Rolfe v Investec Bank (Australia) Ltd
[2012] VCC 2020
•19 December 2012
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CIVIL DIVISION | Revised Not Restricted Suitable for Publication |
DAMAGES AND COMPENSATION
GENERAL DIVISION
Case No. CI-09-02073
| JAMES GEOFFREY ROLFE | Plaintiff |
| v | |
| INVESTEC BANK (AUSTRALIA) LTD (ACN 071 292 594) | First Defendant |
| and | |
| GADENS LAWYERS (A FIRM) | Second Defendant |
| and | |
| SUTHERLAND FARRELLY (ACN 004 601 469) | Third Defendant |
---
JUDGE: | HER HONOUR JUDGE KINGS | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 9, 10, 13, 14, 15, 16, 17, 20, 21, 22 and 23 February 2012 | |
DATE OF JUDGMENT: | 19 December 2012 | |
CASE MAY BE CITED AS: | Rolfe v Investec Bank (Australia) Ltd & Ors | |
MEDIUM NEUTRAL CITATION: | [2012] VCC 2020 | |
REASONS FOR JUDGMENT
---
SUBJECT – Bailment – mortgagee in possession – negligence – detinue – contract
CATCHWORDS – knowledge of bailee – implied consent – ownership of goods
CASES CITED – W D & H O Wills (Australia) Ltd v State Rail Authority of New South Wales; State Rail Authority of New South Wales v TNT Management Pty Ltd (1998) 43 NSWLR 338; Challenge Charter Pty Ltd & Ors v Curtain Bros (Qld) Pty Ltd & Ors [2004] VSC 1; Fankhauser v Mark Dykes Pty Ltd [1960] VR 376; Jones v Foley [1891] 1 QB 730
JUDGMENT – proceedings dismissed
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr C Harrison SC with Mr S Metaxas | Goldsmiths Lawyers |
| For the First Defendant | Dr O Bigos | Arnold Bloch Leibler |
| For the Second Defendant | Mr D Aghion | Colin Biggers & Paisley |
| For the Third Defendant | Mr M Stirling | DLA Piper Australia |
HER HONOUR:
1 The plaintiff, Mr Rolfe, was a director of a company called James Rolfe Transport (Vic) Pty Ltd (“JRT Vic”), which operated a container shipping business from premises at 363-367 Francis Street, Yarraville in Victoria (“the premises”). The only other director of JRT Vic was Mr Rolfe’s wife.
2 JRT Vic leased the premises from Glodale Pty Ltd (“Glodale”), which was another company of which Mr Rolfe was a director, together with his wife.
3 The first defendant (“Investec”) was a bank which entered into a loan with Glodale, which was secured by a mortgage over the premises, a fixed and floating charge over the assets of JRT Vic, Glodale and a personal guarantee of Mr Rolfe. Mr Andrew Hirst and Mr Michael Sack were the employees who managed the loan on behalf of Investec.
4 The second defendant (“Gadens”) was the firm of solicitors retained by Investec to advise it on the realisation of the security for the loan. Mr David Reichenberg was the partner at Gadens responsible for the file and was assisted by Ms Karen McMaster.
5 The third defendant (“Sutherland Farrelly”) was the real estate agent for the sale of the premises. Mr Paul Sutherland was the agent responsible for handling the sale. He was assisted in the sale of the real property assets by Mr Paul Farrelly and Mr Grant Sutherland.
6 In 2002, Glodale defaulted on the loan agreement and Investec moved to realise the assets against which the loan was secured.
The Current Proceeding
7 In 2009, Mr Rolfe filed a Writ against Investec. Mr Rolfe alleges:
· that on or about 11 February 2003, Investec granted him consent to continue to store seven shipping containers (“the containers”) containing various chattels, including Porsche motor vehicles, car parts and personal chattels;
· the agreement was verbal and was entered into between himself and Ms McMaster, a solicitor at Gadens, in a telephone conversation on or about 11 February 2003; and
· there was an implied condition of the agreement that Investec would keep the containers safe and return them to him on demand.
8 Mr Rolfe alleges causes of action in bailment, contract, negligence and misleading and deceptive conduct.
9 In the alternative, Mr Rolfe alleges:
· that there was an agreement allowing him to store personal possessions on the premises by virtue of the fact that Sutherland Farrelly knew he was doing so and did not object;
· Investec knew he was storing the containers on the premises and did not request him to remove them; and
· that by virtue of enforcing the mortgage and taking possession of the land, Investec assumed responsibility for taking care of the containers and keeping them safe.
10 Mr Rolfe also makes a claim in detinue.
11 The alleged telephone conversation is pivotal to Mr Rolfe’s claims; accordingly, I will address this first in my analysis.
12 In March 2011, orders were made joining Gadens as second defendant and Sutherland Farrelly as third defendant at the request of Investec. On 22 March 2011, a notice of Investec seeking contribution or indemnity from Gadens and Sutherland Farrelly was filed.
13 If Mr Rolfe is successful, Investec alleges that Gadens and Sutherland Farrelly breached their retainers and their duty of care to Investec.
