Ali v Collection Point Pty Ltd, in the matter of Collection Point Pty Ltd

INTRODUCTION 1 These contempt proceedings were filed on 15 September 2010 by two non-parties, Antonio Bulzomi and ZacXan Pty Ltd (collectively the Bulzomi Interests), against the Plaintiff, Hurkan Ali (Mr Ali). 2 On 22 December 2009, in a proceeding between Mr Ali as plaintiff and Collection Point Pty Ltd as defendant, this Court ordered, inter alia, that: [4] By no later than 4:00pm 24 December 2009, the plaintiff provide to the Court (and the independent person once they are appointed), and otherwise destroy and confirm on oath: (a) the File Maker Pro program and data files of the defendant; and (b) the MYOB data files of the defendant. [5] By no later than 4:00pm 24 December 2009, the plaintiff provide to the Court and the independent person (once they are appointed), and otherwise destroy and confirm on oath: (a) the MYOB data files of Zacxan Pty Ltd; and (b) the MYOB data files of T Bulzomi Financial and Legal Services. [6] By no later than 4:00pm 24 December 2009, the defendant provide to the Court a copy of: (a) the File Maker Pro program and data files of the defendant; (b) the MYOB data files of the defendant; (c) the MYOB data files of Zacxan Pty Ltd; and (d) the MYOB data files of T Bulzomi Financial and Legal Services. (the December 2009 Order). The proceedings between Mr Ali and the defendant settled on 6 September 2010. 3 The Bulzomi Interests, by notice of motion filed on 15 September 2010 and an accompanying Statement of Charge, alleged that Mr Ali breached the December 2009 Order. On 28 September 2010, paragraphs 2 and 3 of the Statement of Charge were struck out: Ali v Collection Point Pty Ltd, in the matter of Collection Point Pty Ltd [2010] FCA 1066. 4 Pursuant to leave granted on 11 October 2010, a further amended Statement of Charge was filed by the Bulzomi Interests as follows: 2. In breach of the December 2009 Order, … [Mr] Ali deliberately and intentionally failed to destroy a computer disk seized during the execution of a Penal order made in these proceedings on 2 August 2010, a screen dump of which is exhibit "AH-3" to [Mr Ali's] affidavit affirmed 16 August 2010 and which contained the (sic): (a) the MYOB data files of ZacXan Pty Ltd; and (b) the MYOB data files of T Bulzomi Financial and Legal Services; referred to in the December 2009 order. Particulars [The Bulzomi Interests] refer to: (a) the affidavit of Dominico (sic) Giovanni Crupi sworn 16 August 2010 in these proceedings; (b) the affidavit of Antonio Bulzomi sworn 16 August 2010 in these proceedings; (c) the affidavit of Dominico (sic) Giovanni Crupi sworn 1 September 2010 in these proceedings; (d) the affidavit of Scott Babington sworn 1 September 2010 in these proceedings; (e) the fifth affidavit of [Mr Ali] affirmed 24 December 2009; (f) paragraph 5 of the sixth affidavit of [Mr Ali] affirmed 14 April 2010; (g) paragraphs 35 and 36 of the seventh affidavit of [Mr Ali] affirmed 16 August 2010 and exhibit "AH-3" to that affidavit. Further, … [Mr] Ali deliberately and voluntarily threatened to use a computer disk seized during the execution of a Penal order made in these proceedings on 2 August 2010, a screen dump of which is exhibit "AH-3" to [Mr Ali's] affidavit affirmed 16 August 2010 and which contained: (a) the MYOB data files of ZacXan Pty Ltd; and (b) the MYOB data files of T Bulzomi Financial and Legal Services; referred to in the December 2009 order (the "files") against Antonio Bulzomi as part of the general threats made against him to Messrs Crupi and Babington, namely that he intended to use the files to "help the State Revenue Office put Tony away" and he would spread the information in the files to "anyone who would listen" including all over the internet and to the Australian Taxation Office. [The Bulzomi Interests] refer to: (a) the affidavit of Dominico (sic) Giovanni Crupi sworn 1 September 2010 in these proceedings; and (b) the affidavit of Scott Babington sworn 1 September 2010 in these proceedings. 5 The further amended Statement of Charge stated that the Bulzomi Interests sought "the relief specified in the accompanying Notice of Motion". The Notice of Motion said no more than "that [Mr Ali] be punished for contempt of Court on the grounds set out in the Statement of Charge dated 15 September 2010 and filed herein". 6 The written submissions filed on behalf of the Bulzomi Interests stated that "[Mr Ali's] contempt in deliberately failing to comply with the [December 2009] Order should be treated as a serious contempt and punished by the imposition of a custodial sentence (whether suspended or not) together with an appropriate fine." 7 Mr Ali submitted that the Court should dismiss the Notice of Motion because the Bulzomi Interests had not proven, beyond reasonable doubt, wilful or contumacious contempt by Mr Ali.

