Rent and Damages for Conversion – Controllers Liable – Warning!

Summary

The Supreme Court of NSW held in Rapid Metal Developments (Aust) Pty Ltd v Rildean Pty Ltd [2009] NSWSC 571 (26 June 2009) that agents for a mortgagee in possession ("controllers") were personally liable to pay rent accruing under an agreement entered into by the failed company prior to the controllers' appointment. The controllers were also liable for conversion for selling the goods. The controllers took possession of the plaintiff's scaffolding which had been commingled with scaffolding from other sources.

Facts

Rildean hired scaffolding from companies including the plaintiff ("RMD") and on-hired them to building sites. Rildean granted a fixed and floating charge to Navmost. Navmost appointed the defendants as agents for Navmost, the mortgagee in possession, on 18 July 2002 ("date of appointment"). The controllers took possession of Rildean's property. The Court then wound up Rildean and appointed a liquidator on 25 July 2002. Creditors sought the