Yuan v Huang

Relevant principles

1. Part 55, r 13 of the Supreme Court Rules 1970 (NSW) (SCR) provides: Punishment (1) Where the contemnor is not a corporation, the Court may punish contempt by committal to a correctional centre or fine or both. … (3) The Court may make an order for punishment on terms, including a suspension of punishment or a suspension of punishment in case the contemnor gives security in such manner and in such sum as the Court may approve for good behaviour and performs the terms of the security.
2. As noted by Rees J in Seven Network (Operations) Ltd v Dowling (No 2) [2021] NSWSC 1106 at [6], the provisions of Pt 55 are only declaratory of the Court's power to punish for contempt and alternatives to committal to a correctional centre or a fine may be fashioned by the Court in the exercise of its inherent jurisdiction. One such alternative is imposing an obligation of community service as a condition of suspending a term of imprisonment or the operation of a fine: Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309; Zhang v Shi (No 6) (2022) 67 VR 469; [2022] VSC 271; D Rolph, Contempt (Federation Press, 2023), p 810.
3. The underlying rationale of sentencing for contempt (be it civil or criminal contempt) is that it is necessary to uphold and protect the effective administration of justice which it does by demonstrating that the Court's orders will be enforced: Australian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 107; [1986] HCA 46. In setting the punishment for contempt it is necessary to bear in mind the purpose of punishing the contemnor, which is deterrence of the contemnor and others in the future from committing similar contempts and denouncing the conduct concerned in an emphatic way: Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309 at 314; NHB Enterprises Pty Ltd v Corry (No 8) [2022] NSWSC 97 at [26]­­-[27].
4. The importance of this underlying rationale to the determination of the appropriate penalty for contempt was explained by the Full Court in Kazal v Thunder Studios Inc (California) (2017) 256 FCR 90; [2017] FCAFC 111 at [97]: Viewed in that way, contempt proceedings are essentially protective in nature as to the judicial function and the role of the courts, even if they also serve to vindicate private interests and rights. Contempt proceedings are therefore to be viewed as essential in facilitating courts being able to function properly. That includes being, and being seen to be, effectual in adjudicating upon and resolving disputes, and in particular making orders that will ordinarily be obeyed. This means that individual contempt cases have an importance transcending the instant case by supporting and enhancing the integrity of judicial proceedings, both in respect of orders made, and more generally. That view of contempt proceedings can be seen to permeate longstanding sentencing authority in this area.
5. The Crimes (Sentencing Procedure) Act 1999 (NSW) and the Crimes (Administration of Offences) Act 1999 (NSW) do not apply to punishments for civil contempts: Dowling v Prothonotary of Supreme Court of New South Wales (2018) 99 NSWLR 229; [2018] NSWCA 340 at [46], [57]-[58]; NHB Enterprises at [29].
6. While the Court has power to sentence a person to a term of imprisonment for civil contempt, it is well established that this is a penalty of last resort. In relation to this, Bell P said the following in NHB Enterprises at [30]: Sentencing a contemnor to a term of imprisonment is a penalty of last resort: see, for example, Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494 at 501; [2006] FCA 83 at [25] . While the provisions of the Crimes (Sentencing Procedure) Act may not apply, to adopt the language of McCallum JA in He v Sun at [68] , "it is appropriate to proceed on the basis that, where a person is being dealt with for contempt in civil proceedings, as where a person is being sentenced for a criminal offence, the course of committing the contemnor to a correctional centre or sentencing them to a term of imprisonment should not be taken before considering whether there is any alternative course that is appropriate in the circumstances, having regard to the nature and object of the function in question". The reasons underpinning her Honour's conclusion on this point were that: … imprisonment is a punishment of last resort: R v Way (2004) 60 NSWLR 168; [2004] NSWCCA 131 at [115] (Spigelman CJ, Wood CJ at CL and Simpson J). While that is a proposition that arises most commonly in the discourse of the criminal law, there is no reason in principle why the same restraint should not apply to punishment of contempt and every reason why it should. That is a necessary incident of the common law's acceptance that the right to personal liberty is a fundamental common law right which 'cannot be impaired or taken away without lawful authority and then only to the extent and for the time which the law prescribes': Williams v R (1986) 161 CLR 278; [1986] HCA 88 at 292 (Mason and Brennan JJ).
7. In Australian Securities and Investments Commission v Matthews [2009] NSWSC 285 Barrett J set out at [27] the following matters as relevant to the determination of the appropriate penalty for civil contempt: (1) The seriousness of the contempt proved. (2) The contemnor's culpability. (3) The reason or motive for the contempt. (4) Whether the contemnor has received, or sought to receive, a benefit or gain from the contempt. (5) Whether there has been any expression of genuine contrition by the contemnor. (6) The character and antecedents of the contemnor. (7) The contemnor's personal circumstances. (8) The need for deterrence of the contemnor and others of like mind from similar disobedience. (9) The need for denunciation of contemptuous conduct.
8. This list was referred to with approval on appeal: Matthews v Australian Securities and Investments Commission [2009] NSWCA 155 at [129], [144]. In Kazal at [102] the Full Court described this as a useful, although not exhaustive, list of the relevant factors in assessing the appropriate penalty and added at [103]: The burden of the additional authority in this Court is to add weight to the factors listed in Matthews, rather than requiring any change by way of addition, subtraction or variation. The focus remains on the core themes of the objective seriousness of the conduct and, in particular, its effect on the administration of justice, subjective factors such as the contemnor's culpability, antecedents and attitude, including in particular any apology or other palpable sign of contrition, the capacity to pay a fine, and imprisonment being a last resort. Deterrence remains a dominant theme, both specific and general. Even denunciation and punishment can be seen as bolstering deterrence. That is especially so when the conduct entails contemplation and the opportunity to reflect and desist.
