Stoker v Picken
[2012] FCA 1315
•26 November 2012
FEDERAL COURT OF AUSTRALIA
Stoker v Picken [2012] FCA 1315
Citation: Stoker v Picken [2012] FCA 1315 Appeal from: Stoker v Mark Anthony Picken T/AS Gold Coast RV and Boating Services [2009] FMCA 839 Parties: BRIAN JAMES STOKER v MARK ANTHONY PICKEN File number: QUD 235 of 2009 Judge: DOWSETT J Date of judgment: 26 November 2012 Catchwords: LIEN – claim for storage charges – whether storage charge claim relinquishes right to lien – whether storage charges were linked with lien – whether wrongful claim extinguishes rightful claim;
LIEN – possession of vessel – attempt at auction – storage of vessel – whether respondent had transferred possession of vessel to auction house thus relinquishing right to lien – whether respondent had transferred possession of vessel to third party whose land vessel was stored on thus relinquishing right to lien;
QUANTUM MERUIT – challenge to amount actually owed after repair work completed on boat – contract to do repair work with respondent – whether quantum meruit should be reduced as repair work had been subcontracted out and completed by third party
Legislation: Disposal of Uncollected Goods Act 1967 (Qld) ss 4, 5
Evidence Act 1995 (Cth)
Cases cited: Donald v Suckling [1866] LR 1 QB 585 cited
Gunnedah Municipal Councilv New Zealand Loan and Mercantile Agency Company Ltd [1963] NSWR 1229 cited
Somes v British Empire Shipping Co (1860) 8 HLC 337 cited
Bowenbrae Pty Ltd & Anor v Flying Fighters Maintenance and Restoration Pty Ltd [2009] QDC 91 cited
Albermarle Supply Co Ltd v Hind & Co [1928] 1 KB 307 considered
DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1977-1978) 138 CLR 423 cited
Hill & Sons Ltd v London Central Markets Cold Storage Co Ltd (1910) 26 TLR 397 cited
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 cited
TheBritish Waggon Co v Lea & Co (1880) 5 QBD 149 cited
Robson v Drummond 2 B&Ad 303 cited
Alati v Kruger (1955) 94 CLR 216 citedSykes EI and Walker S, The Law of Securities (5th ed, LawBook Co., 1993)
Dates of hearing: 11 July 2011 and 15 December 2011 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 59 Counsel for the Appellant: Mr S Fisher Solicitor for the Appellant: Neumann & Turnour Counsel for the Respondent: The respondent appeared in person
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
QUD 235 of 2009
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA
BETWEEN: BRIAN JAMES STOKER
AppellantAND: MARK ANTHONY PICKEN
Respondent
JUDGE:
DOWSETT J
DATE OF ORDER:
26 NOVEMBER 2012
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
1.the appeal be dismissed; and
2.the respondent have liberty to apply within seven days for any order concerning costs or expenses which he may have incurred in connection with these proceedings.
Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
QUD 235 of 2009
ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA
BETWEEN: BRIAN JAMES STOKER
AppellantAND: MARK ANTHONY PICKEN
Respondent
JUDGE:
DOWSETT J
DATE:
26 NOVEMBER 2012
PLACE:
BRISBANE
REASONS FOR JUDGMENT
These proceedings were originally commenced in the admiralty jurisdiction of this Court. However, after granting interlocutory relief, I remitted the matter to the Federal Magistrates Court. Different aspects of the matter were heard and determined by two different Federal Magistrates. This is an appeal from the second of those decisions.
FACTUAL BACKGROUND
The appellant owns a Whitley Cruisemaster motor vessel (the “vessel”). The respondent is a tradesman, specializing in the repair of motor vessels. On or about 29 November 2007, the appellant and the respondent agreed that the respondent would carry out repairs to the vessel. The work was completed and paid for on or about 17 December. On 24 December 2007, the appellant advised the respondent that the vessel had broken down. In early January of the following year, he delivered the vessel to the respondent’s premises. The parties agreed that the respondent would carry out additional repairs. These repairs were completed on or about 15 January 2008. On 15 January 2008 the respondent rendered an invoice in the amount of $7,440.97 (including GST). The respondent says that the appellant told him that he could not pay because he had lost his money on the stock market. The appellant contends that the respondent did not permit him to inspect the vessel to ascertain whether the repairs had been properly completed, and that he therefore declined to pay. The respondent denies this allegation.
On 22 January 2008 the respondent sent the following email to the appellant:
As payment for your boat repairs was to be made on invoice date 15/01/2008 2008 and has still not been made by 4.30 pm on 22/01/2008 you leave me no [a]lternatice [sic]. I now have to put your boat into storage at your expence [sic] at 100 dollars per day plus G.S.T. payed [sic] weekly plus towing to yard and return to Gibbs St at 80 dollars per hr plus G.S.T. There will also be a sercharge [sic] of 2.5 percent on all moneys owing from 15/01/2008 as you have not made any attempt to pay the boat is going to storage 23/01/2008 at 8.30 am. If you pay before 8.30 am 23/01/2008 there will be no extra charges.
On 29 January 2008 the appellant commenced proceedings in the Small Claims Tribunal, seeking relief from payment of the respondent’s bill and return of the vessel. On 3 March 2008 that application was dismissed. On 11 March 2008 the respondent indicated that if the bill was not paid, he would seek to sell the vessel. By this time, he was also claiming towing expenses, storage charges and an amount which seems to have represented his “costs” incurred in the Small Claims Tribunal. As far as I can see, that claim was not based on any order made by the Tribunal.
On 19 March 2008, the respondent issued a notice pursuant to the Disposal of Uncollected Goods Act 1967 (Qld) (the “Uncollected Goods Act”). In certain circumstances that act confers a power of sale upon a bailee to enable recoupment of the bailee’s charges. Thus it confers a power of sale on a person who, as I shall demonstrate, would otherwise only be entitled to retain possession of the bailed goods until he or she was paid. The purported effect of the notice was that if the appellant did not pay the amount of $16,493.81 and take delivery of the vessel within six months, it would be sold.
By letter dated 20 March 2008, the appellant disputed the validity of the notice. At some stage the respondent seems to have accepted that he was not entitled to exercise the right of sale conferred by the Uncollected Goods Act because of a failure to comply with certain statutory requirements. However the respondent’s claim to a lien is not dependent upon that legislation. The legislation confers rights upon the holders of liens but does not create such liens. The vessel was not sold, although it seems that the respondent took some steps in that direction.
On 20 March 2008, the appellant sent an email to the respondent in which he demanded possession of the vessel. He also asserted that the work done on the vessel in January was the consequence of the respondent’s failure properly to carry out previous repairs, and that all other charges were “a nonsense and nothing more than a blatant attempt to extort”.
On 15 April 2008 the appellant filed a further claim in the Small Claims Tribunal. The matter was listed for hearing on 30 May 2008. The Tribunal declined to proceed on the basis that the matter had been disposed of by the order made on 3 March 2008. On 4 December 2008 the appellant filed an application in this Court, seeking recovery of possession of the vessel, a declaration that the appellant was not entitled to payment for the repairs which he had effected, damages, interest and costs. On 12 December 2008 I ordered that conditional upon the appellant bringing $8,637.05 into court, the respondent be restrained, until 16 December 2008 or earlier order, from disposing of the vessel. I subsequently transferred the proceedings to the Federal Magistrates Court. Federal Magistrate Burnett extended the restraining order until further order.
On 31 March 2009 Federal Magistrate Jarrett held that to the extent that the appellant sought relief from payment for the repairs, the matter had been finally determined by the Small Claims Tribunal. All of the appellant’s other claims and the respondent’s cross-claims were adjourned and eventually heard by Federal Magistrate Connolly.
PROCEEDINGS BEFORE FEDERAL MAGISTRATE CONNOLLY
Federal Magistrate Connolly found that the respondent had performed the relevant work and that there was no challenge to his hourly rate, mark-up or prices of parts. His Honour concluded that of the 59.5 hours of work billed by the respondent, all but 4.5 hours were reasonably attributable to performance of the work. Accordingly, he fixed the amount of the claim in the sum of $7000.80 (55 hours at $80.00 per hour, plus $1,964.37 for parts and $636.43 in GST).
The appellant’s claim to possession of the vessel depended primarily upon his submission that the respondent had relinquished his lien because:
·he had sought to sell the vessel;
·he had attempted to charge storage fees for the vessel; and
·he had delivered the vessel to a third party.
The Federal Magistrate rejected these submissions, concluding that the lien remained in force. The appellant’s claims to possession and damages therefore failed.
His Honour observed at para 17:
Even if the [appellant] was to establish a claim in detinue or conversion in my view it would not lead to an order for damages. The valuation evidence was less than convincing. Mr. Lockyer is a marine surveyor who says there is no formal qualification for the valuation of marine assets. He appeared to base his evidence as to value on one particular boat which had been sold recently and he also agreed with the proposition put to him that three different valuers may well come up with three different values. Further, to establish the damages in the way that is advanced by the [appellant] it is necessary to satisfy the Court that he requested the return of the boat to put it on the market. The [appellant’s] own evidence put at its highest level is that he was considering a sale. In my view the [appellant] has not made out an entitlement to damages even if he had succeeded in detinue or conversion.
