HEARD : 3-7, 10, 11 DECEMBER 2001, 17-19, 22-26, 29-31 JULY, 2 AUGUST 2002

Conversion of mining plant and equipment - Measure of damages - Whether includes transport costs to a remote site - Whether includes costs of installing plant and equipment on remote site - Whether measure of damages is sale value of individual items of plant and equipment if no intention to use

Standing to sue for conversion - Whether any plaintiff in possession or entitled to immediate possession of plant and equipment in remote location

Mining Act 1978 (WA), s 119

Supreme Court Act 1935 (WA), s 32, s 142

Judgment for the second, third and fifth plaintiffs

First Plaintiff : Mr N W McKerracher QC & Mr C S Gough

Second Plaintiff : Mr N W McKerracher QC & Mr C S Gough

Third Plaintiff : Mr N W McKerracher QC & Mr C S Gough

Fourth Plaintiff : Mr N W McKerracher QC & Mr C S Gough

Fifth Plaintiff : Mr N W McKerracher QC & Mr C S Gough

Adamson v Hayes [1973] HCA 6; (1973) 130 CLR 276

Barrymores Pty Ltd v Harris Scarfe Ltd (Administrators Appointed) (Receivers & Managers Appointed) & Ors [2001] WASC 210

Brilawsky v Robertson (1916) 10 QJPR 113

Brookfield v Davey Products Pty Ltd (1996) 14 ACLC 303

Carob Industries Pty Ltd (in liq) v Simto Pty Ltd [2000] WASCA 362

Caxton Publishing Company Ltd v Sutherland Publishing Company [1939] AC 178

Cigna Insurance Asia Pacific Ltd v Packer [2000] WASCA 415; (2000) 23 WAR 159

City Motors (1933) Pty Ltd v Southern Aerial Super Service Pty Ltd [1961] HCA 53; (1961) 106 CLR 477

Grimes Holdings Pty Ltd v Sceghi, unreported; SCt of WA (White J); Library No 930453; 20 August 1993

Harvey Shire Council v Marist Brothers Community Inc (1993) 82 LGERA 406

Hellwig v Roche (1994) 10 SR (WA) 278

Howe v Teefy (1927) 27 SR (NSW) 301

Jennings v Credit Corp Australia Pty Ltd [2000] NSWSC 210; (2000) 48 NSWLR 709

Marist Brothers Community Inc v Harvey Shire Council (1994) 14 WAR 69

Olga Investments Pty Ltd v Citipower Ltd [1998] 3 VR 485

Owners of Dredger Liesbosch v Owners of SS Edison [1933] UKHL 2; [1933] AC 449

Parker v British Airways Board [1982] QB 1004

Pendal Nominees Pty Ltd v Lednez Industries (Australia) Ltd (1996) 40 NSWLR 282

Ronex Properties Ltd v John Laing Construction Ltd [1983] QB 398

Sorna Pty Ltd v Flint [2000] WASCA 22; (2000) 21 WAR 563

Swan Resources Ltd v Southern Pacific Hotel Corporation Energy Pty Ltd [1983] WAR 39

UTSA Pty Ltd (in liq) v Ultra Tune Australia Pty Ltd (1996) 14 ACLC 1610

1 The plaintiffs' claim, in the alternative, for damages for conversion of mining plant and equipment removed from the Cashman Mine Site by or on behalf of the defendant ("Esanda") in March 1988. The Cashman Mine Site comprises a number of leases and licences issued under the Mining Act 1978 (WA) ("the Tenements"). They are situated in a relatively remote location north of Meekatharra.

2 The trial commenced on 3 December 2001. After the plaintiffs had opened their case, they made an application for leave to amend the statement of claim to put forward a case based on the evidence they proposed to lead. The proposed amendments related to, inter alia, the central question of whether at the material time in March 1988 the first plaintiff, Brybay Pty Ltd (in liquidation) ("Brybay") was entitled to immediate possession of some of the plant and equipment. Following lengthy argument I granted the plaintiffs' application for leave which necessitated the adjournment of the trial. The adjourned hearing commenced on 17 July 2002.

3 The plaintiffs in their pleading identify three categories of plant and equipment which they say Esanda removed from the Cashman Mine Site in March 1988. They are the:

4 The plaintiffs claim that the Klyque Equipment, the Esanda Equipment and the Balance Equipment together comprised a gold gravity treatment and leaching plant. There was no dispute between the parties as to the items constituting the Klyque Equipment. Further, Esanda admitted that it unlawfully removed the Klyque Equipment from the Cashman Mine Site and subsequently sold it.

5 Esanda also admitted that it unlawfully removed a set of twin Ajax diesel recovery pumps from the Cashman Mine Site. Otherwise Esanda denies the plaintiffs' claims in respect of the Balance Equipment.

6 It is accepted that Esanda lawfully repossessed the Esanda Equipment. However, there is a dispute as to the equipment that falls within the description.

7 Brybay claims it was in possession or entitled to immediate possession of all of the equipment on the Cashman Mine Site in March 1988 pursuant to an oral agreement made in May 1987 between the registered holder of all the shares in the Tenements, Geoffrey Norman Frean and Brybay. It is necessary to set out in full the oral agreement relied on. It is pleaded in par 5 of the statement of claim which provides:

"5. At all material times, as a result of an oral agreement ('the Oral Agreement') the First Plaintiff was entitled to be the holder and operator of Gold Mining Leases situated North of Meekatharra in Western Australia known as the Cashman Leases ('the Mine Site').

(a) By an oral agreement between Geoffrey Norman Frean, as registered proprietor of the Mine Site on the one part and the Second Plaintiff on behalf of the First Plaintiff of [sic] the other part, made in Perth in May 1987 and evidenced in writing shortly after-

(i) Frean agreed to transfer his interest in the Mine Site including all plant and equipment thereon to the First Plaintiff;

(ii) the transferred interest was to remain mortgaged to the ANZ Bank;

(iii) Frean was to use his best endeavours to remove certain caveats lodged in respect of part of his interests in the Mine Site;

(iv) Frean was to be a shareholder in [Brybay] and was to continue, on behalf of the [Brybay], to act as the General Manager of the Mine Site;

(v) [Brybay] in return would continue the development of the Mine Site and would raise funds or cause funds to be raised to be applied to that purpose.

(vi) [Brybay] and/or all plaintiffs on behalf of [Brybay] advanced funds or caused funds to be advanced after the date of the Oral Agreement and for the development of the Mine Site.

8 Esanda denies the allegations and says that if there was an agreement as alleged it did not create any interest in the Tenements as it was not in writing as required by s 119 of the Mining Act 1978 (WA).

9 At all material times until August 1987 Klyque Pty Ltd ("Klyque") was the lessee of items of equipment leased by Australian Guarantee Corporation Ltd ("AGC") and Auckland Finance Pty Ltd ("Auckland Finance") as lessors which together constitute the Klyque Equipment. By agreements in writing in August 1987, Klyque assigned to Brybay all its interest in the items leased from Auckland Finance. Brybay also relies on these assignments.

10 Further, the plaintiffs claim that by a deed made in November 1997 Brybay assigned all causes of action in relation to these proceedings to the second and third plaintiffs, Charles Stringer and John Atkinson respectively (the "Brybay Assignment").

11 In the final version of the statement of claim there is no pleaded basis for a claim, or any claim to relief, by the fourth plaintiff, Paul White. Accordingly, his action must be dismissed.

12 The questions in issue which arise on the pleadings are:

(i) whether at the material time in March 1988 Brybay (or any of the other plaintiffs) was in possession, or entitled to immediate possession, of the Klyque Equipment and the Balance Equipment;

(ii) what plant and equipment Esanda removed from the Cashman Mine Site in March 1988;

(iii) whether the plaintiffs (or any of them) are entitled to the replacement value of the gravity treatment and leaching plant or alternatively the market value of each item of plant and equipment unlawfully removed.

13 In closing, Esanda raised questions as to whether Brybay had commenced and continued the action without authority and whether Messrs Stringer and Atkinson could claim in this action because, it is said, their relevant interest arose after it commenced.

14 Conversion involves dealing with goods or chattels in a manner repugnant to the immediate right of possession of the person who has the property or special property in them: Penfolds Wines Pty Ltd v Elliott [1946] HCA 46; (1946) 74 CLR 204 at 229; Finesky Holdings Pty Ltd v Minister for Transport for Western Australia [2001] WASC 87 at par 162.

15 There must be an intentional dealing with the goods and that dealing must impair the plaintiff's rights to them. However, there is no requirement that the defendant should intend to deny the plaintiff's right to the goods: Rendell v Associated Finance Pty Ltd [1957] VicRp 88; [1957] VR 604; Fleming J G, "The Law of Torts" 9th ed, LBC Information Services, Sydney, 1998 at 62.

16 It is not in dispute that Esanda's conduct in relation to the non-Esanda equipment which it removed from the Cashman Mine Site in March 1988 constituted a conversion of that plant and equipment. The issues in dispute include whether the plaintiffs or any of them have standing to sue, and if so the appropriate measure of damages.

17 A person has title to sue for conversion if, at the time of the conversion, that person had actual possession or the immediate right to possession of the goods. Ownership is not determinative. For example, an owner of goods will not have a right to sue in conversion if it is not in possession or immediately entitled to possession of the goods such as where goods have been bailed for a term: Penfolds Wines Pty Ltd (supra) at 229; Glen v Abbott [1880] VicLawRp 188; (1880) 6 VLR (L) 483.

18 The immediate right to possession of goods must derive from a proprietary or possessory interest in the goods. An equitable proprietary interest in goods will suffice: Maynegrain Pty Ltd v Compafina Bank [1984] 1 NSWLR 258.

19 However, a mere contractual right to possession does not grant, without more, sufficient title to sue in conversion: Jarvis v Williams [1955] 1 All ER 108 at 109. The nature of a lessee's interest in a financial lease was considered in On Demand Information Plc v Michael Gerson (Finance) Plc [2001] 1 WLR 155 at 171. Robert Walker LJ said:

"Contractual rights which entitle the hirer to indefinite possession of chattels so long as the hire payments are duly made, and which qualify and limit the owner's general property in the chattels, cannot aptly be described as purely contractual rights."

20 That observation was approved by the House of Lords in On Demand Information Plc (In Administrative Receivership) v Michael Gerson (Finance) Plc [2002] UKHL 13; [2002] 2 WLR 919 at 927 - 928. No-one in this action has suggested that Klyque's interest in the equipment leased from AGC or Klyque or Brybay's interest in the equipment leased from Auckland Finance did not confer standing to sue for conversion. Accordingly, it is unnecessary to consider that matter further.

21 For the purposes of the law of conversion, possession means actual possession. Actual possession requires effective occupation or control over the item in question: Pollock F and Wright R S, "An Essay on Possession in the Common Law", Clarenden Press, Oxford, 1888 at 12.

22 To determine what is sufficient control in a particular case depends on the circumstances, especially the nature of the thing dealt with and the manner in which things of the same kind are used and enjoyed. In considering whether acts of alleged occupation or control are effective or sufficient it is necessary to consider:

(a) the kinds of physical control and use of which the thing in question is practically capable;

(b) whether there was an intention to possess the thing in question;

(c) whether another person, able in law or in fact to object to the occupation or control, has consented or acquiesced to it.

23 Inferences may be drawn as to who is in actual possession of goods by reference to the ownership of the goods themselves or the land on which the goods are situated. As stated by Pollock and Wright (supra) (at 38):

"It will hardly be denied that a man is in possession in fact, as well as possessor in law, of his own goods in the house which he occupies, whether he be in the room at a given moment, or even in the house, or not. And outside the house the same thing seems to be true. There is no magic in four walls. The chair on the lawn, a table in a summer-house, are perhaps easier to meddle with than the tables and chairs inside the house, but they remain under the master's control in fact unless and until some other person exercises a more effective control."

24 Voluntary transfer of possession of goods is by way of delivery, which can be actual or constructive. Possession of the key or other means of access to goods may give actual possession of the item if in the circumstances there is sufficient physical control over those items: In re Wasserberg; Union of London & Smiths Bank Ltd v Wasserberg [1915] 1 Ch 195.

25 The normal measure of damages in conversion is the full value of the chattel at the time of the conversion together with any appropriate consequential loss: Halsbury's Laws of Australia, Vol 19, par 315-645.

26 A person with a limited interest in goods may recover the full value from a wrongdoer who has no interest in the goods: The Winkfield [1902] P 42. If the full value of the goods exceeds the value of the plaintiff's limited interest, the excess is held on trust for the owner.

27 The rule of full market value is not absolute. In Butler v Egg & Egg Pulp Marketing Board [1966] HCA 38; (1966) 114 CLR 185 the High Court held that the full market value of the converted goods, in that case eggs sold outside a compulsory marketing scheme, was greater than the damage actually suffered by the defendant and was not recoverable. Taylor and Owen JJ said (at 191):

"But such a result [the full value of the eggs] would not accord with the general principle upon which compensatory damages are assessed, whether in actions of contract or of tort. That principle is that the injured party should receive compensation in a sum which, so far as money can do so, will put him in the same position as he would have been in if the ... tort had not been committed: ... And this principle is as much applicable to actions of conversion as it is to the case of other actionable wrongs. In most cases of conversion it is, of course, obvious that its application will result in the injured plaintiff recovering the full value of the property converted since that will usually represent the loss that he has sustained by the defendant's wrongful act. Hence the statement which appears so often in the books that the general rule is that the plaintiff in an action of conversion is entitled to recover the full value of the goods converted, but this statement should not be allowed to obscure the broad principle that damages are awarded by way of compensation."

"There is no hard and fast rule that the value of the goods at the time of a conversion is always the measure of the damages to be assessed for the conversion. Often the application of such a rule would produce an obviously unjust result -- for example, if goods converted by a defendant had since been recovered by the plaintiff-owner. The true rule is, I think, that stated by Bramwell B. in Chinery v Viall, viz. that the plaintiff is entitled to recover no more than the real damage he has sustained."

29 The normal measure of damages is ordinarily the market value of the goods converted. This is based upon the ground stated by Greer LJ in J & E Hall Ltd v Barclay [1937] 3 All ER 620 at 623:

"Where you are dealing with goods which can be readily bought in the market, a man whose rights have been interfered with is never entitled to more than what he would have to pay to buy a similar article in the market."

30 Where there is a market to purchase goods similar to that which have been converted, the purchase price in the market is the replacement cost. This emerges from the judgments in J & E Hall Ltd v Barclay (supra). In that case the defendant did work for the appellant in erecting and testing a pair of experimental davits. The davits and testing apparatus were subsequently dismantled and kept by the defendant for several years. It then sold it as scrap. There was no current market price at which the goods could have been bought or sold. There was evidence that the plaintiff wanted to use the goods. This was noted by Greer LJ (at 624) and Slesser LJ (at 626). The Court of Appeal held that the plaintiff was not limited to the sale value of the goods (the scrap value) but could recover the cost of obtaining replacements.

"Now, if there had been a market for the davits, to which the appellant could have gone on the day after he was wrongfully deprived of his davits, and bought them at an agreed price, however much lower that might be or however much higher it might be than what he had originally paid for them, he would have been entitled to the cost of replacement by getting them in the market. But, if he cannot get them in the market, what is his position? He must do that which is analogous to getting them in the market, namely, he must go to the only people from whom he can get goods to put him into the same position as he would have been in if his davits had never been taken away from him, that is to say, he must go to the manufacturer and see for what price the manufacturer will supply him with similar goods."

32 In this context, market value is the price at which the converted goods can be replaced. In other circumstances the appropriate measure may be the selling price rather than the buying price of the goods: McGregor H, "McGregor On Damages" 16th ed, Sweet & Maxwell Limited, London, 1997, par 1379, f/n 27; Tom Hopkins International Inc v Wall & Redekopf Realty Ltd [1985] 6 WWR 367; Furness v Adrium Industries Pty Ltd [1996] VicRp 49; [1996] 1 VR 668 at 678 - 681; "Clerk and Lindsell on Torts" 18th ed, Sweet & Maxwell Limited, London, 2000, par 14-99, f/n 88.

33 Ordinarily, damages are to be assessed at the time of conversion. However, that does not mean a subsequent rise in value of the goods can never be awarded. There is no reason why it cannot be recovered as consequential damage if the necessary pre-conditions are established: Empresa Exportadora De Azucar v Industria Azucarera Nacional SA (The Playa Larga) [1983] 2 Lloyd's Rep 171. Each case will turn on its own facts. Where the loss due to a subsequent rise in value is as a result of the plaintiff's delay in acting, the increase may be unrecoverable: Sachs v Miklos [1948] 2 KB 23.

34 Further, payments made by the defendant to, or for the benefit of a plaintiff may reduce the damages provided the benefit of the payment is sufficiently connected with the conversion. For example, where a defendant has applied the proceeds of a converted cheque to discharge the plaintiff's liability to a third party, the payment will be taken into account to reduce the plaintiff's damages: Associated Midland Corporation Ltd v Bank of New South Wales [1983] 1 NSWLR 533; ANZ Banking Group Ltd v Amev Finance Ltd (1989) Aust Torts Reports 80-228.

35 In the ANZ case, the Full Court held that the defendant bore the onus of displacing the prima facie measure of loss. The defendant was entitled for credit to the extent to which the proceeds of the converted cheque were used to discharge the plaintiff's liability to a third party. However, other payments were ignored because they related to a lease agreement and not the conversion, and did not involve a windfall profit to the plaintiff at the expense of the defendant. The ANZ case was cited with approval in ANZ Banking Group Ltd v Hunter BNZ Finance Ltd [1991] VicRp 79; [1991] 2 VR 407.

36 The Cashman Mine Site was located in the Murchison mineral field north of Meekatharra in Western Australia. The Tenements comprised Gold Mining Leases ("GML") 51/2817, 51/2820, 51/2821, 51/2822, Prospecting Licence 51/630 and Miscellaneous Licences 51/12, 51/13, 51/14 and 51/24.

37 At all material times until September 1987 Mr Frean was the registered holder of all of the shares in the Tenements. A company called Afro-West Mining Ltd ("Afro-West") had lodged caveats on the titles to the Tenements, the first of which were registered in July 1986. Further, the Tenements were encumbered by a registered mortgage in favour of the ANZ bank.

38 Mr Frean and his wife operated the Cashman mine in partnership which traded under the name "Mine Alluvials" and, according to Mr Frean, the Tenements and plant and equipment on site were acquired for the partnership.

39 Mr Frean and Mine Alluvials entered into agreements with Esanda between April and October 1985 in relation to the Esanda Equipment. By mid-1986 Mr Frean was under severe financial pressure. He took steps to place the Tenements and the plant and equipment on the market. He arranged for auctioneers to prepare a sales brochure ("the Cashman brochure").

40 The Cashman brochure describes the machinery and plant at Cashman in the following terms:

Service equipment: welders, compressors, generator set, power grease etc

41 By 1986 Mr Frean had known Mr Atkinson for many years and described him as a friend. Mr Atkinson introduced Mr Frean and Mr Stringer. It is not in dispute that in the second half of 1986 Mr Frean negotiated with Messrs Atkinson and Stringer concerning the provision of funds in relation to the Cashman mine. However, there is a dispute between Mr Frean and Mr Stringer as to the nature and effect of those discussions. For present purposes I will confine the description of events by reference to matters disclosed by the documentary trail. Mr Stringer wrote a letter dated 3 October 1986 to Mr Frean proposing that:

- the Tenements be transferred to a new proprietary company;

- his group (comprising, inter alia, Atkinson, White and Stringer) be granted options to 50 per cent of the issued shares of the new company for a period of six months;

- his group would inject initial funds of around $50,000 to $100,000; and

- in the event the mine proved commercially viable, the group would arrange for appropriate funding to allow the business to be fully developed. The proposal also contemplated a moratorium from Mr Frean's major creditors.

42 The offer was varied in a letter dated 22 October 1986 from Mr Stringer to Mr Frean. This proposal was for initial funding of $100,000 and a further $150,000 on the exercise of the proposed share options. It was also proposed that on the exercise of the share options, the new company would be responsible for payment of the existing debts associated with the mining operation and that Mr Frean would receive a salary of $600 per week from the date of any formal agreement. Mr Frean was to be responsible for satisfying any claim by Afro-West the subject of the caveats on the titles.

43 On about 27 October 1986 Mr Stringer and his associates transferred the sum of $15,000 to a Mine Alluvials' bank account.

44 By letter dated 28 October 1986 to Mr Stringer, Mr Frean stated that he wanted the new company to be responsible for the payment of all debts included in four schedules attached to the letter. The first schedule related to, inter alia, an ANZ bank loan (the "First Schedule"). The second schedule refers to Mine Alluvials' creditors (the "Second Schedule"). The third schedule refers to lease payments to Esanda for the Esanda Equipment and a debt to WA Teachers Credit Society Ltd ("TCS") (the "Third Schedule"). The fourth schedule refers to Mr Frean's creditors comprising a further loan from the ANZ Bank and unsecured creditors.

45 In about November 1986 Mr Stringer instructed solicitors Dawson Waldron in Sydney to prepare draft agreements. Part of one draft agreement was in evidence and that was for the sale of the Tenements by Mr Frean to a company described as "Kylque Pty Ltd" which is the same entity as Klyque. A second draft agreement was between Mr and Mrs Frean and Messrs Stringer, White and Atkinson and their respective wives (or partners) in which it was provided that Mr and Mrs Frean would hold all of the issued shares in Klyque and grant options to each of the Stringer interests, the White interests and the Atkinson interests to acquire shares in Klyque. Following the exercise of the options it was contemplated that the option holders would advance a maximum of $100,000 to Klyque for the purpose of commencing a mining operation on the Tenements and if the Tenements were commercially viable, a further sum of $150,000 would be advanced which was to be expended on the development of the Tenements. All the funds were to be advanced by way of loan. Further, Klyque was to pay on behalf of Mr and Mrs Frean the lease payments for the Esanda Equipment and their monthly TCS payments. All other liabilities of Klyque were to be the responsibility of Mr and Mrs Frean. That draft agreement was not acceptable to Mr Frean.

46 Mr Frean signed a letter dated 11 December 1986 to Messrs Stringer, White and Atkinson referring to an agreement reached in respect to the Tenements. There is no mention of any option in this letter. The scheme of the "agreement" was as follows. Mr Frean was to be responsible for resolving the dispute with Afro-West and causing the caveats to be removed from the Tenements. Once the caveats were removed, Mr Frean was to transfer an 80 per cent interest in the Tenements to Klyque, described as a shelf company to be made available by Messrs Stringer, White and Atkinson provided Mr Frean was satisfied that it had no liabilities as at the proposed date of transfer. Mr Frean was to take shares in Klyque before and after the transfer of the 80 per cent interest in the Tenements. He was then to transfer some of those shares to his wife and the Stringer, White and Atkinson interests. The result was that Mr and Mrs Frean and the Stringer group would each hold 50 per cent of the shares in Klyque. Messrs Stringer, White and Atkinson were to advance to Klyque the sum of $100,000 together with a further sum of $35,000 for use by Klyque in leasing plant and equipment for use at the Cashman Mine Site, defined as "the Mine". In the event the ore recovered from the Mine reached a specified rate, Messrs Stringer, White and Atkinson were to provide personal guarantees to enable Klyque to borrow a further $150,000 for working capital purposes. Klyque was to pay the creditors in the Mine Alluvials list (ie the Second Schedule) and negotiate with Mr Frean's other creditors (in the First and Third Schedules) including Esanda, TCS and the ANZ bank to achieve an agreed schedule of repayment in full and final satisfaction of their claims. The payments were not to be treated as loans to Mr and Mrs Frean but as consideration for the transfer of Mr Frean's 80 per cent interest in the Tenements. The letter referred to additional matters.

47 At this time Mr Frean was represented by solicitors Keall Brinsden, in particular by Jennifer Pickworth, a partner of that firm. The signed letter of 11 December 1986 was sent by Keall Brinsden to Mr Stringer. Messrs Stringer and Atkinson signed and returned to Keall Brinsden a letter dated 19 December 1986 which was an amended version of the letter signed by Mr Frean. The amendments included the deletion of a clause providing for two classes of shares, clauses relating to loans to Mr Frean to enable him to pay out Afro-West and a clause requiring the Stringer interests to retransfer their shares in Klyque to Mr Frean in specified circumstances. Otherwise, the arrangements were as set out in Mr Frean's letter of 11 December 1986 as previously described.

48 On 8 January 1987 Keall Brinsden wrote to Messrs Stringer, White and Atkinson seeking amendments to the arrangements the subject of the letter dated 19 December 1986. The proposed amendments do not appear to be of any particular significance. The addressees were requested to sign the faxed copy of the letter acknowledging their agreement to the proposed terms. There is no evidence that the parties complied with that request.

49 The next development in the documentary trail is a letter dated 3 April 1987 from Keall Brinsden to Mr Stringer. The letter refers to a "Sale of Tenements Agreement" and a "Share Sale and Shareholders Agreement" said to be enclosed with the letter. They were not in evidence. The Share Sale and Shareholders Agreement is said to be between "the Freans, Stringers, Whites, Fromon Pty. Ltd., Messrs. Woods and Burgess, Mr. Atkinson and Brybay". This is the first documentary reference to Brybay, Fromon Pty Ltd ("Fromon"), Woods and Burgess. The penultimate paragraph of the letter provides: "We look forward to reciving (sic) your comments on the enclosed agreements at your earliest convenience". There is no documentary or other response in evidence. The next development occurs in May 1987. I deal with that period separately.

50 During the period of negotiations between the parties on the terms of the proposed agreements, Messrs Stringer, White and Atkinson continued to provide funds to Mine Alluvials and directly to Mr Frean's (and Mine Alluvials') creditors.

51 Further, on 3 February 1987, Klyque entered into two written lease agreements with AGC. One lease agreement was for two Inverell foundry pulsating mineral jigs and the other was for a VM diesel 25KVA generator. On 4 March 1987, Klyque entered into two written lease agreements with Auckland Finance. One lease agreement was for a vibrating screen and the other was for a 12 m x 600 mm conveyor. The two jigs, generator, vibrating screen and conveyor together comprise the Klyque Equipment.

52 By agreements in writing dated 1 August 1987 between Klyque, Brybay and Auckland Finance, the parties agreed to the assignment of the leases of part of the Klyque Equipment to Brybay.

53 As a result of a funding dispute, work at the Cashman Mine Site ceased in about August 1987. There was no caretaker on site thereafter. No-one associated with Mr Frean or the plaintiffs visited the site from that time until March 1988 or thereafter it seems.

54 In about September 1987 Mr Frean and Esmeralda Exploration Ltd ("Esmeralda") entered into a joint venture for the exploration and development of the Cashman Mine Site. The joint venture vehicle was Columbia Minerals NL ("Columbia"). The joint venture arrangement provided for the transfer to Columbia of an 80 per cent interest in the Tenements. Mr Stringer, Brybay and others failed in an application in this Court to obtain interlocutory injunctive relief preventing the transfer of the Tenements. In October 1987, Columbia became the registered holder of 80 shares in the Tenements. Mr Frean was the registered holder of the balance of the shares in the Tenements.

55 Brybay was placed in provisional liquidation in November 1987. The provisional liquidator (who became the liquidator in July 1988) did not operate the mining leases (which I take to mean he did not operate the mine) and did not secure or take possession of the plant and equipment at the Cashman Mine Site because of a lack of funds and difficulties in determining who owned the unencumbered plant and equipment.

56 In March 1988 Esanda repossessed the Esanda Equipment and other equipment from the Cashman Mine Site.

57 In October 1988 Esmeralda and Mr Stringer entered into an agreement pursuant to which they agreed to use their best endeavours to secure the entire legal and beneficial ownership of the Tenements. The joint venture vehicle used by Esmeralda and Mr Stringer was Ciciroe Pty Ltd ("Ciciroe") which represented their interests on a fifty-fifty basis. By an agreement in writing dated 23 May 1989 Ciciroe purchased from Mr Frean's trustee in bankruptcy and Columbia's liquidator all of the shares in the Tenements, save for miscellaneous lease 51/24 which was surrendered ("The Ciciroe Agreement"). The recitals in the Ciciroe Agreement acknowledge that Columbia is, or was entitled to become, the registered holder of 80 shares in the Tenements.

58 There is no evidence of any response from Mr Stringer to the letter dated 3 April 1987 from Keall Brinsden to Mr Stringer enclosing two draft agreements.

59 It is not in dispute that Mr Stringer came to Perth in May 1987 to discuss contract related matters. In his witness statement prepared for the adjourned hearing and tendered in evidence, Mr Stringer puts his position as follows. He was unable to recall the precise words of a discussion between himself and Mr Frean in Perth at Mr Frean's house in May 1987 but it was in substance that he referred to the fact that the previous offers and agreements which had been prepared had not yet been executed by all parties and he said to Mr Frean that he wanted to tidy that up. Pars 23 and 24 of Mr Stringer's statement dated 12 July 2002 provide:

"23. In substance Frean told me that he would transfer his interest in the mine site to [Brybay] so that [Brybay] would own the mining operation and could run the mine; he proposed in substance that he would continue to be the General Manager at the mine site but now [for Brybay]. He proposed that Brybay would continue to fund the development of the mine site and would raise funds or cause funds to be raised for that purpose. He confirmed in substance that he would transfer to those investing in Brybay 53 of his shares in the company. He confirmed in substance that Brybay was to be responsible for the mortgage to the ANZ Bank. He told me in substance that he was going to do his best to remove caveats, which had been lodged by Afro west.

24. Again although I cannot recall the precise words, in substance, I agreed with all of this. At or about this time, I informed Frean and Ms Pickworth that those acquiring his shares would be myself (or an entity associated with me) and my wife, White and his wife, Fromon Pty Ltd, J.B. Woods, R.E. Burgess and J.P. Atkinson ..."

60 Mr Stringer says in his statement that shortly after 14 May 1987 he received a letter from Ms Pickworth of that date with the enclosures referred to in that letter. The letter referred to is a letter dated 14 May 1987 from Keall Brinsden addressed to the Directors, Brybay Pty Ltd c/- 16 Ryrie Avenue Como WA 6152 (Mr Frean's address). It is marked to the attention of Messrs Stringer and Frean. The letter is in the following terms:

"Dear Sirs,

Cashman Tenements

We refer to our meeting this morning.

We now enclose:

(1) Agreement between Brybay Pty. Ltd. ('Brybay') and G. Frean ('Tenement Sale Agreement') - evidencing the sale by G. Frean of an 80% interest in the Cashman Tenements (in triplicate);

(2) Agreement for Sale between G. and J. Frean, C.W. and J.E. Stringer, J.W. and C.M.A. White, Fromon Pty. Ltd., J.B. Woods and R.E. Burgess, J.P. Atkinson and Brybay ('Share Sale Agreement') - evidencing the sale by G. Frean of 53 shares in Brybay (in triplicate);

(3) Declaration of Trust for execution by Mrs Frean;

(4) Share Transfers and share scrip for execution and sealing by various parties; and

(5) Minutes of Meetings of Directors of the board of Brybay relevant to:

(i) the Tenement Sale Agreement; and

(ii) the Share Sale Agreement.

Once the documents referred to in (1) and (2) above and the Share Transfer forms referred to in (4) above have been executed/sealed by all relevant parties, will you please return the same to us so that we may attend to stamping.

We have tentatively arranged with Afro-West's Solicitor to withdraw the current tenements (sic) registered against 20/96ths shares in the Cashman Tenements and to replace those with caveats in respect to 20/100ths shares (following the conversion of the shares in the Tenements from 96ths to 100ths by Mr. Frean).

Once the conversion of shares has been finalised we will prepare the transfer forms necessary to effect the transfer of an 80% interest in the Cashman Tenements to Brybay (as contemplated by the Tenement Sale Agreement).

We will prepare the amendment to the Articles of Association of Brybay in the manner contemplated in the Share Sale Agreement and forward the amended version to you shortly."

61 The Tenement Sale Agreement, unsigned, was in evidence. That provided that Mr Frean agreed with Brybay to transfer and assign his "Interest" (defined as 76/96ths shares in the Tenements) subject to the ANZ mortgage for a consideration of $1. It also provided that Mr Frean agreed with Brybay to use his best endeavours to remove or cause the removal of the caveats lodged by Afro-West from the "Balance Interest" (defined as 20/96ths shares in the Tenements) and immediately thereafter to transfer the Balance Interest in the Tenements to Brybay.

62 The Share Sale Agreement in evidence has handwritten amendments on it and is signed by a number of parties. I refer initially to the unannotated typed version of the agreement. It is between Mr Frean and his wife, Mr Stringer and his wife ("Stringer interests"), Mr White and his wife ("White interests"), Fromon, Messrs Woods and Burgess ("Burgess interests"), Mr Atkinson and Brybay. The recitals note that Mr Frean was the proprietor of 99 shares in the capital of Brybay and his wife was the proprietor of one share. The Share Sale Agreement provides that:

(a) Mr Frean agreed to sell 18 shares in Brybay to the Stringer interests, 14 shares to the White interests, 18 shares to Fromon and 3 shares to the Burgess interests (a total of 53 shares);

(b) the new shareholders would cause the articles of association of Brybay to be amended to provide for three classes of shares with different voting rights;

(c) settlement was to take place within 7 days at which time Mr and Mrs Frean would convene and attend a meeting of directors of Brybay to accept and register the transfer of shares, to appoint two persons nominated by the Stringer interests, the White interests and Fromon to be directors of Brybay and to appoint a person nominated by the Stringer interests, the White interests and Fromon to be secretary and public officer of Brybay;

(d) the Stringer interests, the White interests and Fromon agreed to loan to Brybay the sum of $100,000 to be applied by it for working capital purposes (receipt of which was acknowledged);

(e) forthwith from the execution of the agreement the parties were to grant or cause Brybay to grant irrevocable authorities to its bank to debit all periodical payments due by Mr Frean and/or Mrs Frean to any finance company or third party whomsoever in relation to the financial commitments of Mr and Mrs Frean listed in the first schedule to the Agreement (which is the First Schedule to the letter of 28 October 1986 from Mr Frean to Mr Stringer) it being the intention that Brybay make and service all payments due from time to time by Mr and Mrs Frean in relation to those commitments;

(f) immediately following settlement, Brybay would enter into lease and hire purchase agreements in relation to such plant, machinery, equipment and motor vehicles as Brybay shall determine as necessary for the efficient and economical operation of the Plant (defined to mean the gold treatment plant situated on the Tenements), up to a maximum total exposure of $35,000 rental;

(g) the Stringer interests, the White interests, Fromon, Mr Atkinson and Mr and Mrs Frean would use their best endeavours to cause Brybay to raise at minimum a further $150,000 by way of loan for use by Brybay for working capital purposes;

(h) immediately following settlement Brybay would negotiate with Mr and Mrs Frean's creditors listed in the second schedule to the Agreement (which is the Second Schedule to the letter of 28 October 1986 from Mr Frean to Mr Stringer) with a view to agreeing a mutually acceptable repayment schedule in relation to the debts owed to them by Mr and Mrs Frean so as to prevent, inter alia, their bankruptcy and to cause the debts to be repaid as soon as possible with Brybay funds;

(i) if Brybay paid any moneys to any third party for and on behalf of Mr and Mrs Frean in satisfaction of any debts or liabilities owed by them or either of them in relation to the Tenements and the Plant, such moneys were to be deemed to be moneys loaned by Brybay to Mr and Mrs Frean;

(j) the parties acknowledged that Mr Frean was presently and would continue to be employed by Brybay for, inter alia, a weekly gross salary of $600.

63 Although there is a third schedule attached to the Share Sale Agreement (in the same terms as the Third Schedule to the letter on 28 October 1986 from Mr Frean to Mr Stringer), there is no reference to it in the text of the document. There are a number of other differences between the arrangements reflected in these documents and those recorded in the Stringer group's letter of 19 December 1986.

64 Firstly, Mr Frean had to use his best endeavours to transfer the remaining 20 per cent interest in the Tenements (protected by the Afro-West caveats) to Brybay. Secondly, the Stringer group shareholding in Brybay increased slightly above 50 per cent (53 shares out of 100). This may be connected with the introduction of the Burgess interests in the April drafts of the agreements. Thirdly, the creditors to be paid by Brybay and the creditors with whom Brybay was to negotiate to avoid insolvency action are different. Fourthly, the payment of Mr Frean's creditors by Brybay were to be treated as loans not as consideration for the transfer of the Tenements. There is no evidence to explain any of the changes. Further, as the April 1987 drafts were not in evidence it is not possible to identify the progression in the negotiations between January and May 1987.

65 There are a number of handwritten amendments to the Share Sale Agreement. The most important is the addition of a further party, Tarmob Pty Ltd ("Tarmob") and the substitution of Tarmob for the rights and obligations of the Stringer interests. In addition, the shares to Tarmob and Fromon increase from 18 to 19 and the shares to the White interests decrease from 14 to 12. The Share Sale Agreement is executed by Mr Frean, Mr Stringer, Mr White and his wife, Mr Woods, Mr Burgess, Mr Atkinson and sealed by Tarmob, Fromon and Brybay. It is not signed by Mrs Frean or (it appears) by Mrs Stringer. The date of the agreement is inserted in handwriting and is 30 March 1987.

66 According to Mr Stringer, shortly after 14 May 1987 the Tenement Sale Agreement was signed by Messrs Stringer and Atkinson on behalf of Brybay and returned to Keall Brinsden. There is no signed copy of the Tenement Sale Agreement in evidence. Further, he said he arranged for the Share Sale Agreement to be signed by all parties except Mr Frean and caused it to be returned to Keall Brinsden.

67 Mr Stringer was cross-examined concerning the oral agreement. He placed his meeting with Mr Frean at which he said the oral agreement was made at just prior to a meeting he and Mr Frean had with Ms Pickworth at Keall Brinsden. His evidence of his meeting with Mr Frean is as follows:

"What was said in that meeting, and again can I ask you to confine yourself to that meeting? We will come later to other meetings and discussions. I would like you to tell her Honour what was said in that meeting?- - -What was said was that we'd been negotiating in good faith since March 87 and that the agreements hadn't been formally executed. It had come up previously, we had made all the changes and we needed to tidy up the actual arrangements that we'd agreed to.

Yes. Is that all that you were able to tell her Honour of your recollection of the meeting?- - -Yes, and that we were having the meeting with Keall Brinsden to finalise it all.

Do you say nothing else was said at that meeting or you don't recall what else was said at the meeting?- - -I don't recall what else was said at that meeting.

So do you say that what was said at this meeting was that you had prior to that meeting had a number of discussions, correspondence, and that you wished to tidy up the matter. Is that right? - - -That's correct.

What else? - - -I just said I can't recall what else what was said at the meeting.

So all you can recall that was said at the meeting was that you had had a number of discussions, communications, over a period of time and you wished to tidy it up? - - -That's correct.

Was something said in relation to that about going to see Ms Pickworth?- - - Certainly there was.

What was said about that?- - -That we had a meeting with Ms Pickworth to get everything finalised."

68 In cross-examination Mr Stringer was taken to pars 23 and 24 of his witness statement dated 12 July 2002. It was put to him that it was not correct that any of those things were said at the meeting to which Mr Stringer responded:

"I can't remember in specific terms what was mentioned about these. I wouldn't expect them to have been mentioned in detail.

Indeed you don't have any recollection of whether those things were said or not?---That's true."

...

You also said, and you have said on more than one occasion, that you have no recollection of specific terms of the agreement being discussed at that meeting?---That 's true."

69 He said in cross-examination of his meeting with Mr Frean in May 1987:

"At this meeting in May of 1987 was there any discussion about what the terms of the agreement were to be?---Not in specific terms. I can't imagine why there would be.

But your answer is there's no - - -?---I can't recall but I can't imagine why there would be.

You can't recall but to the best of your belief there was no discussion at this meeting in May of 1987 of what the terms of the agreement were to be?---The terms of the agreement were well understood by both parties."

70 Mr Stringer rejected the proposition that he and his associates advanced funds to Mr Frean in anticipation of reaching an agreement. His position was that there had been an agreement from late 1986 which was substantially the same as the agreement in May 1987.

71 In cross-examination Mr Stringer said that the documents referred to in Ms Pickworth's letter had been prepared by the time of the meeting with her.

72 Mr Stringer had prepared and signed written statements for use in the trial listed to commence in December 2001. In those witness statements there is no express reference to an oral agreement made at a meeting with Mr Frean in May 1987. However, he does say that in May 1987 following a variety of discussions Mr Frean agreed to transfer an 80 per cent interest in the Tenements. Mr Stringer had also said in an earlier written statement, which he confirmed in cross-examination to be accurate, that the terms of the Share Sale Agreement reflected the agreement reached between Mr Stringer and Mr Frean in May 1987. Further, he said that he and Mr Frean agreed on behalf of Brybay.

73 Mr Stringer also accepted in cross-examination that he subsequently amended the Share Sale Agreement provided by Keall Brinsden to insert Tarmob as a party and to make other associated amendments. Mr Stringer confirmed that the changes had not been discussed at the meeting with Mr Frean.

74 Mr Stringer's explanation for the fact that the Share Sale Agreement makes no reference to the sale of the plant and equipment at the Cashman Mine Site was that he always thought the plant was part of the Tenements.

75 Mr Stringer lodged a proof of debt in Mr Frean's bankruptcy claiming the sum of approximately $273,000 said to have been for the purchase and construction of mining plant at the Cashman Mine Site. Mr Stringer said he had lodged a proof in Mr Frean's bankruptcy and in Brybay's liquidation to cover all bases.

76 The Australian Securities and Investments Commission ("ASIC") historical company extract for Brybay records that Brybay was registered in New South Wales on 17 February 1987, that Mr Stringer and Mrs Frean were appointed directors on 11 March 1987, that Mr Stringer was appointed secretary on 11 March 1987 and that Mr Atkinson was appointed a director on 30 March 1987. However, a Particulars of Change of Directors form dated 11 March 1987 (but with a date stamp of July 1987) which appears to have been signed by Mr Stringer and lodged by his accountancy company, records that Mr and Mrs Frean were appointed directors of Brybay on 11 March 1987 and Messrs Stringer and Atkinson on 30 March 1987.

77 Other Brybay company documents were in evidence, in particular, minutes of a meeting of directors held on 11 March 1987 resolving to appoint Mr Frean and his wife as directors and Mr Stringer as secretary, a consent to act as director signed by Mr Frean and dated 11 March 1987, a consent to act as director by Mrs Frean also dated 11 March 1987, a resolution said to be of all of the directors (Mr and Mrs Frean) dated 20 March 1987 resolving to convene an extraordinary general meeting for 30 March 1987, a notice dated 20 March 1987 signed by Mr Stringer giving notice of a special resolution dividing the capital into A, B and C class shares, a return showing division or conversion of shares into classes dated 30 March 1987 signed by Mr Frean (but with a date stamp of 6 August 1987) showing that the shares in Brybay had been divided into class A, B and C shares, a resolution of directors (Mr and Mrs Frean) allotting 98 ordinary shares to Mr Frean and finally, minutes of a meeting of directors said to have been held on 30 March 1987. Those minutes provide:

"The Chairman tabled at the meeting an agreement made between Geoffrey Norman Frean, Joan Frean, Charles Wayne Stringer and Jane Elizabeth Stringer, Jonathon White and Colleen Moria Ann White, Fromon Pty Ltd, John Bernard Woods and Edward Burgess, John Phillip Atkinson, Tarmob Pty Ltd and the Company ('the Agreement').

It was resolved to execute the Agreement and accept and register the following transfer of shares in the Company pursuant to the Agreement:

(i) The Transfer of 19 ordinary shares by Geoffrey Frean to Tarmob Pty Ltd;

(ii) The Transfer of 12 ordinary shares by Geoffrey Frean to Jonathon White and Colleen White;

(iii) The Transfer of 19 ordinary shares by Geoffrey Frean to Fromon Pty Ltd; and

(iv) The Transfer of 3 ordinary shares by Geoffrey Frean to John Woods and Robert Burgess."

78 Further, it is noted in the minutes that the Chairman tabled consents by Messrs Stringer and Atkinson to act as directors and that it was resolved to appoint Messrs Stringer and Atkinson directors of Brybay, such appointments to be effective as at midnight.

79 Mr Frean's evidence of the content and outcome of the negotiations with Mr Stringer was to different effect. According to Mr Frean, the substance of what was discussed from late September 1986 was that all agreements had to be in writing and signed by all parties; that the Stringer group contribution would be to commit funds to proceed to the next stage of development towards a public listing as an option payment to be part of the further development of the site; that the Stringer group funds would be used to pay creditors until the project had reached the end of the option period, at which time, funds would be raised for all creditors to be paid in full and then the plant and equipment and Tenements would be transferred into a company to be floated debt free; that if the development of the site foundered Mr and Mrs Frean could walk away with the assets and Messrs Stringer, White and Atkinson would walk away with nothing.

80 It was Mr Frean's evidence that Mr Stringer came to Perth in May 1987 in order to finalise a draft agreement. He said that they had had difficulty in getting any draft agreements so the idea was that they would all meet to try and get some sort of draft from which they could proceed. The whole concept of going to Keall Brinsden, he said, was to get a draft agreement which they would review and consider and from which they could draw up the final agreement and have it properly signed.

81 Mr Frean rejected the proposition that he reached an oral agreement with Mr Stringer in May 1987 or at all. According to Mr Frean, the substance of what was said by Mr Stringer during his May 1987 visit was that Mr and Mrs Frean were to be the only directors and shareholders of Brybay, that Mr and Mrs Frean would transfer all the assets (Tenements and plant and equipment) into Brybay but not before the transfer of sufficient funds by Mr Stringer and his associates to pay out all creditors of Mine Alluvials and when that occurred a percentage of shares in Brybay reflecting joint ownership would be transferred to Mr Stringer and his associates.

82 Mr Frean's recollection of the meeting with Ms Pickworth at Keall Brinsden was that Mr Stringer dictated most of the terms of the agreements to her and she asked questions from time to time. His recollection was that the following day he collected the draft agreements from Keall Brinsden took them home and handed them to Mr Stringer who was leaving Perth that day to return to New South Wales. Mr Frean says Mr Stringer presented to Mr Frean and his wife at their home pro forma Brybay secretarial documents which he asked them to sign so the relevant text could be inserted as and when the need arose without the need to have the documents sent back and forth to Mr and Mrs Frean for signing. Mr Frean said he expressed concern about signing partially completed company secretarial documents but that Mr Stringer persuaded him and said he would not process the documents until the draft agreements had been considered, reviewed and finalised.

83 According to Mr Frean, there was no meeting of directors of Brybay on 30 March 1987, or at any other time at which it was resolved to execute the Tenement Sale Agreement, the Share Sale Agreement, to transfer shares or to appoint Messrs Stringer and Atkinson directors.

84 Mr Frean was clear that he did not sign the Share Sale Agreement after the handwritten amendments had been made to insert Tarmob as a party and the associated amendments. He said there were no further discussions about the agreements after May 1987 because the Stringer group made demands for extra shares.

85 According to Mr Frean, the Stringer group did not provide any funds to Brybay. However, Mr Frean accepted that Mr Stringer and those associated with him had spent at least $300,000 for the development of the plant and equipment at the Cashman Mine Site, most of which funds appeared to have been routed through the Mine Alluvials' Account. The ANZ bank loaned funds to Brybay by way of commercial bills which loan was personally guaranteed by Mr Frean and the Stringer group. I am unable to determine when the finance application was made, when approval was granted or when the advances were made. However, on 26 June 1987 Mr Frean opened an account for Brybay at the Belmont branch of the ANZ bank into which funds were credited. The only authorised signatories were said by Mr Frean to be himself and his wife. There is little evidence to identify what the Brybay funds were used for after the account was opened in June 1987. However, in late June 1987 funds from the Brybay account were transferred to the Mine Alluvials' account which assisted in extinguishing the Mine Alluvials' overdraft. Further, Mr Frean conceded that he received drawings from Brybay although he did not identify the period in which that occurred.

86 It appears from Mr Frean's evidence that the work done at the Cashman Mine Site, after receipt of the funds advanced by the Stringer group, was the construction and establishment of a leaching system and the raising of the trommel and related equipment (in particular the crusher) to incorporate two 42 inch jigs into the plant. That work involved the construction of the plant framework consisting of structural supports, platforming, walkways and stairs. Mr Frean had instructed Linkage Engineering, who had been doing the installation work, to source second-hand steel from auction yards in Perth to construct the framework.

87 In the first half of August 1987 Mr Frean noted that $15,000 had been withdrawn from the Brybay bank account he says without his knowledge or consent. The effect of that, he said, was there were no further available funds to continue work on the Cashman Mine Site which then ceased. Further, Mr Frean gave evidence of a conversation with Mr Stringer on or about 12 August 1987 when Mr Stringer said words to the effect that he, Stringer, was not content with the terms of the draft agreements and that he wanted a significant change which was a larger share allocation for him and his associates for no further consideration. Thereafter, Mr Frean put the matters in the hands of his then solicitor, John Gilmore of Gilmore and Dearn.

88 By letter dated 15 September 1987 from Mr Frean's solicitors Gilmore and Dearn to Mr Stringer, Mr Frean gave notice of termination of the agreements relating to the Cashman Mine Site ("the termination notice"). The termination notice refers to agreements between the parties and the Stringer group's failure to comply with those agreements which allegations are expressly and impliedly based on the provisions of the Share Sale Agreement. Mr Frean was cross-examined concerning affidavits he swore in November 1987 in opposition to an injunction application in the Supreme Court action commenced by Mr Stringer and his group against Brybay, Mr and Mrs Frean, Columbia Minerals and Esmeralda. In one of the affidavits Mr Frean refers to advice from Mr Gilmore to the effect that there was not a validly executed or binding Share Sale Agreement or Tenement Sale Agreement and, even if the agreements had been executed Mr Stringer and his associates had repudiated the agreements and if he accepted the repudiation he would no longer be bound to perform them and would be at liberty to transfer the Tenements to a third party. Based on that advice, he instructed Mr Gilmore to advise Mr Stringer and others that he would accept the repudiation and terminate such agreements as existed.

89 My task is a very narrow one. It is confined to determining whether there was an oral agreement in May 1987 between Mr Frean and Mr Stringer, the latter on behalf of Brybay, evidenced in writing by the Tenement Sale Agreement and the Share Sale Agreement whereby:

(i) Mr Frean agreed to transfer his interest in the Mine Site including all plant and equipment thereon to Brybay;

(ii) the transferred interest was to remain mortgaged to the ANZ bank;

(iii) Mr Frean was to use his best endeavours to remove certain caveats lodged in respect of part of his interests in the Mine Site;

(iv) Mr Frean was to be a shareholder in Brybay and was to continue, on behalf of Brybay, to act as the general manager of the Mine Site;

(v) Brybay in return would continue the development of the Mine Site and would raise funds or cause funds to be raised to be applied to that purpose;

(vi) Brybay and/or all the plaintiffs on behalf of Brybay advanced funds or caused funds to be advanced after the date of the oral agreement for the development of the Mine Site.

90 Although the term "Mine Site" is defined in the pleading as the gold mining leases, it is tolerably clear that it is intended to be a reference to the Tenements and the plant and equipment thereon.

91 Esanda submitted that, having regard to the pleading history of the case, the plaintiffs could not argue for another agreement, whether written, implied or partly written. The plaintiffs accepted this to be the case and agreed that they were confined to their claim of an oral agreement in May 1987 evidenced in writing shortly thereafter. The oral agreement was said to have been made at the meeting between Mr Stringer and Mr Frean at Mr Frean's house just prior to visiting Ms Pickworth at Keall Brinsden on 14 May 1987.

92 It is necessary to make a number of factual findings in relation to events occurring before and after May 1987 before addressing the question of whether there was an oral agreement as pleaded. My findings are as follows. The Stringer group commenced providing funds in relation to the Cashman Mine Site in October 1986 and continued to do so until at least July/August 1987. I accept Mr Frean's evidence that the funds were paid to the Mine Alluvials' account or directly to the creditors of Mr Frean and Mine Alluvials. I also accept Mr Frean's evidence that the Stringer group did not at any stage provide funds directly to Brybay. However, the funds supplied by the Stringer group were applied in connection with the development of the Cashman Mine Site including the plant and equipment thereon.

93 Further, it is common cause that Brybay borrowed $150,000 from the ANZ bank by way of commercial bills which loan was guaranteed by, inter alia, Messrs Frean, Stringer and Atkinson. The bank statements for the Brybay account establish that at the end of June 1987 a significant amount of funds were paid by Brybay into the Mine Alluvials' account which had the effect of, or contributed to, extinguishing Mine Alluvials' overdraft.

94 The documentary evidence establishes that the parties negotiated the terms of the agreements to regulate their relationship in connection with the Cashman Mine Site from August 1986 until May 1987. I find that Mr Frean had authority to act on behalf of his wife in the negotiations. He accepted that he did all the business on behalf of himself and his wife and that he generally ran the business side of the family. Further, Mr Frean's evidence which I accept, that the plant and equipment on site in 1986 belonged to the Mine Alluvials partnership is consistent with the documentary evidence.

95 The documentary evidence supports, and I find, that the Stringer group commenced to provide funds for the development of the Cashman Mine Site before any concluded agreement had been reached. For example, between the Stringer group's offer of 22 October 1986 and Mr Frean's counter-offer in his letter of 28 October 1986, the Stringer group transferred $15,000 to Mine Alluvials' bank account. Further, it is clear from the content and circumstances surrounding the Dawson Waldron draft agreements and Mr Frean's letter of 11 December 1986 that the parties had not at that stage reached agreement on central issues such as the extent and application of funds to be supplied by the Stringer group. However, it is apparent from Keall Brinsden's letter of 8 January 1987 that by that time there were no major obstacles to finalising an agreement. The joint venture corporate vehicle was to be Klyque (then controlled by Messrs Stringer and White, and Atkinson) and in early February and early March 1987 Klyque entered into the leases of the Klyque Equipment. However, as a result of a requirement by Mr Frean that the joint venture corporate vehicle have no liabilities, actual or contingent, at the date of the proposed transfer of the Tenements, Brybay was to replace Klyque.

96 Brybay was registered in February 1987 in New South Wales. Brybay's corporate records, which were kept in the custody of the secretary (Mr Stringer), and the documents lodged with the then National Companies and Securities Commission show that Mr Frean and Mrs Frean consented to and were appointed directors of Brybay and Mr Stringer its secretary on 11 March 1987. The evidence establishes that Mr Frean had instructed Ms Pickworth of Keall Brinsden to prepare a draft agreement with Brybay as the holder of the Tenements at least by April 1987. Further, in a report as to affairs of Brybay dated 17 December 1987 signed by Mr and Mrs Frean as directors, they identified its unsecured creditors to include Linkage Engineering, which had been supplying goods and services in connection with the development of the Cashman Mine Site. Linkage Engineering issued an invoice to Brybay dated 6 April 1987. Further, the evidence establishes that Mr Frean was paid (or owed) drawings or wages by Brybay in connection with his management role at the Cashman Mine Site. I infer from the terms of the Share Sale Agreement in evidence that Mr Frean was paid by Brybay before mid-May 1987. On the basis of this evidence, I conclude that Mr and Mrs Frean were appointed directors of Brybay in March 1987 and that Mr Frean was acting as manager of the Cashman Mine on behalf of Brybay before mid-May 1987.

97 However, I am satisfied that the other company records dated March 1987 associated with the implementation or execution of the Share Sale Agreement have been backdated. The backdated records include the resolution of directors dated 20 March 1987 to convene an extraordinary general meeting for 30 March 1987, the notice dated 20 March 1987 signed by Mr Stringer giving notice of a special resolution dividing the capital into A, B and C class shares, the resolution of directors allotting 98 ordinary shares to Mr Frean and the minutes of a meeting of directors said to have been held on 30 March 1987. Further, I am not satisfied that the events noted in those company records occurred as recorded or at all. I accept Mr Frean's evidence that there were no relevant meetings or resolutions of directors as shown in the company records and that he signed secretarial documents at Mr Stringer's request in anticipation of the finalisation (which I use in a neutral sense) of the written agreements. It follows, and I so conclude, that Messrs Stringer and Atkinson were not directors of Brybay at any time before mid-May 1987. However, I am not satisfied as to when those documents were signed or that Mr Frean signed blank or partially completed documents.

98 I accept Mr Stringer's evidence that he came to Perth in May 1987 for the purpose of finalising written agreements and that he and Mr Frean met with Ms Pickworth with that object in mind. I do not accept Mr Frean's evidence that the purpose of the meeting was to get a draft agreement which the parties would then review and consider and from which final agreements could be signed. The history of the dealings supports Mr Stringer's evidence. In particular, a number of draft agreements had been exchanged and there appears to be no significant areas of disagreement by January 1987. The parties acted consistently with what was contained in that correspondence. The letter of 14 May 1987 from Keall Brinsden refers to "our meeting this morning". I infer from Ms Pickworth's letter that her understanding arising from the meeting on 14 May 1987 was that the documents enclosed with her letter were for execution. The terms of the 14 May letter are to be contrasted with her letter of 3 April 1987 which refers to draft agreements and seeks Mr Stringer's comments. Further, Mr Frean (and most other parties) signed the Share Sale Agreement. There is no evidence that he sought further legal advice before doing so.

99 I also accept Mr Stringer's evidence in cross-examination that he subsequently amended the Share Sale Agreement to insert Tarmob as a party and made the other associated amendments, which amendments had not been discussed previously with Mr Frean. I am not satisfied that the minutes of a meeting of directors allegedly held on 30 March 1987 (which refer to the execution of the Share Sale Agreement, to Tarmob as a party and to the transfer of 19 shares to Tarmob) was enclosed with Ms Pickworth's letter of 14 May 1987. It would be unusual for a typed version of the Share Sale Agreement, which makes no reference to Tarmob, to differ from minutes enclosed in the same letter. Further, Mr Stringer said Mr White (who was not in Perth) had also made handwritten annotations to the Share Sale Agreement.

100 I turn now to the issue of whether there was an oral agreement as pleaded. Much of Mr Frean's evidence concerning what was intended and discussed by the parties up to and including May 1987 (including his evidence that all of Mr and Mrs Frean's creditors had to be paid before the plant and equipment and Tenements would be transferred to a company which would then be floated debt free and if the development of the site foundered Mr and Mrs Frean would walk away with the assets) is not supported by the documentary trail of the negotiations between the parties. I do not accept Mr Frean's evidence on these matters. I accept that it was understood by all involved that there be agreements in writing, particularly having regard to s 119(2) of the Mining Act 1978 (WA). However, I am not satisfied that it was a condition precedent to the formation of any agreement that it be in writing. The conduct of the parties belies such an intention.

101 Further, I do not accept Mr Stringer's evidence-in-chief in pars 23 and 24 of his witness statement dated 12 July 2002 of what was said at the meeting relied on between Mr Frean and Mr Stringer. He frankly conceded in cross-examination that he had no recollection of what was said at the meeting but could not imagine why there would have been discussion at that meeting of the specific terms of the agreement because, he said, they were well understood by the parties. According to Mr Stringer, agreements were in existence as from late 1986.

102 In addition, there are difficulties in reconciling the pleaded oral agreement with the terms of the Tenement Sale Agreement and the Share Sale Agreement said by Mr Stringer to reflect what was orally agreed. Firstly, the pleaded parties differ from the parties to the Share Sale Agreement which is significant, if only because at least some of the plant and equipment was the property of the Mine Alluvials partnership.

103 Secondly, the Tenement Sale Agreement and the Share Sale Agreement do not expressly, or impliedly include a term that Mr and Mrs Frean agreed to transfer their interest in the plant and equipment on the Tenements to Brybay.

104 Thirdly, the Share Sale Agreement as subsequently amended by Mr Stringer imposes rights and obligations on Tarmob instead of the Stringer interests. Fourthly, the Tenement Sale Agreement and Share Sale Agreement contain numerous provisions which go beyond the pleaded oral agreement.

105 The plaintiffs placed great reliance on Mr Frean's termination notice in support of the claim of an oral agreement. However, that conduct is to be seen in the light of Mr Frean's evidence (which I accept) of his legal advice to the effect that there was no binding agreements or if there were, they could be terminated.

106 The plaintiffs also rely on the joint instructions to Ms Pickworth, the execution of the Share Sale Agreement by Mr Frean, the reference in Ms Pickworth's letter to documents "evidencing the agreement" and the signing of the minutes of directors meeting referring to the Share Sale Agreement as evidence of the pleaded oral agreement. However, that conduct is also consistent with Mr Stringer's evidence of earlier agreements, with the detail to be tidied up and formal written agreements finalised in consultation with Ms Pickworth for execution, all parties having had the benefit of the April 1987 drafts.

107 There is evidence to support Mr Stringer's opinion of an earlier agreement, at least some stage after January 1987, between Mr Frean on behalf of himself and his wife and Mr Stringer on behalf of himself and his associates in relation to the latter acquiring an interest in the Tenements through a 50 per cent shareholding in a corporate vehicle to which an 80 per cent interest in the Tenements would be transferred on the financial terms contained in the letter of 19 December 1986 signed by the Stringer group. There is little evidence of events in the period between March 1987 and Mr Stringer's arrival in Perth in mid-May 1987. However, there must have been discussions in that period concerning the changes reflected in the Tenement Sale Agreement and the Share Sale Agreement. It is unnecessary for me to make any finding on whether there were earlier agreements which were varied from time to time as circumstances connected with the performance (or anticipatory performance) of the terms of the agreements (or proposed agreements) changed. However, I accept that Mr Stringer believed that agreements had been reached before he came to Perth. Mr Stringer came to Perth to finalise the written agreements. In those circumstances it is unlikely that a person who believed agreement had already been reached on the central issues would agree those matters again or intend to be bound by matters of detail until the execution of the formal written agreements. It is in that context that Mr Stringer felt free to amend the parties to the Share Sale Agreement without discussion with Mr Frean. I accept that the importance of these amendments is significantly lessened by the Stringer group's performance of most, if not all, of its financial commitments.

108 For these reasons, I am not satisfied that there was an oral agreement made between Mr Frean and Brybay in May 1987 as alleged. Further, even if there was an agreement between the relevant parties, I am not satisfied that the agreement provided for the transfer to Brybay of Mr and Mrs Frean's interest in the plant and equipment on the Tenements. At no stage from the commencement of negotiations did any exchange of communication or draft agreement refer to, or provide for, the transfer of Mr and Mrs Frean's interest in the plant and equipment on the Tenements. The failure to provide for the transfer of Mr and Mrs Frean's interest in the plant and equipment is understandable from a commercial perspective. Around the time of Mr Stringer's first visit to the Cashman Mine Site in late 1986 most of the significant items of plant and equipment on site, at least those directly involved in the collection and treatment of ore, were leased from Esanda. There was never any intention for Mr Frean to assign the Esanda Equipment leases to the corporate vehicle who was to the hold the Tenements. Further, it is apparent from the written negotiations that it was intended that the funds advanced by the Stringer group would be used by the corporate vehicle to develop the gravity treatment plant and leaching system. In the ordinary way, plant and equipment acquired with those funds would belong to the corporate vehicle.

109 I am not persuaded by Mr Stringer's evidence to explain the omission, which was that he thought the plant and equipment on site was part of the Tenements. That may be understandable in relation to some items of the plant and equipment on site but not to much, if any, of the Balance Equipment identified in the Cashman brochure. Mr Frean's evidence that the negotiations related to the plant and equipment as well as the Tenements is linked with his evidence of the broad scheme of the arrangement which has at is core the payment of all Mine Alluvials' debts before the transfer of any property and which, as I have said, is inconsistent with the documentary trail. I am not persuaded that his understanding of the parties' intentions is reliable.

Possession or Immediate Entitlement to Possession

110 The first issue for consideration is whether Brybay was in actual possession of the Klyque Equipment and the Balance Equipment in March 1988. Brybay was in provisional liquidation at that time. The liquidator had made no attempt to take possession or secure the plant and equipment in any way. Mr Frean had ceased to be general manager of the mine site on behalf of Brybay from the time he terminated the agreements. The Cashman Mine Site was in a remote location and had been unattended for some time before and after the repossession action was taken. Neither the mine site nor the plant and equipment was fenced or secured in any way.

111 Mr Frean and Columbia were the registered holders of the Tenements. By virtue of s 119(2) of the Mining Act 1978 (WA), Brybay had no proprietary interest, legal or equitable, in the Tenements: Terrex Resources NL v Magnet Petroleum Pty Ltd (1988) 1 WAR 144.

112 If Mr Frean and Columbia, as owners, occupied the Tenements and manifested an intention to exercise control over them, they would be in possession of the plant and equipment on the Tenements which would prevail against all but the true owner entitled to immediate possession: Chairman National Crime Authority v Flack (1998) 156 ALR 501.

113 I am not persuaded on the evidence that Brybay or any of the plaintiffs can be said to have been in actual possession of the plant and equipment at the Cashman Mine Site at the time of its repossession in March 1988.

114 The next issue is whether any of the plaintiffs were immediately entitled to possession of the Klyque Equipment or Balance Equipment. That in turn depends upon the identity of the owner of the Balance Equipment and whether the lessees of the Klyque Equipment remained entitled to possession under the leases. There is no evidence, and no suggestion by any party, that the lessors were entitled to immediate possession of the Klyque Equipment under the leases. Further, Esanda does not challenge the validity of the assignment of the Auckland Finance leases. In those circumstances, I find that Brybay was entitled to immediate possession of so much of the Klyque Equipment as was leased from Auckland Finance and assigned to Brybay in August 1987. I also find that Klyque was entitled to immediate possession of the remaining Klyque Equipment leased by it from AGC.

115 That leaves the Balance Equipment. Brybay's (and thus Messrs Stringer and Atkinson's) claim to immediate possession of the Balance Equipment is based solely on the May 1987 oral agreement. I have concluded that no such oral agreement as pleaded was reached and further, even if such an agreement had been reached, it did not provide for the transfer of Mr and Mrs Frean's interest in the plant and equipment to Brybay. Accordingly, the plaintiffs' claim to the Balance Equipment fails. However, in the circumstances I will consider and determine the remaining issues unconstrained by this finding.

116 Mr Frean and Mine Alluvials entered into agreements with Esanda between April and October 1985 in relation to the Esanda Equipment. Save for one item, the Esanda Equipment was sold to Esanda and leased back as a means of obtaining additional working capital.

117 Mr Frean dealt with Neville Bugg of the Esanda Cannington office. He supplied Mr Bugg with descriptions of the equipment that he wished to sell and lease back and the description of the item that was to be purchased direct by Esanda. The contractual description of the goods the subject of the various contracts are as follows:-

- "28' Westcrane trommell (sic) incorporating ball mill, scrubber and screen

- RC 50D alluvial mill with conveyors and bins situated at 52 Lionel Street Naval Base

- one only Rolls Royce 80 KVA generator set series A 666 M, Type A 30/81

- Cat D7 F dozer with blade ripper and tree canopy

- one only International Hough 560 with 10 yard bucket."

118 The only equipment purchased directly by Esanda was the alluvial mill (otherwise known as the crusher) and associated equipment. The description of the crusher in the credit contract is consistent with the supplier's invoice which refers to an RC 50D alluvial mill serial no RC 5003, diesel powered with conveyors and bin for $35,000. Esanda was unable to produce the original of the credit contract for the alluvial mill in order to clarify whether the reference to the conveyors and bins had been added some time after the contract had been entered into. I am not persuaded that this is the case because the description on the invoice is consistent with the contractual description.

119 The trommel was built by Mr Frean in the Westcrane warehouse in Kewdale from second-hand steel. The driving mechanism of the trommel was a tandem truck differential with four wheels powered by a 30 horse power three phase electric motor. The trommel's base housed the driving mechanism and front supporting wheels and the base consisted of a truck chassis and wheels so it could be easily transported. According to Mr Frean, the trommel with those items of equipment had been constructed prior to the time he entered into the credit contract with Esanda for the trommel. I am satisfied that the trommel leased by Esanda included the drive and motor assembly described by Mr Frean.

120 The Rolls Royce generator and the Hough loader were the subject of lease agreements. The balance of the Esanda Equipment was the subject of a consumer mortgage. The mortgage clause provides for a mortgage to Esanda of:

" ... all and singular the personal chattels described in Item C of the Schedule which personal chattels are now or are to be situated at and usually kept at the premises described in Item C of the Schedule ... and also all other personal chattels which may at any time be acquired by the Mortgagor being additional parts or substituted parts of the said personal chattels or personal chattels acquired [emphasis added] in substitution for or replacement of the said personal chattels and all the right title interest claim and demand of the Mortgagor to the same (all of which are hereinafter comprised in and referred to under the designation of 'the Goods') unto the Mortgagee..."

The Nature and Purpose of the Plant and Equipment

121 In order to have an understanding of the nature and purpose of what was on site and of what was taken, it is of assistance to have some understanding of the gold treatment process. Mr Atkinson gave evidence on this issue by reference to what was at the Cashman Mine Site in late July/August 1987. I start with the gravity treatment plant. A loader drops ore into an ore receival bin. There is a grizzly or screen on top of the ore receival bin to separate out large rocks. The ore drops to the bottom of the receival bin and then proceeds by way of a feed conveyor attached to the receival bin to another conveyor which takes the ore to the vibrating screen. The vibrating screen has a mesh deck. Undersized product drops to another conveyor. Oversized product goes to the crusher. The crusher crushes the product which then feeds back into the conveyor taking the undersized product. The product on that conveyor then goes to a chute at the back of a trommel and into the trommel. In the trommel, water is added to make a slurry. That product moves towards screens at one end of the trommel. There are two screens, a coarser inner screen and a finer, outer screen. The product that keeps flowing out of the end of the inner screen goes to one chute, then a second chute, then a sieve bin screen, then to another conveyor which takes the product to the tails dump. What goes through the inner screen of the trommel to the outer screen is finer and it then drops onto a large launder under the trommel screens known as a trommel under sump. From the trommel under sump the product goes to two 42-inch Inverell jigs which pulsate. This separates the gold. Heavy particles drop to the cones at the base of the 42-inch jigs. Some of the gold floats on the top of the jigs. The majority of the product goes out of the top of the 42-inch jigs down a launder (with walkway mesh) to the CD sump (otherwise known as the slurry bucket or tails sump). The overflow from the CD sump goes via launders (or chutes) to smaller jigs, being 12 inch and 14 inch jigs. The overflow from these smaller jigs goes back to the CD sump and the product then goes to the vat leaching system. A tails pump pumps product from the CD sump to the vat leaching system.

122 The gravity treatment plant was incomplete and had not operated when Mr Atkinson visited the Cashman Mine Site in August 1987. It is not clear what remained to be done or supplied to complete it.

123 There are three components to a leaching process. First there is a vessel which contains the ore and through which cyanide leach liquors are circulated. At Cashman there were earthen leach vats or dams lined with plastic that performed this function. The liquor dissolves the gold. The second component is a carbon adsorption circuit comprising carbon columns which contain activated carbon which extracts the gold from the leached liquors. The third component is what is described as the carbon allusion circuit which removes the gold from the carbon and produces it in bullion form. This is also known as the stripping process. Mr Frean's evidence was that the stripping of the carbon columns was done in Kalgoorlie.

The Plant and Equipment Removed by Esanda from the Cashman Mine Site in March 1988

124 Paragraph 6 of the statement of claim pleads the plant and equipment said by the plaintiffs to be on and taken from the Cashman Mine Site by Esanda. There is no dispute that the Klyque Equipment was on, and taken from, the site by Esanda. Further, there is no dispute that the Esanda Equipment was on, and taken from, the site.

125 The primary issue in dispute is what, if any, of the Balance Equipment was taken. The Balance Equipment is pleaded in the statement of claim in the following terms:

"Almalgum (sic) barrel, Galligher slurry pump, Linitex (sic) 4" slurry pump with 50 hp motor, Linitex (sic) spares, shaft assemblies, impellers etc., conveyors to crusher and Trommell (sic), spares, belts, etc., Ajax 4" 4KS centrifugal pumps, 4,500 Lt. and 2,000 Lt. fuel tanks, submersible pumps Mono E30-E20, switchboard and cable, 780 metres of 110mm poly pipe, 6 tonne Overhead gantry block and tackle, Store room parts, filters, fittings and plant framework consisting of structural supports, platforming, stairs, various connecting chutes, the leaching plant, wiring and piping and the items characterised as Balance in the further and better particulars of loss and damage filed ... on 21 August 1995, item 4(a) and Service equipment [welders, compressors, generator set, power, grease etc.]"

126 The description of the Balance Equipment in the statement of claim is largely taken from the list in the Cashman brochure. To that list is added "plant framework consisting of structural supports, platforming, stairs, various connecting chutes, the leaching plant, wiring and piping" and the items in the particulars of loss and damage.

127 The particulars describe the Balance Equipment as including:

" ... Conveyor 1, Conveyor 2, Pump, Cyclones, Steelwork 1, Launders/Supports and Platforms, Primary jig collection sump (CD1), Pump, Cyclones, CD sump no. 3, Pump, Cyclone, Tertiary jigs, Tails sump, Tails pump, Tails pipeline, Leach dosing, Cyanide handling plant, Leach return pumps, Column pressure pump, Absorption column, Stripping circuit, Water pumps, Pipeline manifold & valves, Electrical wiring and Contingent costs."

128 The list of equipment identified in the particulars is based upon a list attached to a letter of 9 March 1995 from one of the plaintiffs' valuation experts, Mr Dickson, to the plaintiffs' solicitors Minter Ellison. Mr Dickson's list was of equipment needed for a 100 tonne per hour plant and was based in part on what he could recall seeing at the Cashman Mine Site in mid-1987.

129 My starting point is to identify the Balance Equipment that was actually on site in March 1988 when Esanda's agents arrived to repossess the Esanda equipment. Mr Kevin Briant was acting for and on behalf of Esanda. He attended at the Cashman Mine Site on and from 10 March 1988 to repossess the Esanda Equipment. He took a number of photographs of the plant and equipment on site (the "Briant photographs"). The majority of the Briant photographs are of the gravity treatment plant. They were taken before repossession commenced. Mr Atkinson also took photographs on his visit to the site in around August 1987 (the "Atkinson photographs"). An Esanda employee, Mr Nairn, took photographs of and listed on repossession cards at least some of the equipment repossessed from the Cashman Mine Site. It is possible from these sources to positively identify what was on site in March 1988 and what was taken.

130 The Briant photographs of the gravity treatment plant show each of its major components - the trommel, crusher, receival bin and feeder, vibrating screen, jigs, tails sump and launders. They also show that the trommel is elevated some metres off the ground and supported on steel framing. Immediately underneath the barrel of the trommel is the tandem truck differential with four wheels (eight tyres) powered by an electric motor. Beside the steel frame holding the trommel is a steel ladder with two platforms reaching to the top of the receival bin. The crusher and vibrating screen are also elevated on steel framework and there are stairs to the crusher and steel walkways adjacent to the receival bin, the 42-inch jigs and the trommel.

131 The Briant photographs also show the Hough loader, an overhead gantry block and tackle, a house, a fuel tank on a raised stand, an electrical switchboard and a mobile welder.

132 The Briant photographs establish that the following items within the description of the Balance Equipment were on the Cashman Mine Site in March 1988 when Esanda's representatives arrived on site:

5. Plant framework consisting of structural supports, platforming, stairs and various connecting launders (or chutes);

8. Tails sump (otherwise described as slurry bucket or CD sump);

133 There is no photographic evidence taken at the time of the repossession (or thereafter) of any plant and equipment said to comprise the leaching system. Mr Dickson's evidence was that the plant and equipment used to conduct the leaching operations was located at least a couple of hundred metres away from the main part of the plant and that it included a leaching section and a carbon recovery section. It is unclear whether that description includes the allusion or stripping circuit.

134 Mr Nairn's photographs establish that the following items of Balance Equipment were removed by Esanda from the Cashman Mine Site:

1. Steel framework on which the crusher was mounted, steel mounting assembly attached to the crusher for the vibrating screen and a walkway or ladder to the crusher;

2. Conveyor, walkways and steel work for the vibrating screen and a chute;

135 Mr Nairn's repossession cards establish the following further items of Balance Equipment were removed from the Cashman Mine Site:

136 The only items of Balance Equipment not confirmed by photographic or other contemporaneous documentary records as having been taken by Esanda are the plant and equipment comprising the leaching plant, the balance of the structural support, platforming, stairs and chutes, a number of pumps, collection sumps and cyclones, switchboard and cable, poly pipe, overhead gantry block and tackle, the storeroom and its contents including spares, service equipment, the amalgam barrel and fuel tanks.

137 The plaintiffs' plant list in the particulars describe a series of sumps, pumps and cyclones to take the jig underflow to feed it to the next section. Esanda's expert, Mr Brittliffe gave evidence that the conical section at the bottom of the jigs seen in the Briant photographs is in fact the jig collection sump which is part of the jig structure. At the base of the conical section of the jig there is a small spigot and usually a small pump is connected directly to that to pump the product to the next stage. According to Mr Brittliffe there were no pumps or cyclones associated with the jigs in the repossession photographs taken by Mr Briant. No other expert was questioned on this topic.

138 The plaintiffs claim that all of the Balance Equipment was taken and that Esanda's (and its agents) contemporaneous records are not an accurate or exhaustive list of what was removed. They rely on Mr Briant's evidence, on admissions allegedly made by Mr Nairn to Messrs Atkinson and Stringer and a number of other matters.

139 Mr Briant was called by the plaintiffs. At the material time in March 1988 he was retained by K J Marriott & Associates ("Marriott") to repossess the Esanda Equipment on behalf of Esanda. Marriott supplied to Mr Briant copies of Esanda's letters of instruction and notices of demand. There was a separate letter of instruction and notice of demand for each Esanda contract. The Esanda Equipment is described in the documentation provided to Mr Briant in the following terms:

140 Mr Briant and two others arrived at the Cashman Mine Site at 4.30 pm on 10 March 1988 to repossess the Esanda Equipment. Apart from those involved in the repossession, no-one else was present on the site.

141 On completion of Mr Briant's work, he produced a report to Marriott which Marriott used as the basis of a report to Esanda ("Marriott report"). Mr Briant's report to Marriott is not in evidence. The Marriott report notes that the repossession task was greater than expected and, as a result, Marriott's agents took photographs of what is described in the letter as the "monstrosity" before it was dismantled. In context that is clearly a reference to the gravity treatment plant. It is also noted that Marriott's agent sought and received authority from Mr Stanion of Esanda to hire a crane to dismantle the plant.

"Between 1600 hours on the 10/3/88, and 1100 hours on the 13/3/88, our agents, and the two hired assistants, plus the crane driver and all the truck drivers who attended at the site and were loaded with your equipment, spent a total of 33 hours each on site, attending to the dismantle [sic] and loading this equipment."

143 The Marriott report records that four 40-foot trailers supplied by J O'Brien of Mt Magnet were used to transport the equipment to Kenwick Motors. O'Brien carted the D7 dozer and the balance of the equipment except the Hough. A Mr Hood supplied a low loader to cart the Hough. The report also notes that the ore treatment equipment seized appeared to be in good order "having not turned a wheel in the entire period that it has been on site". It was said that all equipment should be unloaded by close of trading on 14/3/88. After referring to the Hough and D7 dozer the report continued:

"Now dealing with the other items one by one as mentioned in your instructions.

TRANSPORT HOME: This is most unclear, as the only home on site is a very small old home, that all reports have it was acquired by the hirer from MEEKATHARA [sic], for a fee of $500.00. which in the opinion of our agent is all it is worth.

WESCRANE [sic] RECEIVABLE BIN: This piece of equipment was seized and in the opinion of our agent and others is 'home' made, and not a WESCRANE [sic].

1985, 28' WESTCRANE TROMMELL [sic]. This monstrosity has been seized and once again is 'home made', and not a WESTCRANE made type.

HOUGH 560: This has been set out in more detail on the past page of this report.

ROLLS ROYCE GENERATOR: This unit that appears on face value to be in good condition and like other items, has never been used on this site.

CAT D7 (F): This machine also appears to be in quite good order.

ALLUVIAL MILL & BINS: Our agents report that these units that make up the major part of this equipment has been seized and like the other equipment mentioned above, appears to be in good order.

Our agent reports that the only section of equipment that now remains on site that could in some way be associated with this list of equipment is a 'monolith' silo that the hirer has built from tons [sic] of scrap metal, and enquiries revealed that to move such a Silo, it would take at [sic] 100 ton [sic] Low Loader ... So taking into account the size, the suggested costs of removing same from the position it was in, plus the transport costs and the fact that it was built from scrap, our agent left this item on site with the hirers [sic] many other pieces of equipment." (Emphasis added).

144 Mr Briant gave evidence that the truck drivers were directed to take the equipment to Kenwick Motors in Perth. However, he also gave evidence that some time after the Esanda Equipment was repossessed he went to the premises of Arrow Auctions and saw what he believed to be some equipment from the Cashman Mine Site. The plant and equipment comprising the gravity treatment plant at Cashman had been freshly painted green and yellow. It was the colour of the equipment at Arrow Auctions that caught his eye. He agreed that his visit to Arrow Auctions could have been six months or more after the repossession.

145 Having had the benefit of seeing and hearing Mr Briant in the witness box, I am satisfied, based on the tone and language of the Marriott report, that it is taken from Mr Briant's report to Marriott.

146 Prior to the commencement of the trial in December 2001, Mr Briant had provided to Esanda's legal advisers a signed witness statement dated 3 November 2001 which he confirmed at trial and which was tendered in evidence. He confirmed in that statement that O'Brien supplied one 40-foot low loader and four 40-foot trailers comprising two road trains.

147 He also says in his statement that none of the items described as the Balance Equipment were taken by him or the people helping him. That is obviously incorrect having regard to the Mr Nairn's photographs and the repossession cards. However, he specifically stated he remembered seeing a 20-foot sea container at the mine site which was open and contained, inter alia, consumables and workshop type accessories. He said he formed the view that nothing in the sea container could possibly be the Esanda Equipment and nothing in it was transported to Perth. He makes the same statement in relation to the poly pipe (his recollection was that there was no pumps attached to the pipe), a 2,000 litre fuel tank, the electrical switchboard and the gantry block and tackle.

148 In cross-examination, Mr Briant enlarged on what he thought had been taken from the Cashman Mine Site. It was his recollection that all of the steel structural support for the trommel was removed from the site and taken to Perth as was the ladder and platforming to the receival bin save for the last six feet of the ladder. The experts called by Esanda, Mr Brittliffe and Mr McCorkell visited the Cashman Mine Site in 1998. Mr Brittliffe had taken photographs which showed a steel support frame and steps. It was suggested to Mr Briant that the photographs showed what had been left on site by him in 1988. Mr Briant was adamant that was not the case and was firmly of the opinion that what was depicted in the Brittliffe photographs had been reconstructed.

149 It is apparent from Mr Briant's responses to specific questions concerning what was taken that he was reconstructing rather than recollecting what had occurred. Hardly surprising having regard to the fact that he was giving evidence of what had occurred nearly 14 years earlier.

150 Mr Briant also gave evidence of a discussion with Mr Stanion in March 1988. His evidence-in-chief was in the following terms:

"You have said that you telephoned Mr Robin Stanion at Esanda?---Yes.

Do you recall what was said in that discussion?---I would've told him that the trommel was not a Westcrane, which I remember now. It wasn't a Westcrane, as the instructions said it was. There was a lot of equipment like - some of the equipment we wouldn't be able to move, like the large receival bin, and he gave me authority to hire a crane, leave the receival bin there but bring the rest of the equipment back to Perth."

151 Mr Briant went further in cross-examination. The following exchange captures the position:

"Did he [Mr Stanion] tell you to take the equipment as best you could that matched the descriptions set out in your repossession instructions?---That's not right. As I've told your other people, he told me - when I told him the equipment didn't match everything on his sheets, he said, 'Take the lot'."

152 He could not be shaken from that position although he subsequently repeated that he did not take the gantry, the overhead fuel tank or the sea container.

153 It is apparent from his cross-examination that Mr Briant interpreted the reference to the "alluvial mill and bins" in the Esanda document supplied to him to include the jigs. Mr Briant was not asked any specific questions and did not give evidence concerning the leaching plant and equipment or the locations from which the repossessed plant and equipment was retrieved. The leaching plant and dams were some distance from the gravity treatment plant.

154 Mr Stanion was Esanda's State Manager, Credit Control until the end of April 1988. He had no recollection of a telephone call with Mr Briant in 1988. Further, he had not to his recollection ever instructed a repossession agent to take items not included in repossession instructions or not the subject of an Esanda lease or credit contract.

155 A subsequent purchaser of one or more of the Cashman Tenements, Mr Scott Wilson, was able to shed some light on what was left behind by Esanda. In 1990, Mr Wilson, in partnership with another, purchased a Cashman gold mining lease from Ciciroe. He noticed when arriving on site in 1990 that there was framework that consisted of large steel beams painted green and stairs painted yellow. The steel structures and framework were mostly intact except where equipment had been cut away. In particular, the steps to the ore bin were intact as were various frames, struts and structures. He had taken a photograph in about 1990 of the steel structure. The photograph depicts the same steel frame structure, ladders and some walkways which appear in Mr Briant's repossession photographs. Further, it appears the trommel undersump was also left behind as was the walkway in front of the trommel where the bull jig had stood. Mr Wilson's evidence and his photograph are compelling.

156 Mr Brittliffe and Mr McCorkell who, as I said, visited the Cashman Mine Site in 1998, were both were of the view that the steel structures in place at that stage were those depicted in the Briant photographs. Mr Frean also agreed with that view.

157 Messrs Stringer and Atkinson gave evidence of admissions made by Mr Nairn at a meeting or meetings in September 1988. Mr Stringer in his witness statement tendered in evidence referred to a meeting in September 1988 attended by (inter alia) him, Mr Atkinson, their solicitor (Mr Luscombe) and Esanda representatives, one of whom was Mr Nairn. Mr Stringer said he informed the Esanda representatives that Esanda had wrongly repossessed all of the gold mining plant and equipment at the Cashman site not just that which was leased by Esanda. Mr Nairn was alleged to have responded in words to the effect "we accept that we took the wrong plant" and offered to compensate them for their losses in the amount of $30,000. Mr Stringer thought it was possible that another Esanda employee who he knew as "Tana" made the offer first.

158 In cross-examination Mr Stringer recalled that Mr Nairn had actually said "we took it all" when referring to the Cashman plant and equipment. Mr Stringer conceded that he had made at least three statements for the purposes of this action, none of which contained a statement to that effect.

159 There is no evidence that Mr Stringer knew in September 1988 what plant and equipment Esanda had taken from the site. His last site visit was in March or April 1987. He had not visited the Cashman Mine Site after March 1988 to ascertain what had been taken by Esanda. His recollection was that he became aware in about the middle of 1988 that Esanda had taken more than the Esanda Equipment from the Cashman Mine Site. He had instructed the plaintiffs' solicitors in relation to the action (which commenced in 1990). The first statement of claim referred only to repossession of the Klyque Equipment not the Balance Equipment.

160 Mr Atkinson had a note in his diary to suggest that he was informed by the provisional liquidator of Brybay in April 1988 that Esanda had taken some equipment. Mr Atkinson gave evidence that he informed Mr Stringer when he became aware of that matter. After Mr Atkinson informed Mr Stringer of what had occurred, he said he left the matter in Mr Stringer's hands and he did not do anything to find out what was taken by Esanda.

161 Mr Atkinson also gave evidence of a meeting on 5 September 1988 with Mr Nairn in which Mr Nairn showed him some photographs of what Mr Atkinson believed to be "our" mining plant in pieces and that Mr Nairn told him that Esanda had gone to Meekatharra and removed all the plant from Cashman. He then refers to a further meeting later the same day with Messrs Stringer, Luscombe, Nairn and Mr Thana Balasubramaniam. Mr Balasubramaniam succeeded Mr Stanion as Esanda's State Manager, Credit Control. According to Mr Atkinson, Mr Nairn said at that meeting that Esanda had dismantled the plant, taken it to Perth and sold it and that Mr Balasubramaniam had made an offer to settle the matter for $30,000 which was not accepted.

162 Mr Balasubramaniam gave evidence of his recollection of the meeting attended by Messrs Stringer, Atkinson, Nairn and Luscombe. His recollection was refreshed from the contents of a contemporaneous letter of instructions he wrote to Esanda's solicitors seeking advice on the matters raised by Mr Stringer and Mr Atkinson at the meeting. Mr Balasubramaniam was firm that Mr Stringer and Mr Atkinson had made an offer to settle their claim but that no offer was made by or on behalf of Esanda. He explained Esanda's procedures and its policy of requiring legal advice before offering to settle disputes. Mr Balasubramaniam's evidence was careful, considered, and he was prepared to accept possibilities when his recollection was unable to assist but was firm in those matters where his recollection was refreshed or was based on Esanda procedures. For these reasons, I prefer Mr Balasubramaniam's evidence of what occurred at the meeting where it is inconsistent with that of Messrs Stinger and Atkinson. The plaintiffs initially called for, and the defendant objected to, the production of the document from which Mr Balasubramaniam had refreshed his memory, the objection being based on legal professional privilege. The plaintiffs later abandoned their call for the document.

163 Mr Nairn also gave evidence. He was aware that Esanda had repossessed some plant and equipment in which it had no interest or claim prior to its sale. He recorded at least some of that equipment in his repossession cards. It was also apparent from the photographs he took of the repossessed plant and equipment which was held at Kenwick Motors.

164 Mr Nairn's recollection was that he first heard from the liquidator of Brybay that non-Esanda equipment had been repossessed. That is unlikely to be the case. Mr Frean wrote to Mr Stanion on 3 June 1988 in the following terms:

"On March 24th on first knowledge of the machinery collected from Cashman Meekatharra, I rang Mr Rechichi who referred me to Mr Nairn and Mr Hall of Kenwick Trucks, telling them that some of the equipment collected was not Esanda's. I advised Mr Briant and yourself at about the same time.

Equipment belonging to the Stringer group and their finance companies

1. Jaques single deck vibrating screen.

1. 10m conveyor with dust cover frame.

2 x twin hutch 42" Jigs (Linkage Engineering).

1 Perkins diesel with two Ajax pumps ... "

165 Mr Nairn recalled receiving a telephone call from Mr Frean although he thought it related to the location of the repossessed equipment. A note made by a Mr Hamilton of Esanda on the reverse side of Mr Frean's letter is in the following terms:

"Spoke to Rob Stanion who says, because of difficulty of identifying items on our agreements, he authorised sale. We are to deal with any claim separately."

166 The note is initialled by Mr Nairn. Mr Nairn made a note to the same effect on one of his repossession cards. The probabilities are that Mr Nairn first became aware from Mr Frean towards the end of March 1988 that non-Esanda equipment had been repossessed.

167 On 21 July 1988 the liquidator of Brybay, Mr Parbery wrote to Esanda stating that he was aware that Esanda had repossessed assets belonging to Brybay and others and enclosed copies of lease agreements. Mr Balasubriamanium responded to the liquidator in a letter dated 1 August 1988 in terms:

"... The Mining Plant was disassembled and transported in pieces to Perth. The conveyors and vibrating screen did not have serial numbers which made positive identification difficult however sufficient items were descriptive enough to satisfy our Lease Agreement Schedule."

168 Mr Balasubramaniam confirmed in his letter that Esanda had sold the single deck vibrating screen, the conveyor, two 42-inch jigs and two 14-inch jigs.

169 Mr Nairn's evidence was that he first became involved in the repossession when he was notified by George Hall of Kenwick Motors that mining equipment had arrived in its yards. It was Mr Nairn's practice to prepare repossession cards entitled "repossessed vehicle control card". The initial information on the repossession cards is a description of the equipment as detailed in the relevant contract with Esanda. In accordance with his usual practice, he attended at Kenwick Motors to inspect the equipment and took with him the repossession cards for each contract. It was his normal practice to photograph equipment that had been repossessed at the time of his first inspection. At the time of the first inspection he also recorded additional information relating to the description of the equipment on the repossession cards. He obtained this information from his own inspection and by talking to George Hall. George Hall and Mr Nairn inspected the equipment. They identified the equipment in the yard from the descriptions on the repossession cards.

170 Mr Nairn accepted that he did not photograph all the equipment taken from the Cashman Mine Site and that he did not record in the repossession cards all of the equipment taken. In particular, the two Ajax 4 inch centrifugal pumps with diesel pump, the Linatex pump, the conveyors and the slurry bucket do not appear in his photographs. Further, the staircases, walkways, structural framework and chute shown in the photographs are not recorded in the repossession cards.

171 Mr Nairn gave two explanations for these omissions. The first was that if the steelwork or any other item was, or had been, attached to an item of Esanda Equipment it was, for Esanda's purposes, part of its equipment. Secondly, Mr Nairn said that he did not know what was on the Cashman Mine Site at the time of the repossession or what had been removed from site so he did not note equipment if he (or Mr Hall) did not think it had been repossessed by Esanda.

172 Mr Nairn also gave evidence that road trains comprising two trailers were not involved in the removal of the equipment from the Cashman Mine Site. I do not accept that evidence. It is contradicted by Mr Briant and the contemporaneous documentary evidence, in particular, the Marriott report and the relevant invoices.

173 Mr Nairn recalled attending a meeting with Mr Balasubramaniam and others but had no recollection of what was said at the meeting. He rejected the proposition that he would have made an offer in relation to the non-Esanda equipment because he did not have the authority to do so. I accept his evidence in this regard. It is consistent with that of Mr Balasubramaniam.

174 It was Mr Nairn's evidence that negotiations for and the sale of the repossessed equipment were all handled by George Hall of Kenwick Motors. Mr Nairn received from Kenwick Motors a retail buyers order number 3888 dated 6 May 1988. The order is in Mr Hall's handwriting. The retail buyer's order identifies the purchaser of equipment repossessed from the Cashman Mine Site as "Western Shore Mining Pty Ltd". The purchase price of the equipment identified in the order is $62,000. However, Mr Nairn's repossession cards record that the generator, crusher, trommel, 42 inch jigs, 12 inch jigs, the centrifugal pumps, receival bin, conveyor and screen were sold by Kenwick Motors to a Danny Williams.

175 Mr Nairn subsequently received in the post a list of equipment prepared on Kenwick Motors' letterhead. He recalled that the list was received after the sale of the equipment. The list is dated 2 June 1988 and is in the following terms:

1. ROLLS ROYCE POWERED STAMFORD 80 KVA GEN SET SERIAL NUMBER 78667

2. 6 X 4 VIBRATING SCREEN

3. 14" VIBRATING JIG

4. 16" VIBRATING JIG

5. 12" VIBRATING JIG

6. INVERAL [sic] VIBRATING JIGS

7. ELECTRIC POWERED ROLLER TYPE ELEVATORS

8. ELECTRIC POWERED ELEVATOR FEEDER BIN

9. SET OF TWIN AJAX 3" DIESEL POWERED WATER RECOVERY PUMPS

10. RUSHTON HORNSBY DIESEL POWERED CRUSHING PLANT

11. TYPE ORE BIN

12. HARD STANDING WEST CRANE ORE BIN FITTED WITH ORE GRISSLY [sic]

13. ELECTRIC POWERED ROTATING ORE SCREENING PLANT

TOTAL PRICE $62,000.00"

176 In 1988 Mr Hall was the Sales, Marketing and Yard manager of Kenwick Motors. A proof of evidence signed by Mr Hall was tendered in evidence as Mr Hall had died before the trial. Kenwick Motors had been Esanda's disposal agent of repossessed goods for many years. According to his statement, the Esanda equipment was unloaded into a holding yard at Kenwick Motors. He then contacted Mr Nairn and informed him that the equipment had arrived. Mr Nairn inspected the equipment, prepared a control card and photographed the equipment. He walked around the yard with Nairn and discussed in general terms the work to be carried out on the equipment. Mr Hall says that all of the equipment delivered to Kenwick Motors by Esanda was sold for $62,000. Mr Hall prepared the document headed "Mine Site Equipment as Listed" after the equipment had been sold however, it was typed from information he had previously recorded on the buyers order. Mr Hall also refers in his statement to a white pro forma offer form signed by M L Wade for the mining equipment specified in the offer for a price of $55,000.

177 Mr George Hall's nephew, Mr Mark Hall, was called by Esanda. He was asked questions in cross-examination directed at the issue of the time taken between the trucks leaving the Cashman Mine Site and their arrival at Kenwick Motors. He had no personal knowledge or recollection of that matter. He was questioned about invoices for crane hire. Mr Hall was unable to say whether all the invoices were for unloading the equipment from the trucks on their arrival from the Cashman Mine Site. I am not satisfied that the trip took up to three days as was suggested on behalf of the plaintiffs.

178 The plaintiffs sought to cast doubt on the Esanda and Kenwick Motors documentary and other evidence of what was removed from the Cashman Mine Site in other ways. Firstly, they relied on Mr Briant's evidence of what he had seen at Arrow Auctions to suggest that not all the repossessed equipment was taken from the Cashman Mine Site to Kenwick Motors. There are a number of other possible explanations. Mr Briant may have been mistaken about the source of the equipment at Arrow Auctions or the equipment sold by Kenwick Motors may have been on-sold. Mr Nairn's evidence, which I accept, was that he had never in his time as Esanda's repossession manager used Arrow Auctions.

179 The plaintiffs also rely on evidence that the purchaser of the repossessed equipment from Kenwick Motors described in the Kenwick Motors buyers order as "Western Shore Pty Ltd" was a non-existent company. However, there is evidence that "Western Shaw" was the name of a mine associated with Chanuka Pty Ltd, Steve Lewis and Les Duman. The name Steve Lewis appears on the retail buyers order and the addresses on that order are the addresses of Mr Lewis and Mr Duman. The reference to Western Shore may have been an inaccurate reference to Western Shaw.

180 The plaintiffs also refer to evidence from Esanda's expert, Mr McCorkell, that he purchased the trommel from Kenwick Motors in about March 1988. He said George Hall had called him to advise that Esanda had repossessed mining equipment. He went to Kenwick Motors later the same day and inspected the trommel and shortly thereafter purchased it. However, he had no record of the purchase or on-sale of the trommel and in cross-examination explained he may have brokered a sale of the trommel between other parties. Mr McCorkell was unable to explain why the trommel was advertised for sale in April 1988 with other items of equipment repossessed from the Cashman Mine Site.

181 It was suggested, somewhat obliquely on behalf of the plaintiffs, that an adverse inference was available because of Esanda's failure to call Mr Strickland of Arrow Auctions, the people who had made offers to purchase the mining plant and equipment and the men who transported it from the Cashman Mine Site. I am not satisfied that a Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 inference is available against Esanda. It cannot be said that the witnesses would be expected to be available to Esanda rather than the plaintiffs.

182 As I understand it, I am asked to infer from these matters that there has been misconduct of some description by some unspecified person or persons that reflects on the reliability of Mr Nairn's evidence and Esanda's records of what was removed from the Cashman Mine Site. I accept there are some matters relating to the sale of the equipment, which I find was handled by Mr George Hall, that are difficult to reconcile. However, I am not persuaded that there is a satisfactory basis for me to draw an inference of misconduct by Mr Nairn, Esanda or its agents beyond the conversion itself. Indeed, Mr Nairn admitted that his knowledge and identification of what was repossessed by Esanda, guided as he was by the inadequate contractual descriptions, left open the possibility of him failing to record and photograph relevant items. I accept that to be the case.

183 Finally, the plaintiffs rely on Mr Dickson's evidence that the capacity of the trailers and the time taken for the repossession was sufficient to remove all of the equipment the subject of the plaintiffs' claims. I do not find this evidence to be of any positive assistance in identifying what was actually taken. There are a number of variables which could affect the significance to be attached to the evidence including the speed at which the men worked, any particular difficulties faced by them and how the trailers were loaded.

184 Having regard to all of the evidence I am satisfied on the balance of probabilities that Esanda repossessed the Esanda Equipment and the Klyque Equipment as well as:

(a) the structural supports, stairs and walkways connected with the crusher and vibrating screen;

(b) three conveyors (one of which is included in the Esanda Equipment and one of which is included in the Klyque Equipment);

(g) two Ajax 4-inch 4KS centrifugal pumps with Perkins motor 6354 90 hp industrial;

185 I am not persuaded that the supports and other items attached to the Esanda Equipment were "acquired by" Mr Frean or Mine Alluvials and accordingly I am not persuaded that the attachments to to any of the Esanda Equipment forms part of the Esanda Equipment. I accept Mr Brittliffe's evidence that the jig collection sumps formed part of the jig structure and that the pumps and cyclones associated therewith were not part of the gravity treatment plant in March 1988 and thus were not repossessed by Esanda.

186 I am satisfied that Mr Briant's evidence that he "took the lot" applies to what comprised or was in physical proximity to the gravity treatment plant. Even then he did not take the lot as established by Mr Wilson's evidence and photographs as well as the Marriott report, which refers to the hirer's many other pieces of equipment left on site. The Marriott report is a detailed contemporaneous record of matters relating to the repossession and as such, a more reliable guide to what actually occurred than recollections or reconstructions of events that occurred in March 1988. Further, even if Mr Nairn informed Mr Atkinson or Mr Stringer that Esanda had removed all the plant and equipment from Cashman, it is of little assistance because Mr Nairn did not know what equipment was on site at the time of the repossession.

187 The leaching vats or dams are clearly not chattels. Mr Briant was not asked any questions specifically directed at the plant and equipment associated with the leaching process. He took no photographs of that plant and equipment. The black mixing cylinders and drums of cyanide (on a trailer) which appear in Mr Atkinson's photographs taken in August 1987 do not appear in any photographs taken by Mr Briant. Indeed, if the cyanide drums and black cylinders had remained in the same position as they were in August 1987, it is likely that they would have been visible in one of Mr Briant's photographs. Mr Frean was not asked any questions as to whether the black cylinders or drums of cyanide and other leaching equipment had been left on site. I accept Mr Frean's evidence that the stripping of the carbon adsorption columns did not take place on site but in Kalgoorlie. I infer from that evidence that equipment for stripping the carbon columns was not on site. This is consistent with Mr Brittliffe's evidence that the carbon stripping or allusion circuit is often not located on site for security reasons. In all the circumstances I am not satisfied on the balance of probabilities that any of the plant and equipment involved in the leaching process was removed from the Cashman Mine Site by Esanda.

188 Although the Ajax pumps were at the dam in August 1987, Mr Briant was not asked where they were in March 1988 and whether he collected the bore pumps all of which were some distance away from the gravity treatment plant. His attention was not specifically directed to any items not obviously part of, or associated with, the gravity treatment plant.

189 I am also satisfied that Mr Briant did not remove the gantry block and tackle, the contents of the sea containers, or the poly pipe, cabling or other miscellaneous items pleaded in the statement of claim and particulars.

190 The plaintiffs relied on the evidence of Mr David Dickson and Mr Ken Roxburgh.

191 Mr Dickson had been involved in the design, manufacture, installation, commissioning and operation of gold mining plant and other mining plant for approximately 20 years. He had been to the Cashman Mine Site on two occasions, the first in late 1986 and the second in mid 1987. On the first occasion he went with Mr Atkinson to evaluate the mining plant already on site and to advise in relation to any upgrades that he considered appropriate. He provided Mr Atkinson with an estimate of the costs for his company, Dacol Plant Ltd ("Dacol") to supply the plant and equipment.

192 On his second visit he principally concerned himself with the leaching operations and the plant and equipment that performed that function.

193 Mr Dickson had had other business dealings with Messrs Atkinson and Stringer. In particular his company had built three plants for Messrs Stringer and Atkinson over approximately four or five years although he had built the last plant around 12 years earlier, which I take to have been around 1990.

194 Mr Dickson prepared a number of reports for the plaintiffs. The first report is dated 16 December 1992. He provided details of the areas of capital cost to plan and install a new production plant in a remote location and the proportion of cost for each area as follows:

1. Metallurgical investigation and testing (5 per cent)

2. Plant flow sheet development and design (5 per cent)

4. Plant fabrication and manufacture (37.5 per cent)

6. Site preparation and installation (27.5 per cent)

195 This evidence was not contested. However, Mr Dickson conceded that there would be a saving in some aspects of these costs for a replacement plant.

196 For the purposes of preparing his 1992 report Mr Dickson initially tried to recreate what he remembered as being on the Cashman Mine Site. For that purpose, he did not have access to photographs or documentation relating to his visits because they had been destroyed by floodwaters in Inverell where his company was based. He prepared a flow sheet which appears to have comprised a combination of what he could remember and what he would expect to find in a gravity treatment plant and leaching system of the type he had seen at Cashman. He calculated the production rate of the plant and equipment at Cashman at 100 tonnes per hour.

197 The plant list in his report identifies the equipment as follows:

198 His valuation methodology was to identify the cost to design, supply, transport, install and commission a 100 tonne per hour plant on a greenfields site at Cashman as at the time of his report in 1992 and as at November 1987. He concluded that the total for a replacement 100 tonnes per hour plant installed and commissioned at Cashman as at 1992 was $1,274,500. His valuation as at November 1987 was $950,000.

199 Mr Dickson was unable to provide information as to his valuation of the individual items of plant and equipment in his plant list because he was unable to locate his calculation sheets on which that information would have been contained.

200 Having identified the replacement cost of a 100 tonnes per hour plant installed and commissioned at Cashman in 1992 and 1987 he deducted from those figures the cost of the equipment owned by Esanda. He was given the following figures by the plaintiffs' solicitors:

201 Mr Dickson accepted that the amount he would have allowed in his replacement calculation for the feed bin, crusher, trommel and generator would have been greater than the value allocated to the Esanda Equipment.

202 In November 1987, Mr Dickson's company Dacol provided to Mr Stringer a written quote for a similar sized plant that existed at Cashman, excluding the leaching section. Mr Dickson understood that the information was required for negotiations Messrs Atkinson and Stringer were having with another company. Mr Dickson provided the quotation on the basis of his understanding that he might be asked to produce, manufacture, transport and install at Cashman the equipment referred to in the letter. The quotation was for a skid-mounted plant which makes the gravity treatment plant mobile. That is, the plant could be moved without it being dismantled. The costs of manufacture of a skid-mounted plant are greater but the costs of installation are less than for a conventional plant installed on site. The quote for the plant (ex Inverell) was $350,000. The costs of installation, transport and commissioning were to be subsequently negotiated.

203 In December 1998, Dickson quoted $150,000 for the transport, installation and commissioning of a $350,000 plant. That totals $500,000 compared with the valuation of $950,000 for the replacement value of the Cashman plant and equipment as at November 1987. Mr Dickson explained the $400,000 difference on the basis that the November 1992 valuation included the leaching section as well as some differences in equipment. I have some reservation about this explanation. The 1992 cost of the gravity treatment plant components (based on the March schedule referred to below) totals more than $670,000. That does not compare at all favourably with the November 1987 quotation of $350,000.

204 Mr Dickson also provided his opinion of the cost of a second-hand plant capable of producing at 100 tonnes per hour. He looked for an entire plant rather than investigating particular items of plant to see whether particular items were available and the cost thereof.

205 In a report dated 22 November 1994 Mr Dickson identified from brokers' magazines two plants of sufficient capacity available in the period 1988 to 1990. Having regard to the asking price of the plant (which was discounted by 20 per cent), the cost of transporting the plant to his workshops in Inverell, the cost of repair and refurbishment of items of plant, the transport costs ex Inverell to Cashman and the installation and commissioning costs, Mr Dickson concluded that it was doubtful that it would be possible to reinstate the plant for less than $600,000.

206 It appears the plaintiffs' solicitors requested Mr Dickson to give further consideration to these matters. As a result, he wrote to them on 27 February 1995 enclosing a breakdown of the cost of a new and used plant and in relation to the latter, the repair costs associated therewith ("the February schedule"). The February schedule identified the costs in connection with each item of equipment (new, used and the repair costs), included a claim for contingencies as well as transport and installation costs. In the February schedule the cost of a new plant increased to $1,327,665 and a used, albeit refurbished plant, increased to $820,650.

207 Mr Dickson again wrote to the plaintiffs' solicitors on 9 March 1995 enclosing an adjusted schedule ("the March schedule"). In his covering letter to the solicitors, Mr Dickson says he adjusted the terminology in the costing to reflect the plant detailed in his report of 22 November 1994 and noted that there had been some substantial cost increases since that time particularly in the cost of maintaining labour in remote areas and in electrical componentry. However, the cost of a new plant including transport, installation and commissioning returned to $1,274,500, being the same figure as the 1992 valuation. On the other hand, the value of a used plant, including repair costs, increased again. This time it was $931,930.60.

208 The reduction in the cost of the new plant resulted from significant reductions in the costs of installation and contingent costs together with a reduction in value of the "strip circuit" and the deletion of the zadra cell.

209 Mr Dickson admitted that he adjusted the figures in the March schedule for the cost of a new plant so that it was the same figure ($1,274,500) as in his December 1992 report. He explained the adjustment on the basis that his costing in December 1992 was probably as close as he could get to the costing of the plant.

210 The primary source of the increase in costs of used and refurbished equipment is in the addition of a margin of some $88,668.

212 Mr Roxburgh had 23 years experience in general, project and construction management of which 13 years had been in the mining and mineral processing industry. He was asked to comment on the reasonableness of Mr Dickson's reports dated 16 December 1992 and 27 February 1995. He was not provided with, or asked to comment on, Mr Dickson's March schedule.

213 He understood that Mr Dickson's brief was to value the cost of designing, manufacturing, transporting, installing and commissioning a 100 tonne per hour gold processing plant on a greenfields site. He concluded that Mr Dickson's values in the February schedule were reasonable.

214 Mr Roxburgh also prepared his own valuation which was based on a list and description of equipment supplied to him by Mr Atkinson which bears some similarity to the flow sheet attached to Mr Dickson's February schedule. However, Mr Atkinson's detailed description of each item of equipment on which Mr Roxburgh relied is not supported elsewhere in the evidence. It was not verified by Mr Atkinson in evidence. Mr Roxburgh was asked to include the cost to re-establish the holding dam, leach ponds and tailings dump on the Cashman Mine Site. He also allowed for a three-bedroom house, project management costs at 15 per cent of direct costs and owners' costs at 7.5 per cent of direct costs. On that basis he valued the capital cost at $2,001,606. Further, he valued the stripping plant as described by Mr Atkinson at $40,000. In Mr Dickson's March schedule it is valued at $5,000. Mr Dickson had the advantage of having seen the equipment on site in mid-1987. However, Mr Roxburgh's valuation, which is in Table 2 of his report, includes the installation costs and transport weight, together with a formula for calculating transport costs, for each individual item of plant and equipment. He was the only expert to do so. There was no challenge to the reasonableness of these costs.

215 Esanda called Mr Gary McCorkell, a director of Anaco Pty Ltd, a company specialising in the sale of mining plant, equipment and machinery. He had been in the earth moving and mining industry for 35 years. In the mid-1980s he was contracted to source, supply and build gold processing and milling plants at Mount Magnet and Cue.

216 He was consulted by Esanda's solicitors in 1996 to provide an expert valuation of the mining plant and equipment on the Cashman Mine Site. It was Mr McCorkell's evidence that following the share market crash in 1987, the period 1988 to 1989 was not a good time for investment in mining projects. In his experience, mining equipment was generally in plentiful abundance Australia wide at the time. Mr McCorkell prepared a report dated May 1997. His report contains a schedule of the cost of replacing certain mining equipment in mid-1988. His evidence was that in 1988 in Perth the equipment in the schedule could be purchased second-hand and was in ready supply. Further, the prices set out in the schedule are approximate prices at which the equipment could be purchased second-hand in 1988 and the prices are for equipment in the same condition (which he describes as "good working condition") as shown in the Briant photographs.

217 The list of the equipment he values is taken from the plaintiffs' further and better particulars of loss and damage. His valuation is as follows:

Feeder (Note: Although listed from photos, no Feeder appears to be fitted to Plant)

218 Mr McCorkell described a trommel as a cylindrical tube driven by a chain drive or (as in this case) a tandem truck differential gearing powered by a 25 horsepower electric motor. He said that without the drive mechanism the object is not a trommel but only part of a trommel. In his 35 years experience of buying and selling trommels he had not purchased a trommel without the drive mechanism.

219 Esanda's other expert was Mr Terry Brittliffe. He had spent all his working life in the mining industry in Australia. From 1971 he was involved in technical, operational and corporate management roles with public companies and in professional consultancy and proprietorial positions on his own behalf. His consultancy work was in the general field of operational management in gold, mineral sands, iron ore and other minerals. He has been a project manager of a gold production operation near Kalgoorlie since 1996. As part of his consultancy work he assisted with the Australia wide disposal and acquisition of new and used items of processing plant and equipment. He and his partners formed an auctioneering and equipment brokerage company in 1993.

220 His brief was quite different to that given to the plaintiffs' experts. His instructions were to provide an estimate of the cost to acquire and replace on site those items of equipment removed from the Cashman Mine Site by Esanda in March 1988.

221 He worked on the assumption that the only equipment removed was that listed in the equipment list prepared by Kenwick Motors and used the second hand values verified by Mr McCorkell in his evidence. His evidence of the items removed and the cost to replace them was as follows:

16" vibrating jig (which he assumed was what he described as the rock jig or coarse ore jig at the front of the trommel and sitting on the walkway)

Electric powered roller type elevators (he assumed that was a reference to the conveyors for which he has allowed for three)

Electric powered elevator feeder bin (which he took to be the feeder to the receival bin)

Set of twin Ajax 3" diesel powered water recover pumps

Type ore bin (which he understood to be a reference to the tails sump otherwise called the slurry bucket)

Hard standing West Crane ore bin fitted with ore grizzly (which he took to be the receival bin left on site which he included in the price of the elevator feeder referred to in 8 above)

Electric powered rotating ore screening plant (which he understood to be the trommel)

222 He then allowed a further $101,500 for transport and re-installation of all of those items. He estimated the transport cost based on tonnage and the number of truckloads required to get the items in the Kenwick Motors' equipment list to site. He allocated a figure of $30,000 which he described as conservative. The balance of approximately $70,000 was for contract labour to install and undertake minor adjustments and repairs to the second-hand equipment.

223 Thus, the total for the purchase, transport and installation of the equipment on the Kenwick Motors list is $203,000. That list includes items owned by Esanda valued at $61,000. On the basis that the transport and installation costs would not be pro rated, he allocated the sum of $41,000 for the transport and installation of the Esanda Equipment. Thus the balance for the purchase, transport and installation of the second-hand non Esanda Equipment in the list is $101,000.

224 Mr Brittliffe allocated proportionately less for transport and installation for the Esanda Equipment than the non Esanda Equipment because of the size and essentially discreet nature of the Esanda structures, which he said reduced transport and installation costs. However, some of his provision for installation costs is for installing the non Esanda Equipment to the Esanda Equipment.

225 It was Mr Brittliffe's evidence that the plant and equipment in Mr McCorkell's list was reasonably available in the second-hand market at the relevant times. As to the logistics of purchasing a second-hand plant, he gave evidence he had built a plant that was not dissimilar to the Cashman plant about 18 months previously and he was able to access the plant and equipment from two sources in Western Australia, one of whom was Mr McCorkell. He located all of the equipment he wanted with three phone calls. He accepted that the equipment at the Cashman Mine Site had been refurbished and was in quite good condition but in engineering terms was at the low end of the scale of operations. He confirmed from the repossession photos taken by Mr Briant, that the construction of the gravity treatment plant was incomplete.

Valuation - the Relevant Facts and Principles

226 Before addressing matters relating to the correct valuation approach, it is necessary to identify and determine the relevant facts. In the circumstances, it is appropriate to make findings of fact that would be necessary if, contrary to my finding, Brybay was in possession or entitled to immediate possession of the converted Balance Equipment in addition to the Klyque Equipment.

227 I have already made a finding as to the equipment wrongfully removed from the Cashman Mine Site by Esanda. In summary, Esanda wrongfully removed the Klyque Equipment and some of the Balance Equipment. I am satisfied, on the balance of probabilities, that the Klyque Equipment was new, not second hand. Mr Frean's evidence, which I accept, is that the steel for the plant framework, which I infer covers the structural supports, platforming and stairs, was second hand. Further, so much of the Balance Equipment as is identified in the Cashman brochure was used equipment. Of the Balance Equipment that I have found was wrongly removed by Esanda ("converted Balance Equipment"), all except the launders are referred to in the Cashman brochure. As Mr Dickson, and the other experts identified the launders as part of the steel on site, I infer the launders were also made from second hand steel.

228 I accept Mr Brittliffe's description of the gravity treatment plant as being, in engineering terms, at the low end of the scale of operations. Mr Atkinson's uncontradicted evidence was that after a trip to the Cashman mine site in September 1986 Mr Dickson provided a quote to build the plant but the Stringer group decided to allow Mr Frean to organise it because they were of the view it would be cheaper. As an example, the 42-inch jigs were manufactured in Perth for $7,500 each. That compares with Mr Dickson's allowance in his valuation of $15,200 for each 42-inch jig.

229 Work on the construction of the gravity treatment plant at the Cashman Mine Site ceased in August 1987 because of lack of funds. At that stage, the construction of the gravity treatment plant was not quite complete and it had not been commissioned. The gravity treatment plant constructed at the Cashman Mine Site was not a mobile plant.

230 A provisional liquidator of Brybay was appointed in November 1987. The provisional liquidator did not take possession of the Tenements or the plant and equipment or operate the plant and equipment at any time. He had no funds to do so and was uncertain as to who owned it. By February 1988, Mr Stringer was of the opinion that the Cashman mine was not viable for his group but may have some value to a larger organisation.

231 After the Esanda equipment had been lawfully removed from the gravity treatment plant in March 1988, Brybay would have been left with a partial gravity treatment plant incapable of achieving its purpose of treating ore to recover gold.

232 No one associated with Brybay or the plaintiffs inspected the site to identify what equipment had been removed by Esanda or took any steps to replace that equipment or reinstate the gravity treatment plant.

233 Brybay did not have the means and did not itself intend to use any of the plant and equipment on the Cashman Mine Site at any time after November 1987. Further, Brybay had no proven proprietary interest in the Tenements.

234 It follows from my factual findings, that Mr Dickson's valuation methodology of adopting the cost to design, supply, transport, install and commission a 100 tonne per hour plant on a greenfields site at Cashman has no application. Even if Esanda had converted all of the plant and equipment comprising the gravity treatment and leaching plant, I accept Mr Brittliffe's evidence that items 1, 2, 3 and part of 6 of the capital cost components identified by Mr Dickson in his 1992 Report would not apply where an existing plant was being replaced.

235 In addition, Brybay would be further over compensated on Mr Dickson's approach because he includes the cost to manufacture and supply new items of equipment, including equipment of the type lawfully repossessed by Esanda, and deducts the value of the actual, mostly second hand home made Esanda equipment.

236 A central question flowing from the factual findings is whether Brybay would be entitled to the cost of transport, installation and commissioning of the Klyque Equipment and converted Balance Equipment. Based on the finding that the gravity treatment plant was incomplete and had not been commissioned, the plaintiffs would not be entitled to commissioning costs. The position in relation to the transport and installation costs is not so obvious.

237 Brybay is entitled to be put back to the position it was in before the conversion of the Klyque Equipment and the converted Balance Equipment. Prima facie, that is the market value of the replacement cost of the converted plant and equipment. However, the replacement cost of what Brybay had, that is, a partial gravity treatment plant, is greater than the sum of the value of its constituent converted parts. In particular, it would include the transport and installation costs. If Brybay had intended to use the gravity treatment plant on the Cashman Mine Site there would be no doubt that it would be entitled to the transport and installation costs: J & E Hall Ltd v Barclay [1937] 3 All ER 620; Jones v Port of London Authority [1954] 1 Lloyd's Rep 489.

238 However, Brybay did not have the means or the intention to use the partial gravity treatment plant or make it whole. In those circumstances, the measure of damages which would put Brybay in the position it was in at the time of the conversion of the relevant equipment would be the sale value of the partial gravity treatment plant not its replacement cost.

239 No expert was questioned or gave evidence concerning whether a partial gravity treatment plant (comprising the converted plant and equipment together with what was left behind to which Brybay was entitled) on site in the Murchison goldfields was of greater value than the sum of the value of its constituent parts. In this case there is no suggestion that the registered owners of the Tenements on which the partial gravity treatment plant stood wished to use it. Mr Frean's evidence concerning Columbia's intention was to the effect that Columbia had no need of a gravity treatment plant on the Cashman Mine Site because Esmeralda had its own treatment facility on its adjacent tenements. Thus, the sale value would reflect the need for the partial gravity plant to be dismantled and removed from the Cashman Mine Site. Even if the location of the plant and equipment in the Murchison goldfields and the dismantling of the partial gravity treatment plant with a view to its efficient reconstruction would increase the market value of the partial gravity treatment plant, a matter on which there is no evidence, there would be no basis for inferring full transport and installation cost recovery in the sale value.

240 Although the matter is not without its difficulties, I am not persuaded on the basis of the expert evidence adduced at trial that I can or should find that a partial gravity treatment plant installed at the Cashman Mine Site is of greater value to Brybay than the sum of the value of its constituent parts. Accordingly, if, contrary to my finding, Brybay was in possession or entitled to possession of the Klyque Equipment and the converted Balance Equipment, I conclude that it is not entitled to the cost of transporting the plant and equipment and installing it on the Cashman Mine Site. The conclusion is even more compelling if, as I have found, Brybay and Klyque are only entitled to damages for conversion in relation to the Klyque Equipment.

241 If I am wrong and transport and installation costs should be included, I conclude that it would be appropriate to use the weight and cost allocations in Table 2 of Mr Roxburgh's report for each item of equipment that I have found was converted. Messrs Dickson and Brittliffe provide lump sum costs which I cannot reliably apportion to the converted equipment.

242 The next question is whether Brybay should be compensated on the basis of new or used plant and equipment and if used, whether Mr Dickson's or Mr McCorkell's figures should apply.

243 Consistently with the principle of compensation for tort recovery, the market value should reflect the status (new or used) and condition of each item of equipment converted: Hoad v Scone Motors Pty Ltd [1977] 1 NSWLR 88.

244 I have concluded that Esanda wrongfully repossessed the Klyque Equipment as well as:

(a) structural supports, stairs and walkways connected with the crusher and vibrating screen;

(b) three conveyors (one of which was Esanda's and one of which is included in the Klyque Equipment);

(g) two Ajax 4-inch 4KS centrifugal pumps with Perkins motor 6345 90 hp industrial;

245 As previously discussed, the Balance Equipment pleaded in the statement of claim is different from that referred to in the particulars and the only valuation evidence adduced by the plaintiffs was based on the equipment identified in general terms in the particulars.

246 Thus, it is necessary to cross reference the converted plant and equipment with the description of the plant in Mr Dickson's March schedule. I have concluded that the Klyque Equipment was new. It is appropriate to use the actual costs to acquire the primary jigs ($15,000) and the generator ($7,666). Otherwise, I am content to adopt Mr Dickson's values in his March Schedule. Aside from Mr Roxburgh, there is no other evidence of the value of new items of plant and equipment. The Klyque Equipment, using Mr Dickson's description, is valued as follows:

247 The converted Balance Equipment as described in Mr Dickson's March schedule together with his and Mr McCorkell's used values are as follows:

Steelwork 1 (I have concluded that most of the general steel work was left on site except for the structural supports, stairs and walkways connected with the crusher and vibrating screen which I include in the next item)

248 Mr Dickson's assessment of the value of used plant and equipment was based on advertised prices rather than actual sales. Further, he was likely to have less knowledge of the availability and price of used equipment in the marketplace in Western Australia. Finally, I am not satisfied he has adequately explained the changes in value of used plant and equipment in the three reports he prepared. I was left with the impression that there was an element of partisanship in his valuation evidence. I prefer the evidence of Mr McCorkell. However, no discount should be made from his provision for "launders/supports and platforms" because it includes some steelwork from the previous item.

249 If (contrary to my finding) Brybay is entitled to immediate possession of all of the Klyque Equipment and converted Balance Equipment, it would be entitled to damages of $81,916 ($58,666 + $23,250). For the Klyque Equipment alone the damages would be $58,666. However, Esanda says there should be deductions for payments made by it to the relevant finance companies. I will deal with that matter in due course.

250 Esanda submitted in closing that the action by Brybay should be dismissed on the ground it was instituted without Brybay's authority. The action commenced in March 1990. At that time, Brybay was in liquidation. Mr Parbery was the liquidator.

251 Esanda called the liquidator and he gave evidence that he did not instruct or request or authorise anyone else to instruct solicitors Northmore Hale Davy and Leake (purportedly acting on behalf of Brybay) to commence these proceedings against Esanda. Further, he said he had never instructed the solicitors purportedly acting for Brybay in the proceedings.

252 When asked again in examination in chief whether he had requested or authorised anyone to instruct solicitors to commence or continue proceedings, the liquidator said:

"To the extent that there was a right given at the time that certain assets or rights were assigned to Mr Stringer and his associate Mr Atkinson, it may well have been that they assumed a certain right, but it certainly wasn't with my direct instructions."

253 The assignment referred to in his answer was the Brybay Assignment. At some stage the liquidator became aware of this action but could not recall when he became aware of it. He was unable to recall ever raising a complaint or objecting to the commencement or continuation of the proceedings by Brybay.

254 The plaintiffs rely on a letter dated 14 March 1989, from the liquidator to the solicitors for Messrs Stringer, White and Atkinson as authorisation for Messrs Stringer, White and Atkinson to institute proceedings on behalf of Brybay and on the Brybay Assignment in November 1997.

255 In his letter of March 1989 the liquidator recorded the history of his involvement in the liquidation of Brybay and continued:

"In view of the problems in determining ownership of the plant and equipment and the mining tenements, I have agreed, in principle with Mr. Stringer, to agree to forego the rights [Brybay] may have over the plant and equipment and the mining tenements, for the sum of $10,000. I have also agreed to assist him, subject to my costs being covered in the litigation he and his co-directors may take against Esanda ...

I have been advised by my solicitors that this agreement should be ratified by the creditors of [Brybay] which, I believe, will be a mere formality ...

I trust that the abovementioned information defines the position of [Brybay] and I confirm my assistance in your efforts to recover funds from Esanda ... on behalf of Messrs. Stringer White and Atkinson."

256 There was no response to the liquidator's letter. However, Recital C of the Brybay Assignment records that in 1990 the Assignor (Brybay) purported to assign to the Assignees (Messrs Stringer and Atkinson) all of its causes of action in the Proceedings (defined as this action).

257 Recital D provides that: "For the avoidance of doubt, the Assignor has agreed to assign to the Assignee absolutely the Assignor's causes of action against Esanda in the Proceedings".

258 Clause 2.1 of the Brybay Assignment materially provides:

"In consideration of the payment by the Assignees to the Assignor of the Purchase Price receipt of which the Assignor acknowledges by its execution hereof, the Assignor assigns all of its causes of action in the Proceedings to the Assignees with effect from the Assignment Date."

259 Purchase Price is defined to mean the sum of $10,000 and the Assignment Date means the 20th of October 1997. The sum of $10,000 was paid to the liquidator at some stage in connection with the Brybay assignment.

260 Clause 3 of the Brybay Assignment contains an indemnity clause to keep Brybay indemnified from and against liability which Brybay "has now incurred or may incur arising out of the Proceedings (including any costs awarded against [Brybay] in the Proceedings)".

261 At the time of commencement of the action the Companies (Western Australia) Code applied. The Companies Code expressly dealt with the effect of the appointment of a liquidator on the powers of the directors of a company where the winding up was either a member's voluntary winding up or a creditor's voluntary winding up: (ss 396(2) and 400(4)). However, the Companies Code was silent on the position of directors in the event of a winding up order made by a court. It has been held, in my opinion correctly, that notwithstanding the absence of any express provision in the Companies Code, the position was that upon the making of a winding up order by the court, the powers of directors of a company ceased: Re Country Traders Distributors Ltd [1974] 2 NSWLR 135 at 138; Ford H A J, "Principles of Company Law", 4th ed, Butterworths, Sydney, 1986.

262 I am not satisfied that the liquidator had entered into an agreement in 1989 to assign Brybay's claims against Esanda to Messrs Stringer and Atkinson for the following reasons. The liquidator's March 1989 letter refers to an agreement in principle with Mr Stringer and to the need for "ratification" by Brybay's creditors. There was no response from the plaintiffs or their solicitors to the liquidator's March 1989 letter and the Brybay Assignment refers only to a purported assignment in 1990. Further, the question of Brybay commencing proceedings against Esanda is not dealt with expressly in the March 1989 letter. The terms of the March letter contemplate litigation by Mr Stringer and his co-directors against Esanda. In the event of a legal assignment of Brybay's rights prior to the commencement of any action, Brybay would not be a necessary party to the action.

263 The plaintiffs say that the Brybay Assignment "formalised the process of [Brybay] assigning those rights to Messrs Stringer and Atkinson". Esanda says the concluding words of the assignment clause in the Brybay Assignment rule out the possibility that by entering into the deed of assignment the liquidator was ratifying any earlier act by Messrs Stinger and Atkinson that resulted in the proceedings being commenced and maintained. I do not accept that proposition. The concluding words of the assignment clause ("with effect from the assignment date") simply identify the date of the assignment to avoid any ambiguity occasioned by the purported assignment in 1990.

264 By his execution of the Brybay Assignment the liquidator impliedly ratified the commencement and the continuation of the action by Brybay. In particular, the Brybay Assignment acknowledges the existence of the action, assigns the causes of action which would (or may) be of no value in 1997 without the action because limitation issues would clearly arise and provides for Brybay to be indemnified for costs which Brybay "has now incurred or may incur arising out of the Proceedings" including any costs awarded against Brybay in the Proceedings. If the action was not retrospectively authorised there would be no need for such indemnification.

265 There are divergent lines of authority on the correct procedural approach for raising a question of lack of authority to commence proceedings. There is some support for the view that questions of authority to institute an action should be raised by separate motion (Richmond v Branson & Son [1914] 1 Ch 968; Russian Commercial & Industrial Bank v Comptoir d'Escompte de Mulhouse [1925] AC 112). On the other hand it has been said that if the court has notice that an action was instituted without authority it should refuse relief: Daimler Company Ltd v Continental Tyre & Rubber Co (Great Britain) Ltd [1916] 2 AC 307. However, in view of my conclusion, it is unnecessary to resolve this question.

266 The plaintiffs also say Esanda is estopped by its conduct from raising any question of authority and rely on Russian Commercial&d Industrial Bank (supra). It appears from their submissions that the plaintiffs rely solely on the defendants failure to raise this matter at an earlier stage. I accept that questions of estoppel and waiver may arise in this situation in the same way that they were identified and applied by the High Court in the Commonwealthv Verwayen (1990) 170 CLR 394. However, mere delay without more cannot give rise to an estoppel or a waiver. Accordingly, if contrary to my finding Brybay has commenced and continued the action without authority, I would not uphold the plaintiffs' estoppel submission.

Whether Messrs Stringer and Atkinson have a Maintainable Cause of Action

267 On the pleadings as they stood at trial, Messrs Stringer and Atkinson's claim for relief relies on the Brybay Assignment. It was submitted that because the proceedings were instituted without authority from Brybay it had no "causes of action in the Proceedings" and therefore nothing was assigned to Messrs Stringer and Atkinson. This submission must fail in light of my finding that the liquidator impliedly ratified the commencement and continuation of the action by Brybay.

268 Esanda relies on an additional proposition to the effect that Messrs Stringer and Atkinson's right or interest was acquired pursuant to the Brybay Assignment in November 1997 and as such cannot be maintained in the action which commenced in 1990. Reliance is placed on Water Authority of Western Australia v AIL Holdings Pty Ltd (No 2) (1992) 10 WAR 233 at 235 in which it was held that it is not possible to amend a writ or pleadings to include a cause of action which arose after the date of the writ. It is unnecessary to determine the correctness of this proposition because it has no application in the current circumstances.

269 Messrs Stringer and Atkinson do not by the amendment which pleads the assignment plead a new cause of action. What in effect occurs when the assignees, Messrs Stringer and Atkinson, rely on the assignment, is that they are substituted for Brybay's claims. Their claim is derivative. They are in the same position and in no better or worse position from a limitation perspective than Brybay: Industrie Chimiche Italia Centrale v Alexander Tsaviliris & Sons Maritime Co (The Choko Star) [1996] 1 All ER 114 at 122-123; see also Brandsma & Crockett Pty Ltd & Anor v Heindal Pty Ltd & Ors [2002] WASCA 96.

270 Just prior to the end of the trial, the plaintiffs applied to re-open their case to tender certificates under the Corporations Act 2001 certifying that no company by the name Western Shore Mining Pty Ltd or Western Shaw Mining Pty Ltd was registered under the Corporations Act and to call a Mr M L Wade.

271 Mr Hall gave evidence of an offer signed by M L Wade on a white pro forma offer form used by Esanda which "specifies the equipment which he inspected at Kenwick's yard and offered $55,000".

272 I was informed that the proposed evidence of Mr Wade would be to the effect that the signature on the offer form may or may not be his but that he never made an offer to Esanda to purchase mining equipment. Counsel for the plaintiffs submitted that Mr Wade's evidence was relevant to the issue of the equipment taken from the Cashman Mine Site by Esanda and to Mr Nairn's credit. Some of the handwriting on the offer was said to be Mr Nairn's.

273 I gave the plaintiffs leave to tender the certificates under the Corporations Act and refused leave to re-open to call Mr Wade. These are my reasons for so doing. Esanda objected to the re-opening on the ground that the evidence was inadmissible collateral evidence and even if technically admissible, leave should be refused on discretionary grounds.

274 A party must ordinarily adduce all his or her evidence when presenting his or her case, but there is a discretion to allow further evidence to be called even where it should have been adduced in the first place if the Judge considers that it is necessary to do so in the interests of justice: Singh v Crafter, unreported; FCt SCt of WA; Library No 8434; 15 August 1990.

275 If the proposed evidence relates to inadmissible collateral matters, the application to re-open must be refused.

276 As a general rule, evidence concerning collateral facts - facts that are not facts in issue or facts relevant to facts in issue - is not admissible. Thus, as a general rule a cross-examiner is bound by the answer to a question that goes only to credit in the sense that the cross-examiner will not be permitted to lead evidence to contradict the answer of the witness: Goldsmith v Sandilands [2002] HCA 31 at [3]; [2002] HCA 31; (2002) 190 ALR 370 at 372.

277 A fact is relevant to another fact when it is so related to that fact that, according to the ordinary course of events, either by itself or in connection with other facts, it proves or makes probable the past, present or future existence or non-existence of the other facts. Whether a fact is a fact in issue depends upon the pleadings and particulars of each party's case (Goldsmith v Sandilands (supra) at [31]; at 377). Questions of degree arise in determining whether evidence goes only to credit or is otherwise relevant to a fact in issue.

278 In this case Esanda pleaded that it arranged for the sale of the Klyque Equipment and the Ajax pumps and paid the proceeds from the sale of the Klyque Equipment to the lessors AGC and Auckland Finance. It was Esanda's case that the Klyque Equipment (and other equipment) had been sold to Western Shore Mining for $62,000. In my assessment, the existence or otherwise of the purchaser was not a collateral matter. As the issue had been pursued in cross-examination with Mr Nairn and he raised the prospect that the purchaser's name had been misspelt, I granted leave to the plaintiffs to re-open to tender the Corporations Act certificates.

279 The subject matter of Mr Wade's proposed evidence was not itself a fact in issue but was, in my view, relevant to a fact in issue, being whether there was a sale to Western Shore. Senior counsel for the plaintiffs submitted the evidence was relevant to the issue of what items of plant and equipment Esanda removed from the Cashman Mine Site and to Mr Nairn's credibility. In my assessment the evidence is too remote from the issue of the plant and equipment taken by Esanda and is collateral for that purpose and in relation to Mr Nairn's credibility.

280 However, regardless of the correct characterisation of the proposed evidence, it was of very limited material value and the plaintiffs had had more than adequate opportunities to investigate and raise this matter which was not adverted to in either the opening in December 2001 or at the commencement of the adjourned hearing in July 2002. Further, the relevant documents had been discovered and Mr Hall's statement had been exchanged before the commencement of the trial in December 2001. Finally, Esanda would need to be given the opportunity to properly investigate the circumstances surrounding the document which related to events some 14 years ago and involved Mr Hall who had since died. For these reasons in the exercise of my discretion I refused leave to re-open to call Mr Wade.

281 I have concluded that Brybay was entitled to immediate possession and thus damages for conversion of the Klyque Equipment leased from AGC, being conveyor 1 and the scalping screen which I have found are together valued at $36,000. Brybay's rights were assigned to Messrs Stringer and Atkinson.

282 Klyque was entitled to immediate possession of and thus damages for conversion of the balance of the Klyque Equipment being the primary jigs and the generator which I have found are together valued at $22,666.

283 Esanda submits that the amounts it paid to AGC and Auckland Finance should be deducted from the damages. The uncontradicted evidence is that as a result of the sale of the Klyque Equipment, AGC received from Esanda in May 1990 the sum of $10,800 and Auckland Finance received from Esanda in August 1990 the sum of $3,800.

284 The AGC lease terms and conditions, said to be on the back of the cover page, are not in evidence. The terms and conditions of the Auckland Finance leases are barely readable. No party relied on the terms of the leases in connection with this issue.

285 Klyque's obligations under the AGC leases were guaranteed by Messrs Frean, Stringer, White and Atkinson. Klyque's obligations under the Auckland Finance leases were guaranteed by Messrs Stringer and Atkinson. There is no evidence that as at May and August 1990 Klyque and/or Brybay were indebted or alternatively liable in damages to the finance companies.

286 Further, if Klyque or Brybay were at that time liable in damages to the lessors, I see no reason why a payment that reduces a lessor's damages claim against a lessee, which claim arises out of or is connected with the conversion of the leased equipment, should necessarily or invariably reduce the damages payable to the lessee by the converter of the goods.

287 Esanda must prove not only that the payment is sufficiently connected with the conversion it must also prove that Klyque and Brybay benefited by the payment: B Liggett (Liverpool) Ltd v Barclays Bank Ltd [1928] 1 KB 48. The fact of a payment without more is insufficient. On the available evidence, I am not satisfied that the payments made by Esanda benefited Brybay or Klyque in a way that justifies a reduction in the damages for conversion otherwise payable.

288 Esanda also opposed Brybay and Klyque's claim for interest pursuant to s 32 of the Supreme Court Act 1935 (WA) from the date of the conversion to judgment. They claimed interest at the rate of 14 per cent per annum.

289 Esanda opposed the award of interest on the grounds that the plaintiffs unduly delayed the prosecution of the action and it did not have the use of the money obtained from the sale of the equipment.

290 The awarding of interest under s 32 of the Supreme Court Act 1935 (WA) is discretionary. It can be inferred from the time between commencement of the action and trial that the plaintiffs have unduly delayed the prosecution of this action. However, there is no suggestion that Esanda has suffered financial detriment as a result of the delay. Indeed, the lapse of time between the accrual of the cause of action and payment means Esanda has not had to pay the damages and has had the use of that money over the period. Further, Esanda had opportunities to use the court procedures to prevent undue delay once proceedings were instituted. The awarding of interest is consistent with the principle of compensating the plaintiffs for Esanda's wrongful conduct. In the circumstances I am satisfied that it is appropriate to award interest from the date on which the Klyque Equipment was removed from the Cashman Mine Site. However, the rate of interest should be that fixed from time to time under s 142 of the Supreme Court Act 1935 (WA) in relation to judgment debts.

291 In conclusion, I propose to order that Esanda pay to Klyque the sum of $22,666 and to Messrs Stringer and Atkinson the sum of $36,000 and interest thereon from 14 March 1988 until judgment at the rate fixed from time to time in relation to judgment debts.