Pisano v Dandris

Judgment (ex tempore - revised 21 august 2015)

HIS HONOUR: In reasons I gave earlier today, I explained why, in my view, some 20 of 22 extant particulars of contempt of court, alleging the payment out of moneys supposedly in breach of a freezing order, could not be sustained. In the course of those reasons I explained the relevant background. I will not repeat what I said. I will assume that the reader of these reasons has read also those earlier reasons.
The two remaining dispositions of property, in respect of which Ms Dandris gave evidence, were a transfer of some $250,000 to her husband, Patrick Williams, on 14 November 2013 and a transfer of $3,895 on 31 July 2014.

The first transfer

That focuses attention on the transfer of $250,000 made on 14 November 2013. The starting point is to record that the transfer, according to the bank statements, was made at 7.42pm on that day.
The next point to note is that Ms Dandris accepted in her affidavit and in cross-examination that she had had a discussion with her solicitor who told her about the freezing order and its effect, and that she understood that "everything in my name is frozen". She said in cross-examination that this occurred no later than 7.15pm on 14 November 2013. (I should say that para 4 of her affidavit, which was not read but which effectively got into evidence because she was cross-examined on it, refers to 14 November 2014. Putting that in context, it is clear that "2014" is a mistake.)
It follows, therefore, that Ms Dandris made the transfer of $250,000 at a time when she was aware, first, that the freezing order had been made and, second, of its impact on her ability (or lack of it) to deal with her assets.
The next thing to note is that, immediately before the sum of $250,000 was transferred out of her account, Ms Dandris caused a sum of $125,000 to be transferred into it. The account which she transferred the sum of $250,000 was the same as the account from which she had transferred the sum of $125,000. It was her husband's account.
In the course of her evidence, Ms Dandris sought to explain this payment by saying that she decided to use her line of credit facility against a property then owned by her at Bondi to pay her ordinary living expenses and legal expenses. She then said that she sought to make a transfer from her line of credit account to achieve that. However, she said, in the course of doing so, she "inadvertently transferred from [her] husband's line of credit an amount of $125,000. This then required [her] to redirect the funds which [she] did".
Then, Ms Dandris said, in para 13 of her affidavit: [13] Immediately upon being made aware of my inadvertent transfer from my husband's line of credit in the amount of $125,000, I transferred an amount of $250,000 from my line of credit into my husband's line of credit. The net amount therefore transferred by me from my line of credit to my husband's line of credit was $125,000 ('the net transfer'). Exhibited as pages 4 to 5 are copies of my husband's and my St. George Bank statements confirming these transfers.
I interrupt the narrative at this point to note that Ms Dandris maintained at least two bank accounts with St George Bank. One, the number of which ended in 231, was the line of credit account to which I have referred. The other, ending in 550, appears to have been an operating account which had an approved credit limit. The credit limit on the line of credit account was $125,000. Immediately before the transaction to which I have referred, that account had a zero - i.e. wholly undrawn - balance. The other account had a credit limit of $30,000. It had about $1,900 in available credit at the relevant date.
The explanation that Ms Dandris gives of the "mistake" in her attempt to transfer money from her line of credit account to some other account is very difficult to accept. Nonetheless, it was not put to her specifically that her evidence in this regard was false. Accordingly, the question for me, bearing in mind that Mr Pisano must prove contempt beyond reasonable doubt (for the reasons given in my earlier judgment), is whether, notwithstanding the doubts I have about this aspect of her evidence, I find it to be so unworthy of belief that it must be either false or, at the very least, entirely lacking in probative value, and thus incapable of leaving a reasonable doubt in my mind.
That is not to say that Ms Dandris bears any onus of disproving contempt (except for the limited issue dealt with at [25] to [27] of my earlier reasons. It reflects the fact that, Ms Dandris having elected to give evidence, the question must be decided on all the evidence. And it recognises that, absent some hypothesis consistent with "innocence", the payment out of $125,000 is, prima facie, a breach of the orders of 14 November 2013.
