Pro-Duct Pty Ltd v CSR Ltd t/as Bradford Air

[1996] FCA 716

CATCHWORDS

CONTEMPT  - whether breach of consent order - whether breach "wilful" - whether order ambiguous. 

Trade Practices Act 1974 (Cth) s 52

Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483
Heatons Transport (St Helens) Ltd v. Transport and General Workers' Union [1973] AC 15
Iberian Trust, Ltd v Founders Trust & Investment Co, Ltd [1934] 2 KB 87

PRO-DUCT PTY LIMITED v C.S.R. LIMITED trading as BRADFORD AIR
NG 218 of 1996

Davies J
15 August 1996
Sydney

IN THE FEDERAL COURT OF AUSTRALIA           ) 
  )  
NEW SOUTH WALES DISTRICT REGISTRY          )  No NG 218 of 1996
  )  
GENERAL DIVISION  )     

BETWEEN:           PRO-DUCT PTY LIMITED  

Applicant

AND:  C.S.R. LIMITED trading as

BRADFORD AIR

Respondent

Coram:        Davies J.
Date:           15 August 1996
Place:          Sydney

MINUTES OF ORDER

THE COURT DECLARES THAT:

1.The respondent is guilty of contempt by reason of its breach of the order made by Davies J on 20 July 1993 in proceedings NG 204 of 1993. 

THE COURT ORDERS THAT:

2.The respondent pay the applicant's costs.

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

IN THE FEDERAL COURT OF AUSTRALIA           ) 
  )  
NEW SOUTH WALES DISTRICT REGISTRY          )  No NG 218 of 1996
  )  
GENERAL DIVISION  )     

BETWEEN:           PRO-DUCT PTY LIMITED  

Applicant

AND:  C.S.R. LIMITED trading as

BRADFORD AIR

Respondent

Coram:        Davies J.
Date:           15 August 1996
Place:          Sydney

REASONS FOR JUDGMENT

In these proceedings, the respondent, CSR Limited ("CSR"), is charged with contempt by reason of a breach of a consent order made by myself on 30 July 1993 in proceedings NG 204 of 1993 ("the first proceedings").

In 1992, both the applicant, Pro-Duct Pty Ltd ("Pro-Duct"), and CSR competed in the market for insulated ducting.  In 1992, CSIRO arranged for tests to be made at the CSIRO laboratories at Ryde of the inflammability of certain products.  A video which became Exhibit NAC-1 to the affidavit of Neil Albert Christie, sworn 6 April 1993 in the first proceedings, contained a segment which was described in the video as
being a test of a product of Pro-Duct.  In the video, Pro-Duct's product, of which the insulation was made of polyester, and products of other manufacturers which likewise contained polyester, performed poorly. 

That video was shown by CSR at an exhibition of refrigeration, airconditioning and heating products at the Darling Harbour Exhibition Centre in April 1993. Proceedings were commenced in this Court on 7 April 1993 in which Pro-Duct sought a declaration that CSR had thereby engaged in conduct which was misleading or deceptive or likely to mislead or deceive in breach of s.52 of the Trade Practices Act 1974 (Cth) and in which Pro-Duct sought, inter alia, an injunction restraining further display of the video tape.

Shortly after the commencement of the first proceedings, CSIRO wrote to CSR pointing out that a condition of the tests made in 1992 had been that publication of the video be approved by CSIRO in writing prior to publication and that no such permission had been requested or granted and that, in fact, officers of CSIRO had objected to certain matters shown in the video.  The letter from CSIRO said:-

"We insist that you withdraw the video from public exhibition until formal release has been obtained from CSIRO or any reference to CSIRO has been deleted from the video."

On 30 July 1993, the proceedings between Pro-Duct and CSR were settled on terms which included the following order:-

"1.  Order that the Respondent will not, by itself its servants or agents, in trade or commerce, display to the public or to the trade the videotape which is Exhibit NAC-1 to the affidavit of Neil Albert Christie sworn 6 April 1993."

That order was made by consent and without admission.  The order has not been formally taken out or served on CSR but no point is made of that.

On 3 August 1995, Mr P.C. Ruz, Business Manager of Bradford Polystyrene, a division of CSR, attended a meeting organised by the Aircraft Noise Insulation Project ("the ANIP"), which was concerned with insulating business premises and homes which were under the flight paths to and from Mascot airport.  The meeting was attended by Mr K. Butler, who was the project manager of the ANIP, and by Mr C. Pickett, the manager of home insulation for the ANIP.  Other attendees included representatives of firms concerned with insulation, Insulco, Tontine Industries and Acustica.  A focus of the meeting was the inflammability of polyester when used as insulation. 

The meeting lasted about two hours.  At its conclusion, Mr Ruz remained in the meeting room with Mr Butler and a Mr B. Burke from Insulco.  Knowing that the officers of the ANIP were interested in the inflammability of polyester, Mr Ruz had taken with him some tapes, including a tape which is now Exhibit PCR-C to the affidavit of Mr Ruz sworn 23 May 1996.  Apparently, this tape is not precisely the same as Exhibit NAC-1, which cannot now be located, but it is conceded by counsel for CSR that, for present purposes, there is no significant difference between the two tapes.

According to the evidence of Mr Ruz, which may be accepted on this point, the following conversation occurred:-

"Butler said to me in words to the following effect:

`Do you have any other evidence of the flammability of polyester products.'

I replied:

`I have two tapes.  One I can leave with you to watch, the other I can't.  It's subject to a court case.  Do you want to see it now?

He said:

`Yes, play it.'"

According to Mr Ruz's evidence, he had, at his office, run the tape past the point where the test of the Pro-Duct product was shown and where the name of Pro-Duct appeared.  That was at an early point in the tape.  Mr Ruz gave evidence that, in the meeting room, while Mr Butler and Mr Burke were present, he played through a subsequent part of the tape.

Mr G. Batty, NSW State Manager of Tontine Industries, gave evidence that the door to the meeting room was open, that he was standing outside and that he both heard and observed the tape.  Mr Batty deposed that the tape, which he recognised, was played.  Mr B. Shaw, a Sales Manager for the Insulco Polyester Division, gave evidence that, after leaving the meeting room, he had visited the toilet and, when he returned, he stood outside the meeting room with Mr Batty and a Mr G. Anderson also from Tontine Industries, and could see through the open door the last of the tests and the statements made by a number of persons at the end of the tape.

I am prepared to accept Mr Ruz's evidence that he did not show the part of the video containing the test of the Pro-Duct product or the name "Pro-Duct".  That is not inconsistent with the probabilities.  Mr Shaw deposed in an affidavit that he saw the part of the tape in which the test of the Pro-Duct product and the name of Pro-Duct were shown, but, in his oral evidence, he denied this. 

However, I am satisfied by the evidence of Mr Batty and of Mr Shaw that a substantial part of the tape was played.  This conclusion accords with the strong probabilities of the matter.  Mr Ruz would have wished Mr Butler to see the tests and to hear the observations made at the end of the tape.

I have set out the conversation in which Mr Ruz informed Mr Butler that the tape was "subject to a court case".  In his oral evidence, Mr Ruz said that he had taken the tape to the meeting with the intention of showing the video if the conditions were right.  He gave evidence that he was "rather nervous about showing the video" and would not have shown it in front of the whole meeting as he knew it would inflame the situation. 

Mr Ruz gave evidence that it was his understanding that the order of the Court made on 30 July 1993 prevented CSR from displaying the inflammability test on the Pro-Duct product only and that he did not believe that the effect of the order was to prevent CSR from displaying the tests involving products other than the Pro-Duct product.  Mr Ruz answered affirmatively to a leading question from senior counsel for CSR as to whether he had had regard to the application lodged with the Court on 7
April 1993 in forming his understanding that the order of 30 July 1993 only prevented CSR from displaying the inflammability test on the Pro-Duct product. 

I reject this evidence.  Mr Ruz was involved in the court proceedings in 1993 and discussed with CSR's counsel the settlement of the proceedings and the consent order.  Mr Ruz was therefore nervous about showing the tape and had very good reason for being so.  The order made on 30 July 1993 is perfectly clear and it has not been suggested that the tape was thereafter shown until Mr Ruz took it to the meeting of August 1995.  It is nonsense to suggest that, in July 1993, Mr Ruz understood the order to mean something other than what it actually said.  The settlement of July 1993 was a settlement arrived at not on the footing that the videotape would be amended to exclude any reference to Pro-Duct or its product but on the footing that the tape NAC-1 would not be displayed.  There was, for that matter, nothing in the application lodged in April 1993 which would have been likely to mislead. 

Whatever Mr Ruz might, in August 1995, have recalled of the terms of the order, he acted wilfully.  Not only did Mr Ruz act deliberately, he did so knowing of the Court's order and believing that, if knowledge of the showing got out, passions would be inflamed.  He knew, moreover, that CSIRO had written to say that the videotape should not be shown.  In Heatons Transport (St Helens) Ltd v Transport and General Workers' Union [1973] AC 15, Lord Wilberforce, delivering the opinion of the House, said of the term "wilfully", at 108-109:-

"In Stancomb v. Trowbridge Urban District Council [1910] 2 Ch. 190 Warrington J. explained the meaning of the word `wilfully.' In that case the defendants were restrained by injunction from sending sewage into a stream and they undertook to cleanse the stream. They committed breaches of the injunction and failed to cleanse the stream in accordance with the undertaking. Warrington J. held upon the evidence that breaches of the injunction had been proved and that these breaches were in some instances the result of structural causes which had since been remedied, but in others of the acts of one of the defendants' servants which were neither casual nor accidental and unintentional. Warrington J. said, at p.194:

`In my judgment, if a person or a corporation is restrained by injunction from doing a particular act, that person or corporation commits a breach of the injunction, and is liable for process for contempt, if he or it in fact does the act, and it is no answer to say that the act was not contumacious in the sense that, in doing it, there was no direct intention to disobey the order.  I think the expression `wilfully' in Order 42, r. 31 is intended to exclude only such casual or accidental and unintentional acts as are referred to in Fairclough v. Manchester Ship Canal Co. [1897] W.N. 7.'" (emphasis added)

On the whole of the evidence, I am satisfied beyond reasonable doubt that Mr Ruz, and therefore his employer, CSR, wilfully breached the terms of the order made on 30 July 1993.  It is not in dispute that the conduct complained of was conduct in trade or commerce and that the tape was shown "to the public or to the trade".

Counsel for CSR has submitted that the order of 30 July 1993 was ambiguous and that there could be no breach as Mr Ruz or CSR could not have determined what action or course of action was enjoined.  Counsel referred to the words of Luxmoore J in Iberian Trust, Ltd v Founders Trust & Investment Co, Ltd [1932] 2 KB 87 where his Lordship said at 95:-

"If the Court is to punish any one for not carrying out its order the order must in unambiguous terms direct what is to be done". 

This passage was approved by Owen J in Australian Consolidated Press Ltd v Morgan (1965) 112 CLR 483 at 515. The principle enunciated is well established.

Counsel for CSR did not submit that the order referred to the video cartridge itself rather than its contents.  Counsel accepted that the words "display ... the videotape" in the order of 30 July 1993 referred to the contents of the video and not to its package.  This plainly is so, especially as the order was a consent order made in proceedings which concerned the contents of the videotape.  Counsel submitted, however, that the order did not make it clear whether the display of a video which was not identical to exhibit NAC-1 in all respects would be a breach of the order.  Counsel further submitted that the order did not make it clear whether the display of a part of the video was enjoined as distinct from the display of the whole. 

In my opinion, these submissions confuse two questions.  One is whether the order was unambiguous and another is what acts taken may breach it.  On the former question, that is to whether the order was ambiguous, it appears to me that the order was entirely unambiguous.  The order prohibited the displaying of the contents of the tape.  Therefore, it prohibited the playing of any part of the contents of the tape, for the whole encompassed the parts.  The order conferred no authority upon CSR and its employees to pick and choose which parts they may wish to show.  It prohibited the playing of the video in trade or commerce to the public or to the trade.

In Lieber's work on Legal and Political Hermeneutics, 1839 ed., reprinted for The Legal Classics Library, there are several useful guides as to this.  At 32, the author explained that:-

"The more we strive in a document to go beyond plain clearness and perspicuity, the more we do increase, in fact, the chances of sinister interpretation."

At 89, the author said:-

"Common sense and good faith are the leading stars of all genuine interpretation."

And at 93:-

"Good faith in interpretation means that we conscientiously desire to arrive at truth, that we honestly use all means to do so, and that we strictly adhere to it, when known to us - it means the shunning of subterfuges, quibbles and political shuffling - it means that we take the words fairly as they were meant."

Vattel's Law of Nations, Bk 11 Chap XVII para 273 expresses the same view:-

"273.  Words are only designed to express the thoughts: thus, the true signification of an expression in common use is the idea which custom has affixed to that expression.  It is then a gross quibble to affix a particular sense to a word, in order to elude the true sense of the entire expression."

The order of 30 July 1995 was clearly expressed, it used simple, well-understood words and it meant precisely what it said.  The ambiguities which counsel seeks to raise are mere "quibbles", in the sense expressed by Lieber and Vattel.

As I have said, Mr Ruz's conduct in displaying the videotape, indeed a substantial part thereof, was a breach of the order.  Notwithstanding the fact that the videos, NAC-1 and PCR-C, were not identical, I am satisfied that, as the injunction was concerned with the contents of the tape, it was a breach to display contents substantially identical to those of NAC-1 by playing another videotape.  This is not a case where the contents came from an entirely different source in a different form.  In this case, most of the material was the same, for the videos had been developed from
the same source.  By displaying the same contents, though from a slightly different video, CSR breached the order.

For these reasons, I am satisfied that there should be a finding that CSR was guilty of contempt by virtue of its breach of the order.  I shall so declare and shall order that CSR pay the applicant's costs.

I certify that this and the 9 preceding pages
are a true copy of the reasons for judgment herein of
the Honourable Justice Davies.

Associate:

Date:  15 August 1996

Counsel for the applicant:  G.D. Woods QC
  A.J. Clout

Solicitors for the applicant:                   Johnston Vaughan

Counsel for the respondent:                  T.F. Bathurst QC
  B.R. McClintock

Solicitors for the respondent:                Gilbert & Tobin      

Date of hearing:  1 August 1996

Date of judgment:  15 August 1996