REA Group Limited v Fairfax Media Limited - [2018] FCA 633 - FCA 2018 case summary — Zoe

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REA Group Limited v Fairfax Media Limited

[2018] FCA 633

Federal Court of Australia|2018-05-07|Before: Murphy J

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Source facts

Court

Federal Court of Australia

Decision date

2018-05-07

Before

Murphy J

Source

Original judgment source is linked above.

Judgment (16 paragraphs)

[1]

Fairfax Media Limited (Fairfax) is guilty of contempt of court by its conduct in publishing an advertisement in the Sydney Morning Herald newspaper on 13 February 2016 which contained the phrases "#1 property app in Australia" and "the most property listings in Sydney are on Domain", contrary to an undertaking not to publish such phrases it gave to the Court on 12 February 2016. THE COURT ORDERS THAT:
The Respondent pay a fine in the amount of $15,000 to the Registrar of the Federal Court of Australia, to be paid within 28 days of the date of this order.
The Respondent pay the Applicant's costs of this proceeding on an indemnity basis. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

[2]

INTRODUCTION 1 The applicant in this proceeding, REA Group Limited (REA), is a publicly listed digital media business which, amongst other things, owns and operates the property listings website www.realestate.com.au and associated mobile website and app. It is in direct competition with the respondent Fairfax Media Limited (Fairfax) which, through its wholly owned subsidiary the Domain Group (Domain), operates the property listings website www.domain.com.au and associated mobile website and app. REA and Domain are trade rivals in direct competition for revenue from advertising properties for sale or lease (property listings) on their respective websites and apps. 2 By an amended statement of charge dated 2 March 2016 REA charges Fairfax with contempt of court for two breaches of an undertaking it gave to the Court on 12 February 2016 and extended on 17 February 2016. The breaches, which Fairfax does not deny, concern Fairfax's publication of an advertisement in the Sydney Morning Herald on 13 February 2016 (the Print Advertisement) and on a billboard in Sydney for a short period up to 27 February 2016 (the Billboard Advertisement). Both advertisements contained phrases which Fairfax had undertaken it would not publish pending hearing and determination of a proceeding brought by REA against Fairfax for misleading or deceptive conduct. 3 Fairfax submits that both publications were inadvertent, accidental and unintentional. It argues that it did not fail to act with reasonable diligence and denies that it is guilty of civil contempt. It contends that REA did not prove to the requisite standard that Fairfax breached the terms of the undertakings in a deliberate and voluntary way. 4 For the reasons I explain I accept that Fairfax did not intend to breach the undertakings but it had a duty to take adequate and continuing steps to ensure that it complied with them. In publishing the Print Advertisement I consider Fairfax failed to act with reasonable diligence to ensure compliance with the undertaking it gave and I find that charge of contempt established. I do not, however, consider the publication of the Billboard Advertisement occurred through any lack of diligence on Fairfax's part and I do not find it guilty of that charge. 5 A breach of undertaking and contempt of Court must be treated seriously but various considerations indicate that the penalty imposed should be modest. I consider it appropriate to order Fairfax to pay a fine of $15,000 and to pay REA's costs on an indemnity basis.

[3]

THE FACTS 6 The following matters are uncontroversial: (a) on 11 February 2016 Fairfax published advertisements in The Age and Sydney Morning Herald (SMH) which contained the following phrases in relation to the Domain app and website (the Relevant Phrases): (i) "#1 property app in Australia"; (ii) "The most property listings in Sydney are on Domain"; and (iii) "The best property listings in Melbourne are on Domain"; (b) on 12 February 2016 REA commenced a proceeding alleging that the publication of the Relevant Phrases in the advertisements constituted misleading or deceptive conduct or conduct which was likely to mislead or deceive and that Fairfax made false or misleading representations in connection with the supply of services in breach of ss 18 and 29 of the Australian Consumer Law (ACL) in Schedule 2 of the Competition and Consumer Act 2010 (Cth). Pending the hearing and determination of the proceeding REA sought an urgent interim injunction to restrain Fairfax from publishing the Relevant Phrases or any phrases with similar meaning; (c) the application for an interim injunction was heard by Middleton J on the afternoon of 12 February 2016. Fairfax by its counsel gave an undertaking to the Court that until 4:00 pm on 17 February 2017 it would not publish or cause to be published the Relevant Phrases or any phrases which convey the same or similar meaning in relation to the website www.domain.com.au and the Domain app (the Undertaking). Upon the Undertaking being given the Court made orders to adjourn the hearing of REA's application for injunctive relief to 17 February 2017; (d) notwithstanding the Undertaking it gave, the following day Fairfax published the Print Advertisement in the SMH. The advertisement included the phrases "#1 property app in Australia" and "the most property listings in Sydney are on Domain"; (e) on 14 February 2016 REA notified Fairfax that it considered the publication of the Print Advertisement to be a breach of the Undertaking and said that it intended to issue proceedings for contempt of court. On 15 February 2016 REA filed an interlocutory application and a statement of charge of contempt; (f) on 17 February 2016 the proceeding returned before Moshinsky J. Counsel for Fairfax acknowledged that it had failed to comply with the Undertaking and apologised for its failure to do so. Counsel indicated that Fairfax would file a detailed affidavit explaining what had happened and what steps it had taken or intended to take in order to ensure that an error of the same kind did not occur again. The substantive proceeding was listed for hearing on an expedited basis and Fairfax agreed to extend the Undertaking until the hearing and determination of the proceeding or further order (the Further Undertaking); (g) on 27 February 2016 an employee of REA observed the Billboard Advertisement, being a billboard displayed on an overpass over the M4 motorway near the Cumberland Highway in Sydney which included the phrase "the most property listings in Sydney are on Domain" next to an image of the Domain app and logo; (h) on 28 February 2016 REA notified Fairfax that it considered the publication of the Billboard Advertisement to be a further breach of the Undertaking (or a breach of the Further Undertaking) and that it intended to pursue further charges of contempt; (i) on 29 February 2016 Domain notified REA that the Billboard Advertisement had been removed by around 10:30 am that day; (j) on 2 March 2016 REA filed an amended statement of charge in which it charged Fairfax with contempt for its breach of the Undertaking of 12 February 2016 by publishing the Print Advertisement and continuing to publish or causing to be published the Billboard Advertisement. Further or alternatively it charged Fairfax with contempt for its breach of the Further Undertaking of 17 February 2017 by continuing to publish or causing to be published the Billboard Advertisement until 29 February 2016.

[5]

The urgent proceeding and provision of the Undertaking 8 Fairfax relied on the evidence of Ms Gail Hambly, Fairfax's General Counsel and Company Secretary and Ms Melina Cruickshank, Domain's Chief Editorial and Marketing Officer. Ms Cruickshank is the senior Fairfax employee responsible for Domain's advertising. 9 While at times their evidence strayed into hearsay, REA disclaimed any reliance on such evidentiary points and I admitted their evidence. It is largely unchallenged and I am satisfied as to the following facts: (a) REA first gave notice of the proceeding in a letter to Ms Hambly from Ms Sarah Turner, General Counsel and Company Secretary of REA, sent under cover of an email at approximately 11:16 am on 12 February 2016. The letter referred to advertisements for the Domain website and app published in the SMH and The Age on 11 February which REA considered to be misleading or deceptive. REA demanded that Fairfax provide a written undertaking that Fairfax and Domain would not publish further misleading claims and that Fairfax would publish a retraction of the claims in the SMH and The Age. It stated that if the undertaking was not provided by 12:30 pm that day REA would commence proceedings in the Federal Court seeking an urgent injunction without further notice; (b) Ms Hambly did not see that letter until about 1:20 pm and she immediately sent it to Mr Graeme Plowman, Domain's Chief Operating Officer and Ms Lauren Rose, Fairfax's Senior Legal Counsel, for their review and comment. Ms Hambly did not respond to the letter; (c) at approximately 3:22 pm on 12 February 2016 Ms Hambly received an email from Mr Mark McCowan, a partner at Corrs Chambers Westgarth (Corrs), advising that Corrs acted for REA, that Corrs had issued proceedings seeking urgent interim relief to be heard by Middleton J at 4:30 pm, and attaching unfiled copies of the originating application, statement of claim and the orders sought. Mr McCowan asked whether Fairfax was prepared to give an undertaking or consent to a holding order until 4:00 pm on Wednesday, 17 February restraining Fairfax from publishing the Relevant Phrases so that the matter could return to court at that time for further hearing; (d) Ms Hambly immediately contacted Mr Peter Bartlett, a partner at Minter Ellison, and engaged that firm to appear at the urgent hearing; (e) at about 3:39 pm Ms Hambly received a further email from Mr McCowan attaching an affidavit of Mr Andrew Rechtman, REA's Executive General Manager, Residential in support of the application. Ms Hambly immediately forwarded that email to Mr Bartlett, Mr Plowman and Ms Rose, and informed Mr Plowman that someone at Domain would need to review and respond to the allegations in Mr Rechtman's affidavit; (f) Ms Hambly telephoned Ms Cruickshank shortly thereafter and asked her to urgently advise whether: (i) any advertisements containing the Relevant Phrases were already printed in any pre-printed material that was to be included in the Saturday, 13 February editions of the SMH or The Age, including the Good Weekend or Domain magazine; or (ii) any advertisements containing the Relevant Phrases were scheduled to be printed in the main book of the Saturday editions of the SMH or The Age, which are generally printed on Friday afternoon at or around 5:00 pm. Ms Cruickshank advised that she was not aware of any Domain advertisements which contained the Relevant Phrases having been pre-printed in the Good Weekend or Domain, or having been scheduled for any upcoming publication, but that she would confirm that with her staff. (g) at about 3:45pm Ms Hambly received an email from Mr Bartlett asking whether Fairfax had already gone to print for the following day. She understood Mr Bartlett to be asking whether any advertisements containing the Relevant Phrases had already been printed in the hardcopies of the Good Weekend or Domain sections of the Saturday, 13 February editions of the SMH or The Age. She responded to Mr Bartlett at 3:50 pm stating that she did not know and was waiting to hear back from the relevant people within Fairfax; (h) at about 3:58 pm, Ms Hambly sent an email to Mr Plowman, copying in Mr Bartlett, Ms Rose and Mr Antony Catalano, Domain's Chief Executive Officer, asking whether Fairfax could withdraw or hold any Domain advertisements until the following Wednesday, 17 February; (i) Ms Cruickshank then telephoned Ms Sarah Myers, Domain's Head of Brand and Communications, who had scheduled the publication of the advertisements containing the Relevant Phrases in the SMH and The Age on 11 February. Ms Myers informed Ms Cruickshank that it was her understanding that no advertisements containing the Relevant Phrases had already been pre-printed and none were scheduled for upcoming publication in the SMH or The Age on Saturday, 13 February, or any other date. (j) at about 4:30 pm Ms Cruickshank telephoned Ms Hambly and informed her that no Domain advertisements containing the Relevant Phrases had been pre-printed or were scheduled for publication in the SMH or The Age, and that Domain could cease publication of any advertisements containing the Relevant Phrases until further notice if instructed to do so; (k) at Ms Hambly's request Ms Cruickshank telephoned Mr Bartlett and provided him with that information. Mr Bartlett informed her that the hearing before Middleton J had already commenced, and told her that no advertisements containing the Relevant Phrases should be published by Domain or Fairfax until further notice; (l) at about 4:41 pm Ms Hambly telephoned Mr Bartlett and advised him that advertisements containing the Relevant Phrases were not at that stage printed in the Saturday, 13 February editions of the SMH or The Age and were not scheduled to be printed. She informed Mr Bartlett that Fairfax could provide an undertaking to the Court that it would not print or cause to be printed any advertisements containing the Relevant Phrases; and (m) the hearing before Middleton J commenced at 4:55 pm and ended at 5:02 pm. At approximately 4:57 pm Dr McEvoy, counsel for Fairfax, provided an undertaking that until 4:00 pm on 17 February 2016 Fairfax would not publish or cause to be published the Relevant Phrases or any phrases which conveyed the same or similar meaning. Mr Houghton QC, counsel for REA, accepted the undertaking. On that basis the further hearing of REA's application was adjourned to 17 February.

[6]

Steps taken by Fairfax after provision of the Undertaking 10 I am satisfied on the evidence that Fairfax took the following steps directed to compliance with the Undertaking: (a) shortly after 5:02 pm Mr Bartlett telephoned Ms Hambly and advised her that Fairfax had provided the Undertaking to the Court; (b) at about 5:20 pm Ms Hambly telephoned Ms Cruickshank. She notified Ms Cruickshank of the Undertaking and told her that until further notice Fairfax, including Domain, must cease any further print or digital publication of advertisements containing the Relevant Phrases and should instruct Fairfax staff not to "tweet" the Relevant Phrases; (c) Ms Cruickshank said that she understood from Ms Hambly and Mr Bartlett that the Undertaking was "very serious" and "we needed to go through all of the processes involved to ensure the ads weren't intentionally published over that weekend until we could get to the hearing on Wednesday"; (d) at some point in the period between 5:00 pm and 5:30 pm Ms Cruickshank telephoned Ms Myers and requested that she remove all Domain advertisements from the 'Shared Drive' maintained by Fairfax. The Shared Drive is where a number of Fairfax brands (such as Stan, Essential Baby, Traveller and Domain) store advertisements Fairfax may use as 'filler' advertisements when there are gaps in the newspaper. Fairfax production staff insert filler advertisements into the newspaper when a space in the page layout usually reserved for paid third party advertisements becomes vacant and available at late notice. Production staff located in various places in Australia and overseas select these filler advertisements from the Shared Drive at random and at their own discretion, and insert them into the electronic compilation of the newspaper prior to its printing and often very close to the printing deadline; (e) Ms Cruickshank gave this direction because she believed that removing any Domain advertisements from the Shared Drive (thereby taking them out of the pool of potential filler advertisements) would ensure that no advertisements containing the Relevant Phrases would be published; (f) at about 5:30 pm Ms Cruickshank separately telephoned Ms Myers and Mr Darren Goodsir, Editor-in-Chief of the SMH, and instructed each of them that, until further notice, the Relevant Phrases must not be published in any form; (g) at about 6:35 pm Ms Hambly received a copy of the Court orders containing the Undertaking from Mr Bartlett. At 8:11 pm she sent the Orders by email to Mr Plowman, Ms Cruickshank and Mr Catalano under the subject line "Undertakings". The email said: See attached undertakings. This means that we can't publish the words in part 1 of the undertaking in any form before the injunction hearing - print, digital or any other form. Also Melina you need to send an email to the staff that received your email yesterday saying that until further notice (or for the time being) no one should disseminate the words on social media etc if you want to give some context that's fine but let me see the draft first. (h) at 6:36 am on the morning of Saturday, 13 February Ms Cruickshank sent an email to all Domain staff instructing them that they should hold off sending social media posts until further notice.

[7]

The breach of the Undertaking 11 It is uncontentious that the Saturday, 13 February 2016 edition of the SMH contained an advertisement on page 10 of the main news section which read "#1 property app in Australia. The most property listings in Sydney are on Domain" (which I have called the Print Advertisement). 12 Late on the evening of Sunday, 14 February Mr Bartlett sent an email to Ms Hambly, Ms Cruickshank, Mr Catalano, Mr Plowman and Ms Myers attaching a letter that had been sent to him by Mr McCowan which alleged that the Print Advertisement was a breach of the Undertaking and constituted contempt of court. 13 Based on the formatting used in the Print Advertisement, and given that no Domain advertisements had been scheduled for publication in the Saturday edition of the SMH, Ms Cruickshank concluded that the Print Advertisement was inserted in that edition as a filler advertisement, notwithstanding the attempts she had made to prevent that from happening. 14 At 8:00 am on Monday 15 February she telephoned Mr Goodsir and asked how the Print Advertisement could have been published despite the instruction she had given on Friday afternoon and her attempt to remove all Domain advertising material from the Shared Drive. Ms Cruickshank said Mr Goodsir told her that the Saturday edition of the SMH would have been compiled between approximately 5:00 pm and 5:30 pm on Friday afternoon and that any filler advertisements would have been added to the electronic compilation at or around that time. 15 Ms Cruickshank concluded that the Print Advertisement was selected by production staff from the Shared Drive for inclusion in the Saturday edition sometime between 5:00 pm and 5:30 pm on Friday, 12 February, before Ms Myers had the opportunity to remove all Domain advertising material from the Shared Drive. She said she was unaware of this when she spoke to Mr Bartlett and informed him that no Domain advertising carrying the Relevant Phrases had been pre-printed or was scheduled for publication in future editions of the SMH or The Age. 16 Ms Cruickshank said that the discussion she had with Mr Plowman, Ms Hambly, Mr Bartlett and Ms Myers on the afternoon of Friday, 12 February occurred in a very short timeframe at or around the same time that production staff would have been filling vacant spaces in the SMH. She said that, had there been more time, she would have had an opportunity to make further enquiries to ascertain whether Domain advertisements including the Relevant Phrases might be included in the SMH or The Age as filler advertisements and to take further steps to ensure that Fairfax production staff were instructed to refrain from filling vacant advertising space with such advertisements.

[8]

The Billboard Advertisement 17 It is uncontroversial that between February 2016 and November 2016 Domain ran a large "out of home" or outdoor advertising campaign involving over 270 billboards at various roadside sites and on moving sites (such as bus and tram exteriors) most of which were located in Melbourne, Sydney, Brisbane, Gold Coast, Adelaide, Perth and in several regional locations (the OOH campaign). 18 The evidence shows that with the help of specialist media service providers by November 2015 Domain had planned, approved and paid to book 270 billboard sites. Between January and February 2016 all of the creative advertising content for the OOH campaign had been prepared and dispatched in files by Domain ready to be reviewed and approved and then printed and installed on the billboards in accordance with the schedule that Domain had booked. 19 Ms Cruickshank said, and in broad terms I accept, that once the OOH campaign started Domain had limited control over and involvement in the physical process of installation, removal and changeover of billboard posters. That work was undertaken by Domain's media partners (collectively, the suppliers) being: (a) Vizeum Australia (Vizeum): a specialist media buyer engaged by Domain to develop and plan an OOH advertising schedule, including by purchasing advertising space with billboard site owners on behalf of Domain; (b) Posterscope: an outdoor communications and solutions agency that assisted with identifying the best locations and then reviewed, proofed and approved the creative advertising content dispatched by Domain for production and printing by the site owners' deadlines; (c) various companies such as Ooh!, APN, Adshel, QMS and JC Decaux who own the sites and have strict annual booking schedules. They fix their own site booking periods and deadlines for receiving the advertising material; and (d) the production and installation teams used by each site owner, who receive material from Posterscope and then print the poster and install it on the billboard site during the scheduled site access times.

[9]

Steps taken by Fairfax after provision of the Undertaking and Further Undertaking 20 Following Fairfax's provision of the Undertaking on the afternoon of Friday 12 February it took various steps directed to compliance with the Undertaking, including that: (a) on or around 12 February Domain ceased dispatching creative files for the OOH campaign while it worked out what messaging was permitted in the billboard advertising within the terms of the Undertaking, how the timing of the next steps in the court proceeding would impact on requests to change the billboard advertising and what changes needed to be requested of the external agencies that were managing the OOH campaign. Ms Cruickshank said Ms Myers and Domain's Studio Manager, Ms Sophia Dyball had direct responsibility for this work. No direction was given to take down any OOH advertising which had been installed. In relation to OOH advertising I infer that Fairfax went into a holding pattern until the proceeding came back before the Court on 17 February; (b) Ms Cruickshank attended the court hearing on 17 February and upon Fairfax's provision of the Further Undertaking she telephoned Ms Myers at about 4:00 pm that day. She left a message to the effect that any OOH advertising that contained the Relevant Phrases which had been booked or installed on billboards was to be removed and replaced as soon as possible; (c) Ms Myers passed this instruction to Ms Dyball. The following day Ms Dyball contacted Ms Karen Carew, the account manager for Domain at Posterscope. Ms Dyball identified a list of the billboard sites where Domain's advertising schedule indicated that an advertisement which contained the Relevant Phrases might appear, and requested that those billboards be removed or changed. Ms Dyball confirmed this in a follow-up email to Ms Carew at 4:52 pm on 18 February, which relevantly said: From the Lux Pack list attached, can you please let me know which messaging has gone to which site address. As you remember, we just asked for a random assignment. We are just juggling a court order at the moment around the message: THE MOST PROPERTY LISTINGS IN SYDNEY I'm also sending you a wetransfer [sic] of CURRENT creative in market now. Can you please advise if I have missed anything? This is not replacement creative at all. Just for reference only for what is in market now. The "Lux Pack" referred to is a list of the billboard sites which Domain had booked; (d) Mr Joe Copley, Managing Director of Posterscope, confirmed the instructions Ms Dyball gave to Ms Carew in an email to Ms Myers on 1 March (after the further breach of undertaking was discovered). The email relevantly said: Karen has confirmed that she was contacted by telephone by Sophia Dyball from Domain on the 18th Feb, requesting that they work together to have certain booked or displayed advertising either removed or changed as appropriate. Sophia listed many OOH sites which formed part of an extensive OOH schedule where she had allocated the creative(s) in question. Following the call, Karen actioned: - The 'take-down' ASAP of any of the specified sites that had already been posted or were live on digital screen networks. - The 're-printing' of a number of posters (or re-supply of digital material) for a number of sites which were due to begin using the now restricted message. We are confident that all of the listed sites were either changed or removed ASAP as required. As I mentioned, the schedule was very extensive (many sites) and also involved many different creative executions. Karen tells me that there were multiple changes actioned as quickly as possible in order to pull down and/or re-supply the sites that Sophia identified.

[10]

The further breach of undertaking 21 It is uncontentious that one billboard was missed in the process of removing, replacing and not installing billboard advertisements which contained the Relevant Phrases. On 27 February an employee of REA saw a billboard displayed on an overpass over the M4 motorway near the Cumberland Highway in Sydney which included the phrase "The most property listings in Sydney are on Domain" next to an image of the Domain app and logo. 22 Ms Cruickshank was informed of the Billboard Advertisement at about 10:30 am on Sunday, 28 February, when a letter from REA's solicitors was forwarded to her. Ms Cruickshank immediately instructed Ms Myers to contact Vizeum to ascertain if the Billboard Advertisement was still installed and to ensure it was immediately taken down if it was. Ms Myers and Ms Dyball worked to contact relevant staff at Posterscope and Vizeum over the course of Sunday and Monday morning. With the assistance of information in the solicitor's letter Vizeum identified the site at which the Billboard Advertisement was located and coordinated with Posterscope and Ooh! to have it removed by 10:30 am on Monday 29 February. 23 On 29 February Fairfax's solicitors sent a letter to REA's solicitors advising that the Billboard Advertisement had been removed. In that letter Mr Bartlett said that he was instructed that that the Billboard Advertisement was erected before the Undertaking was given. They were Mr Bartlett's instructions but as it eventuated that was not the case. Ms Cruickshank said she subsequently ascertained that the Billboard Advertisement was installed sometime between 22 and 24 February, as part of the original booking schedule for which Domain had dispatched the creative file around 1 February. 24 Ms Cruickshank said that the Billboard Advertisement should not have been installed given the instructions to Posterscope and Vizeum. She also said that the particular advertisement should had been picked up in the audit of the original booking schedule that Vizeum conducted after the Further Undertaking. Emails from Mr Copley to Ms Myers on 29 February and 1 March 2016 confirm that Posterscope missed the Billboard Advertisement following Ms Dyball's 18 February instructions to remove and replace all the advertisements which contained the Relevant Phrases.

[11]

RELEVANT PRINCIPLES 25 Pursuant to s 31 of the Federal Court of Australia Act 1976 (Cth) (the Act) the Federal Court has the same power to punish a contempt of its power and authority as the High Court in respect of contempts of that court. The High Court has the same power to punish contempts as the Supreme Court of Judicature in England in 1903: see s 24 of the Judiciary Act 1903 (Cth). Where a body corporate is found guilty of contempt, the Court has the power to order the contemnor to pay a fine, that some of or all of its property be sequestrated, or both: r 11.04.1 of the High Court Rules 2004 (Cth). 26 In Advan Investments Pty Ltd v Dean Gleeson Motor Sales Pty Ltd [2003] VSC 201 (Advan) at [31]-[32], approved in Zomojo Pty Ltd v Hurd (No 5) [2014] FCA 537 (Zomojo) at [51] per Tracey J, Gillard J identified the elements which it is necessary for a complainant to establish in order to make good a charge of civil contempt. His Honour said: In order to prove a civil contempt of court involving a breach of an order of the court, the plaintiff has to prove the following: (i) that an order was made by the court; (ii) that the terms of the order are clear, unambiguous and capable of compliance; (iii) that the order was served on the alleged contemnor or excused in the circumstances, or service dispensed with pursuant to the Rules of Court; (iv) that the alleged contemnor has knowledge of the terms of the order; (v) that the alleged contemnor has breached the terms of the order. It is necessary for the plaintiff to prove each element beyond reasonable doubt. In accordance with the principles of the criminal law, in proving element (v) it must be proven that the act or omission which constituted the breach of the order was deliberate and voluntary. 27 If a party gives an undertaking to a court that undertaking has the same legal effect as an injunction imposed by the Court. A breach of such an undertaking by the party who proffers it may constitute a contempt of court: Windsurfing International Inc v Sailboards Australia Pty Ltd (1986) 19 FCR 110 per Burchett J; Zomojo at [52]. 28 Deliberate conduct which is in breach of an injunctive order or an undertaking will constitute wilful disobedience, and therefore a contempt, unless the conduct is "casual, accidental or unintentional": Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 113 per Gibbs CJ, Mason, Wilson and Deane JJ; Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525 at 541 per McHugh J; Louis Vuitton Malletier SA v Design Elegance Pty Ltd [2006] FCA 83; (2006) 149 FCR 494 (Louis Vuitton) at [6] per Merkel J. 29 In Energizer Australia Pty Ltd v Proctor & Gamble Australia Pty Ltd [2016] FCA 347 (Energizer) at [35] Perram J explained that: A contempt is neither casual nor accidental if it could have been avoided by the exercise of the high level of diligence which a party is expected to exercise for the purpose of ensuring compliance with the court's order. His Honour said that carelessness or negligence falling short of this standard of diligence may be enough to constitute contempt, and it is not necessary that it rise to the level of recklessness or gross negligence. A fine for contempt may be imposed if the breach results from the contemnor's "less than diligent attitude towards compliance". 30 As Perram J explained at [34], a party is under a duty to take adequate and continuing steps to ensure that it complies with an injunction or undertaking. In the case of a corporation this extends to ensuring, through its responsible officers, that they or anyone to whom they may delegate matters relating to compliance with the injunction or undertaking, do not forget, misunderstand or overlook the obligations it imposes. 31 However, a party that has used its "best endeavours" to achieve the required result will not be committed for contempt: Davies v Beyond Building Systems Pty Ltd [2009] NSWSC 1282 at [19] per Brereton J.

[13]

The First Charge - the Print Advertisement 35 Fairfax submits that its publication of the Print Advertisement does not constitute wilful disobedience of the Undertaking because it was inadvertent, accidental and unintentional, and that its breach does not warrant a finding of contempt because: (a) the timeframe for compliance was extremely narrow (approximately one hour between the time employees were first notified of the urgent application and the giving of the Undertaking); (b) Fairfax acted quickly and took all practicable steps to confirm whether the Relevant Phrases had been pre-printed or scheduled for publication; (c) the steps taken were a good faith attempt to facilitate the resolution of REA's application in the most efficient, pragmatic and cost-effective way possible; (d) Fairfax did not give the Undertaking until it had made enquiries as to whether it could be complied with; (e) Fairfax took compliance with the Undertaking seriously and immediately took steps to remove Domain advertising from the Shared Drive in an attempt to prevent publication of the Relevant Phrases; (f) the publication of the Print Advertisement was an accident which was most likely attributable to the actions of production staff who were not informed of the Undertaking, which actions occurred during the "filling stage" before or around the same time as the Undertaking was given; and (g) the Print Advertisement only appeared in one newspaper on one occasion, was on the tenth page and was in any event very small. 36 The evidence and submissions focused on whether Fairfax adequately addressed the risk that a filler advertisement would be inserted into one or other of the Fairfax newspapers by taking Domain advertising material from the Shared Drive, including whether the production staff responsible for compiling the SMH should have been directly informed that they must not publish Domain advertisements which contained the Relevant Phrases. 37 I accept Ms Cruickshank's evidence that she was not particularly concerned about the use of Domain advertisements from the Shared Drive. She said that the likelihood of that happening was low because it had been months since production staff had used Domain advertisements as filler. Domain was a "paying brand" which could afford to pay for its advertisements and it was Fairfax's smaller brands which were typically the recipients of the advertising largesse that came through use of filler advertisements. There were other areas of Domain's business in relation to which she was more concerned to prevent the use of the Relevant Phrases, such as digital advertising. 38 Ms Cruickshank also said that, even if she had considered it necessary to notify production staff to avert the possibility of a filler advertisement being inserted, she would not have known how to go about it since they were spread around Australia and no one person made decisions regarding things like filler ads. She also argued that she did not have the authority to instruct production staff to pull particular advertising. She said that, practically speaking, the only people entitled to give such instructions at the SMH and The Age are the Editors. 39 Essentially Fairfax contended that, given the short time frame, although Ms Cruickshank did not send an email or otherwise directly notify production staff that Domain advertising material from the Shared Drive should not be used, by informing Mr Goodsir of the Undertaking and that Domain advertising which contained the Relevant Phrases must not be used, Fairfax had used its best endeavours to comply with the Undertaking. It argued that REA had not established beyond reasonable doubt that the breach of undertaking was "deliberate and voluntary" as distinct from "casual, accidental or unintentional". 40 I do not accept this contention. 41 First, it is beside the point that Ms Cruickshank may not have had the authority or ability to direct production staff to not place Domain advertising containing the Relevant Phrases, including filler advertising, in the SMH. As the Editor Mr Goodsir clearly had such authority and at 5:30 pm on 12 February Ms Cruickshank instructed him that until further notice the Relevant Phrases were not to be published. 42 Fairfax did not call Mr Goodsir as a witness, did not explain why it did not call him, and provided no explanation as to what steps he took upon Ms Cruickshank giving that instruction. There is no evidence that he communicated anything at all to production staff. Dr McEvoy accepted that the Court was entitled to infer that nothing more was done by Fairfax than is set out in Ms Cruickshank's first affidavit and Ms Hambly's affidavit. Counsel accepted that the Court must proceed on the basis that "nothing more was done by…Mr Goodsir about it at all". Mr Goodsir should have taken some step to ensure the production staff were informed of the importance of complying with the Undertaking. His failure to take any step in response to Ms Cruickshank's instruction indicates that Fairfax did not use its best endeavours to comply with the Undertaking. 43 Second, I do not accept that, in the circumstances, Ms Cruickshank did not have the capacity to herself instruct production staff. Ms Cruickshank may not ordinarily have authority to step between the Editor and production staff but these were not ordinary circumstances. Ms Cruickshank characterised her 5:30 pm telephone conversation with Mr Goodsir as an "instruction" and she should have ensured production staff were directly contacted by him, or she should have done so herself. I do not accept the suggestion that it was not practicable to urgently contact production staff. Mr Goodsir would have their email addresses and telephone numbers. 44 Third, Ms Cruickshank's instruction to Mr Goodsir was inadequate. She gave evidence that she told Mr Goodsir "Can you please ensure - look, we have removed all of the filler, but if you do happen to see any Domain [advertisements] please let your staff know it needs to be removed." Her direction needed to go further than that. 45 Fourth, Mr Goodsir said that the print edition of the Saturday, 13 February edition of the SMH was compiled between 5:00 pm and 5:30 pm on Friday afternoon. It went to print some time after that. Dr McEvoy accepted that no one checked the compiled newspaper before it went to print and Fairfax's evidence did not explain why this could not have been done. 46 Given the importance of compliance with the Undertaking Ms Cruickshank or Mr Goodsir should have ensured that a member of the production team checked the newspaper when it was compiled. That may have delayed printing for a short time but having regard to the importance of the Undertaking that is not a matter of great significance. 47 Fifth, when Ms Cruickshank spoke to Mr Goodsir at 5:30 pm on Friday afternoon she did not ask whether production staff had already used such advertising from the Shared Drive by that time or whether the newspaper had already been compiled by that time. Had she asked those obvious questions the error may have been discovered. When Mr Goodsir spoke to Ms Cruickshank at 5:30 pm he must have known that compilation of the newspaper was complete or close to completion, and that Domain advertising might already have been used as filler. I infer that he did not volunteer that information to Ms Cruickshank. 48 In relation to the first charge of contempt I am satisfied beyond reasonable doubt that Fairfax's acts or omissions resulting in the publication of the Print Advertisement were the result of the failure of its senior officers to act with reasonable diligence or to use their best endeavours to comply with the Undertaking. Fairfax's acts or omissions were not casual, accidental or unintentional in the relevant sense, and its conduct is properly characterised as a deliberate or voluntary breach of the Undertaking. The first charge of contempt is established.

[14]

The Second Charge - the Billboard Advertisement 49 It is uncontentious that Ms Cruickshank was aware of the terms of the Undertaking and the Further Undertaking. She was in court on 17 February 2016 when Fairfax gave the Further Undertaking and she said that she treated compliance with the undertakings as a matter of the utmost seriousness. 50 REA contends that Fairfax's publication of the Billboard Advertisement in the period between 22 and 24 February 2016 resulted from a failure to act with reasonable diligence on the part of the relevant Fairfax employees and the persons to whom it delegated compliance with its obligations pursuant to the Further Undertaking. It argues that Fairfax failed to exercise proper oversight over the removal of billboard advertisements which were known to contain the Relevant Phrases and to implement adequate systems to ensure that no advertisements continued to be published contrary to the undertakings that had been given. 51 Amongst other things REA argues that: (a) as a result of its wrongful publication of the Print Advertisement Fairfax should have been on notice of the need for a higher level of diligence; (b) Ms Cruickshank's failure to direct removal of billboard advertisements in the period between 12 and 17 February shows she took a casual approach towards compliance; (c) Ms Cruickshank should have but did not write to the suppliers advising them of the terms of the Further Undertaking, the importance of compliance, and the steps they were required to take to ensure this compliance; (d) Ms Cruickshank left a telephone message with Ms Myers at about 4:00 pm on 17 February instructing her that any OOH advertising containing the Relevant Phrases which had been booked or installed on billboards was to be removed and replaced as soon as possible. Ms Myers should have but did not pass on those instructions to Domain's Studio Manager, Ms Dyball, until 18 February; (e) the only evidence of any written communication between Domain and its suppliers is Ms Dyball's email to Ms Carew of Posterscope on 18 February. REA says that Ms Dyball's reference to the Further Undertaking as "juggling a court order" was not a sufficiently clear instruction. It says Mr Copley's email to Ms Myers on 1 March shows that Ms Dyball merely requested that "they work together to have certain booked or displayed advertising either removed or changed as appropriate" and that Mr Copley was unaware of the content of the court orders; (f) given the importance of compliance with the Further Undertaking it was inadequate for Domain only to follow up on its instructions to its suppliers verbally, rather than by confirming those instructions in writing; and (g) Ms Cruickshank should have but did not personally speak to Domain's suppliers, and she failed to follow up as to whether or not her subordinates were adequately instructing them in relation to the removal and replacement of the relevant advertisements. 52 In my view REA overstated the position and I do not accept the thrust of its submissions. 53 First, I accept Ms Cruickshank's evidence that Fairfax (through Domain) had limited control over and involvement in the physical process of installation, removal and changeover of billboard posters. That work was undertaken by the suppliers with which it worked. I accept her evidence that it is difficult to quickly change billboard content and the advertising schedule once it is booked, including because: (a) each billboard site has its own fixed cycle of booking periods, booking deadlines and material deadlines for the year; (b) the site owners schedule the installation and changeover of posters according to the bookings made and purchased in that period or cycle; (c) Fairfax (through Domain) does not have control over the cycles in which bookings could be made with site owners, the deadlines for receipt of creative material for printing (generally three weeks in advance), and the date and time at which the sites can be accessed to install posters within each cycle; and (d) it is costly to site owners and to Domain to make changes to the OOH campaign. During a cycle Domain usually can do little more than make a request for changes to the schedule it has booked, ask for a change request to be prioritised, or ask to remove or change a billboard. The time then taken for any request to be confirmed and processed can vary and is out of its control. 54 The removal and replacement of any OOH advertising which contained the Relevant Phrases could not be undertaken personally by Fairfax, and it had no choice but to rely on Vizeum, Posterscope and the OOH site owners and their teams to carry out its instructions to remove and replace any Domain OOH advertising which contained the Relevant Phrases. The question is whether, in its instructions to suppliers directing removal and replacement of such advertising, Fairfax used its best endeavours and exercised a sufficiently high level of diligence. 55 Second, Ms Cruickshank said and I accept that Fairfax employees informed its suppliers about the terms of the Further Undertaking and the importance of compliance with its terms. She spoke to the managing directors of Vizeum and Posterscope herself, and said that everyone, including the suppliers, was "very aware of the seriousness" of the Further Undertaking and that they "did everything possible" to ensure compliance. 56 Third, I do not accept REA's contention that Fairfax did not do enough to ensure compliance with the Further Undertaking and that Ms Cruickshank did not properly follow up on whether employees were adequately instructing its suppliers. I accept Ms Cruickshank's evidence that relevant Fairfax employees had numerous meetings about how to best achieve the speedy removal and replacement of the relevant advertising, had numerous telephone conversations with suppliers, and that Fairfax staff dedicated much of 18 and 19 February to dealing with the issue. 57 I also accept her evidence that Fairfax put "enormous pressure" on Vizeum and Posterscope, and in turn on the OOH site owners and their teams. I do not consider that Ms Cruickshank's reliance upon subordinates such as Ms Dyball to communicate with Posterscope shows, of itself, an absence of diligence. Ms Dyball would speak to the suppliers between three and five times per day, she had a good relationship with them, and using her to communicate Domain's needs was a reasonable course. 58 Posterscope pulled in extra staff to meet the requirements of the Further Undertaking, worked outside normal hours and went "above and beyond" the call of normal operations to remove the relevant OOH advertising. As a result of Domain's requests the billboard advertising on over 100 sites was either stopped and changed or removed and replaced using new creative files. Overall 144 creative files were changed. That result indicates the effectiveness of the instructions Fairfax gave to its suppliers. 59 Nor do I accept REA's contention that Fairfax did not do enough to check that its instructions had been followed. Following the instructions given to its suppliers on 18 and 19 February, Ms Cruickshank said Fairfax was very conscious of the need to minimise the chance of mistakes and several employees undertook physical checks by driving around the key metropolitan billboard sites in Melbourne and Sydney. Ms Dyball spent a day driving around Sydney undertaking checks. The Billboard Advertisement was installed in the period between 22 and 24 February in Greystanes, a suburb 29 kilometres outside the Sydney CBD and it was not spotted by Fairfax staff. 60 The fact that the mistake occurred does not, of itself, show a lack of reasonable diligence on Fairfax's part. It was forced to rely on Vizeum, Posterscope and the OOH site owners in that regard and it checked to the extent it was able whether they had complied with the instructions given. 61 Fourth, REA's argument focused on the fact that Fairfax provided verbal rather than written instructions to its suppliers. While (as Ms Cruickshank accepted) it would have been better practice for Fairfax to confirm these in writing, I am not persuaded that its verbal instructions were ineffective or that providing written instructions would have made any difference. The reality is that giving verbal instructions - which REA contends was a sub-optimal method - was effective in changing the OOH advertising which contained the Relevant Phrases at over 100 sites. Having accepted instructions to stop or replace the relevant advertisements, and having directed such action at numerous sites, Posterscope made an error and installed a billboard poster which it had been directed not to. 62 In relation to the second charge of contempt REA did not establish beyond reasonable doubt that Fairfax's acts or omissions resulted in the installation of the Billboard Advertisement. The installation in the period between 22 and 24 February was a one-off error by Posterscope, which had otherwise gone to great lengths to comply with Fairfax's instructions. REA did not establish that the publication was the result of any failure by Fairfax's senior officers to act with reasonable diligence or to use their best endeavours to comply with the Further Undertaking. I am not satisfied that Fairfax deliberately or voluntarily breached the Further Undertaking and I dismiss the second charge of contempt.

[15]

THE APPROPRIATE PENALTY 63 In Louis Vuitton at [25] Merkel J set out the considerations relevant to the determination of an appropriate penalty for contempt, being: (a) the nature and circumstances of the contempt; (b) the effect of the contempt of the administration of justice; (c) the contemnor's culpability; (d) the need to deter the contemnor and others from repeating contempt; (e) the absence or presence of a prior conviction of contempt; (f) the contemnor's financial means; and (g) any contrition and apology. 64 REA argues that Fairfax must be regarded as possessing a high degree of culpability for repeated breaches of undertakings it gave. It submits that it is important that the Court is seen to an impose an appropriately severe penalty, both to vindicate the Court's authority and to serve as a deterrent to Fairfax and others in a similar position from treating undertakings to the Court in a cavalier fashion. It argues that this is particularly so because Fairfax is a sophisticated litigant that regularly interacts with the courts and can be expected to be familiar with the risk of contempt and the importance of respecting the Court's processes. It notes that Fairfax has been found guilty of contempt of court on seven occasions since 1982. 65 It also argues that it is relevant to the imposition of an appropriate penalty that both the Print and Billboard Advertisements contained phrases that the Court subsequently found to be misleading or deceptive or likely to mislead or deceive. It contends therefore that the effect of each breach was to repeat and reinforce a message that the Court ultimately found to be unlawful and damaging to REA's legitimate business interests. It notes that this is not a case in which Fairfax can purge its contempt and ameliorate the effect of its breach by doing some act of reparation. 66 REA submits that, even though Fairfax has shown a degree of contrition for its actions, only the imposition of a substantial fine will be sufficient to reflect the Court's disapproval of the breach and bring home to Fairfax and other litigants who offer such undertakings that they must take adequate and continuing steps to ensure that the undertaking is complied with. It argues that a fine in the order of $40-50,000 is appropriate, and notes that in Energizer and Mobileworld Communications Pty Ltd v Q & Q Global Enterprise Pty Ltd [2004] FCA 1200 (Mobileworld) fines in that order were imposed. 67 I do not accept REA's contentions. In my view a modest penalty is appropriate. 68 It is necessary to keep in mind that REA made its submissions on the basis that Fairfax is guilty of both charges of contempt, and it only made out the first charge. REA also contends that the second charge of contempt is the more serious because the breach occurred after Fairfax was already on notice about the need for diligence, had expressed contrition and had assured the Court that it had implemented or intended to implement systems to ensure that it would not happen again. Given REA did not make out the second and allegedly more serious charge, it is appropriate to treat it as seeking a penalty for the first charge of less than half the total amount it contended for. 69 Fairfax acted consistently with its obligations under s 37M of the Act and quickly offered the Undertaking when the interlocutory proceeding came before the Court, and agreed to extend it when the Court indicated it could accommodate an early hearing. It also moved quickly to comply with the Undertaking (notwithstanding the shortcomings discussed above), and upon becoming aware of the breach it promptly apologised and showed genuine contrition. Its unreserved apology is a mitigating factor. 70 Fairfax's state of mind is also relevant to the penalty to be imposed: Kazal v Thunder Studios Inc (California) (2017) 350 ALR 216; [2017] FCAFC 111 (Kazal) at [105]-[106] per Besanko, Wigney and Bromwich JJ. I am satisfied on the evidence that Fairfax fully intended to comply with the Undertaking, that its breach through publication of the Print Advertisement was a mistake, and that it genuinely regrets that publication. In my view Fairfax's conduct is far from contumacious. 71 In the circumstances of the present case the need for specific deterrence is limited and Fairfax's culpability is at the low end of the range. 72 It should also be kept in mind that REA obtained declarations and effectively permanent injunctions in the substantive proceeding. That relief goes some way to serving the public interest that is to be upheld by imposing a penalty for contempt: see Dowsett J in Vaysman v Deckers Outdoor Corporation Inc (2014) 222 FCR 387 at [15]. This is a mitigating factor. 73 Finally, in my view the present case is not on all fours with Mobileworld and Energiser. Amongst other things, in Energiser the advertisement published in breach of the undertaking was wrongly broadcast a total of 954 times over 23 consecutive days on television channels in various capital cities including Sydney, Melbourne and Brisbane. In Mobileworld the listing published in breach of the undertaking was wrongly placed in the Yellow Pages and the White Pages directories in Victoria and New South Wales which gave the contemnor a business advantage over the 12 month period that those directories were current. In the present case the Print Advertisement was published on one day only and, essentially, in one city. I also note that in Australian Competition and Consumer Commission v Allergy Pathway Pty Ltd (No 2) (2011) 192 FCR 34; [2011] FCA 74 Finkelstein J considered $10,000 to be at the upper end of the range of penalty for a contempt that was not contumacious. 74 I do not, however, accept Fairfax's submission that no penalty should be imposed. A contempt of court, even one that only arises through a lack of care, is a serious matter: Pelechowski v Registrar, Court of Appeal (1999) 198 CLR 435 at [88] per McHugh J; Adlam v Noack [1999] FCA 1606 (Adlam) at [16] per Mansfield J. 75 Having regard to the considerations set out in Louis Vuitton I consider a penalty of $15,000 is appropriate. That is a modest penalty for a company the size of Fairfax but should still operate to deter it and others from failing to exercise reasonable diligence so as to avoid breaching an undertaking or order.

[16]

COSTS 76 REA seeks its costs of the proceeding on an indemnity basis. Fairfax accepts that it is required to pay REA's party-party costs but it opposes an order for indemnity costs. 77 In Kazal at [192] the Full Court said: A common consequence of success by a person bringing contempt proceedings is an indemnity costs order. Katzmann J in Kazal v Thunder Studios Inc (California) [2017] FCA 238 at [90] helpfully referred to Connect TV Pty Ltd v All Rounder Investments Pty Ltd (No 4) [2013] FCA 393 at [43] per Tracey J, and Infa-Secure Pty Ltd v Crocker (No 2) [2016] FCA 202; 338 ALR 586 at 600 [44] per Reeves J. Her Honour observed that in Victoria and in Queensland it seems to be the "common or usual practice" to award indemnity costs in contempt cases, referring to Deputy Commissioner of Taxation v Gashi (No 3) [2011] VSC 448; 85 ATR 262 at 270-1 [20] per Dixon J and the abovementioned case of Infa-Secure. 78 Earlier, in Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd (2003) 196 ALR 350; [2003] FCAFC 13 (CFMEU v BHP) Moore J said (at [6]) that "there is no general principle or rule of law in contempt cases that a successful applicant is routinely awarded costs on an indemnity basis." In this regard his Honour relied on the decisions in McIntyre v Perkes (1988) 15 NSWLR 417 per Samuels JA at 424-8 and Rodgers AJA at 434-6, Adlam at [29] per Mansfield J and LED Builders Pty Ltd v Eagle Homes Pty Ltd [1999] FCA 1213 per Lindgren J at [64]-[65]. 79 Like O'Callaghan J in AGL Energy Limited v Hardy (No 3) [2017] FCA 952 (AGL Energy) at [7], I do not read the relevant cases as setting out an inflexible rule that indemnity costs should be awarded in contempt cases. The decision whether to award costs and if so on what basis is discretionary. As O'Callaghan J observed "the fact that many of the cases say that it may nonetheless be a "common" or "usual" practice to do so is not necessarily inconsistent with the fact that, in all cases, the starting point is an unfettered discretion." 80 The question as to what costs order is appropriate in the present case is not without difficulty. Various discretionary considerations point away from an order for indemnity costs including that: (a) REA only made out one of the two charges of contempt that it laid: see Australian Competition & Consumer Commission v World Netsafe Pty Ltd (2003) 133 FCR 279; [2003] FCA 1501 at [47] per Spender J; (b) Fairfax did not deliberately defy the Undertaking and its breach was not contumacious: see AGL Energy at [11]; and (c) Fairfax has already been punished through the imposition of a fine: CFMEU v BHP at [53] per Moore, Tamberlin and Goldberg JJ; Adlam at [30]. 81 Even so, I consider an award of indemnity costs is appropriate. It is important that parties who provide an undertaking to the Court exercise a high level of diligence and ensure they take adequate and continuing steps to comply with the undertaking. The likelihood of an indemnity costs order operates as a further deterrent to Fairfax and others. 82 In bringing the contempt proceeding REA was at least in part acting in the public interest. Fairfax provided undertakings to the Court that it would not publish or cause to be published the Relevant Phrases and it breached them on two separate occasions. I can see no good reason why REA should be out of pocket for bringing the charges. As Gillard J explained in National Australia Bank Ltd v Juric (No 2) [2001] VSC 398 at [70]: [I]t has been recognised for many, many years in contempt cases, that a litigant who must come to court in order to enforce an order which has been breached by contempt, or to have a person dealt with [for] contempt, should not be out of pocket. Fairfax contested the first charge which significantly increased the costs incurred by REA. 83 On balance I consider it is appropriate to order that Fairfax pay REA's costs on an indemnity basis. I certify that the preceding eighty-three (83) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Murphy.