Pang v Bydand Holdings Pty Ltd

Court of Appeal (NSW)|2010-08-30|Before: Beazley JA, McColl JA

Background 3The appellant gave the undertaking in proceedings which were commenced by the respondent seeking declaratory and other relief, including damages, in respect of the termination of a contract for sale of land. The contract was in respect of property at Walker Street, North Sydney and was entered into between the respondent as vendor and Pineland Property Holding Pty Ltd (Pineland) as purchaser. The proceedings were determined in the respondent's favour, with a declaration being made by the Supreme Court on 10 July 2008 that the respondent had validly terminated the written contract. 4The appellant was not initially a party to those proceedings, but was joined by court order on 10 July 2008. 5On 15 August 2008, the appellant, who was represented in Court by counsel, gave to the Court a written and signed undertaking, dated 14 August 2008. The undertaking was in the following terms: "I Vincent Pang, the third defendant in the ... proceedings numbered 50058/08 hereby undertake to the Supreme Court of New South Wales to provide to [the respondent's] legal representatives 14 days notice of any intention of disposing or encumbering, or in any way dealing with the property located at Burwood comprised in folio identifier ******** until further order of the Court." 6On 19 January 2009, the respondent's solicitors forwarded a demand to the appellant that he pay the respondent a sum in excess of $3 million, pursuant to the Deed of Guarantee and Indemnity. 7On 26 March 2009, the appellant's solicitors forwarded a facsimile letter to the respondent's solicitors stating: "We note that on or about 15 August 2008, our client provided an undertaking to the Supreme Court. We are instructed that by agreement dated 16 March 2009, our client agreed to sell the Burwood property to Lexus Property Holdings Pty Ltd. We propose our client enter into a new regime of undertakings to the Supreme Court to ensure your client's interests are adequately protected; our client irrevocably directs Lexus Property Holdings to pay the proceeds from the sale of that property to the Registrar of the Supreme Court or into a nominated controlled monies account. Please advise us your client's instruction and we look forward to discussing this new regime with you." 8Following receipt of this letter, the respondent's solicitors asked the appellant's solicitors when the appellant had appointed agents to sell the Burwood property, how much debt was secured over the property as at 15 August 2008 (the date upon which the undertaking to the Court was given), and what debt was secured against the property as at 27 March 2009. 9In response to this enquiry, the appellant's solicitors forwarded a copy of the front page of the contract for sale, which recorded a purchase price of $800,000. They advised the respondent's solicitors that the property was encumbered in a sum of approximately $770,000, which was also said to have been the amount of the loan as at 15 August 2008. The appellant's solicitors also advised that the appellant consented to the lodgement of a caveat over the Burwood property.

The contempt application 10On 16 April 2009, the respondent filed a notice of motion (the contempt application) seeking that the appellant be found guilty of contempt of court for breach of the undertaking given on 15 August 2008 and that the appellant be punished by committal to prison, by fine or both. 11The particulars of charge were as follows: "... (b) On about 16 March 2009, [the appellant], as vendor, entered into a written contract ('the Burwood property contract') with Lexus Property Holdings Pty Ltd ACN 135 697 031 (acting in trust for Tower Prohol Unit Trust), as purchaser, for the sale of the Burwood property; (c) By entering into the Burwood property contract, [the appellant] has disposed of the Burwood property; (d) Further or alternatively to paragraph (c), by entering into the Burwood property contract, [the appellant] has dealt with the Burwood property; and (e) In breach of the Undertaking, [the appellant] did not provide to [the respondent's] legal representatives 14 days notice of his intention of disposing of and/or dealing with the Burwood property." 12The appellant filed an affidavit in the contempt application in which he stated that the affidavit was filed in mitigation of his breach of the undertaking. The appellant was cross-examined on his affidavit in the course of the hearing of the contempt application. The facts and circumstances considered below are derived both from the appellant's affidavit and his cross-examination. The solicitor who acted for the appellant at the time the undertaking was given to the Court did not give evidence on the hearing of the contempt application. 13The appellant is a highly-qualified graduate. He holds a Masters of Facility Management from the University of Technology, Sydney and a Masters of Project Management from the University of Sydney. He became an Associate Member of the Australian Property Institute as a Certified Practising Valuer in 1997. He was, at one time, a director of more than 13 companies, including Pineland, as well as Portland Property Holdings Pty Ltd (Portland) and Oakland Property Holdings Pty Ltd (Oakland). 14Between 1998 and 2006, Portland and Oakland each acquired various properties, including the acquisition, by Portland, of a property at Burwood (the first Burwood property). In this period, the appellant guaranteed borrowings by Portland and Oakland from Colonial First State Investment Commercial Mortgage Lending (Colonial) in sums of $11 million and $50 million respectively. The appellant also guaranteed a loan by Citibank to Portland in the sum of $504,000 to acquire the first Burwood property and, in about 2005, the appellant borrowed $750,400 from HSBC to purchase another property at Burwood for $965,000 (the second Burwood property). 15The appellant came under financial pressure in early April 2008, when Colonial demanded certain payments from Oakland in respect of its loan facilities. The appellant was unable to comply with Colonial's demands, as he was unable to refinance the properties because of the impact of the global financial crisis on the availability of credit. By April 2008, Colonial was disinclined to provide any further extensions of time to Oakland to repay the facilities. A lending manager from Colonial advised the appellant to either sell off his assets or face the mortgagee entering into possession. He was also given to understand by Colonial that he needed to sell his assets to avoid going into liquidation. 16The giving of the undertaking to the Court on 15 August 2008 had been preceded by correspondence between the solicitors for the appellant and the respondent. On 13 June 2008, the respondent's solicitors sought a personal undertaking in writing that the appellant: "... will give our office 14 days notice of any intention of disposing of, encumbering or in any way dealing with any interest in his property in Burwood comprised in Folio Identifier ********." 17At that stage, the appellant had not been made a party to the proceedings and so, by letter dated 17 June 2008, the appellant's solicitors informed the respondent's solicitors that, as the appellant was not a party, they did not consider it appropriate that the appellant give an undertaking. However, they informed the respondent's solicitors that they were presently instructed that the appellant was not engaged in any activity to deal with his interest in the second Burwood property. 18In July 2008, the appellant instructed real estate agents to place certain properties, including the Burwood properties, for sale as " off market properties ". He was told at that time that the market was " terrible ", but that the agents would obtain the best price they could. 19In mid-July 2008, solicitors acting for Colonial and Perpetual Nominees advised the appellant's solicitors that all the loan facilities were in default and that their clients were taking advice as to what action to pursue as a result of that default. 20On 24 July 2008, the respondent's solicitors again sought an undertaking in the same terms as were contained in the letter of 13 June 2008. On 11 August 2008, the respondent's solicitors requested that the undertaking be given to the Court. In his affidavit, the appellant said that he recalled that, around this time, the respondent's solicitors had made a demand of him to give an undertaking to the Court regarding the second Burwood property. He said that on 14 August 2008, he attended the office of his solicitors where he quickly read the document and signed it. He said: "By reading the document quickly, I believed I had to give notice to the other side within 14 days of disposing of the property". 21The appellant's companies remained under financial pressure in the ensuing months. The appellant was also experiencing a number of personal difficulties. 22In December 2008, the real estate agents, who were seeking to sell the properties " off market ", received an offer for both Burwood properties. 23On 16 March 2009, the appellant signed the contract for the sale of the second Burwood property. 24As previously indicated, the appellant said in his affidavit that he believed he had 14 days from the date of signing the contract for sale in which to advise the respondent of the sale. The appellant said he intended to do so within that period. His evidence was that it was only on or about 25 March 2009, when he had a conversation with his solicitor concerning the second Burwood property, that his solicitor pointed out that he should have given 14 days notice of the sale in advance of, and not after, he had exchanged contracts. The appellant instructed his solicitor to remedy the situation as best she could and to make clear to the respondent that contracts had been exchanged and that the appellant would provide all of the proceeds of sale to the respondent. 25On 26 March 2009, the appellant's solicitors notified the respondent's solicitors that the second Burwood property was subject to a contract for sale. According to the appellant: "At that moment in time [26 March 2009], I realised I had breached the terms of my undertaking to the Supreme Court". 26The appellant said that, prior to this conversation with his solicitor, it was his belief, " based on " his " quick reading " of the undertaking, that he had 14 days to give notice to the other side. He continued: "I have read the undertaking and I can see and accept that notice was to be given at least 14 days in advance. I acknowledge that I was careless and reckless in not reading the document properly." 27The appellant apologised in his affidavit for committing a civil contempt and said that he would accept any penalty the Court imposed as a consequence of his failure to give notice to the respondent's solicitors of the exchange of contracts. 28The appellant was extensively cross-examined as to his understanding of the terms of the undertaking. Senior counsel for the respondent, having referred the appellant to his statement in his affidavit that he believed he had to give notice " within 14 days of disposing of the property ", questioned the appellant as follows: "Q. Now I want to give you an opportunity to admit to the court, I'm putting it to you that that evidence is false, that you did not hold the belief that you've sworn to there? A. Can you repeat the question? ... Q. It is not true. A. Not true to? Q. That you do not hold the belief that you had to give notice to the other side within 14 days of disposal of the property? A. Within or before? Q. ... I'm suggesting to you that the true position is that at that time, you believed that the undertaking you signed required you to give notice to the other side, 14 days before disposing of the property? A. I believe it's within 14 days of disposing of the property. Q. So you're saying that's after, 14 days after? A. That's correct." 29The appellant confirmed that he read the undertaking. He was then asked: "Q. And you had no difficulty understanding what was written there? A. I understand what you say but I don't - I did read through it but I'm not entirely understanding what is - when and he'd you say before or after or anything. You know, intention, I don't know what his intention to - when is the intention. ... Q. Is your evidence to his Honour that you did not understand what the undertaking meant when you signed? A. I understand the wording, but I don't understand what does it mean by intention and legal behind it, I don't understand much. I understand so of, I need to give 14 days notice but I don't know when. When is - when shall I give it. ... Q. And what I'm saying your evidence is, that the time you gave the undertaking and signed it, knowing it was going to be given to the court, you had a doubt about what the word intention meant and how the undertaking worked, is that correct? A. I understand the work but I don't understand the legal implication to the reference point at all. ... A. ... I honestly believe I understand I need to give 14 day notice. Q. But you didn't know when or from what time? A. I don't know. ... Q. ... did you ask the solicitor what the undertaking meant? A. No. A. ... All I understand is I need to give 14 day notice if I sell something, if I sell this property. Q. Let's be very clear about this, you didn't understand when you had to give the 14 days notice or what triggered that obligation, is that correct? A. I don't understand. Q. And you didn't ask your solicitor what it meant? A. No, I didn't." 30The appellant was then asked about his understanding of the terms of the undertaking at the time that he swore his affidavit: "Q. At the time you swore your affidavit of 2 June ... you had no doubt at all what the undertaking meant, did you? ... A. At the time, I swore this affidavit, my solicitor tell me you know at that time - you know before you know in around somewhere in March my solicitor he - I need to give 14 days in advance of my any intention to sell. But this is what I know. ... Q. So you believed you had breached the undertaking? A. Yes." 31His Honour expressly rejected the appellant's evidence that, at the time he read the undertaking, he believed he had to give notice to the other side within 14 days of disposing of the second Burwood property. The appellant also gave evidence as to the amount of the net proceeds of sale from the second Burwood property. In his affidavit, he said that, all that was left to him personally was the sum of $57,000. The appellant also said that the sale was an arm's length transaction to a third party through an agent and was not to someone he knew. He said that the buyer was a newly formed company and the sale was handled by Brent Roozendaal, a real estate agent, whom he did know. In cross-examination, when questioned whether he knew the purchasing entity, the appellant said, " Of course I don't know the new company ". When asked whether he knew anyone in the new company, he replied, " No, not at all ". 32Up to that point in the evidence, the appellant had made no mention of a joint venture agreement that had been entered into on 16 March 2009 by Floreat Park Holdings Pty Ltd (Floreat), Lexus Property Holdings Pty Ltd (Lexus) and Portland. The evidence established that Mr Roozendaal, the real estate agent who acted on the sale, was either a party to, or was associated with, the joint venture through Lexus. Further cross-examination of the appellant revealed not only the existence of the joint venture, but also that the appellant " controlled " Floreat (in the cross-examination references were made to " your company, Floreat, that you controlled "). The cross-examination also revealed that Lexus was a trustee company of a trust controlled by Mr Roozendaal's father. In addition, as previously mentioned, the appellant was the director of Portland. 33The joint venture agreement recited that Lexus had agreed to acquire both Burwood properties for the purpose of redevelopment. The proportion of ownership and entitlements for profits and loss of the joint venture and contribution for costs thereof were agreed in ratios of: 77.5 per cent for Floreat's interest and 22.5 per cent for Lexus' interest. The joint venture agreement was subject to exchange of contracts and the grant of a put option by Floreat to Lexus or its nominee, on or before the execution of the joint venture agreement. The joint venture agreement also contained a number of conditions subsequent. These included that: (i) the joint venture was conditional on the transfer of the additional properties held by Portland to Floreat, and (ii) completion of the purchase of the two Burwood properties on or before the " final date ", defined to be three years from the date of the agreement, 16 March 2009. 34According to the appellant, the real estate agent, Mr Roozendaal, had dictated the terms and conditions of the contract. 35The appellant was cross-examined as to his failure to inform the Court of the joint venture agreement, as follows: "Q. You didn't tell the Court in this affidavit that you had entered into, through a company that you controlled, a joint venture agreement which would involve developing that very block of land with other blocks? A. Yes. Q. Now, that's dishonest, can I put it to you, Mr Pang? A. Yes." (at [36]) 36In later cross-examination, the appellant said that he had made a mistake when he told the Court that the sale of the second Burwood property was an arm's length transaction. He also gave the following evidence: "Q. Mr Pang, I put it to you that not just a breach of your undertaking but the manner in which your affidavit has been prepared shows a cavalier disregard for the court's authority? A. I don't believe so. If myself has - everything is true on the affidavits. You may think this deed has any value but the deed is absolutely have no value because when you look at the joint venture it basically say if I'm not happy you take back the property at the same prices, what is the gain to me at all, there's no gain to me." 37Overall, the effect of the appellant's evidence in respect of the joint venture was that it had been forced onto him at a very late stage.

