New South Wales Supreme Court CITATION : McGee v Australian Auctioneers Pty Ltd [2002] NSWSC 839 CURRENT JURISDICTION: Equity Division FILE NUMBER(S) : SC 4342/02 HEARING DATE(S) : 02/09/02 JUDGMENT DATE : 2 September 2002 PARTIES : Kerry McGee (P) Australian Auctioneers Pty Ltd (D) JUDGMENT OF : Young CJ in Eq COUNSEL : C Harris (P) J T Johnson (D) SOLICITORS : Piper Alderman (P) Nash O'Neill Tomko (D) CATCHWORDS : EQUITY [368]- Injunction- Unique chattel- Held by auctioneer- Bailment terminated- Threat to sell notwithstanding- Injunction granted. PROFESSIONS & TRADES [4]- Auctioneers- Claim to retain goods after customer withdraws them from sale until "withdrawal fee" paid- Right under clause no higher than lien. WORDS & PHRASES- "Not obliged to withdraw property from sale". DECISION : Order made. IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION YOUNG CJ in EQ Monday 2 September 2002 4342/02 – McGEE v AUSTRALIAN AUCTIONEERS PTY LTD JUDGMENT 1 HIS HONOUR: This is an application for interlocutory injunction to prevent the sale tomorrow of a series of valuable and unique chattels owned by the plaintiff. 2 The case is a very unsatisfactory one for a number of reasons. First, the affidavit on which the plaintiff relies has never been properly filed, in that we have a faxed copy from Queensland which was filed last week. Secondly, although this dispute came to a head in July, the plaintiff did not move until last week. Thirdly, when she was given notice for cross-examination last Friday the plaintiff did not attend and provided an excuse which was not particularly convincing, especially remembering that she is the plaintiff and she is seeking relief. 3 On the other hand, the case on the defendant's side is just as unconvincing. The managing director of the defendant has filed an affidavit which makes a whole lot of self-serving statements that he is a person, or his company is a person with a reputation as one of Australia's leading fine and decorative art auction houses, that the press will take certain attitudes if the plaintiff's injunction is granted, and there would be: "An immediate negative aura on the sale which will be transmitted to the public at large by journalists of [various Fairfax papers]". 4 If there is a negative aura, or however one wants to express it, it seems to me it is as much as a result of the defendant's billing practice as it is of anything else. 5 However, all I am trying today is whether an interlocutory injunction should be given. To grant such an injunction I have to be satisfied of three things: (a) that the plaintiff has an arguable case; (b) that damages are not an adequate remedy; and (c) that the balance of convenience favours the grant rather than the refusal of the injunction. 6 The plaintiff's case on the first matter is fairly simple. She says that the defendant is a simple bailee of the goods; there was no contract between the plaintiff and the defendant and she is entitled to determine the bailment when she feels like it, and she did in fact determine the bailment by her telephone call or fax, which is KM5. This was about 25 July 2002. 7 However, she says that even if there was a contract, which is to be implied because of the previous dealing of the parties, or because of the issuance by the defendant of a series of catalogues, the defendant's position is no better. The defendant claims that at the back of its catalogues, in a document extending for eight pages, headed "Conditions of Business", there are fifty-nine conditions, together with four or five subclauses for each. The defendant says that the plaintiff is affixed with knowledge of a clause, which one can find somewhere in the middle of the document which says that if a customer seeks to withdraw an item from sale then she will be charged a withdrawal fee, and the property is only to be returned to her if she first pays the withdrawal fee equal to the sum of the seller's commission and the buyer's premium as if the property had been sold. The clause goes on to say: "We shall not be obliged to withdraw any property from sale or to return it to you unless you have paid us the withdrawal fee and expenses." 8 The property is said to have a value of about $250,000. The amount which the defendant claims as the withdrawal fee is about $111,000, roughly an amount half the sale price. 9 It is really much to be wondered whether a person putting up property for sale at one of the defendant's auctions would manage to notice on page 172 of the catalogue such a clause, or think for one moment that the cost of asking for one's own property back would be almost half of what she might achieve at the sale. Nonetheless, the defendant presses that clause and says that the plaintiff was an experienced business woman and that all other auctioneers in this sort of industry charge similar "fees" if items are withdrawn from sale. 10 There must be quite a strong argument as to whether the clause is invalid under the Trade Practices Act, or is void as a penalty. However, whether that be so or not, there is no doubt at all that if there was a contract, and even if the clause were void, that the plaintiff would be liable to pay to the defendant its legitimate loss in advertising items for sale which are withdrawn, and publishing catalogues, etc. 11 However, the defendant says that there is also a conventional loss through people coming to its auction, expecting items to be sold when they are not to be sold. Whether that is a compensatable loss or not can be left to the District Court or Master in due course. 12 The real analysis, apart from the last sentence of the disputed clause, which I have quoted, is that the goods have always been the goods of the plaintiff and the defendant has only ever been an agent to sell. Accordingly, if the plaintiff does not want her goods sold then ordinarily she should be entitled to have them back and any expenses which the defendant has incurred can be sued for in a court of law, or perhaps it may have some lien over the property until they are paid, but it has no right to dispose of the property. 13 What then does the clause "we shall not be obliged to withdraw any property from sale or to return it to you unless you have paid to us the withdrawal fee and expenses" mean? Mr Johnson, who appears for the defendant, says the clause is clear. With respect, I disagree. I think it is such a concatenation of verbiage to be almost completely void. However, it does seem to suggest that the defendant is not compelled to withdraw the property until the fee has been paid. It does not, to my mind, make the agency irrevocable. However, I am not finally determining this matter, I am merely looking at the matter to see whether the plaintiff has an arguable case. 14 Accordingly, the plaintiff offering an undertaking as to damages to pay the costs thrown away by the defendant, is entitled to terminate her bailment, if there is no contract. If there is a contract then it would seem also that she is entitled to do so, or at least it is strongly arguable that she is so entitled. Accordingly, the first item is made out. 15 There seems to be no challenge that the items involved are unique chattels, so that damages are not an adequate remedy. However, the defendant says that the plaintiff can, if she likes, buy her own property back at the auction. That is, of course, very little comfort to anybody. 16 So far as the balance of convenience is concerned, the defendant, if the auction is stopped, and if its clause is valid, will be entitled to be paid liquidated damages that it can show in accordance with the clause to which I have referred. Even if the clause is bad then, subject to the Trade Practices Act, the proper expenses will be payable. 17 Accordingly, the only real damage that is suffered by the injunction is the loss of face in not being able to sell the property that has been set out in the catalogue. However, this came up on 25 July; the defendant made a deliberately commercial decision to demand its $110,000, or else the auction would proceed, and if it has put too much reliance on the clause on page 172 then that was its commercial decision and it must abide by it. 18 Accordingly, in my view, the plaintiff is entitled to the relief she seeks and I should make an order in accordance with paragraph 1 of the four paragraph notice of motion of 30 August 2002, upon the plaintiff by her counsel giving to the court the usual undertaking as to damages. I stand the matter over to the Registrar's list at 9.30 am on 16 September 2002. Costs should be costs in the cause. The exhibits may be returned. ************************ Last Modified: 09/12/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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