Cirillo v Citicorp Australia Ltd - [2004] SASC 293

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

PERRY J. I have had the benefit of an opportunity to peruse the reasons for judgment of Gray J. He sets out the relevant circumstances leading up to the commencement of the proceedings in May 1985.
Following the discontinuance of the proceedings on 4 February 1993, Mr Cirillo claimed an order enforcing the undertaking as to damages which had been given by the respondents at the time they obtained the injunctions which restrained Mr Cirillo from dealing in any way with the Poclain. In advancing his claim, Mr Cirillo asserted[1] that by discontinuing the action, the respondents had admitted that “the injunctions … were wrongly granted or alternatively, wrongly asked for”.
[1] Further amended more explicit statement of claim dated 23 February 2001, par 13.
I agree with Gray J that the discontinuance of the action cannot be construed to have the effect of an admission in the terms asserted by Mr Cirillo. As Gray J points out, Citicorp Australia Ltd (“Citicorp”) maintained at all times that it was entitled to ownership and possession, and that Mr Cirillo had no claim.
It is clear on the evidence, which was accepted by the trial judge, that the reason why the action was discontinued was as explained to the court by the receiver and manager, Mr Heard. His evidence was to the effect that at the time the proceedings were discontinued, a judgment was formed by the receivers and managers that in all the circumstances there was no utility in further pursuing the claim.
Insofar as the two Canadian cases of B.C. Interiors Vegetable Marketing Bd v Kanloops Produce Co[2] and Bird Constructions Co Ltd v Paterson[3] are said to support a conclusion that the discontinuance should be treated as an admission that the respondents had no right or claim, I would not be prepared to follow them.
[2] (1938) 2 DLR 797.
[3] (1960) 23 DLR (2^nd) 182.
Insofar as Mr Cirillo maintained throughout that he was the legal and beneficial owner of the Poclain, the trial judge made express findings to the contrary which were clearly supported on the evidence.
In particular, he held that the evidence “… conclusively and overwhelmingly establishes that the legal and beneficial ownership” of the Poclain was vested in C.W. Constructions Pty Ltd (“CWC”) as at 1 July 1981.[4]
[4] Reasons for judgment, par [218].
He further held that he was “… compelled to the conclusion that Cirillo was not the legal of beneficial owner of the Poclain as at or subsequent to 18 April 1983” (the date upon which the debenture was executed by CWC in favour of Citicorp).[5]
[5] Ibid [217].
Those findings effectively put Mr Cirillo out of court in his claim for damages against the respondents.
Mr Cirillo attempted to maintain his claim on another footing, namely, that he had been in de facto possession of the Poclain throughout the relevant time, and that this gave him standing to recover damages from the respondents.
That submission reflects a misunderstanding as to the principle of law that in certain circumstances de facto possession is as good as legal title.
The principle is summarised in the following passage in Halsbury’s Laws of England:[6]
“The presumption of law is that the person who has de facto possession also has the property, and accordingly such possession is protected, whatever its origin, against all who cannot prove a superior title. This rule applies equally in criminal and civil matters. Thus, as against a stranger or a wrongdoer, a person in actual or apparent possession, but without the right to possession, has all the rights and remedies of a person entitled to and able to prove a present right to possession.” (footnotes omitted)
[6] 1995, 4^th edition (re-issue) Vol 35, par 1222, cited in Glenmont Investments v O’Loughlin (No 2) (1999) 79 SASR 185 at 234, par [228].
As the author of that passage states, the legal presumption must yield to a person who can prove a superior title.
Having regard to the trial judge’s findings to which I have referred, CWC was found to be the legal and beneficial owner of the Poclain as from 1 July 1981. By reason of the execution of the debenture by CWC on 18 April 1983, from that date onwards the Poclain was the subject of a charge in favour of Citicorp.
It follows that CWC and Citicorp were found to hold a title superior to that asserted by Mr Cirillo.
The discontinuance of the proceedings did not alter that position.
The appeal should be dismissed.
BLEBY J: I agree that the appeal should be dismissed. I agree with the reasons of Gray J.
GRAY J: This is an appeal from the determination at trial of a number of preliminary issues. The learned trial judge resolved those issues and then proceeded to dismiss a claim for damages for breach of an undertaking.
The History of the Action
On 2 May 1985, the plaintiffs, Citicorp Australia Limited, CW Constructions Pty Ltd (Receivers and Managers Appointed), John Harold Heard and Stephen Elliott Young instituted the within proceedings. Vincenzo Giovanni Cirillo and Cobweld Industries Pty Ltd are the defendants.
The endorsement to the writ asserted that an item of earthmoving equipment, the Poclain, was the property of CW Constructions Pty Ltd (CWC). CWC was incorporated by Mr Cirillo in 1981, under the name Vince Cirillo & Associates Pty Ltd. The company changed its name to CWC on 9 November 1981. CWC was wound up on 11 March 1985 and finally dissolved on 22 August 1990. Messrs Heard and Young were appointed receivers and managers of CWC on 14 January 1985, pursuant to the provisions of a debenture executed by it in favour of Citicorp. The plaintiffs claimed that the Poclain was the subject of a charge granted by CWC to Citicorp and that Citicorp was entitled to immediate possession of the Poclain.
The relief sought by CWC included an injunction restraining Mr Cirillo and Cobweld Industries from selling, assigning, letting, encumbering, using, damaging, disposing of, or dealing in any other manner with the Poclain, without the written consent of the plaintiffs. The plaintiffs sought an ex parte interim injunction against Mr Cirillo. They sought to injunct Mr Cirillo from parting with the possession or custody of the Poclain and also sought an order for the delivery of the Poclain to Messrs Heard and Young.
An ex parte interim injunction was granted on 3 May 1985. The plaintiffs gave the usual undertaking as to damages. The interim injunction remained in force until 10 May 1985 and was then continued until 24 May 1985.
Mr Cirillo entered an appearance to the writ on 10 May 1985. Cobweld Industries took no active part in the proceedings.
On 13 May 1985 the plaintiffs issued an inter partes summons seeking an interlocutory injunction against Mr Cirillo in terms similar to the interim injunction order then in force. On 24 May 1985 an interlocutory injunction was granted. The plaintiffs gave an undertaking as follows:
The plaintiffs by their solicitor continuing the undertaking to abide by any order the Court or a Judge may make as to damages in case the Court or a Judge should hereafter be of opinion that [Mr Cirillo] shall have sustained any by reason of this order which the plaintiffs ought to pay contained in the order made herein on the 10th day of May 1985.
Following the grant of the interlocutory injunction, the plaintiffs did not take any further steps to prosecute the action. The Poclain remained stored at premises at Hanson Road, Wingfield. Those premises were originally controlled by Mr Heard, following his appointment as a receiver and manager. In April 1985 the premises were sold by Citicorp as mortgagee in possession and were purchased by a business associate of Mr Cirillo. Mr Cirillo was allowed to enter into possession of the property by the new owner. Mr Cirillo has remained in occupancy ever since. However, the interlocutory injunction remained in force until 1993 and, by virtue of it, Mr Cirillo was forbidden to use or deal with the Poclain.
Shortly after Messrs Heard and Young were appointed as receivers and managers, Mr Cirillo brought proceedings in this court to challenge the validity of their appointment. That challenge was unsuccessful.
On 29 December 1990 Mr Cirillo served on Citicorp a notice of his intention to proceed in the action. On 3 May 1991 a summons was issued seeking an order that the claim against Mr Cirillo be dismissed for want of prosecution.
