Industrial Cleaning Systems Pty Ltd v Andrews
[2001] WASC 185
INDUSTRIAL CLEANING SYSTEMS PTY LTD -v- ANDREWS & ORS [2001] WASC 185
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASC 185 | |
| 20/07/2001 | |||
| Case No: | CIV:1948/2001 | 6 JULY 2001 | |
| Coram: | WHITE AUJ | 6/07/01 | |
| 12 | Judgment Part: | 1 of 1 | |
| Result: | Mandatory injunction granted | ||
| PDF Version |
| Parties: | INDUSTRIAL CLEANING SYSTEMS PTY LTD (ACN 079 225 915) MICHAEL ANDREWS PHILLIP HAMMER STEPHEN CARTWRIGHT CT FREIGHT PTY LTD (ACN 002 489 705) ALAN MACKIE |
Catchwords: | Mandatory injunction Respondents entering applicant's business premises, despite protest and seizing and removing the applicant's goods, including goods to which the respondents do not allege any interest or entitlement Whether the respondents should list the goods so removed and should restore them to the applicant without delay Turns on own facts |
Legislation: | Nil |
Case References: | Nil Nil |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CHAMBERS
- Plaintiff
AND
MICHAEL ANDREWS
Second Defendant
PHILLIP HAMMER
Third Defendant
STEPHEN CARTWRIGHT
Fourth Defendant
CT FREIGHT PTY LTD (ACN 002 489 705)
Fifth Defendant
ALAN MACKIE
Sixth Defendant
(Page 2)
Catchwords:
Mandatory injunction - Respondents entering applicant's business premises, despite protest and seizing and removing the applicant's goods, including goods to which the respondents do not allege any interest or entitlement - Whether the respondents should list the goods so removed and should restore them to the applicant without delay - Turns on own facts
Legislation:
Nil
Result:
Mandatory injunction granted
Representation:
Counsel:
Plaintiff : Mr M L Bennett
Second Defendant : No appearance
Third Defendant : No appearance
Fourth Defendant : No appearance
Fifth Defendant : No appearance
Sixth Defendant : No appearance
Solicitors:
Plaintiff : Bennett & Co
Second Defendant : No appearance
Third Defendant : No appearance
Fourth Defendant : No appearance
Fifth Defendant : No appearance
Sixth Defendant : No appearance
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Nil
(Page 3)
1 WHITE AUJ: On 6 July 2001, I granted a mandatory injunction in favour of the plaintiff in the following terms:
"1. The First Defendant produce a list of goods seized on Monday, 2 July 2001 from the Plaintiff's premises being 1780 Albany Highway, Kenwick and verify such list on oath by no later than midday on Monday, 9 July 2001.
2. The Defendants and each of them deliver at the Defendants' cost to the Plaintiff's premises being 1780 Albany Highway, Kenwick as soon as is reasonably possible and no later than 5.00pm on Monday, 9 July 2001 the goods taken from the Plaintiff's said premises on Monday, 2 July 2001 including the goods identified in the lists produced by the First Defendant under order 1.
3. After receipt of the goods the subject of order 2, the Plaintiff will record precisely any of those goods which it subsequently disposes of.
4. The costs of this application be reserved.
5. There be liberty to apply."
2 The plaintiff's application was supported by the affidavits of its Managing Director, Graham Thomas Cooke and its Sales Manager, John Bowyer. Although there are six defendants cited in the writ, the relief granted by me was directed to the first defendant alone and I shall refer to the first defendant hereinafter as "the defendant".
3 The matter came before me as one of urgency. As there was another urgent application for an injunction immediately following, I indicated that I would make the orders without giving reasons but that, if asked, I would be prepared to furnish reasons later. Such a request has now been made by the plaintiff.
4 The evidence before me was to the effect that, since 1998, the defendant had been supplying industrial cleaning products to the plaintiff, as ordered from time to time by the plaintiff, for the purposes of the plaintiff's business.
5 There is a document entitled "KARCHER PTY LTD (ABN 76 002 721 226) TERMS AND CONDITIONS OF TRADE." A copy of that document was attached to the letter from the defendant to the
(Page 4)
- plaintiff dated 2 July 2001, to which I refer hereunder. Mr Cooke says that the records of the plaintiff reveal that such a document is annexed to an application for commercial credit issued by the defendant. The plaintiff has only an uncompleted and unsigned copy of the commercial credit application document and Mr Cooke says that he does not believe that the plaintiff ever completed and executed a commercial credit document issued by the defendant. While the plaintiff does not, therefore, admit that the relationship between the parties was governed by those Terms and Conditions, it was nonetheless prepared to argue its application as though the Terms and Conditions did apply.
6 Included in those Terms and Conditions were cl 9 and cl 14, which read:
"9. Title, Possession and Risk
9.1 Notwithstanding anything to the contrary expressed or implied in these Trading Terms:
(a) Property in and title to all goods supplied by Karcher to the Buyer shall remain with Karcher and shall not pass to the Buyer until Karcher has received payment in full for all goods and the Buyer has discharged in full all of its accounts with Karcher relating to all contracts made with Karcher.
(b) If payment is made by the Buyer by way of a cheque property in and title to the goods title shall not pass to the Buyer until the cheque has been honoured.
(c) Until the goods are paid in full the Buyer shall hold the goods as bailee for Karcher and shall keep the goods as a fiduciary for Karcher and shall store and identify the goods in a manner that clearly shows Karcher's ownership thereof and shall pay the proceeds of any sale of the goods into a separate bank account.
(d) In the event that the Buyer fails to pay Karcher for the goods by the due date
(Page 5)
- required for payment under these Trading Terms, the Buyer (without prejudice to Karcher's rights as an unpaid seller or any of its other rights and remedies to retake possession of Karcher's goods from the Buyer) hereby agrees to deliver up the goods to Karcher upon demand by Karcher and the Buyer irrevocably authorises and consents to Karcher to entering upon its premises and retaking possession of the goods which remain unpaid and thereupon Karcher shall be entitled to resell the goods to a third party.
- (e) The parties acknowledge that by supplying or accepting goods subject to these Trading Terms they are not intending to create a charge, mortgage or other security interest over any of the goods supplied.
- 9.2 Notwithstanding clause 9.1, all goods shall be at the risk of the Buyer upon delivery of the goods by Karcher and the Buyer shall at its cost insure the goods for their full insurable value;
9.3 The Buyer's property and all property and materials supplied to Karcher by or on behalf of the Buyer will be held at the Buyer's risk and Karcher accepts no liability whatsoever for loss of or damage to such property or material unless otherwise agreed by Karcher in writing.
9.4 Nothing contained herein shall prevent the Buyer from selling goods to any third party provided that the proceeds of any sale shall be held in trust by the Buyer for Karcher.
…
- 14. Default by Buyer
14.1 For the purposes of these Trading Terms, an Event of Default means any of the following:
(Page 6)
- (a) where the Buyer is a corporation:
(i) an application is made to wind-up the Buyer, or a receiver, a receiver and manager or administrator or controller (as defined in the Corporations Law) is appointed in respect of the Buyer or any of its assets;
(ii) the Buyer makes an arrangement or composition with the Buyer's creditors or attempts to make such an arrangement or composition;
(iii) the Buyer is unable to pay its debts as they fall due;
(iv) the Buyer shall cease carrying on business or threaten to do so;
(b) if the Buyer is an individual, the Buyer becomes bankrupt or makes an arrangement or composition with his creditors or attempts to do so.
- 14.2 If an Event of Default occurs in relation to the Buyer, or the Buyer is otherwise in default of its obligations under these Trading Terms, then without prejudice to Karcher's other rights:
(a) all monies then owing to Karcher (including any monies which are not otherwise be payable until a later date or dates) shall become immediately due and payable; and
(b) the Buyer shall pay to Karcher upon demand all costs (including without limitation all legal costs on a solicitor/own client basis) and all fees, commissions and charges incurred by Karcher in recovering or attempting to recover all amounts outstanding and payable under these Trading Terms (including fees,
(Page 7)
- commissions and charges paid to mercantile agents) and any dishonour and bank fees incurred by Karcher relating to payments made by the Buyer."
7 Among the papers there is a document headed "KKD 2000 TRADING TERMS ACKNOWLEDGEMENT" apparently emanating from the defendant. Included in that paper is a printed statement: "SETTLEMENTS: - 30 days from statement". The figure "30" is crossed through and preceded by the handwritten figure "60" which is also crossed through and, below, appear the following hand-written words: "For the 2000 rebate payment – account must be settled within 90 days". That is followed by an illegible word, the figure "2001", another illegible word, then "March 31."
