Tovehead Pty Ltd & Anor v Owston Nominees No 2 Pty Ltd & Anor [2002] NTSC 64

[1] This is a summons pursuant to r 75.06 Supreme Court Rules for an order that the second defendant be punished for contempt of court, such contempt being alleged to be that on or about 5 August 2002 and on or about 12 August 2002 the second defendant breached a consent order by way of interlocutory injunction of Riley J dated 1 August 2002. The relevant terms of the order are as follows:

"1. Subject to order 2, until further order the first and second defendants be restrained from:

(a) entering or using House 6 Mango Drive, or any of the houses located in the Tipperary homestead complex except House 10 Boulevard;

(b) entering or using any other part of Tipperary Station, other than House 10 Boulevard and those parts of Tipperary Station known as `the Sanctuary' and `the Sanctuary Area' (being those areas marked on Stages I-IV and `Rhino/Hippo' and `Pygmy Hippo/Tapir' on the plan attached to Summons dated 23 July 2002) or the roads necessary to be used for reasonable access thereto.

2. The defendants have until 5:00pm on Friday 2 August 2002 to vacate House 6 Mango Drive."

[2] The alleged breach on or about 5 August 2002 occurred when the second defendant entered an air strip and hangar situated in an area of Tipperary Station other than the areas referred to in the words in brackets in paragraph 1(b) of the order. The alleged breach of 12 August 2002 was constituted by the second defendant entering an area near a workshop situated on a part of Tipperary Station other than the area of land described in the words in brackets in the same paragraph of the order.

[3] Counsel for the plaintiffs indicated material upon which he relied in support of the summons including certain affidavit material, portions of which were referred to by counsel for the second defendant. Counsel for the second defendant submitted that on the material relied upon by the plaintiffs there was no case to answer for contempt for breach of Riley J's order. Counsel for the second defendant submitted that in paragraph 1(b) of Riley J's order the words in brackets, whilst unambiguously describing an area of land by reference to a plan, as a matter of construction of the order, might be seen to qualify the words "the Sanctuary Area" only, or alternatively both " `the Sanctuary' and `the Sanctuary Area' ". This being the case, it was submitted "those parts of Tipperary Station" referred to in the order accessible by the roads referred to were inadequately defined - they may or may not be confined by the words covered in brackets. It follows from this, it was submitted, that proof beyond reasonable doubt of a breach of the order as required by Witham v Holloway (1995) 183 CLR 525 fails by reason of uncertainty inherent in the terms of the order. I agree with the submission that paragraph 1(b) of the order is ambiguous.

[4] Counsel for the plaintiffs submitted, in conformity with Evenco Pty Ltd v Australian Building Construction Employees and Builders Labourers Federation (Qld Branch) [2001] 2 Qd R 118 and S & M Motor Repairs Pty Ltd v Caltex Oil (Australia) Pty Ltd (1988) 12 NSWLR 358 at 387, that the order was to be construed "in the factual matrix which was known to both parties". Counsel for the plaintiffs particularly relied on the following passage from Williams J's judgment, with whom McMurdoch P and Pincus J agreed, in Evenco (supra) at 136:

"An undertaking does not fall foul of the principle that its terms must be clear and ascertainable on its face simply because someone can contend for an unlikely construction thereof. In that context the learned trial judge referred to and relied on a passage from a judgment of Barwick CJ in Australian Consolidated Press Ltd v Morgan [1965] HCA 21; (1965) 112 CLR 483 at 492:

`But, if it bears a meaning which the Court is satisfied is one which ought fairly to have been in the contemplation of the person to whom the order was directed or who gave the undertaking as a possible meaning, the fact that that meaning results from a process of construction and involves a choice of possible meanings does not, in my opinion, preclude the Court from enforcing the order or undertaking in the sense which the Court assigns to it.'

Counsel for the BLF submitted that the learned trial judge erred in relying on that passage because Barwick CJ dissented in the result in that case. Though he agreed with Owen J to constitute a majority with respect to the end result of the case, Windeyer J appears to have agreed with Barwick CJ on the specific point in issue; at 503 he said:

`This is not a case in which the extent of obligations undertaken is ascertainable simply by construing the undertaking according to ordinary grammatical rules. If that were so, I would agree that a mistake in construction could not excuse disobedience, although it might perhaps mitigate its consequences. Those who give undertakings to a court are bound by the language they use. If its true meaning, although not immediately plain, can be ascertained according to ordinary rules of construction, then the person giving the undertaking is bound by it in that sense.'

Here, the true meaning is readily ascertainable by applying ordinary principles of construction, and that meaning is confirmed by a consideration of the matrix of acts in which it was given."

[5] I have found the judgment of Windeyer J in _Morga_n somewhat puzzling. Preceding the passage cited above, he says (at 503):

"His Honour said that the appellant's having acted on a mistaken construction of the undertaking did not mitigate the breach of it, construed as his Honour held it should be construed. But, with respect I cannot agree."

[6] Following the passage cited above Windeyer J completes the paragraph (not reproduced in Evenco) by saying:

"But the uncertainties that lurk in the word of this undertaking, and which were exposed during the argument cannot be resolved in that way, for they do not arise from debatable construction but from uncertain denotation."

"I express no opinion as to the correctness of the construction of the appellant's undertaking that Else-Mitchell J adopted. I do not mean to say that it was erroneous. But it seems to me impossible to say that the undertaking was clear or the breach of it was certainly established. I agree in the view that my brother Owen expresses in the judgment that he is about to deliver then on this ground, if on no other, the appeal should be allowed."

[8] There was some argument before me, and in the authorities, whether Windeyer J agreed with Barwick CJ or Owen J in Morgan. In my opinion Windeyer J did not go as far as Barwick CJ in Morgan. Windeyer J did not say that if there are multiple possible meanings resulting from a process of construction then a Court can enforce one of those meanings after resort to extrinsic materials.

[9] Counsel for the second defendant relied on the following passage from the judgment of Beaumont J, with whom Lindgren and Lehane JJ agreed in Microsoft Corporation v Marks (1996) 139 ALR 99 at 118-119:

" ... order 1(a) should be treated as equivocal and its meaning as ambiguous. That being so, and since the question whether Microsoft had, in fact, consented was put in issue in the contempt proceedings, it must further follow that any attempt by Microsoft to move for contempt for alleged breach of such an order must have failed.

In any event, this outcome probably follows from an application of the general observations made in Witham on the relevance of the criminal standard of proof; there is a doubt as to the meaning of order 1(a) in an important respect, and, as I have said, that doubt is a reasonable one. In any event, the approach suggested is supported by authority which appears to be squarely in point. In Redwing Ltd v Redwing Forest Products Ltd (1947) 177 LT 387 (Redwing), Jenkins J said (at 390):

`I cannot say I think that the undertakings contained in the order were clearly drawn and I cannot say I regard the questions of construction involved in them as entirely easy questions, but in my judgment, a defendant cannot be committed for contempt on the ground that upon one of two possible constructions of an undertaking being given he has broken his undertaking. For the purpose of relief of this character I think the undertaking must be clear and the breach must be clear beyond all question [emphasis added].

In PA Thomas & Co v Mould [1968] 2 QB 913, O'Connor J said (at 923):

`In the present case the court has granted the injunction in the terms prayed by the plaintiffs. That is the plaintiffs' own doing. If they wish not to trust the court and its procedure for protecting their legitimate interests by disguising the true nature of their `know-how' in the form which has been done in the present case, they cannot complain if at a later stage they are met with the answer with which they have been met here, of saying, `You are alleging a breach of the injunction: you have done thus and so, thus and so, and thus and so', and then invite the court to draw the inference that because it is different from that which was set out in statements sworn to by the plaintiffs it must be confidential material - part of the `know-how', part of the material, upon which the injunction bites.

I am not prepared to say that that has been established here. It may well be so. It may be that these inferences can be drawn on all kinds of balances of probabilities at the end of the day when this case is tried. But where parties seek to invoke the power of the court to commit people to prison and deprive them of their liberty, there has got to be quite clear certainty about it. I see no such certainty in the present case and I am not prepared to give any relief to the plaintiffs on this motion: it must be dismissed [emphasis added].

The observations of Jenkins J in Redwing were cited by Owen J in Morgan (at 515-16). His Honour said (at 516):

With these statements of general principle I agree. In my opinion the ambiguity of and lack of precision in the appellant's undertaking which, it should be remembered, was originally drawn by the respondents' solicitors in the District Court proceedings are such that a finding of contempt should not be made.

On the other hand, it should be noted that Barwick CJ said in Morgan (at 492):

The appellant submitted that unless the language of the undertaking was unambiguous and certain, it should not be enforced by contempt proceedings: and sought support for the submission in Redwing ... and Iberian Trust Ltd v Founders Trust and Investment Co ... In my opinion, these authorities do not support this conclusion. If the order or undertaking is so expressed as to be meaningless, there is of course nothing which can be enforced. But, if it bears a meaning which the court is satisfied is one which ought fairly to have been in the contemplation of the person to whom the order was directed or who gave the undertaking as a possible meaning, the fact that that meaning results from a process of construction and involves a choice of possible meanings does not, in my opinion, preclude the court from enforcing the order or undertaking in the sense which the court assigns to it.

(cf Watkins v Wright [1996] 3 All ER 31 at 42)

However, in expressing the majority view of that aspect, and agreeing with Owen J, the other member of the court, Windeyer J, said (at 506):

I express no opinion as to the correctness of the construction of the appellant's undertaking that Else-Mitchell J adopted. I do not mean to say that it was erroneous. But it seems to me impossible to say that the undertaking was clear or that a breach of it was certainly established. I agree in the view that my brother Owen expresses in the judgment that he is about to deliver that on this ground, if on no other, the appeal should be allowed.

The present case is similar to Morgan and should, I think, be contrasted with, for example, the `clear and unambiguous' injunction enforced by Southwell J in McNair Anderson Associates Pty Ltd v Hinch [1985] VicRp 30; [1985] VR 309 at 315.

In my opinion, the appeal from this part of the judgment fails by reason of the uncertainty inherent to order 1(a)."

[10] Microsoft is supported by a number of authorities including ACCC v Collings Construction Co Pty Ltd (unreported NSW SC, 2/7/1997, BC9702850) where Bainton J said (at paragraph 15):

"In my judgment if there be any ambiguity, uncertainty or want of clarity in an order whether it be mandatory or prohibitive it should be construed contra proferendum, the proferens being not the judge pronouncing the order, but the party seeking it... The expression is capable of either of these constructions. The view which I hold that an ambiguity should be construed contra proferendum mandates acceptance of the first of those two possibilities and hence the dismissal, with costs, of this application.

The decision of the High Court in Witham v Holloway (1995) 183 CLR 525 in my judgment indirectly supports the view which I have espoused. That decision determined for Australia that a charge of contempt of Court, whether it be a charge of civil contempt or of criminal contempt must be proved beyond reasonable doubt, ie on the criminal standard. That of course is not a decision on what is the proper construction of the injunction: that is for the Court to determine. But it would be anomalous if the proper construction of the injunction where there is doubt about it, should not be construed in favour of the person charged."

[11] Evenco [2001] 2 Qd R 118, per Williams J at 134-136 and Microsoft Corporation & Anor v Marks (1996) 139 ALR 99, per Beaumont J at 118-119, are two cases amongst many in which there appears to be some conflict of opinion.

[12] In Evenco the Queensland Court of Appeal examined a number of alleged ambiguities in an undertaking given to the Court. The Court drew a distinction between an ambiguity in an injunction restraining a breach of contract (as in The Commissioner of Water Resources v Federated Engine Drivers' and Firemen's Association of Australasia Queensland Branch [1988] 2 Qd R 386) and those proscribing "conduct of a defined sort". Williams J said (at 134):

"The undertaking given by the BLF required it to refrain from doing acts having a defined object. There was, prima facie, no difficulty in identifying what was proscribed from a reading of the undertaking itself."

[13] The Court of Appeal approved McPherson J's statement in Commissioner of Water Resources (at 390):

"That is quite contrary to another well settled rule governing injunctions, which is that the order should be so expressed that the person to whom it is directed should be able, by reading it and without more, at once to know what it is that he must do, or refrain from doing, in order to comply with its terms."

but distinguished McPherson J's decision on the basis that the undertaking in that case required recourse to terms in a contract.

[14] The Court of Appeal in Evenco examined the operation of another part of the undertaking, namely the phrase "provided that the principal contractor on such site has been notified thereof and has made no objection thereto." It was to this phrase that the court approved the "proper, obvious true meaning" approach, the meaning of which could be confirmed by a consideration of the factual matrix (citing S & M Motor Repairs Pty Ltd v Caltex Oil (Australia) Pty Ltd (1988) 12 NSWLR 358). In S & M Motor Repairs, Priestley and Clarke JJA approved the factual matrix approach (at 387):

"The sole question is: `Has the first appellant broken its promise not to sell as Caltex petrol that of others ?' This particular point emphasises the importance of construing the undertaking in the factual matrix which was known to both parties. That matrix includes, but is not limited to, the circumstances already set out."

[15] The undertaking in S & M Motor Repairs was "The undertaking of the defendant to the Court not to pass off as `Caltex' petrol any petrol not supplied to the defendant by either of the plaintiffs.". In the circumstances of that case, against a background of a complex franchise agreement and other contractual promises which regulated the rights of parties, it was necessary to look at the matrix of facts and to examine contractual obligations of the parties to ascertain whether a breach had occurred. The judgment does not mention expressly whether the order was ambiguous on its face.

[16] The present case can be distinguished from S & M Motor Repairs and Evenco. The second defendant is not claiming an ambiguity in the practical operation and implementation of the court order. Nor is there a set of complicated contractual provisions which need to be examined in order to give the order meaning. The second defendant says that by reading the order without more there is difficulty in determining what is proscribed. The second defendant says that the phrase "Sanctuary and Sanctuary Area" followed by the areas defined by the words in brackets, is unclear: the Sanctuary may or may not be an area of land other than that described by the words in brackets, and without more, it is unclear what should not be done.

[17] In my opinion the general principles of clarity of orders in the context of contempt, as expressed by Owen J and supported by Windeyer J in Morgan, apply to this case. I agree, with respect, with the law as stated by Beaumont J in Microsoft. I agree with Lindgren J's statement in Microsoft (at 121) that a finding of contempt will not be made where the terms of the relevant order or undertaking are misleading, unclear or ambiguous. These principles are discussed by Miller Contempt of Court 3rd Ed. (2000) at 650 as follows:

"The necessity of determining whether there has been a factual breach of an order or undertaking on the part of the body or person brought before the court demands that the terms of the order itself be expressed in clear and unambiguous language. In so far as possible that person should know with complete precision what it is they are required to do or abstain from doing. The requirement of clarity has been admirably stated in a leading American case, where it was said of an injunction that:

It should be as definite, clear and precise in its terms as possible, so that there may be no reason or excuse for misunderstanding or disobeying it; and, when practicable, it should plainly indicate to the defendant all of the acts which he is restrained from doing, without calling on him for inferences or conclusions about which persons may well differ. (Collins v Wayne Iron Works, 227 Pa. 326, 76A. 24,25 (1910) )

[18] The degree of clarity required depends on the individual circumstances. As Miller says at 651:

"In the nature of things the degree of clarity and specificity which is capable of being achieved will vary according to the subject matter of the proceedings. An injunction enjoining entry on a particular piece of land lends itself to clarity and precision more readily than does an injunction restraining the commission of a nuisance by noise, or the molestation of a person, where questions of degree are necessarily involved."

[19] On the need for clarity I respectfully adopt the statement of Tadgell JA in Nexus Mortgage Securities Pty Ltd v ECTO Pty Ltd [1998] 4 VLR 220 at 221-222 who said:

"It is of the greatest importance that courts exercising a discretionary equitable jurisdiction to grant an injunction - whether the injunction be mandatory or prohibitory, interim, interlocutory or permanent - should take consummate care to make clear what the order requires for compliance. The order should be drawn up following established practice and not thrown together in any slipshod manner. I may say that this precept should be heeded as much by counsel for all parties as well as by the judge pronouncing the order.

It is notorious that the courts traditionally regard the liberty of the subject with tenderness in the sphere of the criminal law. So too, in equity, there is especial concern that a coercive power to require or prohibit a person's conduct will be exercised with such precision as the circumstances require and allow. It stands to reason that, if a court is to imprison anyone for not carrying out its order, the order must be couched in unambiguous terms directing what is to be done or what is not to be done. I refer, for example, to Iberian Trust Ltd v Founders Trust and Investment Co Ltd [1932] 2 KB 87 at 95 per Luxmoore J in a passage quoted with approval by Owen J in Australian Consolidated Press Ltd v Morgan [1965] HCA 21; (1965) 112 CLR 483 at 515. See also Animal Liberation (Vic) Inc v Gasser [1991] VicRp 5; [1991] VR 51 at 56, a decision of the Appeal Division of this court, and Spry, Principles of Equitable Remedies, 5th ed. (1990) at pp. 374-5."

[20] (See also Borrie & Lowe The Law of Contempt 3rd Ed. (1996) at 560-561, Spry Equitable Remedies 6th Ed. (2001) at 374-375 and Northwest Territories Public Service Association v Commissioner of the Northwest Territories (1980) 107 DLR (3d) 458, where the Canadian Northwest Territories Court of Appeal refused to allow the use of a Court transcript to determine the scope of the order in a contempt proceeding).

[21] In the present case, the nature of the ambiguity in the order, the circumstance that there is current litigation before this Court seeking recovery of land within the area in dispute (and an application pending before the Federal Court requesting clarification of its original orders which sought to clarify the relationships between the parties viz-a-viz the Sanctuary and Tipperary Station), the standard of proof required and the potential serious consequences that follow from contempt proceedings, the uncertainty on the face of the order is such that a finding of contempt will not be made.