Sunnyrex Pty Limited v Titan Cranes and Rigging Pty Limited

Titan opposes the claims made against it by Sunnyrex. In particular, it disputes the initial rate of hire, which it says was $850 per week for the whole of the hire period, and claims a set-off in respect of monies it claims from Sunnyrex for:

· the storage of the cranes and the use of the facilities and utilities at the Annangrove site during the period of restoration and repair, prior to their removal to the construction sites in early 2006, · the work done and parts supplied in the repair and restoration of the cranes to an operable condition at the Annangrove site, · the maintenance, service and repair of the cranes after they left Annangrove, · the cost of storage of the 1993 crane at the Tomago site in 2007.

Atlas, a company related to Titan, also claims against Sunnyrex for monies it says it is owed for work done and parts supplied in the repair and restoration of the cranes to an operable condition whilst at the Annangrove site.

The claim by Mr Nicholas Hanlin Snr is made as the owner of the Annangrove property, in the alternative to the claim by Titan, for the storage of the cranes during the period of restoration and repair prior to their removal to the construction sites.

Sunnyrex opposes the claims by Titan, Atlas and Nicholas Hanlin Snr. In particular, it disputes that there was any agreement with either Titan or Nicholas Hanlin Snr for payment in relation to the storage of the cranes or for the use of the facilities and utilities at the Annangrove site; it disputes that there was any agreement with Titan or Atlas for payment in respect of the repair and restoration of the cranes at the Annangrove site; and it also disputes the arrangement alleged in respect of the maintenance, service and repair of the cranes during the hire period. Sunnyrex also denies that Titan has any entitlement to recover the cost of storage of the 1993 crane at Tomago, whether by reason of the lien claimed, or otherwise.

The main events, the conduct of the parties, and their commercial discussions

It will be helpful if at this point I identify the main protagonists. Sunnyrex Pty Limited, the plaintiff, was incorporated on 30 June 2005 at the instigation of Mr Mark Mikalauskas and Mr Joseph Lim for the purpose of purchasing the two cranes. They each contributed capital to the company for that purpose. Mikalauskas was a director from the inception of the company. He was a fitter and turner by trade with a background in the crane industry, mainly in maintenance and repair. Lim was a businessman. He was never an officer of the company, but his interest in it was represented by his brother-in-law, Mr Johnson Ngoi, who became a 50% shareholder in August 2005 and a director in September 2005. Titan Cranes and Rigging Pty Limited and Atlas Electrical Technologies Pty Ltd were corporations operated by Mr Damon Hanlin and his brother, Nicholas Hanlin Jnr. Titan was in the business of hiring cranes. Atlas was largely involved in the refurbishment and maintenance of cranes. Damon was a director of both Titan and Atlas. He is a qualified electrician, with experience as a rigger, crane operator and dogman. Nicholas Jnr was also a director, at least at the early stage of the relevant events. He is a qualified electrical fitter with experience as a rigger, crane operator and dogman. Their father, Mr Nicholas Hanlin Snr, was a part owner of the Annangrove property. Mr David Sherlock was the General Manager of Atlas and Titan. Mr Daniel Phillips was the Manager of the Canberra office.

There are factual disputes between the protagonists and conflicting versions as to almost every aspect of the events and the commercial discussions between them concerning the two Comedil cranes. Discussions in respect of the cranes commenced even before Sunnyrex purchased them, when they were the subject of conversations between Lim and Damon Hanlin in June, July and August 2005. There are factual differences even as to those discussions. Thereafter there are conflicting versions as to virtually every aspect of the commercial arrangements into which the protagonists entered from the time of the arrival of the cranes in Australia, while they were on the docks before they were transported to Annangrove, during the period they were stored at Annangrove, as to their hire to Titan, and thereafter until the return of the cranes to Sunnyrex in 2008. There are disputes concerning the conversations that led to the cranes being delivered to the Annangrove site for repair and restoration, and what was agreed in that regard. There are disputes concerning the conversations as to the work to be done on the cranes whilst at Annangrove to put them into a condition suitable for their operation at construction sites and as to what the commercial arrangements were in respect of that work, including how much work was actually performed, when, and by whom, and at what rate. There are disputes about the use of facilities and utilities at Annangrove and who agreed to pay for what. There are disputes as to the conversations surrounding the hire of the cranes to Titan, the terms of the hire and the rate of hire agreed, and as to increases in the rate. There are disputes about the maintenance and repair of the cranes during the hire period and who agreed to pay for what. There are disputes about the storage of the 1993 crane at Tomago, and the lien claimed by Titan. There are disputes as to the effect of the notices of termination served by Sunnyrex in September 2007. There are disputes about a purported sale of the 1993 crane to Titan in October 2007. There are disputes about missing and damaged crane components following the return of the cranes by Titan to Sunnyrex in January and April 2008. There are disputes about the process of dismantling the 1992 crane preparatory to its return to Sunnyrex. And there are disputes as to the damages.

The storage of the cranes at Annangrove 16. The first set of disputes arises in respect of the storage of the cranes at Annangrove. Following discussions between Hanlin, Mikalauskas and Lim, the two cranes were taken from the docks to the Annangrove property. The first delivery of parts occurred on 4 October, and the second delivery on 28 October 2005.

The first of these discussions took place when Mikalauskas met with Hanlin at Hanlin's office at Alexandria on 27 September 2005 to discuss the cranes. The two versions of the meeting differ. According to Mikalauskas they first discussed some work required on the cranes and the supply of parts, and then Hanlin offered free storage of the cranes at his father's Annangrove property, but that an access road would need to be built:

MM "I've arranged for the cranes to be stored at a property at Shane's Park."

DH "If you like I can arrange free storage for your cranes at my old man's place as that is where we are going to start storing all our cranes."

MM "Well, if it's free it's cheaper than where I was going to store them at, so if I can I will store them at your old man's place. Where is it?"

DH "Annangrove. There is one problem with the property. We have to put in a road in to get to the back part of the property."

Mikalauskas says that during the conversation he also asked Hanlin about work for the cranes. Hanlin told him he had been quoting on a number of jobs and it looked like they would get the Abigroup job for the Mater Hospital at Newcastle. Hanlin showed him the Abigroup quote on his computer screen. Mikalauskas says he replied:

MM "That's good. I want to get them working and make some money. Once you get a contract we will sit down and talk about percentages."

According to Mikalauskas' affidavit sworn on 13 August 2008, the two men also discussed the retainer of Atlas to do certain electrical work on the cranes.

Mikalauskas says that a short time after this meeting he met Hanlin at the Annangrove site, where Hanlin showed him where the road had to be built, but then told him that Mikalauskas would need to pay for the road, or construct it himself:

DH "This is where the trucks will need to drive down and unload the parts. Because you are getting free rental from us you will have to pay for the road to be put in or do it yourself."

MM "I won't be able to do it myself. I will need to get someone with an excavator in. Do you know anyone who could do the job?"

Mikalauskas says that Hanlin then arranged for the road to be excavated at a cost of $960, which he paid on behalf of Sunnyrex.

Hanlin disputes much of the Mikalauskas version of the arrangements pursuant to which the cranes went to the Annangrove site. He agrees that he met with Mikalauskas at his Alexandria office, but says he never offered free storage of the cranes and that he told Mikalauskas his father would charge, but at a good market rate. Hanlin's version of the conversation at that meeting is as follows:

MM "The cranes are stuck at the port. Can you see what you can do to get them through?"

DH "OK, I will try. Where are you going to store the cranes?"

MM "I found storage at Shanes Park but it's a minimum of eight months and so expensive."

DH "If we are going to work on the cranes, I might be able to get my dad to store them at his place at Annangrove. He would charge you, but it would be a good market rate."

MM "OK. If you can get the cranes there first, we can figure out the storage, the works and the costs once we have inspected them."

Hanlin agrees that in the course of that meeting Mikalauskas did ask him about work for the cranes, but denies showing him any quote on his computer screen, at least at that meeting. Hanlin says he told Mikalauskas:

DH "Don't worry about that. There'll be jobs in the pipeline."

Hanlin denies ever saying anything to Mikalauskas about an access road. He denies the conversation Mikalauskas says occurred at Annangrove about the access road and the need for an excavator, and denies arranging for any excavations. He says the only construction work carried out at the site was a work slab Mikalauskas constructed for himself. Hanlin maintains there was a dirt road already at the Annangrove site, as do others, including Phillips. During cross-examination Hanlin gave the following evidence:

"Q. Mr Mikalauskas is suggesting that there was a conversation between you and he in which you said, "Because you are getting the free rental from us you will have to pay for the road to put it in or do it yourself." A. This is what Mark Mikalauskas is saying? Is that correct?

Q. That's what he says he had a conversation with you. A. Well, I don't recall this conversation. I don't say this conversation took place. I don't see what road he's talking about. And he also prescribes that there was free rental.

Q. Did you-- A. So I'm telling you it's not the case.

Q. You didn't get an excavator to come in and do something? A. Your Honour, we have a small five tonne excavator on-site as there is. So there is upkeep to the road, because it's a dirt road, and it's subject to weather. But that's just in the normal course of keeping it in good condition. I'd never asked Mr Mikalauskas to pay any money for that, and I'm - $960 seems a very odd fee to pay for someone to come in and fix a road. That would be the floating cost of a machine just to turn up on-site."

Hanlin says the arrangements in respect of storage of the cranes were concluded at a later date, in a conversation that took place after he had spoken to his father, in a meeting at Annangrove, at which both Mikalauskas and Lim were present.

Hanlin gives the following version of exchanges between the three men that he says occurred during the course of that meeting:

DH "We will grant you a specific area on the site of approximately 1000 square metres and it will be at a good rate which will be below market rent. You can have the area behind the shed and to the left of the back road. My father has agreed to let that land. However, we will need to construct a concrete slab to reduce the wear on the ground from the machine."

DH (Pointing to the mound) "Approximately that size Joseph, about 5x10m."

Hanlin says that later in the meeting there was a further discussion, as follows:

DH "Dad agrees to it but he wants money for it. You are not getting a free ride on it. He's only taking my word. He wants $3,000 a month."

Mikalauskas expressly denies these conversations. Lim also expressly denies these conversations.

Nicholas Hanlin Snr confirms that he had a conversation at about this time with his son Damon in connection with the proposal to store the cranes at Annangrove. He specified $3,000 a month for rent and reimbursement for use of facilities such as power and gas. Damon Hanlin told his father to bill Titan and that he would work it out with Lim and Mikalauskas. Subsequently, Nicholas Hanlin Snr also had a conversation with Mikalauskas, to the following effect:

NH "I will let you use the workshop and the power but you will have to reimburse me. No one is to use my tools."

During the period over which the cranes were at the Annangrove site, from September 2005 to the first part of 2006, a substantial amount of work was carried out to put them into a condition suitable for their operation at construction sites.

The arrangements in respect of the work required on the cranes 30. Another set of disputes arises as to this work and the commercial arrangements in relation to the work, such as what work was done, whether it was necessary work, who did the work, who agreed to pay who for what, and at what rate.

After the two cranes arrived at Annangrove, Damon Hanlin inspected them together with his brother, Nick, and Phillips. According to Hanlin, the cranes were in a very poor condition both as to structure and as to mechanical aspects. There were heavy rust spots in critical sections, including jib sections, counter jib sections and towers.

Mikalauskas agrees the cranes were in poor condition, but denies the extent of the problem. He denies there were heavy rust spots, although there was some rust in the counter jib sections. He says the cranes had been painted with "two pack' paint.

Hanlin says a meeting then took place one morning in October 2005 at the Annangrove site between himself and Mikalauskas, with Nick Hanlin Jnr and Phillips also present, at which the arrangements for the work on the cranes, and the cost, were discussed. He told Mikalauskas the cranes were in a very poor condition and needed a lot of work. He gave Mikalauskas an estimate of $150,000 per crane to put them into an operational condition. Terms were discussed for labour and parts, to which Mikalauskas agreed, and he gave the go ahead for work to commence. Hanlin says that later that day Mikalauskas gave Nick Hanlin Jnr a cheque for $8,000. The date of the cheque was 18 October 2005.

DH "The condition of the cranes is very poor. The painting and apparent sand-blasting is minimal or non-existent. All the mechanical components are sub-standard and are in very poor condition. These cranes need a lot of money spent on them to bring them up to standard. It is mandatory that WorkCover has documentation stating that the cranes meet all Australian standards associated with tower cranes."

NH "You are going to have to do something about this."

MM "I know. We know that the hoist gear boxes are seized and are in need of a lot of work."

DH "These cranes will need to be sand-blasted in certain areas because of the amount of rust and structural defects."

DP "Mark, we will need to start spending money. Where do you want to start with it?"

MM "I would like to start on the structure of the crane and I will take care of the mechanical defects."

DH "Mark, we need some money up front to cover some of the anticipated spending. I can see that you will need to spend at least $150,000 on each crane to bring them up top standard."

MM "Yes we need to spend this money because I do not want any problems or backlash from the cranes."

DH "We will try and minimise labour used in the beginning, but as the timeline comes closer for an erection date we might have to increase the workforce. I will try and do my best as to parts - it will be cost or cost plus ten percent."

NH "We will minimise our labour, and any labour we need from Atlas will be charged at a flat rate of $60 per hour, plus parts at cost or cost plus ten percent."

MM "I totally agree to this proposal and I am very appreciative that you are doing it at this rate."

Hanlin says that following this conversation, work started on the cranes, under the supervision of Sherlock. Work was carried out by employees of both Titan and Atlas, including himself, his brother, his father, Phillips, Jarrard Hannan, Neil Bowland and Christian Bowland.

Nick Hanlin Jnr supports his brother's contention that there was a meeting at the Annangrove site in October 2005, although he says Lim was also present. Phillips also says that a meeting took place around this time at Annangrove and that work then commenced and continued over the next few months.

Mikalauskas denies that such a conversation ever occurred. He says the meeting never took place. The $8,000 cheque he gave to Nick Hanlin Jnr, dated 18 October 2005, was for transport costs. He says that an inspection of the cranes by the Hanlins and Phillips could not have taken place in mid October, because the second delivery, consisting of 40% of the crane components, did not arrive at Annangrove until 28 October 2005.

Mikalauskas says that the only discussions in 2005 concerning work on the cranes took place at the Alexandria meeting on 27 September 2005. These were limited to the need to put in slip rings, load systems and computers:

DH "Joseph has told me that the cranes have arrived. We need to talk about what we need to do to the cranes. We need to put in a slip ring in each crane."

DH "Because we won't hire them out without a slip ring."

DH "I can get a good deal on two at cost for $3,500 each."

DH "We need to put a new load system in each crane."

MM "Why don't we wait and see what load systems come with the cranes."

DH "We are not going to use the cranes if they have shit computers in them. We can get new computers at cost for $3,000 each."

Mikalauskas further contends that no work was done on the cranes by Titan or Atlas prior to January 2006, and that any work done on the cranes before then was done by him personally, or subcontractors engaged by him on behalf of Sunnyrex. He says there never was any agreement that Titan would perform any work on the cranes. The only agreement was with Atlas, for the electrical works discussed with Hanlin at Alexandria on 27 September 2005, in the following terms:

MM "Damon, can I get some of your sparkies to look over the cranes and repair what needs to be done to the electricals?"

DH "Yeah that's fine. We'll charge you $60.00 per hour labour plus parts at cost. I will also charge you for our apprentice Jeremy at my cost of $20.00 an hour."

DH "I'll talk to Nick about getting the work done."

Hanlin says that he had another meeting in November 2005 with both Mikalauskas and Lim in which it was agreed that Atlas should become involved and carry out some of the work, at the same hourly rate of $60 an hour. Mikalauskas denies this conversation, but conceded that he often left it to Lim to take the lead on commercial negotiations. Hanlin says there was a further meeting in late 2005 with Lim, also attended by Phillips, at the request of Lim who was concerned about the costs being incurred. He says Lim said:

JL "Damon these cranes are killing me financially. Can you please consider purchasing one of the cranes?"

Mikalauskas denies that Lim was ever authorised to sell one of the cranes. Lim says he and Mikalauskas reached an in principle agreement in December 2005 that Sunnyrex would transfer one crane to each of them in consideration for the loans.

Hanlin says there was yet another discussion about work on the cranes in late January 2006, or early February 2006, at Annangrove, attended by Mikalauskas, Lim and Nick Hanlin Jnr. This was in the context of Hanlin revealing that Titan had secured a job for Abigroup at a site in Newcastle, to commence in March 2006, and his concern that the cranes were not yet ready for operation. He gives the following version of the conversation:

DH "It is to be acknowledged that the cranes are nowhere near ready for use."

DH "We need to get in extra labour, and bring in a boilermaker called Neil, my father and an added electrical fitter. You can subcontract the boilermaker directly, and pay him directly."

Mikalauskas denies this conversation, and gives a different version.

The work performed on the cranes 42. There are numerous disputes about what work Titan and Atlas actually did, when it was done and by whom it was done. The schedule that follows provides a flavour of the matters disputed. There are other disputes. For example, Mikalauskas denies that Mr Phillips did any work on the cranes, and denies the extent of work claimed to have been done by Nick Hanlin Snr.

43. Titan and Atlas say the work was performed on the two cranes between October 2005 and March 2006, following which they were sub-hired and transported to the construction sites at Newcastle and Fairfield. The two companies claim for labour and parts.