9. In respect of factor (2) (culpability), the contemnor's state of mind is a relevant matter as it may aggravate or mitigate the seriousness of the contempt. In Kazal the Full Court said: [105] State of mind can serve to mitigate or aggravate conduct by a contemnor. In the case of aggravation, this is reflected in the conclusion reached as to whether or not the nature of the contempt, combined with the proven state of mind, may be regarded as contumacious. Evidence of an innocent or inadvertent state of mind may serve to mitigate. It follows that state of mind will almost always be a relevant consideration when it comes to penalty, somewhat analogous to the situation with civil penalty contraventions ... [106] Aggravation by way of conduct and a state of mind found to be contumacious can be seen to be on a sliding scale. For example, it may range from deliberate and wilful defiance, to an unsuccessful attempt to get around a prohibition, to an unsuccessful attempt to comply with a prohibition. Proven recklessness or carelessness may be seen not to be contumacious at all. This process of characterisation is inevitably driven by close attention to what was done. This includes what can be said about state of mind able to be ascertained from all of the evidence, including by way of inference.
10. Contempt will be contumacious if it involves deliberate defiance, and in the context of a breach of the Court's orders it is enough that there is deliberate conduct which is calculated to thwart the fundamental purpose of the Court's orders: Witham v Holloway (1995) 183 CLR 525 at 530; [1995] HCA 3; Grocon v Construction, Forestry, Mining and Energy Union (No 2) [2014] VSC 134 at [102]-[114]; Brennock & Dixon v Norman [2021] NSWSC 1182 at [12]-[13]. However, it is open to the Court to punish contempt by imprisonment even if the contempt is not contumacious: BCEG International (Australia) Pty Ltd v Xiao (No 3) [2023] NSWSC 554 at [17]-[18].
11. In respect of factor (6) (character and antecedents), when determining the penalty for contempt the relevant history of the offender includes other findings of contempt or convictions for offences similar to contempt. In Ferguson v Dallow (No 5) [2021] FCA 698, O'Callaghan J said the following about this at [20] (adopted by Rees J in Seven Network (Operations) Ltd v Dowling (No 2) [2021] NSWSC 1106 at [9]): As a general principle, when determining a penalty for contempt, the relevant history of the offender includes, and is limited to, other findings of contempt. In fixing a penalty for contempt the court should take into account only other findings of contempt and should treat as irrelevant the existence of prior convictions of another kind, except for convictions for offences similar to contempt. See Australian Competition and Consumer Commission v Levi (No 3) [2008] FCA 1586; ATPR 42-257 at 49,611-12 [101]-[110] (McKerracher J); R v Vasiliou (No 2) [2012] VSC 242 at [8] (Beach J); Grocon Constructors (Victoria) Pty Ltd v Construction, Forestry, Mining and Energy Union (No 2) [2014] VSC 134; 241 IR 288 at 354 -5 [187] (Cavanough J); Admark Property Group Pty Ltd (in liq) v GJ Building and Contracting Pty Ltd (2017) 94 NSWLR 777 at 787 [33], 790 [45] (Black J); R v Murray [2018] VSC 133 at [44] (Riordan J); Victoria International Container Terminal Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2018] VSC 794; 285 IR 28 at 36 -7 [19]-[20] (McDonald J).
12. In the first case referred to in the above passage, Australian Competition and Consumer Commission v Levi (No 3) [2008] FCA 1586, the defendant had breached a court order restraining him from selling businesses without providing the purchaser with certain information. In sentencing him to imprisonment, McKerracher J took into account his prior convictions for offences of dishonesty which involved conduct similar to the conduct giving rise to the contempt, although those offences were not for contempt. In reaching this conclusion, McKerracher J applied the following statement by Lord Lane CJ in R v Giscombe (1983) 79 Crim App R 79 at 84 (emphasis added): This man is 29 years of age, born in Jamaica. He is unemployed now. He has unhappily recorded against him a substantial list of criminal convictions. However, as I think was submitted to us and we accept, in matters of this sort the nature of a man's criminal record is of no importance, unless of course that criminal record contains an offence similar to the one of which he has been found guilty by this Court, of which there is none in this case. So we have to ask ourselves what is the proper term of imprisonment, because immediate imprisonment is undoubtedly necessary for what this man did.
13. After setting out this passage from Giscombe, McKerracher J went on to say: [109] It is the emphasised proviso which in my view is directly pertinent to the present case. It is implicit in the proviso that in circumstances where previous convictions are 'similar to' the contempt under consideration, that such previous convictions may be taken into account. In such a case, as in this case, there can be no question that the contemnor is aware of the seriousness of the conduct from previous consequences arising from it, yet has consciously proceeded with it in any event. [110] In my view, the proviso has to be relevant in the conduct committed by Mr Levi. The fraudulent and misleading sale of businesses on virtually a wholesale basis is 'similar to' conduct of which he has previously been convicted and sentenced to imprisonment.
14. It may be noted that McKerracher J accepted that a prior conviction may be taken into account if the conduct the subject of the prior offence is similar to the contempt for which the contemnor has been convicted, and it is not necessary that the offence itself is similar to that contempt.

