Paroz v Paroz (No 4)[2010] QSC 488

SUPREME COURT OF QUEENSLAND

CIVIL JURISDICTION

PETER LYONS J 

No 9656 of  2004

BRISBANE 

..DATE 19/08/2010

ORDER

HIS HONOUR:  By consent, I order that Anne Fordyce and Bradley Vincent Hallen, appointed as receivers of the partnership referred to as The Land Partnership from 19 July 2010, be authorised to act as the agent of Leslie Roland Paroz to sell the livestock the subject of the injunction contained in paragraph 1(c) of the order made by me on 11 June 2010 depastured on the properties referred to in that paragraph with express authority to perform the following acts:

(1) to appoint any third party (including, without limitation, cattle transportation agents and cattle auctioneers) to sell, as soon as practicable, the livestock referred to herein;

(2) pending sale of the livestock referred to herein to appoint any agent to provide any care or maintenance to the livestock as the receivers may in their absolute discretion deem fit;

(3) to stand possessed of the proceeds received from the sale of the livestock referred to herein for and on behalf of Leslie Roland Paroz subject to their providing any accounting reasonably required by Leslie Roland Paroz;

(4) to make payment of any reasonable fees rendered by any agent appointed by the receivers pursuant to paragraphs 1 and 2 herein from the sale proceeds held by the receivers pursuant to paragraphs 3 herein and

(5) upon written demand from Leslie Roland Paroz (or his duly authorised legal representative) to pay to Leslie Roland Paroz (or his duly authorised legal representative) the balance of the proceeds held by the receivers from the sale of the livestock but only following payment of any amounts payable to any agent appointed by the receivers pursuant to paragraphs 1 and 2 herein.

There will be liberty to apply.

I otherwise adjourn the application for the variation of orders made on 5 July 2010 to 9.15 on Wednesday, 1 September 2010.

I reserve costs of that application.

...

HIS HONOUR:  On 7 April 2010 I granted the present applicants an interlocutory injunction restraining the respondent from carrying out certain farming activities on properties named in that order.  On 11 June 2010 I handed down reasons in which I determined to extend the operation of that order to other properties and to order that the respondent remove certain livestock from those properties.  The making of that order was finalised on 6 July 2010.

These proceedings are brought on the basis of breaches of those orders by the respondent. The breaches are said to have occurred on a number of dates commencing with 16 April 2010, that is nine days after the making of the first order, until 19 June 2010 so far as the farming activities are concerned; and by reason of the failure of the respondent to remove the livestock from the properties by 30 July 2010. That failure continues.

There is some additional background that should be mentioned. First on 4 June 2010 as a result of one of the applications brought by the applicants, I made a finding that the respondent was in breach of the first order. It can be seen that he, nevertheless, continued to act in breach of the order within a relatively short time thereafter.

Indeed, as I have indicated, it was on 11 June 2010 that I gave reasons indicating that the first order would continue and that the additional order relating to the removal of the cattle would be made.

The proceedings came before me again in relation to these orders on 3 August 2010 when I made additional findings about the conduct of the respondent.  At that time I was told that a third application would be made because of the respondent's failure to remove cattle by the date specified in the order finalised on 6 July.

I should record the dates on which the respondent has been found to have breached the orders.  The farming activities consisted in part of slashing grass and in part of planting crops on the properties referred to in the order of 7 April. The slashing occurred on 16, 17 and 19 April 2010 and again on 1, 2, 3 and 10 May 2010.  Planting occurred on 24, 25, 26 and 27 May 2010 and on 15, 17, 19 June 2010.  These dates are recorded in a schedule which became Exhibit 1 and which was a result of discussion between counsel for the parties.  The extent of the slashing and planting, which I have also referred to as farming activities, appears from an aerial photograph exhibited to an affidavit of one of the applicants. He estimates that the activities extended over about 80 percent of the area of the properties the subject of the injunction.