Power 8 In Collection Point [2010] FCA 1066, I summarised the relevant principles as follows: [7] The law relating to contempt proceedings, after undergoing something of an upheaval in the mid-1990s, is now fairly well settled. First, the question of power. The Federal Court of Australia Act 1976 (Cth) (FCA) gives the Federal Court "the same power to punish contempts of its power and authority as is possessed by the High Court in respect of contempts of the High Court": s 31 of the FCA. The High Court, in turn, has the same power under s 24 of the Judiciary Act 1903 (Cth) to punish contempt as was possessed by the Supreme Court of the Judicature in England as of 1903: Pattison (Trustee), in the matter of Bell (Bankrupt) v Bell [2007] FCA 137 at [43]-[44]. [8] Any application for contempt must be commenced strictly in accordance with the Rules: Spindler v Balog (1959) 76 WN (NSW) 391. In the Federal Court, O 40 r 5 provides for a procedure which enables a Court to address the substance of any alleged contempt. [9] … [T]wo matters must be noted: 1. the charge being one of contravention of a court order, the contempt is civil, not criminal; 2. although civil, some attributes of criminal proceedings are engaged including standard of proof beyond reasonable doubt. see Matthews v Australian Securities and Investments Commission [2009] NSWCA 155 at [154] (per Basten JA) and the authorities cited.

Contempt 9 The Bulzomi Interests accepted that as the party bringing the proceedings for contempt, they bore the onus of proof: Witham v Holloway (1995) 183 CLR 525. Moreover, the Bulzomi Interests conceded that in order to prove the contempt that was alleged, they had to establish the following elements: 1. the December 2009 Order was made; 2. the terms of the December 2009 Order were clear, unambiguous and capable of compliance; 3. the December 2009 Order was served on the alleged contemnor; 4. the alleged contemnor had knowledge of the terms of the December 2009 Order; and 5. the alleged contemnor breached the terms of the December 2009 Order. 10 The Bulzomi Interests conceded that the failure to comply with a court order is what, in the past, has been described as a civil contempt: Witham at 530. At least to some extent the distinction between civil and criminal contempt has been made superfluous by the High Court adopting a "beyond reasonable doubt" standard of proof for both: Witham at 534. However, the concession by the Bulzomi interests that the present alleged contravention is a civil contempt may still have some significance if, as has been said, the level of disobedience (i.e. intent or mens rea) required to make out a civil case remains lower. Merkel J summarised the current state of contempt law in Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494 at [6] as follows: Deliberate conduct which is in breach of a court order will constitute wilful disobedience of the order, and therefore a civil contempt, unless the conduct be casual, accidental or unintentional: see Australian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 106-107 ('Mudginberri') and 112-113. However, the disobedience will amount to a criminal contempt if it involves "deliberate defiance or, as it is sometimes said, if it is contumacious": see Witham v Holloway (1995) 183 CLR 525 ('Witham') at 530. … However, as all proceedings for contempt are now regarded as criminal in nature, all of the charges must be proved beyond a reasonable doubt: see Witham at 534. 11 In Australian Competition and Consumer Commission v Hughes (2001) ATPR 41-807 at [17], [19] and [20], Tamberlin J explained the importance of certainty in the drafting of mandatory or prohibitory orders and then went on to explain the duty of those subject to such an order in the following terms: The general rule is that it is the duty of those who are subject to an order of a court to strictly observe the terms of the order: see Borrie and Lowe The Law of Contempt 3rd ed 1996, at 559-560; Arlidge, Eady & Smith On Contempt, 2nd ed 1999 at 189. It is not necessary for a court to prescribe the manner in which the required result is to be achieved; it is sufficient if the court clearly specifies that a respondent is to carry out a particular course of conduct: see Concrete Constructions Pty Ltd v Plumbers and Gasfitters Employees Union (No 2) (1987) 15 FCR 64 at 72-73 per Wilcox J. The order must specify with certainty the result to be achieved but it is not for the applicant to suggest, or for the court to prescribe, a particular method of compliance. In this case it is the duty of Hughes to find out and implement proper means of obeying the order. Whether the duty imposed on those subject to a mandatory or prohibitory order is one duty or two, they are simply stated: to strictly observe the terms of the order and to find out and implement proper means of obeying the order. 