NGI Savannah Living Communities Pty Ltd v Dunne

The conduct found to have breached the freezing order involves the steps which were taken, specified in paragraph 62 of the reasons of the Court given on 13 May 2025, all of which occurred on 14 March 2023. That conduct involved Mr Dunne, who was on that day the sole director, secretary and shareholder of MP01 Pty Ltd, ceasing to be the director and secretary of that company and transferring the one share in that company of which he was the shareholder to another company, Phantom Cigar Pty Ltd. Also on that day, Mr Dunne then transferred the 10 shares in Phantom Cigar Pty Ltd, of which he was the sole shareholder, to another company and resigned as a director of Phantom Cigar as well. The other company was Lifestyle Resorts 685 Pty Ltd and, on the same day, Mr Dunne resigned as the director of that company and transferred his 100 shares in Lifestyle Resorts 685 Pty Ltd back to Phantom Cigar Pty Ltd.

That was found to be a breach of the freezing order, which restrained Mr Dunne from dealing with his assets. It was accepted in reaching that conclusion that his shares in each of those companies were his assets for the purposes of the order.

An argument that the charge should have been found not to be proven because it incorporated the conduct of resigning as a director as well as transferring his shares was rejected on the basis that the concept of "dealing with" his assets was broad enough to capture resigning as the sole director at the same time as transferring his shares, as a result of which Mr Dunne not only divested himself of the property comprising the shares but also of any control over the company.

It is not controversial that three days after all of that occurred, which, as I have said, was on 14 March 2023, Mr Dunne presented a petition for his bankruptcy and has been a bankrupt since that time. He will remain in that position, in accordance with the legislation, for a period of five years.

The purposes of today's hearing is to determine the appropriate penalty to be imposed on Mr Dunne for his contempt of court.

As to that, under rule 930 of the Uniform Civil Procedure Rules 1999, the Court may punish a person who has committed contempt by making any order that may be made under the Penalties and Sentences Act 1992.

For the plaintiff, it is submitted that the Court should impose a penalty of three months' imprisonment on Mr Dunne. That submission is made in circumstances where it is submitted that, because Mr Dunne is a bankrupt, he would not be able to pay a fine. Further, that his conduct in resigning or removing himself as a director and transferring his shares, being the only shares in those companies, took for himself a decision which should have been left for his trustee in bankruptcy as to what might happen to those shares. Further, that there is no evidence before the Court that what he did was other than deliberate and knowingly in breach of the freezing order and, therefore, disregarding the authority of the court. Next, that there is no evidence before the Court from Mr Dunne on this hearing and only an apology conveyed to the Court from him through his counsel, which is said to demonstrate a lack of contrition. And, lastly, the plaintiff submits that having regard to the fact that Mr Dunne has himself, through his counsel, submitted that an appropriate penalty would involve a fine and, in default of payment, imprisonment, the Court should accept imprisonment is the appropriate penalty to impose.

On behalf of the plaintiff, the serious nature of breaching an order of the Court is emphasised and the importance of the Court ensuring the due administration of its proceedings by appropriately punishing a person who defies its orders.

On the other hand, on behalf of Mr Dunne it is submitted that it is important to have regard to exactly what was done in its factual context. As to that, the time between the date on which the freezing order was made, 26 October 2018, and the conduct in breach of the order, which was on 14 March 2023, is noted. I accept the plaintiff's submission that, in a broader sense, the passage of that time would not ameliorate the objective nature of the conduct. But I do regard it as a relevant factor here because of the nature of the conduct itself.

Next, it is emphasised that, as noted, a few days later in March 2023, Mr Dunne, on his own petition, did become bankrupt, and by force of the relevant legislation his property vested in the bankruptcy trustee, and he was also disqualified from being a director. So, on behalf of Mr Dunne, it is submitted that what he did on 14 March 2023 was effectively no different from what would have happened as a matter of law three days later insofar as the plaintiff and its ability to enforce a judgment against the assets of Mr Dunne is concerned.

Further, it is emphasised that on the material before the Court, there was and is no particular value to the shares of the companies.

