Rutherford v Marshal of the Family Court of Australia

[1999] FamCA 1299

FAMILY LAW ACT 1975

IN THE FULL COURT OF THE
FAMILY COURT OF AUSTRALIA
AT SYDNEY Appeal No.EA96 OF 1998

File No. SY34 OF 1995

IN THE MATTER OF: RUTHERFORD

Appellant

AND: THE MARSHAL OF THE
FAMILY COURT OF AUSTRALIA

Respondent

CORAM: LINDENMAYER, FINN & HOLDEN JJ
DATE OF HEARING: 15 MARCH, 1999
DATE OF JUDGMENT: 6 OCTOBER, 1999

JUDGMENT OF THE COURT

Appearances: Mr M. Broun of Queens Counsel appearing for the Appellant ( pro bono/amicus curiae)

Mr P. Roberts of Queens Counsel (instructed by The Australian Government Solicitor, Level 21, 133 Castlereagh Street, Sydney, NSW, 2000) appearing for the Respondent

INTRODUCTION

This is an appeal by the husband and a cross-appeal by the Marshal of the Family Court of Australia (“the Marshal”) from an order of Chisholm J made on 14 October, 1998 (order 1, at Appeal Book p.46) that the husband “be committed to prison for a term of three months” (“the sentence”). His Honour imposed the sentence on the husband on that day for a contempt of the Court of which he had adjudged him guilty in a judgment (“the contempt judgment”) which he delivered on 6 August, 1998, following a hearing on 14 and 15 May, 1998 (“the contempt hearing”). After delivering the contempt judgment and before imposing the sentence there had been a further hearing before his Honour on 9 October, 1998 (“the sanctions hearing”) relating to the question of the appropriate punishment for the husband’s contempt of which he had been found guilty by his Honour. Before imposing the sentence on 14 October, 1998, his Honour delivered his judgment (“the sentencing judgment”) in support of that sentence.

When he imposed the sentence on 14 October, 1998, his Honour also ordered that it “not take effect until 15 December, 1998 and that the term of imprisonment not run until it is actually executed” (order 2 of 14 October, 1998 at Appeal Book p.46). He further adjourned the matter to 15 December, 1998, before himself (order 3) and ordered that the husband “be released on his undertaking given in the Court” until that date (order 4). By order 5 of the same date the husband was restrained from leaving New South Wales until further order.

When the matter came before his Honour again on 15 December, 1998, he made a further order varying his order of 14 October, 1998, to read: “That Order 1 not take effect until the determination of the appeals by [the husband] and the Marshal and that the term of imprisonment not run until it is actually executed”. Thus, when the appeal and cross-appeal came before this Court for hearing, the husband remained at liberty upon his undertaking, and the sentence remained wholly unexecuted. That situation will continue until the appeal and cross-appeal are determined by the orders of this Court to be made upon the publication of this judgment.

RELEVANT BACKGROUND FACTS

The husband married the wife in 1979, and they separated in 1991. Shortly after the marriage the husband bought, substantially with funds available to him at the date of the marriage, a property known as “Iona” at 2 Darley Street, Darlinghurst, which became the matrimonial home of the spouses. The purchase price was about $700,000.

After the separation of the spouses in 1991, the husband instituted proceedings in the Family Court of Australia at Sydney, for, amongst other things, property settlement orders under s.79 of the Family Law Act 1975 (“the Act”), which included the sale of Iona and division of the net proceeds between the spouses in the proportions 70% to him and 30% to the wife. The wife cross-applied for different orders, including that she receive 80% of the net proceeds of sale of Iona.

In July, 1991, the husband gave notice to the wife of his intention to sell Iona by private treaty for $2.3million. That prompted the wife to apply to the Court for an injunction to restrain that sale. An interlocutory order was made on 26 July, 1991, restraining that proposed sale upon an undertaking by the wife in the usual terms, namely:-

“… to pay to any party restrained or affected by the restraints imposed by these interlocutory injunction [sic.] or any interim continuation thereof, such compensation as the Court may in its discretion consider in the circumstances to be just, such compensation to be assessed by the Court …”

That injunction was continued by a further order made by Lawrie J on 7 August, 1991 after a contested interim hearing. The husband sought leave to appeal from that order, but that leave was refused by the Full Court on 20 September, 1991. In the meantime, the husband had made a further unsuccessful attempt to gain a discharge of that restraining order.

On 20 January, 1994, Rowlands J heard and granted an application by the husband for orders permitting him to sell Iona by private treaty for $1.9 million. That order was subsequently amended by two further orders made on 20 May, 1994 and 10 June, 1994. In its final form the relevant parts of that order were as follows:-

“THE COURT DECLARES THAT:
1. Notwithstanding any previous injunction the husband is at liberty to proceed forthwith with the proposed sale of ‘Iona’ at a price of $1.9 million upon the terms contained in the draft contract already provided to the wife.
THE COURT ORDERS THAT:
2. Upon completion of such sale the net proceeds after proper adjustments, agent’s commission and selling costs, and the amounts necessary to procure discharges of the mortgages to Westpac Banking Corporation and the removal of caveats by Max Bernard Brunninghausen, Stephen John Wawn, John Samuel Davies, be invested in an interest bearing deposit in the joint names of the husband and the wife in Westpac Banking Corporation at the corner King & Castlereagh Streets, Sydney pending further order of the court, the account to require the signatures of both parties to operate it.”

Pursuant to that order, Iona was sold for $1.9 million, the sale being completed on or about 24 June, 1994. After payment of the various amounts properly payable out of the gross proceeds, the net proceeds of that sale which, in accordance with order 2 of the orders of 20 January, 1994 ought to have been “invested in an interest bearing deposit in the joint names of the husband and wife in Westpac Banking Corporation at the corner of King and Castlereagh Streets, Sydney pending further order of the Court”, were $422,705.57.

As a consequence of the restraint obtained by the wife against the earlier sale at $2.3 million, and its ultimate sale at only $1.9 million, the parties lost $400,000, plus some $270,000 in additional interest and other charges which were incurred in respect of debts secured against the property during the period from July, 1991 to June, 1994. In his judgment of 23 December, 1996, determining the substantive property proceedings between the husband and wife, Coleman J assessed the loss to the parties flowing from the wife’s obtaining of the interlocutory injunction at $670,000, which sum he assessed as the compensation effectively payable by the wife pursuant to her undertaking as to damages.

The net proceeds of the sale of Iona in the sum of $422,705.57 were never deposited to any joint account or invested in any interest bearing deposit in the joint names of the husband and wife, whether with the Westpac Bank at the corner of King and Castlereagh Streets, Sydney, or elsewhere. Instead, by the husband’s direction, that sum was, on 24 June, 1994, placed upon term deposit for 31 days at the Commonwealth Bank, Woollahra in the name of Huxide Pty Ltd, a company controlled by the husband. His Honour found (at Appeal Book p.14) that those proceeds “were paid into what was in effect [the husband’s] account”, and that finding was not challenged on this appeal.

Thereafter, the husband took steps, over a number of days, which are described by the trial Judge in his judgment (at Appeal Book p.14) which led to his ultimately withdrawing all of the money from that account (save for $400 which was incurred in bank fees) in cash. He later told the wife, and reiterated in his evidence to the Court, both at the hearing of the property proceedings and at the sanctions hearing, that he gambled all that money away at casinos in Canberra and at Surfers Paradise, in Queensland.

That action by the husband led to the institution, on 18 October, 1995, by the Principal Registrar of this Court, of proceedings pursuant to s.112AP of the Act, that the husband be dealt with by the Court for contempt of the Court constituted by his alleged contravention of the order of 20 January, 1994, as varied by the orders of 20 May and 10 June, 1994. The initiating application, in Form 47, appears at Appeal Book pp.47 and 48. Subsequently, by order of Chisholm J of 14 May, 1998, the Principal Registrar was removed as the applicant in those proceedings and the Marshal was substituted as the applicant.

On 8 August, 1996, the contempt application came before Chisholm J for hearing. However, after hearing legal argument, his Honour decided that that application should be adjourned until after the hearing and determination of the property proceedings between the husband and the wife. He therefore ordered accordingly.

The property proceedings between the husband and wife were heard by Coleman J during December, 1996, and his Honour delivered judgment and made orders in those proceedings on 23 December, 1996.

In his judgment, Coleman J notionally added back into the pool of assets available for division between the husband and wife in those proceedings (in accordance with Townsend & Townsend (1995) FLC 92-569) the $422,000, approximately, which the husband had received and (on his evidence) dissipated, from the sale of Iona. He also notionally added back $190,000 which had been paid to the husband’s solicitors for costs of Family Law proceedings out of the sale proceeds of Iona, which payment had contributed to the reduction of the net proceeds to only the $422,000 ultimately received by the husband. Consistently, he also added back $68,000 which the wife had at separation. The only existing asset his Honour found to be the interest of the wife in a property at Balmain which he found to have a value of $175,000. So his Honour found the total property and notional property of the parties, for the purpose of the proceedings, to be $855,000, of which the husband had had $612,000 ($422,000 plus $190,000) and the wife $243,000 ($175,000 plus $68,000). He also held that liabilities of $80,000 by the husband and $53,000 by the wife should be taken into account, leaving net assets of $722,000, of which $532,000 was held or notionally held by the husband, and $190,000 by the wife.

On the basis of contributions, Coleman J considered that those net assets should be divided between the parties in the proportions 55% to the husband and 45% to the wife. Consideration of the relevant s.75(2) factors (other than that arising from his finding about the compensation payable by the wife pursuant to her undertaking as to damages) led his Honour to conclude that the net assets should be equally divided, which would have led to the wife receiving a further $171,000. However, when he then took into account also, under s.75(2)(o) the fact that the wife’s obtaining of the interlocutory injunction had caused a loss of, on one view, $670,000, and on any view at least $400,000, he concluded that there should be no adjustment of the parties’ existing property rights, and each should be left with what he or she had at that time. In substance, therefore, he dismissed both parties’ applications under s.79 of the Act.

It was with that background that the contempt hearing proceeded before Chisholm J on 14 and 15 May, 1998.

THE CONTEMPT JUDGMENT

His Honour began this judgment by outlining the nature of the proceedings, including a recitation of the terms of the charge against the husband as set out in the application, which were as follows:-

“That [the husband] be dealt with by the Court for contempt of the Court in that it is alleged by [the Marshal] of the Family Court of Australia that:
(a)contrary to orders made by the Court in proceedings numbered SY5558 of 1991 on 20 January 1994, as amended by orders made on 20 May 1994 and 10 June 1994, the respondent did not, upon completion of the sale of the property, known as ‘Iona’, situated at 2 Darley Street Darlinghurst in the State of New South Wales (the property), invest the net proceeds of such sale, pending further order of the Court, in an interest bearing deposit in the joint names of [the husband] and [the wife] in a Westpac Banking Corporation account requiring the signitures [sic] of both account holders to operate it; and
(b)the respondent, contrary to the said orders of the Court, disposed of the net proceeds of the sale of the property;

and by reason of the stated acts or omissions the respondent is in contempt of the Court.”

