Commissioner for Fair Trading v Rixon

Procedural Context 3After delivery of judgment, on three occasions, 16 May 2014; 26 June 2014; and 29 August 2014, the Court dealt with the question of what penalty ought be imposed. On the first day, when the matter was adjourned by consent, procedural directions were made: Mr R Keller of counsel appeared for the defendant. 4On the second day, evidence and written submissions were taken: the defendant appeared in person. On the third day, Mr A Martin, a solicitor, appeared for the defendant. 5On the second day, 26 June 2014, when the matter came before the Court for the hearing of evidence and submissions with respect to penalty, the plaintiff placed a number of affidavits before the Court. No objection was taken to those affidavits and the deponents were not required for cross-examination. The defendant, who was at that stage appearing for himself, chose not to put any evidence before the Court. Both parties made submissions. 6Because the plaintiff submitted that it was open to the Court, and the Court should, impose a penalty which involved the defendant serving a term of imprisonment, the provisions of the Crimes (Sentencing Procedure) Act 1999, made it was necessary for the defendant to be assessed for an alternative to imprisonment, such as an Intensive Corrections Order or Community Service Order, by the NSW Probation and Parole Services. 7Accordingly, without objection from the defendant, I adjourned the proceedings on penalty and ordered a pre-sentence report. 8An assessment was undertaken by the Community Corrections section of Corrective Services and a pre-sentence report dated 28 August 2014, was tendered to the Court when it resumed the hearing on 29 August 2014. 9On that day, Mr Martin, the solicitor for the defendant, sought to put additional submissions to the Court in response to the submissions which had been previously made by the plaintiff, and which had already been answered by the defendant. That course was permitted. 10During the course of these submissions I was informed by counsel for the plaintiff, without demur from the solicitor for the defendant, that on the day prior to the hearing, namely 28 August 2014, the defendant had provided two cheques to the plaintiff, one addressed to Mr Snushall in the sum of $550, and the other addressed to Mr B Dedich in the sum of $700. These were bank cheques and I was informed that the plaintiff was intending to pass those cheques on to the named individuals.

