNEY

FILE NUMBER: SYC 3817 of 2007

P LAW FIRM

Applicant

And

MR SEBBE

Respondent

REASONS FOR JUDGMENT

1. These proceedings emanate from and are part of the efforts of a firm of solicitors, P Law Firm, to recover the fees it says are due to it for acting for the respondent. The application before me was filed on 16 February 2007. Mr P, a partner of P Law Firm, appeared before me on the application. The respondent failed to appear, but I am quite satisfied that he has full knowledge of today’s hearing and has been served with all the relevant documents in ample time to be able to either appear in person or obtain legal representation and appear by his legal representative.

2. Mr P did not ask me to make the orders he seeks on all the bases contained in his application of 16 February 2007. Before me, he limited his case for contempt, being based on s 112AP(1)(b) of the Family Law Act, to reliance on the respondent’s refusal to appear before the Court to be examined as to his property. He asked that I make a prima facie finding that the respondent has committed contempt by his refusal and that I adjourn the matter to give him the opportunity to defend himself. He asked, if I am of the view that the matter could be dealt with wholly on the day the matter came before me in the absence of the respondent and without the need to afford him the opportunity to appear to raise any defence he sees fit in the face of prima facie findings, that I find the respondent to have committed the contempt alleged and to sentence him to imprisonment for 1 year and 1 day but to suspend the punishment on the condition that the husband pays the solicitors’ fees.

3. The contempt which P Law Firm rely on is failure to attend Court pursuant to an order of the Court in circumstances where the failure constitutes a flagrant challenge to the Court’s authority found to be so by the criminal standard of proof; that is, beyond reasonable doubt.

4. In my opinion, it is a matter for the Court, in the exercise of its discretion, whether or not the trial should proceed in the respondent’s absence. Rule 21.07 of the Family Law Rules allows the Court to take any of 3 courses in the event of failure by a respondent to contempt proceedings to attend. The Court can adjourn the hearing to give him the opportunity to attend, issue a warrant for his arrest so he is forced to attend, or decide the case in his absence. I should decide what to do on a review of the relevant facts to ensure the most just course is taken.

5. The actual way in which the allegation of contempt is pleaded is:

   “1.That the Respondent [Mr Sebbe] born […] 1947 be dealt with for contempt pursuant to s. 112AP(1)(b) of the Family Law Act 1975 having regard to:

   …

   1.3 by his continuing refusal to appear in these proceedings on following Court dates since the proceedings were commenced, namely 21 December 2005, 8 March 2006, 19 April 2006, 28 June 2006, 13 September 2006 and 12 October 2006;…”      

6. At the hearing I was told that the dates of the non-appearance contrary to orders relied on are 8 March 2006, 19 April 2006, 28 June 2006, 13 September 2006, and 16 February 2007. Because the respondent has not been given notice in the application filed 16 February 2007 that the allegation includes his non-appearance on 16 February 2007, I should not include that allegation of non-appearance in my considerations. Whether or not any non-appearance on 21 December 2005 should be included as part of the respondent’s alleged contempt ought to be determined by the facts. That Mr P did not specifically rely on it at the hearing might have been inadvertent. That he failed to mention it, if it is relevant and is a day on which he was ordered to appear, could not bring unfairness into the conduct of the proceedings against the respondent if I do rely on it, because the respondent was not present in court when it should have been mentioned as being relied upon and the respondent has not attempted to answer any aspect of the applicant’s case, so he could not have been misled by any unintended failure to rely on it.

7. In late 2003, P Law Firm filed and served a bill of costs on the respondent. It is relevant that the form, Form 56, provided for doing so and that this form was in keeping with the requirements of O.38 r. 42. Because of the structure of O.38, in particular O.38 r. 41, there is little doubt that the bill was for costs as between solicitor and client rather than as between parties. Rule 41 provides that a client of a solicitor who is liable to pay costs under a costs agreement between that solicitor and the client may request a bill of costs from the solicitor. Rule 42 requires such a bill of costs to accord with Form 56. On 28 November 2003, the respondent filed and served a Notice Disputing Bill of Costs (Form 57). Despite this being out of time, the dispute went to taxation. An assessment of costs was issued by a deputy registrar on 3 May 2004. The assessment, after making provision for payments which had been made, left a balance of $25,442.69. However, the deputy registrar made this order in addition to the assessment:

   “It is ordered:

   1. The Applicant [Mr Sebbe] must pay the sum of $25,442.69 to the Respondent Lawyers, [P Law Firm], on or before 7 June 2004.”

