Supreme Court New South Wales Medium Neutral Citation: In the matter of Mycorp Pty Ltd [2014] NSWSC 1180 Hearing dates: 29 July 2014 Decision date: 27 August 2014 Jurisdiction: Equity Division - Corporations List Before: Black J Decision: Judgment in favour of relevant defendants against the plaintiff in relevant amounts with interest. Plaintiff to pay first defendant's costs of notice of motion on indemnity basis. Orders deferred for seven days for parties to be heard as to precise form of orders. Catchwords: PROCEDURE - contempt, attachment and sequestration - contempt of court - penalty - whether orders can be made returning relevant monies to companies' bank accounts - whether orders made by consent constituted an implied contract between the parties - considerations relevant to imposition of penalty - whether order for costs against contemnor on indemnity basis constitutes a sufficient penalty. Legislation Cited: - Civil Procedure Act 2005 (NSW) s 100 - Crimes (Sentencing Procedure) Act 1999 (NSW) ss 3A, 21A - Fines Act 1996 (NSW) s 6 - Supreme Court Rules 1970 (NSW) Pt 55, r 13 Cases Cited: - Australian Securities and Investments Commission v Michalik [2004] NSWSC 1259; (2004) 52 ACSR 115 - Australian Securities and Investments Commission v Sigalla (No 4) [2011] NSWSC 62; (2011) 80 NSWLR 113 - Capel v Caram Finance Australia Ltd (Supreme Court (QLD), Muir J, 29 May 1998, unrep) - Chapman v Honig [1963] 2 QB 502; 2 All ER 513 - Circuit Finance Australia (recs and mgrs apptd) (in liq) v Sobbi [2010] NSWSC 912 - Environmental Protection Authority v Barnes [2006] NSWCCA 246 - Fairclough & Sons v Manchester Ship Canal Co (No 2) (1897) 41 SJ 225 - McGuirk v University of New South Wales [2010] NSWSC 448 - McIntyre v Perkes (1988) 15 NSWLR 417 - Midland Marts Ltd v Hobday [1989] 3 All ER 246 - NCR Australia Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118 - Re Agreement of the Mileage Conference Group of the Tyre Manufacturers Conference Ltd [1966] 2 All ER 849 - Re Hudson (decd); Hudson v Hudson [1966] Ch 209; (1966) 1 All ER 110 - Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525 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 Background 1These proceedings involve a dispute concerning the management of service stations operated by companies associated with the Plaintiff, Mr Fred Fajloun, and the First Defendant, Mr George Khoury. An order was made by Brereton J on 14 November 2012, by consent of the parties, requiring that Mr Fajloun and Mr Khoury take certain steps in respect of cash takings for each of the businesses operated by the corporate defendants, with an exception which permitted Mr Fajloun and Mr Khoury to pay creditors (including employees) in cash, if required, on the proviso that the payer retained full records of such payments. 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 the Second Defendant, Mycorp Group Pty Ltd ("Mycorp") and between 17 and 19 July 2013, he did not bank an amount of $33,999 in respect of the BP Greenfield Park business owned by the Third Defendant, Moonstone River Pty Ltd ("Moonstone") and thereafter paid those amounts to himself. 2By a motion filed on 12 November 2013, Mr Khoury sought a declaration that Mr Fajloun was in contempt of the order made by Brereton J, by reason of that failure to bank the cash proceeds of the businesses and the payments made by Mr Fajloun to himself. Mr Khoury also sought orders that Mr Fajloun repay the amounts of $34,000 plus interest into the bank account of Mycorp and $33,999 plus interest into the bank account of Moonstone and that Mr Fajloun be fined in such sum as the Court thinks fit. By my judgment delivered on 4 July 2014 ([2014] NSWSC 899), I held the charge of contempt against Mr Fajloun had been proved beyond reasonable doubt. The parties subsequently made written submissions as to penalty and I heard oral argument as to penalty on 29 July 2014. The applicable principles 3The penalties that may be imposed in respect of a civil contempt are specified in Part 55 r 13 of the Supreme Court Rules 1970 (NSW) which relevantly provides: "(1) Where the contemnor is not a corporation, the Court may punish contempt by committal to a correctional centre or fine or both. ... (3) The Court may make an order for punishment on terms, including a suspension of punishment or a suspension of punishment in case the contemnor gives security in such manner and in such sum as the Court may approve for good behaviour and performs the terms of the security." 4Mr Khoury, appropriately, did not suggest that any question of the imposition of a custodial sentence presently arose in this case. The Crimes (Sentencing Procedure) Act 1999 (NSW) also identifies matters applicable to the imposition of a penalty, as follows: "3A Purposes of sentencing The purposes for which a court may impose a sentence on an offender are as follows: (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, (c) to protect the community from the offender, (d) to promote the rehabilitation of the offender, (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community. 21A Aggravating, mitigating and other factors in sentencing (1) General In determining the appropriate sentence for an offence, the court is to take into account the following matters: (a) the aggravating factors referred to in subsection (2) that are relevant and known to the court, (b) the mitigating factors referred to in subsection (3) that are relevant and known to the court, (c) any other objective or subjective factor that affects the relative seriousness of the offence. The matters referred to in this subsection are in addition to any other matters that are required or permitted to be taken into account by the court under any Act or rule of law. ... (3) Mitigating factors. The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows: (a) the injury, emotional harm, loss or damage caused by the offence was not substantial, (b) the offence was not part of a planned or organised criminal activity, (c) the offender was provoked by the victim, (d) the offender was acting under duress, (e) the offender does not have any record (or any significant record) of previous convictions, (f) the offender was a person of good character, (g) the offender is unlikely to re-offend, (h) the offender has good prospects of rehabilitation, whether by reason of the offender's age or otherwise, (i) the remorse shown by the offender for the offence, but only if: (i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and (ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both), (j) the offender was not fully aware of the consequences of his or her actions because of the offender's age or any disability, (k) a plea of guilty by the offender (as provided by section 22), (l) the degree of pre-trial disclosure by the defence (as provided by section 22A), (m) assistance by the offender to law enforcement authorities (as provided by section 23)." 5In Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525, the plurality of the High Court observed (at 533) that: "Even when proceedings are taken by the individual to secure the benefit of an order or undertaking that has not been complied with, there is also a public interest aspect in the sense that the proceedings also vindicate the court's authority. Moreover, the public interest in the administration of justice requires compliance with all orders and undertakings, whether or not compliance also serves individual or private interests ... proceedings for breach of an order or undertaking have the effect of vindicating judicial authority as well as a remedial or coercive effect. Indeed, if the person in breach refuses to remedy the position, as is not unknown, their only effect will be the vindication of judicial authority." 6In Australian Securities and Investments Commission v Michalik [2004] NSWSC 1259; (2004) 52 ACSR 115 at [29], Palmer J identified several factors that are relevant to determining the penalty for civil contempt as follows: "i) the seriousness of the contempt proved; ii) whether the contemnor was aware of the consequences to himself of what he proposed to do; iii) the actual or potential consequences of the contempt on the proceedings in which the contempt was committed; iv) whether the contempt was committed in the context of a proceeding alleging crime or conduct seriously prejudicial to the public interest: see, for example, Von Doussa v Owens (No 3) (1982) 31 SASR 166; v) the reason or motive for the contempt; vi) whether the contemnor has received, or sought to receive, a benefit or gain from the contempt; vii) whether there has been any expression of genuine contrition by the contemnor; viii) the character and antecedents of the contemnor; ix) what punishment is required to deter the contemnor and others of like mind from similar disobedience to the orders of the Court; x) what punishment is required to express the Court's denunciation of the contempt." 7The principles relevant to the imposition of a penalty for contempt were also reviewed by Campbell J (as his Honour then was) in NCR Australia Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118 at [23]-[25], where his Honour noted that punishment can be imposed even in relation to breaches of order which are incapable of remedy, so as to vindicate the Court's authority; that punishments for contempt of Court should take into account the same principles as are applicable to punishment for a crime; and that, in principle, a contempt of Court can be punished by anything within the range of penalties that can be imposed for a crime under the Crimes (Sentencing Procedure) Act. His Honour also noted that, when a judge is finding facts for the purpose of a sentence concerning crime, a fact which will be used in a way which is detrimental to the offender must be proved beyond reasonable doubt, and that the standard of proof used in deciding factual matters for the purpose of imposing a sentence for contempt of Court should be the same as is used in imposing a sentence in criminal matters. His Honour summarised (at [68]) the considerations to be taken into account on issues of punishment for contempt as follows: "A sentence for crime is arrived at as a result of an instinctive synthesis of multiple factors. It is, nonetheless, a judicial decision, because principles of law determine the factors that can properly be taken into account, and a judicial judgment can be made by an appellate court of whether the way in which those factors have been taken into account is within the range of legally permissible outcomes. The same applies to sentencing for contempt." 8The factors in Michalik above were cited with approval by Ball J in Circuit Finance Australia (recs and mgrs apptd) (in liq) v Sobbi [2010] NSWSC 912 at [7], where his Honour also noted that a relevant factor, if the Court was considering imposing a fine, was the means of the contemnor and that the Court should bear in mind that, in the normal course, the contemnor will be ordered to pay costs on an indemnity basis; see also s 6 of the Fines Act 1996 (NSW) which requires the Court, in imposing any fine, to consider such information regarding the defendant's means as is reasonably and practically available to the Court for consideration. The evidence on the question of penalty 9Mr Fajloun relies on his affidavit dated 18 July 2014 in respect of the question of penalty. He sets out the background of his involvement with the relevant companies and Mr Khoury and notes that the dispute that is the subject of the proceedings has been ongoing since November 2011 and that the proceedings commenced in November 2012. He indicates that he has not received income from the relevant companies for some time and states that: "I accept the findings made by this Honourable Court, and in particular that I was not entitled to apply the daily cash takings towards any unpaid wages that I believe that I am owed by the Businesses in the manner in which I applied them. I apologise to the Court for my actions and it was certainly not my intention to breach the Court Orders made on 14 November 2012." Mr Fajloun also refers to the work that he continues to undertake in managing the Glenquarie and Greenfield Park Service Stations and to the extensive hours that he works in both businesses and to the nature of the work that he undertakes. His evidence is that he is involved in running those businesses on a full-time basis and that he considers the businesses could not continue to operate and would need to be closed down or a provisional liquidator appointed if he did not undertake those tasks. His evidence is that he has no other investments or business enterprises from which he can draw an income. 10Mr Fajloun's evidence is that he is married, his wife does not receive an income and he and his wife do not receive government benefits, and he has four children, the oldest of whom is 12 years old. He owns the family home and his evidence is that he has a personal loan from his father secured against that home and liabilities to National Australia Bank that are also secured against that home. He nonetheless has significant equity in that home. He has other liabilities to Centrelink and for school fees and a small liability on a credit card. 11Mr Fajloun's evidence is that he sought to refinance his home loan in January 2014, but that application could not proceed where he could not provide potential lenders with the financials for the businesses by reason of the current proceedings and, it appears, disagreement between the shareholders as to their content. His evidence is that he has borrowed money from his brother to meet his ongoing legal expenses in respect of the proceedings and he also owes his solicitors a substantial amount in respect of outstanding legal fees. He gives evidence of his weekly living expenses, and also sets out information as to the financial position of the businesses and expresses the view that the value of the businesses, if they were realised, would exceed $2.5 million. On the basis that Mr Fajloun claims a half interest in the businesses, he potentially therefore has a significant asset in that interest, albeit he is currently unable to realise that asset. The companies may ultimately be able to recover the amount that he took from them, in payment of his claim for back wages, against that asset although there is every likelihood that they will be delayed in recovering that amount, by reason of his present financial position. 12Mr Fajloun relied on evidence given by a priest of the church that he attends, who indicates that he is in good standing within the church and highly respected among the community and expresses surprise as to the findings against him and expresses very positive views as to Mr Fajloun's character. Mr Fajloun also leads evidence from a manager with a wholesaler, who gives evidence of her experience in dealing with Mr Fajloun and of her assessment that he is of honest character and of his commitment to his family. She also expresses surprise as to the findings against him. I proceed on the basis that Mr Fajloun is of good character and that the relevant conduct was out of character and is unlikely to be repeated. Repayment of monies taken by Mr Fajloun 13Mr Kelly, who appears for Mr Khoury, submitted that orders can be made requiring that the monies the subject of the motion be returned to the companies' bank accounts, in reliance on Pt 55 r 13(3) of the Supreme Court Rules, which provides that: "The Court may make an order for punishment on terms, including a suspension of punishment or a suspension of punishment in case the contemnor gives security in such manner and upon such sum as the Court may approve for good behaviour and performs the terms of the security." I do not accept that submission. I understand that rule to provide, relevantly, for a suspension of punishment on the basis that a proportionate sum is specified, which may be forfeited if the contemnor does not meet the condition of good behaviour, and not to authorise the use of a provision for such security as an indirect means of obtaining restitution for a party who may have suffered loss as a result of the contempt. 14Mr Condon, who appears for Mr Fajloun, fairly drew attention to English case law which indicates that the Court can, in an appropriate case, treat an undertaking to the Court as amounting to an implied contract, the breach of which would give rise to a claim for damages against Mr Fajloun in the amount appropriated by him, and permit the Court to give judgment against Mr Fajloun in that amount. In Re Hudson (decd); Hudson v Hudson [1966] Ch 209 at 214-215; (1966) 1 All ER 110, Buckley J observed that: "Where the giving of an undertaking to the Court forms part of a bargain between the parties to litigation, the giver of the undertaking may assume not only an obligation to the Court but also a contractual obligation to the other party to the bargain to observe or implement the undertaking. ... If the undertaking in such a case were an undertaking to make a payment, the contractual bargain might give rise to a debt recoverable at law. ..." In a decision of the Restrictive Practices Court in Re Agreement of the Mileage Conference Group of the Tyre Manufacturers Conference Ltd [1966] 2 All ER 849 at 862, Megaw P also observed that: "The Court can require, at least, payment of damages, where there has been a breach of an injunction by a party to litigation between two individual citizens." 15In Midland Marts Ltd v Hobday [1989] 3 All ER 246, a contempt of Court arose by breach of undertakings given to the Court. Vinelott J noted (at 249) that undertakings had been agreed between the parties and then offered to the Court, which his Honour characterised as amounting to a "bargain" between the parties. His Honour noted (at 250) that he was satisfied that it was not necessary to impose punitive sanctions (other than an order that the defendants pay the plaintiffs' costs on a full indemnity basis) in order to ensure future compliance with those undertakings, where the defendants had by that point appreciated that any further breach of the undertaking would lead to serious consequences. His Honour then addressed the question whether it was open to him to order that the defendants recompense the plaintiffs for any loss suffered in consequence of the breach of the undertakings. His Honour noted, as would also be the case here, that the Court cannot impose a fine and direct that it be paid to someone other than the Crown. His Honour also noted authority that a contempt of Court does not itself give rise to a claim for damages by a person who asserts that he or she has been injured thereby: Chapman v Honig [1963] 2 QB 502; 2 All ER 513. 16However, his Honour referred to Fairclough & Sons v Manchester Ship Canal Co (No 2) (1897) 41 SJ 225, Re Hudson (decd); Hudson v Hudson above and Re Agreement of the Mileage Conference Group of the Tyre Manufacturers Conference Ltd above and observed (at 251) that he could: "see no reason in principle why the Court, if satisfied that the facts proved at the hearing of a motion to commit constitute both a breach of the undertaking to the Court and a breach of contract and also that there is no tenable ground of defence to an action for damages for breach of contract should not direct an inquiry into damages or in a sufficiently clear case make a summary award of damages. It would, I think, be unjust and give rise to unnecessary multiplicity of proceedings, that an applicant who has established facts which constitute both a breach of an undertaking to the Court and of the respondent's contractual undertakings should be put to the delay and expense of instituting separate proceedings in which the question whether there had been a breach of the undertakings would be res judicata." His Honour there held that the relevant contempt was established, ordered costs on a full indemnity basis and ordered the payment of an amount by way of liquidated damages. That decision was cited, without disapproval, in Capel v Caram Finance Australia Ltd (Supreme Court (QLD), Muir J, 29 May 1998, unrep) where Muir J gave the respondent, in the particular circumstances, the option of paying a fine similar in amount to the monies the subject of the undertakings, on the basis that he would be imprisoned if he elected not to exercise that option or defaulted in its performance. 17In the present case, it seems to me that the orders made by Brereton J on 14 November 2012 were part of a bargain reached between the parties, so far as they were made by consent as part of a wider regime provided by the orders for the operation of the four service station businesses owned by the companies that are parties to the proceedings, which also included mechanisms for payment of expenditures. Mr Condon made clear that Mr Fajloun did not contest the proposition that, having regard to the circumstances in which Brereton J's orders were made, there was an implied contract of the kind referred to in Re Hudson and did not contest that the Court could enter judgment for the amount that had been extracted by Mr Fajloun from the relevant companies. Mr Condon also made clear that Mr Fajloun might seek to have that judgment paid by instalments. Such an order would, of course, only be made if it were justified in the circumstances. 18It may be the same result could be reached on another basis. In McIntyre v Perkes (1988) 15 NSWLR 417, the Court of Appeal upheld an order made by a trial judge, in lieu of imposing a fine for contempt, that the appellant should pay a receiver an amount on account of the expenses properly incurred by the receiver as a result of the contempt and pay the costs of the motion. Samuels JA (at 423) noted that a large number of cases established the proposition that, where a contempt of Court has involved the obstruction of a court-appointed receiver, the Court may make an order requiring the contemnor to make good the loss or expense occasioned by the contempt. Mahoney JA agreed with that judgment (at 428) and Rogers AJA observed (at 434) that Pt 55 of the Supreme Court Rules did not prescribe the only punishment for contempt available to the Court, and is not intended to restrict the power to punish for contempt in whatever way the Court may think most appropriate. It would be surprising if that position were limited only to contempts involving Court-appointed receivers and did not extend to contempts of undertakings made to the Court. 19In the present case, it may be that the Court would have power to order the repayment of the amount extracted from the Company under its powers noted in McIntyre v Perkes above. It does not seem to me that a different result would follow in this case, on that basis, from that which would follow from the contractual principles identified in the English case law to which Mr Condon referred. The preferable course seems to me to be to order judgment for payment of the amount taken by Mr Khoury from the relevant companies, on the contractual basis recognised in the English case law, and to hear the parties further, whether in an application for payment by instalments or otherwise, as to the manner in which that judgment is to be satisfied. Penalty 20Mr Kelly submits that an appropriate fine in the circumstances would be $50,000. Mr Condon submits, with substantial force, that the Court's power to fix a fine did not authorise it to fix that fine by reference to the amount appropriated by Mr Fajloun. It does not seem to me that a fine of the magnitude sought by Mr Khoury is warranted in the circumstances of the relevant breach, and the amount nominated by Mr Khoury seems to be driven, not by those circumstances, but by the attempt to procure repayment of the amount removed by the Company by imposing a very substantial fine, and then suspending it if that amount is repaid to the companies. As I have noted above, it does not seem to me that that is a proper use of the Court's power to impose a penalty for contempt. 21Mr Fajloun submits that he lacks liquid recourses that would allow him to pay a significant fine. He points out that he has no cash reserves of any significance and submits that it would be disproportionate for him to be required to sell the matrimonial home or one of his cars. That proposition is compelling, so far as the matrimonial home is concerned, but much less so far as his cars are concerned. I would not have declined to order a fine, if it were otherwise appropriate, because Mr Fajloun could only meet it by selling one or more of those vehicles. 