JUDGMENT
1 I am dealing with matters that remain to be determined following my judgment of 1 May 2008 ([2008] NSWSC 386). Certain relief was granted on 26 June 2008. There is, however, controversy as to whether further orders should be made to give effect to the findings announced on 1 May 2008.
2 The orders, declarations and directions made on 26 June 2008 are as follows:
" The Court Orders:
1. That the plaintiffs' claims be dismissed.
2. That an account be taken of all money of the cross claimant North Shore Sikh Association Incorporated which has been received or disbursed by the first cross defendant Shaun Jit Singh Thiara and of his transactions and dealings with money of the cross claimant which he controls or which he has controlled and that he do pay to the cross claimant the amount, if any, which shall be found to be due upon the taking of such account, together with interest thereon pursuant to section 100 of the Civil Procedure Act, 2005.
3. That the Associate Justice be authorised and empowered to certify the amount of the interest payable pursuant to order 2 and to determine all questions of costs of the taking of the account.
The Court Directs:
4. That the first cross defendant do, within 21 days after the date of these orders, file and serve upon the cross claimant his detailed account, verified by his affidavit, of all money of the cross claimant that he has or any other person on his behalf has received or disbursed.
5. That such account shall specify in respect of each payment or receipt the date and amount thereof, to whom the payment was made and the purpose or account for or to which the amount was paid or received as the case may be.
6. That the first cross defendant do, within 21 days after the date of these orders, file and serve upon the cross claimant his detailed statement verified by his affidavit specifying
what he claims to be the property and funds of the cross claimant which are under his control, the present ownership and whereabouts of each such item of property,
the particulars of the name and branch of the bank or financial institution at which any account is held into which funds of the cross claimant have been paid, together with the account number, name and address of the account holder, and the present balance of each such account, and,
if or to the extent that such property or funds has or have been lost or misappropriated when and by whom and under what circumstances.
7. That the items of such account and statement be numbered consecutively.
8. That the cross claimant be at liberty within one month after the service upon it of the said account and statement to apply to an Associate Justice, Equity Division, to examine the first cross defendant viva voce or upon interrogatories in respect of the said account and statement.
9. That the cross claimant within 14 days after service upon it of the said account and statements or within 14 days of the conclusion of the examination of the first cross defendant referred to in order 8 have liberty to file and serve upon the first cross defendant its surcharges, falsifications and objections (if any) thereto.
10. That all vouching be done out of Court.
11. That the matter be stood over to [ date ] before the Associate Justice for the purpose of fixing a date for the hearing of the inquiry into the said account and statement.
12. That the evidence to be used on the said inquiry be oral evidence.
13. That each of the cross claimant and the first cross defendant have liberty to apply in respect of the directions concerning the accounting on 7 days notice.
The Court Declares:
15. That the first cross defendant Shaun Jit Singh Thiara is not a member of the Board of Trustees, is not the secretary, is not the convener, is not the financial controller, is not the treasurer, is not a member of the executive committee and is not otherwise an officer of the cross claimant North Shore Sikh Association Incorporated.
The Court Orders:
16. That each of the cross defendants be restrained from, by himself, herself, his and her servants or agents, holding out to any person that the first cross defendant is the holder of any of the following offices in the cross claimant:
a member of the Board of Trustees,
Secretary,
Convener,
financial controller,
Treasurer,
member of the executive committee
or otherwise an officer of the cross claimant.
The Court Declares:
17. That each of the second cross defendant Terlochan Singh, third cross defendant Sukhdev Singh and the fourth cross defendant Balbir Singh is not an officer of member of the executive committee of the cross claimant North Shore Sikh Association Incorporated.
The Court Orders:
18. That each of the cross defendants be restrained from, by himself, herself, his or her servants or agents, holding out any of the second, third and fourth cross defendants to be officer or member of the executive committee of the cross claimant.
19. That the first cross defendant do deliver up to the cross claimant by its solicitor the Certificate of Title in respect of the property known as 81-83 Kissing Point Road, Turramurra in the State of New South Wales, being the land comprised in lots 1 and 2 of Section 2, in Deposited Plan 32030.
20. That each of the cross defendants do deliver up to the cross claimant by its solicitor the books, records and property of the cross claimant in his or her possession, custody or control.
…
22. That the interlocutory order made by Gzell J on 31 October, 2005 in terms of paragraph 4A of the Short Minutes initialled by his Honour be dissolved, namely, the order that
'Pending further order the seventh defendant Commonwealth Bank of Australia be directed to recognize Mr Shaunjit Singh and Mr Pardeep Singh Gill as the signatories to the bank accounts of the 8th defendant with both of these persons being required to sign all cheques and other documents required to operate the said bank accounts.'"
3 The first matter still in dispute is whether it should be ordered that Shaunjit Singh (the first cross-defendant) pay damages to the Association (cross-claimant) for wrongful interference with contractual relations. It is submitted on behalf of the Association that such an order should be made, despite the statement at paragraph [210] of the judgment that the "Association's claim for damages for interference with contractual relations fails".
4 The judgment recordeded a finding that the Commonwealth Bank did not commit a breach of contract against the Association when it refused on a continuing basis to release funds to the Association on the signatures of persons nominated by the defendants' faction. Then followed paragraph [209]:
"There are possible grounds for a finding that, after 30 October 2005, Shaunjit Singh obstructed the making of payments by the Association in connection with the building works. I refer to the evidence about his non-attendance at the Commonwealth Bank, Seaforth, at 1.30pm on a particular day. By then, however, D S Flora had stopped work on the project. Any such actions by Shaunjit Singh were therefore not causative of disruption of contractual performance."
5 It had earlier been said (at paragraph [200]):
"The Association breached its contract with D S Flora in that it did not pay sums due to him . . ."
6 The Association says that there is here a finding that Shaunjit Singh, by his communications with the bank, induced or procured the breach of contract by the Association consisting of its failure to pay D S Flora.
7 The plaintiffs (as cross-defendants) take the point that any such interference with contractual relations - that is, an interference consisting of inducing or procuring a breach by the Association of its contractual obligation to make payment to D S Flora - was not pleaded. Paragraphs 39 and 40 of the cross-claim were in these terms:
"39. Since about April, 2005 the cross defendants, particularly by the agency of the first cross defendant, have on numerous occasions directly and indirectly sought to dissuade Mr Flora from continuing to perform the said building contract and have, by their said interference with the cross claimant's bankers, attempted to prevent the cross claimant from paying Mr Flora and to induce Mr Flora to cease performing his building contract with the cross claimant.
40. The said conduct was a direct interference with the contractual relations between the cross claimant and Mr Flora or, alternatively, an indirect interference by unlawful means."
8 The reference in paragraph 39 to "the said interference with the cross claimant's bankers" is a reference back to paragraphs 37 and 38:
"37. Since about September, 2003, the cross defendants, particularly by the agency of the first cross defendant have on numerous occasions directly sought to persuade the cross claimants various bankers to refuse to honour cheques drawn on the cross claimant's said accounts and to refuse to permit drawings to be made on such accounts otherwise than with the authority of the cross defendants or the first cross defendant.
38. By the said conduct the cross defendants have directly interfered with the contractual relations between the cross claimant and its bankers."
9 I accept the cross-defendants' submissions in this respect. The breaches of contract to which the claim of wrongful interference on the part of Shaunjit Singh related were, on the pleadings, breaches by D S Flora. The Association's cross-claim was to the effect that Shaunjit Singh's conduct was directed towards causing D S Flora to fail to perform the building contract. The reference in paragraph 39 to attempts to prevent the cross-claimant (Association) from paying D S Flora is not a reference to direct interference in the performance by the Association of its payment obligations owed to D S Flora; it is a reference to an intermediate step in the alleged means by which Shaunjit Singh induced D S Flora to cease performing his contractual obligation to do building work, being an obligation owed to the Association. The pleading is framed on the basis that actions of Shaunjit Singh vis a vis the bank amounted to attempts to cause the Association to stop paying D S Flora and that in turn was a means of inducing D S Flora to breach his obligation to do building work.
10 The further order sought by the Association (see paragraph [3] above) will not be made. Rather, there will be an order as follows in accordance with the reasons previously published:
"Order that the cross-claimant's claim for damages for tortious interference with contractual relations be dismissed."
11 I turn now to the second outstanding matter, being the contention of the Association as cross-claimant that there should be orders as follows:
"23. That the matter be referred to an Associate Justice, to inquire into and certify what are the damages suffered by the cross claimant as a result of the failure or refusal of the first plaintiff since 31 October 2005 to sign cheques drawn upon or to otherwise authorise the making of payments to Davinder Singh Flora from the bank accounts of the 8th defendant, North Shore Sikh Association Incorporated held with the seventh defendant Commonwealth Bank of Australia.
24. That the plaintiffs pay to the 8th defendant North Shore Sikh Association Incorporated the amount (if any) found due upon the inquiry directed by order 23, together with interest pursuant to section 100 of the Civil Procedure Act, 2005.
25. That the Associate Justice be authorised and empowered to certify the amount of the interest payable pursuant to order 24 and to determine all questions of costs of the taking of the inquiry."
12 The Association's contention is sourced in an undertaking given by the plaintiffs to the court on 31 October 2005. The record of proceedings before Gzell J on that day records the following:
"Upon the plaintiffs by their counsel giving the usual undertaking as to damages, by consent of the first to sixth defendants I make orders in the terms of paragraphs 4A and 5 of the short minutes of orders initialled by me dated by me and placed with the papers."
13 Order 4A was in the terms set out in order 22 at paragraph [2] above, the reference therein to "the 8th defendant" being a reference to the Association. Order 5 was an order about service and is irrelevant for present purposes.
14 The "usual undertaking as to damages" given to the court on 31 October 2005 by Shaunjit Singh and the three other plaintiffs named at paragraph [11] of the principal judgment was, having regard to rule 25.8 of the Uniform Civil Procedure Rules 2005:
"an undertaking to the court to submit to such order (if any) as the court may consider to be just for the payment of compensation (to be assessed by the court or as it may direct) to any person (whether or not a party) affected by the operation of the interlocutory order or undertaking or of any interlocutory continuation (with or without variation) of the interlocutory order or undertaking."
15 The undertaking can thus bear fruit only in favour of a person "affected by the operation of the interlocutory order" - in this case, the order directed to the Commonwealth Bank and requiring it to recognise Shaunjit Singh and Pradeep Singh Gill, acting together, as the persons authorised to operate the Association's bank accounts.
16 The interlocutory order 4A operated directly upon the Commonwealth Bank, the seventh defendant. Its effect was to require the bank to honour and act upon cheques and other documents related to the Association's accounts that were signed by both of the named persons; and, by implication, to refrain from honouring and acting upon cheques and other documents related to those accounts that were signed otherwise than by both of the named persons.
17 It is relevant to consider how the Commonwealth Bank would have acted (or might reasonably be expected to have acted) in the absence of order 4A.
18 At paragraph [206] of the judgment, the question of the mandate held by the bank from its customer (the Association) was discussed:
"The evidence does not disclose the precise terms of the Commonwealth Bank's mandate as at April 2005 when the building contract was made. It may be inferred, however, that it was not such as to allow officers of the Association elected or appointed on or after 27 September 2005 to operate the account. The letter to the bank dated 9 June 2005 signed by Harmit Pal Singh and others is the basis for this inference. It may also be inferred that the mandate was not such as to allow persons from the plaintiffs' camp to operate the account. The basis for this inference is Shaunjit Singh's letter of 2 February 2005 to the bank. The likelihood is that the mandate existing at April 2005 authorised operation of the account by some combination of the members of the Board of Trustees elected in November 2001 all of whom, except Shaunjit Singh, had resigned by the end of August 2003. Alternatively, the mandate may have been in the terms indicated in the second paragraph of the extract from S S Rangi's letter of 1 September 2003 to Shaunjit Singh quoted at paragraph [80] above."
19 It is also relevant to quote paragraphs [207] and [208]:
"207 In those circumstances and being on notice of the competing claims of the two factions to be the legitimate representatives of the Association, the bank's duty to make inquiry became predominant. It was under no duty to recognise demands for payment ostensibly made by either faction which, it appears, were in any event not consistent with the customer's mandate. But even if the demands of one faction were consistent with the mandate, the duty to make inquiry and to refrain from paying in case of genuine uncertainty would have predominated.