Consideration of Mr Abdulkader's conduct
29 Mr Abdulkader's conduct may readily be seen to be in the more serious category of contempt of court, as a clear, planned and deliberate disobedience of orders of the Court that were well known to him. His culpability for what he did could not have been much higher. His motive was to retain and sell valuable goods for commercial gain, rather than comply with a court order to surrender them and forgo that gain. He therefore undoubtedly sought to gain a real and valuable benefit from the contempt, perhaps perversely to the point where it may be seen to have blinded him from properly considering or fully appreciating the nature and character of what he was doing.
30 Although initially sceptical, I am satisfied that Mr Abdulkader has expressed genuine contrition, both from the floor of the court before Perram J and by way of evidence before me. I note again, however, that Mr Abdulkader was caught red-handed, which does, to an extent, offset that consideration.
31 Mr Abdulkader's proven character and antecedents stand strongly in his favour. While, as noted below, his age is unexceptional, he is not just a man who apparently works hard and is a contributing member of society, but also someone who takes his responsibilities to family and extended family seriously and lends real and substantial support to them.
32 The key issues to determine in arriving at an appropriate sentence in this case boil down to:
(1) whether or not Mr Abdulkader's contempt could and, if so, should, be regarded as defiant or contumacious;
(2) the need for specific deterrence; and
(3) the need for general deterrence.
33 As to whether or not Mr Abdulkader's contempt could be regarded as defiant or contumacious, his counsel relied upon two arguments in favour of finding that it was not.
34 First, counsel for Mr Abdulkader pointed to the absence of an allegation in the amended statement of charge to that effect. That is not an attractive argument. I do not consider that it is necessary for a state of mind of that kind, which is not a necessary element of the charge for the purposes of conviction at trial or in response to a plea, to be expressly pleaded; it is a circumstance of aggravation on sentence when the essential elements for guilt have been proven or admitted: Construction, Forestry, Mining and Energy Union v Grocon Constructors (Victoria) Pty Ltd [2014] VSCA 261; 47 VR 527 at [299]-[300]. As was pointed out by the Full Court in Kazal at [27]:
A charge of contempt, when it refers to defiance of an order of a court, is required at least to allege a particular order was breached, and what was allegedly done to constitute that breach, in the manner of, but not the same as, a criminal charge or indictment. It does not require particular terms of art.
35 Provided that the accused person has a reasonable opportunity to meet any allegation that the conduct constituting the contempt was contumacious, as happened in this case, it is open to the Court to make a determination as to whether the contempt may properly be seen as having that character.
36 Secondly, counsel for Mr Abdulkader relied upon case law in which a subtle but critical distinction is drawn between a deliberate breach of an order of a court, and a breach that is also defiant or contumacious. In Louis Vuitton Malletier SA v Design Elegance Pty Ltd [2006] FCA 83; 149 FCR 494, Merkel J observed at [23]:
In respect of charges 4, 6 and 9 I am not satisfied beyond reasonable doubt that the respondents' conduct was defiant or contumacious. Although Maskiell's conduct was deliberate, it was driven by short sighted financial motives in the hope that she would not be detected. Having regard to all of the evidence, I entertain a reasonable doubt about whether her conduct was intended to be defiant or disrespectful of the Court.
37 Although, at first, that observation seems at odds with Merkel J's prior statement of principle at [6] in Louis Vuitton, it is probably better read as an earnest endeavour by his Honour to apply those principles to the case at hand. His Honour had said in Louis Vuitton at [6]:
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 Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 106-107 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 at 530. As is apparent from the Statement of Charge, Louis Vuitton is alleging both civil and criminal contempt. However, as all proceedings for contempt are now regarded as criminal in nature, all of the charges must be proved beyond reasonable doubt: see Witham at 534.
