NHB Enterprises Pty Ltd v Corry (No 7)

This is an application brought by NHB Enterprises Pty Ltd (NHB Enterprises) and Finn Pharmaceuticals Pty Ltd (Finn) (together, the Applicants), in which they seek declarations that the First Respondent, Mr Alexander Stephen Corry (Mr Corry), the Second Respondent, Mrs Boriana Corry (Mrs Corry) and the Third Respondent, Mr Rimon Ghaly (Mr Ghaly) (together, the Respondents) are in contempt of Court, and an order that the Respondents be punished for contempt.

This judgment relates solely to the question of whether the Respondents were in contempt. Any question of punishment must necessarily arise at a later stage if the charges are made out. The Applicants, for whom Mr Dawson SC and Mr Senior appeared, accepted that they needed to make out the charges to the criminal standard, that is to say, beyond reasonable doubt. This was notwithstanding the observations of White JA in Eshow v Zaia [2020] NSWCA 10 at [24]-[25] (Eshow) that, in civil proceedings for criminal contempt, s 140 of the Evidence Act 1995 (NSW) meant that only the civil standard of proof needed to be satisfied.

Mr Corry, who at one point indicated from the Bar table that he has a law degree and was admitted to the Supreme Court of New South Wales but does not hold a practising certificate, represented himself in the course of the proceedings. Mr Corry was also given leave to represent Mrs Corry who filed an Affidavit on 6 May 2020 confirming her assent to that course. Mrs Corry was present throughout the hearing.

Mr Ghaly was represented throughout the proceedings by Mr Hyde of counsel.

The alleged contempts arise out of and relate to the alleged failure by Mr Corry and Mr Ghaly to comply with orders made by this Court by consent on 17 April 2018 to deliver up software belonging to the Applicants, together with documents created using in any way the software and not to access or use any and all documents or information owned by the Applicants (April 2018 Orders). The full terms of the April 2018 Orders are set out at [44] below.

The charges of contempt against Mr Corry also include two charges relating to subsequent orders made by the Court in February 2019 (the Second Search Order). This order is described more fully at [57]ff below.

The charge of contempt against Mrs Corry is confined to an alleged breach of an aspect of the Second Search Order made in February 2019.

A copy of the Statement of Charge, filed pursuant to Pt 55 r 7 of the Supreme Court Rules 1970 (NSW), is an appendix to and incorporated into these reasons. The specific charges against Mr Corry are detailed in paras 20-23 of the Statement of Charge; that against Mrs Corry in para 24 of the Statement of Charge; and that against Mr Ghaly in para 25 of the Statement of Charge.

The factual background to the application is as follows.

Bova Compounding Chemist (Bova Chemist) is the trading name of NHB Enterprises. Mr Nicholas Patrick Bova (Mr Bova) is the Managing Director of NHB Enterprises, and a Director of Finn, which is a company related to NHB Enterprises.

Bova Chemist is a veterinary compounding chemist that imports, manufactures, prepares and/or compounds medications for use by Australian veterinary practices and animal owners. Bova Chemist’s client base is mainly limited to Australian veterinarians, with a very small percentage of its revenue based on medications for human consumption.

Mr Bova gave evidence that Bova Chemist is Australia’s largest veterinary compounding business, servicing approximately 70-80% of the veterinarians in Australia and supplying urgent medicines for tens of thousands of animals each year. As at June 2017, Bova Chemist’s annual revenue was approximately $8.5 million. With respect to Bova Chemist’s competitors, Mr Bova gave the following oral evidence (T343.7-10):

Bova Chemist was the first pharmacy in Australia to be granted an Australian Pesticides and Veterinary Medicines Authority (APVMA) Good Manufacturing Practice (GMP) licence to manufacture veterinary chemical products and, as at June 2017, had approximately 55 employees with facilities which included 57 work stations and a highly sophisticated laboratory (the Laboratory) in Caringbah, New South Wales, for the purpose of researching and developing veterinary chemical products and formulations.

Additionally, Bova Chemist has a warehouse in Caringbah that stocks raw materials (the Warehouse). These raw materials are compounded in the Laboratory to create medications. Mr Bova, in his Affidavit sworn 13 June 2017 (which formed part of Ex 9), deposed to the fact that he estimated that, at any given time, Bova Chemist held raw materials with a value of $450,000 in the Warehouse, and that Bova Chemist had in excess of 30,000 formulations which it could create within a matter of hours, if required by a client.

Bova Chemist’s formulations are, and were as at 2017, kept within a computer software database known as the PK Compounding Software (PK Software) which also includes the instructions and methods used to create Bova Chemist’s formulations.

Bova Chemist obtained and has continuously held a licence for PK Software since 2009. Mr Bova gave evidence that he also obtained an additional licence for Mr Corry to use on his Surface Pro computer whilst in Bova Chemist’s employ. As explained below, Mr Corry had left Bova Chemist’s employ in April 2017.

Mr Bova gave evidence that many of the formulations within the PK Software are unique to Bova Chemist and have been created by (a) Bova Chemist’s employees during the course of the employment or (b) third parties engaged by Bova Chemist to develop unique medications: Affidavit of Mr Bova sworn 15 February 2019 at para 9 (First Bova Affidavit), and Affidavit of Mr Bova sworn 20 December 2019 at para 16 (Second Bova Affidavit). Mr Bova gave evidence that one of the formulations stored on the PK Software since at least 2014 was Bova Chemist’s Deslorelin Formulation: Second Bova Affidavit at para 30 (CB654).

Mr Bova also gave evidence that in addition to the formulations, the PK Software contained the following information confidential to Bova Chemist:

In his oral evidence-in-chief, Mr Bova said that the PK Software held all of Bova Chemist’s information, including “every single formula we’ve ever sold, every client, every raw material – it’s the whole business” (T326.38-40) and that, to draw a report from the PK Software of all the products that Bova Chemist had sold would be a “huge IP for anyone who’s trying to set up a business in competition because it tells you exactly what the veterinarians have ordered from us over all the years” (T326.40-43).

Vivaldi is software program that contains a database (the Vivaldi Database). The Vivaldi Database holds documents containing formulations and protocols for preparing medications and standard operating procedures, training manuals and plans in relation to the business of Bova Chemist.

Bova Chemist acquired Vivaldi in 2015. Mr Bova gave evidence that the database was not populated with any pre-loaded formulations when he purchased the software, and that someone needed to enter documents into the database (T333.7-15; T334.18-29). He explained that the database is a document control software in which documents can be opened, edited and saved by an employee (T350.9-20). The software records what changes were made to a document and by whom. The software does not create documents itself. It was accessed by Bova Chemist’s employees regularly, with the documents within the database being amended and updated when necessary.

Mr Bova’s evidence was that many of the documents within the Vivaldi Database contain a unique “SOP” number, which is an acronym for “Standard Operating Procedure”: Second Bova Affidavit at para 21; T319.50-T320.1.

In cross-examination by Mr Corry, Mr Bova explained the process of generating a document from the Vivaldi Database, explaining that the user types in a password to enter into the software and can search for documents or go to a particular document. The documents are listed by SOPs, policies and procedures. Selecting a document stored in the Vivaldi Database opens the document in Microsoft Word, where the document can be viewed, changed and saved (T332.18-27).

Examples of such operating procedures referred to and tendered in the course of the hearing included the Compounding Process Validation SOP Number: 9.130A; the Method Validation Procedure for Liquids and Solid Dose Forms SOP Number: 9.140B; and the Good Documentation Practices, SOP Number 5.010. Each operating procedure may go through a number of versions as it is modified.

Mr Corry and Mr Bova both studied pharmacy together at Sydney University in 2002, and became very close friends. As recently as 2014, Mr Bova was a groomsman at Mr Corry’s wedding.

Mr Corry was initially employed by Bova Chemist in or about February 2008 as a pharmacist and research development officer. The structure of his employment changed over time, with Mr Corry subsequently providing contracting services through his company, Corry Corporation Pty Ltd (Corry Corporation), to the Second Applicant, Finn.

By 2012, Mr Corry had become the leading pharmacist and Chief Operations Officer at Bova Chemist. According to Mr Bova’s Affidavit of 13 June 2017, Mr Corry was provided with substantial autonomy to operate and oversee the day-to-day operations of Bova Chemist’s pharmaceutical business. Mr Bova said that he placed a great deal of trust in Mr Corry as he was in charge of the manufacturing arm of Bova Chemist. Amongst other things, Mr Corry was required to:

Mr Corry remained in the role of leading pharmacist and research development officer of Bova Chemist up until April 2017.

Mr Bova, who had moved to the United Kingdom in 2016 to establish operations there, gave evidence in his 13 June 2017 Affidavit that at all times between 2008 and 2017, Mr Corry had:

Mr Corry left Bova Chemist’s employ in April 2017.

On 28 January 2016, he became a director and shareholder of Medicina Pty Ltd (Medicina). Medicina was incorporated on 28 January 2016 and, at all material times, maintained a business unit at Unit 135, 7 Hoyle Avenue, Castle Hill, NSW. The directors of Medicina as at June 2017 in addition to Mr Corry were Mr Nishnil Singh (Mr Singh) and Mr Dharmit Goradia (Mr Goradia). Medicina traded under the name NexGen Pharma (NexGen), in competition with the Applicants and Bova Chemist. The names “Medicina” and “NexGen” will be used interchangeably in this judgment.

Mr Corry’s wife, Mrs Corry, also worked in the NexGen business. She was not a party to the 2017 Proceedings, which are described at [36]ff below.

Between about May 2014 and June 2017, Mr Ghaly was employed by NHB Enterprises as a pharmacist and, for a period of about 6 months in 2017, as “pharmacist in charge” (T415.17-37). Whilst employed at Bova Chemist, Mr Ghaly oversaw prescriptions and was responsible for dealings with clients located in Queensland, Western Australia and parts of New South Wales.

Subsequent to his leaving Bova Chemist, Mr Ghaly took up a position with NexGen in 2018 (T404.26). Although he did not receive his first pay cheque from NexGen until January 2018, it emerged under cross-examination that Mr Ghaly was involved with NexGen from as early as June 2017. He ultimately accepted in cross-examination that he supervised various activities and a number of different aspects of the business at NexGen in the course of the second half of 2017, including overseeing processes, taking calls and observing finances (T448-449).

Mr Ghaly also accepted that he was involved in the establishment of the NexGen New Zealand business from as early as February 2017, when he took a trip in February 2017 to New Zealand with Mr Corry, Mr Davidson (see further at [39] and [47] below) and a Mr Malouf for what was identified as a “promoters meeting”. Mr Ghaly accepted, in cross-examination, that the purpose of this meeting was to discuss, inter alia, where NexGen would set up in New Zealand, what site size was needed, and what steps would need to be taken to work out logistics to get medications from Australia to New Zealand (T440.15-T441.42).

On 14 June 2017, the Applicants commenced proceedings in the Supreme Court of New South Wales against Mr Corry, Medicina and Corry Corporation (the 2017 Proceedings).

The Statement of Claim in the 2017 Proceedings which was filed on 11 January 2018 (the proceedings having originally been commenced by Summons) was lengthy and detailed. It made serious allegations of unauthorised and improper use of confidential information, breach of contract, breach of fiduciary duties and breach of statutory obligations under the Corporations Act 2001 (Cth).

On the same day as the 2017 Proceedings were commenced, Kunc J made a search order against Mr Corry, Medicina and Corry Corporation (the First Search Order). The application for the First Search Order was supported, inter alia, by Mr Bova’s affidavit of 13 June 2017 which set out detailed allegations and concerns about conduct by Mr Corry, in particular, in the discharge of his obligations at Bova Chemist.

On 13 October 2017, Mr Ghaly was joined as a Defendant to the 2017 Proceedings as were Mr Brett Davidson (Mr Davidson), B J Davidson Enterprises Pty Ltd, and Messrs Singh and Goradia, trading as the partnership known as “Kurrajong Pharmacy”.

Paragraphs 15-23 of the Statement of Claim in the 2017 Proceedings (in which the business conducted by NHB Enterprises was defined as the “Compounding Business”) were as follows:

In essence, the Statement of Claim alleged that Mr Corry, and Corry Corporation through him, breached various statutory, contractual, fiduciary and equitable obligations, including that of confidence to NHB Enterprises.

On 6 February 2018, the 2017 Proceedings were settled at mediation, the terms of which were set out in a “Terms of Settlement” document prepared and signed at the mediation (the 2017 Terms of Settlement).

On or about 12 April 2018, the parties to the 2017 Proceedings entered into a “Deed of Settlement and Release” (First Settlement Deed) which provided, in cl 3.1, for the filing of consent orders. The First Settlement Deed also provided for the payment by the defendants of a settlement amount of $840,000 to be paid as follows:

On 17 April 2018, the following orders (the April 2018 Orders) were made by Ward CJ in Eq, with the consent of Mr Corry and Mr Ghaly and the other parties to the 2017 Proceedings, in accordance with the 2017 Terms of Settlement and the First Settlement Deed:

On or about 7 May 2018, the solicitors for the Applicants, HWL Ebsworth (HWL) wrote to the then solicitors for Mr Corry and Mr Ghaly in the 2017 Proceedings (Coleman Greig) noting, in substance, that they had not received any documents in accordance with orders 1 and 2 of the April 2018 Orders, as extracted at [44] above, and seeking confirmation by 8 May 2018 that the Defendants in those proceedings (including Messrs Corry and Ghaly) did not have any documents in their possession, custody or control that would fall within orders 1 and 2 of the April 2018 Orders.

On or about 11 May 2018, Coleman Greig sent an email to HWL in which they stated, in substance, that they were instructed by each of the Defendants in the 2017 Proceedings that they each had no documents in their possession, custody or control that would fall within orders 1 and 2 of the April 2018 Orders.

As explained at [39] above, one of the Defendants joined to the 2017 Proceedings was Mr Davidson. Like Mr Corry, Mr Davidson had also been employed by the Applicants, and was employed by them between 2007 and 2015. Mr Davidson was not a pharmacist, but was employed as the National Sales and Marketing Manager. Mr Davidson left the Applicants’ employ in 2015 and, after a brief hiatus working in real estate, was contacted by Mr Corry and commenced working with NexGen in November 2016 as the Director of Sales and Marketing. In Affidavit evidence that was not challenged in cross-examination, Mr Davidson referred to a conversation he had with Mr Corry in November 2016, as follows:

As also noted above, Mr Davidson, as a Defendant in the 2017 Proceedings, became a party to the First Settlement Deed. He left the employment of NexGen in August 2018.

Mr Davidson renewed contact with Mr Bova in late 2018 through a mutual acquaintance. It was either on that or a subsequent occasion that Mr Davidson told Mr Bova of certain matters he had observed and certain things that Mr Corry had said to him whilst in the employ of NexGen.

In an Affidavit sworn on 15 February 2019, Mr Davidson deposed to the fact that he:

Mr Davidson’s Affidavit also contained evidence about a medication described as the Deslorelin/hCG combo (Des/hCG), which was administered to horses prior to the breeding season. Des/hCG had been developed by Bova Chemist, and Mr Davidson’s evidence was that Bova Chemist was the only entity in Australia that sold that medication (T190.38-40).

Mr Davidson deposed to the following conversation with Mr Corry in about June 2018:

Mr Davidson said that Des/hCG was available for purchase by NexGen’s clients by August 2018. That was borne out by a copy of an email he sent on behalf of NexGen on 15 August 2018 to a Ms Jane Anderson, which relevantly stated “Just wanted to flick you a quick email to let you [know] that we are doing the Des/hCG combo this year. We are doing 30mL for $145 +gst.”

Mr Davidson gave the following Affidavit evidence:

Mr Davidson also gave evidence about another medication, Cisapride, that was being sold by NexGen during his time there. He deposed to a number of complaints from clients and relayed the following conversation with Mr Corry:

Relying, amongst other evidence, on Mr Davidson’s Affidavit of 15 February 2019, the Applicants commenced fresh proceedings in the Supreme Court of New South Wales against Mr Corry and Medicina on 18 February 2019 (the 2019 Proceedings). A third defendant, AAA Mechanical & LPG Services Pty Ltd (AAA), was briefly joined as Third Defendant in the circumstances described more fully below.

On the same day that the 2019 Proceedings were commenced, the Court also made the Second Search Order, referred to at [6] above, on an ex parte basis, permitting a search to be carried out at the residential premises of Mr Corry and the business premises of Medicina, including any vehicles under their control on or about those premises, in relation to the following “Listed Things” as contained within Schedule A of the Second Search Order:

The Second Search Order included on its front page under the bold and capitalised heading “PENAL NOTICE” the following statement, also in bold and capitals:

Order 6 of the Second Search Order provided that:

Order 25 of the Second Search Order provided that:

Order 26 of the Second Search Order provided:

Schedule A of the Second Search Order specified a “Search Party” comprising: the Independent Solicitor (Mr Jeremy Mackenzie) of Mills Oakley and his colleague, Ms Stephanie Young (Ms Young); the Applicants’ solicitor, Mr Neil Wallman (Mr Wallman) and his colleague, Ms Vanessa Sarpa; and an Independent Computer Expert, Ms Leanne Balit (Ms Balit) from Klein & Co, together with her colleague, Mr Gary Hunter. Mr Mackenzie and Ms Balit had respectively discharged the role of Independent Solicitor and Independent Computer Expert for the purposes of the First Search Order which had been made and executed as part of the 2017 Proceedings.

On 19 February 2019, the day the Second Search Order was executed, and following a further ex parte application to the Court, the Second Search Order was amended and extended to include a third set of premises, these being the premises of AAA. The Second Search Order was also amended to extend the time period in which the search could occur.

AAA’s premises comprised another industrial unit at the same street address as NexGen’s business premises, being 7 Hoyle Avenue, Castle Hill. AAA was located at Unit 132, whilst NexGen was located at Unit 135. The premises were physically adjacent. The reasons for this second ex parte application are explained more fully at [120] below.

The circumstances in which the Second Search Order was executed are particularly relevant to aspects of the contempt charges against Mr Corry and the entirety of the charge against Mrs Corry.

The Second Search Order was executed on the morning of 19 February 2019. As is customary, both Mr Mackenzie as Independent Solicitor and Ms Balit as Independent Computer Expert provided reports to the Court on the first return date in the 2019 Proceedings, which was 21 February 2019. Both Mr Mackenzie and Ms Balit gave evidence in the contempt proceedings and were cross-examined by Mr Corry.

In addition to Mr Mackenzie and Ms Balit, evidence in relation to the manner in which the Second Search Order was executed and the search implemented was given by Mr Wallman, Mr Bruce Grant (Mr Grant) (a private inquiry agent and former employee of Verifact Pty Ltd) and, to a certain extent, Mr Ghaly. Contemporaneous notes taken by Mr Mackenzie and Ms Young of their attendance at the Corry’s residence were also tendered and became Ex 14 and 15.

Mr and Mrs Corry did not give evidence in the contempt proceedings (although an Affidavit of Mr Corry was read in support of a Notice of Motion which was heard at the beginning of the hearing of the contempt proceedings and which is referred to and dealt with more extensively below).

Although he was cross-examined, the account of the execution of the Second Search Order at the Corry residence given by Mr Mackenzie was largely unchallenged, and the following factual account and my findings, set out below, in relation to what occurred on 19 February 2019 derive largely from Mr Mackenzie’s report to the Court, dated 21 February 2019, supplemented by his contemporaneous notes and those of Ms Young.

The Search Party assembled near the Corry residence, at a nearby public park, at around 8.50am on 19 February 2019. Surveillance had been separately arranged of the Corry residence, as well as NexGen’s business premises in Castle Hill. Mr Grant was in the vicinity of those premises during the morning of 19 February 2019.

In his Independent Solicitor’s Report which was annexed to his Affidavit sworn 7 May 2020, Mr Mackenzie recorded that at approximately 9.04am on 19 February 2019, Ms Young and he arrived at the Corry residence. Mr Mackenzie knocked on the front door and Mrs Corry, who Mr Mackenzie had previously met during the service and execution of the First Search Order, opened the door. Mr Mackenzie introduced himself, and had the following conversation:

Mr Mackenzie explained to Mrs Corry that he was the Independent Solicitor appointed to supervise the search of the premises authorised by the Second Search Order. Mr Mackenzie handed Mrs Corry a folder containing the Bundle for Service (being the Court papers relied upon to secure the search order), and advised her that the Second Search Order and supporting documents were contained in that folder.

Mr Mackenzie asked Mrs Corry if she wished him to explain the Second Search Order to her. Mrs Corry said she was on her way to work and was about to take her daughter to day care.

Mr Mackenzie said that he then outlined the prohibitions on the disclosure of the existence of the proceedings and the contents of the Second Search Order. Mrs Corry then asked if she was listed on the order. Mr Mackenzie confirmed that she was not, and that the order was addressed to Mr Corry and Medicina. Mr Mackenzie also stated that he explained that that was why he had asked if she had responsible control of the premises, to which Mrs Corry replied with the words “Yes, I see”.

Mr Mackenzie then suggested that they go inside to discuss the Second Search Order. Once inside and seated in the living area, Mr Mackenzie handed Mrs Corry his business card, and said words to the following effect:

After a short while, according to Mr Mackenzie’s account, Mrs Corry then raised the issue about her work, and said words to the following effect:

Mr Mackenzie advised Mrs Corry that she could call her work and the candidates for interview, and he noted that she could not disclose the existence of the Second Search Order to anyone except an Australian Legal Practitioner.

At approximately 9.10am, Mrs Corry advised Mr Mackenzie that she would be calling work. Mr Mackenzie said he did not know to whom Mrs Corry spoke but heard her say words to the following effect:

Mr Dawson put to Mr Ghaly that he had spoken to Mrs Corry at about 9.10am on the morning of 19 February 2019, and that she had told him that she was not coming into the office. Mr Ghaly accepted this.

Mr Mackenzie then had a conversation with Mrs Corry in words to the following effect:

At approximately 9.15am, Mrs Corry then called Coleman Greig looking to speak to Mr Kallipolitis. Mr Mackenzie understood that Mrs Corry could not get through to Mr Kallipolitis, but that she was provided the details of another solicitor, Mr Mario Rashid (Mr Rashid). Ms Young’s notes then record a call to “Mario” at 9.15am noting a request for the documents to be provided to him.

At approximately 9.20am, Mr Mackenzie called Mr Wallman (who was not, at that stage, physically with him) and requested that he arrange for his office to send the Bundle for Service to Mr Rashid at Coleman Greig.

At approximately 9.26am, Mr Mackenzie again offered to explain the Second Search Order to Mrs Corry, but she responded with words to the following effect: “No thanks. That’s not necessary. It’s the same as last time”. Mr Mackenzie then outlined that Mrs Corry became upset and tearful and said: “We have lost everything, our home, our cars, he will never stop until he takes everything”. The “he” in this statement was presumably a reference to Mr Bova.

At approximately 9.30am, Mrs Corry and Mr Mackenzie had a conversation in words to the following effect:

Mr Mackenzie’s report of his conversation with Mrs Corry continued, as follows:

Mr Mackenzie’s notes contain an entry for 9.35am in which he records Mrs Corry asking him whether it was possible to cancel interviews “if you watch”, to which Mr Mackenzie replied “Yes, of course. You just can’t disclose the existence of the proceedings or the order”. Mr Mackenzie’s notes also contain an entry for 9.36am recording a call to Mrs Corry from NexGen. The substance of this call as recorded in Mr Mackenzie’s notes was “something personal has come up … can we catch up on Thursday”, this presumably being that part of the telephone conversation he overheard. Mr Mackenzie’s notes do not record to whom Mrs Corry was speaking.

In his report to the Court, Mr Mackenzie said that his conversation with Mrs Corry continued, in words to the following effect:

According to his notes, Mr Mackenzie heard Mrs Corry call “Sally” at about 9.43am, to reschedule an interview to the following Thursday. It may be observed that there is a 5 minute gap in Mr Mackenzie’s notes between 9.38am and 9.43am in the sense that he does not record anything occurring in this time period.

Interposing here, the Applicants pointed in their final written submissions to three telephone calls, the details of which were derived from subpoenaed telephone records which were tendered in evidence, the details of which are set out in the following table:

At approximately 9.45am, according to Mr Mackenzie’s report to the Court, Mrs Corry said that she needed to bring her daughter downstairs so that she could be supervised. Mrs Corry showed Mr Mackenzie and Ms Young that she was leaving her phone on the kitchen bench. Mrs Corry subsequently returned downstairs with her daughter. Mr Mackenzie’s report says that this occurred “shortly thereafter” but did not specify the time period Mrs Corry was upstairs. Ms Young’s notes recorded that Mrs Corry came downstairs with her daughter at 9.45am, implying that Mrs Corry had gone upstairs earlier than Mr Mackenzie’s notes recorded.

It is highly likely that the 180-second telephone call shown in the table set out above took place whilst Mrs Corry was upstairs with her daughter, and that Mr Mackenzie’s statement of the time that Mrs Corry went upstairs which was qualified by the word “approximately” may not have been precisely accurate. As Mr Dawson observed, “[t]he curious thing about it is that Mr Mackenzie's evidence is that Mrs Corry's mobile phone was left on the counter, so that she presumably, one infers, is giving them comfort that she's not taking the phone out of the kitchen to breach the prohibited contact order or what we've called the prohibited contact warnings which she was given repeatedly by Mr Mackenzie” (T565.38). I accept Mr Dawson’s further submission that the telephone records “fit perfectly into that gap” when Mrs Corry was upstairs, with the inference being that she managed to take Mr Corry’s call on some other device (T574). This also strongly suggests that the 9.36am telephone call to Mrs Corry referred to at [86] was probably the first of the calls referred to in the table at [89]. I also find that it was in the course of the 180-second call that Mrs Corry communicated to Mr Corry the fact of the issue of the Second Search Order, and that it extended to NexGen’s premises. There is clear evidence that Mrs Corry was the source of Mr Corry’s first knowledge of the Second Search Order (see [104]-[110] below).

Interpolating there, Mr Ghaly gave evidence of a phone call he received from Mr Corry on 19 February 2019 which, under cross-examination, he accepted took place at about 9.45am (T517.23). Mr Ghaly’s account of this conversation as set out in his Affidavit sworn 19 September 2019 was as follows:

When under cross-examination, Mr Ghaly sought to correct this account by adding the word “doesn’t” before “looks like it belongs to” in the statement attributed to Mr Corry (T520; T533). At the time of the conversation set out at [92] above, Mr Ghaly was at NexGen’s business premises at Unit 135, 7 Hoyle Avenue, Castle Hill.

Telephone records recorded that Mr Corry spoke to or left messages for Mr Ghaly six times between 9.45am and 9.57am on the morning of 19 February 2019 as the following table set out by the Applicants in final submissions demonstrates:

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.

At approximately 9.44am, Mr Grant from Verifact was conducting surveillance of NexGen’s commercial premises in Castle Hill from inside his vehicle in a nearby public carpark: T102.49-T103.3. He gave evidence, confirmed by video footage that was played in Court and tendered, that he observed a male worker in his late 30s with a shaved head and wearing a blue nurse style uniform frantically walking from unit 135 (the premises of NexGen) carrying what Mr Grant described as appearing to be “a full back pack whilst conversing on his mobile phone”. Mr Grant observed the male walk into the nearby factory unit (unit no 132) and quickly left the bag just to the left of the counter, before jogging back to unit 135.

Unit 132 was the premises of AAA (see [64] above). Mr Grant observed the same man walking out of unit 135 again, carrying a computer monitor and placing it at unit 132, and thereafter jogging back to unit 135. Video footage was played in Court consistent with Mr Grant’s observations. The bald headed man observed by Mr Grant was Mr Ghaly.

In a written report of his surveillance dated 21 February 2019, Mr Grant made the following observations in relation to his surveillance of the commercial premises in Castle Hill between 9.47am until 1.00pm:

Pausing there, this detailed contemporaneous account of Mr Ghaly’s actions was inconsistent with the attempted correction to his Affidavit evidence that has been noted at [93] above, as well as his attribution to Mr Corry of the statement “You need to get all your personal stuff and move it offsite”. What was removed included the HP Pavilion computer used by Mr Corry and which had the PK Software on it, Mr Ghaly’s two laptops on which he did his work for NexGen, and various Bova documents.

What was undoubtedly occurring in this period, as confirmed by later seizure and inspection of the materials removed to AAA’s premises in unit 132, was the urgent removal of NexGen’s computers and business records from its business premises, at Mr Corry’s direction. Under cross-examination, Mr Ghaly gave the implausible, self-serving and (I find) false explanation that he was running between premises (as shown on the video surveillance footage) because he “just wanted to get back into work because a pharmacist needs to be on the premises at all times” (T522.12-13). In my opinion, his urgency was because of the need he understood from Mr Corry to remove material from the NexGen premises as quickly as possible, and before any search party arrived.

Mr Ghaly’s account also does not explain why various documents were dumped into rubbish bins outside the premises, as shown on the video surveillance. This seems to be inconsistent with his denial in his Affidavit evidence and in his answers to cross-examination by Mr Corry that he knew that another search order had been issued which extended to NexGen’s premises.

Returning to the evidence of Mr Mackenzie dealing with the execution of the Second Search Order at the Corry’s residential premises, at approximately 10.00am whilst in Mr Mackenzie’s presence, Mrs Corry received a telephone call from Mr Corry, and asked Mr Mackenzie if she could answer. Mr Mackenzie advised that she could, but again noted the prohibitions contained in the Second Search Order. Mr Mackenzie gave evidence that he did not hear what Mr Corry was saying, however, he did hear Mrs Corry saying words to the following effect during that call:

At approximately 10.03am, Mrs Corry received a call, and told Mr Mackenzie that it was from her lawyers. She picked up the call and said “Hi Chris, how are you”. She continued on the call and asked that Mr Mackenzie speak to him directly, and handed Mr Mackenzie the phone, which she put on speaker.

When Mr Mackenzie received the phone, he noticed on the screen that the contact name in respect of the current caller said “Alex”. However, the person who Mr Mackenzie was speaking to identified himself as Mr Christopher Athanassios (Mr Athanassios) from Miller & Prince Lawyers. Mr Mackenzie and Mr Athanassios had a conversation in words to the following effect:

In final submissions, Mr Dawson placed emphasis upon the fact that Mr Athanassios’s first question to Mr Mackenzie – “[w]hen will you be commencing the search?” – revealed that he knew about the Second Search Order at the time, and submitted that the only person who could have told him about it was Mr Corry, and that the only person who could have told Mr Corry was Mrs Corry.

This was supported by the evidence-in-chief of Mr Athanassios who indicated that he first became aware of the Second Search Order within the two-hour window before the search started (T55.26-29), and accepted that it was Mr Corry who talked to him about the Second Search Order on the morning of 19 February 2019 (T55.41-43).

Mr Mackenzie was cross-examined by Mr Corry in relation to the last statement attributed to Mr Corry in Mr Mackenzie’s account of the conversation set out at [104] above. Mr Corry asked Mr Mackenzie whether it was possible that the words that were actually said were “I called my wife. I’m on my way home now. I’ll be there soon.” (T161.41-42). Mr Mackenzie said “I don’t believe so”, and when pressed by Mr Corry as to whether or not it was possible, said:

The handwritten notes referred to were called for and subsequently produced whilst Mr Mackenzie was still under cross-examination. Ms Young’s handwritten notes make reference to the three-way conversation between Messrs Mackenzie, Athanassios and Corry taking place at 10.10am as follows:

The difference between Mr Mackenzie’s evidence that Mr Corry said “My wife told me” in answer to the question how he found out about the Second Search Order and Ms Young’s note “I just called my wife” was one which Mr Corry, in final submissions, attempted to place great store on. The difference between the two accounts eluded me and, for reasons explained later in this judgment, I see no difference in substance between the two accounts. What may be remarked, however, is that both accounts are consistent with Mrs Corry not having herself initiated the telephone call. This is consistent with the telephone records extracted at [89] above. Both accounts also confirm that a telephone call between Mr Corry and his wife must have taken place whilst Mrs Corry was upstairs in her home just before 9.45am, and outside of earshot of Mr Mackenzie and Ms Young.

Some further corroboration of the fact that Mrs Corry was the source of Mr Corry learning of the Second Search Order emerged in evidence given by Mr Athanassios when examined by Mr Dawson, to the effect that Mrs Corry had informed Mr Corry (T57.10), and that Mr Corry had said to Mr Athanassios that “[i]t wasn’t a breach of the terms of the search order because he’s [that is, Mr Corry was] an Australian legal practitioner.” (T57.15-44) Mr Athanassios accepted that he had a concern that Mr Corry had found out about the search order before being served with it (T63.34-38), and that he shared a similar concern with respect to Mr Ghaly (T64.20-22; T66.26-28). Mr Athanassios also gave evidence to the effect that he believed that Mr Ghaly informed him that Mr Corry had told Mr Ghaly about the search order (T66.4-5).

Returning to the chronology, Mr Mackenzie subsequently called Mr Wallman and requested that he provide an electronic copy of the Bundle for Service to Mr Athanassios. Mr Mackenzie also advised Mr Wallman that Mr Corry was aware of the Second Search Order and was returning to his residential address.

At approximately 10.22am, Mrs Corry called Mr Corry asking where he was. Mr Mackenzie deposed to the conversation being in words to the following effect:

At approximately 10.35am, Mr Corry entered the residential property. Mr Mackenzie provided him the Bundle for Service, which he took. Mr Corry then said words to the following effect:

Mr Corry then took the folder containing the Bundle for Service with him into the bathroom. On his return, Mr Mackenzie asked whether Mr Corry would like him to explain the Second Search Order to him. Mr Corry said he wanted to get Mr Athanassios on the phone, and asked Mrs Corry to give him her phone, so he could call the lawyer.

At approximately 10.47am, Mr Corry called Mr Athanassios and went into the study. Mr Mackenzie observed that Mr Corry called Mr Athanassios a number of times, but was unable to get through to him.

At approximately 10.50am, Mr Mackenzie said to Mr Corry that it was nearing 11.00am and he should try to get his call through to Mr Athanassios, and that Mr Mackenzie would make a decision about the search commencing.

At approximately 10.57am, Mr Corry received a called from Mr Athanassios, which ended at approximately 11.15am.

Mr Mackenzie then advised Mr Corry that he would call the Search Party and commence the search. Mr Mackenzie advised him that if Mr Corry wished to claim either legal professional privilege or privilege against self-incrimination over any items, he should make it known to Mr Mackenzie. Mr Corry claimed privilege over the Microsoft Surface Pro and a gold HP laptop. Mr Mackenzie said that he should do this in front of the Search Party, on their arrival.

At approximately 11.20am, Mr Mackenzie called Mr Wallman advising him that the search could commence. The search, including a search of Mr Corry’s car, continued until 12.07pm. Mr Corry claimed legal professional privilege over a Surface Pro tablet and gold HP laptop which had been seized. The search then moved from the residential premises to the premises of NexGen.

During the course of the morning of 19 February 2019, whilst the search of the Corry’s residential premises was occurring, the solicitors for the Applicants, having been informed by Mr Grant of his surveillance at the NexGen premises, re-approached the duty judge and secured an amendment of the Second Search Order to extend the premises to be searched to include those of AAA. The time period of the search was also extended. The amended Second Search Orders were received by Mr Mackenzie at approximately 12.27pm.

Following proper formalities and processes associated with the execution of the Second Search Order, the premises of AAA were searched and various items seized by a second search party (the Second Search Party). That aspect of the search was completed by approximately 2.30pm.

The Second Search Party then searched the premises of NexGen which was physically proximate to the AAA premises. Mr Mackenzie explained at para 84 of his report to the Court that:

The search of the NexGen premises was completed by approximately 5.30pm on 19 February 2019.

Key material seized from the Corry residence, as recorded in Mr Mackenzie’s report, included:

The hard copy documents seized included:

Key material seized from the AAA premises included:

When Mr Wallman logged on to the Surface Pro during his oral evidence, the login screen read “Alex Corry” (T244.35-41). Similarly, the login that Mr Wallman used to access the HP Pavilion during his evidence read “Alex” (T265.38-39). Mr Ghaly gave evidence that the HP Pavilion was a device that was located on Mr Corry’s desk at NexGen’s premises (T521.5-6) and that Mr Corry used it for work (T521.8-9). Mr Corry did not challenge this evidence by way of cross-examination.

Mr Ghaly confirmed in his oral evidence that the Large and Small MacBooks belonged to him and that he used these whilst he was at NexGen (T405.12-18; T406.10-12) and when Mr Wallman logged on to the Large MacBook during his oral evidence, the login screen read “Rimon Ghaly” (T260.30-33).

What was located on the Surface Pro and HP Pavilion is described in more detail later in these reasons.

In addition to the hard copy documents, laptops and iPhone seized during the searches, Ms Balit gained access to a Microsoft Dynamics 365 Platform (the Dynamics Account) used by the NexGen business during the search of the NexGen premises on 19 February 2019.

During the execution of the Second Search Order at the premises of NexGen, as recorded in Ms Balit’s report to Mr Mackenzie, Mr Mackenzie had a discussion with Mr Corry, Ms Balit and Mr Wallman about the best way to carry out the search of computers and cloud accounts, and that it was agreed that any Microsoft 365 accounts, being email and the Dynamics Account, would be downloaded offsite. Mr Corry provided his username and the password to the Dynamics Account to allow Ms Balit to change the password to ensure that the accounts were not tampered with until all downloads were completed.

On the following day, according to her report, Ms Balit was contacted by Mr Corry who requested access to his Microsoft Office 365 business account. That request was declined as the downloading of the online accounts had not been completed by that stage.

On the morning of 21 February 2019, Ms Balit was contacted by her junior colleague, Mr Jay Banerji (Mr Banerji), who had been assisting her with the downloading of the accounts. Mr Banerji advised her that he was unable to log into the Dynamics Account with the password that had previously been using. Ms Balit confirmed that she could not log into the account and contacted Mr Mackenzie and Mr Wallman to the effect that the password had been changed, and that she was unable to complete the collection of evidence from the Dynamics Account. Mr Mackenzie advised Ms Balit to include this in her report and asked whether it was possible for the Defendants to have changed the password or to have had their IT provider do so on their behalf, to which Ms Balit replied “… yes the defendants or their IT provider would have had to change it”. (CB633)

The matter was relisted before Kunc J on 21 February 2019 and his Honour made orders, inter alia, that:

During the examination-in-chief of Mr Athanassios, the following exchange took place between him and Mr Dawson (T69.14-35):

Mr Athanassios gave evidence that he sent an email to Mr Corry after the hearing on 21 February 2019 and the further orders of Kunc J, requesting that Mr Corry provide the password to the Dynamics Account by 7pm and that he received a password from Mr Corry and passed it on to Mr Mackenzie and Ms Young at 6:53pm (T68.25-T69.5). The email from Mr Corry to Mr Athanassios enclosing the password (Ex 1) was sent at 6.49pm and stated:

In her oral evidence, Ms Balit said that she was provided with the new password by Mr Mackenzie on 22 February 2019 and that the new password worked. Using the new password, she was able to complete the download of the Dynamics Account: T129.28-37 and T135.15-20.

Ms Balit also gave evidence that, in the period between realising that there was a problem with gaining access to the Dynamics Account and receiving the new password from Mr Mackenzie, it would have been possible for somebody with the new password to access the Dynamics Account and alter its contents (T145.41-T146.2).

On 27 February 2019, Mr Athanassios wrote to the Defendants and under the heading “Prohibitions of access to material”, addressed Mr Corry specifically as follows:

The inference is inescapable that it was Mr Corry who at least caused the password to be changed, and that this was done in the face of Ms Balit having informed him that she was not in a position to provide him with the password in the form to which it had been altered following the Second Search Order having been executed on 19 February 2019.

A Statement of Claim in the 2019 Proceedings was filed on 2 May 2019. That pleading added three Defendants in addition to Mr Corry and Medicina, namely, Messrs Singh, Goradia and Ghaly. Messrs Singh and Goradia were directors of Medicina and had also been parties to the First Settlement Deed.

The Statement of Claim sought, amongst other relief, a declaration that the Defendants were in breach of Orders 1, 2 and 3 of the April 2018 Orders. As noted at [44] above, the April 2018 Orders were made on 17 April 2018, although they were referred to in the Statement of Claim as having been made on 16 April 2018.

The Statement of Claim pleaded out the facts of the 2017 Proceedings, the settlement of those proceedings and the making of the April 2018 Orders as part of that settlement.

Paragraphs 42-48 of the Statement of Claim then pleaded out the sequence of events which has been detailed more fully above as follows

Paragraph 51 of the Statement of Claim pleaded that contrary to and in breach of the Settlement, the Defendants retained hard copies of documents and electronic documents comprising or containing Confidential Information.

A mediation in relation to the 2019 Proceedings took place on 5 June 2019 and the proceedings resolved as between the Applicants, Medicina and Messrs Singh, Goradia and Ghaly (the Settling Parties). Mr Corry was not a party to the mediation and Mrs Corry was not a named defendant in the 2019 Proceedings.

A mediation position paper prepared on behalf of the Applicants was in evidence. [CB 1116]. This set out the allegation in the 2019 Statement of Claim relating to the alleged breaches of the April 2018 Orders, and stated at para 57 that:

Mr Ghaly gave unchallenged evidence that, in his opening statement of the mediation, Senior Counsel for the Applicants had stated that Mr Ghaly’s breach of the Second Search Order constituted a “criminal act by him”.

The terms of the settlement (the Second Settlement Terms) included the following:

The Settling Parties also agreed to place the following statement on the homepage of NexGen’s website for a period of 3 months from the date of the Second Settlement Terms:

Paragraph 9 of the Second Settlement Terms also provided from the preparation and provision to the Supreme Court of orders to be made by consent providing for, inter alia, “the dismissal of the claims against the second, third, fourth and fifth defendants set out in the statement of claim”. Mr Ghaly was the Fifth Defendant.

Paragraphs 15 and 16 of the Second Settlement Terms were as follows:

It was common ground that the $1 million sum referred to in cl 3 of the Second Settlement Terms was paid.

Unsurprisingly, each of the electronic devices seized contained a great deal of data. Some of what was found was described in Affidavit evidence by Mr Wallman. He also explained the care which was taken to ensure the integrity of that which was seized, so that there could be no suggestion of corruption or interference with what was on the various computers subsequent to their seizure.

In the course of his oral evidence, Mr Wallman demonstrated how he went about identifying material on the various computer devices. This involved him, in the course of his oral evidence, selecting the Microsoft Outlook icon from the desktop of the Surface Pro, which in turn brought up email accounts for the email addresses “alexc@bovacompounding.com.au” and “alexc@bova.com.au” (T252.21-T253.38). Screenshots of these images were in evidence. The Surface Pro also had on it Mr Corry’s NexGen email account, “alex@nexgenpharma.com.au”. That email account contained emails within a date range of 12 May 2016 and 22 March 2019 (T258.6-11), with the last of these dates being the day on which the Second Search Order was obtained. This in turn was relied upon to support an inference that the Surface Pro was in active use by Mr Corry in the period represented by the date range.

Mr Wallman’s evidence was that the Bova email account contained 58,874 items in the inbox, 31,047 items in the sent items folder, 197 items in the drafts folder and 213 items in the deleted items folder: Wallman Affidavit at paras 33(g)(i)-(iv) (CB278). He also gave evidence that he caused searches for key terms to be carried out within the alexc@bova.com.au email account: Wallman Affidavit at para 33(g) (CB278) (T256.23-26). Those searches produced 8,010 items using the word “Bova”, 38 items using the words “Bova Price Data”, 83 items using the words “Bova Formulations”, 80 items using the word “Vivaldi”, and 48 items using the abbreviation “HCG”, this being a shorthand reference to Des/hCG referred to at [51] above: Wallman Affidavit at paras 33(g)(a)-(e) (CB278) and pp 288-296 of Ex NMW-4 (CB574-582).

Mr Wallman also copied various items and folders onto a Hard Drive (which became Ex 4) from the Surface Pro, the Large Macbook and the Small Macbook, as well as an Excel spreadsheet containing data extracted from Mr Corry’s iPhone by Ms Balit.

The folders copied from the Surface Pro were entitled:

During his oral evidence, Mr Wallman, having logged on to the Surface Pro, clicked on the PK Software icon which brought up a box headed “PK Software” and “The Compounder 4”. (There was also a PK Software icon on the home screen of the HP Pavilion: T266.5-7). There was also an icon headed “The Compounder 4” which, when selected, generated a login screen with the username “Alexcorry”, with a drop down menu which brought up Mr Bova’s name in addition to that of Mr Corry, together with a number of other chemists who had previously worked at, or still worked at, Bova Chemist.

The Applicants relied upon this evidence, in conjunction with the evidence of Mr Davidson, that in or about April or May 2018, after the April 2018 Orders had been made, Mr Corry said words to the following effect to Mr Davidson: “The Surface Pro is at home and still has all the Bova formulations on it. If they want to get it, they can come and find it.” Mr Corry did not put to Mr Davidson that he, Mr Corry, had never made this statement to him, and Mr Corry did not himself go into evidence to deny that any such conversation occurred. I am satisfied that such a statement was made by Mr Corry and that it was true.

The “BOVA2” folder copied from the Surface Pro contained a sub-folder titled “Small Animal”. Mr Ghaly was taken to a spreadsheet in this sub-folder and cross-examined about a number of formulae in relation to particular drugs, including Gabapentin, Trilostane and Deslorelin. He agreed under cross-examination that these worksheets and the information they contained (such as unique formula IDs, modifications of formulae) were the product of the use of PK Software. So much may be illustrated by the following exchange between Messrs Dawson and Ghaly:

Mr Bova also gave evidence that, having reviewed the “Small Animals” folder, it contained a large number of Excel spreadsheets containing information in relation to some 18 formulations (and variants) and that these were copies of documents created by Bova Chemist from the data within the PK Software. This accorded with Mr Ghaly’s evidence referred to above. Also within the “Small Animals” folder were three Excel spreadsheets titled “Products”, “Products 2” and “Products 3”, which contained many thousand rows of information which Mr Bova identified as being evidence related to Bova Chemist’s Formulations, and the prices of those formulations as sold to its clients taken from the data within the PK Software.

Mr Bova gave similar evidence in relation to two documents taken from the “Bova Work” folder on the Surface Pro, titled “doxy” and “methinamazole 2.3 x3”, and said that these were copies of documents from Bova Chemist Formulations from the PK Software.

Another document from the “BOVA2” folder was titled “Bova Price Data 7/11/2016 5:01pm (2)”. This document showed unique formula IDs for Trilostane and Deslorelin which led Mr Ghaly to agree, under cross-examination, that the document or report was generated out of the PK Software (T430.18-21). Mr Bova also gave evidence that this document, together with two other price data documents, were copies of documents created by Bova Chemist from the data within the PK Software.

Mr Wallman gave evidence that the searches he performed on the Surface Pro revealed that it contained a document titled “Batch Product Info” (within the “Bova Work” folder) which contained a formulation list for numerous compounded medications: Wallman Affidavit at para 33(d) (CB552-556). This list of formulations included one for Deslorelin 2.25mg/mL Injection. This evidence was corroborated by a search on the Surface Pro which Mr Wallman performed in the course of his evidence-in-chief: see T249-251.

In relation to Deslorelin, Mr Bova gave evidence that the formula had been purchased in 2009 from Franks Pharmacy in the United States for approximately $30,000, had been modified over a five month period with external expert assistance to create a new and unique formulation known as Des/hCG (T334.43-T335.10), and that this formulation had been stored on the PK Software since at least 2014.

The formulation on the Surface Pro was the same as Bova Chemist’s formulation in that the compounds/ingredients within both formulations were exactly the same as were the quantity of Deslorelin Acetate Powder, Base C Polyethylene Glycol, Polysorbate Liquid, Sodium Chloride granular powder, Methylparaben, Propylparaben, and water for injection in both formulations. The method of preparation/manufacturing outlined was also the same.

Mr Bova was not cross-examined on his evidence that the formula found in the “Batch Product Info” document on the Surface Pro was exactly the same as Bova Chemist’s unique formula stored in the PK Software. Mr Bova’s evidence was confirmed by the tender (CB557) of Bova Chemist’s formula worksheet which bore a date for data entry of 19 August 2014.

Within the “BOVA2” folder on Mr Corry’s Surface Pro was a “BOVA WORK” folder in which there were two documents titled “sales and dispense and products” and “sales and dispense2 and products”. Mr Bova identified these in a relevantly unchallenged way as copies of Excel spreadsheets created by Bova Chemist from the data within the PK Software.

There was also uncontested evidence from Mr Bova that within the “privilege_AC” folder were two folders titled “BOVA Cross” and “BOVA WORK” which contained the following documents which he said were copies of documents created by Bova Chemist from the data within the PK Software:

The Surface Pro also contained a Vivaldi Database icon which, when clicked on, brought up a box headed “Vivaldi Training Manager”.

Mr Wallman also gave evidence that he had located at the Corry residence a document titled “Good Documentation Practices, SOP Number 5.010” (SOP 5.010) and untitled documents in the same format as the SOP 5.010 document, containing words to the effect of “this procedure applies to all personnel at Bova Compounding Chemist”: Wallman Affidavit at para 26 (CB275).

Mr Bova’s evidence was that these documents were copies of documents created from the Vivaldi Database: Second Bova Affidavit at paras 22(a)-22(b) (CB651). In the context of Mr Bova’s evidence in relation to the Vivaldi Database and that it was a database which housed operational documents which could be accessed by staff and contained documents which could be updated by authorised authors, I understood Mr Bova’s evidence that the SOP 5.010 document was a copy of a document created from the Vivaldi Database not to mean, contrary to one of Mr Corry’s submissions, that the document had been created using the software but, rather, that the hard copy document discovered at Mr Corry’s home had been reproduced from documents housed in the Vivaldi Database.

The SOP Number 5.010 document has a format consistent with other documents identified as being stored in the Vivaldi Database. There is no doubt that it was a document created whilst Mr Corry was working at Bova Chemist. It is dated 12 June 2015 and its author is recorded as Alex Corry. Mr Bova’s evidence was that the Vivaldi Database contained Bova Chemist’s procedures and protocols for running the business, and that many of the documents within the Vivaldi Database contain a unique “SOP” number. It is stated to be version 3 of this Standard Operating Procedure, and para 2 of the document under the heading “Scope” records that “[t]his procedure applies to all personnel at Bova Compounding Chemist”.

Mr Bova also identified attachments to two emails located at the AAA premises during the execution of the Second Search Order which he said were documents created from the Vivaldi Database. These attachments were:

In addition to the hard copy documents already described and which were referred to in the Statement of Charge, there were other hard copy documents discovered in the course of the search of NexGen’s premises which it was submitted, by reference to Mr Bova’s evidence, were copies of Bova Chemist’s formulations. These were:

Mr Corry challenged Mr Bova’s evidence that these formulations were similar to and derived from Bova formulations (T368-371) but that cross-examination only served to reinforce Mr Bova’s opinions which were not contradicted by any other evidence in the case.

Part of this cross-examination, in relation to the hard copy formulation for Deslorelin Acetate, was as follows:

The significance of the identification of all of these documents, even though some were not specifically referred to in the Statement of Charge, is that they show the extent of documentation Mr Corry had retained from his employment with Bova Chemist. This is relevant to the Second Corry Charge (see [282]ff below) which relates, inter alia, to Mr Corry’s exploitation and use of Confidential Information.

It was common ground that the Large and Small MacBooks belonged to Mr Ghaly, although it may also readily be inferred that he used them in and for the purposes of his work at NexGen.

As shall be explained below, the charges against Mr Ghaly were confined to his possession of a relatively small number of documents and the case, as ultimately pressed, was confined to some six documents, three of which Mr Ghaly accepted should have been returned pursuant to the April 2018 Orders.

These documents and the three documents about which there is a dispute, will be dealt with in more detail later in these reasons.

The course of the evidence disclosed that, in addition to the documents that were the subject of the Statement of Charge against Mr Ghaly, his Mac Books contained many other documents or data that originated from Bova Chemist and which were covered by the April 2018 Orders. The forensic relevance of this was that it bore upon the credibility of Mr Ghaly’s contention that the documents specified in the Statement of Charge were only retained by him inadvertently or by oversight. The retention of other documents was said by the Applicants to evidence the contumacious nature of the contempt with which Mr Ghaly was charged.

The most striking of these additional documents was a document found on one of Mr Ghaly’s MacBooks titled “Competitor Analysis”. This was an Excel spreadsheet which Mr Bova described as being a report generated out of Bova Chemist’s PK Software by the data mining function of the software which facilitated the preparation of reports. The spreadsheet permitted fields to be selected including in relation to product, year and quantity. The information contained in the spreadsheet included product sales for 2014-2015 and unit prices. This date range was significant in that it predated the establishment of the NexGen business. The metadata in relation to this document also disclosed that the content had been created in November 2016, probative evidence of the fact that it was generated whilst Messrs Corry and Ghaly were still employed by Bova Chemist and that the spreadsheet, or part of it at least, was generated using the PK Software.

Mr Bova said of the information contained in this spreadsheet (T326.31-36):

A similar document entitled Competitor Analysis 2 was also located on Mr Ghaly’s MacBook. This was created on the same date as the first Competitor Analysis document and Mr Bova’s evidence was that the master screen including the product list in the document came from the PK Software: T328.31-.32.

On 14 August 2019, the Applicants filed a Notice of Motion, seeking declarations that each of Mr and Mrs Corry and Mr Ghaly was in contempt of Court in various differing respects. This Notice of Motion was amended on 20 December 2019, and the amended Notice of Motion annexed the Statement of Charge and sought declarations that each of Mr and Mrs Corry and Mr Ghaly was in contempt of Court as charged in the Statement of Charge.

It may be observed that the Notice of Motion was brought in the 2019 proceedings in which Mrs Corry had not and has not been joined as a Defendant.

Further, although Mr Ghaly was a party to those proceedings, they should have been dismissed as against him by reason of cl 9 of the Second Settlement Terms: see [151] above.

The individual charges will be dealt with separately below after consideration of the applicable legal principles and consideration of a preliminary matter raised by Mr Corry.

As outlined by Campbell J in NCR Australia v Credit Connection [2005] NSWSC 1118 at [21] (NCR), the expression “contempt of court” covers a variety of types of legal wrong, all of which have an element in them of interfering with the administration of justice in the courts.

At common law, breach of a Court order amounts to a contempt: see In the matter of Jimmy’s Recipe Pty Limited [2020] NSWSC 93 at [67] (Jimmy’s Recipe); Australasian Meat Industry Employees' Union v Mudginberri Station Proprietary Limited (1986) 161 CLR 98 at 113; [1986] HCA 46 (Mudginberri); and Bellerive Homes Pty Ltd v FW Projects Pty Ltd [2019] NSWSC 193 at [38] (Bellerive). In Toyota Finance Australia Limited v AJI Enterprise Group Pty Ltd [2019] NSWSC 33 at [115] (Toyota Finance), Ward CJ in Eq noted that breaches of court orders “fall within the traditional classification of civil contempt”.

Where contempt is said to consist of failure to comply with a court order, it must be demonstrated that the contempt was wilful, and not merely casual, accidental or unintentional: see Mahaffy v Mahaffy (2018) 97 NSWLR 119; [2018] NSWCA 42 at [92] (Mahaffy); Commonwealth Bank of Australia v Salvato (No 4) [2013] NSWSC 321 at [127] (Salvato); Reliance Financial Services Pty Ltd v Allyma Express Holdings Pty Ltd (No 2) [2018] NSWSC 1776 at [79]-[80]; Furlong v Wise & Young [2019] NSWSC 1718 at [98] (Furlong); Markisic v Commonwealth of Australia (2007) 69 NSWLR 737; [2007] NSWCA 92 at [64] (Markisic); and Mudginberri at 113.

As will be seen below, proceedings for criminal contempt may be brought in the Court’s civil jurisdiction. This raises a nice legal question as to the appropriate standard of proof.

The overwhelming weight of authority is strongly in favour of the criminal standard of proof applying to proceedings such as the present and, as noted at [2] above, the Applicants did not contend otherwise: see, eg, Witham v Holloway (1995) 183 CLR 525 at 534; [1995] HCA 3 (Witham); Jimmy’s Recipe at [51]; Mirus Australia Pty Ltd v Gage [2017] NSWSC 1046 at [118] (Mirus); Salvato at [17]; Mahaffy at [92]; and NCR at [27]. In NCR, Campbell J noted (at [27]) that the criminal standard of proof was required due to the “punitive nature” of proceedings for contempt.

In Eshow, however, White JA observed that:

As to the nature of contempt proceedings, the characterisation of contempt proceedings as being “criminal” by White J (as his Honour then was) in Australian Securities and Investments Commission v Sigalla (No 4) (2011) 80 NSWLR 113; [2011] NSWSC 62 at [87] (Sigalla) has been criticised by the High Court, the Victorian Court of Appeal and the Victorian Supreme Court.

In Construction, Forestry, Mining and Energy Union v Grocon Constructors (Victoria) Pty Ltd (2014) 47 VR 527; [2014] VSCA 261 at [498] (Grocon), the Victorian Court of Appeal noted that contempt proceedings “have a certain chameleon-like quality. They take their character from their surrounding circumstances, and the context within which the analysis proceeds”.

This chameleon-like quality of such proceedings was also noted by Zammit J in Fortune Holding Group Pty Ltd v Zhang (No 2) [2017] VSC 738 at [28], where his Honour observed that Victorian courts have declined to follow Sigalla and to adopt the characterisation of contempt proceedings as “criminal”, indicating instead that contempt proceedings use a “hybrid” of criminal and civil rules.

In Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375; [2015] HCA 21 at [35] (Boral), the plurality of the High Court noted that “the contempt proceeding is not a criminal proceeding” and, with reference to the High Court’s earlier decision in Witham at 549, noted that proceedings for contempt of court to punish a respondent are “civil and not criminal proceedings”. In Boral at [59], Nettle J observed that:

More recently, in Kostov v YPOL Pty Ltd (2018) 98 NSWLR 1002; [2018] NSWCA 306 at [17], the NSW Court of Appeal observed that:

So much was confirmed by the NSW Court of Appeal’s subsequent decision in Dowling v Prothonotary of the Supreme Court of New South Wales (2018) 99 NSWLR 229; [2018] NSWCA 340 (Dowling).

Although it has been subject to criticism, the traditional distinction between civil and criminal contempt has not been abolished: see Sigalla at [11]; Toyota Finance at [114]; Furlong at [93]; and Mirus at [116].

The traditional rationale for the distinction was articulated in Witham at 531, where the plurality outlined that:

The distinction between civil and criminal contempt was described in general terms by McHugh J in Witham at 538-539, as follows:

The notion that criminal contempt involves “contumacious” disobedience to the orders of the Court is a well-established proposition, as reiterated in a number of decisions including Furlong at [95]; Jimmy’s Recipe at [60]; Pang v Bydand Holdings Pty Ltd [2011] NSWCA 69 at [73]-[74] (Pang); Cohen v Double Bay Bowling Club [2019] NSWSC 1625 at [202] (Cohen); Australian Consolidated Press Limited v Morgan (1965) 112 CLR 483 at 489; [1965] HCA 21 (Morgan); and Mudginberri at 108. In Cohen at [202], Henry J noted that traditionally a criminal contempt is committed where, inter alia, a prima facie civil contempt involves deliberate defiance or is contumacious: see also Morgan at 489.

Similarly, non-compliance with orders and undertakings does not involve criminal contempt, unless the non-compliance was knowingly deliberate: see, for example, Jimmy’s Recipe at [60]; Morgan at 489 and 501; and Barkley v Barkley-Brown [2010] NSWSC 746 at [17]-[18].

On the other hand, for civil contempt, it is neither necessary to show that the disobedience was contumacious, nor that the contemnor intended to interfere with the administration of justice: see Jimmy’s Recipe at [51]; and Alexander v Crawford [2003] NSWSC 426 at [15]-[17]. Criminal contempt is what is charged in the present case.

In Furlong at [101], Ward CJ in Eq summarised the various procedural requirements to be satisfied on a hearing of a contempt charge, noting, with reference to Lane v The Registrar of the Supreme Court of New South Wales (Equity Division) (1981) 148 CLR 245 at 257; [1981] HCA 35, that the charge must be distinctly stated and that the party bringing the charge of contempt will be held to the precise formulation of the charge. Her Honour referred to Construction, Forestry, Mining & Energy Union v BHP Steel (AIS) Pty Ltd [2001] FCA 1758 at [32], where Lee and Finn JJ said that “[u]nless and until an application is allowed to alter a particularised statement of charge, the accused is entitled to insist that he or she is only required to meet the charge as made”. See also Mirus at [119]; and McDonnell v Novello [2006] NSWSC 1186 at [26].

Further, in Mahaffy at [92], Simpson JA noted that a charge of contempt should specify the nature of the contempt by providing proper particulars, and that there can be no conviction for contempt by breach of an order which is ambiguous, there relying on Lewis v Ogden (1984) 153 CLR 682 at 693; [1984] HCA 26 and Morgan.

The Applicants drew attention to the decision of Woolf LJ, as his Lordship then was, in Harmsworth v Harmsworth [1987] 1 WLR 1676 at 1686, as follows:

This decision was applied in Matthews v ASIC [2009] NSWCA 155 at [45] (Matthews) and in O’Connor v Hough [2016] 2 Qd R 543; [2016] QSC 4 at [14] (O’Connor). See also O’Connor at [29], where Burns J observed that “the rule against duplicity does not apply to a proceeding for contempt”. This is long-established. In Concrete Constructions Pty Ltd v Plumbers and Gasfitters Employees’ Union (No 2) (1987) 15 FCR 64 at 74 (Concrete Constructions), Wilcox J said that “[t]he principle of duplicitous pleading has no place in the law of contempt.”

It is also relevant to draw attention to Ward CJ in Eq’s observation in Mirus at [122] that:

In Anderson v Hassett [2007] NSWSC 1310, the Defendant executor had been ordered to produce to the Court all of the records of the administration of the estate the subject of the proceedings. The Plaintiff, on whose application the order had been made, charged that the Defendant was guilty of contempt by failing to produce all of the relevant documents. It was submitted on behalf of the Defendant that it was not enough for there to be a contempt that there be an act or omission in breach of the Court’s order, but that this had to be accompanied by an intention to disobey the Court’s order. Brereton J, as his Honour then was, rejected this submission. His Honour found the defendant guilty of contempt on the basis that he had in his possession documents covered by the order, which he did not produce. The breach was not “casual, accidental or unintentional” in the relevant sense (at [35]), and it did not matter that the defendant had no specific intention to defy the Court’s order (at [8]).

In Markisic, the Appellant made a charge of contempt against the Commissioner of the Australian Federal Police. In the proceedings at first instance, the Appellant had caused a subpoena to be issued to the Commissioner, and had claimed that the Commissioner had failed to produce all of the documents caught by the subpoena. Campbell JA (with whom Handley AJA and Bell J agreed) said (at [61]):

In Mirus, the Plaintiff brought an application by Notice of Motion that one of its former senior employees, Mr Gage, be found guilty of contempt. The application was founded on allegations that Mr Gage deleted from certain of his computer devices documents and other electronic files of relevance or potential relevance to the proceedings. Orders made by a judge of the Supreme Court, made by consent, restrained the Defendant from certain conduct in relation to Confidential Information and Intellectual Property, with the Defendant also ordered to deliver to the Plaintiff’s solicitors certain identified devices. The inspection regime agreed between the parties provided for the Plaintiff’s computer expert to obtain a forensic image of, and review, the devices which had been delivered up pursuant to the orders of the Court, including access to the Defendant’s cloud-based accounts. However, the Plaintiffs alleged that there were separate instances or episodes of electronic data deletion by the Defendant, with the Court ultimately finding that the Plaintiff had proved beyond reasonable doubt that the contempt in charge 1 had been established beyond reasonable doubt. At [123] and [125], Ward CJ in Eq noted that:

In Toyota Finance, the Plaintiff filed, pursuant to a Notice of Motion, for the defendant to be dealt with for contempt of Court. One count related to the defendant disposing of or otherwise dealing with any of 10 identified vehicles without the prior written consent of Toyota, and from interfering with Toyota’s recovery of possession of the vehicles or any part of the vehicles, with another count relating to the Defendant’s alleged failure to deliver up the vehicles to the Plaintiff. In the circumstances of the case, the Court was not satisfied beyond reasonable doubt that the Defendant had the requisite knowledge of the terms of the Court orders, so as to permit a conclusion that any breach of one or more of those orders was a contempt of Court: at [167].

In Wyszynski v Bill [2005] NSWSC 110, an order had been made that the Plaintiffs deliver up to the Registrar of the Court a document purporting to be the will of a deceased person. The document was not delivered up to the Registrar by the nominated time. The Defendant, on whose application the order had been made, applied to have the Plaintiffs found guilty of contempt. The First Plaintiff filed an Affidavit which stated that she had an anxiety attack in which she had torn up various documents. She said she had searched her records, and had been unable to find the purported will, and that she must have destroyed it during the anxiety attack. White J (as his Honour then was) accepted that until and unless an order is discharged, there is an obligation to comply with it, but held that it was still an essential requirement in establishing contempt of the order to prove that the terms of the order were capable of being complied with: at [59].

In Salvato, Garling J held that the Defendant, Mr Salvato, was guilty of contempt as he deliberately breached, and had remained in breach of, an undertaking he had given to the Court, that he would give possession of a property located in Vaucluse, vacate the property, and hand over the keys to the Commonwealth Bank by a specified date.

Most recently, in Sun v He [2020] NSWSC 802, Ward CJ in Eq made a declaration that the Defendant, Mr Xin He, was in contempt of Court by engaging in certain charged conduct during the execution of a search order at his home premises. It was not in dispute that before Mr He permitted the search party to access his premises in accordance with the search order, he deliberately deleted a considerable amount of electronic material on various of his electronic devices, which were said to contain evidence relevant to litigation between himself and the Plaintiff. Ward CJ in Eq held that the contempt was of a criminal nature, comprising a deliberate defiance of the search order and an interference with the administration of justice: at [220]. See also He v Sun [2021] NSWCA 95.

The hearing of this application was originally set down for three days from 29 April 2020. Due to logistical difficulties in conducting a hearing at that time on account of the COVID-19 crisis, that hearing date was vacated and the hearing was listed for three days on 20 July 2020, with a fourth day, being 23 July 2020, being a reserve day, if needed. (As matters transpired, the evidence was heard over 5 days, submissions one month later over 2 days, and further written submissions were received in September 2020).

On Friday 17 July 2020 at approximately 4.42pm, Mr Corry forwarded to my Chambers and to the other parties a copy of a Notice of Motion of that date (Mr Corry’s Notice of Motion) together with an Affidavit of that same date. In that Notice of Motion, Mr Corry sought wide ranging relief including the discharge of the Second Search Order, the return and restraint of use made of documents obtained pursuant to the search which had been made, and the dismissal of the Notice of Motion for contempt. In terms, the relief sought in the Notice of Motion relevantly was as follows:

Mr Corry’s Notice of Motion also sought further or in the alternative:

The reference to the Third Respondent was an error. It was intended to be a reference to the Second Respondent, Mrs Corry. The basis for this relief related to the form in which the contempt application had been brought against Mrs Corry, namely by a Notice of Motion in which she was named as Third Respondent in proceedings to which she was not a party.

On Sunday 19 July 2020, Mr Corry filed electronic submissions in support of his Notice of Motion. On the morning of Monday 20 July 2020, shortly before the hearing of the contempt application commenced, Mr Wallman on behalf of the Applicants filed an Affidavit which responded to Mr Corry’s affidavit of 17 July 2020.

The timing of the filing of Mr Corry’s Notice of Motion was unfortunate although he sought to explain and justify it by reference to documents he had obtained on 14 July 2020 pursuant to a Notice to Produce issued to Mr Davidson. That explanation had some basis in relation to the orders sought in prayers 4-14 of his Notice of Motion, however, it had no basis in relation to the relief sought in prayer 15 in respect of Mrs Corry based on the form of process used to bring the contempt charge against her.

The Applicants took a pragmatic view in dealing with Mr Corry’s Notice of Motion. They did not seek to cross-examine Mr Corry on his Affidavit of 17 July 2020. Mr Corry, however, did seek and was granted leave to cross-examine Mr Wallman on his Affidavit of 20 July 2020. This cross-examination occurred on the morning of 20 July 2020.

Following the cross-examination, Mr Corry made brief submissions. I directed that the Applicants respond to Mr Corry’s submissions in support of his Notice of Motion on the morning of 21 July 2020 orally and, if they so chose, in writing. Written submissions on behalf of the Applicants were filed prior to recommencement of the hearing on 21 July 2020 and Mr Dawson made brief oral submissions.

I reserved my decision on Mr Corry’s Notice of Motion and indicated that I would address it in my reasons for judgment. This course was not opposed.

The thrust of Mr Corry’s argument for the discharge of the Second Search Order, the return of documents obtained pursuant to it, the restraint sought to be put on the Applicants in relation to their use and the ultimate dismissal of the contempt application, was put on the basis of alleged non-disclosure of material matters to Kunc J on 18 February 2019, when the ex parte application for the Second Search Order was made by the Applicants.

In his Affidavit sworn 17 July 2020, Mr Corry asserted that it was the fact and the Applicants should have disclosed that:

There were two other matters which Mr Corry also said had not been disclosed, but he did not press these matters in his oral submissions.

Mr Corry led evidence as to the existence of a contract between Mr Davidson, B J Davidson Enterprises Pty Ltd defined as the Contractor and Finn, by which the Contractor agreed to ensure that Mr Davidson acted as a consultant helping to assist the sales and marketing teams at Bova Consulting “to grow the business” (the Davidson Contract). The Davidson Contract was executed by Mr Bova on behalf of Finn on 9 February 2019 and by Mr Davidson on his own behalf and on behalf of B J Davidson Enterprises Pty Ltd on 12 February 2019. It had a commencement date of 11 February 2019. Item 5 of Sch 1 of the Davidson Contract included provision for a bonus payment in the following terms:

Mr Corry’s Affidavit evidence was that he recalled that National Veterinary Centres, which I infer is a reference to “National Vet Care”, as per Item 5 of Sch 1 of the Davidson Contract, was “the single largest client of [Medicina] and a party to an exclusive supply contract with [Medicina] which had not expired at the time of the Second Search Order”.

