New South Wales Supreme Court CITATION : Bydand Holdings Pty Limited v Pineland Property Holdings Pty Limited & Ors [2009] NSWSC 584 HEARING DATE(S) : 19/06/09 JUDGMENT DATE : 26 June 2009 JURISDICTION : Equity Division Commercial List JUDGMENT OF : Einstein J DECISION : See paragraph 55 - 59. CATCHWORDS : Practice and procedure - Contempt of Court - Failure to comply with undertaking to the Court Crimes (Sentencing Procedure) Act 1999 LEGISLATION CITED : Sentencing Act 1989 Supreme Court Rules 1970 CATEGORY : Procedural and other rulings Attorney-General (NSW) v Whiley (1993) 31 NSWLR 314 Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 Australian Securities and Investments Commission v Michalik and others [2004] NSWSC 1259; (2004) 52 ACSR 115. Australian Securities and Investments Commission v Michalik and others (No 2) [2004] NSWSC 1260; (2004) 62 NSWLR 335 Director of Public Prosecutions v John Fairfax& Sons Ltd (1987) 8 NSWLR 732 NCR Australia Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118 Principal Registrar of the Supreme Court of New South Wales v Jando (2001) 53 NSWLR 527 CASES CITED : Registrar of the Court of Appeal v Maniam [No 2] (1992) 26 NSWLR 309 R v Dunbabin; Ex parte Williams (1935) 53 CLR 434 R v Olbrich (1999) 199 CLR 270 R v Storey [1998] 1 VR 359 Ryan v Wright (No 2) [2004] NSWSC 1019 Smith v The Queen (1991) 25 NSWLR 1 Von Doussa v Owens (No 3) (1982) 31 SASR 116 Witham v Holloway (1995) 183 CLR 525 Wright v Ryan [2005] NSWCA 368 Bydand Holdings Pty Limited (Plaintiff) PARTIES : Pineland Property Holdings (First Defendant) Knight Frank Australia Pty Limited (Second Defendant) Vincent Pang (Third Defendant) FILE NUMBER(S) : SC 50058/08 COUNSEL : Mr LF Kelly SC, Mr P Russell (Plaintiff) Mr C Birch SC, Mr A Cassels (Third Defendant) SOLICITORS : Barringer Leather Lawyers (Plaintiff) Maxim Legal Pty Limited (Third Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION COMMERCIAL LIST Einstein J Friday 26 June 2009 50058/08 Bydand Holdings Pty Limited v Pineland Properties Pty limited & Ors JUDGMENT The notice of motion 1 There is before the Court a notice of motion filed by the plaintiff [Bydand Holdings Pty Ltd] on 16 April 2009 seeking inter alia the following orders: i. That the third defendant [Mr Vincent Pang] be found guilty of contempt of Court for his breach or breaches of an undertaking to the Court, dated 14 August 2008 and signed by the third defendant, given by the third defendant to the Court on 15 August 2008, as charged in the statement of charge filed with this notice of motion; ii. That the third defendant be punished for contempt of Court by committal to prison or fine or both. 2 The particulars of charge as follows: The third defendant is guilty of contempt of Court in that: (a) On 15 August 2008, the third defendant gave to this honourable Court in these proceedings an Undertaking to the Court ("the Undertaking"), dated 14 August 2008 and signed by the third defendant, to provide to the plaintiff's legal representatives 14 days notice of any intention of disposing of, encumbering or in any way dealing with property ("the Burwood property") located at Burwood comprised in folio identifier 1/325701 until further order of the Court; [It is appropriate to note that the property in question was known as 12 George St Burwood] (b) On about 16 March 2009, the third defendant, as vendor, entered into a written contract ("the Burwood property contract") with Lexus Property Holdings Pty Ltd ACN 135 697 031 (acting in trust for Tower Prohol Unit Trust), as purchaser, for the sale of the Burwood property. (c) By entering into the Burwood property contract, the third defendant has disposed of the Burwood property; (d) Further or alternatively to paragraph (c), by entering into the Burwood property contract, the third defendant has dealt with the Burwood property; and (e) In breach of the Undertaking, the third defendant did not provide to the plaintiff's legal representatives 14 days notice of his intention of disposing of and/or dealing with the Burwood property. The course taken in terms of the hearing of the notice of motion 3 Following senior counsel appearing for Mr Pang having taken a preliminary point as to whether the charge against Mr Pang could be made out: i. the Court heard argument on the preliminary point; ii. the Court then ruled against the preliminary point; iii. Mr Pang's senior counsel then accepted on behalf of his client, that there had been a breach of the undertaking and sought to lead evidence [principally in the form of an extensive affidavit made by Mr Pang] the purpose of which approach was in suggested mitigation of any order that the Court might make. 4 Aside from reading certain affidavits, Mr Kelly of senior counsel appearing for the plaintiff cross-examined Mr Pang. 5 It follows that a deal of the detail concerning the sundry purchases of real property and other financial arrangements to which Mr Pang had deposed were not the subject of any disputed contention before the Court. Notwithstanding that circumstance it is still appropriate as a matter background to note some parameters relevant to the earlier history. The proceedings 6 The proceedings were commenced by summons filed on 15 April 2008, and concerned the plaintiff's claim for declaratory and other relief, including a claim for damages, in respect of the plaintiffs termination on 26 March 2008 of a contract for the sale of land in Walker Street North Sydney, entered into between the plaintiff as vendor and the first defendant as purchaser. At that stage Mr Pang had not been joined as a party. 7 A judgment was entered on 16 October 2008 and declarations were made that the plaintiff had validly terminated the written contract. The joinder of Mr Pang 8 At the same time an order was made joining Mr Pang as a defendant and requiring that he serve a Commercial List response on or before 8 August 2008. The amended summons filed on 16 July 2008 now sought relief against Mr Pang as follows: i. A declaration that in the events that have occurred, the third defendant, as Guarantor, is bound by the Deed of Guarantee and Indemnity annexed to the first defendant's counterpart of the contract, executed by the third defendant and delivered to the plaintiff on or about 20 June 2007; alternatively, ii. a declaration that on or about 20 June 2007, the third defendant, as guarantor, entered into a valid and binding agreement with the plaintiff, as vendor will, by which the third defendant guaranteed to and otherwise indemnified the plaintiff for all in respect of the performance by the first defendant of its obligations under the contract, on terms more fully set out in the Guarantee deed. Mr Pang's background 9 Mr Pang gave the following evidence in his affidavit: 3. I hold a Bachelor of Applied Science (Land Economics) from the University of Technology Sydney, a Masters of facility Management from the University of Technology Sydney and a Masters of Project Management from the University of Sydney. 4. From 1992 to 1994, I was a member of the Sydney University Academic Board, a member of the Deputy Vice-Chancellor's Committee of the Sydney University, a director of the Sydney University Union, a director of the Sydney University Staff Club and councillor of the Sydney University Post Graduate Association. 5. In or about 1997, I became an Associate Member of the Australian Property Institute as a Certified Practising Valuer. 6. From 2001 to 2004, I was a voluntary charity worker in Community Aid Abroad – Oxfam Australia. From 2003 to 2008, I was a volunteer at the Westmead Medical Research Foundation. From 2003 to 2008, I was a member of World Vision and I sponsored three children in Vietnam, Ethiopia and China. I am currently a volunteer for the Australian Chinese Community Association. 10 Mr Pang was a director of a number of companies including Portland Property Holdings Pty Ltd, Oakland Property Holdings Pty Ltd, Gumland Property Holding Pty Ltd, Pineland Property Holdings Pty Ltd. 11 From 1998 to 2005, Colonial First State Investment Commercial Mortgage Lending advanced $11 million to Portland to acquire properties situated at 7 Deane St Burwood, 9 Deane St Burwood, 1 Marmaduke St Burwood, and 3 Marmaduke St Burwood. 12 In each case Mr Pang was the guarantor for the $11,000,000 advanced to Portland. 13 The evidence is that Portland owned the above properties as well as 8 George St Burwood, all of which properties were located on the same block of land in Burwood. 14 The further evidence is that from 2003 to about 2007, Colonial advanced a total of $50,000,000 to Oakland to acquire various properties. Mr Pang was also a guarantor of the $50,000,000 advanced to Oakland. 15 The evidence is that in or around 2005, HSBC lent Mr Pang $750,400 to purchase 12 George St Burwood for $965, 000. 16 The evidence is that in 2006, Citibank advanced $504,000 to Portland to acquire 8 George St Burwood for $965,000 and that Mr Pang was also the guarantor for that loan. Returning to the undertaking 17 On 15 August 2008, Mr Pang gave to the Court the above-described undertaking dated 14 August 2008 and signed by him. On that occasion Mr Pang was represented in Court by Mr A Cassels of counsel. 18 The undertaking was in the following terms: I Vincent Pang, the third defendant in the above proceedings… hereby undertake to the Supreme Court of New South Wales to provide to the plaintiff's legal representatives, 14 days notice of any intention of disposing all encumbering, or in any way dealing with the property located at Burwood comprised in Folio identifier 1/325701 until further order of the Court. The Burwood property referred to is located at and known as 12 George St Burwood. 19 On approximately 19 January 2009, the plaintiff's solicitors sent by post a demand to Mr Pang that he pay the plaintiff the sum of $3,650,692.11 pursuant to a guarantee deed said to have been executed by Mr Pang. 20 On 27 March 2009 pursuant to directions made by the Court that day, the plaintiff filed a further amended summons and further amended list statement. 21 By facsimile dated 26 May 2009 [noting the mistake in that the letter had been incorrectly dated 2008] the solicitors for the first and third defendants notified the plaintiff's solicitors into alia as follows: We note that on or about 15 August 2008, outlined provided an undertaking to the Supreme Court. We are instructed that by agreement dated 16 March 2009, outlined agreed to sell the Burwood property to Lexis Property Holdings Pty Ltd We propose our client enter into a new regime of undertakings to the Supreme Court to ensure your client's interests are adequately protected. Our client irrevocably directs Lexis Property Holdings to pay the proceeds from the sale of that property to the Registrar of the Supreme Court or into a nominated controlled moneys account. 22 The plaintiff's solicitors then sought information as to when Mr Pang appointed agents to sell the Burwood property, as to how much debt was secured against the property as at 15 August 2008 and as to what debt was secured against the property as at 27 March 2009. 23 That communication was responded to by the solicitors for Mr Pang who enclosed a copy of the contract front page recording the purchase price at $800,000. They further advised that the property was encumbered by way of Mortgage in the sum of approximately $770,000.00. They further advised that the loan amount was about the same from 15 August 2008. In the same letter Mr Pang's solicitors advised that he consented to the lodgment of a caveat over the Burwood property. The explanation for having breached the Courts orders 24 In his affidavit of 2 June 2009 Mr Pang gives evidence that in February 2008 his father was diagnosed with cancer and subsequently was treated with chemotherapy and underwent two major brain and lung operations. He also deposes that during February 2008 up to September 2008, he had travelled at least three times to Hong Kong to look to look after his father and family. He deposes that the deterioration of his father's health caused a lot of stress and emotional pain for him and his family. 25 Mr Pang further sets out the detail of the precise events which occurred up to the moment in time when he contends that he realised that he had breached the terms of his undertaking in a series of paragraphs of his affidavit. Without presently dealing with the credit parameters, it may be noted that in his affidavit he generally deposed as follows: i. In early April 2008 Colonial were demanding that Oakland make an amortisation payment of $4,000,000, re-pay in full cross collateralised loan facilities; pay a mandatory principal payment of over $6 million and pay a mandatory principal payment of over $5 million. ii. Mr Pang was unable to comply with Colonial's demands as he was unable to refinance the properties because of the impact the global financial crisis was having on the availability of credit. iii. He continued to seek extensions from Colonial of time to repay the loan facility but in April 2008 was advised by a lending manager from Colonial that he either sell all of his assets or face the mortgagee entering into possession of the property. iv. He continued to receive letters from Colonial and through those letters and all these conversations with the lending managers he was given to understand that he needed to sell his assets to avoid going into liquidation. v. As a consequence of what he had been told by Colonial in about July he instructed real estate agents to place certain properties for sale as off market properties and that on his instructions a number of the properties at Burwood were put up for sale as of market properties. He had been advised that the market was 'terrible' and that the agents would obtain the best price they could for him. vi. In mid-July 2008 a firm of solicitors acting for Colonial and Perpetual Nominees advised Mr Pang 's solicitors that due to his company's failures to comply with the revised loan requirements, all of the loan facilities were in default and that their clients would be taking advice as to what action to take to enforce these security resulting from such default. vii. It was at about this time that Mr Pang recalls a demand having been made by the plaintiff solicitors for him to give an undertaking to the Court regarding 12 George St Burwood. His evidence is that on 14 August 2008 he attended the office of his solicitors in order to sign the undertaking which was handed to him to read. His evidence is that he quickly read the documents and signed it. His evidence is that by reading the document quickly, he believed that he had to give notice to the plaintiffs within 14 days of disposing of the property. viii. On 15 September 2008 he received a letter from the solicitors for Perpetual attaching a section 92 notice concerning a number of the properties. In September 2008 his wife and his separated. His evidence is that the pressure that he was receiving from Colonial to repay all the loan facilities was a significant factor in the marriage breakdown. ix. His father passed away in October 08. Since then his mother's health had also deteriorated significantly. x. In about December 2008 contracts were exchanged for 9 Deane St Burwood. xi. In about December 2008 the estate agents received an offer for the properties at 8 and 12 George St Burwood. xii. At about this time the Chief Commissioner of State revenue applied to the Supreme Court to wind up Oakland in respect of which an official liquidator was appointed by the Court. xiii. In about December 2008 he was advised by the real estate agents that they had a buyer for both properties at 8 and 12 George St Burwood. xiv. On 16 March he signed the contract for the sale of 12 George St Burwood and at the time that he signed the contract, he contends that it was his belief that he had 14 days from that date within which to advise the plaintiffs of the sale. At that time he intended to notify the other side within that period. xv. It was only on or about 25 March 2009 that he had a conversation with his solicitor concerning 12 George St Burwood, she asking whether he knew if anything had happened to that property and he replying that the contract had been exchanged and that they should give notice to the other side before the 13 days notice was up. His solicitor pointed out that he should have given 14 days notice in advance and not after he had exchanged contracts. He asked her to remedy the situation as best she could and to make clear to the plaintiff that they had exchanged contracts and would provide all of the proceeds of sale from 12 George St. xvi. On his evidence it was on 26 March 2009 when his solicitors notified the plaintiff solicitors that 12 George St Burwood was under contract. It was that moment in time that he realised that he had breached the terms of his undertaking to the Court. xvii. His evidence was that prior to his conversation with his solicitor, it is his belief, based on his quick reading of the document that he had had 14 days in which to give notice to the other side. xviii. He now sees from reading the undertaking that the notice was to be given at least 14 days in advance and acknowledges that he was careless and reckless in not reading the document properly. 26 His evidence is that he was and is still very concerned and worried about the consequences of breaching the undertaking 27 His affidavit concludes in the following fashion: 56. On or about 16 April 2009, Ms Tong informed me that the plaintiff had filed an application for contempt in the Supreme Court seeking an order that I be punished for the contempt by committal to prison. I am very upset and very worried about the plaintiff's application and the statement of charge filed in the Court. I realise that by not reading the undertaking properly and forming an erroneous belief about my obligations I was careless and reckless. I attribute part of my carelessness to my preoccupation at that time of the following matters: a. Colonial's demands to repay all loan facilities; and b. the pressure I was receiving from Colonial's managers to sell my properties or face liquidation of my companies and financial ruin. 57. I will give any undertaking asked of me to ensure the net proceeds from 12 George Street, Burwood are paid into a controlled monies account for the plaintiff. I am prepared to irrevocably direct that the purchaser of 12 George Street, Burwood to pay the net proceeds into a controlled monies account. I am willing, to consent to any caveat that the plaintiff may ask me to consent to concerning 12 George Street, Burwood. 58. On about 16 April 2009, I told my wife about the contempt proceedings against me and she said to me words to the effect: "Vincent you have put your wife and your children into doom". 59. I believe this was the last straw for her and I hold little hope of reconciliation with her. She does not speak to me however, she allows me to speak to my children on the phone. 60. Since I became aware of the plaintiff's application for contempt and the possible consequences of that application in addition to the impending litigation I am currently facing, each day has been a battle of survival for me. My health has deteriorated and I suffer regularly from asthma attacks. I administer Ventolin and Seretide every six hours to suppress the attacks. I am truly sorry for breaching my undertaking to the Court by failing to give 14 days notice of any intention to deal with 12 George Street, Burwood to the plaintiff's solicitors. I apologise for committing civil contempt towards this Court and I accept any penalty this Honourable Court imposes upon me as a consequence of my failure to give notice in advance to the plaintiff's solicitor. Assessing Mr Pang's credit 28 Mr Pang was an extraordinarily unsatisfactory witness i. His evidence that at the time he read the undertaking he believed he had to give notice to the other side within 14 days of disposing the subject property is rejected. ii. In paragraph 48 of his affidavit (when dealing with the exchange of contracts on 16 May 2009) he had deposed that at that time, there was approximately $57,000 in equity in 12 George St Burwood. iii. His cross-examination included the following: Q. So do you mean his Honour to understand by that that when you sold 12 George Street, Burwood once you looked at the debt on the property as against the sale price there was only a balance of $57,000 left for you? A. That's correct. Q. And nothing else? A. Nothing else. Q. No other benefit that would flow to you from the sale of that property? A. No. Q. Is that your evidence on oath? A. Yes. Q. Was it a sale at arm's length? A. Yes. Q. To a third party? A. Yes. Q. Not anyone you knew? A. We got a valuation done on the property. Q. …Was it a sale to anyone you knew? A. The sale is through the agent. … Q. …you said before [it] was a sale at arm's length? A. Sale, yes I believe so. Yes. Q. And to a third party? A. Yes. Q. Not someone you knew? A. Someone I knew? No. …. His Honour Q. The question was whether or not the buyer was known to you? A. The buyer is a newly formed company what I know so it's not known to me but the people who handled the sales is known to me, is Brent Roozendaal. Mr Kelly Q. That is the agent who handled the sale? A. That's correct. But the company is a new company, of course I don't know the new company . Q. And you don't know anyone involved in the new company ? A. No, not at all . [emphasis added] The Joint Venture Agreement 29 Nowhere in his lengthy affidavit had there been any mention made of the fact that an important joint-venture agreement had been entered into on 16 May 2009 between a number of companies namely: Floreat Park Holdings Pty Ltd; Lexus Property Holdings Pty Ltd [a company of which Mr Pang was the sole director and sole shareholder but which was apparently a trust company]; Portland Property Holdings Pty Ltd; Brent Roozendaal. 30 Recital (B) recorded that Mr Pang [referred to as Vincent] was the registered proprietor of the property known as 12 George St Burwood and recital (D) recorded that Lexus had agreed to acquire Numbers 8 and 12 George St Burwood from Mr Pang 31 Recital G recorded that Floreat and Lexus desired to enter into the agreement in order to fix and define between themselves and their respective interests and liabilities in connection with the operation of the joint-venture and for the purpose of carrying out the redevelopment 32 Clauses 2.1 - 2.3 were in the following terms: 2. (1) Floreat and Lexus associate themselves together as joint venturers and form a joint venture to be known as Kimberly JV for the sole purpose of carrying out the Redevelopment. (2) The Joint Venture shall be deemed to have commenced on the Commencement date and shall continue until the sale of the Redevelopment and the distribution of the net sale profits to the joint venturers and shall be a venture restricted to the Redevelopment and the carrying on that business and nothing in this Agreement or otherwise shall be construed as constituting any joint venturer, a partner or agent or representative of any party hereto or to create any trust or partnership between or amongst the joint venturers. (3) The obligations of the joint venturers in relation to the Redevelopment under this Agreement shall be several and not joint or joint and several. 33 Certain conditions precedent to be found in clause 3 (1) made the agreement conditional on and subject to the following occurring on or before the execution of the agreement: (a) Exchange of contracts; and (b) Grant of a Put Option by Floreat to Lexus or its nominee 34 The conditions subsequent to be found in clause 4 (1) include the agreement being conditional on the following matters occurring on or before the Final Date [defined as three years]: (a) Transfer of the properties by Portland to Floreat; (b) Completion of the purchase by Lexis from Portland and Mr Pang of 8 George St Burwood and 12 George St Burwood. 35 In his further cross examination Mr Pang was shown schedule 5 of the joint-venture agreement which recorded the proportions of ownership and entitlements for profits and losses of the joint-venture and contribution for costs of the joint-venture as follows: Floreat 77.5% Lexus : 22.5% 36 The further cross examination included the following concessions: Q. So the idea was that your company, Floriat, that you controlled, and Lexis were to enter into a development of a number of properties, including 12 George Street. That's correct? A. That's correct. Q. And Floriat, your company, was to share in any profits to the extent of 77.5%? A. That's correct. … Q. That's still the position today? A. I believe so, yes. Q. So do you think …paragraph 48 of your affidavit in light of that joint venture agreement is true? A. Yes. Q. What you meant in paragraph 48 was for his Honour to believe that when you sold 12 George Street to Lexis Properties, all that was left for you personally was $57,000? A. Yes. Q. You didn't tell the Court in this affidavit that you had entered into, through a company that you controlled, a joint venture agreement which would involve developing that very block of land with other blocks? A. Yes. Q. Now, that's dishonest, can I put to you, Mr Pang? A. Yes. 37 The point about the put option was that it made clear that Floriat, in circumstances where the put option was triggered, was obliged to buy back 12 George St at $800,000; hence one effect of the joint-venture agreement [in the event that a termination provisions were activated] was that the property would not come back to Mr Pang personally; it would come back to his company 38 Clearly the inference appropriate to be drawn is that this was a sophisticated well thought out joint-venture agreement which must have required some considerable time and thought. 39 This cross-examination and the failure of Mr Pang to include any reference in his extensive affidavit to the above described joint-venture, casts very considerable doubt on the reliability of the evidence of Mr Pang in relation to any aspect of his explanations as to his state of mind at the time he signed the undertaking to the Court. And even more particularly, the failure to give truthful answers under cross examination and the general circumstances of the joint-venture agreement having been entered into, suggest that Mr Pang sought to mislead the Court in a situation where a full and appropriate explanation of the circumstances was extremely important. 40 These reasons have already made clear that his evidence that at the time he read the undertaking he believed he had to give notice to the other side within 14 days of disposing the subject property is rejected. 41 In cross-examination senior counsel appearing for the plaintiff put to Mr Pang that he had a motive for breaching his undertaking to the Court in that he did not wish to tell the plaintiff about the transaction before the sale of number 12 George St, because he did not want anyone to know that he had this joint-venture agreement on foot that would involve potential profits coming to his company, Floriat. 42 Later in his cross-examination Mr Pang accepted that the sale of 12 George St was not an arms length sale but was the best deal which he could get at the time. He was then asked why he had informed the Court early in his cross-examination that the sale was an arms length sale and his evidence was that he had made a mistake. 43 It was put to Mr Pang that he had deliberately breached the undertaking and had done so because he did not want the plaintiff or others to know about his dealings in relation to the joint-venture agreement. 44 The following was also put to him [ [Transcript 44]: Q. Mr Pang, I put it to you that (sic) not just a breach of your undertaking but the manner in which your affidavit has been prepared shows a cavalier disregard for the Court's authority? A. I don't believe so. If myself has - everything is true on the affidavits. You may think this deed has any value but the deed is absolutely have no value because when you look at the joint venture it basically say if I'm not happy you take back the property at the same prices, what is the gain to me at all, there's no gain to me. The importance of compliance with the Court's order 45 There is of course tremendous importance attached to securing compliance of an undertaking to the Court. In punishing for contempt the Court is vindicating the Court's authority itself. A consideration of the Court's general jurisdiction to find a person guilty of contempt of Court 46 In Registrar of the Court of Appeal v Maniam [No 2] (1992) 26 NSWLR 309 Kirby P (as he then was) said this: "A conviction of contempt of Court is a conviction of an offence, criminal in nature. Punishment of the convicted contemnor must therefore take into account the considerations normally applicable to the punishment of crime and apt to uphold the purpose of this jurisdiction, viz, the undisturbed and orderly administration of justice in the Courts according to law. Thus, in determining the punishment which is apt to the circumstances which have led to a conviction of contempt, it is appropriate to bear in mind the purposes of punishing the contemnor; deterring the contemnor and others in the future from committing like contempts; and denouncing the conduct concerned in an approximately emphatic way: see Director of Public Prosecutions v John Fairfax& Sons Ltd (1987) 8 NSWLR 732 at 741. In this jurisdiction, contempt is a common law offence for which there is therefore no maximum penalty in this Court: R v Dunbabin; Ex parte Williams (1935) 53 CLR 434 at 442. Any limits which are imposed upon the Court's powers derive from the purposes stated above and the limitations expressed in the Tenth Article of the Bill of Rights 1688 which restrains the imposition of cruel or unusual punishments or "excessive fines": see Smith v The Queen (1991) 25 NSWLR 1, noted (1991) 65 ALJ 695" (at 314). 47 More recently Campbell J in NCR Australia Pty Ltd v Credit Connection Pty Ltd [2005] NSWSC 1118 had occasion to examine a number of parameters concerning inter alia the range of possible types of penalty and the standard of proof: "The Range of Possible Types of Penalty 20 Part 55 rule 13 Supreme Court Rules 1970 provides: (1) Where the contemnor is not a corporation, the Court may punish contempt by committal to a correctional centre or fine or both. … (3) The Court may make an order for punishment on terms, including a suspension of punishment or a suspension of punishment in case the contemnor gives security in such manner and in such sum as the Court may approve for good behaviour and performs the terms of the security." The provisions of Part 55 rule 13 declare the Court's inherent power to punish for contempt but do not exhaust it: Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309. 21 The expression "contempt of Court" covers a family of different types of legal wrong, all of which have an element in them of interfering with the administration of justice in the Courts. Some types of contempt of Court, such as interfering with witnesses, have always been recognised as crimes. Others, such as disobedience to Court orders made in civil proceedings, are not in themselves criminal, though some aspects of the criminal law can become applicable to them. That Part 55 rule 13 confers on the Court a power to punish contempt by imprisonment does not determine the question of whether it would be in accordance with principle to impose a sentence of imprisonment for the particular type of contempt arising from disobedience to Court orders made in civil proceedings. 22 One strand in the historical development of the power of the equity Court to punish for a disobedience of its orders has been to impose a sentence of imprisonment of indefinite duration, as a means of persuading the person bound by the order to comply with it. That justification for imprisonment is not available in the present case, where the Mareva order has been broken in ways which are incapable of remedy. 23 The history of the law of contempt concerning breach of orders in civil proceedings shows a fitful recognition of another strand, whereby punishment can be imposed even in relation to breaches of order which are incapable of remedy. Since the decisions of the High Court in Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 and Witham v Holloway (1995) 183 CLR 525 it has been clear that punishment can be imposed for a breach of order made in civil proceedings even if the breach is incapable of remedy. The justification for the punishment in those circumstances is that it is a means of vindicating the Court's authority. In particular, imprisonment has been imposed as a sanction for breach of Mareva orders: Australian Securities and Investments Commission v Michalik and others [2004] NSWSC 1259; (2004) 52 ACSR 115. As Palmer J said in Australian Securities and Investments Commission v Michalik and others [2004] NSWSC 1259; (2004) 52 ACSR 115 at [32]: "… in punishing a contempt, a Court of equity acts no differently from a Court of common law. The distinction between common law and equity in this context is meaningless. In punishing for contempt, a judge of the Supreme Court is vindicating the authority of the Court itself, regardless of the Division in which the judge happens to be sitting." 24 Punishment of someone for contempt should take into account the same principles as are applicable to punishment for crime: Registrar of the Court of Appeal v Maniam (No 2) (1992) 26 NSWLR 309 at 314. That includes the sentencing principles contained in the Crimes (Sentencing Procedure) Act 1999 : A-G for NSW v Whiley (1993) 31 NSWLR 314 at 321 (in relation to its predecessor, the Sentencing Act 1989 ); Principal Registrar of the Supreme Court of New South Wales v Jando (2001) 53 NSWLR 527 at 536–537; Ryan v Wright (No 2) [2004] NSWSC 1019 at [18] per Gzell J; Australian Securities and Investments Commission v Michalik and others (No 2) [2004] NSWSC 1260; (2004) 62 NSWLR 335 at 343, [38]. (An appeal relating to Ryan v Wright (No.2) was taken, but on guilt, not penalty, and was dismissed: Wright v Ryan [2005] NSWCA 368.) 