New South Wales Court of Appeal CITATION: Critchley & Ors v Conway & Anor [2009] NSWCA 297 HEARING DATE(S): 8 September 2009 JUDGMENT DATE: 29 September 2009 JUDGMENT OF: Ipp JA at 1; Tobias JA at 80; Handley AJA at 81 1. Grant leave to appeal as sought by the appellants; 2. Uphold the appeal by setting aside the orders made by Debelle AJ to the extent that they bear on the 33 wine storage tanks; DECISION: 3. Save to the extent that the orders made by his Honour bear on the 33 wine storage tanks, dismiss the appeal against the orders he made; 4. The issues relating to the 33 wine storage tanks proceed to trial together with the other issues that remain in the case; and 5. Each party partially successful and no order as to the costs of the application for leave to appeal and the appeal. CATCHWORDS: PROCEDURE – judgments and orders – summary judgment ordered against five defendants – whether the trial judge was entitled to order summary judgment against two of the defendants – whether orders had been sought against two defendants not identified in the amended statement of claim – whether the parties had chosen a different basis at trial to the pleaded issues for the determination of their respective rights and liabilities - PROCEDURE – judgments and orders – whether summary judgment should have been ordered- whether there is sufficient evidence to create a triable issue – whether it was open for the trial judge to make particular findings and inferences in summary judgment proceedings CATEGORY: Principal judgment CASES CITED: Conway v Critchley & Ors [2009] NSWSC 499 Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd [2008] NSWCA 206 Stephen Critchley (First Appellant) Mudgee Wines Pty Ltd (Second Appellant) Eurunderee Wines Pty Ltd (Third Appellant) PARTIES: William JJames Whalley (Fourth Appellant) Jane Margaret McLean (Fifth Appellant) David Conway (First Respondent) Mark Norman Thompson (Second Respondent) FILE NUMBER(S): CA 40181/09 COUNSEL: G A Sirtes SC (First, Second, Third, Fourth and Fifth Appellants) T Hall Solicitor (First Respondent) SOLICITORS: Leonard Legal (First, Second, Third, Fourth and Fifth Appellants) Hall partners (First Respondent) LOWER COURT JURISDICTION: Supreme Court LOWER COURT FILE NUMBER(S): SC 6429/08 LOWER COURT JUDICIAL OFFICER: Debelle AJ LOWER COURT DATE OF DECISION: 5 June 2009 LOWER COURT MEDIUM NEUTRAL CITATION: Conway v Critchley & Ors [2009] NSWSC 499 IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40181/09 SC 6429/08 IPP JA TOBIAS JA HANDLEY AJA 29 September 2009 Stephen Critchley & Ors v David Conway & Anor Judgment 1 IPP JA: The application for leave to appeal and the appeal 2 This is an application for leave to appeal and, if granted, an appeal against orders made by Debelle AJ in the course of granting summary judgment in favour of the respondent ("Mr Conway") against the appellants (Conway v Critchley & Ors [2009] NSWSC 499). The application for leave to appeal and appeal were heard concurrently. 3 A number of the issues raised by the appellants are reasonably arguable and I would grant leave to appeal. 4 The orders his Honour made involved certain plant and equipment, wine storage tanks, and other pieces of equipment (the "Goods"). His Honour made an order declaring that the appellants had wrongfully detained the Goods and that Mr Conway was entitled to recover the Goods from the appellants. His Honour further ordered that the appellants deliver the Goods to Mr Conway. His Honour made further, ancillary, orders. 5 The application for leave to appeal and appeal challenge the orders so made. The parties 6 Mr Conway is a winemaker. He and his wife were the only directors and shareholders of a company called Mudgee Wines Pty Ltd, to which I shall refer as "Old Mudgee". The business of Old Mudgee was making wine and it carried on this business on land situated at Henry Lawson Drive, Mudgee. I shall refer to that land as the "Winery Land" and the winery on it as the "Winery". 7 The National Australia Bank lent money to Old Mudgee. Old Mudgee defaulted on the loan and on 26 March 2007 the Bank appointed a receiver to Old Mudgee. On 18 March 2008 an order was made for the winding up of Old Mudgee. 8 The first appellant ("Mr Critchley") is a public accountant and director of the second appellant, Mudgee Wines Pty Ltd, to which I shall refer as "New Mudgee". Mr Critchley is also a director of the third appellant, Eurunderee Wines Pty Ltd ("Eurunderee"). For some 20 years Mr Critchley was the accountant of Old Mudgee and also of Mr and Mrs Conway. 9 On 24 December 2007, by a written agreement (the "Sale Agreement"), the receiver of Old Mudgee sold to Eurunderee the Winery Land together with the plant and equipment, wine stock and goodwill of Old Mudgee, for $850,000. Annexure A to the Sale Agreement set out the assets that were the subject of the sale. Annexure B to the Sale Agreement set out certain assets that were subject to finance and were not the subject of the sale. The Sale Agreement was completed in April 2008. 