Haritopoulos Pty Ltd & Anor v Scott & Ors [2007] VSCA 174

Court of Appeal (Vic)|2007-08-30|Before: BUCHANAN, NETTLE and NEAVE JJA

CONTEMPT OF COURT - Breach of two Court orders - Contemnors changed locks, entered premises and removed assets and vehicles in possession of receivers - Alleged sale of some vehicles and assets to third party - Plea of guilty to contempt of first order - Whether wilful - Contempt of second order denied - Whether wilful - Whether penalty manifestly excessive - Appeal against penalty upheld in part.

2 This is an appeal against convictions for contempt of court constituted by wilful and contumacious breach of orders of 4 April 2006 and 5 May 2006. For the contempt of the order of 4 April 2006, the judge fined each appellant the sum of $100,000 and, for the contempt of the order of 5 May 2006, the judge fined the first appellant a further $100,000 and sentenced the second appellant to a term of imprisonment of 30 days. The appellants contend that the judge ought not to have been satisfied beyond reasonable doubt that the appellants' disobedience of the orders was wilful and contumacious. In the alternative, they argue that, if they were properly convicted, the penalties are manifestly excessive.

**3 The facts as found below were as follows. In August 2005 CBFC Ltd ("CBFC") appointed the respondents, Alan Scott and Matthew Muldoon, as receivers of Asset Management Solutions Pty Ltd ("AMS") and Golden Chef Australia Pty Ltd. ("GCA"). AMS and GCA were part a group of companies controlled by the second appellant ("Mr Charitopoulos"), and the appointment was made out of court pursuant to securities executed by the Charitopoulos group in favour of Commonwealth Bank of Australia ("CBA") and Commonwealth Bank Finance Corporation ("CBFC"). Upon their appointment, the receivers and CBA and CBFC entered into a licence agreement which permitted the Charitopoulos companies to use the assets of AMS and GCA and to occupy premises at Athol Park, South Australia ("the Athol Park premises") that were leased by GCA from another Charitopoulos company, the first appellant ("Haritopoulos").

4 The Charitopoulos companies defaulted in payments due under the licence agreement, and in December 2005 the parties entered into a deed of agreement**

which required inter alia that the CBA and CBFC facilities be refinanced. But following further defaults in payment, in January 2006 the receivers terminated the licence agreement and, as was their right under the deed of agreement, took possession of the assets and the Athol Park premises.

**5 Charitopoulos thereupon asserted that GCA was in arrears of rent for the Athol Park premises, for which he alleged that Haritopoulos was entitled to distrain, and in purported exercise of that alleged right of distraint, on 7 March 2006 Charitopoulos caused the locks of the Athol Park premises to be changed and he took possession of the premises and the assets.

6 The receivers and CBA and CBFC disputed Haritopoulos' claims and actions and instituted a proceeding in the Commercial List of the Commercial and Equity Division seeking inter alia injunctive relief to enable them to regain possession of the Athol Park premises and the assets which were held there. They contended that under the deed of agreement they were entitled to remain in possession until 30 March 2006.

7 On 4 April 2006 a judge of the Commercial and Equity Division made the following orders:**

"1. The Defendants permit the Firstnamed and Secondnamed Plaintiffs [the receivers] to remain in possession of the premises at 203-215 Hanson Road, Athol Park, South Australia...until 4.30pm on 5 May 2006 or further order.

The Firstnamed and Secondnamed Plaintiffs are released from their undertaking given on 24 March 2006 not to dispose of any assets the subject of orders made 24 March 2006.
The further hearing of the Plaintiffs' summons dated 15 March 2006 is adjourned to 12 May 2006.
The time period fixed by the orders made 24 March 2006 for the Defendants to file and serve any affidavit material on which they intend to rely at the hearing of summons be extended to 14 April 2006.
There is liberty to apply upon 2 business days written notice.

The order recited undertakings by the receivers to pay forthwith rent for the Athol Park premises for the periods 6 January 2006 to 31 January 2006, February 2006 and 1 March 2006 to 5 March 2006 and to pay rent fortnightly in arrears for the period from 1 April 2006.

**8 Pursuant to the orders, the receivers resumed possession of the Athol Park premises and paid the rent the subject of the undertaking, and they engaged a firm of auctioneers, Mason, Gray Strange, to conduct an auction of the assets at the premises on 27 and 28 April 2006.

9 Mr Charitopoulos was opposed to the auction because he wanted the assets in order to continue to carry on part of the business previously carried on by GCA, and at 6.20 pm on 24 April 2006, Mr Charitopoulos and Haritopoulos notified the receivers' solicitors, Middletons, of an application for an injunction to be heard in the Supreme Court of South Australia on 26 April 2006 for orders to halt the auction.

10 Layton J heard the application on the afternoon of 26 April 2006 but dismissed it with costs. The auction thus proceeded as planned on 27 and 28 April 2006.

11 Mr Charitopoulos attended the auction with an associate ("Dobric") and was the successful bidder for 17 vehicles and a variety of other items and equipment to a total value of $320,000. But, as the judge found below, and is not now disputed, neither Mr Charitopoulos nor Dobric had any intention of paying for what they purchased.

12 On 1 May 2006, Mason Gray Strange rendered to Mr Charitopoulos an invoice for the $320,000, payable by 4.00 pm on 2 May 2006. Later that day, Mr Charitopoulos' solicitor, Mr McNamara, sent a fax to Middletons asserting that ownership of some of the vehicles was in dispute and requiring that the cost of those vehicles be deducted from the $320,000. The fax stated that:**

" ... our client requires a credit of up to $300,000 being for rental owed by [the receivers] to [Haritopoulos] for the period from 4 August 2005 to 6 January 2006.

... On this basis our client requires to attend the premises on Monday and take possession of the items it purchased ... "

" ... apply to the Supreme Court of Victoria to have the items released."

13 Middletons replied by e-mail to Mr McNamara on 2 May 2006, after unsuccessfully attempting to fax him on 1 May 2006, stating that: "The sale price for these items is payable in full", and that Mr Charitopoulos would only be entitled to take possession of the vehicles if he paid for them by 4.00 pm that day. Middletons also rejected "the proposition that the receivers owe rent to Haritopoulos and Evia Pty Ltd ("Evia") for rent of the Athol Park and Clayton premises (of which Evia was the registered proprietor) for the period from 4 August 2005 to 6 January 2006". They observed that the rent had been paid by GCA for the months of August, September and possibly October 2005, and that:

"It is wholly inappropriate for your client to bid at auction (thereby excluding other potential purchasers from buying relevant plant, equipment and vehicles) and then seek to deduct from the purchase price payable a spurious and misconceived set-off claim. We will bring this matter to the attention of [the judge] in due course."

**14 Later that day (2 May), Mr Codling of the receivers received a tip-off that Mr Charitopoulos intended to retake possession of the Athol Park premises that evening. Then, at around 6.00 pm, a locksmith from Australian Locksmiths arrived at the premises and announced that he intended to change the locks on Mr Charitopoulos' instructions. Mr Codling responded by showing the locksmith a copy of the order 4 April 2006 and saw him off the premises.

15 Next, at around 6.20 pm, Mr Charitopoulos arrived at the premises accompanied by Dobric. He told Mr Codling that he had come because he was "taking possession" of the vehicles and distraining for rent. Mr Codling sought to persuade him not to do so. He showed him the order of 4 April 2006 and told him, correctly, that it permitted the receivers to remain in possession of the premises and the assets situate there until 5 May 2006. But Mr Charitopoulos responded with words to the effect that the laws from a Victorian Court "meant nothing" in South Australia.

16 At that point, the locksmith returned and began to pick and change the locks. Mr Della Torre of Mason Gray Strange attempted to prevent him from doing so. But Mr Charitopoulos intervened and physically restrained Mr Della Torre. The police were called and expressed the view that the dispute was a civil matter. One of them also stated, however, that Mr Codling was obliged to allow Mr Charitopoulos to enter the premises. Mr Codling disagreed with that view and asked the police to call their duty solicitor. But the duty solicitor was unavailable. Mr Codling therefore desisted from attempting to prevent the locksmith from changing the locks. Mr Charitopoulos and Dobric entered the premises and the locksmith completed his work. They left a short while later.

17 Mr Codling and Mr Della Tore departed at 8.00 pm leaving behind two security guards in order to protect the assets. But at around 8.50 pm, Mr Christopoulos and Dobric in company with another seven to nine men arrived at the premises in five cars and two trucks. They removed books and records from the office and approximately 15 motor vehicles (some of which had been knocked down to Mr Charitopoulos at the auction). One of the security guards, Mr Mathews, telephoned Mr Codling and Mr Codling arrived with the police at about 11.30 pm. The police then instructed Mr Charitopoulos to lock up the premises and not to remove any more vehicles. Mr Codling and Mr Charitopoulos and his party departed the premises together at about 1.00 am, once more leaving the security guards to care for the assets. But at about 1.40 am, Mr Charitopoulos returned to the premises with an assistant and removed still further items. One of the security guards then protested, but Mr Charitopoulos pushed him away.

18 By letter dated 2 May 2006, delivered the next day, Mr Charitopoulos stated that he had distrained for rent and that:**

"I am further aware that the Victorian Courts granted your office 'possession' of which I will follow by means of allowing Sims Partners staff or other nominated persons possession to the factory by means of joint possession assuming reasonable notice is given. At no time can any item be removed from the said premises without any knowledge or approval, furthermore your staff or nominated person will only be allowed access to the site with my representatives being present."

The letter also attached a purported notice of re-entry and termination of the tenancy, and required GCA to "deliver up possession of the premises to Haritopoulos or its duly authorised agent, Dusko Dobric or nominee of Booze2U Pty Ltd of PO Box 2575 Regency Park SA 5942".

19 On the same day, there was served on the receivers a statement purportedly given under the Landlord and Tenant Act dated 2 May 2006, signed by Dobric on behalf of Haritopoulos, which stated that:

"I have this day distrained all goods located within 203-211 Hanson Road, Athol Park, South Australia 5012 for $300,107.82 being the amount of rent due and costs."

**20 At 8.30 am on 3 May 2006, Mr Charitopoulos met Mr Della Tore at the premises and handed over a key to the premises. At the same time, Mr Charitopoulos helped himself to still more vehicles from the premises, thus bringing the total number removed to 21.

21 Later on 3 May 2006, a judge of the Commercial and Equity Division made orders requiring Haritopoulos and Mr Charitopoulos by 12.00 noon on 3 May 2006 to vacate the premises (if not already vacated) and by 4.15 pm on 3 May 2006 to return to the Athol Park premises all items which they removed or caused to be removed from the premises after 6.00 pm on 2 May 2006. But the receivers were unable to serve those orders on Mr Charitopoulos personally and they were not complied with.

22 In the following days, the receivers located about a dozen of the 21 vehicles. They were first seen on 3 May 2006 at 85 Harrison Road, Dudley Park. That property was owned by Australian Pedicabs Pty Ltd of which the directors were Mr Charitopoulos' mother and father, George and Rosa Charitopoulos. The registered office of the company was the same as that of Haritopoulos. But before the receivers could retake possession of the vehicles, Dobric and others removed them to another place. Mr Charitopoulos was seen in attendance, driving a silver Mercedes Benz.

23 Next, on 5 May 2006, the judge who made the orders of 3 May 2006 made the following further orders:**

"That within 72 hours of being served with these orders, the Secondnamed Defendant (Haritopoulos Pty Ltd) and the Thirdnamed Defendant (Pantelis Charitopoulos) deliver up to the Plaintiffs, care of Mason Gray Strange Auctioneers and Valuers at 368-378 Torrens Road, Kilkenny, South Australia 5009, all items which the Secondnamed and Thirdnamed Defendants removed or caused to be removed from the Athol Park Main premises at 203-215 Hansen Road, Athol Park, South Australia after 6.00 pm on 2 May 2006.

Within 72 hours of being served with these orders, the Secondnamed and Thirdnamed Defendants each swear, file and serve an affidavit deposing as to its or his knowledge of the precise whereabouts of the assets listed in the schedule to these orders, to the extent that they have not been delivered up under order 1, and in the case of such assets, deposing further as to the person or persons having the possession or control of those assets, and how that person or those persons acquired such possession or control.

**24 Later that day, Mr Codling and a process server, Mr Eglinton, located and recovered 13 of the vehicles from premises at Wingfield Street, albeit that the number plates, registration stickers and other identifiers had by then been removed from the vehicles. But there were still several more vehicles which needed to be recovered and Mr Eglinton ran into difficulties in attempting to effect personal service of the orders of 5 May 2006.

25 On instructions, Mr Eglinton "staked out" Mr Charitopoulos' residential address. When he first attended there on 8 May 2006, the lights were not on and no-one answered the door. By the morning of 9 May 2006, however, he had ascertained that Mr Charitopoulos' business was being conducted from premises at 83 Harrison Road, and early that morning he observed a silver Holden Statesman with the number plate "ARCHIE" parked outside Mr Charitopoulos' home. Later that day, he observed the same vehicle in Harrison Road travelling from the direction of the 83 Harrison Road premises. He could not see the driver clearly, because the windows of the car were tinted, and he had not seen Mr Charitopoulos before. But based on information given to him by an associate, he believed that the driver might be Mr Charitopoulos and that the vehicle might be heading to the Epworth Building in Pirie Street in the Adelaide CBD where he knew that Mr Charitopoulos had an office.

26 The Epworth building was situate directly across the street from the offices of the receivers and Mr Eglinton knew that Mr Heidt of the receivers had seen Mr Charitopoulos before. He therefore telephoned Mr Heidt on his mobile telephone and told him that he was following a Holden Statesman which he suspected was being driven by Mr Charitopoulos and was heading for the Epworth Building. He asked Mr Heidt to go down from his office to the street to identify the driver of the Holden Statesman (in the event that the car arrived at the Epworth Building). Mr Heidt said that he would. He telephoned back about four minutes later and said that he could see Mr Charitopoulos standing outside the Epworth Building in Pirie Street, talking on his mobile telephone and wearing a suit jacket, with a white shirt and no tie.

27 Mr Eglinton continued to follow the Holden Statesman until it reached the Epworth building. At approximately 3.00 pm, he observed the car pull over into a laneway near Pirie Street, near a man talking on a mobile telephone and wearing clothing which matched the description given by Mr Heidt. The driver of the Holden Statesman did not get out of the car and was not clearly visible, but he opened the door and Mr Eglinton saw him and the man standing in Pirie Street acknowledge each other. At that point Mr Eglinton double-parked his car on the opposite side of the street and approached the man standing in Pirie Street. He saw that the man had a scar on the right side of his face and wore a suit, white shirt and no tie. He stood in front of the man, face to face, and asked him: "Are you Pantelis Charitopoulos?", and the man replied: "No, I'm not". Mr Eglinton said: "Well, I think that you are" and attempted to hand the man the 5 May 2006 order. But the man refused to take it and so Mr Eglinton left it at his feet, saying as he did so: "Pantelis, you've been served with court orders".

28 On 10 May 2006 Mr Eglinton recovered another of the missing vehicles from a motor repairer and then visited the offices of the auctioneers. He there saw the man whom he had served the previous day attempting to negotiate the use of another of the vehicles for the purposes of his business that day. After that conversation had concluded, Mr Eglinton asked: "Are you Pantelis Charitopoulos today, are you?", and Mr Charitopoulos replied: "Yes, and I was Pantelis yesterday". Mr Eglinton took that to be an implicit acknowledgement of service.

29 The next day, however, Mr McNamara wrote to Middletons alleging that the 5 May 2006 orders had been served on man called Koimtsidis and not on Mr Charitopoulos.

30 By summons filed on 22 May 2006 the respondents sought orders that Mr Charitopoulos and Haritopoulos be punished for contempt of the orders of 4 April 2006 and 5 May 2006.

31 Because of the dispute about service of the orders of 5 May 2006, Mr Eglinton was instructed to re-serve those orders. To that end, and also to deliver some other documents by way of substituted service on George Charitopoulos, on 2 August 2006 Mr Eglinton attended at Mr Charitopoulos' residence at about 8.50 am. He knocked, and the door was opened by a woman. Mr Eglinton returned to his car, waited for a few minutes and then knocked on the door again. It was then opened by Mr Charitopoulos. Mr Eglinton had with him the 5 May 2006 order and a separated bundle of documents for George Charitopoulos (to be left at the residence under the order for substituted service). He handed the documents for George Charitopoulos, with a covering letter to George Charitopoulos, to Mr Charitopoulos. Mr Charitopoulos looked at the documents and said: "But I'm not George, I'm Pantelis". Mr Eglinton replied: "Yes, I know you're Pantelis Charitopoulos. I have an order here for you". He then handed the bundle of documents for George Charitopoulos and a separate bundle comprised of the 5 May 2006 order to Mr Charitopoulos, who took them and got into a car that was parked on the property.

32 Later that day, Mr McNamara wrote to Middletons stating that George Charitopoulos no longer lived at Mr Charitopoulos' residence. The documents for George Charitopoulos which Mr Eglinton had handed to Mr Charitopoulos were returned with the letter.

33 Despite the order of 5 May 2006, Mr Charitopoulos and Haritopoulos did not return any more of the assets removed from the Athol Park premises on 2 May 2006. Instead, in answer to the application that Mr Charitopoulos and Haritopoulos be punished for contempt of the orders, Mr Charitopoulos deposed in an affidavit sworn on 30 August 2006, that:

• he had removed the assets from the premises on 2 May 2006 (being those identified in Schedule A to his affidavit) which comprised 21 motor vehicles and 27 other items;

• the receivers had recovered 13 of the vehicles (being those vehicles identified in Schedule B to the affidavit);

• the balance of the items were in the possession of Booze2U Pty Ltd, having been sold by Haritopoulos to Booze2U Pty Ltd on 4 May 2006.

34 In a further affidavit sworn on 4 September 2006, Mr Charitopoulos deposed that he was attempting to secure the release of sufficient funds to pay to the receivers or into court the value of the assets taken by him which had not returned to the receivers, which he calculated to be the auction value of $72,549.60.

35 That affidavit was followed by letter dated 3 October 2006 from Mr McNamara to Middletons advising that Mr Charitopoulos and Haritopoulos would pay the receivers the value of the goods removed from the premises, ascertained "by applying the auction realisation price to the items in question". The letter proposed that the amount of $72,549.60 be paid and sought details as to the account into which the funds should be paid. On 5 October 2006 an Oakley Thompson & Co trust account cheque in the sum of $72,549.60 was delivered to the offices of Middletons.

36 By letter from Middletons to Oakley Thompson dated 5 October 2006, Middletons advised that the receivers welcomed the offer to pay for the assets taken from the premises on 2 May 2006 but that what had been offered was not enough. Middletons stated that the value of the misappropriated vehicles was approximately $308,098, based on the auction price agreed to be paid by Haritopoulos (reflected in Mason Gray Strange's invoice to Haritopoulos dated 1 May 2006), or the auction realisation value of the vehicles as obtained by the receivers from Mason Gray Strange. The value of other misappropriated assets, it was said, was at least $13,247.85 (ascertained from the Mason Gray Strange invoice to Haritopoulos Pty Ltd dated 1 May 2006) and the value of the vehicles recovered by the receivers or their agents since 2 May 2006 was $208,269. Therefore, it was said, the value of the vehicles and other assets retained by Mr Charitopoulos and Haritopoulos was $109,076.85 ($308,098 + $13,247.85 - $212,269), and the receivers would accept payment of the sum of $109,076.85 "representing the value of the assets taken from the receivers on 2 May 2006". There was no response to that letter.

37 The hearing of the contempt application began on 9 October 2006 and continued on 10, 11, 20 and 24 October and 8 November 2006.

38 On 8 February 2007 the judge published reasons in which she found that Mr Charitopoulos and Haritopoulos were both guilty of wilful and contumacious contempt of the orders of 4 April 2006 and 5 May 2006. Her Honour then adjourned the further hearing of the matter in order to enable the appellants to file any further material on which they sought to rely on penalty.

39 On 30 March 2007 Mr Charitopoulos deposed that, having read the judge's reasons, he had sent the following email to Dobric on 10 February 2007:**

As you now (sic) I am presently over seas, (sic) but am writing to you on a matter that is very urgent and distressing.

I have just been advised by Tim Davies my lawyer in Melbourne that the Court has found me guilty of contempt of court in relation to me taking the trucks and other assets from the Athol Park premises prior to the auction.

For some reason the court does not believe that I sold the trucks and assets to Booze2U and as a result the contempt is continuing. To over come (sic) this I need to return these to Mason Gray & Strange.

I know you are using the trucks and assets in your business, but ask that you return them to Mason Gray & Strange, and then maybe you can negotiate some type of deal with Jamie Codling or Sim (sic) Partners to get them back for your use. If this is done, I should be able to satisfy the court that the contempt is not continuing.

Dusko, I could go to gaol if this is not done so I ask that you do it straight away.

Mr Charitopoulos further deposed that in response he had received the following email reply from Dobric dated 12 February 2007:

I have received your email asking me to send the trucks that Booze2U purchased from you back to Mason Gray & Strange.