14 In particular, Gadens breached its retainer by:
· making the alleged agreement with Mr Rolfe; and
· failing to disclose or communicate to Investec material information, being information about the containers.
15 In particular, Sutherland Farrelly breached its retainer by:
· failing to disclose or communicate to Investec material information, being information about the containers; and
· failing to exercise reasonable skill and care.
Background Facts
16 In 2001, Glodale borrowed $11.8 million from Investec. The loan was secured by, amongst other things, a real property mortgage of the Yarraville premises, a fixed and floating charge over the assets of JRT (Vic), and a personal guarantee given by Mr Rolfe.
17 By mid-2002, Glodale had defaulted on the loan. Investec retained solicitors – Gadens. An asset management deed was entered into, but by December 2002, Mr Rolfe had defaulted on it.
18 On 14 January 2003, voluntary administrators (SimsPartners) were appointed by Mr Rolfe to JRT (Vic) and took possession of the premises. On 10 February 2003, SimsPartners became the company’s liquidators. On 11 February 2003, Investec took possession of the premises under the mortgage.
19 On 20 February 2003, Dominions Auctioneers conducted an auction of JRT (Vic)’s assets at the premises. The goods that were sold were removed and the proceeds were paid to Investec, as secured creditor of JRT (Vic).
20 The third defendant, Sutherland Farrelly, a firm of estate agents, was appointed to market and sell the premises on behalf of Investec.
21 A contract of sale of land was entered into on 20 March 2003 with Jean’s Team Pty Ltd (“Jean’s Team”) owned by Mr Paul DeLutis. On 21 March 2003, Investec sent a letter to Mr Rolfe advising that settlement was to take place on 19 May 2003. Settlement of the sale occurred on 19 May 2003. After settlement, Jean’s Team leased the premises to Maersk.
22 On 25 September 2003, Mr Rolfe was declared bankrupt.
23 In November 2006, Mr Rolfe was discharged from bankruptcy.
24 On 13 May 2009, Mr Rolfe commenced this proceeding by filing a Writ which was served on Investec in May 2010.[1]
[1]Transcript (“T”) 67, L31
25 On 30 July 2010, the plaintiff’s solicitor filed an affidavit exhibiting a Deed of Assignment from Mr Rolfe’s trustee in bankruptcy assigning the cause of action, the subject of this proceeding, to Mr Rolfe. It was accepted the Deed of Assignment was executed on 30 July 2010.
General Observations as to the Proceedings
26 The plaintiff called eight witnesses to give evidence. The first defendant called three witnesses, the second defendant called one witness and the third defendant called four witnesses to give evidence. All four parties relied upon documents tendered as exhibits and documents contained in the court books. I have read all the documents.
27 The proceeding related to events that occurred nine years ago, which meant witnesses’ recollections were poor, particularly about dates and the chronology of events.
28 If Mr Rolfe does not prove his claim against Investec, the claims against Gadens and Sutherland Farrelly fall away.
29 There were complex and detailed submissions on Mr Rolfe’s standing to bring these proceedings. I will address these matters at the end of the judgment if Mr Rolfe proves his case.
The Plaintiff’s Witnesses and their credit
Mr James Rolfe
30 Mr Rolfe’s evidence-in-chief was in large part given by reference to documents in the Court Book. Mr Rolfe was taken to a document, and asked to confirm the accuracy of the contents of the document. In most instances, Mr Rolfe was not the author of the document. Many of the documents were minutes of meetings which Mr Rolfe attended. Some of the documents were letters of which he was neither the author nor the recipient. In any event, most of the documents were admissible as business records. Counsel for the plaintiff said the procedure was adopted as most of the documents in the Court Book were documents of the defendant and it was a way in which the plaintiff could rely upon those documents.
31 The effect of the approach was, I was unable to conclude what evidence Mr Rolfe gave from his own recollections and what evidence was drawn from his interpretation of the documents, many of which were not his documents.
32 As a result of cross-examination, I formed the view that Mr Rolfe had a poor recollection of events. He gave inconsistent answers within the one response and was vague as to events which were crucial to the success of his case. I formed the view that he had a poor understanding of the importance of his evidence. He adopted a dismissive approach as to evidence which on occasions was integral to the proof of his case. For instance, he could not remember whether there were one or two conversations with Ms McMaster and then said “You pick, I don’t care”.[2]
[2]T202, L30
33 On occasions, he became agitated.
34 Mr Rolfe referred to his poor health in 2003, the fact that he was hospitalised and operating under extreme stress. He referred to his behaviour being extremely erratic in May 2003 and said “I’m not totally surprised at some of the inconsistencies here”.[3]
[3]T263, L13
35 Given the difficulties with his memory and the inconsistencies in his evidence, I place greater weight on his evidence when it is supported by independent evidence.
Mr Rodney Davis, Mr Milan Stanic, Mr Guiseppe De Petro
36 Mr Davis, Mr Stanic and Mr De Petro were former employees of JRT Vic. It was clear they respected Mr Rolfe.
37 I took the view that they were hardworking, honest witnesses with limited education. They struggled to recall dates and names, but answered questions as best they could. I accept that they were witnesses of truth.