His Honour then proceeded to set out the terms of s.112AP and of the relevant parts of the orders of 20 January, 1994, which the husband had allegedly contravened. We have already set out the terms of those orders in paragraph 9 hereof, and it is unnecessary to repeat them here. However, as we shall be considering the meaning and application of s.112AP later in this judgment, it is convenient to set out the section at this point, as his Honour did in his judgment. The section provides:-

“(1) 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.

(2)       In spite of any other law, a court having jurisdiction under this Act may punish a person for contempt of that court.
(3)       The Rules of Court may provide for practice and procedure as to charging with contempt and the hearing of the charge.
(4)       Where a natural person is in contempt, the court may punish the contempt by committal to prison or fine or both.
(5)       Where a corporation is in contempt, the court may punish the contempt by sequestration or fine or both.
(6)       The court may make an order for:
(a)       punishment on terms;
(b)       suspension of punishment; or
(c)       the giving of security for good behaviour.
(7)       Where a person is committed to prison for a term for contempt, the court may order the person's discharge before the expiry of that term.”

His Honour then dealt with the evidence before him, in the course of which he outlined, much as we have already done, the background facts which were, as he said, “largely uncontroverted”. One matter to which his Honour gave rather more attention than we have yet done, was the course of the proceedings before Rowlands J on 20 January, 1994, leading up to the making of the orders which were made by him on that day.

Without descending into quite as much detail as his Honour did, what the transcript of the proceedings of 20 January, 1994 reveals is that, after Rowlands J had delivered his judgment wherein he indicated that he would grant the husband’s application for leave to sell Iona at $1.9 million, discussion ensued between his Honour, counsel for the husband (Mr Brereton) and the wife (who was unrepresented) about the form of the order to be made to give effect to his judgment. The wife expressed some concern about the balance of the sale proceeds, after the discharge of the mortgage to the Westpac Bank, finding their way into the hands of the husband, who was the vendor of the property. After apparently taking some instructions, Mr Brereton then indicated that the husband would “undertake to the court that the balance of the purchase moneys … after discharge of the mortgage … will not be dealt with in any way except after having given seven days written notice to the wife” of particulars of the proposed disposition. Further discussion then transpired between his Honour, Mr Brereton and the wife about the possibilities of the balance of the sale proceeds being held either in a solicitor’s trust account or an account in the names of the husband and wife, and eventually Mr Brereton said this:-

“What I propose is this, your Honour. I have formulated this and I will hand it up in a moment but so that Mrs Rutherford can follow it as well I will summarise what it is: first, a declaration that notwithstanding any previous injunction the husband is at liberty to proceed forthwith with the proposed sale of Iona at a price of $1.9 million upon the terms contained in the draft contract already provided to Mrs Rutherford.
Secondly, an order that upon completion of the sale the net proceeds, after proper adjustments, agents commission and selling costs and the amounts necessary to procure discharges of the mortgages to Westpac and the removal of the three caveats, be invested in an interest bearing deposit in the joint names of the husband and the wife in Westpac at its Sydney office pending further order of the court, the account to require the signatures of both parties to operate it.”

As his Honour there recalls, there was then a short adjournment for the purpose of allowing the wife to peruse the draft order which Mr Brereton had apparently prepared, following which, after some further discussion, it was agreed that the reference to “Westpac at its Sydney office” should be deleted from the order and replaced by a reference to “Westpac Banking Corporation at the corner of King and Castlereagh Streets, Sydney”. The transcript of the proceedings on 20 January, 1994 (at Appeal Book pp.192-3) discloses (although his Honour did not refer to this fact at that point in his judgment) that the King and Castlereagh Streets branch of the Westpac Bank was ultimately chosen because that was where the parties’ joint loan account, secured by the mortgage over the property, was or had been conducted. The wife said, and Mr Brereton for the husband did not challenge this, that that bank was appropriate because it was “the Lending bank … and the protection of the joint signatories is there”. Following that agreement, Rowlands J proceeded to make the order in the final form in which it appears in the records of the Court and which we have quoted in paragraph 9 hereof.

Chisholm J then continued his recital of the relevant facts, including, in somewhat more detail, those which we have already summarised about the husband’s receipt and dissipation of the net proceeds of sale of Iona, in the sum of $422,705.57. In particular, he referred to and quoted a fairly long passage from an affidavit of the wife sworn 11 January, 1996, which appears at Appeal Book pp.232-235. The particular passage quoted by his Honour is paragraph 9 of that affidavit, in which the wife set out, in detail, the effect of a conversation which she said she had with the husband on the telephone on or about 12 December, 1994, after seeing a financial statement then recently filed by him in the property proceedings. The essence of that conversation, as deposed to by the wife, was that when she asked the husband why his Form 17 contained no reference to the sale proceeds of the house, he told her “its gone”, that he had taken it, and that he had lost it all in two nights of gambling at the casino, one in Canberra and the other in Brisbane. When she said to him, at one point:

“You’re not allowed to do that. There’s a Court order. I relied on that order.”,

he responded:-

“Well, bad luck. It’s my money and I couldn’t be bothered waiting around for the Court to decide. There’s nothing to argue about now, so why don’t we just finish it right here and now. There’s nothing left in the kitty.”

His Honour then dealt with some evidentiary issues, which are not relevant to this appeal, and with an issue which was raised at the hearing about the husband’s knowledge of the orders of 20 January, 1994. He concluded his consideration of the latter issue with findings (at Appeal Book pp.21 & 22) that the husband “was in court on 20 January 1994”, that “he was actively involved in the proceedings following the order … to vary the orders” and that “the husband knew perfectly well what the order was, and what it entailed”. Those findings have not been challenged in this appeal.

His Honour then turned his attention to the submissions which had been made to him on behalf, firstly, of the husband, and secondly, the Marshal. He identified two major submissions made on behalf of the husband, who was represented before his Honour, as he was before us on appeal, by Mr Broun, QC, on what we understand to have been a pro bono basis. Those two major submissions were:-

That the order of Rowlands J did not, in terms, require the husband to do anything, or at least nothing sufficiently specific to support a proceeding for contravention; and
That if (contrary to the first submission) there was a contravention by the husband of the order of 20 January, 1994, it could not be described as “a flagrant challenge to the authority of the Court” as required to support a charge of contempt of court under s.112AP.

His Honour identified the major submissions for the Marshal in reply to those of the husband, as being (in summary):-

That when the order of 20 January, 1994 is looked at in the context of the surrounding circumstances, including its drafting by the husband’s then counsel, it required the husband, as the vendor of Iona, to make whatever arrangements needed to be made to ensure that the money from the sale “ended up in the account” referred to in the order, and that what he in fact did (with the money) was “to defy the purpose and intention of the order”, and “frustrated the order” so as to constitute a contempt of the Court within s.112AP.

His Honour then set out (at Appeal Book pp.25-27) his conclusions. He began by summarising his factual findings, as follows (at Appeal Book p.25):-

“First, the respondent knew the meaning and effect of the order at or shortly after the time the order was made on 20 January 1994 and up to and including the time that he withdrew the money, on 26 July 1994. He knew that by having the balance of proceeds paid into the account of his company, rather than the joint account it was supposed to be placed in, he was acting contrary to the orders. He had no reasonable excuse for so acting in breach of the order. He knew that his actions would completely frustrate the purpose of the orders, and frustrate the court in the task of achieving a just resolution of the property proceedings to which he was a party.”

Next, his Honour said that he accepted the submissions made on behalf of the Marshal and rejected those for the husband which, he said, “depend on an approach to the interpretation of both the terms of the orders and the terms of the charge that is unduly technical and inappropriate”. He added that although the order did not expressly state what the husband was to do, “put in its context it is not in any relevant way ambiguous or uncertain”.

His Honour then referred to the form of the charge, and said that when paragraphs (a) and (b) thereof are read together “in the context of the history of the matter … they mean that the respondent, rather than paying the money into the joint account as he was required to do, acted quite to the contrary by paying the money into an account of his own and then taking the money and disposing of it for his own purposes”. He said that this was “a clear breach of the orders, which required that the money be paid into a joint account of the respondent and the wife pending further order of the court”.

His Honour then noted that the husband’s counsel had referred to “the insistance [sic.] the late Hogan J used to place on the desirability of orders explicitly identifying what obligations they imposed”, but then noted that the Full Court in Stavros (1984) 9 FamLR 1025, allowed an appeal from the dismissal by that learned Judge of a contempt application involving an alleged breach of an access order. Hogan J had done so on the basis that the order (which merely provided for the husband to “have access to” the child at specific times, to be exercised by his collecting and returning the child from and to the wife) did not expressly state any obligation of the custodial parent to make the child available. However, as Chisholm J pointed out, the Full Court held that Hogan J was wrong on that point, holding that it was “implicit in the access order that the custodial parent had an obligation to make the child available for access”. His Honour then added (at Appeal Book p.26):-

“While the case is not on all fours with the present case, in my view the obligations on the respondent in this case are at least as clear as the obligations on the custodial parent were in that case.”

His Honour concluded his discussion of this aspect of Mr Broun’s submissions with the statement (at Appeal Book p.26) that “what he [the husband] did was as clear a breach of the orders as can readily be imagined”.

His Honour then turned to consider the submission for the husband that his breach of the order, if it was one, “could not be characterised as a ‘flagrant challenge to the authority of the court’”. After noting that that phrase is not defined in the Act, his Honour referred to the definition of “flagrant” in the Macquarie Concise Dictionary, as “glaring; notorious; scandalous”. He then referred to and quoted a passage from paragraph 561 of the report of the Australian Law Reform Commission on Contempt (ALCR 35) containing its recommendation about the procedure that should be adopted on “the very rare occasions that the conduct of the respondent in contempt proceedings arising out of disobedience amounts to a flagrant challenge of the court’s authority”. Then, after noting the absence of authority on the meaning of the phrase in s.112AP, but observing, on the authority of Ibbotson & Wincen (1994) 18 FamLR 164, that “a single action can constitute a breach of the section” his Honour said that it is “a matter of fact and degree whether a particular case involves such a breach”.

His Honour then concluded his discussion of this issue with the following statement (at Appeal Book pp.26-27):-
“In my view the respondent’s actions fall comfortably within the words of s 112AP. It was quite clear that the whole purpose of the orders was that the proceeds of sale should be applied to the specified payments, and the balance invested in a joint account, to await the final disposition of the property proceedings. The just resolution of the property proceedings depended on this being done. The asset, consisting of the net proceeds of sale, had been the focus of a number of hearings, much discussion, and a number of orders. The respondent’s actions made it impossible for the court to complete its task, and this must have been patently obvious to the respondent as well as everyone else. It seems a natural and apt description of the respondent’s actions, in investing the money in his own account and taking it rather than investing it in the manner and for the purpose ordered by the court, to say they constitute a ‘flagrant challenge to the authority of the court’.”

