Winter and Winter
[2010] FamCA 282
•5 March 2010
FAMILY COURT OF AUSTRALIA
| WINTER & WINTER | [2010] FamCA 282 |
| FAMILY LAW – CONTEMPT – PROPERTY – Family Court of Australia order freezing assets – Assets offered as security in Supreme Court of Queensland proceedings – Whether such was a dealing with the assets contrary to the order of this Court – Meaning of “in any way dealing with” – Existence of the order of this Court disclosed to Supreme Court – Contempt application dismissed |
| Family Law Act 1975 (Cth) s 112AP |
| APPLICANT: | Ms Winter |
| RESPONDENT: | Mr Winter |
| FILE NUMBER: | BRC | 3781 | of | 2008 |
| DATE DELIVERED: | 5 March 2010 |
| PLACE DELIVERED: | Brisbane |
| PLACE HEARD: | Brisbane |
| JUDGMENT OF: | O’Reilly J |
| HEARING DATE: | 5 March 2010 |
REPRESENTATION
| COUNSEL FOR THE APPLICANT: | Mr McConaghy |
| SOLICITOR FOR THE APPLICANT | N/A (Direct brief) |
| COUNSEL FOR THE RESPONDENT: | Mr Blaxland |
| SOLICITOR FOR THE RESPONDENT: | Wantrup & Associates |
Orders
IT IS ORDERED
The wife’s contempt application filed on 27 November 2009 is dismissed.
The wife’s application in a case for the appointment of a receiver and other relief filed on 1 October 2009 is dismissed
The wife’s contempt application filed on 28 January 2010 is dismissed.
There be no order as to costs in relation to any of those applications.
AND IT IS FURTHER ORDERED
The wife’s contravention application filed 27 November 2009 against the first respondent concerning disclosure be listed for further hearing as a part heard matter at 9.30am on Thursday 18 March 2010 before the Honourable Justice O’Reilly.
The wife’s contravention application filed 27 November 2009 against the third respondent concerning disclosure be listed for further hearing as a part heard matter at 9.30am on Thursday 18 March 2010 before the Honourable Justice O’Reilly.
AND IT IS FURTHER ORDERED
The wife by her legal representatives inspect the documents disclosed by the husband and the third to sixth respondents in the list of documents filed 25 February 2010 between 9.00am and 5.00pm on Monday 8 March 2010 at the offices of Bennett and Philp Lawyers, Brisbane.
The wife by her legal representatives is to be permitted by Bennett and Philp Lawyers to take copies of such documents as may be requested at the cost of 20 cents per page.
The wife’s costs be set out in an invoice to the wife to be prepared by Bennett and Philp Lawyers and be paid by her within seven days after her receipt of the invoice.
Registrar Green’s orders 3, 5 and 6 made on 12 January 2010 are vacated.
The parties use their best endeavours to agree and prepare an indexed and paginated bundle of core documents by 4.00pm on Friday 12 March 2010.
The wife file and serve:
(a)affidavits in chief of herself and her witnesses including any valuation witnesses;
(b)a list of any existing filed affidavits on which she intends to rely; and
(c)a current financial statement
by 4.00pm on Wednesday 17 March 2010.
The husband file and serve:
(a)affidavits in chief of himself and his witnesses including any valuation witnesses and including in response to the wife’s affidavits;
(b)a list of any existing filed affidavits on which he intends to rely; and
(c)a current financial statement
by 4.00pm on Monday 22 March 2010.
The wife file and serve any affidavits strictly in response to the husband’s material by 4.00pm Thursday 25 March 2010.
The parties must notify each other and, on notice to each other, the Associate by email as soon as practicable if at any stage either considers that the trial of the matter may proceed beyond 8 days.
The parties, on notice to each other, have liberty to apply to the Associate by email if further or other procedural orders are required.
NOTATIONS
Orders 1, 2, 4 and 7-11 of the orders made by Registrar Green on 12 January 2010 remain in force.
The matter is listed for a compliance check before Registrar Kane at 12.20pm on 30 March 2010.
The trial is listed to commence at 10.00am on 12 April 2010 for 8 days.
