Bathurst Real Estate Pty Ltd v Fairbrother

This is an action for contempt arising from an undertaking to the Court given as part of the settlement of an employment dispute. The litigious course of that dispute is one with which this Division is well familiar.

The first and second defendants (to whom I shall refer without disrespect as Fairbrother and Cleary) are real estate agents. For many years they were the employees of the plaintiff, Bathurst Real Estate Pty Ltd (BRE).

In November 2018, Fairbrother and Cleary registered Cleary Fairbrother Property Pty Ltd (CFP). On 18 March 2019, they resigned from their employment with BRE and on 5 April 2019 CFP obtained a corporate real estate licence. As part of these developments, CFP also entered into a franchise agreement with the third defendant, Smile Real Estate Pty Ltd ("Smile").

By summons dated 8 April 2019 filed in this Division, BRE sued Fairbrother and Cleary to enforce post-termination restraints in their respective employment contracts with BRE. The proceedings settled on 17 April 2019. The notations and orders made by consent and without admissions on that day included this undertaking to the Court by Fairbrother and Cleary (the Undertaking):

BRE alleges that Fairbrother, Cleary and Smile have acted in contempt of the Undertaking by publishing property advertisements and other promotions for CFP in:

For the reasons which follow, the Court has determined that the Publications are not in contempt of the Undertaking. Those reasons may be summarised as:

Mr M Thangaraj of Senior Counsel appeared with Mr D Mahendra of Counsel for BRE. Mr J Ireland of Queen's Counsel appeared for the three defendants.

There were two substantive witnesses of fact for BRE: its director and licensee in charge, Mr Michael Whittaker, and Mr Michael Burrough, an expert in social media and digital advertising.

Mr Whittaker was not cross-examined. His evidence primarily went to how the Publications were discovered and what they included. However, as shall be discussed further below, there were no screenshots in evidence which actually showed the Hashtag being used with any of the Publications.

Mr Burrough gave evidence about how hashtags were used on Facebook and Instagram. While he was cross-examined, there was no issue taken with either his expertise or his description of how hashtags were created and what they did.

Fairbrother and Cleary did not give evidence.

The only witness for the defendants was Mr Scott Michaelson, a director of Smile. He gave evidence about the services offered by Smile to CFP as a franchisee and what he and others within Smile knew about the Undertaking. While he was cross-examined, his credit was not put in issue. I have no doubt he was giving his evidence honestly and to the best of his ability. One matter which will be mentioned again below is that Mr Michaelson was giving his evidence remotely (the entire hearing was remote) and while suffering from Covid. He did not appear well and also had a poor connection which, he explained and I accept, meant he could clearly hear the Court but not so clearly hear counsel.

Before leaving the topic of witnesses, I should record that BRE also sought to read the affidavit of one of its solicitors, Ms Nicole Town. Her affidavit primarily attached screenshots of CFP property advertisements on Mr Cleary’s personal Facebook page. It was not suggested that any of these were in contempt of the Undertaking. It appears they were sought to be relied upon to found an attack on Mr Cleary’s credit in anticipation of an affidavit of Mr Cleary that had been served but was not read. The Court rejected Ms Towne’s affidavit subject to BRE’s right to seek to retender the evidence if Mr Ireland QC later sought to advance a proposition he had disavowed in opening that part of his clients’ defence would be Cleary’s and Fairbrother’s lack of familiarity with Facebook and Instagram.

In closing written submissions, Mr Thangaraj SC sought to retender Ms Town’s affidavit because Mr Michaelson’s entire affidavit had been read, including reference to Ms Flor Victoriano, an employee of Mr Michaelson. The screenshots from Mr Cleary’s Facebook page were not put to Mr Michaelson in cross-examination and nothing was raised in closing by Mr Ireland QC that would cause the Court to revisit its earlier ruling. Ms Town’s affidavit remains irrelevant and the renewed application for its tender is rejected.

In this section I will set out the Court's findings of fact. None of what the Court finds to be the dispositive facts was ultimately the subject of serious dispute.

Fairbrother and Cleary resigned their employment with BRE on 18 March 2019 to operate their own real estate agency through CFP.

On 8 April 2019, BRE commenced proceedings by summons in this Division against Fairbrother and Cleary (the Original Proceedings).

The summons included these prayers for final relief against Mr Fairbrother (mirrored in the interlocutory relief that was first sought, and with identical interlocutory and final relief against Mr Cleary):

Mr Fairbrother’s contract of employment with BRE referred to at the end of the prayers just quoted was not in evidence in the present proceedings.