12 To establish contempt, it is not necessary to prove any subjective intent to deliberately disobey the order: see Stancomb v Trowbridge Urban District Council [1910] 2 Ch 190 at 194 and Hughes at [20]. In Australian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 113, Gibbs CJ, Mason, Wilson and Deane JJ stated: ... lying behind punishment for a contempt which involves wilful disobedience to a court order, is the very substantial purpose of disciplining the defendant and vindicating the authority of the court. In our view the reasons supporting the recent decisions are compelling and they should be accepted by this Court. It follows that a deliberate commission oromission which is in breach of an injunctive order or an undertaking will constitute such wilful disobedience unless it be casual, accidental or unintentional. (Emphasis added). See also Circuit Finance Australia Ltd v Sobbi [2010] NSWSC 789 at [10]. 13 As soon as orders are issued the person bound by that order becomes responsible for taking adequate and continuing steps (Lade & Co Pty Ltd v Black [2006] 2 Qd R 531at [106]) or all possible steps (Heatons Transport (St Helens) Ltd v Transport and General Workers' Union [1973] AC 15 at 113) to comply with the order. If a person bound by an order fails to take such steps to comply with the order, it cannot be said that the conduct was casual, accidental or unintentional.

FACTS 14 What then occurred here? 15 Mr Ali was employed by, or had an interest in, the defendant. The exact nature of the legal relationship between Mr Ali and the defendant does not matter. His "employment" was terminated on 16 October 2009. On 19 October 2009, Mr Ali incorporated Search Point Pty Ltd. Mr Ali is that company's sole director and shareholder. Also on 19 October 2009, Mr Ali exchanged a series of text messages with Mr Bulzomi, then a consultant with the defendant where, in response to direct questions from Mr Bulzomi, Mr Ali stated that he did not have any equipment of the defendant at home other than a pen or two and a laptop and that he had never copied the defendant's database. As will become apparent, the content of those text messages was inaccurate. 16 By an interlocutory process filed by the defendant on 23 November 2009, the defendant sought an order for delivery up of confidential information of the defendant in Mr Ali's possession. By the time of the Application, Mr Ali had admitted to copying the defendant's MYOB data files on 10 October 2009. On the morning of the hearing, 22 December 2009, Mr Ali filed and served an affidavit in which he also admitted to making a copy of the FileMaker Pro file on 10 October 2009. Further, at the hearing on 22 December 2009, Counsel for Mr Ali conceded that Mr Ali also had in his possession data files of the Bulzomi Interests which were also copied on 10 October 2009. 17 In fact, prior to his "employment" being terminated and contrary to his text messages, Mr Ali had copied additional information from the defendant's computer server. His subsequent sworn evidence of 16 August 2010 (filed in response to these contempt proceedings) was that: From recollection, in early 2009 I had copied the Premier 12 MYOB program folder from the Collection Point server onto a CD as a back up, in case the computer crashed and all of the programs were lost. I kept this CD at the Collection Point offices. When I left Collection Point I believe that I took this disc home with me together [with] other materials. At the time that I took the disc with other materials from the office of Collection Point, it had completely slipped my mind that it had any information on it from Collection Point's computers. I did not look at the contents of the disk when it was in my possession. Sometime after I took the disk and other materials from Collection Point to my home, I believe that my brother must have taken the disc into his room believing it to be unused as it did not have any markings on it. I do not know when the disc was last in my possession and it went into my brother's possession. I do not recall seeing the disc when I destroyed the materials in December 2009 and April 2010. I do not have any other copies of the disk. 18 The December 2009 Order (see [2] above) required Mr Ali to provide to the Court and to an independent person appointed by the Court the files described in that Order, and then otherwise destroy and confirm on oath that he had destroyed the FileMaker Pro Programs and data files of the defendant and the MYOB data files of the defendant, of ZacXan Pty Ltd and of T Bulzomi Financial and Legal Services: see [2] above. 19 On 24 December 2009, Mr Ali affirmed that: 2. I make this affidavit pursuant to the orders of the court made this date and in particular orders numbered 4 and 5 thereof. 