Gazal by his tutor Samadi v Deputy Commissioner of Taxation (No 2)

1. [1]

   On 8 April 2026, the primary judge, Black J, made orders committing the applicant to a correctional facility until he purges his contempt of court. His Honour suspended the order for committal for a period of 21 days. On 30 April 2026, the applicant was taken into custody.

2. [2]

   By notice of motion filed 14 May 2026, the applicant seeks a stay of the primary judge’s orders pending the hearing and determination of his appeal, which was filed on 4 May 2026.

Background to the notice of motion

1. [3]

   The respondent’s application for the applicant to be dealt with for contempt has an involved history. For present purposes, it is sufficient to summarise the background by reference to the judgment under appeal: Deputy Commissioner of Taxation v Westmeat Development Pty Ltd [2026] NSWSC 320 (penalty judgment).

2. [4]

   The applicant was the sole director of three companies, Belfield Development Pty Ltd (Belfield), NNG Holdings Pty Ltd (NNG) and NG Sydney Corporation Pty Ltd (NG Sydney). He was also the sole shareholder of NNG and NG Sydney, and NNG was the sole shareholder of Belfield. The evidence established that the applicant controlled each of the company's bank accounts: at [2].

3. [5]

   On 24 December 2020, the Supreme Court made a freezing order which applied, inter alia, to Belfield, NNG and the applicant, restraining each from taking any steps to pay, transfer, dispose of, or diminish their assets as set out in the order including, but not limited to, the Belfield bank account and the NNG bank account. On 26 March 2021, the Court made a further freezing order which relevantly extended the restraints in the first freezing order to NG Sydney. The freezing orders were subject to several exceptions. The applicant relied on one of these exceptions (the ordinary course of business exception) to withdraw a substantial amount of money from the bank accounts of the three companies: at [3].

4. [6]

   By amended notice of motion and amended statement of charge dated 1 May 2025, the respondent sought orders that the applicant was guilty of contempt of court: at [1]. In a judgment delivered on 24 June 2025, the primary judge concluded that the respondent had established the large part of the charge: Deputy Commissioner of Taxation v Westmeat Development Pty Ltd [2025] NSWSC 655 (liability judgment). In summary, his Honour was satisfied that the applicant was aware of the freezing orders and was therefore under a duty to take reasonable steps to ensure that the undertaking was obeyed by each of the companies. His Honour found that the applicant deliberately failed to take those steps and actively took steps to cause each of the companies to make numerous payments in substantial amounts in breach of the freezing orders. The large majority of the invoices supporting withdrawals from the accounts that were the subject of the freezing orders were false.

5. [7]

   On 11 July 2025, his Honour made the following orders to give effect to the findings in the liability judgment:

6. [8]

   His Honour noted in the penalty judgment that following the making of the above orders, he made further orders directed to bringing the penalty stage of the contempt proceedings to a hearing. According to his Honour’s reasons (at [6]), the applicant sought to defer that stage of proceedings, which his Honour addressed in several judgments, including Deputy Commissioner of Taxation v Westmeat Development Pty Ltd as trustee for Westmeat Development Trust [2025] NSWSC 1571 (October 2025 judgment). His Honour dealt in that judgment with an application by the applicant to defer the hearing of the penalty stage and vacate the hearing date in light of an alleged lack of capacity on his part, and in circumstances where the applicant had filed a notice of appeal in relation to the liability judgment. As summarised in the penalty judgment, his Honour concluded in the October 2025 judgment that “Mr Gazal had not established any lack of capacity that would prevent him, or a tutor he had appointed, defending the balance of the contempt proceedings”: at [6]. Nonetheless, his Honour stayed the penalty hearing for a short time to permit the issues to be determined in the Court of Appeal.

7. [9]

   The applicant required an extension of time to appeal (or seek leave to appeal) from the liability judgment. The substantive issue raised in the appeal proceedings was whether the primary judge erred in determining the applicant’s guilt without first conducting a hearing regarding his fitness to plead. On 27 February 2026, after a hearing on 18 February 2026, the Court of Appeal dismissed the application for the extension of time: Gazal by his tutor Samadi v Deputy Commissioner of Taxation [2026] NSWCA 16. As the primary judge noted in the penalty judgment, the Court left open the possibility that the applicant could bring a further application seeking to establish a lack of capacity. He did not subsequently do so: at [6].

8. [10]

   On 9 February 2026, in advance of the Court of Appeal hearing, the primary judge listed the hearing on penalty for 31 March 2026. In the penalty judgment, his Honour noted that he also extended the time for the applicant to file and serve all further evidence and submissions on which he relied as to penalty: at [7]. The applicant did not file any evidence or make submissions as to penalty. On 12 February 2026, the solicitors then acting for him in the Supreme Court proceedings filed a notice of ceasing to act, although they continued to act for him in the Court of Appeal proceedings: at [7].

9. [11]

   On 30 March 2026, the applicant’s wife and his then tutor, Rabiaa Samadi, sent an email to the Court. His Honour set out the body of the email in [8] of the penalty judgment:

10. [12]

    On 31 March 2026 (the day of the penalty hearing), the applicant’s wife sent a further email to the Court, the body of which his Honour set out in [9] of the penalty judgment:

11. [13]

    The affidavit of Christopher John Ford, the solicitor currently on the record for the applicant, sworn 14 May 2026, includes a discharge summary referral from St Vincent’s Hospital (Annexure D), which recorded that on 31 March 2026, the applicant was admitted to hospital in a hypoglycaemic coma. The referral noted that the applicant’s blood glucose level stabilised during the admission, there was no further hypoglycaemia episode for 24 hours, and he was discharged on 2 April 2026.

12. [14]

    The primary judge noted in the penalty judgment (at [10]) that in response to her email of 31 March 2026, Ms Samadi was advised that the Court would deal with any application to adjourn when the matter was listed. No such application was brought by the applicant or was made on his behalf, and the hearing proceeded on that date.

13. [15]

    In determining the appropriate penalty, his Honour relied on r 13 in Pt 55 of the Supreme Court Rules 1970 (NSW), which allows for the punishment of contempt by committal to a correctional centre, or a fine, or both (where, as here, the contemnor is not a corporation): at [13]. His Honour accepted that the contempt in question was of the most serious kind: at [23]. Having regard to the relevant principles in respect of penalties for civil contempt, his Honour also accepted the respondent’s submission that the penalty was to serve a remedial and coercive purpose, not a punitive one: at [28]. Relevantly, his Honour found that there was “no reason to think that Mr Gazal would be incapable of repaying the funds that he had personally received, in a substantial amount, so as to purge or mitigate his contempt”: at [30]. That finding was made on the basis that the applicant had provided no evidence to explain where the funds had gone, although he had “repeatedly asserted impecuniosity”: at [30].

14. [16]

    His Honour stated at [31]:

15. [17]

    His Honour’s orders as to penalty relevantly included the following (at [35]):

16. [18]

    Mr Ford filed a notice of appearance in the proceedings on 28 April 2026, a day before the expiry of the stay. I was informed by Mr Ford that on the same day, a notice of motion was filed seeking to extend the stay. The return date given for the notice of motion was after the applicant had been taken into custody. The notice of motion was not pressed.

17. [19]

    On 2 May 2026, the applicant suffered a further medical episode which resulted in him being taken to Westmead Hospital. Mr Ford deposed that the applicant was initially in the Intensive Care Unit for two days, before being transferred to the Diabetes Ward. The hospital records annexed to Mr Ford’s affidavit for this admission (Annexure F) indicated that the treatment aim was to discharge the applicant to the prison medical facility, “next Monday”, being 11 May 2026. The records also noted that on discharge, the applicant would need a referral to Long Bay Jail. The applicant was discharged to the Long Bay Correctional Complex and he remains in the hospital located at that complex.

