Thomas v APL Co Pte Ltd trading as APL Lines

The judge's trial reasons 13 In the event, his Honour proceeded to deal with the matter ex parte on 1 May 2012, as would be expected, as a result of the non-appearance of the respondents, and he then delivered short reasons for judgment. He noted that the receivers and managers had informed APL's solicitors that they did not intend to appear. His Honour found that Mr Thomas was the sole shareholder and director of two Raschta companies. He said that Mr Thomas had not appeared. Initially in his reasons, the judge rejected APL's claim that Mr Thomas, by endorsing the bill of lading on behalf of Raschta Coatings, had accepted personal liability on the bill of lading (at [3]). Despite that finding, his Honour said later in his reason that he had found against Mr Thomas on the question of whether he had direct liability under the bill of lading (at [10]). 14 His Honour then found that the containers had become available for collection from APL on 16 May 2012 and that they had been collected on 2 June 2011. The judge referred to the delivery charges in the order agreement terms and conditions, and found that the 40 foot container had not been returned to APL, despite frequent requests until finally collected by it on 16 December 2011, after the proceedings commenced. His Honour found that the respondents were not willing to provide access earlier. 15 However, his Honour did not make any finding as to what, if any, date a demand had been made for the return of the container, albeit he referred to "correspondence evidencing the return of the container [sic] and that detention charges were being imposed" (at [6]). 16 The judge found that it was clear that liability for APL's total invoiced charges up to 16 December 2011 of $35,755.01 was the responsibility of the two companies as consignee and endorser of the bill of lading, respectively. (His Honour did not consider whether or not the contractual charges and, particularly, the charge of $160 after the 17th day, amounted to a penalty. It is not a matter before me, but may have been an issue in relation to any contractual liability of the companies for those rates: cf Andrews v Australia & New Zealand Banking Group Limited (2012) 290 ALR 595 at 613-614 [78]-[83] per French CJ, Gummow, Crennan, Kiefel and Bell JJ.) 17 He then said that there was a question whether or not Mr Thomas could be found liable either under the contract in the bill of lading or under the general law. His Honour cited a definition in the bill of lading of the term "Merchant" which included, among others, the consignee, receiver or holder of the bill of lading or the person entitled to the possession of cargo "and the servants and agents of any of these, all of whom should be jointly and severally liable to the Carrier for the payment of all Freight, and for the performance of obligations of any of them under this Bill of Lading." 18 The judge identified cl 10 of the bill of lading as a source of liability of Mr Thomas because it provided that "each Merchant" would assume full responsibility and indemnify the carrier for any loss or damage, howsoever caused, to any container which occurred while it was in the possession of any merchant or any servant or agent. (However, no loss or damage to the container was asserted by APL and, in my opinion, it is difficult to see what possible relevance that clause could have.) 19 His Honour also referred to cl 21 of the bill of lading that, he said, had stipulations concerning free storage time and demurrage contained in an applicable tariff. However, there does not appear to have been any evidence of the content of that material. Instead, APL relied on the order agreement. His Honour said that Mr Thomas had not appeared to argue that he had no personal liability under the bill of lading or the general law. The judge did not refer at all in his reasons to Mr Thomas' defence denying liability. Instead, his Honour referred to a decision of Rein J in Coastal Recycled Cooking Oils Pty Limited v Innovative Business Action and Strategies Pty Limited [2007] NSWSC 831 at [38]-[39]. There Rein J had applied what Redlich J had said in Johnson Matthey (Aust) Pty Limited v Dascorp Pty Limited (2003) 9 VR 171 at 201 namely that while the tort of conversion did not require any particular intention, a director of a company would be held liable for its tortious acts that he or she directed or procured, regardless of the director's state of mind. He held that the level of involvement and the degree of control which the director exercised would determine whether it could be said that acts had been directed or procured by the director. 20 The trial judge then found (at [10]): "In this case Mr Thomas was the sole director and shareholder of the company; it was he who endorsed the bill of lading and it was with him that the applicants had all their correspondence. To the extent that there is no evidence that he took any steps to return the container or to respond to the applicants' demands for its return, I am satisfied that he procured the committal of the tort of detinue by the two corporate respondents. I am equally satisfied that the authorities place upon him personal liability for those actions, even if it could be argued that he had no direct liability under the bill of lading, which is something else that I have found against him." (emphasis added) 21 As I have noted above, the last sentence is incoherent with his Honour's earlier finding to the contrary (at [3]). His Honour gave judgment for the sum claimed together with interest. He also determined that, pursuant to a Calderbank offer that had been made by the solicitors for APL on 19 April 2012 to the respondents, that they pay indemnity costs from 23 April 2012 up to the date of the hearing.

The circumstances of Mr Thomas' delay 22 Mr Thomas gave no explanation as to why he did nothing from the time of the receipt of the telephone call from the registry officer on 1 May 2012, responding to his facsimile to the Court of that date, until he brought the present application which was filed on 7 June 2013. He told me from the bar table that he had had significant personal difficulties and travails associated with the receivership of his businesses and a matrimonial breakdown. The evidence is somewhat inconclusive as to whether the bankruptcy notice issued by APL in early June 2012 ever came to the notice of, or was received by, Mr Thomas. But, it appears that shortly before he brought the present application he became aware of a creditor's petition based on his failure to comply with APL's bankruptcy notice on which APL was proceeding, hence stimulating his present application.

The nature of the proposed appeal 23 Mr Thomas has a law degree but is not a qualified lawyer. The grounds of appeal which he seeks to raise were that, first, he had been denied natural justice because his Honour proceeded ex parte on 1 May 2012, secondly, his Honour failed to consider implications from the receivership of the two Raschta companies and the restraint that this placed upon him having access to the companies' documents relevant to the defence of the proceedings below, thirdly, the trial judge erred in the quantum he found and also that quantum exceeded the limit of demurrage in the bill of lading, and fourthly, he complained about the costs order. The draft notice of appeal seeks that the judgment of 1 May 2012 be set aside, the matter be transferred to the Federal Circuit Court for hear to the defence of theseeceive the emailed affidavitsing in Brisbane and costs.

Consideration 24 The principles developed in this Court prior the introduction of r 36.05 for the grant of an extension of time in which to file a notice of appeal addressed the particular formulation of O 51 r 15(2) of the now repealed Federal Court Rules 1979 (Cth). That rule enabled the Court or a judge "for special reasons" at any time to give leave to file and serve a notice of appeal. The expression "special reasons" was described by Lockhart, Sheppard and Burchett JJ in Jess v Scott (1986) 12 FCR 187 at 195 as distinguishing the application for an extension of time from the usual course of filing a notice of appeal within 21 days after the date on which the judgment appealed from was pronounced or the order was made as applied then, and still does under r 36.03. They said: "But it may be so distinguished (not necessarily will, for the rule gives a discretion) wherever the Court sees a ground which does justify departure from the general rule in the particular case. Such a ground is a special reason because it takes the case out of the ordinary. We do not think the use of the expression "for special reasons" implies something narrower than this. … It should not be overlooked that r 15(2) enables leave to be given "at any time"; the "special reasons" relevant to such a power cannot but describe an elastic test, suitable for application across a range of situations, from an oversight of a day to a neglect persisted in during a prolonged period. It would require something very persuasive indeed to justify a grant of leave after, for example, a year; equally, it may be said, something much less significant might justify leave where a party is a few days late." (emphasis added) 25 Their Honours went on to say that the repealed rule described a flexible discretionary power, but one that required the case to be made upon grounds sufficient to justify a departure, in the particular circumstances, from the ordinary rule prescribing a period within which an appeal must be filed and served: see also QAAH v Minister for Immigration & Multicultural & Indigenous Affairs [2004] FCAFC 9 at [6]-[7], per Tamberlin, Kiefel and Weinberg JJ. 26 This is a case in the category that I have emphasised in the citation above involving a request for an extension of time amounting to just over a year. In Jackamarra v Krakouer (1998) 195 CLR 516 and 519-520 [3]-[4], Brennan CJ and McHugh J (with whom Kirby J gave concurring reasons on this point: see at 540-541 [66(4)]) discussed the way in which the Court assesses whether to grant of an extension of time in which to file a notice of appeal. They approved what Lord Denning MR had said in R v Secretary of State for the Home Department; Ex parte Mehta [1975] 1 WLR 1087 at 1091 namely: "We often like to know the outline of the case. If it appears to be a case which is strong on the merits and which ought to be heard, in fairness to the parties, we may think it is proper that the case should be allowed to proceed, and we extend the time accordingly. If it appears to be a flimsy case and weak on the merits, we may not extend the time. We never go into much detail on the merits, but we do like to know something about the case before deciding whether or not to extend the time." 27 Brennan CJ and McHugh J commented that his Lordship's remarks were made in the context of an application for an extension of time to lodge an appeal. In that class of case, they said, the respondent to the application had a vested right to retain the judgment the subject of the appeal, adding: "To grant the application for an extension of time is to put at risk a vested right of the respondent." 28 I am satisfied that the trial judge proceeded on an erroneous principle in the assessment of damages. Mr Thomas was not party to any contractual obligation to pay invoiced charges. The terms of cl 21 of the bill of lading on which the trial judge relied, in my opinion, may have been arguably effective with respect to storage time at the wharf. However, cl 21 does not appear to cover the situation, separately provided for in the order agreement, of a failure to timeously return a container that had been released to the consignee upon the execution of the order agreement itself. Moreover, his Honour did not address or make a finding about the (unparticularised) date of any demand made for the return of the goods which was critical for a finding of liability in detinue or conversion. 