Reliance Financial Services Pty Ltd v Allyma Express Holdings Pty Ltd

Supreme Court of NSW|2018-09-27|Before: Parker J, McDougall J

Judgment

This is an application by the plaintiff, Reliance Financial Services Pty Ltd ("Reliance"), to have three of the defendants dealt with for contempt of orders made by the Court.
The orders in question were made on 27 July 2018 by McDougall J after the delivery of reasons for judgment following the final hearing of the proceedings on 26 July: Reliance Financial Services Pty Ltd v Allyma Express Holdings Pty Ltd [2018] NSWSC 1163. The proceedings concerned the right to possession of thirty-two vehicles. In summary, his Honour found that the vehicles had been charged as security for loans from Reliance, that the loans were in default, and Reliance was entitled to possession of the vehicles.
Some of the "vehicles" referred to in the orders were trailers and not motor vehicles. Nonetheless, I will in this judgment continue to use the terminology used in the orders.
The thirty-two vehicles which were the subject of the proceedings were identified in the orders as having been registered in various names. Most were specified as having been registered in the name of Allyma Express Holdings Pty Ltd ("AEH"), the first defendant in the proceedings. Four of the vehicles were specified as having been registered in the name of Sydney Bulk Haulage Pty Ltd ("SBH"), the third defendant.
The three defendants against whom Reliance charges contempt are Harold James (known as "Jim") Price, the ninth defendant, Scott James Price, the tenth defendant; and Megan Louise Dreyer, the eleventh defendant. Jim Price appears to have controlled the affairs of a trucking business or businesses which operated through AEH, SBH and perhaps others of the corporate defendants. He is the father of Scott Price and Megan Dreyer. I will refer to John Price, Scott Price and Megan Dreyer as the "contempt respondents".

Issues for determination

In the course of the submissions, it was agreed between counsel for the parties that I should not deal in this hearing with any question of penalty; that may be the subject of further evidence should I conclude that any contempt has been committed. Accordingly, this judgment deals only with whether contempt has been committed, and, if so, the nature of the contempt.
Of the thirty-two vehicles the subject of the Court's orders, two were delivered up to Reliance before the contempt proceedings began and are not the subject of the charges against the contempt respondents. A further five have subsequently been delivered up to Reliance, or Reliance has otherwise obtained possession of them. Two are in the possession of the liquidator of SBH. The remaining twenty-three vehicles are unaccounted for.
Reliance's application against the contempt respondents classifies the vehicles into three classes, which give rise to contempts of different levels of seriousness.
The most serious allegations of contempt concerns five vehicles. Reliance's contention is that the Court should be satisfied that the vehicles remain within the possession or control of Jim Price (as to four vehicles) and Megan Dreyer (as to one vehicle).
The second class of vehicles consists of five vehicles which have now been delivered up or are accounted for. Reliance's contention is that the Court should be satisfied that those vehicles were in the possession or control of Jim Price at the time the delivery up order was made, and there was a wilful (the term used in the plaintiff's submission was "contumelious") failure to deliver them up within the time specified in the Court order, albeit that they have since been delivered up or repossessed. In addition, Reliance contends that, should the Court not be satisfied that any of the class one vehicles remain in the contempt respondents' possession or control, those vehicles fall into this class.
The third class of vehicles consists of the remaining twenty vehicles. The contempt respondents contend that these vehicles are not in their possession and have not been in their possession since 27 July. Reliance contends that even if this is so, the failure to deliver up, or to cause the delivery up of the vehicles, constitutes a contempt. Reliance seeks findings that each of the contempt respondents is guilty of such a contempt in relation to each of the vehicles in this class.
I refer below to the question whether contempts alleged are criminal contempts or civil contempts. But, it is common ground that on either view the standard of proof is the criminal standard of proof beyond reasonable doubt.

Summary and analysis of evidence

It appears that Jim Price and his companies used a property at Stonny Batter Road in Minto in south-western Sydney as a depot for their trucking operations in New South Wales. On 4 March this year, Reliance or an associated entity took possession of the depot. One day later, on 5 March, Mr Price and associates of his gained entry to the depot and removed a number of vehicles.
These proceedings were commenced on 2 May. On 10 May, McDougall J made interlocutory orders restraining Jim Price, Scott Price and Megan Dreyer, among others, from "using, transferring, dealing with or alienating" the vehicles the subject of the proceedings.
In his final judgment of 27 July, McDougall J, having found that Reliance was entitled to possession of the vehicles, said (at [18]-[20]): 18. The orders sought are against the individual defendants. They are in effect that those defendants deliver up or cause to be delivered up the vehicles that are specified in the summons… 19. Of course, for one reason or another, the defendants may be unable to comply with those orders, if made. The orders sought encompass that because they seek an affidavit from each of the personal defendants setting out what they have done to comply, and (if it be the case) why they have not complied. 20. There have been no submissions put as to the form of the relief sought. Accordingly, in my view, it is appropriate to make orders for delivery up in accordance with prayers 1 and 2 of the summons. It is also appropriate to make the order sought as to affidavits. However, in my view, those affidavits should be filed and served within seven days after expiry of the time limited for delivery up.
His Honour noted the Summons claimed damages or equitable compensation, but that no submissions had been made in support of those prayers for relief. His Honour considered it inappropriate to split the hearing and therefore refused to make any award for damages or compensation. His Honour also noted that the Summons sought orders in aid of enforcement. He said if that proved necessary it would be covered by liberty to apply.
There were two delivery-up orders. Order 1 applied to twenty-eight vehicles and was directed (relevantly) to Jim Price, Scott Price and Megan Dreyer. Order 2 applied to four vehicles and was directed (relevantly) to Jim Price and Scott Price. In each case, the order was that the defendants "deliver up, or cause to be delivered up, to [Reliance] within 5 days the following vehicles including the keys and logbooks for the vehicles".
The order for the provision of affidavits was directed to each of the contempt respondents and required that each of them: … file and serve within 7 days after expiration of the times set out in orders 1 and 2, an affidavit setting out: a. What they have done to deliver up possession of the vehicles to the plaintiff; b. If a vehicle has not been delivered up: i. Any reason you know as to why the vehicle has not been delivered up; ii. The persons and entities who currently has possession and dominion over the vehicles; iii. The location of the vehicles and the location at which the vehicle is usually garaged; iv. A statement that you do not have possession or dominion over the vehicle and cannot take any further action to cause the vehicle to be delivered up to the plaintiff. c. If the vehicle has been delivered up, a statement to that effect, indicating when and where the vehicle was delivered up.

Witnesses

In Reliance's case, evidence was given by Sam Peter Cassaniti. Mr Cassaniti is an accountant who is described as a "consultant" to Reliance, having authority to give affidavit evidence on its behalf. Five affidavits sworn by Mr Cassaniti in the course of the proceedings were read. Mr Cassaniti gave some brief oral evidence in reply to the evidence given by the defendants. He was not cross-examined.
A brief affidavit from Ms Perri was also read in Reliance's case. She was not required for cross-examination.
Although an affidavit of Jim Price had been filed in accordance with the Court's order, that affidavit was not read at the hearing before me. Instead, an updated affidavit made on 25 September was read and Mr Price was cross-examined. In the course of his cross-examination, an affidavit he swore on 18 May for the purposes of an interlocutory application was tendered. In that affidavit, Mr Price deposed to the current location of each vehicle and the entity or person having possession or control of the vehicle. He also deposed to the entity or person who had possession or control of each vehicle since 4 March 2018.
The affidavits of Scott Price and Megan Dreyer filed in accordance with the Court's orders were also read and each of them was cross-examined. In Ms Dreyer's case, an affidavit made on 25 July was tendered. That affidavit had apparently been prepared for the final hearing before McDougall J.
In submissions, counsel for Reliance challenged the truthfulness of each of the contempt respondents' evidence. I will deal with those challenges in more detail below.

Vehicles re-registered in Queensland

The evidence before me showed that after the proceedings were commenced, eight of the vehicles were re-registered in Queensland. The vehicles in question, the Queensland registration date, and the repossession date (where accounted for) are set out in the following table: Number Year Make Queensland Registration Repossession 8 2005 Kruger 23 August 2018 10 September 2018 10 2007 Maxi Trailer 23 August 2018 10 September 2018 11 2007 Maxi Trailer 19 June 2018 14 2006 Kenworth 19 June 2018 15 2008 Kenworth PM 4 June 2018 21 September 2018 16 2005 Kenworth PM 6 August 2018 10 September 2018 22 2013 Mitsubishi 18 June 2018 26 September 2018 33 2010 Inter Eagle PM 31 August 2018

All of the vehicles were re-registered in the name of Ava Haulage Pty Ltd. That company was incorporated on 6 March this year. Ms Ingham is shown in the ASIC filings as the sole director and secretary of the company. The company is recorded as having a paid up capital of $14,400 consisting of one hundred and twenty shares, which ASIC filings record as being beneficially owned by Ms Ingham.
The Queensland Government vehicle registration forms contained various details for the person or entity applying for registration, in this instance Ava Haulage Pty Ltd. In each case, Ava Haulage's address for correspondence was shown as an address in Carter Street, Oran Park, in western Sydney, where Ms Dreyer was living at the time (see [62]-[64] below). The email address was that of a Mr Troy Holzheimer, an associate of Mr Price's. The telephone number was a mobile telephone number which belonged to Jim Price. The garage address was given as an address in Chetwynd Street, at Loganholme in Queensland. That address is apparently used by a company called Jamdan Logistics & Transport Pty Ltd, of which Mr Holzheimer is a director.
The registration forms also included details of the individual who was nominated as Ava Haulage's authorised representative for the purpose of effecting the registration. For each of the four registrations effected in June, the representative was nominated as Jim Price (under the name "Harold Price"). The identification section contained the number of his NSW driver's licence and a signature purporting to be his. Accompanying each application was a one page document under the name and ACN of Ava Haulage Pty Ltd which stated "I authorise Harold Price to registered [sic] the vechile [sic] on my behalf" and was purportedly signed by Ms Ingham.
For the four registrations in August (after the Court's orders were made) Mr Holzheimer was nominated as the applicant's representative and there was an accompanying document purportedly signed by Ms Ingham on the part of Ava Haulage Pty Ltd which stated: I Sue Ingham as director of Ava Haulage PTY LTD authorise Troy Andrew Holzheimer to act on my behalf for the purpose of registering the vehicles at Queensland Transport.
The evidence of the delivery up of the vehicles comes from Mr Cassaniti. Mr Cassaniti stated that vehicles 8, 10 and 16 were "repossessed" on 10 September 2018 and that vehicle 15 was "delivered up on or around 21 September 2018" but provided no further details. Vehicle 22 was delivered up on 26 September 2018, the day before the hearing commenced before me. Mr Cassaniti's evidence was that it was left at the depot at Stonny Batter Road, Minto. The Queensland licence plates had been removed.
In his affidavit of 18 May, Jim Price said that vehicles 8, 10 and 16 had been since 4 March, and remained, in the possession or control of AEH. Mr Price gave their current location as a yard at Yarrawunga Road, Prestons, in south-western Sydney, which other evidence identifies as a yard belonging to a Mr Mark Collins.
In his affidavit of 25 September, Jim Price stated that he had been informed by Mr Collins that vehicles 8, 10 and 16 had been repossessed from the Yarrawunga Road yard by an unidentified "repossession agent". From the context this would allegedly have happened before 8 August. Mr Price continued that "in or about 13 September 2018" he saw vehicles 8, 10 and 16 (which are a prime mover and two trailers) being driven, as one unit, from an address at Dunn Road, towards Narellan Road, Smeaton Grange, in south-western Sydney. He said he had not seen or otherwise been involved with the vehicles since that date. The affidavit provided no context for Mr Price's claim. Mr Price did not say in the affidavit what he was doing in Smeaton Grange on the day in question or whose premises the address in Dunn Road was.
In his affidavit of 18 May, Mr Price said that vehicle 11 had been in the possession of Mr Cassaniti from 8 March. But in his affidavit of 25 September, Mr Price said that he had been "searching for the vehicle" since the orders were made on 27 July and that it too was sighted by him being driven from the address at Dunn Road towards Narellan Road in Smeaton Grange on or about 13 September.
In Mr Price's affidavit of 18 May, he said that vehicles 14, 15 and 22 were repossessed by an unspecified finance company before 4 March. But in his affidavit of 25 September, Mr Price contradicted this by giving an account which showed that he had retained possession of the vehicles after 4 March.
Mr Price said that vehicle 14 required major mechanical repairs and he delivered it to a company called G&S Diesel Services Pty Ltd at Victoria Street, Wetherill Park, for repairs to be carried out. He did not say when. He said that on 17 or 18 September he contacted a representative of G&S Diesel Services and told the representative that he had to deliver the vehicle to Reliance as a result of the orders made on 27 July. He said he was told that about half of the repair work had been done, $28,000 was owing and the vehicle would only be released if the repair work was paid for. Mr Price said he was unable to pay.
Mr Price said that vehicle 15 was delivered to the Minto premises on 21 September and attached a photograph of the vehicle at the Minto premises on that date. The affidavit provided no further details of where the vehicle had been before being redelivered. Similar evidence was given for vehicle 22.
In Mr Price's affidavit of 18 May, he said that vehicle 33 was in the possession of SBH. Its current location was given as Mr Collins' yard at Yarrawunga Road, Prestons. In his affidavit of 25 September Mr Price stated that vehicle 33 had been delivered up to the liquidator of SBH. Mr Price did not say when that had occurred.
In cross-examination, Jim Price denied any knowledge of the Queensland registrations. He denied that the signature appearing on the June registration application forms as the authorised representative of Ava Haulage was his, and he denied that the purported signature of Ms Ingham authorising him to conduct the registrations was hers.
I disbelieve this evidence. I am satisfied that Mr Price registered the four vehicles which were re-registered in Queensland in June and I am satisfied that when Mr Holzheimer re-registered the four vehicles in August, he did so by arrangement with Mr Price. Mr Price acknowledged in cross-examination that he spoke frequently to Mr Holzheimer.
Vehicles 8, 10 and 16 were registered in August, after the orders were made requiring Mr Price to deliver them up, or cause them to be delivered up, to Reliance. They were subsequently repossessed by Reliance. I cannot accept Mr Price's story about a "repossession agent" taking them from Mr Collins' yard. I am satisfied that they were in Mr Price's control at the time of the orders and that Mr Price wilfully breached the orders by failing to deliver them up.
Vehicles 15 and 22 were registered in June, before the Court made its orders. Those vehicles were repossessed by Reliance on 10 September, after the orders were made. I am satisfied that Mr Price had control of the vehicles in the meantime. Accordingly I am satisfied that he wilfully breached the orders by failing to deliver them up.
Vehicles 11, 14 and 33 are not accounted for. I will deal with vehicles 11 and 14 now, and with vehicle 33 when I consider the other vehicles registered to SBH.
Counsel for Reliance invited me to infer that vehicles 11 and 14 remain in Mr Price's possession or, at least, under his control. Counsel argued that I could be satisfied of this because Mr Price's evidence had no credibility whatsoever. Counsel invited me to find that the vehicles, having been in Mr Price's possession or control when re-registered, remain in his possession or control.
I am not prepared to make this finding with respect to vehicles 11 and 14 beyond reasonable doubt. The hearing took place more than three months after the vehicles were re-registered in Queensland. There is no independent evidence as to their whereabouts since their re-registration. All the Court has is Mr Price's assertion that he saw vehicle 11 being driven towards Narellan Road at Smeaton Grange on or about 13 September, and that vehicle 14 was in the possession of G&S Diesel Services Pty Ltd in Wetherill Park as at 17 or 18 September. I think that Mr Price's credibility is so threadbare that I am not prepared to accept either story.
I am satisfied that Mr Price's explanation for what happened to the vehicles is not credible. But this does not prove that he still has control of the vehicles. He may or he may not. There is simply no evidence on the question.
It remains to consider whether I can be satisfied that Mr Price had vehicles 11 and 14 at the time the orders were made on 27 July. Rejecting Mr Price's account, as I do, I think there is no credible evidence on that question either. In any event, the alleged sighting of vehicle 11 on or around 13 September is no admission that Mr Price was then, or had at any earlier time been, in possession of the vehicle; and even if it were accepted that Mr Price delivered vehicle 14 to G&S Diesel Services, there remains a possibility that he did so before the orders were made. Reliance did not present any evidence of any inquiries with G&S Diesel Services to verify that vehicle 14 is in its possession or, if it is, when it came into its possession.

Ford Cobra

Vehicle 25 is a Ford "Cobra" utility. It is a white car with a blue racing stripe and customised licence plates which read "JCOBRA". According to one of Mr Cassaniti's affidavits, in around March 2018 he called "John Price" (I assume this is a reference to Jim Price) and asked him why Scott Price was driving the Ford Cobra. Mr Cassaniti said the reply was: I have given the Ford to Scott, he feels like a loser without it. He needs a car to build up his self-esteem.
Mr Cassaniti also said on or around 18 July he had a conversation with Ms Perri in which she complained she kept receiving letters for fines on the Ford Cobra and the Prices would not give the car back to her. Ms Perri did not give any details about the fines.
Mr Cassaniti's affidavit did not identify how he knew that Scott Price was driving the Ford Cobra. There was no other evidence from Reliance to explain why Ms Perri parted with the car, or when.
In Scott Price's affidavit, filed pursuant to the Court's orders, he said that he went to Melbourne in July 2016 to "make a fresh start". He denied knowledge of the whereabouts of any of the vehicles the subject of the order. In his affidavit of 25 September 2018, Jim Price said that the Cobra was at the Minto depot when Mr Cassaniti, on behalf of Reliance or an additional entity, took possession of the depot on 4 March.
Mr Cassaniti gave evidence that when he took possession of the Minto property the Ford was not there. As mentioned, he was not cross-examined on this.
In cross-examination, Scott Price said that he had been lent the car by his father, but had returned it when he went to Melbourne in 2016. He denied having it in his possession in March 2018. In cross-examination, Jim Price said that he lent the car to his son in 2017 but it was returned to him in January 2018, before Mr Cassaniti allegedly obtained possession of it in March.
Counsel for Reliance invited me to find that Scott Price's evidence that he had returned the car at some point in 2016 when he went to Melbourne was false. But counsel appeared to accept that even if Scott Price had been in possession of the car earlier this year, he later returned it to Jim Price. Counsel invited me to find, however, that the car was still in Jim Price's possession.
There was no challenge to Mr Cassaniti's evidence of the conversation in March 2018 concerning the loan of the car to Scott Price or to his evidence that the car was not at the Minto depot. I see no reason not to accept that evidence. I am satisfied that as at March 2018 the car had been lent to Scott Price by Jim Price. I am prepared to accept that at some later point Scott Price returned it. But there is no evidence as to where the car is now. Ms Perri's evidence that she received ongoing fines on the car was not specific about when the fines were incurred. In the absence of independent evidence of the whereabouts of the car, I do not think I can be satisfied that it is in Jim Price's possession now, or that it was in his possession at the date of the orders.

Ford Falcon GT

Vehicle 26 is a blue Ford Falcon GT. The car was said in the course of the hearing to be something of a collector's item. Prior to October 2017, it was registered in Ms Perri's name. In evidence is a transfer of the registration from Ms Perri to Ms Dreyer dated 10 October 2017. The transfer price was shown as $21,000.
Ms Perri's affidavit provided no context or explanation for how she came to part with possession of the car. All she said was that she had not signed the transfer or received any money for the sale of the car.
In her affidavit of 25 July, Ms Dreyer said that Jim Price gave her the car as a gift and in recognition of loans that she and her husband made to him. According to Ms Dreyer, Jim Price told her that the car may have exceeded the value of the loans, but that he wished her to keep the car as an investment for her children. Ms Dreyer said that there was finance on the vehicle but she was not making the payments and did not know who was. She said: I have had the vehicle registered in my name since 14 October 2017.
But in her 8 August affidavit, Ms Dreyer said that although her father gave her the car in around October 2017, she gave it back to him as she had nowhere to keep it at home (she was then living with her family in a rented house at Oran Park in western Sydney). She said she did not recall when exactly she gave the car back.
In his 25 September affidavit, Mr Price said that he sold the car to a Carl Slater in April 2018. He said that following the making of the delivery-up orders on 27 July, he asked Mr Slater to return the car, but Mr Slater refused to do so and said that he owed money on the car to BMW Finance.
In cross-examination, Ms Dreyer said that her father asked her to take a transfer of the car and she attended the motor vehicle registry with him to sign the transfer as purchaser. She was pressed on when she gave the car back to her father. Initially she said it was June or July, maybe. Later, she said it was months and months before she left the Oran Park address, at the end of August. She could not say whether it took place before 1 July. She was then asked whether she gave the car back to Jim Price "months before" the hearing on 26 July. She said it was "definitely" before then. When pressed on whether it was months before then, she said she did not remember the exact date.
In cross-examination, Mr Jim Price accepted that he gave the Ford GT to Ms Dreyer. He said this was so she could keep the vehicle for her two children, but that he ended up taking the vehicle back and selling it for solicitors' fees. He said he sold it on about 2 April. He said that he owed money on the car to BMW Finance and Mr Slater took over the debt. He said that it was initially acquired as an investment for his grandchildren and was worth about $85,000. He said he sold it to Mr Slater for $20,000 but there was still $30,000 owed to the finance company. He said that as far as he knew Mr Slater had not registered it.
Counsel for Reliance criticised Megan Dreyer's evidence on this question. Counsel submitted that her affidavit of 25 July implied that she still had possession of the car at that point; if she had given it back to her father by then, she would have said so. Counsel submitted that I should find that in fact Ms Dreyer had never returned the vehicle and still had possession of it.
I agree that the way in which Ms Dreyer's 25 July affidavit was written suggested that she still had the car. But this is only an implication in the affidavit, which might not have been understood by Ms Dreyer. There is nothing else to contradict her evidence that she returned the car before the orders were made. In cross-examination she offered for a representative of Reliance to come and look for the car, but this was not taken up. There is nothing implausible about Jim Price's evidence that he took the car back and sold it to raise legal fees. Whether that was in April or some later point is not relevant for the purposes of the contempt allegation against Ms Dreyer. Taking the evidence as a whole, I am not prepared to find beyond reasonable doubt that she still has possession of the car, or that she had the car when the orders were made.

Sydney Bulk Haulage vehicles

As stated, SBH is in liquidation. The liquidator was appointed on 22 June. The liquidator's statutory report to creditors, issued on 21 September, is in evidence. So too is a letter from the solicitors for the liquidator to the solicitors for Reliance dated 17 October. The liquidator's report identified three vehicles registered to SBH. Two of them correspond with vehicles 32 and 33. The liquidator's report of 21 September 2018 identified a third registration which does not correspond to vehicles 34 or 31 (vehicle 34 is a trailer). The report stated that none of the three vehicles identified in the report were in the possession of the liquidator.
Of the four vehicles described in the order as being registered to SBH, vehicle 31 was a prime mover and vehicle 34 a trailer. Although the liquidator's report of 21 September stated that he did not have possession of any of the vehicles mentioned in the report, the liquidator's later letter asserted that vehicle 31 had been delivered up to him "sometime in August of 2018". Although the letter did not expressly say so, counsel for Reliance proceeded on the basis that vehicle 34, the trailer, went together with the prime mover and had been delivered up around the same time. No submission to the contrary was made by counsel for the contempt respondents.
According to his solicitors' letter, the liquidator was not aware of these proceedings when he was appointed. I find this aspect of the orders somewhat troubling. The orders made against the contempt respondents were made against them individually. But the Summons proceeded on the basis that the vehicles in question were registered to, and owned by, SBH. Once a liquidator was appointed to SBH, no further step should have been taken in the proceedings so far as that company was concerned. Insofar as orders were made against the contempt respondents for delivery up of the vehicles registered to SBH, those orders were, arguably at least, made against them as officers or agents of the company.
Had the Court been informed before the July hearing that SBH was in liquidation, the proceedings would have been stayed as against that company and the orders for the delivery up to Reliance of the vehicles registered to SBH would not have been made. But the orders were in fact made; and no application was made on behalf of the contempt respondents to set them aside, nor was the point taken in submissions for the contempt respondents. In these circumstances, I think I must proceed to make findings on the footing that the orders compelled the contempt respondents to deliver the vehicles up to Reliance.
The liquidator's letter stated that vehicles 31 and 34 were delivered up by the "director" of SBH. According to the ASIC filing, the sole director of SBH was Ms Ingham. The circumstances give rise to a suspicion that it was actually Mr Price, not Ms Ingham, who was in possession of, and delivered up, the vehicles. But no clarifying evidence was obtained from the liquidator and there is no proof. I am not satisfied that Mr Price had possession of the vehicles when the orders were made.
It remains to consider vehicle 33. As the vehicle was re-registered in Queensland by Mr Price on 31 August, I am satisfied that he had possession of it when ordered to deliver it up. I therefore find that Mr Price wilfully failed to comply with the orders so far as vehicle 33 is concerned. But I am not satisfied that Mr Price still has possession or control of the vehicle. There is no independent evidence that he does. He does not admit that he does; indeed, he alleges it has been delivered up to the liquidator. Reliance did not obtain any evidence from the liquidator on this question. There is insufficient evidence to prove that Mr Price still has the vehicle.

Contempt charges

As already mentioned, counsel for Reliance contended that the mere fact that the vehicles were not delivered up by the date specified in the order, namely 1 August, gave rise to a contempt. Counsel submitted that the contempt which arises from failure to comply with an order of the Court is strict, in the sense that contempt is committed whenever the person fails to do something which the order, on its true construction, requires to be done. Counsel submitted that if the contempt respondents had been unable to comply with the orders because they did not have possession or control of the vehicles, this was a matter to be raised in opposition to the making of the orders in the first place. As I understood him, counsel submitted that McDougall J, by making the orders in the form in which he did, had effectively decided that the contempt respondents would be able to comply with them. Once the orders had been made, in counsel's submission, then a contempt was committed if the vehicles were not delivered up and questions of impossibility went only to penalty.
In Wyszynski v Bill [2005] NSWSC 110 an order had been made that the plaintiffs deliver up to the Registrar of the Court a document purporting to be the will of a deceased person. The document was not delivered up to the Registrar by the nominated time. The defendant, on whose application the order had been made, applied to have the plaintiffs found guilty of contempt. The first plaintiff filed an affidavit which stated she had an anxiety attack in which she had torn up various documents. She said she had searched her records and been unable to find the purported will. She said she must have destroyed it during the anxiety attack.
Counsel for the defendant contended that the failure to deliver up the document, without more, amounted to contempt. The submission was that if the order could not be complied with, an application should be made to discharge it. If this did not happen then failure to comply with it would give rise to a contempt.
White J (as his Honour then was) rejected this contention. His Honour accepted that until and unless an order is discharged there is an obligation to comply with it. But in his Honour's view, it was still an essential requirement in establishing contempt of the order to prove that the terms of the order were capable of being complied with. His Honour continued (at [59]): The power to punish for contempt under [Supreme Court Rules 1970 (NSW)] Part 42 r 6(1)(a) or (b) arises where the person "refuses or neglects" to do the act which the Judgment or order requires. A person does not "refuse or neglect" to do an act which he or she is incapable of performing. Hence in Re Bramblevale Pty Limited [1970] Ch 128 the UK Court of Appeal held that because the evidence did not establish beyond reasonable doubt that the alleged contemnor had the documents which he was ordered to produce when the order for production was made, the charge of contempt was not established. This conclusion is inconsistent with the defendant's submission.
In Markisic v Commonwealth of Australia (2007) 69 NSWLR 737; [2007] NSWCA 92 the appellant had, in the proceedings at first instance, caused a subpoena to be issued to the Commissioner of the Australian Federal Police. The appellant claimed that the Commissioner had failed to produce all of the documents caught by the subpoena. Campbell JA, giving the decision of the Court of Appeal, said (at [61]): The appellant submits that it is quite clear that there has been non- compliance with the subpoena, because the Commissioner has not produced the documents referred to in it. However, mere non-production of documents that are called for by a subpoena, or other court order to produce documents, is insufficient to establish that there has been a contempt. As well, it needs to be established that, at the date on which the documents were required to be produced, the alleged contemnor had documents that met the description of the documents called for by the subpoena or other order to produce: Re Bramblevale Ltd [1970] 1 Ch 128 at 137-138; Thorpe v Marr's Furniture Removals Pty Ltd (ACN 056 093 853) [2000] QSC 279 at [11]; Wyszynski v Bill [2005] NSWSC 110 at [59]-[61].
His Honour concluded that (at [64]): …proof that a contempt has been committed by breaching a court order involves proving enough to conclude that the action or inaction said to constitute the breach was deliberate, and not casual, accidental or unintentional.
The phrase "casual, accidental or unintentional" can be traced back to the decision of the English Court of Appeal in Fairclough v Manchester Ship Canal Co [1897] WN 7; (1897) 41 Sol Jo 225. The phrase was, as Campbell JA pointed out, adopted by the High Court in Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98; [1986] HCA 46 at 111-113.
In Anderson v Hassett [2007] NSWSC 1310, the defendant executor had been ordered to produce to the Court all of the records of the administration of the estate the subject of the proceedings. The plaintiff, on whose application the order had been made, charged that the defendant was guilty of contempt by failing to produce all of the relevant documents. Brereton J (as his Honour then was) said it was unclear whether the contempt motion was brought pursuant to the Supreme Court Rules 1970 (NSW) ("SCR"), Part 55 or the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"), Part 40. His Honour equated the Part 40 procedure with a civil contempt, and the Part 55 procedure with a criminal contempt. It was submitted on behalf of the defendant that it was not enough for there to be a contempt that there be an act or omission in breach of the Court's order. The submission was that the act or omission had to be accompanied by an intention to disobey the Court's order. Brereton J rejected this. He found the defendant guilty of contempt on the basis that he had in his possession documents covered by the order but which he did not produce. The breach was not "casual, accidental or unintentional" in the relevant sense and it did not matter that the defendant had no specific intention to defy the Court's order.
In Davies v Beyond Building Systems Pty Ltd [2009] NSWSC 1282 an interlocutory order was made in oppression proceedings requiring the defendants to reinstate the plaintiff's capacity to access financial records of the company in question by providing the plaintiff's solicitor with all access codes, passwords and other information necessary to enable him to have access. The plaintiff's access to a particular account was not restored and the plaintiff charged that two of the defendant directors, Mr Smith and Mr Horthy, were guilty of contempt in failing to provide the necessary access codes, passwords, etc. Mr Horthy did not have any direct personal knowledge of the password for the account in question.
Brereton J referred (at [15]) to a statement by BE Sufrin and NV Lowe, Borrie & Lowe: The Law of Contempt (Butterworths, 3rd ed, 1996) at 568: "So far as disobedience to a positive order is concerned, it has been held that it is the duty of the defendants to find out the proper means of obeying the order and although it may be a defence to show that compliance with the order was impossible, the burden of proving such an impossibility is upon the defendants."
His Honour continued (at [17]-[18]): [17] I put to one side, because I think they fall in a different category, those cases that deal with orders for production of documents. I dealt with such a case in Anderson v Hassett; see also Markisic v Commonwealth [2007] 69 NSWLR 737, [61]; and Re Bramblevale Limited [1970] Ch 128. All those cases concerned orders for production of documents or a subpoena for production of documents. It is implicit in an order for production or a subpoena for production, and indeed in many cases explicit, that what is required of a party responding to such an order or subpoena is production of documents from within his or her possession, custody or power. That is a matter of construction of the order, and not one of impossibility. In order to establish that there has been contempt, it is necessary in such a case to show that there are documents of the type in question in existence and that they were in the possession, custody or power of the alleged contemnor. [18] The order in the present case is not an order for production. In my view there is no reason, as there was in Anderson v Hassett, to construe the order as limited to things in each defendant's possession, custody or power.
His Honour then (at [20]) referred to Heatons Transport (St Helens) Ltd v Transport and General Workers' Union [1973] ICR 1 where Sir John Donaldson said: Orders of any court must be complied with strictly in accordance with their terms. It is not sufficient by way of answer to an allegation that a court order has not been complied with for the person concerned to say that he 'did his best'. But if a court order requires a certain state of affairs to be achieved, the only way in which the order can be complied with is by achieving that state of affairs.
But his Honour then went on to refer to Pattison v Bell [2007] FCA 137, where Gray J, relying on Re Bramblevale Ltd [1970] Ch 128, rejected the view expressed by Borrie & Lowe. Brereton J also referred to the judgment of Campbell JA in Markisic and in particular the passage which I have quoted at [79] above. His Honour concluded that he should follow the judgment of Gray J and hold that it was for the applicant to prove that the alleged contemnors could have performed the acts in question. But his Honour added (at [30]): While I accept, following Gray J's decision, that the onus of proving that the contemnor could have performed the act involved falls on the applicant, I also accept that to the extent that that requires modification of what Sir John Donaldson said in Heatons Transport - so that it might now be enough for the respondent to say that he "did his best" - an order such as this at least imposes on a party bound by it an obligation to use their best endeavours to comply with it, and not simply to make no endeavour because of a view that they could not be assured of success in making that endeavour. While I accept that the onus of showing that the respondent could comply with the order falls on the applicant, that does not mean that the respondent bears no evidentiary onus on the issue. To the contrary, in cases of impossibility, there will ordinarily be some evidentiary onus on the respondent, at least to raise the issue and adduce some evidence on it. In this case it seems to me abundantly clear that the non-compliance was intentional in the relevant sense and not attributable to accident or impossibility. To my mind, anyone in Mr Horthy's position who was seriously attempting to comply with the order of the court would at least have asked Mr Smith - who he knew had the password - to provide it, and would have - in his position as CEO and thus having the authority of the Board over the employees of the company - have asked employees of the company to provide it. The possibility of compliance is most clearly demonstrated by the fact that when Mr Horthy later asked Mr Smith for the password, for the purpose of providing it to their lawyers in connection with the defence of the present application, Mr Smith apparently voluntarily provided it to Mr Horthy and then to their lawyers and then to the court.
A preliminary question is the source of the Court's power in the present case. UCPR r 40.6 relevantly provides: 40.6 Doing Or Abstaining From Doing An Act (1) This rule applies in the following circumstances: (a) if: (i) a judgment requires a person to do an act within a time specified in the judgment, and (ii) the person fails to do the act within that time or, if that time is extended or abridged, within that time as extended or abridged, (b) if: (i) a judgment requires a person to do an act forthwith, or forthwith on a specified event, and (ii) the person fails to do the act as so required, (c) if: (i) a judgment requires a person to abstain from doing an act, and (ii) the person disobeys the judgment, but does not apply to a judgment for the payment of money (including a judgment for the payment of money into court). (2) In circumstances to which this rule applies, a judgment may be enforced by one or more of the following means: (a) committal of the person bound by the judgment, (b) sequestration of the property of the person bound by the judgment, (c) if the person bound by the judgment is a corporation: (i) committal of any officer of the corporation, and (ii) sequestration of the property of any officer of the corporation.
SCR, Pt 55 contains, in Division 2, provisions dealing with contempt in the face or hearing of the Court. Division 3 prescribes the procedure to be used in dealing with an allegation of contempt other than one under Division 2. It provides, among other things, for the filing of a statement of charge specifying the contempt of which the contemnor is alleged to be guilty. The term "contemnor" is defined (rule 1) as "a person guilty or alleged to be guilty of contempt of the Court or of any other Court". Division 4 deals with general matters. Rule 13 provides: 13 Punishment (1) Where the contemnor is not a corporation, the Court may punish contempt by committal to a correctional centre or fine or both. (2) Where the contemnor is a corporation, the Court may punish contempt by sequestration or fine or both. (3) The Court may make an order for punishment on terms, including a suspension of punishment or a suspension of punishment in case the contemnor gives security in such manner and in such sum as the Court may approve for good behaviour and performs the terms of the security.
UCPR r 40.6 does not use the term "contempt". It may therefore be possible to pursue the remedies set out in r 40.6, namely committal or sequestration, for the purpose of the enforcement of an earlier order, without the proceedings attracting the requirements of SCR Pt 55, Div 2. But it is not necessary to decide in this case whether that is so.
Reliance's Notice of Motion sought orders that the contempt respondents be found guilty of contempt with respect to each of the vehicles and that each of them be imprisoned "at least until" the orders were complied with. In addition, the Notice of Motion sought: …in lieu of imprisonment or in addition thereto the Court impose such other sanction on the defendants as the Court determines to be appropriate.
Counsel for Reliance initially suggested that committal orders should be made against the contempt respondents, but the operation of those orders should be suspended to allow them to return the vehicles (which, so counsel contended, the Court would be satisfied they still controlled). The use of a threat of committal in this way could be seen as coercive rather than punitive. But as the application developed, it became clear that Reliance was seeking to have Jim Price, at least, committed for failing to deliver up the second class of vehicles by the time nominated in the 27 July orders, even though they were subsequently delivered up. Counsel for Reliance also made it clear that if the Court was satisfied Ms Dreyer had committed a contempt because she still had the Ford GT, committal to prison would be inappropriate because she is pregnant. Instead, counsel contended, the Court should proceed to fine her.
The relief sought by Reliance in the present case thus extends beyond that in r 40.6. Orders for imprisonment or some other punishment on the basis of a past failure to comply with court orders could not be seen as "enforcement" for the purposes of r 40.6. Furthermore, there is no power under r 40.6 to impose a fine. To that extent, Reliance must base itself on the Court's general power under SCR Pt 55. In fact, proceedings have been conducted on a statement of charge in accordance with SCR Pt 55.
In determining whether any of the contempt respondents is guilty of contempt as charged, the first question is one of construction of the order made on 27 July. Was the order, on its true construction, limited only to vehicles in the possession, custody or power of the contempt respondents, along the lines of the limitation suggested by Brereton J in Davies for the production of documents?
Certainly some orders for the production of the documents must be construed to be limited in this way. Whereas a subpoena requires the production of documents in a particular class, that can only be understood as an order to produce such documents in that class as the recipient has. But where an order requires the production of a specific document, it may be less clear that there is an implicit limitation that the order only requires production if the document is actually in the recipient's possession. On the face of such an order, it is unqualified in terms. But it is not necessary to explore the analogy further in this case.
The orders made on 27 July require that the contempt respondents deliver up or cause to be delivered up the relevant vehicles. The italicised words make it clear, as a matter of construction, that the vehicles need not necessarily be in the possession, custody or power of the contempt respondents at the time the orders were made. The orders did not simply require them to produce the vehicles if in their possession; it required them to cause whoever was in possession of the vehicles to deliver those vehicles up.
Accordingly, I find myself in the same territory as that explored by Brereton J in Davies. His Honour concluded in that case that although the order in question contained the unqualified requirement to disclose the password, nevertheless there would be no contempt unless the failure to do so was not "casual, inadvertent or accidental". But counsel submitted I should not follow his Honour's approach. Counsel submitted that liability was strict. Reliance was placed on Athens v Randwick City Council (2005) 64 NSWLR 58; [2005] NSWCA 317.
In my view, it is not just a question whether to follow what Brereton J said in Davies. The Court of Appeal decision in Markisic is a considered one which is binding on me. The statement of principle which I have quoted at [79] above applies, in terms, to this case. Campbell JA cited the decision of White J in Wyszynski with approval. White J did not suggest that the order in that case, as a matter of construction, only required production of the purported will if it was in the possession of the plaintiff at the time. In the present case, the order required the production of specified things, namely the vehicles. It is not easy to see why a different approach should apply just because the specified thing is a document. In fact, of course, the order also required production of specified documents, namely the logbooks.
Wyszynski involved the application of SCR Pt 42 r 6, which is the predecessor of UCPR r 40.6. There is a difference in wording between the rules. SCR Pt 42 r 6 applied where a party "refuses or neglects" to comply with an order of the Court, and White J referred specifically to that language in concluding that something more than mere non-compliance was required. UCPR r 40.6 refers only to the party "failing" to comply with the order.
Markisic was decided under SCR Pt 37 r 12 (the predecessor of UCPR r 33.12) which provided: Failure to comply with subpoena - contempt of court (1) Failure to comply with a subpoena without lawful excuse is a contempt of court and the addressee may be dealt with accordingly.
In approving the decision of White J, Campbell JA did not refer to the difference in wording of the relevant rules or suggest that the use of the term "failure" in SCR Pt 37 r 12 should make any difference. Failure to do an act can sometimes mean a mere omission to do the thing in question. But in other cases it may mean an omission to do the thing by reason of some carelessness or delinquency, but not an omission caused by impossibility for which the person in question is not responsible: Ingram v Ingram (1938) 38 SR (NSW) 407 at 410-411 per Jordan CJ. Which meaning the term bears depends on the context. In a criminal context, it is the second meaning, more favourable to the accused, which should be adopted: cf Deputy Commissioner of Taxation v Ganke [1975] 1 NSWLR 252 at 257. It follows, in my view, that I should proceed on the basis that breach of the order must be wilful, in the sense that such breach is not casual, accidental or unintentional.
Usually injunctions granted by the Court are negative in form. No question of breach of the order can arise unless the recipient does something positive to breach it. In such cases, questions of wilfulness could rarely arise. That may explain why it is often said in injunction cases that liability for breach is strict. But if the defendant does the prohibited act involuntarily, or otherwise non-wilfully, then there is no liability. Where, as here, the injunction is mandatory in form, so that an omission to achieve something is a contravention, the wilfulness requirement will be more important.
To say that breach must be wilful is not inconsistent with the proposition that liability for breach of an order is strict. If the recipient of the order does something which the order, on its true construction, prohibits, or if the recipient fails to do something which the order, on its true construction, mandates, then the only question is whether the omission or act was wilful in the relevant sense. It does not matter that the recipient has no intention to defy the Court's order or even that the recipient does not correctly understand what it is that is required: cf Athens at [36]-[37].
Nor do I accept the submission that impossibility of compliance can only be addressed by applying to set aside the order. It is clear from the judgment of McDougall J, quoted at [20] above, that his Honour contemplated the possibility that one or other of the defendants might not be able to comply with the order in relation to one or more of the vehicles. Indeed, the order required each of the defendants to deliver up each of the vehicles. If one of the defendants had delivered up a vehicle, then none of the other defendants could have done so. It would be absurd to suppose on those circumstances that the other defendants could be prosecuted for contempt.
If the Court had to consider, before making an order for specific delivery of the type made in this case, whether it was possible to comply with the order, the Court could be distracted by lengthy and unproductive debate on the practicalities or otherwise of compliance. Compare the issue of impossibility in cases of specific performance, to which I referred in Ryde Ex Services Memorial and Community Club Ltd v Kaloriziko Ryde Pty Ltd (2017) 19 BPR 38,113; [2017] NSWSC 1576 at [29]. And even if the Court never made such an order unless satisfied that it could be complied with as at the date the order was made, there would still be the problem of supervening impossibility. On the approach of counsel for Reliance, it would be necessary in that event to seek to have the orders discharged, thus potentially giving rise to debates about the finality of the orders previously made, the scope of any liberty to apply, and the degree to which the supervening possibility might or should have been foreseen at an earlier point.
The law as stated in Markisic and by Brereton J in Davies makes it unnecessary to go into such questions, by allowing the Court to make the order and "wait and see". If the property is delivered up, no problem arises. If it is not delivered up, it is open to the party who obtained the order to pursue the question further by way of contempt proceedings. Impossibility thus only needs to be debated in cases where it matters in practice.
The source of the Court's power to make the orders of 27 July was not the subject of any submission by either party before me. It has long been recognised that courts of equity have power to make orders for specific delivery of chattels in a case where damages for conversion or detinue would not be an adequate remedy. That would include a case such as the present where there is reason to believe that money judgments would be uncollectable: Orr v Lane (1951) 52 SR (NSW) 37 at 40-41. It is common ground that Jim Price is a bankrupt and that is why a fine against him is not sought.
In principle, if an order for specific delivery is made but then not complied with, it ought to be possible for the plaintiff then to obtain a judgment for damages instead. The rationale for equity's involvement is the inadequacy of damages, but if specific delivery cannot be obtained, then the plaintiff should be entitled to damages so that the plaintiff has at least some remedy. I think there is an analogy with the Court's ability to award damages following the dissolution of an order for specific performance of a contract: Georges v Wieland [2010] NSWSC 1378 at [25].
It follows that it would have been open to Reliance to have asked for the orders for specific delivery which it obtained, but to invite the Court to defer the issue of damages until the time for compliance with the order had passed so that damages could be claimed if any of the vehicles had not been delivered up. But counsel for Reliance did not, apparently, argue this before McDougall J and it seems that a claim for damages would be of no value in any event. There is no need to consider this matter any further.
For these reasons, Reliance must prove, beyond reasonable doubt, that the non-compliance by the contempt respondents with the orders was wilful in the relevant sense. On the findings which I have made on the facts concerning the second class of vehicles, that is established as against Jim Price for vehicles 8, 10, 15, 16, 22 and 33. It is not established against Mr Price for vehicles 11, 14, 25, 31 and 34. Given my conclusion that breach must be wilful, it is not enough to establish contempt with respect to the class 3 vehicles that they were not delivered up. Mr Price denied that he had the vehicles in his possession and said they had been disposed of or were otherwise irretrievable. However unbelievable Mr Price's evidence was generally, this was enough to discharge any evidentiary onus he may have had. There was no evidence to the contrary. The charges against Mr Price with respect to the class 3 vehicles must be dismissed.
So far as Megan Dreyer is concerned, I am not satisfied that there was a wilful non-compliance with the order so far as it related to the Ford GT. Rejecting, as I do, the submission that non-compliance gives rise to contempt, the other charges against her must be dismissed. For similar reasons, the charges against Scott Price must also be dismissed.

Conclusions and orders

I find the ninth defendant, Harold James Price, guilty of contempt of court in that he wilfully failed to deliver up vehicles 8, 10, 15, 16, 22 and 33 in accordance with the Court's order of 27 July 2018. Otherwise, I dismiss the charges against him. I dismiss the charges against the tenth defendant, Megan Dreyer, and the eleventh defendant, Scott Price.
I will hear the parties on the questions of penalty and costs.

Amendments 23 November 2018 - Corrected minor typographical errors. 09 April 2019 - correct typographical errors DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 April 2019

Court Rules 1970(NSW)

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