Evidence at the penalty hearing

1. It was clear from Mr Huang's evidence in cross-examination at the penalty hearing that he knew in June 2021 that the effect of the freezing orders was that he could not deal with his assets up to $300,000 except for paying up to $1,000 a week for his ordinary living expenses and paying reasonable legal expenses (T35) and he knew at that time that he had no interest in his former wife's property at Gordon and therefore it could not be taken into account (T29, 30 and 35).
2. At the penalty hearing the plaintiff relied on evidence regarding the prior criminal convictions of Mr Huang, including three judgments of the Court of Criminal Appeal that concern Mr Huang being R v Huang [2002] NSWCCA 499 (Huang 1), R v Huang [2010] NSWCCA 68 (Huang 2) and Huang v R [2018] NSWCCA 57 (Huang 3). While the three decisions are not admissible to prove the existence of facts that were in issue in the proceedings for which they were rendered, it was submitted for the plaintiff that reference may be made to them to prove Mr Huang's convictions and the terms of the sentences delivered by the Court of Criminal Appeal for the offences and that was the purpose for which they were relied on: Evidence Act 1995 (NSW) s 91(1) and 92(2).
3. The plaintiff drew attention to the following aspects of these decisions. First, each of the charges or offences dealt with related to serious dishonest or fraudulent conduct, being an offence of receiving stolen property contrary to s 188 of the Crimes Act 1900 (NSW) (Huang 1), an offence of conspiracy to cheat and defraud (Huang 2), and offences of dealing in proceeds of crime under the Anti-Money Laundering and Counter Terrorism Financing Act 2006 (Cth) (Huang 3). Second, in each case Mr Huang was subject to a custodial sentence being a sentence of imprisonment for 5 years with a non-parole period of 3 years (Huang 1), a sentence of imprisonment for 2 years suspended on the condition that he enter into a good behaviour bond (Huang 2), and a sentence of imprisonment for 8 years with a non-parole period of 5 years which was reduced on appeal to 6 years and 3 months ending on 8 March 2022 with a non-parole period of 4 years 8 months ending on 8 August 2020 (Huang 3 at [90]-[91]). Mr Huang was released on parole at the time of the conduct which gave rise to the contempts in this case (which occurred in the period 30 June to 26 October 2021).
4. Observations were made in the Court of Criminal Appeal in Huang 1 regarding Mr Huang's gambling addiction when dealing with his sentencing appeal. In Huang 1, Howie J (Buddin J agreeing) said the following at [16]: The applicant could receive little assistance or consideration from the fact that he claimed that his offences were a result of his addiction to gambling even if his statements to the psychiatrist are accepted. It is clear that the applicant had received every consideration from the courts by way of supervised bonds, community service and finally home detention, yet he continued to offend. If there were any cry for help in the earlier offences he committed, which I do not accept, that cry was well and truly answered by the sentence of home detention. The only basis upon which the applicant's gambling addiction and his statements of a present intention to address the problem could have any significant weight was in the finding of special circumstances and the assessment of the appropriate non-parole period. In my opinion a non-parole period that permitted the release of the applicant before serving a period of three years would not be appropriate to reflect the objective seriousness of the criminality for which he was to be punished.
5. The plaintiff also put into evidence records produced under subpoena by the Department of Communities and Justice (DCJ) which record that Mr Huang had undertaken a number of programs to treat his gambling addiction in 2005 while in custody following the conviction from which he unsuccessfully appealed in Huang 1. The documents produced by the DCJ also included the parole order issued on 27 July 2020, setting out the conditions attaching to his release on parole on 8 August 2020 pursuant to the sentence in Huang 3, as well as the case notes of Mr Huang's parole officer. The parole conditions include relevantly: While you are on parole, you will be subject to the following conditions: (a) Within 24 hours of your release, you must report to: Officer in Charge, Burwood Community Corrections Office, Suite 1, Level 1, 52 Railways Parade, Burwood NSW or an alternative parole office as directed by a parole officer. (b) You will be supervised by a parole officer until your supervision period ends on 8 March 2022. … (f) Your employment, both paid and unpaid, must be approved by your parole officer. If you change your job, you must tell your parole officer within 48 hours, or as soon as possible. (g) You must be assessed for psychological counselling, and you must attend psychological counselling if it is recommended as a result of the assessment, or if it is considered necessary by your parole officer. … (j) You must engage in gambling counselling as directed by your parole officer. (k) You must not remain in any premises where gambling is conducted, unless accompanied by an adult approved by your parole officer. (l) You must not access any gambling services, including by telephone or by internet.
6. The case notes of Mr Huang's parole officer record that: 1. On 10 August 2020, the parole conditions were explained to Mr Huang "with particular attention paid in discussing the gambling conditions", he was advised he would be provided with details of a gambling counsellor, and he indicated he was aware of his parole conditions. 2. On 2 September 2020, Mr Huang stated that he went to his appointment with Mission Australia Campsie for financial/gambling counselling and had a further appointment with the counsellor in two weeks' time (and an entry on 8 September 2020 records that the Mission Australia counsellor confirmed that Mr Huang had "commenced treatment with their gambling/financial counselling service and has so far been engaging well"). 3. On 9 September 2020, Mr Huang told the parole officer that he did feel there was a benefit in his "going to gambling counselling". and "acknowledged it would help him avoid issues in the future". 4. On 17 September 2020 Mr Huang was advised that his parole supervision would be suspended but was given a direction to continue gambling counselling with Mission Australia, which he acknowledged. The suspension of his parole supervision meant that he was required to contact the parole officer on a six-monthly basis. There is no evidence that the other conditions of his parole order were varied. 5. On 27 September 2021, Mr Huang telephoned the parole officer and during the call "denied any gambling online/offline", denied "any financial difficulty" and said he was not working due to COVID.