Punishment for Contempt 11In Commonwealth of Australia v Salvato (No.4) [2013] NSWSC 321, I had occasion to discuss the legal principles relevant to the punishment of an individual for contempt of court. They are to be found at [26]-[30]. I will not repeat here what was written there. 12In Salvato (No 4) at [20], I said that I was not persuaded that the provisions of the Crimes (Sentencing Procedure) Act would apply when the Court was imposing a penalty for contempt. Neither Counsel in that case drew my attention to a number of cases in this Court which have held that the Act does apply in the present circumstances. I acknowledge that, although irrelevant to the actual outcome in Salvato (No 4), my statement about the irrelevance of the statute was erroneous. 13It is clear that as a matter of principle, punishment of a person for contempt should take into account the same principles as are applicable to punishment for crime: Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309 at 314. That includes the sentencing principles contained in the Crimes (Sentencing Procedure) Act: see Attorney-General for NSW v Whiley (1993) 31 NSWLR 314; Principal Registrar of the Supreme Court of New South Wales v Jando (2001) 53 NSWLR 527 at 536-537 14The proper approach to sentencing, or imposing a penalty for contempt is for a Court, having determined the appropriate facts which relate to the conduct which constitutes the contempt, to identify all of the factors that are relevant to the penalty in this case, identify their significance with the particular circumstances of the contempt and then to make a value judgment as to what is the appropriate penalty to be imposed having regard to the purposes for which such penalty is to be imposed: Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 at [51] per McHugh J; Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120 at [26]. 15It is appropriate to draw attention to the decision of the High Court of Australia, in Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd [1986] HCA 46; (1986) 161 CLR 98, where at [106], Gibbs CJ, Mason, Wilson and Deane JJ said: "Punishment for contempt serves two functions: (a) enforcement of the process and order of the Court, disobedience to which has been described as 'civil contempt'; and (b) punishment of other acts which impede the administration of justice, such a obstructing proceedings in Court while it is sitting or publishing comments on a pending case, which have both been described as 'criminal contempt' ..." 16At [112], their Honours said: "... we would add the comment that lying behind punishment for a contempt which involves wilful disobedience to a court order, is the very substantial purpose of disciplining the defendant and vindicating the authority of the Court." 17In addition, the objects of sentencing as set out in the Crimes (Sentencing Procedure) Act are relevant. They are as follows: "3A Purposes of sentencing The purposes for which a court may impose a sentence on an offender are as follows: (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, (c) to protect the community from the offender, (d) to promote the rehabilitation of the offender, (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community." 18In summary, punishment for contempt which involves wilful disobedience of a court order serves substantially all of these purposes. As these purposes may be in tension, each case which necessitates the imposition of a penalty, will be an individual exercise of the intuitive synthesis approach to sentencing. 19The common law principles of sentencing are preserved by the Crimes (Sentencing Procedure) Act. In summary, the principles include: (a) proportionality, namely that the sentence should be proportionate to the gravity of the offences: Veen v R (No 2) (1988) 164 CLR 465 at [8] per Mason CJ, Brennan, Dawson and Toohey JJ; (b) parity - namely, that any difference between sentences imposed upon co-offenders for the same offence, ought not be such as to give rise to a justifiable sense of grievance, and to give the appearance that justice has not been done: Lowe v R (1984) 154 CLR 606 per Dawson J, Gibbs CJ and Wilson J agreeing, (c) totality - namely, that when a person stands for sentence for a number offences, the Court must look at the totality of the criminal behaviour and determine what the appropriate sentence is for all of the offences: Mill v The Queen (1988) 166 CLR 59 per Wilson, Deane, Dawson, Toohey and Gaudron JJ; (d) avoidance of double punishment - namely that a person should not be punished twice for the same conduct: Pearce v R (1988) 194 CLR 610. 20In imposing a penalty for contempt, the Court is not limited with respect to the orders which it can impose but rather, has a wide range of orders available to it. 21Matters which are relevant to the imposition of a penalty for contempt include; the nature and circumstances of the contempt, the impact or likely impact of the contempt on the administration of justice, the extent of the contemnor's culpability for the conduct in question, and whether the contemnor has demonstrated genuine contrition and proffered a full and ample apology. 22The aggravating and mitigating factors referred to in s 21A of the Crimes (Sentencing Procedure) Act need also to be considered. 23Clearly, where any fine is to be imposed, regard must be had to the contemnor's financial means and their personal circumstances. Of course, what is always of particular importance in imposing a penalty for contempt, is the need to deter the contemnor specifically from engaging in similar conduct again, and to deter anyone else from being in breach of a court order. 24Ultimately, these matters all assist in the formulation of a sentence which vindicates and upholds the authority of the Court.

Nature of the Contempt 25The nature of the conduct giving rise to the contempt is fully described in Rixon (No.2). What that judgment shows is that, in 2013, the Court made, with his consent, orders against Mr Rixon which prohibited him directly or indirectly from engaging in any capacity whatsoever in performing residential building work whilst ever he did not hold a valid contractor licence. That order came about because of a claim by the plaintiff that Mr Rixon had been engaging in residential building work without a licence. 26The judgment in Rixon (No.2), and the findings which I made there, demonstrate that notwithstanding the orders made by consent in 2013, Mr Rixon, with respect to five properties, set out to, and did, breach the Court's orders in respect of the five different properties, in 24 different respects. 27I concluded the judgment in Rixon (No 2) with the following summary: "149. All of this material suggests that, after the orders came into effect, Mr Rixon set about creating a network of companies to undertake residential building work, in circumstances where unless proper investigation was undertaken, his connection with those companies would not be obvious. He used a number of false names to deal with customers, on behalf of these companies. Generally the work was not done and the deposit which was given was lost. 150. I am well satisfied that the facts, matters and circumstances prove beyond reasonable doubt that Mr Rixon intentionally set out to avoid the consequences of the Court's orders by creating the network of companies to undertake the work of providing fencing and decks to residential premises, in circumstances where Mr Rixon did not hold any contractor's licence and none of the companies were licensed." 28It is to be remembered that Mr Rixon did not attend at the hearing about whether he was or was not in contempt, and put no submission contrary to the finding of contempt. 29I regard, as is apparent from the reasons which I delivered, the contempt as being a very serious one because Mr Rixon, within a relatively short period after the orders were made, which were orders based upon his breach of the legislation with respect to carrying out residential building work only when there was an existing and valid contractor's licence in place, deliberately erected a network of companies with the intention of having those companies carry out residential building work without appropriate contractor licences, and using that network of companies to conceal his involvement in the residential building work. 30In truth he was the prime mover of those companies. He carried out much of the work for them. He concealed the fact that he was undertaking residential building work without a valid contractor's licence by giving false names and pretending, when he arrived at various residential properties and when he spoke to people about the jobs, to be different people. 31He set out to, and succeeded, in preying on unsuspecting home owners who at all times thought they were dealing with a properly licensed, and insured, residential builder who was entitled to be carrying out his work. He also preyed upon them because, as is obvious from what he did, he was not in a position to, and did not, finish the jobs which he undertook. 32The conduct involved in the contempt is extensive, persistent and very serious.

Evidence on Penalty 33The plaintiff put before the Court evidence of Mr Rixon's criminal and offending history. 34It is necessary to examine that history with care. It consists of the following: (a)Mr Rixon's criminal history record in NSW and the ACT records convictions for a number of relatively minor offences concerned generally with driving motor vehicles, and minor dishonesty such as impersonating a police officer. I do not regard these histories as being of any relevance to the issues about penalty which I have to decide; (b)Between March 2010 and April 2012, the Office of Fair Trading issued a total of 28 infringement notices to Mr Rixon with respect to conduct in which he had engaged in 2010 and 2011 concerned with residential building work. The infringement notices imposed fines on Mr Rixon for seeking and undertaking residential building work without a valid licence, demanding money by way of payment for residential building work contrary to the provisions of the legislation, and entering into contracts for undertaking residential building work which did not comply with the legislation. These infringement notices imposed fines totalling $19,000. (c)On 18 March 2013, Mr Rixon appeared before the Local Court at Newcastle where he was convicted of 21 offences against the Home Building Act 1989 which regulates residential building work. These convictions related to his conduct in the period from 1 February 2012 to 9 May 2012. It was conduct which was generally later in time than that which had been the subject of the infringement notices. 35In respect of those offences, he was fined a total of $52,500 and ordered to pay compensation totalling a little less than $4,000. 36It will be necessary to consider the significance, if any, of the matters referred to in sub-paragraphs (b) and (c) above. 37In addition to Mr Rixon's past criminal and offence history, the plaintiff also relied upon the affidavit of Mr Kevin Michaelis, sworn 13 May 2014. The contents of that affidavit were not challenged by Mr Rixon when it was read on 26 June 2014. I accept the evidence of Mr Michaelis. 38The affidavit satisfies me of some further instances of breach of the Court orders by Mr Rixon, which have occurred since the commencement of the contempt proceedings and before the Court made its finding of contempt. 39The first of these occasions was on Tuesday 21 January 2014, when five advertisements appeared in the Newcastle Herald, in the classified advertisements pages. They each advertised for residential building work. The words in each advertisement were: "1. Builder. Specializing in renovations, extensikons, decks, bathrooms, all aspects of building, fully licensed and insured. Call Now 0455 945 792 2. Fencing. Full, Decorative, Color, Timber, Custom Made, Security, Free quotes. Lic 178431C Ph 0455 945 792 3. Handyman. Free quotes, painting, carpentry and maintenance. Prompt and reliable service. 0455 945 792. 4. Builder. Specializing in Decks, Bathrooms, Renovations, extensions and all of Building Aspects. Fully Licensed and insured. Lic. No. 179431C Ph 0458 066 393. 5. Fencing. Colorbond, Timber, Decorative, Security, Custom Made, Free Quotes. Li. No. 179431C. Ph 0458 066 393" 40Enquiries made by Mr Michaelis established that Mr Rixon had placed and paid for the advertisements, was the subscriber of the mobile telephone numbers, and had used licence numbers which belonged to other businesses without the knowledge and consent of the owners of those businesses. 41The second occasion was on Thursday 13 February 2014, when two advertisements appeared in the Newcastle Herald in the classified advertisements pages. They were in the same terms as the fourth and fifth advertisements placed on 21 January 2014, except that a landline number was given in lieu of the mobile number. 42Further enquiries made by Mr Michaelis established a clear link between that number and an organisation which in the past had provided office services to Mr Rixon. I am satisfied that each of these advertisements was placed by Mr Rixon.

Evidence of Apology 43It is relevant to a consideration of what penalty ought be imposed for contempt of court to consider whether the contemnor has demonstrated contrition and proffered a full and ample apology. 44On 26 June 2014, when he appeared for himself, Mr Rixon made submissions to the Court and put various arguments. At the conclusion of those arguments he said: "In closing, your Honour, I am deeply sorry and apologise to the Court for breaching these injunctions ..." 45In addition, immediately prior to the final occasion when the matter was before the Court, Mr Rixon delivered two bank cheques to the plaintiff to pass on to two of the consumers with whom he had dealt, repaying amounts of money which he had obtained from them. 46As is apparent, the apology was expressed at the very end of submissions and was not contained in an affidavit. Mr Rixon could not be cross-examined about it, and the payment of money was only made the day before the matter was back before the Court, and was limited in its extent. 47Whilst some weight must be given to the statement of apology, and the tendering of the bank cheques, they both happened so late in the proceedings, and were so minimal in extent, that it is difficult to be persuaded that they represent a demonstration of genuine contrition, nor the proffering of a full and ample apology.

Fine 48Where a fine is to be imposed, it is necessary to consider the contemnor's financial means: s 6 Fines Act 1996. 49There is nothing specific in the evidence put before the Court which would enable a reliable assessment of the financial means of Mr Rixon. 50However, the evidence does show that on 21 May 2014, the Office of State Revenue, acting pursuant to s 100 of the Fines Act 1996, issued a "Time to Pay Order" with respect to a total sum of $69,126. That Order requires Mr Rixon to pay the sum of $150 per fortnight. It continues for the next 17 years until 16 January 2032. I infer from this Order that, at the time it was made, Mr Rixon did not have the financial means to pay the fines which had been imposed, and could only afford the fortnightly payments fixed in the Order. 51According to the report prepared by the Community Corrections officer, at the time of that report, Mr Rixon had secured employment undertaking work in office fit-out and air conditioning installation. Mr Rixon informed the Community Corrections officer that this work did not place him in breach of any court order. 52Whilst there is no direct material in that report indicating the extent of the personal circumstances of Mr Rixon, it does not appear that his financial position generally is such as he would be able to afford a significant fine.

Other relevant matters 53It is clear that the conduct which gave rise to the finding of contempt was undertaken by Mr Rixon for financial gain. That is an aggravating factor to be taken into account by the Court: s 21A(2)(o) Crimes (Sentencing Procedure) Act. 54Although there are a series of mitigating factors to which reference is made in s 21A(3) of the Crimes (Sentencing Procedure) Act, none of those factors have been identified as being relevant here. In particular, I am not satisfied that Mr Rixon has demonstrated any contrition or remorse, nor that he is unlikely to re-offend.

