Duracane International P/L v Evans & Ors [2000] QSC 137

SUPREME COURT OF QUEENSLAND CITATION: Duracane International Pty Ltd v Geoff Evans & Anor and Ors [2000] QSC 137 PARTIES: DURACANE INTERNATIONAL PTY LTD (ACN 057 066 930) (applicant) v GEOFF EVANS AND HELMA EVANS (first respondents) and COMMISSIONER OF THE POLICE SERVICE (second respondent) FILE NO/S: 2631/00 DIVISION: Trial Division DELIVERED ON: 16 May 2000 DELIVERED AT: Brisbane HEARING DATE: 10 April 2000 JUDGE: Douglas J ORDER: That the application be dismissed. CATCHWORDS: EVIDENCE - WITNESSES - credibility of evidence - conflicting evidence - whether applicant entitled to a declaration that it is the owner of certain plant and equipment COUNSEL: Mr P W Hackett for the applicant Mr P F Mylne for the first respondents SOLICITORS: Crouch & Lyndon Solicitors for the applicant Ferguson Cannon Lawyers for the first respondents [1] DOUGLAS J: In this action the applicant, Duracane International Pty Ltd (“Duracane”) seeks a declaration that it is the owner of certain plant and equipment described in a Manufacturing and Distribution Agreement executed between the applicant and the first respondents on 18 May 1994 (“the 1994 Agreement”). [2] The principal persons concerned in this action are Michael Vaughan Francis (“Francis”) and Geoff Evans. Francis describes himself as the President and Chief Executive Officer of the applicant, and Evans is the first respondent. -- 1 of 4 -- 2 [3] Evidence reveals that the directors of Duracane have had business dealings with the first respondents since March 1991 when a company then controlled by Francis and two other men, known as Trans World Agencies Pty Ltd (“Trans World”), licensed the first respondent to produce a type of furniture produced on jigs and moulds supplied by Trans World. The licensed agreement was for the Sunshine Coast region only. [4] For the purpose of the first respondents carrying on that business, Trans World supplied the first respondents with certain plant and equipment. Evans then commenced operating his business trading as Sundaze Furniture from premises at Aerodrome Road, Maroochydore. In fact he registered the business name “Sundaze Furniture” on 19 March 1991. [5] In 1993 Evans was approached by one Paul Williams (“Williams”) who was also apparently a licensee of an entity associated with Francis. Francis had by that time asserted that he owned the trade mark Duracane, and had said to Evans that Evans’s agreement with Trans World Agencies was no longer valid because Trans World had ceased trading. He told Evans however that he could continue to manufacture the furniture and call it Duracane. It transpired that Williams was also manufacturing his furniture as Duracane. However, for some reason Francis later contacted Evans and told him by telephone not to use the name Duracane. He reverted to the name Sundaze Furniture. [6] By mid 1993 Williams contacted Evans and suggested that he and Evans join forces on the Gold Coast. An arrangement was made and Evans transferred his business and plant and equipment to the Gold Coast. Francis objected to this and commenced proceedings against Williams which were eventually successful and which had the effect of closing Williams’ business on the Gold Coast after approximately 8 months. Evans then packed up and moved all of his equipment back to the Sunshine Coast and recommenced his business trading as Sundaze Furniture in his old shop at Aerodrome Road. [7] In about February 1994 Evans says that he was contacted by Francis who now alleged that he owned a company called Duracane International Pty Ltd. He wanted Evans to travel to Fiji to teach the Fijians how to make the style of furniture. Evans would not agree at that time because he was concerned that if he went to Fiji and helped manufacture furniture at a cheaper labour rate, he could not then sell his own furniture in Australia, particularly on the Sunshine Coast, thereby jeopardising his business. [8] Ultimately Duracane and the first respondents signed an agreement dated 18 May 1994. Pursuant to Schedule 2 thereof, certain plant and equipment are listed as having passed under that agreement. There is an argument as to whether in fact the plant and equipment described in Schedule 2 did in fact pass. -- 2 of 4 -- 3 [9] The licence pursuant to the 1994 agreement was to be expire by effluxion of time on 18 May 1996. In evidence is a letter dated 29 September 1995 purporting to extend the 1994 agreement for a period of 5 years up to and including 18 May 2001. Evans asserts that he had not seen that letter until after 21 March this year. [10] It is clear from the evidence that Francis wished to have Evans’s furniture making business under his own umbrella. In respect of this matter I accept the evidence of Evans that he did eventually go to Fiji with Francis where he trained some Fijians in relation to the manufacture of the furniture, and that during the following couple of years he had a few more overseas trips with Francis. I also accept that he became wary and distrustful of Francis and decided not to have any more dealings with him and he says, which I accept, that his involvement with Francis ceased. [11] Evans continued successfully to trade as Sundaze Furniture and in about 1997 moved to 21 Kayleigh Drive, Maroochydore, where he currently operates. During that time Francis had actually placed orders with Evans and he had manufactured and supplied Francis with products. The relationship was one of customer and manufacturer. However, by 1997 Francis wished Evans to enter into another agreement with him because the agreement of 18 May 1994 had lapsed. Evans did not wish to do this and Francis then tried to encourage Evans to become employed by the company. There is in fact in evidence an offer in writing dated 26 April 1997 requesting Evans to become Francis' operations manager. This offer was refused. [12] Francis continued to apply pressure to Evans. He registered the trade mark Sundaze in 1998. After that registration Francis again asked Evans to produce more furniture for him. Evans asked him why he had registered the trade mark Sundaze knowing that Evans had traded as Sundaze Furniture since 1991. Evans says, and I accept, that Francis said: “Well if you won’t enter into an agreement with me to do the manufacturing on my behalf I am going to make sure I shut you down and stop your business.” Evans said words to the effect that Francis could not blackmail him and indicated that he was going to continue operating his business as he had done since 1991. He asserts, and I accept, that Francis told him that he was going to close him down because he now owned the trade mark Sundaze and Evans could therefore not trade any longer under that name. [13] Francis put that threat in writing by letter dated 16 December 1999. A further letter followed dated 3 February 2000 requesting that Evans desist from using the name Sundaze. Ultimately Francis sent Evans a letter dated 1 February 2000 stating that if Evans entered into a new licence agreement it would contain terms substantially the same as the agreement of 18 May 1994, and that it would be an agreement for a further 5 years restricting Evans to manufacturing on the Sunshine Coast. It proposed that Duracane would not charge any fee for the licence. [14] Ultimately when no agreement with Evans was forthcoming Francis, high handedly in my view, broke and entered the premises of Evans on 21 March 2000 and removed the disputed plant and equipment. An inventory was taken and eventually -- 3 of 4 -- 4 the plant and equipment were placed in storage. The police, surprisingly, were involved in this action. [15] Ultimately the question to be determined is whether the plant and equipment which was seized on 21 March 2000 is the plant and equipment which passed pursuant to the 1994 agreement or whether it is, as Evans asserts, the plant and equipment which passed pursuant to the 1991 agreement together with some other items manufactured by Evans. [16] I am of the view that the plant and equipment falls into the latter category. I have a number of reasons for saying this. First I accept the evidence of Paul Williams when he describes the equipment, photographs of which were shown to him during evidence. In particular, he describes them as being made of aluminium and ply. Francis at all times asserted that the metal pieces were steel. Williams had never seen, at any relevant time, any jigs which contained steel. Second, I did not take a favourable view of Francis as a witness. I do not accept that the letter of 21 September 1995 was ever sent or received by Evans. The conduct of Francis since that date in relation to seeking to obtain a fresh agreement with Evans is hardly consistent with that letter having been sent. [17] There may well have been equipment which did pass pursuant to the 1994 agreement, however, I am satisfied that it is not the plant and equipment the subject of this action. It follows that the applicant is not entitled to the declarations sought. In the event I dismiss the application. -- 4 of 4 --