Lifestyle Property Partners Pty Ltd v O’Reilly

[2024] NSWSC 311

Supreme Court

New South Wales

Medium Neutral Citation:

Lifestyle Property Partners Pty Ltd v O’Reilly [2024] NSWSC 311

Hearing dates:

22 March 2024

Date of orders:

27 March 2024

Decision date:

27 March 2024

Jurisdiction:

Common Law

Before:

Schmidt AJ

Decision:

(1)   Declare that the plaintiff is entitled to immediate possession of:

(a)   Halimas Serenata (registration number XXXXX X); and

(b)   Halimas Dancing Shadow (registration number XXXXX X).

(2)   (In the event the Queensland Police return Halimas Serenata and Halimas Dancing Shadow to the defendants), order that the defendants deliver them to the plaintiff or its agents.

(3)   Order that the first defendant do all things necessary to cancel or remove the entry of Personal Property Securities Register number XXXXX XXXXX XXXXX in respect of the 6 Arabian mares.

(4)   Order that the defendants pay the plaintiff the sum of $4007 (as damages) within 28 days.

(5)   Order the defendants pay the plaintiff’s costs of these proceedings as agreed or assessed.

Catchwords:

PERSONAL PROPERTY – Personal Property Securities Act 2009 (Cth) – personal property securities register – charge registered on the basis of an agistment agreement which never came into existence – whether defendant had any interest in the Arabian mares capable of being registered as a security interest – no security interest ever came into existence

TORTS – interference with goods – detinue

Legislation Cited:

Personal Property Securities Act 2009 (Cth), ss 8(1), 12, 207

Uniform Civil Procedure Rules 2005 (NSW), r 42.1

Cases Cited:

CHEP Australia Ltd v Bunnings Group Ltd [2010] NSWSC 301

John F Goulding Pty Limited v The Victorian

Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11

Railways Commissioners (1932) 48 CLR 157; [1932] HCA 37

Category:

Principal judgment

Parties:

Lifestyle Property Partners Pty Ltd (Plaintiff)
Karen O’Reilly (First Defendant)
Francis Curr (Second Defendant)

Representation:

Counsel:
C H Cassimatis (Plaintiff)

Solicitors:
Bilbie Faraday Harrison (Plaintiff)

File Number(s):

2023/00345681

Publication restriction:

Nil

JUDGMENT

1. When Lifestyle Property Partners Pty Ltd commenced these proceedings in 2023 it sought interlocutory relief in the form of an order restraining Ms O’Reilly from selling or otherwise dealing with the six identified pure bred Arabian mares then in her possession, which it owned and which are registered with the Arabian Horse Society of Australia. The final relief sought included orders for the return of the horses and damages. But Ms O’Reilly had purportedly sold the mares to Mr Curr, who was later also joined as a defendant in the proceedings. He sold four of the mares at auction for modest sums, before the Queensland police stock squad seized the remaining two.

2. Lifestyle was able to buy the other four mares from those to whom Mr Curr had sold them. It finally pursued orders which will ensure the return of the other two mares once the police investigation is complete, as well as removal of a charge Ms O’Reilly registered under the Personal Property Securities Act 2009 (Cth) and the recovery of damages it has suffered, as well as indemnity costs.

3. Ms O’Reilly and Mr Curr have not been active in the proceedings, despite at one point serving on Lifestyle a proposed defence and communicating from time to time with the Court.

4. On 19 March 2024, by email to my associate, Ms O’Reilly sought an adjournment of the hearing, advising that counsel had been retained and steps towards a settlement had been achieved at a mediation, which she sought to pursue further. She was advised that such an application had to be pursued in accordance with the Rules, by filing a motion supported by an affidavit. None was filed, nor was there any appearance at the hearing to defend Lifestyle’s case by either defendant.

5. At the hearing, Lifestyle denied that there had been any mediation and the hearing proceeded undefended. It emerged that during their dealings Ms O’Reilly had not been entirely honest about other matters, including as to her knowledge of Mr Curr’s whereabouts.

Conclusion

6. The Court must determine whether the orders Lifestyle finally pressed can justly be made.

7. It is relevant that they were not opposed despite Ms O’Reilly having claimed in her written communications that she and Lifestyle had entered an unsigned agistment agreement and a 5-year lease of the mares, the breach of which had not only permitted her to sell the mares, but provided a basis for her registration of the charge which Lifestyle seeks to have removed and service of the defendants’ proposed defence, which has not been pursued.

8. In the result, on the undisputed evidence, I am well satisfied that justice requires the orders Lifestyle pressed now be made. The reasons for these conclusions follow.

The undisputed evidence

9. The evidence established, in short, service of all the relevant documents on the defendants. On their own communications there is no question that they had ample opportunity to defend the orders pressed against them, but elected not to do so.

10. The evidence also established that the six Arabian mares registered with the Society were owned by Lifestyle; that the parties never entered into a formal written agreement for their lease or agistment, as Ms O’Reilly claimed; she never had any right to sell the horses; the lease and agistment documents she proposed were never accepted or executed by Lifestyle, with the result that she never had an entitlement to register a charge under the PPS Act as she did; despite this that charge still remains on the statutory register; and that Mr Curr was also not entitled to deal with the mares as he did.

11. Mr Holmes, Lifestyle’s director, gave unchallenged evidence about the value of the mares, which ranged from $5,000 to $100,000; the circumstances in which they came into Ms O’Reilly’s possession in December 2022 under an unwritten arrangement; the termination of that arrangement in February 2023; and its unsuccessful pursuit of the return of the mares, before and after they were sold by Ms O’Reilly. His evidence included that:

1. An oral arrangement was entered so that Ms O’Reilly could breed the mares with her stallions during a short term 12-month lease for which she would not be required to make any upfront payment. But she was to be responsible for meeting their transport costs and attending to their sheltering, feeding, caring, maintaining, artificial insemination and other veterinary costs.

2. Ms O’Reilly took the mares, but later sought payment for their agistment under a written agreement which she proposed the parties enter, as well as proposing that written leases for 5 years be entered, which could be registered with the Society. But neither were agreed or entered by Lifestyle, which then terminated the oral agreement. Nor were the leases registered with the Society, under the system which it operates for such leasing.

3. After Lifestyle terminated the oral agreement, it unsuccessfully attempted to recover the mares from Ms O’Reilly, before bringing these proceedings. She refused to return them; later claimed a personal property security interest in the mares, which she registered under the PPS Act on the basis of claimed agistment; and later advised Lifestyle’s solicitors that if the agistment fees she claimed were outstanding were not paid, she would sell the mares.

4. Despite Lifestyle’s objections in July 2023, shortly before these foreshadowed proceedings were commenced, Lifestyle became aware that Ms O’Reilly had purported to sell the mares. The claimed purchaser proved to be Mr Curr, with whom she was living and who had transferred $6,600 to Ms O’Reilly’s bank account. He confirmed that he was in possession of the mares and was advised of Lifestyle’s legal ownership of them, but he also failed to return them. He was then joined as a defendant to these proceedings.

5. Mr Curr later sold four of the mares at auction to third parties from whom Lifestyle bought them for modest sums totalling $1,927. The other two mares were recovered by the police Stock Squad, which proposes to return them to Lifestyle on completion of their investigation, unless the defendants establish ownership.

12. Despite the attempts at resolving the dispute by the return of the mares which Lifestyle sought, the many written communications between its solicitors and the defendants and their communications to the Court at various times, neither Ms O’Reilly nor Mr Curr appeared to defend the orders Lifestyle pressed.

Lifestyle’s case is established

13. I am satisfied that Lifestyle has established an evidentiary basis for its undisputed case in detinue. Namely, that it had made lawful demands for return of the mares which it owned, which were all wrongly refused.

14. A claim in detinue is normally shown by request or demand for the return of goods, and a refusal to comply: John F Goulding Pty Limited v The Victorian Railways Commissioners (1932) 48 CLR 157 at 167; [1932] HCA 37, discussed in CHEP Australia Ltd v BunningsGroup Ltd [2010] NSWSC 301 at [183]. It is even sufficient if a bailee of goods has, without permission and in default or breach of duty, parted with possession of the bailed goods so as to incapacitate itself from returning them.

15. On the evidence this is clearly such a case, both Lifestyle’s demands and Ms O’Reilly and Mr Curr’s refusals having been established by Mr Holmes’ undisputed evidence and the correspondence between Lifestyle’s solicitors, Ms O’Reilly and Mr Curr.

16. Ms O’Reilly lost the right to possession of the mares after the oral agreement was terminated in April 2023 and their return was repeatedly demanded, the agreements she had proposed for their agistment and 5-year lease having been refused. Still, she refused to return the mares. That she never acquired the right to sell them as she claimed she did to Mr Curr, must be accepted. Nor did he.

17. Ms O’Reilly was also never granted a personal property security interest in the mares. The evidence established that the agistment agreement under which she claimed to have such an interest on her application, was never entered by the parties, Lifestyle refusing to enter the proposed agreement or 5-year leases and never executing any of them.

18. Lifestyle has thus also established a basis for the order it seeks in relation to Ms O’Reilly’s registered security interest in the mares.

19. Ms O’Reilly took possession of the mares under her oral agreement with Lifestyle, which did not provide for the mares’ agistment, as the later written agreement she proposed did. The oral agreement was terminated in February 2023 and neither the written agistment agreement or proposed 5-year leases were ever entered, or in the latter case registered with the Society as she proposed.

20. It follows that the evidence established that Ms O’Reilly never obtained an interest in the mares capable of being registered under the PPS Act, despite her claim of such an interest under the agistment agreement.

21. Interests to which the Act does not apply are specified in s 8(1). They include a lien, charge, or other interest in personal property that is created, arises or is provided for under a law of the Commonwealth (other than the PPS Act), a State or a Territory, “unless the person who owns the property in which the interest is granted agrees to the interest”: s 8(1)(b).

22. Lifestyle has never granted or agreed that Ms O’Reilly attained any interest in the mares, other than under the original oral arrangement which it terminated and on which Ms O’Reilly did not rely to claim the security interest in the mares which she registered. This is understandable because that agreement did not require Lifestyle to pay her anything.

23. Ms O’Reilly’s claimed interest in the mares was under an agreement for their agistment. She had proposed a written agistment agreement requiring payment of $100 per week per horse, but it never came into existence. Accordingly, it was incapable of giving her a “security interest” in the mares, as that term is defined in s 12 to mean “a transaction that, in substance, secures payment or performance of an obligation”: s 12(1). There was no such obligation.

24. It is s 19(1) of the Act which makes a ‘security interest’ enforceable against a grantor. But Ms O’Reilly did not participate in the proceedings in order to establish that she had been granted such an interest in the mares, or to resist Lifestyle’s claims in respect of her registration of her claimed interest in them. As I have explained, the evidence does not establish that such an interest ever came into existence.

25. It follows that Ms O’Reilly has no such interest and that the order Lifestyle sought about that registration must be made, in exercise of the Court’s undoubted jurisdiction: s 207.

26. Mr Holme’s undisputed evidence also establishes that the now modest damages which Lifestyle pursues against the defendants have been suffered, given its recovery of the horses in the circumstances he explained.

Costs

27. Lifestyle is thus also entitled to a costs order, the usual order under the Uniform Civil Procedure Rules 2005 (NSW) being that costs follow the event: r 42.1. In this case, that is an order that Ms O’Reilly and Mr Curr bear Lifestyle’s costs, as agreed or assessed.

28. The Court does have power to make an indemnity costs order, which it will exercise in the event of misconduct in the proceedings: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11. But in this case, as I have explained, Ms O’Reilly and Mr Curr have not participated in the proceedings and did not appear to resist the orders which Lifestyle sought.

29. In those circumstances, I am not satisfied that a just basis for an indemnity costs order has been established. Accordingly, I will make the usual order.

Orders

30. For these reasons I:

1. Declare that the plaintiff is entitled to immediate possession of:

1. Halimas Serenata (registration number XXXXX X); and

2. Halimas Dancing Shadow (registration number XXXXX X).

2. (In the event the Queensland Police return Halimas Serenata and Halimas Dancing Shadow to the defendants), order that the defendants deliver them to the plaintiff or its agents.

3. Order that the first defendant do all things necessary to cancel or remove the entry of Personal Property Securities Register number XXXXX XXXXX XXXXX in respect of the 6 Arabian mares.

4. Order that the defendants pay the plaintiff the sum of $4007 (as damages) within 28 days.

5. Order the defendants pay the plaintiff’s costs of these proceedings as agreed or assessed.

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Decision last updated: 27 March 2024