Submissions of Mr Salvato
26Ms Johnson made a number of submissions on behalf of Mr Salvato, principal among which were:
(a)That the contempt of Mr Salvato was only a casual, accidental or unintentional contempt, and was not one where Mr Salvato had a specific intent to defy the authority of the Court;
(b)The contempt of Mr Salvato "... was potentially assisted by the Bank's actions as [Mr Salvato] was at that point under incredible stress and with some justification, considered that the [Commonwealth Bank] had engaged in misleading and deceptive conduct";
(c)The personal circumstances of Mr Salvato at the time of the contempt, namely, "... the serious issues of anxiety and stress ..." mitigate the contempt because, although advice was given to him, Mr Salvato "... did not fully appreciate the full ramifications of the undertakings";
(d)Mr Salvato's behaviour was a result of a misunderstanding on his part "... due to the enormity and stress of the situation, with the contiguous battle to resolve the Bank's issues in regards to negligence, misleading and deceptive conduct ...", and also that Mr Salvato was "... acting under the stress of losing his family and was in a vulnerable position with no support".
27Ms Johnson, in her prepared written submissions, proffered an apology from her client in these terms:
"4. At first instance, the Defendant concedes that his actions may appear to interfere with or undermine the authority, performance or dignity of the courts of justice or those who participate in their proceedings and apologizes if this were to be."
28It will be convenient to deal in turn with the submissions to which I have made reference above.
29The first submission was that the contempt was casual, accidental or unintentional. The phrase "casual, accidental or unintentional", was discussed in Mudginberri. There, it was held that where a contempt of Court is alleged to consist of a failure to comply with an order of the Court, it must be proved by the applicant seeking the finding of contempt, that the conduct was wilful and not merely casual, accidental or unintentional.
30As I discussed in Salvato (No.4) at [127]-[130], and at [166]-[180], I was satisfied that Mr Salvato's conduct was not properly described as casual, accidental or unintentional.
31The authorities actually show, there is no such thing as a "casual, accidental or unintentional contempt", which is what Ms Johnson submitted on behalf of Mr Salvato that the Court should find. It is necessary, in order for a finding of contempt to have been made, that the Court has been satisfied by the finding for the order, that the conduct was not casual, accidental or unintentional. If the conduct was casual, accidental or unintentional, then no contempt is made out.
32This submission does not assist in the determination of an appropriate penalty.
33The second part of the first submission was that the Court should find that Mr Salvato did not have a specific intention to defy the authority of the Court. The finding of a specific intention is unnecessary for a finding of contempt. However, the intention of the contemnor may be relevant in determining their culpability, and the impact which their conduct may have on the administration of justice. Intention may also be relevant to determining the nature of the penalty which is to be imposed.
34In light of the submissions, it is necessary therefore to consider whether or not the contempt of Mr Salvato was intentional.
35In addressing this submission, and the question of whether such finding ought be made, I will not repeat all of the facts set out in Salvato (No.4).
36In that judgment, I found that:
(a)Mr Salvato was present in Court on 3 December 2012, and he was represented by a solicitor; he, after consideration and receiving legal advice, gave the undertaking and was present when the exchange between counsel for the Commonwealth Bank, the Bench and Mr Salvato's lawyer took place, and which is recorded in [49]. He was also present in Court during the delivery of an ex tempore judgment which, amongst other things, emphasised the seriousness of the undertakings which were proffered, and the effect which those undertakings had upon the Court's decision [50]-[53].
(b)During the proceedings on 3 December 2012, and consistently with the previous course of the proceedings, including the factual material upon which the application of 3 December 2012 was based, in particular the fact that a contract for sale of the property had been exchanged and settlement, with vacant possession, was imminent, no differentiation was made before the Court between the positions of Mr Salvato personally, and that of his family. They were both being treated as identical. As I recorded in [45], there was no suggestion that the giving of vacant possession by Mr Salvato did not include Mrs Salvato or their children.
(c)Although Mr Salvato left the property on or about 4 December 2012, he continued to access the property freely and without restriction, and in all respects, treated it as his home except for the fact that he did not sleep there on a regular overnight basis: see [79].
(d)Mr Salvato's wife, Victoria Salvato, and their two children remained living in the property having first moved in many years prior to the giving of the undertaking, until well after the undertaking had been given, until some time in April 2013. Mrs Salvato was not told by Mr Salvato of the proceedings which had been brought against him by the Bank seeking possession of the property, and he did not tell her of the history of the proceedings, including the giving of the undertaking to the Court on 3 December 2013. Neither Mr Salvato nor Mrs Salvato had prior to the hearing of the proceedings for contempt, made any arrangements for the removal of their household furniture or belongings, nor had any arrangements for alternative accommodation for Mrs Salvato and their children been made until some time in March or April 2013: see [79]-[84].
(e)When the time for compliance with the undertaking arrived, Mr Salvato did not retrieve the keys to the property and made no attempt to provide the keys to the property to the Commonwealth Bank in accordance with his undertaking.
37I am satisfied beyond a reasonable doubt, that Mr Salvato had no intention of complying with that part of the undertaking which required him to give possession of the property to the Bank.
38That conclusion is based upon my satisfaction that as the facts set out in [36] above clearly demonstrate, at no time did Mr Salvato take any steps whatsoever to enable the Bank to have possession of the property. The fact that he personally moved out of the property in the way in which I described in Salvato (No.4), did not amount to compliance with the undertaking, and the giving of possession to the Bank.
39The evidence of Mr Salvato which he gave during the hearing on the issue of whether he had committed a contempt, was not accepted in the absence of corroboration.
40It may be, but this is speculation, that Mr Salvato thought that arrangements could ultimately be reached with the Bank which would enable his family, at least, to remain in possession of the property. However, as Salvato (No.4) shows, his undertaking was a solemn one, he was aware that the Court treated it seriously, he was told by his lawyer that one of the available penalties for failure to comply with the undertaking was a finding of contempt of Court, which may carry with it a penalty of imprisonment. Compliance with the undertaking, including taking steps to inform his wife, make arrangements for alternative accommodation for his family, and make arrangements for the removal of the household furniture, goods and clothing, were all simple steps which could have been done without any real difficulty on Mr Salvato's part. He took no such steps.
41His actions were deliberate and, I am satisfied, intentional. He was aware that his conduct did not comply with his undertaking which meant that it would amount to a contempt. In those circumstances, I am satisfied that his conduct constituted an intentional contempt.
42The second submission made by Ms Johnson for Mr Salvato was that the contempt which he committed, was potentially assisted by the Bank's actions. It was said that Mr Salvato considered that the Bank had engaged in misleading and deceptive conduct and was justified in so doing.
43There is no evidence before the Court on these proceedings that the Bank has engaged in misleading and deceptive conduct, nor is there any evidence that the Bank's conduct has in any way contributed to the position in which Mr Salvato finds himself. On the contrary, the lengthy history of the proceedings which is set out in Salvato (No.4), indicates that the Bank's claim was one that vindicated its legal rights and entitlements.
44On 12 July 2012, a consent judgment was entered in favour of the Bank against Mr Salvato for a little over $1.63M together with interest. A stay of the enforcement of that judgment was refused. On 24 August 2012, orders were made giving judgment for the Bank for possession of the property at Vaucluse. Thereafter the Bank, to enforce its legal rights, took various steps.
45As the history recorded in [29]-[34] of Salvato (No.4) shows, all the Bank has done is to take steps to enforce its legal rights. No claim was made during those proceedings that the Bank's earlier conduct with respect to the loan had provided a basis upon which the Bank should not be entitled to enforce its rights.
46As well, notwithstanding that the judgment had been entered against Mr Salvato, he did not seek to bring a cross-claim in these proceedings against the Bank, making claims of the kind which are now made by Ms Johnson in her submissions.
47The submission that the Bank's actions assisted or contributed to Mr Salvato's contempt is not made out and I reject it.
48The third submission made by Ms Johnson for Mr Salvato, addressed the personal circumstances of Mr Salvato at the time of the contempt. It was submitted that there were serious issues of anxiety or stress mitigating the contempt, with the consequence that Mr Salvato did not fully appreciate the fully the ramifications of the undertaking.
49There is no evidence at all, tendered by Ms Johnson, which established that at the time of the contempt, namely on 21 December 2012, Mr Salvato was suffering from any serious issue of anxiety and stress which meant that he did not fully appreciate the ramifications of the undertaking.
50On the contrary, the Court was told on 3 December 2012, that the ramifications of the undertaking had been fully explained to Mr Salvato by his lawyer, and he was well aware of them. In addition, the Court, in discussion with Mr Salvato's lawyer, noted that the undertaking was serious and a failure to comply with it may have serious consequences.
51If a condition of anxiety or stress meant that Mr Salvato did not fully appreciate the undertaking, then that is a matter which required proof by evidence including expert evidence, if such evidence was available. There was no evidence tendered on this part of the hearing, and for the reasons which I gave in Salvato (No.4), Mr Salvato's evidence during that hearing was not accepted unless it was independently corroborated, or against his interests. There was no evidence on that hearing which supported this submission, and I reject it.
52The fourth submission was that Mr Salvato's behaviour was the result of a misunderstanding due to the enormity and stress of the situation, is in substance, the same as the one with which I have just dealt.
53The only difference is that this submission raises the fact that Mr Salvato was acting under the stress of losing his family. It can be readily accepted that, since he moved out of the house, he and his wife were having marital difficulties. No doubt these difficulties caused him some upset and concern.
54However, it does seem that he was able to maintain his relationship with his family by visiting his children and caring for them, he was able to maintain his work without interruption and was able to give instructions to his solicitor, Mr Shacklady, with respect to quite complex questions of the state of the balance of the loan outstanding to the Bank.
55Whilst I accept that he was upset and concerned at the marital difficulties that he was having with his wife, there is no evidence that those difficulties, or his upset and concern, affected adversely his understanding of, or his ability to comply with, the undertakings.