Past History and Conduct 55I have earlier referred to Mr Rixon's past history of offending and his conduct in further breaching the legislation at [33] - [41]. 56I specifically note that I am not imposing any punishment in respect of that conduct. Mr Rixon has already been punished by the imposition of fines. That conduct did not form part of the facts upon which Mr Rixon was found guilty of contempt. However, the conduct is relevant to be considered in imposing a penalty for the contempt which I found because it demonstrates that weight needs to be given to the concept of specific deterrence, because it cannot be said that Mr Rixon's conduct was an isolated occurrence, nor that his prior character and conduct, entitles him to any leniency in the penalty imposed.

Endorsement 57Mr Rixon submitted that the plaintiff had not complied with the provisions of r 40.7 of the Uniform Civil Procedure Rules ("UCPR"), and accordingly, in the circumstances, the Court was restrained from imposing a term of imprisonment for any breach by him of the Court's order. 58Rule 40.7 of the UCPR is in the following form: "40.7 Service of copy of judgment before committal or sequestration (1) A judgment is not enforceable by committal or sequestration unless: (a) a sealed copy of the judgment is served personally on the person bound by the judgment, and (b) if the judgment requires the person to do an act within a specified time, the sealed copy is so served within that time or, if that time is extended or abridged, within that time as extended or abridged. (2) ... (3) The sealed copy of the judgment must bear a notice (naming the persons concerned) that the person served is liable to imprisonment or to sequestration of property: (a) ..., or (b) ..., or (c) where the judgment requires the person to abstain from doing an act, if the person disobeys the judgment. (4) If a person liable to committal or sequestration by way of enforcement of a judgment has notice of the judgment: (a) by being present when the judgment is directed to be entered, or (b) by being notified of the terms of the judgment, whether by telephone, telegram or otherwise, the judgment may be enforced against that person by committal or sequestration without service having been effected in accordance with this rule. (5) The court may dispense with service under this rule. ... " 59Mr Rixon submitted that he had not been served with a sealed copy of the Court's orders which contained any endorsement of the kind described in r 40.7(3). 60Counsel for the plaintiff accepted that the orders which were served on the defendant did not contain a notice of the kind to which r 40.7(3) referred. 61I found in Commissioner for Fair Trading v Rixon (No.2) that Mr Rixon had received a copy of the Court's orders both before the Court made the orders, at which time he specifically indicated his consent, and then after the Court made the orders. As I there found at [9], there was no confusion at all in the mind of Mr Rixon as to what the Court had done and as to what he was, or was not, permitted to do. 62However, it is not insignificant that previously when being dealt with for breaches of the Home Building Act 1979, Mr Rixon was confronted only with a fine. 63The infringement notices only imposed fines upon him. When he was dealt with in the Newcastle Local Court in 2013 for breaches of various provisions of the Home Building Act, the maximum penalty which could be imposed was a monetary fine of 1,000 penalty units. That is to say, $110,000 per offence. His fine for each offence did not approach the maximum which could have been imposed. 64As I have earlier said in Rixon (No.2), I have not the slightest doubt that the conduct of Mr Rixon was deliberate and intentional, and was done with knowledge of the Court's orders. After all, he made an amateurish attempt to conceal his personal involvement in undertaking work which was unlicensed, and in other ways prohibited by the Court's Orders. 65However, the absence of the endorsement meant that Mr Rixon was not on clear notice that his conduct in breaching the orders, which were in effect to restrain a breach of the Home Building Act, could result in him receiving a term of imprisonment. 66It is open to the Court to make an order that Mr Rixon be sentenced to a term of imprisonment, notwithstanding the absence of the notice: r 40.7(4). 67However, as the authorities show this is a discretion which ought not be exercised lightly, and particularly as it involves the deprivation of Mr Rixon's liberty, good cause would need to be shown as to why the Court would exercise its discretion. 68The evidence which demonstrated that the orders had been brought to Mr Rixon's attention did not suggest that although there was no endorsement of the kind required by r 40.7(3) of the UCPR, the fact that Mr Rixon was at risk of a term of imprisonment if he failed to comply with the orders, was brought to his attention in any other way. 69It was not submitted to me by the plaintiff, there was any suggestion of the risk of Mr Rixon being imprisoned contained in any covering letter, or email. Nor was there any suggestion that the issue was discussed or mentioned in any telephone conversation between officers of the Office of Fair Trading and Mr Rixon after the Orders were made. 70This is not a criticism of those involved. It simply indicates that there was no other basis for Mr Rixon to have known that being in breach of the Court's orders might result in a term of imprisonment. 71In those circumstances, in the absence of any warning, in light of the fact that criminal offences for breaching this legislation result only in a fine, I would not be prepared to exercise my discretion to waive the requirements with respect to endorsement under r 40.7 of the UCPR. 72In so deciding, I keep firmly in mind that the plaintiff, the Office of Fair Trading and its lawyers, are well experienced in these matters, and are well experienced in what is required to comply with the UCPR. 73However, the absence of the endorsement does not prevent the imposition of sentence which falls short of a term of immediate imprisonment: see NCR Australia Pty Ltd v The Credit Connection Pty Ltd [2005] NSWSC 1118 at [65] per Campbell J.