8 The plaintiff submitted that the terms of payment to the defendant were 90 days after statement.
9 At about 4.30 pm on 2 July 2001, the defendant served on the plaintiff a Notice of Default in the following terms:
"TAKE NOTICE that you have breached the Terms and Conditions of Trade ('the Trading Terms') of Karcher Pty Ltd ('Karcher') of 2/158 Browns Road, Noble Park, Victoria in that you failed to pay the sum of $30241.07 due by you to Karcher on 30 June 2001, AND TAKE FURTHER NOTICE that as a result of this breach pursuant to paragraph 14.2(a) of the Trading Terms all monies owing by you to Karcher are immediately due and payable and accordingly you are required to immediately pay to Karcher the sum of $68525.25 being the total of the outstanding sum owed by you in respect of purchases made from Karcher up to and including 30 June 2001 AND TAKE FURTHER NOTICE that by reason of the above default Karcher, the details of which were set out in a letter from Karcher to you dated 3 May 2001 and the attachments therein dated 18 May 2001 AND TAKE FURTHER NOTICE Karcher expressly reserves its rights to take such further legal action against you as it may be advised."
10 What took place on 2 July 2001 is described as follows in the affidavit of John Bowyer:
"5. Soon prior to 11.30am on Monday, 2 July 2001 I received a telephone call from Stephen Cartwright (the area
(Page 8)
- representative for commercial product for the First Defendant). He told me a that a truck would be coming to the Plaintiff's premises at 1780 Albany Highway, Kenwick to pick up 2 items of consignment stock.
- 6. At approximately 11.30am Stephen Cartwright and a truck driver arrived in at the Plaintiff's premises in a truck. They proceeded to take the 2 items identified as the consignment goods from the Plaintiff's premises.
7. Approximately 5 minutes after the arrival of Stephen Cartwright and the truck driver, Phillip Hammer (the state manager of Western Australia for the First Defendant) arrived at the Plaintiff's premises. He showed me a facsimile from Brian Barker (an accountant in the Melbourne office of the First Defendant) which was addressed to Phillip Hammer. The facsimile requested that Phillip Hammer seek the payment of moneys for the goods supplied during the month of April 2001. These goods amounted to a value of approximately $30,000. I told Phillip Hammer that I was not authorised to sign cheques and that the managing director was on leave in Exmouth. I said I would attempt to contact him. Soon after my conversation with Phillip Hammer, Stephen Cartwright, the truck driver and Phillip Hammer left the Plaintiff's premises with the 2 items of consignment stock.
8. Between midday and 1.00pm Marjorie Smith (the accounts manager of the Plaintiff) telephoned Phillip Hammer and told him that she had been able to get hold of Mr Cooke and seek his authority for payment. She said that the Plaintiff would organise payment. I was present beside Marjorie Smith when she made this telephone call to Phillip Hammer.
9. Between approximately 3.30pm and 3.45pm I answered a knock on the back door of the Plaintiff's premises. A truck driver alone was present and said he was here to pick up goods and it was a 2 to 3 hour job. I viewed his consignment note (being his instruction sheet) which had recorded on it Phillip Hammer's name and his mobile telephone number. The document also recorded that the
(Page 9)
- goods were to go from the Plaintiff's premises to the CT Freight Pty Ltd warehouse. I took this to mean the CT Freight warehouse at Dampier Road, Welshpool.
- 10. Using the truck driver's consignment note I telephoned Phillip Hammer on his mobile telephone. He said that the truck must have been double booked for the morning pick up and he would attend upon the Plaintiff's premises and sort it out in the next 15 minutes.
11. Approximately 15 minutes after this telephone call 6 more men entered the Plaintiff's premises (joining the truck driver) these men being:
11.1 Michael Andrews (sales operational manager for the First Defendant in Melbourne);
11.2 Phillip Hammer (the state manager for Western Australia for the First Defendant);
11.3 Stephen Cartwright (the area representative for commercial product for the First Defendant);
11.4 a Karcher employee who I recognised as a worker from the warehouse of Karcher in Kewdale. I am unaware of his name;
11.5 a person I know by the name 'Stewart' who is an employee of CT Freight Pty Ltd; and
11.6 a person I know by the name 'Keith' who is an employee of CT Freight Pty Ltd.
12. Upon arrival by the 6 further men at the premises, Mike Andrews handed me a document titled 'Notice of Possession' dated 2 July 2001 which had attached to it a schedule and a document titled 'Karcher Pty Ltd Terms and Conditions of Trade'.
Annexed hereto and marked 'JB1' is a true copy of the Notice of Possession together with the attached schedule and Terms and Conditions of Trade.
13. Mike Andrews upon handing the documents to me stated that the First Defendant would be enforcing the
(Page 10)
- documents. To the best of my recollection a dialogue continued between Mike Andrews and myself on the following terms:
- • I said 'No, that's (the seizure of the goods) is not going to happen.' Whilst I was saying this the men had already commenced seizing goods and wheeling them towards the awaiting truck.
• I said 'Stop - You are not doing this - Please leave the shop now.'
• Mike Andrews said 'No - We are taking the equipment.'
• I said 'What the hell are you guys thinking about in Melbourne to do this.'
• He said 'We've seen the light.'
14. Soon after the conclusion of my conversation with Mike Andrews, I further said to him that I would have to ring the police. He said go ahead and do this. I therefore telephoned the police and informed them of the events. The police did not arrive at the premises until approximately 1 to 1-1/2 hours after the completion of the seizure of the goods.
15. During the seizure of the goods, the men proceeded to pick up 5 display racks together with all stock, spare parts and accessories on these racks. The stock on these racks included stock purchased from third parties. The men were simultaneously taking goods from the showroom and the workshop.
16. None of the men present compiled a list of the goods taken. Given the number of men involved and the speed of the seizure operation I was unable to compile a list of goods taken.
17. Prior to the seizure operation there was approximately $106,000 of goods upon the Plaintiff's premises. I now estimate that there is only approximately $36,000 of inventory.
18. The seizure operation lasted approximately 30 to 45 minutes.
19. At approximately 4.45pm, being soon after the seizure operation had been completed, Stephen Cartwright
(Page 11)
- telephoned me and said words to the effect of - 'I didn';t know Mike Andrews was here until this afternoon. I am very sorry about what has happened.'
- 20. The front door of the Plaintiff's premises is locked each evening by 2 key action lock bolts. These bolts are kept on a display rack. When I came to lock up the Plaintiff's premises on the night of Monday, 2 July 2001 I realised that the bolts had been taken by the First Defendant. I therefore telephoned Stephen Cartwright at approximately 2.00pm. I informed him of the problem. He said that he would make efforts to speak to Phillip Hammer."
11 In the circumstances, the first defendant seems not to have afforded the plaintiff any reasonable opportunity to pay the amount of the alleged debt to it, before proceeding to seize and remove the goods.
12 Of the goods removed by the defendant, some were non-Karcher merchandise, some were Karcher manufactured product owned by customers of the plaintiff, upon which repairs "and the like" were being conducted, some were Karcher merchandise supplied by suppliers other than the defendant and some were Karcher manufactured product which had been paid for in full by the plaintiff. Some of the goods were those supplied by the defendant and not yet paid for by the plaintiff.
13 Mr Bowyer said that a sum of approximately $22,705.82 was due to the defendant, if the trading terms were 60 days. He said that the approximate value of the goods removed was $73,154.22.
14 In the course of his submissions, the first defendant's counsel said:
". . . I am instructed that the defendant accepts that to the extent that goods taken were not unpaid for, it should return those goods and is prepared to do it. The difficulty is the identification of those goods and I'm instructed that to cross-reference, as it were, in a comprehensive way, the goods taken against those supplied and unpaid for is a process which will take until about Tuesday evening to complete."
15 I asked Mr Chaney:
"Does your client (sic. accept) that he has no shadow of a right to take the other goods? That seems an extraordinary situation.
(Page 12)
16 Counsel replied:
"Yes, your Honour. As I understand it, it accepts that for the purposes of these proceedings and the disposal of the interlocutory injunction - - -"
17 Of course, if the trading terms were in fact 90 days, as suggested in the document to which I have referred above, no amount was then due for payment to the defendant.
18 At the hearing, the defendant was represented by experienced counsel. The defendant had received copies of the application and affidavits prior to the hearing. It may very well be that there was not sufficient time to enable the defendant to prepare, swear, file and serve replying affidavits. However, the defendant did not seek to produce any oral evidence to answer the plaintiff's claims and counsel did not advance any argument directed to demonstrating that the defendant might have some legal right to justify its extraordinarily high-handed action. At best for the defendant, it seems clear that it had no right to take away goods which it had not supplied or to which it had no entitlement. Although the defendant had removed the goods on Monday 2 July 2001, it had not made a list of them by Friday 6 July, when the matter came before me. The defendant offered to prepare a list the following week and, in the meantime, to continue to detain the goods seized, with an undertaking to preserve them. However, in the absence of any right to possess the goods and in the light of the damage to the plaintiff's business and business reputation occasioned by the removal and detention of the plaintiff's goods from its business premises, it seemed to me that it would be unjust to permit the defendant to continue in possession of the plaintiff's goods.
19 For these reasons, I granted the plaintiff's application for injunctive relief.
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