38 The distinction between so-called civil and criminal contempt was considered in some detail in Kazal as follows:
21 The distinction still maintained between civil and criminal contempt is "in significant respects illusory": Witham v Holloway (1995) 183 CLR 525 at 534.3. The criminal standard of proof applies to both following Witham. However the technical distinction remains and applies to these proceedings because charges 3 and 5 (and charges 6 and 7) may be seen to allege civil contempt while charges 8 and 9 may be seen to allege criminal contempt. Nothing turns on the distinction save as to the issue taken on appeal as to the finding that the appellant's breaches were contumacious. The distinction was summarised by Brennan, Deane, Toohey and Gaudron JJ in Witham at 530.4 (footnotes omitted):
In general terms, the distinction between civil and criminal contempt is that a civil contempt involves disobedience to a court order or breach of an undertaking in civil proceedings, whereas a criminal contempt is committed either when there is a contempt in the face of the court or there is an interference with the course of justice. However, disobedience or breach of an undertaking amounts to a criminal contempt if it involves deliberate defiance or, as it is sometimes said, if it is contumacious. As well, in the case of some orders, described in Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd as involving "arbitrary classification", disobedience constitutes criminal contempt. They are orders forbidding interference with a ward of court, orders for the delivery up of a child and non-molestation orders. And it has been held that breach of a court order by a solicitor or by a liquidator is also a criminal contempt.
22 It was further observed in Witham at 531-2 (quoting Windeyer J in Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 at 498) as to the historic basis for the distinction:
(1) Civil contempt was remedial or coercive, used primarily to compel obedience in support of a private interest of the party in whose favour the order was made, rather than punish for disobedience, in which case the contempt could be purged by apology and reparation. As was pointed out at 532.3, quoting longstanding United States authority, the remedial or coercive approach can be explained by the notion that those in "breach of an order or undertaking 'carry the keys of their prison in their own pockets'."
(2) Criminal contempt was in the public interest to vindicate judicial authority or maintain the integrity of the judicial process.
23 This distinction between civil and criminal contempt was not regarded as being satisfactory in Witham, having regard to such considerations as disobedience not being able to be remedied in all cases, and there being in any event a public interest in court orders being obeyed. There was no easy or bright line between remedial or coercive objectives and punitive objectives. It may be in the public interest for contempt proceedings to continue, even if the opposing parties do not seek it. Nothing was achieved by describing some proceedings as punitive and others remedial or coercive, given that punishment is still punishment whatever the motive for imposing it: see Witham at 533-534. Although not forming part of the reasoning in Witham, it may be seen that for both kinds of contempt, deterrence, both specific and general, is a unifying principle informing the appropriate sanction to be imposed.
24 A real distinction remains between contempt proceedings being "essentially criminal in nature", and ordinary criminal proceedings. That is so in many practical respects, especially as to procedure: Witham at 534, quoted with approval by the plurality in Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2015] HCA 21; 256 CLR 375 at 389 [43]; see also the discussion in Boral at 389-390 [44]-[47] as to certain of those enduring important distinctions. That distinction led to the CFMEU as the defendant in Boral being compelled to participate in discovery processes of the Supreme Court of Victoria.
25 The distinction between civil contempt proceedings, criminal contempt proceedings and criminal proceedings was further explained by Nettle J in Boral at 395 [65] (citations omitted):
A proceeding for punishment for contempt constituted by disobedience of an injunction granted in a civil proceeding is not part of the criminal justice system in the sense essayed in Caltex, X7 or Do Young Lee v The Queen. Although "all proceedings for contempt 'must [now] realistically be seen as criminal in nature'", not all contempts are criminal. Failure to obey an injunction is not a criminal offence unless the failure to comply is defiant or contumacious. A proceeding for contempt is not a proceeding for criminal contempt if the proceeding appears clearly to be remedial or coercive in nature as opposed to punitive. A criminal contempt is a common law offence, albeit not part of the ordinary common law. But even a proceeding for criminal contempt is not a criminal proceeding.
26 In Matthews v ASIC [2009] NSWCA 155 at [16], Tobias JA (and previously the trial judge in that case) reproduced with approval the following passage from Metcash Trading Ltd v Bunn (No 5) [2009] FCA 16 at [9], in which Finn J summarised the applicable principles as follows:
… First, the order alleged to be breached must be clear and unambiguous: see Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 at 515-516; and be capable of being complied with: see Australian Prudential Regulation Authority v Siminton (No 7) [2007] FCA 1609 at [40]. Secondly, the proper construction of an order is not a matter of fact but a question of law: Universal Music Australia Pty Ltd v Sharman Networks Ltd (2006) 150 FCR 110 at [19]. Thirdly, it is not necessary for an applicant to prove that an alleged contemnor intended to disobey the order: ibid, at [17]; nor is it necessary to prove that the alleged contemnor understood the true meaning of the terms of an order or that he or she was aware that his or her conduct constituted a breach of the order: Microsoft Corporation v Marks (No 1) (1996) 69 FCR 117 at 143. Nonetheless it may be highly relevant to the question of penalty that the alleged contemnor disobeyed an order because he or she placed a construction on it that was not its true construction: Universal Music Australia Pty Ltd at [38]. Fourthly, 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: Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494 at [6]. Fifthly, the facts in issue in a contempt charge must be proved beyond reasonable doubt: Witham v Holloway (1995) 183 CLR 525 at 534.
