Scandi International Pty Ltd (ACN 082 473 747) and Ors(according to the Schedule attached) v Larkfield Industrial Estate Pty Ltd (ACN 006 067 965)
[2019] VSCA 109
•20 May 2019
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2018 0071
| SCANDI INTERNATIONAL PTY LTD (ACN 082 473 747) & ORS (according to the Schedule attached) | Applicants |
| v | |
| LARKFIELD INDUSTRIAL ESTATE PTY LTD (ACN 006 067 965) | Respondent |
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| JUDGES: | WHELAN and BEACH JJA and SIFRIS AJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 6 May 2019 |
| DATE OF JUDGMENT: | 20 May 2019 |
| MEDIUM NEUTRAL CITATION: | [2019] VSCA 109 |
| JUDGMENT APPEALED FROM: | [2018] VCC 584 (Judge Anderson) [2018] VCC 628 (Judge Anderson) |
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CONTRACT – Agreement – Storage of outdoor furniture at commercial storage facility – Occupation agreement in name of company in liquidation – Identity of contracting party – Identity of owner of goods stored – Proof of ownership of goods stored – Evidence – Whether evidence sufficient to establish ownership – Claims of ownership rejected by judge – Detailed analysis by judge – No basis for overturning judge’s conclusions that ownership claims not made out.
BAILMENT – Lien – Uncollected goods – Goods under bailment – Outstanding charges – Whether outstanding charges required to be paid prior to release of goods – Relevant charge – Amount payable entitling provider to take delivery of goods – Australian Consumer Law and Fair Trading Act 2012, ss 3, 54, 55, 59, 66, 68 and 70.
WORDS AND PHRASES – Bailment – Goods under bailment – Relevant charge – Provider – Receiver – Australian Consumer Law and Fair Trading Act 2012, Part 4.2.
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| APPEARANCES: | Counsel | Solicitors |
| For the first, second and third applicants | Mr L F M Watts | Joseph Guss Lawyer |
| For the fourth applicant | Mr J Guss | Joseph Guss Lawyer |
| For the respondent | Mr M A J McKillop | HWL Ebsworth Lawyers |
WHELAN JA
BEACH JA
SIFRIS AJA:
Larkfield Industrial Estate Pty Ltd, the respondent, operated a storage facility at premises in Somerville Road, West Footscray. On 1 October 2013, Joseph Guss, the fourth applicant, signed a document headed ‘Occupation Agreement’ with Larkfield (‘the occupation agreement’). The occupation agreement related to the occupation of Shed 43A at Larkfield’s storage facility.
The purpose of the occupation agreement was to permit the storage of goods in Shed 43A by the tenant, identified in the occupation agreement as Casualife Furniture International Pty Ltd (‘CLF International’). The goods that were subsequently stored in Shed 43A following the making of the occupation agreement were primarily outdoor furniture (‘the stored furniture’).
Rental in respect of the occupation agreement was paid on behalf of the tenant up to and including May 2015. On 10 September 2015, Larkfield’s solicitors wrote to Mr Guss demanding payment of the arrears that were then owed under the occupation agreement. The letter stated that Larkfield had ‘terminated your licence to occupy the premises’ and ‘changed the locks to the premises’. The letter also stated that Larkfield would permit access to the premises to remove the stored goods after the outstanding arrears had been paid.
In July 2016, the first and second applicants, Scandi International Pty Ltd and Casualife Furniture International Ltd (‘CLF Hong Kong’), commenced proceedings in the County Court claiming that they were the owners of the stored furniture, and seeking orders that they be permitted to retake possession of the stored goods. Scandi claimed its interest in the stored goods as a purchaser; CLF Hong Kong claimed its interest ‘pursuant to and by reason of the crystallisation of mortgage debentures’ over the property of a number of entities, including the third applicant, ACN 112 314 502 Pty Ltd (‘LHV’).
In the proceeding below, Larkfield denied that Scandi and CLF Hong Kong had any entitlement to the relief they sought. In addition, Larkfield counterclaimed seeking an order for the sale of the stored furniture, and to recover the amounts it claimed it was owed in respect of the occupation agreement. While Mr Guss and LHV were not plaintiffs in the proceeding below, Larkfield joined them as the third and fourth defendants by counterclaim.
On 4 May 2018, following a five day trial in the County Court, the trial judge delivered reasons dismissing the claims of Scandi and CLF Hong Kong, and upholding Larkfield’s counterclaim.[1] On 9 May 2018, the judge heard the parties on the form of appropriate orders and issues of costs. At the conclusion of the argument, he delivered further reasons in relation to the form of the orders and costs.[2]
[1]Scandi International Pty Ltd v Larkfield Industrial Estate Pty Ltd [2018] VCC 584 (‘Primary Reasons’).
[2]Scandi International Pty Ltd v Larkfield Industrial Estate Pty Ltd[No 2] [2018] VCC 628 (‘Costs Reasons’).
The judge made orders that there be judgment for Larkfield on the claim and on the counterclaim. Judgment was given against Scandi and CLF Hong Kong on the claim, and against Scandi, CLF Hong Kong, LHV and Mr Guss on the counterclaim. The judge also made an order that Larkfield’s costs of the proceeding (including the counterclaim) be paid by all four applicants — although, in relation to LHV and Mr Guss, these costs were only ordered to be paid from the time they were joined as defendants to the counterclaim.
In relation to the counterclaim, the judge ordered:
(a)pursuant to s 70 of the Australian Consumer Law and Fair trading Act 2012 (‘the Act’), [Larkfield] is authorised to sell by public auction … [the stored furniture] unless the relevant charge stated in [paragraph (b)] hereof is paid to [Larkfield] on or before 31 May 2018;
(b)a declaration pursuant to s 70(2)(c) of the Act that the relevant charge payable to [Larkfield] is the sum of $157,582.35, calculated as follows:
(i)$21,794.64, total unpaid rent pursuant to [the occupation agreement];
(ii)$115,435.07, storage of the stored furniture from 1 October 2015 to 21 November 2017;
(iii)$20,969.04, storage of the stored furniture from 22 November 2017 until 9 May 2018.[3]
[3]While the judge declared the relevant charge to be the sum of $157,582.35, the sum of the three components identified in (i)–(iii) of his order is in fact $158,198.75. In this Court, no party (least of all the applicants, to whom this arithmetic error was capable of being advantageous) took any issue with this discrepancy.
(c)[Larkfield] is permitted to dispose of any goods not sold at the public auction referred to in [paragraph (a)] hereof.
