Supreme Court New South Wales Medium Neutral Citation: Reavill Farm Pty Limited v AR Mortgages Pty Ltd (No 4) [2020] NSWSC 884 Hearing dates: 30 June 2020 Date of orders: 10 July 2020 Decision date: 10 July 2020 Jurisdiction: Common Law Before: Cavanagh J Decision: (1) The motion filed by Matthew Champion on 14 April 2020 is dismissed. (2) The motion filed by Tucki Hills Pty Ltd on 17 April 2020 is dismissed. (3) Matthew Champion is to pay the defendant's costs of the motion filed by him on 14 April 2020. (4) Tucki Hills Pty Ltd is to pay the defendant's costs of the motion filed by Tucki Hills Pty Ltd on 17 April 2020. Catchwords: PERSONAL PROPERTY — title — particular kinds of personalty — animals — cattle PERSONAL PROPERTY — possession — right to possession — no issue of principle Legislation Cited: Farm Debt Mediation Act 1994 (NSW), s 3 Cases Cited: Reavill Farm Pty Limited v AR Mortgages Pty Ltd (No 2) [2020] NSWSC 718 Reavill Farm Pty Limited v AR Mortgages Pty Ltd (No 3) [2020] NSWSC 740 Category: Principal judgment Parties: Reavill Farm Pty Limited (Plaintiff) Tucki Hills Pty Ltd (First Respondent) Matthew Champion (Fifth Respondent) AR Mortgages Pty Limited (Defendant/Cross-Claimant) Representation: Counsel: M W Young SC (Defendant/Cross-Claimant) P Williams (First Respondent) Solicitors: Bransgroves Lawyers (Defendant/Cross-Claimant) Fifth Respondent (self-represented) File Number(s): 2019/122214 Publication restriction: Nil Judgment 1. This is the judgment in respect of the final hearing of a series of applications pursued by the parties arising out of a dispute as to the entitlement of the defendant, AR Mortgages Pty Limited ("the defendant"), to possession of certain livestock. The defendant seeks to sell certain cows. The applicants on two motions say that the cows and many others that have already been sold belong to them. Procedural history 1. Reavill Farm Pty Limited ("the plaintiff") operated a farming business on property that it owned situated on Hazlemount Lane, Tuckurimba NSW. 2. In November 2018, it entered into a loan agreement with the defendant, seemingly for the purpose of discharging an existing debt to Bendigo Bank. The loan agreement was secured by a mortgage over two lots, being parcels of land with folio identifiers 1/1086613 ("Lot 1") and 22/1021621 ("Lot 22") respectively ("the land"). 3. Security was also provided to the defendant by way of a general security agreement ("the GSA"), under which the plaintiff and its directors granted a charge over all livestock associated with property identification code ("PIC") number NJ534510, all livestock as identified in Schedule B to the cross-summons filed by the defendant on 18 April 2019 ("the cross-summons") and all present and future livestock owned by the plaintiff ("the secured livestock"). Pursuant to the GSA, the defendant registered security interests on the Personal Property Securities Register in respect of the secured livestock. 4. Within several months of entering into the loan agreement with the defendant, the plaintiff was defaulting on its monthly interest payments and a dispute arose between the parties. 5. On 18 April 2019, the plaintiff commenced proceedings in the Equity Division of this Court, seeking declarations that the debt, the subject of the loan agreement, was a farm debt within the meaning of s 3 of the Farm Debt Mediation Act 1994 (NSW), and that the plaintiff was not in default under the loan agreement. 6. On that same day, the defendant filed the cross-summons, seeking an order for possession of the land and possession of the secured livestock. It also sought interim relief restraining the plaintiff from disposing of the livestock. It was alleged by the defendant that whilst in default under the loan, the plaintiff had been selling the livestock. 7. On 22 August 2019, orders were made restraining the plaintiff from selling the secured livestock. 8. On 3 October 2019, the defendant obtained summary judgment for possession of the land and possession of the secured livestock. Since obtaining those orders, there has been ongoing dispute between the defendant, the plaintiff and other persons who have been joined to the proceedings as respondents in respect of ownership and possession of the livestock, as well as difficulties in obtaining possession of and selling the livestock. 9. It is the defendant's contention that since those orders were made, the plaintiff and certain respondents (members of the Champion family) have disposed of some of the secured livestock and wrongly maintained that other cattle were not the subject of the security granted pursuant to the GSA. 10. The matter comes before the Court again for the hearing of two motions filed in relation to the defendant's possession and attempted sale of some of the livestock. 11. On 14 April 2020, Matthew Champion, the fifth respondent to the defendant's cross-summons, filed a notice of motion seeking orders both that he be permitted to enter onto the land and retrieve his personal items and also that he be entitled to possession of 15 head of cattle, which he maintained he owned personally. 12. I dealt with the first aspect of that motion on 14 April 2020 and stood over the balance of the motion relating to possession of the 15 head of cattle. The balance of that motion was ultimately heard on 30 June. 13. I also dealt with a notice of motion filed on 17 April 2020 by Tucki Hills Pty Limited, the first respondent on the defendant's cross-summons ("Tucki Hills"). Again, part of that motion was dealt with by me on 29 May 2020, but I stood the balance of the motion relating to ownership of the 30 cattle referred to in the motion for further hearing on 25 June 2020. [1] It was ultimately heard on 30 June. 14. Suffice to say that this is the fourth occasion on which this aspect of the dispute has been listed for hearing. On one of those occasions, I heard an urgent application by the defendant seeking a declaration as to its entitlement to sell the cattle. For the reasons set out in my judgment, I dismissed that application. [2] 15. At the final hearing of the matter on 30 June 2020, M W Young SC appeared for the defendant and P Williams of counsel appeared for Tucki Hills. Mr Williams had only just been retained and was unknowingly not in receipt of all relevant material. 16. Matthew Champion appeared in person on his motion. He is now also a director of Tucki Hills and is said to be the person instructing Mr Williams. I endeavoured to restrict duplication in the roles played by Mr Williams and Matthew Champion. 17. One of the features of the way in which cases have been conducted over the past four months is that self-represented persons have been able to appear over the phone. On each occasion that Matthew Champion has appeared when this matter has been listed, he has done so over the phone, other than the final hearing on 30 June 2020. The final hearing was conducted by audio-visual link ("AVL"). All parties participated and witnesses gave evidence by AVL, albeit, with some difficulties. 18. Tucki Hills and Matthew Champion relied on the same evidence as follows: 1. affidavits of Matthew Champion affirmed 7 April 2020, 16 April 2020, 12 June 2020 and 29 June 2020; and 2. an affidavit of Jeffrey Champion affirmed on 9 April 2020. 1. The defendant read: 1. affidavits of Sarah Elbarhoun sworn 27 March 2020, 30 March 2020 and 22 June 2020; 2. affidavits of Ailsa Dunsford affirmed 11 June 2020 and 24 June 2020; 3. an affidavit of Bertram Dunsford affirmed 24 June 2020 (although it may be wrongly dated); and 4. an affidavit of Anthony Rippon affirmed 25 June 2020. 1. Matthew and Jeffrey Champion were required for cross-examination and gave oral evidence. 2. Ailsa Dunsford and Anthony Rippon were required for cross-examination and gave oral evidence. Background 1. Jeffrey and Diana Champion conducted their farming business through the plaintiff. They were the directors of the plaintiff. They had two children, Matthew Champion and Belinda Nott. 2. At all relevant times prior to April 2020, Jeffrey Champion was also the sole director and single shareholder of Tucki Hills. Tucki Hills was the owner of land adjoining the plaintiff's land. 3. Jeffery Champion says that he also conducted a farming (cattle) business through Tucki Hills. 4. On 1 April 2020, that is, subsequent to orders being made by the Court in respect of the plaintiff's property and livestock, the shareholding of Tucki Hills changed. Jeffrey Champion became the owner of 50 shares in Tucki Hills and a company known as Aussie Peat Pty Ltd ("Aussie Peat") was granted 950 shares. 5. As emerged during cross-examination, Aussie Peat is a company associated with Paul McMahon, a person said to have an extensive criminal history. The plaintiff had previously relied on a purported contract of sale of land to Mr McMahon's company at the time when the defendant was attempting to take possession of the land. Jeffery Champion denied that this was a bogus contract. 6. Jeffrey Champion also ceased being a director of Tucki Hills, according to ASIC's records, on 9 April 2020. He was replaced by his son, Matthew Champion. In his evidence, Jeffrey Champion described these arrangements as being either part of the process of having Aussie Peat become involved in the Tucki Hills' business or succession planning. 7. The defendant characterises all of these changes as part of the ongoing attempt by the plaintiff and members of the Champion family to prevent the defendant from obtaining possession of the land and recovering and disposing of the secured livestock. 8. It is notable that Matthew Champion only became a director of Tucki Hills on 9 April 2020, being less than a week before he filed his own motion in respect of the 15 head of cattle. I am not sure why it was necessary for the directorship to change at that particular time. 9. In its motion, Tucki Hills originally sought a range of orders, including the joinder of stock agents to the proceedings and various restraining orders against those stock agents relating to attempts by the defendant to sell 30 head of cattle. 10. There was never any basis for their joinder. Immediately after they had they been served and obtained legal representation, Tucki Hills agreed not to pursue them. 11. All that is left of the Tucki Hills motion is the claim that the 30 head of cattle, which the defendant is in the process of selling, are owned by Tucki Hills and are not part of the secured livestock. 12. The effect of Matthew Champion's applications and, indeed, his correspondence with purchasers and agents involved in the sale of the cattle, has been that a purchaser who had agreed to purchase the remaining 30 cattle that the defendant is attempting to sell has not completed. 13. There is some uncertainty as to the orders actually sought by Tucki Hills, having regard to what appear to be changes in its position. Having said that, the two motions were argued and fall to be determined depending on the answers to the following questions: 1. Does Matthew Champion personally own 15 head of cattle wrongly taken by the defendant? 2. Does Tucki Hills own other cattle (the number of which is not clear, but is said to be up to 120 head of cattle) wrongly taken by the defendant? Consideration 1. In my view, Matthew Champion has not established ownership of the cattle, the subject of his motion. Nor has Tucki Hills established ownership of the cattle, the subject of its motion. I have thus decided the questions against Matthew Champion and Tucki Hills. 2. The key to that outcome is that, other than the say-so of Matthew and Jeffrey Champion and some documents that they created or say exist, there is no evidence that any of the cattle were ever owned by Matthew Champion or Tucki Hills. 3. On the other hand, previous valuations and estimates as well as statements made by Jeffery Champion, in addition to other evidence adduced by the defendant, tends to suggest that the cattle, the subject of the dispute, must have formed part of the security offered to the defendant by the plaintiff pursuant to the GSA. 4. As may be expected, the number of cattle comprising the secured livestock was the subject of an agreement between the plaintiff, through Jeffrey Champion, and the defendant. 5. In his affidavit affirmed 2 October 2019, Jeffery Champion stated that there were 352 livestock owned by the plaintiff (and as such, the subject of the security). 6. The livestock have also been subject to two valuation reports by Slattery Asset Advisory ("Slattery"). At the time of the second valuation on 9 September 2019, Slattery estimated the number of livestock owned by the plaintiff as being 366. 7. Only 291 cattle have ever been recovered by the defendant. That figure includes cattle removed from the land owned by Tucki Hills on Hazlemount Lane, Tuckurimba, near Lismore ("the Tucki Hills property"). 8. There are four head of cattle (including two bulls) remaining on the Tucki Hills property. 9. Jeffery Champion suggested in cross-examination that the defendant had obtained a further report from Slattery with a reduced estimate of the number of secured livestock and that the defendant was hiding that report. The basis of this belief is unclear. No evidence was adduced to support this assertion. 10. Tucki Hills and Matthew Champion contend that the defendant has taken possession of cattle not part of the secured livestock. It is asserted that the defendant wrongfully entered the Tucki Hills property and stole Tucki Hills' cattle as well as cattle owned personally by Matthew Champion. 11. The circumstances in which the defendant entered upon the Tucki Hills property and removed the cattle are as follows. 12. During the period from October 2019 to March 2020, 32 head of the secured livestock were sold. However, on inspection of the cattle on the plaintiff's land on 26 March 2020, a head count revealed that only 100 head of cattle remained. 234 were missing. 13. Inquiries then undertaken by the defendant, including through Anthony Rippon, a stock musterer who had worked with or on behalf of the Champions, suggested that the cattle may have been moved to other blocks of land not owned by the plaintiff but owned by another company associated with Jeffery Champion, being the Tucki Hills property. 14. Jeffery Champion said in oral evidence that he believed that 150 head of cattle not owned by the plaintiff had been taken. He eventually settled on 120. 15. It is alleged that the Tucki Hills cattle were intermingled with the secured livestock, although the Tucki Hills cattle was mostly on the Tucki Hills property. 16. According to Jeffery and Matthew Champion, the discrepancy between the number of secured livestock in October 2019 and the amount recovered is explained by the death of 50 cattle between October 2019 and April 2020. This is not accepted by the defendant. 17. Even so, according to Jeffrey Champion, 120 of the 291 are owned by Tucki Hills. It is thus said that more than a third of the cattle removed by the defendant were never part of the secured livestock. Assuming that Jeffery Champion's statement in his affidavit of 2 October 2019 is correct, it must be that up to 131 of the secured livestock are still missing. 18. Neither Jeffery nor Matthew Champion offered any explanation as to the whereabouts of the missing cattle. I apprehend that they assert that the defendant has not accounted for all of the cattle, just as it has hidden another valuation report. 19. Similarly, the National Vendor Declaration records, said to establish the existence of the Tucki Hills-owned cattle, are said to have been removed by persons unknown. 20. It is surprising that Matthew Champion did not realise or depose to the fact (if it be the fact) that up to 120 other livestock had been wrongly taken by the defendant. His explanation for why the Tucki Hills motion refers only to 30 head of cattle (rather than the higher figure now claimed) is that when he provided instructions in respect of the Tucki Hills motion, he was not aware that more may be missing or had been taken by the defendant. 21. He said that it might have been a few days before he was able to carry out an inspection. However, he also said that the cattle were being hand fed by him and that they would be hand fed once every couple of days. Further, no explanation was offered as to why 50 head of cattle might have died over the past few months in circumstances in which there was hand feeding. 22. Anthony Rippon attended at the Tucki Hills property and recovered the livestock on behalf of the defendant on 5 April 2020. He did not observe the remains of any cattle. There was no smell coming from the land. He did not observe any part of the land that might have been used to bury the cattle. 23. Similarly, Ailsa Dunsford, an employee of the defendant, had attended at the land to inspect the cattle and did not observe any dead cattle. 24. In circumstances in which Matthew and Jeffrey Champion were disputing ownership of the cattle and were apparently hand feeding the cattle, it seems improbable that 50 head of cattle would have died. It is even more improbable that all of those cattle would have been buried without any trace of that happening on the land. 25. The proposition that 120 livestock or any significant number of cattle belonging to Tucki Hills were wrongfully removed is quite contrary to the earlier valuations and statements. 26. Indeed, the proposition that Tucki Hills owned any livestock in 2019 is disputed by the defendant. It was accepted by Matthew Champion during cross-examination that he had produced only one document, being an unsigned financial statement for 2017-2018, which would support ownership of any cattle by Tucki Hills. 27. The defendant's position is supported by Mr Rippon, who has done work for Matthew and Jeffrey Champion over the past approximately five years. This involved scanning the national livestock identification system tags to give a record of movement of livestock. In his affidavit, he says that in those five years, he recalled only one mention of Tucki Hills in the context of owning livestock, which was quite some time ago. 28. Further, all of the cattle were registered to the plaintiff by way of the plaintiff's PIC (NJ534510) until such time as Tucki Hills registered its own PIC in October 2019. 29. Matthew Champion says that the PIC is not evidence of ownership but evidence of where the cattle are kept. On that basis, it must follow that Tucki Hills only needed its own PIC when it commenced raising its own cattle on its land in October 2019. This would seem to be during the same period as a significant quantity of livestock disappeared from the plaintiff's property. 30. Other than statements of Jeffrey and Matthew Champion, there is little to support the applications. 31. Jeffery Champion acknowledged that, despite apparently running a cattle business, Tucki Hills did not keep records. It has no records of purchase of the cattle. 32. Matthew Champion states that: 1. the Slattery valuation is incorrect and known to be incorrect by the defendant, which is withholding another report; 2. the inspection undertaken by Slattery did not include lots 3 and 4 owned by Tucki Hills, such that the estimate could only include livestock on the plaintiff's land. The livestock on the Tucki Hills property would not be included in the estimate and Jeffrey Champion's estimate similarly would not include livestock on the Tucki Hills property. As such, earlier estimates of the number of secured livestock are irrelevant as they did not include cattle owned by Tucki Hills on the Tucki Hills property; 3. the plaintiff's cattle were Charolais-Cross and the Tucki Hills cattle were pure Charolais. As such, any pure Charolais taken by the defendant belonged to Tucki Hills; and 4. based on the sales evidence produced by the defendant, many of the calves are missing. The defendant has not accounted for those calves. Matthew Champion believes that the defendant has moved the calves somewhere else. 1. Finally, Tucki Hills relies on sale records, which include sales by Tucki Hills of nine head of cattle originating from a PIC holder other than the plaintiff. This is said to support the proposition that Tucki Hills must have been raising and trading cattle contrary to the defendant's assertion. 2. The effect of the evidence and submissions relied on by both Matthew Champion and Tucki Hills is really that the defendant has taken cattle to which it had no entitlement; it is now hiding relevant documents; it is not accounting for cattle which it must have and it wrongfully failed to comply with court orders. 3. There are a number of difficulties with the evidence adduced by Tucki Hills and Matthew Champion in support of their applications. 4. Firstly, despite allegedly being involved in the cattle farming business prior to 2019, Tucki Hills only registered a PIC in October 2019. New tags were placed on some of the cattle at that time. Establishing that some of the cattle taken by the defendant had a Tucki Hills PIC is hardly evidence of ownership when the PIC was registered and tags inserted after the dispute with the defendant arose and indeed after orders were made. 5. Secondly, other than the 2017–18 Tucki Hills financial statement, documentary evidence relied upon through Matthew Champion does not assist Tucki Hills. There are many sales invoices from George and Furhmann stock agents but most relate to sales prior to 2012. There is a gap in sales up to 2020. 6. Thirdly, the 2017–18 financial statement for Tucki Hills does record that it owned livestock to the value of $157,000 at that time. This is said to establish that Tucki Hills did own a significant quantity of livestock in 2019. As there is no other explanation for the disappearance of this livestock, this is said to be support for the proposition that the defendant wrongfully took a significant quantity. Matthew Champion relied on these "tax returns" in his evidence. 7. He agreed that they were prepared by his sister, Ms Nott, who was an accountant. He maintained ignorance of the conviction of Ms Nott relating to preparation of false documents. 8. No tax returns were produced and there is no evidence before me that any were ever filed. There is no evidence that the financial statements were signed or lodged with ASIC. 9. Matthew Champion expressly adopted the financial statement as being the only document verifying ownership by Tucki Hills of livestock in 2018. No other financial statements were produced. 10. If Tucki Hills was engaged in the business reflected in the financial statement for 2017–18, it would have been required to lodge tax returns. If there were tax returns, I would have expected them to be produced, particularly as the fact that the "statements" were not tax returns was taken up in cross-examination. Ms Nott was not called. I do not accept that an unsigned document, allegedly prepared in 2018, which was not filed with ASIC, is evidence of ownership of a significant quantity of cattle in 2020. 11. Fourthly, Matthew Champion's evidence that Tucki Hills had only owned pure Charolais and not Charolais-Cross was similarly accepted by him as not being accurate based on earlier records, just as he also accepted in cross-examination that his estimate of the number of pure Charolais was incorrect. 12. There is an issue between the parties as to whether the defendant complied with the Court's orders in respect of scanning of the cattle prior to removal from the land. Mr Rippon accepted that he was not instructed to scan the cattle prior to removal. He said there were difficulties put in his way in any event. 13. On behalf of Tucki Hills, Mr Williams submitted that earlier court orders required the defendant to scan the cattle prior to removal; as it did not do so, the defendant was the wrongdoer. The defendant disputed this, asserting that the orders permitted it to scan rather than required it to scan. 14. Mr Williams submitted that it was only necessary for Tucki Hills to demonstrate that even one head of cattle had been wrongly removed by the defendant for the onus to shift to the defendant. Mr Williams pointed to the fact that there were six head of cattle with a PIC registered to a third party. He submitted that this meant that not all of the cattle taken by the defendant could have belonged to the plaintiff. That being established, he said, the onus shifted to the defendant to prove it was entitled to take all of the other cattle. 15. I do not accept that submission. Firstly, I do not accept that the reference to a third party PIC number necessarily establishes that maintained by Mr Williams. 16. Importantly, there is no shifting onus. Both applicants seek orders to the effect that they should either have cattle returned to them or receive damages from the defendant. I reject the submission that the onus rests on the defendant to demonstrate that it did not remove cattle owned by Tucki Hills. 17. In the end, there is an absence of documentation supporting the orders sought in the motions and there is credible evidence weighing against the making of such orders. 18. I would need to be satisfied as to the truth and accuracy of the evidence of Matthew and Jeffrey Champion to find in favour of Tucki Hills. 19. I did not find either Jeffrey or Matthew Champion to be credible witnesses. Their evidence was demonstrated to be inaccurate and improbable. I do not accept Matthew Champion's assertion that there are other documents he could locate, which he has not produced, that would corroborate his claims. The evidence that 50 cattle died when they were being hand fed seems unlikely. Matthew Champion's evidence that he did not realise that so many other cattle had gone missing until after he filed his personal motion, in which he claimed only 15 cattle, is not credible. 20. I do not accept the statements of Jeffrey and Matthew Champion as to the number of cattle owned by Tucki Hills that is said to have been wrongfully taken by the defendant. The statements they have made at differing times have been shown to be inconsistent and inconsistent with each other. 21. I accept Mr Rippon's evidence about the cattle. 22. In the circumstances, Tucki Hills has not established that it owns or has any entitlement to possession of any of the cattle now in the possession or formerly in the possession of the defendant. 23. Matthew Champion's personal application fails for similar reasons. 24. I do not accept that he has established any entitlement or right to the 15 head of cattle. His claim is based on the proposition that he personally raised these cattle in a yard, which he personally tended to, and the cattle would not be alive or on the land if not for him. He may be able to identify each head of cattle by name and may consider them important but that is not proof of ownership. 25. He says that one third of the 15 cattle were each located on different blocks of land, 5 of which were on the Tucki Hills property. However, he has not adduced any evidence of an agreement to transfer ownership of the cattle from the plaintiff to him. He accepts that the 15 cattle were registered under the plaintiff's PIC but says that fact does not establish ownership. 26. He says that he has owned and sold cattle personally in the past. He says that there are calves owned by him which were taken and have not been accounted for. Describing the cattle and emphasising his relationship with them does not lead to a finding of ownership on his part. Further, in circumstances in which I have not found him to be a credible witness, his statement that he owns the cattle would hardly suffice. Orders 1. In the circumstances, I make the following orders: 1. The motion filed by Matthew Champion on 14 April 2020 is dismissed. 2. The motion filed by Tucki Hills Pty Ltd on 17 April 2020 is dismissed. 3. Matthew Champion is to pay the defendant's costs of the motion filed by him on 14 April 2020. 4. Tucki Hills Pty Ltd is to pay the defendant's costs of the motion filed by Tucki Hills Pty Ltd on 17 April 2020. ********** Endnotes 1. Reavill Farm Pty Limited v AR Mortgages Pty Ltd (No 2) [2020] NSWSC 718. 2. Reavill Farm Pty Limited v AR Mortgages Pty Ltd (No 3) [2020] NSWSC 740. 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