Clipsal Australia Pty Ltd v ACN 134 468 205

ORDERS NSD 2537 of 2013

BETWEEN: CLIPSAL AUSTRALIA PTY LIMITED (and another named in the Schedule) First Applicant

AND: ACN 134 468 205 PTY LTD (FORMERLY CLIPSO ELECTRICAL PTY LIMITED) (and others named in the Schedule) First Respondent IN THE APPLICATION FOR CONTEMPT:

BETWEEN: DISTRICT REGISTRAR Applicant

AND: NAFEZ ABDULKADER Respondent

JUDGE: BROMWICH J DATE OF ORDER: 21 DECEMBER 2017

1. The fourth respondent, Nafez Abdulkader, be convicted on the charge of contempt contained in the amended statement of charge filed on 14 September 2017.
2. The fourth respondent, Nafez Abdulkader, be sentenced to a term of imprisonment for three months, to be suspended forthwith, conditional upon compliance with the remaining orders below.
3. The fourth respondent, Nafez Abdulkader, pay a fine in the sum of $40,000 within six months of the making of these orders.
4. The fourth respondent, Nafez Abdulkader, pay the District Registrar's costs in the sum of $25,163.80 within three months of the making of these orders.
5. The fourth respondent, Nafez Abdulkader, have leave to apply, by written submissions and detailed supporting evidence by affidavit, for a variation of the time by which the fines and costs ordered to be paid by the above orders must be paid, to be determined on the papers unless an oral hearing is directed to take place.
6. The District Registrar be directed to relist the matter if the fines and costs are not paid within the time stipulated in these orders. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BROMWICH J: 1 This is a sentence for an admitted contempt of court arising from deliberate conduct in knowing breach of orders made by Perram J on 16 August 2017. The defendant to the charge is Mr Nafez Abdulkader, who was the fourth respondent in the substantive proceedings before his Honour. The charge has been brought by the New South Wales District Registrar of the Court at his Honour's direction. 2 On 16 August 2017, Mr Abdulkader and other respondents were ordered by Perram J to deliver to the first applicant, Clipsal Australia Pty Ltd, all goods and promotional material bearing a particular, allegedly infringing, trade mark, which were to be held in storage pending his Honour's determination of final relief. That delivery was required to take place within two days of service of the order. Instead, Mr Abdulkader, while causing a quantity of those goods to be delivered to Clipsal in ostensible compliance with Perram J's order, hired two commercial storage units and, with the assistance of others, placed a large quantity of the goods there for the purposes of subsequent sale for profit. Unfortunately for Mr Abdulkader, that activity was detected by surveillance conducted on behalf of Clipsal. As a consequence, his Honour made ex parte orders for the goods in the two storage units to be secured, seized and delivered up as originally intended. 3 The contempt was serious. It comprised knowing and deliberate defiance of orders made by the Court. If not detected, it would have had, and was clearly intended to have, the effect of depriving the applicants of the full extent of the relief they sought in respect of what were later conceded to be infringing goods. Mr Abdulkader's conduct warranted serious consideration of the ultimate sanction of imprisonment, with time in custody to be served. 4 However, taking all of the objective and subjective circumstances into account, the most important of which were an early apology, an early guilty plea, comprehensive cooperation with the hearing and determination of the charge, pre-payment of Clipsal's costs in the sum of $80,000 (the substantive proceedings having settled), and willing acceptance of responsibility to pay $25,163.80 towards the costs of the District Registrar in bringing the charge, a suspended gaol term and a substantial fine are sufficient sanctions. 5 The balance of these reasons inform and lead to the determination of the duration of the suspended sentence and the quantum of the fine.

