Bowenbrae Pty Ltd & Anor v Flying Fighters Maintenance and Restoration Pty Ltd
[2009] QDC 91
•17 April 2009
DISTRICT COURT OF QUEENSLAND
CITATION:
Bowenbrae Pty Ltd & Anor v Flying Fighters Maintenance and Restoration Pty Ltd [2009] QDC 91
PARTIES:
BOWENBRAE PTY LTD
First Plaintiff
AND
NIGEL EDWARD ARNOT
Second Plaintiff
AND
FLYING FIGHTERS MAINTENANCE AND RESTORATION PTY LTD
Defendant
FILE NO/S:
BD 1528/08
DIVISION:
PROCEEDING:
Application
ORIGINATING COURT:
District Court, Brisbane
DELIVERED ON:
17 April 2009
DELIVERED AT:
Brisbane
HEARING DATE:
20 January, 26 March 2009
JUDGE:
McGill DCJ
ORDER:
Application dismissed in part
CATCHWORDS:
LIENS – Common Law and Contractual – artificer’s lien – whether arising – no claim for storage charges.
EQUITY – Equitable Remedies – interlocutory order for return of property subject to lien – condition as to alternative security.
Australian Guarantee Corporation Ltd v Western Underwriters Insurance Ltd [1988] 2 Qd R 119 – considered.
Beneficial Finance Corporation Ltd v Conway (No. 2) [1971] VR 594 – cited.
Re Bevan and Whitting (1864) 33 Beav 439, 55 ER 438 – cited.
Re: D A Story Pty Ltd [1993] 2 Qd R 355 – followed.
Doulton Potteries Ltd v Bronotte [1971] 1 NSWLR 591 – followed.
Fisher v Automobile Finance Co of Australia Ltd (1928) 41 CLR 167 – cited.
Re Galland (1885) 31 Ch D 296 – cited.
Hatton v Car Maintenance Co Ltd [1915] 1 Ch 621 – distinguished.
Monk v Baines [2003] SADC 13 – considered.
National Australia Bank Ltd v Kiss [2006] NSWSC 1426 – distinguished.
Soames v British Empire Shipping Co (1860) 8 HLC 338 – followed.
Tappenden v Artus [1964] 2 QB 185 – cited.
Re Taylor, Stileman and Underwood [1891] 1 Ch 590 – followed.
Wade’s Sawmill Pty Ltd v Colenden Park Ltd [2007] QCA 455 – cited.COUNSEL:
S J Given for the plaintiffs
J N Conomos (solicitor) for the defendant (20 January)
S L Hart by leave for the defendant (26 March)
SOLICITORS:
Gall Standfield & Smith for the plaintiffs
James Conomos Lawyers for the defendant
In this action the plaintiffs claim principally to recover possession of an aircraft from the defendant, although there are also other claims included in the action. The defendant and another plaintiff by counterclaim have counterclaimed against the plaintiffs seeking, against the first plaintiff, an amount as “restitution for works undertaken for and to the benefit of the first plaintiff”, and a declaration that the defendant is entitled to a possessory lien over the aircraft until payment of all moneys owing. As against the second plaintiff there is a similar claim for restitution in respect of works undertaken in relation to the aircraft, and claims are also made against the second plaintiff by both the plaintiffs by counterclaim for damages for breach of duties as a director and officer of that company, and equitable compensation.
An application has now been made on behalf of the plaintiffs seeking summary judgment in relation to the claim for possession of the aircraft, or in the alternative an interlocutory order that the aircraft be handed over pending the hearing and determination of the action, if necessary on terms as to giving security in respect of that part of the defendant’s claim which relates to the aircraft. The application also seeks security for costs in respect of the counterclaim; the hearing of that part of the application was adjourned, and I have not yet heard full argument in relation to that part. However, the first part of the application has been argued before me. After considering the material, I had some questions for one of the deponents, and there was a further hearing for that purpose on 26 March 2009.
On the pleadings it is not admitted that the plaintiffs are, together, the owners of the aircraft, as they allege. Affidavits read before me by the second plaintiff, and the natural person behind the first plaintiff, support the plaintiffs’ claim that together they own the aircraft; they also deposed to the proposition that the aircraft is registered in the name of the first plaintiff as a matter of convenience. Other affidavits read on behalf of the defendant are to the effect that at times the second plaintiff has asserted that the aircraft was his, or that the aircraft belonged to the first plaintiff. The defendant does not claim to be the owner of the aircraft, nor does it assert a jus tertii.