44. David Sherlock, the Office Manager, raised tax invoices for the work and parts, which were given to Mikalauskas. He disputed the invoices and a meeting took place on 26 July 2006 between him and Sherlock to discuss them. Following that meeting Sherlock prepared a spreadsheet, which he subsequently sent to Mikalauskas on 3 August 2006 by email.

45. It is instructive to look at the work the Hanlins say was performed on the cranes by Atlas and Titan, and the Mikalauskas response:

Work that the Hanlins say was performed Mikalauskas' response Preparation of structure through removal of ladder systems and platforms Did not occur. There were no ladders or platforms mounted in the tower section of the crane that were attached at the time the crane arrived in Australia as the ladders and platforms were at that time detached. Manufacture of the missing The missing items included 4 cross braces and 2 platforms. This work was undertaken by myself and Neil Tarrant... items Galvanising This work was also completed by myself and Protech. I organised for the components to be sandblasted by Atlas Abrasives. Cleaning of pinholes An Atlas employee named Jeremy Hubers assisted me with the cleaning of the pinholes. Splitting of towers Only one tower required splitting. This work was performed by Neil Tarrant of Protech, Aaron Inglejaw and myself. Manufacturing jig for base This work was completed by Protech. Rewiring cabin and power Some electrical work was completed by Atlas in relation to these items. pack Removing mesh walkways This was completed by myself, Neil Tarrant from Protech and another subcontractor named Aaron Inglejaw. and replacing with new Manufacturing new counterweights with Titan This work was completed by myself, Neil Tarrant from Protech and Aaron Inglejaw. logo Rebuilding new gear boxes Sunnyrex engaged Hunter Gears & Engineering to rebuild the existing hoist gear boxes...I personally performed the work splitting one of the trolley gearboxes. The trolley gearboxes and 4 slew gear boxes were rebuilt by Country Cobbles. Rebuilding all mechanical equipment for both hoists I personally replaced the bearings in the idler arms in the trolley and hoist of both cranes. I arranged for Austral Hydraulics to manufacture a new main sheave pin for the A-frame. and trolley Preparation of cabin including all new controls, SLI system, air conditioning, 2 new control joysticks were supplied and installed by Atlas. There were no SLI systems in either crane. Atlas undertook some work to the air conditioner on the 1992 crane. Neil Tarrant undertook the balance of the work. Window tinting was undertaken by Mr Cool Professional Window Tinting Pty Ltd. Sunnyrex paid for the cost relating to the 1992 crane and Titan paid the costs relating to the 1993 crane. Painting was undertaken by Sunnyrex or its subcontractors Aaron Inglejaw and Atlas Abrasives. I retained Neil Tarrant to install one new seat in the 1992 crane. I am not aware new warning lights were installed. tinting windows, painting, new seats, new warning lights and testing Rebuilding of slew ring including complete strip There are no roller bearings in the slew ring. The bearings are ball bearings. Aaron Inglejaw and myself stripped both slew rings. Sunnyrex purchased and reassembled the replacement parts. The parts were purchased from CBC Australia Pty Ltd and SFK Bearing Suppliers Pty Ltd. down and replacing of roller bearings Rebuilding of gearboxes for This work was undertaken by myself and subcontractors engaged by Sunnyrex. slew and electric motors Installing new slippering This work was undertaken at my request by Neil Tarrant of Protech. connector Installing new lanyard lines This work was undertaken at my request by Neil Tarrant of Protech and myself. Installing new wind speed This work was undertaken by Atlas. indicator Installing new hoist rope and There were no new hoist ropes installed during the pre-erection period. The trolley ropes do not get wound onto trolley drums until the erection process. trolley rope Organising for sandblaster to attend site and sending There was no sandblasting performed at the Annangrove site. The crack testing & painting was undertaken by HVT Inspections. parts to sandblaster yard for crack testing & painting Replacement of the slew Nick Hanlin Jnr repaired only 1 slew harness harness Installation of a slip ring I engaged Neil Tarrant of Protech to install both slip rings Repair of the switchboard This item was repaired by Atlas electrics Replacement of the joysticks Two joysticks were replaced in the 1992 crane by Atlas Running of the hoist ropes Agreed off Unwiring of the motors for repair and then rewired when One electric motor was rewired Atlas did reconnect a number of electric motors returned Installation of a new limits I agree that one limit box was replaced by Atlas box on the trolley Installation of the new I personally mounted and installed the one transformer and arranged to wire it up transformers Other general works to get the cranes ready for service I am not aware of any other general works that were undertaken

46. These disputes were not resolved. In October 2006 a series of emails passed between Hanlin and Mikalauskas that brought the matter to a head. I will come to these emails later.

The hire of the cranes by Sunnyrex to Titan 47. The next set of disputes concerns the arrangements entered into in respect of the hire of the cranes by Titan from Sunnyrex, and the rate of hire.

Mikalauskas says the hire of the 1992 crane was first discussed at the meeting on 27 September 2005. He says it was next discussed in January 2006 when Hanlin informed him about the Abigroup contract at Newcastle. He says the conversation went this way:

DH "Mark, we've won the job with Abigroup so you better hurry up and get these cranes ready."

MM "How long is the contract for and how much do I get?"

DH "8 months but these contracts have a habit of blowing out. I'm going to give you all of the rental monies we get off both cranes so you can pay them off quicker."

MM "Thanks, I owe you one. Can I get that in writing?"

According to Mikalauskas, he was not told the hire rate in this conversation, and did not find that out till later. He also says that Hanlin rang him a few weeks later to advise that Titan had won a job for the second crane at Fairfield. But Mikalauskas is silent in his affidavit as to what the agreement for rental was in respect of that crane, and likewise he says he did not find out till later.

Hanlin denies these conversations and says that there were no substantive discussions about the rental arrangements before his meeting with Mikalauskas in early February 2006, also attended by Phillips, when he offered a rental rate of $800 per week to hire the 1993 crane for the Abigroup job, which he says Mikalauskas accepted. He records the following conversation:

DH "Mark, we will offer you $800 per week for the dry rental of the crane regardless of what rental income I earn from the crane."

MM "Ok that sounds good, and it is a good start for us. In fact it would be good to start recouping some of the funds we have spent."

DP "With any servicing required to keep with the Australian standards all costing borne through this will be charged directly to Sunnyrex. Titan will not be responsible for any maintenance costs ."

MM "That is ok but what about the critical works (namely referring to the up-down movement)."

DH "Titan has already covered this in its quotation and will cover the cost of that in the yard to the job."

DP "$400 per month, Mark, even though it's Newcastle."

MM "OK, but can I be made aware of any problems with the crane?"

Hanlin says that the next thing to occur was another meeting later in February 2006 when he presented a form of written contract, as to which Lim requested an electronic version so that he could make some changes. Then, at a further meeting in February, Lim complained about the rental:

DH "Joseph, you know I've been working hard to win projects for these cranes. I've had to go in cheap to get them on jobs. What would you have me do Joseph knowing this will be the first time the cranes are erected and the risks that Titan are taking to its reputation if anything is to go wrong?"

JL "I understand but can we at least increase the rate a little?"

DH "Half way, $850. Anyway, Mark has already agreed to $800. Don't you guys ever talk?"

Hanlin says that a similar agreement made during February 2006 in respect of the 1992 crane, when Titan won a contract in respect of the Chiha construction site at Fairfield, at a lunch with Lim at a noodle house in Lidcombe.

Both Mikalauskas and Lim deny these conversations and say that Sunnyrex never agreed to accept a sum of $850 per week for the hire of the cranes. Mikalauskas' version is that around 25 March 2006, a week or so after the 1993 crane was erected at the Newcastle site, he approached Hanlin at the Annangrove site and had a conversation in which Hanlin told him the rent would be $1,100.00 plus GST per week.

"At that stage whilst there was an oral dry hire agreement in place, no written agreement between Sunnyrex and Titan for the 1993 crane had been prepared. About a week or so after 18 March 2006 I approached Damon Hanlin at the Annangrove yard. We had a conversation to the following effect:

MM "How much are we getting as rent for each crane?"

DH "We are giving you $1,100 plus GST per week for each crane."

DH "It's your first job. We all have to make money out of this but we will look after everything."

MM "Ok. Let's get something in writing. I've been asking you for ages."

Lim's version is that it was not until a meeting in May 2006 with Hanlin and Mikalauskas that agreement was reached on the rental rate. In the meantime, the 1992 crane had been erected at the Fairfield site in April 2006.

"No contract was ever provided to me until after my meeting with Damon Hanlin and Mark Mikalauskas at Titan's Alexandria offices in or about May 2006. During that meeting an agreement was reached for Titan to pay Sunnyrex $1,100.00 plus GST per week for the rental of each of the cranes. It was also agreed that Titan would pay for the cost of maintenance and repairs and that Sunnyrex would pay for one half of the parts over and above the sum of $1,500.00. During that meeting we said words to the following effect:

JL "We want $1,100.00 plus GST for each crane. Titan will have to pay for all maintenance and labour and Sunnyrex will pay half the costs of any parts over and above $1,500.00."

JL "Could you email me a copy of the agreement you have given us so I can amend it. The agreement does not relate to Sunnyrex."

DH "Yes I will send it out to you so you can change it."

The versions given by Lim and Mikalauskas cannot sit together. Why would Lim be demanding $1,100.00 when according to Mikalauskas he had already agreed such a rate?

It is clear that Mikalauskas' version is that there was an agreement already in place before the cranes were erected, but that he did not know the rate until told by Hanlin at this meeting. In my view, the only available inference is that on his version, in accordance with the conversation he records as occurring with Hanlin in January 2006 (see paragraph 48 above), Sunnyrex was to receive by way of rental whatever Titan received from the sub-hirers.

Hanlin says that the first time a figure of $1,100.00 was raised was at the Annangrove site on 20 April 2006 in a discussion involving Lim, Mikalauskas and Phillips and himself:

"Mark raised his concerns that he wanted more money for the cranes:

MM "Damon, Joseph and I have been talking and we are not happy with the $850 that was originally proposed. We would like $1100 per week."

DH "Mark, it was agreed on several occasions that these rates were fair and reasonable for the first time these cranes have been erected and working in Australia since their rebuild. We agreed that we would go in on a cheap rate with the builder to get the cranes up and working."

DH "Well we have agreed on this before. Why do you want to change this when you see the cranes up and operational. I don't think this is fair practice."

An argument ensued, at the conclusion of which the following was said:

DH "We should look at making it a percentage of what we receive from the builder i.e 70/30 or thereabouts for the next job."

There were further discussions in early May 2006. These conversations centred around two themes: the form of the written hire agreement and how the cost of maintenance and repairs were to be borne during the period of the hire. I have already set out Lim's version. He says it was agreed that Titan would pay for all maintenance and labour and Sunnyrex would pay half the costs of any parts over and above $1,500.00. Hanlin says that Lim wanted to change the maintenance schedules to provide that Titan would pay the first $1,500.00 of any bill, but he refused to change the original arrangement that Sunnyrex would be responsible for all repair and maintenance costs:

JL "Damon, I feel it is normal that you bear some of the costs for the maintenance as it is fair wear and tear."

DH "Joseph, we have already spent so much money with no reimbursement. Why should we be responsible for maintaining the crane and Sunnyrex has no responsibility or even minimal responsibility if anything goes wrong. Who would be responsible if the crane breaks down and we are back charged?"

JL "We will just need to talk about it at the time and discuss."

DH "Well, what's the point of having a contract if you just want to discuss things every time something goes wrong?"

A lot of evidence was devoted to various versions of a draft document entitled "Sunnyrex Pty Ltd Plant & Equipment Hire Agreement" brought into existence with a view to recording in writing the hire agreement entered into between the parties: see Exhibits B, P and Q. None of the parties contends that a formal written agreement was ever entered into by them. The fact is that there was never any version of the draft document containing any nominated rental amount. However, Sunnyrex seeks to rely on the documents to corroborate its version of the hire agreement, in particular because Hanlin signed a version containing the revised clause 28 "Maintenance and Repair" which is in a form consistent with the Sunnyrex case.

The evidence discloses that Hanlin emailed a proforma version of the document to Lim in May 2006 (Exhibit A). Lim amended the proforma document, in particular clause 28, but, significantly, he failed to enter any amount under Item 7 of Schedule 1 in relation to the hire rate. He forwarded the revised version to Mikalauskas by email on 11 May 2006, and subsequently to Hanlin on 15 May 2006 (T 105). Lim says there were no further substantive discussions about the document, and then some time later he was told a signed copy of it was ready to be collected from the Titan office in Canberra. He then arranged for Mikalauskas to collect it.

Mikalauskas was asked about the document and asked why the rental amount was not inserted (T 332):

"Q. That's a fairly fundamental term, isn't it, Mr Mikalauskas? A. Yes.

Q. How could he agree to a contract by signing it without a nominated rate as to what he was going to pay? The primary function of the contract was to specify what Sunnyrex was entitled to receive per week, wasn't it? A. He was meant to fill in that and then sign it."

It is improbable that if Lim, and Mikalauskas, believed a deal had been struck at $1,100.00, the figure would not have included in the schedule to the document sent.

In my view, the failure by Lim to insert any amount for rental in the document he sent, let alone the figure of $1,100.00 he says had already been agreed, is more consistent with the Hanlin version of events, namely that a rate of $850.00 had been agreed, but Lim and Mikalauskas were trying to renegotiate an increase in the rental rate.

In cross-examination, Hanlin gave the following evidence:

"Q. Did you provide a signed contract? A. No, I did not.

Q. Why not? A. Because we - Mr Lim continually played ducks and drakes with all the figures and we could not come up with that - well, I would not agree to the maintenance that he was proposing, that he kept putting into the contract.

Q. He wanted a signed contract, didn't he? That's what he's asking for. A. Yeah. I wanted a signed contract too - to what my terms and conditions which we originally agreed on, too." (T 609)

Q. What did you do after receipt of the draft contract from Mr Lim in May 2006 about writing to Mr Lim to tell him you didn't agree with what was in the draft contract? A. I didn't write to him. I contacted him by telephone.

Q. I'm suggesting to you, you did no such thing. A. Well, that's incorrect." (T 610)

Hanlin was further cross-examined about various handwritten notations to clause 28 that appear on Exhibit P. He conceded that he signed the version of the hire agreement amended by Lim and emailed to him, but denied telling Lim the signed contract was ready for collection (T 624 -5). As to clause 28, he said:

"I had signed the document assuming that this document had not had any changes made to it other than the front page. Carelessly it was the case that I didn't read the contract, and at the time, no excuse, busy, it was, I - then I started to read this contract, I had noticed that Joseph had made changes to this document which we had not agreed on, okay, so therefore I started to read through this more carefully, and there - the doodles started to appear." (T 627)

"Q. The extent to which you disagreed with clause 28 was reflected by the amendments you made to it. Correct? A. No, that's not correct. That was some of many, and I remember vividly, because after reading that and starting to make some doodles there, I thought, "No, I'm going to make a phone call to Joseph because he's actually again done things against what we'd originally agreed to by making these changes to the original contract." (T 628)

At the end of the day, whatever might be said of the attempt by the parties to record the rental agreement in writing, it simply never eventuated.

It is clear that by October 2006 the relationship between the protagonists had started to deteriorate. The Titan and Atlas tax invoices for the work done and parts supplied remained unresolved, and Sunnyrex remained unhappy with the rental rate. The series of emails between Hanlin and Mikalauskas to which I have referred already brought the disputes between the protagonists to a head. Mikalauskas precipitated events with an email to Titan and Atlas on 8 October 2006.

The Mikalauskas email of 8 October 2006 read as follows:

With reference to the Sunnyrex CT602 crane on-site at Mater Hospital, Newcastle; I assume the job is drawing to a close so I would appreciate some information before the end of this week:

2. Name and number of the company you will be contacting for the unloading. I want to ensure the right crane is supplied for the unloading of the trucks at my yard.

Also, could you please insure the crane is returned undamaged and with all components present so I can complete an audit on the crane.

"I would assume that you will be settling your debts to titan and atlas this week also, as my audit still shows significant debt owing mark, I think you should be spending more time relating to the debt subject than critical works mark. Your thought process amazes me!

70. The next substantive event occurred later in 2006 when Mikalauskas caused Sunnyrex to issue tax invoices dated 19 December 2006 for the hire fees for the period from 18 March 2006 for the 1993 crane, and from 20 April 2006 for the 1992 crane to 30 November 2006: Exhibit C. The rate of hire specified was $1,100 per week plus GST. A second set of invoices dated 14 March 2007 was issued for the period from 1 December 2006 to 28 February 2007. Titan did nothing in response to these invoices.

71. Sunnyrex seeks to make considerable capital from the non-responsive behaviour of Titan as evidencing agreement on a rental rate of $1,100.00 (see the written submissions of 18 November 2008 at paragraphs 27 - 35). Hanlin says:

"I did not respond in writing to these invoices, or have anyone from Titan respond in writing. This was because at this time:

(a) I considered that I was still on good personal terms with Mark Mikalauskas and Joseph Lim;

(b) Our dealings up to this time had generally been informal and verbal because of our personal relationship;

(c) I was dealing regularly with Joseph Lim by telephone and verbally;

(d) I believed, and I believed that Mark Mikalauskas and Joseph Lim knew, that the rate was not what had been agreed and that the amounts stated would have to be reconciled against the amounts owed to Titan and Atlas for the work that had been performed on the 1992 and 1993 cranes; and

(e) I believed we would be able to meet and reconcile all of the claims between us on the same basis I have set out above."

72. Mikalauskas says that he met with Hanlin on the afternoon of Wednesday 7 February 2007 at the Mosman Hotel with a view to resolving their disputes. The discussions were not fruitful. Mikalauskas says he told Hanlin:

MM "By the way I don't want you discussing the cranes with Joseph. He is not even a Director of the Company."

MM "Yeah, the buck stops with me. All he does is stir things up. You are only to deal with me."

73. In his affidavit evidence, Hanlin denied there was a meeting at Mosman in February 2007. He says the meeting was in October 2007. He was cross-examined about this. He said there were several meetings in that area. He agreed he did meet with Mikalauskas in early 2007 but at the Cremorne Hotel. The meeting at the Mosman Hotel was later in the year. He denied that Mikalauskas told him not to talk to Lim because he was not a director.

The conclusion of the Newcastle job and storage of the 1993 crane at Tomago 74. The Newcastle job came to an end on 20 April 2007. The 1993 crane was dismantled at the Newcastle site, transported to a site at Tomago and stored till 22 October 2007. Hanlin says that he had a conversation with Lim to this effect:

DH "Joseph, the crane is about to come down in Newcastle. I am storing it on the ground until we sort out our problems. We are still owed a lot of money by you. You are going to have to pay for the work and storage."

DH "You are not having it back until we sort it out."

75. Lim did not deny this conversation, in his affidavit, but when cross-examined he said:

"Q. You have not denied in your affidavit that the conversation that I just put to you that Mr Hanlon said to have occurred in April 2007 took place, have you? A. Conversation about the matter and about the crane in storage, they didn't take place. How many times do I have to tell you did not take place?"

Subsequent events and discussions (May - December 2007) 76. By letter dated 20 May 2007 Mikalauskas caused Sunnyrex to write to Hanlin at Titan as follows:

"We are informed that our Comedil CT602 is dismantled and stored at Newcastle.

We bring to your attention our unpaid invoices and advice (sic) you that we require payment for these invoices prior to your re-erecting the above mentioned crane, if that is your intention to do so.

Furthermore, we inform you that we are increasing our rates from $1100.00 plus GST to $3,000.00 plus GST per week, effective immediately. Your re-use of the equipment from this date will be taken by us as your acceptance of these rates. If you do not intend to re-use the equipment, contact me for the details you will require to return the property.

I reiterate my insistence that I shall only accept back charges for repairs after a purchase order for these works has been issued by Sunnyrex."

77. Hanlin says he had a meeting with Mikalauskas in June 2007 and records the following conversation:

DH "Mark, we've gone over this so many times, if you're not happy with any of the prices let us know in writing so we can look at it again for the last time. However, you still owe us the majority of the money."

MM "I agree that I owe you some money but I'm not paying any of it until we sort it out."

78. Shortly after that, Lim re-commenced negotiations for the sale of one or both cranes by Sunnyrex to Titan. Hanlin gave the following oral evidence about these discussions (T 519):

"Q. Doing the best you can, can you recall what you said and what Mr Lim said at that meeting in about July or August 2007? A. Again, Joseph, being the salesman that he was attempting to be, was trying to sell the cranes to us because he didn't want to be involved. The conversation basically went that would we be interested in purchasing the crane in its current state which we sort of considered the idea but it was on the proviso of a few things, namely, contracts that we could secure, et cetera.

Q. Was there a document prepared at that meeting? A. Yes, there was.

Q. Who prepared that document? A. Again, Joseph Lim and myself.

Q. What happened to that document after it was prepared? A. Again, Joseph took that document away.

79. In an email dated 17 July 2007 Lim sent Titan a draft contract. This draft provided for the sale of both cranes to Titan and for the release of Sunnyrex by Titan and Atlas from all claims in respect of the cranes, and the release of Titan and Atlas by Sunnyrex from all claims in respect of the cranes.

80. In the meantime Hanlin was in discussions with Baulderstone Hornibrook in relation to the supply of cranes for a proposed construction at a site in Delhi Road, North Ryde.

DH "We have another project interested in hiring the crane. Are you interested in hiring the crane out?"

JL "We are very interested, what sort of money are you offering and how long is the job for, Damon?"

DH "Joseph, it's a good job about 40 weeks in duration and would like to offer 2400/week for the crane but if we are going to enter into this agreement I want all other problems solved with Sunnyrex."

JL Yes OK let me speak to Mark. Even though he is not speaking to me at the moment he must understand that we need to keep these cranes working and get some sought (sic) of income."

Hanlin says there were further conversations with Lim in September 2007:

JL "I'm sick and tired of what Mark has done to me in Sunnyrex. He has tried to screw me over. All I want is my 50% which is one crane and to get out of Sunnyrex."

DH "Tell me how much you want for it Joseph. And I will speak to the directors of Titan to see if we want this crane."

DH "We will by (sic) the crane off you for this job. The purchase will be where is as is for $190,000. Do you agree?"

DH "Let's enter into a sale contract this time Joseph. Can you raise an invoice for the sale of the crane?"

By letters dated 11 September 2007, Mikalauskas caused Sunnyrex to write to Titan saying that the tax invoices for hire of the cranes remained unpaid as a result of which Titan was in "substantial breach of the Hire Agreement". Notice was given that if the breach was not remedied by payment of a nominated outstanding sum on or before 5.00pm on Wednesday September 2007, it was intended to terminate the Hire Agreement. Then, by letters dated 25 September 2007, no payment having been made, Sunnyrex wrote to Titan:

We note that we have not as yet received payment of the outstanding amount…and we hereby terminate the Hire Agreement.

Would you organise the return of the crane to premises at 2 Chisholm Rd Sefton. We require the crane to be delivered back to us within (7) days from the date of this letter."

On 18 October 2007 Hanlin sent an email to Johnson Ngoi, Lim's brother-in-law who had been appointed as a director of Sunnyrex to represent Lim's interest in the company:

As discussed with yourself on the 2 Oct 2007 we would like to proceed with the purchase of the Comedil CT 602-8 tower crane serial number 1692015 from your Sydney yard for $190,000 Aus as is where is. We will require a formal letter of offer so as we can deposit the monies into your account as they become available. Your offer is required ASAP so we can finalise finance. We will forward the deed of release on Monday next week by email. We would like it returned before settlement so as finance can be finalised. We will offer a deposit for the return of the deed so as there is a commercial bind between both parties. We also intend to return the 2nd crane to Sunnyrex at the completion of its project. Please note the urgency of this as we are required to sign a contract with the builder and would like the crane locked in. Please feel free to contact me if you have any further queries. With all my Best Intentions

The following day, Friday 19 October 2007, Ngoi sent back an invoice for the sale of the crane for $190,000.00, plus GST of $19,000.00, a total of $209,000.00. Hanlin then emailed Lim on 24 October 2007:

"Hello Joseph, Please find attached the Contract of Sale. It is a standard contract to make it as easy as possible. Can you please sign this contract and be prepared to send it back by express post dhl or the like. Can you also scan the front page once signed and return to sender. Please call tonight Joseph if you need to discuss."

After some amendments to the document, Ngoi signed it on 25 October 2007. A 5% deposit of $9,500.00 was then put into the trust account of solicitors, Constantine Pavlis & Co to be held until settlement.

While all this was going on, Hanlin had arranged for work to be done on the 1993 crane to get it ready for the project at Delhi Road. Titan entered into a contract with Baulderstone Hornibrook on 23 October 2007 that involved the hire of the 1993 crane at a rate of $2,700.00 per week. The1993 crane was subsequently transported to the Delhi Road site and erected preparatory to the hire.

On 25 October 2007 Constantine Pavlis wrote to Michael Atkinson, solicitors acting for Sunnyrex on the instructions of Mikalauskas:

"We refer to the above matter and note that you act for Mark Mikalakis (sic) and we act for Titan Cranes & Rigging Pty Ltd. We note that your office has sent documentation to Baulderstone claiming that our client is acting illegally in renting out cranes to them. This documentation has been treated with the utmost seriousness by Baulderstone who have approach (sic) our client with significant concerns. This has greatly damaged the credibility and business of Titan Cranes & Rigging Pty Ltd.

We enclose herewith Contract for Sale Business form Sunnyrex Pty Ltd to Titan Cranes & Rigging Pty Ltd for the sale of Comedil CT 602 crane serial number 1692015 duly executed by the parties. In accordance with same Titan Cranes & Rigging Pty Ltd have legally obtained ownership of the above mentioned crane and hence have the ability to rent same to Baulderstone.

In accordance with the above we ask that you seek to correct your representations to Baulderstone. We note that this is a matter of urgency as the contract for hire of the crane between Titan Cranes and Rigging Pty Ltd and Baulderstone commences on Monday 29 October 2007. In the absence of corrective action this office will approach the court for an urgent application for declaratory relief and to claim damages. We note that the damages in this instance could be significant as Baulderstone may have the ability without admission to seek demurrage in this instance.

We urge the above to your urgent attention and expect to receive a response to same immediately otherwise it is proposed to approach the court this afternoon or tomorrow.

We reserve the right to tender a copy of this letter in relation to costs of any such anticipated proceedings."

Events then precipitated and Mikalauskas caused Sunnyrex to commence these proceedings on 11 December 2007. That resulted in an interim arrangement recorded in Consent Orders pursuant to which Titan agreed to dismantle the cranes and deliver them to Sunnyrex at Fairfield by the end of January 2008. Various amounts were paid into court, including the deposit of $9,500.00. Sunnyrex was at liberty to hire the 1993 crane, with Titan's consent, but not to sell it pending final resolution of the proceedings.

The return of the cranes in 2008 90. The 1993 crane was dismantled and returned to Sunnyrex on 26 January 2008. It was taken to the yard of Marr Contracting Pty Limited at Glebe, where it was inspected by Mikalauskas on 29 January 2008. He says a number of the components were damaged and other parts were missing, as listed in a letter dated 31 January 2008 sent by his solicitors to Titan's solicitors. Titan disputed the assertion and further correspondence ensued between the solicitors. As it turned out, certain parts had been left at the Delhi Road site and on 17 April 2008 Mikalauskas collected them.

The dismantling of the 1992 crane was delayed until 29 March 2008. During the dismantling of that crane at the Fairfield site, a further dispute arose when seized pins were unable to be removed. Titan wanted to cut through the plates to remove the pins, to avoid further cost and delay, but Mikalauskas would not agree. It was therefore agreed that Sunnyrex would take over responsibility for dismantling the crane. Mikalauskas hired C.R.A. Plant Pty Limited to dismantle the crane.

Mikalauskas says that a remote control system was missing from the 1992 crane, which he had to replace.

A significant proportion of the written submissions is devoted to the question of credit. For my part, I found most of these submissions partisan and unhelpful. Many were based on unimportant matters of inconsequential detail as to which the explanations were either obvious or explicable on the basis of fading memories with the passage of time, or ascribing conversations to the wrong day or wrong meeting. It has to be remembered that the participants in the disputed arrangements started out amicably and cooperatively, with a view to mutual profit, and the preponderance of their dealings were never reduced to writing or recorded in any notes or correspondence.

It was submitted for Sunnyrex, for example, that Lim and Mikalauskas gave their evidence "frankly, honestly and concisely, were not shaken in cross- examination, nor were any parts of their evidence demonstrated to be false or inaccurate. Such was not the case. Likewise, it was submitted for Titan and Atlas that its witnesses gave their evidence candidly and directly and there was no general or particular reason for concern as to their veracity. For my part, neither of the two main protagonists, Mikalauskas or Damon Hanlin, emerged unscathed from cross-examination.

Mr Lim, though, was totally unreliable. He was unsatisfactory in the witness box: evasive, uncomfortable and dissembling. As described in the written submissions, he often paused for a long moment before answering certain questions in an endeavour to craft an answer that advanced his version of the evidence. His evidence contradicted that of Mikalauskas as to some significant aspects of the Sunnyrex case. The broader evidence has shown Lim to be a shadowy character, devious, untrustworthy and deceitful. He manipulated Mikalauskas, worked behind his back, and played him off to the advantage of Lim's interest, not that of Sunnyrex. Absent any compelling corroborative material, I do not accept any of his evidence.

Mikalauskas was clearly naive commercially. He was inconsistent in his dealings with the Hanlins; his conduct was erratic and obsessive. As a witness, he was unconvincing. The totality of his presentation led me to the conviction that he had very little independent recollection of events and conversations, and that both his affidavits and his oral evidence were based on reconstruction from events and other objective material, such as his diary.

Damon Hanlin, on the other hand, impressed me as a witness working from genuine recollection. Various aspects of his evidence were skewed because he got the chronology of events out of order from time to time and he confused certain events, ascribing certain conversations to the wrong meetings, but overall he was in my view the more reliable historian. However, his persistence in dealing with Lim, to the exclusion of Mikalauskas, in particular his part in the agreement for sale involving Johnson Ngoi, reflected poorly on his commercial integrity, if not his credit.

In the result, I approached the veracity of the totality of the evidence sceptically, with caution and suspicion. However, where I was unable to resolve conflicts in the evidence by reference to the objective material or by an assessment of the inherent logic or probability of events, I preferred the evidence of the Hanlins.

The Sunnyrex claim for hire fees pursuant to the original hire agreements

The first substantive issue for determination is the agreed rate of rental for the initial hire of the cranes. Sunnyrex contends that the rate agreed was $1,100.00 per week plus GST. Titan contends that the rate agreed was $850.00 a week plus GST.

Sunnyrex says the rate was agreed during the meeting at Alexandria in early May 2006 and relies principally on the evidence of Lim and Mikalauskas. It also relies upon the failure of Hanlin to dispute the tax invoices issued by Sunnyrex on 19 December 2006, and his signature of the draft written hire agreement as amended by Lim, which contained the revised version of clause 28 in a form consistent with the Sunnyrex case.

The case now asserted by Sunnyrex is inconsistent with its pleading to the effect that the hire agreements were entered into on or about 18 March 2006 (1993 crane) and 20 April 2006 (1992 crane).

Titan says the hire agreement in respect of the 1993 crane was entered into at the meeting in early February 2006 between Hanlin, Phillips and Mikalauskas, when Mikalauskas agreed to a rate of $800.00 per week. This was varied to $850.00 at a meeting between Hanlin and Lim in February 2006. A similar agreement was subsequently entered into between Hanlin and Lim later in February 2006 in respect of the 1992 crane at a lunch at a noodle house in Lidcombe. Hanlin says the figure of $1,100.00 was not raised until the meeting on 20 April 2006, when Lim and Mikalauskas told him they were not happy with the $850.00 agreed, but Hanlin refused to increase the rate.

As I have already noted, the versions given by Lim and Mikalauskas are inconsistent. They are also improbable.

Findings and conclusions 104. It is improbable that Hanlin would negotiate a hire rate with the sub-hirers until he knew what it was going to cost him to hire the cranes from Sunnyrex. It is far more likely that he struck an agreement with Sunnyrex before the cranes were erected, and not afterwards as both Lim and Mikalauskas would have it. I accept the evidence of Phillips that he heard Mikalauskas say to Hanlin during erection of the 1992 crane at Fairfield:

MM "We're not happy with the rate and the maintenance costs. We want to renegotiate."

Lim and Mikalauskas then persisted in an attempt to get Hanlin to agree to an increase. This is consistent with the way Lim subsequently revised the draft written agreement as to clause 28, and left the rate of hire blank.

I am satisfied that Hanlin signed the draft agreement in that form, because it did not occur to him that Lim had altered it. It was only when Phillips drew it to his attention that he first noticed the change. It is clear that the document never reflected the agreement reached, either as to the maintenance and repair arrangements (Clause 28) or as to the rental rate (which was left blank).

For these reasons I find that the rental rate agreed for the initial hire of each of the cranes from Sunnyrex to Titan was $850.00 a week plus GST.

As to the 1992 crane, there is no dispute that the hire commenced on 20 April 2006. As to the 1993 crane, there is no dispute that the hire commenced on 18 March 2006. Nor is there any dispute that the 1993 crane was dismantled at the Newcastle site on 20 April 2007. That was a period of 57 weeks.

Sunnyrex pleads that the original hire agreements were "site specific" and were to continue only until termination of the sub-hire and removal of the relevant crane from the construction site on which it had been erected. Titan does not oppose this contention. It is clear, therefore, that the hire of the 1993 agreement ended on 20 April 2007.

The next set of contentious issues for resolution relates to the period after 20 April 2007. These disputes revolve around the storage of the 1993 crane at Tomago, the effect of the Sunnyrex letter of 20 May 2007 demanding an increase in hire rates, the Sunnyrex letters of 25 September 2007 purporting to terminate the hire agreements, and the subsequent purported purchase of the 1993 crane.

