York International Australia Pty Ltd v Heller Financial Services Pty Ltd & Anor - [2001] VSCA 45

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 6598 of 1999

YORK INTERNATIONAL AUSTRALIA PTY. LTD.

Appellant/Plaintiff

HELLER FINANCIAL SERVICES PTY. LTD.

AND

WESTPAC BANKING CORPORATION

Respondents/Defendants

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JUDGES:	CHARLES, CALLAWAY and BUCHANAN, JJ.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	7-8 March 2001
DATE OF JUDGMENT:	19 April 2001
MEDIUM NEUTRAL CITATION:	[2001] VSCA 45

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CONVERSION – Goods sold subject to retention of title clause – Whether predicated on bailment – Obligation to account for proceeds of sub-sale in specie – Whether cheque "proceeds" – Seller's right to sue in conversion.

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APPEARANCES:	Counsel	Solicitors
For the Appellant/Plaintiff	Mr G.P. Harris	Charles Fice
For the Respondents/Defendants	Mr M.F. Wheelahan	Middletons Moore & Bevins

CHARLES, J.A.:

This appeal raised a considerable number of questions, all of which were well argued by both counsel. But, as Callaway, J.A. demonstrates, the appellant's case in conversion depends upon the application of the retention of title clause to the facts. I agree with his Honour that the clause does no more than regulate a bailment that the draftsman assumed would take place from the Seller to the Buyer. And, it was common ground that no such bailment had occurred prior to the alleged conversion of the cheque.

It is therefore unnecessary to resolve any of the other issues in the cases.

I agree with Callaway, J.A. that the appeal should be dismissed.

CALLAWAY, J.A.:

On 24th December 1997 the appellant filed a writ in the County Court seeking damages for the alleged conversion of a cheque by each of the respondents.[1] The trial judge gave judgment for the respondents on 9th August 1999. It is against that judgment that the present appeal is brought. A number of issues were argued, attractively and with skill, at both ends of the Bar table, but they need not be resolved. Her Honour's decision was right because the retention of title clause on which the appellant relies did not, on its true construction, apply in relation to the cheque.
[1]An alternative cause of action for money had and received is no longer pursued.

Before coming to the clause, I shall say something briefly about the background facts. KF Air Conditioning Pty. Ltd. ("KF Air") was a company engaged in providing and installing air-conditioning systems for building works. LU Simon Builders Pty. Ltd. ("LU Simon") was a building company which, in 1996, entered into a contract to undertake renovation works at 33 St Andrew's Place, East Melbourne. Those works included the installation of an air-conditioning unit and the associated ductwork and piping. (I shall refer to the air-conditioning unit as "the chiller".) LU

Simon entered into a sub-contract with KF Air for the provision of labour, plant and equipment to carry out mechanical works that included the installation and commissioning of the chiller.

In or about February 1997 the appellant agreed to supply KF Air with a chiller for a total price of $90,500. One of the issues at the trial, and on appeal, was whether that agreement…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

AGLC: York International Australia Pty Ltd v Heller Financial Services Pty Ltd [2001] VSCA 45
Case: [2001] VSCA 45
Decision Date: 19 April 2001

CaseChat Overview and Summary

York International Australia Pty Ltd sued Heller Financial Services Pty Ltd and another party over the sale of goods sold under a retention of title clause. The dispute reached the court which had to determine whether the obligation to account for proceeds of a sub-sale was predicated on the existence of a bailment and whether a cheque represented the proceeds in the context of conversion. The court was required to decide whether the cheque was indeed the proceeds of the sub-sale and whether the seller had a right to sue for conversion in such circumstances.

The court examined the nature of the bailment and whether it existed in the context of the sale of goods with a retention of title clause. It assessed whether the proceeds of the sub-sale, in this case, a cheque, constituted the proceeds for the purposes of the seller's obligation to account. Furthermore, the court deliberated on the seller's right to sue for conversion when the buyer sold the goods and the proceeds were represented by a cheque. The decision hinged on interpreting the legal obligations arising from the retention of title clause and the nature of the proceeds in the sub-sale context.

In its reasoning, the court held that the obligation to account for proceeds of a sub-sale was not necessarily predicated on the existence of a bailment. It found that the cheque was representative of the proceeds of the sub-sale. The court also concluded that the seller had a right to sue for conversion even when the proceeds were represented by a cheque. The decision underscored the importance of the retention of title clause and the seller's proprietary interest in the goods, regardless of the form of the proceeds.

The court ordered Heller Financial Services Pty Ltd and the other party to account for the proceeds of the sub-sale, represented by the cheque, to York International Australia Pty Ltd. Additionally, it recognised the seller's right to sue for conversion in such circumstances, affirming the proprietary interest stemming from the retention of title clause.

Orders