Brybay Pty Ltd (in Liq) v Esanda Finance Corporation Ltd - [2002] WASC 309

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: BRYBAY PTY LTD (IN LIQ) & ORS -v- ESANDA FINANCE CORPORATION LTD [2002] WASC 309

CORAM: McLURE J

HEARD: 3-7, 10, 11 DECEMBER 2001, 17-19, 22-26, 29-31 JULY, 2 AUGUST 2002

DELIVERED : 18 DECEMBER 2002

FILE NO/S: CIV 1352 of 1990

BETWEEN: BRYBAY PTY LTD (IN LIQ)
First Plaintiff
CHARLES WAYNE STRINGER
Second Plaintiff
JOHN PHILLIP HALLAM ATKINSON
Third Plaintiff
PAUL JONATHAN WHITE
Fourth Plaintiff
KLYQUE PTY LTD
Fifth Plaintiff
AND
ESANDA FINANCE CORPORATION LTD
Defendant

Catchwords:

Conversion of mining plant and equipment - Measure of damages - Whether includes transport costs to a remote site - Whether includes costs of installing plant and equipment on remote site - Whether measure of damages is sale value of individual items of plant and equipment if no intention to use

Standing to sue for conversion - Whether any plaintiff in possession or entitled to immediate possession of plant and equipment in remote location

Legislation:

Mining Act 1978 (WA), s 119

Supreme Court Act 1935 (WA), s 32, s 142

Result:

Judgment for the second, third and fifth plaintiffs

Category: B

Representation:

Counsel:

First Plaintiff                :     Mr N W McKerracher QC & Mr C S Gough
Second Plaintiff            :     Mr N W McKerracher QC & Mr C S Gough
Third Plaintiff               :     Mr N W McKerracher QC & Mr C S Gough
Fourth Plaintiff             :     Mr N W McKerracher QC & Mr C S Gough
Fifth Plaintiff                :     Mr N W McKerracher QC & Mr C S Gough
Defendant:     Mr R L Le Miere QC & Mr E M Corboy

Solicitors:

First Plaintiff                :     Minter Ellison
Second Plaintiff            :     Minter Ellison
Third Plaintiff               :     Minter Ellison
Fourth Plaintiff             :     Minter Ellison
Fifth Plaintiff                :     Minter Ellison
Defendant:     Stables Scott

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

ANZ Banking Group Ltd v Amev Finance Ltd (1989) Aust Torts Reports 80‑228
ANZ Banking Group Ltd v Hunter BNZ Finance Ltd [1991] 2 VR 407
Associated Midland Corporation Ltd v Bank of New South Wales [1983] 1 NSWLR 533
B Liggett (Liverpool) Ltd v Barclays Bank Ltd [1928] 1 KB 48
Brandsma & Crockett Pty Ltd & Anor v Heindal Pty Ltd & Ors [2002] WASCA 96
Butler v Egg & Egg Pulp Marketing Board (1966) 114 CLR 185
Chairman National Crime Authority v Flack (1998) 156 ALR 501
Commonwealth v Verwayen (1990) 170 CLR 394
Daimler Company Ltd v Continental Tyre & Rubber Co (Great Britain) Ltd [1916] 2 AC 307
Empresa Exportadora De Azucar v Industria Azucarera Nacional SA (The Playa Larga) [1983] 2 Lloyd's Rep 171
Finesky Holdings Pty Ltd v Minister for Transport for Western Australia [2001] WASC 87
Furness v Adrium Industries Pty Ltd [1996] 1 VR 668
Glen v Abbott (1880) 6 VLR (L) 483
Goldsmith v Sandilands [2002] HCA 31; (2002) 190 ALR 370
Hoad v Scone Motors Pty Ltd [1977] 1 NSWLR 88
In re Wasserberg; Union of London & Smiths Bank Ltd v Wasserberg [1915] 1 Ch 195
Industrie Chimiche Italia Centrale v Alexander Tsaviliris & Sons Maritime Co (The Choko Star) [1996] 1 All ER 114
J & E Hall Ltd v Barclay [1937] 3 All ER 620
Jarvis v Williams [1955] 1 All ER 108
Jones v Dunkel (1959) 101 CLR 298
Jones v Port of London Authority [1954] 1 Lloyd's Rep 489
Maynegrain Pty Ltd v Compafina Bank [1984] 1 NSWLR 258
On Demand Information Plc (In Administrative Receivership) v Michael Gerson (Finance) Plc [2002] 2 WLR 919
On Demand Information Plc v Michael Gerson (Finance) Plc [2001] 1 WLR 155
Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204
Re Country Traders Distributors Ltd [1974] 2 NSWLR 135
Rendell v Associated Finance Pty Ltd [1957] VR 604
Richmond v Branson & Son [1914] 1 Ch 968
Russian Commercial & Industrial Bank v Comptoir d'Escompte de Mulhouse [1925] AC 112
Sachs v Miklos [1948] 2 KB 23
Singh v Crafter, unreported; FCt SCt of WA; Library No 8434; 15 August 1990
Terrex Resources NL v Magnet Petroleum Pty Ltd (1988) 1 WAR 144
The Winkfield [1902] P 42
Tom Hopkins International Inc v Wall & Redekopf Realty Ltd [1985] 6 WWR 367
Water Authority of Western Australia v AIL Holdings Pty Ltd (No 2) (1992) 10 WAR 233

Case(s) also cited:

Adamson v Hayes (1973) 130 CLR 276
Barrymores Pty Ltd v Harris Scarfe Ltd (Administrators Appointed) (Receivers & Managers Appointed) & Ors [2001] WASC 210
Brilawsky v Robertson (1916) 10 QJPR 113
Brookfield v Davey Products Pty Ltd (1996) 14 ACLC 303
Carob Industries Pty Ltd (in liq) v Simto Pty Ltd [2000] WASCA 362
Caxton Publishing Company Ltd v Sutherland Publishing Company [1939] AC 178
Cigna Insurance Asia Pacific Ltd v Packer (2000) 23 WAR 159
City Motors (1933) Pty Ltd v Southern Aerial Super Service Pty Ltd (1961) 106 CLR 477
Grimes Holdings Pty Ltd v Sceghi, unreported; SCt of WA (White J); Library No 930453; 20 August 1993
Harvey Shire Council v Marist Brothers Community Inc (1993) 82 LGERA 406
Hellwig v Roche (1994) 10 SR (WA) 278
Howe v Teefy (1927) 27 SR (NSW) 301
Jennings v Credit Corp Australia Pty Ltd (2000) 48 NSWLR 709
Marist Brothers Community Inc v Harvey Shire Council (1994) 14 WAR 69
Olga Investments Pty Ltd v Citipower Ltd [1998] 3 VR 485
Owners of Dredger Liesbosch v Owners of SS Edison [1933] AC 449
Parker v British Airways Board [1982] QB 1004
Pendal Nominees Pty Ltd v Lednez Industries (Australia) Ltd (1996) 40 NSWLR 282
Ronex Properties Ltd v John Laing Construction Ltd [1983] QB 398
Sorna Pty Ltd v Flint (2000) 21 WAR 563
Swan Resources Ltd v Southern Pacific Hotel Corporation Energy Pty Ltd [1983] WAR 39
UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd (1996) 14 ACLC 1610

TABLE OF CONTENTS

Introduction
Legal Principles - Conversion
Background Facts
Whether an Agreement in May 1987
Possession or Immediate Entitlement to Possession
The Esanda Plant and Equipment
The Nature and Purpose of the Plant and Equipment
The Plant and Equipment Removed by Esanda from the Cashman Mine Site in March 1988
The Expert Valuation Evidence
Valuation - the Relevant Facts and Principles
Authority to Commence Proceedings
Whether Messrs Stringer and Atkinson have a Maintainable Cause of Action
Application to Re-open
Nature and Extent of Relief

McLURE J:

Introduction

The plaintiffs' claim, in the alternative, for damages for conversion of mining plant and equipment removed from the Cashman Mine Site by or on behalf of the defendant ("Esanda") in March 1988. The Cashman Mine Site comprises a number of leases and licences issued under the Mining Act 1978 (WA) ("the Tenements"). They are situated in a relatively remote location north of Meekatharra.
The trial commenced on 3 December 2001. After the plaintiffs had opened their case, they made an application for leave to amend the statement of claim to put forward a case based on the evidence they proposed to lead. The proposed amendments related to, inter alia, the central question of whether at the material time in March 1988 the first plaintiff, Brybay Pty Ltd (in liquidation) ("Brybay") was entitled to immediate possession of some of the plant and equipment. Following lengthy argument I granted the plaintiffs' application for leave which necessitated the adjournment of the trial. The adjourned hearing commenced on 17 July 2002.
The plaintiffs in their pleading identify three categories of plant and equipment which they say Esanda removed from the Cashman Mine Site in March 1988. They are the:
(a)Klyque Equipment;
(b)Esanda Equipment;
(c)Balance Equipment.
The plaintiffs claim that the Klyque Equipment, the Esanda Equipment and the Balance Equipment together comprised a gold gravity treatment and leaching plant. There was no dispute between the parties as to the items constituting the Klyque Equipment. Further, Esanda admitted that it unlawfully removed the Klyque Equipment from the Cashman Mine Site and subsequently sold it.
Esanda also admitted that it unlawfully removed a set of twin Ajax diesel recovery pumps from the Cashman Mine Site. Otherwise Esanda denies the plaintiffs' claims in respect of the Balance Equipment.
It is accepted that Esanda lawfully repossessed the Esanda Equipment. However, there is a dispute as to the equipment that falls within the description.
Brybay claims it was in possession or entitled to immediate possession of all of the equipment on the Cashman Mine Site in March 1988 pursuant to an oral agreement made in May 1987 between the registered holder of all the shares in the Tenements, Geoffrey Norman Frean and Brybay. It is necessary to set out in full the oral agreement relied on. It is pleaded in par 5 of the statement of claim which provides:
"5.At all material times, as a result of an oral agreement ('the Oral Agreement') the First Plaintiff was entitled to be the holder and operator of Gold Mining Leases situated North of Meekatharra in Western Australia known as the Cashman Leases ('the Mine Site').
PARTICULARS
(a)By an oral agreement between Geoffrey Norman Frean, as registered proprietor of the Mine Site on the one part and the Second Plaintiff on behalf of the First Plaintiff of [sic] the other part, made in Perth in May 1987 and evidenced in writing shortly after-
(i)Frean agreed to transfer his interest in the Mine Site including all plant and equipment thereon to the First Plaintiff;
(ii)the transferred interest was to remain mortgaged to the ANZ Bank;
(iii)Frean was to use his best endeavours to remove certain caveats lodged in respect of part of his interests in the Mine Site;
(iv)Frean was to be a shareholder in [Brybay] and was to continue, on behalf of the [Brybay], to act as the General Manager of the Mine Site;
(v)[Brybay] in return would continue the development of the Mine Site and would raise funds or cause funds to be raised to be applied to that purpose.
(vi)[Brybay] and/or all plaintiffs on behalf of [Brybay] advanced funds or caused funds to be advanced after the date of the Oral Agreement and for the development of the Mine Site.
(b)The caveats were duly removed."
Esanda denies the allegations and says that if there was an agreement as alleged it did not create any interest in the Tenements as it was not in writing as required by s 119 of the Mining Act 1978 (WA).
At all material times until August 1987 Klyque Pty Ltd ("Klyque") was the lessee of items of equipment leased by Australian Guarantee Corporation Ltd ("AGC") and Auckland Finance Pty Ltd ("Auckland Finance") as lessors which together constitute the Klyque Equipment. By agreements in writing in August 1987, Klyque assigned to Brybay all its interest in the items leased from Auckland Finance. Brybay also relies on these assignments.
Further, the plaintiffs claim that by a deed made in November 1997 Brybay assigned all causes of action in relation to these proceedings to the second and third plaintiffs, Charles Stringer and John Atkinson respectively (the "Brybay Assignment").
In the final version of the statement of claim there is no pleaded basis for a claim, or any claim to relief, by the fourth plaintiff, Paul White. Accordingly, his action must be dismissed.
The questions in issue which arise on the pleadings are:
(i)whether at the material time in March 1988 Brybay (or any of the other plaintiffs) was in possession, or entitled to immediate possession, of the Klyque Equipment and the Balance Equipment;
(ii)what plant and equipment Esanda removed from the Cashman Mine Site in March 1988;
(iii)whether the plaintiffs (or any of them) are entitled to the replacement value of the gravity treatment and leaching plant or alternatively the market value of each item of plant and equipment unlawfully removed.
In closing, Esanda raised questions as to whether Brybay had commenced and continued the action without authority and whether Messrs Stringer and Atkinson could claim in this action because, it is said, their relevant interest arose after it commenced.

