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Federal Court of Australia |
COURT
IN THE FEDERAL COURT OF AUSTRALIACATCHWORDS
Contempt of Court - undertaking - Breach of undertakings given to Federal Court - Assessment of fine - Whether officer of company procured breaches by the company.HEARING
CANBERRACounsel for the applicants: Mr D.K. Catterns
Solicitors for the applicants: Abbott Tout Creer & Wilkinson
Counsel for the respondents: Mr J.M. Ireland and Mr R. Webb
Solicitors for the respondents: Leon M. Ratner & Co.
ORDER
The first respondent be adjudged to be guilty of contempt of court in that its conduct in relation to the supply on 3 and 4 February 1988 pursuant to an order placed on 2 February 1988 of car alarms to Budget Lease Management involved a breach of pars 1 b, c and d of the undertakings given to the Court by the first respondent on 2 November 1987.In respect of the said contempt, the first respondent pay a fine of $1,500.
The first respondent be further adjudged to be guilty of contempt of court in that its conduct in relation to the supply on 5 and 8 February 1988 pursuant to an order placed on 2 February 1988 of car alarms to Rider Hunt Sydney Pty Limited involved a breach of pars 1 b, c and d of the said undertakings.
In respect of the said contempt, the first respondent pay a fine of $1,500.
The first respondent be further adjudged to be guilty of contempt of court in that its conduct in relation to the supply on 9 February 1988 of a car alarm pursuant to an order placed on 4 February 1988 by one Stephen Gary Meltz involved a breach of pars 1 b, c and d of the said undertakings.
In respect of the said contempt, the first respondent pay a fine of $1,500.
The fines, totalling $4,500, be paid to the Registrar of the Court within 21 days from the date of these orders.
The application be otherwise dismissed.
The first respondent pay two-thirds of the applicants' costs of the application.
There be no order as to the costs of the second respondent.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
DECISION
This is an application seeking the punishment of the respondents for contempt of court. The applicants are Orvel S.R.L. and Superalarm Pty Limited. At the material times, the first applicant, a company incorporated under the laws of Italy, manufactured and sold inter alia, burglar alarm systems for installation in motor vehicles and accessories for such systems. The second applicant, a company incorporated under the laws of the State of New South Wales, distributed such car alarm systems in Australia. The respondents are Piranha Security Systems Pty Limited and Chaim Carol Adalbert Kimel. The first respondent is a company incorporated under the laws of the State of New South Wales. Its business activities, which were carried on under the registered business name "Piranha Car Alarms", included the sale and installation of car alarm systems. The second respondent is a director of the first respondent. He has, at all material times, controlled its business operations.2. In the course of its business activities, the first respondent from time to time received orders at its premises situated at 218-220 New South Head Road, Edgecliff, a suburb of Sydney, for the supply and installation of car alarms. It also maintained a warehouse and service centre at Camperdown, another suburb. When an order was received at the Edgecliff premises, a document headed "Installation Job Card" was filled out giving relevant particulars. That document was transmitted to the service centre. There the job was allocated to one of a number of service technicians who were engaged by the first respondent and who travelled to various parts of Sydney for the purpose of installing car alarm systems. The service technicians were sub-contracted to the first respondent and were supplied with stocks of equipment from which they fulfilled orders allocated to them.
3. The contempt charged against the first respondent is that it breached certain undertakings given to the Court on 2 November 1987. The contempt charged against the second respondent is that he procured the first respondent to commit those breaches. The undertakings referred to were given in a proceeding instituted by the first and second applicants against the first and second respondents and numbered G 394 of 1987. The substantial issue in that proceeding was whether the first applicant or the first respondent was entitled to the exclusive use in Australia, in connection with the advertisement, supply, sale, installation and repair of car alarm systems and accessories for such systems, the name "Piranha" and two trade marks, one consisting of a representation of a fish and the word "Piranha" and the other consisting of the word "Piranha" alone. It was alleged that any use by the first respondent of the name and the trade marks had been by virtue of a licence granted to it by the first applicant. It was further alleged that on 20 June 1987 the second applicant had become the exclusive Australian distributor of car alarm systems manufactured by the first applicant.