Accordingly, his Honour stated that he was “satisfied beyond reasonable doubt that [the husband] is guilty of a contempt of court that constitutes a flagrant challenge to the authority of the court”.

THE SENTENCING JUDGMENT

His Honour began his sentencing judgment (at Appeal Book p.29) with a brief reference to his earlier judgment and to the evidence which had subsequently been placed before him on the sanctions hearing. He noted that that evidence dealt “among other things, with questions relating to the husband’s intention and state of mind at the time of the breach”. He further noted that counsel for the husband had not submitted to him that any of that evidence should lead him to reconsider the findings which he made in the contempt judgment, and added:

“… [I]t is difficult to see how such a submission could have been made because the Full Court in Hay [In the Marriage of Hay (1998) 23 FamLR 247] has held that in section 112AP proceedings it is not necessary, in order to prove the breach, to establish that the respondent knowingly breached the order.”

Next (at Appeal Book p.30) his Honour considered the range of possible orders open to him under s.112AP. In so doing, he quoted sub.-ss. (2), (4) and (6) of that section, and touched upon (without deciding) a submission made by counsel for the husband that that section is not an exhaustive statement of the powers available to the Court in dealing with “s.112AP breaches”, because s.35 “creates some wider powers”, the precise extent of which had not been specified.

His Honour then dealt (at Appeal Book p.30) with a submission by Mr Broun, QC, to the effect that his Honour could make an order that the husband “do some form of community service”, pursuant to the power in s.112AP(6)(a) to order “punishment on terms”. In relation to that submission, his Honour said that Mr Broun “accepted that I could not make orders for community service under the provisions of the New South Wales legislation, and thus could not take advantage of the procedures and resources available under that Act”, but had “said I could, in effect, invite the respondent to make a proposal for carrying out such work, provide evidence that it could be done, and provide further evidence by way of a report to the court that it had been done”.

His Honour then made some further reference to some subsidiary submissions made in support of that broad submission by Mr Broun, and against it, by counsel for the Marshal. After stating that he did not “necessarily agree that it is beyond the scope of the provisions to fashion some such scheme”, his Honour observed that “there are numerous practical matters that would need to be attended to if orders were to be made along the lines suggested” (of which he instanced workers compensation cover), which he considered “would cast the court in an inappropriate supervisory role”. He concluded that as “[n]o specific programme was suggested” the proposal was not “appropriate in this particular case, even if community service were otherwise an appropriate order to make”.

His Honour next considered (at Appeal Book pp.31-33) the “principles relating to penalties in cases such as the present”. He cited, with approval, a passage from the judgment of the Full Court in In the Marriage of Cummings (1976) 2 FamLR 11,243 at 11,249 (adopted by later Full Courts in G. & G. (1981) FLC 91-042 and Marriage of Williams (1992) 16 FamLR 217 at 223). That passage (as edited by his Honour) was this:-

“This court has said that punitive powers should be exercised sparingly and only in exceptional circumstances. In deciding whether to impose imprisonment, fine or other penalty, there are a number of factors which the court needs to consider:
(a)the need to consider the parties’ future relationship and the role of counselling;
(b)the need to ensure compliance with a particular order in future;
(c)the need to protect a party from violence or interference;
(d)the need to impose a punishment appropriate to the breach;
(e)the need to uphold the authority of the court to make effective orders.”

His Honour then referred to some other cases which, he said, “assist in identifying relevant matters”, which, he said “include the seriousness of the breach; contrition; repeated or violent breaches; previous good character; pressure that the person might be under … and the effect on children”. He also referred to two particular cases, the facts of which were in some respects similar to those of this case, in each of which the contemnor was sentenced to a term of imprisonment.

Those two cases were Nonemacher (unreported – Coleman J 7 May, 1993) and Lightfoot v Lightfoot (1989) 1 FLR 414. In the former, a husband who failed to comply with an order to pay the wife $26,000 whilst dissipating nearly $83,000, was sentenced to nine months imprisonment in proceedings brought under s.112AD of the Act. In the latter case, in England, a husband had been ordered to pay money he was expected to receive into a joint bank account pending the final hearing of property proceedings. He received £30,000, paid none of it into the account, and withdrew and dissipated (he claimed by gambling) a large proportion of it. He was sentenced to eighteen months imprisonment, which sentence was confirmed on appeal by the Court of Appeal.

His Honour also referred, again, to Hay’s case (supra) and to the fact that in that case the Full Court expressed the view that “if a term of imprisonment is to be imposed as the penalty for such an offence [a breach of an injunction, prosecuted under s.112AP] there should, at least as a general rule, be a finding that there was a deliberate intention to breach the injunction”.

His Honour then turned to examine the facts of the case, and the circumstances which the husband’s counsel had urged as constituting mitigating circumstances. At Appeal Book pp.33-35, he summarised the judgment of Coleman J in the property proceedings between the parties, which judgment had not been before him at the time of his delivery of the contempt judgment. As we have already summarised the more significant aspects of Coleman J’s judgment in paragraphs 16 and 17 hereof, it is not necessary to reiterate any of that detail here. Chisholm J concluded his analysis of that judgment with the observation (at Appeal Book p.35) that it was “a very significant matter in determining the actual consequences of the husband’s breach of the order”.

His Honour next addressed the issue of the husband’s intention and state of mind. After referring to and analysing the evidence on that issue (including the evidence contained in a report of a psychiatrist, Dr Fisher, who treated the husband from 8 March, 1995) he found (at Appeal Book p.36) that it was likely that the husband was suffering from depression in 1994, but also found (at Appeal Book p.37) that the husband “knew the substance and meaning of the orders” at the time of the breach. He rejected (at Appeal Book p.37) the husband’s evidence that at the time of the sale of Iona he had forgotten about the orders. His Honour did so for a number of reasons, which may be summarised as follows:-
That it seemed inherently unlikely, given the nature of the orders and the context in which they were made;
That the husband took the money in cash, notwithstanding that this caused some delay and cost him $400, strongly suggesting that “he wished to avoid the possibility that the money could be traced”; and
That it was inconsistent with the wife’s evidence about what he said to her during the telephone conversation in December, 1994 to which we have earlier referred, which evidence, for reasons stated, his Honour accepted.

His Honour concluded his consideration of that issue with the following findings (at Appeal Book p.38):-

“I find, therefore, that whatever his precise intentions at the time, he was aware of the order and that his unusual way of withdrawing it was part of some plan to conceal his use of the money. He knew about the order and he intended to breach it at the time he did so. He committed the act with a deliberate intention to breach the order. This finding, of course, distinguishes the case from the facts of the matter of Hay.”

His Honour next turned his mind (at Appeal Book p.38) to the question “whether or to what extent the husband’s action can be said to have been to spite the court or deny the wife’s claim”. After referring to various aspects of the husband’s evidence, and to the submissions of counsel, his Honour made the following findings (at Appeal Book p.39):-

“… [I]t seems to me that the husband’s motives were probably both unclear and mixed but I am satisfied that his anger at the wife and the court played a part in his thinking at the time of the breach.
His thinking on these matters was, I think, clouded by anger, frustration, confusion and depression . ...
To sum up, the husband’s actions were a deliberate breach, in part the act of a man thumbing his nose at the Court, to quote from Mr Roberts’ submission and, in part, the desperate and irresponsible act of an angry and depressed man at the end of his tether.”

Under a heading “Where the money went” his Honour considered the question whether the husband in fact lost the money gambling “to try to double the money … in order to increase his assets” as he claimed. After noting that Coleman J was “far from convinced that the money had gone, and thought it might re-emerge”, his Honour said that he was unable to conclude whether the husband did spend the money gambling or whether he “has it available”. However, he expressed the view that this matter was irrelevant to the question of penalty, except on the question whether a fine might be appropriate. In that respect, he then referred to the schedule of assets prepared by the husband (which is at Appeal Book p.505), which he had sworn to be correct, on the basis of which his Honour found that “his financial position is extremely fragile”.

His Honour then considered the question of whether any harm was actually caused to the wife by the husband’s actions, and concluded that it was not (because of Coleman J’s conclusion in the property proceedings), but he also found that the husband did not foresee that consequence when he took the money.

Finally (at Appeal Book pp.41-43) his Honour dealt with a range of other matters which the husband’s counsel had suggested as being relevant. He referred to the husband’s general good character, with no previous criminal record; the fact that the offence is unlikely to be repeated; the husband’s expressions of remorse and regret; and the “stress and depression and losses suffered by the husband in the course of this unhappy saga”. He said that although these matters were relevant, they “should not be given excessive weight”. He also referred to the possible effect of imprisonment on the husband’s relationship with the children of the marriage, which he said “while a relevant factor, does not distinguish his from the situations of many other people”. He also mentioned again “a number of mitigating factors”, namely the absence of any detriment ultimately caused to the wife, the absence of any need to ensure future compliance with the order, and that no violence towards or interference with any other person was involved in the breach.

His Honour then came (at Appeal Book pp.41-42) to what he described as “the most difficult part, namely to balance these matters out and reach a conclusion”. After concluding that “a fine is not appropriate”, that “[c]ommunity service orders are not practicable” and that “[p]eriodic detention is not appropriate, even it were available to the court”, he referred again to the necessity to take into account the matters referred to in paragraphs (d) and (e) of the above quoted passage from Cummings (supra) and that this was “a deliberate taking of a large sum of money in clear violation of the court’s orders and in a way that had the potential to frustrate the court’s task although … it did not in fact do so”. He adopted a remark of Coleman J in Nonemacher (supra) about the necessity “to give a signal to the community that the court expects its orders to be obeyed and that flagrant breaches will be regarded extremely seriously”. In relation to the need to uphold the authority of the Court, he cited a passage from the judgment of Smithers J in G. & G. (supra) at 76,374, which we need not repeat, but which was clearly relevant.

Finally, in a passage (at Appeal Book pp.42-43) which it is unnecessary to repeat, his Honour again spoke of balancing various competing factors which he had already identified, and said that he did not “underestimate the impact that a term of imprisonment may have on a person”. However, (somewhat reluctantly we feel) his Honour announced that he concluded it was “necessary to impose a term of imprisonment”, but said that because of the mitigating circumstances “that term will be much less than it otherwise would be, given a breach of the kind before the court”. He then announced his decision that the husband should be imprisoned for a term of three months, and made his orders accordingly.

His Honour then considered an application by the Marshal that the husband pay the Marshal’s costs of the proceedings, and eventually decided that he was not satisfied that it was appropriate to make any order for costs in favour of the Marshal. Accordingly, his Honour made no order as to costs. That rejection of the Marshal’s costs application is also the subject of the Marshal’s cross-appeal, to which we shall subsequently refer.

THE APPEAL AND CROSS-APPEAL

The grounds of appeal relied upon by the husband in his Notice of Appeal filed on 12 November, 1998, which appear at p.3 of the Appeal Book, are as follows:-
“1.       The trial judge was in error in holding that the appellant’s actions involved a flagrant challenge to the authority of the court.
2.        The trial Judge was in error in holding that the Community Services Orders Act 1979 (NSW) was not available to him to make an order.
3.        The Judge was in error in holding that a community service order framed by the court and supervised by the Court was impracticable.
4.        Accordingly the Judge failed to give proper consideration to the appropriateness or otherwise of a community service order in the circumstances either under the State law by reliance on the Cross-vesting scheme or alternatively one framed by the Court itself.
5.        The sentence imposed was in the circumstances, excessively severe
6.        The judge erred in attaching any significance to the suspicion that the money may not have been disposed of.
7. The judge failed to direct his considerations to sub-section 112AP(6) to punish upon terms or to suspend punishment.
8.        Fresh evidence will be sought to be led to deal with two issues:
(a)The feasibility of a Community Service type of order framed by the court and supervised by the court;
(b)The impact which is likely to occur on the husband by the term of imprisonment imposed.”
The grounds of the Marshal’s cross-appeal as set out in the Notice of Cross-Appeal filed on 1 December, 1998 (at Appeal Book p.5) are as follows:-

“1. That the sentence was manifestly inadequate to reflect the seriousness of the contempt of which the respondent was found guilty
2. Since the applicant was successful in the application costs should follow.”

In relation to the grounds of appeal, grounds 2, 3 and 4 are related, and we shall consider them together. The same applies to grounds 5, 6 and 7. Grounds 1 and 8 will each be dealt with separately. As ground 1 of the cross-appeal deals with the same issue (the severity of the sentence) as grounds 5, 6 and 7 of the appeal, we shall deal with it in conjunction with those grounds of appeal. As ground 2 of the cross-appeal deals with a separate issue of costs, we shall deal with it separately, at the end of our consideration of all the other substantive grounds of appeal and cross-appeal.

Ground 1 of the Appeal

1. The trial judge was in error in holding that the appellant’s actions involved a flagrant challenge to the authority of the court.

Under this ground, senior counsel for the husband sought to advance two main propositions, namely:-
That the trial Judge erred in concluding, in the contempt judgment, that the husband’s conduct constituted a contravention of the order of 20 January, 1994; and
That even if there was a contravention of the order, his Honour erred in that judgment in concluding that the contravention was one which involved “a flagrant challenge to the authority of the Court” within the meaning of s.112AP(1)(b) of the Act.

We entertain strong doubts, which we expressed during the course of the appeal hearing, as to whether it is strictly open to the husband to advance the first of those two main propositions under this ground as drafted. However, as no objection was taken by senior counsel for the Marshal to that course, and because of the conclusion which we have ultimately reached in relation to that proposition, it is unnecessary for us to express a concluded view about that technical aspect of the matter.

The essence of the argument for the husband in support of the first proposition advanced under this ground, was that the order of 20 January, 1994 did not really oblige the husband to do anything or, to put it another way, that there was nothing which the husband did or did not do which the order expressly forbad him from doing or obliged him to do.

In advancing this proposition, Mr Broun, Q.C., for the husband stressed that the order, by its terms, provided only that upon completion of the sale of Iona, the net proceeds “be invested” in the interest bearing deposit referred to, and not that “the husband cause the net proceeds” to be so invested. He also relied upon the fact that the order said the funds were to be invested in a deposit in the joint names of the parties, and that if it imposed any obligation upon the husband it imposed a like obligation upon the wife, and the husband could not unilaterally cause the funds to be deposited in the parties’ joint names without the active cooperation of the wife. Although he did not say this specifically, we take counsel’s inference from this to be that in the absence of evidence that the wife did all she could do to facilitate the investment of the funds to the joint account (as to which there was simply no evidence) the husband could not be found to be in breach of whatever obligation (if any) the order placed upon him.

With all respect to counsel, we think this argument is fallacious, and excessively technical. It overlooks the realities of the situation in which the order of 20 January, 1994 was made.

The husband was the sole registered proprietor of Iona. He had sought and obtained the leave of the Court to sell it (effectively, as a variation to the previous injunction which restrained him from dealing with it). There were pending proceedings in the Court between the husband and wife in which he sought payment to him of 70% of the net sale proceeds of that property, and the wife sought the payment to her of 80% of those proceeds. At the time the orders were made it is clear that the wife was concerned about the possibility of the husband’s getting his hands on the entire net sale proceeds before the determination of the property proceedings, and that the Court (Rowlands J) was concerned to protect her against that possibility. The husband was, as the trial Judge found (at Appeal Book p.21), present in court at the time the order was made and it was his then counsel, Mr Brereton, who was primarily responsible for the drafting of it. The King and Castlereagh Streets branch of the Westpac Bank was chosen as the place for the interest bearing deposit to be made because the parties already had a joint account (albeit in debit) at that branch. That fact is not only clear from the transcript of the proceedings on 20 January, 1994, but is confirmed by the bank documents which appear at Appeal Book pp.202-3.

Having regard to that context, all of which was known to the husband, we think it is perfectly clear to anyone, including to him, that the terms of the order of 20 January, 1994 placed him under two specific obligations, one positive and the other negative. The first and positive obligation was to do all that he could do to ensure that the net sale proceeds of Iona were deposited to an interest bearing account in the joint names of the spouses with the King and Castlereagh Streets branch of the Westpac Bank. The second and negative obligation was to do nothing to prevent those moneys from being available to be dealt with by a further order of the Court.

On the evidence, the husband clearly and deliberately breached both of those obligations. Firstly, when he received into his control the net sale proceeds of Iona, he breached his positive obligation under the order by causing those proceeds to be deposited, not to any joint account of the parties with the stated bank, but to an account of Huxide Pty Ltd with the Commonwealth Bank, at Woollahra. Secondly, a few days later, he breached his negative obligation under the order by withdrawing the entire net sale proceeds from that account in cash and (according to him) gambling them away at two casinos.

We suppose it is arguable that the second, and negative, obligation imposed on the husband by the orders was narrower than we contend above (namely, only to do nothing to remove the moneys, or cause them to be removed, from the stipulated account “pending further order of the Court”) and that therefore the husband’s withdrawal and dissipation of the funds was not, strictly speaking, a breach of that negative obligation, since the money was never deposited to that account and could not therefore be removed from it. However, even if that argument were accepted, the actions of the husband in withdrawing and dissipating the money as he did constitute circumstances of aggravation in relation to his breach of his positive obligation to ensure the funds were deposited to the stipulated joint account. The clear purpose of the imposition of that positive obligation upon him was to preserve the funds until the Court decided what should happen to them. The husband’s clear motive, in breaching that obligation, was to facilitate his frustration of that purpose, by removing a potential obstacle to his getting his hands on the money without the benefit of a court order.

We think it nothing to the point that the order may also have imposed some obligation upon the wife to join the husband in doing whatever was necessary to be done to cause the funds to be deposited to the joint account. She was never given the opportunity to comply with that obligation, because the husband, into whose hands the funds had necessarily to pass from the purchaser before they could be dealt with in accordance with the order, chose to short circuit the process by diverting them to his own use. In any event, the wife was not the person charged with contempt. Moreover, if, as the evidence suggested, the joint account was already in existence, it would have been possible for the husband to deposit the funds to that account unilaterally, and without any signature by the wife.

Mr Broun, Q.C, sought, before us, as he apparently did before the trial Judge, to distinguish the case of Stavros (supra) on the basis that the order in that case for the “collection” of a child by the father for access necessarily implied that the collection would not be prevented. We think the case is indistinguishable from the present one. Just as the Full Court in that case considered that it was “implicit in the access order that the custodial parent had an obligation to make the child available for access” so, in this case, we consider that it is implicit in the order that the funds “be deposited” that the husband, through whose hands the funds were necessarily to pass, had an obligation to ensure that they were so deposited.

For those reasons, the first proposition advanced by the husband’s counsel in support of this ground is rejected.

The second proposition advanced in support of this ground, and that which we perceive as lying at the heart of the ground, is that the husband’s contravention of the order (as found by his Honour and upheld by us) did not constitute a “flagrant challenge to the authority of the Court” within s.112AP(1)(b) of the Act.

In support of this proposition, senior counsel for the husband submitted that the husband’s breach was neither “flagrant” nor “a challenge to the authority of the Court”. He drew upon a definition of “challenge” in the Macquarie Dictionary (viz. “a call to engage in a contest of skill or strength etc”) to argue that, contrary to the dicta in Hay (supra) at 257 (paragraph 56), a deliberate intention to break the Court’s order is a necessary component of such a challenge. Without such an intention, he argued, there can be no “challenge” because there must be an object of the challenge to which it is specifically directed, in this case the Court.

We do not accept that submission. An alternative definition of “challenge” found in the Macquarie Dictionary is “a calling to account or into question”. For a breach to come within the section it must be “a flagrant challenge to the authority of the Court” (emphasis added). It does not need to be a challenge directed to the Court, in the sense proposed by Mr Broun. Any act which may properly be described as “flagrant” (which only means “glaring, notorious or scandalous”) and which calls into question the authority of the Court, expressed through its relevant order, may constitute a contempt, within the meaning of the section.

We therefore consider that there is insufficient doubt about the correctness of the dicta of this Court in Hay (supra) to warrant a reconsideration of it in this case. In any event, it would avail the husband nothing to have us overturn that decision on this point, since the trial Judge specifically found, in the sentencing judgment (at Appeal Book p.38) that the husband did have a deliberate intention to breach the order, and in our view that finding was open to his Honour on the evidence in the proceedings, and his primary findings based on that evidence.

Nor does it appear to us to matter that his Honour made that finding in the sentencing judgment and not in the contempt judgment. There is only one order, against which the husband appeals, and that is the sentence. In considering the validity of that order this Court is entitled to have regard to both the judgments which his Honour delivered in support of the sentence. In reality, they are a single judgment in two parts, rather than two separate judgments. From his Honour’s perspective, it was unnecessary (because of Hay’s case) to make a finding in the contempt proceedings about the husband’s intention to breach the order, but necessary to do so (because of the same case) in the sentencing judgment if he were to impose a sentence of imprisonment. But if the finding also supports his Honour’s conclusion in the contempt judgment, then we believe this Court is entitled to have regard to it for that purpose.

The second proposition advanced in support of this ground is therefore also rejected, and accordingly this ground is not made out.

Grounds 2, 3 and 4 of the Appeal

2.        The trial Judge was in error in holding that the Community Services Orders Act 1979 (NSW) was not available to him to make an order.
3.        The Judge was in error in holding that a community service order framed by the court and supervised by the Court was impracticable.
4.        Accordingly the Judge failed to give proper consideration to the appropriateness or otherwise of a community service order in the circumstances either under the State law by reliance on the Cross-vesting scheme or alternatively one framed by the Court itself.

