Posies Plus Pty Ltd v Welgain Trade & Investments Pty Ltd
[2013] QDC 281
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- Posies Plus Pty Ltd v Welgain Trade & Investments Pty Ltd[2013] QDC 281
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Posies Plus Pty Ltd v Welgain Trade & Investments Pty Ltd[2013] QDC 281
Posies Plus Pty Ltd v Welgain Trade & Investments Pty Ltd[2013] QDC 281
[2013] QDC 281
DISTRICT COURT OF QUEENSLAND
CIVIL JURISDICTION
JUDGE ROBIN QC
No 3568 of 2013
POSIES PLUS PTY LTD Plaintiff
and
WELGAIN TRADE & INVESTMENT PTY LTD
and ANOTHERDefendants
No 3167 of 2013
WELGAIN TRADE & INVESTMENT PTY LTDApplicant
and
POSIES PLUS PTY LTD AS TRUSTEERespondent
BRISBANE
5.13 PM, WEDNESDAY, 6 NOVEMBER 2013
JUDGMENT
HIS HONOUR: I don’t think there’s much option other than to continue the orders but I’m satisfied on the basis of the new material that if things turn out well for Mr Wang, there might be an order calling on the plaintiff’s undertaking. So I’m going to order that no later than the 6th of December, which is 30 days from today, the plaintiff cause an irrevocable undertaking to pay in the sum of $100,000 to be issued by a bank with a place of business in Australia in respect of any order the court may make pursuant to undertaking (1) in Schedule A of the order of Judge Botting made on the 23rd of September 2012. I think Schedule A means that on a particular day the court can say, “Well, the time’s come to have that undertaking secured”.
MR ISKANDER: Sorry, your Honour, I – so on which day?
HIS HONOUR: Well I’ll read it out in more detail.
MR ISKANDER: Okay.
HIS HONOUR: You know it’s the last part of the undertaking.
MR ISKANDER: Yes.
HIS HONOUR: It may be regarded as flexible but it’s happening now. The last day of the trial is the time that it’s got to be done so if you’ve got a case for relieving your client of that obligation, then the trial judge may well change it or allow more time. At that stage, the trial judge ought to have a good idea whether there actually is anything likely to be made payable by an order. I was going to order disclosure – you normally have four weeks for it but disclosure after two weeks, which would be by the 20th of November – that means both sides have got to tell the others what documents they’ve got and make copies available. Can that be done within two weeks?
MR ISKANDER: Yes.
HIS HONOUR: It largely might have happened already.
MR ISKANDER: Yes, it’s largely happened – yes – from our end.
HIS HONOUR: Yes. Yes.
MR ISKANDER: I don’t know Mr Wang.
HIS HONOUR: Do you understand that, Mr Wang?
MR WANG: So that’s the 20th of November?
HIS HONOUR: 20th of November. Yes. That’s two weeks before the trial. I’d – I’ll put liberty to apply in the order. I think the plaintiff’s costs of today in that matter should be its costs in the cause, so if you win the action you get your costs of today of 3568 of 2013. I’ll give some reasons before formally announcing the orders.
Proceeding 3167 of 2013 is an originating application by Mr Wang’s company which got underway with its obtaining ex parte an injunction to preserve certain items on the respondent’s premises in Nanango which were subject to a lease for a fixed term of two years to expire in August next year. The property - from the point of view of what’s been of greatest interest today - is a shipping container which Mr Wang says was loaded with bagged plastic pellets which he produced in his factory on the premises.