7. Mr Huang was taken to these case notes in cross-examination and it was put to him that he was gambling on 1 and 3 September 2021 and also on 1 October 2021 when he made various payments to gambling enterprises online as found in the Liability Judgment and that he lied to the parole officer when he said on 27 September 2021 that he was not "gambling online/offline". He said he could not remember saying those words to the parole officer. Given the conditions of his parole prohibiting him from gambling, the history of the parole officer asking him about his gambling activities, and the impression I have formed of Mr Huang as a witness during his extensive cross-examination in these proceedings, I am satisfied beyond reasonable doubt that he did tell the parole officer on 27 September 2021 that he was not gambling online or offline, and that he lied in so doing.
8. Mr Huang gave the following evidence in cross examination as to why he undertook the gambling activities in breach of the freezing orders (T36): Q. The reason you decided to spend the money or use the money at Ladbrokes and Bet365 and PlayUp was because you wanted to make money gambling, you saw this as a way of earning profit to yourself; is that right? A. Yeah because I used up all my, I had to make a living so I had to try to do something, invest something. Q. You wanted to make lots of money using this money in your account gambling with those institutions, correct? A. Yeah, I tried to make some money and offer you a settlement, $5,500, and I make $40,000, $50,000 at that time. I owe 5,500 a month and you didn't accept it, and now we come to this date, a couple of hundred thousand and now he's trying to pursue me. I just want to be bankrupt today and whatever I can do, I owe more than ‑ I have 1,000 from family, relative. I have to be bankrupt today. Q. If his Honour requires you to pay a fine, do you know where you could get the money from to pay the fine? A. At this day I can not. I have to be bankrupt today, that's why. There's no other alternative. Only way I could be bankrupt today.
9. Mr Huang attached to his affidavit of 21 November 2023 a report by a clinical psychologist, Mr Jing Wang. This was admitted without objection from the plaintiff. This report concludes that Mr Huang exhibits typical symptoms that are consistent with a diagnosis of a gambling disorder and includes the following: In summary, the assessment of Mr. Huang revealed a long-standing history of gambling of over 20 years which has not received treatment until his recent presentation to this clinic. Mr. Huang's psychiatric condition predates the offence. It is my professional opinion that, at the time of the offence, he continued to suffer from symptoms of Gambling Disorder, a condition for which treatment is available. Mr. Huang has acknowledged the unacceptability of his behaviour and expressed remorse for his actions. He has also shown interest in receiving treatment for his Gambling Disorder. His condition is amenable to psychotherapy. Given the entrenched and longstanding nature of his gambling behaviours, coupled with the propensity for relapse common in addiction disorders, it is imperative that he undergoes weekly treatment consultations for a minimum of 12 months, followed by bi-weekly consultations for another 24 months, and subsequently monthly consultations for the next 2 years. Provided Mr. Huang strictly adheres to the prescribed treatment plan, his risk of reoffending can reasonably be deemed low.
10. In relation to the first paragraph of this passage, Mr Huang said in cross-examination that he had told Mr Wang that he had attended counselling with Mission Australia, but said it was only on the telephone for a few hours which was not "treatment" (T20). This evidence is inconsistent with the documents produced by the DCJ which indicate that the gambling counselling he received extended beyond telephone consultations (see [23] and [24] above).
11. The third paragraph of the passage quoted at [27] above records that Mr Huang expressed remorse for his actions. Mr Huang's written submissions (but not his affidavit) also stated that Mr Huang felt remorseful that he had breached the freezing orders, and "deeply regrets" giving inaccurate responses to questions put to him by Kunc J on 30 June 2021. He was asked in cross-examination why he had expressed "remorse for his actions", and he said that it was because he had a young son and wants to be a better person for his son and someone his son can be proud of (T21 and 22). When pressed during his cross-examination he gave an apology to the plaintiff and to the Court (T25 and 38) and did so again in re-examination by his legal representative. However, I do not regard these apologies as genuine. In the case of the apology to the plaintiff, it was expressed as an apology for misusing the $8,000 which was deposited to the ANZ account on 29 June 2021 and then qualified by an expression of bitterness towards the plaintiff for putting him to the trouble of the proceedings for the contempts and the legal costs he had incurred as a result (T22). In the case of the apology to the Court, it was very late and qualified by the evidence given earlier that what he was truly remorseful for was that he was not a better father for his son.
12. Mr Huang's personal circumstances are that he is 45 years of age, single, unemployed, and living in rented accommodation. He has a 3-year-old son and cares for him 4 days per week. His former de facto spouse, who lives 40 minutes from his home, cares for the child the other 3 days and is in paid employment. Mr Huang's financial position is that he has no significant assets apart from a credit balance of $26,904 with NEDS, which operates an online gaming platform, and he owes debts, including to his solicitors, in excess of $151,000.

Submissions as to penalty

1. Both parties approached the question of the appropriate penalty by reference to the nine factors stated by Barrett J in Matthews extracted above at [11].

(a) Plaintiff's submissions

1. As to the seriousness of the contempt, the plaintiff submitted that the acts of contempt are serious as they involved undermining the Court's orders and interference with the administration of justice. The freezing orders were intended to protect the position of the plaintiff with respect to any judgment that may be obtained by her against Mr Huang. His conduct undermined that protection after he had opposed the orders being made in the first place and his conduct constituted a direct attack on the authority of the Court. Mr Huang knew from the outset the substance of the freezing orders and possible consequences of breach (including imprisonment) having been informed of the potential consequences by Parker J on 10 June 2021: Liability Judgment at [12]. Mr Huang's knowledge of the existence of the freezing orders was confirmed in his affidavit and oral evidence at the earlier hearing. The amounts expended by Mr Huang were significant having regard to their intrinsic amount, his financial circumstances, and the quantum of the plaintiff's claim ($300,000). It is likely that the expenditure significantly prejudiced the plaintiff's ability to recover her loss should she succeed against him. Further, his failure to disclose his ANZ account had significant consequences because it permitted him to breach the freezing orders in the manner that he did.
2. As to Mr Huang's culpability, the plaintiff submitted that Mr Huang deliberately and knowingly breached the freezing orders and misled the Court. In particular, it is apparent from the Liability Judgment at [62]-[63] that Mr Huang's failure to disclose to Kunc J the true position of his assets on 30 June 2021 was calculated and deliberate. The breaches of the freezing orders were repeated and deliberate, in the sense that they were not a product of inadvertence, and the Court should find, having regard to its findings as to Mr Huang's creditworthiness, that the breaches were not the product of any misunderstanding on his part.
3. As to the reason or motive for the contempt, the plaintiff submitted that it should be inferred that Mr Huang's motive for breaching the freezing orders was greed coupled with self-interest. This submission is supported by the evidence referred to in the next paragraph and the exchange in cross-examination set out at [26] above.
4. As to whether Mr Huang received a benefit or gain from the contempt, the plaintiff submitted that by reason of his breaches of the freezing orders, Mr Huang misused a total amount of $173,900 of which $135,000 was spent on gambling, and it may be inferred that he would have obtained a significant benefit from his dissipation of that money. This is illustrated by the Ladbrokes records tendered at the hearing on liability, which disclosed that he earned $43,709 on 30 June 2021 from the $10,000 he had deposited into his account with that entity by that date. Accordingly, he derived a monetary benefit on 30 June 2021, the day he misled Kunc J as to the ANZ account, that was more than four times the amount of $10,000 he dissipated in breach of the freezing orders. The plaintiff also noted that Mr Huang has not offered to restore the total amount he dissipated but only the much lesser amount of $8,000 which was one of the deposits to the ANZ account on 29 June 2021.
5. The plaintiff submitted that Mr Huang has not shown genuine contrition. He belatedly offered an apology to the Court in his evidence in re‑examination by his legal representative at the penalty hearing and did not show any genuine regret or remorse. His evidence at the hearing on liability was that he considered the freezing orders to be unjustified and a hindrance on his efforts at undertaking his gambling business (T99.29-34, 119.32-35, 122.1-4, 122.15-20, 122.40-42 and 123.12-15). He also sought to blame the plaintiff for freezing his gambling accounts, stopping him from making a living (T114.26-29) as well as causing him loss and suffering by doing so (T122.9-10, 123.14-15). He reiterated the same sentiments at the penalty hearing (T22.15-13).
6. As to Mr Huang's character and antecedents, the plaintiff relied on Huang 1, Huang 2 and Huang 3 and submitted that the Court should take into account Mr Huang's antecedents on sentencing for two reasons: first, they evidence a history of engaging in deceptive or fraudulent conduct and second, the contempts he committed in this case occurred whilst he was released on parole for offences dealing with proceeds of crime and under the Anti-Money Laundering and Counter Terrorism Financing legislation, and in breach of the conditions of his parole.
7. Insofar as the plaintiff relies on Mr Huang's prior convictions as relevant, I am not satisfied that his prior convictions are sufficiently similar to the contempt or the conduct giving rise to it and, therefore, I have not taken into account the nature of those prior convictions for the purpose of determining the appropriate penalty in this case.
8. As to the contemnor's personal circumstances, the plaintiff notes two matters. First, Mr Huang does not have any assets of value and consequently is unlikely to satisfy any significant fine imposed by the Court which tends against the imposition of a fine upon him: NHB Enterprises at [84]; Sun v He (No 2) [2020] NSWSC 1298 at [78]-[109]; Kazal [2017] FCAFC 111 at [103]. Second, the plaintiff submitted that despite the limitation imposed by s 91 of the Evidence Act on the use that can be made of decisions of the Court of Criminal Appeal, this Court should treat Mr Huang's gambling issue in the same manner as in Huang 1, by giving it little if any weight.
9. The plaintiff also relied on the documents produced under subpoena by the DCJ referred to at [23]-[24] above which indicate that Mr Huang had undertaken gambling counselling between August 2020 and September 2020, there were follow ups regarding his gambling issue in September 2021, and that he lied to the parole officer when he "denied any gambling online/offline" on 27 September 2021. The plaintiff also pointed out that his use of the online platforms constituted a breach of his parole condition to not access any gambling services, including by telephone or by the internet.
10. For these reasons, the plaintiff submitted that Mr Huang's gambling issue does not warrant leniency or favourable treatment by this Court on sentencing for his contempt.
11. As to the need for deterrence and for denunciation of the contemptuous conduct, the plaintiff submitted that both are significant factors in favour of a significant punishment in the present case. Deterrence of the contemnor is important in the present case because there is a risk that, absent a serious penalty, he may repeat his acts of contempt and insofar as deterrence of others is concerned, it was important to send a message to others that a breach of freezing orders is a very serious matter with very serious adverse consequences for those who do so: see Pisano v Dandris (No 4) [2015] NSWSC 1689 at [31]-[32]. The authority to enforce freezing orders made by the Court will be diminished if Mr Huang is not subject to a significant sanction for his disobedience.
12. The plaintiff submitted that the appropriate penalty for the contempt was (a) imprisonment for 9 to 12 months or (b) a suspended sentence of indefinite imprisonment subject to him purging his contempt by paying the moneys he dissipated (in the sum of $173,900) into court within 28 days. In my view, it is evident from Mr Huang's financial position that the second alternative will not be an effective punishment for his contempt (see [39] above).
13. In support of the plaintiff's proposed sentence of imprisonment the Court was referred to the table forming Annexure A to the decision of Zammit J in Moira Shire Council v Sidebottom Group Pty Ltd [2018] VSC 556 and to another table prepared by the plaintiff including 12 cases where punishments were imposed for contumacious contempt ranging from 40 hours of community service (Pisano v Dandris (No 4) [2015] NSWSC 1689) to imprisonment for 2 years and 3 months (Vaysman v Deckers Outdoor Corporation Inc (2014) 222 FCR 387; [2014] FCAFC 60). A significant number of cases where a sentence of imprisonment was imposed involved the breach of court orders including freezing orders, and in several of these cases sentences of 6 months or more were imposed: e.g. Huang v Liao [2022] NSWSC 526 (six months). I have taken these prior decisions into account. I recognise that while prior decisions provide a yardstick against which to examine a proposed sentence, the sentencing here requires an evaluative exercise which must be focused on the consideration of the particular circumstances of this case: Hili v The Queen (2010) 242 CLR 520; [2010] HCA 45 at [54].

