Sunday, 21 August 2011

Family Court stands up for bank and removes "Today Tonight" order

The Full Court of the Family Court, in a case called A Bank and Coleiro recently rejected the approach of Federal Magistrate Harman on contempt, and how to deal with his bank. The bank appealed, successfully, against various orders made by Federal Magistrate Harman.

First appearance 7 April, 2011

The husband appeared without a lawyer, but with an interpreter. The husband had sold his home, for about $200,000, and in answering a question from the Federal Magistrate as to whether the money was still in the account of his solicitors, said "yes" through his interpreter.

There was a short break. On the matter coming back before the court, a duly lawyer appeared for the husband. It became apparent that the $200,000 had been deposited to an account of the husband's held with the bank. No bank statements were provided. The duty lawyer told the Federal Magistrate that the husband had trouble hearing, and  dementia, and that she was concerned about whether or not the husband had capacity to instruct her.

The transcript speaks volumes as to what happened next:

Can I ask you, Ms Interpreter, to explain. I want [the husband] to tell me where the $200,050 is; and if he either refuses to tell me or he genuinely no longer has the money, he starts a gaol sentence today. THE INTERPRETER: Okay. [The husband] says that he fell sick. He put the money in the back of the car and that when he looked for that, they were no longer there.
HIS HONOUR: Can you ask him is there any money left in any account with [the bank]?
THE INTERPRETER: Okay. All I have left is about $3000.
HIS HONOUR: Then can you ask him is there somebody who can bring his toiletries because he is going into a police cell in about five minutes time?
THE INTERPRETER: Okay. Sir, [the husband] insists he doesn’t have any money, okay? No, I don’t have anybody.
HIS HONOUR: Then can you please tell him he will be going to gaol until the money is produced.
THE INTERPRETER: I don’t have any money. Somebody stole the money.
HIS HONOUR: Then can you please tell [the husband] he will be in gaol for a very long time.
THE INTERPRETER: I don’t have any money.
HIS HONOUR: I am getting the police here now. They are going to take you into custody and put you in a cell.
THE INTERPRETER: Okay. I can’t do anything about it.
HIS HONOUR: Very well. While we are waiting for them, you need to go to the witness box, please...

HIS HONOUR: Now after you received th[e wife's property settlement] application, the sale of that house at [D] finished, it was sold. Do you agree with that?
THE INTERPRETER: I had to sell it because I didn’t have any more money to pay.
HIS HONOUR: But it was sold or the sale completed after 26 February. Do you agree with that?
THE INTERPRETER: I sold the house before I received the papers.
HIS HONOUR: On 1 March, you deposited a sum of $200,050 with [the bank]. Do you remember that?
THE INTERPRETER: Yes.
THE WITNESS: Yes.
HIS HONOUR: At around that time, you had opened three accounts with the [the bank]?
THE INTERPRETER: Yes.
HIS HONOUR: And after those –that money was deposited to your account on 1 March, you would appear to have withdrawn nearly all of it.
THE INTERPRETER: Yes.
HIS HONOUR: A number of those withdrawals occurred by telephone banking.
THE INTERPRETER: No, it’s not through the telephone, no; I went to the bank.
HIS HONOUR: So if your bank statements say that you had made withdrawals by telephone banking, that’s not correct?
THE INTERPRETER: No, it’s not by telephone.
HIS HONOUR: Now a number of the transactions say “funds transferred to term deposit.” Do you have a term deposit with the [bank]?
THE INTERPRETER: No, I haven’t got an account, a term account.
HIS HONOUR: Then before we proceed any further, can I make very clear to you what is occurring. If I could ask you to translate that, please.
THE INTERPRETER: Yes, I did have an account there but I closed.
HIS HONOUR: You were under oath to tell me the truth.
THE INTERPRETER: I’m saying the truth.
HIS HONOUR: And [Counsel] who appears for your wife is going to make some further inquiries during the course of the day to get documents from [the bank].
THE INTERPRETER: She can do so.
HIS HONOUR: And if those – if documents are produced by [the bank] that show that any of the answers you give me are not correct, you will be charged with perjury.
THE INTERPRETER: I’m saying the truth.
HIS HONOUR: For now, you are charged with the offence of contempt of court in that you have with full knowledge of the application of [the wife] sought to dispose of or conceal the funds the subject of those proceedings.
THE INTERPRETER: I hid them behind the seat of the car.
HIS HONOUR: If you could just interpret that, please, though, Ms Interpreter.
THE INTERPRETER: I took them out to get a farm.
HIS HONOUR: Very well. Do you understand, [the husband], that you are charged with a criminal offence?
THE INTERPRETER: I’m saying the truth.
HIS HONOUR: Do you understand that you are charged with a criminal offence?
THE INTERPRETER: I don’t understand.
HIS HONOUR: You – after you were served with [the wife’s] application, you allege you have disposed of all of the money that the application sought to divide between you and [the wife].
THE INTERPRETER: No, it’s not true, I did not do it for that.
HIS HONOUR: And until the matter is dealt with to finality, which may take some months, you will be held in custody in gaol.
THE INTERPRETER: I can’t do anything; I have said the truth, whatever happens.
HIS HONOUR: Do you understand that you will very shortly be going to gaol, as in today?
THE INTERPRETER: I can’t do anything; I have said the truth


His Honour then required the husband's friend, Mr B, to go from the back of the court into the witness box.

Then the bank was telephoned, and a bank officer, who was not sworn in, spoke to the court. The officer told the court that there had not been telephone banking, as appeared on the statements, but cash withdrawals, and it appeared that the wrong code had been inputted when describing the transactions on the statements.

His Honour then considered jailing the husband immediately, but put it off when a letter from the husband's GP stating that he had dementia was produced. The matter was then adjourned to another day. His Honour said:

I’m going to release [the husband] on condition that he appear on the next occasion and that he present 120,000 bucks or he goes to gaol next time. I don’t believe for one second his story, or his friend’s story about 200 grand in the back of the car; not for one second. I would slot him for perjury now, if somebody could produce a $20 note that shows he was lying. But I’m just unimpressed that he is served with an application, and two working days later, banks the cheque and proceeds to withdraw it by telephone banking – whether he did it or somebody else – but he must have given them the details for telephone banking after 1 March because that’s when he set up the account, as it would appear, a new customer of [the bank].
And the moment he is able to do that, within the space of eight working days the money has gone; in just enough time for it to all be gone before the first return date. So that’s the course I will take. It’s just an issue of how long. But he goes to gaol next time unless he brings 120 grand in cash, because until he can prove otherwise I’m not buying his story....

HIS HONOUR: Now, Ms Interpreter, can I ask you just to interpret some very brief things. [The husband], we’re letting you go home. But you need to be back here in two weeks’ time on 21 April. There are a number of other things you need to do in the meantime that [Ms L] will explain to you. But the two important things you need to be conscious of is that you need to go to [W] Police Station every day to report so that I know that you haven’t left. And you need to bring $120,000 with you to court on 21 April or you will be going straight to gaol, not passing go, not collecting $200. Because I am not believing your story at all about the money being taken from your car, and if you don’t have money here bring your toiletries you won’t be leaving next time. I am deadly serious you will be in gaol this time in a fortnight if that money isn’t here. Thank you. [Ms L], and to the rest of your team, thank you for the assistance.(emphasis added)

Second appearance 21 April, 2011

His Honour said (Transcript 21 April 2011, page 2, lines 38- 46):
HIS HONOUR: No, no. If you say that has happened, I accept that from you. I did make very clear to [the husband] today, though, that he brings 120 grand or he brings his toiletries because he starts his sentence today if the money is not here.
[MR H]: HE says he doesn’t have the money.
HIS HONOUR: Then I have already taken that evidence and made very clear to him I don’t believe it. I have already convicted him. If he doesn’t come up with the money, he starts his sentence today. 
HIS HONOUR: Well, if that’s so, he will have to deal with Conlan J about that, because I dealt with it last time. It’s a done deal. Does [the husband] get a pension?..
HIS HONOUR: And [the husband] will find himself entirely deprived of the balance of that account and I will be garnisheeing his pension, and he will be starting his sentence ...
HIS HONOUR: But as I said, [Mr H], I need to stand the matter in the list. [The husband] is not to leave the registry because I hear what you say in relation to the findings that could or should be made, but I have already made them. He has already been convicted. He has already been sentenced. I suspended it on the last occasion. The suspension ends today. I made very clear the 120 is here, because I don’t believe he doesn’t have it.

I suppose, being blunt, I don’t particularly want to see the Sunday Telegraph with a banner headline about the nasty Federal Magistrate who caused an elderly deaf man to get beaten in jail, when it’s not achieving a purpose. If it achieved a purpose, well, he can cop the beating. But it’s not going to achieve a purpose. So I think, certainly, that would be the course. But it’s an issue, then, of – I think, you wouldn’t have had the opportunity, yet – I haven’t look at the file, but you – no, you have, sorry. You filed a response, [Mr H]. (Emphasis added)

As Chief Justice Bryant noted:

His Honour was ultimately persuaded by Counsel for the husband that he should dispense with the order requiring him to attend at the police station every day. Counsel for the wife indicated to his Honour that her client was sufficiently protected by the injunctive orders and a restraint on the husband from leaving the country and did not require the husband to report to the police station. His Honour’s response was (Transcript, 21 April 2011, page 12, line 39):
HIS HONOUR: Certainly. Very well, and we can bury that as well.
  1. His Honour then made an order dispensing with reporting to the police at all.
  2. What his Honour did with the contempt application itself is not clear as it is not mentioned.
 The bank

Federal Magistrate Harman joined the bank as a party. No application had been made to join the bank. No one from the bank was given the opportunity to repond to the application before it was heard.

What his Honour said speaks for itself:

One thing I would propose doing, and I’m fully conscious they’ve had no notice of it, but I don’t particularly care about that, is join [the bank] because I think that’s the best way I’m doing(sic) to get them here, and I think if I am incorrect in disbelieving [the husband], will give you the best shot to protect [the husband’s] interests - - -
... I know we haven’t given any notice to [the bank], although, we did, in fact, have some person from [the bank] whose name I can’t remember give some evidence by telephone on the last occasion, which is how it came to be that, in fact, we became aware that each of the transaction descriptions on the [bank’s] banking records was wrong. So I suppose to that extent, that’s probably the notice they’re getting. But I want to join them as a party because – if they’re disgruntled by that, well, they can appeal. They can’t get a costs order against the court. They certainly won’t be getting one against the parties.
If I am incorrect in my suspicion as to the veracity of [the husband’s] evidence about what happened with his money, then, that will give you the best shot to protect [the husband’s] position and seek orders against [the bank] as to anything that has happened that may have been fraudulent but not involving [the husband]. And [Counsel for the wife], that will, if I’m right about that and there has potentially been some collusion or otherwise, that will give your client the best shot of doing something about it....
:
So it’s an issue of whether we’re going to a conciliation conference, whether we’re simply coming back to see what [the bank] has to say for themselves, and I will make sure, in joining them, that I express very clearly why because something that is not quite right has been going on at [the bank]. Seeing as they have control of my money and my wife, I’m not particularly excited about that....

I don’t want to, for the reasons I’ve already described, [solicitor for the husband], put you to the difficulty and expense of dragging you in to Sydney, although, it probably suits [the bank]. But probably, the more inconvenience we create for the (sic), the better.


His Honour adjourned the proceedings to June, but noted these things first:



The [Bank] is joined as a party because:
  1. the material produced by the [bank] on subpoena purporting to be the proper business records of the bank would appear to be either inaccurate or fraudulent;
  2. evidence given when the matter was last before the Court would give rise to a suggestion of collusion between one or more bank offers (sic) and/or [the husband] or other persons;
  1. the opening of the accounts and their operation relevant to these proceedings would appear highly unusual and would appear to involve substantial cash withdrawals within a short period of time and would not have been reported to the appropriate agency and would have the affect to [the husband’s] knowledge of frustrating the Wife’s application and subverting the Courts jurisdiction.
  1. The evidence available in the mater (sic) to date would also suggest a lack of duty of care by the bank towards [the husband] in that he is elderly, suffers a hearing difficulty, is suggested to be affect (sic) by dementia and the transactions which had occurred would appear to have been assisted or undertaken by persons other than [the husband]; and
  2. If one or all of the above are ultimately found proven by the evidence in this case the Court will consider making orders for compensation or restitution against the [bank].
Third appearance 11 June, 2011


When the matter next came before his Honour in June, the bank was represented. This exchange took place between his Honour and counsel for the bank:

HIS HONOUR: And if they don’t, there’s nothing produced and there’s a subpoena outstanding and I’m entitled to arrest the managing director of [the bank] right now because they have had three months to comply with the subpoena and have chosen not to, other than to produce documents which mislead the court. And I’m not suggesting that’s deliberate but they do and they’ve got this man arrested and put in custody.
[MS B]: Your Honour, may I take umbrage and say [the bank] did not get [the husband] arrested. As I understand, that was your Honour’s bench warrant.
His Honour then did this:

I note that a subpoena addressed to the [bank] was previously served and made returnable 7 April 2011, and with respect to that subpoena (a) documents were produced by the [bank]; (b) after the matter had been dealt with and interim determinations made with respect to the substantive proceedings, and following cross-examination of the husband and another witness in his case, further documents were produced by the [bank], and an officer of that bank contacted to give evidence by phone which suggested that each of the documents that had been produced by the bank to the court in purported compliance with the subpoena did not accurately reflect the transactions which had, in fact, occurred.
Next:
The material to be filed by the [bank] shall include and annexe copies of all relevant documents, including statements, vouchers, deposit and withdrawal slips, internal memoranda or such other documents as would go to: (a) an explanation of the discrepancies between the various documents now produced, and particularly noting that the documents initially produced suggested that most, if not all, of the transactions which had occurred had been conducted by telephone banking, whereas it would now appear no such transaction had ever occurred, and further, that such transactions as had occurred largely involved transfers of funds to a term deposit account which it is also now suggested does not, and has never, existed; (b) the apparent different signatures on each withdrawal slip and application for opening an account that has been produced to the court; (c) an explanation as to the bank’s compliance or otherwise with financial reporting obligations regarding cash transactions in excess of $10,000.
(Transcript, 14 June 2011, pages 13-14)
...
(9) I grant leave to each of the husband and the wife pursuant to section 121 of the Family Law Act to make such disclosure of these proceedings and the nature of same and allegations contained therein as they consider appropriate, and note that any such disclosure or invitation to any media organisation to investigate issues relevant to these proceedings will seek to obtain information by way of interview or otherwise is (a) considered to be in the public interest, and (b) shall not constitute a breach of section 121.

When his Honour made the publicity order, he did so without being asked to do so by anyone, and had not sought submissions from the bank. Counsel for the bank made the point plainly:

While these are matrimonial proceedings, the bank is nevertheless entitled to some protections and to many protections which exist to all entities of proceedings, be they corporations or private citizens.

 Justices Finn and Strickland had this to say about the joinder:
  1. It was neither appropriate nor necessary for the Federal Magistrate to join the bank at that point. However, it is apparent from what the Federal Magistrate said on 21 April 2011 that he had a collateral purpose in making the joinder order. He was using it as a way of getting the bank to appear before him and to allow the wife to pursue a claim for “compensation or restitution” against the bank. Yet, it was unnecessary to join the bank to achieve these purposes (if indeed they needed to be achieved). The bank could have been required to attend in the context of the alleged non-compliance with the subpoena that had been issued, and if the wife sought to make a claim against the bank the rules permitted the wife to name the bank as a party to any such proceedings, or to seek leave to do so.
  2. His Honour did give “reasons” for the joinder, and they were set out as notations to the order of 21 April 2011 as identified in paragraph 117 above. However, in our view, none of the matters referred to justify a joinder order as opposed to an order in relation to the subpoena that had already issued. Indeed, as we will elaborate on later in these reasons, his reasons comprise unjustified assumptions on the part of the Federal Magistrate. They clearly follow on from inappropriate comments made by the Federal Magistrate during the hearing on 21 April 2011 and which are revealed in the transcript from that hearing set out in paragraphs 113 and 114 above.
  3. There is also no question that the bank was not on notice of the proposed joinder and it did not have the opportunity to either respond to the issues raised by the Federal Magistrate or at the very least make submissions in relation to the proposed joinder before the order was made.
  4. In most circumstances that would raise an issue as to whether there was a denial of natural justice and/or procedural fairness, as claimed by the bank....
  1. The only difficulty with this process that we can see is that it is quite apparent from the transcript of the hearing before his Honour on 21 April 2011 that his Honour was not making an order for joinder with a view to giving the bank the opportunity to attend on the adjourned hearing date to object to the joinder. His Honour was clearly intending that the bank attend to address the issues that his Honour considered arose from the evidence of the husband and his friend Mr B, the documents produced pursuant to the subpoena, and the “evidence” given by Mr S. As referred to earlier his Honour was using the joinder for a collateral purpose, and that is demonstrated by Order 7 of his orders made that day. In our view, such an order was completely unnecessary and inappropriate.
  2. There is also the question of the notations made to his Honour’s orders on 21 April 2011 and which we have set out above. In Ground 8 it is suggested that these are “findings” made by his Honour, and his Honour erred in making them in circumstances where the bank was not represented in Court that day.
  3. We are not necessarily convinced that these notations can be described as “findings”. They are expressed to be his Honour’s reasons for joining the bank, but we would accept that in these reasons his Honour makes a number of assumptions from the evidence he had heard and the documents he had seen which may not be entirely justified. In any event we treat them as raising issues that needed to be addressed by the bank on the adjourned hearing. We confirm though that we do not consider that they are reasons which would justify the joinder of the bank. Rather they comprise issues which should have been dealt with entirely in the context of the subpoena that had been issued.
Their Honours concluded that another Federal Magistrate should hear the matter, noting this portion of transcript:

What I understand is this, as a chronology: [The husband] came into the Richmond branch as a new customer on 1 March and he deposited $200,000 and $50 which was a telephone banking fee of some kind – but $200,000. He opened that account – first, should I say, he opened two accounts, he opened something called a savings account and a basic account. The savings account was the account into which the $200,000 was deposited. The basic account, as I understand, is a very simple and low fee, if not no fee, account. I understand in the vernacular, it’s the sort of account used by pensioners and people on very low incomes because it attracts no fees. The money was deposited; the account was opened in his name; he was the sole signatory and the bank records indicate that.
Then on a number of eight transactions, that money was withdrawn and, as [Counsel for the wife] has pointed out, it was, as the records indicate, over a period of about two weeks in various amounts from $10,000 being the lowest amount to $40,000 being the highest of the amounts – that was a one-off – there was one $40,000 withdrawal. Of itself, the bank, I anticipate would say if – giving evidence, would say there was nothing unusual about that; he is a customer of the bank, he is a sole signatory, he comes in and he withdraws his money and goes away, it’s cash and that’s the end of it.
HIS HONOUR: Well, can I stop and say there’s a few things about it. Firstly, the bank records suggest that they weren’t cash withdrawals, they were transfers to other accounts. So clearly the bank record is wrong.
[MS B]: I will come to that.
HIS HONOUR: I want to know whether it’s deliberately wrong, in the sense that there’s some degree of collusion, because evidence had also been given by [the husband’s] friend and flatmate that he had introduced him to this person who he knew well, who had helped him the past, and I want to know ether the records are mischievously wrong or there is just some horrible accident, either of which is ultimately going to be referred to the Banking Ombudsman to look at.
[MS B]: Your Honour, from – I was just about to come to that.
HIS HONOUR: Second, and more serious – or two further concerns – one which probably isn’t this court’s business but there is no evidence at all to suggest, and it wouldn’t have been the case based on what they are shown as in the record of [the bank], proper accounting in relation to the reporting of those transactions – all being withdrawals and cash of over $10,000 – which is a serious breach of the law by [the bank] and I’m not the Family Court, I’m the Federal Magistrate’s Court, so I have power to deal with those issues and propose to.
Thirdly, and the most important, is having cited the various transaction slips that have been produced, which wouldn’t have been required if they were telephone banking transactions and transfers to accounts which it appears, from what we were told from the evidence of the banking officer, don’t actually exist, the signatures – not one of them actually looks like the one that preceded it. There are a variety of signatures – I’m no handwriting expert, but they sure don’t all look like the same person’s signature.
So I have a real concern that there is either some collusion or a very grave interference with [the husband’s] rights, which had impacted on [the wife’s] and [Counsel for the wife] will certainly be given leave today, if she wants to, to amend her application to seek orders against [the bank] to compensate here, because [the husband] gave evidence he was fully aware of these proceedings, he had been served with the documents and, having been served with them and in total frustration, deliberately or otherwise and with or without collusion by employees of [the bank], has entirely frustrated her claim.
[MS B]: All right. Well, your Honour, if I can take it through in this way. There are eight withdrawals. Four of them - - -
HIS HONOUR: But why hasn’t someone put this in affidavit form because that’s how we work.
[MS B]: Well, your Honour, because [the bank’s] position, primary position is that it has no business being here because no party, at this stage, has sought an order against it and it’s primary application is that it be - - -
(Transcript, 14 June 2011, pages 4-5)
  1. The Federal Magistrate can then be seen as inviting Counsel for the wife to make an application for an order against the bank by saying:
Then give me one moment. [Counsel for the wife], do you want to seek an order against [the bank]?
(Transcript, 14 June 2011, page 5)
  1. Counsel for the wife responded:
I do, your Honour. I want to reserve a right at least to amend the application that should [the bank] – should your Honour make a finding that there has been collusion or whatever, my client would reserve her right to amend the application accordingly to seek some money against – some damages against [the bank] effectively.
(Transcript, 14 June 2011, pages 5-6)
  1. The following exchange then occurred between the Federal Magistrate and Counsel for the bank:
[MS B]: Well, your Honour, if that’s the case, then so be it but we should put the cart before the horse; that is to say, the application against [the bank] should be made. The evidence in support of that application should be put before [the bank] an the court of course and then [the bank] can respond in the light of the application made against it and the evidence as opposed - - -
HIS HONOUR: Why aren’t I entitled to deal with this on the basis [the bank] is in receipt of a subpoena which, on the face of it, it has not complied with, because the documents that are provided are entirely at odds with the oral evidence of an officer from [the bank] who says those documents do not reflect whatsoever what occurred. So there has been no compliance with the subpoena.
[MS B]: Your Honour, I don’t understand, I’m not in a position to respond to your Honour. I didn’t hear what the officer of [the bank] said. So far as my instructions go, the bank has answered the subpoena.
HIS HONOUR: They provided documents purporting to be in answer but I’m then told by the very officer who produced them who then emailed through a number of other documents which showed that those which had been provided to the court are entirely false. Whether maliciously so or otherwise, I really don’t care. They were simply not a proper reflection and could not be a business record because it’s conceded by he who produced them that they are not a proper reflection of the transactions that occurred, therefore there has been no compliance with the subpoena. And I want an explanation in writing and on oath by somebody about it because next time we come back, I can assure you, those seats are all going to be full of media. [The bank] has done something here, whether negligent or malicious, but something has happened that’s removed $200,000 from this man’s hands and removed, as a consequence, $200,000 from [the wife’s] hands.
[MS B]: Well, your Honour, may I say that your Honour may have prejudged the issue in those circumstances if that is your Honour’s attitude.
HIS HONOUR: Not at all. Your bank officer made clear that the documents that were produced purporting to be business records of [the bank] do not reflect at all the reality of what occurred. I am very concerned about that because I have jurisdiction much greater than a Family Court judge. I can deal with financial transaction reporting. I can make a finding right now that [the bank] has breached the law in terms of financial transacting by allowing 10 to 40 thousand cash withdrawals without having reported them. There are consequences for that. I have a power under the Corporations Act to deal with it.
[MS B]: Your Honour, I trust you are not going to make that order today.
HIS HONOUR: Not today. I’m going to give [the bank] the chance to file proper sworn evidence about it.
(Transcript, 14 June 2011, pages 6-7)
  1. Then after he had questioned the solicitor for the husband as to whether the husband would be seeking relief against the bank, which was a question that the solicitor was not in a position to answer, his Honour suggested that the bank had not fully complied with the subpoena in the following exchange:
HIS HONOUR: And if they don’t, there’s nothing produced and there’s a subpoena outstanding and I’m entitled to arrest the managing director of [the bank] right now because they have had three months to comply with the subpoena and have chosen not to, other than to produce documents which mislead the court. And I’m not suggesting that’s deliberate but they do and they’ve got this man arrested and put in custody.
[MS B]: Your Honour, may I take umbrage and say [the bank] did not get [the husband] arrested. As I understand, that was your Honour’s bench warrant.
HIS HONOUR: They did because I made a finding based on accepting the accuracy and validity of the documents produced as business records by [the bank] and accurate faithful representations of the transactions which had occurred to find that [the husband’s] evidence was fanciful and not to be accepted and accordingly he had lied under oath and he was charged with contempt and arrested. If [the bank] had thought to produce the documents which, at my instigation, not [the bank’s], four hours later were produced, and the concession made that the documents we have sent are completely inaccurate, he wouldn’t have been arrested. I detained him, I deprived him, in terms of talking about rights of private citizens, of his right of liberty. He was retained in custody for four hours until that happened caused by the document [the bank] produced which was clearly false. I don’t say false to suggest meaningfully so but it was false and I would have thought it’s a matter of real concern to [the bank] to have produced something that tells me how the hell that happened.
[MS B]: Your Honour, if I can only say again, and I would say this to protect my client’s interests, two things, firstly my client needs to have some considered – some time to consider the evidence brought against it. It has not had the opportunity to read the transcript and all of our so to speak ducks are not in a row. That needs to be done. It’s of no use to the court otherwise and for evidence to be put on which is in a sworn form upon which your Honour can rely, draw inferences and the like and I would secondly simply reiterate, as I must in order to discharge my duty to my client, in saying [the bank] did not cause [the husband] to be arrested. Your Honour, there is a chain of reasoning certainly in your Honour’s decision to issue an arrest warrant to [the husband] but I would simply say, to protect my client’s interests, [the bank] did not cause that to occur.
HIS HONOUR: I didn’t issue an arrest warrant, I convicted him and imprisoned him.
(Transcript, 14 June 2011, pages 8-9)
  1. Later on the same day the following further exchanges occurred between the Federal Magistrate and Counsel for the bank:
[MS B]: Well, your Honour, because your Honour has no evidence of that before you as yet. The bank needs to put on evidence - - -
HIS HONOUR: But I do - - -
[MS B]: - - - as to what has – may I - - -
HIS HONOUR: - - - because the banking officer to whom I spoke emailed to my associate, and they were admitted as exhibits the proceedings, the withdrawal vouchers which then made very clear that they had never been a telephone banking transfer to a term deposit that never existed.
[MS B]: Well, your Honour - - -
HIS HONOUR: They were cash withdrawals over the counter.
[MS B]: Your Honour is going one step further, if I may say, by this: it is no longer a case of [the bank] not answering or answering, as the case may be, a subpoena. Your Honour is now making or moving towards making orders and findings against [the bank]. But circumstances in which those earlier discussions with your Honour – and of course, I am flying in the dark, your Honour, because I wasn’t here and that is the very point. [The bank] was not represented in those proceedings. It was answering a subpoena. It was assisting the court so far as I understand. Your Honour is, may I say, and I don’t with to be in any way disrespectful, but at risk of prejudging [the bank]. Let [the bank] put on - - -
HIS HONOUR: No, I am not going to make any order about - - -
[MS B]: If I may - - -
HIS HONOUR: - - - the apparent inconsistencies. I am going to refer them to the Attorney-General - - -
[MS B]: Well - - -
HIS HONOUR: - - - to be appropriately investigated - - -
[MS B]: Certainly, your Honour has all those - - -
HIS HONOUR: - - - and if he considers it appropriate, prosecute it.
[MS B]: Your Honour has many powers and I wouldn’t suggest for one moment to detract from them. But [the bank] needs to understand the case that is being brought against it, needs to be given the opportunity to put on evidence to explain the situation. It may very well be, your Honour - - -
HIS HONOUR: You have had since 21 April.
[MS B]: - - - that once evidence has been placed before the court and [the bank] has been properly cross-examined and so forth on that evidence, that it may be that the concerns your Honour has are not nearly either as – that may not be founded at all or they may not nearly be as serious as your Honour suggests, in which case, the making of this into a Today Tonight story by allowing the parties to go to the media only prejudices, and may I say, potentially degrades the integrity of the proceedings because at this stage, all of this is untested; and at this stage, it is out of context; and prior to now, [the bank] has not been represented in the proceedings.
HIS HONOUR: But what I do have a context of are two sets of documents provided on the same day which cannot both possibly stand together.
[MS B]: Well, that may be - - -
HIS HONOUR: There is an issue about the integrity not of these proceedings, but of the banking process.
[MS B]: But your Honour, that is a matter of evidence.
HIS HONOUR: I am entitled to receive a business record from [the bank] that I can rely upon, and on the first instance did in sentencing to a period of imprisonment an elderly gentleman who it subsequently transpires may or may not have dementia.
[MS B]: Well, your Honour, that may be – look, all of that may be so or not so.
HIS HONOUR: To then be provided with a document on the same day that says, “Sorry, that is not right.”
[MS B]: Well, your Honour, it may be that there was human error. These things do exist in a big corporation - - -
HIS HONOUR: They do.
[MS B]: - - - as much as they do in any household or it may have been something else.
HIS HONOUR: The problem is I can understand if it was a transaction.
[MS B]: But we need to find out. These are matters of evidence. I’m sorry, your Honour?
HIS HONOUR: If it was a transaction, I would understand. But it is every transaction.
[MS B]: Well, your Honour, I take issue with that and I would say, on the evidence, it is not every transaction.
HIS HONOUR: All right.
[MS B]: But I am not going to give evidence from the bar table because I can feel - - -
HIS HONOUR: It is the majority of them. Telephone banking transfers to a term deposit in [the husband’s] name. He has never used telephone banking, he doesn’t have the facility on his account and he doesn’t have a term deposit.
[MS B]: Well, your Honour, I take issue with two of the – well, in fact, I take issue with two of those things and I agree with the third. But those are matters of evidence.
HIS HONOUR: Good. Well, the bank should have put it on before today. Didn’t need me to make an order about it.
[MS B]: Well, your Honour, before today, there has been no application against the bank. The bank has nothing to answer as yet.
HIS HONOUR: But there is a subpoena which the bank has not complied with. We have visited that issue. The bank cannot produce documents which they then concede are not an accurate business record and say they had complied.
[MS B]: Your Honour, until an application is made against the bank, the bank has nothing to put evidence on about - - -
HIS HONOUR: They have an obligation to comply with a subpoena or explain their inability to do so. They haven’t. As I said, I am happy to arrest the director - - -
[MS B]: Very well, your Honour. I hope you won’t be doing that.
HIS HONOUR: - - - because they haven’t complied.
[MS B]: But perhaps if we can just revert to a timetable for filing evidence.
HIS HONOUR: We have got that.
[MS B]: And the matters can be ventilated.
HIS HONOUR: We have got that.
[MS B]: Thank you.
HIS HONOUR: But we are getting to the bottom in these proceedings of what has gone wrong in this case and I am not trying to prejudge or suggest it is necessarily collusive. I don’t know. But I am dismayed that a bank – and the bank that I bank with – can produce records that are that inaccurate, and then expect that this court is not going to pay attention ...(emphasis added)

The contempt charge

Chief Justice Bryant was just as critical, but on this point. Her Honour stated:

  1. In light of these well established statements of principle and the Rules of the Federal Magistrates Court a fair hearing of the charge of contempt in the face of the Court requires the following steps to be taken:
    • First set out the charge which can be done orally or in writing. However it is essential that the alleged contemnor understands the charge that is being laid.
    • Consider whether it is necessary to take the exceptional step of proceeding to hear the charge or whether the charge should then be adjourned so it can be heard before another judicial officer.
    • To afford the alleged contemnor the opportunity to consider the charge and to adjourn for that purpose if necessary.
    • To give the alleged contemnor the opportunity to state whether he or she pleads guilty or not guilty to the charge.
    • To determine whether the charge requires the alleged contemnor to be held in custody and to hear submissions on the issue.
    • In the event the alleged contemnor pleads not guilty to give him/her the opportunity to present evidence and make submissions relevant to the defence and determination of the charge.
    • Having heard the defence to determine the charge beyond reasonable doubt and if established convict the alleged contemnor.
    • To make an order for punishment if convicted, or discharge if not.
    • If sentencing, to have regard to relevant sentencing principles.
    • To give reasons for the decision to convict and sentence.
  2. It is apparent from the transcript that his Honour failed to comply in almost all respects with the Federal Magistrates Court Rules and with the well established authorities in relation to the manner in which contempt in the face of the Court is to be conducted. However to explain what occurred it is necessary to consider in some detail how the matter unfolded before his Honour.
Her Honour then noted as to the appearance in June, commencing with a passage of transcript with the bank's counsel:

[the bank] did not cause [the husband] to be arrested. Your Honour, there is a chain of reasoning certainly in your Honour’s decision to issue an arrest warrant to [the husband] but I would simply say, to protect my client’s interests, [the bank] did not cause that to occur. HIS HONOUR: I didn’t issue an arrest warrant, I convicted him and imprisoned him. (My emphasis)
  1. That statement by his Honour is startling because as I have previously observed, it is obvious no proper procedure to arrive at a conviction and imprisonment had taken place. However it accords with the order that his Honour made, which had the character of punishment for contempt rather than a remand until the contempt could be heard. If that is so, it needs no further comment to demonstrate the clear and unambiguous failure to comply with the Federal Magistrates Court Rules, established authority and basic tenets of procedural fairness. The admission from his Honour that he had convicted and imprisoned the husband reveals that he failed:
    • to allow the husband to plead to the charge;
    • to afford the husband an opportunity to get advice or be heard;
    • to allow the husband to call evidence in relation to the charge;
    • to make findings on the evidence to determine whether the charge was proven beyond reasonable doubt;
    • to make a formal conviction;
    • to properly sentence;
    • to give reasons.
  2. Judges have significant powers which must be exercised judicially. In particular, the deprivation of the liberty of an individual is something not to be treated lightly by ignoring Rules and procedural fairness or by being used as a weapon with which to threaten a party as a means of seeking to achieve an end.
  3. I am conscious that no appeal by the husband was brought against his asserted conviction (and that his capacity to conduct proceedings still remains uncertain) and that there is no contradicter to support the manner in which the Federal Magistrate conducted the proceedings. Accepting those caveats however the transcript itself makes clear the flaws in the process adopted by the Federal Magistrate.
  4. The wider interests of public confidence in the administration of justice and expectation that judicial officers will not act arbitrarily, has caused me to take the unusual step of commenting on the process adopted by his Honour in relation to the contempt charge against the husband, absent an appeal against his orders.

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