The amount to which Sunnyrex is entitled for hire fees for the 1993 up until 20 April 2007 and the 1992 crane to 25 September 2007 may, therefore, be calculated as follows:

1993 crane 18.03.06 - 20.04.07 = 57 weeks @ $850.00 = $ 48,450.00 1992 crane 20.04.06 - 25.09.07 = 74.8weeks @ $850.00 = $ 63,580.00 $112,030.00 GST $ 11,203.00 $123,233.00

The Sunnyrex claim in respect of the 1993 crane after 20.4.07

Sunnyrex seeks payment in respect of the 1993 crane beyond 20 April 2007, at increased rates, having regard firstly to its letter of 20 May 2007 purporting to vary the hire rate, and having regard secondly to its letter of termination dated 25 September 2007. It contends that Titan, by its conduct in retaining the 1993 crane "for its own purposes" after the crane was dismantled at the Newcastle site, and the conclusion of the sub-hire to Abigroup, is liable either for continuing hire fees or, alternatively, for damages for the wrongful detention of the crane.

Sunnyrex claims firstly that by its letter dated 20 May 2007, it demanded an increase in the hire rate for the 1993 crane to $3,000.00 per week plus GST to which Titan, by its conduct, agreed, such that Titan is liable for an amount of $3,000.00 per week plus GST from that date until the return of the 1993 crane on 26 January 2008.

Sunnyrex makes an alternative claim in damages based upon a reasonable hire rate for the crane at that period of time of $2,500.00 - $2,700.00 per week. It relies upon the evidence of Mr Marr and upon the fact that Titan was able to hire the crane to Baulderstone Hornibrook for $2,700.00 per week. On this alternative claim, Sunnyrex submits that Titan is liable for an amount of $2,700.00 per week plus GST from 20 April 2007 until the return of the 1993 crane on 26 January 2008.

By way of a further alternative to these claims, Sunnyrex submits that Titan is liable either for hire fees of $3,000.00 per week plus GST, or for damages at the rate of $2,700.00 per week, from 25 September 2007 on the basis that from that date Titan wrongfully retained the 1993 crane notwithstanding the letter of termination and the demand for the return of the crane.

Titan contends firstly that the claim for a revised hire rate in respect of the 1993 crane by reference to the Sunnyrex letter of 20 May 2007 is 'patently untenable and must fail'. It says that the claim as asserted does not correspond with the terms of that letter, nor does it correspond with the pleadings, where it is asserted that the agreement was varied after termination. Titan agrees that the original hire agreement of the 1993 concluded on 20 April 2007 when it was dismantled at the Newcastle site and removed to the storage site at Tomago. Titan submits that Sunnyrex, therefore, can place no reliance on the letter of 20 May 2007 to establish some fresh hire arrangement from that date at some increased rate of hire:

"An agreement once terminated is as dead as a parrot and cannot be varied and thereby resume life…"

Similarly, Titan submits that the purported termination of the hire agreement of the 1993 by the Sunnyrex letter dated 25 September 2007 was otiose, because the agreement had already concluded. It says that the only practical effect of that letter was to withdraw the Sunnyrex offer of re-hire contained in its letter of 20 May 2007.

As to the alternative claims Sunnyrex makes for damages from 20 April 2007, Titan submits that they are similarly unsustainable, because Titan was entitled to retain the crane pursuant to the lien claimed for unpaid invoices relating to the repair and restoration, and for maintenance costs during the period of hire. It also claims the cost of storage at Tomago from 20 April 2007 till 22 October 2007 (27 weeks).

Sunnyrex contends that there was no valid lien. It submits that Titan did not have continuous possession of the crane from the time the charges relating to it were incurred, namely during the period of storage at Annangrove, and only came into possession upon the commencement of the hire, namely when the Abigroup sub-hire commenced on 18 March 2006. Sunnyrex argues that for Titan to assert that it had possession during the period of storage is inconsistent with the contract it claims regarding the Sunnyrex occupation of the Annangrove site. Accordingly, Titan's possession did not commence until after the period of storage, as a consequence of the hire, not at common law for the purposes of the work performed.

Titan therefore disputes any liability to Titan in respect of the 1993 crane beyond 20 April 2007 when the Abigroup sub-hire ended. Its submission concludes:

"The only possible claim is for the period 17 December 2007 (when the 1993 crane was erected at Delhi Road) to 26 January 2008 (when it was dismantled and returned to Sunnyrex) for which period Titan will accept some liability at the rate as found as being agreed as between the parties (i.e. $850 or $1,100.00 per week)."

Findings and conclusions 121. Both parties agree that the hire of the 1993 crane concluded when the crane was dismantled at the Newcastle construction site at the end of the Abigroup sub-hire on 20 April 2007. It follows, logically, that the Sunnyrex letter of 20 May 2007 purporting to vary the rate of hire for that crane was of no effect. Likewise, the letter dated 25 September 2007 purporting to terminate the hire agreement in respect of that crane was indeed otiose.

122. The real issue is whether Titan was entitled to a lien over the crane from 24 April 2007. For reasons I will come to later, I am satisfied that Sunnyrex was indebted to Titan for repairs and restoration, maintenance and servicing, which justified the lien claimed. The Sunnyrex contention that there was no continuous possession such as to justify the lien is artificial. Titan had continuous possession of the 1993 crane from the time it was transported to the Annangrove site in 2006 until the time it was dismantled and returned to Sunnyrex on 26 January 2008.

123. I find, therefore, that Titan had the benefit of a valid lien over the 1993 crane from 20 April 2007 such that Sunnyrex has no claim in respect of it, either by way of hire or by way of damages, at least until it was erected at the Delhi Road site on 17 December 2007. The subsequent period of purported hire of the 1993 crane by Titan to Baulderstone Hornibrook is a different proposition, and I now come to that.

124. I come now to the issues arising for determination in connection with the purported sale of the 1993 crane by Sunnyrex to Titan, said to have been effected on the authority of the Sunnyrex director, Mr Johnson Ngoi.
125. The validity or otherwise of this purported sale is relevant not just to the substantive question of which party has title to the crane, but it also has implications in respect of whether it provided to Titan justification for hiring the crane to Baulderstone Hornibrook for use at the Delhi Road project.
126. The appropriate starting point is Titan's Amended Statement of Cross-Claim (at paragraphs 45 to 52) where it pleads the purchase agreement pursuant to which it claims a beneficial interest in the 1993 crane. It contends that the Contract of Sale signed by Ngoi was a binding and enforceable contract to purchase the 1993 crane from Sunnyrex for $190,000.00, but that Sunnyrex has failed to complete the sale, or, it has repudiated the agreement. Titan pleads that it accepts that repudiation and elects to rescind. Titan claims damages. The amount of any damages claimed is not specified, either in the pleading or in the written submissions. The Schedule at pages 28 - 29 of Titan's submissions in response is conspicuously silent as to this claim. In its Defence Sunnyrex says, amongst other things, that Titan knew Ngoi did not have the authority (actual or ostensible) of Sunnyrex to enter into the alleged sale, and that the sale agreement was never considered nor approved by the Board of Directors of Sunnyrex.
127. It is to be remembered that Ngoi was Lim's brother-in-law appointed as a director to protect Lim's interest in Sunnyrex. On 24 August 2005 Mikalauskas resolved to issue ten shares to Ngoi and appoint him as a director. Ngoi executed a consent to act as director and this was faxed to the registered office of Sunnyrex on or about 12 September 2005. It is equally true, however, that Ngoi, a resident of Singapore, was a front for Lim, and he never played any active role in the company either at a governance level or at an executive level.
128. Titan's case is that Ngoi had both actual and ostensible authority to sell the 1993 crane. It says in its written submissions (at paragraphs 320 - 323): "The evidence establishes that Sunnyrex was founded as a vehicle to facilitate the partnership of Joseph Lim and Mark Mikalauskas. Johnson Ngoi was appointed a director and made a shareholder by Mark Mikalauskas in or about August 2005. The position taken by Sunnyrex and Mark Mikalauskas is knowingly inconsistent with the facts concerning the establishment of Sunnyrex and the involvement of Messrs Lim and Ngoi. Moreover, as set out above, the matters relied on in the Defence are simply not made out on the evidence and cannot be sustained. As a matter of fact, it is clear from the evidence of Damon Hanlin that any re-use of the 1993 Crane was not an acceptance of the offer of 20 May 2007, which in any event had been withdrawn by the letters of September 2007, but was pursuant to the valid agreement for sale which was subsequently repudiated by Sunnyrex and terminated by Titan. In consequence, there can be no claim for weekly hire at the rate of $3,000 per week by reference to any alleged acceptance by re-use of the 1993 Crane pursuant to the offer proposed in the letter of 20 May 2007."

Reliance is placed on oral evidence given by Damon Hanlin. It was submitted that his evidence would satisfy me as to the genuine nature of the transaction, in particular a passage in cross-examination at T 688 - 695. My analysis of the totality of that passage is that it does not support the Titan case at all. Rather it is probative of the Sunnyrex position. It was put to Mr Hanlin that he deliberately went behind Mr Mikalauskas' back and negotiated secretly with Lim, and Ngoi was then employed to complete the formalities of the sale. He denied this, but in my view that is exactly what occurred. It is to be remembered that at this particular time, Mikalauskas had sent the letters of termination dated 25 September 2007, and Hanlin was in negotiation with Baulderstone Hornibrook for the hire of the crane in connection with the construction site at Delhi Road.

The following passage of evidence convinced me that Hanlin knew Ngoi did not have the required authority of the corporation to dispose of the crane:

"Q. Did you ever tell Mr Lim or Mr Ngoi that you couldn't deal with Mr Mikalauskas? A. Yes, on several occasions.

DRUMMOND Q. What did they say? A. What did they say? They said, "We have the same" - or Joseph Lim said that he had the same problems and he's sick and tired of Mark and he wants out, and he's made that very clear on a few occasions.

Q. I'm suggesting to you that-- A. I preferred to deal with Joseph on most business issues, to be perfectly honest. Mark was quite difficult to deal with. I leant towards dealing with Joseph Lim.

HIS HONOUR Q. Didn't that raise a question in your mind as to whether or not Mr Lim and Mr Johnson Ngoi could sell the crane? . A. I don't understand.

Q. Well, you knew the crane was owned by Sunnyrex. A. Well, your Honour, from the get go, like I said, there was always a claim that both Mark Mikalauskas and Joseph Lim each had their own crane and they distinguished which crane was theirs, and I was just under the assumption - yes, the company had the assets--

Q. --even though the company owned it, you assumed that there was separately owned-- A. Yeah, they were separately owned cranes--

Q. --by each of those two people to dispose of. A. Correct, yeah."

The Sunnyrex written submissions deal with the question of the validity of the purported sale, in detail, at paragraphs 109 - 142. I paraphrase the important aspects as follows: Titan cannot rely on the relevant provisions of the Corporations Act 2001(Cth) to establish due execution of the Contract of Sale on behalf of Sunnyrex. Nor does the common law presumption of regularity assist Titan, because the presumption is displaced if the circumstances are such that a reasonable person dealing with the company is "put on enquiry".

It was argued that there was an abundance of circumstances that put Hanlin on enquiry. He knew Lim and Mikalauskas had fallen out and were not communicating with each other. He had never previously met Ngoi, who had hitherto played no active role in any of the negotiations or the affairs of Sunnyrex. Special Conditions (1) and (2), which expressly confer on Titan the "exclusive use" of the 1993 crane between exchange and settlement, evidence the real purpose of the purported sale, namely the proposed hire to Baulderstone Hornibrook for the Delhi Road construction project. Titan knew, or had actual suspicion that Johnson Ngoi lacked the requisite authority to sell the 1993 crane, and that the execution of the Contract of Sale by him without notification to the other directors, in particular Mikalauskas, would be irregular.

Sunnyrex submits, therefore, that there was no binding or enforceable agreement.

Findings and conclusions 134. In its written submissions in response at paragraphs 144 - 153 Titan makes a final effort to justify the purported sale. In my view they lack substance. The circumstances surrounding the execution of this Contract of Sale were not only sufficient to put any reasonable person on enquiry, but in my view they also establish Hanlin had actual knowledge that Ngoi lacked the necessary authority of the corporation to enter into the contract.

Reference was made to Hanlin having relied on legal advice, but not only was that advice not produced, counsel also objected to evidence being led from Hanlin as to the nature of that advice. It is improbable that Mr Hanlin obtained legal advice on this issue. No competent solicitor would advise a client to enter into such an agreement in the circumstances that were prevailing without taking appropriate precautions to ensure that the director purporting to sign the sale agreement had appropriate authority to do so on the corporation's behalf.

I agree with the substance of the Sunnyrex submissions on this issue. I am comfortably satisfied that the purported sale was a clear device to sideline Mikalauskas with a view to making the crane available for hire to Baulderstone Hornibrook for the Delhi Road construction project. That Lim was not the owner of the crane was clearly known to Hanlin. That the 1993 crane was the property of the company, not Lim, was incontrovertible, and it reflects badly on the commercial integrity of Mr Hanlin to suggest otherwise. The haste with which the transaction was documented and executed belies the notion that it was legitimate.

I find that Johnson Ngoi had neither actual authority from Sunnyrex to sell the crane, nor did it clothe him with ostensible authority to do so. I find further that Hanlin knew he did not have the necessary authority and that the whole exercise was a ploy to avoid telling Mikalauskas the true position so as to obtain the crane for hire to Baulderstone Hornibrook for the Delhi Road construction project in the knowledge that Mikalauskas would not agree, or worse, would only agree on the basis of an increased rate of hire. I further find that there was no binding or enforceable agreement to sell the 1993 crane to Titan and that Sunnyrex retained and still retains legal title to the crane.

It follows that Titan had no authority to hire the 1993 crane to Baulderstone Hornibrook from 17 December 2007 to 26 January 2007, and to do so was a wrongful use of the crane by Titan, as to which Sunnyrex is entitled to damages.

The damages payable are in my view properly calculable by reference to the rent received by Titan, at the rate of $2,700.00 per week plus GST. Sunnyrex is therefore entitled to payment in respect of the 1993 crane on the following basis:

1993 crane 18.03.06 - 20.04.07 = 57 weeks @ $850.00 = $ 48,450.00 24.03.07 - 16.12.07 Nil 17.12.07 - 26.01.08 = 6 weeks @ $2,700.00 = $ 16,200.00 $ 64,650.00 GST $ 6,465.00 $ 71,115.00

The Sunnyrex claim in respect of the 1992 crane after 25.9.07

So far as the 1992 crane is concerned, having regard to its letter of termination dated 25 September 2007, Sunnyrex contends that Titan, by its conduct in retaining the 1992 crane "for its own purposes" from that date, is liable for damages for the wrongful detention of the crane, at a rate of $2,700.00 a week plus GST until recovery of the crane from the Fairfield site on 5 April 2008.

Titan's case is that the purported termination was invalid. It submits firstly that the amount claimed in the notice of breach letter dated 11 September 2007 was incorrect, nor did it make any allowance for the amounts due and payable to Titan for the work performed on the crane. Titan submits secondly that the time given to respond to or remedy the alleged breach of the hire agreement was inadequate, having regard to the amount involved.

Findings and conclusions 142. In my view, the Titan submissions have substance. So far as the period of notice is concerned, it was inadequate on any measure. It left Titan in no position to respond, either as to payment, as to which there were ongoing disputes as to whether Titan owed Sunnyrex anything at all, or to make other arrangements to satisfy its obligations under the sub-hire agreement to Chiha in respect of the Fairfield project. More fundamentally, however, having regard to both the disputed rate of rental and the claims by Titan in respect of the Sunnyrex indebtedness to it for repairs, restoration, maintenance and servicing, Sunnyrex was never in any position to allege a breach of the hire sufficient to justify termination. Having regard to the history of the oral negotiations, the conduct of the parties, and the unresolved disputes between them, it was never any part of their intention, objectively viewed, that Sunnyrex would be entitled to unilaterally terminate the hire agreement simply because Titan had not made any payments in respect of hire fees: Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61 at [68]. Titan never gave any indication it would not pay the hire fees it legitimately owed. All it ever said was that the relative indebtedness of Sunnyrex to Titan should be first worked out, to ascertain who owed what to whom. It could not have been said at that time, indeed at any time, that the Titan liability to Sunnyrex exceeded the Sunnyrex liability to Titan.

143. For these reasons I find that the purported termination by Sunnyrex of the hire agreement of the 1992 crane by its letter of 25 September 2007 was invalid and of no effect.

144. The Sunnyrex entitlement to hire fees in respect of the 1992 is therefore to be calculated at the rate of $850.00 plus GST for the whole of the period of the hire:

1992 crane 20.04.06 - 05.04.08 = 102 weeks @ $850.00 = $ 86,700.00 GST $ 8,670.00 $ 95,370.00

145. The total entitlement of Sunnyrex to hire fees for the two cranes may, therefore, be calculated at $166,485.00 ($71,115.00 in respect of the 1993 crane plus $95,370.00 in respect of the 1992 crane).

The additional Sunnyrex claims relating to the 1992 crane

146. Sunnyrex makes additional claims in respect of the 1992 crane, by way of what is described in its submissions as 'special damages". The first relates to the costs incurred in dismantling, transporting and unloading the 1992 crane at the conclusion of the hire in March and April 2008. The second additional claim relates to the replacement of the Autec remote control system that Mikalauskas says was missing when the crane was returned.

The claim for dismantling the 1992 crane 147. The first of these additional claims relates to costs incurred by Sunnyrex when the dispute arose at the end of March 2008 when Titan was dismantling the 1992 crane at the Fairfield site about the Titan proposal to cut through "cheek plates" in order to remove seized pins. It was therefore agreed that Sunnyrex would take over responsibility for dismantling the crane, on a without prejudice basis. It claims $33,055.00 for the cost involved, which is made up of amounts for electrical disconnection, dismantling by C.R.A. Plant Pty Ltd and removal of the pins.

