Porto and Porto (No 3)

[2009] FamCA 1346

FAMILY COURT OF AUSTRALIA

PORTO & PORTO (NO. 3) [2009] FamCA 1346

FAMILY LAW – CONTEMPT – Sentence

APPLICANT: Ms Porto

RESPONDENT: Mr Porto

FILE NUMBER: MLC 3219 of 2007

DATE DELIVERED: 17 December 2009

PLACE DELIVERED: Melbourne

PLACE HEARD: Melbourne

JUDGMENT OF: Dessau J

HEARING DATE: 17 December 2009

REPRESENTATION

COUNSEL FOR THE APPLICANT: Mr Ross

SOLICITOR FOR THE APPLICANT: Westminster Lawyers

COUNSEL FOR THE RESPONDENT: Mr Lipschutz

SOLICITOR FOR THE RESPONDENT: Berry Family Law

Orders

1. That the wife shall have leave to withdraw her Contravention Application filed 7 December 2009.

2. That the wife’s Application for Contempt filed 7 December 2009 being proven, and it being found that the husband MR PORTO has contrary to s 112AP of the Family Law Act, contravened paragraph 3 of the Orders of this Court made on 25 March 2009, and has flagrantly challenged the authority of the Court, he is hereby sentenced to 3 months’ imprisonment, such sentence to start this day.

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

FAMILY COURT OF AUSTRALIA AT MELBOURNE

FILE NUMBER: MLC 3219 of 2007

MS PORTO

Applicant

And

MR PORTO

Respondent

REASONS FOR JUDGMENT

1. The wife had three applications before me today: her Application in a Case for a s 106A of the Family Law Act order, filed on 3 December this year, her Contravention Application filed on 7 December, and her Contempt Application filed also on 7 December.

2. The husband admits the contempt.  He admits that he has failed or refused to sign the Spanish Power of Attorney directed to a bank or banks in Spain pursuant to paragraph 3 of my Orders of 25 March 2009.  He offers no defence.  He also admits the contravention relevant to the same set of circumstances.  The application for contravention also related to a costs order against the husband which he has not met, but that aspect has not been pursued ultimately today.

3. The history, as I have said many times, has been recited many times.  For context, I mention only the briefest summary. 

4. These parties separated in 2005 after a marriage of more than 30 years, during which they ran a successful property development company here in Australia.  It’s common ground that, leading up to, and/or around separation, their business was liquidated.  The husband agrees that at least $4.6 million was transferred to Portugal.  The wife says it was as much as $7 million.  He says the moneys were banked in Portuguese banks before being withdrawn by him, handed to a man known to him only as Mr D, a man he had not met before, and has not seen since, from whom he obtained no proof or receipt, and for whom he had no contact details.  In short, he says he has lost all the family wealth, and it’s no longer available for distribution.  

5. The wife, who has remained in Australia, now supporting herself from work as a part-time cleaner, disbelieves the husband’s account as a fanciful one.  Amongst the material relied upon by her in these proceedings is an affidavit sworn by the parties’ adult son, a professional in Australia, saying that his father had confided to him that, if anything happens to him, the son should go to his father’s village in Portugal, the clear inference being that he would be led to the money.

6. Since this case started before me in the course of 2007, many months have passed with efforts on the wife’s part to obtain information from a Portuguese bank about the movement of funds.  The bank required a specific authority signed by the husband, because the account or accounts were in the husband’s sole name.  The wife’s solicitor sought that authority be signed on 2 May 2007.  On 7 July 2007, the bank advised that a Procuração, or a Power of Attorney was required, not just a signed authority. 

7. All reasonable efforts by the wife’s solicitors for the husband to sign that document failed over the following six months, between September 2007 and March 2008.  On 19 March 2008, at the door of the Court, the husband signed the document.  Prior to that, he had simply refused.  Following that process, in June 2008, I made orders for the Attorney-General’s Department, using international law mechanisms provided under the Hague Convention, to obtain evidence from the Portuguese authorities. 

8. It became apparent in the course of the wife’s investigations that moneys had previously been moved from Portugal to Spain.  In March 2009, I made orders again involving the Attorney-General’s Department in the same process, in an effort for evidence to be obtained from the Spanish banks. 

