Supreme Court New South Wales Medium Neutral Citation: In the matter of Mycorp Pty Ltd [2014] NSWSC 899 Hearing dates: 24 April, 1 and 19 May 2014 Decision date: 04 July 2014 Jurisdiction: Equity Division - Corporations List Before: Black J Decision: Determination that the charge of contempt against defendant is proven beyond reasonable doubt. Catchwords: PROCEDURE - contempt, attachment and sequestration - contempt of court - where court ordered that parties take reasonable steps to cause all cash takings for businesses to be deposited into bank accounts subject to payments to creditors and employees in cash if "required" - whether respondent had breached court order - whether respondent was an employee or creditor entitled to unpaid wages in relevant period - whether payment in cash was "required" - whether terms of court order were clear and unambiguous - whether respondent held an honest and reasonable belief. WORDS AND PHRASES - "required". Legislation Cited: - Corporations Act 2001 (Cth) ss 237 - Fair Work Act 2009 (Cth) s 323 - Landlord and Tenant Act 1948 (Vic) s 37 - Supreme Court Rules 1970 (NSW) Pt 42, 55 - Uniform Civil Procedure Rules 2005 (NSW) Pt 40 Cases Cited: - Advan Investments Pty Ltd v Dean Gleeson Motor Sales Ltd [2003] VSC 201 - Anderson v Hassett [2007] NSWSC 1310 - Athens v Randwick City Council [2005] NSWCA 317; (2005) 64 NSWLR 58 - Australian Competition and Consumer Commission v Hughes [2001] FCA 38 - Australian Consolidated Press Ltd v Morgan [1965] HCA 21; (1965) 112 CLR 483 - Australian Meat Industry Employees Union v Mudginberri Station Pty Ltd [1986] HCA 46; (1986) 161 CLR 98 - Australian Securities and Investments Commission v Sigalla (No 3) [2010] NSWSC 1076 - Australian Securities and Investments Commission v Sigalla (No 4) [2011] NSWSC 62; (2011) 80 NSWLR 113 - Baker v Paul [2013] NSWCA 426 - Beattie & Sutherland v Osman (No 4) [2009] NSWSC 834; (2009) 73 ACSR 220 - Brown v Lusk [1956] VLR 285 - De Marco v Ellis [1949] VLR 97 - Farahbakht v Midas Australia Pty Ltd [2006] NSWSC 1322 - Firstmac Fiduciary Services Pty Ltd v-Gilmour (No 3) [2013] NSWSC 570 - Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420 - Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 - Iberian Trust Ltd v Founders Trust & Investment Company Ltd [1932] 2 KB 87 - Kiely v Loose [1948] VLR 181 - Kirkpatrick v Kotis [2004] NSWSC 1265; (2004) 62 NSWLR 567 - Louis Vuitton Malletier SA v Design Elegance Pty Ltd [2006] FCA 83; (2006) 149 FCR 494 - Mareva Building Consultants v Zevon [2013] ACTCA 28 - Massoud v NRMA Insurance Ltd (1995) 62 NSWLR 657 - Microsoft Corporation v Marks (No 1) (1996) 69 FCR 117; 139 ALR 99 - Mosman Municipal Council v Kelly (No 3) [2009] NSWLEC 92 - National Australia Bank Ltd v Juric [2001] VSC 375 - Pang v Bydand Holdings Pty Ltd [2011] NSWCA 69 - Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; (1986) 160 CLR 16 - Universal Music Australia Pty Ltd v Sharman Networks Ltd [2006] FCAFC 41; (2006) 150 FCR 110 - Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525 - Wyszenko v Wyszenko [2012] NSWSC 732 Zomojo Pty Ltd v Hird (No 5) [2014] FCA 537 Category: Interlocutory applications Parties: Fred Fajloun (Plaintiff/Respondent) George Khoury (First Defendant/Applicant) Mycorp Group Pty Ltd (Second Defendant) Moonstone River Pty Ltd (Third Defendant) Summer Tides Pty Ltd (Fourth Defendant) Snowy Falls Pty Ltd (Fifth Defendant) Telnac Pty Ltd (Sixth Defendant) Representation: Counsel: M Condon SC (Plaintiff/Respondent) J C Kelly SC (First Defendant/Applicant) Solicitors: Sage Lawyers (Plaintiff/Respondent) Bamford Lawyers (First Defendant/Applicant) File Number(s): 2012/350220 Judgment 1This application is brought in proceedings by which the Plaintiff, Mr Fred Fajloun, seeks declarations that he and the First Defendant, Mr George Khoury, conducted the business of certain service stations in partnership, orders winding up the affairs of that partnership, a declaration that the affairs of several corporate defendants have been conducted in an oppressive manner and damages and other relief for breach of certain duties alleged to have been owed by Mr Khoury to the corporate defendants. The claims for breach of duties brought by the companies are brought as statutory derivative claims pursuant to leave granted under s 237 of the Corporations Act 2001 (Cth). 2By a motion filed on 12 November 2013, Mr Khoury seeks a declaration that Mr Fajloun is in contempt of an order previously made by Brereton J, to which I will refer below, in the manner particularised in a Statement of Charge; orders that Mr Fajloun repay the amount of $34,000 plus interest into the bank account of the Second Defendant, Mycorp Group Pty Ltd ("Mycorp"), and an amount of $33,999 plus interest into the bank account of the Third Defendant, Moonstone River Pty Ltd ("Moonstone"); and an order that Mr Fajloun be fined for his contempt of the Court order in such sum as the Court thinks fit. The Statement of Charge is in turn made pursuant to Pt 55 of the Supreme Court Rules 1970 (NSW) and charges Mr Fajloun that he disobeyed the Court's order by failing to take steps to cause cash takings of the BP Glenquarie Business owned by Mycorp totalling $34,000 over 17-20 July 2013 and the BP Greenfield Park Business owned by Moonstone totalling $33,999 over 17-19 July 2013 to be banked into the bank accounts for those companies and converted those amounts to his own use in breach of the Court's order. 3Mr Fajloun and Mr Khoury each gave evidence and were cross-examined in this application. Each party made submissions adverse to the credit of the other. I do not consider it necessary or appropriate to determine issues of credit in an interlocutory application of this kind and where the matter is still to proceed to a final hearing where issues of credit may be in dispute, where the application can be determined without making such findings. The factual background 4I will first set out the events that give rise to the present application. Mr Fajloun is responsible for day-to-day management of the service stations at Greenfield Park and Glenquarie, and his evidence is that he undertakes such management himself. Mr Khoury is responsible for management of two other service stations at Bankstown and Merrylands and engages other staff, including members of his family, to attend the service stations on a day-to-day basis. 5On 14 November 2012, Brereton J made orders, by consent, in the proceedings that, inter alia: "1. [Mr Fajloun] and [Mr Khoury] shall take all reasonable steps to cause all cash takings for each of the businesses operated by the Second, Third and Fourth Defendants to be deposited into the bank account for that business, save that this order shall not prevent [Mr Fajloun] and [Mr Khoury] from paying creditors (including employees) in cash, if required, on the proviso that the payer retains full records of such payments." That order was made by consent and in Mr Fajloun's presence. It is part of a wider regime provided by the orders for the operation of the four service station businesses owned by Mycorp, Moonstone and the other corporate defendants defending the proceedings. Further orders made on the same day provided a mechanism for payment of expenditures by cheque rather than cash, as follows: "2. Each of [Mr Fajloun] and [Mr Khoury] deliver to the other party, by 10am each business day morning, any cheques (including supporting invoices) required for the day to day operation of the relevant business operated by any of the Second to Fourth Defendants and managed by the party, including (without limitation, but also without admissions) the payment of rent in respect of premises leased by any of the Second to Fourth Defendants. Subject to Order 3, [Mr Fajloun] and [Mr Khoury] are to counter-sign and return the cheques by 10am the following business day. 3. Neither [Mr Fajloun] nor [Mr Khoury] be permitted to refuse to counter-sign and hand over any cheque provided by the other party, unless: (a) the cheque is in favour of a supplier of goods or services that is not required for the day to day business operations of the Second to Fourth Defendants; or (b) [Mr Fajloun] or [Mr Khoury], as the case may be, is not reasonably satisfied that there are sufficient funds in the account against which the cheque is to be drawn to meet the presentation of the cheque, where: (c) for the purposes of subparagraph (a), any works that are to be undertaken on the properties or buildings will be deemed to be a supply that is not required for the day to day operations of the businesses, and such works should be authorised by both parties before the works are undertaken." The orders made on 14 November 2012 had included, in draft, a provision for each of Mr Fajloun and Mr Khoury to be paid remuneration of $3,500 per month in respect of their respective management of the two businesses which they operated. That draft order was struck out because the parties did not reach agreement as to that matter. 