18. [20]

    I was informed by Mr Ford that Ms Samadi has again accepted appointment as the applicant’s tutor. On 4 May 2026, the applicant, by his tutor, filed a notice of appeal from the whole of the penalty judgment.

The applicant’s notice of motion

1. [21]

   As I noted above, the present application was filed on 14 May 2026. The primary relief that the applicant sought was a stay and, as a consequence of the stay, his immediate release from custody.

2. [22]

   It was common ground that the principles to be applied in considering the application for a stay were outlined in Alexander v Cambridge Credit Corporation Ltd (Receivers Appointed) (1985) 2 NSWLR 685 (“Alexander”) at 694-695. Payne JA recently summarised the applicable principles in Michael Hill Jeweller (Australia) Pty Ltd v Gispac Pty Ltd [2024] NSWCA 128 (“Michael Hill”) at [5]:

3. [23]

   In relation to the first of the matters to which Payne JA referred in Michael Hill, the Court is not required to conduct a detailed assessment of the grounds of appeal for the purposes of granting a stay, but it does need to be satisfied that one or more serious questions are raised by the appeal: Nyangbul v State of New South Wales [2025] NSWCA 119 at [20]. The applicant accepted, in submissions, that the mere filing of an appeal did not demonstrate an arguable case.

4. [24]

   The notice of appeal contains the following grounds:

5. [25]

   The applicant submitted that the focus of the appeal is the primary judge’s failure to take into account a material consideration, being the state of the applicant’s physical and mental health, which resulted in a penalty that was unreasonable or unjust.

6. [26]

   In the hearing before me, Mr Ford agreed with the respondent’s submission that the applicable standard of review of his Honour’s determination as to penalty was that set out in House v The King (1936) 55 CLR 499; [1936] HCA 40: see Matthews v Australian Securities and Investments Commission [2009] NSWCA 155 (“Matthews”) at [181]. A difficulty that thus confronts the applicant in regard to his grounds of appeal is that the primary judge did not have any evidence before him in the penalty hearing regarding the applicant’s subjective circumstances, including as to any physical or psychological impairments. The applicant nonetheless submitted that the facts in Mr Ford’s affidavit disclosed a strongly arguable case in circumstances where, due to his lack of legal representation and health status at the time of the penalty hearing, he did not have an opportunity to place any material before the Court, and the Court did not consider alternatives to full time imprisonment.

7. [27]

   The discharge summary from St Vincent’s Hospital that is annexed to Mr Ford’s affidavit supports the fact of the applicant’s hospitalisation on the date of the hearing. However, the submission that he had no opportunity to place material as to penalty before the Court will need to confront the directions that were made by his Honour, on 9 February 2026, which extended the time for the applicant to provide evidence and submissions on penalty (noting that the hearing on penalty was to proceed on 24 October 2025 before it was adjourned). The applicant thus had an opportunity, in advance of the penalty hearing, to put on evidence, including as to the state of his health, in circumstances where, according to the primary judge in the October 2025 judgment (at [11]), the respondent’s position had always been that the applicant’s contempt should have custodial consequences.

8. [28]

   In those circumstances, I do not accept the applicant’s submission that he has a strongly arguable case on appeal. For the purposes of the present application, I am prepared to assume that they are arguable.

9. [29]

   Turning then to the second of the matters to which Payne JA referred in Michael Hill, being the risk of harm or prejudice to the applicant if a stay is not granted, the applicant submitted that the appeal would prove futile if he were successful on the appeal while having remained in prison. In the reply submissions dated 29 May 2026, the applicant submitted that the available evidence indicated that the applicant remains in hospital. A stay, if granted, would preserve the position pending appeal and reduce the likelihood of further irreversible prejudice while the Court considers the appeal.

