Louthean Publishing Pty Ltd v Central West Media Ltd

[1996] FCA 339

CATCHWORDS

PROCEDURE - contempt attachment and sequestration - breach of undertakings - whether undertakings breached by dispatch of letters - whether conduct allegedly in breach reckless or inadvertent - whether conduct should sound in costs.

Rules of the Federal Court, O35 r11

LOUTHEAN PUBLISHING PTY LIMITED v CENTRAL WEST MEDIA LIMITED
NO WAG 22 OF 1996

R D NICHOLSON J
PERTH
15 APRIL 1996

IN THE FEDERAL COURT OF AUSTRALIA   )   LIMITED DISTRIBUTION

WESTERN AUSTRALIA DISTRICT REGISTRY )

GENERAL DIVISION                   )     NO WAG 22 OF 1996

B E T W E E N:              LOUTHEAN PUBLISHING PTY LIMITED

Applicant

and

CENTRAL WEST MEDIA LIMITED  

Respondent

MINUTE OF ORDER

JUDGE MAKING ORDER:     R D NICHOLSON J

DATE OF ORDER:         15 APRIL 1996

WHERE MADE:            PERTH

THE COURT ORDERS THAT:

1. The applicant's motion dated 15 April 1996 be dismissed.

1. The respondent pay the applicant's costs of the motion.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA   )   LIMITED DISTRIBUTION

WESTERN AUSTRALIA DISTRICT REGISTRY )

GENERAL DIVISION                   )     NO WAG 22 OF 1996

B E T W E E N:              LOUTHEAN PUBLISHING PTY LIMITED

Applicant

and

CENTRAL WEST MEDIA LIMITED  

Respondent

CORAM:R D NICHOLSON J

DATE:15 APRIL 1996

PLACE:PERTH

REASONS FOR JUDGMENT

The matter comes before me by way of a notice of motion for orders under the Rules of the Federal Court ("FCR") O35 r11. FCR O35 r11 sub‑rr1 and 2 provide, so far as is relevant:

"(1)Where -

(a)a person (whether a party or not) gives an undertaking to the Court to do or refrain from doing any act or to pay any sum of money; and

(b)the person fails to fulfil the undertaking,

any party may move on notice for a judgment or order requiring that person to do or refrain from doing the act in question, or to pay the sum of money in question.

1. The Court, on being satisfied that the undertaking was binding on the person, shall make the order referred to in sub-rule(1)."

The orders sought are that the substantial part of an undertaking given on 3 April 1996 on the part of the respondent be made an order of Court and, consequentially, the applicant be released from its undertaking. 

It is not in dispute on this application that events occurred which on their face constitute a breach of the undertakings in force at the time when those events occurred.  The relevant event was the dispatch on behalf of the respondent of a letter on 3 April 1996 to one mining company and to five other
unidentified potential advertisers.  The relevant undertakings were given to the Court firstly on 22 March 1996 and subsequently on 3 April 1996.

The Court accepts any breach of an undertaking is a serious matter.  The content of FCR O35 r11 reflects that.  In sub‑r4 it is stated the rule does not affect the powers of the Court to punish a person for contempt.  There is no motion for contempt in the instant matters but that sub‑rule shows the context in which the rule itself falls to be considered and applied.

For the applicant it is contended that properly read, FCR O35 r11(2) requires the Court to make an order when a breach is established, that is, that it is mandatory on the Court to make an order of the type sought where the breach is established as a question of fact.  Neither counsel have been able to find any authority on the question of construction of this sub-rule.  It is undesirable that the Court should embark upon a definitive construction of the sub-rule unless it is essential for it to do so.  In my opinion, this motion can be dealt with without that matter being decided.

For FCR O35 r11(2) to apply the conditions of sub‑r(1) must be satisfied.  Rule 1(b) requires there be a failure to fulfil the undertaking.  I am not satisfied, on the evidence before me, it is established as more probable than not that the correspondence which admittedly constituted a breach of the undertakings of 22 March 1996 were despatched at a time on 3 April 1996 which would result in them constituting a breach of the undertakings formulated and finalised on that day.  Consequently, I am not satisfied that there was a failure to fulfil the undertakings of 3 April 1996.  Therefore, I do not regard this as being a situation where I am, if that be the correct interpretation, under any mandatory obligation to make an order in accordance with sub‑r(2).

It is accepted for the applicant that the admitted breach of the undertakings of 22 March 1996 cannot mandate orders under FCR O35 r11 when those undertakings were substituted by new undertakings on 3 April 1996.  The status quo on 3 April 1996 became that of the undertakings given on that date.  Therefore, as a matter of law, I do not consider I am required to make any order under that Rule upon which the applicants rely.

So far as concerns the issues of discretion, I accept the submissions made for the respondent that it is appropriate to look to the utility and the balance of convenience of the making of any order on the facts as they now stand.  Those facts are that there has been an apology to the Court from the party concerned - the respondent and such of its servants and agents who have filed affidavits before the Court.  It appears to me, from the facts disclosed in the affidavits, the breach complained of is more appropriately characterised as unintentional and inadvertent rather than reckless.  Nevertheless, one must appreciate that, in a tight and sensitive commercial situation, the smallest contravention of an order can give rise to serious concerns.  Were it not for the fact that I am not satisfied the undertaking of 3 April has been breached, it may be that a different resolution of the balance of convenience would have resulted.

As the position is today, the respondent stands by the undertakings of 3 April and commits itself wholly to compliance with those undertakings.   It will be thoroughly aware from the nature of the application brought on behalf of the applicant that the slightest transgression of those undertakings will place it in the serious of jeopardy of FCR O35 r11(4) having application.  I am satisfied the requirement of the law that the undertakings be observed will be fully met by the position which now adheres before the Court and which, in my opinion, has not been demonstrated as not having been adhered to since it was entered into on 3 April 1996.
For those reasons I refuse the motion on the part of the applicant that an order be made or it be released from its undertaking.  I consider as no order is made, it is appropriate all undertakings including those that would not have been covered by the order, as it appears in the motion, remain on foot.

In relation to costs, I consider the matters which have been raised on behalf of the applicant were appropriately drawn to the attention of the Court.  It may be, and I form no opinion in relation to this, that they can be subsequently relied on by the applicant in relation to other matters as has been suggested in the submissions but that remains for another day. 
In my opinion, it is germane that the respondent issued the letter which, on its face, justified the applicant bringing the motion to the Court.  The respondent's conduct should sound in costs and I will order that the respondent pay the applicant's costs.

I certify that this and the preceding 3 pages are a true copy of the Reasons for Judgment of his Honour Justice R D Nicholson.

Associate:

Date:

APPEARANCES

Counsel for the Applicant:       Mr Van Zalm

Solicitors for the Applicant:      Edwards Robinson Lark

Counsel for the Respondent:      Mr B Dharmananda

Solicitors for the Respondent:    Malleson Stephen Jaques

Date of Hearing:                 15 April 1996

Date of Judgment:                15 April 1996