Rand and Rand

[2007] FamCA 1674

FAMILY COURT OF AUSTRALIA

RAND & RAND [2007] FamCA 1674

FAMILY LAW – CONTEMPT - Contravention of Court order

Family Law Act 1975 (Cth)

Blair & Curran (1939) 62 CLR 464
Ibbotsen & Wincen (1994) FLC 92-496

APPLICANT: MS S RAND

RESPONDENT: MR M RAND

FILE NUMBER: SYF 2153 of 2001

DATE DELIVERED:  25 JUNE 2007

PLACE DELIVERED:  PARRAMATTA

PLACE HEARD: SYDNEY

JUDGMENT OF: COLLIER J

HEARING DATE:  20 June 2007

REPRESENTATION

COUNSEL FOR THE APPLICANT: MR RICHARDSON S.C.

SOLICITOR FOR THE APPLICANT: Adrian Twigg & Co

COUNSEL FOR THE RESPONDENT: MR MAIDEN S.C.

SOLICITOR FOR THE RESPONDENT: Benjamin & Robinson

Orders

1. That the Court finds each of the contempts alleged against the husband proven.

2. That the parties to approach the listing director of this registry for a date to deal with the sentencing aspect of this matter.  Having regard to the time spent to date in this matter I believe that half a day will be required for that purpose.

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

FAMILY COURT OF AUSTRALIA AT PARRAMATTA

FILE NUMBER: SYF2153 of 2001

MS S RAND

Applicant

And

MR M RAND

Respondent

REASONS FOR JUDGMENT

Introduction

1. The matter before me for judgment today is the application of the wife filed on 1 February 2007.  That application seeks that the husband be dealt with for contempt on the following basis: that the husband, Mr M Rand, failed to comply with order 3 made on 10 January 2006, and further that he failed to comply with the conditions of a bond imposed upon him on 24 October 2006.

2. The husband filed an application in a case in Court seeking, inter alia, that the application of the wife be adjourned, in effect, pending further order.  I dealt with that application and refused it.  The hearing of the contempt application then proceeded.

Brief Background

1. A brief background to this matter is as follows.  On 10 January 2006 Rowlands J delivered judgment in this matter.  The hearing of the matter had commenced on 9 September 2002 and over several stanzas had proceeded to its conclusion on 25 November 2005.  The husband subsequently appealed his Honour's decision, but, unable to provide security for costs as required, the appeal was subsequently dismissed.  There are on foot appeals by other respondents in the proceedings which have been, as I understand it, heard by the full Court of the Family Court, but in respect of which judgment is still pending.

2. On 3 October 2006 Judicial Registrar Loughnan heard an application by the wife filed on 11 May 2006.  The Judicial Registrar proceeded by way of contravention in his hearing.  The Judicial Registrar found the contravention made out and adjourned the matter to deal with the issue of sanctions on 24 October 2006.  On 24 October 2006 the husband was ordered to enter into a bond with various conditions.  The bond was to have a monetary term of $20,000 and be for a period of 12 months.  The conditions were that the husband comply with all orders of the Court, that he be of good behaviour, and that in relation to O 3 he was to send documents to the wife's solicitors to account for any profits arising from those patents or intellectual property at the expiration of one calendar month of the date of this bond and forthwith upon the occurrence of any significant account.

Concessions by the Husband

1. The husband, in the proceedings before me and through his solicitor, conceded that he had knowledge of the orders of Rowlands J and that he understood them.  It is perhaps wise here that I set out his Honour's orders.  The relevant order is O 3, and is in these terms:

   Declared the wife is entitled to one half of any profits arising out of the patents or other intellectual property relating to the conversion of waste material to building products, and further order the husband account, and, subject to O 11 hereof, pay to the wife one half of any profits received in respect of the intellectual property of the various companies known as [NR] Technology Pty Ltd, [NR] Corporation, SARL [B] Pty Ltd and related entities.

2. The husband indicated that he understood the terms of the bond he had entered into on 24 October 2006.  He conceded that service of the application had been properly effected.  I charged the husband with the two allegations and he denied them. 

The Wife’s Material

1. The wife in the proceedings relied upon her own affidavit sworn on 31 January 2007.  No objection was taken to the wife's affidavit.  The wife also relied upon the reasons for judgment of Rowlands J of 10 January 2006, highlighting and taking me specifically to par 34 to par 71.  The wife also relied upon the transcript of proceedings before Loughnan JR.

2. The husband effectively made no challenge to the wife's case.  The wife was not required for cross-examination.  No submission was made to me after the material had been identified that there was no prima facie case made out. 

