FEDERAL COURT OF AUSTRALIA

CONTEMPT - standard of proof for matters relevant to penalty.

Federal Court Rules, O 40 r 5

Witham v Holloway (1995) 183 CLR 525, applied

REAL TECH SYSTEMS INTEGRATION PTY LIMITED and EAGLE DEVELOPMENTS INTERNATIONAL PTY LIMITED v DOUGLAS SIDNEY MEUROSS and HI-TECH FREIGHT SOLUTIONS PTY LIMITED

ng 149 of 1997

lehane j

sydney

21 NOVEMBER 1997

THE COURT ORDERS THAT:

1.         The first respondent is found guilty of the contempt charged in the statement of charge    dated 5 June 1997.

2.         The first respondent is to pay the applicants’ costs of the motion on the indemnity           basis.

REASONS FOR JUDGMENT

This is a motion in a proceeding in the Court by which the applicants seek, under O 40 r 5 of the Federal Court Rules, orders that the first respondent (Mr Meuross) be punished for a contempt which, the applicants say, he has committed in connection with the proceeding.  The notice of motion was filed on 5 June 1997; the applicants filed with it a statement, under O 40 r 6, specifying the contempt of which Mr Meuross is alleged to be guilty.

Procedural history

The proceeding primarily concerns claims by the applicants that, under a contract between the first applicant and Mr Meuross, and as a result of things done in accordance with the contract, the second applicant (Eagle) owns in equity, and is entitled to have Mr Meuross assign to it, copyright in a computer program known as “CIS”.  The applicants claim also that the contract prohibits the respondents, for a reasonable period, from competing with Eagle, from inducing customers of Eagle not to do business with it and from procuring or inducing any of Eagle’s employees to terminate his or her employment with Eagle.

The matter was first before the Court on 4 March 1997; on that day I refused to grant immediate interim relief which the applicants then sought.  The respondents, however, gave an undertaking to the Court, by their counsel, that until 7 March 1997 or further order Mr Meuross would not solicit, attempt to solicit, entice away or attempt to entice away from the employ of the applicants or either of them any employees of the applicants or either of them except Mr Zbignew Byczkowski.  On 7 March the matter stood over to 10 March; and on that day, by consent, an elaborate interlocutory regime was established incorporating a number of undertakings to the Court given by the respondents, including an undertaking by Mr Meuross substantially in the terms of that given on 4 March.  Its terms are set out in para 6 of the agreed short minutes signed by counsel for the parties, as follows:

Note the further undertaking given to the Court by the first respondent by his Counsel that up to and including 5.00 pm on 8 April, 1997, he will not solicit, attempt to solicit, entice away or attempt to entice away from the employ of the applicants, or either of them, any employees of any of the applicants or either of them (sic) except Mr Zbignew Byczkowski.

The undertakings - including the particular undertaking by Mr Meuross, which I have quoted and to which I shall refer as the undertaking against solicitation - were on, 8 April 1997, extended to 15 April; they were then extended to 12 May and then to 22 May and (in this respect the record is not entirely clear but for reasons which will appear it does not matter) to 20 June.  When the matter was before the Court on 20 June, the applicants’ notice of motion alleging contempt on the part of Mr Meuross had been filed and served; on that day certain of the undertakings given by the respondents were continued, but these did not include the undertaking against solicitation.  The interlocutory regime established on 20 June was confirmed, and expressed to continue until the final determination of the proceeding or further order, on 27 June.

Thus, the undertaking against solicitation, with which this motion is concerned, was in force on 7 May 1997, the date on which the conduct, said to constitute contempt by Mr Meuross, occurred.  Mr Meuross accepted, in evidence, that he approved the undertaking as given on 7 March, reviewed the short minutes of 10 March embodying the undertaking against solicitation and instructed his counsel to sign the short minutes; and he subsequently authorised the continuation of the undertaking.

The charge

The charge is stated as follows:

The first respondent is guilty of contempt of the Court in that in breach of an undertaking given to the Court on the first respondent’s behalf by his Counsel on 10 March 1997 (and continued on the 8th April, 15th of April, 12th of May and 22nd of Mary 1997) that the first respondent would not solicit, attempt to solicit, entice away or attempt to entice away from the employ of the applicants, or either of them, any employees of the applicants or either of them except Mr Zbignew Byczkowski, the first respondent on the 7th of May 1997 did solicit, attempt to solicit, attempt to entice away from the employ of the second applicant Simon Henry Broose.

Circumstances giving rise to the charge: the evidence

The solicitation or enticement alleged against Mr Meuross was said to have occurred during a telephone conversation which took place between Mr Meuross and Mr Broose on 7 May 1997.  There is no doubt that the telephone conversation occurred and I am satisfied to the requisite standard - to which I shall return below - that at the time it occurred Mr Broose was employed by the second applicant.  It is common ground that, as a result of an earlier telephone conversation between them, Mr Meuross had discovered that Mr Broose was employed by the second applicant.  Mr Broose’s account of the conversation on 7 May is as follows:

I was at client’s site at Rosebery when at about 2pm I answered a call on my mobile phone (I have had the same mobile phone number for about the last 12 months).

I said “Simon speaking”

He said “Doug Meuross speaking.  I did not catch you at a bad time did I”

I said “Not really Doug.  The usual”

He said “Are you on site at the moment?  Can you talk?”

I said “Yes.  What can I do for you Doug?”

I said “Have you seen an ad in Saturday’s Herald”

I said “What ad Doug?”

He said “An ad for a technician”

I said “Who for?”

He said “It’s for a company called IFS”

I said “Who are they”

He said “International Freight Services”

I said “What do they need a technician for”

He said “Well, actually its for me but we didnt want that to be generally known”

I said “What’s involved”

He said “It will involve network installations, research projects, software and hardware support.  The sort of thing Zubig is doing for me in Melbourne”

(I took his reference to “Zubig” to mean Zbignew Byczkowski a former employee of EDI.  Amongst some of the staff he was affectionately known as “Zubig” or “alphabet”.)

I said “I will probably be moving interstate for a few months so I would not be in a position to consider the job”

He said “Thats OK”

We then had a brief chat about other matters and I then ended the conversation.  I did not return to EDI’s office that day.

Mr Meuross gave a somewhat different account:

...I then called Broose on his personal mobile telephone number.  During the course of the conversation we said words to the effect:

He said:     ‘Hello, Simon Broose.’

I said:         ‘Doug Meuross’.

He said:     ‘Oh, hello’.

I said:         “As you have left Eagle you may be interested in a job that’s going at IFS, it was advertised in the Sydney Morning Herald and they are looking for a field service engineer.  It is work similar to that you would have been doing for Eagle but it is in-house for IFS.’

He said:     ‘I’m not interested in any work, I have got personal problems... and I’m leaving Sydney.  I am not interested in any job.’

I said:         ‘Oh, good luck.  I hope things work out OK’

He said:     ‘By the way, Deborah, my boss is leaving, you might want to speak to her.’

I said:         ‘What for?’

He said:     ‘She might be looking for a job.’

I said:         ‘I don’t have any positions available but she can give me a call if she likes.’

He said:     ‘OK.  See you later.’

The conversation then came to a conclusion.  I did not, at any time during the conversation, say words to the effect:

                   ‘Well actually its for me, but we didn’t want that to be generally known.’

or

                   ‘The sort of thing Zubig is doing for me in Melbourne.’

Mr Broose accepted that, though he could not recall doing so, he might have said that his boss, Deborah, was leaving Eagle.  In cross-examination he agreed, also, that he had probably referred to personal problems and to his intention to leave Sydney substantially as Mr Meuross deposed.  He denied, however, that Mr Meuross had said “As you have left Eagle” or words to that effect; he maintained that Mr Meuross said “Well, actually its for me but we didn’t want that to be generally known” and that Mr Zbignew Byczkowski was mentioned as he had deposed.

It is necessary to turn to some of the background.  Mr Broose’s evidence was that for about 13 months up to the end of February 1997 he was engaged as a contractor by a company known as Transways Express Line (Transways).  During that period Mr Broose met Mr Meuross: Eagle sold software to Transways and Mr Meuross was then Eagle’s representative in its dealings with Transways.  Then in December 1996 Mr Broose assisted Mr Meuross in upgrading hardware and installing software for a client of Mr Meuross.  There is no issue between the parties as to those matters.  Mr Broose also gave evidence that he had decided by early May that he wished to leave Sydney; he discussed that matter with his employer on 5 May.  He gave the following evidence in cross-examination:

When you were talking to Mr White I think you said it was, correct me if I am wrong, about leaving Sydney were you talking specifically about moving to Brisbane?---That was the direction I was talking about, yes.

What do you mean by the direction?---Well, when I originally voiced the idea it was just getting out of Sydney specifically, it wasn’t Brisbane but I kind of implied that I’d rather go north than south.

So in the weeks following when you first raised the matter did you make any other inquiries outside [Eagle]  for a job out of Sydney?---No, I didn’t.

Mr Broose clarified that evidence in re-examination as follows:

In your discussions with Maree and Richard White which took place around about the time that you had the conversation with Mr Meuross which my learned friend asked you about and I think you were asked about moving interstate; do you recall those questions?---We actually discussed moving interstate on the Monday.

The Monday being what date?---The Monday, about the 5th - the first - the middle - the Monday after my brother’s wedding.

A couple of days before 7 May?---Yes.

In those discussions was there mention of who you would be working for if you took such a move?---Yes.

Who was that?---I’d still be working for [Eagle].

His evidence was that he has remained in the employ of Eagle up to the present; he moved to Brisbane some eight or nine weeks before the hearing of the motion; Eagle had not previously had an office in Brisbane.

The second respondent is a company owned, as to one-third of its shares each, by Mr Meuross, International Freight Services Pty Limited (IFS) and a third shareholder whose identity the evidence does not disclose.  The managing director of IFS is Mr Lorenzo Macolino.  The second respondent is a subtenant of IFS; its office, where Mr Meuross works, is situated in the same building as the business premises of IFS.  Both Mr Meuross and Mr Macolino gave evidence that Mr Meuross frequently called on Mr Macolino in order to discuss, principally, the business of the second respondent.  The evidence of each of them - and there is no dispute about this - was that Mr Meuross made his call of 7 May to Mr Broose from Mr Macolino’s office.  That occurred, so each said, in a context where Mr Macolino showed Mr Meuross a copy of the following advertisement which IFS had placed in the Sydney Morning Herald of 3 May 1997:

COMPUTER.

                                    FIELDSERVICE ENGINEER

   We have a position available in our Sydney office for an experienced Field Service Engineer.  Experience with PCs and networks essential.  Some interstate travel may be required.  A generous salary package will be offered.  Please forward your resume to Mr L. Macolino.  International Freight Services.  56 Bourke Rd. Alexandria. 2015 or email: imacolino@ifs.com.au

There is a question, to which I shall return, about the part (if any) played by Mr Meuross in drafting and lodging that advertisement for publication.  Meantime, both Mr Meuross and Mr Macolino gave evidence to the effect that Mr Meuross said that he had heard that Mr Broose had left the second applicant and might be interested, and that it was agreed that Mr Meuross would ring Mr Broose, which he proceeded to do.  Mr Macolino’s evidence was that he heard the early part of what Mr Meuross said to Mr Broose (the words “since you have left Eagle”) but had no specific recollection of the rest of the conversation.  He recalled being told that Mr Broose was not interested in the position.

Mr Meuross gave evidence that before his conversation with Mr Macolino, probably during April, he was told by Mr Alan Falconer, a friend of Mr Meuross and a director of Transways, that Mr Broose was leaving Eagle: his account was that during a discussion about “the problems of staffing in general” Mr Falconer said:

Simon is an example.  He left us and now after a short time he’s leaving Eagle.

That account was substantially confirmed by Mr Falconer’s evidence.  He said that he had been told by the secretary of Transways, Mr Dooling, that Mr Broose was leaving Eagle; and his account was that he said to Mr Meuross:

...Anyway, he won’t be around much longer.  Jim Dooling says he is not happy at Eagle and is leaving the company.  Doug, he didn’t even last as long as you.

Mr Falconer was cross-examined but the substance of his account of his conversation with Mr Meuross was not seriously challenged and it was not suggested that I should not accept his evidence.  I do accept it and accordingly I find that Mr Meuross had been told by Mr Falconer that Mr Broose was leaving (not, of course, had left) Eagle.

Finally, it is necessary to return to the evidence surrounding the placement of the advertisement.  It will be recalled that Mr Broose’s evidence was that Mr Meuross told him that the advertisement sought someone who would work actually for Mr Meuross, not for IFS and that Mr Meuross denies making that statement.  Mr Macolino’s evidence, in cross-examination, was that Mr Meuross had not seen the advertisement, or a draft of it, before Mr Macolino showed it to him on 7 May.  Mr Macolino said, however, that he had previously discussed with Mr Meuross his worries about “the MIS guy that I had” and about his desire to “bolster” the hardware maintenance department of IFS.  IFS’s hardware support technician had previously threatened to leave and was likely to leave; Mr Macolino wished to obtain a replacement and to add another employee to the department.  His evidence, given in cross-examination, was that the hardware support technician in fact left on 30 June and was replaced, on the basis of the advertisement, by another employee.  Records produced by IFS on subpoena and tendered after Mr Macolino gave evidence, however, suggested both that the hardware support technician who left on 30 June continued to work for IFS as a consultant for at least several months subsequently and that the person employed as a result of the advertisement was employed in a more junior role (evidenced by both his title and his salary) and reported to the former employee, now a contractor or consultant.

Generally, Mr Meuross’ evidence was to similar effect as that of Mr Macolino.  He agreed, however, that he had played some part in the drafting of the advertisement and had made suggestions about it.  Mr Meuross denied that he had placed the advertisement.  He maintained that denial (though somewhat less emphatically) when shown records of the Sydney Morning Herald, produced on subpoena, indicating that the “caller” in relation to the advertisement was “Doug Neuross”.  He said that he had been informed by two unnamed people whom he had telephoned at the Sydney Morning Herald that “caller” referred to a person to whom the newspaper might refer for technical queries in relation to the advertisement.  He maintained that his recollection was that he did not place the advertisement himself, “but if I had been asked to help I would have, but I didn’t”.  Mr Meuross was asked specifically whether he had decided to place the advertisement in order to provide the framework for an approach to Mr Broose:

Did you not decide, before this ad was placed, that you would approach Mr Broose in relation to a job as a computer technician? - No.

Did you not decide that the ad would be placed and used by you as the point around which the approach would be made? - No.

May I suggest, sir, that you did that because you thought an approach on behalf of IFS would not breach the undertaking? - I didn’t place the ad.  IFS were looking for an employee; my only involvement was some advice about the ad.

The law

The applicable principles are well established.  There is a recent discussion of them in the decision of the Full Court of this Court in Microsoft Corporation v Marks (No 1) (1996) 69 FCR 117.  A breach of an undertaking given to the Court is a contempt in the same way as is a breach of an injunction.  Contempt will not be found, however, unless the terms of the undertaking are clear and unambiguous.  The contempt is civil, rather than criminal, in character, at least unless it is contumacious or defiant: here, the terms of the charge clearly are apt to allege a civil contempt.  Nevertheless, the extent to which the contempt was wilful or, on the other hand, inadvertent (for example, committed under a genuine and reasonable, though mistaken, belief that the act constituting the contempt was not a breach of the undertaking) is relevant to the question of penalty.  A civil contempt may result in imprisonment or a fine; a person found guilty of contempt may be required to pay the costs, on an appropriate basis, of the moving party.  Finally, it is now clear that all contempts, not merely those classified as “criminal” must be proved beyond reasonable doubt: Witham v Holloway (1995) 183 CLR 525.  Where the contempt alleged is failure to comply with an order or undertaking, the contempt is established (given that the order or undertaking is clear and unambiguous and that the defendant has had proper notice) upon proof of the failure, without more: that, no doubt, explains the observation by the majority in Witham at 529 that:

In this country, the question whether the civil or criminal standard applies when it is alleged that a person has failed to comply with an order made or undertaking given in civil proceedings has fallen for direct decision only in comparatively recent times.  Perhaps that is because, ordinarily, failure is so apparent that the answer does not vary according to the standard of proof required.

Witham, however, does not in my view leave open the question of the standard of proof required in relation to matters going beyond the existence of a contempt, relevant to penalty.  In Witham the contempt alleged was failure to comply with an order to swear and file a full and sufficient affidavit setting out details of certain property.  An affidavit was sworn, but, it was alleged, did not disclose all relevant property.  The trial judge found not merely that the affidavit was incomplete but that the defendant had shown “at least recklessness in swearing the affidavit” (at 527).  The judge explicitly found recklessness on the balance of probabilities.  It is at least implicit in the decision of the High Court, in my opinion, that that was incorrect: see the discussion, at 534, of the punitive character of the sanctions imposed for contempt, whether criminal or civil.  I shall accordingly proceed on the basis that all matters alleged by the applicants, whether going to proof of the contempt with which Mr Meuross is charged or to matters relevant to penalty, are to be proved beyond reasonable doubt.

Further discussion of evidence: findings

(a)        Was there a breach of the undertaking?

The applicants sought to prove that Mr Broose was, on 7 May 1997, in the employ of Eagle by Mr Broose’s own evidence and by tender of the employer’s copy of Mr Broose’s group certificate for the year of income ended 30 June 1997: that certificate shows, corroborating his evidence to this extent, that Mr Broose was employed from 3 March 1997 to the end of the year of income.  Mr Broose was cross-examined, particularly as to whether he was in fact an employee rather than (as he had been in relation to Transways) an independent contractor; but he maintained that he was an employee and the group certificate bears that out.  He was cross-examined also as to the nature of his relationship with Eagle following his move to Brisbane, but his answers were consistent with the proposition that he remains an employee and, as he did not move, on his evidence, until August, the relationship thereafter is of little consequence.  I find, according to the criminal standard, that Mr Broose was, at the relevant time in the employ of Eagle.

The next question is, did Mr Meuross, by what he said to Mr Broose during the telephone conversation of 7 May 1997, attempt to solicit or entice Mr Broose away from the employ of Eagle?  The answer to this question does not, I think, require a finding as to which version of the conversation should be accepted.  On Mr Meuross’ own version, not only the purpose but also the effect of the conversation, which Mr Meuross initiated, was to draw Mr Broose’s attention to the prospect of working for IFS and, if possible, to attract him to IFS’s employ.  Subject to one particular matter relied on by counsel for Mr Meuross, that, plainly, was a solicitation and an attempt to entice: it was not suggested, and I do not think it could be suggested, that there is a relevant ambiguity. 

The matter on which counsel for Mr Meuross relied was that there could be no solicitation or enticement of a person who had already decided (and made known his decision) to leave Eagle’s employ.  Counsel submitted that I should infer that Mr Broose had, on 7 May, decided to leave Eagle.  Indeed, bearing in mind my conclusions about the onus of proof, the submission perhaps should be treated as one to the effect that I should not be satisfied beyond reasonable doubt that Mr Broose was a person capable of being the subject of solicitation or enticement from Eagle’s employ.  The basis of counsel’s submission was that on 7 May Mr Broose had, on his own evidence, decided to leave Sydney and had told his employer of his plans; by 7 May (possibly, on Mr Falconer’s evidence, substantially earlier) his plans were so generally known that Mr Falconer had heard of them and passed them on to Mr Meuross.  Eagle did not, at the time, have an office in Brisbane, Mr Broose’s preferred destination.  But Mr Broose’s own evidence was that he was not seeking alternative employment outside Eagle; Mr Meuross’ version of the conversation is consistent with that; Mr Broose’s evidence also was that his discussion with Eagle, about his intended move, involved the prospect of his continuing to work for Eagle; and as a matter of fact he is still employed by Eagle (I see no reason not to accept his evidence on this point).  There was a faint suggestion that all this may have happened as a result of a desire to preserve the factual foundation for contempt proceedings against Mr Meuross, but that has no support in the evidence and should not be accepted.  But however all that may be, and whatever might have been the position if Mr Broose clearly and irrevocably had decided to leave Eagle, the fact plainly is that he had made no such irrevocable decision: whether or not he had expressed some dissatisfaction with Eagle, whether or not he may have contemplated leaving Eagle and whether or not he may have said so, the fact is that he remained in Eagle’s employ.  I do not accept that an obligation not to solicit or attempt to entice away from Eagle persons in its employ has no application in relation to an employee who has expressed dissatisfaction or even an intention to leave: the person bound by the undertaking has no right to proceed on the basis that what has been foreshadowed has happened or to assume that the employer and employee will not reach an accommodation, as plainly happened in this case.  I find, according to the requisite standard, that Mr Meuross, in the conversation of 7 May, solicited or attempted to entice Mr Broose from the employ of Eagle.

It is necessary to turn to matters relevant to the seriousness of the contempt.  A good deal of time was devoted during the hearing of the motion to the credit to be given to each version of the conversation.  I was referred by senior counsel for the applicants to a number of matters which, he submitted, should lead me to prefer Mr Broose’s version.  One was that he has no personal stake in the outcome of the motion; secondly, it was submitted that Mr Broose was a forthright and frank witness; thirdly, and perhaps most importantly, Mr Broose, having reported on the conversation to his superiors at Eagle, was asked to reduce his recollection of it to writing and did so about two days after the conversation took place.  Counsel for Mr Meuross submitted that I should place no weight on that record which she described as incomplete and self-serving.  Certainly the record is not a complete record of the conversation: it does not refer to the discussion about the matters which led Mr Broose to wish to leave Sydney or to the conversation about Mr Broose’s immediate superior.  It is true also that Mr Broose made the note knowing - because he had been told when he reported the conversation - that proceedings were on foot between the applicants and the respondents.  But the matters left out were matters of no particular significance from Eagle’s point of view, as Mr Broose undoubtedly understood it, and I see no reason to suppose that Mr Broose deliberately recorded the relevant parts of the conversation inaccurately or that his recollection of it had become faulty, or in some way tainted, during the intervening day when he had discussed the conversation with his superiors.  The note does afford corroboration of Mr Broose’s version in two important respects: one, that it does not refer to the suggestion that Mr Broose was leaving Eagle and the other that it records Mr Meuross as saying that the advertisement was really intended to find an employee for him, not IFS.  It is fair to record my impression that Mr Broose was a frank and reliable witness.

Mr Meuross’ version, on the other hand, has the support of Mr Macolino so far as he claims to have commenced the substantial part of the conversation with the words “As you have left Eagle”.  Mr Macolino supports him also in his evidence that the advertisement was intended to find an employee for IFS, and therefore as to the improbability of Mr Meuross having said “Well, actually its for me”.  It was said, on the other hand, that Mr Macolino’s evidence should be treated with considerable scepticism: all he claimed to remember of the conversation was the opening words, an unlikely state of affairs it was submitted; additionally, it was said that I should regard the explanation of the purpose of the advertisement and its composition with considerable suspicion, having regard to the material from the publishers of the Sydney Morning Herald (naming Mr “Neuross” as “caller”) and the employment records of IFS, which suggested not only that the new employee could hardly be regarded as a replacement for the hardware support technician but that he was subject to the supervision of that same hardware support technician in his capacity as a consultant.  Somewhat less controversially, it was said that both Mr Meuross and Mr Macolino had set down their recollection of the conversation considerably later than had Mr Broose: their recollection, accordingly, should be regarded as less reliable particularly, in the case of Mr Meuross, given his personal interest in the motion.

