NHB Enterprises Pty Ltd v Corry (No 8)

Case •

[2022] NSWSC 97

•

11 February 2022

No judgment structure available for this case.

Supreme Court


New South Wales

Medium Neutral Citation: NHB Enterprises Pty Ltd v Corry (No 8) [2022] NSWSC 97
Hearing dates: 10 September 2021
Date of orders: 11 February 2022
Decision date: 11 February 2022
Jurisdiction:Equity
Before: Bell P
Decision:

1.   Order that the First Respondent, Alexander Stephen Corry, be sentenced, on the first charge against him, to a term of imprisonment of three months commencing from the date of his arrest.

2.   Order that the First Respondent, Alexander Stephen Corry, be sentenced, on the second charge against him, to a term of imprisonment of three months to be served concurrently with the sentence imposed for the first charge.

3.   Order that the First Respondent, Alexander Stephen Corry, be sentenced, on the fourth charge against him, to a term of imprisonment of two months to be served concurrently with the sentence imposed for the first charge.

4.   Order that a warrant for the committal of the First Respondent, Alexander Stephen Corry, to prison for the said term of three months be issued.

5.   Order that the warrant for the committal of the First Respondent, Alexander Stephen Corry, to prison be executed forthwith.

6.   Order that the Second Respondent, Boriana Corry, pay a fine of $15,000.

7.   Order that Order 6 is to be suspended on the condition that the Second Respondent, Boriana Corry, furnishes to the Registrar of the Equity Division, within 18 months of the stay of this Order (made pursuant to Order 8) being lifted, proof that she has performed 25 hours of community service for a school, church or other registered charitable organisation.

8.   Order that the execution of Orders 4, 5 and 6 be stayed pending the determination of the First and Second Respondents’ foreshadowed appeal against the declarations that each of them was in contempt of this Court.

9.   The First Respondent is to pay the Applicants’ costs of the proceedings in respect of the charges against him.

10. The Second Respondent is to pay the Applicants’ costs of the proceedings in respect of the charges against her.

Catchwords:

CONTEMPT – civil contempt – penalties – imprisonment – where contemnor should only be committed to prison as a last resort – where common law purposes and principles of sentencing apply – high degree of necessity for deterrence – where contemnor engaged in serious, deliberate and contumacious conduct in attempt to frustrate search orders made by the Court – consideration of apology to the Court– where contemnor is admitted solicitor and officer of the Court – where conduct of contemnor and evidence regarding penalty warrant custodial sentence – contemnor to serve a term of three months’ imprisonment

CONTEMPT – civil contempt – penalties – where contemnor should only be committed to prison as a last resort – where contemnor engaged in serious conduct in breach of prohibited contact order – where contemnor maintains innocence despite proffering unconditional apology to the Court – where contemnor’s conduct was secondary to that of co-contemnor – imposition of a fine – suspension of sentence conditional upon performance of period of community service

SENTENCING – civil contempt – penalties – imprisonment – where contemnor should only be committed to prison as a last resort – where common law purposes and principles of sentencing apply – where Crimes (Sentencing Procedure) Act 1999 (NSW) does not apply to civil contempt proceedings – high degree of necessity for deterrence – where contemnor engaged in serious, deliberate and contumacious conduct in attempt to frustrate search orders made by the Court – relevance of apology – where contemnor is admitted solicitor of the Court – where conduct of contemnor and evidence regarding penalty warrant custodial sentence – contemnor to serve a term of three months’ imprisonment

SENTENCING – contempt – civil contempt – where common law purposes and principles of sentencing apply – where Crimes (Sentencing Procedure) Act 1999 (NSW) does not apply to civil contempt proceedings – relevant factors of sentence – seriousness of contempt – contemnor’s culpability – motive for contempt – expression of contrition by contemnor – antecedents of contemnor – contemnor’s personal circumstances – necessity of deterrence – necessity to punish contemptuous conduct

Legislation Cited:

Crimes (Sentencing Procedure) Act 1999 (NSW)

Supreme Court Rules 1970 (NSW) r 55.13

Cases Cited:

Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98; [1986] HCA 46

Australian Competition and Consumer Commission v Halkalia Pty Ltd (No 3) [2017] FCA 522

Australian Industry Group v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2000] FCA 629

Australian Securities and Investments Commission v Matthews [2009] NSWSC 285; (2009) 71 ACSR 279

Browne v Dunn (1893) 6 R 67

Dowling v Prothonotary of the Supreme Court of New South Wales (2018) 99 NSWLR 229; [2018] NSWCA 340

He v Sun (2021) 104 NSWLR 518; [2021] NSWCA 95

Kazal v Thunder Studios Inc (California) (2017) 256 FCR 90; [2017] FCAFC 111

Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494; [2006] FCA 83

Matthews v Australian Securities and Investments Commission [2009] NSWCA 155

Mirus Australia Pty Ltd v Gage [2018] NSWSC 35

NHB Enterprises Pty Ltd v Corry (No 7) [2021] NSWSC 741

NHB Enterprises Pty Ltd v Ghaly [2022] NSWSC 96

R v Edwards (1996) 90 A Crim R 510

R v Way (2004) 60 NSWLR 168; [2004] NSWCCA 131

Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309

Sun v He (No 2) [2020] NSWSC 1298

Category:Sentence
Parties: NHB Enterprises Pty Ltd (First Applicant)
Finn Pharmaceuticals Pty Ltd (Second Applicant)
Alexander Stephen Corry (First Respondent)
Boriana Corry (Second Respondent)
Representation:

Counsel:

T B Senior (Applicant)
A S Corry (in person) (First Respondent)
A S Corry (by leave) (On behalf of Second Respondent)

Solicitors:

HWL Ebsworth (Applicants)
File Number(s): 2019/54125
Publication restriction: N/A

Judgment

  1. BELL P: On 24 June 2021, I declared that certain charges of contempt against the First Respondent, Mr Alexander Stephen Corry (Mr Corry) and the Second Respondent, Mrs Boriana Corry (Mrs Corry) had been proved beyond reasonable doubt: see NHB Enterprises Pty Ltd v Corry (No 7) [2021] NSWSC 741 (the Contempt Judgment or CJ). These reasons concern the appropriate penalty to be imposed on Mr and Mrs Corry, and assume familiarity with the Contempt Judgment.

  2. Although the relevant background to the Contempt Motion was set out in the Contempt Judgment at [10]–[190], it is convenient to provide a brief summary for the purposes of this judgment.

Factual background

  1. NHB Enterprises Pty Ltd (NHB Enterprises) is a veterinary compounding chemist that imports, manufactures, prepares and/or compounds medications for use by Australian veterinary practitioners and animal owners. NHB Enterprises kept its formulations within a software database known as PK Compounding Software (PK Software), and also held a separate database which contained formulations and standard operating procedures relating to its business (the Vivaldi Database). NHB Enterprises and Finn Pharmaceuticals Pty Ltd (Finn Pharmaceuticals) are together referred to as “the Applicants”.

  2. Mr Corry was employed with NHB Enterprises from February 2008 to April 2017, and for a period of that time, was the leading pharmacist and Chief Operations Officer at the company. Mr Rimon Ghaly (Mr Ghaly) was employed by NHB Enterprises between May 2014 and June 2017 and, for a period of time, was the pharmacist in charge. For reasons given in the Contempt Judgment, the charges against Mr Ghaly were dismissed.

  3. In January 2016, Mr Corry became a director and shareholder of Medicina Pty Ltd, which traded under the name NexGen Pharma (NexGen or Medicina), in competition with the Applicants.

  4. On 14 June 2017, the Applicants commenced proceedings in this Court against Mr Corry, NexGen and Corry Corporation Pty Ltd (the 2017 Proceedings), alleging breaches of various statutory, contractual, fiduciary and equitable obligations owed to NHB Enterprises and Finn Pharmaceuticals. On the same day, a search order was made against Mr Corry, Medicina and Corry Corporation (the First Search Order).

  5. The 2017 Proceedings were eventually settled following a mediation, with the parties entering into a “Deed of Settlement and Release” (the First Settlement Deed) which provided for the filing of consent orders. Consent orders were subsequently made on 17 April 2018 (the Consent Orders) which provided, inter alia, for the Defendants to deliver up to the Plaintiffs any part of the PK Software and the Vivaldi Database, and any documents created using these databases, which were in their possession, custody or control.

  6. In May 2018, the solicitors for the Defendants confirmed by email to the solicitors for the Plaintiffs that each Defendant had no document in their possession, custody or control that would fall within the relevant categories under the Consent Orders.

  7. However, following affidavit evidence given by a former employee of NexGen who deposed to having observed Mr Corry with a copy of the PK Software on his personal laptop computer after the making of the April 2018 Consent Orders, and to having a conversation with Mr Corry in which the latter communicated that he still held some formulas created by NHB Enterprises, fresh proceedings were commenced in this Court in February 2019 against Mr Corry and Medicina (the 2019 Proceedings).

  8. On the same day, the Court made a search order (the Second Search Order), permitting a search to be carried out at the Corry residential premises and the business premises of NexGen. Paragraph 25 contained a “Prohibited Contact Order”, which outlined that except for the sole purpose of obtaining legal advice from an Australian legal practitioner, “you must not, until 4:30pm on the return day, directly or indirectly inform any person of this proceeding or of the contents of this order, or tell any person that a proceeding has been or may be brought against you by the applicant”. Paragraph 26 provided, inter alia, that there could be no destroying, tampering with, or cancelling of any of the “listed things” in the search order.

  9. The Second Search Order was executed on the morning of 19 February 2019 at the Corry residence. Mrs Corry was told by Mr Mackenzie, the Independent Solicitor forming part of the Search Party, that she could not disclose the existence of the proceedings or the search. Subpoenaed telephone records revealed three calls from Mr Corry to Mrs Corry taking place during the period from 9.37am–9.39am, with one of those calls being for 180 seconds, and some six calls between Messrs Corry and Ghaly from 9.45am–9.57am, during the execution of the Second Search Order.

  10. Between 9.47am and 1.00pm, video surveillance revealed Mr Ghaly carrying various items, including a computer owned by Mr Corry, Mr Ghaly’s two laptops, and various documents, from NexGen’s business premises to a nearby mechanic business. Later seizure and inspection of the materials at the mechanic’s premises revealed that these were NexGen’s computers and business records.

  11. Further, at approximately 10.03am, Mrs Corry received a call, and when she gave the phone to Mr Mackenzie, it became evident that both her lawyer and Mr Corry were present on the call. Mr Mackenzie gave evidence that when he questioned Mr Corry over the phone as to how he found out about the Search Party, Mr Corry answered “[m]y wife told me. I’m on my way now. I’ll be there soon”.

  12. In addition to the hard copy documents, laptops and iPhone seized during the searches, the Search Party’s Independent Computer Expert (Ms Balit) gained access to a Microsoft Dynamics 365 Platform (the Dynamics Account) used by the NexGen business. Mr Corry provided his username and password for the Dynamics Account to Ms Balit. However, on 21 February 2019, Ms Balit’s colleague informed her that he had been unable to log on to the Dynamics Account with the password that he had previously been using and which had been provided by Mr Corry. Ms Balit was provided with the new password on 22 February by Mr Corry’s solicitor following a Court order requiring this to occur, and was able to complete the download of the Dynamics Account.

  13. A large amount of confidential information belonging to NHB Enterprises, including the PK Software and the Vivaldi Database, was found on the computers of Mr Corry.

  14. A Statement of Claim in the 2019 Proceedings was filed on 2 May 2019 seeking, amongst other relief, a declaration that the Defendants were in breach of the Consent Orders.

  15. A mediation in relation to the 2019 Proceedings took place in June 2019 and the proceedings resolved as between a number of parties. Terms of settlement were entered into between the Plaintiffs and a number of the Defendants, providing for consent orders to be made dismissing the claims against those Defendants, including Mr Ghaly but excluding Mr Corry.

  16. On 14 August 2019, the Applicants filed a Notice of Motion seeking declarations that each of Mr and Mrs Corry (and Mr Ghaly) were in contempt of Court through various different aspects of their conduct.

  17. With respect to Mr Corry, the four charges brought against him were as follows:

  1. in wilful disobedience and contravention of the Consent Orders of April 2018, Mr Corry retained the PK Software 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. in wilful disobedience and contravention of the Consent 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);

  3. prior to the execution of the Second Search Order at NexGen’s business premises, Mr Corry contacted Mr Ghaly and directed him to remove items referred to in the Search Order from the business premises of NexGen, before the execution of the Second Search Order at that premises (the Third Corry Charge); and

  4. Mr Corry breached and frustrated the Second Search Order through the interruption of the download of the Dynamics Account (the Fourth Corry Charge).

  1. With respect to Mrs Corry, the charge brought against her was that in wilful disobedience and contravention of the Second Search Order, she breached the Prohibited Contact Order and/or helped or permitted Mr Corry to breach the Prohibited Contact Order by informing him about the Second Search Order.

The Contempt Judgment

  1. In relation to the First Corry Charge, I was satisfied beyond reasonable doubt that the charge was sustained. There was a significant body of information and documents derived from the PK Software and the Vivaldi Database located both physically and electronically, on Mr Corry’s devices, which were retained in disregard of both the First Settlement Deed and the Consent Orders: see CJ [258]–[281].

  2. In relation to the Second Corry Charge, I held that Mr Corry continued to make use of the PK Software and the data stored on it in the ongoing business of NexGen, in direct competition with NHB Enterprises: see CJ at [282]–[306].

  3. In relation to the Third Corry Charge, however, I held that this could not be sustained, as such “wilful” conduct could not be made out in circumstances where it could not be established on the evidence that Mr Corry was aware of the substance of the Prohibited Contact Order at the time of a particular telephone conversation with Mr Ghaly: see CJ [307]–[320].

  4. In relation to the Fourth Corry Charge, I held that the inference was inescapable that it was Mr Corry who caused the password to be changed for the Dynamics Account, with the intention of frustrating the search process being conducted by the Independent Computer Expert: see CJ [321]–[336].

  5. With respect to Mrs Corry, I was satisfied beyond reasonable doubt that, in wilful disobedience and contravention of the Second Search Order, Mrs Corry breached the Prohibited Contact Order by informing Mr Corry about the Search Order: see CJ [343]–[363] and [366]. However, I was not satisfied to the requisite standard that Mrs Corry had helped or permitted Mr Corry to breach the Prohibited Contact Order, in circumstances where the Court was not satisfied that Mr Corry was aware of that aspect of the Second Search Order at the time of his communication to Mr Ghaly: see CJ [364]–[366].

Relevant legal principles

  1. The underlying rationale of sentencing for both civil and criminal contempt is to protect the effective administration of justice: see He v Sun (2021) 104 NSWLR 518; [2021] NSWCA 95 at [10] (He v Sun); Mirus Australia Pty Ltd v Gage [2018] NSWSC 35 at [7] (Mirus); Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 107; [1986] HCA 46; Kazal v Thunder Studios Inc (California) (2017) 256 FCR 90; [2017] FCAFC 111 at [97] (Kazal); and Australian Securities and Investments Commission v Matthews [2009] NSWSC 285; (2009) 71 ACSR 279 at [26]–[27] (Matthews).

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

  3. In Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309 (Maniam), where there had been deliberate and contumacious refusals to comply with subpoenas on repeated occasions, at 313–315 Kirby P (as his Honour then was, and with whom Mahoney and Hope JJA agreed) outlined that:

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

…

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

…

The most serious class of contempt, from the point of view of sanction, is contumacious contempt. Not every intentional disobedience involves a conscious defiance of the authority of the Court which is the essence of this class of contempt: see Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 at 500. This class of contempt is reserved to cases where the behaviour of the contemnor has been shown to be aimed at the integrity of the courts and designed to degrade the administration of justice, as distinguished from a simple interference with property rights manifested by a court order: cf Root v MacDonald 157 NE 684 (1927) at 688; 54 Am LR 1422 (1927) at 1429. In cases where such a measure of wilfulness is established, the court may proceed to punish the convicted contemnor by the imposition of a custodial sentence or a fine or both. In such a case the elements necessary to establish wilfulness, carrying as they do the potential of penal consequences, must all be proved to the criminal standard: see Consolidated Press Ltd v McRae (1955) 93 CLR 325 at 333. The procedures of a criminal prosecution must be strictly observed: see Spindler v Balog (1959) 76 WN (NSW) 391 at 393.”

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

  2. 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 The Queen (1986) 161 CLR 278; [1986] HCA 88 at 292 (Mason and Brennan JJ).”

  1. In Matthews at [26]–[27], Barrett J (as his Honour then was) set out the following factors generally to be taken into account in addressing the question of the penalty to be imposed for contempt of court:

  1. the seriousness of the contempt proved;

  2. the contemnor’s culpability;

  3. the reason or motive for the contempt;

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

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

  6. the character and antecedents of the contemnor;

  7. the contemnor’s personal circumstances;

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

  9. the need for denunciation of contemptuous conduct.

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

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

  1. the nature and circumstances of the contempt;

  2. the effect of the contempt on the administration of justice;

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

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

  5. whether the contemnor subjectively intended to disobey the order;

  6. the importance of bringing home to the contemnor the seriousness of the contempt;

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

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

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

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

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

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

“The burden of the additional authority in this Court is to add weight to the factors listed in Matthews, rather than requiring any change by way of addition, subtraction or variation. The focus remains on the core themes of the objective seriousness of the conduct and, in particular, its effect on the administration of justice, subjective factors such as the contemnor’s culpability, antecedents and attitude, including in particular any apology or other palpable sign of contrition, the capacity to pay a fine, and imprisonment being a last resort. Deterrence remains a dominant theme, both specific and general. Even denunciation and punishment can be seen as bolstering deterrence. That is especially so when the conduct entails contemplation and the opportunity to reflect and desist.”

Evidence and submissions on penalty hearing

  1. Unlike the proceedings dealing with questions of liability, Mr and Mrs Corry both swore affidavits for the purposes of the penalty proceedings. By agreement between the parties, Mr and Mrs Corry were not required for cross-examination on the basis that they would not make a Browne v Dunn submission in relation to submissions made by the Applicants.

Mrs Corry’s evidence

  1. In her evidence, Mrs Corry deposed that she was currently unemployed and responsible for the home schooling of her 5 and 12-year-old children, the elder of whom had been diagnosed with spondylitis of the spine in April 2021 which has required Mrs Corry to take her to regular medical appointments. Mrs Corry’s only assets are a car and household furniture. She had sold her family home and loaned the share of the sale proceeds to her husband to assist in the 2017 Proceedings. She gave evidence that she did not receive any proceeds from the sale of the home, and was unable to afford private representation in the contempt proceedings against her. An application for legal aid had also been unsuccessful.

  2. In her Affidavit, Mrs Corry provided to the Court an explanation of the events of the day of the execution of the Second Search Order. On this account, contrary to my findings, Mrs Corry had no contact with her husband until he returned to the family home, which Mrs Corry said was at about 10.15am. At [27]–[29] of her Affidavit, Mrs Corry gave the following evidence:

“27   I was not aware of the Penal Notice contained in the documents I was provided by Mr MacKenzie. I was not told that I should read that paragraph or that the Court had made a search order. I did not know that if I made or received any phone calls, I would be at risk of being put in prison or fined. If this had been made clear to me, I would not have made any phone calls for any reason.

28   I have since read the document titled Verifact Report exhibited to the affidavit of Mr Neil Wallman sworn 20th December 2019 and in which it records Mr Ghaly removing items from the corporate headquarters of the Second Defendant. I did not know why Mr Ghaly was removing items from the Second Defendant, but I have since obtained the email sent by Alex to Mr Daniel McKinnon who was our family lawyer. A copy of that email is included and marked Annexure C at page 14.

29   I understand his Honour has found me guilty of contempt and that I am bound by the findings that I disclosed the existence of the Search Order. I am not aware of any actions of mine, that may have been the source of the disclosure which forms the basis of these proceedings. However, to the extent that any actions of mine were taken in breach of the Search Order, I provide an unreserved apology to the Court.”

  1. The email referred to in [28] of Mrs Corry’s Affidavit (which was not in evidence for the purposes of the proceedings concerning liability and was from Mr Corry to his then lawyer, dated 27 May 2019 at 6.53am) was in the following terms:

“Hi Dan,

Below is my recollection of the phone conversation with Rimon [Ghaly] in which I advised him to gather up personal belongings.

Alex:   Rimon, I just called Boriana, she isn't picking up. When the phone picked up it was muffled, I could hear Nia and it sounded like other people.

Rimon:      Ok?

Alex:   I am on my way home now to find out because she should have been at work, or on her way. But, I think you need to gather up all the personal stuff and just put it away, get it separated move it off site. I don't know what the situation, but we need to make sure that work stuff is clearly work stuff.

Rimon:      ok, like what?

Alex:   I don't know, just have a look around, like your computers, my computer, anything personal ... I know there ls some stuff in the corner on my desk. Just get rid of anything that doesn't look like It belongs to NexGen and we can sort it out later. I will let you know when I know more.”

  1. The terms of this email bear an extremely close similarity to Mr Ghaly’s account of his conversation with Mr Corry on the morning of the Second Search Order (see Contempt Judgment at [92]). As to that account, at [95] of the Contempt Judgment, I observed that:

“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.”

  1. The very close correspondence between Mr Ghaly’s account, given some seven months after the day of the conversation, and Mr Corry’s untested email account, given more than three months after it, leads me to have real doubt as to the independence, and therefore any degree of reliability, of Mr Ghaly’s recollection. This is in addition to the observations made at [95] of the Contempt Judgment in relation to the conversation, which have been set out above.

  2. The email account and Mrs Corry’s protest that she is “not aware of any actions of mine that may have been the source of disclosure which forms the basis of these proceedings” (see [36] above) are inconsistent with my findings in the Contempt Judgment to the effect that Mrs Corry informed her husband of the Second Search Order: see [25] above and the references to the Contempt Judgment there cited.

  3. On any view of the objective evidence, Mr Corry placed three phone calls to Mrs Corry on the morning of the Second Search Order in close sequence, culminating in a 180-second call (see Contempt Judgment at [89]). On the account given by Mr Corry in the email of 27 May 2019, Mrs Corry must have answered at least one of those calls in order for Mr Corry to have claimed to have heard his daughter and other people speaking (although Mr Corry’s daughter did not come downstairs until some time after 9.45am, a fact on its face inconsistent with the timing of the call). Mrs Corry, however, says nothing in her Affidavit about answering a call, even surreptitiously, from her husband.

  4. Of course, on Mr Mackenzie’s account, Mr Corry was more direct, saying in answer to his inquiry that his wife told him about the Second Search Order: see Contempt Judgment at [104]. The fact that Mr Athanassios, a solicitor who acted for Mr Corry in respect of the Second Search Order, knew about the existence of the Order when he spoke to Mr Mackenzie also supports the finding that Mrs Corry was in some way the source of that information. As I held at [353] of the Contempt Judgment:

“The Applicants also placed reliance on the fact, as noted at [103] above, that when she answered the phone call at approximately 10.03am, Mrs Corry told Mr Mackenzie that it was from her lawyers. According to his Independent Solicitor’s Report, Mrs Corry picked up the call and said ‘Hi Chris, how are you?’ This led the Applicants to submit (and it is a submission I accept) that Mrs Corry apparently knew that Mr Athanassios would be calling even though (1) prior to that time she had been liaising with Coleman Greig Lawyers (not Mr Athanassios or anyone else from Miller & Prince Lawyers) and (2) the contact name in respect of the current caller on her phone said ‘Alex’, not ‘Chris’. The inescapable inference, it was submitted and I accept, was that she had spoken to Mr Corry beforehand and was aware from that conversation that Mr Athanassios would be calling her in respect of the Second Search Order. It is certainly the case that she had spoken to Mr Corry a number of times shortly beforehand. This included the conversation referred to at [91] above.”

  1. It follows from these findings that I am unable to accept Mrs Corry’s evidence that she was not aware of any actions of hers “that may have been the source of the disclosure which forms the basis of these proceedings”. That undermines the “unreserved apology” she has advanced to the Court.

Mr Corry’s evidence

  1. According to an affidavit of 7 April 2020 at [71]–[96], Mr Corry’s financial circumstances as at that date were as follows:

“72   In or around October 2017 my solicitors requested that I sign an irrevocable undertaking to permit them to apply the proceeds from the settlement of my family home to their fees.

73    For this reason, I did not receive the income from the sale of my family home.

…

90    At the time [of] affirming this affidavit:

i.     Boriana Corry is not employed. My income is the sole income; and

ii.    I am not receiving any income supplements from Centrelink.

iii.   Boriana Corry is not receiving any income supplements (including day-care supplements) from Centrelink.

91    At the time of affirming this affidavit, my income is the sole income in my family.”

  1. Mr Corry gave evidence that he is currently employed as a casual community pharmacist but that, following delivery of the Contempt Judgment, his conduct has been referred to the Pharmacy Council of NSW for investigation. He has not worked in the pharmaceutical compounding industry since ceasing work for Medicina. He also apprehends that he will not be able to work in the legal profession in light of the judgment. That apprehension is well founded, at least in the short term.

  2. Mr Corry remains the sole income provider for his family and deposed to the fact that the only assets he now owns are household furniture.

  3. Mr Corry also explained that, although he was not part of the settlement of the 2019 Proceedings entered into by Medicina with the Applicants, he forgave a loan of $423,627.63 to facilitate that settlement and contributed a further amount of $140,000 for Medicina’s legal expenses.

  4. He also submitted that he did not personally benefit from his retention of documents and that his involvement in NexGen left him significantly in debt. In the absence of any challenge or evidence to the contrary, I am prepared to accept this evidence.

  5. In relation to the First Charge of which Mr Corry was found guilty, whilst acknowledging that he was bound by my findings in the Contempt Judgment, he nonetheless maintained that he did not believe that the words “delivery up” required him to provide to the Applicants any additional copies of material he had already provided after he had submitted to the Consent Orders, nor that he was required to delete any material that he had previously provided to the Applicants. In other words, to the extent that he retained copies of documents otherwise captured by the Consent Orders, he was entitled to keep those documents so long as he had delivered up copies of the documents to the Applicants.

  6. This is, in my opinion, a most unattractive submission and I have serious reservations as to whether it represents Mr Corry’s genuine belief at the time. That he in fact genuinely believed that he had not been entitled to keep and use certain documents and software was most powerfully reflected in his instructions to Mr Ghaly on the morning of the Second Search Order, which led to Mr Ghaly desperately moving not just personal possessions but extensive amounts of documentation once tipped off about the imminence of the search. As observed in the Contempt Judgment at [280]–[281], this particular aspect of the case was entirely consistent with a profound consciousness on Mr Corry’s part that, contrary to what he now maintains, he was not entitled to keep any of the Applicants’ documents.

  7. Moreover, Mr Corry’s then solicitors, Coleman Greig, confirmed to Mr Wallman in an email on 11 May 2018 that each of the then Defendants, including Mr Corry, had no documents in their possession, custody or control that fell within paragraphs 1 and 2 of the Consent Orders. As the Applicants submitted, this response was entirely inconsistent with the evidence Mr Corry gave for the purposes of the penalty proceedings as to the state of his belief.

  8. If Mr Corry took a strained interpretation of the effect of the orders, contrary to their obvious intent and purpose, that was reckless on his behalf. More likely is the fact that he knew that he was not entitled to retain copies of the documents and has developed a highly semantic explanation as a purported justification of his actions.

  9. Mr Corry placed reliance in his submissions on a letter sent by HWL Ebsworth to Coleman Greig on 16 August 2018 dealing with a proposal that their IT Expert would destroy the Search Order Material which had been seized and inspected. This letter stated:

“In circumstances where:

(a)   the Search Order Material contains hundreds of thousands of documents which clearly fall within the purview of the Orders of 16 April 2018 (and would be required to immediately be returned to our clients if the Search Order Material were provided by your clients),

(b)   your clients have copies of the documents and items within the Search Order Material,

we propose to instruct the Klein and Co. to destroy the Search Order Material.”

  1. Mr Corry submitted that this letter demonstrated that the Applicants’ solicitors knew that he was retaining documents caught by the Second Search Order. I do not agree. Whilst the words of subparagraph (b) read in isolation may support such an interpretation, subparagraph (a) and, in particular, the words in parentheses, defeat it. Read in context, the words of subparagraph (b) must be taken to refer to the documents within the universe of Search Order Material that were not caught by the Consent Orders.

  2. Other explanations advanced by Mr Corry in his affidavit evidence and submissions repeated arguments that had been made and rejected in the Contempt Judgment. Thus he repeated his contention that there was a distinction between “formulations” and “formulation lists” (cf, Contempt Judgment at [259]) and submitted that his breaches should be understood by reference to his belief as to this distinction.

  3. As to Mr Corry’s submission that he did not understand that the Consent Orders prohibited his retention of the PK Software itself, a similar argument was rejected in the Contempt Judgment at [278] as follows:

“I do not accept this argument, as information contained in the PK Software would include not only data capable of being manipulated by the software itself, but the underlying programming instructions which enable the software to operate. Even if this were not the case, and the underlying software driving the PK computer program and the Vivaldi Database were not themselves captured by the April 2018 Orders, this would be of no ultimate assistance to Mr Corry, as there was extensive information contained in the PK Software and the Vivaldi Database which the Applicants did demonstrate was retained by Mr Corry. The retention of the pure software, moreover, which is not disputed by Mr Corry, permitted the use of the information contained in it. This is relevant to the Second Corry Charge.”

  1. Mr Corry also advanced the argument that he understood that the general words “documents created using the [Applicants’] PK Software” and “documents created using the [Applicants’] Vivaldi Database” in the Consent Orders were in some way limited to specific documents which had been referred to in one of Mr Wallman’s Affidavits. I would reject this argument. It is simply not supported by the terms of the Consent Orders.

  2. On the subject of the Fourth Corry Charge, namely that Mr Corry breached and frustrated the Second Search Order through the interruption of the download of the Dynamics Account, part of Mr Corry’s evidence was that he could not contact Ms Balit. That evidence was inconsistent with Ms Balit’s contemporaneous evidence contained in her report of 21 February 2019 which recorded that, on the previous day, she was contacted by Mr Corry requesting access to his Microsoft Office 365 business account. This evidence was reflected in [132] of the Contempt Judgment. So, too, Mr Corry’s affidavit evidence on the penalty hearing that he was not aware of any of the steps that were being taken by Ms Balit because he could not contact her was inconsistent with the evidence contained on page 6 of her contemporaneous report, that on 19 February 2019 she had explained to Mr Corry that “we will take control of the above accounts onsite and then download the contents of these online accounts from our offices, to which Mr Corry agreed.”

  3. It suffices to record at this point that the evidence sought to be led by Mr Corry in the course of the penalty hearing was not only inconsistent with my findings in the Contempt Judgment but was inconsistent with contemporaneous documents which formed the basis for those findings.

  4. Mr Corry also led evidence and made submissions to the effect that he was not able to swear an affidavit containing apologies in advance of the liability hearing because he was prejudiced in preparing his defence by various actions of the Applicants, including in limiting his access to computers and documents. This is not an argument which, even if made good (which I do not consider it to have been) is of any force. Mr Corry put the Applicants to strict proof of their charges and, in light of the way Mr Corry ran his defence and that of his wife, including through the cross-examination of various witnesses, the notion that he would have apologised for his actions in advance of the liability hearing had he had greater access to information is not in my view plausible. Furthermore, to the extent that Mr Corry complained about matters of pre-trial procedure in his Notice of Motion filed immediately before the contempt hearing, those complaints were dismissed: Contempt Judgment at [238]–[251].

  5. As to the charge against Mrs Corry, Mr Corry purported to supply the following explanation, at [54] of his Affidavit affirmed for the purposes of the hearing on penalty:

“a.  On 19th February 2019, I left home at about 8.30 am to drop my daughter Daniela at her former school St Pauls Grammar.

b.   l made two relevant phone calls at 9.37 am and 9.39 am. l recall that both these calls were cancelled, and I remember thinking this was not normal.

c.   At 9.39 am I made a further call which lasted approximately 2.59 seconds to Boriana's number. This included the time it took for the call to ring before picking up. I recall that when it connected, I thought I heard my 4-year-old daughter Nia speaking. I also heard what sounded to be muffled male voices. I could not hear any words and the call was abruptly cancelled without anybody speaking directly into the microphone.

d.   Immediately after the phone call I refer to above, I called Mr Ghaly and requested he take steps to make sure the Second Defendant was: clean; all unnecessary items were removed to an adjacent storage unit that was used by the Second Defendant; and that only those items which belonged to the Second Defendant remained.”    

  1. It will be obvious that this evidence, not advanced during the hearing on liability, reflects the terms of the 27 May 2019 email set out above. I refer to and repeat what I have said about this email in [39]–[40] above.

  2. Mr Corry said he called Mr Ghaly on the morning of the Second Search Order because he thought that Mr Davidson (who claimed to be owed money by Medicina) may have arranged for liquidators to attend Medicina’s premises. In this context, Mr Corry had been informed by Mr Athanassios during the afternoon before the execution of the Second Search Order that Mr Davidson’s solicitors had advised of their intention to serve a notice of statutory demand. Mr Corry sought to place his phone call to Mr Ghaly in the context of concern about that purported statutory demand, stating that he wanted to protect any personal items from repossession arising from or in connection with the statutory demand.

  3. Mr Corry’s evidence then continued as follows:

“56   When I spoke to Mr Ghaly in the call that I have referred to above:

a.   I did not advise him to conceal items or to move them to AAA Automotive. I do not know why he chose to do this; and

b.   I had not been told and I was not aware that the Court had entered the Second Search Order.

57   At no time before I arrived at my home on the 19th February 2019 was I aware that Court had entered the Second Search Order.

58   Boriana did not ever disclose to me, or otherwise, notify me in any way that the Court had entered the Second Search Order.”

  1. There are a number of difficulties with this account by Mr Corry.

  2. First, insofar as he sought to place his conversation with Mr Ghaly in the context of an anticipated service of a notice of statutory demand (and by implication not a search order), Mr Athanassios’s first question in his conversation with Mr Mackenzie (see Contempt Judgment at [104]) was “when will you be commencing the search?” In other words, he knew about the search order and accepted under cross-examination that he learned of it from Mr Corry.

  3. Similarly, according to Mr Mackenzie’s account, Mr Corry, when asked how he had found out about the Second Search Order, said “My wife told me”. Whether or not these precise words were said or Mr Corry just said, as he had maintained, “I called my wife” (an explanation he sought to make orally in the course of the penalty hearing at Tp 19.7), it is plain that he knew about the Second Search Order prior to his return home and prior to the phone call itself. That was the sole focus of the question to him. This is simply inconsistent with his assertion in [57] of his Affidavit that at no time before he arrived home on 19 February 2019 was he aware that the Court had entered the Second Search Order. On his account of his first call to his wife (prior to the call with Mr Athanassios), namely that he had just heard muffled voices and not any words, it is surprising that his next action was to call Mr Ghaly at NexGen’s premises rather than to return directly home.

  4. Mr Corry’s affidavit evidence included apologies to the Court, but the quality and force of those apologies was undermined by what was, to a significant degree, canvassing of findings made during the liability stage of the proceedings. It was Mr Corry’s prerogative not to give evidence at that stage of the hearing and the criminal nature of the proceedings (see [28] above) meant that no inference could be drawn against him for not giving evidence. But having taken that forensic course, for the purposes of the penalty proceedings, it was problematic to seek to make out a case on the facts inconsistent with findings that had been made following the liability hearing.

Consideration

Mr Corry

  1. Mr Corry submitted that his contempts as found were at the lower end of the scale, that his role in “facilitating the compensation obtained by the Applicants is relevant to the overall assessment of culpability” and that the contempts, as found, “occurred because of a subjective bona fide belief in the scope and operation of the Consent Orders”.

  2. In my view, and accepting the common law principle that a contemnor should only be committed to prison as a last resort (see R v Way (2004) 60 NSWLR 168; [2004] NSWCCA 131 at [115]; He v Sun at [68]), the conduct of Mr Corry, as found and described in the Contempt Judgment, amounted to a serious contempt and warrants nothing less than a custodial sentence. Mr Corry’s evidence on the penalty hearing has done nothing to persuade me that his conduct was not of the deliberate and contumacious character earlier described.

  3. I have not found the purported explanations of his conduct, nor his purported understanding of the orders I have found he breached, at all convincing, for reasons given earlier in this judgment. Mr Corry could not have been in any doubt that the purpose of the First Settlement Deed and the accompanying Consent Orders was to preclude him from retaining and using information he had obtained from the Applicants in competition with them. But that is precisely what he did and what he has asserted that he understood he was entitled to do. If that were truly the case, however, his communications with Mr Ghaly on the morning of the execution of the Second Search Order at his home, immediately after his 180-second telephone call with his wife, and what may be inferred about those communications from Mr Ghaly’s actions immediately thereafter in seeking to remove records and computers, as captured in surveillance footage, is not explicable.

  4. Moreover, whilst his attempt to provide evidence in support of his wife’s non-involvement in the flouting of the Prohibited Contact Order may be understandable at a human level, Mr Corry wishing to protect and assist his wife, for reasons also given above I do not accept it.

  5. On Mr Corry’s account of what he heard after his wife had accepted his call, he could not hear anything other than muffled voices and yet this was immediately followed by a series of phone calls to Mr Ghaly, who commenced urgently to move (and dispose of) documentation as well as computers from Medicina’s premises. The suggestion by Mr Corry in the penalty proceedings that this was motivated by the threat of service of a statutory demand was not plausible and Mr Corry’s denial that he was aware of the Second Search Order until he returned home is flatly inconsistent with his answer to Mr Mackenzie’s question during the initial telephone conversation with Messrs Corry and Athanassios as to how Mr Corry became aware of the search order, namely from the telephone call to his wife.

  6. These features of Mr Corry’s evidence in the penalty hearing significantly undermined the force of the apology he purported to proffer to the Court and his purported acceptance of the Court’s findings.

  7. Mr Corry’s contempts were serious. It seems to me that he took the view that Mr Bova and his company had been adequately compensated in and by the First Settlement Deed — he pointed out in his Affidavit, apparently as relevant to the penalty that should be imposed on him, the amounts that had been paid to the Applicants from the first and second settlements — and took the view that he would retain and continue to use information that was central to the Applicants’ business in building up his rival business of Medicina, arrogantly or recklessly thinking that Mr Bova would not pursue him twice or that he would get away with it.

  8. It may also be that he felt that much of the information and formulations etc that belonged to the Applicants had in fact been developed by him during his years with Mr Bova’s company — some of his evidence in relation to certain documents was to this effect — such that he took the view that he had some continuing entitlement to that information. If he did think this, he was not justified in so doing and should have known that.

  9. In relation to the Fourth Corry Charge, Mr Corry also cannot escape the conclusion that it was he who changed or caused the change to the password for the Dynamics Account after the seizure of his computer — a matter he ultimately accepted in submissions on the penalty hearing. This was in circumstances where I have found that he had requested but had been denied access to the computer whilst it was being inspected and downloaded by the Independent Computer Expert, who he knew was in the process of downloading information from it. His evidence in this regard during the penalty hearing did not convince me to revisit the findings I had made in relation to this issue in the Contempt Judgment.

  10. Mr Corry’s position is exacerbated, not enhanced, by the fact that, apart from being a pharmacist, he is also an officer of this Court, although he appears never to have practised as a lawyer. The Applicants submitted that this made the flouting of this Court’s Consent Orders following the First Settlement Deed all the more egregious. As has regularly been pointed out, the flouting of court orders, whether or not by an officer of the Court, cannot be tolerated and must attract significant sanctions. Otherwise, the rule of law and the necessary respect required for court orders would quickly evaporate: Australian Industry Group v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2000] FCA 629 at [79]–[80].

  11. In approaching the sentencing task, I have taken into account Mr Corry’s personal circumstances, including the possible consequences of the findings of the Court for his ability to engage in the professions of pharmacy or law. It is also to be noted that, on the evidence, he is the sole breadwinner for his family and they will undoubtedly be affected by his incarceration but that, regrettably, is unavoidable. That proposition is not advanced by way of mitigation (cf, R v Edwards (1996) 90 A Crim R 510) but it will be part of Mr Corry’s punishment that he will have to live with having let his family down in such a significant way.

  12. Mr Corry’s evidence as to his personal circumstances shows that he has been very significantly affected by the litigation with the Applicants. For that, he has no one to blame but himself but, as part of his subjective case, I have regard to the impact of events and the proceedings on his finances and his future professional prospects. I have also accepted that he did not ultimately benefit from the contemptuous conduct (see [48] above) although the retention of extensive volumes of the Applicants’ documentation was no doubt intended to benefit Mr Corry’s fledgling rival business.

  13. Mr Corry’s personal circumstances will be further adversely affected by the costs orders that I propose to make: see [97]–[102] below.

  14. In my view, taking into account the various relevant factors identified in Matthews and Halkalia (see [31]–[32] above) including the seriousness of the conduct and the need for general and specific deterrence, in respect of each of the First and Second Corry Charges, Mr Corry should serve a custodial term of three months, to be served concurrently given the interconnection of the conduct: cf, Sun v He at [120].

  15. In relation to the Fourth Corry Charge, I would also impose a custodial sentence but of two months, to be served concurrently with the other two sentences.

  16. A fine would, in my opinion, be quite inadequate in respect of any of the three charges that I have found have been sustained, not least because, on Mr Corry’s evidence, he does not have the means to pay it. Even if he did, however, I would still take the view that anything less than a custodial sentence would be inadequate for the contempts which I have found to have been committed.

  17. Nor do I think that there is any proper basis to suspend the sentence I propose even though there is a power in r 55.13 of the Supreme Court Rules 1970 (NSW) to do so: cf, Maniam; He v Sun. No submission was made that a suspended sentence would be appropriate in his case.

Mrs Corry

  1. The position in relation to Mrs Corry is more difficult to deal with and I have given it anxious consideration.

  2. Her contempt, as found, was undoubtedly serious and in the face of clear warnings by Mr Mackenzie not to divulge the fact of the Second Search Order to anyone. Mrs Corry has maintained, notwithstanding my findings, that she did not do so. The quality of her apology to the Court is not enhanced by that position and, as I have explained, the evidence before and findings of the Court are that the source of Mr Corry’s knowledge of the Second Search Order was a phone call he placed to his wife.

  3. On any view of the evidence (including the evidence adduced on the penalty hearing), Mrs Corry must have accepted that call for Mr Corry to have learned about the search order. If all that she did was accept a call from her husband without drawing it to Mr Mackenzie’s attention so that Mr Corry could hear what was happening at their residence (as implied by the 27 May 2019 email), that was still a conscious act which must have been undertaken surreptitiously so as to facilitate Mr Corry learning of what was happening at his home. In this context it may be recalled, as recorded in the Contempt Judgment at [87], that, during her interactions with Mr Mackenzie at her house on the morning of the execution of the search order, Mrs Corry deliberately asked whether the search party would subsequently be going to NexGen, to which an affirmative answer was given.

  4. Of course, on the findings made in the Contempt Judgment, Mrs Corry’s interaction with her husband alerting him to the fact that the Second Search Order had been issued was rather more direct. It was also a serious contempt.

  5. Mrs Corry’s involvement and contempt was, however, secondary to that of Mr Corry by a considerable distance. Although she was employed in the NexGen business, her role was not that of a principal and there was no suggestion that she had any previous professional association with the Applicants or even knew of her husband’s retention of documents following the making of the Consent Orders.

  6. Her actions, which I have found involved a communication to her husband in defiance of the Prohibited Conduct Order, occurred at a time when she was plainly somewhat distraught and may be viewed as something of an act of desperation, very different in character to what I have held was the deliberate conduct of Mr Corry in defying the Consent Orders and also in causing the password to the Dynamics Account to be altered.

  7. She has clearly been affected by the litigation which had previously been initiated by the Applicants, Mr Mackenzie recording, as noted at [83] of the Contempt Judgment, that Mrs Corry had become tearful and upset, saying “[w]e have lost everything, our home, our cars, he will never stop until he takes everything”.

  8. I am also acutely conscious of the fact that, as a consequence of my proposed penalty in respect of Mr Corry, Mrs Corry and her two children will be deprived of Mr Corry’s ability to provide for them during his incarceration and that Mrs Corry will have sole responsibility for her children during that period. That will itself work a considerable hardship on her, as will the disgrace it necessarily brings to Mr Corry and his family. There is also evidence that the children are both young and that one has had serious medical issues. So too, costs orders will be made against Mr and Mrs Corry in relation to the contempt proceedings. Whilst not operating as a fine, they will effect a very severe burden on Mr and Mrs Corry.

