Armitage v Gainsborough Properties Pty Ltd
[2011] VSC 419
•31 August 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 01930 of 2010
| CHRISTOPHER JAMES ARMITAGE | Plaintiff |
| v | |
| GAINSBOROUGH PROPERTIES PROPRIETARY LIMITED | Defendant |
| and | |
| WILLIAM BERNARD ABEYRATNE | Second Defendant |
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JUDGE: | ALMOND J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 25 March 2011 | |
DATE OF JUDGMENT: | 31 August 2011 | |
CASE MAY BE CITED AS: | Armitage v Gainsborough Properties Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 419 | |
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PRACTICE AND PROCEDURE – Liquidators – Whether leave of the court is required to bring claim against liquidator – Whether the plaintiff has adduced sufficient evidence of a right to sue in conversion or negligence to warrant a grant of leave – Whether leave should be granted when proceedings have been brought after a delay.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr W F Gillies | Gray Friend & Long |
| For the First Defendant | Mr G D Bloch | Kraus & Associates |
| For the Second Defendant | Mr J P Slattery | Wotton & Kearney |
HIS HONOUR:
In this proceeding the plaintiff claims that he is the owner of assets including a conveyorised autophoretic deposition plant and a Komatsu forklift truck and that during April 2004 the second defendant (or his servants or agents) removed or permitted these items to be removed from premises without the authority of the plaintiff. As a result, the plaintiff claims that the second defendant is liable to the plaintiff in conversion or negligence.
At the time of the alleged conduct the second defendant was a court appointed liquidator. The second defendant claims that he arranged for the items to be sold in the course of performing his duties as official liquidator of Chairmakers Pty Ltd (“Chairmakers”) and Colorclad Pty Ltd (“Colorclad”).
The liquidations of Chairmakers and Colorclad were completed in late 2007. Chairmakers was dissolved on 7 January 2008. Colorclad was dissolved on 27 January 2008.[1]
[1]Affidavit of William Bernard Abeyratne sworn 1 July 2010 [20].
The plaintiff commenced the proceeding against the second defendant on 14 April 2010. On 1 June 2010, the solicitors for the second defendant wrote to the plaintiff’s solicitors stating that the proceedings should be dismissed on the basis that leave of the Court was required to bring proceedings against the second defendant in respect of his conduct as a court appointed liquidator and that no leave had been sought before the proceedings had been commenced.[2]
[2]Affidavit of William Bernard Abeyratne sworn 1 July 2010 and Exhibit WBA13 thereto.
By summons filed 21 September 2010 the plaintiff made application for leave to commence the proceeding against the second defendant in his capacity as a liquidator.[3] On 15 November 2010 her Honour Zammit AsJ dismissed the plaintiff’s application and the plaintiff appeals from that decision under Rule 77.06 of the Supreme Court (General Civil Procedure) Rules 2005.
[3]The solicitors for the second defendant filed a summons dated 1 July 2010 seeking summary dismissal or a permanent stay of the proceeding against the second defendant insofar as it related to the items. This application was overtaken by the subsequent application by the plaintiff by summons filed on 21 September 2010 for leave to commence the proceeding nunc pro tunc. By agreement between the parties the appeal was conducted solely with reference to the autophoretic plant and the forklift truck.
The following issues arise for determination in this appeal:
· Is leave required to sue a court appointed liquidator? If so,
· Has the plaintiff adduced sufficient evidence of ownership of the items, at the relevant time, to warrant the grant of leave?
· Has the plaintiff adduced sufficient evidence of possession, or entitlement to possession, of the items, at the relevant time, to warrant the grant of leave?
· Has the plaintiff adduced sufficient evidence of the assignment of any right to sue the second defendant in conversion or negligence?
· Is delay a relevant consideration in this case?
Before dealing with these issues, it is convenient to summarise the evidence in relation to the autophoretic plant, the evidence in relation to the forklift truck and the applicable legal principles.
The plaintiff’s evidence in relation to the autophoretic plant[4]
[4]The summary is derived from affidavits from Christopher James Armitage (“Armitage”) sworn on 18 August 2010, 10 September 2010 and 18 October 2010 respectively.
