Contempt of Court - submission of no case made out of alleged breach of undertaking - proceedings instituted against parties and non-party - necessity to show intent to prevent or impede purpose of undertaking being achieved when proving contempt against non-party.

Construction of undertaking - no ambiguity - ordinary not technical meaning of words used.

Proceedings dismissed against non-party only - different issues involved in establishing contempt by parties as opposed to contempt by non-party.

Practice and Procedure - contempt of court - no case submission - standard of proof.

Attorney General v Times Newspapers Ltd. (1991) 2 All ER 398

Australasian Meat Industry Employees' Union v Mudginberri Station Pty. Ltd. [1986] HCA 46; (1986) 161 CLR 98

Australian Consolidated Press Limited v Morgan [1965] HCA 21; (1965) 112 CLR 483

Concrete Constructions Pty. Ltd. v Plumbers and Gasfitters Employees' Union of Australia [1987] FCA 117; (1987) 72 ALR 415

GTS Freight Management Pty. Limited v Transport Workers Union of Australia [1990] FCA 78; (1990) 25 FCR 296

Re Kerrison; Ex parte Official Trustee in Bankruptcy [1990] FCA 174; (1990) 25 FCR 233

Menzies v Australian Iron and Steel Ltd. (1952) SR (NSW) 62

Sun Newspapers Pty. Ltd. v Brisbane TV Ltd. [1989] FCA 534; (1989) 92 ALR 535

Counsel for Mr Peter Hackett: P.H. Morrison QC and J.P. Kimmins

Solicitors for Mr Peter Hackett: Freehill Hollingdale and Page

Solicitors for Mr John McCullagh: Morris Fletcher and Cross

THE COURT ORDERS THAT:

1. The notice of motion filed 2 March, 1992 is dismissed as

against Mr McCullagh.

2. The applicants to the notice of motion filed 2 March, 1992

pay Mr McCullagh's costs of and incidental to the contempt

proceedings on the usual party and party basis.

3. The notice of motion filed 2 March, 1992 is adjourned for

further hearing to Monday, 7 December, 1992.

4. The costs of today's directions hearing are costs in the

cause.

THE COURT DIRECTS THAT:

1. The first and second respondents file and serve their notice

of motion (foreshadowed today) seeking variation of the

order made by Drummond J on 14 May, 1992 in relation to the

provision of further security, together with supporting

affidavit material by 4.00 p.m. on Friday, 10 July, 1992.

2. Material in response to the notice of motion be filed and

served by 4.00 p.m. on Tuesday, 14 July, 1992.

3. If the first and second respondents fail to comply with

direction 2 herein, their cross-claim will be stayed.

4. The matter is adjourned for further directions to Mr

Justice Cooper and the parties are to be informed of the

time and date of that directions hearing.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

By Notice of Motion the first, second, fourth and fifth respondents in the action (whom I shall collectively refer to as "Jiejing") seek a determination that CCOM Pty. Ltd. and Messrs. Thomas and Garnham, three other parties in the action all of whom I will refer to as CCOM, are guilty of contempt in that they failed to comply with an undertaking given by counsel on their behalf on 23 December 1991. Jiejing has sought a determination that two solicitors, Messrs. Hackett and McCullagh, members of Stokes and Panettiere, the then solicitors for CCOM, are also guilty of contempt by assisting their clients to breach this undertaking. For reasons which I gave at the time in the course of the hearing I dismissed the application against Hackett with the consent of Jiejing.

2. The statement of charge particularised against CCOM alleges that they committed a contempt in that by themselves and by their agents Hackett and McCullagh, and in breach of the undertaking, they failed to delete from a computer hard disk on a computer situated at the offices of Messrs. Stokes and Panettiere copies of certain disks referred to in the said undertaking. The statement of charge as particularised against McCullagh alleges that he aided and abetted CCOM in committing contempt of the Federal Court in that with knowledge of the undertaking given on that day to the said court by CCOM to delete copies of certain disks referred to in the said undertaking from a computer hard disk on a computer situated at the offices of Messrs. Stokes and Panettiere and as agent of CCOM for the purpose of carrying out the said undertaking and in breach of the said undertaking he:

(1) failed and refused to delete the said copies; and

(2) thereafter, and until 28 December, 1991, failed and

refused to delete the said copies.

