The findings in relation to the charges
17 In order to judge the appropriateness of the sentences, it is necessary to examine the findings of the primary judge in relation to the various contempts and the circumstances in which they were committed. In relation to charges 36, 37, 52, 55, 57, 61 and 67, those findings are in the reasons for judgment published as Deckers Outdoor Corporation Pty Ltd v Farley (No 6) [2010] FCA 391.
18 Charge 36 is dealt with at [105]-[106]. At [105], his Honour said that the applicant relied on the evidence summarised at [63]-[65]. Those paragraphs appear to contain a summary of part of the evidence relating to two occasions on which search orders were executed at a factory in Roper Street, Brunswick ("the Roper Street factory"). The first of these occasions was 13 November 2007 and the second 12 December 2007. The appellant was present on both occasions. The evidence summarised deals with what was found on the premises on the two occasions. On 12 December 2007, there was present a quantity of products infringing the injunctions that had been granted, as well as machinery and materials appropriate for the manufacture of sheepskin footwear. On the face of it, this evidence appears to have nothing to do with the charge that, on 7 and 8 December 2007, the appellant and Millhouse Pty Ltd deliberately and voluntarily distributed, disposed and dealt with Enjoined Products and/or procured or induced a person to offer to sell and sell Enjoined Products, by supplying those products in boxes bearing the name "Millhouse" to a person outside the Roper Street factory, which were then offered by sale and sold by that person on the following day at stall number C44 at the Queen Victoria Market.
19 After the reference to [63]-[65], the primary judge referred to evidence of a Ms Sommer and a Ms Farley that a man they observed at stall C44 was selling many pairs of boots branded with the respondent's trademarks. His Honour referred to photographic evidence showing those marks on the footwear. At [106], his Honour said:
Josef Vaysman denied Charge 36. He admitted that the photographs taken by Ms Sommer and Ms Farley were of his stall at the Victoria Market and that he had made the products shown in the photograph. He admitted that he had personally glued a sole with Ugg branding onto a boot. He maintained, however, that none of the items of sheepskin footwear in the photographs were Enjoined Products (as defined in the 27 November 2007 orders). I do not accept his evidence. His admission that he had glued "a sole with Ugg branding onto a boot" is, literally, true. However it represents a gross understatement. The undisputed evidence of many witnesses was that he was involved in the manufacture of a very large number of counterfeit boots. The photographs clearly show sheepskin footwear bearing the "Ugg Australia" logo.
20 The evidence to which his Honour referred appears to be that summarised at [83]. Apparently, Ms Farley and Ms Sommer attended the Queen Victoria Market on 8 December 2007. At stall number C44, they observed a man selling footwear, the same man they had seen at the Roper Street factory the previous evening. They saw the same bags that he had carried out of the Roper Street factory. They saw a box labelled "Joseph/Australia". They purchased some footwear with one of the respondent's marks moulded into the sole and took photographs depicting boots with such a mark on a label sewn onto them.
21 At [81], there is a summary of the evidence of Ms Sommer and Ms Farley of what occurred on 7 December 2007 at the Roper Street factory. They saw the man whom they saw on the following day at the Queen Victoria Market enter the factory. Subsequently, he left with the appellant, who was carrying two large boxes of sheepskin footwear with the name "Millhouse" on their sides. The tops of the boxes were open and sheepskin footwear was visible inside them in photographs taken by Ms Farley and Ms Sommer.
22 Despite charge 36 having in its terms specific reference to the appellant supplying infringing products in boxes bearing the name "Millhouse" to a person outside the Roper Street factory, which products were then offered for sale at stall number C44, his Honour did not refer to the evidence summarised in [81] in dealing with this charge. Nevertheless, at [174], his Honour expressed the finding that the respondent had proved beyond reasonable doubt that the appellant deliberately engaged in the conduct alleged in (among other charges) charge number 36.
23 At [107]-[111], the primary judge dealt with charge 37. This charge alleged that the appellant deliberately and voluntarily manufactured Enjoined Products at the Roper Street factory from 27 November 2007 to 12 December 2007.