22Mr Fajloun also points out that he faces the difficulty that, absent a variation of the Court's orders, he will not be paid for his work at the service stations, but he considers that his continued attendance is necessary to their continued operation, and there is every reason to accept the latter position where he has operated two of those service stations for a substantial period. Mr Fajloun also submits, and I accept, that the loss to the companies is mitigated by the fact that, if Mr Fajloun had not provided the services to them in respect of the operation of the service stations - for which he could not be paid, by reason of the Court's orders - then it is likely that the companies would have needed to engage a third party to provide those services, and would have had to pay that third party for those services. Mr Fajloun properly recognises that that submission cannot be put to establish an entitlement to act as he did, at least without a successful application to vary the Court's orders, but it seems to me that it is plainly relevant to an assessment of the loss suffered by the companies by reason of the relevant conduct. 23In the present case, the considerations that seem to me to be of primary relevance to the size of the penalty imposed on Mr Fajloun include, relevantly, the need to ensure that he is adequately punished for the contempt; to seek to prevent further disregard of the Court's orders by deterring Mr Fajloun and other persons from committing similar contempts; to make Mr Fajloun accountable for his actions, and to recognise the harm done to the companies and the community by his noncompliance with the order made by Brereton J. It seems to me that the contempt was a serious one, so far as it involved a disregard of the Court's orders, in circumstances that Mr Fajloun had not fully described to his solicitor what he was planning to do, and, in particular, that he intended to withdraw a large amount of money from the companies in cash in purported back payment of wages. The contempt had real consequences for the financial position of the relevant companies and, indirectly, for Mr Khoury as a shareholder in them, so far as significant funds were extracted from the companies, although it must be recognised that Mr Fajloun had provided corresponding services to the companies. Those consequences are exacerbated by the fact that, as the evidence stands, Mr Fajloun may have real difficulty in repaying the amounts removed, at least prior to a resolution of the proceedings in a manner that allows him to realise his interest in the companies, or a sale of several motor vehicles that he owns. 24I accept that the motive for the contempt was the financial difficulties that Mr Fajloun was facing as a result of his lack of income from the business, and that is a mitigating factor to some extent. Mr Fajloun received a benefit or gain from the relevant conduct, namely, the money which he obtained from the companies, although I again note that he had performed corresponding work for the companies and that benefit could well have been obtained, without the contempt, by an application to the Court to vary the terms of the relevant order. There has, as I noted above, been at least a qualified expression of contrition by Mr Fajloun, although that should be given lesser weight where Mr Fajloun has not accepted responsibility for his or her actions by making any voluntary offer of repayment to the companies of the amounts he extracted from them, even on an instalment basis. As I noted above, there is evidence that Mr Fajloun is generally of good character and is unlikely to repeat the contempt. 25It seems to me that two particular mitigating factors tend against the imposition of a substantial penalty. The first is that Mr Fajloun had sought legal advice prior to taking the step of paying himself back pay in reliance on the exception to Brereton J's order, although that advice did not identify the breach of the order involved in that course, both because Mr Fajloun did not sufficiently disclose the nature of his proposed conduct (and, in particular, the fact that he planned to make a retrospective payment of several months wages to himself) to his solicitor, and because the advice he received did not fully address the terms of the relevant order. Mr Fajloun points out, and I accept, that the finding in my judgment was that he had not acted reasonably, so far as he had not properly informed his solicitor of the steps which he was proposing to take so as to obtain advice about them, rather than that he had acted with subjective dishonesty. Mr Fajloun's evidence in the hearing before me was that, if he had received contrary advice from his solicitor, he would not have taken the relevant steps (T77, 81) and there is no reason not to accept that evidence. Where Mr Fajloun had consulted with his solicitor prior to taking the relevant steps, although that consultation had these deficiencies, it cannot be concluded that he knew that the relevant conduct was in breach of the order. 26A second mitigating factor is that Mr Fajloun had, as I noted below, provided services to the companies and, had he sought to vary Brereton J's order so as to be remunerated by the relevant companies for work that he had undertaken or was in fact undertaking for them - rather than paying himself back pay from cash takings relying on an exception to that order which I have held was not applicable - there is a real prospect that the Court would have varied that order. I accept, in this respect, that Mr Fajloun's evidence indicates that he was in fact suffering real financial hardship as a result of his inability to draw income from the companies, and that hardship was not shared by the Khoury family so far as Mr Khoury appears to have employed other members of his family within the business. 27Mr Fajloun accepts that the present proceedings are civil in character and that the Court has jurisdiction to order costs against him, and he submits that an order that he pay Mr Khoury's costs on an indemnity basis would constitute sufficient punishment for the contempt that had been found. In NCR Australia Pty Ltd above, Campbell J observed at [102] that: "In imposing a costs order for contempt, the Court aims so far as it can to provide full indemnity to a party who obtained a Court order which has been breached in a way which amounts to contempt. Thus, the usual order for costs is that the contemnor pay the costs on an indemnity basis. There is no reason to depart from the usual order in the present case." 28The authorities indicate that, in some cases, an order for costs against the contemnor, usually on an indemnity basis, may be a sufficient penalty: McGuirk v University of New South Wales [2010] NSWSC 448; Circuit Finance Australia above at [8]. In Australian Securities and Investments Commission v Sigalla (No 4) [2011] NSWSC 62; (2011) 80 NSWLR 113 at [49], White J noted that: "In cases of civil contempt, the award of costs, often on the indemnity basis, is an important sanction, and not infrequently a sufficient sanction, to mark the Court's condemnation of the breach of its orders." The quantum of those costs is also relevant to the question whether an additional fine is necessary: Environmental Protection Authority v Barnes [2006] NSWCCA 246. In the present case, the amount of the costs of the hearing before me will not be insubstantial. It seems to me that it will be a sufficient penalty in the circumstances that I have set out above if Mr Fajloun is ordered to pay Mr Khoury's costs of the application on an indemnity basis. Such an order is plainly appropriate and Mr Fajloun did not contend to the contrary. 29For completeness, I should note that Mr Khoury also submitted that a suspension of a fine could also be made on terms that Mr Fajloun binds himself to be of good behaviour for the duration of the proceedings, including complying with the orders made by Brereton J so long as those orders remains on foot. It is ultimately not necessary to determine that submission, since I have held that an order for indemnity costs will be a sufficient penalty to vindicate the Court's authority in the relevant circumstances. I do not consider it is necessary to seek to impose any term as to good behaviour in order to secure compliance with the orders made by Brereton J in the future, since there can be no doubt that Mr Fajloun is now aware, following the delivery of my earlier judgment, of the requirements of those orders and the seriousness of any breach of them. I have no reason to think that such further breach will occur. Orders 30I do not consider it necessary to make a declaration that Mr Fajloun is in contempt, in the manner sought by Mr Khoury, where that matter has adequately been addressed in my earlier judgment. I proposed to make the following orders: 1. Judgment in favour of the Second Defendant against the Plaintiff in the amount of $34,000 together with interest on the sums making up that sum to the date of payment calculated at the rates prescribed for the purposes of s 100 of the Civil Procedure Act 2005 (NSW). 2. Judgment in favour of the Third Defendant against the Plaintiff in the amount of $33,999 together with interest on the sums making up that sum to the date of payment calculated at the rates prescribed for the purpose of s 100 of the Civil Procedure Act 2005. 3. The Plaintiff pay the First Defendant's costs of this Notice of Motion on an indemnity basis. I will, however, defer making those orders for 7 days and will hear the parties further as to any submissions that they wish to make as to the precise form of those orders. ********** 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: 29 August 2014