(d)[Larkfield] is to apply the proceeds of sale referred to in [paragraph (a)] hereof as follows:
(i)first, against the costs of conducting the sale;
(ii)secondly, against the costs of disposing of any unsold goods;
(iii)thirdly, in payment of the relevant charge referred to in [paragraph (b)] hereof;
(iv)fourthly, into [a trust account] to be applied against the costs of [Larkfield] payable pursuant to [this order].
The applicants now seek leave to appeal against the judge’s orders. They seek to set aside both the substantive orders and the costs orders. In their place, they seek orders that Scandi and CLF Hong Kong have access to Larkfield’s premises for the purpose of removing the stored furniture, and orders for costs in favour of all four applicants.
Background
The occupation agreement was executed on 1 October 2013 between Larkfield as landlord and CLF International as tenant. The agreement was negotiated and executed on behalf of the tenant by Mr Guss. Mr Guss gave evidence at trial that the entity upon whose behalf he was acting was ‘Casualife Furniture’, which he said was a business name which LHV used in Australia.
As we have already noted, however, the party identified as the tenant in the occupation agreement was CLF International. Mr Guss gave evidence that he never intended that CLF International should be the tenant. CLF International was wound up in 2004, and later deregistered on 3 November 2013.
On 24 November 2014, Larkfield’s solicitors wrote to Mr Guss saying that it had come to their client’s attention that CLF International was deregistered. The letter stated that:
In the circumstances, those persons currently in occupation of the premises are doing so without the authority of [Larkfield] and are otherwise trespassing on the premises.
[Larkfield] will withhold its right to retake possession of the premises and take legal action for trespass if a new licence agreement is entered into by Monday, 8 December 2014.
On 7 December 2014, Mr Guss responded to the letter of 24 November, proposing a new licence agreement be entered into with Scandi.
On 23 February 2015, Larkfield’s solicitors wrote to Scandi enclosing a new agreement naming Scandi as the licensee. An executed agreement, however, was never returned to Larkfield or its solicitors by Scandi.
Notwithstanding Larkfield’s solicitors demands, and the failure of any entity to enter into a new licence agreement, rental payments continued to be made, and the stored furniture remained in Shed 43A. The last payment of rent, however, was made on 11 June 2015, bringing the rental up to date to 31 May 2015. These payments were made by LHV cheques, or by electronic transfer from LHV, notwithstanding that LHV itself was deregistered on 18 May 2014.
On 10 September 2015, as we have already noted,[4] Larkfield’s solicitors wrote to Mr Guss demanding payment of the arrears and advising that Larkfield had terminated the licence granted under the occupation agreement. The letter also provided that, ‘after the outstanding licence fees are paid you will be permitted to access the premises to remove your goods stored on the premises’.
[4]See [3] above.
On 28 September 2015, Mr Guss responded by email stating, ‘we are in a position to immediately pay you half the amount outstanding’. That amount was, however, never paid.
On 14 October 2015, Larkfield’s solicitors sent a letter to Mr Guss purporting to give notice, pursuant to s 66 of the Australian Consumer Law and Fair Trading Act 2012 (‘the Act’), of Larkfield’s intention to dispose of the stored furniture. The letter provided:
Notice of intention to dispose of goods
Shed 43A, 400 Somerville Road, West Footscray Victoria (Premises)
On behalf of our client, Larkfield Industrial Estate Pty Ltd, we give you notice pursuant to section 66 of the Australian Consumer Law and Fair Trading Act 2012 that our client will dispose of the goods described in this letter after 28 days from the date of this letter unless they are collected and the outstanding licence fee is paid to our client.
Our client will retain from the proceeds of sale of the goods an amount not exceeding the sum of the outstanding licence fee and disposal costs.
1.Description of goods: outdoor furniture including tables, chairs, sun lounges and couches and other miscellaneous goods stored at the Premises.
2.Address of which goods can be collected: Shed 43A, 400 Somerville Road, West Footscray Victoria during business hours on a date to be agreed.
3.Outstanding licence fee: $27,305.65.
4.Increase in licence fee: On 1 November 2016 the outstanding licence fee referred to in point 3 above will increase by $5,448.66.
On 13 November 2015, CLF Hong Kong wrote to Larkfield’s solicitors saying that it had been sent a copy of the letter of 14 October 2015. CLF Hong Kong stated:
We give you notice that the goods in question are the subject of Registered Charges Nos 1120218 and 1863196 in favour of this company, that we have given notice to the chargees that your notice constitutes a breach of our charge (sic) and that we are taking possession of the goods in question.
On 14 November 2015, a number of persons, including Mr Guss and his daughter, Marilla Guss (CLF Hong Kong’s marketing manager), attended Shed 43A and commenced removing items of the stored furniture. They left when Harry Ewald (Larkfield’s supervisor and maintenance officer for the facility) intervened. Later, the stored furniture was moved by Larkfield to Shed 37, where it was then secured.
On 17 November 2015, Larkfield’s solicitors wrote to CLF Hong Kong purporting to give CLF Hong Kong notice pursuant to s 66 of the Act. The letter also noted that the solicitors had been unable to locate any document recording the registered charges referred to in CLF Hong Kong’s letter of 13 November. The letter provided:
On behalf of our client, Larkfield Industrial Estate Pty Ltd, we give you notice pursuant to section 66 of the Australian Consumer Law and Fair Trading Act 2012 (Act) that our client intends to dispose of the goods described in this letter after 28 days from the date of this letter unless they are collected and the outstanding licence fee is paid to our client.
For the purposes of section 66 of the Act we provide the following information to you:
1.Description of goods: outdoor furniture including tables, chairs, sun lounges and couches and other miscellaneous goods stored at the Premises.
2.Address at which goods can be collected: Shed 43A, 400 Somerville Road, West Footscray Victoria during business hours on a date to be agreed.
3. Outstanding licence fee: $32,754.31.
4.Increase in licence fee: On 1 December 2015 the outstanding licence fee referred to in point 3 above will increase by $5,448.66.
5.Our client will retain from the proceeds of sale of the goods an amount not exceeding the sum of the outstanding licence fee owed to our client and disposal costs with respect to the goods.
We have not been able to locate any document recording the ‘Registered Charges’ referred to in your letter dated 13 November 2015. In addition, the registration numbers you have provided to us do not appear to be valid. As such, our client cannot provide you with access to the Premises to remove the goods. Accordingly, the goods will be dealt with by our client in accordance with the Act.
On 7 July 2016, lawyers acting for Scandi wrote to Larkfield’s solicitors asserting that Scandi was the owner of goods set out in a schedule annexed to a draft statement of claim sent with the letter. Scandi’s lawyers’ letter demanded immediate access to Larkfield’s premises for the purpose of Scandi collecting its goods.
