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High Court of New Zealand Decisions |
IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
CIV 2005-404-1808
BETWEEN FERRIER HODGSON
First Plaintiff
AND MICHAEL PETER STIASSNY
Second Plaintiff
AND VINCENT ROSS SIEMER
First Defendant
AND PARAGON SERVICES LIMITED
Second Defendant
AND OGGI ADVERTISING LIMITED
Third Defendant
Hearing: 26, 27 July and 19, 20 December 2005
Appearances: J G Miles Q.C and M Flynn for plaintiffs
C S Henry
(26 and 27 July); V R Siemer in person with A Kennedy as
McKenzie Friend (19, 20 December) for first defendant
No appearance for second and third defendants
Judgment: 16 March 2006
JUDGMENT OF POTTER
J
This judgment was delivered by me on at , pursuant to
Rule 540(4) of the High Court Rules.
Registrar/Deputy Registrar
Date
FERRIER HODGSON AND ANOR V SIEMER AND ORS HC AK CIV 2005-404-1808
16 March 2006
Solicitors: McElroys, P.O. Box 835, Auckland
D Gates, P.O. Box 222, Whangaparaoa
Copy to: J
G Miles Q.C, P.O. Box 4338, Auckland
V R Siemer, Paragon Oil Systems, P.O. Box 335, Silverdale,
Auckland
TABLE OF CONTENTS
Introduction [1]
Background
facts [4]
Injunctions [12]
Principles
applicable to applications
for contempt of Court [16]
Affidavits
[19]
Rulings in relation to evidence [22]
The plaintiffs' case
[29]
The evidence [31]
Maintaining/adding
to material on the website [33]
Sale of the website [41]
Distributing
stickers [61]
Letters to Auckland Electricity Consumer Trust Trustees [83]
Letters
to Accountants [91]
Letters to Newspapers [97]
Updating and continuing operation of the website [100]
Three defence witnesses
[105]
Discussion and findings on the evidence [108]
Maintaining/adding to material on the website
[109]
Sale of website [110]
Distributing stickers
[129]
Letters to Auckland Electricity Consumer Trust Trustees [134]
Letters to Accountants
[138]
Letters to Newspapers [141]
Updating and
continuing operation of the website [142]
Summary [145]
Bill of
Rights [146]
Post-Hearing memoranda [153]
Conclusions and penalty [159]
Orders
[170]
Substantive proceeding [171]
Introduction
[1] By second amended application
dated 23 May 2005 the plaintiffs seek orders
for committal of the first defendant and associated orders in respect of the first and
second defendants
upon the grounds that the first defendant is in contempt of Court
by acting in breach of orders made by Winkelmann J on 8 April 2005
on an
application for interim injunction brought by the plaintiffs against the first defendant
as varied by interim injunction granted
on 5 May 2005 by Ellen France J.
[2] By notice dated 27 May 2005 the first and second defendants oppose the
plaintiffs' application
upon the grounds that it is oppressive and an abuse of process
and that neither the first nor second defendant has committed any
act of contempt of
Court.
[3] The second and third defendants were not represented at the hearing. I
declined an application
for the first defendant, Mr Siemer, to represent the second
defendant, Paragon Services Limited, in a judgment dated 19 December
2005. The
third defendant Oggi Advertising Limited (which owns the billboard referred to in
the injunctions) took no part in this
proceeding. References in this judgment to "the
defendants" are to the first and second defendants and exclude the third defendant.
Background facts
[4] The second plaintiff, Mr Stiassny, is a partner of Ferrier Hodgson a firm of
chartered accountants,
who are the first plaintiff.
[5] The first defendant, Mr Siemer, was at the relevant times, the managing
director of the second
defendant, Paragon Services Limited (previously Paragon Oil
Systems Limited) ("Paragon").
[6] Mr Stiassny was appointed receiver
of Paragon by the Court on 14 December
2000. When all the shares in Paragon were transferred to Mr Siemer pursuant to a
judgment
of the High Court delivered on 18 July 2001, Mr Stiassny was discharged
by the Court.
[7] There were differences between the
plaintiffs and the defendants about the
receivership.
[8] Mr Siemer made a series of complaints between April 2002 and January
2005
about the conduct of the receivership by Mr Stiassny, to the Institute of Chartered
Accountants, the New Zealand Shareholders
Association, and the Serious Fraud
Office. Copies of these complaints were sent to other parties including trustees at
the Auckland
Electricity Consumer Trust which is a shareholder in Vector Limited
of which Mr Stiassny is Chairman of the Board.
[9] Around
8 April 2005 Mr Siemer erected a billboard on the building formerly
known as the Farmers Car Park in Hobson Street, Auckland. The
billboard related to
Mr Stiassny and read:
Michael Stiassny, A True Story www.stiassny.org.
[10] The website referred
to, www.stiassny.org, contained a range of material
about Mr Stiassny and in particular his role as Court appointed receiver of Paragon.
[11] The plaintiffs commenced proceedings against the defendants alleging that
the material on the website was defamatory of
Mr Stiassny and also in breach of a
confidentiality provision in an agreement dated 9 August 2001 entered into by
Ferrier Hodgson
with Mr Siemer and Paragon to resolve the differences over the
receivership. These proceedings have yet to be heard, and this judgment
does not
address the issues with which they are concerned.
Injunctions
[12] On 8 April 2005 Winkelmann J in the High Court
at Auckland on the
application of the plaintiffs made orders granting an ex parte interim injunction
against Mr Siemer and Oggi Advertising
Limited ("the April injunction"). The
terms were:
(1) The first respondent [Mr Siemer] direct the second respondent
[Oggi
Advertising] to remove the billboard referring to the applicant
situated on the building formerly
known as Farmers Car Park,
Hobson Street, Auckland;
(2) The first respondent remove all material from
the website
www.stiassny.org in any way relating to the applicant;
(3) The first respondent be restrained
from publicising any information
in any way relating to the application pending further order of the
Court.
(4) The second
respondent remove the billboard relating to the applicant
on the building formerly known as the Farmers Car Park,
Hobson
Street, Auckland forthwith.
[13] Mr Siemer quickly applied to have the injunction rescinded. The plaintiffs
applied to vary the injunction by expanding its scope. Following a hearing on 28
April 2005, Ellen France J in a judgment dated 5
May 2005 rescinded the April
injunction and granted in its place an interim injunction in more limited terms to take
effect from
12 May 2005 ("the May injunction"). It directed Mr Siemer, Paragon
and their servants, contractors or agents not to:
(1)
Publish in any form any information containing allegations of
criminal or unethical conduct or as to improper
personal enrichment
on the part of the plaintiffs in relation to their conduct of the
receivership
of Paragon Oil Systems Ltd; any claim that the
plaintiffs deliberately overcharged Paragon Oil Systems Ltd in the
sum of $10,000; together with information as to the fact of
complaints made by Mr Siemer and/or Paragon
Oil Systems Ltd to
ICANZ or to the Serious Fraud Office; and including any
information obtained by
Mr Siemer or Paragon Oil Systems Ltd in
the course of discovery in any proceedings pending further order of
the Court; and
(2) Not to reinstate the billboard.
[14] On 3 May 2005 the plaintiffs filed an ex parte notice
of application for
committal claiming breach by the defendants of the orders made by Winkelmann J
and undertakings given by the defendants
to the Court. An amended notice was filed
on 12 May 2005.
[15] On 23 May 2005 the plaintiffs filed a second amended application
for
committal and associated orders which is the subject of this judgment. They claim
contempt of Court by the defendants by breaching
the orders of Winkelmann J and
the undertakings given to the Court, and by breaching the orders of Ellen France J.
The plaintiffs
allege that there have been a series of deliberate actions by the
defendants from late April 2005 up to and including December 2005
(when the
hearing of the application for committal was concluded), designed to undermine and
destroy the purpose of the two interim
injunctions.
Principles applicable to applications for contempt of Court
[16] In Attorney-General v Times Newspapers Limited
[1974] AC 273 at 294,
Lord Reid stated that the law of contempt is:
... founded entirely on public policy. It is not there to protect the
private
rights of parties to a litigation or prosecution. It is there to prevent
interference with the administration
of justice and it should, in my judgment,
be limited to what is reasonably necessary for that purpose. Freedom of
speech
should not be limited to any greater extent than is necessary but it
cannot be allowed where there would be real prejudice
to the administration
of justice.
[17] The contempt jurisdiction exists in the public interest as a sanction to ensure
that orders of the Court are complied with: Taylor Bros Ltd v Taylors Group Ltd
[1991] 1 NZLR 91 at 93.
[18] In Duff v Communicado Ltd [1996] 2 NZLR 89 at 98-99 Blanchard J stated
there were certain things which are common to all applications for contempt:
a) The onus
of proving a contempt is on the plaintiff: Solicitor-General v
Wellington Newspapers Ltd [1995] 1 NZLR 45 at 47 (FC);
b) The contempt must be proved beyond reasonable doubt before the
criminal sanctions of
a fine, sequestration or imprisonment will be
imposed: Solicitor-General v Wellington Newspapers; Witham v
Holloway (1995) 131 ALR 401 (HCA);
c) But where the plaintiff has proved, on the balance of probabilities,
that the defendant has
intentionally breached the terms of the
injunction an order for payment of the plaintiff's costs on a solicitor
and client basis will be appropriate: Country Colours Ltd v Resene
Paints Ltd (1992) 6 PRNZ 506 at 508-509.
d) It is unnecessary to prove an intention to interfere with the
administration of justice:
Solicitor-General v Radio Avon Ltd [1978] 1
NZLR 225, 232-233 (CA); Solicitor-General v Radio New Zealand
Ltd [1994] 1 NZLR 48 at 55 (FC).