8. On 13 December 2005, P Law Firm filed an application in aid of enforcement of the order of 3 May 2004. On 21 December 2005, a judicial registrar made an order for substituted service of the application on the respondent and on 23 December 2005, service in accordance with the Judicial Registrar’s order was effected. No order for the respondent’s attendance at court was made on 21 December 2005, so nothing that occurred on that day can be regarded as being part of any contumaciousness by the respondent. On that day the proceedings were adjourned for hearing to 8 March 2006.

9. On 8 March 2006 no order was made for the respondent to appear before the Court despite his non-appearance. There is evidence before me that the respondent knew that something was listed on 8 March 2006, because there is an Acknowledgement of Service which appears to have been signed by his son on whom substituted service was effected on 23 December 2005 with the next court date shown on it. Although there is no specific indication that the respondent received the documents personally, I am satisfied that, because he was properly served and the Acknowledgement of Service for the hearing on 8 March was obtained, the respondent had actual notice of the proceedings on that date. As no order which could affect the proceedings which I am now dealing with was made on 8 March, the only significance of the respondent’s knowledge of the hearing on that day is that the matter was adjourned to 19 April 2006. On 19 April the respondent did not appear. No order was made other than to adjourn the matter to 28 June 2006. There is no evidence to allow me to find that the respondent was notified of the adjourned date. On 28 June 2006 there was, again, no appearance by the respondent. On that day, a judicial registrar transferred the matter to the Federal Magistrates Court, Sydney, and listed the matter to have a first instance hearing, which I understand to be no more than a mention for directions or to fix a date for hearing, in the Magistrate’s duty list at 9.30am on 13 September 2006. Again, there is no evidence or indication before me that the respondent was given notice of the listing.

10. On 13 September 2006, when the matter came before the Federal Magistrate, an Amended Application was filed in Court by leave. The Application in a Case which was filed on 13 December 2005 in the Family Court of Australia in aid of enforcement sought orders pursuant to various subsections of s 109A of the Family Law Act. This section provides for enforcement of orders of the Court. The relevant order P Law Firm sought in aid of enforcement was pursuant to s 109A(2)(a)(i), erroneously specified as “section 109A(2)(i)”. The terms of that subparagraph permit an order to be made for the respondent to attend court and answer questions. The actual application which was filed was for the respondent to be “orally examined on all matters relating to his refusal and failure to comply with the Costs Order made … on 3 May 2004…”. No order requiring him to attend court to do so was sought.

11. The Amended Application filed in the Federal Magistrates Court on 13 September, relevantly, added an application for a warrant to apprehend and arrest the respondent pursuant to the Family Law Rules, an application designed to permit the respondent to be located in the United States of America with the intent that the warrant could be, in some way, effective in that country to have the respondent returned to Australia by way of extradition, then brought before the Federal Magistrates Court to be dealt with. The amendments seek orders under the Family Law Rules, not pursuant to the Federal Magistrates Court Rules. This is because there are no equivalent rules applicable to the orders referred to, but the Federal Magistrates Court Rules, by rule 1.05(2), provides that where this is the situation the Federal Magistrates Court can apply the Family Law Rules 2004. The Family Law Rules said to be relied on for the orders in the Amended Application of 13 September 2006 in addition to the matters relied on in the original application of 13 September 2005 are rules 21.17 and 21.19.

12. Rule 21.17 does permit an arrest warrant to issue for arrest if  “the respondent is required to attend court on being served with… an application for an enforcement hearing under rule 20.11… if the respondent does not attend at court on the date fixed for attendance” (see r. 21.16(1)(a)(ii). However, the application P Law Firm originally served, that of 13 December 2005, did not require attendance at court. Additionally, no date was specifically fixed for any attendance by the respondent, the matter simply being adjourned, and there is no evidence that all the adjourned dates were conveyed to the respondent after 8 March.

