ACN 062 895 774 Pty Ltd v Diane Tyndall

[2006] NSWSC 19

CITATION:	ACN 062 895 774 Pty Ltd v Diane Tyndall [2006] NSWSC 19
HEARING DATE(S):	7 December 2005
JUDGMENT DATE :	2 February 2006
JUDGMENT OF:	Sully J at 1
DECISION:	Declare that the cross-claimant, Diane Tyndall, has valid lien over property 4 Carlow Crescent, Killarney Heights; Declare that Diane Tyndall is entitled to continue in possession of said property; Plaintiff's claim for possession dismissed; Plaintiff to pay costs of defendant in original claim and cross-defendant to pay cross-claimant's costs of cross-claim; Exhibits may be returned
CASES CITED:	Hewett v Court (1983) 149 CLR 639 Lennards Carrying Co. Ltd. v Asiatic Petroleum Co. Ltd (1915) AC 705 at 713
PARTIES:	ACN 062 895 774 Pty Ltd Diane Tyndall
FILE NUMBER(S):	SC 11110/04
COUNSEL:	D. Durston - Plaintiff M. Sahade - Defendant
SOLICITORS:	Gary Cassim & Assoc. - Plaintiff Comino Prassas - Defendant

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IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

SULLY J

2 February 2006

11110/04 - A.C.N 062 895 774 PTY LTD. v Diane TYNDALL

JUDGMENT

SULLY J:

Introduction

1 By a Statement of Claim filed on 20 April 2004 a Body Corporate which is styled ACN 062 895 774 Pty Limited commenced as plaintiff an action at law seeking a judgment in its favour for the possession of certain premises being residential premises known as 4 Carlow Crescent, Killarney Heights (“the subject premises”). The Statement of Claim seeks, as well, orders for mesne profits and costs. When the proceedings came on for hearing in this Court the claim for mesne profits was expressly abandoned.

2 The Statement of Claim cites as defendant Miss Diane Tyndall, and pleads against her these propositions:

1. “The Plaintiff is the registered proprietor of land and premises known as 4 Carlow Crescent, Killarney Heights, NSW (‘the premises’).
2. The defendant is in occupation of the premises as a trespasser.
3. The Plaintiff has been deprived of the use and enjoyment of the premises and has thereby suffered loss and damage.”

3 On 4 February 2005 the defendant filed a verified Amended Defence and, separately, a verified Cross-claim. The Amended Defence traverses each of the three propositions advanced in the Statement of Claim; admits that in fact the Defendant resides in the subject premises; and pleads, in answer to the whole of the Plaintiff’s claim, an equitable lien. It will be necessary to return later herein to the precise terms of the lien thus pleaded. The separately pleaded Cross-claim re-pleads the defences of current possession and of equitable lien and claims thereupon the following relief:

“1. A declaration that the Cross-Claimant (“Tyndall”) has a valid lien over the property being Lot 42 in Deposited Plan 215008 known as 4 Carlow Crescent Killarney Heights NSW (“the Property”) in respect of a debt owed to her in connection with the Property as represented by the judgement of this Court in her favour in proceedings 1594 of 1998.
2. A declaration that Tyndall is entitled to continue possession of the Property until the debt, the subject of the lien referred to in 1 above, has been satisfied.
3. A declaration that the interest (if any) of the Cross-Defendant (“CDCS”) in the Property, is subject to the lien of Tyndall referred to in 1 above.
4. Further and in the alternative, a declaration that Tyndall has an equitable interest in the Property.
5. Further and in the alternative, a declaration that the interest of Tyndall in the Property, has priority over the interest (if any) of CDCS in the Property.
6. Such further or other order as to the Court seems just.
7. Costs.”

4 On 14 March 2004 the plaintiff filed a verified Defence to the cross-claim. It will be necessary to return later herein to the precise terms of that pleading.

5 At the commencement of the hearing before this Court learned counsel for the plaintiff informed the Court, with the agreement of learned counsel for the defendant, that it was not in dispute:

“……………….that the plaintiff is the owner of the property and has to comply with all the technical steps necessary for possession and the only issue is whether the defendant’s claim for an equitable lien is made out.”

6 The hearing before this Court proceeded upon that basis.

7 The plaintiff neither called nor tendered any evidence. The defendant herself gave oral evidence; and she read and relied upon the contents of an affidavit which she had sworn on 15 April 2005, there being exhibited to that affidavit a folder of documents which was admitted as exhibit D1. The defendant tendered, and I admitted as exhibit D2, a Notice to Admit Facts. To the contents of this document, also, it will be necessary to return later herein

The Basis of the Equitable Lien Pleaded by the Defendant

8 The lien is pleaded in ten numbered sub-paragraphs of paragraph 3 of the Amended Defence. The sub-paragraph identified as (xi) should have been identified as (x). There is no identified (x); and this numbering error has been carried over into the defence pleaded by the plaintiff in answer to the defendant’s cross-claim. In the hope of avoiding confusion I will reproduce the sub-paragraphs as they appear in the defendant’s pleadings; and I will append to each such sub-paragraph an italicised reproduction of the plaintiff’s plea in answer to the particular sub-paragraph.

“(i) On or around 4 March 1998, Tyndall commenced proceedings in the Supreme Court against Terrence John Clee (“Clee”) (file number 1594 of 1998) claiming inter alia specific performance of the said agreement for damages for breach of the said agreement in respect of the failure to transfer the Property to Tyndall (“the Proceedings”).
Not admitted
(ii) On or around 5 June 2002. The Proceedings were settled by consent on the basis that Tyndall was entitled to a judgement for $750,000 against Clee being damages in respect of the value of the Property in lieu of specific performance for conveyance of the Property to Tyndall, plus costs as agreed or assessed.
Not admitted
(iii) On 17 June 2002, the judgement referred to in (ii) above was ordered and entered.
Not admitted
(iv) From 4 March 1998 to 17 June 2002, the plaintiff A.C.N 062 895 774 was the registered owner of the property.
Admitted
(v) From 4 March 1998 to 17 June 2002, Clee acted as a director and secretary of CDCS.
Admitted
(vi) From 4 March 1998 to 17 June 2002, CDCS held the property on Trust for Clee’s property/superannuation fund known as TJC Property Trust.
Admitted
(vii) From 4 March 1998 to 17 June 2002, CDCS had notice of the Proceedings and the settlement of the Proceedings.
Not admitted
(viii) From 4 March 1998 to 17 June 2002, Tyndall was lawfully in possession of the Property and further, Tyndall was in possession of the property with the consent of Clee and CDCS,
Admitted that the Cross-Claimant is in possession with the knowledge of the plaintiff. Otherwise denied.
(ix) At the present time, the judgement referred to in (ii) above has remained wholly unsatisfied.
Not admitted
(xi) until complete payment to Tyndall of the amount entitled to be paid to her under the judgement referred to in (ii) above in respect of the Property, Tyndall claims in lien in respect of her continued possession of the Property.”
Denied

9 It thus appears that of the ten propositions upon which the defendant grounds her alleged equitable lien, five are not admitted but are not expressly denied; three are expressly admitted; one is denied outright; and one is denied outright in part and admitted in part. It becomes, therefore, necessary to resolve the issues of fact that are raised by the denials and by the non-admissions of the plaintiff. It is convenient to do that by dealing seriatim with each of the seven relevant sub-paragraphs.

· Sub-paragraphs (i), (ii) and (iii)

10 There is collected behind Tab 4 in Exhibit D1 a series of pleadings in proceedings numbered 1594 of 1998, being proceedings brought in the Equity Division of this Court by Miss Tyndall, the present defendant, as plaintiff; against Mr. Terrence John Clee as defendant.

11 Behind Tab 6 in Exhibit D1 is a photocopy of consent orders disposing of those proceedings.

12 Behind Tab 5 in Exhibit D1 is a print-out of the Court’s computerised record of the progress of those proceedings.

13 The whole of the foregoing documentation is voluminous. It suffices for the moment to say that in my opinion the contents of the documentation establish with complete clarity each of the allegations advanced by the defendant in those three sub-paragraphs.

· Sub-paragraph (iv)

14 This sub-paragraph is admitted by the present plaintiff; but the contents of the sub-paragraph are in fact incorrect in that the entity which is referred to by the initials “CDCS” was in fact registered under the style: Commercial Debt Collection Services Pty Ltd; see page 1 of the ASIC print-out located behind Tab 7 in Exhibit D1.

· Sub-paragraph (vii)

15 The following matters are clearly established by the ASIC material: Tab 7, Exhibit D1:

(a) The present plaintiff company was originally registered on 20 December 1993 .
(b) It was so registered under the style: Commercial Debt Collection Services Pty Ltd.
(c) That corporate name was changed on 23 June 2000 and was so changed to the current corporate style of the plaintiff.
(d) Mr. Terrence Clee was both a director and the secretary of the plaintiff company between 20 December 1993 , the original date of registration, and 1 April 2003 .

16 I have earlier herein referred to the Notice to Admit Facts: Exhibit D2. I am satisfied that the Notice was duly served and that no dispute was notified in accordance with the relevant Supreme Court Rules. I proceed therefore upon the basis that the following matters, for the admission of which the Notice to Admit calls, are not now in issue:

“1. That Mr. Terence John Clee was the Managing Director of the Plaintiff company when Orders were made and subsequently entered on 17 June 2002 in respect of Supreme Court proceedings number 1594 of 1998 between Diane Margaret Tyndall as Plaintiff and Terence John Clee as defendant providing judgement for Diane Margaret Tyndall as Plaintiff in the sum of $750,000.
2. That Mr. Terence John Clee had the authority to act on behalf of the Plaintiff company at the time the Orders referred to in paragraph (1) were made and subsequently entered.
3. That Commercial Debt Collection Services Pty Limited (ACN) 062 895 774) changed its name to ACN 062 895 774 on 23 June 2000.
4. That Mr. Terence John Clee had the authority to act on behalf of Commercial Debt Collection Services Pty Limited ACN 062 895 774) when Mr. Terence John Clee and Diane Tyndall entered into a Deed dated 21 March 1996.”

17 The Court’s own records: tab 5, Exhibit D1, contain this note of events that took place on 4 June 2002 and 5 June 2002 before Windeyer J:

“04/06/02 ………It is agreed that on the pleadings on the Statement of Claim and Defence the pltf would be entitled to judgment for damages for breach of contract. It is accepted that the matters relied on in the Cross Claim, Namely S49 of the Property Relationships Act and S7 of the Contracts Review Act may bear on that. Note that it is also agreed that if the pltf’s contractual claim succeeds not effected by the matters raised by way of Cross Claim under S49 of the Property Relationships Act and S7 of the Contracts Review Act the pltf will be entitled to Judgment in the sum of $830,000 being the agreed value of the Killarney Heights House and $50,000 being the agreed value of the motor car the subject of the claim pleaded in paras 17 to 23 of the Statement of Claim. ORDER that the parties agree on the value of the assets and advise the Court of this figure tomorrow.
05/06/02 ………Settled FINAL DISPOSAL TEXT:AD142. By consent, judgment for the pltf for $750,000. Order the Cross Claim be dismissed. Order the deft/cross claimant to pay the pltf/cross deft’s costs of the proceedings. Exhibits to be returned. Matter Removed From Active Matters List FILE CLOSED.”

18 It was not submitted for the plaintiff that these notes were in any way inaccurate.

19 Central to the Equity proceedings was a co-habitation Deed made on 21 March 1996 between Mr. Clee and Miss Tyndall. It contains, among other recitals, the following:

“I. Terry is a director and shareholder in various companies including Dexplain Pty Limited and Commercial Debt Collections Services Pty Limited and controls those companies.
J. The companies own various real estate which has an estimated value of about $8.5 million subject to various mortgages amounting to about $4 million.
K. The company, Commercial Debt Collection Services Pty Limited, has purchased the property known as and situate at 4 Carlow Crescent, Killarney Heights (hereinafter referred to as “the home”).
L. The home was acquired at a cost of $455,000.00 approximately all of which moneys are secured on mortgage to the ANZ Bank Limited.
M. Terry has from his own separate funds paid approximately $200,000.00 for improvements, renovations and the parties presently propose further extensions to the home including the lounge room, gym/sauna, renovating the dining room and renovating the flooring to the downstairs area of the house and painting where necessary the upstairs and downstairs area of the house.
O. It is Terry’s intention to:
(a) To do all things necessary to pay out the mortgage on the home as soon as possible but in any event before November 1997.
(b) To have the home released from any mortgages for which it may be security in relation to any borrowings of his or any company in which he may be a director or shareholder.
(c) To effect the transfer of the home with renovations completed unencumbered to Diane within three months of the date of separation of Terry and Diane or on or before the 1st November 1997 which ever shall first occur.”

20 The pleadings which are collected behind Tab 4 of Exhibit D1 contain sworn allegations by Mr. Clee that he “advised (Miss Tyndall) that he would be unable to comply with (recital O quoted above) if CDCS Pty Ltd lost the Telstra contract”.

21 I am satisfied from the combined effect of the foregoing items in evidence that the defendant has established the proposition advanced in sub-paragraph (vii).

· Sub-paragraphs (viii), (ix) and (xi)

22 It is convenient to deal with these three sub-paragraphs as a group.

23 Sub-paragraph (ix) can be dealt with quite simply. In paragraph 20 of her affidavit of 15 April 2005 the present defendant deposes that she had not received, as at that date, any payment on account of the judgment debt created in her favour against Mr. Clee by the consent orders made on 5 June 2002 and entered on 17 June 2002. There is no suggestion that any such payment was made at any time after 15 April 2005; and the defendant’s affidavit evidence is unchallenged, let alone uncontradicted.

24 In those circumstances I am amply satisfied that the judgment debt remains wholly unpaid.

25 Sub-paragraphs (viii) and (xi), read together, raise this issue: is the defendant’s admitted continuing possession of the subject premises protected by an equitable lien maintainable by her a gainst the present plaintiff?

26 It is appropriate to open the discussion of that issue by putting in place some basic principles concerning the concept of an equitable lien. I take the principles from Sykes and Walker: The Law of Securities, 5th Edition at 199:

“The equitable lien arises purely from implication of law. …………………………………………………………………….. . The equitable lien, like the equitable charge, is a pure hypothecation; it involves no transfer of actual or potential ownership, it does not depend on possession and it rests only in equity, with the result that it is unenforceable against the bona fide purchaser for value without notice of the legal estate. Nevertheless, it is an ‘interest’ in land; it is of a proprietary character.”

27 The submissions of learned counsel for the present defendant rely heavily upon statements of, in particular, Gibbs CJ and Deane J in Hewett v Court (1983) 149 CLR 639. I have read those statements, and I do not see that they really bear upon the question here being considered. Sykes and Walker: op. cit. at 202, view the relevant statements as dicta, and I agree with that characterisation. The decision was, as well, greatly influenced by the view of all five of the participating Justices that the contract there in issue was one for work and labour, rather than one for the sale of goods.

28 It is true that the equitable lien now claimed by the defendant is founded upon a contractual engagement; but that engagement is not one for the sale or purchase of land, or for the sale of goods, or for the carrying out of work and labour. Neither does the relevant engagement fit into any of the other recognised categories of equitable lien which Sykes and Walker discuss in the section commencing on page 199 under the heading: “Circumstances in which Arising”; although, as the learned authors point out, - and I believe, as at present advised, correctly, - “the circumstances in which an equitable lien arises have never been exhaustively classified and the list is possibly not a closed one ……………..”.

29 The contractual engagement upon which the present claim of an equitable lien is made is on its face a personal engagement agreed in 1996 between the defendant and Mr. Clee and is a formal agreement having as its basic objective: “……… to promote harmony between themselves and to reduce the possibility of disputation ……” concerning “certain questions” said to “have arisen between the parties concerning their future welfare and property” since their execution some 18 months previously of an earlier co-habitation agreement.

30 That being so, it is important to bear steadily in mind for present purposes that the defendant is not asserting an equitable lien against Mr. Clee, but is asserting an equitable lien against the plaintiff company which was never a specific party to either the 1996 agreement or its earlier predecessor.

31 As previously explained, the plaintiff company neither called, nor tendered successfully, any evidence. In particular, it did not call Mr. Clee although he was actually in the precincts of the Court during part of the hearing. The defendant, too, did not call Mr. Clee, although learned counsel for her did at least consider doing so. It becomes necessary, therefore, to identify a number of fragments of evidence which are relevant to the issue now being considered; and then to consider what, if any, relevant conclusions can be drawn properly from the whole of that material.

32 Those items of evidence and conclusions can be summarised and analysed as follows:

(1) The subject premises are in the registered proprietorship of Commercial Debt Collection Services Pty Limited. Miss Tyndall so pleads in paragraph 3 of her statement of claim in the Equity proceedings and Mr. Clee, in his sworn defences, admits the allegation.

(2) The first page only of the relevant Contract of Sale is copied at Tab 1 of Exhibit D1. It shows a contract date of 30 April 1994 . The purchaser is identified as: “ Commercial Debt Collection Services Pty Limited as Trustee for T. J. C Property Trust (A.C.N 062 895 774)”. The stipulated purchase price is $455,000. Certain furnishings are stipulated as being included in the purchase. They are said to have been inspected by the purchaser. I take this to mean that they were inspected by Mr. Clee; by the present defendant with Mr. Clee’s knowledge and consent; or by both Mr. Clee and the present defendant.

(3) Mr. Clee’s own sworn cross-claim in the Equity proceedings pleads relevantly:

“10. On 9 June 1994 Commercial Debt Collection Services Pty Limited, acting in its capacity as trustee of the TJC Property Trust in which Commercial Debt Collection Services Superannuation Fund held units purchased 4 Carlow Crescent, Killarney Heights for $455,000.00:
(a) the whole of the purchase price was borrowed from ANZ Bank and Dexplain Pty Limited guaranteed the loan and paid the deposit of $45,500.00;
(b) the stamp duty and legal costs relating to the purchase in the sum of $35,000.00 was borrowed from Ralph Patterson.
11. Between June and November 1994 renovations were carried out to 4 Carlow Crescent, Killarney Heights in the sum of $200,000.00:
(a) the renovations included installation of a new kitchen, construction of a cabana, new decking, demolition of internal walls to enlarge bedrooms, installation of built-in wardrobes and other furniture, painting, recarpeting, installation of verandah doors, security grills on all existing doors and windows and installation of new light fittings;
(b) the renovations were paid by TJC Property Trust and Dexplain Pty Limited with funds provided as a consequence of the purchase of additional units in the TJC Property Trust by Commercial Debt Collection Services Superannuation Fund and funds borrowed by the TJC Property Trust from John Arakelian; ……….”.


(4) At the times material to items (2) and (3) above Mr. Clee was the Secretary of Commercial Debt Collection Services Pty Limited and was one of two directors of the company.

(5) It does not appear to be in dispute that following the purchase and renovation of the subject premises, Mr. Clee and the present defendant lived there together, rent free and to all practical intents and purposes as the owners of the property. The renovations are not alleged to have required, or to have received in fact, the prior, or any, consent of Commercial Debt Collection Services Pty Limited.

(6) This state of de facto cohabitation appears to have continued until Mr. Clee left the subject premises after his de facto relationship with the present defendant came to an end. The defendant pleads in her statement of claim in the Equity proceedings that the date of departure was 5 March 1998. Mr. Clee’s Defence and Amended Defence in those proceedings admit the relevant paragraph of the Statement of Claim, but go on to allege in a later part of each pleading that the date was March 1997. Having seen and heard the present defendant, and having no explanation from Mr. Clee of the dating discrepancy in his pleadings, I think that the probabilities favour 1998.

(7) At the times material to items (5) and (6) above, Mr. Clee was the Secretary of Commercial Debt Collection Services Pty Limited and was one of two directors of the company.

(8) I have quoted previously herein various of the recitals in the Deed of 21 March 1996. The substantive provisions of that Deed include:

“4. Terry shall do all things necessary to cause the mortgage secured on the home to be discharged no later than the 1st November 1997 or within three months of the date of separation of the parties which ever shall first occur and shall upon discharge, do all acts and things as for all documents hold all meetings necessary to cause the home to be transferred to Dianne unencumbered.
5. Terry shall do all things necessary in relation to any mortgage on the home to see that payments are made as and when they fall due and shall indemnify Dianne in relation thereto.
6. Terry shall in his capacity as director and/or trustee of the company which is the registered proprietor of the home not permit the registration of any further charge or encumbrance on the home or allow the amounts due in relation to any present charge or encumbrance to increase and shall indemnify Dianne in relation thereto.
7. Terry warrants to Dianne that the home has been purchased by Commercial Debt Collection Services Pty Ltd as trustee for his property/superannuation fund known as T.J.C. Property Trust.
8. Terry will not alter or remove the present trustee of his property/superannuation fund pending transfer of the home to Dianne and further warrants that he has the power and/or control to require the trustee to comply with the direction from Terry pursuant to this Deed to do all acts and things to transfer the said home to Dianne.
18. Terry shall not transfer, assign, part with possession of his shareholding in the companies namely Dexplain Pty Limited and Commercial Debt Collection Services Pty Ltd nor issue any further shares in the said companies without Dianne’s written consent.”

(9) I have quoted previously herein the matters which the present plaintiff has admitted pursuant to the Notice to Admit that is Exhibit D2. Of special present relevance is item 4 which I repeat for ease of reference:

“4. That Mr. Terence John Clee had the authority to act on behalf of Commercial Debt Collection Services Pty Limited (CAN 062 895 774) when Mr. Terence John Clee and Diane Tyndall entered into a Deed dated 21 March 1996.”

(10) I have quoted previously herein the terms of the Consent Orders made on 5 June 2002 and entered on 17 June 2002. Of special present relevance are items 1 and 2 in Exhibit D2 and those, also, I repeat for ease of reference:

“1. That Mr. Terence John Clee was the Managing Director of the Plaintiff company when Orders were made and subsequently entered on 17 June 2002 in respect of Supreme Court proceedings number 1594 of 1998 between Diane Margaret Tyndall as Plaintiff and Terence John Clee as defendant providing judgement for Diane Margaret Tyndall as Plaintiff in the sum of $750,000.
2. That Mr. Terence John Clee had the authority to act on behalf of the Plaintiff company at the time the Orders referred to in paragraph (1) were made and subsequently entered.”

(11) I have noted earlier herein some aspects of the Defence and Amended Defence pleaded by Mr. Clee in answer to the Statement of Claim in the Equity proceedings. The Defence was verified by him on 11 April 2002. The Amended Defence was verified by him on 26 April 2002. The Amended Defence pleads, among other amendments, a new paragraph 6 reading:

“Further and in addition to all of the above, the defendant says and it is the fact that:
(a) title to the subject property is held by Commercial Debt Collection Services Pty Limited as registered proprietor;
(b) Commercial Debt Collection Services Pty Limited holds title to the subject property as trustee of the TJC Property Trust;
(c) Commercial Debt Collection Services Pty Limited purchased the subject property on 9 June 1994, as trustee of the TJC Property Trust. The purchase was funded by way of cash held by Commercial Debt Collection Services Pty Limited as trustee of the TJC Property Trust and by way of funds borrowed from the ANZ Bank Limited and secured by mortgage against the subject property.
(d) Commercial Debt Collection Services Pty Limited was removed as trustee of the TJC Property Trust on or about 25 August 2000 and ACN 094 270 023 Pty Limited was appointed trustee of the TJC Property Trust on and from that date. ACN 094 270 023 Pty Limited was placed in liquidation and Mr. I. L. Struthers & Associates was appointed liquidator of that company on 15 June 2001;
(e) as an asset of the TJC Property Trust, the subject property, remains subject to the mortgage to ANZ Bank Limited and liable to meet the debts of the TJC Property Trust;
(f) in addition to the monies owed by Commercial Debt Collection Services Pty Limited under the mortgage to ANZ Bank Limited, the subject property if also security for debts owed by Dexplain Pty Limited, by virtue of a collateralization provision in the said mortgage;
(g) in the events which have occurred, the defendant does not have any right, power or authority to transfer the subject property to the plaintiff;
(h) the debts secured against the subject property exceed the value of the property by a considerable sum;
(i) following the loss of Telstra as a client of the defendant through Commercial Debt Collection Services Pty Limited in 1997, the defendant’s financial position has collapsed and the defendant does not have the means to meet or pay any of the demands made by the plaintiff;
(j) in the circumstances, the orders sought by the plaintiff are futile.”

(12) That new paragraph 6 raises at least two interesting and potentially very significant questions:

(i) How does it come about that so parlous a state of his financial affairs was not raised by Mr. Clee in his original Defence?
(ii) If what is described by paragraph 6 of the Amended Defence was true, as at 26 April 2002, upon what possible basis did Mr. Clee consent on 5 June 2002, to a judgment against him and in favour of the present defendant for $750,000 plus costs?

In the absence of evidence from Mr. Clee, it is, of course, impossible to answer, except intuitively, either question. In her affidavit of 15 April 2005 the present defendant deposes:

“18. Up until the time of the hearing and the entering of the judgment, I was still residing in the Killarney Heights house. Mr. Clee still appeared to be in control of the company, the plaintiff in these proceedings, who was the registered owner of the said house. I had always understood and agreed that I would surrender possession of that property when Mr. Clee or some other entity satisfied the judgment of $750,000 being the agreed value of the Killarney Heights house.”
This evidence was not tested at all in cross-examination. I see no reason not to accept it; and I do accept it. It seems to me that Mr. Clee’s actions in settling the Equity proceedings tend to strengthen the probative value of what is deposed in paragraph 18.

(13) Mr. Clee’s pleadings in the Equity proceedings contain a great deal of verified material as to his business and financial affairs at various material times. It paints a picture that is not unfamiliar in contemporary Courts: that is to say, a picture of a hard-nosed business entrepreneur operating a somewhat tangled skein of commercial companies and Trusts of various kinds in a constant process of commercial, and no doubt hopefully tax effective, wheeling and dealing an incident of which is an apparent assumption by the entrepreneur that no legal niceties about the corporate veil need impede his use of his companies and Trusts as though they were his absolute private property.

33 In deciding how to bring fairly into balance all of the matters thus described, I have kept in mind those principles concerning actual, implied and ostensible authority, that are succinctly summarised in Gower and Davies’ Principles of Modern Company Law, 7th Edition, at 129, including the foot-notes 1 and 2 on that page. I need not now quote in detail.

34 I am satisfied on the probabilities that at all material times Mr. Clee stood in relation to the present plaintiff in a position similar to that of Mr. Lennard in relation to his company, as described in the speech of Viscount Haldane in Lennards Carrying Company Limited v Asiatic Petroleum Company Limited (1915) AC 705 at 713:

“My Lords, a corporation is an abstraction. It has no mind of its own anymore than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation. That person may be under the direction of the shareholders in general meetings; that person may be the board of directors itself, or it may be, and in some companies it is so, that the person has an authority co-ordinate with the board of directors given to him under the Articles of Association, and is appointed by the general meeting of the company, and can only be removed by the general meeting of the company. My Lords, whatever is not known about Mr. Lennard’s position, this is known for certain, Mr. Lennard took the active part in the management of his ship on behalf of the owners, and Mr. Lennard, as I have said, was registered as the person designated for this purpose in the ship’s register. Mr. Lennard therefore was the natural person to come on behalf of the owners and give full evidence not only about the events of which I have spoken, and which related to the sea-worthiness of the ship, but about his own position and as to whether or not he was the life and soul of the company. For if Mr. Lennard was the directing mind of the company, then his action must, unless a corporation is not liable at all, have been an action which was the action of the company itself within the meaning of s.502.”
[Note: the reference to s.502 is a reference to that section of the Merchant Shipping Act 1894 by which it was provided that the owner of a British sea-going ship should not be liable to make good to any extent whatever any loss or damage happening without his actual fault or privity where any goods or merchandise taken in or put on board his ship were lost or damaged by reason of fire on board the ship.]

35 In that connection I observe that if the true relationship between Mr. Clee and the plaintiff had been otherwise than I have thus found, then there must have been some documentation of some kind, - company minutes or memoranda; records of the relevant estate agent; perhaps something in the Memorandum and Articles of the plaintiff company or in the files of the plaintiff’s solicitors either past or present, - that would have pointed persuasively in that contrary direction. But there is nothing; and in that absence the finding which I have made is essentially uncontradicted.

36 Do all of the foregoing findings bring the present defendant’s claim within the principles noted in paragraph 26 hereof? I am of the opinion that they do. It is, no doubt, no longer apposite to equate, as an old saying once did, the reach of equity with the length of the Lord Chancellor’s foot; but equity is still founded upon what a reasonable mind would think conscionable in the particular case. That the plaintiff in the present proceedings should now be allowed to distance itself, wrapped, so to speak, in a cloak of convenient technicality, from the actions of the man who was, and clearly so in my view on the whole of the available evidence, “the directing mind of the company” at the various material times, would be in my opinion both distinctly unconscionable and contrary to proper principle.

37 In my opinion the defendant is entitled to the declarations sought in the first and second prayers for relief in the cross-claim.

38 I have considered whether I should do no more than to indicate an intention to make those declarations, and then direct the parties to bring in short minutes of final orders. I have come to the conclusion that it is preferable to make without further ado those declarations, the entitlement to which has been, in my opinion, convincingly established; to dismiss the plaintiff’s claim for possession because that claim, as it stands, cannot succeed in the light of the proposed declarations; and to make appropriate costs orders. Such an approach avoids further disputation about technical refinements in the matter of final orders; and clears the way for appellate proceedings should the plaintiff wish to take that step.

39 On 7 December last I made the following orders:

“Order that upon the defendant giving by her counsel the usual undertaking as to damages the plaintiff be restrained until further order from dealing with the subject property at 4 Carlow Avenue, Killarney Heights in any way that affects adversely or might affect adversely the current occupation of those premises by the defendant. Liberty to the parties to apply.”


I propose to leave those orders in place for the time being. My purpose is to stop any further tactical manoeuvring until either the defendant is paid the judgment to which this Court has said that she is entitled; or it is held on appeal that she does not have the rights that I have declared her to have.

Orders

[1] Declare that the cross-claimant, Dyane Tyndall, has a valid lien over the property being Lot 42 in Deposited Plan 215008 known as 4 Carlow Crescent, Killarney Heights, NSW in respect of a debt owed to her in connection with that property as represented by the judgment of this Court in her favour in proceedings numbered 1594 of 1998.

[2] Declare that the cross-claimant, Diane Tyndall, is entitled to continue in possession of the aforesaid property until the debt, the subject of the lien referred to in Order 1 above, has been satisfied.

[3] Order that the plaintiff’s claim for possession of the said property be dismissed.

[4] Order that the plaintiff pay the costs of the defendant in the original claim and that the cross-defendant pay the cross-claimant’s costs of the cross-claim.

[5] Order that the exhibits be returned.

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