4. The respondents denied these allegations and pleaded a cross-claim against the second applicant alleging that the use of the name "Piranha" in relation to car alarms had come to signify, exclusively, to the public in Australia the business which, from about August 1984 until about September 1986, was carried on by a company known as Kimel Distributors Pty Limited and which, since that time, had been carried on by the first respondent. It was further alleged that prior to June 1987 the second applicant had sold and offered for sale in New South Wales car alarm systems supplied by the first respondent under the name "Piranha" and that, since that date, the second applicant had advertised , offered for sale and sold in New South Wales under the name "Piranha" car alarm systems which were not car alarm systems sold or supplied by the first respondent.
5. The proceeding came before a judge of the Court on 2 November 1987. His
Honour was informed that the proceeding had been settled
on terms which
included the giving to the Court of undertakings by each of the parties. A
document described as "Short Minutes of
Order" was handed to the Court. It
read as follows:
"BY CONSENT:Set out hereunder is a representation of the "fish" logo referred to in par.1(d) of the short minutes of order:
1. NOTE that the first and second respondents
each undertake to the Court that as from 1
February 1988 each of them will permanently
refrain from:
a. carrying on business in Australia under
the name 'PIRANHA CAR ALARMS';
b. selling, advertising or offering for
sale in Australia car alarms described
under or by reference to the word
'PIRANHA';
c. using the word 'PIRANHA' in relation to
the sale, advertising or offering for
sale in Australia of car alarms;
d. using the 'fish' logo a copy of which is
depicted in Schedule 'A' hereto or a
logo substantially identical or
deceptively similar thereto in relation
to the sale, advertising or offering for
sale in Australia of car alarms;
PROVIDED that it shall not be a breach of this
undertaking to use the word 'PIRANHA' or the
'fish' logo in relation to car alarms made by the
first applicant.
2. NOTE the undertaking of the first respondent
to the Court that by 15 February 1988 it will:
a) execute all necessary documents to
effect the cancellation of the
registered business name 'PIRANHA CAR
ALARMS' in New South Wales and the
change of the name of the first
respondent to a name which does not
include the word 'PIRANHA'.
b) withdraw trade mark applications
nos.451522, 451523, 451524 and 451525.
3. NOTE the undertaking of the applicants to
the Court that during the period from 2 November
1987 to 1 February 1988 neither of them will
advertise car alarms in Australia under or by
reference to the name 'PIRANHA' unless the name
'ORVEL' is also prominently used in such
advertising.
4. NOTE the undertaking of the applicants to
the Court that from the date hereof each of them
will permanently refrain in connection with the
sale of car alarms in Australia from the use of
any advertising or promotional material supplied
by the respondents to the second applicant.
5. ORDER that the application be otherwise
dismissed with no order as to costs.
6. ORDER that the cross claim be otherwise
dismissed with no order as to costs."
(THE FISH LOGO HAS BEEN OMITTED)6. The undertakings having been given to the Court by counsel for the respective parties, his Honour noted the undertakings in pars 1-4 of the short minutes of order and made the orders in pars5 and 6 thereof. No steps were, however, taken to have the Registrar of the Court settle and enter the order in accordance with Order 36 of the Federal Court Rules. It was not proved that any officer or servant of the first respondent was in court when the undertakings were given. Certainly the second respondent was not then in court. Nor was a copy of the undertakings subsequently served upon him. However, in his affidavit sworn herein on 3 March 1988, the second respondent deposed to the fact that shortly before 2 November 1987 he had given instructions to his solicitor to settle the proceeding. He also deposed that he was aware that it was a term of the settlement that as from 1 February 1988 the first respondent was to cease to sell, advertise or offer for sale any car alarms under or by reference to the word "Piranha" or by reference to the "fish" logo unless the car alarms in question were made by the first applicant. In his oral evidence he confirmed that he was so aware in November 1987. He also agreed that he was aware in November 1987 of the terms of the other undertakings given by the first respondent and himself. It may also be noted that no notice was given to the first or second respondent that proceedings for contempt of court were to be instituted.