25 In principle, a contempt of Court could be punished by anything within the range of penalties that can be imposed for a crime, pursuant to the Crimes (Sentencing Procedure) Act 1999 . That range consists of imprisonment (section 5) periodic detention (section 6), home detention, (section 7) community service orders (section 8) good behaviour bonds (section 9), dismissal of the charge accompanied by either a good behaviour bond or a condition that the offender participate in an intervention programme (section 10), deferral of sentence (section 11), suspended sentence (section 12), fine (section 14), or the making of a non association or a place restriction order (section 17A). 26 Sections 6 and 7 make clear that penalties of periodic detention, and home detention, respectively, can be imposed only by " a Court that has sentenced an offender to imprisonment … ". Thus, if a sentence of imprisonment has not actually been imposed on a particular offender, it is not open to the Court to impose penalties of periodic detention or home detention on that offender. Standard of Proof of Facts Relevant to Sentence 27 When a Judge is finding facts for the purpose of a sentence concerning crime, a fact which will be used in a way which is detrimental to the offender must be proved beyond reasonable doubt, while a fact which will be used in a way which will be advantageous to the offender can be proved on the balance of probabilities: R v Olbrich (1999) 199 CLR 270 at 281, approving R v Storey [1998] 1 VR 359 at 369. In Witham v Holloway (1995) 183 CLR 525 the High Court held that a contempt could be found proved only if it was established beyond reasonable doubt. The reason was that the punitive nature of the proceedings brought with it the criminal standard of proof. Consistently with that principle, the standard of proof used in deciding factual matters for the purpose of imposing a sentence for contempt of Court should be the same as is used in imposing a sentence in criminal matters." 48 These observations are adopted in the approach taken to the current application. 49 Palmer J in Australian Securities and Investments Commission v Michalik [2004] NSWSC 1259 [noted by Campbell J] listed as appropriate factors for consideration the following matters: "i) the seriousness of the contempt proved; ii) whether the contemnor was aware of the consequences to himself of what he proposed to do; iii) the actual or potential consequences of the contempt on the proceedings in which the contempt was committed; iv) whether the contempt was committed in the context of a proceeding alleging crime or conduct seriously prejudicial to the public interest: see, for example, Von Doussa v Owens (No 3) (1982) 31 SASR 116; v) the reason or motive for the contempt; vi) whether the contemnor has received, or sought to receive, a benefit or gain from the contempt; vii) whether there has been any expression of genuine contrition by the contemnor; viii) the character and antecedents of the contemnor; ix) what punishment is required to deter the contemnor and others of like mind from similar disobedience to the orders of the Court; x) what punishment is required to express the Court's denunciation of the contempt" Dealing with the matter 50 The contempt charge has been proven beyond reasonable doubt. 51 In my view Mr Pang's breach of the undertaking was a deliberate and contumacious one amounting to a very serious flouting of the Courts authority. 52 Mr Pang is a highly literate and educated person with extensive experience in business and in high value property transactions. He was able to cause entities of which he was a director to borrow in the order of $60,000,000 during 2007 and had personally guaranteed that amount. 53 His affidavit relied on to mitigate the effect of the contempt created a quite misleading impression that he had very limited equity left in the property at 12 George St which was all that would be left to him on a sale. Very significantly the affidavit entirely concealed the ongoing interest which he had in the land through his sole directorship and shareholding of Floreat. 54 Hence he provided a dishonest and incomplete affidavit. 55 I do not accept that his conduct demonstrates any genuine remorse or contrition. To the contrary the untruthfulness of his affidavit only compounds his disrespect for the Court's authority. The way forward 56 In all of the circumstances it is appropriate for the Court to closely consider whether an order for a custodial sentence should be made. At an appropriate time the matter will be before the Court for the purpose of permitting Mr Pang to address submissions in relation to this matter. Prior to that occasion it is appropriate to order that a probation and parole office pre sentence report be prepared. Orders 57 The Court orders that Mr Pang on or before 7 July 2009 attend at the Probation and Parole Office, 2 Help Street, Chatswood. 58 The Court orders that a pre sentence report be prepared by the Probation and Parole Office to be supplied to the Court by Thursday 20 August 2009. 59 The Court fixes Friday 11 September 2009 as the date for submissions on sentence. ************** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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