Registrar of the Supreme Court of SA v Temple (No 3) No. Scgrg-99-149

THE REGISTRAR OF THE SUPREME COURT
OF SOUTH AUSTRALIA v TEMPLE (No 3)
[2000] SASC 199

Civil

1................ PERRY J.......................... The defendant, Mr Temple, is to be punished for contempt of court.

By a Registrar’s summons issued on 17 February 1999, Mr Temple was charged with three counts of contempt, all of them arising out of proceedings which had been issued against him in 1996. In those proceedings, five companies, Mane Market Pty Ltd, Mane Lion Pty Ltd, Potanc Pty Ltd, Brighton Management Pty Ltd and Flinders Management Pty Ltd claimed damages from Mr Temple for alleged breaches of his duties as a director and employee of the companies. It is convenient to refer to those proceedings as the Mane Market proceedings.
The statement of claim in the Mane Market proceedings alleged that Mr Temple misappropriated an amount in excess of $700000. On 23 July 1999 the plaintiff, Mane Market Pty Ltd, entered judgment against Mr Temple for $756301.73. The remaining plaintiffs entered separate judgments against him aggregating a further $410371.76.
On 31 January 1997, an ex parte interim order for a Mareva injunction was made in the Mane Market proceedings. The order had the effect, inter alia, of restraining Mr Temple from dealing in any way with his assets.
The interim order was supplanted by an interlocutory order to much the same effect, pronounced by a Master on 20 February 1997 in the presence of counsel representing Mr Temple.
The interlocutory order, inter alia, restrained Mr Temple, his wife and any company, trust or other entity controlled by them from disposing of, dealing in or removing out of South Australia any property or interest in property. The interests of Mr Temple and his wife in any trust were expressly referred to as an asset the disposal of which was prohibited by the order.
On 20 April 1998, in breach of the order Mr Temple by deed assigned to a third party his interest in a trust known as the Temple Weeks trust in consideration of the payment to him of $50000.
There can be no question but that the breach was deliberate, in that Mr Temple’s counsel was present when the order was made by consent. Furthermore, the order was served personally on him on 7 March 1997, following which, and with the assistance of legal representation throughout, he made various applications to vary or discharge it, with mixed success, before the contempt was committed.
After the action by Mr Temple in assigning his interest in the trust had come to their attention, the plaintiffs in the Mane Market proceedings successfully sought an order for the issue of the Registrar’s summons for contempt of court.
Apart from asserting a contempt with respect to the assignment by Mr Temple of his interest in the Temple Weeks trust, the Registrar’s summons also charged a separate contempt constituted by the withdrawal by Mr Temple of $7000 from a TAB agency on 1 February 1997, the day after the Mareva injunction was pronounced.
A third count alleged that Mr Temple was guilty of a contempt in that contrary to the terms of the Mareva injunction he “expended a sum exceeding $500 per week for other than ordinary living expenses, or for the purposes of or which included wagering, betting, the cost of participation in a game of chance or game of skill or gambling”.
When the contempt summons came on for hearing before me, I struck out the third count for reasons which are explained in the judgment delivered by me on 12 April 2000.[1]
[1] Judgment No [2000] SASC 96. The judgment also gives reasons for dismissal of the second count.
I thereupon embarked on a trial of the remaining two counts.
Mid-way through the trial, Mr Temple, by his counsel Mr M. Gray QC, changed his plea to a plea of guilty to the first count, that is, the charge of contempt arising out of the assignment of his interest in the Temple Weeks trust. Consequent upon the plea of guilty, I found the first count proved and recorded a finding of guilt accordingly.
Subsequently, after the completion of the hearing, I delivered a reserved finding dismissing the second count, that is, the count relating to the TAB withdrawal.
In accordance with the procedure laid down by SCR r 93.06(g), having found Mr Temple guilty on what, for convenience, I will refer to as the trust count, I proceeded to hear his counsel in mitigation of penalty.
Express provisions as to punishment for contempt are to be found in the rules. In particular, SCR r 93.08 provides:
“(1).. The Court may punish contempt of Court by committal of the person to prison or fine or both, or by the imposition of a bond to be of good behaviour with such other conditions as may be proper, and by ordering the person to pay the costs of the contempt proceedings.
(2)When the Court imposes a fine, it may allow time to pay and in default of payment within that time order that the person be imprisoned for a fixed period.
(3)... The Court may on the person making proper tender of apology and amends recall or reconsider any previous order of the court punishing him for his contempt.”
Separately, the rules provide:
“SCR r 93.06
When the said person comes before the Court for the hearing or the adjourned hearing of the charge, the procedure shall be:
(a).... ......
(h)where the penalty for the contempt includes an order that the said person shall pay a substantial sum of money, whether by way of fine or costs of the contempt proceedings or both, the Court shall fix a period of imprisonment in default of payment within the time allowed;
(i).... where the said person is unable to pay the fine or costs within the time allowed, the Court may either extend the time for payment or reduce the fine but not the costs.”
There does not appear to be any express provision in the Supreme Court Act 1935 dealing with contempt of court. It seems clear enough, however, that there is an inherent power in the court to punish for contempt, and that the inherent power extends to the imposition of penalties apart from those expressly referred to in the rules.[2]
[2] See Lunn: Civil Procedure in South Australia, vol 1, page 10,247, note [R 93.08.1] and the learned author’s commentary, which includes a reference to Perkes and Anor v Landon and Ors (1988) 15 NSWLR 408 and McIntyre v Perkes and Ors (1988) 15 NSWLR 417.
It is convenient at this stage to refer to Mr Temple’s personal circumstances and the circumstances in which the contempt was committed.