Proceedings before Einstein J 38The hearing of the contempt application proceeded before Einstein J in three parts. The first part of the hearing occurred on 19 June 2009 and involved his Honour determining, as a " preliminary matter ", whether the charge for contempt should be set aside. The appellant argued, at that point, that the undertaking was ambiguous and hence could not be enforced by contempt proceedings. His Honour held that the undertaking was not ambiguous: Bydand Holdings Pty Limited v Pineland Property Holdings Pty Limited & Ors [2009] NSWSC 579 (the first judgment). 39Having determined that the undertaking was not ambiguous, the second part of the hearing of the contempt application continued later that same day. The nature of that hearing is the subject of a significant part of the challenge on the appeal. So far as the position appears to have been understood at the time, it was recorded by his Honour in his judgment of 26 June 2009, Bydand Holdings Pty Limited v Pineland Property Holdings Pty Limited & Ors [2009] NSWSC 584 (the second judgment), at [3], as follows: "... Mr Pang's senior counsel then accepted on behalf of his client, that there had been a breach of the undertaking and sought to lead evidence [principally in the form of an extensive affidavit made by Mr Pang] the purpose of which approach was in suggested mitigation of any order that the Court might make." 40His Honour determined, at [50] of the second judgment, that the contempt charge had been proven beyond reasonable doubt and, at [51], that: "... [the appellant's] breach of the undertaking was a deliberate and contumacious one amounting to a very serious flouting of the Court's authority." 41The third part of the proceedings, which related to sentence, was heard and determined on 11 September 2009: Bydand Holdings Pty Limited v Pineland Property Holdings Pty Limited & Ors [2009] NSWSC 959 (the third judgment).

First issue on the appeal: Whether the terms of the undertaking were ambiguous 42His Honour's reasons, in respect of the meaning of the terms of the undertaking, are found in the first judgment. The appellant's argument before his Honour on this issue was that notice of an intention to do something could only be given after the intention was formed. Therefore, on this submission, it was not possible for the appellant to know what was meant by the reference in the undertaking to " giving of 14 days of his intention of disposing of, encumbering or in any way dealing with any interest in the property ". 43The appellant submitted to the trial judge that the ambiguity in the terms of the undertaking given by the appellant was obvious when contrasted with an undertaking, for example, in terms such as: "... 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." 44It was said that an undertaking in this form was common where a party was concerned to have notice of any proposed dealing with property by the opposing party: see judgment at [5]. The appellant submitted to the trial judge that particulars of the charge were framed as if the undertaking was in such terms. The appellant contended before his Honour that the terms of the undertaking given to the Court on 15 August 2008 were in very different terms and therefore could not bear the same meaning as an undertaking in the terms set out in [43] above. It followed that there was no contempt of court as alleged. The appellant also advanced an argument to his Honour that the undertaking, read literally, bore the meaning that " notice must be given 14 days prior to the formation of the intent to dispose, encumber or in any way deal with the property ". 45The trial judge held, at [12], that there was no substance in the appellant's contention that there was an ambiguity in the terms of the undertaking. His Honour also considered, at [13], that he could have regard to the surrounding circumstances in determining the meaning of the undertaking. In this regard, his Honour referred to correspondence which had passed between the solicitors for the respective parties and, in particular, the letter dated 13 June 2008, in which the respondent had sought a personal undertaking in terms that were identical to the undertaking given to the Court.

Arguments on the appeal 46The appellant contended that there were four possible interpretations of the undertaking: (1)Notice must be given 14 days prior to the formation of the intent to dispose, encumber or in any way deal with the property. (2)Notice must be given within 14 days of the formation of the intent to dispose, encumber or in any way deal with the property. These first two interpretations were versions of what was described as the literal interpretation of the document. (3)14 days notice of any intended dealing with the property must be given. On this interpretation, the giving of the notice is related in time to the actual dealing with the property, but requires 14 days notice before the actual dealing with the property. (4)The undertaking requires 14 days notice of any actual dealing with the property. On this construction, notice must be given 14 days after dealing with the property. This was the meaning of the undertaking as understood by the appellant until informed otherwise by his solicitor. The third and fourth meanings were advanced as interpretations based on a non-literal meaning of the undertaking. 47The appellant contended that the trial judge erred in finding that there was no ambiguity. It was an integral part of this argument that the trial judge had not identified the correct meaning of the undertaking. 48Senior counsel for the appellant acknowledged that the first interpretation was meaningless. For that reason, it can be set to one side. As to the second possible meaning, it was submitted that, on this construction, the appellant was required to give 14 days notice as soon as he had formed the intention of dealing with the property. This is also essentially meaningless, as senior counsel for the appellant acknowledged. In any event, it would be unworkable in practice as it would be difficult, if not impossible, to ascertain whether there had been a breach. Put simply, how would it be known when the intention was first formed? 49Senior counsel for the appellant conceded that the third interpretation was, arguably, at least, the usual approach to the construction of such an undertaking. Senior counsel acknowledged in this regard that, as an undertaking was given so as to protect the interests of the other party, notice was required before any dealing with the property. However, he submitted that the reference to the formation of the intent in the appellant's undertaking to the court was meaningless. It followed on this argument that this construction of the undertaking was not available. 50Senior counsel for the appellant acknowledged that the fourth construction was also difficult to maintain, because it ignored any notice of an intention. Nonetheless, he submitted that it exemplified the problem with the terms of the undertaking. As he submitted, once there was any reference to intention, difficulties of construction arose. 51It is a truism that an order of the court must be obeyed: Spokes v Banbury Board of Health (1865) LR 1 Eq 42 at 48-49. An undertaking has the force of a court order and must also be obeyed according to its terms. As this case relates to an undertaking and the principles under discussion apply to both orders and undertakings, it is convenient hereafter to refer to undertakings only. 52A person cannot be committed for contempt of court for breach of an order or undertaking, the terms of which are ambiguous: Australian Consolidated Press Ltd v Morgan [1965] HCA 21; 112 CLR 483. If on its plain reading, objectively construed, the undertaking is of uncertain or ambiguous meaning, there will be no contempt for a failure to obey it: Spokes v Banbury Board of Health at 48-49. Nor can a person be committed for contempt on the ground that upon one of two possible constructions of an undertaking, the person had breached the undertaking: see Australian Consolidated Press Ltd v Morgan per Owen J at 515-516, referring to the statement of Jenkins J in Redwing Ltd v Redwing Forest Products Ltd (1947) 177 LT 387. 53There is a distinction, however, between an undertaking the terms of which are ambiguous and the situation where there are difficulties of construction: see Redwing Ltd v Redwing Forest Products Ltd (1947) 177 LT 387 per Lindgren J at 121. In that case, Lindgren J pointed out that neither a contemnor's lack of understanding of the terms of the undertaking according to their true meaning nor lack of awareness that his or her conduct constituted a contempt means the alleged contemnor cannot be found guilty of contempt: cf Watkins v AJ Wright (Electrical) Ltd [1996] 3 All ER 31. 54In Kirkpatrick v Kotis [2004] NSWSC 1265; 62 NSWLR 567 Campbell J (as his Honour then was), was concerned with whether the terms of a court order were ambiguous. His Honour referred to the statement of Sir W Page Wood VC, in Spokes v Banbury Board of Health , that a court order must be obeyed unless it is ambiguous. 55Campbell J, at [55], then made the following observation: "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 none the less enforceable if it is the type of ambiguity that has no real risk of misleading. There will sometimes be orders which contain a term which has multiple meanings, but where that semantic ambiguity has no real risk of misleading. If there were to be an order addressed to a promoter of musical groups not in any way to be involved in the advertising or promotion of a band under some particular name, the order would be enforceable notwithstanding that a 'band' can sometimes be a rubber band, or a headband." (emphasis added) 56As these authorities indicate, various phrases have been used when seeking to determine whether the terms of an undertaking are ambiguous. These include: whether its terms were really not clear; whether the terms were such that a person reasonably trying to obey them would know what they meant; whether the person required to comply with the undertaking could be in real doubt as to what the undertaking meant: see Kirkpatrick v Kotis at [55]; whether the terms of the undertaking could mislead the person bound upon a plain reading of its words: see Spokes at 48-49. 57It is clear on the authorities that if the terms of an undertaking are truly ambiguous, there can be no contempt, because it cannot be said what it was that required compliance. It also appears to be common ground on the authorities that regardless of how the question is formulated, the terms of an undertaking are to be given a sensible meaning, consistent with its actual terms. It must be possible on that meaning for the undertaking to be capable of being obeyed. 58Although senior counsel for the appellant advanced the four suggested meanings of the undertaking set out at [46], in reality, only the third possible construction was practicably available if, in fact, the undertaking could be so construed. Senior counsel for the appellant submitted that that construction was not open. He argued that this construction disregarded the words of the undertaking which correlated the formation of an intention to do something and the giving of a specified period of notice of the formation of that intention. It followed that the undertaking could not sensibly be obeyed because it was difficult, if not impossible, to determine precisely when 'an intention' was formed to do something. 59It must be said that the terms of the undertaking given by the appellant leave something to be desired. Nonetheless, the Court should seek to give meaning to the undertaking, if its terms so permit. In this regard, the context in which the undertaking was given is relevant to its proper construction. The trial judge considered that that was an appropriate approach and referred, in particular, to the correspondence between the parties in May and June 2008. This correspondence demonstrated that in August 2008, the appellant was already familiar with the terms of the undertaking. I agree with his Honour that the earlier correspondence is relevant but, in my opinion, its relevance is in the doubt it casts upon the appellant's explanation of his non-compliance, namely, that he read the undertaking quickly. 60Even if the appellant did read the terms of the undertaking quickly, there were other surrounding circumstances of significance. First, it is apparent from the correspondence, and most particularly the terms of his solicitor's letter of 17 June 2008, that the appellant knew the undertaking (sought first as a personal undertaking, and then as an undertaking to the Court), was required to allay the respondent's concerns that the appellant would deal with the property. 61Secondly, it is not irrelevant, in my opinion, that the solicitors for both parties, and in particular, the appellant's solicitor, had no difficulty in understanding what was required by the undertaking. Thirdly, the effect of the appellant's affidavit evidence was that, when he was told what was required of him by the undertaking, he immediately understood what it meant, namely, that he was to give 14 days notice before he entered into any transaction or dealing with the property. In other words, once the appellant had the undertaking explained to him, he did not contend that the undertaking was meaningless or ambiguous, as later argued both before his Honour and again before this Court on appeal. 62Given this context, the undertaking could only mean and, in my view, was properly only understood by the appellant to mean, that he was to give notice to the respondent 14 days before he dealt with the property by sale, mortgage or otherwise. To find otherwise would be to give the undertaking no meaning at all. In my opinion, the undertaking did have meaning and no one could reasonably have been misled as to its proper meaning. Accordingly, I would reject the appellant's argument that the undertaking was ambiguous.

Second issue on the appeal: civil or criminal contempt?

The second judgment: trial judge's finding of contempt 63In his second judgment the trial judge found that the contempt had been proven beyond reasonable doubt and held that the breach was deliberate and contumacious. In making the latter finding, his Honour referred to the appellant's education and business background and added, at [53]: "His affidavit relied on to mitigate the effect of the contempt created a quite misleading impression that he had very limited equity left in [the second Burwood property] which was all that would be left to him on a sale. Very significantly the affidavit entirely concealed the ongoing interest which he had in the land through his sole directorship and shareholding of Floreat." (emphasis added) 64His Honour, at [28], found the appellant to be an " extraordinarily unsatisfactory witness ". The appellant's non-disclosure of his interest in the joint venture was central to that finding, causing his Honour to have considerable doubt as to any explanation the appellant gave as to his state of mind at the time he signed the undertaking to the Court. His Honour noted that a full and appropriate explanation of the appellant's conduct was extremely important. In the end result, his Honour rejected the appellant's evidence that, at the time he read the undertaking, he believed he had to give notice to the other side within 14 days of disposing of the second Burwood property (see at [40]). 65His Honour stood the matter over to 11 September 2009 for submissions on penalty. On that day, his Honour made orders in which he convicted the appellant of contempt and imposed a sentence of community service. The form of his Honour's orders raises the question whether the appellant was found to have committed a civil or criminal contempt. 66The appellant submitted that he had been convicted of a criminal contempt. He submitted that this was apparent from the fact of " conviction ", his Honour's statement that the contempt had been proven beyond reasonable doubt, his Honour's finding that the appellant's conduct was deliberate and contumacious, and the fact that his Honour had ordered a pre-sentence report from the Probation and Parole Service. The appellant further submitted it was apparent that the respondent had proceeded on the basis that it was alleging a criminal contempt, as it had urged his Honour to impose a sentence of imprisonment. The respondent informed the Court that it had understood that the trial judge had found a criminal contempt. For my part, I think his Honour did find a criminal contempt, substantially for the reasons advanced by the appellant. The one matter which does not illuminate the position one way or another is the criminal standard of proof upon which his Honour made his findings. As discussed below, the criminal standard applies to both civil and criminal contempt. 67Accepting that his Honour found a criminal contempt, the appellant's complaint was that his Honour had failed to make sufficient factual findings as to the nature and manner of his breach of the undertaking, in order to establish a criminal contempt. The appellant submitted that if any such findings were to be made, they ought to have been made at the time his Honour determined that the undertaking was not ambiguous. It followed, on the appellant's submission, that as his Honour made no finding at that point that the breach was contumacious, his Honour's finding of a criminal contempt was erroneous. In this regard, the appellant contended that the distinction drawn in the authorities was between contempt constituted by a breach (even if deliberate) of an undertaking, which was a civil contempt, and a criminal contempt, which required something more by way of contumacious conduct.

Distinction between civil and criminal contempt 68The appellant's argument recognises that there is a distinction between civil and criminal contempt: see Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd [1986] HCA 46; 161 CLR 98; Witham v Holloway [1995] HCA 3; 183 CLR 525 at 530, 531; Markisic v Commonwealth of Australia [2007] NSWCA 92; 69 NSWLR 737 at 744 ff; Matthews v ASIC [2009] NSWCA 155. See also John Fairfax Publications Pty Ltd v Attorney-General (NSW) [2000] NSWCA 198; 181 ALR 694. 69The case law acknowledges that the distinction is problematic, but, at least at a procedural level it is of importance. This was recognised by the plurality in Mudginberri who identified procedure, onus of proof, right of appeal, mode of punishment, privilege from arrest, pardon and power to release an offender as being relevant to the distinction. Their Honours noted, however, that differences in approach to these matters had largely disappeared. 70The Supreme Court Rules 1970, Pt 55 governs applications for contempt. Part 55, Div 3, r 6 provides that an application for punishment for contempt committed in connection with proceedings in court must be made by notice of motion in the proceedings. The notice of motion must be accompanied by a statement of charge: Pt 55, Div 3, r 7. Both these procedural rules were complied with in this case. Pursuant to Pt 55, Div 3, r 13(1) punishment for contempt may be by committal to a correctional centre or fine, or both. The rules do not differentiate between a civil or criminal contempt. That differentiation is only made in the Supreme Court Act 1970, s 101(6), discussed below. 71The distinction is of critical importance in New South Wales in relation to appeals from contempt proceedings. Pursuant to the Supreme Court Act , s 101(5) an appeal lies to the Court of Appeal from any judgment or order of the Court in a Division in any proceedings that relate to contempt (whether civil or criminal) of the Court or of any other court. Section 101(6) provides that subs (5) does not confer a right of appeal where a person is found not to have committed a criminal contempt, reflecting the criminal law principle that there is no appeal from an acquittal. Procedurally, the distinction determines whether the Court has jurisdiction to hear an appeal from a finding of contempt: see Hearne v Street [2008] HCA 36; 235 CLR 125.

The case law 72As already indicated, the appellant's argument accepted that there is a distinction between civil and criminal contempt. Indeed, the distinction was integral to his argument. However, before considering the way in which that argument was framed, it is necessary to understand the basis upon which the distinction is drawn and the circumstances in which the distinction retains any practical effect. As will become apparent, the distinction is an uncomfortable one. One proposition, however, is incontestable: in Australia, all contempts, whether characterised as civil or criminal, must be proven on the criminal standard of proof: Witham v Holloway at 542. Accordingly, this principle does not aid in the characterisation of particular conduct as a civil or criminal contempt. There are, however, a number of accepted concepts that do relate to the characterisation of a contempt as civil or criminal. 73A mere breach of an undertaking to the court is not a criminal contempt: see ACP v Morgan per Windeyer J at 497. Even a deliberate breach is not, per se, a criminal contempt: Scott v Scott [1913] AC 417 per Lord Atkinson; adopted by Windeyer J in ACP v Morgan at 497, although his Honour observed, at 501, that the line between a civil and criminal contempt cannot always be sharply drawn. Conduct could amount to both a civil and criminal contempt if the disobedience of a court order was deliberate. Read in context, Windeyer J's use of the word " deliberate " meant conduct that was more than just wilful, that is to say, was contumacious. 74If the breach is found to be contumacious, a criminal contempt will have been committed. This was explained by Barwick CJ in ACP v Morgan at 489, where his Honour commented that a contempt by breach of an undertaking may be accompanied by such contumacy or defiance so as to evidence a criminal as well as a civil contempt. His Honour emphasised that mere breach is not criminal. 75In Mudginberri the question was whether there was a power to impose a fine for a deliberate breach of a court order, it having been argued that a fine could only be imposed where the contempt was criminal. Their Honours in the plurality (Gibbs CJ, Mason, Wilson and Deane JJ) observed, at 106, that punishment for contempt serves two functions. The first is enforcement of the process and orders of the court, disobedience to which had been described as civil contempt. The second is punishment of other acts which impede the administration of justice, which had been described as criminal contempt. At 107, their Honours pointed out that the theoretical distinction between the two classes of contempt: " ... overlooks the underlying rationale of every exercise of the contempt power, namely that it is necessary to uphold and protect the effective administration of justice . Although the primary purpose in committing a defendant who disobeys an injunction is to enforce the injunction for the benefit of the plaintiff, another purpose is to protect the effective administration of justice by demonstrating that the court's orders will be enforced." (emphasis added) 76Their Honours stated, at 108, that the notion that disobedience to a court order becomes criminal when the primary purpose of exercising the power changes from vindication of the rights of the plaintiff to vindication of the authority of the court, was complex and artificial, as the two objects were inextricably intermixed: see Jennison v Baker [1972] 2 QB 52 per Salmon LJ at 64. Their Honours then observed, at 109, that there was much to be said for all contempts to be punished as if quasi-criminal in nature. After a review of the authorities, their Honours concluded, at 112-113, that a fine could be imposed for wilful disobedience of a court order, which achieved the purpose of both disciplining the defendant and vindicating the authority of the court. It was not necessary on that approach to classify the contempt as criminal. 77In Witham v Holloway the plurality (Brennan, Deane, Toohey and Gaudron JJ) endorsed the reasoning in Mudginberri , stating, at 534, that " punishment was punishment ", whether imposed in vindication of the authority of the court or for remedial or coercive purposes. It was because punishment was the usual outcome of successful proceedings for contempt that the charge of contempt required proof on the criminal standard. 78In Witham v Holloway the question was what standard of proof was required to establish a contempt. As stated earlier, the Court held that the criminal standard applied to all contempts. In seeking to resolve that question, their Honours commented upon the distinction between civil and criminal contempts. The plurality stated, at 530, that as a general proposition, civil contempt involved disobedience of a court order or breach of an undertaking in civil proceedings. By contrast, criminal contempt involved an obstruction or interference with the course of justice. Their Honours also noted that a prima facie civil contempt " amounts to a criminal contempt if it involves deliberate defiance or, as it is sometimes said, if it is contumacious ". 79Their Honours noted that the distinction was long standing, but that the characterisation of contempt as civil was one that had not always been embraced with enthusiasm. Their Honours then referred, with apparent approval, to the comment in Mudginberri that punishment of all contempts should be as if they were quasi-criminal in nature. They also referred to the further comment of Deane J in Hinch & Macquarie Broadcasting Holdings Ltd v Attorney-General (Vic) [1987] HCA 56; 164 CLR 15 at 49 that proceedings that can result in a fine or imprisonment following upon a finding of contempt " must realistically be seen as criminal in nature ". 80Their Honours again noted, at 532, that there were difficulties in drawing the distinction between civil and criminal contempts, not the least of which was that there was no true dichotomy. Their Honours observed, at 533, that: "... non-compliance with a court order necessarily constitutes an interference with the administration of justice even if the position can be remedied between the parties". Conversely, proceedings for enforcement have the correlative effect of vindicating the court's authority as well as having a remedial or coercive effect. As their Honours said, " punitive and remedial objects are, in the words of Salmon LJ 'inextricably intermixed'". 81The distinction between civil and criminal contempt was also in issue in Hearne v Street . In that case, the Court was concerned with the jurisdictional question whether an appeal lay to the New South Wales Court of Appeal from the trial judge's dismissal of the contempt application. In accordance with s 101(6), no appeal lay if the contempt was criminal. All members of the High Court acknowledged the continued relevance of the distinction between civil and criminal contempt, at least in New South Wales, having regard to the s 101(6) in particular. The question was thus one of characterisation of the conduct found to constitute the contempt. 82The plurality, Hayne, Heydon and Crennan JJ (Gleeson CJ expressing his agreement with their reasons on this question; and Kirby J agreeing that contempt had been established) observed of this argument, at [133]: "In the end the appellants departed from any suggestion that all contempts were criminal by supporting the dissenting opinion of Handley AJA that the question whether an appeal lay to the Court of Appeal from the dismissal of proceedings for contempt depended on whether 'it clearly appears that the proceedings are remedial or coercive in nature' as distinct from being punitive. The distinction between that which is remedial or coercive on the one hand and that which is punitive on the other corresponds with the distinction between seeking to ensure compliance with the relevant obligation and seeking to punish for past breaches of it. It is a distinction to be applied, as the parties agreed, bearing in mind the need to approach the application of the person seeking the remedies for contempt by reference to its substantial character, not to merely formal or incidental features. On the facts, Handley AJA considered that the purpose was not remedial or coercive, but punitive. On the other hand, the analysis of the facts made by the majority led them to the opposite view." (citations omitted) 83In Street & Ors v Hearne & Anor [2007] NSWCA 113; 70 NSWLR 231 Handley AJA, after referring to Witham v Holloway at 532-4, stated at [156]: "Although the separate category of civil contempt noted in Witham (at 532) 'where it clearly appears that the proceedings are remedial or coercive' in the interest of a private individual does not attract the civil onus it nevertheless offers a principled and workable distinction between civil and criminal contempt for present purposes. As the majority said in that case (at 532), breach of an order is not always a civil contempt." 84The " present purposes " to which his Honour referred was whether an appeal lay under s 101(5) from the dismissal of the contempt application. His Honour concluded, at [157]: "In my judgment the distinction determines whether an appeal lies to this Court from the dismissal of proceedings for contempt." 85The High Court accepted Handley AJA's approach at [156] where the question was whether an appeal lay to the Court of Appeal.

The appellant's argument 86Although the appellant's argument was advanced in terms that his Honour failed to find sufficient facts to enable him to conclude that there was a criminal contempt, much of the appellant's argument was directed to the manner in which the first and second part of the proceedings were conducted. The appellant submitted that, once his Honour was informed that there was no challenge to the charge after the finding that the terms of the undertaking were not ambiguous, he should have proceeded on the basis that there was a case for the appellant to answer. It was submitted that, if his Honour was dealing with a criminal contempt, he should have, at this stage, afforded the appellant the opportunity to adduce evidence and/or address submissions as to whether he was in fact guilty of a criminal contempt or whether his breach of the undertaking was a civil contempt. 87The appellant said that he was afforded no such opportunity and the case proceeded " in limbo as if there had been ... a finding of civil contempt ". It was submitted that, at this point, there was a procedural irregularity of a significant kind. The appellant contended that his Honour proceeded to deal with penalty and in doing so " leapt " from a case of civil contempt to finding contumacious conduct, resulting in a conviction and sentence for criminal contempt. 88The appellant also expressed his argument in a way that more accurately encapsulates the second issue on the appeal (ground 2). In ground 2 of the amended notice of appeal, the appellant pleaded that: "His Honour erred in that he did not find facts in regard to the nature and manner of the breach of the undertaking that could have established that the breach was a criminal contempt." 89The appellant's submission postulated that the first stage of the proceedings on 19 June was the 'liability' or 'conviction' part of the proceedings and that the second stage, later that day, related to penalty only. If a criminal contempt was to be found, the necessary findings had to made in the same part of the proceedings. The appellant submitted that, when determining that the undertaking was not ambiguous, his Honour did not make findings that the appellant's conduct was contumacious. As he did not do so, the contempt could only have been a civil contempt. 90The appellant submitted that his evidence was adduced only on sentence and therefore could not elevate to a criminal contempt that which was a civil contempt. The appellant further submitted that his Honour was directed by his senior counsel at trial to the fact that he was dealing with a civil contempt: see transcript of 19 June 2009. 91The appellant's argument on this point was directed to the manner in which the matter proceeded before his Honour. That process needs some amplification to understand the appellant's argument. When the matter first came before his Honour on the morning of 19 June, senior counsel for the respondent indicated that he wished to take his Honour to the admission in the appellant's affidavit at [60], where the appellant had apologised for committing a civil contempt. Senior counsel for the appellant interrupted and raised the challenge to the charge based upon the ambiguity argument. His comments to the Court are of significance, as they very much go to the heart of the second issue on the appeal. 92Senior counsel for the appellant informed his Honour that it was not proposed to read the appellant's affidavit except in respect of sentence or other order if his Honour was to conclude that the appellant was guilty of the contempt charge. Senior counsel for the appellant also informed his Honour that the only challenge to the charge was the question whether the undertaking to the Court was ambiguous. 93Senior counsel for the appellant informed his Honour that the appellant's affidavit evidence was relevant " if and only if " the trial judge decided the ambiguity question against him, so that the appellant was thereby " driven into a plea ". Senior counsel for the appellant explained to his Honour that if the matter was proceeding as a criminal trial, then at the stage of the proceedings where the contempt was challenged, a person in the appellant's position would enter a plea of not guilty and then, depending upon the finding on the issue raised in the not guilty plea, proceed to address the Court on sentence. However, in recognition of the civil aspects of the procedure, senior counsel stated that he proposed to raise the question as to whether the charge could be made on the basis of the ambiguity of the terms of the undertaking. Senior counsel informed his Honour that if that challenge failed, the appellant would " essentially proceed to lead evidence as on a plea ". 94In summarising the position, the trial judge noted that if he found that there was no ambiguity in the terms of the undertaking, the matter would continue before him as a plea. Senior counsel for the respondent then read the affidavit evidence upon which the respondent relied in support of the charge. He also indicated that he wished to rely upon parts of the evidence in the appellant's affidavit. Senior counsel for the appellant took objection on the basis that the appellant's affidavit was not before the Court at that stage and the affidavit was not read. Argument then proceeded on the question whether the terms of the undertaking were ambiguous. 95Later that morning, after his Honour had delivered judgment on the ambiguity issue, senior counsel for the appellant indicated to the Court that he accepted that there had been a breach of the undertaking and that the charge had been made out. Senior counsel for the appellant informed the Court that he sought to lead evidence in mitigation of " any order the Court might make ". This evidence was the appellant's affidavit. 96The appellant was then cross-examined, with what can only be described as devastating consequences for his credit. In his address to the Court, senior counsel for the appellant exhorted his Honour to find a civil contempt. The respondent, however, contended that the appellant was guilty of a criminal contempt. 97In his argument on the appeal, the appellant contended that his Honour erred at this stage of the process. He submitted that his Honour used the appellant's affidavit evidence and cross-examination, which had been given " as on sentence ", to elevate a civil contempt, to a finding of contumacious breach of the undertaking and thus a criminal contempt. As I have already indicated, it was an integral part of this submission that " prior to the entry of the plea ", neither the evidence adduced by the respondent nor any findings made by his Honour were sufficient for a finding of a criminal contempt. 98In my opinion, when both the legislation and the case law is understood, the complaint made by the appellant that, if he was to be convicted of criminal contempt, findings of contumacious behaviour were required at the time that his Honour delivered his judgment on the ambiguity issue, falls away. 99In the first place, the rules of court do not distinguish between civil and criminal contempts. The 'punishment' that the court may impose pursuant to the rules applies regardless of whether the contempt is characterised as civil or criminal. Further, proceedings for contempt are not conducted with the same strictures that apply to a criminal trial. For example, the person charged with the contempt is not arraigned. No 'formal plea' is taken. Criminal procedural rules do not apply. Rather, the hearing is governed by the court's civil procedural rules and there is no necessary strict division between the hearing of the contempt charge and the determination of matters relevant to sentence, although that division usually occurs in practice. 100In my opinion, it was not necessary for his Honour to make findings as to the nature of the contempt, that is, whether there was a technical breach, as contended by the appellant, or whether there was contumacious conduct, at the time that he determined the ambiguity issue. The 'severance' of the ambiguity issue was for convenience only. If his Honour had found for the appellant on that issue, that would have been the end of the matter. It would not have been necessary to continue with the balance of the hearing, which was essentially to determine the seriousness of the contempt. When his Honour did embark upon the second part of the proceedings, it was not suggested to him that he was not entitled to make a finding of a criminal contempt at that stage, although the appellant's senior counsel did indicate that he was adducing evidence " as on sentence ". Rather, what the appellant's senior counsel urged upon his Honour was that the appellant's conduct was not contumacious and that accordingly, his Honour should find a civil contempt only. Senior counsel for the respondent argued for a finding of criminal contempt. 101Whether a civil or criminal contempt, his Honour was required to be satisfied that a contempt had been committed on the criminal standard. The appellant's admission that he had breached the undertaking must be taken as an admission on that standard. The admission and the appellant's subsequent 'plea' was a plea to the charge laid. The charge laid alleged a breach of the undertaking. The appellant's plea was to that charge and no more. 102Any contest as to other matters, including the seriousness of the conduct, was to be established on the criminal standard: see R v Olbrich [1999] HCA 54; 199 CLR 270 where the Court stated that it cannot take into account matters adverse to the accused, unless those matters were proven beyond a reasonable doubt. As the appellant had not admitted a contumacious breach of the undertaking, it was incumbent upon his Honour to be so satisfied on the criminal standard before making such a finding. After hearing the evidence, his Honour found, on the criminal standard, that the breach was deliberate and contumacious. 103Given that the ultimate issue in the case was the seriousness of the contempt, a strict characterisation as civil or criminal contempt was not necessary. As the High Court intimated in Mudginberri and Witham v Holloway all contempts should be punished as if quasi-criminal in character. In Hinch Deane J considered that a finding of contempt that could result in a fine or punishment was essentially criminal in nature. Once the trial judge had determined that the terms of the undertaking were not ambiguous, the issue was what punishment ought to be imposed. In other words, the question was: how serious was the contempt? That was the question that was in issue in the second part of the proceedings, howsoever the parties sought to identify the process being undertaken. 104In my opinion, there was no flaw in the process in which his Honour engaged in finding a contumacious breach and therefore a criminal contempt in the second part of the hearing. Accordingly, I would reject the appellant's case on the second issue.

