Henry Victor Ardy v. Wide World Exports Ltd
Read the full judgment text of CACV 34/1974 on BabelCite. This Court of Appeal judgment.
1. This is an appeal against an order of committal made by Li, J. The notice of appeal states that that order was made on 29th June 1974 and we are assured that that is correct, although the formal order drawn up shows the date to be 27th June 1974. The notice of motion for committal alleged no less than eleven breaches of undertakings and injunctions and it is necessary to set out these allegations in full:
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CACV000034/1974 IN THE SUPREME COURT OF HONG KONG (APPELLATE JURISDICTION) CIVIL APPEAL NO.34 OF 1974 (On appeal from O.J. 2835/71) -----------------
----------------- Coram: Briggs, C.J., Huggins and Leonard, JJ. Date of Judgment: 15th August 1974. ----------------- JUDGMENT ----------------- 1. This is an appeal against an order of committal made by Li, J. The notice of appeal states that that order was made on 29th June 1974 and we are assured that that is correct, although the formal order drawn up shows the date to be 27th June 1974. The notice of motion for committal alleged no less than eleven breaches of undertakings and injunctions and it is necessary to set out these allegations in full:
The first three of these allegations concern undertakings relating to a house: the next three concern undertakings relating to a motor-car: the remainder concern injunctions relating to the house. 2. It is sufficient for an understanding of the present appeal to say that the Appellant was the Defendant in the action and that, the Respondents having taken out a writ of fi.fa., the Appellant applied for a stay of that writ. Upon the hearing of the application for a stay a compromise was reached and an order was made which incorporated the undertakings now alleged to have been broken. The material part of the order was as follows:
The words "on his oath" in relation to the undertakings concerning the car require some explanation. Apparently it was thought by counsel that undertakings would be of greater binding force if they were given on oath, because the Appellant was put into the witness box and questioned as to the terms of the undertakings he was prepared to give. For some reason which is not clear to me there has been put before us a copy of the judge's private notes of the proceedings in the court below. In my experience the provision of such notes has not only been of no assistance but has sometimes proved to be an embarrassment. This is one of those cases where it has proved to be an embarrassment. The judge recorded the terms of the undertakings given by the Appellant and they do not coincide with those recorded in the formal order. Either the recital in the order was untrue or the judge's note was incorrect, because it has never been suggested that the Appellant gave an undertaking on oath on any other occasion. With considerable reluctance I am driven to conclude that we are bound by the terms of the formal order, whether or not it correctly states what the Appellant originally undertook, no application having been made to amend the order. It does not follow that I am persuaded that the judge has not correctly recorded the substance of what the Appellant said. Indeed, I think he was probably right. All it means is that having agreed the terms of the order, which was in part a consent order, the parties are bound by that order and cannot be heard in these proceedings to say that it was wrong. 3. Three months later, upon an ex parte application, the Respondents obtained interim injunctions in the following terms:
After a lapse of nearly five months these interim injunctions were discharged, but it was contended by the Respondents that there had been breaches of the injunctions during the time that they were in force. 4. The first thing which must already be apparent is that some of the acts and omissions of which the Respondents complain could not under any circumstances constitute breaches of the undertakings and injunctions given and imposed. It will be necessary to compare the wording of the notice of motion with that of the two relevant orders but only in relation to those breaches which the trial judge found to have been proved. He delivered a long judgment but did not enumerate those breaches alleged in the notice of motion which he was satisfied had been established. However, it seems to be common ground that the committal was based on breaches (a) and (e) to (k). 5. I will deal first with the complaints concerning the car. By way of introduction Mr. Ching, for the Appellant, emphasises that in committal proceedings the burden of proof is upon the applicant and the degree of proof required is proof beyond all reasonable doubt: In re Bramblevale Ltd. 1970 1 Ch. 128. That is clearly right and it applies whether the contempt was a criminal contempt (as here) or a civil contempt as in Stockton Football Co. v. Gaston 1895 1 Q.B. 453. However, I do not think this is really material to the present case, because the learned judge found as a fact that the car had not been sold. Whether or not that finding was justified there was clearly no evidence upon which he could have found that the car had been sold. Nevertheless the learned judge convicted the Appellant of failing to cause the nett proceeds of sale to be paid in the manner agreed and of failing to deliver an account of the proceeds of sale. With respect to him, if there was no sale there were no proceeds of sale which the Appellant could cause to be paid in any manner whatsoever or which he could account for. It seems to me abundantly clear that there could be no breach of undertakings (b) and (c) in relation to the car unless and until there was a sale pursuant to the order which was found to have been given in fulfilment of undertaking (a). 