Mr Corry also led evidence in support of the fact that the Davidson Contract had been drafted by the solicitors for the Applicants, although Mr Wallman made it clear in his Affidavit, and I accept, that he was not aware at the time of the making of the ex parte application for the Second Search Order, that such a contract had been drafted or had come into existence. The contract was evidently drafted by another section of HWL.

In relation to the matters referred to concerning the service of a creditor’s statutory demand on NexGen in the period immediately prior to the hearing and execution of the Second Search Order, it was established that Mr Bova was aware at least of Mr Davidson’s intention to serve such a demand on NexGen. It is also the fact that neither in Mr Davidson’s Affidavit relied on in support of the Second Search Order, nor in any of the other material relied on when obtaining that order, was any reference made to the existence or fact of issue of the statutory demand.

In his Affidavit sworn 15 February 2019, however, under the heading “Resignation from NexGen Pharma”, Mr Davidson did say:

Mr Corry’s argument based on alleged non-disclosure should be rejected.

In relation to the non-disclosure of the Davidson Contract, it is simply not apparent how the non-disclosure of that contract was or would have been material to the Court’s decision whether or not to issue the Second Search Order. In oral address, Mr Corry submitted that the non-disclosure of the Davidson Contract in some way “robbed the parties … from [the opportunity of] resolving the matter in a manner that didn’t require a search order and litigation” (T23.36-38). It is not obvious to me how these matters were logically connected but, more significantly, Mr Corry’s submission does not explain the materiality of the non-disclosure to the issue of the Second Search Order. What was material to that order was the evidence put before the Court which was not affected or diminished by the existence or otherwise of the Davidson Contract.

Next, contrary to Mr Corry’s submission, the fact that Mr Davidson was subject to the restraints provided by the first Deed of Release was equally not material to the issue of the Second Search Order.

In relation to the alleged non-disclosure of the issue of the creditor’s statutory demand, as has been noted above, there was disclosure in Mr Davidson’s Affidavit that he was, at the time he swore that Affidavit in February 2019, seeking to recover outstanding wages and expenses. The non-disclosure of the fact that a statutory demand had been issued was not material in circumstances where there had been disclosure of the fact that Mr Davidson claimed that he was owed and was seeking to recover outstanding monies.

In relation to the alleged non-disclosure in relation to Ms Balit, Mr Corry’s claim that she had not been formally engaged by the Plaintiffs when Mr Wallman swore his Affidavit on 13 August 2019 was not established on the facts, and was in fact contradicted by evidence of Mr Wallman, which I accept. I also accept the submission made on behalf of the Applicants that the alleged non-disclosure in relation to Ms Balit was not material and irrelevant to the application for the Second Search Order on 18 February 2019.

Insofar as the Notice of Motion sought dismissal of the contempt application against Mrs Corry, that contention was put on the basis that proceedings should have been commenced against her by way of Summons rather than by way of Notice of Motion in proceedings to which she was not a party. This objection was, at best, one of form and not substance. In this respect, Mrs Corry relied upon the judgment of Powell JA in Abram v National Australia Bank Ltd [1997] NSWCA 7 at 24, where his Honour, in obiter remarks, said:

In the course of his submissions in reply, I asked Mr Corry to identify any prejudice he contended Mrs Corry had suffered by reason of the fact that the charges had been made against her by way of Notice of Motion rather than Summons. His response was vague and speculative. I provided Mr Corry with an opportunity to identify any prejudice Mrs Corry suffered by reason of the form of the proceeding against her being by way of Notice of Motion and not Summons (T123.10). I further indicated to him that if there was anything more that he wished to say on this matter, I would call on him to do so at the beginning of proceedings on the third morning of the trial. I then went on to observe that:

Mr Corry did not avail of himself the opportunity to revisit this question on the third morning of the trial.

Even if there was substance in Mr Corry’s point as to the form in which the proceedings should have been brought against Mrs Corry (and I do not consider that there is), I would not have dismissed the charges sought to be made against her in circumstances where the point was raised by Mr Corry on the eve of the commencement of the trial and had not been raised at any time earlier.

For completeness I should note that, on 25 August 2020, the day prior to the making of final submissions, Mr Corry filed a document of some 27 pages in length under the heading “First and Second Respondents’ Closing Written Submissions”, but with a subheading that these submissions were filed “in relation to [the] 17th July 2020 [N]otice of [M]otion”. No leave was sought or granted to file further written submissions in relation to this Notice of Motion, and Mr Dawson legitimately objected to their receipt. That objection was entirely justified. I had heard argument in relation to the 17 July 2020 Notice of Motion on the first and second days of the trial. The Applicants, notwithstanding the late filing of that Notice of Motion, had dealt with it both orally and in writing with expedition, and Mr Corry had responded to those submissions. I indicated that I would provide my reasons in relation to the Notice of Motion in this judgment, and reserved my decision.

Apart from the absence of any leave to file further submissions, the further submissions sought to be filed contained a number of assertions in relation to the Applicants and their legal representatives (including their professional conduct) that had not previously been advanced nor put to Mr Wallman. This provides a further reason for not engaging with Mr Corry’s further written submissions in support of the Notice of Motion.

In any event, even if I had been satisfied that there had been some non-disclosure, I would not, in the exercise of my discretion, have granted the extensive relief sought by Mr Corry in his Notice of Motion.

For the foregoing reasons, Mr Corry’s Notice of Motion dated 17 July 2020 must be dismissed.

These reasons now turn to consider the charges made against the three Respondents, commencing with the charges made against Mr Corry.

By the Statement of Charge, the Applicants charged that, in wilful disobedience and contravention of the April 2018 Orders, Mr Corry retained the PK Software Database 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).

The Confidential Information referred to in the Statement of Charge was defined as any and all documents or information owned by the Plaintiffs or either of them, including price lists, client lists, formulation lists, top selling product lists, historical lists of client purchases, supplier purchase prices, documents created using Bova Chemist’s PK Software, and documents created using the Vivaldi Database.

The Applicants also charged that, in wilful disobedience and contravention of the April 2018 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).

The Applicants also charged that Mr Corry frustrated the Second Search Order (the Third Corry Charge) as follows:

In their opening submissions, the Applicants contended that:

The Applicants further submitted that Mr Corry breached and frustrated the Second Search Order, through the interruption of the download of the Dynamics Account, which it was agreed would be downloaded offsite by the Independent Computer Expert (the Fourth Corry Charge). As explained above, Mr Corry had provided his username and password to the Independent Computer Expert to allow her to change the password to ensure that the account was not tampered with until the download was complete. The Applicants submitted that:

I have set out earlier in these reasons my findings as to what was found in the course of the execution of the Second Search Order on Mr Corry’s Surface Pro, on the HP Pavilion, at NexGen’s premises and the adjacent AAA premises, and at the Corry residence. That included the PK Software, the Vivaldi Database and documents created using the PK Software.

Mr Corry submitted that the First Corry Charge did not contain the requisite precision, and referred to the decision in Furlong which has been noted at [209] above. Mr Corry’s submissions did not, however, elaborate upon why this was so, other than to state that “[t]he definition that is provided in the [S]tatement of [C]harge introduces ambiguity because it alters the word ‘formulation list’ to ‘formulations’”. Paragraph 20 of the Statement of Charge picks up the term “Confidential Information”, as defined in para 5(c), as well as the term “Listed Things”, which is identified in para 17 of the Statement of Charge. In the definition of “Confidential Information”, a number of generic types of documents are set out including “formulation lists”, after which is contained in parentheses the word “Formulations”. There is no ambiguity in the author of the Statement of Charge deploying the shorthand “Formulations” for “formulation lists”. There is no merit in Mr Corry’s submission.

Mr Corry then submitted that the First Corry Charge “disclose[d] no offence known to law”. Mr Corry’s written submission in support of this contention stated that “[i]n the absence of proof by the Applicants that delivery up did not occur on the terms of the orders retention is not unlawful retention. Therefore the Paragraph 20 Charge discloses no offence known to law and should be dismissed” (footnote omitted). This submission is somewhat elusive. It seems on the one hand at least implicitly to accept that documents were retained. So long as such documents which were located on the various computers and at NexGen, AAA and the Corry residence could be identified by reference to the documents described in the April 2018 Orders as required to be delivered up, it is self-evident that delivery up did not occur. The evidence of Mr Bova to which I have referred earlier in these reasons together with some of Mr Ghaly’s evidence elicited under cross-examination established that various documents found on Mr Corry’s Surface Pro were created using the PK Software: see [154]-[171] above.

Mr Corry also asserted that the First Corry Charge was latently duplicitous and prejudicial. It was not clear from Mr Corry’s written submissions exactly what the “latent duplicity” he complained of was, or how it generated prejudice. If it was because the charge related to his retention of both “Confidential Information” and “Listed Things”, I fail to see any prejudice. In any event, the rule against duplicity does not apply to a proceeding for contempt: see [211]-[212] above.

Mr Corry also sought to contend by reference to Ex M in the proceedings that there was some ambiguity in the April 2018 Consent Orders. Exhibit M was a bundle of correspondence from Bova Chemist’s solicitors to various lawyers apparently acting on behalf of Mr Corry between June 2017 and August 2018. Mr Corry endeavoured to use this solicitor correspondence to “suggest alternative constructions are available on the terms of the Consent Orders”. Even if the correspondence could be used to interpret the orders, Mr Corry’s submissions did not elaborate upon what he asserted those alternative constructions were, or what their potential significance was.

Mr Corry took a further point in his written submissions, namely that:

This submission, in my view, is entirely without merit. Mr Corry executed the First Settlement Deed, a term of which was that Consent Orders would be entered, which they subsequently were. It is not open, in my view, for Mr Corry to take a technical point about service of the Consent Orders in circumstances where he agreed in writing that such orders would be made. Moreover, in an email of 11 May 2018 referred to at [46] above, a solicitor from Coleman Greig wrote to Mr Wallman on behalf of all Defendants in the 2017 proceedings, confirming that each had no documents in their possession, custody or control that would fall within orders 1 and 2 of the Consent Orders. The natural inference from this email, which must be taken to have been written on instructions, is that each of the Defendants, including Mr Corry, had or were well aware of the terms of the April 2018 Orders.

Of the various documents that I have identified at [154]-[176] above as having been located on the Surface Pro, the HP Pavilion or in hard copy at the NexGen, AAA and Corry residence, the only documents in respect of which Mr Corry made specific submissions were the SOP 5.010 document and the three documents referred to at [175] above.

In relation to the SOP 5.010 document, Mr Corry submitted that, as he was shown as the author of the document, “prima-facie ownership and copy[right]” vested in him. This submission was fanciful and must be rejected. The document bears a date of 12 June 2015 and was created in the course of Mr Corry’s employment with Bova Chemist as part of his work for Bova Chemist. The fact that Mr Corry may have authored it at the time of his employment with Bova Chemist did not mean that he owned the document so created.

Next, Mr Corry submitted that the Applicants “did not adduce the original document obtained from the Vivaldi Database to substantiate the hearsay claim by Mr Bova that is a copy of a document”. The original document did not need to be adduced to substantiate the claim. The whole point of the Vivaldi Database was that it allowed organic documents such as Standard Operating Procedures to be updated from time to time, as denoted by the reference on the document discovered at Mr Corry’s house as “Version 3”. I would not expect that Version 3 necessarily still to exist on the Database. Mr Bova, in any event, undertook a double check of the Vivaldi Database on 22 July 2020 prior to his cross-examination to confirm that statements made in his Affidavit as to various documents being created from that database were correct. He had prepared a schedule or list of documents against which he had placed a tick or a cross denoting whether or not he had been able to locate in the Vivaldi Database the same or very substantially similar documents as those seized following the search of the various premises. This list was called for and tendered by Mr Corry. It became Ex N. One of the documents which Mr Corry confirmed as being on the Vivaldi Database was the SOP 5.010 document.

I would, in any event, have had no difficulty in inferring that the SOP 5.010 document was created using the Vivaldi Database, in the sense that it was copied from a document in that database. The whole purpose on the evidence of Bova Chemist acquiring and using the Vivaldi Database was to house operating procedures so that staff could access them when required, and they were kept in a central, accessible repository. Mr Bova was not cross-examined in relation to his evidence that the document in question was created from the Vivaldi Database in the sense that it was a copy of a document housed in that database.

In relation to the three documents referred to at [175] above which were located at AAA’s premises, namely:

The Applicants advanced no reply to this submission and, bearing in mind that I must be satisfied beyond reasonable doubt, I do not find that these three documents were documents which were required to be delivered up by the April 2018 Orders. To the extent that Mr Bova had asserted in his Affidavit that these three documents were copied from the Vivaldi Database, I cannot accept that evidence.

Mr Corry sought to mount an attack on Mr Bova’s credit, contending that Mr Bova was not honest in his evidence-in-chief in relation to these three documents, and made reference to Mr Bova’s evidence that he was aware of the contents of the Vivaldi Database because he regularly checked it (T316.25-39) and that he checked it before he swore his 20 December 2019 affidavit (T316.25-39). These references were not as general as Mr Corry’s submissions suggested. In the passages referred to, Mr Bova was being cross-examined by Mr Hyde (for Mr Ghaly) in relation to an entirely different document, and Mr Hyde’s questions and Mr Bova’s answers were directed towards a particular document which was not one of the three documents that Mr Bova had been unable to locate on the Vivaldi Database.

I reject Mr Corry’s submission that Mr Bova was not honest in his evidence-in-chief. It does not follow from my inability to be satisfied beyond reasonable doubt that three particular documents were not copied from the Vivaldi Database that they were not, in fact, on that database (Mr Bova’s evidence as to when it was acquired – “around 2015 I think” – was far from definitive) and, even if the documents were not in fact copies of documents on the database, Mr Bova may simply have been mistaken in his understanding that they had been.

More generally, in other parts of his written submissions, Mr Corry sought to criticise Mr Bova’s evidence as to the similarities between Bova documents and documents seized as a result of the Second Search Order (see, for example, T369-372). Whilst Mr Corry’s cross-examination of Mr Bova sought to challenge some of his evidence, this cross-examination only served to reinforce Mr Bova’s evidence. He did not retreat from it, nor was any evidence led by Mr Corry which called Mr Bova’s evidence into serious question. I would also reject a submission made by Mr Corry that Mr Bova was “evasive” in his evidence. The particular cross-examination in this regard related to modification of certain dates on documents: see T346-348. Mr Bova did seek clarification from time to time as to precisely what Mr Corry was putting to him by way of cross-examination, but I did not consider this to be at all evasive, but rather motivated by a concern to attain clarity as to particular questions and not to have words put into his mouth by Mr Corry’s attempted paraphrasing of certain of Mr Bova’s answers.

It should be noted that, even though I am not satisfied beyond reasonable doubt that the three documents referred to at [175] were copied from documents on the Vivaldi Database, their discovery at AAA’s premises may be relevant to the Second Corry Charge and dealt with below, relating to use of Bova Chemist’s Confidential Information, as that term was defined in para 5(c) of the Statement of Charge.

Other than in respect of the three documents referred to at [175] above, I am comfortably satisfied beyond reasonable doubt that, in wilful disobedience and contravention of the April 2018 Orders, Mr Corry retained in his possession, custody or control the PK Software and the Vivaldi Database; documents which were created using the PK Software or derived from the Vivaldi Database; and various hard copy documents listed in the Statement of Charge.

The PK Software was located both on the Surface Pro and the HP Pavilion. I have already referred at [154]-[176] above to the very significant body of information and documents derived from the PK Software and the Vivaldi Database located both physically and on the Surface Pro and HP Pavilion in consequence of the execution of the Second Search Order at the NexGen premises, AAA’s premises and the Corry residence.

Mr Corry has taken the valid point that the Consent Orders in referring to the PK Software and the Vivaldi Database incorporated the definition of those terms in the Statement of Claim in the 2017 proceedings. He pointed out that the definition of PK Software was “information contained in the PK Compounding Software” and the Vivaldi Database was defined as “information contained in the Vivaldi Software Database” in aid of a submission that “that the actual software is not [the] subject of order 1 and 2” of the April 2018 Orders and that, “[t]herefore, the PK Software and the Vivaldi Software are not retained unlawfully.”

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.

In my opinion, there was nothing accidental about Mr Corry’s retention of the PK Software and the Vivaldi Database as defined, and the documents specified in the Statement of Charge. The April 2018 Orders were clear.

The retention of the PK Software and the Vivaldi Database as defined and the documents specified in the Statement of Charge was in brazen disregard of both the First Settlement Deed and the April 2018 Orders. Mr Corry’s conduct upon learning of the Second Search Order and directing Mr Ghaly to remove computers and documents from NexGen’s premises on the morning of the execution of the Second Search Order, as described earlier in these reasons, was consistent only with an acute appreciation by Mr Corry that there was a vast amount of data, information and documentation that he and Mr Ghaly had retained without any entitlement, in cold and contemptuous disregard of this Court’s earlier orders.

The moving of that material to the neighbouring AAA premises by Mr Ghaly at Mr Corry’s direction was nothing less than an attempt to conceal conscious wrongdoing on the part of both Mr Corry and Mr Ghaly. It reinforces my conclusion as to the deliberate nature of Mr Corry’s conduct which warranted my finding that the First Corry Charge has been established beyond reasonable doubt.

The Applicants also charged that Mr Corry accessed, downloaded, transferred, interfered with, disclosed, copied, exploited and/or otherwise used the Listed Things and Confidential Information owned by the Applicants. The definition of “Confidential Information” as contained in the Statement of Charge has been referred to at [253] above.

