Horizontal Falls Adventure Tours Pty Ltd (ACN 108 455 410) v Thomas - [2009] FCA 1084 - FCA 2009 case summary — Zoe

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Horizontal Falls Adventure Tours Pty Ltd (ACN 108 455 410) v Thomas

[2009] FCA 1084

Federal Court of Australia|2009-09-25|Before: Collier J

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Source facts

Court

Federal Court of Australia

Decision date

2009-09-25

Before

Collier J

Source

Original judgment source is linked above.

Judgment (25 paragraphs)

[1]

REASONS FOR JUDGMENT 1 The applicant in these proceedings, Horizontal Falls Adventure Tours Pty Ltd ("HFAT") has sought damages pursuant to s 82 of the Trade Practices Act 1974 (Cth), damages for passing off, damages for infringement of copyright, damages for conversion, injunctive relief and other orders including delivery up of materials, an account of profits and damages. Subject to one issue, these claims are yet to be determined. 2 The current proceedings concern that issue, in summary an allegation by HFAT that one or both of the respondents took HFAT's booking records from HFAT's office, and a claim for delivery of those records to HFAT. HFAT has sought relief in respect of this claim in Pt A para 7 of the Application. 3 On 19 May 2009 I ordered that the relief sought by HFAT in Pt A para 7 be the subject of a separate hearing and determination. 4 Part A para 7 is as follows: A Details of Claim On the grounds stated in the accompanying Affidavits the Applicant claims against the Respondents:- 7. An order requiring the Respondents forthwith:- a) to deliver to the Applicant:- i. the originals and all copies (whether in hard or soft copy) of all and any booking records for forward bookings of tours made by persons who booked tours to Horizontal Falls with the Applicant (being those booking which the Second Respondent offered to supply to one Kaye Challonor [sic] on or shortly prior to 28 April 2009); and ii. the originals and all copies (whether in hard or soft copy) of all and any letters, emails, or other correspondence between the Respondents, or either of them, or any person on their behalf and all such persons; b) to disclose to the applicant, in writing, all and any other details, including telephone numbers, postal or email addresses, date and amount of deposits paid by all persons who have booked such tours; c) to disclose to the Applicant, in writing, the substance of the communication between the Respondents, or either of them, or any person on their behalf and all such persons. 5 A broad range of evidence was covered during the course of the hearing. However the only issues for determination in this judgment relate to Pt A para 7 as stated. These issues can be summarised as: 1. the nature of the booking records claimed by HFAT in terms of Pt A para 7 of the application. 2. whether Mr Rhys Thomas took those HFAT booking records, and whether Mr Rhys Thomas and/or Mr Troy Thomas have in their possession those records. 3. whether HFAT is entitled to an order for delivery of those booking records, or any other order.

[3]

Time line 11 In 2007 the personal and business relationships of Ms Cummins and Mr Rhys Thomas began to deteriorate. Ms Cummins left Broome in October 2008 to reside on the Gold Coast in Queensland. 12 Plans were made by the parties to sell the HFAT business however the proposed deal did not eventuate. 13 By late 2008 the financial position of KS had worsened and Ms Cummins applied to the Supreme Court of Queensland for KS to be wound up in insolvency. The reason for the financial collapse of KS was the subject of cross-accusations by the parties, which are not relevant to the issues before me. The Supreme Court of Queensland made an order winding up KS on 6 March 2009. 14 On 11 December 2008 the business name "Horizontal Falls Seaplane Adventures" ("HFSA") was registered in Western Australia by Mr Troy Thomas. The HFSA business also conducts tours to Horizontal Falls by aircraft and boat. Mr Troy Thomas commenced operating the HFSA business in April 2009. It is not in dispute that HFSA is a competitor of HFAT. Mr Rhys Thomas gave evidence that he was not involved in the operation of HFSA, but does contract work for the RH Thomas Trust which owns a seaplane used by HFSA (TS 11 June 2009 p 172 ll 36-47). 15 The booking records which HFAT alleges were removed were booking records made by Ms Kaye Chaloner and, according to Ms Cummins, Ms Shelley Ratcliffe. Ms Chaloner had been employed as a booking agent by the HFAT business since 2006. Ms Ratcliffe also appeared to be an employee of the HFAT business however neither oral nor written evidence was adduced from Ms Ratcliffe for the purposes of the hearing. 16 Ms Chaloner deposed that when a customer booked and paid for a tour, as a usual practice she would send the customer an email confirming the booking and the day of travel (affidavit of Kaye Chaloner affirmed 25 May 2009 para 10). It was usual practice for details of the bookings to be written in a hard copy diary kept at the office, and for Ms Chaloner to also enter the bookings into an Excel spreadsheet (affidavit of Kaye Chaloner affirmed 25 May 2009 para 7 and para 11). 17 Ms Chaloner left HFAT at the end of January 2009, and deposed that she left a manilla folder containing email confirmations of bookings on the desk at the HFAT office in Hangar 5 at Broome Airport (affidavit of Kaye Chaloner affirmed 25 May 2009 para 9). The role of Ms Ratcliffe in the HFAT business, and when that role ended, are not the subject of evidence in these proceedings. 18 Ms Chaloner's replacement at HFAT was Ms Sophie Bishop. Ms Bishop worked for HFAT from offices in Perth including managing bookings by way of telephone and email from 31 January 2009 until mid-April 2009. She then relocated to Broome where she continued with HFAT. 19 Partners of KordaMentha were appointed provisional liquidators of KS on 2 February 2009. Shortly thereafter Mr Simon Harris (an Associate Director of KordaMentha, who was assisting the provisional liquidator) and Mr Rocke, one of the provisional liquidators, visited the KS office - which was also the HFAT office - at Hangar 5, Broome Airport. Mr Harris deposed that they took possession of the books and records of KS, and made a list of that material which comprised 15 archive boxes of standard size. The respondents have suggested that the material taken by the provisional liquidators may have included the HFAT bookings, however Mr Harris deposed that to his knowledge this is not correct (affidavit of Simon Harris sworn 4 June 2009 para 7). 20 Ms Bishop gave evidence as to conversations she had with travel agents in Broome in February, March and April 2009, which revealed confusion among travel agents as to whether HFAT and HFSA were the same entity. One reason for this confusion appears to be an undated letter circulated among Broome travel agents at the instigation of Mr Rhys Thomas some time in January 2009 (TS 22 June 2009 p 34 ll 34-37) which said: We wish to advise that Mary Cummins and I will no longer be operating Horizontal Falls Adventure tours, in the 2009 season. We thank you for your support and loyalty over the past 5 years and wish you well in your endeavours for the future. My sons Troy and Adrian Thomas will be operating the same high quality tours starting the 1 April 2009 under the new company name of 'Horizontal Falls Seaplane Adventures'. They will contact you within the week after Australia Day. Should you wish to make bookings with the new company, the contact details are below. 21 In relation to this issue, Mr Rhys Thomas gave evidence that he had thought that HFAT was "finished" (TS 22 June 2009 p 58 ll 9-11). One reason for this was an email sent by Ms Cummins to Mr Rhys Thomas on 8 January 2009 (exhibit 8R) in which Ms Cummins offered to appoint an administrator to HFAT pursuant to Pt 5.3A of the Corporations Act 2001 (Cth) if Mr Rhys Thomas similarly appointed an administrator to KS. A further complication was that the aircraft utilised by HFAT in conducting tours was owned by a trust associated with the respondents and the aircraft was not available for use by HFAT for the 2009 tourist season. Mr Rhys Thomas had assumed that HFAT would not be able to conduct tours without that aircraft. 22 On or about 18 February 2009 a circular was sent to tour operators at the instigation of Ms Cummins advising them that HFAT and HFSA were not the same entity. 23 In or around April 2009 Ms Cummins arranged for another company to carry HFAT's customers with the result that HFAT continued to offer tours to Horizontal Falls. 24 The lessee of the office space in Hangar 5, Broome Airport used by the HFAT business was actually KS. On 21 April 2009 Mr Paul McSweeney, the manager of commercial services at Broome Airport, emailed Ms Cummins and Mr Rhys Thomas. In a letter attached to his email Mr McSweeney noted that KS was in liquidation and listed items which would be deemed abandoned if they were not collected. The list included furniture and "Assorted files". Mr Rhys Thomas gave evidence that he went to Hangar 5 and let himself in through an open door (TS 22 June 2009 p 38 l 42). The date Mr Rhys Thomas went to the office is not clear, but appears to be on or around 21 April 2009. Mr Rhys Thomas said that he took from the HFAT office at Hangar 5 assorted files which were archives of manifests, flight plans and some houseboat drawings. He took this material to the rubbish dump because the documents only need to be retained, under council regulations, for three months (TS 22 June 2009 p 43 ll 1-14). Mr Rhys Thomas gave evidence that the files were old documents which he saw no point in keeping (TS 22 June 2009 p 43 ll l-19). 25 Ms Cummins deposed that Mr Paul McSweeney telephoned her on 22 April 2009 to inform her that the HFAT office had been broken into and the contents removed. She deposed further that she had reported the matter to the Broome police (affidavit of Mary Cummins sworn 12 May 2009 paras 66-67). Notwithstanding the contact with police, it appears that the police took no action against Mr Rhys Thomas in relation to the removal of chattels from the HFAT office. 26 On 28 April 2009 Ms Chaloner and Ms Bishop had a telephone conversation. Much of what was said is in contention. It is not in dispute however that Ms Chaloner said that she had left a folder containing records for tour bookings on the desk at the HFAT office in Hangar 5. 27 During April and May 2009 Ms Bishop received three telephone calls from customers of HFAT in relation to tour bookings they had made with HFAT but of which HFAT had no record. The relevant facts as deposed by Ms Bishop in her affidavit sworn 12 May 2009 were: · Ms Bishop was contacted by Mr Trevor Owen on 28 April 2009. Emails forwarded by Mr Owen to Ms Bishop showed that he had made a booking on 20 October 2008, for a tour with HFAT to be operated on 6 July 2009. · On 29 April 2009 at 5.30 am Ms Bishop was telephoned by Ms Fiona Allen, advising that Ms Allen and her partner were in Broome waiting to be collected for their tour to the Horizontal Falls. Ms Bishop had no record of Ms Allen's booking. Ms Allen provided Ms Bishop with a copy of her reservation confirmation which purported to have been sent on behalf of HFAT on 6 November 2008. · On 5 May 2009 Ms Bishop was contacted by Mr and Mrs Osler, informing her that they had booked and paid for tours with the applicant for July 2009. Ms Bishop had no record of the bookings to which these customers were referring and no receipts for any payments by them.

[6]

Proof 30 HFAT seeks an order for delivery of its booking records which it claims were removed from its premises by Mr Rhys Thomas. In written submissions HFAT conceded that there was no basis for an order against Mr Troy Thomas. 31 The onus is on HFAT to prove that the booking records existed, that they were in HFAT's possession, and that they were taken by direct interference perpetrated by Mr Rhys Thomas. 32 This is a civil matter, and the civil standard of proof applies. HFAT must prove its case on the balance of probabilities. Indeed in this case HFAT accepted that it must establish that: (a) it is probably entitled to possession of the documents; and (b) they were probably taken from its possession by Mr Rhys Thomas (Applicant's Outline of Submissions para 21). 33 It is clear however that in making a determination according to the civil standard the Court is to take into account: (a) the nature of the cause of action or defence; (b) the nature of the subject matter of the proceeding; and (c) the gravity of the matters alleged. (s 140(2) of the Evidence Act 1995 (Cth)) 34 In written submissions HFAT invites the Court to take a robust approach, particularly in respect of Mr Rhys Thomas, and submits that: If he does not comply with the order, contempt proceedings may or may not be instituted; and they may or may not succeed. The court could enforce such an order in several ways. (Applicant's written submissions para 133) 35 The consequences of contempt proceedings are grave, and potentially include fining and imprisonment. In considering the application of the civil standard of proof, Dixon J observed in Briginshaw v Briginshaw (1938) 60 CLR 336, 361-362, in summary, that: · when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found; · reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved; and · the seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. 36 In determining whether I am satisfied on the balance of probabilities that HFAT has proven the facts it needs to prove, I take into consideration the matters required by s 140(2) of the Evidence Act as well as Dixon J's comments in Briginshaw (1938) 60 CLR 336.

[11]

Ms Chaloner's evidence 45 First, I consider that Ms Chaloner was a credible witness. I reject HFAT's submissions that she was an unsatisfactory witness, "evasive" or "quick to follow the party line". It is clear that Ms Chaloner was initially very reluctant to give evidence in the proceedings in circumstances: · where she knew the protagonists very well, having worked for them for a number of years (both in HFAT and HFSA); · where her employment had been (and presumably would continue to be) in the tourism industry in Broome, which is a relatively small industry, in a confined community, in a remote location; and · where she would be required to give evidence in chief as well as under cross-examination in circumstances where the personal and business differences between Ms Cummins and Mr Rhys Thomas were ventilated, but in which she wanted no part. 46 Indeed, Ms Chaloner produced evidence that she was suffering severe depression as well as anxiety attacks arising from her concerns about giving evidence in the proceedings. I reject the applicant's submission that her medical condition was "pure poppycock". However as my ruling earlier in these proceedings demonstrated (Horizontal Falls Adventure Tours Pty Ltd (ACN 108 455 410) v Thomas [2009] FCA 639) I was of the view that, despite these medical conditions, Ms Chaloner would be able to answer questions under cross-examination, and indeed she did so in a direct, detailed and honest manner. 47 Further, I accept Ms Chaloner's evidence as to the mode of taking bookings between October 2008 and January 2009 because it was, and always had been, her job to take bookings for the HFAT business. Indeed commenting in relation to the booking records and Ms Chaloner's practice of entering bookings into an Excel spreadsheet, Ms Cummins conceded: It was her (that is, Ms Chaloner's) system; nobody else really understood it. (TS 22 June 2009 p 8 l 40) 48 I make this observation, noting again the curious absence of any evidence from Ms Shelley Ratcliffe. 49 I accept Ms Chaloner's evidence that she did not purchase a 2009 diary following instructions from Ms Cummins not to do so, and her evidence that she had not entered bookings into an Excel spreadsheet for forward bookings for 2009. Indeed, in light of the discussions in 2008 between Ms Cummins and Mr Rhys Thomas concerning, among other things, the possible sale of the HFAT business and later the appointment of administrators to both HFAT and KS, it is logical that Ms Cummins would have instructed Ms Chaloner not to purchase a hard copy diary for 2009.

[15]

"Break in" 57 First, I am not persuaded by HFAT's contentions that Mr Rhys Thomas "broke into" the HFAT office at Hangar 5, Broome Airport on or around 21 April 2009, and improperly removed material he found there. During the proceedings HFAT sought to make much of the conversation between Ms Sophie Bishop and Ms Kaye Chaloner to which Ms Bishop referred in her affidavit, and in particular to the alleged agreement by Ms Chaloner to the notion that Mr Rhys Thomas had "broken into" the HFAT office on 21 April 2009. The clear tenor of HFAT's contentions in this regard was that Mr Rhys Thomas' actions in entering the premises were tinged with impropriety and, to quote a word much used by HFAT in its submissions, spite. However I accept Mr Rhys Thomas' evidence that he quite properly went to Hangar 5 in response to an email from Mr McSweeney to both Ms Cummins and Mr Rhys Thomas. It was not in dispute that the lessee of the office at Hangar 5 was actually KS, which was in liquidation by 21 April 2009, and of which, significantly, Mr Rhys Thomas was the sole director. Although Mr Rhys Thomas gave evidence that the ownership of the chattels he removed from the HFAT office, which were worth less than $1,000, was to be settled between himself and Ms Cummins in the Family Court (TS 22 June 2009 p 48 ll 7-10) there is no evidence before the Court that Mr Rhys Thomas required Ms Cummins' permission to access the office or remove the chattels there. 58 It is unfortunate - and perhaps surprising - that Mr McSweeney was not called as a witness in these proceedings, however I do not consider this omission undermines Mr Rhys Thomas' evidence. I consider Mr Rhys Thomas' evidence as to the reason he went to the HFAT office - namely to remove furniture and other material there following the request by Mr McSweeney - reasonable and acceptable. 59 I attach no weight to the evidence of Ms Sophie Bishop (affidavit of Sophie Bishop sworn 12 May 2009 para 30) as to the "break-in" by Mr Rhys Thomas and Ms Chaloner's alleged agreement as to that occurrence. At best, even if such a conversation occurred, I consider it would be little more than idle and sensational gossip between two administrative staff who lacked first-hand knowledge of relevant events. 60 I attach no weight to the failure of Ms Chaloner, Mr Rhys Thomas or Mr Troy Thomas to respond to allegations of Ms Bishop in her email of 29 April 2009 to Ms Chaloner, or to allegations of Ms Cummins in her email of 29 April 2009 to Mr Rhys Thomas. In its submissions, HFAT emphasised the supposed importance of both respondents failing to refute statements of both Ms Cummins and Ms Bishop concerning Mr Rhys Thomas and his alleged removal of booking records from the HFAT premises. However in relation to Mr Troy Thomas, I consider that there was no positive obligation on him to deny allegations in relation to his father made by a bookings agent employed by HFAT. I draw no inference from the contents (or lack thereof) of Mr Troy Thomas' email to Ms Bishop of 29 April 2009. Given the clearly poor relations between Ms Cummins on the one hand, and the respondents on the other, which were at the stage where it appears that both sides had engaged lawyers, it is not surprising that Mr Troy Thomas should refrain from engaging in extensive email contact with HFAT employees, and understandable that he would not necessarily respond to allegations in such emails. 61 I take a similar view in relation to the "failure" of Mr Rhys Thomas to respond to Ms Cummins' email of 29 April 2009 in which Ms Cummins similarly alleged removal of HFAT booking records by Mr Rhys Thomas and the alleged offer of those booking records to Ms Chaloner. I note evidence of Mr Rhys Thomas given during cross-examination in which he said, in summary, that he received many similar emails from Ms Cummins and chose not to respond to them. I consider this evidence credible: TS 11 June 2009 p 180 ll 13-39 and, in the circumstances, draw no inference from the lack of email response by Mr Rhys Thomas to Ms Cummins in respect of his alleged conduct.