10 New Mudgee is the winemaker on the Winery. 11 The fourth appellant (Mr Whalley) and fifth appellant (Ms McLean) are shareholders of New Mudgee and Eurenderee. 12 I shall refer to Mr Critchley, New Mudgee, Eurunderee, Mr Whalley and Ms McLean as the first to fifth defendants when discussing the hearing before Debelle AJ. They will otherwise be referred to as the appellants. The circumstances leading to Mr Conway being refused access to the Winery Land 13 Mr Conway had been Old Mudgee's winemaker and after the receiver had been appointed on 26 March 2007, Mr Conway continued to be so employed. When, on 24 December 2007, Eurunderee purchased the Winery Land, the Winery and the Goods from the receiver, it continued to employ Mr Conway at the Winery. 14 On or about 23 November 2008, Mr Critchley told Mr Conway that he, Mr Critchley, was the sole shareholder of each of New Mudgee and Eurunderee. 15 On the same day, Mr Conway had a conversation with Mr Whalley in which Mr Whalley told Mr Conway that he, Mr Whalley, owned the Winery, that the "property" was his, that he was the "managing director of the Winery" and that Mr Conway's licence to enter the premises was terminated. 16 After his conversation with Mr Whalley on 23 November 2008, Mr Conway telephoned Mr Critchley and questioned him about what Mr Whalley had said. Mr Critchley told Mr Conway that Mr Whalley only had a 25% shareholding in Eurunderee and New Mudgee and that he, Mr Critchley, was the managing director. Mr Critchley, however, confirmed that Mr Conway's access to the Winery Land (and the Winery) had been restricted and that the locks were being changed. Mr Conway asked for a key to the new locks, but Mr Critchley said that it was up to Mr Whalley to decide whether Mr Conway would get a key. Mr Critchley told Mr Conway that, according to Mr Whalley, Mr Conway had to prove his ownership "before the goods are released". Mr Conway protested and said, in effect, that the only goods that Eurunderee owned were those that it had purchased from the receiver of Old Mudgee. Mr Conway asserted that everything else belonged to him. Mr Critchley replied: "Well, that is not up to me, that is up to [Mr Whalley]. He will give you the direction what you can take and what you can leave." 17 On 24 November 2008 Mr Conway resigned as New Mudgee's winemaker. 18 A series of emails thereupon passed between Mr Conway and Mr Critchley in which Mr Conway unsuccessfully demanded the Goods. The proceedings brought by Mr Conway 19 These events led to Mr Conway commencing proceedings against Mr Critchley, New Mudgee, Eurunderee, Mr Whalley and Ms McLean as the first to fifth defendants, respectively. Mr Conway joined a Mr Mark Thompson as the sixth defendant but sought no relief against him. Mr Thompson is the second respondent to the appeal. 20 The statement of claim was amended and the amended statement of claim which applied to the proceedings at the time Debelle AJ delivered judgment claimed the following relief: "1. Damages 2. An order that Mr Critchley, Mr Whalley and Ms McLean deliver up to [Mr Conway his] property/chattels as particularised in the amended statement of claim …. 3. An order that Mr Critchley, Mr Whalley and Ms McLean deliver up to [Mr Conway] storage tanks that are the subject of an agreement between the Bank of Queensland and [Mr Conway] … as are presently situated on the property known as Eurunderee … . 4. Costs." 21 Thus, the relief claimed in the amended statement of claim was only against Mr Critchley, Mr Whalley and Ms McLean. 22 The damages claim in the amended statement of claim was based on several causes of action, which are not presently relevant. 23 After the statement of claim had been served and filed, Mr Conway applied by notice of motion (which was subsequently amended) for summary judgment and an order that the first to fifth defendants deliver the Goods up to him. By the amended notice of motion, Mr Conway sought no relief in regard to his claim for damages. The appellants accept that the summary judgment and orders sought in the amended notice of motion were sought against all of them. 24 The matter was argued before Debelle AJ over two days, namely, on 27 May 2009 and 3 June 2009. On 5 June 2009 his Honour made the following orders: "1 That [Mr Conway] is entitled to recover as against the first to fifth defendants the goods listed in the schedule to this order ("the said goods") which goods have been wrongfully detained by the first to fifth defendants. 2. That the first to fifth defendants deliver the said goods to [Mr Conway] at a time or times to be agreed and in default of agreement at a time or times determined by the Registrar. 