Carlingford Fleet Pty Ltd v Sylvania Holdings Pty Ltd & Anor [2007] NSWSC 827

New South Wales Supreme Court

CITATION : Carlingford Fleet Pty Ltd v Sylvania Holdings Pty Ltd & Anor [2007] NSWSC 827

HEARING DATE(S) : 27/07/07 JUDGMENT OF : Gzell J

EX TEMPORE JUDGMENT DATE : 27 July 2007

DECISION : Declaration that respondent guilty of contempt of Court. Respondent ordered to pay applicants' costs on an indemnity basis.

CATCHWORDS : PROCEDURE - Contempt, attachment and sequestration - Whether respondent breached injunctions in December 2005 - Whether his signature appeared on hiring agreements - Whether charges proved beyond reasonable doubt - Whether unexplained delay in bringing contempt proceedings should be taken into account - Whether in the circumstances an order to pay indemnity costs was a sufficient penalty

CASES CITED : Witham v Holloway (1995) 183 CLR 525 Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98

Carlingford Fleet Pty Ltd - First Plaintiff Xtreme A1 Pty Ltd - Second Plaintiff PARTIES : Sylvania Holdings Pty Ltd - First Defendant Constadinos Kotsakis - Second Defendant Geoff Kotsakis - First Respondent

FILE NUMBER(S) : SC 5953/05

COUNSEL : Mr J Horowitz - Plaintiffs Ms J Shepard - Respondent

SOLICITORS : Beswick Solicitors - Plaintiffs

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

GZELL J

FRIDAY 27 JULY 2007

5953/05 CARLINGFORD FLEET PTY LTD & ANOR v SYLVANIA HOLDINGS PTY LTD & ANOR EX TEMPORE JUDGMENT 1 The plaintiffs, Carlingford Fleet Pty Ltd and Xtreme A1 Pty Ltd, seek an order that Geoff Kotsakis be found guilty of contempt of this Court for assisting the first defendant, Sylvania Holdings Pty Ltd, to be in contempt of an order made by Windeyer J on 14 December 2005. 2 In 2005, Carlingford and Xtreme were in the business of motor vehicle leasing and fleet management. Sylvania was engaged in the business of car rentals trading as Ascot Car Rentals operating from premises at Kings Cross, Mascot and Parramatta. 3 The second defendant, Constadinos Kotsakis, was the sole director and shareholder of Sylvania. Geoff Kotsakis was the father of Constadinos Kotsakis and worked for Ascot at its Kings Cross premises. 4 In 2005, Carlingford and Xtreme leased to Sylvania a number of vehicles. Sylvania subsequently failed to make a number of payments under the lease agreements. Constadinos Kotsakis was the guarantor of Sylvania's obligations under those leases. 5 On 28 November 2005, Young CJ in Eq ordered that Sylvania and Constadinos Kotsakis deliver up 87 vehicles to Carlingford and Xtreme forthwith. If they were unable to deliver up any of the vehicles as a result of such vehicles having been rented beyond noon on 30 November 2005, they were to deliver up to Carlingford and Xtreme forthwith copies of all rental agreements relating to those vehicles and they were not required to deliver up such vehicles. Further, Sylvania and Constadinos Kotsakis were ordered to assign to Carlingford and Xtreme any entitlements they had to rental moneys in respect of all vehicles that were not delivered into the possession of Carlingford and Xtreme on or before 5 pm on 30 November 2005. Execution of the orders was stayed until noon on 30 November 2005. 6 On 30 November 2005, the orders were entered and Carlingford and Constadinos Kotsakis attempted to repossess the vehicles. They recovered some but not all of the vehicles as a number had been rented out beyond noon on 30 November 2005. 7 On 14 December 2005, Windeyer J ordered that Sylvania by its agents and servants, including but not limited to Geoff Kotsakis, be restrained from renting out or otherwise parting with the possession of, other than to deliver up the vehicles to Carlingford and Xtreme, any of the outstanding vehicles and that Sylvania and Constadinos Kotsakis deliver up to the solicitors for Carlingford and Xtreme forthwith all current rental agreements in relation to 15 of the outstanding vehicles. 8 Geoff Kotsakis was served with those orders on 15 December 2005 at approximately 8.30 am. 9 On 19 December 2005, the solicitors for Carlingford and Xtreme served a notice to produce on the new solicitor for Sylvania and Constadinos Kotsakis requiring the production of all rental agreements in relation to the outstanding vehicles. On 20 December 2005 and 21 December 2005 the solicitors produced a large number of rental agreements in response to the notice to produce. 