Re.Group Pty Ltd v Kazal (No 7)

[2019] FCA 387

FEDERAL COURT OF AUSTRALIA

Re.Group Pty Ltd v Kazal (No 7) [2019] FCA 387

File number:

NSD 2080 of 2016

Judge:

PERRAM J

Date of judgment:

22 March 2019

Catchwords:

CONTEMPT OF COURT – imposition of fine – whether counts arose from single episode of offending – where counts did not involve contumacious flouting of Court’s orders

Cases cited:

AGL Energy Limited v Hardy (No 2) [2017] FCA 863

Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25

Clipsal Australia Pty Ltd v ACN 134 468 205 (formerly Clipso Electrical Pty Ltd) (No 5) [2017] FCA 1584

Live Group Pty Ltd v Rabbi Ulman [2018] NSWSC 393

Re.Group Pty Ltd v Kazal (No 4) [2017] FCA 1084

Re.Group Pty Ltd v Kazal (No 5) [2018] FCA 546

Re.Group Pty Ltd v Kazal (No 6) [2019] FCA 168

Sydney Medical Service Co-operative Limited v Lakemba Medical Services Pty Ltd (No 2) [2016] FCA 1188

Wong v The Queen [2001] HCA 64; 207 CLR 584

Date of hearing:

Determined on the papers

Registry:

New South Wales

Division:

General Division

National Practice Area:

Intellectual Property

Sub-area:

Copyright and Industrial Designs

Category:

Catchwords

Number of paragraphs:

7

Solicitor for the Applicants:

Ashurst Australia

Solicitor for the Respondents:

Mitry Lawyers

ORDERS

NSD 2080 of 2016

BETWEEN:

RE.GROUP PTY LTD ACN 166 255 947

First Applicant

NAVEEN DAVID SINGH

Second Applicant

AND:

ADAM KAZAL

First Respondent

CHARIF KAZAL

Second Respondent

TAWFIK ELGAZZAR

Third Respondent

JUDGE:	PERRAM J
DATE OF ORDER:	22 MARCH 2019

THE COURT ORDERS THAT:

1.The Second Respondent pay to the Registrar of the Federal Court of Australia a fine of $25,000 within 28 days of this order.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

PERRAM J:

1. On 25 September 2017 I concluded that the Second Respondent, Mr Charif Kazal, was guilty of civil contempt: Re.Group Pty Ltd v Kazal (No 4) [2017] FCA 1084. On 3 October 2017 I made an order convicting him of three counts of civil contempt. The relevant orders and declarations were as follows:

   THE COURT DECLARES THAT:

   1.The Second Respondent is guilty of civil contempt of the Federal Court of Australia by his conduct in breaching order 6 of the orders made by Griffiths J on 6 December 2016 (‘Orders’), by publishing on the website (‘Website’), after 6 December 2016, the following representations, or representations substantially the same as the following representations:

   a.the Second Applicant is a corporate thief;

   b.the Second Applicant committed crimes by stealing from Charif Kazal and Tony Kazal, being crimes which warranted his imprisonment;

   c.the Second Applicant stole Charif Kazal’s and Tony Kazal’s shares in Global Renewables Limited;

   d.the Second Applicant stole $180 million from Charif Kazal and Tony Kazal;

   e.the Second Applicant stole the company Global Renewables Limited from Charif Kazal and Tony Kazal.

   2.The Second Respondent is guilty of civil contempt of the Federal Court of Australia by his conduct in breaching order 2 of the Orders, by publishing on the Website, after 6 December 2016, the photograph of the Second Applicant which is Annexure “A” to these orders (‘Photograph’) in a manner that infringed copyright in the Photograph, and without the permission or license of the owner of the copyright in the Photograph.

   3.The Second Respondent is guilty of civil contempt of the Federal Court of Australia by his conduct in breaching order 4 of the Orders, by failing to remove the Photograph from the Website within 48 hours of being notified of the terms of the Orders.

   THE COURT ORDERS THAT:

   4.The Second Respondent is convicted of civil contempt in respect of each of the contempts referred to in Declarations 1, 2 and 3 above.

