Horsman v MG Kailis Pty Ltd - [2009] WASC 166

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: HORSMAN -v- M G KAILIS PTY LTD [2009] WASC 166

CORAM: BEECH J

HEARD: 25 MAY & 4 JUNE 2009

DELIVERED : 12 JUNE 2009

FILE NO/S: CIV 1909 of 2009

BETWEEN: BARRY STANLEY HORSMAN
First plaintiff
WESTMONT INTERNATIONAL LIMITED (A COMPANY INCORPORATED IN THE BAHAMAS)
Second plaintiff
AND
M G KAILIS PTY LTD (ACN 008 684 802)
Defendant

Catchwords:

Injunctions - Interlocutory injunctions - Application for injunction to restrain defendant from dismantling and dealing with a boat - Plaintiffs claim an equitable interest in the boat - Turns on own facts

Legislation:

Shipping Registration Act 1981 (Cth)

Result:

Application for interlocutory injunction refused

Category: B

Representation:

Counsel:

First plaintiff                  :     Mr I R Freeman
Second plaintiff             :     Mr I R Freeman
Defendant:     Mr B H Taylor

Solicitors:

First plaintiff                  :     Lavan Legal
Second plaintiff             :     Lavan Legal
Defendant:     Talbot Olivier

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

Advertising Department Pty Ltd v Ship MV Port Phillip [2004] FCA 1762; (2004) 141 FCR 251
Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57
General Credits (Finance) Pty Ltd v Registrar of Ships (1982) 61 FLR 329
Hancock Family Memorial Foundation Ltd v Porteous [1999] WASC 55; (1999) 151 FLR 191
Holroyd v Marshall (1862) 10 HL Cas 191
Kalls Enterprises Pty Ltd (in liq) v Baloglow [2007] NSWCA 191
Tanwar Enterprises Pty Ltd v Cauchi [2003] HCA 57; (2003) 217 CLR 315
The Bell Group Ltd (in liq) v Westpac Banking Corporation [No 9] [2008] WASC 239
Twinside Pty Ltd v Venetian Nominees Pty Ltd [2008] WASC 110

BEECH J:

Summary

The plaintiffs apply for an interlocutory injunction restraining the defendant from dismantling or dealing with a boat registered in the name of the defendant. The plaintiffs claim that the second plaintiff has an equitable interest in the boat under a contract of sale.
For the reasons that follow I would decline to grant the interlocutory injunction sought. In summary, that is because of the apparent weakness of the plaintiffs' claim to an equitable interest, and because of the plaintiffs' considerable delay in taking steps to pursue any claim to ownership of the boat.
I begin by outlining the facts.

The facts

The plaintiffs rely upon four affidavits sworn by the first plaintiff, Mr Barry Horsman. They also rely upon an affidavit of Mr Charles Warner and two affidavits of Mr Darren Zusman.
The defendants rely on affidavits of Mr Anthony Ellis sworn 22 May 2009, Mr Terrence Hewitt sworn 22 May 2009 and Mr Christopher Dunnell sworn 25 May 2009 and 29 May 2009. The following summarises much of what emerges from the affidavits. Naturally, it does not involve any final findings of fact.
As will appear, the evidence ultimately given by Mr Horsman in his second and subsequent affidavits differs from what was said in his first affidavit.
Mr Horsman is the sole shareholder and director of the second plaintiff, Westmont International…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] WASC 166
Decision Date: 12 JUNE 2009

CaseChat Overview and Summary

Horsman v MG Kailis Pty Ltd involves a legal dispute between the plaintiffs, Horsman, and the defendant, MG Kailis Pty Ltd, over an alleged equitable interest in a boat. The matter was heard in the Supreme Court of Western Australia. The plaintiffs sought an interlocutory injunction to prevent the defendant from dismantling and dealing with the boat, claiming they held an equitable interest in it. The defendant argued that the plaintiffs had delayed in asserting their claim, which prejudiced their position.

The primary legal issue before the court was whether the plaintiffs had established a serious issue to be tried regarding their equitable interest in the boat, as required under Australian Broadcasting Corporation v O'Neill. Additionally, the court had to consider the effect of the plaintiffs' delay in asserting their claim on the grant of the interlocutory injunction. The court also needed to determine if the delay was a sufficient discretionary factor to deny the injunction.

The court examined the plaintiffs' claim for an equitable interest in the boat, identifying five essential elements required to substantiate such a claim. The court found that the plaintiffs faced significant challenges in establishing each element, particularly the fourth and fifth, which posed the greatest obstacles to their success. The court also noted that the plaintiffs had not demonstrated a serious issue to be tried regarding their equitable interest, as outlined in Australian Broadcasting Corporation v O'Neill. Furthermore, the court found that the plaintiffs' substantial delay in asserting their claim was a powerful discretionary factor against granting the injunction. The plaintiffs had been aware since 2005 that the defendant intended to take ownership of the boat, yet they did not respond to several notices from the defendant. Consequently, the court concluded that the plaintiffs' delay had prejudiced the defendant, leading to a waste of time and money in separate proceedings.

In light of these findings, the court refused to grant the interlocutory injunctions sought by the plaintiffs. The court emphasised that the plaintiffs' delay was a significant factor in its decision, as it was relevant both to the grant of the injunction and the merits of the plaintiffs' claim at trial.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

I refer to the observations I have already made as to the merits of the plaintiffs' claim to an equitable interest in the Vessel. I have identified five essential elements of plaintiffs' claim: [97]. As I have explained, I consider that Westmont International Ltd faces substantial hurdles in relation to each element. To my mind, the fourth and fifth appear to provide the greatest obstacles to success on the part of the plaintiffs. I am left in doubt as to whether Westmont International Ltd has established a serious issue to be tried, in the sense explained in Australian Broadcasting Corporation v O'Neill [2006] HCA 46; (2006) 227 CLR 57 [65] ‑ [71]. But if that hurdle is overcome, I would refuse to grant the injunction on account of the plaintiffs' delay. There is no evidence that at any time before April 2009 the plaintiffs ever demanded that the Vessel be transferred to one of them. The plaintiff was aware from 2005 that the defendant wished to have the Vessel removed from its pen. The plaintiffs, by their solicitors, received notice from the defendant in November 2007, March 2008 and May 2008. The effect of the notices were that the defendant understood that the contract with Barontrend was no longer enforceable and that the defendant intended to take steps to become the owner of the Vessel by having Barontrend's title transferred to it. The plaintiffs took no steps to prevent this occurring. Indeed, the plaintiffs did not respond in any way to these emails. Following that, the defendant commenced and prosecuted the proceedings in this court for the reinstatement of Barontrend, the appointment of a liquidator to that company and the transfer by the liquidator of the Vessel to the defendant. In the event that the plaintiffs are entitled to an equitable interest in the Vessel, those proceedings would have been a waste of time and money. Consequently, in my opinion, the defendant has been substantially prejudiced by the delay on the part of the plaintiffs in asserting their right to the Vessel. The plaintiffs have not explained the delay. In my opinion, the plaintiffs' delay is a powerful discretionary factor against the grant of an interlocutory injunction. It is also relevant to the merits of the plaintiffs' claim at trial to an equitable interest: see Meagher, Gummow & Lehane [36‑020]. For these reasons, I would refuse to grant the interlocutory injunctions sought by the plaintiffs.