24 At [107], his Honour referred to evidence of the search of the Roper Street factory on 12 December 2007. He said that he had dealt with the evidence at [81]-[82]. In fact, that evidence is found at [64]-[65]. I have referred to it in [18] above. His Honour also referred to the observations of Ms Sommer and Ms Farley on 7 and 8 December 2007, which he said was at [94]-[96]. In fact, that evidence is found at [81]-[83] (see [20]-[21] above). At [109]-[111], his Honour said:
[109] In addition to the evidence which is summarised above at [81]-[82] [sic] Mr Watson said that, when he attended the Roper Street Factory on 12 December 2007 (to execute a search warrant issued by the Court), Josef was present. Until Vladimir arrived, no person other than Josef and Polina Vaysman was apparently in control of the factory. During the 12 December 2007 search Josef paced around the factory and moved items on the workbenches. He was told by Mr Wilson that he could call a solicitor about the search order and that he could isolate any privileged documents but that he may not conceal anything. Josef said words to the effect that he did not understand English. Mr Wilson observed Josef attempt to hide documents. Mr Wilson again told Josef that he may not hide anything. Josef told Mr Wilson that he did not understand. Josef also said to Mr Wilson words to the effect that selling Ugg boots was his job for many years.
[110] Josef admitted that, when his son, Vladimir, was not present at the Roper Street Factory, he carried out the supervision of the factory necessary for the production of the scuffs, slippers, baby bootees, moccasins, short and tall boots. Josef denied that he deliberately and voluntarily manufactured the Enjoined Products at the Roper Street factory from 27 November 2007 to 12 December 2007. He admitted that he manufactured moccasins, sheepskin footwear, slippers and bootees but denied ever manufacturing anything that bore the word Ugg. He denied the accusation that he attempted to hide documents by putting them under a couch during the 12 December 2007 search of the Roper Street Factory. He repeated that he did not read English and would not have known what any of the documents that he was alleged to have put under the couch were. The items he was moving around the Roper Street Factory during the 12 December 2007 search were moccasins, scuffs, slippers and bootees. He maintained that he was not involved in the manufacture and distribution of sheepskin footwear other than moccasins, scuffs, slippers and bootees, which he made for sale at the Victoria Market and other markets.
[111] I do not accept Josef Vaysman's denial that he manufactured counterfeit products at the Roper Street Factory between 27 November and 12 December 2007. Production of footwear was continuing when Mr Watson returned to the premises on 12 December 2007. Large quantities of Ugg branded products were found which had not been there two weeks earlier. Josef Vaysman was on the premises and apparently in control. He admitted undertaking the manufacture of sheepskin footwear at relevant times. I reject his denial that that footwear (or some of it) had Ugg labels attached to it.
At [174], his Honour found that the respondent had proved beyond reasonable doubt that the appellant deliberately engaged in the conduct alleged in charge 37. It is clear that the evidence on which his Honour relied was entirely circumstantial. Although the charge alleged manufacture during a particular period, there was no evidence at all as to what was manufactured at any particular time, or by whom it was manufactured. The foundation for his Honour's conclusion at [111] that large quantities of Ugg branded products were found which had not been there two weeks earlier is obscure. I can find no evidence as to what was or was not at the Roper Street factory on 28 November 2007, the day after the orders concerned were made.
25 The primary judge dealt with charge 52 at [112]:
It was common ground that, despite being served with the 26 November 2007 Orders, as at 6 February 2008, Josef Vaysman had not complied with those orders. He said that he was not aware of the 26 November 2007 Orders or that he was required to file an affidavit of his assets until his then solicitor, Mr Goldsmith, informed him of this in mid-February 2008. Josef filed an affidavit in compliance with the 26 November 2007 Orders on 27 February 2008.
26 It is significant that his Honour did not reject the appellant's evidence that he was not aware of the requirement to file an affidavit of his assets until his solicitor informed him of the requirement in mid-February 2008. It appears that, at worst, the appellant was three weeks late in complying with an order to file an affidavit. The primary judge's finding that he was satisfied that the respondent had proved this charge beyond reasonable doubt is again found at [174].