3. That the first to fifth defendants are at liberty to claim by way of cross claim in these proceedings the cost of repairs to any of the said goods. 4. That the first to fifth defendants pay [Mr Conway's] costs of and incidental to the application for summary judgment." 25 After his Honour handed down the orders, Beazley JA granted a stay in respect of 33 wine storage tanks the subject of an agreement between the Bank of Queensland and Mr Conway made in about April 2009. 26 The Goods other than the wine storage tanks were handed over to Mr Conway in accordance with Debelle AJ's orders. Mr Sirtes SC, who appeared for the appellants before this Court, submitted that, were the appeal to be successful, the goods handed over to Mr Conway should be returned. It is not necessary to address the merits of this submission, but it does explain why the appeal relating to the goods that were handed over arguably has utility. The reasons of the primary judge 27 In his reasons Debelle AJ divided the Goods into three categories, namely: (a) 71 barrels of wine containing some 21,000 litres of 2006 vintage red wine; (b) 33 wine storage tanks; and (c) the remaining items. 28 As regards the 21,000 litres of wine, his Honour referred to an affidavit by Mr Conway in which he stated that there were two separate quantities of wine stored at the Winery. One was 175,000 litres of premium grade red wine and the other was 21,300 litres of wine separately stored in 71 barrels. His Honour found (at [26]): "I am entirely satisfied and I find that the 71 barrels are owned by Mr and Mrs Conway and are a different quantity of wine from the 175,000 litres of wine that constitute the wine stock sold by the receiver. I am also satisfied and find that these 71 barrels are stored separately from the wine stock. As one of the owners, [Mr] Conway is entitled to an order that the defendants deliver to him the 71 barrels of wine." 29 As regards the 33 wine storage tanks, Mr Conway testified that, by an agreement of lease with the Bank of Queensland (referred to as "BOQ"), "through its agent Leasing Centre", he was renting the tanks and, therefore, was entitled to possession of them. 30 The appellants contended that Mr Conway had not established that the 33 tanks that were the subject of the lease agreement with BOQ were at the Winery or on the Winery Land. Debelle AJ however rejected this argument, saying (at [32]): "The receiver left the tanks on the winery land. Mr and Mrs Conway have not moved them. There is evidence from three persons, two of whom were employed by Old Mudgee, that the tanks have remained at the premises at Henry Lawson Drive. There is no evidence that any other person has moved them. The defendants do not say that they have moved them. In addition to all of that evidence, recital G of the deed of settlement between BOQ and Mr and Mrs Conway states that the tanks are situated on the winery land. The owner of the tanks would know where they are located. The evidence is overwhelming and very clear. I unhesitatingly find that all 33 tanks remain at the winery at Henry Lawson Drive and that they are the 33 tanks listed in Annexure B." 31 As regards the remaining items, Debelle AJ observed: "[36] [Mr] Conway's uncontroverted evidence is that he placed all of the remaining items on the winery land. It is implicit in his evidence that he is the owner of the remaining items and entitled to possession of them. There is no dispute that these items are at the winery. [37] None of the remaining items were the subject of the sale by the receiver. None are included in Annexure A. Given the obligations of the receiver to get in all of the property of which he was appointed receiver and sell it to discharge the liability to the bank, it is reasonable to infer that had any of these items been the property of Old Mudgee, the receiver would have sold them with the other items the subject of the agreement for sale. They were not sold by the receiver. It may also be inferred that, if any of the items claimed by [Mr] Conway were assets of Old Mudgee, the current liquidator of Old Mudgee would have claimed them. No such claim has been proved. [38] In his affidavit sworn on 24 December 2008, [Mr] Conway deposed that he placed the remaining items on the winery land. In his affidavit sworn on 22 January 2009, he referred to these items as his "tools of trade". Although he did not in either affidavit expressly state that he owned the goods, that is in all the circumstances a reasonable inference. In this context, it must be noted that, on 1 December 2008, Conway had sent Mr Mark Thompson a list [of] the remaining items. That list stated that the items belonged to [Mr] Conway and Mrs Conway. Mr Thompson sent that list to Mr Critchley asking him to identify those items that Mr Critchley said were owned by Old Mudgee. Mr Critchley did not respond." 32 His Honour concluded (at [41]): "Although [Mr]Conway has not expressly stated that he owned the remaining items, that is in all circumstances a reasonable inference. An examination of the facts relating to each item reinforces the conclusion that [Mr] Conway is the owner of all of the items claimed. The defendants have not adduced any evidence denying [Mr] Conway's claim to ownership … ." 33 His Honour found (at [42]) that the evidence "very clearly establishes that [Mr] Conway is the owner of all items or is otherwise entitled to possession of them." 34 Accordingly, his Honour made the orders that I have set out. The pleading point 35 Mr Sirtes pointed out that, in the amended statement of claim, Mr Conway only claimed summary judgment against Mr Critchley, Mr Whalley and Ms McLean. He submitted that, for that reason, Debelle AJ was not entitled to order summary judgment against Eurunderee or New Mudgee. 36 Mr Hall, who appeared for Mr Conway, submitted that the hearing before Debelle AJ proceeded on the basis that the claim for summary judgment was being made against the first to fifth defendants and, for that reason, his Honour was entitled to proceed as he did. 37 In Ingot Capital Investments Pty Ltd v Macquarie Equity Capital Markets Ltd [2008] NSWCA 206 (with the agreement of Giles JA and Hodgson JA) I said at [424] that the following propositions may be extracted from the relevant authorities dealing with the issue whether a plaintiff may obtain relief outside its pleaded claim. "(a) The rule that, in general, relief is confined to that available on the pleadings secures a party's right to a basic requirement of procedural fairness. (b) Apart from cases where the parties choose to disregard the pleadings and to fight the case on additional issues chosen at the trial, the relief that may be granted to a party must be founded on the pleadings. (c) It may be that, in a clear case, mere acquiescence by one party in a course adopted by the other will be sufficient to ground an inference that the parties have chosen a different basis to the pleaded issues for the determination of their respective rights and liabilities (d) Acquiescence giving rise to a departure from the pleadings may arise from a failure to object to evidence that raises fresh issues – it is in this sense that "cases are determined on the evidence, not the pleadings". (e) While cases are to be decided upon a basis that embraces the "real controversy" between the parties, the real controversy has to be determined in accordance with the principles stated." 38 Mr Sirtes, in effect, submitted that what occurred before Debelle AJ did not constitute a "clear case" that the parties had chosen a different basis to the pleaded issues for the determination of their respective rights and liabilities. 39 Mr Sirtes responded to the point that Mr Conway's amended notice of motion had sought relief against all five appellants by referring to an email that Mr Hall had written to Debelle AJ's associate on 5 June 2009, a copy of which was sent to the appellants' solicitors. Mr Sirtes submitted that the email indicated that the claim for summary judgment would be limited to the relief claimed in the amended statement of claim. 40 The email stated that Mr Conway would be seeking the following orders: "1. Summary judgment in relation to those paragraphs of [Mr Conway's] amended statement of claim that deal with his plant and equipment, his wine stocks and the Bank of Queensland storage tanks; 2. That the defendants provide [Mr Conway] every reasonable assistance so as to enable him to collect the plant and equipment, the wine stocks and storage tanks that are the subject of the application; 3. Liberty to apply on 24 hours notice, (should there be any difficulty in relation to the entry of these orders); 4. Costs" 41 Mr Sirtes drew attention to the fact that paragraph 1 of the email indicated that Mr Conway was seeking summary judgment in relation to the identified paragraphs of the amended statement of claim. That is correct, but paragraph 1 of the email says nothing about the identity of the persons against whom relief was being claimed and does not detract, in this respect, from the amended notice of motion in which relief was claimed against all the defendants (except Mr Thompson who did not file a notice of appearance). The point is emphasised by paragraph 2 of the email in which it is made plain that orders were being sought against those defendants. 42 Mr Freeman, of counsel, appeared for first to fifth defendants before Debelle AJ. At no time during the two days of hearing did Mr Freeman take the point that relief under the amended statement of claim was limited to Mr Critchley, Mr Whalley and Ms McLean. 43 The transcript records (at T1) that, on the first day of the hearing before Debelle AJ (27 May 2009), before Mr Hall commenced his submissions in support of the application for summary judgment, Mr Freeman noted that his clients "had accepted some redrafting of the proposed amended statement of claim". He indicated that "it was his understanding the application for immediate delivery of goods arose by way of summary judgment and submitted that jurisdiction should fall to be determined on the existing pleading". Neither his Honour nor Mr Hall responded to this observation. It is not entirely clear what Mr Freeman meant by "jurisdiction" in this context. 44 In his opening submissions, Mr Hall did not expressly state that he was seeking summary judgment against all the defendants. At several places in his submissions, however, it is implicit that he was putting the case for summary judgment against all the defendants (see transcript 27 May 2009 at T2, (line 49), T3 (lines 21,36), T26 (lines 16,17, 43), T27 (lines 4,24), T 31 (line 4), T 39 (line 12) and, on 3 June 2009 at T9 (line 39)). 45 Mr Freeman made it absolutely plain that he was resisting the summary judgment application on behalf of the first to fifth defendants. On 27 May 2009 the transcript records at T5 that, after the case for Mr Conway had been closed by Mr Hall, Mr Freeman opened the "case for the first to fifth defendants". The transcript records at T6, line 21 that the "case for the first to fifth defendants [was] closed." 46 At T6 (lines 25 and 26) of the transcript of 27 May 2009, Mr Freeman said, "The principal matter that has been put up on behalf of my clients is whether the plaintiff is entitled to sue for these items". Two points may be made from this statement. Firstly, it indicates yet again that Mr Freeman was resisting the summary judgment application on behalf of all the parties he represented, namely, the first to fifth defendants. He did not distinguish between the five defendants for whom he was acting, and whose cases, as I have indicated, he opened and closed. Secondly, while Mr Freeman was astute to focus on the question whether the right parties had been joined as plaintiffs, he said nothing about the joinder of New Mudgee and Eurunderee as defendants to the summary judgment application. 47 At T14 (lines 40 and 44) of the transcript of 27 May 2009, Mr Freeman again raised the point that "the proper plaintiff has to be joined". Again, he said nothing about the position of New Mudgee and Eurunderee as defendants in the summary judgment application. The last-mentioned comment made in the previous paragraph applies. 48 At T9 (lines 30 - 33) of the transcript of 27 May 2009, Mr Freeman submitted: "Your Honour would want to be satisfied there is some substance to the first to fifth defendants telling the court that there is a dispute as to whether the plaintiff has title to the goods and that, we say, is evidence." In other words, Mr Freeman was explaining to His Honour why summary judgment should not be granted against the first to fifth defendants. 49 At T10 of the transcript of 27 May 2009, Debelle AJ put to Mr Freeman: "So, essentially at the end of the day you resist delivering up these items solely on the ground the title may belong to a third person." In context, it is apparent that his Honour's reference to "these items" was a reference to the Goods. To his Honour's question Mr Freeman replied "Indeed". 50 In my opinion, having regard to the way in which the case had been run up to that stage, Mr Freeman, by agreeing that the sole ground on which he was contesting the summary judgment was the fact that a third party might own the Goods, acquiesced in the proceedings being dealt with as a summary judgment application against the first to fifth defendants. 51 At T20 of the transcript of 27 May 2009, Mr Freeman put to Debelle AJ the appropriate test for refusing to grant summary judgment (namely, "whether there is a dispute"), but did not raise the issue that no relief was claimed in the amended statement of claim against New Mudgee and Eurunderee. See also the transcript of 27 May 2009 at T36 (lines 31 and 35). 52 According to T7 of the transcript of 3 June 2009, Debelle AJ said: "Mr Freeman, what I propose to do is … to make an order for delivery up … ." His Honour went on to note, "I am well on the way to completing my reasons". He then said, "I will hand to you both – I started to draft an order". The transcript (T7) then records that his Honour's draft order was handed to counsel (line 26). His Honour proceeded to discuss the mechanics of the operation whereby Mr Conway would be able to enter the Winery Land, search for the Goods, and remove them. His Honour proposed, as an alternative to an earlier suggestion, that he "simply make an order that the first and fifth defendants deliver the goods to the plaintiff at times to be agreed. And in default of the agreement to be determined by the registrar". 53 The word "and" in the phrase "first and fifth defendants" recorded at T7 of the transcript of 3 June 2009 appears to be a typographical error. There is no rational basis for his Honour, when uttering that phrase, to refer only to Mr Critchley and Ms McLean (the first and fifth defendants). One possibility is that his Honour meant to say "the first, fourth and fifth defendants" (those being the defendants against whom relief was sought in the amended statement of claim). The only other reasonable possibility is that his Honour intended to say "the first to fifth defendants". In my view, the latter is far more likely. Firstly, his Honour expressly identified two defendants, alone; this renders it unlikely that he had three, that is, Mr Critchley, Mr Whalley and Ms McLean, in mind. Secondly, there had been no suggestion whatever that the order was only going to be made against Mr Critchley and Ms McLean (the first and fifth defendants). Thirdly, the phrase "first to fifth defendants" had been used several times in the course of argument. In fact, on T6 (immediately preceding T7 on which his Honour's reference to "first and fifth defendants" is recorded) Mr Freeman referred to "the first to fifth defendants" in the course of submissions he was making in resisting the application for summary judgment. 54 Virtually immediately after his Honour's reference (at T7) to "the first and fifth defendant", he said to Mr Hall, on T8, in referring to the draft order that he had handed to counsel: "In paragraph 2 you are entitled to the goods delivered to him and if in default of arrangements to be determined by the registrar". His Honour's remark is to be compared with order 2 of the orders that his Honour in fact made. I repeat that that order was in the following terms: "that the first to fifth defendants deliver the said goods to the plaintiff at a time or times to be agreed and in default of agreement at a time or times determined by the registrar." The strong inference is that the draft set of orders that his Honour handed to counsel was the set of orders that, eventually, were in fact made by his Honour. 55 The issue, in my view, is put beyond doubt by an examination of the document recording the set of orders that in fact was made. Immediately prior to the setting out of orders 1, 2, 3 and 4, the document contains the heading "DRAFT ORDERS". The word "DRAFT" is deleted by a squiggly line made, apparently by a pen, drawn through it. This makes plain that the document that became the actual set of orders made by Debelle AJ was the document recording the draft orders that his Honour handed to counsel, as recorded on T7 line 26. 56 It follows that the document recording the draft orders that his Honour handed to counsel provided, firstly, that Mr Conway was "entitled to recover as against the first to fifth defendants the goods listed in the schedule to this order" and, secondly, that "the first to fifth defendants deliver the said goods to the plaintiff … ." (my emphasis) 57 In other words, at the conclusion of submissions on the merits of the application for summary judgment, Mr Freeman was apprised of the fact that his Honour was intending to grant summary judgment against all five defendants. Mr Freeman did not then object. Acquiescence giving rise to a departure from the pleadings is thereby unequivocally established. 58 In my view, all involved in the hearing of the summary judgment application accepted that, if the application succeeded, orders would be made against all five defendants. 59 Accordingly, I would not uphold the appellants' argument that, by reason of the relief framed in the amended statement of claim, his Honour was not entitled to order summary judgment against New Mudgee and Eurunderee. The 33 Storage Tanks 60 According to the amended statement of claim, Mr Conway's rights of possession to the 33 storage tanks arose out of an agreement entered into between him and BOQ on April 2009. Whatever the position may be in this regard, Debelle AJ dealt with the matter on the basis that Old Mudgee's rights to the 33 tanks stemmed from the rental agreement of 2 May 2005 with BOQ. 61 His Honour described Mr Conway's argument as follows: "[31] Mr Conway advances his claim that he is entitled to possession of the 33 tanks in this way. He says that, as a result of an agreement with BOQ through its agent Leasing Centre, he and his wife are renting the tanks and are, therefore, entitled to possession of them. The agreement with BOQ was made in the following circumstances. Leasing Centre was leasing 33 tanks to Old Mudgee under a rental agreement dated 2 May 2005. Mr and Mrs Conway had guaranteed the obligations of Old Mudgee under the rental agreement. Old Mudgee defaulted in its obligation to BOQ and BOQ determined the rental agreement. In 2007 BOQ commenced proceedings in the District Court of New South Wales against Old Mudgee and Mr and Mrs Conway to recover damages. The parties reached a compromise that was embodied in a deed of settlement between BOQ and Mr and Mrs Conway. On 25 March 2009, orders were made by consent in the District Court. The effect of the orders on the compromise was that Mr and Mrs Conway were to pay BOQ $180,663.78. That order was stayed upon terms that Mr and Mrs Conway pay $80,000 to BOQ in instalments, the last payment to be made on 1 April 2010. BOQ remains the owner of the tanks which it now rents to Mr and Mrs Conway pursuant to a new rental agreement. The amount of $80,000 is effectively the new rental. On payment of the final instalment of rent, the 33 tanks will be transferred to Mr and Mrs Conway. Thus, the position is that Mr and Mrs Conway are renting the tanks and are entitled to possession of them." His Honour observed that there was no dispute about any of the facts so recounted. 62 There was in evidence before his Honour a tax invoice dated 2 May 2005 issued by the Leasing Centre to Old Mudgee. The tax invoice records the constructive delivery of 33 tanks from Old Mudgee to the Leasing Centre and a delivery back to Old Mudgee. The price of the tanks, including GST is shown as $220,000. 63 That statement in the tax invoice suggests that the tanks might have been in the possession of Old Mudgee prior to 2 May 2005 and the contract between BOQ, through the Leasing Centre, and Mr and Mrs Conway was some kind of refinancing arrangement. The evidence, however, was silent as to this issue. Mr Conway did not give any evidence as to when the tanks were first installed on the Winery Land. His case was advanced before Debelle AJ on the basis that he (first) acquired rights to the 33 tanks by the 2 May 2005 rental agreement. 64 Mr Sirtes pointed out that three witnesses whose evidence was adduced by Mr Conway testified that the tanks, or at least a significant number of them, were on the Winery Land in 2004. He submitted that on the basis of that evidence, the tanks that were on the Winery Land in 2004 could not be the same tanks rights to which Mr Conway acquired by the rental agreement with BOQ of 2 May 2005. 65 It is undoubtedly so that Mr Conway's case on this issue was based on the proposition that he first acquired rights to the tanks by the agreement with BOQ of 2 May 2005. 66 Mr Hall submitted that the Court should infer, firstly, that the lease agreement of 2 May 2005 was simply a "lease-back" arrangement, and secondly, that the 33 tanks the subject of the agreement with BOQ of 2 May 2005 were on the Winery Land before then. While that may be the case, there is insufficient evidence from which that inference can reliably be drawn. 67 There were other grounds on which Mr Sirtes submitted that his Honour erred in finding that the 33 tanks, the subject of the BOQ agreement of 2 May 2005, were the same tanks referred to in Annexure B of the Sale Agreement. It is neither necessary nor desirable to discuss these matters as, in my view, the issue relating to the 33 tanks in fairness, should be resolved by way of trial. In my opinion, Mr Sirtes' argument based on the evidence that the tanks claimed by Mr Conway were on Winery Land in 2004 is sufficient to create a triable issue. This is not a matter that his Honour discussed in his reasons and in my view he erred thereby. The 71 barrels of wine containing 21,000 litres of a 2006 red vintage 68 I have set out the reasoning of Debelle AJ which led him to conclude that the uncontroverted evidence established that the 71 barrels were a different stock of wine to the 175,000 litres of wine sold by the receiver to Eurunderee and that the 71 barrels were stored separately from the 175,000 litres. 69 The only argument that Mr Sirtes raised in submitting that his Honour was wrong in his conclusion on this issue was based on the Sale Agreement of 24 December 2007. I have mentioned that the Sale Agreement had two annexures attached to it, Annexure A and Annexure B. Annexure A was a list of the items, the subject of the sale to Eurunderee. Annexure B was a list of items excluded from the sale. One item in annexure A (numbered 1-68) is "139 oak barrels" described as "assorted, each 225 litres" (White 515). Mr Sirtes submitted that the existence of this item, on its own, in some way refuted Mr Conway's evidence that there were two separate quantities of wine, one of 175,000 litres and one of about 21,000 litres (that is, 21,300 litres), stored separately. I have difficulty in understanding this argument, which I would not uphold. 70 Mr Sirtes then referred to clause 52.1 of the further conditions to the Sale Agreement, which recorded that "wine stock" was included in the assets sold. Clause 30.1 of the Sale Agreement provided "wine stock means the stock of wine stored at the property at completion being not less than 175,000 litres". Mr Sirtes submitted that the Sale Agreement did not expressly exclude the 21,300 litres of wine. He submitted that it should be inferred that the 21,300 litres to which Mr Conway referred was included in the 175,000 litres mentioned in cl 30.1 of the Sale Agreement. 71 Debelle AJ pointed out at [25] – [26] that there was no evidence contradicting Mr Conway's evidence that the 21,300 litres of wine were of a different quality to the 175,000 litres mentioned in cl 30.1 and were stored separately. In addition, Mr Conway testified that in December 2006 and in January 2007 he purchased 136 barrels of red wine from an independent supplier for "Heritage Estate", a name under which he and his wife carried on business. Between December 2006 and January 2007 Mr Conway paid the supplier $20,131.25 for the wine. According to Mr Conway, shortly before 26 March 2007, when the receiver was appointed to Old Mudgee, he moved 71 barrels of that wine to the Winery Land now owned by Eurunderee. 72 Mr Sirtes accepted that, by reason of the evidence before Debelle AJ, the case before his Honour proceeded on the basis that, on the handover from the receiver to Eurunderee, there were at least 196,000 litres of wine on the Winery Land. This gave credence to Mr Conway's evidence that, while Eurunderee owned 175,000 litres of premium grade red wine, the balance belonged to him. There was no evidence from the appellants refuting Mr Conway's testimony in this respect. In my view, in the absence of such evidence, there is no cogent answer to the reasoning of Debelle AJ. 73 In my opinion, the appellants have not shown that Debelle AJ was wrong in concluding that summary judgment should be granted in regard to the 71 barrels of wine containing some 21,000 litres of 2006 vintage red wine. The remaining items 74 The appellants' principal challenge to his Honour's finding that there should be summary judgment in regard to the remaining items was directed to his finding that it was implicit in Mr Conway's uncontroverted evidence that he was the owner of the remaining items. The appellants submitted that such an inference should not be drawn in summary judgment proceedings. 75 The principal difficulty with this argument is that Mr Conway testified that, at a time when he had possession of the remaining items, he took them onto the Winery Land. As Handley AJA observed during the course of the hearing, "possession is prima facie proof of title [to] chattels, and there is nothing against it". Mr Conway's evidence that he took the remaining items onto the Winery Land was not challenged. As Debelle AJ observed, "Conway's uncontroverted evidence is that he placed all of the remaining items on the winery land". [36]. His Honour pointed out that none of the remaining items was the subject of sale by the receiver (and none was included in annexure A to the Sale Agreement). Further, his Honour drew attention to a letter that Mr Conway wrote on 1 December 2008 stating that the remaining items belonged to him and his wife. This was not refuted. 76 Mr Critchley was Mr and Mrs Conway's accountant for more than 20 years and prepared their personal taxation returns and taxation returns for Old Mudgee as well as their financial statements. Mr Critchley was well qualified to refute Mr Conway's testimony in relation to the remaining items but he did not. 77 I am not persuaded that his Honour erred in ordering summary judgment in regard to the remaining items. Proposed orders 78 During the course of the hearing Mr Hall, on behalf of Mr Conway, undertook to the Court that Mr Conway would make no claim for damages for detention and conversion against any party other than Mr Whalley and Ms McLean. 79 Accepting that undertaking, I would propose the following orders: (a) I would grant leave to appeal as sought by the appellants. (b) I would uphold the appeal by setting aside the orders made by Debelle AJ to the extent that they bear on the 33 wine storage tanks. (c) Save to the extent that the orders made by his Honour bear on the 33 wine storage tanks, I would dismiss the appeal against the orders he made. (d) I would order that the issues relating to the 33 wine storage tanks proceed to trial together with the other issues that remain in the case. (e) Each party was partially successful and I would make no order as to the costs of the application for leave to appeal and the appeal. 80 TOBIAS JA: I agree with Ipp JA. 81 HANDLEY AJA: I agree with Ipp JA. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.