Equity-One Mortgage Fund Ltd v Pepe (No 2)
[2015] VSC 274
•12 June 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
S CI 2012 05754
| EQUITY-ONE MORTGAGE FUND LTD (ACN 106 720 941) | Plaintiff |
| v | |
| LUCA ANTHONY PEPE (ALSO KNOWN AS LUKE ANTHONY PEPE) | First Defendant |
| and | |
| L.A.P. TRANSPORT SERVICES PTY LTD IN ITS OWN RIGHT AND AS TRUSTEE FOR THE LUCA PEPE FAMILY TRUST (ACN 088 384 570) | Second Defendant |
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JUDGE: | GINNANE J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 21 and 29 May 2015 |
DATE OF JUDGMENT: | 12 June 2015 |
CASE MAY BE CITED AS: | Equity-One Mortgage Fund Ltd v Pepe & Anor (No 2) |
MEDIUM NEUTRAL CITATION: | [2015] VSC 274 |
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CONTEMPT OF COURT – Breach of injunction – Order for possession of property – Re-entering property after Sheriff took possession of property, in breach of injunction – Sentencing considerations – Supreme Court (General Civil Procedure) Rules 2005 (Vic) r 75.11
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr R D Shepherd | Summit Partners Legal Advisers and Consultants |
| For the First Defendant | In person |
HIS HONOUR:
On 21 May 2015, I delivered judgment[1] finding that Luca Anthony Pepe had committed a contempt of court by breaching a court order made on 6 May 2014. The contempt proved was that:
[1]Equity-One Mortgage Fund Ltd v Pepe & Anor [2015] VSC 161.
After the Plaintiff on 20 August 2014 took possession of the property situated at and known as 6 Fairmount Street, Hadfield in the State of Victoria (‘the Property’) the First Defendant entered on the property and thereafter on 7 January 2015 and 19 February 2015 remained on the Property.
PARTICULARS
(a) The Plaintiff took possession of the Property on 20 August 2014.
(b) …
(c) The First Defendant entered on the Property on 7 January 2015 and 19 February 2015 and remained on the property.
The injunction of 6 May 2014 prohibited Mr Pepe, after the plaintiff had taken possession of the property, from inter alia:
(a) entering on or remaining on the property;
(b) going within thirty (30) metres of the property;
(c) hindering the sale of the property by the plaintiff exercising its powers as mortgagee in possession.
On 21 May 2015, I also granted the plaintiff a further warrant of possession of the property. The plaintiff was first granted possession of the property by court order made more than 2 years ago, in May 2013.
The background to the present matter is that after the plaintiff lawfully took possession of the property through the Sheriff, Mr Pepe re-entered the property and remained there, at least in the periods I have found proved. In essence the present situation has arisen because over a long period he has been unwilling to obey the Court order of 6 May 2014.
It is necessary to determine what penalty should be imposed on Mr Pepe in respect of the contempt. I heard argument on that issue on 21 May and 29 May 2015.
Counsel for Equity One submitted that the purpose of a penalty order in a case like this was primarily to achieve compliance with the orders. He acknowledged that the court had wide powers. He noted that there had been no apology from Mr Pepe and that he had put the plaintiff to its proof. He submitted that this was a wilful and contumacious contempt and that Mr Pepe had intentionally remained on the property. He acknowledged that the Court should impose the minimum sentence consistent with the public interest.
I gained information about Mr Pepe’s circumstances from discussion with him during the hearing on 29 May 2015 and from the evidence that had been led.
The Court was again assisted by the presence and submissions of Mr P Lithgow of counsel, who attended the hearings pursuant to the Victorian Bar Legal Assistance Scheme and sat with Mr Pepe at the Bar table.
In Deputy Commissioner of Taxation v Gashi (No 3)[2]¸ Dixon J considered the sentencing considerations that are relevant when a contempt for breaching a court order is proved. I have had regard to them.
[2][2011] VSC 448.
Rule 75.11 of the Supreme Court (General Civil Procedure) Rules 2005 states:
Punishment for contempt
(1) Where the respondent is a natural person, the Court may punish for contempt by committal to prison or fine or both.
(2) Where the respondent is a corporation, the Court may punish for contempt by sequestration or fine or both.
(3) When the Court imposes a fine, it may commit, or further commit, the respondent to prison until the fine is paid.
(4) The Court may make an order for punishment on terms, including a suspension of punishment.
In an appropriate case the Court may decide not to convict a person for contempt of court.
Mr Pepe is 46 years of age and left school in Year 10. After serving an apprenticeship in panel beating, he has worked most of his life, up to the present, in the transport industry. He transports goods by truck.
