Lavan Legal v Davies
[2008] WADC 178
•18 DECEMBER 2008
| JURISDICTION | : | DISTRICT COURT OF WESTERN AUSTRALIA IN CIVIL |
| LOCATION | : PERTH | ||
| CITATION |
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| CORAM | : EATON DCJ | ||
| HEARD |
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| DELIVERED |
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| FILE NO/S |
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| BETWEEN | : LAVAN LEGAL |
Judgment Creditor
AND
LYNDON GILES DAVIES
Judgment Debtor
GE COMMERCIAL CORPORATION
(AUSTRALIA) PTY LTD
First Claimant
HILLARYS YACHT CLUB INC
Second Claimant
Catchwords:
Sheriff's interpleader summons - Nemo dat quod non habet - Turns on own facts
Legislation:
Civil Judgments Enforcement Act 2004
Navigable Waters Regulations 1958
Western Australian Marine Act 1982
[2008] WADC 178
Result:
First claimant's claim made out
Representation:
Counsel:
| Judgment Creditor | : | Mr I R Freeman |
| Judgment Debtor | : | No appearance |
| First Claimant | : | Mr P G Clifford |
| Second Claimant | : | No appearance |
Solicitors:
| Judgment Creditor | : | Lavan Legal |
| Judgment Debtor | : | Not applicable |
| First Claimant | : | Lawton Gillon |
| Second Claimant | : | Not applicable |
Case(s) referred to in judgment(s):
Olsson v Dyson (1969) 120 CLR 365
[2008] WADC 178
EATON DCJ
EATON DCJ: On 20 December 2007 Lavan Legal filed a writ of summons in this Court. The defendant was Lyndon Giles Davies (hereinafter referred to as "Davies"). By an endorsement of claim Lavan Legal sought judgment in the sum of $132,651.54 with interest and costs for professional services rendered and expenses incurred by it at the request of Davies pursuant to a contract of engagement. The writ was personally served on Davies on 20 December 2007.
2 On 15 January 2008 Lavan Legal entered judgment in default of an
appearance by Davies in an amount of $132,651.54 with $305.28 interest
and costs to be taxed on a solicitor and client basis.3 On 1 February 2008 Lavan Legal filed an application for a
Property (Seizure and Sale) Order pursuant to the provisions of the
Civil Judgments Enforcement Act 2004.4 On 1 February 2008 the Registrar of the Court issued a
Property (Seizure and Sale) Order with respect, inter alia, to seizable property at Hillarys Marina or at 62 Bayport Circuit, Mindarie, Western Australia.
On 5 May 2008 the Sheriff filed an interpleader summons requiring that Lavan Legal, Davies and GE Commercial Corporation (Australia) Pty Ltd (hereinafter referred to as "GE") attend before the Registrar in Chambers to state the nature and particulars of their respective claims to property comprising a 9.8 metre "Mustang" pleasure boat. The Sheriff supported the application with an affidavit deposing to having seized the boat at Sorrento on 18 February 2008 pursuant to the Property (Seizure and Sale) Order. He further deposed to having received notice of a claim over it from GE, to having forwarded that notice to Lavan Legal and to having received notice of dispute. GE entered an appearance to the proceedings on 15 May 2008.
6 I am to decide the dispute between Lavan Legal and GE. I have
before me, in that regard, the affidavits of Shane Kingsley Smith sworn 5 June 2008, 3 November 2008 and 13 November 2008, the affidavits of Lyndon Giles Davies sworn 18 June 2008 and 20 November 2008 and the affidavit of Lee Simon Panotidis sworn 30 June 2008.
7 On 1 July 2008 Deputy Registrar Hewitt ordered that Hillarys Yacht
Club Incorporated be joined a second claimant, that Lavan Legal and GE proceed to trial on the issue of whether, at the time of seizure by the Sheriff, the goods seized were the property of Lavan Legal or GE and that
[2008] WADC 178
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the issue raised by the Hillarys Yacht Club claim be deferred until
determination of the primary issue.8 Both Lavan Legal and GE have given discovery of documents.
On 8 September 2008 Registrar Kingsley ordered that the matter be listed for trial on 24 and 25 November 2008. On 8 October 2008 the Principal Registrar ordered that the trial proceed on oral evidence, that the evidence-in-chief be the affidavits filed by Lavan Legal and GE that if a deponent were not presented at trial for cross-examination his or her affidavit may not be put into evidence.
The matter was heard before me on 24 and 25 November 2008. In addition to the affidavit material referred to above I heard viva voce evidence from Shane Kingsley Smith and Lyndon Giles Davies.
10 Shane Kingsley Smith (hereinafter referred to as "Smith") is the
national sales director of GE, a finance company. Davies was in June 2008 and, at all material times, a director of Mirage Marine Pty Ltd (hereinafter referred to as "Mirage"). On 27 September 2005 Davies executed, as a director of Mirage, four documents the result of agreement reached between Mirage and GE whereby GE would provide what is generally known as a "floor plan" for Mirage. Its business was the sale of marine pleasure craft.
11 The documents concerned, each dated 27 September 2005 were,
firstly, a bailment agreement, secondly, a secured guarantee, thirdly, a guarantor acknowledgment and finally, a fixed and floating charge. By the first GE, at the request of Mirage, might purchase equipment to be taken on bailment by Mirage pursuant to the terms of their agreement. Mirage agreed that it would take possession of any equipment purchased by GE on the terms and conditions set out in that agreement.
12 Their agreement defined "equipment" as meaning "goods of various
types which the bailee requests that GE commercial finance purchase and which are to be bailed to the bailee under this agreement. Equipment includes any replacements of, alteration or addition to, including any accessories, tyres, tools or other goods supplied with or attached to the equipment and any trade-in purchased by GE commercial finance under cl 6."
13 Clause 6 of the agreement provided, in effect, that if Mirage accepted
any equipment in full or partial satisfaction of the purchase price for any item of equipment it would purchase the trade-in in its own right not as agent for GE. The clause further provided that Mirage would hold the
[2008] WADC 178
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relevant trade-in on trust for GE and itself, would sell the relevant trade-in and account immediately for the proceeds of sale, first to GE up to the amount owing under cl 5.2 in respect of the equipment for which the trade-in was accepted as part payment, and might retain the balance by cl 6.3 of the agreement. If Mirage wanted to place the relevant trade-in on bailment pursuant to the terms of the agreement it was obliged to offer to sell the trade-in to GE which might then elect to purchase it.
14 By cl 5.1 of the agreement Mirage would not sell or otherwise
dispose of equipment purchased by GE and placed with it on bailment except in the ordinary course of business. Upon any sale Mirage would be deemed to have purchased the item immediately prior to the sale and the amount payable specified in the trust receipt and all other monies due or owing under the agreement with respect to that particular equipment would become immediately due and payable. Mirage was obliged to immediately remit to GE the total proceeds together with any additional amount necessary to pay amounts due under the agreement. Further, until receipt by GE of the proceeds from Mirage the latter was to hold the proceeds in trust for GE and account immediately for those proceeds to GE.
15 Pursuant to the secured guarantee Davies unconditionally and
irrevocably guaranteed to GE that Mirage would pay to GE all amounts payable by Mirage to GE and the due and punctual performance by Mirage of all its obligations to GE. The liability of the guarantor was agreed to be a principle liability whereby Davies would unconditionally and irrevocably indemnify GE against any liability or loss GE suffered or costs incurred by it in connection with the whole or any part of the amounts guaranteed by Davies not being recoverable from Mirage.
16 By the guarantor acknowledgement Davies acknowledged that he
had agreed to enter into the guarantee in favour of GE and that it was for all amounts payable by Mirage to GE and for the due and punctual performance by Mirage of all its obligations to GE under commercial transactions entered into by Mirage with GE. He acknowledged that he understood that the amounts payable by him to GE under the guarantee were not limited to any amount or to any transaction or to any period of time.
