Lowtex Pty Ltd v Maembe Pty Ltd
[1999] QDC 245
•24 September 1999
IN THE DISTRICT COURT
HELD AT BRISBANE
QUEENSLAND
[Lowtex Pty Ltd v Maembe Pty Ltd]
[Before FORDE DCJ]
Plaint No 2585 of 1999
BETWEEN:
LOWTEX PTY LTD
Plaintiff
AND:
MAEMBE PTY LTD
Defendant
JUDGMENT
Judgment delivered: 24 September 1999
Catchwords: Lease - Termination for breach of obligation to pay rent - failure of tenant to remove fixtures and fittings - abandonment - rights of landlord to fixtures and fittings; Estoppel - exemplary damages - Ex parte Whelan [1986] 1 QdR 500; Martin v King McLelland J unreported judgment 2 July 1996; D’Arch v Burelli Investments Pty Ltd (1987) 8 NSWLR 317; Cook v Saroukos (1989) 97 FLR 33; Oakley v Lyster [1931] 1 KB 148; Capital Finance Co. Ltd v Bray [1964] 1 All ER 603; Crowther v AGC Ltd (1985) ATR 80-709; GM and MY Campbell Pty Ltd v Colton and Anor (Full Court of Queensland 3886188 unreported judgment 18 October 1991); Ocean Lines (Aust) v Macquarie Bank Limited McKenzie J, unreported judgment 26 September 1996; DTR Nominees Pty Ltd v Motor Homes Pty Ltd and Anor (1977-1978) 138 CLR 423; Re Jigrose Pty Ltd (1994) 1 QdR 381; Port of Melbourne Authority v Ansun (1990) 169 CLR 332; Spencer v Commonwealth of Australia (1907) 5 CLR 418; Pargiter v Alexander (1995) ATR 81-549
Counsel: Mr A Allan for the Plaintiff
Mr C Wilson for the Defendant
Solicitors: Kenny and Partners for the Plaintiff
Clayton Utz for the Defendant
Hearing Dates: 26 and 27 August 1999
IN THE DISTRICT COURT
HELD AT BRISBANE
QUEENSLAND
Plaint No 2585 of 1999
BETWEEN:
LOWTEX PTY LTD
Plaintiff
AND:
MAEMBE PTY LTD
Defendant
REASONS FOR JUDGMENT -FORDE D.C.J.
Delivered the 24th day of September 1999
Introduction
By a sub-lease dated 23rd day of April 1990 entered into by the plaintiff, Lowtex Pty Ltd as sub-lessee and the defendant, Maembe Pty Ltd as sub-lessor, the plaintiff took the sub-lease of shop D7, Inala Plaza Shopping Centre, Inala Avenue, Inala. The term of the sub-lease was for five years ending on the 19th November 1994. The Plaintiff remained in occupation of the said premises until on or about 28th or 30th January 1995 pursuant to the holding over provisions contained in the said sub-lease. The plaintiff was in breach of the terms and conditions of the said sub-lease in that it failed to pay rental due to the defendant in the sum of $91,703.57. Judgment was obtained by the defendant against the plaintiff and the directors of the plaintiff company as guarantors in the sum of $92,557.97. Judgment was attained on the 3rd day of March 1995. The said sum was paid by the directors of the plaintiff company to the defendant in or about November 1995.
Background of Present Action
The plaintiff was the owner of the plant, equipment and fittings (hereinafter referred to as the said “items”) situate at shop D7 aforesaid. The particulars of those items can be found in the annexure to the further and better particulars (exhibit 55). The plaintiff claims against the defendant the sum of $50,000 for damages in detinue or conversion of plant, fittings, and stock in trade (the “said items”).
By letter dated 13th January 1995, the defendants by its solicitors forwarded a notice terminating the tenancy of the said lease pursuant to the Property Law Act (exhibit 15). The notice to tenant is attached thereto. It required that the plaintiff deliver up possession of the said premises on the 19th of February 1995, or “on the last day of the period of your tenancy next following the giving of this notice”. The monies owing at that time was $74,000.00 for unpaid rent and outgoings. The following appears in the said exhibit 15:
“We are instructed to point out that under the relevant provisions of the lease, the tenant’s right to remove the tenant’s plant, fittings and stock in trade are subject to the due observance, performance and fulfilment of all the covenants, terms and conditions on te tenant’s part expressed or implied in the lease. At these preconditions to your right to removal of plant, fittings and stock in trade have not been made, our client’s view is that you have no right to remove any of your plant, fittings or stock in trade pending payment of all arrears and due compliance with all the terms and covenants contained in the lease.
We also note that the lease provides that in the event of our client re-entering the premises, title to any tenant’s plant, fittings and stock in trade which remain on the demised premises within 7 days of such re-entry become the property of our client.
The purpose of this letter is to advise you that:
1.The premises have been placed under 24 hour surveillance which will be maintained until the premises are vacated.
2.Any attempt to remove the tenant’s plant, fittings and stock in trade (except stock in trade which shall be sold in the usual course of business) will result in our client making an immediate application (at your cost) to the court for appropriate relief including injunctive relied. As a part of such relief, our client instructs that it will seek an order for the return of any such plant, fittings and stock in trade removed prior to the date of the order at your expense.
3.Our client fully reserves its right to take such action as it sees appropriate for the recovery of the outstanding moneys from Lowtex Pty Ltd and the Guarantors.”
There was subsequent correspondence between the parties and it is desirable to summarise same:
1)By letter dated 19 January 1995, the solicitors for the defendant reiterated “your client is not entitled to remove it’s plant, fittings and stock in trade pending payment of all moneys owing under the lease”. The solicitors sought the undertaking from the plaintiff that it would not attempt to remove any of the said items. In the event of the plaintiff failing to give the undertaking, the solicitors indicated that application for an injunction to restrain the plaintiff from removing the said items would be made. It suggested that such removal would be “in breach of the covenants contained in the lease.”
2)There was correspondence between the parties of a “without prejudice” nature which was tendered by consent by the parties in the action. There were attempts to set off the moneys owed by the plaintiff against the rental due but no such agreement was reached.
3)Of significance is that on the 20th day of January 1985, the plaintiff through its solicitors at the time (exhibit 19) stated:
“We do not accept that any provision in this sub-lease prevented our client from removing fixtures and fittings in the event of default would be valid when made in conjunction with another provision of the lease deeming goods left behind as being forfeited. Clearly the effect of both provisions is to distrain for rent which is illegal.”
4)By letter of the 31st of January 1995, the solicitors for the defendant asked the solicitors for the plaintiff whether the plaintiff had vacated the premises. By letter dated 6th of February 1995, the solicitors for the plaintiff wrote to Mr I Bensted, a director of the plaintiff company advising him that they had written to the solicitors for the defendant pointing out that the fixtures and fittings left behind “were not abandoned and thus do not automatically become the property of the landlord”. The same solicitors confirmed with the solicitors for the defendant that the plaintiff had “vacated the premises after the close of trading on the 28th day of January 1995”. That statement was not denied by Mr Bensted in evidence. The solicitors for the defendant reiterated that a representative of the plaintiff had entered the premises to enable one of its suppliers to remove a refrigerator owned by the supplier and further that certain works are carried out on behalf of the plaintiff during the weekend of the 29th/30th of January in relation to the premises. The defendant’s solicitors denied that the plaintiff had vacated prior to 30th of January. I am satisfied that a refrigerator was removed by the plaintiff on behalf of a third party on or about 7th February, 1995. I am satisfied that the plaintiff by its agents had access to the said premises up until that date.
Terms of the said Lease
It was common ground that the terms of the lease applied to the holding over period up until when the plaintiff vacated the premises. The relevant clauses of the lease (exhibit 7) are as follows:
“18.07 TENANT’S PROPERTY Upon the Landlord re-entering the demised premises whether consequent upon default or otherwise the title to any of the Tenant plant fixtures fittings and stock in trade left by the Tenant in the demised premises shall immediately upon the expiration of seven (7) days following such re-entry pass to the Landlord and the Tenant shall after that period forever quit any claim thereto. During the seven (7) day period the Landlord may store the same at a place other than in the demised premises. In any event the Landlord shall not be liable for any loss or damage occasioned.
18.08 HOLDING OVER If the Tenant shall with the consent of the Landlord remain in occupation of the demised premises after termination of the Lease or conversion of the term to a monthly tenancy the Tenant shall hold the demised premises as tenant from month to month on the terms covenants and conditions of the Lease so far as they can be applied to a monthly tenancy.”
It was common ground at the trial that the provisions of clause 19.02 did not apply notwithstanding that the solicitors for the defendant had referred to that clause as a basis for asserting its clients rights to the main fittings and stock in trade. The reason for this, of course, is that the plaintiff had failed to meet the rental payments.
Clause 19.02 provided as follows:
“19.02 TENANT’S RIGHT TO REMOVE FITTINGS Provided the Tenant shall throughout the term of the Lease observe perform and fulfil all the covenants terms and conditions on its part expressed or implied in the Lease the Tenant may during the last fourteen (14) days of the term of the Lease remove from the demised premises all the Tenant’s plant fittings and stock in trade PROVIDED THAT:
(a)such removal can be effected without causing any substantial damage to the demised premises or the Centre; and
(b)that the Tenant shall make good any damage whatsoever caused to the demised premises or the Centre by such removal; and
(c)the Tenant shall not be entitled to remove any shop front or inter-tenancy partition which shall upon installation become the property of the Landlord.”
Nature of Plaintiff’s Case
The plaintiff’s counsel submits that by operation of clauses 18.07 and 18.08 of the said lease, the plaintiff was entitled to remove the plant equipment and fittings from the premises provided such removal was effected no later than seven days following the date of the defendant’s re-entry. It was conceded by counsel for the defendant at trial that the effect of clause 18.07 was that after the landlord did re-enter the premises that the plaintiff did have seven days in which to remove the said items. The defendant’s case is that there was a failure by the plaintiff to so remove the items and therefore title to the goods passed to the defendant. Did the defendant prevent the plaintiff from removing the said items from the premises?
The plaintiff relies upon the correspondence and clause 18.07. The plaintiff alleges that the defendant acted unlawfully by distraining for the rental due and owing by the plaintiff as at the date of re-entry.
The defendant on the other hand asserts that the plaintiff did not request the return of the said items or seek access to the premises for the purpose of removing those items. Moreover the defendant submits that it did not prevent the plaintiff from removing such items. The defendant denies that it refused the plaintiff access to the premises and that up to the 30th of January 1995 the plaintiff remained in occupation of the premises with the keys to the premises and in fact carried out work there up until the 30th of January 1995. There is evidence to support a finding to that effect and I am so satisfied.
Date of “Re-entry” at Law
In Ex parte Whelan [1986] 1 QdR 500, Thomas J which whom Kniepp J and Shepherdson J agreed held that it was not necessary to obtain physical possession of leased premises to the exclusion of the lessee or to serve a writ for the recovery of possession in order to effect a re-entry. All that was required was an unequivocal demand or notice to quit. Thomas J followed the earlier decisions of Rosa Investments Pty Ltd v Spencer Shier Pty Ltd [1965] VR 97 and Finney Isles & Co v Estate CH Pelling (Deceased) [1950] StRQd 128.
In accord with those authorities, counsel for the plaintiff submitted that the date of re-entry for the purposes of construing clause 18.07 is the date of the notice namely the 13th of January 1995. In other words the plaintiff was a “statutory tenant” up to the 30th of January 1995.
Counsel for the defendant submits that it is incorrect to attempt to equate an act of re-entry, in the sense of determination of a lease, with the physical act of taking possession of the premises. He submitted that to do so would lead “to the absurd result that the tenant remains in physical possession of the premises whilst the landlord is fictionally also in physical possession of the premises.”
I am satisfied that in the present case, the plaintiff had a right of re-entry within seven days after any actual “re-entry” by the defendant, for the purposes of removing goods in circumstances where the tenancy was terminated for there may have been practical reasons for the plaintiff not being able to remove the goods: Martin v King ([97589] a desicion of McLelland J, 2nd July 1996, Supreme Court of NSW, Butterworths Service 14681 at 14682). In the latter case, the landlord had re-entered the premises and locked the tenant out. The tenant regained possession for a short period of time and then the landlord again re-entered and excluded the tenant from the premises.
In fact, whatever the technical date for re-entry was in the present case, it is undisputed by the plaintiff that it was in fact in occupation of the said premises up to at least the 28th of January 1995 and I have found up to 30th of January 1995. The plaintiff had access thereafter to at least 7th February, 1995.
The present factual situation has been best described by Young J in D’Arcy v Burelli Investments Pty Ltd (1987) 8 NSWLR 317 at 321:
“... that the tenant could remove his chattels if he was in fact still in possession of the premises and there was no pretence to say that he had abandoned his right to them. However, he also seemed to equate that proposition with the view that the right only existed during such further period of possession as he held the premises under a right still to consider himself as a tenant. Those words came from Weeton v Woodcock (1840) 7 M&W 14; 151 ER 659. Dunn LJ and Fox LJ seem to prefer the second way of putting it. That case was then considered by the High Court of New Zealand in Concept Projects Ltd v McKay [1984] 1 NZLR 560 at 567-569. :The view that Casey J said flows from the authorities was that a tenant had the right to remove his fixtures so long as he remained in possession under a genuine colour of right to be there as a tenant. So that if there is litigation between landlord and tenant and the tenant alleges in that litigation that he has a genuine colour of right as a tenant, it is wrong to say to him that he must remove his chattels because if he loses that litigation he will be classed as a trespasser”.
In the present case I find that the plaintiff did have a “genuine colour of right” up to and including the 30th day of January 1995. Thereafter, during the next seven (7) days and pursuant to clause 18.07 it was entitled to remove the said items. The fact of the matter is that it did not. If it can be found that the correspondence from the solicitors for the defendant that the defendant intended to deal with the said items and refused to allow the plaintiff to remove the goods, or asserted a right which was inconsistent with the owner’s right, then the plaintiff may succeed in establishing its cause of action in conversion.
It should be noted that the counsel for the plaintiff has elected to proceed by way of the action in conversion in the present case: Cook v Saroukos (1989) 97 FLR 33, 38.
What is “Conversion”?
Conversion has been defined by Atkin J as “... dealing with goods in a manner inconsistent with the rights of the true owner ... provided that it is also (my emphasis) established that there is an intention on the part of the defendant in so doing to deny the owner’s right or to assert a right which is inconsistent with the owner’s right.”: Lancashire and Yorkshire Railway Co v MacNicoll (1919) 88 LJKV 601 approved by Scrutton L.J. in Oakley v Lyster [1931] 1 KB 148 at 153. See also Cook v Saroukos (1989) 97 FLR 33, 41.
“Palmer on Bailment” 1979 Edition at 129 states:
“Conversely it seems to be accepted that a mere assertion of ownership, without any accompanying conduct which threatens or amounts to an impairment of the rights of the true owner, does not justify the imposition of liability in conversion.”
The learned author referred to the decision of Oakey v Lyster op cit at 150 and said:
“Scrutton LJ appears to favour the contrary rules. Flemming contends that this statement must be confined to the circumstances of that case, where the defendant had some degree of control over the subject matter of the conversion and had backed up his assertion by using some of it himself and by stopping the owner and his purchaser from removing it.”
A further factual situation may assist in the interpretation of the attitude of the solicitors for the defendant in the present case. In Capital Finance Co Ltd v Bray (1964) 1 All ER 603, a hirer was in default under a hire purchase agreement. The owners took possession without obtaining the necessary court order. Realising the mistake, the owners took the car and left it outside the hirer’s house. The owner saw the vehicle in different places from time to time believing it was being used by the hirer. A letter of demand was sent to the hirer to return the vehicle to one of three named addresses and the outstanding instalment. The hirer did not comply with the demand, but his solicitors replied that they would accept service of any proceedings. There was no evidence that the hirer had used the car after the letter of demand requiring delivery. The owners in an amended pleading claimed in detinue. Denning LJ at 606 stated:
“But once the hire-purchase agreement was determined and not reinstated, the hirer was under no obligation to take the goods the owners. He could leave the goods at his house until the owners came to collect them. He would not be guilty of any unlawful detention unless, when the owners came to collect them, he prevented them taking possession of them.”
Salmon LJ made similar comments at p609. He said:
“On a fair construction of that letter it meant no more than this: “If you are trying to enforce a hire purchase agreement, we will resist those proceedings”. The owners, if they had not for obvious reasons been so anxious to pretend that the hire-purchase agreement was still alive, might have written a perfectly simple letter saying: “Are you prepared to deliver up the motor car?” or: “Will you please make an appointment for us to collect the motor car?” If in answer to that, the hirer had written and said: “No, I am going to keep the motor car:, or possibly if he had neglected to reply, there would be some evidence that he was holding adversely to the owners or keeping the motor care in defiance of the owners.”
A similar view was taken in the Australian decision of Crowther v Australian Guarantee Corporation Ltd (1985) ATR 80-709 at p69,097. In that case, which was an action in detinue, demand was made upon an agent to deliver up some vehicles. He refused in the sense that he did not deliver but he said he would consult his solicitor. At p69,105 Bollen J said:
“In my opinion, the evidence as a whole does not prove that the appellant had ever possession, that he ever unequivocally denied or repudiated the respondent’s right or title to the vehicles, that he acted unreasonably in any way towards the respondent in relation to the vehicles, that he did anything precluding him from denying that he had possession or that he exercised dominion over the vehicles. No doubt he did not make the decisive and robust response to the respondents’s claim which some would have made and maintained ... I think all the evidence taken cumulatively is consistent with the appellants saying that he claimed no interest, feeling that he had to watch Blanchard’s interest, feeling that he needed to be careful not to lay himself open to attack by Blanchard, wanting proof of title and being prepared to try to keep down any costs involved and attend any conference so the whole thing could be resolved.”
It should be remembered that in the present case, the defendant did not ever have possession of the said items prior to the 30th of January 1995. Even after that date, there is no clear demand by the plaintiff or a refusal by the defendant for possession. The defendant was asserting its title to the goods and was prepared to go to court to establish same. The present facts can be distinguished from GM & MY Campbell Pty Ltd v Colton & Anor (Full Court of Queensland No 3886/1988, 18th October, 1991) and Ocean Lines (Australia) v Macquarie Bank Limited (unreported decision no 6935 of 1996, Mackenzie J, 26th September 1996). In both of those cases, the landlord had excluded the tenant from possession by changing the locks so as to prevent the tenant from having access to the premises.
In the present case, I find the following:
(a)That the plaintiff had a right to remove the plant fittings and stock in trade pursuant to clause 18.07 of the sub-lease for seven days as from the 30th day of January 1995. It has not been suggested that the clause is penal in nature.
(b)That within that seven days, the plaintiff’s solicitors were cognisant of the rights of the plaintiff under that clause.
(c)That although the premises may have been under surveillance up until when the premises were vacated, it did not follow that the plaintiff’s representatives would be prevented from removing the said items. The basis of this finding can be found in the uncontroverted evidence that the plaintiff had access up to and including the 7th February 1995.
(d)That the assertion by the solicitors for the defendant that an immediate application to the court for appropriate injunctive relief would be made did not amount to a refusal of access by the plaintiff but merely an assertion of the rights of the defendant.
(e)That the erroneous views of the solicitor for the defendant of its client’s rights under clause 19.02 and 18.07 was not in the end determinative of the plaintiff’s position in view of its own legal representation that it had as from the 19th day of January 1995 (exhibit 19).
(f)The reason that Mr Bensted gave for not pursuing the matter was the lack of funds which were available to the plaintiff at the material time. At best, he was negotiating to set off their value against the rent owing. There is no authority quoted to me nor am I aware of one whereby such impecuniosity is a justification at law for failing to assert its rights as a tenant. I find that the plaintiff was not ready, willing nor able to remove the said items.
(g)The fact that the parties were negotiating in order to attempt to resolve the issues does not seem to be a basis for extending the time in the absence of some understanding between the parties: D’Arcy v Burelli Investments op.cit. P322E.
Summary of Legal Position
The right to remove fixtures only exists during the term of the lease. Fixtures or fittings may vest in the landlord when the tenant gives up possession on its expiration subject of course to the terms of the lease; Fao’s General Law of Landlord and Tenant 7th Ed., para 1077. It has been said to extend to “such further period of possession by him as he holds the premises under a right still to consider himself as tenant”: Ex parte Brook (1878) 10 ChD at p100. In the present case, the plaintiff regarded itself still entitled to its tenancy at least up until the 28th of January 1995 when it says it gave up possession.
Upon vacation of the premises without removing plant or equipment in terms of the lease, those items will be held to have been abandoned: see New Zealand Government Property Corp -v- H.M.&S. Limited (1982) 2 QB 1145 at 1158, 1162-1164; D’Arcy -v- Burelli Investments Pty Ltd (1987) 3 NSWLR 317. The rule is subject to the lease and to any right of the lessee to remain in possession. Clause 18.07 of the subject lease allows the tenant seven days after vacating the premises to remove the set items. This was conceded by counsel for their defendant in the present case. The premises were vacated on 30th January, 1995. I find that the plaintiff remained in possession “under colour of right” up to at least 30th January, 1995: D’Arcy v Burelli Investments Pty Ltd op cit p321-322.
“The rule to be collected from the several cases decided on this subject seems to be this, that the tenant’s right to remove fixtures continues during his original term, and during such further period of possession by him, as he holds the premises under a right still to consider himself as tenant”. Weeton -v- Woodcock (1840) 7 M&W 14 at 19; 151 ER 659 at 661; see also “Commercial Tenancy Law in Australia” by Bradbook and Croft (1990 edition) at para 10.05.
The learned authors state that it follows the right to remove fixtures is lost once the tenant is out of possession. Reliance is placed on D’Arcy -v- Burelli Investments Pty Ltd op.cit. Certain exceptions were referred to by the learned authors none of which appear to be applicable to the present case. Absent provision in the lease, a tenant at will who has erected trade fixtures during his tenancy has a reasonable time after the determination thereof within which to remove the fixtures. In the present case provision was made in the lease by clause 18.07 to allow the plaintiff seven days in which to recover its property. This was not availed of.
In relation to the letter dated 13th of January 1995 (exhibit 15), I find that an assertion of a right cannot bear the construction of a wrongful refusal to perform: see DTR Nominees Pty Ltd v Motor Homes Pty Ltd & Mona Homes Pty Ltd (1977-1978) 138 CLR 423 at 432.
I find that the defendant was entitled to act as it did as from the 7th day of February, 1995 to deal with the plant, fittings and fixtures. Clause 18.07 is determinative of their rights: Re Jigrose Pty Ltd (1994) 1 QdR 381 at 384, 386.
In light of the findings set out above, the lease to Mr Bauer which took effect in about April 1995 (exhibit 16) on the part of the defendant as landlord or alternatively the sale of the premises in 1998 could not be regarded as unlawful or wrongful. The said items had vested in the lessor by operation of clause 18.07 of the sub-lease. The said items “are deemed to be abandoned”: Re Jigrose ibid p386.
Estoppel
This argument by the defence would have only been relevant if the plaintiff had succeeded in its claim of conversion. Reliance was placed by the defendant on the authority of Bryant v Commonwealth Bank of Australia (1995) 57 FCR 287 at 297:
“... where, as here, a Defendant’s claim is intimately connected with that of the Plaintiff, in the sense that each arises, substantially, out of the same matters of fact, there is every reason to require that both be litigated at the one time; thereby minimising costs and avoiding the possibility of inconsistent judgment.”
As pointed out in argument, the claim for rent proceeded by way of summary judgement. A trial of the action would have involved further evidence and there were good reasons why the plaintiff may not have wished to have got involved in that action in attempting to prove its claim. The judgment in favour of the defendant may well have been stayed but it was not necessarily a reason for the plaintiff in the present case to have counterclaimed. In my view, estoppel is not applicable: Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332 at 346. In any event, I find that the plaintiff acted reasonably in not counterclaiming in that action. Preparation of an expert report on valuation at least would have been necessary. This would have been contested, as it has in the present case.
Valuation Evidence
For completeness, it is necessary to deal with the valuation evidence. In the event that the interpretation placed upon clause 18.07 and the correspondence is incorrect, it is necessary to assess the fair market value of the plant and equipment. Andrew Douglas Cotton gave evidence that the fair market value for the existing use as at January 1995 was $57,660. Although some items were not included in his valuation for the purposes of the action, the plaintiff was content to have assessed the fair market value of the items set out in the report of Mr Cotton which is exhibit 61 in this action. Some of the items he did not see but he assumed them to be in fair condition.
Unfortunately, Mr Cotton assumed that the items to be two to three years old as at January 1995. Evidence shows, and I find, that some of the items in fact were purchased prior to 1985 and so were at least 10 years old as at the date of the retrospective valuation. Items such as the coldroom were the subject of little variation in price between 1995 and the present and Mr Cotton discounted the figures in that respect. Mr Cotton conceded that if items were 10 years old then “there may be a little bit of a discount on them”. No specific discounting figure was given but lack of same should not prevent a court from arriving at an assessment in the circumstances.
Although it was suggested that the items would not be as valuable taken from the premises, the fact is that they were in the premises and the majority of those items were onsold as part of the transaction between the defendant and the new purchaser. If the plaintiff had asserted its title at the appropriate time, then it would have had to have removed the items, transported them and installed them elsewhere. The result is that the defendant got the use of the items between 1995 and 1998 when it sold same.
The fair market value as defined by Mr Cotton is set out at page 3 of his report. I have also had regard to the fact that the purpose of the valuation is that there is a hypothetical vendor who is the outgoing tenant and the hypothetical purchaser who is the incoming tenant.
For the purpose of assessing the damages in this case, I have applied the principles of Spencer v Commonwealth of Australia (1907) 5 CLR 418 at 432 and 441. One had to discount the figure provided by Mr Cotton in view of the mistaken age of the plant and equipment in his report. The date of the assessment for the purpose of this case was May 1995 when the defendant leased the property to Mr Bauer. According to the plaintiff’s case, this was the date when the defendant dealt with the plant and equipment in a manner inconsistent with its rights and so is the notional date for valuation. I assess the value of the plant and equipment at $45,000.
Exemplary Damages
In view of the fact that the defendant took advice from his solicitors and also the contentious questions of law involved, it is not an appropriate case for exemplary damages to be awarded. I have had regard to the submissions of the plaintiff in arriving at this decision. The plaintiff’s counsel quoted from the judgment of Zeeman J in Pargiter v Alexander (1995) Aust Torts Reports 81-349 at p62500 at 62508:
“In my view, the defendant’s actions may truly be described as high-handed. He has previously consented to judgment for the return of the yacht to the plaintiff, but nevertheless thereafter took it once again and took steps which were calculated to ensure that the plaintiff would not be able to locate it and would be permanently deprived of it. The defendant must have been aware that the plaintiff had purchased the yacht and had paid a substantial amount of money for it.
In the circumstances, I consider it appropriate to mark the Court’s strong disapprobation of the defendant’s outrageous conduct by an award of exemplary damages. The defendant’s conduct was particularly outrageous because it was done in the face of a judgment which vindicated the plaintiff’s right to possession as against the defendant, being a judgment which had been entered with the consent of the defendant. I assess exemplary damages at $5,000.”
In my view the present case is quite different as the solicitors for the defendant although asserting title were prepared to go to court to have the matter determined rather than acting outrageously in face of a judgment as was the position in Pargiter ibid.
The orders will be:
1. The action is dismissed.
2.It is ordered that the plaintiff do pay the defendant’s costs of and incidental to the action including reserve costs if any to be assessed.
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