Citation : ST KILDA BEACH TAXI SCHOOL AND STAFFING PTY LTD -v- CENTRAL TAXI MANAGEMENT PTY LTD [2012] WADC 114

Contract - Lease of taxi plates - Whether finding that lease was for indefinite term was contrary to default judgment in other proceedings - Whether default judgment constituted admission of relevant facts - Rules of the Supreme Court 1971 (WA), O 20 r 14(1) - Whether findings of fact of primary judge were against the weight of the evidence - Availability of account of profits

Rules of the Supreme Court 1971 (WA), O 20 r 14(1)

Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424

City of Stirling v Dueschen [2011] WASC 126

Colbeam Palmer Ltd v Stock Affiliates Pty Ltd [1968] HCA 50; (1968) 122 CLR 25

Fox v Percy [2003] HCA 22; (2003) 214 CLR 118

Gramophone Co Ltd v Magazine Holder Co (1911) 48 SLR 1081; (1911) 28 RPC 221

Harris v Digital Pulse Pty Ltd [2003] NSWCA 10 [414]; [2003] NSWCA 10; (2003) 56 NSWLR 298

Leeder v The State of Western Australia [2008] WASCA 192

Minister for Immigration, Local Government and Ethnic Affairs v Hamsher [1992] FCA 184; (1992) 35 FCR 359

Nixon v W Phelan and Son Pty Ltd [1959] VicRp 14; [1959] VR 83

Parkville Court Pty Ltd v Salvaris [1975] VicRp 38; [1975] VR 393

Powell v Aiken [1858] EngR 474; (1858) 4 K & J 343; 70 ER 144

St Kilda Beach Taxi School and Staffing Pty Ltd v Central Taxi Management Pty Ltd [2012] WADC 114

Termijtelen v Van Arkel [1974] 1 NSWLR 525

Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544

Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531

1 NEWNES JA: This is an appeal from a judgment of Bowden DCJ in the District Court in which his Honour ordered that the appellant (Embleton) deliver up to the first respondent (St Kilda) a taxi plate, plate 529, and that Embleton pay to St Kilda the sum of $18,249 by way of an account of profits: St Kilda Beach Taxi School and Staffing Pty Ltd v Central Taxi Management Pty Ltd [2012] WADC 114.

2 St Kilda was the owner of plate 529, which it had leased to the second respondent (CTM). Apparently unbeknown to St Kilda, the third respondent (Mr Saedi), the sole director of CTM, subsequently provided the plate to Embleton. At the end of its lease, CTM was unable to return the plate to St Kilda, the plate being in Embleton's possession. Embleton declined to deliver up the plate, contending that it had entered into a five year lease of the plate from St Kilda, through CTM or alternatively Mr Saedi as St Kilda's agent, and that it was entitled to possession of the plate.

3 St Kilda commenced action against CTM and Embleton to recover the plate. St Kilda denied that CTM or Mr Saedi was its agent and said that CTM was merely the lessee of the plate. Mr Saedi, for his part, denied that the plate had been leased to Embleton for a five year term. He said that CTM had leased the plate to Embleton for an indefinite term and that lease had been lawfully terminated by CTM.

4 The primary judge found that neither CTM nor Mr Saedi was the agent of St Kilda for the purpose of letting the plate and that CTM had sub-leased the plate to Embleton. His Honour further found that the sub-lease was not for a five year term but for an indefinite term, and that CTM had lawfully terminated the sub-lease. St Kilda was therefore entitled to possession of the plate and to an account of profits by Embleton.

5 Embleton contends that his Honour was in error in making those findings. It says his Honour should have found that CTM, or alternatively Mr Saedi, was acting as the agent of St Kilda in leasing the plate to Embleton and that the lease was for a term of five years. In the alternative, Embleton contends that on the facts his Honour erred in finding that St Kilda was entitled to an account of profits, as St Kilda had received the maximum rental permitted under the Taxi Act 1994 (WA). It was not, however, contended that an account of profits was not available in a claim of this nature. (I should note that apart from the reference to the maximum rental, neither party contended that the statutory context had any relevance to the disposition of the issues in the appeal and these reasons proceed on that assumption).

6 For the reasons which follow, I would dismiss the appeal.

7 The relevant issues on the pleadings were as follows. St Kilda pleaded that by a written contract dated 28 December 2008, it had leased plate 529 to CTM for a period of 21 months, to 30 September 2010. Upon the expiry of the lease, CTM had failed to return the plate and informed St Kilda that the plate was in the possession of Embleton, which refused to return it. St Kilda pleaded that, despite demand, Embleton refused to deliver up the plate to it.

8 St Kilda claimed against CTM damages for breach of the lease and against Embleton delivery up of the plate and an account of profits.

9 Embleton did not admit that St Kilda had leased the plate to CTM. It claimed the alleged lease to CTM was a sham and unenforceable. Embleton alleged that, in any event, it had acquired a leasehold interest in the plate for value and without notice of the alleged lease agreement between St Kilda and CTM and it was therefore entitled to possession of it. It further alleged (apparently in the alternative) that it had paid and continued to pay to CTM (as St Kilda's agent) the maximum rental permissible under the Taxi Act so that St Kilda had suffered no loss.

10 Embleton counterclaimed against St Kilda, seeking a declaration that there was a subsisting lease of plate 529 by St Kilda to Embleton. The lease was alleged to be partly oral and partly by conduct. Insofar as it was oral, it was said to have been made at a meeting in or about April 2008 at Embleton's premises between Mr Saedi on behalf of CTM, as agent of St Kilda, and Mr Johnson (a director of Embleton) on behalf of Embleton, at which it was agreed that Embleton would lease plate 529 and four other taxi plates from St Kilda for a period of five years with a five year option, on certain payment terms. Insofar as it was by conduct, it was said to be constituted by the delivery of plate 529 to Embleton in December 2008 and by the subsequent payment by Embleton of the agreed lease payments to Mr Saedi or CTM, as the agent of St Kilda.

11 In the alternative, Embleton alleged that St Kilda was estopped from denying that CTM was its agent. Further alternatively, Embleton alleged that CTM, on its own behalf or on behalf of St Kilda, had made false representations that it would enter into a lease of plate 529 to Embleton, and Embleton claimed damages against CTM, alternatively St Kilda, pursuant to s 82 of the Trade Practices Act 1974 (Cth) and/or s 79 of the Fair Trading Act 1987 (WA).

12 In its defence to the counterclaim, St Kilda denied that Mr Saedi or CTM acted as its agent.

13 The circumstances of the agreement between St Kilda and CTM, as found by the primary judge, were not in issue on the appeal and, in substance, were as follows.

14 St Kilda was based in Victoria and was involved in the leasing and management of taxi plates. At the time of the relevant events, Mr Muhbub Ismail managed the licensing of St Kilda's taxis. He had worked for St Kilda for approximately 15 years. On 25 November 2008, Mr Ismail told Mr Saedi that he was travelling to Western Australia to purchase taxi plates. Mr Saedi expressed interest in leasing one of the plates (ts 58). At that time, CTM had not been incorporated.

15 Mr Ismail subsequently travelled to Western Australia and purchased plate 529 on 28 November 2008. He then contacted Mr Saedi to enquire if he was still interested in leasing a plate. Mr Saedi said he was and that he was in the process of forming a new company. Mr Saedi said that the company would lease the plate.

16 It appears that CTM was incorporated on 15 December 2008. By a written agreement dated 28 December 2008, CTM agreed to lease plate 529 for a term of 21 months with an option to negotiate a renewal of the lease. That agreement reflected an earlier oral agreement made on 28 November 2008.

17 It appears that Mr Saedi took possession of plate 529 on about 18 December 2008. Shortly afterwards he spoke by telephone to an employee of Embleton, Mr Osman, and told Mr Osman to collect a taxi plate from a firm in Perth, Nova Communications. Mr Osman did so. The plate was plate 529. There was no discussion in the telephone conversation as to the basis upon which Embleton was to have possession of the plate.

18 The evidence at trial is not easy to follow and nor is it always easy to reconcile with the pleadings. However, in substance two quite different accounts were given of the arrangement between Mr Saedi and Embleton in relation to plate 529.

19 Turning first to Embleton's account, Mr Johnson, Mr Bekhit, the service and car yard manager for Embleton, and Mr Osman, the taxi fleet manager for Embleton, each gave evidence of attending a meeting in April 2008 with Mr Saedi. The primary judge did not, however, accept that Mr Bekhit and Mr Osman were at the meeting. He found that only Mr Johnson attended on behalf of Embleton. That finding is not challenged on the appeal.

20 According to Mr Johnson's evidence, at the meeting Mr Saedi said he was acting on behalf of Victorian taxi plate owners and asked if Embleton was interested in leasing taxi plates. No specific plates were identified (ts 209 - 210). Mr Johnson said he did not have enough vehicles. Mr Saedi said he could provide as many vehicles as were needed. Mr Johnson replied he would only be interested in leasing taxi plates for a minimum of a five year term (ts 132). Mr Saedi agreed to that. It was agreed between Mr Johnson and Mr Saedi that Embleton would pay the sum of $390 per week for each taxi plate supplied by Mr Saedi and the sum of $110 per week for any vehicle supplied by him when a taxi plate was attached to it.

21 Another, quite different, account was given by Mr Saedi and Mr Kasimoglu, his business partner. In this instance, the primary judge rejected the evidence of Mr Saedi and Mr Kasimoglu that Mr Kasimoglu attended the meeting with Mr Johnson. His Honour found that only Mr Saedi attended it. Again, that finding is not challenged on the appeal.

22 In his evidence, Mr Saedi said that he and Mr Kasimoglu had jointly purchased four unregistered motor vehicles at auction in Victoria for approximately $64,000. He said those vehicles had been delivered to Embleton's premises by the time of the meeting with Mr Johnson, which Mr Saedi said took place on 30 May 2008. According to Mr Saedi, he asked if Mr Johnson could operate four plates on behalf of Mr Saedi and Mr Kasimoglu. He told Mr Johnson that would involve providing the drivers and doing the maintenance and all the 'other things'. Mr Johnson asked him to return the next day. Mr Saedi said at that stage he had access to four plates:

1. Plate 597, which he had purchased jointly with Mr Kasimoglu in about December 2007;
2. Plate 181, which Mr Kasimoglu had purchased in September 2007;
3. Plate 468, purchased by another party, Mr Kapelin, on about 29 May 2008, and jointly leased by Mr Saedi and Mr Kasimoglu; and
4. Plate 879, purchased by Mr Kapelin on about 29 May 2008, and jointly leased by Mr Saedi and Mr Kasimoglu.

23 According to Mr Saedi, at a meeting the following day Mr Johnson said he would be prepared to lease the four plates and the four cars for a total of $500 per week for each plate and car combination. After some unfruitful haggling, Mr Saedi agreed to that. Mr Saedi said there was no discussion about the term of the lease and there was no agreement to lease the plates for a five year term. Nor, according to Mr Saedi, did he say that he represented the owners of the plates.

24 It was not in issue on the appeal that four motor vehicles were supplied to Embleton by Mr Saedi in May 2008 and that at various times the four taxi plates mentioned above were also supplied by Mr Saedi, prior to the delivery of plate 529 on about 18 December 2008 [224], [228]. Plate 529 was attached by Embleton to a vehicle supplied by Mr Saedi. Embleton has since duly made lease payments of $390 per week in relation to plate 529 to Mr Saedi's personal bank account.

25 The primary judge found that the meeting at which the agreement was made occurred at Embleton's premises in April 2008, not May 2008, and that the agreement was made between Mr Saedi on his own behalf and Embleton [223], [224]. His Honour considered that the evidence of all of the relevant witnesses as to what occurred at the meeting was unsatisfactory. As mentioned earlier, he rejected the evidence of Embleton's witnesses that Mr Bekhit and Mr Osman attended the meeting and he also rejected the evidence of Mr Saedi and Mr Kasimoglu that Mr Kasimoglu attended it [225]. His Honour found that only Mr Johnson and Mr Saedi were present at the meeting.

26 In light of the unsatisfactory nature of the evidence and the absence of any contemporaneous documents directly relevant to the agreement, his Honour concluded that the evidence of Mr Johnson and Mr Saedi as to what was agreed was to be assessed in light of the inherent probability of a particular version of events in the context of established objective facts [222].

27 The primary judge found that Mr Saedi represented that he acted as agent of the owners of the taxi plates [226]. His Honour accepted Mr Johnson's evidence that Mr Saedi orally offered to supply an unspecified number of unidentified taxi plates and an unspecified number of vehicles, and that Mr Johnson, on behalf of Embleton, agreed to lease the taxi plates for the sum of $390 per week each and the vehicles for the sum of $110 per week each [227], [252]. He rejected Mr Saedi's evidence that Mr Johnson agreed that Embleton would pay a single sum of $500 for each taxi and plate combination, limited to four identified plates and vehicles [237]. On that issue, the primary judge noted that when, in December 2008, Mr Saedi provided plate 529, he had already supplied four plates and four vehicles and his evidence was that he expected to get $390 per week for plate 529.

28 The primary judge did not, however, accept Mr Johnson's evidence that a five year lease of the plates had been agreed. He did not accept it because of what he described as the partiality and unsatisfactory nature of Mr Johnson's evidence, and the lack of any written agreement or any contemporaneous documents supporting such an agreement [232]. His Honour concluded that the objective circumstances supported Mr Saedi's evidence that no such term had been agreed [233].

29 In that connection, the primary judge found that at the time of the meeting it must have been in Mr Saedi's contemplation that not all the plates he provided would be owned by him. The evidence established that taxi plates were bought and sold regularly for a variety of reasons and Mr Saedi must have been aware of that. His Honour considered it inherently improbable that Mr Saedi would effectively tie up taxi plates he may not own for a minimum period of five years, with a potential for the plates to be tied up for 10 years [234].

30 His Honour accepted that the amount of $390 per week to be paid by Embleton for each plate was the statutory maximum and therefore the plate owners could not get a higher rate from anyone else. However, his Honour considered that Mr Saedi must have been aware that a new owner of a plate, or even an existing owner, might appoint someone else to manage the plate and may call for the plate to be delivered up for that purpose [235].

31 The primary judge concluded that in those circumstances Mr Saedi's evidence that no five year term had been agreed was the more plausible [236].

32 The primary judge further concluded that notwithstanding Mr Saedi's representation in April 2008 that he was acting on behalf of the owners of the plates, neither Mr Saedi nor CTM was in fact the agent of St Kilda to lease plate 529 [238]. His Honour considered it inherently improbable that St Kilda would authorise someone to act as their agent when Mr Ismail, a long-standing employee of St Kilda, had been managing all of its licensing in Victoria and Western Australia for some 15 years. His Honour found Mr Ismail to be an honest and credible witness and accepted his evidence 'without reservation' [239].

33 The primary judge also rejected Embleton's claim that St Kilda was estopped from denying that Mr Saedi was its agent. His Honour found there was nothing in St Kilda's conduct capable of giving rise to an estoppel. Its conduct in giving possession of plate 529 to Mr Saedi was entirely consistent with St Kilda's belief that it had entered into a binding lease of the plate to CTM on 28 November 2008 [241]. The primary judge also dismissed Embleton's claims under the Trade Practices Act and the Fair Trading Act.

34 His Honour rejected Embleton's contention that the lease of plate 529 by St Kilda to CTM was a sham and found that it was an enforceable lease [250]. He further found that while Embleton had leased the plate from Mr Saedi without notice of the lease agreement between St Kilda and CTM, Embleton had not done so for a fixed term but for an indefinite term. The result was that the lease to Embleton was terminable either at will or on reasonable notice [255].

35 The primary judge found that Mr Saedi had demanded that Embleton return the plate on the expiration of the lease by St Kilda to CTM on 30 September 2010 [256]. That constituted reasonable notice of the termination of Embleton's lease and Embleton's entitlement to possession of the plate ceased at that date [257]. Its failure to deliver it up pursuant to a demand made by St Kilda on 2 February 2011 gave St Kilda a right of action against Embleton. It followed that St Kilda's claim had been made out [259] - [262], and it was therefore entitled to an order that Embleton deliver up the plate.

36 The primary judge further found that St Kilda was entitled to an account of profits from 2 February 2011 to judgment, a period of 77 weeks. His Honour found that the average weekly profit to Embleton from the plate over that period was $237, amounting to the total sum of $18,249. Embleton was ordered to pay that sum to St Kilda.

38 Embleton relied upon the following grounds of appeal:

1. The learned trial judge erred in law in finding [J 263-267] that [St Kilda] was entitled to an account of profits from [Embleton] in the amount of $18,249.00 ....
2. The learned trial judge erred in law in finding [J 233-236] that there was no agreement for the Plates to be leased by Mr Saedi for a 5 year term when, on balance, such a finding by his Honour was against the weight of the evidence or, alternatively, contrary to objective facts not in issue.
3. The learned trial judge erred in fact and in law in finding [J 238] that neither CTM nor Mr Saedi were appointed as agent(s) to act on St Kilda's behalf when, on balance, such a finding by his Honour was against the weight of the evidence or, alternatively, contrary to the objective facts not in issue.
4. Should Ground 2 be upheld and an agreement for a 5 year term is established, then his Honour consequently erred in law by finding Mr Saedi did not otherwise breach his implied warranty of authority [J237] - as his Honour had already found Mr Saedi did represent to [Embleton] he was acting as agent for all plate owners, including St Kilda.

39 It is appropriate to start with this ground as it raises the principal issue on which the primary judge found against Embleton in the action.

40 It is convenient to turn first to the second limb, the contention that the finding of the primary judge that there was no agreement for a five year lease was 'contrary to the objective facts not in issue'. In his oral submissions on the appeal, counsel for Embleton reduced those 'objective facts' to one objective fact. It was contended that the primary judge had failed to take into account a default judgment entered by Embleton against Mr Saedi and Mr Kasimoglu in a separate action in the general division of this court in CIV 2895 of 2010 (the Supreme Court action) (appeal ts 32 - 33). The judgment and statement of claim in the Supreme Court action went into evidence in the proceedings below as exhibit 13. The judgment, entered against Mr Saedi and Mr Kasimoglu on 11 August 2011 in default of defence, was for damages to be assessed and included, among other things, a declaration that taxi plates '181 and 597 ... are leased to [Embleton] by [Mr Kasimoglu], as owner, pursuant to the First and Second Agreements as pleaded in paragraphs 6 to 11 of the statement of claim'.

41 In the statement of claim in the Supreme Court action, Embleton pleaded that Mr Kasimoglu was the owner of taxi plates 597 and 181. It alleged in par 6 (relevantly) that at a meeting on 4 June 2008 at Embleton's premises between Mr Johnson, Mr Bekhit and Mr Osman for Embleton, and Mr Saedi (as agent for Mr Kasimoglu) and Mr Kasimoglu, it was agreed between Mr Saedi, as agent for Mr Kasimoglu, and Mr Johnson, for Embleton, that Embleton would lease plate 597 for a period of five years with a five year option, for a rental of $355 plus GST per week. Embleton alleged in par 11 of the statement of claim that at a further meeting on 12 June 2008 between the same parties, it was agreed between Mr Saedi, as agent for Mr Kasimoglu, and Mr Johnson for Embleton, that Embleton would lease plate 181 on the same terms.

42 Counsel for Embleton conceded (rightly, in my view) that no res judicata or issue estoppel arose but submitted that the default judgment in the Supreme Court action constituted deemed admissions by Mr Saedi of those facts in the proceedings before the primary judge. The significance of those admissions in the proceedings below, it was argued, was that they 'represented prior admissions of a 5 year lease term being discussed, and agreed, at the relevant meeting between the parties' (WAB 13 [13]).

43 There are several difficulties with that submission. It is the case that where judgment is entered in default of defence, a defendant is deemed to have admitted the allegations of fact contained in the statement of claim in the action. That is because O 20 r 14(1) of the Rules of the Supreme Court 1971 (WA) provides that an allegation of fact made by a party in a pleading is deemed to be admitted by the other party unless it is traversed by that party in its pleading or a joinder of issue under r 15 operates as a denial of it. Where a defendant fails to file a defence, the effect of O 20 r 14 is to relieve the plaintiff of the obligation to prove the facts pleaded in the statement of claim in order to obtain such relief in that action as the plaintiff may be entitled to on those facts. See, for example, Nixon v W Phelan and Son Pty Ltd [1959] VicRp 14; [1959] VR 83; Parkville Court Pty Ltd v Salvaris [1975] VicRp 38; [1975] VR 393, in relation to comparable provisions.

44 A deemed admission under O 20 r 14 is not, however, as Embleton's submissions would seem to suggest, some sort of admission at large. It is deemed to be an admission of fact as between the parties to the action, and for the purposes of the action, in which the pleading was filed. It is not deemed to be an admission for any other purpose. In this case the admissions were made in a separate action, involving some only of the parties to the action below.

45 I should note that counsel for Embleton referred to City of Stirling v Dueschen [2011] WASC 126 [48], [52] as a case where it had been held that deemed admissions in a default judgment in one proceeding were binding on the defendant in separate proceedings. But that was not what was decided in that case. In that case, the deemed admissions were treated as admissions for the purposes of the proceedings in which the default judgment was entered.

46 Secondly, in any event a court is not bound to act on admissions made by a party: Gramophone Co Ltd v Magazine Holder Co (1911) 48 SLR 1081; (1911) 28 RPC 221, 225; Termijtelen v Van Arkel [1974] 1 NSWLR 525. Whether a court should act on an admission, or the weight that should be given to an admission, will depend upon all the circumstances. In the present case, the primary judge had before him extensive evidence from both sides in relation to the agreement, upon which his Honour quite properly based his decision.

47 Thirdly, the deemed admissions in the Supreme Court action were of facts quite different to the facts upon which Embleton relied in the action below. In the statement of claim in the Supreme Court action, Embleton alleged there were two meetings, eight days apart, in June 2008, at one of which it was agreed between Mr Saedi (as agent for Mr Kasimoglu) and Embleton that Embleton would take a lease of plate 597 for a five year term with a five year option, and at the other of which it was agreed between Mr Saedi (as agent for Mr Kasimoglu) and Embleton that Embleton would take a lease of plate 181 for a five year term with a five year option. It was not alleged that the agreements pleaded in that action related to any other taxi plates or that any other taxi plates were discussed.

48 On the other hand, in the present action, Embleton alleged there was a single meeting in April 2008 at which it was agreed between Mr Saedi (as agent for St Kilda in relation to plate 529) and Embleton that Embleton would take a lease of plate 529 and four other plates to be supplied by Mr Saedi for a five year term with a five year option. (I note in passing that Embleton's case at trial appears to have been that the agreement related to an unspecified number of plates.)

49 Plainly enough, even if it were to be accepted that the deemed admissions in the Supreme Court action were admissions for the purposes of the action below, the deemed admissions did not support, and indeed were inconsistent with, the case Embleton advanced before the primary judge. Embleton could hardly complain that his Honour failed to have regard to them.

50 I should observe for completeness that (quite properly, in my view) it was not contended by Embleton that the default judgment gave rise to an estoppel upon which it could rely.

51 This limb of the ground of appeal must be rejected.

52 Embleton's other contention under this ground was that the finding was against the weight of the evidence. While that was said to be an error of law, it was evident on the hearing of the appeal that Embleton's real contention was that the primary judge had erred in fact. That was also evident from the (half-hearted) attempt made by Embleton's counsel to comply with practice direction 7.4. That practice direction requires an appellant who alleges a finding is against the weight of the evidence to identify in their submissions or in a schedule not only the evidence which supports the appellant's ground but also all the evidence which supports the finding which is challenged.

53 In his written submissions, counsel for Embleton set out the evidence which it was contended supported this ground of appeal, but under a heading 'Evidence Supporting Finding of Primary Court' could manage to do no more than set out three elements of the reasoning of the primary judge, together with references to the relevant paragraphs of the judgment. There was no reference to any evidence. How it could have been thought that that complied with the practice direction is difficult to imagine. It should not be necessary, as it apparently is, to emphasise the importance of compliance with the practice direction, particularly in a case like the present where the trial transcript runs to 744 pages.

54 Turning to the substance of this limb of the ground of appeal, counsel for Embleton referred to six matters which had been found by the primary judge or were the subject of uncontroverted evidence of Mr Saedi, namely:

• Mr Saedi had provided five taxi plates, including plate 529, to Embleton;
• Mr Saedi had provided four vehicles owned by him and Mr Kasimoglu, which they had purchased for approximately $64,000, to Embleton in May 2008 [224];
• it was agreed that Embleton did not have to pay for a vehicle unless a taxi plate was attached to it (ts 585);
• Mr Saedi and Mr Kasimoglu would have to lease the cars to Embleton for at least four years to get their $64,000 back and then for a further term after the initial four years if they were going to make a profit (ts 599, 602);
• Mr Saedi had accepted that it was in his interests to have a long term payment arrangement with Embleton (ts 599); and
• Mr Saedi had accepted that it was against his interests to have an agreement where either party could immediately terminate it (ts 599).

55 It was submitted, in effect, that it was objectively improbable that in those circumstances Mr Saedi would have agreed to provide plate 529, or the other plates, to Embleton in the absence of a five year lease. Without a five year lease of the plates, Mr Saedi was at risk that the plate owners may sell their plates, and Mr Saedi and Mr Kasimoglu would then get nothing for their vehicles and lose either $64,000 or any further right to payments of $110 on the vehicles (appeal ts 30 - 31). (I note in passing that the four plates Mr Saedi had provided to Embleton before plate 529 were in fact sufficient for the four vehicles he had supplied.)

56 It was argued that, on the other hand, it was objectively probable that Mr Saedi would be prepared to take the commercial risk that a plate owner may want to sell the plate within the term of the lease and to deal with that problem as and when it arose. That was more probable than that he would provide Embleton with $64,000 worth of vehicles with the prospect that he would not obtain a sufficient, or possibly any, return on them (16.6 - 16.7). Accordingly, it was submitted, the only reasonable inference open to his Honour was that plate 529, along with the other four plates, had been leased to Embleton for a five year term. His Honour, it was argued, had erred in concluding that no five year term had been agreed.

57 The relevant principles are well-established. The appeal is by way of a rehearing on the evidence before the primary judge. In Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 [23], [27], Gleeson CJ, Gummow and Kirby JJ pointed out that that shapes the requirements and limitations of an appeal:

On the one hand, the appellate court is obliged to 'give the judgment which in its opinion ought to have been given in the first instance' Dearman v Dearman [1908] HCA 84; (1908) 7 CLR 549 at 561 ... On the other, it must, of necessity, observe the 'natural limitations' that exist in the case of any appellate court proceeding wholly or substantially on the record ... These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the 'feeling' of a case which an appellate court, reading the transcript, cannot always fully share ...

...

[But] [i]f, making proper allowance for the advantages of the trial judge, [appellate courts] conclude that an error has been shown, they are authorised, and obliged, to discharge their appellate duties ... [23], [27].

58 Their Honours reiterated, however, the rule referred to in Warren v Coombes [1979] HCA 9; (1979) 142 CLR 531, 551, that:

[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it [25].

59 Nevertheless, the onus which lies on an appellant who appeals against findings of fact goes beyond merely showing that an alternative finding was available on the facts. An appeal is not a new trial on the evidence, constrained only by the unassailable factual findings; error must be demonstrated: Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; (2001) 117 FCR 424 [30]. As the Full Court of the Federal Court said in Minister for Immigration, Local Government and Ethnic Affairs v Hamsher [1992] FCA 184; (1992) 35 FCR 359:

The court must be satisfied that the judgment of the trial judge is erroneous and it may be so satisfied if it reaches the conclusion that the trial judge failed to draw inferences that should have been drawn from the facts established by the evidence. The court is unlikely to be so satisfied if all that is shown is that the trial judge made a choice between competing inferences, being a choice the court may not have been inclined to make but not a choice the trial judge should not have made (369).

60 See also Leeder v The State of Western Australia [2008] WASCA 192 and the cases cited there.

61 There is a good deal about the commercial arrangements between the parties which it is not easy to understand and upon which the evidence casts no light. Indeed, as mentioned earlier, the evidence is not always easy to understand. However, on the basis of the evidence before the primary judge I am not persuaded that he was in error in making the finding that he did.

62 His Honour recognised that, as the case was put, there were competing commercial considerations. The income that Mr Saedi and Mr Kasimoglu derived from the four vehicles they supplied to Embleton depended upon taxi plates being affixed to them. A lease of at least four plates for five years would mean that, for that period, there would be an assured income from both the plates and the vehicles which Mr Saedi had supplied, but such a lease would mean that Mr Saedi would be unable to recover a plate during the term of the lease. On the other hand, as his Honour found, taxi plates were regularly bought and sold, and Mr Saedi knew that he might be asked at any time to deliver up a plate to a new owner or manager. If the lease of the plates was not for a fixed term, he would be able to recover any of the plates promptly if he needed to return it to the owner but he would lose the income from a vehicle if, as a result, one of the vehicles he supplied was without a plate.

63 In that context, it is significant that, on the unchallenged findings of the primary judge, the agreement between the parties was for the provision by Mr Saedi, not of designated plates attached to any particular vehicles, but simply of an unlimited number of plates and vehicles. There was nothing in the evidence to suggest that Mr Saedi considered his capacity to provide taxi plates was, or was likely to be, limited to the four plates he initially provided. That is, it was not suggested that if a plate supplied by Mr Saedi was attached to one of the vehicles owned by Mr Saedi and Mr Kasimoglu and the owner of the plate required its return, Mr Saedi considered that it was likely to be beyond his capability to procure another plate to provide Embleton in its place.

64 In the absence of a five year lease, the real risk that Mr Saedi and Mr Kasimoglu were therefore likely to face if required to return a plate to its owner was a hiatus (possibly only a short hiatus) in payments on a vehicle while a replacement plate was found. On the other hand, if a five year lease was entered into a plate would be tied up for at least five years and (with the option) possibly up to 10 years, and Mr Saedi would be unable to recover it within that time if an owner or a new owner sought its return.

65 In the circumstances, I am not persuaded that the primary judge erred in concluding that Embleton did not lease plate 529 for a five year term. On the evidence that was clearly a finding reasonably open to him and there is no basis for this court to interfere with it.

66 I would dismiss this ground of appeal. It follows that it is unnecessary to deal with ground 4 of the grounds of appeal.

67 This ground also does not arise in light of my conclusion on ground 2. However, it is appropriate to deal with it.

68 It is evident that the primary judge was mistaken in the ground he gave for finding that neither Mr Saedi nor CTM was acting as the agent of St Kilda in leasing the plate to Embleton. Mr Ismail had not previously managed a taxi plate licence in Western Australia for St Kilda. Mr Ismail's evidence was that plate 529 was the first Western Australian taxi plate St Kilda had acquired (ts 90). However, I do not accept Embleton's contention that his Honour's finding was itself wrong.

69 Counsel for Embleton submitted that the finding was against the weight of the evidence. It was contended, in effect, that his Honour should have inferred from the following matters that Mr Saedi or CTM had actual authority (ts 32) to act on behalf of St Kilda in leasing the plate. First, at the time plate 529 was acquired St Kilda had no previous experience in managing a Western Australian taxi plate; second, upon purchasing plate 529 Mr Ismail's first concern was to find someone in Western Australia to lease the plate; third, for that purpose Mr Ismail contacted Mr Saedi who was a taxi broker and did not have a taxi licence in Western Australia; and fourth, that in a defence filed in the action Mr Saedi had alleged that he had 'authority to deal with plate 529, from [St Kilda]'.

70 In my view, there is no merit in that submission. In the first place, the second and third of those propositions misstate the effect of the evidence and the unchallenged findings of the primary judge as to the circumstances in which CTM came to lease the plate. Contrary to Embleton's contention, the primary judge found that Mr Ismail was approached by Mr Saedi before St Kilda purchased plate 529. When Mr Saedi learned that Mr Ismail was travelling to Perth to purchase a taxi plate, Mr Saedi indicated an interest in leasing the plate when it was acquired [66]. Accordingly, when St Kilda purchased the plate Mr Ismail contacted Mr Saedi who told him that he wished to lease the plate through CTM. A lease agreement was subsequently entered into by St Kilda with CTM [68]. In his evidence, Mr Ismail acknowledged that he knew the plate could only be used by someone authorised to do so in Western Australia and that Mr Saedi was a resident of Victoria, but said that he considered it was up to CTM to ensure that, as required by the lease agreement, it complied with the law in using the plate in Western Australia (ts 79 - 80).

71 Secondly, Embleton's submission is contrary to the direct evidence of Mr Ismail, which the primary judge 'accept[ed] ... without reservation' [239]. In cross-examination, it was put to Mr Ismail that Mr Saedi had said to him that he (Mr Saedi) wanted to act as the agent for St Kilda in finding a lessee of the plate. Mr Ismail denied that anything to that effect was said. He said that CTM had simply taken a lease of the plate (ts 81 - 82). Mr Ismail's evidence was also supported by Mr Saedi's evidence. Mr Saedi denied that he was the agent of St Kilda and said that CTM was simply the lessee of the plate (ts 555).

72 In relation to Embleton's fourth proposition, Mr Saedi said in evidence that the reference in the defence to his 'authority to deal with plate 529' was a reference to his authority as lessee to use the plate as a taxi plate (ts 644 - 645). Be that as it may, in the present context I do not think it matters what was meant by that statement in the defence. Even if regarded as an assertion by Mr Saedi of an agency relationship, it could not be treated as an admission by St Kilda of any such relationship.

73 While the primary judge was in error in respect of the specific ground on which he relied, I do not consider that he was in error in the conclusion he reached. There was no basis in the evidence for a finding that CTM or Mr Saedi was the agent of St Kilda.

75 Embleton did not seek to contend that an account of profits was not available in a case of this nature. Embleton's counsel expressly disavowed any such contention (ts 38). It is therefore unnecessary to consider that question. Nor was any challenge made to the calculation of

the amount of the profit found by the primary judge. Embleton's complaint was that to order an account of profits was to give St Kilda a windfall in circumstances where all of the lease payments for plate 529 had been made by Embleton for the relevant period and those payments were the maximum amount permitted by statute for the lease of a taxi plate. Counsel argued that if the primary judge were correct, Embleton would have been better off not making the lease payments at all.

76 This ground is without substance. An account of profits is concerned, not to compensate a plaintiff for a loss that it has suffered, but to strip from the defendant the profit that the defendant has derived by reason of its wrongful conduct. It is no objection to an account of profits that the plaintiff may receive an amount greater than the amount it would have been entitled to receive had the wrongful conduct not occurred. See, for instance, Warman International Ltd v Dwyer [1995] HCA 18; (1995) 182 CLR 544, 562; Harris v Digital Pulse Pty Ltd [2003] NSWCA 10 [414]; [2003] NSWCA 10; (2003) 56 NSWLR 298, 409.

77 The proposition that Embleton would have been better off not making the lease payments at all is entirely misconceived. It is evident that the profit of $237 per week found by his Honour for the period of 77 weeks from 2 February 2011 to judgment was calculated by treating the lease payments made by Embleton over that period as an expense. If Embleton had not made the lease payments its profit would have been greater by the amount of those payments.

81 EDELMAN J: I agree with the order of Newnes JA and with his Honour's reasons.

82 I wish only to say something about the award to Embleton of disgorgement of St Kilda's profits in the amount of $18,249. The primary judge limited the account and disgorgement of profit to the time from when Embleton was given notice of the demand to return the plates, and failed to do so. His Honour relied, by analogy, on the award of an account and disgorgement of profits in the context of a knowing

infringement of a registered trade mark in Colbeam Palmer Ltd v Stock Affiliates Pty Ltd [1968] HCA 50; (1968) 122 CLR 25, 34. As Windeyer J observed in that case, although the right to a trade mark is now a statutory right, it was originally a right recognised by equity.

83 There was no ground of appeal on this appeal which alleged that an account, and disgorgement, of profits was unavailable for the tort of detinue. During the appeal, Newnes JA asked counsel for Embleton whether Embleton sought to make any submission that, as a matter of legal principle, it was not open to the primary judge to make an award on the basis of an account of profits. Counsel for Embleton declined the invitation to do so (appeal ts 38).

84 There are, at least, two obvious reasons why this point might not have been taken.

85 One reason is that the point might not be a simple one and the amount of money involved in this dispute might not justify taking this point. In Powell v Aiken [1858] EngR 474; (1858) 4 K & J 343, 349; [1858] EngR 474; 70 ER 144, 146, the Vice Chancellor, Sir William Page-Wood (later Lord Hatherley LC), speaking in the context of a claim for trespass to land where a defendant in breach had made an under-lease of the land, said that '[n]o proposition could be more reasonable; and it is satisfactory to find that a Court of law was able so to decide, and to hold that those who enjoy the benefit of property are accountable for the profits'. It is easy to see why the amount of money in issue might have led counsel to the view that this case was not the occasion to explore the boundaries of any such principle, and the circumstances, including the degree of knowledge required, before a tortfeasor is liable to disgorge profits from breach.

86 A second reason why the point might not have been taken is that it appears that the availability, and legal rules governing the award, of an account and disgorgement of profits for the tort of detinue was not in dispute at trial (trial ts 735). St Kilda's pleading of an account of profits generally alleged that Embleton had received the benefit of exclusive possession of plate 529 in 'such circumstances' as to require disgorgement of the benefit. Embleton denied that it had committed the tort of detinue and therefore denied that it was required to account for and disgorge profits. Counsel for Embleton on this appeal, who was also counsel at trial, reiterated on this appeal that he accepted that an award of an account of profits was open as a matter of principle for the tort (appeal ts 38).