ZABER & ZABER (No.2)
[2018] FCCA 91
•19 January 2018
FEDERAL CIRCUIT COURT OF AUSTRALIA
| ZABER & ZABER (No.2) | [2018] FCCA 91 |
| Catchwords: FAMILY LAW – Contempt – penalty – costs. |
| Legislation: Family Law Act 1975, ss.112AD, 112AP, 117 Crimes Act 1914, s.19B |
| Cases cited: Consolidated Press v Morgan (1965) 112 CLR 483 Cachia v Hanes [1994] 179 CLR 403 In the marriage of Briese (1986) FLC 91-713 |
| Applicant: | MS ZABER |
| Respondent: | MR ZABER |
| File Number: | SYC 3308 of 2014 |
| Judgment of: | Judge Kemp |
| Hearing date: | 27 November 2017 |
| Date of Last Submission: | 27 November 2017 |
| Delivered at: | Sydney |
| Delivered on: | 19 January 2018 |
REPRESENTATION
| Counsel for the Applicant: | Mr Campton SC |
| Solicitors for the Applicant: | Swaab Attorneys |
| Counsel for the Respondent: | Mr Timmins |
| Solicitors for the Respondent: | Paterson Byfield & Bryen |
THE COURT ORDERS THAT in terms of its findings made on 13 January 2017 as to the husband being guilty of a contempt of Court, arising out of charges 2 and 3, as set out in the wife’s contempt application filed on 19 June 2015, the husband:
Pay a fine pursuant to s.112AD(2) of the Family Law Act1975 (“the Act”) of $10,000.00, within 35 days of today’s date.
Within 21 days from the date of these orders, surrender and provide to the wife’s solicitors, Swaab Attorneys, Level 1, 20 Hunter Street, Sydney NSW 2000, copies of all documents and information in his possession or control produced on subpoena by Employer A or in connection with same in the proceedings number: SYC3308/2014 or received from the wife or on behalf of the wife by way of discovery or disclosure.
If the husband has complied with order 2, above, and has provided, within 7 days of that compliance, written confirmation in the form of an Affidavit filed and served within that time period, the fine referred to in order 1, above, is reduced to $5,000.00.
The husband pay the wife’s costs on a solicitor/client basis, with such costs to be agreed and in default of agreement within 35 days of today’s date, such costs are to be assessed in terms of order 5, below.
If the parties are unable to agree on the quantum of costs ordered, such costs are to be referred for taxation/assessment to the Costs Assessment Registrar of the Family Court of Australia in accordance with Chapter 19 Family Law Rules 2004 with the Registrar to make such directions as are necessary to implement that process and further to take into account any costs orders already made on an interim/interlocutory basis.
The matter is, subject to the above, otherwise, removed from the active pending cases list.
IT IS NOTED that publication of this judgment under the pseudonym Zaber & Zaber (No.2) is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYC 3308 of 2014
| MS ZABER |
Applicant
And
| MR ZABER |
Respondent
REASONS FOR JUDGMENT
Introduction
On 13 January 2017, the Court delivered its judgment after the hearing of a contempt application bought by the applicant wife against the respondent husband. That judgment has been made Exhibit “Court 1” on the current application before it. The terms of Exhibit “Court 1” are specifically incorporated as if fully set out herein. On that occasion, the Court made the following declarations:
(1)With respect to Charge 2, as set out in the wife’s contempt application filed on 19 June 2015, that the respondent husband is guilty of a contempt of Court in that he deliberately disclosed the contents of documents obtained by way of discovery and the issue of a subpoena in these proceedings to another person, without permission of the Court.
(2)With respect to Charge 3, as set out in the wife’s contempt application filed on 19 June 2015, that the respondent husband is guilty of a contempt of Court in that he deliberately provided copies of the contents of documents obtained by way of discovery and the issue of a subpoena in these proceedings to another person, without permission of the Court.
and orders:
(3)By consent, the matters the subject of Charge 1 as set out in the wife’s contempt application filed on 19 June 2015, are withdrawn and, otherwise, dismissed.
(4)The husband file and serve any Affidavit he wishes to rely on with respect to the question of penalty within 30 days of today’s date.
(5)The matter be adjourned to 7 March 2017 at 9.15am for mention with respect to the question of penalty (if any) to be applied.
(6)The wife have leave to issue a subpoena directed to any of the husband’s legal practitioners to produce documents, subject to any claim for legal professional privilege, such subpoena to be made returnable on the above date.
On 7 March 2017, the matter came before the Court (then constituted by Judge Sexton) and the following directions were made:
(1)The matter be adjourned to 27 November 2017 at 10.00 am before Judge Kemp for hearing for no longer than 2 hours.
(2)The wife’s costs of today be reserved.
(3)No later than 14 days prior to the hearing, the wife file and serve a minute of order sought at hearing.
(4)No later than 7 days prior to the hearing, the husband file and serve a minute of order sought at hearing.
On 25 October 2017, the wife’s solicitor, in compliance with the above directions, forwarded the wife’s proposed minute of order and notations (Exhibit “A”), which were to the following effect:
(1)That pursuant to s. 112AE(1) of the Family Law Act 1975 (Cth) (“the Act”) the husband serve an imprisonment sentence of up to three (3) months at the discretion of the Court provided that the sentence of imprisonment is SUSPENDED upon condition that for a period of eighteen (18) months from the date of these orders, the husband enter into a bond upon the condition that he be of good behaviour.
OR
That pursuant to s.112AF(4) of the Act, that the husband be placed on a bond upon condition that he be of good behaviour for a period of eighteen (18) months from the date of these orders.
(2)That upon the husband entering into a bond pursuant to Order 1 above, the husband is to provide $15,000.00 paid to the Sydney Registry Manager of the Federal Circuit Court of Australia, to be held as surety for a period of eighteen (18) months from the date of these orders. That if the husband breaches the bond, $15,000.00 will be paid to the wife within twenty-one (21) days of any order being made by the Court finding that the husband has breached the bond.
(3)That within seven (7) days from the date of these orders, the husband surrender and provide to the wife's solicitors, Swaab Attorneys, Level 1, 20 Hunter Street, Sydney NSW 2000, copies of all documents and information in his possession or control produced on subpoena by Employer A or in connection with same in the proceedings number: SYC 3308/2014 or received from the wife or on behalf of the wife by way of discovery or disclosure.
(4)That within fourteen (14) days from the date of these orders, the husband do all acts and things necessary to recover from any third party or entity and provide to the wife's solicitors, Swaab Attorneys, Level 1, 20 Hunter Street, Sydney NSW 2000, copies of all documents and information produced on subpoena by Employer A or in connection with same in the proceedings number: SYC 3308/2014 or received from the wife or on behalf of the wife by way of discovery or disclosure.
(5)That pursuant to s.112AD(2)(c) of the Act, that the husband pay a fine of $10,000.00 within twenty-one (21) days from the date of these orders.
(6)That within twenty-one (21) days from the date of these orders, the husband pay the wife's costs of and incidental to the contempt and contravention proceedings on a solicitor/client basis in the amount of $74,638.00 or in the alternative on a party/party basis, with such costs to be agreed and in default of agreement within twenty-one (21) days to be taxed.
NOTATIONS:
(7)The s.79 property settlement proceedings were finalised when the parties entered into consent orders, subsequently made in Chambers by his Honour Judge Kemp on 11 May 2015.
(8)The subject subpoena to Employer A was filed in the s.79 proceedings on 18 March 2015.
(9)That pursuant to s.112AD(2)( c) of the Act a person cannot be fined more than 60 penalty units.
(10)That pursuant to the Crimes Amendment (Penalty Unit) Act 2017 (Cth), one penalty unit is $210.00.
On 15 November 2017, the husband’s solicitor, in compliance with the above directions, forwarded the husband’s proposed minute of order (Exhibit “1”), which was to the following effect:
(1)That Pursuant to Section 19B of the Crimes Act 1914 (Cth), without proceeding to conviction, the charge of contempt of court be dismissed.
(2)That each party should pay his or her own costs.
OR
(3)That pursuant to Section 19B of the Crimes Act 1914 (Cth), without proceeding to conviction in respect of the charge of contempt of court, discharge the husband upon him entering into a recognizance to be of good behaviour for a period of 6 months from today.
(4)That each party should pay his or her own costs.
OR
(5)That pursuant to Section 112AD of the Act, require the husband to enter into a bond to be of good behaviour for a period of 6 months from today.