7. Counsel for the respondents submitted, and I accept, that the undertakings, properly viewed, represented a mechanism to effect a changeover which would result in the public associating the name "Piranha" with the first applicant and at the same time provide a workable regime to ensure continuity of the businesses of both the first applicant and the first respondent. To achieve this result, the respondents were to have the benefit of the period between 2 November 1987 and 1 February 1988 in which the first respondent's business could be continued as before, with car alarm systems, whether manufactured by the first applicant or not, being able to be sold under, or by reference to, the name "Piranha" and the "fish" logo. After 1 February 1988, the respondents were to use the name and logo only in connection with products manufactured by the first applicant. The undertakings given by the applicants were complementary to those given by the respondents. They required the applicants, during the period from 2 November 1987 to 1 February 1988, to associate the name "Orvel" with the name "Piranha" in advertising products manufactured by the first applicant and to desist from using promotional material which had originated with the respondents.
8. I also accept that the parties always contemplated that the first respondent would continue to sell car alarm systems manufactured by the first applicant until such time as the stocks of those systems which it held on 2 November 1987 were exhausted.
9. Before continuing, it should be noticed that the proceeding at present before the Court is brought by way of substantive application. However, as the contempt charged is alleged to have been committed in connection with an earlier proceeding before the Court, proceeding numbered G 394 of 1987, the present proceeding should have been brought before the Court by motion on notice in that earlier proceeding as required by Order 40, sub-rule 5(1) of the Federal Court Rules. However, the separate proceeding has been allowed to continue, the Court not having been requested to order otherwise under that sub-rule.
10. In considering the material before the Court, I have applied the principles concerning the standard of proof in a case of contempt referred to in Rejfek v. McElroy [1965] HCA 46; (1965) 112 CLR 517 at p 521, Sunbrite Products (Aust.) Pty Ltd v. Jabuna Pty Ltd [1980] FCA 4; (1980) 47 FLR 73, Jendell Australia Pty Ltd v. Kesby (1983) 1 NSWLR 127, Flamingo Park Pty Ltd v. Dolly Dolly Creations Pty Ltd [1985] FCA 123; (1985) 5 FCR 169 at pp 183-4 and Windsurfing International Inc. v. Sailboards Australia Pty Ltd [1986] FCA 384; (1986) 69 ALR 534 at pp 540-1.
11. The applicants charge that, on three occasions between 2 and 10 February 1988, the first respondent sold and installed car alarm systems which were not of the first applicant's manufacture and, in connection therewith, used the name "Piranha" and the "fish" logo. The allegation is made in respect of the supply on 3 and 4 February 1988, pursuant to an order placed on 2 February 1988, of a total of 11 systems to Budget Lease Management, the supply on 5 and 8 February 1988, pursuant to an order also placed on 2 February 1988, of a total of 12 systems to Rider Hunt Sydney Pty Limited (trading as Rider Hunt & Partners) and the supply on 9 February 1988 of one system to an employee of the second applicant, one Stephen Gary Meltz, who, for the purpose of the transaction, used the false name "Stephen Light". This latter system was installed in a motor vehicle, owned by one Peter Vitek, a director of the second applicant. The order for that system was placed on 4 February 1988.
12. Six of the vehicles in which those alarm systems were installed were
subsequently inspected by representatives of the applicants.
The vehicles
inspected were three of Budget Lease Management identified by registration
numbers OJE-599, OLS-733 and OHP-593, two
of Rider Hunt & Partners,
registration numbers OEI-595 and OIY-543, and the vehicle, OAN-538, owned by
Mr Vitek. The evidence in
relation to the inspections clearly establishes
that the car alarm system installed in each of those vehicles was not of the
first
applicant's manufacture but that, nevertheless, each bore a sticker
containing the words "Piranha Car Alarms" and a logo deceptively
similar to
the "fish" logo the subject of the undertakings given by the first respondent.
The evidence also clearly establishes that
the first respondent delivered to
each customer an invoice or invoices which bore the first respondent's name,
"Piranha Security
Systems Pty Ltd", and the following logo:
(LOGO HAS BEEN OMITTED)A sticker was also affixed to a window of each vehicle containing the words "Watch out - Piranha Car Alarms" and a representation of a fish similar to that depicted above.