17 Mirage Marine Pty Ltd was registered in Western Australia on
5 September 2005. Davies was, from the outset, the company's director and secretary. Pursuant to the arrangements referred to with GE, Mirage acquired stock for that business, being various vessels beginning, it seems,
[2008] WADC 178
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with the acquisition by GE from Q-Corp Marine Pty Ltd trading as "Mustang Cruisers" of a Mustang 4200 Sportscruiser on 23 September 2005. That vessel was delivered to Mirage on or about 29 September 2005 and GE issued a "trust receipt" to Mirage in the sum of $395,257.50 including the goods and services tax ("GST") being the amount payable to GE in the event of sale by Mirage. In other words, that vessel became part of the floor plan arrangements between Mirage and GE.
| 18 | Similarly, | on | 28 | September | 2005 | GE | purchased |
a Mustang Cruiser 3200 and supplied that vessel to Mirage for $167,882 including GST which, according to the trust receipt provided to Mirage by GE, was the amount payable in the event of sale by Mirage. That particular vessel carried the chassis number AU-MUST 02281506. That the vessel is the subject of the sheriff's interpleader summons filed 5 May 2008. I will, henceforth, refer to it as "the boat".
In due course the boat was sold by Mirage to Rodney Peter and Elizabeth Josephine Griffiths.
20 The sale and registration of boats in Western Australia is regulated
by the Department of Planning and Infrastructure. Upon its sale the boat was registered to the Griffiths on 9 December 2005 and given registration number DG 385. On 9 December 2005 Mirage paid GE the amount that was due to it according to the trust receipt. The boat was, it seems, sold by Mirage in the ordinary course of business and, in accordance with cl 5.1 of the bailment agreement Mirage was deemed to have purchased it immediately prior to sale and the amount payable, as specified in the trust receipt, and all other monies due or owing under the agreement with respect to it would become immediately due and payable. Mirage was obliged to immediately remit to GE the total proceeds. That happened. Mirage then transferred ownership to the Griffiths who proceeded to registration.
21 According to Davies, in May 2006, the Griffiths called him to
enquire about a bigger boat. On 11 May 2006 Mirage rendered a tax invoice to the Griffiths for delivery of a 2006 Mustang 3800 Sportscruiser Royale for a price of $365,000. The invoice indicated that the Griffiths had paid a deposit of $30,000. On 10 May 2006, the Griffiths electronically transferred the sum of $30,000 to a Mirage account with Westpac. The tax invoice made allowance for a trade-in, being the boat, attributing the trade-in value as $235,000, leaving a balance of $100,000 payable by the Griffiths to complete the purchase. On 26 May 2006 an
[2008] WADC 178
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amount of $100,000 was deposited by Esanda Finance into a Mirage account with Westpac. I find that that amount is the balance of the purchase price paid on behalf of the Griffiths.
22 On 14 November 2005 GE had acquired from Mustang a
Mustang 3800 Sportscruiser Royale for $288,387 for delivery to Mirage. On 13 December 2005 GE raised trust receipt 0109774 in respect of that vessel evidencing supply of that vessel to Mirage as bailee. The amount payable to GE was said to be $288,387. That was the vessel sold to the Griffiths.
23 Davies was cross-examined as to the value attributed to the boat as a
trade-in. He explained that the Griffiths were disgruntled with the boat and, as a consequence, rather than reduce the price of the new vessel, he inflated the value attributed to the boat as a trade-in.
24 By cl 6 of the bailment agreement, if Mirage accepted any equipment
in full or partial satisfaction of the purchase price of any item subject to the floor plan, Mirage would purchase the trade in its own right rather than as an agent for GE. The clause further provided that Mirage would hold the relevant trade-in on trust for GE and itself, would then sell the trade-in and account immediately for the proceeds of sale. If Mirage wanted to place the trade-in on bailment pursuant to the terms of the bailment agreement it was obliged to offer to sell it to GE which might then elect to purchase it.
25 In his evidence-in-chief Davies said that he entered into negotiations
with Rodney Griffiths and on 12 May 2006 purchased the boat from the
Griffiths for the sum of $170,000. He said:"I paid Rodney Griffiths for the boat using my wife and my
personal funds".
26 According to the records of the Department of Planning and
Infrastructure he then proceeded to register himself as the owner of the boat.
27 In cross-examination Davies accepted that GE was not paid the
amount due to it in accordance with trust receipt 0109774 in respect of the Mustang 3800 Sportscruiser Royale sold to Griffiths or any part of it. With respect to Davies' alleged purchased of the boat he said, in cross-examination:
"So it was only a transaction between the customer and myself.
It had nothing to do with GE."
[2008] WADC 178
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28 In par 22 of his affidavit sworn 18 June 2008 Davies deposed that in
May 2006 he owned a SeaRay 315 which was his personal boat purchased by him in 2004 for $165,000. He claimed to have sold it in early 2006 for that amount. In his supplementary affidavit of 20 November 2008 he added that he had deposited the sum of $165,000 from the sale of it into a Mirage Westpac account as a loan to Mirage. He then deposed that when the Griffiths wanted to trade the boat he decided that he, personally, would buy it believing that the true trade-in value of it was about $165,000 to $170,000.
In cross-examination Davies confirmed that he sold the SeaRay 315 but was unable to say who it was sold to. He confirmed that the proceeds of sale were placed in a Mirage bank account immediately after the sale which, he said, was around May 2006. He had owned that vessel for a year or so but was unable to remember its registration number. He agreed that he had been charged in the Joondalup Magistrates Court on 25 June 2008 with disposing of a SeaRay boat, registration number BU634, without the consent of that vessel's mortgagee, Esanda Finance Corporation Limited. The offence was alleged to have occurred on 11 August 2006 at Claremont. In cross-examination Davies accepted that he had been charged with the offence under the Credit Act 1984, that he had pleaded guilty to the charge and was fined $500. Davies appeared to accept, in cross-examination, that the disposition of the vessel the subject of the prosecution was a sale on 11 August 2006. He was questioned as to whether he had sold the same vessel on two occasions, firstly, in May 2006 and secondly, in August 2006. He replied that it had been sold only once in August 2006 rather than in May of that year.
30 Davies was cross-examined on the basis that when he became
registered as the owner of the boat he did so on the basis of a transfer from Mirage to him. My understanding of Davies' evidence was to the effect that the arrangement he made with the Griffiths was that he would purchase the boat from them for $170,000 and, in consequence, it was registered in his name.
31 The Griffiths were not called to give evidence. Apart from the
assertion by Davies that he paid the Griffiths $170,000 for the boat, there is no evidence to confirm that the payment was made. The documentary evidence suggests that Davies, in his capacity as a director of Mirage, entered into an agreement whereby Mirage would accept the boat as a trade-in on the purchase of a bigger vessel, the value of the trade-in being, according to the invoice, $235,000. I find, as a fact, that the Griffiths paid $130,000 pursuant to their agreement with Mirage on the basis of Mirage
[2008] WADC 178
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accepting the boat as a trade-in for $235,000. I do not accept Davies' evidence that he paid $170,000 to the Griffiths for the boat. I infer that he procured the registration of it in his name in breach of his obligations as a director of Mirage which, quite clearly, pursuant to the sale of the Mustang 3800 Sportscruiser Royale, held the trade-in on trust for GE and itself. Mirage was then obliged to sell the trade-in and account immediately for the proceeds of sale. There is no evidence that it did so. I find that Davies converted the boat to his own use. It was never sold to him and he never acquired title in it.
32 I conclude that the system of registration supervised by the
Department of Planning and Infrastructure is not a system for determining title. The Western Australian Marine Act 1982 defines the phrase "pleasure vessel" to mean a vessel held wholly for the purpose of recreational or sporting activities and not for hire or reward and any other vessel declared to be a vessel to which that part of the Act applied by order of the Minister. Section 99 of that Act provides for the making of regulations prescribing all matters necessary or convenient to be prescribed in respect of the registration, navigation and operation of pleasure vessels and providing for the suspension or cancellation of such registration. The regulations might also prohibit the navigation of pleasure vessels that could not be safely navigated and regulate the maintenance and repair of such vessels.
33 In the Navigable Waters Regulations 1958 a registrable vessel means any pleasure vessel within the meaning of that term as defined in the Western Australian Marine Act 1982 which is or may be propelled by mechanical power. The boat is a registrable vessel under those regulations. By them a person may not use or have in navigable waters a registrable vessel unless it is registered with the department in accordance with the regulations. A person who contravenes that provision commits an offence.
34 Where the owner of a registered vessel sells or otherwise disposes of
a vessel the owner commits an offence if he or she does not forthwith furnish to the person to whom the vessel was sold the certificate of registration issued in respect it and, within seven days of the sale, give notice to the department in writing of the sale or disposal of it. The person to whom a registered vessel has been sold commits an offence if he or she does not, within 15 days of the sale, apply to the department for the transfer of the vessel and include with his or her application the relevant fee, producing to the department the certificate of registration of the vessel.
[2008] WADC 178
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35 Registration of a vessel does not confer title upon the registrant but
rather forms part of a wider administrative regime primarily concerned with safety in the use of such vessels in navigable waters. It follows that registration is not and was not intended to be conclusive proof of ownership or title but rather is an artifice of the administrative regime contemplated in the Western Australian Marine Act 1982.
36 It appears that Davies, having converted the boat to his own use
continued to use it as his own and entered into an arrangement with Hillarys Yacht Club Inc for the boat to be moored at the club's facilities at Hillarys Boat Harbour.
37 In his evidence-in-chief Smith says that in or about early
December 2006 he became aware that Mirage had 12 vessels on its floor plan facility with GE. The vessels concerned are listed in par 8 of his affidavit sworn 3 November 2008. Vessel number seven in that list is a Mustang 3800 Sportscruiser Royale having serial number 0224K506 with an amount payable to GE upon sale of $288,387. That vessel was sold by Mirage to the Griffiths on 11 May 2006. GE had not been paid out and were not aware of its sale.
38 Mirage's total indebtedness to GE was, in December 2006, in excess
of $3.25 million. Being concerned, Smith made enquiries and found that some of the vessels on the list were the subject of securities to other institutions and were registered in names other than GE or Mirage. He concluded that those vessels had either been sold or "double financed" by Mirage.
39 Smith urgently arranged a meeting with Davies and at 7.30 am on
Friday 15 December 2006 he and another GE employee, Mark Imrie, met with Davies at the Dome Coffee Shop at Hillarys Boat Harbour. He expressed his concerns to Davies.
40 After a lengthy conversation he, Imrie and Davies returned to the
Mirage office at Hillarys Boat Harbour. Smith determined, after reviewing the paperwork and records that, of the 12 vessels listed as being on the floor plan, there were three which had not been sold. Steps were taken for GE to take possession of those vessels.
41 Smith said that, during his meeting with Davies at the Mirage office,
he asked Davies if there were any other boats which he or Mirage owned. He says that Davies told him that there was a Mustang which had originally been on the floor plan, had been sold and returned as a trade-in. The boat, said Davies, was in a pen at the Hillarys Boat Harbour. The two
[2008] WADC 178
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men left the office and walked for approximately 5 minutes. They inspected the boat in its pen. Smith says that Davies told him that, in order to sort out the problem and as a sign of Davies' good faith to GE, he would give the boat to GE.
42 In his affidavit sworn 20 November 2008 Davies asserts that he had
the boat because he had sold a larger boat to the Griffiths and had arranged with him to treat the boat as a trade-in to offset part of the purchase price to be paid by the Griffiths for the larger boat. He said:
"In order to complete the transaction I treated the boat as a trade-in on the invoice issued to Rodney Griffiths for the larger boat but used the proceeds from the sale of my personal boat, which had been put into the Mirage Marine bank account and which was owing to me, and offset that amount to purchase the boat for my own personal use."
43 Davies denied that he proposed giving the boat to GE as a sign of his
good faith, claiming that Smith told him that he must transfer the boat to
GE otherwise he might go to jail.44 As a consequence of the urgent discussions held on 15 December
2006, principally between Davies and Smith, Davies signed, on behalf of Mirage, a letter to GE dated 15 December 2006 acknowledging its then current debt to GE in the sum of $3,395,777.27 and giving certain undertakings. Contemporaneously Mirage issued invoice 0002338 to GE in respect of the boat for a total of $190,000 including GST requesting that GE allocate funds in part satisfaction of Mirage's indebtedness to GE. My understanding is that the documents executed on that day were produced at the direction of Smith. The invoice referred to describes the boat as a "new Mustang 3200 Sports Cruiser". Clearly, it was not new. That invoice suggests that GE was treating the boat as being the property of Mirage.
45 Another document signed by Davies on 15 December 2006 was a
boat transfer. Clearly, the boat was a registered vessel with a registration number. Davies signed the transfer as the seller identifying the vessel by its registration number, DG385, and identifying the purchaser as Karl Mark Imrie and GE (referred to as "the applicable organisation"). The purchaser was said to have a residential address of 110 Erindale Road, Balcatta and an email address as follows: "[email protected]". It appears that Imrie signed as the purchaser declaring that the information contained in the form was accurate. Annexed and marked "SKS7" to the
[2008] WADC 178
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affidavit of Smith sworn 3 November 2008 is a tax invoice issued by the Department of Planning and Infrastructure to Imrie of 110 Erindale Road, Balcatta for a registration transfer and renewal in respect of the boat. In due course a certificate of registration was issued by the Department of Planning and Infrastructure dated 8 January 2007. It certified that the boat was registered to GE Commercial Finance Pty Ltd of 110 Erindale Road, Balcatta and that the seller had been Lyndon Giles Davies of Mindarie. The date of transfer was 15 December 2006.
46 Davies' evidence was to the effect that he was handed documents by
Smith and told that he had no choice but to sign them otherwise he would go to jail. Davies claims in his affidavit of 18 June 2008 that he told Smith that he wanted his accountant to look at the document but that Smith and Imrie became increasingly aggressive and threatening. In consequence, said Davies, he signed the document. He asked for a copy and was refused.
47 In April 2007 Davies attended upon an office of the Department of
Planning and Infrastructure. He completed a statutory declaration to the effect that he was the owner of the boat and that it had been transferred to GE "under duress". That declaration, made on 10 April 2007, was submitted along with a further boat transfer to the department which then altered the register to show Davies as the owner of the boat. That transaction serves to confirm my earlier conclusion that registration was not intended to be and cannot be regarded as evidence of title.
48 In his final submissions to me counsel for Lavan Legal confirmed
that it did not seek to upset the existence or enforceability of the bailment agreement, the guarantee or the fixed and floating charge. He submitted that Mirage was not a party to the interpleader proceedings and, that, accordingly, I should be reluctant to make findings as to its rights and obligations in its absence. He further asserted that possession by Davies is prima facie evidence that the boat belonged to him. The evidence before me, he suggested, supports that contention.
49 Counsel for Lavan Legal further contended that in May 2006 Davies
personally purchased the boat from the Griffiths. My finding is that he did not. I found him to be an evasive witness whose evidence, under cross-examination, was changeable. I do not accept his tale involving the sale of the SeaRay 315 which was touched upon in his first affidavit, further developed in his second and expanded upon during cross-examination in an altogether confusing way. The evidence suggests that he sold that vessel, in breach of the provisions of the Credit Act, in
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August 2006. I don't accept that he then paid the proceeds, being $165,000 or any part of it into a Mirage bank account. The sale to the Griffiths in May 2006 took place as documented. In order to secure the deal Davies inflated the value allocated to the boat as a trade-in. The remaining purchase price, being a $30,000 deposit and the balance of $100,000, was paid to Mirage, transferred from the Mirage account and never paid to GE. What became of the funds is not known. My conclusion is that, following the transaction with the Griffiths in May 2006, Mirage was the owner of the boat, holding it in trust for GE in accordance with the terms of the bail agreement.
50 On 15 December 2006 Davies falsely purported to be the owner of
the boat. Given the documentation that was prepared at the time it seems
very likely that Smith had some misgivings about that claim.51 Pursuant to the terms of the bailment agreement the boat was held by
Mirage on trust pending payment to GE of the proceeds of the sale of the second vessel to the Griffiths. Mirage remained the legal owner and GE remained the beneficiary. It did not become subject to the bailment agreement because it was never offered to GE, never purchased by GE and never placed with Mirage as bailee.
52 What, then, occurred on 15 December 2006. It seems that GE was,
not surprisingly, anxious to secure the debt owed to it by Mirage in any way that it could. It immediately re-took possession of the three vessels which had been the subject of the bailment agreement and not been sold by Mirage. When Davies purported to be the owner of the boat steps were taken to bring about transfer of ownership to GE although, as already noted, Smith may have had some misgivings, perhaps well founded, about what he was being told by Davies because the boat was invoiced by Mirage to GE. The net effect of that document would appear to be that Mirage, which did have title in the boat, transferred title to GE. It might then have moved to sell the boat to reduce Mirage's debt to it. That did not occur. Davies subsequent procurement of the registration of the boat from GE to him is, on my findings, quite superfluous given that he never had title to it. The nemo dat quod non habet rule applies. Mirage gained title to the boat from the Griffiths as a trade-in. Davies effectively took possession of it but never gained title to it. As such he could not transfer title to GE.
| 53 | Annexed to Smith's affidavit sworn 3 November 2008 and marked "SKS1" is the fixed and floating charge dated 27 September 2005. By that document Mirage granted a charge to GE. By the deed the phrase |
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"amount owing" was said to mean all amounts at any time, for any reason or circumstance whether at law, in equity, under statute or otherwise payable by Mirage to GE. The document recites that the purpose of the charge is to secure payment of the amount owing and that Mirage charges property to GE for that purpose. "Charged property" was said to mean all rights, property and undertakings of whatever kind and wherever situated, whether present or future but excluding mortgaged property. The phrase "mortgaged property" was defined to mean any rights that Mirage might hold or any property or undertaking mortgaged by it to GE under a separate mortgage.
54 The boat was not subject to a mortgage granted by Mirage to GE.
It was subject to a trust created by the bailment agreement. It does seem to me that the boat, if it is the property of Mirage, is caught by the charge, it being a floating charge over property which is the property of Mirage not being mortgaged property. Invoice 0002338 dated 15 December 2006 does appear to evidence a sale of the boat, misdescribed as "new", by Mirage to GE. That may be regarded as transferring title in it from Mirage to GE. If not, it is still held by Mirage beneficially for GE. Either way the GE claim must prevail, it being either owner absolutely or presently entitled to it. My conclusion, therefore, is that the Sheriff has seized the boat under the understandable misapprehension that it was the property of the judgment debtor. I conclude that Davies never obtained title to the boat and could never have passed good title to either GE or himself given my factual findings.
55 Section 84 of the Civil Judgments Enforcement Act 2004 provides that if a judgment creditor disputes a claim the Sheriff may apply for relief by way of interpleader, if the claim relates to personal property, to the court that issued the Property (Seizure and Sale) Order. On such an application this Court has and may exercise the same powers as the Supreme Court would have if the application were made to it. Order 17 r 9 of the Rules of the Supreme Court 1971 provides that whenever it appears desirable from the nature of the subject matter or the parties agree, the court or a Judge may order the sale of the whole or any part thereof and direct the application of the proceeds according to the rights of the parties as determined on the interpleader summons.
56 According to my findings GE is either absolutely entitled to the boat
or beneficially entitled. In Olsson v Dyson (1969) 120 CLR 365 Barwick
said at p 372:"It has long been the practice in interpleader proceedings under provisions comparable with O.16B to recognise and to give
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effect to equitable rights. As indeed it also was under the interpleader provisions as enforced before the passing of the Supreme Court of Judicature Act 1893, and the making of the orders and rules there under."
57 It does seem to me that I might make an order that the boat be sold
and the proceeds paid to GE. I might do so to give effect to GE's equitable entitlement if there be no absolute entitlement. Either way GE has discharged the burden of proof which a claimant carries in such circumstances. It is enough that GE had established a title or interest in the property. In accordance with my findings the judgment debtor Davies had no interest, legal or otherwise in the boat. Clearly it was properly seized by the Sheriff pursuant to the order issued by the court. What remains now are the precise form of final orders to dispose of the Sheriff's summons in the light of my findings. I will hear counsel in that regard.
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