Toll Holdings Ltd v Stewart

Toll Holdings Ltd and Shenzhen MTC Co Ltd sued Dick Smith and its receivers, seeking determination of their rights to the possession of several consignments of goods. Dick Smith was a purchaser of goods from Shenzhen MTC Co Ltd, which were shipped to Australia and were held in bonded storage by Toll. Toll sought a declaration that it had the right to possession of the goods, and Shenzhen MTC Co Ltd sought damages for conversion of the goods. The court was required to decide whether Shenzhen MTC Co Ltd's notice to Toll to "hold" the goods was an effective stoppage in transitu, and whether Toll's delivery of the goods to an agent of Dick Smith was a conversion of the goods. The court also had to determine whether leave should be granted to Toll and Shenzhen MTC Co Ltd to proceed under sections 440B and 440D of the Corporations Act 2001 (Cth), and whether Toll could replace straight telex release bills of lading with to order bills after the goods had been shipped on board.

The court held that Shenzhen MTC Co Ltd's notice to Toll to "hold" the goods was an effective stoppage in transitu, and that Toll's delivery of the goods to an agent of Dick Smith was a conversion of the goods. The court granted leave to Toll and Shenzhen MTC Co Ltd to proceed under sections 440B and 440D of the Corporations Act 2001 (Cth), subject to a condition that no step be taken to enforce any judgment against Dick Smith without a further grant of leave. The court also held that Toll could not replace straight telex release bills of lading with to order bills after the goods had been shipped on board. The court declared that Dick Smith and the receivers had the right of possession of the goods shipped under the relevant bills of lading, and entered judgment for Shenzhen MTC Co Ltd against Toll in conversion in a sum to be assessed.

The court ordered that Toll do all that is necessary to be done by them for the release of the goods to Dick Smith and the receivers, and that Toll pay the respondents' costs of the proceedings. The matter was listed for directions as to the assessment of Shenzhen MTC Co Ltd's damages and determination of liability for storage and container demurrage charges on 1 April 2016.