The Husband’s Material

1. In his case, the husband relied upon his affidavit sworn 19 June 2007 and filed in Court.  He relied upon the affidavit of Mr D sworn 19 May and of his solicitor of 19 June 2007.  Objection was taken to the husband's affidavit and on the basis of those objections I struck out par 2 to par 8.  Paragraphs 9 and 10 of the affidavit were not read as they related to other issues.

The Husband’s Evidence before Me

1. The husband gave oral evidence.  To his own counsel he said that he had sought to comply with the orders and had forwarded documents to his solicitor.  He said that there had been letters addressed to Mr Twigg and forwarded by his solicitors and he thought he was complying.  He said all of the letters sent indicated there was no income.  He has information from the Australian Securities and Investment Corporation, and he kept asking the solicitors for the wife for the accounting principles relied upon. 

2. There was talk about a balance sheet being required to show what had occurred.  He said the companies did not exist.  He said that he was being entrapped and had not received one cent.

3. To the wife's senior counsel he said that he recalled being at the hearing before the Judicial Registrar and giving oral evidence.  He was asked then if he had an understanding of the orders and he said he could not recall and did not recall the answer he gave.  He said that he had provided letters in respect of the companies not trading, and since the orders had written monthly as he understood the orders required.  He said the Judicial Registrar made it clear he had to provide full accounting of the waste agglomeration.  He said that does not exist.  He said that W Holdings Pty Ltd was no longer trading; he spoke of a sale of the company LB Pty Ltd; SL Pty Ltd, he said, was the same company and was not trading; WEM was a consultancy.  He said in re-examination that SL Company had ceased trading and that W Holdings Pty Ltd ceased to trade nine months previously. That was the end of his evidence, effectively.

4. The husband asserts that he does not understand what more is required of him, and that that which he has done is all he can do and has complied with the orders both of the trial judge and the learned Judicial Registrar.  He says that he is genuinely confused. 

5. The wife's case is that the husband has not complied with O 3 of Rowlands J.  She says that he has not complied with the conditions under the bond imposed upon him by the Judicial Registrar.  Thus, to my mind, there are two allegations of contempt.  The order of Rowlands J clearly is an order of the Court and I am satisfied that the bond, pursuant to s.112AA(f)(1) is also an order with in the meaning of the relevant part of the Act. 

Discussion

1. It is not relied upon as part of the wife's case that the husband has failed to pay her one half of any profits.  What the wife says is that the requirement to account is separate from the requirement to pay the half of the profits.  Senior Counsel, taking me to O 3 of Rowlands J’s orders, said that the word "and" was disjunctive; in other words, "that the husband account" was a separate and distinct issue from, "the husband pay one half of any profits."  With that submission I agree. 

2. The word "account" was the subject of argument before me.  The husband contends that it is used and intended to mean: production of figures upon which a calculation could be based.  Thus, he says, if no moneys are involved or produced by any of the entities, there can be no accounting in that sense.  Therefore, he says further, to notify the wife of this situation - that is, no money, no trading - is all that is required for compliance with the order and the bond.  Annexure 1 to the husband's affidavit contains letters from himself and his solicitors to the wife's solicitors, setting out that no moneys or income have been generated or received. 

3. The wife says that "accounting" has a wider meaning.  If one goes to the Macquarie Dictionary, the word "account" is given a number of meanings.  Firstly:

   Verbal or written recital of particular transactions and events, a narrative.

   Next:

   An explanatory statement of conduct as to a superior.

   Next:

   A statement of reasons, causes, explaining some event.

4. Certainly the expression "account" can mean “a striking of a statement and a set of figures”.  However, in my mind, that which his Honour required was that the husband explain in detail the situation regarding the various entities.  It is the submission of the wife's Senior Counsel that the husband must come to grips with the findings of Rowlands J and must explain what has happened by means of a narrative, a telling, a setting out of particulars, that which has occurred.

5. Learned senior counsel referred me to the decision of Blair v Curran[1] where this passage appears at page 531:

   A judicial determination directly involving an issue of fact or of law disposes once and for all of the issues so that it cannot afterwards be raised between the same parties or their privies.  The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or restrained or that a right be declared.

   [1] (1939) 62 CLR 464

6. To my mind that covers entirely the situation vis-à-vis the husband and the judgment of Rowlands J.  It is clear that the trial judge found that as at the date of the judgment the technology, which was a significant part of the property dispute, existed.  He further found that it was the husband's property even though held by others, and he found that it had a substantial value of not less than $1 million. 

7. The husband, in the manner in which his case has been presented before me, seems to assert that those findings are simply wrong.  To my mind, and in proceedings such as this, it is not open to him to make that assertion.  However it occurred, the appeal that he mounted against his Honour's orders was dismissed.  The orders, so far as he is concerned, stand unchallenged.  There can be no doubt that these findings bind the husband.  To comply, therefore, with O 3 of his Honour to account, I am satisfied he must explain with precision, and if appropriate, supporting documents, what has happened to the technology or intellectual property since his Honour's judgment.  He has not done so.

