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Category: Principal judgment

Parties: Deputy Commissioner of Taxation (First Plaintiff)
Nahi Nasri Gazal (Tenth Defendant)

Representation: Counsel:
D Barnett SC / S Scott (First Plaintiff)
No appearance by the Tenth Defendant
Solicitors:
K&L Gates (First Plaintiff)
No appearance by the Tenth Defendant

File Number(s): 2020/365632 (008)

Judgment

Nature of the application and background

1. By Amended Notice of Motion and Amended Statement of Charge dated 1 May 2025, the First Plaintiff, the Deputy Commissioner of Taxation (“DCT”), sought orders that, relevantly, the Tenth Defendant, Mr Nahi Gazal (“Mr Gazal”) was guilty of contempt of court.

2. By way of background, Mr Gazal was the sole director of the three companies in issue, Belfield Development Pty Ltd (“Belfield”), NNG Holdings Pty Ltd (“NNG”) and NG Sydney Corporation Pty Ltd (“NG Sydney”). Mr Gazal was also the sole shareholder of NNG and NG Sydney, and NNG was the sole shareholder of Belfield. Belfield was trustee for the Belfield Development Unit Trust; NNG was trustee for NNG Family Trust; and each of Belfield, NNG and NG Sydney were not registered for GST. The evidence establishes that Mr Gazal controlled each of the company’s bank accounts.

3. On 24 December 2020, the Court made an order including the Penal Notice in Annexure A to the order (“Freezing Order”) (which applied, inter alia, to Belfield, NNG and Mr Gazal) which, relevantly, restrained Belfield, NNG and Mr Gazal from taking any steps to pay, transfer, dispose of or otherwise diminish their assets as set out in the Freezing Order including, but not limited to, the Belfield bank account and the NNG bank account. On 26 March 2021, the Court made a further freezing order including the Penal Notice at Annexure B extending, inter alia, to NG Sydney. There were several exceptions to those orders. The DCT contended that the relevant companies and Mr Gazal relied on one of those exceptions (the ordinary course of business exception) dishonestly to withdraw very large sums of money in repeated contraventions of the orders.

4. By my judgment delivered on 24 June 2025 in Deputy Commissioner of Taxation v Westmeat Development Pty Ltd [2025] NSWSC 655 (“Liability Judgment”), I held that the DCT had established the large part of the charge against Mr Gazal. I summarised the position at [160] and [164] of the Liability Judgment as follows:

“I am similarly satisfied here, to the requisite standard, that Mr Gazal is guilty of contempt of court, in respect of the transactions identified above, on this basis. Mr Gazal was the sole director of Belfield, NNG and NG Sydney, each of which was bound by the relevant orders not to do certain acts which is had done in paying out funds that were not in payment of ordinary business expenses and not otherwise within an exception to the freezing orders. Mr Gazal was plainly aware of these orders, as party to the proceedings, and that is emphasised by his discussions of them with Mr Georgopoulos. He was therefore under a duty to take reasonable steps to ensure that the undertaking was obeyed by each of the companies. He deliberately failed to take those steps and actively took steps, himself and through NG Sydney’s solicitors, to cause each of the companies to make numerous payments in substantial amounts in breach of the freezing orders. That breach constituted a contempt of court on the part of each company (although the question of NG Sydney’s liability for that contempt has been deferred until its reinstatement) and Mr Gazal should also be held to be in contempt in respect of that breach, as to each of the transactions as to which a breach was found above.

…

I have found the large majority of the invoices supporting withdrawals from the accounts that were the subject of freezing orders to be false and I have found the other elements of contempt on the part of Mr Gazal are established to the requisite standard. I will make a declaration as to Mr Gazal’s liability in respect of the charges of contempt against him, to give effect to the findings that I have reached above.”

5. On 11 July 2025, I made orders to give effect to the Liability Judgment, relevantly that:

“The Tenth Defendant, Nahi Nasri Gazal (Mr Gazal) is guilty of a contempt of court in that in breach of paragraph 4(a) of the Freezing Order and paragraph 4(a) of the Further Freezing Order (as those terms are defined in the Amended Statement of Charge (ASC)) (together referred to herein as the Orders):

(a) in respect of charge 1(a)(i) of the ASC, he caused the Belfield Account (as defined in paragraph 1(e) of the ASC) to be diminished by the sum of $1,304,963 by deliberately and dishonestly paying purported business expenses between on or about 3 February 2021 and 29 July 2021 (inclusive) that were not permitted by the terms of the Orders and not bona fide or properly incurred;

(b) in respect of charge 1(a)(ii) of the ASC, he caused the NNG Account (as defined in paragraph 2(f) of the ASC) to be diminished by the sum of $2,852,820 by deliberately and dishonestly paying purported business expenses between on or about 21 January 2021 and 13 July 2021 (inclusive) that were not permitted by the terms of the Orders and not bona fide or properly incurred; and

(c) in respect of charge 1(a)(iii) of the ASC, he caused the NG Sydney Account (as defined in paragraph 4(e) of the ASC) to be diminished by the sum of $1,573,770 by deliberately and dishonestly paying purported business expenses between on or about 24 February 2023 and 3 April 2023 (inclusive) that were not permitted by the terms of the Orders and not bona fide or properly incurred.”