9. On 7 October this year, I vacated the 30 November trial date as the material from Spain had not been obtained.  The husband, through his solicitor, argued strenuously for the trial not to be delayed.  That is understandable given an Order that effectively keeps him in Australia until this matter is dealt with. In any event, I was satisfied that the hearing should be adjourned pending those further inquiries.

10. I noted, as part of my reasoning, that the husband himself had caused very substantial delay by his previous refusal to sign an authority in accordance with Orders – that is, an authority that may have helped trace the overseas moneys that the wife believes still exist. 

11. The allegation now, that is conceded, is in the following terms in the Contempt Application, and I quote:

    The respondent husband has flagrantly challenged the authority of the Court of Australia [sic] by failing or refusing to sign the Spanish Power of Attorney pursuant to paragraph 3 of the orders made on 25 March 2009 forthwith upon its production to his lawyers by way of letter dated 23 September 2009, and again on 9 October 2009 from Westminster Lawyers to Berry Family Lawyers. 

12. Mr Ross, for the wife, today withdrew the Contravention Application, choosing to proceed on the more serious Contempt Application, so that there was no duplication.  That course was agreed.

13. In addition, I made unopposed orders this morning upon the wife’s Application in a Case, so that a Registrar in this Court can, pursuant to s 106A of the Act, sign the Spanish Power of Attorney on behalf of the husband.

14. That leaves the question of the sentence on the contempt.  Mr Lipschutz for the husband conceded that realistically the only course open by way of punishment for his client’s contempt is imprisonment.  He sought a sentence until the rising of the Court today. 

15. Mr Ross had sought an indefinite term of imprisonment, saying that the husband “held the keys” to his own release.  That is, in fact, not the situation in this case at this time.  The relevant document can and will be signed without the husband’s co-operation.   Mr Ross then submitted that I could impose a sentence between one and 12 months’ duration. 

16. Section 112AP(4) of the Family Law Act provides that the Court may punish a person for contempt by committal to prison, or fine, or both. 

17. A fine in this case, it was agreed, is inappropriate.  From the husband’s perspective, he would say it’s inappropriate as he cannot afford to pay.  From the wife’s perspective, any fine would effectively reduce moneys for a just and equitable property settlement.  From the Court’s perspective, it is in any event an inadequate sanction in this case of a flagrant challenge to the Court’s authority.  And the flagrancy is certainly there, and without any sign of contrition of the part of the husband.

18. According to his legal representative, the husband will not sign this Power of Attorney.  He says it goes beyond an investigation of the disposition of cheques.  He did not however rely on a defence of reasonable excuse, because he says that, in any event, he will not sign this or any other Power of Attorney.  And, certainly, he never communicated any interest in a narrowing of the Power of Attorney.  The wife’s solicitors’ attempts for the document to be signed were simply met with silence. 

19. The husband’s attitude or mindset has been laid bare today.  Earlier in the life of the proceedings, he lost his argument that property proceedings on foot between the parties in Portugal should go ahead, and that these Australian proceedings should not.  Accordingly, he apparently will not co-operate. 

20. There is a slight disconnect within the husband’s position.  He had not opposed the wife’s applications for information to be obtained under the international procedures to which I have referred.  But he opposes the wife seeking information by other means.  It seems that he is picking and choosing his areas of co-operation.  His argument that he won’t sign the Power of Attorney, because it is a part of a fishing expedition, can be very quickly disregarded.  If this is a “fishing expedition” by the wife, then it is one with full justification. It is the husband who says he has lost all their wealth.  Documents that have been obtained by the wife, without any timely assistance by the husband, show that moneys from a Portuguese bank account in the husband’s name were transferred to a Spanish bank.  Efforts now to trace those moneys are not only justified, but one would have expected they would be welcomed by the husband if he were genuinely concerned that the family wealth should be located and restored. 

21. When Mr Lipschutz said that his client should be imprisoned until the rising of the Court, he himself described that as a “slap on the wrist.”  I’m satisfied that a punishment of a far more significant nature is required in this case. 