39 A contempt is capable of being deliberate, in the sense of being "wilful", without being defiant or contumacious. Pagone J observed in TiVo v Vivo International Corporation Pty Ltd [2013] FCA 1340 at [8]:
It was submitted for Vivo that a finding of contempt required establishing a breach to have been wilful and contumacious in the sense of a "deliberate defiance" of a court order. In this regard reliance was placed upon the definition of "contumacious" in the Macquarie Dictionary as meaning "stubbornly perverse or rebellious; wilfully and obstinately disobedient to authority". However, the word "contumacious" in this context has been used in the narrower sense of "wilfully": Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 111 ("Mudginberri"). Defiant disobedience may no doubt also amount to contempt (see for example Witham v Holloway at 530) but a breach of a court order may be a contempt without needing to establish contumacious behaviour beyond the sense in which the word is used as a synonym of "wilful". In Mudginberri the plurality said at 111-2:
In Steiner Stamp J imposed a fine upon the defendants as punishment for a contempt constituted by breach of an undertaking to the court in a case which was not one which it was "possible to regard as an obstinate disregard" of the undertaking but which was "simply a case of a failure by the company, for no excuse whatever, to carry out the terms of its undertaking". In the course of his judgment, Stamp J pointed out that the Court of Appeal in Fairclough, in expressing the view that it was necessary, in such cases, that the court's "order has been contumaciously disregarded", was using the word "contumaciously" in the narrow sense of "wilfully". Stamp J expressed the conclusion, in support of which he cited the judgments of Chitty J in Attorney-General at the Relation of the Leyton (Essex) Urban District Council v Walthamstow Urban District Council and Warrington J in Stancomb v Trowbridge Urban District Council, that any "disobedience which was worse than casual, accidental or unintentional must be regarded as wilful". His Lordship had earlier indicated that, if the effect of the decision of Stirling J in Worthington was that "nothing short of stubborn opposition to the terms of an order or undertaking amounted to wilful disobedience so as to be punishable by proceedings for attachment", he was not prepared to follow it. In that regard, it is of interest to note that in Mileage Conference the members of the Restrictive Practices Court, who included Megaw J as President and McVeigh LJ, suggested that the approach of Stirling J in Worthington, which they rejected, had resulted from the fact that the only report of Fairclough which had been cited to Stirling J had been "the abbreviated eight-line report in the Weekly Notes, and not the fuller and better report in the Solicitors Journal" and that Windeyer J, in Morgan, had likewise referred only to the report of Fairclough in the Weekly Notes when citing that case and Worthington in support of the proposition that conduct which was "wilful, but not contumacious", was not punishable by fine or sequestration. In Mileage Conference, the members of the Restrictive Practices Court accepted as correct the view of the law expressed by Warrington J in Stancomb, namely, that it is no answer to proceedings for contempt "to say that the act was not contumacious in the sense that, in doing it, there was no direct intention to disobey the order". Thus, it would suffice that the relevant act or omission was wilful even if, in a case where the breach was constituted by an act or failure to act by a servant or agent, the act or omission of the servant or agent was "through carelessness, neglect, or even in dereliction of his duty" (per Warrington J in Stancomb). In Mileage Conference itself, substantial fines were imposed on companies for contempt by breach of undertaking which was not merely non-contumacious but was committed reasonably on legal advice.
(Citations omitted)
40 It was submitted on Mr Abdulkader's behalf that his conduct had not been proven to be contumacious beyond reasonable doubt. In this regard, it was submitted that an inference was available from the statement of agreed facts that Mr Abdulkader had panicked and was motivated by short-term financial gain, as opposed to defiance. This distinction was said to be consistent with Merkel J's observations in Louis Vuitton.