6By letter dated 16 November 2012 (Ex A1 2/151), Mr Khoury's then solicitors wrote to Mr Fajloun's then solicitors noting that agreement had not been reached on 14 November 2012 for orders regarding remuneration; that Mr Khoury had not received any remuneration from the companies since August 2012, and suggesting that Mr Fajloun had paid himself amounts of $10,500 each from Mycorp and Moonstone on 17 October 2012 and requesting that Mr Fajloun draw equivalent cheques in favour of Mr Khoury. Mr Fajloun's solicitor responded on the same day (Ex A1, 2/152) that: "We note that on 14 November 2012, your client withdrew his agreement to the parties receiving remuneration from each of the businesses they manage. Accordingly, there is no current agreement for the parties to be remunerated from the Companies. If your client wishes to reinstate the orders relating to the payment of remuneration to the parties, then we will seek instructions in this regard." (emphasis added) Mr Fajloun accepted in cross-examination that he had seen a draft of his solicitor's letter rejecting the proposal by Mr Khoury that he be paid an equivalent amount to that paid to Mr Fajloun on the basis that there was no current agreement for the parties to be remunerated from the companies; he accepted that those were his instructions on that day and that was the position, as he understood it, on that day (T73). 7By an email dated 27 June 2013 (Ex A1, 2/4), Mr Fajloun's solicitor, Mr Tannous, referred to a telephone conversation with Mr Khoury's solicitor, Mr Bamford, in respect of "the payment of wages/directors fees to our respective clients in relation to the running of the service station businesses" and proposed that: "I would propose that each of our clients is to be paid the amount of $1,000 per week from each of the service station businesses they operate, as directors fees. That is, your client would be paid $1,000 per week from each of BP Bankstown and BP Merrylands, and our client would be paid $1,000 per week from each of BP Greenfield Park and BP Glenquarie. Please confirm that your client agrees to this proposal." 8Mr Fajloun thereafter drew two cheques of $1,000 each in favour of himself on the bank accounts of Moonstone and Mycorp and sent them to Mr Khoury for signature under cover of two remittance advices dated 5 July 2013 (Ex A1, 2/6-7). The suggested arrangement had not then been agreed between the parties. The relevant payment was described in the remittance advice as a "management fee". 9By email dated 10 July 2013 (Ex A1, 2/9), after he returned from leave, Mr Khoury's solicitor responded advising that Mr Khoury did not accept Mr Fajloun's proposal - that is, for payment of "wages/directors fees" to Mr Fajloun and Mr Khoury - on the basis that there may exist a substantial liability for each of Mycorp, Moonstone and another corporate defendant for employees and payroll tax, which needed to be quantified so that the proposal for payment of such fees could be assessed. The reference to such a liability reflected the fact that, at about this time, an investigation as to the extent of payroll tax paid by the relevant companies was being undertaken by the Office of State Revenue. 10On 12 July 2013, Mr Khoury's solicitor wrote to Mr Fajloun's solicitor indicating that Mr Khoury was intending to make payment of all wages to all employees of the Bankstown and Merrylands sites by cheque, with a view to ensuring award compliance and remittance of appropriate PAYG tax and superannuation and sought confirmation that Mr Fajloun would take the same approach for the Glenquarie and Greenfield Park service stations (Ex A1, 2/19). An exchange of correspondence followed by which Mr Fajloun's solicitor emphasised that Mr Fajloun would need to authorise any such payments and Mr Khoury's solicitor recognised that Mr Fajloun would be involved so far as payments were made by cheque. 11After correspondence from Mr Khoury's solicitor following up on Mr Fajloun's signature of cheques for the payment of wages of employees of the Bankstown and Merrylands sites, and at 2.25pm on 17 July 2013, Mr Fajloun's solicitor responded by email (Ex A1, 2/29) and indicated that: "I refer to your email and advise that our client is signing the wages cheques. I note that your client has failed to sign the cheques in relation to the wages that our client is paying himself. Pursuant to the Court orders, that is a legitimate expense of the businesses that our client is operating and therefore your client is required to sign them. Please ask your client to sign and return the cheques to our client, failing which, we will have no choice but to bring the matter back to Court in respect of your client's contempt. In relation to the back pay in wages, I am preparing a schedule which I will submit to you." It appears that the reference to a schedule of back pay in that email refers to a schedule relating to staff working under awards at the relevant service stations rather than to any suggestion of back pay due to Mr Fajloun (T98-T99). A dispute appears to have arisen by this point as to whether any wages paid to Mr Fajloun were expenses of the business such that Mr Khoury was required to sign cheques in payment of them. Such a dispute could appropriately have been restored to the Court for resolution. I should observe that it does not seem to me that that matter warranted Mr Fajloun's solicitor threatening a contempt application in respect of this dispute. 12By email sent at 4.45pm on 17 July 2013 (Ex A1, 2/36), Mr Khoury's solicitor responded to earlier correspondence from Mr Fajloun's solicitor stating that: "We have raised in recent emails concerns as to accruing liability for payroll tax and the proper completion of matters concerning BAS [business activity statements] and employee entitlements, [m]atters need to be attended to before your client, or ours, draws money on the any [sic] of the companies given potential duties to creditors if liabilities of any of the companies exceed assets when your client considers that the accounts of the companies do not accurately reflect the income of the companies and therefore their tax liability. These are all unknown. It is also relevant to note on 17th of October 2012, three payments with total amount $21,000 were separately transferred out from BP Glenquarie and BP Greenfield Park's accounts." The reference to the $21,000 amount is to the previous payments made to Mr Fajloun. 13By a response dated 17 July 2013, at 4.53pm (Ex A1, 2/41), Mr Fajloun's solicitor stated that: "Dealing with Item 2 only, our client is working in the businesses and would be entitled to draw a wage in the same way as any other employee. Therefore, we request that your client sign the cheques as required by the Court orders. Please confirm by 12pm tomorrow that your client will sign the cheques, failing which we will proceed to file our application to enforce the Court orders." (emphasis added) It is notable, first, that this email asserted an entitlement to draw a wage, rather than an existing entitlement for unpaid wages and, second, that it contemplated that wages would be paid by cheque, requiring Mr Khoury's signature in accordance with the Court's orders, and that any dispute as to whether the cheques were required to be signed would be restored before the Court. By a further email dated 17 July 2013, sent at 5.28pm (Ex A1, 2/44), Mr Khoury's solicitor drew Mr Fajloun's attention to his earlier letter dated 16 November 2012 to Mr Khoury's former solicitors, to which I referred above, indicating that no agreement was in place for remuneration of the directors. 