Bufalo Corporation Pty Ltd v Leone [2001] VSC 505

Supreme Court of Victoria|2001-12-20|Before: McDonald J

Companies, receivership, receiver appointed before resolution to wind up company, powers of receiver while company in liquidation, receiver appointed pursuant to debenture charge, power of receiver to institute and prosecute proceedings as agent of and in name of company to recover possession of charged property. Property: test as to whether occupier of property a lessee or licensee - licence, terminated by notice - occupier a trespasser - power of receiver to recover damages in the nature of mesne profits.

In this proceeding Gideon Rathner the Receiver and Manager of the plaintiff company as agent for and in the name of the plaintiff, seeks to recover against the defendant possession of premises situated at 410 Wattletree Road, Malvern and being the property more particularly described in Certificate of Title Volume 8184 Folio 065 ("the Property"). Rathner was appointed the Receiver and Manager of the plaintiff company by instrument of appointment made and executed by Prime Life Corporation Ltd and dated 10 August 2000. In addition, the plaintiff has claimed against the defendant damages in the nature of mesne profits to be calculated from 14 September 2000 to the date of possession. By the plaintiff's Amended Statement of Claim the plaintiff seeks further or alternatively a declaration that the plaintiff was entitled to possession of the property during the period from 14 September 2000 to 24 August 2001 and damages in the nature of mesne profits from 14 September 2000 to 24 August 2001.

On the day fixed for the commencement of the trial of this proceeding there was returnable a summons filed on behalf of the then solicitors for the defendant seeking leave to file a notice that they had ceased to act on behalf of the defendant. On that day counsel appeared and informed the Court that he appeared on behalf of the defendant, instructed by other solicitors, and sought an adjournment of the trial. On that day a notice was filed by the solicitors instructing counsel, on behalf of the defendant, that they acted as solicitors for the defendant in the proceedings. In those circumstances the summons of the defendant's former solicitors was struck out. On the application made on behalf of the defendant the trial of the proceeding was adjourned to 27 November 2001. Thereafter the defendant was represented by counsel before the Court until what became the last day on which evidence was led on the trial. On that day counsel for the defendant informed the Court that he would be no longer taking any part in the trial on behalf of the defendant as his retainer had been terminated. Further on that day the solicitors for the defendant, by the solicitor instructing counsel, made an oral application to the Court that leave be granted to such solicitors to file a notice that they had ceased to act on behalf of the defendant in the proceedings. That solicitor gave evidence before the Court that the defendant had instructed her solicitors that they were no longer to act on her behalf in the proceeding. Leave was granted to those solicitors to file a notice that they had ceased to act on behalf of the defendant in this proceeding. Thereafter the defendant did not appear personally or by a practitioner on the trial of the proceeding.

The plaintiff company is the registered proprietor of the Property. It was registered as the proprietor of the Property on 7 October 1999. On that day Universal Mortgage Investments Pty Ltd which has since changed its name to LaTrobe Investment Services Pty Ltd, registered a mortgage on the title to the Property. On 17 December 1999 there was noted on the title to the Property a caveat lodged by Prime Life Corporation Ltd. The date of the "claim document" was stated to be 21 December 1998.

By a Deed of Debenture Charge executed by Prime Life Corporation Ltd, as the chargee, and the plaintiff as the chargor and by clause 2 thereof it was provided:

"The Chargor HEREBY CHARGES in favour and for the benefit of the Chargee the Charged Property as security for the due and punctual payment of the Secured Moneys and this Debenture Charge shall constitute as to the Chargor's present and future uncalled and called but unpaid capital, its freehold and leasehold property, and other fixed assets... ... and any of its assets property or undertaking the documents of title in respect of which are deposited or required hereunder to be deposited by the Chargor with the Chargee a FIXED and SPECIFIC charge and as to any other of the Charged Property this Debenture Charge shall constitute a floating charge of the Chargor but so that the Chargor shall not be at liberty to create any mortgage charge or security ranking in priority to or pari passu with or subsequent to this Debenture Charge..."

By cl. 1(a) of the Debenture Charge, "the Charged Property" was defined to mean:

"(a) the whole of the assets, property and undertaking of the Chargor whatsoever and wheresoever situate both present and future including, without limiting the generality of the foregoing, its uncalled and called but unpaid capital (including any unpaid share premiums) for the time being, the goodwill of its business and all its freehold and leasehold property...."

