COURT
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Drummond J.(1)

CWDS
  Contempt of Court - submission of no case made out of alleged breach of
undertaking - proceedings instituted against parties and non-party - necessity
to show intent to prevent or impede purpose of undertaking being achieved when
proving contempt against non-party.
  Construction of undertaking - no ambiguity - ordinary not technical meaning
of words used.
  Proceedings dismissed against non-party only - different issues involved in
establishing contempt by parties as opposed to contempt by non-party.
  Practice and Procedure - contempt of court - no case submission - standard
of proof.
  Attorney General v Times Newspapers Ltd. (1991) 2 All ER 398
  Australasian Meat Industry Employees' Union v Mudginberri Station Pty. Ltd.
(1986) 161 CLR 98
  Australian Consolidated Press Limited v Morgan (1965) 112 CLR 483
  Concrete Constructions Pty. Ltd. v Plumbers and Gasfitters Employees' Union
of Australia (1987) 72 ALR 415
  GTS Freight Management Pty. Limited v Transport Workers Union of Australia
(1990) 25 FCR 296
  Re Kerrison; Ex parte Official Trustee in Bankruptcy (1990) 25 FCR 233
  Menzies v Australian Iron and Steel Ltd. (1952) SR (NSW) 62
  Sun Newspapers Pty. Ltd. v Brisbane TV Ltd. (1989) 92 ALR 535

HRNG
BRISBANE
#DATE 8:7:1992
  Counsel for the applicants:           F.W. Redmond
  Solicitors for the applicants:        Bennett and Philp
  Counsel for CCOM Pty. Ltd. and
Messrs Ronald Howard Thomas
and Allan Garnham:                      H.B. Fraser
  Solicitors for CCOM Pty. Ltd. and
Messrs Ronald Howard Thomas
and Allan Garnham:                      Kenny and Loel
  Counsel for Mr Peter Hackett:         P.H. Morrison QC and J.P. Kimmins
  Solicitors for Mr Peter Hackett:      Freehill Hollingdale and Page
  Counsel for Mr John McCullagh:        P.D. McMurdo QC
  Solicitors for Mr John McCullagh:     Morris Fletcher and Cross

ORDER
  THE COURT ORDERS THAT:
    1.      The notice of motion filed 2 March, 1992 is dismissed as
            against Mr McCullagh.
    2.      The applicants to the notice of motion filed 2 March, 1992
            pay Mr McCullagh's costs of and incidental to the contempt
            proceedings on the usual party and party basis.
    3.      The notice of motion filed 2 March, 1992 is adjourned for
            further hearing to Monday, 7 December, 1992.
    4.      The costs of today's directions hearing are costs in the
            cause.
  THE COURT DIRECTS THAT:
    1.      The first and second respondents file and serve their notice
            of motion (foreshadowed today) seeking variation of the
            order made by Drummond J on 14 May, 1992 in relation to the
            provision of further security, together with supporting
            affidavit material by 4.00 p.m. on Friday, 10 July, 1992.
   2.       Material in response to the notice of motion be filed and
            served by 4.00 p.m. on Tuesday, 14 July, 1992.
   3.       If the first and second respondents fail to comply with
            direction 2 herein, their cross-claim will be stayed.
   4.       The matter is adjourned for further directions to Mr
            Justice Cooper and the parties are to be informed of the
            time and date of that directions hearing.
Note:  Settlement and entry of orders is dealt with in Order 36 of the Federal
Court Rules.

JUDGE1
  By Notice of Motion the first, second, fourth and fifth respondents in the
action (whom I shall collectively refer to as "Jiejing") seek a determination
that CCOM Pty. Ltd. and Messrs. Thomas and Garnham, three other parties in the
action all of whom I will refer to as CCOM, are guilty of contempt in that
they failed to comply with an undertaking given by counsel on their behalf on
23 December 1991. Jiejing has sought a determination that two solicitors,
Messrs. Hackett and McCullagh, members of Stokes and Panettiere, the then
solicitors for CCOM, are also guilty of contempt by assisting their clients to
breach this undertaking.  For reasons which I gave at the time in the course
of the hearing I dismissed the application against Hackett with the consent of
Jiejing.