(6)That each party should pay his or her own costs.
Section 19B of the Crimes Act1914 (Cth) states as follows:
Discharge of offenders without proceeding to conviction
(1) Where:
(a)a person is charged before a court with a federal offence or federal offences; and
(b)the court is satisfied, in respect of that charge or more than one of those charges, that the charge is proved, but is of the opinion, having regard to:
(i)the character, antecedents, age, health or mental condition of the person;
(ii)the extent (if any) to which the offence is of a trivial nature; or
(iii)the extent (if any) to which the offence was committed under extenuating circumstances;
that it is inexpedient to inflict any punishment, or to inflict any punishment other than a nominal punishment, or that it is expedient to release the offender on probation;
the court may, by order:
(c) dismiss the charge or charges in respect of which the court is so satisfied; or
(d) discharge the person, without proceeding to conviction in respect of any charge referred to in paragraph (c), upon his or her giving security, with or without sureties, by recognizance or otherwise, to the satisfaction of the court, that he or she will comply with the following conditions:
(i)that he or she will be of good behaviour for such period, not exceeding 3 years, as the court specifies in the order;
(ii)that he or she will make such reparation or restitution, or pay such compensation, in respect of the offence or offences concerned (if any), or pay such costs in respect of his or her prosecution for the offence or offences concerned (if any), as the court specifies in the order (being reparation, restitution, compensation or costs that the court is empowered to require the person to make or pay):
(A) on or before a date specified in the order; or
(B)in the case of reparation or restitution by way of money payment or in the case of the payment of compensation or an amount of costs--by specified instalments as provided in the order; and
(iii)that he or she will, during a period, not exceeding 2 years, that is specified in the order in accordance with subparagraph (i), comply with such other conditions (if any) as the court thinks fit to specify in the order, which conditions may include the condition that the person will, during the period so specified, be subject to the supervision of a probation officer appointed in accordance with the order and obey all reasonable directions of a probation officer so appointed.
(1A)However, the court must not take into account under subsection (1) any form of customary law or cultural practice as a reason for:
(a)excusing, justifying, authorising, requiring or lessening the seriousness of the criminal behaviour to which the offence relates; or
(b)aggravating the seriousness of the criminal behaviour to which the offence relates.
(1B) In subsection (1A):
"criminal behaviour" includes:
(a)any conduct, omission to act, circumstance or result that is, or forms part of, a physical element of the offence in question; and
(b)any fault element relating to such a physical element.
(2)Where a court proposes to discharge a person in pursuance of an order made under subsection (1), it shall, before making the order, explain or cause to be explained to the person, in language likely to be readily understood by him or her:
(a) the purpose and effect of the proposed order;
(b)the consequences that may follow if he or she fails, without reasonable cause or excuse, to comply with the conditions of the proposed order; and
(c)that any recognizance given in accordance with the order may be discharged or varied under section 20AA.
(2A)A person is not to be imprisoned for a failure to pay an amount required to be paid under an order made under this section.
(3)Where a charge or charges against a person is or are dismissed, or a person is discharged, in pursuance of an order made under subsection (1):
(a)the person shall have such rights of appeal on the ground that he or she was not guilty of the offence or offences concerned with which he or she was charged as he or she would have had if the court had convicted him or her of the offence or offences concerned; and
(b)there shall be such rights of appeal in respect of the manner in which the person is dealt with for the offence or offences concerned as there would have been if:
(i)the court had, immediately before so dealing with him or her, convicted him or her of the offence or offences concerned; and
(ii)the manner in which he or she is dealt with had been a sentence or sentences passed upon that conviction.
(4)Where a person is discharged in pursuance of an order made under subsection (1), the court shall, as soon as practicable, cause the order to be reduced to writing and a copy of the order to be given to, or served on, the person.
The Court notes that proposed orders 2, 4 & 6 as sought by the husband are identical, in that the husband seeks that each party pay their own costs. Therefore, the Court will rely on proposed order 6 only in that regard.
In relation to proposed orders 1 and 3 as sought by the husband, Mr Timmins of Counsel, appearing for the husband, conceded that the Commonwealth Crimes Act was not applicable, that the Act was and that, therefore, orders 1 and 3 as sought were not, relevantly, applicable.
Therefore the proposed orders 5 and 6 as sought by the husband are those that will be considered by the Court.
Mr Campton of Senior Counsel, appearing for the wife, sought in his oral submissions that the husband’s sentence should be by way of a good behaviour bond, subject to other conditions, (noting that a bond would require the consent of the husband and that the husband had confirmed he would not enter into a bond, notwithstanding his proposed order 5). Mr Campton SC submitted that if the husband would not enter a bond, the only other options available were a fine or imprisonment. The wife sought, as an alternative to a good behaviour bond, a fine, in the amount of $10,000.00. Mr Campton SC submitted that the maximum fine would be $12,600.00, given notations 9 and 11, as referred to in paragraph 3, above.
The Evidence
The following documents were placed into evidence as follows:
Exhibit No
Document
Tendered by
A
Wife’s proposed minute of order
The wife
B
Four (4) identified emails dated 2 September 2015 and 4 September 2015 between York Law and Swaab Attorneys
The wife
C
Letter from Swaab Attorneys to Patterson Byfield dated 24 February 2017, together with a response dated 5 October 2016 (agreed it was obviously the wrong date)
The wife
D
Email from Mr Campton SC to Mr Timmins dated 10 October 2016 and Mr Timmins’ response dated 17 October 2017
The wife
E
Two (2) Retainer Agreements (Solicitor and Client and Counsel and Solicitor) and supporting invoices
The wife
1
The husband’s proposed minute of order
The husband
2
Two (2) documents (first being 2 emails dated 29 April and 30 April 2015 and the second being a letter from York Law to the husband dated 13 April 2016)
The husband
The wife relied on paragraphs 12 to 18 of her Affidavit sworn and filed on 17 May 2016. The wife was not cross-examined as to those paragraphs. The wife’s evidence was as follows:
a)On 5 January 2015, during the course of the property proceedings, but prior to the Consent Orders being made on 11 May 2015, the husband said to her, amongst other things, words to the following effect: “You may get some money out of me but I will ensure that you end up with nothing at the end”.
b)The wife contends that the husband has engaged in a calculated and exceptional course of conduct to improperly use documents and information obtained by way of compulsory forensic processes in these proceedings for ulterior purposes to occasion damage and loss to her.
c)Following the husband sending the letter to her employers, Mr G ceased speaking to her on a day to day basis and appeared very cold to her. It came to the point that she dreaded going to work each day as she felt so uncomfortable because she felt that Mr G had believed the allegations made by the husband in the abovementioned letter.
d)On 8 October 2015, the wife resigned from Employer A Pty Ltd, where she had worked for 17 years, as she felt so distressed that after such a long period of what she had considered to be very loyal employment, doubts had been cast over her reputation which appeared to have caused a doubt as to her integrity in the minds of Mr G and Mr H.
e)The wife had intended to continue to work for at least a further 5 years. She was paid a monthly salary of $4,347.50 at the time of leaving the company. She received a net amount of $29,288.60, which consisted of salary of $1,254.00 (for the period 1 to 8 October 2015), gross annual leave of $21,807.06, gross long service leave of $13,365.11 less tax of $7,137.00.
f)The wife annexed notices of income tax assessment for the years ended 30 June 2012, 2013, 2014 and 2015, which disclosed her taxable income as $36,470.00, $38,811.00, $39,929.00 and $53,018.00 for those respective tax years.
g)On 9 March 2016, after the wife left her employment, she was unable to properly sleep, was continually crying and was feeling extremely anxious. The wife commenced consulting with a psychotherapist, Ms J at …Psychotherapy Centre. The wife still continues to consult with Ms J and can only consult with her on 10 occasions per annum in terms of receiving Medicare rebates for those consultations. The wife pays $145.00 per session and receives a Medicare rebate of $84.80 per session.