148. Sunnyrex submits that Titan agreed to bear the costs incurred for transporting, erecting and dismantling the cranes in connection with the sub-hire agreements. It points to the written hire agreement (Exhibit P) and Hanlin's evidence as to the meeting in early February 2006 (see paragraph 50 above). That Sunnyrex relies on this conversation is interesting in itself, given that Mikalauskas and Lim both deny it occurred. This is an example of the criticism as to Sunnyrex 'cherrypicking' made by Titan in its submissions. Sunnyrex next submits that the costs it incurred were fair and reasonable and should be borne by Titan in accordance with their agreement.

149. The Titan defence to these claims is that the costs were incurred by Sunnyrex at the unreasonable insistence of Mikalauskas. Titan would have dismantled the crane but because Mikalauskas refused to agree to the cutting of the cheek plates, Sunnyrex took over and it should therefore bear the costs itself.

150. The parties approached the resolution of the issue on the basis that it should be determined having regard to the reasonableness or otherwise of the methodology proposed by Titan. This involved a consideration of the expert evidence led by each as to whether cutting though the cheek plates was appropriate or whether it would weaken the crane. Sunnyrex relied upon the evidence of Mr Marr. Titan relied upon the evidence of Dr Baigent.

The claim for the cost of the Autec remote control system 151. Mikalauskas says that the Autec remote control system was missing from the 1992 crane when it was dismantled. Sunnyrex claims $7,969.46 to replace the system.

152. Sunnyrex says the Autec system was with the crane when it was returned to Sunnyrex. It relies on the evidence of Damon Hanlin.

153. In his affidavit, Mikalauskas says the remote control system was removed from the crane cabin. But in cross-examination it became clear that it was not the receiver in the cabin that was missing, rather it was the manual sender.

Findings and conclusions 154. The first issue for determination is whether it would have been reasonable for Titan to cut though the plates to remove the seized pins. In my view it was not established that cutting through the cheek pins was an unreasonable methodology. To the extent that one expert's evidence should be accepted over the other, I preferred Dr Baigent's evidence as the more logical and reasoned approach, and he was clearly more expert than Mr Marr on that issue. At the end of the day, however, there simply wasn't any cogent evidence that cutting though the cheek plates and then re-welding the cut would have weakened the crane in any way or otherwise diminished its performance capacity.

I am satisfied that the objective intention of the parties was that Titan would bear all costs associated with the transport, erection and dismantling of the cranes in connection with the sub-hire agreements. Even if there were some doubt as to that, the Consent Orders entered into on 11 December 2007 make it clear. However, I am also satisfied that the agreement was mutually varied in respect of the 1992 crane when Mikalauskas took it upon Sunnyrex to carry out the dismantling and associated expenses at its own cost because he did not want Titan to cut through the cheek plates.

The Sunnyrex claim for the costs it incurred in dismantling, transporting and unloading the 1992 crane therefore fails.

Turning to the cost of replacing the Autec remote control system, the evidence of Mikalauskas was confused and unsatisfactory. The documentary evidence relied upon did little to support his claim, rather it added to the confusion, as the invoice involved does not refer to replacement of a sender unit. In the end I was not satisfied that if in fact the remote control system sending unit was indeed missing, that was a result of any conduct or fault on the part of Titan.

The Sunnyrex claim for the cost of replacing the Autec remote control system also fails.

The additional Sunnyrex claims relating to the 1993 crane

Sunnyrex makes additional claims in respect of the 1993 crane, by way of what is described in its submissions as 'special damages". The first relates to the costs incurred in transporting the crane from the Delhi Road site, and then unloading it. The second additional claim relates to parts and components it says were missing or damaged when the crane was returned.

The claim for transportation and unloading 160. The first of these additional claims relates to costs paid by Sunnyrex to transport the 1993 crane from Delhi Road to the Marr Contracting yard at Glebe, where it was unloaded. Sunnyrex submits that Titan agreed to bear the costs incurred for transporting, erecting and dismantling the cranes in connection with the sub-hire agreements. Mikalauskas says he paid an invoice from K & W Haulage for the transport for $7,150.00 and reimbursed Marrs in respect of an invoice from Melrose Cranes & Rigging Pty Ltd for $1,113.20 in respect of the unloading costs, a total of $8,263.20.

161. The Titan response to this additional claim is that Titan did not agree to be responsible for demobilising the 2003 crane.

Findings and conclusions 162. As with the 1992 crane, I am satisfied that the objective intention of the parties was that Titan would bear all costs associated with the transport, erection and dismantling of the 1993 crane in connection with the sub-hire. Even if there were some doubt as to that, the Consent Orders entered into on 11 December 2007 make it clear. Accordingly, Sunnyrex is entitled to reimbursement for the amounts incurred in transporting the crane from the Delhi Road site to the Marr Contracting yard at Glebe, which in my view were reasonable.

163. The Sunnyrex claim for transportation and unloading of the 1993 crane therefore succeeds in an amount of $8,263.20.

The claims for missing or damaged components 164. The second of the additional claims relating to the 1993 crane is for damaged and missing parts, totalling $45,376.29. (This total is wrong - see below.)

165. The allegation of missing parts was first raised in correspondence between the solicitors for the parties. By letter dated 31 January 2008 Michael Atkinson & Associates wrote to Constantine G Pavlis & Co listing the parts Sunnyrex claimed were missing. A reply dated 4 February 2008 set out the Titan position as to each item. By letter dated 5 February 2008 Michael Atkinson & Associates again wrote to Constantine G Pavlis & Co maintaining the Sunnyrex position, and making an additional claim as to damaged parts and components. It was asserted that Mikalauskas had taken photographs of the crane parts unloaded that "will clearly demonstrate that the parts were missing at the time they left the Baulderstone site". By letter dated 27 March 2008 Michael Atkinson & Associates wrote another letter indicating that they had been instructed that certain of the missing parts were still at the Delhi Road site and would be collected. By reply dated 28 March 2008 from Constantine G Pavlis & Co Titan agreed to the parts left at the Delhi Road site being collected. Mikalauskas collected these parts on 17 April 2008. Sunnyrex says, however, that not all the missing parts were recovered and the claim now made relates to those items.

166. Titan's position in respect of these items is that there were all accounted for. Alternatively, Titan says that if the court accepts the Sunnyrex claim as to any missing or damaged parts, Sunnyrex failed to adduce any admissible evidence as to their value or the cost of any necessary repairs.

167. The items involved, and the amount claimed for each, are:

(i) Pins $ 1,144.00 (ii) BPE or Computer Load System $ 18,305.00 (iii) Open wedge socket $ 269.50 (iv) Two tower sections $ 22,182.79 (v) Repair of beam lacings $ 1,815.00 (vi) Transportation of replacement parts $ 660.00 $44,376.29

(i) The claim for missing pins 168. Sunnyrex claims $1,144.00 for pins it alleges were missing. There is no definitive description of what exactly it is alleged was missing. The letter of 31 January refers to various pins and pin assemblies. Hanlin says:

(12) Pennant split pins are broken out and require to be replaced for each erection."

169. The Mikalauskas affidavits do not engage with this evidence from Hanlin, nor does he elucidate in his oral evidence. I am therefore left with the tax invoice of 25 June 2008 at Annexure BBB to Mikalauskas' affidavit of 4 July 2008 which talks of "20 OFF 30 DIA PINS @ $52.00 each" = $1,144.00 including GST.

170. Hanlin was asked about this invoice, and he said it refers to the split pins that are broken out and have to be replaced at each erection to comply with the Australian Standard. He said in relation to such pins:

"Q. Could you explain to the court what you had intended by that statement, and how that accords with your experience. A. I believe that I'm referring to the split pins used to retain any type of pin on the tower crane. What I'm saying there is that once the crane has been disassembled, those pins are normally split or broken or busted out as we call it, because they are no longer required for the next project. They must be replaced with new pins or a retaining system of some sort."

171. The evidence led for the plaintiff on this issue does not persuade me that Sunnyrex has suffered any loss in connection with any pins, missing or otherwise. The only evidence led as to any missing pins relates to split pins, as to which I find that they would require to be replaced at the next erection, in any event.

172. The Sunnyrex claim in respect of missing pins therefore fails.

(ii) The claim for the missing BPE or Computer Load System 173. Sunnyrex claims $18,305.00 for a BPE system it alleges was missing. Mikalauskas does not say when he first noticed the BPE system was missing. This item appears in the letter of 31 January 2008 at No 6. Hanlin denies the system was not returned. He says he inspected the crane on 18 September 2008 when photographs were taken that depicted a BPE on the cabin floor.

174. Sunnyrex relies upon an affidavit of Mr Kingi, a crane driver employed by Baulderstone Hornibrook, in which he says:

"On 26 January 2008 I attended the Baulderstone site at Delhi Road North Ryde in the course of my employment. I was present when representatives from Titan Cranes & Rigging Pty Limited were dismantling a Comedil 602 tower crane… I observed a representative from Titan truck cut the trolley rope when they were experiencing problems in getting it off. I also observed representatives from Titan remove the BPE computer screen from the cabin of the crane when it was on the ground. The computer screen was put to one side. I also observed representatives from Titan putting to one side various components of the crane including hand rails, nuts and bolts, a ladder and various pins."

175. Mr Kingi was cross-examined. He was shown the photos taken by Hanlin, and was able to identify a BPE system in the crane cabin (T 214): "Q. Mr Kingi, I'd just like you, if you could quickly, to look at the photographs starting at that page, and moving forward over the next nine pages. I want you to assume that Mr Damon Hanlon has given evidence that these are photographs of the BPE system in the cabin that he took on 18 September 2008 showing an Atlas sticker on the display unit, the serial number present but heavily worn, and he says that these distinguishing marks cause him to recognise that the BPE in this photograph is the original system supplied by Atlas. Could you just go through those photographs and tell me, on the basis of that assumption and those photographs, whether or not you adhere to the evidence that you gave in answer to the questions of my friend? A. It's just this photo here that's - like, the BPE that was in the crane when I was driving it didn't have this sticker there. I can't say whether this is it, if there's a sticker been put on it. But I just know that the one that I had when I was driving the crane didn't have that sticker on it." He then conceded that he did not know what happened to the BPE system after it was put aside on the ground on 26 January 2008, but that it was not one of the items left behind.
176. The Sunnyrex case rests on the evidence of Mr Kingi and the evidence of Mikalauskas that when he inspected the cabin, the BPE was not there. On the basis of this evidence, Sunnyrex submits that Hanlin's evidence regarding the presence of the BPE in the crane when the photographs were taken was "intentionally false" and designed to mislead the court. The precise allegation is not spelt out. Am I asked to infer that Hanlin took a BPE system with him to the inspection when he took the photos?
177. Hanlin deals with these issues in his affidavit of 1 October 2008 at paragraphs 19 and following: "I was present for the dismantling of the 1993 crane, with others from Titan including Daniel Phillips, and Joe Elias, an employee of Atlas…I deny that employees of Atlas cut the trolley rope as asserted. The trolley rope was removed, coiled it up and left it on a jib piece which left for transport…The trolley rope was left in as good a state as when the crane was erected…I visited the site where the crane is stored on 18 September 2008 and have seen the trolley rope. The rope was not cut short and it is still long enough to be used with the maximum jib length the crane can have which is 60m. Photographs were taken on 18 September 2008 which show the rope to be secured using tape to the jib section with the trolley drum attached as left when the crane was dismantled. The photos also show that the end of the trolley rope still has the original finishes. There is no sign of the rope being cut at the end of either rope…Titan did remove a computer screen from the crane when it was dismantled, which was the SMIE Anti Collision System. This was owned and used by Titan Cranes…The BPE system and the SMIE Anti Collision system have very similar physical appearance. On or about 18 September 2008, I went to the site where the crane is presently being kept. Joe Elias of Atlas was with me. I took photos showing the BPE system still in the cabin. These photos show an Atlas sticker on the display unit which is also marked with the model number. The serial number is also present but heavy (sic) worn. Due to these distinguishing marks I recognized the BPE to be that of the original system supplied by Atlas." Am I also asked to believe that Hanlin took a new trolley rope with him to the inspection when he took the photos? And that he then took the BPE system away again, so that the model number and serial number could not be checked? Am I asked to disregard the evidence of Mr Elias, who was present when the photos were taken, about which he was not cross-examined? In my view, that Hanlin would go to such elaborate lengths is extremely unlikely, and therefore improbable.

178. I prefer Hanlin's evidence to that of Kingi and Mikalauskas. I am satisfied that the evidence does not support the elaborate deception on the part of Hanlin for which Sunnyrex contends.

179. For these reasons, the Sunnyrex claim in respect of the BPE system fails.

(iii) The claim for a missing open wedge socket 180. Sunnyrex claims $269.50 for an open wedge socket it alleges was missing. This item does not appear in the letter of 31 January 2008. If this is a reference to item No 15, Hanlin says that item was returned. I could find no other evidence relating to this claim apart from a quote at Annexure "DDD" to the Mikalauskas affidavit of 4 July 2008. If there was any other evidence, my attention was not directed to it in the written submissions. The claim fails.

(iv) The claim for two missing tower sections 181. Sunnyrex claims $22,182.79 for two tower sections it alleges were missing from the 1993 crane when it was returned on 26 January 2008. These items appear in the letter of 31 January 2008 at No 2. Titan denied the claim and said all towers were returned. In response, Mikalauskas conceded that "the feet of the towers were returned" but that those feet had been modified.

182. The Sunnyrex case is that there were 20 towers, ten for each crane. Ten towers went to the Fairfield site with the 1992 crane, but only 7 went to Newcastle with the 1993 crane. Three towers were left at the Annangrove site. When the 1993 crane was dismantled at Delhi Road, 8 towers were returned to Sunnyrex, hence two were missing. Titan says there were only ever 7 towers for the 1993 crane (see the Hanlin affidavit of 1 October 2008 at paragraph 4). Hanlin says:

"The job at the Baulderstone Hornibrook site required eight (8) towers. All seven (7) towers of Sunnyrex were used and one (1) additional tower owned by Titan was provided…The eighth tower that was owned by Titan was taken away from the Baulderstone site by Sunnyrex. This tower has not been returned to Titan…All towers owned by Sunnyrex Pty Ltd in relation to the 1993 crane were returned to them when the crane was picked up from the Baulderstone Hornibrook site."

I do not recall any cross-examination of Hanlin on this issue. I was not directed to any in the written submissions. The Titan version went unchallenged and the Mikalauskas version went uncorroborated. I am satisfied that there were only ever 7 towers for the 1993 crane. I do not accept that Titan kept three, or even two, towers at the Annangrove site.

183. For these reasons, the Sunnyrex claim in respect of two towers alleged to have gone missing fails.

(v) The claim for repair of beam lacings 184. Sunnyrex claims $1,815.00 for the repair of "beam" lacings it alleges were damaged. This item does not appear in the letter of 31 January 2008, but arose subsequently. The claim in fact relates to the removal and replacement of boom lacings as to which Mikalauskas obtained a quote dated 1 September 2008 (Annexure B to his affidavit of 5 September 2008). He says after the 1993 crane was dismantled and transported to the yard at Glebe, he observed that the lacings were bent.

185. Hanlin says these lacings were always bent, from the time they were shipped from Singapore. This did not affect the operation of the crane and was not rectified during the Annangrove restoration.

186. There being no corroboration of the Mikalauskas version, I prefer the Hanlin version. This claim therefore fails.

(vi) The claim for transportation of replacement parts 187. Sunnyrex claims $660.00 for the transportation of replacement parts. This has nothing to do with the claim for missing parts after the return of the crane in 2008. Mikalauskas (at paragraph 59 of his affidavit of 4 July 2008) claims that in February 2006 Hanlin instructed him (an interesting turn of phrase in itself) to send components of the 1993 crane for painting in Abigroup colours. Mikalauskas caused Sunnyrex to raise an invoice a year later on 23 January 2007 (Annexure XX). How this amount is made up is not clear.

Hanlin denies the conversation alleged by Mikalauskas, and says that he wanted to do the painting at Annangrove, and it was Mikalauskas who insisted on sending the parts to a spray painter.

There being no corroboration of the Mikalauskas version, I prefer the Hanlin version. This claim therefore fails.

The Sunnyrex claims have succeeded to the following extent:

Hire fees for the 1992 crane $ 95,370.00 Hire fees for the 1993 crane $ 71,115.00 Additional claims in respect of the 1992 crane Nil Additional claims in respect of the 1993 crane $ 8,263.20 Total $174,748.20

I find the Sunnyrex claims against Titan have therefore been proved in a total amount of $174,748.20.

I was asked not to calculate interest, if any is to be awarded, until I had made my findings on the respective claims.

Titan claims a set-off in respect of the amount for which Sunnyrex has succeeded.

Costs of the Sunnyrex claim are deferred pending the assessment of interest and the outcome of the totality of the respective claims, including the set-off claimed.

I turn now to consider the Titan cross-claim and the set-off alleged, together with the cross-claims made by Atlas and Nicholas Hanlin Senior.