IT IS NOTED that publication of this judgment under the pseudonym Winter & Winter is approved pursuant to s 121(9)(g) of the Family Law Act 1975 (Cth)
| FAMILY COURT OF AUSTRALIA AT BRISBANE |
FILE NUMBER: BRC 3781 of 2008
| MS WINTER |
Applicant
And
| MR WINTER |
Respondent
REASONS FOR JUDGMENT
EX TEMPORE
Wife’s contempt application filed 27 November 2009
Paragraph 1(a)
By contempt application filed 27 November 2009, par 1(a), the wife alleges against the husband that on three dates, as set out in the statement of alleged contempt, namely 15 July, 30 July, and 19 August 2008 at the Supreme Court of Queensland George Street Brisbane the husband in deliberate breach of an injunction made in this Court on 29 April 2008 caused the assets of A Capital Limited (A Capital) to be encumbered by offering those assets as security in litigation before the Supreme Court of Queensland in action ….
Despite the application having been on foot since 27 November 2009, and having been listed several times already but not proceeded with for various reasons, Mr McConaghy today has conceded that par 1(a) is not capable of constituting a contempt because it is not possible actually to encumber assets merely by offering them as security.
My order thus will be that par 1(a) of the contempt application is dismissed.
Paragraph 1(b)
By application filed 27 November 2009, par 1(b), the wife alleges against the husband that on the same three dates and at the same place he dealt with A Capital’s assets by offering them as security in the same Supreme Court proceedings.
The facts, insofar as it is necessary to state them for present purposes, are that in the Supreme Court proceedings the husband in his capacity as a director of A Capital offered in support of the worth of an undertaking as to damages related to injunctive relief sought in that Court livestock and machinery owned by A Capital which had a value in excess of $400,000 and that he would undertake to keep those assets unencumbered until further order and/or such sum could be paid in cash as security for the undertaking as to damages.
The order made in this Court on 29 April 2008 was by Bell J. Paragraph 2, which bound the husband, A Capital and others, was as follows:
The Respondents and each of them by their servants and agents be restrained from removing, disposing of, selling, mortgaging, encumbering or in any way dealing with the Real Properties or with any motor vehicle, machinery or livestock or other property situated at the Real Properties referred to in Order 1(b) without the consent of the Applicant or by leave of the Court. (italics added)
It is plain that the acts alleged against the husband are not capable of constituting any removal, disposal, selling, mortgaging or encumbering of the assets. However, the question has arisen for preliminary determination whether the acts alleged against the husband fall into the category of in any way dealing with the livestock and equipment.
Mr McConaghy submits that the phrase in any way dealing with the assets is sufficiently wide as to constitute either a permanent alienation of the assets or something less than that and that the offering of the livestock and machinery as security in support of the undertaking for damages in the Supreme Court action may begin in something less than an alienation but move to a state of permanent alienation.
Mr McConaghy accordingly submits that the acts of the husband fall within the expression in any way dealing with.
Mr Blaxland submits that application of the ejusdem generis rule has effect that dealing, in the context of par 2 of the order, is a word simply to cover what may not have been covered precisely by the words “removing, disposing of, selling, mortgaging or encumbering” but necessarily connotes an act to similar effect such that to ground a breach of the order something must actually happen to the property.
Mr Blaxland thus submits that it is insufficient to constitute a dealing if, for example, something is offered or advertised for sale but no sale eventuates, but at the point where an offer is taken up and a contract eventuates the line is crossed so as to constitute a dealing. In this case, an offer was made but it was not taken up.
Mr Blaxland submits that the order catches an alienation or actual devaluation of the property without consent of the applicant or leave of the Court, and that thus the order prohibited completion of a transaction that would alienate or devalue the assets but not an act in the commencement of such a process.
It is not controversial that in interpreting court orders the rules of statutory interpretation may apply. The words in the order in any way dealing with classically invite consideration of application of the ejusdem generis rule.
In my view however the rule does not apply in this particular case because the words in any way are words of the widest possible import and thus are capable of and in my view in the context of the order having regard to its background purpose are intended to catch any and all manner of dealings with the property described in the order not just those having the characteristics of actual alienation or devaluation of the property.
The next question is whether the result of the act is important or whether it is sufficient that the act was done. The purpose of the existence of contempt proceedings is to uphold the authority of the Court. This would not be met if contempts were limited to what I might describe as “successful” acts in defiance of an order as opposed to acts in defiance but which might not be successful: for example, it would be awkward to distinguish difference between the circumstance of the actual demolition of a building as opposed to the circumstance of arranging a demolition expert to perform that act but by some interception the demolition did not occur. In this example, the instruction to demolish is the defiant act, regardless of whether the instruction was or was not successfully carried out.