Mr Whittaker's affidavit in support of the summons in the Original Proceedings included these paragraphs (which were read again in these proceedings, but without the annexures referred to):

The proceedings resolved after a Court appointed mediation. Other than that fact, there was no evidence about how the Undertaking came to be, including who may have proposed or drafted it.

On 17 April 2019, Sackar J made these orders and notations recorded as a judgment of the Court (nothing turns on the inapt references to directors in the penal notice; I shall refer to the first undertaking as the “Non-Competition Undertaking”):

As appears from paragraph [87] of Mr Whittaker’s affidavit (see [20] above), BRE’s social media activity at the time the Undertaking was given was on Facebook and LinkedIn, not Instagram (not overlooking his references to YouTube, but which was not counted in social media). I make this finding because if Instagram (or the use of hashtags on Facebook) was of any significance, I am satisfied that Mr Whittaker would have referred to it in a paragraph of a carefully drawn affidavit devoted to describing the social media platforms used by BRE at the time, or in paragraph [84] dealing with promotional materials that includes BRE’s website. If there had been any evidence before the Court in the Original Proceedings dealing expressly with Instagram or the topic of hashtags, I have no doubt it would have been deployed by BRE in these proceedings.

Mr Michaelson's affidavit evidence, which the Court accepts, was:

Under CFP's franchise arrangement with Smile, Smile offered "back of house" services to CFP by attending to all promotional and marketing material for properties being sold by CFP. Properties were always dual listed referring to both the relevant franchisee such as CFP and Smile. Smile was responsible for, controlled and ran any social media accounts (Facebook and Instagram) that were marketed or promoted as CFP sites. These were services provided to all of Smile’s franchisees.

The production process was:

Sometime between 17 April 2019 and June 2019 Mr Michaelson told Ms Victoriano about the Undertaking (his precise evidence of what he told Ms Victoriano, and which the Court accepts and finds accordingly, is set out in [36] below). There was no suggestion he did so in writing. Nor is there any suggestion that anyone connected with Smile saw a copy of the orders which contained the Undertaking or even just the written form of the Undertaking.

On 18 August 2020, Mr Whittaker observed that CFP had used the Hashtag in a post relating to a property CFP was marketing.

On 19 August 2020, BRE's solicitor wrote to the defendants' solicitor (emphasis in original):

That letter was immediately drawn to Smile’s attention because at 4.03 pm on 19 August 2020, Mr Michaelson's wife sent this email with the subject line "Urgent - Cleary Fairbrother Property" to Ms Victoriano, and including copies to Fairbrother and Cleary, Ms Symons and Mr Michaelson (emphasis added):

The Court accepts Mr Michaelson's affidavit evidence, about which he was not challenged, that "On August 2020 and with a view to avoiding a conflict with BRE Smile removed any material that might arguably involve a breach of the undertaking to the Court" (emphasis added).

On 27 August 2020, Mr Whittaker was informed by his solicitor of the Facebook post included as one of the Publications. The next day Mr Whittaker located the Instagram Publications by searching the Hashtag on Instagram.

In what, with the benefit of hindsight, appears to be a strange omission, no response was ever sent on behalf of any of the defendants to the letter of demand set out in [29] above. It may be that this entire litigation could have been avoided if the remedial steps that had been taken by Smile had been promptly reported to BRE’s solicitors.

These proceedings were commenced by summons and statement of charge filed on 28 August 2020. The summons and statement of charge were amended to join Smile as a defendant in June 2021.

The screenshots of the Publications attached to Mr Whittaker's evidence did not show the Hashtag. This was because, according to Mr Burrough, whoever had taken them had done so on a smartphone and had not clicked through to each Publication in a way that would have shown the Hashtag. Any submission that BRE had not proven that the Publications had been posted with the Hashtag was only faintly put by Mr Ireland QC. Mr Michaelson's attitude of not contesting what had occurred is captured by his evidence in [31] above. There was no challenge to Mr Burrough's evidence that in order to have been found by a search looking for the Hashtag as they had been, the Publications must have appeared with the Hashtag. The Court is satisfied beyond reasonable doubt and finds that the Publications were posted with the Hashtag.