His present difficulties arise from a debt he owes to the plaintiff, which as at April 2015, was apparently approximately $131,638.00. He says that the debt arose from refinancing debts secured against his home in 2011. His financial circumstances were affected following the economic downturn of 2009. Prior to that time, he had managed, through his own efforts, to purchase other properties, but they have been repossessed.
Mr Pepe is not married, and appears to have no immediate family support. He previously had a girlfriend, but she suffered a tragedy in 2010 when her 18 year old daughter was killed in a motor vehicle accident.
The property in Hadfield, that is at the centre of the present unfortunate situation, is his family home. His parents purchased it in 1966 and his mother lived there until shortly before her death in 2009.
Mr Pepe has an understandably strong and justified emotional attachment to the property. I gained the impression that Mr Pepe’s world has crowded in on him over the last few years and he has had considerable difficulty in coming to terms with the financial reality that now confronts him. As he said to me this morning, he feels paralysed in his present situation. He considers that he has not received appropriate advice from previous advisers.
I have given Mr Pepe a number of opportunities during these contempt proceedings to consider his position. I gave him another opportunity this morning before delivering my decision on penalty.
Mr Pepe is unwilling, or unable, to agree to obey the Court’s order of 6 May 2014.
Mr Pepe’s culpability has to be considered in light of his attachment to the property and the fact that his situation arises from the difficult financial situation in which he finds himself.
Mr Pepe is previously of good character.
Mr Pepe was arrested and spent a brief time in custody in order to secure his attendance at Court in order to participate in this proceeding. I have ordered him to pay the plaintiff’s costs of the proceeding.
Mr Pepe has deliberately disobeyed court orders. He disregarded the plaintiff’s lawful action in taking possession of his property, through the Sheriff, and he moved back into it. This has prevented the plaintiff exercising its legal rights to sell the property. The plaintiff has had to obtain a third warrant of possession.
Breaches of court orders of this nature are serious. Our system of justice can only operate if court orders are obeyed and, if necessary, enforced.
It is necessary to take into account the need to deter Mr Pepe and others who may contemplate disobeying court orders. It is clear that Mr Pepe decided to act in breach of the orders. I am satisfied that his conduct was wilful disobedience of the Court order and contumacious conduct.
The effect of the contempt has been to ignore court orders and to interfere with the administration of justice by re-entering the property after the Sheriff had taken possession of it on behalf of the plaintiff.
I consider that Mr Pepe must be convicted of contempt.
A sentence of imprisonment is a last resort, but there does not seem to be any alternative in this case. All indications are that Mr Pepe would be unable to pay a fine and may well continue to remain on the property in breach of the court order.
As I have stated, Mr Pepe appears not to understand the situation in which he finds himself. However, the court has given him a number of opportunities to consider his position. In those circumstances the only appropriate penalty is a period of imprisonment.
In all the circumstances, particularly Mr Pepe’s previous good character and the fact that his disobedience of the Court order appears in part attributable to his inability to come to grips with his present circumstances, a period of one month’s imprisonment is the appropriate penalty in respect of the contempt of court that I have found proved.
I accept that proceedings for civil contempt are primarily to compel obedience to a court order rather than to punish disobedience. As Dixon J discussed in Deputy Commissioner of Taxation v Ghazi(No3),[3] the Court under r 75.11(4) has power to make an order for punishment on terms, including a suspension of punishment. His Honour suspended the period of imprisonment to which he had sentenced the contemnor upon receiving undertakings that he would obey the court order.
[3][2011] VSC 448.
Following that approach, I indicate that if during his period of imprisonment, Mr Pepe is prepared to give an undertaking to obey the Court order of 6 May 2014, subject to hearing from the plaintiff, I will give consideration to his release from prison.
The final orders that I will pronounce are as follows:
1.The First Defendant is adjudged guilty of contempt of court in that, in breach of the order made by Vickery J on 6 May 2014, he entered on the property situated at and known as 6 Fairmont Street, Hadfield in the State of Victoria after the Plaintiff took possession on 20 August 2014 and thereafter, on 7 January 2015 and 19 February 2015, remained on the Property.
2.The First Defendant pay the Plaintiff’s costs of this proceeding, including reserve costs, on a standard basis.
3.The First Defendant be committed to prison for a term of one month, expiring on 11 July 2015.
4.The First Defendant have liberty to apply before Ginnane J or, in the event of his Honour being unavailable, before the judge sitting in the Practice Court, for suspension or variation of sentence upon the making of appropriate undertakings to the Court by the First Defendant.
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