On 4 June 1992, Mr Cirillo was declared bankrupt on the petition of the Commissioner of Taxation. His personal estate was sequestrated and the Official Trustee in Bankruptcy appointed trustee.
The dismissal application came before a Master of this court on numerous occasions over a period of some 18 months. On 7 October 1992 the Master noted and ordered:
The plaintiffs seek to discontinue and will, if advised, do so in its discretion.
The question of costs and the question of the undertakings as to damages, however, remains alive. Having heard the plaintiff' s counsel, the Official Receiver and Mr Cirillo himself, I now order that, if by 31/1/93 Mr Cirillo is still bankrupt and the action has been discontinued, then there will be no order as to the costs of that discontinuance and the plaintiffs will automatically be released from the undertakings as to damages given earlier in these proceedings. If, however, at that date the action, having been discontinued, Mr Cirillo has been discharged from bankruptcy, then the question of costs of the discontinuance and the application for release from undertakings is reserved for further consideration upon the application of Mr Cirillo.
The identified contingencies did not occur. On 4 February 1993 the plaintiffs filed a notice of discontinuance of the proceedings.
CW Constructions Pty Ltd
CWC was brought into being for the purpose of carrying out major contract works at a site of what was to become the new ETSA North Power Station at Port Augusta. The tender for the work was submitted in the name of Vince Cirillo Pty Ltd, but foreshadowed the creation of the new entity, in the event of a successful tender. The tender was successful and CWC became the contractor and embarked on the contract works.
On 14 January 1985, Citicorp appointed Messrs Heard and Young as receivers and managers of CWC, pursuant to the provisions of a floating charge over CWC’s undertaking, property and assets. CWC had executed the relevant debenture on 18 April 1983, to secure certain advances. On 14 January 1985 CWC was in default under the terms of the debenture deed. The trial judge concluded:
… there can, in my view, be no question but that Citicorp was entitled to appoint a receiver and manager under the debenture by virtue of several other provisions of clause 4 of that document. Without attempting to be fully definitive in that regard, it is to be noted that CWC had failed to pay premiums in respect of its workers compensation insurance cover, as a consequence of which it could not lawfully continue to employ persons to execute its work, it had not honoured its obligations to supply financial statements to Citicorp on time, it was clearly unable to pay its debts as they fell due, and I consider that its liabilities did, in fact, exceed its assets at the time … .
Mr Cirillo’s claim pursuant to the undertaking as to damages
Mr Cirillo was unable to use the Poclain between 24 May 1985 and 4 February 1993 because of the terms of the injunction. The Poclain stood idle. It deteriorated mechanically to the point of becoming inoperable and beyond economic repair.
Mr Cirillo was discharged from bankruptcy on 20 June 1995. On 29 May 1996 the Official Trustee executed a deed of assignment to Mr Cirillo of any chose in action that the Official Trustee had, as trustee, against Citicorp and Messrs Heard and Young. Notice of that assignment was given to Citicorp.
Following the discontinuance of the action Mr Cirillo sought to enforce the undertaking given by Citicorp as a condition of the grant of the injunction in relation to the Poclain. Counsel for Mr Cirillo submitted that Citicorp had not been entitled to obtain or continue the injunction. It was claimed that the enforced disuse of the Poclain rendered it virtually valueless and that Mr Cirillo had not been able to avail himself of its considerable earning capacity for a lengthy period. It was said that Mr Cirillo had sustained substantial damages as a result of his inability to use the Poclain.
On 18 July 2000 a Master directed that five preliminary issues be heard and determined. Following certain agreements three issues remained for determination. The judge summarised those three issues as follows:
- Whether Mr Cirillo was the owner of the Poclain as at, or subsequent to, 8 April 1983, or was a person in actual and or apparent possession of the Poclain from and after 19 June 1976 and had all rights and remedies of a person entitled to a right of possession in respect of the equipment;
- Whether Mr Cirillo has standing to pursue his claim for relief against Citicorp, in light of the events which have occurred;
- Whether Mr Cirillo is estopped from asserting that he was the owner of the Poclain.
The trial judge concluded that Mr Cirillo was not the owner of and did not have rights of possession over the Poclain. The judge then reasoned:
Having concluded the issue of ownership and possession against Mr Cirillo in favour of Citicorp. The foregoing conclusion sounds the death knell of the application by Cirillo to enforce the undertakings as to damages. The other issues before me become academic.
Having reached this conclusion, the judge then proceeded to consider the other questions. The judge reached the conclusion that Mr Cirillo lacked standing. He held that the deed of assignment executed by the Official Trustee was ineffective to confer standing on Mr Cirillo to pursue the application. The judge also concluded that Mr Cirillo was estopped from asserting any interest in the Poclain.
On appeal, counsel for Mr Cirillo submitted that at the date of the granting of the injunction Mr Cirillo was in physical possession of the Poclain. It was contended that Mr Cirillo’s bare physical possession was interfered with by the injunction. This was said to be an adequate foundation for the purposes of giving rise to an entitlement to damages for breach of the undertaking. Counsel also challenged the trial judge’s conclusion that Mr Cirillo was not the owner and was not entitled to possession of the Poclain. It was said that the judge had made material errors of fact in reaching this conclusion.
Counsel then submitted that the trial judge’s conclusion that Mr Cirillo lacked standing was in error and should be set aside. Finally it was contended that the judge’s decision estopping Mr Cirillo from denying that CWC was the beneficial owner of the Poclain should be set aside.
Issues of Credit
Mr Cirillo
The trial judge considered that Mr Cirillo lacked credit as a witness. He reached the following conclusions:
Cirillo was in the witness box before me for many days. I had ample opportunity to assess him. He was, quite properly, the subject of a long and searching cross‑examination by [counsel]. I consider that, at the end of it, his credibility as to the topic of the Poclain (and, for that matter, generally) was in tatters.
…
In general, I find myself unable to accept Cirillo’s evidence where it conflicts with that of other witnesses, unless it is unequivocally confirmed by other acceptable evidence.
Specific findings adverse to Mr Cirillo’s credit included the following:
Cirillo sought to convey to me that he simply left it to those attending to the administrative aspects of operations to deal with finance and accounting matters - particularly arrangements made to raise finance, when required for the purposes of business operations. I am prepared to accept that, at times, Cirillo may well have not appreciated all of the fine detail of how financial transactions were treated, for accounting purposes, as between himself and his companies. On the other hand, I have little doubt that he appreciated, in general, what financial transactions were initiated to raise funds to finance operations and how repayment of such funds was secured.
…
Before parting from this general topic, it should be said that, in the course of his evidence, Cirillo sought to distance himself from the various schedules, often by categorically denying any prior knowledge of them, or of their content. [Counsel] effectively debunked such a thesis, by inviting his attention to contrary evidence such as affidavits sworn by him in 1996.
…
It is important to note that the buy out agreement between Heinrich and his associates and Cirillo scheduled plant said to be assets of CWC. The schedule in question was the same as that forming portion of [another exhibit]. It included an HC 300 Poclain then under hire purchase to Lombard. I utterly reject Cirillo’s evidence to the effect that he did not read the schedule at that time. His evidence as to this totally lacked conviction. He went on to reiterate that, in any event, the Poclain on hire under the Lombard agreement was not HC 300 serial number 77, but a 120 model. The Heinrich agreement constitutes a clear concession that the Poclain, the subject of the relevant hire purchase agreement, was certainly an asset of CWC.
