Singleton Earthmoving Equipment Hire Pty Ltd v Singleton Earthmoving Pty Ltd (In Liq)

[2005] NSWSC 1334

CITATION:	Singleton Earthmoving Equipment Hire Pty Ltd v Singleton Earthmoving Pty Ltd (In Liq) [2005] NSWSC 1334
HEARING DATE(S):	15 December 2005
JUDGMENT DATE :	16 December 2005
JURISDICTION:	Equity Division
JUDGMENT OF:	Windeyer J at 1
DECISION:	Judgment for plaintiff for $121,726.33.

PARTIES:	Singleton Earthmoving Equipment Hire Pty Limited (Plaintiff) Singleton Earthmoving Pty Limited (In Liquidation) (First Defendant) Stuart Karim Ariff (Second Plaintiff)
FILE NUMBER(S):	SC 1251 of 2005
COUNSEL:	Mr R R I Harper SC (Plaintiff) Mr D Allen (Defendants)
SOLICITORS:	Dutton Lawyers (Plaintiff) Catalyst Legal Pty Limited (Defendants)

LOWER COURT JURISDICTION:

- 5 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

FRIDAY 16 DECEMBER 2005

1251/05 SINGLETON EARTHMOVING EQUIPMENT HIRE PTY LIMITED V SINGLETON EARTHMOVING PTY LIMITED (IN LIQUIDATION) & ANOR

JUDGMENT on damages

1 On 30 September 2005 I determined the plaintiff (SEEH) was entitled to possession of three items of earthmoving equipment which the defendant (SE), a company in liquidation, had through its liquidator taken into possession. I stood over the question of damages for wrongful detention and the issues on the cross-claim. This judgment deals with those issues and costs.

2 The evidence on damages is to say the least sparse. However, the evidence of Mr Wood in his affidavit sworn 3 June 2005 has not been challenged and I am satisfied that two of the machines would be continued to be used as they were when seized but that SEEH would have hired them to another company controlled by Mr Wood namely, Quensor, which would have on-hired them to the original contractors. The third machine would on the evidence have continued under the contract to Roche Mining through Quensor as intermediary.

3 The machines were charged out on the basis of an hourly rate for time in operation. It is reasonable to accept the rates and working hours proved for the substitute machines hired to the operators through Quensor. The evidence of those hours up to the end of May 2005 gives the following figures.

Item Charge Hours Amount

Excavator $45 888.5 $ 39982.00
D5 Dozer $45 841.5 $ 37867.50
Dresser Dozer $45 505 $ 22725.00
Total $100574.00

The income lost proved in the same way for the month of September 2005 is $17,396.

4 There is no direct income proved in the same manner for the months of June, July and August 2005. However, there is evidence that the contracts continued so that the replacement machines continued to operate. As the plaintiff has not provided proper evidence an assessment should be made on a reasonable basis erring on the side of the defendant. For that I take the second lowest monthly use figures provided.

5 For the excavator the figure is 150 hours a month. For the D5 Dozer 90 hours and for the Dresser Dozer 34 hours.

6 The figures are as follows:

Item Rate Hours Total
Excavator $45 150 x 3 = 450 $20,250
D5 Dozer $45 90 x 3 = 270 $12,150
Dressing Dozer $45 34 x 3 = 102 $ 4,590
$36,990

The brings a gross loss of income of $ 100,574.00
$ 17,396.00
$ 36,990.00
$ 154,960.00

7 The machines were hired on a dry hire basis. Fuel and operators wages were paid by the hirer. There were, however, expenses of maintenance contracts and insurance paid by SEEH. Once again there is no evidence of this although the expense item is conceded by counsel for the plaintiff who put forward as an estimate, but really a guess, of figures of between $5.50 and $6.50 per operating hour. No basis was stated for this. This estimation was between about 12% and 15% of income. I intend to adopt an expense percentage of 20% once again because the plaintiff had the opportunity of presenting proper evidence but failed to do so. Caution requires a conservative approach.

8 80% of $154,960 is $123,968. From that should be deducted $4,509.74 paid by the Liquidator to pay out the lease on the excavator resulting in a figure of $119,458.26. To that should be added interest at court rates 9% from 1 October 2005 amounting to $2,268.07. The final figure is $121,726.33.

9 The plaintiff is entitled to judgment against the first defendant for that amount. I give leave to enter judgment and to enforce such judgment. This is required pursuant to earlier orders of Campbell J. The liquidator was acting as agent for the company. He had a basis for taking the actions he took. The judgment should not be against him.

Cross-claim

10 The pleaded cross-claim is for $283,293.41 for moneys agreed to be lent by SE to SEEH. The sole basis for the claim is a report as to affairs signed by Valda Johnson showing a loan of $274,955 it seems at 30 June 2004 and a general ledger account for SE showing additional loans of $8,337.58 to the date of appointment of administrator. While the statement in the report as to affairs is an admission, for the reasons I set out in my earlier judgment I do not think it can be relied upon. It is clear there were major transactions between the companies to be adjusted through their accounts. There is no basis upon which it could be held the figure of $274,955 was correct as it came from documents showing the same figures for the year ended 30 June 2003 and 30 June 2004. That could not have been correct.

11 Even if the figure of $274,955.83 were correct, and it was accepted by Mr Davies of Messrs. Dillon & Ellborn accountants for SEEH as a starting point for some of his evidence, that evidence was that by 28 September 2004 there was a balance due by SE to SEEH on loan account. Whether all the figures put forward by Mr Davies can be accepted must be somewhat doubtful in that he relied on what was supplied to him by Mr Wood but his evidence had a firmer basis than did the admission in the RATA. What is clear is that the cross-claimant has not established any amount due on loan account from SEEH to SE. The cross-claim should be dismissed.

Costs

12 As the plaintiff has succeeded on both claim and cross-claim it should have an order for costs against the first defendant as liquidator was acting as agent for the company in liquidation and his conduct was not improper. The order for costs should be against the company and not against the liquidator personally.

1. Judgment for the plaintiff against the first defendant for $121,811.38.

2. Judgment for the second defendant on the plaintiff’s claim with no order as to costs.

3. Cross-claim be dismissed.

4. First defendant to pay plaintiff’s costs of the proceedings.

**********