W and W
[2004] FMCAfam 361
•20 July 2004
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| W & W | [2004] FMCAfam 361 |
| FAMILY LAW – Contravention – order for transfer of former matrimonial home to name of applicant – failure to transfer by Respondent – mortgaging property subject of order – failure to do all acts and things to effect transfer – disposal of proceeds of mortgage-community interest in rule of law must be considered-respondent sentenced to term of imprisonment of twelve months. Family Law Act 1975, ss.112AA, 112AB, 112AC, 112AD,112AE Sahari and Sahari (1976) FLC 90-086 |
| Applicant: | MAW |
| Respondent: | KW |
| File No: | (P)NCM3743 of 2002 |
| Delivered on: | 20 July 2004 |
| Delivered at: | Newcastle |
| Hearing date: | 12 July 2004 |
| Judgment of: | FM Donald |
REPRESENTATION
| Counsel for the Applicant: | Mr G J Fox |
| Solicitors for the Applicant: | Attwaters |
| Counsel for the Respondent: | In person |
| Solicitors for the Respondent: |
ORDERS
On a date or dates after 16 February 2004 the said KW:
(a)Obtained from Land and Property Information NSW a substitute Certificate of Title for the home in his sole name; and
(b)proceeded to complete a mortgage transaction on the security of the title of the home without notice to, or the consent of, the Applicant and
(c)caused or permitted the company D Pty Limited to register mortgage number A on the title of the home without notice to, or the consent of, the Applicant
In the circumstances the actions of the Respondent have prevented the Applicant from becoming recorded on title as the registered proprietor of the home and that the Applicant’s Application for contravention filed 4 March 2004 is proved.
In respect of the contravention filed 4 March 2004, KW is sentenced to 12 months imprisonment to date from 8 April 2004.
That the matter is referred to the Marshall of this Court for consideration of proceedings under section 112AP of the Family Law Act.
That the Respondent pay the Applicant’s costs of this Application to be agreed or taxed.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT NEWCASTLE |
NCM 3743 of 2002
| MAW |
Applicant
And
| KW |
Respondent
REASONS FOR JUDGMENT
Preliminary
This is a matter in which the Applicant has, by Application filed on
4 March 2004, alleged that the Respondent contravened Orders made in this Court on 16 February 2004.
Those Orders are in the following terms:
3.That, pending further order, the Respondent transfer to the Applicant the legal title of the land and premises situate at and known as 10 L Road, V, in the State of New South Wales being the land contained in Certificate of Title Folio Identifier 2 (“the home”).
5.That the Respondent forthwith do all acts and things and execute all deeds and instruments necessary or convenient to effect the transfer of title in accordance with order 3 hereof.
It is alleged by the Applicant that the Respondent failed to comply with those Orders in that he has taken steps which prevent her from being recorded on the Certificate of Title as the registered proprietor of that home. In essence, it is the allegation of the Applicant that the obligation to “do all acts and things and execute all deeds and instruments necessary or convenient to effect the transfer of title” included an obligation not to take steps to prevent that. I accept that is the position, for the Orders place upon the Respondent the obligation to do all necessary things to correct any situation preventing the transfer of the title to the Applicant.
A necessary act would be to withdraw any application for mortgage; refuse to sign documentation required to affect the mortgage; repay funds to satisfy any loan secured by such a mortgage and would also include the taking of steps to prevent the recording of the mortgage on the title of the subject property. Pursuant to Order 5 all such steps needed to be taken “forthwith”.
The allegations are in the following terms:
1. On a date or dates after 16 February 2004 the Respondent:
(a)obtained from Land and Property Information NSW a substitute Certificate of Title for the home in his sole name, and
(b)proceeded to complete a mortgage transaction on the security of the title of the home without notice to, or the consent of the Applicant, and
(c)caused or permitted the company D Pty Limited to register mortgage number AA451258 on the title of the home without notice to, or the consent of, the Applicant.
2. In the circumstances the actions of the Respondent have prevented the Applicant from becoming recorded on title as the registered proprietor of the home.
The Applicant was represented and the Respondent appeared on his own behalf.
As will be discussed later, the Respondent appeared in custody and the Court ensured that he was provided with all documentation relied on in the proceedings. The proceedings were explained to him and the allegations put. The Respondent denied the allegations and the Applicant commenced her case. The Respondent declined to cross-examine the Applicant initially but, when given the chance to do so near the completion of the proceedings and in relation to further evidence, he did so.
At the conclusion of the Applicant’s case, the Respondent submitted that he had no case to answer. He alleged that he had done all things necessary to obtain the subject mortgage prior to the date of the Orders and, therefore, had not taken any action contrary to the Orders after they were made.
That argument was rejected. As discussed later, the various documents relied upon by the Respondent to obtain the mortgage, including his application to the lender, bore dates on their face after the 16th of February 2004 the date of the subject Orders. The Respondent was present in Court on that day when the Orders were made.
The Respondent maintained his position in relation to the manner in which the mortgage was obtained and there was, therefore, an issue of fact to be determined by the Court.
He also, initially, proposed that there was no time limit placed upon when he needed to take steps to transfer the property to the Applicant. Upon a further examination of the Orders he noted the word “forthwith” in Order 5 and effectively abandoned that ground.
The Respondent proceeded to give evidence in chief. This evidence was, however, to a greater extent a protestation as to the nature of the laws determining property distribution between parties under the Family Law Act and a justification for what he had done. The Respondent also asserted that he could no longer comply with the Orders as he had dissipated the funds obtained under the mortgage through drinking and gambling.