In final submissions, BRE placed emphasis on a passage of Mr Michaelson's cross-examination which I set out in larger quotation for context (emphases added to identify the specific passages relied on by BRE):

BRE relied on Mr Michaelson's evidence which I have emphasised about Mr Michaelson's references to the hashtags. Mr Ireland QC submitted that there was a difficulty with that evidence because at that early point of the chronology no issue of hashtags had arisen and Mr Michaelson appeared to be using “hashtag” as a synonym for the prohibited “phrase”. He submitted this was because of “a sort of coalescence in the questioning between the use of the phrase and the hashtag”.

In the course of final submissions I indicated to the parties that, in observing Mr Michaelson give his evidence, I had had the same thought (given the difficulties under which Mr Michaelson was labouring - see [12] above), particularly when read with his reference to branding in what he recalled telling Ms Victoriano a few lines later in the transcript reproduced in [36] above.

I do not need to resolve this issue. The Undertaking must be objectively construed. As Mr Thangaraj SC, correctly in my respectful view, accepted in the course of argument, whatever Mr Michaelson may have been told or understood about the meaning of the Undertaking, that did not prevent the defendants advancing the arguments they were now making about the construction of the Undertaking, including its ambiguity. I deal with this question further in [60] – [63] below.

Some matters were not in dispute or, having been raised in opening written submissions, were finally not the subject of serious contention.

BRE was alleging a civil contempt. The applicable principles were the same irrespective of whether the contempt was said to be failure to comply with an order or an undertaking. BRE had to prove beyond reasonable doubt that the alleged contemnors were on sufficient notice of the terms of the Undertaking and that the contempt was wilful and not merely casual, accidental or unintentional. The dispositive legal issues that were in contest concerned the construction of the Undertaking, whether it was ambiguous in the requisite sense, and the extent to which reasonable steps towards compliance with the Undertaking had any part to play.

By the end of the hearing neither Smile’s position as a third party nor, in particular, Ms Victoriano’s position as a “consultant” to Smile was deployed to exculpate any of the defendants. Finally, Mr Ireland QC did not submit that any of the defendants was not sufficiently on notice of the Undertaking.

It is also convenient at this point to deal with one other general matter. In his closing submissions, Mr Ireland QC submitted that Smile was not charged as a principal contemnor but with accessorial liability for aiding and abetting the breach of the Undertaking by Fairbrother and Cleary. With respect, that is a misreading of the statement of charge. This charges that Smile was on notice of the Undertaking and acted “in wilful disobedience and in breach of the” Undertaking by having “aided, abetted or otherwise assisted” Fairbrother and Cleary to use the Hashtag in the Publications. That is a charge of breaching the Undertaking as a principal, albeit as a third party with notice of the Undertaking as opposed to having itself given the Undertaking.

BRE’s submissions may be summarised as follows:

The defendants’ submissions may be summarised as:

The parties accepted that the relevant principles in relation to construction and ambiguity were set out in Pang. Beazley JA (as her Honour then was) and Lindgren AJA delivered reasons to similar effect, and McColl JA agreed with both.

Pang concerned an undertaking to the Court “to provide to [Bydand Pty Ltd’s] legal representatives 14 days’ notice of any intention of disposing or encumbering, or in any way dealing with [a specified property] until further order of the Court”. On 16 March 2019, Mr Pang entered into a contract to sell the specified property. Notice of this was given in purported compliance with the undertaking on 26 March 2019 on the basis that the undertaking required notice to be given within 14 days after a relevant dealing with the property. At first instance, Mr Pang admitted the breach subject to his contention that the undertaking was ambiguous. Einstein J rejected this and found Mr Pang guilty of contempt.

Before the Court of Appeal, four possible meanings of Mr Pang’s undertaking were presented. Two were accepted by Mr Pang as meaningless. One was the basis on which notice had been given as described in the preceding paragraph. This was also dismissed as not tenable, leaving the Court to accept the fourth as the only sensible available construction. In reaching this conclusion Beazley JA said (emphases added):

Lindgren AJA concluded (at [153]) that Mr Pang’s undertaking “has only one sensible and reasonable meaning”, noting (at [155]) that “in the construction of the undertaking, its purpose is properly influential”. At [160] his Honour said (emphasis added) “The only sensible meaning of the undertaking is that notice must be given of an intention that already exists and will continue to exist for at least a further 14 days before it ceases to exist by being realised”.

In support of his submissions that the Undertaking was ambiguous, Mr Ireland QC also relied on the decision of the majority in R&I Bank of Western Australia Ltd v Anchorage Investments Pty Ltd (1993) 10 WAR 59 (R&I). The case concerned the meaning of “asset” in an asset preservation order. Ipp J said (at 69-70) (emphases added):

Owen J, after considering the contentions on construction, concluded (at 83):

Finally, although it comes from the field of contract (but noting that in this case the Undertaking is a term of the contract the parties reached to settle the Original Proceedings), conceptual assistance for the present problem as to the nature of ambiguity can be found in this passage of Leeming JA in Cherry v Steele-Park (2017) 96 NSWLR 548; [2017] NSWCA 295 (Gleeson and White JJA agreeing):

Because so much of the law about construction was developed in relation to contracts, it is salutary to begin by observing a distinction between contract and contempt before attempting to synthesise the authorities to which I have referred into a summary of the principles which apply to this case. That distinction is that an ambiguous contract, once properly construed, may be found to have been breached and damages then awarded, but breach of an ambiguous undertaking on its proper construction will not give rise to a liability in contempt.

A party may be held liable in damages for breach of a contract the meaning of which is unclear where a court has decided the proper construction of the contract. The possibility of more than one reasonably arguable construction of a contract may only be relevant insofar as a party contends that its conduct, while a breach of the contract properly construed, was not repudiatory because it was acting bona fide on what has turned out to be an incorrect understanding of its rights: Woodar Investment Development Ltd v Wimpey Construction UK Ltd [1980] 1 WLR 277 at 283 per Lord Wilberforce.

The contrast between this outcome in contract and the law of contempt is encapsulated in this statement by Ipp J highlighted in the extract from R & I in [50] above: “Contempt of court is not established if, on a proper construction of an ambiguous court order, it is revealed that the order has been breached by the conduct of the defendant”. In other words, while the Court will determine the proper construction of the order, there can be no contempt if that determination is the result of resolving clearly or reasonably arguable alternative contentions (and while they may largely overlap, “clearly” and “reasonably” are not coextensive in this context). This is because the existence of those contentions demonstrates that the order is ambiguous in the requisite sense.

The analysis in the preceding paragraph highlights a difficulty in this aspect of BRE’s case. Much of its argument really seemed to be that because the Undertaking had to be, and could be, given a proper construction, there was no relevant ambiguity and a breach could be demonstrated by reference to that proper construction. This approach missed what might be termed the middle step – a consideration of the quality of the respective contentions to arrive at the proper construction. Given the circumstances in which court orders are made and undertakings given, a completely meaningless order or undertaking will (or ought to) be a very rare creature. On the other hand, the cases demonstrate that, as with all other writings intended to have legal effect, legal skill of the first order can still produce orders and undertakings that will generate debates about their proper meaning in a given (and perhaps unforeseen) set of circumstances.

Including by reference to the authorities referred to in [47] – [52] above, the correct approach to a problem such as the case at bar may be summarised as:

Before leaving this consideration of the legal principles, there are two other matters which should be addressed.

First, in setting out the summary in [57(7)] above, I have not overlooked Beazley JA’s observation in Pang at [56] (see [48] above) about the various expressions judges have used to describe the type of ambiguity that will prevent a conviction for contempt. I am mindful that such expressions should not be given the force of statute. Nevertheless, the summary is drawn from some of those expressions and will, if satisfied, in my respectful opinion meet the others such as, for example, that the alleged contemnor “could be in real doubt” about the meaning of the undertaking.

Second, out of deference to the argument presented, I will say something about the significance of the alleged contemnor’s understanding of the meaning of the undertaking (as to which, see also [36] – [39] above). This is because BRE submitted (see [44(6)] above) that the defendants clearly understood that the Undertaking prevented them from using the Hashtag, so it was not open to them now to say that the Undertaking was somehow ambiguous or that they had not breached the Undertaking. In closing submissions, Mr Thangaraj SC nevertheless accepted that, as in Pang, an alleged contemnor could defend the charge by arguing for a construction different to that which they had at the time of the contempt and which is the construction the court finds is the correct one. What follows can only be obiter dicta, because in this case even assuming the defendants thought the Hashtag was prohibited by the Undertaking, the Court finds below that this is not the proper construction of the Undertaking.

BRE relied on this passage of Lindgren J’s judgment in Microsoft at 121 (emphasis added):

There can be no doubt the Lindgren J was a judge of great experience. Nevertheless, it is, with great respect, a tentative expression of an obiter opinion and I would be unable to accept it as correct without a great deal more analysis than either party presented. That is not a criticism. Ultimately the question is not dispositive.

More generally, a party’s subjective understanding of the meaning of an order or undertaking is not relevant to the Court’s task of determining the proper meaning objectively. That a party had an understanding of the undertaking that accord’s with the court’s determination of its meaning can fortify the court in its conclusion: see Pang at [61] quoted in [48] above. Such an understanding will also be relevant to, but I am not persuaded would necessarily in all cases be completely determinative of, the issue of wilfulness. Finally, whether it accorded with the Court’s construction or not, the alleged contemnor’s understanding may also be relevant to penalty, depending on the nature of the restraint and the circumstances of its breach.

Before turning to the issues of construction raised by the parties, it is convenient first to set out the surrounding circumstances or context as at 17 April 2019 which the Court considers relevant to construing the Undertaking:

The purpose of the Undertaking is also readily discernible: to prevent Fairbrother and Cleary from representing any ongoing association with BRE. This is to be contrasted with the Non-Competition Undertaking, which dealt with non-competition for a defined period and had its origin in the final relief sought in the summons (see [18] above). Relief to the effect of the Undertaking was not sought in the Summons (as Mr Thangaraj SC accepted). However, given Mr Whittaker’s evidence of the extent to which Fairbrother and Cleary had been marketed as leading agents of BRE, it is obvious that BRE would have had a strong interest in obtaining a promise which prevented Fairbrother and Cleary from continuing to suggest any continuing association with BRE.

I will next turn to each of the issues of construction of the Undertaking presented for determination, and consistently with what I have said in [57(2)] above, determine whether the requisite ambiguity has been demonstrated.

Mr Ireland’s submission relied on the text of the Undertaking itself, in particular the specific identification of “the phrases … or “Bathurst Real Estate””. In his contention, #bathurstrealestate did not meet that description in its appearance or its meaning. It is a simple point. However, simple points are not necessarily weak or spurious. In this case it is clearly or reasonably arguable and, as will appear below, is correct.

BRE met this argument by submitting they were the same “phrase”. BRE’s final written submissions on this point were:

BRE’s submissions in support of its constructional choice are also clearly or reasonably arguable. It follows that the Court finds that the Undertaking is ambiguous on the critical matter relevant to the contempt charged. For this reason alone BRE must fail.

Turning to the proper construction of the Undertaking, there are six reasons why the Court does not accept BRE’s submissions, approaching the task mindful of the clarity to be expected in an undertaking given the potential consequences for its breach.

First, the Undertaking carefully identifies the forbidden expressions as “phrases”. Textually #bathurstrealestate is neither of those phrases.

Second, “Bathurst Real Estate” in the Undertaking must (by its capitalisation) mean BRE. Similarly, “Bathurst Real Estate Agent” must (by its capitalisation) mean an agent in the employ of BRE. An important textual indicator is that the first obligation in the Undertaking is to remove or refrain from using the phrases as part of Fairbrother and Cleary’s email signatures. Use in an email signature clearly identifies association with BRE. The same would have to be true of marketing or promotional material for the sale of a property which included on it “Jay Cleary – Bathurst Real Estate Agent” or “Sandy Fairbrother – Bathurst Real Estate”. This construction gives effect to the purpose of the Undertaking identified in [65] above and is in accord with the context of the dispute in which the Undertaking was given. Consistently with this, for example, the Undertaking would not prevent the phrases being used in a clearly non-associative context, such as a curriculum vitae used in a marketing brochure setting out employment experience including an entry such as “20xx to 20xx Bathurst Real Estate”.

Third, it would be uncommercial, and arguably nonsensical, to construe the Undertaking on the basis that Fairbrother and Cleary intended (or would have been asked) to bargain away their right to use generic language such as being able to identify as a “Bathurst real estate agent” if asked their occupation, or “Bathurst real estate” if asked their expertise. The capitalisation of the “phrases” makes that construction completely contrary to the text. However, that would be the result if BRE’s submission is correct because, as I develop next, there was no doubt from Mr Burrough’s evidence (including his going onto Instagram during his cross-examination to search handles or hashtags) that while a search for #bathurstrealestate will include results for BRE’s posts, it is nonetheless a generic description equivalent to “real estate in Bathurst”. It is exactly the kind of search entry a person who wanted to buy real estate would enter into Instagram and obtain references including, but far from limited to, BRE’s posts. As Mr Burrough’s demonstration in the witness box showed, a search for #bathurstrealestate produced many posts for other real estate agencies and service providers connected with real estate in the Bathurst area.

Fourth, the preceding point is driven home when it is understood that the first sentence of paragraph [16] of BRE’s submission that I have recorded in [68] above is incorrect: “the phrase “Bathurst Real Estate” can only be used on Instagram by using #bathurstrealestate. It cannot be tagged as #Bathurst Real Estate (spaces deliberate).” There can be no dispute that hashtags on Instagram do not permit spaces. The flaw in this submission is that, as emerged in Mr Burrough’s evidence, the “conversion” into “social media language” of the phrase “Bathurst Real Estate” (referring to BRE) is not #Bathurst Real Estate (spaces deliberate and not permitted on Instagram) but #bathurst_real_estate, which leads one to posts made by BRE (and others because of the multiplicity of other hashtags used on posts).

Fifth, given that the parties were legally advised and if, contrary to the Court’s findings of the relevant background facts they were directing their minds to Instagram as opposed to other online platforms, it would have been a simple matter to have specified the relevant hashtag or hashtags. They did not do so.

Sixth, related to the preceding point, BRE’s submissions referred to dictionary definitions. It has been often observed that dictionaries have limited utility in cases of construction and can distract from the primary task of determining objectively what the particular parties intended by the words they used: TAL Life Limited v Shuetrim (2016) 91 NSWLR 439; [2016] NSWCA 68 at [80] per Leeming JA; Beazley P and Emmett AJA agreeing. However, in this case the definitions do not assist BRE because they demonstrate that while a hashtag can have its origin in a phrase (it can also just be a single word or a set of initials) a hashtag is not the same thing as a phrase.

For these reasons, the Court concludes that on the proper construction of the Undertaking, it does not deal with the use of hashtags. The parties do not appear from the text or the surrounding circumstances to have turned their minds to hashtags. Alternatively, if that construction is wrong, then on its proper construction the hashtag which is the “phrase[s]…“Bathurst Real Estate”” is #bathurst_real_estate. That construction is consistent with the purpose of the Undertaking being to prevent Fairbrother and Cleary representing any association between them and BRE. On either view, none of the defendants has breached the Undertaking by reason of the Publications.

Finally, neither construction leaves the Undertaking meaningless. The Undertaking has meaning and work to do in the context in which it arose, whether or not either of the constructions to which the Court has come is correct.

Mr Ireland QC’s next submission depended on the Undertaking being given personally by Fairbrother and Cleary and not by CFP. BRE’s response was that they could not evade responsibility in that way.

Again, Mr Ireland pointed to the text of the Undertaking. It referred to Fairbrother and Cleary only. However, three other matters support his proposition.

First, there is the background fact that the existence of CFP (and one could add the obvious inference that Fairbrother and Cleary intended to trade as real estate agents through CFP) was known to the parties to the Original Proceedings at the time. Again, given the parties were legally represented, if it was intended that the Undertaking should extend to the conduct of other legal persons controlled or associated in some way with Fairbrother and Cleary, it could easily have said so.

Second, and in proof of the preceding point, the parties did make such provision in the Non-Competition Undertaking, sub-paragraph (f) of which was:

There can be no doubt that sub-paragraph was intended to bind CFP (or any other person or entity which met the description but was not a party to the Original Proceedings) to the same effect as the Non-Competition Undertaking being given by Fairbrother and Cleary.

The fact that legally advised parties included sub-paragraph (f) in the Non-Competition Undertaking but nothing to like effect in the Undertaking (including the familiar “by themselves, their servants or agents”) is a powerful indicator that the Undertaking was drawn to bind only Fairbrother and Cleary in respect of their own personal conduct. That personal emphasis is contextually supported by the Undertaking first dealing with their email signatures.

The foregoing amply demonstrates that the construction advanced by Mr Ireland QC is clearly or reasonably arguable.

I understood BRE’s response to be that the Understanding could not be construed so as to permit it to be undermined by the intervention of a corporate entity controlled by Fairbrother and Cleary or in respect of material which they as a matter of fact could have at least checked before it was published.

The difficulty for BRE is that it did not present a clear constructional choice: how was the Undertaking to be construed to have the result for which it contended on this point? For example, it was not seeking relief against CFP based on cases such as Gilford Motor Co Ltd v Horne [1933] Ch 935 (see also ICT Pty Ltd v Sea Containers Ltd (1995) 39 NSWLR 640) that CFP had been deliberately incorporated to enable its directors to circumvent the Undertaking.

BRE did submit that in drafting and posting the Publications, Smile was acting as the agent of Fairbrother and Cleary. I assume from this that the question of construction raised by BRE is that, by implication, the Undertaking extended on its proper construction to Fairbrother and Cleary by their agents. That is an implication that might be readily made in many orders and undertakings, but like all implications depends on text and context. However, the Court is not satisfied that there is any ambiguity because two clearly or reasonably arguable constructions have not been presented. Having regard to the matters referred to in [81] to [84], the text permits of only one sensible construction: the use of the forbidden phrases that is restrained by the Undertaking is use by Fairbrother and Cleary personally. That does not render it meaningless or without work to do.

There can be no doubt why BRE would have accepted such an undertaking from them personally. BRE would not have wanted any assertions of association to continue. Nor is there any doubt why Cleary and Fairbrother would have given it. As the Court has construed it, it was easy to comply with and of limited practical life because they would have no interest in continuing to suggest an association between them and BRE. Although a matter of speculation, experience suggests it is exactly the kind of provision a departing employee will offer that has significance (even if largely symbolic) to the former employer but in the scheme of a negotiated settlement costs the departing employee little, if anything.

The Hashtag has not been proven to have been personally used in a prohibited way by Fairbrother and Cleary. Therefore, on the proper construction of the Undertaking, no contempt has been made out.

Mr Ireland QC argued that on its proper construction the Undertaking was coterminous with the Non-Competition Undertaking. I will deal with this point briefly because the type of reasoning used in the previous section applies here, but this time in support of the conclusion that the only way the text permits the Undertaking to be read is that it is perpetual (neither party suggested it would endure only for a reasonable time).

The Court’s reasoning is:

This aspect of Mr Ireland QC’s argument fails.

To understand this argument it is necessary to be familiar with how hashtags appear. A complication with that appearance can be, as Mr Burrough explained, what the viewer sees may depend on the device being used, be it a smartphone, Ipad or large computer screen. I will proceed on the basis that hashtags (and the examples in evidence for the Publications demonstrate that a number of hashtags will be allocated to catch as many searches as possible) are there whether they can be seen or not and if they can be seen they will often appear on the side of or under a post. By way of some assistance, Schedule A to this judgment is a copy of one of the Publications that was in evidence (concerning 38 Marsden Lane, Kelso), but which coincidentally also shows a post by BRE under its account name bathurst_real_estate (which becomes its hashtag #bathurst_real_estate) with its logo.

Mr Ireland QC submitted that insofar as the Publications included the Hashtag, it was not used “in” the marketing and promotional materials constituted by the post. I understood the submission to be that any photograph and information about the property (or in one case an inspirational message about CFP “Be the GAME CHANGER”) was the material. His argument was that the Hashtag was a search tool and was not displayed within the post that was the marketing and promotional material.

Mr Thangaraj SC contended that the Hashtag was both integral to any particular post and was itself a form of marketing and promotional material. In considering this argument, it is necessary to put aside the Court’s conclusion that the Hashtag was not the “phrase” “Bathurst Real Estate” (which would be the hashtag #bathurst_real_estate). If that conclusion is right, then even if Mr Thangaraj SC’s argument on the present issue is correct, it will not assist BRE.

On this aspect of the debate between the parties, to have stated the competing arguments is to demonstrate that both are clearly or reasonably arguable. That is sufficient for the Court to conclude, as it does, that this is another aspect of the Undertaking that is ambiguous so that the defendants cannot be convicted for contempt, even if there has been a breach of this aspect of Undertaking on its proper construction.

Turning to the question of proper construction, to my mind the outcome is finely balanced. It requires consideration not only of the meaning of “in” but also to identify what is the relevant “marketing and promotional material[s]”.

Approaching the matter with the requisite caution, the Court has concluded that a stricter construction should be preferred such that the Hashtag has not been used “in…marketing and promotional material[s]” to the extent it appears with the Publications for two reasons.

First, it must be asked what is being marketed and promoted? The answer is provided by the example in Schedule One. Primarily, it is the subject property that is being marketed and promoted by photos (which I assume link to a property description because they are not visible on the smartphone screenshot). However, the post is also a means of marketing and promoting the presenting real estate agency. That is done by their account name appearing at the top of the post. These answers support the conclusion that the Hashtag (or any hashtags) are not part of the marketing and promotional material.

