FEDERAL COURT OF AUSTRALIA Australian Prudential Regulation Authority v Siminton (No 10) [2007] FCA 1814 CONTEMPT – Penalty hearing – Where respondent guilty of multiple counts of contempt of court – Considerations relevant to penalty – Contempt found to be wilful and contumacious – Prison term imposed Bankruptcy Act 1966 (Cth) Federal Court Rules O 37 r 2 Australian Competition and Consumer Commission v Info 4PC.Com Pty Ltd (2002) 121 FCR 24 referred to Australian Competition and Consumer Commission v World Netsafe Pty Ltd (2003) 204 ALR 537 referred to Australian Prudential Regulation Authority v Siminton (No 3) (2006) 230 ALR 528 referred to Australian Prudential Regulation Authority v Siminton (No 7) [2007] FCA 1609 referred to Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494 referred to Clifford v Middleton [1974] VR 737 referred to AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY v DAVID ROBERT SIMINTON VID 1607 OF 2005 TRACEY J 28 NOVEMBER 2007 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 1607 OF 2005 BETWEEN: AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY Applicant AND: DAVID ROBERT SIMINTON Respondent JUDGE: TRACEY J DATE OF ORDER: 28 NOVEMBER 2007 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. It be declared that the respondent is guilty of contempt by reason of the matters set out in Charges 1.1, 1.2, 1.3, 1.4, 1.5, 1.7, 1.9 and 1.11 of the statement of charge dated 14 December 2006. 2. No findings should be made in relation to the matters set out in Charges 1.6, 1.8, 1.10 and 1.12 of the statement of charge dated 14 December 2006. 3. The respondent be imprisoned for a period of twelve months in respect of each of the contempts referred to in paragraph 1 of these Orders, each sentence to be served concurrently with each other sentence. 4. A warrant issue for the committal of the respondent to prison for a period of twelve months. 5. The respondent pay the applicant's costs of the applicant's notice of motion dated 14 December 2006 on a solicitor-client basis. 6. The warrant issue pursuant to paragraph (4) of these orders lie on the Court file until further order. 7. Until the hearing and determination of any appeal from these orders, or further order: (a) The respondent not attend at any point of international departure; (b) The respondent report in person every Monday (commencing on 3 December 2007) between the hours of 9:00am and 5:00pm to the Nunawading Police Station. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 1607 OF 2005 BETWEEN: AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY Applicant AND: DAVID ROBERT SIMINTON Respondent JUDGE: TRACEY J DATE: 28 NOVEMBER 2007 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 On 7 November 2007 I found that Mr Siminton had committed eight contempts of Court involving contraventions of an order made by Gray J on 10 January 2006: see Australian Prudential Regulation Authority v Siminton (No 7) [2007] FCA 1609. These reasons should be read in conjunction with those in Siminton (No 7). 2 Gray J's order restrained Mr Siminton from dealing with, withdrawing or disposing of moneys held in various accounts. The contempts were committed when Mr Siminton either caused the funds to be transferred from such accounts into an account held by a Mr & Mrs Holzheimer in the Bank of Adelaide or he withdrew transferred funds from the Holzheimer's account. Mrs Holzheimer had obtained a Visa card which she provided to Mr Siminton. The card enabled Mr Siminton to draw on the account at automatic teller machines and, by presenting the card, to undertake credit card transactions with merchants. He used the card for these purposes. 3 Charges 1.1 to 1.5 related to transfers into the Holzheimer's account from a Mobile EFT Pty Ltd account controlled by Mr Siminton. The dates on which the transfers occurred and the amounts involved were as follows: · Charge 1.1: 2 May 2006 - $5,760.30. · Charge 1.2: 3 May 2006 - $3,125.88. · Charge 1.3: 4 May 2006 - $228.84. · Charge 1.4: 8 May 2006 - $781.28. · Charge 1.5: 16 May 2006 - $4,608.50. 4 Charge 1.7 related to the use, by Mr Siminton, of moneys transferred into the Holzheimer's account. Between 2 May and 16 August 2006 over $33,000 was withdrawn from the Holzheimer's account by Mr Siminton and applied by him for various purposes including the payment of legal fees. 5 Charge 1.9 related to a direction by Mr Siminton, to the Anglo-Irish Bank in Austria, to transfer $25,000 (less bank charges) to the Holzheimer's account. The transfer occurred on 16 August 2006. 6 Charge 1.11 was concerned with a series of transactions, undertaken by Mr Siminton between 16 August 2006 and 28 September 2006, in which he either withdrew money or undertook credit transactions totalling $21,377.93 from the funds which he had caused to be deposited into the Holzheimer's account. 7 On 30 March 2006 Mr Siminton had been found guilty of various contempts. On 10 April 2006 Merkel J sentenced him to imprisonment for a period of 10 weeks for transferring over $600,000 from one account to another and attempting to withdraw $500,000 from the account into which the money had been transferred. This conduct constituted a breach of an order made by Sundberg J which was in substantially the same terms as the order of Gray J which Mr Siminton subsequently contravened. Mr Siminton was also fined $5,000 for failing to comply with orders made by Sundberg J that he post notices on two websites. 