FEDERAL COURT OF AUSTRALIA Transworld Group Ltd v Natcor Properties Pty Ltd [2013] FCA 555 Citation: Transworld Group Ltd v Natcor Properties Pty Ltd [2013] FCA 555 Parties: TRANSWORLD GROUP LIMITED v NATCOR PROPERTIES PTY LIMITED and JOHN POTTS AFFLECK File number: QUD 668 of 2012 Judge: DOWSETT J Date of judgment: 2 May 2013 Date of hearing: 2 May 2013 Place: Brisbane Division: GENERAL DIVISION Category: No catchwords Number of paragraphs: 11 Counsel for the Applicant: Mr DV Ferraro Solicitor for the Applicant: Frenkel Partners Lawyers IN THE FEDERAL COURT OF AUSTRALIA QUEENSLAND DISTRICT REGISTRY GENERAL DIVISION QUD 668 of 2012 BETWEEN: TRANSWORLD GROUP LIMITED Applicant AND: NATCOR PROPERTIES PTY LIMITED First Respondent JOHN POTTS AFFLECK Second Respondent JUDGE: DOWSETT J DATE OF ORDER: 2 MAY 2013 WHERE MADE: BRISBANE THE COURT ORDERS THAT: 1. the interlocutory application filed on 1 May 2013 be dismissed; 2. the respondent in the principal proceeding is to pay the applicant's costs; 3. the question of whether the respondents are to pay the applicant's costs on an indemnity basis be reserved; 4. there be liberty to apply for indemnity costs; and 5. paragraph 3 of the order made on 26 April 2013 be varied by substituting "15 May 2013" for "10 May 2013". 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 668 of 2012 BETWEEN: TRANSWORLD GROUP LIMITED Applicant AND: NATCOR PROPERTIES PTY LIMITED First Respondent JOHN POTTS AFFLECK Second Respondent JUDGE: DOWSETT J DATE: 2 MAY 2013 PLACE: BRISBANE REASONS FOR JUDGMENT 1 On 26 April this year, I made interlocutory orders in this matter which, to the extent that they are presently relevant, provided that certain chattels which had been removed from premises in Tin Can Bay be delivered up to the applicants in these proceedings. The chattels were being used for the commercial production of a particular compound, the nature and use of which I need not presently identify. It seems that to the extent that the applicants are entitled to use various commercial processes and the equipment to produce the compound, they rely upon a contract between them and the respondents. The respondents claim that the applicants have defaulted under that agreement and have purported to rescind it. They assert that, as a result, they are entitled to recover possession of the chattels in question. Whether or not they were entitled to rescind the contract, and whether or not the effect of the rescission is to entitle them to recover the chattels, are matters to be determined at a later stage. The effect of the order which I made on 26 April was to resolve for present purposes the identity of the parties who were to have possession of the chattels pending trial, and the right to use them in that time. 2 The respondents have brought on, as a matter of urgency, an application to discharge my order and to recover possession of the chattels. They have also sought other interlocutory relief, but I do not understand it to be pressed at this stage. In any event it would probably not be appropriate for me to consider it today. The primary basis upon which the respondents seek to have the order discharged is their assertion that there was a failure by the applicants to disclose material information at the time at which I made the order. 3 The proceedings on 26 April were not ex parte, and so I do not proceed upon the basis that the applicants were under any particular duty to disclose information to me. However, they were under a duty not to mislead me. If they did so, it may be an appropriate basis for the discharge of the interlocutory relief. Any alleged misleading conduct appears to have been in the evidence concerning the conditions in which the equipment was to be stored and used pending trial. The order provided that the applicants were not to remove the equipment from what is described "the new premises", which are premises located at 243 Harvey Road, Lower Wonga, near Gympie. In the course of the hearing I spoke of the equipment being installed and maintained at such premises, although that intention seems not to have been reflected in the order which I eventually made. It is now suggested that the reference to the premises indicated that there were premises with facilities immediately available for the installation and use of the chattels. It is said that the equipment has, in fact, been taken to farmland somewhere near Gympie, on which there is no building in which they can be conveniently stored, and that they are being stored under canvas. Photographs demonstrate that some chattels are being so stored, although there are improvements on the land. 4 It is said that I was mislead insofar as concerns the conditions in which the equipment was to be stored pending trial. However the affidavits which were before me on the last occasion indicate otherwise. The applicants in fact disclosed that the premises in which the equipment was eventually to be accommodated and used had not yet been built, but were in the process of being built. 5 I may have misunderstood what was said, but the respondents raised no issue with respect to it. I do not see that there is any basis upon which the applicants can be criticised at this stage for the way in which the proceedings were conducted. The respondents seek to raise two other issues on an interlocutory basis. One is the value of the undertakings given in support of the orders. At the time at which the orders were made, I expressly indicated that the respondents should be at liberty, if so advised, to bring any further application in connection with the value of the undertaking. This is because at least one of the applicants is a company registered in the Isle of Man. I am willing to accept for present purposes, and subject to there being any evidence one way or the other, the possibility that this may raise difficulties in the enforcement of any order as to damages pursuant to the undertakings. 6 The other applicant is, as I understand it, an Australian company, but it has only limited assets in Australia, at least as far as the evidence goes at the moment. However it seems that at the commencement of these proceedings, the respondents were willing to accept undertakings from one of these parties, and for that reason I was not minded to deny relief on the last occasion merely on the basis of the value of the undertakings, given that one such undertaking had been in place for some time, and the other was additional to that existing undertaking. 7 The other issue which the respondents seek to raise today concerns the broader question of the alleged breaches of the contractual relationship between the applicants and the respondents, and the respondents' claimed rescission, together with other conduct, in particular the subsequent dissolution of one of the companies associated with the applicants with which the respondents dealt. I cannot see any basis upon which those issues can be raised today, given that they have not previously been the subject of these proceedings to date. They may have merit, but I am not presently in a position to assess it. It does not seem necessary that I do so in connection with the relief presently sought. 8 Insofar as the undertaking as to damages is concerned, it is a matter of some concern to me that it may be of insufficient value. However the interlocutory relief as presently framed was granted in connection with a tenancy agreement between one of the respondents, Mr Affleck as landlord, and the second applicant as tenant. At some stage when relations between the parties deteriorated, Mr Affleck sought to retake possession of the premises. The interlocutory relief originally granted restored possession to the applicants and excluded the respondents from interfering with such possession. Mr Affleck subsequently removed chattels from the premises contrary to my orders. 9 It has emerged today, if it had not emerged previously, that the chattels are actually owned, according to the respondents, by a company which is not presently a party to the proceedings. In those circumstances, it seems to me that any question relating to their possession should be deferred until that company is a party and can properly dispute the entitlement to possession. It has not yet been suggested that either of the respondents has an entitlement to possession derived from this other company. Further, it seems clear that any damages suffered as a result of the applicants remaining in possession of the chattels will be suffered by this third company, which as I understand it is called Sokerol (Australia) Proprietary Limited. 10 In those circumstances it seems appropriate that further proceedings be stood over to enable that company to be joined. There is no point in any further proceedings being brought until such time as the respondents have filed a notice of cross claim and a statement of cross claim, probably involving the jointer of Sokerol (Australia) Proprietary Limited as a cross claimant. For those reasons, I consider that the relief sought by the respondents' interlocutory application should be refused, at least for today. I am willing to adjourn the application to a date to be fixed so that the respondents may be spared the expense of taking out a further application. However, I decline to grant any relief today. 11 In my view, the application was misconceived and failed to take account of what was said in the affidavit. In those circumstances, the respondents in the principal proceedings should pay the applicants' costs of today. I certify that the preceding eleven (11) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Dowsett. Associate: Dated: 26 June 2013