Mr Temple is a married man aged 41 years, who now resides in Darwin with his wife and three schoolgoing children.
For many years he has been very much involved in the hotel industry, an involvement which goes back at least as far as his father. This has found expression in interests which he and his father and others have held in a number of companies engaged in the hotel and allied industries.
At the time when the contempt now in question was committed, Mr Temple was working as general manager for Southern Hotels Pty Ltd, a company which operated two hotels at Victor Harbor, namely, the Crown Hotel and the Victor Harbor Hotel. As well, he describes himself as a “professional punter, commission agent and betting agent in the horse racing industry”.
As for his punting activities, there was evidence before me that between 15 October 1991 and 8 May 1996 Mr Temple wrote cheques totalling in excess of $1.6 million to bookmakers and “other bookmaking organisations”.
The Temple Weeks trust was formed on 12 October 1992. It was the vehicle through which a joint venture which he formed with another man, David Weeks, operated entertainment and hospitality based businesses in South Australia. The trust is a discretionary trust in which there are two classes of beneficiaries, one class represented by interests associated with Mr Weeks and the other by interests associated with Mr Temple.
It appears that the trustee of the trust, Ocean East Pty Ltd, is the vehicle through which the Newmarket Hotel is operated, the profits of that operation being distributed through the trust.
A little over a year after the Mareva injunction was pronounced, namely, by deed dated 20 April 1998, Mr Temple assigned to Asset Management (SA) Pty Ltd (“Asset Management”) his interest in the trust for the consideration to which I have referred, namely $50000.
It is not possible for me to estimate reliably the value of Mr Temple’s interest in the trust at the time when he assigned it. In that regard, the evidence of the circumstances in which the assignment of his interest was effected falls short of satisfying me that it was an arm’s length transaction. More particularly, I am not satisfied that the stated consideration for the assignment, namely, $50000, is a true reflection of the value of his interest.
I have no doubt that Mr Temple was in financial difficulties at the time of the assignment. Later in the same year, by a sequestration order pronounced in the Federal Court on 2 September 1998, he was declared bankrupt.
I am prepared to accept Mr Temple’s assertion that his purpose in selling his interest in the trust was to generate funds to allow him to pay living expenses and debts.
There is a substantial debt due to the creditors who have proved in the bankruptcy. Although I have not been told the amount, the creditors who have proved in the bankruptcy include the Mane Market plaintiffs, whose judgments alone exceed $1 million in total.
For some time Mr Temple has received considerable assistance from his father. The property in which Mr Temple formerly resided in South Australia, namely, a property at Marion, was purchased from his wife by Thetus Nominees Pty Ltd (“Thetus”), of which his father was a director. Mr Temple asserts that he then agreed to pay rent for the property to Thetus, but immediately fell into arrears.
Since January 1999, Mr Temple has resided with his family in Darwin. He has obtained employment there as a “hospitality co-ordinator” which he describes as a job involving the co-ordination of the marketing and promotions of Vicdisc Pty Ltd which operates two entertainment venues in Darwin, namely, the Victoria Hotel and the Discovery Entertainment complex.
He has sworn to receiving a salary of $56000 per annum.
In an affidavit filed recently on Mr Temple’s behalf by Mr Mansueto, a solicitor in the firm of solicitors representing Mr Temple, an attempt is made to set out Mr Temple’s current financial position. An annexed statement of weekly income and expenditure indicates that from his gross salary of $1076.92 per week, tax of $339.17 is deducted and as well an amount of $190.75 is paid to his trustee in bankruptcy pursuant to a statutory notice which takes effect as some sort of garnishee against his earnings.
Mr Mansueto states in his affidavit:
“I am instructed by Russell Temple that insofar as the Temple family’s expenses exceed his income, payments are made to his wife Diane Temple, by Roy and Barbara Temple, [his parents] to cover any shortfall.”
It appears that Mr Temple’s parents pay, inter alia, his accommodation expenses of $525 per week.
I have yet to refer to three developments of recent origin which may be thought to be important from the point of view of the punishment to be imposed.
By deed of assignment dated 19 May 2000, Asset Management reassigned its interest in the Temple Weeks trust to Mr Temple. A copy of the deed of reassignment has been put before me. The reassignment is expressed to be “for no consideration”. No explanation has been given as to the circumstances in which the reassignment was effected and why Asset Management saw fit to reassign its interest in the trust to Mr Temple on that basis. That it has done so, reinforces my doubts that the assignments by Mr Temple to Asset Management and the reassignment to him were transactions effected at arm’s length.
The trustee in bankruptcy of Mr Temple’s bankrupt estate has been notified of the reassignment. No doubt any distributions made in favour of Mr Temple pursuant to the trust deed will enure for the benefit of his creditors, at least so long as he remains undischarged.
I was informed during the course of argument that he is eligible for discharge in January 2002, but that under the Bankruptcy Act the discharge may be deferred.
The second matter of some significance is that Mr Temple has executed a written apology in which he “sincerely apologises” to the court for his breach of the Mareva injunction order, acknowledges the breach of the order; and goes on to state:
“I appreciate now that my actions were a contempt of the order of the court. I deeply regret that by my actions I have shown unintended disrespect to this Honourable Court. I also regret that the plaintiff in the proceedings has been caused by my actions to incur the trouble and expense of prosecuting the proceedings for contempt.”
The third matter is that I have been furnished with two character references concerning Mr Temple.