3. I hereby declare and affirm that I will have provided to the court by 4pm this day copies of each of the following documents that I copied form (sic) the defendant's computer server on 10 October 2009, namely: a. the File Maker Pro program and data files of the defendant; b. the MYOB data files of the defendant; c. the MYOB data files of Zacxan Pty Ltd; and d. the MYOB data files of T Bulzomi Financial and Legal Services. 4. I hereby declare and affirm that I have otherwise destroyed all of the data files referred to in paragraph 3 thereof. 20 The December 2009 Order (see [2] above) required Mr Ali to deliver the identified data to the Court and to an independent person. On 15 February 2010, Mr Ali collected from the Federal Court one of the jump drives he had previously produced to the Court pursuant to the December 2009 Order. The fact that his solicitor permitted that to occur was surprising, especially having regard to the terms of the December 2009 Order. 21 In any event, on 31 March 2010, the Bulzomi Interests filed a Notice of Motion seeking to recover the files the subject of the December 2009 Order, including any copies provided to the independent person. An affidavit sworn on 14 April 2010 was prepared by Mr Ali in response to that Notice of Motion and relevantly provided: Since complying with the Orders of the Court made 22 December 2009 as I deposed in that Affidavit, I have not had access [to] or held or generated any of the data files referred to in paragraphs 1 to 4 of the Notice of Motion [returnable before the Court on 15 April 2010]. As the events just described make clear, that was not an accurate statement. He still held the files he had copied in early 2009 and, at least for a short period of time, he had held the data files when he collected the jump drive. 22 Events moved on and, on 1 August 2010, the defendant applied ex parte for a search order pursuant to O 25B of the Federal Court Rules against Mr Ali and his company, Search Point Pty Ltd. That application was supported by an affidavit sworn by Mr Domenico Giovanni Crupi, the sole director of the defendant. The affidavit described the FileMaker Pro Program and data files and the MYOB program and data files located on the defendant's computer servers. The affidavit also deposed to the following conversations on 21 July 2010 between Mr Crupi and Mr Ali: [29] During a short period when the matter was stood down [in the Federal Court], I had a private meeting with Mr Ali at his request. During the meeting, there was a discussion about the winding up of [the defendant]. In our discussion, I said words to the effect to Mr Ali that if [the defendant] was wound up there would be no money left for anyone, including himself. In response, Mr Ali said words to the effect that he did not care if [the defendant] was wound up. I asked him why he didn't care. Mr Ali said words to the effect that as [the defendant] is the biggest money retrieval business, not having it around as a competitor would be better for him. Mr Ali then said that he still had the data files and he said "no fucking way would I get rid of that shit. That's gold to start up business." … [30] Later that evening, at approximately 10:00pm, Mr Ali contacted me on my mobile phone. Mr Ali repeated that he was going to have [the defendant] wound up because he said that he "didn't need a competitor that big". Mr Ali also admitted, once again, … that he still had all of [the defendant's] data files. Mr Ali said words to the effect that he had everything he needed to start business again. … 23 On 2 August 2010, a Penal Notice was issued by the Federal Court authorising, inter alia, the entry and search of two identified premises (the business and residential premises of Mr Ali) and removal from the two identified premises of the following "listed things": 1. All documents, articles and materials (whether in hard copy or electronic form) containing FileMaker Pro program data belonging or relating to Collection Point Pty Ltd or derived from such documents, articles and materials (whether in hard copy or electronic form); 2. All documents, articles and materials (whether in hard copy or electronic form) containing MYOB program data belonging or relating to Collection Point Pty Ltd or derived from such documents, articles and materials (whether in hard copy or electronic form); 3. All documents, articles and materials which relate to the extent that Collection Point Pty Ltd resources have been used in the development and business operations of Search Point Pty Ltd; 4. Backup copies of data or other information made from Collection Point Pty Ltd computers; 5. All documents, notations and materials which relate or may relate to any communications, contact or negotiations with any persons which utilise information or materials gained through MYOB or FileMaker Pro program date (sic) belonging to Collection Point Pty Ltd; 6. Any documents or articles relating to or which reproduce or were derived from FileMaker Pro templates created and developed by Collection Point Pty Ltd; 7. Any other documents which relate to or may relate to the use or intended use of FileMaker Pro and or MYOB program data belonging to Collection Point Pty Ltd; 8. All computers, computer disks or other storage devices containing or that may contain any information described in paragraphs 1-7. 24 During the search of Mr Ali's residential premises, a CD bearing no handwritten annotation, but containing a number of files, was located in a box of other computer disks in the bedroom of Mr Ali's brother. Two of the files on the CD were MYOB files of ZacXan Pty Ltd and T Bulzomi Financial and Legal Services together with two enabling files required to run the two MYOB files (the CD). 25 At the hearing of the Notice of Motion for his punishment for contempt, Mr Ali admitted the following facts: 1. following the termination of his employment with the defendant on 16 October 2009, he incorporated Search Point Pty Ltd on 19 October 2009. He is the sole shareholder and director; 2. in June 2010, he decided to set up his own money finder's business and then leased premises in Collins Street, Melbourne, purchased a licence for a FileMaker Program as well as a MYOB program and from July 2010, employed staff and commenced trading; 3. the CD found at his residential premises did contain MYOB files of ZacXan Pty Ltd and T Bulzomi Financial and Legal Services together with two enabling files required to run the two MYOB files; and 4. he had copied the information on to the CD from the defendant's server one Saturday night in early 2009. 26 Mr Ali's evidence was that (1) he did not know when the CD was last in his possession, (2) he did not recall seeing the CD when he destroyed the other materials in December 2009 or in April 2010 when the issue was again raised and (3) it had completely slipped his mind that the CD existed and had information on it from the defendant's computers. Specifically, Mr Ali's sworn evidence was that: 33. When I made the backup of the MYOB program, I did not check the contents of the Premier 12 folder and I was completely unaware that this folder contained the data of Bulzomi and Zacxan. 34. Following the making of the various orders by the court in December 2009 and subsequently in April 2010, I searched all of my computers and possessions and destroyed the data materials that I have deposed to as having destroyed. However, I was unaware that the CD that was located in my brother's room or that the CD still existed or that it contained any data otherwise I would have destroyed that CD as well. 35. I was present on 3 August 2010 when they were checking the computers and disks. This CD was the last disk that was checked by the Independent Computer Experts. Mr Caldwell told the independent solicitor and Mr Scott that there was information of T Bulzomi and Zacxan on the CD. This was a surprise to me as I had no recollection of this CD or it's (sic) contents. I did not copy this information onto the CD in October 2009. From the index to the CD, it appears this information relating to T Bulzomi and Zacxan was burnt onto the disk on 18 July 2009. 36. It is only from this information that I have been able to refresh my memory about the circumstances in which this CD was created and that this is not the information that I gave to the court and the expert, which was information that I had copied from the Collection Point server in October 2009. If I had known this information still existed I would have destroyed it in accordance with the court's orders. (Emphasis added). 27 Before addressing the particular contempt charge, it is also necessary to address additional evidence of Mr Crupi and a Mr Scott Babington, evidence which was not relied upon by the defendant when it applied ex parte for the search order. In addition to his evidence of the conversation outside a Federal Court courtroom on 21 July 2010 (see [22] above) which Mr Crupi relied upon in support of the search order, Mr Crupi provided further sworn evidence on 1 September 2010 and gave viva voce evidence on 11 October 2010 about additional matters that were said by Mr Ali to him during the course of that meeting. His evidence to the Court was: Mr Ali told me that when we went in there - the whole story was, when we went in there Mr Ali started telling me that, you know, I should get away from Tony Bulzomi, because he was bad, he had done all these bad things, he was ripping off the company and I basically said, "Look, we're here to settle this matter." And he said, "Look, if you come with me - come to my office this afternoon I'll show you what I've still got. I've still got all his files. I've got everything of Tony Bulzomi's." And I said, "What do you mean? You were supposed to destroy all that information?" He said, "No, nobody's going to tell me to destroy it. I've still got everything and I can show you. He's ripping you off and with what I've got I'll be able to bury him