…
Cirillo may not be well-educated, but he is no fool and has an excellent grasp of a great deal of detail of the relevant narrative history and events. He is obviously a shrewd business operator and his past ‘rags to riches’ history is not consistent with the situation of a man who allows important aspects of business negotiations and dealings to elude him. His evidence that he never took any detailed interest in the taxation depreciation schedules in respect of himself and his companies, or that he had only a vague knowledge of the detailed content of the ETSA tender, is quite contrary to my assessment of him and the evidence generally.
Moreover, in giving evidence, whenever he was painted into a corner and confronted by the cross examiner with situations not to his liking, or which he perceived as inimical to his case, he would suddenly profess a lack of memory on topics of which I am quite satisfied he must have had a good grasp. Simple illustrations of his lack of memory related to the circumstances in which Adelaide Excavators was wound up on 13 December 1982 and whether or not it had ever employed persons or traded - when it was actually wound up on the petition of the Commissioner of Taxation for failure to pay group tax; and his professed lack of memory of how various items came to be shown in depreciation schedules. This stood in strong contrast with his very detailed recollection of matters seen to be favourable to him.
…
I expressly reject Cirillo’s denials of knowledge of the consistent inclusion of the Poclain in schedules and documentation of CWC, as an asset of the company. I entertain no doubt that he well knew of this and acquiesced in it. I am satisfied that he assisted Wales, by the provision of plant information and values, to produce the various schedules and projections tendered in evidence, even given that other employees, such as the project manager Kimber, must also have been involved in the process.
Additionally, I conclude that, at times, he gave evidence which was deliberately misleading. Instances of this were the circumstances related to the non-payment of SGIC premiums and an alleged breach of undertaking by Citicorp to pay them; his evidence as to the trip to Hawaii with Heyes to acquire the HC 300 serial number 102 and the alleged payment, whilst there, of a $10,000 deposit on a firm contract price; and his evidence as to taking the Poclain up to Port Augusta and back for short periods. The lastmentioned evidence was quite inconsistent with the content of the minutes of relevant site meetings.
…
The inescapable conclusion is that Cirillo has deliberately changed his story over time to suit his own ends and does not present as a credible witness. Additionally, his present evidence is impossible to reconcile with the documentary material touching on represented lists of plant of CWC and financial tax records which he, personally, has adopted and also the whole course of dealing embarked on by him, whereby plant and equipment was made available to the various companies to deal with and pledge, as their own assets. One important consideration is that, except for a period of hire to Baulderstones in 1984, the Poclain was continuously engaged on CWC contracts from July 1981 onwards.
Counsel for Mr Cirillo did not challenge the judge’s general or specific findings concerning Mr Cirillo’s credit.

During the 1990s, at times when Mr Cirillo was concerned to demonstrate that CWC was solvent and that its assets substantially exceeded its liabilities, he swore affidavits in which the Poclain was treated as an asset of CWC. The affidavits were sworn in proceedings of the Federal Court of Australia. In this respect the trial judge concluded:
Such an assertion is not, of course, consistent with the entries in the taxation depreciation schedules, to which Cirillo was, in my view, plainly a party. Nor is it consistent with the content of various schedules prepared by Wales. These were, in my assessment, prepared either on the basis of information positively supplied by Cirillo, or with his approval, as a basis for seeking financial accommodation. (As to this see exhibits P120, P96, P97 and P98. In the affidavit exhibit P99 Cirillo, in effect, deposed (inter alia) that the Poclain was an asset of CWC at the time when the receivers and managers were appointed.) This documentation unequivocally and consistently showed the plant items in question as CWC assets. Virtually all of it proceeds on the implicit footing that the Poclain, the subject of the Lombard agreement, is the Poclain.
Mr Heinrich
John Heinrich, an equity investor and managing director of CWC, was responsible for its administration for a period during the years 1982 and 1983. The trial judge rejected the evidence of Mr Heinrich.
Overall, I consider that he was less than helpful and that his professed lack of memory of some of the relevant details of what occurred (albeit a long time ago) was a ploy to distance himself from an involvement in the litigation and to avoid having to give evidence adverse to Cirillo. I simply do not believe that he has no present memory of certain of the salient features of relevant transactions and I view his evidence with considerable reservation.
…
In giving evidence he was most uncooperative and, at times, truculent. Information had to be gouged out of him by persistent cross‑examination, based on available documentation.
…
He agreed that he was a party to a revaluation, on 1 December 1982, of the plant and equipment of CWC (virtually its only tangible asset), to operate retrospectively to the previous 30 June. He accepted that he also signed the CWC taxation return for the year ended 30 June 1982 with depreciation schedules based on it, but said that he did so without ever taking any steps to verify the nature and extent of plant held by CWC, or the ownership of and extent of equity in, it. This is simply unbelievable in relation to a person of his experience and, in my opinion, reflected a partisan approach designed to avoid prejudice to his friend Cirillo.
…
I am left with the distinct impression that Heinrich knew and remembered much more about the assets and financial position of CWC, from time to time, than he was prepared to divulge in court.
Counsel for Mr Cirillo did not challenge these findings.
Sybille Grieves
Mr Cirillo’s wife, Ms Grieves, was not called as a witness. The trial judge made the following observations:
It must firmly be borne in mind that, at the material times, Cirillo’s wife Sybille Grieves was responsible for key clerical and administrative functions in the office of CWC and, as from early 1983, actually became a director of that entity. As I understand the evidence, she personally maintained the prime financial and accounting records of CWC and was, on financial record aspects, the main day‑to‑day point of contact between CWC and its accountants. She is said to have set up and kept excellent financial records and clearly had a detailed grasp of the books, records and financial transactions entered into by the company and the administration of those transactions. I infer that this would have included tax related aspects, at least insofar as they impacted on the proper maintenance of books and records. She obviously had close interaction with the various financiers with which CWC was involved.
The clear implication is that she had an excellent grasp of relevant administrative and financial operations of CWC, to the point that, at least in some respects, she had a much better overview of the financial situation at many times than did Cirillo himself.
Ms Grieves was in court, obviously taking a close interest in the proceedings and from time to time taking notes, almost constantly throughout the trial.
As was pointed out, it is significant that she was not called as a witness to support the evidence given by Cirillo and no reason was advanced to justify her failure to enter the witness box. It is quite clear that she could have given important evidence bearing on many of the topics under discussion in these reasons. The inescapable implication is that, had she been called, she would not have been able to give evidence favourable to what was being advanced by Cirillo.
Her absence enables me, more readily, to draw the inferences related to the internal financial and other transactions pertaining to CWC and the dealings recorded in the various company documents referred to in these reasons that I, from time to time, express.
These conclusions were not challenged by counsel for Mr Cirillo.
Messrs Stefanac and Hocevar
Ladislav Hocevar was a plant operator employed by CWC to work on the ETSA site at Port Augusta, as a subcontractor. Micky Stefanac was another plant operator who worked for Cirillo and CWC, both prior to and during the period of the ETSA contract. During that contract they mainly operated Poclain Excavators.
Mr Stefanac and Mr Hocevar gave evidence as to a model of Poclain working at Port Augusta at relevant times. This evidence, if accepted, would provide some support to Mr Cirillo’s claim. However, this evidence conflicted with a body of other evidence. The trial judge found the evidence of Mr Stefan and Mr Hocevar to be unreliable:
On the one hand, both Hocevar and Stefanac presented as apparently straightforward and unequivocal witnesses, given that they were speaking of events many years ago. They did not patently project as being partisan, but their long association with Cirillo cannot be ignored.
Their evidence simply cannot be reconciled with the quite specific documented plant schedules or depreciation records which, as I have earlier indicated, make no reference to any GC 120 model Poclain (at least in respect of the financial years post 30 June 1976). I reiterate that those documents are totally devoid of any reference to a 120 model Poclain, of any type, post 30 June 1979.
I conclude, on the balance of probabilities, that, at the very least, Hocevar and Stefanac must be mistaken in their memories, as the documentary evidence to the contrary and/or lack of relevant documentary evidence seems to me to speak in overwhelming terms.
…
This being so, it seems to me that the clear accounting and tax records must be accorded much greater weight than the now very old, recently resurrected memories of Hocevar and Stefanac - even putting aside possible partisan attitudes on their part. Those records render it apparent that the only GCK 120 model Poclain had been disposed of by sale long before CWC embarked upon the ETSA contract. Furthermore, as Wales pointed out, he personally did not know the difference between a 120 and the 300 model. All references in the schedules prepared by him were to three HC 300 models. He said that he must have received that description from CWC officers, if not Cirillo himself. Had reference been made to a 120 model, he would have so described the relevant item of plant.
Other Evidence
The trial judge referred to, and made findings about, a body of evidence inconsistent with Mr Cirillo’s assertions of ownership and possession. That evidence included contemporaneous business records; the evidence of Bruce Wales of statements and admissions made to him by Mr Cirillo; and other admissions by Mr Cirillo in sworn affidavits in other proceedings. Mr Wales was a partner of Coopers & Lybrand engaged by CWC in 1983 as its financial adviser.
With respect to Mr Wales, the trial judge concluded:
Wales, who presented as an excellent and objective witness, confirmed that conclusion in his evidence concerning exhibit P127. He made the point that his amendments to Cirillo’s statement of personal net worth as at 1 March 1984 (set out at page 44 of Tender Book Volume 6) by excising an original reference to plant and machinery owned by Cirillo and including the value of all plant in the “breakup” value of his shares in CWC would not have been made, other than on the instructions and with the personal knowledge of Cirillo. Over time he prepared a series of statements on the footing that Cirillo had divested himself of all of his plant and machinery.
…
The oral evidence given by Wales concerning this is important. His notes comprising exhibit P396 specifically referred to Poclain No 174 as having been that encumbered to Esanda in about March 1984. The CWC plant summary prepared by Wales as of 1 September 1984 also shows all three Poclains as being its assets, one being encumbered to Esanda; the HC 300 L model being encumbered to Citicorp; and what must have been the Poclain as encumbered to Lombard.
Wales says that the summary was prepared by him from information which he would have obtained from Cirillo. When his attention was directed to the evidence of Cirillo at T834 that he was told that one Poclain was Cirillo’s, or that, when it was “paid out” it would revert to him, Wales denied that any such statements were made. I accept that denial. As he fairly pointed out, had this been said to him, he would not, in the documentation prepared by him, have treated the items as being an asset of CWC. I took him also to question the accuracy of the evidence of Cirillo concerning a meeting in May 1983, although he had no specific present memory of such a meeting.
Equally, a series of documents prepared by Wales in 1984, purporting to set out what is described as Cirillo’s net worth for the purposes of submissions to financial lending institutions, are completely devoid of any mention of residual (or any) plant owned by him. Cirillo attempted to distance himself from these, but it is an inescapable conclusion that the summaries were prepared on the basis of information supplied by Cirillo and with his approval.
In respect of the documentary evidence, the judge observed:
Such an assertion is not, of course, consistent with the entries in the taxation depreciation schedules, to which Cirillo was, in my view, plainly a party. Nor is it consistent with the content of various schedules prepared by Wales. These were, in my assessment, prepared either on the basis of information positively supplied by Cirillo, or with his approval, as a basis for seeking financial accommodation and deposed (inter alia) that the Poclain was an asset of CWC at the time when the receivers and managers were appointed.) This documentation unequivocally and consistently showed the plant items in question as CWC assets. Virtually all of it proceeds on the implicit footing that the Poclain, the subject of the Lombard agreement, is the Poclain.
Issues on Appeal
Mere possession
Counsel for Mr Cirillo prefaced this submission with the assertion that the trial judge found Mr Cirillo was in possession of the Poclain at the time the injunction was granted. Counsel then submitted that in May 1985, when the injunction was granted, Cirillo was in possession of the Poclain. It was said that the injunction, obtained at the instigation of the plaintiffs, prevented Cirillo from using or dealing with the Poclain. The plaintiffs failed to prosecute the action and ultimately discontinued their claims on 4 February 1993. It was often said that if Mr Cirillo suffered loss through being prevented from dealing with or using the Poclain by reason of the injunction, it was no answer for the plaintiffs to assert that CWC owned the Poclain or that Citicorp had a charge over it and then discontinue the action.
Counsel submitted that the injunction had been obtained in circumstances that amounted to an abuse of process. It was said that this was evidenced by the failure of the plaintiffs to prosecute the action and was compounded by the discontinuance of the proceedings. It was argued that the discontinuance amounted to an abandonment of the claim of ownership or entitlement to possession for the purposes of the proceedings. It was said that in these circumstances Mr Cirillo was entitled to pursue his claim for damages as he had an admitted right to possession that had been interfered with. Counsel went so far as to submit that it would not matter if Mr Cirillo had been a thief. It was said that he would still be entitled to damages against the true owner in circumstances where an injunction was obtained and the proceedings then discontinued.
Counsel relied on two Canadian authorities, B.C. Interiors Vegetable Marketing Bd v Kamloops Produce Co[7] and Bird Constructions Co Ltd v Paterson[8] to support this submission. These cases are distinguishable. In each case the failure to prosecute the action and the discontinuance were treated as admissions that the plaintiff had no right or claim. As there was no evidence to the contrary the courts acted on the admissions.
[7] (1938) 2 DLR 797
[8] (1960) 23 DLR (2^nd) 182
An inquiry as to damages consequent upon an undertaking is conditional upon the court being of the opinion that the interlocutory injunction ought not to have been made. Judgment on the merits in favour of a defendant will usually justify with the court forming that opinion. Unilateral discontinuance of the action by a plaintiff, without more, may be sufficient in some circumstances to justify the court forming the opinion, but it cannot be conclusive. Other events may have occurred since the granting of the injunction which deprive a plaintiff of the remedy originally being sought. There may be other factors not related to the merits of a plaintiff’s claim which justify a discontinuance of action.
In Bird Constructions, Porter JA in dissent observed:
But it is suggested that the plaintiff by filing a discontinuance has made an admission that his injunction was not properly granted. To support this proposition reference is made to a dictum of Murphy J in B. C. Interior Vegetable Marketing Board v Kamloops Produce Co., [1938] 2 D.L.R 797, 52 B.C.R 523 at 525: “There is no need for a hearing to determine that the injunction was wrongly asked for. Plaintiffs by discontinuing the action admit this is so.” On examination, it is clear that the case was never intended to support the proposition for which it is now quoted. In the judgement of Murphy J. he stated that the plaintiff admitted to him on the hearing that he was not entitled to maintain the action because, if it existed at all, the right was in the Attorney-General and not the plaintiff. It will thus be seen that it was not the filing of the discontinuance that formed the admission. It was the admission to Murphy by the plaintiff that the injunction had been wrongly obtained. There was, therefore, no need to make the inquiry of that aspect of the defendant’s right because the error had been wrongly obtained. There was, therefore, no need to make the inquiry of that aspect of the defendant’s rights because the error had already been established.
These observations provide an alternative and preferable view. In the present case there was other evidence. Citicorp maintained at all times that it was entitled to ownership and possession and that Cirillo had no claim. The reasons for not proceeding with the action related to the perceived lack of commercial utility in proceeding with the claim. As the trial judge found:
I accept Heard’s evidence that, as at the date of the obtaining of the interlocutory injunction, there was a combination of factors which bore on a decision not to immediately file a statement of claim and press on with the action against Cirillo. At about this time Heard had been and became involved, either directly or indirectly, in what proved to be something of a welter of litigation.
Shortly after Heard and Young were appointed as receivers and managers, Cirillo had brought proceedings in this court to challenge the validity of such appointment. That challenge ultimately proved unsuccessful.
In mid‑February 1985 Heard initiated proceedings in the Supreme Court of Victoria against Heytrack, seeking to recover certain Volvo trucks said to be the property of CWC.
After the interlocutory injunction was granted in the present action substantial litigation developed in relation to whether or not the Poclain or a Poclain Serial No 174 had been sold to Heytrack and as to what financing institutions had any claim to either of them. Proceedings in that regard were commenced in the Supreme Court of Queensland on 13 June 1985 and CWC (receivers and managers appointed) was joined as a third party on 5 August 1985.
…
Heard also had to address pressing issues concerning both the need to complete the ETSA contracts (to which I will also later refer) to prevent relevant performance guarantees being called up, as well as the value of any securities held by Citicorp in relation to liabilities owed to it. All of these aspects inevitably gave rise to further cost/benefit issues as to the utility of pursuing of the claim by Heard to the Poclain, having regard to any equity which might possibly remain in it.
It was Heard’s stance, in giving evidence, that it was pointless precipitately pressing on with the litigation related to the injunction until there had been a resolution of the quite separate litigation commenced in Queensland concerning the two Poclains and the competing equities in relation to them. That litigation was ultimately pursued to a final resolution some time in 1987.
… However, I think that the more likely explanation is that Citicorp had hoped that a “do nothing” approach might produce the result that Cirillo may well have become bankrupt and his trustee in bankruptcy would, in fact, be far easier to negotiate with.
Heard conceded that, as at the time of the bankruptcy, the value of the Poclain had greatly diminished, by virtue of it standing idle for a very long time, exposed to the elements. Although Heard was somewhat coy on the topic, I am satisfied that he must have appreciated that, to employ an expression coined by Mr Ribbands, of counsel for Cirillo, it may well have been of little more than scrap value by that time. The cost of removal and sale -- even if Heard had the legal right to organise this -- could have been disproportionate to any sale price recovered.
It is to be borne in mind that Mr Cirillo at all times maintained that the undertaking was a personal right that had not formed part of his bankrupt property and as such he was able to pursue the action. His failure to take any step to discharge the injunction is a relevant and material consideration.
In any event the Supreme Court Rules provide that a plaintiff is able to commence subsequent proceedings following the discontinuance of a claim before trial.[9] Discontinuance does not permit a plea of a res judicata or issue estoppel.
[9] Supreme Court Rule 52.02 provides:
This ground for complaint is without substance. Mere physical possession is not a sufficient foundation for Mr Cirillo to pursue damages for an alleged breach of an undertaking.
Ownership and entitlement to possession
Counsel for Mr Cirillo submitted that the trial judge erred in his conclusion concerning ownership and entitlement to possession of the Poclain. It was Mr Cirillo’s case that he had personally acquired the Poclain. In early 1981 Mr Cirillo, through CWC, wished to tender for the major ETSA project at Port Augusta. ETSA required the contractor to provide the appropriate plant on site. ETSA wished to have the ability to hold that plant on site throughout the course of the contract. To that end it required representations as to the plant owned or leased by the contractor. It was Mr Cirillo’s case that to satisfy the requirements of ETSA, he agreed to let CWC have the use of the Poclain. He claimed to have agreed that CWC entered into a hire purchase agreement with a financier Lombard in respect of the Poclain. It was said that Mr Cirillo agreed that CWC would be responsible for the hire charges and all other outgoings on the Poclain but that Mr Cirillo would be entitled to the beneficial interest in the Poclain. At the conclusion of the hire arrangement it was asserted that legal title to the Poclain would be transferred to Mr Cirillo.

This contention was rejected by the trial judge. There was ample evidence to justify its rejection. An analysis and consideration of the evidence demonstrates that the conclusions reached by the judge were correct.
The records of CWC tendered at the hearing consistently disclosed the Poclain as an item of property owned by CWC or in which CWC claimed the beneficial interest. The trial judge’s findings included:
There can be no doubt that, whatever deficiencies existed in the primary record keeping prior to Coopers & Lybrand taking over, the depreciation schedules were professionally prepared and the accounts of CWC for both the 1982 and the 1983 years plainly show a change of ownership and the passing of related credits and debits. It is not to be imagined that the accountants concerned merely prepared these documents as a flight of fancy, without specific instructions from and approval by Cirillo.
…
The plain fact is that, in its own taxation depreciation schedules for both the 1982 and 1983 years, CWC had claimed depreciation for the five items [including the Poclain] in question -- which it would only be entitled to do if it owned them.
…
There is also another dimension to the transactions recorded in the depreciation schedules and the accounts of CWC. As [counsel for the plaintiff] pointed out, in the course of his examination before the Master in August 1985 Cirillo volunteered the comment that the reason why he had 40 per cent of CWC was both because he supplied the expertise in the field and also in recognition of what he described as the plant that I put in. The transcript before the Master records Cirillo as saying -
‘The reason why I had 40% of CW Construction was because I supply the expertise in the field and the plant so how -- when I explain to the court that 20% of the 40% was on the plant that I put in and 20 percent my expertise in the field.’
Mr Cirillo’s account that he had an arrangement with CWC concerning the Poclian was rejected by the trial judge. As earlier observed, when discussing CWC’s assets in the Federal Court proceedings, Mr Cirillo identified the Poclain as CWC owned property. Mr Wales gave evidence, which was accepted by the trial judge, that in discussion Mr Cirillo, the Poclain was identified as CWC property. There was a substantial body of contemporaneous business records as well as independent oral evidence and admissions to the same effect. The evidence of Mr Stefanac and Mr Hocevar about their recollection of a different Poclain in use at Port Augusta 20 years earlier was inherently unreliable. The trial judge was entitled not to act on this evidence. Further evidence disclosed that Mr Cirillo did not claim the Poclain as his property at relevant times.
Counsel for Mr Cirillo contended that much of the documentary evidence was inconclusive. He pointed to possible weaknesses in the evidence. It was submitted that Mr Wales’ evidence, when properly understood, was not decisive of the issue. Counsel pointed out that Mr Cirillo claimed not to have read the affidavits that he swore in the Federal Court proceedings. All of these were arguments advanced at trial and rejected by the judge.
An analysis of the evidence demonstrates that there was ample support for the trial judge’s findings and conclusions. The judge was entitled to draw the inferences, reach the conclusions and make the findings referred to in his reasons.
This conclusion necessarily leads to the dismissal of the appeal. However, as the other issues were the subject of submissions, it is appropriate that they be addressed, albeit briefly.
Standing
Counsel for Mr Cirillo submitted that the trial judge erred in concluding that Mr Cirillo had no standing. The judge reasoned:
The undertakings are given to the Court and not any particular party. It is trite to say that any enforcement of them is a matter within the discretion of the Court. (Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1979 - 1981) 146 CLR 249 at 311 - 312, 323). I agree with [Counsel for the plaintiffs] that no actual right to damages arises until, after inquiry, the Court determines that it is appropriate that damages be paid (Cheltenham & Gloucester Building Society v Ricketts [1993] 4 All ER 276, Balkanbank v Taher [1994] 4 All ER 239 at 257). Thus the “right” pursuant to an undertaking cannot be a chose in action because a chose in action is, necessarily, an existing legally enforceable right -- either vested or contingent (Norman v Federal Commissioner of Taxation (1963) 109 CLR 9). The type of reasoning in In Re Campbell (a bankrupt) [1997] Ch 14 at 17 is apposite.
The parties are ad idem as to the concept that the undertaking itself does not found any cause of action. In that sense the capacity to make application for enforcement is, a personal right. [Counsel for Mr Cirillo] contended that, Cirillo’s right to enforce the undertaking was a non transmissible, personal right which did not pass to the Official Trustee.
In my opinion the right to enforce the undertakings did not remain vested in Cirillo personally, but passed to his Official Trustee by virtue of s 116(1)(b) of the Act. As [Counsel for the plaintiffs] put it, any right to apply to the Court necessarily followed the ownership or possession of the Poclain, because there could have been no damage sustained by anyone who could not establish that, at the relevant time, such person had a right of ownership in or possession of it.
That being so, the question then arises as to whether, by virtue of the relevant assignment, that right was revested in Cirillo, so as to found his standing in the present proceedings.
The deed [of assignment between from the Official Trustee and Mr Cirillo] appears to have been professionally drafted and is quite clear and specific in its terms. The subject of the assignment are any relevant choses in action. The authorities above adverted to render it clear that a capacity to seek to enforce an undertaking given by another party to the Court is not and cannot constitute a chose in action in the legal sense of that phrase.
As is demonstrated in Norman v Federal Commissioner of Taxation, if an asserted right is to constitute a chose in action in the legal sense, it must be an existing proprietary right, albeit that it may be contingent. The mere capacity to come to the Court and request it, as an exercise of discretion, to enforce an undertaking given to it, is not of that nature. The deed of assignment executed by the Official Trustee was ineffective to confer standing on Cirillo to prosecute the present application.
As earlier observed the question of Mr Cirillo’s standing to seek damages pursuant to the undertaking only needs to be finally resolved if Mr Cirillo is otherwise entitled to succeed on the question of ownership or possession and estoppel.
The standing of a party must be decided once and for all by reference to facts which existed when that party first invokes the jurisdiction of the Court.[10]
[10] Niord Pty Ltd v Adelaide Petroleum NL (1990) 54 SASR 87
The standing question gives rise to three issues. Is the right to apply a personal right of Mr Cirillo that did not vest in the Trustee? Did the right to apply for damages pursuant to the undertaking vest in the Official Trustee pursuant to sections 58 and 116 of the Bankruptcy Act (Cth) 1966, upon Mr Cirillo’s bankruptcy? Was the right to apply for damages pursuant to the undertaking assigned to Mr Cirillo under the Deed of Assignment?
Mr Cirillo’s primary submission was that the right to apply to the Court for the enforcement of the undertaking is not a chose in action but rather a ‘personal right’.
An undertaking as to damages is given to the court and not to an enjoined party. The termination of an injunction creates no right to damages in favour of an enjoined party. Enforcement and the extent of enforcement are discretionary matters for the court.[11] It is for the court to decide whether an interlocutory injunction should have been granted. Only if it is decided that the interlocutory injunction should not have been granted does any question of an enquiry as to damages arise.[12]
[11] Smith v Day (1882) 21 ChD 421 at 425, 427, 430; Ex Parte Hall, in re Wood (1883) 23 ChD 644 at 652-653; Air Express Ltd v Ansett Transport Industries (Operations) Pty Ltd (1979-81) 146 CLR 249 at 311-12 per Gibbs J at 323 per Mason J; Cheltenham & Gloucester Building Society v Ricketts [1993] 1 WLR 1545 at 1554
[12] Balkanbank and Taher [1994] 4 All ER 239 at 257
An undertaking as to damages does not found or create a cause of action. The right in issue, on which Mr Cirillo’s standing depends, is the right to apply to the court to request an exercise of discretion to order an enquiry as to damages. There is no ‘right’ to an enquiry until the court’s discretion is positively exercised in favour of ordering an enquiry. Even where it is determined that an injunction should not have been granted, the court retains a discretion not to enforce an undertaking.
The inquiry itself will not be held unless and until the Court exercises its discretion in favour of an applicant. Until such time, an applicant can only be said to have a mere hope, a spes, of being awarded compensation, or a mere right to apply. The right to damages does not come into existence until after an enquiry. A chose in action is an existing right, whether vested or contingent.[13] A mere hope or spes is not a chose in action.[14]
[13] Norman v Federal Commissioner of Taxation (1963) 109 CLR 9 at 18, 26 and 40
[14] See In re Campbell (a bankrupt) [1997] Ch 14 Knox J at 17
Section 58 of the Bankruptcy Act vests in the Official Trustee in Bankruptcy all the present property of a bankrupt, at the moment of the making of a sequestration order, and all after acquired property of the bankrupt, on its acquisition by the bankrupt. Section 116 then makes this property, in general terms, divisible among the creditors.
Sub-sections 58(1) and 116 (1), in so far as they are relevant provide:
58(1) Subject to this Act, where a debtor becomes a bankrupt:
(a) [T]he property of the bankrupt, not being after acquired property, vests forthwith in the Official Trustee, or if, at the time when the debtor becomes a bankrupt, a registered Trustee becomes the Trustee of the estate of the bankrupt by virtue of section 156A, in that registered Trustee,
…
116(1) Subject to this Act:
(a) all property that belonged to, or was vested in, a bankrupt at the commencement of the bankruptcy, or has been acquired r is acquired by him, or has devolved or devolves on him, after the commencement of the bankruptcy and before his or her discharge;
(b) the capacity to exercise, and to take proceedings for exercising all such powers in, over or in respect of property as might have been exercised by the bankrupt for his or her own benefit at the commencement of the bankruptcy or at any time after the commencement of the bankruptcy and before his or her discharge; …
…
is property divisible amongst the creditors of the bankrupt.
Section 5 defines ‘property’ as:
Real or personal property of every description, whether situate in Australia or elsewhere, and includes any estate, interest or profit, whether present or future, vested or contingent, arising out of or incident to any such real or personal property.
Sub-section 5(a) widens the definition of property that is vested in the Official Trustee by defining ‘the property of the bankrupt’ to mean:
(i) the property divisible among the bankrupt’s creditors; and
(ii) any rights and power in relation to that property that would have been exercisable by the bankrupt if he or she had not become a bankrupt.