Mr Thomas Nelson
38 Mr Nelson was the manager of the business that occupies the premises and he attended the auction of the premises.
39 I formed the view he was a witness of truth.
Mrs Rachel Rolfe
40 Mrs Rolfe was the wife of the plaintiff.
41 Mrs Rolfe gave her evidence in a thoughtful manner. She answered questions to the best of her ability. I accept she was a witness of truth.
Mr Domenico DeLutis
42 Mr DeLutis was a property developer whose company, Jean’s Team, bought the premises at auction. He attended the premises on the day of the auction.
43 He answered the questions that were put to him.
The Defendants’ Witnesses and their credit
Ms Karen McMaster
44 Ms McMaster conceded that she had little recall of the matter and relied upon the Gadens’ file. She told the Court she received documents from the file while she was in London and spent time reviewing those documents. She also went through documents with Counsel prior to giving evidence. In giving evidence, she first exhausted her memory before giving evidence from the file. She admitted when she did not know the answer. I formed the view that she had a strong knowledge of the circumstances of the file.
45 Ms McMaster answered questions directly and was definite in what documents she remembered and what documents she did not remember. She did not say she remembered all correspondence. She made concessions
46 She gave her evidence in a thoughtful and calm manner. She gave precise answers to questions.
47 From her demeanour and her answers to questions, I concluded she was familiar with the Court process. I accept she was a witness of truth.
Detective Senior Constable Smith
48 Detective Senior Constable Smith was the investigating officer at the time Mr Rolfe reported the missing containers. She was conscientious and diligent in obtaining information from Mr Rolfe. She gave her evidence in a professional manner.
Mr Andrew Hirst
49 Mr Hirst was the relationship manager at Investec who handled the Glodale loan file.
50 He made concessions. He had a good recollection of the events and admitted when he was unable to remember details. He was a truthful witness.
Mr Paul Sutherland, Mr Paul Farrelly and Mr Grant Sutherland
51 Mr Paul Sutherland, Mr Farrelly and Mr Grant Sutherland were the directors of Sutherland Farrelly, which was appointed to sell the premises.
52 Mr Paul Sutherland had prime conduct of the file and the sale of the premises. Mr Farrelly was responsible for the preparation of the advertising material for the sale of the premises and introduced potential purchasers. Mr Grant Sutherland was responsible for the sale of the residential property at Middle Park, which was registered in the name of Mrs Rolfe.
53 They approached the matter with seriousness and answered questions in a straightforward manner. I accept they were witnesses of truth.
Analysis
Bailment
54 Mr Rolfe’s principal claim was in bailment. In particular, Mr Rolfe claimed there was a gratuitous bailment relationship between himself and Investec.
55 Halsbury's Laws of England (4th edition) says:
“Under modern law, bailment arises whenever one person, the bailee is voluntarily in possession of goods belonging to another person, the bailor. The legal relationship of bailor and bailee can exist independently of any contract, and is created by the voluntary taking into custody of goods which are the property of another ... The element common to all types of bailment is the imposition of an obligation, because the taking of possession in the circumstances involves an assumption of responsibility for the safekeeping of the goods.”[4]
[4]at paragraph 1801
56 In the present proceedings, Mr Rolfe alleges Investec was the bailee and he the bailor. To be successful in his claim of bailment, Mr Rolfe must prove, on the balance of probabilities, that:
(a) there was the relationship of bailor-bailee between himself and Investec;
(b) Investec breached its obligation under the relationship to exercise due care, skill and diligence for the safety of the chattels entrusted to it (being the containers); and
(c) the nature and value of any loss Mr Rolfe suffered as a result of the breach of the bailment.
57 A relationship of bailment will only exist where the bailee knowingly consents to possession of the chattels.[5] Consequently, to satisfy the first element of his claim in bailment, Mr Rolfe must prove, on the balance of probabilities, that Investec knowingly consented to taking possession of the containers and assumed responsibility for their safekeeping.
[5]Palmer on Bailment (2nd ed) 1991 at 3. See also W D & H O Wills (Australia) Ltd v State Rail Authority of New South Wales; State Rail Authority of New South Wales v TNT Management Pty Ltd (1998) 43 NSWLR 338 per Mason P
58 If Mr Rolfe proves there was a relationship of bailment between himself and Investec, it will then be necessary to consider the extent of the duty Investec owed Mr Rolfe under the bailment agreement and whether it breached that duty. In Challenge Charter Pty Ltd & Ors v Curtain Bros (Qld) Pty Ltd & Ors,[6] Gillard J said:
“[T]he modern authorities appear to draw no distinction between the various relationships. The authorities now recognise that there is an obligation on the bailee to take due care of the chattel. This means that a bailee is required to take the degree of care which is reasonable having regard to all the circumstances.”[7]
[citation omitted]
[6][2004] VSC 1
[7]ibid at 217
59 If Mr Rolfe proves Investec breached its duty under the bailment agreement, it will then be for Investec to prove that the loss of the containers was not due to any failure on its part.[8]
[8]Fankhauser v Mark Dykes Pty Ltd [1960] VR 376 per Sholl J at 377
Knowledge and consent to bailment
60 Mr Role alleged Investec knew and consented to the shipping containers remaining on the premises. In support of his allegation he relied on three claims:
(a) First, that on or about 11 February 2003, he had a conversation with Ms McMaster. She agreed he could store the containers at the premises.
