//
© 2026 Zoe. All rights reserved.
Zoe is a legal information platform. Always consult the Federal Register of Legislation for authoritative text.
[2001] NSWSC 784
Supreme Court of NSW
2001-08-29
Hamilton J, Santow J
Original judgment source is linked above.
CITATION : Ell v Cisera [2001] NSWSC 784 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 2016/00 HEARING DATE(S) : 29 August 2001 JUDGMENT DATE : 29 August 2001
PARTIES : Richard Ell t/as GNP Printing (P) Dino Cisera (D) JUDGMENT OF : Hamilton J
COUNSEL : H Thurairajah, Sol (P) D L Oliveri, Sol (D) SOLICITORS : Thurai Rajah Lawyers (P) Oliveri Solicitors (D) CATCHWORDS : EQUITY [31] - General principles - Equitable charges and liens - Generally - Whether lien created by words incorporated in order of Court was a possessory lien or an equitable charge - Whether Court had power to enforce by order for sale. Akki Pty Ltd v Martin Hall Pty Ltd (1994) 35 NSWLR 470 Bolwell Fibreglass Pty Limited v Foley [1984] VR 97 Ell v Cisera [2001] NSWSC 242 Ex parte Patience; Makinson v The Minister (1940) 40 SR (NSW) 96 Marshall v South Stafford Tramways Company [1895] 2 Ch 36 Mulliner v Florence (1878) 3 QBD 484 CASES CITED : Neate v Duke of Marlborough (1838) 3 My & Cr 407 at 417; 40 ER 983 at 987 Radaich v Smith (1959) 101 CLR 209 The Queen v Toohey; Ex parte Meneling Station Proprietary Limited (1982) 158 CLR 327 Worrell v Power (1993) 46 FCR 214 Ashburner's Principles of Equity (2nd ed, 1933) 251 Butterworths Australian Legal Dictionary (1997) 4 Pomeroy's Equity Jurisprudence (5th ed, 1941) ss 1233, 1235 Story's Equity Jurisprudence (3rd English ed, 1920) pars 1216a, 1217 DECISION : Order made authorising sale of chattels by private treaty.
IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION
2016/00 RICHARD ELL t/as GNP PRINTING v DINO CISERA
1 His Honour: This is an application by the defendant by motion dated 16 August 2001 for leave to sell certain goods not by auction but by private treaty. The matter arises in this way. The arrangement under which the goods (which are printing equipment) ("the equipment") are held and from which the defendant's right to sell them arises was created by an agreement of the parties which was embodied in an interlocutory order of this Court made by Santow J on 6 April 2000. In a dispute between landlord (the defendant) and tenant (the plaintiff), agreement was reached for the tenant, who had been locked out of the premises, to re-enter and to reinstate a concrete floor to which damage had been done. Order 4 provided as follows: "4(a) If at the end of the 14 days the parties agree that there has not been adequate reinstatement or failing agreement, the experts so determine, the Defendant shall have a lien upon the equipment for the cost of proper reinstatement."
Nothing further appears in the orders as to the rights conferred by the "lien" or the way in which they may be enforced. 2 In the events which happened it was subsequently determined by the Court that the defendant was "entitled to a lien over the equipment ... for the cost of the proper reinstatement of the premises in accordance with the orders made by Santow J on 6 April 2000": see Ell v Cisera [2001] NSWSC 242 [11] and order 2 of the orders made by me on 23 April 2001. That order was not made by consent, but was made by the Court in the determination of a dispute between the parties. However, there was incorporated in the same orders an order that was made by consent noting the agreement of the parties that the defendant might sell the equipment at public auction, provided he had given the plaintiff notice thereof. It is important to note that the equipment was not at the time of the making of the orders in the defendant's possession, but was delivered into the defendant's possession in accordance with those orders. 3 The defendant carried out extensive inquiries as to the likely result of an auction if one were held and as to how the equipment might otherwise be disposed of. In short, an auctioneer, Dominion Valuers and Auctioneers, did give a valuation of $4,400 of the equipment. However, advice from Machinery Internet Graphics Pty Limited was to the effect that there was virtually no market for equipment of this age and condition in Australia and that the best that could be done with it was to sell it into an overseas market, possibly Chile or India, where it might fetch up to $10,000. That company expressed the views that the equipment is "of no domestic value (antiquated technology)"; there would therefore be poor buyer attendance at an auction; and that auctioneers would have little or no interest in running an auction on the equipment. They, too, suggested that an auction would yield a gross return of no more than $5,000. It would seem that the return from an auction of $4,000 to $5,000 would be reduced by various deductions to as little as $1,100 to $1,200 net. 4 The defendant, faced with this advice, investigated the overseas markets. A gentleman from India did in fact inspect the equipment, but upon discovering that the equipment was 1970s rather than 1980s technology (as at first thought) evinced no further interest in the equipment. It seems on the evidence that, even in the overseas markets where older technology is acceptable, the technology of this equipment is too old to attract interest, bearing in mind the undoubted cost of removing the equipment halfway across the world to use it. The defendant then made extensive inquiries to see what local offers could be elicited. Perhaps a little surprisingly, in the face of the pessimism up to that point, these inquiries did elicit an offer from NCP Printing of Newcastle West of $8,780 including GST and removal costs. The defendant now seeks leave to sell the equipment by private treaty to that prospective purchaser. 5 Miss Thurairajah, on behalf of the plaintiff, takes two objections to this course. The first is that the offer of $8,780 throws doubt upon the burden of the defendant's advice that the equipment was virtually unsaleable and that the net return from it would be as little as $1,100 to $1,200. Whilst this submission has some force, I think a more realistic view in the face of the extensive inquiries made by the defendant is, not so much that the general pessimism is wrong, but that there has been a piece of good fortune in the location of a prospective purchaser to whom this equipment has rather unexpectedly a particular value or attraction. The risk is, if this purchaser's offer is refused, it may simply withdraw its interest, being the only interest so far displayed or, alternatively, may attend at the auction, bid a lower price than it has now offered, and decline to return to its present offer, which would necessarily have been rejected for the auction to take place. 6 In all the circumstances, if the equipment is to be sold, it seems to me imprudent that the present offer should be refused, and I should be minded to permit that offer to be accepted. In coming to this conclusion I repeat that the inquiries made by the defendant are quite extensive and I note that the plaintiff has not chosen to make any inquiries or bring forward any evidence of his own as to prospective purchasers or the value of the equipment. It has been said that the reason for this was that the equipment was not in his control, but there is no suggestion that he asked the defendant whether the defendant would facilitate any inquiries made by the plaintiff or permit the equipment to be shown to any interested person introduced by the plaintiff and that the defendant refused that permission. There is no suggestion that that occurred or that the defendant would have been unwilling to facilitate any reasonable avenue of favourable sale of the equipment. 7 Miss Thurairajah takes the further objection that it was only by agreement of the plaintiff that there was any right to sell at all and that that agreement was limited to a sale by auction, so that there is no power in the defendant to effect or the Court to permit a sale of the equipment by private treaty. This submission depends upon the argument that the use of the word "lien" in conferring rights upon the defendant confers rights only of a possessory nature, that is, a right to take possession of and keep the equipment in his possession until payment of the stipulated amounts. 8 The word "lien" is a word of far from certain content that is used in the law in a number of different contexts. This is illustrated by the entries "Lien" and "Equitable lien" in Butterworths Australian Legal Dictionary (1997) edited by the Hon Dr Peter E Nygh and Peter Butt. Among the contexts in which the word is used are contexts of bailment, corporations, insurance, legal practitioners and real property (as listed in the general entry "Lien") and also the context of liens created and enforced in equity as noted in the entry "Equitable lien". Liens in these various contexts may be created by contract, by statute, by operation of general law or by order of an equity court. In some contexts, particularly that of an artificer's lien, the lien does undoubtedly confer only possessory rights and confers no power of sale: Mulliner v Florence (1878) 3 QBD 484 at 489; Bolwell Fibreglass Pty Limited v Foley [1984] VR 97 at 117. However, in other contexts a lien does confer not only a right of possession but rights of action to recover moneys, as in the case of legal practitioners' liens over the fruits of litigation: Ex parte Patience; Makinson v The Minister (1940) 40 SR (NSW) 96 at 100; Worrell v Power (1993) 46 FCR 214 at 222 - 224; Akki Pty Ltd v Martin Hall Pty Ltd (1994) 35 NSWLR 470 at 473 - 474. 9 In this particular case the "lien" relied on is the creation of an agreement between the parties embodied in an order of the Court. The content of the word must be established in my view by the proper construction to be put upon the word in the context of all the words of the order and of the circumstances in which the agreement was come to and the order made. Typically, liens which are possessory only arise where a workman or service provider has done work upon the very goods which are the subject of the lien, or the goods have been created in the course of the work (as with a legal practitioner's papers), and the goods remain in the possession of the person who has done the work. Here the situation was quite different. The equipment was at no stage to be the subject of work by the landlord and was not necessarily to be in the landlord's possession at the time the entitlement to the lien arose. The purpose of the creation of the right, looked at in the context of the order and the situation in which the order was made, was to give the landlord an enforceable security to permit him to recover moneys which the tenant might become liable to pay him arising out of the situation in which they found themselves. Although the word "lien" was used, the law is often rigorous in requiring that the nature of rights conferred be determined by the real subject matter of the transaction rather than formal reference to the use of a particular word or formula: see Radaich v Smith (1959) 101 CLR 209 at 221 - 222; The Queen v Toohey; Ex parte Meneling Station Proprietary Limited (1982) 158 CLR 327 at 341 - 343, 352. 10 In my view, construing the word in the context of the agreement, the order and the surrounding circumstances, the intention of the agreement was to confer upon the defendant not simply a possessory right but a right of hypothecation or charge with, inherent in it, power in an equity court to permit the sale of the property charged by way of enforcement of the charge given: Ashburner's Principles of Equity (2nd ed, 1933) 251; 4 Pomeroy's Equity Jurisprudence (5th ed, 1941) ss 1233, 1235; Story's Equity Jurisprudence (3rd English ed, 1920) pars 1216a, 1217; Neate v Duke of Marlborough (1838) 3 My & Cr 407 at 417; 40 ER 983 at 987; Marshall v South Stafford Tramways Company [1895] 2 Ch 36 at 50. In those circumstances, in my view, the power to order a sale of the equipment in the present circumstances is not a power given solely by the agreement embodied in order 4 of the orders of 23 April 2001. The Court has a general power to permit the sale of the equipment by way of enforcement of the "lien" or charge to which the defendant is entitled and has power therefore, where the circumstances are appropriate, to permit that sale to take place by way of private treaty. The views that I have already expressed in [5] above make plain that I think it appropriate that the particular sale by private treaty advocated by the defendant ought be permitted, and I propose to make the order sought by prayer 1 of the notice of motion. I shall vary order 5 of the orders made by me on 23 April 2001 by deleting from that order the words "from an auctioneer". I shall order that the plaintiff pay the defendant's costs of the motion. …oOo…
Last Modified: 11/06/2001 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Ell
Cisera