Karralong Pty Ltd v Wickham Properties Pty Ltd & Churven

[1995] QCA 431

COURT OF APPEAL

[1995] QCA 431

FITZGERALD P
DAVIES JA
MOYNIHAN J

Appeal No 206 of 1994

KARRALONG PTY LTD  Appellant/Plaintiff

and

WICKHAM PROPERTIES PTY LTD       First Respondent/Defendant

and

PHILIP STUART CHURVEN           Second Respondent/Defendant

BRISBANE

..DATE 10/08/95

JUDGMENT

THE PRESIDENT:  This is an appeal from orders made by the Chamber Judge on 27 September 1994 that the appellant, the plaintiff in the action, give security for the first and second defendants' costs of the action, they being the respondents to this appeal, in the sum of $35,000 to the satisfaction of the Registrar; that the action be stayed until the security is given and that the appellant pay the costs of the respondent of and incidental to this application to be taxed.

The circumstances giving rise to the dispute between the parties and the application leading to the orders made on 27 September last year are substantially set out in the reasons for judgment of the primary Judge and need not be repeated.  Suffice it to say for present purposes that the appellant is a lessee of premises from the first respondent of which the second respondent is a director and that the appellant vacated the premises at an early time - that is to say, before the end of the lease period - and now claims substantial damages on a number of bases against the respondents.

The starting point for the purposes of this appeal, in my opinion, is that on the material before him it was generally open to the primary Judge to come to the conclusions to make the findings which he did and to conclude that there is a substantial risk that the respondents will be unable to recover their costs against the appellant if it is unsuccessful in its action.  As to that, no more needs to be said than that.  The appellant is a company with a paid up capital of $2 and is a trustee company and apparently has no assets, other than those to which reference will be made in a moment.

The one issue which may bear a difference, and perhaps more complex appearance before this Court than before the chamber Judge, concerns certain property left on the premises when the appellant departed.  Some admittedly belonging to the appellant and some quite possibly doing so.  As to this, His Honour said - and I am reading from page 182 of the record - that dealing with a submission by counsel on behalf of the appellant before the chamber Judge that because the respondents were already secured by reason of their possession of chattels of the appellant valued in excess of the amount of the likely award of security, security should not be ordered.  His Honour said:

"For the reason that their - that is to say, the property's unavailability is uncertain, the value is uncertain and the right to use to them in this manner

is unclear, I do not accept that aspect of counsel's submissions."

On the material before him, I am not persuaded that His Honour's conclusions on these matters were wrong.  Before us consideration was also given to the possibility that that issue should be reconsidered, at least in the context of the addition of a contention requiring the return of the chattels or their value to the appellant.

The led to the introduction of arguments based on the construction of Clause 13.10 of the lease. Perhaps its validity under the Property Law Act 1974 is amended, if it had the meaning contended for by the respondents, and perhaps also the consequence of circumstances attending the vacation of the premises by the appellant and the appellants permitting some of the material property to remain there.

I am not convinced that the ownership of the chattels or the entitlement to their value is likely to be answered in favour of either party on the material which was before the primary Judge for the arguments we have heard here, and it is an open issue legitimately in dispute which could be resolved either way.

Further, under Clause 13.10 itself, any entitlement of the appellant to the property or to have the property used to satisfy in whole or in part a claim which the respondent as lessor is bringing against the appellant in another proceeding can be dealt with, and it may well be open to the appellant to raise its entitlement under Clause 13.10 by way of defence and, if necessary, counterclaim in that proceeding which is being pursued in the Magistrates Court as I think substantially the claim for the first respondent lessor against the appellant for rent.

Accordingly, I do not consider that the appellant is entitled to have the appeal decided on the footing that the property or its value will be available to the respondents if the appellant otherwise fails.  There being no other basis on which this Court should interfere with findings open to the primary Judge and made by him, in my opinion, the appeal should be dismissed with costs to be taxed.

DAVIES JA:  I agree.

MOYNIHAN J:  So do I.

THE PRESIDENT:  The order of the Court is appeal dismissed with costs to taxed.

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