It is apparent, therefore, that this conduct has been persistent and extensive and carried out plainly in breach of the orders which have been made and at least in part at a time when the respondent must have been aware of the likely consequences of his conduct.

Indeed, in a letter of 23 April 2010 from the solicitors for the applicants to the solicitors for the respondent, reference was made to his conduct in slashing part of the land.  The letter states that photographs were taken of the respondent engaging in this activity and the letter warned that if he persisted in that conduct, contempt proceedings would be instituted.

On 27 May 2010 the solicitors for the applicants wrote to the solicitors for the respondent again.  That letter stated that the solicitors had been instructed by the applicants that the respondent had commenced planting an oats crop on the land. The letter pointed out that that was in clear contravention of the orders of 7 April 2010.

I have already mentioned that on 24 June 2010 I made findings about the contempt of the respondent; and I made further findings to that effect on 3 August 2010.

The order for the removal of the cattle identified the date for removal as 30 July 2010.  That date was fixed after a discussion involving the respondent, and was selected on the basis that it was a date that would enable the respondent to comply with the order.  However, the evidence demonstrates that no action has been taken to remove the cattle or any of them.  The number of cattle is not entirely clear.  There is evidence that some 175 cattle are on some of the properties and that there are cattle on other properties to which the second order relates, but no specific number is provided for them.

I should point out that the respondent has not sought to challenge any of the evidence or to contend that he is not in contempt of the orders.

In Hafele Australia Pty Ltd v. Maggbury Pty Ltd [2000] QCA 397 at [36] and [37] Muir J, as his Honour then was, discussed the purpose of contempt proceedings.  His Honour said that “in the case of civil proceedings the main purpose of the sanctions provided by the rules in the event of a failure to comply with court orders is coercive rather than punitive.”

In the present case coercion is not of primary significance. The properties are under the control of receivers.  In an order made today ultimately by consent the receivers have been authorised to sell the cattle on behalf of the respondent. It, therefore, seems that the effect which the orders sought to achieve will be achieved in the near future.

The farming activities of the respondent appear to have reached a stage of substantial completion and there has been no suggestion of a continuation of those activities after 19 June.  There has been likewise no suggestion that it is appropriate to make orders requiring the respondent to restore the properties to the condition in which they were prior to his activities.

Coercion, however, is not the only relevant consideration.  In Australian Meat Industry Employees’ Union v. Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 110 Gibbs CJ, Mason, Wilson and Deane JJ noted the dual character of civil contempt.  One aspect is the “penal or disciplinary jurisdiction to be exercised by the Court in the public interest.”

In Evenco Pty Ltd v. Amalgamated Society of Carpenters, Joiners, Bricklayers and Plasterers of Australasia Union of Employees, Queensland [1999] QSC 77 at [4]-[6] Chesterman J, as his Honour then was, noted that in taking proceedings a party who brings a contempt application is “performing a public service as well as seeking to enforce its own rights.”  By doing that, that party “is maintaining respect for the law and confidence in judicial orders by obtaining from the court a sanction which is appropriate in the particular circumstances.”  It seems to me that these are considerations of some significance in the present case.

In ASIC v. Michalik [2004] NSWC 1259 at [29] Palmer J identified a number of principles or factors relevant for consideration in dealing with the case before him.  Some of those are of relevance in the present case.

From the factors mentioned by his Honour I take the following:

(a) the seriousness of the contempt;

(b) whether the contemnor was aware of the consequences to himself of what he proposed to do;

(c) the reason or motive for the contempt;

(d) whether the contemnor has received, or sought to receive, a benefit or gain from the contempt;

(e) whether there has been any expression of genuine contrition by the contemnor;

(f) the character and antecedents of the contemnor;

(g) what punishment is required to deter the contemnor and others of like mind from similar disobedience to the orders of the Court;

(h) what punishment is required to express the Court's denunciation of the contempt.