  1. Insofar as Mrs Corry places reliance on a reference from a former employee of Medicina, it carries little weight. In essence it is no more than a statement by a friend of the existence of their friendship and the friend’s opinion as to Mrs Corry’s kindness and trustworthiness.

  2. Mrs Corry has already been the subject of a declaration of contempt in the Contempt Judgment, a matter that is and will remain on the public record.

  3. In all of the circumstances, I propose to impose a fine of $15,000 on Mrs Corry, but suspend that fine on condition that she furnishes to the Registrar of the Equity Division, within 18 months of the stay of these orders (to be made pursuant to Order 8) being lifted, proof that she has performed 25 hours of community service for a school, church or other registered charitable organisation.

Costs

  1. In separate written submissions filed prior to the penalty hearing, the Applicants submitted that Mr and Mrs Corry should be ordered to pay their costs of the proceedings on an indemnity basis and that those costs should be payable forthwith. As will be obvious, I did not consider that an order that costs be payable forthwith was appropriate or necessary.

  2. Mr and Mrs Corry contended that there was no basis for ordering costs on the indemnity basis and submitted that “the appropriate order is for costs to be paid as agreed or assessed at the conclusion of the penalty hearing, and insofar as they apply to each respondent.” That is the order I propose to make.

  3. Whilst I have made findings of contempt against Mr and Mrs Corry, I do not consider that there was anything particular about the conduct of their respective defences that should attract the exceptional sanction of an award of indemnity costs. The conduct of their respective defences is not to be conflated with their conduct the subject of the contempt charges. Many of the matters relied upon by the Applicants went to the latter rather than the former consideration.

  4. To the extent that the proceedings may have taken longer than they otherwise would have by reason of the conduct of their defences, it is to be remembered that Mr Corry represented both himself and, with the leave of the Court, his wife in a complex case conducted against him by an experienced senior counsel and a very able senior junior. Although Mr Corry is legally qualified, I do not understand that he has ever worked as a lawyer, let alone a litigator. Whilst many of the points taken by him were ultimately without merit, they were not unreasonably taken in proceedings of the kind that were before the Court.

  5. As to the submission that the Applicants must be regarded “at least in part as acting in the public interest and should not be out of pocket for commencing the contempt proceedings and seeing them through”, as the phrase “at least in part” reveals, there was about this litigation a strong personal dimension, reflecting a bitter falling out between Mr Bova and Mr Corry, who had once been the closest of friends and business associates. Whilst there was nothing improper about the commencement of the proceedings against Mr Corry and his wife, the proceedings could not be classed as having been brought purely in the public interest. The Applicants were sophisticated, and I have no doubt that they did not undertake the prosecution of the contempt charges on an assumption that they would necessarily be left whole, in financial terms, by the award of indemnity costs. Indeed, as referred to earlier in these reasons, they were aware of the financial position of Mr and Mrs Corry prior to embarking on the Contempt Motion and therefore must have known that they may not recover their costs even if they were awarded on the ordinary basis.

  6. I make it clear that the costs orders to be made against Mr and Mrs Corry relate to the separate charges against each of them. That is to say, they are not to be treated as jointly and severally liable for the Applicants’ costs. There will need to be a separation of the costs of the proceedings insofar as they related to Mr Ghaly (see NHB Enterprises Pty Ltd v Ghaly [2022] NSWSC 96) and I do not think that it is reasonable that Mrs Corry should be liable for the costs of the proceedings brought against her husband. It will be open to the parties to seek to agree costs, if they are able to do so, or to have them assessed in due course.

Stay of orders

  1. Prior to the hearing of submissions on penalty, a Notice of Intention to Appeal from the Contempt Judgment had been filed.

  2. In the course of argument, Mr Corry indicated that, if a penalty were imposed against him and/or Mrs Corry, a stay of orders would be sought pending the hearing of the appeal. Mr Senior, for the Applicants, did not oppose the grant of a stay. Accordingly, the order for Mr Corry’s imprisonment for three months will be stayed pending the resolution of his appeal on the condition that that appeal is prosecuted with expedition. Appeals in the Court of Appeal are generally given a hearing date at the first or second callover and the parties should be in a position to take an early date for the hearing of any appeal at the first callover.

  3. There is, however, no basis for a stay of the costs orders, although it may be that the parties will defer the assessment process, if costs are not otherwise able to be agreed, until the conclusion of the foreshadowed appeal.

Conclusion

  1. For the foregoing reasons, I make the following orders:

  1. Order that the First Respondent, Alexander Stephen Corry, be sentenced, on the first charge against him, to a term of imprisonment of three months commencing from the date of his arrest.

  2. Order that the First Respondent, Alexander Stephen Corry, be sentenced, on the second charge against him, to a term of imprisonment of three months to be served concurrently with the sentence imposed for the first charge.

  3. Order that the First Respondent, Alexander Stephen Corry, be sentenced, on the fourth charge against him, to a term of imprisonment of two months to be served concurrently with the sentence imposed for the first charge.

  4. Order that a warrant for the committal of the First Respondent, Alexander Stephen Corry, to prison for the said term of three months be issued.

  5. Order that the warrant for the committal of the First Respondent, Alexander Stephen Corry, to prison be executed forthwith.

  6. Order that the Second Respondent, Boriana Corry, pay a fine of $15,000.

  7. Order that Order 6 is to be suspended on the condition that the Second Respondent, Boriana Corry, furnishes to the Registrar of the Equity Division, within 18 months of the stay of this Order (made pursuant to Order 8) being lifted, proof that she has performed 25 hours of community service for a school, church or other registered charitable organisation.

  8. Order that the execution of Orders 4, 5 and 6 be stayed pending the determination of the First and Second Respondents’ foreshadowed appeal against the declarations that each of them was in contempt of this Court.

  9. The First Respondent is to pay the Applicants’ costs of the proceedings in respect of the charges against him.

  10. The Second Respondent is to pay the Applicants’ costs of the proceedings in respect of the charges against her.

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Decision last updated: 11 February 2022

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Cases Citing This Decision

17

Corry v NHB Enterprises Pty Ltd [2023] NSWCA 162
Corry v NHB Enterprises Pty Limited [2022] NSWCA 280
Harvey v Henderson (No 4) [2025] NSWSC 1203
Cases Cited

22

Statutory Material Cited

2

Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd [1986] HCA 46
Hearne v Street [2008] HCA 36
Hearne v Street [2008] HCA 36