Quin, in the matter of Harman Properties Pty Ltd (in liq) v Harman

Federal Court of Australia|2021-02-25|Before: Anderson J

The First Plaintiff recover possession of the land described in Certificate of Title Volume 10785 Folio 834 (being Unit 7, 157-161 Beresford Road, Lilydale, VIC 3140) (Property).
The Defendant vacate the Property within 21 days of this order.
The Defendant deliver to the First Plaintiff all keys for all buildings and improvements on the Property within 21 days of this order.
Pursuant to rule 41.10 of the Federal Court Rules 2011 (Cth) and rule 53.08 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic), in the event of noncompliance by the Defendant with Order 1 and/or Order 2 and/or Order 3 within 3 months of the date of this order, the Plaintiffs have leave to issue a warrant of possession in the form of Form 53B of the Supreme Court (General Civil Procedure) Rules 2015 (Vic).
The Defendant remove from the Property all personal property, including vehicles, rubbish and any other chattels (Personal Property), within 21 days of this order.
In the event of noncompliance by the Defendant with Order 5, the Plaintiffs may remove and dispose of the Personal Property as they see fit without any obligation to account to the Defendant or any other person.
The Plaintiffs' remuneration, costs and expenses (including legal costs) of and incidental to the interlocutory application filed 11 December 2020 have been incurred in connection with the receivership and are payable from the assets of the Harman Property Trust. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Factual Background 6 The affidavits filed record the following factual matters. 7 The Company is the registered proprietor of the Property. The Property is an asset of the Trust. The Receiver was appointed liquidator of the Company pursuant to an order of this Court in proceeding VID 812 of 2019 made on 6 September 2019. On 17 November 2020, this Court made orders appointing the Receiver as the receiver and manager of the assets of the Harman Property Trust (Trust), with powers to do all things necessary and convenient to (among other things) sell the assets of the Trust, including the Property. 8 Mr Harman occupies four relevant roles for the purposes of this proceeding. First, Mr Harman is the sole director, secretary and shareholder of the Company. Second, Mr Harman is the appointor of the Trust. Third, Mr Harman is a director and equal shareholder of Harman Industries Pty Ltd (ACN 079 849 559) (Harman Industries), together with Olivia Andrade Harman. Fourth, Mr Harman is an income beneficiary of the Trust, together with Olivia Andrade Harman. 9 The Receiver's investigations (in his capacity as liquidator of the Company) to date have revealed a number of relevant matters. In September 2019, Mr Harman alleged that Harman Industries occupied the Property pursuant to a written lease between the Company and Harman Industries. Neither Mr Harman nor Harman Industries has produced any written lease or other evidence of the alleged lease between the Company and Harman Industries. Harman Industries has not paid any rent to the Company to occupy the Property. In these circumstances, the Receiver and the Company submit that Harman Industries' occupation of the Property was pursuant to a licence. 10 On 17 November 2020, the solicitors for the Receiver notified both Mr Harman and Harman Industries of three matters. First, Mr Harman and Harman Industries were notified of the court orders made on 17 November 2020 appointing the Receiver over the Trust assets, including the Property. Second, Mr Harman and Harman Industries were notified of the formal revocation of any prior licence which might have authorised either Mr Harman or Harman Industries occupying the Property. Third, Mr Harman and Harman Industries were notified of a formal notice to vacate the Property by 27 November 2020. 11 Mr Harman and Harman Industries failed to vacate the Property by 27 November 2020. 12 On or around 14 December 2020, Mr Harman and Harman Industries were served with (among other things) the interlocutory process filed 11 December 2020. Service was effected by letters posted on 14 December 2020 to Mr Harman at Mr Harman's last known addresses, being 1028 Heidelberg Road, Ivanhoe, 79 Dublin Road, Ringwood East, and Unit 7, 157-161 Beresford Road, Lilydale (ie the Property). Service was also effected by email to Mr Harman's last known email address. 13 On 8 February 2021, an insolvency accountant employed by PCI Partners Pty Ltd who has assisted the Receiver with relevant investigations concerning the Company, Mr Trent Isbister, attached to the front door of the Property a copy of the interlocutory process and the affidavit supporting it. Later that day, Mr Isbister spoke to Mr Harman on the telephone. Mr Harman confirmed that he had received the interlocutory process and the affidavit supporting it, and indicated that he would vacate the Property within one week. 14 However, Mr Harman and Harman Industries Pty Ltd have not vacated the Property since 14 December 2020. 15 In order for the Receiver to exercise his power to sell the Property for market value, the Receiver requires Mr Harman and Harman Industries to vacate the Property and to remove any personal property.

Legal principles 16 Section 79(1) of the Judiciary Act 1903 (Cth) provides: State or Territory laws to govern where applicable (1) The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable. 17 Section 53 of the Federal Court of Australia Act 1976 (Cth) provides: Enforcement of judgment (1) Subject to the Rules of Court, a person in whose favour a judgment of the Court is given is entitled to the same remedies for enforcement of the judgment in a State or Territory, by execution or otherwise, as are allowed in like cases by the laws of that State or Territory to persons in whose favour a judgment of the Supreme Court of that State or Territory is given. (2) This section does not affect the operation of any provision made by or under any other Act or by the Rules of Court for the execution and enforcement of judgments of the Court. 18 Rule 41.10 of the Federal Court Rules 2011 (Cth) provides: Execution generally (1) A party who wants to enforce a judgment or order of the Court may apply to the Court to make an order, to issue any writ, or to take any other step that can be taken in the Supreme Court of the State or Territory in which the judgment or order has been made as if the judgment or order was a judgment or order of that Supreme Court. (2) An order made under subrule (1) authorises the Sheriff, when executing the orders of the Court, to act in the same manner as a similar officer of the Supreme Court of the State or Territory in which the order is being executed is entitled to act. (3) A party who wants to enforce an order in more than one State or Territory may adopt the procedures and forms of process of the Supreme Court of the State or Territory in which the judgment or order has been made. Note: It is not necessary to adopt different modes of procedure and forms of process in each State or Territory. 19 Order 53 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) is titled "Summary proceeding for recovery of land". Rule 53.01 provides: Application of Order (1) Subject to paragraph (2), this Order applies where the plaintiff claims the recovery of land which is occupied solely by a person or persons who entered into occupation or, having been a licensee or licensees, remained in occupation without the plaintiff's licence or consent or that of any predecessor in title of the plaintiff. (2) This Order does not apply where the land is occupied by a mortgagor or successor in title and the claim is made by the mortgagee or successor in title. 20 Rule 53.08 provides: Warrant of possession (1) A warrant of possession to enforce a judgment for possession in a proceeding under this Order shall not be issued without the leave of the Court where three months have elapsed since the judgment took effect. (2) An application for leave under paragraph (1) may be made without notice to any person, unless the Court otherwise orders. (3) A warrant of possession to enforce a judgment for possession in a proceeding under this Order shall be in Form 53B. 21 In Chan v Chan [2020] VSCA 40, Tate JA (Maxwell P and Forrest JA agreeing) stated at [55]: Derham AsJ [in Framlingham Aboriginal Trust v McGuiness [2014] VSC 241 (which was upheld on appeal in Framlingham Aboriginal Trust v McGuiness [2014] VSC 354 (Ginnane J))] went on to summarise the principles that govern the application of Order 53: The authorities establish the following matters in relation to the operation of Order 53: (a) It is intended to enable a speedy resolution in favour of the proprietor of land of a dispute whereby trespassers are keeping the proprietor out; (b) It is intended to apply only in clear cases where there is no question to try; (c) The existence of a factual dispute does not deny the applicability of Order 53 where it is possible to resolve the dispute readily and fairly; (d) While an order for possession may be made notwithstanding that there is a factual dispute between the parties, such an order will only be appropriate if the Court is able to satisfy itself as to the material facts that bring the case within Order 53; (e) The jurisdiction should be exercised with great care; (f) Where an issue does emerge, the judge has discretion whether simply to dismiss the proceeding, to determine the issue or cause the issue to be subsequently tried. This includes giving directions as to the further conduct of the proceeding or ordering the proceeding to continue as if begun by writ pursuant to Rule 4.07 of the Rules; and (g) Where the Court gives judgment for possession under Order 53, it may grant a stay of execution. The power to give summary judgment for possession is similar in nature to the power to give summary final judgment under Rule 22.02 of the Rules. That power should be exercised with great care and should never be exercised unless it is clear that there is no question to be tried. The need for exceptional caution in exercising the power is the subject of numerous observations of courts in this country. (Citations omitted.)

Application to the facts of this case 22 Having regard to those statutory provisions and principles, the Plaintiffs submit that Mr Harman's continued occupation of the Property is without the consent of the Company or the Receiver and, as a result, the formal requirements of Order 53 have been met. The Plaintiffs submit that the Court may therefore make the orders sought by the Receiver and the Company. 23 Based on the affidavit material which has been filed, that position should be accepted. In this respect, five matters should be noted. 24 First, the Company and the Receiver have not consented to Mr Harman's continued occupation of the Property. 25 Second, in Tamawood Limited v Habitare Developments Pty Ltd (Administrators Appointed) (Receivers and Managers Appointed) (No 3) [2013] FCA 410, Collier J stated at [119]: It is well-settled that a licence, coupled with no grant of interest in any ascertainable property, is no more than a bare permission to do that which otherwise would be a trespass, and is revocable at will (Taplin v Florence (1851) 10 CB 744; (1851) 138 ER 294; Dixon J in Cowell v Rosehill Racecourse Co Ltd (1937) 56 CLR 605 at 630-631; Barwick CJ in Banks v Transport Regulation Board (Vic) (1968) 119 CLR 222 at 230; Murray (Inspector of Taxes) v Imperial Chemical Industries Ltd [1967] Ch 1038 at 1051; Computermate Products (Aust) Pty Ltd v Ozi-Soft Pty Ltd (1988) 20 FCR 46 at 49; Trumpet Software Pty Ltd v Ozemail Pty Ltd (1996) 34 IPR 481; [1996] FCA 560 at 498; Motor Group Australia Pty Ltd v Owners Corporation Strata Plan 64622 [2004] NSWSC 633 at [80]) or possibly on the grant of reasonable notice to the licensee (Computermate Products (Aust) at 49; Trumpet Software at 498). 26 In these circumstances, to the extent that either Harman Industries or Mr Harman entered the Property with the consent of the Company prior to liquidation, such occupation can properly be characterised as having been pursuant to a licence which is revocable. On 17 November 2020, Mr Harman and Harman Industries were notified of the formal revocation of any prior licence which might have authorised either Mr Harman or Harman Industries occupying the Property. 27 Third, there is no evidence before the Court that supports Mr Harman's assertion, in September 2019, that Harman Industries occupied the Property pursuant to a lease. Mr Harman has not provided any evidence of any lease agreement, and otherwise has not asserted an entitlement to occupy the Property by way of a lease since September 2019. 28 Fourth, Mr Harman has previously indicated to Mr Isbister that Mr Harman would vacate the Property within one week. 29 Fifth, in Quin, in the matter of Harman Properties Pty Ltd (in liq) v Harman [2020] FCA 1671, this Court made Orders that, pursuant to s 57(1) of the Federal Court of Australia Act 1976 (Cth), appointing the Receiver (without security) as receiver and manager over the assets of the Harman Property Trust, including the Property. This Court also ordered that the Receiver have the power to "do all things necessary or convenient to … sell the assets of the Harman Property Trust, including the Property". 30 Finally, the Defendant has not participated in this proceeding. As a consequence, no factual dispute or substantive issue has arisen in this proceeding which might deny the applicability of Order 53 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic). 31 In these circumstances, orders will be made for the Receiver to recover vacant possession of the Property, together with the associated orders sought by the Plaintiffs. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Anderson.

Supreme Court (General Civil Procedure) Rules 2015(Vic)

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