In or about 1993, the autophoretic plant was manufactured and commissioned by Furnace Engineering Pty Ltd for Austpac Coatings Pty Ltd. In about May 1998 ownership was transferred to a company called Avin Operations Pty Ltd (“Avin”) which entered into a financing agreement with Textron Financial Corporation (Australia) Pty Ltd (“Textron”).[5]
[5]Affidavit of Christopher James Armitage sworn 18 August 2010 [5].
In May 1998 the plaintiff and his father personally guaranteed repayment to Textron of the balance of the loan owing to Textron of approximately $82,000. The loan was secured over the autophoretic plant.[6]
[6]Supplementary Affidavit of Christopher James Armitage sworn 18 October 2010 [3].
On about 22 July 1999 Textron attempted to repossess the autophoretic plant claiming that the balance then owing under the loan was $27,582.01.[7]
[7]Textron had by then changed its name to Associates Commercial Corporation (Australia) Pty Ltd (“ACC”).
In October 1999 external controllers were appointed to Avin. The external controllers decided not to adopt the financing agreement and abandoned any claim by Avin to any interest in the autophoretic plant.
In early 2000 the plaintiff and his father paid GE Commercial Corporation (Australia) Pty Ltd (“GE”) (formerly Textron) the sum of $27,000 or thereabouts. Upon making the payment, the plaintiff asserts that he and his father became the owners of the autophoretic plant.
The autophoretic plant was moved from Dandenong to Hallam in the period December 2001 to January 2002. In 2003 it was moved to premises leased by Glenbarry Pty Ltd (“Glenbarry”) at Barry Road, Campbellfield. The plaintiff states that he paid for the removal and storage costs on each occasion.[8] The plaintiff further states that he had the right to store plant and equipment at the premises leased by Glenbarry and that he had unrestricted access to the premises where the autophoretic plant was stored.
[8]Affidavit of Christopher James Armitage sworn 18 October 2011 [8] and [9].
By this time GE had sued the plaintiff and his father as guarantors of the loan. A default judgment in favour of GE for $200,000 was set aside in 2004, and the matter proceeded to trial. The proceeding was settled in December 2006.
Settlement of the litigation was formalised by deed dated 19 December 2006, by which GE discontinued the proceeding with a denial of liability and assigned to the plaintiff and to Barry Murdoch Armitage (the plaintiff’s father) the whole of any right, title or interest of GE in the autophoretic plant.[9]
[9]Supplementary Affidavit of Christopher James Armitage sworn 18 October 2010 [4]. Presumably the autophoretic plant comprised ‘the goods’ referred to in the Statement of Claim. The Statement of Claim is not in evidence in this application.
The plaintiff deposes that he sought the assignment by deed from GE,[10] in order to avoid any doubt as to his ownership of the autophoretic plant.[11]
[10]Affidavit of Christopher James Armitage sworn 18 October 2010 and Exhibit CJA3 thereto.
[11]Supplementary Affidavit of Christopher James Armitage sworn 18 October 2010 [11].
Subsequently, by deed dated 26 March 2010, Barry Murdoch Armitage assigned to the plaintiff the whole of any right, title or interest he had in the autophoretic plant.
The second defendant’s evidence in relation to the autophoretic plant
The second defendant was appointed official liquidator of Chairmakers and Colorclad on 7 April 2004.[12] On 22 April 2004, he received from Lockwood and Company Pty Ltd (“Lockwood”), a valuation of certain assets of Colorclad which included the autophoretic plant.[13] Lockwood specialised in the valuation and auctioning of commercial and industrial assets.
[12]Affidavit of William Bernard Abeyratne sworn 1 July 2010 and Exhibits WBA3 and WBA4 thereto.
[13]Affidavit of William Bernard Abeyratne sworn 1 July 2010 [12] and [14]; Affidavit of William Bernard Abeyratne sworn 15 September 2010 [19].
On about 23 April 2004, the second defendant instructed Lockwood to carry out public auctions of the assets of Chairmakers and Colorclad including the autophoretic plant.
On the second defendant’s instructions, Lockwood sold the autophoretic plant for scrap on about 27 April 2004 before auction, because he was informed it had no other commercial value. As a result the autophoretic plant was not offered for sale at public auction.[14]
[14]Affidavit of William Bernard Abeyratne sworn 1 July 2010 [14] and Exhibit WBA7 thereto.
On about 30 April 2004, the second defendant received a facsimile from solicitors acting on behalf of Glenbarry and Coating Technologies Pty Ltd (“Coating Technologies”) which claimed to own the bulk of the goods advertised for auction.[15]
[15]Affidavit of William Bernard Abeyratne sworn 1 July 2010 and Exhibit WBA8 thereto.
On 3 May 2004, the second defendant was served with an affidavit of Mr Tony Dunlap in support of an application for an injunction by Glenbarry and Coating Technologies seeking to prevent the auction and sale of certain of the items proposed to be sold. In the affidavit, Mr Dunlap claimed that the autophoretic plant was owned by Glenbarry.[16] The application for an injunction was dismissed by the Chief Justice on 3 May 2004.[17]
[16]Affidavit of William Bernard Abeyratne sworn 1 July 2010 and Exhibit WBA9 thereto; Affidavit of William Bernard Abeyratne sworn 15 September 2010 and the Affidavit of Tony Dunlap sworn 3 May 2004 being Exhibit WBA20 thereto.
[17]Affidavit of William Bernard Abeyratne sworn 1 July 2010 and Reasons for the Ruling of Warren CJ dated 3 May 2004 being Exhibit WBA11 thereto.
In a further affidavit of the second defendant dated 15 September 2010, Mr Abeyratne deposes that the only objection he received to the sale of the autophoretic plant was in the form of the application for an injunction by Glenbarry and Coating Technologies. The underlying proceeding was ultimately dismissed with costs by reason of the failure of Glenbarry and Coating Technologies to provide discovery.[18]
[18]Affidavit of William Bernard Abeyratne sworn 15 September 2010 and Exhibit WBA21 thereto.
The second defendant deposes that at no time prior to the commencement of this proceeding did he receive any claim from the plaintiff asserting ownership of the autophoretic plant.[19]
[19]Affidavit of William Bernard Abeyratne sworn 15 September 2010 [17].
The plaintiff’s evidence in relation to the forklift truck
On about 15 April 2004, a list of assets of Chairmakers was compiled and sent to Lockwood. The list included a 1996 Komatsu forklift truck. On the second defendant’s instructions the forklift truck was taken to the premises of Lockwood. It was sold by public auction on 6 May 2004.[20]
[20]Affidavit of William Bernard Abeyratne sworn 1 July 2010 [11], [13], and [19] and Exhibit WBA12 thereto.
The plaintiff deposes that the forklift truck was owned by Mr William Martin Miller who bought it from Chairmakers for its full value. He exhibits a letter of confirmation to this effect from Chairmakers to Mr Miller dated 16 September 2002.[21]
[21]Affidavit of Christopher James Armitage sworn 18 August 2010 [13] and Exhibit CJA5 thereto.
Further, the plaintiff deposes that he is the sole owner of the forklift truck and that his acquisition from Mr Miller was confirmed by a deed of assignment.[22] By the deed dated 24 March 2010, Mr Miller “confirms assignment [of]… all right title and interest” in the forklift truck to the plaintiff and agrees to execute documents “to better give effect to the assignment hereby effected”.
[22]Affidavit of Christopher James Armitage sworn 18 August 2010 [12] and [14] and Exhibit CJA6 thereto.
The second defendant’s evidence in relation to the forklift truck
The second defendant disputes that the plaintiff is or was the owner of the forklift truck at the time it was sold. In support of this, the second defendant exhibits a copy of an agreement made between Chairmakers and Chairtech dated 2 July 2001, which shows that the forklift truck was acquired by Chairmakers.[23]
[23]Affidavit of William Bernard Abeyratne sworn 15 September 2010 and the Chairmakers Pty Ltd Agreement for Sale and Purchase of Assets Schedule 6 in Exhibit WBA17 thereto.
The second defendant deposes that he was aware that Mr Miller asserted ownership of the forklift truck. At the time the second defendant determined that the available information did not support Mr Miller’s claim. The second defendant rejected the claim and communicated this to Mr Miller in June 2004 and did not hear anything further from Mr Miller.[24]
[24]Affidavit of William Bernard Abeyratne sworn 15 September 2010 and the letter sent to Mr Miller dated 23 June 2004 in Exhibit WBA22 thereto.
Applicable principles – a right to sue in conversion
In an action for conversion a plaintiff must prove that the plaintiff has possession or a right to immediate possession at the time of the act of conversion.[25] It is not necessary for the plaintiff to prove ownership of the relevant items, however if the plaintiff was not in possession at the time of the conversion, the plaintiff must be able to prove good title in order to maintain the action.[26]
[25]The Winkfield [1900–3] All ER 346.
[26]Robinson v Midland Bank (1925) 41 TLR 402.
In Penfold Wines Pty Ltd v Elliot,[27] Dixon J described the essence of conversion as follows:
The essence of conversion is a dealing with a chattel in a manner repugnant to the immediate right to possession of the person who has the property or special property in that chattel.
[27](1946) 74 CLR 204, 226.
In Russell v Wilson,[28] Isaacs and Rich JJ characterised possession in this context in the following terms:
Possession, in the relevant sense, is not merely evidence of absolute title: it confers a title of its own, which is sometimes called “possessory title”. This possessory title is as good as the absolute title as against, it is usually said, every person except the absolute owner.
[28](1923) 33 CLR 538, 546.
I will now address the issues which arise for determination in this appeal.
Is leave required to sue a court appointed liquidator?
There is persuasive authority to the effect that a prospective litigant must obtain leave to sue a court appointed liquidator.[29]
[29]Re Siromath Pty Ltd (1991) 9 ACLC 1580; Re Siromath Pty Ltd [No 3] (1991) 25 NSWLR 25; Bolton v Nathan Nominees Pty Ltd (1992) 10 ACLC 1102; Re Biposo Pty Ltd; Condon v Rodgers (Unreported, Supreme Court of New South Wales, Young J, 2 August 1995); Sydlow Pty Ltd (in liq)v T G Kotselas Pty Ltd & Ors (1996) 65 FCR 234; Mamone v Pantzer (2001) 36 ACSR 743; Searle v Kearns [2001] NSWSC 679; McDonald v Dare [2001] QSC 405; Sullivan v Energy Services International Pty Ltd (in liq) (2002) 43 ACSR 179; Baxter v Hamilton [2005] TASSC 64; Merhi v Green [2007] NSWSC 722.
The rationale for this requirement lies in the fact that the Court will protect its officers from ‘spurious’ litigation and the integrity of the winding up process.[30]
[30]Mamone v Pantzer (2001) 36 ACSR 743, 747 [9].
In Sydlow Pty Ltd (in liq) v T G Kotselas Pty Ltd & Ors,[31] Tamberlin J characterised the principles as follows:
The court, when administering the Law, is concerned to ensure that the winding‑up is implemented in a timely and efficient manner, so as to produce optimum results for all persons interested in the winding-up. In order to achieve this result, the court must protect the integrity of the winding‑up under its supervision and control, by taking appropriate steps to prevent any proceedings or conduct which will wrongfully impede that process. One way in which this can be carried out is to require the grant of leave by the court in respect of an action against an official liquidator, so that the court can satisfy itself that there is no wrongful interference with the process. Such interference may arise where, for example, proceedings are initiated or continued without any legal basis or prospect of success or for an improper or collateral purpose. This appears to be the principle which underlies the established requirement that leave is necessary in order to sanction proceedings against an official liquidator.
[31](1996) 144 ALR 159 (“Sydlow”).
In Re Biposo Pty Ltd; Condon v Rodgers, Young J (as he then was) stated that the court will not enable proceedings to be commenced against a liquidator personally unless it is satisfied that there is a prima facie case:[32]
The court will be very jealous of its delegate exercising the powers that it is given. The court will take every precaution to make sure that those powers are used impartially and for a proper purpose. The corollary of this is that the court will not permit its officers to be sued by a creditor or have an inquiry made under s 536 unless it is satisfied that there is a prima facie case.
[32](Unreported, Supreme Court of New South Wales, Young J, 2 August 1995) 8-9, cited with approval in Vink v Tuckwell (2008) VSC 100, 19 [74].
In Sydlow, Tamberlin J suggested that there was no specific threshold appropriate in all cases:[33]
The discretionary power of the court to grant leave must be exercised having regard to all the circumstances of the particular cases and bearing in mind the need to protect the integrity of its process. It does not necessarily follow that, in order to obtain leave, a prima facie case must be demonstrated. There is no specific threshold appropriate in all cases, however there must be more than mere assertion. The court’s discretion may be exercised on many grounds including, but not limited to, the sufficiency of the evidence adduced as to the prospect of success of the action on the application for leave.
[33](1996) 144 ALR 159, 166 (emphasis added).
In Mamone v Pantzer, Santow J adopted the approach stated by Tamberlin J in Sydlow and identified delay in commencing the proceeding as a powerful factor relevant in assessing whether leave should be granted to commence proceedings against a court appointed liquidator:[34]
A powerful factor operating in the present circumstances is apparent from the earlier agreed facts. It is that the liquidator, having acted as he did in relation to the lease, completed his liquidation tasks with not a word of complaint from the plaintiffs.
…
Quite apart from any argument based upon waiver, litigation brought in such circumstances has all the hallmarks of the spurious. That the litigation does not interfere with the particular current winding up does not detract from its capacity to do so in a broader sense. If leave were to be given following completion of the liquidation and for litigation so weakly grounded no future liquidator could have any sense of safety in carrying the onerous tasks imposed. No liquidator could feel safe that there would not be some belated action brought at the very time when the liquidator has no longer the wherewithal to be indemnified from the company’s assets.
[34]Mamone v Pantzer (2001) 36 ACSR 743, 746-747 (emphasis added).
Despite the plaintiff making application for leave by summons, counsel for the plaintiff argued that leave to proceed against the second defendant was not required because at the relevant time the second defendant was not acting in his capacity as an official liquidator.
I reject this argument. In the second defendant’s affidavit of 15 September 2010, the second defendant, with the aid of photographs exhibited to the plaintiff’s affidavit, identifies the autophoretic plant as an asset listed in the Lockwood valuation of assets to be sold in the Colorclad liquidation.[35] Similarly, he identifies the forklift truck as one of many items sold in the course of disposal of assets of Chairmakers.[36] The second defendant was appointed official liquidator of both Chairmakers and Colorclad for the purposes of the court ordered winding up of those companies. Counsel for the plaintiff asserted that if the liquidator sold property which was not property of the company he cannot be said to have been acting in the course of his duties as official liquidator. No authority was cited in support of this proposition.
[35]Affidavit of William Bernard Abeyratne sworn 15 September 2010 [19].
[36]Affidavit of William Bernard Abeyratne sworn 1 July 2010 [19] and Exhibit WBA12 thereto.
I am satisfied from the contemporaneous documents that the prima facie position is that Mr Abeyratne was acting in the course of carrying out his duties as official liquidator at the relevant time. Accordingly, leave to commence the proceeding is required.
Has the plaintiff adduced sufficient evidence of ownership of the items at the relevant time to warrant the grant of leave?
In his affidavits the plaintiff makes numerous assertions in relation to the ownership of the autophoretic plant. He asserts that ownership of the autophoretic plant was transferred to Avin but provides no evidence to support the transfer of ownership. He asserts that Avin entered into a finance agreement with Textron in about 1998 but provides no evidence of the finance agreement. He does not elaborate on the terms of the ‘finance agreement’ so it is not possible for the Court to determine whether, at the relevant time, Avin was the owner or the lessor of the goods under the finance agreement.
He asserts that he and his father provided a personal guarantee but does not provide a copy of the guarantee.
In his supplementary affidavit sworn on 18 October 2010, the plaintiff states:
In October 1999 my father and I were informed by the administrator appointed to administer a Deed of Company Arrangement of the previous owner of the Autophoretic Plant Avin Operations Pty Ltd (called “Avin”) that she had decided to abandon any claim of ownership or entitlement to the Autophoretic Plant by Avin and that she would not admit any claim by GE Commercial Corporation (Australia) Pty Ltd (called “GE”) which had become the successor of ACC or its predecessors for repayment of any part of the loan which my father and I had personally guaranteed. She told us that it was up to us as guarantors to deal directly with GE. We did this and paid the sum of $27,000 or thereabouts (called “the payment”) to GE early in 2000. Upon making the payment my father and I became the owners of the Autophoretic Plant. He gave his interest in the Autophoretic Plant to me at that time.[37]
[37]Supplementary affidavit of Christopher James Armitage sworn 18 October 2010 [4].
In this passage, the plaintiff attributes certain statements and actions to an administrator of Avin. He does not identify the administrator and does not provide any substantiation of the statement or conduct. He refers to dealings with GE in early 2000, including payments allegedly made to GE, without substantiation of these payments.
The plaintiff further asserts that upon making the payment he and his father became the owners of the autophoretic plant without any documents to substantiate the transfer of ownership at that time.
In my view the plaintiff failed to adduce sufficient evidence to establish ownership of the autophoretic plant as at the date of the alleged conversion or the alleged negligence in April 2004. The plaintiff’s statements amount to unsubstantiated assertions which, on their face, are inconsistent with the only documentary evidence as to ownership before the Court.
That documentary evidence does establish on a prima facie basis that the plaintiff acquired, as co-owner with his father, GE’s rights in ‘the goods’ by assignment of those rights by deed made on 19 December 2006. The plaintiff’s father’s rights as co-owner of the goods were then assigned to the plaintiff by deed made on 26 March 2010. The plaintiff’s ownership appears to post-date the events in question which occurred in April 2004. Counsel for the plaintiff submitted that his client took a ‘belt and braces’ approach by obtaining the deed of assignment from GE in order to avoid any doubt about ownership. However there is no recital, clause in the deed or evidence other than assertion to suggest that (a) the assignment came into existence only for the avoidance of doubt or (b) that the plaintiff and his father became or claim to have become co-owners of the autophoretic plant several years earlier.
Similarly in my view the plaintiff failed to adduce sufficient evidence to establish ownership of the forklift truck as at the date of the alleged conversion or the alleged negligence in April 2004. In his evidence, the plaintiff states that the acquisition of the forklift truck was ‘confirmed’ by the deed of assignment dated 24 March 2010. There is no evidence that the acquisition which was being ‘confirmed’ occurred earlier than 24 March 2010. Indeed there is evidence to the contrary. The plaintiff exhibits a transcript of an alleged conversation between the plaintiff and servants and agents of the second defendant which took place on 8 April 2004.[38] During the conversation the plaintiff initially said the forklift truck was his property, but when pressed further said:
It’s ACA Holdings that owns it… [t]hey paid $200,000 and part of what they bought was this.
[38]Affidavit of Christopher James Armitage sworn 10 September 2010 and Exhibit CJA12 thereto.
Further, by letter dated 20 April 2004, Mr Miller requested and authorised a Mr David Wall to take control and possession of the forklift truck asserting an entitlement based on an alleged agreement with Chairmakers dated 16 September 2002.[39]
[39]Affidavit of Jane Elizabeth Bochenek sworn 20 October 2010 and Exhibit JEB1 thereto.
The documentary evidence does establish on a prima facie basis that the plaintiff acquired his interest in the forklift truck by the deed of assignment made on 20 March 2010. The plaintiff’s ownership therefore appears to post-date the events in question which occurred in April 2004.
Has the plaintiff adduced sufficient evidence of possession, or entitlement to immediate possession, of the relevant items to warrant the grant of leave?
The plaintiff asserts that he was in possession or entitled to immediate possession of the autophoretic plant and the forklift truck. These items were on the premises of a third party, located at Unit 2, 196-202 Barry Road, Campbellfield (“the premises”). Glenbarry leased the premises from the first defendant Gainsborough Pty Ltd. Glenbarry sub-let part of the premises to Chairmakers.[40]
[40]Affidavit of Christopher James Armitage sworn 18 August 2010 [16] and [17].
In a supplementary affidavit sworn 18 October 2010, the plaintiff states:
I had the right, granted by Glenbarry Pty Ltd (the Lessee of the premises) to store plant and equipment there. I had keys and security access to the premises. In short, I had the right to unrestricted access to the premises where property which I owned including the Autophoretic Plant was stored.[41]
[41]Supplementary affidavit of Christopher James Armitage sworn 18 October 2010 [10].
For the purposes of the argument, I accept that the autophoretic plant was stored at the premises leased to Glenbarry. It is unclear whether it was stored in the part of the premises occupied by Glenbarry or the part of the premises sub-let to Chairmakers. However, the evidence suggests that the autophoretic plant was in the possession of Glenbarry or Chairmakers.
The fact that the plaintiff had keys to premises leased to Glenbarry and unrestricted access to those premises indicates that the plaintiff had a licence to enter the premises but does not therefore mean that he was entitled to immediate possession of items stored there. This would depend on the terms upon which the items were stored at the premises.[42]
[42]Bolwell Fibreglass Pty Ltd v Foley [1984] VR 97, 99; Bis Cleanaway (Trading As Chep) v Tatale; Brambles (Trading As Chep) v Tatale [2007] NSWSC 378, 9 [40].
There is no evidence before the Court as to the terms on which the items were stored at the premises. Nor is there any evidence from Glenbarry to corroborate the plaintiff’s assertion that he was entitled to immediate possession at the relevant time.
In my opinion, the plaintiff has not adduced sufficient evidence of possession or an entitlement to immediate possession of the autophoretic plant or the forklift truck at the time of the alleged negligence or conversion by the second defendant in 2004.
Has the plaintiff adduced sufficient evidence of the assignment of any right to sue the second defendant in conversion or negligence?
Similarly, the plaintiff has not adduced sufficient evidence of the assignment of any right to sue the second defendant in conversion or negligence.
The assignment of rights in the deed between the plaintiff and GE made on 19 December 2006 is limited to any right, title or interest of GE in ’the goods’.[43] It does not purport to include an assignment of any right GE may have had to sue the second defendant in tort.[44] It follows that the plaintiff did not obtain an assignment of any chose in action from GE in conversion or negligence.[45]
[43]The plaintiff’s appeal proceeded on the basis that reference to the ‘goods’ was a reference to the autophoretic plant, although strictly there was no evidence placed before the Court of this. The deed of assignment incorporates reference to ‘the goods referred to in the Statement of Claim delivered with the Writ’. However the Statement of Claim is not attached to the exhibited deed.
[44]Cf Trendtex Trading Corporation v Credit Suisse [1982] AC 679, 699; Beatty v Brashs Pty Ltd [1998] 2 VR 201, 203.
[45]See, for example, Taypar Pty Ltd v Santic (1989) 21 FCR 485, 491.
The same may be said about rights to sue in relation to the forklift truck. The evidence establishes, on a prima facie basis, that Mr Miller’s rights in the forklift truck were assigned to the plaintiff by deed made on 24 March 2010. The plaintiff’s acquisition of rights in the forklift truck therefore post-dates the events in question which occurred in 2004. The assignment does not purport to include assignment of any chose in action Mr Miller may have had in conversion or negligence.
Is delay a relevant consideration in this case?
There has been a lengthy delay by the plaintiff in prosecuting his claim. The relevant events occurred in April 2004 and the plaintiff did not issue legal proceedings until almost six years later, two days prior to the expiration of the relevant limitation period. In the meantime, the Chairmakers and Colorclad liquidations were completed and the relevant entities had been dissolved.
No reason has been advanced to explain the delay. I consider that the delay in this case is relevant to assessing whether leave should be granted to commence proceedings. It is significant that the liquidation of the two entities has been finalised. As Santow J said in Mamone v Pantzer, ‘no liquidator could feel safe that there would not be some belated action brought at the very time when the liquidator has no longer the wherewithal to be indemnified from the company’s assets’.[46] Accepting that the facts of each case will differ, in my opinion the observation is apposite here.
[46](2001) 36 ACSR 743, 747 [9].
There is an additional complication in this case and that is that Mr Abeyratne passed away on 13 November 2010.[47] If leave is granted Mr Abeyratne’s estate would be required to defend proceedings about events which occurred in 2004. Some evidence would be able to be adduced from servants or agents of the second defendant, but nevertheless the estate would, in my opinion, be at a significant disadvantage in defending the proceeding especially as the plaintiff disputes much of the affidavit evidence of the second defendant and where the conduct of the second defendant is in issue.
[47]Affidavit of Jane Elizabeth Bochenek sworn 23 March 2011 [20].
Conclusion
It is for the plaintiff applicant to satisfy the Court that leave should be granted. The plaintiff has not made out a prima facie case nor has sufficient evidence been adduced to show that the claims relating to the items in dispute have realistic prospects of success. The plaintiff has relied on unsubstantiated assertions which fall below the threshold necessary for the grant of leave. In the exercise of my discretion, I refuse leave to the plaintiff to commence proceedings against the second defendant.
In the circumstances, the appeal is dismissed.
I shall hear counsel on the question of costs and as to the appropriate disposition of the second defendant’s summons.
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