FEDERAL COURT OF AUSTRALIA Custom Security Services v C & S Systems [2007] FCA 1879 CUSTOM SECURITY SERVICES PTY LTD v C & S SYSTEMS PTY LTD T\AS COL HEALEY'S IPS SECURITY AND COLIN HEALEY ACD 26 of 2006 MADGWICK J 19 NOVEMBER 2007 CANBERRA IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY ACD 26 of 2006 BETWEEN: CUSTOM SECURITY SERVICES PTY LTD Applicant AND: C & S SYSTEMS PTY LTD T\AS COL HEALEY'S IPS SECURITY AND COLIN HEALEY First Respondent COLIN HEALEY Second Respondent JUDGE: MADGWICK J DATE OF ORDER: 19 NOVEMBER 2007 WHERE MADE: CANBERRA THE COURT FINDS THAT: 1. The second respondent was in contempt of court. THE COURT ORDERS THAT: 2. The second respondent is to pay a fine of $5000 to the Registrar within 28 days. 3. The second respondent be given liberty to apply to pay the fine by instalments over such period as any judge may in Chambers determine. 4. The second respondent is to pay the costs of the proceedings including the costs of the applicant incurred as against the first respondent. 5. The applicant be given liberty to apply, if so advised, to receive the fine or any such part of it as may be appropriate. 6. The applicant be given liberty to apply concerning any orders to be made against the first respondent including as to costs. 7. In that regard, the findings expressed against the first respondent in the reasons for these orders and the intention expressed therein to fine it are subject to any material later filed or argument later presented by the first respondent. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY ACD 26 of 2006 BETWEEN: CUSTOM SECURITY SERVICES PTY LTD Applicant AND: C & S SYSTEMS PTY LTD T\AS COL HEALEY'S IPS SECURITY AND COLIN HEALEY First Respondent COLIN HEALEY Second Respondent JUDGE: MADGWICK J DATE: 19 NOVEMBER 2007 PLACE: CANBERRA REASONS FOR JUDGMENT 1 This is an application alleging contempt of court by the respondents in respect of an undertaking given by the first respondent when an action against it was settled on 4 December 2006. At that time, the first respondent gave an undertaking that: it, its servants and agents, will not provide any security service to any customer mentioned on [a list attached to identified affidavit, except for 13 identified customers], which involves touching the keypad or otherwise interfering with the control panel of any security system of any such customer for a period of 2 years from today or during the continuance of any monitoring agreement between the customer and the applicant, whichever period is longer. 2 The first respondent was, for all practical purposes, the corporate alter ego of the second respondent, who was present at court when the undertaking was given, and there is the clearest inference that the undertaking was given on his express instructions. When I speak of that inference, and others, I am mindful that the applicant needs to establish its case beyond reasonable doubt. 3 The alleged contempts were particularised in a statement of charges. I will have attached to the written copy of these reasons a copy of the statement of charge in its original form. Such charges were all pressed, with the exception of those outlined in paragraphs 5, 7, and 13. Charges 2, 3, 4, 10, 11, and 12, have been made out in respect of a period between 4 December 2006, when the subject undertaking was given, and 31 July 2007. Charge 1 has been made out for the period from 4 December 2006 to 27 January 2007, and charges 8 and 9 have been made out in respect of the single date of 6 December 2006. 4 As will be seen, paras 1 to 6 dealt with the conduct of the first respondent, and paras 7 to 14 with the conduct of the second respondent, Mr Healy. 5 The conduct by each respondent was deliberate and repeated, and in clear breach of the undertaking. A suggestion earlier made in the proceedings that Mr Healy had been rushed into the settlement and did not fully understand it, on the material before me appears to have no substance and, beyond reasonable doubt, I reject it. 6 The attitude of the applicant is that it does not seek to have the Court do more than the bare minimum that the public interest demands to bring home to the respondents that there have been breaches of the undertaking, that they are in contempt of court, that contempt of court for deliberate breaches of such an undertaking will be seriously punished, and, by inference, that any further breach of the undertaking after these findings of contempt of court and the fairly modest amount of punishment that I am about to impose, would clearly be likely to be punished much more severely, possibly even including imprisonment of the second respondent. 7 In the circumstances, I think that a fine of $5,000 in respect of the contempt established by the various charges proven for each respondent is appropriate. 8 Because the position of the first respondent is, on the evidence before me, a little uncertain, and those instructing counsel for the applicant have had suggestions that the first respondent has been placed in administration, questions of making orders against the first respondent should be left open, and I will give liberty to the applicant to apply as to what orders, if any, should be made as to the first respondent, including as to costs. 9 The second respondent will be fined $5,000, and will be allowed 28 days to pay. The second respondent is to pay the costs of the proceedings, including costs of the applicant incurred as against the first respondent. 10 The second respondent will also be given liberty to apply to pay the fine by instalments over such period as any judge may, in Chambers, determine. 11 I will give the applicant liberty to make any application, as it may be advised, in relation to possible payment out to it of the whole or any part of the fine, or such portion of it as may be paid. 12 My earlier expressions of finding against the first respondent, and of an intention to fine, are of course subject to any further material or argument that might be produced on behalf of the company if, in the event, any effort should be made to have the orders made against it. 13 I will adopt the applicant's cost estimate of $3,500 which does not seem to me to be unreasonable. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Madgwick. Associate: Dated: 19 November 2007 Solicitor for the Applicant: J S O'Connor Harris & Co Counsel for the Applicant: Mr Salmon QC with Ms Besemeres Solicitor for the Respondent: Lander & Co Date of Hearing: 19 November 2007 Date of Judgment: 19 November 2007 ATTACHMENT A IN THE FEDERAL COURT OF AUSTRALIA AUSTRALIAN CAPITAL TERRITORY DISTRICT REGISTRY No P(ACD)26 of 2006 CUSTOM SECURITY SERVICES PTY LTD Applicant C & S SYSTEMS PTY LTD t\as COL HEALEY'S IPS SECURITY PTY LTDFirst Respondent COLIN HEALEY Second Respondent STATEMENT OF CHARGE(Order 41) AS AGAINST THE FIRST RESPONDANT: 1. On and from 4 December 2006, the First Respondent C & S Systems Pty Limited has through its servants or agents, provided security services to PAMBULA HOSPITAL, CORNER MERIMBOLA AND BRUNKER STREETS, PAMBULA, NSW 2549, which services involve or have involved touching the keypads of, or otherwise interfering with, the control panels of the security system at the said premises. 2. On and from 4 December 2006, the First Respondent C & S Systems Pty Limited has through its servants or agents, provided monitoring security services to FREDERICK and JENNY RUBLY at 4 KRISTA-LEE COURT, TURA BEACH in NEW SOUTH WALES, 2548, which services involve or have involved touching the keypads of, or otherwise interfering with, the control panels of the security system at the said premises. 3. On and from 4 December 2006, the First Respondent C & S Systems Pty Limited has through its servants or agents, provided monitoring security services to BEGA TAFE at BARRACK STREET, Filed on behalf of the Applicant by: J S O'Connor Harris & Co Telephone: (02) 6247 6077 Level 6, CPA Australia Building Facsimile: (02) 6247 0984 161 London Circuit DX:5617 CIVIC ACT 2601 BEGA in NEW SOUTH WALES, 2550, which services involve or have involved touching the keypads of, or otherwise interfering with, the control panels of the security system at the said premises. 4. On and from 4 December 2006, the First Respondent C & S Systems Pty Limited has through its servants or agents, provided monitoring security services to TARRA FORD at 151 AUCKLAND STREET BEGA in NEW SOUTH WALES, 2550, which services involve or have involved touching the keypads of, or otherwise interfering with, the control panels of the security system at the said premises. 5. On and from ABOUT JUNE 2007, the First Respondent C & S Systems Pty Limited has through its servants or agents, provided monitoring security services to the CALTEX SERVICE STATION at 277­281 NEWTOWN ROAD, BEGA, in NEW SOUTH WALES 2550, which servicesinvolve or have involved touching the keypads of, or otherwise interfering with, the control panels of the security system at the said premises. 6. By reason of the aforegoing the First Respondent breached the undertaking given by it in this Court on 4 December 2006. AS AGAINST THE SECOND RESPONDENT 7. On and from 4 DECEMBER 2006, the Second Respondent COLIN HEALEY instructed servants or agents of the First Respondent to provide security services to PAMBULA HOSPITAL, CORNER MERIMBOLA AND BRUNKER STREETS, PAMBULA, NSW 2549, which services involve or have involved touching the keypads of, orotherwise interfering with, the control panels of the security system at the said premises. 8. On or about 6 DECEMBER 2006, COLIN HEALEY instructed Brad Lees, then an employee of the First Respondent under Colin Healey's managerial supervision or control, to touch the keypads of, or otherwise interfere with, the control panels of the security system at PAMBULA HOSPITAL, CORNER MERIMBOLA AND BRUNKER STREETS, PAMBULA, NSW 2549. 9. On or about 6 DECEMBER 2006 the Second Respondent COLIN HEALEY instructed other employees of the First Respondent under Colin Healey's managerial supervision or control, to touch the keypads of, or otherwise interfere with, the control panels of the security system at PAMBULA HOSPITAL, CORNER MERIMBOLA AND BRUNKER STREETS, PAMBULA, NSW 2549. 10. On and from 4 DECEMBER 2006, the Second Respondent COLIN HEALEY instructed servants or agents of the First Respondent to provide monitoring security services to FREDERICK and JENNY RUBLY at 4 KRISTA-LEE COURT, TURA BEACH in NEW SOUTH WALES, 2548, which servicesinvolve or have involved touching the keypads of, or otherwise interfering with, the control panels of the security system at the said premises. 11. On and from 4 DECEMBER 2006, the Second Respondent COLIN HEALEY instructed servants or agents of the First Respondent to provide monitoring security services to BEGA TAFE at BARRACK STREET, BEGA in NEW SOUTH WALES, 2550, which services involve or have involved touching the keypads of, or otherwise interfering with, the control panels of the security system at the said premises. 12. On and from 4 DECEMBER 2006, the Second Respondent COLIN HEALEY instructed servants or agents of the Respondent to provide monitoring security services to TARRA FORD at 151 AUCKLAND STREET BEGA in NEW SOUTH WALES, 2550, which services involve or have involved touching the keypads of, or otherwise interfering with, the control panels of the security system at the said premises. 13. On and from ABOUT JUNE 2007, the Second Respondent COLIN HEALEY instructed servants or agents of the Respondent to provide monitoring security services to the CALTEX SERVICE STATION at 277-281 NEWTOWN ROAD, BEGA, in NEW SOUTH WALES 2550, which services involve or have involved touching the keypads of, or otherwise interfering with, the control panels of the security system at the said premises. 14. By reason of the aforegoing the Second Respondent COLIN HEALEY breached the undertaking given by it in this Court on 4 December 2006. Date: 2nd August 2007 John Patrick Harris Solicitor for the Applicant