On 8 July 2016, Larkfield’s solicitors gave notice to Scandi’s lawyers that Larkfield would sell the stored furniture by public auction unless outstanding storage charges, auction costs and legal costs were paid. On 19 July 2016, Larkfield’s solicitors wrote to Scandi purporting to give the same notice under s 66 of the Act as had been given to Mr Guss on 14 October 2015 and CLF Hong Kong on 17 November 2015. Identical notices were also sent on the same day to Mr Guss and CLF Hong Kong.[5]
[5]In the notices of 19 July 2016, however, the figures for the relevant charges payable and an estimate of further charges to accrue were updated.
Relevant provisions of the Act
A substantial part of the applicants’ arguments in this Court concerned the proper construction and application of Part 4.2 of the Act. It is therefore necessary to describe the operation of Part 4.2, and to set out some of its critical provisions.
Part 4.2 of the Act deals with the disposal of ‘uncollected goods’. It contains four divisions. Division 1 contains ss 54 to 57; Division 2 contains ss 58 to 67; Division 3 contains ss 68 to 72; and Division 4 contains ss 73 to 77.
Section 3(1) provides that ‘uncollected goods has the meaning given by section 54’. Section 54 relevantly provides:
54 Uncollected goods
(1) Goods under bailment are uncollected goods if –
(a)the goods are ready for delivery to the provider in accordance with the terms of the bailment, but the provider has not taken delivery of the goods and has not given directions as to their delivery; or
…
(d)the provider has not paid the relevant charge payable to the receiver in relation to the goods within a reasonable time after being informed by the receiver that the goods are ready for delivery.
(2)Goods are not uncollected goods for the purposes of sub-section (1)(a) if the provider’s failure to take delivery arises from –
(a)the receiver refusing to make delivery; or
(b)the receiver preventing the provider from taking delivery.
Section 3 of the Act contains definitions of some of the terms used in Part 4.2 of the Act as follows:
bailment includes bailment for reward, bailment in the course of business, gratuitous bailment, involuntary bailment and any sub-bailment;
…
provider, in Part 4.2, means the person who gives possession of goods under a bailment (whether or not the person is the owner of the goods);
…
receiver, in Part 4.2, means the person who takes possession of goods under a bailment;
The ‘relevant charge’ referred to in s 54(1) of the Act is defined by the terms of s 55. Section 55 provides:
55 Relevant charge
(1)The relevant charge is the amount payable by the provider to the receiver for goods under bailment and payment of which entitles the provider to take delivery of the goods.
(2)Unless determined otherwise by a court order, the amount payable to the receiver is the sum of the following—
(a)for any carriage or storage of the goods or for any repairs, cleaning, treatment or other work done in connection with the goods—
(i)the amount agreed to by the provider and receiver as the charge payable to the receiver; or
(ii)in the absence of an agreement, an amount that is reasonable;
(b)the amount of costs for any storage, maintenance or insurance of the goods incurred by the receiver from—
(i)the giving of a notice under Division 2 of the receiver's intention to dispose of the goods until the disposal of the goods; or
(ii)the making of an application for a court order under Division 3 until the disposal of the goods.
Section 58 permits a receiver to dispose of uncollected goods provided that there is no dispute between the provider and the receiver regarding the relevant charge, and also that no application has been made to a court under s 69 of the Act.
Section 59 of the Act deals with circumstances where the relevant charge has been paid. Section 59 provides:
59 Payment of relevant charge
The provider, the owner of the uncollected goods or any other person with an interest in the goods is entitled, on payment of the relevant charge, to delivery of the goods at any time before their disposal.
Sections 60, 61 and 62 provide for the giving of written notice of a receiver’s intention to dispose of relevant goods. The relevant section in the present case, having regard to the value of the stored furniture, was s 62. Section 62 requires a receiver who wishes to dispose of ‘high value uncollected goods’ to give written notice of the receiver’s intention to dispose of the goods to:
(i) the provider; and
(ii)in a case where the provider and the owner are different people and the receiver is aware of that fact, the owner of the goods; and
(iii) any person who has a publicly registered interest in the goods; and
(iv)any other person having or claiming an interest in the goods of which the receiver is aware.
Section 66 of the Act deals with the form of notices required to be given of a receiver’s intention to dispose of uncollected goods under Division 2. Section 66 provides that the notice must specify:
(a) the receiver's name;
(b) a description of the goods;
(c) an address at which the goods may be collected;
(d)a statement of the relevant charge payable to the receiver for the goods and, if the relevant charge is likely to increase, a statement of the current relevant charge and an estimate of further charges that will accrue;
(e)a statement to the effect that on or after a specified date the goods will be disposed of unless they are collected and the relevant charge paid;
(f)if applicable, a statement to the effect that the receiver will retain from the proceeds of sale of the goods an amount not exceeding the sum of the relevant charge and the disposal costs.
Division 3 of Part 4.2 deals with applications to a court for a disposal order. Section 68 permits a receiver to apply to a court for an order to dispose of uncollected goods. Section 68(2) provides that the application must ‘state fully the grounds on which it is made’, and include the information set out in (a)–(d) of the previous paragraph. Section 68(3) requires the receiver to give a copy of the application to:
(a)the provider, if the provider can be located after reasonable enquiries have been made;
(b)the owner of the goods, if the owner can be located after reasonable enquiries have been made;
(c) any person with a publicly registered interest in the goods;
(d)any other person known by the receiver to have or to be claiming an interest in the goods.
Section 70 of the Act deals with the orders that a court may make on an application under s 68. Those orders are:
(a) an order authorising the disposal of specified goods under bailment;
(b) an order determining the relevant charge payable to the receiver;
(c)any other orders that it considers necessary to give effect to an order made under paragraph (a) or (b).
Section 73 deals with the proceeds of sale. It permits the receiver to retain the relevant charge payable when uncollected goods are sold under Division 2. It also provides that the balance of any proceeds of sale is to be dealt with ‘as if the receiver were a business and the money were unclaimed money for the purposes of the Unclaimed Money Act 2008’.
The occupation agreement
As we have already noted, the occupation agreement provided that the landlord was Larkfield and the tenant was Casualife Furniture International Ltd (referred to at first instance, and in this Court, as CLF International). The occupation agreement provided that the ‘premises’ and ‘leased area’ was Shed 43A. The rent was specified, both as to amount and time for payment.
Next to the words ‘License to occupy’ the following was provided:
The Tenant is occupying the premises on the basis it agrees to the terms and conditions outlined in the Landlord’s standard Licence agreement, Site Rules and Emergency Evacuation Manual Plan all of which have been provided with the occupation agreement.
On the next page of the occupation agreement, under the heading ‘Essential Terms or Special Conditions’ there were 12 conditions. Condition 10 provided:
Default
If rent remains unpaid for 60 days the Landlord reserves the right to repossess the Premises and dispose of all stored materials at the Tenant’s cost. The Landlord will pursue recovery of all debts including legal fees through the legal system.
Mr Guss initialled all pages of the occupation agreement, and signed its last page, ‘for and on behalf of Casualife Furniture International Ltd’ (CLF International).
Issues in dispute at trial
The judge identified the following issues as being in dispute between the parties at trial:
·the identity of the party that contracted with Larkfield when the occupation agreement was executed;
·whether the stored furniture was owned by Scandi and CLF Hong Kong as alleged by them;
·whether Scandi and CLF Hong Kong were entitled to retake possession of the stored furniture, or whether they were only entitled to do so if unpaid rental and other charges were first paid to Larkfield;
·whether Larkfield was, or became, a bailee of the stored furniture; whether it was entitled to retain the stored furniture as ‘uncollected goods’ under the Act; and whether it was entitled to sell the stored furniture by public auction pursuant to the provisions of the Act;
·the amount of the ‘relevant charge’ referred to in Part 4.2 of the Act; and
·whether Larkfield had any other entitlement to relief against any of the applicants in respect of unpaid rent or charges, or for causes of action such as breach of warranty of authority, misleading and deceptive conduct; conspiracy and unconscionable conduct.[6]
[6]Primary Reasons [5].
In relation to the issue of whether Larkfield was, or became, a bailee of the stored furniture, in their statement of claim, Scandi and CLF Hong Kong pleaded that Larkfield became an involuntary bailee of the stored furniture when it re-entered and took possession of Shed 43A and the stored furniture, following Larkfield’s solicitors’ letter of 10 September 2015 to Mr Guss. The applicants denied, both at trial and in this Court, the existence of any bailment prior to that time.
The judge’s findings
The judge concluded as follows:
(1) In relation to who contracted with Larkfield when the occupation agreement was executed:
·CLF International had been in liquidation since 2004 and could not be bound to the occupation agreement by Mr Guss;
·LHV, although it made rental payments, was never suggested by Mr Guss to Larkfield as the contracting party;
·whilst Scandi had been proposed by Mr Guss to be a new contracting party on 7 December 2014, it never entered into contractual relations with Larkfield; and
·Mr Guss only purported to act as an agent on behalf of other parties, and not to bind himself as a principal.
(2)It was not possible on the evidence to be satisfied that Scandi or CLF Hong Kong were the owners of the goods each claimed, or that they were otherwise entitled to recover possession.
(3)In any event, Scandi and CLF Hong Kong would only be entitled to take possession of the stored furniture if they first paid to Larkfield the unpaid rental and other charges, by reason of an equitable lien in favour of Larkfield or the application of s 59 of the Act.
(4)In relation to the Act:
·Larkfield became an involuntary bailee of the stored furniture, not later than when it terminated the occupation agreement in September 2015 or moved the stored furniture into secured storage in November 2015;
·in the absence of payment of the outstanding rental and storage charges, Larkfield was entitled to retain the stored furniture as uncollected goods under the Act;
·Larkfield had satisfied the requirements of s 66 of the Act, by service of the required notice on Mr Guss on 14 October 2015; and it had also satisfied the requirements of s 68 of the Act, by the issue and service of its counterclaim; and
·Larkfield was entitled to an order for the sale of the stored furniture by public auction pursuant to the provisions of the Act.[7]
[7]Ibid [6].
While Larkfield had sought to recover an amount in excess of $476,000, the judge, as we have already observed, made an order declaring the relevant charge to be $157,582.35. The judge then dismissed Larkfield’s remaining claims against the applicants, holding that no loss or damage had been sustained by it in relation to the breach of warranty and misleading or deceptive conduct claims; and also holding that no conspiracy as alleged by it had been established.[8]
[8]Ibid.
Events following judgment
Following judgment, Larkfield moved, in accordance with the judge’s orders, to sell the stored furniture. An application to stay the judge’s orders was refused by this Court on 25 July 2018.[9] On 26 July 2018, the stored furniture was sold at auction. We were informed by the parties that the gross proceeds of the sale were $63,755.[10]
[9]Scandi International Pty Ltd v Larkfield Industrial Estate Pty Ltd (Unreported, Court of Appeal, McLeish JA and Moore AJA, 25 July 2018).
[10]An additional amount of $6,375 was apparently received for GST.
Parties’ contentions in this Court
In this Court, the applicants made a series of complaints about the judge’s findings on liability and the judge’s consequential order for costs. The applicants commenced their argument by attacking the judge’s findings in relation to the construction and application of the Act.
While in oral argument the applicants accepted that Larkfield became a bailee of the stored furniture on 10 September 2015,[11] they nevertheless submitted that the judge erred in finding that the stored furniture constituted uncollected goods for the purposes of Part 4.2 of the Act. In their written case, the applicants made a number of complaints about the judge’s conclusions in respect of Part 4.2 of the Act. With one exception (a complaint that the judge erred in making an order against LHV because no notice under s 66 of the Act was given to LHV) each of these complaints had at its base one of two propositions:
·the stored furniture did not constitute uncollected goods for the purposes of Part 4.2 of the Act; and
·the relevant charge could not, on any view, include an amount payable to Larkfield prior to the creation of the bailment in September.
[11]An assertion in the applicants’ written case that the bailment did not arise until 14 November 2015 was not pursued by the applicants in oral argument in light of the plea by Scandi and CLF Hong Kong in their statement of claim that Larkfield became a bailee of the stored furniture following the sending of the 10 September 2015 letter. As to the position taken in argument before the judge, see Primary Reasons [49].
In argument, the applicants submitted that the question of whether the stored furniture constituted goods under bailment fell to be determined by the operation of s 54(1)(d). They also submitted, however, that the exception in s 54(2) was of importance — notwithstanding the fact that, on its terms, s 54(2) only had application in respect of goods that are uncollected goods by reason of s 54(1)(a). The submission was that because Larkfield prevented the applicants from recovering possession of the stored furniture on 14 November 2015, the stored furniture could not constitute uncollected goods.
Alternatively, the applicants submitted that the stored furniture did not fall within s 54(1)(d) because the stored furniture was not ‘under bailment’ when Larkfield made its demand on 10 September 2015. It was submitted that the amount demanded on 10 September 2015 was not a relevant charge within the meaning of Part 4.2 of the Act, and the stored furniture remained in Shed 43A pursuant to the occupation agreement. We interpolate that this submission, while not pursued before us in great detail, appeared to cut across the applicants’ acceptance of the proposition that Larkfield became a bailee of the stored furniture following the sending of the 10 September 2015 letter.
In a separate submission, Mr Guss, who appeared for himself, contended, on his own behalf, that the stored furniture could not constitute uncollected goods because there was no ‘provider’ who had given possession of the goods to Larkfield. This submission was made on two bases: first, on the basis that the party who contracted with Larkfield was not capable of being identified; and secondly, on the basis that, at the time of the creation of the bailment, no person gave possession of the stored furniture to Larkfield — Larkfield merely took possession unilaterally.
In relation to the relevant charge (s 55 of the Act), the applicants submitted that any amounts that might have been owing pursuant to the occupation agreement prior to the creation of any bailment could not form part of the relevant charge even if, contrary to their primary submission, the stored furniture constituted uncollected goods.
They then submitted that Larkfield’s demands (and s 66 notices) claiming amounts said to be owed prior to the commencement of the bailment that arose in September 2015 were unjustified. Moreover, they submitted that the making of these unjustified demands or claims gave the Court a discretion under s 55(2) to determine that the relevant charge should be reduced so as not to include all of the storage costs incurred after the commencement of the bailment. The applicants submitted that, in calculating the relevant charge, the judge erred:
·by including charges incurred prior to the creation of any bailment; and
·by not exercising his discretion to determine that the relevant charge should be further reduced because of Larkfield’s unjustified claims under the Act for charges incurred prior to 10 September 2015.
Next, the applicants submitted that compliance with the notice requirements of s 66 of the Act were essential to the making of orders under s 70 of the Act. As we have already noted, the applicants submitted that no order could be made against LHV because no notice was given under s 66 to it. In relation to the other applicants, it was submitted that the notices were invalid because they claimed amounts said to be owing before the creation of the bailment on 10 September 2015. The applicants contended that the purported s 66 notices could not be read down so as to make them compliant with s 66 of the Act.
The applicants argument then turned to clause 10 of the occupation agreement and the judge’s conclusion that an equitable lien existed. They contended that the judge was wrong when he concluded that an equitable lien existed in favour of Larkfield preventing recovery of the stored furniture from it unless the amounts outstanding in relation to the furniture were first paid to it.
In support of that contention, the applicants submitted that cl 10 of the occupation agreement did not confer any lien on Larkfield. The submission was that cl 10 permitted Larkfield to remove the goods from where they were stored so that it could relet the premises. It was submitted that, notwithstanding that the clause permitted Larkfield ‘to dispose of all stored materials … [and] pursue recovery of all debts’, clause 10 did not give Larkfield a right to sell the stored furniture to recover outstanding rental (licence payments).
The applicants then turned to the claims of Scandi and CLF Hong Kong, submitting that the judge was wrong not to be satisfied that they each owned those items of the stored furniture claimed by them. The applicants submitted that, on the whole of the evidence, the judge should have been satisfied on the balance of probabilities as to the ownership claims of Scandi and CLF Hong Kong.
In a separate submission, Mr Guss contended that ‘no declaration should ever have been made against [him]’. He was not ‘the provider’ under the Act; nor was he a person who claimed ownership or any other interest in the goods. He submitted there was no basis for the judge granting any relief against him, and that he should have been given his costs of the proceeding.
Finally, the applicants contended that even if they failed to establish an error in relation to the judge’s orders on liability, the judge in any event erred in the exercise of his discretion in relation to costs. The applicants contended that the judge:
·erred in not finding that Scandi and CLF Hong Kong should only pay 50 per cent of Larkfield’s costs; and
·erred in making orders for costs against LHV and Mr Guss, instead of making costs orders in their favour.
Larkfield contended that leave to appeal should be refused, the applicants’ proposed appeal not having any real prospect of success. In summary, Larkfield submitted:
·the judge was correct to conclude that the stored furniture constituted uncollected goods as described in s 54(1)(d) of the Act;
·the judge did not err in concluding that the relevant charge included amounts owing under the occupation agreement prior to 10 September 2015 — s 55 of the Act either providing that the relevant charge was ‘the amount payable … which entitles the provider to take delivery of the goods’; alternatively, permitting the Court to determine that the amount payable includes amounts owing before the relevant goods become goods under bailment;
·the applicants’ complaint about the contents of the s 66 notices (and the fact that no s 66 notice was given to LHV) was not relevant because Larkfield exercised its entitlement to go to court under Division 3 of Part 4.2, rather than its right to self-help under Division 2 which was the right that required notice to be given under s 66 (s 66 only being required to be complied with in relation to Division 2, not Division 3);
·the judge was correct to conclude that cl 10 of the occupation agreement gave Larkfield a lien over the stored furniture until its outstanding charges were paid;
·on the ‘unsatisfactory state of the evidence’ called by the applicants, the judge was entitled not to be satisfied that Scandi or CLF Hong Kong had made out their claims of ownership; and
·the applicants have not established that the judge’s discretion as to costs miscarried; it was open to the judge to make the costs order he made.
Ownership of the stored furniture
A convenient place to commence the analysis of this case is the issue of ownership of the stored goods. At trial, the only parties claiming ownership, or an entitlement to possession, were Scandi and CLF Hong Kong. In paragraph 5 of their statement of claim, Scandi alleged that it was the owner of goods listed in Annexure A to the statement of claim (‘the Scandi goods’); and in paragraph 6, CLF Hong Kong alleged that it was entitled to demand and recover the goods listed in Annexure B (‘the CFI goods’) by reason of the crystallisation of certain mortgaged debentures, including over assets of LHV.
After a lengthy and detailed analysis,[12] the judge said that he was not satisfied on the evidence that either Scandi or CLF Hong Kong had established that they were the owners of, or ‘otherwise entitled to demand and recover’, the relevant portion of the stored furniture which each claimed.[13]
[12]Primary Reasons [54]–[167].
[13]Ibid [168].
In the event that neither Scandi nor CLF Hong Kong is able to establish that the judge was wrong in not upholding their claims of ownership, or an entitlement to recover possession, the remaining liability issues which the applicants seek to agitate largely fall away. That is, if none of the applicants are able to establish ownership or an entitlement to possession of the stored furniture, then the orders made by the judge that permitted Larkfield to sell the stored furniture and apply the proceeds in payment of the relevant charge are not capable of affecting the applicants.
The complaint the applicants make about the judge’s conclusions with respect to ownership of the stored furniture are encapsulated in ground 8. Ground 8 provides:
8.His Honour erred in holding that he was not satisfied that [Scandi] was the owner of the goods as claimed by it in paragraph 5 of the statement of claim and that [CLF Hong Kong] was entitled to demand and recover the goods claimed in paragraph 6 of the statement of claim, as his Honour’s reasons for so holding was [sic] against the evidence and the weight of the evidence.
The evidence as to ownership, or entitlement to possession, of the stored furniture was largely documentary. Some evidence, however, at a high level, was given by Mr Guss and his daughter, Marilla Guss. Ms Guss gave evidence that:
·she was, and had been for approximately 18 years, a marketing consultant for Scandi;
·in the period December 2004 to May 2014, she was also a marketing consultant for LHV; and
·in the period December 2000 to December 2004, she was a marketing consultant for CLF International.
Ms Guss claimed to have a detailed knowledge of the goods that were stored in Shed 43A. In the course of her evidence, she produced a significant number of documents, including invoices, price lists, stock listings and other documents.
Little needs to be said about the evidence of Mr Guss. At trial, the credibility of Mr Guss’s evidence was very much in issue. Counsel for Larkfield submitted that, during his evidence, Mr Guss had ‘obfuscated or evaded questions when he perceived his answers threatened his interests’; and that the evidence showed Mr Guss to have ‘a lack of commercial morality’.[14] The judge ‘generally accept[ed]’ Larkfield’s submissions.[15] The judge referred to a number of matters including the fact that, notwithstanding Mr Guss’s association with Scandi since its incorporation, and his accountant’s belief that the beneficial owners of Scandi were Mr Guss and his family, Mr Guss was not able, or prepared, to provide a coherent account of his relationship with Scandi either at the time of incorporation or later.[16]
[14]Ibid [17].
[15]Ibid [18].
[16]Ibid.
Ultimately, the judge said that he did not consider that Mr Guss’s evidence should be accepted unless it was supported by other evidence including contemporaneous documents, or unless Mr Guss’s evidence was ‘at least consistent with other evidence providing some support for Mr Guss’s account’.[17]
[17]Ibid [19].
Extensive evidence was given at trial about the relationship between Mr Guss and various entities that used, or were associated with the use of, the business names ‘Casualife’, ‘Casualife Furniture’ and ‘Casualife Furniture International’. As the judge observed, the oral evidence on this topic ‘was not particularly illuminating’.[18]
[18]Ibid [54].
The documents that Scandi and CLF Hong Kong relied upon to establish their ownership (or entitlement to possession) of the stored furniture dated from 2008 and were described by the applicants as a comprehensive record of the commercial dealings involving all of the relevant entities associated with Mr Guss which used the Casualife business names.
After a detailed examination of the proofs advanced by Scandi and CLF Hong Kong, the judge concluded that those proofs were ‘inadequate’.[19] The judge then referred specifically to a number of matters including:
[19]Ibid [145].
·the fact that documents, described on behalf of Scandi and CLF Hong Kong as invoices, were not invoices, but transactional documents of a different kind;
·the fact that a number of documents relied upon were not relevant to the particular goods in respect of which title was sought to be proved;
·the inherent unlikelihood that stock referred to in documents from 2008, which stock was claimed to be part of the stored furniture, would remain unsold and in storage at the end of 2015;
·the lack of connection shown to exist between many of the documents and specific items of furniture listed in an aide memoire (‘the aide memoire’) relied upon by the applicants at trial;[20]
·the fact that various entries in the aide memoire were inaccurate;
·the fact that few of the documents relied upon in the aide memoire made any direct connection with either Scandi in relation to Annexure A of the statement of claim, or LHV in relation to the items in Annexure B (remembering that CLF Hong Kong claimed an entitlement to retake possession by reason of the crystallisation of a mortgage debenture given by LHV); and
·various discrepancies in insurance certificates that formed part of the documentation relied upon by the applicants.[21]
[20]Mr Guss gave evidence at trial that stocktakes (including after June 2015) were performed in relation to the stored furniture, identifying the quantity of each style of furniture stored at Larkfield’s premises. While no stocktaking documents were produced in evidence, the aide memoire purported to record ‘what the number of items of each style of furniture would have been at 31 December 2015’: Primary Reasons [121].
[21]Primary Reasons [145].
Significantly, so far as the inadequacy of Scandi’s and CLF Hong Kong’s proof of ownership or entitlement to possession was concerned, the judge said:
Ordinarily, it might be expected that the assets of a company would be easily proved by production of the appropriate financial records of the companies. The absence of such proof by [Scandi, CLF Hong Kong and LHV] (all of whom were represented by experienced counsel and solicitor) leads to the conclusion that the financial records of these companies would not have assisted [Scandi’s and CLF Hong Kong’s] case.[22]
[22]Ibid.
The judge then turned to the question of whether CLF Hong Kong had established its acquisition of the rights of ownership from LHV by reason of the provision of the relevant mortgage debenture. This analysis was conducted on the basis that, contrary to the judge’s earlier conclusion, LHV had established that it was the owner of some or all of the various items of the stored furniture claimed by CLF Hong Kong.
After detailed analysis,[23] the judge concluded that even if CLF Hong Kong had established LHV’s ownership of the stored furniture listed in Annexure B to the statement of claim, there was insufficient evidence to establish that CLF Hong Kong had acquired the rights of ownership from LHV by reason of the provision of the mortgage debenture relied upon by CLF Hong Kong.[24]
[23]Ibid [146]–165].
[24]Ibid [166].
Having analysed the ownership claims of Scandi and LHV, and also CLF Hong Kong’s claim under its mortgage debenture, the judge ultimately concluded:
I do not consider that it is ‘more likely than not’ that all, or even some, of the stored furniture was owned by the plaintiffs [Scandi and CLF Hong Kong]. The transactional documents are inconsistent and seek to prove, in relation to only some items of furniture that were anticipated to be present at the Larkfield facility on 31 December 2015, that at least the claimed quantity was the subject of the specific documents listed by court book page and quantity in the aide memoire. Those proofs are inadequate and the absence of other financial records from the two plaintiffs [Scandi and CLF Hong Kong] and LHV does not permit the court to reach the conclusions sought by the plaintiffs.[25]
[25]Ibid [167].
In this Court, the applicants submitted that the documentary evidence they tendered at trial constituted ‘sufficient evidence’ on the issues of ownership and entitlement to possession of the stored furniture. This was their primary submission. It was put at a high level of generality.
So far as any specific error alleged to have been made by the judge was concerned, the applicants relied upon a decision of the New South Wales Court of Appeal, Mega-top Cargo Pty Ltd v Moneytech Services Pty Ltd.[26]
[26][2015] NSWCA 402 (‘Mega-top’).
Mega-top was a case that concerned the ownership of certain goods. The applicants relied upon it in support of the proposition that documents of the kind tendered in that case (air waybills and other documents submitted to Customs) were sufficient to prove that an entity described in such documents as an owner was in fact the owner of the goods to which the document referred. Thus it was submitted that the judge’s criticism of certain documents tendered by the applicants, because those documents were ‘shipping documents’, was not well founded.
Mega-top is a fact-specific case which, for present purposes, merely accepts that air waybills and certain other documents submitted to Customs are capable of being evidence of ownership by entities referred to in those documents as the owners of the goods to which the documents refer. Mega-top is not authority for some broad proposition that ownership is always established by the mere tendering of documents of the kind to which it refers.
