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

RELEVANT PRINCIPLES 3 Merkel J outlined the factors relevant to contempt penalties in Louis Vuitton Malletier South Australia v Design Elegance Pty Ltd [2006] FCA 83 at [25] in terms which I adopt: It was common ground between the parties that the following factors, …, are relevant to penalty. 1.5 In deciding the appropriate penalty, a court should consider the following factors: (1) contemnor's personal circumstances; (2) nature and circumstances of the contempt: R v West Australian Newspapers Ltd; Ex Parte DPP (WA) (1996) 16 WAR 518; (3) effect of the contempt on the administration of justice: Durack v Gallagher (1982) 44 ALR 272 at 286-7; (4) contemnor's culpability: Durack v Gallagher (1982) 44 ALR 272 at 286-7; (5) need to deter the contemnor and others from repeating contempt: DPP v John Fairfax & Sons Ltd (1987) 8 NSWLR 732, Kirby P at 741; and (6) absence or presence of a prior conviction for contempt: Attorney-General (NSW) v Macquarie Publications Pty Ltd (1988) 40 A Crim R 405 at 410. However, other criminal history is irrelevant: R v Giscombe (1984) 79 Cr App R 79 at 84. 1.6 In deciding the amount of any fine the Court should take into account the contemnor's financial means: Smith v R (1991) 25 NSWLR 1. The court may also suspend the fine on terms. Contrition and apology 1.7 Genuine contrition and a full and ample apology may also reduce the penalty: R v Gray [1900] 2 QB 36 at 41-2; Superstar Australia Pty Ltd v Coonan & Denlay Pty Ltd (No 2) (1982) 65 FLR 432 at 436. Imprisonment 1.8 It is widely accepted that the court should only impose a term of imprisonment in the most serious criminal contempt cases: Keeley v Justice Brooking (1979) 143 CLR 162 at 179; Gallagher v Durack (1983) 152 CLR 238. 1.9 In Deputy Commissioner of Taxation v Hickey [1999] FCA 259, Carr J held that imprisonment is a "last resort": see also R v Vasin (1985) 39 SASR 45; James (1985) 14 A Crim R 364; Skipper (1992) 4 A Crim R 260. A Court has considerable flexibility in that it may impose a penalty of fines or imprisonment and then suspend such penalty on conditions or terms: see Universal City Studios LLLP v Hoey (2007) 73 IPR 45 at [90]; Pattison (Trustee), in the matter of Bell (Bankrupt) v Bell [2007] FCA 137 at [49].

ADDITIONAL EVIDENCE 4 The Plaintiff was directed to file and serve any further evidence or written submissions limited to the question of penalty by 4:00pm on 25 October 2010. The Plaintiff filed a further affidavit. That affidavit disclosed the following facts and matters: 1. that to the best of his knowledge, information and belief, all copies of files concerning ZacXan Pty Ltd (ZacXan) and T Bulzomi (Bulzomi)have been (presumably now have been) destroyed or returned; 2. the search conducted of his home and business premises as a result of a Penal Notice issued on 2 August 2010 (during which the disk containing files of ZacXan and Bulzomi was located) was intrusive and embarrassing and "severely" affected him; 3. soon after the search, he settled the substantive litigation with the Defendant. He found the litigation emotionally and financially exhausting; 4. he believes he is a good, honest, sincere and respectful person. Exhibited to the affidavit were character references from two solicitors and an accountant. Each of the references discloses that the referee has known the Plaintiff for many years and has found him to be of good character; 5. the costs of the substantive litigation far exceeded the amount the Defendant paid him for his share in the Defendant's business; 6. in the period between October 2009 and July 2010, he earned less than $5,000; and 7. his current financial position is that he has assets comprising an apartment with net equity of approximately $250,000, a Lotus Esprit car valued at approximately $70,000 and his shares in his new company, Search Point Pty Ltd. His liabilities include a debt to the Australian Taxation Office of approximately $100,000. The Plaintiff's income is made up of approximately $2,500 (before tax) per week from his new business and payment of $700 per week from the sale of another business. He has living expenses (including mortgage repayments) of approximately $1,100 per week. No source documents were produced and he did not declare how he funded the litigation in the absence of any income. 5 It is not alleged or demonstrated that Mr Ali has any prior conviction for contempt. Mr Ali has shown no contrition. He has not apologised. His additional affidavit evidence does not address the fact that he had the disk. 6 I will make appropriate declarations in relation to the finding of contempt. In my view, the present case requires more than the making of an order that Mr Ali pay the costs of the proceedings coupled with the imposition of some otherwise nominal penalty. There are two principal reasons for that conclusion: considerations of specific deterrence and considerations of general deterrence. When orders are made by a Court for a person to deliver up "and otherwise destroy" particular information in their possession, the Court is entitled to expect that the order will be complied with. Here, it was not and the seriousness of the offence was made worse by the fact that the Plaintiff bragged to others that he had the information and intended to use it to destroy his opponent: see Ali (No 2) [2010] FCA 1125, in particular at [27] - [34]. I accept he did not disclose the information to any third party. 7 Mr Ali must pay the costs of the application. The decision to award costs on an indemnity basis in contempt cases is a discretionary one. I would not order costs on an indemnity basis: Construction, Forestry, Mining and Energy Union v BHP Steel (AUS) Pty Ltd (2003) 196 ALR 350 at [6] - [11]. There is a link between the award for costs and the penalty for contempt. 8 Although the Bulzomi interests sought the imposition of a term of imprisonment, I do not consider that this case warrants such a penalty. In the circumstances of this case, I consider that the penalty of a substantial fine and an order that Mr Ali pay costs is the appropriate penalty. I fix the amount of that fine at $20,000. I direct that the fine be paid within 28 days. I will make ancillary orders dealing with payment terms and enforcement. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gordon.

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