13. Nevertheless, for a warrant to issue no notice of the application need be given (see rule 21.16(1)). This does not mean, if there is no demand to attend court in the application, that a warrant should be issued. The amended application of the 13 September did not contain any demand for the respondent to attend court. Because it had been filed in court and not served, even if it had contained such a demand, a warrant should not have been issued because there could have been no failure to comply with any demand to attend court. Despite this, the Magistrate found that she was satisfied the application for enforcement filed on 13 September 2006 had been brought to the attention of the respondent and made orders for the issue of the warrant as well as in accordance with the application which relied on rule 2.19 relating to its overseas enforcement. Rule 2.19 relates to procedure to ensure a person arrested under a warrant is brought before the court which issued the warrant. The matter was adjourned for mention to 16 February 2007.

14. Somewhat bizarrely in view of the purpose for which a warrant might be issued, there was an order that a copy of the orders made on 13 September as well as the amended application filed in Court on 13 September be served on the respondent by way of the originally permitted mode of substituted service. How it could be necessary or appropriate to serve the amended application on the respondent when the Magistrate had already found the respondent had notice of it is beyond my understanding, but it does seem to suggest he did not have notice of it. There is evidence before the Court which I accept that on 26 September the orders of 13 September with the Amended Application were served on the respondent by way of substituted service which had been permitted by the 13 September orders.

15. On 12 October 2006 the Federal Magistrate discharged the order which she had made on 13 September for the location of the respondent in the United States and his return to Australia. As might be expected, the respondent did not appear when the application for discharge was heard. There is no evidence to allow the Court to find he had had actual or constructive notice of the application which was made on that day or the date of the hearing. The order which was made in its place is irrelevant as are amendments to it made on 18 October. The order for the warrant to issue remained in force. This is the first order which had been made to bring the respondent before the Court, but it did not require him to attend court of his own volition.

16. Although I am not acting on appeal from the Federal Magistrate’s issue of the arrest warrant, that issue is relevant to and at the heart of the respondent’s failure to attend court as he should have. Its need to be issued is said to be part of the matrix of circumstances which show the respondent to have committed contumacious contempt of court by failing to attend court to be examined about his finances in aid of enforcement of the order made on 3 May 2004 for the payment by the respondent of the solicitors’ costs. It is therefore relevant to consider whether the arrest warrant should have been made.

17. I cannot find any basis for making it because no order had been specifically sought and brought to the respondent’s attention by direct service or Court permitted substituted service which required him to attend court to be examined. Had he been arrested he would have been entitled to apply to have the warrant set aside. It is highly likely that such an application would have been successful. The respondent was, of course, entitled to have it set aside if he learnt of the issue of warrant before he was arrested.

18. I am satisfied he did learn of its issue because he was served on 26 September with a copy of the orders for it to issue which were made on 13 September. On 26 October he was sent a letter which he is highly likely to have actually received by email from P Law Firm which referred to the 13 September orders and attached the amended orders made on 12 October. It is highly likely that the respondent knew that the next mention of the matter would be on 16 February 2007. As it was for mention only on that date, he was entitled to assume he had no need to attend to be examined on that day even if he had previously been required to attend court to be examined, which he had not; not even by the warrant.

19. It is to be noted that the respondents’ wife or ex wife, Ms Sebbe, a solicitor, had been quite co-operative toward P Law Firm and, on 30 October 2006, confirmed that the only contact means she and the parties’ son, on whom substituted service had been ordered, had was the email address for the respondent which P Law Firm had used to send the letter on 26 October as their only mode of contact with the respondent. The solicitors had an email address for the respondent’s employment in New York as well as the one for his home which they had used on 26 October. On 15 November the firm sent to the both email addresses copies of the sealed orders of the Court made on 13 September 2006 and on 12 October 2006. On the same day, they sent the same orders to the respondent’s employer by fax and air mail.

20. On 16 February 2007 the matter was mentioned in the Federal Magistrates Court. On that day, the respondent did not appear and the Magistrate granted leave to P Law Firm to file and serve a contempt application and accompanying affidavit by substituted service on Ms Sebbe personally and directed that these documents also be sent to her by email to both her work and home. The Application-Contempt that I am dealing with and affidavit of Mr OP, Solicitor, were filed in the Federal Magistrates Court that day. Between 16 & 22 February 2007 the documents were served as required by the Magistrates Court. They were also sent to the respondent’s home email address, to his employment email address and to his email address at his employer’s premises, as well as his employment address by registered pre-paid post.

21. The Application-Contempt had a return date of 16 March 2007 at 9.30am. On 16 March the respondent did not appear and the matter was adjourned to 8 May 2007. There is no indication that the respondent was informed of the adjourned date. On 8 May 2007 the respondent did not appear. The Federal Magistrate transferred the matter to the Family Court of Australia. On transfer to the Family Court, the matter was listed before me for an undefended hearing on 14 September 2007. On that day there was no appearance by the respondent and I asked P Law Firm for written submissions on the issues of the deputy registrar’s power to make an order that the respondent pay his solicitor’s costs. Those submissions were received in mid October 2007. Although conscientiously prepared and argued, the submissions do not address what I regarded as the potential difficulty. P Law Firm’s submissions argue that the rules permit orders for costs to be paid by a client to his solicitor. My relevant concern was, and still is, whether the order which was made on 3 May 2004 by a deputy registrar was within her power to make orders.

22. Section 37A of the Act permits the Judges to make Rules of Court which delegate certain powers to the Registrars. In the Act, “Registrar” includes “Deputy Registrar” (s 41(1)). Section 37A clearly limits the powers which may be delegated. The only power permitted to be delegated to the Registrars or Deputy Registrars by s 37A, as it existed in May 2004, relating to orders for payment of costs is limited to the power under s 117 of the Act to make an order as to costs (see s. 37A(1)(j).

23. Section 117 of the Act is, without doubt, limited to orders for payment of costs as between litigants. Although it may be said that in the dispute between P Law Firm and the respondent they were the opposing litigants, s 117 relates to the costs of the litigation not the subject of litigation. The taxation was over the costs between the solicitor and client, the order of the Deputy Registrar of 3 May was for the respondent to pay the solicitor’s bill for acting for him as taxed; that is, the subject of the litigation not the legal costs of the dispute over the bill. I can find nothing in the Act which would allow delegated power to be given to a deputy registrar to make an order, which is really a debt collection order, of the type made against the respondent.

24. At the hearing before me it was submitted that the Court has inherent power to supervise the conduct of its officers, ie solicitors, and pursuant to that, it had power through a deputy registrar to make the order which was made on 3 May 2004. The order for payment by the respondent would amount to supervision and therefore control of his conduct, not P Law Firm’s. It was beyond the power of the Deputy Registrar to make it irrespective of any purported delegation by the rules. In Chapter 18 in Table 18.4 at Items 9 & 30, there is delegation to Deputy Registrars of the power to make costs orders pursuant to s 117 of the Act. To the extent that any rule made pursuant to s 37A and s 123 of the Act appears to give Deputy Registrars the delegated power to make an order to enforce a client’s obligation to pay his solicitors fees as taxed, that rule is beyond power and unenforceable.

1. The conclusion that the Deputy Registrar did not have power to make the costs order she made in May 2004 suggests that the contempt application should fail because it could not be held beyond reasonable doubt that the enforcement proceedings were properly undertaken. However, the contempt application is based on a challenge to the authority of the Court by defiance of an order to attend. It is arguable that defiance of an order which had not been set aside could be such a challenge even if the order was made without the power to do so.

2. The matter was not relisted until 27 September 2010 when it was mentioned. There was clear evidence that the respondent seemed to be evading service and the solicitors’ attempts to collect the debt due as a result of the taxation but had instructed a lawyer in New York. I dispensed with personal service on the respondent and granted P Law Firm leave to serve the respondent by forwarding documents to his email address and by posting them to his lawyer in New York. I ordered that the orders I made that day be served in accord with my order for substituted service, stood the matter over to 14 October 2010 for hearing on an undefended basis in the event that on that date the respondent failed to appear either in person or by a lawyer and had also before that date not indicated that he wished to defend the hearing.