Such alleged use included the copying and/or use of Bova Chemist’s formulations to create Des/hCG.

Further, the Applicants charged that Mr Corry used and/or exploited the Confidential Information in order to generate sales of Des/hCG by NexGen and/or enabled NexGen to use and/or exploit the Confidential Information in order to generate sales of Des/hCG in circumstances where Mr Corry knew of the terms of the April 2018 Orders, and knew that on their face they prevented the use of the Confidential Information.

It was submitted by the Applicants that this conduct was contumacious.

Mr Corry submitted that this charge was both patently and latently duplicitous. It was said to be patently duplicitous because insofar as the Second Corry Charge entailed the use of Confidential Information by Mr Corry in order to enable or achieve sales by NexGen of certain products, it was in effect also charging a breach by NexGen. This submission was misconceived. The charge is confined to a breach by Mr Corry. That he was alleged to have used the Applicants’ Confidential Information in order to achieve or secure sales for NexGen was a means of demonstrating his breach.

In any event, and more fundamentally, as has already been observed in these reasons, even if a charge of contempt is duplicitous, that is no answer to such a charge.

Mr Corry also made a submission that the Second Corry Charge infringed the rule against double jeopardy. This submission was particularly elusive and was, in truth, misconceived. The proceedings are brought in this Court’s civil jurisdiction and Mr Corry has not previously been convicted in relation to any previous relevant conduct in any event.

Mr Corry also advanced an argument in his written submissions in reliance on the First Settlement Deed, to the effect that:

This submission should be rejected. The First Settlement Deed also included as one of its terms an agreement to what became the April 2018 Orders being made by consent. Those orders were of course subsequently made as part of the settlement. Whatever the reach of the release in the First Settlement Deed, it could not sensibly be construed to effect or as extending to a release of the very obligations the Defendants to the 2017 proceedings were undertaking, including by way of agreeing to orders of this Court. As will be seen later in these reasons, the position of Mr Ghaly in relation to the Second Settlement Deed is rather different.

Mr Corry’s use of Bova Chemist’s formulations to create Des/hCG for NexGen was demonstrated most obviously by the evidence led in relation to Des/hCG, especially the evidence of Mr Davidson which has been referred to at [51]-[54] above, and which I accept.

As I have noted earlier in these reasons, Mr Davidson was not challenged on his evidence that Mr Corry had said to him at a point in time after the making of the April 2018 Orders that “[t]he Surface Pro is at home and still has all the Bova formulations on it.” True it is that Mr Corry pointed to suggested inconsistencies in Mr Davidson’s Affidavit evidence, but these were either trivial or misconceived. For example, he submitted that, whilst in para 34 of his Affidavit, Mr Davidson asserted that he did not approach any clients to test a formula Des/hCG, at para 35 of the same Affidavit, Mr Davidson deposed that he did approach clients, including Scone Equine Hospital. This submission misreads or misunderstands Mr Davidson’s evidence. In para 35 of his Affidavit, Mr Davidson made it plain that he only approached clients “once the Des/hCG product was available”. The whole point of Mr Davidson’s evidence in relation to not approaching clients prior to its becoming available was that the normal consultation process was not carried out, a matter suggestive of Mr Corry already having an established formula to use for the product in question.

There is no doubt that Mr Corry had the Bova formulation for the Deslorelin Injection. It was found on the Surface Pro, and its existence and identity to Bova Chemist’s formula was demonstrated in evidence and by comparison of what was found on the Surface Pro with Bova Chemist’s formula worksheet (CB 557) and see [165]-[168] above.

This evidence is confirmatory not only of Mr Corry’s retention of Bova formulations, but his ongoing use of them.

Mr Corry made a submission that Mr Wallman conceded that the Batch Product Info document on the Surface Pro which contained Bova Chemist’s Deslorelin formula was a formulation, and then submitted that a formulation was different to “formulation lists” which was the term referred to in Order 3 of the April 2018 Orders. This submission was without merit for at least two reasons. First, the Deslorelin formulation was contained in a formulation list: see [165] above. Secondly, Order 3 of the April 2018 Orders restrained Mr Corry for a period of 4 years from accessing, downloading, transferring, interfering with, disclosing, copying, using, or exploiting any and all documents or information owned by the Plaintiffs or either of them, including … formulation lists” (emphasis added). If a distinction is to be drawn between “formulation lists” and “formulation”, Bova Chemist undoubtedly owned its Deslorelin formulation.

There is also no doubt that NexGen supplied Des/hCG to its customers. This is made plain by a series of text messages between Mr Corry and Mr Ghaly found on Mr Corry’s iPhone that was seized during the execution of the Second Search Order. These exchanges were as follows:

In addition, there was in evidence, located in the Dynamics Account that was accessed in the course of the search, a number of orders and invoices recording sales of Deslorelin between August and November 2018. There was also evidence of a sale in a text message exchange between Mr Davidson and Mr David Pascoe of Pascoe’s Oakey Vet Hospital, in which the latter confirmed that he used the Des/hCG injection from NexGen (Annexure C to Mr Davidson’s Affidavit).

It was also charged that it could be inferred from the particular conduct in relation to Des/hCG that Mr Corry copied and/or used the Applicants' formulations to create other formulations which were exactly or substantially the same as the Applicants' formulations, and/or enabled NexGen to do so.

It was submitted that the fact that Mr Corry had the PK Software and Vivaldi Databases on devices he used as part of the NexGen business was a strong indicator that he was using the Applicants’ formulations and other documents extensively in order to operate the NexGen business. In particular, it was submitted that:

In all of the circumstances, I draw the inference that Mr Corry continued to make extensive use of the PK Software and data stored on it in the ongoing business of NexGen. Mr Corry had not only taken that software and data with him when he left Bova Chemist in order to join a rival start up business in direct competition with Bova Chemist, but had retained that material notwithstanding the first set of proceedings in 2017 and the First Settlement Deed. The only purpose of taking that material in the first place and then retaining it in the face of the April 2018 Orders, was because of its obvious value for the NexGen business and Mr Corry’s determination to use it. Although the Surface Pro was located at Mr Corry’s home rather than the NexGen premises, it was in active use, and Mr Davidson’s evidence confirmed that it was being used in the NexGen business.

Mr Corry’s role in directing Mr Ghaly to remove computers and documents from the NexGen premises on the morning of the execution of the Second Search Order also supports the conclusion that it was in active use at the time of the execution of the Second Search Order.

This inference is reinforced by the statement attributed by Mr Davidson to Mr Corry in relation to NexGen’s Cisapride formula, which Mr Davidson placed as occurring in around June 2018:

Mr Corry did rely in his written submissions on an email he sent to Mr Davidson in November 2017 (Ex G) in which he stated “I have now altered the cisapride formulas to reflect the original prepulsid formulation”. He elicited from Mr Davidson evidence that Prepulsid was a commercial product not sold by Bova Chemist. Mr Corry then made reference to the NexGen formulation sheets for Cisapride Monohydrate which had been seized pursuant to the Second Search Order. He noted that these sheets were marked “Version 2” and that post-dated the November 2017 email. If the formulation had been changed in November 2017, as the email suggested, Mr Corry submitted that Version 1 could not have been based upon any Bova documentation but, rather, the original Prepulsid formulation.

I understood that the purpose of this submission was to suggest that the Cisapride products sold by NexGen were not based upon, or did not derive from, the Bova formula. There is some force to this submission, however it does not overcome the fact that Mr Corry did not put to Mr Davidson that the conversation between them did not occur in the terms Mr Davidson recalled which were consistent only with Mr Corry having retained the Bova formulation. Mr Corry did challenge Mr Davidson as to the timing of the conversation taking place in June 2018, but conspicuously avoided a direct challenge to his recollection of the words Mr Davidson attributed to Mr Corry. Although he could not be certain as to the precise date, Mr Davidson did not retreat from the terms of the conversation he recalled (T199.22-25).

The submission also does not overcome the fact that Mr Bova’s evidence was not shaken in cross-examination by Mr Corry in relation to this product: see [178] above. Nor does it overcome Mr Davidson’s other unchallenged evidence that Mr Corry said to him after the April 2018 Orders had been made that “[t]he Surface Pro is at home and still has all the Bova formulations on it”: see [292] above.

For all of the above reasons, I find that the Second Corry Charge has been established beyond any reasonable doubt.

The third charge against Mr Corry is, in my opinion, problematic. It is that:

The reference to contacting and instructing Mr Ghaly is to para 17(a) of the Statement of Charge, which is in these terms:

This in turn is a reference to the telephone conversation between Mr Corry and Mr Ghaly discussed at [92]-[95] above.

It is not suggested that Mr Corry had been served with the Second Search Order by the time of this telephone conversation. In fact, on the evidence, this did not occur until after his return to his house at about 10.30am.

On the other hand, I have found that Mr Corry became aware of the Second Search Order as a result of a telephone conversation with his wife, and that this telephone conversation occurred shortly and probably immediately prior to Mr Corry’s telephone conversation with Mr Ghaly referred to at [92] above.

There is also no doubt in my mind that the purpose of Mr Corry’s telephone conversation with Mr Ghaly was to attempt to frustrate the efficacy of the execution of the Second Search Order by means of removing material from the NexGen premises that Mr Corry, by the time of his telephone conversation with Mr Ghaly, expected were soon to be searched.

However, unlike the Fourth Corry Charge which is dealt with below and which is expressed in terms of “attempt[ing] to and/or deliberately frustrat[ing] the execution of the Search Order”, the Third Corry Charge is not so expressed.

Whether or not Mr Corry committed contempt is to be determined by reference to the terms of the particular charge(s) made against him. If that charge is not made out but there is evidence that was capable of sustaining a different charge, that is beside the point in the absence of any application to amend the Statement of Charge.

Returning to the terms of the Third Corry Charge, the contravention charged lay in the alleged breach of what was defined as the “Prohibited Contact Order”, being Order 25 of the Second Search Order that provided that:

The difficulty for the Applicants is that it was not established, and certainly not established beyond reasonable doubt, that Mr Corry was aware of the Prohibited Contact Order as a result of his telephone conversation(s) with his wife prior to his telephone call to Mr Ghaly.

When confronted with this difficulty in the course of oral submissions, Mr Dawson submitted that Mr Corry would have been aware that the Second Search Order contained a Prohibited Contact Order from his experience with and knowledge of the First Search Order in 2017. I do not think that this submission can be accepted as satisfying the requisite standard of proof. It also represents a departure from the case as charged.

Whilst a lawyer experienced with the form of the search orders may have been familiar with the fact that they will invariably include provision akin to the Prohibited Contact Order, Mr Corry was not in that category and, even if he was aware of or should be taken to have been aware that the earlier Search Order contained a clause similar to that which the Applicants defined as the Prohibited Contact Order in the Statement of Charge, it is speculative as to whether Mr Corry was aware of the Prohibited Contact Order at the time of his telephone conversation with Mr Ghaly.

Given that the Third Corry Charge is framed in terms of “wilful disobedience and contravention” of the Second Search Order entailed by a breach of the Prohibited Contact Order, such wilful conduct could not in my view be made out unless it were established beyond reasonable doubt that Mr Corry was aware of at least the substance of the Prohibited Contact Order at the time of the telephone conversation with Mr Ghaly. This was simply not established on the evidence.

The Third Corry Charge cannot be sustained.

The Fourth Corry Charge was that:

The particulars relied upon were as follows:

The Applicants submitted that Mr Corry’s conduct constituted a breach of the following provisions of the Second Search Order:

The Applicants also submitted that Mr Corry’s conduct otherwise involved a deliberate interference with the due administration of justice and brazen defiance of the Court’s authority and the orders it had made. Their closing written submission was that:

Mr Corry advanced a number of arguments in opposition to this charge. First he submitted that this charge was bad for patent and latent duplicity. As already explained in response to similar arguments advanced in respect of other charges, this is not a valid objection to a charge of contempt.

Next, Mr Corry submitted that the Fourth Corry Charge disclosed no offence known to law. The basis for this argument appeared to be that the obligations under the Second Search Order required all things necessary to be done to give access to the Search Party, coupled with a requirement to permit the Independent Computer Expert to search any computer and make a copy or digital copy. Mr Corry submitted that whilst such orders compelled a party bound to obey the order to do discrete positive acts, this was different to a person subject to the Second Search Order frustrating the “completing [of] the acts described in those orders”.

I reject this submission. The facts underpinning this charge have been set out at [132]-[140] above. To recap, at [140] I concluded that:

Changing the password or causing it to be changed is the antithesis of a requirement to permit the Independent Computer Expert to search any computer seized pursuant to the Second Search Order. That it may also be characterised as the frustration of the Second Search Order is not to the point.

Mr Corry’s submission that the fact that he had the new password and was able to pass it on to Mr Athanassios at 6.49pm on 21 February 2019 (see [136] above) only established that he had the new password and knew it had been changed at the time the email was sent, but did not establish that he caused the password to be changed, should also be rejected. This is fanciful in my view. It was Mr Corry who had sought and been denied access to the account by the Independent Computer Expert earlier in the day. It was Mr Corry who plainly wanted to have access to his email account. It was Mr Corry who had been said in court documents, including Mr Davidson’s Affidavit, to have been acting in breach of the April 2018 Orders. It was Mr Corry who had spoken to Mr Ghaly and directed him to move documents and computers from the NexGen premises to the AAA premises.

Equally lacking in merit was Mr Corry’s submission that:

I do not consider that the words used in the email point to a third party having caused the password to the account to be changed, especially in the context of the matters referred to above. It was a somewhat desperate and utterly speculative submission by Mr Corry. Mr Corry also submitted that his email to Mr Athanassios of 6.49pm on 21 February 2019 (Ex 1) set out at [136] above demonstrated the knowledge of the other directors of NexGen that the password had been changed. This submission was presumably put on the basis that Mr Corry had copied in not only Mr Ghaly, but also the other two directors of NexGen in his email to Mr Athanassios. At best, this submission shows that the other directors had this knowledge as a result of having been sent that email. It does not suggest that they knew about it beforehand, and does not support a hypothesis that it may have been one of the other directors of NexGen, other than Mr Corry, who caused the password to be changed.

Mr Corry next submitted that, given that the charge was in part at least expressed in terms of “attempting” to deliberately frustrate the execution of the Search Order, there needed to be evidence of intent and that there was no direct evidence of the requisite intention. Mr Corry made reference in this context to the decision of Brennan J in He Kaw Teh v The Queen (1985) 157 CLR 523 at 582; [1985] HCA 43.

Intention may be inferred, and will frequently need to be, in circumstances where a party does not go into evidence: Chamberlain v The Queen (No 2) (1984) 153 CLR 521 at 536; [1984] HCA 7. That does not mean that the onus of proof does not need to be discharged, but it is to say that a state of mind may be inferred from other evidence. Here, Mr Corry knew that the Second Search Order had been made and extended to material on his computers; he knew that the Independent Computer Expert was downloading that material; he knew that she had rebuffed his request for access on the advice of the Independent Solicitor, at least until the downloading by the Independent Computer Expert had concluded; and he knew that a second set of proceedings had been commenced by the Applicants making serious allegations about his non-compliance with earlier consent orders. I have found that, notwithstanding all of this, Mr Corry caused the password to be changed.

I am fortified in my conclusion that this was done with the intention of frustrating the search process by Mr Corry’s conduct on the day the Second Search Order was executed in contacting Mr Ghaly and directing him to remove records, computers and documents from the NexGen premises in anticipation of a search in those premises. Although I have found that the Third Corry Charge cannot be sustained, Mr Corry’s conduct and interaction with Mr Ghaly on that day as described at [92]-[95] above remains relevant and is consistent with an inference being available that his causing the password to be changed, when he knew that the download process was not complete, was part of an attempt by him to frustrate the process. As observed in Weissensteiner at 228:

I can see no basis for a finding that Mr Corry had an honest, but mistaken, belief as to the meaning or operation of the Second Search Order: cf Sigalla v TZ Limited [2011] NSWCA 334 at [28] (Sigalla v TZ).

I am satisfied that the Fourth Corry Charge is made out.

The sole charge against Mrs Corry is as follows:

Mr Corry, who made submissions with the Court’s leave on behalf of Mrs Corry, submitted that this charge was duplicitous by reason of the use of the expression “and/or”, and sought to call in aid authorities concerned with criminal procedure to support this contention. Mr Corry referred in particular to Sigalla for the proposition that contempt is an offence at common law (T621.26-29)

This submission presupposed that such authorities and the law in relation to criminal procedure applied. That was, however, as has been pointed out earlier in these reasons, incorrect. Even though the Applicants are alleging that the contempt is criminal, the application is brought in the Court’s civil jurisdiction, and although the Applicants accepted that the criminal standard of proof applies, questions of procedure are governed by the Civil Procedure Act 2005 (NSW) and the Uniform Civil Procedure Rules 2005 (NSW): see Dowling at [60].

In Grocon at [195], the Victorian Court of Appeal observed that:

In Matthews at [165], Basten JA quoted with approval the observation of Wilcox J in Concrete Constructions at 74, that the “principle of duplicitous pleading has no place in the law of contempt”, although his Honour emphasised, by reference to Coward v Stapleton (1953) 90 CLR 573 at 579–580; [1953] HCA 48, that “no person ought to be punished for contempt of court unless the specific charge against him be distinctly stated and an opportunity of answering it given to him”. The need for a defendant to a charge of contempt to have a sufficiently clear view of the terms or formulation of the charge so as to permit a fair trial is plain.

In my opinion, there was nothing procedurally unfair with the way in which the charge against Mrs Corry was formulated and the threshold objection based upon duplicity should be rejected.