3. The undertaking given on 23 December was, as directed, recorded in writing and signed by the legal representatives of the parties. It is exhibit "AMW1" to Ms Warrens' affidavit. The only part that is presently relevant is paragraph A. That paragraph provides:

"A The Applicant and Third Respondents by their Counsel

undertake-

(1) To copy from the hard disk onto floppy disks,

all copies of the disks referred to below, which

were copied on 23 December 1991-

(i) Chinese WP Master ARC 8.2.89 Backup

Set B;

(ii) Final File Chinese 08.01.88;

(iii) Fastword Backup 09.02.85;

(iv) Chinese Program Backup 09.02.88;

(v) Chinese WP Master ARC 8.2.89 Backup

Set A;

(vi) Master DBF 7.2.89 1509;

(vii) Master DBF 7.2.89 5100;

(viii) Master DBF 7.2.89 10200.

(2) To retain the floppy disks and the floppy disk

copy of part of the disks referred to above made

earlier today in a sealed envelope until further

order;

(3) To delete the copies recorded on the hard disk;

(4) Save as set out above, not to make any further

copy or use of the disks."

4. Counsel for CCOM and counsel for McCullagh each submit that the undertaking recorded in paragraph A(3) of the exhibit is ambiguous in that it is fairly open to two different interpretations. On the authority of Australian Consolidated Press Limited v Morgan [1965] HCA 21; (1965) 112 CLR 483, it is submitted that there can therefore be no contempt.

5. Morgan was a case in which there was uncertainty as to which of a number of different meanings should be given to a phrase in an undertaking; see Owen J at page 514. His Honour did not attempt to identify what was the correct construction of the undertaking, but said at pages 515 and 516, after referring to the English decision of Redwing Ltd. v Redwing Forest Products Ltd. (1947) 177 LT 387:

"Jenkins J (in the Redwing case) refusing the application,

said: "I cannot say I think that the undertakings contained

in the order were clearly drawn and I cannot say I regard

the questions of construction involved in them as entirely

easy questions, but in my judgment, a defendant cannot be

committed for contempt on the ground that upon one of two

possible constructions of an undertaking being given he has

broken his undertaking. For the purpose of relief of this

character I think the undertaking must be clear and the

breach must be clear beyond all question".

With these statements of general principle I agree. In my

opinion the ambiguity of and lack of precision in the

appellant's undertaking which, it should be remembered, was

originally drawn by the respondents' solicitors in the

District Court proceedings are such that a finding of

contempt should not be made."

6. Windeyer J, at page 506, agreed with the decision of Owen J.

7. The other member of the court, Barwick C.J., at pages 491 and 492, took a different approach.

8. Although since the High Court's decision in Australasian Meat Industry Employees' Union v Mudginberri Station Pty. Ltd. [1986] HCA 46; (1986) 161 CLR 98, Morgan is no longer regarded as authority for all the propositions therein advanced, the view of the majority as to the effect of an ambiguity in an undertaking, upon the question of contempt where the undertaking is said to be breached is still accepted as authoritative; see Concrete Constructions Pty. Ltd. v Plumbers and Gasfitters Employees' Union of Australia [1987] FCA 117; (1987) 72 ALR 415 at 424.

9. A difficulty with the respondents' submission is that it necessarily requires me to deal as a threshold question with the interpretation of the undertaking, and to do this only on such of the applicants' evidence as has been held to be admissible. For reasons which I gave in the course of the hearing, I allowed each respondent to make a no-case submission at the close of the applicants' case, without requiring any respondent to elect not to call evidence. I am therefore in the position of not knowing if I have before me now all the evidence relevant to the interpretation of the undertaking which might be tendered if the matter were to run its ordinary course, with each respondent leading all the evidence on the topic that it wished.

10. But having ruled that the respondents do not have to elect, I think I must deal with their no-case submissions, even though this involves forming a view on the construction of the undertaking now, which view might possibly be altered if the submissions fail and the respondents lead evidence relevant to the construction of the undertaking.

11. I think that since the undertaking in paragraph A forms part of an agreed set of mutual undertakings on the basis of which the parties further agreed to ask that Jiejing's application to the court on 23 December 1991 be adjourned, the rules governing the interpretation of contracts should be used as a guide to the proper construction of this undertaking. These rules are conveniently summarised in chapters 2, 4, and 7 of Interpretation of Contracts by Lewison (1989), and in paragraphs 867 to 875 of Chitty on Contracts (General Principles) (26th edition, 1989).