3. I am quite satisfied that P Law Firm, on 27 September, sent by email to the respondent’s personal email address and his own specific email address at his place of work a letter advising the respondent of the 14 October date as well as a copy of my orders of 24 September 2010. On 14 October 2010 I made an order dispensing with the requirement to serve the respondent via his New York lawyer by post, adjourned the matter to 15 November 2010 for hearing and ordered that the respondent be given notice of my orders by email. On 19 October this notice was given and on 5 November 2001 notice of the orders of 14 October and 27 September was given to the respondent’s New York lawyer by letter posted on that day. I have no doubt that the respondent had notice of the hearing on 15 November although he did not appear to defend himself. Because of this notice, I am quite satisfied that it is appropriate to hear and decide the contempt application in the respondent’s absence. He has had plenty of opportunity to attend, is clearly unwilling to attend and if given further opportunity to attend is unlikely to do so.

4. Despite his notice, his failure to pay the taxed costs and his failure without exception to appear in the proceedings, I conclude that the solicitors have failed to prove beyond reasonable doubt or even on balance that the respondent has contumaciously challenged the authority of the Court by failing to appear.

5. Before there can be any specific disobedience to an order of the kind alleged, the order must be held to require obedience of that kind. The allegation of contempt relied on here is based on s 112AP(1)(b) so, contempt must be a contravention of an order under the Family Law Act which also amounts to a flagrant challenge to the Court’s authority. The application was filed on 16 February 2007. It relates to the application of 13 December 2005 for enforcement. If that application is assumed to be valid, although based on an invalid order, only breaches which occurred from 13 December 2005 to 16 February 2007 could be regarded as amounting to the contempt. The particularised breaches limit those which can be relied on. These are the respondent’s failure to attend Court on 21 December 2005, 8 March 2006, 19 April 2006, 28 June 2006, 13 September 2006 and 12 October 2006.

6. The allegation of failure to attend on 21 December 2005 cannot be sustained. The respondent had not been served with the application of 13 December by that day and it was at the hearing on that day that the first order for substituted service was made. No order for the respondent’s attendance was made on that day, so when the husband failed to attend on 8 March, the adjourned day, he could not have been in breach of any order to attend because none had been made. Despite the numerous adjournments and non-attendances by the respondent between then and 16 February 2007, no subsequent order for the respondent to attend court was made so he could not have been in breach of any order of the Court pursuant to the Act by his non-attendance.

7. “Order under this Act” in s 112AP(1)(b) had a meaning in February 2007, because of s 112AP(9) and s 112AA as it then was, which in the circumstances here is limited to paragraphs (a) and (d) of the definition of that term in s 112AA. Section 112AA(a) includes in “order under this Act” “an order (however described) made by the court under this Act (other than a parenting order)”. By s 112AA(d), a subpoena issued to a party under the rules in proceedings which do not relate to parenting orders is included in “order under this Act”. An Application filed by a party is not an order of the Court. Any expansion of this term to include failure to attend court in answer to the Application of 13 December 2005 itself could not be a failure to comply with an order of the Court, more so because the application of 13 December 2005 does not in its specific terms require the respondent to attend court, it only seeks to have him examined.

8. The respondent must be shown beyond reasonable doubt to have known of any obligation it is alleged he has breached before he can be found to have breached it in a manner which amounts to contempt, especially the contumacious contempt required to be proven under s 112AP. The failure to inform him by any order or by the application itself means that the Court could not find the respondent guilty of having flagrantly challenged the authority of the Court by his non-attendance contrary to an order of the Court. That there was no such order makes the type of breach which must be proven an impossibility.

9. There is no evidence that the respondent has ever been served with a subpoena to attend court. His son has been served with a subpoena for him to produce his father’s documents and the correspondence between he and his father, filed on 10 March 2006. The warrant for the arrest of the respondent does not, in my opinion, come within the description of “order under this Act” which requires the respondent to attend court because it is not addressed to him and does not require him to attend court. It permits others to force his attendance once it is served on him. It has been served on him, but only outside the jurisdiction in circumstances where nothing has occurred to give it any force in the United States.

10. For all the above reasons I am not satisfied that the contempt alleged and relied on has been proven beyond reasonable doubt. I should and shall dismiss the Application-Contempt filed by P Law Firm on 16 February 2007.

I certify that the preceding thirty-four (34) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Cohen delivered on 19 November 2010.

Associate:     

Date:              19 November 2010