(b) Second, that Sutherland Farrelly, by virtue of his facsimile dated 1 April 2003, knew that he stored personal property at the premises and did not request him to remove them.
(c) Third, that the presence of the containers on the premises after 11 February 2003 was conspicuous and known to Investec and Investec made no request of Mr Rolfe to remove them.
(a) Agreement with Ms McMaster
61 Mr Rolfe placed significant reliance on the conversation alleged to have occurred between Mr Rolfe and Ms McMaster. The only witnesses to give evidence about the conversation were Mr Rolfe and Ms McMaster. There were no witnesses to the conversation and there was no documentary evidence supporting the conversation. Therefore, the evidence about the conversation given by Mr Rolfe and Ms McMaster was particularly important.
62 Mr Rolfe and Ms McMaster gave conflicting evidence as to whether a conversation about containers occurred in February 2003.
63 Mr Rolfe said, after receiving the Notice of Possession on 11 February 2003, he rang Ms McMaster and asked her about leaving the containers where they were for a period of time. He gave evidence that he wanted to move car parts from the office into one of the containers. He thought there was only one conversation, but later thought there might have been two.[9]
[9]T126, L15
64 Mr Rolfe’s recollection of his conversations with Ms McMaster was poor. He could not say when they occurred, how many there were or what Ms McMaster said. Mr Rolfe’s evidence about the conversation was as follows:
“I rang Karen McMaster and told her that I wanted to move the car parts from the office into one of the containers and, without recalling exactly what she said, she indicated that that was okay but she said that I should ring SimsPartners to get access to the property. I rang SimsPartners and they said that that was okay but that there would be people from Dominions on site labelling office furniture and whatever else, ready for an auction on 20 February.”[10]
[10]T121, L21-29
65 Mr Rolfe then gave evidence about leaving the containers on the premises. Mr Rolfe said:
A:“Yes, I spoke to Karen McMaster about leaving the containers where they were for a period of time. I’d already had permission from Wayne Riley at Sims to leave them there during their tenure and I’d spoken to Riley subsequently and he said that they were auctioning all the JRT equipment on 20 February and they would probably be gone within a day or two after that. So I had to make other arrangements. On getting that 11 February notice of possession I rang Karen McMaster and asked her and she - to the best of my recollection she wasn't that interested. She just said, you know, ‘As long as they’re out of the way and we’re going to auction the property and, you know, you've got to move them before the new owner takes possession’ It was just that, taking probably two or three minutes.
Q:Perhaps you could tell Her Honour, as best you’re able, the words of the conversation?---
A:Yes, when I asked her if I could leave the containers on site, she said, ‘That's okay, but you’ll have to contact’ - I think she said, ‘You'll have to contact SimsPartners to’ - no, that wasn’t the one. I’m a little bit confused and unsure of this. Your Honour, all that she indicated was that it was okay to leave the containers but I had to get rid of them before the new owners took possession because the property was being auctioned as quickly as possible. I don't recall any other talks with her.
Q:You’ve told Her Honour about that conversation and also about requesting access to shift the containers about?---
A:Mm.
Q:Are you able to say whether there was one conversation, there were two conversations or more than two or what's your recollection about that?---
A:I think there was only one.
Q:If that be correct, which issues were discussed in that one conversation?---
A:Well, in the one conversation the issues discussed were being able to leave the containers on site and being able to get access to the site to get rid of all alternate stuff that was in the office out of the way into one of the containers. And I told her we would be marshalling all the containers right down the very front of the yard.[11]
…
Q:Did you say anything to Ms McMaster about the contents of the containers?---
A:Yes, I believe it talked about my Porsches, but Ms McMaster had been in the front office with Dominions and if she didn't see the car parts in there, she must have eyes in the back of her head, not the front.”[12]
[11]T125, L14 – T126, L23
[12]T126, L27 – T127, L1. Ms McMaster’s evidence was that she only recollected attending the premises once, on the day of the auction. Mr Rolfe was unable to say that Ms McMaster had attended prior to the auction.
66 I formed the view that Mr Rolfe gave his interpretation of what he thought Ms McMaster said. It was not an actual account of the conversation. He was confused as to whether there were one or two conversations. Ultimately, I could not be confident that Mr Rolfe could recollect how many conversations there were. He agreed he could not remember the details. Mr Rolfe was trying to recollect an event that occurred nine years ago at a time which was stressful for him.
67 Mr Rolfe’s evidence did not support the substance of the conversation as set out in the Further Amended Statement of Claim filed on 13 February 2012. He did not give evidence that he told Ms McMaster that there were Porsches in the containers, nor was he able to recollect how many conversations he had with Ms McMaster. He was unable to recollect the exact date or dates on which he spoke with Ms McMaster.