Third issue on the appeal: use that can be made of lies and denials 105The third issue on the appeal was advanced on the assumption that his Honour was at all times dealing with an alleged criminal contempt and that for a finding of criminal contempt to be made, his Honour had to be satisfied on the criminal standard that the appellant's conduct was contumacious. The appellant submitted that no consideration appears to have been given, either by his Honour, or by the respondent who had initiated the contempt proceedings, to the status of the evidence that was called and/or relied upon in the second part of the proceedings to prove that the appellant's conduct was contumacious. 106The appellant contended that as a matter of legal principle, his Honour's finding of a criminal contempt or of contumacious conduct was not open to him on the evidence. The error alleged was twofold: first, that his Honour used the appellant's lies (relating to the joint venture) as evidence of guilt contrary to the principle stated in Edwards v R [1993] HCA 63; 178 CLR 193; and secondly, again contrary to principle, that his Honour used denials of matters put to the appellant in cross-examination as the basis of findings of the facts asserted in the question: Steinberg v Federal Commissioner of Taxation [1975] HCA 63; 134 CLR 640; Mambare Pty Ltd trading as Valley Homes v Rebecca Irene Bell in her capacity as Administratrix of the Estate of the Late Simon James Bell & Anor [2006] NSWCA 332; (2006) Aust Torts Reports 81-867. See also Broken Hill Proprietary Company Ltd & Anor v Waugh (1988) 14 NSWLR 360 at 373. 107The appellant's first argument on this point was essentially based around the principle derived from Edwards that as a general rule, a lie is not evidence of guilt. In Edwards Brennan J, at 201, stated that if the prosecution relied upon an accused person telling a lie as an independent proof of guilt, the jury would have to be directed that, in order to convict on that basis, they needed to be satisfied on the criminal standard that the true inference to be drawn from the accused telling the lie was that he had thereby confessed his guilt. Brennan J observed that it would be a rare case in which such an inference was permissible. 108Deane, Dawson and Gaudron JJ stated, at 208, that although in some circumstances a finding that a person lied will necessarily involve acceptance of the contrary proposition to the lie, the fact that a person has lied does not of itself establish a specific contrary proposition. Their Honours pointed out that ordinarily, the telling of a lie will affect the credit of the person who tells it. The position, however, may be different where the person who tells the lie is the accused. Their Honours stated that in limited circumstances, a lie told by an accused may go further than being a mere matter of credit and may amount to conduct inconsistent with innocence and therefore amount to an implied admission of guilt. Their Honours continued, at 209: "When the telling of a lie by an accused amounts to an implied admission, the prosecution may rely upon it as independent evidence to 'convert what would otherwise have been insufficient into sufficient evidence of guilt' or as corroborative evidence." (citation omitted) 109Their Honours went on to explain that, in that circumstance, by telling the lie, the accused must be acting as if guilty. Importantly, their Honours pointed out, at 210, that the lie must relate to a material issue: "... because the telling of it must be explicable only on the basis that the truth would implicate the accused in the offence with which he is charged. It must be for that reason that he tells the lie. To say that the lie must spring from a realization or consciousness of guilt is really another way of saying the same thing. It is to say that the accused must be lying because he is conscious that 'if he tells the truth, the truth will convict him'." (citation omitted) 110Their Honours held that directions to the jury must also include an instruction that there may be reasons for the telling of the lie apart from the realisation of guilt, for example, to protect some other person or to avoid a consequence extraneous to the offence. If the jury determines that there is some explanation for the lie, then it cannot be used as an issue of guilt. 111The second basis upon which the appellant argued the third issue on the appeal was based upon the proposition that a denial of a particular fact which is misbelieved, does not establish the fact asserted. The proposition that disbelief could be used in this way was first raised in Lee v Russell [1961] WAR 103 where D'Arcy J stated, at 109: "The dictum, which relates to the fallacy of relying on disbelief in the testimony of a witness as providing positive support for the proposition that the contrary of such testimony is true, clearly has no application where the testimony affirms the truth of one of two alternative state of fact, one of which must be true and the other must be false, and where consequently disbelief in the evidence that one of the states of fact exists of necessity supports the existence of the other as a matter of logical inference." 112Later, in Steinberg v Federal Commissioner of Taxation , Gibbs J, in considering this proposition, held, at [5]: "...if the truth must lie between two alternative states of fact, disbelief in evidence that one of the state of facts exists may support the existence of the alternative state of facts: Lee v Russell." His Honour's comments were not expressly embraced by the other members of the Court, Barwick CJ and Mason J. Barwick CJ, at [18], stated simply that: "... disbelief does not afford evidence of the contrary of what is disbelieved, leaving on one side a doubtful case of a situation of two mutually exclusive possibilities." 113In Broken Hill Pty Co Ltd v Waugh , Clarke JA, at 366, considered Barwick CJ's comment in Steinberg as expressing " doubt " about the correctness of D'Arcy J's proposition. Clarke JA went on to note that " even if [D'Arcy J's proposition] be accepted as correct there is no basis for its application in this case ". 114Notwithstanding Clarke JA's comment in Waugh there is authority in this Court that disbelief of a witness' evidence may amount to evidence of the contrary, or point to the truth of the contrary proposition: see Tweed Shire Council v Hancomatic Music Pty Ltd [2007] NSWCA 350; (2007) Aust Tort Reports 81-922 per Mason P, McColl JA and Bell J at [166]. 115As the trial judge made no reference to these principles in his reasons, the appellant contended that it should be inferred that his Honour failed to have regard to the principles governing the use that could be made of his evidence and, it followed, failed to appropriately apply those principles. In Fleming v R [1998] HCA 68; 197 CLR 250 the High Court was concerned with an appeal from a criminal proceeding where the accused had elected to be tried by judge alone. The High Court held that a failure of a trial judge to give reasons was an error of law: see Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 277; Pettit v Dunkley [1971] 1 NSWLR 376 . The Court stated that unless it could be said of a judgment that either expressly, or by implication, a principle of law required to be applied was applied, it should be taken that the principle was not applied, rather than applied but not recorded. In Fleming , the trial judge had a statutory obligation to give reasons. Nonetheless, the Court held the principle to be of general application. 116The argument at this point again focused upon process. It was submitted that in a criminal trial, it is expected that a prosecutor will make clear the basis upon which evidence is to be used. In this case, the appellant submitted that if his Honour was being asked to consider the appellant's cross-examination (particularly in relation to his failure to refer to the joint venture) as being relevant to his credit, that should have been clearly indicated. I do not consider there is any substance in this point. It was obvious that a unmitigated attack was being made upon the appellant's credit. The point did not have to be spelt out to the trial judge and, in any event, his Honour, also in unmitigated terms, made an adverse credit finding against the appellant. 117More relevantly, it was submitted that if the appellant's evidence relating to the joint venture was to be relied upon by the respondent as a lie flowing from a consciousness of guilt, his Honour should have been told that the evidence was relied upon for that purpose. This was necessary, it was said, because of the requirement for his Honour to direct himself in accordance with the law as to the use that could be made of lies and the circumstances in which lies could be used as evidence of consciousness of guilt. 118There were two matters of relevance in the appellant's evidence on this question. The first was the appellant's evidence that he did not understand the terms of the undertaking and thought it meant something different. His Honour rejected this evidence. In my opinion, this is one of those cases where the rejection of evidence could only result in a finding to the contrary. The only inference that could be drawn from the rejection of that evidence was that the appellant understood the terms of the undertaking at the time that he signed it and nonetheless breached it. The inference is simply the obverse of the rejected evidence. 119The second matter of relevance in the appellant's evidence was his omission in his affidavit of any reference to the joint venture. This was a serious omission. The appellant conceded in cross-examination that it was dishonest not to have informed the Court of it. He sought to justify his omission by saying that the joint venture agreement had no value: see at [36] above. That was not correct, as his Honour explained. The appellant submitted, however, that his lies about this could not result in a finding that his breach was contumacious: at the most, it was a matter that went to credit. 120The use which could be made of the lies about the joint venture was, in fact, the subject of submissions to the trial judge. The respondent submitted that the appellant had deliberately omitted any mention of the joint venture agreement in his affidavit in the hope of reducing or minimising the view that the Court might take of his breach. Senior counsel for the appellant responded to this submission in the following terms: "... from the [the appellant's] decision and the evidence that he gave in the witness box, your Honour will accept that what he thought about the joint venture agreement was that it was a burden inflicted upon him as a way in which he had got his price. In fact viewed objectively, it again really didn't bear upon the nature of the breach. [The joint venture] was entered into on the same date as the contract because it was clearly collateral to the contract and was part of the way in which the price had been negotiated ... there is no suggestion that the people with whom [the appellant] were dealing were ... his people." 121Notwithstanding his Honour's failure in his reasons to refer to the governing principles in this area, he was clearly aware of the use the respective parties were seeking to make of the omission of any reference to the joint venture in the affidavit. 122I have already set out in some detail the relevant parts of his Honour's reasons. It is convenient, for the purposes of the issue presently under consideration, to consider not only the reasons but the structure of those reasons. 123His Honour, after making lengthy reference to the appellant's affidavit evidence, in a section of his judgment headed, " Assessing [the appellant's] credit " , stated, at [28], that the appellant was " an extraordinarily unsatisfactory witness ". His Honour then referred to the cross-examination in which the appellant said that the sale was an arm's length transaction. In the next section of the judgment headed, " The Joint Venture Agreement ", his Honour dealt with the evidence as to the joint venture. His Honour observed, at [38], that the appropriate inference was that the joint venture was a sophisticated, well-thought out transaction. His Honour then made the findings at [39]-[40], set out above. 124In the succeeding paragraphs, [41]-[44], his Honour referred to the following four matters that arose out of the appellant's cross-examination: firstly, the appellant's denial that he had a motive for breaching his undertaking in that he did not wish anybody to know that the joint venture was on foot and would involve potential profits to his company; secondly, the appellant's concession that the sale was not an arm's length transaction and to his explanation that his evidence in this regard was a mistake; thirdly, the contention put to the appellant in his cross-examination that he had deliberately breached the undertaking and had done so because he did not want the respondent and others to know about the joint venture, which he denied; and finally, the contention put to the appellant, set out above at [36], that he had not only breached his undertaking, but that the preparation of his affidavit showed " a cavalier disregard for the court's authority " which the appellant denied, stating that everything in the affidavit was true and that the joint venture had no value. 125His Honour in the next section of his judgment dealt with the topic, " T he importance of compliance with the Court's order ". His Honour stated, at [45]: "There is of course tremendous importance attached to securing compliance of an undertaking to the Court. In punishing for contempt the Court is vindicating the Court's authority itself." 126His Honour, under the heading, " A consideration of the Court's general jurisdiction to find a person guilty of contempt of Court " dealt with a series of cases dealing with contempt. The cases to which his Honour referred were all cases in which a finding of contempt had already been made and the Court was dealing expressly with penalty. 127Having referred to the case law, his Honour immediately moved to his findings in [50]-[51], that the contempt had been proven beyond reasonable doubt and was deliberate and contumacious. Although not expressly stated, it is clear that his Honour's finding was based upon the appellant's failure to disclose the existence of the joint venture entity. This is apparent from his Honour's reference to the " dishonest and incomplete affidavit " which " compounds [the appellant's] disrespect for the court ". 128In my opinion, the inference to be drawn from the omission in the appellant's affidavit as to the existence of the joint venture was that the appellant did not want the respondent to know that he had sold the property to his own interests. Although in cross-examination the appellant stated that the joint venture had in effect been forced upon him so as to obtain the best price, there is no evidence that that occurred " at the last moment ", notwithstanding that the joint venture agreement was not signed until the date of the contract for sale. As his Honour found, this was a well thought out joint venture agreement. 129His Honour's rejection of the appellant's state of mind when he read the undertaking was based upon the dishonest concealment of the joint venture. That led his Honour to infer that the breach of the undertaking was deliberate. That inference was available and indeed inevitable. In my opinion, the omission could have no other explanation. The fact that the appellant continued to lie about the matter under cross-examination reinforces this conclusion. Had the appellant given notice as was required pursuant to the terms of the undertaking, the respondent could have taken steps either to stop the sale or to cause any proceeds to be paid to it. It is likely that in attending to those matters, the existence of the joint venture would have come to the attention of the respondent. The appellant did not wish for that result. In my opinion, in accordance with the principles in Edwards (above at [108]), this was a case where the deception about the joint venture was evidence of conduct that was properly characterised as contumacious. 130Accordingly, I would reject the appellant's argument that his Honour erred in using lies as evidence of guilt and in making findings of fact based on the appellant's denials.

Fourth issue on the appeal: whether his Honour erred in finding a criminal contempt in that he failed to take into account, or viewed as immaterial, the absence of any proven benefit or gain to the appellant or any prejudice or loss to the respondent 131The appellant contended that his Honour failed to take into account, or viewed as immaterial, the absence of any proven benefit or gain to the appellant or any prejudice or loss to the respondent. The appellant contended that his Honour's failure to take account of this " highly relevant factor " when considering the charge of contempt led him to error. 132On the question of any gain or loss, his Honour was only guided by the appellant's statement in his affidavit that he would gain no benefit from the transaction. This statement was made in the face of the elaborate ruse the appellant used to maintain control over the Burwood property through various associated entities, which might be considered a benefit to the appellant of itself. Counsel for the respondent contended that submissions with respect to the benefits and prejudices " caused " by the contempt are only relevant in respect of sentence: see ASIC v Michalik [2004] NSWSC 1259; 52 ASCR 115 at [25]-[29] (in particular [29(vi)]) and not in respect of the prerequisite and necessarily anterior finding of contemptuous conduct. 133Before the trial judge, this question, of no or minimal benefit to the appellant and an absence of prejudice to the respondent was directed only to sentence. Accordingly, the appellant should not be permitted to advance the matter in this way on the appeal. I would reject the appellant's argument on the fourth issue.

Fifth issue on the appeal: failure to consider the discretion not to convict 134The appellant submitted that even if there was no error in the finding of a criminal contempt, the Court retained a discretion to decline to proceed to a conviction. He submitted that his Honour did not consider this possibility and that there was thus an error in his Honour's exercise of the discretion. 135The appellant was represented by highly respected senior counsel at trial. It was a matter for the appellant, through his legal counsel, to raise with his Honour the various sentencing options, including not proceeding to conviction. In my opinion, rather than this matter having been overlooked, I would infer that senior counsel for the appellant exercised his judgment in not making any such submission, given the serious dishonesty evidence from the appellant's evidence. That dishonesty not only established the contumacious nature of the contempt, but it also demonstrated, as his Honour found, that the appellant had not shown any genuine remorse or contrition. Rather, as his Honour stated, at [55], the appellant's untruthfulness in his affidavit compounded his disrespect for the Court's authority. Having regard to the evidence, the prospects of a " no conviction " submission were forlorn. I am of the opinion that the sentence imposed was appropriate and I see no warrant for appellate interference. Accordingly, I would reject the appellant's argument that his Honour erred in the exercise of his sentencing discretion. 136In my opinion, the appeal should be dismissed with costs. 137McCOLL JA : I have read the reasons in draft of Beazley JA and Lindgren AJA. I agree with each of their reasons and with the orders Beazley JA proposes. 138LINDGREN AJA: I have had the benefit of reading a draft of the reasons for judgment of Beazley JA. This saves me the necessity of summarising the factual and procedural background to the appeal. 139I agree that the appeal should be dismissed with costs. My reasons follow.

General 140The unusual circumstances that give rise to the appeal provide an illustration of unsatisfactory aspects of the distinction between civil and criminal contempt (see [166] ff below). In Witham v Holloway (1995) 183 CLR 525 at 534, Brennan, Deane, Toohey and Gaudron JJ said that the differences on which the distinction is based are, in significant respects, illusory. That case is authority for the proposition that all charges of contempt must be proved beyond reasonable doubt. Their Honours did not, however, reject the distinction between the two classes of contempt. They came close to doing so when they said (also at 534), adopting what Deane J had said in Hinch v Attorney-General (Vic) (1987) 164 CLR 15 at 49, that all proceedings for contempt "must realistically be seen as criminal in nature." 141The distinction between civil and criminal contempt is recognised in ss 101(5) and (6) and s 101A(11) of the Supreme Court Act 1970 (NSW). Section 101(5) provides for a right of appeal to the Court of Appeal from a judgment or order in any "proceedings that relate to contempt (whether civil or criminal) of the Court or of any other court". Sub-section (6) of s 101, however, excludes any right of appeal from a judgment or order "in any proceedings that relate to criminal contempt" by which the person charged with contempt is found not to have committed the contempt. 142Sub-section (11) of s 101A provides that s 101A applies to "criminal contempt only" and not to "civil contempt". The section provides that after the conclusion of contempt proceedings in which the alleged contemnor is found not to have committed contempt, the Attorney-General may submit a question of law arising from or in connection with the proceeding to the Court of Appeal. This provision can be seen as an ancillary to s 101(6). 143The present appeal provides a further illustration of the significance that the distinction between civil and criminal contempt can have. Senior Counsel for the appellant (Mr Pang) explained that his client's grievance is not so much the finding of contempt or the fact that Mr Pang has carried out the 100 hours of unpaid community service, but the finding of criminal contempt and the associated blemish on his client's record (see [176] below). 144Neither the notice of motion for contempt nor the statement of charge under SCR Pt 55 r 7 gave any indication, one way or the other, as to whether the charge was of civil contempt or criminal contempt. The expression "guilty of contempt of court" in the notice of motion did not do so. The notice of motion sought an order that Mr Pang be "punished for contempt by committal to prison or fine or both". This reflected the terms of SCR Pt 55 r 13(1), which provides that the Court may punish contempt where the contemnor is not a corporation by "committal to a correctional centre or fine or both". The rule does not confine these punishments to cases of criminal contempt. In NCR (Australia) Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118, Campbell J observed (at [21]) that Pt 55 r 13 did not necessarily signify that it would be in accordance with principle to impose a sentence of imprisonment for disobedience of an order made by the Court in a civil proceeding, but his Honour was not saying that this could never be done (see [178] below). The most that can be said here is that the motion put Mr Pang on notice of the fact that the charge was serious and did not exclude the possibility of a finding of criminal contempt. 145His Honour delivered three sets of reasons for judgment as follows: Date Nature Effect 19 June 2009 Construction On its proper construction Mr Pang's undertaking given to the Court on 14 August 2008 was sufficiently clear to support a charge of contempt. 26 June 2009 Conviction Finding in reasons that Mr Pang was guilty of deliberate and contumacious breach of his undertaking. 11 September 2009 Penalty Conviction and an order made for 100 hours of unpaid community service and an order for costs on indemnity basis.

146After the primary Judge delivered the Construction Judgment on 19 June 2009, senior counsel for Mr Pang said this: "Your Honour, as I've made clear, other than the issue that your Honour has now dealt with, there was no other contention by us but that the charge was made out and the consequences of your Honour's ruling on that preliminary point is that we accept that there has been a breach of the undertaking by the third defendant [Mr Pang], and we seek now to lead evidence which is in effect evidence in mitigation of any order that your Honour might make" 147An affidavit by Mr Pang was then read and he was cross-examined as to the genuineness of his explanation for the breach of the undertaking. 148Following the conclusion of the evidence, Senior Counsel for the parties addressed his Honour, inter alia, on the question of whether the contempt was or was not contumacious and therefore criminal (see [186] below). 149His Honour reserved his decision. He delivered the Conviction Judgment on 26 June 2009. He concluded by finding the breach of the undertaking to be a deliberate and contumacious one and ordering that Mr Pang attend a Probation and Parole Office, that a pre-sentence report be prepared by that Office to be supplied to the Court, and that 11 September 2009 be fixed as the date for submissions on sentence. 150Mr Pang submits that it was only by reason of those concluding paragraphs of his Honour's Conviction Judgment that there was any indication to him that he might be convicted of a criminal contempt. This, however, is not so - as noted above and at [186] below, the submissions made on his behalf preceding delivery of the Conviction Judgment addressed that very possibility. 151Against the above background I turn to the respective grounds of appeal.

First Ground of Appeal: was the undertaking sufficiently clear and free of ambiguity to be the basis for a charge of contempt ? 152In order to ground a contempt of court, an order or undertaking must be "clear", "precise" and "unambiguous": Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483. 153Mr Pang's undertaking (which Beazley JA sets out at [5]) leaves something to be desired, but it has only one sensible and reasonable meaning. 154Usually "14 days' notice of" a future event means notice given of the event at least 14 days before it occurs. But Mr Pang's undertaking was not expressed as 14 days' notice of an event. It was expressed as 14 days' notice of a state of mind - an intention. As will appear below, I think that on its proper construction the undertaking referred to "14 days' intention", that is, an intention that subsisted for 14 days. 155As Beazley JA observes, if the undertaking is construed as referring to a future event in the nature of the formation of the intention in question, it is nonsensical. In any event, the terms of the undertaking do not refer to 14 days' notice of the formation of an intention but simply to "14 days' notice of an intention". This is a less precise concept which invites resort to context and surrounding circumstances more readily than a better expressed undertaking would have done. 156In the construction of the undertaking, its purpose is properly influential. 157The undertaking was sought by the respondent (Bydand) in its interests. What interest could Bydand have had in being informed of Mr Pang's state of mind? The only answer that suggests itself is that its interest lay in being afforded an opportunity to seek an injunction preventing Mr Pang's intention from being implemented. 158In their letter dated 13 June 2008 to the solicitors for Mr Pang, Bydand's solicitors asked to be informed whether Mr Pang would give a personal undertaking in writing that he would give their office 14 days' notice of any intention of disposing of or encumbering or in any way dealing with any interest in the subject property ("transaction"). In their reply dated 17 June 2008, Mr Pang's solicitors advised that they did not think it appropriate that Mr Pang give any undertaking at that stage since he was not a party to the proceeding. They advised that if he were joined and certain conditions were satisfied they would consider it appropriate for him to consider providing "certain undertakings". They added: "We are presently instructed that Mr Pang is not engaged in any activity to deal with his interest in the Burwood property." Subsequent events are recounted by Beazley JA at [18] ff. 159The exchange of correspondence, and in particular the sentence quoted in the preceding paragraph, leads one to expect that the "certain undertakings" would inhibit Mr Pang's entering into a transaction without giving 14 days' prior notice to Bydand's solicitors of his intention to do so. Prior to any transaction taking place, it is only an intention of which notice can be given. 160How do the purpose and the expectation referred to above relate to the actual terms of Mr Pang's undertaking? According to those terms, the notice had to be given of an "intention", that is to say, of a state of mind that existed before any transaction occurred. Although the undertaking does not say "notice of an intention [that will endure] for 14 days" before any transaction is entered into, that is plainly its meaning. The only sensible meaning of the undertaking is that notice must be given of an intention that already exists and will continue to exist for at least a further 14 days before it ceases to exist by being realised. It is as if the undertaking said "notice of 14 days' intention" of any transaction. 161According to this construction, notice did not necessarily have to be given immediately the intention was formed but it had to be given and the intention then maintained for at least 14 days if a transaction was to be entered into. 162Mr Pang submits that the undertaking is one to give notice of a transaction within 14 days after it occurred. But notice of a transaction is not notice of an intention at all. 163Nor does it make sense to construe the undertaking as satisfied by a post-transaction notice that the intention had existed for 14 days prior to the transaction because the notice would not then serve its purpose. For the same reason, the undertaking could not be circumvented by Mr Pang's having possessed the intention for a period of less than fourteen days before entering into a transaction. The only sensible construction of the undertaking conforming to its purpose is that Mr Pang was required to hold the intention for 14 days after giving the notice before realising it. If the price of his doing so was the loss of a prospective purchaser, so be it. 164It is noteworthy that a better expressed undertaking along the lines "not to enter into a transaction without giving 14 days' prior notice of the intention to do so" necessarily refers to the giving of notice of an intention that exists and will be maintained for at least 14 days before any transaction is entered into. 165In my view, that is sufficiently clearly the meaning of the undertaking given by Mr Pang to support a charge of contempt of court.

Second ground of appeal: whether his Honour erred by not finding facts in regard to the nature and manner of Mr Pang's breach of the undertaking that could have established that his breach of it was a criminal contempt

Civil and criminal contempt 166The unsatisfactory distinction between civil and criminal contempt has been referred to by the High Court more than once: see, for example, Australian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 ( Mudginberri ) at 107 ff; Witham v Holloway (1995) 183 CLR 525 at 531 ff, 538 ff; Hearne v Street (2008) 235 CLR 125 at 131. 167This case concerns a breach of an undertaking. Ordinarily, breach of an order or undertaking in civil litigation is treated as a civil contempt only. It amounts to a criminal contempt, however, if it is accompanied by contumacy or defiance of the Court because it is then more obviously seen to be an obstruction of or interference with the administration of justice: see Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 at 499 per Barwick CJ, 499-500 per Windeyer J; Mudginberri at 108 per Gibbs CJ, Mason, Wilson and Deane JJ; Witham v Holloway at 530 per Brennan, Deane, Toohey and Gaudron JJ, 538-539 McHugh J. 168In Hearne v Street (2008) 235 CLR 125, the most recent of the authorities cited above, the High Court upheld this Court's conclusion that the breach of the undertaking given to the Court in that case was civil not criminal, and that an appeal lay to the Court of Appeal from the primary Judge's dismissal of the charges notwithstanding s 101(6) of the Supreme Court Act 1970 (NSW) noted at [141] above. 169At [133] (set out at [82] of Beazley JA's reasons) their Honours discussed the distinction between proceedings that relate to criminal contempt and proceedings that relate to civil contempt arising from a breach of an order undertaking. What their Honours said in that paragraph can be summarised as follows: Proceedings that relate to civil contempt Proceedings that relate to criminal contempt are are remedial or coercive in nature punitive in nature that is, they that is, they seek to ensure compliance with the relevant obligation seek to punish for past breaches of the relevant obligation

170It is not clear to me that at [133] their Honours were doing anything more than elaborating on what the appellants in Hearne v Street had come to accept once they had abandoned their suggestion that in the light of such authorities as Hinch v Attorney-General (Vic) (1987) 164 CLR 15 at 49 and Witham v Holloway (1995) 183 CLR 525 at 534, all proceedings for contempt must now be regarded as criminal. 171Be that as it may, the language used in Hearne v Street is explained by the fact that the issue being addressed was the jurisdictional issue raised by s101(5) and (6) of the Supreme Court Act 1970 (NSW). Those provisions refer to "proceedings that relate to" civil contempt or criminal contempt, as the case may be. The focus of attention is "proceedings". Where, as in the present case, there is no possibility of a contempt proceeding being brought to ensure compliance with an order or undertaking, the proceeding can only be seen as punitive, that is to say, as punishing for a past breach. Thus, the proceeding before the primary Judge in the present case, like that in Hearne v Street , was a proceeding relating to criminal contempt for the purpose of s 101(6) . It follows that no appeal would have lain from an acquittal of Mr Pang. 172This does not, however, resolve the question whether Mr Pang committed a criminal contempt. Whether he did depends on whether his breach of his undertaking was contumacious or defiant. The answer depends on the circumstances at the time of the breach, 16 March 2009. A person can commit a contempt that can be properly characterised as "criminal" or as "civil" although no proceeding is ever brought relating to it. 173The "purpose of the proceeding" inquiry is different from the "contumacy or defiance" inquiry and the two may yield different results. The fact that the purpose of a contempt proceeding is punitive and not remedial or coercive, says nothing as to whether conduct constituting the breach of an order or undertaking was in fact contumacious or defiant and therefore criminal. 174In the present case the primary Judge was entitled to find Mr Pang guilty of a criminal contempt only if he was properly satisfied beyond reasonable doubt on admissible evidence that Mr Pang breached his undertaking contumaciously or defiantly.

Did the primary Judge find Mr Pang guilty of a criminal contempt? 175The order made by his Honour (on 11 September 2009) was: "The Court convicts Mr Vincent Pang and orders that he carry out 100 hours of unpaid of [sic] community service." 176Nowhere did his Honour say in terms that his finding was one of criminal contempt. Exchanges between Senior Counsel for Mr Pang and the Bench on the present appeal prompted an inquiry from the Bench as to whether the conviction for contempt would be recorded as a part of a criminal record of Mr Pang (see [143] above). Those representing Mr Pang undertook to follow this up after the hearing of the appeal. The outcome of their inquiries was the issue of a "National Police Certificate" dated 6 September 2010 to the effect that there were "no 'disclosable court outcomes' or outstanding matters recorded against the name of [Mr Pang] within the records of police services in Australia". When forwarding a copy to the Court, however, Senior Counsel for Mr Pang submitted that whether or not his client might subsequently be recorded as having a criminal conviction for the contempt remained unknown but possible. 177In my opinion, the primary Judge did find Mr Pang guilty of a criminal contempt. 178I do not rely on the fact that his Honour made a community service order. A community service order can be made in respect of contempt under the Crimes (Sentencing Procedure) Act 1999 (NSW) or its predecessor the Sentencing Act 1989 (NSW): see Director General, Department of Fair Trading v Yang (2002) 132 A Crim R 438; [2002] NSWSC 754 and Attorney General for New South Wales v Whiley (1993) 31 NSWLR 314 respectively. Section 8 of the Crimes (Sentencing Procedure) Act 1999 provides that instead of imposing a sentence of imprisonment on an offender, a court may make a community service order directing the offender to perform community service work for a specified number of hours. Thus, the power to make a community service order is enlivened by the power to impose a sentence of imprisonment. But it has been said that the Court has power to imprison for civil contempt as well as for criminal contempt: see McHugh J in Witham v Holloway at 540 and the cases and treatises cited there by his Honour; and see Supreme Court Rules 1970 (NSW) Pt 55 r 13(1) which provides, without differentiating between criminal and civil contempt, that the Court may punish the contemnor, inter alia, by committal to a correctional centre. No doubt there are constraints as to the circumstances in which it would be a proper exercise of discretion to imprison for breach of an order or undertaking in a civil proceeding. I am not persuaded, however, that as a matter of power the Court can never do so, that is, even absent contumacy or defiance, although it may be difficult to conceive of circumstances in which it would be an appropriate exercise of discretion for it to do so. 179Nor do I rely on the primary Judge's application of the "beyond reasonable doubt" standard of proof, because that standard applies to civil contempts as well as to criminal contempts: Witham v Holloway . 180The reason why I think that his Honour found Mr Pang guilty of criminal contempt is that his finding (at [51]) that Mr Pang's breach of the undertaking was "a deliberate and contumacious one amounting to a very serious flouting of the Court's authority" conformed to: (a)the familiar test of the circumstances that convert a breach of an order or undertaking from what would otherwise be a civil contempt into a criminal contempt: see the authorities cited at [167] above; and (b)the acceptance of that test in the submissions that were put to his Honour (see [186] below). On the appeal Counsel for Bydand's submissions proceeded on the basis that the finding and conviction were of and for criminal contempt (T 15).

Primary Judge's findings and his Honour's conclusion of contumacy or defiance. 181I agree with Beazley JA (at [101]) that the statement made by Senior Counsel for Mr Pang immediately following delivery of the Construction Judgment on 19 June 2009 (set out at [146] above) was a concession that it was to be taken as proved beyond reasonable doubt that Mr Pang had breached the undertaking by doing what was alleged against him in the statement of charge. 182The Construction Judgment resolved a "preliminary question" that had been raised by Senior Counsel for Mr Pang at the commencement of the hearing of the charge on 19 June 2009. That question, whether the undertaking was too uncertain in its meaning to support a finding of contempt, was raised by him orally and was not the subject of any formal process. 183His Honour rejected the attack made by Senior Counsel for Mr Pang on the construction of the undertaking but made no order at that stage. The hearing of the substance of the charge then began. 184The issue whether the circumstances that accompanied Mr Pang's breach of the undertaking rendered that breach a criminal contempt remained an open issue, as did the question of penalty. This meant that Mr Pang's affidavit evidence and his cross-examination on it, being otherwise relevant, were admissible on both questions. 185Consistently with this view, in submissions at the end of the Conviction Hearing, Senior Counsel for Mr Pang submitted that the Court should not be persuaded to treat the breach "as a contumacious contempt or a criminal contempt". Again, he submitted that "contumacious contempt" requires "wilful defiance" and a setting up of a party "against the authority of the court", as where there are "repeated or flagrant acts in defiance" or ample opportunity to acknowledge the authority of the Court but a choice not to do so. Finally, Senior Counsel for Mr Pang submitted to his Honour that he could not contemplate the possibility of imprisonment unless he found that "it's a contumacious or criminal intent [sic - contempt?]. 186In my view, for the reasons given by Beazley JA at [86] - [104] and by me above, there can be no suggestion, based on either general considerations or on the circumstances touching the course of hearing before his Honour, that the evidence admitted after the making of the concession could be relied only as relevant to penalty and not as relevant to the characterisation of the contempt as contumacious or defiant and therefore criminal.

Third ground of appeal: whether his Honour erred by treating his rejection of certain evidence given by Mr Pang as establishing beyond reasonable doubt necessary elements of criminal contempt on which Bydand bore the onus of proof 187In relation to the use that his Honour made of Mr Pang's lies and denials, I agree with Beazley JA's reasons at [105] - [130] and add the following observations. 188Contrary to Mr Pang's submission, his Honour did not use Mr Pang's lie concerning the sale being at arm's length and his having no ongoing interest in the property, to construct the proof of a positive. Rather, his Honour used Mr Pang's lie as a supporting reason not to believe Mr Pang's testimony that when he gave the undertaking he understood that it required him to give notice within 14 days after disposing of the property (at [39], [40]). 189His Honour impliedly found (at [40]), as he was entitled to do, that Mr Pang correctly understood the effect of his undertaking at the time when he gave it, because the only alternative state of mind that Mr Pang asserted in evidence was one that, on his Honour's finding, Mr Pang did not have. 190No less than 17 paragraphs ([28] - [44]) of his Honour's reasons in the Conviction Judgment deal with the Joint Venture Agreement, the cross-examination of Mr Pang concerning it, and the effect of this aspect of the evidence on Mr Pang's credit. 191His Honour found that the Joint Venture Agreement, which was contemporaneous with the sale, was sophisticated, was well thought out, and must have required considerable time and thought (at (38]). 192Unfortunately, his Honour did not make express findings accepting the individual propositions that he records Senior Counsel for Bydand as having put to Mr Pang, but it is clear from his rejection of Mr Pang as a creditworthy witness and from what his Honour accepted to be the misleading nature of Mr Pang's affidavit, that he accepted the thrust of those propositions. 193In summary, his Honour implicitly found that from the outset Mr Pang had had a correct understanding of his undertaking and that he disposed of the property knowingly in breach of it and in circumstances in which he deliberately sought to conceal associated matters from Bydand. These findings were properly germane to his Honour's finding of contumacy. 194These findings of fact were sufficient to support the finding of contumacy in my view.

Fourth ground of appeal: whether his Honour erred by finding that the breach of the undertaking was a criminal contempt while failing to take into account absence of any benefit to Mr Pang or any detriment to Bydand as a result of the breach of the undertaking 195I agree with Beazley JA at [131] - [133].

Fifth ground of appeal: whether his Honour erred by failing to consider exercising the power to convict even though he was satisfied that contempt had been committed 196There is no substance in this ground of appeal for the reasons given by Beazley JA at [134] - [135].

Conclusion 197For the above reasons I agree that the appeal should be dismissed with costs.

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: 25 March 2011

Sentencing Act 1989(NSW)

deral Commissioner of Taxation [1975] HCA 63; 134 CLR 640 Street & Ors v Hearne & Anor [2007] NSWCA 113; 70 NSWLR 231 Tweed Shire Council v Hancomatic Music Pty Ltd [2007] NSWCA 350; (2007) Aust Tort Reports 81-922 Watkins v AJ Wright (Electrical) Ltd [1996] 3 All ER 31 Witham v Holloway [1995] HCA 3; 183 CLR 525 Category: Principal judgment Parties: Vincent Pang (Appellant) Bydand Holdings Pty Ltd (Respondent) Representation: Counsel: M Ramage QC; I McLachlan (Appellant) P T Russell (Respondent) Solicitors: Maxim Legal (Appellant) Barringer Leather Lawyers (Respondent) File Number(s): 2009/298557 Decision under appeal Citation: Bydand Holdings Pty Limited v Pineland Property Holdings Pty Limited & Ors [2009] NSWSC 584 Date of Decision: 2009-06-26 00:00:00 Before: Einstein J File Number(s): SC 50058/08

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