Extensive cross-examination followed both as to credit and as to the assertions by the Respondent as to the manner in which he obtained the funds pursuant to the mortgage and also his dissipation of those proceeds.
Background
The Respondent is 53 years of age and the Applicant 49 years of age. The parties married in 1973 and separated finally in 2002.
There are 5 children of the marriage ranging in age from 30 years to
11 years. The 3 youngest children left the former matrimonial home with the Applicant on the date of separation. Those children continue to reside with the Applicant.
Following separation, the Respondent has continued to occupy the former matrimonial home (“the property”) whilst the Applicant and the Children have occupied premises rented by them. The title to the property is in the name of the Respondent only. The Applicant lodged a caveat on the title of the property to protect her interest in that property and also retained the Certificate of Title to that property for the same purpose.
Proceedings were initially commenced by the Respondent when he filed an Application for parenting Orders in relation to the three youngest children on 20 June 2002. The Applicant’s Response filed
5 August 2002 sought Orders in relation to both property and parenting. The Applicant also applied on that same date for Orders in relation to child support.
A conciliation conference was attempted on 16 September 2003 but could not proceed because the Deputy Registrar conducting that conference had previously provided legal advice to the Applicant. Another unsuccessful conciliation conference occurred on 17 January 2003.
On 11 December 2002, a hearing date in relation to property, parenting and child support was listed for 20 October 2003. On 17 September 2003, the Respondent applied to vacate that hearing date. The application was based upon the Respondent’s perception that he was not in a fit mental state for the hearing to occur. That application was refused.
By Application filed 3 October 2003, the Respondent again sought to vacate the hearing date and relied upon essentially the same grounds as before. That application was also dismissed.
On 20 October 2003, the Respondent failed to appear on the hearing of the matter. It transpired that the Respondent had admitted himself to a hospital allegedly suffering from depression. The Respondent has provided no evidence concerning this admission to either the Court or the Applicant.
Following the failure of the matter to proceed to hearing on 20 October 2003, Application was made by the Applicant for interim orders whereby the former matrimonial home could be sold and a partial distribution of proceeds of sale occur. This was based on the proposition by both parties in the respective orders sought by them that the house be sold and the proceeds apportioned. The Respondent opposed this Application and it was subsequently dismissed by this Court.
Following a further application by the Applicant, on 17 November 2003, Orders were made by this Court for the exclusive occupation of the former matrimonial home by the Applicant and the Children pending the final hearing of property matters then listed in November 2004. The Respondent was allowed 7 weeks in which to organise alternative accommodation for himself. This he did not apparently do.
On 17 December 2003, the Respondent’s application for a stay of the exclusive occupation orders was dismissed. On 19 December 2003, the listed date for hearing in November 2004 was vacated and the matter listed for a 2 day hearing in April 2004 which had become available.
On 8 January 2004, the Respondent filed a further application in which he sought to remain in the former matrimonial home contrary to the earlier Orders for exclusive occupancy in favour of the Applicant. That Application was dismissed on 29 January 2004.
On 12 February 2004, the Applicant made Application to the Court for the issue of a Writ of Possession and transfer of the title to the property from the name of the Respondent to that of the Applicant. Pursuant to this Application, the Applicant was not permitted to encumber or dispose of the property other than for the purpose of obtaining registration of that property in her name. In the affidavit sworn by the Applicant in support of this Application the Applicant referred to statements made by the Respondent to her that he would “rather burn the house down then move out”. She was concerned that if he carried out his threat insurance would not be payable as the house was in the Respondent’s name only at that time.
On 16 February 2004, Federal Magistrate Brown granted the Applicant’s application as referred to in the immediately foregoing paragraph above.
On 4 March 2004, the Application the subject of these reasons was made to the Court. The Respondent was served with the Application on 7 March 2004 and failed to appear on the return date the following day. A warrant was issued for his arrest following such non-appearance.
The Respondent was arrested on 8 April 2004 and was brought before this Court. The Respondent has applied to be released on a number of occasions but these applications have been refused.
The Respondent has remained in custody since that time with various adjournments occurring so that, amongst other things, the Respondent could obtain legal advice or medical evidence. In addition, the hearing has extended over a number of days.
Evidence
In considering the matter, I have had regard to each of the documents referred to in the list of documents now contained within the Court file; the additional affidavits referred to in the course of the proceedings; the oral evidence of the Applicant and the Respondent and the various exhibits tendered to the Court. I have also had regard to the submissions made on behalf of the Applicant and by the Respondent.
I address the question of credit below.
Law
Part XIIIA of the Family Law Act provides sanctions for breach of Orders other those relating to children. Section 112AD is in the following terms:
If a court having jurisdiction under this Act is satisfied that a person has, without reasonable excuse, contravened an order under this Act, the Court may make an order for the imposing, in respect of the person, of one or more of the sanctions available to be imposed under subsection (2), being a sanction or sanctions that the court considers to be the most appropriate in the circumstances.
An “order under this Act” is defined by section 112AA as including:
(a)an order (however described) made by the court under this Act (other than a parenting order)
It is provided in section 112AB of the Act:
(1)A person shall be taken for the purposes of this Part to have contravened an order under this Act if, and only if:
(a)where the person is bound by the order – he or she has:
(i)intentionally failed to comply with the order; or
(ii)made no reasonable attempt to comply with the order; or
As to “reasonable excuse”, section 112AC provides:
(1)The circumstances in which a person may be taken to have had, for the purposes of this Part, a reasonable excuse for contravening an order under this Act include, but are not limited to, the circumstances set out in subsection (2).
(2)A person (in this subsection called the respondent) shall be taken to have had a reasonable excuse for contravening an order under this Act if:
(a)The respondent contravened the order because, or substantially because, he or she did not, at the time of the contravention, understand the obligations imposed by the order on the person who was bound by it; and
(b)The court is satisfied that the respondent ought to be excused in respect of the contravention.
As to the standard of proof to be applied in proceedings of this type, the Full Court of the Family Court of Australia in Lindsay and Lindsay (1995) FLC 92-638 considered earlier authorities when a case stated was referred to it in the following terms:
What is the standard of proof to be applied in proceedings taken pursuant to the provisions of sec 112AD of the Family Law Act 1975.
The Full Court concluded that in proceedings initiated in the Family Court or transferred to that Court from another court it is the civil standard. The Court also concluded that degree of satisfaction which the civil standard of proof calls for may vary, having regard to the gravity of the facts to be proved. (Briginshaw v Briginshaw (1938)
60 CLR 336).
The logic for the application of the civil standard of proof in such matters in the Family Court also applies in this Court. A contravention of an order to which section 112AD applies is not an offence against or arising under the Australian law. The criminal standard of proof does not, therefore, apply.
In making findings of fact in these proceedings, I do so having been satisfied of such facts to the standard to which I have herein referred and take into account the gravity of the facts to be proved and the potential consequences to the Respondent.
I also accept that the civil standard of proof applies in relation to the consideration of whether a “reasonable excuse” has been established by the Respondent. I do note, however, that the issue of “reasonable excuse” is not raised in these proceedings.
I accept that it is necessary for the Applicant to prove that the Respondent knew of the order that he was required to obey (Sahari and Sahari (1976) FLC 90-086) and that he is in breach of that order.
Credit
This court has had the usual opportunity of observing both the Applicant and Respondent giving oral evidence before the court in these proceedings. They were the only witnesses giving such evidence.
I accept that it is often dangerous to place much weight upon the observed demeanour of witnesses. Personal characteristics, unfamiliarity with the court environment, and nervousness or stress can all play a role in creating what could be a false impression. I have cautioned myself in relation to this aspect of the proceedings. Nevertheless, having regard to both the evidence and the demeanour of the Respondent, I find that the Respondent is not a witness of truth and cannot be believed.
There are numerous examples of the Respondent being revealed as a person prepared to lie to achieve his objective. One such example admitted by him is contained within the document forming exhibit “J” in these proceedings. That document is a “Loan Repayment Ability Declaration”. This document bears the signature of the Respondent and declares that his current gross income is $80,000 per annum. The Respondent has admitted in these proceedings that such statement was false.
A further example is revealed in the document tendered in these proceedings as exhibit “L”. This document is a “Consumer Credit Code Declaration” bearing the signature of the Respondent and dated
2004. In that document he has declared that “the credit to be provided to me/us by the credit provider is to be applied wholly or predominantly for business or investment purposes (or for both purposes). This document is also dated the day after Orders were made and is not consistent even with the evidence of the Respondent. It was his evidence in these proceedings that the funds received by him after mortgaging the former matrimonial home were dissipated by gambling and excessive use of alcohol.
Yet another example is a “Declaration Regarding Security Property” bearing the signature of the Respondent and dated 2004. (exhibit “m”) In that document he has asserted “I/We warrant that there is no unsatisfied judgement of any Court or any process or Writ of Execution issued out of such Court, which may be enforced against all or any part of the Property”. This was the day after the Respondent was in Court and heard the subject orders being made as well as an Order for the issue of a Writ of Possession in favour of the Applicant.
As will be discussed, the Respondent appears to have embarked upon a scheme to frustrate the Court and the Applicant in relation to property proceedings between the parties. On several occasions in the course of the proceedings the Respondent entered into a long and carefully constructed speech concerning the Family Law legislation and its unfair application to him. It is probable that this perception has contributed not only to the scheme embarked upon by him but also to the manner in which he has conducted himself in the Court. One such occasion was on 31 May 2004 when he said (transcript page 208):
You’ve got to remember I’m an emotional man, Mr F. I’m being dealt with by legislation that doesn’t make sense to me, it’s caused lives of even children the way its been promoted in the media. It’s a crooked legislation that’s being instituted by certain politicians that heeded to feminist groups. It rubs me the wrong way. To think that I was willing to sacrifice two – what they call in the prison terms – two life sentences only harder than those that have committed murder to put meself and sacrifice a lot of goodies, my youth, to put assets and security first for me family’s sake.
I could’ve taken my (indistinct) and put them in a housing commission. Save meself a lot of hassles. I wouldn’t be speaking to you now. But I did it the hard way and to think I’m going through the mill for it now. It’s been laughed at, scoffed at, and incredibly touched persons in administration in the N – in the New South Wales administrative services that I should entertain this and that I should be imprisoned over this issue. And that is by parties that hold quite a high position in these – and I would say there’s a lot of leniency and a lot of blind eyes turned to my existence in there. As they feel that I shouldn’t be in there Mr F.
If it wasn’t for the legal fraternity creating such a controversy and justified it in their own little way, the legislation would have been obsolescent by now. And there were certain procedures and moves by the Senate as you well know, even Alastair Nichols (sic), Chief Justice of the Family Court, disagrees with the philosophy of the legislation.
I am satisfied that during the course of this hearing the Respondent has lied on his oath and appears content to serve the maximum period of imprisonment able to be imposed in relation to this alleged contravention. It seems that his belief is then that he will be able to retrieve the funds obtained by mortgaging the former matrimonial home and deprive the Applicant of any entitlement she may have had under the laws of the Commonwealth.
The Respondent has, at various points in the hearing, sought to delay the proceedings by requesting adjournments for the obtaining of legal assistance or because he wished to obtain medical opinion concerning his depression and ability to continue with the case. Adjournments were granted at various points of the hearing but the Respondent has still not placed before the Court any evidence concerning his psychological condition nor has he been represented.
The Applicant has filed numerous affidavits concerning telephone calls made by the Respondent to her during the course of these proceedings. The Respondent has been cross-examined concerning many of those calls and has admitted that many of them occurred. There is no doubt that the Respondent had the ability, even without the assistance of those in the correctional institution in which he resides, to have contacted legal advisers. As will be noted later, I have concluded that the Respondent has secreted the vast bulk of the funds obtained by him when he mortgaged the former matrimonial home. He had the funds to pay for legal assistance.
Further, I note the contents of the Applicant’s affidavit sworn 29 June 2004. In that affidavit, the Applicant referred to a telephone call received by her from the Respondent on 8 June 2004. Part of that conversation was as follows:
Applicant: You still have the money then?
Respondent: Never mind about that I‘m covered should I need to be. Come and see me and we can talk about strategies. There’s already $140,000 damages done. An astute person would try to salvage the damages. I’m going backwards to see you through. I’ll give you a bell later. I’ve got to call my legal representative to make an appeal. They’ve already looked into these two matters. There’ll be no charge for the contempt. You’ve got no chance of winning that one, and the contravention charge there’s no problem either. Make the arrangements to come and see me. The sooner the better.
The Respondent was either in receipt of legal advice as stated by him or he was not being truthful to the Applicant.
From the evidence of telephone calls made by him to the Applicant during the course of the proceedings, which evidence was not challenged, it would appear that the delays were occasioned for the purpose of putting further pressure on the Applicant to settle property proceedings on a basis not to her advantage. Proceedings were adjourned on 29 June 2004 to enable the Respondent to prepare his submissions. In an affidavit sworn 12 July 2004, the Applicant referred to telephone calls made to her by the Applicant. One such call was at about 2.35pm on 1 July 2004 and illustrates the manner in which the Respondent is attempting to use delay in that way. Part of that conversation was as follows:
Respondent: “There’s no need for you to turn up on the twelfth. Save yourself thousands in legal fees. It’s all automatic. I’ll give my summation, and then I’ll be sentenced and serve the rest of my time, less time served, less parole, and then I’ll be on my merry way. You’re in the same position I was when I had to leave the house. Now, we can hang onto the house until a better time, and then get optimum value when we sell at a better time. Or in two months’ time, the house will be auctioned off for far less than its worth”.
Applicant:” You could repay the mortgage”.
Respondent: “That’s not on. At the expense of everything, that’s not on. Everything is automatic on the twelfth. I’ll be sentenced, then I’ll appeal. It all takes time. Then … I do my time and be on my merry way, and I’ll be around to remind you about it in time to come.
In a further telephone conversation on 6 July 2004 , referred to in the same affidavit of the Applicant, the following exchange occurred:
Respondent: Forget the AVO. This is urgent. It surpasses everything. You’ve been brainwashed by others but it’s your life they’re fucking with. In twelve months time, you’re forgotten. They move on, but where are you? Do you want one hundred and twenty five thousand dollars?
Applicant: Is that your offer? You’ve got four hundred thousand dollars and you want to give me only one hundred and twenty five thousand dollars?
Respondent: That’s a split down the middle, less legal bills.
Applicant: I’m not paying your legal bills.
Respondent: Yes, well, you’ll have to. Its dragged on and costs have escalated out of control.
Applicant: You dragged the case out with delays and appeals intentionally to frustrate the procedure and increase my costs.
Respondent: Yes, I know, that was the idea.
Further, I am absolutely satisfied that the Respondent was not at all impaired in the conduct of his proceedings. He displayed acute awareness and understanding of issues before the Court.
That the Respondent has carefully calculated his course of action including attempting to create a false impression as to his capacity is well illustrated by the statements made by him to the Applicant on
4 January 2004, 13 January 2004 and 19 January 2004. Those statements appear at paragraph 9 of the affidavit of the Applicant sworn 10 February 2004:
9. Since Christmas 2003 the Respondent has said to me on various occasions words to the following effect:
4 January 2004
I only wanted your agreement to tide me over Christmas. I’ve got no intention of moving out by the 28th. I just wanted some breathing space. You’re silly for thinking otherwise. That’s why I’ve stuffed around until now. It’s cost you heaps. I won’t be going anywhere until after the final hearing.
13 January 2004
I will appeal the final hearing date and also ask for an extension until Easter, and then like at Christmas I will argue that Easter is a bad time to find a rental. If I’m willing to put myself in the nut house, what wouldn’t I do. Your dealing with someone no cunt can stop. I’m not insane, there is just method in my madness. If I act outside the legislation no one can stop me.
19 January 2004
I’d hate to be a terrorist. Nothing would stop me.
In short, I am satisfied that the Respondent is not a witness of truth and that he has embarked upon a scheme designed to frustrate the Applicant and the Court.
The Applicant, on the other hand, presented as a witness of truth. There was no effective challenge to her credit. Where there is a conflict in the evidence as between the Applicant and the Respondent, I prefer the evidence of the Applicant.
Knowledge of the relevant orders
The Orders alleged to have been contravened were made in this Court by Federal Magistrate Brown on 16 February 2004. It is recorded that the Applicant appeared in person when those Orders were made. The Applicant, in her affidavit sworn 1 March 2004, provides evidence of her own observation of the Respondent appearing in the Court when Federal Magistrate Brown made the Orders the subject of this Application.
Further, the Respondent has admitted his presence in the Court on that day and that he understood that the Orders required that he transfer the title in the subject property to the Applicant (page 34 of transcript).
I am satisfied that the Respondent had knowledge of the Orders the subject of this Application on the day that such Orders were made.
Conduct of the respondent
It is the submission of the Applicant that not only has the Respondent not complied with the Orders requiring transfer of title in the former matrimonial home to the Applicant but that he has taken steps which, in effect, prevent that occurring. Further, it would appear that because of the actions of the Respondent, the former matrimonial home is likely to be sold by the mortgagee with few if any funds remaining after sale for distribution to the Applicant.
As indicated earlier, Orders were made on 16 February 2004 requiring the Respondent to transfer title in the former matrimonial home to the Applicant and, in addition, “do all acts and things and execute all deeds and instruments necessary or convenient to effect the transfer of the title in accordance with Order 3 hereof (the order to transfer).
I accept the evidence of the Applicant that, as at the date the Orders referred to were made, the former matrimonial home was unencumbered.
I accept from the evidence before me (commencing page 159 of the transcript) that the Applicant had registered a caveat on the title of the home to protect her interest. I also accept that she held the certificate of title and did so with the knowledge of the Respondent (see also the Affidavit of the Applicant sworn 1 March 2004).
Annexed to the affidavit of the Applicant sworn 1 March 2004 are documents relating to the withdrawal of the caveat and replacement of the Certificate of Title for the subject property. I find that the Respondent removed the caveat from the title after representing in a statutory declaration that he had served a notice on the Applicant. I accept the evidence of the Applicant that the “Lapsing Notice” was not served upon her.
I am also satisfied that the Respondent falsely declared that he had lost the certificate of title to the subject property and thereby obtained a replacement. By these means he was then able to use the certificate of title to apply for a mortgage on the subject property.
The Applicant has tendered to the Court the documents which, I am satisfied, disclose that the Respondent not only did not transfer title in the home to her as required by the subject Orders but took active steps after the Orders were made on 16 February 2004 which have served to prevent such transfer. He then failed to take action, or “do all acts and things” to correct the situation he had created and enable the transfer of title. Those documents and the disclosures revealed on their face are:
a)Exhibit “R” is a document from the Lands and Titles Office which records the replacement Certificate of Title as being delivered on 16 February 2004. The Respondent was in Court on that day and, I accept, could not have received that Certificate until after that date. There is no evidence from the Respondent as to when that Certificate was in fact received.
b)“Loan Repayment Ability Declaration” bearing the signature of the Respondent and dated 17 February 2002 (exhibit “J”). This was, of course, the day after the Orders were made.
c)Document dated 17 February 2004 and bearing the signature of the Respondent in which the Respondent has acknowledged his understanding that if mortgage repayments were not made, the former matrimonial home could be sold on behalf of the mortgagee and authorising “R & Co” to do just that. Not only is this evidence of an act taken by the Respondent after the date of the subject Orders which was not consistent with his obligations under those Orders, but is also evidence of his knowledge that by entering into such an arrangement and not paying the mortgage (which he has not done) then the home would be sold. He has specifically authorised this to be done on the day after he was in court when the Orders were made (exhibit “k”).
d)A “Consumer Credit Code Declaration” bearing the signature of the Respondent and dated 17 February 2004 whereby he has declared that “the credit to be provided to me/us by the credit provider is to be applied wholly or predominantly for business or investment purposes (or for both purposes). This document is also dated the day after Orders were made (exhibit “L”).
e)A “Declaration Regarding Security Property” bearing the signature of the Respondent and dated 17 February 2004. In that document he has asserted “I/We warrant that there is no unsatisfied judgement of any Court or any process or Writ of Execution issued out of such Court, which may be enforced against all or any part of the Property”. This was the day after the Respondent was in Court and heard the subject orders being made as well as an Order for the issue of a Writ of Possession in favour of the Applicant (exhibit “m”).
f)“Application for Mortgage Finance” bearing the signature of the Respondent and dated 17 February 2004 (exhibit “n”).
g)Mortgage document recording “D Pty Limited” as the mortgagee and “KW” as the mortgagor. This document records the date of the mortgage as 25 February 2004 and for a principal amount of $406,000. That document also records that stamp duty was paid in relation to that document on 26 February 2004 (exhibit “I”).
h)Letter from R & Co to the Westpac Banking Corporation authorising and directing the issue of cheques on mortgage settlement . This letter is dated 25 February 2004 and includes a direction to pay to the Respondent the sum of $384,873.95 (exhibit “G”).
I accept that there is evidence upon which it would appear that the Respondent had put in train his application for a loan prior to the end of 2003. I do not accept the evidence of the Respondent that he had executed all documents prior to 16 February 2004 when the Orders requiring transfer of the title of the property to the Applicant were made. The Respondent has not adduced any evidence in support of this contention.
Further, there is absolutely no doubt that the Respondent received the money under the mortgage well after the Orders were made. It was in his power to halt the transaction which had the affect of encumbering the property and preventing the transfer to the Applicant of that property’s title without repayment of the borrowed sum or the consent of the mortgagee. The Respondent has neither repaid the loan obtained or attempted to obtain the consent of the mortgagee to the transfer of the title in the former matrimonial home to the Applicant.