10. [30]

    By his Honour’s penalty judgment, the primary judge committed the applicant to custody for an indefinite period, for the purpose of his purging the very serious contempt that his Honour found him to have committed (which finding is not challenged). The continuation of those circumstances while an appeal is heard and determined would not render the appeal futile, assuming for present purposes that it were to succeed. It is significant in this context that the continuation of the applicant’s custody is within his control, given the purpose for which he has been committed. I have set out at [16] above what the primary judge said in this regard at [31] of the penalty judgment. Senior counsel for the respondent submitted that purging the contempt might not entail repaying the whole sum, and that it might involve, for example, paying whatever sum remains within the applicant’s control, or providing a full explanation so as to demonstrate that he no longer has control of any of the sums withdrawn from the various accounts.

11. [31]

    It is the case that the applicant is under detention, and there is some evidence that he is experiencing ongoing medical issues. However, there is insufficient evidence currently available for me to assess the level of risk associated with the applicant’s continuing detention. The insufficiency of the evidence was a matter that the applicant relied upon in the reply submissions, but it does not assist him on the present application. I have set out the evidence of his two hospital admissions in [13] and [19] above. As senior counsel for the respondent submitted, the applicant’s discharge from Westmead Hospital grounds the reasonable inference that his treating doctors were satisfied that his condition was sufficiently stable that it could be managed at Long Bay Hospital.

12. [32]

    It follows from the above that there is some prejudice to the applicant in his continuing incarceration pending his appeal, but the evidence does not support his submission that it is of a nature that would render the appeal futile if a stay is not granted. Other matters that are relevant to the exercise of the discretion must also be considered, including the balance of convenience and the competing rights of the parties: Alexander at 694.

13. [33]

    Senior counsel for the respondent submitted that there is a continuing public interest in the purpose for which the applicant has been committed to custody. The applicant engaged in serious conduct which concerns the public interest in the administration of justice, and it is the public interest that the orders protect: Kazal v Thunder Studios Inc (California) [2017] FCA 238 (“Kazal”) at [75]. In Kazal (at [76]-[77]), which concerned a criminal contempt, Katzmann J referred to Wooldridge v Australian Securities and Investments Commission [2015] FCA 349; 106 ACSR 551, which concerned an application for a stay of disqualification orders. Middleton J there stated (at [16]) that the Court should not give the impression that disqualification orders are provisional until confirmed on appeal, “lest the public purpose of making such orders in the first place be undermined”. Her Honour considered those observations to be applicable when considering a stay of committal to custody for criminal contempt, and they are also applicable in considering a stay of the orders the primary judge made in the present case, having found a civil contempt.

14. [34]

    Relatedly, the procedural history of the present case weighs against the grant of a stay. It is apparent from a review of the decisions of the primary judge and the Court of Appeal that the applicant’s conduct of the proceedings involved numerous delays. A number of applications were made at late notice, including for the admission of evidence that the respondent was given no opportunity to consider or respond to (see the October 2025 judgment, at [34]). The circumstances of the applicant’s committal to custody provide another example. As I noted above, the primary judge’s orders were made on 8 April 2026 and stayed for 21 days, to 29 April 2026. The notice of appearance for Mr Ford was not signed until 27 April 2026, and was filed on 28 April 2026. In making this observation, I am not being critical of Mr Ford, who could only enter an appearance when instructed to do so, but rather to indicate that when given a three-week period to take steps that might have precluded his commitment to custody, no procedural step was taken by the applicant until the third-last day of that period.

15. [35]

    When I raised the possibility of expedition of the appeal at the hearing, Mr Ford submitted that expedition would be sought, and senior counsel for the respondent accepted that the respondent could not be heard against expedition. However, it is not presently clear when the applicant would be ready for a hearing. Mr Ford submitted that the applicant would be seeking to put on additional evidence as to the applicant’s current mental and physical state, and that this process was underway but at an early stage. (I note in passing that consideration would need to be given in this context to subss (7) to (9) of s 75A of the Supreme Court Act 1970 (NSW).) Mr Ford referred to a psychiatrist having been engaged, who was yet to assess the applicant. In relation to other health conditions, Mr Ford submitted that the applicant’s custodial status has precluded appointments for his examination and the preparation of associated reports. I am prepared to accept that custody does present practical difficulties in this regard, although the applicant’s current status would not preclude obtaining evidence from such doctors as treated him before he was taken into custody, on 30 April 2026.

16. [36]

    The history of the applicant’s conduct of the proceedings tells against a stay of the order for committal without any clear indication of what evidence will be adduced and when the matter will be ready for hearing. Relatedly, I am mindful that there is an inevitable impact on the applicant if he is released from custody pursuant to a stay, with the prospect of being returned to custody in the event that his appeal is not successful.

17. [37]

    Accepting for present purposes that the grounds of appeal are arguable, and that the applicant’s current detention and health are the cause of some prejudice to him, I am not satisfied that the appeal will be rendered futile if a stay is not granted, and the balance of convenience ultimately weighs against the grant of a stay. That said, the matter is an appropriate one for expedition. The matter is next listed before the Registrar on 10 June 2026, on which occasion directions can be made to facilitate that purpose.

18. [38]

    I note that towards the conclusion of the hearing, Mr Ford floated the possibility of my granting the applicant bail pending the appeal, on conditions including that he be confined to his residence and subject to electronic monitoring. That specific order and accompanying conditions was not referred to in the notice of motion. In so far as that submission was effectively an application for bail under the Bail Act 2013 (NSW), the respondent submitted that the Act does not apply to proceedings involving a civil contempt. There is judicial support for that submission. In Matthews at [188], Basten JA observed, without needing to decide, that the Bail Act 1978 (NSW) did not in terms apply to a committal for civil contempt. His Honour also stated that the abolition of common law powers to grant bail in s 62 of that Act (which is continued by cl 11 of Sch 3 of the Bail Act 2013) did not operate in respect of a committal for civil contempt, because the section expressly referred to the power to grant bail “to an accused person in or in connection with criminal proceedings”. Further, the Act did not affect a power to grant bail in relation to criminal proceedings for contempt, with s 64(1) (cf s 90(1) of the Bail Act 2013) providing that nothing in the Act “affects any power or duty that a court, tribunal or person has to grant bail, or to grant relief in the nature of bail, in connection with any contempt or alleged contempt”.

19. [39]

    Referring to these observations in Kazal, Katzmann J concluded that the better view was that the Bail Act did not apply: at [52]. Her Honour agreed in this respect with the decision of Rares J in Vu v New South Wales Police Service [2007] FCA 1192, in which his Honour, without referring to the Bail Act, considered that the matter was governed by the Court’s power to stay the operation of a sentence. A number of cases involving criminal contempt, such as Kazal (at [39]), have referred to the link between bail and a stay pending appeal. As Basten JA noted in Matthews, in cases involving criminal contempt, without a stay, the sentence of imprisonment would continue to run, giving rise to difficulties of jurisdiction in terms of substituting a fresh order of commitment for a sentence which expired before the appeal was determined: Parker v Director of Public Prosecutions (1992) 28 NSWLR 282 at 298-299. In Matthews, however, Basten JA observed at [191] that the same issue does not arise in the context of proceedings for a civil contempt. It may also not be determinative in the present case, as the period of commitment is indefinite and subject to the applicant purging his contempt.

20. [40]

    It is unnecessary for present purposes to reach a concluded view on these issues. Given the generality at which the submission was put, and the stage of the hearing at which it was made, it is sufficient for present purposes to proceed on the assumption that I would have the power to grant bail without granting a stay. Having regard to the prospects of the appeal, and the other matters to which I have referred above, I would not be minded to make a grant of bail pending the appeal.

Conclusion

1. [41]

   The notice of motion will be dismissed. The respondent sought its costs of the motion and there is no discernible basis on which the ordinary rule would not apply. Accordingly, I make the following orders:

   1. (1)

      The applicant’s notice of motion filed 14 May 2026 is dismissed with costs.