The first reference is from Mr John Firth, barrister, who for many years was a partner in the law firm Kelly & Co. He dealt with Mr Temple and his family on a regular basis and found him to be, amongst other things, hard working, frank and of apparently good character. He states that he “never had reason to doubt his honesty, professionalism, ability and integrity”.
The second reference is from Mr Mick Burns, director of Vicdisc Pty Ltd, Mr Temple’s employer. He states that he has known Mr Temple for approximately seven years, having initially known Mr Temple when he was operating the hotel business in Adelaide in partnership with Mr Weeks. He knew that Mr Temple ran a gambling company and was “a heavy gambler”. He states that at one stage Mr Temple’s life was being “absorbed by his gambling operation, an operation which destroyed his life”. He goes on to say:
“Since this time I have seen Russell’s life disintegrate under the pressure of the civil dispute with David Weeks. These have led to financial problems from both legal disputes and the gambling and I now know Russell to be a bankrupt.”
Mr Burns goes on to state that Mr Temple now runs the marketing and promotions of his two hotels, is a “valued employee”, and no longer gambles. He says further:
“I am prepared to stand by Russell as an employer and as a friend and have confidence that he will work through these problems and be a better person for the same. ....... I am certain that Russell now accepts his responsibilities better and has developed new values. Russell now leads a very modest life in Darwin. ....”
In considering the approach to be taken by me in punishing Mr Temple for his contempt, I bear in mind observations which have been made in a number of authorities to which I have been referred.
I have already referred to the breadth of the inherent power of the court to punish for contempt. As to that, see also Registrar of the Court of Appeal v Maniam [No 2].[3]
[3] (1992) 26 NSWLR 309 and the cases there cited.
In Australian Consolidated Press Ltd v Morgan and Anor[4] Windeyer J discusses at length the armoury of remedies which historically have been brought to bear by the courts to punish for contempt. Although he expressed misgivings as to the appropriateness of the imposition of a fine for disobedience of an injunction or breach of an undertaking, insofar as his view in that respect was based upon the distinction between civil and criminal contempts, that view has been overtaken by the decision of the High Court in Australian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd.[5] In that case, the High Court criticises the distinction previously made between civil and criminal contempt and characterises all contempts as quasi criminal. That case is authority for the proposition that a fine might be appropriate for disobedience of a court’s order in circumstances where the disobedience is wilful.[6]
[4] (1965) 39 ALJR 32 to 38-39.
[5] (1986) 161 CLR 98.
[6] See the discussion at pages 106-109 per Gibbs CJ, Mason, Wilson and Deane JJ.
Notwithstanding the fact that it is probably no longer appropriate to distinguish between civil and criminal contempts for the purpose of punishment, there is no question that contumacious contempt, that is, contempt which involves a conscious defiance of the authority of the court, is the most serious class of contempt, as to which the court may commonly impose a custodial sentence or a fine, or both.[7]
[7] See Registrar of the Court of Appeal v Maniam supra at 315.
I take particular note of the decision of the High Court in Pelechowski v Registrar[8] and particularly the exposition by Kirby J in that case of the principles of punishment for contempt.[9] He makes it clear that the underlying purpose of punishment for contempt is to vindicate the due administration of justice.
[8] (1999) 73 ALJR 687.
[9] See para 147 et seq.
Authority makes it clear that provisions of the Criminal Law (Sentencing) Act 1988 do not apply to punishments imposed for contempt.[10]
[10] See Nicholls v DPP (1993) 170 LSJS 362. Other authorities which provide illustration of the approach taken by the courts to punishing for contempt are Corporation of the City of Woodville v Williams (1992) 57 SASR 278 and Gallagher v Durack (1983) 152 CLR 238. See generally Halsbury’s Laws of Australia “Civil Contempt” paras [105-500] - [105-510].
At the end of the day, it is incumbent on the court to impose a punishment which will operate as an appropriate vindication of the due administration of justice, bearing in mind the circumstances of the contempt, but at the same time making whatever allowance appears appropriate for the personal circumstances of the contemnor.
I take into account the various factual circumstances which I have set out earlier in this judgment. As well, I take into account Mr Temple’s personal circumstances as deposed to by him and by those representing him, with the qualification that I am not satisfied that I have been given a completely frank account of his financial circumstances, including the willingness of his parents to stand behind him, and the extent to which they are prepared to go in doing so.
I accept that it is a basic principle to be borne in mind when imposing a penalty, whether in a criminal context or for contempt of court, that ordinarily it is not appropriate to impose a penalty of a kind or in circumstances where the immediate burden of it will fall on others apart from the defendant.
But in this case there are unusual circumstances which lead me to the view that it is proper to impose the punishment to which I will in due course refer, even although there is a possibility that Mr Temple’s family may see to the payment of the amount which will have to be paid to avoid his imprisonment. I put it no higher than a possibility, in view of the doubts which I entertain as to the completeness of the information I have been given as to Mr Temple’s financial resources.
Furthermore, the fact that Mr Temple may have to rely on others to assist him to meet the burden of the punishment, if that should in fact be the case, does not mean that Mr Temple will not have brought home to him the serious consequences of a failure to comply with an order of the court, which is the ultimate justification for punishment for contempt.
In all the circumstances, I think it proper to impose a term of imprisonment, namely six calendar months, as to which, pursuant to SCR r 93.09, I order that execution be suspended until 31 December 2000, on condition that before that date the sum of $50000 is paid to Mr Temple’s trustee in bankruptcy for and on account of his bankrupt estate.