14There is no factual contest as to the fact that, between 17 and 20 July 2013, Mr Fajloun did not bank an amount of $34,000 of cash takings relating to the BP Glenquarie business owned by Mycorp and between 17 and 19 July 2013 did not bank an amount of $33,999 in respect of the BP Greenfield Park business owned by Moonstone and thereafter paid those amounts to himself. The payments made to Mr Fajloun were reflected in handwritten notes made by a bookkeeper, Ms Hu, at his direction (Ex A1, 6/2206,10/4373). Mr Khoury's affidavit dated 11 November 2013 in turn establishes, by reference to the detailed daily financial information retained by the service stations, the amounts which were not deposited by Mr Fajloun from the takings of BP Greenfield Park on 17-20 July 2013 and of BP Glenquarie on 17-21 July 2013. At that time, the orders made in November 2012 had been in place for about eight months. 15On 24 July 2013, Mr Fajloun provided documents headed "weekly reconciliation reports" in respect of BP Glenquarie and BP Greenfield Park to Mr Khoury, each of which had handwritten notations at the bottom of the page referring to the payment of 34 weeks of wages to Mr Fajloun with net pay of $1,000 per week. 16Mr Khoury's solicitor wrote, on 25 July 2013, seeking the return of the cash not deposited by Mr Khoury (Ex A1, 2/48) and, responding in kind to Mr Fajloun's solicitor's earlier threat of contempt proceedings against Mr Khoury, indicating that he was instructed to commence proceedings to have Mr Fajloun dealt with for contempt. 17Mr Fajloun's solicitor responded by letter dated 26 July 2013 (Ex A1, 2/50) setting out an explanation of the basis on which Mr Fajloun claimed to be entitled to have made the relevant cash payments to himself, which was in substance maintained in this application, as follows: "... Order 1 does not preclude our client "from paying creditors (including employees) in cash, if required, on the proviso that the payer retains full records of such payments". Our client is an employee of the businesses that he manages and he has retained full records of such payments. Please find enclosed a copy of the records relating to the payments our client has made to himself." (emphasis in original) That letter identified the rationale for the relevant payments as follows: "Between the period 21 November 2012 and 22 July 2013, our client was entitled to wages for each of the business [sic] that he operates. Our client's wage is $1,000 per week after tax for each business. Our client is owed 35 weeks of wages and there are sufficient funds available in the companies for our client to pay himself the wages. We deny that our client does not have an entitlement to draw wages from the companies for the work that he is performing. In fact this wage is lower than the wages that had been previously agreed as reasonable by the parties." Mr Fajloun's solicitor in turn stated that: "[t]he Court would not expect either of our clients to be undertaking this work for free." That proposition may be correct but is not relevant to the present application. The question here is not what would have occurred, had Mr Fajloun restored any dispute as to the scope of the consent orders that had previously been made to the Court so that it could be resolved, but whether he has complied with the orders that the Court had made, having taken no step to vary them. The letter continued: "We confirm that our client does not intend returning monies that were paid to him in the form of wages to either BP Greenfield Park or BP Glenquarie. Our client is entitled to draw these monies as wages and he has accounted for them as required by the Court orders." 18That letter also enclosed documents purporting to be payroll advices for the 35 weeks over the period from 26 November 2012 to 22 July 2013, all of which had been prepared on 26 July 2013, shortly after Mr Khoury's solicitors' letter dated 25 July 2013 threatening an application in contempt (Ex A1, 2/52-77). These documents, on which Mr Fajloun does not now rely, purport to record earlier payments on dates between 26 November 2012 and 22 July 2013, with cheque number references in the form such as "FF2611", the reference to "2611" being to the purported date of payment, for example, 26 November 2012. Those documents did not accurately record the relevant position, both because payments had not been made on those dates and because they had not been made by cheque, or with a cheque number in that form. The payment summaries purportedly record the deduction of PAYG and superannuation guarantee contributions to a specified superannuation fund. There is evidence that, in fact, no superannuation payments were made in respect of Mr Fajloun at the relevant time. There is no evidence that PAYG tax was deducted when Mr Fajloun paid himself those cash takings of the companies. The applicable legal principles 19As I noted above, the Statement of Charge involves a claim for contempt brought under Pt 55 of the Supreme Court Rules. In Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd [1986] HCA 46; (1986) 161 CLR 98 at 106, Gibbs CJ, Mason, Wilson and Deane JJ observed that: "Punishment for contempt serves two functions: (a) enforcement of the process and orders of the Court, disobedience to which has been described as 'civil contempt'; and (b) punishment of other acts which impede the administration of justice, such as obstructing proceedings in Court while it is sitting or publishing comments on a pending case, which have both been described as 'criminal contempt' ... . The principal theoretical basis of the distinction is that disobedience to the process and orders of the Court in civil proceedings is said to be a civil wrong, a matter between party and party, enforcement being for the private benefit or interest of the party seeking enforcement ... . A secondary basis for the distinction is that the main purpose of sanctions for disobedience in civil proceedings is coercive rather than punitive." Their Honours nonetheless noted (at 107-108) that there was difficulty in maintaining the decision and elaborating a certain criterion for it. In Australian Competition and Consumer Commission v Hughes [2001] FCA 38, Tamberlin J similarly pointed to the rationale for punishment of contempt of court at [15] as follows: "Ultimately, in the case of mandatory or prohibitory orders made by it, the sanction which the Court has in order to enforce its decisions is the power to punish for contempt. This is the way in which the Court preserves respect for its role and the rule of law. ... Defiance of Court orders diminishes the authority of Courts and removes the incentive of parties, if such conduct is left unpunished, to comply with the requirements of the Court." That observation was recently cited with approval by Tracey J in Zomojo Pty Ltd v Hird (No 5) [2014] FCA 537 at [53]. 20A contempt is ordinarily in the nature of a civil contempt where the allegation is one of failure to comply with an order of the Court and the charge does not allege that conduct was wilful or contumacious: Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525 at 530, 538-539. Mr Khoury contends that the contempt is appropriately classified as a wilful contempt within intent to defy the authority of the Court, but does not allege that it was wilful or contumacious in the relevant sense: Anderson v Hassett [2007] NSWSC 1310 at [6]-[7]; Farahbakht v Midas Australia Pty Ltd [2006] NSWSC 1322. The criminal standard of proof applies in proceedings for civil contempt, so as to require proof beyond reasonable doubt, although the procedural incidents of a criminal trial do not apply: Witham v Holloway above at 545; Anderson v Hassett above at [2]. 21The elements which need to be established in an application seeking to establish a civil contempt arising from non-compliance with a court order were summarised by Gillard J in National Australia Bank Ltd v Juric [2001] VSC 375 at [37], in a passage followed in Advan Investments Pty Ltd v Dean Gleeson Motor Sales Ltd [2003] VSC 201 at [31] and Wyszenko v Wyszenko [2012] NSWSC 732, as requiring, relevantly, that an order was made by a court; the terms of the order were clear, unambiguous and capable of compliance; the alleged contemnor had knowledge of the terms of the order; and the alleged contemnor breached the terms of the order. 