Pisano v Dandris

Factual background

1. It is necessary to go back to the facts of the matter. They may be explained sufficiently by noting that the freezing order in question had been made on 14 November 2013, and that Ms Dandris had been notified explicitly of the making and effect of those orders. I set out [6] to [27] of Pisano v Dandris (No 2): [6] 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. [7] 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.) [8] 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. [9] 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. [10] 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". [11] 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. [12] 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. [13] 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. [14] 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. [15] 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. [16] 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. [17] 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. [18] 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). [19] 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. [20] 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. [21] 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. [22] 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. [23] 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. [24] 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. [25] 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. [26] 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. [27] 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.

Civil or criminal contempt?

1. I should note that, in dealing with the matter, I expressly refrained from deciding whether the contempts charged were civil or criminal in nature. I did so because of what I perceived to be a possible conflict between the approach taken by the High Court in Hearne v Street (2008) 235 CLR 125, and by the Court of Appeal of this State in Pang v Bydand Holdings Pty Ltd [2011] NSWCA 69. I dealt with those matters at [15] to [24] of my first judgment given on 21 August 2015. I will not repeat what I there said. In all the circumstances, I thought it appropriate, as I have said, not to decide the point, but as a matter of practicality to proceed on the basis that the criminal standard of proof was applicable.
2. Thus, the question of characterisation of the contempt remains unresolved. Whether one takes the approach taken in Hearne v Street, or the approach taken in Pang v Bydand, it is clearly arguable that the contempt that I have found proved was criminal in nature. However, again, it is unnecessary to come to a decision on that point. That is because (as White J said in ASIC v Sigalla (No 5) [2012] NSWSC 82 at [84]), the range of punishment outcomes is the same whether the contempt be criminal or civil. Mr Jobson of Counsel, who has appeared throughout for Ms Dandris and has put everything that could fairly be put for his client, did not contend to the contrary.

The Sentencing Procedure Act

1. Given that the question is one of punishment, the question is whether the Sentencing Procedure Act applies. The submissions appeared to assume that it does. Even if it does not apply of its own force, nonetheless, it seems to me, the aggravating, mitigating and other factors set out in s 21A of the Sentencing Procedure Act are relevant. That is to say, even if those matters do not apply as a question of statutory command, it seems to me that they point to factors that should properly be considered in deciding what if any punishment to impose for the contempt that has been proved.
2. Accordingly, I set out subss (2) and (3) of s 21A: (2) Aggravating factors The aggravating factors to be taken into account in determining the appropriate sentence for an offence are as follows: (a) the victim was a police officer, emergency services worker, correctional officer, judicial officer, council law enforcement officer, health worker, teacher, community worker, or other public official, exercising public or community functions and the offence arose because of the victim's occupation or voluntary work, (b) the offence involved the actual or threatened use of violence, (c) the offence involved the actual or threatened use of a weapon, (ca) the offence involved the actual or threatened use of explosives or a chemical or biological agent, (cb) the offence involved the offender causing the victim to take, inhale or be affected by a narcotic drug, alcohol or any other intoxicating substance, (d) the offender has a record of previous convictions (particularly if the offender is being sentenced for a serious personal violence offence and has a record of previous convictions for serious personal violence offences), (e) the offence was committed in company, (ea) the offence was committed in the presence of a child under 18 years of age, (eb) the offence was committed in the home of the victim or any other person, (f) the offence involved gratuitous cruelty, (g) the injury, emotional harm, loss or damage caused by the offence was substantial, (h) the offence was motivated by hatred for or prejudice against a group of people to which the offender believed the victim belonged (such as people of a particular religion, racial or ethnic origin, language, sexual orientation or age, or having a particular disability), (i) the offence was committed without regard for public safety, (ia) the actions of the offender were a risk to national security (within the meaning of the National Security Information (Criminal and Civil Proceedings) Act 2004 of the Commonwealth), (ib) the offence involved a grave risk of death to another person or persons, (j) the offence was committed while the offender was on conditional liberty in relation to an offence or alleged offence, (k) the offender abused a position of trust or authority in relation to the victim, (l) the victim was vulnerable, for example, because the victim was very young or very old or had a disability, or because of the victim's occupation (such as a taxi driver, bus driver or other public transport worker, bank teller or service station attendant), (m) the offence involved multiple victims or a series of criminal acts, (n) the offence was part of a planned or organised criminal activity, (o) the offence was committed for financial gain, (p) without limiting paragraph (ea), the offence was a prescribed traffic offence and was committed while a child under 16 years of age was a passenger in the offender's vehicle. The court is not to have additional regard to any such aggravating factor in sentencing if it is an element of the offence. (3) Mitigating factors The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows: (a) the injury, emotional harm, loss or damage caused by the offence was not substantial, (b) the offence was not part of a planned or organised criminal activity, (c) the offender was provoked by the victim, (d) the offender was acting under duress, (e) the offender does not have any record (or any significant record) of previous convictions, (f) the offender was a person of good character, (g) the offender is unlikely to re-offend, (h) the offender has good prospects of rehabilitation, whether by reason of the offender's age or otherwise, (i) the remorse shown by the offender for the offence, but only if: (i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and (ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both), (j) the offender was not fully aware of the consequences of his or her actions because of the offender's age or any disability, (k) a plea of guilty by the offender (as provided by section 22), (l) the degree of pre-trial disclosure by the defence (as provided by section 22A), (m) assistance by the offender to law enforcement authorities (as provided by section 23).

