Supreme Court New South Wales

• Medium Neutral Citation: Gilgandra Marketing Co-Operative Limited v Australian Commodity & Merchandise Pty Ltd (in liquidation) & Ors [No. 3] [2011] NSWSC 69
• Hearing dates: 21 February 2011
• Decision date: 22 February 2011
• Jurisdiction: Equity Division
• Before: Slattery J

Decision

See paragraph 29 of judgment

• Catchwords: LIENS - general possessory lien - vendor entitled to exercise right of stoppage in transitu - carriers claim lien for unpaid freight charges, demurrage and legal costs - vendor seeks redelivery and sale of wheat - wheat perishable - urgent sale of wheat required - carriers seek preservation of their claimed lien over the proceeds of sale, to be paid into Court - risk that sale proceeds may not be paid into Court due to circumstances beyond the parties' control - HELD - orders for delivery and sale made - proceeds of sale to be paid into Court - but orders made subject to vendor paying into Court partial security for the carrier's lien.
• Legislation Cited: Civil Procedure Act 2005, s 93; Sale of Goods Act 1923, s 48; Uniform Civil Procedure Rules 2005, s 25.4
• Cases Cited: Allfox Building Pty Ltd v Bank of Melbourne Ltd [1993] ANZ ConvR 380; (1992) NSW ConvR 55-634; Booth Steamship Co Limited v Cargo Fleet Iron Co Ltd [1916] 2 KB 570; Gilgandra Marketing Co-Operative Limited v Australian Commodity & Merchandise Pty Ltd & Anor [administrator appointed] [2011] NSWSC 16; Harvey v McWatters (1948) 49 SR (NSW) 173; Hawkesbury Valley Development Pty Limited v Custom Credit Corporation Ltd (unreported, 7 February 1990, Needham AJ); Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161; Mayfair Trading Company Limited v Dreyer (1958) 101 CLR 428; MCP Muswellbrook Limited v Deutsch Bank (Asia) AG (1988) 12 NSWLR 16; Somes v British Empire Shipping Co Ltd (1860) 8 HL Cas 338; United States Steel Products Company v Great Western Railway [1916] AC 189; Wiatomo Wools (NZ) Ltd v Nelsons (NZ) Ltd [1974] 1 NZLR 484
• Category: Procedural and other rulings
• Parties: Gilgandra Marketing Co-Operative Limited (Plaintiff/Cross Defendant); Australian Commodity & Merchandise Pty Ltd (First Defendant/Cross Claimant); MSC Mediterranean Shipping Company SA (Second Defendant); NYK Line (Third Defendant); MISC Berhad (Fourth Defendant)
• Representation: Counsel: A.C.Casselden (Plaintiff/Cross Defendant); S.A.Wells (First Defendant/Cross Claimant); M.G.McHugh (Second, Third and Fourth Defendants/Cross Claimants); Solicitors: Chris Frawley, Macpherson & Kelley Lawyers Pty Ltd (Plaintiff/Cross Defendant); Simon Morris, Piper Alderman (First Defendant/Cross Claimant); Stephen Thompson, Middletons (Second Defendant); David Coogan, Coogan & Co (Third and Fourth Defendants)
• File Number(s): 2010/236326; 2010/354625

JUDGMENT

1 This is my third judgment in these proceedings. In my second judgment the Court held that Gilgandra Marketing Co-Operative Limited ("Gilgandra") was able to exercise rights of stoppage in transitu in respect of ten contracts to sell wheat to Australian Commodity and Marketing Pty Limited ("Commodity"): Gilgandra Marketing Co-Operative Limited v Australian Commodity & Merchandise Pty Ltd & Anor [administrator appointed][No. 2] [2011] NSWSC 16, delivered on 4 February 2011. The facts that gave rise to Gilgandra's right to exercise rights of stoppage in transitu are set out in the second judgment, which should be read with these reasons. As the second judgment records, all issues between Gilgandra and the three carriers of the wheat, Mediterranean Shipping Co ("MSC"), Nippon Yunscen Kassa Line ("NYK") and Malaysian International Shipping Corporation ("MISC"), raised on their cross claim in the proceedings, were deferred pending the Court's determination of the issues between Gilgandra and Commodity. The cross-claim issues include the existence and quantum of liens claimed by MSC, NYK and MISC ("the carriers") over the wheat the subject of these proceedings. Issues as to the proper form of relief to be granted now arise between Gilgandra and the carriers pending final determination of the issues on the cross-claim. Commodity does not contest the form of orders proposed either by the plaintiff or the carriers.

2 The principal point at issue between Gilgandra and the carriers is whether and how the liens for freight, demurrage charges and costs, which the carriers claim over the wheat should be preserved pending determination of the issues on the cross-claim.

3 The parties have taken quite different positions on the appropriate form of relief that should now be granted. The carriers argue that Gilgandra's exercise of its rights of stoppage in transitu is subject to the operation of the carrier's liens to recover their freight charges: United States Steel Products Company v Great Western Railway [1916] AC 189, per Lord Parker at 206 and Booth Steamship Co Limited v Cargo Fleet Iron Co Ltd [1916] 2 KB 570 per Lord Reading CJ at 583 per Lord Warrington LJ at 589 and per Scrutton J at 601-603.

4 The carriers submit that the appropriate form of orders would require Gilgandra to bring into Court the total amount of the carriers' claims for freight demurrage and costs, as a condition of the Court granting relief requiring the carriers to redeliver the wheat to Gilgandra. The wheat is still in the carriers' possession at Chittagong, Bangladesh. The total of the charges presently claimed by the carriers are:-

"Total freight	US$213,507.16
Total detention	US$592,980
Total legal costs to date	US$155,000
Total estimated future costs	US$190,000
Total	US$1,151,487.16"

5 In support of their position the carriers have formulated a set of orders which at least arguably (this is the way that Gilgandra has taken them) require Gilgandra to concede the validity of the carriers' liens.

6 But Gilgandra disputes that the carriers' liens are maintainable against it upon its exercise of its rights of stoppage in transitu. Gilgandra says the liens are not maintainable, but if it is, the quantum of the lien should not include demurrage charges, and legal costs, in addition to freight charges. Gilgandra submits that the Court is exercising jurisdiction under Uniform Civil Procedure Rules 2005, r 25.4.

7 Uniform Civil Procedure Rules, r 25.4 provides as follows:-

"25.4 Disposal of personal property

If, in proceedings concerning property (other than land) or in which any question may arise as to any property (other than land), it appears to the court that:

(a) the property is of a perishable nature or is likely to deteriorate, or

(b) for any other reason it is desirable that the property should be sold or otherwise disposed of,

the court may make an order for the sale or other disposal of the whole or any part of the property by such person, and in such manner, as the court may direct."

8 Gilgandra's submission is that given the perishable nature of the wheat which is now being held in Bangladesh for between 8 and 10 months and given the looming potential for action by the purchasers and storers of the wheat in Bangladesh, that it would not be appropriate to order Gilgandra to provide security for the carriers in advance of the sale of the wheat.

9 The point now at issue may be stated in commercial terms. Provided the proceeds of sale of the wheat are sufficient, Gilgandra should be able to discharge the carriers' liens out of those sale proceeds when received. But the risk exists that if the wheat is sold in Bangladesh and the Court directs that the proceeds of sale be paid into Court that the monies may be intercepted before they reach this jurisdiction. The carriers say that they should not be forced by the Court's orders to accept the risk of the loss of their liens from such an event. They say that being required to participate in the sale of the wheat risks any lien over the proceeds of sale becoming worthless. The carriers submit that the only solution to this problem is for Gilgandra to provide security to the equivalent value of the liens before the carriers are required to participate in the sale of the wheat.

10 This argument about the issues of the form of relief has come on at very short notice. The parties mentioned the matter before the Court on 10 February 2011, they filed written submissions on Wednesday, 16 February 2011, and then short argument took place before me yesterday, 21 February 2011. The parties desire a speedy finalisation of the position so that they will have commercial certainty. It is acknowledged on both sides that the evidence is less than fully complete.

11 The Court here faces the same kind of interlocutory dilemma as commonly arises between a mortgagor and a mortgagee seeking to exercise a power of sale. As between Gilgandra and Commodity these proceedings are now complete. But the respective rights of Gilgandra and the carriers on the cross-claim are yet to be resolved. The Court is dealing with the undetermined rights of each against the other. It is acknowledged on all sides that it is of critical importance at this stage that taking steps to sell the wheat in Chittagong before it deteriorates any further is imperative. I indicated yesterday that I would give judgment today on the state of the evidence presented so that the parties would have certainty. I am currently hearing another matter and it has been necessary to give this judgment after normal court hours.

12 In my view, the correct analytical approach in these circumstances is: to examine the nature and validity of the carriers' claim to the liens for freight and other charges; to examine whether the circumstances of the case require payment into Court to preserve the carriers' liens, while the wheat is being sold; and, then determine whether the operation of Civil Procedure Act 2005, s 93 and Uniform Civil Procedure Rules, r 25.4 present discretionary considerations that would modify in this case the requirement for security that otherwise might apply.

Stoppage in Transitu and the Carriers' Liens

13 The law is clear. The exercise by an unpaid vendor of rights of stoppage in transitu is to facilitate the vendor asserting its lien for unpaid purchase money; and, that a carrier's lien for money due for the carriage of and other charges upon the goods in question would take precedence, apart from any agreement, over any vendor's lien: United States Steel Products Company v Great Western Railway [1916] AC 189. The reason for this precedence derives from the origins of the right of stoppage in transitu in the law merchant. The recognition of the right of stoppage in transitu in English law was first that taking actual possession of the goods was necessary to constitute a valid stoppage in transitu. But later it was held that taking actual possession by the vendor was not necessary and that a claim was sufficient. This relaxation occurred as the Courts leaned in favour of the power of the consignor to stop goods in transitu. The method of effecting the right of stoppage by taking actual possession of the goods, or by giving notice of the claim to the carrier on other bailee in whose possession the goods are now preserved in Sale of Goods Act 1923, s 48. Lord Reading CJ explained in Booth Steamship Co Limited v Cargo Fleet Iron Co Ltd [1916] 2 KB 570 at 583 the rationale for the requirement that an unpaid vendor must recognise a carrier's lien as a condition of exercising a right of stoppage in transitu:-

"The statute thus gives two ways of effecting stoppage. The first is by taking actual possession, and the second by notice of claim, the latter, as Lord Kenyon observed, being a relaxation of the old rule that required actual possession to be taken. To get actual possession of goods carried the vendor must discharge the shipowner's lien (if any) for freight. Therefore satisfaction of the lien for freight must have been and still is an integral part of the stoppage of goods in transitu by the method of taking actual possession. Actual possession can only be taken of goods in transit when the goods arrive; by s. 45, sub-s. 1, they are deemed to be in transit until the buyer takes delivery - until that time there is a right in the unpaid vendor to resume the possession on arrival if he can. If the stoppage is by means of notice given, the vendor, upon arrival of the goods, is in the same position as if he had taken actual possession of the goods - that is to say, he is the sole person entitled, and, as I think, obliged, to take or order delivery of the goods. He cannot get actual possession unless he is ready and willing to discharge the lien for freight. I am therefore of opinion that a notice of stoppage given during the transit, and persisted in upon arrival of the goods, involves an obligation upon the vendor to discharge the shipowner's lien for freight, that is, to pay the freight due in respect of the goods carried. To get the goods he must free them from the lien."

14 Lord Reading CJ and Warrington LJ in Booth Steamship Co Limited v Cargo Fleet Iron Co Ltd [1916] 2 KB 570 also dealt with the issue of the carrier's claim for freight charges. But Scrutton J in that case went further and explained the rationale for the recovery of demurrage charges incurred by the carrier in addition to the freight charges. He did so in the following lengthy and at times colourful passage:-

"The goods then arrive at the contract place of delivery where, if there had been no stop, they would have been delivered to the consignee, subject to the shipowner's lien for freight. If the shipowner exercises that lien against a demand by the consignee, he will have to bear the cost of exercising the lien - Somes v. British Empire Shipping Co.(1860) 8 HL Cas 338 - and provide for the safe custody of the goods while he keeps his hand on them; and he cannot sell the goods. But supposing he is told not to deliver to the consignee by an unpaid vendor who has the right to order delivery to himself and does not, on what principle can he be compelled to retain and provide for the custody of the goods after he has arrived at the contract place of destination, or is ready to go there, if any one will take delivery? What is he to do with the goods? Is his ship to go sailing round the world, like the "Flying Dutchman," on an endless, hopeless voyage for ever carrying goods that no one will take? Is his ship to stay at the port of destination till it is convenient to some one to take the goods from her? Why, if he discharges the goods, must he pay duties which by the contract should be paid by the person taking delivery, and provide for the custody of the goods, as here, for an uncertain time, on the chance that some one will some day recoup him? And does it make any difference, when he is stopped by the unpaid vendor from tendering the goods to the consignee, that, if he had been permitted to tender them, he might have been in similar difficulties if he chose to assert his lien for freight? He is prevented from having the chance of offering the goods to the consignee.

It is said that both the shipowner for his freight and the unpaid vendor for his price have to look to the goods and must take their chance. This is not quite exact, as the unpaid vendor can sell the goods, and the shipowner cannot; but, further, the unpaid vendor is claiming to exercise his lien through the shipowner, and, if he must bear the expense of exercising his own lien, cannot make the shipowner bear the expense of exercising the vendor's lien for the benefit of the vendor. It is also suggested that the shipowner makes his contract subject to the possibility of an unpaid vendor stopping in transitu, and must put up with the consequences. But, if I am right that the unpaid vendor cannot stop the transit, but only the delivery to the vendee, it follows that he cannot prolong the transit or the shipowner's obligation to hold the goods after the shipowner is ready to make delivery at the end of the transit. This question must be considered, not only from the point of view of the shipowner's claim for freight for the transit, but from the point of view of his claim for demurrage or damages for detention at the end of the transit. Freight is now frequently paid in advance; but when the shipowner arrives at the end of the transit, and is forbidden by the unpaid vendor to deliver to the consignee, what is his position as to custody of the goods if the unpaid vendor refuses to give positive instructions as to their delivery? What is the shipowner to do? If he keeps the goods in his ship, ought not the person who compels him to do so to pay the demurrage? If he lands the goods in a warehouse to keep the unpaid vendor's lien, ought not the person for whom the lien is exercised to bear the expense of using the lien? And why is the shipowner to be compelled to take any responsibility for the goods after his contract voyage is over? Surely it is for the person who stops the transit and desires to exercise his lien to take the goods and exercise his lien for himself. And must he not, before he does so, satisfy any liens already existing?

Further, in my view, the shipowner has fulfilled his contract when he has reached a point where the consignee or person taking delivery is bound to do something, and is not bound himself to incur further expense when no one will take delivery. He is not bound to go into a dock and incur dock dues if he is told that the consignee will not take delivery even if he goes in. He was not in this case bound to send the goods up from Tutoya, when no one would pay the duties without which the goods could not be landed, and he was not allowed by the vendor to deliver the goods to the contractual consignees.

On these events happening the shipowners had, in my view, no further obligation to provide for the goods. The unpaid vendors had the right to stop delivery to the consignees and the right to require delivery at the port of destination to themselves. In my view this imposed on them a corresponding duty to take delivery from the shipowners, if they continued to prevent them from delivering to the consignees. The vendors are not obliged to perform this duty, for they may release the goods and withdraw the stop before the end of the transit, but if they do not withdraw the stop, but insist on it, in my opinion they substitute themselves for the original consignees and must take delivery. They can only do so on the terms of discharging the shipowners' lien for freight, and, as these vendors are quite solvent, the damages for their failing to take delivery will be at least the amount of freight the shipowners would have received if the vendors had fulfilled their obligation and taken delivery."

15 There is a basis for the carriers to claim demurrage charges here. In my opinion based on the reasoning of Scrutton J, there is merit in the carriers' argument that its lien for freight and demurrage, if established, would take precedence over the vendor's lien, which is re-established by Gilgandra's exercise of its right of stoppage in transitu. Of course when the cross-claim was served it will still be necessary for the carriers to establish the basis of their claimed liens. But their carriage of the subject goods from Sydney to Chittagong is not in dispute nor is the carriers' present requirement to store the goods in Chittagong.

16 Upon final hearing of the cross-claim though, three aspects of the claim will be debatable even if a prima facie entitlement to a lien is established: the claim for demurrage; the claim for costs; and, the quantum claim. I understand from submissions put on behalf of Gilgandra that all these issues are in dispute.

17 The claim for the liens on account of demurrage is more contentious than the claim for a lien on account of freight. Neither of the judgments of Lord Reading CJ nor Warrington LJ go quite so far as that as Scutton J in Booth Steamship Co Limited v Cargo Fleet Iron Co Ltd [1916] 2 KB 570 to justify the priority of the carriers' claims for demurrage over the vendor's lien, in addition to the carriers' claims for freight. The principles discussed in United States Steel Products Company v Great Western Railway [1916] AC 189 and the Booth Steamship Co Limited v Cargo Fleet Iron Co Ltd [1916] 2 KB 570 have received very little analysis in the cases since 1916. United States Steel Products Company v Great Western Railway [1916] AC 189 was considered in Wiatomo Wools (NZ) Ltd v Nelsons (NZ) Ltd [1974] 1 NZLR 484 but in a way that does not address the present issue before the Court. In the general law of liens the principle is clear that a person having a lien on a chattel who keeps it for the purpose of enforcing his lien cannot make any claim against the owner for the cost of so keeping it: Somes v British Empire Shipping Co Ltd (1860) 8 HL Cas 338. On my limited review of the available authority in the time that I have had to consider this matter I regard the issue of full recovery of demurrage charges as one ripe for debate at final hearing of the cross claim. Even if the lien is established, scope exists for debate about whether it will extend to demurrage charges.

18 None of the authorities referred to seem to justify the lien extending to provide security for the carriers' legal costs in the event they were also successful in the proceedings. In the circumstances I will decline to now act on the basis that the carriers' liens extended to cover such costs.

19 Gilgandra also submits that the charges claimed are excessive. The carriers have served evidence as to the charges but a full contest on this issue has not taken place. Whether or not the charges are excessive is a matter relevant to the next issue for consideration.

Providing Security as a Condition of Relief

20 Gilgandra's position is somewhat analogous to that of a mortgagor seeking an interlocutory restraint against a mortgagee exercising a power of sale. The analogy has limitations because of the more limited nature of the security provided by a possessory lien. But it is nevertheless useful. The general rule is that a mortgagee will not be restrained from exercising a power of sale merely because the amount due is in dispute or because the mortgagor has commenced a redemption action or because the mortgagor objects to the manner in which the sale has been or is being arranged; in such cases a mortgagee will be restrained only if the mortgagor pays the amount claimed into Court unless, on the terms on the relevant mortgage, the claim is clearly excessive: Harvey v McWatters (1948) 49 SR (NSW) 173, Inglis v Commonwealth Trading Bank of Australia (1972) 126 CLR 161, MCP Muswellbrook Limited v Deutsch Bank (Asia) AG (1988) 12 NSWLR 16 and Hawkesbury Valley Development Pty Limited v Custom Credit Corporation Ltd (unreported, 7 February 1990, Needham AJ) and see also (1992) 66 ALJ 863.

21 Exceptions to this general rule exist in cases where the validity of the mortgage is in issue, or the present availability of the power of sale is in issue. Cases such as Allfox Building Pty Ltd v Bank of Melbourne Ltd [1993] ANZ ConvR 380; (1992) NSW ConvR 55-634 suggest that where a mortgagor seeks to challenge a threatened or actual sale by the mortgagee, that if the challenge is based upon the non existence or lack of present availability of a power of sale, what is being invoked is Equity's auxiliary jurisdiction (through an injunction to restrain interference with one's legal right); and, in such circumstances the plaintiff is not ordinarily required to "do equity" by bringing money into court: Mayfair Trading Company Limited v Dreyer (1958) 101 CLR 428. This is to be distinguished from a challenge to a mortgagee's exercise of a vested and presently exercisable power of sale, under the duties equity imposes on the mortgagee.

22 Gilgandra's case here challenges the precedence of the carriers' liens over its vendor's lien. It seems to me that Gilgandra (and the carriers) are arguably invoking Equity's auxiliary jurisdiction to protect their legal lien, not Equity's exclusive jurisdiction. Gilgandra seeks to assert its right to possession of the wheat in competition with the carriers' claim to have legal liens. This is not clearly a case where equity should require Gilgandra to do equity as the price of obtaining relief. But on the other hand the basis on which Gilgandra says that its vendor's lien is not subject to the carriers liens is obscure at this stage of the proceedings. Equally, although Gilgandra alleges that the quantum of the lien claimed is excessive, it cannot yet be said on the evidence before me that it is obviously wrong. These cases do emphasise though that even where the rule applies, requiring a mortgagor to pay the amount claimed into Court as a condition of equitable relief, the rule is applied flexibly in the Court's discretion.

Preserving the Subject Matter of the Proceedings

23 But in my view the most pressing issue here is the perishable nature of the wheat the subject of these proceedings. The present situation calls for rapid action to sell the wheat before it loses any more value.

24 The Court is requested to make orders to facilitate the sale of the wheat and to deal with the proceeds of sale pending resolution of the issues on the cross-claim, because the property is perishable. This is a clearly desirable course. The discretionary jurisdiction of UCPR rule 25.4 is attracted here as the orders sought and made also include an order for sale of the wheat. The jurisdiction is appropriately exercised here because it is ancillary to Gilgandra's claim to exercise a right of stoppage in transitu and a power of re-sale and is ancillary to the carriers' claims for liens for freight and other charges on the cross-claim.

25 The decision to order sale and the terms of the sale are in the Court's discretion. It is unacceptable in the formulation of such orders for the carriers to have to entirely take the risk of loss of their liens. It is also important to facilitate the early sale of the wheat to reduce the risk of further associated loss of value. It is equally unacceptable for orders to be made that foreclose the rights of either the carriers or Gilgandra to make and to oppose one another's allegations on the cross-claim. Nothing in the orders to be made should decide issues on the cross-claim.

26 As the earlier parts of these reasons show, I am mindful of the fact that the strongest part of the carriers' claim for liens relates to freight charges and the weakest part to legal costs. I also have regard to the fact that the Court can flexibly mould a remedy to protect the competing rights of the parties in this situation. Protection of the carriers' liens is important. So is the protection of the value of the vendor's lien that Gilgandra seeks to exercise sooner, rather than later.

27 The balancing of these considerations in my view calls for the Court to require as a condition of granting relief that Gilgandra be required to pay into Court part of the value of the liens claimed by the carriers, namely the sum of $450,000. This sum must be paid into Court before the carriers are required to give up possession of the wheat and undertake the various other steps that will facilitate the sale of the wheat. Once the wheat is sold and the proceeds remitted to this jurisdiction and paid into Court, Gilgandra may apply for the release of the $450,000 back to it. It may be that Gilgandra wishes for the $450,000 to be provided by way of security in some alternative form. If so I will grant liberty to apply in respect of the form and the performance of the orders.

Conclusions and Orders

28 There has been much debate as to the form of the orders that should be made in these proceedings. In the circumstances it is appropriate that I publish in this judgment the form of orders that I propose to make in draft in case there are any mechanical aspects of their implementation that the parties wish to raise with me before they are made. The orders are set out below. [The draft orders were then set out in the judgment]

Final Form of Orders

29 A short time later the Court made the following final form of orders.

30 The Court:

1. Grants leave to proceed with the proceedings under section 500(2) of the Corporations Act 2001 (Cth).

2. Declares that the plaintiff was and is entitled as an unpaid seller to exercise the right of stoppage in transitu under sections 42(1)(b) and 46 of the Sale of Goods Act 1923 (NSW) over the wheat in the containers described in Schedule 1 of these orders ("Wheat").

3. Declares that the plaintiff is entitled to resume actual possession of the Wheat, for the purposes of re-sale under sections 46 and 48 of the Sale of Goods Act 1923 (NSW).

4. Directs that the second, third and fourth defendants exercise reasonable endeavours to disclose and notify to the plaintiff's solicitors the present location of the Wheat and all details regarding any outstanding charges or expenses relating to the Wheat, within 2 days of these orders.

5. Directs that the second, third and fourth defendants or their agents provide their written confirmation of their consent to the plaintiff's inspection of the Wheat as soon as practicable.

6. Upon the plaintiffs undertaking to pay into Court the amount of $450,000 on account of freight and other charges claimed by the second, third and fourth defendants:

(1) Orders subject to order 6A and pursuant to section 48(2) of the Sale of Goods Act (1923) NSW that the second, third and fourth defendants do all things that are necessary to deliver the Wheat to or according to the directions of the plaintiff, including:

(a) issuing sea waybills or non negotiable (straight) bills to Gilgandra Marketing Co-Operative Limited, or to any other person or entity at the plaintiff's direction;

(b) stating the weights (said to contain) of each of the containers on the bills of lading; and

(c) giving consent to any third party currently in possession of the Wheat as necessary to release the Wheat to Gilgandra Marketing Co-Operative Limited.

(2) Order that all the second, third and fourth defendants' expenses of complying with this order be borne by the plaintiff.

6A The Court notes:

(a) that the second, third and fourth defendants as the cross claimants in these proceedings claim to have existing rights to exercise their liens as carriers over the sea waybills and/or the Wheat the subject of order 6(1) but that the plaintiff disputes the existence of those rights; and

(b) that the performance of order 6(1) and (2) will not prejudice:

(i) the second, third and fourth defendants' rights to claim and if established to exercise such carriers' liens against the plaintiff in relation to any proceeds of sale of the Wheat, or

(ii) the plaintiff's rights to dispute the existence of such lien or the claimed quantum thereof.

7. Orders, under rule 25.4 of the Uniform Civil Procedure Rules 2005 (NSW) and section 50(3) of the Sale of Goods Act (1923) the plaintiff, or its agents, sell the Wheat and direct that all net proceeds of sale, or any sum agreed between the plaintiff and the second, third and fourth defendants, be paid into court pending determination of the cross claims or further orders of the court.

8. Upon the payment into Court of the monies referred to in order 7, grant liberty to the plaintiff to apply to have immediately paid out to it security provided pursuant to the undertaking in order 6 hereof.

9. Declares pursuant to section 50(2) of the Sale of Goods Act 1923 (NSW) that any subsequent purchaser of the Wheat, or part thereof, acquires good title to the Wheat, or part thereof, as against the first defendant.

10. Order that the first defendant, by itself and by its servants, agents, officers, and employees (excluding the second, third and fourth defendants for the purpose of these orders only), be permanently restrained from dealing with, selling, encumbering, endorsing any bill of lading, issuing delivery orders or delivering the cargo, containers and bills of lading of the Wheat.

11. Order that the first defendant pay the plaintiff's costs of the proceedings, including all reserved costs, on the ordinary basis.

The Court notes that:

12. The plaintiff is discharged from its undertaking as to damages in relation to the injunction granted by Justice Ball on 23 July 2010 as against the first defendant, by itself and by its servants, agents, officers and employees, (excluding the second, third and fourth defendants until such time as the cross-claims have been determined or until further order of the court).

13. Judgment against the first defendant for damages for any loss occasioned by the first defendant's breach of contract, and any interest thereon, be determined after the plaintiff has sold the wheat and the net proceeds of sale have been paid into court, or until further order of the court.

14. Otherwise grant liberty to apply on 24 hours notice.

In Proceedings No. 2010/354624 (Statutory Demand Proceedings)

1. The Originating Process be dismissed.

2. Each Party to pay their own costs of the proceedings.

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Amendments

02 March 2011 - typographical errors
Amended paragraphs: 1 ,3 and coversheet

Decision last updated: 02 March 2011