(b) Mr Huang's submissions

1. Submissions were made for Mr Huang seeking to downplay the seriousness of the contempt for three reasons. First, it was said that while the breach of the freezing orders is a serious charge, it involved only $8,000 and not the amount of $173,900 calculated by the plaintiff. Second, it was acknowledged that while incorrect answers were provided to Kunc J on 30 June 2021, Mr Huang was genuinely concerned when providing those answers that if he disclosed his ANZ account it would be completely frozen as his other two bank accounts had been. Third, it was submitted that as the hearing of the substantive proceedings has not yet occurred, it is premature to conclude that Mr Huang's contempt had significantly prejudiced the interests of the plaintiff. I note that the substantive proceedings are set down for hearing in June 2024.
2. The submission that Mr Huang was seeking to avoid the ANZ account being frozen in the same way as the other two accounts, is a reference to an exchange Mr Huang had with Kunc J at the hearing on 30 June 2021: HIS HONOUR: Well, these types of order generally have a provision to ensure that someone can continue to pay their ordinary bills and their legal expense and the like. Now, this order enables you to pay up to a thousand dollars a week for your ordinary living expenses; it allows you to pay your reasonable legal expenses and it allows you to deal with any of your assets in the ordinary course of business, including paying business expense. DEFENDANT: I can't access the money. I can't get paid. How can I get money? HIS HONOUR: When you say "I can't access the money", what do you mean? DEFENDANT: (Inaudible) - I try to withdraw money. I try to pay bill with the credit, my credit card. It is frozen. HIS HONOUR: I will just ask Mr Condon; was this served on the bank? CONDON: I'm informed by my junior that the answer is yes. I will get some information about when it was served your Honour and on which bank. I suspect It was served on two banks. The CBA and the Bank of Queensland I'm informed your Honour. HIS HONOUR: Mr Huang, which bank did you try and withdraw money from to find it was frozen? DEFENDANT: The Bank of Queensland. HIS HONOUR: If I continue the order, I would expect the plaintiff's legal representatives to cooperate with the banks so that the banks are not in any doubt that you are entitled to withdraw funds. I suspect what has happened, as often happens in these cases, is the banks just automatically freeze the whole account when they receive a copy of the order. DEFENDANT: Yeah. That's right. HIS HONOUR: Mr Condon, can I confidently expect that there would be some cooperation between your legal advisers and the bank so that they don't completely freeze this man's accounts? CONDON: I can have that confidence. I will speak to my instructing solicitor while the first defendant makes his submissions and confirm that your Honour. HIS HONOUR: Yes, thank you Mr Condon.
3. Following this exchange, Kunc J made orders which extended the freezing orders and included a direction that the plaintiff by her solicitors was "to liaise with the Commonwealth Bank and Bank of Queensland to facilitate the defendant having access to his bank accounts with those institutions in accordance with the freezing orders". The evidence is that on the same day the plaintiff's solicitor sent an email to each of those banks drawing their attention to the exceptions in order 10 of the freezing orders and noting that the exceptions include but are not limited to Mr Huang being allowed to withdraw money from his account to pay for ordinary living expenses and reasonable legal fees. Hence, the concern which Mr Huang raised with Kunc J was addressed and in any event does not explain his conduct, given that his intended use of the ANZ account went far beyond what order 10 permitted. Rather, the explanation for his answers to Kunc J is that he wanted to have the ability to use the money in the ANZ account free from the restraints in the freezing orders: see Liability Judgment at [64] and [72].
4. As to Mr Huang's culpability, it was submitted that the Court should take into account three mitigating factors: first, Mr Huang's poor understanding of the English language, second his gambling disorder and third, that the inaccurate answers he gave to Kunc J on 30 June 2021 were driven by concern that the ANZ account would also be frozen (see above [46]-[47]) in circumstances where he had no legal representation and therefore no-one to protect him. The reference to his lack of legal representation at that time is to the refusal of his application for legal aid on 25 June 2021.
5. As to the reason or motive for the contempt, it was submitted that Mr Huang had no motive to mislead the Court or to breach the freezing orders and reliance was placed on his gambling disorder diagnosis.
6. As to whether Mr Huang has received or sought a benefit or gain from the contempt, it was submitted that he had received no significant benefit from the breach of the freezing orders, which was essentially a repeat of the submission that the total amount of the breach was only $8,000.
7. As to whether there had been any expression of genuine contrition by Mr Huang, it was submitted that he felt very remorseful after being found guilty of contempt and had taken the active step of seeking help from a psychologist.
8. As to the character and antecedents of Mr Huang, it was submitted that the three decisions of the Court of Criminal Appeal referred to above were not relevant to the present contempt proceedings.
9. As to Mr Huang's personal circumstances, it was submitted that the Court should take into account that he is unemployed, has no substantial personal assets or income, and has been diagnosed as having a gambling disorder for which he is undertaking a treatment plan for 12 months with his psychologist.
10. As to deterrence and denunciation, it was submitted that as Mr Huang currently possesses no assets the likelihood of him breaching freezing orders in the future is nil. Further, he has communicated his remorse for breach of the freezing orders and has expressed a genuine intention that such breaches will not reoccur.
11. It was submitted for Mr Huang that the appropriate penalty would be a suspended sentence of indefinite imprisonment subject to the condition that he attend a 12-month treatment plan for his gambling addictions and make monthly payments of $350 to the Court with the intention of paying into Court $8,000 over a period of 23 months.