with the State Revenue Office, some ongoing case that he's got on." And I kept saying, "You shouldn't have any of this information." He says, "Nobody's going to tell me to get rid of any of that information. I've got everything that I took." What he told me is the original disc that he took, he said to me, "I've still got the original, okay. I made copies for the court and that's what I handed back." I was dumbfounded. I said, "So you still must have Collection Point's too?" "I've got everything," he said. … 28 In cross examination, Mr Crupi was challenged about this conversation. It was put to him that it was recent invention, that he was giving the evidence as some kind of vendetta and that his recollection of the words used by Mr Ali was inconsistent. For example, at one point Mr Crupi said he believed that Mr Ali said "MYOB". That aspect of his evidence in cross examination did not appear in any of his previous affidavits or in the version of the conversation that he gave in evidence in chief. He ultimately sought to retract the statement by saying that he "can't remember now, but [he remembered] he said he had all his files". 29 Mr Crupi was also challenged about why he failed to disclose the additional aspects of the conversation of 21 July 2010 in his earlier sworn evidence. Mr Crupi's response to this was that he informed his solicitors of the entire conversation (including the aspect concerning the Bulzomi Interests), but he was advised by his solicitors that as the proceedings concerned only his company (the defendant), his evidence should be limited to the conversation as it concerned the defendant. 30 Mr Ali gave sworn evidence and was cross examined about his conversation with Mr Crupi on 21 July 2010. He denied that the statements Mr Crupi attributed to him were correct. His evidence was that at no stage did he say he had Mr Bulzomi's files, or that those files would help the State Revenue Office "put [Mr Bulzomi] away for 10 years". 31 The conversation with Mr Crupi is not the only conversation relied upon by the Bulzomi Interests. Mr Babington, a debt collection manager employed by the defendant, also gave evidence. He had not given evidence in support of the application for a search order. In an affidavit sworn on 1 September 2010 he stated: On 2 August 2010 I was walking to the post office with another Collection Point employee and saw [Mr Ali] in an alleyway. [Mr Ali] started "mouthing off" at me and said words to the effect that "Tony, Collection Point and I were all "fucked"." He informed me that he still had Tony's files and that the court could not make him give the files up. … He then told me that he would still "get" Tony with the data he had and that he would spread the information everywhere to "anyone who would listen" including all over the internet and would also provide it to the Australian Taxation Office. He also referred to the recent court orders and said words to the effect that "even though Tony had won in relation to the return of his files, the Court was not going to make him give anything back". 32 Mr Babington was cross examined about the incident. In response to a suggestion that his evidence was a reconstruction rather than direct recollection, Mr Babington rejected that assertion and stated that he remembered Mr Ali specifically telling him to go back and tell Mr Bulzomi that he (Mr Ali) still had all of his data and files. He was cross examined as to why this information was not included in his affidavit, to which he responded that he did not know why it was not included, but "that's what happened". Mr Babington accepted that Mr Ali did not refer to MYOB, ZacXan or T Bulzomi Legal & Financial Services. It was also put to Mr Babington that his recollection of the conversation was recent invention. Mr Babington rejected that assertion forcefully. 33 The evidence of Mr Babington was corroborated by Mr Bulzomi. Specifically, Mr Bulzomi confirmed in cross examination that Mr Babington relayed the contents of the altercation to him later that afternoon. 34 Mr Ali gave evidence and was cross examined on the incident with Mr Babington. Mr Ali does not dispute that the altercation took place and did not dispute some aspects of Mr Babington's recollection of the altercation. He admitted, for instance, that he said to Mr Babington that "Collection Point is fucked". He denied that he had made threats against Mr Bulzomi in the terms alleged by Mr Babington and he denied that he knew at the time of his altercation with Mr Babington that he still had copies of the data files (in the form of the CD) the subject of the December 2009 Order. As noted earlier, Mr Ali's evidence during cross examination was that he downloaded the MYOB program files on the CD on a Saturday night in early 2009 completely unaware that the folder (Premium 12) contained data of T Bulzomi Financial and Legal Services and ZacXan Pty Ltd.