In every case the Court must ask:
a) Has there been a contempt at all?
b) If so, is it sufficiently
serious to justify any punishment? (Times
Newspapers at 298; Solicitor-General v Broadcasting Corporation of
New Zealand [1987] 2 NZLR 100.)
Affidavits
[19] For the plaintiffs, affidavits were filed by Allan Robert Garrett dated 3 May
2005, 10 May 2005, 20 May 2005,
26 May 2005 and 21 June 2005; Neale Jackson
dated 20 May 2005; Campbell Rose dated 20 May 2005; Frederick Thompson dated
20 May 2005;
Gordon Sharfe dated 26 May 2005; Mark Van Leeuwarden dated 25
May 2005; Sheila Davidson dated 9 June 2005 and Sabrina Vai dated 17
June 2005.
(Leave to file two late affidavits was declined by Ellen France J on 21 July 2005).
[20] For the defendants, Mr Siemer's
evidence was given in two affidavits dated
10 May 2005 and 15 June 2005. Mr Edmondo Tunney swore an affidavit dated 12
May 2005 and
a late affidavit dated 12 December 2005 was presented at the hearing
without opposition by the plaintiffs.
[21] Leave was granted
to the defendants at the hearing to call evidence from
Coralie Van Camp, Ian Andrews and Penny Bright.
Rulings in relation to evidence
[22] The defendants by application dated 7 July 2005, sought leave to cross-
examine Messrs Thompson and Rose and Ms Vai.
Their application was not
opposed by the plaintiffs, in respect of Messrs Thompson and Rose.
[23] The defendants'
application to cross-examine Sabrina Vai was opposed and
was the subject of a judgment of Keane J dated 14 July 2005 and a minute
dated 19
July 2005 following a hearing of the opposed application. Pursuant to that judgment
and minute, a ruling was required by
the Court at the committal hearing. I declined
the defendants' application in a judgment dated 19 July 2005.
[24] The plaintiffs,
by application dated 21 June 2005 sought leave to cross-
examine Mr Siemer, which was opposed. That application was also
heard by
Keane J, and pursuant to his judgment of 14 July 2005, called for a ruling by the
Court at the committal hearing. I granted
the application in a judgment dated 20
December 2005.
[25] The plaintiffs also made application by notice dated 18 July 2005
to cross-
examine Mr Tunney. By notice dated 21 July 2005 the defendants opposed that
application. The matter was not heard prior
to the hearing in December 2005. At the
hearing Mr Siemer advised that the defendants did not oppose the plaintiffs'
application
and would make Mr Tunney available for cross-examination by video-
link. However, the plaintiffs did not pursue their application,
Mr Miles Q.C.
indicating to the Court that the plaintiffs wished to avoid any further delay in
concluding the hearing of their application
for committal.
[26] On 19 December 2005 when Mr Siemer opened the case for the defence, he
made an oral application to cross-examine
Mr Garrett. I declined that application in
an oral ruling. I referred to r 253 of the High Court Rules and to the minute of
Laurenson
J dated 11 May 2005 in which he made timetable orders for affidavits to
be filed by both parties; also to [12][e] of that minute
which granted leave to any
party to apply to cross-examine, but required any such application to be made not
less than 7 days from
service of the affidavit in question. I noted that pursuant to
that order, the defendants filed the application dated 7 July 2005
to cross-examine
Messrs Thompson and Rose and Ms Vai, but that no application was made to cross-
examine Mr Garrett. Mr Siemer's
application was opposed by the plaintiffs. He
offered no explanation for the late application, and failed to persuade me that there
were special circumstances such that in terms of r 253, it should be granted.
[27] The defendants, through Mr Henry who represented
them at the first part of
the hearing, objected to parts of the affidavits filed by the plaintiffs, on the grounds
that they included
evidence that was hearsay, opinion or conclusionary. Most parts
in contention were struck from the affidavits with the agreement
of counsel for the
plaintiffs. A few were the subject of rulings by me. I have accordingly, disregarded
any parts deleted from the
affidavits, and, where applicable, have received identified
extracts as statements of belief rather than fact.
[28] I also record that Mr Siemer's affidavit
of 15 June 2005 and his written
submissions included much opinion and assertion, some of it intemperate or
vituperative. I have been
obliged to exclude from my considerations material that
does not comprise admissible evidence or which is not properly the subject
of
submission, as the case may be. Such material does not assist the Court.
The plaintiffs' case
[29] The plaintiffs contend
that two of the orders of the April injunction have been
breached by the defendants. They are
a) The first respondent
[Mr Siemer] remove all material from the website
www.stiassny.org in any way relating to the applicant [the plaintiffs];
b) The first respondent [Mr Siemer] be restrained from publicising any
information in any way relating
to the application pending further
order of the Court
(There is no dispute that the billboard was removed from the
Farmers Car Park
building in Hobson Street pursuant to the orders to that effect).
They are said to have been breached in the following
respects:
(1) Failing to remove all the material from the website;
(2) Being a party to the reactivation
of the website on 3 May 2005;
(3) Arranging or participating in a "so-called sale" of the website on 26
April 2005 including all the material on it to the Talayna Group in
Milan. It is contended by the plaintiffs
that the sale was a sham,
designed to ensure that the website continued while putting it beyond
the reach of the New Zealand Courts.
[30] The plaintiffs further contend that the orders made by the May injunction
have been systematically and deliberately subverted and breached by the defendants
either directly or as a party, in the following
respects:
a) Reactivating the website on 19 May 2005;
b) Maintaining the original material on the
website and making additions
(including the judgment of Ellen France J and an "interview" with Mr
Siemer about that judgment).
c) Distributing stickers around Auckland City entitled "Michael Stiassny
A True Story www.stiassny.org".
d) Around 23 May 2005 sending letters to Shale Chambers, Michael
Buczkowski and John Collinge, three of the four trustees of the
Auckland Energy Consumers Trust
referring the trustees to the
website and inviting recipients to pass on a card included with the
letter.
e) On 23 May 2005 sending a similar letter to The Independent and
National Business
Review newspapers.
f) Distributing letters addressed to "All Accountants" using an
organisation described
as "Forensic Investigations" regarding a
"possible criminal prosecution" to be brought against Mr Stiassny.
g) Updating and continuing the operation of the website, up to and
including the date of hearing in December
2005.
The evidence
[31] The chronological history of the website www.stiassny.org, as it is relevant to
the proceeding, is
not in dispute and is as follows:
· The website was created on 14 March 2005 with a then expiration date of 14
March 2006.
It was registered in the name of Mr Siemer whose address was
given as 7142 Kay Court, St Louis, Missouri.
· On 12 April 2005
the website was closed down.
· On 3 May 2005 the website was reactivated.
· On 5 May 2005 the website was closed down.
· On 19 May 2005 the website was reactivated.
· The website remained current at the hearing of the committal application in
December 2005.
[32] I now turn to consider the evidence of deponents and witnesses.
Maintaining/adding to material on the website
[33] Mr Garrett in his
affidavit of 3 May 2005 states that since the ex parte interim
injunction was made and sealed on 8 April 2005 he had been periodically
checking
the website www.stiassny.org to determine whether it was still operative. On the
morning of 3 May 2005 he checked the
website and found it was fully operative and
included recent updates. A full copy of a printout of the website is annexed to his
affidavit. He states that above the word "Welcome" on the first page of the website
is the endorsement "Posted 30 April 2005", and
notes that the text under the heading
"Welcome" concludes, "Regards, Vince Siemer, MBA".
[34] Mr Garrett refers to a section
in the "Welcome" material which was an
addition to the material previously on the website. The "Welcome" article includes
the comment:
According to a recent article in the Sunday Star Times Mr Stiassny's fees in
September for Access Brokerage are
a gut-wrenching $660,000 and
counting.
[35] He states that the Sunday Star Times article referred to was published
on 17
April 2005, and notes that it is annexed to an affidavit by Mr Siemer filed in the
proceeding dated 26 April 2005.
[36]
Mr Garrett refers to other respects in which the contents of the website have
been changed and updated. One of the changes was
the removal from the website of
certain documents which had been discovered in another Court proceeding, referred
to by Ellen France
J in her judgment of 5 May 2005 (at [58]).
[37] In his written closing submissions at paragraph 24, Mr Siemer does not
dispute
the contents of Mr Garrett's affidavit except to the extent that it includes
conclusions of Mr Garrett. The conclusionary aspects
of the affidavit were the
subject of objection by Mr Henry on behalf of Mr Siemer and were deleted by
agreement of counsel for the
plaintiffs. The factual matters to which I have referred,
stand.
[38] Mr Neale Jackson in an affidavit sworn 20 May 2005 confirms
that on 3 May
2005 he logged on to the website from a computer at his home and sent a message to
the website. On 9 May 2005 he received
a response from vsiemer@hotmail.com.
The message was signed:
Regards, Vince Siemer 29 Clansman Terrace, Gulf Harbour, Auckland.
[39] Mr Siemer's explanation for the reactivating of the website is given in his
affidavit sworn 10 May 2005. He says that
on receipt of the plaintiffs' ex parte
notice of application for committal filed and forwarded by facsimile to his solicitor
on 3
May 2005, he learned that the website had been reactivated and was available to
the public. He says he contacted Talayna Group in
Italy:
... and pointed out to them that publication of the website and its contents as
of 3 May 2005 was contrary
to the understanding that we had reached when,
on 26 April 2005, I had sold them the website and the material which they
were displaying on the site.
[40] He states that the basis upon which he entered into the agreement with
Talayna
Group for sale of the website and the material that they published on it, was
that they would not activate the website until after
resolution of the ex parte
injunction, the hearing of which was then pending. He says that neither he nor the
second defendant expected
that the new owners would reactivate the site. He says he
received an assurance from the new owners that they would promptly deactivate
the
website but that the sale price in the agreement for sale would be reduced by 2,000
Euros. He records that the website was in
fact deactivated by 7 a.m. on 5 May 2005.