2.  The statement of charge particularised against CCOM alleges that they
committed a contempt in that by themselves and by their agents Hackett and
McCullagh, and in breach of the undertaking, they failed to delete from a
computer hard disk on a computer situated at the offices of Messrs. Stokes and
Panettiere copies of certain disks referred to in the said undertaking.  The
statement of charge as particularised against McCullagh alleges that he aided
and abetted CCOM in committing contempt of the Federal Court in that with
knowledge of the undertaking given on that day to the said court by CCOM to
delete copies of certain disks referred to in the said undertaking from a
computer hard disk on a computer situated at the offices of Messrs. Stokes and
Panettiere and as agent of CCOM for the purpose of carrying out the said
undertaking and in breach of the said undertaking he:
            (1)   failed and refused to delete the said copies; and
            (2)   thereafter, and until 28 December, 1991, failed and
                  refused to delete the said copies.
3.  The undertaking given on 23 December was, as directed, recorded in writing
and signed by the legal representatives of the parties.  It is exhibit "AMW1"
to Ms Warrens' affidavit.   The only part that is presently relevant is
paragraph A.  That paragraph provides:
        "A    The Applicant and Third Respondents by their Counsel
              undertake-
              (1)   To copy from the hard disk onto floppy disks,
                    all copies of the disks referred to below, which
                    were copied on 23 December 1991-
                    (i)         Chinese WP Master ARC 8.2.89 Backup
                                Set B;
                    (ii)        Final File Chinese 08.01.88;
                    (iii)       Fastword Backup 09.02.85;
                    (iv)        Chinese Program Backup 09.02.88;
                    (v)         Chinese WP Master ARC 8.2.89 Backup
                                Set A;
                    (vi)        Master DBF 7.2.89 1509;
                    (vii)       Master DBF 7.2.89 5100;
                    (viii)      Master DBF 7.2.89 10200.
              (2)   To retain the floppy disks and the floppy disk
                    copy of part of the disks referred to above made
                    earlier today in a sealed envelope until further
                    order;
              (3)   To delete the copies recorded on the hard disk;
              (4)   Save as set out above, not to make any further
                    copy or use of the disks."
4.  Counsel for CCOM and counsel for McCullagh each submit that the
undertaking recorded in paragraph A(3) of the exhibit is ambiguous in that it
is fairly open to two different interpretations.  On the authority of
Australian Consolidated Press Limited v Morgan (1965) 112 CLR 483, it is
submitted that there can therefore be no contempt.
5.  Morgan was a case in which there was uncertainty as to which of a number
of different meanings should be given to a phrase in an undertaking; see Owen
J at page 514.  His Honour did not attempt to identify what was the correct
construction of the undertaking, but said at pages 515 and 516, after
referring to the English decision of Redwing Ltd. v Redwing Forest Products
Ltd. (1947) 177 LT 387:
        "Jenkins J (in the Redwing case) refusing the application,
        said:  "I cannot say I think that the undertakings contained
        in the order were clearly drawn and I cannot say I regard
        the questions of construction involved in them as entirely
        easy questions, but in my judgment, a defendant cannot be
        committed for contempt on the ground that upon one of two
        possible constructions of an undertaking being given he has
        broken his undertaking.  For the purpose of relief of this
        character I think the undertaking must be clear and the
        breach must be clear beyond all question".
        With these statements of general principle I agree.  In my
        opinion the ambiguity of and lack of precision in the
        appellant's undertaking which, it should be remembered, was
        originally drawn by the respondents' solicitors in the
        District Court proceedings are such that a finding of
        contempt should not be made."
6.  Windeyer J, at page 506, agreed with the decision of Owen J.
7.  The other member of the court, Barwick C.J., at pages 491 and 492, took a
different approach.
8.  Although since the High Court's decision in Australasian Meat Industry
Employees' Union v Mudginberri Station Pty. Ltd. (1986) 161 CLR 98, Morgan is
no longer regarded as authority for all the propositions therein advanced, the
view of the majority as to the effect of an ambiguity in an undertaking, upon
the question of contempt where the undertaking is said to be breached is still
accepted as authoritative; see Concrete Constructions Pty. Ltd. v Plumbers and
Gasfitters Employees' Union of Australia (1987) 72 ALR 415 at 424.
9.  A difficulty with the respondents' submission is that it necessarily
requires me to deal as a threshold question with the interpretation of the
undertaking, and to do this only on such of the applicants' evidence as has
been held to be admissible.  For reasons which I gave in the course of the
hearing, I allowed each respondent to make a no-case submission at the close
of the applicants' case, without requiring any respondent to elect not to call
evidence.  I am therefore in the position of not knowing if I have before me
now all the evidence relevant to the interpretation of the undertaking which
might be tendered if the matter were to run its ordinary course, with each
respondent leading all the evidence on the topic that it wished.
10.  But having ruled that the respondents do not have to elect, I think I
must deal with their no-case submissions, even though this involves forming a
view on the construction of the undertaking now, which view might possibly be
altered if the submissions fail and the respondents lead evidence relevant to
the construction of the undertaking.
11.  I think that since the undertaking in paragraph A forms part of an agreed
set of mutual undertakings on the basis of which the parties further agreed to
ask that Jiejing's application to the court on 23 December 1991 be adjourned,
the rules governing the interpretation of contracts should be used as a guide
to the proper construction of this undertaking.  These rules are conveniently
summarised in chapters 2, 4, and 7 of Interpretation of Contracts by Lewison
(1989), and in paragraphs 867 to 875 of Chitty on Contracts (General
Principles) (26th edition, 1989).
12.  Prima facie the words used in the written agreement are to be understood
in their ordinary or popular sense in the search for the presumed intent of
the parties to the agreement.  However, few words have a single inflexible
ordinary meaning, so the context in which they are used, and evidence of the
background circumstances against which the agreement was made, which is always
admissible as an aid to interpreting a contract, are of paramount significance
in identifying the particular meaning to be adopted.
13.  The critical question of construction is whether "delete," in the context
of paragraph A(3) of the undertaking involves the notion of removing certain
information permanently, or the notion of removing that information for
practical purposes only.  The ordinary meaning of the word is capable of the
first connotation, while there is some evidence before me that indicates that
the word in technical computer jargon has the second connotation.
14.  I think the ordinary meaning of "delete" is to strike out. But the
context and background circumstances must always govern its precise
connotation in a contract.  For example, when words are to be deleted from a
document, the concern generally is to deal with the words in question so as to
clearly indicate that the deleted words are to cease thereafter to have any
operative effect:  the words will be deleted just as effectively whether they
are lined through, but still legible, or are erased completely.  When, in
contrast, a person has to delete not words from a document but a body of
information, such as an inaccurate entry in another's credit record, what may
very well be required is the permanent physical removal of the entry from the
record. The ordinary meaning of the word is capable of both these
connotations. I do not think this makes the word ambiguous.  Words are
ambiguous only when they have two or more primary meanings, each of which may
be adopted without distortion of the language.  "Delete" has, I think, only
one primary meaning:  "strike out."  But what will be required to be done to
give effect to that meaning will differ according to the context in which the
word is used.
15.  It is also well established that the context and the background evidence
may each require a word in common usage to be given a special or technical
meaning to better reflect the objective intent of the parties, and that
evidence is admissible to prove that both parties jointly intended to use the
word in a special sense.
16.  The primary submission for McCullagh was that the word "delete" in the
context of paragraph A(3) of the undertaking is ambiguous, in that it can have
its ordinary meaning, but also the established technical meaning that I have
referred to.  There is evidence in the cross-examination of Dr Yates that in
computer jargon the word "delete" generally means "delete logically, but not
delete physically" - that is, delete in the sense of remove information stored
on a computer disk, but only so as to make retrievability of the information
difficult unless special readily available programmes are used, as distinct
from removing the information permanently.
