Ocean Line v Macquarie Bank

[1996] QSC 180

IN THE SUPREME COURT
OF QUEENSLAND

No. 6935 of 1996
Brisbane

Before the Hon. Mr Justice Mackenzie

[Ocean Line v. Macquarie Bank]

BETWEEN:

OCEAN LINE (AUST) PTY LTD  ACN 070 142 933

(Applicant)  Plaintiff

AND:

MACQUARIE BANK LIMITED  ACN 008 593 542

(Respondent)  Defendant

JUDGMENT - MACKENZIE J.

Judgment delivered 26 September 1996

CATCHWORDS:

LEASE - alleged breach of obligation to pay rent - termination of lease by lessor's mortgagee - seizure of lessee's stock - whether the lessor's mortgagee has a right under the lease or otherwise to retain the seized goods

INJUNCTION - mandatory injunction - seizure of lessee's stock upon termination of lease by lessor's mortgagee - whether an order for delivery up of the goods should be made

PRACTICE AND PROCEDURE - summary judgment under O. 18 r. 1 - solicitor deposed to the history of the matter and the relevant facts - articled clerk deposed to a belief that there is no defence to the claim without reference to any knowledge of the facts - whether this complies with O. 18 r. 1

Counsel:C. Wilson for the applicant plaintiff

D. Andrews for the respondent defendant

Solicitors:Michael Chan & Associates for applicant

Clarke & Kann for the respondent

Hearing date: 17 September 1996
IN THE SUPREME COURT
OF QUEENSLAND

No. 6935 of 1996

Brisbane

Before the Hon. Mr Justice Mackenzie

[Ocean Line v. Macquarie Bank]

BETWEEN:

OCEAN LINE (AUST) PTY LTD  ACN 070 142 933

(Applicant)  Plaintiff

AND:

MACQUARIE BANK LIMITED  ACN 008 593 542

(Respondent)  Defendant

JUDGMENT - MACKENZIE J.

Judgment Delivered 26 September 1996

These are applications for leave to amend the prayer for relief in a District Court Plaint (transferred to the Trial Division) to include a prayer for relief for recovery of possession of certain chattels and $30,000 damages for detaining the same and for judgment for recovery of possession of the chattels.  In addition an order is sought that the respondent deliver up possession of the chattels by granting to the plaintiff such access to them as may be reasonably necessary for their removal from premises at Mt Gravatt at which the applicant was previously the tenant.  The applicant conducted a business as a discount seller of household and novelty items under a five year lease.  The respondent is mortgagee of the landlord which defaulted under the mortgage with the result that the respondent as attorney for the landlord received rent and demanded payment of rent from February 1996.  On 17 May 1996 the respondent changed the locks on the applicant's premises allegedly for breach of the obligation to pay rent and outgoings. 
          At the time the locks were changed a quantity of the applicant's stock was in the premises and the respondent has refused to allow the applicant to remove the goods from the premises despite requests for access to do so.  By notice dated 20 August 1996 the respondent as attorney for the landlord, elected to forfeit all of the respondent's property in the premises.
          That issue arose from cll. 6.1.9 and 6.1.10 of the lease.  The former provides relevantly:

"The lessee shall immediately upon the termination of this lease remove from the Demised Premises ... all movable property brought onto the Demised Premises by or on behalf of the lessee.  If the lessee fails to remove any such ... property immediately upon the termination of this lease the lessor, if it does not elect as provided in the following clause 6.1.10, may do so and store them ...".

Clause 6.1.10 provides that "all ... movable property at the Demised Premises immediately after termination of this lease or such part thereof as determined by the lessor shall, if the lessor elects be and become the absolute property of the lessor ...".  The respondent's argument is that cl. 6.1.10 is a free-standing provision independent of cl. 6.1.9 and that the relevant election has been made, albeit three months after the locks were changed.  The lessee's obligation is to remove the property "immediately upon" termination of the lease.  Clause 6.1.10 refers to movable property at the demised premises "immediately after" termination of the lease.  The use of different terminology suggests that the draftsman had in mind a sequential process.  The proper construction of the two clauses is, in my view, that if the lessee fails to remove the property immediately upon termination of the lease, the applicant has the option of electing that the property becomes absolute property of the lessor or of storing the goods at the lessee's risk and cost.  The event which triggers the lessor's rights is a "failure" to remove the property.  In the present case the evidence is that the lessee was excluded from the premises by changing the locks and was not allowed access upon request to remove the property.  In  my opinion a failure to remove goods requires an act of neglect on the part of the lessee.  There is no evidence that that has occurred in this case as the evidence suggests that at all times the lessee was ready and willing, but not able, to remove the goods.  Accordingly I am satisfied that the goods have not become the absolute property of the lessor.
The respondent further submitted that if it did not hold as owner of the goods it held them as security for payment of arrears. The ancient remedy of distress for rent was abolished by s. 103 of the Property Law Act 1974. Section 103 was itself repealed by the Statutes Amendment (Miscellaneous Provisions) Act 1992.  The repeal of a repealing statute does not revive either a statutory or common law right which existed prior to the enactment of the repealing Act (ss. 19 and 20 of Acts Interpretation Act 1954). The respondent's counsel submitted that notwithstanding the abolition of distress for rent there was still a residual right, which he was unable to define more precisely than that, allowing the landlord's attorney to keep possession of the goods as security for payment of rent. In the absence of any authority for that proposition I decline to endorse the view that there is any such right.
          The proceedings were commenced by District Court Plaint.  However by order of the District Court Judge the action was transferred to the Trial Division.  The prayers for relief in the plaint are as follows:-

1.A declaration that the plaintiff is entitled to immediate possession of the chattels;

2.An order that the defendant deliver up possession of the chattels to the plaintiff;

3.Damages for the defendant's wrongful detention of the chattels;

4.Interest on damages pursuant to the Common Law Practice Act.

The summons filed subsequently seeks leave to amend the prayer by adding the following words, "Alternatively for recovery of possession of the said chattels and $30,000 damages for detaining the same".  The amendment was not opposed, and leave to amend is given.  This is intended to invoke O. 6 r. 7(c) of the Rules of the Supreme Court.  Under O. 18(1) when a defendant appears to a writ of summons specially endorsed under O. 6 r. 7 the plaintiff may on affidavit made personally or by any other person verifying the facts on which the claim is based and stating that in the deponent's belief there is no defence to that claim judgment may be granted unless the defendant satisfies the Judge that there is a question in dispute which ought to be tried or there is some other reason for a trial.  Two matters are raised in respect of this aspect of the application.  The first is that the goods are not described with sufficient specificity.  The second is that the requirements of O. 18 r. 1 have not been complied with in that there is no affidavit which both verifies the facts on which the claim is based and stating that in the deponent's belief there is no defence to that claim.  What has occurred is that there is an application in the original application before the District Court Judge which sets out the history of the matter and the fact that the demand was made but not complied with.  That affidavit contains no statement that in the deponent's belief there is no defence to the claim.  There is an affidavit from an articled clerk which simply deposes that she was informed by the deponent of the affidavit just referred to that the plaintiff was a duly incorporated company and that the articled clerk believes that there is no defence to the plaintiff's claim.  There is nothing in the articled clerk's affidavit that refers in any way to the facts on which the claim is based.    In my opinion this is an inadequate way of attempting to comply with O. 18 r. 1 and for that reason the application for summary judgment must be refused.  There is no need to consider the question of whether the goods are sufficiently described.
          Turning now to the motion for a mandatory injunction, the applicable principle is that it would not normally be granted unless it was felt there was a high degree of assurance that at the trial it would appear that the injunction was rightly granted (Active Leisure (Sports) Pty Ltd v. Sportsman's Australia Ltd (1991) 1 Qd R 301). For reasons that have already been expressed I am of opinion that there is no basis upon which the respondent is entitled to possession of the goods. That being the case I am of opinion that the case is one where an order for delivery up of possession of the chattels is justified. The question whether an undertaking by the applicant as to damages would be sufficient was raised. Mr Chow has sworn that the applicant company is solvent. He has sworn that notwithstanding the indebtedness of the company it could continue to trade profitably in another shopping centre which attracted sufficient customers. As against that, para. 13 of the same affidavit says that in the event that the plaintiff does not obtain delivery of the goods there is a real risk that the plaintiff will be unable to continue to trade. I do not consider that the statements are necessarily inconsistent. Similarly the statements in Mr Chow's second affidavit as to financial difficulties being caused by the continued detention of the goods relate to the problem caused by the unauthorised detention and do not speak as to the viability of the company if it were to be able to sell or otherwise dispose of the stock detained by the respondent. In all the circumstances I do not consider that the issue of sufficiency of the undertaking is a factor which disentitles the applicant to relief.
          Accordingly I order that upon the applicant Ocean Line (Aust) Pty Ltd giving the usual undertaking as to damages the respondent deliver up possession of the applicant's chattels described in the plaint filed in the District Court by granting to the applicant such access as may be reasonably necessary to enable the chattels to be removed on or before 4.00pm on Monday, 30 September 1996.  I order that costs be costs in the cause.