6. I also then made orders directed to bringing the second stage of the contempt proceedings against Mr Gazal, in respect of penalty, to a hearing. Mr Gazal subsequently sought to defer the hearing of the penalty stage of the contempt application; and I addressed that application in several judgments, including my judgment in Deputy Commissioner of Taxation v Westmeat Development Pty Ltd as trustee for Westmeat Development Trust [2025] NSWSC 1571. I there held that Mr Gazal had not established any lack of capacity that would prevent him, or a tutor he had appointed, defending the balance of the contempt proceedings. The Court of Appeal subsequently undertook a detailed review of the history of the proceedings and dismissed a Notice of Appeal filed 9 October 2025 by Mr Gazal and a summons seeking leave to appeal filed 20 November 2025 in respect of my orders, for the reasons set out in its judgment in Gazal by his Tutor Samadi v Deputy Commissioner of Taxation [2026] NSWCA 16. The Court of Appeal there left open the possibility that Mr Gazal could bring a further application seeking to establish a lack of capacity, but he did not subsequently do so.

7. On 9 February 2026, I listed the penalty application for hearing on 31 March 2026 and extended the time for Mr Gazal to file and serve all further evidence on which he relied as to penalty and his submissions. Mr Gazal did not subsequently file evidence or make submissions as to penalty. On 12 February 2026, the solicitors acting for Mr Gazal filed a Notice of Ceasing to Act in these proceedings, although they then continued to act for Mr Gazal in the appeal.

8. On 30 March 2026, the day before the penalty hearing, Mr Gazal’s wife and then tutor, Ms Samadi, sent an email dated 30 March 2026 to the Court as follows:

“I am Rabiaa Samadi the wife of Nahi Nasri Gazal. I wish to inform the Court that I have resigned as his tutor because he has no lawyers and has no money for lawyers, I am not a lawyer, and I do not know what I am doing.

As you are aware, my husband has very bad health, so I do not know what to do with his case tomorrow as I am not a lawyer. I have asked his trustee in bankruptcy to attend Court tomorrow to answer any questions you have.”

9. By a further email dated 31 March 2026, Ms Samadi advised the Court that:

“My husband Nahi Gazal has been at the emergency department at St Vincent’s Hospital.

I have been trying to get him discharged to come to Court but the doctors are refusing as he was not waking up and is hooked up to machines.

I am not sure when and what time they will discharge him.

Feel free to contact the emergency department and I am also available if you wish to speak with me.”

10. At my request, my Associate then advised Ms Samadi that the Court would deal with any application to adjourn the hearing when the matter was listed that morning. No such application was brought by Mr Gazal.

Evidence led at the penalty hearing

11. At the penalty hearing on 31 March 2026, the DCT read the affidavit dated 9 September 2024 of its solicitor, Mr Chambers, which had previously been read at the liability stage of the proceedings, which referred to the circumstances in which the freezing orders were made. The DCT also read the affidavit of service of Mr Zaineddine dated 26 September 2024. The DCT also tendered a bundle of bank statements (Ex P1) which recorded withdrawals which had been procured by Mr Gazal in the manner set out in the Liability Judgment.

12. The DCT also read a second affidavit dated 30 March 2026 of Mr Chambers, which referred to communications with the solicitor previously acting for Mr Gazal and with Mr Gazal and his tutor, Ms Samadi, since the last directions hearing in respect of the penalty application on 9 February 2026. That affidavit noted that Mr Chambers had not received correspondence from Mr Gazal’s solicitors advising him that the contempts previously found against Mr Gazal had been purged, or correspondence from Mr Gazal or any other person indicating that the money that was the subject of the contempt findings had been returned to the bank accounts from which the money was originally withdrawn. The DCT also relied on a schedule of withdrawals from the relevant accounts (MFI 3), which reflects findings that were made in the Liability Judgment.

Applicable principles

13. Part 55, rule 13 of the Supreme Court Rules 1970 (NSW) (“SCR”) provides that, where a contemnor is not a corporation, the Court may punish contempt by committal to a correctional centre or fine or both; and the Court may make an order for punishment on terms, including a suspension of punishment or a suspension of punishment in case the contemnor gives security in such manner and in such sum as the Court may approve for good behaviour and performs the terms of the security. That rule is declaratory of the Court’s power of punishment and does not exhaust that power: Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309 at 314 (“Maniam”); Menzies v Paccar Financial Pty Ltd (2016) 93 NSWLR 88; [2016] NSWCA 280 at [14]; Admark Property Group Pty Ltd (in liq*) v GJ Building and Contracting Pty Ltd* (2017) 94 NSWLR 777; [2017] NSWSC 118 at [30]. Proceedings for contempt in respect of a breach of an order or undertaking have the effect of vindicating the Court’s authority and also have a remedial or coercive effect; and the purposes of punishment for contempt include deterring the contemnor and others in the future from committing similar contempts and denunciation of the conduct: Witham v Holloway (1995) 183 CLR 525 at 533; [1995] HCA 3 (“Witham”).