Next, the applicants submitted that, the judge having found and identified documents that ‘link the Casualife’ business names to LHV,[27] the judge erred in not upholding CLF Hong Kong’s claims to possession. The short answer to that submission is that, while the judge identified a number of documents which he said linked the Casualife business name to LHV, his real point was that there were ‘very few contemporaneous documents tendered in evidence which directly relate[d] the names “Casualife Furniture” or “Casualife” to LHV’.[28]
[27]Primary Reasons [83].
[28]Ibid [82].
While the judge made numerous detailed findings in respect of the mass of documentary evidence tendered at trial,[29] including identifying numerous errors, discrepancies and other inconsistencies, the applicants’ submissions in this Court did not seek to identify specifically where the judge went wrong in relation to these findings, or any of the errors, discrepancies and inconsistencies that he identified. The applicants’ arguments were put at a high level of generality. At best, it appeared that the applicants’ ultimate contention is that, while a company’s appropriate financial records might constitute good proof of ownership, the judge should have accepted documents of the kind referred to in Mega-top as sufficient proof of ownership in the present case.
[29]Ibid [54]–[167].
To the extent that the applicants submitted that appropriately completed shipping or Customs documents have the capacity to prove ownership of the goods referred to in them, we accept that submission. The acceptance of that submission, however, in the context of the present case, is of no assistance to the applicants. A consideration of all of the circumstances of this case, and all of the evidence that was called and tendered at trial, discloses a high degree of uncertainty about a myriad of matters, including the identity of the relevant company that operated one or more of the Casualife business names, and thus a high degree of uncertainty also about which of the entities identified at trial were parties to the various transactions that the judge was required to examine.
Having examined all of the documents to which we were referred, like the judge, we are unable to conclude that either Scandi or CLF Hong Kong established the claims they made in respect of any of the stored furniture.
Ultimately, the applicants’ submission that the judge erred when he concluded that Scandi and CLF Hong Kong’s claims of ownership and/or an entitlement to possession of the stored furniture must be rejected. This was a case where one could not even identify the entity who contracted with Larkfield to store its goods (or goods in its possession) in Shed 43A. That fact alone made the task of proving who owned, or was entitled to possession of, the stored furniture one of some difficulty. Even before us, counsel for the first to third applicants (instructed by Mr Guss) and Mr Guss (appearing for himself) could not, or would not, put a submission identifying which entity was the contracting party with Larkfield, notwithstanding Mr Guss’ close association with the relevant entities and the fact that he personally made the relevant arrangements.
In our view, it was well open to the judge to conclude that the unsatisfactory nature of the evidence called and tendered by the applicants did not establish that, on the balance of probabilities, Scandi and CLF were the owners, or entitled to possession, of any of the stored furniture. In short, the applicants have failed to persuade us that the judge was wrong to dismiss the claims of Scandi and CLF Hong Kong.
Other liability issues
In the course of argument, counsel for Scandi, CLF Hong Kong and LHV conceded that if Scandi, CLF Hong Kong and LHV did not succeed on the ownership question then the remaining liability issues argued in this Court were of no moment. Plainly, if Scandi, CLF Hong Kong and LHV had no claim on any of the stored furniture, then the orders made by the judge pursuant to Part 4.2 of the Act had no relevant effect so far as those parties were concerned.
In oral argument, Mr Guss ultimately conceded that, as he had no claim over any of the stored furniture, the orders made by the judge under the Act did not affect him.[30] The issue for him then became one of the proper exercise of the judge’s discretion as to costs.
[30]That concession was made when counsel for Larkfield accepted that the orders made under the Act did not create some additional (and as yet unformulated) liability in relation to Mr Guss.
Having determined the ownership and entitlement to possession issues against Scandi and CLF Hong Kong, and having established that the orders made under the Act do not affect the rights and liabilities of the applicants, leave to appeal should now be refused in relation to all of the applicants’ grounds of appeal that seek to set aside the judge’s liability orders. In deference to the submissions made, however, we will briefly address the other arguments put on the liability issues.
First, in our opinion, the judge did not err when he concluded that the stored furniture constituted ‘uncollected goods’ by reason of s 54(1)(d). On its terms, that section was operative in this case because ‘the provider’ (be it Mr Guss, or one of the entities with which he was associated) had not paid, and did not pay at any time after September 2015, Larkfield’s charges that accrued and were owing after 10 September 2015. That is so, whatever the quantum of ‘the relevant charge’ might have been at any particular time.
Moreover, contrary to the applicants’ submissions, s 54(2) had no operative effect in this case. That section is limited to providing an exception in respect of goods that were uncollected goods by reason of s 54(1)(a) — not goods that were uncollected by reason of the operation of s 54(1)(d). In any event, s 54(2) had no application in the present case because Larkfield was not required to ‘make delivery’ of the stored furniture (as contemplated by the terms of s 54(1)(a), referred to in s 54(2)(a) of the Act).
Mr Guss’s separate submission that the stored furniture could not constitute uncollected goods because there was no ‘provider’ (either because it was not possible to identify the entity that contracted with Larkfield, or because the goods were taken by Larkfield in September 2015 — rather than possession being ‘given’) must also be rejected.
The Act does not require the specific identity of the provider to be proven by a party who wishes to rely on the provisions of Part 4.2 of the Act. Such a requirement would have the capacity to defeat the objects and purposes of the Act. It is enough that there be some entity who gave possession of the relevant goods to the receiver.
Mr Guss relies upon the definition of ‘provider’ in s 3 of the Act as someone who ‘gives possession’ of goods. But the definition of ‘bailment’ is also important. ‘Bailment’ is defined to include ‘involuntary bailment’. The ‘giving’ of possession does not entail agreement or consent, in our opinion. Further, in our view, the provisions in Part 4.2 cover cases where a receiver has been ‘given’ possession of the relevant goods and those goods have become ‘under bailment’ at a later time.
Secondly, we are unpersuaded that the judge’s calculation of the relevant charge was erroneous. The language of s 55(1) of the Act is wide enough to pick up amounts owing to a receiver (Larkfield) which were incurred, or for which the provider or owner of the goods became liable, prior to the commencement of the bailment. This is because the ‘relevant charge’ is not just the amount payable for the goods under bailment but also the amount which ‘entitles the provider to take delivery’. Section 55(2) then provides that ‘unless determined otherwise by a court order’, the amount payable to the receiver, for any storage of the goods, is the sum of the amounts set out in that section. Those amounts include ‘the amount agreed to by the provider and receiver as the charge payable to the receiver’. The language of s 55(2) is, like the language in s 55(1), of sufficient width to permit a court, in an appropriate case, to make an order declaring that the relevant charge includes amounts agreed to be paid by a provider to a receiver prior to the commencement of the bailment by which the relevant goods became ‘uncollected goods’.