Sale of the website
[41] Mr Garrett's affidavit of 3 May 2005 exhibits a letter
from Mr Siemer to Mr
Julian Miles Q.C, counsel for the plaintiffs, dated 4 May 2005 together with a copy
of an agreement for sale
and purchase in relation to the website.
[42] These documents were provided by Mr Siemer in response to a direction
from Ellen France J in a minute dated 3 May 2005
(Tuesday) in which she recorded
at [6]:
Mr Siemer, through his counsel, has explained that on Friday he sold the
website. He does admit he provided the company in Milan to whom he sold
the website with the information that is now
available on the website. He
seeks 72 hours during which period he says he will use his best endeavours
to have
the website emptied and the situation made so that there is
compliance with the Court's order.
The Judge said that she
would treat as an undertaking on the part of Mr Siemer his
indication that he would use his best endeavours to rectify matters. She
then issued
the following direction in [8][d]:
I further direct that by midday tomorrow Mr Siemer is to make available by
way of discovery sufficient details to the plaintiffs of the new owner of the
site and any correspondence including
emails or contractual documents that
relate to that sale.
[43] The letter of 4 May 2005 to Mr Miles stated:
The
sales agreement on the website is attached per Justice France's order.
There are no other documents, as all the negotiations
occurred over the
phone beyond the initial inquiry which came through the website email. I
have been unable to find
a copy of this but will forward it to you when I find
it.
I have spoken to the purchasers of the website and they
are willing to delete
all information off the website. You should be aware that this request is
costing me EURO 2,000
off the purchase price with the further proviso of a
total refund to purchaser if the website is censured more than 30 days
...
The information on the website is represented to be deleted by 7 a.m.
tomorrow morning.
(Mr Siemer has not forwarded
to Mr Miles or anyone a copy of the initial inquiry
which, he states in the letter came through the website email).
[44] The
agreement/contract of sale is in the Italian language. An English
translation obtained by the plaintiffs is exhibited
to Mr Garrett's affidavit.
[45] The agreement is dated 26 April 2005 and is expressed to be between Vince
Siemer of 7142 Kay
Court, St Louis, Missouri, USA as seller and Talayna Group of
Via Filippino Lippi 19, 20131 Milano, Italy as the buyer. It purports
to be signed by
"Gruppo Talayna" as purchaser and Mr Siemer as vendor. The website is identified
as www.stiassny.org.
[46] The
agreement provides under "Representations":
The sale includes all the modules and information contained on the site
currently and in the past to be used by the buyer as he deems fit.
The purchase price is stated to be 6,000 Euros to be
paid by the buyer into
the cheque account of the seller in the Bank of Milan, Italy ...
[47] The seller agrees to notify
Yahoo of the change of ownership and to pay any
change of ownership fee. The buyer is to be responsible for Yahoo's monthly fee
from
the date of transfer of the ownership of the website.
[48] Also attached to Mr Garrett's affidavit is a copy of an email from
Clifford
Chance in Milan to Russell McVeagh in Auckland stating that their searches have
not revealed the names of Gruppo Talayna
and Il Compratore Gruppo Talayna in the
Italian Companies House register.
[49] Sabrina Vai in her affidavit sworn 17 June 2005,
states that she resides in
Milan and holds an investigation licence issued by Prefettura di Milano Italy. She
says that on 14 May
2005 she was instructed by Warden Consulting Limited of
Auckland to visit an address at Via Filippino Lippi 19, 20131 Milan. She
was
advised that this had been given as the address of an entity named Talayna Group.
Her instructions were to make inquiries to
verify if the entity and the address existed
and if so to make inquiries regarding the sale of a website said to be connected to
that company. She was also to make inquiries about an Edmundo Tunney.
[50] She summarises the outcome of her inquiries (being the result of national
database checks she carried out as well as physical
checks at the address given), that
she was unable to find any record or trace of a company, group or organisation with
the name Talayna
and she was unable to find any record or trace of a person called
Edmondo Tunney. She could not trace Mr Tunney at the address of
19 Via Filippino
Lippi, despite a visit to the building at that address and other inquiries through the
national Telecom telephone
register. She states that an inquiry of the caretaker of
the building about an organisation with the name Talayna received the response
that
no company or organisation with such a name was known at the address. (She does
not refer to a like inquiry being made of the
caretaker for a person by the name of
Edmondo Tunney).
[51] Mr Tunney in an affidavit sworn 12 December 2005, which was presented
at
the hearing, states that 19 Via Filippino Lippi, Milan was his primary residence until
August 2005, since when he has made his
primary residence in Minneapolis,
Minnesota, USA. He claims that he was well known in April 2005 (the date of the
agreement for
sale and purchase in respect of the website) to the doorman at that
address and that he was identified by name on the intercom and
lobby mail boxes of
the building. (He makes no reference to that also being the address of Talayna
Group).
[52] Mr Tunney
states in an affidavit sworn 12 May 2005 that he is a director of
the Talayna Group and that on 26 April 2005 he entered into an
agreement with
Vince Siemer for sale and purchase of the website www.stiassny.org. He says he
agreed that "my group" would not activate
the website until the hearing of the
injunction application then pending which he understood was to take place on 28
April 2005.
Further, that the website would be updated to conform with any further
Court orders, which was subsequently done on 30 April 2005
by Mr Siemer. He
states:
As a result, I was under the mistaken impression that the website could now
be activated
and that the other material could be published without any
problem before the Court.
[53] He further states that
on 3 April 2005 (but presumably he means 3 May
2005), Mr Siemer contacted him and advised that the reactivated website was
violating
the Court's order and asked that it be deactivated until a decision on the
injunction application had been delivered. He states that
he agreed to do this on
condition that the purchase price for the website be lowered by 2,000 Euros.
[54] In his affidavit
of 12 December 2005 Mr Tunney provides background to the
sale and purchase of the website. He states that in early 2005 he began
discussions
with Mr Siemer, whom he had known for ten years, regarding import/export
opportunities between New Zealand and Italy.
He became familiar with the website
which, he says had significance for him in the development of export opportunities
to New Zealand
because:
(a) The website was controversial and "controversy sells". Further that
the controversial
content had significant public interest within New
Zealand;
(b) He considered Mr Siemer trustworthy;
(c) The website was averaging 1,000 hits per day in the first few days;
(d) The responses to the website
were "overwhelmingly positive to its
message".
[55] Mr Siemer states in his affidavit of 10 May 2005 that he sold
the website and
the information on it "which the new owners publicised", as two discrete items. He
claims that he entered into the
sale of the website and the information on 26 April
2005, as if he did not do so then, he would have lost the sale opportunity. He
states
that neither he nor the second defendant knew or expected that the new owners of the
website would reactivate the site and publicise information on it before the pending
injunction
was finalised. When he became aware of the "premature reactivation of
the site" he immediately contacted Talayna Group in Italy and
pointed out to them
that publication of the website and its contents as of 3 May 2005 was contrary to the
understanding reached on
sale on 26 April 2005. They agreed to deactivate the
website on condition that the sale price was reduced by 2,000 Euros.
The
deactivation occurred at 7 a.m. on 5 May 2005.
[56] He states in his affidavit of 15 June 2005 that on about 1 May
2005 he
notified Yahoo of the change of ownership of the website and confirmed that on or
about 23 May 2005. He checked and confirmed
that the change had been registered
on 14 June 2005. He explains the entry of his name under "registrant name" as
relating back to
his originating the website. On the exhibited registration search, Mr
Tunney's name and email address appear, as does the address
of Via Filippino Lippi
19, but it appears that Mr Siemer's telephone number is retained. There is no
reference to Talayna Group in
the registration details.
[57] In cross-examination Mr Miles put to Mr Siemer that the attempted sale of
the website in late
April 2005 was an attempt by him to get around the ruling of the
interim injunction. Mr Siemer replied:
That is not true
and there is no evidence to support it.
[58] He agreed that it was his signature that appeared on the original Italian copy
of
the agreement for sale and purchase but said he was unsure whether the
purchaser's signature was that of Mr Tunney. He accepted that
he had been unable
to provide a copy of the email indicating a wish to purchase the website referred to in
his letter of 4 May 2005
addressed to Mr Miles.
[59] There was the following exchange about what Mr Siemer sold to Mr Tunney:
Q. Do you accept
when you purported to sell the website to Mr Tunney
you sold all the information that was currently on the website and
had been on it in the past?
A. No.
Q. What do you say the phrase contained in the agreement means
when
you say the sale includes all the modules and information contained
on the site currently and in the
past?
A. Okay, in that context yes but I thought your question was did I sell it
with the information on
it and the question to that is no.
Q. What do you say you sold?
A. I'm not going to answer that question on
the basis that it affects the
issues at trial, having stated that the information was, this is an
irrelevant
question, I refuse to answer the question.
J. The question is not irrelevant Mr Siemer. It is a relevant question, it
pertains to paragraph 3 under representations in the
agreement/contract for sale. I will ask Mr Miles to
put the question
again, having ruled that it is a relevant question.
Q. What do you say you sold under the
agreement?
A. I sold him separately all rights to the website and independently the
rights to the information
on it.
Q. Did you think it was a way of perhaps escaping the consequences of
possibly breaching the interim
injunction?
A. I know one issue was the discovery documents which came to my
attention.
Q. That
came to your attention after the signing of the agreement?
A. Yes.
Q. So why did you adopt that process?
A. As I said I'm not entirely sure.
Q. My question was by splitting the information on the website from
the website itself did you think that might assist in any subsequent
defence of proceedings alleging that you
were breaching the interim
injunction?