14. In Australian Consolidated Press v Morgan (1965) 112 CLR 483 at 498–499 (in a passage cited by the plurality in Witham at 532), Windeyer J observed that:

“When contempt lies in disobedience of a court’s order to do something, the contemnor may be imprisoned, until by doing what was ordered he purges his contempt. When contempt lies in disobedience of an injunction not to do something, the contemnor is ordinarily permitted to purge his contempt by an apology to the court, making reparation for the damage done by the forbidden act and paying the costs as between solicitor and client.”

15. In Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 114–115; [1986] HCA 46, the majority of the High Court in turn observed that:

“There will often be elements of futurity in orders of a court which are designed to bring a contempt of court to an end. At stake is the public interest in vindicating the authority of the court and maintaining respect for the law. In principle, there is no good reason in appropriate circumstances for denying a court access to such a means of bringing a contempt to an end. There are ample precedents where courts have taken strong measures in order to coerce compliance with an order of the court. In the case of an individual contemnor, he may be imprisoned until the contempt is purged. The committal to prison is of a conditional nature, remaining in force until the contempt comes to an end or further order is made. As soon as the contempt is purged, the offender is entitled to release ex debito justitiae (In re Freston (1883) 11 QBD 545, at pp 554–555, 557). In the case of a corporation, its assets may be seized and remain seized until the contempt ceases. Such an order again exhibits a conditional character. There is much to be said for securing to a superior court a wide range of remedies so that it will be better able to meet the exigencies of particular circumstances. In the United States the suspended fine is well known (Miller, Contempt of Court (1976), at p 12). In Doyle v London Guarantee Co, a case of continuing civil contempt, the Supreme Court offered no criticism of a conditional order imposing a fine of $250 if certain books and papers were not produced by a certain date. Again, in United States v United Mine Workers of America the Supreme Court imposed a fine of $2,800,000 conditioned on the failure of the union to comply with a labour injunction within five days. It was considered that such an order would effectively coerce the union into a future compliance with the Court’s order. Another example of the flexibility of the orders available to the court may be seen in Con-Mech (Engineers) Ltd v Amalgamated Union of Engineering Workers (Engineering Section), where the National Industrial Relations Court ordered sequestration of assets to the value of £100,000, but postponed a final decision on the amount of the fine which would become payable so as to give the union time for further reflection. On continued disobedience, a fine of £75,000 was imposed.

These are considerable powers, resort to which imposes a heavy responsibility upon a court confronted with a determined challenge to its authority. The propriety of their exercise cannot be measured solely by reference to the established procedures attending the prosecution of ordinary breaches of the law. Contempt of court is a distinctive offence attracting remedies which are sui generis (Morris v Crown Office. It is required of the chosen remedy that it be effective, no more but no less. For, if it is not effective, serious and lasting damage to the fabric of the law may result.” [footnotes omitted]

16. In Paccar Financial Pty Ltd v Menzies & Menzies (No 2) [2015] NSWSC 1622 at [8], Rothman J noted the historical distinction between civil and criminal contempt, and that civil contempt involves a breach of a court order or undertaking and criminal contempt relates to conduct that obstructs the administration of justice. In NHB Enterprises Pty Ltd v Corry (No 8) [2022] NSWSC 97 at [26]ff, Bell P summarised the applicable principles in a manner that I should set out in full, omitting citations of authority, and ordered that the first respondent be sentenced to a term of imprisonment of 3 months commencing from the date of his arrest in the relevant circumstances:

“The underlying rationale of sentencing for both civil and criminal contempt is to protect the effective administration of justice …

In Sun v He (No 2) [2020] NSWSC 1298 (Sun v He), the Chief Judge in Equity noted that an important purpose of sentencing for contempt is to make clear the Court’s disapproval of such conduct, as well as to set a punishment that will further the object of general deterrence.

In [Maniam], where there had been deliberate and contumacious refusals to comply with subpoenas on repeated occasions, at 313–315 Kirby P (as his Honour then was, and with whom Mahoney and Hope JJA agreed) outlined that:

‘Contempt law has been fashioned by the courts to protect the administration of justice. This is an activity, self-evidently of the greatest importance to society. It represents a vital part of the peaceful government of a community such as ours …

…

A conviction of contempt of court is a conviction of an offence, criminal in nature. Punishment of the convicted contemnor must therefore take into account the considerations normally applicable to the punishment of crime and apt to uphold the purpose of this jurisdiction, viz, the undisturbed and orderly administration of justice in the courts according to law. Thus, in determining the punishment which is apt to the circumstances which have led to a conviction of contempt, it is appropriate to bear in mind the purposes of punishing the contemnor; deterring the contemnor and others in the future from committing like contempts; and denouncing the conduct concerned in an approximately emphatic way …

…

The most serious class of contempt, from the point of view of sanction, is contumacious contempt. Not every intentional disobedience involves a conscious defiance of the authority of the Court which is the essence of this class of contempt …. This class of contempt is reserved to cases where the behaviour of the contemnor has been shown to be aimed at the integrity of the courts and designed to degrade the administration of justice, as distinguished from a simple interference with property rights manifested by a court order … In cases where such a measure of wilfulness is established, the court may proceed to punish the convicted contemnor by the imposition of a custodial sentence or a fine or both. In such a case the elements necessary to establish wilfulness, carrying as they do the potential of penal consequences, must all be proved to the criminal standard ... The procedures of a criminal prosecution must be strictly observed…’

In Dowling v Prothonotary of the Supreme Court of New South Wales (2018) 99 NSWLR 229; [2018] NSWCA 340 at [46], [57]–[58] (Dowling), the Court of Appeal made clear that the Crimes (Sentencing Procedure) Act 1999 (NSW) does not apply with respect to proceedings for contempt in the civil jurisdiction of this Court.

Sentencing a contemnor to a term of imprisonment is a penalty of last resort … While the provisions of the Crimes (Sentencing Procedure) Act may not apply, to adopt the language of McCallum JA in He v Sun at [68], “it is appropriate to proceed on the basis that, where a person is being dealt with for contempt in civil proceedings, as where a person is being sentenced for a criminal offence, the course of committing the contemnor to a correctional centre or sentencing them to a term of imprisonment should not be taken before considering whether there is any alternative course that is appropriate in the circumstances, having regard to the nature and object of the function in question”. The reasons underpinning her Honour’s conclusion on this point were that:

‘… imprisonment is a punishment of last resort ... While that is a proposition that arises most commonly in the discourse of the criminal law, there is no reason in principle why the same restraint should not apply to punishment of contempt and every reason why it should. That is a necessary incident of the common law’s acceptance that the right to personal liberty is a fundamental common law right which ‘cannot be impaired or taken away without lawful authority and then only to the extent and for the time which the law prescribes’ ’…

In [Australian Securities and Investments Commission v Matthews (2009) 71 ACSR 279; [2009] NSWSC 285 (“Matthews”)] at [26]–[27], Barrett J (as his Honour then was) set out the following factors generally to be taken into account in addressing the question of the penalty to be imposed for contempt of court:

(1) the seriousness of the contempt proved;

(2) the contemnor’s culpability;

(3) the reason or motive for the contempt;

(4) whether the contemnor has received, or sought to receive, a benefit or gain from the contempt;

(5) whether there has been any expression of genuine contrition by the contemnor;

(6) the character and antecedents of the contemnor;

(7) the contemnor’s personal circumstances;

(8) the need for deterrence of the contemnor and others of like mind; and

(9) the need for denunciation of contemptuous conduct.

His Honour’s observations were referred to with approval by the Court of Appeal in Matthews v Australian Securities and Investments Commission [2009] NSWCA 155.

In [Kazal v Thunder Studios Inc (California) (2017) 256 FCR 90; [2017] FCAFC 111 (“Kazal”)] at [102], the Full Court described the factors in Matthews as a “useful list of considerations that may properly be seen to have a part to play in a given case, although not exhaustive”. It was observed that all of the factors were relevant to differing degrees in ascertaining the need for deterrence. The Full Court observed that the above factors were referred to “in more detail and somewhat more besides” in Australian Competition and Consumer Commission v Halkalia Pty Ltd (No 3) [2017] FCA 522 at [140]–[143] (Halkalia). The factors mentioned in Halkalia include:

(1) the nature and circumstances of the contempt;

(2) the effect of the contempt on the administration of justice;

(3) the contemnor’s financial means (when deciding the amount of any fine);

(4) the relative seriousness of the contempt, which is determined by the extent to which the contemnor appreciated that a contempt was being committed;

(5) whether the contemnor subjectively intended to disobey the order;

(6) the importance of bringing home to the contemnor the seriousness of the contempt;

(7) whether the contemnor has offered an explanation or apology for his or her conduct;

(8) whether the contemnor has acknowledged that a contempt was committed;

(9) whether the contemnor was aware of the personal consequences of what he or she proposed to do;

(10) the actual or potential consequences of the contempt on the proceedings in which the contempt was committed; and

(11) whether the contempt was committed in the context of a proceeding alleging crime or conduct seriously prejudicial to the public interest.

As the Court observed in Kazal at [101]–[102], the list of potentially relevant factors is not exhaustive. At [103], the Full Court observed more generally that:

‘The burden of the additional authority in this Court is to add weight to the factors listed in Matthews, rather than requiring any change by way of addition, subtraction or variation. The focus remains on the core themes of the objective seriousness of the conduct and, in particular, its effect on the administration of justice, subjective factors such as the contemnor’s culpability, antecedents and attitude, including in particular any apology or other palpable sign of contrition, the capacity to pay a fine, and imprisonment being a last resort. 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.’”

17. The DCT also drew attention to my summary of the applicable principles, in a case in which imprisonment for contempt for a fixed term was sought, in Huang v Liao [2022] NSWSC 526 at [31]ff on which I have drawn for part of the summary of principles which appears above.

18. The DCT also referred to R v T (2022) 58 WAR 77; [2022] WASCA 34, where the applicable principles were considered by the Court of Appeal of the Supreme Court of Western Australia in relation to the appellant’s breach of orders made in the primary proceedings in that case. The Court there observed at [70]–[74] that:

“Sentencing for a contempt of court constituted by a breach of the court’s orders may serve two distinct purposes. These purposes may be described as coercive and punitive. A sentence for contempt may provide a coercive means by which court orders can be enforced and future compliance with the order secured for the benefit of a party to the proceedings can be ensured. However, a sentence for contempt may also punish wilful disobedience of a court’s order so as to vindicate judicial authority and maintain the integrity of the court’s process in the public interest. These different purposes mark the distinction between civil and criminal contempt. Although the significance of that distinction has been reduced almost to the point of obliteration in Australia, the dual purpose of sentencing for contempt of court remains and imposition of a single sentence may serve both purposes.

Coercive elements of sentencing

Under the general law, the courts have power to impose an indefinite sentence that will be discharged when the contemnor complies with the relevant order. In the past, an indefinite sentence has been seen as preferable where the purpose of the sentence is coercive. In Danchevsky v Danchevsky [[1974] 3 All ER 934, 937], a husband in a family law matter steadfastly refused to obey an order that he give up possession of a former matrimonial home as cooperation in its sale. Lord Denning observed:

‘It seems to me that when the object of the committal is punishment for a past offence, then, if he is to be imprisoned at all, the appropriate order is a fixed term. When it is a matter of getting a person to do something in the future — and there is a reasonable prospect of him doing it — then it may be quite appropriate to have an indefinite order against him and to commit him until he does do it. But if there is no such prospect — as here — there should not be an indefinite term. If he is to be imprisoned at all, it should be for a fixed term for his past disobedience.’ (original emphasis)

… Sentences of indefinite imprisonment have been imposed in Australia in family law cases where Lord Denning’s observations have been applied. However, the predicate for such an order has remained that there is a reasonable prospect of the contemnor complying with the orders.

Further, when it is apparent that coercion will not work, a fixed or indefinite order of imprisonment should be discharged when the ineffectiveness of its coercive purpose has been demonstrated. …

As is apparent from this discussion, the permissible coercive effect of a sentence for contempt can only subsist where there is a reasonable prospect of the order achieving its aim. Where … a contemnor has demonstrated his or her resolve to remain in prison, rather than purge the contempt, then continuing the imprisonment on coercive grounds will be unwarranted.”

19. The DCT also drew attention to the observations of Darke J in BCEG International (Australia) Pty Ltd v Xiao (No 3) [2023] NSWSC 554 (“Xiao”). That decision has similarities with this case, where it involved the breach of freezing orders and undertakings to the Court, including by disbursing monies from a bank account, and that contempt there had not been purged by the date of the hearing. Orders for contempt were there sought in aid of compliance with the Court’s previous orders. Darke J summarised the applicable principles at [13]ff of his judgment, to which I have had regard, and observed at [17]–[18] that:

“I have already noted that the defendants, in submissions, emphasised that the conduct found to be contemptuous was not stated in the Statement of Charge to be contumacious, and was not found to be such. It was submitted that in those circumstances it would rarely be appropriate to impose a term of imprisonment as a disciplinary sanction (see Vaysman v Deckers Outdoor Corporation Inc (2011) 276 ALR 596; [2011] FCAFC 17 at [178] [1] ). Moreover, it was submitted that it was now too late for the plaintiff to contend that the defendants acted contumaciously. Nonetheless, I did not understand it to be submitted that, in the absence of such a finding, it was not open to the Court to punish a contemnor (not being a corporation) by a term of imprisonment.

It seems to me that that is so, having regard to the clear language of SCR Pt 55 r 13 and the statements made in Dowling v Prothonotary of the Supreme Court of New South Wales (supra). It is particularly the case where, as in the present case, contempts remain unpurged, such that punishment by imprisonment may serve a remedial or coercive purpose beyond punishment for past disobedience (see Construction, Forestry, Mining and Energy Union v Grocon Constructors (Victoria) Pty Ltd (2014) 47 VR 527; [2014] VSCA 261 at [170]–[171] ).”

20. His Honour noted (at [20]) that:

“Of course, it remains the case that imprisonment is to be regarded as a punishment of last resort (see He v Sun (2021) 104 NSWLR 518; [2021] NSWCA 95 at [68] per McCallum JA; see also NHB Enterprises Pty Ltd v Corry (No 8) [2022] NSWSC 97 at [30] per Bell P, as the Chief Justice then was).”

21. His Honour also observed (at [38]) that it was not necessary, in order to justify a penalty of imprisonment, that a civil contempt by breach of a Court order or undertaking to the Court be found to be contumacious.

Submissions and determination

22. By initial submissions in respect of the penalty hearing, made on 24 September 2025, Mr Kelly, with whom Ms Scott then appeared for the DCT, referred to the Liability Judgment and submitted that:

“… the Court found that, in his capacity as the sole director of [Belfield, NNG and NG Sydney], Mr Gazal actively took steps himself, and through NG Sydney’s solicitors to cause each of the companies to make numerous payments in direct breach of the Court’s freezing orders and that these multiple breaches constituted a contempt of court on the part of each company and of Mr Gazal: [Liability] Judgment at [160].

The contempts have not been purged. Mr Gazal did not, and has not, led any evidence that he is unable to cause the contempts to be purged, by having moneys paid back into the accounts that were frozen by the Court’s orders. It is not open to him to say that it is impossible for him to purge the contempts as no evidence to that effect has been led by him.”

23. Mr Kelly and Ms Scott also there submitted, and I accept, that:

“The contempts that the DCT has established are of the most serious kind … Mr Gazal was acutely aware of the freezing orders, which was why he resorted to deceitful and fraudulent behaviour to “outflank” the effect of the freezing orders by dishonestly deceiving banking institutions and bank employees to believe that a legitimate exception to the freezing orders had been engaged.

Being aware of these orders, Mr Gazal was under a duty to take reasonable steps to ensure that the undertaking was obeyed in respect of each company.

Mr Gazal did the opposite.

He caused the orders of the Court, and the authority of the Court’s orders to be undermined by deceitful and deliberately dishonest acts.

It was not a “one off” act of contempt or dishonesty. His contemptuous behaviour involved repeated and numerous instances of undermining the Court’s orders.

Further, the seriousness is accentuated by the fact that his repeated acts of deceit caused most of the money to be drained from the frozen accounts.

This, if left unpunished, would render the Court’s orders completely ineffective. A reasonable, fair minded lay person would view the result of what Mr Gazal achieved as having an implication that the orders of the Court can be got around by deceit if one is willing enough and determined to do so. If there is not a serious penalty imposed upon Mr Gazal the impression could fairly be created that a person can deceitfully cause the undermining of the Court’s orders without fear of any particularly adverse consequences.”

24. Mr Kelly and Ms Scott also there referred to the evidence as to dealings with the relevant monies, which were addressed in the evidence read at the primary proceedings and in the Liability Judgment. I must also address one additional issue, which I had left open in the Liability Judgment. I there observed at [162]–[163] that:

“The DCT points out that, between 21 January 2021 and 29 July 2021, there were 20 transfers of funds from ANZ to a CBA account maintained by Skybridge (Chambers 1 [61]; Ex P2, CB 1947–1962). The DCT noted that $746,505 of the amounts received by Skybridge had not yet been traced because CBA had not yet produced bank statements for the period pre-dating 19 April 2021; a further amount was then transferred to an unidentified CBA account, and $809,894 was transferred to a CBA account in the name of Mr Yigit. The DCT also points out that, between 4 February 2021 and 23 July 2021, there were 30 transfers of funds from ANZ to a CBA account maintained by Hawthorn (Chambers 1 [65]; Ex P2, CB 2090) and of the amounts paid to Hawthorn, $784,983 was also transferred to Mr Yigit (Chambers 1 [91]). The DCT contends that, between December 2020 and December 2022, Mr Yigit made numerous transfers of funds to Mr Gazal. This evidence raises the possibility that Mr Gazal benefitted from the relevant payments, but it is not necessary to reach, and I do not reach, a finding as to that matter at this point. I recognise it may need to be addressed at the penalty hearing.

The DCT points out that, between 20 February 2023 and 14 March 2023, nine payments were made from the NG Sydney account to John Building Corp (Chambers 1 [77]) and, between 24 February 2023 and 7 March 2023, six payments were made to Sawan (Chambers 1 [82]; Ex P2, CB 3236–3349). While any benefit to Mr Gazal from those payments has not yet been established, I recognise that matter may also need to be addressed at the penalty hearing.”

25. I am satisfied that, as Mr Kelly and Ms Scott point out in submissions in this application, in excess of $1.6 million paid out of the relevant bank accounts in breach of the freezing orders was transferred to Mr Yigit, who then made transfers of funds to Mr Gazal, to Mr Gazal’s legal representatives and to his sons and companies associated with him. It is sufficient to support the orders that are sought by the DCT against Mr Gazal that the DCT has established at least $189,436 was transferred to Mr Gazal directly, and substantially larger amounts were transferred to his associates and dealt with in cash. Mr Gazal did not lead evidence or make submissions to the contrary at either the liability or the penalty hearings.

26. Mr Kelly and Ms Scott also submitted that:

“First, the contempts established, being repeated and dishonest breaches of freezing orders and undertakings designed to protect the interests of a plaintiff seeking remedies against a defendant, are inherently of a most serious and egregious kind. Further the breaches were facilitated by a purposeful fraud through the creation of false invoices and, as is plain from the analysis undertaken of the bank statements referred to above, much of the money was used by Mr Gazal for his own purposes.

In relation to the latter submission, an inference ought to be drawn that Mr Gazal would not have engaged in such repeated, and elaborately dishonest conduct, if not for the purpose of his own benefit. There was certainly no evidence that he was engaging in the contempts under the coercion of a third party or for the primary benefit of a third party.

Second, Mr Gazal was central to the breach of the freezing orders and undertakings. But for his conduct, no breach could have been undertaken.

Third, the breaches of those orders and undertakings have caused immense prejudice to the Deputy Commissioner of Taxation. It no longer has recourse to the more than $6 million in previously frozen funds no unavailable and, because it has been forced to prove every element of falsity, has spent an enormous amount on legal costs.

The Deputy Commissioner of Taxation, when prejudiced in this fashion, represents the common polity in this sense: when it sues for such a contempt, it can be seen as representing the public interest and as representing (not formally but in a very real, practical sense) the interests of law abiding people who pay taxes that they owe, or behave lawfully when unable to pay such taxes.

Fourth, despite being afforded numerous opportunities, Mr Gazal has offered no explanation for his conduct. The obvious inference is that it was engaged in for self interested financial gain.

Fifth, Mr Gazal has made no attempt to purge the contempt. Nor has he adduced evidence of any inability to purge the contempt.

Sixth, a penalty of imprisonment would meet the public policy expectation of specific and general deterrence. It would also meet the expectations of a reasonable, fair minded, lay person who would expect the rule of law to be upheld in this respect by a punishment.

Whilst it is not necessary, in order to justify a penalty of imprisonment, that a civil contempt by breach of a Court order or undertaking to the Court be found to be contumacious, it is submitted that there is no doubt that Mr Gazal’s conduct was indeed contumacious. This is evident from the repeated, deliberate acts of deceit, and by the cunning and dishonest use of an exception in the Court’s orders itself to undermine the effect of those Orders.

Mr Gazal was the sole director of Belfield, NNG and NG Sydney The monies held in the bank accounts of those companies were the only assets of those companies. Mr Gazal undertook to comply with the terms of the freezing orders. Mr Gazal ensured that the freezing orders were not complied with by presenting false invoices to the banks. He did so for his own benefit. The bank statements reveal a number of payments that were made to him and to others, presumably at his direction.”

27. There is substantial force in these submissions, having regard to the findings that I reached in the Liability Judgment and the additional findings that I have reached above as to the payments received by Mr Gazal and his associates as a result of the impugned conduct.

28. By further submissions made on 17 March 2025, Mr Barnett, with whom Ms Scott then appeared for the DCT, emphasised the nature of the relief that the DCT seeks against Mr Gazal as follows:

“The contempts found by Black J in the first [liability] stage are civil contempts. Committal to a correctional centre is available, but its purpose is remedial and coercive, not punitive. The coercive purpose is to compel or encourage Mr Gazal to purge his contempt by repaying the moneys. The element of compulsion or encouragement arises because upon purging his contempt, Mr Gazal can apply to be released. It is sometimes said that the contemnor in that position has the keys to release in his or her own pocket.

The permissible coercive purpose and effect can only subsist where there is a reasonable prospect of the order achieving its aim. If there is no reasonable prospect of Mr Gazal purging his contempt in some acceptable way, then the Court should not order Mr Gazal’s committal. In particular, the Court should, with respect, avoid the temptation to impose a sentence as punishment for Mr Gazal’s past disobedience. Such a punitive purpose is only appropriate in the case of criminal contempts. Similarly, if it becomes apparent during Mr Gazal’s imprisonment (if so ordered) that there is no reasonable prospect that he will purge his contempt, continuing the imprisonment from that point would be unwarranted.

With those principles in mind, the Deputy Commissioner submits that an appropriate means of achieving the permissible remedial and coercive objective is imprisonment for an indefinite term until Mr Gazal purges his contempt by repaying the moneys taken in breach of the freezing orders. It would also be open to the Court to impose a fixed term of imprisonment on the basis that the earlier purging of Mr Gazal’s contempt would result in his early release.”

29. Mr Barnett and Ms Scott in turn fairly recognised that:

“In the present case, a change in circumstances that would or might justify the end of indefinite imprisonment or the early end of a fixed term [for Mr Gazal] might be (a) repayment of the monies in full, (b) partial repayment of the monies coupled with an explanation of the destination of the remaining monies and demonstration that Mr Gazal is unable to access them or any other source of funds, or even (c) that given the period of imprisonment that has elapsed, there is no realistic likelihood that further imprisonment would cause Mr Gazal to change his mind and either access funds or demonstrate an inability to do so.”

30. I have had regard to the principles set out above, including in a similar context in Xiao, and to the matters identified in Matthews, although those matters have a less direct application here than if a fixed penalty was sought by way of punishment for contempt. Here, the Court can readily be satisfied that an order made against Mr Gazal would have utility in bringing about compliance with the Court’s previous orders or reversing the previous non-compliance, at least in part. There is no reason to think that Mr Gazal would be incapable of repaying the funds that he had personally received, in a substantial amount, so as to purge or mitigate his contempt. That inference is readily drawn where, as I have found above, a substantial amount of funds was transferred from the relevant accounts to corporate accounts, then to Mr Yigit, then to Mr Gazal directly; and Mr Gazal has led no evidence to explain where those funds have gone, although he (and his wife in the correspondence noted above) has repeatedly asserted impecuniosity. There is no reason to infer, in Mr Gazal’s favour, that he does not have access to the funds that were transferred at least to him, and possibly to associated entities, where he leads no evidence to seek to establish that matter.

31. It seems to me that such an order for the imprisonment of Mr Gazal for an indefinite term is necessary to advance the remedial and coercive purpose of securing compliance with the Court’s previous orders, by seeking to reverse the effects of Mr Gazal’s deliberate breach of those orders. As Darke J held in a similar situation in Xiao at [46], the incentive towards compliance that is inherent in an indefinite term that is terminable upon the purging of the outstanding contempts renders such a term, rather than a fixed term, appropriate in the case of Mr Gazal. As in that case, if it became apparent in future that Mr Gazal lacked the ability to purge the outstanding contempts, so that there was no longer any purpose in keeping him in prison, it would be open to him to seek to have the order for committal discharged pursuant to SCR Pt 55 r 14. The orders I will make reserve that possibility. For all the reasons set out above, I accept that the orders sought by the DCT are necessary to uphold and protect the effective administration of justice, and that Mr Gazal should be committed to a correctional centre for an indefinite term until he purges the contempts.

32. The DCT proposes, and I accept, that the order for Mr Gazal’s committal to a correctional centre should be suspended for a period of 21 days. That order should be made, first, because it allows an opportunity for Mr Gazal to purge his contempt before his imprisonment commences. The suspension of the order is consistent with the approach adopted by Darke J in Xiao at [47], where his Honour noted that it recognised the principle that imprisonment is a punishment of last resort, by allowing “a further opportunity for the contempts [to] be purged within that period and thereby avoid imprisonment.” Second, as appears to have been contemplated in Mr Gazal’s earlier and unsuccessful appeal, it allows an opportunity for Mr Gazal to appeal from this judgment, if so advised.

Costs

33. The DCT seeks an order for indemnity costs against Mr Gazal and the corporate defendants to the liability hearing, to compensate the DCT for the substantial expenditure to which it has been put by the approach taken by Mr Gazal and those companies in that aspect of the proceedings. In NCR Australia Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118, Campbell J observed at [102] that:

“In imposing a costs order for contempt, the Court aims so far as it can to provide full indemnity to a party who obtained a Court order which has been breached in a way which amounts to contempt. Thus, the usual order for costs is that the contemnor pay the costs on an indemnity basis. There is no reason to depart from the usual order in the present case.”

34. There is also no reason to depart from the usual order here, and there is further reason to make it where Mr Gazal and the companies put the DCT to the costs of proving the facts of multiple individual transactions in the liability hearing, where there was plainly no proper basis for those transactions. I accept that an order for costs of the liability hearing should be made against Mr Gazal and the companies on an indemnity basis. An order for costs should be made on the same basis against Mr Gazal for the costs of the several adjournment applications and the penalty hearing, which proceeded only against him.

Orders

35. For these reasons, I make the following orders:

1 Pursuant to r 13 of Part 55 of the Supreme Court Rules 1970 (NSW) (SCR), that in respect of the contempts committed by him, the Tenth Defendant, Nahi Nasri Gazal (Mr Gazal) be committed to a correctional centre until such time as the contempts the subject of Charges 1(a)(i), 1(a)(ii) and 1(a)(iii) are purged.

2 The order for committal to a correctional centre be suspended for a period of 21 days from the date of these orders.

3 The order for committal to a correctional centre may be discharged if, within the period of 21 days from the date of these orders, Mr Gazal satisfies the Court that the contempts the subject of Charges 1(a)(i), 1(a)(ii) and 1(a)(iii) have been purged.

4 A warrant for the committal of Mr Gazal to a correctional centre, in the form initialled by Black J and placed in the file, be issued forthwith, such warrant not to be executed until the expiry of the period of 21 days from the date of these orders.

5 Each of Mr Gazal, Belfield Development Pty Ltd, NNG Holdings Pty Ltd and NG Sydney Corporation Pty Ltd pay the First Plaintiff’s costs of the liability phase of the contempt motion on an indemnity basis; and Mr Gazal pay the First Plaintiff’s costs of the penalty phase of the contempt motion on an indemnity basis.

6 Liberty to the parties to apply in respect of the execution of the above orders or in respect of any application under r 14 of Part 55 of the SCR on 2 business days' notice, specifying the relief sought.

7 These orders be entered forthwith.

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Endnote

I recognised that, as Mr Barnett with whom Ms Scott appeared for the DCT points out, that decision was directed to the use of imprisonment as a sanction for a civil contempt, as distinct from a means to bring about compliance with the Court’s orders.