Degraff v Brady & Ors [2009] QDC 363

1-1 [2009] QDC 363 DISTRICT COURT IVIL JURISDICTION C UDGE ROBIN QC J o 61 of 2007 N OEL ALFRED DEGRAFF N Applicant nd a AYNE THOMAS BRADY & ORS W Respondent RISBANE B .DATE 14/10/2009 . RDER O CATCHWORDS Uniform Civil Procedure rules r 665, r 926(3) Court declines to dismiss application alleging contempt by non-compliance with court order to pay proceeds of a sale to a named account on basis of service of the order on solicitors rather than on the respondents - the order did not include the r 665 notice of consequences of non-compliance - adjournment to permit respondents to comply with the order so far as now possible and to give a sworn account of what they did, why and when -- 1 of 6 -- 1-2 ORDER 1 10 20 30 40 50 60 HIS HONOUR: There is before the court an application by Mr Degraff to have the respondents dealt with for contempt of court given their failure to pay to a nominated solicitor's trust account the balance of the proceeds of the sale (previously effected)of a property described in the proceedings as the Power Street property. That order was made on the 8th of September 2009. The order as perfected does not have endorsed on it what is required in relation to time for compliance under rule 665. That is a potential difficulty in the way of successful pursuit of contempt proceedings although Mr Cullinane's written submissions refer to a decision of Costello v Courtney [2000] QSC 067 in which at paragraph 12 it was noted that the absence of the rule 665 notice or an equivalent might not be fatal. That authority was relied on by Mr Cullinane in support of his submission that the application is fatally flawed for not having been personally served on the respondents as required by rule 926(3). The present application is different not only because the respondent in Costello v Courtney had not appeared before her Honour who dismissed an application that he be dealt with for contempt. Here there has been service on the solicitors, which for present purposes I take as having occurred with the authority of the respondents themselves. Obviously there could be circumstances in which respondents facing such an application as this would much prefer that it be served on their solicitors. It would seem to me absurd if -- 2 of 6 -- 1-3 ORDER 1 10 20 30 40 50 60 in such cases the rule applied in all its rigor. Fortunately it does not fall to me to determine any of these issues as the matter will go before another judge. It is an oddity that it was listed in Brisbane. This has much to do with the circumstance that Judge Britton, the resident judge in Rockhampton, has under consideration an application for provision out of the estate of his late wife. It was considered inappropriate that his Honour deal with this application - which led to its being delisted. I am informed from the bar table, where Mr Morgan is assisted by an instructing solicitor from Rockhampton, that the possibility of Judge Tutt who is in Rockhampton this week and was there last week dealing with the application was raised but that the decision was made to make the application returnable in Brisbane instead. Perhaps that is understandable given the greater judicial resources and consequent flexibility available here. But it is hardly consistent wit the respondents' convenience. Mr Morgan is Brisbane counsel, a consideration favouring Brisbane. The respondents who for practical purposes I think are the two female respondents in the underlying "TFM" application, reside in Rockhampton. Their counsel, Mr Cullinane, is in Mackay and has participated in today's hearing by telephone. -- 3 of 6 -- 1-4 ORDER 1 10 20 30 40 50 60 Similar arrangements involving different personnel were put in place on the 8th of September 2009 when Judge Samios in Rockhampton made orders on the application of Mr Degraff, represented by Mr Morgan, then on the telephone, including that the respondents transmit to a named solicitor's trust account the proceeds of sale of the relevant Power Street property. That is the order in respect of which the alleged contempt arises. I had mistakenly thought the respondents resided in Mackay and provisionally arranged with Judge Clare who is sitting there this week to entertain the application there tomorrow if it was adjourned until then, her Honour having indicated preparedness to hear Mr Morgan on the telephone if necessary. There is little point now in bringing the matter on urgently. I am grateful for Mr Morgan's realistic concession. I have had some discussion with Judge Britton and understand he is close to delivering judgment in Mr Degraff's underlying application. Once judgment is delivered it will be known what harm if any has flowed from the apparent contempt of court. That aspect is perhaps not strictly relevant to assessing the dimensions of the contempt but it may be useful information for the court to have when the time comes. The respondents have a new solicitor, Mr Elliott, in Mackay. His affidavits indicate that there is an amount not far short of $4000 still available. I am at a loss to understand why that has not been paid as Judge Samios directed. -- 4 of 6 -- 1-5 ORDER 1 10 20 30 40 50 60 A subsequent affidavit of Mr Elliott includes correspondence passing to the respondents from their former solicitor which it is said support the view that they were acting under legal advice when they did what they did with the proceeds. It is not appropriate for me to draw any final conclusions about that or express them. The other matter that is mysterious concerns exactly when the proceeds of sale (which at one stage were a six figure amount) were disbursed. They have apparently gone to pay legal costs secured by a mortgage and the like and no doubt some went to pay out the mortgagee of the Power Street property. In my opinion it is important for assessing the blame that can fairly be laid at the respondents' door to know exactly what they did with the funds and when, particularly by reference to the date of Judge Samios's order. That ought to be done with them speaking for themselves, in my opinion, and not speaking through a lawyer. I am not being critical of Mr Elliott; he is new in the matter, and will obviously be having difficulties preparing the case. It is a suitable outcome today to have the matter adjourned to Rockhampton on the basis that is expressed in the order that I have made so that the respondents, as I think they need to do, comply to the fullest extent now possible with the court's order of the 8th of September and give a sworn account of why it happened, if they have done anything by way of disbursing funds since the order and with knowledge of it. They were -- 5 of 6 -- 1-6 ORDER 1 10 20 30 40 50 60 represented at the hearing when the order was made, and presumably had that knowledge. ----- -- 6 of 6 --