8. The matter before Judicial Registrar Loughnan led to a finding of contravention.  The Judicial Registrar then imposed a bond to which I have already made reference with a monetary term of $20,000 for a 12-month period, requiring him to account for any profits.  This is, to my mind, somewhat different from the terms of Rowland J's orders.  The requirement is expressed differently.  The wording of the orders and the bonds are, to my mind, somewhat different, and on the face of it, the original orders of his Honour clearly required something more than the orders of the learned Judicial Registrar. 

9. Under the bond the husband was required to account for profits.  Since entering the bond he has forwarded the material to which I have referred by virtue of annexure 1 to his affidavit.  However, to my mind, that material does not comply with the requirements.  Again, the husband seems to believe that a brief statement is sufficient to comply.  In my mind it is not. 

10. These proceedings are brought pursuant to the provisions of s.112AP (1) of the Family Law Act.  That section is in the following terms:

    Subject to s.1A,( which has no application here) this section applies to a contempt of a Court that: (a) does not constitute a contravention of an order under this Act or; (b) constitutes a contravention of an order under this Act and involves a flagrant challenge to the authority of the Court.

11. Clearly, then, subsection (b) is the relevant section.  The wife's case is that the husband has contravened O 3 of his Honour in that he has failed to account.  I have already expressed myself satisfied that he has so failed.  The question is does that contravention, of itself, involve a flagrant challenge to the authority of the Court.  In the reported decision of Ibbotsen v Wincen[2], their Honours of the full Court were satisfied that a single breach may be sufficient.  It must involve conduct of an exceptional, striking nature.  The breach must be wilful, that is, deliberate, rather than inadvertent.

    [2] (1994) FLC 92-496

12. The husband's defence, as I understand it, is in two parts.  First: I have done all that I am required to do; and two: even if I have not, my failure is not deliberate, but at worst, inadvertent. 

13. It is trite to say that the onus of proof where an allegation of contempt is made rests upon the applicant, who must establish all elements of the contempt beyond reasonable doubt.  I am satisfied that the husband was aware of the orders of Rowlands J and the nature of those orders.  I am satisfied that he did not comply with his Honour's orders.  I am satisfied that the husband's failure to account was deliberate and designed to avoid paying the wife any moneys to which the wife may be entitled pursuant to his Honour's orders. 

14. As I have said, the breach of his Honour's orders related to him not providing a proper, informed and chronological account of what had happened to the intellectual property or technology.  As I have said before, he says he did not know or believe or apprehend this is what was required.  Again, I do not accept that this is so.  The orders of his Honour stand unchallenged.  He knew the orders intended to benefit the wife.  He ought to have known that the wife was to be properly informed.  He chose not to do this. 

15. He ignored the orders until the bond of the Judicial Registrar.  He was determined during the time up until the Judicial Registrar's decision that he would not provide material that may enable the wife to obtain the benefit of his Honour's orders.  His actions accordingly, and in my view, involve a flagrant breach of his Honour's orders.  I find that contempt made out. 

16. As to the second alleged contempt of the bond of the Judicial Registrar, I am satisfied the orders on their face impose a lesser requirement in that they refer to accounting for any profits.  I have already indicated that in my view the husband has not complied with that order.  I cannot believe that the husband could claim that he understood that the bond of the Judicial Registrar lightened or in any way removed the burden imposed upon him or the obligation imposed upon him by the orders of the trial judge.  Notwithstanding the conditions of the bond I am satisfied the husband knew that he still had the obligation to provide the information required by his Honour's order for an account.

17. The learned Judicial Registrar could not, in any event, have ameliorated or altered his Honour's orders.  In my view there was no attempt by the learned Judicial Registrar to do this.  The husband knew his obligations continued, or ought to have known. 

18. I note that from the material before me the husband has, on a number of occasions sought to have explained by the wife's legal representatives what his obligations were.  To my mind that is not an excuse of which he can avail himself to say that his breaches were inadvertent.  His ongoing failure in the circumstances I have outlined is such, as in my view, to involve a further flagrant challenge by him, because he has set on one side any attempt to comply with his Honour's orders by which he was bound to provide information to enable the wife to further enforce or put into effect the orders for payment to her of sums of money.  I find that second contempt proven.

19. I direct the parties to approach the listing director of this registry for a date to deal with the sentencing aspect of this matter.  Having regard to the time spent to date in this matter I believe that half a day will be required for that purpose.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of the Honourable Justice Collier

Associate: 

Date:  19 July 2007