The husband filed an Affidavit affirmed on 13 February 2017, with respect to the question of penalty, which deposed to, inter alia, the following:
a)He did not intend to commit a criminal offence. Notwithstanding what was set out on the subpoena form itself, he said he had not relevant the words, in terms of the prohibition in disclosing that type of information outside the parties in a case.
b)He did not know that he would be in breach of the “Court Rules” if he wrote to the wife’s employer seeking information about his position in what, on the face of it, seemed to him to be a fraudulent course of conduct by the wife.
c)He was very sorry that he had committed this offence.
d)He wanted the Court to know that he regrets what he did, which was, he said, to try to ensure that he knew the actual facts in the case, rather than what had been set out in the documents in the case.
e)He believed that the wife was not only dishonest and inaccurate in her evidence but was guilty of perjury, some form of fraud on her employer and tax evasion.
f)He was aware that what was said to the Court should be based on honesty and accuracy and that the Court regarded it as being very serious for any litigant to be dishonest and/or inaccurate.
g)He was not critical of the fact that the Court had come to the conclusion that he had been guilty of contempt and embraced the fact that the Court had reached a decision based on the facts and the application of the law to those facts.
h)In April 2015, his solicitor, Mr Nabil Wahhab (“Mr Wahhab”) of York Law Family Law Specialists Pty Limited, had advised him in the following terms: “It is my strong advice that you not report the matter to the Australian Taxation Office (“ATO”). That is something that you may wish to consider after the Court case is over. It appears to me that the issue is not an income issue, but that she [the wife] appears to be stealing from her employer. Thus, this may be a matter that you can bring to Employer A’s attention but not at this stage”.
i)After the Court case was concluded by way of a settlement, Mr Wahhab informed him that he could now raise the matters that he was concerned about, namely, the wife’s asserted perjury, fraud on the employer and tax evasion.
j)At the time he wrote the letter to the wife’s employer, he thought that what he was bringing to the attention of the company and its Directors and Chief Executive Officer was that there were facts in existence which needed to be checked because if the true facts were as they appeared to be, what had taken place on the part of the wife was serious. He did not see the company, its Directors and Chief Executive Officer as different persons. To him they were all “the employer” of the wife.
k)He will not cause the Court any further trouble by raising complaints about what the wife has done. He will not contact her employer, the Australian Federal Police or the ATO.
l)Until the finding of guilt, he had always conducted himself in a truthful, hardworking and responsible fashion and put himself before the Court as a person of good character. He had not committed a criminal offence and had no criminal record. He had not been arrested by the Police nor charged with any criminal offence. Having raised matters of “good character”, he was aware that he could be cross-examined on this issue.
m)Documents produced showed that the wife had acquired large amounts of money totalling $78,090.72 (credited in 2004) and $82,788.00 (credited in 2005), when she was only earning $30,864.00 net in 2010.
n)He found, as most disturbing, a cheque in the sum of $6,721.00 made out in his name from Employer A and signed by “Ms K”, when he had not supplied Employer A with any goods or services which might have resulted in the payment of an account from him and that he had never submitted an invoice to Employer A for $6,721.00, nor for any other amount by way of a claim for payment for the provision of any goods or services.
o)His legal fees had become so large that he was reluctant to involve lawyers to carry out inquiries because he thought that the problem could be solved by exchange of correspondence between him and “others”, who knew what the facts were.
p)That the persons, being Mr G (whose name and photograph was shown on the same website with Mr L and Mr H), was described as General Manager of Employer A’s Sydney Office and, he believed all were indistinguishable from the concept of the wife’s “employer”.
q)He needed to have his name “cleared” and he became determined to get to the bottom of what he thought was a proper fact finding exercise which could be done by him, rather than him having to pay legal fees to have the work done.
r)In the latter half of December 2014, he met with the wife and asked her: “Why did you make a cheque out in my name for $6,721.00?” and she responded: “I didn't do that!”
s)Prior to this meeting, he had a conversation with the wife’s former husband, who said: “Did you know that she (the wife) served a sentence of imprisonment by way of weekend detention?”
t)In his conversation with the wife during the latter half of 2014 and referred to in paragraph (r), above, he spoke to the wife and said: “I've been told that you served a sentence of weekend detention. What was that all about?” and she said: “That is a part of my life I want to forget!”
u)He discussed with Mr James Barkell, the solicitor then acting for him, the issue of informing the ATO of the fact that the wife was not declaring her true income in her group certificates. He, in turn, discussed it with Mr Julian Millar of Counsel, who was not in favour of disclosing this information, at that stage. He accepted Mr Millar’s advice.
v)At a later stage, he also discussed the same topic with York Law and Mr Michael Kearney of Senior Counsel. The advice he obtained was not to disclose such information, at that stage. The best use of the information would come from cross-examination during the course of the hearing relating to the resolution of financial matters. The advice that he received was to give some further thought to the matter after the hearing of the property and other financial matters.
w)He was never told by anyone that to make inquiries of others in relation to the various acts of asserted dishonesty was not permitted under the Act and/or the Rules.
x)After signing the settlement documents in relation to settlement in Mr Kearney SC’s Chambers, Mr Wahhab said that he could now apply his mind to the problems that he had mentioned to him and to Counsel during the course of the preparation of the case for hearing. He was not told that to raise the matter of information being obtained partially from subpoenaed documents would be a contempt of Court. Had he been so advised, he would not have done what he did.
y)It was then that he addressed the letter dated 19 May 2015 to both Mr H and Mr L at Employer A in the Country B. The purpose of this letter was to ask Employer A to clear his name. The cheque for $6,721.00 appeared to have been drawn or approved by someone in the office of Employer A and he wanted the senior people in the organisation to check the facts and let him know what had been going on.
From the husband’s Affidavit, the Court accepts that while he apologises to the Court, he still maintains that he was justified in doing what he did. The husband appears to argue that he was entitled to do so, based on “clearing his name”. The issue of his raising the matters of concern to him had been ventilated with his legal advisers. It appears, for tactical reasons, it was decided not to raise those matters, but to proceed to a hearing. That hearing did not, however, eventuate, as the parties’ resolved all matters in contention. The husband, up until that point in time, could have sought the Court’s consent to the release of documents the subject of the implied protection. He did not do so. It is hard to see how his writing to the wife’s employer could have “cleared his name”, in any event. The Court accepts that, at all material times, the husband well-understood that he could apply to obtain the leave of the Court to release documents to third parties. The husband’s course of conduct would appear to have been designed to cause concern and upset to the wife, by raising such matters with her employer, after the proceedings had been settled.
The husband was cross-examined on his Affidavit and, in particular, in relation to paragraphs 43, 44 and 45. It was accepted that the husband was, otherwise, of good character.
The Court notes the following exchange in the husband’s cross-examination
Mr Campton SC: Sir, I want to suggest to you that on or about… 5 January 2015 you said to my client: “You may get some money out of me, but I will ensure that you end up with nothing at the end”. Do you remember saying that?
Mr Zaber: Do we want to – no, I don’t remember saying that, and
…
Mr Campton SC: I would suggest to you that you did say that with the intent to threaten her, and with malice?
Mr Zaber: Sir, you don’t know that. You’re only guessing. Do I bring out – I’ve got documents there that my wife lied in selling those shares, not once, twice. I’ve got evidence there that Property C was purchased some days later and we used a loan. There’s – no loan was used. She has lied through every Affidavit she has put, even the Affidavit there now. Look at her wages. Open up the Affidavit she has provided the court now, and I’ve got a copy of the wages. Two different – but same date, two different lights. I thought Affidavits, your Honour, are supposed to be true. You want the truth? Bring me book out. I will show you the truth. May I get the book and show you all the lies, the fraud? And no saying Nabil did not tell me to go to Employer A, because you don’t know. You weren’t there. Sorry, sir. You’re guessing again. So I would like the court with my files on fraud, and will we go back to all the Affidavits?
The husband was asked by Mr Campton SC as to what documents he had retained. The following exchange is noted:
Mr Campton SC: Right. And so did you have – what paperwork did you have about discussing with Mr N the issue of informing the ATO of the fact of [the wife] not declaring her true income in her group certificates?
Mr Zaber: What paperwork was that? I had paperwork in front of me about her not performing with the ATO.
Mr Campton SC: Yes. I know you had paperwork in front of you?
Mr Zaber: Yes.
Mr Campton SC: What paperwork was it?
Mr Zaber: Her tax returns.
Mr Campton SC: Right. And where did you get her tax returns from?
Mr Zaber: Left on the premises at …Address.
Mr Campton SC: And you’ve still got them, haven’t you?
Mr Zaber: I’ve got a copy of them.
Mr Campton SC: Yes. And you’ve been asked through your solicitors to return to my client’s solicitors all of her ATO paperwork, haven’t you?
Mr Zaber: I think that’s true.
