Gwinnett v Day

Case [2012] SASC 43

SUPREME COURT OF SOUTH AUSTRALIA

(Civil: Application)

GWINNETT v DAY & ANOR

[2012] SASC 43

Reasons for Decision of The Honourable Justice Stanley

22 March 2012

TORTS - TROVER AND DETINUE - WHAT CONSTITUTES CONVERSION - GENERALLY

PARTNERSHIP - PARTNERSHIP PROPERTY - DOCTRINE OF CONVERSION

Plaintiff’s application seeking orders from the Court for return of 57 head of cattle to his property known as Warwick Hills – defendants removed the cattle and transported to property near Kingston – plaintiff and second defendant in share-farming arrangement where second defendant entitled to one third and the plaintiff two thirds – defendant sought to terminate the share-farming arrangement and subsequently removed one third of the cattle from Warwick Hills.

Plaintiff brings action in detinue on basis defendants are guilty of conversion for removing cattle and failing to deliver them up on demand – plaintiff claims entitlement to order for return of cattle as a right at common law – alternatively plaintiff seeks equitable relief – whether removal of cattle evidenced exercise of right of exclusive control over cattle by the defendants – whether that exercise of exclusive right is inconsistent with the plaintiff’s co-extensive right to immediate possession – whether there is a discretion to exercise the power to order delivery of the cattle.

Held:  Defendants are not guilty of conversion – defendants have not dealt with the cattle in a manner inconsistent with the plaintiff’s rights – power to order delivery of the cattle or provide equitable remedy is discretionary – not in interests of justice or balance of convenience to make order for delivery of cattle.

Partnership Act 1891 (SA) s 44; Common Law Procedure Act 1854 (UK) s 78; General Rules of Procedure in Civil Proceedings 1996 (Vic) O 21, r 3, O 66, r 4; Supreme Court (General Civil Procedure) Rules 2005 (Vic) I 21.03(1)(d), I 66.04(2); Supreme Court Civil Rules 2006 (SA) r 229(1)(c), referred to.
Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342; Hill & Anor v Reglon Pty Ltd [2007] NSWCA 295; Kitano v Commonwealth (1974) 129 CLR 151, discussed.
Baker v Barclays Bank Ltd (1955) 2 All ER 571; Coleman v Harvey [1989] 1 NZLR 723; Connell v Bond Corporation Pty Ltd (1992) 8 WAR 352; Howard E Perry & Co Ltd v British Railways Board [1980] 1 WLR 1375; Jacobs v Seward (1872) LR 5 HL 464; Kuwait Airways Corporation v Iraqi Airways Co (Nos 4 & 5) [2002] 2 AC 883; Nash v Barnes [1922] NZLR 303; Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204, considered.

GWINNETT v DAY & ANOR
[2012] SASC 43

Civil

STANLEY J:

Introduction

  1. By summons the plaintiff sought orders from the Court for the return of 57 head of cattle to a property owned by him in the south-east of South Australia, near Yumali, and between Coonalpyn and Meningie.  The property is known as “Warwick Hills”.  The cattle were removed from the Warwick Hills property…

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Gwinnett v Day [2012] SASC 43
Case
[2012] SASC 43
Decision Date

CaseChat Overview and Summary

The case of Gwinnett v Day involves a dispute between the plaintiff, Andrew Gwinnett, and the defendants, Nigel Day and Malcolm Day, regarding the ownership and possession of a herd of cattle. The plaintiff sought orders for the return of 57 head of cattle that the defendants had removed from the Warwick Hills property and transported to another location near Kingston. The plaintiff and the second defendant had been in a share-farming arrangement, under which the second defendant was entitled to one third of the cattle, while the plaintiff was entitled to two thirds. The defendants terminated the share-farming arrangement and removed one third of the cattle. The plaintiff initiated an action in detinue, claiming that the defendants were guilty of conversion for removing the cattle and failing to deliver them upon demand. The plaintiff sought an order for the return of the cattle as a right at common law or, alternatively, equitable relief.

The court was required to decide whether the removal of the cattle by the defendants evidenced an exercise of a right of exclusive control over the cattle, which was inconsistent with the plaintiff’s co-extensive right to immediate possession. Additionally, the court needed to determine whether there was a discretion to exercise the power to order the delivery of the cattle. The court found that the defendants were not guilty of conversion as they had not dealt with the cattle in a manner inconsistent with the plaintiff’s rights. The court held that the power to order the delivery of the cattle or provide equitable relief was discretionary, and it was not in the interests of justice or the balance of convenience to make an order for the delivery of the cattle.

The court reasoned that since the cattle were co-owned by the plaintiff and the second defendant, and the share-farming agreement had been terminated, the defendants did not exercise a right of exclusive control over the cattle that was inconsistent with the plaintiff’s co-extensive right to immediate possession. The court further held that the principles of the tort of conversion did not apply in this case, as the defendants’ actions were not inconsistent with the plaintiff’s rights as a co-owner. The court also found that the balance of convenience and the interests of justice did not favour making an order for the return of the cattle. The court made orders that the defendants were to take all necessary steps to preserve the cattle until their final distribution or disposition in accordance with the provisions of the Partnership Act 1891, and that the defendants were not to remove the cattle from the Howe property without further order of the court. The court also ordered that the defendants were to take such steps as were necessary to permit the plaintiff and persons nominated by him to have access to the cattle on reasonable notice. The court further granted liberty to apply on short but reasonable notice and reserved the matter of costs for later determination.

Orders

Orders of the court

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Background

Background to the litigation

The defendants oppose the orders sought. The matter proceeded to trial by consent on affidavits, in the absence of pleadings. Background It appears that somewhere around 1968 the second defendant (Malcolm Day) approached the plaintiff’s father (Bill Gwinnett), about agisting a mixed cattle herd on the Warwick Hills property. I understand that Bill Gwinnett was the registered proprietor of Warwick Hills at that time. Bill Gwinnett and Malcolm Day agreed to breed cattle on the Warwick Hills property. Malcolm Day had a small number of mixed-breed cattle at that time. Bill Gwinnett purchased some cattle, and over many years, Malcolm Day bred from the mixed herd a Murray Grey herd. The arrangement between Bill Gwinnett and Malcolm Day was described by the parties as a share-farming arrangement. Under that arrangement, Bill Gwinnett, in addition to the cattle he purchased originally, supplied the land, the feed and water, while Malcolm Day, in addition to the small number of mixed-breed cattle he supplied originally, supplied the labour.[2] [2] Affidavit of Nigel Day, sworn 14 February 2012 at [11]. This arrangement continued when the plaintiff inherited the Warwick Hills property from his father, and more recently when Malcolm Day transferred his interest in performing the share-farming agreement to his son, Nigel Day. The herd was self-replacing. From time to time, a replacement bull was purchased. The arrangements between what I will call the Gwinnett interests and the Day interests were that costs were to be shared on the basis that Gwinnett would meet two thirds of any capital costs, and Day would meet one third of such costs. Net proceeds from the sale of stock were divided between the Gwinnett interests and the Day interests on the basis of a two thirds / one third share.[3] [3] Affidavit of Nigel Day, sworn 14 February 2012 at [13]. Later, the parties entered into a further share-farming arrangement concerned with cropping on the Warwick Hills property. Under this arrangement, the Gwinnett interests provided the land and the base fertiliser, and the Day interests provided the labour and equipment. The chemical and urea fertiliser costs were shared on an equal basis. The net proceeds from the sale of the crop were divided on an equal basis.[4][4] Affidavit of Nigel Day, sworn 14 February 2012 at [15]. The plaintiff, Andrew Gwinnett, inherited his father’s interest in the share-farming arrangement some years ago. Nigel Day assumed his father’s interest in the share-farming arrangement in June 2011. At no time was the share-farming arrangement or arrangements ever reduced to writing. At certain times, the herd was agisted on other property when there was insufficient feed available on the Warwick Hills property to maintain the herd.[5] [5] Affidavit of Malcolm Day, sworn 22 February 2012 at [12]. After the transfer or assignment of Malcolm Day’s interest in the share-farming arrangement to Nigel Day on 25 June 2011, the relationship between Andrew Gwinnett and Nigel Day deteriorated over a number of matters. It appears that in December 2011, Nigel Day gave notice of his intention to terminate the share-farming arrangement. Certainly on 20 December 2011 Andrew Gwinnett’s executive assistant, Ms Jean Tamiaans, sent an email to Nigel Day which included the following:[6]Andrew would like to discuss ongoing arrangements with you in the New Year to see if there is any room for sensible accommodation, otherwise he feels we should agree to an amicable termination of the share farming arrangement.[6] Affidavit of Nigel Day, sworn 22 February 2012, Exhibit ND2.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

For these reasons, I would decline to make the orders sought by the plaintiff in the exercise of my discretion, even if I was satisfied that the defendants had been guilty of conversion.Conclusion In the circumstances, I refuse the relief sought by the plaintiff, but I make the following orders:1.the defendants are to take all necessary steps to preserve the 57 cattle presently removed by them from Warwick Hills on 7 February 2012 and now agisted on the Howe property near Kingston and any progeny thereof (“the 57 cattle”) until the final distribution or disposition of the cattle in accordance with the provisions of s 44 of the Partnership Act 1891 or until further order of the Court;2.the defendants are not to remove the 57 cattle from the Howe property without further order of the Court;3.the defendants are to take such steps as are necessary to permit the plaintiff and persons nominated by him to have access to the 57 cattle on reasonable notice; and4.Liberty to apply on short but reasonable notice. I will hear the parties as to costs.

Ratio Decidendi

Legal Principle Established

The defendants oppose any order for the return of the cattle to Warwick Hills. They submit that no proper basis had been established for the making of such an order. The defendants’ argument is predicated upon an acknowledgment that Nigel Day does not have an entitlement to dominion or ownership over the third of the herd removed from Warwick Hills. They submit that now the share-farming arrangement has been terminated, the assets of the “partnership” must be distributed. Those assets are to be applied in accordance with the principles stipulated in s 44 of the Partnership Act 1891 (SA). Ultimately, if the plaintiff and Nigel Day cannot agree to a division of the herd in specie, then the herd will have to be sold, and the proceeds of sale divided in accordance with the two-thirds / one-third formula. In the meantime, there are practical obstacles to returning the cattle to Warwick Hills. Both the balance of convenience and the interests of justice militate against making orders for their return. Orders should be confined to the preservation of the “partnership” assets pending their final distribution. The defendants submit that there is no reason why the herd has to be pastured on the one property. Consideration In considering the plaintiff’s claims in conversion and detinue a helpful starting point is a consideration of the issue of ownership of the cattle removed from the Warwick Hills property. Whatever might have been the understanding of the defendants at the time of the removal, it is clear that by the time the matter was argued in Court, the defendants acknowledged that the cattle they had removed from Warwick Hills are co-owned by the plaintiff and Nigel Day. The corollary of this is that the balance of the cattle left at Warwick Hills are also co-owned by the plaintiff and Nigel Day. So much is common ground. It is unnecessary to decide the question of whether their rights as co-owners were those of tenants in common or joint tenancy. By the time of the removal of the cattle from Warwick Hills on 7 February 2012 I am satisfied the share-farming agreement had been terminated, and hence, the “partnership” between the plaintiff and Nigel Day had been dissolved. Relevantly, recognition of the fact of co-ownership of the cattle is important to the application of the relevant principles of the tort of conversion. The tort of conversion generally concerns a defendant’s intentional dealing with property in a manner inconsistent with or repugnant to the plaintiff’s ownership of the property.[19] However, the common law has long recognised that co-ownership is not necessarily a defence to a claim of conversion. [19] Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204 per Latham CJ at 217 – 221, Dixon J (Starke J agreeing) at 228 – 230, McTiernan J at 234 – 235 and Williams J at 239 – 244; Kuwait Airways Corporation v Iraqi Airways Co (Nos 4 & 5) [2002] 2 AC 883 at 1084, 1104 and 1106; Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342 at [124].