Facts
9 Against that legal background, I turn now to the facts of the present case. In an affidavit filed on 12 June 2008, Mr Hatz admits that he engaged in the conduct alleged, but states that the non-compliant beds have either already been or will be recalled and collected by Hercules. An ACCC investigator, Mr Colin Pennell, also deposed in an affidavit filed on 6 May 2008 that Mr Hatz admitted to him in a telephone call on 12 March 2008 that Mr Hatz had been involved in Hercules' supply of possibly non-compliant beds.
10 Further evidence was adduced, by way of invoices, consignment notes, letters of instruction, additional affidavits from ACCC investigators, affidavits from process servers, affidavits from employees of Sydney's Furniture and Thriftway Furniture, and affidavits and reports from an independent testing laboratory, Australasian Furnishing Research and Development Institute Limited ("Furntech"), to establish that:
1. the beds were supplied by Hercules after the Orders had been entered and served upon the respondents;
2. those beds did not in fact comply with the Prescribed Standard; and
3. the chain of custody was intact (i.e. the beds that were tested for compliance were the same beds that were supplied after entry and service of the Orders and their condition had not been changed from the time of delivery to the time of testing).
11 I will not recite in further detail the ACCC's evidence supporting the three factual propositions set out above because the respondents failed to dispute that evidence, either by way of cross-examination or positive evidence of their own. In fact, in an affidavit sworn on 30 July 2008 by Mr Hatz ("the July Hatz Affidavit"), he admitted that "a small number of non-complying Bunks that remained in my warehouse … were mixed together with the new complying bunks" and subsequently delivered to Sydney's Furniture and Thriftway Furniture. Accordingly, it suffices to say that I am satisfied beyond a reasonable doubt that the facts are as alleged by the ACCC and summarised in [10].
12 That being the case, there are two remaining issues: first, whether the conduct described amounts to contempt (i.e. whether I am further satisfied beyond a reasonable doubt that those facts constitute a deliberate breach of paragraphs 14 and 15 of the Orders by the respondents); and secondly, if it is contempt, what is the appropriate penalty.
13 With respect to the first issue, it is not in dispute, and I am satisfied beyond a reasonable doubt, that the respondents were served with, were aware of and understood the Orders and, in particular, they were aware of the consequences of a deliberate breach of those Orders.
14 The question which then arises is whether I am satisfied beyond a reasonable doubt that the conduct (the supply of the non-complying beds to Sydney's Furniture and Thriftway Furniture) was "deliberate defiance or, as it is sometimes said, if it is contumacious" or was "casual, accidental and unintentional": see [5] - [8] above.
15 The respondents contended by reason of the contents of the July Hatz Affidavit that I could not be satisfied beyond reasonable doubt that non-compliance with the Orders was deliberate and that I should find that the non-compliance was "casual, accidental and unintentional". I reject that contention. First, despite repeated extensions of time granted to the respondents to file and serve material directed to the issue of non-compliance with paragraphs 14 and 15 of the Orders, the July Hatz Affidavit addresses why there was non-compliance with those orders in the following terms:
In relation to the Bunks supplied after 5 February 2008, all those delivered to Sydney Furniture, Michael's Furniture and Thriftway ... have been collected by the First Respondent. In relation to those Bunks, there were a small number of non complying Bunks that remained in my warehouse which, accidentally and unintentionally, were mixed together with the new complying Bunks. Once this was discovered, the procedures that were put in place to ensure compliance comprised:
(a) All non-complying Bunks were disposed of;
(b) Once new Bunk components had been manufactured, they were taken into the packing area and physically checked for quality purposes …
Counsel for the Respondents submitted that the "small number" of non-complying bunk beds was limited to 6. There is, in fact, no evidence of the number of non-complying beds supplied after 5 February in breach of the Orders.
16 In any event, the "explanation" provided by Mr Hatz on behalf of both respondents is deficient in a number of critical respects. First, no evidence was provided of the steps put in place to ensure compliance with the Orders made on 5 February. In the absence of such evidence, I am entitled to assume that no steps were put in place at that time. Consistent with the authorities, that itself is sufficient for a finding of contempt.
17 However, there are other additional reasons why I am satisfied beyond reasonable doubt that that is the correct finding. The "explanation" establishes that despite the Orders, non-complying Bunks remained in the respondents' warehouse. The Bunks were non-complying because they failed to comply with the Prescribed Standard. The Bunks were a risk to the safety of the children using them. This was a serious matter. Why those Bunks remained in the warehouse was never explained. How those non-complying bunks were "mixed together" with the new bunks was never explained. The non-complying bunks simply should not have been there or should have been identified in a manner which prevented such a "mix up".
18 Finally, the steps ultimately taken after the breach of the Orders was established and referred to by Mr Hatz (see [15] above) are steps that, on any view, should have been taken on 5 February 2008. If they had been taken (namely disposal of non-complying bunk beds and physical inspection of new beds), at least this aspect of the matter would not be before the Court. They are not steps which are extraordinary or, it would seem, costly.
19 It is true that Mr Hatz voluntarily confessed the conduct to the ACCC, and I also accept that he has shown some willingness to recall the offending products and make amends to affected customers. However, having regard to the facts just outlined, I consider that those factors go more properly to the issue of penalty rather than the success of the contempt case itself. Accordingly, I am satisfied beyond reasonable doubt that the conduct complained of constitutes deliberate conduct amounting to civil contempt under the authorities referred to earlier: see also ACCC v INFO4PC.com Pty Ltd (2002) 121 FCR 24 at [10].