White v Baycorp Advantage Business Information Services Ltd

White v Baycorp Advantage Business Information Services Ltd - [2006] NSWSC 441 - NSWSC 2006 case summary — Zoe

[6]

Apollo Shower Screens Pty Ltd & Anor v Building and Construction Industry Long Service Payments Corporation (1985) 1 NSWLR 561 Ash Street Properties Pty Limited & Ors v Pollnow (NSWCA, Handley JA, 1 September 1995, unreported) Baiada & Ors v Waste Recycling & Processing Service of NSW [1999] NSWCA 139; (1999) 130 LGERA 52 Campomar Sociedad, Limitada & Anor v Nike International & Anor (2000) 202 CLR 45 Concrete Constructions Group Ltd v Litevale Pty Ltd (2002) 170 FLR 290 Davis v Capel [1959] NZLR 825 DFC of T v Action Workwear Pty Ltd (1996) 14 ACLC 1335 Diamond Hill International Pty Ltd v Xu (2001) 19 ACLC 1139; [2001] FCA 531 Dunlop Pneumatic Tyre Company Ltd v Selfridge & Company Limited [1915] AC 847 Hampton Court Ltd v Crooks (1957) 97 CLR 367 Humble v Hunter (1848) 12 QB 310; 116 ER 885 Illawong Village Pty Ltd v State Bank of NSW [2004] NSWSC 18 Jekos Holdings Pty Ltd v Australian Horticultural Finance Pty Ltd (No 2) [1995] 1 QdR 612 Joro Pty Ltd v State Bank of NSW (1992) 5 BPR 11,709 Lucas v De La Cour (1813) 1 M & S 249; 105 ER 93 CASES CITED : March v E & MH Stramare Pty Ltd & Anor (1991) 171 CLR 506 Maynegrain Pty Ltd v Compafina Bank [1982] 2 NSWLR 141 McWilliams Wines Pty Ltd v LS Booth Wine Transport Pty Ltd (1992) 25 NSWLR 723 Morris v Harris [1927] AC 252 Palmer Bruyn & Parker Pty Ltd v Parsons (2001) 208 CLR 388 Perpetual Trustee Co (Ltd) v Bligh (1940) 41 SR (NSW) 33 Pollnow v Ash Street Properties Pty Ltd (1996) 130 FLR 235 Re Kenneth Wright Distributors Pty Ltd (in liquidation); WJ Vine Pty Ltd v Hall [1973] VR 161 Siu Yin Kwan (Administratrix of the Estate of Chan Ying Lung, Decd) & Another v Eastern Insurance Co Ltd [1994] 2 AC 1999 Solla v Scott & Ors [1982] 2 NSWLR 832 Sweeney & Vandeleur Pty Ltd v BNY Australia Pty Ltd (1993) 11 ACSR 356 Trident General Insurance Co Ltd v McNiece Bros Pty Ltd (1987) 8 NSWLR 270 Tyman's Ltd v Craven [1952] 2 QB 100 United Service Insurance Co Ltd (in liq) v Lang (1935) 35 SR (NSW) 487 Wright v TNT Management Pty Ltd (1989) 15 NSWLR 679 Bowstead and Reynolds on Agency (17th edition 2001) Dalpont, Law of Agency (2001)

[20]