You correctly say that I am using the trucks in my business. My company bought them from your company and paid a deposit and is paying a fair price for them.

I am not returning them to Mason Gray & Strange. I have spent time, effort and money to get the lunch rounds running and cannot afford to have these disrupted. I cannot risk not being able to get the trucks back from Mason Gray & Strange.

I am going to see a solicitor to protect my interests and that of Booze2U.

Mr Charitopoulos added that he had since spoken to Dobric "on a number of times" and asked him to return the vehicles, but that on each occasion Dobric had refused.

**40 At the hearing on penalty on 3 April 2007, Mr Charitopoulos and Haritopoulos through their counsel undertook to pay to the receivers an additional sum of approximately $36,000, being the difference between the $72,549.60 tendered on 5 October 2006 and the sum of $109,076.85 sought by the receivers in Middletons' letter of the same date. That sum of $109,076.85 was in fact paid in full on 11 April 2007.

41 On 20 April 2007 the judge published further reasons in which she observed that the payment of $109,076.85 was a significant measure in remedying the consequences of the contempt of the 5 May 2006 order, but that it did not nullify the contempt. Her Honour further found that the purported sale of assets to Booze2U Pty Ltd was a sham which did not constitute an impediment to Haritopoulos' and Mr Charitopoulos' possession and control of the relevant assets. Her Honour noted that the evidence given at the hearing on liability as to Mr Charitopoulos' personal financial circumstances had been contradictory - it indicated that he had interests in family trusts and companies with significant assets and that he possessed three luxury vehicles, which indicated an affluent lifestyle - but that Mr Charitopoulos had chosen not to give any further evidence to resolve the ambiguities or to clarify earlier contradictions in his evidence on those issues. In the result, her Honour said, there was no evidence relevant to quantum or the likely impact of any fine which might be imposed on Mr Charitopoulos, or whether it might be necessary to extend time in order to enable him to pay a fine.**

42 In their notice of appeal, the appellants attack the judge's findings and reasoning on a large number of grounds. As the appeal was argued, however, it came down essentially to three issues:

(a) whether the judge erred in holding that the 5 May 2006 order was served on Mr Charitopoulos on 2 August 2006;

(b) whether the judge erred in holding that the 5 May 2006 order was served on Mr Charitopoulos on 9 May 2006; and

43 The judge's expressed her conclusions as to the issue of service on 2 August 2006 as follows:

"361 Mr Eglinton deposed that on 2 August 2006, he served a further copy of the 5 May 2006 order on Pantelis Charitopoulos.

Mr Eglinton deposed that Mr Charitopoulos was known to him because he had served him personally on 9 May 2006 with orders in this proceeding. He also had a conversation with him at a meeting on 10 May 2006 at the offices of Mason Gray Strange.
He deposed that he served Mr Pantelis Charitopoulos on 2 August 2006 by attending his residence at 39 Elderslie Avenue, Fitzroy in South Australia at about 8.50am. He knocked, and the door was opened by a woman. Mr Eglinton returned to his car, waited for a few minutes and knocked on the door again later. The door was opened by Mr Charitopoulos. Mr Eglinton had both the 5 May 2006 order and a bundle of documents for George Charitopoulos (to be left at the residence under an order for substituted service) in separate bundles. He handed the documents for George, which had a covering letter to George, to Mr Charitopoulos. Mr Charitopoulos looked at the documents and said he was not George, but Pantelis. That was acknowledged by Mr Eglinton, who said he knew he was not George, but he thought it best to hand the documents for George to him.
Mr Eglinton deposed that Mr Charitopoulos again said, 'But I'm not George, I'm Pantelis' to which Eglinton said, 'Yes, I know you're Pantelis Charitopoulos. I have an order here for you'. He then separately handed the bundle of documents for George and the 5 May 2006 order to Mr Charitopoulos, who took them and got into a car parked on the property.
Mr Eglinton reiterated in cross-examination that he handed the 5 May 2006 order to Pantelis Charitopoulos separately, with the words he 'had an order for him'. He testified that he would not mix up orders intended for service on different people. He clearly remembered serving the documents separately.
Mr Charitopoulos deposed that on 2 August 2006 he did not receive a copy of the 5 May 2006 order and that Mr Eglinton did not state that he had an order for him. In his affidavit, he deposed that the documents handed to him were contained in an envelope to which he referred several times. At the hearing, he stated that he was unsure about the envelope. He gave no convincing explanation for his altered recollection. I refer to the quality of Mr Charitopoulos' evidence in detail below.

367 Mr McNamara deposed that he returned the bundle of documents addressed to George to Middletons.

Mr Eglinton's affidavit of 11 August 2006 referred to the bundles of documents forwarded by Middletons for service on George Charitopoulos and enumerated the four court documents, but did not refer to the 5 May 2006 order as included in the bundle of documents intended for George. However, the exhibit constituting the documents returned to Middletons by Mr McNamara included a copy of the 5 May 2006 order with a blue stamp on it. Mr Eglinton was unable to explain its presence. He did not notice it at the time. He testified that his copy of the 5 May order, which he served, did not have a blue stamp.
I am unable to determine why a copy of the 5 May 2006 order was included in the bundle addressed to George Charitopoulos and subsequently returned to Middletons. I do not consider, however, that the presence of a copy of the 5 May 2006 order with a blue stamp on it in that bundle detracts from the credibility of Mr Eglinton's clear and detailed evidence of his separate service of the 5 May 2006 order on Mr Charitopoulos on 2 August 2006.
Mr Eglinton deposed that the man he personally served on 3 August 2005 identified himself as Pantelis Charitopoulos, with whom he had previously dealt with in the course of the proceeding, and had previously personally served.

I am ... satisfied, to the requisite standard, that the 5 May 2006 order was served on Mr Charitopoulos on 2 August 2006. I accept the evidence of Mr Eglinton and reject that of Mr Charitopoulos. I do not consider that the presence of a copy of the 5 May 2006 order in the bundle of documents returned by Mr Charitopoulos' lawyer to Middletons, is a basis for reasonable doubt that Mr Eglinton, on 2 August 2006, served the 5 May 2006 order separately on Mr Charitopoulos, as he testified."

**44 The appellants contend that the judge erred in accepting Mr Eglinton's evidence that he handed Mr Charitopoulos a copy of the order of 5 May 2006 separately from the bundle of documents addressed to George Charitopoulos. They argue that the objective and other evidence points strongly to the conclusion that the only copy of the order which Mr Eglinton handed to Mr Charitopoulos was a sealed copy of the order clipped to the bottom of the sheaf of documents for George Charitopoulos. If so, they say, Mr Charitopoulos would not have been aware of its existence and thus it was not effective service. They rely in support of that contention on the following:

First, on 23 June 2006, Middletons wrote to Mr Heidt of the receivers enclosing "a sealed copy" of the order of 5 May 2006 and asking him to liaise with Mr Eglinton to "arrange to have a copy of the order served" on Mr Charitopoulos. The appellants contend it is likely that Mr Heidt forwarded the sealed copy of the order to Mr Eglinton for service and that he in turn used the sealed copy for the purposes of service rather than a photocopy as he claimed.

Secondly, on 24 July 2006 Middletons sent to Mr Eglinton the bundle of documents for substituted service on George Charitopoulos. Middletons sent a covering letter with the bundle listing each of the documents in the bundle. The list did not refer to any order of 5 May 2006. Later, however during the course of the hearing, counsel for Mr Charitopoulos called for production of the documents which Mr McNamara had returned to Middletons on 2 August 2006 and, in answer to the call, counsel for the receivers produced a bundle of documents comprised of those documents listed in Middleton's covering letter of 24 July 2006 to Mr Eglinton as well as a sealed copy of the order of 5 May 2006 clipped to the bottom of the bundle. The appellants submit that, viewed against that background, it is probable that Mr Eglinton clipped the sealed copy of the order to the bottom of the bundle of documents for George Charitopoulos before handing it to Mr Charitopoulos, and that he then handed all of the documents as one bundle to Mr Charitopoulos in the form in which they were returned by Mr McNamara.

Thirdly, Mr Charitopoulos swore that, immediately after Mr Eglinton handed him documents on 2 August 2006, he took all of the documents and gave them to Mr McNamara. In turn Mr McNamara swore that he returned to Middletons all of the documents which Mr Charitopoulos had given him. In light of that testimony, and the absence from the documents returned to Middletons of any photocopy of the order of 5 May 2006, the appellants submit it is improbable that Mr Eglinton served a photocopy of the order of 5 May 2006, and thus probable that the only copy of the order of 5 May 2006 which Mr Eglinton gave to Mr Charitopoulos on 2 August 2006 was the sealed copy of the order clipped to the bottom of the bundle for George Charitopoulos.

Fourthly, the appellants argue that logically it was not open to the judge to accept Mr Eglinton's testimony as to having served a photocopy of the order of 5 May 2006 without finding that Mr Charitopoulos deliberately removed or withheld the photocopy from the documents which he took to Mr McNamara and which Mr McNamara returned to Middletons. Further, in the appellant's submission, it was not open to make the latter finding, because it was not put to Mr Charitopoulos in cross-examination that he deliberately removed or withheld the document.

45 I shall deal with those points in turn. Other things being equal, one might think that Mr Eglinton would have used the sealed copy of the order for service on Mr Charitopoulos. But that overlooks Mr Heidt's unchallenged testimony that, after he received the sealed copy from Middletons, he had a telephone conversation with Mr Eglinton wherein Mr Eglinton said that he still had copies of the 5 May 2006 order and that he would use one of those copies for service. For that reason, Mr Heidt said, he did not believe that he forwarded the sealed copy to Mr Eglinton.

46 Equally, the fact that a sealed copy of the order of 5 May 2006 was clipped to the bottom of the bundle produced in court might be thought to suggest that it was clipped to the bottom of the bundle when the bundle was handed to Mr Charitopoulos. But that assumes continuity, of which there was no evidence. For all one knows, the sealed copy of the order could have been added to the bundle after service on Mr Charitopoulos (either before or after the bundle was returned to Middletons). Further, and even if it were clipped to the bottom of the bundle at the time of service, that fact of itself would not gainsay Mr Eglinton's evidence that he served a photocopy of the order of 5 May 2006 on Mr Charitopoulos in addition to the bundle for George Charitopoulos. Granted, there would not be much utility in serving the photocopy as well as the sealed copy. Of itself, that might cause one to wonder whether Mr Eglinton served the photocopy as he claimed. But that process of reasoning assumes that Mr Eglinton was aware that the sealed copy was attached to the bundle. To the contrary, however, Mr Eglinton's evidence was that he did not read in detail the documents for service on George Charitopoulos - the bundle was clipped together with a bull dog clip when it came to him and he served it in that form - and, just as importantly, as he said:**

"Because I would know that if I'm serving somebody with documents I need to make sure they know what's in those documents and if it's a bundle of documents for one person and I'm serving it on them personally on that person, I must make sure that any documents I'm serving personally need to be separate."