12. Prima facie the words used in the written agreement are to be understood in their ordinary or popular sense in the search for the presumed intent of the parties to the agreement. However, few words have a single inflexible ordinary meaning, so the context in which they are used, and evidence of the background circumstances against which the agreement was made, which is always admissible as an aid to interpreting a contract, are of paramount significance in identifying the particular meaning to be adopted.

13. The critical question of construction is whether "delete," in the context of paragraph A(3) of the undertaking involves the notion of removing certain information permanently, or the notion of removing that information for practical purposes only. The ordinary meaning of the word is capable of the first connotation, while there is some evidence before me that indicates that the word in technical computer jargon has the second connotation.

14. I think the ordinary meaning of "delete" is to strike out. But the context and background circumstances must always govern its precise connotation in a contract. For example, when words are to be deleted from a document, the concern generally is to deal with the words in question so as to clearly indicate that the deleted words are to cease thereafter to have any operative effect: the words will be deleted just as effectively whether they are lined through, but still legible, or are erased completely. When, in contrast, a person has to delete not words from a document but a body of information, such as an inaccurate entry in another's credit record, what may very well be required is the permanent physical removal of the entry from the record. The ordinary meaning of the word is capable of both these connotations. I do not think this makes the word ambiguous. Words are ambiguous only when they have two or more primary meanings, each of which may be adopted without distortion of the language. "Delete" has, I think, only one primary meaning: "strike out." But what will be required to be done to give effect to that meaning will differ according to the context in which the word is used.

15. It is also well established that the context and the background evidence may each require a word in common usage to be given a special or technical meaning to better reflect the objective intent of the parties, and that evidence is admissible to prove that both parties jointly intended to use the word in a special sense.

16. The primary submission for McCullagh was that the word "delete" in the context of paragraph A(3) of the undertaking is ambiguous, in that it can have its ordinary meaning, but also the established technical meaning that I have referred to. There is evidence in the cross-examination of Dr Yates that in computer jargon the word "delete" generally means "delete logically, but not delete physically" - that is, delete in the sense of remove information stored on a computer disk, but only so as to make retrievability of the information difficult unless special readily available programmes are used, as distinct from removing the information permanently.

17. But there is also affidavit evidence that Dr. Yates was concerned immediately after the undertaking was given, and when it was being implemented by Mr McCullagh on behalf of CCOM, that the contentious information should be permanently removed from Stokes and Panettiere's hard disk - see paragraphs 37 and 39 of Ms Warren's affidavit. There is no evidence at all as to what CCOM's understanding of the term was when the undertaking was given; there is no evidence that anyone other than the lawyers was involved on either side in the framing of the undertakings. There is thus an absence of any evidentiary foundation for the conclusion that both parties were using the word with the technical meaning that Dr. Yates agreed it can bear in computer jargon. I therefore reject Mr McCullagh's primary submission.

18. How is paragraph A(3) of the undertaking to be read? The background circumstances against which the undertakings were given, so far as they appear in the limited evidence before me, are that in the course of inspection of Jiejing's material in the action, CCOM, by its solicitors, including Mr McCullagh, had, on 23 December 1991 copied onto the hard disk of the solicitors' computer, and also onto a floppy disk belonging to those solicitors, information recorded on certain of Jiejing's floppy disks, which Jiejing contended, over the objections of CCOM's solicitors, was not discoverable. Jiejing and CCOM are competitors, and the contentious information was regarded by Jiejing to be commercially sensitive, as CCOM well knew.

19. The dispute that arose as the result of this copying was temporarily resolved by the parties who, later that same day on 23 December, agreed to give to the court the undertakings and to adjourn for later determination the application then made on behalf of Jiejing in respect of what it said was CCOM's unauthorised copying of its private material.

20. I think that construed against this background, the parties' intention as set out in this undertaking, was that the contentious information was to be put and was to remain completely out of the reach of CCOM, unless and until the question of CCOM's disputed entitlement to that information was resolved in CCOM's favour by later court order, with CCOM's disputed claim of entitlement to this information being recognised, at least to the extent that it was agreed by the parties, that a copy of the information would be held on behalf of CCOM, in the meantime, in a sealed envelope by its solicitors.

21. That mutual intention is, I think, reflected in the language of paragraph A of the undertaking, if the words used in the paragraph, including A(3), are read as having their ordinary meaning.