I will hear the parties as to the costs of the Registrar’s summons, including the hearings before me.

JUDGMENT CITATIONS
LISTED IN ORDER OF APPEARANCE IN JUDGMENT

Judgment No [2000] SASC 96. The judgment also gives reasons for dismissal of the second count.
See Lunn: Civil Procedure in South Australia, vol 1, page 10,247, note [R 93.08.1] and the learned author’s commentary, which includes a reference to Perkes and Anor v Landon and Ors (1988) 15 NSWLR 408 and McIntyre v Perkes and Ors (1988) 15 NSWLR 417.

(1992) 26 NSWLR 309 and the cases there cited.
(1965) 39 ALJR 32 to 38-39.
(1986) 161 CLR 98.
See the discussion at pages 106-109 per Gibbs CJ, Mason, Wilson and Deane JJ.
See Registrar of the Court of Appeal v Maniam supra at 315.
(1999) 73 ALJR 687.
See para 147 et seq.
10. See Nicholls v DPP (1993) 170 LSJS 362. Other authorities which provide illustration of the approach taken by the courts to punishing for contempt are Corporation of the City of Woodville v Williams (1992) 57 SASR 278 and Gallagher v Durack (1983) 152 CLR 238. See generally Halsbury’s Laws of Australia “Civil Contempt” paras [105-500] - [105-510].

[2000] SASC 199

30 June 2000