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Johnson Matthey (Aust) Ltd v Dascorp Pty Ltd

Johnson Matthey (Aust) Ltd v Dascorp Pty Ltd

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Case Copied 8 August 2003 79 min read

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ely F

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 7366 of 2001

JOHNSON MATTHEY (AUST) LTD	Plaintiff
v
DASCORP PTY LTD	First Defendant
DAVID ANTHONY SECCHI	Second Defendant
JULIETTE SECCHI	Third Defendant
STONEPACK PTY LTD	Fourth Defendant

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JUDGE:	REDLICH J.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	13, 14, 15, 18, 19 and 20 November 2002
DATE OF JUDGMENT:	8 August 2003
CASE MAY BE CITED AS:	Johnson Matthey (Aust) Ltd v Dascorp Pty Ltd and Others
MEDIUM NEUTRAL CITATION:	[2003] VSC 291

CATCHWORDS Conversion – Defence of estoppel by omission - Negligence by owner – Whether sufficient to found estoppel - Ambit of s.27 Sale of Goods Act;
Liability of directors for tortious conduct of corporation or primary or secondary liability - Express or implied direction as to unlawful acts; Whether knowledge of unlawfulness or assumption of responsibility by director necessary - Scope of doctrine of limited liability – Limitation of rule in Said v Butt;
Rule in Brown v Dunne – Case management and procedural orders;
Time of conversion –Acquisition of plaintiff’s property in different condition to that when stolen - Value of goods converted – Measure of damages.

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M. Clarke	Mills Oakley
For the Defendants	Mr S. Horgan	Best Hooper

TABLE [L1]OF CONTENTS

The facts________________________________________________________________________ 3

The defendants' reliance upon s. 27 Sale of Goods Act 1958______________________________ 5

(a) Contributory negligence by the plaintiff_______________________________________ 6

(b) Stock control procedures___________________________________________________ 6

(c) The plaintiff's security system_______________________________________________ 8

(d) Extent to which public had access to gold lost in the plaintiff's processing_________ 10

(e) Failure of the plaintiff to notify AGE of the lost gold___________________________ 11

The defence of estoppel by omission/negligence________________________________________ 12

(a) Inadequate stock control procedures_________________________________________ 12

(b) Failure to take adequate measures to prevent theft_____________________________ 12

(c) Failure to notify gold dealers that its gold may be offered for sale_________________ 13

Ambit of the estoppel in s. 27 Goods Act 1958_________________________________________ 14

Was the plaintiff's conduct such as to preclude it from denying Mr Knight's authority to sell?__ 23

The Directors of AGE____________________________________________________________ 26

The company liable for conversion__________________________________________________ 29

Second and thirdnamed defendants sued as joint or primary tortfeasors or as Directors liable for the tortious wrong of the company____________________________________________________________ 30

The defences of the Directors_______________________________________________________ 31

Concurrent liability of company and director where the director performs the tortious acts____ 31

Conclusion as to primary liability of Directors________________________________________ 34

The state of mind of the Directors prior to October 1996________________________________ 34

State of mind of Directors from October 1996_________________________________________ 36

Failure to comply with the rule in Browne v Dunn in attacking the directors' credit_________ 37

When are Directors liable for the corporation's tortious acts?____________________________ 38

Where a Director induces breach of their companies contract____________________________ 41

Make the tort their own___________________________________________________________ 44

Direct or procure test_____________________________________________________________ 46

Where the tort involves mens rea____________________________________________________ 55

Conversion – a tort of strict liability_________________________________________________ 55

The assumption of responsibility test________________________________________________ 57

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: [2003] VSC 291
Decision Date: 8 August 2003

CaseChat Overview and Summary

Johnson Matthey (Aust) Ltd brought proceedings against Dascorp Pty Ltd for conversion of goods, among other claims. The dispute centred around the unlawful conversion of the plaintiff's property by an employee of the defendant corporation. The case was heard in the Federal Court of Australia. The central legal issues before the court were whether the defendant could rely on the defence of estoppel by omission, the extent to which the plaintiff could hold the directors of the defendant corporation liable for the tortious conduct of the corporation, and the measure of damages for the conversion of goods.

The court examined whether the defendant could rely on the defence of estoppel by omission given the negligence of the owner of the property. It was determined that negligence alone was insufficient to found a claim of estoppel by omission. The court also addressed the scope of section 27 of the Sale of Goods Act and the extent to which the directors could be held liable for the tortious conduct of the corporation. The court found that neither an express or implied direction by a director nor knowledge of the unlawfulness was necessary to establish secondary liability under the doctrine of limited liability. Additionally, the court considered the rule in Brown v Dunne in relation to case management and procedural orders, the timing of conversion, and the value of goods converted in determining the appropriate measure of damages.

The court held that the defendant could not rely on the defence of estoppel by omission. The directors of the defendant corporation were held liable for the tortious conduct of the corporation under the doctrine of limited liability. The court awarded damages to the plaintiff for the conversion of goods, taking into account the condition of the property at the time of conversion. The court ordered the defendant to pay the plaintiff's costs of the proceedings.

Orders