ANALYSIS 35 It was common ground that in order to prove contempt, proof beyond reasonable doubt of the matters identified in [9] above was required: Witham at 534 and Advan Investments Pty Ltd v Dean Gleeson Motor Sales Pty Ltd [2003] VSC 201 at [31]. 36 Mr Ali expressly accepted, and I am satisfied beyond reasonable doubt, that the December 2009 Order was made by the Court (see [2] above), that he was served with a copy of the Order and that he had knowledge of the terms of the December 2009 Order. 37 Therefore, two issues remain. First, whether the terms of the December 2009 Order were clear, unambiguous and capable of compliance and, if so, whether the conduct described amounts to contempt (i.e. whether I am satisfied beyond reasonable doubt that the facts constituted a deliberate breach of the December 2009 Order by Mr Ali).

Was the December 2009 Order clear, unambiguous and capable of compliance? 38 Mr Ali submitted that the December 2009 Order was not clear, unambiguous and therefore capable of compliance. 39 In particular, Mr Ali submitted that the "proper construction of the Court's orders" is that the "orders concerned the data obtained by Mr Ali from the Collection Point server on 10 October 2009". Hence, the CD found as a result of the execution of the search order "on no view could … be the data referred to in the [December 2009 Order]". I reject that contention. 40 As noted earlier (see [2] above), the December 2009 Order relevantly required Mr Ali to provide to the Court and otherwise destroy two files, the MYOB data files of ZacXan Pty Ltd and the MYOB data files of T Bulzomi Financial and Legal Services (the files). The Order does not specify that Mr Ali destroy the files obtained on a certain date. If the construction of the December 2009 Order contended for by Mr Ali was the correct construction, the words "and otherwise destroy" would be superfluous. Moreover, Mr Ali himself conceded in his sworn evidence that if he had recalled that he had the CD, he would have destroyed it in accordance with the December 2009 Order: see [26] above. 41 Mr Ali further submitted that as the only data files discussed between the parties prior to and at the hearing on 22 December 2009 (which resulted in the December 2009 Order) were those copied by Mr Ali on 10 October 2009, it is only those specific files that were the subject of the December 2009 Order. Having regard to the proper construction of the December 2009 Order, it is unnecessary to separately address this submission. However, for the sake of completeness, it is rejected. Whether the files were taken from the defendant's server in early 2009 or on 10 October 2009 is irrelevant. If Mr Ali had the files in his possession in more than one location, even if obtained at different times, the December 2009 Order required him to provide them to the Court and otherwise destroy them. At all times throughout these proceedings the concern has been Mr Ali's possession of data belonging to the defendant and the Bulzomi Interests that does not belong to him. When that data was obtained is irrelevant. 42 Finally, the allegation that Mr Ali was unaware of the contents of CD may be relevant to whether there was a breach of the December 2009 Order, but it is not relevant to whether the December 2009 Order was intended to cover the files. Put simply, if the December 2009 Orders were intended to be limited to the data copied by Mr Ali on 10 October 2009, the Orders would have said so. They did not. While it is true that the only files known to the defendant, the Bulzomi Interests and the Court in December 2009 were the files copied on 10 October 2009, the Orders required any and every copy and form of the files to be delivered up and otherwise destroyed. The Orders were clear, unambiguous and capable of compliance.