The cross-claim alleges that Titan and/or Nick Hanlin Snr entered into an agreement with Sunnyrex in October 2005 whereby the cranes were to be kept at the Annangrove site, of which Hanlin Snr was the registered proprietor, for $3,000.00 per month. The period of storage claimed is the 6 months from October 2005 to April 2006, a total of $18,000.00. An alternative claim is made on the basis of unjust enrichment. Titan relies on the evidence of Damon Hanlin and Nicholas Hanlin Snr. The claim was refined in the written submissions to the following:

"Titan (through Damon Hanlin) was given permission by the proprietors (through Hanlin Snr) to use a portion of the land for the express purpose of making an agreement with Sunnyrex for the storage of its cranes. Titan thereby obtained the capacity to make a binding and enforceable agreement with Sunnyrex, and did so by the discussions the subject of the evidence."

The only facts not in dispute are that the cranes were transported to the Annangrove site during October 2005 and remained there until each of them was taken to the respective construction sites at Newcastle and Fairfield, pursuant to the sub-hires, in March and April 2006. On 30 October 2006 Nicholas Hanlin Snr issued a tax invoice to Titan, and Titan in turn issued a tax invoice to Sunnyrex dated 31 December 2006 (Exhibit S, Tab 3, pages 1 and 10).

Sunnyrex says the only arrangement as to storage at Annangrove was that there would be no charge, the consideration for which was that Sunnyrex would repair the access road. It relies on the evidence of Lim, Mikalauskas and Mr Steven Horn, and submits this evidence is to be preferred over that of the Hanlins.

Mr Horn says he had offered to allow Sunnyrex to use his premises at Shanes Park to store the cranes, at $100.00 a week. He was not challenged on this evidence. It was submitted that for Sunnyrex to enter into an agreement for more than $700.00 a week with someone else does not make commercial sense.

Sunnyrex complains also that the pleading in the cross-claim is objectionable in that it alleges an agreement between "Titan and/or Nicholas Hanlin Snr". It submits that the pleading should be struck out as the factual circumstances do not make it clear whether each alternative or both are being pursued. The problem is compounded by virtue of the fact that the Annangrove property was not owned by Hanlin Snr, but was jointly owned by him with Damon Hanlin and Bronwen Hanlin. Sunnyrex submits that the claim is incompetent because the joint proprietors were not joined, nor have they ratified the claim. In the absence of a proper pleading, Titan should not be allowed to assert an agreement entered into by Hanlin Snr with Titan as his agent. Sunnyrex also submits:

"At no time has Titan alleged nor led any evidence to suggest that Titan occupied the Annangrove site pursuant to an agreement with the registered proprietors sufficient to grant Sunnyrex a licence to occupy part of the Annangrove site."

Sunnyrex contends that the only agreement was one between Hanlin Snr and Titan. Despite the passage of some 2 years, he has taken no steps to recover payment from Titan. I am asked to infer that Hanlin Snr was asked to issue his invoice to enable Titan to issue its invoice, to create a liability that Sunnyrex never agreed to.

Findings and conclusions 202. There is some force in the proposition that if Horn's evidence is to be accepted, there is an air of commercial unreality about Mikalauskas agreeing to a higher payment to Atlas. On the other hand, it can be argued that it made even less commercial sense for Hanlin Snr to offer his premises for free, or for Titan to absorb the fees Hanlin Snr wanted. It is also to be remembered that the discussions took place when the protagonists were on friendly terms and there was no animosity between them. It was in the interests of Sunnyrex to use the Hanlin premises, as it was that family that was going to restore the cranes and find jobs for the cranes, something Mikalauskas and Lim were patently unable to do without help.

In my view, the storage issue falls to be determined according to whether the Titan version of the discussions is to be preferred to the Sunnyrex version. Which brings me to the access road. The evidence of Mikalauskas on this issue is not credible. It is not corroborated by any witness: Damon Hanlin, Hanlin Snr, Nick Hanlin Jnr, or Phillips. Lim is silent on the issue. Mikalauskas' version also runs contrary to other evidence about the installation of a concrete slab of dimensions confirmed in his own diary (Exhibit 8).

I am satisfied that an access road already existed at the Annangrove site and that all Sunnyrex did was install a concrete slab. I find that there was no agreement pursuant to which the Sunnyrex cranes were to be housed at the site, during their repair and restoration, in exchange for the construction of an access road. For these reasons I prefer the Titan version of the events and discussions relating to this issue to that of Mikalauskas and Lim.

The invoices confirm that there were two separate agreements: the first was between the proprietors of the property, concluded on their behalf by Hanlin Snr, with Titan, concluded on its behalf by Damon Hanlin, on the basis that Hanlin Snr would bill Titan, and it was for Titan to recover the cost from Sunnyrex. The second agreement was between Titan and Sunnyrex, concluded on the one part by Damon Hanlin and on the other part by Mikalauskas.

I find as follows: In a meeting on 27 September 2005 at the Titan office at Alexandria, Hanlin told Mikalauskas that if Titan was going to work on the cranes he might be able to ask his father to store them at his place at Annangrove. He said his father would charge, but it would be a good market rate. Hanlin then spoke to his father in early October who agreed the Annangrove property could be used. Hanlin asked him what sort of rent he wanted and what he wanted for the use of the facilities. Hanlin Snr said he wanted reimbursement for all the facilities like power and gas and $3,000 a month for the rent. Hanlin then had a meeting with Lim and Mikalauskas at Annangrove in October 2005 when he said:

"We will grant you a specific area on the site of approximately 1000 square metres and it will be at a good rate which will be below market rent. You can have the area behind the shed and to the left of the back road. My father has agreed to let that land. However, we will need to construct a concrete slab to reduce the wear on the ground from the machine."

He then told them his father wanted $3,000.00 a month, but that there was to be no use of the workshop or electricity. Lim and Mikalauskas agreed to these arrangements.

It is irrelevant that Hanlin Snr or the proprietors have not been paid. It is sufficient that the liability exists. Nor do I see anything sinister in the raising of invoices by Hanlin Snr and Titan in late 2006. It was clear that the relationship between the protagonists had deteriorated, and it was not inappropriate for them to start putting their respective houses in order.

I am satisfied that the intention of all those involved, objectively viewed, was to enter into contractual arrangements whereby Titan was to be charged $3,000.00 per month for the space to be occupied in connection with the repair and restoration of the cranes by Titan, and that Sunnyrex would reimburse Titan in the same amount.

I agree that the pleading is infelicitous, but the claim in the alternative was clarified by the evidence, and established, and I am not persuaded that any problem with the pleading should be used to defeat the claim.

The Titan claim for storage therefore succeeds in the amount of $18,000.00.

The claims for the use by Sunnyrex of facilities and utilities at Annangrove

The cross-claim further alleges that Titan and/or Nick Hanlin Snr entered into agreements with Sunnyrex in October 2005 whereby Sunnyrex could use various facilities and utilities at the Annangrove premises, being the workshop, gas and power, and a Merlo forklift, for which Sunnyrex would make payment. An alternative claim is made on the basis of unjust enrichment. Titan relies on the evidence of Damon Hanlin and Nicholas Hanlin Snr. The particulars of the agreements alleged are:

"(a) A conversation in or about October 2005 between Nick Hanlin Snr and Mark Mikalauskas during which Nick Hanlin Snr agreed to allow Sunnyrex to use the workshop and power at the premises and Mark Mikalauskas agreed Sunnyrex would pay Nick Hanlin Snr for such use.

(b) A conversation in or about October 2005 between Nick Hanlin Snr and Joseph Lim during which Joseph Lim acknowledged Sunnyrex used gas at the premises and agreed Sunnyrex would pay Nick Hanlin Snr for such use.

(c) A conversation in or about October 2005 between Damon Hanlin and Mark Mikalauskas during which Damon Hanlin agreed to allow Sunnyrex to use Titan's Merlo forklift and Mark Mikalauskas agreed Sunnyrex would pay Titan for such use."

In the written submissions it was asserted that the conversation particularised in (b) occurred in February 2006 or later when Hanlin Snr spoke to Lim:

H Snr "Joseph, someone's used my gas account. Do you know about that?"

The claim is for $32,043.00 calculated as follows:

(i) Use of gas $ 803.00 (ii) Use of power $ 1,100.00 (iii) Use of the workshop $ 1,100.00 (iv) Use of the Merlo forklift $ 29,040.00 $32,043.00

(i) - (iii) The claims for the use of gas, electricity and the workshop 213. Hanlin Snr claims a total of $3,003.00 for the use by Sunnyrex of gas, power and electricity at the Annangrove site. Alternatively, Titan makes the claim. Mikalauskas agrees that he did have a conversation with Hanlin Snr about reimbursement for use of the workshop and power, but that this occurred in January 2006. Titan says there was no evidence to establish the cost of the power used or a reasonable rate for use of the workshop, such that the quantum of the claim was not proved. As to the claim for the use of gas, there was no discussion about gas, and Mikalauskas says Sunnyrex paid for the re-gassing of the oxy-acetylene tanks and argon used by the MIG welder.

214. In my view, it was never the intention of the parties, objectively viewed, that there was to be a direct contract between Sunnyrex and Hanlin Snr. This was made clear in the conversation in October 2005 when Hanlin Snr told Damon Hanlin he wanted reimbursement for all facilities like power and gas, and Damon Hanlin said:

DH "That should be okay. Leave it with me. If this happens, bill Titan and I will work it out with Mark and Joseph." 215. There is no evidence of a claim for the use of gas, electricity or the workshop either by Hanlin Snr on Titan, or by Titan on Sunnyrex. Titan never did bill Sunnyrex for these amounts. I agree also with the Sunnyrex submission that the rate of any charge for the workshop was never established, nor was the amount of electricity consumed ever established. The evidence as to the gas claimed was confused to the point where I could not be satisfied that reimbursement for any gas Sunnyrex had used had not been made. 216. I am not satisfied that there was any unjust enrichment. It is equally possible that Titan simply decided not to bill, and to absorb the cost as part of its own overhead for the repair and restoration for the cranes. 217. The claims for the use of gas, electricity and the workshop therefore fail. (iv) The claim for the use of the Merlo forklift 218. Titan claims $29,040.00 for the use by Sunnyrex of its Merlo forklift at a monthly rate of $6,600.00 for 4 months, being $26,400.00 plus GST. Hanlin says that Titan bought a second-hand Merlo forklift in October 2005 that was not working properly. He had a conversation with Mikalauskas as follows: DH "Mark, if you can get the Merlo working you can use it here. It will be cheaper for you than to rent someone else's. I'll work out some sort of deal for you" MM "Okay." According to Hanlin, Mikalauskas fixed the Merlo and then used it for 6 months. 219. Mikalauskas denies any such conversation and says there was no arrangement entered into for Sunnyrex to pay hire fees in respect of the Merlo forklift. He says that he repaired the Merlo at Annangrove in early November 2005 and then used it at the site for some 5 months. 220. Mikalauskas says that Phillips telephoned him in October 2005 and offered Sunnyrex free use of the Merlo provided that he repaired it and that he then travelled to Canberra where he met with Phillips and inspected the Merlo. After inspection, he discovered that the Merlo had a "sheared drive coupling and water in the hydraulic oil". He then arranged to transport the Merlo to the Annangrove site on 3 November 2005. 221. Phillips denies these events and says he never agreed with Mikalauskas that Sunnyrex could use the Merlo free of charge. Further more, he denies Mikalauskas repaired the Merlo, and that he himself repaired it, prior to Mikalauskas even coming to Canberra. He agreed Sunnyrex paid for the transportation of the Merlo from Canberra to Annangrove, but that was because it was going to hire it. 222. The evidence of Phillips as to repair of the Merlo is at odds with that given by Hanlin to the effect that Mikalauskas did the repair. Titan submits that this is explicable on the basis that the person with the close knowledge of what occurred is Phillips, and that his evidence should be preferred to that of Mikalauskas. 223. Sunnyrex attacks the credit of Phillips. Examples of discrepancies in his evidence were proffered that on my view of the totality of the evidence do not reflect adversely on his credit. His evidence was described as vague and lacking cogency. I disagree. It was submitted that I should prefer the evidence of Lim to Phillips. I have already given my views about Lim. It was then suggested I should prefer the evidence of Mikalauskas to Phillips. I have also given my views about the credit of Mikalauskas. 224. I prefer to determine the issue of the Merlo hire on the basis of commercial probability rather than on credit. In this instance, it makes no commercial sense for Titan to trade off hire fees for the cost of repairs that it was common ground were a few thousand dollars. I therefore prefer the Titan version to that of Mikalauskas. The difficulty with the Titan claim is, however, that there is no evidence of any agreement as to the rate of hire. Phillips did not do the deal, and all Hanlin said was that he would work something out. There is no evidence that he ever did. Nor did Titan lead any evidence as to what a reasonable market rate was at that time for the hire of a forklift. The best evidence of this comes from the quote at Annexure N to the Mikalauskas affidavit of 13 August 2008 that a monthly rate was in the order of $3,000.00, not the $6,600.00 claimed. 225. Sunnyrex submits that at best all Titan has proved is an agreement to agree on the rate, which also defeats the unjust enrichment claim. In my view, Titan did not even establish that. 226. I consider the failure of Titan to agree a rate of hire is indeed fatal to its claim. This is not a quantum meruit situation. As with the claim for use of the other facilities, I am not satisfied that any unjust enrichment occurred, and it is equally possible that Titan simply decided not to bill, and to absorb the cost as part of its own overhead for the repair and restoration for the cranes. 227. The claim for the hire of the Merlo forklift therefore fails.

The claim for restoration of the cranes at the Annangrove site

Titan and Atlas claim for the costs of restoration of the cranes at Annangrove from their arrival in October 2005 through to March/April 2006 when the cranes were hired by Titan and sub-hired to the respective construction sites. The cross-claim alleges firstly that Titan and Sunnyrex entered into an oral agreement in October 2005 whereby Titan was to undertake works required for the repair and restoration of the two cranes to a standard and condition to enable them to be operated on construction sites. The cross-claim alleges secondly that Atlas and Sunnyrex entered into an oral agreement in November 2005 whereby Atlas was to undertake works required for the repair and restoration of the two cranes to a standard and condition to enable them to be operated on construction sites.

It is alleged that it was a term of both agreements that the rates for the work to be done would be:

Employee labour - $60 per hour Parts - Cost plus 10% Other labour - Cost plus 10%

Titan contends that its agreement with Sunnyrex was entered into by Damon Hanlin with Mikalauskas in the conversation at Annangrove in October 2005 (see paragraph 33 above), following which Titan commenced work on the cranes that continued through to March/April 2006 when the cranes were hired by Titan and sub-hired to the respective construction sites.

Atlas contends that its agreement with Sunnyrex was entered into by Damon Hanlin with Mikalauskas and Lim in the conversation at Annangrove in November 2005 (see paragraph 39 above), following which Atlas commenced work on the cranes that continued through to March/April 2006 when the cranes were hired by Titan and sub-hired to the respective construction sites.

Titan and Atlas contend that these agreements were orally confirmed and extended by Damon Hanlin with Mikalauskas and Lim in the conversation at Annangrove in late January or early February 2006 (see paragraph 40 above).

Sunnyrex denies the agreement alleged by Titan. It pleads that Titan never undertook any repair or restoration work on the cranes in the period between October 2005 and March/April 2006. It contends that the only agreement with Titan for any work on the cranes was part of the hire agreement and related to the maintenance, servicing and repair of the cranes during the course of the hire and sub-hires. Sunnyrex admits that it owes Titan certain amounts in respect of various parts supplied, but that any other costs claimed were incurred by Titan as part of the hire agreement, as to which Sunnyrex contends Titan agreed it would bear the cost of all repairs, servicing and maintenance for the term of the hire. Accordingly, these costs should be borne by Titan. Sunnyrex relies upon the evidence of Lim and clause 28 "Maintenance and Repair" of the draft written hire agreement entitled "Sunnyrex Pty Ltd Plant & Equipment Hire Agreement", as amended by Lim (see above at paragraphs 55 and 58 - 60).

Sunnyrex also denies the agreement alleged by Atlas. It pleads that Titan never undertook any repair or restoration work on the cranes in the period between October 2005 and December 2005. It contends that there were different contractual arrangements than those alleged by Atlas, such that Sunnyrex and Atlas first entered into an oral agreement on 27 September 2005 pursuant to which Atlas was to supply certain parts required for the cranes "at cost". Then, in January 2006 they entered into a further oral agreement pursuant to which Atlas was to undertake certain electrical works on the cranes and the inspection of certain electrical components, at a rate of $60.00 per hour. Sunnyrex says that any work performed on the cranes by Atlas was carried out pursuant to these agreements, and was only performed between January and April 2006.

Titan and Atlas say the evidence clearly establishes that they carried out work from October 2005 on, and rely on evidence from the persons who performed the work, the evidence of Sherlock who supervised the work, the primary invoices, and other records such as the office diary and site reports. They also say that the evidence establishes that the agreements for this work were separate and distinct from the hire agreement, and were entered into well before the negotiations for the hire agreement even commenced in February 2006.

It was clear that the cranes were in a poor condition when they arrived from Singapore. Only Lim appears to suggest otherwise. Damon Hanlin estimated the cost of restoration at about $150,000 for each crane. Mikalauskas agrees the cranes were in poor condition, but denies the problem was as extensive as the Hanlins say. Nick Hanlin Jnr gives evidence that supports the extent of the restoration required. He says that at a meeting at Annangrove in October 2005 the following conversation took place:

MM "I cannot believe the condition of these cranes. These cranes are f***ed."