I turn then to the substance of the charge against Mrs Corry. It is framed in alternative ways. Indeed, this was the foundation of the unsuccessful contention in respect of duplicity. Putting that to one side, however, it may be observed that the first alternative involves an alleged breach by Mrs Corry of the Second Search Order; the second alternative, namely that Mrs Corry helped or permitted Mr Corry to breach the Second Search Order is a different, though closely related, form of contempt: see Zhu v Treasurer of the State of New South Wales (2004) 218 CLR 530 at 571; [2004] HCA 56 at [121] (Zhu).

The Applicants submitted that Mrs Corry was:

The first way in which the charge was formulated was that Mrs Corry herself breached the Prohibited Contact Order. It will be recalled that Order 25 of the Second Search Order was in these terms:

The Second Search Order is expressly addressed to “Alexander Stephen Corry and Medicina Pty Ltd” immediately under the heading “Penal Notice”, and the “you” referred to in Order 25 must be taken to refer to “Alexander Stephen Corry and Medicina Pty Ltd”. This is reinforced by the fact that under the name of the addressees, the consequences of refusing or neglecting to abide by the Order, or of disobeying the Order, are specified, commencing with the phrase “If you (being the person bound by this order)”, followed by an outline of the relevant consequences.

Order 6 of the Second Search Order however extends its operation to others, requiring that it must be complied with “by you” (meaning the two addressees) and by “any other person having responsible control of the premises” specified in the order.

In addition, where Order 6 states that “[t]his order must be complied with”, it is plainly referring to the whole of the Second Search Order, including Order 25.

It was submitted that there was ambiguity or a lack of requisite clarity in the term “you” in Order 25, it being contended that it was not clear whether the reference to “you” applied to Mrs Corry. I would reject this submission. In Kirkpatrick v Kotis (2004) 62 NSWLR 567; [2004] NSWSC 1265 at [55], subsequently approved in Pang at [54]–[56] and Baker v Paul [2013] NSWCA 426 at [24] (Baker), Campbell J (as his Honour then was) observed:

I am satisfied that Mrs Corry was subject to Order 25 of the Second Search Order because she relevantly had “responsible control” of the residential premises referred to in Schedule A to the Second Search Order. Prior to the execution of the Second Search Order on the morning of 19 February 2019, Mr Mackenzie had asked Mrs Corry whether she had responsible control of the premises, and she accepted that she did, as seen at [71] above.

I am also satisfied that Mrs Corry was well aware of the fact that she was not permitted to tell any person of any of the contents of the Second Search Order, or of the fact that the proceedings had been commenced against Mr Corry. There was unchallenged evidence (which I accept) from Mr Mackenzie (see [74] above) that he outlined the prohibitions on the disclosure of the existence of the proceedings and the contents of the Second Search Order to Mrs Corry, and that he reinforced this on at least two further occasions: see [77], [86] and [102] above. This evidence was further corroborated by Ms Young’s notes (Ex 14) under the heading “9.04AM” where she records the words “Can make calls to work, daycare. Can’t disclose the order.” (emphasis in original).

I am also satisfied that Mrs Corry acted in breach of Order 25 of the Second Search Order by telling her husband of the Second Search Order and that the Search Party would be going to the NexGen premises as well. As recorded at [103]-[110] above, there was strong and contemporaneous evidence to support the finding that Mrs Corry was the source of Mr Corry’s knowledge of the issue and execution of the Second Search Order. Indeed, it was Mr Corry who told Mr Mackenzie and Ms Young in a telephone call on speaker shortly after 10.00am on the morning of 19 February 2019 that he had learnt of the Second Search Order from his wife.

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.

This submission reinforced the direct evidence from both Mr Mackenzie’s notes and those of Ms Young that Mrs Corry was the source of Mr Corry’s knowledge of the Second Search Order. Mr Corry submitted on his wife’s behalf that the Applicants had not eliminated the reasonable possibility that when the call was taken and Mrs Corry identified that it was from her lawyers, that she could have been referring to Mr Mario Rashid from Coleman Greig. The fatal difficulty with this argument is that Mrs Corry was heard saying “Hi Chris” and on a phone where his name was not shown up as the caller. There was also the point that, according to the Independent Solicitor’s Report, Mr Athanassios commenced his conversation with Mr Mackenzie by asking “when will you be commencing the search?”, a question that could only have been put if he knew of the existence of the Second Search Order: see [104] above. His source for that knowledge must have been Mr Corry whose source, in turn, can only have been Mrs Corry.

Mr Corry made a number of other submissions on his wife’s behalf in this context which I would reject. First, he submitted that his statement “My wife told me” as recorded in the Independent Solicitor’s Report as to the source of his knowledge of the Second Search Order, “should not be used as an admission in the case against [Mrs Corry].” He referred in this context to s 60(3) of the Evidence Act. Section 60 is concerned with an exception to the hearsay rule, providing that such evidence is admissible for a non-hearsay purpose, but s 60(3) provides that that exception does not apply “in a criminal proceeding to evidence of an admission”. Even if, which is not obvious, Mr Corry’s answer to Mr Mackenzie was an admission, the contempt proceedings were not a “criminal proceeding” within the meaning of s 60(3) of the Evidence Act.

Next, Mr Corry sought to point out discrepancies between the notes taken by Ms Young and those of Mr Mackenzie when they were present at the Corry residence on the morning of the execution of the Second Search Order. These differences were minor and immaterial and to be explained by the fact that Mr Mackenzie was doing most of the talking with Mrs Corry. It is scarcely surprising in these circumstances that Ms Young’s notes are more detailed and Mr Mackenzie’s were not made as a verbatim account.

Next, Mr Corry submitted that the Court required evidence as to the express terms of the conversation between him and his wife. That is not correct. There was more than sufficient evidence to establish that (i) he found out about the Second Search Order from his wife and that (ii) it could be inferred from the fact of his conversation and frantic contact with Mr Ghaly immediately thereafter, and Mr Ghaly’s actions consequent upon that conversation, that his wife had also informed him that the Second Search Order extended to the NexGen premises.

As noted above, Mr Corry sought, in making submissions on behalf of his wife, to draw a distinction between Mr Mackenzie’s account that Mr Corry said “My wife told me” when asked how he found out about the Second Search Order (see [104] above) and Ms Young’s note that, in answer to that question, Mr Corry said “I called my wife”. This distinction is subtle and elusive. The telephone records show that Mr Corry did call Mrs Corry for 180 seconds just prior to 9.40am (see [89] above). As I have found, this was the occasion when Mr Corry learned of the Second Search Order.

Mr Corry also submitted that “a simple phone call doesn’t establish a breach of order 25” and that “[t]here needs to be more than that”: T626.40-41. I accept this submission, but the evidence shows that there was more than a “simple phone call”. It followed from what Mr Corry told Mr Mackenzie and Ms Young in his call with them and Mr Athanassios just after 10am (see [103]-[104] above) that at least one aspect of the phone call involved Mrs Corry telling her husband about the fact of the Second Search Order and that it extended to the NexGen premises. As I have explained and found, this is to be inferred from the phone call Mr Corry made to Mr Ghaly immediately after his 180 second call with Mrs Corry, and which led to Mr Ghaly’s frenetic activity in removing documents and computers from NexGen’s premises, as captured on film by Mr Grant: see [96]-[101] above.

How much detail Mr Corry was told by Mrs Corry is impossible to know as neither husband nor wife gave evidence, although Ms Young’s notes record that at about 9.30am, Mrs Corry was reading the Affidavits of Mr Bova and Mr Davidson. The inference is overwhelming that what was conveyed by Mrs Corry to her husband at least included the fact that the Second Search Order had been obtained by or on behalf of Mr Bova and his companies, that it concerned documents and information relating to the possible use of confidential information of those companies in NexGen’s business, and that the Order authorised searches of both the Corry residence as well as NexGen’s business premises. In this regard, it is significant that Mrs Corry had expressly asked Mr Mackenzie at an early stage whether they (the Search Party) were also going to NexGen’s premises: see [85] and [87] above.

It was also submitted on Mrs Corry’s behalf that, because she was an employee of Medicina, she had the benefit of the release that the company secured in the Second Settlement Terms, because the release was stated to extend to Medicina’s “related bodies corporate, associated entities, officers, agents, employees and assigns.” I do not accept this argument. Even accepting that Mrs Corry was an employee of Medicina which was said to be proved by Mr Ghaly’s affirmative answer to my question as to whether Mrs Corry worked with him at NexGen, Mrs Corry’s position is quite different to that of Mr Ghaly who also relied on the Second Settlement Terms. This is because no allegations were made against Mrs Corry in the 2019 Proceedings, and she was not a party to those proceedings. Mrs Corry’s contempt, moreover, lay in her wilful disobedience and contravention of the Prohibited Contact Order. That breach had nothing to do with her employment with Medicina and could not be described as conduct undertaken in her capacity as an employee of Medicina.

It follows that I find that Mrs Corry breached the Prohibited Contact Order and did so in wilful disobedience of the Second Search Order. The Independent Solicitor had outlined the prohibitions on disclosure to her and reinforced this at least two further times prior to her communication with her husband: see [74], [77] and [102] above. I have no reason to doubt that the Independent Solicitor’s explanation to her was anything other than clear and straightforward. The prohibition on communication was not one that was difficult to grasp.

I note for completeness that part of the written submissions presented on Mrs Corry’s behalf focused on the evidence of Mr Athanassios, and criticised his evidence. My analysis of the evidence and findings in relation to the charge against Mrs Corry does not depend on the evidence of Mr Athanassios in the sense that I would have reached the same conclusion even if the evidence given by Mr Athanassios referred to at [110] above had not been given. The criticisms of his evidence in this context may be put to one side.

Turning to the second and alternative way the charge against Mrs Corry was framed, namely that Mrs Corry “helped or permitted” Mr Corry to breach the Prohibited Contact Order or to frustrate the Second Search Order by informing him about the Second Search Order, whilst on the one hand I have found that it was Mrs Corry who informed her husband that the Second Search Order had been issued and that it was this that prompted his immediate communication with Mr Ghaly which served to frustrate the execution of the Second Search Order, on the other hand and consistent with my finding in relation to the Third Corry Charge (see [307]-[320] above), Mr Corry’s communication to Mr Ghaly cannot have been a breach of the Prohibited Contact Order in circumstances where I am not satisfied to the requisite standard that he was aware of that aspect of the Second Search Order at the time of that communication.

I note for completeness that in the Applicants’ submissions in reply, the submission was made that Mrs Corry’s “conduct constituted a contempt, in that she knew of the Second Search Order and caused that order to be thwarted, thereby knowingly impeding or interfering with the administration of justice”. Reference was made in this regard to numerous decisions including CCOM Pty Ltd v Jiejing Pty Ltd (1992) 36 FCR 524 at 530- 531; Reid v Howard (1993) 31 NSWLR 298 at 308-309; Zhu at 571-572; Sigalla v TZ at [14]-[17] and Baker at [20]. Whilst Mrs Corry’s conduct may well have met this description, it was not the way the charge against her was formulated and the Applicants are not permitted to go beyond the way they formulated the charge.

Accordingly, I am satisfied beyond reasonable doubt that the first but not the second way in which the charge against Mrs Corry was formulated is sustained beyond reasonable doubt. I also reject any case based on Mrs Corry’s conduct that does not reflect the formulation of the charge in the Statement of Charge.

It is important to appreciate that, whilst much attention at the trial was focused on Mr Ghaly’s actions on the morning of the execution of the Second Search Order as I have noted at [92]-[101] above, Mr Ghaly was not charged with contempt for his role in removing various items and computers from NexGen’s premises and taking them to the AAA premises immediately adjacent to the NexGen premises.

The precise charge against Mr Ghaly was as follows:

One superficial difficulty with the formulation of the charge against Mr Ghaly in the Statement of Charge was that the capitalised term “Listed Things” was nowhere defined in the Statement of Charge, although paragraph 17(a) of the Statement of Charge does refer to “the Listed Things referred to in the Search Order”. Similarly, para 19 refers to “the Listed Things specified in the Search Order”.

It was tolerably clear that the reference to “Listed Things” in the Statement of Charge against Mr Ghaly was both intended to be, and understood by him and his counsel as being, a reference to the “things” listed in the Second Search Order. Indeed, the Second Search Order contains a definition of “listed things” which was “any thing referred to in Schedule A to this order”.

Moreover, the reference in the Statement of Charge to “as particularised above” was a reference to para 11 of the Statement of Charge which stated that, in breach of the April 2018 Orders, Mr Ghaly retained some 13 documents on his Mac Book which was obtained from the search of the AAA premises. To the extent that a point was sought to be taken with regard to the absence of a definition of “Listed Things” in the Statement of Charge, it was without merit.

Of the 13 documents referred to in para 11 of the Statement of Charge, the Applicants ultimately only pressed the charge against Mr Ghaly in respect of five of these documents. Of these five documents, Mr Ghaly conceded that three documents fell within the ambit of the April 2018 Orders and had been retained by him (albeit, he contended, inadvertently) whilst two documents were disputed.

Mr Ghaly’s claim inadvertently to have retained these three documents was relevant to whether or not a charge of criminal contempt could be made out because, as noted above, for a contempt of that character to be made out, it needs to be established that a breach of the Court’s orders was not innocent or inadvertent but, rather, was contumacious.

The two documents referred to in the Statement of Charge and pressed against Mr Ghaly, but disputed by him to have been documents that were required to have been produced by reason of the April 2018 Orders, were:

It was submitted on Mr Ghaly’s behalf with respect to Document 3 that the Court would not be satisfied that it was required to be delivered up pursuant to the April 2018 Orders because:

The reference to Mr O’Leary’s Affidavit was to an Affidavit that was affirmed on 8 November 2017 in the 2017 Proceedings. It became Ex L in the current proceedings.

It was also submitted in relation to Document 3 that evidence from Mr Bova that the attachment to Document 3 was a SOP created using the Vivaldi Database because it said “BOVA” and looked exactly like a document out of the Vivaldi Database was of little weight in light of Mr Bova’s evidence that:

In relation to Document 8, it was submitted that the Court would not be satisfied, to the relevant standard, that the attachment to Document 8 was a document that was required to be delivered up pursuant to the terms of the April 2018 Orders, because:

Before considering the debate in relation to Documents 3 and 8 and Mr Ghaly’s claim that his retention of Documents 1, 6 and 9 was inadvertent, it is necessary to consider a more fundamental objection raised to the charge against Mr Ghaly by reference to the settlement that Mr Ghaly had entered into with the Applicants in relation to the 2019 Proceedings on 5 June 2019, as detailed at [146]-[153] above. In the 2019 Proceedings, as has been noted, the Applicants as Plaintiffs had sought as against Mr Ghaly a declaration that he had breached the April 2018 Orders, as well as damages and injunctive relief. As has also been noted earlier in these reasons, a mediation took place between the Applicants and all of the Defendants to the 2019 Proceedings, other than Mr Corry, which resulted in a settlement of the proceedings.

It will be recalled that cl 15 of the Second Settlement Terms provided that:

Clause 9(b) of the Second Settlement Terms also provided for consent orders for “the dismissal of the claims against the second, third, fourth and fifth defendants set out in the statement of claim”. It was common ground that the settlement sum had been paid but that, contrary to what was contemplated by cl 9(b), no order had been made dismissing the claims against the settling defendants which included Mr Ghaly. Indeed, the Notice of Motion charging contempt was brought in the 2019 Proceedings.

In November 2019, Mr Ghaly had sought to have the contempt proceedings brought against him stayed. In an ex tempore decision delivered on 26 November 2019, revised and reissued on 29 November 2019, Parker J declined in the exercise of his discretion to grant the stay of proceedings sought by Mr Ghaly: see NHB Enterprises Pty Ltd v Corry [2019] NSWSC 1659. His Honour considered that it was not appropriate to deal with the matter in the summary fashion sought by Mr Ghaly: at [31]. His Honour went on to observe at [35]-[37] that:

Parker J also appears to have understood the argument made before him as requiring cl 15 of the Second Settlement Terms to be construed as entailing “an express promise … not to pursue criminal proceedings against Mr Ghaly for breach of the April 2018 Orders”: at [20].

In his submissions before me, Mr Hyde who appeared for Mr Ghaly did not put that cl 15 of the Second Settlement Terms amounted to a release or anticipatory settlement of the contempt proceedings (which had not been initiated at 5 June 2019), nor was it put that there was to be implied from cl 15 a covenant not to sue which would have been enforceable by injunction in equity’s auxiliary jurisdiction. It was for this reason that, like Parker J, I do not consider that s 61(2) of the Supreme Court Act 1970 (NSW) upon which Mr Hyde relied assisted his argument.

Mr Hyde did, however, emphasise that the very claim underlying the charge of contempt made against Mr Ghaly, namely retention of documents and Confidential Information in breach of the April 2018 Orders, was precisely what was alleged against Mr Ghaly in the 2019 Proceedings that were settled on 5 June 2019 and which the Applicants had promised would be dismissed pursuant to cl 9(b) of the Second Settlement Terms. This meant, it was submitted, that the claims made in the 2019 Proceedings of breach of the April 2018 Orders could not be repeated or relied upon as between the settling parties in the contempt proceedings.

In his written submissions, Mr Hyde contended that:

Mr Hyde submitted that his argument would not preclude the Court, of its own motion if so minded, from charging Mr Ghaly with contempt of court on the basis of any breach of the April 2018 Orders, citing, in this respect, the decision of Perram J in Geneva Laboratories Limited v Prestige Premium Deals Pty Ltd [2016] FCA 1441 (Geneva Laboratories). Mr Hyde contended, however, that the Applicants, having released and discharged Mr Ghaly from their claims that he had breached the April 2018 Orders, could not themselves bring proceedings for contempt of court based on those same claims. That, it was submitted, was the effect of the release and discharge. In this context, it was not in doubt, in my opinion, that the contempt claim against Mr Ghaly was founded on the same underlying claims that had been made against him in the 2019 Proceedings.

Mr Hyde emphasised that the current proceedings were brought in the Supreme Court’s civil jurisdiction, even though criminal contempt was charged. This characterisation was consistent with the Court of Appeal’s judgment in Dowling.

Mr Dawson sought to counter this argument, contending that it was a repetition of the argument that had been rejected by Parker J in the earlier interlocutory judgment (albeit that it was, correctly, not submitted that Mr Ghaly was precluded by that decision from making it). Although there were elements of that argument that were repeated – for example, that based upon s 61 of the Supreme Court Act – the argument advanced before me was more refined. It was also submitted by Mr Dawson that the cross-examination of Mr Ghaly and his understanding of the mediation had some relevance to the argument.

Mr Dawson also emphasised the fact that the contempt application had not been made nor foreshadowed prior to the parties entering into the Second Settlement Terms, and that this indicated that it was not within the contemplation of the parties at the time they agreed upon the Second Settlement Terms that the release and discharge would extend to contempt proceedings against Mr Ghaly. He referred in this regard to Grant v John Grant & Sons Proprietary Limited (1954) 91 CLR 112; [1954] HCA 23 (John Grant).

In summary, the Applicants contended that cl 15 of the Second Settlement Terms could not and did not have the effect of releasing Mr Ghaly from, or preventing the Applicants from prosecuting, the contempt charge against him. They emphasised that:

The effect of the settlement of the claims in the 2019 Proceedings against Mr Ghaly was, in my opinion, that the Applicants could not assert as the foundation for their contempt claim against him, his failure to comply with the April 2018 orders. This was the legal effect of the compromise, and the Applicants thereafter could not and cannot be heard to say, whatever be the true state of affairs, that Mr Ghaly had failed to comply with the April 2018 Orders.

In Prudential Assurance Co Ltd v McBains Cooper [2000] 1 WLR 2000 at 2005 (Prudential Assurance), Brooke LJ, with whom Peter Gibson and Robert Walker LJJ agreed, said:

The most recent edition of D Foskett, Foskett on Compromise (9th ed, 2020, Sweet & Maxwell) at 95 states that:

In Knowles v Roberts (1888) 38 Ch D 263 at 272, referred to in Prudential Assurance at 2005, Bowen LJ observed that the effect of a compromise was that a party to it could not “raise again every single matter which was the subject of dispute before”. His Lordship said at 272 that “[a]s soon as you have ended a dispute by a compromise you have disposed of it”, and that a party was precluded from raising “the matters which were the subject of the previous dispute”. It may be noted that this language is broader than the “causes of action” which formed the basis of the previous dispute.

The compromise in the present case was sufficiently broad, in my opinion, to preclude the Applicants from maintaining the contempt charges against Mr Ghaly. This was not because there was a release in terms against such charges, but the compromise put an end to the dispute between the parties inter se as to whether or not Mr Ghaly had retained documents contrary to the April 2018 Orders.

I am reinforced in this view by cl 9(b) of the Second Settlement Terms which contemplated that orders would be made by consent dismissing the claims made against Mr Ghaly in the Statement of Claim. Although no such orders have been made, equity would treat them as having been made and the terms of cl 9(b) itself bear upon the proper interpretation of cl 15 and what was intended by it. What was contemplated would be dismissed once and for all was the Applicants’ contention that Mr Ghaly had breached the April 2018 Orders. A declaration to that precise effect had been sought, and the conduct which would have founded that declaration was the “foundation” for the contempt charge against Mr Ghaly: cf. Port of Melbourne Authority v Anshun Proprietary Limited (1981) 147 CLR 589 at 603; [1981] HCA 45.

The making of a consent judgment engages the principle of res judicata notwithstanding that in some cases it may be difficult to say what was necessarily decided by the judgment: see Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 508; [1988] HCA 21 per Deane, Toohey and Gaudron JJ. The effect of the res judicata is not only to preclude the agitation of the same cause of action that had been resolved by the consent judgment, but also the issues determined or taken to have been determined by it. In Isaacs v The Ocean Accident and Guarantee Corporation Ltd (1957) 58 SR (NSW) 69 at 75 (Isaacs), Street CJ and Roper CJ in Eq observed that:

The decision of Vaughan Williams J in In Re South American and Mexican Company; Ex parte Bank of England [1895] 1 Ch 37 at 42 was cited with approval by Barrett J (as his Honour then was) in Land Enviro Corp Pty Ltd v HTT Huntley Heritage Pty Ltd (2008) 72 NSWLR 160 at 175; [2008] NSWSC 185 at [63]. His Honour (at [64]) also referred to and followed Isaacs. At [61] of his judgment, Barrett J observed that:

To similar effect, namely that a consent judgment can give rise to an issue estoppel, is the decision of the NSW Court of Appeal in Ekes v Commonwealth Bank of Australia (2014) 313 ALR 665; [2014] NSWCA 336 at [111] per Bathurst CJ (with whom Beazley P and Emmett JA, as his Honour then was, agreed). Referring to Blair v Curran (1939) 62 CLR 464 at 531-532; [1939] HCA 23, the Chief Justice noted that “[a]n issue estoppel will only arise in respect of those matters which a primary decree, order or judgment necessarily established as the legal foundation for the decision and nothing but that which is legally indispensable to the conclusion is thus finally closed or precluded”: at [112]. His Honour also noted that the subjective motivation of the parties to the consent judgment was irrelevant and that the question of its effect was objective: at [115].

In Tomlinson v Ramsey Food Processing Pty Limited (2015) 256 CLR 507; [2015] HCA 28 at [20]-[21] (Tomlinson), a plurality of the High Court explored the difference between res judicata and issue estoppel as follows:

In my opinion, whether or not what was intended by cl 9 of the Second Settlement Terms to be a consent judgment was to be characterised as giving rise to a res judicata in the strict sense as described in Tomlinson as well as to an issue estoppel on the question of whether or not Mr Ghaly had breached his obligations created as a result of the April 2018 Orders, the Applicants were prima facie precluded from raising his breach of that obligation as a foundation for the subsequent contempt proceedings.

This conclusion does not turn on the evidence referred to at [148] above as to what was said during the mediation. To that extent, I accept the Applicants’ submission as to the relevance of that evidence. Nor does it depend on the principles of equitable estoppel which the Applicants addressed in detail in their supplementary written submissions in reply. Nor, importantly, did the Second Settlement Terms need to make any reference to future contempt proceedings.

The only potential qualification to this conclusion would be if there were some consideration of public policy arising from the fact that the charge against Mr Ghaly was for criminal contempt that operated to preclude his entitlement to rely upon the principles of res judicata and/or issue estoppel. In my opinion, there were none, and a consideration of authority supports this conclusion.

The first point to be made, which has been made throughout this judgment, is that the charges of contempt are brought in this Court’s civil jurisdiction: see Dowling.

Mr Hyde, on Mr Ghaly’s behalf, made reference to the decision of Merkel J in Louis Vuitton Malletier SA v Design Elegance Pty Ltd (2006) 149 FCR 494; [2006] FCA 83. His Honour accepted that, where the breach of a Court’s order gives rise to both private claims for relief and claims for contempt, then the private claims, at least, may be compromised: at [44]. Mr Hyde accepted that at [40]-[43], Merkel J raised the possibility that the private settlement of a contempt claim might still raise issues of public concern, but at [44], Mr Hyde indicated that his Honour did not go so far as to find that claims for contempt resulting from breach of a court order could not be compromised or settled.

Even if the compromise agreement in terms purported to release Mr Ghaly from any future contempt proceedings, such an agreement would not have been contrary to public policy. That follows from the High Court’s early decision in Kerridge v Simmonds (1906) 4 CLR 253; [1906] HCA 66 (Kerridge). In that case, the High Court held that a compromise of a dispute which had involved criminal proceedings for defamation was not contrary to public policy. Griffith CJ made reference to the judgment of Denman CJ in Keir v Leeman (1844) 6 QB 308, and that of Tindal CJ in the same case, when taken to the Court of Exchequer Chamber, where it was said (see Keir v Leeman (1846) 9 QB 371 at 395) that:

At Kerridge at 259, Griffith CJ made the point that an “agreement by an individual not to prosecute can only bind himself, and cannot prevent the assertion of the rights of the public by anyone else…”. This was the same point made by Perram J in Geneva Laboratories. The Chief Justice cited authorities where cases of oral slander and common assault were compromised even though they could have been dealt with by criminal prosecution. Griffith CJ expressed his ultimate conclusion (at 260) as follows:

Barton J was in agreement with Griffith CJ in Kerridge. His Honour emphasised that, when the case law made reference to matters in which the public had an interest, it was referring to wrongs committed against the public as well as against an individual: at 262. Higgins J, too, was of the same opinion as the Chief Justice. His Honour saw the matter as one of common sense: at 263.

In Geneva Laboratories, the question before Perram J was whether the Court should proceed to deal with the First and Second Respondents for contempt of Court or whether, there having been an inter partes settlement of the Applicants’ contempt charge against them, the matter should be left to rest. The learned judge drew attention to the statement in Witham at 533 that “the ‘penal or disciplinary’ jurisdiction [to punish for contempt] may be exercised even when the parties have settled their differences and do not wish to proceed further” (emphasis added).

Implicit in this statement was that private parties to proceedings for contempt of Court may settle their differences. There was no suggestion in Witham that such a settlement was contrary to public policy: see also Canadian Transport (UK) Ltd v Alsbury (1952) 7 WWR (NS) 49; [1953] 1 DLR 385, cited by the Court in Witham, which appeared to accept that parties may settle or compromise a claim for contempt of Court, albeit that such a settlement would not prevent a court from dealing with the same contempt of its own motion. It was for this reason that Perram J noted that the critical word in the sentence quoted from Witham and extracted above was “may”.

The fact that, in the present case, the contempt application was not on foot at the time of the Second Settlement is not to the point for the reasons given at [393]-[404] above. The cases referred to in the preceding six paragraphs demonstrate that an agreement which has the effect of bringing to an end a claim for contempt of Court inter partes is not contrary to public policy. To the extent that Parker J expressed reservations about the ability of Mr Ghaly to rely on the Second Settlement Terms, that was in the context of an application for summary dismissal which was dealt with ex tempore and in which his Honour did not have the benefit of full argument.

It follows that, notwithstanding that the claim against Mr Ghaly is for criminal contempt in the sense of an alleged contumacious breach of court orders, it is brought in this Court’s civil jurisdiction (as reflected in the fact that the Notice of Motion was filed in the 2019 Proceedings) and was capable of being compromised, such a compromise not being contrary to public policy. Clause 15 of the Second Settlement Terms had the effect of discharging and releasing Mr Ghaly from the underlying claims in the 2019 Proceedings, namely that he breached the April 2018 Orders, and the effect of this release was that the Applicants were precluded from advancing a claim for contempt against him founded on the same allegation or claim. That that was the intended effect of cl 15 of the Second Settlement Terms, objectively ascertained, was confirmed by cl 9 which contemplated that consent orders would be made by the Court dismissing the claims against Mr Ghaly.

Although such consent orders have not been made, equity would treat that which ought to have been done as done. A dismissal of proceedings, even by consent, generates a res judicata or issue estoppel against the plaintiff to those proceedings in respect of the matters there alleged.

For these reasons, Mr Ghaly’s objection to the pursuit of the narrow contempt claim against him was a good one, and the charge should be dismissed for that reason. Prima facie he is entitled to his costs as following the event, but I will hear the parties on that issue.

In the event that I am wrong in my conclusion as to the effect of cl 15 of the Second Settlement Terms, it is appropriate that I express a contingent view as to whether Documents 3 and 8 were retained in breach of the April 2018 Orders, and whether or not any retention (including of the admittedly retained Documents 1, 6 and 9) was inadvertent, as Mr Ghaly maintained.

With regard to Document 3, the real issue was whether or not it was a document that was from the Vivaldi Database. It was not recorded as such when the O’Leary Affidavit was affirmed for the purposes of the 2017 Proceedings. On the other hand, Mr Ghaly appeared to accept under cross-examination that the document was a Standard Operating Procedure from the Vivaldi Database: (T497.32-35 and T499.12-15) although it must be said that at other points in his evidence, he said he did not know whether it was on or came from the Vivaldi Database. He also indicated that it was simply a Microsoft Word Document: T498.28.

Reliance was placed on Mr Bova’s evidence that he had tried to search for the SOP by title and was unable to find it in the Vivaldi Database, but that when he used a keyword search, he found the exact document with a different title. He said the document was “word for word exactly the same” and that just because the SOP he had checked it against had a date of 16 April 2018 did not mean that that was the date it had been originally created: T385.17-22. Mr Bova’s evidence was that the SOP was not in the table of contents exhibited to the O’Leary Affidavit because the SOP number had been changed after November 2017: T387.30-42.

The evidence in relation to Document 3 was “messy”, to say the least. It began with what was in truth little more than an assertion by Mr Bova based upon the format of the document and its nature as a SOP. The evidence was improved by some further checking he undertook in the course of the hearing and for the purposes of his evidence, but still involved elements of assertion. Whilst I am of the view that Document 3 was likely to have been on the Vivaldi Database and hence was caught by the April 2018 Orders, notwithstanding Mr Ghaly’s evidence that I have highlighted at [418] above, I am not able to be satisfied of this beyond reasonable doubt.

With regard to Document 8, again I am unable to conclude that the spreadsheet attached to the email of 7 March 2017 came from the PK Software and as such was required to be delivered up pursuant to the April 2018 Orders. The entirety of the evidence in relation to this document was as summarised at [379] above. It rose no higher than evidence that the document may have derived from either point of sale data or the PK Software, and Mr Ghaly was not sure of which source.

It remains, then, to consider whether Mr Ghaly’s retention of Documents 1, 6 and 9 was inadvertent.

Mr Ghaly’s claim to inadvertent retention was vigorously attacked by Mr Dawson on behalf of the Applicants on the basis that the evidence disclosed that, in addition to the 13 documents referred to in para 11 of the Statement of Charge, Mr Ghaly had retained on both his Large and Small MacBook computer a significant number of other documents created using the Vivaldi Database and the PK Software, which were required to have been delivered up pursuant to the April 2018 Orders.

The Applicants submitted that although these documents did not form part of the charges against Mr Ghaly in the Statement of Charge, the fact that he had those documents on both MacBooks established that:

Mr Ghaly’s claimed inadvertence in relation to the retention of the three documents the subject of the charge was also sought to be met by a vigorous challenge as to Mr Ghaly’s credibility which included, but was not confined to, his role in urgently ferrying material from NexGen’s premises to AAA’s premises on the morning of 19 February 2019 and his evidence in relation thereto.

I do not accept Mr Ghaly’s claim that his retention of these three documents was inadvertent. Had they been the only three Bova Chemist documents found on his MacBook computers, that claim may have had more plausibility. But they were not. The Applicants demonstrated through the evidence of Mr Bova, their cross-examination of Mr Ghaly and in final submissions, that Mr Ghaly had retained very valuable Competitor Analysis documents created using the PK Software on his Small MacBook: see [184]-[186] above.

The fact that his retention of these documents was not the subject of the Statement of Charge, whilst perhaps curious, did not mean that these further documents were irrelevant. Their retention bore on the likelihood or otherwise that Mr Ghaly’s retention of the three documents in question was intentional or, as Mr Ghaly claimed, inadvertent.

My conclusion that the retention of Documents 1, 6 and 9 was not inadvertent is supported by the adverse view I formed as to Mr Ghaly’s credit.

Elements of Mr Ghaly’s evidence whilst under cross-examination were very unimpressive. For example, he claimed that he had only found out that a search party was going to arrive at NexGen’s premises after he had moved the various items from NexGen’s premises to AAA’s premises (T522 –T523). This is highly unlikely, not least because of the urgency of his activity immediately following 9.45am and a string of SMS communications between Mr Ghaly and Mr Corry’s lawyer, Mr Athanassios, from 9.59am and throughout the morning of 19 February 2019.

I also do not accept Mr Ghaly’s claim in para 30 of the First Ghaly Affidavit that “[a]t no time was I aware of the search order”. Under cross-examination, he in fact accepted that Mr Corry did tell him on the morning of 19 February 2019 that there was a search order being executed and that a search party was going to arrive at NexGen’s premises that day (T536, T522.37-49, T538). It was also submitted in support of an attack on Mr Ghaly’s credit that, when the Search Party did arrive at the NexGen premises on the morning of 19 February 2019, Mr Ghaly did not disclose to the Search Party that there was equipment in AAA’s premises next door to NexGen’s premises (T527.10-12).

The Applicants submitted, and I accept, that much of Mr Ghaly’s evidence was “clearly designed to give the Court a false impression of innocence on the part of Mr Ghaly when quite the opposite is true.” The Applicants labelled Mr Ghaly’s claims that his running between premises moving documents and computers was because it was important that there was a pharmacist on site at all times, and his claim to have been duped by Mr Corry into removing extensive materials, including his own laptops, from the NexGen premises on the morning of 19 February 2019, as “ridiculous”. I quite agree.

Mr Ghaly also claimed, under cross-examination, that he had said nothing to the mechanics at the AAA premises about why he wanted to urgently store the items in their premises and denied, contrary to what was recorded by Mr Mackenzie based on his discussions with the mechanics at the AAA premises, that he had said that he was having “women troubles”. As the Applicants submitted, the:

It is sufficient to conclude that I did not accept Mr Ghaly’s claims of inadvertent retention of documents and that, were it not for what I consider to be the preclusive effect of the Second Settlement Terms, I would have found the charge against Mr Ghaly made out, albeit limited to Documents 1, 6 and 9.

I make the following orders: