NHB Enterprises Pty Ltd v Corry

Introduction

1. This is an application brought by NHB Enterprises Pty Ltd (NHB Enterprises) and Finn Pharmaceuticals Pty Ltd (Finn) (together, the Applicants), in which they seek declarations that the First Respondent, Mr Alexander Stephen Corry (Mr Corry), the Second Respondent, Mrs Boriana Corry (Mrs Corry) and the Third Respondent, Mr Rimon Ghaly (Mr Ghaly) (together, the Respondents) are in contempt of Court, and an order that the Respondents be punished for contempt.
2. This judgment relates solely to the question of whether the Respondents were in contempt. Any question of punishment must necessarily arise at a later stage if the charges are made out. The Applicants, for whom Mr Dawson SC and Mr Senior appeared, accepted that they needed to make out the charges to the criminal standard, that is to say, beyond reasonable doubt. This was notwithstanding the observations of White JA in Eshow v Zaia [2020] NSWCA 10 at [24]-[25] (Eshow) that, in civil proceedings for criminal contempt, s 140 of the Evidence Act 1995 (NSW) meant that only the civil standard of proof needed to be satisfied.
3. Mr Corry, who at one point indicated from the Bar table that he has a law degree and was admitted to the Supreme Court of New South Wales but does not hold a practising certificate, represented himself in the course of the proceedings. Mr Corry was also given leave to represent Mrs Corry who filed an Affidavit on 6 May 2020 confirming her assent to that course. Mrs Corry was present throughout the hearing.
4. Mr Ghaly was represented throughout the proceedings by Mr Hyde of counsel.
5. The alleged contempts arise out of and relate to the alleged failure by Mr Corry and Mr Ghaly to comply with orders made by this Court by consent on 17 April 2018 to deliver up software belonging to the Applicants, together with documents created using in any way the software and not to access or use any and all documents or information owned by the Applicants (April 2018 Orders). The full terms of the April 2018 Orders are set out at [44] below.
6. The charges of contempt against Mr Corry also include two charges relating to subsequent orders made by the Court in February 2019 (the Second Search Order). This order is described more fully at [57]ff below.
7. The charge of contempt against Mrs Corry is confined to an alleged breach of an aspect of the Second Search Order made in February 2019.
8. A copy of the Statement of Charge, filed pursuant to Pt 55 r 7 of the Supreme Court Rules 1970 (NSW), is an appendix to and incorporated into these reasons. The specific charges against Mr Corry are detailed in paras 20-23 of the Statement of Charge; that against Mrs Corry in para 24 of the Statement of Charge; and that against Mr Ghaly in para 25 of the Statement of Charge.
9. The factual background to the application is as follows.

Bova Chemist

1. Bova Compounding Chemist (Bova Chemist) is the trading name of NHB Enterprises. Mr Nicholas Patrick Bova (Mr Bova) is the Managing Director of NHB Enterprises, and a Director of Finn, which is a company related to NHB Enterprises.
2. Bova Chemist is a veterinary compounding chemist that imports, manufactures, prepares and/or compounds medications for use by Australian veterinary practices and animal owners. Bova Chemist's client base is mainly limited to Australian veterinarians, with a very small percentage of its revenue based on medications for human consumption.
3. Mr Bova gave evidence that Bova Chemist is Australia's largest veterinary compounding business, servicing approximately 70-80% of the veterinarians in Australia and supplying urgent medicines for tens of thousands of animals each year. As at June 2017, Bova Chemist's annual revenue was approximately $8.5 million. With respect to Bova Chemist's competitors, Mr Bova gave the following oral evidence (T343.7-10): "There is a lot of small compounding pharmacies that operate in Australia. Most of them don't do just veterinary. So I don't think there's anyone else that does just veterinary compounding in Australia, so there's no one that competes on the same level as we do, but there are a lot of small competitors."
4. Bova Chemist was the first pharmacy in Australia to be granted an Australian Pesticides and Veterinary Medicines Authority (APVMA) Good Manufacturing Practice (GMP) licence to manufacture veterinary chemical products and, as at June 2017, had approximately 55 employees with facilities which included 57 work stations and a highly sophisticated laboratory (the Laboratory) in Caringbah, New South Wales, for the purpose of researching and developing veterinary chemical products and formulations.
5. Additionally, Bova Chemist has a warehouse in Caringbah that stocks raw materials (the Warehouse). These raw materials are compounded in the Laboratory to create medications. Mr Bova, in his Affidavit sworn 13 June 2017 (which formed part of Ex 9), deposed to the fact that he estimated that, at any given time, Bova Chemist held raw materials with a value of $450,000 in the Warehouse, and that Bova Chemist had in excess of 30,000 formulations which it could create within a matter of hours, if required by a client.

PK Software

1. Bova Chemist's formulations are, and were as at 2017, kept within a computer software database known as the PK Compounding Software (PK Software) which also includes the instructions and methods used to create Bova Chemist's formulations.
2. Bova Chemist obtained and has continuously held a licence for PK Software since 2009. Mr Bova gave evidence that he also obtained an additional licence for Mr Corry to use on his Surface Pro computer whilst in Bova Chemist's employ. As explained below, Mr Corry had left Bova Chemist's employ in April 2017.
3. Mr Bova gave evidence that many of the formulations within the PK Software are unique to Bova Chemist and have been created by (a) Bova Chemist's employees during the course of the employment or (b) third parties engaged by Bova Chemist to develop unique medications: Affidavit of Mr Bova sworn 15 February 2019 at para 9 (First Bova Affidavit), and Affidavit of Mr Bova sworn 20 December 2019 at para 16 (Second Bova Affidavit). Mr Bova gave evidence that one of the formulations stored on the PK Software since at least 2014 was Bova Chemist's Deslorelin Formulation: Second Bova Affidavit at para 30 (CB654).
4. Mr Bova also gave evidence that in addition to the formulations, the PK Software contained the following information confidential to Bova Chemist: (a) client lists; (b) chemical lists; (c) prescriptions; (d) prices of products; and (e) purchase history of clients.
5. In his oral evidence-in-chief, Mr Bova said that the PK Software held all of Bova Chemist's information, including "every single formula we've ever sold, every client, every raw material - it's the whole business" (T326.38-40) and that, to draw a report from the PK Software of all the products that Bova Chemist had sold would be a "huge IP for anyone who's trying to set up a business in competition because it tells you exactly what the veterinarians have ordered from us over all the years" (T326.40-43).

Vivaldi

1. Vivaldi is software program that contains a database (the Vivaldi Database). The Vivaldi Database holds documents containing formulations and protocols for preparing medications and standard operating procedures, training manuals and plans in relation to the business of Bova Chemist.
2. Bova Chemist acquired Vivaldi in 2015. Mr Bova gave evidence that the database was not populated with any pre-loaded formulations when he purchased the software, and that someone needed to enter documents into the database (T333.7-15; T334.18-29). He explained that the database is a document control software in which documents can be opened, edited and saved by an employee (T350.9-20). The software records what changes were made to a document and by whom. The software does not create documents itself. It was accessed by Bova Chemist's employees regularly, with the documents within the database being amended and updated when necessary.
3. Mr Bova's evidence was that many of the documents within the Vivaldi Database contain a unique "SOP" number, which is an acronym for "Standard Operating Procedure": Second Bova Affidavit at para 21; T319.50-T320.1.
4. In cross-examination by Mr Corry, Mr Bova explained the process of generating a document from the Vivaldi Database, explaining that the user types in a password to enter into the software and can search for documents or go to a particular document. The documents are listed by SOPs, policies and procedures. Selecting a document stored in the Vivaldi Database opens the document in Microsoft Word, where the document can be viewed, changed and saved (T332.18-27).
5. Examples of such operating procedures referred to and tendered in the course of the hearing included the Compounding Process Validation SOP Number: 9.130A; the Method Validation Procedure for Liquids and Solid Dose Forms SOP Number: 9.140B; and the Good Documentation Practices, SOP Number 5.010. Each operating procedure may go through a number of versions as it is modified.

Mr Corry

1. Mr Corry and Mr Bova both studied pharmacy together at Sydney University in 2002, and became very close friends. As recently as 2014, Mr Bova was a groomsman at Mr Corry's wedding.
2. Mr Corry was initially employed by Bova Chemist in or about February 2008 as a pharmacist and research development officer. The structure of his employment changed over time, with Mr Corry subsequently providing contracting services through his company, Corry Corporation Pty Ltd (Corry Corporation), to the Second Applicant, Finn.
3. By 2012, Mr Corry had become the leading pharmacist and Chief Operations Officer at Bova Chemist. According to Mr Bova's Affidavit of 13 June 2017, Mr Corry was provided with substantial autonomy to operate and oversee the day-to-day operations of Bova Chemist's pharmaceutical business. Mr Bova said that he placed a great deal of trust in Mr Corry as he was in charge of the manufacturing arm of Bova Chemist. Amongst other things, Mr Corry was required to: (a) order inventory and equipment for Bova Chemist, including solutions and materials used to prepare prescriptions for veterinary clinics; (b) manage and oversee all pharmacists and employees of Bova Chemist who worked in the Laboratory. In doing so, Mr Corry was required to prepare, and oversee the preparation of all prescriptions ordered by veterinarians and clinics; (c) consider and develop ways to streamline and improve laboratory operations, the preparation of prescriptions, solutions and production compositions; (d) be responsible for making changes to the business to prepare for its GMP licence issued by APVMA; and (e) make all the decisions regarding the manufacturing of products and ordering of stock.
4. Mr Corry remained in the role of leading pharmacist and research development officer of Bova Chemist up until April 2017.
5. Mr Bova, who had moved to the United Kingdom in 2016 to establish operations there, gave evidence in his 13 June 2017 Affidavit that at all times between 2008 and 2017, Mr Corry had: (a) keys to Bova Chemist's principal place of business, including the Laboratory and Warehouse; (b) access to Bova's equipment and inventory used to prepare prescriptions for veterinarians and clinics; and (c) access to Bova Chemist's confidential information.
6. Mr Corry left Bova Chemist's employ in April 2017.
7. On 28 January 2016, he became a director and shareholder of Medicina Pty Ltd (Medicina). Medicina was incorporated on 28 January 2016 and, at all material times, maintained a business unit at Unit 135, 7 Hoyle Avenue, Castle Hill, NSW. The directors of Medicina as at June 2017 in addition to Mr Corry were Mr Nishnil Singh (Mr Singh) and Mr Dharmit Goradia (Mr Goradia). Medicina traded under the name NexGen Pharma (NexGen), in competition with the Applicants and Bova Chemist. The names "Medicina" and "NexGen" will be used interchangeably in this judgment.

Mr Ghaly

1. Between about May 2014 and June 2017, Mr Ghaly was employed by NHB Enterprises as a pharmacist and, for a period of about 6 months in 2017, as "pharmacist in charge" (T415.17-37). Whilst employed at Bova Chemist, Mr Ghaly oversaw prescriptions and was responsible for dealings with clients located in Queensland, Western Australia and parts of New South Wales.
2. Subsequent to his leaving Bova Chemist, Mr Ghaly took up a position with NexGen in 2018 (T404.26). Although he did not receive his first pay cheque from NexGen until January 2018, it emerged under cross-examination that Mr Ghaly was involved with NexGen from as early as June 2017. He ultimately accepted in cross-examination that he supervised various activities and a number of different aspects of the business at NexGen in the course of the second half of 2017, including overseeing processes, taking calls and observing finances (T448-449).
3. Mr Ghaly also accepted that he was involved in the establishment of the NexGen New Zealand business from as early as February 2017, when he took a trip in February 2017 to New Zealand with Mr Corry, Mr Davidson (see further at [39] and [47] below) and a Mr Malouf for what was identified as a "promoters meeting". Mr Ghaly accepted, in cross-examination, that the purpose of this meeting was to discuss, inter alia, where NexGen would set up in New Zealand, what site size was needed, and what steps would need to be taken to work out logistics to get medications from Australia to New Zealand (T440.15-T441.42).