2. The sentencing hearing took place on 16 February 2018.  On 23 April 2018 I concluded that the Court would impose a fine but would delay doing so until such time as Mr Kazal had paid the Applicants’ costs of the contempt proceeding on an indemnity basis.  I ordered that the costs be assessed by a Registrar on a lump sum basis and be assessed forthwith: Re.Group Pty Ltd v Kazal (No 5) [2018] FCA 546 (‘Kazal (No 5)’).  On 16 October 2018 Deputy District Registrar Segal made an order fixing the lump sum costs at $415,000.  On 5 November 2018, however, Mr Kazal filed a review application in respect of that assessment.  That application was determined on the papers.  On 21 February 2019 I determined that the lump sum costs order should remain at $415,000: Re.Group Pty Ltd v Kazal (No 6) [2019] FCA 168. The matter was then stood over to 15 March 2019 to ascertain whether Mr Kazal had paid those costs to the Applicants. At a case management hearing held on 15 March 2019 I was informed that he had done so.

3. It is now necessary to fix the fine foreshadowed in Kazal (No 5).  I dealt with all the relevant penalty issues in that judgment and all that remains is to formulate the fine in light of those matters.  I do so by means of an ‘instinctive synthesis’ of the various matters mentioned in Kazal (No 5): Wong v The Queen [2001] HCA 64; 207 CLR 584 (‘Wong’) at 611 [75] per Gaudron, Gummow and Hayne JJ. It was not suggested that that principle was not applicable in cases of civil contempt. There are decisions where it has been assumed to apply: see, for example, Live Group Pty Ltd v Rabbi Ulman [2018] NSWSC 393 per Sackar J at [33], citing NCR Australia Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118 at [68] per Campbell J, rather than Wong.  The application of Wong is consistent with, or at least analogous to, the position obtaining in relation to civil penalties where it is also established that it applies: Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25 at 36 [44] per Jagot, Yates and Bromwich JJ.

4. My attention was drawn to three comparable penalties for civil contempt.  In Sydney Medical Service Co-operative Limited v Lakemba Medical Services Pty Ltd (No 2) [2016] FCA 1188 a fine of $30,000 was imposed along with an indemnity costs order for a failure to take down material from a website, at premises and on a motor vehicle. In AGL Energy Limited v Hardy (No 2) [2017] FCA 863 the Court imposed a fine of $25,000 for a contumacious failure to comply with a search order. An indemnity costs was subsequently made too. In Clipsal Australia Pty Ltd v ACN 134 468 205 (formerly Clipso Electrical Pty Ltd) (No 5) [2017] FCA 1584 a contumacious contempt was punished by three months’ imprisonment suspended on payment of a $40,000 fine.

5. I propose to fix a single fine in relation to all three counts recognising that they arise from a single episode of offending.  Each count is factually intertwined with the other two and I note the risk of double punishment if that matter is not taken into account.  For the reasons given in Kazal (No 5) (and on the basis there explained) I also take into account that Mr Kazal has paid $415,000 in indemnity costs to the Applicants for their costs of bringing the contempt proceeding against him.

6. In all the circumstances, I have determined that I should impose a total fine of $25,000 in respect of all three counts.  Because Mr Kazal’s conduct involved multiple counts of contempt arising from interrelated offences I pause to ask myself whether that amount is disproportionate overall.  I do not that think it is.  I consider that it adequately captures the wrongdoing involved.  As I explained in Kazal (No 5), on the facts found these charges did not involve a contumacious flouting of the Court’s orders but rather a fairly hopeless failure to give them adequate attention and priority.  Whilst this is not to be commended, neither is it to be rated as an openly defiant contempt.  It extended over but a short period of a few days and resulted from Mr Kazal’s lackadaisical approach to giving his full attention to the orders made against him.

7. The order of the Court will be that Mr Kazal pay to the Registrar of the Federal Court of Australia a fine of $25,000 within 28 days.

I certify that the preceding seven (7) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Perram.

Associate: 

Dated:       22 March 2019