13. It is further established that, in respect of five of those systems (that is to say the systems installed in the vehicles identified above other than the vehicle OEI-595), the customer received a form of warranty given by the first respondent. That form of warranty prominently displayed the "fish" logo, that is to say a logo consisting of a representation of a fish and the word "Piranha", with the addition of the words "Car Alarms" in smaller print. The warranty was expressed to relate to "this Piranha Alarm". I am prepared to infer that such a document was also handed to the customer in relation to the system installed in vehicle OEI-595. In the case of vehicle OAN-538, Mr Meltz was also handed a booklet entitled "Vehicle Security System Manual" on which the words "Piranha Car Alarms" and a "fish" logo similar to that on the invoices were prominently displayed.
14. As to the systems installed in the remaining 18 vehicles (being Budget Lease Management's vehicles NZX-588, NWV-514, OLO-213, NWP-605, NTS-804, NUT-357, OCR-144 and NYC-318 and Rider Hunt & Partners' vehicles VIN-123, OGE-237, OHX-661, RD-668, OSS-470, OJH-486, OFN-739, OIY-311, ONS-936 and OQF-937), I accept that in each case the system installed was not of the first applicant's manufacture. While the evidence establishes that invoices, in the form previously referred to, recording the installation of the system in each of the vehicles were supplied to the customers, there is no evidence to show that the systems installed in those vehicles bore stickers similar to those found on the systems installed in the six inspected vehicles. The evidence also establishes that, in respect of the systems installed in nine of the Rider Hunt & Partners' vehicles identified earlier in this paragraph, that is to say the vehicles of that company mentioned above other than OFN-739, a form of warranty was supplied in similar terms to the form of warranty supplied in respect of each of the inspected vehicles. I am prepared to infer that such a document was also handed to the customer in relation to the system installed in vehicle OFN-739.
15. To counter any suggestion that might be made that any use made by the first respondent in the course of its business after 1 February 1988 of the word "Piranha" and the "fish" logo was a use in connection with car alarm systems of the first applicant's manufacture, the applicants tendered evidence of inspections made of certain premises in Sydney and Melbourne at which stocks of car alarm systems of the first applicant's manufacture held by or on behalf of the first respondent were counted. The evidence was received subject to objection. The respondents subsequently tendered evidence of the stocks of car alarm systems of the first applicant's manufacture, both new and used, held by it according to its computer records, on 1 February 1988. That evidence was received without objection and was not challenged in any way.
16. Upon further consideration, I am of opinion that the evidence tendered on behalf of the applicants is admissible. However, it is impossible to reconcile that evidence with the evidence given on behalf of the respondents and I have derived no real assistance from it in reaching my conclusions.
17. Although it has been convenient to examine the evidence in relation to each of the 24 vehicles involved, the question whether the first respondent committed a breach of the undertakings given to the Court on 2 November 1987 is properly to be considered by reference to each of the three transactions into which it entered.
18. In relation to the transaction with Budget Lease Management, I find that the first respondent supplied and installed eleven car alarm systems which were not of the first applicant's manufacture. I further find that three of those systems bore stickers containing the words "Piranha Car Alarms" and a logo deceptively similar to the "fish" logo, that the invoices supplied to the customer in respect of the alarms supplied bore a logo deceptively similar to the "fish" logo, and that, in the case of the alarms installed in three vehicles, the customer was given a form of warranty on which the "fish" logo was prominently displayed.
19. In relation to the transaction with Rider Hunt & Partners, I find that the first respondent supplied and installed twelve car alarm systems which were not of the first applicant's manufacture. I further find that two of those systems bore stickers containing the words "Piranha Car Alarms" and a logo deceptively similar to the "fish" logo, that the invoices supplied to the customer in respect of the alarms supplied bore a logo deceptively similar to the "fish" logo, and that, in the case of each of the alarms installed, the customer was given a form of warranty on which the "fish" logo was prominently displayed.
20. In relation to the third transaction, that with Mr Meltz, I find that the car alarm system supplied was not of the first applicant's manufacture but that it bore the offending sticker. I also find that an invoice was supplied which bore a logo deceptively similar to the "fish" logo, that a form of warranty was supplied on which the "fish" logo was prominently displayed and that a manual was supplied bearing the word "Piranha" and a logo deceptively similar to the "fish" logo.