The 2017 Proceedings

1. On 14 June 2017, the Applicants commenced proceedings in the Supreme Court of New South Wales against Mr Corry, Medicina and Corry Corporation (the 2017 Proceedings).
2. The Statement of Claim in the 2017 Proceedings which was filed on 11 January 2018 (the proceedings having originally been commenced by Summons) was lengthy and detailed. It made serious allegations of unauthorised and improper use of confidential information, breach of contract, breach of fiduciary duties and breach of statutory obligations under the Corporations Act 2001 (Cth).
3. On the same day as the 2017 Proceedings were commenced, Kunc J made a search order against Mr Corry, Medicina and Corry Corporation (the First Search Order). The application for the First Search Order was supported, inter alia, by Mr Bova's affidavit of 13 June 2017 which set out detailed allegations and concerns about conduct by Mr Corry, in particular, in the discharge of his obligations at Bova Chemist.
4. On 13 October 2017, Mr Ghaly was joined as a Defendant to the 2017 Proceedings as were Mr Brett Davidson (Mr Davidson), B J Davidson Enterprises Pty Ltd, and Messrs Singh and Goradia, trading as the partnership known as "Kurrajong Pharmacy".
5. Paragraphs 15-23 of the Statement of Claim in the 2017 Proceedings (in which the business conducted by NHB Enterprises was defined as the "Compounding Business") were as follows: "Confidential Information 15 As a result of conducting the Compounding Business, the First Plaintiff and the Second Plaintiff have created and are the owners of confidential information. 16 The information that is confidential to the Compounding Business includes the following: a. price lists (Price Lists); b. client lists (Client Lists); c. formulations (Formulations); d. lists of top selling products; e. historical list of client purchases; f database of prices for which the Compounding Business purchases products from suppliers; g. information contained in the PK Compounding Software (PK Software); and h. information contained in the Vivaldi Software Database (Vivaldi Database) (collectively, referred to as Confidential Information). 17 The First Plaintiff has a licence for the PK Software and has held that licence since at least 2009. Particulars The First Plaintiff's account number for the PK Software is 500739 18 The PK Software contained the following information confidential to the Compounding Business: a. Client Lists; b. chemical lists; c. Formulations; d. prescriptions; e. medications of the Compounding Business; f. chemicals used in the Compounding Business; g. prices of the Compounding Business' products; h purchase history of clients of the Compounding Business; and i. Formulation worksheets that are a manufacturing record created by the Compounding Business created when compounding prescription medicines and the Formulation worksheets contain the recipe for these products. 19 Each of the formulas within the PK Software is allocated a formula ID, which is unique to the First Plaintiff. 20 The formulas within the PK Software are trade secrets of the Compounding Business. Particulars The Formulation worksheets in the PK Software contain a note as follows: 'This formula is a trade secret of BOVA CHEMIST.' 21 The First Defendant entered many of the Formulations in the PK Software. Particulars On the Formulation worksheet, the First Defendant inserted his name above the notation that the formula was a trade secret. 22 Accordingly, the First Defendant knew and was aware that the Plaintiffs considered the Formulations as trade secrets of the Compounding Business. 23 The Vivaldi Database houses documents that contain Confidential Information including: a. Formulations; and b. protocols for preparing medications; and c. procedures and protocols for carrying on the Compounding Business."

Mr Davidson

1. As explained at [39] above, one of the Defendants joined to the 2017 Proceedings was Mr Davidson. Like Mr Corry, Mr Davidson had also been employed by the Applicants, and was employed by them between 2007 and 2015. Mr Davidson was not a pharmacist, but was employed as the National Sales and Marketing Manager. Mr Davidson left the Applicants' employ in 2015 and, after a brief hiatus working in real estate, was contacted by Mr Corry and commenced working with NexGen in November 2016 as the Director of Sales and Marketing. In Affidavit evidence that was not challenged in cross-examination, Mr Davidson referred to a conversation he had with Mr Corry in November 2016, as follows: "Corry: I'm leaving Bova Compounding and am in the final stages of building my own compounding business - NexGen Pharma, with Nishnil Singh, Dharmit Goradia and Rimon Ghaly. Do you want to get back into the industry and work for us[?] Me: That sounds great."
2. As also noted above, Mr Davidson, as a Defendant in the 2017 Proceedings, became a party to the First Settlement Deed. He left the employment of NexGen in August 2018.
3. Mr Davidson renewed contact with Mr Bova in late 2018 through a mutual acquaintance. It was either on that or a subsequent occasion that Mr Davidson told Mr Bova of certain matters he had observed and certain things that Mr Corry had said to him whilst in the employ of NexGen.
4. In an Affidavit sworn on 15 February 2019, Mr Davidson deposed to the fact that he: "18. …continued working for NexGen Pharma following the settlement of the 2017 Proceedings and the April 2018 Orders being entered, until August 2018. 19. Between November 2016 and August 2018 (that is, during the time that I was employed by NexGen Pharma) I observed that Corry used and carried out work on a Microsoft Surface Pro laptop (the Surface Pro). 20. Shortly after commencing work at NexGen Pharma I observed that Corry had the PK Compounding Software installed on the Surface Pro as I had seen Corry use this software at the NexGen Pharma office and recognised it from what I had observed during my employment at Bova Compounding. I became aware from Corry showing me the information on the Surface Pro, at some stage during my employment at NexGen Pharma, that the PK Compounding Software on the Surface Pro was a copy of the Bova Compounding PK Software. 21. On at least one occasion before the April 2018 Orders, Corry identified and showed me the copy of Bova Compounding PK Software on the Surface Pro and said to me, in what I considered to be a boastful manner, 'ha ha - look at this'. 22. After the April 2018 Orders, I observed that Corry did not bring the Surface Pro to work, save for one or two occasions where I observed Corry charging the Surface Pro under a desk. 23. In or about April or May 2018 (after the April 2018 Orders had been entered) Corry said to me words to the following effect: 'The Surface Pro is at home and still has all the Bova formulations on it. If they want to get it, they can come and find it'. 24. I understood Corry's reference to 'they' to be a reference to Bova Compounding". (emphasis in original). With respect to para 20 of his Affidavit, Mr Davidson confirmed during his oral evidence that he observed the PK Software "a couple of times" in the NexGen office (T187.25-26), which would have occurred approximately in the first few months of Mr Davidson commencing work at NexGen (T187.31-33).

The 2019 Proceedings

1. Relying, amongst other evidence, on Mr Davidson's Affidavit of 15 February 2019, the Applicants commenced fresh proceedings in the Supreme Court of New South Wales against Mr Corry and Medicina on 18 February 2019 (the 2019 Proceedings). A third defendant, AAA Mechanical & LPG Services Pty Ltd (AAA), was briefly joined as Third Defendant in the circumstances described more fully below.
2. On the same day that the 2019 Proceedings were commenced, the Court also made the Second Search Order, referred to at [6] above, on an ex parte basis, permitting a search to be carried out at the residential premises of Mr Corry and the business premises of Medicina, including any vehicles under their control on or about those premises, in relation to the following "Listed Things" as contained within Schedule A of the Second Search Order: "1. The Microsoft Surface Pro, serial number 068340750253, or any other computer or electronic device containing any of the documents or things set out at paragraphs 2 to 9 below. 2. any of the plaintiffs': a. price lists, b. client lists, c. formulations, d. top selling product lists; e. historical list of client purchases; and f. supplier purchase prices; 3. The plaintiff's PK Compounding Software (account number 500739), or any copy of that software. 4. The plaintiff's Vivaldi database, or any copy of that database. 5. Documents created using the plaintiffs': a. PK Compounding Software; and b. Vivaldi database. 6. Business records of the plaintiffs. 7. Accounting records of the plaintiffs; 8. Medicina Pty Ltd's Microsoft Dynamics 365 software. 9. Any documents held by Medicina Pty Ltd that record: a. the formulations used by it to compound or create medications; and b. its knowledge or use of that information referred to in paragraphs 2, 3, 4, 6 and 7 above".
3. The Second Search Order included on its front page under the bold and capitalised heading "PENAL NOTICE" the following statement, also in bold and capitals: "IF YOU (BEING THE PERSON BOUND BY THIS ORDER): (A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THE ORDER FOR THE DOING THE ACT; OR (B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU TO ABSTAIN FROM DOING, YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT. ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED". The Penal Notice was addressed to "Alexander Stephen Corry and Medicina Pty Ltd".

Execution of the Second Search Order

1. The Second Search Order was executed on the morning of 19 February 2019. As is customary, both Mr Mackenzie as Independent Solicitor and Ms Balit as Independent Computer Expert provided reports to the Court on the first return date in the 2019 Proceedings, which was 21 February 2019. Both Mr Mackenzie and Ms Balit gave evidence in the contempt proceedings and were cross-examined by Mr Corry.
2. In addition to Mr Mackenzie and Ms Balit, evidence in relation to the manner in which the Second Search Order was executed and the search implemented was given by Mr Wallman, Mr Bruce Grant (Mr Grant) (a private inquiry agent and former employee of Verifact Pty Ltd) and, to a certain extent, Mr Ghaly. Contemporaneous notes taken by Mr Mackenzie and Ms Young of their attendance at the Corry's residence were also tendered and became Ex 14 and 15.
3. Mr and Mrs Corry did not give evidence in the contempt proceedings (although an Affidavit of Mr Corry was read in support of a Notice of Motion which was heard at the beginning of the hearing of the contempt proceedings and which is referred to and dealt with more extensively below).
4. Although he was cross-examined, the account of the execution of the Second Search Order at the Corry residence given by Mr Mackenzie was largely unchallenged, and the following factual account and my findings, set out below, in relation to what occurred on 19 February 2019 derive largely from Mr Mackenzie's report to the Court, dated 21 February 2019, supplemented by his contemporaneous notes and those of Ms Young.
5. The Search Party assembled near the Corry residence, at a nearby public park, at around 8.50am on 19 February 2019. Surveillance had been separately arranged of the Corry residence, as well as NexGen's business premises in Castle Hill. Mr Grant was in the vicinity of those premises during the morning of 19 February 2019.
6. In his Independent Solicitor's Report which was annexed to his Affidavit sworn 7 May 2020, Mr Mackenzie recorded that at approximately 9.04am on 19 February 2019, Ms Young and he arrived at the Corry residence. Mr Mackenzie knocked on the front door and Mrs Corry, who Mr Mackenzie had previously met during the service and execution of the First Search Order, opened the door. Mr Mackenzie introduced himself, and had the following conversation: "Mr Mackenzie: Is Alexander Corry home? Mrs Corry: No he's left for work. Mr Mackenzie: Mrs Corry, do you have the responsible control of these premises? Mrs Corry: Yes, I guess so. Mr Mackenzie: Is there anyone else in the house besides you? Mrs Corry: Yes, my three year old daughter."