68 Ms McMaster’s evidence was that the conversation with Mr Rolfe between 11 and 20 February 2003 did not take place. She said she did not grant Mr Rolfe permission to go onto the site to move containers or load car parts into those containers. I formed the view that her recollection was more reliable than that of Mr Rolfe for the following reasons:
(i) First, Ms McMaster said at the time she was a second-year solicitor and had no authority to make decisions on her own.[13] She worked under David Reichenberg, a partner at the firm. She would regularly go to him before making any decisions and she was not making decisions on her own.[14] She had no authority to make agreements with anyone without first referring to Mr Reichenberg;[15]
[13]T368, L22
[14]T368, L17-22
[15]T368, L23-24
(ii) Second, Ms McMaster said if the conversation occurred she would not have given an answer at the time. First, she would have spoken to Mr Reichenberg and, secondly, she would have sought instructions from her client;
(iii) Third, she would have consulted Sutherland Farrelly as to the impact of Mr Rolfe’s request upon the marketing of the property for sale with vacant possession;[16]
[16]T382, L22 – T383, L5
(iv) Fourth, if she had instructions from Investec to agree to such a proposal it would have been documented, which would have included what the goods were, how long they could be there, and that they would be at Mr Rolfe’s risk;[17]
(v) Finally, the words used in the Statement of Claim were not the words she would have used. For example, she would not have said “We are intending to sell the property” as it was her client who was selling the property. In her mind “we” meant Gadens. She did not think she would have used the words Gadens and Investec together as “we”, because Gadens was representing Investec.[18] Further, the use of “as long as you keep the property out of the way and properly identified” was not the language she would have used as she had no reason to know what “out of the way” was in that context. The liquidators were on site and she was not representing the liquidators so she would not have had their interests in mind.[19]
[17]T382, L13-17
[18]T384, L7-19
[19]T384, L13-18
69 There was no file note of the conversation on Gadens’ file and there is no record of such a conversation in the Gadens’ bill.[20] Ms McMaster gave evidence that she took notes as conversations occurred of things that were said, primarily to remind herself when there was something she had to do or if she thought it was something significant that should be recorded on the file for later use. Mr Harrison submitted that a file note was not prepared because Ms McMaster did not view the conversation as significant. In support of his submission he relied on:
[20]Exhibit DT.1
· First, that there was no file note or billing record of the conversation between Ms McMaster and Mr Rolfe on 27 May 2003;
· Second, Ms McMaster’s evidence that she was not aware of the intricacies of bailment;
· Third, Mr Rolfe’s evidence that the conversation was short.
70 I do not accept the submission that there is no file note because Ms McMaster did not view the conversation as significant. Ms McMaster said the conversation would have been significant. In respect to the lack of a file note or billing record for the conversation on 27 May 2003, the evidence was the conversation was brief, with Mr Rolfe enquiring as to the purchaser of the premises. Ms McMaster did not provide any information or agree to any requests. She told Mr Rolfe she would get back to him. That is an entirely different type of conversation to the alleged conversation in February 2003.
71 Ms McMaster said the conversation would have been significant even without knowing the elements of bailment.[21] She said that even without knowledge of bailment she would have thought there was a risk for Investec if Mr Rolfe stored containers at the premises, specifically that the goods may be dangerous, that they may impede the sale if they were inconveniently situated or that they may go missing.[22] Accordingly, I do not accept the submission that there is no file note or billing record because Ms McMaster did not consider the conversation significant.
[21]T502, L9-11, T503 L10-16
[22]T503 L1-7
72 Ms McMaster gave evidence that she is cautious in dealing with debtors.[23]
[23]T391, L28
73 Further, during the period between 21 January to 28 February 2003, litigation was on foot between Mr Rolfe and Investec, in which communications were mainly through lawyers.[24] Neither Mr Rolfe nor his lawyers sent any communication to Investec or its lawyers confirming any discussion.[25]
[24]T295, L27
[25]T296, L19
74 I also take into account Ms McMaster’s response when Mr Rolfe raised with her in writing on 30 May 2003 that he had personal possessions on site.[26] Ms McMaster responded the same morning with the words “Neither we nor our clients were aware that you had belongings on the premises”.[27] Ms McMaster’s response of 30 May 2003 confirmed her evidence that the conversation did not occur and, further, her evidence that “we” refers to Gadens. In Ms McMaster’s email of 30 May 2003, she corrected Mr Rolfe’s contention that they had spoken on Monday last, 26 May 2003.[28] She said the conversation occurred on 27 May 2003 and Mr Rolfe noted that date on the file copy of his facsimile of 30 May 2003. Mr Rolfe was prepared to accept that Ms McMaster’s recollection of the date of the conversation was superior to his in respect of a date of a conversation occurring earlier that week.