A. No it was my firm belief the ex parte injunction would be
overturned. I was mindful of the fact it had not yet
been.
Q. The hearing for the application to rescind the injunction was I think
28 May, is that your recollection?
A. Yes that is my recollection.
Q. I'm sorry 28 April.
A. Yes.
[60] Mr Siemer declined
to answer other questions put to him by Mr Miles about
the sale of the website, on a variety of grounds which repetitively included
that the
question was irrelevant, that there was no case to answer, that he had no legal
representation, that his liberty was at
risk and that he was not compelled by law to
answer the question. This was the nature of the response that he gave to questions as
to whether the initial inquiry relating to the purchase of the website came through the
website email; whether he was aware that
the website was going to be reactivated on
3 or 4 May; whether as a consequence of having to shut the website down he had to
refund
2,000 Euros of the purchase price as stated in his letter of 4 May 2005;
whether it was part of the transaction with Mr Tunney that
if the website had been
shut down for more than 30 days he would have had to refund the whole of the
purchase price; what in the
English translation of the agreement for sale and
purchase he disagreed with; whether he received the 6,000 Euros Mr Tunney agreed
to pay under the contract; and whether he had agreed with Mr Tunney that the
website would not be reactivated until the Court ordered
that it could be.
Distributing stickers
[61] Mr Frederick Thompson, in his affidavit dated 20 May 2005, states that on 19
May
2005 he was on reception at McElroys, solicitors for the plaintiffs, and his
employer. At approximately 1.25 p.m. a man walked from
the lift. Mr Thompson
states that he immediately identified the man as Vince Siemer whom he had seen on
two prior occasions.
The first such occasion was when Mr Siemer came to
McElroys to inspect documents. He says that, without invitation, Mr Siemer on
that
occasion proceeded straight to the room where the documents were housed and
began examining the documents. As a result, Mr Thompson
had to ask him to leave.
The second occasion was when he served the affidavit of Mr Stiassny in support of
the ex parte interlocutory
application for injunction and associated documents on Mr
Siemer at 27 Clansman Terrace, Whangaparoa on 11 April 2005. He states
that at
the time of service Mr Siemer acknowledged his identity when he accepted the
documents.
[62] Mr Thompson exhibited
to his affidavit a copy of a sticker which he believed
had been removed from one of the lifts in the building shortly after Mr Siemer
left
McElroys offices. It was a sticker in the image of the billboard previously erected,
including a photograph of Mr Stiassny and
the words:
Michael Stiassny - A True Story www.stiassny.org.
[63] Mr Henry for Mr Siemer cross-examined Mr Thompson extensively
about his
identification of Mr Siemer on 19 May 2005 and about the two previous occasions
upon which Mr Thompson said he had met
with Mr Siemer. The witness was
unshaken in his evidence that it was Mr Siemer who emerged from the lift on 19
May 2005 at about
1.25 p.m. and that this person was the same person he had met as
Mr Siemer on the two previous occasions.
[64] He stated in response
to a question from Mr Miles in re-examination as to
how clear his recollection of Mr Siemer was on the first and second occasions:
Very clear to the point where I do know what he looked like, hence I
recognised him when he was on our floor on the
19th.
He said he was "very confident" that the man he saw on 19 May 2005 coming out of
the lift was Mr Siemer.
[65] Mr Thompson
agreed in answer to a question from Mr Henry, that he had not
seen Mr Siemer "or this person to whom you refer" put any stickers
in the lift.
[66] Mr Campbell Rose gives evidence about certain events on the same day, 19
May 2005. Mr Rose states that on that date he was employed as a solicitor at Russell
McVeagh and was in his usual place of work on Level 29 of the Vero Centre, 48
Shortland Street, Auckland. He states that at approximately
1.30 p.m. he was
walking through the kitchen on Level 29, through the lift lobby towards the men's
toilets. When he was approximately
two metres away from the door to the toilets the
door opened and a man exited the toilets. A woman was waiting outside the men's
toilets for the man and they walked together towards the lift lobby.
[67] Mr Rose entered the toilets. A colleague, Mat Wilson,
was standing next to
the paper towel dispenser. Mat Wilson asked Mr Rose if he knew the man who had
just exited the toilets. Mr Rose
responded that he did not. Mat Wilson pointed to the
paper towel dispenser and to a red sticker stuck on to the paper towel dispenser
with
a picture of a man's face and white writing. Mr Rose states that the sticker read
something along the lines:
Michael
Stiassny the truth
www.stiassny.org.nz
[68] Mr Rose then exited the men's toilets and walked back through the lift lobby.
The man he saw exiting the men's toilets was still waiting for the lift to arrive, but
the woman was not with him. The lift arrived
and the man walked into it. Mr Rose
states that he noticed that the man was holding a sticker in his right hand as he
entered the
lift the same as the sticker stuck on the paper towel dispenser in the
men's toilets.
[69] Later that afternoon at approximately
2.45 p.m. Mr Rose was asked to
prepare and forward to a services assistant employed by Russell McVeagh, an email
describing the person
he had seen. This was for security purposes. The email, which
is exhibited to Mr Rose's affidavit, states:
At around 1.30
p.m. today I was heading for the L 29 mens' toilets when I
saw a tall guy (probably six foot tall) with blond hair, wearing
white Nike
style shoes, jeans and a long sleeved shirt, exiting the toilets. A tall woman
(similar height) was waiting
outside the toilets for him (she had a bob hair
cut, blond, wearing jeans I think) they went to the lifts together.
The
email also summarises the events described in the affidavit.
[70] Mr Rose further states that on the morning of 20 May 2005 he
visited the
website www.stiassny.org and selected the "Vince Siemer interview" side bar. He
confirms that the man pictured next to
the heading "Interview with Vince Siemer", is
the man he saw exiting the men's toilets and entering the lift with the sticker in
his
hand. A photograph of Mr Siemer taken from the website is exhibited to the
affidavit.
[71] In answer to cross-examination
by Mr Henry, Mr Rose was adamant that he
saw clearly the sticker in the man's hand as he returned from the men's toilet and
saw the
man waiting for the lift. He stated:
The sticker I saw in the man's hand was red and had white writing on it, it
was round, and it was the same size as the sticker I had just seen in the
men's toilets. I believed it to be the same or
identical at the time and I still
do.
He described the sticker as:
... perhaps five to eight centimetres across.
[72] He agreed that the writing on the sticker had to be reasonably small but he
disagreed with the proposition put to him by
Mr Henry, that it was impossible for
him to read the writing on the sticker. He replied:
I disagree. Can I add something,
my recollection is that when I saw the man
facing the lift in profile the sticker was on a piece of strip of paper, strip
of
waxy backing paper, and it was not the only sticker on that piece of paper, so
if you are suggesting that it was
inside his hand covered by his hand it was
not, I was able to see as I approached him the sticker on a piece of waxy
paper he was holding in his hand.
[73] He agreed that he did not see the sticker being placed on the towel dispenser
in the men's toilets and could not say that
the man he saw in the lift lobby holding
the stickers in his hand, was the person who placed the sticker on the towel dispenser
in
the men's toilets.
[74] He was closely questioned by Mr Henry about his identification of Mr
Siemer and accepted that he had
never met Mr Siemer apart from seeing him that
day. He was cross-examined about the description in the email he sent on the
afternoon
of 19 April 2005, and whether it came as a surprise to him on 20 April
2005 to learn that Mr Siemer did not have blond hair. He stated:
... to be quite honest when I saw the photo on the website I knew
immediately, as I said in my affidavit, that that
was who I had seen and I did
not at that point give any consideration to the statement in my email that the
man I
had seen had blond hair. So at the time I felt no surprise as such.
[75] In response to a proposition that the photo he received
differed materially
from the man he had seen the previous day, Mr Rose stated:
I don't agree with that. Again when I saw
the photo it was a photo of the
man I had seen. I don't know what more I can add.
[76] Pressed further by Mr Henry in cross-examination
about his identification
from the photograph on the website, of Mr Siemer as the man he saw exiting the
men's toilets and entering
the lift with the sticker in his hand, he said:
... the moment I saw the photo on the website I immediately knew that was
the person I had seen standing outside the lifts.
[77] In answer to re-examination from Mr Miles, he explained that initially
when
he first saw the man in the lift lobby he was approximately 3-4 metres away from
him, and then passed right by him as he walked
through the lobby and passed him
when he entered the lift. He said he would have been:
... less than a metre as I passed.
Mr Miles asked:
When you saw him in the lift lobby were you close enough do you or do
you not consider you were
close enough to make an identification?
The witness replied:
... do you mean of his face if shown a photo yes absolutely
... firstly
because of the proximity I was but most importantly because he was not a
Russell McVeagh employee, that
was extremely unusual on a legal floor
which is not open to public access, to see a non-employee of the firm, so in
terms of the face one remembers it catches one's attention.
[78] Mr Rose was also closely questioned about his evidence that
the sticker he
saw in the toilets included reference to a website www.stiassny.org.nz. He
explained:
I know
that when I went back into the men's toilet later in the day on 19
May at which point the sticker had not been removed, I
saw that it did not
have the .nz. But that was my recollection at the time of my walking past
the man in the lifts,
so that is why I have stated what I have in paragraph 3 of
my affidavit.
[79] He said he had no reason to believe that
the sticker he saw on his second visit
to the men's toilet was a different sticker from the one he had seen on his prior visit.
He
said:
... no, because it was in exactly the same position firstly; secondly all I
realised on my second visit to
the toilets was that there was no .nz whereas I
had initially thought after the first visit and at the time I walked through
the
lift lobby that there was a .nz on the sticker. But I had no reason to believe
on my second visit that the sticker
I saw then was a different sticker from the
one I had seen earlier.
