Nominal Defendant v Andrews

[1969] HCA 51

HIGH COURT OF AUSTRALIA

Barwick C.J., Kitto, Taylor, Menzies and Windeyer JJ. (THE RIGHT HONOURABLE MR. JUSTICE TAYLOR died before judgment was delivered in this case.)

NOMINAL DEFENDANT v. ANDREWS

(1969) 121 CLR 562

28 October 1969

Insurance—Hire Purchase

Insurance—Third party insurance (N.S.W.)—"Owner" of unregistered and uninsured motor vehicle—"Person entitled to immediate possession"—Motor vehicle under hire-purchase agreement—Breach of agreement—Vehicle in actual possession of stranger to hire-purchase agreement—Action by passenger against nominal defendant—Plaintiff joined as third party—Motor Vehicles (Third Party Insurance) Act, 1942, as amended (N.S.W.), ss. 5*, 32**. Hire Purchase—Possession of goods—Breach of agreement—Right to possession—Whether owner in notional possession.

Decisions

October 28.
The following written judgments were delivered: -
BARWICK C.J. In an action at law tried in the Supreme Court of New South Wales by a judge and jury of four persons a verdict was returned for the respondent against the appellant. The appellant is the nominal defendant appointed under the Motor Vehicles (Third Party Insurance) Act 1942, as amended, of the State of New South Wales (the Act). The respondent claimed to have been a passenger in a car driven by one, Blandford, when it was involved in an accident which the respondent claimed to have been due to the negligence of the driver, and in which the driver was himself killed. The car was an uninsured and unregistered vehicle. The appellant in addition to denying the elements of the respondent's cause of action pleaded by way of further defence that the respondent was the owner of the motor car within the meaning of the Act at the time of the accident and was thus bound to indemnify the appellant for the amount of any damages which might be awarded to him in the action brought against the appellant. I do not pause to consider whether this was strictly a matter of defence : but in any case it was for the appellant to make out the assertion that the respondent was relevantly the owner of the motor vehicle. (at p564)

2. After verdict it can be taken that the respondent was a passenger in the car, that it was driven by Blandford and that Blandford's negligence was the cause of the accident out of which the respondent's injuries arose. Section 32 (1) of the Act provides :

"Any amount properly paid by the nominal defendant in satisfaction of a claim made or judgment recovered against him and the amount of any costs and expenses properly incurred by him in relation to any such claim or to the proceedings in which the judgment was obtained may be recovered by the nominal defendant as a debt from the person who, at the time of the occurrence out of which such claim arose or in respect of which such judgment was obtained, was the owner of the motor vehicle or, where at the time of such occurrence some other person was driving the vehicle, from the owner and the driver jointly or from either of them severally. . . ."

"Owner" is said by s. 5 (1) of the Act to mean, in reference to a motor vehicle other than in the case where a trader's plate is affixed to the motor vehicle:

"(ii) where the motor vehicle is unregistered, or where the motor vehicle is registered but the person in whose name the motor vehicle is registered has sold or ceased to have possession of the motor vehicle within the meaning of section twenty-one of this Act - any person who solely

or jointly or in common with any other person is entitled to the immediate possession of the motor vehicle." (at p565)

3. The case had some unusual features. The purchase of the car from a car dealer had been negotiated by the respondent, though, as he said, on behalf of Blandford. There was evidence from which it could have been concluded that after the purchase was made a form of transfer of the registration of the car into Blandford's name was signed by the prior registered owner. But that transfer does not seem to have been registered. Blandford does not appear to have been at any time the registered owner. Upon the expiry of the registration current at the date of the purchase of the car, there being no renewal of registration, the car became an unregistered vehicle within the meaning of the Act. However, the respondent signed the hire-purchase agreement entered into in connexion with the purchase of the car and also signed the proposal for its insurance as owner, thus undoubtedly taking upon himself personally the obligations of the hire-purchase agreement. The respondent had provided all the cash which had been paid over on the purchase of the car but, as the respondent claimed, only by way of loan to Blandford. The respondent gave evidence that Blandford took physical possession of the car at the time of the purchase and that he, Blandford had had it in his possession up to the time of the accident. He also gave evidence as to the circumstances which had led to his being a passenger in the car on the occasion of the accident. (at p565)