10 The produced rental agreements showed that Geoff Kotsakis deliberately breached the injunction granted by Windeyer J by causing Sylvania to rent out vehicles despite having been served with the injunction on 15 December 2005. Those vehicles were a Hyundai Elantra with registration number TDO 006, rented out on 15 December 2005 at approximately 7 pm and a Hyundai Getz with registration number SUR 214, rented out on 16 December 2005 at the approximately 5 pm. 11 In order to arrive at that conclusion, it is necessary to have regard to the first pages of the rental agreements with respect to the two vehicles. The rental agreement with respect to the Elantra has as the "time out", 7 and a squiggle that may indicate pm or am. But the time of return is 6 pm on 23 December 2005. The date of hire is 15 December 2005 and there are eight days of hire. The consequence must be that the "time out" on the document is 7 pm and not 7am, otherwise there would have been a different total for the rental days involved. 12 With respect to the Getz vehicle, the date of hire is 16 December 2005, the period of the hire is four days and the return is on 20 December at 5 pm. There is a similar squiggle against the "time out" of 5 that indicates that it was 5 pm. Furthermore, I doubt that the company carrying on business would rent out a vehicle at 5 am. But even if it did, the transaction occurred after the service of the orders of Windeyer J on Geoff Kotsakis. 13 I am satisfied, therefore, that the two agreements were entered into after the orders of Windeyer J had been served on Mr Kotsakis. 14 There is a signature on each of the documents on behalf of Ascot. The evidence of Jeffrey Choy is that Mr Kotsakis signed a rental agreement on behalf of Ascot for a motor vehicle hired by Mr Choy on 14 December 2005. I am satisfied that the signature on the rental agreements for the Elantra and the Getz are the same as that on the rental agreement with Mr Choy and each is the signature of Geoff Kotsakis. 15 Whether the contempt for which Geoff Kotsakis is charged is criminal or civil, the charges must be proved beyond reasonable doubt (Witham v Holloway (1995) 183 CLR 525 at 534). If there is a reasonable doubt about the alleged breaches, the charges fail. 16 Ms Shepard submits that I should have a reasonable doubt that the signatures on the two rental agreements are those of Geoff Kotsakis. I reject that submission. A comparison with the signature on the rental agreement with Mr Choy leads, in my view, to the conclusion beyond a reasonable doubt that each was the signature of the same person and that person was Geoff Kotsakis. 17 If Geoff Kotsakis acted in deliberate defiance of the orders of Windeyer J, the breaches constitute criminal contempt as wilful disobedience, unless the breaches were casual, accidental, or unintentional (Australasian Meat Industry Employees Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 108, 113). 18 There is no evidence that suggests the breaches of the orders were casual, accidental, or unintended. I am satisfied beyond reasonable doubt that Geoff Kotsakis is guilty of contempt of Court in that, in breach of the orders made by Windeyer J on 14 December 2005, as servant of Sylvania did cause it to rent out a Hyundai Elantra TDO 006 on 15 December 2005 at approximately 7 pm and a Hyundai Getz SUR 214 on 16 December 2005 at approximately 5 pm. 19 These events occurred in December 2005. There is no evidence that explains the delay in bringing the proceedings for contempt of the Court. Charges of contempt are serious and should be brought with expedition and not years after the event. Contemnors should not have the threat of such proceedings hanging over their heads for lengthy periods. The conviction of Geoff Kotsakis for contempt at this late stage can have no effect upon the proceedings of Carlingford and Xtreme. The only utility of the conviction is to enforce the effective administration of justice. In Mudginberri at 107 a majority of the High Court explained the purpose of punishment for contempt. Having been referred to the distinction between criminal and civil contempt, the majority went on to say: