Earthpro Pty Ltd v Ritchie Bros Auctioneers Pty Ltd

[2005] QDC 309

[2005] QDC 309

DISTRICT COURT

CIVIL JURISDICTION

JUDGE ROBIN QC

No BD3634 of 2005

EARTHPRO PTY LTD (ACN 077 375 207)	Plaintiff
and
RITCHIE BROS AUCTIONEERS PTY LTD (ABN 21 080 895 898)	Defendant

BRISBANE

..DATE 13/10/2005

ORDER

CATCHWORDS:  Interim injunction to preserve a D9 tractor in claim for possession of it - tractor in course of being removed from defendant auctioneer's yard - plaintiff had been successful bidder and paid the price bid (and GST) - tractor apparently owned by a finance company - payout figure significantly exceeded bid price - auction conditions limiting
auctioneer's to return of moneys where title or possession could not be given - personal undertaking as to damages by plaintiff's director - application heard under UCPR r 12

HIS HONOUR:  This is an urgent ex parte application by the plaintiff which filed its claim on the 28th of September 2005.  Urgency arose suddenly today when the plaintiff's principal, Mr Roy Davis, discovered that the Caterpillar D9 crawler tractor which is the subject of a detinue claim seeking its return was in the process of being removed from the defendant's auction yard.

The Court is given to understand that the defendant is internationally renowned as a promoter of auctions of equipment such as that the D9.

...

HIS HONOUR:  According to the statement of claim the defendant advertised an "unreserved auction" for 20th September 2005 at its Yatala premises, the listing catalogue referring to the defendant's longstanding policy:

"To sell each and every item without reserve prices, minimums or limits.  Everything will be sold to the highest bidder regardless of price...
(b) the bidder offering the highest bid accepted by the defendant shall be the purchaser of the offered lot."

At the auction the plaintiff was the successful bidder.  Ten thousand dollars GST had to be added to the $100,000 bid price.  The statement of claim is obviously in error in giving, in paragraph 7, 21st December 2005 as the date when the plaintiff made payment of $110,000 by inter-bank transfer.  In the circumstances, it can be understood there's a reference to the month of September.

The equipment is useful and necessary for the plaintiff to have in carrying out earthmoving contracting work it has.  Things went wrong because, as transpired subsequently, the plaintiff's successful bid was insufficient to cover the amount payable to Esanda Finance Limited, the owner of the D9.

The shortfall is substantial.  The shorter of the two affidavits of Mr Davis, sworn today, which are before the Court is the more recent one.  It talks of telephone contact that has occurred on a date this month which has been inadvertently omitted between Mr Davis and "Mr John Marshall, who was the consignor of the D9."

Mr Marshall advised that he had become concerned prior to auction that a sufficient price to cover the pay-out figure to Esanda might not be realised at auction and had attempted to have the item withdrawn from the auction.  The defendant supposedly denied his request.  He told Mr Davis he was moving to regain possession of it, that he had retained a solicitor to help him sort matters out with the defendant.

The affidavit concludes: "The dozer was being loaded this morning."  Mr Davis gave short oral evidence to supplement that in affidavit form.  He has in the last hour or two observed the D9 being driven out of the defendant's yard and towards Jacobs Well.
He tells the Court of information that the transport which is not being effected by Mr Marshall is being carried out on the instructions of the defendant - which supports the granting of interim injunctive relief against the defendant.  If the item had passed beyond its control or influence, it might be too late for the Court to act.

There has been no appearance for the defendant.  Understandably so, since the only notice it has had is a facsimile transmission from the plaintiff's solicitors sent to its solicitors at 1.31 p.m. today advising a hearing at 2.00 p.m.  (See Exhibit 1.)

Exhibit 2 is an earlier communication sent at 12.46 p.m. today from the plaintiff's solicitors to Messrs Home Wilkinson Lowry - who have been acting for the defendant in this matter, although they are not on the record in the action - confirming a request for an undertaking that the D9 would not be removed from the auction yard except on prior written notice.

This letter asked for the undertaking:

"By noon today failing which we shall make the necessary application for an injunction."

The other exhibits before the Court include Exhibit 3:  the defendant's letter of 28th September, 2005 to the plaintiff's solicitors.   It expresses sympathy for the plaintiff's situation asserting the rarity of events of this kind where title is unavailable to items sold by Ritchie Brothers at auction.

This letter draws attention to paragraph 19 of the terms of billing and sale:

"If for any reason, the auctioneers are unable to make available or deliver any purchase, all clear title to the same or documentation required in respect of any purchase whether before or after delivery, Auctioneer's sole liability, if any, shall be the return of the moneys paid by the purchaser in respect to such purchase.  Any such purchase shall be returned and surrendered upon demand by auctioneers."

The letter went on:

"If your client wishes to accept the machine, subject to the lien being dealt with by himself, in a manner acceptable to ourselves, we are agreeable to that.  However, for reasons previously stated, we are unable to convey clear title to the machine."

Exhibit 4 is a letter of Home Wilkinson Lowry expanding on the legal bases for the defendant's contention that it is not liable to the plaintiff in any respect.  It foreshadows an application to strike the claim out and for indemnity costs against the plaintiff.  The date of that letter is the 3rd of October, 2005.

Mr Redmond has properly placed such material before the Court in performance of his client's obligation to make full disclosure of all relevant matters.

The contents of that correspondence will, no doubt, give the plaintiff pause for thought.  The Court today, in determining to grant interim relief, is concerned only to see that there is a claim which is proper to be pursued.  It makes no prediction about its ultimate success. 

In support of the proposition that there are prospects, Mr Redmond has referred the Court to Halsbury (4th) volume 2, paragraph 252 to the effect that:

"where an auctioneer sells for an undisclosed principal, he is personally liable on the contract."

He has also referred the Court to an interesting article by Brian Coote, 'A sale of goods at auction without reserve' (2001) New Zealand Law Review 277 which discusses numerous authorities, including some very old ones.  That material lends colour to the plaintiff's claim.

The defendant appears to have taken its time in returning the plaintiff's funds.  Mr Davis says they were returned by electronic means as he discovered on 7th of October.  The impression I got from his answer to the question I asked him in the witness box is that return of funds may have occurred the night before or some time like that.  It might be unfair to hold him to a proposition to that effect.

In the witness box, he confirmed his understanding of undertakings at about damages and proffered his personal undertaking in support of the injunction sought.
It does not appear that there is any sound basis for the doubts expressed in Exhibit 4 about the plaintiff's financial soundness, which one might note the defendant may bear some responsibility for if there is a problem; nonetheless, it simplifies matters greatly to have the director's personal undertaking.

The Court acts under Rule 12 in the urgent circumstances created by today's fast-moving events and makes the following orders on the following undertakings, namely the plaintiff's solicitors' undertaking to file a written application by the 14th of October 2005 and the usual undertaking as to damages by the plaintiff and its director Roy Davis.

1.   The application be heard under Rule 12.

2.Until 5 p.m. on 20 October 2005 or further earlier order the defendant, whether by its directors, servants, employees or agents or howsoever otherwise be restrained from selling, mortgaging, alienating or otherwise dealing with the Caterpillar D9N crawler tractor serial number IJD01243, (the CAT D9N), custom-fitted with a 4BBL SS ripper and a hydraulic pin puller, the subject of the action.

3.Until 5 p.m. on 20 October 2005 or further earlier order the defendant, whether by its directors, servants, employees or agents or howsoever otherwise be restrained from parting with possession of the CAT D9N, the subject of the action.

4.Copies of this order, the application (when available), the affidavits of Roy Davis and Exhibits 1 and 2 be served on the defendant in the first instance by facsimile transmission.

5.The application is adjourned to 10 a.m. on 20 October 2005.

6.Liberty to both parties to apply.

7.The costs of and incidental to the application be reserved.

The auction statement produced by the defendant shows that after taking out the costs of sale and the like the net proceeds will be an amount somewhat under $90,000.  The current payout figure indicated by Esanda is something in excess of $154,000. 

...

HIS HONOUR:  Anything further, Mr Redmond?

MR REDMOND:  Your Honour, when editing the decision and your reference to Exhibit 2 your Honour noted the facsimile time - facsimile transmission‑‑‑‑‑

HIS HONOUR:  Is that wrong?  Yes, I did, at 12.46, yes.

MR REDMOND:  As is your Honour's wont to carefully observe facsimile transmissions, this is actually a facsimile transmission which took place on today's date between‑‑‑‑‑

HIS HONOUR:  That's right. 

MR REDMOND:  ‑‑‑‑‑my solicitors' offices and the transmission actually refers - on the same day of course the 13th of the 10th - to the transmission of

Exhibit 2 at 9.55 a.m.

HIS HONOUR:  Well, that makes a lot more sense given the deadline of noon.

MR REDMOND:  Yes, thanks very much, your Honour.

HIS HONOUR:  So, 9.55 did you say?

MR REDMOND:  Yes, your Honour.  That appears at the first line of the transmission report.

HIS HONOUR:  Well, I will make a judgment about whether to quietly fix up what I said or leave that exchange in the transcript.

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