These grounds all attack his Honour’s failure to make either a “community service order” under the Community Service Orders Act 1979 (NSW) or an order of a similar kind imposing on the husband an obligation to perform some kind of specific community service, instead of a term of imprisonment. Ground 2 attacks that failure on the basis of alleged error of law, while grounds 3 and 4 attack it on the basis of alleged errors in the exercise of discretion.

Ground 2 faces an initial difficulty, namely that, as noted by the trial Judge in the sentencing judgment (at Appeal Book p.30), it was conceded by senior counsel for the husband before his Honour that his Honour “could not make orders for community service under the provisions of the New South Wales legislation, and thus could not take advantage of the procedures and resources available under that Act”.

Despite that concession, it is probably open to the husband to argue, on appeal, that as a matter of law the concession was wrongly made, and therefore wrongly accepted and acted upon by the trial Judge, since it seems to be a purely a question of law the answer to which would not depend upon evidence which might have been called but for the concession.

Senior counsel for the husband argued that the Community Service Orders Act 1979 (NSW) (“the CSO Act”) is an act of general application which is “facilitating” or “empowering” and “increases the powers and options of Courts” in dealing with penalties. He accepted (in line with the decision of this Court in In the Marriage of Schwartzkopf (1992) 15 FamLR 545 at 553) that proceedings for contempt of court are not criminal proceedings, but civil proceedings. However, he submitted that a community service order is “one of the correctional facilities available under New South Wales law” and “[a]ccordingly Section 120 of the Constitution makes it available as a potential order for any proceeding under a Federal law”, including a proceeding for contempt under s.112AP of the Act.

The latter submission is rather at odds with the decision of the New South Wales Court of Appeal in The Registrar of the Court of Appeal v. Maniam (1992) 26 NSWLR 309, in which it was held that the express statutory provisions of the CSO Act relating to community service are not available to that court in proceedings for contempt of it. It would be a strange thing, indeed, if the provisions of that New South Wales legislation, which are not available to the Court of Appeal of that State in dealing with a contempt of that court, were yet available to a Federal Court, like the Family Court of Australia, in dealing with a contempt of that court.

Nor do we think that the argument derives any support from s.120 of the Constitution. That section provides:-

“120. Every State shall make provision for the detention in its prisons of persons accused or convicted of offences against the laws of the Commonwealth, and for the punishment of persons convicted of such offences, and the Parliament of the Commonwealth may make laws to give effect to this provision.”

In the first place, that section applies only to “persons accused or convicted of offences against the laws of the Commonwealth” and, in accordance with Schwartzkopf (supra) contempt of court is not “an offence against the laws of the Commonwealth”. Furthermore, the section itself does not empower a Federal Court, engaged in the sentencing of a Commonwealth offender, to apply, in that process, a State law relating to the punishment of offenders, nor does it create any right in the citizen convicted of a Commonwealth offence to claim the benefit of such a State law in his/her sentencing process. What the section does is to oblige the several States to make provision for the detention and punishment of such offenders, and enables the Commonwealth Parliament to make laws to give effect to that obligation. It thus affects a matter lying within the residuary power of the States. But until the Commonwealth Parliament enacts a law to give effect to the obligation created by the section, a State law relating to the punishment of offenders against State laws does not apply to Commonwealth offenders; see The Queen v. Turnbull & Anor, ex parte Taylor (1968) 123 CLR 28 at 37, per Barwick CJ.

Senior counsel for the Marshal (Mr Roberts, Q.C.) submitted (again, in reliance upon Schwartzkopf (supra)) that Part XIIIA of the Act is not part of the criminal law of the Commonwealth, but “a self-contained code”. Accordingly, he submitted, “general legislation, whether State or Federal, relating to the sentencing of offenders, can have no application to persons dealt with under Part XIIIA unless specifically applied by that Part” (Submissions in Reply of the Respondent, paragraph 4). We agree with and accept that submission.

Mr Roberts further submitted that although s.112AG of the Act empowers a court exercising jurisdiction under s.112AD of the Act to adopt sentencing options, including community service orders, available under the law of a State or Territory when exercising jurisdiction within that State or Territory, that power is contingent upon an arrangement having been made, between the Commonwealth and that State or Territory, pursuant to s.112AN of the Act, “for or in relation to the carrying out of sentences imposed and orders made of that kind” under Division 2 of Part XIIIA (which contains ss.112AD to 112AO). We accept that submission. However, as Mr Roberts further pointed out (and Mr Broun, for the husband, conceded) no such arrangement has been made between the Commonwealth and the State of New South Wales. Accordingly, those sentencing options are not available to a court exercising jurisdiction under s.112AD of the Act in the State of New South Wales.

In any event, as Mr Roberts further submitted, even if such an arrangement had been made between the Commonwealth and New South Wales, it would make those sentencing options available only if the court were exercising jurisdiction under s.112AD, which was not the case here. Section 112AP, under which the husband was dealt with in this case, is in Division 3 of Part XIIIA, which in effect provides a complete code for dealing with contempts of the Court which is separate from that provided for dealing with contraventions of court orders which do not amount to contempt.

For all of the above reasons, we reject this ground of appeal.

Before leaving this ground of appeal, it is appropriate to refer to the fact that, at the hearing of the appeal, senior counsel for the husband made an oral application to the Court (the making of which, in that form, was not objected to by senior counsel for the Marshal) to adduce further evidence in the form of an affidavit by one Neil Guy, the Acting Director of Sentence Administration in the New South Wales Department of Corrective Services. In that affidavit Mr Guy purports to give evidence about the availability of correctional facilities of the State of New South Wales for the punishment of offenders convicted under Commonwealth laws, including the facilities for supervision and enforcement of community service orders.

With respect to Mr Guy, that is evidence upon what is essentially a question of law, as to which evidence is not admissible, it being for the Court to determine what the law is. In any event, Mr Guy does not purport to say that a person adjudged guilty of contempt of court under s.112AP of the Act may be subject to a community service order under the CSO Act. At best for the husband his evidence may be interpreted as being to the effect that, as a matter of practice, if such an order were made, it would probably be treated as a valid order by New South Wales Correctional Officers. That is irrelevant to the issue in this case, and that is whether the Court has jurisdiction to impose a community service order, valid and enforceable under the CSO Act, upon a person adjudged guilty of contempt of the court. We have concluded that it does not.

Mr Guy’s understanding of the position, as deposed to in his affidavit, may well be perfectly correct in respect of persons “convicted under Commonwealth law”. Such persons are usually sentenced under the Crimes Act 1914 (Cth) (“the Crimes Act”). Although that Act, in the main, provides its own code for the sentencing of Federal offenders (R. v. Paull (1990) 20 NSWLR 427 at 430), s.3B thereof provides for the making of arrangements by the Governor-General with the States for, inter alia, the making available of facilities for community service orders. Such an arrangement has been made with the State of New South Wales (Gazette S293. 12 November, 1990). However, as we have previously indicated, the Act has its own code for sentencing contemnors which are not part of the criminal law of the Commonwealth, and accordingly the arrangement under s.3B of the Crimes Act has no application in the context of proceedings for contempt under the Act.

For those reasons, the application of the husband to adduce further evidence in the form of the affidavit of Mr Guy is rejected.

For completion, we should mention the fact that in his submission on this ground Mr Broun, Q.C., sought to place some reliance upon the Jurisdiction of Courts (Cross-Vesting) Act 1987 (NSW). However, since we reserved our judgment in this case the High Court has delivered its judgment in Re Wakim; Ex parte McNally & Anor [and Related Cases] [1999] HCA 27; (1999) 73 ALJR 839 declaring invalid so much of the cross-vesting scheme as purported to confer jurisdiction in State matters on Federal courts. Accordingly, no support for the application of the CSO Act to proceedings in this Court may now be obtained from that source.

Grounds 3 and 4 may, we think, be fairly shortly disposed of. They allege error by his Honour in failing to himself formulate a scheme whereby the husband might provide some form of appropriate service to the community, rather than serve a term of imprisonment, or in failing to invite the submission to him on the husband’s behalf of details of such a scheme (with the granting of any necessary adjournment to allow that to be done). Although reliance was not specifically placed, in this regard, upon the decision of the New South Wales Court of Appeal in The Registrar of the Court of Appeal v. Maniam (supra), that decision may be seen as providing some kind of precedent for the fashioning of an order in the nature of a community service order as punishment for a contempt of court, notwithstanding that the provisions of the CSO Act were not available to the Court in those proceedings.

However, in our opinion Maniam’s case is distinguishable from the present case because it is clear from the judgment of Kirby P. (as his Honour then was) at 319, that prior to judgment being delivered the contemnor (a medical practitioner) placed before the Court a specific proposal that he would, if accepted by the Court, perform community service at the Liverpool Hospital in Sydney, together with a letter from the Liverpool Health Service indicating its willingness to accept voluntary service by the contemnor at its emergency department, on Sundays from 9am to 1pm. On the basis of that specific proposal the Court fined the contemnor $10,000, but ordered that the fine be suspended upon his undertaking to perform 100 hours of voluntary service as a medical practitioner at the Liverpool Hospital at times and upon duties reasonably directed by the Director of Medical Services of that hospital, and cause to be provided to the Court, by a specific date, a certificate from the Director certifying his satisfactory performance of that service.

In the present case, the husband put no specific proposal to his Honour for any particular form of community service to be undertaken by him, and adduced no evidence from any organization prepared to accept, supervise and ultimately certify its satisfaction with, any such service to be performed by him. On the contrary, as his Honour recorded in the sentencing judgment (at Appeal Book p.30) the husband’s counsel submitted that his Honour could “invite the [husband] to make a proposal for carrying out such work, provide evidence that it could be done, and provide further evidence by way of a report to the Court that it had been done”.

In our view, it was not for his Honour to invite the husband to put forward a specific proposal in this respect. The matter had been adjourned from 6 August, 1998 (when his Honour delivered the contempt judgment) to 9 October, 1998, for the very purpose of the sanctions hearing. It was for the husband to put before his Honour, at that hearing, whatever evidence he or his advisers considered relevant to the question of sentence, including any proposal in relation to community service which he wished the Court to consider as a sentencing option. There was ample time for him to formulate any such proposal and marshal the necessary evidence in support of it in the period of over two months which elapsed between 6 August and 9 October, 1998.

Furthermore, unlike Dr Maniam, the husband in this case is a builder, not a duly qualified and licensed medical practitioner. There are obviously more practical difficulties in the way of formulating, organizing and giving effect to a satisfactory form of community service order in the case of a builder than in the case of a doctor. In the case of the former, there are issues about workers compensation, public liability insurance, and other forms of insurance to be considered, as well as issues about who would supervise and certify satisfactory completion of any work undertaken by the husband pursuant to any such order. His Honour referred to these practical issues in the sentencing judgment (at Appeal Book p.31) and stated that in light of them such an order “would cast the court in an inappropriate supervisory role, which would be difficult to justify having regard to its limited resources, lack of experience in such matters and the pressure of other work”. He therefore concluded that, no specific program having been suggested by the husband, “[a]s a practical matter ... I do not think that Mr Broun’s proposal is appropriate in this particular case”.