Background
The matter is complicated because at one time the second plaintiff was a director of the defendant, and he was also for some time the manager or general manager of the defendant.[1] The effect of the second plaintiff’s affidavit is that he was not managing the business as an employee himself, but rather was providing management services for the business as an employee of a company he controlled, Ultimate Aerobatics Pty Ltd. He says that that company withdrew services from the defendant in December 2006 due to its being owed in excess of $100,000 in respect of the provision of services.
[1]It is common ground that the second plaintiff was a director of the defendant from 31 May 1999 to 2 September 2004: affidavit of Arnot filed 11 December 2008 para 6, affidavit of Petersen filed 19 January 2009 para 3. It is also common ground that he was the manager of the company from about May 1999 to about 11 October 2006: affidavit of Arnot para 17; affidavit of Petersen para 3.
With regard to the aircraft, both the representative of the first plaintiff and the second plaintiff deposed to its having been purchased in equal shares in 1999 with a view to its restoration.[2] Initially the aircraft was stored at premises owned by the first plaintiff, but at some time prior to 5 January 2000[3] it was moved to the defendant’s premises. It seems clear enough that this occurred because of the relationship then existing between the second plaintiff and the defendant. He says that he initially worked on it himself, at times with the help of volunteers, and that during this initial period no staff of the business were used for this work.[4] The defendant’s records, however, show that a particular job number was allocated to it on 5 January 2000, and another job number on 27 January 2000, and a third on 15 January 2001.
[2]Affidavit of Arnot para 3; affidavit of Beattie filed 11 December 2008 para 2.
[3]A date when the aircraft was entered in some records of the defendant, being given a job number: affidavit of Petersen filed 19 January 2009 para 13.
[4]Affidavit of Arnot para 14.
The extract of the job number register[5] shows the job number dated 5 January 2000 as for “AO GEN 77 – contamination of Avgas check.” Seven other aircraft were given job numbers between 29 December 1999 and 6 January 2000 for the same purpose, which for reasons given later was a specific job not related to the restoration of the aircraft. The job number allocated on 27 January 2000 was for “AO GEN 79/80 EDA contamination test”, and on that day or the following day six other aircraft were given job numbers in respect of that same test. As explained later, this was also for a specific job not related to the restoration. Both of these jobs were paid for by a third party.
[5]Affidavit of Peterson filed 19 January Ex SAP1 pp 10, 11.
On the other hand, the job number allocated on 15 January 2001 was noted as for “periodic inspection and [something] restoration work”. On 22 January 2002 an unnumbered invoice[6] was raised by the defendant seeking payment from the first plaintiff, claiming for 15 hours of labour, although the time when that labour was expended was not identified, two lots of subcontract work, and some parts. One of the parts invoices is dated 25 October 2001, and the invoice for one of the subcontractors is dated 26 September 2001; the remaining copy invoice attached, for some headsets, has a date but it has fallen victim to the registry practice of punching holes in filed documents. The defendant’s invoice is endorsed that it was paid on 6 February 2002. Another invoice, number 2061 dated 7 February 2003, was raised to the first plaintiff, for $850 for a radio. It is supported by a supplier’s invoice for two such radios dated 10 February 2003. Invoice 2061 is endorsed as paid on 7 February 2003. The representative of the first plaintiff did not deal specifically in his affidavit with these invoices; he did say that he understood that from time to time he might be required to contribute towards the second plaintiff’s out-of-pocket expenses for parts.[7]
[6]Ibid p 62.
[7]Affidavit of Beattie para 7.
Both these invoices were paid; there is no evidence as to whether they were paid by the first plaintiff, or by the second plaintiff, or whether both plaintiffs contributed to the payment of the invoices; it appears, so far as I can tell from the material before me, that these invoices were for the full cost of the parts and labour referred to, rather than a 50% share.
The defendant has a document which purports to record labour time booked to this aircraft during the period from 1 January 2004 to 12 December 2006.[8] It shows some time in August 2004, some in December 2004, some in January and February 2005, and a rather more substantial amount of work in October, November, and December 2005. When questioned Ms Petersen explained that this list was not the original record produced by the defendant’s computer system, but an edited version omitting entries for which no timesheet could then be located. This must have occurred before Invoice 2530 was prepared, since the total hours matches the figure shown in that invoice. She said that she had subsequently located a few more timesheets, and I invited further material to put copies in evidence. It would have been interesting to see the original computer record.
[8]Affidavit of Petersen filed 9 January 2009 Exhibit SAP1 pp 12-13.
On 31 October 2006, after the second plaintiff left the defendant, it issued an invoice number 2530[9] to the first plaintiff for $35,098.97, inclusive of GST. That covered the labour for the times recorded in the records reproduced on pp 12 and 13, and an amount of $3,102.72 in respect of “cost for parts and subcontractors in regard to the work carried out on your aircraft.” With the invoice was a list in respect of the parts and subcontractors, where the dates shown, presumably the dates on the invoices from the parts suppliers or subcontractors, ranged from 31 January 2002 to 26 October 2005, although most date from January to March 2003. The invoice also stated:
“Please be advised this invoice is for work carried out on the aircraft at the premises of [the defendant] to date. However, it does not include any work carried out for the months of August and September 2006 as we are unable at this time to locate the staff worksheets for that period. This also does not include any charges for [the second plaintiff’s] time that he worked on your aircraft while he was with this company.”
[9]Ibid p 21.
A further invoice, no. 2541, not dated but said to have been sent on or about 18 May 2007,[10] for $22,934.63 was issued to the first plaintiff in respect of what was said in the first affidavit to be parts used on the aircraft, though obviously most of the supporting invoices attached related to the work of subcontractors, and the amount charged included $7,247.50 for 111.5 hours of “labour: further timesheet located”. No details of this additional labour were ever provided. The list of invoices provided with invoice 2541 seems to me to overlap to some extent with the invoices covered by invoice 2530, although there are some curious features about it. Both have an entry for an invoice dated 25 March 2004 from “Associated Bearings” and the figure inclusive of GST of $71.35 in the list for invoice 2530 is almost the same as the figure of $71.36 for the amount net of GST in invoice 2541. The same applies as well for an invoice dated 9 February 2005 from Daley’s for $166, and an invoice dated 11 March 2007 from Tasman Aviation Enterprises for $45.50.
[10]Ibid p 23; for the date see affidavit of Petersen para 18.
Although copies of the suppliers’ invoices are provided for the list with invoice 2541, no copies of those invoices are provided for the list with invoice 2530, so it is not possible to be definite that these are duplicate entries.[11] The invoices dated back to 7 February 2000. In the case of some of these invoices, there is nothing to identify them as relating to this aircraft other than the fact that at some point someone has written the aircraft identification “VH‑BBL” on the invoice. One of the invoices, an invoice from Aviation Welding Australia dated 30 October 2000, refers to a “Bell 47 [Darryl Beattie’s]”; Mr Hart, then appearing for the defendant, conceded that a Bell 47 is a helicopter, but Ms Petersen said that the defendant was not licensed to work on helicopters and the invoice had been coded to this aircraft. It is more likely that this was a coding error, and I do not accept that this related to work on this aircraft.[12]
[11]When questioned, Ms Petersen conceded that these appeared to have been included in both invoices. In a further affidavit filed 3 April 2009 she conceded this.
[12]This was also conceded in the further affidavit.
More significantly, two of the items in respect of which payment was claimed by invoice 2541 are identified simply as “Mobil 7/02/00 $645.17” and “Mobil 7/03/00 $4,355.97.” The documents provided in support of these are actually invoices from the defendant to Mobil. The one dated 7 February 2000 is in respect of work required to be carried out on the aircraft by “GEN AD 77”, and the invoice has noted on it that it was paid on 28 February 2000, presumably by Mobil. This obviously relates to job number 99013 dated 5 January 2000 referred to earlier, evidently to do particular work on the aircraft arising out of some contamination of fuel, at the expense of, and paid for by, Mobil. The second such invoice was also an invoice from the defendant to Mobil, dated 7 March 2000. This was for carrying out work for “GEN AD 79 and [sic] 81”, and is for a total of $4,355.97. This corresponds to job number 99025 dated 27 January 2000 referred to earlier. It is marked that it was paid on 31 March 2000, and that it was paid by Mobil is shown by the fact that among the supporting documents (p 51) is a copy of a letter from Mobil Oil Australia Ltd to “Dale Beattie” dated 23 March 2000, which says inter alia:
“Thank you for submitting your reimbursement claim. Attached is a cheque for $4,355.97 which covers the direct costs of inspecting, cleaning, and repairing your aircraft fuel systems in line with the directives of CASA AD/General/77, 78, 79, 80 and 81 and for removing and replacing fuel.”
When questioned Ms Petersen conceded that, far from there being two invoices to the defendant from Mobil Oil Australia Ltd in respect of which the defendant is entitled to charge the plaintiffs, what happened was that work was done by the defendant on the aircraft to satisfy a direction of the Civil Aviation Authority, in circumstances where that work was subsequently paid for by Mobil Oil Australia Ltd. Both of the invoices to Mobil were signed by her. Whether there was a legal liability to do so, no doubt by the time the work was done there was an expectation that Mobil would pay for this work. If that was the case, plainly there was no justification for the defendant to include these amounts in invoice 2541. This does not inspire confidence in the balance of this part of the claim.
The claim that there was a further 111.5 hours of labour for which the defendant was entitled to charge in invoice 2541 seemed inconsistent with what was deposed to in paragraph 47 of the affidavit of Ms Petersen, that there were no timesheets for work performed on this aircraft for the period from 5 January 2000 to 19 August 2004 and from 10 February 2005 to October 2006. Her explanation when questioned was that other timesheets were located subsequently, and that not all the work done between 19 August 2004 and 10 February 2005 was necessarily listed on pages 12 and 13, and charged for in invoice 2530, dated 9 November 2006.
On 14 July 2008 yet another invoice (2596) was raised by the defendant to the first plaintiff in respect of work on the aircraft, for an amount of $10,000 including GST, the work described being “estimate for work performed from 5/1/2000 to 30/10/2006”.[13] The explanation for this invoice given in the affidavit was that Ms Petersen asked someone who worked in the business how much extra work had been performed on the aircraft that had not previously been charged for, and she was told that it was at least a further $10,000.[14] That named employee has sworn an affidavit read on behalf of the plaintiffs to the effect that he worked on the aircraft while employed by the defendant in the period between 1999 and 2005, but he does not say when or for how long. He swears that “it was common knowledge among staff at [the defendant] that work on the aircraft was not to be charged for.”[15] His affidavit was sworn before the affidavit of the director of the defendant, and I do not know what his response is to the allegation in that affidavit.
[13]Affidavit of Petersen filed 9 January 2009 Exhibit SAP1 p 104.
[14]Affidavit of Petersen para 48.
[15]Affidavit of Ralph‑Smith filed 11 December 2008.
It seems to me that the invoice sent 14 July 2008 was sent essentially on a speculative basis. The estimate was obviously little better than a guess, even if he was shown copies of invoices 2530 and 2541, as Ms Petersen claimed. In the further affidavit filed 3 April 2009 Ms Petersen exhibited copies of a large number of timesheets covering the period from January 2001 to December 2005. These appear to show a total of 3,126.55 hours of work on this aircraft over this period, for which $223,548.33 is now claimed. This is said to supersede the existing invoices for labour, numbers 2531, 2541, and 2596, although no attempt has been made to reconcile this material with that which supported the earlier invoices, or to explain why what on the face of it was only a small fraction of the total work done and not charged for was invoiced in October 2006. It is difficult to believe that the defendant was entitled to be paid something like a quarter of a million dollars for work on this aircraft as at October 2006, when no attempt had been made to charge for any of this before then, and even then only a small part of this was claimed. Nevertheless, that is the claim now sought to be made.
There have also been a series of invoices raised, from 8 May 2007, for “hangarage” for the aircraft from 12 October 2006 onwards. The first of these was for $2,370.40; thereafter they ran at $440 a month until January 2008, when they were increased to $495 per month. The defendant alleges that it has been exercising a lien over the aircraft in respect of the invoices from 31 October 2006,[16] so it follows that these invoices were raised at a time when the defendant was exercising a lien and retaining possession of the aircraft pursuant to that lien. One thing that is clear is that a party exercising a lien over goods cannot charge for keeping possession of them. See RD Elliot “The Artificer’s Lien” (Law Book Company, 1967) p 8; Soames v British Empire Shipping Co (1860) 8 HLC 338; Halsbury, 4th ed. vol 28 para 544. See also LE Hall “Possessory Liens in English Law”, Sweet and Maxwell 1917, p 64. It follows that the defendant is not entitled to charge hangarage for the aircraft, and therefore necessarily is not entitled to detain the aircraft pending payment for the hangarage.
[16]Defence filed 16 July 2008, para 11.
Submission for the plaintiffs
The point raised on behalf of the plaintiffs in support of an entitlement to judgment for final relief in relation to possession of the aircraft was based on the proposition that one of the requirements for the creation of a lien is that the defendant must have received possession of the aircraft for the same purpose as that for which the lien was claimed. But for the lien, the plaintiffs as owners were clearly entitled to possession. It was submitted that what happened here was that the defendant initially received possession of the aircraft for some other purpose, either simply as storage free of charge, or for doing the work that was initially done on it by the defendant, which had been paid for, and that accordingly, even if work had subsequently been done on the aircraft by the defendant for which the plaintiffs were liable, the defendant was not entitled to exercise a lien over the aircraft in respect of that work. In effect, the submission for the plaintiffs was that a lien would not arise as a result of work being done by an artificer on a chattel already in the artificer’s possession for some other purpose. The submission was taken so far as to advance the proposition that, if an artificer was given possession of a chattel to do some work which was then paid for, but the chattel was left with the artificer who was then asked to do further work which was not paid for, there was no entitlement to a lien in respect of that further work.
As authority for these propositions the plaintiffs relied on two decisions. The first was Hatton v Car Maintenance Co Ltd [1915] 1 Ch 621. This decision, which is a delightful period piece, turned on the fact that the arrangement between the parties expressly provided in effect that the owner of the vehicle was entitled to possession of the vehicle at any time, a provision held to be inconsistent with the notion that a lien arose. It was also said that a lien would not arise anyway because what had been done by the defendant simply involved maintenance of the vehicle in its former condition, rather than improvement, and a lien only arose in respect of work which effected some improvement in the chattel concerned: p 64. This aspect of the decision has subsequently been queried, but it seems me that neither aspect provides any support for the proposition sought to be relied on here.
The second decision was Monk v Baines [2003] SADC 13. That also involved a motor vehicle, a speedcar, which had been the subject of a very loose arrangement between the owner and a speedcar driver [28], in connection with which among other things some work was done on the vehicle by or on behalf of the driver. When the arrangement broke down, an issue arose as to whether the driver was entitled to exercise a lien over the vehicle until this work had been paid for. The judgment is principally a meticulous examination of the various claims of the parties in relation to the vehicle, and largely turns on matters of fact.
A claim for a lien was rejected, on the ground that the plaintiff had at times resumed possession of the vehicle before returning it to the defendant, and that after the vehicle was last returned to the defendant no further work was done: [50]. It is clear that a lien is lost if the owner obtains possession again, even if the possession was given by mistake, and that if work is done on goods which are then retuned to the owner, and the owner then delivers them again for more work to be done on them, a lien will attach only in respect of the later work, not in respect of the earlier work: Elliot op cit p 33, where authority is cited. On that basis, it was held in Monk that there was no lien available to the defendant.
I note that Elliot went on to say that if the artificer “fulfils two orders for work on the goods without any break in his possession of them having occurred, he will have a lien on them for the two lots of work done.” No authority was cited for that proposition, but it does seem to me to follow logically from the authorities in this area generally, and I would respectfully agree with the author on this point. Such a proposition seem to me to be inconsistent with the submission advanced on behalf of the plaintiffs.
It is true that in Monk her Honour said at para [49]:
“The creation of a lien is conditional upon a number of circumstances. One of these is that the claimant must receive possession for the same purpose for which the lien is claimed: see generally [Elliot, op cit] and particularly at pp 18‑48. Now the defendant originally took possession of the speedcar for purpose of looking over the car and changing the seat and torsion bars. It was not contemplated that the plaintiff would be charged for the defendant’s work. Moreover, throughout the relationship, the defendant’s possession of the vehicle – which was interrupted when the plaintiff resumed possession of it for racing meetings – was as much for convenience and safe storage as for anything else. Although the defendant often worked on the car between meetings, that was never in the course of a commercial relationship. … Indeed the defendant never presented an account for his own labour to the plaintiff, and nor could he have done so having regard to their agreement.”
The first proposition here, that the claimant must receive possession for the same purpose for which the lien is claimed, does not appear in terms in Elliot in the pages cited, where there is a discussion of the various conditions which must be satisfied in order for a lien to arise. One of the conditions nominated by Elliot, at p 22, is that “the goods must have been delivered into the workman’s possession for the work.” However, it is apparent from the subsequent discussion, and the authorities referred to, that the point at issue here was that the goods must be taken into the actual physical possession of the workmen, and the issue discussed in respect of this point was whether the workmen obtained possession, or sufficient possession, for a lien to arise, not the reason why the goods came into the workman’s possession.
It seems to me with respect that her Honour has paraphrased what was said in Elliot in a way which suggests there is an additional requirement in the creation of a lien not referred to by that author. Indeed, it seems to me that that formulation is inconsistent with the proposition expressly advanced at p 33 in relation to a lien attaching in respect of two separate amounts of work done on goods if possession is continuous. If the plaintiffs’ argument were correct, a lien would attach in respect of the first work done, but not in respect of the second work done, since the goods had come into the possession of the workman only for the purpose of doing the first lot of work.
I have not been able to find any reference anywhere to a restriction on the existence of a lien of the kind suggested on behalf of the plaintiffs, and it seems to me to be inconsistent with the essential notion of a possessory lien, and with the proposition, referred to in Elliot and other works, that the law favours a particular lien. It seems to me that the emphasis on the question of who has possession of the goods, and the fundamental nature of the lien as an entitlement to retain possession, which is lost if possession is lost, or if the arrangement between the parties is inconsistent with an entitlement to retain possession, are really inconsistent with the notion that the right will not arise in respect of work done on something which happens to be in the artificer’s possession already anyway, although if the goods had been handed back to the owner and then immediately returned for the further work to be done, a lien would arise. That would mean, in a situation where work had been done in respect of which a lien already existed and the true owner then requested additional work, that the artificer would be put into the quandary of having to decide whether to retain the goods and give up a lien in respect of the further work, or return the goods briefly so that the lien would arise in respect of the further work, although it would be lost in respect of the work already done.
There is nothing in the careful and thorough analysis of Elliot to suggest that what matters is not only whether the artificer has obtained possession of the goods, but also why the artificer originally obtained possession of the goods.[17] It is unnecessary for present purposes for me to make a final decision on the matter. There are a lot of old authorities on liens, and I have not looked at them. It is sufficient to say, however, that with the benefit of such argument as I have had on the matter, and the research revealed in these reasons, I am not persuaded that there is such a limitation on the creation of a lien as is the foundation of the plaintiffs’ assertion of a right to a favourable determination on this point.
[17]Halsbury 4th Ed Vol 28 para 522 says that a general lien will not attach to goods put into the hands of a party otherwise entitled to such a lien, for a particular purpose, inferentially where there is in effect an agreement that there will be no lien; that is a different point.
I should mention two other matters. The first is that no lien arises under the Storage Liens Act 1973, because it seems clear that, whether or not the aircraft was put into the possession of the defendant with a view to having restoration work done on it by the defendant, it was plainly not deposited with the defendant for storage for reward, which appears to be the basis of the lien created by s 3 of the Act. In addition, there is no evidence that the defendant is a “storer” as defined in s 2 of the Act. A person in possession of goods pursuant to a claim of an artificer’s lien over the goods does not thereby become a storer for the purposes of this Act, and no statutory lien will arise.
The second matter is that on the affidavits before me there is a factual dispute as to whether there was at some time an agreement between the second plaintiff and a person who was said to be in practice in control of the defendant company that work would be done by the defendant company on the aircraft without charge, in effect as compensation for a loss suffered by the second plaintiff as a result of other dealings with that person or other companies controlled by him. The existence of any such agreement was disputed on the affidavits, and it was not contended that that dispute was something I could resolve for the purpose of this application. It seems to me therefore that it is irrelevant for the purpose of this application.
It did occur to me, however, while considering the matter, to wonder whether there may be an entitlement on the part of the plaintiffs, or perhaps more precisely the first plaintiff, to recover possession free from any lien arising out of the fact that there are two owners of the aircraft. There is no evidence that any of the work for which the defendant now claims was done at the request of the first plaintiff rather than the second plaintiff. The affidavits from the plaintiffs do not suggest that the first plaintiff was to be responsible for, or even concerned with, any restoration work done by the second plaintiff, except for some willingness to contribute in respect of the cost of parts. In these circumstances it is by no means clear that the mere fact of the co‑ownership meant that, assuming that the second plaintiff was, by arranging for the defendant to do work on the aircraft, impliedly requesting that work be done on it, he was doing so also as agent for the first plaintiff. There is no evidence of any such actual authority in the second plaintiff, or of any holding out by the first plaintiff.
The point is an interesting one, and I have not found any discussion in any text, or any authority, which deals with it directly. Some limitations on the validity of a lien may be relevant. One of the restrictions on the creation of a lien is that the work must have been requested by the true owner or by a person having authority on behalf of the true owner to request that work be done: Fisher v Automobile Finance Co of Australia Ltd (1928) 41 CLR 167 at 174.
The mere fact that the owner allows another person to be in possession of property does not imply an entitlement to create a lien, as shown in Fisher, although it may be that in the particular circumstances of the case the existence of such authority may be inferred. Fisher, and other cases which followed it, have adopted a fairly strict and narrow approach to the question of whether authority to create a lien is to be inferred; on the other hand, English courts seem to have been more willing to infer such authority, and that approach may have been adopted in Australian Guarantee Corporation Ltd v Western Underwriters Insurance Ltd [1988] 2 Qd R 119 at 123 by Macrossan J, although ultimately his Honour proceeded on the basis of an assumption in favour of an ultimately unsuccessful party that a lien arose, and went on to decide the case on the basis that any such lien had subsequently been lost. In these circumstances, it does not necessarily follow that his Honour would have decided that a lien had arisen if he had regarded that as the crucial point.
In these cases of course there was a distinction between the owner and the person in possession at the time the lien was created, but that approach may well apply by analogy in the case of co‑ownership where the lien is created by one of the co‑owners. As a general proposition, one co‑owner cannot create a security interest in a chattel binding on the other co‑owner, by the application of the principle of nemo dat qui non habet. Although in some circumstances one co‑owner who has effected improvements may be entitled in equity to contribution from the other co‑owner,[18] that would not give a right to the person who did the work directly against the co‑owner who had not authorised the work. It may be that there is a restitutionary claim, although in general a person who renders services to another who has neither requested them nor freely accepted them has no right to recover from the recipient remuneration for the work done, or compensation for any benefits conferred.[19] In these circumstances, it is difficult to see how the defendant could have any claim in respect of the work done on the aircraft against the first plaintiff, and if the defendant has no such claim there would not appear to be anything to support an entitlement to detain the chattel as against the first plaintiff.
[18]Forgeard v Shanahan (1994) 35 NSWLR 206.
[19]Goff and Jones, “The Law of Restitution” (4th edition, 1993) p 166. The concept of “free acceptance” is discussed in the same work at pp 18‑20; it is difficult to see how it would apply in circumstances where one co‑owner had no knowledge of any work being requested in respect of a chattel by the other co‑owner, and no expectation that he, as distinct from the other co‑owner, would be obliged to pay for them, particularly if that were contrary to the agreement between the co‑owners.
On the other hand, there is some authority which has discussed the issue of whether a possessorary lien will arise not by reference to the question of whether the owner authorised the works as in Fisher, but by reference to whether the owner authorised the bailee to give possession of the goods to the artificer:[20] see for example Tappenden v Artus [1964] 2 QB 185 at 196. If that is the test, it seems fairly clear that the first plaintiff did agree to the defendant having possession of the aircraft in the present case; Mr Beattie appears to have agreed to the transfer of the aircraft from his company’s premises to the defendant’s premises, which the second plaintiff was then managing.[21]
[20]In Halsbury, 4th ed. vol. 28 para 538, these are identified as cumulative requirements for a valid lien.
[21]Affidavit of Beattie, para 4.
However, I do not consider that I should decide the application before me on the basis of this point, for two reasons. First, the point was not argued before me. That is a sufficient reason, though if that were the only reason the appropriate course might be to list the matter for further argument with advice to the parties that argument on this point was sought. Second, if the issue turns on whether the second plaintiff had implied authority from the first plaintiff either to incur expense in connection with the repair of the aircraft, or to create an artificer’s lien over the aircraft, it would probably be inappropriate for that question to be decided other than in a trial on evidence, at least unless the case was a good deal clearer than the present case. In these circumstances, where there is at least potentially a factual issue to be resolved, it is not appropriate for me to go further into the applicable law at this time.
The alternative basis
Accordingly the basis upon which the plaintiffs sought summary judgment for possession is rejected, and, since it does not appear clear that the plaintiffs are otherwise entitled as a matter of law to summary judgment for possession, it is not appropriate for me to deal with the application on that basis. In the alternative, possession was sought on an interlocutory basis, which involved the plaintiffs’ giving appropriate security for the defendant’s claims. On the hearing of the application it appeared to be common ground that this could occur, and indeed should occur, the difference between the parties being as to the amount in respect of which security should be given. No doubt the defendant would prefer not to have to continue to house the aircraft, particularly in circumstances where it is not entitled to charge for doing so, but obviously it does not want to lose the benefit of the security which it holds. In any case, the defendant’s position before me was that, subject to the provision by way of payment into court of an appropriate alternative security, the defendant did not oppose the return of the aircraft.
There is authority that a court having equitable jurisdiction may make an order for the return of a chattel where a lien is claimed, on terms that an appropriate amount be paid into court in order to provide alternative security for the party claiming the lien: Doulton Potteries Ltd v Bronotte [1971] 1 NSWLR 591.[22] In that case there was a dispute between the parties as to the amount properly payable to the defendants in respect of their claim which was secured by the lien, and in the event the court went on to resolve that dispute by making a finding as to the amount the defendant was entitled to charge for the work done, and hence the amount payment of which the lien secured. In these circumstances, it was unnecessary to make an order for payment of any particular amount into court, and the judgment simply provided for the return of the chattel upon payment to the defendant of the amount found to be owing.
[22]See also, in relation to the general lien of a solicitor, Re Bevan and Whitting (1864) 33 Beav 439, 55 ER 438; Re Galland (1885) 31 Ch D 296 at 302-3, 305; Re Taylor, Stileman and Underwood [1891] 1 Ch 590.
Nevertheless, at p 599 Hope J discussed the situation applicable if there was a dispute between the parties as to the amount owing. In Re: D A Story Pty Ltd [1993] 2 Qd R 355 Ryan J at p 360 said that this decision was authority for the proposition that the Supreme Court in its equitable jurisdiction could in appropriate circumstances to make an order for the return of a specific chattel, and that that might properly be done notwithstanding a claim of a lien provided that the plaintiff paid into court to abide the event of the action the sum claimed in respect of the lien. In that case, however, reliance was placed on the specific power then available in the Supreme Court Rules, O 58 r 9, which permitted such a step to be taken, on terms that the party seeking to recover the property pay into court “the amount of money in respect of which the lien or security is claimed, and such further sum, if any, for interest and costs as the court or judge may direct.”
A similar power exists by statute now in New South Wales in s 74 of the Supreme Court Act 1970 (NSW), which was the statutory power relied upon in National Australia Bank Ltd v Kiss [2006] NSWSC 1426, the decision relied on by counsel for the plaintiffs. However, as far as I know there is no statutory equivalent of s 74 of the New South Wales Act of 1970 in force in Queensland, and Part 1 of Chapter 8 of the UCPR, which otherwise deals with the inspection, detention, and preservation of property, does not deal specifically with the recovery of property subject to a lien in this way. There seems to be therefore no specific statutory provision to this effect available in Queensland at the present time, and therefore the approach in Doulton Potteries Ltd (supra) is applicable.
There is no doubt that this court has jurisdiction to grant an injunction, including an injunction prior to the final determination of the proceedings: District Court of Queensland Act 1967 s 69. Since a possessory lien necessarily depends for its effectiveness on the continuation of possession, it will be lost by compliance with an order that the property be delivered up, and hence the effect of the court order is that the defendant’s security would be destroyed. That would be a serious step to take on an interlocutory basis other than on terms which preserved the value of the defendant’s security, that is to say, which did not prejudice the defendant as a result of the compulsory surrender of the lien.
The various statutory provisions, and the authorities to which I have referred, speak of requiring the amount claimed by the party exercising the lien to be paid into court, rather than an amount determined by the judge as appropriate to give security. In the present case, there are some problems with the amount of the defendant’s claim under the lien, referred to earlier. It seems to me clear enough that the defendant cannot have a lien in respect of storage charges, on the basis that the law is clear that the defendant is not entitled to recover charges for storage in respect of a period when it was claiming a lien.[23] Insofar as particular invoices from some contractors or suppliers have been claimed twice, no such duplication should be allowed, nor should work apparently done on another aircraft. The matter, however, is more difficult in relation to some of the other claims, particularly the claim for $10,000 extra labour and the recent claim for an additional $174,304.58. It is difficult to believe that those claims could be substantiated at a trial, but it may well not be appropriate for me to take that consideration into account when determining the amount for which security should be given in these circumstances.
[23]Matters not within the scope of any lien are not to be taken into account in assessing the amount claimed: Re Taylor, Stileman and Underwood (supra).
Elsewhere, and previously in Queensland, there has been a statutory provision in place specifying that the amount is to be determined by reference to the amount of the defendant’s claim. The effect of an order under such a provision is to substitute the money in court (or, as submitted on behalf of the plaintiffs, the money in a solicitor’s trust account) for the chattel as security for the defendant’s claim: Beneficial Finance Corporation Ltd v Conway (No. 2) [1971] VR 594 at 607.[24] Presumably, although the plaintiffs are prepared to pay the amount of the first invoice issued by the defendant, they are not prepared to pay all of the amounts claimed by the defendant. According to Elliot (surpa) at p 9, one course open to an owner against whom a lien is claimed is to pay the amount claimed under protest, under which circumstances the owner is entitled to recover any amount not properly recoverable by the party exercising the lien as money had and received. Presumably, a tender of the amount claimed under protest would still oblige the defendant to accept the tender and return the aircraft, otherwise it would lose its lien because of the tender.[25] Again, this was not a matter on which I heard detailed argument.
[24]Where it was said that nothing less than the amount claimed would suffice, citing Gebruder Naf v Ploton (1890) 25 QBD 13 at 16 per Lopes LJ.
[25]A lien is lost if a tender of the amount owing is refused: Halsbury 4th ed. vol 28 para 547. See, in a different context, as to the validity of a tender under protest, Burnham v Carroll Musgrove Theatres Ltd (1928) 41 CLR 540 at 558 per Isaacs J.
Overall, I consider that the equitable power to make an interlocutory order for the return of property subject to a lien recognised in Re D A Storey Pty Ltd (supra) should not be exercised except on terms that alternative security be given for the full amount claimed by the party exercising the lien. Despite my strong doubts about the validity of much of what the defendant is claiming, I do not consider that ordering the return on terms more generous to the plaintiffs would be a principled exercise of the discretion to grant equitable relief. If the plaintiffs are still interested in relief on those terms, I would be prepared to make an order based on the order made by the Court of Appeal in Wade’s Sawmill Pty Ltd v Colenden Park Ltd [2007] QCA 455. If, as I suspect, that would be a waste of time, I will simply dismiss the application. I will, however, reserve the costs in case the trial judge forms the view that the application was defeated by the raising of unjustified claims on the part of the defendant.
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