Dehne v Professional Products of Australia Pty Ltd
[2004] WASC 236
DEHNE -v- PROFESSIONAL PRODUCTS OF AUSTRALIA PTY LTD & ORS [2004] WASC 236
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASC 236 | |
| 17/11/2004 | |||
| Case No: | CIV:2160/2004 | 2, 4 & 5 NOVEMBER 2004 | |
| Coram: | MASTER SANDERSON | 5/11/04 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Injunction granted | ||
| B | |||
| PDF Version |
| Parties: | FREDERICK EDGAR DEHNE PROFESSIONAL PRODUCTS OF AUSTRALIA PTY LTD (ABN 84 065 247 252) IAN McSORLEY DARREN HILL BANDIT INDUSTRIES INC |
Catchwords: | Injunction Application for mandatory interlocutory injunction Turns on own facts |
Legislation: | Nil |
Case References: | Nil Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
PROFESSIONAL PRODUCTS OF AUSTRALIA PTY LTD (ABN 84 065 247 252)
First Defendant
IAN McSORLEY
Second Defendant
DARREN HILL
Third Defendant
BANDIT INDUSTRIES INC
Fourth Defendant
Catchwords:
Injunction - Application for mandatory interlocutory injunction - Turns on own facts
(Page 2)
Legislation:
Nil
Result:
Injunction granted
Category: B
Representation:
Counsel:
Plaintiff : Mr I A Morison
First Defendant : Mr T J Kavanagh
Second Defendant : Mr T J Kavanagh
Third Defendant : No appearance
Fourth Defendant : No appearance
Solicitors:
Plaintiff : Williams & Co
First Defendant : Corser & Corser
Second Defendant : Corser & Corser
Third Defendant : No appearance
Fourth Defendant : No appearance
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Nil
(Page 3)
1 MASTER SANDERSON: By amended chamber summons dated 15 September 2004, the plaintiff sought the following orders:
"1. First, Second, Third and Fourth Defendants be restrained from disposing or otherwise dealing of the Bandit 3680 Triaxle Beast Recycler ('the Grinder'), other than to cause it to be delivered to the Plaintiff's premises at 157 Hammond Road, Jandakot until the determination of these proceedings;
2. The First Defendant, through its servants and agent, and the Second, Third and Fourth Defendants, and each of them, be restrained and an injunction be granted restraining each of the First Defendants through, its servants and agents, and the Second and Third Defendants from:
2.1 approaching within 100 metres of the Grinder;
2.2 removing or attempting to remove, or anyway interfering with the location and operations of the Grinder;
until the determination of these proceedings.
3. The First, Second, Third and Fourth Defendants and each of them deliver the Grinder to the Plaintiffs premises at 157 Hammond Road, Jandakot.
…"
2 Orders were made largely in terms of par 2 of the original chamber summons dated 7 September on 14 September 2004. At that stage the plaintiff was not seeking the mandatory injunction found in par 3 of the amended chamber summons. Subsequent to the restraint granted on 14 September, the plaintiff took the view that his position could only be protected by the mandatory injunction. The reasons for that will become apparent. At the conclusion of the hearing on 5 November 2004 I granted the plaintiff an injunction, including a mandatory injunction, in terms slightly different from the orders sought in the amended chamber summons. I will detail the orders I eventually made below. I indicated to the parties when making these orders that I would publish reasons for my decision. These are those reasons.
(Page 4)
3 The facts of this case can be summarised in the following way. The plaintiff describes himself as a machine operator. For many years he has been involved in the logging industry and during that time he developed a business supplying sawdust to poultry farmers for use as poultry bedding. In June 2002 the plaintiff was told by a poultry farmer friend that he had been contacted by the second defendant. The second defendant said he had a grinding machine which could make sawdust out of tree branches, waste timber and the like. Prior to June 2002 the plaintiff had been utilising waste material from sawmills for the production of the poultry bedding. However, with the government restrictions on logging and timber milling, the source of his supply was dwindling. He was therefore interested in the machine that the second defendant had available.