9 That agreement contained the following provisions: "1 Ownership of Equipment The Hirer is only a bailee of the Equipment. The Equipment is and will remain the sole property of Konica. On the expiry or termination of this agreement, the Hirer must return the Equipment as Konica may direct, at the expense of the Hirer. 2 Payment The Hirer must (a) pay the Rental as specified in this agreement; (b) pay interest on all overdue moneys at a rate which is 2% per year above Konica's cost of funding the overdue amount. Unpaid interest will be compounded monthly; (c) repay on demand any expense (including legal expenses and outgoings) Konica incurs in enforcing or protecting its rights under this agreement and any moneys Konica may pay to make good any failure by the Hirer to observe this agreement. (d) pay on demand all taxes, stamp duty, fees, duties, charges, costs and expenses relating to this agreement, the Equipment or payments received under this agreement; and (e) pay all amounts in full, without any deduction. … 7 Continuations and Variations (a) This agreement will extend beyond the expiry of the Term until (i) either party gives 90 days prior written notice of termination expiring on or after expiry of the Term; and (ii) at the expiry of the 90 day notice period, the hirer delivers the equipment, in good condition, as Konica may direct. … 8 Default (a) Each of the following is an event of default under this agreement: (i) the Hirer does not pay any amount payable under this agreement when due; … (b) If an event of default occurs Konica may, at its option, and without limiting any other remedy available to it, (i) seek to enforce the Hirer's obligation under this agreement; or (ii) terminate this agreement by notice to the Hirer. (c) If this agreement is terminated, Konica may retake possession of the Equipment and the Hirer must pay to Konica by way of liquidated damages the total of (i) all unpaid Rental and other moneys due under this agreement; (ii) the present value of all Rental not then due but which would have been payable until the expiry of the Term; (iii) if the Equipment is not returned to Konica within 7 days of termination, the value of the Equipment; (iv) any stamp duty or financial institutions duty payable in respect of the foregoing; (v) any costs and expenses incurred in repossessing the Equipment and making any repairs or reconditioning necessary to bring it to the condition in which the Hirer is required to return it; and (vi) interest in accordance with clause 2(b). A certificate signed by an officer of Konica as to any or all of the above amounts will prima facie evidence thereof. 9 Miscellaneous … "Konica" includes the successors and assigns of Konica and any person entitled to the benefit of this agreement. … Any notice to be given by Konica in connection with this agreement, in addition to any other manner in which it may be given, ■ may be sent by prepaid post to the Hirer at its last known place of residence or business and shall be deemed to be received on the second day after posting; ■ may be sent by facsimile to the Hirer's last notified facsimile number and shall be deemed to be received when Konica's facsimile machine prints a report of successful transmission."

[22]

11 White Holdings purchased the business of Metronome. In connection with that purchase, an agreement entitled "Assignment of Rental Agreement" was entered, which stated that it was made on 23 October 2000. It provided that it was: "BETWEEN the undermentioned Assignor Assignee and Owner respectively WHEREBY IT IS AGREED as follows:- 1. In consideration of the sum stated in the Schedule and of the agreements on the part of the Assignee hereinafter contained, the Assignor HEREBY ASSIGNS AND TRANSFERS to the Assignee all his right title and interest under the Rental Agreement between the Assignor and the Owner referred to in the Schedule (hereinafter called the "Principal Agreement") subject to the observance and performance by the Assignee as if he were the "Renter" under the Principal Agreement. 2. IN consideration of this Assignment and of the consent of the Owner thereto (testified by its execution hereof) the Assignee agrees with the Assignor and (as a separate agreement) with the Owner as follows: (a) To pay all rentals now due or to become due under the Principal Agreement at the place provided for in the Principal Agreement and to make good all defaults of the Assignor under the Principal Agreement. (b) As if the Assignee were the Renter under the Principal Agreement and the Owner had consented to the removal of the goods to the Assignee's address set out in the Schedule:- (i) to perform and observe all other stipulations and conditions of the Principal Agreement binding on the Renter. … SCHEDULE (1) Name of Assignor (original Renter): Metronome Enterprises Pty Ltd t/as Cobb & Co Mail (ACN 052 446 107) Address: 162 Old Northern Road, Baulkham Hills NSW 2153 (2) Name of Assignee: The White Holdings Group Pty Ltd (ABN: 093 203 733) Address: 162 Old Northern Road, Baulkham Hills NSW 2153 (3) Name of Owner: KONICA AUSTRALIA PTY LTD ACN 001 065 096 (4) Date of Principal Agreement: 2nd September, 1999 Account Number: 62/900764 (5) Consideration paid or to be paid by the Assignee to the Assignor: The sum of $1.00."

[85]