A further example provided by Mr McConaghy is apt. If a person under restraint not to deal with cattle mustered the cattle to the front gate and put up a sign “Free cattle take as many as you wish” but then in fact no person came by and took any it could not be said that such was not a dealing and, indeed, a dealing with the cattle contrary to the intent of such hypothetical order.
The purpose and intent of par 2 of the order made by Bell J on 29 April 2008 was to ensure in effect that the assets were frozen in the sense of not being dealt with in any way until further order.
The offering by the husband to the Supreme Court of Queensland not to deal with the livestock and machinery but in the context of supporting an offer of $400,000 cash by way of security for an undertaking as to damages on the one hand may be said to be completely consistent with par 2 of Bell J’s order on the basis that all the husband did was similarly undertake to the Supreme Court of Queensland that he would not deal with the assets. However, as the context of the offer to the Supreme Court of Queensland not to deal with the livestock and machinery was to support the cash amount offered by way of security for the undertaking as to damages in essence the livestock and machinery were offered as security for the undertaking as to damages.
I rule therefore that the alleged acts of the husband if proved to have occurred or indeed if admitted to have occurred are capable of constituting a dealing with the livestock and assets in a manner prohibited by the restraint order.
During the course of argument Mr McConaghy stated that the wife would not proceed with the third allegation relating to 19 August 2008.
The evidence of the wife is constituted by an affidavit filed on 27 November 2009 by Mr MC and an affidavit filed on the same date by the wife.
Mr MC’s affidavit is limited to pars 10 and 13 (c), (d) and (e) and annexures RMCF1 and RMCF4 which are two affidavits of the husband filed in the Supreme Court of Queensland proceedings; and a transcript of proceedings before the Court on 31 July 2008, in particular p64 lines 10 to 50; p65 lines 1 to 30; p65 line 35 to p68 line 20; and pp70-71.
In relation to Mr Winter’s first affidavit, that is annexure RMCF1, Mr McConaghy relied in particular on pars 4 and 5 which are as follows:
4.I am a director of [A Capital] Limited a company incorporated in New Zealand (“[A Capital]”), and [A Capital] has unencumbered assets in Queensland comprising livestock and machinery which in my opinion has a market value in excess of $400,000. …
5.Accordingly, I am authorised by the Board of Directors of [A Capital] to undertake to keep its unencumbered assets in the jurisdiction until further Order of the Court in this matter.
In relation to the second affidavit, annexure RMCF4, the paragraph relied upon by Mr McConaghy is par 17:
17.In paragraphs 4 and 5 of my previous affidavit I stated that the Third Applicant had unencumbered assets in Queensland with a market value in excess of $400,000.00 which it undertook to keep in the jurisdiction until further order of the Court in this proceeding. That security remains in place for the benefit of the Respondents, and is recorded in paragraph 3 of the undertakings contained in the Order made on 16 July 2008.
Paragraphs 10 and 13(c), (d) and (e) of Mr MC’s affidavit do not of themselves offer evidence but merely refer to the affidavits and transcript.
The husband has not adduced evidence.
Now, these are contempt proceedings. I have already ruled that the acts identified by Mr McConaghy are capable of constituting a contempt of the restraint order. It is, however, an element of contempt proceedings under s 112AP of the Family Law Act 1975 (Cth) that the act involves a flagrant challenge to the authority of the Court. Further, elements include that the alleged comtemnor knew of the order and that the acts complained of were deliberate breaches of it and were not caused by mere inadvertence or mistake. Thus, unless Mr McConaghy is able to discharge the burden of proof that the acts relied on were deliberate acts and in deliberate breach of the injunction the contempt application must fail.
Mr McConaghy relies upon pars 12 to 17 of his written submissions. Paragraph 14 refers to three orders made by the Supreme Court of Queensland which are not in evidence. The thrust of Mr McConaghy’s submission is that the issue of flagrancy is to be determined having regard to the nature of the breaches rather than intent behind them and that the breach by the husband involves a flagrant challenge to the authority of the Court because it is clear that he understood that the order prevented him from dealing with the assets in the manner in which he did, that is, by making them available as security and offering them as security in support of an undertaking as to damages given to the Supreme Court of Queensland as part of the seeking and obtaining of injunctive relief in that Court.
Mr McConaghy submits that the evidence shows that the action of the husband in offering the assets as security was a deliberate act which occurred on a number of occasions, indeed, two occasions now alleged to be the subject of the alleged contempt, 15 July and 30 July 2008. Thus, the actions by him were deliberate and certainly more than casual, accidental or unintentional.
Mr Blaxland, however, points to the wife’s own evidence as showing and supporting a submission made by him that, on the evidence as a whole, it is impossible for the husband’s act in offering the assets as security in the Supreme Court at the same time to have been an act in contempt of the order of this Court. He points to and relies upon par 6 of the husband’s affidavit, annexure RMCF1, which is the first affidavit by the husband filed in the Supreme Court proceedings:
6.Exhibited hereto and marked with the letter W-3 is a copy of Orders obtained by my former wife [Ms Winter] in the Family Law Court before Justice Bell on 29 April 2008. These Orders were obtained ex-parte by [the wife] pursuant to an application dated 22 April 2008.
Mr Blaxland, in oral submissions, put that the obligation of the wife is to prove contempt beyond reasonable doubt and that on the evidence before the Supreme Court, not only par 6 of the husband’s affidavit but also extracts from the transcript of the hearing before Mullins J to which I will shortly refer, show that the husband, frankly and candidly, in the one act of offering the assets for security to the Supreme Court disclosed to the Supreme Court the existence of the freezing order in this Court.
It was put that this if the husband had intended to be in contempt he would not have included par 6 in his affidavit and disclosed to the Supreme Court the freezing orders in this Court, such that his frank disclosure to the Supreme Court is inconsistent with any deliberate contempt of the order of this Court or indeed any contempt of it.
Mr Blaxland put that, in relation to the second alleged contempt, that is based upon, in part, par 17 of the second affidavit, the same obtains because par 17 of that affidavit refers back to pars 4 and 5 of his earlier affidavit but, of course, to which par 6 immediately follows.
Mr Blaxland thus put that whilst the husband’s offer of the security of the assets to the Supreme Court plainly enough was a deliberate act by him, any consequence of that act amounting to a dealing with those assets in contempt of the order of this Court was not wilful by him, but accidental or inadvertent in the sense that, as might be seen to be plain, according to his submission, the husband would not have done that and flagged to the Supreme Court that he was in contempt of an order of this Court if indeed he had had any notion of that eventuality or circumstance.
In reply, Mr McConaghy submitted that the disclosure of the order of this Court to the Supreme Court of Queensland might be relevant to punishment if there is a conviction but not to the question whether there was a deliberate act intending to breach the order of this Court. I reject that submission. In my view, the disclosure of the order of this Court to the Supreme Court is at the heart of the relevance of the husband’s understanding of his actions.
Further in reply, Mr McConaghy submitted that the husband’s intention is not relevant such that if his act was deliberate and breached the order that is enough to amount to a contempt. I reject that submission and, indeed, when pressed, Mr McConaghy agreed with the proposition that even if the act which constitutes the breach is deliberate if the actor of that act never intended to breach an order of this Court such that its breach was inadvertent then such a person is not a contemnor of that order. In my view that is a correct statement of the position.
I accept, on all of the evidence, that whilst the actions of the husband were a breach of Bell J’s order by constituting a dealing with the assets, the subject of my earlier ruling, on all of the evidence the wife has not discharged the onus of proof beyond reasonable doubt that his act knowingly was a deliberate breach of the order as opposed to the act itself. Further, I would make the positive finding that the husband did not at the time of the acts, on the evidence, have any comprehension that his offering of security to the Supreme Court at once may have put him in the position of being in contempt of the order of this Court. Indeed, his disclosure of the order of this Court to the Supreme Court of Queensland shows just that. Otherwise, I would infer that it would not have been disclosed.
Further, the cross‑examination of the husband by Mr Morris QC before Mullins J at pp64-68 and under re‑examination at pp70-71 in my view makes plain that the husband had no idea that in offering the security to the Supreme Court he was likely to place himself in the position of being a contemnor in this Court.
Paragraph 2
The wife now seeks that par 2 of the contempt application filed 27 November 2009 be dismissed and I so order.
Wife’s application for appointment of receiver and other relief filed 1 October 2009
The wife now seeks also that her application filed 1 October 2009 for the appointment of a receiver and other relief be dismissed and I so order.
Wife’s contempt application filed 28 January 2010
The wife seeks also that her application contempt filed 28 January 2010 be dismissed and I so order.
Costs
The husband does not seek costs. It is convenient to order that there be no order as to costs in relation to any of the wife’s applications.
I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of the Honourable Justice O’Reilly
Associate:
Date: 14 April 2010
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