Globaltel Australia P/L v MCI Worldcom Australia P/L

[2001] NSWSC 545

CITATION:	Globaltel Australia P/L v MCI Worldcom Australia P/L [2001] NSWSC 545 revised - 3/07/2001
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	SC 1629/01
HEARING DATE(S):	19/06/01
JUDGMENT DATE:	19 June 2001
PARTIES :	Globaltel Australia Pty Limited (ACN 089 923 464) (Plaintiff) MCI Worldcom Australia Pty Limited (ACN 081 001 194) (Defendant)
JUDGMENT OF:	Santow J

COUNSEL :	M J Cohen (Plaintiff) C R C Newlinds (Defendant)
SOLICITORS:	Dilanchian (Plaintiff) Baker & McKenzie (Defendant)
CATCHWORDS:	PROCEDURE — Contempt — Court undertaking as price of ex parte injunction — no waiver — purging contempt.
CASES CITED:	Amalgamated Television Services Pty Limited v John Marsden [2001] NSWCA 32 Attorney-General for New South Wales v Mayas Pty Ltd (1988) 14 NSWLR 342 Hudson v Booth (1902) 28 VLR 130 Roberts v Albert Bridge Co (1873) LR 8 Ch App 753 Witham v Holloway (1995) 183 CLR 525
DECISION:	Contempt occurred.

REVISED — 3 July, 2001
IN THE SUPREME COURT
OF NEW SOUTH WALES
IN EQUITY

SANTOW J

No. 1629/01
Globaltel Australia Pty Limited (ACN 089 923 464)
Plaintiff
MCI Worldcom Australia Pty Limited (ACN 081 001 194)
Defendant
JUDGMENT — ex tempore

INTRODUCTION

1    This is an application brought by the Defendant/Applicant against the Plaintiff/Respondent, seeking to invoke the Court’s sanctions for an alleged contempt based on a claimed breach of a court undertaking. The essential complaint does not rely upon any contempt in the admittedly late (40 minutes) delivery of a Bank Guarantee undertaken to the Court as the price of the ex parte injunction granted to the Plaintiff. Rather it relies upon the fact that the guarantee provided failed to satisfy the requirements of the Court order made on 1 March 2001, in that the guarantee terminated on 10 April 2001.

2    The orders that were made were obtained upon the Plaintiff "undertaking to provide a banker’s guarantee in the amount of $150,000". There was no qualification such as would entitle the Plaintiff to have the guarantee terminate before ascertainment of the monies for which the guarantee was (along with a fixed charge) to be security. Those monies it was to secure comprised:

(a) "the amount determined to be owing by the Plaintiff to the Defendant"; and

(b) "its said undertaking as to damages";

See orders made in the statement preceding them as to the nature of the Plaintiff’s undertaking.

3    Indeed when consideration is given to the occasion for such undertakings being required, it must be obvious that the price of an ex parte application for reconnection to a telecommunications facility effectively rented to the Plaintiff gives rise to equivalent considerations to a tenant seeking relief on an ex parte basis against forfeiture. The tenant must tender the amount owing. Where there is a dispute as to that, generally speaking, it is the amount claimed by the Landlord, or at least a substantial proportion of that, making assumptions generally favouring the Landlord. By analogy here, the price of re-entry, obtained on an ex parte basis, from disconnection to a telecommunications facility must involve properly secured payment of what is claimed to be owing, at the very least. This is so, though there be a dispute as to what is in fact owing.

4    The Applicant by Amended Notice of Motion and accompanying Amended Statement of Charge particularised the contempt claimed against the Plaintiff. I have given leave to that amended process to be filed being satisfied that the original Notice of Motion of 24 April 2001 gave the Plaintiff sufficient notice in any event of the substance of the contempt. There is no suggestion that the Plaintiff has been unable to appreciate what the Applicant contends is the nature of the contempt.

The contentions

5    The Plaintiff correctly contends that contempt proceedings involve proof at the criminal standard, because the Court’s disciplinary jurisdiction is invoked. The Applicant, according to the Plaintiff, has failed at that standard to substantiate that a deliberate contempt occurred. Certainly it is correct that contempt must be knowing or wilful frustration of the purpose of the order, resulting from the conduct of the Plaintiff; see Attorney-General for New South Wales v Mayas Pty Ltd (1988) 14 NSWLR 342 at 356; Amalgamated Television Services Pty Limited v John Marsden [2001] NSWCA 32.

6    The Plaintiff could not and did not argue that the actual form of the order was ambiguous in permitting a guarantee limited so it was coterminous with the life of the injunction requiring, inter alia, re-connection. Resort to the transcript could only be necessary in the event of genuine ambiguity. Obviously the Court undertaking to give the guarantee was the price of the injunction. The fact that the injunction was subsequently discharged, as I find it was, by the 40 minute lateness of the guarantee, can afford no answer to the contempt. The Plaintiff had the benefit of the injunction and indeed was re-connected. This is so, though in the events that happened the Plaintiff was subsequently again disconnected, though after the injunction had been discharged. In those circumstances I do not need to consider whether that subsequent disconnection resulted from, in whole or part, any circumstances of the indebtedness that pre-dated the granting of the original orders.

7    Notwithstanding absence of any real ambiguity in the undertaking itself, the Plaintiff attempted to rely upon the transcript. This was at pages 3 and 4 of the transcript of 1 March 2001, to eke out some basis for a possible misunderstanding on the Plaintiff’s part whereby the Plaintiff might have thought that the Bank Guarantee was not required for more than a month. The short answer is that the transcript could not be relevant to orders unambiguous on their face. Moreover lest it be said that ambiguity can never be entirely avoided, the transcript does not establish innocent confusion on the Plaintiff’s part. Merely to assert this from the Bar table without evidence being adduced from a representative of the Plaintiff, is not sufficient.

8    Finally, the Plaintiff relies upon waiver by the Defendant’s conduct. Accepting for the purposes of this argument that civil contempt could be waived by an aggrieved party (see Witham v Holloway (1995) 183 CLR 525 at 540 per McHugh J and Roberts v Albert Bridge Co (1873) LR 8 Ch App 753), I am not satisfied that any waiver has been made out.

9    The correspondence attached to the affidavit of Ms Pavey dated 6 March 2001, 12 March 2001 (see especially last paragraph), and 3 April 2001 show how assiduous the Applicant has been to emphasise that it reserved its rights, which must mean all rights including invoking the Court’s jurisdiction in relation to contempt. That the Applicant subsequently suspended the provision of services on the second occasion on 29 March 2001, could not be said to be action in contradiction to maintenance of its rights through a bank guarantee. This is more especially when the bank guarantee was intended to secure past indebtedness in circumstances where the mere passage of time in seeking the Court’s enforcement could not of itself amount to a waiver; see, for example, Hudson v Booth (1902) 28 VLR 130 at 136.

CONCLUSION

10    It follows that the Plaintiff is in contempt in the failure to provide a bank guarantee conforming to the undertaking given to the Court by the Plaintiff as the price for the injunctive relief it obtained on 1 March 2001.

11    In all the circumstances I will give the Plaintiff a brief opportunity to purge its contempt. With the Applicant’s concurrence, if a bank guarantee for twelve months were proffered no later than 4 pm Friday 22 June 2001, I would consider that contempt purged. However, it should be absolutely clearly understood that if either the matter has not been resolved by Court proceedings as to any indebtedness owing between the parties, as is secured by that bank guarantee, within the twelve months or is not anticipated to be so resolved at the expiration of nine months, then I would give leave to either party to apply to the Court for an extended or fresh bank guarantee.

12    I will give liberty to apply to the Duty Judge on reasonable notice with similar notice being then given to the other party.

13    I note that the Applicant is seeking instructions, but without commitment, to voluntarily releasing its other security, being the deed of charge given on 1 March 2001. This is provided that the deed of charge is then used exclusively for the purpose of providing security to the bank for the bank guarantee, being as I note a guarantee currently from the Commonwealth Bank.

14    I note that the Applicant has agreed not to seek indemnity costs or any other cost penalty. In those circumstances I ORDER the Respondent to pay the Applicant’s costs, such to be assessed forthwith if not agreed.

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Last Modified: 07/04/2001