Case: Australian Prudential Regulation Authority v Siminton [2006] FCA 140
Outcome: cited
On 10 January 2006, the application by APRA for interlocutory relief was heard inter partes by Gray J. Gray J made orders which, inter alia, restrained Siminton until the trial of the action or further order from receiving money from members of the public by way of deposit in the Terra Nova Cache or the Principality of Camside and from dealing with or disposing of certain assets and moneys: see Australian Prudential Regulation Authority v Siminton [2006] FCA 140. 7 Siminton filed notices of motion seeking to discharge the orders made by Sundberg J, Gray J and myself. I adjourned the motions to a date to be fixed. 8 By notices of motion and statements of charge filed on 29 December 2005 and 19 January 2006 ('the contempt motions'), APRA applied for orders that the respondent be punished for contempt in respect of nine alleged breaches of the Sundberg J orders. Siminton applied to have the hearing of the contempt motions adjourned until after the hearing of the substantive proceeding against him or until after the conclusion of any criminal proceedings that might be commenced. I refused Siminton's application and proceeded with the hearing of the contempt motions. 9 Siminton, through his counsel, pleaded not guilty to the contempt charges and put APRA to proof of the charges. 13 It is not seriously in dispute, and I am satisfied that: (a) a copy of the Sundberg J orders was personally served on Siminton on 16 December 2005; (b) the terms of the orders were clear and were capable of being complied with by Siminton; (c) Siminton had knowledge of the terms of the orders. 14 The main issue at the hearing in relation to the charges was whether APRA had established beyond reasonable doubt that Siminton engaged in deliberate conduct which was in breach of the Sundberg J orders. The other issue was whether the Sundberg J orders were made without jurisdiction resulting in them being a nullity and not capable of founding a basis for the contempt motions. 15 In the statements of charge filed on 4 January 2006 and 19 January 2006 (respectively, 'the first statement of charge' and 'the second statement of charge') APRA alleged three kinds of breaches of the Sundberg J orders. First, breaches of Sundberg J's orders that Siminton be restrained, inter alia, from dealing with or disposing of moneys standing to his credit and/or that of his nominee. ('the disposal allegations'). Second, breaches of Sundberg J's orders that Siminton file certain documents and an affidavit with the Court ('the failure to file allegations'). Third, a breach of Sundberg J's order that a certain notice be placed on the websites of the Principality of Camside and the Terra Nova Cache ('the website notice allegation'). Each of the categories of charges and the charges themselves are dealt with below in chronological order. 16 On 15 December 2005, Sundberg J made the following order: '... 2. Until further order, the Respondent, whether by himself, his servants or agents or otherwise, be restrained from: ... (b) dealing with, withdrawing or disposing of, or giving any instructions in relation to the disposition or transfer of, all or any part of the moneys standing to the credit of the Respondent and/or his nominee in any account (whether held alone, jointly or in conjunction with any other person, including any accounts or property in the name of the Principality of Camside or the Terra Nova Cache) in any bank, building society or other financial institution and, without limiting the generality of the foregoing, the following account: Commonwealth Bank of Australia &#8226; Account Name: Principality of Camside &#8226; Account Number 3162 1027 8861; ... SAVE THAT nothing in this Order shall prevent the Respondent from: (d) paying his ordinary and usual living expenses up to a maximum amount of $500 per week, to be drawn first from any cash or bank account held by the Respondent other than the Commonwealth Bank of Australia account 3162 1027 8861; or (e) paying legal costs reasonably incurred in this proceeding or from paying such further sums as may be agreed in writing by the Applicant or permitted by further order of the Court. ' 17 Significant evidence in relation to the disposal allegations was set out in the affidavit of Paul Charles Monsted ('Monsted') sworn 23 January 2006. Monsted is the managing director of Technocash Pty Ltd ('Technocash') which he described as being 'an internet-based service to facilitate money transfers both within Australian and internationally.' 18 In paras [24]-[34] of its written submissions, APRA set out the matters it says are established by the evidence in respect of charge 1.1 in the second statement of charge: '24. On 17 December 2005, the Respondent effected or gave instructions in relation to the transfer of $536,880.18 from the Terra Nova Cache account, held with Technocash, to the Agios account, also held with Technocash. 25. Technocash is an internet-based service that facilitates money transfers within Australia and internationally. 26. At all relevant times the Respondent held the Terra Nova Cache account at Technocash, Account No 6276 2753 8201 2500. 27. The formal name of the Terra Nova Cache account, being Account No 6276 2753 8201 2500, is "Dr David Siminton". The trading name of that account up to and including 21 December 2005 was "Terra Nova Cache". 28. The trading name of the Terra Nova Cache Account changed after 21 December 2005. At the time of the transfer of 17 December 2005, the trading name of the account was "Terra Nova Cache". This is evident from transaction details recorded in Annexure "PCM4" to the Monsted affidavit. 29. "PCM4" is a true copy of a print-out recording Transaction Details for the Agios account. The 5 th item in "PCM4" records a deposit of $536,880.[18] from the Terra Nova Cache account on 17 December 2005 to the Agios account. 30. The corresponding debit entry to the Terra Nova Cache account is recorded in Annexure "PCM2" to the Monsted affidavit. Item 8 records a debit of $536,880.[18] on 17 December 2005. The "Function" column records "Sent to BF", meaning that the funds were transferred to another Technocash BillFold account. The transfer was made from the Terra Nova Cache account to the Agios account. 31. The contact person for the Agios account is Hardy Erhardt, the Respondent's solicitor. 32. APRA submits that the transfer of $536,880.[18] from the Terra Nova Cache account to the Agios account was deliberate. The person who made this internet transfer was required to verify his or her intentions by selecting appropriate responses from drop-down menus after logging-on. The Respondent is the only person authorised to use his Technocash Account. No other persons are listed. 33. Further, APRA submits that the Respondent, or a person acting on the Respondent's instructions, made the transfer. The Respondent's Technocash Account has two levels of security: 33.1 The first level of security involves the user providing an account number and password to log-on to the account. 33.2 The second level of security requires the user to enter a "spend" password, which protects transfers out of the account. 34. The conclusion that the Respondent deliberately effected, or gave instructions in relation to the transfer of $536,880.[18] from the Terra Nova Cache account to the Agios account is the only rational inference to be drawn from the evidence outlined in paragraphs 32 and 33 above, and in paragraph 48 below [see para 21 of judgment]. Any alternative hypothesis could not be regarded as reasonable in the absence of evidence to support that hypothesis when that evidence, if it exists as all, must be within the knowledge of the Respondent.' (footnotes omitted) 25 Although counsel appearing for Siminton contended that the evidence did not establish deliberate breaches of the orders by Siminton as is alleged in the disposal allegations, he did not point to any specific deficiencies in APRA's evidence nor did he explain why the inferences that APRA was seeking to establish (to the effect that Siminton, whether by himself or others acting as his agent, disposed of or gave instructions to dispose of moneys in the accounts referred to in [2] of the Sundberg J orders) should not be drawn. 26 I am satisfied that the evidence adduced by the applicant establishes each of the matters of fact relied upon by APRA. The evidence was not controverted and is strongly supported by the affidavit and documentary evidence. 30 For the reasons set out in APRA's submissions, I am satisfied that APRA has proved beyond reasonable doubt that Siminton deliberately engaged in the conduct set out in charges 1.1 and 1.2 of the first statement of charge and charges 1.1, 1.2, 1.3 and 1.4 of the second statement of charge and that that conduct breached the Sundberg J orders in the manner alleged by APRA. 31 On 15 December 2005, Sundberg J made the following order: '3. Subject to the right of the Respondent to object to producing any information or document on the ground that to do so may tend to incriminate him, the Respondent, on or before 22 December 2005, make and swear, and file and serve, a full and sufficient affidavit setting out: (a) The name and address of any bank, building society or other financial institution at which there is an account in the name, or under the control, of the Respondent (including, but not limited to, any accounts in the name of the Principality of Camside or the Terra Nova Cache), together with the number of such account and the balance therein at the date of service of notice of this order upon the Respondent; (b) The amount of cash in the possession of or under the control of the Respondent at the date of service of notice of this order upon the Respondent (including any cash in the possession of or under the control of any person who lives at the same residential address as the Respondent); (c) The name and address of any person or persons indebted to the Respondent at the date of service of notice of this Order upon the Respondent, and the amount of the debt or debts owed by such person or persons; (d) Full details of all facts and matters within the knowledge or belief of the Respondent concerning the receipt of money by the Respondent, the Principality of Camside or the Terra Nova Cache, or the transfer of money by the Respondent to any other person, including in relation to each occasion on which money was received or transferred: (i) the amount so received or transferred; (ii) from whom the money was received or to whom the money was transferred; (iii) the address and [contact] details of the person or entity from whom the money was received or to whom it was transferred; (iv) when it was received or transferred; (v) for what purposes it was received or transferred; (vi) the terms upon which it was received or transferred; (vii) the manner in which the said funds were dealt with; and (viii) the current location and amount of the said funds or any earnings thereof.' 32 In paras [52]-[54] of its written submissions, APRA set out the matters it says are established by the evidence in respect of charge 1.3 of the first statement of charge: '52. The Respondent did not, on or before 22 December 2005, make and swear and file and serve the affidavit the subject of paragraph 3 of the Order. 53. On 4 January 2006, the Respondent swore an affidavit, claiming privilege against self-incrimination in relation to the making and swearing of the affidavit the subject of paragraph 3. 54. Nevertheless, the Respondent breached paragraph 3 by failing to make and swear any affidavit on or before 22 December 2005.' (footnotes omitted) 33 Although Siminton filed no evidence, it was common ground that on a date after 22 December 2005, he exercised his entitlement to object to complying with [3] of the Sundberg J orders on the ground of self-incrimination. 34 In my view, APRA has not established charge 1.3 beyond reasonable doubt. The requirement to file the affidavit was expressed to be subject to Siminton's right to object to filing the affidavit on the ground of self-incrimination. There is some ambiguity in the order in relation to whether the obligation imposed by it is subject to the objection being made prior to 22 December 2005 or whether the obligation itself is subject to the right to object. As I explained in AIG at [33] and [41], a person will not be committed for contempt where, on one construction of the order said to have been breached, there may not have been a breach. In the present case, two constructions of [3] of the Sundberg J orders are reasonably open and, because the breach only arises on one of those constructions, the contempt alleged cannot be established beyond reasonable doubt. 35 On 15 December 2005, Sundberg J made the following order: '4. Subject to the right of the Respondent to object to producing any information or document on the ground that to do so may tend to incriminate him, on or before 22 December 2005, the Respondent produce to the Victoria District Registrar of the Court the originals of all statements of account, deposit slips, transfer applications, or records or memoranda of any kind in his possession, custody or control that relate to deposits with, earnings from (including any profit share or interest), or the withdrawal of any funds that relate to the Principality of Camside or the Terra Nova Cache.' 36 In paras [55]-[57] of its written submissions, APRA set out the matters it says are established by the evidence in respect of charge 1.4 of the first statement of charge: '55. The Respondent did not, on or before 22 December 2005, produce to the Victoria District Registrar of the Court the documents the subject of paragraph 4 of the Order. 56. On 4 January 2006, the Respondent swore an affidavit, claiming privilege against self-incrimination in relation to the production of the documents. 57. Nevertheless, the Respondent breached paragraph 4 by failing to produce the documents on or before 22 December 2005.' (footnotes omitted) 37 For the reasons set out in [34], I am not satisfied beyond reasonable doubt that Siminton breached [4] of the Sundberg J orders by failing to produce documents to the Court as required by that order. 38 On 15 December 2005, Sundberg J made the following order: '5. Within two days of this order being served upon him, the Respondent cause to be published on the first page that a user views when he or she access: (a) any current, proposed or future internet site that uses the names "Principality of Camside", "Terra Nova Cache" or any derivation thereof; and (a) any other internet site controlled by the Respondent; a notice in form set out in Schedule 1 hereto.' 39 In paras [58]-[60] of its written submissions, APRA set out the matters it says are established by the evidence in respect of charge 1.5 of the first statement of charge: '58. The Respondent did not, within two days of 16 December 2005 (the day when the orders of Sundberg J were served on the Respondent) cause a notice to be placed on the internet site of "the Principality of Camside" the notice in the form set out in Schedule 1 to the Order, as required by paragraph 5. 59. On 4 January 2006, the Respondent swore an affidavit in which he attested that the required notice "now appears on the website of the Principality of Camside" and that he had attempted to place a similar notice on "a website for the Terra Nova Cache". The Respondent does not testify as to the date when the required notice was inserted on the website of "the Principality of Camside". 60. Despite his belated claimed compliance with paragraph 5, the Respondent breached that order by failing, by 18 December 2005, to cause the notice to be placed on the website of "the Principality of Camside" a breach that continued until at least 23 December 2005.' (footnotes omitted) 40 In an affidavit sworn on 23 December 2005, a senior analyst at APRA, Matthew Paul Wyllie, stated that on 23 December 2005, he logged on to the Principality of Camside website and that no notice in the form set out in Schedule 1 to the Sundberg J orders had been placed on that website. He exhibited to his affidavit a print out of a webpage headed 'Welcome to HM Government of Camside' which had a button with the word 'Enter' on it. The date on the bottom of the print out is 23 December 2005. There is no notice of the requisite kind on that print out. 41 Paragraph 5 of the Sundberg J orders required Siminton to 'cause' a particular outcome. He failed to do so and there is no evidence that he was unable to 'cause' that outcome. In the circumstances, I am satisfied beyond reasonable doubt that Siminton breached [5] of the Sundberg J orders by failing to cause the requisite notice to be posted on the website of the Principality of Camside within two days of service of the Sundberg J orders. I am also satisfied beyond reasonable doubt that Siminton breached [5] by failing to cause the requisite notice to be posted on the website of the Terra Nova Cache within two days of service of the Sundberg J orders. 42 The other basis of Siminton's opposition to the contempt motions was his counsel's endeavour to argue that the Sundberg J orders were made without jurisdiction and were therefore a nullity. It was submitted that it follows that Siminton was not obliged to comply with the orders and that therefore there could be no breach of those orders. 43 Although I had some difficulty in following the submission, made on behalf of Siminton the matters alleged by him can be summarised as follows: (a) a failure to file a statement of claim as required by O 4 r 6(1A) of the Federal Court Rules ; (b) the failure of APRA to make a full and frank disclosure to Sundberg J on the ex parte application; (c) APRA's concession to Sundberg J that the evidence did not establish a breach of s 7 of the Act; (d) APRA's claim for damages was an abuse of process; (e) there was no proper basis for seeking a Mareva injunction; (f) the interim injunction should not have been made 'until further order'; (g) the usual undertaking as to damages was not required; (h) Sundberg J did not take into account the potential effect of the order on third parties; (i) APRA submission about the threshold for a Mareva injunction was wrong; (j) Sundberg J stated in the transcript that he had not read all of the evidence; and (k) APRA's application was an abuse of process. 44 There are two fundamental problems with the submission. The first is that the matters alleged by Siminton to establish absence of jurisdiction to make the Sundberg J orders do not, even if made out, establish absence of jurisdiction. Counsel for Siminton was not able to cite any authority in support of his submission that any of the above matters, if made out, would result in absence of jurisdiction. Plainly, none of the matters relied upon go to the jurisdiction of a judge of the Court to make the Sundberg J orders. I would add that, in any event, the submission was wholly misconceived as I am not satisfied that the allegations relied upon are justified or would warrant any of the Sundberg J orders being set aside. For example, s 65A(10) of the Act provides that APRA 'cannot be required' to give an undertaking as to damages. Also, it is clear that APRA's proceeding does not fall within O 6 r 6(1A). In so far as any of the above matters go to the merits, Siminton's counsel was unable to persuade Gray J on the later inter partes application hearing that Mareva type orders should not be made or that there was any disqualifying conduct of any kind on the part of APRA.