Supreme Court of WA|2002-01-14|Before: Smith J

Castlecity Pty Ltd v Newvintage Nominees Pty Ltd & Ors [2002] WASC 2 (14 January 2002)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : CASTLECITY PTY LTD -v- NEWVINTAGE NOMINEES PTY LTD & ORS [2002] WASC 2

CIVIL AND EARTHMOVING CONTRACTORS OF KWINANA PTY LTD (ACN 009 328 376)

Contempt - Practice and procedure - Disobedience of court order - Order that caveat be removed and permanent injunction restraining lodgment of any further caveat against the land - Further caveat lodged

Plaintiff (First Contemnor) : Camillo D'Angelo & Co

1 ROBERTS-SMITH J: This is an application made on behalf of the second, third and fourth defendants ("the defendants") by way of chamber summons seeking orders that the plaintiff be fined for contempt of court and that Mr Peter Tilli and Mr Joseph Tilli, directors of the plaintiff, be committed to prison for contempt of court, pursuant to O 55 r 4(2) of the Rules of the Supreme Court. I shall refer to Castlecity Pty Ltd ("Castlecity"), Peter Tilli and Joseph Tilli as the first, second and third contemnor respectively.

2 The chamber summons filed on 6 June 2001 also originally sought orders that the requirements of O 59 r 9 be dispensed with, that the operation of caveat No H703350 be revoked and that the fifth defendant forthwith remove that caveat registered on the land described as portion of Cockburn Sound location 651, being the whole of the land comprised in the certificate of title, volume 2121, folio 12 ("the land").

3 The chamber summons first came on for hearing before me on 15 June 2001, at which time I ordered that the requirements of O 59 r 9 be dispensed with; that the operation of the caveat be revoked, and that the fifth defendant forthwith remove it. I further ordered that the contemnors file and serve affidavits in response to the application within seven days; that the summons otherwise be referred to the Full Court and that the plaintiff, Peter Tilli and Joseph Tilli pay the costs of, and incidental to, the hearing on that day.

4 The reason the order was made referring the chamber summons to the Full Court was because the circumstances alleged prima facie gave rise to a serious contempt in respect of which the committal of Peter and Joseph Tilli might be a reasonable possibility and I took the view at that stage that was an option open only to the Full Court.

5 There were apparently discussions then between the parties as a result of which the matter was relisted before me on 18 June 2001. The parties were in agreement that it would be desirable for the chamber summons to be dealt with by a single Judge rather than the Full Court and that because the contempt alleged was the breach of a court order, a single Judge would have jurisdiction to order committal should that be the appropriate outcome. I acceded to these submissions. Order 55 r 2(3) authorises a single Judge to make an order of committal where the contempt is committed in the face of the court, in the hearing of the court, or consists of disobedience to a judgment or order of the court or a breach of an undertaking to the court.

6 I accordingly vacated the orders previously made to the extent necessary, ordered that any further affidavit or affidavits upon which the applicant wished to rely be filed and served by 4 pm Monday 25 June 2001, that the contemnors have liberty to apply by not later than 4 pm on Friday 29 June 2001 for an order that there was no case to answer in respect of the contempt and that if no such application be made, then the contemnors file and serve any affidavits upon which they intended to rely by 4 pm Friday 29 June 2001 (see R v Westralian Newspapers Holdings Ltd; Ex parte Director of Public Prosecutions (1995) 16 WAR 508, 513, 516, 517).

7 I further ordered that the application otherwise be listed for hearing before me as a special appointment thereafter.

8 There was attached to the plaintiff's chamber summons a notice of contempt in the form required by O 55 r 5(1). That relevantly recited that:

"It is contended by the second, third and fourth defendants that the plaintiff, Peter Tilli and Joseph Tilli are in contempt of court as a result of the following facts:

1. On 30 January 2001 this honourable court ordered the removal of Caveat No G921731 registered on land described as portion of Cockburn Sound Location 651 being the whole of the land comprised in Certificate of Title Volume 2121 Folio 12 ('the land').

2. On or about 31 January 2001 the plaintiff lodged a further caveat (H657530) over the title to the land claiming a caveatable interest identical to that claimed in Caveat No G921731.

3. On 12 February 2001 this honourable court ordered the removal of Caveat H657530 and also ordered that the plaintiff be permanently restrained from lodging any caveat or other instrument dealing with the title in respect of the land.

4. On or about 26 March 2001 the plaintiff lodged another caveat over the title to the land (H703350).

5. Peter Tilli and Joseph Tilli are Directors of the plaintiff.

6. Peter Tilli and Joseph Tilli have signed Caveat No H703350.

7. Joseph Tilli was present at the court on 12 February 2001 at which time he was given the information by the Honourable Justice Miller to the consequences if he again chose not to comply with an order of the court.

8. Copies of the orders dated 12 February 2001 were served personally on both Peter Tilli and Joseph Tilli on 20 February 2001."

9 The substantive action between the parties concerned a claim by the plaintiff for specific performance of a contract for the sale of the land dated October 1997.

10 On 6 August 1999 the plaintiff lodged caveat No G921731 in respect of the land ("the first caveat"). On 30 January 2001 Miller J made orders in this action inter alia requiring the fifth defendant to remove that caveat.

11 On 31 January 2001 the plaintiff lodged a further caveat No 8657530 over the land ("the second caveat"). The estate or interest claimed and by virtue of which the second caveat was lodged was expressed to be:

"A contract for sale of land by offer and acceptance dated 17th day of October 1997 between the caveator as purchaser and Newvintage Nominees Pty Ltd (ACN 063 794 801) Ombulgarri Nominees Pty Ltd (ACN 008 885 390) Debin Nominees Pty Ltd (ACN 008 810 688) and Civil and Earthmoving Contractors of Kwinana Pty Ltd (ACN 009 328 376) as vendor."

12 As a result of the plaintiff lodging the second caveat, the defendants made a further application to Miller J on 12 February 2001. On that date Miller J ordered that (inter alia) the fifth defendant forthwith remove the second caveat and that:

"... the plaintiff be permanently restrained from lodging any caveat or any other instrument dealing with the title in respect of land described as portion of Cockburn Sound location 651 being the whole of the land comprised in certificate of title, volume 2121, folio 12."

The orders were served personally on the plaintiff, Joseph Tilli and Peter Tilli by a process server on 20 February 2001. It is Joseph Tilli's evidence that service was effected on him at 7.30 pm that evening.

13 At the time of service the orders had been endorsed in accordance with the requirements of O 46 r 4(5) and (6) of the Rules of the Supreme Court.

14 At the proceedings before Miller J on 12 February 2001, the plaintiff was represented by Joseph Tilli. Peter Tilli was not present.

15 The history of the proceedings was briefly explained to his Honour by Mr Gough who appeared on behalf of the defendants. Put shortly, that was to the effect that there had been two relevant actions: the first substantive matter was No CIV 1817 of 1999 which involved a claim by the plaintiff for specific performance of a contract for the sale of land dated October 1997, subject to planning approval. At that stage no planning approval had been obtained. In Action No 1980/99 a caveat was lodged and an injunction was in existence preventing the defendants from dealing with the land. About 25 October 2000, judgment was given by the court in favour of the defendants. The plaintiff subsequently appealed. There was a stay and caveats and injunctions were maintained. The plaintiff failed to enter the appeal for hearing and the appeal lapsed. On 30 January 2000, the matter came before Miller J for orders to remove the caveat and the injunction. His Honour made those orders. The application to remove the stay was referred to the Full Court.

16 In action No 1980 (which was the action referred to the Full Court) Miller J ordered on 30 January 2001 that the caveat lodged by the plaintiff claiming an interest pursuant to the contract, be removed. On 31 January, the day following that order, the plaintiff lodged an identical caveat claiming the same interest as that which had been the basis of the caveat ordered to be removed the previous day. This was the second caveat.

17 Following that explanation, his Honour turned to Joseph Tilli, whom he had given leave for that purpose to appear on behalf of the plaintiff company. It is, I think, important at this point to set out the transcript of what then followed:

"MILLER J: ... Mr Tilli, the position is that on 30 January last, as Mr Gough has just outlined, I made an order that the caveat number G921731 which then stood on the land in question be removed, but the very next day it appears that you lodged another caveat to protect the same interest.

TILLI, MR: That was to protect the equity in the property, your Honour, which we have developed over the last 4 years.

MILLER J: Yes. I had already made an order the day before removing the caveat.

TILLI, MR: The caveat was in relation to the contract of sale. You have deemed that we cannot proceed with the contract of sale. I have lodged a caveat, your Honour, to protect the equity that we have built into that property, which is a separate issue altogether. That is why - - -

MILLER J: It isn't. It isn't. Any equitable interest you had would arise out of the contract of sale. What equity are you saying you have protected by the caveat?

TILLI, MR: Because we have spent 4 years obtaining planning approval, which we have obtained in December, which the other side has got a copy of, and we have added the value to the property to what it is valued at today.

MILLER J: That's not an equity in land. That's not an interest in land. By applying for approval to develop land you don't get an interest in land. The interest you had in land arose by reason of the contract.

TILLI, MR: I understand that.

MILLER J: It was a contractual interest.

TILLI, MR: I understand that, your Honour. That is why I have passed this file on to senior counsel for opinion and I would like to have the opportunity to provide an affidavit in opposition to these which were provided to Mr Manera late Friday. This has been common cause throughout this whole action where originally I have only had Camillo D'Angelo on file once, then I had Mr Manera, and it has always been the situation where we have been served papers at the last minute.

For the sake of things since December, I have been trying to get a default judgment set aside which was obtained unconscionably. I have got a matter that I have been proceeding with for 3 years through the court and because of a simple delay one day on an affidavit I can't proceed with my legal action. I am not impressed whatsoever with this matter the way it is proceeding at the present. I believe that I have a contractual right to have my equity protected and I would seek leave today to get a solicitor on file to represent me in this matter to continue on the new caveat matter.

MILLER J: Let me tell you, it doesn't matter whether you're impressed or not. The operation of the law has taken its course and the course is this that you historically had sought to appeal from an interlocutory judgment and for whatever reason the appeal was not lodged within the period of time which was required and there is, therefore, no appeal on foot. It was for that reason that I made the orders on 30 January that the caveat had to be withdrawn.

You can't simply turn around the next day and lodge another caveat to protect the same interest that the court has already said is not capable of being protected because I reached the view that you had no interest left. The position was that the appeal had been rendered null and void because it had not been entered. Whatever your recourse is in that regard is another question. Whether anybody is at fault in that regard I don't know and it's not for me to inquire, but the true position is this: the court made an order on 30 January in terms of an application which was then made that you forthwith remove caveat G921731, or the fifth defendant, that is the registrar of titles, forthwith remove it, but the very next day you lodged another caveat to protect the same interest. You just can't do that.

You can take such legal advice as you wish to see whether you can get the appeal proceedings back on foot and make such other applications as you see fit through solicitors. I'm giving you the opportunity to speak this morning just because it needs to be brought home to you, I think, that the orders are already made and you can't circumvent the orders by lodging a different caveat the following day.

TILLI, MR: I appreciate that, your Worship (sic). I only wish to say that when the matter was before Murray J and the same application was brought on by the defendants to have the caveat removed he basically gave leave to reappear to have the caveat removed only upon such event that the defendants had cause to have the property settled and that was never proved and hasn't been proved to date and therefore I cannot see how the caveat could get removed in any event until such an action is brought forward to the court to prove that the defendants are prejudiced by having the caveat removed.

MILLER J: Let me tell you this: the position is that in any event because it's a company, Castlecity Pty Ltd, which is suing, you have to be represented by solicitors and/or counsel at these proceedings. I have given you permission to speak this morning exceptionally because it's important that you be given the opportunity to explain why it was that a second caveat was lodged. You have explained that but the fact of the matter is that you weren't entitled to lodge a second caveat to protect the same interest because I had already made orders on 30 January precluding that caveat from existing to protect that interest.

So this morning the only orders I can make are orders in terms of the chamber summons, which I have, and I'm going to make orders in terms of that chamber summons but I'm not going to make an order for indemnity costs, Mr Gough, I'm just simply going to make an order for costs and in the circumstances, Mr Tilli, you have to go and take such legal advice as you can take to see what you can do, but for the moment you are restrained from lodging any further caveats to protect this interest in land.

TILLI, MR: Your Honour, may I request respectfully that your decision be stayed whilst I get legal opinion on this matter?

MILLER J: No. You can request it but I won't make that order. You can take such legal advice as you wish to see how you can undo what has happened, if you can, but I can't make any other orders than that. That is the order of the court. We will adjourn the court.

TILLI MR: Thank you."

18 As I have already mentioned, his Honour then made orders that (inter alia) the operation of caveat No H657530C be revoked, the Registrar of Titles remove it forthwith and that Castlecity:

"... be permanently restrained from lodging any caveat or any other instrument dealing with the Title in respect of [the] land...."

19 On 26 March 2001, the plaintiff lodged a further caveat (No H703350) ("the third caveat") over the land. This was a typed document claiming an estate or interest "in fee simple as purchaser" which was the same estate or interest as that claimed in the second caveat and the paragraph reciting the basis of the claim was in exactly the same terms as the corresponding paragraph in the second caveat.

20 Each of the caveats was signed by Peter Tilli and Joseph Tilli as directors of the plaintiff.

21 There is a handwritten endorsement on the third caveat, obviously made by an officer of the Department of Land Administration (DOLA) which reads:

"S/37 Notice sent 1/5/01

Joseph Tilli, Director of Castlecity Pty Ltd attended 7/5/01 and made amendment to caveat."

22 There are three handwritten amendments to the typed caveat, each amendment being initialled by Joseph Tilli. The first relates to the description of the land the subject of the caveat, the second deletes the reference to Newvintage Nominees from the description of the registered proprietor and the third is addition of the words "and as equitable mortgagee" to the description of the estate or interest being claimed.

23 In his affidavit sworn 6 June 2001 in support of the defendant's chamber summons, Craig Stuart Gough deposes to a facsimile letter dated 15 May 2001 which he sent to the plaintiff's solicitor Mr Luka Margaretic confirming a telephone conversation between them at approximately 12.15 pm the following Friday (11 May 2001) and enclosing a copy of the order made by Miller J on 12 February 2001. In his letter he confirmed that Margaretic had informed him that he had advised the contemnors to lodge a further caveat over the property and that at the time he gave that advice he was unaware of the order of Miller J made on 12 February 2001. Gough maintained that the contemnors had no right to lodge a caveat in respect of the property and demanded that it be removed forthwith. He further asserted that the contemnors were in breach of the court order and that if the caveat was not removed, Minter Ellison would take whatever further steps they may be instructed to take without further reference to Margaretic.

24 In his affidavit sworn and filed 14 June 2001 in opposition to the chamber summons, Luka Anthony Margaretic confirmed the telephone conversation with Gough at approximately 12.50 pm on Friday 11 May. He deposed that some of the points discussed during that conversation included, but were not limited to, the following. He said he confirmed to Gough that he had advised the contemnors to lodge a further caveat over the land and that he was at the time unaware of the order made by Miller J. He said that he was of the opinion that as the contemnor's original action had been dismissed simply for non-compliance with directions from the expedited list Judge and as the facts of the substantive action had not been heard or determined by the court, the contemnors were free to initiate fresh proceedings and in the interim lodge a further caveat protecting their rights pursuant to the contract dated 17 October 1997. He said that in the conversation Gough advised that in his opinion the contemnors were in breach of a court order.

25 Margaretic confirmed that on 15 May he received a facsimile from Gough reflecting the points discussed in their telephone conversation on 11 May and attaching a copy of the orders made by Miller J on 12 February.

26 Margaretic then deposes that on receipt of the letter from Gough he immediately sought to obtain instructions from the contemnors and that subsequent to conferring with them, he telephoned Gough in the early afternoon of Monday 21 May and further to that conversation transmitted a facsimile letter at 4.13 pm that afternoon. At par 5 of his affidavit, Margaretic states his facsimile letter confirmed that the advice he gave to the contemnors in relation to the lodgement of the further caveat over the property was made without knowledge on his part of the orders made by Miller J and that he had now advised his clients that in light of the terms of those orders, it would be in their best interests to withdraw the caveat forthwith. He states that he indicated to Gough that his clients maintained their rights pursuant to the contract of sale and would be pursuing those rights in the Supreme Court. He suggested to Gough that the latter's clients take no further steps in the Supreme Court to remove the caveat on the proviso that it was intended the caveat be withdrawn as soon as practicable.

27 On 21 May 2001 Margaretic received a further facsimile letter from Gough which, amongst other things, indicated that as Margaretic's earlier facsimile did not confirm that the contemnors intended to immediately withdraw the caveat, and in light of the fact that Gough believed he had already afforded the contemnors ample time in which to rectify their actions, he intended to file on behalf of his clients a chamber summons seeking orders to have the contemnors committed for contempt.

28 So far as the third caveat itself is concerned, Margaretic confirms in his affidavit that it was signed by Peter Tilli and Joseph Tilli for and on behalf of the plaintiff and was lodged on 26 March 2001. He states it was not removed as foreshadowed in his letter to Gough because of proceedings in relation to a winding-up order in respect of the plaintiff. In proceedings COR 188 of 2000 in this Court, Komtas Pty Ltd had applied by way of chamber summons to lift a stay in respect of a winding-up order against the plaintiff. That chamber summons was heard on 21 May 2001 before Master Bredmeyer, who on 25 May, handed down a written decision in favour of Komtas Pty Ltd lifting the stay on orders made by him on 25 October 2000 that the plaintiff be wound up. Margaretic deposes that:

"As the alleged (sic) contemnors Peter and Joseph Tilli were no longer permitted by law to undertake any act on behalf of Castlecity this was despite their desire to remove caveat H703350 as per my advice to them."

29 On 29 June 2001, Peter Tilli filed an affidavit sworn the same date in which he deposes that at all material times the whole of this legal action had been carried out by Joseph Tilli who has handled all litigation matters on behalf of the deponent and Castlecity. He states that he was unaware of the "proposed of (sic) order" to prevent the lodgement of the third caveat and that he had never been at any of the court hearings. He states that he signed the caveat in his capacity as director of Castlecity upon the request of Joseph Tilli, his co-director. He deposes further that at the time of lodgement of the caveat, they had engaged the services of Margaretic and obviously Peter Tilli had thought it would have been Margaretic's advice to lodge the caveat and that Joseph Tilli was carrying out his instructions.

30 Peter Tilli deposes that he now acknowledges the seriousness of the matter and advises that they will do whatever is possible in relation to assisting and having the third caveat removed, but unfortunately at present their position was "tied up" in relation to Castlecity as they were awaiting a notice of appeal in relation to a winding-up application on the company and therefore he could not attend to the withdrawal of the caveat at that time.

31 On 24 June an affidavit of Joseph Tilli sworn 21 June 2001 had been filed (although the front sheet on the document shows its date as being 29 June). In that affidavit, Joseph Tilli deposed, inter alia, as follows:

"3. Let me say from the outset that the Plaintiffs have continued with an unconscionable vindictive belligerent attack on us and our Company Castlecity Pty Ltd from the inception of these proceedings.

4. In brief we entered into a Contract which simply they do not wish to honor (sic). Castlecity Pty Ltd has fulfilled the conditions of that Contract within a time period stipulated and because we have achieved what they could not, they now wish and have tried to rescind the Contract and keep the Property themselves with the benefit of our Planning Approvals which has taken us some 4 years to obtain, as per Affidavit attached 'JT 1'.

5. This is only an insight into the greed of the Plaintiffs and their attempts to stop at nothing in trying to mislead and deceive the Court.

6. This matter had been put on the expedited list and I had argued as a litigant in person that this should not be so.

7. Springing Orders were obtained and complete details of the Action are outlined as per my previous Affidavit attached 'JT 2' in relation to this action.

8. I have had to endure many unfounded and substantiated actions through the Supreme Court which have placed a burden on the time that I have had in relation to attending to each and every action.

9. The Plaintiff Company has been a substantial financial company and at present our Powers have been suspended as we had to contest a Winding Up Application which is proceeding at present. This is soon to be listed in the Full Court and the financial capacity of the Company is further portrayed in another Affidavit attached 'JT 3'.

10. This Affidavit is obviously in relation to explaining the situation which has arose (sic) in that a third Caveat was placed on the Property in contention.

11. Obviously from what I have explained above, we have been very passionate in relation to this Contract and the increased value from our efforts incurred.

12. I refer to the Court transcript of the 12 February 2001 when I reappeared before Justice Murray (sic: Miller J) to explain as to why the second Caveat was lodged.

13. My reasons were outlined in that I substantially believed that I had a right to protect the equity we had in the property, as such as in that we had increased the property by obtaining the Planning Approval which we had very much fought to obtain.

14. My argument was that I was protecting the Company's interest in the land as a defacto equity owner rather than relying on the actual Contract and specific terms of that Contract.

15. After hearing my argument, His Honor (sic) disagreed with my position and as per the transcript stated that I could not do this.

16. He believed that I could not circumvent the Orders by lodging a different Caveat the following day. Justice Murray (sic: Miller J) did in fact endorse the Orders that the Caveat be taken off.

17. He further stated that I was to go and obtain Legal advice to see what I could do about the situation, 'for the moment' he had restrained me from lodging any further Caveats to protect our interest in the Land.

18. I understood this to be the case that after obtaining further Legal advice in relation to the matter, if that advice was that I was entitled to relodge a Caveat and argue the position on different merits, then I would without delay relodge a caveat as I was prepared to do anything it took to make sure that our action remained afloat and that the Property would not be sold.

19. I refer to the Affidavit of my Solicitor Luka Margaretic that fully explains the position as to when I discussed the matter with him, and his advice to relodge the Caveat.

20. Justice Robert Smith (sic) tried to allude to the fact that I had not provided the full picture to Mr Margaretic, but in fact he was aware of what had occurred previously. He was also of the opinion that a new caveat could be lodged on different grounds and therefore I did this forthwith and I take no regret to this.

21. In any event if it is an Order of the Full Court today that this third Caveat be withdrawn then I will do whatever is necessary to assist in having this Order complied with.

22. At present we are waiting the outcome of our position with the Plaintiff/Company, which we have previously stated, has restricted our management of the Company.

23. At no stage in Justice Murray's (sic: Miller J's) decision had he stated that I would be in contempt of Court in any such way shape or form, and therefore I strongly believe that this action before the full Court today, in fact be dismissed as the grounds and the merits of this action I believe are totally misdirected.

24. In any event the Plaintiff had not be (sic) prejudiced whatsoever, the burden is on them to prove that this caveatable interest has hampered their position and there would be little from the truth as in fact their position has totally strengthened from the efforts and works and monies spent by our Company and ourselves on this property.

25. I believe that for an action to go so far, as for the sake of a day be struck off is creating a falsity of the justice system.

26. I believe that this case should be heard on its merits and a fresh Application will be commenced once the matter of the Company is resolved as the Plaintiffs have not heard the last of this Action.

27. Obviously in any event I have been seen to have disregarded the Courts Orders and I apologise as I have not done this intentionally to disregard the Courts position.

28. I have been a litigant in person for some time now with the Assistance of Senior Council (sic) on various occasions, and I believe that at all times I have always acted professionally and respected the Court and have not acted out of line.

29. I expect that the Full Court acknowledge my position on this englobo (sic) basis and look at it accordingly with their inherent right to do so."

32 The reference at par 20 of Joseph Tilli's affidavit to what had been said by me was a reference to the proceedings on 18 June 2001 when Margaretic appeared on behalf of the contemnors. In the course of discussion between counsel and me as to the potential seriousness of the alleged contempt, I referred to the statements in Margaretic's affidavit of 14 June to the effect that when he advised the contemnors to lodge the third caveat, he was unaware of the orders made by Miller J and that might give rise to an inference that Joseph Tilli had deliberately kept that information from him.

33 Attached to Joseph Tilli's affidavit of 21 June 2001 was an affidavit sworn by him on 25 October 2000 and entitled "Plaintiff's chronology of events", a further affidavit of Joseph Tilli sworn 14 November 2000 and finally, another affidavit by the deponent sworn 20 November 2000. Each of these concerned the conduct of the substantive proceedings in respect of the claim under the contract for the purchase of the land and went to the contemnor's dealings with the defendants. In substance, this material was directed to maintaining the second caveat and being permitted to proceed to trial of the action with the injunction remaining pending trial.

34 On 31 July 2001, a notice of appointment of solicitors was filed notifying that Tottle Christensen were acting on behalf of Joseph Tilli and Peter Tilli who had previously represented themselves.

35 On 30 August 2001 there was filed an affidavit of Joseph Tilli sworn 28 August. In this he deposes that in dealing with the matters raised in respect of the caveats, he had on occasions sought advice from the plaintiff's former solicitor Margaretic, but for the most time had personally been acting on behalf of the plaintiff and himself. He states that upon re-reading his affidavit of 21 June, he could now see that when preparing it he had used outspoken and strong wording. He deposes that Mr Ross Harrison, the solicitor now acting for him, had told him, and he accepts, that in preparing the June affidavit he had let his emotions run away with him and he apologised to the court for the wording of that affidavit. He confirmed that although he had referred to his appearance on 12 February as having been before Murray J, he now realised it was in fact Miller J. He deposes that when appearing before Miller J he understood that in respect of the rights the plaintiff had to lodge a third caveat, his Honour was telling him (in summary form) that he should obtain further legal advice as to whether the plaintiff still had rights against the defendants in respect of the relevant land and if the advice was that he could lodge a further caveat, then he was at liberty to do that even though it was to be on the same ground as the earlier caveats.

36 Joseph Tilli then deposes that following the hearing on 12 February, he consulted Margaretic some days later and that Margaretic told him that he considered the plaintiff still had a good cause of action against the defendants and the plaintiff could lodge a further caveat against the land. Joseph Tilli states that he understood that advice meant he was now free to lodge a third caveat. He then deposes at ([10]):

"Although Luca Anthony Margaretic says that he was unaware of the order of Justice Miller prohibiting the lodgement of the third caveat, I was sure in my own mind that at the meeting I had told him of the order of Justice Miller prohibiting the lodgement of a further caveat and notwithstanding the order of Justice Miller I was still free to lodge the third caveat. I now know that I was not at liberty to lodge the third caveat."

37 So far as the removal of the caveat is concerned, Joseph Tilli deposes that following the revocation of the stay of the winding-up of the plaintiff, he and Peter Tilli, as directors of the plaintiff, after 25 May 2001 could not act as directors and could not withdraw the caveat. He states that as soon as he could do so he arranged for the liquidator of the plaintiff to have the withdrawal sealed and the necessary form was lodged at DOLA on 22 August 2001. He apologised to the court for his "incorrect actions" in causing the third caveat to be lodged, but reiterates that when lodging it he was not aware that he was disobeying in any way the order of Miller J.

38 Finally, when the matter came on for hearing before me on 18 September 2001, Mr Harrison who then appeared for Peter Tilli and Joseph Tilli, said that Joseph Tilli had that morning brought some further information to his attention which he had then caused to be incorporated into an affidavit. There being no objection by Mr Gough, I gave him leave to file and serve that affidavit forthwith and it was subsequently tendered on the hearing.

39 In that affidavit Joseph Tilli says that at the time of swearing his affidavits of 21 June and 28 August 2001 he had deposed that he had informed Margaretic of the orders made by Miller J on 12 February. He did not then have any evidence that he had produced to Margaretic a copy of the actual orders made. He says further that in preparing for these proceedings on 17 September, he came across a copy of a handwritten letter he had written to Margaretic on 20 February which he had faxed to him, together with a copy of the orders made by Miller J on 12 February and which had been served on him on 20 February 2001. A photocopy of the letter to Margaretic is annexed to his affidavit. He deposes that the letter was sent by facsimile transmission by him and annexed to his affidavit is a copy of the facsimile transmission sheet which, he says, "confirms the dispatch by me at 8.11 pm to Luka Anthony Margaretic..." of the letter and the court orders.

40 The letter is a facsimile cover sheet on the heading of Castlecity Pty Ltd to fax number 9325 6955 dated 20 February 2001. The following text is handwritten:

"Please find attached copy of an order which was delivered to me at 7.30 pm 20/2/01 re Naval Base property. I wish to lodge the new caveat from Ishmael Pty Ltd urgently which will mean that they will have to commence litigation all over again because they have never asked who the nominee is! I await your advice."

41 The facsimile transmission sheet shows it was printed at 04:36 on 22/02/2001. The particular call (which is underlined) is shown as having had a duration of 01:49 minutes and being of three pages. Transmission is confirmed.

42 The applicant called Margaretic. He testified that he had no recollection of seeing the documents annexed to Joseph Tilli's affidavit on 18 September 2001 although he did acknowledge that Joseph Tilli did send him a lot of scrawled messages similar to that on the facsimile coversheet. Margaretic had his office file with him in the witness box. He said those documents were definitely not on the file and he could certainly say he had never seen a copy of the orders made by Miller J until he received the fax message from Gough on 15 May 2001.

43 According to Margaretic, his recollection was that the first time the issue was discussed was following their appearance before the Full Court as he and Joseph Tilli walked back towards Margaretic's office. At t 81 he said:

"--- My recollection is that we were before the Full Court of the Supreme Court - and I can't recall the precise date where it was agreed that the matter - upon your application, I believe, Mr Gough, that the matter would be withdrawn and that I indicated to you there would be fresh proceedings brought by the plaintiffs with regard to this action in relation to the property in dispute, was during that time when I was leaving the Supreme Court in the company of Mr Joseph Tilli, that I mentioned to him that in relation to the fresh proceedings it would be advisable to lodge some form of caveat to protect his interests in accordance with the contract, and I think that's reflected in my affidavit. At that point in time Mr Tilli did tell me that he was of the belief there was an order which precluded him from lodging any caveats or other dealings on the title and I said that in my view that would be incongruous with the way things would normally go because the substantive matter had not been heard. On reflection, maybe I should not have given that advice to Mr Tilli because I hadn't had the benefit of actually seeing the orders made by his Honour Miller J. I just thought that the order would extend only so far as that particular action - - -"

44 Margaretic reiterated that the day on which he advised Joseph Tilli that he could lodge another caveat was the day upon which they both attended the Full Court, when the appeal was struck out. Mr Gough then put to Margaretic that this was 20 March 2001, with which Margaretic agreed (t 85).

45 Insofar as his understanding of the position generally was concerned, Margaretic testified that he had little or no knowledge of it. Peter and Joseph Tilli and their associated entities had more than 12 to 13 matters proceeding in court at the same time. Margaretic had received a letter from another lawyer, Mr David Moen, regarding the earlier appearance by him before Miller J on 30 January 2001. There was nothing in that letter which on Margaretic's understanding would have precluded lodging a further caveat. He stated that his understanding was that the caveat had been ordered to be removed because the action had come to an end. The text of the letter was read into evidence. So far as is relevant it was (t 83-84):

"---I refer to the above matter Newvintage Gate v Castlecity and confirm that I attended the Supreme Court before Miller J on Tuesday, 30 January 2001 pursuant to the chamber summons of the respondents. As the applicants had missed the 7-day period within which to enter the appeal matter, Miller J ruled that the appeal proper was at an end.

His Honour also made the following orders: the caveat on the subject property was to be removed; the injunction over the subject property was to be removed; the originating summons was dismissed; costs were to be paid by the plaintiffs including all reserved costs to be taxed. In essence, his Honour granted orders 1 through 6 of the chamber summons dated 18 January 2001.

The 7-day period was missed as the applicants had written to the listings of the Supreme Court requesting the matter be listed for a directions hearing. No response was received by the applicants and as such the respondents argued that the time within which to enter the appeal had lapsed. In any event, the directions hearing had already taken place before Murray J on 21 November 2000. The letter to listings was dated and sent on 1 December 2000."

46 Margaretic testified this letter was dated 2 February 2001 but appeared on his correspondence pin between two documents dated 19 March 2001, so he would assume the Moen letter was also received on 19 March 2001.

47 Asked what, if any, conversations or correspondence he had with the contemnors between 20 and 26 March 2001 about lodging a third caveat, Margaretic said he could not really recall - although he then said there was nothing in writing. The position was summed up in the following exchange (at t 87):

"Then is it the case, as I understand your evidence to be, that on or about 20 March, being the date that you and I appeared in the Full Court, you had a discussion with Mr Joseph Tilli where, on whatever basis it was, you indicated to him a belief that he may have some grounds to lodge a further caveat and that was the last involvement you had prior to this being lodged on 27 March?---That's correct and I can tell you that the whole length of the conversation took from when I exited the Supreme Court building and walked through Supreme Court gardens up to the Law Society so it wasn't a lengthy conversation."

48 According to Margaretic, he did not draft the third caveat and was not involved with lodging it. He confirmed that he was dealing only with Joseph Tilli who was in control of all of the litigation being conducted by the contemnors and had no dealings with Peter Tilli. Joseph Tilli attended to the caveat himself and Margaretic had not even seen it prior to the present proceedings. He also said that from memory he had no involvement in advising the contemnors what interest should be claimed, nor was he instructed to remove the caveat - they did all that work themselves.

49 So far as the documents attached to Joseph Tilli's affidavit of 18 September were concerned, Margaretic explained his office had seven other correspondence files and a temporary secretary at the time. If the facsimile and attachments had been sent, it is possible they were placed on another file. He reiterated this in cross-examination, saying it was possible the facsimile had been sent to him and possible that it had been placed on another file in the office. He said he had no conversation with Joseph Tilli about the caveat prior to 20 March 2001 and his advice given on that occasion was on his understanding that orders had been made by Miller J, (but not the content of them) and the letter from Moen - but that turned out to be about different orders in any event.

50 Peter Tilli gave evidence that all of the court proceedings had been generally handled by Joseph Tilli and that the only knowledge he had of the caveats was that he had been asked to sign them by Joseph Tilli and he had done so in the belief that the lawyers had advised that course. He did not think he was aware of the orders made by Miller J until sometime afterwards.

51 In his cross-examination Joseph Tilli testified that he received the orders made by Miller J at 7.30 pm on the night of 20 February 2001 and shortly afterwards faxed a copy of them together with his note to Margaretic. He said he recalled writing and sending the fax. Asked why he had not referred to this in his two previous affidavits, Joseph Tilli said he had overlooked it because he had not found the note at that time and had forgotten he had sent it. He said he simply did not think about it when preparing the two previous affidavits.

52 In the course of his cross-examination on the particular entry which had been underlined on the transmission sheet, it was pointed out to Joseph Tilli that the times recorded are on a 24 hour clock - so that in fact the 08:11 there shown is not 8.11 pm, but 0811 hours, ie 8.11 am, on 20 February 2001! He then said that when he found that record the previous night, he had immediately thought that 08:11 was the time he sent the fax on the night of 20 February, but it must have been the following morning. In fact, of course, the transmission sheet shows the time as having been 0811 hours on the morning of 20 February not 21 February. He initially insisted that it was not possible the 08:11 fax notation was something different; he was adamant it was the fax he had sent to Margaretic forwarding the orders made by Miller J.

53 As to the content of the third caveat, Joseph Tilli agreed that he had originally lodged it in exactly the same terms as the second caveat, claiming an interest in the land as purchaser. He said he later realised the claim should have been in respect of an equitable interest, saying he believed they had equity because of the planning approval which had been obtained and thereby added value to the land. (That of course was the argument he had put to Miller J, which his Honour had explained was untenable). He said that Margaretic had advised they could lodge a caveat on different grounds, although again when it was pointed out to him that the third caveat had initially been lodged on exactly the same grounds as the second caveat, he said he did not remember exactly what Margaretic's advice had been. Nonetheless, a little later he again came to assert that Margaretic's advice was that because they were issuing fresh proceedings, they could re-lodge the caveat on exactly the same grounds.

54 With respect to the final removal of the caveat, he said he instructed Mr Harrison to approach the liquidator to have the caveat removed and that was done, but he had done nothing about it before that. He was unable to explain why.

55 The application was adjourned on 18 September 2001, pending judgment. It was relisted on 24 September 2001, for judgment. On that day, and before judgment was delivered, Mr Harrison informed me that he had been advised by Mr Gough that subsequent to the hearing on 18 September, Margaretic had contacted Mr Gough and told him that after he had given evidence he had caused a search to be made in his office and had located on another file a fax from Joseph Tilli forwarding a copy of the orders made by Miller J.

56 Mr Gough confirmed to me that he had received that communication from Margaretic, but said he did not propose to recall the latter - that could be done by Mr Harrison if the contemnors wished to have that evidence.

57 I expressed some dissatisfaction at having been presented in that way with hearsay upon hearsay which was different from - if not in conflict with - Margaretic's sworn testimony.

58 Mr Harrison then applied for an adjournment and for leave to re-open his case and call Margaretic. That application not being opposed, I granted it.

59 By early January 2002, the parties not having had the matter relisted, I had it brought on. When it came on again on 9 January, Mr Harrison explained it could not have been listed earlier because of Margaretic's unavailability. He then called Margaretic, whose further evidence confirmed what had earlier been indicated to me from the Bar table.

60 Margaretic first stated that he adhered to his earlier testimony that he had not seen a copy of the orders made by Miller J until one was faxed to him by Mr Gough. He then said that after he had given evidence last September, he caused a search to be made of the Tilli files in his office. That search did locate a facsimile dated 20 February 2001 forwarding a copy of the orders ("the pertinent fax") but that had been placed on the wrong file. It was on a Tilli file titled "Various Litigation Matters" when it should have been on a file titled "Tilli - Naval Base." The pertinent fax was found to be immediately after a fax to Margaretic from the contemnors dated 16 February 2001 and immediately before one from them to him dated 21 February 2001. The pertinent fax bears no fax machine imprint of transmission details. Incoming faxes normally do bear a transmission imprint at the top - some of the facsimiles Margaretic received from the Tillis bore such an imprint but others did not. This was one which did not.

61 Margaretic was asked whether he had questioned any of his office staff about receipt of the pertinent fax. He explained the general procedure in his office was that incoming faxes are placed in his "in-tray". He said that in this instance several faxes had been coming through from Mr Tilli and the secretary was of the belief Margaretic had seen the pertinent fax, but it had been taken straight from the fax machine and wrongly placed on the general file which dealt with the administration of all the other files. (In passing, I note that this evidence was hearsay, but no objection was taken to it).

62 Margaretic said he had no reason to doubt that the pertinent fax had been received on 20 February, as claimed by Joseph Tilli.

63 Mr Gough did not cross-examine. Neither party tendered the pertinent fax.

65 He was not present at court on 12 February 2001 when Miller J explained the position to Joseph Tilli. In his affidavit and in his evidence he asserted that Joseph Tilli was responsible for the litigation being conducted by them and by the plaintiff and that he only signed the caveats at Joseph Tilli's request and on the understanding that the lawyers had advised that course. There is no evidence that he was aware of the terms of the orders made by Miller J, nor even the substance of them: (Amalgamated Television Services Pty Ltd v Marsden [2001] NSWCA 32 at [1], [3] and [57]) and no evidence to show that in signing the caveat he did so knowing that would be in conflict with, or tend to defeat the purpose of the orders made by his Honour. I am not satisfied the application has been made out in respect of Peter Tilli.

66 Joseph Tilli was present before Miller J on 12 February 2001. It was he who was conducting the litigation on behalf of the plaintiff. It was he who organised the lodging of each of the caveats. He drafted the third caveat. The explanation of the position by Miller J on 12 February 2001 could not have been clearer. I do not accept that Joseph Tilli understood what his Honour said on that occasion was that a lawyer might be able to advise him that he could relodge the caveat or lodge another caveat. I think it absolutely clear that his Honour was saying that a lawyer could explain to the contemnor why no further caveat could be lodged in light of the orders of the Court and I am satisfied beyond reasonable doubt that Joseph Tilli well understood that. In addition, the terms of the order as subsequently extracted were unequivocal. I am satisfied Joseph Tilli fully understood that an injunction that Castlecity be "permanently restrained" from lodging a caveat meant exactly that.

67 I had the opportunity of observing Joseph Tilli in the witness box. He struck me as very intelligent, astute and articulate. He evinced a ready perception of what facts or issues were important. I was not impressed that he was being truthful about them.

68 In his affidavit of 21 June 2001, Joseph Tilli had sworn at [20] that Margaretic had advised him that a new caveat could be lodged on different grounds. In fact, of course, the third caveat was lodged on exactly the same grounds (that is, claimed the same interest as purchaser under the contract) as the previous caveats.

69 As I have already noted, Margaretic's evidence on this was that from memory he had had no involvement in advising what interest should be claimed.

70 In his evidence Joseph Tilli first said that Margaretic had advised he could lodge the caveat on the same grounds (t 119, 130) but when pressed said he could not remember and ended by saying Margaretic had told him to use the same grounds.

71 In cross-examination Margaretic was asked (t 96) whether as far as he knew it was in order for Joseph Tilli to lodge the third caveat, to which he responded:

"--- Our intention was, when we were leaving the supreme Court, to immediately instigate fresh proceedings and to lodge a caveat to protect the interest pursuant to the contract in relation to those fresh proceedings. That's the basis upon which the advice was given."

72 From the filing of Margaretic's affidavit on 14 June 2001, Joseph Tilli well knew that Margaretic, his own lawyer, was claiming that at the time he advised the contemnors to lodge a (third) caveat over the land, he was unaware of the orders made by Miller J. Joseph Tilli also appreciated the significance and importance of that. He was present in court on 18 May when that was canvassed. He expressly referred to that at [20] of his affidavit of 21 June. Again, in his affidavit of 28 August, he specifically referred to his own certainty that when he spoke to Margaretic after the hearing on 12 February he had told Margaretic of the orders. In neither of those affidavits did he make any mention of having sent a facsimile message and a copy of the orders to Margaretic on 20 February.

73 The facsimile message and the transmission sheet were not brought to anyone's notice until the morning of the hearing. Joseph Tilli's explanation for that is entirely unconvincing in the circumstances. There is no imprint nor other confirmation of any objective kind to show the facsimile message had been written on 20 February, nor that it was sent on that date, nor at all. Even on his own evidence, it seems clear that Joseph Tilli saw on the transmission sheet a record that a three page fax had been sent to Margaretic's facsimile number on 20 February, but mistakenly read the time 08:11 as being 8 pm when in fact it was 0811 hours. That could not have been the fax as he describes it, because the orders were not served on him until 7.30 pm (ie 1930 hours) that day. The transmission sheets shows subsequent facsimile transmissions until 0430 hours on 22 February. None of them is to Margaretic's fax number.

74 A brave attempt was made by counsel for the contemnor to suggest the automatic clock on the fax machine may have been incorrectly set, (despite Joseph Tilli's earlier evidence in cross-examination that he had no reason to believe the clock setting was wrong and so far as he knew it had always recorded the right time (t 112)) but there is no evidence to support that, and I would not be prepared in the circumstances to give that suggestion any credence.