Consideration

1. For the following reasons I have concluded that the appropriate penalty for the contempts committed by Mr Huang is a period of imprisonment.
2. As to the seriousness of the contempts, misleading a judge of the Court is a very serious matter, and its seriousness is compounded by the fact that Mr Huang's intention in doing so was to enable him to evade the operation of the freezing orders made by the Court on 4 June 2021: see [47] above. In addition, Mr Huang undertook 32 transactions in breach of the freezing orders in pursuance, in part but not wholly, of his gambling activities. It is fundamental to the rule of law that litigants do not knowingly mislead the Court and that they should comply with orders of the Court. While it is not necessary for civil contempt to be contumacious in order for a sentence of imprisonment to be imposed, I find that the contempts here were contumacious. I am satisfied beyond reasonable doubt that Mr Huang deliberately lied to Kunc J on 30 June 2021 about his assets so that he could use the ANZ account to breach the freezing orders with knowledge of and in defiance of those freezing orders.
3. I reject each of the submissions for Mr Huang referred to at [45] above as to the lack of seriousness of the contempts. As to the first, while Mr Huang's initial deposit to the ANZ account on 29 June 2021 was only $8,000, he subsequently made withdrawals from it through the 32 transactions referred to at [2] above each of which was a breach of the freezing orders. The proper measure of the breach is therefore the total of the amounts withdrawn, and not the initial deposit. As to the second, while Mr Huang may have been concerned about the potential freezing of the ANZ account had he disclosed it, that is no excuse for failing to disclose it to Kunc J nor is it an explanation for that non-disclosure. He consciously withheld from Kunc J the existence of the ANZ account because he wanted the ability to use that account to make withdrawals which would not have been permitted under freezing orders: see [57] above. As to the third, this overlooks the importance of obeying orders of the Court and being truthful when responding to questions from a judge.
4. I accept the plaintiff's submissions that Mr Huang's culpability is high, that his reason or motive for the contempts was personal gain, and that his belated expression of remorse should be given little weight. It was belated as it was made only when he was pressed in cross examination and then invited to make it in re-examination, and it was not genuine: see [29] above.
5. Mr Huang put forward three mitigating factors referred to at [48] above. The first was said to be his poor understanding of the English language. While English is not his first language, I found in the Liability Judgment at [41] that he understood the substance of the freezing orders and the prohibition contained in orders 6, 7 and 10 and I am satisfied, based on his evidence in cross-examination at both hearings, that his understanding of the English language was sufficient to understand the substance of the freezing orders and the questions he was asked by Kunc J on 30 June 2021. The second was a concern that the ANZ account would also be completely frozen if he disclosed it to Kunc J. I have rejected that submission at [58] above. The third was his gambling addiction which is addressed below.
6. The evidence regarding Mr Huang's prior criminal convictions is relevant in assessing the significance of his gambling addiction as a mitigating factor. It appears that he has had a gambling addiction for approximately 20 years and has failed to genuinely participate in counselling and other treatment programs offered to him for that addiction. In particular, the documents produced under subpoena indicate that Mr Huang was required to undertake counselling for his gambling disorder as directed by parole officer as part of his parole conditions while he was on parole between 8 August 2020 and 8 March 2022 but his participation in that counselling program, according to him, was limited (T20). Further, he made a statement to his parole officer on 27 September 2021 that had not undertaken any gambling online or offline, which was untrue. I accept the plaintiff's submission that these matters are relevant as they go to the weight to be placed on Mr Huang's gambling addiction in sentencing.
7. It was submitted for the plaintiff, and I accept, that the Court can have no confidence that Mr Huang will undertake the treatment plan for his gambling addiction recommended by the psychologist he recently retained. I give little weight to Mr Huang's statement to the psychologist that he has "shown interest in receiving treatment for his gambling disorder" given: (a) what is said in Huang 1 set out above; (b) the fact that Mr Huang has been given numerous opportunities in the past to address his gambling addiction which he did not disclose to the psychologist, and which he has not taken up, and he showed no appreciation during cross-examination that these opportunities have been provided to him; and (c) that he lied to his parole officer on 27 September 2021 about his recent gambling activities which were in breach of his parole conditions. The Court can have no confidence that his statement that he will follow the proposed treatment plan is genuine.
8. I note three further points about Mr Huang's gambling addiction. First, it does not explain all the conduct which constitutes the contempt: $38,900 of the total amount of $173,900 withdrawn from the ANZ account was paid to individuals to whom Mr Huang says he owed money. Second, it is too simplistic an approach to say that Mr Huang's gambling addiction motivated his other withdrawals from the ANZ account. The evidence he gave in cross-examination set out at [26] above indicates that the gambling activity was an attempt to generate income to pay his living expenses and to offer a settlement sum to the plaintiff. The proper characterisation of the conduct was to use funds in the ANZ account, knowing it was in breach of the freezing orders, for personal gain. Third, in any event to the extent that a gambling addiction does explain an offender's conduct, it is not generally a mitigating factor on sentence: Johnston v R [2017] NSWCCA 53.
9. As to Mr Huang's character and antecedents, the relevant matters are the extent of his gambling addiction, and the fact that he lied to his parole officer about his gambling activities on 27 September 2021, both of which I have addressed above. I also take into account my assessment of Mr Huang as an unreliable witness in the evidence he gave at both hearings.
10. In relation to Mr Huang's personal circumstances, he is 45 years of age, single and his financial position is very poor. He has no significant assets and has significant liabilities, which makes a fine an inadequate penalty. I have taken into account the fact that he has a three-year-old child for whom he cares four days per week, as a factor reducing the sentence which would otherwise be imposed. However, it is not a factor which would justify a punishment other than imprisonment because there is nothing in the evidence to suggest that his former de facto spouse, who looks after their child for three days each week, cannot take responsibility for the care of the child during the period of Mr Huang's imprisonment.
11. As to the need for deterrence, I accept the plaintiff's submission that there is a need for a term of imprisonment, rather than some other punishment, to effectively deter Mr Huang from further breaches of the freezing orders and for general deterrence.
12. As to the need for denunciation of the contemptuous conduct, Mr Huang's breaches of the freezing orders and his misleading statements to a judge of this Court designed to make those breaches possible, taken together, represent a very serious attack on the integrity of the Court and degradation of the proper administration of justice. This is a further reason why a term of imprisonment as punishment is necessary: cf Sun v He (No 2) at [105].
13. I have taken into account that, in some circumstances, a breach of court orders has been punished by a suspended sentence on condition that the contemnor pay a fine or conduct a specified number of hours of community service: eg. Pisano v Dandris (No 4) [2015] NSWSC 1689 and Zhang v Shi (No 6) (2022) 67 VR 469; [2022] VSC 271. After careful consideration of all the circumstances, I have concluded that a fine or a period of community service would not be adequate punishment for the seriousness of the contempts committed by Mr Huang.
14. In my view, taking into account all the relevant factors referred to at [11] above, the term of imprisonment to be served by Mr Huang should be an aggregate term of 6 months, reflecting in particular the very serious nature of the contempts, the need for a punishment which serves the purpose of providing a specific and general deterrent for such conduct and the need to denounce that conduct.

Plaintiff's leave application

1. On 17 November 2023, Robb J (as Equity Duty Judge) made an order requiring Mr Huang to file and serve an affidavit (Disclosure Affidavit) setting out the following information: 1. A list of all aliases used by him to hold any assets and/or maintain any bank accounts; 2. A list of all his assets worldwide, including assets held under aliases, giving their value, location and details (including any mortgages, charges or other encumbrances to which they are subject) and his extent of his interest in the assets; and 3. A list of all his bank accounts worldwide (including BSB and account number), including any bank accounts held under an alias.
2. On 22 November 2023, Mr Huang filed and served a Disclosure Affidavit which stated that the only name used by him to hold any assets or maintain any bank accounts was his given name, that his worldwide assets were nil and that the only bank accounts held by him under his given name were four accounts with Bank of Queensland, CBA, ANZ Bank and Bendigo Bank for which account numbers were provided.
3. By notice of motion filed on 21 November 2023, the plaintiff seeks, relevantly, the following orders: 1. Pursuant to UCPR r 25.12 and s 68 of the Civil Procedure Act 2005 (NSW), the Court directs the first defendant to attend Court on a date to be fixed for the purpose of being cross examined on the Disclosure Affidavit (as that term is defined in the orders of Robb J made on 17 November 2023). 2. Leave is granted to the plaintiff to cross examine the first defendant on the Disclosure Affidavit and on such matters as the Court may later direct.
4. In Universal Music Australia Pty Ltd v Sharman Licence Holdings (2005) 228 ALR 174; [2005] FCA 1587, Moore J noted that cross-examination on an asset disclosure affidavit will not usually be permitted and that it may be appropriate for the Court to order cross-examination of a deponent if he has disclosed assets in a piecemeal, late, untruthful, and manifestly incomplete manner. His Honour added at [28]: Orders concerning disclosure affidavits and cross-examination can, in turn, be made to render the Mareva order more efficacious. This is the touchstone for determining whether leave should be given to cross-examine. A relevant consideration in determining whether leave should be given might, in an appropriate case, be the failure of the deponent of a disclosure affidavit to disclose assets completely or promptly or both. In such a case, leave might be given because doubts might arise about whether the deponent had understood and accepted the obligations and burdens imposed by the Mareva order and the ancillary order requiring the disclosure affidavit. Cross-examination might be appropriate to test whether the disclosure affidavits fully revealed all assets in which the Mareva order operated and which might be available to satisfy any judgement.
5. In the present case, there is evidence before the Court to indicate that Mr Huang has in the past operated under a number of aliases and that he may hold a significant asset under one of those aliases. The fact of Mr Huang's aliases has only recently been discovered by the plaintiff. In all the circumstances it is appropriate, in my view, to grant the leave sought. I note that Mr Huang did not advance any submissions opposing the grant of leave.

Costs

1. The plaintiff submitted that Mr Huang should be ordered to pay the plaintiff's costs (for both the liability and penalty hearings) on an indemnity basis and that the costs be assessed forthwith. It was submitted that the factors warranting indemnity costs are as follows: a. Mr Huang has committed serious contempts that have the tendency to undermine the administration of justice; b. the plaintiff has been significantly prejudiced by his dissipation of $173,900 which adversely affects the prospects of recovering any judgment debt; c. the plaintiff has acted entirely reasonably in pursuing the contempt application, and it is fair that she be compensated for the expenditure she has reasonably incurred in that process; d. the first defendant contested all charges of contempt and made no concessions in respect of them; e. not only did he contest the charges, but he did so by reference to evidence which the Court has found to be unreliable; f. further, the first defendant wasted a significant amount of Court time by (for example) the needless cross-examination of Ms Yu, adducing evidence not set out in his affidavit (thus necessitating lengthy examination-in-chief), advancing spurious defences (such as propounding an untenable construction of the orders and claiming the monies spent on gambling were business expenses) and being evasive in cross-examination (see [71] of the Liability Judgment); and g. in successfully pursuing the first defendant for his contempts, the plaintiff served not only her own interest but also an important public interest in bringing the contemptuous conduct of the first defendant to the attention of the Court (including him having misled the Court), thereby enabling the Court to deal with that conduct in the interests of the effective administration of justice.
2. While it is not uncommon for indemnity costs to be awarded in contempt proceedings, there is no established practice to that effect: GE Dal Pont, Law of Costs (5th Edition, Lexis Nexis, 2021). In my view, most of the matters relied on have already been taken into account in the assessment of the penalty, and to have regard to them again would conflate the question of the appropriate punishment for the contempt with the question of costs: cf NHB Enterprises at [99] and Huang v Liao at [62]. In relation to item (f) I do not regard the proceedings as significantly lengthened by the conduct of Mr Huang's defence. I decline to order costs on the indemnity basis. However, it is appropriate that the plaintiff's costs on the ordinary basis be assessed forthwith because the contempt application is a discrete part of the proceedings, and it will be some time before the substantive proceedings are determined.

Conclusion

1. The Court will make the following orders: 1. Order pursuant to SCR Pt 55 r 13 that, in respect of all the contempts which the Court found on 28 August 2023 had been committed by him, the first defendant (Jun Yu Huang) be committed to a correctional centre for a term of 6 months, commencing from the date of his arrest. 2. Order that a warrant for the committal of Jun Yu Huang to a correctional centre for the said term be issued and executed forthwith. 3. Order the first defendant pay the plaintiff's costs of the proceedings on the contempt motion on the ordinary basis, such costs to be assessed forthwith. 4. Grant the plaintiff leave to cross examine the first defendant on the Disclosure Affidavit (as that term is defined in the orders made by Robb J on 17 November 2023). 5. List the proceedings for further directions at 9.30am on 8 February 2024 before the Equity Registrar.

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: 19 December 2023