1. At approximately 9.45am, according to Mr Mackenzie's report to the Court, Mrs Corry said that she needed to bring her daughter downstairs so that she could be supervised. Mrs Corry showed Mr Mackenzie and Ms Young that she was leaving her phone on the kitchen bench. Mrs Corry subsequently returned downstairs with her daughter. Mr Mackenzie's report says that this occurred "shortly thereafter" but did not specify the time period Mrs Corry was upstairs. Ms Young's notes recorded that Mrs Corry came downstairs with her daughter at 9.45am, implying that Mrs Corry had gone upstairs earlier than Mr Mackenzie's notes recorded.
2. It is highly likely that the 180-second telephone call shown in the table set out above took place whilst Mrs Corry was upstairs with her daughter, and that Mr Mackenzie's statement of the time that Mrs Corry went upstairs which was qualified by the word "approximately" may not have been precisely accurate. As Mr Dawson observed, "[t]he curious thing about it is that Mr Mackenzie's evidence is that Mrs Corry's mobile phone was left on the counter, so that she presumably, one infers, is giving them comfort that she's not taking the phone out of the kitchen to breach the prohibited contact order or what we've called the prohibited contact warnings which she was given repeatedly by Mr Mackenzie" (T565.38). I accept Mr Dawson's further submission that the telephone records "fit perfectly into that gap" when Mrs Corry was upstairs, with the inference being that she managed to take Mr Corry's call on some other device (T574). This also strongly suggests that the 9.36am telephone call to Mrs Corry referred to at [86] was probably the first of the calls referred to in the table at [89]. I also find that it was in the course of the 180-second call that Mrs Corry communicated to Mr Corry the fact of the issue of the Second Search Order, and that it extended to NexGen's premises. There is clear evidence that Mrs Corry was the source of Mr Corry's first knowledge of the Second Search Order (see [104]-[110] below).
3. Interpolating there, Mr Ghaly gave evidence of a phone call he received from Mr Corry on 19 February 2019 which, under cross-examination, he accepted took place at about 9.45am (T517.23). Mr Ghaly's account of this conversation as set out in his Affidavit sworn 19 September 2019 was as follows: "On 19 February 2019, I received a call from the First Defendant, Mr Corry, while I was at NexGen's business address at Unit 135, 7 Hoyle Avenue, Castle Hill NSW 2154 and we had a conversation to the following effect: He said: 'Rimon, I just called Boriana [Mrs Corry] - but I can't get a hold of her.' I said: 'Okay?' He said: 'I am going home now because she should be at work or on her way. You need to get all your personal stuff and move it offsite. I don't know what the situation is - but we need to make sure that our work stuff is clearly our work stuff.' I said: 'What do you mean, what things?' He said: 'I don't know. Have a look around. Your computers, my computer, any of our personal things. There are some things in the corner of my desk. Just get rid of anything that looks like it belongs to NexGen and we can sort it out later.' I said: 'Okay.'"

1. Mr Ghaly was forcefully cross-examined about his account of the conversation with Mr Corry set out at [92] above, in particular with regard to the fact that he did not tell Mr Corry that he, Mr Ghaly, had spoken to Mrs Corry just over half an hour earlier, and had been told by her that she was not coming into work. Mr Dawson also put to Mr Ghaly but he denied that, in the conversation with Mr Corry, Mr Corry had told Mr Ghaly that there was a search order being executed at his house, and that the Search Party might come to the NexGen premises (T519). I do not accept Mr Ghaly's denial of what he was told by Mr Corry, nor do I accept that part of his account of the telephone conversation with Mr Corry in which he attributes to Mr Corry the statement that he could not get hold of his wife. Mr Corry had just had a 3 minute call with her shortly before he rang Mr Ghaly and, as shall be seen, was shortly to tell Mr Mackenzie that he found out about the search order from his wife.
2. At approximately 9.44am, Mr Grant from Verifact was conducting surveillance of NexGen's commercial premises in Castle Hill from inside his vehicle in a nearby public carpark: T102.49-T103.3. He gave evidence, confirmed by video footage that was played in Court and tendered, that he observed a male worker in his late 30s with a shaved head and wearing a blue nurse style uniform frantically walking from unit 135 (the premises of NexGen) carrying what Mr Grant described as appearing to be "a full back pack whilst conversing on his mobile phone". Mr Grant observed the male walk into the nearby factory unit (unit no 132) and quickly left the bag just to the left of the counter, before jogging back to unit 135.
3. Unit 132 was the premises of AAA (see [64] above). Mr Grant observed the same man walking out of unit 135 again, carrying a computer monitor and placing it at unit 132, and thereafter jogging back to unit 135. Video footage was played in Court consistent with Mr Grant's observations. The bald headed man observed by Mr Grant was Mr Ghaly.
4. In a written report of his surveillance dated 21 February 2019, Mr Grant made the following observations in relation to his surveillance of the commercial premises in Castle Hill between 9.47am until 1.00pm: "9:47am The aforementioned male walked out of unit 135 carrying a large amount of what appeared to be books/documents in his hands and left them at unit number 132, before returning to unit 135. 9:51am The aforementioned male was seen as he walked out of unit 135 and places several sheets of paper into a green [bin] and a [sic] other documents into a nearby security blue bin. 9:53am The same male was observed as [he] carried more documents from unit 153 [sic: 135] to the 132 unit before returning to 135. 10:00am Same male seen walking from unit 135 to unit 132 carrying a large plastic tub full of documents, which he left there and returned to 135. 10:01am To 1.00pm the same male was seen on many occasions walking around outside unit 135 whilst conversing on his mobile phone and appeared to be on edge. 1:00pm As instructed we ceased surveillance and depart the area."

Key material seized

1. Key material seized from the Corry residence, as recorded in Mr Mackenzie's report, included: (i) a Microsoft Surface Pro Laptop (Serial No. 068240750253) (Surface Pro); and (ii) hard copy documents from the study (Mackenzie Report at paras 55-56, CB842 and Annexures B and C to the Mackenzie Report).
2. The hard copy documents seized included: (i) a document titled "Good Documentation Practices, SOP Number 5.010" (SOP 5.010): Affidavit of Mr Wallman affirmed 20 December 2019 at para 26(a) (Wallman Affidavit) and pp 159-165 of Ex NMW-4; and (ii) untitled documents in the same format as the SOP 5.010 document, containing words to the effect of "this procedure applies to all personnel at Bova Compounding Chemist" (Untitled SOP Document): Wallman Affidavit at para 26(b) (CB275), and pp 166-171 of Ex NMW-4 (CB453-458).
3. Key material seized from the AAA premises included: (i) HP Pavilion (all-in-one) (Serial No. 8CC640013W) (HP Pavilion); (ii) Apple MacBook Pro Laptop (Serial No. C02QX7UFG8WP) (Large MacBook); (iii) Apple MacBook Air Laptop (Serial No. C02TCJ3LGVC1) (Small MacBook); (iv) Apple iPhone 6S (Serial No. C39XL2ELKPH6); and (v) hard copy documents. (Mackenzie Report at paras 71-73, CB844 and Annexures E and F to the Mackenzie Report, CB860-863).
4. When Mr Wallman logged on to the Surface Pro during his oral evidence, the login screen read "Alex Corry" (T244.35-41). Similarly, the login that Mr Wallman used to access the HP Pavilion during his evidence read "Alex" (T265.38-39). Mr Ghaly gave evidence that the HP Pavilion was a device that was located on Mr Corry's desk at NexGen's premises (T521.5-6) and that Mr Corry used it for work (T521.8-9). Mr Corry did not challenge this evidence by way of cross-examination.
5. Mr Ghaly confirmed in his oral evidence that the Large and Small MacBooks belonged to him and that he used these whilst he was at NexGen (T405.12-18; T406.10-12) and when Mr Wallman logged on to the Large MacBook during his oral evidence, the login screen read "Rimon Ghaly" (T260.30-33).
6. What was located on the Surface Pro and HP Pavilion is described in more detail later in these reasons.
7. In addition to the hard copy documents, laptops and iPhone seized during the searches, Ms Balit gained access to a Microsoft Dynamics 365 Platform (the Dynamics Account) used by the NexGen business during the search of the NexGen premises on 19 February 2019.

The 2019 Statement of Claim

1. A Statement of Claim in the 2019 Proceedings was filed on 2 May 2019. That pleading added three Defendants in addition to Mr Corry and Medicina, namely, Messrs Singh, Goradia and Ghaly. Messrs Singh and Goradia were directors of Medicina and had also been parties to the First Settlement Deed.
2. The Statement of Claim sought, amongst other relief, a declaration that the Defendants were in breach of Orders 1, 2 and 3 of the April 2018 Orders. As noted at [44] above, the April 2018 Orders were made on 17 April 2018, although they were referred to in the Statement of Claim as having been made on 16 April 2018.
3. The Statement of Claim pleaded out the facts of the 2017 Proceedings, the settlement of those proceedings and the making of the April 2018 Orders as part of that settlement.
4. Paragraphs 42-48 of the Statement of Claim then pleaded out the sequence of events which has been detailed more fully above as follows "CONSENT ORDERS 42. On or about 16 April 2018, orders were made by the Court in the 2017 Proceedings in accordance with the consent orders referred to in paragraph 38 above (Consent Orders). 43. In the premises, the Defendants were obliged, in accordance with their obligations pursuant to the Terms of Settlement and the Deed of Settlement and Release (Settlement): a. to destroy or deliver up the Confidential Information; and b. not to access, download, transfer, interfere with, disclose, copy, use, or exploit the Confidential Information for a period of 4 years from the date on which the Consent Orders were made. 44. On or about 7 May 2018, the solicitors for the Plaintiffs wrote to the solicitors for the Defendants in the 2017 Proceedings noting, in substance, that they had not received any documents from the Defendants in accordance with orders 1 and 2 of the Consent Orders and seeking confirmation by 8 May 2018 that the Defendants did not have any documents in their possession, custody or control that would fall within orders 1 and 2 of the Consent Orders. 45. On or about 11 May 2018, the solicitors for the Defendants in the 2017 Proceedings sent an email to the solicitors for the Plaintiffs in which they stated, in substance, that they were instructed by each of the Defendants that they each had no documents in their possession, custody or control that would fall within orders 1 and 2 of the Consent Orders. SECOND SEARCH ORDER 46. On 18 February 2019: a. the Plaintiffs commenced these proceedings against the First and Second Defendants; and b. his Honour Kunc J made orders permitting a search order to be carried out at the premises of the First Defendant and the Second Defendant (Second Search Order). 47. The Second Search Order was executed on 19 February 2019. 48. On 19 February 2019, and prior to the execution of the Second Search Order at the Second Defendant's premises, but during the execution of the Second Search Order at the First Defendant's premises, the Fifth Defendant [Mr Ghaly] removed items from the premises of the Second Defendant and moved them to the neighbouring business known as AAA Mechanical & LPG Service Pty Ltd. It may be inferred that the Fifth Defendant removed the items at the direction of the First Defendant acting as the agent of the Second Defendant."

