Pedelty v Mineral Wealth Pty Ltd & Ors [2005] NSWSC 1331

New South Wales Supreme Court

CITATION : Pedelty v Mineral Wealth Pty Ltd & Ors [2005] NSWSC 1331

HEARING DATE(S) : 12 December 2005

JUDGMENT DATE : 13 December 2005

JURISDICTION : Equity Division

JUDGMENT OF : Palmer J

DECISION : Judgment for the defendants.

CATCHWORDS : DETINUE AND CONVERSION – Whether plaintiff had established a title to the subject matter of the dispute – issues of credit.

Gerald Pedelty – Plaintiff Mineral Wealth Pty Ltd – First Defendant PARTIES : Gregory Winfield Hall – Second Defendant Philip Patrick Carter – Third Defendant

FILE NUMBER(S) : SC 3814/04

A.C. Canceri – Plaintiff COUNSEL : S. Docker – Defendants

G.J. Byles & Associates – Plaintiff SOLICITORS : Kemp Strang – Defendants

LOWER COURT JURISDICTION :

Ex tempore

1 The Plaintiff, Mr Pedelty, sues the First Defendant ("Mineral Wealth") and the Second and Third Defendants who are its receivers, for damages for the detinue or conversion of a certain machine which the receivers have sold in the course of their receivership. 2 The Defendants say that the machine was at the time of its sale the property of Mineral Wealth. Alternatively, they say that if it was not the property of Mineral Wealth, then Mr Pedelty has failed to prove that at any relevant time he was the owner of, or entitled to possession of the machine. 3 The assessment of damages has been reserved to await determination of the issue of liability. 4 The background facts are as follows. Mineral Wealth carried on a business of producing bottled water for the retail market. Part of that business required the manufacture of plastic bottles to contain the water. The managing director of Mineral Wealth was Mr Jim Pegios. Mr Pedelty carried on a business as a sales agent and consultant in the packaging business. 5 In about August 2000, Mr Pegios and Mr Pedelty had discussions about acquiring a blow moulding machine for the production of plastic bottles from a manufacturer in Taiwan. They travelled together to Taiwan and had discussions with the manufacturer of the machine, Chum Power Machinery Corporation ("Chum"), and with a seller and exporter called Jon Wei. 6 In early 2001, Mr Pegios decided on behalf of Mineral Wealth to acquire from Chum a blow moulding machine capable of producing 4,000 plastic bottles per hour. For the sake of convenient reference, I will refer to the machine as a Series 4000. At about this time, Mr Pegios agreed to engage Mr Pedelty to organise the installation of the manufacturing plant, including the Series 4000, and to hire and train the necessary staff. 7 In October 2001, Mineral Wealth was invoiced by Jon Wei for the acquisition of the Series 4000 machine, together with other machinery. 8 In December 2001 the machinery, including the Series 4000, arrived from Taiwan and in January 2002 it was installed in Mineral Wealth's premises. Soon after installation, the Series 4000 began to malfunction and did not produce to its capacity of 4,000 bottles per hour. 9 Mr Pedelty's pleaded case is that in or about February 2002 he agreed with Chum to purchase a blow moulding machine called a Series 2000S which was capable of producing 2,000 bottles per hour and he agreed to lend that machine to Mineral Wealth. The particulars to paragraph 4 of Mr Pedelty's Statement of Claim allege that the loan agreement was oral and that its terms were that Mineral Wealth would be permitted to use the Series 2000S until such time as Mr Pedelty had found a purchaser for it. It is this Series 2000S machine which the receivers sold and which Mr Pedelty says was his property. 10 Mr Pedelty's case, as it was finally framed in closing submissions, was somewhat different from the pleaded case. It was that Mr Pedelty had agreed with Chum in February 2002 to purchase the Series 2000S machine and that he had then agreed to lend that machine to Mineral Wealth while repairs were made to the Series 4000 to enable it to regain full manufacturing capacity. Mr Pedelty says that in or about January 2001 (sic) he had a conversation with Mr Pegios in which he said: "In or about January 2001 I recall having a conversation with Jim Pegios about the 4000S Machine and about me loaning a 2000S PET Stretch Blow Moulding Machine to Mineral Wealth Pty Limited. I said to Jim Pegios words to the effect of: 'That I, through Chumpower in conjunction with Jon Wai, will loan a CPSB 2000s machine to be used on site for around 3 months, after this time if you would like to keep it longer it must be taken as a leased machine otherwise I will have to sell this machine to re-coup my costs.'