Not only do we consider that that conclusion was one which was open to his Honour in all the circumstances, it is a conclusion with which we are in entire agreement. Accordingly, these grounds are also rejected.

Grounds 5, 6 and 7 of the Appeal and Ground 1 of the Cross-Appeal

5.        The sentence imposed was in the circumstances, excessively severe.
6.        The judge erred in attaching any significance to the suspicion that the money may not have been disposed of.
7. The Judge failed to direct his considerations to sub-section 112AP(6) to punish upon terms or to suspend punishment.
1.        That the sentence was manifestly inadequate to reflect the seriousness of the contempt of which the respondent was found guilty.

Ground 5 of the appeal and ground 1 of the cross-appeal are directly contradictory of each other, and clearly involve consideration of the same issues. They may therefore conveniently and ought properly be dealt with together. Grounds 6 and 7 of the appeal, although subsidiary to ground 5, raise two particular issues which it is convenient to dispose of before turning to the fundamental issue of the severity of the sentence.

In support of ground 6, counsel for the husband submitted (Written Outline of Submissions at p.8):-

“Although the trial Judge says that what the husband did with the money is irrelevant (A B 40) it none the less seems that that was the crucial factor in the decision on guilt and on penalty.”

He added a reference to a passage in R. v. Selling (1913) SR (NSW) 628 to the effect that in imposing sentence “the Court should act on all the known circumstances of the case and not increase the sentence because of suspicion”.

There is absolutely nothing in his Honour’s judgment to indicate that in arriving at the sentence (or, indeed, finding the husband guilty of contempt) he attached any significance whatsoever to any suspicion which he may have had that the husband had not actually gambled away the $400,000 as he claimed.

The only two parts of the appeal record to which Mr Broun directed our attention in support of this ground of appeal were a passage in the transcript of the sanctions hearing on 9 October, 1998 (at Appeal Book p.326) and a passage in the sentencing judgment (at Appeal Book pp.39-40). In our view, however, neither passage gives any support to this ground.

As to the first, the particular statement by the his Honour (at about lines 22 to 24 on p.326 of the Appeal Book) was clearly made in the course of argument by counsel for the husband, in order to evoke a response from counsel on an issue which had occurred to his Honour at that juncture as being possibly relevant. That issue was whether, if he were to find that the husband had the money “stashed away somewhere”, an order designed to coerce him into producing it might not be appropriate. The issue so raised was then addressed by the husband’s counsel and apparently disposed of. What his Honour said did not even amount to a tentative expression of a conclusion that the husband did have the money “stashed away” (which would not have any significance in that context, in any event) but was merely a hypothetical statement made to ensure that counsel made submissions on a point of possible relevance, as we have already explained.

As to the passage in the sentencing judgment, all it indicates is that his Honour considered the question of whether the husband might still have the missing funds available to him because it was a topic which was the subject of submissions by counsel. He concluded that he was unable to make a finding one way or the other about that. However, he then proceeded to identify what he saw as the relevance of this issue in the following passage (at Appeal Book p.40):-
“With one possible exception, however, this matter is irrelevant to the question what penalty should now be imposed. The exception is that the question whether a fine is appropriate might be affected by whether the husband has funds available to pay it.”

He then proceeded to refer to the evidence about the husband’s financial circumstances, and concluded that he has “minimal assets” and that “his financial position is extremely fragile”.

Thus his Honour’s own words make it clear, contrary to the submission in support of this ground, that he did not regard the question of what the husband did with the money as crucial to his decision on penalty. For reasons which we have given earlier, the fact that the husband dissipated the money (whether in gambling or otherwise) was relevant to the issue of contempt, because the order imposed on him not only an obligation to place the money in the nominated bank account, but also to preserve it pending further order of the Court. His dissipation of it was a clear breach of the latter obligation.

In support of ground 7, Mr Broun submitted that his Honour failed to consider imposing a fine, payable by instalments, which would amount to “punishment upon terms”, within s.112AP(6)(a). In response to that submission, Mr Roberts submitted that the trial Judge, in his judgment (at Appeal Book pp.30-33 and 42-43) considered the appropriateness of all the sentencing options, and concluded that in all the circumstances of the case a term of imprisonment was the appropriate penalty. We agree with and accept that submission. Although his Honour did not specifically refer to the option of a fine payable by instalments, he concluded (at the top of p.42 of the Appeal Book) that a fine was not appropriate. In our judgment, that was a conclusion which was well open to his Honour on the facts of this case, as found by him. It follows that if he considered a fine to be inappropriate, there was no call for him to consider the more lenient option of a fine payable by instalments. This ground is therefore also rejected.

In support of his contention, in ground 5, that the sentence imposed by his Honour was “excessively severe”, Mr Broun, whilst acknowledging all the limitations upon the power of an appellate court to interfere with an exercise of discretion by the trial Judge (House v The King (1936) 55 CLR 499 at 504-5), relied upon the following statement by Jordan CJ, speaking of the approach to be adopted by the Court of Criminal Appeal to the issue of severity of sentence, in R v. Geddes (1936) 36 SR (NSW) 554 at 556:-

“If no wrong principle has been applied, the position is somewhat analogous to that which arises when, in a case in which no definite measure of damages exists, it is contended, before a Court of Appeal, that damages awarded by the Jury are inadequate or excessive. It has been said that, in such a case, the rough rule is that the verdict should be set aside if the Court cannot find any reasonable proportion between the amount awarded and the loss sustained. The analogy is not exact; but I think that a Court of Criminal Appeal should intervene if the sentence appears to be out of reasonable proportion to the circumstances of the crime, having regard to the facts proved in evidence at the trial; but before the Court is satisfied that such an absence of due proportion exists, it should make the fullest allowance for the consideration that the trial judge has had an advantage denied to it, namely, that he has seen the witnesses and, therefore, that he has had an opportunity of forming impressions which no perusal of the cold print can afford.”

Mr Broun submitted that the sentence of three months imprisonment is “out of reasonable proportion to the circumstances” of the husband’s contempt in this case. The circumstances upon which he laid some stress in support of that submission were the following:-

That the events occurred in the context of protracted and stressful Family Court proceedings;
That the trigger for the husband’s conduct was “the terrible sequence of events in this court”, which we take to be a reference to the fact that an injunction was granted, on the wife’s application, against the sale of the property at a figure which ultimately turned out to be a very favourable one to the parties, which event caused substantial loss to the parties;
That ultimately, as Coleman J’s judgment showed, only the husband was injured by his actions, since the wife would have been entitled to none of the money which he dissipated because of her undertaking as to damages;
That as the evidence of Dr Fisher showed, and his Honour accepted, the husband was depressed at the time; and
That the husband was otherwise of good character.

In answer to those submissions, Mr Roberts submitted that his Honour did take into account all of the matters referred to by Mr Broun in coming to his conclusion that a term of imprisonment was the appropriate punishment for the husband’s contempt. We accept that submission which is borne out by our analysis of the sentencing judgment contained in paragraphs 35 to 51 hereof.

In further answer to the submissions of counsel for the husband, and in support of his contention, in ground 2 of the cross-appeal, that the sentence, far from being “excessively severe” was “manifestly inadequate”, Mr Roberts relied upon several matters.

Firstly, he pointed out that the order which the husband breached was made at his instigation. He submitted that the proposition that the placement of the sale proceeds in a joint account of the parties would safeguard the funds pending the Court’s determination of the property proceedings, was advanced on the husband’s behalf in order to persuade the Court to permit the husband to sell the home. We agree with that submission.

Secondly, he referred to his Honour’s findings (at Appeal Book p.38) that the husband deliberately intended to breach the order, and (at Appeal Book p.39) that his actions were “in part the act of a person thumbing his nose at the court”. We agree that those were significant findings by his Honour on the issue of sentence.

Next, Mr Roberts pointed out that his Honour said (at Appeal Book p.43) that the term of imprisonment he was about to impose was much less than it would otherwise have been by reason of the mitigating circumstances which he had earlier identified, and which we have referred to earlier in this judgment in summarising his Honour’s sentencing judgment. However, Mr Roberts submitted that some of those circumstances which his Honour had identified as mitigating were not truly of that character, but were, on the contrary, circumstances of aggravation. In particular, he submitted that his Honour was in error to regard the fact that the husband’s behaviour was “the desperate and irresponsible act of an angry and depressed man at the end of his tether” as a mitigating circumstance. He contended that if the husband was indeed angry and depressed, that was not something which arose suddenly after the sale of the property, but from the circumstances which occurred previously, namely the restraint of the earlier sale and the inability to achieve a subsequent sale except at a much lower price. Accordingly, it was submitted, his Honour’s findings about the husband’s state of mind were consistent with his having formed the intention to appropriate the net sale proceeds to his own use at or before the time when the Court’s order permitting the sale was made, which would be a circumstance of aggravation.

We do not accept the latter submission. His Honour made no finding about when the husband became angry and depressed, his only finding being that he was in that state when he breached the order. Doubtless it was not a state which he entered suddenly, but rather gradually over a period of time. In the absence of a specific finding by the trial Judge we think it would be an error for us to conclude that the husband’s anger and depression preceded the order of 20 January, 1994, or that he had formed the intention of appropriating the net sale proceeds to his own use at or before the time of the making of that order.

The balance of Mr Roberts submissions in support of the cross-appeal centred upon the “deterrence” and “denunciation” purposes of sentencing, and are conveniently summarised thus in paragraphs 8 to 10 of his Written Outline of Submissions:-

“8.       The primary purpose in punishing contemnors is to deter the contemnor and others in the future from committing like contempts and to denounce the conduct concerned in an appropriate way – DPP v John Fairfax & Sons Ltd (1987) 8 NSWLR 732 at 741. The element of general deterrence and denunciation is particularly important to courts such as the Family Court of Australia which deal with matters in which emotions tend to run high. It is therefore important that flagrant contempts of the Family Court are visited with a penalty sufficient to deter others and sufficient for the community to appreciate the seriousness with which they are viewed by the Court.
9.        It is submitted that the term of imprisonment of three months imposed on Mr Rutherford has little or no general deterrent effect and does not mark the seriousness with which this Court views such contempts.
10.      The sentence imposed by his Honour also appears to be discordant with sentences imposed in like cases. In the case of Nonemacher (unreported Family Court of Australia, 7.5.93), which bears some similarities to the facts of the case under appeal, Coleman J imposed a sentence of imprisonment of nine months in proceedings under s 112AD of the Family Court Act. In Hay (unreported, Family Court of Western Australia, 6.3.98), which again had some similar features to the case under appeal, Holden CJ imposed a sentence of six months imprisonment in proceedings under s 112AP (see on appeal Hay v Hay (1998) FLC 92-819, sentence of imprisonment set aside because there was no initial finding that the contemnor deliberately intended to breach the order).”