4. The learned trial judge after having pointed out that the owner is prima facie entitled to possession and that the law says that possession is prima facie evidence of ownership said to the jury :

"So in that background you will see that the first important thing to be decided is, who really owned this car? When I use the word 'owned' there I do not mean 'owned' as defined in the Act of Parliament ; I mean 'owned' in the common, ordinary everyday sense. The best way I can put it to you is to use the phrase you have heard at least once in the addresses - 'whose car is it?' in the ordinary, accepted sense?"

His Honour proceeded to place before the jury the facts relevant to that question. (at p565)

5. The jury returned a verdict for the respondent. The appellant unsuccessfully sought from the Court of Appeal Division of the Supreme Court (1968) 70 SR (NSW) 419 ; 89 WN (Pt 2) 113 a new trial of the action upon the ground of misdirection on the part of the trial judge in several respects but principally in connexion with his direction on the question of the ownership of the car. The appellant now appeals to this Court upon substantially the same grounds. (at p566)

6. Though by reason of the hiring agreement the respondent was at law entitled to the possession of the car, because of the situation between himself and Blandford he could be held to hold that right for Blandford. It was faintly argued that equitable rights should be ignored in relation to the Act and that only legal as distinct from equitable rights regarded when applying the definition of "owner". In my opinion, such a submission is without substance. There can be equitable owners as well as legal owners who fall within the definition of "owner" supplied by s. 5 of the Act. (at p566)

7. Freed of any complication said to arise from the signature by the respondent of the hire-purchase agreement and the proposal for the insurance of the car, there was clearly evidence before the jury upon which the jury could have drawn an affirmative conclusion that Blandford was relevantly the owner of the car. But such a finding would have been unnecessary as the appellant carried the onus of establishing that the respondent was the owner of the car at the date of the occurrence. In my opinion, on any view of the facts of the case, the jury were not bound to be satisfied that the respondent was the owner. (at p566)

8. But the Supreme Court gave a particular reason for thinking that the appellant must fail as a matter of law on the issue of the ownership of the car. It was said that the execution of the hirepurchase agreement by the respondent could not have been on behalf of Blandford in the sense that as between himself and the hiring company Blandford acquired rights and came under obligations by virtue of the hire-purchase agreement : that at the point of time when that agreement was executed it was the hiring company which was the owner and that on that execution, the right to possession of the car passed at law to the respondent : that as between himself and the hiring company, he held that possession beneficially and in respect of it he was bound by the terms of the hire-purchase agreement. (at p566)

9. Clause 2 of that document contains the following promise by the respondent :

"(b) not to take the goods outside New South Wales and to retain them in my possession and custody and to allow you access to the same at all times to make an inspection or test for those purposes you may enter in or upon my premises where the goods are or are presumed to be." (at p566)

10. Clause 5 of the agreement provides that if the respondent should commit any breach of the agreement the hiring company might "without previous notice to me (the respondent) determine the hiring and retake possession of the goods". (at p567)

11. It was therefore said that at the moment Blandford obtained physical possession of the car with the respondent's assent, there was a breach of the hire-purchase agreement and that the right of possession of the vehicle thereupon and without the necessity for any action on its part reverted to the hiring company. Thus at the date of the occurrence, so it was said, the hiring company was as a matter of law exclusively entitled to possession of the car. Therefore the respondent could not then have been the owner for the purposes of the Act and the appellant's defence in that respect must, as a matter of law, fail. (at p567)