H Jnr "These cranes will require an extensive amount of work to bring them up to a safe standard. All motors need to be removed, stripped and repaired. The hoist rope from the crane needs to be replaced. The computer inside the cabin needs to be replaced. The joysticks need to be replaced. The general condition of the switch-board is very poor and will require a major overhaul. The wiring in the slew area is a massive mess and needs to be stripped and installed new. Air- conditioning needs to be installed. All the gearboxes need to be split. Major works to the slewing need to be undertaken, and a slipring needs to be installed."

MM "Yes, I can see that. I want this crane to be in immaculate condition. I do not want any problems with it. How much is the slipring going to cost?"

H Jnr "Probably between $5,000 and $6,000. The cabin needs complete refurbishment for about $8,000 to $10,000. The hoist needs to be done, probably $25,000. All up it will be in the vicinity of $100,000 for each crane."

MM "I want these in immaculate condition. I want 10 years out of them at least. I am going to completely rebuild the slew ring, the hoist gear box and the trod gear box. The ring will be stripped and rebuilt."

To my mind, the discrepancy between the evidence of Damon Hanlin and Nick Hanlin Jnr as to the estimate of the total cost of restoration belies the notion of fabrication. That the cranes were very deteriorated was also corroborated by Phillips.

Phillips was also present at the meeting in October 2005 when Nick Hanlin gave Mikalauskas his estimate for restoration of the cranes. He recalls the following conversation:

DH "These cranes are in poor condition and a lot of work will be needed to bring them up to Australian standard. The cost could be more than $150,000 per crane. We want to start by charging you $60 per hour and 10 percent on parts."

There cannot be much doubt that the cranes required major restoration work and the attempts by Mikalauskas to downplay the extent of the work required are unconvincing.

The Hanlin version as to the work done and when it was done is corroborated by the records, in particular the administration diary in which employees of Titan and Atlas recorded their hours on jobs. A lot of evidence was devoted to the diary system, much of which arose from the Sunnyrex attempt to discredit it. In simple terms, it was an administrative method for recording time spent by employees on various jobs, from which tax invoices could be prepared to enable clients to be billed. Time was recorded in the system by clerical staff from site reports, time sheets or from phone calls from the employees concerned reporting in, particularly on long jobs.

Findings and conclusions 240. While the diary system may not have been perfect, it was adequate, and in my view this, together with the evidence of those involved in the work, establishes that work did commence on the cranes in October and continued through to March and April of 2006. That the work commenced in October 2005 further corroborates the Hanlin version of the agreements as to restoration of the cranes.

I prefer the evidence of the Hanlins and Phillips to that of Mikalauskas and Lim on this issue. I am satisfied that in October 2005 there were conversations at the Annangrove site in which the Hanlins told Mikalauskas that the reconditioning and restoration of the cranes would require considerable work and parts, in the order of $100,000 or $150,000 for each crane; that pursuant to an agreement then entered into Titan commenced the required work; and that Atlas also became involved within a month, pursuant to a similar agreement, and Atlas likewise started to work on the cranes.

I find as follows: In a meeting in October 2005 at the Annangrove site Damon Hanlin on behalf of Titan offered Sunnyrex the restoration work required to put the cranes in an operable condition at the rate of $60 an hour for labour and parts at cost or cost plus 10%, and that Mikalauskas accepted the offer on behalf of Sunnyrex. In a subsequent meeting at Annangrove in November 2005 Hanlin on behalf of Atlas offered Sunnyrex its participation in the restoration work at the same rates and that Mikalauskas and Lim accepted the offer on behalf of Sunnyrex. These agreements were confirmed and extended at a meeting in January or February 2006 when Hanlin told Mikalauskas that extra labour was required, and Mikalauskas agreed.

The claim for the maintenance, service and repair of the cranes during the hire

Titan and Atlas claim for the costs of maintenance, service and repair work carried out by them on the cranes during the period they were hired by Titan and sub-hired to the respective construction sites. The cross-claim alleges that in or about February 2006 Titan and Atlas entered into oral agreements with Sunnyrex whereby Titan and Atlas were to undertake or arrange for the repair of problems, faults and breakdowns of the cranes during the hire period, on the basis that Sunnyrex would pay or reimburse Titan and Atlas for the cost at the following rates:

Employee labour - $70 per hour Parts - Cost plus 10% Other labour - Cost plus 10%

Titan and Atlas contend that these agreements with Sunnyrex were entered into by Damon Hanlin with Lim in late January or early February 2006, as part of the conversations relating to the negotiation of the hire agreement between Titan and Sunnyrex.

Titan and Atlas make an alternative claim for these costs on the basis of unjust enrichment.

Sunnyrex denies these alleged agreements and pleads that it was a term of the hire agreement between Titan and Sunnyrex that during the hire of the cranes:

(a) Sunnyrex would pay 50% of the cost of each and every item or part to be replaced if and only if the cost of that item or part exceeded $1,500.00;

(b) Titan would pay 50% of the cost of each and every item or part to be replaced if and only if the cost of that item or part exceeded $1,500.00;

(c) Titan would pay the total cost of each item or part if the cost of that item or part was less than $1,500;

(d) Titan would pay all other costs (e.g. labour, transport) associated or in relation to the replacement of that item or part; and

(e) Titan would be responsible for all costs incurred in the maintenance of the cranes.

Sunnyrex contends that this agreement was entered into in May 2006 at a meeting between Lim, Mikalauskas and Hanlin at Alexandria, and relies on clause 28 "Maintenance and Repair" of the draft written hire agreement entitled "Sunnyrex Pty Ltd Plant & Equipment Hire Agreement", as amended by Lim (see above at paragraphs 55 and 58 - 60).

Hanlin says that the question of maintenance costs was first discussed in the meeting in early February 2006 during which Phillips told Mikalauskas that Titan would not be responsible for maintenance costs (see paragraph 50 above).

Hanlin says that the costs of repairing breakdowns and faults was not discussed at that meeting but was discussed a couple of days later with Lim:

DH "Anything that goes wrong with the cranes when they are out, you as the owner will be responsible for our costs. That's standard industry practice."

Findings and conclusions 250. As to the agreement alleged by Sunnyrex, I have already dealt with the Sunnyrex version of the negotiations surrounding the hire agreement, the conversations alleged by Lim and Mikalauskas at the Alexandria meeting in early May 2006, and the amendments made by Lim to clause 28 of the draft written hire agreement. For the same reasons, I am satisfied that these conversations and events were merely attempts by Lim and Mikalauskas to re-negotiate the agreement already reached between Titan and Sunnyrex as to the hire and the way in which the costs associated with maintenance, servicing and repair were to be borne. For these reasons I reject the Sunnyrex contentions and find that there was no agreement in the form it alleges.

251. For reasons already expressed I do not accept the evidence of Lim, and I prefer the evidence of the Hanlins to that of Mikalauskas. For these reasons I am satisfied that the agreement between Sunnyrex and Titan in respect of maintenance, service and repair of the cranes during the period of hire was as Titan contends.

252. I am satisfied that the intention of all those involved, objectively viewed, was to enter into contractual arrangements whereby Sunnyrex was to bear all costs of maintenance and repair of the cranes during the hire, for which it would reimburse Titan and Atlas for any parts supplied and for work performed by them at their standard rates.

The Titan claim for the cost of storage of the 1993 crane at the Tomago site

253. Titan claims for the amount it is liable to pay for the storage of the 1993 crane at Tomago between 20 April 2007 and 22 October 2007. The cross-claim alleges that Titan and Sunnyrex entered into an agreement whereby the crane was to be stored by Titan following the conclusion of the Newcastle job and that Sunnyrex would reimburse Titan for the cost. Titan says the cost of storage is $7,425.00 for which it is liable, and seeks reimbursement from Sunnyrex pursuant to the agreement alleged. Alternatively, Titan pleads that the storage arrangements were made for the benefit of Sunnyrex and makes a claim on the basis of unjust enrichment.

"Titan relies on the evidence of Damon Hanlin, and in particular the conversation with Joseph Lim set out at paragraph 48 of his affidavit sworn 15 July 2008. By this conversation, Damon Hanlin made it clear that he was claiming a lien over the 1993 crane and that he would charge Sunnyrex for the cost of storage until the debts the subject of the lien were satisfied. His evidence was that this was accepted by Joseph Lim (T 610 - 611; 618 - 619)."

Findings and conclusions 255. I am not satisfied that what Lim said to Hanlin in April 2007 (see paragraph 74 above) amounted to an agreement that the cranes should be stored and the cost charged to Sunnyrex. At most, Lim was acknowledging that Hanlin was claiming a lien until the net indebtedness of Sunnyrex to Titan was sorted out. But in any event, for the reasons already given, Lim did not at that time have the authority, actual or ostensible, to bind Sunnyrex to such an agreement

256. For these reasons the Titan claim for storage at Tomago fails.

Quantification of the claims for restoration and maintenance of the cranes

257. I have now dealt with and determined the claims upon which Titan and Atlas are entitled to succeed. I turn to consider the quantum of those claims. As foreshadowed, Sunnyrex disputes the various invoices relied on by Titan and Atlas.

258. The claims by Titan and Atlas are articulated in the Schedule at page 29 of the cross-claimants' written submissions in response. There are two further invoices referred to in the written submissions that do not appear in that Schedule. These are Invoice 417 and Invoice 12573. I will assume these were overlooked.

259. As to Invoice 417, this is a Titan invoice that relates to works performed in September and October 2007 in readying the 1993 crane for erection at the Delhi Road site in anticipation of the hire to Baulderstone Hornibrook. For the reasons I have given concerning the purported purchase of the 1993 crane by Titan and the absence of any authority to hire the crane to Baulderstone Hornibrook, any claim based on Invoice 417 must fail in any event.

Labour for restoration of the cranes - Invoice 214 $62,810.00 Labour for restoration of the cranes - Invoice 599 $ 9,985.56 Parts for restoration - Invoice 121 $12,918.97 Total restoration claim $85,714.53 $ 85,714.53

Labour and parts during hire - Invoice 121 $15,429.60 Labour and parts during hire - Invoice 12573 $ 2,274.45 Total maintenance claim $17,704.05 $ 17,704.05 Total claim by Titan $103,418.58

Labour for restoration of the cranes - Invoice 20245 $12,003.75 Labour for restoration of the cranes - Invoice 20246 $ 9,146.50 Parts for restoration - Invoice11711 (V2) $13,141.65 Parts for restoration - Invoice 12398 (V2) $21,591.75 Total claim by Atlas $55,883.65 $55,883.65

261. The Titan claim based on Invoice 214 is for $57,100 plus GST of $5,710.00, a total of $62,810.00. This is claimed as part of the costs relating to the work done pursuant to the agreement for restoration of the cranes prior to the hire.

Labour charge till April 2006 for Nicholas Hanlin and Damon Hanlin - Total hours 238.5 @ $70 per hour = $16,695.00 Charged at $60 per hour $14,310.00 Merlo hire $26,400.00 Misc Engineering required by Hanlin Engineering $ 8,800.00 Miscellaneous charges: Manual 602 $180 Tarpolan (sic)for shelter $ 60 Water usage (Annangrove) $200 Replacement hose $110 Fuel $120 Total $ 670.00 Labour charges for work performed by Daniel Phillips 2 hours chasing up and organising delivery, prices for hoist rope change over at Fairfield 4 hours at Annangrove yard moving booms 22 hours organising paperwork and documentation not supplied by Sunnyrex as per Australian STD 2 hours consultation on base feet pad weld design Total hours 32 @ 70 = $2,240 Charged at $ 1,920.00 Downtime charge - As a result of rope repairs @ $5000 for one week $ 5,000.00 Sub-total $57,100.00 GST $ 5,710.00 Total $62,810.00

Hire fees for the Merlo forklift 263. Included in Invoice 214 is a charge for the hire of the Merlo forklift. It is immediately obvious that this claim has been double counted (see the Schedule at page 29 of the cross-claimants' written submissions in response). In any event, I have disallowed the claim for hire of the Merlo forklift.

Miscellaneous charges 264. Also claimed as part of Invoice 214 are miscellaneous charges for a manual, a tarpaulin, water usage, a replacement hose, and fuel. Sunnyrex objects to these items on the basis that they are not supported by invoices, and no evidence was led to support these charges. I agree. More importantly, these charges do not fit the description of the subject matter of the agreement relied upon, namely restoration of the cranes. These are overhead costs, not restoration costs. This claim fails.

Downtime charge for rope repairs 265. Invoice 214 includes a charge of $5,000.00 for "downtime" as a result of rope repairs. Titan points to the affidavit of Sherlock of 15 July 2008 at paragraph 32:

"The final item on invoice 214 was a downtime penalty incurred by titan due to a rope fault on one of Sunnyrex's cranes."

266. Sunnyrex objects to this charge on the basis that no particulars are provided, nor any evidence led to support any liability on the part of Sunnyrex relating to it. I agree.

Labour - Phillips 268. Invoice 214 includes a charge of $1,920.00 for labour undertaken by Phillips. This charge is calculated at 32 hours x $60 = $1,920.00. The first problem is that the hours specified only add up to 30. Sunnyrex objects to the charge on the basis that it is not supported by either time sheets or site reports, and Phillips gave no evidence in support of the items claimed.

269. Titan's case is that Phillips advised Sherlock of the hours he worked from time to time and these were recorded for inclusion in the invoice. The evidence establishes that Phillips participated in the restoration work on the cranes. In my view the evidence is sufficient to ground the claim, but not in the amount claimed. First, there is the 2 hours discrepancy. Second, I am not satisfied that the work fits the description of the subject matter of the agreement relied upon, namely restoration of the cranes. To my mind, organising paperwork (22 hours) is not labour relating to restoration or reconditioning. It is an overhead expense to be borne by Titan. Similarly, consultation on base feet pad weld design (2 hours) is not labour relating to restoration or reconditioning. Next, the charge for chasing up and organising delivery, prices for hoist rope change over at Fairfield (2 hours) is not labour relating to restoration or reconditioning prior to the hire of the cranes, but clearly relates to something done during the hire, at Fairfield.

270. The claim for labour by Phillips succeeds only as to 4 hours @ $60 = $240.00.

Labour - Nicholas Hanlin and Damon Hanlin 271. Invoice 214 includes a charge of $14,310.00 for labour undertaken by Nicholas Hanlin and Damon Hanlin. This charge is calculated at 238.5 hours x $60 = $14,310.00. The records show 109.5 hours for Damon Hanlin, and 129 hours for Nick Hanlin Jnr, a total of 238.5 hours.

272. Sunnyrex objects to the charge. The first objection is that it is not supported by relevant documentary evidence: not all the hours claimed are the subject of time sheets or site reports and the specific days for which time is claimed are not always specified. The claim based on the administration diary is said to disclose "some disquieting aspects": that some entries were made well after the dates to which they relate, and the absence of particulars as to start times and finish times for work claimed. It is submitted that if the Hanlins had spent time at Annangrove it would have been observed by Mikalauskas, and because he says he never saw them there, they weren't there. I am unable to follow the logic of that proposition. In any event for the reasons already given, I prefer the Hanlin evidence to that of Mikalauskas, and I am satisfied that the administration diary, imperfect as it may be, is sufficient to ground the claims for time spent, in the absence of any credible alternative evidence that it wasn't spent, or was not spent on activities that fit the description of the subject matter of the agreement relied upon, namely restoration of the cranes.

273. Having regard to the records, the evidence of the men doing the work, and the evidence as to the nature and extent of the restoration work required, I am satisfied on the balance of probabilities that the hours claimed by the Hanlins in Invoice 214 were in fact undertaken, reasonably undertaken, and undertaken in pursuance of restoration and reconditioning work on the two cranes, prior to the hire of them to Titan.

274. The claim for $14,310.00 for labour undertaken by Nicholas Hanlin and Damon Hanlin in the restoration work on the cranes is therefore made out and succeeds.

Miscellaneous engineering by Hanlin Engineering 275. Invoice 214 includes a charge of $8,800.00 for miscellaneous engineering undertaken by Hanlin Engineering. This is a claim relating to Hanlin Snr. There is a certain amount of mystery surrounding this claim, as it does not relate to restoration work. It appears in his invoice dated 30 October 2006 against an item described as "the cost of cleaning up the area". It is not claimed as part of the agreement as to the use of facilities and utilities, nor as part of the storage agreement. The only thing that is clear is that it does not relate to restoration work.

276. The claim for $8,800.00 has not been proved and it fails.

Total amount allowed in respect of Invoice 214 277. The charges proved in respect of Invoice 214 total $14,550.00. To that amount I add GST of $1,455.00 giving a total of $16,005.00, and I find that amount proved as part of the claim by Titan.

278. The Titan claim based on Invoice 599 is for $9,077.78 plus GST of $907.78, a total of $9,985.56. This is claimed as part of the costs relating to the work done and parts supplied pursuant to the agreement for restoration of the cranes prior to the hire.

John R Turk - Invoice No CH11652895 $ 783.58 Industry IQ - Invoice No 7691 $ 4,886.20 Fullers Mobile Cranes - Invoice No 12997 $ 2,673.00 Labour charges as per Site Reports No S12398 and S12397 Total hours 12.25 @ $60 per hour $ 735.00 Total $ 9,077.78

280. A charge of $1,983.30 for an invoice from Star Delta Pty Ltd was withdrawn, as it is claimed in Invoice 111711 (V2).