Of the two “like cases” referred to in paragraph 10 of those submissions, we think the first (Nonemacher) is clearly distinguishable from the present case in at least one important respect, namely the fact that the action of the contemnor in that case did have a significant adverse impact upon the other party to the proceedings out of which the contempt arose. In that case the husband had been ordered to pay the wife a sum of $26,000, within 28 days, from a fund of about $83,000 which was either then in or shortly thereafter to come into his possession and control from a superannuation fund. Instead of paying the money as ordered, the husband paid the wife nothing and (according to his evidence, corroborated in this respect by the operator of the establishment later referred to) spent the entire $83,000 on “services” provided to him by an establishment which was euphemistically referred to as a “massage parlour”.

In his sentencing judgment in that case, Coleman J found that there was no prospect of the wife ever receiving the $26,000 to which the order entitled her, and he stated (at p.11 of his published judgment) that it was “relevant, in considering the appropriate sentence in this case, to consider the position of the victim ... the applicant”. He then went on to describe the wife’s circumstances in some detail, which included the fact that she had, prior to the relevant order, paid the husband $15,000 for a transfer of his interest in their former matrimonial home, to obtain which she had had to refinance the mortgage on the home to a level which she could not now service. Having regard to that and other aspects of her financial circumstances his Honour said this (at p.14 of his published judgment):-

“It is trite, but I think accurate, to say that when one reads of the financial plight of the applicant, the loss of $26,000, or to put it the other way round, the receipt of $26,000 would no doubt to her in her position have been an absolute fortune which, on the evidence before me, there is no evident reasonable prospect of ever seeing.”

There is one other important respect in which that case is distinguishable from this. In that case, there was no suggestion that the husband was suffering from any depression or other relevant mental or emotional state which might in some measure explain his behaviour. It seems that his motivation was simply to prevent the wife from receiving that to which she was entitled under the order, a result which he in fact achieved.

The second case referred to by Mr Roberts (Hay’s case, at first instance) is of doubtful value as a precedent for the length of a term of imprisonment for contempt, since the Full Court on appeal set aside that sentence and substituted a substantial fine. Whilst it is true that it did so on the basis of the absence of any finding of intention on the part of the contemnor to breach the order, it is by no means clear that if such a finding had been made the Court would have endorsed the sentence of six months imprisonment imposed by the trial Judge in that case (Holden CJ). In any event, although, as in this case, the conduct of the contemnor was not productive of any actual financial loss by the other party, the feature of depression suffered by the contemnor at the time of the breach, which is present in this case, was absent in that case, as it was also in Nonemacher’s case.

In our view, the trial Judge in this case considered all relevant factors, both aggravating and mitigating, and took into account all relevant sentencing options, in coming to the conclusion that a term of three months imprisonment was the appropriate punishment for the husband’s contempt. Notwithstanding the submissions in support of ground 5 of the appeal and those in support of ground 1 of the cross-appeal, we are not satisfied that that sentence is either “excessively severe” or “manifestly excessive”, or that his Honour otherwise erred in any way in the exercise of his discretion in imposing that sentence. Having regard to his Honour’s findings, we think that the sentence probably falls at or very near the bottom of the range of available sentencing options in this case, but nevertheless it is within the range of a reasonable exercise of the wide discretion vested in the trial Judge. Accordingly, both the appeal and cross-appeal against the severity (or lenience) of the sentence must fail.

Ground 8 of the Appeal

8. Fresh evidence will be sought to be led to deal with two issues:
(a)The feasibility of a Community Service type of order framed by the court and supervised by the court;
(b)The impact which is likely to occur on the husband by the term of imprisonment imposed.

This is not strictly a ground of appeal at all, but a foreshadowing of the application to adduce further evidence on appeal which Mr Broun made on the husband’s behalf at the appeal hearing. However, we treat this ground as being, essentially an assertion that if the further evidence sought to be adduced is admitted, the sentence imposed by the trial Judge will be seen, in the light of that evidence, as being manifestly excessive or inappropriate, and that this Court, in re-exercising the discretion, should then make an order in the nature of a community service order in accordance with that evidence.

We have already dealt with (and rejected) in paragraphs 85 to 88 hereof, so much of the husband’s application to adduce further evidence as related to the affidavit of Mr Guy about the availability of a community service order under the CSO Act as a sentencing option in this case. The other evidence sought to be adduced and then relied upon to support this ground, is in the form of a letter dated 20 November, 1998 from the Property Manager of the Society of St Vincent de Paul in New South Wales addressed to the husband. That letter is in these terms:-

“Dear Mr Rutherford
Conditional:that the Court Order under ‘Community Service Order’.
The Society of St Vincent de Paul would be prepared to receive your voluntary labour, so as to enable you to offer voluntary community service as an alternative to a term of imprisonment which has been ordered against you by reason of your breech [sic.] of a Court Order.
We note that you will provide your own insurance as an independent contractor, as you normally do on your jobs, and that you will insure us for any damage or injury resulting from your work.
Further, we will be pleased to provide a letter confirming the number of hours that you have worked for us after the work has been carried out.”

The first thing to observe about that letter is that it is not “fresh evidence” (in the sense in which that term has come to be understood in the context of applications to receive fresh evidence on appeal) because it is evidence which could have been obtained by the husband, by the application of reasonable diligence, and placed before the Court at the sanctions hearing. Whilst that fact is not itself fatal to an application under s.93A(2) of the Act, for the Court to “receive further evidence” on appeal, it is a relevant matter for consideration by the Court in exercising its discretion under that section.

However, what in our view is fatal to the application in this case is that, even if that evidence had been before the trial Judge, we consider that it would not have been likely to lead to any different result because his Honour clearly concluded, in all the circumstances of the case, that a period of imprisonment was called for. Similarly, even if this further evidence were admitted before us on this appeal, we would not be disposed (if called upon to exercise our own discretion in the matter) to substitute an order of the kind proposed for the order for three months imprisonment which the trial Judge imposed. Essentially, we agree with the trial Judge that all of the circumstances of this case call for the imposition of a term of imprisonment, albeit only a modest one.

The only other further evidence sought to be admitted was a further report by Dr Fisher, dated 4 March, 1999. However, Mr Broun made it clear in the course of his oral submissions that that evidence would only be relevant and he would therefore seek to have it admitted, only if we concluded that the trial Judge erred and we embarked upon a re-exercise of the discretion. For reasons which we have already given, we have not reached that conclusion.

Accordingly, the husband’s application to adduce further evidence is rejected, and this ground of appeal also fails.

OTHER MATTERS

In the course of the appeal hearing, one of our number raised the issue of the status of the Marshal to institute proceedings for contempt. As this was not an issue raised by any of the husband’s grounds of appeal, counsel for the Marshal sought, and we granted, leave to make written submissions on this issue after the conclusion of the appeal hearing. Such written submissions, signed by Mr Roberts, Q.C., were filed on 19 March, 1999. Although we reserved the right to counsel for the husband to make submissions in reply to those, none such have been filed. We therefore take it that the submissions of Mr Roberts, and indeed the standing of the Marshal to bring and/or continue these proceedings, are not challenged by the husband.

Mr Roberts submissions contained, in paragraphs 1, 2 and 3 thereof, a brief resume of the history of these proceedings beginning on 21 December, 1994, when Rowlands J ordered that the papers in the matter be referred to the Principal Registrar for consideration of a possible contempt by the husband, through the institution of the proceedings on 18 October, 1995, by the filing by the Principal Registrar of the initiating Form 47 application, to the order of 14 May, 1998 by Chisholm J substituting the Marshal as the applicant in lieu of the Principal Registrar pursuant to O9, r.6(1)(b) of the Family Law Rules.

In the final paragraph of his submissions Mr Roberts refers to ss.37(1), 38N and 38P of the Act, and to the provisions of O.35, rr.3(1)(b) and 3(2) of the Family Law Rules as providing the statutory basis for the institution and prosecution of these proceedings by the Marshal. We think that those provisions, in particular ss.37(1) and 38N(1)(e) of the Act (read in conjunction with s.123(1)(m) of the Act) and O.35, r.3(1)(b) of the Rules, provide the necessary statutory basis for that course of action.

Section 37(1) of the Act provides:-

“(1) In relation to a proceeding under this Act, the officers of the Court have such duties, powers and functions as are given by this Act or the Rules of Court or by the Chief Judge.”

Section 38N(1)(e) of the Act includes the Marshal of the Court within the “officers of the court” to whom reference is accordingly made in s.37(1).

Section 123(1)(m) of the Act provides:-

“(1) The Judges, or a majority of them, may make Rules of Court not inconsistent with this Act, providing for or in relation to the practice and procedure to be followed in the Family Court and any other courts exercising jurisdiction under this Act, and for and in relation to all matters and things incidental to any such practice and procedure, or necessary or convenient to be prescribed for the conduct of any business in those courts and, in particular-
............................................................................................................................
(m)providing for and in relation to the procedure of a court exercising its powers under section 112AP to deal with a person for contempt of the court.”

In our view, ss.37(1) and 123(1)(m), in conjunction, authorise the judges of the court to make rules, inter alia, in relation to the duties, powers and functions of officers of the court, including the Marshal, in relation to the procedure for the exercise by the Court of its powers under s.112AP of the Act to deal with a person for contempt. That authorisation has been taken up by the enactment of O.35, r.3(1)(b) of the Rules, which provides that an application under that Order (which, by rule 2(e) applies to contempt proceedings) may be made by the Marshal. Accordingly, as presently advised, we are satisfied that the Marshal has the necessary status to institute and prosecute the proceedings in this case. We also note that no issue was raised before us with regard to the operation of s.50 of the Acts Interpretation Act 1901 in relation to O.35, r.3(1)(b) of the Rules, in the context of this case, and that there was no appeal or application for leave to appeal brought in respect of Chisholm J’s order of 14 May, 1998 substituting the Marshal for the Principal Registrar as the applicant in the proceedings.

Another matter addressed briefly by counsel in their submissions was the notion of publication of the court’s decision in this case. Mr Broun really submitted that the deterrence aspect of sentencing has no application to proceedings under the Act because of the restrictions on publication imposed by s.121. However, as we pointed out during argument, that restriction applies only to publication of an account of proceedings which identifies a party to those proceedings, a person related to or associated with a party, or witness in the proceedings, and even in those cases does not apply to an account published “in pursuance of the direction of a court” (s.121(9)). That led Mr Broun to submit that if we were disposed to uphold the sentence because of the deterrent aspect there would be little point in doing so unless we coupled our dismissal of the appeal with a direction for publication under s.121(9). Whilst we see the logic of that submission, there was no application by the Marshal for such an order and we certainly do not treat Mr Broun’s submissions as such an application on behalf of the husband. We think before any such order were made the wife would be entitled to an opportunity to be heard, since she may wish to oppose it, either on her own behalf or on behalf of the children, whose interests would need to be considered.