4 The plaintiff first contacted the second defendant in about June 2002. During the course of this discussion the second defendant advised the plaintiff that he (the second defendant) was a director of the first defendant. The second defendant advised that the first defendant was the sole Western Australian agent and distributor for the American manufacturer of the Grinder. The Grinder is manufactured by the fourth defendant. Over a period of some months, discussions took place between the plaintiff and the second defendant about the capability of the Grinder. By mid-July the plaintiff had decided that he would purchase the Grinder. However, he had difficulty obtaining finance for the purchase. By late August 2002 he had exhausted his options. He advised the second defendant that although he still wished to purchase the Grinder, he was unable to do so. After further discussions with the second defendant, the second defendant advised the plaintiff that the purchase of the Grinder would be funded by the fourth defendant. After some further delay, an agreement was reached towards the end of November 2002. A copy of that agreement appears as annexure "FED5" to the affidavit of the plaintiff sworn 27 August 2004.
5 The agreement is in the form of a letter. It is on the letterhead of the first defendant and is directed to the plaintiff. The purchase price of the Grinder is said to be $531,743.30. The "Purchase terms" are said to be 60 monthly instalments, with an interest rate of 7.5 per cent. There then appears the following:
"This agreement between Professional Products of Australia Pty Ltd the supplier And Mr F Dehne the purchaser is the principal agreement for the purchase of the machine."
(Page 5)
6 It is not appropriate at this stage of the proceedings to make a final determination as to the effect of the contract. But two things do stand out. First, it is surprising that a purchase of a machine for over $530,000 is covered by a one-page letter. For instance, there is no default provision. What was to happen if the plaintiff failed to make payment of one of the instalments? It is at least arguable that the first defendant's rights were limited to suing from time to time for any unpaid instalment. Repossession does not appear to be an option. Second, it is difficult to see how this agreement could have been reached unless the first defendant was the owner of the machine. What the agreement anticipates is the passing of the right, title and interest in the Grinder from the first defendant to the plaintiff. There is no suggestion that the Grinder is owned by a third party.
7 Although the contract was signed in late November 2002, the Grinder did not arrive in Perth until March 2003. Thereafter it was commissioned, the plaintiff was instructed on its use by representatives of the fourth defendant and the plaintiff began to use the machine. It is the plaintiff's case that the machine did not perform in a way that was consistent with the representations made by the second defendant in the course of negotiations prior to purchase. The precise nature of the plaintiff's complaints and the negotiations which took place between the plaintiff and the second defendant are not relevant for present purposes. It is sufficient if I say that by July 2003 there had been a complete breakdown of the commercial relationship and considerable animosity had developed between the plaintiff and the second defendant. This eventually led to an incident in late July 2003 when the plaintiff told the second defendant that "he could keep the machine and not to bother chasing me for money because I had none": par 120 of the plaintiff's affidavit of 27 August 2004.
8 After this argument the plaintiff left the grinder in the possession of the second defendant. However, he soon had second thoughts. On or about 4 August, after seeking legal advice, the plaintiff decided to retrieve the Grinder. Thereafter the plaintiff used the Grinder intermittently throughout the latter part of 2003 and in 2004. Since the beginning of 2004 the plaintiff has been using the Grinder approximately three to four hours per week to grind pine slithers at the Permapole site in Mundijong. The Grinder is kept at the Mundijong location, which is well fenced and supervised.
9 On 16 February 2004 the first defendant issued proceedings against the plaintiff: Professional Products of Australia Pty Ltd v Fred Dehne,
(Page 6)
- CIV 1178 of 2004. A statement of claim in those proceedings was filed on 31 March 2004. After identifying the parties, the plaintiff in those proceedings (who I will refer to as the first defendant) pleads by par 3 the purchase agreement I have set out above. By par 7 of the statement of claim the first defendant pleads that the plaintiff (in these proceedings) repudiated the purchase agreement by the use of the words I have quoted above. This is said by the first defendant to have put an end to the purchase contract. The first defendant seeks by way of relief a declaration that the title in the Grinder invested in the plaintiff and that the plaintiff is entitled to possession of it.
10 The plaintiff filed his defence on 19 April 2004 and the matter was listed for a mediation conference on 24 June 2004. The Mediation Registrar was ill and the conference was relisted for 2 August 2004. The plaintiff and the second defendant attended the mediation conference which started at approximately 10 am and concluded around 1.30 pm.
11 On the morning of 3 August 2004 the plaintiff went to the Mundijong location only to find that the Grinder was not there. He spoke with a member of the staff of Permapole. A person who he identifies as John Sykes, the general manager of Permapole, told him that on the morning of 2 August, two men had approached the Grinder. Sykes asked them what they were up to. Sykes told the plaintiff that one of the men identified himself as Darren Hill. The plaintiff says that from his own knowledge he was aware that Darren Hill was a mechanic employed by the first defendant. Sykes advised the plaintiff that Hill said certain things which led Sykes to believe that the plaintiff had authorised the removal of the Grinder. Of course, that was not correct. However, Sykes was not to know that the authority had not been given. He allowed the two men to remove the Grinder from the Mundijong location.
12 Understandably alarmed, the plaintiff contacted his solicitors. The solicitors instructed a private investigator. The private investigator located the Grinder at a property at 86 Gibbs Road, Wangara. The investigator took photographs of the Grinder on the property. The Gibbs Road property was occupied by a Mr Jeff Jansen of Jeff's Tree Services. The plaintiff was aware that Jansen was an associate of the second defendant. He had been told by the second defendant that the two went fishing using Mr Jansen's boat.
13 On the morning of 4 August 2004 the private investigator, the plaintiff and a tow-truck driver went to the premises at 86 Gibbs Road, Wangara, with a view to retrieving the Grinder. It was gone. Attempts
(Page 7)
- were made to locate the Grinder elsewhere in the Wangara area. These efforts proved fruitless. The Grinder was nowhere to be seen. The plaintiff says his business is suffering. He says that he is entitled to possession of the Grinder and he wants it back.
14 The third defendant in these proceedings is described as Darren Hill. The third defendant has not filed an appearance. But Darren Paul Hills swore and filed an affidavit on 5 October 2004 in which he deposes to being the third defendant. It is Mr Hills who is alleged to have attended at the Mundijong location on 2 August and to have spoken to Mr Sykes. The affidavit is somewhat cryptic but it is of importance in the context of these proceedings. It is short and I will quote it in full:
"I, DARREN PAUL HILLS, of 4 Europa Court, Kallaroo in the State of Western Australia, mechanic, being duly sworn make oath and say as follows:
1. I am the Third Defendant in these proceedings.
2. On 2 August 2004 I was approached by a man and asked if I had permission to move the Beast. I said the boss had asked me to move it. He replied by asking me to see his boss before I took the Beast.
3. I attended a hut at the entrance to the yard and spoke with a man whom I believe was John Sykes. He asked me if I had permission to move the Beast, to which I answered the boss wanted it moved.
4. The man whom I believe to be John Sykes, said that he knew the 'situation' and suggested that I would want to get out of here before the owner returns. He also jokingly remarked and asked if we were taking the telehandler (another piece of machinery) as he said he wouldn't mind it and could use it. I replied I wasn't taking it.
5. The man whom I believe to be John Sykes then requested my contact details, motor vehicle registration number, in order to cover his 'backside' which were the words he used. I supplied the details as requested."
15 When the injunction was granted on 14 September 2004, Master Newnes made programming orders. One of those orders was that the first, second and third defendants were to file and serve any affidavits in
(Page 8)
- response by 29 September 2004. In fact, the second defendant filed an affidavit on 27 October 2004. That affidavit read, in part, as follows:
"3. I have no knowledge of the circumstances of the removal of the Bandit Tri-axle Beast Recycler ('the Grinder') from the premises at which the Plaintiff was using the Grinder.
4. Further, I have no knowledge of the current whereabouts of the Grinder.
5. If, as alleged by the Plaintiff, Darren Hill removed the Grinder from the premises in Mundijong he did so without my authority or instruction or the authority or instruction of the First Defendant."
"Dear Sir
In regard to the above matter I wish to inform you of the situation as I understand it.
Darren Hills is no longer employed by this company, and we are of the understanding that Bandit Industries have taken possession of the Beast 3680 recycler and are probably holding it at a site in Perth.
I have spoken to Bandit Industries in America and they have confirmed they are holding the machine until they receive full payment from Professional Products.
Our failure to make payment will result in the machine being put on the international market and sold; any shortfall in funds will be recoverable from us.
It is in this company's best interests to Endeavour (sic) to finalise a sale to you in Perth.
Please advise if you wish to make Bandit Industries an offer.
A copy of the content of this letter has been faxed to your solicitors however I believe you may wish to speak to me without the involvement of solicitors to try and finalise this matter before the matter is resolved overseas or interstate."
(Page 9)
17 The letter is signed by the second defendant.
18 When the matter came on for hearing on 2 November, counsel for the plaintiff objected to the second defendant's affidavit being relied upon. He pointed out that it was filed well out of time with no explanation for the delay. After hearing counsel's submissions I indicated that I would allow the affidavit to be read into evidence, provided that the second defendant attended for cross-examination. I then adjourned the matter to 4 November. The second defendant was available for cross-examination and he was duly cross-examined by counsel for the plaintiff. The evidence he gave in response to questions put to him in cross-examination can best be described as a tissue of lies.
19 The second defendant admitted that Darren Hill had been an employee of the first defendant for at least 16 months prior to 2 August. The second defendant denied that he had instructed Hill to attend at the Mundijong location. He was unable to explain how it was that an employee of the first defendant, a company of which he was a director, could attend at the premises and remove the Grinder without his direction. He confirmed that so far as he was aware the fourth defendant had no representative in Western Australia, other than the first defendant. The second defendant confirmed that he was an acquaintance of Jansen's. He was unable to explain how it was that the Grinder was seen on Jansen's premises. The second defendant insisted that he had no knowledge of the whereabouts of the Grinder, although he thought that it might, by now, be interstate. How he had reached that conclusion was unexplained.
20 Questioned about the ownership of the Grinder, the second defendant indicated that it was being purchased from the fourth defendant, or a company associated with the fourth defendant, by the first defendant. Although the evidence was somewhat garbled, the second defendant appeared to say that the arrangement was such that the Grinder could be repossessed by the fourth defendant, or its associated entity, if instalments of the purchase price were not paid. As I understand the second defendant's position, this is what he said had happened - that is, Bandit or its associated entity had repossessed the Grinder for failure to meet the instalments of the purchase price.
21 At the conclusion of the second defendant's evidence, I advised counsel for the first and second defendants that I regarded the evidence as unsatisfactory. I indicated that I would adjourn the proceedings to the following day to allow the second defendant to contact the fourth defendant in the United States of America, with a view to ascertaining the
(Page 10)
- whereabouts of the Grinder so that it could be redelivered to the plaintiff. I asked for and received an undertaking from the second defendant that he would make contact with the fourth defendant in the USA.
22 At the resumed hearing, counsel for the first and second defendants sought leave to tender a further affidavit of the second defendant, sworn 5 November 2004. The affidavit is short and I will quote it in full:
"I, Ian McSorley of 26 Johnson Crescent, Mullaloo in the State of Western Australia, Company Director, MAKE OATH AND SAY as follows:-
1. I am the sole director of the First Defendant company and I am duly authorised to swear this affidavit.
2. I am also the Second Defendant in this action.
3. In accordance with the undertaking I gave to the Court on 4 November 2004 I rang Jay Vaughn ('Vaughn') at about 9.30 pm on 4 November 2004. Vaughn is, to the best of my knowledge, the International Sales Manager of the Fourth Defendant. I explained to Vaughn what had occurred in Court on 4 November 2004. I asked Vaughn where the Grinder was. He told me
'It is of no concern where the machine is; we have repossessed it.'