The definitions of property, and the property of the bankrupt set out above include rights in relation to property. In re Buckle[15] Gibbs J observed:
The word ‘property’ is of wide import and in its context in s. 166 of the Bankruptcy Act 1966-1968 is to be understood in the light of the principle, established for centuries and still applicable subject to specific statutory exception, that the creditors are to have the benefit of ‘every beneficial interest which the bankrupt has’, ‘every species of right, or which by any possibility profit can be made’.
[15] (1969) 15 FLR 460 at 466
‘Property’ in section 5 of the Act includes choses in action both legal and equitable.[16] Any choses in action owned by Mr Cirillo in 1992 vested in the Official Trustee.[17] The definitions also catch rights of action which are not themselves choses in action and the incidents and fruits of those rights;[18] as well as equitable rights and equitable claims.[19]
[16] See Re Edelsten (1988) 84 ALR 547 at 556-557; In Re Rules Settlement [1915] VLR 670
[17] Re Movitor Pty Ltd (1996) 64 FCR 380 at 392. See also Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306 at 314
[18] Re Huggins (1882) 21 ChD 85; Hollinshead v Hazelton [1916] 1 AC 428 at 436, 441; Cotterill v Bank of Singapore (1995) 37 NSWLR 238; Official Receiver in Bankruptcy v Shultz (1990) 170 CLR 306 at 314
[19] Pridmore v Magenta NominLees Pty Ltd (1999) 161 ALR 458 at 469
Even rights unassignable by acts inter partes are transmitted by the provision of the Bankruptcy Act. In Federal Commissioner of Taxation v Official Receiver[20] Kitto J observed:
[F]or the unassignability of a right to be paid money does not necessarily exclude it from the category of property which vests in the official receiver under the Bankruptcy Act.
[20] (1956) 95 CLR 300 at 327
The question to be determined is the nature of the right to apply to the court and, specifically, whether the right to apply pursuant to the undertaking is a chose in action.
The classes of assets or rights vested by operation of law in the Official Trustee are wider than common law concepts of choses in action and property. Property vested by law pursuant to the Bankruptcy Act in the Trustee is wider in its ambit than property denoted by the common law concept of a chose in action.
The definitions of ‘property’ and ‘the property of the bankrupt’ in the Bankruptcy Act are sufficiently broad to include the right to apply under an undertaking as to damages. In the present case that right vested in the Official Trustee in June 1992.
The right to apply pursuant to an undertaking as to damages falls within the definition of property in the Bankruptcy Act. The property to which the right attaches is not just the potential award of damages but the Poclain itself, and all rights in relation to it, including the right to sell, use, possess and otherwise exploit the Poclain. The right to apply pursuant to the undertaking depends on the determination of whether Mr Cirillo was wrongfully enjoined, which necessarily requires determining ownership of the Poclain.
Given the terms of the Bankruptcy Act, the right to apply to enforce the undertaking attaches to and runs with the Poclain, the subject matter of the injunction. The undertaking only has relevance when linked to the Poclain.
Any right of possession enjoyed by Mr Cirillo at the date of the sequestration was subject to the statutory right of the Official Trustee to ownership of the Poclain, and as a corollary, subject to the statutory right of the Official Trustee to compel delivery up of property vested in him. The discharge of a person from bankruptcy does not of itself revest assets previously owned by that person. The mere act of discharge of Mr Cirillo from his bankruptcy did not, therefore, itself revest in him assets or rights previously owned by him. Mere possession was not enough to confer standing.
The injunction did not interfere with Mr Cirillo’s possession of the Poclain. To the contrary, it required Mr Cirillo to remain in possession. On his application, Mr Cirillo was in substance complaining that following the injunction, although he was in possession, he could not use the machine. Mr Cirillo’s claim sought damages for economic loss resulting from the fact that the injunction prevented use of the Poclain. His alleged losses flowed from an inability to use the Poclain in the course of a business. Mr Cirillo relied not on possession, but on an incident of ownership or a right to use or otherwise exploit the Poclain.
The purpose of the inquiry as to damages sought by Mr Cirillo was to obtain compensation for economic loss. He was not seeking damages for or in respect of any personal injury or wrong. The losses in respect of which Mr Cirillo sought compensation were losses which, if made, would have been derived from a business carried on by him. The relevant right of action vested in the Trustee of his bankrupt estate.
Any right of action claimed by Mr Cirillo related to the alleged property of Mr Cirillo. That right vested in the Trustee. Mr Cirillo was sued by the plaintiffs and received the benefit of the undertaking as to damages, because and only because he asserted property in the Poclain.
Mr Cirillo’s application for an inquiry rests on the same footing. He is implicitly asserting a right of property in the Poclain. As earlier observed, Mr Cirillo’s rights vested in his Trustee. Mr Cirillo was deprived of standing in the action.
The Deed of Assignment relevantly provided:
The Assignor hereby sells, assigns and transfers to the Assignee absolutely every chose in action (and all rights, title and interest thereto) which the Assignor as trustee of the bankrupt estate of the Assignee and Grieves may have against Citicorp, John Harold Heard and Stephen Elliott Young howsoever arising, including but not limited to the causes in action (sic) specified in the proceedings commenced in the Supreme Court of South Australia being Action No 80 of 1991.
The sale and assignment of every chose in action referred to in clause 1.1 hereof shall include every chose in action arising out of or consequent upon the appointment of John Harold Heard and Stephen Elliott Young as Receivers and Managers by Citicorp over the assets and the property of C.W. Construction Proprietary Ltd (Receivers and Managers Appointed) A.C.N. 007 947 935 but shall exclude any legal entitlement to set aside the appointment of the Receivers and Managers in the event that any such legal entitlement vested in the Assignor by virtue of the Bankruptcy Act upon the sequestration order made against the estate of the Assignee and Grieves.
As earlier observed a right to apply to the Court to seek the enforcement of the undertaking is not a cause of action. The primary proceeding challenged the appointment of the receiver. That proceeding did not relate to the ownership of the Poclain or the undertaking as to damages.
The right to apply to the Court to seek the enforcement of the undertaking is a mere right of procedure or a mere equity. It is not a ‘chose in action’. It was not assigned under the Deed. The Deed did not convey the right to call up the undertaking. A right to apply to the Court to seek the exercise of a discretion is not a chose in action.[21] The right to apply to the Court to seek the enforcement of the undertaking vested in the Trustee was not transferred to Mr Cirillo by the Deed. The right to apply to the Court to seek the enforcement of the undertaking vested in the Trustee.[22]
[21] Re an Application by Marly Laboratory Pty Ltd {1952] 1 All ER 1057
[22] Jones v Skelton (1966) 9 FLR 318
The right to apply to the court to seek the enforcement of the undertaking is not lost. Section 134(1)(j) of the Bankruptcy Act, authorises the Trustee to bring, institute or defend any action or other legal proceeding relating to the administration of the estate.
The property and bundle of rights which vested in the Trustee in bankruptcy, on the sequestration order being made in respect of Mr Cirillo, included all the property rights of Cirillo, and all choses in action, except to the extent to which they are exempted by paragraph 116(2) of the Bankruptcy Act. None of the exemptions in paragraph 116(2) are relevant. The right to apply to the court pursuant to the undertakings as to damages vested in the Official Trustee. The right to make the relevant application remained vested in the Official Trustee.
Estoppel

The trial judge concluded that if necessary he would order that Mr Cirillo be estopped from asserting ownership in the Poclain.
Mr Cirillo submitted that the trial judge erred in the following respects.
-finding that Cirillo made or authorised any relevant representations to Citicorp, or that such representations were to the effect that the Poclain was the property of CWC and not of Cirillo;
-finding that Citicorp relied upon any such representations, and in failing to consider whether Cirillo intended such reliance;
-finding that Citicorp altered its position in reliance on the truth of any such representations;
-failing to consider at all whether Citicorp would now be prejudiced or suffer detriment by reason of Cirillo asserting personal ownership of the Poclain (on the assumption that it is contrary to earlier representations by him);
-failing to consider whether it would be unjust for Cirillo to now depart from any assumption that the Poclain was owned by CWC and not by Cirillo personally;
-failing to consider at all the question of estoppel as between Cirillo and the Receivers or CWC.
On the issue of authorisation the trial judge concluded:
I entertain no doubt that, at all material times, Cirillo did, expressly or impliedly, represent to Citicorp or authorise the making of such representation to it, as a basis for the making of successive advances, that, inter alia, the Poclain was the property of CWC and that the equity in it was to constitute portion of the security given by that company. In this regard the ultimate execution of the debenture under which the receivers and managers were appointed must be viewed in light of the events which led up to it and the whole history of oral and written communications passing between Cirillo and CWC (and persons authorised by them), on the one hand, and Citicorp, on the other.
Moreover, the ongoing discussions between Cirillo and others authorised by him over time and representatives of Citicorp all went forward on the footing that the real physical security being offered by virtue of the debenture ultimately entered into was both the unencumbered plant of CWC and also its equity in encumbered plant owned by it – including the Poclain.
There was ample evidence to support these findings. The following are examples. Mr Cirillo was aware of the representation being made in writing. A solicitor’s letter making the representation was used generally for the purposes of supporting an application for finance. The evidence established that the document reached Citicorp. A copy tax return and depreciation schedules of CWC were provided to Citicorp. These documents disclosed the Poclain as the property of CWC. Mr Cirillo acknowledged that he had directed that this tax return be provided to Citicorp. The written representations were also included within a letter and annexed documents from Mr Wales of Coopers & Lybrand to Citicorp. The evidence disclosed that these documents were sent with the knowledge and authority of both CWC and Mr Cirillo. Mr Wales gave unchallenged evidence that he discussed with Mr Cirillo the contents of the letter before it was sent.
No basis has been shown to disturb the trial judge’s findings. Those findings were open and supported by the evidence.
The trial judge reached the following conclusions about reliance:
There is not the slightest doubt that the representations that the Poclain was the property of CWC (subject to any existing encumbrance on it) and that the equity in it would be subject to the debenture was a material inducement which led Citicorp to enter into the relevant loan transaction, to its detriment. It was not, of course, the only inducement. A major factor was the cash flow generated, or to be generated, by CWC contracts. However an important purpose of the debenture was to take security over the CWC plant and equipment, which was always understood by Citicorp to include the Poclain.
I accept Bullwinkel’s evidence the lending to companies in the earthmoving industry was perceived by Citicorp as high risk and that, if he had been made aware that Cirillo personally had owned any assets of substance (for example, an equity in the Poclain), he would have sought collateral security from him. Bullwinkel was not challenged as to that. At all material times Cirillo’s personal tangible net worth was held out to and accepted by Citicorp as not being significant.
A review of the evidence of Mr Bullwinkel, an officer of Citicorp, confirms that the judge’s findings and conclusions were open on the evidence. Mr Bullwinkel explained that lending to companies in the earthmoving industry was high risk and that Citicorp looked for security both from cash flow and from the value of plant and equipment. Mr Bullwinkel explained that the Poclain was an item of plant and equipment believed by Citicorp to be owned by CWC. It was one of a number of items of security advanced. Mr Bullwinkel gave unchallenged evidence that if he had been aware that Mr Cirillo owed the Poclain, Citicorp would have required specific security.
Counsel for Mr Cirillo has not identified any basis on which the trial judge’s findings and conclusions on this issue can be challenged. The judge was addressed fully in regard to all aspects of Mr Cirillo’s case. He rejected those submissions. No basis has been established to justify this court in interfering with the judge’s discretionary findings of fact. To the contrary, the evidence amply supports those findings.
On the question of alteration of position Mr Bullwinkel’s evidence was accepted. That evidence established that Citicorp proceeded on the basis that it was obtaining security over the Poclain. Citicorp’s further dealings with Mr Cirrillo and CWC proceeded on the basis that the Poclain was owned by CWC. Citicorp altered its position in reliance on the truth of the representations. Had it known the truth it would have acted in a way that Mr Bullwinkel identified.
The trial judge did not directly address the issue of detriment or prejudice. The question of detriment to Citicorp was to be assessed at the date when Mr Cirillo sought to resile from the representation. It was evident that Citicorp altered its position to its detriment. It lent monies to CWC without personal security from Mr Cirillo. As a direct result of that decision Citicorp was embroiled in litigation on the issue of ownership of the Poclain. Had it known the truth or even if there was uncertainty over the ownership of the Poclain Citicorp could have taken personal security from Mr Cirillo. This would have allowed Citicorp to avoid this litigation. The detriment suffered by Citicorp was ongoing as Citicorp continued to make other advances to CWC.
The trial judge addressed the claim of injustice as follows:
In this regard I should record that [counsel for Mr Cirillo] sought to escape such a conclusion by embracing what he said was the merger of the doctrines of common law estoppel and equitable estoppel in conformity with what fell from Mason CJ, Deane and Gaudron JJ in The Commonwealth of Australia v Verwayen (1990) 170 CLR 394. He submitted that the law had developed to the point at which it was open to the court to take into account the wider conduct of Citicorp, particularly the manner in which it had led CWC into the Thomson purchases on an unfulfilled promise to refinance, the early debiting of the participation fee and its conduct in seeking the injunctions to put Cirillo out of business and prosecuting the present proceedings in a manner tantamount to an abuse of process. Any representations had been made innocently and were not of paramount importance with respect to any lending decision. Citicorp was, he said, the architect of its own detriment and it negated equitable concepts of fairness and justice to ignore these considerations by upholding a form of estoppel described as “common law”.
He contented that Verwayen stands as authority for the proposition that the estoppel relied on by Citicorp could be qualified, on general equitable grounds, to the extent that the effect of that estoppel would otherwise exceed what might be satisfied by the requirements of conscientious conduct; that there needed to be a degree of proportionality between the remedy sought and the detriment which the plaintiff seeks to avoid. It would be inequitable to insist upon a disproportionate making good of a representation made. (cf Mason CJ in Verwayen at 413). In the instant case the conduct of Citicorp was such that a disproportionality of that type would necessarily arise.
Such an argument cannot be sustained.
Having regard to what fell from the High Court in Giumelli and Another v Giumelli (1998) 196 CLR 101 at 112, it simply cannot affirmatively be asserted that there has been a merger of the two doctrines, as contended for by Mr Ribbands. I cannot perceive any basis in established principle for reasoning in the manner sought to be applied by him. Verwayen was, of course, clearly a case of equitable estoppel and any dicta in the judgments related to it must be seen in that light.
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 101
Conclusion
This appeal should be dismissed.

The discontinuance of an action before trial shall not be a defence to any subsequent action for the same, or substantially the same, cause of action, provided that the costs of the previous action have been paid. If the costs of the previous action have not been paid, the subsequent action may be stayed until payment. If an action is discontinued at trial the Court may direct that the discontinuance have the effect of a final judgment against the party discontinuing.