29 Neither the judge nor I was referred to the decision of the Court of Appeal of the Supreme Court of New South Wales in Bunnings Group Ltd v CHEP Australia Ltd (2011) 82 NSWLR 420. There Allsop P, with whom Giles and Macfarlan JJA agreed, considered the circumstances in which liability for damages for conversion or detinue could be imposed in a commercial situation. In that case, Bunnings had retained possession of the pallets owned by CHEP. The issue was whether Bunnings assumed liability in conversion or detinue by retaining the pallets after CHEP had demanded their return. In a very instructive judgment that thoroughly reviewed the law, Allsop P discussed the principles saying (82 NSWLR at 468-469 [179]-[180]): "[179] If use is required for the legitimate employment of a hiring charge to assess damages or compensation or monetary relief, it is necessary to consider what kind of use will suffice. Conversion or detinue has been found. If the wrong is the mere non-return of goods that lie idle and contribute not at all to the life, work or business of the wrongdoer it may be difficult to justify conceptually, in the absence of proof of actual loss or damage, the awarding of a hiring fee. Hire is, after all, in its nature, a payment for use. Nevertheless, one need not be overly precise about the nature of the use. For instance, in Strand Electric (and Engineering Co Ltd v Brisford Entertainments Ltd [1952] 2 QB 246), the switchboards were not actively operated. There was use in the relevant sense, however, because without the equipment the theatre could not be let or sold - it made the theatre more attractive and readily disposable. [180] Here some of the use was possession, for display and storage. Possession for these purposes was after a demand to return. In a sensible commercial sense, it was the deployment of the pallets in the business of Bunnings, even to the extent that they were recirculating pallets for returns. The refusal to return enabled the continued smooth operation of the Bunnings business to take place, without the inconvenience (and hence business cost) of doing that which they were legally obliged to do - return all pallets to Chep. This, in my view, is use enough for the Strand Electric principle." (emphasis added) 30 His Honour said that the basis of an award of compensation was the market or standard rate because it best reflected what the converter or detainer would have had to pay and what the owner should obtain for the property wrongfully detained (82 NSWLR at 469 [185]). 31 The trial judge's findings here were inconsistent as to the basis on which he found Mr Thomas liable. There was no suggestion in the evidence that Mr Thomas or the Raschta companies used the container in any way. It was merely left sitting at the premises and they failed to return it in a timely fashion. There was no evidence before the trial judge about the reasonable value of the hire of the 40 foot container. Nonetheless, APL had been deprived of the use of the container by Mr Thomas' conduct in failing to return it, or to cause the companies to return it, after at least the demand of 15 September 2011. 32 I am not satisfied that Mr Thomas has a sufficiently arguable case that he was not liable at all for any damages for the wrongful detention, or failure to cause the return, of the container. However, in my view, he has clearly suffered an erroneous entry of judgment in an excessive sum that had no legally justifiable basis. If I were determining solely whether I should grant Mr Thomas leave to appeal, I would be satisfied that he has demonstrated an arguable error in the assessment of damages in the proceedings appealed from and that he would suffer substantial injustice if he were not allowed to appeal. But this is another category of case. Here, Mr Thomas seeks to deprive APL of its vested right to proceed on the judgment debt one year after the proceedings below were decided against him. He took no steps to upset the judgment until he filed the present application. 33 The present application for an extension of time is a matter in which there is some merit in each side's position. On APL's side, it obtained its judgment regularly, albeit through the application of wrong principles, which is a factor that, in turn, favours Mr Thomas' argument. Mr Thomas was aware of the hearing on 1 May 2012. He sought to have it adjourned. He, however, made no inquiry whatsoever thereafter as to what had happened and has only been impelled to take the present proceeding after learning of the existence of a creditor's petition based on the judgment debt found by the trial judge. That was despite his awareness, prior to the commencement of the proceedings below, of the significant efforts that APL had made directly, through its solicitors and SRS Maritime to recover the amounts owing as well as to obtain the delivery of the container. Mr Thomas was also aware of APL's determined prosecution of the proceedings. 34 Accordingly, I am not satisfied that Mr Thomas has given an adequate explanation of his lack of attention to ascertaining what happened before the trial judge on 1 May 2012. Although r 36.05 does not contain the expression "for special reasons", that O 51 r 15(2) of the repealed Rules contained, it is still necessary for an applicant for an extension of time to satisfy the Court why the discretion to extend time should be actuated in his favour. That is why r 36.05(3)(c) requires an affidavit stating briefly, but specifically, the facts on which the application relies, and why the notice of appeal was not filed within time. While Mr Thomas may have been embroiled in a deal of litigation and personally stressful circumstances, I think he had enough commercial common sense to appreciate that something had happened before his Honour on 1 May 2012 that may have affected his rights, even if it had only been to adjourn the proceedings to some other time. He made no effort to find out what had happened or to otherwise protect his rights and interests. I am not satisfied that that failure should be excused: Jess 12 FCR at 195; Jackamarra 195 CLR at 519-520 [3]-[4], 540-541 [66(4)]. 35 The judgment below miscarried in quantifying the amount at stake. The costs of re-litigating the issue of quantum, if I were to allow the appeal and remit the matter to the trial judge, would almost certainly all be borne by Mr Thomas, since I would not have been persuaded to grant leave to appeal or allowed the appeal in respect of any other matter than the calculation of the quantum of damages. That being the case, any remission, rehearing and the extension of time would all involve Mr Thomas assuming a liability to pay APL's costs in any event.

Conclusion 36 In those circumstances and because of Mr Thomas' failure to give an adequate explanation, I am of opinion that his application for an extension of time should be dismissed with costs. I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.