I will mention some of these factors briefly. The reason or motive for the contempt has not been specifically identified. The respondent has given no evidence in the proceeding. The respondent, however, has for his working life, along with the applicants, been engaged in a farming activity on the properties mentioned in the orders, together with other properties.  It may be said that it has been his life's work. The most likely explanation for his conduct is a hope that he would receive, as a result of the winding up of the partnership between the parties, the properties on which he carried out the farming activities and wanted them to be in a condition which would enable him to carry on his pastoral activities, in particular the grazing of cattle.  A possible alternative is that he hoped to delay the winding up for a lengthy period of time and wished to have an oats crop as feed for his cattle in that period. In either case it would seem to me that he intended to achieve a benefit or gain. Indeed, it is difficult to see why he would have carried on these activities, particularly in the face of an order, unless there was some benefit for him in doing so.

I regard the respondent's contempt as of a serious order.  I have noted the occasions on which it occurred.  I have noted the warnings given to him at an early stage and that proceedings were instituted at a relatively early stage as a result of his continued breaching of the first order.  I have also noted that findings were made against him on two occasions.

His conduct may be regarded as quite extensive.  His failure to remove any of the cattle, notwithstanding the substantial period of time given to him to do so, is completely unexplained.  In my view, that adds to the seriousness of his conduct.

I should also point out that there has been no expression of contrition by the respondent.  I make that observation against the background that he has not sought to contest the issue whether, in fact, he was in breach of the orders.

I should also mention that his character and antecedents appear to be good.  There is no suggestion of any previous breach of a Court order or of any other significant wrong doing.

A number of factors are pointed out on his behalf.  One was that the primary nature of proceedings such as this is to ensure compliance by coercing a respondent to carry out a Court order.  I have already mentioned the significance of that factor but noted that it is by no means the only consideration.

Another is that his conduct has caused no loss to the applicants.  In support of that he relied upon the affidavit of a person with high level qualifications in crop agronomy and related areas, who expressed the conclusion that the planting of the oats crop would have very little detrimental effect on the soil of the properties and might, in fact, be beneficial; and on an affidavit of a valuer that the oats crop has improved the overall marketability of the property.

Those facts may be true but it seems likely that the respondent's conduct commits part of the land to a particular form of activity for some months.  The proceedings are brought against the background of a winding up of a partnership between the parties.  There is a prospect that other parties than the respondent might have the benefit of future ownership and use of the properties in respect of which the prohibition of the particular farming activities was ordered, and their intended use might not coincide with what results from the respondent's activities.

It was also submitted that he did not intend any harm to the property but that he only wanted to farm the land, that being evident from earlier proceedings between the parties.  In the sense that he wished to further his farming activities, I have little difficulty accepting that submission.

It was also pointed out that he cares for his mother who is aged and suffers from dementia.  Indeed, it was submitted that if the respondent is not available to continue to care for her, it is likely that she will have to be removed from the only home she has known since she married the father of the respondent and of the male applicants.  There has been no suggestion that this submission is not correct, although in accepting it I do not wish to suggest that the male applicants are not concerned for the welfare of their mother.

In addition, the mother of the respondent has a right to reside in a house on one of the farms which is conditional upon her continuing residence there.  It is submitted that if the respondent were not available to continue to care for her, resulting in her having to live elsewhere, her right would cease.  Again there is no suggestion that that submission is not correct.

I should also mention a matter referred to in the submissions for the applicants.  It is that the respondent is of an unusual personality type.  That appears to be a reference to what emerged from the substantive hearing before me in related proceedings.  It reflects the respondent's determination to remain on the farms and his strong attachment to them because of their long-standing connection with the Paroz family. It may provide in some part an explanation for the respondent's conduct but plainly it offers no excuse for it and cannot be a particularly significant factor in any order I make.

Mr Ferrett of Counsel, who appeared for the respondent, provided a useful and extensive summary of a number of cases in which penalties have been imposed for contempt.  I do not propose to refer to it in detail, but will mention some of the authorities to which he referred. 