46 On 25 February 1997 Capital Corporate (a company which, it will be recalled, is a subsidiary of Capital Finance) entered into a tripartite agreement with Konica and a finance broker, Operating Lease Pty Ltd. In it, Capital Corporate was referred to as the "Principal", Konica was referred to as the "Agent", and Operating Lease Pty Ltd was referred to as the "Broker". The following provisions of that agreement are relevant. " Definitions In this document: "Approved Form " means, in relation to any document, a form approved in writing by the Principal from time to time. … "Equipment" means equipment the subject of a Leasing Proposal or Leasing Agreement. "Leasing Agreement" means: (a) a rental agreement … in each case in an Approved Form. "Leasing Proposal" means a proposal in relation to a Leasing Agreement in an Approved Form. … "Security" means any guarantee … or other form of security given or to be given by any person in relation to a Leasing Agreement … "Security Provider" means any person who provides a Security. 2.1 Appointment With effect on and from the date of this document the Principal appoints the Agent as its agent on the terms of this document, and the Agent accepts that appointment. … 2.5 Rights to be held for Principal The Agent must hold on behalf of and as trustee for the Principal all rights under or in relation to all Leasing Agreements, Securities, Equipment and Insurances and all money received or receivable by the Agent under or in connection with any of them. … 3.1 Submission of Leasing Proposals The Agent may deliver to the Principal a Leasing Proposal requesting the Principal to purchase Equipment and to approve the execution by the Agent of a Leasing Agreement in relation to it. A Leasing Proposal must be in Approved Form and contain full particulars of the proposed leasing arrangement. … 3.3 Further information Following receipt of a Leasing Proposal, the Principal may require the Agent to provide any documents and financial or other information in relation to the proposed Lessee, Equipment, Security or Security Provider as the Principal requires. The Agent must use its best endeavours to provide the required documents and information to the Principal. 3.4 Approved by Principal The Principal may in its absolute discretion approve or reject a Leasing Proposal … … 4.1 Authority of Agent If the Principal approves a Leasing Proposal then the Principal authorises the Agent to sign as agent for the Principal the relevant Leasing Agreement and any Security specified in the Leasing Proposal. 4.2 Things the Agent must deliver If the Principal approves a Leasing Proposal then the Agent must deliver to the Principal: (a) an invoice for the Equipment for an amount and in terms agreed to by the Principal and the Agent. (b) the Leasing Agreement and any Security specified in the Leasing Proposal, each in an Approved Form and duly signed by all parties; … 4.3 Purchase of Equipment If the Principal is satisfied: … then: (i) the Principal authorises the Agent to acquire the relevant Equipment on the Principal's behalf on terms approved by the Principal and agreed to by the Agent; and (ii) the Principal must pay the agreed purchase price to the Agent or, at the Agent's option, to the supplier. 4.4 Delivery of Equipment (a) The Equipment is taken to be delivered to the Principal when the Principal pays the purchase price in accordance with clause 4.3(d)(ii). … 5.2 Action the Agent must take The Agent must, at the Principal's cost, take any action which the Principal reasonably requires under or in relation to a Leasing Agreement or Security or to protect the Principal's interest in any Equipment. The actions which the Principal may require the Agent to take include, but are not limited to: (a) giving notices and demands under Leasing Agreements, Securities and Insurances; … 5.3 Undisclosed agency (a) If the Principal approves a Leasing Proposal on the basis that the agency of the Agent in relation to the subject transaction is to be undisclosed, then the Principal must not, except as allowed under paragraph (b), disclose to any person that the Agent is acting as Agent of the Principal. (b) Despite paragraph (a) the Principal may disclose the agency arrangement: … (iii) if an Event of Default occurs; or (iv) for the purpose of enforcement under clause 6. 6.2 Breach by Lessee or Security Provider If a Lessee or Security Provider fails to comply with any of its obligations under a Transaction Document the Principal, at its discretion, may either itself take, or require the Agent to take at the Principal's cost, any action which the Principal considers necessary or desirable in connection with the failure. Such action may include, without limitation, action: … (b) to terminate, or to accept the repudiation of, the Leasing Agreement; or (c) to recover money owing by the Lessee or Security Provider. … 6.4 Attorney The Agent irrevocably appoints the Principal and each Authorised Officer of the Principal jointly and each of them severally as the Agent's attorneys with power, subject to clause 6.5: (a) to execute any documents, give any notices or take any other action under or in relation to any Transaction Document; (b) to commence, defend or compromise any legal action in relation to any Transaction Document or Equipment; and (c) to do anything which in the Attorney's reasonable opinion is necessary or expedient to enable the exercise of any right of the Principal under any Transaction Document. This power of attorney is granted for valuable consideration (receipt of which the Agent acknowledges). 7. LIMITATIONS ON AGENT'S AUTHORITY The Agent must not, without the prior written consent of the Principal: (a) exercise any right or discretion, take any enforcement action or give any consent under a Leasing Agreement or a Security except as contemplated by this document; (b) accept the repudiation by a Lessee of a Leasing Agreement or agree to terminate a Leasing Agreement; (c) waive, or grant any time for, the performance of any obligation of a Lessee or a Security Provider; (d) agree to any variation of the terms of a Leasing Agreement or a Security; (e) make any representation or warranty on behalf of the Principal; or (f) purport to bind the Principal except in accordance with clause 4. … 14.6 Assignment The Agent may not assign, Encumber or otherwise dispose of or deal with its rights under this document, any Leasing Agreement or any Security without the prior written consent of the Principal."

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