Legal Principles - Conversion

Conversion involves dealing with goods or chattels in a manner repugnant to the immediate right of possession of the person who has the property or special property in them: Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204 at 229; Finesky Holdings Pty Ltd v Minister for Transport for Western Australia [2001] WASC 87 at par 162.
There must be an intentional dealing with the goods and that dealing must impair the plaintiff's rights to them. However, there is no requirement that the defendant should intend to deny the plaintiff's right to the goods: Rendell v Associated Finance Pty Ltd [1957] VR 604; Fleming J G, "The Law of Torts" 9th ed, LBC Information Services, Sydney, 1998 at 62.
It is not in dispute that Esanda's conduct in relation to the non‑Esanda equipment which it removed from the Cashman Mine Site in March 1988 constituted a conversion of that plant and equipment. The issues in dispute include whether the plaintiffs or any of them have standing to sue, and if so the appropriate measure of damages.
A person has title to sue for conversion if, at the time of the conversion, that person had actual possession or the immediate right to possession of the goods. Ownership is not determinative. For example, an owner of goods will not have a right to sue in conversion if it is not in possession or immediately entitled to possession of the goods such as where goods have been bailed for a term: Penfolds Wines Pty Ltd (supra) at 229; Glen v Abbott (1880) 6 VLR (L) 483.
The immediate right to possession of goods must derive from a proprietary or possessory interest in the goods. An equitable proprietary interest in goods will suffice: Maynegrain Pty Ltd v Compafina Bank [1984] 1 NSWLR 258.
However, a mere contractual right to possession does not grant, without more, sufficient title to sue in conversion: Jarvis v Williams [1955] 1 All ER 108 at 109. The nature of a lessee's interest in a financial lease was considered in On Demand Information Plc v Michael Gerson (Finance) Plc [2001] 1 WLR 155 at 171. Robert Walker LJ said:
"Contractual rights which entitle the hirer to indefinite possession of chattels so long as the hire payments are duly made, and which qualify and limit the owner's general property in the chattels, cannot aptly be described as purely contractual rights."
That observation was approved by the House of Lords in On Demand Information Plc (In Administrative Receivership) v Michael Gerson (Finance) Plc [2002] 2 WLR 919 at 927 ‑ 928. No‑one in this action has suggested that Klyque's interest in the equipment leased from AGC or Klyque or Brybay's interest in the equipment leased from Auckland Finance did not confer standing to sue for conversion. Accordingly, it is unnecessary to consider that matter further.
For the purposes of the law of conversion, possession means actual possession. Actual possession requires effective occupation or control over the item in question: Pollock F and Wright R S, "An Essay on Possession in the Common Law", Clarenden Press, Oxford, 1888 at 12.
To determine what is sufficient control in a particular case depends on the circumstances, especially the nature of the thing dealt with and the manner in which things of the same kind are used and enjoyed. In considering whether acts of alleged occupation or control are effective or sufficient it is necessary to consider:
(a)the kinds of physical control and use of which the thing in question is practically capable;
(b)whether there was an intention to possess the thing in question;
(c)whether another person, able in law or in fact to object to the occupation or control, has consented or acquiesced to it.
Pollock and Wright (supra) (at 13 and 14).
Inferences may be drawn as to who is in actual possession of goods by reference to the ownership of the goods themselves or the land on which the goods are situated. As stated by Pollock and Wright (supra) (at 38):
"It will hardly be denied that a man is in possession in fact, as well as possessor in law, of his own goods in the house which he occupies, whether he be in the room at a given moment, or even in the house, or not. And outside the house the same thing seems to be true. There is no magic in four walls. The chair on the lawn, a table in a summer‑house, are perhaps easier to meddle with than the tables and chairs inside the house, but they remain under the master's control in fact unless and until some other person exercises a more effective control."
Voluntary transfer of possession of goods is by way of delivery, which can be actual or constructive. Possession of the key or other means of access to goods may give actual possession of the item if in the circumstances there is sufficient physical control over those items: In re Wasserberg; Union of London & Smiths Bank Ltd v Wasserberg [1915] 1 Ch 195.
The normal measure of damages in conversion is the full value of the chattel at the time of the conversion together with any appropriate consequential loss: Halsbury's Laws of Australia, Vol 19, par 315‑645.
A person with a limited interest in goods may recover the full value from a wrongdoer who has no interest in the goods: The Winkfield [1902] P 42. If the full value of the goods exceeds the value of the plaintiff's limited interest, the excess is held on trust for the owner.
The rule of full market value is not absolute. In Butler v Egg & Egg Pulp Marketing Board (1966) 114 CLR 185 the High Court held that the full market value of the converted goods, in that case eggs sold outside a compulsory marketing scheme, was greater than the damage actually suffered by the defendant and was not recoverable. Taylor and Owen JJ said (at 191):
"But such a result [the full value of the eggs] would not accord with the general principle upon which compensatory damages are assessed, whether in actions of contract or of tort. That principle is that the injured party should receive compensation in a sum which, so far as money can do so, will put him in the same position as he would have been in if the … tort had not been committed: … And this principle is as much applicable to actions of conversion as it is to the case of other actionable wrongs. In most cases of conversion it is, of course, obvious that its application will result in the injured plaintiff recovering the full value of the property converted since that will usually represent the loss that he has sustained by the defendant's wrongful act. Hence the statement which appears so often in the books that the general rule is that the plaintiff in an action of conversion is entitled to recover the full value of the goods converted, but this statement should not be allowed to obscure the broad principle that damages are awarded by way of compensation."
Menzies J said (at 192):
"There is no hard and fast rule that the value of the goods at the time of a conversion is always the measure of the damages to be assessed for the conversion. Often the application of such a rule would produce an obviously unjust result -- for example, if goods converted by a defendant had since been recovered by the plaintiff‑owner. The true rule is, I think, that stated by Bramwell B. in Chinery v Viall, viz. that the plaintiff is entitled to recover no more than the real damage he has sustained."
The normal measure of damages is ordinarily the market value of the goods converted. This is based upon the ground stated by Greer LJ in J & E Hall Ltd v Barclay [1937] 3 All ER 620 at 623:
"Where you are dealing with goods which can be readily bought in the market, a man whose rights have been interfered with is never entitled to more than what he would have to pay to buy a similar article in the market."
Where there is a market to purchase goods similar to that which have been converted, the purchase price in the market is the replacement cost. This emerges from the judgments in J & E Hall Ltd v Barclay (supra). In that case the defendant did work for the appellant in erecting and testing a pair of experimental davits. The davits and testing apparatus were subsequently dismantled and kept by the defendant for several years. It then sold it as scrap. There was no current market price at which the goods could have been bought or sold. There was evidence that the plaintiff wanted to use the goods. This was noted by Greer LJ (at 624) and Slesser LJ (at 626). The Court of Appeal held that the plaintiff was not limited to the sale value of the goods (the scrap value) but could recover the cost of obtaining replacements.

Greer LJ said (at 624):
"Now, if there had been a market for the davits, to which the appellant could have gone on the day after he was wrongfully deprived of his davits, and bought them at an agreed price, however much lower that might be or however much higher it might be than what he had originally paid for them, he would have been entitled to the cost of replacement by getting them in the market. But, if he cannot get them in the market, what is his position? He must do that which is analogous to getting them in the market, namely, he must go to the only people from whom he can get goods to put him into the same position as he would have been in if his davits had never been taken away from him, that is to say, he must go to the manufacturer and see for what price the manufacturer will supply him with similar goods."
In this context, market value is the price at which the converted goods can be replaced. In other circumstances the appropriate measure may be the selling price rather than the buying price of the goods: McGregor H, "McGregor On Damages" 16th ed, Sweet & Maxwell Limited, London, 1997, par 1379, f/n 27; Tom Hopkins International Inc v Wall & Redekopf Realty Ltd [1985] 6 WWR 367; Furness v Adrium Industries Pty Ltd [1996] 1 VR 668 at 678 ‑ 681; "Clerk and Lindsell on Torts" 18th ed, Sweet & Maxwell Limited, London, 2000, par 14‑99, f/n 88.
Ordinarily, damages are to be assessed at the time of conversion. However, that does not mean a subsequent rise in value of the goods can never be awarded. There is no reason why it cannot be recovered as consequential damage if the necessary pre‑conditions are established: Empresa Exportadora De Azucar v Industria Azucarera Nacional SA (The Playa Larga) [1983] 2 Lloyd's Rep 171. Each case will turn on its own facts. Where the loss due to a subsequent rise in value is as a result of the plaintiff's delay in acting, the increase may be unrecoverable: Sachs v Miklos [1948] 2 KB 23.
Further, payments made by the defendant to, or for the benefit of a plaintiff may reduce the damages provided the benefit of the payment is sufficiently connected with the conversion. For example, where a defendant has applied the proceeds of a converted cheque to discharge the plaintiff's liability to a third party, the payment will be taken into account to reduce the plaintiff's damages: Associated Midland Corporation Ltd v Bank of New South Wales [1983] 1 NSWLR 533; ANZ Banking Group Ltd v Amev Finance Ltd (1989) Aust Torts Reports 80‑228.
In the ANZ case, the Full Court held that the defendant bore the onus of displacing the prima facie measure of loss. The defendant was entitled for credit to the extent to which the proceeds of the converted cheque were used to discharge the plaintiff's liability to a third party. However, other payments were ignored because they related to a lease agreement and not the conversion, and did not involve a windfall profit to the plaintiff at the expense of the defendant. The ANZ case was cited with approval in ANZ Banking Group Ltd v Hunter BNZ Finance Ltd [1991] 2 VR 407.

Background Facts

The Cashman Mine Site was located in the Murchison mineral field north of Meekatharra in Western Australia. The Tenements comprised Gold Mining Leases ("GML") 51/2817, 51/2820, 51/2821, 51/2822, Prospecting Licence 51/630 and Miscellaneous Licences 51/12, 51/13, 51/14 and 51/24.
At all material times until September 1987 Mr Frean was the registered holder of all of the shares in the Tenements. A company called Afro‑West Mining Ltd ("Afro‑West") had lodged caveats on the titles to the Tenements, the first of which were registered in July 1986. Further, the Tenements were encumbered by a registered mortgage in favour of the ANZ bank.
Mr Frean and his wife operated the Cashman mine in partnership which traded under the name "Mine Alluvials" and, according to Mr Frean, the Tenements and plant and equipment on site were acquired for the partnership.
Mr Frean and Mine Alluvials entered into agreements with Esanda between April and October 1985 in relation to the Esanda Equipment. By mid‑1986 Mr Frean was under severe financial pressure. He took steps to place the Tenements and the plant and equipment on the market. He arranged for auctioneers to prepare a sales brochure ("the Cashman brochure").
The Cashman brochure describes the machinery and plant at Cashman in the following terms:

"Hough 560 Loader with new 400 hp engine

Conveyors to Trommell [sic]

Caterpillar D7F Dozer

Spares, belts etc

House situated GML 51/2820 fully furnished

Ajax 4 inch 4KS centrifugal pumps x 2

Trommell [sic]

Generator Set 80 KVA Stamford Alternator

Bin with variable feed conveyor

Fuel tanks 4500 litre and 2000 litre

Russell 50 TPH twin rotor cement crusher

Submersible pumps Mono E30‑E20

Inverell jigs

Switchboard and cable

Secondary 12 inch clean up jig

Poly pipe 780M 110 mm 1400M 50 mm

Concentrates jig (Russell)

Seatainers (store rooms) x 2

Almalgum barrell [sic]

6 tonne Overhead gantry block and tackle

Galligher slurry pump

Store room parts, filters, fittings etc

Linitex 4 inch slurry pump with 50 hp motor

Valiant utilities 2 x CL 1978 model

Linitex spares, shaft assemblies, impellers etc

Service equipment: welders, compressors, generator set, power grease etc

Conveyors to crusher"