Finally (with respect to the sentence) there was some discussion at the end of the appeal hearing about the execution of any sentence of imprisonment, having regard to the decision of the High Court in Whan v. McConaghy (1984) 153 CLR 631, to the effect that at common law a term of imprisonment ordinarily runs from the date that an order is made that the defendant be taken into custody, or if no such order is made, then from the date when he or she is in fact taken into custody. In the end, having regard to order (2) which the trial Judge made on 14 October, 1998, as varied by his further order of 15 December, 1998 (referred to in paragraph 3 hereof) it was agreed by counsel that the appropriate course for us to take would be to refer the matter back to the trial Judge for the implementation or execution of the sentence in accordance with the judgment of this Court. Since we have not seen fit to depart from the sentence imposed by his Honour, it will be necessary only to refer the matter back to him for the implementation of his original order that the husband be committed to prison for a term of three months.

Ground 2 of the Cross-Appeal

2. Since the applicant was successful in the application costs should follow.

An application for costs was made to the trial Judge by counsel for the Marshal, but we think it fair to say that it was not made or pressed with any great vigour. All that Mr Roberts said about that application appears in the five lines at the bottom of p.344 of the Appeal Book. His Honour dealt with that application at the end of the sentencing judgment (at Appeal Book p.43) where he said this:-

“I next turn to the question of costs. There is of course, no reason in my view why the husband should pay the costs of the second hearing relating to sentence. However, the question does arise as to whether he should pay the costs, or some part of the costs, in relation to the first part of the hearing.
In this connection I note that he defended the hearings and submitted that he had not committed a breach to which section 112AP applied, and he was unsuccessful in that submission. However, I also take into account that people are entitled to defend proceedings brought against them and entitled to put the prosecution to proof as Mr Rutherford did. I also take into account that on a number of significant questions relating to the admissibility of evidence, Mr Rutherford’s submissions were successful. I also have regard to his financial circumstances and in this connection, I am not prepared to make any finding that he has available to him the amount of over $400,000 that he took in breach of the orders.
Having regard to the provisions of section 117 and in particular the matters to which I have referred, I am not satisfied that it is appropriate to make any order to the effect that he pay the costs of the Marshal.”

Mr Roberts’ only submission in support of this ground of the cross-appeal was that costs should have followed the event. Whilst it is certainly not uncommon for persons adjudged guilty of contempt of court, under s.112AP of the Act, or of contraventions of orders, under s.112AD, to be ordered to pay the costs of the prosecutor (usually the other party to the substantive proceedings in relation to which the contempt or contravention arose) it is not correct to say that costs of such proceedings should follow the event. Section 117 of the Act applies to such proceedings, as it does to all proceedings under the Act. Sub-section 117(1) provides the prima facie rule that each party to such proceedings should bear his or her own costs. However, that prima facie rule is subject to the exception established by sub-s.(2), namely that if the court is satisfied that there are circumstances that justify the making of an order for costs, it may do so, and in deciding whether to make any and if so what order as to costs the court is obliged to have regard to the matters set out in sub-s.117(2A).

In this matter the trial Judge appears to have had regard to the relevant matters arising for consideration under s.117(2A) of the Act and to have concluded that, in the exercise of his discretion, no order should be made as to costs. We can see no error by his Honour in that exercise of discretion, and we think that it was certainly well within a proper exercise of his Honour’s discretion to decline to make an order for costs in favour of the Marshal in the circumstances of this case. Accordingly, that aspect of the cross-appeal is also dismissed.

COSTS OF THE APPEAL

Counsel for the Marshal sought an order for costs in the event that the appeal was dismissed. Counsel for the husband did not really seek an order for costs in the event that the appeal was successful, because in reality the husband incurred no costs as Mr Broun acted pro bono in the proceedings, even to the extent of making a member of his staff available to do the binding of the appeal books. Presumably the husband would have incurred at least the costs of the relevant transcript, but this was not made clear by Mr Broun in his submissions. He opposed any order for costs in favour of the Marshal even in the event that the appeal were to be unsuccessful, placing particular reliance upon the husband’s financial circumstances.

Although the husband’s appeal has been wholly unsuccessful, so too has the Marshal’s cross-appeal. We do not think that the husband should be unduly prejudiced as to costs merely because he did not incur significant costs, through the generosity of counsel who represented him. Were it otherwise, it could undoubtedly be said that the costs which he incurred in relation to the cross-appeal would be at least the equivalent of the costs incurred by the Marshal in relation to the appeal, and if costs were to follow the event they would substantially cancel each other out. Having regard to those circumstances, the financial circumstances of the husband and the fact that the Marshal is and was the prosecutor in the proceedings, we are of the opinion that there should be no order as to the costs of the appeal.

ORDERS

For all of the foregoing reasons the orders of the Court are as follows:-

That the appeal and cross-appeal be dismissed.
That the proceedings be referred back to the trial Judge, with expedition, for the purpose of his making such further orders as may be necessary to implement order (1) of his orders of 14 October, 1998.
That there be no order as to the costs of the appeal and cross-appeal.

CONTEMPT – Contravention of Court Order – Sanctions – s.112AP – Whether breach a “flagrant challenge to the authority of the Court” – Power to order community service – Sentence of 3 months imprisonment – Whether manifestly excessive or inadequate

In the Marriage of Schwartzkopf (1992) 15 Fam LR 545 cited.
The Registrar of the Court of Appeal v Maniam (1992) 26 NSWLR 309 cited and distinguished

This was an appeal by the husband and a cross-appeal by the Marshal from an order made by Chisholm J on 14 October, 1998 whereby the husband was, in accordance with s.112AP, sentenced to three months jail for contempt of court.

The parties were married in 1979 and separated in 1991. At the time of the marriage the husband had funds of at least $600,000 and in 1980 he purchased in his sole name the former matrimonial home at Darlinghurst for $700,000. In May 1991 the husband commenced proceedings for, inter alia, property settlement and proposed the sale of the Darlinghurst property and a division of the proceeds 70/30 in his favour. The wife cross-applied for a division of the proceeds 80/20 in her favour. As a result of an interlocutory application by the wife, orders were made on 7 August, 1991 restraining the husband from selling the property, he having notified the wife of his intention to sell it for $2.3 million.

On 20 January, 1994, Rowlands J made orders permitting the husband to sell the property for $1.9 million but further ordered that the net proceeds of sale be invested in a Westpac account in the parties’ joint names, pending further orders. On 24 June, 1994 the net proceeds of $422,705.57 were placed by the husband in a Commonwealth Bank term deposit account in the name of Huxide Pty Ltd, a company of which the husband was a director and a shareholder. Two days later, the husband made a cash withdrawal of those entire funds, less $400 in bank fees, which were, on his evidence, subsequently gambled away. The wife became aware of those events in December 1994 when she received a statement of the husband’s financial circumstances which made no reference to the proceeds of sale.

In the determination of the property proceedings, in 1996, although the net proceeds of sale were added back as a notional asset in the hands of the husband (following Townsend and Townsend (1995) FLC 92-569), when regard was had to the loss suffered by the parties as a consequence of the wife’s obtaining the injunction of 7 August, 1991 (approximately $670,000, including interest) and the compensation which she should therefore pay to the husband pursuant to her undertaking as to damages, the husband’s dissipation of the sale proceeds did not adversely impact upon the wife.

On 18 October, 1995 proceedings were brought, initially by the Principal Registrar but subsequently continued by the Marshal of the Family Court, for the husband to be dealt with for contempt of the orders relating to the manner in which the proceeds of sale of the former matrimonial home were to be dealt with.

The matter came before Chisholm J in May 1998 at which time his Honour found that the husband did understand the meaning of the orders made by Rowlands J in January 1994 and that he knew that, in having the balance of the proceeds from the sale of the former matrimonial home paid into his company account, he was acting contrary to those orders. The trial Judge found the husband’s actions to fall comfortably within the scope of s.112AP and that they amounted to a clear breach of the orders and a “flagrant challenge to the authority of the Court”. At a further hearing in relation to sentence, Chisholm J found an order for community service to be neither appropriate nor within the scope of s.112AP and ordered that, upon the determination of the appeals by the husband and the Marshal, the husband serve a three month custodial sentence.

On Appeal, the husband submitted the trial Judge erred in holding that his actions flagrantly challenged the Court’s authority and that his Honour was in error with respect to the sentence imposed. The Marshal cross-appealed on the grounds that the sentence was manifestly inadequate, and that the trial Judge erred in not making a costs order against the husband.

Held, dismissing both the appeal and the cross appeal and refusing the husband’s application to adduce fresh evidence:

It was clear to anyone, including the husband, that Rowlands J’s order of 20 January, 1994 imposed two specific obligations on the husband both of which he subsequently, flagrantly, breached. The husband was under a positive obligation to do all that he could do to ensure that the proceeds of sale were deposited into the specified account, and under a negative obligation to do nothing to prevent the funds from being available to be dealt with by a further order of the Court. His breaches of those obligations, in the circumstances, were “a flagrant challenge to the authority of the Court”.
The trial Judge was not in error in holding the Community Service Orders Act 1979 (NSW) was not available to him to make an order. As the provisions of the legislation are not available to the NSW Court of Appeal in contempt matters (The Registrar of the Court of Appeal v Maniam (1992) 26 NSWLR 309) they must also be regarded as being unavailable to a Federal Court in contempt proceedings, which are not criminal but civil proceedings (In the Marriage of Schwartzkopf (1992) 15 Fam LR 545 at 553). Further, no arrangement has been made between the Commonwealth and the State of New South Wales, pursuant to s.112AN of the Act, with respect to sentencing and, accordingly, the State sentencing options referred to in s.112AG are not available to a court exercising power under s.112AD of the Family Law Act, let alone when exercising power under s.112AP, which provides a complete code for dealing with contempts of Court.
It was not for the trial Judge to invite the husband to propose a community service type of order, the supervision of which (in any event) would place the Court in an inappropriate supervisory role: The Registrar of the Court of Appeal v Maniam (supra) distinguished.
The trial Judge’s conclusion that a term of imprisonment of three months was appropriate was neither “excessively severe” nor “manifestly excessive” and was well open on the facts of the case. His Honour considered all relevant factors and took into account all relevant sentencing options in reaching his ultimate conclusion.
The “fresh evidence” sought to be adduced by the husband would have been unlikely to have led to a different conclusion on the part of the trial Judge and in part related to a question of law, and was therefore inadmissible. The application was dismissed.
The provisions of ss.37(1), 38N(1)(e) and 123(1)(m) of the Act and O35 r(3)(1)(b) of the Rules, provide the statutory basis for the Marshal to institute and prosecute proceedings under s.112AP.
The trial Judge did not err in the exercise of his discretion in not making an order as to costs having regard to the relevant s.117(2A) matters.

NO ORDER MADE AS TO COSTS

REPORTABLE

[1999] FamCA 1299

6 October 1999