[1986] HCA 46
Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483
[1988] HCA 14
Witham v Holloway (1995) 183 CLR 525 at 530
Source
Original judgment source is linked above.
Catchwords
[1986] HCA 46
Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483[1988] HCA 14
Witham v Holloway (1995) 183 CLR 525 at 530
Judgment (5 paragraphs)
[1]
Solicitors:
Dentons Australia Pty Limited (Plaintiff)
File Number(s): 2015/303588
[2]
Judgment
HIS HONOUR: The plaintiff, Scholefield Goodman (Australia) Pty Ltd ACN: 000 497 389 ("Scholefield Goodman" or "the plaintiff") prosecutes two charges of contempt against the defendant, Sigmund Rutkowski ("the defendant" or "the contemnor"). The contempt relates to two alleged breaches of orders made by the District Court of New South Wales made on 3 April 2014.
The two charges relate to a charge that the defendant dealt with or diminished the value of assets that were the subject of a freezing order issued by the District Court on 2 or 3 April 2014 and that the defendant did not, in accordance with the Orders of 2 or 3 April 2014 swear and serve on the plaintiff an affidavit setting out, to the best of the defendant's ability, all of the assets and liabilities of the defendant in Australia providing the value, location and details of each such asset or liability.
There was, initially, a third charge of contempt which was not pressed because the defendant pleaded guilty to the two charges outlined above. Hereafter, unless expressly contradicted, I will refer only to the two charges described above.
The background and facts can be shortly summarised. Substantive proceedings were commenced on 3 January 2014, in which the plaintiff commenced proceedings against the defendant and another. The claim was for money amounts owed pursuant to personal guarantees given by the defendant in relation to debts owing by two companies controlled by the defendant.
On 2 April 2014, the District Court issued asset freezing and disclosure orders against the defendant, which, in the former, relevantly provided that the defendant
"must not remove from Australia or in any way dispose of, deal with or diminish the value of any of [his] assets in Australia up to the unencumbered value of $600,000".
Assets were defined, for the purpose of the order, to include all assets whether or not subject to any trust and included the proceeds of the sale of property at 2 Cathcart Street, Fairfield, which the defendant owned or controlled as a result of probate having been granted on the defendant's late mother's will.
Further, the orders issued by the District Court required the defendant to "swear and serve on the plaintiff an affidavit setting out to the best of [his] ability or [his] assets and liabilities in Australia, giving their value, location and details" and the extent of the defendant's interest in any such assets.
The defendant and his solicitor were present in court when the orders were made. Notwithstanding that presence, the court provided sealed copies of the orders and those orders were served, by the plaintiff, on the defendant's solicitor on or before 3 April 2014.
It is necessary to deal more fully with the property at 2 Cathcart Street, Fairfield. The defendant was the sole executor and sole beneficiary of his late mother's estate of which the property to which reference has been made was the major or only asset. As executor of the estate, the defendant contracted to sell the property for an amount of $655,000. When completion was imminent, the defendant disclosed, by affidavit, various costs and commissions incurred and debts to the estate, which totalled an amount of $28,784.75.
On 11 April 2014, the sale of the property was completed. The defendant, at that time, directed the purchaser to disburse from the balance of the purchase price (after payment of the deposit) amounts totalling $550,000 to various persons including a corporation. The defendant received from the proceeds of sale, after such disbursements, an amount of $81,399.23. The defendant then disposed of that remaining amount.
On 11 June 2014, after the date on which an affidavit was directed to be served, purportedly pursuant to Order 6 of the orders made on 2 or 3 April 2014, the defendant filed an affidavit that disclosed that, as at 11 June 2014, the only asset of the defendant was cash in a bank account in or to the sum of $102.91 and that he had debts totalling $74,645.02.
On 19 February 2015, the plaintiff obtained judgment against the defendant for the sum of $839,921.96. The judgment remains unsatisfied.