281. Sunnyrex concedes the invoice from Fullers Mobile Cranes in the amount of $2,673.00 including GST, but objects to the other charges.

The John R Turk invoice 282. Invoice 599 includes a claim for an invoice from John R Turk dated 18 April 2006 for $783.58.

283. Sunnyrex objects to a number of aspects of this invoice. Firstly, the invoice is addressed to Atlas. Second, it only adds up to $430.85. Third, it has handwriting on it that does not correspond with the actual charge. Fourth, there is no evidence the items were used on the Sunnyrex cranes, as part of the restoration, or at all.

284. In my view, the documentation sufficiently establishes that these were parts supplied for and installed on the Sunnyrex cranes. In my view nothing turns on the fact that the invoice is addressed to Atlas. What is missing, however, is evidence as to how much Titan actually paid, or is liable for, in respect of that invoice. That being the case, the claim is only proved in the amount of the invoice, namely $391.66, not including GST.

285. The claim based on this invoice succeeds in an amount of $430.85 including GST.

The Industry IQ invoice 286. Invoice 599 includes a claim based on an invoice from Industry IQ dated 27 February 2006 for a total of $4,886.20.

287. Sunnyrex objects to a number of aspects of this invoice. Firstly, the invoice is addressed to Atlas. Second, only one of the units concerned was installed. Third that there is a duplication of the units with Invoice 12398. Fourth, there is notation on the invoice: "not linked to job", and in the absence of a site report, the claim is not proved.

288. I am not persuaded that there has not been a duplication of the units concerned in another invoice. The descriptions are identical:

"Radio remote control 2 x 2-axis joysticks with data feedback to suit BPE transmitter receiver 2 x batteries charger."

289. The claim based on this invoice succeeds only in respect of the balance, an amount of $48.40 including GST.

The labour charges 290. Invoice 599 includes a claim for labour charges in an amount of $735.00, based on Site Reports No S12397 and No S12398 (12.25 hours @ $60 per hour).

291. Sunnyrex objects to the claim. It points out that the site reports demonstrate a lack of precision, and that there is no evidence to establish that what was done related to the restoration, and that having regard to the dates of the invoices could equally have related to the erection of the 1992 crane at Fairfield.

292. The Titan submission in response is unconvincing, and indeed seeks to reverse the onus of proof. Titan has not discharged its onus of proof as to this claim, and it therefore fails.

Total amount allowed in respect of Invoice 599 293. The charges proved in respect of Invoice 599 total $3,152.25, inclusive of GST. I find that amount proved as part of the claim by Titan.

294. The Titan claim based on Invoice 121 consists of:

(a) $11,744.51 claimed as part of the costs relating to parts supplied pursuant to the agreement for restoration of the cranes prior to the hire, plus a 10% mark-up of $1,174.00.

(b) $15,429.60 claimed as part of the costs relating to the work done and parts supplied pursuant to the agreement for maintenance of the cranes during the hire.

295. The original amount in the invoice was $34,021.61. This has been reduced by reason of deletion of the charge for transport by K & W Haulage in the amount of $6,847.50, which Titan now concedes has been paid. I will return to this item.

296. The total claim based on this invoice is, therefore, the sum of $15,429.60 plus $11,744.51 , a total of $27,174.11, plus a 10% mark-up of $1,174.46, a total amount of $28,348.57.

297. Invoice 121 relates firstly to various supplier invoices, a number of which Sunnyrex disputes.

The HVT Inspections invoice 298. Invoice 121 includes a claim for an invoice from HVT Inspections dated 23 March 2006 for $825.00 including GST that relates to crack testing.

299. Sunnyrex denies liability for this invoice on the basis that the report relating to the testing was never provided to it. However, it is not disputed that the work was done, and even if Sunnyrex didn't get the report, that does not negate the liability to pay for the work.

300. The claim based on this invoice succeeds for $825.00 including GST.

The DHL invoice D024329305 301. Invoice 121 includes a claim for an invoice from DHL (D024329305) dated 15 March 2006 for $231.15 including GST, being freight charges for a manual. The invoice is in fact for $210.51.

302. Sunnyrex denies liability for this invoice on the basis that it was never provided with the original manual. However, it is not disputed that the work was done, and even if Sunnyrex didn't get the manual, that does not negate the liability to pay for the delivery of the manual that was no doubt necessary.

303. The claim based on this invoice succeeds for $210.51 including GST.

The VSL Prestressing invoice 27898 304. Invoice 121 includes a claim for an invoice from VSL Prestressing (Aust) Pty Ltd dated 2 March 2006 for $3,413.90 including GST.

305. Sunnyrex denies liability for this invoice. It says the work relates to the cost of bolting the 1992 crane to the ground at the Fairfield site and is an erection cost, not a restoration cost. Titan says it relates to parts supplied prior to erection at Fairfield, and the invoice itself makes this clear, as does the date of the invoice.

306. The claim based on this invoice succeeds for $3,413.90 including GST.

The Atlas Abrasives invoices 307. Invoice 121 includes claim for invoices dated 27 February 2006 and 14 March 2006 from Atlas Abrasives Pty Ltd (not to be confused with Atlas Electrical the second cross-claimant) for $1,324.40 and $233.75 including GST that relate to the painting of the 1993 crane in blue, the colour required by the sub-hire, Abigroup.

"These are costs not borne by Abigroup as hirer and there is no basis for holding Titan liable for the costs when they are to be borne by the owner of the crane (Sunnyrex)."

309. Sunnyrex denies liability for these invoices on the basis that they were not part of the restoration, nor part of the hire agreement. I agree. These were costs of the sub-hire to be borne by Titan.

The VSL Prestressing invoice 27897 311. Invoice 121 includes a claim for an invoice from VSL Prestressing (Aust) Pty Ltd dated 2 March 2006 for $2,252.80 including GST.

312. Sunnyrex denies liability for this invoice. It says the work relates to the cost of bolting the 1992 crane to the ground at the Fairfield site and is an erection cost, not a restoration cost. Titan says it relates to parts supplied prior to erection at Fairfield, and the invoice itself makes this clear, as does the date of the invoice.

313. The claim based on this invoice succeeds for $2,252.80 including GST.

The DHL invoice SYD198369 314. Invoice 121 includes a claim for an invoice from DHL (SYD198369) dated 10 April 2006 for $300.06 including GST being freight costs for brake pads. The invoice is in fact for $273.26.

315. Sunnyrex denies liability for this invoice on the basis that it relates to a maintenance cost that Titan agreed to bear in accordance with the Sunnyrex version of the maintenance agreement. I have found against Sunnyrex on this issue. In any event, having regard to the date, it is more probably than not a restoration expense.

316. The claim based on this invoice succeeds for $273.26 including GST.

The Dowding & Mills invoice 317. Invoice 121 includes a claim for an invoice from Dowding & Mills (Australia) Pty Limited dated 12 July 2006 for $2,311.10 including GST that relates to rewinding of the coil on the 1993 crane at Newcastle.

318. Sunnyrex concedes liability for 50% of the invoice amount in excess of $1,500.00 in accordance with its version of the maintenance agreement. It denies liability for the balance of the invoice. I have found against Sunnyrex on this issue.

319. The claim based on this invoice succeeds for $2,311.10 including GST. I allow this claim as a maintenance charge, not a restoration charge.

The Atlas invoices claimed in the Titan Invoice 121 320. The balance of Invoice 121 relates to invoices from Atlas (Atlas Electrical Technologies & Services Pty Ltd - the second cross-claimant) all of which relate to maintenance costs during the sub-hires. Sunnyrex denies liability based on its version of the maintenance agreement. I have found against Sunnyrex on this issue. Sunnyrex objects to two individual invoices on other bases. I will deal with each of these objections in order.

Atlas invoice 12083 321. The first Atlas invoice specifically disputed is 12083. Titan makes a charge in Invoice 121 for $1,629.50 in respect of invoice 12083, which relates to the installation of a BPE system and calibration work on the 1993 crane at Newcastle on 1 May 2006.

Sunnyrex objects to the charge. It says firstly that the charge is duplicated at Invoice 11171 (V2). But that relates to the claim for the parts, not the installation claimed in invoice 12083. The second objection, which refers to power, is misconceived. Titan does not claim for power. It claims for labour relating to travel, installation and calibration work ($840.00), and parts being a pot and gear ratio ($732.25), a total of $1572.25 plus GST = $1,729.48.

The labour component of $840.00 is clearly recoverable.

As to the pot and gear ratio, Sunnyrex contends this relates to the generator used to supply power to the 1993 crane at the Mater site and is, therefore, an operating cost. Titan in response relies on the evidence of Damon Hanlin at paragraph 25 of his affidavit of 15 July 2008, referring to his lunch with Lim at the Lidcombe noodle house in early 2006. However, on my reading of that paragraph, it supports the Sunnyrex contention:

DH "We are going to need a diesel generator for the job at the Mater. The site can't supply enough power to run the crane. Titan will buy it to keep the project. Otherwise Lindores will pick it up. We will bear the critical works on it too…"

The claim for the pot and gear ratio therefore fails.

The claim based on this invoice succeeds in an amount of $840.00 plus GST, a total of $924.00.

Atlas invoice 12566 327. The second Atlas invoice specifically disputed is 12566. Titan makes a charge in Invoice 121 for $1,773.40 in respect of invoice 12566, which relates to work done on the 1992 crane in relation to the Autec system.

328. Sunnyrex objects to the charge. It says the faulty receiver card should have been replaced under warranty. Titan submits that there is no basis for this assertion. There is no evidence to support the assertion.

The Sunnyrex claim for a credit of $8,000.00 330. Sunnyrex contends that it paid $8,000.00 to Titan on 18 October 2005 in respect of "third party invoices", and claims credit for that amount. Mikalauskas says that related to haulage of the cranes. On this basis, Titan withdraws its charge in respect of the charge for $6,847.50 based on the invoice of K & W Haulage Pty Limited, for transport of the cranes. In my view, it should also give Sunnyrex credit for the balance, namely $1,152.50.

The claim for a 10% mark up 331. Titan claims a mark-up of 10% on parts supplied. It contends that the restoration agreement included a 10% mark-up. It did and it didn't (see paragraph 242 above). What Hanlin said to Mikalauskas at the meeting in October 2005 was:

"I will try and do my best as to parts - it will be cost or cost plus ten percent."

332. Titan makes no claim for 10% in Invoice 121. It made no election to make the claim at the time and it can't now tack that claim on in these proceedings.

Amounts allowed in respect of Invoice 121 333. The charges proved in respect of Invoice 121 that relate to restoration are as follows:

HVT Inspections 21194 $ 99.00 including GST DHL D024329305 $ 210.51 inclusive of GST Mr Cool 16673 $ 308.00 including GST Barry Evans 6357 $ 781.00 including GST VSL 27898 $3,413.89 including GST VSL 27897 $2,252.80 including GST HVT Inspections 21364 $ 825.00 including GST DHL SYD198369 $ 273.26 inclusive of GST Total $8,163.46 Credit $1,152.50 Net total $7,010.96

I find the Titan claim in respect of restoration of the cranes based on Invoice 121 proved in a total amount of $7,010.96.

The balance of Invoice 121 relates to the claim for maintenance.

The charges that I find proved in respect of Invoice 121 that relate to maintenance are as follows:

Dowding & Mills NWCRW3649D $ 2,311.00 Atlas 12926 $ 477.10 Atlas 11734 $ 715.90 Atlas 12083 $ 924.00 Atlas 12566 $ 1,773.40 Atlas Other* $10,498.06 Total $16,699.46

*12084, 12085, 12087, 12412, 12415, 12096,12443,12552, 12904, 12923, 20306, 12070, 20225, 12078, 12082, 12376, 12401

The Titan claim based on Invoice 12573 for $2,274.45 (inclusive of GST) relates to repairs performed on the 1993 crane at Newcastle in June 2006.

Sunnyrex disputes its liability to pay the invoice, but not the amount.

This invoice is covered by the agreement I have found was entered into by Sunnyrex in respect of maintenance and repair of the cranes during the hire period, and the claim for this invoice succeeds in the amount of $2,274.45

The Titan claim proved as to restoration and maintenance 340. The Titan claims for restoration and maintenance succeed as follows:

Labour for restoration of the cranes - Invoice 214 $16,005.00 Labour for restoration of the cranes - Invoice 599 $ 3,152.25 Parts for restoration - Invoice 121 $ 7,010.96 Total restoration claim $26,168.21 $ 26,168.21

Labour and parts during hire - Invoice 121 $16,699.46 Labour and parts during hire - Invoice 12573 $ 2,274.45 Total maintenance claim $18,973.91 $ 18,973.91 Total claim proved by Titan $ 45,142.12

The Atlas claim based on Invoice 20245 is for $10, 912.50 plus GST, a total of $12,003.75. It relates to labour in connection with restoration and reconditioning of the cranes up to 17 March 2006.

The Atlas claim based on Invoice 20246 is for $8,315.00 plus GST, a total of $9,146.50. It relates to labour in connection with restoration and reconditioning of the cranes from 17 March 2006 to 19 April 2006.

Sunnyrex submits generally that there is no evidence to establish the time taken to perform the work the subject of these claims. I have already determined this issue, having found that the evidence of those for whom time is claimed and the business records, in particular the administration diary, are sufficient to prove the time claimed was, in the absence of some evidence to the contrary, more probably than not worked in restoration of the cranes.

Sunnyrex submits specifically that certain of the work claimed relates to activities not connected with the restoration of the cranes, such as loading, transportation and erection of the cranes pursuant to the sub-hires. Reference is made to Site Report S12398 as specifying the work of "prep and load" crane on 19 April 2006. It is reasonable to assume that of the 14 hours claimed for that site report, 5 related to loading. I will deduct 5 hours @ $60.00 = $300.00. There is no reason to suspect any of the work set out in the other supporting site reports relates other than to the restoration and reconditioning of the cranes.

The claim based on Invoice 20245 succeeds in full, for $12,003.75.

The claim based on Invoice 20246 succeeds in an amount of $8,015.00 plus GST, a total of $8,816.50.

The Atlas claims based on Invoice 11711 (V2) and Invoice 12398 (V2) relate to parts supplied in connection with restoration and reconditioning of the cranes, as follows, with a margin of 10%:

11711 (V2): $11,946.95 plus GST = $13,141.65 12398 (V2): $19,628.86 plus GST = $21,591.75 Total claim $34,733.40

Sunnyrex submits generally that the source documentation supplied is insufficient to establish that all the items concerned were supplied in connection with the two Sunnyrex cranes. I have already determined this issue, having found that the business records relied on are sufficient to prove the parts claimed for were, in the absence of some evidence to the contrary, more probably than not supplied to the Sunnyrex cranes.

Sunnyrex submits specifically that certain of the parts claimed were not, to the knowledge of Mikalauskas, installed in either crane. He lists the following specific items:

One worn gear limit switch $ 561.00 One clamp meter $ 202.19 One switch load $ 253.00 Brass couplings $ 128.00 Lights $ 182.23 Lights $ 364.46 Total $1,690.88

Atlas does not point to any specific evidence of these items to rebut the Mikalauskas evidence, and on that basis I am not satisfied that these claims were proved, on the balance of probabilities. I will therefore deduct $1,690.88 plus GST, a total of $1,859.97, from the claim made in respect of these invoices.

The claims based on Invoice 11711 (V2) and Invoice 12398 (V2) succeed in an amount of $29,884.93 plus GST, a total of $32,873.42.

The Atlas claim proved as to restoration and maintenance

The Atlas claims relating to restoration and maintenance have succeeded to the following extent:

Labour for restoration of the cranes - Invoice 20245 $12,003.75 Labour for restoration of the cranes - Invoice 20246 $ 8,816.50 Parts for restoration - Invoices 11711 (V2) & 12398 (V2) $32,873.42 Total claim proved by Atlas $53,693.67

The Titan claims have succeeded to the following extent:

Storage - $18,000.00 plus GST $ 19,800.00 Restoration and maintenance $ 45,142.12 Total $ 64,942.12

I was asked not to calculate interest, if any is to be awarded, until I had made my findings on the respective claims.

Titan claims a set-off in respect of the amount for which Sunnyrex has succeeded.

Costs of the Titan claim are deferred pending the assessment of interest and the outcome of the totality of the respective claims, including the set-off claimed.

The Atlas claims have succeeded in a total amount of $53,693.67.

I was asked not to calculate interest, if any is to be awarded, until I had made my findings on the respective claims.

Costs of the Atlas claim are deferred pending the assessment of interest and the outcome of the totality of the respective claims.

The claim by Mr Hanlin Snr against the plaintiff fails. Costs are reserved.

The claim by the plaintiff against the defendant is proved in a total amount of $174,748.20 with interest to be assessed.

The cross-claim by the defendant/first cross-claimant against the plaintiff is proved in a total amount of $64,942.12 with interest to be assessed.

The cross-claim by the second cross-claimant against the plaintiff is proved in a total amount of $53,693.67 with interest to be assessed.

The cross-claim by the third cross-claimant against the plaintiff fails.

The proceedings are stood over for further written submissions on interest, the set-off claimed by the defendant, and the disposition of any money paid into court.

367. The parties are to bring in short minutes within 14 days as to the further conduct of the proceedings, failing which I will list the matter for directions.

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