21. It was submitted by counsel for the respondents that the use by the first respondent of the forms of invoice to which I have referred did not constitute a breach of par.1 c or d of the undertakings as the invoices were not "used .... in relation to the sale" of the car alarms. It was submitted that the invoice merely reflected an antecedent order or sale. In my opinion, this submission must be rejected. The words "in relation to" are words of wide import and there was, in my view, a sufficient connection between the use of the form of invoice and the sale of the car alarms to warrant the conclusion that the invoice was used "in relation to" the sale. I reach the same conclusion in relation to the forms of warranty.
22. I, therefore, find that, in relation to each of the three transactions, the first respondent was in breach of the undertakings given by it to the Court. In each case the first respondent's conduct amounted to a breach of pars 1 b, c and d of the undertakings set out in the short minutes of order the text of which appears earlier in these reasons.
23. The applicants also charge that the first respondent carried on business in Australia under the name "Piranha Car Alarms" after 1 February 1988 contrary to par.1 a of the undertakings given by it.
24. The applicants rely on the evidence that, on 9 February 1988, the awning of the first respondent's premises situate at 218-220 New South Head Road, Edgecliff bore the words "Piranha Security Systems - Total Protection With Remote Control" and "Piranha Alarms". They also rely on the evidence that in a window at the front of the premises there was a large sign consisting of the "fish" logo, the first respondent's telephone number, 327 5646, and the words "Piranha Car Alarms - With full remote control", that there was a sticker on the entrance door bearing the "fish" logo and that, in another window of the premises, there was a poster bearing the words "Put the Bite into Crime" and the "fish" logo accompanied by the words "Piranha Car Alarms".
25. There is evidence before the Court that, by 9 March 1988, the words "Piranha Alarms" on the awning of the premises had been replaced by the words "Shark Alarm". However, the "fish" logo and the words "Piranha Car Alarms" were still displayed within the premises. The poster "Put the Bite into Crime" referred to above also remained prominently displayed.
26. In my opinion the evidence is not sufficient to establish, according to the standard of proof required, that the first respondent after 1 February 1988 carried on its business under the name "Piranha Car Alarms". I am, therefore, not prepared to find, on the evidence before me, that the first respondent committed a breach of par.1 a of the undertakings.
27. The applicants also relied upon an advertisement on behalf of the first
respondent which was telecast on a number of occasions
during the first two
weeks of February 1988 as amounting to a breach of par.1 b of the undertakings
by which the first respondent
undertook not to advertise or offer for sale car
alarms, not being of the first applicant's manufacture, described under or by
reference
to the word "Piranha". The advertisement referred to "Shark" alarms
but also used the word "Piranha". That word was, however, used
in the
following context:
"The new electronic marvel the Shark alarm with28. The evidence establishes that the first respondent had on hand at the relevant time certain stocks of car alarms manufactured by the first applicant. The evidence tendered on behalf of the applicants concerning the stocks of Orvel products held by or on behalf of the first respondent, evidence which I have ruled admissible, was relied upon as showing that the reference in the advertisement to "Piranha" car alarms could not have been a reference to alarms of the first applicant's manufacture as the stocks on hand were not sufficient to enable sales to be made at a discount "all this year". I have already referred to the difficulty in evaluating the applicants' evidence on this aspect in the light of the unchallenged evidence given by Mr Kimel as to the stocks on hand on 1 February 1988.
the panic and anti-scanner remote control system
is now available but you can still get Piranha
alarms at 30% off the standard retail price all
this year."
29. In my opinion, the applicants have not established, according to the requisite standard of proof, that the televising of the advertisement constituted a breach of the undertakings.
30. I turn now to the question whether the breaches of the undertakings which I have found proved amounted to wilful disobedience of those undertakings or whether the disobedience is properly to be characterised as "casual, accidental or unintentional".
31. According to Mr Kimel, the first respondent had "since about November
1987" adopted the name "Shark" as its trade mark for car
alarms and had used
the name "Shark Alarms" in relation to its business. In his affidavit sworn
on 3 March 1988, he said that he
decided that, as from 1 February 1988, car
alarms and accessories other than those of the first applicant's manufacture
should be
sold by the first respondent under the name "Shark" while those of
the first applicant's manufacture would continue to be sold under
the name
"Piranha" and the "fish" logo. Thus, he said, it became necessary to instruct
the service technicians to fit equipment
of the first applicant's manufacture
where the system had been sold as a "Piranha" system and to ensure that those
technicians were
made aware which system had been sold. There is no evidence
of any instruction having been given to the service technicians or,
indeed, to
any member of the staff of the first respondent other than that contained in a
memorandum, said to have been distributed
to all staff, in the following
terms:
"Since we have changed our operation to SharkThat memorandum, however, was not issued earlier than 10 February 1988.
all alarms are to be sold as Shark unless
specifically requested for Piranha. In this
instance the alarm sold will be a 'Piranha by
Orvell'. Therefore, all stock issued for that
alarm must be Orvell stock."
32. Mr Kimel also deposed, in an affidavit sworn on 23 June 1988, that in or
about November 1987 he arranged on behalf of the first
respondent for the
printing of warranty books, installation books, labels and window stickers
bearing the trade mark "Shark". That
material, he said, was received by the
first respondent by December 1987. Mr Kimel further stated that from about
December 1987
the first respondent made up stocks of non-Orvel products packed
in boxes bearing "Shark" stickers. The warranty documents and window
stickers
were also said to bear the name "Shark". His affidavit continued:
"4. By January 1988, the first defendant's33. Mr Kimel also stated in his affidavit sworn on 23 June 1988 that on 27 January 1988 he ordered two types of stickers which could be affixed to stocks of invoices then on hand. One sticker was to bear the words "Shark Alarm - Car Security Systems" designed to be affixed over the first respondent's name as appearing on the invoice forms. The other was to bear the words "Shark Alarm" and representations of a shark's fin and was to be affixed over the "fish" logo appearing on those forms. Mr Kimel conceded that stocks of these stickers were not received until 15 February 1988. He asserted that, thereafter, all original invoices issued to customers in respect of car alarms had those stickers affixed.
(respondent's) stocks of alarms issued
to the various installers comprised
non-Orvel products, some of which bore
'Shark' stickers and were accompanied by
warranty forms using that name and other
stocks which were non-Orvel products but
still marked with 'Piranha' stickers and
packed in boxes bearing the 'Piranha'
name. During January 1988, I was aware
that both types of stocks were being
issued to installers by the first
respondent.
5. Towards the end of January I had a
conversation with the storeman at
Camperdown premises and my father, who
is in charge of that store. I
instructed my father to ensure that from
1 February 1988 all non-Orvel products
issued to installers should be stocks
marked with the 'Shark' stickers
accompanied by the relevant 'Shark'
warranty documents and window stickers.
I also instructed my father to ensure
that any stocks of non-Orvel products
which bore 'Piranha' stickers and
accompanied by 'Piranha' warranty forms,
should be reboxed and restickered with
the 'Shark' name with a 'Shark' warranty
card. I also requested my father to
require each of the installers to return
to store at Camperdown any non-Orvel
stocks still bearing the 'Piranha' name.
6. Towards the end of January at the
Camperdown premises I observed the
storeman carrying out the instructions
which I had given, namely removing the
'Piranha' stickers from non-Orvel stocks
and applying the 'Shark' stickers and
making a similar change in relation to
the warranty cards and boxes.
7. .... At the time I gave these
instructions I believed that they would
ensure that any non-Orvel product
supplied by the first respondent on or
after 1 February 1988 would bear the
'Shark' brand and be accepted (sic) by
'Shark' warranty documents.
....
9. It was my strict intention on behalf of
the first respondent to ensure that all
non-Orvel products supplied by the first
respondent after 1 February 1988 should
bear the mark'Shark' and be accompanied
by warranty documents in that name.
...."
34. I am satisfied, on the evidence, that Mr Kimel, as the person responsible for the day to day running of the first respondent's business, failed to take adequate steps to ensure that the obligations which the first respondent had assumed by giving the undertakings to the Court were fulfilled. Neither the text of the undertakings nor any information as to their effect upon the conduct of the first respondent's business was communicated to the staff generally prior to 10 February 1988 and even that communication was scarcely adequate. The conversations which Mr Kimel had with his father in relation to the matter were ineffective to achieve the result that no breaches of the undertakings should occur. It is clear from Mr Kimel's evidence that he was well aware in January 1988 that car alarms not of the first applicant's manufacture were being marketed under the "Piranha" name and "fish" logo. Apart from his evidence that towards the end of January 1988 he observed the storeman at the Camperdown premises of the first respondent removing "Piranha" stickers from non-Orvel products, the evidence does not suggest that he made any check of the stock on hand or, perhaps more importantly, of any stock held by the service technicians, to see that the business was being conducted in accordance with the undertakings.
35. Although I am prepared to accept that neither the first respondent nor any of its servants or agents consciously and deliberately set out to act in a manner contrary to the undertakings given to the Court, I am unable to accept the submission put on behalf of the respondents that the breaches are properly to be characterised as casual, accidental or unintentional as those expressions are used in this area of the law. There was, here, careless neglect on the part of the first respondent of the obligations it had assumed. It failed in its elementary duty to take adequate and continuing steps to ensure, through its responsible officers, that the undertakings given were fulfilled. The breaches are such that, in my opinion, the imposition of fines upon the first respondent is warranted.
36. I propose to impose a separate fine in relation to each of the three transactions in respect of which I have found that breaches of the undertakings given by the first respondent occurred. I fix the amount of the fine in each case at the sum of $1,500. In fixing that sum, I have taken into account that I propose to make an order for costs against the first respondent.
37. The applicants sought an order that the respondents pay the costs of the
application on a solicitor and client basis. In considering
what order for
costs is appropriate I have taken into account the following matters:
. the applicants took no steps to have the38. In all the circumstances, I think the appropriate order is that the first respondent pay two-thirds of the applicants' costs. I do not propose to order that those costs be on a solicitor and client basis.
Registrar of the Court settle and enter
the order made by the Court on 2
November 1987 and took no steps to serve
a copy of the undertakings upon the
respondents;
. the applicants gave no notice to the
respondents of their intention to
commence proceedings for contempt of
court;
. the present application was not made in
accordance with Order 40, sub-rule 5(1)
of the Federal Court Rules;
. the applicants joined with the contempt
proceedings a claim for substantive
injunctive relief, a claim which was not
abandoned until the second day of the
hearing;
. the applicants failed to establish a
number of the allegations made against
the first respondent in the further
amended statement of charge filed on 14
June 1988 including, in particular, the
allegation that the first respondent
after 1 February 1988 carried on its
business under the name "Piranha Car
Alarms".
39. The position of the second respondent is that he was not personally involved in any of the acts which constitute the breaches by the first respondent of its undertakings. As the person in charge of its business activities, he must, of course, bear the responsibility for failing to ensure that all necessary steps were taken to see that there was compliance with the undertakings. However, I do not think I should conclude that he "procured", as is alleged in the charge against him, the breaches by the first respondent of its undertakings. I, therefore, dismiss the charge against him but I make no order in respect of his costs.
40. I make the following orders:
(1) The first respondent be adjudged to be
guilty of contempt of court in that its
conduct in relation to the supply on 3
and 4 February 1988 pursuant to an order
placed on 2 February 1988 of car alarms
to Budget Lease Management involved a
breach of pars 1 b, c and d of the
undertakings given to the Court by the
first respondent on 2 November 1987.
(2) In respect of the said contempt, the
first respondent pay a fine of $1,500.
(3) The first respondent be further adjudged
to be guilty of contempt of court in
that its conduct in relation to the
supply on 5 and 8 February 1988 pursuant
to an order placed on 2 February 1988 of
car alarms to Rider Hunt Sydney Pty
Limited involved a breach of pars 1 b, c
and d of the said undertakings.
(4) In respect of the said contempt, the
first respondent pay a fine of $1,500.
(5) The first respondent be further adjudged
to be guilty of contempt of court in
that its conduct in relation to the
supply on 9 February 1988 of a car alarm
pursuant to an order placed on 4
February 1988 by one Stephen Gary Meltz
involved a breach of pars 1 b, c and d
of the said undertakings.
(6) In respect of the said contempt, the
first respondent pay a fine of $1,500.
(7) The fines, totalling $4,500, be paid to
the Registrar of the Court within 21
days from the date of these orders.
(8) The application be otherwise dismissed.
(9) The first respondent pay two-thirds of
the applicants' costs of the
application.
(10) There be no order as to the costs of the
second respondent.
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URL: http://www.austlii.edu.au/au/cases/cth/FCA/1989/16.html