As to that, I accept that all that is before the Court is evidence of the value of the share capital of each of those companies, which is, as I have said, very limited. In the case of MP01, it consisted of one $1 share; in the case of Phantom Cigar, it consisted of ten $10 shares; and in the case of Lifestyle Resorts, it consisted of 100 $1 shares. I do not accept the submission from the plaintiff that the Court should somehow infer, in the absence of evidence put before the Court by Mr Dunne, that those companies may have beneficially owned other property. All that the Court knows about those companies is what was put before it on the previous occasion, which is limited to what I have said. They are each said to have been trustee companies in respect of discretionary trusts. They cannot be said to be the beneficial owners of any property in those trusts, and I am not prepared to infer, on a proceeding such as this, that they owned anything else; or, therefore, that the shareholding in them on the part of Mr Dunne was of any particular value.

That is relevant not because it excuses failure to comply with an order, but because of the lack of apparent consequence for the enforcement of the proceedings of this Court. By which I mean, in plain terms, it is not apparent that Mr Dunne's conduct in April 2023 of divesting himself of his shares in those companies, and of his directorships, thwarted the ability of the plaintiff to enforce its judgment by reference to those assets of Mr Dunne. That says nothing about any other assets he may previously have had; or of the fact that the plaintiff has not been able otherwise to enforce the judgment obtained against him.

The Court accepts the apology conveyed on behalf of Mr Dunne through his counsel. I take no more from the apology than that.

I would infer from the time that had passed, between the making of the freezing order and the breaching conduct, that it may not be the case that Mr Dunne acted deliberately in breach of the order. He may have done what he did for any number of reasons; but almost five years down the track, he may not have had front of mind the breadth of the freezing order, which was articulated in very wide terms.

Counsel for Mr Dunne has drawn the Court's attention to the decision of the Full Court of the Federal Court in Kazal v Thunder Studios Inc [2017] FCAFC 111; (2017) 256 FCR 90 at paragraphs 101 to 103 where there is a helpful identification of nine considerations that a sentencing judge in a contempt proceeding might have regard to in determining the appropriate punishment.

The first is the seriousness of the contempt proved. As to that, as I have said, it is serious that it involved breach of an order of the Court. But the particular circumstances places it, in my view, at the lower end of seriousness in contrast to some other circumstances that are referred to in the cases.

Secondly, the contemnor's culpability; and thirdly, the reason or motive for the contempt. It is clear that Mr Dunne was responsible himself for the actions that he took, but as I have said, I find it difficult to conclude that the reason or motive that he did so was concerned with the freezing order as opposed to some other reasons which may or may not have been connected with his plan to petition for bankruptcy, which took place three days later.

Fourthly, whether the contemnor has received or sought to receive a benefit or gain from the contempt. It is difficult to reach a conclusion about that in the circumstances and having regard to the limited evidence before the Court about the value of the shareholding in each of those companies.

Next, whether there has been any expression of genuine contrition by the contemnor. I accept that that is relatively limited, given that it comprises only an apology conveyed through counsel, but nonetheless, there is an apology.

I do not have any information before me about the character or antecedents of Mr Dunne. As to his personal circumstances, I know only that he is a bankrupt and will continue under the supervision of the trustee in bankruptcy until March 2028.

In terms of deterrence of Mr Dunne and others, I accept that it is important to deter people from breaching orders of the Court. In his case, there is no evidence that he has been in this position before, which is a relevant factor.

It is also important that the Court denounces any contemptuous conduct.

The Full Court in Kazal emphasises that it remains essential to have regard to the objective seriousness of the conduct and its effect on the administration of justice as well as subjective factors in relation to the person concerned, the capacity they have to pay a fine and keeping in mind that imprisonment should be a last resort.

When I balance all of those factors, I do not accept that a penalty of imprisonment is an appropriate one in this case. In my view, that would not be a just penalty to impose in all the circumstances.

At the other end of the scale, if Mr Dunne had the capacity to pay it, I would have been inclined to accept that imposition of a fine was an appropriate penalty. However, in circumstances where Mr Dunne is not in a position to pay a fine, because he is bankrupt, and, in all likelihood, if I made such an order with a period of imprisonment in default, some other third party would pay the money comprising the fine, I do not regard that as an appropriate punishment, or denunciation for the conduct insofar as Mr Dunne himself is concerned.

Given that I have the range of penalties available under the Penalties and Sentences Act to choose from, in my view, a community service order is more appropriate because it has a tangible impact on Mr Dunne because he is required to do something and should convey appropriately, given the nature of the contempt, the Court's disapproval for the conduct.

Mr Dunne, before I can do that though, I need to make sure you understand what a community service order involves. I am going to tell you this now, but if you want to think about it and speak to your lawyer before I make the order, I will give you that time because you may not have thought about it before now. So I will just tell you that the general requirements of a community service order will be that number one, you not commit any offence during the period of the order. You will have to report to an authorised Corrective Services officer at a place that is convenient to you to obtain a copy of the order. During the term of the order which is one year, you will need to perform in a satisfactory way the community service that they direct you to, for the number of hours, which will be 100 hours, at the times that they tell you to. And you have to tell the authorised Corrective Services officer of any change in where you are living or working within two days of that happening. You cannot leave or stay out of Queensland without the permission of an authorised Corrective Services officer and you must comply with any other direction that they give you.

If you breach the community service order by not doing the work, you can be punished for that. It is an offence and you can be dealt with for breach of a community service order. The court can also, effectively, re-sentence you in another way. It is a little bit more complex where contempt is concerned, but there are other proceedings that can arise. I can only make that order if you agree to it being made and if you agree to comply with it. Now, would you like a minute to think about that before you answer me?

THE CHIEF JUSTICE: You agree to such an order being made and you agree to comply with it?

THE CHIEF JUSTICE: Okay. So I will formally impose the order at the end. You can take a seat now. The next thing I need to deal with is the costs of the proceedings. As to that, on behalf of the plaintiff, it is submitted that costs should follow the event, that the Court should regard the event as the plaintiff having succeeded in its application and that this is not an apt case in which costs of issues can be divided up in any way. The public benefit of a party bringing a proceeding for contempt is also emphasised and the plaintiff submits the costs are not divisible because it is not possible to draw a bright line between the issues.

The plaintiff also submits that costs should be awarded on the indemnity basis, referring the Court to a number of authorities in which that has been the outcome, although those authorities emphasise that there is no specific or immovable principle in that regard.

For the first defendant, Mr Dunne, it is submitted that, on the contrary, the issues are divisible in the sense that there is a distinction to be drawn between charges 1 and 2, which were not found to be made out, and charges 3, 4 and 5, which were, and that rather than making cross-orders, for example, that the plaintiff pay Mr Dunne's costs of that part of the proceeding in which the plaintiff was not successful, and vice versa, a more apt way to proceed, consistent with the authorities that do permit a broad brush approach to be taken, is to order that, for example, Mr Dunne pay 50 per cent of the plaintiff's costs.

I observe also that, in addition to there being multiple charges, some of which were found to be made out and others not, there were other issues agitated at the hearing by counsel for Mr Dunne that concerned service of the order and irregularity in the form of the order.

I accept the submission that there is an ability to divide up the issues to some extent. And it is of note that a significant part of the hearing was concerned with not so much proof of the facts underpinning charges 1 and 2, but the legal basis on which the Court might conclude they were made out. There was a fair bit of time also spent on the issues agitated on behalf of Mr Dunne that I have mentioned, of knowledge and irregularity in the form.

I take the view that it would not be fair to order Mr Dunne to pay the whole of the plaintiff's costs because of the outcome in respect of charges 1 and 2 and that there should be some recognition of the plaintiff's lack of success in that regard.

On balance, taking all the factors into account, in my view an order that Mr Dunne pay 50 per cent of the plaintiff's costs is about as fair as it can be. As Mr Savage KC, for Mr Dunne, noted, if cross-orders had been made and assessed, it may have been the case that there could be a neutral result. But I am not in a position to determine that, and I do think that bearing in mind that public element of a contempt proceeding, it is appropriate, in light of its partial success, that the plaintiff have an order for costs in its favour.

As to whether those costs should be assessed on the indemnity basis, that is a difficult question, because the same issue arises in terms of Mr Dunne's financial circumstances. I note there is, to some extent in the cases, recognition that ordering costs to be paid on the indemnity basis can also be regarded as a sanction to mark the Court's condemnation of the breach of its orders. Although, as I have mentioned already, there is no straightforward rule in that regard.

Having regard to the nature of the contempt and the penalty that I have imposed and the reasons for doing that, and the differential outcome in relation to the proceeding, I propose to order that the costs be paid on the standard basis only.

So in respect of the penalty, the court makes an order under section 101 of the Penalties and Sentences Act, being a community service order. The order will require that Mr Dunne perform 100 hours of unpaid community service, and it will have the requirements in section 103, which are the matters I read out to Mr Dunne a short time ago, and those 100 hours are to be performed within one year from the making of the order. I further order that the first defendant, Mr Dunne, pay 50 per cent of the plaintiff's costs of the contempt proceeding, to be assessed on the standard basis.