By cl. 9.1(a) and (c) of the Debenture Charge it was provided:

"9.1 At any time after the Secured Moneys become payable the Chargee may appoint in writing any person or persons to be a receiver or a Receiver and Manager or receivers and managers (which person or persons is or are hereinafter referred to as `receiver') of the Charged Property or any part thereof and may remove any such receiver and in case of the removal, retirement or death of such receiver may appoint another person or persons in the place of such receiver and may fix the remuneration of such receiver at a rate not exceeding five percentum (5%) of the gross amount of all moneys received by him Provided ALWAYS that every such receiver so appointed shall be the agent of the chargor and the chargor shall be responsible for the acts and defaults of such receiver and any receiver so appointed shall without any consent on the part of the Chargor have power to do anything in respect of the Charged Property that the Chargor could do, including without limitation: (a) take possession of collect and get in the whole or any part of the Charged Property." (c) to carry on or concur in carrying on the business of the Chargor and to make and effect all repairs purchases and insurances and to erect or make any new building or improvement upon any land forming part of the Charged Property and to demolish alter rebuild and/or add to any then existing building thereon and to do all acts which the Chargor might do in the ordinary conduct of its business for the protection or improvement of the Charged Property or any of them or for obtaining income or returns therefrom;

The aforesaid Instrument of Appointment appointed Gideon Rathner to be Receiver and Manager -

"of the property charged by the Debenture Charge with all rights and powers conferred upon a Receiver and Manager by virtue of the Property Law Act 1958 and by virtue of the Debenture Charge and by any other means including all powers and authorities conferred upon or exercisable by Prime Life in relation to the property and assets charge by the Debenture Charge by virtue of the Property Law Act 1958 or by virtue of the Debenture Charge or by any other means..."

On the plaintiff becoming the owner and proprietor of the Property which was subsequent to the date of the Debenture Charge, pursuant to the terms of the Debenture Charge the charge became a fixed and specific charge with respect to that property.

Pursuant to the terms of the Debenture Charge the Receiver and Manager, as agent for the plaintiff, had power to take possession of the Property. Further, pursuant to the provisions of s. 420(2)(a) and (k) of the Corporations Law as relevant at the time when these proceedings were instituted (see s. 420(2)(a) and (k) of Corporations Act 2001) the Receiver and Manager had power to institute and prosecute the present proceeding in the name of and on behalf of the plaintiff company.

On 24 July 2001 at a meeting of creditors of the plaintiff it was resolved that the plaintiff be wound up voluntarily and Gregory Stewart Andrews was appointed liquidator. At no time did the liquidator seek to take part in these proceedings. The question that is to be then addressed, is what effect does the liquidation have on the appointment of the Receiver and Manager and his capacity and authority to conduct this proceeding. In Re Leslie Homes (Aust)[1], McLelland J addressed a like question when a receiver of assets of a company in liquidation sought directions as to the proper mode of execution of a proposal contract of sale of certain real property of the company and a transfer to give effect to that sale. At p.557 his Honour said:

"... the power of the lender to appoint a receiver of the property of the company, and the power of the receiver so appointed to sell and transfer that property as agent of the company, are both powers ancillary to the exercise by the lender of its proprietary rights over the companies property created by the Deed of Charge, and fall into the category of powers coupled with an interest so as to be irrevocable (see eg Re Halle (1899) 2 Ch. 107). The application of the principles relating to irrevocable powers must however yield to anything inconsistent therewith to be found, by express enactment or necessary implication, in the legislation governing the winding up of companies. It has been held that it is inconsistent with such legislation that a receiver should after a winding up, have or retain power to create liabilities provable against the company in the winding up (see Gaskell v Gosling (1896) 1 QB 669 at pp. 699-700 and (1897) AC 575) but that it is not inconsistent therewith that a receiver should after a winding up have or retain the power to bring or continue proceedings in the name of the company to enforce a chose in action forming part of the security.

His Honour cited Visboard v Federal Commissioner of Taxation[2] and continued:

"The position appears to be that where there is a winding up the receiver may, as agent, deal with property which is subject to the charge but may not as agent create liabilities provable in the winding up."

His Honour referred to and cited that said by Goulding J at p. 30 in Snowman v David Samuel Trust Ltd[3] where it was said:

"Winding up deprives the receiver, under such a debenture as that now in suit, of the power to bind the company personally as acting as its agent. It does not in the least affect his power to hold and dispose of the company's property comprised in the debenture including his power to use the company's name for that purpose, for such powers are given by the disposition of the company's property which it made (in equity) by the debenture itself. That disposition is binding on the company and those claiming through it as well as in liquidation as before liquidation except of course where the debenture is vulnerable under s. 95 or s. 322 of the Companies Act 1948 or is otherwise invalidated by some provision of law applicable to the winding up."

After citing this passage McLelland J. at p. 557 said further:

"In this state of affairs it does not seem to me to be entirely accurate to say (as is said in some of the cases) that a winding up terminates a receiver's agency (if the receiver is appointed before the winding up) or prevents a receiver's agency arising (if the receiver is appointed as in the present case after the winding up) rather the agency remains or arises (as the case may be) but the receiver's authority as agent is necessarily limited so as to be consistent with the existence of the winding up. Accordingly the agency subsists for the purpose of the receivers dealing with the property charged by the relevant security, but not (it seems) so as to permit the creation of any pecuniary liability provable against the company in the winding up."

His Honour further referred to and cited Street J in Re Landmark Corporation Ltd (in Liq)[4] as authority for the proposition that the receiver's agency subsists notwithstanding a winding up.

The fact that the plaintiff by resolution was wound up after the appointment of the Receiver and Manager and after the commencement of this proceeding does not affect the Receiver's and Manager's authority and capacity to prosecute this proceeding as agent for and in the name of the plaintiff company to enforce the proprietary rights of the grantee as created by the debenture charge. The Receiver and Manager, however, cannot create liabilities provable against the plaintiff company in the winding up.

This proceeding was commenced by writ filed on 18 October 2000. Subsequent to that date and on 28 February 2001 in Proceedings No. 4650 of 2001 in this Court the mortgagee, in the name of Universal Mortgage Investments Pty Ltd, commenced proceedings by writ against the plaintiff company (Receiver and Manager appointed) and the present defendant, Marie Leonie. The mortgagee alleged that by the appointment of the Receiver and Manager to the plaintiff company on 10 August 2000 it had defaulted under the mortgage and that it remained in default. The mortgagee claimed against the present plaintiff company and the defendant, Marie Leonie, inter alia, possession of the Property.

On 14 May 2001 judgment in that proceeding was entered against the present plaintiff company, in default of defence, for recovery of possession of the Property and costs.

On 24 August 2001 it was ordered in that proceeding that the plaintiff, the mortgagee, recover possession of the Property from the present defendant, Marie Leonie.

On 29 August 2001 a Warrant of Possession was issued directed to the Sheriff in respect of each of the judgments. That warrant lies in the office of the Sheriff and has not been executed.

The fact that the mortgagee has an order for possession of the Property against the plaintiff and defendant does not mean that it has taken possession of the property. Universal Showcards and Display Manufacturing Ltd v Brunt and Ors[5]. That order does not impede the Receiver and Manager as agent for and in the name of the plaintiff and in reliance on its proprietary rights under the debenture charge prosecuting these proceedings against the defendant for an order for possession of the property: cf Universal Showcards and Display Manufacturing Ltd v Brunt and Ors. I am satisfied that the mortgagee is aware of these proceedings and was aware of the trial in these proceedings. At no time did the mortgagee seek to be joined as a party to the proceeding. There is no reason relevant to these proceedings and in the manner in which they have been brought by the Receiver and Manager, why the mortgagee should have been joined as a defendant to the proceedings. Any order against the defendant for possession of the property obtained by the Receiver and Manager as agent for and in the name of the plaintiff company and in reliance on the proprietary rights of the grantee would be subject to the orders of possession obtained by the mortgagee and in particular the order for possession obtained against the plaintiff company.

At the time of the appointment of the Receiver and Manager the defendant resided in the premises on the property and has continued to reside there and be in possession of the property. Since July 2001 the defendant has not entered into any agreement permitting her to remain in possession of the property.

On 12 August 2000 a process server, Grayman, handed to a woman at the property a notice to quit addressed to "The Occupier - 410 Wattletree Road, Malvern Vic 3144" giving notice that the Receiver and Manager required the "occupier" to "quit and deliver up possession of the [property] at 5.30 pm on 13th day of September 2000". The notice was signed by the solicitors and agents for and on behalf of the Receiver and Manager. The defendant admitted in evidence that she had received the Notice to Quit. It was attached to a letter from the solicitors for the Receiver and Manager addressed to "The Occupier - 410 Wattletree Road, Malvern Vic 3144". That notice was received by her on or about 12 August 2000. The defendant did not comply with the Notice to Quit and at the commencement of the present proceedings she was in possession of the Property, in circumstances that I shall hereafter refer to. She has continued to be in possession of the Property notwithstanding judgment being entered against her for possession in Proceeding No. 4650 of 2001 in this Court. From the time of the appointment of Rathner as Receiver and Manager of the plaintiff he has not received any payment from the defendant who has continued to occupy the property.

Geoffrey Sutherland, a real estate agent, who has been in business as an estate agent since 1954 and who is a well qualified and experienced valuer of residential properties gave evidence on behalf of the plaintiff. He was familiar with the Property and in his daily activities passed the Property "pretty well every day". He had fully inspected the Property in 1991. Situated on the Property is a solid red brick residence of some 83 squares.

Sutherland was retained by the solicitors for the plaintiff to assess the rental value of the Property during the period from 14 September 2000 to 9 November 2001 and to also assess the value of the Property. He made a "kerb side" inspection of the Property. He described it as "broadly classed as derelict" and in "poor condition". He gave evidence that he estimated the rental value of the Property to be $500 per week. As to the value of the Property he assessed its value as a property which could be sub-divided into a number of residential allotments, on the present structures standing on the Property being demolished. The assessment of the value of the Property was made by Sutherland, having regard to comparable sales in the general area of the Property.

He expressed the opinion that as at 9 November 2001 the value of the Property was $1,375,000.00 to $1,475,000.00. I accept the evidence of Sutherland both as to the rental value of the Property and the value of the same as at 9 November 2001.

A letter from the solicitors for the mortgagee addressed to the solicitors for the plaintiff and dated 28 November 2001 advised that the indebtedness of the mortgagor to LaTrobe Investment Services Pty Ltd, the mortgagee, as calculated to 26 November 2001 was $985,424.03 with interest accruing daily at the rate of $330.17. The letter stated that it was noted that it was intended that the letter would be relied on, on the trial of this proceeding. It is not necessary for me to reach any conclusion as to the value of the equity of redemption that the plaintiff company has in the Property. In bringing this proceeding the Receiver and Manager does not rely on the plaintiff company's equity of redemption in the Property. Rather the Receiver and Manager relies on the proprietary rights that the grantee Prime Life Corporation Ltd has in the Property pursuant to the debenture change. However, this evidence demonstrates that the Receiver and Manager has a real interest in instituting and prosecuting this proceeding.

The directors of the plaintiff company are and since 14 December 1988 have been Giovanni Bufalo and Guiseppe Bufalo the former of whom has been, during that period, the secretary of the company. They are the only shareholders of the plaintiff company. The father of those two persons, Francesco Antonio Bufalo, although not a shareholder or director of the plaintiff company nor a secretary of it has been closely involved in the activities of the plaintiff company and has been active in the management of its affairs. He is commonly known by the name "Tony" Bufalo and I shall refer to him by that name.

He first met and became acquainted with the defendant in or about 1988 or 1989 when she applied for and was appointed as the manager of an aged care facility built and developed by the plaintiff company at Sale. Notwithstanding, that the defendant had no previous experience or qualifications in the management of an aged care facility, or a like facility she was appointed as the manager of the aged care facility of the plaintiff company at Sale.

Following Tony Bufalo first meeting the defendant and becoming acquainted with her there developed a very close friendship between Tony Bufalo and the defendant. She lent to the plaintiff company some $37,000 to enable it to purchase curtains for the aged care facility at Sale. After the return of the defendant to Melbourne in or about 1991 the close personal friendship between Tony Bufalo and the defendant continued.

The defendant gave evidence that in 1999 she was living in rented accommodation in Camberwell. She said that Tony Bufalo informed her that the Property had been acquired, that it was intended to develop the same as an aged care facility and that he anticipated that it would take two years to get the permits to develop the Property.

She said that in August 1999 Tony Bufalo owed her $20,000 in total as moneys that she had lent him from time to time during 1999. She said that Tony Bufalo asked her whether she would like to live in the Property and that she agreed with him, to live in the Property on the basis that she would maintain and repair the premises which had, in part, been damaged by vandals, that she would not be required to pay any money to Bufalo and that if she needed to move out when the permits were obtained the $20,000 would be repaid to her.

She gave evidence that she moved in to live in the premises on the Property in or about August 1999 and from that time has continued to live there. She gave evidence that she had spent about $17,000 on making repairs and installing equipment and appliances at the premises. The defendant further said that she had received the "Sheriff's warrant" and a letter and that she had been conducting negotiations on behalf of "investors" to have the mortgage, registered on the title of the Property assigned to them. She further said that after the Receiver and Manager had been appointed Tony Bufalo paid to her $20,000 but she later paid that sum to the Receiver and Manager

In cross-examination of the defendant it was revealed that on occasions before she commenced to live in the Property she had lived in other houses and residences owned by the plaintiff company. After the defendant ceased working as the manager of the aged care facility at Sale in or about 1991 and she returned to live in Melbourne, she commenced to undertake tasks for the Bufalo family. She had undertaken the task of dealing with a mortgagee in respect of another property owned by the plaintiff in Warra Street, Toorak seeking to enable members of the Bufalo family to continue living in that property.

When questioned as to the amount of money that she had loaned to Tony Bufalo over a period of some 13 years and when she was asked whether it would exceed $100,000 in total, she said it would possibly not be in excess of $100,000. The loans made by her to Tony Bufalo, she said, were made by her as a close personal friend. The money was lent, she said, from time to time, when Tony Bufalo asked her for money. She said that she was always able to obtain funds and that she made loans to him for business purposes. She said that she had never required Tony Bufalo to provide her with a receipt for the moneys that she lent to him and times were not specified when the moneys were to be repaid.

The defendant also gave evidence that over a period of 13 years she had from time to time borrowed money from Tony Bufalo. She said that that had occurred, possibly, on more than 20 occasions.

The defendant gave evidence that during the period after she had returned from Sale Tony Bufalo had purchased the property at Warra Street, Toorak and a property at Burwood and that Tony Bufalo had permitted her to live in such properties, but at other times she had lived in rented accommodation. She said that as to the Toorak property in which she lived for a period, Tony Bufalo had told her that if she wanted to live there she should look at the premises. She said the premises were to be demolished and the Property redeveloped. She said that for about a year she lived in a residence at that property. She gave evidence that the arrangements that she had with Tony Bufalo, with respect to that property, was that she could move into the premises, which was a fairly small house, that she was to occupy the house and look after it and pay any expenses needed to be paid while living there. She said that in respect of that property Bufalo had told her that it would take at least a year to get the permit to redevelop the same. She agreed that the arrangement she had with Bufalo as to occupying those premises was not reduced to writing. She said that was not necessary.

She agreed that with respect to the property at Warra Street, Toorak had Tony Bufalo asked her to leave because he had to sell the property, for any particular reason, she would have done so. She said she would have been quite annoyed but there would have been no need to give her a notice in writing for her to leave.

The defendant also gave evidence that for a period she had lived in premises on the Burwood property that Tony Bufalo was going to redevelop. The basis on which the defendant lived in those premises was similar to the arrangement that she had had with Tony Bufalo with respect to the Warra Street premises. She said that she ceased to live in the Burwood property when "they" had obtained permits with respect to its redevelopment. She said that with respect to each of the properties in which she had lived, which had been acquired by Tony Bufalo, the Warra Street Toorak property, the Burwood property and the property, the subject of these proceedings, the premises on the same were to be demolished and the property was to be redeveloped.

She agreed in cross-examination that with respect to her living in the Property the subject of these proceedings, that if at any time Tony Bufalo had needed to sell the Property and take possession then she would have left the Property. She agreed that he would not need to have given her anything in writing to require her to leave. She said that had she been required to leave the Property the subject of these proceedings she would have reached some new arrangement with Tony Bufalo based on their friendship. She said that as to her occupancy of the Property, the subject of these proceedings, Tony Bufalo had not given her any definite date as to when a permit would be obtained, but in discussions with her he had said that it would be at least two years and that if she had to go before that time he would give back to her the money that he owed her. She said that the arrangement also was that if she stayed longer he would "chip into" the money, but she thought that he had already used it.

It was clear from the cross-examination of the defendant that she had a very close friendship and relationship with Tony Bufalo and that it was through this friendship that she had occupied the three premises, in Warra Street Toorak, in Burwood and the premises on the Property the subject of these proceedings. Each of these premises when acquired were intended to be demolished before redevelopment of the same. She agreed that at the present time she was helping Tony Bufalo and looking after his interests. She said that when she attended the creditor's meeting at which the resolution was passed to wind up the plaintiff company she took with her proxies on behalf of various members of the Bufalo family and that it was she who moved the motion to wind up the company.

During the course of her cross-examination she was asked whether she had knowledge of the parties funding the liquidator in the liquidation of the plaintiff company, to which she replied that she had knowledge of one person who was the person that she dealt with. When asked to identify that person she declined to do so and continued to decline to do so.

On the following day and before the cross-examination of the defendant was completed, the Court was informed by her then counsel that the defendant was ill, that she was attending a doctor and was unable to resume giving evidence that day. The defendant never returned to court to enable counsel for the plaintiff to complete his cross-examination of her and while the proceedings were still continuing she terminated the retainer of her counsel and solicitors. The defendant took no further part in the trial of this proceeding.

Tony Bufalo gave evidence on behalf of the defendant that the plaintiff company purchased the Property, the subject of these proceedings, and that the deposit was paid in 1998. He said that the premises were vacant when purchased and that formally a nursing home had been conducted in the same. He said that he told the defendant that he did not think that he would get a permit with respect to the Property for two years, and that he told her that she could live there for two years and fix it up and, that if she lived there for more than two years, then they would "work it out to pay rent on the $20,000" which he said the defendant had lent him. That money, he said, had been lent by the defendant to the company. As to loans made by the defendant to the company, Tony Bufalo said in cross-examination that there was never anything recorded in writing or in the books of the company and that the defendant made the loans to him because of his close friendship with her. He said that the loans were made when he needed cash and agreed that the defendant was looking to him to repay the money. He agreed that because of their good friendship he had always been able to work things out with the defendant, as to money, by them talking to each other. He agreed that the arrangement he had with the defendant as to her living in the Warra Street premises was that she would live there until the building was needed and that she was really looking after the building until it could be demolished. He agreed that he had a conversation with the defendant about her living in the Property, the subject of these proceedings, and that the conversation was that she could live there until he or a Mr Sent or someone else needed the building. He agreed, further, that with respect to the Warra Street premises the basis on which the defendant lived there was that at any time the property was needed she would have to leave the same and again with respect to her occupying the Burwood property - she could live there until the property was needed. He said that as to the Property, the subject of these proceedings, that he had a conversation with the defendant as to her occupying the same in which he said that if she had to leave before two years then he would immediately repay the $20,000. He further agreed that if he had asked the defendant to leave the Property before two years had expired then that would be the subject of conversations between them and that they would work it out as close friends. He said with regards to the Warra Street property that, when he needed it, he told her that he needed the property and that he gave her "maybe two or three weeks' notice" and that the same thing occurred with respect to the Burwood property. He further agreed that if he had needed the Property before two years he would have given her the same two or three weeks' notice and she would have had to leave the property.

The first question to be addressed in this proceeding is what was the nature of the entitlement that the defendant had to occupy and live in the premises on the Property pursuant to the arrangement that she made with Tony Bufalo and what was the effect of the notice received by her on or about 12 August 2000 requiring her to vacate the premises by 5.30 pm on 13 September 2000.

On behalf of the plaintiff it was submitted that the defendant occupied the Property as a mere licensee and that the notice received by her terminated any right that she had to occupy or remain in possession of the Property. It was submitted that while the defendant continued to live in the premises after 5.30 pm on 13 September 2000, she was a trespasser on the Property and had no right to be in possession of the same.

I am satisfied that pursuant to a loose oral arrangement that was made between the defendant and Tony Bufalo at the invitation of the latter he permitted her to live in and occupy the Property. I am satisfied that for some years before this time the defendant from time to time loaned moneys to Tony Bufalo and he also loaned money to her and repayments were made from time to time as requested, but at no time was any record made of the money's loaned or the repayment of the same. Probably some if not all of the moneys loaned by the defendant to Tony Bufalo from time to time were for the purpose of meeting debts and obligations of the plaintiff company. At or about the time that the arrangement was entered into between the defendant and Tony Bufalo which resulted in the defendant living in the Property there was owing to the defendant some $20,000 which had probably been loaned by her to Tony Bufalo for his use with respect to meeting the obligations of the plaintiff company.

At the time that the arrangement was entered into between the defendant and Tony Bufalo which resulted in the defendant living in the Property it was in a somewhat dilapidated state and to some extent had suffered at the hands of vandals. In order to live in the premises it was necessary for the same to be cleaned and tidied up and some repairs to be made to the premises. It was also necessary for appliances such as a stove to be put in the premises and for the hot water service to be reconnected. The arrangement between Tony Bufalo and the defendant was that the defendant would meet these expenses. At the time that the Property was acquired by the plaintiff it was the intention of the plaintiff to demolish the premises on the Property and to redevelop the Property by erecting a building to be used as a special accommodation home. I am satisfied that this was known to the defendant.

It was the expectation of Tony Bufalo that it would probably take some two years to obtain the necessary permits to enable the premises to be demolished and the Property to be redeveloped**.** Tony Bufalo had told the defendant this matter. The fact that it was agreed that the defendant would pay for any repairs to the premises and expenses necessarily incurred to enable her to live in the same it was understood by Tony Bufalo and the defendant that in the long run such repairs or work performed would not enhance the value of the Property as it was intended to demolish the premises erected on the same. It was clear from the evidence of the defendant that she was prepared to assist in any way she could to advance the cause of Tony Bufalo and the Bufalo family. It became very apparent during the course of the evidence of Tony Bufalo that he was very considerably upset with and bitter towards Prime Life Corporation Ltd, the Chargee, the company which had appointed the Receiver and Manager of the plaintiff company. It also became apparent during the evidence of the defendant that she was seeking to continue to live in the Property and to frustrate the claim of the plaintiff in these proceedings as instituted and prosecuted by the Receiver and Manager. Tony Bufalo was seeking to support the defendant in that respect. I am satisfied that the arrangement that was entered into between the defendant and Tony Bufalo for the defendant to live on the Property was that she would pay for repairs and costs incurred as were necessary for her to live in the Property but there was no agreement that the defendant would meet such expenses in lieu of payment of rent by her to the plaintiff company. I am not satisfied that there was any agreement or arrangement entered into between Tony Bufalo and the defendant to the effect that if she continued living in the premises beyond a period of two years then by some means and in some amount, not specified, the amount of the indebtedness of the plaintiff company to the defendant, in the sum of $20,000 would be reduced in lieu of the payment of rent.

Although it was the expectation of Tony Bufalo that it would take some two years for permits to be granted to enable the premises on the Property to be demolished and the Property to be redeveloped, no specific term was fixed as between the defendant and Tony Bufalo as to the period that the defendant could live in the premises. No written agreement between the defendant and the plaintiff company or Tony Bufalo was entered into with respect to the defendant's occupation of the Property nor was any note as to this matter recorded between them. I am satisfied that although there may have been an expectation that the defendant may have been able to live in the premises on the Property for a period of two years, it was accepted by Tony Bufalo and the defendant that in the event of the plaintiff company requiring possession of the premises at any time while she remained living in the same, she would vacate the premises on being requested to do so by Tony Bufalo and that there would be no requirement for a formal notice or written notice being given to her.

In determining whether the arrangement entered into between the defendant and Tony Bufalo by which the defendant commenced to live in the premises on the Property and was living in the same at the time that she received the aforesaid notice, gave to the defendant a lease of the Property and that the relationship between the plaintiff and the defendant was that of lessor or lessee or that which was enjoyed by the defendant was a licence to live in the premises on the Property and that the relationship existing between the plaintiff company and the defendant was that of a licensee and licensor, the "decisive" matter to be had regard to is whether the agreement gave to the defendant exclusive possession of the Property for a term - Radaich v Smith[6]; Chelsea Investments Pty Ltd v Commissioner of Taxation[7]; Goldsworthy Mining Ltd v The Commissioner of Taxation[8]; Dampier Mining Co Ltd v The Commissioner of Taxation[9].

However, it is to be noted that in his judgment in Goldsworthy Mining Ltd v The Commission of Taxation at p. 212 Mason J. expressed the opinion that the decision of the judicial committee in Isaac v Hotel de Paris Ltd[10] was not inconsistent with Radaich v Smith. In Isaac v Hotel de Paris Ltd the appellant had exclusive possession of a night bar which he conducted pursuant to an agreement that he had with the respondent which had a lease of the premises, it being agreed between the appellant and the respondent that the appellant would pay rent to the respondent which in turn it would pay to the landlord. It was held by the judicial committee (the judgment of which was delivered by Lord Denning) at p. 352 that, "the circumstances and conduct of the parties show that all that was intended was that the appellant should have a personal privilege of running a night bar on the premises with no interest in the land at all" and that the relationship between the parties was not that of landlord and tenant but of licensor and licensee.

Although the defendant lived in the premises at the Property at the invitation of Tony Bufalo and although she was to meet the expenses that I have referred to, I am unable to conclude that by the oral agreement entered into between them she obtained a right to exclusive occupancy of the premises for a term. She had nothing more than a mere license to occupy the premises. She had agreed to meet expenses associated with making the premises habitable and it was recognised by the defendant that if requested by Tony Bufalo, before the expiration of the period during which there was an expectation that she could live in the premises, she would vacate the premises. In my view, in the circumstances as existing between the defendant and Tony Bufalo it was never the intention of the defendant and Tony Bufalo that she would have an interest in the Property. She lived there as a convenience to herself and for the benefit of the plaintiff company in order that someone may be occupying the Property during the period of time, before any permit was granted. Accordingly, the conclusion that I have reached is that following the arrangement entered into between the defendant and Tony Bufalo, on behalf of the plaintiff company, the defendant lived in and occupied the Property as a licensee of the plaintiff company. It permitted her to live there until the Property was needed. The relationship existing between the plaintiff company and the defendant was that of licensee and licensor and not lessee and lessor.

Pursuant to cl. 9.1 of the Debenture Charge the Receiver and Manager was empowered to take possession of, "the whole or any part of the Charged Property". The Property the subject of these proceedings was part of the Charged Property. Accordingly as Receiver and Manager of the plaintiff company the Receiver and Manager as agent for the plaintiff company was able to give notice to the defendant to quit the Property.

In Cowell v Rosehill Racecourse Co Ltd[11] Dixon J. said:

"A license which is not coupled with or granted in aid of an interest is revokable at law. It operates as a bare permission to do what would otherwise be an invasion of the licensor's rights. If the permission is terminated, further continuance of the acts it authorised become wrongful. A licensee does not become a trespasser until he has received notice that the license is countermanded and until a reasonable time has elapsed in which he may withdraw from the land and remove whatever property he has brought in pursuant to the licence."

By the terms of the notice received by the defendant on or about 12 August 2000 she was required to quit the premises and deliver up possession of the same by 5.30 13 September 2000. The period of time given to the defendant by the notice was in my view a reasonable time and was such a period as was contemplated by Tony Bufalo that he would give the defendant if the plaintiff company needed her to leave the Property. As at 5.30, 13 September 2000 any right that the defendant had to occupy the Property was terminated by the notice. Thereafter the defendant was and remains as between herself and the plaintiff company a trespasser on the Property.

Pursuant to the powers vested in the Receiver and Manager pursuant to cl. 9.1(a), (c), (l), (n), "To take possession of collect and get in the whole or any part of the charged property"; "To carry on... the business of the Chargor... and to do all acts which the Chargor might do in the ordinary conduct of its business for the protection or improvement of the Charged property or any of them or for obtaining income or returns therefrom"; "to take proceedings at law or in equity or in bankruptcy in the name of the Chargor or otherwise for all or any of the purposes aforesaid; and "to do all such other acts and things without limitation as such receiver shall think expedient in the interests of the Chargee" and the powers vested in the Receiver and Manager pursuant to the provisions of s. 420(2)(a), (h), (k), of the Corporations Law and the Corporations Act 2001, in my view, the Receiver and Manager had power to bring these proceedings in the name of the plaintiff company as its agent to recover damages against the defendant in trespass for her continued trespass on the Property thereby preventing the Receiver and Manager recovering possession of the same: Inglis Electrix Pty Ltd v Healing (Sales) Pty Ltd[12].

The Receiver and Manager as agent for and in the name of the plaintiff company is able to recover in these proceedings against the defendant the damages in the nature of mesne profits, to be calculated as being equal to the market rent that could have been obtained by the Receiver and Manager for the Property during the relevant period. The evidence of the witness, Sutherland, which I accept was that the rental value of the Property as estimated by him was $500 per week. The period from 14 September 2000 to this day, 20 December 2001, inclusive comprises 463 days being 66.14 weeks. The damages thereby suffered as calculated on the market rent of $500 per week for that period amounts to $33,071.43. I propose to order that there be judgment for the plaintiff against the defendant for damages by way of mesne profits in the sum of $33,071.43. However, as the mortgagee obtained an order against the defendant for possession of the Property on 24 August 2001 I propose to order that the defendant pay to the plaintiff such proportion or part of such damages as is referable to the period from 14 September 2000 to 24 August 2001 being $24,642.86 and that the balance of such damages namely $8,428.57 be paid into court in order that it may be determined as between the plaintiff and the mortgagee their respective entitlements to payment of the same.

The plaintiff further seeks against the defendant pursuant to s. 60 of the Supreme Court Act 1986 damages in the nature of interest from the commencement of this proceeding to today's date, the date of judgment, over and above the damages awarded. That section provides that on such application as is made on behalf of the plaintiff for damages in the nature of interest, the court is required to order that such damages be paid, "unless good cause is shown to the contrary". There is no reason why such damages should not be awarded against the defendant in these proceedings. I will hear counsel as to the calculation of such damages in the nature of interest.

As referred to in this judgment, on the day fixed for the commencement of trial of this proceeding, on application of the defendant, the commencement of the trial was adjourned until 27 November 2001. I reserved the question of cost of the adjournment.

On the first day counsel for the plaintiff made it clear that the plaintiff was prepared to start the trial that day. Having read the affidavits of the defendant's former solicitor, Joe Dorfman, sworn on 20 and 22 November 2001 and having regard to the close relationship existing between the defendant and Tony Bufalo, I am satisfied that Dorfman took appropriate steps to bring to the attention of the defendant that the date fixed for trial of this proceeding was 22 November 2001. No act or omission of that solicitor caused the defendant to be not ready for the trial to commence a 22 November 2001. In my view the defendant should pay the plaintiff's cost of and incidental to the adjournment of the trial on 22 November 2001.

For the reasons expressed in this judgment it is ordered as follows:

1. That the plaintiff recover possession from the defendant of the Property situate and known as 410 Wattletree Road, Malvern, being the property more particularly described in Certificate of Title Volume 8184, Folio 065.

2. That there be judgment for the plaintiff against the defendant for damages in the nature mesne profits in the sum of $33,071.43 and

(a) that the defendant pay to the plaintiff such part or portion of such damages as amounts to $24,642.86

(b) that the defendant pay into court in these proceedings such balance or remaining part or portion of such damages as amounts to $8,428.57

3. That the defendant serve on the solicitors for LaTrobe Investment Services Pty Ltd, being the mortgagee of the mortgage registered on the Certificate of Title of the property referred to in Order 1, within seven days of this date, an authenticated copy of these orders.

4. That the defendant pay the plaintiff's cost of the day being 22 November 2001, including any costs thrown away by reason of the adjournment of the trial ordered that day.

[2] [1943] HCA 4; (1943) 68 CLR 354, Williams J. at p. 382.

[4] (1968) 88 WN (Pt1) (NSW) 195 at 196.

[7] [1966] HCA 15; (1966) 115 CLR 1 Windeyer J. at p. 7.

[8] [1973] HCA 7; (1973) 128 CLR 199, at 212 per Mason J.

[9] [1981] HCA 29; (1981) 147 CLR 408, Wilson and Mason JJ. at p. 428.

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