Reglon Pty Limited v Hill & Ors - [2006] NSWSC 1360

CITATION: Reglon Pty Limited v Hill & Ors [2006] NSWSC 1360

HEARING DATE(S): 20 and 23 June 2006; 7 and 8 November 2006 and 1 December 2006

JUDGMENT DATE :
11 December 2006

JURISDICTION: Equity Division

JUDGMENT OF: Windeyer J at 1

DECISION: Judgment for the plaintiff for $1,331,212 plus interest.

CATCHWORDS: TORTS - conversion - bailment - breach of agreement - whether there was a right to immediate possession - whether contract provisions overrode common law rights of bailor - CO-MIXTURE - scaffolding of plaintiff mixed with other scaffolding - mixing not fault of plaintiff - rights of co-owners in the whole - conversion by co-owner

LEGISLATION CITED: Motor Vehicles (Third Party Insurance) Act 1942

CASES CITED: Baker v Barclay’s Bank Ltd [1955] 2 All ER 571; [1955] 1 WLR 822
McDonald v Lane (1882) 7 SCR 462
Nominal Defendant v Andrews (1969) 121 CLR 562
North General Wagon & Finance Co Ltd v Graham [1950] 2 KB 7
Reliance Car Facilities Limited v Roding Motors [1952] 2 QB 844
Sandeman & Sons v Tyzack & Branfoot Steamship Co Ltd [1913] AC 680
Smith v Torr [1862] 3 F&F 505
The Anderson Group Pty Ltd v Tynan Motors Pty Ltd (2006) 65 NSWLR 400
Union Transport Finance Ltd v British Car Auctions Ltd [1978] 2 All ER 385
Helmore Commercial Law and Personal Property in New South Wales 10th Edition 1992 page 40
Vaines: Personal Property 4th Edition 1967 at 387 and

PARTIES: Reglon Pty Limited (Plaintiff)
Grahame Peter Hill (First Defendant)
Citadel Financial Corporation Pty Ltd (Second Defendant)
Action Construction Service (NSW) Pty Ltd

FILE NUMBER(S): SC 1478 of 2006

COUNSEL: Mr M Ashhurst with him Ms T Baur (Plaintiff)
Mr B Connell (Defendant)

SOLICITORS: Peter Kemp Solicitors (Plaintiff)
Kemp Strang (Defendants)

- 15 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

MONDAY 11 DECEMBER 2006

1478/06 REGLON PTY LIMITED V GRAHAME PETER HILL & 2 ORS

JUDGMENT

Outline

1 The main question to be decided is whether a receiver appointed by a mortgagee of personal property and a mortgagee in possession of property, are liable for conversion of other goods mixed by the mortgagor with its own goods by leasing or licensing the total quantity of mixed goods. The action is brought by the true owner of the goods improperly mixed, which owner has parted with possession of the goods under a hire contract which is in default.

2 The moral of the story is that dealing in scaffolding is as risky as playing with fire but that many of the participants in the business seem to enjoy such games.

Facts

3 The plaintiff, Reglon Pty Limited (Reglon) which is controlled by Mr John Smit and his brother Mr Herman Smit, purchased a quantity of scaffolding from court appointed receivers on 21 September 2004 for $1,478,125 including GST and buyer’s commission.

4 The scaffolding was situated on two sites, at Prestons in New South Wales and at Brooklyn in Victoria. The items…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2006] NSWSC 1360
Decision Date: 11 December 2006

CaseChat Overview and Summary

The case of Reglon Pty Limited v Hill & Ors was heard in the Supreme Court of Queensland. Reglon Pty Limited, the plaintiff, sought relief for the conversion of its property by the defendants, Hill and others. The plaintiff alleged that the defendants, who were in a bailment arrangement with the plaintiff, wrongfully converted the plaintiff's scaffolding by mixing it with their own and selling the entire lot. The plaintiff contended that the contract provisions did not negate the bailor's common law rights to immediate possession and that the co-mixture did not absolve the defendants of liability for conversion.

The court was required to determine whether the bailment agreement between the plaintiff and the defendants permitted the latter to mix the plaintiff's scaffolding with their own, and if such mixing constituted a breach of the bailment agreement. Further, the court needed to ascertain whether the contract provisions effectively superseded the bailor's common law entitlements, and if the co-mixture absolved the defendants of liability for conversion. Additionally, the court had to consider the rights of co-owners in the entire mixture and whether the conversion by a co-owner could be justified.

The court found that the bailment agreement did not permit the defendants to mix the plaintiff's scaffolding with their own. The mixing was not fault of the plaintiff, and thus the defendants were liable for conversion. The court held that the contract provisions did not negate the bailor's common law rights to immediate possession. Furthermore, the court determined that the co-mixture did not absolve the defendants of liability for conversion. The rights of co-owners in the entire mixture were considered, and the court ruled that the conversion by a co-owner could not be justified. Consequently, the plaintiff was awarded damages for the conversion of its property.

The court ordered the defendants to pay damages to the plaintiff for the conversion of the plaintiff's scaffolding. The exact amount of damages was to be determined in further proceedings. The court also ordered that the defendants return any remaining scaffolding that belonged to the plaintiff.

Orders