22. The husband has not taken this course without warning.  On 20 March 2008, when I was asked by the wife to proceed with her contempt application, even once the husband had ultimately signed the relevant Portuguese Power of Attorney, I said, at paragraph 9:

    As to the aspect of deterrence, clearly from the point of view of specific deterrence, it is clear that [the husband] has now shown an understanding of the need to comply with Court orders, having complied, albeit at the eleventh hour.  As to general deterrence, the course of this case should have clearly heralded that, if the Court finds wilful disobedience of an order, imprisonment and, indeed, indefinite imprisonment, may be a real prospect for an offender.  However, I do not propose to use public resources to hear this application now in these circumstances. [The husband] should understand that the system cannot be played so that, after delay upon delay, the Court will ignore any wilful disobedience of a Court order if it is proven.  He is amply forewarned, as is anyone who is contemplating disobeying a Court order.

23. In .Abduramanoski and Abduramanoska (2005) FLC at 93215, the Full Court said, at paragraph 64, citing Borrie and Lowe The Law of Contempt (3^rd Ed at b29):

    Blatant and aggravated contempts, particularly when repeated by a person who has clearly been warned as to the possible consequences of defying an order, will quite properly attract an immediate custodial sentence as a mark both of the gravity of the contempt and the court’s disapproval, and to deter contemnors and others who might be tempted to breach such an order. 

24. The authorities are clear that, although this is a helping court, that aspect must not be misunderstood when it comes to obeying Court orders. 

25. Specific deterrence and general deterrence should both be considered.  In Tate & Tate (2003) FLC 93-138 the Full Court said at 78,299:

    Normally the purpose of contempt proceedings against a person for breach of such an order is to coerce them to comply with it.  However, it is quite clear that another purpose of bringing proceedings for contempt against a person who has breached a non-monetary order of the court may be that of punishment.  The purposes of imposing punishment would appear to reflect the need for individual and general deterrence and retribution for the party’s failure to comply with the order.  Retribution is called for because it is essential to the proper working of the court system that court orders are obeyed.  If they are defied or ignored, the whole system of dispute resolution by litigation breaks down.  While there are other means of dispute resolution available, in the final analysis a citizen has the right to approach a court to determine a dispute, and the court has a duty to do so.

26. Specific deterrence in this case is important.  A period in prison will not only punish the husband for his flagrant disregard of the Order, but also help him reflect so that his actions and words might, in future, synchronise better.  When he says he wants the property case heard and completed, he may understand that he will need to comply with the Orders to ensure that can occur. 

27. The aspect of general deterrence is also obvious and very important.  In a property case, full and frank disclosure is fundamental to the making of orders that effect a final adjustment that is just and equitable between the parties.  Litigants must understand that importance, and that a flagrant disregard of an Order made to achieve such disclosure will meet with punishment.

28. The husband is aged 63.  Although he is not an Australian citizen, he has lived here mostly since about 1971.  He remains a Portuguese citizen.  He married the wife in 1973.  They separated in 2005.  They are now divorced, and have two adult children from whom the husband is now estranged.  He has no other family members in Australia.  He is residing in the home of a friend. 

29. Mr Lipschutz submits that his client has health issues, including an enlarged prostate, and a cyst on his left kidney, and that he suffers discomfort and pain from a hernia.  There was no suggestion that any of those issues would, in any way, counter against a term of imprisonment.  There was no medical evidence.  All I was told is that he’s on a waiting list in the public hospital system, and it could be many years before surgery, for the hernia and cyst.  He cannot meet private surgery fees.  Otherwise, he is tired, depressed and irritable. 

30. The husband has family in Portugal who are supporting him here, and, while he has been here, he has only been working very casual odd jobs as a tradesman.  There was no evidence before me that he has any prior criminal history.

31. Taking into account the need for both specific and general deterrence, and looking at the antecedents of the husband in striking upon the appropriate term of imprisonment, I take into account that any loss of personal freedom is hard, and is, in itself, a punishment.  It sends a strong signal to the husband and the community that Court Orders must be followed.  I do not propose a period of time that will be crushing.  The husband has been well forewarned that he will be punished if he does not comply with Court Orders, and, in the event that such a flagrant disregard were repeated, he will be punished more severely. 

32. The sentence that I propose imposing is a period of three months’ imprisonment to be served starting today. 

I certify that the preceding thirty-two (32) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Dessau

Associate: 

Date: