FEDERAL COURT OF AUSTRALIA
Reaper v Vrsecky (Trustee), in the matter of Reaper [2019] FCA 565
ORDERS
Applicant | ||
AND: | PETR VRSECKY (AS FORMER TRUSTEE OF THE BANKRUPT ESTATE OF BRETT REAPER) Respondent | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The question of whether an inquiry should be conducted under the former s 179 of the Bankruptcy Act 1966 (Cth) be answered “No”.
2. The Applicant’s application for orders pursuant to the former s 178 of the Bankruptcy Act 1966 (Cth) be dismissed.
3. There be judgment against the Respondent for damages in the sum of $15,000.00 respect of the Applicant’s common law claim.
4. The Respondent is not entitled to recover the damages awarded pursuant to Order 3 out of Mr Reaper’s estate.
5. Each party, if so advised, have leave to file and serve proposed alternative costs orders to those indicatively described at [291] of these reasons, together with submissions limited to three pages, no later than 4.00 pm on Friday 10 May 2019.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
KERR J:
Introduction
1 This is an application brought under the former ss 178 and 179 of the Bankruptcy Act 1966 (Cth) (the Bankruptcy Act) by Mr Reaper together with an associated claim for damages. On 7 March 2013, Mr Reaper had been declared bankrupt pursuant to a sequestration order. The Respondent (the Trustee) had been appointed as the trustee of his bankrupt estate.
2 Prior to his bankruptcy the applicant, together with his partner Ms Sharon Fisher, owned a home at 12 The Esplanade, Narre Warren South, Victoria as joint tenants (the Property). These reasons later explain in more detail the genesis of these proceedings but in short, they arise out of events that occurred in the course of, and following, the Trustee securing possession of the Property on 14 December 2016.
3 In summary, Mr Reaper applies to the Court pursuant to the now-repealed s 178 of the Bankruptcy Act. He alleges that the Trustee took possession of the Property prior to ensuring that the Sheriff’s Office of Victoria (SOV) had performed its obligations under a warrant of possession; that the Trustee did not hold a warrant indorsed by the SOV permitting him to take possession of the Property; that the Trustee breached s 116(2)(b)(i) of the Bankruptcy Act in that the Trustee damaged, lost and discarded personal property belonging to the applicant; that the Trustee breached s 19 of the Bankruptcy Act by incurring unnecessary expenses in the administration of the estate. The applicant further applies to the Court pursuant to previous s 179 of the Bankruptcy Act seeking an inquiry into the conduct of the Trustee in relation to the applicant’s bankruptcy. The applicant seeks an order that the Trustee release to Mr Reaper and Ms Fisher the proceeds of the sale of the Property, plus interest. The applicant claims that the circumstances justify the making of an order that the Trustee be made personally liable.
4 The applicant additionally seeks damages at common-law in respect of losses he asserts he suffered by the Trustee’s then taking possession of his personal property which, whilst in the Trustee’s control, was lost or damaged; costs of and incidental to the seizure of his possessions; exemplary damages for conduct amounting to conscious wrongdoing “in contumelious disregard of the occupants’ rights”; and further or alternatively that, “the costs of and incidental to the events of 14 December 2016 incurred by the Respondent be the amount of award of exemplary damages to the Applicant”.
Commencement of these proceedings not out of time
5 Mr Reaper’s originating application initially was refused for filing by a Registrar of the Court. Mr Reaper sought review of that decision pursuant to s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth). On 21 August 2017 O’Callaghan J ordered that the Registrar’s decision be set aside: see Reaper v Luxton [2017] FCA 949. Thus, while Mr Reaper’s initial application was not accepted for filing until 22 August 2017, it is common ground that he had lodged it on 5 March 2017, within the 60 day time limit for making an application pursuant to the then s 178(2) of the Bankruptcy Act.
Background
Bankruptcy and litigation history
6 Mr Reaper’s bankruptcy arose in the circumstances referred to by Pagone J in Reaper v Baycorp Collections PDL (Australia) Pty Ltd [2014] FCA 13 (Baycorp) at [1]:
… The basis of the bankruptcy was a judgment debt on an amount due to Westpac Banking Corporation (“Westpac”) from Mr Reaper which had been assigned to Baycorp Collections PDL (Australia) Pty Ltd (“Baycorp”). Mr Reaper did not contest, and did not establish, that the assignment was ineffective but contended that the debt was not due by him personally but had been due by a company of which he had been a director which had conducted a business of landscaping. Judgment was entered against Mr Reaper on 27 October 2011 in contested proceedings in the Magistrates’ Court of Victoria for $22,552.40. On 15 May 2012 the Magistrates’ Court dismissed with costs Mr Reaper’s contested application for a rehearing. …
7 In July 2012, a creditor’s petition based on the judgment debt was filed in the then Federal Magistrates Court. On 7 March 2013, a sequestration order was made. The Trustee was appointed as the trustee of Mr Reaper’s bankrupt estate.
8 It is uncontentious that Mr Reaper thereafter vigorously, perhaps even obsessively, pursued his legal rights. He exercised those rights repeatedly to challenge not only his bankruptcy but also the Trustee’s entitlement to take possession of such of his property as had vested in the Trustee.
9 On 16 September 2013 Mr Reaper applied to this Court to have his bankruptcy annulled. That application was dismissed on 28 January 2014 by Pagone J: see Baycorp. Mr Reaper then applied for an extension of time to appeal that decision. On 18 March 2014 the extension of time application was dismissed for want of prosecution. On 30 April 2014 that order was set aside but on 30 April 2014, following a hearing, his extension of time application was dismissed: see Reaper v Baycorp Collections PDL (Australia) Pty Ltd [2014] FCA 426.
10 In the meantime, the Trustee had applied to the Federal Circuit Court of Australia (FCCA) seeking orders for the partition and sale of the Property. The Trustee sought orders that Mr Reaper and Ms Fisher vacate the Property. Mr Reaper and Ms Fisher resisted that application on the basis that the whole or substantially the whole of the Property had been purchased with Mr Reaper’s “protected money” within the meaning of s 116 of the Bankruptcy Act.
11 On 10 February 2015 Judge Burchardt held that the Property had not been bought wholly or substantially wholly with protected money within the meaning of s 116(3) of the Bankruptcy Act, but that the payments Mr Reaper had made since 2007 in respect of a particular mortgage were from protected money. His Honour concluded that, as a result, half of the increase in the net equity of the Property since 2007 was attributable to protected payments made by Mr Reaper, and half attributable to Ms Fisher: see Vrsecky v Reaper & Anor [2015] FCCA 32 at [73]. His Honour made orders that a valuation of the Property be obtained, and listed the Trustee’s application for further hearing.
12 Judge Burchardt delivered ex tempore reasons in Vrsecky v Reaper & Anor (No. 3) [2015] FCCA 2807 on 18 September 2015. His Honour made the following declarations and orders, as amended on 9 October 2015 pursuant to r 16.05(2)(e) of the Federal Circuit Court Rules 2001 (Cth) (FCCA Rules):
THE COURT DECLARES THAT:
1. 50% of the property described in Certificate of Title Volume 10609 Folio 987 and known as 12 The Esplanade, Narre Warren South in the state of Victoria (‘Property’) vests in the [Trustee] pursuant to section 58, 115(1) and 116(1) of the Bankruptcy Act 1966 (Cth), as and from the date of the commencement of the bankruptcy of [Mr Reaper].
THE COURT ORDERS THAT:
2. Within 90 days of the making of these orders, [Ms Fisher] has the option to purchase [Mr Reaper’s] interest in the Property for $96,000.
3. Failing [Ms Fisher] executing the option in Order 2 above. Pursuant to section 234D of the Property Law Act 1958 (Vic) as applied by section 79(1) of the Judiciary Act 1903, the land and buildings comprising the Property be sold by [the Trustee] with all the obligations and privileges pertaining (including signing for and on behalf of [Mr Reaper] in any Contract of Sale of Land and any Property Law Act 1958 form of Transfer and determining the price at which the Property is to be sold).
4. For the Purpose of giving effect to Order 3, [Ms Fisher] do all such things, acts and deeds and sign all documents to list for sale and sell the Property, and for that purpose, including but not limited to the following:
(a) agree on a real estate agent(s) to be appointed to facilitate a sale of the Property within 7 days of being requested to do so by the [Trustee]. With nomination by the Real Estate Institute of Victoria in default of agreement;
(b) Fix the sale or reserve price at which the Property is to be listed for sale as suggested by the appointed real estate agent at not more than the valuation provided in these proceedings;
(c) deliver a signed Property Law Act 1958 form of Transfer within 24 hours of being requested to do so by the [Trustee];
(d) maintain the Property in a clean and presentable manner as required for the proper and effective marketing of the Property; and
(e) allow for an inspection of the Property on 24 hours notice of a request made by the Applicant or agent for sale.
5. On default of any matter listed in Order 34, the [Trustee] shall have power to execute any document reasonably required for the purpose of selling the Property on [Ms Fisher’s] behalf.
6. [Mr Reaper] and [Ms Fisher] provide vacant possession of the Property on or before 30 days after the date of failing to execute the option described in Order 2.
7. The Cross-Claims filed on 12 November 2014 and 27 November 2014 are dismissed.
(Emphasis in original.)
13 Mr Reaper and Ms Fisher appealed the decision of Judge Burchardt of 24 August 2015. Orders 3-6 were stayed pending the determination of the appeal.
14 On 12 May 2016, Davies J dismissed that appeal and allowed a cross-appeal made by the Trustee that Mr Reaper’s share of the increase in the Property’s value since its purchase should be apportioned pro-rata between Mr Reaper’s protected money and the balance of the estate that had vested in the Trustee: see Reaper v Vrsecky (Trustee) [2016] FCA 509. The orders of the FCCA set out above were varied as follows:
Paragraph 2 of the orders of Burchardt J made on 18 September 2015 and amended on 9 October 2015 be set aside and its place, order that within 90 days of the making of these orders, [Ms Fisher] has the option to purchase [Mr Reaper’s] interest in the property described in Certificate of title Volume 10609 Folio 987 and known as 12 The esplanade, Narre Warren South in the State of Victoria, for $221,635.
15 The balance of the orders made by Judge Burchardt were not disturbed.
16 Mr Reaper and Ms Fisher then applied to the High Court of Australia for special leave to appeal Davies J’s decision. Their special leave application was dismissed on 15 August 2017: see Reaper v Vrsecky [2017] HCASL 168.
17 Mr Reaper had also filed a second application for an extension of time to appeal the decision of Pagone J in Baycorp dismissing his application for an annulment of his bankruptcy.
18 On 26 May 2016 Davies J dismissed that application: see Reaper v Baycorp Collections PDL (Australia) Pty Ltd [2016] FCA 579. Her Honour set out the background to Mr Reaper’s bankruptcy and to the litigation that had been commenced by Mr Reaper in that regard at [2]-[3]. At [21]-[22] her Honour stated:
21 Mr Reaper’s written submissions made other serious and wholly unsubstantiated assertions of fraud in relation to the material relied upon by the respondents in the annulment application, all of which was directed at seeking to challenge the debt claim on which he was bankrupted. The assertions lacked any evidential foundation, and were totally unmeritorious. They should not have been made and this judgment is a record of the Court’s disapproval of the unjustified attacks on the respondents.
22 This application in substance is yet another attempt by Mr Reaper to re-litigate matters which have been finally determined against him, though Mr Reaper continues not to accept this in wilful disregard of the prior decisions of the Court. It should be clear to Mr Reaper by now that he cannot continue to claim that he has no liability to Baycorp Collections. He is bound by the Magistrates’ Court order which is a final order and cannot be reopened. This latest application is both completely misconceived and an abuse of process. The application must be dismissed.
19 On 13 September 2016, Mr Reaper applied to the FCCA seeking to stay the orders of Judge Burchardt as amended on 9 October 2015, or alternatively to restrain the Trustee from acting on those orders.
20 On 22 September 2016, Judge Wilson dismissed that application: see Baycorp Collections PDL (Australia) Pty Ltd v Reaper [2016] FCCA 2458. I note his Honour’s comments at [24]:
… It is readily apparent that Mr Reaper’s purpose in engaging in ongoing skirmishing with the trustee is to exhaust the trustee’s willingness to pursue the trustee’s rights against Mr Reaper as well as the trustee’s available funds to do so. It must be remembered that Mr Reaper is an undischarged bankrupt. The trustee is an officer of the court charged with performing the public duties conferred upon him under the Act. In the exercise of my discretion to grant or refuse the relief Mr Reaper seeks, it is relevant for me to take into account Mr Reaper’s conduct in engaging in the procedural tactics and skirmishing in which he is currently engaging when brining an array of unsuccessful applications and when he continues to make unjustified attacks on the respondents, notwithstanding Davies J’s express disapproval of that conduct.
21 It will be recalled that Order 2 of Judge Burchardt’s orders (as amended by Davies J) provided that Ms Fisher have 90 days from 12 May 2016 in which she might exercise the option to purchase the Trustee’s interest in the property. Order 6 required, should that option not be exercised, that Mr Reaper and Ms Fisher give the Trustee vacant possession of the property within 30 days thereafter. It is uncontentious that Ms Fisher did not exercise her option within 90 days. The further 30 day period during which she and Mr Reaper were to give the Trustee vacant possession of the Property expired on 9 September 2016. Mr Reaper and Ms Fisher did not give the Trustee vacant possession of the Property by that time. They continued to reside at the Property.
22 The Trustee therefore applied to the FCCA for a warrant of possession with respect to the Property. A warrant was issued out of the FCCA on 23 September 2016 (the Warrant).
23 On 5 October 2016, Mr Reaper lodged an application for leave to appeal Judge Wilson’s decision of 22 September 2016. On 2 December 2016 Collier J dismissed his application for leave to appeal: see Reaper v Baycorp Collections PDL (Australia) Pty Limited [2016] FCA 1454.
24 On 6 December 2016 Mr Reaper applied to the FCCA seeking to stay the Warrant. His application was dismissed on 9 December 2016: see Vrsecky as Trustee of the Bankrupt Estate of Reaper v Reaper & Anor [2016] FCCA 3278. Judge Wilson delivered ex tempore reasons for decision in which, in their later published form, he noted at [2] that counsel for the Trustee had informed the court that execution of the Warrant was imminent. His Honour observed at [9] that “Mr Reaper has enjoyed the very considerable advantage of the merits of his case being considered from a number of different angles by a large number of different federal judges.”
The execution of the Warrant and the removal of the former occupants’ belongings
25 Although Mr Reaper and Ms Fisher had continued to reside at the Property beyond 9 December 2016, they appear eventually to have recognised that that position had become unsustainable. Ms Fisher gave uncontradicted evidence in these proceedings she had applied for multiple rental properties on the couple’s behalf. Ultimately she had been successful. On their behalf, on 13 December 2016, she had entered into a rental agreement for a residential property. Ms Fisher and Mr Reaper picked up the keys to their new home on the morning of 14 December 2016. They moved some of their possessions and their two dogs to their new residential property that morning.
26 Notwithstanding his denial, I find that Mr Reaper fully expected the Trustee would execute the Warrant later that day. I base my finding on an email that had been sent on 13 December 2016 by an acting Sergeant of the SOV to the Trustee’s solicitor in evidence in these proceedings. It was in the following terms:
Just needing to make sure that the agent has a letter of authority that we are able to see tomorrow. It needs to show that they are acting on behalf of the plaintiff to take possession of the property. I start my shift at 11am but will have my phone on earlier in the morning. Spoken to Brett Reaper and he doesn’t seem very happy but he knows that it is definitely going ahead tomorrow, so we will see how it all goes.
Having regard to the date of that email and its reference to the intention of the SOV to take possession of the property “tomorrow”, I reject Mr Reaper’s explanation that although he had had such a conversation, it had taken place on a much earlier occasion. That explanation is implausible. Mr Reaper’s and Ms Fisher’s conduct in taking their two dogs to their new residence on the morning of 14 December 2016 is consistent with them not wanting their pets to be affected by the execution of the Warrant.
27 However, for reasons that remain unexplained, neither Ms Fisher nor Mr Reaper advised the Trustee that they had secured alternative accommodation and had begun to move out of the property.
28 The SOV attended the Property on the afternoon of 14 December 2016 to execute the Warrant. The Trustee did not attend but a Mr Wayne Eddy, the principal of WE Valuation Services, was present as the Trustee’s agent. No one was home at the Property at the time. Mr Reaper’s uncontradicted evidence was that he and Ms Fisher were attending a medical appointment in Brunswick. The evidence establishes that entry was effected by the SOV and possession of the Property was passed to the Trustee. Mr Eddy then changed the locks. It is not in dispute that when the Trustee took possession of the Property, most of its former occupants’ belongings remained in the Property. Mr Reaper did not put to Mr Eddy in cross examination that he ought to have concluded from the appearance of Mr Reaper’s and Ms Fisher’s possessions that the couple had already begun to move out.
29 Not having been advised that Mr Reaper and Ms Fisher were seeking or had secured alternative accommodation, the Trustee understandably proceeded on the expectation that Mr Reaper and Ms Fisher were still residing at the Property. In that regard he had devised a pre-determined plan that, upon his obtaining possession of the Property, he would not permit Mr Reaper or Ms Fisher to re-enter even to remove their personal possessions. Mr Vrsecky’s evidence was that he took that position because of a previous bad experience when he had let a bankrupt re-enter after taking vacant possession of the bankrupt’s home. The bankrupt’s conduct after re-entering had caused him considerable difficulties in his administration of the estate. Consistent with his pre-formed intention, the Trustee directed his agent, Mr Eddy, to engage subcontractors before the Warrant was executed so as to provide security for the premises and to prevent Mr Reaper’s re-entry. He directed Mr Eddy, upon his gaining entry to the Property, to list the occupant’s personal possessions and arrange for their removal to storage. It is uncontentious that Mr Eddy was acting as the Trustee’s agent when he subcontracted with Corsec Security (Corsec) to provide security services. Corsec supplied security guards on a shift basis at the Property from the time of the execution of the Warrant on 14 December 2016 and thereafter until the former occupant’s personal possessions had been removed. It is also uncontentious that Mr Eddy was acting as the Trustee’s agent when he later engaged AA Furniture Removals (AA) to pack and transport the former occupants’ possessions into storage.
30 Mr Reaper gave evidence that when he had returned home on 14 December 2016 a security guard at the Property had informed him that he had been locked out. That is not in dispute. I find Mr Reaper was denied access to the Property. The security guard gave Mr Reaper a contact number for a Mr Ben Conrad of “PKF”. It is uncontentious that Trustee worked with or in association with a business known as “PKF”.
31 Mr Eddy gave evidence that he had been instructed by the Trustee to list, document, and arrange the removal of any remaining belongings of the former occupants and place them in storage. He gave evidence that on the afternoon of 14 December 2016 he systematically had taken photographs of the contents of each room. He had later produced an “Asset Listing Report” (WE Listing Report) from the notes and photographs he had taken to catalogue the former occupant’s belongings as had remained at the Property at that time. The WE Listing Report is an annexure to both Mr Reaper’s first affidavit of 1 March 2017 (BVR2) and Mr Vrsecky’s affidavit of 22 November 2017 (PV16). It is self-evident that the WE Listing Report is not a detailed inventory.
32 Although the Trustee had appointed Mr Eddy as his agent to implement his instructions, it is clear that Mr Eddy’s personal involvement in the process beyond 14 December 2016 was quite limited. Once he had taken photographs on the afternoon of 14 December 2016 in preparation for drawing up the WE Listing Report described above, Mr Eddy’s evidence was that, with the possible exception of the morning of 19 December 2016 (when he may have attended the Property in order to hand over the keys to allow access to it) he did not again attend the Property. He engaged Mr Pearson to supervise AA’s packing and removal of the former occupants’ possessions.
33 Mr Reaper’s evidence is that he had made a number of attempts to contact Mr Conrad and the Trustee following the attendance of the SOV in order to arrange access to the Property to permit collection of his and Ms Fisher’s belongings. He had called both Mr Conrad and Mr Vrsecky (the latter on his mobile phone) and had left many messages asking them to call him back. His phone calls had gone unanswered.
34 Mr Vrsecky by contrast gave evidence that a member of his staff had received one call from Mr Reaper on the morning of 15 December 2016. On that occasion Mr Reaper had demanded access to the Property within an hour and a half to enable him to begin removing his possessions. Consistently with Mr Vrsecky’s instructions, the staff member had told Mr Reaper that he would not be permitted to re-enter the Property. Mr Reaper had become abusive. Mr Vrsecky deposed that he had not received any messages from Mr Reaper after that.
35 It is not necessary to resolve the inconsistency. Nothing turns on it. Neither Mr Reaper nor Ms Fisher suggest that in any message they informed the Trustee (or any of his staff or agents) that they had secured a new residential rental property or that they wanted their belongings to be delivered there. Mr Reaper does not suggest he communicated anything that might have altered the Trustee’s resolve or understanding of his and Ms Fisher’s circumstances.
36 That noted, I am also satisfied that, however motivated, neither the Trustee nor Mr Eddy (or Mr Conrad or any of the Trustee’s staff on his behalf) made any attempt after securing possession of the Property to enquire of Mr Reaper or Ms Fisher as to what arrangements they might want the Trustee to put in place to more conveniently facilitate them gaining access to their personal possessions. No submission was made to suggest otherwise.
37 On 19 and 20 December 2016, as had been arranged by Mr Eddy, a team from AA attended the Property to pack and remove the former occupants’ belongings. Exactly what happened over those two days is the subject of significant dispute. I discuss that in more detail below. However, it is uncontentious that Mr Eddy did not provide AA with an inventory of what they were to pack. Nor did Mr Pearson. It is also not in dispute that the task of packing and removal took longer than had been anticipated. The volume of chattels to be removed required a third truck to be ordered and AA’s uploading of Mr Reaper’s and Ms Fisher’s possessions was not completed until late on 20 December 2016. Necessarily that meant that a considerable body of Mr Reaper’s personal possessions was left at or in the Property overnight on 19 December 2016.
38 It is not in dispute that after packing, AA transported Mr Reaper’s and Ms Fisher’s personal possessions to their depot in Thomastown where they were unloaded and placed into storage.
39 On 22 December 2016 Madgwicks, the Trustee’s then solicitors, sent an email to Mr Reaper and Ms Fisher to notify them that their belongings were available for collection at AA Furniture Removals. They were advised that AA would hold their property until 20 January 2017. Madgwicks’ email advised Mr Reaper and Ms Fisher that if their possessions had not been collected by that time, or additional storage arrangements made, their belongings would be destroyed.
40 Ms Fisher gave evidence that Madgwicks’ email had been sent less than four hours before AA’s storage facility was due to close for the Christmas break until 4 January 2017.
41 In any event, neither Mr Reaper nor Ms Fisher was able to read that email at the time. Ms Fisher gave unchallenged evidence that the computer she used for email had been left at the Property. She thus had had no access to it. Her computer had been set up to recognise her login without her password. Without access to her computer, she needed her password to access her email account. She had made many attempts to recall her password. Her failure to correctly recall her password had led her to be locked out for a series of 24 hour periods. She had eventually entered her correct password only on 3 January 2017. She had then read the Trustee’s solicitor’s message. Ms Fisher also gave evidence that Mr Reaper’s email address had been disconnected by Dodo on 15 December 2016 as a result of their having been locked out of the Property on 14 December 2016. That evidence was also unchallenged. I make findings accordingly.
42 On 3 January 2017, after she had read the Trustee’s solicitors’ email, Ms Fisher telephoned AA. She was told that Mr Reaper’s and her possessions were stored in Thomastown. She was informed that AA would not permit her or Mr Reaper to have access to their possessions until the Trustee had paid his account. She had requested a quote for delivery of their possessions to their new residential property. AA quoted $2,750.00 for that service.
43 I accept Ms Fisher’s evidence as to those matters. It is corroborated by the fact that AA advised the Trustee on 9 January 2019 that the former occupants’ belongings would not be released to them until his account was paid.
44 The Trustee paid his account to AA on 10 January 2017. I infer Ms Fisher and Mr Reaper accepted AA’s quote for the re-delivery of their possessions. On 11 January 2017, AA transported and delivered Mr Reaper’s and Ms Fisher’s possessions as held by them to Mr Reaper’s and Ms Fisher’s new residential address. Upon their receipt, Ms Fisher promptly notified AA that certain of their possessions were missing. Ms Fisher deposed (at [32] of her affidavit):
In my communication with AA Furniture Removals:
(a) On 11 January 2017, I notified Jay that possessions were missing. Jay confirmed that all the occupants’ possessions removed from the Property were delivered;
(b) I sent Jay a list of the occupants [sic] possessions known to be missing at that time;
(c) Jay reviewed AA Furniture Removals’ surveillance footage of the unloading of the occupants’ possessions at the storage facility and could not detect any of the missing heavy or large possessions that could not be boxed;
(d) Tony said that on 20 December 2016 a security guard was sitting in the courtyard of the Property on a dining chair with his feet up on a small round table and refused to give up the furniture until the removalists were leaving;
(e) Tony said that on 21 December 2016 the workshop was unlocked when he arrived at the Property and that his staff were instructed by the security guard while removing the workshop contents to leave various items there;
(f) On 21 January 2017, I sent Jay and Tony a list of missing possessions and a copy of the WE Listing. Tony said that the WE Listing did not reflect the true state and contents of the Property upon AA Furniture Removals attendance;
(g) Jay said that the trustee’s bill for the handling and storage of the occupants’ possessions is about $10,000.00. …
45 On Sunday 15 January 2017 Mr Reaper emailed the Trustee’s then solicitors. His email address was different to that which he had previously used. I infer Mr Reaper had by that time established a new account. Mr Reaper’s email contained the following passages (Annexure PV-14 to Vrsecky affidavit):
Aside of [sic] all the damaged items, absent are many tools, electricals … We have checked with the real estate agent and they have informed us that no possessions remain at the property. We have checked with the removalists and they have informed us that no possessions remain at the storage facility.
If you hold any of our possessions notify me immediately and explain your alleged entitlement to those possessions and/or your reasons for holding them.
If you do not hold any of our possession[s], we require urgently a copy of the photos taken by you or your staff at the time that you (unlawfully) took possession, custody or control of our possessions so we accurately identify and position the possessions at the relevant time. The real estate agent informed us of the photographic documentary. Personally deliver or send the photographic evidence, preferable on USB immediately …
46 On 17 January 2017, Mr Reaper emailed Mr Vrsecky to ask that the information he had sought two days earlier from the Trustee’s then lawyers be provided.
47 On 20 January 2017 the Trustee’s solicitor replied to Mr Reaper as follows (Annexure PV-15 to Mr Vrsecky’s affidavit):
On 14 December 2016 when the Sheriff attended the Property to take possession there remained household items. The Trustee did not take possession of any of the items that remained at the Property. As a result of your refusal to comply with requests to vacate the Trustee was forced to engage agent services to facilitate the removal of the items from the Property into storage, as a courtesy to you. These were not items that vested in our client as Trustee and our client has incurred expenses associated with this removal and storage.
An agent was engaged to attend at the time of possession of the Property and liaise with the removalists. In accordance with the removalists [sic] requirements perishable and flammable items were unable to be transported and placed in storage. In the interest of prudency a listing was prepared by the agent. This listing is not an exhaustive list of the photographs taken but includes reasonable details as to all items removed from the Property. Please find enclosed a copy of the listing prepared by the agent.
Removal of your household items was your responsibility and should have occurred well before the possession of the Property by the Sheriff. Should you have any concern as to the actions of the removalists or the security of the storage facilities it should be addressed to them.
48 The letter enclosed a copy of the WE Listing Report.
49 Mr Reaper gave evidence that on 17 January 2017 he had contacted the Narre Warren Police station to report the alleged theft of his missing belongings. He was advised by the police that it was a civil matter and that his allegation of theft would not be investigated.
The Trustee’s alleged failure to protect the Property
50 In his affidavit of 1 March 2017, Mr Reaper states that on 29 December 2016 he went to the Property. No security guards had been present. He deposes that he gained access to the Property through an unlocked open laundry door. He says he discovered rainwater inside the doorway, discarded possessions, and dirty toilets. Mr Reaper deposes that the discarded possessions included empty mobile phone and camera packaging, food and Tupperware that had been removed from the refrigerator, boxes and bags full of pantry food, party supplies, and cleaning products. He deposes that he found an antique dining chair broken, discarded cabinet shelving, clothes rails from the wardrobe and vacuum hoses and accessories. Mr Reaper deposes that he spent several hours at the Property cleaning and repairing those items.
51 Mr Reaper deposes that he discovered damage to the garage door, the driveway paving, the laundry door, the front door, a bi-fold door, and the upstairs ceiling. Mr Reaper deposes that he returned to the Property on 30 December 2016 to collect the remaining contents of the workshop.
52 Mr Reaper’s evidence was that the rainwater had penetrated the house and had caused structural damage to, inter alia, to a number of cupboards which, in his opinion, would need reinstatement.
53 By contrast, Mr Pearson gave evidence that as at 20 December 2016, once AA had completed its task of packing and removing the former occupant’s possessions, he had ensured that the Property was entirely secured. The security staff that had been provided until then by Corsec were, from that time, discharged. The only people who would have had lawful access to the Property from that time were the real estate agents preparing it for sale. They had a set of keys.
54 Each of Mr Reaper’s Amended Application and Amended Statement of Claim contains statements of asserted facts and submissions. There are undoubted deficiencies in those pleadings. However in the course of interlocutory proceedings, Mr Devanny who appeared for the Trustee indicated he would be counsel for the Trustee in the substantive hearing. He accepted the Trustee had adequate notice of the case he had to meet. He disclaimed any reliance on any deficiencies in the pleadings. I thus proceeded on the basis that, whatever technical deficiencies, the Trustee was content to have the matter proceed on the understanding that Mr Reaper advanced the following claims:
the Trustee and the SOV had failed to comply with their obligations in executing the Warrant;
the Warrant itself was deficient;
the Trustee had breached s 116 of the Bankruptcy Act in taking possession, custody or control of the occupants’ possessions;
the Trustee had engaged in misconduct in removing the occupants’ possessions from the Property;
the Trustee had acted unconscionably in preventing the occupants from accessing their possessions for a number of weeks, including over the Christmas period;
the Trustee had failed to protect the Property and the occupants’ possessions from theft and damage while in his possession, custody or control;
the Trustee had failed to enquire into the applicant’s claims of theft;
the Trustee had sold the Property without having obtained lawful possession pursuant to a properly indorsed warrant of possession;
the Trustee had failed to repair damage to the Property that had occurred whilst in his possession, custody or control, and prevented the applicant from repairing that damage, prior to the sale of the Property, which prevented the Property being sold for the best possible return; and
the Trustee had breached s 19 of the Bankruptcy Act in incurring unnecessary valuation, security, removalist, storage and administration expenses.
55 Mr Devanny also accepts that Mr Reaper has sufficiently advanced a distinct common law claim for damages with respect to his allegedly lost, stolen and/or damaged property. Mr Devanny takes no point as to the deficiencies in its pleading.
56 Although raised at one point as a possible bar to the Court dealing with the latter, it is now not in contest that the Court has jurisdiction in respect of that claim.
57 In the circumstances alleged by Mr Reaper to have occurred, that claim is inherently a part of the “matter” in which the federal jurisdiction of this Court has been regularly invoked. As such, this Court’s jurisdiction also extends to its disposition.
Mr Reaper’s claim for an inquiry
58 It is convenient for the Court first to address Mr Reaper’s application for an inquiry into the Trustee’s conduct. Sections 178 and 179 of the Bankruptcy Act as it applied at the relevant time are in the following terms:
178 Appeal to Court against trustee’s decision etc.
(1) If the bankrupt, a creditor or any other person is affected by an act, omission or decision of the trustee, he or she may apply to the Court, and the Court may make such order in the matter as it thinks just and equitable.
(2) The application must be made not later than 60 days after the day on which the person became aware of the trustee’s act, omission or decision.
179 Control of trustees by the Court
(1) The Court may, on the application of the Inspector-General, a creditor or the bankrupt, inquire into the conduct of a trustee in relation to a bankruptcy and may do one or both of the following:
(a) remove the trustee from office; and
(b) make such order as it thinks proper.
(2) The Inspector-General or a creditor may at any time require a trustee to answer an inquiry in relation to the bankrupt’s estate or affairs.
59 Those sections were repealed by the Insolvency Law Reform Act 2016 (Cth) (the Reform Act) as of 1 March 2017: see Sch 1, Pt 2, Item 54. However the Reform Act provides that proceedings initiated prior to its commencement continue to be governed by the Bankruptcy Act as it was prior to the Reform Act: see Sch 1, Pt 3, Items 101 and 164. The commencement of the relevant amendments in the Reform Act were delayed until 1 September 2017 by reg 5(2)(p) of the Insolvency Law Reform (Transitional Provisions) Regulations 2016 (Cth). Mr Reaper’s application was lodged for filing on 5 March 2017. It is common ground that in consequence, ss 178 and 179 (although repealed) continue to apply in their former terms to the present proceeding.
60 Section 178 of the Bankruptcy Act had been held to confer “a supervisory jurisdiction over the conduct of a trustee and is a very wide discretion”: Moss v Gunns Finance Pty Ltd (Receivers & Managers Appointed) (In liquidation) [2018] FCAFC 185; 16 ABC(NS) 325 (Moss) per Gleeson, Lee and Banks-Smith JJ at [15] citing Cummings v Claremont Petroleum NL [1996] HCA 19; 185 CLR 124 at 132 per Brennan CJ, Gaudron and McHugh JJ and McGoldrick v Official Trustee in Bankruptcy [1993] FCA 961; 47 FCR 547 per Northrop, Ryan and O’Loughlin JJ at 552-553.
61 Section 178 “allows the Court to make such orders as seems appropriate in the circumstances of the case”: Moss at [15] citing Re Tyndall; Ex parte Official Receiver [1977] FCA 72; 30 FLR 6 at 9-10 per Deane J.
62 It is not necessary that an applicant for relief pursuant to s 178 shows that a trustee’s act, omission or decision was absurd, unreasonable or taken in bad faith, however the cases establish that the Court will be reluctant to interfere with the day-to-day administration of a bankrupt’s estate, or intervene simply because it forms a different view from that of the trustee: Frost v Sheahan (Trustee) [2009] FCAFC 20; 6 ABC(NS) 786 at [8].
63 With respect to s 179 of the Bankruptcy Act, the relevant principles were summarised by French J (as he then was) in Macchia v Nilant [2001] FCA 7; 110 FCR 101 (Macchia) at [49]-[50]:
49 As appears from the language of s 179 it invites first a consideration, albeit upon application by a person with standing, of whether the Court should inquire into the conduct of the trustee. If inquiry is undertaken, the next question is whether the trustee should be removed from office and/or any other order made. The first question requires the Court to consider whether, on the grounds and facts before it, a case has been made for an inquiry – Re Alafaci [Registrar in Bankruptcy v Hardwick (1976) 9 ALR 262] at 268. The application of s 179 to that first step involves a broad discretion as to whether or not there are sufficient grounds to make an inquiry appropriate – Turner v Official Trustee in Bankruptcy (Full Court, 27 November 1998, unreported). The Full Court there quoted with approval the observation of Ellicott J in Re Gault that:
“…the court should be loath to order an inquiry unless it considers that on the evidence before it there are substantial grounds for believing that the trustee erred in his administration. If the court considers that an inquiry is unlikely to reveal misconduct it should not make an order and put the respondent and possibly the creditors to the expense and trouble involved.” (173)
The policy consideration referred to by Deane J in Re: Tyndall that “the court should not unduly interfere with the day-to-day administration of a bankrupt’s estate by a trustee” applies also to the operation of s 179 – Turner at pp 2-3.
50 Section 179 operates in aid of the Court’s supervision of trustees who are its officers. That operation, however, is subject to restraint against undue interference and to discretionary considerations including the practical benefit likely to be derived from the conduct of any inquiry. Like s 178, it may be invoked by a bankrupt after discharge and in part for the same reason, namely that the trustee’s powers continue in the various ways referred to in Cheesman. It may also be the case that the trustee should be held to account for conduct in the administration of the estate which has affected the bankrupt in some way. As is the case with s 178, it is not a vehicle for pressing claims for common law damages under the general law. That is a matter for a court of appropriate jurisdiction. In addition the court will also have in such cases the discretion to determine the utility of an inquiry and its likely outcomes. For “although the court is given a broad discretion under s 179 of the Act, that discretion must be exercised in the interests of the orderly administration of the bankrupt’s estate” – Re Challen (A Bankrupt); Ex parte Brown (Beaumont J, 23 April 1996, unreported) cited with approval by Merkel J in Cheesman at first instance, p 114.
64 The reasoning of French J in Macchia is also authority for the proposition that s 179 may be relied upon by a discharged bankrupt even after the conclusion of his or her bankruptcy: see at [51] and Ferella v Official Trustee in Bankruptcy [2010] FCA 766; 188 FCR 68. I proceed on that basis.
65 Section 19 of the Bankruptcy Act sets out the duties of a trustee:
(1) The duties of the trustee of the estate of a bankrupt include the following:
(a) notifying the bankrupt’s creditors of the bankruptcy;
(b) determining whether the estate includes property that can be realised to pay a dividend to creditors;
(c) reporting to creditors within 3 months of the date of the bankruptcy on the likelihood of creditors receiving a dividend before the end of the bankruptcy;
(e) determining whether the bankrupt has made a transfer of property that is void against the trustee;
(f) taking appropriate steps to recover property for the benefit of the estate;
(g) taking whatever action is practicable to try to ensure that the bankrupt discharges all of the bankrupt’s duties under this Act;
(h) considering whether the bankrupt has committed an offence against this Act;
(i) referring to the Inspector-General or to relevant law enforcement authorities any evidence of an offence by the bankrupt against this Act;
(j) administering the estate as efficiently as possible by avoiding unnecessary expense;
(k) exercising powers and performing functions in a commercially sound way;
(l) the duties imposed on the trustee under Schedule 2.
(2) Where a person who became a bankrupt on a creditor’s petition is unable to prepare a proper statement of affairs, the trustee may employ, at the expense of the estate, a qualified person to assist in the preparation of the statement.
66 Having regard to those duties and the history of this matter as recounted above, I am unpersuaded that there is any sufficient reason for the Court to order an inquiry into the conduct of the Trustee pursuant to s 179 of the Bankruptcy Act or for it to make any order pursuant to s178. I find that the evidence in these proceedings does not reach the threshold required for the Court to take either of those steps. My reasons are as follows.
67 First, I find it to be established beyond dispute that in all of the extensive litigation earlier instigated by Mr Reaper, the Trustee’s position has been vindicated by judicial determinations of this Court and the FCCA.
68 Second, I am unpersuaded that Mr Reaper’s claims with respect to the asserted invalidity of the Warrant are of substance. While pleaded, Mr Reaper directed no submissions to support his contention that the Warrant was not issued lawfully. In any event I reject that it is so.
69 As noted above, Mr Reaper applied to stay or restrain the Trustee from enforcing the orders of Judge Burchardt that required Mr Reaper to provide vacant possession of the Property (on which the Warrant was based). That application was dismissed, and Mr Reaper unsuccessfully sought leave to appeal. After the Trustee had obtained orders for the Warrant to issue, Mr Reaper applied to the FCCA for a stay of its execution. That application was dismissed. In delivering ex tempore reasons on 9 December 2016, Judge Wilson noted that counsel for the Trustee had informed the Court that execution of the Warrant was imminent.
70 Mr Reaper did not draw this Court’s attention to any section of the Federal Circuit Court of Australia Act 1999 (Cth) (the FCCA Act) or any rule of the FCCA Rules that might justify a conclusion that the form of the Warrant was other than regular. The Warrant was signed, dated and stamped pursuant to s 48 of the FCCA Act. There is no facial deficiency in the Warrant. It may be accepted that it was issued by a Registrar and not a judge of that Court but Registrars have delegated power to issue enforcement warrants under Subdiv 25B.2.3 of the FCCA Rules: see s 102 of the FCCA Act and r 20.00A(1), Item 31 of the FCCA Rules. There is nothing in those Rules as would prevent a Registrar issuing a warrant in relation to a matter while it is in the docket of a judge if that that order is consistent with and implements the orders made by the judge. In Mr Reaper’s instance I am satisfied that was the case.
71 The Warrant was issued on 23 September 2016 out of the FCCA. A copy of the Warrant as it was issued is annexed to the affidavit of Petr Vrsecky of 22 November 2017 (annexure PV-8). The Warrant was addressed to “the Sheriff” in the following terms:
In respect of orders made by his Honour Judge Burchardt on 18 September 2015 and Further Amended pursuant to Rule 16.05(2)(e) of the Federal Circuit Court Rules 2001 on 9 October 2015 and varied on appeal by the Honourable Justice Davies in the Federal Court of Australia on 12 May 2016 it was adjudged that Petr Vrsecky as trustee of the bankrupt estate of Brett Vincent Reaper, recover vacant possession of the land and buildings described in the Schedule hereto.
Enter the land and buildings and cause the Applicant [being Petr Vrsecky as the Trustee] to have possession of it and indorse on this warrant immediately after you have performed all your obligations under it a statement of the date, time and place at which you have executed or attempted to execute the warrant and the results of the execution and send a copy of the statement to the [Trustee], care of [his] solicitors.
72 The schedule identified the land and buildings the subject of the Warrant, being the Property.
73 I am thus satisfied the Warrant was both lawfully issued and valid.
74 Third, contrary to Mr Reaper’s allegations, I am satisfied that the Warrant was lawfully executed. Section 106 of the FCCA Act sets out the responsibilities of the Sheriff of the FCCA. Section 108 of that Act provides that the Sheriff “may authorise persons to assist him or her in the exercise of any of his or her powers or the performance of any of his or her functions”. The Court may draw inferences of fact and, given the undisputed evidence in respect of its execution and the presumption of regularity, I infer that the SOV was so authorised.
75 Mr Reaper seeks to rely on the absence of any indorsement by the Sheriff regarding its execution appearing on the copy of the Warrant exhibited by the Trustee. Mr Vrsecky gave evidence in cross-examination that he thought he had been provided with an indorsed copy of the Warrant and that it would be in his records. It is unnecessary to determine whether or not that is so. The absence of a later indorsement does not establish that the Trustee did not lawfully take possession of the Property; indorsement, while the duty of the Sheriff, is not a prerequisite for the effective transfer of possession to the Trustee: see Szepesvary v Weston (Trustee), in the matter of Szepesvary (Bankrupt) [2017] FCA 344 (Szepesvary) per Moshinsky J at [33].
76 Mr Reaper further submits that the Warrant was not served on him or Ms Fisher or left at the place of enforcement (being the Property) pursuant to r 25B.24 of the FCCA Rules, which is in the following terms:
Enforcement officer’s responsibilities
(1) An enforcement officer must:
(a) …
(b) on enforcing the Warrant:
(i) serve a copy of the Warrant on the payer; or
(ii) leave the Warrant at the place where it was enforced; and
(c) give the payer an inventory of any property seized under the Warrant; …
(Emphasis added.)
77 I doubt (although it is not necessary to decide) that r 25B.24(1)(b) which refers to a “payer” has any application to a Warrant merely commanding the Sheriff to enter and convey possession of land and real property to a person to whom a court has ordered vacant possession of it.
78 Even assuming the contrary, the rule refers to the responsibilities of the “enforcement officer” “on enforcing the Warrant”; the duty is thus that of the Sheriff and those the Sheriff has authorised to assist him or her. It is a duty of the Sheriff which arises in consequence of the action authorised by the Warrant, having been taken. Rule 25B.24 in terms does not impose any obligation on the Trustee. I am satisfied that the reasoning of Moshinsky J in Szepesvary at [33] would apply equally in those circumstances. I would so hold.
79 The resolution of those legal questions is, however, strictly unnecessary. In the factual circumstances of the present case there was no requirement for the Sheriff or those authorised by him to provide Mr Reaper with an inventory of the “property seized under the Warrant”. That is because none was so seized. All that occurred on 14 December 2016 was that the SOV, acting under the authority of the Sheriff, entered the Property as directed by the Warrant and gave the Trustee vacant possession of it. There was no seizure of Mr Reaper’s Property. Mr Reaper’s interest in the Property was already vested in the Trustee by operation of the Bankruptcy Act and judicial orders.
80 Fourth, Mr Vrsecky’s plan to prevent Mr Reaper and Ms Fisher from re-entering the Property after the execution of the Warrant involved no error of law or misconduct on his part.
81 I accept the Trustee’s explanation that, having regard to the history of his relationship with Mr Reaper, and his previous unhappy experience in an earlier matter when he had permitted re-entry, that he made a decision not to allow Mr Reaper to re-enter the Property for a legitimate reason: his concern that Mr Reaper might abuse any opportunity so as to require the Trustee to take further steps to remove Mr Reaper.
82 Mr Reaper did not dispute that his dealings with the Trustee had been highly adversarial. Mr Reaper acknowledged that he had provided some assistance (copies of his pleadings) to the person whose conduct had previously caused the Trustee such a problem. It is unnecessary for me to find that Mr Reaper would himself have acted as the Trustee feared he might. It is sufficient that I conclude that in the circumstances applying, it cannot be said to have been unreasonable for the Trustee to have proceeded on a “once bitten, twice shy” basis. The Trustee’s intention to prevent such a possibility arising is not a basis for the Court to conclude that the Trustee erred in his administration of Mr Reaper’s bankrupt estate. The Trustee’s declining to permit Mr Reaper to re-enter the Property involved no error of law or misconduct on his part.
83 Fifth, there was nothing improper or unlawful in the Trustee having moved to secure possession of the Property as soon as that became possible, notwithstanding that that action had been pursued close to Christmas. The timing was not of the Trustee’s choosing.
84 Mr Reaper and Ms Fisher had had ample prior notice of their obligation to vacate the Property. Mr Reaper did not dispute that orders had been made by a judge of this Court that had required him and Ms Fisher (Ms Fisher not having exercised her right to purchase the Trustee’s interest in the Property) to give vacant possession of the Property to the Trustee no later than 9 September 2016: see [21] above. It had been their continuing disregard of those orders that had compelled the Trustee to seek the issue of the Warrant. Even assuming that the Trustee could have requested that the SOV delay executing the Warrant in the circumstances applying, I reject that he had a duty to do so.
85 Sixth, as Mr Reaper conceded, once the former occupants’ possessions had been removed, there was nothing in evidence as would have put the Trustee on notice that he should fund the presence of security guards at the Property on an ongoing basis to protect it until it had been sold. That concession was appropriate. Although it was an empty house, there is nothing to suggest it was particularly vulnerable to unauthorised access.
86 Seventh, although Mr Reaper put to Mr Pearson (who I accept was then acting as the Trustee’s agent) that he had left the Property unlocked on the evening of 20 December 2016 after AA had removed Mr Reaper’s and Ms Fisher’s possessions, I am not persuaded that I should make such a finding.
87 Mr Reaper gave evidence that some two weeks later he gained access through an unlocked laundry door. Mr Reaper’s case is that the house had been damaged by reason of it not having been properly secured, that that had allowed weather ingress, and that the Trustee had had a duty of reinstatement, which he had failed to discharge. However, amongst the damage Mr Reaper alleges that the Trustee had failed to reinstate is the damaged door through which Mr Reaper had entered. Whatever doubts I later express regarding the reliance I am entitled to place on other aspects of Mr Pearson’s evidence, that is more consistent with the door having been locked when Mr Pearson left but later forced open by an unauthorised entrant than Mr Pearson having left the door unlocked such that the Property was open to the weather.
88 Eighth, there is no evidence to suggest that the Trustee’s alleged failure to reinstate caused loss to Mr Reaper by reducing the value of his residual interest in the Property. Indeed, I am not satisfied that there was any such failure. Mr Reaper adduced no evidence as to the condition of the Property when it was put on the market. Even assuming I should accept Mr Reaper’s evidence as to the extent of the damage and that I am entitled to infer that that damage was not reinstated (which in the absence of any evidence I reject as a finding open to me), it is not self-evident that the Trustee would have breached his duty by not incurring the expense of reinstatement. Mr Reaper has adduced no evidence that an increased price for the Property would have exceeded the cost of the work involved in reinstating the Property before it was sold.
89 In that regard, Mr Vrsecky gave evidence that the price he secured for the sale of the Property was substantially above its reserve. His evidence was that he had secured the best possible sale price. Whilst I admitted the latter evidence only as a statement of the Trustee’s belief, Mr Reaper adduced no evidence, expert or otherwise, to suggest the contrary.
90 Having regard to the eight factors I have set out above, I decline to order an inquiry into the conduct of the Trustee pursuant to s 179 of the Bankruptcy Act. I am not satisfied that there are grounds (let alone substantial grounds) for believing that the Trustee misconducted himself so as to warrant such an inquiry. For the same reasons, I will not make an order pursuant to s 178 of the Bankruptcy Act.
91 Mr Reaper’s common law claims in respect of his personal possessions can and should be dealt with as a discrete matter. Determination of those claims does not require an inquiry to be ordered into the Trustee’s administration of his estate.
92 I therefore turn to whether Mr Reaper has established an entitlement to judgment in his favour with respect to his common law claim.
Mr Reaper’s common law claim for damages
93 Both parties relied on affidavit material and called witnesses in support of their respective positions.
Evidence led by Mr Reaper
Mr Reaper
94 The applicant filed four affidavits in this proceeding dated 1 March 2017, 6 November 2017, 17 January 2018 and 23 February 2018 respectively, which were read as his evidence in chief.
95 In Mr Reaper’s 1 March 2017 affidavit he deposed:
34 On 11 January 2017, I took delivery of the occupants’ possessions.
35 During the unloading of the first truck which carried the occupants’ household property, I noticed, and brought to the removalists’ attention, that nearly every loose item, primarily furniture, sustained damage. Some furniture had been damaged to such an extent that I directed the removalists to leave it outside as it could not possibly be repaired.
36 Further, I noticed the boxes being unloaded were foreign, beaten, stained, mismatched and/or labelled with an unknown name or address. Inspection of the contents of several boxes revealed the contents to be that of occupants.
37 The insides of the Property workshop were delivered by a second truck immediately after the first truck had unloaded. During the unloading of the second truck I noticed that the removalists had packed, transported and stored items that were to be thrown out.
38 After the removalists left I searched through the workshop delivery to find tools to reassemble the furniture. I could not find the tools and noticed that large items such as pressure cleaners which could not possibly fit into the boxes delivered were missing.
96 Mr Reaper’s evidence was that he had spent three days unpacking, listing missing items and reassembling damaged items of furniture. His evidence was that because many of his tools had been missing he had had to purchase replacements for that purpose. He deposed that by the evening of 15 January 2017 he had opened every box that had been delivered. He had then sent the email I have already set out above at [45] and later made a complaint to the police.
97 Mr Reaper’s Second Supplementary affidavit filed on 17 January 2018 records that on 15 December 2017 he had received a telephone call from an employee of AA. The import of that call was that AA had called him in the belief that he had engaged the services of a lawyer to draft an affidavit on his behalf. Mr Reaper told AA that he had not prepared any such draft. Later on 15 December 2017 AA had sent him a copy of a draft affidavit they had received. Mr Reaper exhibits that draft at BVR13.
98 Mr Reaper asks the Court to infer, and it does, that that draft had been prepared by the Trustee’s former lawyers with a view to the text being adopted and filed as AA’s evidence in these proceedings. The substance of the text was that AA had been directed by Mr Eddy to collect all items at the Property other than those which were flammable; that AA had done so; that AA had placed the whole of those items into storage without taking or damaging any of the former occupants’ personal possessions; and that AA had not witnessed anyone taking or damaging any items.
99 Mr Reaper’s evidence is that later that day he had been sent a copy of correspondence from AA. That correspondence contained AA’s very different account of what AA asserted had actually taken place on 19 and 20 December 2016. Mr Reaper exhibits the copy correspondence he received from AA at BVR14. The correspondence is also annexed to Mr Pearson’s affidavit sworn on 5 February 2018. As the underlying facts (but not the fact of the correspondence having been sent by AA) are in dispute, it is convenient to set out in full the terms of AA’s correspondence as copied to Mr Reaper:
On the 17/12/16 our company AA Furniture Removals Ply Ltd were hired to arrange professional packers/removalists to pack and remove on both moving dates 19/12/16- (9.00am) 20/12/16 (9.00am) to pack up the whole house on the 19/12/16 (exceptional to the garage & outdoor area) which the crew were told not to pack and prepare until end of the day when it was to [sic] late when they were advised by the indoor security guard that he (The security guard) stated “I forgot to tell you to pack the garage and outdoor area” - at this stage the time was to [sic] late in the day the crew asked if they could do the remaining packing the next day and the security guard said no problem.
On the day of the 19/12/16 Our packers began their job.
At 9.00am when the crew began their packing they noticed that the security guard outside was sitting on the customers [sic] chair with a table In front of him.
They were advised by the security guard inside that each room needed to be packed and labelled.
An example of this was: If each room had 30 boxes, each box would have to be labelled correctly as
“Bedroom 1- box 1 of 30, box 2 of 30, box 3 of 30 etc”
“Bedroom 2- box 1 of 30, box 2 of 30, box 3 of 30 etc”
And so, on so forth with the additional rooms in the house.
Each room that our professional packers were in, in the next room they saw the security guards looking through all the rooms. (Our understanding of security being present in the packing and removal of the above-mentioned house was that their job was to supervise our packers as they did their job, not walk off into other rooms.) As our packers got into each new room they found that the rooms were very messy and it had looked as though items had been touched and moved around.
Whilst our crew were packing he (The security guard) advised them that he was told he needed to take photos of the boxes being packed and of the crew who where [sic] packing the boxes. (We do not have any of these photos, we can only assume the security company has them.)
The security guard also made a remark to one of our crew members as they were packing, he (the security guard) noticed there was a half a bottle of alcohol in the pantry and told our crew to “Just take it” - to which our crew declined as they know very well this is classified as stealing.
Upon completion of the packing on the 19/12/16 the security guard advised our crew that all of the boxes of each room had to be brought downstairs and put in their "room groups of boxes". The crew complied and did so after that the security guard again proceeded to take more photos of all the boxes down stairs and then our crew left-leaving the security guards behind with all of the furniture & boxes.
On 20/12/16 (9.00am) Our removalists arrived to begin loading the furniture & boxes.
Upon pick up of the boxes our removalists were not able to determine whether or not the boxes had been tampered with after they left the night before and continued to move them into the truck as they usually would with any move. This move was a last-minute booking organised by the security company to which we were not given the time to view the property before hand and we were not given an inventory of all the items that needed to be taken.
When the crew were loading the truck from inside the house there was also a few items such as a PlayStation, Wii, guitar and other electrical items that they had been told by the security guard present inside the house to not take those items and to leave them inside the house. Additional to this the security guard inside the house went through the cupboards and took canned food and offered them to our crew to which they also declined but he continued to take and also eat as his lunch.
When the crew went into the garage to continue packing and start to move items they moved the shelving units from the garage to the truck and the security guard outside advised them not to take those shelves and to put them back in the garage. Also, there was 2 or 3 wooden chests that they were also told not to touch and to leave in the garage. These Items were not loaded into our truck and were not put into our storage facility. The security guard who was supervising outside was also sitting on a green chair, with a table and a radio. When the crew went to go and take those items at the end of the move the security guard advised them not to take the chair and table but did not specify if they were his chair and table or the customers. After that we do not know what happened with those additional items but they were not put into our storage facility.
After loading up both trucks with our 6-man crew they closed up the truck doors and proceeded to return to our depot at 28 Kean Parade, Thomastown, VIC 3074 where they unloaded all of the customers [sic] items into our storage facility until we were given further notice a month after where we re-delivered the items to the customer Sharon Fisher.
100 Mr Reaper’s affidavit of 1 March 2017 annexes what he refers as “Cost & Loss Statement 1” (BVR4) and “Cost & Loss Statement 2” (BVR5). He relies on the contents of those documents to identify respectively those items that he alleges were missing and those he claims were damaged when his personal property had been returned and to quantify the loss he suffered in consequence.
101 Mr Reaper’s evidence is that he compiled Cost & Loss Statement 1 by reference to the photographs and descriptions provided in the WE Listing Report. He had identified from those photographs the items which he and Ms Fisher had left behind in the Property but which had not been later returned. The list is extensive. Mr Reaper gave evidence that he had prepared his Cost & Loss Statement 1 by listing the items which had not been returned to him with reference to the rooms in which they had been located as at the time of Mr Eddy taking photographs. The heading “ID” in Cost & Loss Statement 1 was to be understood as a reference to the relevant page and photograph number of the WE Listing Report. The heading “QTY” was a reference to the number of such items he alleged had not been returned. The column, headed “Replacement Cost,” sets out the dollar value that Mr Reaper claims to be the cost of their replacement, rounded down to the nearest dollar.
102 In cross-examination, Mr Reaper’s evidence was that he had claimed what it would cost for those items’ replacement on the basis of the lowest list prices he had discovered on the internet for identical or substitutable products. He conceded that he had made no discount by reason of the age or his previous use of the possessions that had not been returned to him. Thus, for example, in respect of the item listed at sub-table 6, item 12, an iMate mobile phone, Mr Reaper conceded in response to a question asked of him by Mr Devanny, that that mobile phone had been purchased about a decade earlier. He conceded the replacement cost he claimed was for an equivalent new mobile phone. He had not discounted its price (or that of any other item) for depreciation or wear and tear. Under the heading, “Total,” Mr Reaper adds up and provides a running total of the replacement costs he had claimed in respect of the missing possessions for each room. The sum of the amounts he claims as damages as particularised in Cost & Loss Statement 1 is $50,807.00.
103 The list of the items of his property which Mr Reaper claims AA returned to him in damaged condition is also extensive. Mr Reaper’s evidence is that had he compiled Cost & Loss Statement 2 using a similar methodology to that which he had employed to produce his Cost & Loss Statement 1; that is by commencing with reference to the photographs and descriptions provided in the WE Listing Report and then by listing room by room those items which had been returned to him in damaged condition. The columns in which he describes those items and particularises his damages are headed respectively: “Description” which contains a brief description of the items Mr Reaper claims were returned in a damaged condition; “Repairable” which refers to his opinion as to whether or not the damage he alleges had occurred to the item was capable of being repaired; “ID” which refers to the room and photograph number in the WE Listing Report in which the item had been previously located; and “QTY” which refers to the number of items returned in a damaged condition. Mr Reaper gave evidence that the final column headed “Replacement Cost” refers to, in the case of items he had concluded were incapable of repair, the dollar amounts he was claiming he would be required to outlay to replace the item, and in the case of repairable items, Mr Reapers estimate of the cost of repair. Mr Reaper’s evidence was that, in respect of items requiring replacement, he had sourced their replacement value by the same means as he undertook for Cost & Loss Statement 1. However by contrast to Cost & Loss Statement 1, Mr Reaper identifies the source of the internet prices he relies upon by reference to the online retailer (for example, Officeworks) from which he obtained that pricing. However no basis beyond Mr Reaper’s opinion was offered for his estimates for the dollar amounts he claims as damages for the cost of repairs of those items he considered capable of being repaired. The total Mr Reaper claims as damages as particularised in Cost & Loss Statement 2 is $16,146.76.
104 That total includes a separate claim for $178.76 representing the price he had paid for the tools he had purchased to fix what he could of those returned by AA in a damaged condition.
105 Mr Reaper filed a supplementary affidavit dated 6 November 2017. In that affidavit Mr Reaper deposes that some time after AA had returned his personal possessions he had gone to collect materials for the renovation of his daughter’s investment property. It was then that he had discovered that some additional materials and tools which had been formerly stored in the Property in his workshop had not been returned. He sets out the claims he makes in respect of those missing items at BVR9 (Cost & Loss Statement 5). The methodology Mr Reaper employs to compose that Statement is the same as he employed to compose Cost & Loss Statement 1. As well as a listing a considerable number of additional missing tools and Mr Reaper’s claims by way of damages for their replacement, Cost & Loss Statement 5 includes a claim in respect of an LG television that I infer either he or Ms Fisher had discovered, months later, no longer worked. He also includes a claim for the loss of his personalised number plates. The claims for damages Mr Reaper particularises in Cost & Loss Statement 5 total $8,443.00.
106 Perhaps to anticipate criticism of his methodology, Mr Reaper filed a Third Supplementary affidavit dated 23 February 2018. In that affidavit Mr Reaper deposes that he approached several professional valuers to ask them to provide a better estimate of what he might claim for his missing possessions. He deposes that all of the valuers he had approached had refused to provide him with a professional valuation because his missing possessions had not been available for them to appraise. He further deposes that he had been unsuccessful in obtaining a professional valuation report for his damaged possessions because he had discarded the items which had been unrepairable. His evidence was that the valuers he had approached had, in any event, advised that any report they provided would only convey their opinion as to an item’s value in its damaged state, and would say nothing as to its condition and value as at the time the Trustee had taken possession of the Property.
107 Mr Reaper annexed two schedules to his Third Supplementary affidavit. In those schedules he sets out what he asserts was the condition of the missing and damaged items he has claimed damages for as at the time he was locked out of the Property. Schedule 1 contains his evidence as to the condition of those items he has listed as not having been returned to him. Schedule 2 contains his evidence as to the pre-existing condition of those items of his property as he claims were returned to him in a damaged state. In each of those schedules their pre-existing status is described as having been “brand new”, “as new”, “used”, or “refurbished”. The overwhelming majority of items so listed in each schedule are asserted to have been “brand new” or “as new”.
108 In cross examination Mr Devanny put to Mr Reaper that the whole of his evidence that his possessions had been either not returned or returned in a damaged state, was wholly manufactured. Mr Reaper strongly denied that proposition.
109 Mr Devanny put to Mr Reaper that it was implausible that most of his missing and damaged goods had been new or as new. Mr Reaper responded, as he had deposed to in his Third Supplementary Affidavit, that most of his tools and electronic equipment had been new or as new because they had been recently purchased out of his compensation money which had not been subject to his bankruptcy. A considerable amount of his new electronic equipment, he gave evidence, had been purchased so that he could build a new 3D printer. He had also begun to replace his older tools so that he could resume his trade as a builder once he was permitted to.
110 However, Mr Reaper did concede that the dollar value he had claimed as damages he had suffered by reason of loss of the items which had not been returned to him was for the cost of replacement with new equivalent products. No discount for depreciation had made, even for the minority of items which, before they had gone missing, had been “used” or “refurbished”.
111 Mr Reaper was also cross-examined to the effect that his assertion that the only items of household property which had belonged to Ms Fisher had been two antique dining chairs, a Carmen Miranda bust and a “small round table” was untruthful. Mr Reaper responded that the sole source of his and Ms Fisher’s income since his injury had been his compensation money and that all of their possessions since then had been acquired from that income source. For that reason they were exclusively his.
Ms Fisher
112 Ms Fisher’s evidence in chief was as contained in her affidavit of 17 March 2017. In her affidavit Ms Fisher states she is Mr Reaper’s partner and had been his carer since March 2013.
113 I have referred earlier to Ms Fisher’s evidence that soon after AA had returned Mr Reaper’s and her possessions, she had contacted AA to complain about their loss and damage.
114 One curiosity in this proceeding is that a significant component of what Mr Reaper asks the Court to accept regarding the quantification of his claim for damages is particularised in Ms Fisher’s affidavit.
115 Mr Reaper thus claims damages in respect of the losses he alleges he suffered as are described in Ms Fisher’s affidavit of 17 March 2017. Annexed to Ms Fisher’s affidavit at SPF4 is what is described as Cost & Loss Statement 3. Ms Fisher’s evidence is that the first group of expenses detailed in that statement were those incurred by Mr Reaper as a result of her and his not having access to their possessions at the time they moved into their new rented premises. The damages so particularised include claims for items such as food and sundries. A total of $1,195.10 is claimed in Cost & Loss Statement 3 in respect of those expenses. A further $3,333.33 is claimed on Mr Reaper’s behalf for household living essentials such as a kettle, table and chairs, and a refrigerator which Ms Fisher states had had to be purchased having regard to those circumstances. A third item claimed as damages by Mr Reaper as set out in Cost & Loss Statement 3 is the amount paid to AA for delivery of his and Ms Fisher’s possessions to their new premises, in the sum of $2,750.00. In contrast to Mr Reaper’s Cost & Loss Statements 1 and 2, the claims Ms Fisher makes on his behalf in Cost & Loss Statement 3 are supported by receipts. The total damages claimed by Mr Reaper as particularised (although contained in Ms Fisher’s affidavit) Cost & Loss Statement 3 is $7,278.43
116 Ms Fisher makes further claims on Mr Reaper’s behalf as set out in annexure SPF5 (Cost & Loss Statement 4). Ms Fisher’s evidence is that what is contained in that Statement refers to damaged articles owned by Mr Reaper which had not been included in his Cost & Loss Statement 2. Cost & Loss Statement 4 as advanced by Ms Fisher on Mr Reaper’s behalf contains a series of photographs, each allegedly showing the actual physical damage that had been sustained by particular items of furniture and art owned by Mr Reaper when in the hands of agents of the Trustee. No claim on Mr Reaper’s behalf is made in respect of damage to the first item listed in that statement (an antique dining chair) because Ms Fisher accepts that was her property. In respect of each other damaged item, Ms Fisher provides an estimate of the dollar value of the loss that Mr Reaper thereby incurred. However Ms Fisher provides no reasoning in support of those estimates. I infer, having regard to the significant damages she claims on his behalf, that her estimates are not for what it would cost Mr Reaper to repair those items but for their total replacement. For example, at item 9, the photographs Ms Fisher exhibits appears to show relatively minor physical damage (some scratches and marks) to a Chesterfield lounge suite yet Ms Fisher makes a claim of $6,800.00 on Mr Reaper’s behalf for that damage. The only item shown in the photographs that unambiguously appears to have been damaged beyond repair is the antique dining chair which did not belong to Mr Reaper. The total of damages claimed by Mr Reaper as particularised in Cost & Loss Statement 4 is $16,393.00.
117 Ms Fisher was cross examined by Mr Devanny. Ms Fisher acknowledged that when she had complained to AA about the missing items and damage to Mr Reaper’s and her possessions AA had immediately offered to compensate them for the losses they had sustained. Her evidence was that she had rejected AA’s offer because she believed AA had not been not wholly responsible for what had happened. I interpolate that whatever may have been the Trustee’s entitlement to bring a cross-claim against AA he did not seek to do so.
Mr Hanna
118 In his affidavit of 31 January 2018, Mr Sizar Hanna deposes that he is a fleet manager employed by AA. He deposes that AA was hired on 17 December 2016 on behalf of the Trustee to pack and remove the contents of the Property on 19 and 20 December 2016. He deposes that it was a last-minute booking and that AA had had no opportunity to view the Property beforehand, nor were they given an inventory of the items that were required to be moved. The job had not been completed on the first day and the volume of possessions that had remained had required him to dispatch an additional truck. He had arranged for a third truck and removalist to attend the Property on the afternoon of 20 December 2016 to load and transport the remaining possessions and the contents of the workshop garage. He deposed that the contents of the workshop garage had only been loaded loosely into the truck before being transported to AA’s depot in Thomastown. By implication, Mr Hanna’s evidence was that AA had earlier not understood that it would be required to pack and store the contents of the workshop garage.
119 It is uncontentious that Mr Hanna was not present at the Property during the events of 19 and 20 December 2016. I therefore admitted only such of his evidence as was based on his role as AA’s fleet manager. In cross-examination it was put to Mr Hanna that his affidavit had been drafted by Mr Reaper. He denied that was so.
120 Mr Hanna acknowledged that when, after AA had delivered Mr Reaper’s and Ms Fisher’s possessions, Ms Fisher had complained about their missing and damaged possessions he had offered to compensate them. Mr Hanna confirmed that it was AA’s practice to compensate anyone for any damage AA had caused them in the transportation of their goods. He was asked if any money had been paid out to Mr Reaper or Ms Fisher by AA, to which he answered that he was AA’s operations manager not its accountant, but to his knowledge there had not been.
Mr Mansor
121 Mr Faiz Mansor is an employee of AA. He was personally present at the Property and participated in the packing and removal of Mr Reaper’s and Ms Fisher’s possessions over the period of 19 and 20 December 2016. In his affidavit of 9 February 2018 (read in evidence) he deposes:
3 On 19 December 2016 at 9:00am, I arrived at the Property with a workmate. Upon arrival, I witnessed a security guard stationed outside the front of the house sitting on an antique chair with a table in front of him of which items I found the following day belonged to the former residents.
4 Upon entering the Property, both I and my workmate were directed by a supervisor, I believe he was employed by WE Valuation Services, I do not recall his name, to pack each room into boxes and label each box according to location:
(a) Bedroom 1 - box 1 of 30, box 2 of 30, box 3 of 30...
(b) Bedroom 2 - box 1 of 30, box 2 of 30, box 3 of 30...
No instruction was given in relation to labelling items that could not be boxed.
5 As my fellow worker and I worked through each room, we were left alone by the supervisors who were rifling through each room ahead of us. As I moved into each new room I found the rooms had been disturbed as they were very messy compared to when I first arrived at the Property.
6 While I packed the contents of the kitchen, a supervisor upon noticing half a bottle of alcohol in the pantry, said to me to just take it, I refused.
7 Upon completing the packing of the house, a supervisor directed me and my workmate to bring all of the boxes downstairs and to put them in their room groups of boxes. After doing so, the supervisor took more photos of the boxes.
8 Further on 19 December 2016, at the end of the day, a supervisor said to me in the presence of my workmate that "I forgot to tell you to pack the garage and outdoor area". Being so late in the day, I asked the supervisor if we could do it the next day. He said no problem. After that I reported to Tony (Sizar Hanna) the additional work. After that my workmate and I left the Property.
9 On 20 December 2016 at 9:00am, I attended the Property with five workmates. I was not able to establish if the boxes I packed the day before had been tampered with or were all there. I did not receive an inventory or check list to work off from a supervisor.
10 While we were loading the contents of the house into the trucks, a supervisor, addressing the AA group, directed us to leave items such as a PlayStation, Wii gaming system, electric guitar and other electrical items. These items were not loaded into AA's trucks.
11 I witnessed a supervisor taking canned food from out of the cupboards which he offered to us, I declined his offer as did my fellow workmates. The supervisor continued to take the food which he also ate as his lunch.
12. While assessing the contents of the workshop garage with my workmates, a supervisor told us not to touch the wooden chests. We had loaded shelving units from out of the workshop garage into a truck and after doing so, the supervisor told us not to take the shelving units and to put them back. The shelving units as with the 2 or 3 wooden chests, one being a chest in a chest, were left at the Property as instructed.
13 Before leaving the Property, we went to recover a green chair, table and radio that were being used by a supervisor in the outside courtyard. The supervisor instructed us not to take them. The supervisor did not specify whether those items belonged to him or the residents.
14 After loading AA's two trucks to the extent directed by the supervisor, we then drove to 28-30 Keon Parade, Thomastown. We then unloaded the household items and placed them into storage.
15 I returned to the Property in AA's third truck later that afternoon. Upon arrival I found the workshop garage unlocked and the Property otherwise unattended. We loaded the contents of the workshop garage into the truck loosely and returned to 28-30 Keon Parade, Thomastown. Upon arrival, I assisted with the packing of the contents of that truck before placing the items into storage.
16 On 11 January 2017, five workmates and I delivered the contents that were removed from the Property and held in storage to Mr Reaper and Ms Fisher at 27 Sundial Court in Berwick.
122 Mr Mansor was cross-examined by counsel for the Trustee. He denied that Mr Reaper had provided him with a draft of his affidavit. Mr Mansor’s evidence when pressed on that point by Mr Devanny was that he had met Mr Reaper only twice; once when AA had unloaded his “stuff” and “now [in court] is the second time”. He stated that he prepared his affidavit by recounting to Ms Velardo (a staff member of AA) his direct recollection of the events he had witnessed. Ms Velardo had simply typed up what he had told her.
123 Mr Devanny asked Mr Mansor if he could identify the person who had offered him and other AA staff the canned food out of the cupboards. Mr Mansor said that he could not remember the person’s name, but he had been taller than Mr Mansor. His evidence was, “I can’t remember his name. But what we’re doing, we start packing the fridge and he said, ‘don’t packing if you want to take some.’”
124 Under cross-examination Mr Mansor remained firm in his recall that there had been a bottle of alcohol, “this was full – half full. He [the security guard] said, ‘if you want, take it,’ I said, ‘no mate, thank you.’”
125 Mr Devanny put to Mr Mansor that two staff members of WE would be giving evidence and they would say that had not happened. (I interpolate that only one witness, Mr Pearson, later gave evidence to that effect. I infer that Mr Eddy did not give the evidence the Trustee’s counsel had anticipated he would (see at [134] below)). In any event, Mr Mansor was unshaken in his evidence. He responded, “I never took it, so I don’t know what has happened after that.”
126 Mr Mansor did not dispute that he had been asked to attend Court by his employer.
127 It is significant that Mr Devanny did not put to Mr Mansor that what he had deposed to at paragraphs [4], [5], [7], [8], [9], [10], [12], [13], [14] and [15] of his affidavit had not happened, or that his evidence was the result of his being mistaken or a deliberate untruth.
Evidence led on behalf of the respondent
Mr Vrsecky’s evidence
128 Much of the content of Mr Vrsecky’s affidavit read as his evidence in chief was directed to the issues the Court has already addressed regarding the legitimacy of his general administration of Mr Reaper’s bankrupt estate.
129 In respect of the events of 19 and 20 December 2016, Mr Vrsecky’s evidence was that he was not present at the Property. He had engaged Mr Eddy to act as his agent to represent him when the SOV would be executing the Warrant and thereafter. It is not in dispute that he instructed Mr Eddy that he should engage security staff to ensure Mr Reaper and Ms Fisher did not re-enter to remove their possessions and that he had told Mr Eddy to list Mr Reaper’s and Ms Fisher’s possessions and then to ensure they were packed up and removed into storage. His evidence in chief was that he had exercised his judgement to remove the chattels from the Property to a secure storage facility to avoid potential damage to the Property or allegations of missing items, “which are exactly the allegations now being made”. Mr Vrsecky deposed that none of the belongings that Mr Reaper claimed were damaged or stolen had been listed in his statement of affairs.
130 Mr Vrsecky’s evidence was that he personally had played no part in making the arrangements he had authorised Mr Eddy to undertake for the employment of guards or the packing and removal of Mr Reaper’s possessions.
131 In cross-examination, Mr Vrsecky gave evidence that his staff had received a telephone call from Mr Reaper on the morning of 15 December 2016 demanding access to the Property to enable Mr Reaper and Ms Fisher to collect their possessions. His evidence was that after his staff had informed Mr Reaper that he would not be permitted to re-enter the Property, Mr Reaper had become abusive. Mr Vrsecky acknowledged in cross examination that he had not taken any steps to contact Mr Reaper or Ms Fisher to ask them where, if anywhere, they might want their possessions to be delivered. He denied having received any messages on his mobile phone from Mr Reaper requesting him to call Mr Reaper back.
Mr Eddy
132 Mr Eddy is an accredited senior valuer. He is also the director of WE. The relevant paragraphs of his affidavit dated 28 November 2017 which was read as his evidence in chief are as follows:
3 I was engaged by Petr Vrsecky to attend the property at 12 The Esplanade Narre Warren South (the Property) after the Sherriff had obtained possession of the Property. My instructions were to:
(a) Organise for the locks to be changed on the Property once possession was obtained by the Sherriff.
(b) Organise for security guards to be at the Property until any remaining goods had been moved to storage to prevent interference from third parties or damage to the property.
(c) List and photograph all goods remaining at the Property and provide an asset listing report of the domestic and office furniture, clothing, tools, electronic equipment, personal effects and sundries.
(d) Organise for all goods remaining at the Property to be removed to a storage facility.
4 On 14 December 2016 I attended the Property at approximately 1pm. The Sherriff took possession of the Property and none of the occupants were at the Property. There were goods remaining at the Property. I organised and witnessed, the locks being changed at the Property and a security guard being posted at the Property. On 14 December 2016 I sent an email explaining what had occurred to Petr Vrsecky, Sarah Heers and Ben Conrad of PKF. Annexed hereto and marked with the letters "WE-1" is a true copy of an email exchange between W.E. Valuation Services Pty Ltd and PKF dated 13 and 14 December 2016.
5 For the period 14 December 2016 to 20 December 2016, I, with one of my staff attended the Property and photographed and listed the goods. Under my instructions, my staff disposed of the perishable items in the fridge. I did not identify any items of significant value. …
6 On 19 and 20 December 2016 all of the goods had been packed up and removed by the removalists I had organised. I and my staff supervised this process and did not witness any items being damaged or any items which were not removed and placed in the removalists truck other than the perishable items I and my staff disposed of and a few flammable goods which I left at the Property. I have asked my staff and believe that they did not witness any items being damaged or any items not being removed and placed in the storage truck (other than the perishable and flammable items). …
7 To my knowledge all goods that were located at the property were taken to the storage location and unloaded at that location by the removalists.
8 I have read the affidavits of Mr Reaper and Ms Fisher and deny any allegation of impropriety. In particular I deny the intimation that security guards stole goods as suggested in paragraph 18 and 19 of Mr Reaper's affidavit of 6 November 2017. The goods were all detailed and placed in storage for collection by Mr Reaper and Ms Fisher.
133 The annexure WE-1 as referred to at [4] of Mr Eddy’s affidavit is an email dated 14 December 2016 reporting to the Trustee. It was as follows:
All went well today. Following is a rundown of today’s actions.
Site was attended at 1pm, no person was on site. Access went smoothly.
Lock smith changed all external locks. 9 doors in total.
2 sets of keys cut. One set with myself and the other given to Peter Watson of First National Real Estate. …
I have taken inventory and photos of assets, identifying major items separately and minor items (Clothes, kitchen utensils, toys etc.) as group lots, either by drawer, cupboard, bag, etc. I had discussed this with Ben Conrad onsite.
I will have the list processed along with the photos identifying each line item. I will forward them ASAP.
Security guard on site for 2 days at this stage and may need to be there for a further couple of days depending on the day of removal of assets. Trying to organise this ASAP. Will know tomorrow.
The Bankrupt had attended the site approx. 6:30pm and wanted access, the security person had denied him access and suggested he contact PKF for any further information.
134 Mr Eddy was cross-examined by Mr Reaper. Mr Eddy frankly conceded that his presence at the Property had been limited to the afternoon of 14 December 2016, although he may have visited it on the morning of 19 December 2016 to the deliver the keys to Mr Pearson. The significance of that concession is that it establishes his statements at [7] and [8] that certain events had occurred “to his knowledge” is misleading. His evidence was that it had been Mr Pearson alone who had been present for that purpose on 19 and 20 December 2016. His concession that he had no personal knowledge of those events means that no significant weight can be placed upon what he deposes to at [7] and [8] of his affidavit.
135 Mr Eddy confirmed that he had engaged Corsec to provide security services for the Property. He accepted that he had known nothing about Corsec before engaging them. He had never previously used their services. Corsec had been referred to him by another security company.
136 Mr Eddy’s evidence was that neither Mr Pearson nor AA had reported any difficulties or misconduct in the removal of the possessions to him at the time.
137 A significant focus of Mr Reaper’s cross-examination of Mr Eddy related to how he had prepared the WE Listing Report. Mr Reaper referred Mr Eddy to the fact that there had been 18 storage boxes in a shelving unit represented at page 14, in the second photo from the right on the top line of the WE Listing Report. Mr Eddy accepted that that was so. Mr Reaper then referred Mr Eddy to five photographs of open boxes at page 13 appearing to show certain contents of those boxes, including items such as model cars. Mr Reaper then took Mr Eddy to his description in the text at the top of page 13 in which he referred to the balance of boxes as “13 boxes of assorted paperwork”. The sting of Mr Reaper’s cross-examination was that there had been in fact 18 boxes on the shelf as Mr Reaper suggested was clearly visible from the photograph in the WE Listing Report, and that Mr Eddy had assumed that 13 of those boxes contained paperwork, whereas only six had. Mr Reaper put to Mr Eddy that he had not opened all of the 13 boxes to check their contents and, if he had, he would have discovered that the remaining boxes contained many of the electronic items listed in his Cost & Loss Statement 1. Mr Eddy denied that he had failed to open any of those boxes. Mr Eddy conceded that there were no photographs of their contents in the WE Listing Report notwithstanding his belief that he would have taken photographs of the contents of all 13 of those boxes.
Mr Pearson
138 Mr Pearson’s affidavit of 5 February 2018 was read as his evidence in chief. In it he deposes that he had been subcontracted by WE (Mr Eddy) on a casual basis as Onsite Forman for 19 and 20 December 2016. In structure, Mr Pearson’s affidavit is responsive to the contentions made in AA’s correspondence set out above at [99], which is also an annexure to his affidavit. He deposes as follows:
4 I am aware that a private security firm was engaged to provide security at the Property from 19 December 2016 to 21 December 2016. I do not recall the security company that was engaged but I recall that they worked in shifts with one security guard attending the Property to take over from the other. I do not recall the respective security guards names nor their shift start and finish times, save that I recall that they operated in two eight-hour shifts with only ever one security guard on duty at any one time.
5 I was engaged to ensure that the entire process of packing up and removing the items from the Property went smoothly. I was to act as representative of WE Valuations and oversee the packing and removal of all items remaining at the Property and to ensure that the removalists and security guards complied with the directions given.
6 AA Furniture Removals (AA Removals) were engaged to complete the packing, loading and transport of the items at the Property to a storage facility. I do not recall the name of the storage facility.
Events of 19 December 2016 and 20 December 2016
7 On 19 December 2016 and 20 December 2016 at on or about 9am I attended the Property to begin my role.
8 I recall that there were two people from the AA Removals in attendance on 19 December 2016 and approximately six present on 20 December 2016. However I do not recall their names.
9 On both days I introduced myself to the removalists and advised them that I was a representative of WE Valuations and that I was there to oversee the packing process.
10 On 19 December 2016 I recall that upon arriving and entering the Property I observed ii to have appeared messy and it did not appear that the occupants had attempted to tidy up after themselves.
11 On a day I cannot recall but believe to be 19 December 2016, I remember walking around the interior and exterior of the Property with one of the removalists and pointing out the larger items that would need to be packed up. Further, I recall staling words to the effect that “everything in the house has to go and needs to be packed up”.
12 I remember that one of the removalists told me that their plan was that they would be packing things up on 19 December 2016 and that they would begin to load the packed items into a truck and transport them on 20 December 2016. In On the afternoon of 19 December 2016 a removalists approached me and told me that they had ran out of time and would need to continue packing on 20 December 2016.
13 I do not recall telling any removalists words to the effect that “I forgot to tell you to pack the garage and outdoor area”, in fact this is contrary to the instructions they were first given when I walked around the Property with them as described at paragraph 11 above.
14 I instructed the removalists to go through the entire Property, room by room and to pack up all of the items. I told them that every box had to be clearly labelled with the room the items on the box had come from and the quantity of the box, for example ‘kitchen - box 1 of 20’. I also recall that I gave the removalists paper in order to label the boxes.
15 I would walk from room to room to ascertain what had been completed, what work was still required to be done and direct the removalists as to which room should be the next to be packed up to ensure the entire process ran as seamlessly as possible. I also did this to ensure that nothing had been accidently missed by the removalists in the rooms that had already been packed.
16 The removalists were directed to bring each box that had been packed into a large room on the ground floor and that all boxes from the same room should be grouped together.
17 At times it was difficult for me to understand the removalists as many had thick accents but I reiterated the process referred to in paragraph 14 and felt that they understood me. In any event they complied with my directions.
18 As each box was carried into this room I would then photograph it on a camera provided to me by Wayne Eddy, who I know to be the owner of WE Valuations. I am not aware where these photographs are now, but I believe them to be in the possession of Wayne Eddy.
19 The boxes were left in this ground floor room on the night of 19 December 2016.
20 When I arrived on 20 December 2016 at approximately 9am, the boxes all appeared to be untouched and there was nothing that suggested that they had been tampered with in anyway. I am aware of this because each box had been taped up the day before by the removalists with packing tape such that it would have been visibly apparent had any box been opened and then closed again.
21 I deny ever offering a bottle of alcohol to any of the removalists and further I do not remember finding any bottles of alcohol at the Property.
22 I recall that when it came time to pack up the kitchen area I contacted Wayne Eddy by telephone and asked what he wanted me to do with the food in the fridge and pantry. I did so because I remembered seeing food items like what appeared to be left over spaghetti bolognaise in plastic containers. During the telephone conversation Wayne advised me that all food items should be put into plastic garbage bags and placed in the bin and this is how I proceeded.
23 I did not take any food items from the kitchen, nor did I open any food products for lunch as has been alleged. Further I recall that I had ham and cheese toasted sandwiches from McDonalds for lunch on both days.
24 I believe it was on 20 December 2016, however I cannot recall, whilst packing up the garage one of the removalists from AA Removals advised me that despite my directions to pack everything up that they were unable to transport anything flammable or dangerous. The removalists mentioned that they had found tins of paint, a fuel jerry can and scraps of timber in the garage that they were not able to move these items.
25 I then remember calling Wayne Eddy and informing him of the types of items the removalists had said that they could not remove. I recall that Wayne said words to the effect that “well if they can’t take it then they can’t take, nothing else we can do”.
26 The items referred to in paragraph 24 were not packed and transported by the removalist and I do not recall what happened to these items.
27 I also recall that there was a box in the garage that had plastic bags, bits of paper and newspaper inside. This box appeared to only contain rubbish items and it was thrown in the bin. To the best of my knowledge, this box and its contents was the only item from the garage (other than the items referred to in paragraphs 22 and 24) that were not packed and transported by AA Removals.
28 I deny telling any removalists not to pack and remove 2-3 wooden chests. To the best of my knowledge the only items in the garage that were not packed and transported were the items referred to in paragraphs 24 and 27.
29 On 20 December 2016 when the boxes were being transported into the trucks belonging to AA Removals I made it clear to the removalists that no box was to be removed without me first taking a picture. To this end I directed all removalists to load the boxes onto their trolleys with the labelled detailed in paragraph 14 facing towards the front so that they were clearly visible in the photograph. 1 then stood at the front door to ensure that all boxes and items were photographed whilst being taken from the Property and loaded into the trucks. I am not aware where these photographs are now but I believe them to be in the possession of Wayne Eddy.
30 I deny that I directed any removalist not to pack any PlayStation, guitar or Wii. The removalists were directed to pack all items as referred to in paragraph 11.
31 On 20 December 2016 I recall that one of the removalists advising me that they would need an extra truck to transport all the items. I remember calling Wayne Eddy and he said to me words to the effect that “they can do what they need to do”. I took this to mean that if the removalists needed an extra truck then he was happy for this to occur and the removalists then arranged for an extra truck to attend the Property.
32 I do not recall, however I believe that there would not have been any items left unpacked as I walked through the Property to check and the direction given to the removalists was to pack up everything. From my observations the only items that were not placed into a box were those which did not fit into a box and they were appropriately packaged ready for transportation.
33 I recall chatting briefly with some of the removalists, the names of which I cannot recall, during the days that I was present at the Property. I recall talking about where they were from and how they liked working for AA Removals. I also remember discussing football, soccer and making general conversation with them. At no point did any AA Removals employee raise with me any concerns as to how the packing and transport of the items was occurring and progressing.
Security Guards
34 I was directed by Wayne Eddy that the security guards were not to enter the Property and were to remain outside at all times. To this end I ensured that the doors were locked so that if any security guard required entry to the Property they would have to ring the doorbell or knock on the door. I recall that on several occasions the security guards would come to ask me to borrow my cigarette lighter and each and every time they would have to ring the doorbell or knock on the door.
35 I also informed the removalists that the security guards were not permitted inside the Property.
36 I recall observing security guards sitting down but I do not recall whether this was a chair, table, stool or what it was they were sitting at. I believe, but I cannot recall with any certainty, that this was property belonging to the security guards and/or the company they worked for.
37 I recall that the security guard was listening to something as I remember hearing music coming from something small. I do not recall if this was a radio, a mobile phone or some other device.
38 I do not recall what happened to whatever the security guards were sitting on but I recall that on 20 December 2016 when the all the packing was completed and transported that it was no longer there. I believed that it had either been packed and moved or belonged to the security company and had been taken with them.
139 Mr Reaper cross examined Mr Pearson about who had drafted and prepared his affidavit. Mr Pearson conceded his affidavit had been drafted for him by the Trustee’s former lawyers:
…You’ve just said that the affidavit was drafted by someone else and given to you already the way it is now. Did you write any of that yourself? --- Parts of it, I did, yes.
And what parts were they? --- I can’t remember. It’s too long ago. …
(transcript p 149 line 44 - p 150 line 1)
140 In fairness to Mr Pearson, he later gave evidence that the Trustee’s former lawyers had contacted him by phone before they had drafted his affidavit and he had told them about what had happened.
141 Mr Pearson’s evidence was that he had been present at the Property from approximately 9.00 am until 5.00 pm on both days. He had undertaken two to three previous jobs to supervise removals of commercial properties but never a residential property. His recall was that, by the end of the second day, the only possessions remaining at the Property had been a box containing rubbish and a medical box which had included syringes. He said he had not allowed the security staff to enter the premises other than to go to the toilet and when they had entered for those purposes he had stood outside the toilet door and escorted them outside. He was adamant that he had ensured the Property had been locked up at night and on 20 December 2016 when the security guards left. He stated that the security guards had not had keys to the Property and he had told them that if they had to go to the toilet at night they “would have to go just behind the shed, or something”. He said that the only other persons he had allowed to enter the Property during those days had been two real estate agents who had been present for about 20 minutes.
142 Mr Pearson denied that he had told anyone from AA that it was okay for them to take a bottle of alcohol out of the pantry, or to tell them to leave behind any items including a PlayStation, a gaming system, or other electrical goods. Mr Pearson accepted that it was possible that an outside security guard may have said something to the staff of AA when he was inside the house or just standing by the door, but he doubted that they had. He denied that there could have been anyone else inside the Property who could have given such a direction. He denied that he had not been present when the team from AA had arrived on the morning of 19 December 2016. He denied that he had told the staff of AA to leave wooden containers in the garage. He accepted that as at the end of 20 December 2016, there had been a cardboard box full of waste paper left in the garage, but “that was probably the only thing besides the lawnmower fuel and the paint.”
143 Mr Pearson acknowledged that once AA had finished removing Mr Reaper’s and Ms Fisher’s possessions from the Property he had advised Corsec that there was no longer any requirement for it to provide security guards at the Property.
144 Mr Reaper finally put the credibility and truth of Mr Pearson’s entire account in issue, which Mr Pearson robustly denied.
Findings of fact
145 The findings of fact necessary for the disposition of Mr Reaper’s common law claim are of relatively short compass, save as may potentially arise as to the quantification of damages. I return to that question later. For the present, it is sufficient to note that the damages Mr Reaper claims as particularised in his three, and Ms Fisher’s two, Cost & Loss Statements add to a combined total of $99,068.19.
146 I am satisfied that both Mr Vrescky and Mr Eddy gave truthful evidence. I am satisfied that Mr Eddy attended the Property on the afternoon of 14 December 2016 as the Trustee’s agent to take possession of it. He then took photographs to prepare the WE Listing Report as reported at the time to Mr Vrsecky:
I have taken inventory and photos of assets, identifying major items separately and minor items (Clothes, kitchen utensils, toys etc.) as group lots, either by drawer, cupboard, bag, etc. I had discussed this with Ben Conrad onsite.
I will have the list processed along with the photos identifying each line item. I will forward them ASAP.
147 However, the WE Listing Report that Mr Eddy later produced is not, notwithstanding his description of it, remotely within the ordinary meaning of the word, an “inventory”. The Macquarie Dictionary defines that term as follows: “a detailed descriptive list of articles, with number, quantity and value of each.” The WE Listing Report includes no such details. Of course Mr Eddy is not to be faulted for how he expresses himself but as the tortuous path in this proceeding illustrated both when Mr Eddy was being cross examined by Mr Reaper and when Mr Devanny called on Mr Reaper to explain how he had, by reference to the WE Listing Report, identified the articles he asserted had been in the Property but not later returned to him, the WE Listing Report was, at best, only an indicative document. It left considerable scope for uncertainty about whether or not specific articles had, or had not, been in the Property.
148 Because no inventory as such was prepared by Mr Eddy, neither Mr Pearson nor AA was given a list of the contents of the Property to allow them to check off each item as it was packed and later loaded.
149 It is uncontentious that Mr Eddy left the supervision of packing and uplift (including the supervision of the staff of AA and Corsec) to Mr Pearson.
150 The only aspect of Mr Eddy’s evidence which requires further mention relates to his testimony that he had opened every one of the 13 boxes that he recorded in the WE Asset Listing as containing assorted paperwork. Mr Reaper submits that that evidence should not be accepted. In support of that submission he draws attention to the fact that the contents of those boxes, in contrast to the contents of other boxes, had not been photographed. Mr Reaper claims that some of those boxes had contained valuable electronic equipment which he had listed in Cost & Loss Statement 1 as having gone missing.
151 I accept that Mr Eddy gave honest evidence of his present recall of having opened those boxes and photographed their contents but, given no photographs appear in the WE Listing Report, I do not discount the possibility that Mr Eddy may have opened only a selection of those boxes (Mr Reaper accepts that six contained only paperwork) and then assumed that the others which looked the same had similar contents.
152 I have already set out the history of what occurred leading up to the events of 19 and 20 December 2016. I accept Mr Hanna’s evidence with respect to the circumstances in which AA was engaged and sent delivery trucks to the Property. He was not challenged in those regards. The import of that evidence was that it had been a last minute job and that AA was not supplied with an inventory of the articles Mr Eddy had engaged them to pack, transport and store. I accept his evidence that the job took longer than AA had expected and that he had arranged for a third truck to be dispatched to attend the Property on 20 December 2016 to complete the task of packing and removing the former occupants’ possessions. I also accept his evidence regarding the conversation he had with Ms Fisher in which she reported loss and damage to him after AA had returned Mr Reaper’s and Ms Fisher’s personal property. I accept he had offered compensation which she had declined.
153 Having addressed those preliminary considerations, I turn to the events of 19 and 20 December 2016. In respect of those events, Mr Mansor and Mr Pearson are the only witnesses present at the Property during those two days.
154 Where the evidence of Mr Mansor differs from that of Mr Pearson, I am satisfied that I should accept Mr Mansor’s testimony.
155 Mr Mansor gave evidence in chief as contained in his affidavit sworn on 9 February 2018. He presented as an earnest and sincere witness. When cross-examined (to the limited extent he was), his responses carried a ring of conviction and truth. The evidence he gave both in chief and under cross-examination was consistent with what I take to be the account he and his fellow AA staff provided to AA shortly after the events that occurred and which in turn was the basis for the correspondence later copied to Mr Reaper.
156 To the extent that the demeanour of a witness entitles a court to make findings as to credit, I am satisfied that Mr Mansor was a witness of the truth.
157 I accept Mr Mansor’s denial of the suggestion put to him by Mr Devanny that his affidavit had been drafted by Mr Reaper. Mr Mansor’s evidence was that he had met Mr Reaper only twice: first when he had delivered his and Ms Fisher’s possessions after their goods had been released from storage and thereafter when he had seen him in court during the hearing.
158 Mr Devanny did not put to Mr Mansor that his evidence that a “supervisor”, addressing the AA staff had directed them to leave items such as a PlayStation, Wii gaming system, electric guitar and other electrical items and that those items were not loaded into AA’s trucks was either mistaken or a lie.
159 Mr Devanny did not put to Mr Mansor that his evidence that when AA was loading the contents of the workshop garage a “supervisor” had told them not to touch the wooden chests and that two or three wooden chests, one being a chest in a workshop, had been left at the Property as instructed was either mistaken or a lie.
160 Nor were other similar aspects of Mr Mansor’s evidence in chief put in issue. In those circumstances, I am entitled to find the facts Mr Mansor deposed to in his affidavit at [4], [5], [7], [8], [9], [10], [12], [13], [14] and [15], none of which were the subject of cross-examination, to have been established as fact. I so conclude.
161 Necessarily, that conclusion means that I have not accepted some critical aspects of Mr Pearson’s testimony. I make no finding of dishonesty on his part. However, I am satisfied that Mr Pearson’s confidence in his recall of the rigour of his supervision of the events at the Property on 19 and 20 December 2016 cannot be reconciled with the facts. While a small and otherwise inconsequential matter, it struck me as telling that in his affidavit Mr Pearson deposes that if the Corsec security staff had wanted access to the Property they would need to knock or ring the doorbell to gain access. In cross-examination, Mr Reaper put it to Mr Pearson that there was no doorbell. I did not take Mr Pearson to have disputed that point.
162 Mr Pearson’s evidence in cross-examination that he had been at all times aware of the conduct of a team of five removalists and the Corsec security personnel during the entire period of two days struck me as inherently implausible.
163 His certainty that he had secured the Property overnight on 19 December 2016 and had arrived on the morning of 20 December 2016 before the AA team had entered it and had never allowed any security guard inside save for supervised visits to the toilet contrasted starkly with his evidence in cross-examination that he could not remember which parts of his affidavit were in his own words and which parts had been adopted by him as drafted by the Trustee’s former lawyers because that had been so long ago.
164 I am reinforced that my finding that events occurred as Mr Mansor rather than Mr Pearson gave evidence of them is one I should make having regard to the fact that the Trustee did not call any employee of Corsec Security as a witness. I am satisfied that on the basis of Jones v Dunkel [1959] HCA 8; 101 CLR 298 (Jones), the Court is entitled to draw the inference that their evidence would not have assisted the Trustee.
165 Such an inference may, but does not necessarily, arise when there is an unexplained absence of a witness to address a contention adverse to a party. Mr Devanny submits there is no unexplained absence of any witness because Mr Pearson gave evidence that he, and he alone, had been responsible for the supervision of the removalists. That, however, misses the point.
166 The Trustee’s legal advisors must have been aware of correspondence from AA (at least from 5 February 2018 when Mr Pearson’s affidavit was sworn to which it is an annexure) putting them on notice that Mr Pearson’s account might be in dispute. The affidavits of Mr Hanna and Mr Mansor (filed on 1 February 2018 and on 14 February 2018 respectively) put the Trustee on notice that Mr Reaper would be calling witnesses to dispute Mr Pearson’s version of events. The Trustee was on notice that among the issues that would require resolution in this proceeding was whether or not Mr Pearson had secured the Property such that the possessions of the former occupants could not be accessed overnight on 19 December 2016 and more generally as to what instructions he might or might not have permitted the security guards employed by Corsec to give to Mr Mansor and the team from AA.
167 As noted, Mr Pearson’s affidavit annexes a copy of AA’s correspondence. His evidence was essentially responsive to that correspondence.
168 In those circumstances, given the Trustee’s case was that the evidence of Mr Pearson should be preferred over that of Mr Mansor and other potential AA witnesses then in prospect of being called to give evidence for Mr Reaper, I am satisfied there was an unexplained absence of evidence from any of the security team engaged through Corsec who had been present at the Property over 19 and 20 December 2016.
169 Mr Devanny does not contend that such witnesses were unavailable. Beyond his submission that it was sufficient for the Trustee to call only Mr Pearson, Mr Devanny did not otherwise explain their absence. I am satisfied that Jones entitles the Court to draw the inference that their evidence would not have assisted the Trustee.
170 I am satisfied that the events Mr Mansor deposed to, which I have found did occur, created an opportunity for a not insubstantial amount of the chattels then in the Property and its associated outbuildings to be unlawfully misappropriated.
171 I am satisfied that the absence of any true inventory was a significant weakness in the system employed by the Trustee’s agents during the period in which Mr Reaper’s and Ms Fisher’s chattels came to be packed and uplifted. Because there was no means for Mr Pearson to check the items that were to be packed and loaded by AA, there was virtually no risk that any misappropriated item would be noticed by him as missing.
172 I make no findings about who might have taken advantage of that near risk-free opportunity. There is no evidence that would entitle me to do so. However I am satisfied that all of the persons present at the time might have had or have acquired, innocently or otherwise, knowledge of that opportunity.
173 I am satisfied that AA’s letter as annexed to Mr Pearson’s affidavit is admissible as a business record of AA pursuant to s 69 of the Evidence Act 1995 (Cth). It contains reference to AA’s removalists having reported to AA that, upon returning to the Property on the morning of 20 December 2016, they had arrived before Mr Pearson and had found the premises unlocked. I accept that evidence.
174 I am satisfied that in consequence of what I have found to have occurred, significant opportunities came into existence that would allow a person or persons unknown to misappropriate a not insubstantial part of the former occupants’ chattels overnight on 19 December 2016 after Mr Pearson had departed the Property.
175 I reject that I should refrain from making such a finding having regard to Mr Pearson’s evidence that he had not noticed anything to be missing when he arrived on the morning of 20 December 2016. I accept Mr Pearson’s evidence that the boxes he saw on the morning of 20 December 2016 were still taped up and showed no signs of having been tampered with. However, that does not exclude the possibility that one or more whole boxes might have been removed without arousing Mr Pearson’s suspicions. I find no count had been made of them. Mr Pearson gave evidence that he photographed the boxes as they were loaded into AA’s trucks but no such photographs are in evidence. There is no evidence to suggest Mr Pearson had checked the number of boxes remaining in the Property for uplift against a manifest or inventory he had prepared the night before when he arrived on the morning of 20 December 2016.
176 The undisputed evidence before the Court is that the packing job at the Property being undertaken by AA had remained unfinished by the end of the work day on 19 December 2016. It is uncontentious that as well as many boxes of packed items there were still a considerable number of loose items remaining in the house and garage yet to be boxed. It is far from implausible that some of those loose items could have been misappropriated without Mr Pearson having noticed.
177 I accept Ms Fisher’s evidence that she had noticed almost immediately that some of her and Mr Reaper’s household possessions were missing when the goods were delivered to them. Her account does not appear to me to be improbable or a matter of later invention, given that she made a prompt complaint to AA. I am satisfied that a not inconsiderable number of Mr Reaper’s personal possessions were not returned to him by AA.
178 I am also satisfied that Mr Reaper gave truthful evidence to the same effect. Mr Reaper’s and Ms Fisher’s evidence is consistent with undisputed contemporaneous events. It is not in dispute that Ms Fisher complained immediately to AA and that Mr Reaper had promptly reported his belief that a considerable part of his possessions had been stolen. He made those reports both to the Trustee and the Police.
179 The obvious inference I am entitled to draw is that those items had not been returned to Mr Reaper because, prior to their uplift by AA, a person or persons unknown had taken advantage of an opportunity that had been created, as discussed above, to misappropriate them.
180 I draw that inference. I find on the balance of probabilities that a not inconsiderable proportion of Mr Reaper’s and Ms Fisher’s possessions, without the Trustee’s or their owners’ authorisation, were removed from the Property by a person or persons unknown at some time during the night of 19 December 2016.
181 Necessarily, those items did not find their way into AA’s storage facilities at Thomastown and were missing when the balance of their possessions were delivered to Mr Reaper and Ms Fisher.
182 I also find on the balance of probabilities that a large number of Mr Reaper’s and Ms Fisher’s possessions were damaged in the course of AA’s transport of them to Thomastown. Mr Hanna gave uncontroverted evidence (at [17] of his affidavit) that AA’s removalists had loosely loaded the contents of the workshop garage into a third truck on 20 December 2016, and that those contents were transported in that loose state with other items such as push bikes, air compressors and other articles which had been too large to box.
183 In those circumstances, I find it more probable than not that any loosely loaded and unboxed contents of that truck would have jolted around, banged against each other and suffered some damage during their transport to Thomastown.
184 In respect of damage caused to Mr Reaper’s and Ms Fisher’s chattels, I also accept Ms Fisher’s evidence, supported as it is by the photographs that she exhibits to her affidavit, as proof of damage to the specific items she lists in annexure SPF 5. However, as much of the damage depicted in those photographs appears to have been superficial, that finding does not amount to my accepting her estimates of the cost of repairs.
The applicable law
185 The Court proceeds on the basis that, to the extent Mr Reaper can make good his claim that the articles that he alleges were not returned to him or were returned in a damaged condition belonged to him, the majority of those chattels were not vested in the Trustee by reason of his bankruptcy.
186 The Court proceeds on that basis because s 5(1) of the Bankruptcy Act defines the term “the property of the bankrupt” (save in circumstances not presently relevant) so as to exclude any property owned by a bankrupt that is not divisible amongst the bankrupt’s creditors. Thus s 58(1) of the Bankruptcy Act, which otherwise operates to vest the whole of the property of a bankrupt in his or her Trustee upon a sequestration order being made, does not operate to vest in the Trustee any property of a bankrupt that is not available for distribution to his or her creditors.
187 In turn, subss 116(2)(b) and (ba) of the Act respectively provide that a bankrupt’s “household property” and “personal property” “of a kind prescribed by the regulations” is incapable of division amongst his or her creditors.
188 The regulations that give content to those provisions are regs 6.03 and 6.03A of the Bankruptcy Regulations 1996 (Cth) (Regulations).
189 It is unnecessary to set out the terms of those Regulations. The Trustee does not suggest that the majority of the Mr Reaper’s possessions left behind at the Property would not fall within the terms of those provisions.
190 However, the Trustee did suggest that Mr Reaper’s tools of trade may have been divisible property.
191 Section 116(2)(c) of the Bankruptcy Act provides that property which is “for the use of the bankrupt in earning income by personal exertion” to a total value not greater than the limit prescribed by the Regulations is not divisible amongst creditors. The amount prescribed by reg 6.03B(1) as the total value of such property is $2,600 as indexed to the CPI from 1 July 1996.
192 It is unnecessary to do any precise arithmetic to conclude that, given the values Mr Reaper has ascribed in his various Cost & Loss Statements to his tools and electronic devices, the total value of his property held for the purpose of his earning income was likely to have exceeded the value prescribed by the regulations. It may be noted in that regard that those estimates include only the values of items Mr Reaper has asserted to be missing or damaged. It takes no account the value of his tools as were re-delivered. Their value must be also taken into account for the purposes of reg 6.03B(1).
193 Mr Devanny submits that the Trustee in any event has renounced any interest in such of Mr Reaper’s tools of trade which may have vested in him. However the evidence Mr Devanny points to in that regard is a declaration made on 22 December 2016 (Annexure PV-13) in the aftermath of the relevant events by the Trustee’s former lawyers. Such a declaration could not have had any prior operative effect.
194 I therefore am satisfied that when the Trustee took possession of the Property, the chattels within it had contained a mix of Mr Reaper’s personal property, Ms Fisher’s personal property (said by Mr Reaper and Ms Fisher to be limited to three items) and some property, being Mr Reaper’s tools of trade, which by reason of their total value being in excess of that provided for by the Regulations, may have been vested in the Trustee.
195 I proceed on the basis that, notwithstanding any difficulties Mr Reaper may have unnecessarily caused the Trustee in his administration of his estate, the Trustee was not discharged of all obligation to have regard to Mr Reaper’s proprietary interests in his personal possessions, or indeed those of Ms Fisher. As noted in Murray M and Harris J, Keay’s Insolvency (8th ed., Thomson Reuters, 2014) at 51:
Although the trustee is not to be regarded as the agent of the bankrupt, and does not act according to the bankrupt’s directions, the trustee must not ignore the interests of the bankrupt.
196 Mr Devanny submits that the appropriate lens through which to view the Trustee’s conduct in removing the former occupants’ possessions from the Property and arranging for them to be transported and stored at Thomastown is that the Trustee’s actions should be seen as part of his duty to recover the Property which had vested in him. All that was required was that he take reasonable precautions. For that proposition, Mr Devanny cited Smithers J in Mannigel v Aitken [1983] FCA 206; 77 FLR 406, the reasoning of which was approved of by a Full Court of this Court (Northrop, Wilcox and Cooper JJ) in Adsett v Berlouis [1992] FCA 549; 37 FCR 201 at [27]:
A trustee must take all reasonable and proper measures to obtain possession of the trust property and to preserve it, and to secure it from loss. He must take reasonable precautions to see the property is not stolen or lost by default. … but beyond this, he is not bound to adopt further precautions.
197 However, that reasoning self-evidently refers to the duty of care a trustee is required to exercise with respect to his or her duty to obtain possession of and manage trust property; it is not directed at and does not speak to a trustee’s responsibility in respect of any property not vested in him. Only a small fraction of Mr Reaper’s possessions (his tools of trade to a value greater than provided for by reg 6.03B(1)) were arguably vested in the Trustee.
198 Neither Mr Devanny’s nor my research has identified any authority which directly speaks to the circumstances arising in this case. However in Haniotis v Dimitriou [1983] 1 VR 498 (Haniotis) it was held that the mere changing of locks by a person entitled to possession of a property while goods belonging to the previous occupants were still inside did not manifest an act of possession over those goods. I am therefore prepared to assume that had the Trustee simply taken that course there would have been no act of possession on his part.
199 I am also prepared to assume, given his undoubted right to have vacant possession of the Property and his duty to realise that Property for the benefit of the estate, that the Trustee had an implied right to prepare the Property for sale.
200 I accept therefore that the Trustee would have been entitled to require the former occupants to make arrangements acceptable to him to remove, or to permit him to remove, all of their remaining possessions from the Property to facilitate that course to be undertaken. I do not doubt that it would have been open to the Trustee to apply to the FCCA for orders to that effect.
201 There were options potentially open to the Trustee, without seeking a court order, which would not have involved any act of possession on the Trustee’s part in respect of Ms Fisher’s or Mr Reaper’s chattels.
202 Had the Trustee informed Mr Reaper and Ms Fisher (who I infer he must have understood to be the owners of the items) that he had taken possession of the Property, and that they might, at their own expense, nominate a removalist that the Trustee would engage to pack and remove their possessions, then, notwithstanding his refusal to permit them re-entry, on the authority of Haniotis the Trustee would not have exercised any act of possession.
203 Equally, had the Trustee simply asked Mr Reaper and Ms Fisher how they wanted their property to be dealt with and had he complied with any reasonable requests on their part, the Trustee could not be asserted to have exercised any act of possession over their chattels.
204 But that discussion is by way of a side-wind. This Court must determine the legal consequences of the actions actually taken by the Trustee, not those that might attach to another course open to him which was not taken.
205 In the present case, even before he had secured possession of the Property, the Trustee had given instructions to his agent, Mr Eddy, to implement a predetermined course of conduct with regard to the personal property of its former occupants. With respect to the majority of those possessions, the Trustee neither had, nor asserted to have, any legal interest or right. The plan Mr Eddy was to follow included: (a) engaging security guards to prevent Mr Reaper and Ms Fisher re-entering the Property should they seek to collect their own property; (b) making a list of the articles in the Property (a task I have found was not adequately undertaken); (c) arranging for those articles to be packed; and (d) arranging for those articles to be transported from the Property and placed into storage at the expense of Mr Reaper’s estate. The nature of the “right” the Trustee thereby necessarily asserted was at least possessory; it involved a voluntary act of the carrying away of articles of personal property owned by Mr Reaper and Ms Fisher and for at least a significant period of time excluding Mr Reaper and Ms Fisher from accessing them. I do not think it improper to infer that the Trustee proceeded notwithstanding his either knowing or being indifferent to the fact that it would not be unusual for transport and storage firms to be closed over the Christmas break. I find that fact to be a matter of common knowledge.
206 The “possessory right” asserted went even beyond that. As noted previously, the Trustee’s then solicitors, Madgwicks, had sent an email on 22 December 2016 on the Trustee’s behalf advising Mr Reaper and Ms Fisher that if they did not collect their possessions or make other arrangements at their expense by 20 January 2017, their possessions would be destroyed. To secure the return of their possessions, Mr Reaper and Ms Fisher would need to pay AA for their subsequent delivery.
207 In those circumstances, the Court cannot accept Mr Devanny’s submission that the conduct undertaken by the Trustee by his agents (at his direction) had involved no act of possession over the former occupants’ personal property. What was done was not a mere incident of the execution of the Trustee’s duty to take possession of and sell the bankrupt’s Property. The Trustee’s plan as executed and implemented by his agents necessarily involved his taking actual possession of the former occupants’ personal chattels and exercising dominion over them.
208 On that premise, the correct legal characterisation must be that the Trustee either committed a trespass to Mr Reaper’s and Ms Fisher’s goods or became a bailee of them.
209 A trespass to goods occurs when there is a wrongful interference with a possessory or legal right of a third party. It may be doubted that it would be apt to describe what the Trustee did in such terms. A bailment however arises simply upon the voluntary taking into possession by a person of the goods of another.
210 The better view is that the voluntary taking into possession by the Trustee of Mr Reaper’s and Ms Fisher’s goods created a bailment.
211 I reject Mr Devanny’s submission that it would be inappropriate to characterise the conduct of the Trustee as creating a bailment because to do so “would elevate the obligations of a bankruptcy trustee to non-vested property higher than that of vested bankruptcy property”.
212 It is entirely unexceptional that the law will impose a higher duty on a person’s dealings with property in respect of which he or she has no interest than that imposed in respect of property vested in them.
213 I am reinforced in my conclusion that what occurred cannot be characterised as merely an incident of the Trustee’s duty to recover and sell the Property because I take it to be uncontentious that the Trustee had no reason to believe, nor was it the fact, that the only chattels in the Property were those owned by Mr Reaper. There is no evidence to suggest that the Trustee was entitled to proceed on the basis that the chattels might not also include items of property owned by Ms Fisher and property owned by unknown third parties. The proper legal characterisation of what the Trustee did with the chattels in the Property must therefore take into account that the Trustee proceeded notwithstanding his conduct involved the carrying away of not only Mr Reaper’s personal property in respect of which he had no legal rights, but also property owned by Ms Fisher, and potentially that owned by other third parties including their children.
214 I refer to the comprehensive summary of the relevant principles as to when a bailment comes into existence and the duties that arise as stated by Meagher JA (Barrett JA and Sackville AJA concurring) in Cambridge v Anastasopoulos [2012] NSWCA 405 (Cambridge) at [13]:
Before turning to the way the primary judge dealt with these matters, it is necessary to note a few relevant principles. First, a bailment results from the voluntary taking of possession by a person or persons of the goods of another. That taking of possession does not require the bailor’s consent: Hobbs v Petersham Transport Co Pty Ltd [1971] HCA 26; 124 CLR 220 at 238; The Pioneer Container [1994] 2 AC 324 at 341-342; WD & HO Wills (Australia) Ltd v State Rail Authority of New South Wales (1998) 43 NSWLR 338 at 353-354; East West Corpn v DKBS AF 1912 A/S [2003] QB 1509 at [24]; Palmer on Bailment, 3rd ed (2009) Thomson Reuters at para 1-012. Secondly, possession may be taken by delivery to the bailee or to a servant or agent on its behalf. Thus, a servant acting in the course of his employment or an agent acting for the purposes of his principal may take possession for the employer or principal and thereby constitute it a bailee: Pollock and Wright, Possession in the Common Law (1888) Clarendon Press at 57, 163; Ultzen v Nicols [1894] 1 QB 92; Morris v CW Martin & Sons Ltd [1966] 1 QB 716 at 725. Thirdly, a bailee with duties analogous to those of a bailee for reward, is liable if the subject matter of the bailment is damaged whilst in its possession unless it shows that the damage occurred without any neglect or default of itself or any servants to whom it delegated that duty: Tozer Kemsley & Millbourn (A'asia) Pty Ltd v Collier's Interstate Transport Service Ltd [1956] HCA 6; 94 CLR 384 at 397-398; Morris v CW Martin and Sons Ltd at 726, 729; Hobbs v Petersham Transport Co Pty Ltd at 233-234, 240-241; Pitt Son & Badgery Ltd v Proulefco SA [1984] HCA 6; 153 CLR 644 at 646, 649. Finally, if a bailee transfers actual possession to a third party for a limited period or specific purpose, and that sub-bailment is expressly or impliedly authorised by the bailor, the intermediate bailee must take reasonable care in the selection of the sub-bailee and may remain liable for harm resulting from a breach of duty on the part of that sub-bailee: Palmer on Bailment, 3rd ed at para 23-052; East West Corpn v DKBS AF 1912 A/S at [29], [57], [58].
215 In my view, it is settled that in the case of a bailment, “two principles of the common law of bailment are fundamental”: Volcafe Ltd v Compania Sud Americana De Vapores SA [2018] UKSC 61 per Lord Sumption JSC at [8]-[9]:
8 … The first is that a bailee of goods is not an insurer. His duty is limited to taking reasonable care of the goods. …
9 The second principle, which is equally well established, is that although the obligation of the bailee is thus a qualified obligation to take reasonable care, at common law he bears the legal burden of proving the absence of negligence. He need not show exactly how the injury occurred, but he must show either that he took reasonable care of the goods, or that any want of reasonable care did not cause the loss or damage sustained. …
216 His Lordship’s analysis is consistent with that of the Court of Appeal in Cambridge and of McArthur J in Makower, McBeath & Co Pty Ltd v Dalgety & Co Ltd [1921] VLR 365 (Makower) insofar as it relates to a bailment for reward.
217 Mr Devanny submits that if, contrary to his primary submission, the Court were to hold that the Trustee’s conduct was that of a bailee, the bailment so created was both gratuitous and involuntary.
218 I do not accept Mr Devanny’s submissions that the relationship of bailment so created should be characterised as involuntary. Other courses, not involving any act of possession, were open to the Trustee. The Trustee’s taking of possession was not involuntary; it was the intended outcome of the plan he had instructed his agent Mr Eddy to follow.
219 Nor do I accept that the bailment that came into existence was gratuitous. It may be accepted that no contract for payment existed between Mr Reaper and the Trustee. However, the Trustee does not submit that he pursued the course he did on a basis other than that he would recoup his costs and recover his fees out of Mr Reaper’s estate. There is no suggestion that the Trustee met the costs of what was done in his personal capacity.
220 In my view, having voluntarily taken possession of Mr Reaper’s and Ms Fisher’s personal possessions, the Trustee became a bailee for reward. To the extent in these unusual circumstances that any legal analysis of the relationship might not fit elegantly, I am satisfied that bailment is the most analogous legal relationship and that the duties and liabilities attaching to a bailment for reward are those I ought to apply.
Application of legal principles to the facts found
221 In Cambridge, it was held by the NSW Court of Appeal that a bailee with “duties analogous to those of a bailee for reward” is liable if the subject matter of the bailment is damaged whilst in his or her possession, unless the bailee shows that the damage occurred without any neglect or default of itself or any servants to whom he or she has delegated that duty.
222 I am satisfied that that proposition correctly states the law.
223 I have found that the Trustee, by his agents, executed a plan to take possession of Mr Reaper’s personal possessions as had been located within the Property at the time the Trustee secured entry. I find that, in so doing, the Trustee became a bailee of those possessions. I am satisfied that the character of the bailment so created was, or properly is to be characterised as analogous to, a bailment for reward.
224 I am satisfied that Mr Reaper’s and Ms Fisher’s possessions, the subject matter of the bailment, were damaged whilst in the Trustee’s possession. That damage (including the misappropriation of some chattels) occurred to a portion of Mr Reaper’s goods.
225 Having regard to my findings set out above as to what occurred on 19 and 20 December 2016 (see above at [153]-[176]), I reject that the Trustee as bailee has shown that the damage occurred without any neglect or default of himself or any servants to whom he delegated that duty. In that regard, I observe as follows:
The system of photographing the contents of the Property implemented by Mr Eddy was insufficiently comprehensive to enable the Trustee to provide a manifest of loading to AA so as to form the first link in a chain of supervised uplift for the goods which the Trustee had instructed Mr Eddy to implement.
Mr Eddy reported to the Trustee regarding how he had discharged the Trustee’s instructions to list the former occupants’ possessions.
The Trustee did not direct Mr Eddy to make a complete list.
No list or inventory of the goods to be uplifted was ever supplied to AA.
Mr Eddy used the services of a security company he had never used before and had no knowledge of.
Mr Pearson, to whom Mr Eddy had delegated the task of supervision, permitted (I am prepared to accept unwittingly) the security personnel attending at the property to give instructions to AA not to load certain goods.
Deficiencies in Mr Pearson’s supervision, over the period of 19 and 20 December 2016, provided opportunities for the unauthorised removal of some considerable part of Mr Reaper’s personal possessions without any significant risk that any misappropriation would be detected.
Mr Pearson failed to insist that AA pack and not just loosely load AA’s third truck with the remaining items of Mr Reaper’s possessions.
226 Those were acts of neglect or fault on the part of the Trustee and the Trustee’s servants and agents. Accordingly, the Trustee is liable to Mr Reaper as a bailee of his property for such damage he can prove he actually sustained.
227 Even if I am wrong, and the bailment should be characterised as gratuitous, as Mr Devanny submits, I would still find the Trustee liable. Mr Devanny relies on the obiter observations of McArthur J in Makower. In passages relied upon, his Honour stated (at 375):
In the Court of Appeal – Bullen v Swan Electric Engraving Co [1907] 23 T.L.R. 258 – Sir Gorrel Barnes stated the principle of law to be that a gratuitous bailee must show “that the loss occurred through no want of reasonable care on his part – that is to say, as much care as a prudent man would use in keeping his own property.”
It seems to me, therefore, that where a gratuitous bailee of an article entrusts it to his servant for safe keeping, and the article is lost owing to the negligence of such servant, the gratuitous bailee is not liable if he proves to the satisfaction of the Court that a reasonably prudent man would in similar circumstances have entrusted such article (if it had been his) to such servant (if such servant had been his). But a bailee for reward would in such a case be liable, because in the words of Walton, J., “he undertakes that all reasonable care will be exercised by himself and his servants.”
228 I would decline to find that the Trustee has proved to the satisfaction of the Court that a reasonably prudent man would have entrusted his own goods to the care of his servants in the circumstances above.
229 A reasonably prudent man, having regard to his own interest in his own personal possessions, would have insisted on a proper inventory being taken. In that regard I note the Trustee was advised by Mr Eddy by email on the evening of 14 December 2016 as to the limitations of what he had done to list the contents of the Property. He would not have delegated responsibility to Mr Eddy without being assured Mr Eddy would take personal responsibility for his property’s care and would not have authorised Mr Eddy to sub-delegate the task to Mr Pearson and the staff of an unknown security company.
Quantifying Mr Reaper’s damages
230 Mr Reaper carries the burden of proving his damages. In the ordinary course, a bailee who has taken possession of a number of items without cataloguing those items could not dispute a claim of this kind simply because it was based on the claimant’s own memory of the items. That would require the bailor to carry the burden that the bailee knowingly assumed. However that observation assumes the person who is making the claim can be accepted to be a credible witness and has provided plausible evidence of those items’ value.
231 In this case, Mr Devanny submits Mr Reaper should not be accepted to be a witness of the truth in regard to the specific claims for damages he advances.
232 Mr Vrsecky has exhibited to his affidavit examples of the reasons for judgment delivered in other proceedings in which he and Mr Reaper were parties in respect of disputes relating to the Trustee’s duty in administering Mr Reaper’s bankrupt estate. I have made reference to some of those decisions at [6]-[24] above when setting out the background to these proceedings. Mr Reaper does not submit that I should disregard those judicial findings.
233 While not determinative, my assessment of Mr Reaper’s credit must therefore take into account prior judicial findings that as between the Trustee and himself, Mr Reaper had been prepared to make wholly unjustified allegations of fraud without any proper basis.
234 During these proceedings, while generally conducting himself with great restraint in the difficult role of a self-represented litigant, Mr Reaper occasionally displayed by his demeanour and the manner of his questioning of Mr Vrescky what I took to be illustrative of his ongoing ill-will towards the Trustee.
235 I have rejected aspects of Mr Reaper’s evidence as implausible, such as his assertion that he had had no forewarning that the Warrant was to be executed on 14 December 2016.
236 When under cross-examination, I formed the view that Mr Reaper was confident to an implausible degree about the precise details of what possessions he had had, and where those possessions had been located in his former home. Mr Reaper explained during cross-examination that the majority of the possessions that were taken or damaged were new or as-new. I did not find that evidence at all convincing.
237 Further, notwithstanding that Mr Reaper and Ms Fisher both gave consistent evidence to the same effect, I am satisfied that Mr Reaper’s evidence that all but three items left behind in the Property had been exclusively his property is so implausible as to justify some scepticism regarding his general credit. Mr Reaper’s claims to exclusive ownership of that property extended to all household items including even the food in the refrigerator.
238 Mr Reaper’s evidence was that he asserted his sole ownership because for some time he had been the only member of the couple in receipt of income and all of the possessions the subject of these proceedings had been purchased out of compensation money excluded from distribution to his creditors by reason of the provisions of s 116(2)(g) of the Bankruptcy Act.
239 However the evidence before me establishes that Mr Reaper and Ms Fisher had been joint owners of the Property prior to Mr Reaper’s bankruptcy. Ms Fisher was his partner and carer. Before his bankruptcy Ms Fisher had worked as bookkeeper for the building company which Mr Reaper had operated. It is an absurd proposition that although the house had been jointly owned, the household property within it was owned only by Mr Reaper. I infer in those circumstances that, while each of Mr Reaper and Ms Fisher might have owned particular items, their general household possessions (including but not limited to furniture, cooking utensils, beds and any television sets) were jointly owned by them. There is no evidence that that position with respect to their general household property would have materially altered after Mr Reaper’s bankruptcy.
240 Further, with respect to items such as any food and household consumables later acquired, I reject as entirely implausible that I should accept that those were the exclusive property of Mr Reaper simply because they may have been purchased out of money he provided.
241 For that reason, I proceed on the basis that Ms Fisher had a 50% interest in both categories of items. Ms Fisher makes no claim in these proceedings on her own behalf and any damages to which Mr Reaper may be entitled are limited to those he can prove he has himself sustained. He is not entitled to be compensated for any loss sustained by Ms Fisher.
242 However I accept the position to be otherwise in respect of Mr Reaper’s tools and his electronic devices such as he gave evidence he had acquired to build a 3D printer. Those are not ordinary domestic items. I would accept them to have been his exclusive property.
243 Of course, a factual finding that differs from the case advanced by a party is not necessarily a reason to doubt that party’s credibility, but Mr Reaper’s claim to 100% ownership of all of the items for which he claims damages is so startling as to lead the Court to consider the possibility that he might be willing to give exaggerated evidence to suit his interests.
244 I have accepted that Mr Reaper suffered not insubstantial losses as a result of the events which are the subject of his common law claim. However, for all of the reasons discussed above, I do not place such store on Mr Reaper’s credit as, for example, to exclude the possibility that in respect of the damages he has claimed by reason of the non-return of items of his property as he particularises in Cost & Loss Statement 1 that he may have both exaggerated the extent of his losses and included some opportunistic claims.
245 However I reject Mr Devanny’s submission that in consequence of the concerns I have expressed regarding the weight I can place on his evidence, that I should award Mr Reaper only nominal damages.
246 Mr Reaper has established that he has suffered loss by reason of the misappropriation of a not insubstantial part of his personal property during the period his chattels were in the possession of the Trustee as bailee. The Court has found that a person or persons unknown took the opportunity to misappropriate a not inconsiderable part of Mr Reaper’s possessions. I infer the items which were taken included those Mr Mansor gave evidence that AA had been instructed to put aside and not pack. I infer the reason AA was asked to put aside those items and not pack them was to facilitate their later misappropriation. Those items included inter alia a guitar, a Wii and three wooden boxes from Mr Reaper’s workshop. I am satisfied from their location in the workshop that the contents of those boxes would have included at least some of Mr Reaper’s tools of trade. I am satisfied that AA had been instructed not to pack them because their contents were of value to the person who later misappropriated them.
247 I am satisfied that the opportunity to misappropriate Mr Reaper’s property was not confined to those items, although to what extent that opportunity was taken is uncertain.
248 The Court has accepted Ms Fisher’s evidence that the quantity of missing items was sufficiently obvious as to have led her to contact AA shortly after her and Mr Reaper’s possessions had been returned to them to complain accordingly.
249 Mr Devanny did not put in issue that Mr Reaper made a complaint of theft to the police.
250 Mr Reaper has further established that he suffered damage by reason that an additional, not insignificant, part of his personal possessions were returned to him in damaged condition.
251 I am satisfied, given those findings, that Mr Reaper is entitled to an actual and not merely nominal award of damages.
252 In such circumstances notwithstanding the challenges presented, the Court is not excused from its duty to do its best to assess the quantum of damages Mr Reaper is entitled to. The Court’s duty is, as Flick J described in Hacker v Weston [2015] FCA 363; 13 ABC(NS) 225 at [140]-[146], to “ascribe some value having some rational basis upon the limited material available to the Court”. In that regard I make no deduction for such part of Mr Reaper’s tools of trade that at the time of the execution of the Warrant and their subsequent removal may have been vested in the Trustee. Whilst the Trustee’s disowning of his interest in those goods post-dated those events, I discern no reason why that renunciation would not take effect as from the point of time it was communicated by the Trustee’s former lawyers to Mr Reaper. I thus proceed on the basis that Mr Reaper is entitled to be compensated for their loss or damage.
253 It is convenient to commence the task of assessing Mr Reaper’s damages by reference to the five “Cost & Loss Statements” in which Mr Reaper has particularised the damages he seeks be awarded to him. However I make clear at the outset that that process can give guidance only and cannot produce a precise answer to what the Court, doing its best, should ultimately assess to be his damages.
Cost & Loss Statement 1
254 Mr Reaper’s evidence is that he compiled Cost & Loss Statement 1 by reference to the photographs and descriptions as provided in the WE Listing Report by identifying items he identified which he and Ms Fisher had left in the Property but which had not been later delivered. The list is extensive. In it, Mr Reaper gave evidence, he had listed missing items with reference to the rooms in which those possessions had been located. The heading “ID” was to be understood as a reference to the relevant page and photograph number of the WE Listing Report. The heading “QTY” was a reference to the number of items he claimed were missing. The column headed, “Replacement Cost,” set out the dollar value of what Mr Reaper claimed to be what it would cost him to replace each such item, rounded down to the nearest dollar. Mr Reaper’s evidence was that he had based all of his claims for replacement cost by reference to what he had discovered as the lowest list price for those goods after searching on the internet. Mr Reaper conceded that he had made no discount for any depreciation by reason of age and wear of the possessions that he asserted to be missing. The final column, “Total,” gave subtotals of the running total of the replacement costs he had claimed in respect of the missing possessions that had been in each room.
255 As noted earlier in these reasons, a simple calculation of the sum of the subtotals in Mr Reaper’s Cost & Loss Statement 1 amounts to $50,807.00.
256 Before consideration is given to the possibility that Mr Reaper may have exaggerated his claims, at the outset some reductions are necessary.
257 Item 1 in Table 4 of Mr Reaper’s Cost & Loss Statement 1 is the Carmen Miranda bust which the evidence before the Court establishes was Ms Fisher’s property. His claim for damages must be reduced by $350.00 for that item.
258 Table 5 contains a list of items missing from the Laundry: an overlocker, sewing machine, scissors and light pendant. For the reasons I have discussed above, as general household property I will attribute half of the ownership of those items to Ms Fisher, giving a reduction of $656.50 for those claims for damages.
259 I would similarly attribute half of the claims for damages for items in the yard listed in Table 8 (a pressure cleaner and a bird cage and garden ornaments) to Ms Fisher, resulting in a reduction of $349.50 for those claims.
260 The total I will exclude as claims made in respect of Ms Fisher’s property in Cost & Loss Statement 1 is $1,356.00. Deducting that from the total claimed reduces the aggregate amount to $49,451.00. Subject to what follows, I accept the balance was for claims made in respect of Mr Reaper’s property.
261 For the reasons I have given, I accept Mr Reaper has established that a considerable portion of his property as he has listed in Cost & Loss Statement 1 was not returned to him. Within that portion are the items that Mr Mansor gave evidence about being told not to pack, such as a guitar and the contents of wooden boxes AA was similarly instructed to leave. I decline to find on the balance of probabilities that beyond those items Mr Reaper’s losses were as substantial as he asserts.
262 Given that the Trustee did not prepare an itemised list of the items his agents removed from the Property, it is impossible for the Court to do otherwise than to approach Mr Reaper’s particularised claims for damages on an aggregate basis. Even accepting that the want of precision is at least in part the product of the Trustee’s inadequate methodology, I take it to be my duty to approach that task on a conservative basis so as not to award Mr Reaper damages for losses which he did not suffer. Doing the best I can in those premises to assess his damages, I will discount Mr Reaper’s damages as claimed in Cost & Loss Statement 1 by 50% because I cannot be satisfied that he may not have included a significant number of unjustified and opportunistic claims. I am satisfied, given I have found that a substantial portion of his possessions were misappropriated, it to be unlikely that Mr Reaper might have exaggerated his claims beyond that for which I have taken into account by such a substantial discount. The total so adjusted reduces to $24,725.50.
263 I would then discount that adjusted total further to take into account that the amounts Mr Reaper claims as the replacement cost for his missing items were based on prices he had identified through internet searches for similar new items, without regard to any necessity to discount his claimed damages for depreciation of his missing goods. I proceed on the basis that Mr Devanny did not advance a submission that Mr Reaper otherwise had not provided plausible estimates of what it would cost him to replace the items he claimed damages in respect of.
264 I make that further discount because I decline to proceed on the basis that almost all of Mr Reaper’s missing possessions had been “new” or “as new”. The scope of Mr Reaper’s claims in that regard was inherently implausible. I accept some reasonable portion of his possessions may have been new or as new for the reasons he gave in evidence but I cannot exclude the strong possibility that his evidence in those regards was exaggerated. I am satisfied that I should proceed on the basis that in the order of half of his possessions were neither new or near new.
265 Mr Reaper neither adduced any evidence nor submitted that there was no market for second-hand tools and electronic equipment. Nor did he submit it would have been impossible for him to acquire used items at a substantial discount. I am satisfied that a further substantial discount of 50% should be made. The total so adjusted is $12,362.75.
266 Doing the best I can on the limited materials before me, I would therefore indicatively assess Mr Reaper’s damages in respect of the claims he particularises in Cost & Loss Statement 1 in the sum of $12,362.75.
Cost & Loss Statement 2
267 Mr Reaper’s evidence was that he also compiled Cost & Loss Statement 2 by reference to the photographs and descriptions provided in the WE Listing Report and then by identifying those items which had been delivered in a damaged condition. The various columns which describe those items and set out the claims Mr Reaper makes are titled as follows: “Description” contains a brief description of the items Mr Reaper claims were returned in a damaged condition; “Repairable” refers to his opinion as to whether or not the damage he alleges could be repaired; “ID” refers to the room and photograph number in the WE Listing Report; “QTY” refers to the number of items returned in a damaged condition; and “Replacement Cost” in the case of items incapable of repair, refers to the dollar amounts Mr Reaper claims he would be required to outlay to replace the damaged item, and in the case of repairable items, refers to what Mr Reaper estimates to be the cost of repairs. No basis beyond Mr Reaper’s opinion is provided for the dollar amounts he claims as damages for the cost of repairs.
268 Mr Reaper’s evidence was that, in respect of items requiring replacement, he had sourced their replacement cost by the same means as he undertook for Cost & Loss Statement 1. However, in contrast to Cost & Loss Statement 1, Mr Reaper did identify the source of the internet prices he relied upon by reference to the online retailer (for example, Officeworks) from which his pricing was obtained. In sub-table 9 (at 32) of his Cost & Loss Statement 2, Mr Reaper also claims $178.76 for the cost of tools he gave evidence he had to purchase in order to repair those he could of the items returned by AA in a damaged condition. The total Mr Reaper claims in Cost & Loss Statement 2 is $16,146.76.
269 As in the case of Mr Reaper’s Cost & Loss Statement 1, Ms Fisher’s property must be first excluded. The evidence is that Ms Fisher was the sole owner of the small round table which appears in Table Item 1. I therefore reduce the total claimed by $165.00. I would also attribute to Ms Fisher 50% ownership of all of the remaining items appearing in Tables 1-5. Those items all appear to be general household items. The replacement costs Mr Reaper claims for those items total $9,740.00. I would thus reduce Mr Reaper’s claims by half of that amount (being $4,870.00) plus $165.00 for Ms Fisher’s small round table. The total so reduced comes to $11,111.76.
270 I accept Mr Reaper’s claims for tools and glue for furniture repair as listed in Table 9, which amounts to $178.76.
271 As to the balance of $10,933.00, I would make no reduction for possible exaggeration in respect of the number of items Mr Reaper claims suffered damage. I regard it as uncontentious that some damage was occasioned to many of Mr Reaper’s possessions because of the way they had been transported. The list of items he puts forward as having suffered damage in those circumstances does not appear exaggerated.
272 However, having regard to my obligation to proceed on a conservative basis, I am not persuaded that Mr Reaper is entitled to claim replacement costs. I would reduce the quantum Mr Reaper seeks as damages as particularised in Cost & Loss Statement 2 by 85%. That is a very large discount but I am not satisfied that Mr Reaper has established that the damage his possessions suffered was so extensive as to require total replacement in most of the instances.
273 I have accepted that loose items in the third truck AA employed to uplift such of Mr Reaper’s and Ms Fisher’s possessions as remained towards the end of 20 December 2016 may well have been bounced around and suffered some damage but, in the absence of evidence such as that that truck had had to brake suddenly, or was in an accident, I am unprepared to find that most of that damage was more than superficial. No witness gave such evidence. Mr Reaper annexed no photographs or other objective evidence to corroborate the extent of his asserted damages. The photographs Ms Fisher supplied in support of Mr Reaper’s claim for other damaged goods as set out in Cost & Loss Statement 4, with one exception, show only superficial damage. I regard that as some support for my conclusion that Mr Reaper’s claims for similarly transported goods were excessive. I accept some articles would have been damaged beyond repair (as appears to have happened to Ms Fisher’s antique chair) but I do not accept that most of the items which suffered damage had to be replaced. Mr Reaper’s evidence that he had discarded a very large number of items he had found damaged beyond repair such that they could not be independently valued was unpersuasive.
274 I therefore indicatively would assess Mr Reaper to be entitled to $1,827.71 ($1,639.95 being 15% of $10,933.00 plus $187.76) as his damages in respect of the losses he particularised in Cost & Loss Statement 2.
Cost & Loss Statement 3
275 Mr Reaper also claims damages as the consequence of Ms Fisher and himself not having had access to their possessions when they had moved into their new premises. He claims a total of $1,195.10 in Cost & Loss Statement 3 for personal expenses, including items such as food and sundries. A further total of $3,333.33 is claimed for household living essentials such as a kettle, table and chairs, refrigerator and the like which he gave evidence had had to be purchased. A third item claimed in Cost & Loss Statement 3 is the amount paid by Mr Reaper to AA for delivery of their possessions, in the sum of $2,750.00. By contrast to Mr Reaper’s Cost & Loss Statements 1 and 2, those particularised in Cost & Loss Statement 3 are supported by receipts. The total claimed by Mr Reaper as set out in that Statement is $7,278.43.
276 I would disallow the $1,195.10 claimed as damages for food and sundries in its entirety. I am not satisfied that a causal relationship has been proven as would link that loss to the Trustee’s duty as bailee. The Trustee was entitled to prevent Mr Reaper and Ms Fisher re-entering the Property. In my opinion, Mr Reaper fails to establish that those expenditures would not have been incurred in any event.
277 For the same reason I would disallow the amount of $3,333.33 claimed for household living essentials. I am not satisfied that default on the Trustee’s part as a bailee was responsible for Mr Reaper incurring those expenses.
278 I also disallow the sum of $2,750.00 claimed by Mr Reaper as damages for the cost he had to meet to secure re-delivery of their possessions. There is no evidence before the Court as to what expenses Mr Reaper would have had to incur had he made his own arrangements (or had he authorised the Trustee on his behalf to make such arrangements) to pack and transport his possessions from the Property to his new residence. I am not prepared to infer that it would have been less than $2,750.00.
279 I therefore would indicatively assess Mr Reaper as not being entitled to any damages in respect of his claims particularised in Cost & Loss Statement 3.
Cost & Loss Statement 4
280 What Mr Reaper claims as damages in Cost & Loss Statement 4 is compensation for damage sustained to items of furniture and art. In respect of each item, Ms Fisher has provided her estimate of the dollar value of the loss that Mr Reaper thereby incurred. However Ms Fisher advanced no basis for her estimates of how much it would cost to repair the chattels Mr Reaper alleges suffered damage. I have already noted that the photographs of the damage said to have been sustained suggests that Ms Fisher’s estimates were not for those items’ repair but for their full replacement cost. Thus, at item 9, the photographs Ms Fisher has exhibited show relatively minor scratches and marks to a Chesterfield lounge suite for which a claim of $6,800.00 is advanced. The total amounts claimed in respect of the repair of those damaged items as listed in Cost & Loss Statement 4 amounts to $16,393.00.
281 The sums claimed smack of wholly unjustifiable exaggeration. No evidence of any professional valuation for the cost of repairs was put before the Court, notwithstanding those items being available for that purpose. The only item in Cost & Loss Statement 4 that appears to have suffered catastrophic damage was an antique chair that Ms Fisher, not Mr Reaper, owned. I accept the items Ms Fisher photographed would require repair but I would allow only 10% of the damages Mr Reaper has particularised. That amount is $1,639.30.
282 I would then discount that amount by a further 50% to accommodate the fact that the bulk of those items were general household property in which Ms Fisher had an equal interest.
283 I would therefore indicatively assess Mr Reaper as being entitled to damages of $819.65 in respect of the losses particularised in Cost & Loss Statement 4.
Cost & Loss Statement 5
284 Cost & Loss Statement 5 is advanced in respect of items Mr Reaper claims later to have discovered were missing (including his personalised number plates) but it also includes a claim for damage he alleges was caused to an LG television that Mr Reaper claims to have found no longer worked some months later. The claims Mr Reaper makes in respect of the items particularised in his Cost & Loss Statement 5 total $8,443.00.
285 Of that amount Mr Reaper claims $3,795.00 to replace an LG television and $145.00 for its remote control. I reject that claim in its entirety. The television had been in Mr Reaper’s possession for some months after it had been returned to him by AA. I am not persuaded that I am entitled to find the cause of it having sound but no picture was caused by any default of the Trustee. Had I accepted Mr Reaper’s claim, I would in any event have discounted it by 50% as household property part owned by Ms Fisher.
286 As to the remainder of what is claimed pursuant to Cost & Loss Statement 5, I would accept Mr Reaper’s claim of $742.00 for the loss of his personalised number plates (and their covers and fixings) because that appears to me to be a specific and credibly asserted loss but would otherwise discount the remaining balance of $3,761.00 as I did in respect of the claims he made in Cost & Loss Statement 1. That is, I would discount that total by 50% for possible exaggeration, then discount the sum derived by a further 50% to accommodate Mr Reaper’s failure to make any provision for depreciation. The sum so derived is $940.25. To that I would add $742.00 representing his damages for the loss of his personalised number plate.
287 I would therefore indicatively assess Mr Reaper’s damages in the sum of $1,682.25 in respect of his claims as particularised in Cost & Loss Statement 5.
Conclusion on common law damages
288 My reasoning above does not pretend to precision. It is the product of the Court, having accepted that Mr Reaper has established his entitlement to more than nominal damages, doing its best on the limited materials before it to assess the amount he should be awarded.
289 The amounts I have indicatively assessed Mr Reaper as being entitled to as damages by reference to his five Cost & Loss Statements total $16,692.46. Given that that total is merely the product of the Court doing its best, having regard to the limited materials before it, to assess Mr Reaper’s damages, it would be entirely inappropriate and misleading to make an award having such an appearance of precision. It is the product of adding together amounts themselves incapable of being calculated with precision. I therefore round down the total to the sum of $15,000. That sum represents, having regard to the limited materials upon which the Court can be confident of acting, what the Court doing its best, has assessed to be a conservative but fair measure of the damages Mr Reaper is entitled to be awarded. There will be judgment for Mr Reaper in respect of his common law claim in that amount. The Court is unaware if the Trustee still holds undistributed funds from the sale of the Property but assuming that might be the case, I will order that the judgment not be met out of Mr Reaper’s estate.
Costs
290 The parties have not had an opportunity to make submissions on costs. My preliminary view is that Mr Reaper has not established that an award of exemplary damages should be made in respect of his common law claim. An award of that kind is punitive and should only be made in appropriate circumstances, such as when the Court is satisfied that the conduct of a party has been malicious, fraudulent or grievously reckless. While it might be contended that the Trustee acted with some degree of high handed disregard of Mr Reaper’s and Ms Fisher’s proprietary interests, I am presently unpersuaded that any aspect of the Trustee’s conduct could be said to have been so egregious as to justify such an order.
291 Mr Reaper has had a measure of success in respect of his common law claim and the Trustee has successfully resisted Mr Reaper’s application for an inquiry into his conduct. In those circumstances, my preliminary view is that, neither party having been wholly successful, in the exercise of my discretion, I would be entitled to make no order for costs. It is implicit that the Trustee should bear his own costs of defending these proceedings rather than recovering them from Mr Reaper’s estate. If either or both party wishes to seek orders on any different premise, they may do so by filing and serving proposed alternative orders and submissions, limited to three pages, by no later than 4.00 pm on Friday 10 May 2019.
292 If no submissions have received within that timeframe I will make orders consistent with the preliminary observations the Court has made above without further hearing from the parties.
I certify that the preceding two hundred and ninety-two (292) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Kerr. |
Associate:
