Brady v Place No. Scgrg-99-370 Judgment No. S253

BRADY v PLACE
[1999] SASC 253

Magistrates Appeals: Civil

DOYLE CJ. This is an appeal against a judgment of the Magistrates Court given in the civil division of that court. I will refer to the parties as plaintiff and as defendant.
The plaintiff, Mr Place, sued the defendant, Mr Brady, for the return of a truck. Mr Place alleged that he was the owner of the truck, and that he had allowed Mr Guy to deliver it to Mr Brady as security for a loan of $7,000 by Mr Brady to Mr Guy.
Mr Brady defended the action. He alleged that he had bought the vehicle, the truck, from Guy, had hired it back to Mr Guy for 12 months, but then had resumed possession of it. He said that the vehicle was legally his.
The case was heard by a magistrate. Both parties had legal representation. Mr Place, Mr Guy and Mr Brady all gave evidence.
The magistrate accepted the substance of Mr Place’s evidence. He found in Mr Place’s favour. Mr Brady now challenges that decision. On appeal, Mr Brady acted for himself.
The summary that follows is based on the magistrate’s reasons.
Mr Guy conducts a business in retreading and fitting truck tyres. He is very friendly with Mr Place. Apparently, Mr Place treats him like a son. Mr Place was the original owner of the business. After Mr Guy acquired the business, Mr Place still went to the business premises most days. He was paid for this. Mr Brady was also friendly with Mr Place and Mr Guy.
Mr Guy’s business was short of money. Mr Place knew this. There was talk about Mr Brady lending $7,000 to help out. According to Mr Place, Mr Brady said that he could borrow $7,000 and lend it to Mr Guy, but that Mr Brady would need to provide some security to the lender.
Mr Place apparently owned a truck. He signed a transfer of registration form, transferring the truck to Mr Brady, so that Mr Brady could use the truck as security when borrowing the $7,000. In any event, the $7,000 was paid by Mr Brady to Mr Guy. Mr Place kept on using the truck in the business.
There was a written agreement signed, and this is important in the case. The agreement was a hiring agreement. Under it, the truck was hired by Mr Brady to Mr Guy for 12 months. Mr Guy was to pay monthly hire payments of $700. At the end of the 12 months, Mr Guy had the right to buy the truck for $7,700, including certain plant.
So, Mr Brady says he bought the truck for $7,000, then hired it back to Mr Guy on those terms. He agrees that the hire of $8,400 was paid. Mr Brady says that when the 12 months was up Mr Guy did not wish to purchase the truck, and that was the end of the matter, and now it is his.
Mr Place and Mr Guy strongly dispute the nature of the transaction. They both say it was never more than a loan from Mr Brady to Mr Guy, with the vehicle or truck being provided as security. They say they knew that Mr Guy would have to repay $8,400, including interest on the loan, but that when it was repaid the vehicle was no longer to be security, and was to then be Mr Place’s vehicle again.
Mr Place denies that he ever saw the hire agreement that Mr Guy signed. Mr Guy admits signing the agreement, but says that he did not understand the significance of the hiring agreement. He thought it was related to the arrangement for giving security.
So, on Mr Place’s evidence, the transfer of the ownership of the truck to Mr Brady was solely as security for the loan to Mr Guy. Mr Place did not know of, or approve of, the hiring agreement between Mr Brady and Mr Guy. If Mr Place’s evidence is accepted, Mr Brady had no right to make the agreement that he made with Mr Guy.
After hearing the evidence of the parties, the magistrate found in favour of Mr Place. It was common ground that initially the vehicle belonged to Mr Place, although used in the business run by Mr Guy. It was also common ground that the $7,000 paid by Mr Brady for the vehicle went to the business. It was also common ground that Mr Place was using the vehicle during the 12 months after the loan was paid.
The magistrate preferred the evidence of Mr Place and Mr Guy. First of all, he noted that important aspects of Mr Brady’s evidence were not put to Mr Place in cross-examination. This included evidence given by Mr Brady about Mr Place and Mr Guy reading the agreement in the presence of another person. The same matter was not put to Mr Guy in cross-examination.
The magistrate found that Mr Place was rather trusting and naive. This made it more likely that Mr Place would have transferred the truck to Mr Brady, without properly documenting the basis on which he did so.
The magistrate found some inconsistencies in Mr Brady’s evidence. At first, Mr Brady gave the impression that he went into the transaction to assist Mr and Mrs Place. When questioned about the fairness of the transaction, he apparently began to emphasise its commercial nature.
The magistrate also said that this was an unusual bargain. The vehicle had cost about $6,000 in 1992. According to Mr Brady, he bought it for $7,000, hired it back for just 12 months for $8,400, and then was in a position to sell it to Mr Guy for a further $7,000.
The magistrate makes the point that on Mr Brady’s evidence, once he had repaid the $7,700 to the person who lent him the money, Mr Brady had a clear profit of $700 out of the hire of $8,400 paid to him, and those amounts fit in with the sort of agreement that Mr Place said he thought he was entering into.
The magistrate was also influenced by some other matters. The use of the truck was important for the business. It was unlikely that Mr Guy and Mr Place would have been willing to risk losing it. The magistrate did not accept Mr Brady’s evidence about Mr Place reading the agreement before Mr Guy signed it. He also said he found plausible a statement by Mr Guy that he could have raised $7,000 on much less onerous terms from another source.
Mr Place gave evidence of an emotional attachment to the truck, and said that he would never have sold it unconditionally. The magistrate believed Mr Place.
For all those reasons, the magistrate accepted Mr Place and Mr Guy on all important issues, and rejected the evidence of Mr Brady.
The grounds of appeal filed by Mr Brady do not disclose matters that would enable me to overturn the judgment. Basically, Mr Brady alleges a conspiracy between Mr Place and Mr Guy. Mr Brady has filed a long, handwritten affidavit. Much of it is a comment on evidence given by Mr Place and Mr Guy, and on the magistrate’s findings. It disputes numerous points. There is also some further evidence in it.
I can find nothing in that that would persuade me that the magistrate was wrong. The same applies to the shorter, typewritten affidavit that Mr Brady has filed.
In his oral submissions, Mr Brady has told me, at length, why the magistrate should not have believed Mr Place and Mr Guy. He raised a number of matters that were not before the magistrate, and which he said he could prove. I explained to Mr Brady that this is not a basis upon which I could overturn the magistrate’s findings.
This is a case in which the magistrate made clear findings of fact, after hearing the witnesses. The findings were open on the evidence.
On these findings, the truck was transferred as security only, and remained in Mr Place’s possession. A number of quite complex issues of law arise on these facts. However, I consider that the magistrate’s findings mean that Mr Place remained, or has again become, the owner of the truck. The purported hiring agreement is ineffective. Mr Brady had no authority to grant to Mr Guy the right to buy the truck. Mr Guy’s failure to buy it is irrelevant.
As between Mr Place and Mr Brady, the truck belongs to Mr Place. Accordingly, the appeal must be dismissed.

[1999] SASC 253

11 June 1999