Interlocutory Injunction to Prevent Chattel Removal in Helicopter Case

The court granted an interlocutory injunction to prevent the removal of a compressor from a helicopter, installed as a component in the aircraft, to maintain its operability. The decision was based on the principle that a party in lawful possession of a chattel can seek an injunction to prevent its removal if it would render the aircraft inoperable.

New South Wales Supreme Court

CITATION : Yu & [NAME] v [NAME] & [NAME] [2002] NSWSC 5 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 1049/02 HEARING DATE(S) : 17 January 2002 JUDGMENT DATE : 21 January 2002

[NAME] PARTIES : [COMPANY] t/a [NAME] (Holdings) [COMPANY] t/a [NAME] : Sperling J at 1

COUNSEL : [redacted] Mr R [NAME] for the Defendants SOLICITORS : [redacted] [COMPANY] for the Defendants CATCHWORDS : Injunction - interlocutory injunction to restrain repossession of a chattel - claim for delivery up of chattel LEGISLATION CITED : Supreme Court Act 1970, s93

DECISION : (1) The summons and cross claim will be listed before the duty judge on 31 January 2002; (2) The [NAME] are to file and serve any further evidence by 5 pm on 25 January 2002; (3) The orders made on 11 January 2002 are extended until 5 pm on 31 January 2002; (4) The costs of the plaintiff's application for continuation of the interim orders and of the [NAME] defendant's application for immediate determination of their claim for delivery up of the compressor will respectively be costs in the cause; (5) Liberty to apply on 24 hours notice.

- 4 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

Sperling J

Monday, 21 January 2002

1049/02 [NAME] v [NAME] Judgment 1 His Honour: The first and [NAME] are respectively the owner and operator of a Bell Jetranger helicopter. The [NAME] defendant did maintenance work on the helicopter until the maintenance agreement was terminated in August 2001. The first defendant is the principal of the [NAME] defendant. I will refer to the [NAME] compendiously as "the [NAME]" and the defendants compendiously as "the defendants", sacrificing accuracy to convenience. 2 It appears that the defendants hired a compressor from [COMPANY] ([COMPANY]), and on-hired the unit to the [NAME] on the same terms as in the hiring agreement with [COMPANY]. The compressor was installed in the helicopter in July 1999. 3 The printed terms of the hiring contract between [COMPANY] and the defendants included that [COMPANY] could repossess the unit on termination of the hiring contract (6.2); or for non-payment of hiring charges (9.3), even if the unit had been attached to another chattel (9.7). 4 The defendants and the [NAME] appear to be in default in relation to payment under the respective hiring agreements. 5 There is a current dispute between the parties over payment for maintenance work, with the defendants asserting they have been underpaid and the [NAME] asserting an overcharge by the defendants. 6 The [NAME] are negotiating with [COMPANY] for the purchase of the compressor, conditional upon [COMPANY] terminating its hiring contract with the defendants. 7 There is a maintenance release in the helicopter. That is a book or document in which anything rendering the helicopter unserviceable is recorded. 8 On 21 December 2001, the defendants made an entry in the maintenance release and commenced to remove the compressor. They were interrupted and the exercise was abandoned. The helicopter was rendered serviceable by the [NAME], at a cost and with loss of time. The [NAME] reported the matter to the police and provided the Civil Aviation Authority with details of what had occurred. 9 On 11 January 2002, Simpson J made ex parte orders on the plaintiff's application restraining the defendants, until 4 pm on 17 January 2002, from interfering with the helicopter and from making any further entry in the maintenance release. Time was abridged for service of a summons claiming such injunctions as final relief, and damages. 10 On 17 January 2002, the [NAME] moved on notice for continuation of the injunctions on an interlocutory basis. [NAME] of counsel appeared for the [NAME]. [NAME] of counsel appeared for the defendants. 11 [NAME] was given leave to file a cross claim to the summons, claiming an order under s 93 for delivery up of the compressor, money for maintenance work, and damages; and a notice of motion claiming that the delivery up order be made immediately. He was also given leave to read two affidavits by the [NAME] defendant subject to a decision by the Court as to whether the [NAME] should be allowed time to deal with them. (One of the affidavits by [NAME] is the source of the evidence concerning the contractual arrangements between the [NAME] and the defendants in relation to the compressor.) 12 In the course of argument, [NAME] proposed, as a secondary alternative to immediate delivery up of the compressor, an order that the [NAME] not prevent the defendants from recovering the compressor. 13 [NAME] informed the court that the [NAME] disputed that the defendants were entitled to possession of the compressor under the hiring agreement, in the events that had occurred, and that he wished to put on evidence in answer to the defendants' claim in that regard. His position, by implication, extended to the alternative claim made on behalf of the defendants. Having heard argument, I was not satisfied that the defendant would have an unanswerable case on the evidence adduced so far in combination with any further evidence that might be adduced.

Accordingly, at the conclusion of the hearing before me, I ruled that the cross claim should not be decided without the [NAME] being given an opportunity to put on evidence in answer to it. 14 I reserved my decision as to whether the interlocutory injunction should be continued pending determination of the [NAME]' claim for final relief until 9.30 am on 21 January 2002. I extended the restraining orders made on 11 January until 5 pm on that date. I also reserved my decision in relation to costs. 15 As to the existing interlocutory injunction, the [NAME] are in possession of the compressor, they came into possession of it lawfully, it is installed in a helicopter and would have to be replaced to enable the aircraft to be used if it were removed, and the compressor's use in that regard is as was intended by the parties when possession was given to the [NAME] by the defendants. The defendants now assert a right and an intention to retake possession of the unit by removing it from the aircraft. If the [NAME] are entitled to invoke the court's coercive jurisdiction and have an arguable case in answer to the defendants' claim, plainly the interlocutory injunctions should be continued pending final determination of the proceedings. 16 On the evidence so far adduced, the defendants are entitled to remove the compressor from the aircraft and take possession of it. Further evidence may show otherwise. The defendants submit, however, that, as general rule, the court will not entertain proceedings to determine possessory rights in relation to a chattel. The rule is not without qualification, as the authorities cited show. In circumstances where the chattel has been consensually installed as a component in and aircraft and where removal of the chattel would render the aircraft inoperable and would require time and money to make the aircraft usable again, the [NAME] have an arguable case for an exception to the general rule. The interlocutory injunctions should therefore be continued. 17 I note a further undertaking to the court by counsel on behalf of the [NAME] that, until further order, the [NAME], by themselves, their servants and agents, will not wilfully damage the compressor or part with possession of it and will not sell, encumber or otherwise deal with it, provided that the [NAME] may enter into a contract with [COMPANY] for sale of the compressor to them. 18 I make the following orders:

(1) The summons and cross claim will be listed before the duty judge on 31 January 2002.

(2) The [NAME] are to file and serve any further evidence by 5 pm on 25 January 2002.

(3) The orders made on 11 January 2002 are extended until 5 pm on 31 January 2002.

(4) The costs of the plaintiff's application for continuation of the interim orders and of the [NAME] defendant's application for immediate determination of their claim for delivery up of the compressor will respectively be costs in the cause.

(5) Liberty to apply on 24 hours notice. -o0o-

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