75 The evidence in respect of the pertinent fax leaves me with some disquiet. Nonetheless, the evidence of Margaretic given on 9 January 2002, not challenged by cross-examination, leads to the conclusion that Joseph Tilli did send a copy of the orders made by Miller J on 12 February 2001 to Margaretic by fax some time after 20 February 2001. The facsimile machine transmission record shows it was not sent at any time between 7.30 pm on 20 February (when it was served on Joseph Tilli) and 4.30 am on 22 February 2001, even though Margaretic says it was on his office file immediately before a fax dated 21 February 2001. It must therefore have been sent later.

76 On Joseph Tilli's own evidence, his covering note made it clear he wished to lodge a new caveat in the name of a different entity but claiming (as "nominee") the same interest in the same land. However, I am satisfied beyond reasonable doubt that the pertinent fax never came to Margaretic's attention.

77 So far as Margaretic's evidence is concerned, I formed the very firm impression that he was doing his best to present his former clients in the most favourable light possible. In his affidavit on 14 June, and in his earlier communications with Mr Gough, he had very clearly and consistently stated that when he advised the contemnor to lodge the third caveat he was unaware of the orders of 12 February 2001. In his evidence on 18 September he put it somewhat differently, saying then for the first time that in the course of their conversation, Joseph Tilli did tell him there was an order precluding the contemnors from lodging a further caveat, to which he had responded with words to the effect: "That could not be right". His evidence was therefore that notwithstanding having been told that, and without making any attempt to obtain a copy of the order, he advised Joseph Tilli to lodge the third caveat. It seems clear that what Margaretic had in mind at that time was the order made by Miller J on 30 January 2001. I am satisfied beyond reasonable doubt that, as Margaretic first explained it, at the time he gave that advice he was unaware of the orders made by Miller J on 12 February 2001.

78 Taken as a whole, I think the evidence shows the following course of events and I so find. Following the hearing before Miller J on 12 February 2001, Joseph Tilli was still determined to lodge a further caveat against the land. The extracted orders were served on him at 7.30 pm on 20 February 2001. He sent a copy of them to Margaretic's office by facsimile some days later. That did not come to Margaretic's attention. On 19 March 2001 Margaretic received the letter from Moen reporting on his appearance before Miller J on 30 January 2001. That letter explained that as the appeal had been struck out the caveat was ordered to be removed. Margaretic believed the position at that stage to be that as the caveat had been removed simply because the appeal had lapsed there was nothing to prevent a further caveat being lodged.

79 However the caveat to which Moen referred was the first caveat; Margaretic was unaware that there had been a second caveat lodged by the contemnors and that on 12 February 2001 Miller J had not only ordered that it too be removed, but had also permanently injuncted Castlecity from Lodging any caveat or other instrument in respect of the land.

80 Such was Margaretic's state of mind and understanding on 20 March 2001 when he walked out of the Supreme Court building with Joseph Tilli and Tilli said he wanted to lodge a further caveat.

81 Again, although I consider the evidence to be quite unsatisfactory, I cannot be satisfied on it beyond reasonable doubt that Joseph Tilli did not mention to Margaretic on that occasion that there was an order preventing the lodgement of a further caveat and that he was referring to the order of 12 February, a copy of which he had sent to Margaretic but which he was not aware Margaretic had not seen. In that context, the inference is, I think, reasonably open that Margaretic thought Tilli was referring to the order of 30 January and gave his advice on that basis.

82 But in the circumstances of this case that is not an end of the matter. I am satisfied that Joseph Tilli was extremely upset with the fact that the previous action had been brought to what he regarded as a premature conclusion, he was likewise upset and disagreed with the orders made by Miller J and he was determined to prevent any dealings with the land until he could bring fresh proceedings to a successful conclusion. Having regard to the nature of the interest claimed in the caveats, what was said by Miller J to Joseph Tilli on 12 February 2001, the clear and unequivocal terms of the order made that day and the impression I formed of him in the witness box, I am satisfied that Joseph Tilli did not have an honest belief that the order of 12 February 2001 did not prevent lodgement of the third caveat but that he considered that if any action were to be taken against him for acting in defiance of the order, he would be able to say he did so on the advice of his lawyer.

83 I am satisfied beyond reasonable doubt that notwithstanding Margaretic's advice, such as it was, Joseph Tilli was well aware that the order made by Miller J on 12 February 2001 precluded the lodging of any further caveat claiming any interest whatsoever in respect of the land.

84 I am satisfied beyond reasonable doubt that Joseph Tilli quite deliberately lodged the third caveat knowing full well that was in breach of an order of this Court and that he chose to ignore the order in the face of the warning previously given to him by Miller J. This was a contumelious contempt and one which to my mind requires the imposition of a penalty which reflects the seriousness of it.

85 Section 3(3)(a) of the Sentencing Act 1995 (WA) stipulates that the provisions of that Act do not apply to punishment for contempt.

86 By O 55 r 7 contempt may be punished by fine or committal or both. If a fine is imposed the Court may order the contemnor be imprisoned until the fine is paid. Where the contemnor is a corporation the Court may punish a contempt by fine or sequestration or both. However, the powers in O 55 r 7 are not exhaustive. The Court has inherent power with respect to contempt and may impose no punishment at all (R v Pearce (1992) 7 WAR 395) or make any of a range of orders including the imposition of a suspended sentence (Harris v Muirhead [1993] 2 Qd R 527; AMIEU v Mudginberri Station Pty Ltd[1986] HCA 46; (1986) 161 CLR 98, 114 - 115).

87 I do not regard a fine as adequate. In my view, imprisonment is the only penalty which would reflect the gravity of this contempt. I do not consider a suspended sentence appropriate. I propose to order that Joseph Tilli be committed to prison for one month.

88 I turn now to Castlecity. The caveat was lodged in the name of the company. It was a deliberate act done by the agency of Joseph Tilli in the circumstances I have described above. The fact that the other director who signed the caveat has not been shown to have been aware of the order prohibiting the lodging of it does not detract from the culpability of the company. I would impose a fine of $3000.

Castlecity Pty Ltd v Newvintage Nominees Pty Ltd & Ors [2002] WASC 2

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (110 paragraphs)

Castlecity Pty Ltd v Newvintage Nominees Pty Ltd & Ors [2002] WASC 2 (14 January 2002)

Parties

Cases Cited (3)