It is the Respondent’s own evidence that far from conserving the funds so that repayment might be made, he embarked upon a period of drinking and gambling whereby those funds were dissipated. His evidence in that regard appears in many places throughout his cross-examination. His evidence as to what transpired from the time he received the funds appears in the transcript commencing at page 75.
It was his evidence that he received a total of $384,800 in $100 notes from the Commonwealth Bank at Martin Place in Sydney. This money was received by him at about midday on 1 March 2004. This was a date well after the Orders were made requiring transfer of title in the subject property to the Applicant.
He then, according to the Respondent, placed those funds into a “jetset” bag and caught a train with those funds to North Sydney. There he placed the bag of cash in the rear of his motor vehicle which he had parked there. He then removed a “few” hundred dollars from that sum and went to a hotel. He states that he left this bag containing $384,000 just laying in the back of the parked motor vehicle whilst he went off drinking. It is his evidence that he then remained at that hotel until about 9am the next morning when he drove to the New South Wales Central Coast and attended a licensed club.
This evidence, I find, is false. Exhibit “AN” is a bankcard statement admitted by the Respondent as being his. This statement records transactions on 1 March 2004, 2 March 2004 and 3 March 2004. Each of the transactions records an automatic teller withdrawal of $50 at U B which is on the Central Coast of New South Wales. It will be recalled that the evidence of the Respondent was that he was drinking at a North Sydney Hotel from shortly after obtaining the $384,000 until the next day. This evidence places him in a different location to that alleged by him. It also is puzzling why a man taking bundles of $100 notes to spend on gambling and drinking would need to withdraw $50 on successive days from an ATM.
It is the evidence of the Respondent that he again left the bag of cash in his parked motor vehicle whilst he attended a club on the day after drawing the $384,000 where he remained for most of that day. He then spent the night at the home of a female friend called J. Again, the bag of money remained in the motor vehicle over that night.
The following day he went to the C Club in Newcastle and slept in his car near the beach. It was at this point in the Respondent’s evidence that the Respondent volunteered his motivation for dissipating the funds (transcript page 86):
I ventured more into that. I mean – yes, I just – just, hurly burly my life’s shattered, so let’s – let’s make the best of it. And I never thought about the consequences. I was just out to make up for some of the times that I sacrificed in earlier days to put it all together in the first place. And kicking myself silly for not putting my tribe into a housing commission change and made my life a lot easier for me in my younger day, instead of sweating it out for a – bit of security in later on years, and by that time the Family Law Act, which is a bit loaded politically, for obvious reasons, it’s a – it’s a vote winner with various women’s groups – all one has to do is just score the kids and you’ve got an extra ticket to the - to the properties. Unfortunately, the later – to correct it, as you know, the Senate did look into the matters but the legal fraternity in the main, barristers and lawyers, turned it over. It was going to be big cost to them, as you know well work wise, if the proper thing had been done, that’s everything split down the middle. There has been a lot of men out there devastated. A lot of men out there gone to tears. Others have committed suicide. Others have gone to the extreme and gassed themselves in cars – I need not tell you any more because of the anomalies that exist in that legislation. So, anyway, here I am a victim of it, so I just didn’t care – I didn’t care.
The Respondent in his evidence then continued to explain where he stayed and what he did in the days and weeks following the removal of the cash from the Commonwealth Bank at Martin Place. This included three nights at the Casino in Sydney. In relation to that it is his evidence that he stayed at three hotels near central railway in Sydney. He could not remember their names. Again, it is his evidence that he left the money in his motor vehicle and that this motor vehicle was left parked at the Central Coast. He had removed “some thousands” of dollars to take with him to the casino.
Interestingly, when cross-examined in relation to the value of chips used in gambling, the Respondent was unable to provide any information and indicated that acquaintances of his were purchasing them on his behalf. He was not able to indicate the values of the chips he was supposedly using.
Following this, the Respondent travelled to Queensland. It was the Respondent’s evidence that he travelled alone to the St George area of Queensland. It was also his evidence that he later again travelled to Brisbane with a J H. This trip was to the Brisbane area only and was an occasion when the Respondent met with his brother. It is the Respondent’s evidence that he again attended certain clubs and licensed premises where he gambled on poker machines and consumed alcohol.
The Applicant relies upon an affidavit sworn by Ms H. In that affidavit Ms H indicates that she did travel with the Respondent to the St George area; that he displayed no particular interest in securing any items in the motor vehicle; and that he showed no interest and, indeed, a disdain of playing the poker machines in any clubs they attended.
I find that the evidence of the Respondent as to his disposition of funds at the casino in Sydney and at various clubs in New South Wales and in Queensland to be false.
Following an order made by Federal Magistrate Brown, the premises at which the Respondent was located when arrested was searched. A sum of money divided into bundles and wrapped in newspaper was located. This amount was, according to the Respondent, about $17,000 and had been provided by the Respondent’s brother in Queensland to carry out certain works on the Respondent’s deceased father’s residence. One of those bundles bore written figures in the hand of the Respondent.
The Respondent denied that these funds were part of the funds that he obtained on entering into the mortgage on the former matrimonial home and denied that he had left the balance of those funds in the care of his brother in Queensland.
It is the evidence of the Respondent that the remains of the funds were last seen by him still in the Jetset bag in the back of his car upon his return from Queensland. The evidence of Ms H to which I have already referred , does not support the Respondent in this regard.
When questioned as to why he had not indicated to the Applicant that he was about to mortgage the former matrimonial home and as to why he had never informed the Applicant that he had done so, or as to what he had done with the funds, he stated the following (transcript page 108):
And at the time I felt justified in doing it. I felt as if I was dealing in properties that I have hard worked and earned for. There was nothing in the world stopping me from seeing the world and indicating – and telling you how the black fellas go to the toilet in South Paraguay somewhere. I could have seen South America in so much detail, and yet I chose to benefit my family and sacrifice at a great expense to myself with any sums of money that I have come across. I have catered for them very well, but they have abandoned me.
The Respondent also indicated (transcript page 112) that he expected the former matrimonial home to be sold by the mortgagee sooner than 12 months time.
I find that after the date of the subject Orders and in circumstances where he had knowledge of those Orders, he took steps to encumber the previously unencumbered former matrimonial home and took no steps nor executed any documents whereby the home could be transferred into the name of the Applicant or to prevent the encumbrance being placed upon the home. His actions and lack of them were intentional. Why did he embark upon this course of conduct? Yet another telephone call from the Respondent to the Applicant contains another example as to the Respondent’s thinking (Applicant’s affidavit sworn 31 May 2004 at paragraph 4):
Respondent: You don’t get the message do you? I want to know – do I make positive moves? You’re being foolish, holding off is costing you heaps. I can’t initiate things until you agree. You don’t understand the gravity of the situation or you know more than you’re letting on. Drop all proceedings – I can’t do anything unless and until you do that. Trust me. Your lawyer is only leading you further into debt. I’ll fix the finance people – leave it to me. I may have to incorporate a bit from the house at Cardiff to overcome the $15,000 in interest racked up. I’ll retrieve the house.
Applicant: So the house will remain in your name – you’ll still own number ten?
Respondent: Yes. I know. You’ll have to accept that. I’ve won the battle already. Materially I’m in front.
Further, it is the Respondent’s own evidence that after receiving the funds from the lender, he dissipated the totality of the advance by gambling and excessive drinking. Even if that were true, I find that it is an action by him which prevented the Orders of 16 February 2004 from being effectual. It was open to him to satisfy the loan securing the mortgage. He did not but, on his evidence, dissipated the available funds instead. That also is a conscious act of the Respondent after the date of the Orders and with full knowledge of such Orders.
I do not accept the Respondent’s explanation as to disposition of the funds, however. His explanation is not consistent with the evidence and is not plausible. I am satisfied that, having regard to the evidential burden to which I have earlier referred, the Respondent with full knowledge of the Orders made on 16 February 2004, continued with arrangements he had set in train for the advancing of a loan secured by mortgage over the subject property. I am also satisfied that he did this with the intention of thwarting the Orders made on 16 February 2004 and with placing pressure on the Applicant to settle property proceedings in a manner advantageous to himself.
I do not accept that the Respondent has disposed of the funds in the manner alleged by him. He has not consumed the money by gambling and drinking. It is likely that he has secreted those funds with someone or with an organisation unknown to the Applicant with the intention of avoiding his obligations under the Family Law Act. The Respondent has put in place a carefully executed and planned scheme whereby the Applicant would be thwarted in her application for property orders. The Orders made on 16 February 2004 had the potential to disrupt that plan and so were ignored.
The Respondent has not complied with the Orders. He has not attempted to transfer the title in the property and has, instead, mortgaged the property and hidden the proceeds. Such failure to correct steps taken by him to encumber the property and the steps taken to continue with the mortgage transaction were intentional. I find that the Respondent has contravened the Orders of 16 February 2004 and has done so without reasonable excuse. I find the contravention proved.
Penalty
The penalties that may be imposed following the finding that the Respondent has contravened the Orders are set out in sub-section 2 of section 112AD of the Family Law Act. The Court may:
(a)to require the person to enter into a bond in accordance with section 112AF; or
(b)to impose a sentence by order on the person, or make an order directed to the person, in accordance with section 112AG; or
(c)to fine the person not more than 60 penalty units; or
(d)subject to subsection (2A), to impose a sentence of imprisonment on the person in accordance with section 112AE.
The Court is also able, pursuant to s.112AD(4) to make further other orders as the court considers necessary to ensure compliance with the order that was contravened.
As to any proposed order for imprisonment I note the following provisions of section 112AE:
(1)A sentence of imprisonment imposed on a person pursuant to paragraph 112AD(2)(d) shall be expressed to be :
(a)for a specified period of 12 months or less; or
(b)for a period ending when the person :
(i)complies with the order concerned; or
(ii)has been imprisoned pursuant to the sentence for 12 months or such lesser period as is specified by the court;
whichever happens first
Subsection (2) provides:
A court shall not sentence a person to imprisonment pursuant to paragraph 112AD(2)(d) unless the court is satisfied that, in all the circumstances of the case, it would not be appropriate for the court to deal with the contravention pursuant to any of the other paragraphs of subsection 112AD(2).
I turn now to consider what is the appropriate sanction in this particular case. I am assisted in this consideration by the convenient gathering of authority by Ryan FM in Bonilla & Whittall (No.1) 2003 FMCAfam 101:
A sanction imposed for contravention of an order must be proportionate to the contravention. That is the sanction must be of a severity which is appropriate in all the circumstances.
A court should not impose a sentence that is more severe than that which is necessary to achieve the purpose for which it is imposed (Sahari (1976) FLC 90-086). Other principles of sentencing need to be considered when determining the appropriate sanction, including the circumstances of the contravention and factors subjective to the person found to have contravened the orders. The court can consider factors such as character, age, means and physical or mental condition and conduct since the contravention has occurred, for example, contrition (Schwarzkopff (1992) FLC 92-303). Even-handedness in outcomes for comparable contraventions is important.