Mr Campton SC: And you’ve refused to return it, haven’t you?
Mr Zaber: To cover myself.
Mr Campton SC: Right. The answer is, “I’ve refused to return it”, isn’t it?
Mr Zaber: I refused to return it, yes.
The husband’s cross-examination continued with the following exchange:
Mr Campton SC: Do you say that any time after this case was concluded by way of the consent orders on 11 May 2015 you’ve been asked to return the documents that you have in your possession that were produced under subpoena by my client’s employer to my client?
Mr Zaber: So which documents were these?
Mr Campton SC: You’re trying to be helpful here, aren’t you, Mr Zaber?
Mr Zaber: I’m trying to find out which documents. Are they the documents that she stole a cheque and made that out in my name?
Mr Campton SC: What other documents do you think they might be?
Mr Zaber: Well – or are they documents that – that she made out a – she had my son’s bank account number on my firm’s – firm’s register?
Mr Campton SC: What other documents might they be?
Mr Zaber: Yes. Were they documents of her birth certificates that was false, that – birthdates?
Mr Campton SC: What other documents might they be?
Mr Zaber: Were they her wages from her employee where she failed to pay tax?
Mr Campton SC: What other documents might they be?
Mr Zaber: What have we got? We’ve got wages – I can’t remember.
Mr Campton SC: They’re all – all those documents, potentially save the birth certificate, are documents that you obtained in the course of the proceedings from either my client or by way of subpoena, weren’t they?
Mr Zaber: I’m sorry. They weren’t, because the cheque – I found the cheque myself. The forged cheque I found way before any subpoenas went out. And that forged cheque is the whole crunch of this matter now – is to cover myself about a forged cheque. Not even the forged cheque, your – your Honour, but about her – why did Employer A have my son, who is an intellectually disabled person – why did Employer A have that – her – his account number on record? I still haven’t got the answer. There’s lies all the way through, and you’re covering up lies. There’s tax fraud there.
Mr Campton SC: Who’s covering up lies?
Mr Zaber: I am?‑‑‑There’s tax fraud there.
Mr Campton SC: Who’s covering up lies?
Mr Zaber: Well, where in your submission or summary to the court you’ve got a note of the – the cheque, and where in your submission to the – and also the – it was year 2008 in March to December, from memory, that – on her wage records. Her wage records had my son’s account number on it but there was no entry, and there was no entry on those wage records that – that money went into those accounts. She has lied all the way through and somebody is covering up. I’m here to tell the truth and I want the truth to come out. And I’ve got a folder there I could show the court the truth. No, hit him with this to shut him up. That’s all they’re trying to do, is to shut me up from going to – to the – to the Federal Police and the ATO. I’m sorry, your Honour. Can I produce these documents.
Mr Campton SC submitted that the above exchange was a clear example of the husband’s intention to further use the documents that he had obtained as part of the Court process.
The above exchanges clearly support the making of an order as sought by the wife in terms of the return to her solicitors of copies of all documents and information in the husband’s possession or control produced on subpoena by Employer A or in connection with same in the proceedings, or received from the wife or on behalf of the wife by way of discovery or disclosure. The husband admits to retaining photocopies of relevant documents. The Court will so order.
The husband was cross-examined about the advice that he had received from his legal representatives about using the documents that he had obtained at “some later” stage. The husband said that some advice had been contained in a written form from Mr Wahhab. Exhibit “2” is an email from Mr Wahhab to the husband dated 30 April 2015. That email followed an email from the husband dated 29 April 2015 which instructed Mr Wahhab to advise the Court to put the hearing on hold which had been set down for 11 May 2015 as the husband was “contacting the ATO regarding [the wife’s] non-disclosure of her true earnings and also discrepancies with Employer A …asking the ATO to investigate [the wife’s] daughter and her partner’s activities… all the different birth dates and names… provided to the ATO… asking the ATO to freeze all of [the wife’s] bank accounts and to cancel her passport” and asked Mr Wahhab for his advice on a number of other matters.
Mr Wahhab in Exhibit “2” refers to a telephone conversation that he had with the husband on the afternoon of 30 April 2015 and appears to repeat advice given in that telephone conversation to the following effect:
It is our strong advice that you not report the matter to the ATO. That is something that you may wish to consider after the Court case is over. It appears to us that the issue is not an income issue, but that she appears to be stealing from her employer. Thus, this may be a matter that you can bring to Employer A attention, but not at this stage.
The above exchange supports the husband’s evidence that he was told that he could, potentially, use the documents obtained in the Court process at a later stage (emphasis added). It is also, however, clear that the husband was aware that any such use required the permission of the Court. Mr Campton SC cross-examined the husband about this and the Court notes the following exchange.
Mr Campton SC: So I asked you, Mr Zaber, about – you were aware, were you not, that you could have asked your legal representatives when the matter was before his Honour on 11 May to obtain permission or the leave of the court to provide the documents that you received either by way of subpoena or by way of disclosure for another purpose?
Mr Zaber: Yes, I did ask my legal people to do it. My legal people advised me no because they didn’t their Honour to know any misappropriate funds or tax evasions because then the Honour would put the case back until the Taxation Department done the investigations. Then we will have to get further valuations on all our properties. “No, don’t do it. Don’t do it.” They didn’t want the Honour to know.
No evidence was directly called from Mr Wahhab by either party. Mr Wahhab’s evidence may have assisted the Court. The Court accepts Mr Campton’s submission that, to some extent, the state of the evidence was a bit like the X-Files “the truth is still out there waiting to be discovered”. The Court is, nevertheless of the view that Mr Wahhab did advise the husband in terms of Exhibit “2” and that that advice may have been repeated in Counsel’s Chambers or on the street, as asserted by the husband. The Court is, further, of the view that Mr Wahhab would have advised the husband that any use of documents had to be endorsed by the Court. The Court is of the view that the husband, at that time, chose to ignore that step because he had already expended substantial monies on lawyers and did not see the utility of any further expenditure. The Court, nevertheless, accepts that the husband was well aware that he should have approached the Court for permission and that his lawyers had given that advice. Their advice being not to approach the Court on the hearing because of the consequences of doing so referred to by the husband. Their advice did not appear to change, only that consideration could be given to such an approach, at a later stage. The husband is silent in his Affidavit as to his consideration of that particular advice but rather deposes to him acting himself because he felt he could do so, “at a later stage”.
The husband’s evidence was that he had not provided any of the documents to the ATO or anyone else. The husband, however, maintained that he would like the Court to send those documents to the ATO and the Federal Police. No formal application was made by Mr Timmins in that regard. The husband’s evidence, however, does not ground the making of an order in terms of that sought by the wife in proposed order 4, as set out in paragraph 3 above. Further, the Court would not make order 4, in any event, as it appears, on its terms, to require the husband to engage with third parties not identified, which could, potentially, involve the husband in the waiver of any privilege against self-incrimination.
At the conclusion of the husband’s cross-examination one was left, however, with the clear impression that while the husband had apologised, he did not accept that he had acted, inappropriately. The husband maintained, in terms of what was put to him as a “crusade”, a position that he was still entitled to raise the alleged fraud of the wife with relevant authorities so as to “clear his name”. The husband said: “Yes, to clear my name”. As said, it was not clear, how his name had been besmirched, in any event, save in the husband’s own mind.
The Law
Section 17 of the Federal Circuit Court of Australia Act 1999 states as follows:
Contempt of court
(1)The Federal Circuit Court of Australia has the same power to punish contempts of its power and authority as is possessed by the High Court in respect of contempts of the High Court.
(2)Subsection (1) has effect subject to any other Act.
(3)The jurisdiction of the Federal Circuit Court of Australia to punish a contempt of the Federal Circuit Court of Australia committed in the face or hearing of the Federal Circuit Court of Australia may be exercised by the Federal Circuit Court of Australia as constituted at the time of the contempt.
Note: See also section 112AP of the Act, which deals with family law or child support proceedings.
Accordingly, s.17 of the Act, as referred to above, is the source of power for this Court to deal with contempt matters before it.
As the Court deals, now, with issues of penalty, it must be remembered that each case turns on its own facts.
Section 112AD of the Act states as follows:
Sanctions for failure to comply with orders
(1)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.
(1A)The power given to the court under subsection (1) in respect of a contravention of a maintenance order applies even if the order has been complied with before the matter of the contravention comes before the court.
(2)The sanctions that are available to be imposed by the court are:
(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.
(2A)The court must not impose a sentence of imprisonment on the person under paragraph (2)(d) in respect of a contravention of a maintenance order unless the court is satisfied that the contravention was intentional or fraudulent.
(3)An order under subsection (1) may be expressed to take effect immediately, or at the end of a specified period or on the occurrence of a specified event.
(4)Where a court makes an order under subsection (1), the court may make such other orders as the court considers necessary to ensure compliance with the order that was contravened.
Mr Campton SC submitted that s.112AP(6) of the Act provides for sanctions as follows:
(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.
The Court has had regard to the decision of Windeyer J in Australian Consolidated Press v Morgan (1965) 112 CLR 483 at 498-9 to the effect that a contemnor will be permitted to purge the contempt by:
a)an apology to the Court;
b)making reparation for the damage caused by the contempt; and
c)paying costs as between solicitor and client to the applicant in the proceedings.
The Court notes further that Windeyer J was not suggesting that once a contempt is purged, further punishment should not be imposed.
Mr Campton SC refers to the decision of the Full Court of the Family Court of Australia in Tate & Tate [2003] FamCA 112 which also refers to relevant High Court of Australia authority, but in terms of a family law context. Mr Campton SC submitted that this decision provided that it was important for the Court’s authority to be considered as an “end in itself”, in terms of the expectation amongst litigants, that the Court’s processes and orders would be obeyed and that litigants could not be dissuaded from disclosure for fear that information so disclosed would be disseminated, without the control of the Court. Mr Campton SC, further, submitted that if it is seen that the Court is not effective in its function, the potential negative impact on the integrity of the Court would be self-evident. That impact, would lead to pain and suffering to litigants, which could not be compensated for. The Court gives this submission significant weight.
In Tate & Tate [2003] FamCA 112, the Full Court of the Family Court of Australia (Nicholson CJ, Kay & Monteith JJ) stated:
The Principles Underlying Proceedings for Contempt Arising out of Disobedience of a Non Monetary Order
57.Normally, the purpose of contempt proceedings against a person for breach of such an order is to coerce them to comply with it. However, It is quite clear that another purpose of bringing proceedings for contempt against a person who has breached a non-monetary order of the court may be that of punishment. The purposes of imposing punishment would appear to reflect the need for individual and general deterrence and retribution for the party’s failure to comply with the order. Retribution is called for because it is essential to the proper working of the court system that court orders are obeyed. If they are defied or ignored, the whole system of dispute resolution by litigation breaks down. While there are other means of dispute resolution available, in the final analysis a citizen has the right to approach a court to determine a dispute and the court has a duty to do so.
58.The majority of the Full Court (Ellis and Holden JJ) in the husband’s most recent appeal (SA 39 of 2001 delivered 30 May 2002) referred to the decision of the High Court in Witham v Holloway (1995) 183 CLR 525. In that case, in the joint judgment of Brennan, Deane, Toohey and Gaudron JJ, their Honours referred (at 530) to the distinction between civil and criminal contempt as being that a civil contempt involves disobedience of a court order in civil proceedings, whereas a criminal contempt involves either a contempt in the face of the court or an interference with the course of justice. They qualified this distinction by saying:
“However disobedience or breach of an undertaking amounts to a criminal contempt if it involves deliberate defiance or, as it is sometimes said, if it is contumacious.”
59.They further commented that the differences upon which the distinction between criminal and civil contempt are based are, in significant respects, illusory. In a separate judgment McHugh J expressed himself in similar terms on this issue.
60.In Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 66 ALR 577 at 584; 161 CLR 98 at 107 (per Gibbs CJ, Mason, Wilson and Deane JJ) the purpose of proceedings for civil contempt was stated as follows:
“Although the primary purpose in committing a defendant who disobeys an injunction is to enforce the injunction for the benefit of the plaintiff, another purpose is to protect the effective administration of justice by demonstrating that the court’s orders will be enforced.”
61.The Australian Law Reform Commission (“ALRC”) in its 1987 report Contempt (Report No. 35) pointed out (at par 508) that it is important to recall that proceedings for disobedience contempt may serve one or both of two distinct functions: enforcement of the order and punishment of disobedience of the order. It similarly drew a distinction between situations where the primary aim is coercive as distinct from punitive. In the former case, the sanction imposed is expressed only to last until the occurrence of a specific event that is within the power of the person upon whom the sanction is imposed. In the latter the punishment (if custodial) is imposed for a finite period, usually after the relevant events have occurred.
62.It should be mentioned that the ALRC, in Chapters 13 and 14 of its report, did draw a distinction between the considerations associated with non-compliance in family law and general civil law. We agree that there is a distinction and in particular that resistance to compliance with orders made in family law litigation may be particularly strong, as this case exemplifies. At par 623 the Commission took the view that the purpose of punishment in family law proceedings was not so much upholding the Court’s authority as an end in itself, but in fulfilling the expectations of the litigant’s themselves that Court orders will be obeyed and imposing sanctions if this does not occur. We agree with this view which accords with that expressed by Evatt C in G and G (1981) FLC 91-042 at 76,361.
63.At par 515 of the ALRC report, it is pointed out that there are many cases where the primary goal is to punish the contemnor for past disobedience. It is stated that the sanction serves similar purposes to those imposed by the criminal law: in particular, deterrence (specific and general) and retribution.
64.In this case, the primary aim of the proceedings is clearly punitive and it is clear from the authorities that this is an appropriate aim, at least in circumstances where there has been a flagrant defiance of court orders. In Borrie and Lowe The Law of Contempt (3rd Ed at 629) the following statement of principle appears:
“Blatant and aggravated contempts particularly when repeated by a person who has clearly been warned as to the possible consequences of defying an order, will quite properly attract an immediate custodial sentence as a mark both of the gravity of the contempt and the court’s disapproval and to deter contemnors and others who might be tempted to breach such an order.”
See also Lightfoot v Lightfoot [1989] 1 FLR 414 at 416-417 per Lord Donaldson MR.
65.At pars 516-7, 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 court’s 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.
66.At par 519, the Commission said in terms that might be thought to be highly relevant in the context of this case:
“On the view just outlined (the need to uphold the authority of the Court), the imposition of punitive sanctions for disobedience is justifiable in terms of maintaining the effectiveness of court orders. In our society, courts are the ultimate arbiters of disputes. This system of dispute resolution depends upon, among other things, their making orders and, if necessary, enforcing them. Given that litigation can be frustrating, time consuming and costly, there would be no incentive at all in undertaking it, if there were no likelihood that orders made by the court in settlement of a dispute could not be enforced. The imposition of coercive sanctions is clearly directed towards this goal; the imposition of punitive sanctions re-inforces (sic) it .In circumstances where enforcement is no longer relevant, either because the order has since been complied with, or is no longer capable of being complied with, the imposition of a punitive sanction vindicates the claims of the aggrieved party, signifies the disapproval of the court, and acts as both as a specific deterrent (that is, to the particular contemnor) and as a general deterrent (that is to future would be contemnors). The Commission endorses the general principle that punitive sanctions should be available to the Court to the extent that they are necessary to uphold the effectiveness of court orders”.
The same paragraphs quoted above (being paragraphs 57 through to 66) were repeated by the Full Court of the Family Court of Australia (Coleman, May & Boland JJ) in its decision in Kendling & Anor & Kendling [2008] FamCAFC 154, when it considered an appeal against sentencing imposed by Watts J, which Court, in turn, referred to those same paragraphs in the Full Court’s decision (Kay, Holden & Boland JJ) in Abduramanoski & Abduramanoska (2005) FLC 93-215. In Kendling the Full Court also stated:
398.Whilst these principles are certainly instructive, Palmer J’s statement in Australian Securities and Investments Commission v Michalik [2004] NSWSC 1259, which was cited with approval in PDM & JEM (2006) FLC 93-291; (2007) 36 Fam LR 342, must also be kept in mind:
…review of the punishments in other cases is of limited assistance, as each case really depends upon the Court's assessment of the relevant facts.
399.This is particularly so where, as in the case of s 112AP of the Act, there is no provision for a maximum term of imprisonment. The difficulty which confronts courts exercising criminal jurisdiction in sentencing for offences for which maximum penalties are provided is thus even greater for courts exercising the sentencing powers conferred by s 112AP of the Act.
The Court has also had regard to the decision of the Full Court of the Family Court of Australia (Bryant CJ, Finn & Warnick JJ) in LGM & CAM(Contempt) (No.2) [2008] FamCAFC 1 which considered an appeal from a decision by Cohen J in relation to the imposition of a penalty on the finding of a contempt in circumstances where His Honour had considered the matter of an apology, noting that “the level of contrition is highly relevant to punishment”. In that case, notwithstanding the contemnor’s apology, Cohen J found that her evidence gave the strong impression that she did not care whether she was telling the truth on oath or not and that she continued to believe that she was justified in doing what she did. His Honour did not believe that the apology which was then relied on as an element in purging her contempt reflected her current attitude and gave it little weight. His Honour stated:
I do not accept that she is at all contrite, although no doubt she regrets what she did because it did not succeed as she expected. Her offer to purge her contempt came only at the last moment.
The Full Court, in the abovementioned matter, dismissed the appeal against Cohen J’s orders in terms of the sentence of imprisonment imposed. Justice Finn in that case, specifically, noted the following:
144.The decision as to whether a term of imprisonment is an appropriate punishment for the contravention of an order made under the Act where the contravention has been found (as it was in this case) to involve a flagrant challenge to the authority of the court, and then the further decision as to the appropriate length of the term of imprisonment are, in my view, particularly difficult decisions on which minds are likely to vary greatly. This is because, given the relatively few cases that have arisen over the life of the Act and the fact (recognised by the Chief Justice and Warnick J) that each case turns much on its own facts, no sentencing guidelines have been developed (unlike in the criminal law area).
145.Furthermore, such cases are complicated, to say the least, by the fact that the person in the position of prosecutor (who can, and did in this case, make submissions on penalty) is not an independent public authority, but rather the other party to a failed marriage, or similar relationship, whose motives may well go beyond issues of principle such as the upholding of the dignity of courts and court orders. The discretion in relation to penalty for the contravention of court orders must therefore be exercised with great care.
146.Minds will, as I have suggested, differ as to the appropriate sentence in the present case, particularly given the wife’s attempts to purge her contempts and also her responsibility to care for her disabled daughter. However, as can be seen from paragraph 104 of his reasons, these were matters which his Honour expressly took into account in the exercise of his discretion in this case, being a case where he had found at the conclusion of his judgment of 17 December 2004, that “the wife’s breaches were pre-mediated and are very serious and undoubtedly amount to a flagrant challenge to the authority of the Court”.
147.Having regard to the principles governing appellate interference with discretionary decisions, I have not been persuaded that there would be any basis on which this Court would be justified in interfering with his Honour’s decision as to penalty.
Mr Campton SC submitted and the Court accepts that to a large extent, each case must turn on its own facts and that the Court’s discretion is, particularly, wide.
Assessment
Mr Campton SC submitted that:
a)When one looks at Exhibits “D” and the second letter in Exhibit “2”, it is clear that there have been opportunities for the husband to rectify the impact of his conduct by providing the documents back to the wife and provide an undertaking not to use the documents again. The husband, however, refused to do so. The Court accepts that the wife sought not to proceed with the contempt application in terms of her offer referred to in the letter from York Law to the husband dated 13 April 2016 on the basis that the husband would provide an undertaking not to disclose the contents of the documents including the subpoenaed documents to any third party and that such offer was on the basis that each party would meet their own legal expenses. The husband rejected that offer and sought to have the wife dismiss her contempt application and pay his costs on a party/party basis. Further, the wife’s solicitors proposed a resolution of the matter on 24 February 2017 (part of Exhibit “C”) which was rejected by the husband. That proposal sought that the husband enter into a recognisance or bond for a period of 12 months to be of good behaviour, to surrender documents in his possession or control produced on subpoena or received by the wife or on her behalf by way of discovery/disclosure and to do all things practicable to recover such documents from any other person or entity.
b)The husband’s evidence was that, save for this application, he would have been providing documents obtained from these proceedings to the ATO and the Federal Police. The Court accepts that that was the husband’s position.
c)The husband contends in his Affidavit to remorse, but there was real “vitriol, toxicity, justification and intensity” to his responses in cross-examination. The husband repeated: “they are trying to shut me up from going to the AFP and the ATO” and “I’ll show you the truth…I’ll show you the lies, the fraud”. The husband accepted no responsibility for any damage caused to the wife, which he acknowledged she had sworn to but did not accept that her issues were his responsibility.
d)The husband’s conduct was not only disobedient, there was a degree of malice and it was deliberate and designed to cause the wife injury which included her loss of employment following her resignation that she could not stop crying and could not sleep.
e)The fine was set at an arbitrary $10,000.00 figure being below the maximum of about $12,000.00.
Mr Timmins of Counsel submitted that:
a)The husband is a skilled tradesman and a person who has never been charged with a criminal offence and has never been in trouble with the law previously.
b)The husband turned 70 years of age on …2018.
c)The husband felt that the “truth” had not come out in the forum where it probably should have, but because the property matter settled and there was no hearing, there was no forum for that “release”.
d)The husband relied on his legal advice that he could take the matter up so far as the disclosure of documents was concerned, at a later stage. The Court does not accept that the legal advice given to the husband was without the relevant caveat that any such release had to be in accordance with an application made to the Court to seek the Court’s authority for such a release.
e)The husband believed that the wife had been involved in fraudulent conduct and that any person would become upset if they felt the Court system had been supportive of that.
f)One could not read the wife’s Affidavit without being conscious of the fact that she and her legal advisers had, studiously, avoided the matters the subject of the husband’s concerns.
g)There was no evidence to show that the husband was a liar, only that he was incensed that his perceptions of the truth had not surfaced. The Court accepts that submission.
h)There was a time when it was common place for this Court to refer matters in terms of the husband’s concerns to authorities such as the ATO and the Federal Police. However, Mr Timmins conceded that that was usually following a hearing, when the Court could make a determination as to those matters and moulded the specific orders to be made for such disclosure. That did not occur here, as the proceedings were resolved by way of a settlement, without any further application to the Court.
i)The husband wanted to clear his name in that it was asserted that he had received $6,721.00 for services provided by his company when that was not the case, when he believed the wife had understated her income to the ATO and he did not want to appear as a “tax dodger” and when the wife was, he believed, taking money for their son, [X], who had some intellectual disabilities, which impacted upon his name, as a parent. That while there was a contempt, the husband had, what he believed to be, good and honest reasons for doing what he did.
j)The husband did not challenge the fundamental facts. Before Judge Monahan on 2 March 2016, the Court noted that the husband did not intend to file any material in response to the contempt application. The Court notes that that, however, does not amount to an acceptance of the facts. The husband, as a respondent to a contempt application, was entitled to have the wife as applicant prove that application.
k)What the husband did, was at the “lower end” of the scale as to criminal conduct and as the bond is at the higher end of the scale in terms of sentencing, it should not be ordered.
l)The Court should not enter a penalty.
m)The Court must be satisfied that this was a case that called for the imposition of costs against the husband, beyond reasonable doubt. The Court does not accept that that onus of proof applies in terms of costs.
The Court in this matter also considers the following issues in terms of its assessment of penalty:
a)The determination of any penalty is a matter of discretion.
b)The imposition of any penalty is at large.
c)The need to protect the integrity of the Court’s processes.
d)The need to indicate to the contemnor the seriousness of any interference with the Court’s processes and additionally to that, to serve as a reminder and a deterrent to other litigants of the seriousness with which the Court will deal with any abuse of its processes.
e)The need to consider the contemnor’s personal circumstances including financial circumstances. A person may not be able to meet the imposition of a fine or a person may have such resources that the imposition of a fine is of little impact to amount to a penalty. In that regard, no matter was put by the husband to indicate that he could not meet a financial penalty.
f)If a period of imprisonment is imposed, whether it should be suspended. If a suspension is ordered, would there be a trigger for the revocation of a suspension. Often conditions are imposed in the terms of a bond to be of good behaviour in relation to conduct which is part of the offending the subject of which the sentence has been imposed.
g)The length of any term of imprisonment. For example the length should be no less than is necessary to impress upon the contemnor the seriousness of the conduct the subject of the contempt and no more than is reasonably necessary to serve that purpose, namely as a reminder and deterrent.
The wife’s application for a bond to be of good behaviour, the breach of which would amount to the revocation of the suspension, does not, specifically, deal with the behaviour the subject of the husband’s contempt.