17.  But there is also affidavit evidence that Dr. Yates was concerned
immediately after the undertaking was given, and when it was being implemented
by Mr McCullagh on behalf of CCOM, that the contentious information should be
permanently removed from Stokes and Panettiere's hard disk - see paragraphs 37
and 39 of Ms Warren's affidavit.  There is no evidence at all as to what
CCOM's understanding of the term was when the undertaking was given; there is
no evidence that anyone other than the lawyers was involved on either side in
the framing of the undertakings. There is thus an absence of any evidentiary
foundation for the conclusion that both parties were using the word with the
technical meaning that Dr. Yates agreed it can bear in computer jargon.  I
therefore reject Mr McCullagh's primary submission.
18.  How is paragraph A(3) of the undertaking to be read?  The background
circumstances against which the undertakings were given, so far as they appear
in the limited evidence before me, are that in the course of inspection of
Jiejing's material in the action, CCOM, by its solicitors, including Mr
McCullagh, had, on 23 December 1991 copied onto the hard disk of the
solicitors' computer, and also onto a floppy disk belonging to those
solicitors, information recorded on certain of Jiejing's floppy disks, which
Jiejing contended, over the objections of CCOM's solicitors, was not
discoverable.  Jiejing and CCOM are competitors, and the contentious
information was regarded by Jiejing to be commercially sensitive, as CCOM well
knew.
19.  The dispute that arose as the result of this copying was temporarily
resolved by the parties who, later that same day on 23 December, agreed to
give to the court the undertakings and to adjourn for later determination the
application then made on behalf of Jiejing in respect of what it said was
CCOM's unauthorised copying of its private material.
20.  I think that construed against this background, the parties' intention as
set out in this undertaking, was that the contentious information was to be
put and was to remain completely out of the reach of CCOM, unless and until
the question of CCOM's disputed entitlement to that information was resolved
in CCOM's favour by later court order, with CCOM's disputed claim of
entitlement to this information being recognised, at least to the extent that
it was agreed by the parties, that a copy of the information would be held on
behalf of CCOM, in the meantime, in a sealed envelope by its solicitors.
21.  That mutual intention is, I think, reflected in the language of paragraph
A of the undertaking, if the words used in the paragraph, including A(3), are
read as having their ordinary meaning.
22.  Paragraph A(1) requires CCOM to copy the contentious information, which
had earlier been copied onto Stokes and Panettiere's hard disk from Jiejing's
disks listed at paragraph A(1)(i) to (viii) from that hard disk onto new
floppy disks.  Paragraph A(2) requires CCOM to place those new floppy disks
and the other floppy disk onto which CCOM had, prior to giving the undertaking
already copied part of the contentious information from the Jiejing disks, in
a sealed envelope to await resolution of its disputed claim to entitlement to
access to that contentious information.  Paragraph A(3) requires CCOM to
strike out the contentious information recorded on the Stokes and Panettiere
hard disk from that hard disk in such a way as will ensure that, pending
resolution of the dispute, CCOM will not have any access to that information.
That is, to completely remove that information from the hard disk.
23.  Paragraph A(4) fits into this scheme.  The draftsmen of paragraph A of
the undertaking have been completely consistent throughout that paragraph in
their use of the expressions "the hard disk" in paragraphs A(1) and (3) as
meaning the disk in the Stokes and Panettiere computer; "the floppy disks" in
paragraphs A(1) - (2), as meaning those disks onto which information on the
hard disk is required by the undertaking to be copied, and "the disks" in
paragraphs A(1), (2) and (4), as meaning the Jiejing disks listed in paragraph
A(1)(i) to (viii).
24.  Moreover, whenever in paragraph A the draftsmen refer to the Jiejing
disks, they are not, I think, referring to the disks as physical objects.
They are using the expression, "the disks", as shorthand for the contentious
information recorded on those disks.  Paragraphs A(1) and (2) do not make
sense unless the references therein to "the disks" are so read.
25.  If the phrase "the disks" in paragraph A(4) is read as meaning the
contentious information recorded on the Jiejing disks, as I think consistency
requires, that last paragraph serves a useful purpose in the scheme of the
undertaking.  Paragraph A(1) allows CCOM to make certain copies of that
contentious information, and paragraph A(4) declares that CCOM can make no
other copy of it.  Paragraphs A(2) and (3) allow and require CCOM to deal with
that information in certain specified ways, while paragraph A(4) declares that
CCOM must not deal with that information in any other way.
26.  The expression, "the disks", in paragraph A(4) cannot, I think, be a
reference to disks that include the hard disk.  That would be a departure from
the consistency and care with which expressions have been used in paragraphs
A(1) - (3), to identify precisely which disks are there being referred to; nor
can the parties have intended that after the steps required by paragraphs A(1)
and (3) had been carried out, Stokes and Panettiere's hard disk was not to be
further used.
27.  It was also argued on behalf of CCOM that no time being fixed in the
undertaking for compliance by CCOM with paragraph A, it therefore had a time
from 23 December, which was reasonable in all the circumstances, to do that.
It is common ground that CCOM, by its solicitors, had remedied all possible
non-compliances by 28 December, so it is submitted that Jiejing cannot
establish that the undertaking was ever breached.
28.  I think that the period allowed to CCOM to comply with the undertaking,
on its proper construction, was a very short one indeed, much shorter than a
period of several days.  I say that, having regard to the background, that the
giving of the undertaking arose out of a dispute over CCOM's right to copy and
have unrestricted access to commercially sensitive information belonging to
Jiejing, which was followed immediately by an urgent application to the court,
and I say that also in view of the fact that what CCOM had to do to comply
with paragraph A of the undertaking, could very easily be done immediately.
29.  CCOM was, in my view, required to implement paragraph A of the
undertaking long before 28 December.
30.  Another answer to this submission is that it is open to infer, firstly,
that CCOM's agents, the solicitors who were given responsibility for ensuring
compliance with CCOM's undertaking on its behalf, asserted on 23 December and
again on 24 December, that what Mr McCullagh had done on 23 December amounted
to full compliance by CCOM with the undertaking:  see paragraphs 39, 44 and 80
and exhibit "AMW3" to Ms Warren's affidavit, and, secondly, that it was only
the ventilation of the matter in the court on 27 December that caused CCOM, by
its solicitors, to take any further action at all.  Whether CCOM complied with
the undertaking therefore falls to be decided, by what was done on its behalf
on the afternoon of 23 December.
31.  On the interpretation which I think the undertaking in paragraph A(3)
bears, and given that the applicants' evidence is well able to permit of a
finding that the undertaking so construed was breached, it follows that the no
case submission on behalf of CCOM must also be rejected.
32.  The next question is whether on the assumption that paragraph A(3) of the
undertaking required CCOM to delete, in the sense of removing completely the
contentious information from the hard disk of the computer in Mr McCullagh's
office, and in view of the clear evidence that that was not done until after
28 December, that is, after that omission was raised in court on 27 December,
Mr McCullagh has a case to answer.
33.  His position is different from that of CCOM and Messrs. Thomas and
Garnham.  Unlike Mr McCullagh, the latter are all parties to the action and
are in terms bound by the undertaking.  They having given the undertaking to
the court, all that has to be proved to show that they are guilty of contempt
is that there was a failure - and the reasons why are immaterial - for that
undertaking to be carried into effect.  Their liability for contempt is
strict, although the intention with which the omission was made will be very
relevant to the question of penalty if any:  see Attorney General v Times
Newspapers Ltd. (1991) 2 All ER 398 at 414 to 415.
34.  Mr McCullagh however is not a party to the action and is not bound by the
undertaking.  Such a person is not subject to the strict liability in contempt
which rests upon a person bound by an undertaking that is breached.  However a
person who is not in terms bound by an undertaking but who knows of it and who
then does something which disrupts the situation created by the undertaking
may, but not necessarily must, be guilty of contempt of court.
35.  Such a person will be guilty of contempt where his conduct, coupled with
his knowledge of the undertaking, shows that he is flouting the authority of
the court by doing something which he knows will prevent the undertaking given
to the court achieving its intended object.  Such a person will be in
contempt, because he has:  "knowingly impeded or interfered with the
administration of justice by the court in the action between A and B":  see
Attorney General v Times Newspapers Ltd. at page 405 per Lord Brandon.  See
also Seaward v Paterson (1897) 1 Ch 545 at 555 and Z Ltd. v A (1982) QB 558 at
578.
36.  In Attorney General v Times Newspapers Ltd., Lord Oliver, at page 419,
speaking of the circumstances in which a determination could be made that a
stranger to a court order which had been breached was guilty of contempt,
said:
            "... a more dependable guide is to be found in the way in
            which the gravamen of the offence is expressed in the
            respondent's case and which, I think must be based upon the
            speeches in this House in the Leveller Magazine case (1979)
            1 All ER 745, (1979) AC 440:  'The publication ...
            frustrates, thwarts, or subverts the purpose -
(and I interpolate that Lord Oliver emphasised that phrase) -
            of the court's order and thereby interferes with the due
            administration of justice in the particular action.'
            'Purpose', in this context, refers, of course, not to the
            litigant's purpose in obtaining the order or in fighting the
            action but to the purpose which, in seeking to administer
            justice between the parties in the particular litigation of
            which it had become seized, the court was intending to
            fulfil."
37.  I think the statement by Lord Oliver most clearly identifies the features
that must be present in the conduct of a stranger to an order of the court or
an undertaking given to the court before he can be found guilty of contempt
where the order or undertaking is breached.
38.  It will usually be clear from the wording of the order or undertaking
what was the purpose that the court was intending to fulfil in the course of
administering justice between the parties in the particular litigation, but
the present case is more complex.
39.  What must be proved to make out a contempt where, as here, a stranger to
the undertaking knows that it has been given in the action and does acts which
on the true construction of the undertaking prevent it achieving its object,
but which that stranger honestly believes on his own understanding of the
meaning of the undertaking did not interfere with its object or purpose?
40.  In Attorney General v Times Newspapers Ltd. Lord Oliver, in rejecting a
submission that because of the uncertainty which would otherwise arise in the
context of a criminal offence, the purpose of an order can only be gathered
from its terms, said at page 420:
            "Where there is room for genuine doubt about what the
            court's purpose is, then the party charged with contempt is
            likely to escape liability, not because of failure to prove
            the actus reus but for want of the necessary mens rea, for
            an intention to frustrate the purpose of the court would be
            difficult to establish if the purpose itself was not either
            known or obvious."
41.  There will be room for genuine doubt about what the court's purpose is if
the construction of an undertaking is not so clear as to admit of only one
interpretation, and the stranger accused of being in contempt by reason of
conduct that interferes with the operation of the undertaking, has acted in
accordance with any interpretation of the undertaking that is reasonably open
in a way which would involve no interference with its operation, as so
interpreted.  That is so, as Lord Oliver said, because there would be a want
of the necessary mens rea.
42.  And if a stranger, in fact, interferes with the operation of an
undertaking given in an action between A and B, but does so in the honest but
mistaken belief that the undertaking has a particular meaning which, if
correct, would mean that his conduct could not be an interference with this
operation, then there is equally a lack of the mens rea necessary to put him
in contempt.  This is so, in my view, no matter how unreasonable the
stranger's mistaken belief is, so long as it is a belief that is honestly
held.
43.  I think the standard of proof that the applicant has to meet is proof
beyond reasonable doubt.  Subsequent to the High Court decision in
Australasian Meat Industry Employees' Union v Mudginberri Station Pty. Ltd.,
Pincus J in Sun Newspapers Pty. Ltd. v Brisbane TV Ltd. (1989) 92 ALR 535 held
that the standard of proof of contempt constituted by breach of a court order
was proof beyond reasonable doubt.  Wilcox J in Concrete Constructions Pty.
Ltd. v Plumbers and Gasfitters Employees' Union (No. 2) (1987) 15 FCR 64 at
pages 83-84, expressed a strong preference for a similar view without,
however, finally deciding the matter.
44.  As against that, Keely J in GTS Freight Management Pty Limited v
Transport Workers Union of Australia (1990) 25 FCR 296 at page 301, in a
similar kind of case, after mentioning briefly the Mudginberri and the
Concrete Construction cases, said:
            "In the time available I have not been able to give this
            question as much consideration as is desirable, in the light
            of the High Court's decision in Mudginberri (supra).  In the
            circumstances I have decided that, in determining the
            motion, the civil standard of proof should be applied ...".
45.  O'Loughlin J in Re Kerrison; Ex parte Official Trustee in Bankruptcy
(1990) 25 FCR 233, after referring to the GTS Freight Management case,
referred to the particular nature of the proceedings before him, i.e., an
application in respect of alleged contempt constituted by the bankrupt's
failure to comply with s. 129(4) of the Bankruptcy Act 1966 (Cth), which by
virtue of s. 129(5) constitutes a contempt of court.
46.  His Honour went on to hold that the civil standard of proof, applied in
accordance with the statements in Briginshaw v Briginshaw (1938) 60 CLR 336,
rather than the criminal standard of proof was the appropriate standard in
relation to this "statutory form of contempt" as he described it.
47.  I think I should follow the recent decision of Pincus J supported by the
comments of Wilcox J in preference to the conclusion expressed briefly by
Keely J, in circumstances where he stated he had been unable to give full
consideration to the matter.  I do not think the decision of O'Loughlin J is
of direct relevance to the present problem.
48.  Since there is evidence to support a finding that Mr McCullagh's actions
were sufficient to amount to a contempt by him provided there is sufficient
proof that he had the requisite intent, the question now for decision comes
down to this: is there sufficient evidence to entitle the court to find beyond
reasonable doubt that Mr McCullagh intended to prevent or impede the purpose
of the undertaking, as I have identified it in what I have already said, from
being achieved?
49.  In answering this question I must assume that the applicants' evidence is
accepted in its entirety, I must draw all inferences favourable to the
applicants that are open on the evidence, and I must make my determination on
the basis of such evidence and inferences, ignoring all evidence and
inferences that can be drawn from the evidence favourable to Mr McCullagh:
see Trade Practices Commission v Allied Mills Industries Pty. Ltd. (No. 3),
(1981) 37 ALR 225 at 240, Hocking v Bell (1945) 71 CLR 430 at 442-443, and the
article by Mr Justice H.H. Glass, "The Insufficiency of Evidence to Raise a
Case to Answer" (1981) 55 ALJ 842 at 843.
50.  Such evidence as there is on the subject of Mr McCullagh's intent is
(subject to one qualification) all one way in pointing to him believing that
by carrying out the deletions described by Ms Warren in paragraphs 25 to 30,
35 and 40 to 43 of her affidavit, he had done all that was required on the
part of CCOM to comply with the undertaking, and in particular with paragraph
A(3).
51.  Ms Warren's evidence, in her affidavit at paragraph 39, shows that Mr
McCullagh was aware, on 23 December, that the deletion exercise he had carried
out did not completely remove the contentious information from his firm's
computer hard disk.  Better evidence at paragraphs 36 and 44 and in exhibit
"AMW3" shows that Mr McCullagh then took the position that he had done all
that was required, notwithstanding this.  There is no evidence before me to
indicate that Mr McCullagh did not honestly believe this.   The evidence of Mr
Owens, at paragraphs 29, 30 and 32 of his affidavit, points to Mr McCullagh
honestly having this belief.
52.  I do not think there is any significant inconsistency between what Mr
McCullagh had to say to Mr Owens in the course of the conversation on 27
December 1991 to the effect that he was unable personally to retrieve the
contentious information from the hard disk, and what he had to say about it
taking him an estimated 30 hours if he were to try to retrieve the
information, a point he repeated when he spoke to Dr Yates the next day.
53.  The qualification on the evidence I have mentioned is this: in paragraph
38 of Mr Owens' affidavit and 41 of Ms Warren's affidavit each reports what Mr
McCullagh said to them on separate occasions about his clients not being
permitted to use his firm's computer on 23 December.  It is true that these
two statements by Mr McCullagh are mutually inconsistent, but I do not think
that, even if all the other evidence I have referred to as to Mr McCullagh's
understanding of the undertaking is ignored, this particular inconsistency is
capable of supporting a conclusion adverse to him on the question of his
intent, even for present purposes:  it is, at best for Jiejing, an
inconsistency with respect to a matter entirely remote from the question of Mr
McCullagh's understanding of the import of the undertaking.  It is not
sufficient ground to require all the other evidence as to his state of mind to
be ignored.