8 APRA contends, and I accept, that Mr Siminton's conduct, in each case, was "deliberate, calculated and disguised." He was well aware of the orders made by Gray J and the constraints which those orders imposed on him. Nonetheless, he continued to draw on funds which he knew were the subject of his Honour's orders. On 11 April 2006, the day after Merkel J sentenced Mr Siminton for having breached orders made by Sundberg J, Mrs Holzheimer reported to the Adelaide Bank that her Visa credit card had been lost. A replacement card was issued to her on the same day. It was that card which Mr Siminton used to make the withdrawals or incur the expenses which are the subject of Charges 1.7 and 1.11. The arrangements with the Holzheimer's, pursuant to which Mr Siminton was able to obtain a card to operate their account and was able to transfer funds into it and withdraw funds from it, was designed to mask the fact that Mr Siminton was, as he well knew, acting in breach of Gray J's orders. 9 The only evidence called by Mr Siminton in mitigation of his conduct was provided by Mr Peter Dodson and his sister Miss Susan Dodson. They testified to what they regarded as his "honesty". Miss Dodson also described him as "trustworthy" and "decent". She was prepared to concede that an honest person would not deliberately flout an order of the Court. Mr Dodson was not prepared to make that concession. Neither witness had a clear appreciation of Mr Siminton's conduct. Neither had read my reasons for decision in Siminton (No. 7). 10 One of the defences raised by Mr Siminton, when he was dealing with the charges, was that Gray J's order lacked clarity. I dealt with this aspect of his defence in Siminton (No. 7) at [43]-[51]. I noted that, on the authorities there cited, it would be a relevant factor, in sentencing Mr Siminton for any contempt which he might be found to have committed, that he had a bona fide misunderstanding of Gray J's order. Mr Siminton gave no evidence at the penalty hearing. He did not, therefore, make any attempt to suggest that, in fact, he laboured under any misunderstanding of Gray J's order when engaging in the impugned conduct. 11 Despite numerous opportunities to do so Mr Siminton has failed to provide evidence of his personal and financial circumstances. What is known is that, since 2001, he has been an undischarged bankrupt and that he has failed to provide a statement of affairs in accordance with the requirements of the Bankruptcy Act 1966 (Cth). Counsel for Mr Siminton advised the Court, on instructions, that his client is impecunious. He also advised that a friend of Mr Siminton's might be disposed to provide money to meet any fine imposed by the Court. No indication was given of the maximum amount which the friend might be minded to advance for this purpose. 12 It is also notable that Mr Siminton did not apologise, express regret or in any other way seek to purge his contempt. 13 The following passage from Merkel J's sentencing remarks in Siminton (No 3) is relevant for present purposes: "The court has a broad discretion as to penalty. Having regard to the factors set out above [those noted at [15] of these reasons] and the matters put forward by counsel on behalf of Siminton, the appropriate term of imprisonment for the disposal contempt is 10 weeks. I would add that had there been any prior contempt convictions, the penalty would have been significantly greater. I am not prepared to accede to Siminton's submission that any sentence of imprisonment should be suspended." See Australian Prudential Regulation Authority v Siminton (No 3) (2006) 230 ALR 528 at 532. 14 I have concluded that Mr Siminton's conduct constituted wilful disobedience and contumacious disregard of Gray J's orders. His multiple contraventions are rendered all the more serious by reason of the fact that he had, by the time at which they were committed, been found guilty of a number of contempts constituted by breaches of orders which related to the same funds which are the subject of the present charges. Each of the contraventions constituted a criminal contempt. 15 In Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494 at 501-502, Merkel J identified the following considerations as being relevant to the determination of an appropriate penalty for contempt of Court: · The contemnor's personal circumstances; · The nature and circumstances of the contempt; · The effect of the contempt on the administration of justice; · The contemnor's culpability; · The need to deter the contemnor and others from repeating contempt; · The absence or presence of a prior conviction for contempt; · The contemnor's financial means; · Whether the contemnor has exhibited general contrition and made a full and ample apology; · Whether the conduct falls within the most serious category of criminal contempt cases such as to warrant the imposition of a term of imprisonment; and · Whether or not imprisonment is a "last resort" penalty in the circumstances of the case. See also Australian Competition and Consumer Commission v Info4PC.Com Pty Ltd (2002) 121 FCR 24 at 54; Australian Competition and Consumer Commission v World Netsafe Pty Ltd (2003) 204 ALR 537 at 540. 16 It cannot be gainsaid that the contempts presently under consideration fall into the most serious category. Having given careful attention to the various considerations referred to in para [15] above, I have concluded that there is no alternative but to sentence Mr Siminton to a period of imprisonment. The eight contempts formed part of a scheme, devised and implemented by Mr Siminton, to contravene Gray J's orders in a way that, he no doubt hoped, would not be detected. Although it is appropriate that a particular penalty be attached to each contempt, those penalties should, therefore, be served concurrently. 17 I do not consider that a distinction should be drawn between the four charges that relate to events which occurred before 9 May 2006 and the other four which occurred after that date. The purpose of the endorsement provided for in Order 37 r 2 of the Federal Court Rules is to alert the person, to whom the orders are directed, that he or she stands in jeopardy of imprisonment if he or she fails to comply with the orders. Given that the liberty of the subject is at stake the Court will not lightly exercise its power under Order 37 r 2(6) and dispense with the requirement of service of a properly endorsed order. It will not do so unless "the evidence shows that the requirements of and the purpose of a particular rule have been fulfilled in a manner otherwise than in the form provided": see Clifford v Middleton [1974] VR 737 at 741, a passage which was quoted with approval by the Full Court in Siminton v Australian Prudential Regulation Authority (2006) 152 FCR 129 at 147. 18 The copy of the orders, made by Gray J on 10 January 2006, which was first served on Mr Siminton, did not contain the endorsement required by O 37 r 2 of the Federal Court Rules. Once this deficiency was recognised by APRA, an endorsed copy of orders was served on Mr Siminton. This occurred on 9 May 2006. In Siminton v Australian Prudential Regulation Authority (2006) 152 FCR 129 at 145-147 the Full Court held that, in the absence of an endorsement or a dispensation granted by the Court, the Court could not order the contemnor to be imprisoned. The Court held that a dispensation might be given, inter alia, where the contemnor had been in Court at the time at which the orders were pronounced or where there was evidence that the contemnor had knowledge of the need to obey the order: see at 147. 19 Mr Siminton was present in Court on 10 January 2006 when Gray J made his orders. On 29 December 2005, 4 January 2006 and 19 January 2006 APRA had filed notices of motion and statements of charge seeking orders that Mr Siminton be punished for contempt of the orders made by Sundberg J on 15 December 2005. The relevant part of Sundberg J's orders was in substantially the same terms as the relevant part of Gray J's orders. Those charges were heard before Merkel J on 29 and 30 March 2006. On 10 April 2006 Merkel J ordered that Mr Siminton be imprisoned for contempt of Sundberg J's orders. It may, therefore, readily be inferred that Mr Siminton was well aware, before 2 May 2006, of the need for him to obey Gray J's orders and of the potential consequences if he failed to do so. In my view this is an appropriate case in which to grant a dispensation under Order 37 r 2(6) and I do so. 20 Although the amounts of money involved in the various contempts varied between $228.84 and over $33,000, I treat them all as warranting the imposition of the same term of imprisonment. I do so because the larger sums involved in Charges 1.7 and 1.11 are, in each case, aggregations of the sums involved in numerous smaller transactions. The money which was transferred from Austria and is the subject of Charge 1.9 was used to facilitate many of the smaller transactions which were dealt with in Charge 1.11. 21 I have determined that the appropriate penalty for each offence is a sentence of imprisonment for 12 months, with each sentence to be served concurrently with each other sentence. 22 APRA seeks an order that Mr Siminton pay its costs on a solicitor-client basis. It does so because it has expended public funds in seeking to protect the interests of members of the public who have contributed to the funds which were subject to Gray J's order and in seeking to vindicate the authority of the Court. Such an order is, in my view, appropriate in the circumstances. APRA should not have to bear the costs incurred by it in prosecuting the contested contempt charges. 23 Counsel for Mr Siminton advised the Court that Mr Siminton proposes to file an appeal against my contempt findings and any penalties which I might impose. I will, therefore, hear the parties as to whether or not the warrant for the committal of Mr Siminton to prison should lie in the Registry of the Court until his proposed appeal has been heard and determined. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey. Associate: Dated: 28 November 2007 Counsel for the Applicant: Ms D Mortimer S.C & Mr S Hibble Solicitor for the Applicant: Australian Prudential Regulation Authority Counsel for the Respondent: Mr D Sharp Solicitor for the Respondent: Erhardt & Associates Date of Hearing: 15 November 2007 Date of Judgment: 28 November 2007