It may also have included an item of equipment called a baler but that’s presently by the by. The applicant stood to suffer financially if unable to return it to the owner. The bringing of the interlocutory application is easy enough to understand. The container on the applicant’s case was packed with bags of pellets waiting for export to China under some existing contractual arrangements. The respondent in 3167 of 2013 is Posies Plus Pty Limited which is the plaintiff in claim 3568 of 2013. The relief sought being some $54,080 in respect of rent for the second year of the lease. A like claim is in respect of the second year of a related equipment lease in the amount of $98,000 plus GST so the amount sought in respect of the second year of the term of the equipment lease is $107,800. What the plaintiff can recover may be less if it appears that replacement lessees could have been found with reasonable effort or other ways of obtaining a return from the assets: see GumlandProperty Holdings Pty Ltd v Duffy Bros Fruit Market (Campbelltown) Pty Ltd (2008) 234 CLR 237 at 258 ff 259
There’s also sought in that claim $43,276.94 in respect of quoted costs the plaintiff says were necessary to effect necessary repairs to – and to clean up the demised premises. Credit is given to the first defendant, which was the lessee, for $10,000 which has been paid. The second defendant is Mr Wang, sought to be held liable as guarantor. Recoverability may be limited to what is actually paid to deal with a situation proven to be the defendant’s responsibility and require consideration of the state of the premises at the commencement of the lease. There is evidence from the Plaintiff that this was paid against an agreed compromise amount of $25,000, that the plaintiff contended only the $43,276.94 claim was compromised, the defendants contended all claims were compromised. The relief claimed also includes interest and “a declaration that pursuant to clause 13.03 of the property lease, the shipping container number TCNU9421393 and its contents were abandoned by the first defendant and are the property of the plaintiff”. In my opinion, that is a mischievous and totally inappropriate claim but one which would no doubt cause alarm to Mr Wang or his company if they were committed to an export contract. Clause 13.03 of the lease stipulates that abandoned fittings belong to the lessor.
It relates only to fixtures or fittings not removed by the tenant and plainly has no application whatever to the items in question which are not fixtures or fittings. The court, in my view, would be vigilant not to lightly give effect to anything in the nature of a forfeiture of items, when, on the evidence the court has seen, it’s clear that Welgain Trade Investment Pty Limited had a continuing claim to ownership and control of. I consider that the company’s proceeding 3167 of 2013 was one amply justified: see Curtin-v-Meadlow Holdings Pty Ltd [2001] QCA 145 and Re Jigrose Pty Ltd [1994] 1 Qd 382 at 386 referred to in counsel’s submissions (Document 9 in the Courts File). The originating application was dismissed by Judge Ryrie on the 2nd of October 2013 when her Honour adjourned consideration of costs. Those were sought by the respondent on the basis of dismissal of the order, which the transcript makes clear occurred because by that date the container had been removed from the premises. The transcript at page 14 and following shows her Honour contemplating that there could be an order for costs in favour of Posies Plus which its counsel sought on the indemnity basis.
Mr Wang was placed on notice that that might be the outcome unless he made good his assertions from the bar table as a self-represented litigant that Posies Plus were implicated in the removal of the container on the 18th of September. Her Honour said, “You need to get it from the direct source, someone at the transport company you maintain was told by Posies to come and collect the container at their direction on the 18th of September – was the date I think you gave me – the day after 17th of September. Okay. So you’ll have to do that next time you come back to court”. She appeared inclined to accept Posies Plus assertions that the removal was effected by Mr Wang and without involvement by them - which would have breached the ex parte interim order of 23 August 2013, which bound only “the respondent”.
Mr Wang managed to achieve what her Honour required in the form of an affidavit by Mr Dieter Clarke who was subpoenaed not by Mr Wang or his company but by representatives of Posies Plus to come and give evidence at some inconvenience to himself. The court’s already given a direction that rather than the $50 proffered to him for expenses, he should be provided the sum of $150.
A principal of Posies Plus is Ms Michelle Soliman. She deposes that on the 17th of September she had discussions with Mr Clarke. He says that she authorised the removal of the container when she rang him again the next day, and instructed him not to turn up to remove it until the afternoon. On the 17th it appears that Posies Plus or its agents refused Mr Clarke’s driver (Clinton Dennis, who has provided an affidavit) access to the premises to collect the shipping container when he attended there for purposes of removing it presumably on Mr Wang’s instructions. Mr Wang says that on 15 August 2013 he was denied access to the premises and to the chattels he was entitled to possession of. He has apparently obtained a corroborating affidavit from Mr Cordery a copy which is the last page in his affidavit Court File document 15 in 3568 of 2013. Another affidavit was obtained by Mr Wang from one Virgil Smith who says he’s an owner of the property next door and on the morning of the 18th of September 2013 when driving out of his own property he observed a person he says was Mr Sam Soliman, the other principal of Posies Plus, with a forklift moving what appeared to be a bag of plastic material.
And he said that the appearance given to him, Mr Virgil Smith, was that plastic bags were being unloaded from the shipping container parked beside the shed and put inside it. Mr Smith hasn’t been required for cross-examination. I found Mr Clarke’s evidence very persuasive. Michelle Soliman hasn’t given any oral evidence in response and to the extent that her affidavit, filed on the 28th of October, is intended to challenge what Mr Clarke said about the 18th of September, I think in the circumstances I should rely on what he said in his cross-examination and adhered to. Exhibit 4 is an email which he says he received from Michelle Soliman which he construed as, and which appears to me to be an attempt by her to get him to give evidence to provide protection for the plaintiff against assertions that it may have been in breach of Judge Ryrie’s ex parte order of 23rd of August 2013, which, on the applicants giving the usual undertaking as to damages, restrained the respondent Posies Plus, its agents, employees etcetera from dealing with the container or the baling machine.
….
HIS HONOUR: The evidence that he’s given implicates Posies Plus Pty Limited in what happened also it a serious issue whether – and perhaps by the actions attributed by Mr Smith to Mr Soliman – a particular container which Mr Wang swears was full of his company’s product was found to be empty with a special seal – which Mr Wang says had been attached to permit entry of the container into China – removed and a padlock put there in lieu. The court is far from making findings today in any of these respects. The point of all this is simply to resolve the costs issue which was adjourned by her Honour, firstly to herself on another day, when it was not possible for it to be dealt with because her Honour considered there ought to be an interpreter proficient in Mandarin present to assist the court and Mr Wang.
It’s been adjourned again by another judge to today when, fortunately, Mr Tsu has turned up to provide interpreting services. The basis on which her Honour contemplated awarding costs against the applicant seems to me to have entirely disappeared. The material which she required be produced if she was to be persuaded out of making such an order has been provided and, indeed, more. It seems to me the sole reason that Mr Iskander, who has ably presented Posies Plus’s case, can present for obtaining a costs order is that the application was dismissed but there are literally thousands of applications dealt with in the court which are dismissed because the applicant has obtained the relief sought and no longer needs an order of the court. The making of an order for dismissal has no costs implications. I have indicated already that there was ample justification for the institution of 3167 of 2013 and the steps taken in it. It is not open to me now to make any substantive orders against Posies Plus, even if it were still in control of items it ought not to have, because the application has been formally dismissed and there is no replacement or alternative application.
It falls to me to make the decision about costs. My decision is that on the basis of the astounding claim made by Posies Plus to ownership of the items in question (which is foreshadowed by Mr Soliman’s assertion of abandonment in his letter of 15 August 2013 to Wilson Shen) the proceeding was entirely justified and, indeed, the applicant ought to have the costs of it. In my opinion the applicant should count itself fortunate that the costs aren’t on the indemnity basis which it had sought applied should it be successful in obtaining costs. So, in 3167 of 2013 in which the application is already dismissed, the court’s order is that the respondent, Posies Plus Pty Limited, pay the plaintiff’s costs of and incidental to the application to be assessed if not agreed.
In 3568 of 2013 the orders are:
- (1)To fix trial for three days being the 3rd, 5th and 6th of December 2013 as a first reserve.
- (2)Order that the parties complete disclosure by the 20th of November 2013.
- (3)On the basis of the undertakings referred to therein, extend the order of the 28th of October 2013 with the exception of paragraph 11.
- (4)Order that the plaintiff no later that 6th of December 2013 cause an irrevocable undertaking to pay in the sum of $100,000 to be issued by bank with a place of business in Australia in respect of any order the court may make pursuant to undertaking (1) in schedule A to the order of Botting DCJ made on 23rd of September 2013.
- (5)Liberty to apply.
- (6)The plaintiff’s costs of today’s hearing be its costs in the cause.
Paragraph 11 is the one which required the defendants to assist the plaintiff by disclosing exhaustively information about its assets.
Accepting that this was an order made by a judge of the court and extended by other judges of the court, it seems to me, having had the benefit of a protracted hearing today, that that was an oppressive and mischievous provision. It is unfortunate that the Practice Direction invites the inclusion in freezing orders of a disclosure provision, and indeed other draconian requirements. Of course, it is doing no more than suggest possible provisions; there should always be a case made that they are necessary, reasonable, just and fair. It’s good to know that the plaintiff did not proceed as Mr Wang had on an ex parte basis. With respect to my colleagues on the court I have serious concerns that this order has worked in an oppressive way. I accept statements from Mr Wang from the bar table that effectively it has destroyed his chances of conducting a business because the banks with whom he needs to deal are very much on their guard, having been informed in accordance with what is no less than Mr Iskander’s duty of the existence of the freezing order.
The consequences of it have very likely not been anticipated by the plaintiff which seems to be under the belief that there are assets available to the defendants to satisfy any judgment they obtain. But the sad consequence of the order seem to be as indicated. Mr Wang says he is now obliged to live in a backpackers hostel. I would have preferred to see an order which restrained the defendants from dealing with assets in Australia but gave them an open invitation to apply to the court to have particular assets, which it might be desired to dispose of or deal with, released on the basis of establishing to the court that there would be the benchmark sum of $300,000 left. That’s not the way in which things were done. $300,000 may no longer be the appropriate amount. If matters between the parties are not resolved by or at the trial next month, that aspect, and indeed the whole of the freezing order, must be reviewed. Should it appear the plaintiff resorted to self-help as regards the baler, or the container and/or contents, to the serious disadvantage of the defendants, that may bear on the court’s discretion. Mr Wang hotly denies intending to return to China, something on which the order was premised; he may be prepared to surrender his passport to provide assurance.
It seems to me inevitable that the freezing order ought to be continued given that it hasn’t been appealed against and has been made after contested hearings by judges of the court. A particular reason for removing paragraph 11 from the order is that in cross-examination of Mr Wang this afternoon Mr Iskander has pretty well got all the information he could have expected from him under paragraph 11. So those are the orders. I’ll get my associate to make copies available to you gentlemen.
MR ISKANDER: Yes, your Honour. Your Honour?
HIS HONOUR: Yes.
MR ISKANDER: May I seek – I know you’ve set down the trial for 356.
HIS HONOUR: Yes.
MR ISKANDER: May I seek leave to make amendment to the statement of claim before then?
HIS HONOUR: Yes. Well – oh, yes. It’s been set down so you do need leave.
MR ISKANDER: Yeah. So under the laws if it’s been set down I have to seek leave of the court.
HIS HONOUR: All right. I’ll make it at paragraph 7 that the parties have any necessary leave to amend their pleadings. I would expect the defendants to amend their defence (originally entitled defence and counterclaim) to include a counterclaim. Mr Wang’s affidavit of today (the subject of leave to read and file in 3167 of 2013 and a clear request that the court order damages against Posies Plus) would suffice in respect of damages for the conversion he alleges. The letter of Shen’s lawyers, then acting for Mr Wang and his company, of 14 August 2013 sets out (as would the facts alleged in the defence) a basis for a damages claim for breach of the equipment lease agreement, purporting to give notice of termination as well. Mr Soliman acknowledged receipt in his letter the following day.
I’d be very happy if a trial happened on those days but the parties mightn’t be able to get ready, things might go wrong. At least ordering a trial will bring things to a head within the month which is what I want to do, to have somebody who’s got even more time than I’ve had today to think about this freezing order - the trial is the occasion to review it. The current situation seems to me intolerable and cannot be allowed to continue. The order is unduly oppressive to the defendants and, on the evidence available at the moment, not providing the plaintiff with any security whatever. The parties may even find a way of resolving things.
…
HIS HONOUR: The other thing I ought to have said in my reasons is that on the face of things the plaintiff appears to have a good case in that it seems clear that at the mid point of a two year lease the defendant may simply have abandoned the premises, having failed to negotiate a way out, similarly for the equipment lease. The plaintiff’s claim may not succeed in full if, for example, they haven’t made appropriate attempts to find a new tenant for the premises or someone else to lease the equipment, (one would not expect nothing to be salvaged from the wreck), but on the face of things that is a good claim that they have, to some unknown extent. In principle, the plaintiff’s having the benefit of its property for a full year from 15 August 2013 is inconsistent with its also receiving the full amount of agreed rent. I’ll not say anything more for the moment about the claim about the state of the premises.
Maybe the sad explanation for all this is that Mr Wang who’s here on a business visa from China made bad business judgments about what might be a successful enterprise to go into. I don’t know if there is the flavour of allegations that the business visa was obtained on the basis of inaccurate representations as to the assets of Mr Wang. That’s obviously an enquiry for another occasion and the issue shouldn’t influence things today. The plaintiff may be making assumptions based on the business visa that Mr Wang has assets he is concealing. They do not accept his denials. Their fallback position seems to be that his failure to disclose assets provides some justification for the plaintiffs concern that it might need the protection of the freezing order that has been made.
POSTSCRIPT: I think it would be convenient if the hearing next month were conducted by use of the affidavit evidence already available, with witnesses cross-examined if required. It may be difficult to get deponents to court. I would be willing to assist in getting the court set up to allow them to give evidence remotely from a computer, by use of the 'Cisco Jabber Video’ service.
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