Consideration
40 Mr Marshall emphasised the sworn apologies from both Mr Bamford and Ms Yonon and the fact that there was no cross-examination in respect of those apologies. It was submitted that those apologies were given sincerely and in circumstances of great regret. I agree with that submission. Both Mr Bamford and Ms Yonon proposed that a finding be made that the charges have been proven against them but that no penalty should be imposed, save that they should be made to bear the costs of the application.
41 The plaintiff submitted that in respect of AEM, there should be a finding of contempt and an order that it pay the plaintiff's costs on an indemnity basis. As against Mr Bamford and Ms Yonon the plaintiff submitted that an order that they are guilty of contempt should be made and that a suspended sentence or bond be imposed for necessary deterrence.
42 The circumstances of this case are distinguishable from those cases in which contemnors acted with contumelious disregard for the Court's orders: ASIC v Michalik (aka Tomaszewski and Krawczyk) & Ors (2004) 52 ACSR 115; ASIC v Matthews (2009) 71 ACSR 279. Mr Beech-Jones accepted that this case has an "element of fuzziness" (tr 42-43). That description arises from the parties having failed to recognise the regime under s 128A of the Act in their Consent Orders. Once mention was made of that regime the parties became polarised. On the one hand the plaintiff, with its unrelenting pressure of correspondence on the defendants' solicitor, sought compliance with a regime pursuant to s 128A of the Act that was not mentioned in the Consent Orders. On the other hand the defendants sought to comply with the regime that had been included in the Consent Orders by filing a Notice of Motion, albeit that such step was not taken until eight days after the date for filing an application in the Consent Orders. That was followed by a period of consideration as to whether to appeal from Gzell J's orders and ultimately the first disclosure affidavits were produced on 9 July 2009.
43 The period of delay was between 5 and 6 weeks. I am of the view that it could not reasonably be suggested that the defendants were disregarding the Court's orders. Rather they were seeking to pursue the regime under the Consent Orders and engaging with the plaintiff's solicitors to find a way through what Mr Beech-Jones has described as the "fuzziness".
44 I accept Mr Bush's evidence that he was under extreme pressure; that his clients had provided a great deal of information within the required timeframe, but some outside the timeframe; and that he had most of the information within four weeks of 13 May 2009. I also accept Mr Bush's evidence that he needed to give consideration to the appeal process and that he was attempting to ensure that his clients were protected from self-incrimination having regard to the very serious allegations of fraud in the main case.
45 On the first day the matter was before me ex parte, 12 May 2009, I alerted the plaintiff's counsel to the fact that a new regime had come into force, without expressly mentioning s 128A of the Act (tr 6). I have little doubt that had the parties addressed the s 128A regime in their Consent Orders, any confusion in respect of the steps to be taken would have been dispelled. However the defendants, to their credit, made an admission of contempt subject to the preliminary application with which I dealt in the Judgment. A great deal happened between 15 May 2009 and 9 July 2009 in respect of the main case. The defendants made a large amount of material available to Mr Feldman so that it could be produced to the solicitors for the plaintiff. The defendants were also winding down their business, moving out of premises and terminating the employment of approximately 17 employees. There was also the application by Beautree in the Federal Court of Australia for the appointment of provisional liquidators to Willow Glade Pty Ltd and Pazoluca Pty Ltd, the fifth and sixth defendants in the main proceedings. Those applications were heard on 7 and 8 July 2009 and judgment was delivered on 9 July 2009: Beautree Pty Ltd, in the matter of Willow Glade Pty Ltd v Willow Glade Pty Ltd [2009] FCA 738.
46 Any contempt of a Court order has an element of seriousness. In this case I am not persuaded that the defendants were acting wilfully to avoid compliance with the Court order. I am satisfied that they took advice from a competent solicitor and provided material to him within a reasonable timeframe, and took steps to try and deal with the matter sensibly whilst seeking to protect themselves from self-incrimination.
47 A further circumstance to be taken into account in considering the seriousness of the contempt is the position adopted by the plaintiff's solicitors in suggesting various dates for compliance, without returning to Court and seeking an extension of time for compliance with the Consent Orders. The plaintiff's solicitors seem to have taken it upon themselves to purport to grant an extension of time for compliance with a Court order. The plaintiff's solicitors utilised the threat of an application for contempt to try to induce compliance with an order, the time for which had already expired. The far better course would have been to return to Court to obtain from the Court an order for an extension of time. I should also say that the defendants could and should have returned to Court to seek such an extension. Unfortunately the lawyers focused on debating this matter in rather turgid and lengthy correspondence. However the plaintiff had to press the defendants for more detailed disclosure of the various assets, in particular, in respect of Beautree's artwork and other items. This necessity will be reflected in an indemnity costs order.
48 Mr Bamford and Ms Yonon have given sworn apologies to the Court which I accept as genuine and which I accept as appropriate to purge their contempts. I have taken Mr Bush's frank disclosures into account and I accept his genuine shame that his clients are found in the present predicament. There were no separate submissions made in respect of AEM, of which Mr Bamford was a director. The contempt is however very much at the lower end of the scale of seriousness and I am of the view that the circumstances of this case require a lenient approach.
49 I find the offences proven but without recording any formal finding of contempt against the defendants, I order the defendants to pay the plaintiff's costs of the Motion for contempt on an indemnity basis. The Motion is otherwise dismissed.
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