VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
Civil Division 
Civil Claims List	
vcat reference No. C3641/2019	
CATCHWORDS	
Application by an importer for an injunction to compel its freight forwarder to release goods – analysis of the parties’ contract – importer in breach of the contract and indebted to the freight forwarder – lien – application for injunction refused.	

APPLICANT	Premier Food & Beverage (Aust.) Pty Ltd ACN: 617 581 503	
RESPONDENT	Famous Pacific Shipping (Vic) Pty Ltd ACN: 105 001 161	
WHERE HELD	Melbourne	
BEFORE	Deputy President I. Lulham	
HEARING TYPE	Applicant’s application for an injunction	
DATE OF HEARING	24 May 2019	
DATE OF ORDER	4 June 2019	
DATE OF REASONS	4 June 2019	
CITATION	Premier Food & Beverage (Aust) Pty Ltd v Famous Pacific Shipping (Vic) Pty Ltd (Civil Claims) [2019] VCAT 809	

Order

1.	The application for the injunction is dismissed.

2.	The Respondent’s costs are reserved.

3.	If neither party has made an application by 31 July 2019, the principal registrar is directed to produce the file to me for examination at which time I strike out the proceeding. 

I. Lulham
Deputy President
APPEARANCES:		
For Applicant	Mr. A. Andrianakis, legal practitioner	
For Respondents	Mr. S. Aparo, company officer	

Reasons

1.	Premier Food and Beverage (Aust) Pty Ltd is an importer, distributor and wholesaler of foodstuffs. Famous Pacific Shipping (Vic) Pty Ltd is a freight forwarder, which also offers customs broking services.

2.	Famous holds some shipments of goods belonging to Premier and is refusing to release them on the basis that it is owed money. On 17 May 2019 Premier issued this proceeding seeking an urgent injunction to compel Famous to release the goods. The application was heard on 24 May 2019. Premier was represented by its legal practitioner. Famous was represented by one of its officers. Because the application was brought on quickly and was not accompanied by affidavits in support as would be the situation in a proceeding brought in a Court, both sides brought documents to the hearing and did not object to being served  with their opponent’s documents on very short notice.

3.	The hearing proceeded somewhat informally, but both sides were given ample opportunity to produce any documents upon which they relied and to challenge the other party’s submissions.

Groups of companies

4.	Mr Angelo Phillipou is a director of Premier, and he attended the hearing with its legal practitioner. He gave the undertaking as to damages on behalf of Premier.

5.	The outcome of the Application essentially turns on the consequences of the “corporate veil”. Famous is part of a “group” of companies: both its letterhead and its “Standard Trading Conditions of Contract” gives the addresses of its Melbourne office, Sydney office and Brisbane office but also reveals that each of these offices is that of a separate corporation. I must conclude that Mr Aparo understands the corporate veil – that  a corporation is separate to other companies in its “group” and to its shareholders and directors. 

6.	Famous has held onto goods on the basis that it is owed money by companies associated with Mr Angelo Phillipou.  

7.	Famous produced an “organisation summary” of information obtained from a credit management company, as distinct from an ASIC company extract, in relation to Premier, but it did not contain details of shareholdings or directorships. However, the Application for Credit made by Premier to 

Famous on 14 June 2018 was signed by Mr Phillipou as “managing director” and described him as “sole director”. In the hearing Mr Phillipou did not deny being a director, or even the sole director, of Premier. 

8.	Famous produced similar “organisation summaries” in relation to SPF Corporation Pty Ltd ACN 143 858 253 and Alpha and Omega Co Pty Ltd ACN 167 235 654. In the hearing Mr Aparo asserted that Mr Phillipou was a director of both companies. Mr Phillipou denied that allegation but conceded that he was involved in the companies. 

9.	Attached to the “organisation summary” for SPF Corporation Pty Ltd is a longer summary from the credit management company which is plainly extracted from ASIC records. It shows Mr Phillipou to be the sole director and sole secretary of SPF, and its sole shareholder.  It also shows that a Court Order for the winding up of SPF Corporation Pty Ltd was made on 3 April 2019.

10.	This longer summary also shows “Known Cross Directorships” and says that Mr Phillipou was a director and secretary of My Retail Store Pty Ltd which is stated to be deregistered. The ACN of that company is not shown. There is also an ambiguous reference to Stock Group Investments Pty Ltd which is said to be affected by Court proceedings in New South Wales, but the connection with that company is not stated.

11.	Attached to the “organisation summary” for Alpha and Omega Co Pty Ltd is a similar summary from the credit management company extracted from ASIC records. It shows Mr Carl Phillipou to be the sole director and sole secretary of Alpha, and one of its two  shareholders.  Carl appears to be Angelo Phillipou’s son.

12.	Mr Aparo seeks to paint the picture that Mr Phillipou is hiding behind the corporate veil, but as Famous is itself part of a group of companies he is, frankly, not as naive as he seeks to portray.

13.	Premier’s case was presented as follows. Premier entered a contract with Famous on 14 June 2018. Famous has performed services. Famous sent Premier a statement of account on 11 April 2019 which lists seven invoices:

0019 2798	12 February 2019	due 14 March 2019	$3,229.12	
0019 3226	22 February 2019	due 24 March 2019	$3,492.65	
0019 3636	8 March 2019	due 7 April 2019	$3,446.33	
0019 3640	8 March 2019	due 7 April 2019	$3,446.33	
0019 4612	8 April 2019	due 8 May 2019	$2,292.57	
0019 4592	9 April 2019	due 9 May 2019	$3,027.44	
0019 4695	9 April 2019 disbursement	due 9 April 2019	$   194.00	
			$19,128.74	

14.	Invoices 0019 2798 and 0019 3226 were paid some time ago and are irrelevant. 

15.	Invoices 0019 3636, 0019 3640 and 0019 4695 relate to one shipment.

16.	Premier paid invoices 0019 3636 and 0019 3640 by electronic funds transfer on 18 April 2019 and has a receipt for those payments. 

17.	As at 18 April 2019 invoice 0019 4695 was overdue, but none of the other invoices were then due. That is, save for invoice 0019 4695, as at 18 April 2019 Premier was not in breach of any obligation to Famous.

18.	As at 24 May 2019, when the application for the injunction was heard, 0019 4612 and 0019 4592, are overdue for payment. Premier says that it “will” pay those invoices, which only amount to $5,320.01, but is concerned that if it pays them Famous will still refuse to release the goods.

19.	Premier submits that Famous is refusing to release the goods because it is owed money by separate entities, SPF Corporation Pty Ltd and Alpha and Omega Co Pty Ltd, but it is not entitled to do so. 

20.	The balance of convenience lies with granting the injunction, because the $5,320.01 owing to Famous is much less than the profit that Premier would expect to make by wholesaling those goods. 

21.	I should say at this point that during the hearing Premier said that had “now” paid the $5,320.01. It is unclear whether this was intended to mean that Mr Phillipou who had made an electronic funds transfer from the hearing room. Mr Aparo did not concede that the sum had been paid. No documents were produced to verify the alleged payment and I proceed on the basis that, as at the hearing date, the $5,320.01 had not been paid.

Famous’ opposition to the injunction being granted was presented as follows

22.	The three companies associated with Mr Phillipou has owed Famous money for 3 ½ years. Over that time numerous payment plans have been entered, but Premier has breached all of them and Famous now considers that “enough is enough”. It is not appropriate for Premier to rely on its separate 

corporate structure to the other two companies, because over the 3 ½ years Mr Phillipou has negotiated rates for the performance of Famous’ services by aggregating the imports by the three companies, in effect as a “bulk purchase” of Famous’ services warranting a discount. 

23.	The payments referred to by Premier in its submission have only been made since Famous refused to release the shipments. Famous is convinced that if it releases the shipments and so loses its commercial advantage, the debts will not be paid. Famous concedes that SPF Corporation Pty Ltd and Alpha and Omega Co Pty Ltd, and not Premier, are the debtors in respect of its invoices numbered 11670 and 17662 respectively.

24.	Because both parties agree that the contract between Premier and Famous was made on 14 June 2018 and is made up of the Application for Credit and Famous’ “Standard Trading Conditions of Contract”, I asked Mr Aparo whether Famous alleged that any other entity had guaranteed Premier’s obligations, and he answered in the negative. I have reviewed the Application for Credit and the “Standard Trading Conditions of Contract” and confirm that this is correct. However, it seems that Famous has not fully understood its own conditions.

25.	In the Application for Credit, the words “customer” and “applicant” appear but it is clear as a matter of construction that those words refer to Premier and not to Mr Phillipou.

26.	The “Standard Trading Conditions of Contract” contain some clauses under which the “Customer” indemnifies Famous in certain circumstances, but “Customer” means Premier and not Mr Phillipou, SPF Corporation Pty Ltd or Alpha and Omega Co Pty Ltd. “Owner” is defined in clause 3 to include “the owner, shipper and consignee of the goods and any other person who is or may become interested in the goods or anyone acting on their behalf” (emphasis added) , which is arguably broad enough to catch Premier and Mr Phillipou, and this is significant in relation to clauses 10 and 11. It must be borne in mind that the current application is one for an injunction, and that only at the final hearing can the parties be properly heard on the meaning and effect of the definition and clauses 10 and 11.

27.	Clause 9.3 provides that Premier shall pay Famous liquidated damages on all overdue accounts. They are to be calculated at the base interest rate of Famous’s bank in the period when the accounts are overdue, plus 4%.  Clause 10.2 provides that Famous is entitled but not obliged to depart from Premier’s instructions in any respect if Famous considers there is good reason to do so in Premier’s interests, and that if Famous does so it shall not incur any additional liability.

28.	Clause 10.13 says Famous “shall have the right to enforce against the Owner and the Customer jointly and severally any liability of the Customer under these conditions or to recover from them any sums to be paid by the Customer which upon demand have not been paid”.

29.	Clause 11.1 provides that Famous “shall have a particular and general lien on all Goods or documents relating to the Goods in its possession the property of the Customer or Owner for all sums due at any time from the Customer or Owner whether those sums are due from the Customer on those Goods or documents or on any other Goods or documents”.

30.	Whilst Mr Aparo produced many documents in the hearing and was alive to Premier’s reliance on the corporate veil, he did not produce a contract, Application for Credit or “Standard Trading Conditions of Contract” applicable to SPF Corporation Pty Ltd or Alpha and Omega Co Pty Ltd, and it follows that the Tribunal cannot speculate as to whether those companies’ contracts contain the same definition of Owner and the same clauses 10.13 and 11.1. I must conclude, for the purposes of this injunction application, that the contracts do not make Premier liable for the debts of SPF Corporation Pty Ltd or Alpha and Omega Co Pty Ltd.

Conclusion

31.	On the material presented in this application for an injunction, Premier is indebted to Famous for $5,320.01 under invoices 0019 4612 and 0019 4592, and because they are overdue for payment, Premier is also liable to pay Famous liquidated damages in accordance with the formula set out in clause 9.3. Famous therefore has a particular and general lien on all goods of Premier under clause 11.1.

32.	The liability of SPF Corporation Pty Ltd and Alpha and Omega Co Pty Ltd is a mere distraction. Because SPF Corporation Pty Ltd is in liquidation, Famous must lodge a proof of debt with its liquidator. 

33.	Premier’s statement that it “will” pay $5,320.01 but that it is reluctant to do so because it does not trust Famous to release its goods is simply an admission by Premier that it owes the money and that Famous has a lien. Premier has not established that there is a serious question to be tried.

34.	Whilst Premier made its submission on the balance of convenience by comparing the small sum owing to Famous to the large profit that Premier expected to make by wholesaling the goods, that submission is harmful to its application for an injunction. If the debt is so small, Premier should pay it and its failure to do so, when seen with the Court ordered liquidation of 

SPF Corporation Pty Ltd and the many breaches of payment plans, is a legitimate source of concern for Famous. In any event, damages would be an adequate remedy if it is established that Famous is not entitled to its lien. There is no evidence that the goods are unique or irreplaceable.

35.	Premier did not seek the injunction because Famous was threatening to dispose of or destroy the goods. Having analysed the material and the parties’ submissions, Premier was seeking the injunction to compel Famous to release goods when Premier is still indebted to Famous for its services and for liquidated damages on the late payment.   As such the parties acknowledged that there was no need for the Tribunal to make an order on the date of the hearing.

36.	The application for an injunction is dismissed. 

37.	Because Famous was self-represented there is no apparent basis on which it could seek costs. However as there is a possibility that it incurred legal fees in seeking advice, as a matter of caution I will reserve its costs. 

38.	Finally, there is the question of what is to become of the proceeding. Premier only sought the injunction and not any other relief and so from its perspective, this proceeding might be complete. Famous might issue a counterclaim for payment of its invoices and liquidated damages. If it did so, that proceeding would be a “small claim” as defined in the relevant legislation, which would appropriately be listed for hearing rather than being subjected to a directions hearing. I will have the principal registrar produce the file to me on 31 July 2019 if neither party has made an application by then.

I. Lulham
Deputy President

4 June 2019