Agreed facts 6 The following key facts and circumstances are proven by a statement of agreed facts pursuant to s 191 of the Evidence Act 1995 (Cth). 7 On 13 December 2013, Clipsal and another applicant commenced proceedings in this Court against two respondents other than Mr Abdulkader. Clipsal is relevantly a manufacturer in Australia, and a distributor in Australia and internationally, of certain electrical accessories under two associated trade marks. The first respondent was a company that was an authorised user of Australian trade mark registration 1267136 CLIPSO (CLIPSO mark) until its cancellation in March 2017, and the second respondent was a director and the sole shareholder of that company. 8 In their originating application filed on 13 December 2013, the applicants relevantly sought injunctive relief against the initial two respondents for infringement of their trade marks. 9 On 14 August 2017, the applicants filed an interlocutory application to join Mr Abdulkader, aged 22, his company, TMB Electrical Wholesalers Pty Limited, and two other respondents to the proceedings. Mr Abdulkader was TMB's sole director and sole shareholder. It was his company. TMB at all relevant times offered for sale, sold, distributed, advertised and promoted in Australia goods under or by reference to the CLIPSO mark. 10 By way of their interlocutory application, the applicants also sought an order that Mr Abdulkader be restrained from manufacturing, importing, selling or otherwise dealing in any electrical accessories under or by reference to one of their trade marks or any substantially identical or deceptively similar marks, including the CLIPSO mark. The applicants also sought an order that Mr Abdulkader deliver up to Clipsal all electrical accessories bearing the CLIPSO mark, and all packaging and marketing materials that included that trade mark. 11 On the evening of 14 August 2017, Mr Abdulkader received two folders of documents from the applicants' solicitors, including a copy of the interlocutory orders that the applicant was seeking to have made at a hearing two days later on 16 August 2017. 12 On 16 August 2017, Perram J ordered, inter alia, that Mr Abdulkader deliver up to Clipsal at its business address, within two business days of service of the orders upon him, all electrical accessories bearing the relevant trade mark and all packaging, and all marketing, promotional and advertising materials that included the CLIPSO mark (the Goods) in his possession, custody or control, for storage by Clipsal pending the determination of the applicants' claims for final relief or further order (the Order). 13 At all relevant times, Mr Abdulkader was aware of the terms and effect of the Order. In particular, he was present in Court and was legally represented at the hearing on 16 August 2017 when the Order was made. The Order was made with his consent. There was no issue of Mr Abdulkader not being aware of the Order, nor of what it required him to do. 14 On 18 August 2017, at the direction of Mr Abdulkader, his then legal representative delivered three pallets of the Goods to Clipsal's business premises in purported compliance with the Order. However, between 18 August 2017 and 24 August 2017, Mr Abdulkader retained control of a large quantity of the Goods that were in his company's possession and did not deliver them to Clipsal (the Withheld Goods). 15 In an effort to conceal the Withheld Goods, on 17 August 2017 and 18 August 2017, Mr Abdulkader, on behalf of his company, entered into agreements with Kennards Storage Management Pty Ltd for the hire of two storage units in Guildford, a suburb of Sydney. The two hire agreements signed by Mr Abdulkader were in evidence. 16 Between 17 August 2017 and 23 August 2017, Mr Abdulkader and others moved the Withheld Goods into the two storage units. The Withheld Goods nearly filled the first storage unit, which had a storage capacity of 50.4 cubic metres, and half-filled the second storage unit, which had a storage capacity of 60.4 cubic metres. Photographs of both storage units were in evidence, depicting the Withheld Goods within them. 17 Between 18 August 2017 and 24 August 2017, Mr Abdulkader had access to both storage units and the Withheld Goods stored in them. 18 By 24 August 2017, Mr Abdulkader had not delivered the Withheld Goods to Clipsal, in contravention the Order. 19 On the afternoon of 24 August 2017, an independent lawyer appointed under an order made by Perram J assumed control of the two storage units and the Withheld Goods stored in them. 20 On 1 September 2017, at a case management hearing before Perram J in these proceedings, Mr Abdulkader admitted his non-compliance with the Order and apologised to the Court in the following terms: Mr Abdulkader: Your Honour, just like to apologise for everything, and I would like to own up and apologise about the contempt or disobeying the court's orders, and I did not intend to disobey or go against the court. I'm really sorry for the - anything I've done wrong in regards to the stock that I've kept and my dishonesty. Everything happened so quick. We got it on Monday night. I've never been in court - been called for before. I just panicked, and I made a wrong decision, of course, and it's not excused, but it's what has happened, and I'm really sorry, and I'm willing to do or - whatever it takes to apologise to the court. His Honour: Yes. And what about the applicants? Do you apologise to them? Mr Abdulkader: Yes. Yes. 21 On 14 September 2017, Mr Abdulkader consented on his own behalf and on behalf of his company to all orders sought against them by Clipsal in settlement of the substantive proceedings against them. Mr Abdulkader's company paid $80,000 to Clipsal on account of its costs. 22 On 15 September 2017, Mr Abdulkader affirmed an affidavit in the proceedings, confirming that neither he nor his company had any more of the Goods in their possession, custody or control, and that all of the Goods that were previously in his or his company's possession had been delivered up to the applicants. In his affidavit, Mr Abdulkader also said that he would do all things within his power necessary to "unpublish" a particular Facebook page that he had set up in 2012 or 2013 using a variation of Clipsal's name, deposing to no longer having that page under his control. He also undertook to notify Clipsal of any Goods that might be returned to him by customers of his company or that otherwise might come into his or his company's possession, custody or control and to deal with such goods as Clipsal directed. 23 On 13 September 2017, a statement of charge was filed by the District Registrar. The next day, on 14 September 2017, an amended statement of charge was filed by the District Registrar. A week later, on 21 September 2017, Mr Abdulkader formally entered a plea of guilty to the charge of contempt of court arising from his non-compliance with the Order. 24 The District Registrar accepts that Mr Abdulkader entered his guilty plea at the first available opportunity. That characterisation should be accepted, noting, however, that Mr Abdulkader had no realistic alternative but to plead guilty, given that he was caught red-handed. He had little or no prospect of successfully defending the charge. Nonetheless, a guilty plea does not necessarily just go to showing remorse and contrition, nor only to showing a willingness to facilitate the course of justice; in this case it is also a strong indication of recognition by the defendant of his or her wrongdoing of a kind that gives significant comfort that repetition is less likely. Such recognition may, to some extent, lessen the need for specific deterrence and may also support consideration of suspending a gaol term, rather than requiring any actual time in custody. Put another way, had the charge been defended unsuccessfully, it would probably have been difficult to justify not requiring actual time in custody to be served, so as to sufficiently meet the needs of both specific deterrence and general deterrence.

Additional evidence and facts 25 By affidavit, Mr Abdulkader deposed to the following key additional facts and circumstances: (1) He had been employed by the first respondent from early 2013 to early 2017, relevantly as its business development manager for the last three of those four years, with responsibility for quality control, investigating and introducing new products and managing relationships with suppliers. He then left and set up his own electrical wholesaling business with his own company. (2) The products bearing the CLIPSO mark accounted for 40% of his company's sales. Those products are no longer supplied. (3) He works about 45 hours per week for his company, which also employs one of his sisters and his wife, paying them $1,000 per week and $1,800 per week respectively. The company also employs casual van drivers from time to time. (4) His company's monthly revenue is between $30,000 and $40,000 (including GST), the cost of goods sold is between $20,000 and $30,000 per month (including GST) and net monthly profit is between $4,000 and $6,000, with some support for these figures to be derived from a copy of a draft income tax return for his company which was said to have been lodged. (5) His company also owns a vehicle, which he drives. (6) He lives in one half of a duplex with his wife, while his sister and her husband and their three children live in the other half but do not pay any rent. He also pays the utility bills for the whole duplex, together with monthly mortgage payments of about $2,375. (7) He owns half the duplex, with oral evidence given, referred to below, as to the ownership of the other half by a business associate. (8) Five of his younger siblings live with his mother, whom he also supports because his father lives overseas. He helps his mother pay her mortgage and the private school fees for his four youngest siblings. (9) He has personal savings of approximately $3,000 and has no assets other than his interest in the duplex, two motor vehicles and ownership of his company. (10) He has a credit card debt of about $25,000, supported by a credit card statement as to the amount owed, but not as to the details of how that debt was accrued. (11) His and his wife's weekly earnings consist of his wife's salary, which is about $1,458 after tax. Their expenses exceed that, and he draws upon his savings and loans from the company to fund the gap. 26 Mr Abdulkader supplemented his affidavit by sworn oral evidence, in part in response to concerns expressed by me about the sufficiency of the apology proffered to Perram J. Until then I had not been convinced that a custodial sentence could properly be avoided. Mr Abdulkader's oral evidence was persuasive, along with the submissions made on his behalf, in ultimately coming to a different view. Most of the detail of that evidence does not need to be repeated. A number of particular matters warrant express consideration: (1) Mr Abdulkader renewed and explained his apology to Perram J as follows, addressing certain shortcomings in the content of that prior apology: Your Honour, I'm - I'm terribly sorry. And just to clarify, my other apology to Justice Perram, I - I didn't mean to say I didn't intend to do it. That - that was just showing the court that I didn't want to offend him, and I wasn't looking to offend him. And that wasn't my motive for any of that sort. I was just really sorry and - and I am really sorry about my actions, and I do realise how wrong they are till this day. And I - I'm willing to make it up to the court in any way and - and I did not mean to say I don't - I didn't intend to do it because I did. I did wrongfully do those actions. But I was just really sorry and I - I was just panicking and my family was there. I just didn't want them to get in trouble. And I - I just was saying sorry. I - I didn't prepare the apology at all. It just happened. He [Perram J] said - he gave me the opportunity, and I took it straightaway. (2) He deposed orally to having very limited net assets. Most significantly, he gave additional evidence to indicate that his net equity in the duplex in which he lives is something in the order of $100,000, although his rough estimate of its market worth was so tenuous that it may well be two or three times that amount. The evidence about the building of the duplex, the debts that remain owed, including to his business partner, and his net equity was not clear or easy to understand. He denied a suggestion in cross-examination that his equity could be closer to $270,000, even assuming that the value of the property had not gone up with the rest of the Sydney property market. However, the mathematics in the cross-examination seemed sound and, accordingly, I am not satisfied that his asset position is as limited as he suggested. On the balance of probabilities, his net equity position is likely to be at least as much as the figure of $270,000 that was suggested to him in cross-examination. (3) He indicated that the goods stored in deliberate breach of the Court's orders had a value of about $80,000, which he expected to be able to sell for somewhere between $150,000 and $200,000. Mr Abdulkader's candid admission on this point, although perhaps hard to avoid as a practical matter once he was in the witness box, was against his interest and could therefore more readily be accepted as a reasonably accurate assessment of the gross profit that he stood to make from the contempt. (4) He was unable to explain aspects of his company's draft income tax return in cross-examination, especially as to the superannuation payments, which were inconsistent with the limited number of company employees and the size of the company payroll that he deposed to. (5) He said, in re-examination, about his capacity to pay a fine and costs: (a) that he would appreciate being given three to four months to pay the District Registrar's costs of $25,163.80, but expected that he could manage it in two to three months; and (b) that he could borrow money and perhaps sell an overseas motor vehicle to pay the fine that was imposed, needing as long as six months if the fine was as much as $50,000, and as little as one to two months if the fine was $15,000, as urged by his counsel to be an appropriate penalty. (6) He gave evidence in re-examination of the serious impact it would have on his immediate and extended family if he were sent to gaol. 27 Mr Abdulkader also relied upon character references from two friends as follows: (1) Mr Ali Chibib, who works as a part-time truck driver for Mr Abdulkader's company, and thus for Mr Abdulkader, described him as honest and straight to the point in making decisions, and as having a determined and positive attitude with a generous amount of care and loyalty. He said that Mr Abdulkader had shown commitment through his work, social life and everyday tasks, and that he was considerate of the needs of others and was an ethical and moral person. (2) Mr Ayman Elwazzy, a childhood friend who has known Mr Abdulkader for 14 years, described him as loyal and dependable, with a kind heart, and as a person who strives to satisfy those around him by doing what was morally correct and most appropriate. Mr Abdulkader was also said to be well-mannered, professional and organised, a creative thinker, and a person who would not intentionally offend or harm anyone. Neither character reference addressed Mr Abdulkader's offending.

Contempt sentencing principles 28 The Full Court in Kazal v Thunder Studios Inc (California) [2017] FCAFC 111 at [95] to [106] highlighted the following principles that are relevant to sentencing for contempt: (1) Sanctions may be imposed for contempt in order to punish past non-compliance, or coerce future compliance, or both, unless the refusal or failure to comply with an injunctive order was casual, incidental or unintentional: Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 113. Mr Abdulkader's conduct cannot be characterised as "casual, incidental or unintentional". (2) The High Court in Mudginberri at 107 observed that distinctions drawn between contempt in disobeying court orders and contempt impeding the administration of justice overlooked: … the underlying rationale of every exercise of the contempt power, namely that it is necessary to uphold and protect the effective administration of justice. Although the primary purpose in committing a defendant who disobeys an injunction is to enforce the injunction for the benefit of the plaintiff, another purpose is to protect the effective administration of justice by demonstrating that the court's orders will be enforced. As the authors of Borrie and Lowe's Law of Contempt, 2nd ed (1983) say, at p. 3: "If a court lacked the means to enforce its orders, if its orders could be disobeyed with impunity, not only would individual litigants suffer, the whole administration of justice would be brought into disrepute." (3) The "cardinal feature of the power to punish for contempt" is that it is the exercise of judicial power to "protect the due administration of justice": Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd [2015] HCA 21; 256 CLR 375 at [41]. Viewed in that way, contempt proceedings are essentially protective in nature as to the judicial function and the role of the courts, even if they also serve to vindicate private interests and rights. Contempt proceedings are therefore to be viewed as essential in facilitating courts being able to function properly. (4) Courts must be and be seen to be effectual in adjudicating upon and resolving disputes and, in particular, making orders that will ordinarily be obeyed, which means that individual contempt cases have an important role in supporting and enhancing the integrity of all judicial proceedings. (5) The following list of nine considerations, although not exhaustive, may be seen to be generally relevant in determining an appropriate punishment for contempt of court: (a) the seriousness of the contempt proved; (b) the contemnor's culpability; (c) the reason or motive for the contempt; (d) whether the contemnor has received, or sought to receive, a benefit or gain from the contempt; (e) whether there has been any expression of genuine contrition by the contemnor; (f) the character and antecedents of the contemnor; (g) the contemnor's personal circumstances; (h) the need for deterrence of the contemnor and others of like mind from similar disobedience; and (i) the need for denunciation of contemptuous conduct. (6) Although the penultimate consideration above - the need for deterrence of the contemnor and others of like mind from similar disobedience - is directly concerned with deterrence, all of the above considerations are also relevant to differing degrees in ascertaining the need for deterrence. (7) The focus remains on the core themes of: (a) the objective seriousness of the conduct and, in particular, its effect on the administration of justice; and (b) subjective factors such as the contemnor's culpability, antecedents and attitude, including, in particular, any apology or other palpable sign of contrition, and the capacity to pay a fine. (8) Imprisonment is a last resort - but that does not mean that a court should shy away from imposing that sanction in appropriate cases. (9) Deterrence remains a dominant theme, both specific and general. Even denunciation and punishment can be seen as bolstering deterrence. That is especially so when the conduct entails contemplation and the opportunity to reflect and desist. (10) Vigilance is required to help ensure that contempt remains a rare problem for courts. Whenever there is a real need for deterrence, be it specific or general, that will always be a vitally important consideration in determining the appropriate penalty. (11) The state of mind in committing contempt can serve to mitigate or aggravate the objective seriousness of the conduct. As was observed in Kazal at [106]: Aggravation by way of conduct and a state of mind found to be contumacious can be seen to be on a sliding scale. For example, it may range from deliberate and wilful defiance, to an unsuccessful attempt to get around a prohibition, to an unsuccessful attempt to comply with a prohibition. Proven recklessness or carelessness may be seen not to be contumacious at all. This process of characterisation is inevitably driven by close attention to what was done. This includes what can be said about state of mind able to be ascertained from all of the evidence, including by way of inference.

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.

Sentence of imprisonment 50 I have compared the conduct in this case with that considered by the primary judge and the Full Court in Kazal. Mr Kazal also defied court orders, albeit orders requiring him to desist from certain conduct, rather than mandatory orders calling for positive action. He maintained a not guilty plea both before the primary judge and by challenging his convictions on appeal to the Full Court. Objective aspects of even the lower-end of his conduct may still be seen to be more serious than Mr Abdulkader's conduct. The least serious charges in Kazal, Charges 5 and 8, were characterised by the Full Court as sufficiently serious on resentencing to warrant terms of imprisonment of six months each, with some accumulation, although such prior sentences in sufficiently similar cases cannot be more than a yardstick against which to assess a sentence in contemplation: Hili v The Queen [2010] HCA 45; 242 CLR 520 at [54]. 51 Charge 5 in Kazal involved seven tweets over six consecutive days, directing readers to a website with highly defamatory information of a kind that Mr Kazal was specifically ordered not to publish. Charge 8 in Kazal involved sending threatening emails to the solicitors for the other side in litigation, and then tweeting those letters. Mr Kazal's conduct was, and was intended to be, directly harmful to other individuals, a feature that is absent from Mr Abdulkader's conduct, albeit that the conduct would have incidentally adversely affected Clipsal's commercial interests that were meant to be protected by its trade marks. In this case, the harm was potential and unrealised because the Goods were recovered; in Kazal, the harm inflicted was real and substantial, and was objectively intended to be so. Mr Kazal had some 25,000 followers to his Twitter account. The significance of Mr Kazal's conduct was therefore magnified by reason of the substantial audience for his prohibited communications. General deterrence was a very significant consideration in Kazal. General deterrence remains important in this case, but does not assume the prominence it had to have in Kazal. 52 Not only is Mr Abdulkader's conduct objectively less serious than Mr Kazal's conduct, he also has the benefit of mitigating factors that Mr Kazal lacked, including substantial personal mitigation, his early guilty plea and cooperation in these contempt proceedings. 53 Weighing all the competing considerations, I consider that the appropriate outcome, had this matter been defended and nonetheless proven, would have been a sentence of three months' full-time imprisonment. In all the circumstances, the almost immediate apology, the earliness of the guilty plea and Mr Abdulkader's substantial cooperation remove the need for any part of that sentence to be served, instead of being suspended. The appropriate sentence is therefore a three-month gaol term, suspended immediately, on condition that Mr Abdulkader pay the appropriate fine and the District Registrar's costs in accordance with the orders referred to below.