The Second Settlement

1. A mediation in relation to the 2019 Proceedings took place on 5 June 2019 and the proceedings resolved as between the Applicants, Medicina and Messrs Singh, Goradia and Ghaly (the Settling Parties). Mr Corry was not a party to the mediation and Mrs Corry was not a named defendant in the 2019 Proceedings.
2. A mediation position paper prepared on behalf of the Applicants was in evidence. [CB 1116]. This set out the allegation in the 2019 Statement of Claim relating to the alleged breaches of the April 2018 Orders, and stated at para 57 that: "Any settlement of these proceedings will need to ensure that there does not need to be a third chapter in the disputes between the parties. The Plaintiffs come to the mediation, in good faith, on the basis that it is an opportunity to achieve that."
3. Mr Ghaly gave unchallenged evidence that, in his opening statement of the mediation, Senior Counsel for the Applicants had stated that Mr Ghaly's breach of the Second Search Order constituted a "criminal act by him".
4. The terms of the settlement (the Second Settlement Terms) included the following: "… 3. The second, third, fourth and fifth defendants will pay, in full and final settlement of the plaintiffs' claims against them, the amount of $1 million, for which payment they are jointly and severally liable, as follows: a. the sum of $300,000 within 28 days of the date of these Terms of Settlement; b. the sum of $100,000 per month, to be paid by the tenth day of each month thereafter from August 2019 subject to c below; c. the final instalment shall be reduced by any stock owned by the second defendant purchased by the plaintiffs at their discretion at a price to be agreed between the settling parties. 4. In the event of a default in the payments required by clause 3 above, the full amount of the balance owing shall become immediately payable by the defendants. 5. The second, third, fourth and fifth defendants agree immediately to cease conducting any business of the second defendant which involves the compounding of veterinary medications or any medications compounded for animal use, and to limit any compounding as part of the business of the second defendant to the compounding of medications for human use for a period of five years from the date of these Terms of Settlement. To give effect to this clause 5, the second, third, fourth and fifth defendants will remove within 7 days of the date of these Terms of Settlement all reference on the second defendant's website to services or products related to the compounding of veterinary medications or any medications for animal use. 6. The second, third, fourth and fifth defendants agree not to conduct any business or engage in any activity involving the compounding of veterinary medications or any medications compounded for animal use for a period of five years from the date of these Terms of Settlement. 7. The second, third, fourth and fifth defendants acknowledge that, in the event of an application for an interlocutory injunction in respect of a breach of clause 6 above, damages are not an adequate remedy. 8. The second, third, fourth and fifth defendants: a. must immediately take all reasonable steps and permanently prohibit any access by the first defendant to the premises of the second defendant; b. must delete or deliver up to the plaintiffs, within seven days, any part of the Confidential Information as that term is defined in the statement of claim filed on 2 May 2019 in the 2019 Proceedings, namely: i. any part of the PK Software and/or the Vivaldi Database (as those terms are defined in the statement of claim filed in the 2017 Proceedings) in their possession, custody or control; ii. any document in their possession, custody or control which was created using in any way the PK Software and/or the Vivaldi Database c. are immediately and permanently restrained from using in any way any item of Confidential Information, including but not limited to: i. price lists; ii. client lists; iii. formulation lists; iv. top-selling product list; v. historical list of client purchases; vi. supply purchase price; vii. documents created using the plaintiffs' PK Software; and viii. documents created using the plaintiffs' Vivaldi Database. d. provide immediate access to the plaintiffs or their nominated representative(s), upon the plaintiffs giving 24 hours' notice of their intention to exercise such access, to the business premises of the second defendant and the premises at which the third, fourth and fifth defendants each reside, so as to permit the plaintiffs to be provided with and to search for and destroy and/or delete any document or thing, whether in hard copy or electronic form, which they assess to be: i. an item of Confidential Information; ii. a document or thing which may be used for the purpose of the compounding of veterinary medications or any medications for animal use, such access to be available to the plaintiffs for the 28 day period from the date of these Terms of Settlement; e. provide to the plaintiffs any and all passwords, access codes et cetera required to access and use any electronic device and/or software platform (including, but not limited to, the second defendant's Microsoft Dynamics 365 account) for the purpose of the plaintiffs in carrying out the search and destruction/deletion of the documents and things referred to in c above; f. must delete any email sent from or received by any email address associated with the plaintiffs, including but not limited to: i. ii. iii. iv. ".

What was found on the Surface Pro and HP Pavilion and at the AAA premises and Corry residence

1. Unsurprisingly, each of the electronic devices seized contained a great deal of data. Some of what was found was described in Affidavit evidence by Mr Wallman. He also explained the care which was taken to ensure the integrity of that which was seized, so that there could be no suggestion of corruption or interference with what was on the various computers subsequent to their seizure.
2. In the course of his oral evidence, Mr Wallman demonstrated how he went about identifying material on the various computer devices. This involved him, in the course of his oral evidence, selecting the Microsoft Outlook icon from the desktop of the Surface Pro, which in turn brought up email accounts for the email addresses "alexc@bovacompounding.com.au" and "alexc@bova.com.au" (T252.21-T253.38). Screenshots of these images were in evidence. The Surface Pro also had on it Mr Corry's NexGen email account, "alex@nexgenpharma.com.au". That email account contained emails within a date range of 12 May 2016 and 22 March 2019 (T258.6-11), with the last of these dates being the day on which the Second Search Order was obtained. This in turn was relied upon to support an inference that the Surface Pro was in active use by Mr Corry in the period represented by the date range.
3. Mr Wallman's evidence was that the Bova email account contained 58,874 items in the inbox, 31,047 items in the sent items folder, 197 items in the drafts folder and 213 items in the deleted items folder: Wallman Affidavit at paras 33(g)(i)-(iv) (CB278). He also gave evidence that he caused searches for key terms to be carried out within the alexc@bova.com.au email account: Wallman Affidavit at para 33(g) (CB278) (T256.23-26). Those searches produced 8,010 items using the word "Bova", 38 items using the words "Bova Price Data", 83 items using the words "Bova Formulations", 80 items using the word "Vivaldi", and 48 items using the abbreviation "HCG", this being a shorthand reference to Des/hCG referred to at [51] above: Wallman Affidavit at paras 33(g)(a)-(e) (CB278) and pp 288-296 of Ex NMW-4 (CB574-582).

What was found on the Large and Small MacBooks

1. It was common ground that the Large and Small MacBooks belonged to Mr Ghaly, although it may also readily be inferred that he used them in and for the purposes of his work at NexGen.
2. As shall be explained below, the charges against Mr Ghaly were confined to his possession of a relatively small number of documents and the case, as ultimately pressed, was confined to some six documents, three of which Mr Ghaly accepted should have been returned pursuant to the April 2018 Orders.
3. These documents and the three documents about which there is a dispute, will be dealt with in more detail later in these reasons.
4. The course of the evidence disclosed that, in addition to the documents that were the subject of the Statement of Charge against Mr Ghaly, his Mac Books contained many other documents or data that originated from Bova Chemist and which were covered by the April 2018 Orders. The forensic relevance of this was that it bore upon the credibility of Mr Ghaly's contention that the documents specified in the Statement of Charge were only retained by him inadvertently or by oversight. The retention of other documents was said by the Applicants to evidence the contumacious nature of the contempt with which Mr Ghaly was charged.
5. The most striking of these additional documents was a document found on one of Mr Ghaly's MacBooks titled "Competitor Analysis". This was an Excel spreadsheet which Mr Bova described as being a report generated out of Bova Chemist's PK Software by the data mining function of the software which facilitated the preparation of reports. The spreadsheet permitted fields to be selected including in relation to product, year and quantity. The information contained in the spreadsheet included product sales for 2014-2015 and unit prices. This date range was significant in that it predated the establishment of the NexGen business. The metadata in relation to this document also disclosed that the content had been created in November 2016, probative evidence of the fact that it was generated whilst Messrs Corry and Ghaly were still employed by Bova Chemist and that the spreadsheet, or part of it at least, was generated using the PK Software.
6. Mr Bova said of the information contained in this spreadsheet (T326.31-36): "So if you're able to generate all the products that we sell, which is what this is, then it gives you a very good basis to then go and see a - they know all our prices, they know all our products, then they can go and - it makes it much easier to look at the competitors and go okay, well what's the competitor selling that particular product for? And it's very easy to create a document then because you've got our full list of products."

The making of the charges

1. On 14 August 2019, the Applicants filed a Notice of Motion, seeking declarations that each of Mr and Mrs Corry and Mr Ghaly was in contempt of Court in various differing respects. This Notice of Motion was amended on 20 December 2019, and the amended Notice of Motion annexed the Statement of Charge and sought declarations that each of Mr and Mrs Corry and Mr Ghaly was in contempt of Court as charged in the Statement of Charge.
2. It may be observed that the Notice of Motion was brought in the 2019 proceedings in which Mrs Corry had not and has not been joined as a Defendant.
3. Further, although Mr Ghaly was a party to those proceedings, they should have been dismissed as against him by reason of cl 9 of the Second Settlement Terms: see [151] above.
4. The individual charges will be dealt with separately below after consideration of the applicable legal principles and consideration of a preliminary matter raised by Mr Corry.

Contempt of court - relevant legal principles

1. As outlined by Campbell J in NCR Australia v Credit Connection [2005] NSWSC 1118 at [21] (NCR), the expression "contempt of court" covers a variety of types of legal wrong, all of which have an element in them of interfering with the administration of justice in the courts.
2. At common law, breach of a Court order amounts to a contempt: see In the matter of Jimmy's Recipe Pty Limited [2020] NSWSC 93 at [67] (Jimmy's Recipe); Australasian Meat Industry Employees' Union v Mudginberri Station Proprietary Limited (1986) 161 CLR 98 at 113; [1986] HCA 46 (Mudginberri); and Bellerive Homes Pty Ltd v FW Projects Pty Ltd [2019] NSWSC 193 at [38] (Bellerive). In Toyota Finance Australia Limited v AJI Enterprise Group Pty Ltd [2019] NSWSC 33 at [115] (Toyota Finance), Ward CJ in Eq noted that breaches of court orders "fall within the traditional classification of civil contempt".
3. Where contempt is said to consist of failure to comply with a court order, it must be demonstrated that the contempt was wilful, and not merely casual, accidental or unintentional: see Mahaffy v Mahaffy (2018) 97 NSWLR 119; [2018] NSWCA 42 at [92] (Mahaffy); Commonwealth Bank of Australia v Salvato (No 4) [2013] NSWSC 321 at [127] (Salvato); Reliance Financial Services Pty Ltd v Allyma Express Holdings Pty Ltd (No 2) [2018] NSWSC 1776 at [79]-[80]; Furlong v Wise & Young [2019] NSWSC 1718 at [98] (Furlong); Markisic v Commonwealth of Australia (2007) 69 NSWLR 737; [2007] NSWCA 92 at [64] (Markisic); and Mudginberri at 113.
4. As will be seen below, proceedings for criminal contempt may be brought in the Court's civil jurisdiction. This raises a nice legal question as to the appropriate standard of proof.
5. The overwhelming weight of authority is strongly in favour of the criminal standard of proof applying to proceedings such as the present and, as noted at [2] above, the Applicants did not contend otherwise: see, eg, Witham v Holloway (1995) 183 CLR 525 at 534; [1995] HCA 3 (Witham); Jimmy's Recipe at [51]; Mirus Australia Pty Ltd v Gage [2017] NSWSC 1046 at [118] (Mirus); Salvato at [17]; Mahaffy at [92]; and NCR at [27]. In NCR, Campbell J noted (at [27]) that the criminal standard of proof was required due to the "punitive nature" of proceedings for contempt.
6. In Eshow, however, White JA observed that: "23 I add the following observation in relation to the appeal from the declaration made by Fagan J that the appellant was guilty of contempt of court. 24 The contempt with which the appellant was charged was a civil contempt. He submitted that the charge had to be proved beyond reasonable doubt, applying Witham v Holloway (1995) 183 CLR 525. The primary judge applied Witham v Holloway in finding that the charge needed to be established beyond reasonable doubt. His Honour was satisfied beyond reasonable doubt that the contempt charged was committed. 25 Accordingly, this appeal is not an appropriate vehicle for considering the application of Witham v Holloway to proof of alleged civil contempts in proceedings to which the Evidence Act 1995 (NSW) applies. Section 140 prescribes the civil standard of proof on the balance of probabilities, but having regard to the nature of the subject matter of the proceedings and the gravity of the matters alleged, in a 'civil proceeding'. Section 141 prescribes the criminal standard of proof beyond reasonable doubt in a 'criminal proceeding'. Both terms are defined. These provisions were not in issue in Witham v Holloway where the trial preceded the introduction of the Act. (See Australian Securities and Investments Commission v Sigalla (No. 4) (2011) 80 NSWLR 113; [2011] NSWSC 62.)" Mr Hyde, who appeared for Mr Ghaly, properly drew these observations to the Court's attention. As, however, the Applicants accepted that the criminal standard applied, and as my decisions in relation to the relevant charges did not turn on different standards of proof, I have proceeded on the basis as urged by the Applicants, namely, to apply the criminal standard of proof.

Nature of contempt proceedings

1. As to the nature of contempt proceedings, the characterisation of contempt proceedings as being "criminal" by White J (as his Honour then was) in Australian Securities and Investments Commission v Sigalla (No 4) (2011) 80 NSWLR 113; [2011] NSWSC 62 at [87] (Sigalla) has been criticised by the High Court, the Victorian Court of Appeal and the Victorian Supreme Court.
2. In Construction, Forestry, Mining and Energy Union v Grocon Constructors (Victoria) Pty Ltd (2014) 47 VR 527; [2014] VSCA 261 at [498] (Grocon), the Victorian Court of Appeal noted that contempt proceedings "have a certain chameleon-like quality. They take their character from their surrounding circumstances, and the context within which the analysis proceeds".
3. This chameleon-like quality of such proceedings was also noted by Zammit J in Fortune Holding Group Pty Ltd v Zhang (No 2) [2017] VSC 738 at [28], where his Honour observed that Victorian courts have declined to follow Sigalla and to adopt the characterisation of contempt proceedings as "criminal", indicating instead that contempt proceedings use a "hybrid" of criminal and civil rules.
4. In Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375; [2015] HCA 21 at [35] (Boral), the plurality of the High Court noted that "the contempt proceeding is not a criminal proceeding" and, with reference to the High Court's earlier decision in Witham at 549, noted that proceedings for contempt of court to punish a respondent are "civil and not criminal proceedings". In Boral at [59], Nettle J observed that: "Although the requirement that contempt be proved beyond reasonable doubt is the consequence of contempt proceedings being 'essentially criminal in nature', it does not mean that a contempt proceeding attracts all of the features of the criminal justice system. As was remarked in Witham v Holloway: 'to say that proceedings for contempt are essentially criminal in nature is not to equate them with the trial of a criminal charge. There are clear procedural differences'." (footnotes omitted).
5. More recently, in Kostov v YPOL Pty Ltd (2018) 98 NSWLR 1002; [2018] NSWCA 306 at [17], the NSW Court of Appeal observed that: "at least where a charge of criminal contempt is brought in the Supreme Court by motion in civil proceedings, as defined in the CP Act, s 3(1), that Act and the UCPR apply: CP Act, s 4(1), Sch 1; UCPR, r 1.5(1), Sch 1." (emphasis in original).

Types of contempt

1. Although it has been subject to criticism, the traditional distinction between civil and criminal contempt has not been abolished: see Sigalla at [11]; Toyota Finance at [114]; Furlong at [93]; and Mirus at [116].
2. The traditional rationale for the distinction was articulated in Witham at 531, where the plurality outlined that: "The basis of the distinction between civil and criminal contempt is said to lie in the difference between proceedings which are remedial or coercive in the interest of the private individual and proceedings in the public interest to vindicate judicial authority or maintain the integrity of the judicial process." (footnote omitted).
3. The distinction between civil and criminal contempt was described in general terms by McHugh J in Witham at 538-539, as follows: "Criminal contempts are acts or omissions that have a tendency to interfere with or undermine the authority, performance or dignity of the courts of justice or those who participate in their proceedings. Although criminal contempts take many forms, their characteristic attribute is an interference with the due administration of justice either in a particular case or as part of a continuing process. Defiance of the court or its procedures, publication of matters scandalising the court, actions calculated to prejudice the fair trial of a pending case, threats to parties or witnesses and misconduct within the court are examples of criminal contempts. Civil contempts, on the other hand, are concerned with failures to comply with judgments or orders of the courts. But civil and criminal contempt overlap. Thus, disobedience to the order of a court constitutes criminal contempt when the disobedience is contumacious. Defiance of the court's order renders criminal what would be otherwise civil contempt. Where non-compliance with a judgment or order goes beyond mere breach and involves misconduct, civil contempt also has 'a penal or disciplinary jurisdiction [that is] exercised by the court in the public interest'." (emphasis added, footnotes omitted).
4. The notion that criminal contempt involves "contumacious" disobedience to the orders of the Court is a well-established proposition, as reiterated in a number of decisions including Furlong at [95]; Jimmy's Recipe at [60]; Pang v Bydand Holdings Pty Ltd [2011] NSWCA 69 at [73]-[74] (Pang); Cohen v Double Bay Bowling Club [2019] NSWSC 1625 at [202] (Cohen); Australian Consolidated Press Limited v Morgan (1965) 112 CLR 483 at 489; [1965] HCA 21 (Morgan); and Mudginberri at 108. In Cohen at [202], Henry J noted that traditionally a criminal contempt is committed where, inter alia, a prima facie civil contempt involves deliberate defiance or is contumacious: see also Morgan at 489.

Procedural requirements

1. In Furlong at [101], Ward CJ in Eq summarised the various procedural requirements to be satisfied on a hearing of a contempt charge, noting, with reference to Lane v The Registrar of the Supreme Court of New South Wales (Equity Division) (1981) 148 CLR 245 at 257; [1981] HCA 35, that the charge must be distinctly stated and that the party bringing the charge of contempt will be held to the precise formulation of the charge. Her Honour referred to Construction, Forestry, Mining & Energy Union v BHP Steel (AIS) Pty Ltd [2001] FCA 1758 at [32], where Lee and Finn JJ said that "[u]nless and until an application is allowed to alter a particularised statement of charge, the accused is entitled to insist that he or she is only required to meet the charge as made". See also Mirus at [119]; and McDonnell v Novello [2006] NSWSC 1186 at [26].
2. Further, in Mahaffy at [92], Simpson JA noted that a charge of contempt should specify the nature of the contempt by providing proper particulars, and that there can be no conviction for contempt by breach of an order which is ambiguous, there relying on Lewis v Ogden (1984) 153 CLR 682 at 693; [1984] HCA 26 and Morgan.
3. The Applicants drew attention to the decision of Woolf LJ, as his Lordship then was, in Harmsworth v Harmsworth [1987] 1 WLR 1676 at 1686, as follows: "What is not required by the relevant rules is that the notice of the motion should be drafted as though it was an indictment in criminal proceedings. While a respondent is required to be given particulars of what is alleged to be the breach, the particulars do not need to be set out in the same way as separate counts have to be set out in an indictment, nor do they need to give the particulars that you would normally expect to be seen in a count in an indictment. Furthermore, in my view, rules of duplicity and other rules which are designed to ensure the fairness of a trial before a jury, do not apply to proceedings of a different nature which are brought in respect of an alleged contempt."
4. This decision was applied in Matthews v ASIC [2009] NSWCA 155 at [45] (Matthews) and in O'Connor v Hough [2016] 2 Qd R 543; [2016] QSC 4 at [14] (O'Connor). See also O'Connor at [29], where Burns J observed that "the rule against duplicity does not apply to a proceeding for contempt". This is long-established. In Concrete Constructions Pty Ltd v Plumbers and Gasfitters Employees' Union (No 2) (1987) 15 FCR 64 at 74 (Concrete Constructions), Wilcox J said that "[t]he principle of duplicitous pleading has no place in the law of contempt."

Cases involving non-compliance with Court orders

1. In Anderson v Hassett [2007] NSWSC 1310, the Defendant executor had been ordered to produce to the Court all of the records of the administration of the estate the subject of the proceedings. The Plaintiff, on whose application the order had been made, charged that the Defendant was guilty of contempt by failing to produce all of the relevant documents. It was submitted on behalf of the Defendant that it was not enough for there to be a contempt that there be an act or omission in breach of the Court's order, but that this had to be accompanied by an intention to disobey the Court's order. Brereton J, as his Honour then was, rejected this submission. His Honour found the defendant guilty of contempt on the basis that he had in his possession documents covered by the order, which he did not produce. The breach was not "casual, accidental or unintentional" in the relevant sense (at [35]), and it did not matter that the defendant had no specific intention to defy the Court's order (at [8]).
2. In Markisic, the Appellant made a charge of contempt against the Commissioner of the Australian Federal Police. In the proceedings at first instance, the Appellant had caused a subpoena to be issued to the Commissioner, and had claimed that the Commissioner had failed to produce all of the documents caught by the subpoena. Campbell JA (with whom Handley AJA and Bell J agreed) said (at [61]): "The appellant submits that it is quite clear that there has been non- compliance with the subpoena, because the Commissioner has not produced the documents referred to in it. However, mere non-production of documents that are called for by a subpoena, or other court order to produce documents, is insufficient to establish that there has been a contempt. As well, it needs to be established that, at the date on which the documents were required to be produced, the alleged contemnor had documents that met the description of the documents called for by the subpoena or other order to produce: Re Bramblevale Ltd [1970] 1 Ch 128 at 137-138; Thorpe v Marr's Furniture Removals Pty Ltd (ACN 056 093 853) [2000] QSC 279 at [11]; Wyszynski v Bill [2005] NSWSC 110 at [59]-[61]." His Honour concluded (at [64]) that: "…proof that a contempt has been committed by breaching a court order involves proving enough to conclude that the action or inaction said to constitute the breach was deliberate, and not casual, accidental or unintentional."

A preliminary matter - alleged non-disclosure

1. The hearing of this application was originally set down for three days from 29 April 2020. Due to logistical difficulties in conducting a hearing at that time on account of the COVID-19 crisis, that hearing date was vacated and the hearing was listed for three days on 20 July 2020, with a fourth day, being 23 July 2020, being a reserve day, if needed. (As matters transpired, the evidence was heard over 5 days, submissions one month later over 2 days, and further written submissions were received in September 2020).
2. On Friday 17 July 2020 at approximately 4.42pm, Mr Corry forwarded to my Chambers and to the other parties a copy of a Notice of Motion of that date (Mr Corry's Notice of Motion) together with an Affidavit of that same date. In that Notice of Motion, Mr Corry sought wide ranging relief including the discharge of the Second Search Order, the return and restraint of use made of documents obtained pursuant to the search which had been made, and the dismissal of the Notice of Motion for contempt. In terms, the relief sought in the Notice of Motion relevantly was as follows: " … 4 The Orders (including contingent orders which rely on these orders) entered 18th February 2019 and 19th February 2019 by his Honour Justice Kunc in NSW Supreme Court Proceedings (2019/0054125) NHB Enterprises Pty Ltd v Corry (the Search Order), save but for any cross-claims filed in the Proceedings, are discharged; and 5 The [Applicants] or their solicitors are directed to return the following: a. The Accessible and Inaccessible devices, save but for the Ghaly Computers; and b. All documents and copies of documents; 6 The [Applicants] or their solicitors are directed to delete or destroy: a. Any data that was obtained from the Accessible and Inaccessible Devices; and b. Any images contained on any hard-drive that was created of the Accessible and Inaccessible devices in any form; and c. Any screen-shots that have been taken or obtained from any devices inspected or obtained in the course of the execution of the Second Search Order or which belongs to the First and Second Applicant 7 The [Applicants] are directed to immediately destroy all copies of documents obtained or images created from the Accessible and Inaccessible devices; and 8 The [Applicants] are directed to immediately destroy any password to the First Corry Email Account; and the Second Corry Email Account and the Second Defendant, within 24 hours of the entry of these orders to the extent that it is possible, it [sic] to cause the passwords to those accounts to be changed and not provided to the [Applicants] or their solicitors or any agent acting on their behalf except with further order of the Court; and 9 The Independent Computer Expert is to deliver up to the Independent Solicitor any material in its possession obtained in the [sic] during NSW Supreme Court Proceedings (2019/0054125) NHB Enterprises Pty Ltd v Corry. 10 The Independent Solicitor is permitted to retain relevant copy or copies of the data used to produce the reports tendered in the Proceedings on condition that those copies are not used or further disclosed to the: [Applicants]; their solicitors; Mr Davidson; or any representative for Mr Davidson, without further order of this Court. 11 The [Applicants] are restrained from relying on any material obtained during the execution of the Search Order on the 18th February 2019 and 19th February 2019. 12 An order that the [Applicants'] notice of motion filed 14th August 2019 and Amended Notice of Motion 20th December 2019 be dismissed. In the alternative to 12 above: 13 An order that the [Applicants'] notice of motion filed 14th August 2019 and Amended Notice of Motion filed 20th December 2019 is permanently stayed. 14 Any costs orders made payable to the [Applicants] in the Proceedings are vacated; and …"

Mr Corry's contentions with respect to his Notice of Motion

1. The thrust of Mr Corry's argument for the discharge of the Second Search Order, the return of documents obtained pursuant to it, the restraint sought to be put on the Applicants in relation to their use and the ultimate dismissal of the contempt application, was put on the basis of alleged non-disclosure of material matters to Kunc J on 18 February 2019, when the ex parte application for the Second Search Order was made by the Applicants.
2. In his Affidavit sworn 17 July 2020, Mr Corry asserted that it was the fact and the Applicants should have disclosed that: "i. Mr Davidson had accepted a paid engagement with the Plaintiffs' in direct competition with the Second Defendant which included a bonus payable on Mr Davidson causing the Plaintiffs' to obtain the Second Defendant's client NVC; and ii. The Plaintiffs' solicitors had drafted the contract with Mr Davidson and were aware that Mr Davidson was conducting work on behalf of the Plaintiffs' at the time he swore his 15th February 2019 affidavit in support of the Second Search Order; and … iv. Mr Davidson was subject to the restraints provided by the First Deed of Release which I have deposed to above; and v. Mr Davidson served a Creditor's Statutory Demand on the Second Defendant in the period immediately before the hearing for and execution of the Second Search Order; vi. Mr Bova was aware that Mr Davidson intended to and did serve a Creditor's Statutory Demand immediately before the execution of the Second Search Order; and vii. The Plaintiffs' had engaged Ms Balit privately during the First Proceedings; and viii. Ms Balit had not been formally engaged by the Plaintiffs' when Mr Wallman swore his affidavit on the 13th August 2019; and …".
3. There were two other matters which Mr Corry also said had not been disclosed, but he did not press these matters in his oral submissions.
4. Mr Corry led evidence as to the existence of a contract between Mr Davidson, B J Davidson Enterprises Pty Ltd defined as the Contractor and Finn, by which the Contractor agreed to ensure that Mr Davidson acted as a consultant helping to assist the sales and marketing teams at Bova Consulting "to grow the business" (the Davidson Contract). The Davidson Contract was executed by Mr Bova on behalf of Finn on 9 February 2019 and by Mr Davidson on his own behalf and on behalf of B J Davidson Enterprises Pty Ltd on 12 February 2019. It had a commencement date of 11 February 2019. Item 5 of Sch 1 of the Davidson Contract included provision for a bonus payment in the following terms: "• Subject to paragraph (b) below, the Contractor will be eligible to receive a bonus payment of up to $25,000 (gross) where the Contractor plays an active role in the Company obtaining the corporate account for National Vet Care including, without limitation, the Contractor imparting knowledge of past dealings with National Vet Care; • Endeavouring to contact any senior employees of National Vet Care; Communicating and training/preparing the Company's team leader(s) with the processes the Contractor regards as being in the Company's interest to secure the National Vet Care account."

Consideration

1. Mr Corry's argument based on alleged non-disclosure should be rejected.
2. In relation to the non-disclosure of the Davidson Contract, it is simply not apparent how the non-disclosure of that contract was or would have been material to the Court's decision whether or not to issue the Second Search Order. In oral address, Mr Corry submitted that the non-disclosure of the Davidson Contract in some way "robbed the parties … from [the opportunity of] resolving the matter in a manner that didn't require a search order and litigation" (T23.36-38). It is not obvious to me how these matters were logically connected but, more significantly, Mr Corry's submission does not explain the materiality of the non-disclosure to the issue of the Second Search Order. What was material to that order was the evidence put before the Court which was not affected or diminished by the existence or otherwise of the Davidson Contract.
3. Next, contrary to Mr Corry's submission, the fact that Mr Davidson was subject to the restraints provided by the first Deed of Release was equally not material to the issue of the Second Search Order.
4. In relation to the alleged non-disclosure of the issue of the creditor's statutory demand, as has been noted above, there was disclosure in Mr Davidson's Affidavit that he was, at the time he swore that Affidavit in February 2019, seeking to recover outstanding wages and expenses. The non-disclosure of the fact that a statutory demand had been issued was not material in circumstances where there had been disclosure of the fact that Mr Davidson claimed that he was owed and was seeking to recover outstanding monies.
5. In relation to the alleged non-disclosure in relation to Ms Balit, Mr Corry's claim that she had not been formally engaged by the Plaintiffs when Mr Wallman swore his Affidavit on 13 August 2019 was not established on the facts, and was in fact contradicted by evidence of Mr Wallman, which I accept. I also accept the submission made on behalf of the Applicants that the alleged non-disclosure in relation to Ms Balit was not material and irrelevant to the application for the Second Search Order on 18 February 2019.
6. Insofar as the Notice of Motion sought dismissal of the contempt application against Mrs Corry, that contention was put on the basis that proceedings should have been commenced against her by way of Summons rather than by way of Notice of Motion in proceedings to which she was not a party. This objection was, at best, one of form and not substance. In this respect, Mrs Corry relied upon the judgment of Powell JA in Abram v National Australia Bank Ltd [1997] NSWCA 7 at 24, where his Honour, in obiter remarks, said: "For my own part, I am quite unable to understand upon what basis a party to proceedings can be said to be able, by interlocutory motion in those proceedings, to seek to have persons who are not parties to those proceedings dealt with by the Court for contempt of court, particularly so where, as in this case, the contempt charged is criminal contempt." What this passage which was relied upon by Mr Corry omitted was the fact that Powell JA appeared to accept, in another part of his judgment, that contempts involving the disobedience of a Court order in a particular Division of the Court were appropriately brought by Notices of Motion under Pt 55, r 6 of the Supreme Court Rules.

The charges against Mr Corry

1. By the Statement of Charge, the Applicants charged that, in wilful disobedience and contravention of the April 2018 Orders, Mr Corry retained the PK Software Database and the Vivaldi Database in his possession, custody or control; retained documents which were created using the PK Software and the Vivaldi Database in his possession, custody or control; and retained hard copies of documents comprising or containing the Listed Things and/or Confidential Information (the First Corry Charge).
2. The Confidential Information referred to in the Statement of Charge was defined as any and all documents or information owned by the Plaintiffs or either of them, including price lists, client lists, formulation lists, top selling product lists, historical lists of client purchases, supplier purchase prices, documents created using Bova Chemist's PK Software, and documents created using the Vivaldi Database.
3. The Applicants also charged that, in wilful disobedience and contravention of the April 2018 Orders, Mr Corry accessed, downloaded, transferred, interfered with, disclosed, copied, exploited and/or otherwise used the Confidential Information owned by the Applicant (the Second Corry Charge).
4. The Applicants also charged that Mr Corry frustrated the Second Search Order (the Third Corry Charge) as follows: "Prior to the execution of the Search Order at the business premises of Medicina: a) The First Respondent contacted the Third Respondent at the premises of Medicina by telephone prior to or during the execution of the Search Order at the First Respondent's residential premises and directed him to remove items constituting or containing the Listed Things referred to in the Search Order from the business premises of Medicina before the execution of the Search Order at those premises (Medicina Items); b) the Third Respondent removed the Medicina Items from the business premises of Medicina to the business premises of AAA Mechanical & LPG Service Pty Ltd; and c) an order was made by the Court on 19 February 2019 extending the Search Order to permit the search of business premises belonging to AAA Mechanical & LPG Service Pty Ltd (19 February 2019 Orders)." This conduct was alleged to constitute a breach of the Prohibited Contact Order in wilful disobedience and contravention of the Second Search Order.
5. In their opening submissions, the Applicants contended that: "[t]he First Respondent's conduct in directing the Third Respondent to remove those items prior to arrival of the search party to execute the Second Search Order at the premises of Medicina was not only a breach of the Prohibited Contact Order but also a deliberate attempt to frustrate the execution of the Search Order and therefore amounted to an interference with the due administration of justice. It involved brazen defiance of the Court's authority and the orders it had made".

The First Corry Charge - retention of documents

1. I have set out earlier in these reasons my findings as to what was found in the course of the execution of the Second Search Order on Mr Corry's Surface Pro, on the HP Pavilion, at NexGen's premises and the adjacent AAA premises, and at the Corry residence. That included the PK Software, the Vivaldi Database and documents created using the PK Software.
2. Mr Corry submitted that the First Corry Charge did not contain the requisite precision, and referred to the decision in Furlong which has been noted at [209] above. Mr Corry's submissions did not, however, elaborate upon why this was so, other than to state that "[t]he definition that is provided in the [S]tatement of [C]harge introduces ambiguity because it alters the word 'formulation list' to 'formulations'". Paragraph 20 of the Statement of Charge picks up the term "Confidential Information", as defined in para 5(c), as well as the term "Listed Things", which is identified in para 17 of the Statement of Charge. In the definition of "Confidential Information", a number of generic types of documents are set out including "formulation lists", after which is contained in parentheses the word "Formulations". There is no ambiguity in the author of the Statement of Charge deploying the shorthand "Formulations" for "formulation lists". There is no merit in Mr Corry's submission.
3. Mr Corry then submitted that the First Corry Charge "disclose[d] no offence known to law". Mr Corry's written submission in support of this contention stated that "[i]n the absence of proof by the Applicants that delivery up did not occur on the terms of the orders retention is not unlawful retention. Therefore the Paragraph 20 Charge discloses no offence known to law and should be dismissed" (footnote omitted). This submission is somewhat elusive. It seems on the one hand at least implicitly to accept that documents were retained. So long as such documents which were located on the various computers and at NexGen, AAA and the Corry residence could be identified by reference to the documents described in the April 2018 Orders as required to be delivered up, it is self-evident that delivery up did not occur. The evidence of Mr Bova to which I have referred earlier in these reasons together with some of Mr Ghaly's evidence elicited under cross-examination established that various documents found on Mr Corry's Surface Pro were created using the PK Software: see [154]-[171] above.