12. But, even if it be granted that there was a breach of the hire-purchase agreement when the respondent parted with possession of the car and Blandford came into possession of it, it by no means follows that there was therefore an automatic change in the right to possession of the car in a proprietary sense. True enough, the breach gave the hiring company the right immediately to terminate the hiring and to retake possession of the car. But its right to recover the car depended upon its termination of the agreement to hire it. Of course, no notice of that termination need have been given by the hiring company to the respondent. But however it is achieved there must, in my opinion, be a termination of the hiring to found the right to retake possession. That is to say that until the termination of the hiring the right to possession remains in the hirer. (at p567)

13. In this case there had not been any termination of the hiring. The hiring company knew nothing of the breach and consequently had done nothing to terminate the hiring or to change the right to possession which the respondent had under the hiring agreement. The fact that it could have done so without notice to the respondent does not involve the conclusion that upon a breach of the terms of the hiring agreement it must be taken to have done so. The termination of such an agreement involves a decision of the hiring company, which may be express or implied, to exercise its right of termination. With due respect, therefore, I am unable to accept the conclusion in this case that, as a matter of law, the right to possession of the car was vested in the hiring company merely by reason of the breach of the hire-purchase agreement. (at p567)

14. The case therefore resolves itself into one in which, upon the evidence, the jury quite clearly were not bound in law to find that the respondent was the owner of the car. Indeed they were entitled not to be satisfied that he was. The passage I have quoted from the trial judge's summing up was not, in my opinion, erroneous and fairly put before the jury what they had to decide. (at p568)

15. In my opinion, the appeal should be dismissed. (at p568)

KITTO J. I agree in the judgment of the Chief Justice and have nothing to add. (at p568)

MENZIES J. Andrews, the plaintiff respondent, sued the defendant appellant for damages for negligence in respect of injuries received by him in an accident when a car, driven by one Blandford in which the plaintiff was a passenger, left the roadway and went over a cliff. Blandford was killed and the plaintiff seriously injured. The car was at the time unregistered and it was because of this that the action was brought against the nominal defendant by virtue of s. 30 of the Motor Vehicles (Third Party Insurance) Act, 1942 (N.S.W.). A verdict for the plaintiff for $39,888 was followed by judgment. The Court of Appeal of the Supreme Court of New South Wales dismissed the defendant's appeal (1968) 70 SR (NSW) 419 ; 89 WN (Pt 2) 113 . (at p568)

2. The only ground of appeal that counsel for the appellant urged was based upon s. 32 of the Act which entitles the nominal defendant to recover from the owner of an unregistered motor car any amount paid by the nominal defendant in satisfaction of the judgment and costs obtained under s. 30 of the Act. It has been assumed by all concerned - perhaps too readily - that the right of recovery given by s. 32 can be raised as a defence in an action for damages against the nominal defendant by a person who, being the owner of an unregistered motor car, was injured through the negligence of the driver and sues the nominal defendant by virtue of s. 30. I am, however, prepared to accept this assumption, without examination, for the purposes of this appeal. (at p568)

3. On this footing the question is then whether the plaintiff was the owner of the car that was driven negligently by Blandford. If he was his action should have failed. An owner of an unregistered vehicle is, by reason of the definition in s. 5 of the Act, a person "who solely or jointly or in common with any other person is entitled to the immediate possession of the motor vehicle". (at p568)

4. The car that Blandford was driving, in which the plaintiff was a passenger, was, when the accident happened in March 1960, the subject of a hire-purchase agreement dated 23rd December 1959 made between Northern Credits Pty. Ltd. and the plaintiff. By this agreement the plaintiff agreed inter alia to retain the motor car in his possession and custody and further agreed that in the event of any breach of the agreement the company, without previous notice to him, might determine the hiring and take possession of the motor car. (at p569)

5. The defendant's case was that, by virtue of the hire-purchase agreement, the plaintiff was entitled to the immediate possession of the motor car and was, therefore, by virtue of the definition already quoted, the owner of the motor car for the purposes of s. 32. (at p569)

6. The plaintiff's case was that, although he had signed the hire-purchase agreement and taken possession of the motor car, he had done so at the request of Blandford and, as between the two of them, Blandford, not he, was the owner of the motor car. This was a matter in issue between the plaintiff and the defendant at the trial and as to this his Honour the learned trial judge gave the jury this direction :

" . . . you will see that the first important thing to be decided is, who really owned this car? When I use the word 'owned' there I do not mean 'owned' as defined in the Act of Parliament ; I mean 'owned' in the common, ordinary everyday sense. The best way I can put it to you is to use the phrase you have heard at least once in the addresses - 'whose car is it?' in the ordinary, accepted sense? Then you would not say it belonged to Northern Credits. It was not their car in the ordinary sense, but whose car was it? There were two contenders for that right, the plaintiff and the deceased. This means, did the plaintiff buy it for himself and lend it to the deceased for a short time and for a specific journey? That is one point of view. Did he buy it for himself and say to his friend, 'Take it, drive your ladyfriend and six children and goods and chattels up to Gleniffer, and let me have it straight back?' That is one view. Or did the plaintiff act as an agent or intermediary for the deceased, insure it in his own name, so that he never was in truth the owner in the ordinary sense? But was he merely owed money by the deceased in respect of that transaction? Those seem to me to be the competing views of the facts, for which the parties contend. . . . So you come to the question of what was the situation in respect of this vehicle on 9th March 1960? Was the deceased driving the vehicle which had been bought for him and had been in his possession for nigh on two months (and certainly you may think up at the North Coast for about three weeks in his possession) with the plaintiff as a passenger, the plaintiff being only concerned with money which was owing to him ; or was the deceased, as a matter of convenience, driving the plaintiff's car which he had come up to recover and which had been unduly held over after a temporary loan? In the former case I would take the responsibility, and I do take the responsibility, of telling you that it was the deceased who was entitled to the immediate possession, and I likewise take the responsibility of telling you that on those bare facts in the latter case it was the plaintiff who was entitled to the immediate possession." (at p570)

7. The direction from which I have quoted was not the subject of any objection and it was, in my opinion, correct. The jury, having found for the plaintiff, and the defendant conceding that there was evidence upon which the jury could find that Blandford, and not the plaintiff, was the owner, I do not think that the verdict should have been disturbed and I would decide this appeal on that simple ground. (at p570)

8. The Court of Appeal, however, decided for the plaintiff on a different and more complicated basis. By the hire-purchase agreement, as has already been seen, the plaintiff agreed that he would retain the car in his care and custody, and further agreed that in the event of a breach "then and in any such event you" (i.e., the company) "may without previous notice to me determine the hiring and take possession" of the motor car. Treating the plaintiff's handing over of the car to Blandford as a breach of the hire-purchase agreement, the Court of Appeal considered that the right of the hire-purchase company to determine the hiring and take possession of the motor car made that company, and not the plaintiff, the owner for the purposes of s. 32 of the Act because upon breach the company became "entitled to the immediate possession of the motor vehicle". Having reached the conclusion that I have already expressed it is not necessary for me to decide whether or not the Full Court was correct. Moreover, it appears to me that in a case which is complicated by uncertainty about the transaction as a whole, arising from the question of the relationship between the plaintiff and Blandford and the lack of information about what actually happened under the hire-purchase agreement in relation to the payment of hiring instalments and the other matters, it is advisable to reserve the question of the correctness of the Full Court's decision. In these circumstances I content myself with saying that I am not satisfied that any breach of the hire-purchase agreement, giving the hirer the right to terminate the hiring and retake possession of a motor car subject to the agreement, of itself and without more, constitutes the hirer a "person who . . . is entitled to immediate possession of a motor vehicle". The proposition accepted by the Court of Appeal has far-reaching consequences and I would prefer to consider and determine its correctness as part of a decision of this Court. Any observations which I were to make upon the question, contrary to the view that found favour in the Court of Appeal, would be no better than obiter dicta. (at p571)

9. In my opinion the appeal should be dismissed. (at p571)

WINDEYER J. I agree that this appeal should be dismissed. (at p571)

Orders

Appeal dismissed with costs.