Although the appellant failed to establish that the lien had been extinguished, or that he was entitled to damages, the Federal Magistrate found in his favour on one issue. The costs of the hearing before Jarrett FM had been reserved. It seems that the trial was due to start on 30 March 2009 before Federal Magistrate Jarrett. At the commencement of the hearing, the respondent raised the question of “Anshun estoppel”. The Federal Magistrate held that the appellant could not raise certain issues because of the earlier proceedings in the Small Claims Tribunal. It seems that the respondent was not in a position to prove its cross-claim and so the matter was adjourned with costs reserved. It subsequently came on before Federal Magistrate Connolly. His Honour therefore had to dispose of the question of the reserved costs. Federal Magistrate Connolly seems to have concluded that the appellant was entitled to the costs of the first full day before Federal Magistrate Jarrett, that day having been taken up with argument concerning the alleged estoppel. It seems curious that the appellant should have the costs of the day spent in ventilating an issue on which he was unsuccessful. However the respondent has not appealed.
In determining the amount of those costs, the Federal Magistrate observed at [18]:
With respect to the Application to fix the [appellant’s] costs thrown away, the [appellant] in my view is entitled to costs of one day given that the first day was devoted to the argument concerning Anshun estoppel. The costs pertaining to that day are the costs of the solicitor appearing as Counsel. The appropriate item pursuant to the schedule costs is $1,500.00 for a one day hearing together with a fifty per cent loading for advocacy, a total of $2,250.00. The [appellant] in my view, in asking for $15,000.00 has been totally unreasonable, although it reflects on the way in which he conducted the proceedings which his legal practitioner endeavoured to present in a far more complicated way than necessary.
At [19] his Honour dealt with the remaining costs issues as follows:
Finally, with respect to the issue of costs of the proceedings and whether there should be an order for one or other of the parties to pay, I am prepared to hear argument about that although my preliminary view is that neither party has been wholly successful and each should pay their own costs. I have attached draft orders and I am prepared to hear from Counsel as to their form before pronouncing the orders.
His Honour ordered that:
(1)The Respondent forthwith deliver the Whitley Cruisemaster 700 into the possession of the [appellant].
(2)From the monies paid into the Federal Court the Respondent be forthwith paid the sum of $4,750.80 (being the repairs of $7,000.80 less the costs of $2,250.00) together with interest thereon.
(3)The balance of the monies paid into the Federal Court be paid to the [appellant].
(4)Each of the parties have liberty to make an application with respect to costs for a period of 28 days from this date.
(5)The injunction of the Federal Court of Australia made on 12 December 2008 be discharged.
(6)The undertakings as to damages of the [appellant] given to the Federal Court of Australia on 12 December 2008 be discharged.
(7)Thee be liberty to apply with respect to the issue of costs.
(8)Otherwise, all extant applications be dismissed.
I understand that the vessel has been delivered to the appellant pursuant to order (1). The funds in court are sufficient to meet the amount of the respondent’s judgment.
On 15 September 2009 the appellant filed a notice of appeal against his Honour’s orders.
ON APPEAL
The appellant’s grounds of appeal are as follows:
1.That Federal Magistrate Connolly erred in law in finding that the Respondent was entitled to exercise a lien in respect of the Whitley Cruisemaster 700 as against the Appellant.
2.That Federal Magistrate Connolly erred in law by not awarding the Appellant damages in detinue or conversion in respect of the Whitley Cruisemaster 700.
3.That Federal Magistrate Connolly erred in law in awarding the Respondent quantum meruit for engine repair services to the value of $2,504 performed by Neale Baker in respect of the Whitley Cruisemaster 700.
4.That Federal Magistrate Connolly erred in law by failing to give adequate reasons for judgment.
5.That Federal Magistrate Connolly erred in law by disregarding evidence of the value of the Whitley Cruisemaster 700.
6.That Federal Magistrate Connolly erred in law in not awarding costs to the Appellant in relation to professional witness costs as costs thrown away on 30 March 2009.
Ground 4 was not pressed.
Counsel summarized his client’s position at ts 6 ll 1-7 as follows:
Well two things. We say first that we should have had damages either for conversion or detention – wrongful detention of the vessel, and we say that the learned magistrate below erred in not giving that, and secondly we say apart from the fact the lien, we say, was wrongfully [maintained] in any case, there’s also a secondary question of costs.
ENTITLEMENT TO A LIEN
Grounds 1 and 2 depend upon the appellant’s assertion that the respondent had relinquished his lien. In Sykes and Walker, The Law of Securities (The LawBook Co Ltd, 5th ed) at 739, the authors state:
… a person [who] has improved, repaired or altered goods by the exercise of her or his [own] labour or skill ... is given a lien for the price of such skill or labour and for expenses incurred.
The lien is a “particular” or “special” lien as opposed to a “general” lien. The former category enables the holder to retain the property until payment of particular charges incurred in connection with it. A general lien enables the holder to retain the property until all amounts owing to him or her have been paid.
EXTINGUISHMENT OF THE LIEN
Sykes (at 743) says that a possessory lien may be lost by tender of the amount due, by abandonment or by redelivery of the chattel to the owner or his or her agent. Improper sale may destroy the lien. A lien will also be lost if the holder gives up possession of the chattel other than to a person who may be considered to be his or her agent for the purpose of its custody. Each of these two actions is presumably capable of being characterized as abandonment of the lien. See Donald v Suckling [1866] LR 1 QB 585 at 618-619 and Gunnedah Municipal Councilv New Zealand Loan and Mercantile Agency Company Ltd [1963] NSWR 1229 at 1232. See also Sykes at 742.
The appellant relies upon seven different matters which, he asserts, terminated the respondent’s lien. They appear in the appellant’s outline at para 8 as follows:
(1)the respondent did not comply with the Uncollected Goods Act;
(2)the respondent attempted to sell the vessel other than by authority of court order;
(3)as a corollary of (1) and (2), when the Respondent attempted to sell the vessel, purportedly under (and in contravention of) the Uncollected Goods Act, the respondent acted in a manner repugnant to the bailment between the Applicant (as bailor) and the Respondent (as bailee);
(4)the respondent lost the right to maintain a lien when he sought to exact storage charges for his unpaid work;
(5)wrong claims pursuant to the lien;
(6)attempted auction and auction fees; and
(7)possession of the vessel was transferred by the respondent to a third person, namely a Mr Robert Look.
Accepting that Sykes correctly identifies the circumstances in which a lien may be lost, the appellant must demonstrate that one or more of these matters amounted to abandonment of the lien. At some points the appellant’s submissions strayed away from a consideration of the law relating to liens and into a consideration of the law relating to bailment generally. The areas are obviously related, but there seems to be little point in considering the more general law concerning bailment when there is a substantial body of law dealing with liens.
The appellant primarily submits that the lien was discharged by the respondent’s:
·allegedly wrongful claim to storage charges;
·failure to particularize the storage fees; and
·claim for $2,550 described as “Tribunal”.
In support of this submission, the appellant relies upon the decision of the House of Lords in Somes v British Empire Shipping Co (1860) 8 HLC 337 at 344-355, and that of McGill DCJ in Bowenbrae Pty Ltd & Anor v Flying Fighters Maintenance and Restoration Pty Ltd [2009] QDC 91. Neither case supports the submission. Somes establishes that a bailee may not add storage charges to the lien and that if the bailor pays such amount in order to obtain possession of the chattel in question, he or she may recover the amount so paid. It is true that the decision also suggests that a bailee who makes such a claim is a “wrongdoer”. However there is no suggestion that the lien is terminated by such conduct. The decision in Bowenbrae is also of no assistance to the appellant. The case was a summary judgment application. McGill DCJ held only that the bailee could not retain the chattel pending payment of storage charges. The case says nothing about the bailee’s right to retain the chattel against payment of amounts otherwise payable and secured by the lien.
The appellant also relies upon the decision in Albermarle Supply Co Ltd v Hind & Co [1928] 1 KB 307. In that case one Botfield had hired three taxi cabs from the plaintiff pursuant to a hire purchase agreement. He kept the three cabs and two others at the garage of the defendants who cleaned and maintained them for him. Botfield fell into arrears in his hire purchase instalments. The plaintiff terminated the hire purchase agreements and demanded the three cabs from the defendants. The defendants claimed a lien for the balance of their general account which related to all five cabs. They also provided full details of the charges for each of the three cabs owned by the plaintiff. Without tendering the amount claimed, the plaintiff commenced an action for detinue Although the case concerned other issues, Lord Hanworth MR said, at 314-315:
There remains, however, the question of whether the defendants have lost their lien by their demand for a sum considerably beyond the true sum for which their lien stood good. In many cases of lien it is not possible to name the exact sum due, so as to enable the owner to tender it and obtain possession of his goods … .
In the present case the plaintiffs appear to have refused to recognize any claim of lien in reliance upon the terms of their hire-purchase agreement. I do not think they were ready to make any tender to satisfy the lien. The defendants on the other hand insisted upon larger rights than they can sustain, but if they have a lien it is not lost by such a demand in the circumstances of the present case. That, I think, appears from the case of Scarfe v Morgan …, where it was decided that the lien for a small sum for the services of a stallion was not lost although a demand to retain the mare was made for such sum and for other claims arising aliunde … .
The lien was claimed upon the account for the repairs and other items – the repairs were never lost sight of or abandoned. It thus cannot be imputed against the defendants that they waived their right to have the true sum due to them tendered. They insisted upon their rights. Upon the issues thus joined and the claims set up on either side I am of opinion that the defendants were entitled to refuse delivery to the plaintiffs and that their defence succeeds. …
Scrutton LJ said at 318-319:
It was next said that the lien for repairs was lost inasmuch as it was originally claimed for a larger amount and a different cause than the right one. I have considered the numerous authorities cited, and in my view the law stands as follows: A person claiming a lien must either claim it for a definite amount, or give the owner particulars from which he himself can calculate the amount for which a lien is due. The owner must then in the absence of express agreement tender an amount covering the lien really existing. If he does not, unless excused, he has no answer to a claim of lien. He may be excused from tendering (1) if he has no knowledge or means of knowledge of the right amount; (2) if the person claiming the lien for a wrong cause or amount makes it clear that he will not release the goods unless his full claim is satisfied, and that claim is wrongful. The fact that the claim is made for more than the right amount does not matter unless the claimant gives no particulars from which the right amount can be calculated, or makes it clear that he insists on the full amount of the right claimed … .
In the present the accounts handed to the plaintiffs show the items relating to the repairs to each cab, and the plaintiffs did not tender because they thought their agreement prevented a creation of a lien, not because they could not ascertain what repairs were done. I do not think the defendants ever pinned themselves definitely to a demand for the whole sum. They showed the whole of their bills against Botfield, and, as Mr Hind said, “wanted to come to some arrangement”.
Sargant LJ said at 320-321:
Next comes the question of the extent of the lien, if any. The fact that one general account was rendered, relating to these three cabs and two others, and including items for garage, washing, petrol, grease and so on, does not, in my opinion, operate as a waiver of the three separate liens in respect of those items which represent repairs to each of the three cabs respectively. But the facts as to the successive payments on account of the total amount from time to time owing on the general account, and as to the striking of successive weekly balances, involve the application of the rule in Clayton’s Case … and deprive the defendants of the right to make any such appropriation … .
In my judgment the defendants had an enforceable lien on each separate cab only to the extent of the cost of repairs to that particular cab, so far as unpaid at the date of the issue of the writ; and in ascertaining the cost so remaining unpaid the payments on account from time to time made by Botfield are to be applied in paying in chronological order the various items of the general bill irrespective of their nature.
The last question is the very important one of the costs of the action, and it is this question which has been the principal subject of the argument before us. In my judgment the case on this point is governed by Scarfe v Morgan … and indeed is a stronger case in favour of the defendants. Though the defendants claimed much too large a lien, they were entitled to a lien to a smaller extent, and the plaintiffs had the materials for ascertaining the true extent of the lien, and for making a tender accordingly. And it is clear that the plaintiffs were concerned, not with the question of amount, but with the question whether any lien at all could be created. …
Albermarle establishes that it is not fatal to a lien that too much is claimed, or that claims are made for amounts which are not secured pursuant to the lien. If the owner wishes to recover possession he or she must tender the amount properly due. The bailee must provide sufficient particulars to enable him or her to do so. In the present case, in order to regain possession of the vessel, the appellant was obliged to calculate the amount properly due and tender payment. This he has not done. He makes much of the fact that money was paid into court pursuant to the order which I made in December 2008. However that was by way of interlocutory relief. It was not open to the respondent to take the money out of court in settlement of his claim. The requirement is that the bailor tender the amount due. The appellant did not do so by paying money into court, or by offering to pay money into his solicitor’s trust account to abide the outcome of the proceedings. Thus his claim for detinue must fail unless he was excused from tender. The appellant submits that he was so excused firstly, because he was not provided with sufficient particulars of the amount claimed and secondly, because the respondent’s conduct demonstrated an intention to retain possession until all amounts claimed had been paid. These are questions of fact.
The Federal Magistrate held that the appellant’s assertion that the lien was terminated was not supported by the evidence. His Honour probably meant that there was no evidence that the respondent had ever demanded payment of the full amount which he had claimed in March 2008 as a condition of delivering possession of the vessel to the appellant, or that he had failed to deliver sufficient particulars of his claim.
As to the latter question, the bill delivered on 15 January 2008 sufficiently identified the amount payable in connection with the repairs. Clearly, the respondent claimed to have spent 60 hours in collecting and repairing the vessel. If the appellant wished to calculate the length of time reasonably spent in performing the work, he had only to ask another tradesman to give an estimate. As to the cost of collecting the vessel, the appellant knew what was carried and how far it was carried. It was therefore possible for him to calculate the reasonableness or otherwise of the charge, if necessary by consulting a carrier. To the extent that the respondent claimed amounts due for repairs and parts, the appellant refused to pay on the ground that the need for such work was caused by the respondent’s earlier inadequate workmanship. He considered that all other amounts claimed were “a blatant attempt to extort”. He could have calculated the cost of the repairs but considered that he was not obliged to pay for them. He correctly considered that he was not liable to pay the other amounts claimed. Thus his choice was between calculating the amount due for repairs and collection and tendering that amount, or refusing to pay on the basis that such amount was not due because of his assertion that the repairs had been caused by the respondent’s earlier allegedly defective workmanship, a claim which he has not substantiated. In my view he had adequate particulars to enable him to make an appropriate tender.
The appellant also asserts that the respondent demonstrated an intention only to release the lien if the appellant paid the full amount claimed. It follows from Albemarle that such an assertion must go beyond a mere claim for more than is actually secured. There must be a clear indication that the lienee will only release the chattel if the full amount is paid. The respondent simply did not give any such indication. Despite my repeatedly asking Mr Fisher to identify the point at which any such assertion was made, he did not do so. There is nothing in this point.
ATTEMPTED SALE OF THE VESSEL
At some stage in the course of the dealings between the parties the respondent decided to sell the vessel, purportedly exercising the power conferred by the Uncollected Goods Act. Section 5 of that Act provides:
Where goods, accepted pursuant to a bailment in relation to which this Act applies, are ready for redelivery but the bailor – (a) fails to pay or tender to the bailee the bailor’s charges in relation to the goods; or (b) having paid those charges, fails to take delivery of the goods or, if the terms of the bailment so provide, to give directions as to their delivery;
then, subject to any agreement between the bailee and the bailor and to this Act, and if the bailee did not, before carrying out the inspection, custody, storage, repair or other treatment of the goods, have notice that the goods were comprised in a hire-purchase agreement containing a provision prohibiting the creation by the hirer of the lien on the goods, the bailee is, while the failure continues, entitled to sell the goods.
Section 4 identifies the bailments to which the Act relates. Bailment of goods for repair is included. However the respondent had not complied with requirements of the legislation upon which the right to sell depends. The vessel was not sold. Nonetheless, the appellant submits that the respondent had taken steps to sell, and that such steps constituted abandonment of the lien. I reject that argument. The respondent was the bailee of the vessel, was owed money for work performed on it and understood that he had a right of sale. He took steps towards selling it but did not do so. The mere fact that he took such steps did not constitute abandonment of the lien. His conduct was only consistent with his seeking to recover the amount secured by the lien, using a statutory procedure available to him.
The appellant also seems to rely upon the respondent’s having claimed the amount of expenses incurred in seeking to sell the vessel and the costs allegedly incurred in the proceedings in the Small Claims Tribunal. Although the respondent may have claimed these amounts as being due, there is no evidence that he claimed that they were secured by the lien, or that he would only release the lien if they were paid. This argument must also fail.
In this same context the appellant submits that the respondent sent the vessel to an auction house for sale, and that this comprised a yielding of possession which terminated the lien. The decision in Gunnedah demonstrates that delivery of a chattel into the physical possession of an agent does not discharge the lien. See also Sykes at 742. The ultimate purpose of the delivery may have been sale rather than custody but nonetheless, the auction house held the vessel for the respondent. That a subsequent sale was anticipated does not amount to abandonment of the lien.
My reasoning in this regard is informed by the reasoning of the High Court in a somewhat different context. In DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1977-1978) 138 CLR 423 at pp 431-432, in connection with the alleged repudiation of an agreement for the sale of land, Stephen, Mason and Jacobs JJ said:
The relevant question therefore is whether the events which we have recounted evidence an intention on the part of the appellant to repudiate or renounce the contract or more precisely whether such an intention is to be inferred from those events.
For the respondents it was submitted that such an intention should be inferred from the appellant’s continued adherence to an incorrect interpretation of the contract. It was urged that the appellant, because it was acting on an erroneous view, was not willing to perform the contract according to its terms. No doubt there are cases in which a party, by insisting on an incorrect interpretation of a contract evinces an intention that he will not perform the contract according to its terms. But there are other cases in which a party, though asserting a wrong view of a contract because he believes it to be correct, is willing to perform the contract according to its tenor. He may be willing to recognize his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation. In either event an intention to repudiate the contract could not be attributed to him.
In Hill & Sons Ltd v London Central Markets Cold Storage Co Ltd (1910) 26 TLR 397 it is reported at 398 that Hamilton J said:
… what one had to consider when the discharge of a lien which otherwise would have arisen or had already arisen was in question, was whether or not, looking at the whole of the transaction, the position of the parties, and the circumstances of the case, the new position was inconsistent with the further continuance of the lien.
I see no basis for inferring that delivery of the vessel to an auction house for sale, purportedly pursuant to a right conferred by statute, demonstrates such inconsistency. The appellant also submits that the lien was discharged by the respondent’s storing the vessel on property owned by a Mr Robert Look. I have already held that delivery to a third party as agent does not amount to abandonment of the lien. For that reason, the submission must be rejected.
I should add that the appellant did not provide a clear overview of the evidence as to physical possession of the vessel between early 2008 and the present time. However his case was that the vessel was seen at the auction house and was, at the time of trial, in the physical possession of Mr Look. The Federal Magistrate held that the respondent at no stage parted with possession or control of the vessel. However it is not clear whether he meant that the respondent had not given up physical possession or had done so but retained possession through his agents, the auction house and Mr Look. In either case, the lien would survive.
It may be that the appellant also relies on alleged non-compliance with the Uncollected Goods Act, including the absence of a court order for sale, as separate bases for alleging that the lien was abandoned, quite apart from his actions in anticipation of sale. However I see no merit in such reliance. These matters were relevant only to any exercise of the power of sale and not to the continued existence of the lien.
The lien was not abandoned. Grounds of appeal 1 and 2 must fail.
VICARIOUS PERFORMANCE OF THE WORK
The reference to “quantum meruit” in the notice of appeal, and elsewhere in the material, is somewhat Delphic. It may mean that the respondent claimed pursuant to an implied promise to pay for the work performed at the applicant’s request. Such a claim would properly be brought in contract. Alternatively, use of the term may reflect a concern that there was no contract, and that the claim was brought in reliance upon some notion of unjust enrichment. However, on appeal, counsel for the appellant treated the claim as being in contract. In my view that characterization is correct. The appellant submits that the respondent should not recover that part of his claim which relates to work done by Mr Baker as sub-contractor, apparently $2,504. He submits that the contract impliedly required personal performance by the respondent. It is unclear whether the appellant asserts this view to be as a matter of construction or by virtue of an implied term.
There has been no finding that there was such an implied term. In support of the submission, the appellant points only to signs at the respondent’s premises which suggested that he was a member of certain trade organizations. The Federal Magistrate appears not to have dealt with this submission. It is not immediately obvious to me why it would be necessary, in order to give business efficacy to the contract, that there be such an implied term. See Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 345-346. Nor do I see why, absent such an implied term, the contract should be so construed. The question was addressed in a similar context in TheBritish Waggon Co v Lea & Co (1880) 5 QBD 149. That was a decision of a Divisional Court comprising Cockburn CJ and Manisty J. At 153 their Lordships endorsed the principle said to be established by the decision in Robson v Drummond 2 B&Ad 303 that:
… where a person contracts with another to do work or perform service, and it can be inferred that the person employed has been selected with reference to his individual skill, competency, or other personal qualification, the inability or unwillingness of the party so employed to execute the work or perform the service is a sufficient answer to any demand by a stranger to the original contract of the performance of it by the other party, and entitles the latter to treat the contract as at an end, notwithstanding that the person tendered to take the place of the contracting party may be equally well qualified to do the service.
However Cockburn CJ went on to observe:
But this principle appears to us inapplicable in the present instance, inasmuch as we cannot suppose that in stipulating for the repair of these waggons by the company – a rough description of work which ordinary workmen conversant with the business would be perfectly able to execute – the defendants attached any importance to whether the repairs were done by the company, or by anyone with whom the company might enter into a subsidiary contract to do the work. All that the hirers, the defendants, cared for in this stipulation was that the waggons should be kept in repair; it was indifferent to them by whom the repairs should be done.
If such a term were implied, or if the contract were so construed, it would then be necessary to determine the remedy which would be available in the event of breach. The appellant does not submit that this submission, if upheld, would lead to his not being indebted in any amount to the respondent. He claims only a reduction in the award by the amount payable to Mr Baker. The basis for such reduction is not clear. The proper measure of damages for such a breach of contract would be the difference between the value of the vessel as repaired and its value, had it been repaired in accordance with the contract. There is no evidence which suggests that the repairs were other than competently performed, and therefore no evidence of any reduction in value of the vessel as a result of Mr Baker’s involvement.
If the appellant asserts that he has rescinded the contract for breach, he would have to demonstrate that on the proper construction of the contract the implied term is “an essential term the breach of which gives rise to a right of rescission …”. See DTR Nominees Pty Ltd v Mona Homes Pty Ltd (supra) at 438. Presumably, if it were necessary in order to give business efficacy to the contract that such a term be implied, then it would be an essential term. However the remedy of rescission is only available if the parties can be returned to their respective positions before the contract was made. See Alati v Kruger (1955) 94 CLR 216 at 223-224. After pointing out that at common law precise restitutio in integrum was necessary, the majority (Dixon CJ, Webb, Kitto and Taylor JJ) observed, at 224:
It is not that equity asserts a power by its decree to avoid a contract which the defrauded party himself has no right to disaffirm, and to revest property the title to which the party cannot affect. Rescission from misrepresentation is always the act of the party himself … . The function of a court in which proceedings for rescission are taken is to adjudicate upon the validity of a purported disaffirmance as an act avoiding the transaction ab inito, and, if it is valid, to give effect to it and make appropriate consequential orders … . The difference between the legal and the equitable rules on the subject simply was that equity, having means which the common law lacked to ascertain and provide for the adjustments necessary to be made between the parties in cases where a simple handing back of property or repayment of money would not put them in as good a position as before they entered into their transaction, was able to see the possibility of restitutio in integrum, and therefore to concede the right of a defrauded party to rescind, in a much wider variety of cases than those which the common law could recognize as admitting of rescission.
In the present case, the respondent has incurred cost and spent his time in repairing the vessel at the request of the appellant. Rescission would only be allowed upon condition that the appellant compensate him accordingly. As far as I can see, that would result in his having to pay the amount which has been awarded to the respondent.
In my view this defence is misconceived.
EVIDENCE OF VALUE
The appellant submits that the Federal Magistrate erred in law in not accepting the evidence of Mr Lockyer, a marine surveyor, as to the value of the vessel. The evidence was relevant to the appellant’s claim that as a result of the respondent’s allegedly unlawful detention of the vessel, he had lost the opportunity to sell it at a time when its market value would have been higher than at the date of trial. His Honour seems not to have accepted that the witness was an expert, capable of giving opinion evidence as to the value of the vessel. This conclusion appears to have been based upon the fact that the witness said that there were no formal qualifications for the valuation of marine assets, and that he had based his evidence as to value on one other sale. It may be that the Federal Magistrate correctly concluded that the evidence did not establish that the witness was a person entitled to give expert evidence. However one might have expected references to the relevant provisions of the Evidence Act 1995 (Cth). The appellant has not pointed to aspects of the evidence upon which he relies in order to demonstrate that the evidence ought to have been received. There was also evidence as to value from Mr Parker, a diesel engineer and mechanic. The appellant submits that his Honour overlooked this evidence.
As I have concluded that, for other reasons, the appeal should fail, I need not consider these matters.
COSTS
Finally the appellant claims that the Federal Magistrate erred in law in his calculation of the amount of the appellant’s costs “thrown away on 30 March 2009”. It seems that on 31 March 2009, Federal Magistrate Jarrett ordered that the respondent pay the appellant’s costs thrown away by the adjournment. If not agreed, the costs were to be fixed at the resumption of the adjourned hearing. As I have said, the hearing on 30 March was taken up with argument on the estoppel question, on which the respondent was successful. However it seems that the respondent was not able to proceed to prove his claim and so the matter was adjourned to 25 May 2009. I would have thought that the costs thrown away were the costs of and incidental to the appearance on 31 March, not those attributable to the hearing on 30 March.
I have already set out his Honour’s observations concerning the calculation of the costs to be awarded. It seems that his Honour considered that he was assessing the costs incurred in connection with the hearing on 30 March and that the respondent was to pay them although, of course, he had succeeded on the issue ventilated on that day. It may be that his Honour was simply making a rough assessment of the costs “thrown away” and was a little loose in his language. However that matter is not the basis of the appellant’s criticism of the decision. He complains that he was not allowed amounts incurred in having professional witnesses available on 30 March. I have been referred to no evidence as to the incurrence of liability for those outgoings or as to quantum. I do not know how the figure of $15,000 is calculated. I see no basis for inferring that the exercise of the discretion as to costs has miscarried.
ORDERS
The appeal must be dismissed.
I grant the respondent liberty to apply within seven days for any order concerning costs or expenses which he may have incurred in connection with these proceedings.
I certify that the preceding fifty-nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate:
Dated: 26 November 2012
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