**47 Mr Charitopoulos' evidence that he gave Mr McNamara all of the documents handed to him by Mr Eglinton suggests that Mr Eglinton did not give Mr Charitopoulos a photo copy of the order of 5 May 2006. But the strength of that suggestion is dependent on Mr Charitopoulos' creditability and reliability as a witness. The judge found that he was not a truthful, consistent or credible witness. As her Honour put it, he did not scruple to give false evidence where he considered that it would serve his purposes.[1] Contrastingly, the judge found that Mr Eglinton was an impressive, credible witness,[2] and Mr Eglinton was clear in his evidence that he had served a separate photocopy of the order of 5 May 2006. When it was put to him in cross-examination that the only possible explanation for the absence of the photocopy was that he had not served it on Mr Charitopoulos he responded clearly that that was incorrect - he said that a possible explanation for the missing photocopy was that Mr Charitopoulos had not handed all the documents back - and, significantly, at that point counsel for Mr Charitopoulos acknowledged that it was possible that Mr Charitopoulos had removed the photocopy from the documents handed to Mr McNamara.

48 Contrary also to the appellants' submission, it does not detract from Mr Eglinton's credibility or reliability that he could not recall seeing a blue stamped copy of the order and was unaware that the bundle intended for George Charitopoulos may have included such. As he said, it was not his job to read the documents in detail but simply to make sure that they were physically delivered to the right person. He did not look at them in detail.

49 Counsel for the appellants drew attention to the fact that when Mr Eglinton first deposed[3] to service of the order of 5 May 2006 on Mr Charitopoulos on 2 August 2006, he expressed himself as follows:**

"(d) I handed the Documents [scil. for George Charitopoulos] and the 5 May 2006 Orders to Pantelis Charitopoulos who took them from me and we had a conversation to the following effect:

(ii) Pantelis Charitopoulos then looked at the documents and said, 'I'm not George, I'm Pantelis,'

(iii) to which I replied, 'Yes, I know you're not George. Some of these documents are for George. I thought it best to hand them to you rather than affix them to the door.'

(iv) Pantelis Charitopoulos then said again, 'But I'm not George, I'm Pantelis,'

(v) to which I said, 'Yes I know you're Pantelis Charitopoulos. I have an order here for you.'

(e) I handed Pantelis Charitopoulos the Documents and the 5 May 2006 Orders and he took them from me. He then walked away from me towards a Mercedes motor car which was parked on the property and got into the car.

In counsel's submission, the effect of what was there said is that Mr Eglinton handed the bundle of documents for George Charitopoulos and the order of 5 May 2006 together as one to Mr Charitopoulos and not separately as Mr Eglinton said in his viva voce evidence.

**50 I reject that submission too. To start with it does not appear to me that what Mr Eglinton first deposed to was inconsistent with there being two separate bundles. The natural and ordinary meaning of what was stated in the affidavit of service is consistent with two separate bundles.

51 Secondly, counsel did not put to Mr Eglinton in cross-examination that the effect of what he had deposed to was that there was only one bundle. The highest the challenge to the contents of his affidavit went was this:**

"[COUNSEL]: Then you said Phase 2 and handed over the 5 May orders and you said, 'I've got orders for you'. Have a look at Paragraph [5(d)(iii)] of your affidavit? - - - M'mm.

[COUNSEL]: Do you see that you there record the conversation as taking the form of you saying, 'Yes, I know you're not George. Some of these documents are for George'. Did you say, 'Some of these documents are for George'? - - - If it's in the affidavit I must have.

[COUNSEL]: What about the words, 'I thought it best to hand them to you rather than affix them to the door'. Did you say that? - - - Yes I did.

[COUNSEL]: When you were recalling what was said in answer to my questions a little earlier, you didn't recall saying that did you? You certainly didn't refer to it? - - - I didn't refer to it, no.

[COUNSEL]: Is it possible the documents were in an envelope that you handed over to Mr Charitopoulos? - - - If they were in an envelope he wouldn't have been able to read the letter.

[COUNSEL]: I was just asking you whether you recollect that they were in an envelope? - - - They weren't in an envelope and he wouldn't have been able to read the letter if they were.

[COUNSEL]: Certainly your recollections that he made no oral response to your words, 'I have orders here for you'? - - - I can't remember if he made any response to that, no.

[COUNSEL]: Is it possible he didn't hear you? - - - I have no idea. He took the documents."

52 Thirdly, it is apparent that this part of the cross-examination was premised on Mr Charitopoulos deposition[4] that Mr Eglinton had handed him an envelope and said: "These documents are for George Charitopoulos" and that: "At the time that Mr Eglinton gave me the envelope, I received no other documents. I did not open the envelope and am unable to say what documents were contained in it". But as the judge observed:

"Mr Charitopoulos deposed that on 2 August 2006 he did not receive a copy of the 5 May 2006 order and that Mr Eglinton did not state that he had an order for him. In his affidavit, he deposed that the documents handed to him were contained in an envelope to which he referred several times. At the hearing, he stated that he was unsure about the envelope. He gave no convincing explanation for his altered recollection. I refer to the quality of Mr Charitopoulos' evidence in detail below."[5]

53 Finally, on this aspect of the matter, I do not accept the proposition that the judge was logically unable to find that the order of 5 May 2006 was served separately on Mr Charitopoulos on 2 August 2006 without first finding that Mr Charitopoulos deliberately removed or held back the photocopy of the 5 May 2006 order from the documents he gave to Mr McNamara. As has already been noticed, there was no evidence of continuity, and thus the photocopy order could have been lost at any of a number of points between service and transmission of documents by Mr McNamara to Middletons. But, more fundamentally, the fact that the photocopy was missing was at most a peripheral matter bearing on credit - it was just one consideration among many to be taken into account in assessing Mr Eglinton's testimony that he served the photocopy - and, accordingly, the judge was entitled to accept that testimony without necessarily reaching any view as to where the photocopy may have gone.

**54 The appellants' first complaint about the judge's finding as to service of the 5 May 2006 order on 9 May 2006 is that her Honour did not refer to the fax sent by Mr McNamara to Middletons on 10 May 2006 (in which he stated his instructions that the man on whom Mr Eglinton had served the orders was Koimtsidis and not Mr Charitopoulos).

55 That complaint appears to me to be misplaced. The judge dealt extensively with the affidavit of Mr McNamara of 3 October 2006 (wherein he deposed that he had been consulted by Koimtsidis shortly after service on 9 May 2006 and that Koimtsidis' instructions were that Koimtsidis as opposed to Mr Charitopoulos had been served). Her Honour then gave reasons for accepting Mr Eglinton's and Mr Heidt's evidence in preference to what was alleged in the affidavit. It is true that the judge did not refer in terms to Mr McNamara's fax to Middletons. But the fax as such did not take the matter any further than the contents of the affidavit. Technically, it was evidence of what Mr McNamara said were his instructions. But it did not prove that they were his instructions, and even less the truth of his instructions. Quoad the appellants version of events, the fax was self-serving hearsay.**

**56 The appellants next criticise the judge's finding as depending too much on her assessment of credit and credibility of the witnesses and too little on what they say are objectively established facts, unchallenged evidence and the logic of events. They rely in particular on the fact (agreed to by both sides) that the driver of the Holden Statesman which Mr Eglinton followed to Mr Charitopoulos' office was not the man whom Mr Eglinton later served; the fact that when Mr Eglinton first saw the vehicle earlier that day it was parked outside Mr Charitopoulos' business premises at 83 Harrison Road; the fact that when Mr Eglinton saw the vehicle later in the day it was travelling in a direction that was consistent with it having come from the 83 Harrison Road premises; and the fact that Mr Eglinton agreed that when he saw the vehicle on that occasion he was "pretty confident" that it was being driven by Mr Charitopoulos.

57 In my view those submission break down at a number of levels. To start with, although the fact of the Statesman being outside Mr Charitopoulos' premises earlier in the day was not inconsistent with Mr Charitopoulos being the driver at that time, it did not exclude other possibilities. Other evidence established that Mr Charitopoulos and Koimtsidis had common business interests. So, it is not improbable that Koimtsidis drove the vehicle to Mr Charitopoulos' business premises. Further, while the fact of the vehicle being outside Mr Charitopoulos' business premises earlier in the day was not inconsistent with Mr Charitopoulos being the driver at that time of the day, it did not say a great deal about the identity of the driver later in the day when it drove past Mr Eglinton. The fact that Mr Eglinton was at first "pretty confident" that the driver was Mr Charitopoulos did not take the matter much further either. Mr Eglinton's evidence in chief was to the effect that so much of what he could see of the driver through the tinted window was consistent but not completely consistent with the description he had been given by an industry associate, and that he could not see the face of the driver clearly because of the window tint. As he put it in his affidavit of 12 May 2006:**

" ... The person driving the vehicle did not precisely match a description of Pantelis Charitopoulos that had been provided to me by an industry colleague, but it was hard to see inside the vehicle so [I] followed the vehicle in my car."

His evidence in cross-examination was to the same effect: "I still didn't see the driver of the car because at that point he hadn't got out of the car. His door was open but he hadn't got out".

58 In any event, it is plain from the judge's reasons that her Honour did take into account each of the objective facts, which she outlined with considerable care.[6] There is no reason to suppose that she gave them any less weight than they were due. In my own view they were equivocal and left the issue to be resolved on the basis of the competing testimony of Mr Heidt and Mr Eglinton and Mr Charitopoulos, just as her Honour did.

**59 The appellants contend that judge erred in failing to comprehend or to approach the matter on the basis that Mr Charitopoulos' version of events was "corroborated" by Mr McNamara's evidence that he observed Mr Charitopoulos driving a silver Statesmen from time to time.

60 I reject that contention. It is apparent that Koimtsidis usually drove the vehicle and that Mr Charitopoulos drove it occasionally. Mr McNamara's evidence corroborated that Mr Charitopoulos drove it occasionally but it did not corroborate that Mr Charitopoulos was driving it at the time of service. Other things being equal, it was just as possible that Koimtsidis was driving at the relevant time, and, in the absence of Koimtsidis from the witness box, one is entitled to conclude that anything which he might have been able to say on the subject would not have assisted Mr Charitopoulos.[7]**

**61 In his evidence in chief, Mr Eglinton said that the man whom he served on 9 May 2006 corresponded with the description given to him by Mr Heidt and that he had a scar on his face. The evidence about the scar was important because, although Mr Charitopoulos and Koimtsidis were in some respects similar in appearance, Mr Charitopoulos had a scar on his face and Koimtsidis did not. The appellants contend that the judge erred in accepting Mr Eglinton's evidence about the scar. They say that Mr Eglinton showed by his evidence about service of the documents on 2 August 2006 that he was not a reliable witness and therefore that the judge should not have believed him about what happened on 9 May 2006.

62 I reject that submission. To begin with, even if Mr Eglinton's evidence about service on 2 August 2006 had been unsatisfactory, it does not follow that he was a generally unreliable witness or that his evidence about service on 9 May 2006 was unreliable. That was a matter essentially for determination by the trial judge on the basis of her observations of Mr Eglinton in the witness box.

63 In the second place, the judge did not consider that Mr Eglinton's evidence about service on 2 August 2006 was unsatisfactory. Nor do I. The appellant's challenge to its reliability rested on the fact already referred to that there may have been included in the bundle of documents delivered by way of service on George Charitopoulos an office copy of the order of 5 May 2006. But the judge dealt with that contention and disposed of it as follows:**

"365 Mr Eglinton reiterated in cross-examination that he handed the 5 May 2006 order to Pantelis Charitopoulos separately, with the words he 'had an order for him'. He testified that he would not mix up orders intended for service on different people. He clearly remembered serving the documents separately.

Mr Charitopoulos deposed that on 2 August 2006 he did not receive a copy of the 5 May 2006 order and that Mr Eglinton did not state that he had an order for him. In his affidavit, he deposed that the documents handed to him were contained in an envelope to which he referred several times. At the hearing, he stated that he was unsure about the envelope. He gave no convincing explanation for his altered recollection. I refer to the quality of Mr Charitopoulos' evidence in detail below.
Mr McNamara deposed that he returned the bundle of documents addressed to George to Middletons.
Mr Eglinton's affidavit of 11 August 2006 referred to the bundles of documents forwarded by Middletons for service on George Charitopoulos and enumerated the four court documents, but did not refer to the 5 May 2006 order as included in the bundle of documents intended for George. However, the exhibit constituting the documents returned to Middletons by Mr McNamara included a copy of the 5 May 2006 order with a blue stamp on it. Mr Eglinton was unable to explain its presence. He did not notice it at the time. He testified that his copy of the 5 May order, which he served, did not have a blue stamp.
I am unable to determine why a copy of the 5 May 2006 order was included in the bundle addressed to George Charitopoulos and subsequently returned to Middletons. I do not consider, however, that the presence of a copy of the 5 May 2006 order with a blue stamp on it in that bundle detracts from the credibility of Mr Eglinton's clear and detailed evidence of his separate service of the 5 May 2006 order on Mr Charitopoulos on 2 August 2006."

**64 The appellants next contend that the judge should have treated Mr Heidt's evidence of identification of the man standing in the street as unreliable because of what are said to be the "extraordinary disclosures which [Mr Heidt] made in the course of cross-examination."

65 In my view, that contention is equally unpersuasive. The so-called extraordinary disclosures consisted of the fact that Mr Heidt did not mention in his affidavit in chief that he had previously met Koimtsidis and, to begin with in cross-examination, said that he had not previously met Koimtsidis; whereas later in cross-examination, he said that he had met Koimtsidis and that until that point he had forgotten about it.

"294 Mr Heidt denied that he was unsure that the man he observed was Mr Charitopoulos. He stated: 'I'm certain that it was Pantelis Charitopoulos'. He was 'quite certain', because he could plainly see Pantelis Charitopoulos' face.

At trial, Mr Heidt initially stated that he had not met Mr Archie Koimtsidis prior to 9 May 2006, although he had heard that he was a friend of Mr Charitopoulos. He corrected himself in the course of giving evidence and recalled that he had been introduced to Mr Koimtsidis at the auction, although they probably only said 'hello' to each other. He conceded that his introduction to Mr Koimtsidis had initially escaped his memory.
He recalled that Mr Koimtsidis was of medium height, olive complexion and 'filled out' in stature. It was put to Mr Heidt that it was possible that the person he saw on 9 May 2006 was Mr Koimtsidis, not Mr Charitopoulos. He stated, 'No, I could see it was Pantelis Charitopoulos'.
I do not consider that Mr Heidt's initial failure to recall being introduced to Mr Koimtsidis at the auction undermined the credibility of his evidence and, in particular, his clear identification of Mr Charitopoulos, who had an identifying facial scar, and with whom he was familiar."

**67 Once again, I agree with her Honour. There is nothing about the content of the cross-examination or, to the extent that one can say from the transcript, about the witness's demeanour which throws doubt on his evidence concerning the identification of Mr Charitopoulos. To the contrary, it appears to me that the way in which Mr Eglinton finally recalled that he had met Koimtsidis once before, and admitted that he did, was a good example of what the judge perceived as acknowledging adverse points reasonably.[8]

68 The appellants contend that other concessions made by Mr Heidt raise doubts about his identification of Mr Charitopoulos. It is said that Mr Heidt admitted that he only looked across the road for a period of five seconds in order to make the identification and that contrary to the finding of the judge he conceded that there could have been a shadow cast over the person whom he identified as Mr Charitopoulos. It is also contended that it is significant that Mr Heidt could not recall whether the day was cloudy or sunny and that contrary to the judge's finding, Mr Heidt did not refer to Mr Charitopoulos having a facial scar.

69 That contention is also not persuasive. Mr Heidt gave viva voce evidence in chief that he had known Mr Charitopoulos since the receivers were appointed on 4 August 2005 and had had many face to face dealings with him in the period between 4 August 2005 and 9 May 2006. In cross-examination Mr Heidt also recalled that he had met Koimtsidis at the auction and that it had escaped his recollection. But when pressed on the possibility that the man he had seen standing in the street on 9 May 2006 was Koimtsidis, he was clear that it was not:**

"[COUNSEL]: I want to suggest to you that thinking about it, it's possible that it might have been Mr Koimtsidis on the other side of the road, rather than Mr Charitopoulos on that day? - - - No, I could see it was Pantelis Charitopoulos.

[COUNSEL]: And you do concede I suggest that the person you observed on the other side of the street may have had a shadow partly over his body? - - - He may have but I mean I was quite certain because I could plainly see Pantelis Charitopoulos's face."

**70 It is also important to be aware that at the instant Mr Heidt identified Mr Charitopoulos standing in the street speaking on his mobile telephone, Mr Heidt was standing directly across the street looking directly at Mr Charitopoulos and telling Mr Eglinton by mobile telephone that he was looking directly at Mr Charitopoulos. The immediacy and intensity of the identification added to its strength.[9] Further, contrary to the appellant's submission, there was no evidence that Mr Charitopoulos was in shadow. Mr Heidt said that he could not recall whether there was a shadow. It was not suggested that there was. The net result of Mr Heidt's evidence was that he could see Mr Charitopoulos' face clearly.

71 It is true that Mr Heidt did not refer directly to Mr Charitopoulos having a facial scar. But he did exhibit to one of his affidavits a newspaper photograph of Mr Charitopoulos, and he deposed that the picture was of the person whom he knew as Mr Charitopoulos and whom he saw in the street on 9 May 2006. It was not suggested that the man in the photograph did not have a scar, or that there was any possibility of a displacement effect.[10] Nor was it suggested that the man whom Mr Heidt saw did not have a scar. In effect Mr Heidt's photographic identification of the subject was allowed to stand unimpeached. Accordingly, while it would be overstating the case to say that Mr Heidt referred to Mr Charitopoulos as having a scar, in effect that was the substance of his impeached photographic identification. It was also the way in which the judge dealt with the issue. Her Honour did not say that Mr Heidt stated that he identified Charitopoulos on the basis of his scar. She said that Mr Heidt's identification of Mr Charitopoulos was clear and that, given that Mr Charitopoulos had a identifying facial scar, and that Mr Heidt had dealt with Mr Charitopoulos on several occasions, his evidence of identification should be accepted. I add that, given the limited extent to which Mr Heidt was cross-examined on his identification of Mr Charitopoulos, it is difficult to see how her Honour could properly have come to any other conclusion.

72 Finally, on the subject of the identification of Mr Charitopoulos, the appellants contend that the judge erred in failing to take into account what the appellants describe as "objective evidence" constituted of a file note said to have been made by Koimtsidis on 9 May 2006.

73 That complaint is misconceived. As has been noticed, Koimtsidis did not give evidence. He swore an affidavit which was filed. But the judge correctly gave it no weight after Koimtsidis chose not to present himself for cross-examination. His so-called file note was therefore hearsay and inadmissible and, if it had been admitted, there would be a number of reasons to doubt its accuracy. Some of them appear in paragraphs [323] to [333] and [345] to [349] of the judge's reasons for judgment.**

**74 The appellants argue that it is unlikely to the point of being absurd to suggest that Mr Charitopoulos and Koimtsidis would have wished to pretend that the order of 5 May 2006 was served on Koimtsidis, given that within hours of service they communicated to the receivers' solicitors that service had been effected on Koimtsidis. According to the appellants, Mr Charitopoulos must be taken to have known that, once the receivers appreciated there was any doubt about service, they would re-serve him. So, it is said, it would have been apparent to Mr Charitopoulos that there was no benefit in pretending not to have been served if in fact he had been served. So it follows, it is contended, that it was highly improbable that Mr Charitopoulos was pretending.

75 I do not accept that submission. It is apparent that Mr Charitopoulos was seeking to avoid the return of the vehicles and other assets which he had removed from the Athol Park premises in contravention of the 4 April 2006 order. The manner in which he removed them - by a fleet of flat-top tow trucks under cover of darkness - and then tried to hide them from the receivers, meanwhile stripping them of their number plates and other registration indicia - bears that out. In those circumstances, it does not strike me as at all improbable that he might pretend that he had not been served. I allow that he may have foreseen that his protestations would be met with a further attempt to serve him, and that in the end it would likely be successful. But that would take time and, in view of his behaviour up to that point, it is apparent that he regarded any delay as worth having.**

**76 The appellants contend that the judge erred by failing to consider or give greater weight to Mr McNamara's evidence that, shortly after Mr Eglinton effected service on the man whom he thought to be Mr Charitopoulos, Koimtsidis came into Mr McNamara's office and told him that he had just had the documents thrown at his feet; and that Mr Charitopoulos, who was with Koimtsidis, told Mr McNamara that he was sitting, leaning on the car when the documents were dropped on the ground. The appellants also say it was significant that, according to Mr McNamara's recollection, Koimtsidis was wearing a white shirt with an open neck (although Mr McNamara did not recollect whether or not Koimtsidis was wearing a jacket).

77 I reject those submissions. Mr McNamara's evidence as to what Koimtsidis and Mr Charitopoulos told him about service was hearsay[11] and in my view plainly not so spontaneous or contemporaneous as to be regarded as part of the res gestae.[12] Further, evidence is incapable of corroborating a witness's testimony unless the evidence is independent of the witness.[13] It follows that, whatever Mr Charitopoulos may have said to Mr McNamara was incapable of corroborating Mr Charitopoulos' testimony. Furthermore, corroboration is likely to be treated as being without weight if the witness needing to be corroborated is sufficiently weakened by cross-examination or evidence as to reveal that the witness is lying.[14] In this case Mr Charitopoulos' testimony was so weakened by cross-examination that the judge concluded that he was a totally unsatisfactory witness. Finally, Mr McNamara's testimony as to what Koimtsidis was wearing ill-accorded with Mr Heidt's testimony that the man he identified as Mr Charitopoulos was wearing a jacket, and it supported Mr Eglinton's evidence that the driver of the car was wearing trousers and a shirt with no jacket.**

78 Evidently, a significant part of the trial was devoted to what occurred at the offices of the auctioneers on the morning of 10 May 2006. The judge determined the issue thus:

"301 On the morning of 10 May 2006, Mr Eglinton visited the offices of Mason Gray Strange after having repossessed a van which he had identified as having been removed from the Athol Park premises. The van, prior to its repossession, was being used to deliver food that day. Mr Eglinton testified that he observed the same person whom he had served the day before arrive at the offices of Mason Gray Strange. He then had a conversation with that person about the vehicle removed from the Athol Park premises on 2 May 2006, which Mr Eglinton had repossessed that morning. The person sought to negotiate the use of the van for business that day. After the conversation, Mr Eglinton asked, 'Are you Pantelis Charitopoulos today, are you?' Mr Eglinton testified that the person replied, 'Yes, and I was Pantelis yesterday'. Mr Eglinton testified that he did not discuss the incident of service on the previous day. He took the response to his question as an implicit acknowledgement that the man was Pantelis Charitopoulos and that he had been served on the previous day. Mr Charitopoulos' evidence was, however, that he replied 'I am Pantelis Charitopoulos every day'.

It was put to Mr Eglinton in cross-examination that he did not specifically dispute Mr Charitopoulos' different version of his response in the affidavit sworn 4 October 2006, although he disputed other matters. He could not explain the omission, but reiterated his own version of events. In my view, nothing hinges on the omission. Mr Eglinton testified that he was sure that the person he spoke to on 10 May 2006 was the same person whom he had served on 9 May 2006. He asserted that it was easy to recognise Mr Charitopoulos because of the scar on his face.

... I accept that Messrs Codling and Eglinton gave a truthful and accurate account of the conversation with Mr Charitopoulos on 10 May 2006. Mr Charitopoulos' response to the questions 'Are you Pantelis today?' to the effect that 'yes and I was I Pantelis yesterday' constitutes, in the context, an implicit acknowledgement that he was served on 9 May 2006. That circumstance fortifies, but is unnecessary to, my conclusion that the 5 May 2006 order was served on Mr Charitopoulos on 9 May 2006."

**79 The appellants contend that the judge's conclusion on the point was erroneous. They submit that, on either view of what Mr Charitopoulos may have said to Mr Eglinton, it was inherently ambiguous, and as such incapable of being taken as an admission as to service the previous day.

80 I disagree. The effect of Mr Charitopoulos response was as much dependent upon context and the manner in which it was said as it was upon the words in which it was expressed. Mr Eglinton took it in context and because of its tone to amount to an admission. It was open to the appellants to attack Mr Eglinton's evidence about that, and to some extent they did. But in the end it was a matter to be decided largely on the basis of the judge's perception of Mr Eglinton's evidence.

81 The appellants further contend that it is inherently unlikely that Mr Charitopoulos would have admitted service where, according to his testimony, Koimtsidis had the day before prepared a file note stating that the documents had been served on him, not Charitopoulos.

82 I am not much impressed by that argument either. There was no admissible evidence from Koimtsidis that he had prepared a file note the previous day, and there was no evidence that its contents were true. It is remarkable that it was only after the conversation of 10 May 2006 that Mr McNamara faxed to Middletons his instructions that service had been effected on Koimtsidis rather than Mr Charitopoulos. It was only on 11 May 2006 that Mr McNamara forwarded to Middletons what was alleged to be Koimtsidis' file note. As emerged in Mr Charitopoulos' cross-examination, it was he who suggested to Koimtsidis that Koimtsidis make the file note. Further, as the respondents point out, Mr Charitopoulos did not in his principal affidavit of 4 September 2006 make any challenge to Mr Eglinton's or Mr Codling's evidence concerning the events of 10 May 2006 - the challenge first emerged in Mr Charitopoulos' further affidavit of 3 October 2006 - and Dobric, who was also present at the meeting at Mason Gray Strange on 10 May 2006, and swore an affidavit, did not say anything to contradict Mr Eglinton or Mr Codling as to what they said had occurred. Mr Charitopoulos did not explain why he was content to be in Mr Eglinton's company on 10 May 2006 and yet say nothing about service. It is plain from Mr Charitopoulos' evidence that he took Mr Eglinton's question as to identity to be directed to service the previous day. If the fact were that Mr Charitopoulos had already asked Koimtsidis to make a note that it was Koimtsidis who had been served, it would follow that Mr Charitopoulos knew or believed that Mr Eglinton had been instructed to serve him and had made a mistake. Presumably, Mr Charitopoulos would have wished to make that plain as soon as possible, either in order to be frank or in order to gain more time in which not to comply with the order. Yet, according to him, he said nothing about it.

83 In my view, and in the absence of Koimtsidis from the witness box, the judge was right to treat Mr Charitopoulos' version of the events of 10 May 2006 as very suspicious indeed.**

**84 The appellants contend that there were a number of mitigatory circumstances which should have resulted in the judge imposing considerably lesser penalties than her Honour did.

85 First, as to the contempt of the 4 April 2006 order, they contend that on the objectively established facts one could not exclude as a reasonable possibility that Mr Charitopoulos believed that Haritopoulos' rights under South Australian law overrode the Victorian order. In those circumstances, they submit, a fine was not appropriate.[15]

86 I reject that submission. The only objectively established fact cited in support of it was that one of the policemen who attended the premises on the evening of 4 May 2006 told Mr Codling that he had to allow Charitopoulos to enter the premises. But as the judge pointed out in her reasons:**

"197 ... [T]he police officer's erroneous advice that Mr Charitopoulos was entitled to enter was given after his locksmith had already commenced to change the locks after ordinary business hours, and was fortuitously interrupted only due to the tip-off conveyed to Mr Codling. It is clear that Mr Charitopoulos intended, from the outset, to change the locks and to enter the premises without notice. His intention to do so predated, and did not depend on, any authorisation or advice by the police officer. It is apparent that he had arranged for a number of vehicles and men to attend the Athol Park premises on the evening of 2 May 2006. Subsequently, later in the evening of 2 May 2006, he did not comply with the directions of other police officers who instructed him not to remove any more items. Similarly, Mr Codling's unwilling submission to the police officer's erroneous advice did not render voluntary his admission of Mr Charitopoulos and his party to the Athol Park premises."

**87 Additionally, the appellants rely on Mr Charitopoulos' evidence that he did not believe that the order of 4 April 2006 prevented Haritopoulos from re-entering the premises to distrain for rent[16] and that, as he saw it, outstanding rent was due to Haritopoulos for the period from 4 August 2005 to 6 January 2006 (when the premises were under the control of the respondents as the receivers and managers of the tenant, Golden Chef Australia Pty Ltd (GCA)).[17] He swore that it was also in that state of belief that he bid on behalf of Haritopoulos at the auction for trucks and other goods, intending all the while to set off the purchase price against GCA's outstanding rental obligations.

88 But the judge, rejected that contention, and so do I, for the reasons which her Honour gave as follows:**

"194 In the light of all the evidence and circumstances, including: the history of the dispute and litigation; the orders previously made; Mr Charitopoulos' agreement to the terms of the 4 April order; the unsuccessful application to the Supreme Court of South Australia to restrain the auction; the defendants' consistent legal representation at the hearings when the relevant orders were made; the defendants' access to legal advice; the disparity between Haritopoulos' claims for outstanding rent and the value of the assets removed; Mr Charitopoulos' statutory declaration that AMS owned the assets used in the Golden Chef business, which he subsequently testified to be false and executed under duress; Mr Charitopoulos' concession that he knew that the receivers were indemnified by CBA; his knowledge that the receivers had undertaken to pay rent and had observed that undertaking; Mr Charitopoulos' manipulative and dishonest conduct in bidding for assets at auction with no intention of paying for them; the circumstances of the entry of the Athol Park premises after hours and without notice; the unconvincing, inconsistent and changing evidence advanced by Mr Charitopoulos on many relevant issues, including his state of mind; the absence of any statement as to what, if any, legal advice on the proposed entry and distraint was received; Mr Charitopoulos' obvious awareness of, and attention to, legalities and his apparent readiness to seek legal advice and to use legal representation, I am satisfied that there is no reasonable basis to doubt that Mr Charitopoulos was well aware that (whatever Haritopoulos' rights to distrain or to set off any outstanding rental) the terms of the 4 April 2006 order prohibited his entry into, or possession of, the Athol Park premises and the removal of assets therein without the receivers' consent."

**89 The appellants contend that Mr Charitopoulos' bona fides was established by what they describe as his efforts to resolve the conflict between his understanding of Haritopoulos' rights as landlord and the order of 4 April 2006. In that connection they pray in aid that at 6.00 am on the morning following Mr Charitopoulos' re-entry of the premises he telephoned Mr Del Torre and asked to meet him in order to provide him with a key to the new locks of the premises. As the appellants would have it, the evidence established that Mr Charitopoulos made the key available because he wanted the receivers to have access to the premises and did not want to disrupt third parties from obtaining goods for which they had paid. They further submit that so much is put beyond doubt by the letter dated 2 May 2006, wherein Mr Charitopoulos stated that it was his intention to allow "Sims Partners staff or other nominated persons possession to the factory by means of joint possession assuming reasonable notice is given".[18]

90 That submission is unconvincing. As I construe the evidence, Mr Charitopoulos took possession of the premises for as long as he found to be necessary to remove the assets that he wanted. Having done so, he set about seeking to avoid liability, for what he knew or feared would be seen as a serious breach of the order, by sending the letter and making the key available to the receivers. As the judge put it:**

"195 Similarly I am satisfied, to the requisite standard, that Mr Charitopoulos intended to, and did, deprive the plaintiffs of possession of the Athol Park premises for the time necessary to remove the assets he required; and that he intended to, and did, take possession of assets, not limited to the assets he had bid for

at auction, the value of which collectively exceeded his stated claim to outstanding rent.

His disobedience was wilful in the sense of a knowing or deliberate refusal to comply with his obligation under the 4 April 2006 order, the nature of which he understood."

**91 As to the contempt of the order of 5 May 2006, the appellants point to what they say was evidence that some of the assets removed from the premises were sold by Haritopoulos to Dobric's company, Booze2U Pty Ltd, under a written sale agreement dated 4 May 2006, and they submit that by reason of the agreement the appellants were unable to return those assets.

92 The judge gave two reasons for rejecting that contention, with which I agree. First, as was conceded, Haritopoulos had very few if any rights to most of the assets. Of the 21 vehicles removed from the Athol Park premises all but four were the subject of chattel mortgages in favour of CBFC (which had been assigned to CBA) and were auctioned by the receivers in possession pursuant to the orders of Layton J, following Mr Charitopoulos' failed application for injunction to restrain the auction. Of the remaining four vehicles, two were listed in the Charitopoulos group asset register as owned by AMS, to which the receivers had been appointed pursuant to a first registered fixed and floating debenture charge in favour of CBA and a third registered fixed charge in favour of CBA.[19] Of the remainder, one was listed in the asset register in the name of GCA which was the lessee of the premises and to which the receivers had been appointed pursuant to a second registered fixed and floating debenture charge in favour of CBA and a third registered fixed and floating debenture charge in favour of CBFC.[20] GCA had executed a fixed and floating charge in favour of Haritopoulos ("the Haritopoulos Charge") but it was the subject of a priority agreement in favour of the CBA.[21]

93 Secondly, the evidence concerning the purported sale agreement with Booze2U Pty Ltd showed that it was a sham not intended to confer enforceable rights. As her Honour found:**

"277 I am also satisfied to the requisite standard, that the sale agreement was never intended to confer enforceable rights, or to impose enforceable obligations, on either party. Rather, in my opinion, it is the product of a collusive device whereby Mr Charitopoulos sought to retain the vehicles and carry on business from premises he controlled, with the assistance of Mr Dobric. I am satisfied that Mr Charitopoulos orchestrated, and gave instructions for, the sale agreement. The vehicles were initially registered in the name of Quantum Industries and were registered in the name of Booze2U only on 14 August 2006. Mr Dobric currently pays no rent and has never paid any rent for the premises owned by a company controlled by Mr Charitopoulos. He had no input into the sale agreement of the selection of assets at auction. I am satisfied that he had no plans, means or financial arrangements to fund or establish an independent business. He was Haritopoulos' authorised agent for the purposes of re-entry and distraint. I am satisfied that he depends on, and is associated with, Ms and Mr Charitopoulos to run the business. He has never been requested to return the vans or any other equipment.

In my opinion, the purported sale to Booze2U represents no real impediment to Mr Charitopoulos' or Haritopoulos' possession or control of the relevant vehicles and assets and their ability to deliver them to the receivers in conformity with order 1 of the 5 May 2006 order."

**94 The appellants criticise the judge's finding that the agreement was a sham. They acknowledge that the vans were being used in a business conducted from premises owned by a Charitopoulos company, and that Booze2U Pty Ltd did not pay any rent for the use of the premises, but they submit that that was explained by the fact that the premises were for sale and Booze2U Pty Ltd was looking for its own premises. They acknowledge that the only evidence of payment of the deposit due under the sale agreement was the assertion that Dobric had paid some of Charitopoulos' accounts. They also acknowledge that there was no evidence of Dobric having means with which to pay the purchase price, or any documentary evidence of Dobric having paid the debts. But they say that all of that was overcome by Mr Charitopoulos' evidence that he assumed that the debts had been paid because he was not being chased for payment. The appellants further rely on the apparent familiarity of Dobric with the conduct of the business and the fact that when one of the vans was recovered by the receivers, the first person that the driver called was Dobric. Finally, they argue that, if Mr Charitopoulos really had the means to recover the assets, he surely would have done so in preference to paying the asking price of the vehicles to the receivers, as in the end he did.

95 I reject those submissions. The facts that the premises might be for sale and that Booze2U Pty Ltd might be looking for its own premises are not a logical explanation for Mr Charitopoulos' preparedness to allow Booze2U Pty Ltd to use the premises rent free. Why would he, particularly when according to him, he asked Dobric to return the vehicles so that he could return them to the receivers and Dobric refused? Why would he not demand rent, and distrain for it when not paid, as he purported to do as against the receivers? The failure to produce documentary evidence of Dobric having paid the debts in place of paying a deposit is equally not explained by Mr Charitopoulos' assertion that he was not being chased for the debts and assumed that they had been paid. The fact that Dobric was familiar with the operation of the business and that the driver 's first point of report was Dobric says no more than that Dobric had the job of conducting the business, most probably on behalf of Mr Charitopoulos. And the idea that Mr Charitopoulos would have preferred to return the vehicles to paying their asking price is given the lie by the fact that he did not write to Dobric until after the hearing on liability.

96 The appellants rely on the fact, already referred to, that on 3 October 2006 the appellants offered to pay for the value of so many of the assets removed from the premises as were not recovered by the respondents. It will be recalled that the amount offered was $72,549.60, calculated by applying the auction realisation price to the items in question. The respondents' solicitors sought $109,076.85, rather than $72,549.60; the difference of some $36,000 representing the assumed auction realisation value for a 1999 Isuzu vehicle WIM 271. The appellants were, however, reluctant to offer the additional $36,000 since they contended that the value of the Isuzu was less than demanded. They wrote that similar vehicles had sold at the auction for between $12,500 and $22,000. In the event, the parties were unable to bridge the gap and in final address counsel for the respondent submitted that the court should simply fix a figure for the outstanding vehicles in order to resolve this issue and that a cheque for any further amounts decided upon would be paid immediately to the respondents' solicitors. Thus, following delivery of the judge's reasons as to liability on 9 February 2007, on 11 April 2007 the appellants paid $109,076.85 to the respondents (being the amount originally tendered plus $36,527.25).

97 In her reasons for judgment on penalty, the judge referred to the initial offer of $72,549.60 and observed that there was "no evidence that the second and third defendants took any additional or effective measures satisfactorily to compensate the plaintiffs for the outstanding items until April 2007".[22] Her Honour also referred to the offer made by counsel for the appellants "most reluctantly" to pay the additional sum of $36,000. She observed that the offer was "made after almost a year, during which time the second and third defendants neither returned, nor offered satisfactory compensation for, the assets removed in contempt of the 4 April 2006 order. Rather, they conducted their affairs as if the 5 May 2006 order was of no effect".[23] The appellants contend that the judge was in error in the way in which she characterised the appellants' attempts to compensate the receivers for the loss of the assets. They submit the evidence establishes that they offered full compensation from an early date and made strenuous efforts to resolve the issue.

98 I am not persuaded that the judge was in error. Her Honour was aware of the facts. It is plain that she knew that the $72,549.60 had been offered, and when, and she knew that the $36,000 was in dispute. As she said: "The payment was a significant measure in remedying the consequences of the contempt of the 5 May 2006 order, although it did not nullify the contempt." Her Honour's observation - that the payment had come almost a year after the event and that until then the appellants had not offered satisfactory compensation - is to be understood in that context. Further, the judge was right to say that the appellants had continued to act as if the order was of no effect. The order required them to deliver up the assets and yet they steadfastly refused to do so. The offer of compensation was not an answer. The seizure of the assets was a conversion for which they were liable to compensate the appellants. Offers of compensation could be seen as going in mitigation of their liability in that regard. But those offers did not purge or much mitigate the appellants' contempt. It was not for the appellants to decide that they would rather pay compensation than obey the court's orders. As the judge found, they had the capacity to return the chattels if they chose to do so. Thus as the judge said, correctly, their actions in seeking to keep the chattels set the process of the court at nought.

99 The appellants pray in aid the fact that early in the proceedings Mr Charitopoulos filed and served an affidavit sworn on 4 September 2006 in which he apologised for the contravention of the order of 4 April 2006. There was as well an affidavit of Mr Charitopoulos' sister, Marina Charitopoulos, in which she deposed that Mr Charitopoulos appeared to be very remorseful and that, although he considered that the receivers had acted improperly, he recognised that he should have obtained legal advice before re-entering the premises and seizing the assets. The appellants contend that the judge was in error in rejecting the apology as disingenuous and in holding that the appellant had not exhibited remorse.

100 I see no error in that. In light of the objective circumstances of the matter, the apology reeks of insincerity. As the judge said, Mr Charitopoulos' professed contrition was belied by his false testimony and by his continuing refusal to return the assets seized on 4 May 2006. I also agree with the judge that, in the absence of contrary evidence, it is inconceivable that the appellants' lawyers did not advise Mr Charitopoulos of the effect of the order of 4 April 2006. Mr McNamara gave evidence that Mr Charitopoulos did not seek his advice on changing the locks. But that is not inconsistent with having advised as to the effect of the order. It was plain from the fact of the unsuccessful application to the Supreme Court of South Australia, and the manner in which Mr Charitopoulos thereafter went about entering into possession of the premises and seizing the assets, that he was well aware of the effect of the order and determined to ignore it.

101 The appellants refer to Mr Charitopoulos' personal circumstances. They point to uncontroverted evidence at trial that when the appellants contravened the 4 April 2006 order Mr Charitopoulos was just 27 years old. Up till then, it is said, he had led a blameless and worthy life. He was formerly a parishioner of the Greek Orthodox church; he and his family had actively supported the church through donations; and he was a family man with strong personal values who was well known and respected within the Adelaide community. He had no prior convictions other than for a driving offence. And he had not previously disobeyed a court order. He was the father of young children; he was the sole income earner for his family; his wife was engaged full-time caring for their home and children; he supported his divorced sister and her three children; he exhibited a change in personality following a car accident in January 1998; and, it is said that his conduct on 4 May 2006 was influenced by the humiliation and embarrassment which he felt arising from the collapse of the family business.[24]

102 No doubt they were matters which were relevant to penalty. But there is equally no doubt that the judge gave them the weight they deserved. Her Honour expressly referred to each of them, and she observed that they were relevant to penalty and that she took them into account. As her Honour also pointed out, however, those mitigatory considerations had to be balanced against the contumacy of the contempt of the 4 April and 5 May 2006 orders. The fundamental purpose of the orders was to cause Mr Charitopoulos and Haritopoulos to put the receivers in possession of the premises and assets. By Mr Charitopoulos' wilful and deliberate conduct, he and Haritopoulos consistently thwarted that purpose.

103 Finally, the appellants submit that the penalties imposed are in any event manifestly excessive, in the sense of being well outside the range, and they refer in support of that contention to a number of other cases where lesser penalties have been imposed.

104 In Pico Holdings Inc v Voss[25] Gillard J imposed a penalty of $25,000, and costs calculated on a solicitor-client basis of approximately $30,000, for a breach of a Mareva injunction committed by executing and giving effect to a contract of sale of land so as to put almost $600,000 beyond the reach of creditors. Gillard J found that the contempt demonstrated a contumacious attitude to the order and amounted to a deliberate and flagrant defiance of the authority of the court. But his Honour also considered that it was unlikely that the contemnor would breach an order in future. His Honour did not consider that it was necessary to impose a term of imprisonment. The case is in some respects similar to this one. But it is otherwise different. It concerned only one contempt and the judge accepted that the contemnor was unlikely to offend again. That stands in marked contrast to this case, where there were two closely connected contempts in close succession; and where, in view of past performance, and the lack of demonstrated remorse, the chances of re-offending are considerable.

105 In Windsurfing International Inc. v Saleboards Australia Pty Ltd[26] Burchett J of the Federal Court was concerned with a contempt constituted of incomplete failure to comply with an undertaking pursuant to the Trade Practices Act 1974 to put notices on catalogues distributed to the public and retail agents. Burchett J took the view that the contempt could not be brought within the expression "casual, accidental or unintentional".[27] Nevertheless, the acts of contempt appeared to have been more the product of insouciance than contumacy. His Honour therefore limited the penalty to fines of $2,500 and an order that the contemnors pay the applicant's costs on a solicitor-client basis. As it appears to me, that case was very different to this one.

106 In Ferrier v Kelada[28] Cummins J imposed fines of $12,000 and $6,000 for contempts constituted of further encumbering real properties in breach of orders not to deal with the properties. His Honour found that the contemnors had well understood that the orders prohibited them from doing what they did but that they were decent family men who had acted under the pressure of financial exigencies and that the contempts were not contumacious and thus not criminal. Further, the judge had before him evidence as to the financial positions of each of the offenders and apparently was mindful that any significant penalty would be financially crippling for them. This case is different. It is a case of criminal contempt and, as the judge observed, Mr Charitopoulos and Haritopoulos chose not to put any evidence before the court as to their financial positions, despite being invited to do so.

107 In McKinnon v Adams (No 2)[29] Bongiorno J was called upon to punish a woman for failure to comply with an order that each unit holder in a body corporate pay to the administrator $2,000 per unit. The woman had refused to do so and had also refused to yield up some odd chattels of apparently very little value in breach of a further term of the order. Bongiorno J found that the contempt was wilful and deliberate and that it was appropriate to record a conviction. But in view of the odd circumstances and the nature of the offender, his Honour determined that a fine of $10,000 and an order to pay the administrator's costs on an indemnity basis were sufficient to meet the needs of general and specific deterrence. Plainly, this case is very different to that one.

108 In Louis Vuitton Malletier SA v Design Elegance Pty Ltd[30] Merkel J of the Federal Court dealt with contemptuous conduct consisting of deliberate breaches on a number of occasions of consent orders not to re-infringe trade marks. He referred to the need to vindicate the court's authority and to deter others from acting in contempt of that authority. But there were extenuating circumstances. His Honour found that the respondent was a disturbed individual, and that the breaches were not defiant or contumacious and that the respondent was not likely to re-offend. On that basis his Honour determined that it was appropriate to levy a fine rather than imprisonment, and he imposed a fine of $20,000 on each of the individual and the individual's company. He further determined that the applicant should bear its own costs of the matter because it had made an offer to settle which amounted to a serious misuse of the applicant's entitlement to threaten and bring contempt proceedings.

109 In CFMEU v BHP Steel[31] a union committed contempt of court in connection with a failure of union members to return to work immediately as ordered by the court. At first instance, the judge imposed a fine of $200,000 and ordered the union to pay solicitor and own client costs. On appeal, however, it was held that the judge had erred by failing to take into account the effect of the costs order in setting the level of the fine. The matter was thus remitted to the judge for further determination. The judge then reduced the fine to $120,000. But on further appeal the fine was further reduced to $50,000, for the reason that, contrary to the assumed basis of fact on which the judge appeared to have proceeded, the union had not engaged in a colourable attempt to avoid the order of the court and had not been guilty of an active deliberate and devious attempt to encourage strike action to continue.

110 Compared to most of those cases, the contempts the subject of this appeal were particularly serious. In each case, the nature and gravity of the contempt was brazen and the degree of culpability was high. For the most part, there was an almost complete lack of extenuating circumstances and genuine remorse and contrition. And, as the judge observed, it was not just the fact of the contempts that was serious but also the aggravating circumstances which attended their commission:**

"202 A director's or chargor's interference with a receiver's possession of premises and assets, contrary not only to the terms of a charge, but in breach of a specific injunction, is very serious. It is particularly grave when, as in the present case, a sizeable band of men enter premises without notice after business hours, change locks and remove valuable assets, resisting any attempts to prevent or restrain them. In that context, I am satisfied to the requisite standard that Mr Charitopoulos there was some kind of scuffle with Mr Della Torre through the aperture in the fence and that Mr Charitopoulos pushed Mr Mathews, the security guard, as Mr Mathews (who was not cross-examined) deposed. Although no-one was hurt, the presence of the defendants' party was clearly intimidating and their conduct entailed a significant potential for violence and consequent injury to people and property." (My emphasis).

**111 Consequently, as the judge correctly concluded, it was necessary for her to impose stern penalties in order to vindicate the authority of the court and to provide adequate general and specific deterrence.[32]

112 In the end, however, I am persuaded that the fines of $100,000 imposed in respect of the contempt of the order of 4 April 2006 were too high. Given that the contempt of that order was for each appellant a first offence; and that the financial effects of the offence had by the time of sentencing been met by the recovery of 13 vehicles and Mr Charitopoulos' purchase of the remainder; and that, among the cases to which we have been referred, there is none in which a fine on first offence has been near as large as six figures, I consider that the fines of $100,000 imposed for the contempt of the order of 4 April 2006 were beyond the range. In my view, fines of $30,000 would have been sufficient to achieve the purpose.

113 The appellants argue that regardless of the size of fine to be imposed, the imposition of such a fine on Haritopoulos as well as on Mr Charitopoulos should be viewed as excessive. But the judge explained why it was necessary to impose a fine on both:**

"15 In the absence of further material, the Court also has no clear evidence on the financial circumstances of Haritopoulos Pty Ltd, including evidence as to the nature and quantum of its assets and liabilities. While I initially had some hesitation in imposing a fine on Haritopoulos Pty Ltd due to considerations of its potential effect on creditors, and I accept that a 'doubling up' of penalty should be avoided, Haritopoulos Pty Ltd advanced no evidence that the imposition of a substantial fine would have an adverse impact on the company or its creditors. Mr Charitopoulos's parents were, together with Mr Charitopoulos, directors of Haritopoulos Pty Ltd until 1 November 2006 and they remain the owners of all the issued shares in the company. Haritopoulos Pty Ltd was apparently wholly controlled by Mr Charitopoulos in relation to the conduct constituting the contempt of the 4 April 2006 order. There is no evidence that the persons who were, at that time, co-directors and beneficially interested in Haritopoulos Pty Ltd, took any steps to prevent the breach of the Court's orders or to cause the company to comply with the orders of the Court. In the circumstances, it is appropriate that a fine be imposed on Haritopoulos Pty Ltd."

**114 Turning then to the penalty imposed in relation to the contempt of the order of 5 May 2006, I would allow that the fine of $100,000 imposed on Haritopoulos was towards the upper end of the range. But I am not persuaded that it was excessive. It was a second offence committed in deliberate and contumacious disregard of a requirement to make good the consequences of the first offence and therefore it warranted very stern punishment.

115 The sentence of imprisonment imposed on Mr Charitopoulos raises different considerations, because gaol should be the last resort.[33] But this was a second offence committed in defiant aggravation of the first and with flagrant and contumacious disregard for the authority of the court. I agree with the judge, therefore, that it was necessary to impose a term of imprisonment and, in view of the**

seriousness of the contempt, I think that a term of three months imprisonment was well within the range.[34]

**116 It was submitted that the judge erred in failing to consider whether it was appropriate to order that the sentence be suspended and it was urged in support of the view that it should be that Mr Charitopoulos had acted on 2 May 2006 in the belief that the orders of 4 April 2006 did not prevent Haritopoulos from distraining for rent. Consequently, it was said that, when he committed the contempt of the 5 May 2006 order, he did not realise that he was committing a second contempt. In effect, in his mind at the time, it was really only a first.

117 I do not accept that contention. I agree with the judge that the contempt of the order of 4 April 2006 was wilful and contumacious. Mr Charitopoulos' defence that he believed that he was entitled to do as he did was properly rejected. It follows in my view that once he was served with the order of 5 May 2006 on 9 May 2006, he knew that by refusing to return the assets taken from the premises on 2 May 2006 he would be committing a second contempt of court. In those circumstances, it is inappropriate that he be treated as if it were a first offence. In my view the sentence of an immediate term of imprisonment of 30 days should stand.**

118 For the reasons I have given I would allow the appeal in part. I would quash the sentences imposed on the appellants for their contempts of the order of 4 April 2006 and, in lieu thereof, I would re-sentence them for those contempts to fines of $30,000 each. Otherwise, however, the sentences passed below should stand.

119 For the reasons given by Nettle JA, I agree that the judge below did not err in finding that the appellants were guilty of wilful and contumacious contempt. I also agree with his Honour that the appeal against the sentences imposed on the appellants should be allowed in part and that the appellants should be re-sentenced in the manner he proposes.

[7] Payne v Parker [1976] 1 NSWLR 191, 201-2; Fabre v Arenales (1992) 27 NSWLR 437, 449-50; cf Davies v Pyke [2004] VSCA 124; (2004) 10 VR 339, 344 [16].

[9] Cf Domican v The Queen [1992] HCA 13; (1992) 173 CLR 555, 562-3.

[10] Cf Alexander v The Queen [1981] HCA 17; (1987) 145 CLR 395, 426; R v Mendoza [2007] VSCA 120, [36].

[11] Buck v R [1983] WAR 372, 376.

[12] R v Ratten [1972] AC 378, 389 and 391; R v Andrews [1987] AC 281, 300-1; Vocisano v Vocisano [1974] HCA 14; (1974) 130 CLR 267, 273; Walton v The Queen [1989] HCA 9; (1989) 166 CLR 283, 295 and 305.

At a glance

Court

Decision date

Before

Source

Judgment (219 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (18)