27 At [104], the primary judge said that the appellant was the sole director and shareholder of Millhouse Pty Ltd from 27 November 2007 until at least 6 June 2008, HGU Pty Ltd and Taskinc Pty Ltd from 26 September 2006 until at least 6 June 2008, and Vernon Co Pty Ltd from 8 December 2006 until at least 6 June 2008. The primary judge dealt with charges 55, 57, 61 and 67 at [113]-[115]:
[113] It was common ground that, despite his solicitors being served with the 26 November 2007 Orders and the 14 December 2007 Orders, as at 6 June 2008, Josef Vaysman had not caused Millhouse Pty Ltd, HGU Pty Ltd, Taskinc Pty Ltd and Vernon Co Pty Ltd to comply with those orders. Sealed copies of the 14 December 2007 Orders were duly served by courier on Vernon Pty Ltd at 11 Ellington Street, Caulfield South and on Rastov Pty Ltd at Unit 1, No 544 New Street, Brighton.
[114] Josef asserted that, prior to preparing his affidavit on 1 April 2008, he had never heard of the companies Millhouse Pty Ltd, Vernon Co Pty Ltd, HGU Pty Ltd or Taskinc Pty Ltd, he did not know anything about those companies, and he did not know that he was the sole director of those companies. He understood at the date of preparing the affidavit that Millhouse Pty Ltd, Vernon Co Pty Ltd, HGU Pty Ltd and Taskinc Pty Ltd were placed in liquidation on 21 December 2007. Josef said that Vladimir made a stamp version of Josef's signature and that Josef had authorised Vladimir to use it. Josef had "no idea" when or to what documents Vladimir applied the stamp.
[115] I accept that Josef may have been unaware of the signing of various documents relating to the companies of which he was a director. The day to day conduct of these companies (insofar as they undertook any business activities) would appear to have been in the hands of Vladimir. I do not, however, accept that the first time Josef had heard of these companies was when he was preparing the affidavit which he swore on 1 April 2008. He had solicitors acting for him in the period shortly after the making of the 26 November 2007 and the 14 December 2007 orders. Those orders contained the names of the various companies. Having authorised Vladimir to utilise the stamped version of his signature, he ought reasonably to have caused his solicitors to make enquiries as to the directorships of such companies. In any event, having become aware of the existence of these companies and his directorships of them no later than 1 April 2008, he still failed to comply with the orders.
28 Again, the finding that his Honour was satisfied that the charges have been proved beyond reasonable doubt appears at [174]. His Honour did not engage in any discussion as to whether being the sole director of a corporation ordered to file an affidavit placed the appellant under a duty to the Court to cause each of the corporations to comply with that order, so that the appellant could be found guilty of contempt of court for failing to do so. I infer from the fact that his Honour found these charges proven that none of the corporations had been placed in liquidation in insolvency or by the Court. If the liquidations were of either of those types, s 471A(1) of the Corporations Act 2001 (Cth) would have prohibited the appellant from performing or exercising a function or power as an officer of any of the corporations. His Honour regarded the appellant as under a continuing duty after the liquidations to bring about the result that each of the corporations complied with the Court's order relating to it. It is clear from [115] that his Honour found the appellant guilty on the basis of omission to do something that his Honour thought the appellant ought reasonably to have done, even after the liquidations. There is no finding that the appellant had access to the books and records of any of the corporations after their liquidation, for the purposes of enabling him to prepare and swear affidavits on behalf of the corporations. Nor is it clear from his Honour's findings that the appellant was the sole director and shareholder of each of the corporations until "at least 6 June 2008" for how long his Honour would have regarded the duties as enduring.
29 The findings of the primary judge relating to charges 4, 5 and 12 are found in his Honour's reasons for judgment published as Deckers Outdoor Corporation Inc. v Farley (No 7) [2010] FCA 560. At [14] of those reasons for judgment, his Honour referred to the searches of the Roper Street factory on 13 November and 12 December 2007. His Honour concluded that, after those searches, it would have been evident to the appellant that the respondent was aware that the Roper Street factory was being used to manufacture counterfeit footwear and that any continuation of manufacture there was likely to be detected. At [15]-[16], his Honour said:
[15] Mr Vaysman wished to continue manufacturing footwear. He sought the assistance of his son Vladimir to establish a new factory at 34 Christensen Street Moorabbin. As the sole director and share holder of a company named Sanauria Pty Ltd ("Sanauria') (the Twenty-Third Respondent in the proceeding) he secured these alternative premises. The lease was entered into by Mr Vaysman, on behalf of Sanauria on 28 February 2008. Machinery used in the making of footwear was installed. Thereafter production of counterfeit footwear was resumed at the new factory. Mr Vaysman admitted that he was personally involved in that manufacturing process. Vladimir Vaysman paid the rent on the premises.
[16] Later in 2008 the Applicant became aware that counterfeit footwear was still being sold and made inquiries. As a result of those inquiries it had reason to believe that the footwear was being manufactured at the Christensen Street premises. A further search order was obtained in relation to those premises. When it was executed on 23 January 2009 Mr Vaysman was present on the premises and more counterfeit footwear was discovered. So too were invoices for the supply of "Ugg" stamping blocks and embossing blocks to Sanauria. Those invoices were dated 18 and 25 November 2008 respectively. The invoice for the embossing blocks had a notation on it which read "PAID 26/11/08". An "Ugg" stamping block was attached to a "Torelli" machine which was used to stamp the rubber soles of boots and shoes.
30 There is no finding as to the time of installation of machinery, or as to the time of the resumption of manufacture of counterfeit footwear at the Christensen Street factory. How much later in 2008 it was that the respondent became aware that counterfeit footwear was still being made and sold, how long its inquiries took, and how quickly the respondent acted to obtain the search order that was executed on 23 January 2009 are not the subject of specific findings. Given the keenness of the respondent to pursue its interests, it seems unlikely that the awareness came about and the inquiries were instituted early in the period beginning in March 2008. It was not until the latter half of November that stamping blocks and embossing blocks that would have been used in the manufacture of infringing products were purchased by the lessee of that factory.
31 The primary judge's reasoning in relation to charge 4 is found at [17]-[20]:
[17] Mr Vaysman gave evidence that, as far as he was aware, he was the only person to produce footwear at the Christensen Street factory during the currency of the Sanauria lease. He admitted that some of this footwear included "Ugg" boots. He had made them so that they could be sold and he could make a living. The money was needed for various purposes including payment of the rent on his flat.
[18] Various styles of Ugg footwear were found on the premises on 23 January 2009. Despite his general admission that he was the only person involved in the manufacture of footwear at the Christensen Street factory, Mr Vaysman denied having manufactured some of these boots. He suggested that his son Vladimir may have made some of the boots. I harbour grave reservations about the veracity of Mr Vaysman's denials that he manufactured some of the footwear which was found at the Christensen Street factory. It is not, however, necessary for me to reach a concluded view in relation to the footwear which Mr Vaysman denied making. This is because he admitted in evidence to having produced up to eight pairs of short black boots per week which had a label on the heel reading "AUS Classic Ugg". Having made the boots he put the labels on them.
[19] Mr Vaysman was the moving party responsible for the transfer of manufacturing from the Roper Street factory to the Christensen Street factory. He sought and obtained the assistance of his son Vladimir in establishing the new factory. Mr Vaysman, however, disavowed being pressured by Vladimir in relation to the establishment or operation of the production process at the Christensen Street premises. In any event, Vladimir Vaysman left Australia on 28 November 2009 [sic] and had not returned at the time that the search order was executed on 23 January 2009. In the meantime Mr Vaysman continued to work at the factory.
[20] Mr Vaysman's own evidence satisfies me, beyond reasonable doubt, that he consciously and voluntarily made the "AUS Classic Ugg" boots thereby contravening the orders which I made on 27 November 2007.
The reference to Vladimir Vaysman having left Australia on 28 November 2009, found at [19], appears to be erroneous. Vladimir Vaysman cannot have left Australia on a date later than that by which he had not returned. Counsel for the respondent informed the Court during the hearing of the appeal that the correct date was 28 November 2008.
32 The reasoning on charge 4 makes it clear that the appellant was found guilty on the basis that he produced up to eight pairs of one style of boots per week, which were labelled with one of the respondent's marks, and that he put the labels on them. There is no finding as to how many weeks were involved. As he said at [18], his Honour found it unnecessary to reach a concluded view about other footwear the appellant denied manufacturing.
33 The reasoning on charge 5 is found at [21]:
Mr Vaysman's admissions (see above at [17]) that he manufactured counterfeit footwear at the Christensen Street factory and sold that footwear in order to make a living is [sic] sufficient to satisfy me beyond reasonable doubt that he deliberately and voluntarily sold Enjoined Products from that factory.
There is no finding as to the quantity or quantities of infringing products that the appellant sold, so as to be found guilty of contempt of court on charge 5. It is clear from the admissions of the appellant recounted at [17] that he made footwear other than infringing footwear in the Christensen Street factory. He was perfectly entitled to run a factory, and perfectly entitled to manufacture in it whatever he chose. He was entitled to manufacture footwear, including ug boots. He was not entitled to manufacture items that were branded or labelled so as to contravene any of the orders of the Court by which he was bound. Similarly, anything that he manufactured he was entitled to sell, as long as the items sold did not contravene orders of the Court. Findings of contempt of court based on contraventions of those orders must inevitably focus only on items that were manufactured or sold in contravention of those orders.
34 The final charge, charge 12, was based on an order prohibiting the appellant from approaching within 100 metres of the Christensen Street premises. How such a drastic infringement of the appellant's liberty to lease premises and operate a factory in them, and to do so through a corporation of which he was the sole director, came to be imposed is not the subject of this appeal. Such an order certainly appears to go beyond the enforcement of any rights the respondent may have. The primary judge's reasoning in relation to charge 12 is found at [30]-[34]:
[30] The evidence relied on by the Applicant to support this charge was very straightforward. It was founded on the observations of an investigator who was present outside the Christensen Street factory between 8:00 and 9:00 pm on 5 March 2009. She observed Mr Vaysman leaving the premises carrying a small box.
[31] Mr Vaysman's explanation for having done so was given in an affidavit in which he deposed that:
"Both of my visits to the Christensen Street factory (on 5 and 10 March 2009), which I now know were in breach of the Court order, have been prompted by threats from the landlord of those premises that items stored at the factory would be sold by him to recover outstanding rent monies. During both of these visits, I was granted access to the premises by the landlord using a key in his possession. I have breached the Court order in an honest (although mistaken) belief that a visit prompted by the landlord, with the sole purpose of making sure that my possessions were still in order would not amount to a breach of the order."
Mr Vaysman was able to obtain entry because the landlord's agent gave him a key after Mr Vaysman had paid to the agent certain monies which were payable to the landlord.
[32] Mr Vaysman was well aware that the Court had ordered that he should not approach within 100 metres of the premises. Despite this he contacted the agent without notice to the Applicant and obtained a key. He appears to have hoped that his entry would not be discovered by the Applicant. Alternative courses of action were available to him but were not availed of. He offered no explanation as to why he had not sought a variation of the Court order or advised the solicitors acting for the Applicant that he wished to enter the premises. Had he been concerned that the landlord might have removed or been about to remove property from the factory that belonged to him or to Sanauria, he could have confirmed the position by discussions with the agent. He did not need to enter the premises on two occasions. Mr Vaysman offered no explanation as to why it was that two visits were required in the space of six days. His visits were not "prompted" by the landlord except, perhaps, in the broadest possible sense. Mr Vaysman's account is unconvincing. More importantly, it does nothing to support his defence that the Applicant had failed to establish beyond reasonable doubt that he had acted consciously and voluntarily.
[33] Mr Tony Watson, a solicitor acting on behalf of the Applicant, attended the Christensen Street premises on 23 January 2009. On that day he observed that there was a stamping block attached to the Torelli machine. Mr Watson visited the premises again on 6 March 2009. On that visit he observed that the stamping machine was placed on a trolley. It had been turned upside down. An open tool box stood nearby. The stamping block had been removed. This evidence strongly suggests that Mr Vaysman has been less than candid about the purpose of his visit to the premises on 5 March 2009 and about what he did whilst there.
[34] I have no doubt that Mr Vaysman acted consciously and voluntarily in entering the Christensen Street factory on 5 and 10 March 2009.
From what his Honour said at [33], it seems that he was not making a finding that the appellant had removed the stamping block from the Torelli machine on one of his visits. To express doubts about his candour fell short of making a finding that the appellant made use of one of his prohibited visits to remove the block.