HIS HONOUR: The plaintiff (Mr Pisano) charges the first defendant (Ms Dandris) with contempt of court. The statement of charge says that:
"The first defendant is charged with contempt by failing to comply with the freezing order of the court dated 14 November 2013."
Some 28 particulars are given, each relating to a separate payment of a sum of money. The first of those occurred on 14 November 2013. The second occurred on 28 November 2013. The last occurred on 31 July 2014. Six of the particularised transactions have been withdrawn as particulars of breach of the Court's order.
The charge is based on a freezing order made ex parte on 14 November 2013. Order 4 restrained Ms Dandris from, up to and including 18 November 2013, removing, disposing, dealing with or diminishing the value of any of her assets in Australia below the unencumbered value of $1 million. There were the usual exceptions in respect of payment of ordinary living expenses and payment of reasonable legal expenses.
On 3 July 2014, for reasons that are totally unexplained, the Court made an order under r 36.17, amending the order of 14 November 2013 "nunc pro tunc", whereby in paragraph "14" the words "up to and including 18 November 2013" are now "18 November 2014".
The reference to "paragraph 14" must be understood as one to "paragraph 4". Order 14 of the orders made on 14 November 2013 dealt with the position of a bank with which Ms Dandris conducted an account, on which account she made operations that might be in breach of the orders.
Referring back to the statement of charge, all but the first and last of the particularised withdrawals occurred after 18 November 2013 and before 4 July 2014. Thus, although the order of 3 July 2014 was said to operate "nunc pro tunc" (and that is the usual operation of an order under r 36.17), the position in fact, as opposed to legal fiction, is that on that material alone, there was no extant order of the Court in place prohibiting the withdrawals, save for the first and the last.
Mr Weinberger of counsel, who appeared with Ms Knox of counsel for Mr Pisano, referred in the course of submissions to an order made by consent on 18 November 2013. That order (reflecting handwritten short minutes of order) relevantly extended the orders of 14 November 2013 up until further order, with a now irrelevant carve-out to cover the possible sale of a described parcel of real estate.
However, the statement of charge did not charge breach of the orders made on 18 November 2013. Nor did it charge breach of the orders of 14 November 2013 as extended by those later orders. For that matter, it did not charge failure to comply with the orders of 14 November 2013 as varied on 3 July 2014 under r 36.17.
If I may say so, that is a totally unsatisfactory situation. Contempt, even if civil (and I shall return to this), may be subject to consequences more ordinarily associated with breach of the criminal law. The requirements of SCR Pt 55 r 7 are quite clear. A statement of charge is to specify the conduct of which the contemnor is alleged to be guilty. It is clear on the authorities that the statement of charge must identify the precise conduct alleged to constitute contempt. One of the purposes of the statement is to provide the alleged contemnor with due notice and a proper opportunity to answer the charge. Unless and until the particulars of charge are amended, they limit the scope of the matters able to be considered.
In the present case, an adequate statement of charge should have referred either to the order of 18 November 2013 (and in my view, this was the proper course to take) or to the order of 14 November 2013 as amended by the order made under the slip rule on 3 July 2014. It did neither.
Mr Weinberger declined to seek leave to amend the statement of charge. He took his stand on the order made on 14 November 2013 as amended nunc pro tunc on 3 July 2014.
Mr Weinberger did, however, submit that the orders of 18 November 2013 were relevant in an evidentiary sense. He submitted that they showed (having been made by consent) that Ms Dandris must have been aware that what she did thereafter was, at least potentially, in breach of the earlier orders. Thus, he submitted, the limitation often applied to orders under r 36.17 - that they should not, among other things, be inexpedient or inequitable - did not apply. He submitted that it could not be inequitable for the order of 3 July 2014 to have retrospective effect, in circumstances where, in the real world, Ms Dandris must have known, or must be taken to have known, from 18 November 2013 that she continued to be bound by the freezing order of 14 November according to its terms.
That is a very interesting submission. However, it really requires the Court to give effect to the order of 18 November 2013, even though that order is not referred to in any way in the statement of charge. Further, it introduces a new aspect to the way in which Mr Pisano's case is put. That is particularly significant because I am at present dealing with an application under UCPR r 29.10. That application followed an application under r 29.9, which Mr Weinberger declined to argue.
I said a little while ago that Mr Weinberger's submissions characterised the contempt as a civil contempt. Mr Jobson of counsel, who appeared for Ms Dandris, appeared to accept that characterisation. That no doubt is why the parties treated r 29.9,.10 as applicable. However, to my mind, it is by no means clear that the contempt charge should be treated as civil.
In Pang v Bydand Holdings Pty Limited [2011] NSWCA 69, the Court of Appeal appeared to treat the distinction between civil and criminal contempt as depending on whether the breaches charged were "contumacious". That appears in the reasons of Beazley JA (with whom McColl JA agreed) and, separately, in the reasons of Lindgren AJA (with whom McColl JA also agreed).
However, a different test was applied in Street v Hearne (2007) 70 NSWLR 231 by Handley AJA (in dissent). His Honour's characterisation of the distinction appears to have been adopted on appeal (Hearne v Street (2008) 235 CLR 125).
In the Court of Appeal, Handley AJA (who as I have said was in dissent) said at [156] that where it clearly appears that proceedings are remedial or coercive in the interest of a private individual, they are for civil contempt, and where they are punitive, they are criminal.
In the High Court, the plurality (Hayne, Heydon and Crennan JJ, with whom on this point Gleeson CJ agreed) said at [133] that:
The distinction between that which is remedial or coercive on the one hand and that which is punitive on the other corresponds with the distinction between seeking to ensure compliance with the relevant obligation and seeking to punish for past breaches of it. It is a distinction to be applied, as the parties agreed, bearing in mind the need to approach the application of the person seeking the remedies for contempt by reference to its substantial character, not to merely formal or incidental features.
In the present case, there can be no question of seeking to enforce compliance with the orders (and this is true however one views those orders as having been made and continued). The application can only be punitive in nature. Accordingly, it may very well be, despite the way in which Mr Weinberger approached the case, it should be treated as one of alleged criminal contempt.
For present purposes, there may be an important distinction. The Court held in Pang that, regardless of the characterisation of the contempt, the criminal standard of proof applied. In doing so, their Honours followed what had been said by the High Court in Witham v Holloway (1995) 183 CLR 525. However, Witham was decided before the "uniform" Evidence Acts came into force.
Where proceedings are subject to the Evidence Act 1995 (NSW) the standard of proof is dealt with by that Act. Section 140 provides that in civil proceedings the standard of proof is "the balance of probabilities" (and of course preserves the "Briginshaw" test where it is relevant). Section 141, however, provides that in criminal proceedings the standard of proof on the prosecution is "beyond reasonable doubt", whereas where the defendant bears any onus, the standard is "the balance of probabilities".
The dictionary to the Act provides, less than helpfully, that a civil proceeding is a proceeding other than a criminal proceeding, and that a criminal proceeding is a proceeding for the prosecution for an offence. An offence in turn is defined as an offence against or arising under an Australian law. An Australian law means a law of the Commonwealth, a State or a Territory. It includes, as I understand it, the unwritten law.
In the present case, all those theoretical questions can be put to one side, if, as a matter of practicality only, I were to proceed on the basis that the criminal standard applies. I proposed to do that, without deciding how to resolve any conflict between the Evidence Act and Pang, because, as at present it seems to me, the outcome is likely to be the same whether the civil or criminal standard is to be applied.
On that basis, I do not propose to resolve the question, whether the contempt charged is civil or criminal. That seems to me to be preferable where the question was not addressed in submissions and where, as I understand it, Mr Weinberger was prepared to accept the criminal standard as applicable.
Mr Jobson, in the course of pressing his application under rule 29.10 (which applied to all but the first and last of the payments that were particularised) relied on two other substantive grounds. One was that the evidence for Mr Pisano did not prove that the withdrawals were not for one or other of the purposes accepted or authorised by order 9. The other point was that as to one particular group of transactions, there was no reduction in net assets because what they showed was a loan and its repayment.