By 1986 Mr Frean had known Mr Atkinson for many years and described him as a friend. Mr Atkinson introduced Mr Frean and Mr Stringer. It is not in dispute that in the second half of 1986 Mr Frean negotiated with Messrs Atkinson and Stringer concerning the provision of funds in relation to the Cashman mine. However, there is a dispute between Mr Frean and Mr Stringer as to the nature and effect of those discussions. For present purposes I will confine the description of events by reference to matters disclosed by the documentary trail. Mr Stringer wrote a letter dated 3 October 1986 to Mr Frean proposing that:
-the Tenements be transferred to a new proprietary company;
-his group (comprising, inter alia, Atkinson, White and Stringer) be granted options to 50 per cent of the issued shares of the new company for a period of six months;
-his group would inject initial funds of around $50,000 to $100,000; and
-in the event the mine proved commercially viable, the group would arrange for appropriate funding to allow the business to be fully developed. The proposal also contemplated a moratorium from Mr Frean's major creditors.
The offer was varied in a letter dated 22 October 1986 from Mr Stringer to Mr Frean. This proposal was for initial funding of $100,000 and a further $150,000 on the exercise of the proposed share options. It was also proposed that on the exercise of the share options, the new company would be responsible for payment of the existing debts associated with the mining operation and that Mr Frean would receive a salary of $600 per week from the date of any formal agreement. Mr Frean was to be responsible for satisfying any claim by Afro‑West the subject of the caveats on the titles.
On about 27 October 1986 Mr Stringer and his associates transferred the sum of $15,000 to a Mine Alluvials' bank account.
By letter dated 28 October 1986 to Mr Stringer, Mr Frean stated that he wanted the new company to be responsible for the payment of all debts included in four schedules attached to the letter. The first schedule related to, inter alia, an ANZ bank loan (the "First Schedule"). The second schedule refers to Mine Alluvials' creditors (the "Second Schedule"). The third schedule refers to lease payments to Esanda for the Esanda Equipment and a debt to WA Teachers Credit Society Ltd ("TCS") (the "Third Schedule"). The fourth schedule refers to Mr Frean's creditors comprising a further loan from the ANZ Bank and unsecured creditors.
In about November 1986 Mr Stringer instructed solicitors Dawson Waldron in Sydney to prepare draft agreements. Part of one draft agreement was in evidence and that was for the sale of the Tenements by Mr Frean to a company described as "Kylque Pty Ltd" which is the same entity as Klyque. A second draft agreement was between Mr and Mrs Frean and Messrs Stringer, White and Atkinson and their respective wives (or partners) in which it was provided that Mr and Mrs Frean would hold all of the issued shares in Klyque and grant options to each of the Stringer interests, the White interests and the Atkinson interests to acquire shares in Klyque. Following the exercise of the options it was contemplated that the option holders would advance a maximum of $100,000 to Klyque for the purpose of commencing a mining operation on the Tenements and if the Tenements were commercially viable, a further sum of $150,000 would be advanced which was to be expended on the development of the Tenements. All the funds were to be advanced by way of loan. Further, Klyque was to pay on behalf of Mr and Mrs Frean the lease payments for the Esanda Equipment and their monthly TCS payments. All other liabilities of Klyque were to be the responsibility of Mr and Mrs Frean. That draft agreement was not acceptable to Mr Frean.
Mr Frean signed a letter dated 11 December 1986 to Messrs Stringer, White and Atkinson referring to an agreement reached in respect to the Tenements. There is no mention of any option in this letter. The scheme of the "agreement" was as follows. Mr Frean was to be responsible for resolving the dispute with Afro‑West and causing the caveats to be removed from the Tenements. Once the caveats were removed, Mr Frean was to transfer an 80 per cent interest in the Tenements to Klyque, described as a shelf company to be made available by Messrs Stringer, White and Atkinson provided Mr Frean was satisfied that it had no liabilities as at the proposed date of transfer. Mr Frean was to take shares in Klyque before and after the transfer of the 80 per cent interest in the Tenements. He was then to transfer some of those shares to his wife and the Stringer, White and Atkinson interests. The result was that Mr and Mrs Frean and the Stringer group would each hold 50 per cent of the shares in Klyque. Messrs Stringer, White and Atkinson were to advance to Klyque the sum of $100,000 together with a further sum of $35,000 for use by Klyque in leasing plant and equipment for use at the Cashman Mine Site, defined as "the Mine". In the event the ore recovered from the Mine reached a specified rate, Messrs Stringer, White and Atkinson were to provide personal guarantees to enable Klyque to borrow a further $150,000 for working capital purposes. Klyque was to pay the creditors in the Mine Alluvials list (ie the Second Schedule) and negotiate with Mr Frean's other creditors (in the First and Third Schedules) including Esanda, TCS and the ANZ bank to achieve an agreed schedule of repayment in full and final satisfaction of their claims. The payments were not to be treated as loans to Mr and Mrs Frean but as consideration for the transfer of Mr Frean's 80 per cent interest in the Tenements. The letter referred to additional matters.
At this time Mr Frean was represented by solicitors Keall Brinsden, in particular by Jennifer Pickworth, a partner of that firm. The signed letter of 11 December 1986 was sent by Keall Brinsden to Mr Stringer. Messrs Stringer and Atkinson signed and returned to Keall Brinsden a letter dated 19 December 1986 which was an amended version of the letter signed by Mr Frean. The amendments included the deletion of a clause providing for two classes of shares, clauses relating to loans to Mr Frean to enable him to pay out Afro‑West and a clause requiring the Stringer interests to retransfer their shares in Klyque to Mr Frean in specified circumstances. Otherwise, the arrangements were as set out in Mr Frean's letter of 11 December 1986 as previously described.
On 8 January 1987 Keall Brinsden wrote to Messrs Stringer, White and Atkinson seeking amendments to the arrangements the subject of the letter dated 19 December 1986. The proposed amendments do not appear to be of any particular significance. The addressees were requested to sign the faxed copy of the letter acknowledging their agreement to the proposed terms. There is no evidence that the parties complied with that request.
The next development in the documentary trail is a letter dated 3 April 1987 from Keall Brinsden to Mr Stringer. The letter refers to a "Sale of Tenements Agreement" and a "Share Sale and Shareholders Agreement" said to be enclosed with the letter. They were not in evidence. The Share Sale and Shareholders Agreement is said to be between "the Freans, Stringers, Whites, Fromon Pty. Ltd., Messrs. Woods and Burgess, Mr. Atkinson and Brybay". This is the first documentary reference to Brybay, Fromon Pty Ltd ("Fromon"), Woods and Burgess. The penultimate paragraph of the letter provides: "We look forward to reciving (sic) your comments on the enclosed agreements at your earliest convenience". There is no documentary or other response in evidence. The next development occurs in May 1987. I deal with that period separately.
During the period of negotiations between the parties on the terms of the proposed agreements, Messrs Stringer, White and Atkinson continued to provide funds to Mine Alluvials and directly to Mr Frean's (and Mine Alluvials') creditors.
Further, on 3 February 1987, Klyque entered into two written lease agreements with AGC. One lease agreement was for two Inverell foundry pulsating mineral jigs and the other was for a VM diesel 25KVA generator. On 4 March 1987, Klyque entered into two written lease agreements with Auckland Finance. One lease agreement was for a vibrating screen and the other was for a 12 m x 600 mm conveyor. The two jigs, generator, vibrating screen and conveyor together comprise the Klyque Equipment.
By agreements in writing dated 1 August 1987 between Klyque, Brybay and Auckland Finance, the parties agreed to the assignment of the leases of part of the Klyque Equipment to Brybay.
As a result of a funding dispute, work at the Cashman Mine Site ceased in about August 1987. There was no caretaker on site thereafter. No‑one associated with Mr Frean or the plaintiffs visited the site from that time until March 1988 or thereafter it seems.
In about September 1987 Mr Frean and Esmeralda Exploration Ltd ("Esmeralda") entered into a joint venture for the exploration and development of the Cashman Mine Site. The joint venture vehicle was Columbia Minerals NL ("Columbia"). The joint venture arrangement provided for the transfer to Columbia of an 80 per cent interest in the Tenements. Mr Stringer, Brybay and others failed in an application in this Court to obtain interlocutory injunctive relief preventing the transfer of the Tenements. In October 1987, Columbia became the registered holder of 80 shares in the Tenements. Mr Frean was the registered holder of the balance of the shares in the Tenements.
Brybay was placed in provisional liquidation in November 1987. The provisional liquidator (who became the liquidator in July 1988) did not operate the mining leases (which I take to mean he did not operate the mine) and did not secure or take possession of the plant and equipment at the Cashman Mine Site because of a lack of funds and difficulties in determining who owned the unencumbered plant and equipment.
In March 1988 Esanda repossessed the Esanda Equipment and other equipment from the Cashman Mine Site.
In October 1988 Esmeralda and Mr Stringer entered into an agreement pursuant to which they agreed to use their best endeavours to secure the entire legal and beneficial ownership of the Tenements. The joint venture vehicle used by Esmeralda and Mr Stringer was Ciciroe Pty Ltd ("Ciciroe") which represented their interests on a fifty‑fifty basis. By an agreement in writing dated 23 May 1989 Ciciroe purchased from Mr Frean's trustee in bankruptcy and Columbia's liquidator all of the shares in the Tenements, save for miscellaneous lease 51/24 which was surrendered ("The Ciciroe Agreement"). The recitals in the Ciciroe Agreement acknowledge that Columbia is, or was entitled to become, the registered holder of 80 shares in the Tenements.

Whether an Agreement in May 1987

There is no evidence of any response from Mr Stringer to the letter dated 3 April 1987 from Keall Brinsden to Mr Stringer enclosing two draft agreements.
It is not in dispute that Mr Stringer came to Perth in May 1987 to discuss contract related matters. In his witness statement prepared for the adjourned hearing and tendered in evidence, Mr Stringer puts his position as follows. He was unable to recall the precise words of a discussion between himself and Mr Frean in Perth at Mr Frean's house in May 1987 but it was in substance that he referred to the fact that the previous offers and agreements which had been prepared had not yet been executed by all parties and he said to Mr Frean that he wanted to tidy that up. Pars 23 and 24 of Mr Stringer's statement dated 12 July 2002 provide:
"23.In substance Frean told me that he would transfer his interest in the mine site to [Brybay] so that [Brybay] would own the mining operation and could run the mine; he proposed in substance that he would continue to be the General Manager at the mine site but now [for Brybay]. He proposed that Brybay would continue to fund the development of the mine site and would raise funds or cause funds to be raised for that purpose. He confirmed in substance that he would transfer to those investing in Brybay 53 of his shares in the company. He confirmed in substance that Brybay was to be responsible for the mortgage to the ANZ Bank. He told me in substance that he was going to do his best to remove caveats, which had been lodged by Afro west.
24.Again although I cannot recall the precise words, in substance, I agreed with all of this. At or about this time, I informed Frean and Ms Pickworth that those acquiring his shares would be myself (or an entity associated with me) and my wife, White and his wife, Fromon Pty Ltd, J.B. Woods, R.E. Burgess and J.P. Atkinson …"
Mr Stringer says in his statement that shortly after 14 May 1987 he received a letter from Ms Pickworth of that date with the enclosures referred to in that letter. The letter referred to is a letter dated 14 May 1987 from Keall Brinsden addressed to the Directors, Brybay Pty Ltd c/- 16 Ryrie Avenue Como WA 6152 (Mr Frean's address). It is marked to the attention of Messrs Stringer and Frean. The letter is in the following terms:
"Dear Sirs,
Cashman Tenements
We refer to our meeting this morning.
We now enclose:
(1)Agreement between Brybay Pty. Ltd. ('Brybay') and G. Frean ('Tenement Sale Agreement') – evidencing the sale by G. Frean of an 80% interest in the Cashman Tenements (in triplicate);
(2)Agreement for Sale between G. and J. Frean, C.W. and J.E. Stringer, J.W. and C.M.A. White, Fromon Pty. Ltd., J.B. Woods and R.E. Burgess, J.P. Atkinson and Brybay ('Share Sale Agreement') – evidencing the sale by G. Frean of 53 shares in Brybay (in triplicate);
(3)Declaration of Trust for execution by Mrs Frean;
(4)Share Transfers and share scrip for execution and sealing by various parties; and
(5)Minutes of Meetings of Directors of the board of Brybay relevant to:
(i)the Tenement Sale Agreement; and
(ii)the Share Sale Agreement.
Once the documents referred to in (1) and (2) above and the Share Transfer forms referred to in (4) above have been executed/sealed by all relevant parties, will you please return the same to us so that we may attend to stamping.
We have tentatively arranged with Afro‑West's Solicitor to withdraw the current tenements (sic) registered against 20/96ths shares in the Cashman Tenements and to replace those with caveats in respect to 20/100ths shares (following the conversion of the shares in the Tenements from 96ths to 100ths by Mr. Frean).
Once the conversion of shares has been finalised we will prepare the transfer forms necessary to effect the transfer of an 80% interest in the Cashman Tenements to Brybay (as contemplated by the Tenement Sale Agreement).
We will prepare the amendment to the Articles of Association of Brybay in the manner contemplated in the Share Sale Agreement and forward the amended version to you shortly."

The Tenement Sale Agreement, unsigned, was in evidence. That provided that Mr Frean agreed with Brybay to transfer and assign his "Interest" (defined as 76/96ths shares in the Tenements) subject to the ANZ mortgage for a consideration of $1. It also provided that Mr Frean agreed with Brybay to use his best endeavours to remove or cause the removal of the caveats lodged by Afro‑West from the "Balance Interest" (defined as 20/96ths shares in the Tenements) and immediately thereafter to transfer the Balance Interest in the Tenements to Brybay.
The Share Sale Agreement in evidence has handwritten amendments on it and is signed by a number of parties. I refer initially to the unannotated typed version of the agreement. It is between Mr Frean and his wife, Mr Stringer and his wife ("Stringer interests"), Mr White and his wife ("White interests"), Fromon, Messrs Woods and Burgess ("Burgess interests"), Mr Atkinson and Brybay. The recitals note that Mr Frean was the proprietor of 99 shares in the capital of Brybay and his wife was the proprietor of one share. The Share Sale Agreement provides that:
(a)Mr Frean agreed to sell 18 shares in Brybay to the Stringer interests, 14 shares to the White interests, 18 shares to Fromon and 3 shares to the Burgess interests (a total of 53 shares);
(b)the new shareholders would cause the articles of association of Brybay to be amended to provide for three classes of shares with different voting rights;
(c)settlement was to take place within 7 days at which time Mr and Mrs Frean would convene and attend a meeting of directors of Brybay to accept and register the transfer of shares, to appoint two persons nominated by the Stringer interests, the White interests and Fromon to be directors of Brybay and to appoint a person nominated by the Stringer interests, the White interests and Fromon to be secretary and public officer of Brybay;
(d)the Stringer interests, the White interests and Fromon agreed to loan to Brybay the sum of $100,000 to be applied by it for working capital purposes (receipt of which was acknowledged);
(e)forthwith from the execution of the agreement the parties were to grant or cause Brybay to grant irrevocable authorities to its bank to debit all periodical payments due by Mr Frean and/or Mrs Frean to any finance company or third party whomsoever in relation to the financial commitments of Mr and Mrs Frean listed in the first schedule to the Agreement (which is the First Schedule to the letter of 28 October 1986 from Mr Frean to Mr Stringer) it being the intention that Brybay make and service all payments due from time to time by Mr and Mrs Frean in relation to those commitments;
(f)immediately following settlement, Brybay would enter into lease and hire purchase agreements in relation to such plant, machinery, equipment and motor vehicles as Brybay shall determine as necessary for the efficient and economical operation of the Plant (defined to mean the gold treatment plant situated on the Tenements), up to a maximum total exposure of $35,000 rental;
(g)the Stringer interests, the White interests, Fromon, Mr Atkinson and Mr and Mrs Frean would use their best endeavours to cause Brybay to raise at minimum a further $150,000 by way of loan for use by Brybay for working capital purposes;
(h)immediately following settlement Brybay would negotiate with Mr and Mrs Frean's creditors listed in the second schedule to the Agreement (which is the Second Schedule to the letter of 28 October 1986 from Mr Frean to Mr Stringer) with a view to agreeing a mutually acceptable repayment schedule in relation to the debts owed to them by Mr and Mrs Frean so as to prevent, inter alia, their bankruptcy and to cause the debts to be repaid as soon as possible with Brybay funds;
(i)if Brybay paid any moneys to any third party for and on behalf of Mr and Mrs Frean in satisfaction of any debts or liabilities owed by them or either of them in relation to the Tenements and the Plant, such moneys were to be deemed to be moneys loaned by Brybay to Mr and Mrs Frean;
(j)the parties acknowledged that Mr Frean was presently and would continue to be employed by Brybay for, inter alia, a weekly gross salary of $600.
Although there is a third schedule attached to the Share Sale Agreement (in the same terms as the Third Schedule to the letter on 28 October 1986 from Mr Frean to Mr Stringer), there is no reference to it in the text of the document. There are a number of other differences between the arrangements reflected in these documents and those recorded in the Stringer group's letter of 19 December 1986.
Firstly, Mr Frean had to use his best endeavours to transfer the remaining 20 per cent interest in the Tenements (protected by the Afro‑West caveats) to Brybay. Secondly, the Stringer group shareholding in Brybay increased slightly above 50 per cent (53 shares out of 100). This may be connected with the introduction of the Burgess interests in the April drafts of the agreements. Thirdly, the creditors to be paid by Brybay and the creditors with whom Brybay was to negotiate to avoid insolvency action are different. Fourthly, the payment of Mr Frean's creditors by Brybay were to be treated as loans not as consideration for the transfer of the Tenements. There is no evidence to explain any of the changes. Further, as the April 1987 drafts were not in evidence it is not possible to identify the progression in the negotiations between January and May 1987.
There are a number of handwritten amendments to the Share Sale Agreement. The most important is the addition of a further party, Tarmob Pty Ltd ("Tarmob") and the substitution of Tarmob for the rights and obligations of the Stringer interests. In addition, the shares to Tarmob and Fromon increase from 18 to 19 and the shares to the White interests decrease from 14 to 12. The Share Sale Agreement is executed by Mr Frean, Mr Stringer, Mr White and his wife, Mr Woods, Mr Burgess, Mr Atkinson and sealed by Tarmob, Fromon and Brybay. It is not signed by Mrs Frean or (it appears) by Mrs Stringer. The date of the agreement is inserted in handwriting and is 30 March 1987.
According to Mr Stringer, shortly after 14 May 1987 the Tenement Sale Agreement was signed by Messrs Stringer and Atkinson on behalf of Brybay and returned to Keall Brinsden. There is no signed copy of the Tenement Sale Agreement in evidence. Further, he said he arranged for the Share Sale Agreement to be signed by all parties except Mr Frean and caused it to be returned to Keall Brinsden.
Mr Stringer was cross‑examined concerning the oral agreement. He placed his meeting with Mr Frean at which he said the oral agreement was made at just prior to a meeting he and Mr Frean had with Ms Pickworth at Keall Brinsden. His evidence of his meeting with Mr Frean is as follows:
"What was said in that meeting, and again can I ask you to confine yourself to that meeting? We will come later to other meetings and discussions. I would like you to tell her Honour what was said in that meeting?‑ ‑ ‑What was said was that we'd been negotiating in good faith since March 87 and that the agreements hadn't been formally executed. It had come up previously, we had made all the changes and we needed to tidy up the actual arrangements that we'd agreed to.
Yes. Is that all that you were able to tell her Honour of your recollection of the meeting?‑ ‑ ‑Yes, and that we were having the meeting with Keall Brinsden to finalise it all.
Do you say nothing else was said at that meeting or you don't recall what else was said at the meeting?‑ ‑ ‑I don't recall what else was said at that meeting.
So do you say that what was said at this meeting was that you had prior to that meeting had a number of discussions, correspondence, and that you wished to tidy up the matter. Is that right? ‑ ‑ ‑That's correct.
What else? ‑ ‑ ‑I just said I can't recall what else what was said at the meeting.
So all you can recall that was said at the meeting was that you had had a number of discussions, communications, over a period of time and you wished to tidy it up? ‑ ‑ ‑That's correct.
Was something said in relation to that about going to see Ms Pickworth?‑ ‑ ‑ Certainly there was.
What was said about that?‑ ‑ ‑That we had a meeting with Ms Pickworth to get everything finalised."
In cross‑examination Mr Stringer was taken to pars 23 and 24 of his witness statement dated 12 July 2002. It was put to him that it was not correct that any of those things were said at the meeting to which Mr Stringer responded:
"I can't remember in specific terms what was mentioned about these. I wouldn't expect them to have been mentioned in detail.
Indeed you don't have any recollection of whether those things were said or not?‑--That's true."
…
You also said, and you have said on more than one occasion, that you have no recollection of specific terms of the agreement being discussed at that meeting?---That 's true."
He said in cross‑examination of his meeting with Mr Frean in May 1987:
"At this meeting in May of 1987 was there any discussion about what the terms of the agreement were to be?---Not in specific terms. I can't imagine why there would be.
But your answer is there's no - - -?---I can't recall but I can't imagine why there would be.
You can't recall but to the best of your belief there was no discussion at this meeting in May of 1987 of what the terms of the agreement were to be?---The terms of the agreement were well understood by both parties."
Mr Stringer rejected the proposition that he and his associates advanced funds to Mr Frean in anticipation of reaching an agreement. His position was that there had been an agreement from late 1986 which was substantially the same as the agreement in May 1987.
In cross‑examination Mr Stringer said that the documents referred to in Ms Pickworth's letter had been prepared by the time of the meeting with her.
Mr Stringer had prepared and signed written statements for use in the trial listed to commence in December 2001. In those witness statements there is no express reference to an oral agreement made at a meeting with Mr Frean in May 1987. However, he does say that in May 1987 following a variety of discussions Mr Frean agreed to transfer an 80 per cent interest in the Tenements. Mr Stringer had also said in an earlier written statement, which he confirmed in cross‑examination to be accurate, that the terms of the Share Sale Agreement reflected the agreement reached between Mr Stringer and Mr Frean in May 1987. Further, he said that he and Mr Frean agreed on behalf of Brybay.
Mr Stringer also accepted in cross‑examination that he subsequently amended the Share Sale Agreement provided by Keall Brinsden to insert Tarmob as a party and to make other associated amendments. Mr Stringer confirmed that the changes had not been discussed at the meeting with Mr Frean.
Mr Stringer's explanation for the fact that the Share Sale Agreement makes no reference to the sale of the plant and equipment at the Cashman Mine Site was that he always thought the plant was part of the Tenements.
Mr Stringer lodged a proof of debt in Mr Frean's bankruptcy claiming the sum of approximately $273,000 said to have been for the purchase and construction of mining plant at the Cashman Mine Site. Mr Stringer said he had lodged a proof in Mr Frean's bankruptcy and in Brybay's liquidation to cover all bases.
The Australian Securities and Investments Commission ("ASIC") historical company extract for Brybay records that Brybay was registered in New South Wales on 17 February 1987, that Mr Stringer and Mrs Frean were appointed directors on 11 March 1987, that Mr Stringer was appointed secretary on 11 March 1987 and that Mr Atkinson was appointed a director on 30 March 1987. However, a Particulars of Change of Directors form dated 11 March 1987 (but with a date stamp of July 1987) which appears to have been signed by Mr Stringer and lodged by his accountancy company, records that Mr and Mrs Frean were appointed directors of Brybay on 11 March 1987 and Messrs Stringer and Atkinson on 30 March 1987.
Other Brybay company documents were in evidence, in particular, minutes of a meeting of directors held on 11 March 1987 resolving to appoint Mr Frean and his wife as directors and Mr Stringer as secretary, a consent to act as director signed by Mr Frean and dated 11 March 1987, a consent to act as director by Mrs Frean also dated 11 March 1987, a resolution said to be of all of the directors (Mr and Mrs Frean) dated 20 March 1987 resolving to convene an extraordinary general meeting for 30 March 1987, a notice dated 20 March 1987 signed by Mr Stringer giving notice of a special resolution dividing the capital into A, B and C class shares, a return showing division or conversion of shares into classes dated 30 March 1987 signed by Mr Frean (but with a date stamp of 6 August 1987) showing that the shares in Brybay had been divided into class A, B and C shares, a resolution of directors (Mr and Mrs Frean) allotting 98 ordinary shares to Mr Frean and finally, minutes of a meeting of directors said to have been held on 30 March 1987. Those minutes provide:
"The Chairman tabled at the meeting an agreement made between Geoffrey Norman Frean, Joan Frean, Charles Wayne Stringer and Jane Elizabeth Stringer, Jonathon White and Colleen Moria Ann White, Fromon Pty Ltd, John Bernard Woods and Edward Burgess, John Phillip Atkinson, Tarmob Pty Ltd and the Company ('the Agreement').
It was resolved to execute the Agreement and accept and register the following transfer of shares in the Company pursuant to the Agreement:
(i)The Transfer of 19 ordinary shares by Geoffrey Frean to Tarmob Pty Ltd;
(ii)The Transfer of 12 ordinary shares by Geoffrey Frean to Jonathon White and Colleen White;
(iii)The Transfer of 19 ordinary shares by Geoffrey Frean to Fromon Pty Ltd; and
(iv)The Transfer of 3 ordinary shares by Geoffrey Frean to John Woods and Robert Burgess."
Further, it is noted in the minutes that the Chairman tabled consents by Messrs Stringer and Atkinson to act as directors and that it was resolved to appoint Messrs Stringer and Atkinson directors of Brybay, such appointments to be effective as at midnight.
Mr Frean's evidence of the content and outcome of the negotiations with Mr Stringer was to different effect. According to Mr Frean, the substance of what was discussed from late September 1986 was that all agreements had to be in writing and signed by all parties; that the Stringer group contribution would be to commit funds to proceed to the next stage of development towards a public listing as an option payment to be part of the further development of the site; that the Stringer group funds would be used to pay creditors until the project had reached the end of the option period, at which time, funds would be raised for all creditors to be paid in full and then the plant and equipment and Tenements would be transferred into a company to be floated debt free; that if the development of the site foundered Mr and Mrs Frean could walk away with the assets and Messrs Stringer, White and Atkinson would walk away with nothing.
It was Mr Frean's evidence that Mr Stringer came to Perth in May 1987 in order to finalise a draft agreement. He said that they had had difficulty in getting any draft agreements so the idea was that they would all meet to try and get some sort of draft from which they could proceed. The whole concept of going to Keall Brinsden, he said, was to get a draft agreement which they would review and consider and from which they could draw up the final agreement and have it properly signed.
Mr Frean rejected the proposition that he reached an oral agreement with Mr Stringer in May 1987 or at all. According to Mr Frean, the substance of what was said by Mr Stringer during his May 1987 visit was that Mr and Mrs Frean were to be the only directors and shareholders of Brybay, that Mr and Mrs Frean would transfer all the assets (Tenements and plant and equipment) into Brybay but not before the transfer of sufficient funds by Mr Stringer and his associates to pay out all creditors of Mine Alluvials and when that occurred a percentage of shares in Brybay reflecting joint ownership would be transferred to Mr Stringer and his associates.
Mr Frean's recollection of the meeting with Ms Pickworth at Keall Brinsden was that Mr Stringer dictated most of the terms of the agreements to her and she asked questions from time to time. His recollection was that the following day he collected the draft agreements from Keall Brinsden took them home and handed them to Mr Stringer who was leaving Perth that day to return to New South Wales. Mr Frean says Mr Stringer presented to Mr Frean and his wife at their home pro forma Brybay secretarial documents which he asked them to sign so the relevant text could be inserted as and when the need arose without the need to have the documents sent back and forth to Mr and Mrs Frean for signing. Mr Frean said he expressed concern about signing partially completed company secretarial documents but that Mr Stringer persuaded him and said he would not process the documents until the draft agreements had been considered, reviewed and finalised.
According to Mr Frean, there was no meeting of directors of Brybay on 30 March 1987, or at any other time at which it was resolved to execute the Tenement Sale Agreement, the Share Sale Agreement, to transfer shares or to appoint Messrs Stringer and Atkinson directors.
Mr Frean was clear that he did not sign the Share Sale Agreement after the handwritten amendments had been made to insert Tarmob as a party and the associated amendments. He said there were no further discussions about the agreements after May 1987 because the Stringer group made demands for extra shares.
According to Mr Frean, the Stringer group did not provide any funds to Brybay. However, Mr Frean accepted that Mr Stringer and those associated with him had spent at least $300,000 for the development of the plant and equipment at the Cashman Mine Site, most of which funds appeared to have been routed through the Mine Alluvials' Account. The ANZ bank loaned funds to Brybay by way of commercial bills which loan was personally guaranteed by Mr Frean and the Stringer group. I am unable to determine when the finance application was made, when approval was granted or when the advances were made. However, on 26 June 1987 Mr Frean opened an account for Brybay at the Belmont branch of the ANZ bank into which funds were credited. The only authorised signatories were said by Mr Frean to be himself and his wife. There is little evidence to identify what the Brybay funds were used for after the account was opened in June 1987. However, in late June 1987 funds from the Brybay account were transferred to the Mine Alluvials' account which assisted in extinguishing the Mine Alluvials' overdraft. Further, Mr Frean conceded that he received drawings from Brybay although he did not identify the period in which that occurred.
It appears from Mr Frean's evidence that the work done at the Cashman Mine Site, after receipt of the funds advanced by the Stringer group, was the construction and establishment of a leaching system and the raising of the trommel and related equipment (in particular the crusher) to incorporate two 42 inch jigs into the plant. That work involved the construction of the plant framework consisting of structural supports, platforming, walkways and stairs. Mr Frean had instructed Linkage Engineering, who had been doing the installation work, to source second‑hand steel from auction yards in Perth to construct the framework.
In the first half of August 1987 Mr Frean noted that $15,000 had been withdrawn from the Brybay bank account he says without his knowledge or consent. The effect of that, he said, was there were no further available funds to continue work on the Cashman Mine Site which then ceased. Further, Mr Frean gave evidence of a conversation with Mr Stringer on or about 12 August 1987 when Mr Stringer said words to the effect that he, Stringer, was not content with the terms of the draft agreements and that he wanted a significant change which was a larger share allocation for him and his associates for no further consideration. Thereafter, Mr Frean put the matters in the hands of his then solicitor, John Gilmore of Gilmore and Dearn.

By letter dated 15 September 1987 from Mr Frean's solicitors Gilmore and Dearn to Mr Stringer, Mr Frean gave notice of termination of the agreements relating to the Cashman Mine Site ("the termination notice"). The termination notice refers to agreements between the parties and the Stringer group's failure to comply with those agreements which allegations are expressly and impliedly based on the provisions of the Share Sale Agreement. Mr Frean was cross‑examined concerning affidavits he swore in November 1987 in opposition to an injunction application in the Supreme Court action commenced by Mr Stringer and his group against Brybay, Mr and Mrs Frean, Columbia Minerals and Esmeralda. In one of the affidavits Mr Frean refers to advice from Mr Gilmore to the effect that there was not a validly executed or binding Share Sale Agreement or Tenement Sale Agreement and, even if the agreements had been executed Mr Stringer and his associates had repudiated the agreements and if he accepted the repudiation he would no longer be bound to perform them and would be at liberty to transfer the Tenements to a third party. Based on that advice, he instructed Mr Gilmore to advise Mr Stringer and others that he would accept the repudiation and terminate such agreements as existed.
My task is a very narrow one. It is confined to determining whether there was an oral agreement in May 1987 between Mr Frean and Mr Stringer, the latter on behalf of Brybay, evidenced in writing by the Tenement Sale Agreement and the Share Sale Agreement whereby:
(i)Mr Frean agreed to transfer his interest in the Mine Site including all plant and equipment thereon to Brybay;
(ii)the transferred interest was to remain mortgaged to the ANZ bank;
(iii)Mr Frean was to use his best endeavours to remove certain caveats lodged in respect of part of his interests in the Mine Site;
(iv)Mr Frean was to be a shareholder in Brybay and was to continue, on behalf of Brybay, to act as the general manager of the Mine Site;
(v)Brybay in return would continue the development of the Mine Site and would raise funds or cause funds to be raised to be applied to that purpose;
(vi)Brybay and/or all the plaintiffs on behalf of Brybay advanced funds or caused funds to be advanced after the date of the oral agreement for the development of the Mine Site.
Although the term "Mine Site" is defined in the pleading as the gold mining leases, it is tolerably clear that it is intended to be a reference to the Tenements and the plant and equipment thereon.
Esanda submitted that, having regard to the pleading history of the case, the plaintiffs could not argue for another agreement, whether written, implied or partly written. The plaintiffs accepted this to be the case and agreed that they were confined to their claim of an oral agreement in May 1987 evidenced in writing shortly thereafter. The oral agreement was said to have been made at the meeting between Mr Stringer and Mr Frean at Mr Frean's house just prior to visiting Ms Pickworth at Keall Brinsden on 14 May 1987.
It is necessary to make a number of factual findings in relation to events occurring before and after May 1987 before addressing the question of whether there was an oral agreement as pleaded. My findings are as follows. The Stringer group commenced providing funds in relation to the Cashman Mine Site in October 1986 and continued to do so until at least July/August 1987. I accept Mr Frean's evidence that the funds were paid to the Mine Alluvials' account or directly to the creditors of Mr Frean and Mine Alluvials. I also accept Mr Frean's evidence that the Stringer group did not at any stage provide funds directly to Brybay. However, the funds supplied by the Stringer group were applied in connection with the development of the Cashman Mine Site including the plant and equipment thereon.
Further, it is common cause that Brybay borrowed $150,000 from the ANZ bank by way of commercial bills which loan was guaranteed by, inter alia, Messrs Frean, Stringer and Atkinson. The bank statements for the Brybay account establish that at the end of June 1987 a significant amount of funds were paid by Brybay into the Mine Alluvials' account which had the effect of, or contributed to, extinguishing Mine Alluvials' overdraft.
The documentary evidence establishes that the parties negotiated the terms of the agreements to regulate their relationship in connection with the Cashman Mine Site from August 1986 until May 1987. I find that Mr Frean had authority to act on behalf of his wife in the negotiations. He accepted that he did all the business on behalf of himself and his wife and that he generally ran the business side of the family. Further, Mr Frean's evidence which I accept, that the plant and equipment on site in 1986 belonged to the Mine Alluvials partnership is consistent with the documentary evidence.
The documentary evidence supports, and I find, that the Stringer group commenced to provide funds for the development of the Cashman Mine Site before any concluded agreement had been reached. For example, between the Stringer group's offer of 22 October 1986 and Mr Frean's counter‑offer in his letter of 28 October 1986, the Stringer group transferred $15,000 to Mine Alluvials' bank account. Further, it is clear from the content and circumstances surrounding the Dawson Waldron draft agreements and Mr Frean's letter of 11 December 1986 that the parties had not at that stage reached agreement on central issues such as the extent and application of funds to be supplied by the Stringer group. However, it is apparent from Keall Brinsden's letter of 8 January 1987 that by that time there were no major obstacles to finalising an agreement. The joint venture corporate vehicle was to be Klyque (then controlled by Messrs Stringer and White, and Atkinson) and in early February and early March 1987 Klyque entered into the leases of the Klyque Equipment. However, as a result of a requirement by Mr Frean that the joint venture corporate vehicle have no liabilities, actual or contingent, at the date of the proposed transfer of the Tenements, Brybay was to replace Klyque.
Brybay was registered in February 1987 in New South Wales. Brybay's corporate records, which were kept in the custody of the secretary (Mr Stringer), and the documents lodged with the then National Companies and Securities Commission show that Mr Frean and Mrs Frean consented to and were appointed directors of Brybay and Mr Stringer its secretary on 11 March 1987. The evidence establishes that Mr Frean had instructed Ms Pickworth of Keall Brinsden to prepare a draft agreement with Brybay as the holder of the Tenements at least by April 1987. Further, in a report as to affairs of Brybay dated 17 December 1987 signed by Mr and Mrs Frean as directors, they identified its unsecured creditors to include Linkage Engineering, which had been supplying goods and services in connection with the development of the Cashman Mine Site. Linkage Engineering issued an invoice to Brybay dated 6 April 1987. Further, the evidence establishes that Mr Frean was paid (or owed) drawings or wages by Brybay in connection with his management role at the Cashman Mine Site. I infer from the terms of the Share Sale Agreement in evidence that Mr Frean was paid by Brybay before mid‑May 1987. On the basis of this evidence, I conclude that Mr and Mrs Frean were appointed directors of Brybay in March 1987 and that Mr Frean was acting as manager of the Cashman Mine on behalf of Brybay before mid‑May 1987.
However, I am satisfied that the other company records dated March 1987 associated with the implementation or execution of the Share Sale Agreement have been backdated. The backdated records include the resolution of directors dated 20 March 1987 to convene an extraordinary general meeting for 30 March 1987, the notice dated 20 March 1987 signed by Mr Stringer giving notice of a special resolution dividing the capital into A, B and C class shares, the resolution of directors allotting 98 ordinary shares to Mr Frean and the minutes of a meeting of directors said to have been held on 30 March 1987. Further, I am not satisfied that the events noted in those company records occurred as recorded or at all. I accept Mr Frean's evidence that there were no relevant meetings or resolutions of directors as shown in the company records and that he signed secretarial documents at Mr Stringer's request in anticipation of the finalisation (which I use in a neutral sense) of the written agreements. It follows, and I so conclude, that Messrs Stringer and Atkinson were not directors of Brybay at any time before mid‑May 1987. However, I am not satisfied as to when those documents were signed or that Mr Frean signed blank or partially completed documents.
I accept Mr Stringer's evidence that he came to Perth in May 1987 for the purpose of finalising written agreements and that he and Mr Frean met with Ms Pickworth with that object in mind. I do not accept Mr Frean's evidence that the purpose of the meeting was to get a draft agreement which the parties would then review and consider and from which final agreements could be signed. The history of the dealings supports Mr Stringer's evidence. In particular, a number of draft agreements had been exchanged and there appears to be no significant areas of disagreement by January 1987. The parties acted consistently with what was contained in that correspondence. The letter of 14 May 1987 from Keall Brinsden refers to "our meeting this morning". I infer from Ms Pickworth's letter that her understanding arising from the meeting on 14 May 1987 was that the documents enclosed with her letter were for execution. The terms of the 14 May letter are to be contrasted with her letter of 3 April 1987 which refers to draft agreements and seeks Mr Stringer's comments. Further, Mr Frean (and most other parties) signed the Share Sale Agreement. There is no evidence that he sought further legal advice before doing so.
I also accept Mr Stringer's evidence in cross‑examination that he subsequently amended the Share Sale Agreement to insert Tarmob as a party and made the other associated amendments, which amendments had not been discussed previously with Mr Frean. I am not satisfied that the minutes of a meeting of directors allegedly held on 30 March 1987 (which refer to the execution of the Share Sale Agreement, to Tarmob as a party and to the transfer of 19 shares to Tarmob) was enclosed with Ms Pickworth's letter of 14 May 1987. It would be unusual for a typed version of the Share Sale Agreement, which makes no reference to Tarmob, to differ from minutes enclosed in the same letter. Further, Mr Stringer said Mr White (who was not in Perth) had also made handwritten annotations to the Share Sale Agreement.
I turn now to the issue of whether there was an oral agreement as pleaded. Much of Mr Frean's evidence concerning what was intended and discussed by the parties up to and including May 1987 (including his evidence that all of Mr and Mrs Frean's creditors had to be paid before the plant and equipment and Tenements would be transferred to a company which would then be floated debt free and if the development of the site foundered Mr and Mrs Frean would walk away with the assets) is not supported by the documentary trail of the negotiations between the parties. I do not accept Mr Frean's evidence on these matters. I accept that it was understood by all involved that there be agreements in writing, particularly having regard to s 119(2) of the Mining Act 1978 (WA). However, I am not satisfied that it was a condition precedent to the formation of any agreement that it be in writing. The conduct of the parties belies such an intention.
Further, I do not accept Mr Stringer's evidence‑in‑chief in pars 23 and 24 of his witness statement dated 12 July 2002 of what was said at the meeting relied on between Mr Frean and Mr Stringer. He frankly conceded in cross‑examination that he had no recollection of what was said at the meeting but could not imagine why there would have been discussion at that meeting of the specific terms of the agreement because, he said, they were well understood by the parties. According to Mr Stringer, agreements were in existence as from late 1986.
In addition, there are difficulties in reconciling the pleaded oral agreement with the terms of the Tenement Sale Agreement and the Share Sale Agreement said by Mr Stringer to reflect what was orally agreed. Firstly, the pleaded parties differ from the parties to the Share Sale Agreement which is significant, if only because at least some of the plant and equipment was the property of the Mine Alluvials partnership.
Secondly, the Tenement Sale Agreement and the Share Sale Agreement do not expressly, or impliedly include a term that Mr and Mrs Frean agreed to transfer their interest in the plant and equipment on the Tenements to Brybay.
Thirdly, the Share Sale Agreement as subsequently amended by Mr Stringer imposes rights and obligations on Tarmob instead of the Stringer interests. Fourthly, the Tenement Sale Agreement and Share Sale Agreement contain numerous provisions which go beyond the pleaded oral agreement.
The plaintiffs placed great reliance on Mr Frean's termination notice in support of the claim of an oral agreement. However, that conduct is to be seen in the light of Mr Frean's evidence (which I accept) of his legal advice to the effect that there was no binding agreements or if there were, they could be terminated.
The plaintiffs also rely on the joint instructions to Ms Pickworth, the execution of the Share Sale Agreement by Mr Frean, the reference in Ms Pickworth's letter to documents "evidencing the agreement" and the signing of the minutes of directors meeting referring to the Share Sale Agreement as evidence of the pleaded oral agreement. However, that conduct is also consistent with Mr Stringer's evidence of earlier agreements, with the detail to be tidied up and formal written agreements finalised in consultation with Ms Pickworth for execution, all parties having had the benefit of the April 1987 drafts.
There is evidence to support Mr Stringer's opinion of an earlier agreement, at least some stage after January 1987, between Mr Frean on behalf of himself and his wife and Mr Stringer on behalf of himself and his associates in relation to the latter acquiring an interest in the Tenements through a 50 per cent shareholding in a corporate vehicle to which an 80 per cent interest in the Tenements would be transferred on the financial terms contained in the letter of 19 December 1986 signed by the Stringer group. There is little evidence of events in the period between March 1987 and Mr Stringer's arrival in Perth in mid‑May 1987. However, there must have been discussions in that period concerning the changes reflected in the Tenement Sale Agreement and the Share Sale Agreement. It is unnecessary for me to make any finding on whether there were earlier agreements which were varied from time to time as circumstances connected with the performance (or anticipatory performance) of the terms of the agreements (or proposed agreements) changed. However, I accept that Mr Stringer believed that agreements had been reached before he came to Perth. Mr Stringer came to Perth to finalise the written agreements. In those circumstances it is unlikely that a person who believed agreement had already been reached on the central issues would agree those matters again or intend to be bound by matters of detail until the execution of the formal written agreements. It is in that context that Mr Stringer felt free to amend the parties to the Share Sale Agreement without discussion with Mr Frean. I accept that the importance of these amendments is significantly lessened by the Stringer group's performance of most, if not all, of its financial commitments.
For these reasons, I am not satisfied that there was an oral agreement made between Mr Frean and Brybay in May 1987 as alleged. Further, even if there was an agreement between the relevant parties, I am not satisfied that the agreement provided for the transfer to Brybay of Mr and Mrs Frean's interest in the plant and equipment on the Tenements. At no stage from the commencement of negotiations did any exchange of communication or draft agreement refer to, or provide for, the transfer of Mr and Mrs Frean's interest in the plant and equipment on the Tenements. The failure to provide for the transfer of Mr and Mrs Frean's interest in the plant and equipment is understandable from a commercial perspective. Around the time of Mr Stringer's first visit to the Cashman Mine Site in late 1986 most of the significant items of plant and equipment on site, at least those directly involved in the collection and treatment of ore, were leased from Esanda. There was never any intention for Mr Frean to assign the Esanda Equipment leases to the corporate vehicle who was to the hold the Tenements. Further, it is apparent from the written negotiations that it was intended that the funds advanced by the Stringer group would be used by the corporate vehicle to develop the gravity treatment plant and leaching system. In the ordinary way, plant and equipment acquired with those funds would belong to the corporate vehicle.
I am not persuaded by Mr Stringer's evidence to explain the omission, which was that he thought the plant and equipment on site was part of the Tenements. That may be understandable in relation to some items of the plant and equipment on site but not to much, if any, of the Balance Equipment identified in the Cashman brochure. Mr Frean's evidence that the negotiations related to the plant and equipment as well as the Tenements is linked with his evidence of the broad scheme of the arrangement which has at is core the payment of all Mine Alluvials' debts before the transfer of any property and which, as I have said, is inconsistent with the documentary trail. I am not persuaded that his understanding of the parties' intentions is reliable.

Possession or Immediate Entitlement to Possession

The first issue for consideration is whether Brybay was in actual possession of the Klyque Equipment and the Balance Equipment in March 1988. Brybay was in provisional liquidation at that time. The liquidator had made no attempt to take possession or secure the plant and equipment in any way. Mr Frean had ceased to be general manager of the mine site on behalf of Brybay from the time he terminated the agreements. The Cashman Mine Site was in a remote location and had been unattended for some time before and after the repossession action was taken. Neither the mine site nor the plant and equipment was fenced or secured in any way.
Mr Frean and Columbia were the registered holders of the Tenements. By virtue of s 119(2) of the Mining Act 1978 (WA), Brybay had no proprietary interest, legal or equitable, in the Tenements: Terrex Resources NL v Magnet Petroleum Pty Ltd (1988) 1 WAR 144.
If Mr Frean and Columbia, as owners, occupied the Tenements and manifested an intention to exercise control over them, they would be in possession of the plant and equipment on the Tenements which would prevail against all but the true owner entitled to immediate possession: Chairman National Crime Authority v Flack (1998) 156 ALR 501.
I am not persuaded on the evidence that Brybay or any of the plaintiffs can be said to have been in actual possession of the plant and equipment at the Cashman Mine Site at the time of its repossession in March 1988.
The next issue is whether any of the plaintiffs were immediately entitled to possession of the Klyque Equipment or Balance Equipment. That in turn depends upon the identity of the owner of the Balance Equipment and whether the lessees of the Klyque Equipment remained entitled to possession under the leases. There is no evidence, and no suggestion by any party, that the lessors were entitled to immediate possession of the Klyque Equipment under the leases. Further, Esanda does not challenge the validity of the assignment of the Auckland Finance leases. In those circumstances, I find that Brybay was entitled to immediate possession of so much of the Klyque Equipment as was leased from Auckland Finance and assigned to Brybay in August 1987. I also find that Klyque was entitled to immediate possession of the remaining Klyque Equipment leased by it from AGC.

Mr McCorkell described a trommel as a cylindrical tube driven by a chain drive or (as in this case) a tandem truck differential gearing powered by a 25 horsepower electric motor. He said that without the drive mechanism the object is not a trommel but only part of a trommel. In his 35 years experience of buying and selling trommels he had not purchased a trommel without the drive mechanism.
Esanda's other expert was Mr Terry Brittliffe. He had spent all his working life in the mining industry in Australia. From 1971 he was involved in technical, operational and corporate management roles with public companies and in professional consultancy and proprietorial positions on his own behalf. His consultancy work was in the general field of operational management in gold, mineral sands, iron ore and other minerals. He has been a project manager of a gold production operation near Kalgoorlie since 1996. As part of his consultancy work he assisted with the Australia wide disposal and acquisition of new and used items of processing plant and equipment. He and his partners formed an auctioneering and equipment brokerage company in 1993.
His brief was quite different to that given to the plaintiffs' experts. His instructions were to provide an estimate of the cost to acquire and replace on site those items of equipment removed from the Cashman Mine Site by Esanda in March 1988.
He worked on the assumption that the only equipment removed was that listed in the equipment list prepared by Kenwick Motors and used the second hand values verified by Mr McCorkell in his evidence. His evidence of the items removed and the cost to replace them was as follows:

1.

Rolls Royce powered Stamford 80KVA gen set

$18,000

2.

6 x 4 vibrating screen

$6,000

3.

14" vibrating jig

$3,000

4.

16" vibrating jig (which he assumed was what he described as the rock jig or coarse ore jig at the front of the trommel and sitting on the walkway)

$3,000

5.

12" vibrating jig

$2,500

6.

Inverell vibrating jigs

$7,000

7.

Electric powered roller type elevators (he assumed that was a reference to the conveyors for which he has allowed for three)

$15,000

8.

Electric powered elevator feeder bin (which he took to be the feeder to the receival bin)

$10,000

9.

Set of twin Ajax 3" diesel powered water recover pumps

$1,000

10.

Rushton Hornsby diesel powered crushing plant

$18,000

11.

Type ore bin (which he understood to be a reference to the tails sump otherwise called the slurry bucket)

$3,000

12.

Hard standing West Crane ore bin fitted with ore grizzly (which he took to be the receival bin left on site which he included in the price of the elevator feeder referred to in 8 above)

13.

Electric powered rotating ore screening plant (which he understood to be the trommel)

$15,000

Total

$101,500

He then allowed a further $101,500 for transport and re‑installation of all of those items. He estimated the transport cost based on tonnage and the number of truckloads required to get the items in the Kenwick Motors' equipment list to site. He allocated a figure of $30,000 which he described as conservative. The balance of approximately $70,000 was for contract labour to install and undertake minor adjustments and repairs to the second-hand equipment.
Thus, the total for the purchase, transport and installation of the equipment on the Kenwick Motors list is $203,000. That list includes items owned by Esanda valued at $61,000. On the basis that the transport and installation costs would not be pro rated, he allocated the sum of $41,000 for the transport and installation of the Esanda Equipment. Thus the balance for the purchase, transport and installation of the second‑hand non Esanda Equipment in the list is $101,000.
Mr Brittliffe allocated proportionately less for transport and installation for the Esanda Equipment than the non Esanda Equipment because of the size and essentially discreet nature of the Esanda structures, which he said reduced transport and installation costs. However, some of his provision for installation costs is for installing the non Esanda Equipment to the Esanda Equipment.
It was Mr Brittliffe's evidence that the plant and equipment in Mr McCorkell's list was reasonably available in the second-hand market at the relevant times. As to the logistics of purchasing a second‑hand plant, he gave evidence he had built a plant that was not dissimilar to the Cashman plant about 18 months previously and he was able to access the plant and equipment from two sources in Western Australia, one of whom was Mr McCorkell. He located all of the equipment he wanted with three phone calls. He accepted that the equipment at the Cashman Mine Site had been refurbished and was in quite good condition but in engineering terms was at the low end of the scale of operations. He confirmed from the repossession photos taken by Mr Briant, that the construction of the gravity treatment plant was incomplete.

Valuation - the Relevant Facts and Principles

Before addressing matters relating to the correct valuation approach, it is necessary to identify and determine the relevant facts. In the circumstances, it is appropriate to make findings of fact that would be necessary if, contrary to my finding, Brybay was in possession or entitled to immediate possession of the converted Balance Equipment in addition to the Klyque Equipment.
I have already made a finding as to the equipment wrongfully removed from the Cashman Mine Site by Esanda. In summary, Esanda wrongfully removed the Klyque Equipment and some of the Balance Equipment. I am satisfied, on the balance of probabilities, that the Klyque Equipment was new, not second hand. Mr Frean's evidence, which I accept, is that the steel for the plant framework, which I infer covers the structural supports, platforming and stairs, was second hand. Further, so much of the Balance Equipment as is identified in the Cashman brochure was used equipment. Of the Balance Equipment that I have found was wrongly removed by Esanda ("converted Balance Equipment"), all except the launders are referred to in the Cashman brochure. As Mr Dickson, and the other experts identified the launders as part of the steel on site, I infer the launders were also made from second hand steel.
I accept Mr Brittliffe's description of the gravity treatment plant as being, in engineering terms, at the low end of the scale of operations. Mr Atkinson's uncontradicted evidence was that after a trip to the Cashman mine site in September 1986 Mr Dickson provided a quote to build the plant but the Stringer group decided to allow Mr Frean to organise it because they were of the view it would be cheaper. As an example, the 42‑inch jigs were manufactured in Perth for $7,500 each. That compares with Mr Dickson's allowance in his valuation of $15,200 for each 42‑inch jig.
Work on the construction of the gravity treatment plant at the Cashman Mine Site ceased in August 1987 because of lack of funds. At that stage, the construction of the gravity treatment plant was not quite complete and it had not been commissioned. The gravity treatment plant constructed at the Cashman Mine Site was not a mobile plant.
A provisional liquidator of Brybay was appointed in November 1987. The provisional liquidator did not take possession of the Tenements or the plant and equipment or operate the plant and equipment at any time. He had no funds to do so and was uncertain as to who owned it. By February 1988, Mr Stringer was of the opinion that the Cashman mine was not viable for his group but may have some value to a larger organisation.
After the Esanda equipment had been lawfully removed from the gravity treatment plant in March 1988, Brybay would have been left with a partial gravity treatment plant incapable of achieving its purpose of treating ore to recover gold.
No one associated with Brybay or the plaintiffs inspected the site to identify what equipment had been removed by Esanda or took any steps to replace that equipment or reinstate the gravity treatment plant.
Brybay did not have the means and did not itself intend to use any of the plant and equipment on the Cashman Mine Site at any time after November 1987. Further, Brybay had no proven proprietary interest in the Tenements.
It follows from my factual findings, that Mr Dickson's valuation methodology of adopting the cost to design, supply, transport, install and commission a 100 tonne per hour plant on a greenfields site at Cashman has no application. Even if Esanda had converted all of the plant and equipment comprising the gravity treatment and leaching plant, I accept Mr Brittliffe's evidence that items 1, 2, 3 and part of 6 of the capital cost components identified by Mr Dickson in his 1992 Report would not apply where an existing plant was being replaced.
In addition, Brybay would be further over compensated on Mr Dickson's approach because he includes the cost to manufacture and supply new items of equipment, including equipment of the type lawfully repossessed by Esanda, and deducts the value of the actual, mostly second hand home made Esanda equipment.
A central question flowing from the factual findings is whether Brybay would be entitled to the cost of transport, installation and commissioning of the Klyque Equipment and converted Balance Equipment. Based on the finding that the gravity treatment plant was incomplete and had not been commissioned, the plaintiffs would not be entitled to commissioning costs. The position in relation to the transport and installation costs is not so obvious.
Brybay is entitled to be put back to the position it was in before the conversion of the Klyque Equipment and the converted Balance Equipment. Prima facie, that is the market value of the replacement cost of the converted plant and equipment. However, the replacement cost of what Brybay had, that is, a partial gravity treatment plant, is greater than the sum of the value of its constituent converted parts. In particular, it would include the transport and installation costs. If Brybay had intended to use the gravity treatment plant on the Cashman Mine Site there would be no doubt that it would be entitled to the transport and installation costs: J & E Hall Ltd v Barclay [1937] 3 All ER 620; Jones v Port of London Authority [1954] 1 Lloyd's Rep 489.
However, Brybay did not have the means or the intention to use the partial gravity treatment plant or make it whole. In those circumstances, the measure of damages which would put Brybay in the position it was in at the time of the conversion of the relevant equipment would be the sale value of the partial gravity treatment plant not its replacement cost.
No expert was questioned or gave evidence concerning whether a partial gravity treatment plant (comprising the converted plant and equipment together with what was left behind to which Brybay was entitled) on site in the Murchison goldfields was of greater value than the sum of the value of its constituent parts. In this case there is no suggestion that the registered owners of the Tenements on which the partial gravity treatment plant stood wished to use it. Mr Frean's evidence concerning Columbia's intention was to the effect that Columbia had no need of a gravity treatment plant on the Cashman Mine Site because Esmeralda had its own treatment facility on its adjacent tenements. Thus, the sale value would reflect the need for the partial gravity plant to be dismantled and removed from the Cashman Mine Site. Even if the location of the plant and equipment in the Murchison goldfields and the dismantling of the partial gravity treatment plant with a view to its efficient reconstruction would increase the market value of the partial gravity treatment plant, a matter on which there is no evidence, there would be no basis for inferring full transport and installation cost recovery in the sale value.
Although the matter is not without its difficulties, I am not persuaded on the basis of the expert evidence adduced at trial that I can or should find that a partial gravity treatment plant installed at the Cashman Mine Site is of greater value to Brybay than the sum of the value of its constituent parts. Accordingly, if, contrary to my finding, Brybay was in possession or entitled to possession of the Klyque Equipment and the converted Balance Equipment, I conclude that it is not entitled to the cost of transporting the plant and equipment and installing it on the Cashman Mine Site. The conclusion is even more compelling if, as I have found, Brybay and Klyque are only entitled to damages for conversion in relation to the Klyque Equipment.
If I am wrong and transport and installation costs should be included, I conclude that it would be appropriate to use the weight and cost allocations in Table 2 of Mr Roxburgh's report for each item of equipment that I have found was converted. Messrs Dickson and Brittliffe provide lump sum costs which I cannot reliably apportion to the converted equipment.
The next question is whether Brybay should be compensated on the basis of new or used plant and equipment and if used, whether Mr Dickson's or Mr McCorkell's figures should apply.
Consistently with the principle of compensation for tort recovery, the market value should reflect the status (new or used) and condition of each item of equipment converted: Hoad v Scone Motors Pty Ltd [1977] 1 NSWLR 88.
I have concluded that Esanda wrongfully repossessed the Klyque Equipment as well as:
(a)structural supports, stairs and walkways connected with the crusher and vibrating screen;
(b)three conveyors (one of which was Esanda's and one of which is included in the Klyque Equipment);
(c)the slurry bucket;
(d)the single cell 12‑inch jig;
(e)the double cell 14‑inch jig;
(f)the bull or rock jig;
(g)two Ajax 4‑inch 4KS centrifugal pumps with Perkins motor 6345 90 hp industrial;
(h)Linatex tailings pump with 25 hp motor;
(i)the launders.
As previously discussed, the Balance Equipment pleaded in the statement of claim is different from that referred to in the particulars and the only valuation evidence adduced by the plaintiffs was based on the equipment identified in general terms in the particulars.
Thus, it is necessary to cross reference the converted plant and equipment with the description of the plant in Mr Dickson's March schedule. I have concluded that the Klyque Equipment was new. It is appropriate to use the actual costs to acquire the primary jigs ($15,000) and the generator ($7,666). Otherwise, I am content to adopt Mr Dickson's values in his March Schedule. Aside from Mr Roxburgh, there is no other evidence of the value of new items of plant and equipment. The Klyque Equipment, using Mr Dickson's description, is valued as follows:

Capital Plant	New
Conveyor 1 (Brybay)	$20,000
Scalping Screen (Brybay)	$16,000
Primary Jigs (Klyque)	$15,000
Generator (Klyque)	$ 7,666
Total	$58,666

The converted Balance Equipment as described in Mr Dickson's March schedule together with his and Mr McCorkell's used values are as follows:

Capital Plant

Dickson Used

Repair Costs

McCorkell

Conveyor 2

$3,500

$1,500

$5,000

Steelwork 1 (I have concluded that most of the general steel work was left on site except for the structural supports, stairs and walkways connected with the crusher and vibrating screen which I include in the next item)

n/a

n/a

Launders/supports and platforms

$35,000

$5,000

Secondary jig (which I take to be the bull jig)

$3,500

$2,000

$3,000

Tertiary jig (one 12 inch jig)

$4,000

$1,000

$1,250

Tails sump

$5,000

$3,000

Tails pump

$8,000

$2,000

$5,000

Water pumps

$5,000

$1,000

$64,000

$6,500

$23,250

Total

$70,500

$23,250

Mr Dickson's assessment of the value of used plant and equipment was based on advertised prices rather than actual sales. Further, he was likely to have less knowledge of the availability and price of used equipment in the marketplace in Western Australia. Finally, I am not satisfied he has adequately explained the changes in value of used plant and equipment in the three reports he prepared. I was left with the impression that there was an element of partisanship in his valuation evidence. I prefer the evidence of Mr McCorkell. However, no discount should be made from his provision for "launders/supports and platforms" because it includes some steelwork from the previous item.
If (contrary to my finding) Brybay is entitled to immediate possession of all of the Klyque Equipment and converted Balance Equipment, it would be entitled to damages of $81,916 ($58,666 + $23,250). For the Klyque Equipment alone the damages would be $58,666. However, Esanda says there should be deductions for payments made by it to the relevant finance companies. I will deal with that matter in due course.

Authority to Commence Proceedings

Esanda submitted in closing that the action by Brybay should be dismissed on the ground it was instituted without Brybay's authority. The action commenced in March 1990. At that time, Brybay was in liquidation. Mr Parbery was the liquidator.
Esanda called the liquidator and he gave evidence that he did not instruct or request or authorise anyone else to instruct solicitors Northmore Hale Davy and Leake (purportedly acting on behalf of Brybay) to commence these proceedings against Esanda. Further, he said he had never instructed the solicitors purportedly acting for Brybay in the proceedings.
When asked again in examination in chief whether he had requested or authorised anyone to instruct solicitors to commence or continue proceedings, the liquidator said:
"To the extent that there was a right given at the time that certain assets or rights were assigned to Mr Stringer and his associate Mr Atkinson, it may well have been that they assumed a certain right, but it certainly wasn't with my direct instructions."
The assignment referred to in his answer was the Brybay Assignment. At some stage the liquidator became aware of this action but could not recall when he became aware of it. He was unable to recall ever raising a complaint or objecting to the commencement or continuation of the proceedings by Brybay.
The plaintiffs rely on a letter dated 14 March 1989, from the liquidator to the solicitors for Messrs Stringer, White and Atkinson as authorisation for Messrs Stringer, White and Atkinson to institute proceedings on behalf of Brybay and on the Brybay Assignment in November 1997.
In his letter of March 1989 the liquidator recorded the history of his involvement in the liquidation of Brybay and continued:
"In view of the problems in determining ownership of the plant and equipment and the mining tenements, I have agreed, in principle with Mr. Stringer, to agree to forego the rights [Brybay] may have over the plant and equipment and the mining tenements, for the sum of $10,000. I have also agreed to assist him, subject to my costs being covered in the litigation he and his co‑directors may take against Esanda …
I have been advised by my solicitors that this agreement should be ratified by the creditors of [Brybay] which, I believe, will be a mere formality …
I trust that the abovementioned information defines the position of [Brybay] and I confirm my assistance in your efforts to recover funds from Esanda … on behalf of Messrs. Stringer White and Atkinson."
There was no response to the liquidator's letter. However, Recital C of the Brybay Assignment records that in 1990 the Assignor (Brybay) purported to assign to the Assignees (Messrs Stringer and Atkinson) all of its causes of action in the Proceedings (defined as this action).
Recital D provides that: "For the avoidance of doubt, the Assignor has agreed to assign to the Assignee absolutely the Assignor's causes of action against Esanda in the Proceedings".

Clause 2.1 of the Brybay Assignment materially provides:
"In consideration of the payment by the Assignees to the Assignor of the Purchase Price receipt of which the Assignor acknowledges by its execution hereof, the Assignor assigns all of its causes of action in the Proceedings to the Assignees with effect from the Assignment Date."
Purchase Price is defined to mean the sum of $10,000 and the Assignment Date means the 20th of October 1997. The sum of $10,000 was paid to the liquidator at some stage in connection with the Brybay assignment.
Clause 3 of the Brybay Assignment contains an indemnity clause to keep Brybay indemnified from and against liability which Brybay "has now incurred or may incur arising out of the Proceedings (including any costs awarded against [Brybay] in the Proceedings)".
At the time of commencement of the action the Companies (Western Australia) Code applied. The Companies Code expressly dealt with the effect of the appointment of a liquidator on the powers of the directors of a company where the winding up was either a member's voluntary winding up or a creditor's voluntary winding up: (ss 396(2) and 400(4)). However, the Companies Code was silent on the position of directors in the event of a winding up order made by a court. It has been held, in my opinion correctly, that notwithstanding the absence of any express provision in the Companies Code, the position was that upon the making of a winding up order by the court, the powers of directors of a company ceased: Re Country Traders Distributors Ltd [1974] 2 NSWLR 135 at 138; Ford H A J, "Principles of Company Law", 4th ed, Butterworths, Sydney, 1986.
I am not satisfied that the liquidator had entered into an agreement in 1989 to assign Brybay's claims against Esanda to Messrs Stringer and Atkinson for the following reasons. The liquidator's March 1989 letter refers to an agreement in principle with Mr Stringer and to the need for "ratification" by Brybay's creditors. There was no response from the plaintiffs or their solicitors to the liquidator's March 1989 letter and the Brybay Assignment refers only to a purported assignment in 1990. Further, the question of Brybay commencing proceedings against Esanda is not dealt with expressly in the March 1989 letter. The terms of the March letter contemplate litigation by Mr Stringer and his co‑directors against Esanda. In the event of a legal assignment of Brybay's rights prior to the commencement of any action, Brybay would not be a necessary party to the action.
The plaintiffs say that the Brybay Assignment "formalised the process of [Brybay] assigning those rights to Messrs Stringer and Atkinson". Esanda says the concluding words of the assignment clause in the Brybay Assignment rule out the possibility that by entering into the deed of assignment the liquidator was ratifying any earlier act by Messrs Stinger and Atkinson that resulted in the proceedings being commenced and maintained. I do not accept that proposition. The concluding words of the assignment clause ("with effect from the assignment date") simply identify the date of the assignment to avoid any ambiguity occasioned by the purported assignment in 1990.
By his execution of the Brybay Assignment the liquidator impliedly ratified the commencement and the continuation of the action by Brybay. In particular, the Brybay Assignment acknowledges the existence of the action, assigns the causes of action which would (or may) be of no value in 1997 without the action because limitation issues would clearly arise and provides for Brybay to be indemnified for costs which Brybay "has now incurred or may incur arising out of the Proceedings" including any costs awarded against Brybay in the Proceedings. If the action was not retrospectively authorised there would be no need for such indemnification.
There are divergent lines of authority on the correct procedural approach for raising a question of lack of authority to commence proceedings. There is some support for the view that questions of authority to institute an action should be raised by separate motion (Richmond v Branson & Son [1914] 1 Ch 968; Russian Commercial & Industrial Bank v Comptoir d'Escompte de Mulhouse [1925] AC 112). On the other hand it has been said that if the court has notice that an action was instituted without authority it should refuse relief: Daimler Company Ltd v Continental Tyre & Rubber Co (Great Britain) Ltd [1916] 2 AC 307. However, in view of my conclusion, it is unnecessary to resolve this question.
The plaintiffs also say Esanda is estopped by its conduct from raising any question of authority and rely on Russian Commercial&d Industrial Bank (supra). It appears from their submissions that the plaintiffs rely solely on the defendants failure to raise this matter at an earlier stage. I accept that questions of estoppel and waiver may arise in this situation in the same way that they were identified and applied by the High Court in the Commonwealthv Verwayen (1990) 170 CLR 394. However, mere delay without more cannot give rise to an estoppel or a waiver. Accordingly, if contrary to my finding Brybay has commenced and continued the action without authority, I would not uphold the plaintiffs' estoppel submission.

Whether Messrs Stringer and Atkinson have a Maintainable Cause of Action

On the pleadings as they stood at trial, Messrs Stringer and Atkinson's claim for relief relies on the Brybay Assignment. It was submitted that because the proceedings were instituted without authority from Brybay it had no "causes of action in the Proceedings" and therefore nothing was assigned to Messrs Stringer and Atkinson. This submission must fail in light of my finding that the liquidator impliedly ratified the commencement and continuation of the action by Brybay.
Esanda relies on an additional proposition to the effect that Messrs Stringer and Atkinson's right or interest was acquired pursuant to the Brybay Assignment in November 1997 and as such cannot be maintained in the action which commenced in 1990. Reliance is placed on Water Authority of Western Australia v AIL Holdings Pty Ltd (No 2) (1992) 10 WAR 233 at 235 in which it was held that it is not possible to amend a writ or pleadings to include a cause of action which arose after the date of the writ. It is unnecessary to determine the correctness of this proposition because it has no application in the current circumstances.
Messrs Stringer and Atkinson do not by the amendment which pleads the assignment plead a new cause of action. What in effect occurs when the assignees, Messrs Stringer and Atkinson, rely on the assignment, is that they are substituted for Brybay's claims. Their claim is derivative. They are in the same position and in no better or worse position from a limitation perspective than Brybay: Industrie Chimiche Italia Centrale v Alexander Tsaviliris & Sons Maritime Co (The Choko Star) [1996] 1 All ER 114 at 122‑123; see also Brandsma & Crockett Pty Ltd & Anor v Heindal Pty Ltd & Ors [2002] WASCA 96.

Application to Re-open

Just prior to the end of the trial, the plaintiffs applied to re‑open their case to tender certificates under the Corporations Act 2001 certifying that no company by the name Western Shore Mining Pty Ltd or Western Shaw Mining Pty Ltd was registered under the Corporations Act and to call a Mr M L Wade.
Mr Hall gave evidence of an offer signed by M L Wade on a white pro forma offer form used by Esanda which "specifies the equipment which he inspected at Kenwick's yard and offered $55,000".
I was informed that the proposed evidence of Mr Wade would be to the effect that the signature on the offer form may or may not be his but that he never made an offer to Esanda to purchase mining equipment. Counsel for the plaintiffs submitted that Mr Wade's evidence was relevant to the issue of the equipment taken from the Cashman Mine Site by Esanda and to Mr Nairn's credit. Some of the handwriting on the offer was said to be Mr Nairn's.
I gave the plaintiffs leave to tender the certificates under the Corporations Act and refused leave to re‑open to call Mr Wade. These are my reasons for so doing. Esanda objected to the re‑opening on the ground that the evidence was inadmissible collateral evidence and even if technically admissible, leave should be refused on discretionary grounds.
A party must ordinarily adduce all his or her evidence when presenting his or her case, but there is a discretion to allow further evidence to be called even where it should have been adduced in the first place if the Judge considers that it is necessary to do so in the interests of justice: Singh v Crafter, unreported; FCt SCt of WA; Library No 8434; 15 August 1990.
If the proposed evidence relates to inadmissible collateral matters, the application to re‑open must be refused.
As a general rule, evidence concerning collateral facts – facts that are not facts in issue or facts relevant to facts in issue – is not admissible. Thus, as a general rule a cross‑examiner is bound by the answer to a question that goes only to credit in the sense that the cross‑examiner will not be permitted to lead evidence to contradict the answer of the witness: Goldsmith v Sandilands [2002] HCA 31 at [3]; (2002) 190 ALR 370 at 372.
A fact is relevant to another fact when it is so related to that fact that, according to the ordinary course of events, either by itself or in connection with other facts, it proves or makes probable the past, present or future existence or non‑existence of the other facts. Whether a fact is a fact in issue depends upon the pleadings and particulars of each party's case (Goldsmith v Sandilands (supra) at [31]; at 377). Questions of degree arise in determining whether evidence goes only to credit or is otherwise relevant to a fact in issue.
In this case Esanda pleaded that it arranged for the sale of the Klyque Equipment and the Ajax pumps and paid the proceeds from the sale of the Klyque Equipment to the lessors AGC and Auckland Finance. It was Esanda's case that the Klyque Equipment (and other equipment) had been sold to Western Shore Mining for $62,000. In my assessment, the existence or otherwise of the purchaser was not a collateral matter. As the issue had been pursued in cross‑examination with Mr Nairn and he raised the prospect that the purchaser's name had been misspelt, I granted leave to the plaintiffs to re‑open to tender the Corporations Act certificates.
The subject matter of Mr Wade's proposed evidence was not itself a fact in issue but was, in my view, relevant to a fact in issue, being whether there was a sale to Western Shore. Senior counsel for the plaintiffs submitted the evidence was relevant to the issue of what items of plant and equipment Esanda removed from the Cashman Mine Site and to Mr Nairn's credibility. In my assessment the evidence is too remote from the issue of the plant and equipment taken by Esanda and is collateral for that purpose and in relation to Mr Nairn's credibility.
However, regardless of the correct characterisation of the proposed evidence, it was of very limited material value and the plaintiffs had had more than adequate opportunities to investigate and raise this matter which was not adverted to in either the opening in December 2001 or at the commencement of the adjourned hearing in July 2002. Further, the relevant documents had been discovered and Mr Hall's statement had been exchanged before the commencement of the trial in December 2001. Finally, Esanda would need to be given the opportunity to properly investigate the circumstances surrounding the document which related to events some 14 years ago and involved Mr Hall who had since died. For these reasons in the exercise of my discretion I refused leave to re‑open to call Mr Wade.

Nature and Extent of Relief

I have concluded that Brybay was entitled to immediate possession and thus damages for conversion of the Klyque Equipment leased from AGC, being conveyor 1 and the scalping screen which I have found are together valued at $36,000. Brybay's rights were assigned to Messrs Stringer and Atkinson.
Klyque was entitled to immediate possession of and thus damages for conversion of the balance of the Klyque Equipment being the primary jigs and the generator which I have found are together valued at $22,666.
Esanda submits that the amounts it paid to AGC and Auckland Finance should be deducted from the damages. The uncontradicted evidence is that as a result of the sale of the Klyque Equipment, AGC received from Esanda in May 1990 the sum of $10,800 and Auckland Finance received from Esanda in August 1990 the sum of $3,800.
The AGC lease terms and conditions, said to be on the back of the cover page, are not in evidence. The terms and conditions of the Auckland Finance leases are barely readable. No party relied on the terms of the leases in connection with this issue.
Klyque's obligations under the AGC leases were guaranteed by Messrs Frean, Stringer, White and Atkinson. Klyque's obligations under the Auckland Finance leases were guaranteed by Messrs Stringer and Atkinson. There is no evidence that as at May and August 1990 Klyque and/or Brybay were indebted or alternatively liable in damages to the finance companies.
Further, if Klyque or Brybay were at that time liable in damages to the lessors, I see no reason why a payment that reduces a lessor's damages claim against a lessee, which claim arises out of or is connected with the conversion of the leased equipment, should necessarily or invariably reduce the damages payable to the lessee by the converter of the goods.
Esanda must prove not only that the payment is sufficiently connected with the conversion it must also prove that Klyque and Brybay benefited by the payment: B Liggett (Liverpool) Ltd v Barclays Bank Ltd [1928] 1 KB 48. The fact of a payment without more is insufficient. On the available evidence, I am not satisfied that the payments made by Esanda benefited Brybay or Klyque in a way that justifies a reduction in the damages for conversion otherwise payable.
Esanda also opposed Brybay and Klyque's claim for interest pursuant to s 32 of the Supreme Court Act 1935 (WA) from the date of the conversion to judgment. They claimed interest at the rate of 14 per cent per annum.
Esanda opposed the award of interest on the grounds that the plaintiffs unduly delayed the prosecution of the action and it did not have the use of the money obtained from the sale of the equipment.
The awarding of interest under s 32 of the Supreme Court Act 1935 (WA) is discretionary. It can be inferred from the time between commencement of the action and trial that the plaintiffs have unduly delayed the prosecution of this action. However, there is no suggestion that Esanda has suffered financial detriment as a result of the delay. Indeed, the lapse of time between the accrual of the cause of action and payment means Esanda has not had to pay the damages and has had the use of that money over the period. Further, Esanda had opportunities to use the court procedures to prevent undue delay once proceedings were instituted. The awarding of interest is consistent with the principle of compensating the plaintiffs for Esanda's wrongful conduct. In the circumstances I am satisfied that it is appropriate to award interest from the date on which the Klyque Equipment was removed from the Cashman Mine Site. However, the rate of interest should be that fixed from time to time under s 142 of the Supreme Court Act 1935 (WA) in relation to judgment debts.
In conclusion, I propose to order that Esanda pay to Klyque the sum of $22,666 and to Messrs Stringer and Atkinson the sum of $36,000 and interest thereon from 14 March 1988 until judgment at the rate fixed from time to time in relation to judgment debts.

"Hough 560 Loader with new 400 hp engine	Conveyors to Trommell [sic]
Caterpillar D7F Dozer	Spares, belts etc
House situated GML 51/2820 fully furnished	Ajax 4 inch 4KS centrifugal pumps x 2
Trommell [sic]	Generator Set 80 KVA Stamford Alternator
Bin with variable feed conveyor	Fuel tanks 4500 litre and 2000 litre
Russell 50 TPH twin rotor cement crusher	Submersible pumps Mono E30‑E20
Inverell jigs	Switchboard and cable
Secondary 12 inch clean up jig	Poly pipe 780M 110 mm 1400M 50 mm
Concentrates jig (Russell)	Seatainers (store rooms) x 2
Almalgum barrell [sic]	6 tonne Overhead gantry block and tackle
Galligher slurry pump	Store room parts, filters, fittings etc
Linitex 4 inch slurry pump with 50 hp motor	Valiant utilities 2 x CL 1978 model
Linitex spares, shaft assemblies, impellers etc	Service equipment: welders, compressors, generator set, power grease etc
Conveyors to crusher"

1.	Rolls Royce powered Stamford 80KVA gen set	$18,000
2.	6 x 4 vibrating screen	$6,000
3.	14" vibrating jig	$3,000
4.	16" vibrating jig (which he assumed was what he described as the rock jig or coarse ore jig at the front of the trommel and sitting on the walkway)	$3,000
5.	12" vibrating jig	$2,500
6.	Inverell vibrating jigs	$7,000
7.	Electric powered roller type elevators (he assumed that was a reference to the conveyors for which he has allowed for three)	$15,000
8.	Electric powered elevator feeder bin (which he took to be the feeder to the receival bin)	$10,000
9.	Set of twin Ajax 3" diesel powered water recover pumps	$1,000
10.	Rushton Hornsby diesel powered crushing plant	$18,000
11.	Type ore bin (which he understood to be a reference to the tails sump otherwise called the slurry bucket)	$3,000
12.	Hard standing West Crane ore bin fitted with ore grizzly (which he took to be the receival bin left on site which he included in the price of the elevator feeder referred to in 8 above)
13.	Electric powered rotating ore screening plant (which he understood to be the trommel)	$15,000
Total	$101,500

Capital Plant	Dickson Used	Repair Costs	McCorkell
Conveyor 2	$3,500	$1,500	$5,000
Steelwork 1 (I have concluded that most of the general steel work was left on site except for the structural supports, stairs and walkways connected with the crusher and vibrating screen which I include in the next item)	n/a	n/a
Launders/supports and platforms	$35,000	$5,000
Secondary jig (which I take to be the bull jig)	$3,500	$2,000	$3,000
Tertiary jig (one 12 inch jig)	$4,000	$1,000	$1,250
Tails sump	$5,000	$3,000
Tails pump	$8,000	$2,000	$5,000
Water pumps	$5,000	$1,000
$64,000	$6,500	$23,250
Total	$70,500	$23,250