ety oo JUDGMENT No. suns ena one Sane CATCHWORDS se Contempt of Court - Non-compliance with order to pay money - Whether contempt contumacious - Service of order - Matters to be set out in motion. Trade Practices Act 1974. TRADE PRACTICES COMMISSION v C.G. SMITH PTY. LIMITED, IAN FAIRWEATHER and ROGER GREGORY MATSON (also known as R. Gilbert) No. G44 of 1977 Coram: Bowen C.J. Sydney 17th February 1978 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY GENERAL DIVISION No. G44 of 1977 IN THE MATTER of the Trade Practices Act 1974 BETWEEN: ORDERS JUDGE MAKING ORDER: Bowen C.J. DATE OF ORDER: 17th February 1978 WHERE MADE: Sydney THE COURT ORDERS THAT: 1. Motion dismissed. TRADE PRACTICES COMMISSION Applicant C.G. SMITH PTY. LIMITED First Respondent IAN FAIRWEATHER Second Respondent ROGER GREGORY MATSON (also known as R. Gilbert) Third Respondent IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY No. G44 of 1977 wwe ww GENERAL DIVISION IN THE MATTER of the Trade Practices Act 1974 BETWEEN: TRADE PRACTICES COMMISSION Applicant AND: C.G. SMITH PTY. LIMITED First Respondent IAN FAIRWEATHER Second Respondent ROGER GREGORY MATSON (also known as R. Gilbert) Third Respondent CORAM: Bowen C.J. 17th February, 1978 JUDGMENT This is an application by Ian Fairweather to be released from an undertaking given to the Court on 21st July 1977 in proceedings commenced by order nisi by the Trade Practices Commission ("the Commission") against C.G. Smith Pty. Limited ("the Company"), Ian Fairweather and Roger Gregory Matson. The Commission sought injunctions to restrain the Company from engaging in trade or commerce in the conduct of advertising interests in land in a manner which was alleged to be misleading and an injunction to restrain Mr. Fairweather and Mr. Matson from aiding or abetting the Company or any person to engage in such conduct or being knowingly concerned in or party to such conduct. When the matter came on before Franki J. on 21st July 1977 at 10.15 a.m., the Commission was represented by Mr. Bennett of Counsel amd the three respondents were represented by Mr. Hilbery of Counsel. An adjournment was sought in order to discuss settlement. After about one and three-quarter hours, the matter came on again before Franki J. and terms of settlement, signed by the respective Counsel, were handed up. By these terms, the parties agreed to orders in the terms of documents annexed to the terms and marked "A", "B" and "Cc". Annexure "A" provided for an injunction against the Company in the terms sought and also for an order that the Company disclose to each person who had paid money, certain information by sending by post within twenty-one days a letter in a form set out. Annexure "B" provided for an injunction restraining Mr. Fairweather and Mr. Matson in the terms sought. Annexure "C" provided for an order that jointly and severally the three respondents pay the applicant's costs. In addition, the terms of settlement provided that the Commission agreed to file with the Court a letter in the form of a document annexed and marked "D". This document, while disclaiming any authority to authorise or to clear advertisements contained a statement that the Commission had no objection to the test of a printed form of an advertisement which was attached. Pursuant to the terms of settlement, the respondents, by their Counsel, gave undertakings to the Court as set forth in a document annexed and marked "E". These undertakings were as follows:- "THIS COURT DOTH NOTE THE UNDERTAKINGS TO THE COURT jointly and severally, by the first, second and third respondents, that they will - + refund to each person who completes and posts to the first respondent a document in the terms of the form set out in annexure "A" to these terms of settlement, the money paid by such person to the first respondent or to Fairmat Finance Co., such refund to be made within 21 days of the receipt by the first respondent of the said document. - provide the applicant within 28 days with a list of the persons who have paid money to the first respondent or to Fairmat Finance Co. in respect of an interest in the said land. .» provide the applicant on or before lst day of December 1977 with a list of persons responding to the said letter and a statement of the steps taken with regard to each." Pursuant to the terms, it was finally ordered that the parties have liberty to apply on three days' notice. These orders of 21st July 1977 were entered on 24th August, 1977. No step was taken prior to their being entered to challenge or question them. They were consent orders. On 5th October 1977 a notice of motion was issued by the Commission against Mr. Fairweather and Mr. Matson seeking an order that they be committed to prison for contempt of Court in that they had disregarded and committed a breach of their undertaking given on 21st July 1977. This motion came on for hearing before me on 26th October 1977. The Commission was represented by Counsel. Mr. Matson appeared in person. Mr. Fairweather did not appear. He had been on a plane destined to leave Australia but had been apprehended in Darwin, where he was then in custody. The motion came again before me on 27th October 1977. Mr. Fairweather was then before the Court in custody. He was released on certain conditions. The motion came on before me for further hearing on 4th and 8th November and the 5th, 6th and 9th December 1977. When the hearing was in progress on 9th December 1977, Mr. Fairweather applied to be discharged from the undertaking. It was decided that, as the motion for contempt had proceeded so far, Mr. Fairweather should tender his evidence in support of his application to be discharged from the undertaking along with any other evidence he wished to tender in his case in relation to the motion for contempt. It would be evidence in the contempt motion and evidence on which he would base his application to be discharged. The hearing accordingly continued on the 9th December 1977 and 2nd and 3rd February 1978. It concluded on 3rd February 1978, . when I reserved my decision on the motion and Mr. Fairweather's application. The grounds on which Mr. Fairweather claimed he should be discharged from the undertaking were that it was given by Mr. Hilbery without his knowledge, consent or instructions and that Mr. Hilbery was at the time unaware of the bad financial position of the Company, Mr. Fairweather and Mr. Matson. Mr. Hilbery and Mr. Fairweather both gave oral evidence in relation to the matter. In my opinion, Mr. Hilbery endeavoured to give a frank and honest account of what occurred, though his recollection at times proved faulty. I would not be prepared to act upon the testimony of Mr. Fairweather on contentious matters where he was not corroborated by other evidence. My conclusions from the evidence are - 1. That the firm of Solicitors, Coonan and Associates, were instructed to act for the Company, Mr. Fairweather and Mr. Matson in the proceedings commenced by the Commission by order nisi. 2. That the matter was handled by Mrs. Coonan, principal of the firm, assisted by Mr. Leo. 3. The firm briefed Mr. Hilbery of Counsel to appear for all three respondents. After interlocutory injunctions had been granted against the three respondents, a conference with Mr. Hilbery was held on 6th July 1977 at which Mr. Matson and Mr. Fairweather were both present. ' Mr. Hilbery further discussed the case in telephone conferences with Mr. Fairweather on Sunday 10th and Tuesday 12th July 1977. There was another conference with Mr. Hilbery on 15th July 1977 at which Mrs. Coonan, Mr. Leo and Mr. Fairweather were present. On 20th July 1977 Mr. Hilbery received draft terms of settlement from Mr. Bennett. These were substantially in the form ultimately handed up on 21st July 1977. On 21st July 1977, they were amended in small but not unimportant respects at the instance of Mr. Hilbery designed to make them more favourable to the respondents. After receiving the draft terms on 20th July 1977, Mr. Hilbery had a conference with Mrs. Coonan about the draft, during which Mrs. Coonan spoke to Mr. Matson on the telephone about the terms. On 21st July 1977, Mr. Fairweather was not present because he had to be in Court at Parramatta. During the conference held during the adjournment on 21st July 1977, the draft terms were discussed at some length between Mr. Hilbery, Mrs. Coonan, Mr. Leo and Mr. Matson. Some amendments were later put to Mr. Bennett and agreed to by him. The terms agreed upon, which were signed by both Counsel and handed up to Franki J., included the amendments. 10. 11. 12. Mr. Hilbery gave evidence that he believed the original draft terms were read out or described to Mr. Fairweather. He had no clear recollection as to detail, but attached that to recollection of a telephone call to Mr. Fairweather on 20th July 1977. Later, after referring to a copy of his memorandum of fees, he thought that he was mistaken in thinking a telephone call was made to Mr. Fairweather on that day. He outlined various matters arising in his dealings with Mr. Pairweather and Mr. Matson which led him to believe that they consulted together, that they both spoke for the Company and that when Mr. Fairweather was not there, Mr. Matson spoke for him. He believed both were directors, although Mr. Matson was not in fact a director. He believed he was entitled to take instructions from Mrs. Coonan in respect of all three respondents and that he had instructions, not only from Mr. Matson but from Mrs. Coonan, to agree to the terms, including the undertaking on behalf of each of his clients. Mrs. Coonan was not called in relation to Mr. Fairweather's application. At the 21st July 1977, Mr. Hilbery was not informed and was not aware that the Company or either of the individual respondents was in any financial difficulty. What was the financial position of the Company or the individuals at that time was not established by the evidence. However, the Company went into liquidation on 17th August 1977 and Mr. Matson became bankrupt on his own petition presented on 21st November 1977. 13. Mr. Matson visited Mr. Fairweather at his home after Court hours on 2lst July 1977, taking with him a copy of the terms of settlement. The matter was discussed. Mr. Fairweather expressed anger at the personal obligation placed upon him. 14. After the 21st July 1977, Mr. Fairweather joined with Mr. Matson in carrying out the terms of settlement, including the sending out of the letter required by the orders of 2ist July 1977. Mr. Fairweather in cross-examination, agreed he had attended a conference with Mr. Hilbery at which a compromise of the proceedings brought by the Commission was discussed. Prior to 2lst July 1977 he knew that an attempt was to be made to settle the proceedings and that this would involve the giving of an undertaking that money would be refunded to persons who claimed it. He asserted that he did not understand he would be personally involved. He said he realised that Mr. Matson and Mr. Hilbery were going to attempt to reach a settlement with the Commission on 21st July 1977. When asked whether he was content that morning to leave things to Mr. Matson and Mr. Hilbery, he said: "I was not content to, but I had to." In my view, Mr. Hilbery was justified in relying upon instructions from Mr. Matson and Mrs. Coonan in relation to the settlement, including the undertaking to be given by Mr. Fairweather. Counsel for the Commission argued that Counsel's general authority extends to the giving of an undertaking on behalf of his client. He cited Matthews v. Minister (1887) 20 Q.B.D. 141. That case referred to the compromise of an action, but the compromise did not involve the giving of any undertaking. It has been held the Court will not accept an undertaking offered by Counsel on behalf of his client, in circumstances where Counsel states he has no authority from his client to give it (Smith v. Beeman (1842) 6 Jur. 222). In Marsden v. Marsden (1972) 2 All E.R. 1162, undertakings were given by Counsel on behalf of a wife as part of a compromise with her husband. Subsequently the wife moved to set the compromise aside and her application was successful. In that case the authority of Counsel was limited by express instructions unknown to the other side. He compromised contrary to his instructions. The applicant informed the Court of her intended application to set aside the compromise a day or two prior to the original order being entered. The actual application was lodged on the day the -order was entered. Although precise times could not be determined, her application was treated as one which had been made before the order was perfected. In the present case, I have come to the conclusion that Mr. Fairweather was aware before the 2lst July 1977 that, in order to effect a settlement of the proceedings, undertakings regarding refunds, including undertakings by the Company, Mr. Matson and himself would have to be given. He left it to Mr. Matson and Mr. Hilbery to secure the best terms they could. In my view, in all the circumstances, it was within Mr. Hilbery's authority to give the undertakings which he did. Furthermore, Mr. Fairweather, with knowledge of the settlement, took the benefit of the consent orders which had been made. The Commission and, indeed, the Company and Mr. Matson, were properly entitled to rely upon the fact that the undertaking was given on Mr. Fairweather's behalf as part of the settlement. The orders were duly entered. The Commission's proceedings were finalised by the orders and cannot now be revived. In the result, I order that Mr. Fairweather's application to be discharged from the undertaking be dismissed with costs. ae ce A LR CAT, I certify that this and the q preceding paves ave a true copy of the Reasons for Juc_sv-t herein of his Honour the Chief Judge, 51. Nigel Bowen } QAuvnuks Associate Dated: 17 /A/t!47? \ PB Oe at ented tee oe Me dds ame AE ER I tint rents nian Ne! REL eet TESS ute) ee tet mane Loredana re meebo Bit Ge an! ls Us eh i, oa Meee mance tee ee ee RE eee TED oe Oe tL we 5} 1A1g IN THE FEDERAL COURT OF AUSTRALIA No. G-44 of 1977 Trade Practices Act 1974 ) ) ) ) GENERAL DIVISION ) IN THE MATTER of the ) NEW SOUTH WALES ) ) ) DISTRICT REGISTRY BETWEEN: TRADE PRACTICES COMMISSION Applicant AND: C.G.SMITH PY. LIMITED First Respondent TAN FAIRWEATHER Second Respoendenr ROGER GREGORY MATSON (also known as R. Gilbert) Third Respondent TERMS OF SETTLEMENT BY CONSENT - l. Respondents ayree to the making of crders in tne fon terms of the dvcurents annexed nereto and marke wa" , "BY and rc" . 2. The Applicant agrees to file with the Court a 'terer in the form of the document annexed hereto and marked "D". 3. » The Respondencs by their Counsel give the under- takings to the Court in the document annexcd hexr-e=> and marked "F". 4, Liberty to apply on 3-days'' notice. DATED this 2ist day of July 1977, f / / — Alf — ~? a Late be Woe ee ee eee ee TT cece nn counsel ~ for the Appi3 nant Councel for the Resor. Racal weave ate acl ee a aR ER un ee ara arate AR a athe OE ee RA ate. 97H; OM eee toner ee Ti Ne ett nt he hu a ET ONTO TET Sere "AK" THIS COURT DOTH BY CONSENT ORDER that the first resvondent be restrained from advertising or offering for sale, or selling, or making representations in relation to, interests in the land marked in red on the map annexed hereto marked "F" without disclosing - (a) the nature of the interests in the said land so advertised, offered or sold, or in relation to which such representations were made, and (b) the prohibitions and restrictions existing by law upon the erection of dwellings upon the said land. AND THIS COURT DOTH BY CONSENT FURTHER ORDFR that the first respondent disclose to each person who has paid money to the first respondent or to Fairmat Finance Cc., whether as payment in full, as a deposit as a vartial payment or otherwise, in resvect of an interest in the said land, the information specified below, by sending to each such person by pre-paid ordinary post within 21 days of the date of this order a letter containing the said information - The Federal Court of Australia by consent has directed C.G.Smith Pty. Limited to disclose the following information in relation tc interests in Rural and River Acres Estate purchased from C.G.Smith Pty. Limited. - For each "1 Acre" purchased; purchasers receive a 1/9000th interest in the whole Estate, which interest is held on trust for purchasers ry c.G.Smith Pty. Limited. C.G.Smith Pty. Limited has granted to each nurchaser of an "acre" an exclusive right to occuoy an allotrent having an area of approximately 0.4 hectares (1 acre). By these arrangements purchasers do not acauire any interest in land that may be registered with the Registrar-General. As the land is zoned as "Non-urban 'A ", purchasers may not erect on the land any house, . cabin, shed or other dwelling aithough they mav erect non-residential buitdines foi use in connection with rural activities such as stables garden sheds and rural outbuildings. If, as a result of the above informaticn not having been previously made clear to vou, any AA ete ae nk ka nh Rt i FO al TE an i hl etl te PML a PeBURET ER ats Rte Stee wre Te EE a LP te Daren es mace, te be re ean purchaser desires to have refunded any money paid in respect of the land and to have rescinded any contract in respect of the land, the attached form should be completed and posted to C.G.Smith Pty. Limited, 3rd Floor, 300 George Street, SYDNEY. N.S.W. 2600 ATTACHED FORM Name(s): Address: Allotment Number(s): Section Number: Portion Number: Total Amount. paid: $ As a result of - . the intormation as to the nature of the interest in the land that I/we purchased, and/or . the information thac I/we cannot build a house on the land, I/we demand that you return all money, that I/we have paid in resvect of the land, to me/us immediately at the above address. I/we understand that upon refuné cf that money to me/us, all contracts that I/we entered into in respect of the land will be rescinded. Signature (s): lite OR! Eee eat be aan nA UM i NE ae Rk ee A te eR cae te es aby eerie. deed te tba kried te wot = Mahe mene teehee 00 alld aot pH THIS COURT DOTH BY CONSENT ORDER that the second and third respondents be restrained from aiding, abetting, counselling or procuring the first respondent or any other person or company to engage in the conduct specified below and from being in any way, directly or indirectly. knowingly concerned in, or party to, such conduct by the first respondent or any other person or company. Advertising or offering for sale, or selling, or making representations in relation to, interests in the land marked in red on the mao annexed hereto marked "EF" without disclosing - (a) the nature of the interests in the said land so advertised, offered or sold, or in relation to which such representations were made, and (b) the prohibitions and restrictions existing by law upon the erection of dwellings upon the said land, bow, po egssliaeninteh anata? Landaa tennis! nnn se neal aa ine OA eH od" opt a te tte Wis Nn eA en nly nn tases SeBbrca A tat, cide! Se tne ellen fea lS swaraes Jas. etc "ou THIS COURT DOTH BY CONSENT ORDER that, jointly and severally, the first, second and third respondents pay to the applicant the applicant's costs of these proceedings as assessed and agreed or in the absence of agreement as taxed by the Registrar. Fe eee RE SOTO TTS SOnOER OS DC UNONTEN SPT ST) 6 RT Pie amma eo a, dO dae ce he ao aaa tsar Ree tite wien te EA ho ante tae pata well lees ea ee Wher The Trade Practices Commission has no authority to "authorize" or "clear" advertising as not being misleading or deceptive in contravention of section 52 of the Trade Practices Act 1974, and, any expression of opinion by the Commission does not bind any third party. However, the Commission states that it has no objection to the text of the following advertisement insofar as it relates to - (a) the nature of the interests in the land that are being advertised, and (b) the prohibitions and restrictions upon the erection of dwellings upon the lana. (Advertisement as attahed with 'Deed of Ownership to each one acre allotment' replaced by 'separate deed defining your right to éccupy one specific acre') ry ante tt le a on i (8.4 Hectares} SO CASH FOR Qty euicn sau Huge 120° frontage by 380° ducp tdeal bohday tideaway, caiaarzg, caravanng, pomes fiahing, watersports et. Races only S10 per year as these lovely rural u!ounents are definicly not zoned for tesidenual deiiings Mleawe note rou _ re purchasing a 1 YOOUth anterest in our nug. 2OC0 acre estate with eight mules of gionous river frontage, company provdedseed of ownership .e cach one acre allotment fully transterable Tre estate 18 ideally situated in the beautiful reriote, Clucace Valley of northuorm NSW, half way, oetween Grafton and Glen Innes Shere are no services whatsoever and at thes. www pnees tne sompany do not intend providing any for directuonal map ard plans ot tne estute pnoue ¥dney (02) 233 2283 Or send coupon botow ¢ G SMITH PTY LTD (ins 1358) 3rd Floor 300 Gearga St Sydney NSW 2002 . NAME . ADDRESS . eee ase «. «, Postcodes . de the \ THIS COURT DOTH NOTE THE UNDERTAKINGS TO THE COURT, jointly and severally, by the first, second and third respondents, that they will iene Eee ca ala hak a AL Sut Leweel et reenaelaleniin nebeel cali boetnm on nats pane rrsaatsliesaiie JOpVUES ve Det TaD ae lig efi a le i a Se refund to each person who completes and posts to the first respondent a document in the terms of the form set out in annexure "A" to these terms of settlement, the money paid by such person to the first respondent or to Fairmat Finance Co., such refund to be made within 21 days cf the receipt by the first respondent of the said document. provide the applicant within 28 days with a list of the persons who have paid money to the first respondent or to Fairmat Finance Co. in respect of an interest in the said land. provide the applicant on or before ist Gay of December 1977 with a list of persons responding to the said letter and a statement of the steos taken with regard to each. bee oe Ie, ee ve tente at Klatetae tuner ee ee ne item ee vue ee ee ey eeu dhe ote emt ai remmereomaa abi we te es CE co ee ee me hte Se te ae Leases Ls IN THE FEDERAL COURT OF AUS' W2ATIz" GENPRAL DIVISION NEW SOUTH WALFS DISTRICT KFEGISTRY No. G-44 of 1977 IN THE MATTRR OF the Trade Pracrices Act 1974 BETWEEN: TRADE PRACTICES COMMISSION Applicanc AND: C.G.EMITH PEV. LIMITED First Respondent IAN FAIRWPATHER Second Resco" ROGDR GREGORY MATSCN (alsa known as F.Gilbert) Third Respongy* TERMS OF SETTLEMENT Alan R. Neaves, Crown Solicitor for the Commonwealth and solicitor for the Aonlicant P.O.Box 1532, CANBFRRA CITY. A.C.T. 2401 Telephone: 4381345 (S.7T-.D. 962) onan ten net we pe ee ame ener whose address for service is: 5th Floor, 119 Phillip Street, wary SYDNEY. N.6.W. 2000 Le Jul 7 Z4 z i ' = I Fer nal Lamar) een were Wore ot ateaneuinananenaal