Reches Pty Limited v Tadiran Limited

The case of Reches Pty Limited v Tadiran Limited involved the Reches, Mr Isaac and Mrs Yael, who were found to have committed a contempt of court by breaching an undertaking they had given to the Court. The matter was initially brought before the court on 11 April 2001, where it was declared that the Reches had committed contempt without any penalty being imposed. The court stood over the matter to allow for submissions on penalty, which occurred on 27 April and 19 July 2001. The Reches breached their undertaking by removing property listed in the schedule to the bill of sale attached to the undertaking. The undertaking was intended to establish a mechanism for the Reches to provide $120,000 as security for costs in the action of Reches Pty Ltd against Tadiran Ltd.

The legal issues before the court were whether the Reches had indeed breached the undertaking and, if so, what the appropriate penalty should be. The court had to consider the evidence led by both parties, as well as the affidavits and cross-examinations of Mr and Mrs Reches. The primary evidence showed that the Reches had disposed of property inconsistent with the undertaking, but they claimed they believed they had been effectively released from the undertaking by Tadiran. The court had to weigh the Reches' account of their conversations with Tadiran’s general counsel against the correspondence between Tadiran and the Reches.

In its reasoning, the court found that the contempt committed by the Reches was serious, and their actions had rendered the benefit of the costs order made in Tadiran’s favour substantially illusory. The court acknowledged that there were mitigating factors, such as the Reches' belief that they had been released from the undertaking by Tadiran, but ultimately held that the Reches had acted with a cavalier approach to the court's undertaking. The court decided on a penalty that included the Reches being jointly and severally liable to pay the costs of the Registrar for prosecuting the contempt proceedings. The application was otherwise dismissed.