22Proof of a specific intent to disobey the Court's order is not necessary to proof of civil contempt: Australian Meat Employees Union v Mudginberri Station Pty Ltd above at 110-114, where the Court held that a deliberate commission or omission which is in breach of an injunctive order or undertaking will constitute wilful disobedience unless it is casual, accidental or unintentional, although the alleged contemnor may establish by way of exculpation that his or her default was of that character: Universal Music Australia Pty Ltd v Sharman Networks Ltd (2006) 150 FCR 110 at [15]-[18]; Anderson v Hassett above at [4] It is also not necessary for the applicant to establish that the alleged contemnor understood the true meaning of the terms of the order or that he or she was aware that his or her conduct constituted a breach of the order: Microsoft Corporation v Marks (No 1) (1996) 69 FCR 117 at 143; 139 ALR 99. The construction placed by the alleged contemnor upon the order may be relevant to the question of penalty, which is not presently before me. In Louis Vuitton Malletier SA v Design Elegance Pty Ltd [2006] FCA 83; (2006) 149 FCR 494 at [6], Merkel J observed that: "Deliberate conduct which is in breach of a Court order will constitute wilful disobedience of the order, and therefore a civil contempt, unless the conduct be casual, accidental or unintentional: see Australian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 106-107 ('Mudginberri') and 112-113. However, the disobedience will amount to a criminal contempt if it involves 'deliberate defiance or, as it is sometimes said, if it is contumacious': see Witham v Holloway (1995) 183 CLR 525 at 530. ... However, as all proceedings for contempt are now regarded as criminal in nature, all of the charges must be proved beyond reasonable doubt: see Witham at 534." 23In Witham v Holloway above at 544, McHugh J also pointed to a lack of clarity in the relationship between Pt 55 of the Supreme Court Rules and the predecessor to the contempt provisions that now appear in Pt 40 of the Uniform Civil Procedure Rules 2005 (NSW), Pt 42 of the Supreme Court Rules. The fine which is sought by Mr Khoury is available under Pt 55 of the Supreme Court Rules, but not under Pt 40 of the Uniform Civil Procedure Rules: Mosman Municipal Council v Kelly (No 3) [2009] NSWLEC 92 at [33]-[34]. While it has not been established that the order was served on Mr Faljoun or that was service dispensed with, pursuant to rules of court, Pt 55 of the Supreme Court Rules has no requirement for such service and Mr Fajloun takes no point as to service. The terms of the order 24There was no dispute in these proceedings that an order was made by a court and entered by consent on 14 November 2012 (Ex A1, 2/1). There is no issue that that the terms of the first order made by Brereton J were capable of compliance. I will address the question whether the terms of the order were clear and unambiguous below. Mr Fajloun's knowledge of the order 25There was also no dispute that Mr Fajloun had knowledge of the terms of the order. The order was made by consent when he was present in court; it was referred to in his solicitor's letter dated 16 November 2012; and he gave evidence as to taking advice in respect of his proposed course of conduct, with reference to that order, although (as I will note below) he did not fully disclose that course of conduct to his solicitor. Mr Fajloun accepted in cross-examination that he knew that the Court had made the order requiring that he bank the relevant monies and his evidence was "[t]hat's why I sought advice" (T77). Whether Mr Fajloun had breached the order 26The next matter that needs to be established in order to establish the relevant contempt is that Mr Fajloun had breached the terms of the first order made by Brereton J, in that he had not taken reasonable steps to cause cash takings for the relevant businesses to be deposited into the bank account for that business (which is self-evident, so far as Mr Fajloun had not deposited those amounts on the relevant days) and that the exception to the order, that it did not prevent him from paying creditors (including employees) in cash, if required, on the proviso that he retained full records of the payment, is not established. Mr Khoury submits, and I accept, that there can be no suggestion that the conduct in question was casual, accidental or unintentional, where it consisted of a deliberate act or series of acts of Mr Fajloun not depositing the cash takings of the business into the companies' bank accounts. Whether Mr Fajloun was an employee and entitled to back pay from November 2012 to July 2013 27Mr Fajloun contends that the payments made to him fall within the exception to the order that permit a payment to "creditors (including employees) in cash, if required". Mr Fajloun accepted in submissions that he bears the onus of establishing that exception on the balance of probabilities: Australian Securities and Investments Commission v Sigalla (No 3) [2010] NSWSC 1076 at [46]-[48]; Australian Securities and Investments Commission v Sigalla (No 4) [2011] NSWSC 62; (2011) 80 NSWLR 113 at [168]. Mr Fajloun contends that a relationship of employer and employee existed between him on the one hand and Mycorp and Moonstone on the other in the period from 21 November 2012 to 20 July 2013, as his solicitor had previously contended in his letter dated 26 July 2013, so that the payments Mr Fajloun made to himself could be properly characterised as payments to "creditors (including employees)" for the purposes of the first order made by Brereton J on 14 November 2012. 28By his affidavit dated 24 April 2014, Mr Fajloun gives evidence of a conversation with Mr Khoury, prior to the purchase of the Bankstown service station site, in which he says agreement was reached that Mr Fajloun would be paid $1,000 per week per site as a wage and he states that he thereafter received group certificates as an employee. His evidence is that the last time he received a wage payment was approximately 20 October 2011 (Fajloun 24.4.2014 [7]) and also that he received that $1,000 payment for wages from July 2011 until the dispute between himself and Mr Khoury arose in November 2011 (Fajloun 24.4.2014 [12]). 29A significant restructuring of the payment arrangements between the parties took place in mid-2011, to which Mr Fajloun refers in his evidence in a somewhat oblique manner. A new entity, Fajloun Investments Pty Ltd was incorporated on 28 June 2011 (Ex A1, 2/139) and payments were then made to a family trust known as the "FF Trust" associated with Mr Fajloun by Mycorp and Moonstone from 19 July 2011 (Ex A1, 2/141-142). Mr Fajloun's evidence is that he asked a question of Mr Khoury "why is my trust fund paying my wages" and complained that he was out-of-pocket by $1,000 per week by reason of that matter (Fajloun 24.04.2014 [11]). That question and complaint recognised that, at the relevant time, Mr Fajloun's wages were paid by the trust (implicitly, from the monies distributed by the companies to it) rather than directly by the companies. Mr Fajloun's evidence was that Mr Khoury replied: "Pull out $250 per week from each of the four sites and that should cover your wage." (Fajloun 24.04.2014 [11]) Mr Khoury denied having made any such statement (T25-26). It does not seem to me necessary or desirable to reach any finding in respect of issues of credit in that regard, at an interlocutory stage, where this application can be determined on other grounds. 30Mr Fajloun's evidence is also, in a statement admitted as a submission only, that he and Mr Khoury continued to receive "income" from the businesses after the dispute arose, until a further dispute arose in late October 2012 and early November 2012, where Mr Khoury allegedly refused to sign cheques and Mr Fajloun commenced proceedings in this Court. However, as I noted above, Mr Fajloun also accepts that he ceased to draw wages from the company in late October 2011. His evidence (Fajloun 24.4.2014 [21]), admitted as evidence of his understanding only, was also that the removal of the proposed orders for remuneration from the consent orders made on 14 November 2012, to which I have referred in paragraph 6 above: "... In my mind ... did not change either of mine or George's entitlement to receive $3,500 per service station business per month and my wage of $1,000 per week. I continued to think I was an employee of the businesses that I operated. However, as there were insufficient funds in the bank accounts of the Businesses to draw monies, I have not sought to draw it on a monthly basis, or pay my wage weekly. However, I consider myself to be a creditor of the Businesses to the extent of the income that I have not received since 17 October 2011." 