Having regard to the findings of fact made in these proceedings, I find that a community based order (even if available in NSW which it is not), bond, or financial penalty is not proportionate to the contumacious contravention of the court orders in which the respondent has engaged.
With full knowledge of the Orders, the Respondent has pursued a scheme whereby not only have the orders not been complied with but he has put beyond the Court or the Applicant the ability to rectify the steps taken by him. He has been given numerous opportunities in the course of these proceedings to rectify the situation but has declined to do so except under the extortionate conditions referred to in the various telephone calls made by him to the Applicant. This in the circumstance where I have found that the funds obtained under the mortgage remain under the control of the Respondent and it remains possible for him to comply with the Orders. The failure to comply continues.
The Respondent appears content to undergo whatever penalty is imposed upon him for this contravention and then to get on with his life satisfied in the knowledge that he has deprived the Respondent of any entitlement she may have to the former matrimonial home. There is clearly no contrition.
I accept that the Respondent is a person of apparent good character and I am unaware of any other contraventions committed by him. I note his age state of health as disclosed by him.
The Respondent has failed to comply with orders of the Court in the past and has avoided apprehension with full knowledge of a warrant being issued for his arrest. He only again came before the Court after being discovered by police and arrested under a warrant issued from this Court.
It is difficult to imagine a more blatant contravention of an order of this type. In full knowledge of the Orders he has continued with a mortgage transaction and then disposed of or secreted the total proceeds. There is no remorse but, instead, harassment of the Applicant seeking her to withdraw her property proceedings on pain of losing all.
In Ibbotsen v Wincen (1994) FLC 92-469, the Full Court of the Family Court highlighted the community’s interest that court orders are obeyed and said that “blatant disregard of the authority of the court and of the rule of law in our society …gives rise to consternation and concern within the community generally”. (See also Schwarzkopff.) These sentiments are consistent with those of the Full Court in Tate (2003) Fam CA 112 (delivered 13 February 2003 – unreported). Although the Full Court was concerned with a s.112AP breach of a monetary order, it referred with apparent approval to the discussion in the Australian Law Reform Commission report No. 35 “Contempt” saying:
“At pars 516-517, the ALRC pointed out that in the past there had been a reluctance on the part of courts to impose punitive sanctions in the case of mere disobedience in the absence of contumacy, that is, stubborn resistance and defiance of authority. The Commission suggested that this situation has changed in recent times and that courts have increasingly imposed punitive sanctions in cases of disobedience of court orders where there was no flagrant or repeated disobedience or overt challenge to the courts authority. While this has no direct relevance to the present case, in that we are not dealing with mere disobedience of court orders, it highlights the seriousness of contumacious disregard and defiance of court orders.” At par 65.
Here is a contumacious disregard and defiance of court orders. There is no other proportionate or appropriate penalty other than imprisonment. I take into account that if the Respondent is imprisoned, he will not be entitled to remissions and must serve the full penalty.
I also note that the Respondent has been in custody since being arrested on 8 April 2004. He continues to hold the process of the Court and the legislative provisions under the Family Law Act in low regard. He continues to resist the Orders the subject of this Application. A suspension of any part of the sentence to be imposed will do little in the mind of the Respondent and is not appropriate in these particular circumstances. It is appropriate, however, that any sentence of imprisonment to be imposed takes into account the time already spent in custody awaiting the completion of these proceedings.
This case is serious and a substantial sentence is necessary to effectively address the contravention, punishment, and deterrence. Deterrence applies to the individual. It is also of general interest to the community. The community needs to be aware that courts will not lightly tolerate breaches of orders. Additionally, it needs to be aware of the real and serious consequences if family law orders in particular are contravened.
I note the need to ensure comparability in sentencing. There have been no submissions made to the Court as to sentencing in like circumstances.
In these particular circumstances, it is appropriate that the Respondent be sentenced to the maximum period that this Court is able to order, 12 months. In some respects even this maximum period does not appear sufficient in the particular circumstances of this case and given the particular attitude of this Respondent.
I accept that the Court must take into account the period that the Respondent has already spent in custody since the date of his arrest on 8 April 2004 and awaiting the conclusion of these proceedings.
The Respondent is sentenced to a period of 12 months imprisonment to date from the date of his arrest, namely 8 April 2004. A warrant for the Respondent’s committal will issue in the usual way.
As I have concluded that the Respondent remains in control of the funds obtained by him, I am also satisfied that he is able to comply with the Orders previously made. It is appropriate that this Court order that the Respondent repay all amounts owing under the mortgage and then comply with the previous Orders.
It is also appears on the evidence before me that the Respondent may have committed a contempt of the Court under section 112AP of the Family Law Act and I refer the matter to the Sheriff for consideration as to whether an Application should be made for the Respondent to be dealt with under that provision, not in relation to this contravention but in relation to the scheme that he has embarked upon and which is designed to defeat the authority of this Court under the Family Law Act.
It is also appropriate that the Respondent pay the Applicant’s costs of these proceedings in that they have been brought solely because of the Respondent’s intentional failure to comply with the Orders made by this Court; the Respondent has the funds remaining which were advanced under the mortgage and the Applicant is in a much worse financial position; and the Respondent has been entirely unsuccessful in these proceedings.
I certify that the preceding one hundred and fourteen (114) paragraphs are a true copy of the reasons for judgment of Donald FM
Associate: Helen W
Date: 20 July 2004
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