22. Paragraph A(1) requires CCOM to copy the contentious information, which had earlier been copied onto Stokes and Panettiere's hard disk from Jiejing's disks listed at paragraph A(1)(i) to (viii) from that hard disk onto new floppy disks. Paragraph A(2) requires CCOM to place those new floppy disks and the other floppy disk onto which CCOM had, prior to giving the undertaking already copied part of the contentious information from the Jiejing disks, in a sealed envelope to await resolution of its disputed claim to entitlement to access to that contentious information. Paragraph A(3) requires CCOM to strike out the contentious information recorded on the Stokes and Panettiere hard disk from that hard disk in such a way as will ensure that, pending resolution of the dispute, CCOM will not have any access to that information. That is, to completely remove that information from the hard disk.

23. Paragraph A(4) fits into this scheme. The draftsmen of paragraph A of the undertaking have been completely consistent throughout that paragraph in their use of the expressions "the hard disk" in paragraphs A(1) and (3) as meaning the disk in the Stokes and Panettiere computer; "the floppy disks" in paragraphs A(1) - (2), as meaning those disks onto which information on the hard disk is required by the undertaking to be copied, and "the disks" in paragraphs A(1), (2) and (4), as meaning the Jiejing disks listed in paragraph A(1)(i) to (viii).

24. Moreover, whenever in paragraph A the draftsmen refer to the Jiejing disks, they are not, I think, referring to the disks as physical objects. They are using the expression, "the disks", as shorthand for the contentious information recorded on those disks. Paragraphs A(1) and (2) do not make sense unless the references therein to "the disks" are so read.

25. If the phrase "the disks" in paragraph A(4) is read as meaning the contentious information recorded on the Jiejing disks, as I think consistency requires, that last paragraph serves a useful purpose in the scheme of the undertaking. Paragraph A(1) allows CCOM to make certain copies of that contentious information, and paragraph A(4) declares that CCOM can make no other copy of it. Paragraphs A(2) and (3) allow and require CCOM to deal with that information in certain specified ways, while paragraph A(4) declares that CCOM must not deal with that information in any other way.

26. The expression, "the disks", in paragraph A(4) cannot, I think, be a reference to disks that include the hard disk. That would be a departure from the consistency and care with which expressions have been used in paragraphs A(1) - (3), to identify precisely which disks are there being referred to; nor can the parties have intended that after the steps required by paragraphs A(1) and (3) had been carried out, Stokes and Panettiere's hard disk was not to be further used.

27. It was also argued on behalf of CCOM that no time being fixed in the undertaking for compliance by CCOM with paragraph A, it therefore had a time from 23 December, which was reasonable in all the circumstances, to do that. It is common ground that CCOM, by its solicitors, had remedied all possible non-compliances by 28 December, so it is submitted that Jiejing cannot establish that the undertaking was ever breached.

28. I think that the period allowed to CCOM to comply with the undertaking, on its proper construction, was a very short one indeed, much shorter than a period of several days. I say that, having regard to the background, that the giving of the undertaking arose out of a dispute over CCOM's right to copy and have unrestricted access to commercially sensitive information belonging to Jiejing, which was followed immediately by an urgent application to the court, and I say that also in view of the fact that what CCOM had to do to comply with paragraph A of the undertaking, could very easily be done immediately.

29. CCOM was, in my view, required to implement paragraph A of the undertaking long before 28 December.

30. Another answer to this submission is that it is open to infer, firstly, that CCOM's agents, the solicitors who were given responsibility for ensuring compliance with CCOM's undertaking on its behalf, asserted on 23 December and again on 24 December, that what Mr McCullagh had done on 23 December amounted to full compliance by CCOM with the undertaking: see paragraphs 39, 44 and 80 and exhibit "AMW3" to Ms Warren's affidavit, and, secondly, that it was only the ventilation of the matter in the court on 27 December that caused CCOM, by its solicitors, to take any further action at all. Whether CCOM complied with the undertaking therefore falls to be decided, by what was done on its behalf on the afternoon of 23 December.

31. On the interpretation which I think the undertaking in paragraph A(3) bears, and given that the applicants' evidence is well able to permit of a finding that the undertaking so construed was breached, it follows that the no case submission on behalf of CCOM must also be rejected.

32. The next question is whether on the assumption that paragraph A(3) of the undertaking required CCOM to delete, in the sense of removing completely the contentious information from the hard disk of the computer in Mr McCullagh's office, and in view of the clear evidence that that was not done until after 28 December, that is, after that omission was raised in court on 27 December, Mr McCullagh has a case to answer.

33. His position is different from that of CCOM and Messrs. Thomas and Garnham. Unlike Mr McCullagh, the latter are all parties to the action and are in terms bound by the undertaking. They having given the undertaking to the court, all that has to be proved to show that they are guilty of contempt is that there was a failure - and the reasons why are immaterial - for that undertaking to be carried into effect. Their liability for contempt is strict, although the intention with which the omission was made will be very relevant to the question of penalty if any: see Attorney General v Times Newspapers Ltd. (1991) 2 All ER 398 at 414 to 415.

34. Mr McCullagh however is not a party to the action and is not bound by the undertaking. Such a person is not subject to the strict liability in contempt which rests upon a person bound by an undertaking that is breached. However a person who is not in terms bound by an undertaking but who knows of it and who then does something which disrupts the situation created by the undertaking may, but not necessarily must, be guilty of contempt of court.

35. Such a person will be guilty of contempt where his conduct, coupled with his knowledge of the undertaking, shows that he is flouting the authority of the court by doing something which he knows will prevent the undertaking given to the court achieving its intended object. Such a person will be in contempt, because he has: "knowingly impeded or interfered with the administration of justice by the court in the action between A and B": see Attorney General v Times Newspapers Ltd. at page 405 per Lord Brandon. See also Seaward v Paterson (1897) 1 Ch 545 at 555 and Z Ltd. v A (1982) QB 558 at 578.

36. In Attorney General v Times Newspapers Ltd., Lord Oliver, at page 419, speaking of the circumstances in which a determination could be made that a stranger to a court order which had been breached was guilty of contempt, said:

"... a more dependable guide is to be found in the way in

which the gravamen of the offence is expressed in the

respondent's case and which, I think must be based upon the

speeches in this House in the Leveller Magazine case (1979)

1 All ER 745, (1979) AC 440: 'The publication ...

frustrates, thwarts, or subverts the purpose -

(and I interpolate that Lord Oliver emphasised that phrase) -

of the court's order and thereby interferes with the due

administration of justice in the particular action.'

'Purpose', in this context, refers, of course, not to the

litigant's purpose in obtaining the order or in fighting the

action but to the purpose which, in seeking to administer

justice between the parties in the particular litigation of

which it had become seized, the court was intending to

fulfil."

37. I think the statement by Lord Oliver most clearly identifies the features that must be present in the conduct of a stranger to an order of the court or an undertaking given to the court before he can be found guilty of contempt where the order or undertaking is breached.

38. It will usually be clear from the wording of the order or undertaking what was the purpose that the court was intending to fulfil in the course of administering justice between the parties in the particular litigation, but the present case is more complex.

39. What must be proved to make out a contempt where, as here, a stranger to the undertaking knows that it has been given in the action and does acts which on the true construction of the undertaking prevent it achieving its object, but which that stranger honestly believes on his own understanding of the meaning of the undertaking did not interfere with its object or purpose?

40. In Attorney General v Times Newspapers Ltd. Lord Oliver, in rejecting a submission that because of the uncertainty which would otherwise arise in the context of a criminal offence, the purpose of an order can only be gathered from its terms, said at page 420:

"Where there is room for genuine doubt about what the

court's purpose is, then the party charged with contempt is

likely to escape liability, not because of failure to prove

the actus reus but for want of the necessary mens rea, for

an intention to frustrate the purpose of the court would be

difficult to establish if the purpose itself was not either

known or obvious."

41. There will be room for genuine doubt about what the court's purpose is if the construction of an undertaking is not so clear as to admit of only one interpretation, and the stranger accused of being in contempt by reason of conduct that interferes with the operation of the undertaking, has acted in accordance with any interpretation of the undertaking that is reasonably open in a way which would involve no interference with its operation, as so interpreted. That is so, as Lord Oliver said, because there would be a want of the necessary mens rea.

42. And if a stranger, in fact, interferes with the operation of an undertaking given in an action between A and B, but does so in the honest but mistaken belief that the undertaking has a particular meaning which, if correct, would mean that his conduct could not be an interference with this operation, then there is equally a lack of the mens rea necessary to put him in contempt. This is so, in my view, no matter how unreasonable the stranger's mistaken belief is, so long as it is a belief that is honestly held.

43. I think the standard of proof that the applicant has to meet is proof beyond reasonable doubt. Subsequent to the High Court decision in Australasian Meat Industry Employees' Union v Mudginberri Station Pty. Ltd., Pincus J in Sun Newspapers Pty. Ltd. v Brisbane TV Ltd. [1989] FCA 534; (1989) 92 ALR 535 held that the standard of proof of contempt constituted by breach of a court order was proof beyond reasonable doubt. Wilcox J in Concrete Constructions Pty. Ltd. v Plumbers and Gasfitters Employees' Union (No. 2) [1987] FCA 117; (1987) 15 FCR 64 at pages 83-84, expressed a strong preference for a similar view without, however, finally deciding the matter.

44. As against that, Keely J in GTS Freight Management Pty Limited v Transport Workers Union of Australia [1990] FCA 78; (1990) 25 FCR 296 at page 301, in a similar kind of case, after mentioning briefly the Mudginberri and the Concrete Construction cases, said:

"In the time available I have not been able to give this

question as much consideration as is desirable, in the light

of the High Court's decision in Mudginberri (supra). In the

circumstances I have decided that, in determining the

motion, the civil standard of proof should be applied ...".

45. O'Loughlin J in Re Kerrison; Ex parte Official Trustee in Bankruptcy [1990] FCA 174; (1990) 25 FCR 233, after referring to the GTS Freight Management case, referred to the particular nature of the proceedings before him, i.e., an application in respect of alleged contempt constituted by the bankrupt's failure to comply with s. 129(4) of the Bankruptcy Act 1966 (Cth), which by virtue of s. 129(5) constitutes a contempt of court.

46. His Honour went on to hold that the civil standard of proof, applied in accordance with the statements in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336, rather than the criminal standard of proof was the appropriate standard in relation to this "statutory form of contempt" as he described it.

47. I think I should follow the recent decision of Pincus J supported by the comments of Wilcox J in preference to the conclusion expressed briefly by Keely J, in circumstances where he stated he had been unable to give full consideration to the matter. I do not think the decision of O'Loughlin J is of direct relevance to the present problem.

48. Since there is evidence to support a finding that Mr McCullagh's actions were sufficient to amount to a contempt by him provided there is sufficient proof that he had the requisite intent, the question now for decision comes down to this: is there sufficient evidence to entitle the court to find beyond reasonable doubt that Mr McCullagh intended to prevent or impede the purpose of the undertaking, as I have identified it in what I have already said, from being achieved?

49. In answering this question I must assume that the applicants' evidence is accepted in its entirety, I must draw all inferences favourable to the applicants that are open on the evidence, and I must make my determination on the basis of such evidence and inferences, ignoring all evidence and inferences that can be drawn from the evidence favourable to Mr McCullagh: see Trade Practices Commission v Allied Mills Industries Pty. Ltd. (No. 3), (1981) 37 ALR 225 at 240, Hocking v Bell [1945] HCA 16; (1945) 71 CLR 430 at 442-443, and the article by Mr Justice H.H. Glass, "The Insufficiency of Evidence to Raise a Case to Answer" (1981) 55 ALJ 842 at 843.

50. Such evidence as there is on the subject of Mr McCullagh's intent is (subject to one qualification) all one way in pointing to him believing that by carrying out the deletions described by Ms Warren in paragraphs 25 to 30, 35 and 40 to 43 of her affidavit, he had done all that was required on the part of CCOM to comply with the undertaking, and in particular with paragraph A(3).

51. Ms Warren's evidence, in her affidavit at paragraph 39, shows that Mr McCullagh was aware, on 23 December, that the deletion exercise he had carried out did not completely remove the contentious information from his firm's computer hard disk. Better evidence at paragraphs 36 and 44 and in exhibit "AMW3" shows that Mr McCullagh then took the position that he had done all that was required, notwithstanding this. There is no evidence before me to indicate that Mr McCullagh did not honestly believe this. The evidence of Mr Owens, at paragraphs 29, 30 and 32 of his affidavit, points to Mr McCullagh honestly having this belief.

52. I do not think there is any significant inconsistency between what Mr McCullagh had to say to Mr Owens in the course of the conversation on 27 December 1991 to the effect that he was unable personally to retrieve the contentious information from the hard disk, and what he had to say about it taking him an estimated 30 hours if he were to try to retrieve the information, a point he repeated when he spoke to Dr Yates the next day.

53. The qualification on the evidence I have mentioned is this: in paragraph 38 of Mr Owens' affidavit and 41 of Ms Warren's affidavit each reports what Mr McCullagh said to them on separate occasions about his clients not being permitted to use his firm's computer on 23 December. It is true that these two statements by Mr McCullagh are mutually inconsistent, but I do not think that, even if all the other evidence I have referred to as to Mr McCullagh's understanding of the undertaking is ignored, this particular inconsistency is capable of supporting a conclusion adverse to him on the question of his intent, even for present purposes: it is, at best for Jiejing, an inconsistency with respect to a matter entirely remote from the question of Mr McCullagh's understanding of the import of the undertaking. It is not sufficient ground to require all the other evidence as to his state of mind to be ignored.

54. I therefore uphold the alternative submission advanced on behalf of Mr McCullagh, that he has no case to answer.

55. The applicants' final submission is that where one respondent is entitled to succeed on its no case submission, but another respondent fails, the case against the otherwise successful respondent should not be dismissed at that stage, but only if there is still no case to answer by him at the close of any evidence which may be led by the respondent against whom a case has been found.

56. The applicant relies on Menzies v Australian Iron and Steel Ltd. (1952) 52 SR (NSW) 62. This decision was applied in Trade Practices Commission v George Weston Foods Ltd. (No. 2) [1980] FCA 16; (1980) 43 FLR 55 at page 62, a case in which pecuniary penalties were sought against a number of respondents for breaches of s. 45 of the Trade Practices Act 1974 (Cth). The point was, however, left open by Sheppard J in Trade Practices Commission v Allied Mills Industries Pty. Ltd. (No. 3) (1981) 37 ALR 225 at pages 231 and 254, a case which also involved claims for pecuniary penalties under the Trade Practices Act.

57. The Menzies case involved a claim against defendants sued as concurrent tortfeasors who were:

"... diametrically opposed in interest, each seeking to

exculpate himself and to establish that the other defendant

was the person solely responsible for the damage which has

occurred." (at page 64)

58. Street C.J., in giving the judgment of the court, said:

"Under those circumstances it would seem that the ordinary

rule, applicable in the case of a single defendant, is not

an appropriate rule to follow where two defendants opposed

in interest are concerned, ..." (at page 64)

59. The practice which the applicants urge me to follow is clearly appropriate in the sort of situation that arose in Menzies. However, I do not think there is any justification for applying it to the present case where the issues that have to be established to make out a case of contempt against CCOM as persons bound by an undertaking, differ from those required to be made out to establish a case of contempt against Mr McCullagh, a stranger to the undertaking.

60. The proper construction of the undertaking is, of course, relevant to the cases made against both groups, but that is the only issue common to both. Any evidence that CCOM might be expected to lead on the issue of the proper interpretation of the undertaking could not strengthen, in my view, the case against Mr McCullagh, so far as it depended upon that issue, but only weaken it by going to show that paragraph A(3) of the undertaking imposed a less onerous obligation on CCOM than that which I have concluded it does impose on them.

61. It is extremely unlikely that any evidence that CCOM might lead would go to strengthen the applicants' case against Mr McCullagh on the other issue concerning Mr McCullagh, that of his own state of mind. CCOM and Mr McCullagh are not in any relevant respect opposed in interest.

62. I therefore propose to dismiss the case against Mr McCullagh at this stage, but allow the case to proceed against CCOM and Messrs. Thomas and Garnham. I observe that in deciding to allow the case against CCOM and Messrs. Thomas and Garnham to proceed, I take the view that the applicants' evidence is, at its highest, sufficient to permit of nothing more than a finding that they committed a technical contempt of court in that they are parties to an undertaking which was breached.

63. The evidence, if it remains in its present state, and I emphasis those last words, could not permit the court at the end of the day to find that there was a deliberate or wilful breach of the undertaking for which they are answerable.

64. Application has been made for a costs order on a solicitor and client basis essentially on the ground that the contempt proceedings were brought, and this applies not only to Mr McCullagh but in relation to all respondents, for a purpose revealed in Dr Yates' cross-examination as one wholly collateral to any purpose relevant to the question of contempt or no contempt.

65. On the other hand, Mr McCullagh was in the position of the person who had the major responsibility for taking action to ensure that the undertaking binding CCOM was complied with.

66. I formed a certain view as to the proper construction of the undertaking, an issue upon which Mr McCullagh has lost and, looking at those various considerations, I think that the ordinary costs order is the appropriate one in these circumstances.