54.  I therefore uphold the alternative submission advanced on behalf of Mr
McCullagh, that he has no case to answer.
55.  The applicants' final submission is that where one respondent is entitled
to succeed on its no case submission, but another respondent fails, the case
against the otherwise successful respondent should not be dismissed at that
stage, but only if there is still no case to answer by him at the close of any
evidence which may be led by the respondent against whom a case has been
found.
56.  The applicant relies on Menzies v Australian Iron and Steel Ltd. (1952)
52 SR (NSW) 62.  This decision was applied in Trade Practices Commission v
George Weston Foods Ltd. (No. 2) (1980) 43 FLR 55 at page 62, a case in which
pecuniary penalties were sought against a number of respondents for breaches
of s. 45 of the Trade Practices Act 1974 (Cth).  The point was, however, left
open by Sheppard J in Trade Practices Commission v Allied Mills Industries
Pty. Ltd. (No. 3) (1981) 37 ALR 225 at pages 231 and 254, a case which also
involved claims for pecuniary penalties under the Trade Practices Act.
57.  The Menzies case involved a claim against defendants sued as concurrent
tortfeasors who were:
            "... diametrically opposed in interest, each seeking to
            exculpate himself and to establish that the other defendant
            was the person solely responsible for the damage which has
            occurred."  (at page 64)
58.  Street C.J., in giving the judgment of the court, said:
            "Under those circumstances it would seem that the ordinary
            rule, applicable in the case of a single defendant, is not
            an appropriate rule to follow where two defendants opposed
            in interest are concerned, ..."  (at page 64)
59.  The practice which the applicants urge me to follow is clearly
appropriate in the sort of situation that arose in Menzies. However, I do not
think there is any justification for applying it to the present case where the
issues that have to be established to make out a case of contempt against CCOM
as persons bound by an undertaking, differ from those required to be made out
to establish a case of contempt against Mr McCullagh, a stranger to the
undertaking.
60.  The proper construction of the undertaking is, of course, relevant to the
cases made against both groups, but that is the only issue common to both.
Any evidence that CCOM might be expected to lead on the issue of the proper
interpretation of the undertaking could not strengthen, in my view, the case
against Mr McCullagh, so far as it depended upon that issue, but only weaken
it by going to show that paragraph A(3) of the undertaking imposed a less
onerous obligation on CCOM than that which I have concluded it does impose on
them.
61.  It is extremely unlikely that any evidence that CCOM might lead would go
to strengthen the applicants' case against Mr McCullagh on the other issue
concerning Mr McCullagh, that of his own state of mind.  CCOM and Mr McCullagh
are not in any relevant respect opposed in interest.
62.  I therefore propose to dismiss the case against Mr McCullagh at this
stage, but allow the case to proceed against CCOM and Messrs. Thomas and
Garnham.  I observe that in deciding to allow the case against CCOM and
Messrs. Thomas and Garnham to proceed, I take the view that the applicants'
evidence is, at its highest, sufficient to permit of nothing more than a
finding that they committed a technical contempt of court in that they are
parties to an undertaking which was breached.
63.  The evidence, if it remains in its present state, and I emphasis those
last words, could not permit the court at the end of the day to find that
there was a deliberate or wilful breach of the undertaking for which they are
answerable.
COSTS ORDER
64.  Application has been made for a costs order on a solicitor and client
basis essentially on the ground that the contempt proceedings were brought,
and this applies not only to Mr McCullagh but in relation to all respondents,
for a purpose revealed in Dr Yates' cross-examination as one wholly collateral
to any purpose relevant to the question of contempt or no contempt.
65.  On the other hand, Mr McCullagh was in the position of the person who had
the major responsibility for taking action to ensure that the undertaking
binding CCOM was complied with.
66.  I formed a certain view as to the proper construction of the undertaking,
an issue upon which Mr McCullagh has lost and, looking at those various
considerations, I think that the ordinary costs order is the appropriate one
in these circumstances.