As a consequence of the foregoing, the District Court issued orders pursuant to s 203(1) of the District Court Act 1973 referring to this Court the three charges of contempt to which earlier reference has been made.
Essentially, as earlier described, the first charge relates to the breach of the orders resulting from the defendant removing from Australia or disposing of, dealing with, or diminishing the value of his assets, including those arising from the proceeds of sale of the property, whether or not subject to any trust and/or in directing the disbursement of the funds realised as a result of the sale of the property, at least to the extent that those directions disbursed an amount that did not provide for $600,000 to remain as an asset.
As earlier stated, the second charge results from the failure of the defendant to swear and serve on the plaintiff an affidavit setting out his assets and liabilities in Australia, prescribing their value, location and details within the prescribed time. Such an affidavit was sworn on 11 June 2014, by which time the breach alleged in the first charge had been committed. The third charge, which, as already stated, is not any longer pressed, was charged in the alternative to the second charge and related to the failure to serve any such affidavit.
On 18 August 2016, the defendant, through his Counsel, entered a plea of guilty to the first and second charges. Those pleas were accepted by the plaintiff in full satisfaction of the three charges preferred and, to the extent it be necessary, the Court accepts, particularly in circumstances where the third charge was preferred as an alternative to the second charge, that such acceptance is appropriate and the Court will act upon it.
The foregoing material is the subject of affidavit evidence, which is uncontested.
[3]
Principles on sentencing for contempt
The Court has, on a number of occasions, described the principles relating to punishment for contempt. The jurisdiction of the Court arises from its status as a superior court of record. Contempt is a common law offence, punishment for which is an inherent power of a superior court of record.
The Supreme Court Rules 1970 ("SCR"), and in particular SCR Pt 55 r 13, provide that the Court may impose a penalty for contempt on an individual that includes committal to a correctional centre, or fine, or both. Further, the Court may issue orders for punishment on terms, including the suspension or part suspension of any term of imprisonment and impose conditions for good behaviour and the like.
There are, at least in theory, two types of contempt: civil and criminal. Criminal contempt is conduct that obstructs the administration of justice. Civil contempt is, essentially, the breach of an order or undertaking. However, where a breach of an order is deliberate or contumacious, and is, for that reason, a deliberate defiance or contumacious breach of the orders of a court, contempt that is otherwise civil is considered to be criminal in nature: Witham v Holloway (1995) 183 CLR 525 at 530; [1995] HCA 3. The delineation is often difficult.
Contumacious, wilful and deliberate disobedience of a court's order may be characterised as both civil and criminal conduct: Pang v Bydand Holdings Pty Ltd [2011] NSWCA 69, per Beazley JA (as her Honour the President then was); Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483; [1965] HCA 21; Witham v Holloway, supra.
Civil contempt that is not a deliberate defiance or a contumacious breach will still affect the administration of justice. The purpose of imposing punishment for wilful disobedience of a court order is to discipline the offender and to vindicate the authority of the court: AMIEU v Mudginberri Station Pty Ltd (1986) 161 CLR 98; [1986] HCA 46 at [112].
Sentencing for contempt involves the usual principles of sentencing and requires the court to arrive at and impose a sentence appropriate to the gravity of the offence that was committed (objective seriousness) and the circumstances of the offender who committed it (subjective circumstances) taking into account all the purposes of sentencing. Those purposes include punishment; protection of society; personal and public deterrent; retribution; and reform: Veen v R (No 2) (1988) 164 CLR 465 at 476; [1988] HCA 14; and s 3A of the Crimes (Sentencing Procedure) Act 1999 ("the Act").
In Veen (No 2), supra, the High Court said:
"the purposes overlap and none of them can be considered in isolation from the others when determining what is an appropriate sentence in a particular case. They are guideposts to the appropriate sentence but sometimes they point in different directions."
The process, often referred to as intuitive synthesis, is one in which the Court considers each of the factors as part of the objective and subjective circumstances to arrive at a result which seeks to achieve each of the purposes.