[26]CB 1559
[27]CB 1561
[28]CB 1559
75 I accept that Mr Rolfe’s recollections about the content of the conversation have varied over time. I note that Mr Rolfe did not mention any conversation with Ms McMaster in his facsimile to Gadens of 30 May 2003,[29] his facsimile to Gadens of 30 June 2003,[30] his complaints to the police between 30 June and 2 July 2003[31] or his solicitor’s letter of 10 September 2003.[32] The first notification of Mr Rolfe alleging telephone conversations with Ms McMaster in February 2003 is in the general endorsement on the Writ, filed in May 2009, and served upon Investec in May 2010.
[29]CB 1559
[30]CB 1656
[31]CB 1667, 1680 and 1684A
[32]CB 1717
76 Further, one would have expected, after Mr Rolfe received Ms McMaster’s email on 30 May 2003, when she denied that neither Gadens nor Investec was aware that he had belongings on the premises, he would have reminded her of the telephone conversation he alleged he had with her in February 2003. At no time until the generally endorsed Writ was that alleged. There has been no explanation as to why he did not refer to the telephone conversation at any point prior to filing the Writ.
77 I concluded that Mr Rolfe’s evidence was confused, uncertain, inconsistent and unreliable. He could not be certain whether there was one or two conversations with Ms McMaster and he was unsure of whether he had referred to the Porsches or not.[33] I formed the view that his evidence was based not on actual recollections, but rather attempts to reconstruct what he believed must have happened based on contemporaneous records and the recollections of others. Accordingly, I formed the view that he was an unsatisfactory witness and I could only accept his evidence when supported by independent evidence. Such independent evidence was not available to the Court. There were no contemporaneous records of, or references to, the conversation. None of the contemporaneous correspondence prepared by Mr Rolfe mentions the alleged conversation; there is no file note of the conversation and no reference to it in the bill Gadens rendered to Investec.
[33]T126, L28; T135, L12
78 Consequently, I accept the evidence of Ms McMaster that there was no conversation with Mr Rolfe and there was no agreement as alleged under which she agreed to allow him to store his containers or goods on site.
79 As I have formed the view that the conversation between Mr Rolfe and Ms McMaster did not occur, I do not propose to address whether the alleged agreement was within Ms McMaster’s authority or any implied conditions of the alleged agreement.
(b) Sutherland Farrelly’s knowledge
80 In the alternative, Mr Rolfe claimed that Sutherland Farrelly, by virtue of his facsimile dated 1 April 2003, knew that he stored personal property at the premises.
81 Mr Rolfe relied on a letter he alleged he sent by facsimile to Sutherland Farrelly dated 1 April 2003.[34] In the letter, Mr Rolfe advised Sutherland Farrelly that he had:
“A further seven containers of personal property, an Audi car and various other bits and pieces stored on the property until you advise when they have to be removed.”[35]
[34]CB 1496
[35]CB 1496
82 Mr Rolfe’s evidence was that he could not recall sending the letter by facsimile and could obtain no record of the transmission. He was unable to recollect sending the letter and thought his wife may have sent it. There was no evidence from Mrs Rolfe that she sent the letter. He said he received no response from Sutherland Farrelly and that he did not follow up with anyone. His evidence was that he was hospitalised at this time and had other matters on his mind.
83 The evidence of Paul Sutherland, Paul Farrelly and Grant Sutherland was that the letter was not received by that firm. All three witnesses said they could not be one hundred per cent certain that the letter was not received, but none of them had any recollection of it and it was not on the file.
84 There are no contemporaneous documents that make reference to the 1 April 2003 letter. There was no reference to the letter in Mr Rolfe’s letters of 30 May 2003 and 30 June 2003, his 1 July 2003 police report or the Gundy Maitland letter of 10 September 2003. The first reference to the letter was in the Statement of Claim dated 20 August 2010.
85 It was Mr Rolfe’s burden to prove that he sent the letter and he did not satisfy it. I accept the evidence of Paul Sutherland, Paul Farrelly and Grant Sutherland that the letter was not received. They were witnesses of truth. Their evidence was consistent with Mr Rolfe’s admission that he could not recall sending the letter and the lack of documentary records referring to the letter. Accordingly, I do not consider that Sutherland Farrelly had knowledge that Mr Rolfe was storing property at the premises by virtue of the facsimile of 1 April 2003. It follows that without knowledge, there can be no consent from Sutherland Farrelly for the containers to remain at the premises and no duty to Mr Rolfe in respect of the containers.
(c) Investec’s Knowledge
86 Mr Rolfe alleged that the presence of the containers after 11 February 2003 was conspicuous and known to Investec and Investec made no request of Mr Rolfe to remove them.
87 Mr Hirst gave evidence that at no stage was he informed by Mr Rolfe, Gadens or Sutherland Farrelly that cars were stored on the premises in shipping containers. He said he did not know what was on the premises. He attended the auction, but had no recollection of seeing containers at the premises. He conceded that he could not recall whether they were there or not.
88 Ms McMaster said she had only one recollection of going to the premises, which was at the auction on 20 March 2003. She said she did not remember whether there were shipping containers near the office at that time. She said if there were shipping containers there, she did not think she would have found that unusual. She denied knowing Mr Rolfe stored personal property on the premises.