Second, the placement of the hashtags and Mr Burrough’s evidence of how they work supports Mr Ireland’s submission that they are a search term which the person uploading the post allocated to ensure the maximum number of viewers with a potential interest in the subject matter will find it when searching. At its highest, #bathurstrealestate could incidentally promote BRE to someone who knew there was a company called Bathurst Real Estate, but that is not its purpose and it is not part of the marketing and promotional materials.

While the inherent limitations of analogies must always be recognised, the reason referred to in the preceding paragraph can be illustrated by drawing an analogy between catchwords and hashtags. They have a similar role in facilitating searches by persons interested in a particular subject matter. The point is that, in my view, catchwords are not used “in” the judgment (so much is clear from this document where the judgment begins with the heading “Judgment”) but are part of what might be called the ancillary apparatus of the judgment proper. Similarly, the Hashtag is not “in” the marketing and promotional materials but is part of the apparatus of those materials that appears with the post.

For these reasons, the Publications do not establish that the Hashtag has been used “in….marketing and promotional materials (whether online or otherwise)” on the proper construction of those words.

In case this matter goes further, I will briefly set out my reasons why I would not have been satisfied beyond reasonable doubt, even if BRE had succeeded on all other points, that the defendants’ conduct in relation to the Hashtag with the Publications was wilful as opposed to merely casual, accidental or unintentional.

BRE’s argument centred around what it submitted was the defendants’ inability to show they had taken the requisite steps to prevent the breaches charged. To this end it referred in its written opening outline to what was said by Gordon J (then of the Federal Court) in paragraph [8] of her Honour’s judgment in Hercules, which in context is (emphasis added):

Her Honour referred, and the Court was also taken to, the decision of the Supreme Court of Queensland Court of Appeal in Lade & Co Pty Ltd v Black (2006) 2 Qd R 531; [2006] QCA 294 (Lade). Consideration of the majority judgments in that case of Keane JA (as his Honour then was) and Jones J led BRE, correctly in my respectful view, to doubt whether notions of reasonableness were of any relevance. In its final written submissions, BRE said “To the extent “reasonable steps” are relevant (which does not appear to be consistent with Lade).”

Given the result to which the Court has come, it is not necessary for me to resolve whether Gordon J’s observation in Hercules is correct in the light of Lade or as a matter of general law. With the greatest respect to her Honour, I have real doubt as a matter of fact whether it necessarily must follow in every case that if an alleged contemnor has not taken all reasonable steps to prevent a breach (as opposed, again “perhaps”, to any steps at all), a particular breach cannot still be casual, accidental or unintentional.

An inquiry into what could reasonably have been done to avoid the breach risks, in my respectful opinion, distracting from the fundamental question of whether the prosecutor has satisfied its burden to demonstrate beyond reasonable doubt that there was wilful disobedience of the undertaking that was “worse than casual, accidental or unintentional” (Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98; [1986] HCA 46 at 111). The judgment of Keane JA in Lade at [85] – [90] is a clear reminder of the centrality of that fundamental question.

I accept Mr Michaelson’s evidence (see [36] above) that from the time he became aware of the Undertaking on or about 17 April 2019 to becoming aware of a problem on 19 August 2020, “hundreds and hundreds” of posts had gone onto social media that complied with the Undertaking. BRE has proven the eight Publications – an isolated Facebook post on 8 August 2019 and seven Instagram posts between 28 May 2020 and 21 July 2020. While it must be accepted that the obligation to comply with the Undertaking is strict, eight potential breaches out of “hundreds and hundreds” of posts overseen by Ms Victoriano does not, without more, bespeak, let alone prove to the criminal standard, wilful disobedience of the Undertaking.

On the other hand, that statistic of eight out of “hundreds and hundreds” does raise the credible possibility that the breaches, if they be such, were no worse than casual, accidental or unintentional. That possibility therefore gives rise to a reasonable doubt. This is especially so when it is recalled that, as Mr Michaelson also explained, for all the other Smile agencies the posts would include region specific hashtags such as #bowralrealestate or #portmacquarierealestate. The other matter which supports this conclusion is the complete lack of resistance by Smile to dealing with the issue immediately once it was made aware of it. That is not consistent with wilfulness.

For these reasons, and having regard to the totality of the evidence, I would not have been satisfied beyond reasonable doubt that any of the defendants had engaged in wilful disobedience of the Undertaking by reason of the Hashtag appearing with the Publications.

The proceedings will be dismissed. Subject to any application for a special order (which the parties will be given an opportunity to notify to my Associate), costs should follow the event.