Plaintiffs v Defendants [2007] VSC 15 | Case summary

Plaintiffs v Defendants [2007] VSC 15 | Case summary | Zoe

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INTRODUCTION AND SUMMARY OF ISSUES

1 By a summons filed 22 May 2006 ("the contempt summons"), the first and second plaintiffs, Messrs Allan Scott and Mathew Muldoon of Sims Partners, (collectively "the receivers"), the third plaintiff, Asset Management Solutions Pty Ltd (Receivers and Manager Appointed) ("AMS"), the fourth plaintiff, Commonwealth Bank of Australia ("CBA") and the fifth plaintiff, CBFC Limited ("CBFC"), seek orders that the second defendant, Haritopoulos Pty Ltd ("Haritopoulos") and its director, the third defendant, Mr Pantelis Charitopoulos (collectively, "the defendants"), be adjudged guilty of, and punished for, contempt of court, constituted by breaches of the orders made by Whelan J on 4 April 2006 ("the 4 April 2006 order") and 5 May 2006 ("the 5 May 2006 order").

2 The contempt charges arise from a dispute between the receivers and Mr Charitopoulos over the possession of assets and premises. The background to the dispute is complex and is set out in detail below. In summary, in August 2005 CBFC appointed Messrs Muldoon and Scott receivers of AMS and Golden Chef Australia Pty Ltd (Receivers and Managers Appointed) ("GCA"), companies in a group controlled by Pantelis Charitopoulos. Initially, the receivers and charge holders granted a licence permitting the Charitopoulos family companies to use the assets of AMS and GCA and to occupy premises situated at Athol Park, South Australia ("the Athol Park premises"), which were leased to GCA by Haritopoulos (another group company), in the group's ongoing business. Following defaults in payments due under the licence agreement, the parties entered a deed of agreement in December 2005, which required, inter alia, the CBA and CBFC facilities to be refinanced.

3 In January 2006 following further defaults in payment, the receivers terminated the licence and took possession of the assets, which were held at the Athol Park premises. The receivers claimed to be entitled to possession of the Athol Park premises until 30 March 2006 pursuant to the deed of agreement.

4 Mr Pantelis Charitopoulos asserted that arrears of rent for the Athol Park premises were owed to Haritopoulos, which was therefore entitled to distrain for rent. On 7 March 2006, he caused the locks of the Athol Park premises to be changed and took possession of the premises and the assets in them.

5 The plaintiffs disputed Haritopoulos' actions and claims. They consequently issued the present proceeding seeking, inter alia, injunctive relief to regain possession of the Athol Park premises and the assets held there.

6 Whelan J made the 4 April 2006 order, which provided that the defendants must permit the receivers to remain in possession of the Athol Park premises and of the assets in the premises until 4.30 pm on 5 May 2006.

7 Consequent upon the 4 April 2006 order, the receivers resumed possession of the Athol Park premises and of the assets in the premises.

8 On 2 May 2006, the defendants again changed the locks, re-entered the Athol Park premises and removed a number of assets, including over 20 vehicles. The receivers repossessed about a dozen vehicles over the course of the following days, but eight vehicles and certain other assets have not been recovered.

9 The plaintiffs allege that on 2 May 2006, the defendants breached, and committed contempts of, the 4 April 2006 order by:

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12 The plaintiffs further allege that the contempts were committed in wilful and deliberate disregard of the 4 April 2006 order and the 5 May 2006 order.

13 By an amended summons filed with leave granted on 9 October 2006 ("the amended summons"), the plaintiffs further or alternatively allege that the 5 May 2006 order was served on Mr Charitopoulos on 2 August 2006.

14 The plaintiffs seek that Haritopoulos be punished by a fine, or sequestration of its property, or both, and that Mr Charitopoulos be punished by a fine and committal to prison.

15 The defendants admit, and plead to, the charges of contempt of the 4 April 2006 order, but contend that the contempt was neither wilful (in the sense of a deliberate defiance of the order) nor contumacious. They further contend that both because the breach was not deliberate and because the 4 April 2006 order did not contain an endorsement in accordance with r.66.10(3) of the Supreme Court (General Civil Procedure) Rules 1996 ("Supreme Court Rules"), imprisonment is not an available penalty and, on the better view, a fine is also inappropriate. The plaintiffs concede that the 4 April 2006 order did not include the relevant endorsement and imprisonment is therefore precluded. They argue, however, that the Court is empowered to impose a fine and should do so in the circumstances.

16 The 5 May 2006 order contains an endorsement in accordance with r.66.10(3). The defendants deny the charges of contempt of the 5 May 2006 order, on the ground that the 5 May 2006 order has never been served on Mr Charitopoulos. They also contend that service on Haritopoulos at its registered office was ineffective because, in the absence of service on Mr Charitopoulos, it did not comply with r.66.10.(1)(a) of the Supreme Court Rules.

17 There is a fundamental conflict of evidence about the alleged service of the 5 May 2006 order on Mr Charitopoulos. The plaintiffs contend that the 5 May 2006 order was first served on Mr Charitopoulos on 9 May 2006 and that it was served again on 2 August 2006. A witness for the plaintiffs, Mr William Eglinton (supported by the evidence of Mr Jason Heidt and Mr James Codling), contends that he served Mr Charitopoulos with the 5 May 2006 order on the afternoon of 9 May 2006 in Pirie Street, Adelaide, and that, on 10 May 2006, Mr Charitopoulos implicitly acknowledged such service when Mr Eglinton asked him, "Are you Pantelis Charitopoulos today?" by responding, "yes and I was Pantelis Charitopoulos yesterday". Mr Charitopoulos denies that he was served with the 5 May 2006 order on 9 May 2006. He contends that Mr Eglinton mistook a business associate, Mr Archie Koimtsidis, for Mr Charitopoulos and, due to mistaken identity, "served" the 5 May 2006 order on Mr Koimtsidis. It is not disputed that immediately after the alleged service of the 5 May 2006 order on 9 May 2006, Mr Koimtsidis, accompanied by Mr Charitopoulos, took the documents to the nearby offices of Mr Charitopoulos' solicitors, McNamara Business and Property Lawyers ("McNamara Lawyers"), stated that they had been dropped at his feet and sought advice. Mr McNamara of McNamara Lawyers advised that the documents should be returned to the plaintiffs' solicitors, Middletons. McNamara Lawyers then returned the documents to Middletons.

18 Mr Charitopoulos also disputes that on 10 May 2006 he implicitly acknowledged that he had been served with the 5 May 2006 order on 9 May 2006. He contends that in response to Mr Eglinton's question, "Are you Pantelis Charitopoulos today?", he responded, "I am Pantelis Charitopoulos every day".

19 The plaintiffs also contend that because Mr Charitopoulos disputed the alleged service on 9 May 2006, Mr Eglinton served the 5 May 2006 order on him again at his residence on the morning of 2 August 2006, and, on the same occasion, also handed him a separate bundle of documents directed to Mr Charitopoulos' father, Mr George Charitopoulos. According to Mr Eglinton, the two bundles of documents were separate and neither bundle of documents handed to Mr Charitopoulos on 2 August 2006 was contained in an envelope. Mr Charitopoulos disputes that he was served with the 5 May 2006 order on 2 August 2006. He initially contended that he was served only with documents contained in an envelope which he did not open, but immediately took to his solicitor, Mr McNamara, who returned it to Middletons. It is not disputed that the bundle of documents returned by Mr McNamara to Middletons was not in an envelope. The bundle consisted of a number of documents which were stapled together. The documents were directed to George Charitopoulos, save for a copy of the 5 May 2006 order imprinted with a blue stamp, which was included at the end of the stapled bundle.

20 At the hearing, Mr Charitopoulos was no longer certain that the documents Mr Eglinton handed to him on 2 August 2006 were contained in an envelope, but he contended that he was given only one bundle of documents addressed to George Charitopoulos, which he did not look at, but immediately conveyed to McNamara Lawyers. The defendants thus contend that the 5 May 2006 order, (if handed to Mr Charitopoulos at all on 2 August 2006), was merely included as an undisclosed annexure to the bundle of documents addressed to George Charitopoulos. They deny that Mr Eglinton advised Mr Charitopoulos that he was handing him an order directed to him and contend that, in such circumstances, the 5 May 2006 order was not effectively served on 2 August 2006.

21 The 5 May 2006 order requires the defendants, within 72 hours of service, to deliver up to the plaintiffs the items removed from the Athol Park premises, or, in the case of the vehicles listed in the attached schedule which were not delivered up, to file and serve affidavits setting out their knowledge of the precise whereabouts of the vehicles, the persons in possession or control of them and how they acquired such possession or control.

22 It is not disputed that the defendants neither delivered up any items removed from the Athol Park premises on 2 May 2006, nor filed affidavits deposing to their knowledge of the specified vehicles' whereabouts and the persons in possession, within 72 hours of the alleged service on 9 May 2006 or 2 August 2006.

23 It follows that if service were effected on Mr Charitopoulos on either 9 May 2006 or 2 August 2006, he breached the 5 May 2006 order. Similarly, if Haritopoulos were effectively served on 5 May 2006, it breached the 5 May 2006 order.

24 The contempt summons issued on 22 May 2006 was fixed for hearing on 28 August 2006. By that date, the plaintiffs had recovered about a dozen of the vehicles which had been removed from the Athol Park premises on 2 May 2006, but eight vehicles and other items remained outstanding. On 28 August 2006, the defendants successfully sought an adjournment to 5 September 2006 and undertook to file and serve affidavits as to the whereabouts and control of the outstanding assets on or before 30 August 2006. In their affidavits filed on 30 August 2006, they deposed that eight vehicles and other items were in the possession of Booze2U Pty Ltd ("Booze2U"), a company which had purchased them from Haritopoulos pursuant to a sales agreement made on 4 May 2006.

25 The defendants' affidavits of 30 August 2006 would not, on any view, vitiate the breach of the 5 May 2006 order if it were served on Mr Charitopoulos either on 9 May 2006 or 2 August 2006, or on Haritopoulos on 5 May 2006, because the 5 May 2006 order required delivery of the assets and the filing and serving of affidavits (in relation to specified assets not delivered up) within 72 hours of service. The defendants, however, while denying service of the 5 May 2006 order, rely on the validity of the sale to Booze2U in order to establish their compliance, to the greatest extent possible, with the 5 May 2006 order. That is, they contend that the outstanding vehicles and items are beyond their control due to a bona fide sale to a third party, and that they have now satisfactorily deposed. (albeit belatedly), to the assets' whereabouts, the possessor's identity and how it obtained possession or control, as required by the 5 May 2006 order.

26 The plaintiffs contend that the alleged sale to Booze2U is ineffective by reason of the principle nemo dat quod non habet, and, is in any event, a sham. They contend that it constitutes no impediment to the defendants' ability to return the outstanding vehicles and items. They argue that therefore, the defendants' affidavits sworn on 30 August 2006 do not constitute bona fide compliance, to the greatest extent possible, with the 5 May 2006 order. They submit that, in the circumstances, a term of imprisonment should be imposed on Mr Charitopoulos for breach of the 5 May 2006 order.

CONTEMPT - RELEVANT LEGAL PRINCIPLES

All contempts to be proved beyond reasonable doubt

27 The failure to comply with an injunction in a civil proceeding is a civil contempt.

28 Traditionally, a clear distinction was drawn between criminal and civil contempt. In Witham v Holloway,[1] the High Court allowed an appeal against an order committing the appellant to prison for one month for contempt of court, constituted by breach of a Mareva injunction which required him to swear and file an affidavit disclosing details of his property and restraining him from dealing with it beyond a permitted value.

29 At first instance, the trial judge held that, as it was a wholly civil contempt, the civil standard of proof applied, albeit the required degree of satisfaction could vary according to the gravity of the facts to be proved. Brennan, Deane, Toohey and Gaudron JJ, in their joint judgment, proceeded on the basis that the trial judge made the finding of breach of the Mareva injunction on the balance of probabilities. Their Honours considered that, even in cases of civil contempt, the elements should have been proved beyond reasonable doubt.[2]

30 They acknowledged that the distinction between civil and criminal contempt, although longstanding, was illusory in significant respects, and did not "justify the allocation of different standards of proof for civil and criminal contempt."[3]

31 Brennan, Deane, Toohey and Gaudron JJ described the traditional distinction thus:

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39 He accepted that an intention to disobey the order was unnecessary.

40 Gillard J referred to Re Perkins[15] and Davis v Bailey[16], in which it was acknowledged that the Court might exercise its discretion to decline to convict, notwithstanding that it was satisfied that a contempt had been committed. He concluded that the Court could, in its discretion, decline to exercise its contempt jurisdiction if the charge were trivial, minor or lacked substance.

41 The authorities therefore establish that it is generally unnecessary to prove that the contemnor committed the breach with an intention to disobey. If, however, the disobedience were "casual or accidental and unintentional" as distinct from "deliberate and voluntary", then although it would prima facie give rise to liability, the Court might nevertheless decline to exercise the contempt jurisdiction. If it did exercise the jurisdiction, the casual or accidental and unintentional nature of the breach would be relevant to whether a penalty should be imposed, and if so, what it should be.

42 In AMIEU v Mudginberri Station Pty Ltd[17], the High Court considered the nature of wilful and contumacious contempt. In that case, the Federal Court had granted an interlocutory injunction restraining the appellant union from imposing or maintaining bans on the respondent meat exporter, with which it was in dispute. The union breached the order by continuing to approve a picket line. The Federal Court consequently imposed fines. The secretary of the appellant announced publicly that the union would not pay the fine. Morling J found that the union had engaged in a course of public defiance of the order and ordered that a writ of sequestration should issue.

43 The Full Court of the Federal Court dismissed the union's appeal. The High Court also dismissed its appeal. Gibbs CJ, Mason, Wilson and Deane JJ, in a joint judgment, noted the historical distinction between the objects of civil and criminal contempt, but recognised that increased scrutiny of its theoretical basis had exposed its artificiality. They considered that "Salmon LJ was right when he said in Jennison v Baker, at p 64, speaking with reference to the enforcement of an injunction generally, that "(t)he two objects are, in my view, inextricably intermixed."[18]

44 Their Honours stated that in cases of disobedience accompanied by public defiance, the primary purpose could be readily seen to be the vindication of the Court's authority, whereas when the disobedience was casual, the primary purpose could readily be seen to be the vindication of the plaintiff's rights. They observed that:

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45 Although some authority had doubted that there was power to impose a fine for civil contempt, their Honours approved a recent strong stream of English and Australian authority which supported the imposition of fines for disobedience of orders in circumstances where the disobedience was wilful.

46 While some judges had previously considered that wilful conduct would not constitute contempt unless it were also contumacious, the High Court accepted as correct Stamp J's imposition of a fine in Steiner Products Ltd v Willy Steiner Ltd,[20] where the conduct did not amount to obstinate disregard, but was simply a case of a failure, for no excuse whatever, to carry out an undertaking.

47 Gibbs CJ, Mason, Wilson and Deane JJ also approved recent decisions which recognised that "any disobedience which was worse than causal, accidental or unintentional must be regarded as wilful".

48 They concluded that a "deliberate commission or omission which is in breach of an injunctive order or an undertaking will constitute such wilful disobedience unless it be casual, accidental or unintentional."[21]

49 They accepted that that it was no answer to proceedings for contempt "to say that the act was not contumacious in the sense that, in doing it, there was no direct intention to disobey the order".[22] They approved the result in Mileage Conference Group v The Tyre Manufacturers Conference Ltd's Agreement,[23] in which a substantial fine was imposed "for contempt by breach of an undertaking which was not merely non-contumacious, but was committed reasonably on legal advice".[24]

50 AMIEU v Mudginberri Station Pty Ltd established that a penalty may properly be imposed for contempt if the defendant's breach were wilful, in the sense that it was not casual or accidental and unintentional. A deliberate act or omission in breach of an injunctive order or undertaking would amount to wilful disobedience. It was unnecessary that the defendant directly intended to disobey the order.

51 Nevertheless, knowing and deliberate disobedience of the order is a factor which will be adverse to the defendant in determining the penalty and it must therefore be proved beyond reasonable doubt. As Nettle J stated in Primelife Corp Ltd v Newpark Pty Ltd ("Primelife"),[25] the practical consequence of applying the principles of sentencing recognised in R v Storey[26] is that the knowing or deliberate refusal to comply with the order must be established beyond reasonable doubt.

52 In Primelife, the defendant failed to comply with an order to attend for examination before a Master. Although service of the order was disputed, Nettle J found that service was established beyond reasonable doubt.

53 His Honour also dismissed other "defences". He treated the question whether the defendant's disobedience were wilful "in the sense of a knowing or deliberate refusal to comply with an obligation the nature of which was comprehended", as relevant not to liability, but to the penalty to be imposed. His Honour recognised that "although there may be no general requirement to adopt the view of the facts most favourable to the contemnor, that is the practical effect of the requirement that there be proof beyond reasonable doubt of the facts which tell against him".[27]

54 In R v Storey, the Court of Appeal recognised that while a plea in mitigation may involve both facts adverse to the interests of the offender and facts in the offender's favour, it was inaccurate to state that either party bore an onus in relation to establishing such facts. The Court of Appeal concluded:

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BACKGROUND AND SUMMARY OF EVIDENCE

71 The receivers, Messrs Scott and Muldoon, sue in their capacity as receivers and managers appointed over the assets and undertakings of three corporations, AMS, CGA and Golden Chef (Vic) Pty Ltd (Receivers and Managers Appointed) ("GCV"). Messrs Scott and Muldoon were appointed receivers and managers by CBA and CBFC.

72 AMS, GCA, GCV, the first defendant, Evia Pty Ltd ("Evia") and Haritopoulos are all companies within the Golden Chef group of Companies. The Golden Chef group comprises approximately 19 companies which conducted a mobile catering business. The mobile catering business was commenced on a modest scale during the 1970s by the sixth defendant, Rosa Charitopoulos, and her husband, the seventh defendant, George Charitopoulos.

73 The third defendant, Mr Pantelis Charitopoulos is currently aged 27. He is the son of Rosa and George Charitopoulos. He has been involved in the Golden Chef business in various capacities since his childhood. He completed several years of a university accounting course, but left to work in the Golden Chef business. He became a fulltime employee in 1998. From 1998, George Charitopoulos began to travel to Greece for extended stays. From 2001, he spent almost the entire year in Greece. Pantelis Charitopoulos assumed the role of general manager of the Golden Chef business and became the effective controller of the Golden Chef group of companies. He is a director of Haritopoulos and Evia. Ms Marina Charitopoulos, the sister of Pantelis Charitopoulos, also played a role in the conduct of the Golden Chef business.

74 Within the Golden Chef group, the third plaintiff, AMS, owned the assets of the business, including approximately 150 catering vans, and preparation and storage assets. GCA was a principal trading corporation, while GCV operated the Victorian arm of the business.

75 Evia is the registered proprietor of premises situated at 36-56 Whiteside Road, Clayton, in Victoria, which it leased to GCV.

76 Haritopoulos is the registered proprietor of the Athol Park premises situated at 203-215 Hanson Road, Athol Park, South Australia and 72-76 Lavinia Street, Athol Park, South Australia, which it leased to GCA.

77 During the 1990s, the Golden Chef business expanded from its early, small-scale operations by acquiring competing businesses. Over the last three years, it achieved an average turnover of $25 million per annum.

78 In more recent times, however, the Golden Chef group experienced financial difficulties.

79 On 4 August 2005, Mr Muldoon and Mr Scott were appointed receivers and managers of GCA and AMS.

80 A licence agreement dated 4 August 2005 ("the licence agreement"), executed by the receivers, AMS, GCA, CBA, CBFC, Rosa and George Charitopoulos and GCV and others, permitted the Golden Chef business to continue to use the assets of GCA and AMS and to use and occupy the Athol Park premises. Under the licence agreement, Rosa and George Charitopoulos and GCV (which was not yet in receivership), undertook to pay, or cause the Golden Chef entities to pay or guarantee, various payments, including the rent due to Haritopoulos for the lease of the Athol Park premises for the term of the licence agreement. The rental for the Athol Park premises was payable monthly in advance.

81 On 26 August 2006, Haritopoulos (which was then in receivership) issued a tax invoice for the sum of $50,017.97 for the rent of the Athol Park premises for September 2005. An email of Tim Mableson of Ferrier Hodgson (then an adviser to the Charitopoulos family business) to Jason Heidt (a manager at Sims Partners) dated 23 September 2005 stated that the September rent was paid on 23 September 2005. A receipt of the Bank of South Australia recorded the receipt of $50,017.97. The email of Mr Charitopoulos to Mr Heidt dated 26 September 2005 stated that the rent had been paid. At the hearing, Mr Charitopoulos did not concede that the rent for September 2006 had been paid, but advanced no explanation of his email dated 26 September 2005 or the Bank of South Australia receipt.

82 By statutory declarations dated 29 September 2005 ("the statutory declarations"), Pantelis and Rosa Charitopoulos declared that all plant, equipment, stock and assets used by the Golden Chef group in connection with the business (other than real estate, trade marks and certain excluded assets) were legally and beneficially owned by AMS. They further declared that the plant, vehicles and equipment owned by AMS were accurately listed in schedules to the licence agreement.

83 In the period leading up to Christmas 2005, there were defaults in the payments due under the licence agreement and the rent due to Haritopoulos. By a deed of agreement dated 23 December 2005 ("the deed of agreement"), Mr Pantelis Charitopoulos, his parents, and GCV agreed to pay GCA and AMS the outstanding amounts under the licence agreement and to arrange for refinancing of the CBA and CBFC loan facilities by 16 January 2006. By clause 4.1, of the deed of agreement, Haritopoulos agreed that notwithstanding any breach or default by GCA as tenant of the Athol Park premises, and without requiring the payment of any arrears of rent, other outgoings or charges under the lease, the lease would not be terminated, and the receivers could remain in possession until 30 March 2006.

84 As at 3 January 2006, the amounts due under the licence agreement and the deed of agreement had not been paid by GCV or the Charitopoulos family. The chargeholders therefore terminated the licence agreement. On 6 January 2006, it appointed Messrs Muldoon and Scott receivers of GCV. During January, the operation of the Golden Chef business ceased in Adelaide and Melbourne.

85 On 29 January 2006, the rental agent for Haritopoulos and Evia issued a tax invoice for $50,017.97 for the rent of the Athol Park premises for February 2006 and a tax invoice for $22,916.66 for rent of the Clayton premises for February 2006.

86 To Mr Charitopoulos' knowledge, the receivers proposed to sell the assets subject to the charges. On 23 February 2006, Mr Charitopoulos met with Mr Heidt and Mr Cantone of Sims Partners. He offered to purchase the assets for their auction value, but nothing eventuated. By a letter dated 28 February 2006 to Mr Scott, Mr Charitopoulos again made various proposals to purchase the assets.

87 The receivers determined to sell the assets by auction. On 4 and 11 March 2006, on the instruction of the receivers, Mason Gray Strange, Dominions Auctioneers placed advertisements in The Age and The Advertiser newspapers for the forthcoming auction of the Golden Chef assets on 27 and 28 April 2006.

88 Mr Charitopoulos acknowledged that he wished to prevent the proposed auction from going ahead. He denied, however, that that was because he wished to continue the mobile catering business, and required the assets for that purpose. He asserted that he wished to retain only the food manufacturing equipment. He contended that he believed that the auction would jeopardise the security for Haritopoulos' claims for outstanding rent.

89 On 6 March 2006, Mr Scott received a letter dated 27 February 2006 from the rental agent for Evia and Haritopoulos enclosing invoices for outstanding rent, council rates and land tax for March 2006 for both the Clayton premises and Athol Park premises.

90 On 7 March 2006, at Mr Charitopoulos' behest, Haritopoulos issued a notice of re-entry and termination of the lease in respect of the Athol Park premises. It also issued a warrant to distrain pursuant to the Landlord and Tenant Act 1936 (SA) ("Landlord and Tenant Act") for the sum of $350,125.79, which was asserted to be the rental due to Haritopoulos as at 1 March 2006.

91 The parties' dispute over Haritopoulos' claim for rent is not an issue for determination in the present application. Whether Mr Charitopoulos had, as he deposed, a bona fide belief that the plaintiffs owed rental to Haritopoulos for which he was entitled to distrain or offset against items purchased at auction may, however, be relevant to whether the admitted breach of the 4 April 2006 order was wilful in the sense of knowingly disobedient, and to the appropriate penalty, if any, for such breach.

92 Mr Charitopoulos contended that rent was outstanding and that he believed that he was therefore entitled to change the locks and take possession of the Athol Park premises and the assets, as he did first on 7 March 2006, and, (despite the 4 April 2006 order that the receivers could retain possession until 4.30pm on 5 May 2006), for a second time on 2 May 2006.

93 The plaintiffs contended that Mr Charitopoulos could not have had a genuine belief that there was outstanding rent entitling him either to offset it against the price of assets purchased at auction or to distrain, despite the 4 April 2006 order. Mr Charitopoulos conceded that the receivers have continued to pay the rent due for both the Athol Park premises and the Clayton premises in their capacity as receivers, and that they had paid all rental due since their appointment on 6 January 2006.

94 At the hearing, Mr Charitopoulos contended that he believed that it was necessary to distrain or to prevent the auction, in order to retain security for the outstanding rent. He conceded, however, that he was aware that CBA indemnified the receivers for liability for rent.

95 On 7 March 2006, on the instructions of McNamara Lawyers, (solicitors acting for the defendants from March 2006) the fifth defendant, Frank Church, of the fourth defendant, Investigators (Australia) Pty Ltd, changed the locks of the Athol Park premises, thus excluding the receivers.

96 The receivers were consequently also excluded from access to the assets stored at the premises, which they claimed were subject to the charges in favour of CBA and CBCF, pursuant to which they were appointed.

97 At the hearing of the contempt summons, Mr Charitopoulos initially denied that when he took possession of the Athol Park premises on 7 March 2006, he was aware that the deed of agreement permitted the receivers to remain in possession of the Athol Park premises until 30 March 2006, notwithstanding the non-payment of arrears of rent. Ultimately, he conceded that the deed of agreement did so provide. He stated that he did not remember signing the deed of agreement and had a "different interpretation" of it. He was not "too clear" on what his different understanding of the deed of agreement was.

98 The "lock out" of the receivers raised their concerns about the insurance of the relevant assets. It also appeared to prevent the receivers from conducting the scheduled auction of the assets on site.

99 By a letter to McNamara Lawyers dated 8 March 2006, Middletons, the solicitors for the plaintiffs, asserted that Haritopoulos' actions in purporting to terminate the lease and distrain for rent constituted a breach of the deed of agreement. Middletons demanded that Haritopulos deliver up possession of the Athol Park premises and withdraw the warrant to distrain by 4.00pm on 9 March 2006. In a telephone conversation with Mr Chambers of Middletons, Mr McNamara stated that his clients would not undertake to comply with those demands.

100 Mr Muldoon made a declaration dated 9 March 2006 pursuant to s.22 of the Landlord and Tenant Act, stating that GCA had no property rights or beneficial interest in the assets located at the Athol Park premises. He forwarded the declaration to McNamara Lawyers, Haritopoulos and Investigators Australia Pty Ltd.

101 On 16 March 2006, the plaintiffs issued a generally endorsed writ in this proceeding. The writ sought injunctive and declaratory relief and damages for dispossession of chattels owned by AMS and charged in favour of CBA and CBFC, and relief in relation to the defendants' threatened and intended interference with the chattels.

102 The writ alleged that the chattels comprised plant, equipment and motor vehicles held either at the Clayton premises, of which Evia was the lessor, or at the Athol Park premises, of which Haritopoulos was the lessor. It further alleged that the defendants had, on or about 7 March 2006, changed the locks at both premises, thereby excluding the receivers, in breach of the deed of agreement.