The Second Corry Charge - use of the Confidential Information

1. The Applicants also charged that Mr Corry accessed, downloaded, transferred, interfered with, disclosed, copied, exploited and/or otherwise used the Listed Things and Confidential Information owned by the Applicants. The definition of "Confidential Information" as contained in the Statement of Charge has been referred to at [253] above.
2. Such alleged use included the copying and/or use of Bova Chemist's formulations to create Des/hCG.
3. Further, the Applicants charged that Mr Corry used and/or exploited the Confidential Information in order to generate sales of Des/hCG by NexGen and/or enabled NexGen to use and/or exploit the Confidential Information in order to generate sales of Des/hCG in circumstances where Mr Corry knew of the terms of the April 2018 Orders, and knew that on their face they prevented the use of the Confidential Information.
4. It was submitted by the Applicants that this conduct was contumacious.
5. Mr Corry submitted that this charge was both patently and latently duplicitous. It was said to be patently duplicitous because insofar as the Second Corry Charge entailed the use of Confidential Information by Mr Corry in order to enable or achieve sales by NexGen of certain products, it was in effect also charging a breach by NexGen. This submission was misconceived. The charge is confined to a breach by Mr Corry. That he was alleged to have used the Applicants' Confidential Information in order to achieve or secure sales for NexGen was a means of demonstrating his breach.
6. In any event, and more fundamentally, as has already been observed in these reasons, even if a charge of contempt is duplicitous, that is no answer to such a charge.
7. Mr Corry also made a submission that the Second Corry Charge infringed the rule against double jeopardy. This submission was particularly elusive and was, in truth, misconceived. The proceedings are brought in this Court's civil jurisdiction and Mr Corry has not previously been convicted in relation to any previous relevant conduct in any event.
8. Mr Corry also advanced an argument in his written submissions in reliance on the First Settlement Deed, to the effect that: "the Applicants relinquished their right to claim any documents or information in the First Deed of Settlement after they received payment of $100,000 personally from the First Respondent and $350,000 separately from the Second Defendant because paragraph 4 under the heading 'Releases' at 4.1 provided that: 'release and forever discharge, the First Defendant and the Third Defendant (and their related bodies corporate, associated entities, officers, agents, employees, and assigns) from all Claims' that the Applicants 'could, would, or might at any time have, or have had, including any Claim arising directly or indirectly out of or in connection with: (i) the subject matter of the Proceedings and claims made in the Proceedings'." (emphasis in original). Mr Corry submitted that the Applicants "now have no claim of right".

1. In addition, there was in evidence, located in the Dynamics Account that was accessed in the course of the search, a number of orders and invoices recording sales of Deslorelin between August and November 2018. There was also evidence of a sale in a text message exchange between Mr Davidson and Mr David Pascoe of Pascoe's Oakey Vet Hospital, in which the latter confirmed that he used the Des/hCG injection from NexGen (Annexure C to Mr Davidson's Affidavit).
2. It was also charged that it could be inferred from the particular conduct in relation to Des/hCG that Mr Corry copied and/or used the Applicants' formulations to create other formulations which were exactly or substantially the same as the Applicants' formulations, and/or enabled NexGen to do so.
3. It was submitted that the fact that Mr Corry had the PK Software and Vivaldi Databases on devices he used as part of the NexGen business was a strong indicator that he was using the Applicants' formulations and other documents extensively in order to operate the NexGen business. In particular, it was submitted that: (i) the Surface Pro had on it Mr Corry's NexGen email account containing emails within a date range of 12 May 2016 and 22 March 2019 - suggesting ongoing and recent use of that account; (ii) the Surface Pro contained the PK Software and the Vivaldi Database; (iii) the HP Pavilion, the desktop computer used by Mr Corry in the offices of NexGen, contained the PK Software.
4. In all of the circumstances, I draw the inference that Mr Corry continued to make extensive use of the PK Software and data stored on it in the ongoing business of NexGen. Mr Corry had not only taken that software and data with him when he left Bova Chemist in order to join a rival start up business in direct competition with Bova Chemist, but had retained that material notwithstanding the first set of proceedings in 2017 and the First Settlement Deed. The only purpose of taking that material in the first place and then retaining it in the face of the April 2018 Orders, was because of its obvious value for the NexGen business and Mr Corry's determination to use it. Although the Surface Pro was located at Mr Corry's home rather than the NexGen premises, it was in active use, and Mr Davidson's evidence confirmed that it was being used in the NexGen business.
5. Mr Corry's role in directing Mr Ghaly to remove computers and documents from the NexGen premises on the morning of the execution of the Second Search Order also supports the conclusion that it was in active use at the time of the execution of the Second Search Order.

The Third Corry Charge

1. The third charge against Mr Corry is, in my opinion, problematic. It is that: "In wilful disobedience and contravention of the Search Order, [Mr Corry] breached the Prohibited Contact Order by contacting and instructing [Mr Ghaly] as particularised above".
2. The reference to contacting and instructing Mr Ghaly is to para 17(a) of the Statement of Charge, which is in these terms: "The First Respondent [Mr Corry] contacted the Third Respondent [Mr Ghaly] at the premises of Medicina by telephone prior to or during the execution of the Search Order at the First Respondent's residential premises and directed him to remove items constituting or containing the Listed Things referred to in the Search Order from the business premises of Medicina before the execution of the Search Order at those premises (Medicina Items)".
3. This in turn is a reference to the telephone conversation between Mr Corry and Mr Ghaly discussed at [92]-[95] above.
4. It is not suggested that Mr Corry had been served with the Second Search Order by the time of this telephone conversation. In fact, on the evidence, this did not occur until after his return to his house at about 10.30am.
5. On the other hand, I have found that Mr Corry became aware of the Second Search Order as a result of a telephone conversation with his wife, and that this telephone conversation occurred shortly and probably immediately prior to Mr Corry's telephone conversation with Mr Ghaly referred to at [92] above.
6. There is also no doubt in my mind that the purpose of Mr Corry's telephone conversation with Mr Ghaly was to attempt to frustrate the efficacy of the execution of the Second Search Order by means of removing material from the NexGen premises that Mr Corry, by the time of his telephone conversation with Mr Ghaly, expected were soon to be searched.
7. However, unlike the Fourth Corry Charge which is dealt with below and which is expressed in terms of "attempt[ing] to and/or deliberately frustrat[ing] the execution of the Search Order", the Third Corry Charge is not so expressed.
8. Whether or not Mr Corry committed contempt is to be determined by reference to the terms of the particular charge(s) made against him. If that charge is not made out but there is evidence that was capable of sustaining a different charge, that is beside the point in the absence of any application to amend the Statement of Charge.

The Fourth Corry Charge

1. The Fourth Corry Charge was that: "In wilful disobedience of the Search Order, [Mr Corry] attempted to and/or did deliberately frustrate the execution of the Search Order by preventing the Independent Computer Expert downloading the Dynamics Account as particularised above."
2. The particulars relied upon were as follows: "On 21 February 2019, part way through the download of the Microsoft Office Dynamics account forming part of the Listed Things specified in the Search Order (Dynamics Account) the First Respondent attempted to and/or did deliberately frustrate the execution of the Search Order by changing the password to the email/username alex@nexgenpharma.com.au used to access that account by the Independent Computer Expert and thereby prevented the Independent Computer Expert from searching and copying the Dynamics Account in accordance with the Search Order."
3. The Applicants submitted that Mr Corry's conduct constituted a breach of the following provisions of the Second Search Order: a. paragraph 9(e) which provided that he had to do all things necessary to enable the search party to access the Listed Things, including opening or providing keys to locks and enabling them to access and operate computers and providing them with all necessary passwords and providing them with access to all email accounts; b. paragraph 9(g) which provided that he had to permit the Independent Computer Expert to search any computer and make a copy or digital copy of any computer hard drive and permit the Independent Computer Expert or the Independent Solicitor to remove any computer hard drive and computer from the premises; c. paragraph 26 which provided that, until 4.30pm on the return date (21 February 2019), he could not destroy, tamper with, cancel or part with possession, power, custody or control of the Listed Things otherwise than in accordance with the terms of the Second Search Order or further order of the Court.
4. The Applicants also submitted that Mr Corry's conduct otherwise involved a deliberate interference with the due administration of justice and brazen defiance of the Court's authority and the orders it had made. Their closing written submission was that: "Mr Corry's disruption to the download of the Dynamics Account reflected his awareness that the search would (or could) expose that he had retained and used material in breach of the 17 April 2018 Orders. It was a desperate and audacious attempt to disrupt the search process and an act of extreme defiance of the court's authority and the execution of the orders that had been made, particularly after his conduct the day before."

The charge against Mrs Corry

1. The sole charge against Mrs Corry is as follows: "In wilful disobedience and contravention of the Search Order, the Second Respondent breached the Prohibited Contact Order and/or helped or permitted the First Respondent to breach the Prohibited Contact Order by informing the First Respondent about the Search Order as particularised above".
2. Mr Corry, who made submissions with the Court's leave on behalf of Mrs Corry, submitted that this charge was duplicitous by reason of the use of the expression "and/or", and sought to call in aid authorities concerned with criminal procedure to support this contention. Mr Corry referred in particular to Sigalla for the proposition that contempt is an offence at common law (T621.26-29)
3. This submission presupposed that such authorities and the law in relation to criminal procedure applied. That was, however, as has been pointed out earlier in these reasons, incorrect. Even though the Applicants are alleging that the contempt is criminal, the application is brought in the Court's civil jurisdiction, and although the Applicants accepted that the criminal standard of proof applies, questions of procedure are governed by the Civil Procedure Act 2005 (NSW) and the Uniform Civil Procedure Rules 2005 (NSW): see Dowling at [60].
4. In Grocon at [195], the Victorian Court of Appeal observed that: "In Mudginberri (HC) the Court cautioned against treating the criminal nature of contempt as equating the proceedings for that offence with those of a trial of a criminal charge. The Court recognised that there were clear procedural differences between the two types of proceeding [(1986) 161 CLR 98 at 115]. In truth, neither civil nor criminal contempt can simply be described as part of the criminal law. And so, at least before X7 and Lee, it could not be sweepingly asserted that all procedures applicable to criminal proceedings were to be imported into proceedings for contempt." (footnote omitted).
5. In Matthews at [165], Basten JA quoted with approval the observation of Wilcox J in Concrete Constructions at 74, that the "principle of duplicitous pleading has no place in the law of contempt", although his Honour emphasised, by reference to Coward v Stapleton (1953) 90 CLR 573 at 579-580; [1953] HCA 48, that "no person ought to be punished for contempt of court unless the specific charge against him be distinctly stated and an opportunity of answering it given to him". The need for a defendant to a charge of contempt to have a sufficiently clear view of the terms or formulation of the charge so as to permit a fair trial is plain.