[16]

Bookings allegedly offered to Ms Chaloner 62 Second, I do not accept Ms Bishop's evidence that she was told by Ms Chaloner that Mr Rhys Thomas had offered Ms Chaloner a list of bookings relating to HFAT (affidavit of Sophie Bishop sworn 12 May 2009 para 30). I do not accept this evidence because: · Ms Chaloner denied that she had ever so informed Ms Bishop (affidavit of Kaye Chaloner affirmed 25 May 2009 para 5.2). On balance, I consider it likely that Ms Chaloner's version of the conversation between herself and Ms Bishop is accurate, if only because there is no obvious reason why, even if Mr Rhys Thomas had "offered" the HFAT bookings to Ms Chaloner, Ms Chaloner would spontaneously inform Ms Bishop, a person who was a stranger and recently employed by HFAT which was a competitor to Ms Chaloner's new employer HFSA. · In light of the bookings system at HFAT an "offer" of confirmed tour bookings by customers with HFAT by Mr Rhys Thomas to Ms Chaloner - presumably for the HFSA business - makes little sense. It was clear from the evidence that, as a general practice, individuals who booked a tour with HFAT were required to pay for the tour before the HFAT booking agent confirmed the booking. It follows that any individuals who had booked with HFAT had already paid for the relevant tour. The financial (or other) benefit to HFSA from "poaching" such customers when HFSA could not expect payment from them is not obvious. In my view Mr Rhys Thomas' "spite" as alleged by HFAT would not counter the financial disincentive to HFSA in relation to such an offer. Evidence to this effect is given by Mr Troy Thomas in his affidavit affirmed 19 May 2009 para 60, and I accept this evidence. · From Ms Bishop's evidence it appears that there were only three tour bookings with HFAT, involving six individuals, which were made during the period October 2008-January 2009, but for which HFAT did not have records. There is conflicting evidence between Ms Cummins and Ms Bishop on the one hand, and Mr Rhys Thomas, Mr Troy Thomas and Ms Chaloner on the other, as to the length of time in advance of a tour customers made bookings. (The evidence of Ms Cummins and Ms Bishop was that it was common for tour bookings to be made considerably in advance of a tour, whereas the evidence of Mr Rhys Thomas, Mr Troy Thomas and Ms Chaloner was that it was more common for bookings to be made only a few days in advance of a tour.) On the basis that, by the last date of the hearing in June 2009, it appears that Ms Bishop had been contacted in respect of only three unrecorded bookings for tours with HFAT, it is difficult to avoid the conclusion that only three advance bookings for HFAT tours for six individuals had been made during the October 2008-January 2009 period which were unaccounted for in HFAT records. It is possible that bookings had been made with HFAT by travel agents in Broome or elsewhere in Australia during that period which were unaccounted for, but no evidence was produced as to this, nor, as the respondents submitted, did HFAT appear to make any effort to inquire as to whether any travel agents had made bookings with HFAT on behalf of clients during the period October 2008-January 2009. The possibility of such bookings by travel agents is mere speculation, compared with the fact that apparently only three bookings had been made by individuals with HFAT during the same period which were unaccounted for. The end result is that the "list of bookings" to which Ms Bishop referred in her affidavit at para 30, and which Mr Rhys Thomas was alleged to have offered Ms Chaloner, appears illusory.

[17]

Public access to Broome Airport 63 Third, the evidence before the Court is that the HFAT office was located in Hangar 5 at Broome Airport. It appears that the office of HFAT was part of an open plan in Hangar 5, and not separated from the remainder of Hangar 5 by, for example, a locked door. Mr Rhys Thomas gave evidence that he had simply walked through an open door into Hangar 5 to remove furniture and other chattels on or around 21 April 2009. 64 The manilla folder containing booking records was left by Ms Chaloner on a desk in the HFAT office and, according to the submissions of HFAT, remained on that desk for almost three months until it was allegedly taken by Mr Rhys Thomas on or around 21 April 2009. The incongruity of such apparently important HFAT booking records being left unattended by Ms Cummins or Ms Bishop for such a long period of time is heightened by the fact that HFAT was not the only entity with an office in Hangar 5. It is not in dispute that a business called Skipper Aviation subleased part of the area, and that, according to unchallenged evidence of Mr Rhys Thomas, staff of Skipper Aviation accessing their office from the nearby street had to walk through the HFAT office to reach it (TS 22 June 2009 p 56 ll 16-31). Indeed there is evidence before the Court that persons with access to the HFAT office after the end of January included: · the liquidators of KS and their staff; · Skipper Aviation employees and presumably members of the public visiting Skipper Aviation; · Mr Rhys Thomas and Mr Troy Thomas; · possibly - Ms Desiree Male, the bookkeeper of the HFAT business. I make this observation based on uncontroverted evidence of Mr Rhys Thomas that he gave his key to Hangar 5 to Ms Male at the request of the liquidators of KS (TS 22 June 2009 pp 38-39). There is no evidence of Ms Male before the Court; · possibly - friends of Ms Cummins, although the only reference to access by such persons is by Ms Chaloner (TS 11 June 2009 p 83 ll 26-27). 65 Unfortunately, as the respondents observe in their written submissions, HFAT lead no evidence of any inquiries made of the Skipper Aviation business or its employees in respect of removal of HFAT material. 66 Accordingly it appears that third parties including possibly members of the public had access to Hangar 5 - and the HFAT office - between the end of January 2009 and 21 April 2009. It is not inconceivable that the HFAT booking records could have been removed by a third party.

[18]

KS liquidators 67 Fourth, it is not in dispute that the liquidators of KS had removed 15 archive boxes of material belonging to KS from Hangar 5. Mr Simon Harris of KordaMentha deposed that, to his knowledge, the liquidators did not take possession of the HFAT booking records (affidavit of Simon Harris sworn 4 June 2009 para 7). However during cross-examination by Mr Telford for the respondents it became clear that details of "Miscellaneous Papers" taken by the liquidators from the HFAT office and to which Mr Harris referred in his affidavit could not be explained by Mr Harris (see for example TS 11 June 2009 pp 23-24). Mr Harris' evidence was that one of his administrative staff, who did not give evidence in these proceedings, had completed listing of the records taken by liquidators (TS 11 June 2009 p 20 ll 36-37). While on balance it is unlikely that experienced liquidators would remove material other than that belonging to the corporation the subject of the liquidation, in the circumstances of this case I consider it possible that the liquidators of KS may have removed the manilla folder containing the booking records and that this material could be in, for example, the "Miscellaneous Papers" retained by the liquidators. I take this view because: · It is not clear whether the booking records were physically identified or otherwise marked as property of KS or HFAT. · On the basis that, prior to KS entering liquidation, customers of the HFAT business actually paid KS rather than HFAT, it is possible that relevant paperwork in the booking records would have referred to KS, and would thus have been of interest to the liquidators. I note, in particular, evidence of Ms Wade that money for HFAT tours was flowing into the bank account of KS from at least August 2008 (affidavit of Barbara Wade sworn 2 June 2009 paras 13-16), and evidence of Mr Rhys Thomas supporting that position (TS 22 June 2009 p 26 ll 20-25 and ll 30-33). · As a general proposition, KS and HFAT had operated as one business. It is possible and consistent with the mingling of the affairs of KS and HFAT that documentation of the HFAT business bore the nomenclature of KS rather than HFAT. 68 Accordingly I am not satisfied that the liquidators of KS did not remove the manilla folder containing the booking records in their general removal of KS documentation from Hangar 5.

[19]

Evidence of the respondents 69 Finally, Mr Rhys Thomas denied removing the HFAT booking records from Hangar 5. In his affidavit affirmed 18 May 2009 Mr Rhys Thomas deposed: … by the time I removed [chattels belonging to the HFAT business], the offices had been unoccupied for two to three months. The liquidator had previously gone to the offices and removed all books, paperwork etc, I witnessed approximately 300 kilograms worth of documents being taken by the liquidator back to Perth and also the computers. There was no list of bookings at the office when I relocated the items in or about April 2009. (para 40) 70 Further, during cross-examination Mr Rhys Thomas said: When I last went into that office when the liquidator was there, the desks were covered in documents and things everywhere. I hadn't been in the office for two months. When I went into the office on 21 April all the desk tops were all clear, and if there were documents, lists of bookings or whatever, I didn't see them. (TS 22 June 2009 p 45 ll 31-35) 71 As I noted earlier in this judgment Mr Rhys Thomas also gave evidence that on or around 21 April 2009 he had removed from Hangar 5 assorted files which were archives of manifests, flight plans and some houseboat drawings, and that he had taken this material to the rubbish dump (TS 22 June 2009 p 43 ll 1-14). 72 Mr Troy Thomas gave evidence at the hearing that he had assisted Mr Rhys Thomas load a number of old desks from the HFAT office on to a trailer, that Mr Rhys Thomas had taken some of the desks to the rubbish dump the following day, and that Mr Troy Thomas could not remember if there were any documents at the HFAT office (TS 11 June 2009 p 60 ll 18-26). 73 In written submissions HFAT attacked the credibility of the evidence of both respondents. HFAT reserved particular criticism for Mr Rhys Thomas, and submitted in summary that none of his evidence should be accepted without corroboration. HFAT also submitted that evidence of Mr Troy Thomas should not be accepted. 74 It is, no doubt, in HFAT's interests to attempt to completely discredit the evidence of the respondents. However as is commonly the case, the position is not quite so unequivocal as HFAT has urged. In my view evidence of Mr Rhys Thomas needs to be treated with caution because his personal feelings, in particular anger at what he clearly perceives as Ms Cummins' conduct, affected the tone of his evidence. (In making such an observation however I have already noted similar reservations in relation to Ms Cummins' evidence.) However I note that Mr Rhys Thomas has been consistent, both in his written and oral evidence, in his denial of removing the HFAT booking records from the HFAT office. During cross-examination he steadfastly maintained that position. 75 Further, I do not accept HFAT's attack on Mr Troy Thomas' credit as legitimate. I considered Mr Troy Thomas a satisfactory witness, who endeavoured to be of assistance to the Court. The alleged "pre-conceived party line" in Mr Troy Thomas' evidence as suggested by HFAT was not explained by HFAT. The claim by HFAT that his evidence ought not to be accepted because "he has obviously copied the Applicant's website" raises issues which are both irrelevant in the context of these proceedings and indeed remain unresolved for the purposes of the substantive litigation. I also consider that HFAT's claim as to inconsistencies in Mr Troy Thomas' evidence is in fact based on irrelevant events and absurd assumptions. So, for example, I have already given my views in relation to Mr Troy Thomas' email to Ms Bishop of 29 April 2009. The fact that Mr Troy Thomas did not take positive steps to deny Ms Bishop's allegations against Mr Rhys Thomas does not, in my view, undermine Mr Troy Thomas' credibility as a witness. 76 I consider that Mr Troy Thomas was credible when he gave evidence that he took no notice as to whether there were papers among the goods taken by Mr Rhys Thomas from Hangar 5, Broome Airport on 21 April 2009 (TS 11 June 2009 p 60 ll 14-22).

[22]

Concluding comments 83 In concluding I make three additional comments. 84 First, in light of my factual findings it is not strictly necessary for me to resolve the legal question whether HFAT was entitled, in written submissions filed after judgment in the proceedings had been reserved, to claim that it sought orders for the return of the booking records: · in detinue under either s 25 of the Supreme Court Act 1995 (Qld) or O 14 r 10 of the Rules of the Supreme Court 1971 (WA); or · pursuant to s 262A of the Income Tax Assessment Act 1936 (Cth); or · pursuant to s 1324(1) of the Corporations Act 2001 (Cth); or · in equity as an order for specific restitution. 85 In its Outline of Submissions, somewhat surprisingly, HFAT submitted that the law as to mandatory injunctions and the adequacy of damages as an adequate remedy was irrelevant (para 12). 86 In its Outline of Submissions in Reply, the respondents protested that to decide the application on one or more of the grounds raised by HFAT in its written submissions would, in the circumstances of the way in which HFAT conducted its case, constitute procedural unfairness as described by the High Court in Kioa v West (1984) 159 CLR 550 at 582-593. 87 In light of the parties' detailed submissions with respect to possible grounds for decision in this case, I make the following observations. 88 I consider that the respondents' submissions in this respect have merit. Nowhere in the application does HFAT plead the tort of detinue, the Income Tax Assessment Act, the Corporations Act or specific restitution. Not once during the course of the hearing were any of these causes of action raised by the solicitor for HFAT. The proceedings were not conducted on the basis that the respondents were required to meet a case in detinue, specific restitution, or based on the Income Tax Assessment Act or the Corporations Act. 89 In Banque Commerciale SA (in liq) v Akhil Holdings Ltd (1990) 169 CLR 279 Mason CJ and Gaudron J said (at 286-7): The function of pleadings is to state with sufficient clarity the case that must be met: Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 at 517, per Isaacs and Rich JJ. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party's right to this basic requirement of procedural fairness. Accordingly, the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities: see, for example, Browne v Dunn (1893) 6 R 67 at 76; Mount Oxide Mines (1916) 22 CLR at 517-518. 90 This is not a case where the legal issues inherent in claims of detinue, specific restitution, or pursuant to the Income Tax Assessment Act or the Corporations Act, were raised and litigated (contrast Nescor Industries Group Pty Ltd v MIBA Pty Ltd (1997) 150 ALR 633). It does not automatically follow that a claim for an order requiring the respondents to deliver chattels to the applicant introduced those causes of action to be met by the respondents - indeed the pleadings equally support a claim for a mandatory injunction, or an order pursuant to s 23 of the Federal Court of Australia Act 1976 (Cth) (Humphries v Halifax Vogel Group Proprietary Limited (2008) 76 IPR 144). Accordingly, even had I made factual findings in favour of HFAT on the issue of whether Mr Rhys Thomas had taken the HFAT booking records, I consider that a decision on the previously undisclosed bases submitted by HFAT after judgment had been reserved would be procedurally unfair. 91 Second, I make a general observation about the HFAT submissions prepared by its solicitor. Unfortunately, these submissions are characterised by repeated use of inflammatory and grandiloquent expressions such as "shocking", "pure poppycock", "dishonourable", "startling", "spite", "ridiculous fancy" and "snipe from the shadows". I note that overuse of such language in written submissions for consideration by the Court is, at best, unpersuasive and unhelpful to the judge in the task of objectively evaluating material. 92 Finally, at the end of the hearing it was envisaged that the parties be permitted to prepare submissions as to costs with the benefit of the reasons. I will now make directions for filing and service of those submissions. I certify that the preceding ninety-two (92) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.

Horizontal Falls Adventure Tours Pty Ltd (ACN 108 455 410) v Thomas

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