The principal difficulty with the criticism of the evidence of Mr Meuross and Mr Macolino, it seems to me, arises from where it is set to lead.  The conclusion which senior counsel for the applicants asked me to draw was that Mr Meuross was indeed the “caller” who placed the advertisement and that it was not genuinely intended as an advertisement seeking an employee for IFS but was designed to form a “cover” for an approach to Mr Broose.  Mr Meuross gave evidence that on 7 May he was of the view (though legal advice had later disabused him of it) that he was not acting in breach of his undertaking if he approached an employee of Eagle not on his own behalf but for some other potential employer, for example, IFS.  It was put to me, accordingly, that Mr Meuross approached Mr Broose behind an IFS “mask” which he dropped when Mr Broose did not immediately react as he had hoped.  Counsel for Mr Meuross labelled this as a conspiracy theory.  No doubt senior counsel for the applicants was right in submitting that a reasonable doubt should not be held to arise merely because Mr Meuross and Mr Macolino give a version of the conversation which does not coincide with that given by Mr Broose.  On the other hand, the hypothesis that the advertisement was simply an elaborate facade behind which an approach might be made to one particular employee of Eagle, a facade which both Mr Meuross and Mr Macolino were prepared (as the hypothesis must require) to support with deliberately false evidence, is not one as to which I am satisfied beyond reasonable doubt.  The evidence undoubtedly leaves questions as to the purpose of the advertisement, the way it was drawn and placed and its result; but those questions are not, I think, sufficient to justify taking the step proposed by the applicants.

Counsel for Mr Meuross suggested that I should treat the contempt, if I found contempt, as a merely “technical” one.  She relied on the circumstance that, once the motion charging contempt was filed and served, the undertaking against solicitation was not renewed, nor was corresponding interlocutory relief sought by the applicants.  That is true, but is not in my view to be regarded as a mitigating factor.  On 7 May Mr Meuross was bound by the undertaking; it cannot matter that he later ceased to be bound by it.  Secondly, Mr Meuross, though he knew that he was bound by the undertaking, gave evidence that he believed that he was entitled to approach Mr Broose as he did, for two reasons: one, which he now acknowledges to be wrong, was that the approach was on behalf of IFS, not Mr Meuross himself; the other was that he believed that Mr Broose had resigned from Eagle’s employ.  The basis of the belief, however, was what he had been told by Mr Falconer: he did not claim to have had any other source of information.  All that Mr Falconer had told him was that Mr Broose “was leaving” Eagle.  His evidence was that he made no further enquiries; he did not even ask Mr Broose.  On Mr Meuross’ version of the conversation, Mr Meuross proceeded straight from the statement of his belief, or assumption, to his proposal.  Mr Meuross, thus, on his own evidence took the existence of the undertaking into account; he formed a view as to its scope, without taking advice, which was in fact wrong; and he was prepared to proceed on an unverified assumption, based only on a passing observation by someone whose source of knowledge was at best second-hand that Mr Broose was leaving, that Mr Broose had left.  The law requires that orders of the Court, or undertakings to the Court, be taken more seriously, and treated with more care, than that.

For those reasons, I am unable to conclude that the contempt was merely technical or inadvertent.  It involved a considerable degree of what must be described, at least, as carelessness.  Mr Meuross took the chance that he would prove to be right both technically, as a matter of construction of the undertaking against solicitation (though there was no language in the undertaking to support him), and on the facts.  If he had not been found guilty of contempt, it could only have been because of the fortuitous circumstance that Mr Broose had never been, strictly speaking, an employee of Eagle or had ceased to be an employee: but he investigated neither of those matters.

For those reasons it is not appropriate to regard the contempt as merely trivial or inadvertent.  On the other hand, it is inappropriate to take as serious a view as the Court would if the theory about the advertisement, propounded by the applicants, were established beyond reasonable doubt.  The hearing of the motion occupied a full day and some four hours on two subsequent days; the costs will no doubt be quite substantial.  I think the interests of justice, and of maintaining the respect required for undertakings to the Court, will be served by a finding that Mr Meuross is guilty of the contempt charged and by making an order that he pay the applicants’ costs of the motion on the indemnity basis, but without imposing any further penalty.

Orders

Accordingly, the orders of the Court are:

1.         The first respondent is found guilty of the contempt charged in the statement of charge    dated 5 June 1997.

2.         The first respondent is to pay the applicants’ costs of the motion on the indemnity           basis.

Associate:

Dated:              21 November 1997