The Charge against Mr Ghaly

1. It is important to appreciate that, whilst much attention at the trial was focused on Mr Ghaly's actions on the morning of the execution of the Second Search Order as I have noted at [92]-[101] above, Mr Ghaly was not charged with contempt for his role in removing various items and computers from NexGen's premises and taking them to the AAA premises immediately adjacent to the NexGen premises.
2. The precise charge against Mr Ghaly was as follows: "In wilful disobedience and contravention of the 17 April 2018 Order, the Third Respondent retained the Listed Things and/or Confidential Information as particularised above".
3. One superficial difficulty with the formulation of the charge against Mr Ghaly in the Statement of Charge was that the capitalised term "Listed Things" was nowhere defined in the Statement of Charge, although paragraph 17(a) of the Statement of Charge does refer to "the Listed Things referred to in the Search Order". Similarly, para 19 refers to "the Listed Things specified in the Search Order".
4. It was tolerably clear that the reference to "Listed Things" in the Statement of Charge against Mr Ghaly was both intended to be, and understood by him and his counsel as being, a reference to the "things" listed in the Second Search Order. Indeed, the Second Search Order contains a definition of "listed things" which was "any thing referred to in Schedule A to this order".
5. Moreover, the reference in the Statement of Charge to "as particularised above" was a reference to para 11 of the Statement of Charge which stated that, in breach of the April 2018 Orders, Mr Ghaly retained some 13 documents on his Mac Book which was obtained from the search of the AAA premises. To the extent that a point was sought to be taken with regard to the absence of a definition of "Listed Things" in the Statement of Charge, it was without merit.
6. Of the 13 documents referred to in para 11 of the Statement of Charge, the Applicants ultimately only pressed the charge against Mr Ghaly in respect of five of these documents. Of these five documents, Mr Ghaly conceded that three documents fell within the ambit of the April 2018 Orders and had been retained by him (albeit, he contended, inadvertently) whilst two documents were disputed.
7. Mr Ghaly's claim inadvertently to have retained these three documents was relevant to whether or not a charge of criminal contempt could be made out because, as noted above, for a contempt of that character to be made out, it needs to be established that a breach of the Court's orders was not innocent or inadvertent but, rather, was contumacious. The three documents admitted to having been retained by Mr Ghaly in breach of the April 2018 Orders were described in the Statement of Charge as: (i) "an email dated 12 May 2017 from Sean O'Leary to Ben Sykes, Nick Bova, Rimon Ghaly, Asha Vasu, Maree Caristo and Tammy Nguyen attaching a document entitled 5.007 - RECALL OF PRODUCTS PRODUCED IN ANTICIPATION OF AN INSTRUCTION AND PRODUCED UNDER LICENCE BY THE APVMA" (Document 1); (ii) an "Email from Sean O'Leary to Nick Bova, Ben Sykes, Asha Vasu, Rimon Ghaly and Alex Corry dated 8 February 2017 attaching SOP instructions" (Document 6); and (iii) an "Email from Rimon Ghaly to dated 17 March 2017 attaching SOP for Dispensing and Compounding" (Document 9).

A complete answer to the charge against Mr Ghaly?

1. Before considering the debate in relation to Documents 3 and 8 and Mr Ghaly's claim that his retention of Documents 1, 6 and 9 was inadvertent, it is necessary to consider a more fundamental objection raised to the charge against Mr Ghaly by reference to the settlement that Mr Ghaly had entered into with the Applicants in relation to the 2019 Proceedings on 5 June 2019, as detailed at [146]-[153] above. In the 2019 Proceedings, as has been noted, the Applicants as Plaintiffs had sought as against Mr Ghaly a declaration that he had breached the April 2018 Orders, as well as damages and injunctive relief. As has also been noted earlier in these reasons, a mediation took place between the Applicants and all of the Defendants to the 2019 Proceedings, other than Mr Corry, which resulted in a settlement of the proceedings.
2. It will be recalled that cl 15 of the Second Settlement Terms provided that: "The parties mutually release and discharge each other from all claims made in the 2019 Proceedings made in the statement of claim and in the first cross-claim filed on 30 May 2019". This release and discharge formed part of the Second Settlement Terms by which Mr Ghaly together with Medicina and two of its directors (other than Mr Corry), agreed to pay: "…in full and final settlement of the plaintiffs' claims against them, the amount of $1 million, for which payment they are jointly and severally liable, as follows: a. the sum of $300,000 within 28 days of the date of these Terms of Settlement; b. the sum of $100,000 per month, to be paid by the tenth day of each month thereafter from August 2019 subject to c below; c. the final instalment shall be reduced by any stock owned by the second defendant purchased by the plaintiffs at their discretion at a price to be agreed between the settling parties."
3. Clause 9(b) of the Second Settlement Terms also provided for consent orders for "the dismissal of the claims against the second, third, fourth and fifth defendants set out in the statement of claim". It was common ground that the settlement sum had been paid but that, contrary to what was contemplated by cl 9(b), no order had been made dismissing the claims against the settling defendants which included Mr Ghaly. Indeed, the Notice of Motion charging contempt was brought in the 2019 Proceedings.
4. In November 2019, Mr Ghaly had sought to have the contempt proceedings brought against him stayed. In an ex tempore decision delivered on 26 November 2019, revised and reissued on 29 November 2019, Parker J declined in the exercise of his discretion to grant the stay of proceedings sought by Mr Ghaly: see NHB Enterprises Pty Ltd v Corry [2019] NSWSC 1659. His Honour considered that it was not appropriate to deal with the matter in the summary fashion sought by Mr Ghaly: at [31]. His Honour went on to observe at [35]-[37] that: "35 It is easy to sympathise with the frustration which Mr Ghaly must feel, especially in the light of the statements that were made at the mediation to which I have referred. On the face of it, there could be a substantial advantage to Mr Ghaly if the question of construction raised by his application could be dealt with in advance of the hearing, which is currently scheduled for April and involves other parties. But for reasons I have given, that could only be achieved by co-operation on the part of the plaintiffs, and the plaintiffs are not prepared to cooperate. 36 If Mr Ghaly sustained his contention concerning the release, that would be a reasonable basis for the Court to decline to punish any contempt he may have committed. The Court might also refuse to award the plaintiffs any costs of the contempt proceedings, or even award costs of the contempt proceedings against them. And, even if, strictly speaking, the release in cl 15 does not apply to the present proceedings, then the circumstances of the release might well be a reason why the Court would take that approach in any event. 37 Nothing I say in this judgment should encourage the plaintiffs in any belief that the Court will necessarily look favourably on attempts by them to reagitate allegations of breach which they have settled in good faith and for which they have received a sum of money. But the conclusion I have reached is that I cannot, in the face of the plaintiffs' opposition, deal in a summary way with the arguments that are raised by Mr Ghaly."

Consideration

1. The effect of the settlement of the claims in the 2019 Proceedings against Mr Ghaly was, in my opinion, that the Applicants could not assert as the foundation for their contempt claim against him, his failure to comply with the April 2018 orders. This was the legal effect of the compromise, and the Applicants thereafter could not and cannot be heard to say, whatever be the true state of affairs, that Mr Ghaly had failed to comply with the April 2018 Orders.
2. In Prudential Assurance Co Ltd v McBains Cooper [2000] 1 WLR 2000 at 2005 (Prudential Assurance), Brooke LJ, with whom Peter Gibson and Robert Walker LJJ agreed, said: "It is elementary that parties to private litigation are at liberty to resolve their differences by a compromise, and that an unimpeached compromise represents the end of the dispute or disputes from which it arose: see Foskett, The Law and Practice of Compromise, 4th ed. (1996), p. 90, citing Plumley v Horrells (1869) 20 LT 473, per Lord Romilly MR and Knowles v Roberts (1888) 38 Ch.D. 263, 272, per Bowen L.J."
3. The most recent edition of D Foskett, Foskett on Compromise (9th ed, 2020, Sweet & Maxwell) at 95 states that: "An unimpeached compromise represents the end of the dispute or disputes from which it arose. Any issues of fact or law that may have formed the subject matter of the original dispute are buried beneath the surface of the compromise. The court will not permit them to be raised afresh in the context of a new action. If the parties have agreed that their original dispute may be resurrected in certain circumstances then, of course, the position may be different. The principle has been neatly stated judicially on a number of occasions: In Plumley v Horrell (1869) 20 L.T. 473 at [3-60], Lord Romilly MR said this: 'Prima facie everybody would suppose that a compromise means that the question is not to be tried over again. That is the first meaning of compromise. When I compromise a law suit with my adversary, I mean that the question is not to be tried over again.'" (footnotes omitted).
4. In Knowles v Roberts (1888) 38 Ch D 263 at 272, referred to in Prudential Assurance at 2005, Bowen LJ observed that the effect of a compromise was that a party to it could not "raise again every single matter which was the subject of dispute before". His Lordship said at 272 that "[a]s soon as you have ended a dispute by a compromise you have disposed of it", and that a party was precluded from raising "the matters which were the subject of the previous dispute". It may be noted that this language is broader than the "causes of action" which formed the basis of the previous dispute.

Claimed inadvertent retention by Mr Ghaly

1. In the event that I am wrong in my conclusion as to the effect of cl 15 of the Second Settlement Terms, it is appropriate that I express a contingent view as to whether Documents 3 and 8 were retained in breach of the April 2018 Orders, and whether or not any retention (including of the admittedly retained Documents 1, 6 and 9) was inadvertent, as Mr Ghaly maintained.
2. With regard to Document 3, the real issue was whether or not it was a document that was from the Vivaldi Database. It was not recorded as such when the O'Leary Affidavit was affirmed for the purposes of the 2017 Proceedings. On the other hand, Mr Ghaly appeared to accept under cross-examination that the document was a Standard Operating Procedure from the Vivaldi Database: (T497.32-35 and T499.12-15) although it must be said that at other points in his evidence, he said he did not know whether it was on or came from the Vivaldi Database. He also indicated that it was simply a Microsoft Word Document: T498.28.
3. Reliance was placed on Mr Bova's evidence that he had tried to search for the SOP by title and was unable to find it in the Vivaldi Database, but that when he used a keyword search, he found the exact document with a different title. He said the document was "word for word exactly the same" and that just because the SOP he had checked it against had a date of 16 April 2018 did not mean that that was the date it had been originally created: T385.17-22. Mr Bova's evidence was that the SOP was not in the table of contents exhibited to the O'Leary Affidavit because the SOP number had been changed after November 2017: T387.30-42.
4. The evidence in relation to Document 3 was "messy", to say the least. It began with what was in truth little more than an assertion by Mr Bova based upon the format of the document and its nature as a SOP. The evidence was improved by some further checking he undertook in the course of the hearing and for the purposes of his evidence, but still involved elements of assertion. Whilst I am of the view that Document 3 was likely to have been on the Vivaldi Database and hence was caught by the April 2018 Orders, notwithstanding Mr Ghaly's evidence that I have highlighted at [418] above, I am not able to be satisfied of this beyond reasonable doubt.
5. With regard to Document 8, again I am unable to conclude that the spreadsheet attached to the email of 7 March 2017 came from the PK Software and as such was required to be delivered up pursuant to the April 2018 Orders. The entirety of the evidence in relation to this document was as summarised at [379] above. It rose no higher than evidence that the document may have derived from either point of sale data or the PK Software, and Mr Ghaly was not sure of which source.

Conclusion

1. I make the following orders: 1. Declare that the First Respondent was in contempt of this Court by engaging in the conduct in the circumstances described in each of Charges 1, 2 and 4 (being paras 20, 21 and 23) of the Statement of Charge annexed to the Applicants' Notice of Motion filed on 20 December 2019. 2. Dismiss Charge 3 against the First Respondent, being para 22 of the Statement of Charge annexed to the Applicants' Notice of Motion filed on 20 December 2019. 3. Declare that the Second Respondent was in contempt of this Court by engaging in the conduct in the circumstances in the first alternative described in para 24 of the Statement of Charge annexed to the Applicants' Notice of Motion filed on 20 December 2019. 4. Dismiss the charge against the Third Respondent, being para 25 of the Statement of Charge annexed to the Applicants' Notice of Motion filed on 20 December 2019. 5. Dismiss the Notice of Motion filed by the First Respondent on 17 July 2020 with costs. 6. Direct the parties to file any submissions on the question of costs of no more than 4 pages by 2 July 2021, and any reply of no more than 2 pages by 16 July 2021. 7. Fix a directions hearing in relation to the remaining phase of the hearing at 9.30am on 22 July 2021, with any proposed directions as to the penalty hearing to be filed with the Associate to Bell P and served by 9.30am on 20 July 2021.

Appendix, Statement of Charge (2169835, pdf) DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 24 June 2021