89 Mr Paul Sutherland, Mr Paul Farrelly and Mr Grant Sutherland all denied knowledge of Mr Rolfe storing possessions at the premises.[36] Mr Paul Sutherland and Mr Farrelly both recalled seeing containers on the premises, but did not know they belonged to Mr Rolfe. Mr Paul Sutherland had no recollection of the alleged conversation with Mr De Petro at the time the financed Porsche was repossessed.
[36]T798, L29 – T799, L1; T831, L23; T846, L9
90 The first documentary evidence of Mr Rolfe notifying Investec, Gadens or Sutherland Farrelly that he had containers on the premises was his facsimile dated 30 May 2003, and the first time he notified them of the contents of the containers was by facsimile dated 30 June 2003.
91 I accept the evidence of the defendants’ witnesses; they gave their evidence in a forthright and direct manner. They all made concessions in giving their evidence. They impressed me as witnesses of truth. I accept that Investec had no knowledge of the containers or their contents prior to 30 May 2003.
92 Accordingly, I do not accept that Investec knew of the containers or consent to them being stored at the premises. Mr Rolfe has not established the requisite knowledge. Accordingly, I dismiss the claim in bailment. There could be no relationship of bailment between Mr Rolfe and Investec, as knowledge is essential for the creation of a bailment.
93 Given all the evidence, I conclude that Investec did not know, nor did it consent to, Mr Rolfe storing the containers at the premises. Without the knowledge and consent of Investec, there can be no bailment relationship between it and Mr Rolfe. Given my findings, I do not propose to address the nature and extent of the duty owed in bailment or whether Investec breached the duty.
94 Accordingly, I dismiss the claim in bailment.
Contract, misleading and deceptive conduct and negligence
95 Mr Rolfe also made claims in negligence, contract and misleading and deceptive conduct.
96 In respect of the negligence claim, there is no general duty of care to ensure the safekeeping of a third party’s possessions. To establish a claim in negligence Mr Rolfe needed to prove that Investec owed him a specific duty of care to look after the containers. Mr Rolfe pleaded the alleged agreement with Ms McMaster as establishing a duty of care owed by Investec to Mr Rolfe to take reasonable care of the containers. As already determined above, Mr Rolfe failed to prove that the alleged conversation and agreement occurred. Consequently, he has failed to prove that Investec owed him a duty of care in relation to the containers. I dismiss the claim in negligence.
97 The claims in contract and misleading and deceptive conduct also relied on the alleged conversation and agreement. In addition, to the lack of agreement, the claim under contract was hampered by the lack of evidence of consideration.
98 There were a number of other grounds upon which the claim of misleading and deceptive conduct would fail. In closing submissions, Mr Harrison accepted that the misleading and deceptive conduct claim could not be sustained.
99 Consequently, I dismiss the claims in contract and misleading and deceptive conduct.
Mortgagee in possession
100 Mr Rolfe pleaded that on and from 11 February 2003, Investec took possession of the containers when it took possession of the premises and at such point assumed responsibility for taking care of the containers and keeping them safe.
101 What is in issue in this claim is whether, as mortgagee in possession, Investec had a duty to ensure that the containers were kept safe, and if so, whether it breached that duty.
102 I accept the submission of counsel for Investec that this claim is misconceived. Fisher and Lightwood’s ‘Law of Mortgage’[37] outlines the requirements of mortgagees in possession. It sites Jones v Foley[38] as authority for the proposition that a mortgagee who takes possession is not obliged to look after chattels left on the premises pending their removal. In fact, the presence of chattels on premises constitutes an impediment to the mortgagee’s possession.
[37]2nd Australian edition 2005 at [19.26]
[38][1891] 1 QB 730
103 Accordingly, I accept that Investec did not owe Mr Rolfe a duty to keep the containers safe and dismiss this claim.
Claim in detinue
104 Mr Rolfe also makes a claim in detinue. Mr Rolfe alleges that Investec refused and still refuses to return the containers to him and detains them from him.
105 Counsel for Mr Rolfe did not address me on this claim. There was no evidence that Investec knew about the existence of the containers on the premises. There was no evidence that Investec currently has possession of the containers.
106 Accordingly, I dismiss this claim.
Ownership of the goods
107 Given my findings, it is unnecessary for me to deal with the aspect of ownership. However, in the event I have erred in any of the above reasoning, and for completeness, I will address this issue.
108 In order to prove that Investec is liable for any loss of the goods, Mr Rolfe must prove his ownership of the goods.
109 I accept that Mr Rolfe owned containers and stored them at the premises. This was supported by the evidence of Mrs Rolfe and his former employees. What was not clear was the contents of the containers and the ownership of the vehicles at the time the containers disappeared.
110 The main aspect of the claim relates to Porsches and car parts alleged to be owned by Mr Rolfe and stored in the containers. I accept Mr Rolfe had an interest in Porsche motor vehicles and owned and raced vehicles over the years. This was supported by the evidence of his wife and former employees.