Thirdly, the judge did not err in not exercising the power to ‘determine otherwise’ under s 55(2) so as to reduce the relevant charge in this case, either by disregarding charges incurred prior to September 2015, or by reducing the post-September 2015 charges because Larkfield had ‘wrongly’ claimed to be entitled to the whole of the amount owing under the occupation agreement. In our opinion, Larkfield was entitled to make and pursue the claims it made from time to time in respect of the stored furniture — and to do so under the provisions of the Act.
In any event, even if we had been persuaded that the judge should have excluded from the relevant charge amounts incurred before September 2015, or that he should have otherwise reduced the relevant charge by reason of some discretionary or other consideration, we note that any such reduction could not, in the circumstances of this case, have had any relevant effect. This is because the amount Larkfield actually realised on the sale of the stored furniture was considerably lower than the total amount of Larkfield’s charges that were incurred after September 2015.
Fourthly, for the reasons just given (that is, that the applicants have failed to establish that the amounts claimed in the s 66 notices were unjustified), there is no substance in the applicants’ contentions those notices were invalid. In any event, even if there was any issue about the validity of the s 66 notices, that issue could not affect the correctness of the orders made by the judge. The requirement to give notice under s 66 related only to a receiver’s ability to exercise the self-help provisions contained in Division 2 of Part 4.2 of the Act. Larkfield, however, brought its claim at trial under Division 3 of Part 4.2. The requirements of s 66 of the Act had no application to that claim.
Fifthly, while the applicants’ written case made complaint about the judge’s conclusion that Larkfield, by its filing and serving of its counterclaim, complied with s 68 of the Act, as was explained by counsel for the first three applicants in argument, that complaint was founded upon the proposition that the stored furniture did not constitute uncollected goods. No separate argument was made by the applicants concerning s 68 of the Act, or any alleged non-compliance with it by Larkfield.
Sixthly, we are unpersuaded that the judge erred in finding that Larkfield acquired a lien over the stored furniture.
Conclusions on liability
Leave to appeal in relation to the judge’s liability orders will be refused. We turn now to the applicants’ complaints about the judge’s orders for costs.
Costs
Following the delivery of the judge’s primary reasons, Scandi, CLF Hong Kong and LHV made submissions to him that:
·no order for costs should be made against LHV, ‘as no findings were made against it’; and
·Scandi and CLF Hong Kong should only pay 50 per cent of Larkfield’s costs, having regard to Larkfield’s ‘mix of success and lack of success on the many discrete issues raised by the proceeding and the separate hearing time and separate consideration of those issues’.[31]
[31]Costs Reasons [3].
Mr Guss’s submission to the judge was that Larkfield should pay his costs of the proceeding as he had succeeded in his defence of the claims made against him.[32]
[32]Ibid [4].
In making an order for costs against Mr Guss, the judge said:
Mr Guss was the central figure in this case. He arranged for the storage of goods, masking the true identity of the entity for whom he was acting. When the rental payments fell into arrears, he and the entities with which he was associated sought to recover the stored goods without paying what, at that stage, were modest arrears of rental. The orders which I propose to make simply reflect the failure of a strategy apparently devised by Mr Guss to avoid the responsibilities he undertook. Accordingly, he must have judgment against him and must share liability for the costs of the proceeding.[33]
[33]Ibid [10].
With respect to LHV, the judge said that its position was similar to that of Mr Guss.[34] The judge said that the orders on the counterclaim should include LHV because of the assertions made on its behalf that part of the stored furniture ‘had been owned by LHV at the relevant time’.[35]
[34]Ibid [11].
[35]Ibid.
With respect to Scandi and CLF Hong Kong, the judge noted that their claims had wholly failed, and that the counterclaim had succeeded on the primary relief claimed by Larkfield. The judge said that Larkfield’s alternative claims ‘only had relevance if [Scandi and CLF Hong Kong] had otherwise succeeded on their claims for the return of the stored goods without being required to pay the storage charges’.[36]
[36]Ibid [12].
In relation to apportioning the costs order to be made against Scandi and CLF Hong Kong, on the basis that Larkfield’s ‘alternative claims’ had not succeeded, the judge said:
The analysis in the plaintiff’s [Scandi and CLF Hong Kong] submissions of the time spent at trial on particular issues is artificial. I have detailed earlier the primary issues in the case. The plaintiffs were unsuccessful in relation to these issues. The plaintiffs must pay the costs of the proceeding, without deduction.[37]
[37]Ibid [13].
In this Court, the applicants repeated the submissions they made to the judge. Additionally, they made complaint that the judge did not refer specifically to authorities they relied upon as to the apportionment and proportionality of awards of costs.[38] Further, it was submitted that the reasons given by the judge for the costs orders he made ‘[did] not address the principles set out in [the cases to which the applicants referred the judge], and disregard[ed] same (sic)’.
[38]In their written case, the applicants identified those cases as Kalinic v Acron Engineering Pty Ltd [2013] VSCA 363; GT Corporation Pty Ltd v Amare Safety Pty Ltd [No 3] [2008] VSC 296; Chen v Chan [No 2] [2009] VSCA 233; Yazgi v Permanent Custodians Ltd [No 2] [2007] NSWCA 306; Byrns v Davie [1991] 2 VR 568; Grant v Grant [No 2] [2013] VSC 393; APN Funds Management Ltd v Australian Property Investment Strategic Pty Ltd (Costs) [2012] VSC 365.
The applicants’ submissions are devoid of merit. In truth, the applicants were wholly unsuccessful in the proceeding below. The judge’s refusal to apportion the costs order made against Scandi and CLF Hong Kong was entirely appropriate. For the reasons given by the judge, this was not an appropriate case in which to apportion costs.
Similarly, it was well open to the judge to conclude that LHV and Mr Guss should also pay costs from the time they were joined as defendants to the counterclaim. Again, the judge’s orders were correctly made for the reasons he gave.
Conclusion
Leave to appeal will be refused on all grounds.
- - -
SCHEDULE OF PARTIES
S APCI 2018 0071
BETWEEN
SCANDI INTERNATIONAL PTY LTD (ACN 082 473 747) First Applicant
CASUALIFE FURNITURE INTERNATIONAL LIMITED
(A HONG KONG CORPORATION) Second ApplicantACN 112 314 502 PTY LTD (ACN 112 314 502) Third Applicant
JOSEPH GUSS Fourth Applicant
and
LARKFIELD INDUSTRIAL ESTATE PTY LTD
(ACN 006 067 965) Respondent
3
9
0