[80] He confirmed that he read the writing on the
sticker he saw in the hand of the
person by the elevator, that his recollection was that that sticker had ".nz" on it, and
that he
believed the sticker was the same as the one he had seen on the towel
dispenser in the toilet.
[81] Mr Miles put questions to Mr Siemer about the stickers, in cross-
examination. Specifically he asked him whether he had seen a sticker similar to that
annexed as an exhibit to the affidavit of Mr
Garrett sworn 20 May 2005, whether he
had ever been in possession of stickers identical to that sticker, whether he arranged
to have
the stickers printed, whether he accepted that the sticker was identical to the
billboard that he had arranged to have erected, whether
he was the person who put
stickers on the walls of the lift at McElroys, whether he was the person identified by
Mr Rose at Russell
McVeagh on 19 May 2005, whether he was the person who
placed the sticker in the toilets at Russell McVeagh on 19 May 2005, whether
he
accepted that on 19 May 2005 the website was reactivated, and whether he agreed
that it was pointless distributing the stickers
if the website had remained shut down.
To those questions and similar questions, Mr Siemer consistently declined to answer.
[82]
However, in his affidavit dated 15 June 2005 Mr Siemer denies visiting Level
29 of the Vero Centre on 19 May 2005 and says that
he does not have blond hair and
does not own white Nike style shoes or any white shoes at all. He denies that on 19
May 2005 that
he had occasion to exit or enter the lift at McElroys offices.
Letters to Auckland Electricity Consumer Trust Trustees
[83]
Mr Garrett in his affidavit of 26 May 2005 refers to letters sent to several
members of the Auckland Energy Consumers Trust which
were made available to
Ferrier Hodgson. He exhibits a letter from Mr Gary Sturgess, Executive Officer of
the Trust, forwarding to
Mr Stiassny at Ferrier Hodgson:
... copy of letters received today addressed to Shale Chambers, Michael
Buczkowski
and John Collinge.
[84] A copy of the letter to Mr collinge is exhibited. It refers to:
... corporate undertaker Michael
Stiassny
and recommends that:
... before he plunders the $2 BILLION in assets of Vector Energy it would
be prudent
for you to do some research into his personal background starting
with a visit to the website on him.
[85] Attached is
a card bearing Mr Stiassny's image and the legend:
Michael Stiassny - A True Story www.stiassny.org.
Printed on the rear
of the card is the message:
Be responsible Pass this card on.
[86] Also exhibited to Mr Garrett's affidavit are copies
of three envelopes
addressed in handwriting to "Mr Michael Buczkowski, AECT, P.O. Box 109626,
Auckland 1031", "Mr John Collinge,
AECT, P.O. Box 109626, Auckland 1031" and
to Mr Shale Chambers, Deputy Chairman, AECT P.O. Box 109626, Auckland
1031". . The envelopes
are date stamped 22 May 2005, which is the same date as the
letter exhibited.
[87] Mr Garrett states that he referred the envelope
copies, to the document
examination section of the New Zealand Police together with samples of handwriting
of Mr Siemer, both of
which are exhibited to his affidavit. (It appears that only the
envelopes addressed to Mr Buczkowski and Mr Collinge were received
for
examination by Mr Sharfe of the New Zealand Police).
[88] Mr Gordon Sharfe gives evidence that he is a senior document examiner
with
the New Zealand Police in Wellington and a registered forensic practitioner certified
by the Australian and New Zealand Forensic
Science Society. He says he received a
request from Mr Garrett of Ferrier Hodgson to complete an examination and prepare
an opinion
on handwriting on envelopes against specimen handwriting and
signatures. He received:
a) A facsimile copy of the two
envelopes addressed to Mr Michael
Buczkowski and Mr John Collinge. (They were exhibits to his
affidavit).
b) Specimen documents, being handwriting and signature specimens
attributed to Mr Vince
Siemer (copies were exhibited to his affidavit).
[89] He states his opinion that after carefully examining the documents:
... the address details on the two questioned envelopes
had been completed
by the author of the specimen handwriting attributed to Vince Siemer.
[90] In his written closing submissions,
Mr Siemer states that the defence does not
dispute the accuracy of Mr Sharfe's affidavit and that the defence would not dispute
that
Mr Siemer provided the envelopes addressed to Mr Collinge and Mr
Buczkowski. That concession in written submissions contrasts with
Mr Siemer's
answers to questions in cross-examination regarding the letters addressed to Mr
Collinge and Mr Buczkowski. Mr
Siemer declined to answer straightforward
questions put to him by Mr Miles, as to whether the envelopes were addressed to Mr
Collinge
and Mr Buczkowski and whether he addressed the envelopes to Mr
Collinge and Mr Buczkowski. When asked to comment on Mr Scarfe's evidence
that having examined the documents in Mr Siemer's handwriting and examined the
addresses on the envelopes, the handwriting on the
envelopes is Mr Siemer's
handwriting, Mr Siemer again declined to answer the question.
Letters to Accountants
[91] Sheila Davidson
swore an affidavit dated 9 June 2005 to which she exhibited
an envelope with the name Paragon Oil Systems Limited printed on the
top left hand
corner. The envelope was addressed to her at 69 Forrest Hill Road, Takapuna. She
states that she is unaware as to how
the letter came to be posted to her other than that
she is an accountant. She exhibits the contents of the envelope and the envelope
postmarked 30 May 2005, to her affidavit. The contents comprise a letter dated 27
May 2005 addressed to "All Accountants" under the
signature of "Forensic
Investigations". The letter states:
We are assisting Mr Vince Siemer in putting together a possible
criminal
prosecution case against Michael Stiassny, a chartered accountant affiliated
with Ferrier Hodgson ...
Mr Siemer is investigating a pattern of such behaviour that would infer
criminal undertakings.
[92] An invitation is
issued to those who have had "similar experiences" with
Michael Stiassny to contact Forensic Investigations at its postal address
or through
the website www.stiassny.org.
[93] Also exhibited is an enclosure with the letter, a card featuring Mr Stiassny's
photograph and the words:
Michael Stiassny - A true story www.stiassny.org.
[94] On the back of the card are the words
"Be responsible pass this card on". Ms
Davidson describes the card as a "small red business card".
[95] Mr Siemer declined to
answer questions put to him in cross-examination by
Mr Miles as to the identity of "Forensic Investigations" and whether "Forensic
Investigations" were assisting Mr Siemer in putting together a possible criminal case
against Mr Stiassny. When referred to the envelope
received by Ms Davidson he
declined to state whether Paragon Oil Systems Limited whose name appeared on the
envelope, was his company
and declined to answer questions about whether Paragon
Services Limited, the second defendant, was previously named Paragon Oil Systems
Limited, or to confirm that he had sought to represent in person Paragon Services
Limited as second defendant in this proceeding.
He would not answer a question as
to why the letter of 27 May 2005 from Forensic Investigations was posted out in a
Paragon Oil Systems
envelope. He declined to answer a question:
Were you behind the campaign of sending those letters to as many
accountants
as you could locate?
[96] However, in written submissions Mr Siemer was prepared to provide the
information that the envelope
exhibited to the affidavit was:
An old and obsolete envelope from when Paragon was located in Hamilton
and that Paragon
shifted its premises to Auckland in 2003 and that the
envelopes had not been used in more than two years.
Letters to newspapers
[97] Mr Garrett in his affidavit of 21 June 2005 refers to correspondence sent by
Mr Siemer to The Independent Business Weekly and the
National Business Review
newspapers in the period 23-24 May 2005. He exhibits a letter to Ms Jenni
McManus of the Independent
Business Weekly dated 23 May 2005 enclosed in an
envelope dated 24 May 2005.
[98] Similarly to the letter to certain of the trustees
of the Auckland Electricity
Consumers Trust it states:
Before he (Mr Stiassny) plunders the 2 BILLIONS in assets of Vector
Energy it would be prudent for you or anyone in the media to do some
research into his personal background, starting
with a visit to the website on
him.
The business card with Mr Stiassny's image and reference to the website was
enclosed.
[99] Also exhibited to Mr Garrett's affidavit is a copy of a page from the National
Business Review newspaper dated 27 May 2005
which reproduces a copy of the
business card with the image of Mr Stiassny with the reference to the website
removed. The item beneath
includes the statement:
So as not to get caught up in what will probably be a messy defamation
proceeding, we have
smudged out the URL of the website referred to on the
postcard above, which reporters received by mail this week.
Updating
and continuing the operation of the website
[100] Mr Garrett describes in his affidavit of 26 May 2005 how he checked the
website
on 25 and 26 May 2005. He found that the website had been updated on 25
May 2005 to include a new item under the heading "Why Michael
Stiassny?" Under
the date 25/5/05 in bold print is the statement:
Mr Siemer is currently preparing a criminal prosecution
against Michael
Stiassny. Anyone having any evidence of question is invited to contact us
through the `contact us'
tab. All contacts are strictly confidential.
[101] The accompanying article refers to Mr Stiassny in conjunction with the
receivership
of Paragon, and includes a number of allegations about Mr Stiassny's
conduct including:
- the blatant disregard he has
demonstrated for legal accounting and
ethical morals.
The article concludes:
With fondest regards, Vince Siemer,
MBA Managing Director Paragon
Services Limited, Member Institute of Directors of New Zealand.
[102] Also included on the
website was a letter of 20 May 2005 from ICANZ
advising that the Professional Conduct Committee has approved a request from Mr
Stiassny
to put on hold any consideration of Mr Siemer's complaint until a decision
of the High Court has been made in regard to related matters.
[103] On 26 May 2005 the website was found again to have been updated. Under
the heading "Formal Complaint to the Institute of
Chartered Accountants of New
Zealand" is the statement:
Anyone who has any doubts about Michael Stiassny's guilt as a white
collar
criminal must ask themselves why Mr Stiassny would move to delay an
ICANZ formal complaint against him (letter
below) ...
[104] There follows the full text of Mr Siemer's "formal complaint" against
Michael Stiassny to the Professional Conduct
Committee of ICANZ dated 26
January 2005, which contains specific detailed complaints about Mr Stiassny's
actions as receiver of
Paragon.
Three defence witnesses
[105] Coralie Van Camp described herself as a former trustee of the Auckland
Energy Consumer
Trust and referred to a disagreement she had with Mr Stiassny as
Chair of Vector Limited.
Mr Ian Andrews described himself as semi-retired.
He had come into contact with
Mr Stiassny who was appointed receiver of a company of which he was a director.
Ms Penny Bright described
herself as media spokesperson for the Water Pressure
group, a voluntary position. In that capacity she has come into contact with
Mr
Stiassny as Chairman of the Board of Metro Water. She was critical of
representations by the Board as to the quality
of water in the company's 2003 annual
report and statement of corporate intent.
[106] Mr Miles objected to this evidence on the grounds that
it was not relevant. I
granted leave for the witnesses to be called upon Mr Siemer's insistence that their
evidence had relevance
in establishing a pattern of behaviour by Mr Stiassny which
was necessary to put in context the matters in issue before the Court.
However, I
cautioned Mr Siemer that on the sparse information available as to the nature of their
proposed evidence, I had difficulty
in seeing its relevance and would be obliged to
disallow questioning that was not relevant. At several stages during the evidence
of
these witnesses I was obliged to intervene and direct Mr Siemer that the questions
were not relevant to the issues before the
Court.
[107] In the event, none of these witnesses gave any evidence that was relevant to
the issue of whether Mr Siemer and the
second defendant have breached the
injunctions of the Court granted on 8 April 2005 and 5 May 2005. Their evidence
related to their
own experiences with Mr Stiassny which are completely irrelevant to
that issue. Accordingly I do not take their evidence into account.
Discussion and findings on the evidence
[108] I shall consider sequentially the evidence relating to the plaintiffs' alleged
breaches of the April injunction and of the March injunction. I refer to the headings
under which I summarised the relevant evidence.
Maintaining/adding to material on the website
[109] It is clear that contrary to the orders made by Winkelmann J, the material
on
the website relating to Mr Stiassny was not removed and was in fact supplemented.
Although the website was closed down on 12 April,
on 3 May 2005 when both Mr
Garrett and Mr Jackson logged on, the website was active and included the original
material with additions
as described by Mr Garrett.
Sale of website
[110] Mr Siemer does not dispute this, but he claims he was not responsible
because
by then he had sold the website and all information on it to Talayna Group
and it was they who reactivated the website on 3 May 2005.
[111] The plaintiffs say, not so the so-called sale to the Talayna Group was a
sham. In any event it remained within Mr Siemer's
power and control to ensure that
the Court orders were not breached as he was bound to do pursuant to both the Court
orders and to
the undertakings he had given to the Court. He failed to do so and is
therefore liable as a party for the breach of the orders.
[112] In considering the evidence which relates to these competing contentions, I
propose first to refer to the evidence of Sabrina
Vai. Mr Siemer in submissions had
much to say about the evidence of Ms Vai, stating in written submissions of Ms
Vai's affidavit:
This affidavit and plaintiffs'counsel's claim in this Court that Mr Tunney
does not exist is at the core of their
contempt application against Mr Siemer
and Paragon.
[113] However, the plaintiffs through their counsel did not oppose the
late
introduction to evidence of Mr Tunney's affidavit of 12 December 2005 which
deposes to his existence and his address at Via
Filippino Lippi 19. They accepted
that Mr Tunney exists and is a long term friend of Mr Siemer.
[114] Ms Vai's affidavit simply
attests to her having received instructions to locate
and verify the address at Via Filippino Lippi 19 and Talayna Group and Edmundo
Tunney at that address. She details her efforts to do so and states that her inquiries
did not yield the verification sought.
[115]
Mr Tunney states in his affidavit that he lived at that address until August
2005. For present purposes, I shall accept that was
so, although Ms Vai's inquiries
failed to reveal that information. Given that there is no dispute that Mr Tunney
exists and is a
long time friend of Mr Siemer and given his evidence, which I accept
for present purposes, that until August 2005 his primary address
was Via Filippino
Lippi 19, Ms Vai's evidence regarding Mr Tunney is of no significance.
[116] However, there is no evidence that throws any light on either the existence or
address of the Talayna Group. Indeed, beyond being stated as the buyer in the
agreement of sale dated 26 April 2005 there is no evidence
through Mr Tunney or
otherwise confirming the existence of this entity or its address.
[117] Mr Siemer's evidence is that he sold
the website to Talayna/Tunney on 26
April 2005 which is the date of the agreement for sale and purchase. Mr Tunney
says he purchased
it in May 2005. He says he had the contents of the website
"reloaded". That evidence may be consistent with Mr Siemer's explanation
that he
sold the website, and independently the material on it, but it does not sit easily with
the representation in the agreement
of sale that the sale includes:
All the modules and information contained on the site currently and in the
past ...
[118] It may not be of particular moment, but raises the query why Mr Tunney
would need to "reload" content which was already on
the site when he purchased it,
containing as it did all the original material which had been injuncted together with
additional material
of an objectionable nature.
[119] Apart from the agreement for sale and purchase dated 26April 2005
purportedly signed on behalf
of the Talayna Group and by Mr Siemer, and the
evidence of Mr Tunney and Mr Siemer that they entered into and put into effect the
sale of the website by 3 May 2005 when the website was reactivated, there is a
surprising absence of evidence and conflicting evidence
about the sale, including:
a) There is no evidence of any negotiations leading up to the sale and
there
is a conflict in the evidence of Mr Siemer and Mr Tunney as to
how the sale came to be negotiated. Mr Siemer said
in his letter to Mr
Miles of 4 May 2005, that the initial inquiry came through the website
email, but
he has never produced evidence of that inquiry, this despite
the direction of Ellen France J in her minute of 3 May
2005 that all
such relevant information be provided to the plaintiffs.
On the other hand Mr Tunney
states:
In early 2005, I began discussions with Mr Siemer regarding
import/export opportunities
between New Zealand and Italia
...
and that shortly afterwards he "became familiar" with the
website that
Mr Siemer had just created www.stiassny.org, which he considered
had commercial significance
for him, so he bought the website from
Mr Siemer in May 2005. Clearly Mr Tunney would not have been the
potential purchaser who made the initial inquiry through the website
email, according to Mr Siemer.
b) Mr Siemer gives as his reason for entering into this sale agreement on
26 April 2005, when the website was
deactivated:
... if I did not do so then, I would have lost the sale
opportunity.
He does not specify to what "sale opportunity" he refers but the sale
was to Talayna Group/Tunney. It is difficult
to accept that this
opportunity would have been lost when Mr Tunney was a
longstanding friend, negotiations (according
to him) had proceeded
since early 2005, and the broad purpose for which Mr Tunney says he
was interested in purchasing
the website was for the development of
export opportunities. Certainly Mr Tunney gives no indication in his
affidavits
that time was of the essence.
c) The sale was transacted, according to the date on the agreement for
sale, on 26 April 2005
which was after Mr Siemer had been forced to
close the website pursuant to the April injunction and in accordance
with
his undertakings to the Court. It was apparently completed in
time for the website to be reactivated on 3 May 2005 which was
between the date of the hearing before
Ellen France J of the
defendants' application for rescission of the prior injunction, and the
issue of her judgment on
5 May 2005 which put in place the amended
interim injunction. There is nothing in the evidence of Mr Siemer and
Mr Tunney
to suggest that the timing was critical other than in
relation to the Court orders which Mr Siemer was facing in relation to
the website.
d) There is no evidence of payment of the purchase price whether at the
stated price of 6,000 Euro, or
the reduced price of 4,000 Euro which
Mr Siemer says followed his request to the purchasers to delete all
information off
the website. Since the agreement for sale provides for
the price to be transferred through Mr Siemer's account in the Bank of
Milan, it might be expected that there was readily available evidence
of payment having been made, if indeed it was.
e) There is no evidence that Mr Tunney, an entity by the name of
Talayna Group or indeed anyone other than Mr Siemer, has
contributed material to the website whether before or after the
purported sale to Talayna Group/Tunney. Indeed
there is clear
evidence that after the purported sale Mr Siemer has continued to
provide material
to the website, for example the publication of the
judgment of Ellen France J dated 5 May 2005 and the "interview"
with Vince Siemer which accompanies it.
f) Although the agreement provides for the seller promptly to
notify
Yahoo of the change of ownership and to pay any charge, when this
was done sometime prior to
15 June 2005, (Mr Siemer exhibits a
report dated 14 June 2005) Mr Siemer's telephone number is retained,
as is the ID number for both the administrator and the registrant.
[120] A further troubling factor is the inherent unlikelihood
of Mr Tunney wishing
to acquire this particular website in the context of developing export opportunities
from Italy to New Zealand.
This website was devoted to publicising material about
one man, Mr Stiassny, who practises as a chartered accountant with a focus
on
liquidation and receivership work. The "significance" which Mr Tunney states the
website had for him controversy/Mr Siemer trustworthy/one
thousand hits per
day/positive responses does not suggest relevance, let alone significance, for
developing export opportunities
to New Zealand. Given the limited relevance, let
alone significance of the website for the business Mr Tunney claims he wished to
develop, it is surprising that he was prepared to pay for it 6,000 Euro.
[121] All these factors when considered together give
rise to a very strong
inference that the sale of the website to Talayna Group/Tunney was not a genuine
sale but was indeed, as the
plaintiffs have submitted, a sham. It would follow that
Mr Tunney was merely a front for Mr Siemer and Paragon and that the so-called
sale
was designed to ensure that the website continued, directed and manipulated by Mr
Siemer while ostensibly its ownership went
outside the jurisdiction of this Court and
the injunctions made in relation to the website.
[122] I reach the conclusion that it
is at least more probable than not that the sale of
the website by Mr Siemer to Talayna Group/Tunney was a sham. I stop short of
being satisfied beyond reasonable doubt that that was so, because Mr Tunney has
sworn on oath in his affidavits that he purchased
the website from Mr Siemer. I have
not had the opportunity to hear Mr Tunney give evidence and to see him respond to
cross-examination
and thus to assess his credibility and his reliability as a witness.
Therefore, despite the circumstantial evidence that raises a
strong inference against
the truth of his evidence as to the purchase of the website from Mr Siemer, I cannot
be satisfied beyond reasonable doubt. My finding is therefore that on the balance
of
probabilities, the sale and purchase of the website between Mr Siemer and Talayna
Group/Tunney was a sham.
[123] However, I
am satisfied beyond reasonable doubt that even if the sale was
genuine, Mr Siemer was nevertheless a party to breaching the injunction.
By
deliberately placing Mr Tunney in a position to breach the Court orders by
reactivating the website on 3 March 2005
(if that is in fact what occurred), Mr
Siemer actively aided and abetted or willingly acquiesced in breach of the Court
orders.
[124] A person who knows that an injunction has been granted and aids and abets
or willingly acquiesces in the commission of a breach
of it, will himself be in
contempt: Seaward v Paterson [1897] 1 Ch 545 at 557.
[125] I consider it extremely unlikely that Mr Siemer would have been unaware of
Mr Tunney's steps to reactivate the website
on 3 May 2005 given their close
relationship, the proximity of the sale to the reactivation, and the fact that both were
aware of
the sensitive nature of the material on the website (both gave evidence in
their affidavits of the removal of material that was discovered
in other litigation as
directed by the Court). But even if Mr Siemer had been unaware of Mr Tunney's
intention to reactivate the
website on 3 May 2005, it was within Mr Siemer's power
and control to ensure that the injunction was not breached either by ensuring
compliance by Mr Tunney or by immediately cancelling the agreement to prevent
continuing breach.
[126] In his letter of 4 May 2005
to Mr Miles, Mr Siemer states:
You should be aware (of the) proviso of a total refund to purchaser if the
website
is censured more than 30 days.
[127] Mr Siemer could have cancelled the agreement and refunded the purchase
price, and thus ensured
the retention of the control necessary to ensure there was no
breach of the Court orders. (I note that he has achieved the "repurchase"
of the
website following the hearing of the committal application).
[128] I am therefore satisfied beyond reasonable doubt that
as a party to the breach,
Mr Siemer was in contempt of the April injunction when the website was reactivated
on 3 May 2005, containing
as it did all the original material which had been
injuncted together with additional material of an objectionable nature.
Distributing
stickers
[129] The website was reactivated on 19 May 2005 containing all the original
material including the judgment of Ellen
France J and an "interview" with Mr
Siemer commenting on the judgment.
[130] The evidence of Mr Thompson and Mr Rose is that on
that very same day Mr
Siemer was seen distributing stickers which included the message, "Michael Stiassny
A True Story www.stiassny.org"
(or, in the case of Mr Rose, very similar wording)
in the vicinity of the offices of McElroys (Tower Centre) and Russell McVeagh
(Vero Building). The message replicates that on the billboard that the April
injunction required to be dismantled. In the same
way as that billboard the stickers
invited members of the public to go to the website and thus to access the material
which had been
injuncted. It can be no coincidence that Mr Siemer was distributing
those stickers on the very day the website was reactivated. There
would have been
no point in his distributing the stickers if the website to which the stickers referred
was inactive. It follows
that he must have been responsible for or at least known of
the reactivation of the website on that day.
[131] Mr Siemer made extensive
submissions concerning the evidence of Mr
Thompson and Mr Rose, suggesting that their evidence of identification could not be
relied
upon and that further neither had witnessed the person they identified as Mr
Siemer as committing any act that could constitute contempt.
He suggested that it
would require "a leap of faith" for the Court to make findings based on their
evidence. I disagree. Having
seen and heard both Mr Thompson and Mr Rose give
evidence and listened carefully to their responses to the extensive cross-examination
of them by Mr Henry, I am satisfied that both were truthful and reliable witnesses
and that their evidence of the identification
of Mr Siemer in the two respective
locations on 19 May 2005 can be safely accepted.
[132] Furthermore, their evidence as to the
appearance of the stickers in the places
they described, near the respective firms' offices coincidentally with the presence of
Mr
Siemer, gives rise to a fair and reasonable inference that it was he who placed the
stickers where they were found.
[133] I am
satisfied beyond reasonable doubt that Mr Siemer distributed these
stickers on 19 May 2005 in breach of the May injunction.
Letters
to Auckland Electricity Consumer Trust Trustees
[134] Mr Siemer does not dispute Mr Sharfe's evidence that he addressed the
envelopes, nor
that he sent the envelopes to Mr Collinge and Mr Buczkowski. In the
light of Mr Sharfe's undoubted expertise and his unqualified
opinion as to the author
of the handwriting on those envelopes, it is hard to see what other stance Mr Siemer
could have taken.
[135] Mr Siemer's submissions on this aspect seem to suggest some sort of
deception by Mr Garrett in sending only two of the three
envelopes for
examination by Mr Sharfe and for being the person who claims to know of the
contents of the envelopes. However, when
asked in cross-examination by Mr Miles
about these envelopes, Mr Siemer declined to answer the questions put to him.
Neither in his
affidavits filed in the proceeding, the second of which well post-dated
Mr Garrett's affidavit in which he deposed to these matters,
nor in answer to cross-
examination did Mr Siemer provide any evidence which contradicted or contested
Mr Garrett's evidence in any
way. The late attack on Mr Garrett in written
submissions is unsupported by any evidence and lacks credit and merit. I reject
it.
[136] It is clear from the evidence that Mr Siemer himself sent these letters to Mr
Buczkowski and Mr Collinge (the handwriting
on the envelope to Mr Chambers was
not submitted for examination and I do not take that item into account). The letter
they contained
refers the recipients back to the website which includes the material
that gave rise to the injunctions in the first place and in
addition includes allegations
of at least unethical conduct in relation to Mr Stiassny.
[137] I am satisfied beyond reasonable
doubt that these communications which
were clearly in breach of the May injunction were written and distributed by Mr
Siemer or at
his direction.
Letters to Accountants
[138] The letter addressed to "All Accountants" exhibited to the affidavit of Ms
Sheila
Davidson clearly links "Forensic Investigations" the signatory, with Mr
Siemer in stating:
We are assisting Mr Vince Siemer
in putting together a possible criminal
prosecution case against Michael Stiassny ...
Mr Siemer is investigating
a pattern of such behaviour that would infer
criminal undertakings ...
It states that :
Extensive evidence has
been gathered ...
of specified matters which allege at least unethical conduct on the part of Mr
Stiassny. Again the business card
is included, with the reference back to the website
which was current as at 30 May 2005 when this letter was sent.
[139] Mr Siemer's
explanation in submissions that the envelopes were obsolete
envelopes of Paragon does not take the matter anywhere, particularly
when he
declined to answer questions put to him in cross-examination about whether he had
any links with Paragon. The letter itself
links the source to Mr Siemer, albeit that the
author purports to be "Forensic Investigations". The envelope which contained the
letter identifies with Paragon, Mr Siemer's company, serves only to confirm the link.
[140] This communication is clearly in breach
of the May injunction containing as
it does allegations of unethical and possible criminal conduct. I am satisfied that
there is
proof beyond reasonable doubt that Mr Siemer has acted in breach of the
injunction in publishing this information.
Letters to newspapers
[141] It is apparent from the evidence of the letter dated 23 May 2005 by Mr
Siemer to The Independent and the reference in the
National Business Review on 27
May 2005 to the "postcard which reporters received this week", that Mr Siemer was
extending his campaign
of publicity against Mr Stiassny to the news media. Again
these communications refer the newspapers back to the website containing
the
offensive material, the subject of the injunctions, and accordingly are a clear breach
of the May injunction. I am satisfied
beyond reasonable doubt.
Updating and continuing the operation of the website
[142] The publications on the website on 25 and 26 May 2005 are clearly in breach
of the injunction
of 5 May 2005 which prohibits publication in any form of
information containing allegations of criminal or unethical conduct or as
to improper
personal enrichment on the part of the plaintiffs in relation to Paragon and
publication of any information as to the
fact of complaints made by Mr Siemer
and/or Paragon to ICANZ.
[143] Further, the website has been maintained including the original
material
which gave rise to the injunctions (except for documents obtained by Mr Siemer or
Paragon in the course of discovery in
another proceeding which were removed
following the May injunction) and it has been updated, clearly by Mr Siemer or with
the provision
of information provided by Mr Siemer, to include additional material
directly in breach of the March injunction.
[144] I find these
breaches proved beyond reasonable doubt.
Summary
[145] Each of the breaches I have found proved beyond reasonable doubt following
consideration of the relevant evidence, involves conduct which amounts to serious
and deliberate breach of the April and March injunctions.
When the totality of what
has occurred is considered the only possible conclusion is that the first and second
defendants have conducted
a systematic and deliberate campaign to defy and subvert
the Court orders, in order to maintain before the eyes of the public the
serious
allegations against Mr Stiassny which were the subject of the injunctions.