Subjective Considerations 74There is very little evidence about Mr Rixon's present subjective circumstances, except what may be gleaned from the Pre-Sentence Report of Community Corrections. He was born in 1984, and so was not yet 30 at the time he breached the Court's Orders. He was a relatively young man. He is unmarried and apparently in a stable relationship of relatively recent origin. 75I have taken all of that material into account in weighing up the penalty which is to be imposed. However, it is necessary to remark that there is nothing in Mr Rixon's subjective circumstances which explains, let alone justifies, the conduct in which he has engaged. 76The Community Corrections report recorded that he had been assessed as "... suitable, with reservations for a Community Service Order ...".

Appropriate Penalty 77Mr Rixon has been found guilty of contempt of court because in 24 separate ways, he has breached the orders of the Court which called upon him to refrain from conducting himself with respect to residential building work in a way which was prohibited by the legislation. 78On any view, as I have earlier pointed out, this is a most serious contempt. 79Had Mr Rixon been on clear notice of the risk that a breach of the orders may have resulted in him being sent to jail, I would have no hesitation in imposing a term of imprisonment upon him. 80However, that punishment is not available for reasons which I have earlier explained. 81Nevertheless, the significant and ongoing breach of those orders across a period of time by Mr Rixon does suggest a real need for specific deterrence. As well, the nature of the conduct is such that the principle of general deterrence is also of importance. 82However, fundamentally, Mr Rixon must be punished for deliberately breaching the Court's orders. Conduct which flaunts a court's authority is deserving of significant punishment. 83I take into account all of the matters to which I have earlier made reference. I take into account matters which may mitigate or aggravate all of the circumstances. I have determined that the appropriate way to proceed is to impose a single penalty for the whole of his contempt, including as it does 24 instances of breach of the Court's Orders. In this way, Mr Rixon will have a clear demonstration of the seriousness with which the Court regards his conduct, what will happen to him if he again conducts himself in a way which is in breach of the Court's Orders, which remain in place, until the Court otherwise orders, and so that the denunciation of his conduct and the vindication of the Court's authority can be made manifest.

Orders 84I make the following orders: (2)I impose on Mr Rixon a term of imprisonment for a period of 18 months to commence on 19 September 2014 and to conclude on 18 March 2016. (3)I suspend the term of imprisonment upon the following conditions: (a)that throughout the period of the term, that Mr Rixon is of good behaviour; (b)that throughout the period of the term, that Mr Rixon complies with the orders of the Court made on 17 April 2013; (c)that throughout the period of the term, that Mr Rixon undertakes 300 hours of community service, which must be completed in accordance with the directions of, and to the satisfaction of, Hornsby Community Corrections Office. (4)I direct that Mr Rixon is to report to the Hornsby Community Corrections Office at 61 Hunter Street, Hornsby no later Wednesday 24 September 2014. (5)I order Mr Rixon to pay the plaintiff's costs of the proceedings on an indemnity basis.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 September 2014