Bydand Holdings Pty Limited v Pineland Property Holdings Pty Limited & Ors

Supreme Court of NSW|2009-06-19|Before: Einstein J, Mr P

CITATION : Bydand Holdings Pty Limited v Pineland Property Holdings Pty Limited & Ors [2009] NSWSC 579

HEARING DATE(S) : 19/06/09 JURISDICTION : Equity Division Commercial List

DECISION : Challenge to statement dismissed.

CATCHWORDS : Practice and Procedure - Contempt Proceedings - Undertaking to the Court - Suggested ambiguity - Principled approach

Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 Iberian Trust Ltd v Founders Trust and Investment Ltd [1932] 2 KB 87 Kirkpatrick v Kotis (2004) 61 NSWLR 567 CASES CITED : Microsoft Corporation v Marks (No 1) (1996) 69 FCR 117 Redwing Ltd v Redwing Forest Products Ltd (1947) 177 LT 387 Spokes v Banbury Board of Health (1865) LR 1 Eq 42 Watkins v AJ Wright (Electrical) Ltd [1996] 3 All ER 31

Bydand Holdings Pty Limited (Plaintiff) PARTIES : Pineland Property Holdings (First Defendant) Knight Frank Australia Pty Limited (Second Defendant) Vincent Pang (Third Defendant)

COUNSEL : Mr LF Kelly SC, Mr P Russell (Plaintiff) Mr C Birch SC, Mr A Cassels (Third Defendant)

SOLICITORS : Barringer Leather Lawyers (Plaintiff) Maxim Legal Pty Limited (Third Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST

Friday 19 June 2009 ex tempore Revised 22 June 2009

50058/08 Bydand Holdings Pty Limited v Pineland Property Holdings Pty Limited & Ors

JUDGMENT The challenge to the statement of charge 1 The proceedings before the Court are by way of a notice of motion for contempt. The alleged contempt is identified in the particulars of charge in terms of the breach of an undertaking given to the Court. 2 Shortly after the matter was called, Mr Birch SC, senior counsel for the third defendant, put forward as a preliminary matter, the contention that the charge required to be set aside for the reason that the undertaking given by the third defendant to the Court was ambiguous and hence could not be enforced by contempt proceedings 3 The terms of the material undertaking given to the Court by the third defendant were as follows:

I, Vincent Pang, hereby undertake to the Supreme Court of New South Wales to provide to the plaintiff's legal representatives 14 days notice of any intention of disposing, encumbering or in any way dealing with property located at Burwood comprised in Folio identifier 1/325701 until further order of the Court. 4 The short proposition for which the third defendant's counsel contended, was that one could only give notice of an intention to do something after the intention was formed: so that it was not possible for the third defendant to know what could be meant by the reference to the giving of 14 day notice of his intention. 5 The third defendant's counsel contended that the focus of the undertaking being worded in terms of 'any intention' [of the third defendant in terms of disposing or encumbering, or in any way dealing with the property] could be contrasted with what was suggested as the more usual form of commonly encountered undertaking: which it was suggested would often be found in the form of an undertaking not to dispose, encumber or in any way deal with particular identified property without first giving the plaintiffs legal representatives a nominate period of time by way of notice. 6 The contention was that the contempt is said to be that the undertaking required the third defendant to give notice at least 14 days prior to executing the contract to be entered into in March 2009 and that the undertaking by its terms could not sustain that case. The proposition was that the plaintiffs case rested upon the assumption that the meaning of the words used was that the third defendant undertook that prior to disposing, encumbering or dealing in any way with the subject property, the third defendant would give 14 days notice of such disposition, encumbrance or dealing. The contention is that this meaning could not be extracted from the words as would be necessary in order to support the charge of contempt. 7 A further proposition was that read literally, the supposed undertaking could never work. Senior Counsel for the third defendant contended that if one works one's way through the undertaking, the third defendant undertook to provide to the plaintiffs legal representatives 14 days notice of any intention. He then contended that if one formed the intention of doing the thing than the way it was constructed he would need to give 14 days notice of his intention. The proposition was that that led to an obvious difficulty because by the time the third defendant would have formed the intention sufficient to give the notice, he would have needed to have given the notice 14 days prior to that point. 8 In my view the principled approach to the question of whether an undertaking was ambiguous is that recently enunciated by Campbell J in Kirkpatrick v Kotis (2004) 61 NSWLR 567, in particular at paragraphs 48 - 49 and at 55 - 57. His Honour accepted as stating the Australian Law, the propositions which fell from Owen J with whom Windeyer J agreed in Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483. Owen J there quoted from Iberian Trust Ltd v Founders Trust and Investment Ltd [1932] 2 KB 87 and to the statement of Jenkins J in Redwing Ltd v Redwing Forest Products Ltd (1947) 177 LT 387 at 390 that:

"I cannot say that the undertakings contained in the order were clearly drawn and I cannot say I regard the questions of construction involved in them as entirely easy questions, but in my judgment, a defendant cannot be committed for contempt on the ground that upon one of two possible constructions of an undertaking being given he has broken his undertaking. For the purpose of relief of this character I think that the undertaking must be clear and a breach must be clear beyond all question." 9 At 54, Campbell J observed that the type of ambiguity in an order which could result in a person not being punished for contempt was considered by Sir W Page Wood VC in Spokes v Banbury Board of Health (1865) LR 1 Eq 42 at 48-49, when he said:

"…an order must be obeyed and… those who wish to get rid of that order must do so by the proper course, an appeal. So long as it exists, the order must be obeyed and obeyed to the letter, and anyone who does not obey it to the letter is guilty of committing a wilful breach of it, unless there may be some misapprehension which all mankind are subject to, and which may mislead him upon the plain reading of the order." 10 At 55 Campbell J observed as follows:

"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 the band under some particular name, the order would be enforceable notwithstanding that a 'band' can sometimes be a rubber band or a headband." 11 At 56 Campbell J observed as follows:

In deciding whether an order is certain enough to be enforceable by contempt proceedings, the task of construction of an order can go far enough to enable ambiguities which have no real risk of misleading anyone who is trying to understand and obey the orders to be discarded. I agree with the following remarks of Lindgren in Microsoft Corporation v Marks (No 1) (1996) 69 FCR 117 . "The proposition that a contempt will not be found where the terms of an order or undertaking are unclear, ambiguous or apt to mislead (except, perhaps, if the prosecutor proved that the contemnor understood them in accordance with what the Court holds to be their true meaning) must be distinguished from certain other propositions. It does not signify that there is no breach wherever there is difficulty in the construction of the terms of an order or injunction which it falls to the Court to resolve. Nor does it signify that contempt will not be found wherever an alleged contemnor did not understand the terms of an order or injunction according to their true meaning, much less wherever an alleged contemnor was unaware that his or her conduct constituted a breach of the order or undertaking - cf Watkins v AJ Wright (Electrical) Ltd [1996] 3 All ER 31 ." 12 I am satisfied that there is no substance in the third defendant's contention. As Campbell J observed 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. And as Lindgren J observed in Microsoft, the proposition that a contempt will not be found where the terms of an order or undertaking are unclear, ambiguous or act to mislead, must be distinguished from certain other propositions and does not signify that there is no breach wherever there is difficulty in the construction of the terms of an order or injunction which it falls to the Court to resolve. 13 In the case of consent orders, where surrounding circumstances can be used as an aid to construction, those surrounding circumstances can have the effect that an order which is ambiguous, considered in isolation, is found not to be ambiguous when read in the light of the surrounding circumstances. Notably the subject consent short minutes of order included the Court taking in the written undertaking provided to the Court by the third defendant in terms of the orders made on 15 August 2008. 14 There is evidence before the Court of a number of occasions where the plaintiff's legal advisers requested that Mr Pang give their office 14 days notice if he had any intention of selling or further encumbering the property in question. In particular such a letter dated 13 June 2008 written to Mr Pang's solicitors expressly sought that their client give a personal undertaking in writing that he would give the plaintiff solicitors 14 days notice of any intention of disposing of, income in or in any way of dealing with any interest in the subject property 15 For those reasons the third defendant's contentions are without substance and dismissed.

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