Case: Natural Floor Covering Centre Pty Ltd v Monamy (No 1) [2006] FCA 518
Outcome: followed
This leaves the question of contempt by failing to comply with para 1 of the order of 10 June 2005. It should be noted that the statement of charge in the notice of motion alleges contempt against both respondents, but only in one respect. There is no charge of disposing of, transferring or dealing with the Mariners Place property without first giving notice in writing to the applicant no less than 14 days prior to such dealing. There is no charge of failing to sell the property by public auction. The only charge is failing to pay the proceeds of sale (after deduction of the reasonable costs and expenses of sale) into the trust account kept by Kelly &amp; Chapman. In the absence of a specification in para 1 of the order of 10 June 2005 of the time within which such a payment was required, Ms Bell was obliged to pay the proceeds of the sale into the trust account within a reasonable time of receiving them. See Natural Floor Covering Centre Pty Ltd v Monamy (No 1) [2006] FCA 518 at [13] and [41] [42]. In any event, the time may not be crucial because, at least by June 2006, when Ms Bell returned from her second trip to Tunisia, she had clearly disposed of all of the proceeds of sale otherwise than by paying them into the trust account, and thereby put it out of her power to comply with the order. 38 As I have said, Ms Bell knew of the order of 10 June 2005 throughout the time she was disposing of the proceeds of sale of the Mariners Place property. She conceded that she had the opportunity to consult the terms of the order had she chosen to do so, to ascertain what her obligations were. She chose not to do this. As I have said, this amounted to deliberate blindness on her part about the obligations the Court had imposed on her. There is no doubt that it constituted wilful disobedience of the order of the Court. It is necessary to make a finding that Ms Bell was guilty of contempt of court in relation to the failure to comply with the order of 10 June 2005. 39 The charge against Living It Up is more difficult. Living It Up was not the registered proprietor of any interest in the Mariners Place property. Its relationship to that property was that the property had been used as security for a loan from the Commonwealth Bank that enabled Living It Up to purchase the Resort to Health business. It is clear from the respondents' defence that both Ms Bell and Living It Up were liable to repay the monies borrowed from the Commonwealth Bank for this purpose. In para 47 of the defence, the respondents plead that, in order to complete the purchase of the Resort to Health business by Living It Up, 'the First and Second Respondents borrowed the sum of $240,000 from the CBA'. At the time, according to the pleading, the advance was secured over the assets of the business and the Neerim Road property. Following the sale of the Neerim Road property, according to para 50 of the defence, Ms Bell refinanced liabilities, including that liability, so that they were 'solely the liability of the First Respondent and/or the Second Respondent', and were secured over a cash deposit in the name of Ms Bell. Upon the purchase of the Mariners Place property, according to para 52 of the defence, Ms Bell again refinanced the liabilities, including the money borrowed to purchase the business, so that they were 'solely the liability of the First Respondent and/or the Second Respondent', and secured over the Mariners Place property. It is unlikely that, in the refinancing, Ms Bell would have been able to persuade the Commonwealth Bank to release either her or Living It Up from liability to repay the amount borrowed, in favour of the other. It is therefore clear that, at the time when the Mariners Place property was sold, both respondents were liable to repay the amount borrowed from the Commonwealth Bank and secured on that property.