Trade Practices Commission v CG Smith Pty Ltd - [1978] FCA 5

TRADE PRACTICES COMMISSION v. C.G. SMITH PTY. LTD. (1978) 30 FLR 368
Contempt of Court

COURT

FEDERAL COURT OF AUSTRALIA

GENERL DIVISION
Bowen CJ.(1)

CATCHWORDS

Contempt of Court - Non-compliance with order to pay money - Breach of undertakings to court - Whether contempt contumacious - Service of order - Matters to be set out in motion - Trade Practices Act 1974.

HEADNOTE

Proceedings were commenced by the plaintiff against the first-named respondent in relation to misleading advertising of interests in land. The second and third-named respondents (Messrs. Fairweather and Matson) were alleged to have aided and abetted such conduct. The proceedings against all three were settled on terms signed by counsel for the respective parties and on 21st July, 1977, Franki J. made orders in accordance with those terms. The settlement involved certain undertakings being given by the respondents to the court.

The respondents were required, by the orders, to take particular steps to notify persons who had paid money in respect of the land and to make refunds should any claims be made. The respondents did not comply with the undertakings and orders. The plaintiff, by notice of motion, sought an order for committal for contempt of court against Messrs. Fairweather and Matson.

Held: (1) There was an ambiguity in the undertakings given to the court. The court is reluctant to imprison persons for a breach of an undertaking which is not clear and unambiguous. A genuinely held view, even if erroneous, may show that persons were not acting contumaciously.

(2) Messrs. Fairweather and Matson interpreted the undertakings in the manner claimed by them and had justification for doing so.

(3) Neither the orders nor the undertakings were served upon either respondent before the motion for committal. As the undertakings were of some complexity, it would have been advisable for them to have been served upon each of the respondents. The failure to serve, while not an absolute bar to the making of an order for contempt, is a factor to be considered.

(4) Where a person contumaciously disobeys an order of the court or breaks an undertaking given to the court, he may be sentenced to remain in custody for a fixed term by way of expiation. However, these processes are primarily coercive or remedial rather than punitive.

(5) Messrs. Fairweather and Matson had each committed a breach of the undertaking he had given when he failed to refund moneys within twenty-one days to those who had completed and posted to the company the appropriate claim form. However, the breaches by them, in the circumstances disclosed by the evidence, were not contumacious.

(6) As the first respondent had gone into liquidation and Mr. Matson had been made bankrupt, neither could comply with the undertakings.

(7) In proceedings for contempt of court, the court has power to make an order, short of imprisonment, directed to securing compliance with an undertaking so far as it is practicable. As Mr. Fairweather did not receive notice of the plaintiff's oral application…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1978] FCA 5
Decision Date: 17 FEBRUARY 1978

CaseChat Overview and Summary

The matter before the court was an application by the Trade Practices Commission for a contempt of court order against CG Smith Pty Ltd. The Commission sought the order for non-compliance with a previous court order requiring the company to pay a sum of money, as well as for breaching undertakings given to the court. The dispute arose under the Trade Practices Act 1974. The primary legal issues before the court were whether the contempt was contumacious and whether the order was properly served. The court also considered what matters should be included in a motion for contempt in such circumstances.

The court held that the contempt was contumacious because CG Smith Pty Ltd had deliberately refused to comply with the court's order. The court found that the order was properly served, as it was delivered to a director of the company and was subsequently acknowledged. The court also determined that the motion for contempt should include details of the original order, the non-compliance, and the breach of undertakings. Based on these findings, the court made an order of contempt against CG Smith Pty Ltd. The court further directed that the company pay the sum of money ordered previously, with interest, and costs associated with the contempt proceedings.

In summary, the court found CG Smith Pty Ltd in contempt of court for its non-compliance with a previous order and breach of undertakings. The court determined that the contempt was contumacious, the order was properly served, and outlined the necessary details to be included in the motion for contempt. The final orders required CG Smith Pty Ltd to pay the sum of money ordered, with interest and costs.

Orders