Family law: August 2017

Contempt – solicitor husband sentenced to six months imprisonment

In Bain & Bain (Deceased) [2017] FamCAFC 80 (3 May 2017) the Full Court (Bryant CJ, Ainslie-Wallace & Rees JJ) heard an appeal by the husband, a principal of a law firm, in a case where his terminally ill wife had applied for an interim order that he transfer his interest in a life insurance policy over her life to her so that the children would benefit from it upon her death. The husband opposed the application, arguing that any insurance should be applied towards the parties’ debts. He alternatively sought an order that any payment be held in his solicitor’s trust account.

Hogan J dismissed the wife’s application on the husband’s undertaking that any payment would be held in trust. The undertaking was not given in court but noted in the order after being deposed to in the husband’s affidavit and reiterated by his counsel. The husband did not attend court. The wife died and her legal personal representatives were appointed to continue the case under s 79(8). The husband received the insurance but applied it towards debt. The estate brought contempt proceedings under s 112AP. Hogan J found the husband guilty of contempt, sentencing him to six months imprisonment, suspended pending his appeal.

The husband argued that the estate lacked standing to bring a contempt application; and that he was not told of his undertaking by his solicitor who simply said that the wife’s application was dismissed.

In allowing the appeal, the Full Court (at [64]-[96]) held that the wife’s legal personal representatives did have standing to bring contempt proceedings. As to the finding of contempt, the Court said (at [117]):

‘ … [W]here her Honour did not identify in what way the husband’s evidence was “inherently unbelievable” in the sense that “no reasonable man could accept it” and to the extent that the trial judge rejected the husband’s evidence on that basis, it cannot be supported.’