Hughes v Stu Mitchell Enterprises Pty Ltd
[1993] QCA 327
•9/09/1993
| IN THE COURT OF APPEAL | [1993] QCA 327 |
| SUPREME COURT OF QUEENSLAND |
Appeal No. 99 of 1993
Brisbane
[Hughes v. Mitchell]
BETWEEN:
MURRAY VICTOR HUGHES
(Plaintiff) First
Respondent
- and -
STU MITCHELL ENTERPRISES PTY. LTD.
(First Defendant) Appellant
- and
CUSTOM CREDIT CORPORATION LIMITED
(Second Defendant)
- and -
STUART MITCHELL and LESLIE MITCHELL
(Third Parties) Appellant
Appeal No. 100 of 1993
MURRAY VICTOR HUGHES
(Plaintiff) First
Respondent
- and -
STU MITCHELL ENTERPRISES PTY. LTD.
(First Defendant) Second
Respondent
- and -
CUSTOM CREDIT CORPORATION PTY. LTD.
(Second Defendant) Appellant
- and -
STUART MITCHELL and LESLEY MITCHELL
(Third Parties) Third
RespondentThe President
Mr Justice Davies
Justice White
Judgment delivered 09/09/93
Judgment of the Court
APPEALS DISMISSED WITH COSTS TO BE TAXED. PARAGRAPH 4 OF THE
ORDER BELOW IS VARIED BY INCREASING THE AMOUNT TO $44,414.93.
CATCHWORDS: | EVIDENCE - Certificate of Conviction - Plaintiff bought truck on hire-purchase from second defendant - Certificate of conviction of thief who stole, then sold truck to first defendant who transferred to second defendant - Whether evidence truck stolen before hire purchase agreement entered between plaintiff and second defendant - Whether breach of term implied by s.69 of Trade Practices Act. | ||||
| Counsel: | Mr. G.J. Radcliffe for the appellant/first defendant | ||||
| Mr. S.D. Rapoport for the respondent/plaintiff | |||||
| Mr. S.W. Sheaffe for the appellant/second defendant | |||||
| Solicitors: | Messrs. Wilson & Copley for the appellant/first defendant | ||||
| |||||
| respondent/plaintiff | |||||
| Messrs. Corrs Chambers Westgarth for the appellant/second defendant |
Hearing Date: 03/09/93
IN THE COURT OF APPEAL
SUPREME COURT OF QUEENSLAND
Appeal No. 99 of 1993
| Before | The President Mr Justice Davies Justice White |
[Hughes v. Mitchell]
BETWEEN:
MURRAY VICTOR HUGHES
(Plaintiff) First
Respondent
- and -
STU MITCHELL ENTERPRISES PTY. LTD.
(First Defendant) Appellant
- and
CUSTOM CREDIT CORPORATION LIMITED
(Second Defendant)
- and -
STUART MITCHELL and LESLIE MITCHELL
(Third Parties) Appellant
Appeal No. 100 of 1993
MURRAY VICTOR HUGHES
(Plaintiff) First
Respondent
- and -
STU MITCHELL ENTERPRISES PTY. LTD.
(First Defendant) Second
Respondent
- and -
CUSTOM CREDIT CORPORATION PTY. LTD.
(Second Defendant) Appellant
- and -
STUART MITCHELL and LESLEY MITCHELL
(Third Parties) Third
Respondent
REASONS FOR JUDGMENT - THE COURT
Judgment delivered 09/09/93
These are appeals in respect of a judgment given in the District Court at Southport on 10 May, 1993. Murray Victor Hughes, the plaintiff in the action, is the respondent to both appeals. In appeal no. 99 of 1993, the appellants are the first defendant, Stu Mitchell Enterprises Pty. Ltd., and the third party Stuart and Leslie Mitchell. In the second appeal, the appellant is the second defendant in the action, Custom Credit Corporation Pty. Ltd.. The judgment appealed from was in the following terms:
"1. The Plaintiff do recover against the First Defendant the sum of $35,095.00 for damages;
2. That the Plaintiff do recover against the Second Defendant the sum of $44,414.93;
3. That the First Defendant and the Second Defendant pay the Plaintiff's costs of and incidental to this action to be taxed;
4. That the Second Defendant do recover against the First Defendant and the Third Party the sum of $39,095.00; and
5. That the First Defendant and the Third Party pay the costs of the Second Defendant including costs of the Plaintiff payable pursuant to the above Order."
(It is accepted that, if the appeals against the judgments in
favour of the plaintiff fail, the amount which the second
defendant is entitled to recover against the first defendant
and the third party should be increased to the amount for which
the second defendant is liable to the plaintiff).
On or about 27 May 1988, the plaintiff, a transport contractor, arranged to acquire an International Acco truck, registered number 986 - ADI, from the first defendant, a truck dealer. In accordance with what was arranged, the second defendant purchased the truck from the first defendant and entered into a hire purchase agreement dated 28 May 1988 with the plaintiff as hirer. The deposit of $16,210.00 was paid by the plaintiff who also became liable to pay $12,059.76 to the second defendant by 24 monthly instalments each of $502.49.
The truck was delivered to the plaintiff who used it in his business and paid eight instalments to the second defendant until 14 February 1989, when the truck was impounded by police who retained possession of it until 19 July 1990.
On 9 January 1990, one David John Tillmann was convicted on charges that, between 1st and 13th February 1988, he stole an International truck the property of Susan Jean Matthews and David William Simpson and that, by falsely pretending that the truck was his own property, he obtained other property and money from an employee of the first defendant. As part of his sentence, Tillmann was ordered to pay restitution, to be paid to Ms. Matthews.
On 22 May 1990, the plaintiff received $22,962.18 from the Auctioneers and Agents Committee "being the deposit of $16,210.00 plus $6,752.18 being the amount outstanding to Custom Credit Corporation Limited at the time of impoundment of the vehicle by the Police Department". It seems that the latter sum was later paid by the plaintiff to Custom Credit.
On 19 July 1990, on competing applications between the plaintiff and Ms. Matthews and Mr. Simpson, an order was made pursuant to s.39 of the Justices Act 1886 that the truck be delivered to the plaintiff.
The plaintiff then sold the vehicle for an amount which is undisclosed and retained the proceeds. However, no attempt was made by any appellant to set off the amount recovered by the plaintiff on the sale of the truck against the damages claimed by him in this proceeding.
The plaintiff was awarded damages under two heads, namely:
(a) lost profits from the loss of use of his truck based upon the estimated net profit which would have been gained from the operation of the truck in the plaintiff's business between 14 February 1989 and the end of March 1990; and
(b) the loss of eight instalments totalling $4,019.92 paid by the plaintiff to the second respondent between May 1988 and 14 February 1989.
The second head of damages was not questioned by the appellants, despite the use of the truck which the plaintiff had in that period, the money he had received from the Auctioneers and Agents Committee and his receipt of the proceeds of sale of the truck.
In view of arguments raised by the defendants on this appeal, it is desirable to set out some correspondence which was forwarded during the course of the dispute.
On 21 February 1989, the solicitors for the plaintiff wrote letters (i) to the solicitors for the first defendant and third party and (ii) to the second defendant. The former was in the following terms:
"Re: YOUR CLIENT: STU MITCHELL ENTERPRISES PTY. LTD.
OUR CLIENT: MR MURRAY HUGHES
PROPERTY: INTERNATIONAL ACCO TRUCK
REGISTRATION NUMBER: 986-ADI
We advise that we act on behalf of Mr Murray Hughes who has informed us that he is hiring the above mentioned truck through Custom Credit, who purchased the vehicle from your client Stu Mitchell Enterprises Pty. Ltd.
We understand that the truck has been impounded on the orders of Detective Ron. St. George of the Broadbeach Police Station following allegations that a Mr Simpson is owed monies by a Mr Tillmann. Mr Simpson is, we understand, a previous owner of the vehicle.
Would you please advise as to what action your client is taking to recover the vehicle from the Queensland Police.
We further advise that we have notified Custom Credit that our client is no longer in possession of the vehicle due to the impounding by the Police. We await your reply ... current position."
The latter was as follows:
"Re: HIRE PURCHASE CONTRACT NO. 136405010785
HIRER: MURRAY VICTOR HUGHES
We advise that we act on behalf of the above named, Mr
M.V. Hughes.We are informed that on 28 May 1988 our client entered into a hire purchase agreement with your company in respect of an International Tray Truck registration number 986-ADI, engine number TJ225634515520E (a copy of the hire agreement is enclosed herewith for your convenience).
We are instructed by our client that the motor vehicle was purchased from Situ Mitchell Enterprises Pty. Ltd.. On the 14th February 1989 we understand that the vehicle was impounded by the Queensland Police (Detective Sergeant St. George of Broadbeach Police Station) following allegations by a Mr Simpson that there is money owing to him by a Mr Tillmann. We understand that Mr Simpson is the previous owner of the vehicle. It would appear that Stu Mitchell Enterprises Pty. Ltd. notwithstanding the provisions of the Auctioneers and Agents Act did not have good title to the vehicle when it was purchased by your company and subsequently hired to our client.
The purpose of this letter is to put your company on notice that our client is no longer in possession of the motor vehicle due to the impounding by the Queensland Police and we would request that you validate your title to the motor vehicle to satisfy the warranties implied under section 5 of the Hire Purchase Act.
We also need your urgent advices as to what course of action you institute to recover the truck in the event that your company does have good title."
A further letter, dated 17 March 1989, was written by the solicitors for the plaintiff to the solicitors for the first defendant and third party as follows:
"Re: MURRAY HUGHES & STU MITCHELL ENTERPRISES PTY. LTD.
With further references to this matter, we have been informed by the Police that your client was aware of the disputed ownership of the International truck sold to Mr. Hughes for approximately 5 months prior to the sale to our client.
In respect of mitigation of our client's losses would your client be prepared to grant to our client the use of a similar truck for the purpose of our client carrying on business."
The reply, dated 23 March 1989, was as follows:
"Re: Mitchell - Hughes Tillmann & Simpson
We note your statement that our client was aware of a dispute with regard to ownership of the International Truck for approximately five months prior to the sale to Mr Hughes. The story is longer and far more complex than can be put in so few words.
Clearly, our client was a bona fide purchaser for value of the vehicle and no suggestion to the contrary can be made.
Our client had been contacted by Mr Simpson but after discussions between Mr Simpson and Mr Tillmann, our client was told by Mr Simpson that there was no dispute over the ownership of the vehicle.
Your inference that there had been deliberate conduct on the part of our client to conceal that dispute from you [sic.] client is refuted.
We are seeking our clients instructions in relation to your client's request to a loan of a truck."
On 24 May 1989, the solicitors for the first defendant and third party wrote in the following terms to the Commissioner of Police:
"RE: Stu Mitchell Enterprises Pty. Ltd.
- Impounding of International Acco Truck
We note that at Committal Proceedings heard in the Southport Magistrates Court today, David Tillmann was committed to stand trial on the charges. We further note, however, that after hearing the evidence presented and after hearing submissions from Tillmann's Solicitor and from the Police Prosecutor (whom we might add agreed with Tillmann's solicitor), the Magistrate advised the Police Officers that it would be prudent that the vehicle not be handed over to Simpson and Matthews prior to the determination of all charges against Tillmann.
We seek confirmation that the vehicle will remain in your possession until all charges against Tillmann are determined."
On 26 May 1989, the same solicitors wrote as follows to the solicitors for the plaintiff:
"Re: Situ Mitchell Enterprises Pty Ltd and Murray Hughes
We note that the truck in question is still being held by
Broadbeach C.I.B.We note Tillmann has been committed to stand trial on charges of stealing and false pretences, although the Magistrate advised the Police Officers that it would be prudent that the truck be held till the final determination of those charges.
We note that we have previously discussed with you your clients rights to bring an application for the return of the vehicle and that Mrs Smith of your office advised the writer that you were of the opinion that your client was unable to brig such an application due to the effect of section 25A of the Hire Purchase Act and 26(1)(a) of the Motor Vehicles Securities Act. The writer has been unable to obtain copies of either of those sections and we are, therefore, somewhat in the dark about those provisions.
We would be grateful if you could provide us with copies of those sections to enable us to advise our client further."
It is appropriate that the principal argument for the defendants and third party on this appeal also be put in the further context of the second defendant's pleadings. Despite putting in issue a number of the plaintiff's allegations which were unable to be disputed seriously, the second defendant sought indemnity from the first defendant on the basis that:
"(a) The International Acco Truck was not owned by the first defendant as was stated by documents submitted to the second defendant by the first defendant; and
(b) The second defendant did not reserve [sic.] absolute property in the goods and quiet possession free from all encumbrances ... ."
Against this background, it is convenient to turn to the main point relied on by the defendants and third party which was that it was not proved that the truck the subject of the arrangement between the plaintiff and the first defendant and the transaction between the plaintiff and the second defendant was owned by Ms. Matthews and Mr. Simpson and had been stolen from them by Tillmann and sold by him to the first defendant.
The evidence before the Court included a certificate that Tillmann committed the offences charged which, by section 79 of the Evidence Act 1977, in the absence of evidence to the contrary was proof that he "... committed the acts ... which at law constitute" those offences. Those facts included the fact that the truck stolen by Tillmann was then "the property of" Ms. Matthews and Mr. Simpson: cf Jacobsen v. Suncorp Insurance and Finance (No.2) (1992) 1 Qd R. 385, 388.
On the second count against him, Tillmann was convicted of falsely pretending to an employee of the first defendant that "an International truck" was Tillmann's property. Through the letters set out above, the second defendant's pleading and receipt of money from the Auctioneers and Agents Committee and the fact of the contest for the truck between Ms. Matthews and Mr. Simpson and the plaintiff which led to the truck being delivered to the plaintiff on 19 July 1990, the remainder of the chain of activities with respect to the truck emerges inferentially. Even if the trial judge overstated the point by describing the inference as irresistible, the conclusions in favour of the plaintiff were comfortably established on the balance of probabilities which is all that is required.
It was not argued that either first or second defendant obtained or passed a good title if, as has been found, the subject truck was acquired by the first defendant from a thief, Tillmann, but it was submitted that the trial judge erred in his conclusion that each of the defendants had breached a condition implied by section 69 of the Trade Practices Act 1976 (Commonwealth) in its transaction with the plaintiff that it had title to the truck the subject of those transactions.
There are difficulties with aspects of his Honour's reasoning which it is unnecessary to pursue. Indeed, there may be difficulties in the entire notion that thee was any "supply" of the truck by the first defendant to the plaintiff within the meaning of the Trade Practices Act, but the submissions for the appellants implicitly assumed that there was and there may be little practical consequence since it is common ground that, if the plaintiff succeeds, it is the first defendant and the third party who are ultimately responsible. The matter proceeded on the basis that a warranty of quiet possession implied in each transaction by sub-section 69(1)(b) of the Trade Practices Act had been breached if the plaintiff established, as it has been found that he did, that the truck which he received and which was impounded by the police was that owned at the time by Ms. Matthews and Mr. Simpson.
However, two points were raised with respect to the amount of the plaintiff's damages.
Firstly, it was submitted that he could and should have obtained an order for redelivery of the truck pursuant to section 39 of the Justices Act at an earlier time than he did and thus that he had failed to mitigate his loss of profits. Apart from the fact that it is by no means clear that the plaintiff was entitled to the truck under section 39 of the Justices Act even as at 19 July 1990 when the relevant order was made, this submission faces a number of difficulties. It was found by the trial judge and not challenged in this Court that the plaintiff made unsuccessful attempts to hire another truck and could not afford to purchase another truck. Further, the trial judge only allowed the plaintiff loss and profit to the end of March 1990 on the basis that he could have applied under section 39 after Tillmann was convicted.
The remaining contention for the defendants and third party was that the plaintiff had not properly proved his claim for loss of profits because no satisfactory evidentiary basis was established for the expert opinion given in evidence by Mr. Cheel, a chartered accountant called by the plaintiff. His evidence was based on books and records of the plaintiff and statements made to him by the plaintiff. The books and records, which were voluminous, were not formally tendered as an exhibit but were marked for identification and available to experts for the other parties. Further, most, if not all, of the information orally provided by the plaintiff to Mr. Cheel was sworn to by the plaintiff in his evidence. To the extent that there might have been any deficiency, it is explicable by reference to the manner in which the trial was conducted by the defendants and third party, including the objection which was made to the plaintiff's evidence when, after he was recalled, he tried to say what he had told Mr. Cheel.
There is no doubt but that the defendants and third party had ample opportunity to test the expert evidence, just as they did the question of ownership of the truck to which earlier reference was made. Their decision to proceed as they did, which included a rival expert opinion based substantially on the same material as that relied on by Mr. Cheel, does not provide a sufficient ground for this Court to set aside the judgment below, especially since his Honour did not fully accept either expert but compromised between their respective views.
The appeals are dismissed with costs to be taxed.
However, paragraph 4 of the order below is varied by increasing the amount to $44,414.93.
0
0
0