One was the Law Institute of Victoria v. Nagle [2005] VSC 47. In that case a person was punished for 44 breaches of an injunction restraining him from acting as a solicitor when not entitled to do so.  The effect of the penalties imposed was a sentence of 22 weeks imprisonment wholly suspended for a period of three years.

In another case, Queensland Law Society v. Sande [1998] 1 Qd R 273, a person who had acted as a solicitor when not entitled to do so and who had been restrained from doing so, breached the restraining order on several occasions.  He was fined and sentenced to a term of imprisonment of three months which was suspended.

In Harris v. Muirhead [1993] 2 Qd R 527 two persons interfered with possession by receivers of real property over which they had previously granted a mortgage. They were found to have done so intentionally and in contempt of Court.  Each was sentenced to a term of imprisonment of six months, wholly suspended.

In R v. Lemmens [2010] QSC 271 a person who failed to comply with a subpoena was sentenced to a term of imprisonment of four months.  That person was already serving a term of imprisonment for supplying drugs.

The authorities provided by Mr Ferrett demonstrate that an extensive range of penalties may be imposed in a case like this.

Reference was also made to Lade & Co Pty Ltd v. Black [2005] QSC 325.  Cattle were permitted to stray from a property in breach of undertakings.  A fine of $500 was imposed.  It should, however, be noted that in that case the Court of Appeal subsequently determined that contempt resulted from any breach of the order.  I do not find this case of much assistance in dealing with the proceedings before me.

In Camm v. ASI Development Co Pty Ltd [2007] QCA 317 a sentence of six months' imprisonment had been imposed on a person in breach of orders relating to the specific performance of a contract of sale.  It is apparent that, on appeal, the Court did not consider the order unduly severe notwithstanding the poor health and indigent circumstances of the person to whom the order was directed.  That is because the punishment was imposed to “vindicate the authority of the cour,t and to protect the interests of the party who has the benefit of an order of the court by coercing the recalcitrant party into performing his or her obligations.”  The Court held that in that case “the only order likely to impose an effective sanction for Mr Camm's deliberate defiance of the authority of the court and to coerce him into divulging the true whereabouts of the vessel” the subject of the order was an order for imprisonment.  It should, however, be noted that the Court also considered that Mr Camm's fate was in his own hands, which made the submission that the punishment was excessive not particularly compelling.

Since in the present case there is no significant suggestion of coercion, the term imposed in Camm is, in my view, not a particularly good guide to the penalties to be imposed in the present case.

In Formal Wear Express Franchising Pty Ltd v. Roach [2004] QCA 339 a person had given an undertaking not to conduct or be concerned or interested in any business for the mobile hire of formal menswear within a particular area.  The undertaking was breached by a single transaction resulting in a fine of $3,000.  Shortly after the fine was imposed, two further transactions occurred, and a little later another transaction. At first instance the person who had given the undertaking was sentenced to a term of six months' imprisonment.  On appeal that was reduced to a term of three months on each of the three counts of contempt, the sentences to be served concurrently.

Williams JA, with whom the other members of the Court agreed, said that because of the contemptuous behaviour of the applicant in continuing to breach the undertaking so soon after being fined for contempt, it was appropriate to impose a custodial sentence.  His Honour stated that this was particularly the case where there had been no acknowledgment of wrongdoing by the applicant at the sentencing hearing or subsequently.

In Rich v. Attorney-General for the State of Victoria [1999] VSCA 14 at [45] the view was taken that the imposition of a global punishment in respect of a number of punishable contempts was incorrect: see also [40].

I, therefore, propose to impose separate penalties in respect of each of the acts of contempt identified in Exhibit 1.

In respect of the 11 events occurring between 16 April and 27 May 2010, which were the subject of the application filed on 3 June 2010, I intend to impose a separate fine for each in the sum of $3,000 making a total of $33,000.

In respect of the events the subject of the application filed on 6 July 2010, which occurred on 15, 17 and 19 June, I intend to impose a more serious sentence.  I intend to impose a sentence of five months' imprisonment.

In respect of the contempt the subject of the application filed on 3 August 2010, I intend to impose a sentence of nine months' imprisonment.  I do that against the background of the litigation and other matters which have occurred since the making of the order of 7 April 2010.

I have imposed terms of the lengths I have identified because I intend to make an additional order.  That order gives recognition to the role the respondent plays in caring for his mother.  I intend to order that the terms of imprisonment be suspended forthwith for a term of two years. Because I intended to take that course, it seemed to me not inappropriate to mark the significance of the conduct by the lengths of the terms I have identified.

I should add that each of the terms of imprisonment are to be served concurrently.

Stand up, Mr Paroz.  Mr Paroz, you have been found guilty of contempt of Court on 11 occasions between 16 April and 27 May 2010 by reason of your slashing and planting activities on the properties referred to in the order made on 7 April 2010.

In respect of each occasion, I order you be fined the sum of $3,000, making a total of $33,000.

In respect of the contempts committed on 15, 17 and 19 June 2010, I order that you be imprisoned for a period of five months.

In respect of the contempt of Court constituted by your failure to remove cattle from the property referred to in the order dated 11 June 2010 and finalised on 6 July 2010, I order that you be sentenced to a term of imprisonment of nine months.

I order that the sentences be served concurrently.

I order that all terms of imprisonment be suspended forthwith.

You must not commit another offence punishable by imprisonment within a period of two years.  No doubt your Counsel will explain to you fully the consequences of your doing so but you may well end up serving the balance of the period or a substantial part of the period nominated if you commit another offence in that time.

...

HIS HONOUR:  The applicants have succeeded in obtaining orders against the respondent as a result of a series of acts of contempt of orders obtained by them over a period commencing on 16 April 2010 and, in fact, continuing up until now.  They seek their costs of their applications on an indemnity basis. It is submitted on behalf of the respondent that their motivations are by no means limited to upholding the authority of the Court or matters of public interest.  Other submissions adverse to them are set out in the written submissions made on behalf of the respondent.

It seems to me that the proceedings commenced at a time when the respondent had commenced to breach the order made on 7 April 2010 and clearly with a view to ensuring future compliance.  Warning was given to the respondent coupled with a threat to commence proceedings if he did not desist.  He continued his conduct in the face of that warning, and proceedings were commenced.  As time went by it was apparent, notwithstanding findings made against him, that he was continuing with his conduct, and allegations about that were added to the allegations initially raised against him.  While as things have turned out, coercion has ceased to be a matter of primary concern in these proceedings, it may perhaps fairly be said that is only as a result of the respondent's consent given today to an order enabling the removal of his cattle from the properties mentioned in the order dated 11 June 2010.  In any event, there is a significant public interest in upholding the authority of the Court.

That was recognised by Gillard J in Law Institute of Victoria Limited v Nagle [2005] VSC 47 at [26].  It was also recognised by Chesterman J,  as his Honour then was, in Evenco Pty Ltd v Amalgamated Society of Carpenters, Joiners, Bricklayers and Plasterers of Australasia Union of Employees, Queensland (1999) QSC 77 at [4]-[6].  It has at times been recognised that an order for indemnity costs is also part of the punishment appropriately imposed on a person who acts in breach of orders of a Court.

In my view, this is an appropriate case in which to order the respondent pay the applicant's costs of these three applications including reserved costs on an indemnity basis. Their conduct in bringing these proceedings, in my view, appropriately provides support for the authority of the Court in making orders.  That is a matter of considerable public interest.

The continued disregard by the respondent of those orders, a disregard which has continued up to the present, demonstrates an unreasonableness in his conduct which would also justify an award of costs on an indemnity basis.

Accordingly, I order the respondent pay the applicants' costs of and incidental to these proceedings on an indemnity basis.

...

HIS HONOUR:  The order extends to the payment of any reserved costs in relation to those three applications.