Despite my suspicions, and despite the unfortunate impression that Mr Dandris gave in the witness box, I do not form that view of this aspect of her evidence. In relation to her demeanour in the witness box, I take into account that this is a very serious matter, coming to Court as part of fiercely fought litigation which has so far gone to the Court of Appeal and, I think, may be going further. It is hardly surprising that Ms Dandris has a very significant degree of personal investment in the dispute. In those circumstances, I think, considerations of demeanour are even less reliable as a guide to the truth than ordinarily they may be.
Ms Dandris said in effect than she made an inadvertent transfer from her husband's account to hers, and that she then sought to reverse it immediately. That relates to $125,000 of the $250,000 transferred out on 14 November 2013 at about 7.42pm.
If the money had been transferred to Ms Dandris (or she had caused it to be transferred to her) beneficially, then, it must be, the payment out would amount to a depletion of her assets. However, if it were a payment made by mistake, the result would seem to me to be that she held it as a constructive or resulting trustee for the payee: her husband.
In that case, discharging the trust (and the debt) by repaying the amount, whilst it might deplete her assets in a legal sense, could not affect any beneficial depletion of her assets (perhaps, more correctly, any depletion of her beneficial assets).
Accordingly, since I do not find myself able to reject entirely the explanation given, I am not satisfied that the contempt has been proved in respect of so much of the payment of $250,000 out as, on the face of things, represents a reversal of the immediately preceding payment in. In my view, however, the position is different in relation to the second half of that payment out.
The explanation Ms Dandris gave of this aspect of the payment was that it was intended to allow her to pay legal expenses and disbursements (including for expert reports), and living expenses. However, on no view did the order made permit, by order 9, a payment in a lump sum on account of those expenses as they might be incurred in the future.
Clearly enough, in talking both of ordinary living expenses and reasonable legal expenses, the order permitted Ms Dandris to disburse those as and when they were required. In the case of her legal expenses, that would permit her to disburse them, to the extent that they might be reasonable, as and when she was required to pay them.
Her solicitor's trust account statement is in evidence. It shows that on 27 September 2013, Ms Dandris made a payment in of $5,000 and that a corresponding credit was recognised. That remained the case as at 14 November 2013. No payment out was made until 27 November 2013, when her solicitors, on her authority, allocated the balance to their costs. On the same date Ms Dandris paid in a further $5,000. Her trust account remained in credit for the balance of the year and until the second half of January 2014.
In my view a payment out to meet anticipated legal expenses and anticipated ordinary living expenses does not fall within the exception to the freezing order contained in para 9.
Mr Jobson argued that there was in any event no depletion of Ms Dandris' assets because it was always in her power to reverse the transfer and to recover the money from the destination account: either her husband's line of credit account or his ordinary bank account. I do not accept that submission.
By paying the money out, Ms Dandris effectively diminished the value of her assets. She did that because the account from which she made the payment was a line of credit account. The line of credit was secured over the property at Bondi to which I have referred. The inevitable result of making the payment out was that the amount secured by the mortgage of that property increased by $125,000, and the value of her equity in the property reduced accordingly. In my view, that payment out was a contravention of order 4(a) made on 14 November 2013.
That assumes (see order 4(b)) that the payment out did not leave her with unencumbered assets of at least $1 million. It is clear that this qualification has no operation in the present case. Ms Dandris agreed that as at 14 November 2013, the only assets in her name were the Bondi property to which I have referred, a motor vehicle, some cash at bank and other personal assets and effects. At the very most, on her evidence, those assets could be worth no more than about $825,000. In reality I think their value was probably somewhat less, and that is taking no account of any mortgage that may have been in existence over the Bondi property.
Those last speculations and qualifications can be put to one side because the very best position, on the evidence, is that at the time in question, 14 November 2013, Ms Dandris simply did not have unencumbered assets with a value of at least $1 million. It follows that a depletion or diminution of her assets by the sum of $125,000 was a breach of order 4(a) made on 14 November 2013.

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Judgment (6 paragraphs)

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