Relevant matters for consideration

1. Returning to the facts that I have found, the cardinal fact, as it seems to me, is that Ms Dandris had been informed both of the making of the order and of its effect. It follows that the transfer in question was made, as I said at [8] of Pisano v Dandris (No 2), at a time when Ms Dandris was aware both of the making of the order and of its impact on her ability to deal with her assets. It follows, in my view, that the first transfer was made with knowledge and in defiance of the Court's order.
2. For the reasons that I gave at [20] in that decision, the exception contained in the freezing order, in respect of legal expenses, had no application. Ms Dandris gave no evidence that she had been so advised by her solicitor. She gave no evidence that she had sought such advice from her solicitor, but failed to get it because of his unavailability. In those circumstances, as it seems to me, Ms Dandris chose to take a course of action which on its face was unjustifiable.
3. It follows that the contempt was, on my findings, a serious and deliberate defiance of the Court's order. In those circumstances, any consideration of outcome needs to bear in mind, as a key factor, vindication of the authority of the Court and deterrence of others who might think that Court orders are to be obeyed or disobeyed, not according to their terms but according to the whim of the person subject to them.

Aggravating and mitigating factors

1. When one turns to the aggravating factors set out in s 21A(2) of the Sentencing Procedure Act, the only one of any possible relevance is that referred to in para (o): that the offence was committed for financial gain. Mr Jobson submitted that it was not. Mr Weinberger of Counsel, who appeared with Ms Knox of Counsel for the plaintiffs, submitted that it was. That was so, Mr Weinberger submitted, because the effect of the payment was to take out of the pool of assets available to the plaintiffs, should they succeed, the sum of $125,000 in question.
2. On the face of things, Mr Weinberger's submission has some appeal. However, as Mr Jobson submitted, the evidence is that Ms Dandris' costs overall exceeded the sum of $125,000. Those sums could have been paid, incrementally, pursuant to the exception for legal costs in the freezing order and without any breach of the freezing order. Thus, considering the matter as one of reality, I am not satisfied that the offence that has been found could be said to be one committed for financial gain.
3. When one turns to the mitigating factors set out in subs (3), it does appear to me that some of those do operate. For example, and for the reasons I have just given, it cannot be said that the offence has caused any, let alone any substantial, loss or damage to the plaintiffs (para (a)). Again, as it seems to me, para (b) is relevant. There is no evidence that Ms Dandris is other than of good character (para (f)) - although I shall return to this - nor is there any real prospect that she will re-offend (para (g)). I am satisfied that this hearing has been a salutary warning to her.
4. For the same reason, I think it is likely that Ms Dandris has good prospects of rehabilitation (para (h)). I might add that this conclusion is supported by the pre-sentence report that was obtained.
5. Mr Jobson submitted that Ms Dandris had shown remorse. I do not agree. She did not accept any liability for the charged contempt. It was not until I had found it proved that she offered any apology to the Court. Thus, I think that para (i) is of no application.

Character

1. I said that I would return to the question of good character. Mr Jobson sought to tender character references. Mr Weinberger objected. He pointed out that his instructing solicitor had been asked to be given copies of any character material that would be tendered. None were supplied.
2. Mr Jobson submitted that it was not necessary for the plaintiffs to be given that material. I do not agree. The charges arose in the context of a civil proceeding. The plaintiffs have a clear interest in the outcome. Ordinary considerations of procedural fairness would dictate that the plaintiffs should have an opportunity of knowing and dealing with any material intended to be relied upon.
3. In any event, if objection were taken, the testimonial references could not be received unless the authors were prepared to give evidence. That is because, clearly enough, they would otherwise offend the rule against hearsay evidence.
4. Upon receiving those indications of my view, Mr Jobson withdrew the tender.

Consideration

1. It is clear, in this case, that the effects of the contempt cannot be remedied. That is why, in substance, the approach taken by the High Court in Hearne v Street might appear to have some relevance. The effects cannot be remedied because Ms Dandris has become bankrupt on her own petition, and cannot make good such loss as may have been caused to the plaintiffs by her action. However, as I have sought to explain, when one looks at the matter through the prism of reality, it is unlikely that there was any such loss.
2. Accordingly, as I said a little while ago, the primary considerations seem to me to be the need to vindicate the authority of the Court, to deter others from taking the view that Court orders may be disregarded without any real sanction, and to impose upon Ms Dandris some real punishment for her knowing and unjustifiable breach of the Court's orders.
3. The sanction of community service is available. The pre-sentence report to which I have referred assessed Ms Dandris as a person suitable to serve a Community Service Order. It noted that community service was available.
4. Had all the contempts charged been proved, it is unlikely that I would have been considering the question of a Community Service Order. It is likely, instead, that I would have been considering the duration of a term of imprisonment. But I cannot deal with the matter on the basis of the contempts that were charged. I must deal with it only on the basis of the limited aspect of the one charged contempt that has been proved. Nonetheless, I must deal with that one charged and proved aspect on the basis that it represents a very real and significant contempt of Court, and that the outcome must take into account the factors to which I have referred.
5. Mr Jobson submitted that I could admonish and discharge Ms Dandris. I do not think that that would be a sufficient deterrence for others. Nor do I think that it would be a sufficient vindication of the Court's authority. And to the extent that the question of punishment for the offence requires to be considered, I do not think that to admonish and discharge would achieve it.
6. Mr Jobson submitted that Ms Dandris would be at risk, in respect of travel to the United States of America, if I proceeded to impose a conviction. However, since I do not intend to resolve the question of whether the contempt is civil or criminal, I do not need to and will not impose a conviction. It is sufficient to do as White J did in ASIC v Sigalla (No 5) and make a declaration that the contempt has been proved to the extent indicated.
7. Whether that declaration, or for that matter the charges that led to it, will have any impact on Ms Dandris' travel plans, is a matter for the United States Government (as White J said in the same case at [84]). And in any event, to the extent that there is some such consequence, that is a necessary consequence of the deliberate breach of the Court's order that I have found was committed.
8. I should add that Mr Weinberger did not accept that there would be the impact in question, arising simply from a finding or indeed a conviction. He submitted, further, that there was no proof that Ms Dandris had any intention to travel to and from the United States. When I indicated to Mr Jobson that he could, if he wished, recall his client to deal with her travel plans, he declined to do so.
9. Returning to the question of outcome, I have come to the conclusion that the Court's authority does need to be vindicated. I have come to the conclusion that a message needs to be sent to others, who are contemplating breaching freezing orders, that the Court's orders are not to be treated lightly. Freezing orders (and search orders) are very important weapons in the Court's armoury to deal with civil cases. They provide very significant aids to plaintiffs both in respect of the enforcement of any judgment that they may obtain (freezing orders) and to enable them to obtain judgments in the first place (search orders).
10. The value and authority of such orders will be very severely diminished if there exists a perception, particularly in the commercial world, that people may disobey them without sanction. That is why, as it seems to me, vindication and deterrence are of key importance in the present matter.
11. Of the trilogy of matters to which I have referred at [26], punishment may be thought to be the least important. However, once it is decided that some punishment over and above that of admonition and discharge is required, there is a very real question as to what effective punishment can be imposed, bearing in mind that Ms Dandris is bankrupt and that a fine would have no effect.

Costs

1. There is also the question of costs. For reasons that do not require to be recited, Mr Weinberger submitted that there should be no order as to costs in respect of the notice of motion charging contempt. Mr Jobson did not argue for any other costs outcome.

Orders

1. Accordingly, I make the following orders: 1. The Court has been informed that community service is available as a punishment and that you are a person suitable to undertake community service. The purpose of the order is that as punishment for the contempt that I have found you are to perform unpaid community work. If you do not complete the order satisfactorily, further action can be taken against you and the order can be revoked. It can also be revoked if you are sentenced for criminal offences. If it is revoked, you can be sent to prison. 2. I declare that the first defendant Ms Georgia Dandris is guilty of contempt of court in respect of the payment out of $125,000 on 14 November 2013 being part of the charges the subject of paragraph 1(a) of the statement of charge filed on 19 March 2015. 3. I order Ms Dandris, to perform 40 hours of community service. 4. I direct Ms Dandris, to report to the NSW Probation and Parole Service at its city office at 13-15 Wentworth Avenue, Sydney within 14 days of today's date. 5. Pursuant to s 92 of the Crimes (Sentencing Procedure) Act, to the extent that is applicable, I explain to Ms Dandris that you are obliged so to report within 14 days and thereafter to do all that is required of you to perform the hours of community service to which you have been sentenced in accordance with the directions of the Probation and Parole Service. If you refuse to sign any necessary undertaking, or to carry out the hours of community service, the order may be revoked and I may deal with you further. 6. I make no order as to the costs of the notice of motion filed on 19 March 2015.

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: 18 November 2015