The Court is of the view that order 4, as sought by the wife, goes too far and, potentially, exposes the husband to the loss of any privilege against self-incrimination. There is no evidence to show that the husband has provided the documents and information produced on subpoena and by way of discovery and/or disclosure to any third party or entity outside those persons or entity referred to in proposed order 3.
The Court is not of the view that this matter would ground a prison sentence, whether suspended or not.
The Court is not of the view that a bond should be imposed given the conditions sought by the wife to be of good behaviour for a period of 18 months would otherwise apply to the husband in this matter, given his previous history of good behaviour. In those circumstances, order 2 as sought by the wife would be, otherwise, otiose.
The Court is of the view that a fine should be imposed of $10,000.00. The Court is of this view, given the seriousness of the husband’s breach, its public implications, the need for public deterrence to protect the processes of the Court and, to a large extent, the husband’s lack of contrition. The Court is, however, of the view that the quantum of the fine could be reduced if the husband otherwise complies and certifies his compliance with order 3, as sought by the wife. That provides an incentive for such compliance, without the need for the imposition of a bond or further consideration as to the difficulties associated with imposing a bond, including bringing the husband back for the purposes of an explanation as to the imposition of any bond and as to whether the husband accepts that position or whether that should be considered by way of further issue in determining penalty. The Court is of the view that a reduction of the penalty to $5,000.00 would be appropriate, in those circumstances.
So far as costs are concerned, the Court will also have regard specifically to the following.
Costs
Mr Campton SC submits that every s.117(2) of the Act factor is “ticked” in the wife’s favour.
Mr Timmins submits that in accordance with s.117(1) of the Act, each party should pay their own costs.
In relation to costs, s.117 of the Act states:
(1) Subject to subsection (2), subsection 70NFB(1) and sections 117AA, 117AC and 118, each party to proceedings under this Act shall bear his or her own costs.
(2) If, in proceedings under this Act, the court is of opinion that there are circumstances that justify it in doing so, the court may, subject to subsections (2A), (4), (4A) and (5) and the applicable Rules of Court, make such order as to costs and security for costs, whether by way of interlocutory order or otherwise, as the court considers just.
(2A) In considering what order (if any) should be made under subsection (2), the court shall have regard to:
(a) the financial circumstances of each of the parties to the proceedings;
(b) whether any party to the proceedings is in receipt of assistance by way of legal aid and, if so, the terms of the grant of that assistance to that party;
(c) the conduct of the parties to the proceedings in relation to the proceedings including, without limiting the generality of the foregoing, the conduct of the parties in relation to pleadings, particulars, discovery, inspection, directions to answer questions, admissions of facts, production of documents and similar matters;
(d) whether the proceedings were necessitated by the failure of a party to the proceedings to comply with previous orders of the court;
(e) whether any party to the proceedings has been wholly unsuccessful in the proceedings;
(f) whether either party to the proceedings has made an offer in writing to the other party to the proceedings to settle the proceedings and the terms of any such offer; and
(g) such other matters as the court considers relevant.
(3) To avoid doubt, in proceedings in which an independent children's lawyer for a child has been appointed, the court may make an order under subsection (2) as to costs or security for costs, whether by way of interlocutory order or otherwise, to the effect that each party to the proceedings bears, in such proportion as the court considers just, the costs of the independent children's lawyer in respect of the proceedings.
(4) However, in proceedings in which an independent children's lawyer for a child has been appointed, if:
(a) a party to the proceedings has received legal aid in respect of the proceedings; or
(b) the court considers that a party to the proceedings would suffer financial hardship if the party had to bear a proportion of the costs of the independent children's lawyer;
the court must not make an order under subsection (2) against that party in relation to the costs of the independent children's lawyer.
(4A) If:
(a) under section 91B, an officer intervenes in proceedings; and
(b) the officer acts in good faith in relation to the proceedings;
the court must not, because of the intervention, make an order under subsection (2) of this section against the officer, or against an entity (including the Commonwealth or a State or Territory) by or on behalf of whom the officer was engaged or employed.
(5) In considering what order (if any) should be made under subsection (2) in proceedings in which an independent children's lawyer has been appointed, the court must disregard the fact that the independent children's lawyer is funded under a legal aid scheme or service established under a Commonwealth, State or Territory law or approved by the Attorney-General.
Section 117 of the Act was considered by the High Court of Australia in Penfold v Penfold (1980) 144 CLR 311, where it was said:
Sub-section (2) requires a finding of justifying circumstances as an essential preliminary to the making of an order. Beyond this there is nothing in the subject matter or in the interrelationship of the two provisions, which imposes any additional or special onus on an applicant for an order for costs.
In Latoudis v Casey (1990) 170 CLR 534, the High Court of Australia stated as follows:
…in exercising its discretion to award or refuse costs, a court should look at the matter primarily from the perspective of the defendant. To do so conforms to fundamental principle. If one thing is clear in the realm of costs, it is that, in criminal as well as civil proceedings, costs are not awarded by way of punishment of the unsuccessful party. They are compensatory in the sense that they are awarded to indemnify the successful party against the expense to which he or she has been put by reason of the legal proceedings.
Section 117 of the Act, provides for a discretionary power in the Court. The Court must examine each of the factors, set out in the section, in turn, in relation to justifying a costs order. A costs order can be made on the basis of one or a combination of those factors Brown v Brown [1998] FamCA 115. The discretion to award costs is a broad discretion: Collins & Collins (1985) FLC 91-603.
The issue of costs were outlined in Cachia v Hanes [1994] 179 CLR 403 at paragraph 98 as follows:
Indeed, the list of matters set out in sub-s (2A) to which the Family Court is directed to have regard in making orders under s 117(2) indicates clearly that the subject-matter of the orders to be made under s 117(2) is the costs which a person may be ordered to pay another as indemnity for that other's liability for professional fees and out of pocket expenses reasonably incurred in the litigation, that is, "costs" as that expression is ordinarily understood in the law.
Section 117(2A)(a) The financial circumstances of the party
The wife submits that the husband, in the final property orders, retained 2 properties (Property D and Property C) and an expensive boat and is, otherwise, able to meet a costs order.
The husband did not depose to being unable to afford to pay costs or to being unable to meet a fine in the sum proposed by the wife.
Section 117(2A)(b) If any party in receipt of legal aid
The parties submit and the Court accepts that this factor is not applicable.
Section 117(2A)(c) The conduct of the parties in relation to the proceedings
The wife submits that she has attempted to run this case as efficiently as possible. The wife says that this position was also adopted by the husband, but notes that her current claim for costs relates to the conduct of the husband, following the earlier proceedings.
The Court adopts the finding of Smithers J In the marriage of Briese (1986) FLC 91-713 where he stated that the husband “failed significantly to co-operate in a manner calculated to bring the proceedings to an early conclusion at a minimum of cost” as supportive of a costs order being made against the husband. As Smithers J also said, “there is an obligation on each party to act so as to provide a basis upon which the two of them are in a position to resolve the case by agreement, or proceed to a hearing, as expeditiously as may reasonably be done.” The Court is not satisfied that the husband, in this case, fulfilled that obligation. As Mr Campton SC submitted and the Court accepts, there has never been a clear concession by the husband about the contempt and the correspondence from his legal representatives, (including that from Mr Timmins dated 17 October 2016 (Exhibit “D”)) stated that the husband has always said that he is not guilty. Mr Timmins articulated that if the wife’s application for contempt was dismissed, the husband would be seeking his own costs on an indemnity basis or at worst, a solicitor/client basis. This was in response to Mr Campton SC’s email dated 10 October 2016 which sought, on a “without admissions” basis, the husband enter into an undertaking in writing, not to disclose to any third party any information or documents disclosed either in the discovery process or on subpoena, with no order as to costs. The Court repeats its finding at paragraph 65, below.
Section 117(2A)(d) Proceedings necessitated by the failure of a party to comply with previous orders
The Court accepts that these proceedings have arisen as a result of the husband’s non-compliance with the relevant Rules of the Court.
Section 117(2A)(e) Whether any party wholly unsuccessful in the proceedings
The wife submits she was wholly successful and the husband wholly unsuccessful in the contempt application. The Court accepts that submission and gives it weight.
Section 117(2A)(f) Any offers in writing
A written offer of settlement is “highly relevant” to the question of costs. Such offers provide litigants with an incentive to settle and thereby avoid or reduce the costs of litigation: Robinson & Higginbotham (1991) FLC 92-209.