In dealing with the objective and subjective circumstances of the offence and the contemnor, the Court may have regard to the provisions of s 21A of the Act, although most of those criteria are factors to which a sentencing court would, even in the absence of s 21A of the Act, have regard. The Court has a wide range of sentences that it may impose for contempt: NCR Australia v Credit Connection [2005] NSWSC 1118.
As earlier stated, the range of sentences includes full-time custodial sentences; custodial sentences that are not full-time; community service orders; good behaviour bonds; and dismissal of the charge accompanied by either a good behaviour bond or a condition that the contemnor participate in an intervention program or the like. The Court also has the power to defer passing sentence, particularly if rehabilitation of the contemnor is an issue. The Act imposes certain restrictions, or otherwise requires certain pre-conditions, before the imposition of some of such sentences may be effected.
In relation to contempts, as with other offences, the sentence to be imposed must take account of the nature of the contempt committed: Commission for Fair Trading v Rixon (No 3) [2014] NSWSC 1279, per Garling J. Such circumstances include: the nature and circumstances of the contempt; the impact or likely impact of the contempt on the administration of justice; the extent of the offender's culpability for the conduct; the need to deter the offender and others from engaging in contempt; whether a finding of contempt has been previously made; whether contrition or remorse is displayed and an apology proffered; and the financial and personal circumstances of the offender when a fine is being sought: Paccar Financial Pty Limited v Ian Menzies & Colleen Menzies (No 2) [2015] NSWSC 1622.
The nature of the contempt and the circumstances of the contempt have been described in facts that are, in these proceedings, uncontentious.
In relation to any matter or circumstance, which the plaintiff seeks the Court to take into account against the contemnor, the plaintiff is required to prove that matter beyond reasonable doubt. That onus of proof is applicable even if the contempt is civil in nature and not a criminal contempt.
The contempt associated with the first charge (which was a deliberate disbursement of funds that were, to the knowledge of the contemnor, frozen by order of a court) was a deliberate and contumacious contempt which the Court infers was intended to deprive the plaintiff of the possibility of obtaining satisfaction of the judgment that was ultimately entered. The contempt arising from the breach of the orders described in the first charge is both a civil and criminal contempt in accordance with the principles above.
The contempt, occasioned by the conduct charged in the second charge described above, has not been proved by the plaintiff, beyond reasonable doubt, to be a deliberate and contumacious contempt. While the Court suspects, and finds on the balance of probabilities, that the failure to serve an assets disclosure affidavit in a timely fashion and in accordance with the orders was deliberately to avoid the plaintiff being informed of the dissipation of the assets to which the first charge relates at that earlier time. Essentially, the failure to file the asset disclosure affidavit is a failure to file it in the time required by the orders of the District Court. An assets disclosure affidavit was, ultimately, filed, albeit late. In those circumstances, the breach of the order of the District Court is a civil contempt and not a criminal contempt, because the conduct has not been proved, to the requisite standard, to have been contumacious.
[4]
Sentence to be fixed
Because the second charge has been found to be a civil contempt that does not amount to criminal contempt, the punishment, if any, for that contempt should be subsumed within the total sentence imposed for the first offence, which is both a civil and criminal contempt. In making that comment, the Court makes it clear that, to the extent that the late filing of an asset disclosure affidavit was a contempt and interfered with the administration of justice, it was conduct that was part of the one course of conduct arising from the deliberate breach of the asset freezing order issued by the District Court.
Every case of criminal contempt, and many cases of civil contempt, involve an interference with, and undermining of, the administration of justice and the authority of the court. In the case of an asset freezing order, issued for the purpose of protecting a particular party to substantive proceedings, there is a real victim who has been deliberately prejudiced in circumstances where a court has determined that the victim (in this case the plaintiff) is worthy of protection.
The loss and damage caused by the offence to the victim is substantial and was committed for direct or indirect financial gain. Moreover, and almost of necessity, the conduct that gave rise to the offence was premeditated and planned.
On the other hand, the contemnor has no criminal record of which the Court is aware and was, it seems, otherwise and prior thereto, a person of good character. The Court considers that the contemnor has shown some remorse evidenced by the plea of guilty and is entitled to a discount for the plea, albeit not taken at the earliest reasonable opportunity.
I have been assisted by the summary of cases provided in a schedule of comparative sentences provided by the plaintiff in these proceedings. But the occasioning of previous sentences does not set the range which, technically, involves the proposition, for contempt, that there is no maximum penalty. For example, it is permissible for the Court to sentence the contemnor to an indefinite term of imprisonment until such time as the contemnor has purged his contempt.
Lastly, the Court has before it, as a result of the filing of the assets disclosure affidavit, albeit at a time later than was initially proposed, information that the imposition of a fine on the contemnor would be impractical, bearing in mind the resources available to the contemnor.
The fixing of a sentence for contempt is a most difficult task. Contempt is an offence of unique characteristics. It is an offence in which the sentence, as earlier stated, is at large, but the broad principles of equal justice require some consideration of the conduct of the contemnor by comparison to conduct of a similar kind for which statutory offences have been prescribed.
Further, it is appropriate that persons charged with contempt ought, to the extent that their conduct is comparable with the conduct of others, have sentences imposed upon them that, in the very broad sense, do not provide the contemnor with a justifiable sense of grievance in the manner in which the contemnor has been treated. The Court also notes that a full-time custodial sentence, or any custodial sentence, should not be imposed unless no other alternative is appropriate.
I allow a discount of 20% for the utilitarian value of the plea of guilty and the manner in which the conduct of the defence has facilitated the administration of justice. I consider that the contemnor is unlikely to re-offend.
Given the practical inappropriateness of a fine, the issue arises as to what sentence is appropriate, given the remorse to which I have referred and the availability of sentences, other than a custodial sentence. A fine is impractical and, therefore, inappropriate. Bearing in mind the seriousness of the offence a bond insufficiently punishes the defendant. Bearing in mind the circumstances of the offence, which requires significant punishment, and the ameliorating issues associated with the otherwise good character of the contemnor, the most appropriate punishment is the imposition of a community service order, pursuant to the terms of s 8 of the Crimes (Sentencing Procedure) Act.
This has been an issue that has given me some significant concern. Such a sentence is, in ordinary circumstances, unavailable in the absence of a favourable report by Corrective Services NSW assessing the offender as suitable for the imposition of community service work: see s 86(4) of the Crimes (Sentencing Procedure) Act.
Notwithstanding the delay between the commission of the offence and the imposition of this sentence, the Court considers it possible that the imposition of a community service order is an appropriate sentence, assuming, for present purposes, that the statutory preconditions have been satisfied. The Court is of the view that the objective nature of the contempt and the subjective circumstances of the contemnor would, except for the imposition of a community service order, otherwise require a custodial sentence as the only other appropriate sentence.
In those circumstances, and notwithstanding that further delay will be occasioned by the orders or directions now made, the Court will direct Corrective Services NSW to provide a Report assessing the contemnor for suitability for the imposition of a community service order. Further, the contemnor is ordered to cooperate fully with such assessment.
In the unusual circumstances of this case, including the delay already occasioned, the Court will indicate that, if a favourable report were received from the Corrective Services NSW (which is to be expected), the Court will impose a sentence for which the starting sentence is 120 hours of community service, and, providing the discount of 20% to which reference has a ready been made, would result in the imposition of a community service order of 96 hours.
The Court orders and directs:
1. Corrective Services NSW complete a Community Service Order Assessment;
2. The defendant comply with all reasonable directions of Corrective Services NSW issued to facilitate the completion of the aforesaid Community Service Order Assessment;
3. The proceedings be heard further on a date to be fixed after receipt by the Court of the aforesaid Community Service Order Assessment.
[5]
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: 31 January 2018