Kendle v Melsom

[1998] HCA 13

HIGH COURT OF AUSTRALIA

BRENNAN CJ,
McHUGH, GUMMOW, KIRBY AND HAYNE JJ

IVAN JOHN KENDLE & ANOR  APPELLANTS

AND

PETER MICHAEL MELSOM & ANOR  RESPONDENTS

Kendle v Melsom [1998] HCA 13
25 February 1998
P5/1997

ORDER

1. Appeal allowed in part.

1. Set aside order 3 of the orders of the Full Court of the Supreme Court of Western Australia and in lieu thereof order that pars 1 to 5 of the orders made by Parker J dated 1 May 1995 be set aside and in lieu thereof it be declared that the appointment of the respondents as receivers and managers on 12 June 1986 is valid.

1. Otherwise appeal dismissed with costs.

On appeal from the Supreme Court of Western Australia

Representation:

R H B Pringle QC for the appellants (instructed by Leonard Cohen
& Company)

R A Conti QC with K L Christensen for the respondents (instructed by Tottle Christensen)

Notice:  This copy of the Court’s Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Ivan John Kendle & Anor v Peter Michael Melsom & Anor

Mortgages - Receivers and managers – Joint and several appointment – Validity of appointment – Nature of duties of appointees – Effect of appointment on liability in tort.

1. BRENNAN CJ and McHUGH J.   The respondents Messrs Melsom and Robson ("the Receivers"), were appointed by the Commonwealth Development Bank of Australia ("the Bank"), to be the receivers and managers of the undertaking and assets of Velcrete Pty Ltd ("Velcrete").  The appointment was made pursuant to the authority conferred on the Bank by an equitable mortgage ("the Charge") given by Velcrete, whereby Velcrete charged its assets to secure advances by the Bank.  The assets charged included those it held as trustee under a Deed of Trust.  Gummow and Kirby JJ have stated the relevant terms of the Charge, the Appointment and the Indemnity relating to the appointment and powers of the Receivers.  Velcrete and its successor as trustee, Mr Kendle, are the appellants.

2. The appellants are plaintiffs in an action in the Supreme Court of Western Australia in which the Receivers are sued as defendants in tort.  By the appellants' Further Re-Amended Statement of Claim, they allege:

   "13.  From 12th June 1986 until 27th July 1988 the Defendants, and from 27th July 1988 to date, the First Defendant [Mr Melsom] -

   (a)    took and retained possession of the land and carried on the business thereon;

   (b)    in carrying on the business used plant and equipment of the successive trustees of the trusts in the said deed ('the trustees');

   (c)    disposed of the trustees' chattels, stock and lease of a sand pit;

   (d)    collected or purported to collect debts due to the trustees from their trade debtors.

   14.    From 12th June 1986 to 27th July 1988 the Defendants by themselves, their servants and agents trespassed upon the land.

   16.    From 27 June 1988 to date, the First Defendant, by himself, his servants and agents, have trespassed upon the land."

3. The…