111 Mrs Rolfe said at the time they moved from Bacchus Marsh to Middle Park, Mr Rolfe had two 924s and one 911 Porsche, which were taken to the yard and stored securely in containers. To the best of her knowledge, they were never sold or disposed of. She was unable to recall when she last saw the containers.
112 Mr Davis said some time between 2001 and 2003, he helped push the 911 Porsche out of a container. That was the only evidence he gave about seeing any of the vehicles. Mr Stanic said he saw the GTR in one of the sheds at the premises. He did not say when that was, and his evidence was he ceased working at the premises in 2000. Mr De Petro said he saw all three vehicles on the day he assisted Mr Rolfe put car parts in the containers. It is not clear from his evidence that he meant in February 2003, because he had helped Mr Rolfe previously; however, I am prepared to accept he was referring to assisting Mr Rolfe in February 2003.
113 Mr Rolfe’s wife and former employees gave evidence that Mr Rolfe had car parts in the office at the premises. I accept their evidence.
114 I accept that the vehicles existed and were stored at the premises at some point.
Identification of car parts
115 I accept that Mr Rolfe stored car parts at the premises, but I am not satisfied that he has identified the car parts stored in the containers. Mr Rolfe’s evidence was that there were nuts, bolts and washers, an engine block, an engine pump, brake parts, brake callipers and brake discs.[39] In 2010, he prepared a list of parts based on two manuals he kept at home.[40] The list was prepared seven years after the alleged theft. No receipts of purchase or payment detailing car parts to the value of $200,000, or any other documentary evidence of the car parts, were tendered. There was no evidence as to how or when the car parts were obtained by Mr Rolfe. Mr Rolfe’s wife and former employees referred to car parts generally and did not give evidence about specific items. I accept the list was not based on his recollection of what parts were missing. I note that the parts were not mentioned in his facsimile to Gadens on 30 June 2003.
[39]T129, L21
[40]T299, L10
116 Accordingly, I find that Mr Rolfe has not identified the car parts.
Ownership of the vehicles
117 Mr Rolfe gave inconsistent evidence as to the ownership of the vehicles and parts. Mr Rolfe’s evidence was that the assets claimed in this proceeding were his assets; he paid for them. There was no written documentation to support that claim. Mr Rolfe said there were no ownership papers, as these were also stored in the containers.[41]
[41]T335
118 The evidence was that only one vehicle, the Porsche GTS, was registered and that the registration had lapsed. The evidence was it had been registered in the name of James Rolfe Transport Pty Ltd.[42] I accept that registration is not proof of title.
[42]James Rolfe Transport Pty Ltd is a separate company to JRT Vic. Mr Rolfe was a director of James Rolfe Transport Pty Ltd.
119 Mr Rolfe was referred to Exhibit C, which was a bundle of documents he sent to his lawyers for the purpose of Further and Better Particulars. I was referred to the second-last page to a footnote with three asterisks. That said:
“As discussed with you recently, the GTS was purchased and registered by James Rolfe Transport, not me. It is highly likely that the same applied to the GTR and many of the spare parts. If it is a simple matter of advising the defendant of the mistake with ownership, they should be advised. This will have the effect of reducing ITSA’s 20 per cent share of any damages awarded to a minimum sum.”[43]
[43]Exhibit C
120 Mr Rolfe was asked about the above matter. He said:
“That to me is an entirely different thing to the ownership of the vehicle. There is absolutely no reason that James Rolfe Transport would have owned three racing cars and many, many spare parts unless they paid for them, and they didn't pay for them.”[44]
[44]T329, L22-25
121 Mr Rolfe said he used GTR Racing Pty Ltd as the name under which he entered motor races. He denied that GTR Racing Pty Ltd owned any of the racing cars.[45] He agreed that it was quite possible he had told people that the Porsches and parts belonged to GTR Racing but said that was simply wrong.[46]
[45]T322, L21
[46]T322, L29-31
122 Mr Rolfe was referred to a file note of a conversation between himself and a case manager of the official trustee on 4 August 2009. The note recorded:
“Further delving revealed the assets he was seeking compensation were likely to be company-owned assets and not personal-owned assets.” [47]
[47]File Note tendered by the first defendant and marked as Exhibit D 1-2
123 In response, Mr Rolfe said:
“[T]here's always been a cloud in my mind between what is mine and what is in fact the property of a private company that is owned entirely by me.”[48]
[48]T324, L31 – T325, L16
124 Given the lack of documentary evidence, the fact that one car was registered in a company name and Mr Rolfe’s admission that he at times was uncertain about what constituted assets of his companies and what were his personal assets, I am not satisfied that Mr Rolfe has discharged the onus to prove ownership of the vehicles.
125 Accordingly, Mr Rolfe’s claim would otherwise have failed for want of proof of ownership of the goods.
126 As Mr Rolfe has failed to prove his case against Investec, the claims against Gadens and Sutherland Farrelly fall away. In addition, as I have not found for the plaintiff, I do not propose to address the issue of Mr Rolfe’s standing to bring these proceedings.
127 In reaching my decision, I have considered all the evidence.
128 I will hear the parties about the precise orders sought, and costs.
- - -
2
2
0