As Justice Nygh stated in In theMarriage of Murray (1990) FLC 92-173, a party cannot reject or ignore a reasonable offer seriously made except at his or her peril as to costs:
If one considers the issue as a matter of policy, that is, on the basis of what the Parliament's objective and purpose was in enacting the legislation, it is clear that the Parliament wished to encourage settlements thereby reducing the cost of litigation to the parties and to the community. That must mean that a party cannot reject or ignore a reasonable offer seriously made except at his or her peril as to costs. At the same time a party cannot sit tight and postpone a decision as to acceptance until a matter is at the door of the court. By that time an offer which might have been acceptable to the offeror because of savings in time and preparation costs, may have become unattractive. In this case the offer was left open for a reasonable period, was clear and capable of acceptance which would have saved the parties considerable costs...
In Browne v Green (2002) FLC 93-115, the Full Court of the Family Court of Australia (Kay, Coleman and Warnick JJ) said:
Whilst s 117(2A) does not provide any direct guidance to where weight should be given in any one particular case, it is very important for the Court to give proper consideration to written offers of settlement that have been made. The failure to heed a reasonable offer in circumstances where there is adequate knowledge of the parties at the time the offer is made to give it a proper consideration, is something to which very significant weight indeed ought normally be given.
The Court accepts that it is important for it to give proper consideration to written offers of settlement which have been made. These offers enable parties to avoid unnecessary litigation by indicating to the other party an appropriate basis upon which litigation can be settled. The failure to heed a reasonable offer in circumstances where there is adequate knowledge of the parties at the time the offer is made to enable proper consideration to be given to it is something to which “very significant weight” ought normally be given: Browne v Green (2002) FLC 93-115.
The Court is of the opinion that the wife made, through her Senior Counsel, a very appropriate offer to resolve the matter in terms of Mr Campton’s email of 10 October 2016 which was rejected in terms of Mr Timmins email of 17 October 2016, which sought to impose an obligation on the wife to pay the husband’s costs. The Court gives this matter weight in relation to the wife’s application for costs.
Section 117(2A)(g) Such matters as the Court considers relevant
The wife submits that she should not be out of pocket in bringing proceedings, in effect to defend the Court’s processes so as to ensure that litigants do not release documents (or information contained therein) provided to them during the course of litigation as a result of the compulsory processes of the Court, including obligations of disclosure, discovery and the issuance of subpoenas. The Court accepts that submission and gives it significant weight. The Court accepts that the payment of costs on a solicitor/client basis would be expected and appropriate, in terms of the matters referred to in paragraph 31, above.
Indemnity Costs
In Munday v Bowman (1997) FLC 92-784 Holden CJ. of the West Australian Family Court noted:
…some of the circumstances which have been thought to warrant the exercise of the discretion to award costs on an indemnity basis. Some examples which may be of relevance to the present case are as follows:
a. Where it appears that an action has been commenced or continued in circumstances where a party properly advised should have known that he had no chance of success. In such cases the action must be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts: see Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397.
b. Making allegations of fraud, knowing them to be false, and the making of irrelevant allegations of fraud: see Fountain Selected Meats (Sales) Pty Ltd.
c. Evidence of particular misconduct causing loss of time to the court and to other parties: see Tetijo Holdings Pty Ltd v Keeprite Australia Pty Ltd (French J, Fed C of A, 3 May 1991, unreported).
d. The making of allegations which ought never to have been made or the undue prolongation of a case by groundless contentions: see Ragatta Developments Pty Ltd v Westpac Banking Corporation (Davies J, Fed C of A, 5 March 1993, unreported).
e. An imprudent refusal of an offer to compromise.
In the matter Kohan & Kohan (1993) FLC 92-340 the Full Court of the Family Court of Australia (Strauss, Lindenmayer and Bulley JJ) held:
The power to order costs on an indemnity basis…
…that in an appropriate case, the Court has a discretion to order costs on an indemnity basis and that such costs may be ordered where they have been incurred under a costs agreement which departs from the usual scale of costs. However, it is fundamental to the exercise of that discretion in the Family Court that the Judge should not only understand that such an order is a very great departure from the normal standard, but also that the Judge should know what the terms of the agreement are, to what extent it exceeds the parameters set by the scale and what its likely impact will be on the financial position of each of the parties.
This impact is a relevant matter to which the trial Judge should have had regard, when considering the financial circumstances of each of the parties to the proceedings under sec 117(2A)(a), or perhaps even more as a relevant matter under paragraph (g). The degree to which a costs agreement departs from the established norm and the actual financial significance of such a departure may itself be a reason for not ordering costs on an indemnity basis.
The proper exercise of the discretion
The intent of sec 117(1) and 117(2) is that in this jurisdiction costs should not follow the event as a matter of course. However, where the justice of the matter so requires, the Court may make such order as the Court considers just. As we have pointed out, the Court may depart from the scale of costs prescribed under the rules… The Court should not depart lightly from the ordinary rules relating to costs between party and party and the circumstances justifying the departure should be of an exceptional kind…
Indemnity costs orders are still an exception in this and other jurisdictions… Insofar as an unaccepted offer of compromise which exceeds a judgment may justify an order for costs, the general practice in this jurisdiction so far has been to order no more than costs on a party and party basis. Even in cases where there has been dishonest concealment of assets or income… no more than party and party costs have been awarded.
When considering what is just in this case, one must bear in mind that a party who enters into a costs agreement should be warned and must anticipate in this jurisdiction that each party might well have to bear his or her own costs, and that even if an order for party and party costs is made, the difference between party and party costs and costs payable under a costs agreement may consume all, or a substantial part, of the property order. In this particular case the wife changed her solicitors in August 1990. It must then have been apparent to her, or at least to her new solicitors that this might become drawn out litigation and that a rate of costs which amounted to three times the scale, exposed the wife to great risks. If she was willing to assume these risks, it does not seem just to saddle the husband with them.
However, the Full Court of the Family Court of Australia in Yunghanns & Ors & Yunghanns & Ors & Yunghanns (2000) FLC 93-029 (Lindenmayer, Holden & Mullane JJ) stated:
All that is required is that the Court asked to exercise the discretion be satisfied that some "”particular facts and circumstances of the case in question warrant the making of an order for the payment of costs other than on a party and party basis": per Shepherd J in Colgate-Palmolive Company v Cussons Pty Ltd (1993) 46 FCR 225 at 223.
In JEL & DDF (No.2) (2001) FLC 93-083, the Full Court of the Family Court of Australia (Kay, Holden & Guest JJ) stated:
…the category of cases in which it would be appropriate to make an order for indemnity costs does not appear to be fully defined.
The Court held that the failure to accept an offer to compromise was, without more, insufficient to justify the making of a costs order on an indemnity basis. They stated:
In our opinion, the failure to accept an offer which in retrospect, perhaps should have been accepted is without more, insufficient to justify the making of a costs order on an indemnity basis. The rejection of the offer must be at the very least imprudent. We express no opinion as to when the rejection of an offer may be so classified…
Mr Campton SC submits that while indemnity costs is the exception, one would need to consider here the husband’s refusal of prudent offers, his conduct in terms of ulterior motives (to damage the wife), his wilful disregard to known facts, his adoption of a stonewall position and the absence of any true remorse for his actions. The Court notes these submissions and that the figure sought by the wife of $74,638.00 would, otherwise, be those indemnity costs.
The Court is satisfied that an order for costs should be made not only in circumstances of the contemnor purging his contempt but also in regard to s.117 of the Act, in that the Court is satisfied that there are sufficient justifying circumstances in order to ground a costs order in the wife’s favour, in any event. The Court however, is of the view that the costs so ordered should be on a solicitor/client basis, not an indemnity basis. The Court will give the parties an opportunity to reach agreement about those costs within, say, 35 days and, thereafter, if there is no agreement, the costs should be referred for taxation/assessment to the Costs Assessment Registrar of the Family Court of Australia in accordance with Chapter 19 Family Law Rules 2004 with the Registrar to make such directions as are necessary to implement that process and further to take into account any costs orders already made on an interim/interlocutory basis.
Accordingly, the Court will make the orders and directions, as set out at the commencement of these reasons and the matter will be, otherwise, removed from the active pending cases list.
I certify that the preceding seventy-three (73) paragraphs are a true copy of the reasons for judgment of Judge Kemp
Date: 19 January 2018
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