As to the first point: Mr Weinberger referred to the decision of White J in ASIC v Sigalla (No 3) [2010] NSWSC 1076. In that case, his Honour dealt specifically with this point at [46], [47]. His Honour held that the onus of establishing that the payment was for an accepted purpose lay on the person asserting that. I set out those paragraphs of his Honour's reasons:
[46] The onus of establishing that the transfer of funds was for the payment of reasonable ordinary living expenses or reasonable ordinary operating expenses is on Mr Sigalla (Vines v Djordjevitch (1955) 91 CLR 512 at 519-520). Provisos (c) and (d) to the orders express an "exculpation, justification, excuse, grounds of defeasance, or exclusion which assumes the existence of the general or primary grounds from which the liability arises, but denies the liability in a particular case by reason of additional or special facts".
[47] In those circumstances the burden of proof is on the party seeking to rely upon the additional special matter.
Mr Jobson did not submit that what his Honour had said was plainly wrong. In any event, had that submission been put, I would not have agreed. In my view, if I may say so with respect, what his Honour said was consistent with long-existing authority, and was plainly correct.
As to the second matter, it would appear that Mr Jobson's submissions inadvertently mischaracterised the relevant transactions. There is no doubt, on the face of the banking records, that the payment in was in the form of a loan from Ms Dandris' father. That transaction of itself would be asset-neutral because the asset constituted by the cash loan would be offset by a liability to repay that loan. If, as Mr Jobson submitted, the loan had been repaid, the effect would also have been asset-neutral.
However, the records do not show that the loan was repaid. They show, instead, that the proceeds of the loan were paid out in three tranches to Ms Dandris' husband Mr Williams. It follows that the transactions are capable of representing a depletion of assets that did have an effect on the net asset position of Ms Dandris, because it does not appear from the material to which Mr Jobson referred that the payment out had the effect of extinguishing her liability to her father.
I return to the first matter argued, which was the effect of the retrospective order made on 3 July 2014. I start by saying that I do not think that it is proper to permit Mr Pisano, as prosecutor, to rely on the order made (by consent) on 18 November 2013, in circumstances where that order was not particularised in the statement of charge, and where no application was made to amend the statement of charge. It was not the case that Ms Dandris came to court to meet, that her actions were in any event in breach of that order (or of the order of 14 November 2013 as extended by that order).
In those circumstances, so it seems to me, the contempt hearing must be dealt with on the basis of the particularised matters that fall properly within the statement of charge.
I accept that the order of 3 July 2014 is able to be dealt with in the context of the statement of charge. That follows because it purports retrospectively to amend the order of 14 November 2013 by extending the end date up to which that order operated. However, it goes no further than that.
That raises the question of how it could be said that someone is in contempt of an order of the Court for doing something which, as a matter of chronology or real world fact, was not in breach of the order at the time it was done. Leaving aside (as I think must be done) the order of 18 November 2013, and proceeding on the basis that if a contempt is to be made out in respect of all but the first and last charges, then it must be in reliance on the order of 3 July 2014, the reality is that it was not possible for Ms Dandris, at the time she made the various other withdrawals, to comply with the order because, at the time she made those withdrawals, the operation of the order had not been extended retrospectively, under r 36.17.
True it is that, as a matter of legal fiction, the opposite situation is (and since 3 July 2014 has been) deemed to be the operative universe. But in looking at a charge of contempt, it is necessary to consider, among other things, whether it was possible for the alleged contemnor to have complied with the order. It is also necessary to consider whether the alleged contemnor, in doing what she did, intended to breach the order.
In my view, neither of those tests can be satisfied. It follows that for those reasons I hold that the alleged contemnor, Ms Dandris, has no case to answer in respect of all but the first and last of the withdrawals particularised, that is to say the transaction of 14 November 2013 and the transaction of 31 July 2014.
In relation to those transactions, Mr Jobson indicated that it was his intention to go into evidence.
I should add that there was no submission on either side directed to one aspect of order 4(a): namely, whether any of the transactions in question had the effect of diminishing Ms Dandris' assets below the unencumbered value of $1m. On the view to which I have come on all but the first and last of the transactions, it is not necessary to explore that question.
[3]
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: 01 September 2015