Banning Holdings Pty Ltd v Webster

[2001] WASC 12

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

CITATION:   BANNING HOLDINGS PTY LTD -v- WEBSTER & ANOR [2001] WASC 12

CORAM:   ANDERSON J

HEARD:   17-20 NOVEMBER 2000

DELIVERED          :   25 JANUARY 2001

FILE NO/S:   CIV 2333 of 1996

BETWEEN:   BANNING HOLDINGS PTY LTD

Plaintiff

AND

ANTHONY REGINALD WEBSTER
ROSLYN WEBSTER
Defendants

Catchwords:

Bills of sale - Promise to pay moneys secured on demand - Demand made - Defence of failing to account to mortgagee in possession - Defendant failing to prove that plaintiff was mortgagee in possession - No point of principle

Legislation:

Nil

Result:

Claim allowed
Counterclaim dismissed

Representation:

Counsel:

Plaintiff:     Mr K J O'Toole

Defendants:     Mr B W Duckham

Solicitors:

Plaintiff:     K J O'Toole & Associates

Defendants:     B W Duckham & Co

Case(s) referred to in judgment(s):

Johnson v Diprose [1893] 1 QB 512

Case(s) also cited:

Nil

1. ANDERSON J:  This is the second of two actions ordered to be heard successively, the other action being CIV 1099 of 1989.  In this action, the plaintiff sues on the personal covenant or promise in a bill of sale whereby the defendants promised, in cl 2(a):

   "On demand to pay to the Grantee all of the moneys hereby secured."

2. The "moneys hereby secured" were a principal sum of $25,000 and interest at the rate of 14 per cent per annum from 15 May 1986. 

3. There is no dispute as to the legal efficacy of the bill of sale or that it involved a contract, including a promise to pay the principal and interest on demand.  Nor is there any dispute that demand was made on the date pleaded in the statement of claim (24 September 1996) nor that no payment has been made pursuant to the demand.  A number of defences are pleaded in the defence, but not pursued and in the end it was the defendants' case that the plaintiff is obliged to account to the defendants as mortgagee in possession of the goods the subject of the bill of sale.

4. The trouble is that the entitlement of the defendants to have a mortgagor's account depends on the defendants making good the proposition that the plaintiff exercised its right under the deed to seize and take possession of the mortgaged goods - that it took possession as mortgagee.  There is no evidence that the plaintiff did so.  The circumstances under which the plaintiff went into possession of the Yellowdine Roadhouse where the goods in question are said to have been located are fully set out in my judgment in Webster v Banning Holdings Pty Ltd & Ors [2001] WASC 11 and I will not set out the facts in detail again. It is sufficient to say that on 21 December 1988 the plaintiff re‑entered the roadhouse premises pursuant to the provisions of the lease of those premises. It did not do so as mortgagee of chattels. The plaintiff's intention was to re‑enter as lessor and if and to the extent that it took possession of moveable property left at the roadhouse when the defendants moved out, there is no evidence that the plaintiff intended to do so or purported to do so or was entitled to do so as mortgagee of such chattels. The plaintiff was not seeking to enforce its rights as mortgagee in respect to the chattels the subject of the bill of sale, but purported to exercise its rights as landlord pursuant to the lease. There is no evidence of any demand for payment pursuant to the bill of sale such as to trigger the default provisions in the bill of sale entitling the plaintiff to enforce the security on 21 December 1988. That being so, the defendants were entitled to possession of the goods at all material times with no right in the plaintiff to seize the goods or keep them.

5. On this analysis, the defendants' highest position would appear to be that the plaintiff committed a trespass to goods on that date:  Johnson v Diprose [1893] 1 QB 512. That is the only cause of action which appears to be open to the defendants.

6. On a very generous interpretation of the defendants' pleading, there is within the defence and counterclaim a claim of trespass to goods.  The difficulty, however, is that this cause of action arose on 21 December 1988 - more than 12 years ago.  By par 7 of its defence to counterclaim, the plaintiff pleads that "such rights of action the Defendants allege against the Plaintiff are time‑barred".  There was no dispute that this is a plea of the Limitation Act1935, s 38(1)(c)(iv) of which provides that actions for trespass to goods may be commenced within six years after the cause of such action. The plea is a complete defence to the only counterclaim which is open to the defendants on the facts.

7. In my opinion, the defendants' counterclaim must be dismissed.