103 The plaintiffs also issued a summons dated 16 March 2006, seeking an interlocutory injunction restraining the defendants from excluding the receivers from the assets specified in the schedule and from possession of the Athol Park premises. On 17 March 2006, Whelan J ordered the defendants to file and serve, inter alia, any affidavits in relation to the summons for interlocutory relief by 22 March 2006. No material was filed.

104 Between 7 and 24 March 2006, certain assets were removed from the Athol Park premises while under Haritopoulos' control.

105 By order made 24 March 2006, Whelan J ordered, inter alia, that

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112 The receivers undertook to pay Haritopoulos and Evia rental of $109,716.83 and $50,268.81 for the Athol Park and Clayton premises respectively for January, February and March (excluding the period of re-entry) by 10 April 2006 and to pay rent for the occupation of both premises from 1 April 2006 fortnightly in arrears.

113 The 4 April 2006 order thus permitted the receivers to retain possession of the Clayton and Athol Park premises until the late afternoon of 5 May 2006 or further order, on the basis of their undertaking to pay rent. It also cleared the way for the receivers to conduct the auction scheduled to take place at the Athol Park premises on 27 and 28 April 2006.

114 On 10 April 2006, the receivers paid rent of $159,985.64 required by the undertakings given to the Court on 4 April 2006.

115 By a letter to the receivers dated 12 April 2006, McNamara Lawyers required them to release specified assets, which were alleged to belong to Golden Chef companies other than those in receivership (AMS, GCA and GCV). The letter advised that the writer's clients would take possession of the specified items on the following day. The receivers disputed the claim to the specified items. By a letter to McNamara Lawyers dated 12 April 2006, Middletons advised that the claimed items substantially corresponded to the assets which the statutory declarations declared to be owned by AMS and that the receivers would seek injunctive relief if there were any attempt to interfere with their possession.

116 On 13 April 2006, the receivers paid rent of $33,662.14 owed to Evia and Haritopoulos for the first two weeks of April in arrears.

117 The defendants, in pleading to contempt of the 4 April 2006 orders, necessarily admitted the elements, including that the contemnor had knowledge of the terms of the order. Mr Charitopoulos' testimony at the hearing did not, however, clearly acknowledge that.

118 He initially testified that he did not recall seeing the 4 April 2006 order. He testified that he was not sure whether he had read it.

119 Ultimately, Mr Charitopolous conceded that his lawyers had sought and obtained his agreement to the 4 April 2006 order. He recalled discussions about permitting the receivers to stay at the premises until 5 May 2006, provided that they paid rent. He acknowledged that he had understood that the 4 April 2006 order would permit the receivers to stay and the scheduled auction to proceed. Given the defendants' plea, it was not necessary for the plaintiffs to establish that Mr Charitopoulos had knowledge of the terms of the 4 April 2006 order, to which he agreed. In any event, if and in so far as Mr Charitopoulos' evasive testimony may have sought to suggest that he did not have knowledge of the terms of the 4 April 2006 order, I reject that conclusion.

120 In his affidavit sworn 4 September 2006, Mr Charitopoulos deposed that "(t)he auction of the plant and equipment was the time when the reality of the failure of the business really hit home to me." The defendants determined to apply to the Supreme Court of South Australia to prevent the auction.

121 At 6.20 pm on 24 April 2006, the defendants notified Middletons of an application for an injunction to be heard in the Supreme Court of South Australia on 26 April 2006 in order to halt the scheduled auction of assets at the Athol Park premises. 25 April 2006 was Anzac Day and a public holiday. The application was heard on the afternoon of 26 April 2006 by Layton J, who dismissed it with costs.

122 At about 8.00pm on the evening of 26 April 2006, a tele-conference occurred between Mr McNamara and Mr Viscerello of McNamara Lawyers, Mr Charitopoulos and Mr Di Russo, a Melbourne accountant. Mr McNamara testified that in the course of the teleconference, Mr Di Russo stated that he was able to arrange finance through the NAB for Haritopoulos to purchase plant and equipment at the auction.

123 Although his statutory declaration stated that AMS owned the relevant chattels, in his affidavit of 4 September 2006, Mr Charitopoulos deposed that at the time of scheduled auction, he believed that a large number of the assets were in fact owned by Haritopoulos. At the hearing, he initially stated that his statutory declaration was correct. He then testified that he had signed it in error and under duress. He agreed that the statutory declaration was necessary to enable the Golden Chef business to continue to use the assets to trade. He then stated that the statutory declaration was false, although he did not know it at the time, as he had not had time to get it checked properly.

124 In his affidavit of 4 September 2006, Mr Charitopoulos deposed that he believed that Mr Di Russo had arranged a finance facility with the NAB to pay for any goods purchased at auction. He further deposed that he had believed that Haritopoulos was entitled to a set off of at least $222,000 which the plaintiffs owed it for rent for the Athol Park premises and that the security for the rental would be lost if the receivers sold the assets at auction.

125 At the hearing, Mr Charitopoulos testified that he had believed that because Haritopoulos owned certain assets or had a right of set-off, bidding at auction, (although he never, at any stage, intended to pay for any items), "was another way of ensuring that I received the income which I felt that I deserved."

126 The auction of assets subject to the CBA and CBFC securities at the Athol Park Premises was conducted by Mason Gray Strange on 27 and 28 April 2006, on the instruction of the receivers.

127 Mr Codling, an officer of Mason Gray Strange, deposed that he auctioned 90 vehicles. Mr Charitopoulos attended the auction, accompanied by his associate, Mr Dusko Dobric. He was the successful bidder for 17 vehicles and a variety of other items and equipment, with a total value of $320,000. He did not pay for the items at the conclusion of the auction.

128 Given that Mr Charitopoulos testified that he never intended to pay for the assets bought at auction, the significance of whether he or Haritopoulos had the means to pay for them (which was examined extensively at the hearing) is unclear. Mr Charitopoulos' evidence on that issue was evasive, equivocal, inconsistent and unconvincing.

129 In his affidavit sworn 4 September 2006, he deposed that he had requested Mr Di Russo to arrange a facility with the NAB to allow him to purchase the plant, vehicles and equipment at auction after the Supreme Court of South Australia dismissed the application for an injunction. He deposed that at the time of bidding for the assets at auction, he believed that the finance facility had been arranged with the NAB, but within a day or two after the auction, he discovered that the finance facility had not been finalised and funds were not available.

130 In paragraph 41 of his affidavit of 4 September 2006, Mr Charitopoulos denied Mr Codling's assertion that he told Mr Codling on 2 May 2006 that he would have a cheque ready to pay for the items by 12.00pm the following day, "as it was impossible, as I had met with the NAB when I was in Melbourne on 1 May 2006 and I knew that the funds would not be available until documentation had been completed."

131 In paragraph 57 of his affidavit sworn 4 September 2006, Mr Charitopoulos again deposed that "the monies that were said to have been arranged by Mr Di Russo have not materialised" and that he had therefore arranged for the sale of certain assets in order to offer to pay for assets in the possession of Booze2U.

132 His affidavit sworn 4 September 2006 thus gives the impression that Mr Charitopoulos depended entirely on the NAB facility which Mr Di Russo was arranging in order to pay for assets purchased at the auction, and that when the facility did not materialise, he was unable to pay.

133 In contrast, at the hearing Mr Charitopoulos contended that he, or Haritopoulos, was able to pay for the assets bought at the auction without recourse to the NAB facility being arranged by Mr Di Russo. Although it was not mentioned in his affidavit, he testified that, at the time, he had had in place a facility with John Mathies, a private Victorian financier, for $1.4 million, but chose not to use it because it required the entire sum to be drawn down. The security documentation was not drawn up because he did not require the money and did not wish to pay the high interest rates.

134 He also testified that because he had a good rapport with the NAB, he "strongly felt that had I needed the money the National Australia Bank would have given me the money on the spot." Contrary to his affidavit, he initially testified that he did not know on 1 May 2006 that funds would not be available because the documentation was not completed. When taken to his affidavit, he reaffirmed its assertion.

135 He then asserted that prior to the auction, he had believed when he spoke to Mr Di Russo at 7.00 or 8.00pm on the previous evening that the NAB facility could have been arranged by the next morning. He initially testified that Mr Di Russo did not tell him that he had arranged a facility. He subsequently testified that Mr Di Russo had confirmed that the funds would be available.

136 At the hearing, Mr Charitopoulos stated, for the first time, that Mr Di Russo was also arranging other facilities for him.

137 He also testified that he had had other means of raising funds available to him at the time of the auction. There was equity in properties, including the following: a property situated at 33 Pirie Street, Adelaide was owned by a Charitopolous family trust and had $2.4 million worth of available equity; another property owned by Haritopoulos had approximately $3 million in equity; a property in Toorak was worth $680,000 and a property in Thebarton, Adelaide, had available equity of approximately $2 million; a commercial building in Victoria Square, Adelaide, had equity of approximately $800,000 and a retail outlet in Adelaide had equity of approximately $300,000. Mr Charitopoulos stated that he controlled the companies which were the trustees of family trusts which owned the above properties. Charitopoulos family members and close friends were the beneficiaries of the trusts.

138 Mr Charitopoulos maintained that it was never his intention to pay for the items purchased at auction, but that he wished to put in place finance, in case he was obliged to do so.

139 On 1 May 2006, the auctioneers, Mason Gray Strange, rendered Mr Charitopoulos an invoice for the assets he had purchased at auction. Mr Heidt of the receivers instructed Mason Gray Strange not to release any assets until they had received payment in full. Mr Charitopoulos did not pay for the assets purchased at the auction on 1 May 2006. Mr Heidt informed him that he would only be entitled to take possession of the items if he paid for them by 4.00pm on 2 May 2006.

Events of 2 May 2006

140 On 2 May 2006, Mr Codling of Mason Gray Strange also informed Mr Charitopolous that he could take delivery of the vehicles and other items only if he tendered payment in full by 4.00pm on 2 May 2006.

141 The facsimile of McNamara Lawyers to Mr Chambers of Middletons dated 1 May 2006 referred to Haritopoulos' purchase of plant and equipment to the value of $320,000 at the auction. It asserted that the ownership of some of the assets was in dispute and that Haritopoulos required the cost of disputed items to be deducted from the auction price.

142 The letter further stated that "our client requires a credit of up to $300,000 being for the rental owed by [the receivers] to [Haritopoulos] for the period from 4 August 2005 to 6 January 2006". It stated, "On this basis our client requires to attend the premises on Monday and take possession of the items it purchased ... " If that proposal were not acceptable, the writer's instructions were to "a_pply to the Supreme Court of Victoria to have the items released"_.

143 By a facsimile in response dated 1 May 2006, Middletons affirmed that all the items of plant, equipment and vehicles sold at the auction were owned by the companies in receivership and denied that ownership was disputed.

144 Middleton's facsimile stated, "The sale price for these items is payable in full". It rejected Haritopoulos' proposal to deduct the value of allegedly disputed items from the purchase price. It also rejected "the proposition that the receivers owe rent to Haritopoulos and Evia for rent of the Athol Park and Clayton premises for the period from 4 August 2005 to 6 January 2006." It stated that the rent had been paid by GCV for the months of August, September and possibly October 2005.

145 The facsimile stated, "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 His Honour Justice Whelan in due course."

146 The facsimile stated that Mr Charitopoulos had been informed that he would be entitled to take delivery of the items purchased at auction only on payment in cash or by bank cheque by 4.00pm on 2 May 2006 and that he had indicated that he would pay by bank cheque. It further stated that Mr Charitopoulos had denied any knowledge of the set-off claim and had stated that McNamara's letter was sent without his instructions.

147 In cross-examination, when Mr Charitopoulos was asked: "When did you turn your mind to exercising a set-off rather than making payment for these goods", he initially stated that he did not understand. He subsequently stated that he "always had that opinion" [to offset the purchase price of goods bought at auction against rent owed to Haritopoulos.] He conceded that the assertion in his affidavit sworn 4 September 2006 that he only thought about set-off after the application to prevent the auction failed was incorrect.

148 Mr Charitopoulos, in his affidavit sworn 4 September 2006, stated that the rental owed to Haritopoulos at the time of the auction was approximately $220,000. He was unable to say, at the hearing, how that sum was calculated, but assumed that it was for the period from August 2005 to January 2006. He did not concede, despite the receipt of the Bank of South Australia and his letter of acknowledgment, that the rent for September 2005 was paid.

149 In relation to the disparity between the $220,000 in claimed rent and the $320,000 owed for assets purchased at auction, Mr Charitopoulos testified that he had purchased certain goods at the behest of the auctioneers. He stated that "some goods I bid for was told to me to do by the auctioneers, they told me to bid for them".

150 He was unsure whether he spoke to Mr McNamara about claiming a set-off on 1-2 May 2006, and did not remember instructing him to write a letter claiming set-off.

151 Mr Charitopoulos denied that, as at 1 May 2006, he knew that the receivers disputed his claim that they were obliged to pay rent for the period prior to January 2006. He also denied that he knew that the receivers disputed the claim to set-off.

152 When asked whether he believed that the receivers rejected his plan for set-off, Mr Charitopoulos repeatedly responded that he did not remember and that he did not remember discussing with Mr McNamara an application to the Supreme Court of Victoria to obtain the claimed set-off.

153 Following the auction on 2 May 2006, 33 vehicles were held at Athol Park Main Premises. The vehicles were:

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154 On 2 May 2006, Mr Codling of Mason Gray Strange received a tip-off that Mr Charitopoulos would retake possession of the Athol Park premises that evening. Mr Codling telephoned Mr Heidt of the receivers to inform him of the tip off. Mr Heidt asked Mr Codling to attend the Athol Park premises. He also sent him a copy of the 4 April 2006 order. Mr Heidt said that he would arrange for security guards to attend the premises as soon as possible.

155 Mr Codling deposed that he arrived at the Athol Park premises at 5.45pm. He locked the gate. At his request, Mr Della Torre, another officer of Mason Gray Strange, concealed the keys to the vehicles.

156 At 5.55pm, a truck arrived and left again, as the premises were locked.

157 At about 6.00pm, a locksmith from Australian Locksmiths arrived. He announced that he intended to change the locks, on Mr Charitopoulos' instructions. The locksmith left the premises after Mr Codling showed him a copy of the 4 April 2006 order.

158 At about 6.20pm, Mr Charitopoulos, accompanied by his associate, Mr Dobric, arrived at the premises. According to Mr Codling, Mr Charitopoulos told Mr Codling that he was "taking possession of the vehicles and was distraining for rent".

159 Mr Codling then showed Mr Charitopoulos the 4 April 2006 order. He explained that it permitted the receivers to remain in possession of the Athol Park premises and the assets situated there until 5 May 2006. Mr Codling deposed that Mr Charitopoulos responded with words to the effect that the laws from a Victorian Court "meant nothing" in South Australia. Mr Charitopoulos deposed that he responded that he thought that South Australian law overrode the 4 April 2006 order.

160 At about that point, the locksmith returned and began to pick and change the locks. Mr Della Torre attempted to prevent the locksmith from proceeding. Mr Codling deposed that Mr Charitopoulos physically restrained Mr Della Torre from attempting to stop the locksmith from changing the lock. Mr Charitpolous, in his affidavit sworn 30 August 2006, denied that he touched Mr Della Torre, who was situated on the opposite side of the fence to himself. At the hearing, Mr Codling explained that there was an aperture in the fence. He testified that there was a scuffle and he saw a bit of "pushing and scrapping".

161 A security guard from Chubb arrived at the premises at 6.30pm and stood at the gate. The police were called by both Mr Codling and Mr Charitopoulos. They arrived at about 7.00pm. The police expressed the view that the dispute was a civil matter. At the hearing, Mr Codling testified that one of the police officers stated that he was obliged to allow Mr Charitopoulos to enter the premises. Mr Codling disagreed with that view. He asked the police to call their duty solicitor, but no duty solicitor was available. The police officers then left. Due to the police officer's statement, Mr Codling desisted from attempting to prevent the locksmith from changing the locks. He permitted Mr Charitopoulos, the locksmith and Mr Dobric, to enter the Athol Park premises.

162 Mr Codling deposed that Mr Charitopoulos demanded the keys to the vehicles held at the premises. Mr Della Torre initially refused to comply. Mr Charitopoulos grabbed a bag of keys held by Mr Della Torre. He stated that he would get very annoyed and frustrated if not given the keys to the remaining vehicles. Mr Codling deposed that he telephoned Mr Heidt, who spoke to Mr Charitopoulos on the telephone. Mr Charitopoulos stated that he wanted the vehicles' keys only as security for the assets against which he had distrained. He stated that "all assets will remain on site".

163 Subsequently, on being told that some of the vehicles had been sold to third parties, Mr Charitopoulos agreed to hand their keys to a Chubb security guard present at the premises.

164 Mr Della Torre then handed the balance of the keys to Mr Charitopoulos, who, according to Mr Codling, reiterated that no vans or assets would leave the premises as he only wanted the keys as security or in case of fire. Mr Charitopoulos denied, however, that he stated that no assets or vans would leave the premises.

165 Mr Codling and Mr Della Torre left the Athol Park premises at 8.00pm. Two security guards, including Mr Samuel Mathews (who had arrived at the premises at 7.45pm), remained.

166 Mr Mathews, by his affidavit, sworn 19 May 2006, also deposed to the events of 2 May 2006. Mr Mathews was not cross-examined. He deposed that he arrived at the premises at 7.45pm and entered the lunch room. At 8.50pm, or shortly thereafter, about five vehicles arrived at the premises, carrying seven to nine men in addition to Mr Dobric and Mr Charitopoulos. Mr Mathews witnessed about nine men removing books and records from the office and removing about 15 vehicles with their headlights turned off. At 9.35pm, two trucks arrived and the men loaded other items into them.

167 Mr Pantelis Charitopolous, in his affidavit sworn 30 August 2006, did not deny removing the vehicles and assets, but deposed that the vehicles were removed with their lights on, because he did not believe that he had anything to hide. He further deposed that the vehicles 'required to undertake the distraint for rent' arrived at the same time and not at staggered times, as Mr Mathews had deposed.

168 Mr Mathews then telephoned Mr Codling, who arrived at about 11.30pm. The police had also arrived. Mr Codling deposed that the police instructed Mr Charitopoulos to lock up the premises and not to remove any more vehicles. The police, Mr Codling, and Mr Charitopoulos and his party, left the premises at about 1.00am. Mr Mathews deposed that he subsequently observed Mr Charitopoulos return to the premises with an assistant at 1.40am and remove further items, including computer hard drives and software. Mr Charitopoulos gave evidence that he removed his own personal computer, but not any hard drives.

169 Mr Mathews deposed that when he protested at the removal of the further items, Mr Charitopoulos stated that it was his equipment and that Mr Mathews should mind his own business and was trespassing. According to Mr Mathews, Mr Charitopoulos pushed him three times in the chest, until he was on the boundary of the premises. Mr Mathews then abandoned the attempt to prevent the removal of the items.

170 Mr Charitopoulos denied assaulting Mr Matthews. He deposed that when he was putting his computer in the car, an unknown person approached him from behind and grabbed him by the left shoulder. He stated that he resisted by pushing the person away with an open hand to the chest.

171 The following day, 3 May 2006, Mr Codling attended the Athol Park Premises in the morning. He concluded that 21 vehicles and other assets, including printers and computer equipment, had been removed. The vehicles and assets removed included vehicles and items which had not been purchased by Mr Charitopoulos at auction. Mr Charitopoulos attended the premises and gave Mr Della Torre a key to the premises at about 8.30am. Mr Codling deposed that Mr Della Torre reported that Mr Charitopoulos removed several more vehicles at that time.

172 By the letter of Haritopoulos Group to Mr Scott of Sims Partners dated 2 May 2006, Mr Charitopoulos advised that he had distrained for rent of the Athol Park premises. The letter stated, "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 my knowledge or approval, furthermore your staff or nominated person will only be allowed access to the site with my representatives being present."

173 The letter attached a notice of re-entry of the Athol Park premises and termination of the tenancy, requiring 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".

174 A statement under the Landlord and Tenant Act dated 2 May 2006, signed by Mr Dobric on behalf of Haritopoulos, stated, "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."

175 The letter of Middletons to Mr Charitopoulos dated 5 May 2006 stated that the issuing of the warrant of distraint constituted a contempt of court and that the unlawful removal of goods the property of AMS or CBFC rendered him liable to criminal charges.

Contempt of 4 April 2006 order and whether fine may be imposed

176 Mr Collinson, senior counsel for the defendants, made clear that they pleaded to contempt of the 4 April 2006 order. He contended that on the better view, the Court did not have power to fine the defendants in the absence of an endorsement of the 4 April 2006 order in accordance with r.66.10(3), but, if it did have the power, it should not impose a fine unless the breach were wilful and the requirements of specific and general deterrence warranted the adoption of that course.

177 As discussed above, in my opinion, the relevant authorities establish that the Court may impose a fine despite the fact that the order does not include the endorsement required by r.66.10(3), although imprisonment is precluded save, possibly, where the warning function of the endorsement has been fulfilled by other means.

178 The plaintiffs did not contend that the function of the r.66.10(3) endorsement had been fulfilled by other means in relation to the 4 April 2006 order. They did not submit that imprisonment was an appropriate penalty, but submitted that a substantial fine should be imposed.

Factors relevant to Penalty

179 In Louis Vuitton Malleterier South Australia v Design Elegance Pty Ltd,[41] Merkel J endorsed the following factors as relevant to penalty:

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Whether Fine Warranted

180 While the defendants did not contend that Mr Charitopoulos' entry of the Athol Park premises and the removal of the assets were casual or accidental and unintentional, Mr Collinson argued that the breach of the 4 April 2006 order was not wilful in the sense that it involved deliberate disobedience of the 4 April 2006 order. He submitted that the evidence did not establish beyond reasonable doubt that Mr Charitopoulos believed that the terms of the 4 April 2006 order prohibited him from acting as he did. Rather, the evidence established that Mr Charitopoulos believed that he was entitled to distrain for rent, that there was a right of set-off and that Haritopoulos and family members owned some of the relevant assets. He was not aware of the details of the 4 April 2006 order. He had, as Mr McNamara confirmed, discussed a right of set-off with Mr McNamara in the period after the auction and had sent the letter dated 2 May 2006 stating that Haritopoulos had distrained for rent, consistent with a belief in the entitlement to set-off.

181 Further, Mr Collinson submitted that Mr Charitopoulos did not intend to exclude the receivers by the entry of the Athol Park premises on 2 May 2006. Although the locks were changed on 2 May 2006, Mr Charitopoulos handed a key to Mr Della Torre of Mason Gray Strange at about 8.00 - 8.30am on 3 May 2003, which was consistent with the reference in his letter dated 2 May 2006 to affording the receivers "joint possession, assuming reasonable notice is given". The exclusion of the receivers from the Athol Park premises therefore lasted only a few hours.

182 Mr Collinson submitted that Mr Codling had agreed in cross-examination that Mr Charitopoulos stated that he was "entering" the premises, not "taking possession" of them, and had also agreed that Mr Charitopoulos used words "to the effect that he believed that South Australian law overrode a judge's order in Victoria". That use of language was, Mr Collinson said, consistent with an absence of intention to take possession of the premises or to disobey the 4 April 2006 order.

183 Mr Collinson also relied on Mr Codling's testimony that the police officer advised him, albeit erroneously, that he was obliged to let Mr Charitopoulos into the premises. Mr Collinson argued that the defendants consequently entered the Athol Park premises upon being told by the police that they were entitled to do so, and Mr Codling, on the policeman's advice, voluntarily ceded the right to enter.

184 Mr Collinson also submitted that Mr Charitopoulos panicked when he was informed that unless he paid for the assets by 2 May 2006, they would be removed the next day, and he realised that he must move quickly in order to protect his position.

185 Mr Collinson submitted that Mr Charitopoulos thought that he was acting lawfully and consistently with the 4 April 2006 order. He was aware of the 4 April 2006 order, but not the details, although "his omission to obtain legal advice about whether the right of distraint could be exercised despite the 4 April 2006 order was ignorant." Further, Mr Collinson submitted that the evidence did not support a conclusion that Mr Charitopoulos physically restrained and threatened Mr Della Torre.

186 Mr Collinson also relied on Mr Charitopoulos' personal circumstances. Mr Charitopoulos is aged 27. He is married with two children, aged approximately 31/2 years and one year respectively. His wife is engaged in full time child care. Mr Charitopoulos is currently the sole income earner for his family. His older sister, Ms Marina Charitopoulos, deposed that Pantelis Charitopoulos had a serious motor vehicle accident on 13 January 1998, after which his previously placid temperament became irritable, less patient, angry and short-tempered.

187 Ms Charitopoulos deposed that Pantelis Charitopoulos is a loving and caring brother, husband and father, who has helped with raising her three young children. She deposed that he is remorseful. The Very Reverend Diogenis Patsouris deposes that Mr Charitopoulos is of good character and good standing in the Adelaide community. Mr Charitopoulos has a conviction for a driving offence, which led to the serious accident. He has no other convictions.

188 Mr Charitopoulos deposed that he is the son of migrants, who established the Golden Chef business from modest beginnings. He was involved with the business from his earliest years. He deposed that the financial failure of the Golden Chef business had caused him serious emotional, physical and financial distress.

189 Mr Charitopoulos, in his affidavit sworn 4 September 2006, stated that:

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190 Mr Collinson submitted that the unintentional disobedience, combined with Mr Charitopoulos' unreserved apology, his expression of remorse to his sister, the absence of any convictions save for a driving offence, the serious motor vehicle accident in 1998 which had affected his personality, and his standing as a respected family man within the Adelaide community, indicated that no penalty should be imposed for contempt of the 4 April 2006 order.

191 Mr Garratt, senior counsel for the plaintiffs, submitted that the evidence established that the breach of the 4 April 2006 order was intentional and deliberate. It was inconceivable, he said, that Mr Charitopoulos believed that he had a lawful right to re-enter the Athol Park premises to distrain for rent in circumstances where he had already re-entered the premises on 7 March 2006 and had then been subject to interim and consent orders that he not disturb the receivers' possession of the Athol Park premises and the assets. It was also inconceivable that his lawyers would not have explained the meaning and effect of the 4 April 2006 order. Given that Mr Charitopoulos conceded that he knew that the receivers were indemnified by CBA, his assertion that he was concerned about security for any outstanding rent was not credible. Further, the value of the assets taken on 2 May 2006 exceeded the quantum of any rental claim from August 2005, particularly given that rent for August, September and probably October, 2005, was paid.

192 I am satisfied that, on the evidence before the Court, no hypothesis consistent with unintentional disobedience of the 4 April 2006 order is reasonably open. I am satisfied, to the requisite standard, that Mr Charitopoulos comprehended the nature of the obligations under the 4 April 2006 order. Further, I am satisfied, to the requisite standard, that Mr Charitopoulos understood that his actions on 2 May 2006 were inconsistent with the obligations under the 4 April 2006 order.

193 I consider Mr Charitopoulos' credit in greater detail below, and have already noted the quality of his evidence in relation to specific matters. In summary, I did not consider Mr Charitopoulos to be a truthful, consistent or credible witness. In the case of conflict, I prefer the evidence of the plaintiffs' witnesses. Even when there was no direct conflict with the evidence of any other witness, in many instances, I found Mr Charitopoulos' evidence erratic, fluctuating, internally inconsistent and inherently incredible. The submission that Mr Charitopoulos panicked at the threatened loss of the assets appears inconsistent with his assertion that he no longer required most of the assets for his own business purposes and that he had ample funds to pay for them, although he never, at any stage, intended to do so. Mr Charitopoulos' statement that he allowed his emotions to get the better of him appears inconsistent with a belief that he was entitled to act as he did. Regrettably, I formed the view that Mr Charitopoulos did not scruple to give false evidence to the Court where he considered that it would serve his purposes.

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.

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.

196 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.

197 In that context, the 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.

198 Although a police officer erroneously endorsed Mr Charitopoulos' entry, it was unnecessary to change the locks (as he subsequently did) for the purpose of entering. Further, the notice of termination served by Haritopoulos at 12.49am on 3 May 2006 required the delivery up of possession of the Athol Park premises. The letter of Haritopoulos dated 2 May 2006, while it referred to allowing the receivers' staff or nominated persons "possession to the factory by means of joint possession", in substance appeared to offer only supervised access, as reasonable notice was required, the receivers' staff or nominated person would be permitted access to the site only with Mr Charitopoulos' representatives present and no item could be removed from the site without Mr Charitopoulos' approval.

199 While it was submitted that in cross-examination Mr Codling did not adhere to his original account of Mr Charitopoulos' words on arrival at the Athol Park premises, I do not consider that he retracted that evidence. Rather, to the question "in the course of the initial discussion he said words to the effect that he was entering the premises to distrain for rent?" Mr Codling responded "yes". To the question "Then Mr Charitopoulos said words to the effect that he thought South Australian law overrode those orders?" he responded "yes". Those responses are not inconsistent with his own specific recollection.

200 In any event, in the relevant context, nuances of language, such as a distinction between "entering" and "taking possession", and a reference to access rights inaccurately described as "joint possession", do not negate an intention to resume possession of the Athol Park premises and to exclude the receivers.

201 Mr Charitopoulos' apology to the Court, his professed contrition and his invitation of an appropriate sanction, were inconsistent with his giving of evidence which I have found to be untruthful. Further, his case was that no penalty should be imposed for contempt of the 4 April 2006 order. The continuing failure to return the outstanding vehicles and items (which is, as set out below, also a breach of the 5 May 2006 order) is also inconsistent with genuine remorse or contrition.

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.

203 Further, the defendants have so far failed to return any of the outstanding removed items, despite a subsequent Court order, discussed below, although proffering payment (of a disputed amount) instead. There is a need to compel obedience and for specific deterrence.

204 General deterrence is also required in relation to the deliberate disobedience of the Court's order, which involved surprise tactics, thuggish behaviour, and the pre-mediated seizure of property lawfully in the possession of receivers. The conduct posed a serious risk of violence and disorder. Receivers perform an essential function in commerce and insolvency administration, which such conduct, if unchecked, would undermine.

205 The nature of the contempt is sufficiently serious to justify a term of imprisonment, save for the absence of an endorsement in accordance with r.66.10(3) of the Supreme Court Rules.

206 The Court has power to impose a fine, despite the absence of an endorsement in accordance with r.66.10(3). This is a case of wilful disobedience and in my view**,** the requirements of specific and general deterrence warrant the imposition of a substantial fine.

207 The evidence in mitigation establishes that Mr Charitopoulos is youthful, has a young family, no previous criminal convictions save for a traffic offence and that he is a good family man respected in the Adelaide community. His sister's unchallenged evidence indicates that his personality changed after the motor vehicle accident, although, in the absence of medical evidence, I can draw no conclusion as to the cause of that change.

208 Mr Charitopoulos did not give any specific evidence concerning his own financial position. He asserted that very substantial equity was available to him through family-owned or controlled trusts, companies and properties. On the other hand, he acknowledged that some of the family companies owed substantial sums and that there had been a business failure. His own evidence, and that of Mr McNamara, indicated that he possessed and used several luxury vehicles. Mr Charitopoulos testified that he "happily" paid very high rates of interest "by choice", but he deposed that his imprisonment would cause his family financial hardship. The evidence is therefore contradictory and gives no precise picture of Mr Charitopoulos' current personal financial circumstances. Similarly, no comprehensive details of the current financial position of Haritopoulos were provided, although Mr Charitopoulos testified that Haritopoulos had available equity of $3 million in real property as at May 2006.

209 The defendants made clear that they did not seek an opportunity to file further material relevant to sentence, in the event that the Court determined to impose a penalty for breach of the 4 April 2006 order.

210 I nevertheless consider it appropriate to afford the opportunity to advance further evidence in relation to the quantum of the fine to be imposed.

WHETHER CONTEMPT OF 5 MAY 2006 ORDER

211 On 3 May 2006, there was a hearing before Whelan J. The defendants were represented by Mr Moore. Counsel for the defendants sought until 4.15pm to return the assets which had been removed from the Athol Park premises. Whelan J ordered that the defendants vacate the Athol Park premises and return the assets removed from the premises on 2 May 2006 by 4.15pm on 3 May 2006.

212 The order of 3 May 2006 was not personally served on Mr Charitopoulos. The defendants did not comply with the order of 3 May 2006.

213 In the days following 2 May 2006, the receivers or their representatives identified and recovered about a dozen of the vehicles which had been removed from the Athol Park premises.

214 On 3 May 2006, Mr Heidt was advised by Mr Eglinton that 13 of the vehicles had been taken to 85 Harrison Road, Dudley Park ("the Harrison Road premises"). Messrs Eglinton, Codling, Heidt and Strazdins (a partner with Sims Partners) attended the Harrison Road premises and took photographs of the vehicles. Mr Dobric was parked nearby and left when he saw them.

215 On the evening of 3 May 2006, Mr Codling observed 13 vehicles being removed from the Harrison Road premises by Mr Dobric and others. Mr Charitopoulos was observed driving a silver Mercedes Benz.

216 On 5 May 2006, Mr Codling advised Mr Heidt that the 13 vehicles were now located at premises at Wingfield Street ("the Wingfield Street premises"). Mr Heidt, Mr Codling, Mr Eglinton and a policeman, Sergeant Butler, attended the Wingfield Street premises. Upon contacting the landlord of the premises, they were given access to the property. They identified 12 of the 13 vehicles by their vehicle identification numbers. The registration plates, stickers and other identifiers of the vehicles had been removed.

217 Mr Eglinton and Mr Codling then removed the vehicles, although Mr Dobric resisted by parking his own vehicle across the driveway and lying down under a tow truck.

218 On 10 May 2006, Mr Eglinton identified another vehicle as subject to the CBA or CBFC charge. He reclaimed it from a motor repairer.

The 5 May 2006 order

219 By an order made 5 May 2006, the Honourable Justice Whelan ordered:

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227 Schedule 1 listed plant and equipment. The sale agreement was executed by Haritopoulos and Booze2U and was witnessed by Nathan Smith, an employee of Mr Dobric.

228 Mr Charitopoulos testified that, although at the time of the auction he no longer intended to operate a mobile catering business, he intended to bid for vehicles and equipment to the value of between $200,000 and $400,000. He testified that he intended to purchase only food manufacturing equipment on his own behalf, but to bid for vehicles and other equipment suitable for use in a mobile catering business, for on-sale to Mr Dobric.

229 Mr Charitopoulos testified that Mr Dobric wished to start a lunch van business. He had not previously conducted such a business, but knew the industry well. Mr Charitopoulos and Mr Dobric discussed the matter from January 2006 onwards.

230 In his affidavit, Mr Charitopoulos deposed that Mr Dobric was a former employee of GCA who had worked for it in many capacities, but who "left several years ago to start up his own business". At the hearing, however, he testified that Mr Dobric had been working for the Golden Chef business from early 2005 until its closure in January 2006.

231 Mr Charitopoulos testified that Mr Dobric conducted his business through his company, Booze2U. Other than that Booze2U delivered alcohol, Mr Charitopoulos was unsure of the nature of its business. He conceded that Booze2U had ceased or decreased deliveries during January and February 2006, and no longer occupied its former business premises at that time. Mr Charitopoulos did not know whether Mr Dobric carried on business from any premises during April or May 2006, but believed that he was performing cleaning work.

232 Mr Charitopoulos testified that he did not discuss with Mr Dobric the specific goods he planned to bid for at auction on Mr Dobric's behalf. His evidence on that issue was fluctuating, evasive and confusing. While contending that there was an agreement that he would buy certain assets for Mr Dobric to start a new business, he testified that no specific assets were identified as the subject of the agreement. Ultimately, he stated that he agreed with Mr Dobric on items in advance "not specific, but generally, like vans, other equipment".

233 Mr Charitopoulos could not explain why Mr Dobric did not bid personally at auction for items required for his business. Mr Charitopoulos reiterated that he had no intention of paying for any of the items for which he was the successful bidder at auction, including those which he proposed to sell to Mr Dobric. Nevertheless, Mr Charitopoulos testified that he and Mr Dobric agreed that Mr Dobric would pay him after the auction and that there would be a deposit "just to formalise the deal".

234 In his affidavit sworn 4 September 2006, Mr Charitopoulos deposed, "I received a deposit of $19,000 from Booze2U but have not been paid the balance of money outstanding as Booze2U has refused to pay for the goods sold until the goods seized by the plaintiffs are returned to it. The deposit moneys that I received have been used to pay for a number of things including cleaning and repairs to the premises for damages caused by the plaintiffs' agents ... "

235 Mr McNamara, of McNamara Lawyers had acted for Mr Charitopoulos since March 2006. He gave evidence that on the evening of 26 April 2006, he was instructed to draft a sale agreement between Haritopoulos and a company known as "Quantum". Mr McNamara was not told the identity of Quantum's shareholders. Mr Charitopoulos testified that Quantum was established by Mr Di Russo as a corporate vehicle for Mr Dobric, but subsequently proved unsuitable.

236 Mr McNamara believed that he drafted the sale agreement with Quantum on 28 April 2006, after the auction. He received instructions from Mr Charitopoulos by telephone on 1 May 2006 to change the name of the purchaser to "Booze2U Pty Ltd". He did so, inserted the purchase price and some other minor amendments and emailed the amended sale agreement to Mr Charitopoulos. Mr McNamara had no involvement in the execution of the sale agreement to Booze2U.

237 At the hearing of the contempt summons, Mr Charitopoulos could not recall giving Mr McNamara instructions to prepare the sale agreement. He did not remember where he signed it. He testified that Quantum Industries was a company set up for Mr Dobric by Mr Di Russo.

238 At the hearing of the contempt summons, Mr Charitopoulos testified that he received a deposit from Mr Dobric around 4 May 2006, but he did not remember the specific date. Although he had deposed to receipt of a deposit of $19,000, he then conceded that neither he nor Haritopoulos had received any money from Booze2U or Mr Dobric. He testified that the deposit of $19,000 was provided by means of Mr Dobric or Booze2U paying certain bills on his behalf. A receipt of Haritopoulos dated 30 June 2006 stated:

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239 Mr Charitopoulos was unsure when the invoice from Magic Touch Cleaning Services was paid. He believed that it was around mid May. He was taken to a quote of Magic Touch Cleaning Services dated 7 May 2006 for $12,870. He conceded that as at 29 May 2006, the invoice had not been paid. He was not sure that the cleaning work was done by 29 May 2006. He then asserted that he could not be sure when the premises were cleaned.

240 Mr Charitopoulos was unable to state what the refrigeration work referred to in the Haritopoulos receipt was. He identified the NPS Group as a group which did computer work for him, but was unable to state what its invoice was for. Other than that he had not been "chased for the money", he had no evidence that it had been paid. He was unable to produce any evidence that any of the amounts referred to in the Haritopoulos receipt had been paid.

241 The Haritopoulos receipt dated 30 June 2006 was generated by Mr Charitopoulos. He was unable to recollect at what date he had generated it. He stated that his accountant or lawyer told him to date the receipt 30 June 2006 "for tax reasons".

242 Mr Charitopoulos also conceded that the final balance of the purchase price due to Haritopoulos under the sale agreement had never been paid. He was unable to explain why he could not terminate the sale agreement for non-payment and recover the goods. He denied, however, that the sale agreement was not genuine.

243 At a point when the hearing was well-advanced, the defendants sought, and were granted, leave to file and serve an affidavit by Mr Dobric sworn 19 October 2006 in relation to the sale to Booze2U. In his affidavit, Mr Dobric deposed that he provided consulting services to GCA in 2004, and when its business was closed down, expressed an interest to Mr Charitopoulos in acquiring some of its assets to use in his own business. He deposed that he and Mr Charitopoulos discussed the type of item he was interested in and how much he was prepared to pay. He further deposed that because Mr Charitopoulos was intimately aware of the equipment and vehicles, he was comfortable acquiring the assets of the business through him. Mr Dobric attended the auction with Mr Charitopoulos "where he successfully bid on a number of vehicles and other equipment which I had agreed I would acquire from him". Mr Dobric was cross-examined. At the hearing, he testified that he could not recall whether he knew that items purchased at the auction must be paid for prior to delivery.

244 Mr Dobric deposed that after the auction, instructions were given to Mr McNamara to prepare an agreement whereby Mr Dobric would purchase the plant and equipment through a company called "Quantum Capital" Pty Ltd, on the advice of Mr Di Russo.

245 Mr Dobric testified that in May 2006, Mr Di Russo was his accountant, as well as the accountant of Mr Charitopoulos. He could not, however, remember Di Russo's address or where his office was "because I'm not from Melbourne". He currently had a different accountant.

246 Mr Dobric could not recall when he began operating a business with the vans. He testified that he first registered them in the name of "Quantum" on the advice of Mr Di Russo, believing that he would be the director of "Quantum". At a certain point, Mr Dobric conducted a company search which revealed that he was not a director of "Quantum". He therefore became dissatisfied with Mr Di Russo and changed the registration of the vans to Booze2U, of which he was a director. The change of registration occurred on 14 August 2006.

247 Mr Dobric's testimony that he instructed Di Russo to set up a company for him was vague, inconsistent and incredible. He could recall no specific dates, times or sequences and could not recall receiving a bill for the accountant's services.

248 Moreover, although he testified that the chosen purchaser company was "Quantum Capital", he conceded that he had registered the vehicles in the name of "Quantum Industries". The vehicles were registered in that name as at 14 May 2006, although Mr Dobric was unable to recall the date on which he registered the vehicles in the name of "Quantum Industries". He could not remember if the vehicles were subject to the sale agreement between Haritopoulos and Booze 2U at the date of their registration in the name of "Quantum Industries".

249 When asked about the name change from "Quantum Capital" to "Quantum Industries", Mr Dobric was evasive. He stated that he acted on the advice of his accountant in so doing, but, at the same time, testified that he could not make ready contact with the accountant, could not get straight answers from him and performed a company search himself, due to the accountant's unsatisfactory responses.

250 Mr Dobric denied that he registered the vans in the name of "Quantum Industries", (a company connected neither with himself or Mr Charitopoulos) and helped to remove the identification marks from the vehicles in order to assist Mr Charitopoulos to conceal the vans from the receivers.

251 At the hearing of the contempt summons, Mr Dobric stated that Marina Charitopoulos was currently helping him to run the business of delivering meals to work sites, which he had been carrying on since roughly 5 May 2006, although he could not exactly recall the period of time. He acknowledged that his business was identical to that previously operated by Golden Chef, although party supplies were now available when required. He conceded that "I don't handle all aspects of the business" and that he depended on Marina Charitopoulos for certain matters.

252 Mr Dobric recalled that he signed the sale agreement with Haritopoulos for the purchase of plant and equipment from Haritopoulos. He was unable to recall the date on which he signed the sale agreement and could not recall whether it was signed before or after the auction. He testified that the sale agreement he signed was prepared by Mr McNamara on the instructions of Mr Charitopoulos. Mr Dobric gave no instructions to Mr McNamara in relation to the sale agreement, although he "had a look at the draft". He was unable to recall where he did that. His understanding of the sale agreement was that "I was getting the assets which can operate the business".

253 In relation to his understanding of the payment provided for under the sale agreement, Mr Dobric stated:

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254 Mr Dobric conceded that he had not paid any money to any person in relation to the sale agreement, save that "I paid a few bills for Mr Charitopoulos". He did not give any security to Haritopoulos for the obligations as purchaser under the sale agreement.

255 Mr Dobric accompanied Mr Charitopoulos to the auction on 27 and 28 April 2006. He conceded that he did not himself have the money to pay for the vans or equipment and had not organised any finance to do so. He denied that he was aware that Mr Charitopoulos had no intention of paying for the vans he was going to bid for, stating "I'm not sure what his affairs were". Mr Dobric conceded that he knew, however, that the auction was a receiver's auction occasioned by the inability of Mr Charitopoulos' business to pay its debts. He could not recall whether or not Mr Charitopoulos informed him that he did not intend to pay for the goods.

256 Mr Dobric testified that at the beginning of May 2006, he had access to $30-40,000, but testified that it was unavailable to pay the deposit, because he required it for stock and wages.

257 He then testified that he could not remember how he had used the $30-40,000, which he no longer retained. He believed that he had bought stock and had applied it to personal expenses. He testified that the expenses of the business included stock and the wages of drivers, which had increased to nine within a very short period of time.

258 In his testimony, Mr Dobric did not, as he acknowledged, refer to paying Magic Touch Cleaning Service from the $30-40,000. He stated "I remember NPS Group and I'm pretty sure Magic Touch, but I can't recall to be honest, a hundred per cent, I can't recall. But the Magic Touch didn't clean up the factory, I'm pretty sure - I'm not a hundred per cent sure, I'm - I know I spent some money on the NPS Group and it might have been Magic Touch, it might have been part of the deposit which I pay for the cleaning of the factory ... but I cannot a hundred per cent remember to be honest with you".

259 Mr Dobric reiterated several times that he was not sure whether he paid Magic Touch Cleaning.

260 He stated again:

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261 Mr Dobric testified that if he had paid Magic Touch approximately $12,000, he would have done so by cash, not by cheque. He stated that he could not remember when he made the payment, but had paid it to a person called "Bojan", who had a cleaning business. At that point, he shifted ground and testified that he did know that Magic Touch Cleaning Services had been paid, because "I paid the person, yes I did pay the person, I kind of did pay the person, yes".

262 Mr Dobric conceded that he would have been given a receipt for the payment "I'm pretty sure", but had not produced it pursuant to a notice to produce, as he had had no time to do so.

263 He stated that he was not involved in the cleaning, but had driven past the factory "and he was cleaning, Pantelis must have gone past the factory too and said he's fine".

264 He was unable to recall how much time elapsed between the performance of the cleaning service and his payment of the relevant invoice. He testified that he usually kept between $20-30,000 in cash in his house. He did not have a bank account, so there was no bank record of any kind to evidence the relevant payments.

265 Mr Dobric testified that he could not remember how much he paid the NPS Group, as "I haven't got anything in front of me to have - no, I don't remember, I remember the total amount was in about 19 something thousand dollars".

266 Mr Dobric conceded that he currently operated his business from premises owned by a company controlled by Mr Charitopoulos. He conceded that the premises were provided to him by that company rent-free.

267 He conceded that Mr Charitopoulos had never asked him to return any of the vans. He had never refused to return any of the vans to Mr Charitopoulos "because he never asked for them back".

268 At a later point, however, Mr Dobric testified that he would not return the vans to Mr Charitopoulos if asked, because "they're registered to Booze2U which I'm a director of" and "I said I'd pay for them when they've got a clean title".

269 He professed not to know, or to be unsure, whether the bank claimed an interest in the vans, although he agreed that he had attended Mr Codling's office on 10 May 2006 with Mr Charitopoulos after a van was repossessed. He stated that his interest had been in the perishable stock. He conceded that he presumed that Mr Charitopoulos had attended Mr Codling's office on 10 May 2006 to reclaim the repossessed van.

270 Mr Dobric's testimony was, in my opinion, self-contradictory, inconsistent, vague and inherently incredible. I did not consider Mr Dobric to be a truthful witness.

271 Mr Collinson submitted that the plaintiffs were not entitled to allege that the sale to Booze2U was a sham as the allegation was not included either in the contempt summons or the amended summons. The sale to Booze2U was first raised by the defendants' affidavits sworn 30 August 2006 and in my opinion, the plaintiffs were entitled to make submissions in relation to it. The defendants had the opportunity to call evidence and were given leave, at a late stage, to file and serve the affidavit of Mr Dobric in relation to the sale of Booze2U.

272 Mr Collinson did not contend that Haritopoulos was the owner of the vans and much of the other equipment removed from the Athol Park premises on 2 May 2006 and purportedly sold to Booze2U.

273 It appears that Haritopoulos had no title to the vans and equipment it purported to sell to Booze2U. Booze2U would therefore have no right to retain possession of the vans and equipment as against the true owner.

274 The defendants, however, contended that the sale by Haritopoulos, even if otherwise invalid, conferred a right to possession on Booze2U as against Haritopoulos or Mr Charitopoulos, so that the vans are not within paragraph 1 of the 5 May 2006 order, and the failure to return them is not a breach of that order.

275 In my opinion, irrespective of Haritopoulos' lack of title, the sale to Booze2U is not valid and enforceable against Haritopoulos.

276 I am satisfied to the requisite standard that the deposit was never paid, whether as stipulated by the sale agreement or by some other means, such as the satisfaction of Haritopoulos' debts to third party service providers in a like amount, or any amount. The defendants conceded that the balance of the purchase price has not been paid. The sale agreement provides that if the purchaser defaulted in payment, the sale agreement may be terminated by Haritopoulos at its option. Haritopoulos has made no attempt to terminate the sale agreement.

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.

278 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.

Whether 5 May 2006 order served

Service on 2 May 2006

279 By affidavit sworn 12 May 2006, Mr William Eglinton, a process server and security investigator, deposed that at approximately 2.55pm, he served the 5 May 2006 order on Haritopoulos at its registered office at 203-205 Hanson Road, Athol Park.

280 Mr Eglinton also deposed that on 9 May 2006, at approximately 3.15pm, he personally served Mr Pantelis Charitopoulos with the 5 May 2006 order.

281 Mr Eglinton was an impressive, credible witness. He was consistent, clear, acknowledged adverse points reasonably and gave a full and measured account. He was professional, careful and deliberate.

282 In cross-examination, Mr Eglinton said he was first instructed on 4 May 2006 to serve the order of Whelan J made 3 May 2006 ("the 3 May 2006 order"). He was unable to serve the 3 May 2006 order.

283 In addition to serving the 3 May 2006 order, he was instructed by the receivers to locate the removed vehicles and try to recover them. He located some of the vehicles at the Wingfield Street premises through his contacts in Adelaide.

284 On 5 May 2006, he attended the Wingfield Street premises, accompanied by Mr Codling and a policeman and recovered some vehicles.

285 After lunch on 5 May 2006, he was instructed to serve the 5 May 2006 order on the defendants. He served Haritopoulos on 5 May 2006, but could not serve Mr Charitopoulos on 6, 7 or 8 May 2006, despite attempts to locate him. Mr Heidt, a manager employed by the receivers, informed Mr Eglinton that Mr Charitopoulos' residential address was 39 Elderslie Avenue, Fitzroy, in South Australia. An industry colleague informed Mr Eglinton that Mr Charitopoulos had a characteristic facial scar running down the right side of his face.

286 Mr Eglinton "staked out" Mr Charitopoulos' residential address on 8 May 2006. He attended the address on 8 May 2006, but no lights were on and no-one answered the door when he knocked. He conducted surveillance. He had not, at that stage, seen Mr Charitopoulos personally. He was still unsure, at that point, where Mr Charitopoulos conducted his business.

287 By the morning of 9 May 2006, Mr Eglinton, from his observations and enquiries, realised that Mr Charitopoulos' business was being conducted from the Harrison Road premises.

288 Early on the morning of 9 May 2006, he observed a silver Holden Statesman with the number plate "ARCHIE", parked outside Mr Charitopoulos' home at 39 Elderslie Avenue, Fitzroy. Later that day, he observed the same vehicle in Harrison Road, travelling from the direction of the Harrison Road premises. He deposed that he could not see the driver, as the windows of the car were tinted, but he believed that it might be driven by Mr Charitopoulos, although the driver did not precisely match his physical description. At the hearing, Mr Eglinton stated that he could not see inside the car and could not see the driver clearly. He believed that the vehicle might be heading to the Epworth Building in Pirie Street in the Adelaide CBD which was owned by Mr Charitopoulos, who had an office there. The Epworth Building is situated on Pirie Street, directly across from the offices of the receivers, Sims Partners. Mr Eglinton knew that Mr Heidt, a manager at Sims Partners, had seen Mr Charitopoulos before. He therefore telephoned Mr Heidt on his mobile telephone. He informed him that he suspected that Mr Charitopoulos was heading for the Epworth Building in a Holden Statesman vehicle which Mr Eglinton was currently following. He asked Mr Heidt to come down from his offices to identify the driver of the Holden Statesman (in the event that the car arrived at the Epworth Building). According to Mr Eglinton, Mr Heidt telephoned Mr Eglinton back about four minutes later and told him that he had just observed Mr Charitopoulos standing outside the Epworth Building on Pirie Street, talking on his mobile telephone and wearing a suit jacket, with a white shirt and no tie. If Mr Heidt's identification were correct, the driver of the Holden Statesman (which Mr Eglinton was still following), could not be Mr Charitopoulos.

289 Mr Heidt was cross-examined. He was a clear, impressive and credible witness.

290 Mr Heidt testified that he first met Mr Charitopoulos when the receivers were appointed on 4 August 2005. He had had many face-to-face dealings with Mr Charitopoulos. He confirmed that on 9 May 2006, he received a telephone call from Mr Eglinton at about 3.00pm, in which Mr Eglinton told him that he was following a Holden Statesman vehicle with the number plate "ARCHIE" which he suspected was being driven by Mr Charitopoulos. Mr Heidt then went downstairs with his mobile telephone.

291 His evidence was that he saw a man whom he recognised as Mr Charitopoulos standing on the other side of the road, wearing a white shirt, jacket, dark trousers and no tie. The person was standing in the laneway within one or two metres of the kerbside. He was talking on a mobile telephone and was facing straight on to Pirie Street. Mr Heidt conceded that he saw the man whom he identified as Mr Charitopoulos for only a short time.

292 The Epworth Building, on one side of the laneway, is a multistorey building. The building on the other side of the laneway is over ten storeys, but is set some way back from Pirie Street. Mr Heidt could not recall where the sun was at that time and he could not recall any shadow. According to Mr Heidt, Pirie Street was not particularly busy at the time.

293 Mr Heidt testified that he then went upstairs and telephoned Mr Eglinton to inform him of what he had observed. Mr Eglinton did not say where his car was at that point, but Mr Heidt believed that Mr Eglinton was still travelling in his car and had not yet served anyone. He described the dress of the man he believed to be Mr Charitopoulos, and told Mr Eglinton that he was talking on a mobile telephone.

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.

295 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.

296 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".

297 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.

298 After his second telephone conversation with Mr Heidt, Mr Eglinton continued to follow the Holden Statesman, which had not yet reached the Epworth building, because he believed it was likely to be travelling there. At approximately 3.00pm, he observed the Holden Statesman pull over into a laneway near Pirie Street, near a man who wore clothing which matched the description given by Mr Heidt and who was talking on a mobile telephone. The driver of the Holden Statesman had opened the door of the car, but did not get out, and was not clearly visible. Mr Eglinton testified that he saw the driver and the man standing in Pirie Street acknowledge each other.

299 Mr Eglinton got out of his own car and double parked it on the other side of the road. He saw that the man standing in Pirie Street had a scar on the right side of his face and wore a suit, white shirt and no tie. He approached the man and asked, "Are you Pantelis Charitopoulos?" The man replied, "No, I'm not". Mr Eglinton said, "I think that you are". According to Mr Eglinton, the man refused to take the 5 May 2006 order, so Mr Eglinton left it at his feet and said, "Pantelis, you've been served with court orders".

300 Mr Eglinton agreed that Pirie Street was busy at the time and that his contact with the person served was short. He estimated that the contact lasted less than 30 seconds, although he had a short conversation with the man. However, the person was facing him directly and he got a good look at him.

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".

302 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.

303 Mr Eglinton exhibited to his affidavit a newspaper clipping from The Advertiser, containing a photograph of two persons identified as Pantelis Charitopoulos and Marina Charitopoulos. He deposed that the person identified in the clipping as Pantelis Charitopoulos is the same person whom he served with the 5 May 2006 order on 9 May 2006 and who confirmed to Mr Eglinton on 10 May 2006 that he was Pantelis Charitopoulos.

304 Mr Codling, of Mason Gray Strange, confirmed that on the morning of 10 May 2006, Mr Eglinton arrived at the offices of Mason Gray Strange, after repossessing a van identified as having been removed from the Athol Park premises. Mr Codling stated that the van driver, who was distressed, had sought to tender a cheque in order to retain the vehicle. He refused to accept the cheque, because he required payment of the entire outstanding account.

305 Mr Codling also testified that, at a certain point, Marina Charitopoulos, Mr Charitopoulos and Mr Dobric arrived at the reception area of Mason Gray Strange. He stated that Messrs Eglinton, Charitopoulos and Dobric then accompanied him into his office. According to Mr Codling, Mr Charitopoulos was unhappy about the repossession of the van and requested that it remain in his or Mr Dobric's possession. Mr Codling then telephoned Mr Heidt to seek his consent for Mr Charitopoulos to retain the van, which was not granted.

306 Mr Codling testified that he overheard the exchange between Mr Eglinton and Mr Charitopoulos. He deposed in his affidavit, and testified at the hearing, that in response to Mr Eglinton's question "are you Pantelis Charitopoulos today?" Mr Charitopoulos responded with words to the effect of "I'm Pantelis today. I was Pantelis yesterday".

307 He conceded that he could not recall the precise words, but despite rigorous cross-examination, consistently denied that Mr Charitopoulos replied "I am Pantelis Charitopoulos every day". Mr Codling explained that Mr Charitopoulos' reply stuck in his mind, because prior to Mr Charitopoulos' arrival, Mr Codling and Mr Eglinton had been discussing the service on Mr Charitopoulos on the previous day.

308 Mr Codling presented as a clear, consistent and credible witness. It was suggested that he may have discussed his evidence with Mr Eglinton, that his testimony was influenced by the discussion, that there was inconsistency with his affidavit and that he lacked a clear recollection. I am satisfied, however, that his account was truthful and convincing.

309 Mr Charitopoulos denied that he was served with the 5 May 2006 order on 9 May 2006 or, indeed, at any time thereafter. He contended that his associate, Mr Koimtsidis, was the person standing on Pirie Street on the afternoon of 9 May 2006, who was observed by Mr Heidt and served by Mr Eglinton.

310 In his sworn affidavit, Mr Charitopoulos deposed that Mr Koimtsidis was a tenant of the Epworth Building at 33 Pirie Street, Adelaide, whom he had known "in business and socially for a number of years". He deposed that on the Friday preceding 9 May 2006, Mr Koimtsidis had lent him his Holden Statesman vehicle with the number plate "ARCHIE", because Mr Charitopoulos was "having problems with his own vehicle."

311 Mr Charitopoulos, at the outset of his testimony at the hearing, corrected the assertion in his affidavit and stated that he had borrowed Mr Koimtsidis' car because he felt uncomfortable driving his own car (a Mercedes Benz) when "I owe a lot of people in Adelaide a lot of money, in excess of $3million ... a lot of small people". At the hearing, Mr McNamara had earlier testified that he had advised Mr Charitopoulos (who turned up at the auction in a Porsche and who had also been driving a Mercedes Benz and Bentley) not to drive "those types of cars given the circumstances". Mr Charitopoulos stated that it occurred to him only the day before giving evidence that the assertion in the affidavit about having problems with the vehicle was untrue, or might be misunderstood.

312 He was evasive when questioned about whether he had discussed the issue with anyone.

313 Mr Charitopoulos, in his affidavit, testified that he was not wearing a coat or suit jacket on the afternoon of 9 May 2006. Mr McNamara had been unable to recall whether Mr Charitopoulos was wearing a jacket when he visited McNamara's office shortly after the incident on Pirie Street. At the outset of giving evidence, Mr Charitopoulos corrected his affidavit to state that he was "not sure about the jacket, whether I was wearing one or not".

314 Mr Charitopoulos, in his affidavit, deposed that he was the driver of the Holden Statesman on the afternoon of 9 May 2006, and was travelling to the Epworth Building to pick up Mr Koimtsidis, who was waiting for him. He deposed that on arrival, he pulled up in the laneway, parked the car and observed Mr Koimtsidis standing two to three metres away from him near the T-junction of the laneway and Pirie Street. Mr Charitopoulos deposed that Mr Koimtsidis was talking on his mobile telephone at the time. Mr Charitopoulos deposed that he got out of the car and observed a person go to Mr Koimtsidis, speak to him, and drop some papers at his feet after which Mr Charitopoulos "observed Archie pick up the papers and take them into the Epworth Building".

315 At the hearing, Mr Charitopoulos testified that the events of 9 May 2006 were "very clear" to him. He stated that when he drove to the Epworth Building he was "picking up Archie I think. I think we were going to do something or vice versa. I don't recall this second why, but it was something to do with Archie ... It was lunch or something else to do with Archie."

316 He conceded that he did not remember what he and Mr Koimtsidis did after the incident. He then stated that although he did not remember exactly, he believed they went to lunch.

317 He conceded that he could not remember why it was necessary for him to get out of the parked Holden Statesman when stopping to pick up Mr Koimtsidis. He testified that he turned the car into the laneway. He parked the car four or five metres from where Mr Koimtsidis was standing. He believed that he left the engine running and got out of the car without closing the door. He suggested that he may have done that so that Mr Koimtsidis could drive the vehicle.

318 At the hearing, Mr Charitopoulos stated that the afternoon of 9 May 2006 was the first occasion on which he saw Mr Eglinton, but that he recognised him the next morning as the person who had mistakenly served Mr Koimtsidis on the previous afternoon.

319 Mr Koimtsidis, in an affidavit sworn 8 August 2006, deposed that he had known Mr Charitopoulos for at least three years and that he lent Mr Charitopoulos the Holden Statesman on about Friday, 5 May 2006 "as he was having problems with his own vehicle" and at 2.45pm on 9 May 2006 Mr Charitopoulos contacted him to return the vehicle to him. Mr Koimtsidis deposed that on 9 May 2006, he was wearing a white shirt and sports trousers and was not wearing a coat. He came down from his office to Pirie Street and stood at its junction with the private laneway that runs along the side of the Epworth Building in order to await Mr Charitopoulos' arrival. He stood there talking on his mobile telephone and, while doing so, noticed Mr Charitopoulos drive past him and park the Holden Statesman in the laneway.

320 Mr Koimtsidis deposed that Mr Charitopoulos "stayed in and near the Statesman". Mr Koimtsidis deposed that he continued talking on his mobile telephone with his back to Pirie Street facing a westerly direction when a man came up and started talking to him, but he continued with the mobile telephone conversation. When he turned around he "found a bundle of documents at my feet. They had been dropped by the man."

321 Mr Koimtsidis deposed that "Pantelis was not near me at the time the documents were served on me but was further down the laneway with the Statesman."

322 Mr Koimtsidis deposed that he picked the documents up, saw that they were legal documents and took them straight into the lawyers at the Epworth Building "and asked them what I should do with the documents as they did not belong to me".

323 In his affidavit sworn 30 August 2006, Mr Charitopoulos deposed that Mr Koimtsidis was a person with whom he had had social and business contacts for some years. The affidavit provided no further details about the relationship with Mr Koimtsidis.

324 Mr McNamara deposed that he prepared the affidavit of Mr Koimtsidis sworn 8 August 2006. He deposed that on or about 7 September 2006, he was advised by Mr Davies of the defendants' Melbourne solicitors, that a notice of cross-examination had been served in relation to Mr Koimtsidis. He advised Mr Koimtsidis of that.

325 Mr Koimtsidis was interstate until 12 September 2006, but Mr McNamara met him on 14 September 2006 and told him that he would be required in Melbourne to give evidence at the hearing of the contempt summons. Although Mr Koimtsidis initially advised that he would be available, on 21 September 2006, he told Mr McNamara that he had to travel to Ghana on urgent business in relation to precious metal transactions for his company.

326 Mr McNamara deposed that Mr Koimtsidis, when reminded that he was required to give evidence in Melbourne, stated that he did not think that he would be back in Australia by the required date and that there was nothing he could do about it, as the business he was transacting in Ghana was too important to his company.

327 Mr McNamara further deposed "Our firm does not act for Mr Koimtsidis' company and I do not know the details of the business the company or Mr Koimtsidis are involved in, in Ghana. I do not have any contact details for Mr Koimtsidis in Ghana".

328 Mr Koimtsidis did not present for cross-examination at the hearing of the contempt summons or at any time thereafter, although on 24 October 2006 at the conclusion of final submissions, at the defendants' request I fixed a date, 8 November 2006, said to be convenient for Mr Koimtsidis, to provide a further opportunity for his attendance. Mr Koimtsidis failed to appear on 8 November 2006. On that day, the Court reserved its decision.

329 Although it could reasonably be inferred from the affidavit of Mr Charitopoulos sworn 4 September 2006 and the affidavit of Mr McNamara that Mr Koimtsidis' business interests were independent of Mr Charitopoulos and that he could not be contacted while in Ghana, at the hearing, Mr Charitopoulos acknowledged in cross-examination that he was in regular telephone contact with Mr Koimtsidis in Ghana and was a partner of Mr Koimtsidis in a mining business in Ghana, which had been on foot for a number of years. When asked if he had informed his lawyers of the partnership, Mr Charitopoulos replied: "Maybe briefly. I haven't really made a point about it. I can't - I can't be precise, I don't know. I may have. I may have. I don't know, I don't see the relevance".

330 On 14 December 2006, the parties were advised that the Court was ready to hand down reasons for judgment on 15 December 2006.

331 On 15 December 2006, the defendants sought that the Court defer handing down its reasons, in order to afford yet a further opportunity for Mr Koimtsidis to attend to give evidence. The affidavit of Mr Charitopoulos sworn 14 December 2006 in support of that application deposed that Mr Koimtsidis was expected to return to Australia in the week prior to Christmas and would be available to give evidence. Senior counsel for the plaintiffs was, however, unavailable during that week.

332 On 15 December 2006, I deferred handing down reasons for judgment and fixed the date of 8 February 2007 in order to afford a final opportunity for Mr Koimtsidis to give evidence. I ordered the defendants to file and serve an affidavit to apprise the Court of the arrangements for Mr Koimtsidis' attendance by 1 February 2007. The defendants did not comply with that order. On 8 February 2007, Mr Koimtsidis did not attend for cross-examination. No explanation for his non-attendance was offered.

333 Given the repeated failure of Mr Koimtsidis to attend for cross-examination, despite the fixing of convenient alternative dates, and the absence of any excuse or explanation for his non-attendance, despite his close association with Mr Charitopoulos (which was not frankly acknowledged until a late stage), I place no weight on the affidavit of Mr Koimtsidis.

334 The affidavit of Mr Charitopoulos, sworn 30 August 2006, and the affidavit of Mr Koimtsidis, sworn 8 August 2006, did not indicate that Mr Charitopoulos accompanied Mr Koimtsidis into McNamara Lawyers to obtain advice. Mr Charitopoulos deposed that he observed Mr Koimtsidis go into the Epworth Building. That statement conveyed the impression that he did not accompany Mr Koimtsidis into the Epworth Building.

335 The affidavit of Mr McNamara sworn 30 October 2006, however, stated that he was, called to reception at his office on 9 May 2006 to speak to a person who "had just been served with documents". He attended reception and saw Mr Koimtsidis, who was at the reception desk, while Mr Charitopoulos was in the reception area.

336 Mr McNamara deposed that Mr Koimtsidis advised him that someone had just thrown some documents at his feet while he was standing in the laneway next to the Epworth Building, which he had picked up and noted that they were Court documents apparently related to Pantelis Charitopoulos.

337 Mr McNamara deposed that he had been retained by the defendants, including Mr Charitopoulos. He deposed that he told Mr Koimtsidis that he did not want the documents and that Mr Koimtsidis should immediately write down what had happened, look at the documents and return them to the court or to the firm of solicitors that had prepared them. Mr Koimtsidis wrote a note which stated:

[100]

338 Mr McNamara, at the hearing, testified that prior to 9 May 2006, he knew Mr Koimtsidis by sight, but had not met him. He knew Mr Charitopoulos well and acted for him professionally. He testified that when Mr Koimtsidis stated that the documents had been thrown at his feet, Mr Charitopoulos stood back, but subsequently told Mr McNamara that he was sitting (or leaning) on the car when the documents were dropped on the ground.

339 Mr McNamara prepared Mr Koimtsidis' affidavit of 8 August 2006 at the request of Septimus Jones & Lee, on the advice of Mr Moore of counsel.

340 By his fifth affidavit sworn 30 August 2006, Mr Charitopoulos acknowledged that "he went into the Epworth Building with Archie" when Mr Koimtsidis sought to consult lawyers.

341 Mr Charitopoulos deposed that he knew that the 5 May 2006 order had been made, but did not know its full extent. At the hearing, he was evasive about his level of knowledge. He initially testified that he did not know what the 5 May 2006 order was about and denied that Mr Moore of counsel had told him what it was about. He stated that Mr Moore "said there were orders, not necessarily the material of the orders". Nevertheless, he deposed that he was surprised that the 5 May 2006 order had not been served on him by 9 May 2006. It is not clear why that would be the case if he did not know what it contained or if Mr Moore had not informed him of its content. Further, it is not apparent why counsel would inform Mr Charitopoulos only that an order had been made and omit to inform him of its substance. Ultimately, Mr Charitopoulos conceded that, when the papers were dropped at Mr Koimtsidis' feet, "I had a rough idea what it was about."

342 Mr Charitopoulos testified that he did not remember when he first saw the 5 May 2006 order. He could not state whether it was in June, July, August or September.

343 He testified that the alleged service on 9 May 2006 "was just a clear mistaken identity. It's quite humorous. I was not served, sir." He was, however, conscious that "If I hadn't been served the orders ... didn't comply [sic] to me did they? I had to be served with them."

344 He conceded that he realised on 9 May 2006 that Mr Koimtsidis had been mistakenly served instead of himself. Although he initially testified that Mr Koimtsidis wished to consult a lawyer, he subsequently acknowledged that he told Mr Koimtsidis to take the papers to Mr McNamara, because he wanted the events to be recorded. "I guess that's evidence. That I - the wrong person had been served".

345 Mr Charitopoulos was questioned on why he and Mr Koimtsidis took the 5 May 2006 order to the lawyers if it did not concern Mr Koimtsidis and he, to his knowledge, had not been served. He testified that when the 5 May 206 order was served, there was no discussion about it, other than "we just said to take them to the lawyers". Ultimately, however, he conceded that "I told him to take them [the papers] to Mr McNamara ... because I had a rough idea what they were." He did not remember the conversation. He testified that he did not look at the papers and did not know if Mr Koimtsidis saw them.

346 Mr Charitopoulos was unable to explain why he had accompanied Mr Koimtsidis into the lawyer's office, if he "didn't deal with the matter". He initially testified that he had walked out of the lawyer's office at one point, but he appeared to modify or retract that evidence, stating that he was in the reception area but "I think I may have walked out of the door".

347 Ultimately, he conceded that, "at some stage", he had stood four or five paces behind Mr Koimtsidis because "I didn't want to have anything to do with those documents ... Because if I had seen the documents I thought that they would have had some implication so I deliberately stayed away from the documents".

348 Mr Charitopoulos, in his affidavit sworn 3 October 2006, referred to the meeting with Mr Eglinton on 10 May 2006 in the offices of Mason Gray Strange. He deposed that he was having a discussion with Mr Codling of Mason Gray Strange in relation to a vehicle when Mr Eglinton came into the room and asked, "Are you Pantelis Charitopoulos today?" He denied that he responded as Mr Eglinton testified, deposing that instead he stated, "I am Pantelis Charitopoulos every day".

349 At the hearing, he denied that he had a conversation with Mr Eglinton in which he complained about the repossession of a vehicle which was being used to deliver food that day. He could not place the conversation in the sequence of events and did not recall details. He initially testified that Mr Dobric was also present at the meeting. He stated that he recalled "parts" of the meeting. Ultimately, he testified that Mr Dobric may have been outside the offices of Mason Gray Strange consulting with the driver of the van which had been repossessed, and conceded that he could not clearly remember whether Mr Dobric was there at all.

350 He testified that when Mr Eglinton "asked me if I was Pantelis Charitopoulos today and I replied that I was Pantelis Charitopoulos every day, I think I may have said 'Why wouldn't I be?'." He testified that he was a bit dumbfounded when asked the question.

351 He testified that he disliked Mr Eglinton from the outset of the meeting, although he had never spoken to him before, because Mr Eglinton was a process server. He testified that he was aware that Mr Eglinton was a process server because he had witnessed him attempt to serve Mr Koimtsidis on the afternoon of the previous day.

352 Despite his inability to recall details, Mr Charitopoulos asserted that he remembered the conversation with Mr Eglinton. "It was crystal clear".

Service on 2 August 2006

353 Mr Eglinton testified that he became aware, as early as 11 May 2006, that Mr Charitopoulos denied that he had been served on 9 May 2006.

354 Mr Hume testified that once it became apparent that Mr Charitopoulos denied that he had been served on 9 May 2006, it was decided that it would be prudent to serve him again. He therefore arranged to send Mr Heidt further copies of the 5 May 2006 order and standing instructions to re-serve the order.

355 Mr Heidt recalled receiving a letter of Middletons dated 23 June 2006 enclosing multiple copies of the 5 May 2006 order to serve on Mr Charitopoulos a second time. He could not recall whether the 5 May 2006 orders had a blue stamp. He believed that he told Mr Eglinton to re-serve the 5 May 2006 order, and that Mr Eglinton stated that he still had copies of the original order and did not require more copies.

356 Mr Heidt believed Middletons had also sent him copies of the 5 May 2006 order with blue stamps in May 2006. However, he was not instructed to arrange for a further service of the 5 May 2006 order until late July 2006, at the same time as he was instructed to leave documents for George Charitopoulos at two separate addresses, in South Australia.

357 By a letter of Middletons to Mr Eglinton dated 24 July 2006, Middletons instructed Mr Eglinton to serve four Court documents and a covering letter on George Charitopoulos by leaving them at Pantelis Charitopoulos' residence at 39 Elderslie Avenue, Fitzroy, South Australia.

358 Mr Hume of Middletons gave evidence. He identified the letter of Middletons to Mr Eglinton dated 24 July 2006. He was not the author of the letter, but was the contact reference.

359 The letter of Middletons to Mr Eglinton dated 24 July 2006 enclosed four sets of documents, each with a bulldog clip, two originals and two copies. Mr Eglinton did not observe a copy of the 5 May 2006 order included with the documents. He had received about twenty copies of the 5 May 2006 order from Mr Heidt prior to 9 May 2006 for service and had some left over. The letter of instruction did not refer to serving the 5 May 2006 order and did not state that copies were included.

360 The bundle of original documents returned by Mr McNamara to Middletons under covering letter of Mr McNamara to Middletons dated 2 August 2006 included a copy of the 5 May 2006 order with a blue stamp.

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

362 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.

363 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.

364 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.

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.

366 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.

368 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.

369 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.

370 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.

Credit of Witnesses

371 Mr Eglinton, Mr Heidt, Mr Hume and Mr Codling gave evidence on behalf of the plaintiffs. They were cross-examined. I considered them to be clear, direct, consistent and credible witnesses. The unexplained factors, occasional lapses of memory or apparent inconsistencies were few, and in any event, minor, and inconsequential to the principal issues.

372 The defendants did not seek to cross-examine any other witness who swore an affidavit on behalf of the plaintiffs.

373 The defendants' witness were Mr Charitopoulos, Mr McNamara and Mr Dobric. They were cross-examined. I have already referred to the quality of Mr Dobric's evidence above.

374 Mr Charitopoulos swore six affidavits. The successive affidavits revealed inconsistencies and material omissions which were misleading. For example, Mr Charitopoulos' affidavit of 30 August 2006 clearly indicated that he did not accompany Mr Koimtsidis into McNamara's office, but his affidavit sworn 3 October 2006 acknowledged that he did accompany him. That affidavit was sworn after Mr McNamara's affidavit, which revealed that Mr Charitopoulos accompanied Mr Koimtsidis.

375 Mr Charitopoulos' affidavit indicated that he knew Mr Koimtsidis socially and through business. It did not reveal that, (as ultimately emerged), they were partners engaged in a precious metal operation in Ghana.

376 The affidavits of Mr Charitopoulos therefore failed to present a full account and appeared to suppress material details.

377 The affidavits of Mr Charitopoulos contained assertions inconsistent with the affidavit and oral evidence of Mr McNamara. Mr Charitopoulos corrected several significant matters at the outset of his oral evidence. No explanation was proffered for the change of evidence on a number of significant matters at that point.

378 Mr Charitopoulos' oral evidence not only contradicted material assertions made in his affidavits, but changed rapidly in the course of cross-examination. It rapidly swung "full circle" from denial to concession on several occasions. While asserting a "crystal clear" memory of matters which served his case, Mr Charitopoulos consistently professed to have no memory of other significant matters, with no convincing explanation for his selective recall.

379 In his oral testimony, Mr Charitopoulos progressively introduced new assertions on topics which had apparently been comprehensively and differently dealt with in his affidavits.

380 His oral evidence was retracted, modified or altered, to such an extent, and with such frequency, that it was difficult to present any coherent summary of some aspects of it. It was obfuscating, evasive, inconsistent and, on a number of significant matters, inherently incredible. Having observed him closely, I have concluded that Mr Charitopoulos was not a truthful witness, but was prepared to give false testimony in order to suit his perceived advantage.

381 In the case of a conflict of evidence, I prefer the evidence of the plaintiffs' witnesses to that of Mr Charitopoulos. In particular, I prefer the evidence of Mr Eglinton and Mr Heidt in relation to the alleged service on 9 May 2006 and 2 August 2006.

382 As stated above, Mr Koimtsidis did not attend for cross-examination. The nature of his relationship and the extent of his association with Mr Charitopoulos emerged late, in the context of cross-examination. No reliance can be placed on Mr Koimtsidis' affidavit.

383 I accept the evidence of Mr McNamara, the defendants' lawyer, about the events of the afternoon of 9 May 2006. Although he deposed that he was unable to contact Mr Koimtsidis in Ghana, it would appear that he was not in possession of the information revealed by Mr Charitopoulos during the course of the hearing. In my opinion, it does Mr McNamara little credit that when handed Court documents directed to his client, who was present, he stated that he did not want the documents and recommended their return to the Court or the plaintiffs' solicitors without any explanation to the client of his obligations.

Conclusion on service on 9 May 2006

384 I am satisfied, to the requisite standard, that the 5 May 2006 order was served on Pantelis Charitopoulos on 9 May 2006.

385 For the reasons set out above, I accept the evidence of the witnesses for the plaintiffs and reject the contrary evidence of Mr Charitopoulos. I place no weight on Mr Koimtsidis' affidavit.

386 Mr Collinson argued that the hypothesis that Mr Koimtsidis was served on 9 May 2006, rather than Mr Charitopoulos, was reasonably open on the facts, because Mr Koimtsidis was not unlike Mr Charitopoulos in stature and Mr Eglinton had seen the Holden Statesman vehicle parked outside Mr Charitopoulos' residence early in the morning of 9 May 2006 and saw it near the Harrison Road premises in the afternoon. I am not persuaded that the presence of Mr Koimtsidis' Holden Statesman outside Mr Charitopoulos' home at 7.15am and near his Harrison Road business premises in the afternoon constitutes a basis for reasonable doubt that Mr Charitopoulos was not the driver of the vehicle at 3.00pm that afternoon. Mr Koimtsidis is Mr Charitopoulos' business partner; Mr Heidt, a credible witness, whose evidence I accept, clearly identified Mr Charitopoulos (whom he had seen many times before and who has an unusual identifying feature of a large facial scar), standing in Pirie Street at the time; and where Mr Eglinton, another credible witness, whose evidence I accept, clearly identified him by the description and the facial scar, identified him the following day and subsequently confirmed the identification from a newspaper photograph. 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..

Conclusion on service on 2 August 2006

387 I am also 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.

Conclusion on Contempt of 5 May 2006 order

388 The plaintiff bears the onus of establishing each element of the charge of contempt beyond reasonable doubt.

389 I am satisfied, to the requisite standard, that the necessary elements have been established in relation to the 5 May 2006 order.

390 The 5 May 2006 order was made by the Court.

391 Its terms were clear, unambiguous and capable of compliance.

392 The 5 May 2005 order was served on Mr Charitopoulos on 9 May 2006 and 2 August 2006.

393 I am satisfied that Mr Charitopoulos had knowledge of the terms of the 5 May 2006 order.

394 I am satisfied that the order was breached. No vehicles or other assets were delivered up to the plaintiffs and no affidavit was filed within 72 hours of service.

395 I consider that the breach of the 5 May 2006 order is continuing. The terms of order 1 of the 5 May 2006 order require, in unqualified terms, the delivery up of all the removed assets, and order 2 additionally requires (if a vehicle listed in the Schedule is no longer within the possession or control of the defendants), the filing and service of affidavits in relation to those listed vehicles. The affidavits filed in relation to the assets removed on 2 May 2006 but not delivered up falsely indicate that the relevant assets are not within the possession or control of Haritopoulos, by reason of the sale agreement with Booze2U. I am satisfied, to the requisite standard, that Mr Charitopoulos has continued to control and use the outstanding vans and assets for his own purposes, unimpeded by the sale agreement with Booze2U. I am satisfied to the requisite standard, that the sale to Booze2U does not constitute an impediment to the defendants' possession and control of the relevant vehicles and other assets.

396 The plaintiffs contend that the unrecovered assets are valued at approximately $109,000. The defendants have tendered a cheque for $72,549 for all the outstanding vehicles save for one which did not sell at auction. The value of that vehicle is disputed. The plaintiffs value it at $36,000 while the defendants contend that, by reference to comparable vehicles, its value is much less.

397 Due to the dispute, the plaintiffs have not accepted the tender of the $72,549.60.

398 The tender of funds, even of an agreed amount, does not constitute compliance with the 5 May 2006 order. In my opinion, it is inappropriate to determine the dispute over the value of the outstanding vehicles in the context of the present application.

399 I conclude that the defendants committed a contempt of the 5 May 2006 order.

400 The defendants, through their counsel, indicated that they had placed all material relevant to sentence before the Court and did not seek an opportunity to make further submissions in the event that the Court concluded that they were guilty of contempt of the 5 May 2006 order, which was endorsed in accordance with r.66.10(3) of the Supreme Court Rules.

401 In Forge v ASIC[42], McColl JA emphasised that where, as in the present application, the sentencing process of a criminal trial is effectively invoked, a tribunal has a duty to hear a person found guilty on the question of penalty. Her Honour referred to Hutley JA's recognition in Hall v New South Wales Trotting Club Ltd,[43] that persons found guilty cannot meaningfully address on sentence until informed of what they have been found guilty. She endorsed Hutley JA's view that it was incumbent, in effect, upon the tribunal to draw the right to the person's attention.[44]

402 In Forge, the primary judge had found that the appellants had contravened provisions of the Corporations Law. He disqualified them from managing corporations for certain periods and imposed pecuniary penalties. McColl JA observed that it was "incumbent upon the primary judge to approach the determination of the contravention issue and penalty in the two-stage process dictated by Hall v New South Wales Trotting Club Ltd. He should also have drawn the appellants' attention to their right to elicit evidence and make submissions on the issue of penalty."[45]

403 I therefore consider that in the present case, the defendants should have the opportunity to elicit further evidence and make submissions in relation to penalty.

Plaintiffs v Defendants

At a glance

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Judgment (103 paragraphs)

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Legislation Cited (8)

Cases Cited (12)