Bill of Rights
[146] Mr Siemer placed considerable
reliance on his right to freedom of expression
in his submissions to the Court and in declining to answer questions put to him in
cross-examination.
[147] I turn briefly to consider the impact of the New Zealand Bill of Rights Act
1990 which accords to Mr Siemer
and Paragon by s 14:
Freedom of expression, including the freedom to ... impart information and
opinions of
any kind and any form.
[148] Section 5 of the Bill of Rights provides:
... the rights and freedoms contained in this
Bill of Rights may be subject
only to such reasonable limits prescribed by law as can be demonstrably
justified
in a free and democratic society.
[149] Thus the right to freedom of expression may be subject only to such
reasonable limits as
can be demonstrably justified in a free and democratic society.
[150] In Duff v Communicado Limited Blanchard J analysed the relationship
between the law of contempt and the right to freedom of expression. He stated
at 101:
The role of the Bill of Rights must
also be considered in each individual case
of alleged contempt in relation to the particular facts of the case. A
balancing exercise has to be carried out between the individual litigant's
right to freedom of expression and society's
interest in protecting the
administration of justice. Striking the balance may be seen as inherent in the
process of
determining what criticism is both "fair" and "temperate" ... the
Bill of Rights guarantee of freedom of expression must form
the backdrop to
any application of the test for contempt. It requires that an application to
punish for contempt be
scrutinised most carefully.
[151] He observed that that position is very similar to the position at common law
as described by Lord
Reid in Times Newspapers at 294 [see [16]:
Freedom of speech should not be limited to any greater extent than is
necessary
but it cannot be allowed where there would be real prejudice to the
administration of justice.
[152] On the facts of this
case, given the findings I have made as to the multiple
deliberate breaches of the injunctions by the defendants, this is not a case
where
there has been "fair" and "temperate" criticism which the public interest requires
should be protected, but one where the deliberate
and systematic breaches of the
injunctions create real prejudice to the administration of justice.
Post-Hearing memoranda
[153]
Mr Siemer indicated in his closing submissions on 20 December 2005, that
he had tried to contact Mr Tunney with the objective to
purchase back the website
and shut it down pending trial. I invited him to consider pursuing this objective and
to advise me by memorandum
if he achieved it.
[154] By memorandum dated 9 January 2006 Mr Siemer advised that he was
successful in purchasing back the website
and had removed the material identified in
the injunction proceedings from it on 29 December 2005. He stated that
the
defendants' action in purchasing the website was merely a gesture of goodwill to the
Court and constituted no concession of any
sort.
[155] The plaintiffs by memorandum of 25 January 2006 acknowledged that the
website had been cleared of the material that
was in breach of the two injunctions but
drew to the Court's attention that there has been added to the website a copy of a
letter
by Mr Siemer to Ms Paula Rebstock, Chairperson of the Commerce
Commission dated 14 November 2005 which they say contains allegations
against
Mr Stiassny as Chairman of Vector Energy which breach the terms of the May
injunction.
[156] Mr Siemer in a further memorandum
dated 30 January 2006 denies that the
paragraph which causes concern to the plaintiffs refers to the subject matter of the
injunctions.
[157] On the information available to me, I am not in a position to advance that
issue, beyond observing that in light of the orders
I make at the end of this judgment,
Mr Siemer may consider it is in his and Paragon's interests to ensure that no material
is published
on the website or elsewhere which is at risk of being in breach of the
May injunction, pending hearing and determination of the substantive
proceeding.
[158] Mr Siemer's first memorandum comprised nine typewritten pages with three
pages of annexures and the second, three
and a half pages. Beyond the advice that
the website has been repurchased and cleared they contained material which is
inappropriate
and irrelevant and which I have not taken into account except to this
extent: the memoranda indicate to me that Mr Siemer fails properly
to accept and
respect the absolute requirement for him to comply with Court orders. He appears to
remain utterly unrepentant about
the numerous breaches of the orders for which he
has been responsible.
Conclusions and penalty
[159] The Court's response to
any failure to comply with the terms of an injunction
is a matter of discretion but when the defendants' conduct shows deliberate
defiance
of Court orders, a mere declaration that the defendant has acted in contempt of Court
will not be sufficient. In such cases
a fine will usually be the minimum response.
[160] While recognising the Court's discretion in the matter, the plaintiffs submit
that the penalties imposed should ensure that the website is closed down, that Mr
Siemer complies with the Court orders and that
the plaintiffs' costs are paid on a
solicitor and client basis.
[161] Mr Siemer has not closed down the website but he has cleared
the website of
the offensive material that gave rise to the injunctions (subject to a possible issue
with the letter to the Commerce
Commission). In those circumstances I consider that
the more serious responses of an order for committal of the first defendant,
a writ of
sequestration against the assets of the second defendant, or an order debarring the
defendants from defending the proceeding,
are not required at this stage. However,
it is necessary that a punishment be imposed which will reflect the Court's outrage
when
its orders are deliberately disregarded. Further, that the penalty will deter Mr
Siemer and Paragon from any future breaches of the
May injunction.
[162] As to past conduct I consider those imperatives can be met by an order
requiring the defendants to meet the
costs of the plaintiffs on a solicitor and client
basis in respect of this proceeding and the imposition of a fine.
[163] The fine imposed must
reflect that the Court orders have been systematically
ignored and flouted, and that deliberate steps were taken by Mr Siemer to
enter into a
sale of the website to enable the course of conduct which had been injuncted to be
maintained in defiance of the Court
orders.
[164] As to the level of fine, I have referred to the limited number of authorities
that are of assistance. In The Director
of the Land Transport Safety Authority v
McNeill HC Auckland M509-IM99, 20 December 2000, Chambers J, a fine of
$25,000 was imposed
for deliberate and ongoing breaches over a period of two
years, of an injunction prohibiting Mr McNeill from being involved in any
trucking
operation, following a history of non-payment of fines and road user charges.
[165] In Television New Zealand Ltd v Newsmonitor
Services Limited (1997) 12
PRNZ 168, Smellie J stated:
The Court's response to such high-handed and irresponsible conduct
inevitably must be a condign
one which makes it clear that such breaches
will not be tolerated.
He imposed fines of effectively $22,500 on the defendants
for persistent and
widespread breaches of an injunction restraining Newsmonitor from breaching the
plaintiffs' copyright, which extended
over a period of nearly four years. He awarded
costs on a basis that equated solicitor and client costs on the contempt aspects
of the
proceeding.
[166] In Norbrook Laboratories Limited v Bomac Laboratories Limited HC
Auckland CIV 2002-404-1732, 18 December
2003, Heath J, a fine of $10,000 was
imposed for several breaches of a Court order that disclaimers be published in
relation to the
defendant's product. The breaches were found to be unintentional and
promptly rectified. Costs were awarded but not on an indemnity
basis.
[167] In Taylor Bros Limited v Taylors Group Limited [1991] 1 NZLR 91, which
concerned proceedings under the Fair Trading Act 1986 regarding the use of the
appellant's trade name, the Court of Appeal
observed that the conduct of the
defendant since the permanent injunction had shown that there was a risk of further
attempts to
evade it, an dimposed a fine of $5,000 and ordered payment of costs on a
solicitor and client basis "throughout the litigation".
Costs on that basis amounted to
a considerable figure, the full extent of which is not apparent from the two Court of
Appeal judgments
reported respectively in [1991] NZLR 19 and [1991] 1 NZLR 91.
[168] As to future conduct, the Court ordered that the writ of sequestration should
continue to lie in Court and reserved liberty
to the plaintiff to apply to the High
Court for issue of that writ, or other relief, in the event of evidence becoming
available
that the injunction (as clarified by the Court of Appeal) was further
breached.
[169] In this case, because I am far from satisfied
that the likelihood of any future
non-compliance with the injunctions has been eliminated I propose to proceed along
similar lines.
Orders
[170] There will accordingly be the following orders:
a) There will be a declaration that the conduct of the defendants
in
breaching the April and May injunctions, as detailed in this judgment,
is a contempt of Court.
b) For past breaches
of the injunctions the first and second defendants
jointly and severally are fined $15,000 for contempt to be paid within
30 days of the date of this judgment to the Registrar of the High Court
at Auckland.
c) One half of that fine ($7,500)
is to be paid to the plaintiffs pursuant to
the principle in Taylor Bros Limited v Taylors Group Limited [1991] 1
NZLR 91 at 93.
d) As to the future, the injunction granted by Ellen France J on 5 May
2005 stands.
e) The plaintiffs' application
for the issue of a writ of arrest for the
committal of the first defendant, for a writ of sequestration against the
assets
of the second defendant, and for an order that the first and
second defendants be debarred from defending this proceeding shall
lie in Court with liberty reserved to the plaintiffs to apply for such
relief, in the event of evidence becoming available
that the injunction
has again been breached.
f) The defendants are to pay the costs of the plaintiffs in respect of this
committal proceeding. Such costs are awarded jointly and severally
against the first and second defendants. The plaintiffs
are to file a
memorandum detailing costs and disbursements within 7 days of the
date of this judgment. Such costs and disbursements
may include the
costs in relation to the adjournment application on 5 December 2005
which I awarded in favour of the plaintiffs
on a solicitor and client
basis. The defendants are to file in response within a further 7 days. I
will then fix the costs
to be awarded against the defendants pursuant
to this order. They will thereupon become payable by the defendants
to the plaintiffs within 30 days. In the event that the defendants fail to
file a memorandum in accordance with
this timetable, I shall proceed
to determine costs on a solicitor and client basis in the absence of such
memorandum.
Substantive proceeding
[171] The substantive proceeding needs to be advanced to hearing as soon as
practicable.
I am advised that a telephone conference has been set down before
Ellen France J on 4 April 2005 at 9 a.m.
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