6. I turn, then, to the arguments concerning the house and will refer first to the alleged breaches of the injunctions. It is contended first of all that the first two injunctions could not support an order for committal because they were ambiguous. The ambiguity is alleged to arise from the fact that these two injunctions were inconsistent with the undertakings previously given and could not stand with them. Counsel argued that the Defendant would not know what the ought to do - if he fulfilled the undertakings he would be in breach of the injunction and if he obeyed the injunction he would be in breach of the undertakings: he could not assume that the injunctions superseded the undertakings because that would mean that one party to an undertaking could in effect vary that undertaking by making an ex parte application to the Court for an inconsistent injunction. For my part I do not see any difficulty here. In the present case the undertakings were in favour of the Respondents, who made the application for the injunctions, and it was always open to them to waive the benefit of the undertakings. It is unnecessary, therefore, to decide whether the Court is without jurisdiction to grant, upon an ex parte application, an injunction inconsistent with a prior undertaking where the applicant is the person who gave the undertaking although I am not persuaded that there is a want of jurisdiction as distinct from an unanswerable ground upon which to apply for discharge of the injunction and an overwhelming argument for the view that no punishment should be imposed for any breach of the injunction. However, I am satisfied that in the present case the injunctions did supersede the undertakings in so far as they were inconsistent and that no "ambiguity" arose. 7. Nevertheless I think the learned judge was wrong to conclude that there was any breach of these injunctions. In disposing of the application to discharge the injunctions he found as a fact that prior to the granting of the injunctions the proceeds of the sale of the house had passed out of the control of the Appellant. Indeed, he made the same finding in the present proceedings, although on the evidence ?? fore us that finding was not only not justified but was clearly wrong as to part of the proceeds. Be that as it way, the finding has not been challenged by a Respondents' notice and we are bound by it. If the injunctions, though valid until discharged, were such that they could not be obeyed it was clearly wrong to punish the Appellant for disobedience to them. If, as found by the judge, the injunctions could not have been obeyed at the time they were granted, a fortiori they could not have been obeyed at the date when service of the order was eventually effected upon the Appellant together with the penal notice which the practice of the Court apparently still requires: see 1970 Supreme Court Practice Vol. 1 para. 45/7/5. As to the alleged breach (g) there is a further point. There could be no disobedience to a mandatory injunction unless a time for performance had been fixed. No time was fixed for the payment of the proceeds of sale to the Registry of the Supreme Court of Hong Kong either by the original order or upon a subsequent application. Alleged breach (k) - that the Appellant failed to account for the proceeds of sale to the Registrar of the Supreme Court of Hong Kong - could, in truth, have been committed even though the proceeds of sale had passed out of the control of the Appellant, but here again no time for performance was ever fixed and on that ground the third injunction could not be enforced. 8. I come now to the undertakings. Although some of them were superseded by the injunctions which were inconsistent with them, they were valid and enforceable during the intervening period. Of the four undertakings given the notice of motion appears to allege breaches of three - (a), (c)(i) and (c)(ii). It was conceded in the lower court that there was no breach of either of the last two of these undertakings. That leaves us with the contention that breach (a) in the notice of motion was a breach of undertaking (a). At the outset it is submitted that the undertaking was not an undertaking "to cause Messrs. Rumsey and Rumsey of Old Christchurch Road, Bournemouth, Hampshire, England, forthwith to sell [the Appellant's] house at 23 East Avenue, Bournemouth aforesaid at the best possible price" but was at best an undertaking to cause Mr. Eairbairn to give instructions to Messrs. Rumsey and Rumsey for such a sale. However, Mr. Ching goes further and submits that no breach of the undertaking was proved, so that no order for committal could have been made even if the notice of motion had properly alleged a breach of that undertaking. The contention of the Respondents, which was accepted by the learned judge, was that although some of the communications sent to the estate agents might, by themselves, be construed as a fulfilment of the undertaking the total effect of all the communications was equivocal. The judge even went so far as to find that the Appellant "had no intention of complying with the undertakings". What happened was this. On the evening of 3rd August 1973 Mr. Fairbairn telephoned to Messrs. Rumsey and Rumsey and, being unable to contact any member of the staff, left the following recorded message with the distant subscribers' answering service:
At 2 a.m. on the following day (which would be 4th August and not 3rd August as given in some of the papers before us) Mr. Mr. Fairbairn sent a cable to Messrs. Rumsey and Rumsey in the following terms:
It should perhaps be mentioned that the Appellant had been in communication with Messrs. Rumsey and Rumsey previously and had asked them for valuations with a view to a possible sale. However, the contention on the part of the Respondents is that the addition of the words "a letter signed by Mr. Ardy with full instructions will follow" in the recorded message effectively prevented the estate agents from proceeding immediately with a sale. I do not think it did. The instructions were explicit so far as they went. It was, however, to be expected that the estate agents would require some personal confirmation of the order for sale from the Appellant and that they would not finalise a sale on the telephoned instructions of a solicitor in another jurisdiction. Moreover, there were obviously details as to production of the title deeds and as to the disposal of the proceeds of sale which they would require but which would in no way derogate from the instructions to sell forthwith at the best possible price. Particularly having regard to the previous communications between the Appellant and the estate agents I have no doubt that the estate agents would have felt justified in putting a sale in hand in anticipation of personal instructions from the Appellant. Four days later Mr. Fairbairn, as solicitor for the Appellant, sent a letter to Messrs. Rumsey and Rumsey the material part of which was in these terms:
Here the contention for the Respondents is that the request to supply the valuations previously asked for must have left Messrs. Rumsey and Rumsey in doubt whether they had unconditional instructions to sell forthwith at the best possible price. Mr. Ching, on the other hand, submits that this letter in no way derogated from the instructions to sell but merely confirmed those instructions and, to use counsel's own words, added a further instruction "Please keep us informed". On the following day Mr. Fairbairn sent this further letter to Messrs. Rumsey and Rumsey:
As to this Mr. Ching says that it equally did not derogate from the instructions given to sell forthwith at the best possible price but ensured that somebody nearer at hand than the Appellant should be authorised to make the decision whether to sell to a particular purchaser and to execute an assignment. He points to a letter dated 17th August 1973 from the estate agents to Messrs, Fnirbairn and Kwok which indicates that there was no misunderstanding as to the instructions to sell the house. The letter includes the following passage:
It is true that the letter starts with a statement that there had been some slight confusion at the estate agents' end and that they had been awaiting confirmation from Mr. Ardy as to his precise requirements. There is, however, nothing in the letter to suggest that the confusion persisted and the passage cited suggests the contrary. 9. With respect to the learned judge I do not think it was proved with the necessary degree of certainty that the Appellant "had no intention of complying with the undertakings". However, the real question is whether the instructions given by Mr. Fairbairn amounted in fact to a compliance with the first undertaking and that question must be answered with due regard to what was reasonable in all the circumstances. The undertaking was not to authorise Messrs. Rumsey and Rumsey to sell forthwith at the best possible price without further reference to the Appellant and I think it was reasonable that they should look to the Appellant for approval of any offer made. "Forthwith" means "Within a reasonable time" (Hillingdon London Borough Council v. Cutler 1968 1 Q.B. 124) and in my view it was no breach of the first undertaking that Mrs. Ardy was required to give the final approval which the Appellant would normally have been asked to give personally. I would hold that the facts alleged in the notice of motion did not constitute a breach of the undertaking (a) and on that ground alone would be disposed to say that the learned judge came to a wrong conclusion. However, even if the notice of motion had been correctly drafted, I do not think the Respondents would have established a breach of this undertaking. 10. In the result I think that the order for committal should not have been made and I would allow the appeal. Representation: Briggs, C.J.: I concur. 15th August 1974. |