Fine quantum 54 Counsel for Mr Abdulkader urged the Court to impose a fine no higher than $15,000 by reason of the matters referred to below. Counsel for the District Registrar adopted the stance required of a prosecutor of not making submissions that descend to that degree of detail: see Barbaro v The Queen [2014] HCA 2; 253 CLR 58. 55 The objective and subjective features relied upon by counsel for Mr Abdulkader were as follows: (1) A fine of no more than $15,000 was sufficient for the purposes of deterrence and denunciation, having regard to Mr Abdulkader's contrition, character, personal circumstances, antecedents and the relevance of a costs order. (2) As to deterrence and denunciation, reference was made to penalties imposed in Louis Vuitton of $20,000 and in AGL Energy Limited v Hardy (No 2) [2017] FCA 863 of $25,000. However, Louis Vuitton was decided long ago in 2006 and concerned a contempt by way of re-infringing, rather than direct disobedience of an order requiring immediate steps to be taken. Hardy, while concerning serious conduct in obstructing the execution of an Anton Piller-style civil search warrant with only a late apology, was not, in my view, as serious as this case. Mr Hardy had lost his job, apparently associated with his conduct, and was suffering from certain medical conditions. His conduct was responsive, rather than planned, and took place on the spot, rather than over a week. There was no suggestion of a profit motive. The need for specific deterrence in this case is somewhat higher, and the need for general deterrence more substantial, given the degree of contemplation involved. (3) As to contrition, the early apology and early guilty plea were objective proof that the contrition expressed by Mr Abdulkader was real and significant. That is not in doubt but, as already observed, is also a reflection of Mr Abdulkader's acceptance of the inevitable. (4) As to character, personal circumstances and antecedents, Mr Abdulkader was a relatively young man of prior good character who had a poor financial position, such that any fine would impose significant hardship upon him, with reference to his asset position. That asserted position is, in part, not accepted for the reasons outlined above. It was submitted that Mr Abdulkader had already experienced significant financial hardship by his company paying $80,000 towards Clipsal's costs. That may be accepted and is taken into account. (5) As to the relevance of the costs order, while it was acknowledged that to give a minimal penalty because of a costs order might be perceived to downplay the significance of the contempt (see Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd [2003] FCAFC 13; 196 ALR 350 at [53]; Bob Jane Corp Pty Ltd v ACN 149 801 141 Pty Ltd [2014] FCA 637 at [78]), it should nonetheless be taken into account in mitigation. (6) There should be time allowed to pay the fine by instalments, although it was accepted at the hearing that it may be more advantageous to Mr Abdulkader to have the full amount of time he indicated that he would need to pay, and leave it to him as to how to prioritise and organise that. 56 I am unable to accept the submission that a fine of only $15,000 is an adequate reflection of the objective seriousness of Mr Abdulkader's contumacious conduct as outlined above, or of the need, in particular, for general deterrence for such conduct, even giving full weight to his subjective circumstances. There also remains a factor of specific deterrence, albeit of less significance. The contempt concerned conduct that was motivated by profit, and the financial penalty must bear some reasonable relationship to the gain sought to be made, for otherwise contempt of court and its consequences might be seen to be no more than a risk and cost of business in behaving this way. Mr Abdulkader is fortunate not to be going to gaol. 57 It is well accepted that the limited financial means of a contemnor should not prevent the imposition of a significant fine of sufficient magnitude to vindicate the Court's authority and to deter others from engaging in similar conduct: see Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (No 2) [2005] FCA 254; 215 ALR 281 at [9]-[10] and the cases there cited. A penalty no greater than is necessary to achieve the objective of general deterrence will not be oppressive, albeit being a principle borrowed from a trade practices context in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 293F per Burchett and Kiefel JJ. 58 Weighing up the competing considerations, I have concluded that, in addition to a suspended sentence, the quantum of the fine that is necessary to advance the interests of justice, denounce Mr Abdulkader's conduct, punish him appropriately and to deter others in a like position, is $40,000. I am satisfied that while this will be a heavy burden for him, it will not be oppressive. It is what is necessary to deter such a blatant and serious contempt. However, he should have the amount of time he requested in evidence to pay that fine and also to pay the costs of the District Registrar.

Conclusion 59 Mr Abdulkader must be convicted and sentenced to imprisonment for three months, to be suspended forthwith. He must also be ordered to pay a fine of $40,000 and to pay a contribution to the District Registrar's costs in the sum of $25,163.80. In addition to the orders to pay the fine and costs being orders in their own right, payment of those amounts and within the time stipulated is also a condition of the suspension of the gaol term. As a protective measure against genuinely unavoidable default, Mr Abdulkader must have leave to seek to vary the time within which the fine and costs must be paid, but that will require substantial and exhaustive evidence of his present assets, liabilities, income, expenses and inability to raise the necessary funds by other means. I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromwich.

SCHEDULE OF PARTIES NSD 2537 of 2013 Applicants Second Applicant SCHNEIDER ELECTRIC (AUSTRALIA) PTY LIMITED ACN 004 969 304 Respondents Second Respondent MAZEN ABDULKADER Third Respondent TMB ELECTRICAL WHOLESALERS PTY LIMITED ACN 602 959 741 Fourth Respondent: DEXTON INTERNATIONAL PTY LTD ACN 610 619 184 Fifth Respondent: NOUR ABDULKADER