31Mr Fajloun relies, in submissions, on what he contends were admissions made by Mr Khoury in the course of cross-examination that Mr Fajloun was an employee of the companies that operated the Glenquarie and Greenfield Park sites, namely Mycorp and Moonstone; that he was entitled as an employee to receive a wage in addition to a monthly payment of $14,000 at all times after mid-2011; and that he was authorised, in relation to those sites, to deal with employees as he saw fit and to pay people as he saw fit. Mr Khoury was cross-examined as follows (T25): "Q. I'm talking about the period say from 2007 - 2011: to your knowledge, he [Mr Fajloun] received group certificates, didn't he? A. Yes. Q. And he did so as an employee of the companies, didn't he? A. Yes." I give weight to that concession, so far as it goes, although it is plainly directed to the period to late 2011, when Mr Fajloun ceased to be paid wages. Mr Condon, who appears for Mr Fajloun, sought to extend that concession to the later period on the basis that Mr Fajloun is entitled to a presumption of the continuance of the contract of employment. He relied on Massoud v NRMA Insurance Ltd (1995) 62 NSWLR 657 at 661, where McLelland CJ in Eq referred to a presumption that a contract, once made, continues in existence but noted that such a presumption may be rebutted by proof of termination of a contract. Any such presumption is of a somewhat limited character. In Beattie & Sutherland v Osman (No 4) [2009] NSWSC 834; (2009) 73 ACSR 220, White J referred to the decision in Massoud and observed (at [45]) that: "The so-called presumption of continuance is not a true presumption but a description of the process of reasoning by which inferences of fact can be drawn. Whether an inference should be drawn depends on the particular circumstances and the chance or likelihood of intervening circumstances having altered the original state of affairs." 32Mr Kelly, who appears for Mr Khoury, referred in submissions to matters that displace any such presumption as including the dispute that arose between the parties; the commencement of the proceedings; the making of the Court's order; and the statement in the 16 November letter, made by Mr Fajloun's solicitor on his instructions, that there was no current agreement for the parties to be remunerated from the companies. I will refer below to the circumstances that indicate, in my view, that any contract of employment between the companies and Fajloun had lapsed prior to the period in which Mr Fajloun claimed he was an employee owed back pay, so as to seek to justify his not having banked the service stations' takings as required by the Court's orders. 33Mr Khoury was also cross-examined as to an agreement that he and Mr Fajloun would receive $3,500 per service station, amounting to $14,000 per month, and further cross-examined (T26) as follows: "Q. The $14,000 a month was not a substitute for the wage that Mr Fajloun had been receiving, was it? He was to get both, wasn't he? A. Yes. Q. And that remained the case at all times after mid-2011, correct? A. Yes." 34Mr Kelly contends that this question did not clearly put the proposition that Mr Fajloun was entitled to both payments from the trust and wages from the company at the same time, as distinct from the proposition, which was plainly correct, that he had an entitlement initially to payments from the companies and subsequently to payments from the trust, and that one did not exclude the other. It seems to me that that question did raise, and Mr Khoury did concede, an entitlement to both the $14,000 payment and the wage at the same time. However, there is a more fundamental ambiguity in the question and answer, namely that, as Mr Kelly pointed out in oral submissions, it was not specifically directed to wages paid by the relevant companies. Mr Fajloun's complaint to Mr Khoury (to which I referred above) was that, although he was continuing to receive a wage from mid-2011 to late 2011, it was being paid by his trust rather than the companies. That plainly does not establish a continued entitlement to receive wages from the companies; to the contrary, it suggests that, although wages were still being paid in that period, they were no longer being paid by the companies and that was the subject of Mr Fajloun's discontent. 35Mr Fajloun also contends in submissions that Mr Khoury asserted that Mr Fajloun's employment was terminated at the time the proceedings were commenced and that assertion should not be accepted. I do not consider that that is a fair characterisation of Mr Khoury's evidence in cross-examination, where the characterisation of "terminate his employment" was that of Mr Fajloun's Counsel, not Mr Khoury, and was not accepted by Mr Khoury, as follows (T26): "Q. From mid-2011 to date, you understand that Mr Fajloun is an employee on the two sites he manages. That's correct, isn't it? A. No. ... Q. How did you terminate his employment, Mr Khoury? A. He took a holiday, and the proceedings started. Q. That's how you say you terminated his employment, is that right? A. He was on holiday, and the proceedings started. Q. That's the best answer you can give to my question, is that right? A. Yes." 36It seems to me that Mr Khoury did not accept that Mr Fajloun was currently an employee of the companies. I also do not understand him to have accepted that he terminated Mr Fajloun's employment. His answers are equally consistent with a characterisation of events by which the restructuring of the parties' payment arrangements, the disputes between them and the commencement of the proceedings had the consequence that the previous employment relationship had ceased and Mr Fajloun's interest was now that of shareholder and director. Mr Fajloun also points out that Mr Khoury accepted in cross-examination that, if Mr Faljoun was still an employee, he would be entitled to wages (T27). That concession was properly made, but went no further than the necessary consequence of Mr Fajloun being an employee, a position that Mr Khoury had not accepted. 37Mr Fajloun also submits that the description that he attributes to Mr Khoury of the manner in which the relationship of employer and employee was brought to an end was incapable at law of effecting any such termination. That was common ground between the parties, since Mr Khoury accepted in submissions, plainly correctly, that he personally did not have the capacity to bring about the termination of the employment relationship between the companies and Mr Fajloun. That is, however, not determinative of the question of whether that relationship continued in the relevant circumstances. 38Mr Condon also submits, and I accept, that an intention to abandon a contract is not lightly to be inferred (Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420 at 431-433 per Dixon CJ and Fullagar J) and that termination in this manner requires that there be established a mutual consensus between the parties that the contract not be further performed (Mareva Building Consultants v Zevon [2013] ACTCA 28 at [22]). It seems to me that the events that occurred in this matter, including the introduction of the trust structure, the subsequent breakdown of the parties' relationship and the correspondence between solicitors as to the manner in which remuneration could continue to be paid, is sufficient to indicate such an intention. 39Several matters seem to me to support the conclusion that, irrespective of any "termination" by Mr Khoury of the employment relationship between the companies and Mr Fajloun, it had ceased by at least November 2012, when the proceedings were commenced. First, I have referred above to the restructuring by which wages previously paid by the companies to Mr Fajloun were paid by his trust from mid-2011. Assuming, without deciding, that any amounts were subsequently "pull[ed] out" by Mr Fajloun from the companies, there is no evidence that those payments were in the nature of wages, in respect of which PAYG and superannuation obligations were met. 40Second, as Mr Kelly points out, the exercise of "control" by an employer is a significant factor in establishing an employment relationship: Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; (1986) 160 CLR 16 at 28-29; Hollis v Vabu Pty Ltd [2001] HCA 44; (2001) 207 CLR 21 at [43]-[45]. At least by the time the proceedings were commenced on 9 November 2012, Mycorp and Moonstone were unable to exercise any practical control of Mr Fajloun, because Mr Fajloun and Mr Khoury were the two directors of those companies and they were deadlocked. As at November 2012, the companies had not had a directors' meeting for several years and Mr Fajloun and Mr Khoury were communicating only through their legal advisers (T15). 41Third, the letter dated 16 November 2012 from Mr Fajloun's solicitor, to which I referred in paragraph 6 above, seems to me to be consistent with, if not an admission that, there was then no arrangement in place for the payment of remuneration, including wages, to Mr Fajloun. Mr Fajloun sought, in cross-examination, to maintain that, although there was no current agreement between him and Mr Khoury in respect of the payment of remuneration, he was nonetheless entitled to a wage (T67) and to restrict the subject matter of that letter to "management fees" as distinct from remuneration (T73). Mr Tannous also sought in cross-examination to confine the subject matter of the November correspondence to directors' and management fees rather than wages (T104). Mr Fajloun submits that the letter was written in the context of a debate concerning "management fees" which had occurred in respect of the orders on 14 November 2012. However, the debate as to the orders on 14 November 2012 was itself directed to the "remuneration" that could have been paid to the parties by the companies, which would include remuneration by way of wages, and the letter from Mr Fajloun's solicitor dated 16 November 2012 was clear and unequivocal that there was no current agreement for the parties to be remunerated by the companies. 42Fourth, the terms of the discussion between Mr Fajloun and his solicitor on 26 June 2013 concerning a suggested contact with Mr Khoury's solicitor to discuss the issue of both Mr Khoury and Mr Fajloun receiving an "interim payment of $1,000 per week" for each of the two service stations they managed (Fajloun 24.4.2014 [25]-[26]) seems to me to be inconsistent with an existing entitlement of Mr Fajloun as an employee to receive that amount by wages. Mr Fajloun's evidence on cross-examination (T60) was consistent with his seeking to reach an agreement at that time for payment of a wage rather than having an existing entitlement to such a payment. The proposal put by Mr Fajloun's solicitor in the email dated 27 June 2013 (Ex A1, 2/4) was in turn put in respect of a payment of directors' fees rather than wages, although the amount was the same as the wages that Mr Fajloun now contends he was entitled to be paid. The remittance advices and cheques, also for $1,000, forwarded by Mr Fajloun to Mr Khoury for signature on 5 July 2013 described as relating to "management fees" were also in the same amount (including GST) as the amount of the wage that Mr Fajloun now says was payable to him. 43Fifth, Mr Fajloun conceded in cross-examination that the commencement of the period for which he took "back pay", in July 2013, was the next pay week after the exchange of correspondence on 16 November 2012, and that he chose that date as the commencement of the period in order to ensure that it was after the date of the correspondence (T79). Mr Kelly also points in submissions, and I accept, that any properly based claim to wages would have been based on the earliest date of an entitlement that arose from the objective facts, rather than to a date selected by reference to an exchange of correspondence between the parties. 44Sixth, the fact that an employment relationship did not exist at the relevant time is supported by the fact that the proceedings, at least as originally commenced by Mr Fajloun, did not include a claim for unpaid wages (T97). The evidence of Mr Fajloun's solicitor was that, at no stage before June 2013, did Mr Fajloun raise with him, by way of instructions or otherwise, any claim for unpaid wages or directors' fees (T96). Mr Fajloun first raised the possibility of such a claim with his solicitor in late June 2013, shortly before the conduct in issue in these proceedings and in the context of seeking advice as to whether he could "pull out a wage" from the companies (T97). It seems to me that this evidence is inconsistent with the existence of a properly based claim to unpaid wages. I do not accept Mr Condon's submission that the absence of such a claim is not significant when there "appears to be a clear entitlement to outstanding wages", because it does not seem to me that such a clear entitlement exists for the reasons that I have noted above, and the failure to advance the claim seems to me to be more consistent with a lack of factual foundation than with it being so obviously correct that it did not need to be brought. 45Mr Kelly also pointed to the absence of evidence of any of the documents that would normally exist in the context of an ongoing employment relationship, such as group certificates, evidence of PAYG tax payments and evidence of superannuation payments. Mr Khoury's evidence is that the companies made compulsory superannuation contributions on behalf of employees, but there is no evidence that tax was paid or superannuation contributions were made in respect of the monies Mr Fajloun paid to himself as "back pay" in July 2013. Although the payroll advices to which I referred in paragraph 18 purported to record the amounts of such tax deductions and contributions, all of the cash takings not deposited to the bank accounts were taken by Mr Fajloun as his "wages", leaving no cash free for the payment of tax and superannuation contributions, and there is no suggestion that other cash was withdrawn or that cheques for the payment of tax or superannuation were submitted to Mr Khoury for signature. Mr Kelly contends that the fact that such tax was not deducted and such superannuation was not paid is a strong indicator that Mr Fajloun was not in fact in an employment relationship with the companies during that period for which the "back pay' was purportedly paid. I have ultimately not placed any weight on that matter since an alternative explanation is available for this matter, namely, non-compliance with the companies' statutory obligations in respect of the payment of income tax and superannuation. 46Alternatively, Mr Fajloun contends that, if his employment contract had previously come to an end, he was entitled to retain himself and pay himself as manager of the sites. There were two difficulties with that submission. The first is that Mr Fajloun, in fact, supported the payments on the basis that they were back pay due to him and not that he had, in July 2013, retrospectively appointed himself and paid himself as manager for the period from December 2012. Second, a retrospective appointment of that kind would arguably not have given rise to a properly based relationship of creditor or employee so as to fall within the exception to the order. 47I am satisfied that Mr Fajloun has not established, on the balance of probabilities, that he was a creditor for unpaid wages or an employee of the companies during the relevant period so as to establish the exception to the order. Whether payment in cash was "required" 48In written submissions, Mr Khoury submitted that, even if Mr Fajloun was a creditor, in the form of an unpaid employee, there is no evidence that he was "required" to be paid in cash. Mr Khoury also submitted that the words "if required" are directed to a requirement for cash payment under the terms of a contract under which goods and services are to be supplied. Mr Kelly seems to me to have accepted a somewhat wider meaning for that concept in oral submissions, giving examples of circumstances where that test would be satisfied as including payments to suppliers on a cash on delivery basis or to employees where there was a contractual requirement containing a term requiring payment in cash (T110). It seems to me that the concept of "required" extends to permit a payment in cash required by commercial necessity, for example, for a delivery of petrol, if only cash would be accepted by the delivering party. 49Mr Fajloun's evidence was, in substance, that the payment in cash was "required" because that was what he required or preferred, and he does not seek not to establish any legal or commercial necessity supporting any such requirement. His affidavit evidence (Fajloun 24.4.2014 [29]) is that: "Based upon the advice received from [his solicitor] and the fact that I had always had the authority to hire employees and terminate their services without reference to George [Khoury] for the sites that I managed, I made the payments in cash which was my required method of payment. I thought that [his solicitor's]' advice was correct and I relied upon him as my solicitor." (emphasis added) 50In supplementary closing submissions, Mr Fajloun submitted (at [25]) that payment in cash to him was "required" because he "preferred a cash payment". He also submitted that payment in cash is "required" if the payee demands or desires it, regardless of whether there is an absolute legal entitlement to receive cash, and referred to the decision of Sholl J in Brown v Lusk [1956] VLR 285 at 288 to support that submission. The question in that case was whether premises were "reasonably required" for occupation, which was relevant to whether a notice to quit could be given under s 37 of the Landlord and Tenant Act 1948 (Vic). Sholl J there referred to the earlier decision in Kiely v Loose [1948] VLR 181, where Fullagar J had interpreted the term "required" as "demanded and desired", and Sholl J recognised that there was "strong authority" for that view while noting that he had "some difficulty" with it. His Honour also referred to a subsequent decision of Fullagar J in De Marco v Ellis [1949] VLR 97 which, he noted, had recognised, at least inferentially, that "the idea of need inevitably comes into the matter". These authorities were directed to the construction of the Landlord and Tenant Act 1948 (Vic) and it is by no means clear that they have any wider application. To the extent that they have any such wider application, I would prefer the approach in De Marco v Ellis above and in Brown v Lusk (at 290) that the element of "requirement" involves at least "reasonable need" for a particular course to be taken, and more than a mere request or preference that it be taken. 51I do not accept Mr Fajloun's submission that such a requirement would be established merely because the person to whom a payment is to be made requests or prefers to have that payment made in cash. It is a commonplace of commercial practice that companies choose, in their commercial interests, to make payments by cheque both for security and recordkeeping purposes, and there can be no suggestion that they are "required" to do otherwise merely because the payee prefers or requests that they do otherwise. It does not seem to me that the mere fact that Mr Fajloun preferred to be paid in cash, in a manner that could occur without Mr Khoury's approval, created a reasonable need for a payment to be made in that manner. 52In supplementary closing submissions, Mr Fajloun also developed an alternative submission, relying on s 323 of the Fair Work Act 2009 (Cth), to establish a requirement that he be paid in cash. That section requires payment of wages by one of four prescribed methods, namely cash, cheque or similar, use of an electronic funds transfer system or a method authorised under an award or enterprise arrangement. It does not follow from that section that payment by cash is required, since that section authorises alternative payments, including payment by cheque, which would have had to be signed by both Mr Fajloun and Mr Khoury in the manner contemplated by the Court's orders. Whether the terms of the order were clear and unambiguous 53Mr Fajloun also raises an issue as to whether the terms of the order were clear and unambiguous. Before a contempt of Court is established, the order must direct what is to be done in unambiguous terms: Iberian Trust Ltd v Founders Trust & Investment Company Ltd [1932] 2 KB 87 at 95 per Luxmoore J; Australian Consolidated Press Ltd v Morgan [1965] HCA 21; (1965) 112 CLR 483 at 515-516 per Owen J, with whom Windeyer J agreed at 506; Firstmac Fiduciary Services Pty Ltd v Gilmour (No 3) [2013] NSWSC 570 at [10]; Baker v Paul [2013] NSWCA 426 at [21]-[22]. In Kirkpatrick v Kotis [2004] NSWSC 1265; (2004) 62 NSWLR 567 at [55], Campbell J (as his Honour then was) observed: "In my view, the court approaches the question of whether the order is ambiguous with the caution appropriate to a type of litigation which could result in the defendant being punished - if an order is really not clear, it is unjust for someone to be punished for not obeying it. As well, though, the court approaches the question of whether the order is ambiguous on the basis that the recipient is expected to try to understand it and obey it. If a person taking that approach to the order could be in real doubt about what it meant, in a respect which is relevant to the particular charge of contempt which is brought, the charge will fail. This means that there will sometimes be orders which a grammatical analysis would show to contain a syntactic ambiguity, but which are nonetheless enforceable if it is the type of ambiguity that has no real risk of misleading. There will sometimes be orders which contain a term which has multiple meanings, but where that semantic ambiguity has no real risk of misleading. If there were to be an order addressed to a promoter of musical groups not in any way to be involved in the advertising or promotion of a band under some particular name, the order would be enforceable notwithstanding that a "band" can sometimes be a rubber band, or a headband." That observation was cited with approval by Beazley JA (McColl JA and Lindgren AJA agreeing) in Pang v Bydand Holdings Pty Ltd [2011] NSWCA 69 at [54]-[56] and by Meagher JA (with whom Barrett and Gleeson JJA agreed) in Baker v Paul above at [24]. 54However, as Lindgren J noted in Microsoft Corporation v Marks above at 143, the proposition that an order must direct what is to be done in unambiguous terms does not have the consequence that "there is no breach wherever there is difficulty in the construction of the terms of an order or injunction which it falls to a court to resolve", or that a contempt will not be found where the alleged contemnor did not understand the terms of the order or injunction according to their true meaning, or where he or she was unaware that his or her conduct constituted a breach of the order or undertaking. In the present case, it seems to me that there is, in truth, no ambiguity in the order. The reference in the order to a payment in cash being "required" had, on its proper construction, the effect which I have set out in paragraph 48 above, notwithstanding that Mr Fajloun identified a possible alternative construction in submissions that I have not accepted. The further comments that I make below should be read subject to that observation. 55In considering whether the Court knows or plainly should know what is required by an order, the Court may have regard to the circumstances in which the order was made: Athens v Randwick City Council [2005] NSWCA 317; (2005) 64 NSWLR 58 at [36]. The Court of Appeal there also noted that, if there was ambiguity on the face of an order between two meanings, and the recipient had breached the order whichever of the two meanings was adopted, that may be sufficient to establish contempt, at least unless it appears that the breach may have been due as to uncertainty as to what steps were required (per Hodgson JA at [37], Tobias JA agreeing at [141]). 56In written supplementary submissions, Mr Fajloun submitted that, if he might not be liable to contempt on one of several possible constructions of the first order, namely that payment in cash was required if he wished to be paid in cash, then he should not be committed: Australian Consolidated Press Limited v Morgan above at 515-516. I do not accept that submission. As I noted above, it does not seem to me that there is ambiguity in the exception, to the extent that there is any issue whether the phrase "if required" could have extended beyond a legal or commercial necessity to a preference by the payee, relevantly Mr Fajloun, but it is instead a question of construction that has been determined by the Court in the manner noted in Microsoft Corporation v Marks above. 57Moreover, even if there were ambiguity as to whether necessity could be established by legal or commercial necessity on the one hand, or by a reasonably based preference by Mr Fajloun on the other, the order was breached on either of those meanings, since Mr Fajloun established no reasonable basis for such a preference to be paid a substantial amount of back pay by cash. The fact that payment in that manner avoided the need for Mr Khoury's consent to the payment does not provide a reasonable basis for that preference, and Mr Fajloun did not contend to the contrary. It seems to me that any such ambiguity (if it existed) also had no impact on whether Mr Fajloun breached the order on a second basis, since he was not a creditor or employee of the companies for several months of unpaid wages at the time he paid them to himself. A breach of the order would therefore be established on any available view of its meaning, and on the view expressed by the Court of Appeal in Athens v Randwick City Council, a contempt may well also be established on that basis. I consider that view, although expressed in tentative terms, is correct, and I would adopt it. There seems to be no reason that a person should be permitted to take an act that is not permitted on any view of a Court's order, merely because there may be uncertainty whether other acts which the person did not take would breach the order. That result does not seem to be consistent with the public policy underlying the principles of contempt to which I referred above. It is, however, not strictly necessary to reach a finding on that basis where I have held above that there was no ambiguity in the order. Reliance on legal advice 58A secondary question, which was the subject only of a formal submission by Mr Condon before me, was whether Mr Fajloun's conduct would not give rise to contempt because, it was suggested, it was taken with legal advice. I should reach factual findings as to that contention in case the matter proceeds to appeal. Mr Fajloun also presses an alternative submission, as a matter relevant to whether the Court should proceed to a finding of contempt, that: "Mr Fajloun acted on the advice of his solicitor before paying himself. That advice was reasonable, ... . He understood that, if he was an employee, the order did not 'operate' to preclude him from receiving the payment. If that position was incorrect, then his understanding was nonetheless honest and reasonable, and he lacked the necessary mens rea; alternatively, such matters provide a proper basis for the Court to decline to commit for contempt." 59The conduct in issue had commenced before Mr Fajloun took legal advice, although he did not disclose that matter to his solicitor. He first left cash takings from the Glenquarie and Greenfield Park sites in the safe at those sites rather than banking it on 17 July (T47-48, 77) prior to his conference with his solicitor in the afternoon on 18 July 2013 (Tannous 23.4.2014 [17]). Mr Fajloun submitted that any breach of the first order had not occurred on 17 July, by the failure to deposit the takings on that date, because that order did not require the deposit of cash takings immediately after their receipt. That proposition had the consequence that Mr Fajloun could seek to rely on the advice provided by his solicitor, after that first amount had not been banked, in support of his conduct. I accept that the first order did not, by its terms, require the immediate deposit of the cash takings into the relevant bank account and it seems to me that a term that such takings would be deposited within a reasonable time would be implied. While that reasonable time might well be daily, I accept that it is at least possible that, where money was held in the service station's safe, deposits could potentially be less frequent. I therefore do not find that a breach was complete on 17 July, and I should have regard to the fact of the advice taken by Mr Fajloun from his solicitor although, as I will note below, it seems to me that that advice does not assist him. 60Mr Fajloun's evidence is that: "Based upon the advice received from [Mr Tannous], and the fact that I always had the authority to hire employees and terminate their services without reference to [Mr Khoury] for the sites that I managed, I made the payments in cash which was my required method of payment. I thought that Mr Tannous' advice was correct and I relied upon him as my solicitor. I would not have made the payments unless I was advised to do so by my solicitor. Although he and I did not discuss back pay it was my understanding based upon what he had said that I was entitled to receive back pay. In addition I thought that I had the authority to make the payments as a manager. I acted in the belief that I was able to pay to myself the funds that are the subject of the contempt charge. I believed I could do this retrospectively as I had been working on the sites and not receiving my wage for many months" (Fajloun 24.4.2014 [29]-[30]). On that account of Mr Fajloun's conversation with his solicitor on 18 July, he did not disclose to the solicitor that he had already not banked cash takings of the businesses on 17 July as required by the Court's orders. He also did not specifically raise his intention not to bank substantial cash takings of the service stations over a short period and pay them to himself, in payment of a claim to back pay over several months, as distinct from paying wages to himself in the ordinary course of business going forward. 61Mr Fajloun's solicitor's evidence, in response to a question whether he had advised Mr Fajloun that he was entitled to take cash from the businesses rather than bank it, was that his advice was as follows (T100): "The advice that I gave him was that I considered that he was an employee of the company in accordance with what he'd told me, and based on what I knew of the matter, and that under the orders, there was an exception for the payment of employees in cash." That advice did not recognise the fact that the order made by Brereton J did not permit payment of employees in cash at will, but only if required. It did not extend to advice that it was permissible for Mr Fajloun to take the course that he in fact took on a retrospective basis, since Mr Fajloun had not raised that matter with his solicitor. Mr Tannous acknowledged in cross-examination that there was no discussion about whether Mr Fajloun was entitled to retrospectively treat himself as a creditor in respect of the period from November 2012 (T100). 62As I noted above, Mr Condon's submission was that Mr Fajloun had an honest and reasonable belief that his conduct was not in breach of the relevant order. It does not seem to be necessary to reach a finding whether Mr Fajloun had such an honest belief where any such belief does not seem to me to have been a reasonable belief. It seems to me that Mr Fajloun could not hold any reasonable belief to that effect, where he must have known that he had not fully advised his solicitor of the relevant factual circumstances. Mr Fajloun had not disclosed to his solicitor either that already he had not banked monies as the first order made by Brereton J required (subject to the relevant exception) or that he proposed to pay himself back-pay in a substantial amount by not depositing cash received by the businesses over a four day period. In these circumstances, it seems to me that the factual foundation for any defence that Mr Fajloun relied on legal advice is not established. 63Mr Khoury also points out that each of the authorities on which Mr Fajloun initially relied for the proposition that his reliance on legal advice would be an answer to a charge of wilful breach of the Court's order did not stand for that proposition, since each involved a contempt action brought by a non-party, and that the decision of the High Court of Australia in Australian Meat Industry Employees Union v Mudginberri Station Pty Ltd above at [24] and the decision of Brereton J in Anderson v Hassett above at [6]-[7] are to the contrary. I need not address that matter further where Mr Fajloun now puts only a formal submission in that regard. 64Mr Fajloun also submitted that the fact that he had taken legal advice and the "technicalities" involved in the relevant matter provide a proper basis for the submission that, if the Court was otherwise minded to find contempt, it should decline to do so in the exercise of its discretion: Australian Consolidated Press Ltd v Morgan above at 492. I am not persuaded by that submission having regard to the matters set out above. Outcome 65Accordingly, I have found the charge of contempt against Mr Fajloun proved beyond reasonable doubt. It will now be necessary to proceed to the penalty phase of the application. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 July 2014