Yeend v Anglberger
[2010] SADC 20
•15 February 2010
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Application)
YEEND & ORS v ANGLBERGER & ORS
[2010] SADC 20
Ruling and Judgment of His Honour Judge Brebner
15 February 2010
EQUITY - EQUITABLE REMEDIES - INJUNCTIONS
Application for injunctions for the return of log books relating to helicopters. Artificers Lien claimed over log books. Serious issue to the trial and balance of convenience in favour of plaintiffs. Injunctions granted on terms.
PROCEDURE - SUMMARY JUDGMENT
Application for summary judgment. Defendant identified defence. Question of law involved. Application refused.
Australian Broadcasting Commission v O'Neil (2006) 227 CLR; Kilpatric Green Pty Ltd v State Supply Board (1991) 56 SASR 591; Majeau Carrying Co Pty Ltd v Coastal Rutile Ltd (1973) 129 CLR 48; Dinmore Meat Works Pty Ltd v Kerr and Anor (1962) 108 CLR 628; Doulton Potteries & Anor v Bonnette & Anor (1971) 1 NSWLR 591; Re: D J Story Pty Ltd (1993) 2 Qld R 355; Ceneavenue Pty Ltd & Ors v Martin & Ors [2008] SASC 158; Theseus Exploration NL v Foyster (1972) 126 CLR 507, considered.
YEEND & ORS v ANGLBERGER & ORS
[2010] SADC 20The plaintiffs brought an action seeking unspecified damages and urgent injunctive relief in the form of an order that the defendants deliver up to them certain log books relating to two helicopters. The plaintiffs also filed an interlocutory application seeking the injunctive relief particularised in the summons pending the ultimate determination of the whole of the action. During the course of the hearing of the interlocutory application counsel for the plaintiff expanded the ambit of the relief sought to include summary judgment against the defendants in relation to the plaintiff’s claim to the log books. Counsel for the defendant did not submit that the plaintiffs could not expand the relief sought in this way. The plaintiffs have not yet filed their statement of claim.
On 23rd November 2009 I granted the injunctions sought and reserved my judgment on the plaintiff’s application for summary judgment. I now refuse the application for summary judgment. My reasons are as follows.
Introduction
Reduced to the simplest of terms, the relevant facts are as follows. Between them the plaintiffs own and operate a fleet of six helicopters. These aircraft are chartered or hired from time to time by corporations and government agencies. The defendants own and operate a business which provides helicopter maintenance services.
The plaintiffs had an agreement with the defendants to have their helicopters serviced and maintained by the defendants. This arrangement seems to have worked to the satisfaction of all concerned for quite some time.
When a helicopter is serviced, repaired or modified books records of the work performed must be kept in the log books of the particular helicopter concerned.
On the basis of the entries made in the log books a suitably qualified engineer may certify that the particular helicopter to which the log books relate is released to fly for a stipulated number of hours. If a helicopter does not have a current release to fly based on its log books then it is simply not permitted to fly. If the log books are not maintained or if they are not available for inspection by a suitable engineer then again the helicopter is not permitted to fly after it has exhausted its flying hours. If a helicopter does not have its log books it is basically valueless and would probably only realise its value as scrap.
Put simply, he who controls the log books in the long run determines whether the helicopter to which the books relate can be released to fly and, to that extent, he who controls the log books can exert considerable commercial pressure on the owner of the particular helicopter.
The defendants have repaired and maintained two of the plaintiffs helicopters (the helicopters or the subject helicopters) from time to time for some years. The log books relating to these helicopters were stored at the defendant’s premises and the log books relating to the other helicopters in the plaintiff’s fleet were also stored there but have since been returned. Earlier this year the plaintiffs arranged for the defendants to carry out work on the subject helicopters. The work on both helicopters took longer than the plaintiffs expected. The plaintiffs claim that the delays were the fault of the defendants and that their income was reduced as a result. Eventually the helicopters were returned to the plaintiffs and the plaintiffs put them back into service. Both had been released to fly for 100 hours. The hearing of the interlocutory applications commenced on 18th November, 2009. By that day the hours which were left available to each helicopter to fly were fast running out and it was anticipated that they would be grounded in the next few days unless the log books became available to the plaintiffs.
The plaintiffs have contracts that they might not be able to meet if the defendants retain the log books and if the helicopters are grounded as a result. If this occurs, the plaintiffs estimate that they will suffer losses in excess of $80,000 each month. Given that the helicopters represent a third of the plaintiff’s total fleet, it is easy to see how their unavailability could have significant effects on the plaintiff’s ability to generate income and how their damages might well be significant if their action succeeds ultimately.
In essence the plaintiffs seek summary judgment against the defendants in relation to their claim that the defendants deliver up the log books or mandatory injunctions requiring the defendants to deliver up the log books of the subject helicopters so that they can be kept in the air pending the ultimate determination of the action.
The defendants claim that the plaintiffs have not paid for work done by them on all six of the plaintiff’s helicopters. The defendants also claim that they have a lien over the log books arising out of the money they are owed in relation to the work they have performed on the plaintiff’s entire fleet. They claim that they have liens by virtue of s41 Workers Liens Act 1893 and also possessory liens at common law.
There is a dispute about whether the plaintiffs owe the defendants any money in relation to any of the helicopters and, if so, how much. The defendants claim the plaintiffs owe them $37,980.16 for work done on one of the subject helicopters and $190,144.60 for work done on the other. There are also allegations and counter allegations about the conduct of each side. As I said during the course of argument, these are issues which, on the material currently before me, simply cannot be determined at an interlocutory level.
Principles
In order to obtain the injunctions sought the plaintiffs must demonstrate that there is a serious question to be tried in the sense that their prospects of success in the action they have brought are sufficient to justify preservations of the status quo pending the determination of the action, that damages would not be an adequate remedy and that the balance of convenience falls in their favour in the sense that the injury or inconvenience which the plaintiffs are likely to suffer if the injunctions are refused is greater than the injury that the defendants would suffer if they are granted.[1] Some cases have incorporated the question of whether damages would be an adequate remedy into the question of the balance of convenience.[2]
[1] Australian Broadcasting Commission v O’Neil (2006) 227 CLR at [19], [65]-[72].
[2] Eg Kilpatric Green Pty Ltd v State Supply Board (1991) 56 SASR 591.
Serious issue to be tried
As things currently stand, it appears that the action for damages will largely turn on credibility.
Affidavits were tendered by both sides. However, and as thing currently stand, there is nothing before me that suggests that the conflict on the facts is unlikely to be resolved in favour of the plaintiffs. That being so, it cannot be said that their prospects of success, in so far as their claim relates to damages, are insufficient to justify the grant of the injunctions sought.
Whether the defendants hold any liens over the log books thus denying the plaintiffs the right to possession of the books involves questions of fact and law. In order to establish that there is a serious issue to be tried the plaintiffs must demonstrate that their ultimate prospects of satisfying the court that the defendants do not hold valid liens over the log books are sufficient to warrant the grant of the injunctive relief sought.
Counsel for the defendants submitted that, in circumstances such as these, chattels such as the log books are not amenable to injunctive relief and therefore no issue to be tried could ever arise.
In reliance on Doulton Potteries Ltd and Anor v Bronette and Anor[3] counsel submitted that where the return of a chattel is sought the appropriate remedy is an action for restitution and that even if the log books were amenable to injunctive relief any injunction would effectively operate as a summary judgment in favour of the plaintiffs.
[3] (1971) 1 NSWLR 591.
Doulton Potteries was a case where the plaintiff sent a piece of manufacturing equipment to the defendants to be repaired. The defendants claimed a lien over the equipment. The plaintiff sought declaratory and injunctive relief. Hope J held that an order for the return of a chattel is not a form of injunctive relief. However, his decision seems to turn on the provisions of the Equity Act (NSW) 1901 and he went on to say that if the chattel was “…… of special value to the plaintiffs in order to carry on their business.”, then the court could appropriately grant injunctive relief.[4]
[4] Ibid at 596.
Thus the proposition that counsel derives from the reasons in Doulton Potteries is not unqualified and, in my view, the log books are of special value to the plaintiffs in the conduct of their business for the simple reason that they cannot conduct their business, in so far as it relates to the subject helicopters, unless the log books are made available to them and it follows that the log books are thus amenable to injunctive relief.
The submission that the log books are not amenable to injunctive relief must be rejected accordingly.
Counsel for the plaintiffs submitted that there is simply no evidence which has the capacity to satisfy the criteria which must be met for the creation of a lien.
Counsel submitted that before a lien can be created over a chattel work must have been preformed on the chattel for the purpose of improving the chattel itself.[5] He submitted that the work was done on the helicopters and not the log books, that any entries which were made in the log books did not improve the log books or increase their value and that the only liens that could have arisen would have been over the helicopters and not the books, and that as the defendants had returned the helicopters they had surrendered any claim to a lien over them which they otherwise might have enjoyed.
[5] Majeau Carrying Co Pty Ltd v Coastal Rutile Ltd (1973) 129 CLR 48 at 54.
Against this, counsel for the defendants submitted that the commercial reality of the situation is that the log books are an integral part of the helicopters without which they eventually cannot fly and thus the entries in the log books amount to work done which improves the helicopters or enhances their value by enabling them to fly or to be sold at a competitive price. Counsel did not point to any authority in support of this proposition.
In these circumstances it is plain that the plaintiffs’ prospects of success on the issue of whether liens had been created are sufficient to warrant the grant of the injunctions sought and there is thus no need to consider the other submissions of counsel for the plaintiffs on this issue.
Damages
The plaintiffs claim to have incurred a considerable amount of expense because of the delay and that they will incur considerable losses if the helicopters are grounded and it is easy to see why this might well be so. On the face of it, damages would ordinarily be an adequate remedy for any losses arising out of the unavailability of the log books. However, the plaintiffs express concerns about the current and future solvency of the defendants and if the plaintiffs ultimately succeed in their action for possession of the books and damages, and if these concerns turn out to be justified, then damages might well turn out not be an adequate remedy and the situation might well be exacerbated if the helicopters are grounded in the meantime and the plaintiffs losses increase as a result.
In addition, if the plaintiffs are unable to fulfil contracts because of the unavailability of the helicopters, then their commercial reputation might well suffer as a result and damages would not be an adequate remedy for any such loss.
Balance of convenience
As I have said, if the log books are retained by the defendants and the helicopters are not permitted to fly then plaintiffs will suffer a loss of income estimated to be not less than $80,000 per month. This is a significant detriment. If the log books are delivered up to the plaintiffs then the defendants will lose their security for the money they claim they are owed. This too is a significant detriment. If the log books are retained by the defendants, if the plaintiffs suffer the anticipated losses of income and then if the plaintiffs ultimately succeed in their claims for possession of the log books and for damages then the defendants could well be facing a judgment debt of very significant proportions. Thus it might well be to the ultimate advantage of the defendants if the log books are delivered up to the plaintiffs now. On the other side of the coin, if the defendants establish that they are owed the amounts they claim for work done, then the plaintiffs will be in a better position to meet their judgment debts if the helicopters are able to fly and to generate income in the meantime.
Thus delivering up the log books to the plaintiffs has the potential effects of significantly limiting the damages for which the defendants might be liable and significantly increasing the plaintiffs ability to pay their judgment debt if the defendants succeed in any claim for monies owed. It follows that it is in the interests of all parties that the helicopters should continue to fly pending the determination of the action. The defendant’s security can be maintained by an order for payment into court. If such an order is made then the balance of convenience falls in favour of the plaintiffs.
Counsel for the defendants submits that an order for payment into court is inadequate and, in effect, that the balance of convenience could only fall in favour of the plaintiffs if the plaintiffs make payment under protest. Counsel submits that this is a recognised procedure where a lien is claimed and that if it is followed, and if the plaintiffs ultimately succeed, then they would be entitled to their money back.
For this submission counsel relies on The Artificers Lien by R.D Elliot where in relation to the workman’s rights the author stated as follows:
“He cannot add anything to the amount for which his lien actually exists. If he does claim some addition to the amount of his lien on these grounds, and the owner pays it under protest in order to get possession of his goods and at the same time gives notice that he will reclaim the amount overcharged, the owner will be entitled to recover what has been unlawfully demanded, in an action for money had received.”[6]
[6] At 9.
The obvious difficulty with payment under protest is that it is tantamount to summary judgment in an action for money owed and that the money might well be dissipated by the time the action is determined. Also making payment under protest on terms that the defendants not dispose of the money pending the determination of the action would have almost exactly the same practical effect as payment into court. In my view payment under protest is not a necessary precondition to the balance of convenience falling in favour of the plaintiffs.
This begs the question of the amount which ought to be paid in by the plaintiffs.
Counsel for the defendants submitted that the defendants held liens over the log books which are not limited to the money it claims it is owned in relation to the subject helicopters but which extend to other money it claims it is owed in relation to work it has performed on the other helicopters in the plaintiff’s fleet.
Dinmore Meat Works Pty Ltd v Kerr and Anor[7] stands for the proposition that in the absence of any agreement to the contrary, artificer’s liens are particular and not general and that a workman can only retain a chattel until he has been paid for the work done on that particular chattel. Here it appears that invoices were issued from time to time for work done on all the individual helicopters in the plaintiff’s fleet. In these circumstances general liens cannot arise and any liens which might have been created over the log books for the subject helicopters are limited to the work performed on the particular helicopter to which the log books relate.
[7] (1962) 108 CLR 628.
There is authority for the proposition that in circumstances such as these the full amount claimed by the party relying on a lien should be paid into court.[8] As any liens are limited to monies owing in relation to the subject helicopters any order for payment in must be limited to those amounts.
[8] Doulton Potteries & Anor v Bonnette & Anor ibid, Re: D.J. Story Pty Ltd (1993) 2 Qld R 355 at 360.
The proposition that the full amount claimed ought to be paid in cannot be unqualified. It would plainly be unconscionable to order payment in of the full amount of a claim which was demonstrably exaggerated.
Counsel for the plaintiffs submits that the defendant’s claims in relation to the subject helicopters are inflated and points to some of the exhibits to the various affidavits in support of his submission. The material on which he relies has the capacity to raise some doubts about the validity of the amounts claimed. However, it is impossible to determine this issue at an interlocutory level and it thus cannot be said that the amounts claimed are demonstrably exaggerated.
Payment in of the full amounts claimed in relation to the subject helicopters was the appropriate order to make.
For the above reasons I made the following orders:
On the plaintiff paying the amount of $228,124.76, being an amount of $190,144.60 relating to aircraft registered No. VH HSR and being an amount of $37,980.16 relating to aircraft registered No. VH SYS into court pursuant to rule 248(4) of the District Court Rules it is ordered – and I’ll go through them again:
1.That the defendant deliver up to the plaintiffs the logbooks for engine, airframe and history the aircraft with registered numbers VH HSR and VH SYC.
2.That the plaintiffs be restrained from selling or otherwise disposing of the aircraft, registration numbers VH HSR and VH SYC and from in any way disposing of the logbooks for the engine, airframe and his or those aircraft.
3.Liberty to all parties to apply.
4.Costs in the cause.
The primary submission of counsel for the plaintiff in support of his application for summary judgment was that the books were not amenable to an artificer’s lien because they were not a part of the chattels concerned but were merely records relating to those chattels, namely the helicopters, and that the only liens which could ever be created at law would be liens over the helicopters themselves. Counsel submitted that in these circumstances the plaintiff’s action would inevitably succeed. Counsel for the defendant submitted that as the books were essential to enable the helicopters to continue to fly, they thus formed an integral part of the helicopter concerned and were thus part of the helicopter itself.
Rule 232(2)a of The District Court Rules 2006 provides that summary judgment may only be given in favour of a plaintiff if the Court is satisfied that “…there is no reasonable basis for defending the applicant’s claim…”. The onus is on the plaintiff to demonstrate that there is no reasonable basis to defend the claim. The Court must consider the cogency of any bona fide defence identified by the defendant, the court must proceed with care and caution and summary judgment should only be entered in the clearest of cases[9] and any difficult questions of law may sometimes be best left to trial.[10]
[9] Ceneavenue Pty Ltd & Ors v Martin & Ors [2008] SASC 158 at [74]-[82].
[10] Theseus Exploration NL v Foyster (1972) 126 CLR 507 at 514, 515.
I simply do not know if there is any other evidence which might bear on the question of whether liens were created over the books and the argument on the question of whether valid liens could ever be created over them does not appear to be complete. In addition, the submission by counsel for the defendants that the books are an integral part of the helicopters has practical attractions and the submission by counsel for the plaintiffs that the obligations placed on the operators of aircraft by the Civil Aviation Regulations (Cth) 1988 prevent the creation of a lien over the books may turn on factual questions about which I have not heard evidence or on matters about which I have not heard full argument.
Given the care and caution with which I must proceed, given that a reasonable basis on which the claim to the books might be defended has been identified and given that there might well be a difficult question of law involved, I do not think that the case for summary judgment is sufficiently clear to warrant its entry. The application is rejected.
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