4. I explained to Vaughn that he would have to put that in writing to me. I have received a facsimile from MTM Financial Corporation dated 4 November 2004. Now produced and shown to me and marked with the letters 'IM1' is a true copy of that facsimile.
5. To the best of my knowledge and belief:
(a) Smoracy Inc is the manufacturer of the Grinder
(b) The Fourth Defendant is the selling arm of Smoracy Inc
(c) MTM Financial Corporation is the financing arm of Smoracy Inc.
(Page 11)
- 6. I swear this affidavit in opposition to the Plaintiff's Application for an Interlocutory Injunction."
23 Appearing as annexure "IM1" to the second defendant's affidavit is a copy of a facsimile transmission from MTM Financial Corporation. The letter is in the following terms:
"To: Whom it may concern November 4, 2004
From: MTM Financial Corporation
Model 3680 s/n 1445 financed by MTM Financial Corporation to Professional Products of Australia has been repossessed in accordance to our contract with Professional Products of Australia due to a breach of the contract.
Ian McSorley has not been informed of the machines whereabouts.
Initially Darren Wilson assisted us in the repossession of the machine originally and we have not informed Darren of the machines current location.
The machine is no longer in the State of Western Australia."
24 The letter is signed by Jerry Morey who describes himself as President - presumably of MTM Financial Corporation. This subsequent affidavit rendered the second defendant's evidence even more unsatisfactory. Prior to this affidavit there had been no mention of MTM Financial Corporation by the second defendant. If as the second defendant alleges he is in some way financially committed to MTM Financial Corporation for the purchase of the Grinder, it defies belief that he would not have been aware of their existence and identity. There is no reason why he should not have mentioned that Corporation during his cross-examination.
25 There are three aspects of this case which are troubling. First, there is the second defendant's evidence. I have already indicated that I did not believe what he said in cross-examination. After the second defendant had been cross-examined, I deliberately adjourned the matter to allow him to ascertain the whereabouts of the Grinder if he did not already know. Instead, he chose to maintain the fiction that he had no involvement in its taking.
(Page 12)
26 Secondly, it seems on the case put by the first and second defendant that the first defendant sold the plaintiff the Grinder which it did not actually own. For the purposes of this application it is not necessary to make a final determination on this question. But the way that the first and second defendants put their case cannot lead to any other conclusion. That means they have committed a fraud. That fact undermines any proposition advanced on behalf of the first and second defendants.
27 Thirdly, the second defendant has clearly used the processes of this Court to advance his own improper ends. He knew that on 2 August the plaintiff would be at a mediation conference at the Supreme Court. Confident in that knowledge, he moved to take possession of the Grinder, an act he must have known was improper. For the second defendant to behave in such an underhanded fashion further undermines his position and his credibility.
28 For all these reasons I determined that it was proper to grant to the plaintiff a mandatory injunction. However, I did vary the orders sought slightly. Clearly the third defendant has no part of this business - or at least not now. He was excluded from the orders. The orders that I did make were then as follows:
(1) Leave to amend in terms of the minute of amended chamber summons dated 15 September 2004.
(2) The first, second and fourth defendants be restrained from disposing of or otherwise dealing with the Bandit 3680 Tri-axle Beast Recycler ("the Grinder") other than to cause it to be delivered to the plaintiff's premises at 157 Hammond Road, Jandakot until a determination of these proceedings.
(3) Other than to comply with this order, the first defendant, through its servants or agents and the second and fourth defendants and each of them be restrained and an injunction be granted restraining each of the first defendants through its servants and agents, and the second defendants from:
3.1 approaching within 100 metres of the Grinder;
3.2 removing or attempting to remove or any way interfering with the location and operations of the Grinder;
(Page 13)
- (4) The first, second and fourth defendants and each of them deliver the Grinder within seven days to the plaintiff's premises at 157 Hammond Road, Jandakot.
(5) The parties have liberty to apply on 24 hours' notice.
(6) Costs be reserved.
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