Rapid Metal Developments (Aust) Pty Ltd v Rildean Pty Ltd [2009] NSWSC 571

Rapid Metal Developments (Aust) Pty Ltd v Rildean Pty Ltd [2009] NSWSC 571

RMD proved that 26,731 items of scaffolding outstanding on hire to Rildean remained in Rildean's possession at the 18 July 2002 control day, and the defendants therefore became controllers of that third party property. Rildean's prior breach in on-hiring the scaffolding did not prevent s 419A from applying, and it would not be just to excuse the defendants under s 419A(7) because they continued use of RMD's scaffolding for the financial benefit of Navmost without recompense to RMD. The unauthorised commingling did not defeat RMD's entitlement. The licence agreement permitting ACS to use the scaffolding and the later sale agreement were dealings inconsistent with RMD's immediate right to...

Jurisdiction
Australia
Judgment Date
26 June 2009
Procedural Posture
Civil Proceedings Concerning Controllers' Liability Under S 419 a Corporations Act 2001 (cth) and Conversion of Scaffolding / Principal Judgment After Hearing; Quantum and Costs to Be Heard
Outcome
Judgment for the plaintiff; defendants liable under s 419A of the Corporations Act 2001 (Cth) and for conversion, with quantum and costs reserved for further hearing.
Legal Topics
['receivers, Controllers and Managers' 'liability of Controller Under Pre Existing Agreement About Third Party Property' 'conversion' 'commingling of Goods' 'mortgagee in Possession']
['corporations' 'torts' 'insolvency'] ['receivers, Controllers and Managers' 'liability of Controller Under Pre Existing Agreement About Third Party Property' 'conversion' 'commingling of Goods' 'mortgagee in Possession']

Case Brief

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Procedural Posture

Civil Proceedings Concerning Controllers' Liability Under S 419 a Corporations Act 2001 (cth) and Conversion of Scaffolding / Principal Judgment After Hearing; Quantum and Costs to Be Heard

Legal Issues

  1. 1 ['Whether Rildean was in possession of scaffolding owned by the plaintiff on 18 July 2002 so that the defendants assumed possession on appointment as agents for the mortgagee in possession.' 'Whether the defendants were liable under s 419A of the Corporations Act 2001 (Cth) for rent and other amounts accruing under the prior hire agreement.' 'Whether any breach by Rildean of the hire agreement by on-hiring scaffolding prevented s 419A from applying.' 'Whether the defendants should be excused from liability under s 419A(7).' "Whether commingling of the plaintiff's scaffolding with other scaffolding affected the plaintiff's entitlement." 'Whether the licence agreement of 8 August 2002 and sale agreement of November 2004 amounted to conversion.' 'Whether actual physical interference with goods was necessary to establish conversion.']

Ratio Decidendi

RMD proved that 26,731 items of scaffolding outstanding on hire to Rildean remained in Rildean's possession at the 18 July 2002 control day, and the defendants therefore became controllers of that third party property. Rildean's prior breach in on-hiring the scaffolding did not prevent s 419A from applying, and it would not be just to excuse the defendants under s 419A(7) because they continued use of RMD's scaffolding for the financial benefit of Navmost without recompense to RMD. The unauthorised commingling did not defeat RMD's entitlement. The licence agreement permitting ACS to use the scaffolding and the later sale agreement were dealings inconsistent with RMD's immediate right to...

Court Disposition

Judgment for the plaintiff; defendants liable under s 419A of the Corporations Act 2001 (Cth) and for conversion, with quantum and costs reserved for further hearing.

Orders

  • ['Judgment will be entered in favour of the plaintiff.' 'The Court will hear the parties on the issues of quantum and costs.']