41 Consideration of the characterisation of Mr Abdulkader's conduct as being deliberate but not defiant or contumacious involves a searching inquiry into his motives and thought processes, as well as what he actually did. I have conducted that inquiry, including by having regard to what Mr Abdulkader said to Perram J close to the time of the contempt, and having had that repeated to me in open court so as to better appreciate not just what was said, but how it was said.
42 I am satisfied beyond reasonable doubt that, in deliberately disobeying the Court's orders, Mr Abdulkader was doing so in a spirit of conscious defiance or disrespect of the Court's authority, albeit that he likely saw it as a secondary or less important consideration, perhaps because he perceived it as involving no real risk of being caught. An important part of the reasons for reaching that conclusion include the following:
(1) Mr Abdulkader was in court when the Order was made and consented to it;
(2) the Order was clear and unambiguous;
(3) Mr Abdulkader could not possibly contend that he did not know what he was required to do by the Order, because he organised for partial compliance by delivery up of three pallets of the Goods, while organising for a much greater volume to be placed in storage units hired by him for that purpose;
(4) the contempt was committed in a way that could not be described as being the product of any genuine panic or being carried out on the spur of the moment; and
(5) the motive cannot fairly be described as "short-sighted" - to the contrary it was motivated by substantial financial gain to be made over an unknown, but necessarily not short, period of time.
43 The conclusion that the contempt was defiant or contumacious also sits better with its undoubted character of flagrancy. This was a carefully planned and executed contempt, carried out over the space of a full week. Mr Abdulkader clearly set out to maximise his chances of getting away with defying the Court's orders and obtaining the commercial benefit of the goods that he was required to deliver up. The contempt only ended after a week by reason of the Court's further orders for the storage units and the goods to be secured. There is nothing to indicate that the contempt would not otherwise have continued, with all the Withheld Goods being sold for substantial profit.
44 That said, there is also nothing in evidence before me to indicate that Mr Abdulkader had prior knowledge of the possible trade mark infringements before the court process was served on him on 14 August 2017, two days before the interlocutory hearing that resulted in the Order being made by Perram J. While he was represented in those proceedings, it is evident that he made what was essentially a commercial decision in lieu of compliance, in the relatively short period before first becoming aware of the case being brought against him and his company on 14 August 2017, the orders being made on 16 August 2017, and embarking upon defiance of those orders between 17 and 24 August 2017. While the conduct was planned, it was not planned over a prolonged period of time.
45 Counsel for Mr Abdulkader attempted to gain some traction based on Mr Abdulkader's age. However, at 22, having been married and in the workforce for many years, he is a fully functioning adult and can no longer claim any of the benefits accruing to those of tender years or early adulthood. His real mitigation came from what he did once caught red-handed, doubtless aided by wise and candid legal advice.
46 As observed earlier in these reasons, Mr Abdulkader apologised in open court within eight days of the end of the contravention period. He pleaded guilty less than two weeks later, a week after the charge was laid. This is a weighty consideration when it comes to the troubling aspect of specific deterrence. Significantly, Mr Abdulkader gave instructions to enter into a statement of agreed facts, pursuant to s 191 of the Evidence Act, and did not in any way seek to resile from it, or even to qualify it. That was real and substantial cooperation which must be recognised and encouraged in cases such as this.
47 Independently of Mr Abdulkader's steps directly in relation to the contempt itself and the contempt charges, he gave instructions to negotiate a settlement of costs with Clipsal, reaching agreement within a month of proceedings being commenced and paying $80,000 towards the applicants' costs, which included a sum for the surveillance that detected the contempt.
48 I also take into consideration that Mr Abdulkader agreed to pay the full amount of party/party costs sought by the District Registrar, and that he restated his apology and candid explanation for his conduct, without excuses, before this Court.
49 Absent any of the above features, the sentencing exercise would have required a compelling justification for not imposing a more severe penalty. Absent all or even most of those features, imprisonment with actual time to serve would have been on the table and well able to be justified. Taking all of those features into account, it falls for consideration what sanction is appropriate to meet the need for general deterrence and vindication of the Court's authority that arises in respect of Mr Abdulkader's serious conduct. This includes the fixing of an appropriate quantum of a fine, and consideration of whether a prison sentence should be imposed and, if so, suspended. Having regard to the features above, I am satisfied in the circumstances that there is only a limited need for specific deterrence, but that it remains a relevant consideration and a factor to be taken into account.