Did Mr Ali breach the terms of the December 2009 Order? 43 The Bulzomi Interests submitted the following facts and matters were sufficient to prove, beyond reasonable doubt, that Mr Ali breached the December 2009 Order and was guilty of contempt: 1. The December 2009 Order (see [2] above); 2. The Affidavits of Mr Ali of 24 December 2009, 14 April 2010 and 16 August 2010 (see [16] to [23] above); and 3. the CD seized pursuant to the execution of the search order (see [24] above). The Bulzomi Interests submitted that these facts alone were sufficient to prove their case beyond reasonable doubt. However, the Bulzomi Interests submitted that there was the additional evidence of Mr Crupi and Mr Babington that further demonstrated Mr Ali's deliberate breach the December 2009 Order. 44 On the other hand, Mr Ali submitted that I could not be satisfied beyond reasonable doubt that (1) there had been non compliance with the December 2009 Order and (2) if there had been non compliance, that non compliance was deliberate. In respect of the last issue, Mr Ali submitted that I should find that the non compliance (if any) was "casual, accidental or unintentional". 45 The first issue raised by Mr Ali - that I could not be satisfied beyond reasonable doubt that there had been non compliance with the December 2009 Order - was based on the contention that the CD seized during the execution of the search order was not before the Court. The issue arose because in response to a notice to produce directed to the defendant's solicitors to produce the CD seized during the execution of the search order, the solicitors produced a CD bearing the words "Ferrier Hodgson". On no view was that the CD seized during execution of the search order. In the end, I do not accept that the failure of the Bulzomi Interests to tender the CD seized during execution of the search order is fatal. The reason for that conclusion is simple. Exhibited to the affidavit sworn on 16 August 2010 by Mr Ali was a copy of the index to the CD seized during the execution of the search order. That exhibit lists the following files as being part of the files contained on the CD: Name Size Type Date Modified Location T_BULZOMI LEGAL & FINANCI 64KB BOX File 2/06/2009 4:26PM Files Currently on the CD T_BULZOMI LEGAL & FINANCI 2,624KB MYO File 2/06/2009 4:26PM Files Currently on the CD ZACXAN2PTY LTD box 64KB BOX File 24/10/2008 3:58PM Files Currently on the CD ZACXAN2PTY LTD MYO 1,760KB MYO File 24/10/2008 3:58PM Files Currently on the CD

The contents of these files are irrelevant. As Mr Ali stated in two affidavits, if he had been aware of that data on the CD, he "would have destroyed that CD as well" in accordance with the December 2009 Order. That admission is not surprising - that was what the December 2009 Order required him to do. 46 That brings me to the next issue -is the Court satisfied beyond reasonable doubt that the facts constituted a deliberate breach of the December 2009 Order by Mr Ali? 47 On this issue, the critical evidence was the evidence of Mr Crupi and Mr Babington. Each gave evidence of statements allegedly made by Mr Ali which, if made, demonstrated beyond reasonable doubt that his retention of the relevant files was a deliberate act rather than a casual, accidental or unintentional act. The evidence of each of Mr Crupi and Mr Babington was, as I have earlier noted, subject to some challenge. But in neither case did the challenges that were made detract from the otherwise clear, direct and honest manner in which the witness gave his evidence. I recognise, of course, that Mr Ali denied, in his testimony in this application, that he made the statements. I recognise that he denied in his testimony that he deliberately disobeyed the Court's order. In the end, however, despite Mr Ali's denials, I accept the evidence of Mr Crupi and Mr Babington that Mr Ali made statements to the effect that he had retained the files about the Bulzomi Interests that the December 2009 Order had obliged him to deliver up and otherwise destroy. The information to which Mr Ali was referring in these conversations either was, or at least included, the files that were contained on the CD that was found at his residential premises. I am satisfied, beyond reasonable doubt, that Mr Ali's retention of the CD was a deliberate breach, and therefore wilful disobedience, of the Court's December 2009 Order. Mr Ali's conduct was not casual, accidental or unintentional: Mudginberri at 112-113.

PENALTY 48 That brings me to the appropriate penalty. Although the parties made some submissions on this issue, it is appropriate that Mr Ali have further opportunity to make any further submissions he wishes to make. In the circumstances, the Notice of Motion filed by the Bulzomi Interests will be adjourned for further hearing at 9:30am on 29 October 2010. There will be a direction that any further evidence or written submissions of Mr Ali on the question of penalty are to be filed and served on or before 4:00pm on 25 October 2010. Costs will be reserved. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon.