Cirillo v Citicorp Australia Ltd

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SUPREME COURT OF SOUTH AUSTRALIA

(Full Court: Civil)

CIRILLO & ANOTHER v CITICORP AUSTRALIA LTD AND OTHERS

Judgment of The Full Court

(The Honourable Justice Perry, The Honourable Justice Bleby and The Honourable Justice Gray)

17 September 2004

PERSONAL PROPERTY - OWNERSHIP AND POSSESSION - EVIDENCE OF OWNERSHIP

EQUITY - EQUITABLE REMEDIES - INJUNCTIONS - INTERLOCUTORY INJUNCTIONS - UNDERTAKING AS TO DAMAGES

BANKRUPTCY - TRUSTEES - POSITION AND DUTIES GENERALLY

Appeal against decision of trial judge dismissing a claim for damages for breach of undertaking - appellant asserted ownership of an item of earthmoving equipment and sought to enforce undertaking as to damages given by the plaintiffs as consequence of interloctory injunction preventing the appellant from using or dealing in any way with the equipment with the equipment - equipment deteriorated due to non-use and said to be beyond economic repair - loss of income from equipment - whether injunction improperly obtained - whether appellant had standing to bring application to enforce undertaking as to damages - whether appellant estopped from asserting ownership of the item of earthmoving equipment - consideration of scheme of Bankruptcy Act 1966 (Cth) - consideration of property rights vested in the Official Trustee - appeal dismissed.

Supreme Court Rules 1988 (SA) R52; Bankruptcy Act 1966 (Cth) ss 5, 58, 116, 134(1), referred to.
B.C. Interiors Vegetable Marketing Bd v Kamloops Produce Co (1938) 2 DLR 797; Bird Constructions Co Ltd v Paterson (1960) 23 DLR (2nd) 182; Niord Pty Ltd v Adelaide Petroleum NL (1990) 54 SASR 87; Smith v Day (1882) 21 Ch D 421; Ex Parte Hall, in re Wood (1883) 23 Ch D 644; Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1979-81) 146 CLR 249; Cheltenham & Gloucester Building Society v Ricketts [1993] 1 WLR 1545; Balkanbank and Taher [1994] 4 All ER 239; Norman v Federal Commissioner of Taxation (1963) 109 CLR 9; In re Campbell (a bankrupt) [1997] Ch D 17; In re Buckle (1969) 15 FLR 460 at 466; Re Edelsten (1988) 84 ALR 547; In Re Rules Settlement [1915] VLR 670; Re Movitor Pty Ltd (1996) 64 FCR 380; Receiver in Bankruptcy v Schultz (1990) 170 CLR 306; Re Huggins (1882) 21 Ch D 85; Hollinshead v Hazelton [1916] 1 AC 428; Cotterill v Bank of Singapore (1995) 37 NSWLR 238; Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306; Pridmore v Magenta NominLees Pty Ltd (1999) 161 ALR 458; Federal Commissioner of Taxation v Official Receiver (1956) 95 CLR 300; Re an Application by Marly Laboratory Pty Ltd [1952] 1 All ER 1057; Jones v Skelton (1966) 9 FLR 318; Giumelli and Another v Giumelli (1998) 196 CLR 101; Glenmont Investments v O'Loughlin (No 2) (1999) 79 SASR 185 at 234, considered.

CIRILLO & ANOTHER v CITICORP AUSTRALIA LTD AND OTHERS
[2004] SASC 293

Full Court:  Perry, Bleby and Gray JJ

  1. PERRY J.             I have had the…

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Details
Case
[2004] SASC 293
Decision Date

CaseChat Overview and Summary

In this case, the appellant, Cirillo, sought damages for breach of an undertaking given by the plaintiffs, Citicorp Australia Ltd, in the context of an interlocutory injunction. The injunction had prevented Cirillo from using or dealing with a piece of earthmoving equipment, which subsequently deteriorated and became beyond economic repair. Cirillo claimed that the loss of income from the equipment was a result of the injunction improperly being obtained. The primary issue before the court was whether Cirillo had the standing to bring an application to enforce the undertaking as to damages, given that the property rights in the equipment were vested in the Official Trustee as per the scheme of the Bankruptcy Act 1966 (Cth).

The court found that Cirillo did not have standing to bring the application to enforce the undertaking as to damages. The reasoning of the court was that the equity which founded the relief obtained was based on an assumption of future ownership of the property induced by representations, which did not apply in this case. The court further held that no unconscionable conduct was found on the part of Citicorp, and therefore, the claim for damages based on breach of the undertaking was unfounded. The court also considered that the property rights were vested in the Official Trustee, as per the Bankruptcy Act, and thus, Cirillo’s claim was further weakened.

The appeal was dismissed, and no orders were made in favour of Cirillo. The decision underscores the importance of standing and the proper application of equitable principles and statutory provisions in such disputes.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

PERRY J
These conclusions were apposite. Also relevant are the observations of Gleeson CJ, McHugh, Gummow and Callinan JJ in Giumelli and Another v Giumelli:[23]In these cases, the equity which founded the relief obtained was found in an assumption as to the future acquisition of ownership of property which had been induced by representations upon which there had been detrimental reliance by the plaintiff. This is a well recognised variety of estoppel as understood in equity and may found relief which requires the taking of active steps by the defendant.There is no occasion in this appeal to consider whether the various doctrines and remedies in the field of estoppel are to be brought under what Mason CJ called "a single overarching doctrine" or what Deane J identified as a "general doctrine of estoppel by conduct" . These theses were advanced by their Honours in The Commonwealth v Verwayen but not accepted by Dawson J or McHugh J . Brennan J approached the subject on the footing that "equitable estoppel yields a remedy in order to prevent unconscionable conduct on the part of the party who, having made a promise to another who acts on it to his detriment, seeks to resile from the promise" . Subsequently, in the joint judgment of Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ in Australian Securities Commission v Marlborough Gold Mines Ltd , reference was made to "an equitable estoppel of the kind upheld in Verwayen". Nor does the present case itself turn upon what was identified by Mason CJ, Wilson and Deane JJ in Baumgartner v Baumgartner as: "the general equitable principle which restores to a party contributions which he or she has made to a joint endeavour which fails when the contributions have been made in circumstances in which it was not intended that the other party should enjoy them." There was a joint endeavour which included the parties to this litigation and others. This was in the form of a partnership, the affairs of which have given rise to other litigation. As will appear, the delay in resolving the partnership dispute does have a significance for the determination of the relief which the respondent should be granted with respect to the promised lot.In any event no unconscionable conduct was found by the judge on the part of Citicorp. There is no substance to this complaint.[23] (1998) 196 CLR 101Conclusion This appeal should be dismissed.

Ratio Decidendi

Legal Principle Established

Established by: PERRY J

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