Ryan v Simon George and Sons Pty Ltd
[2017] QSC 247
•31 October 2017
SUPREME COURT OF QUEENSLAND
CITATION:
Ryan v Simon George & Sons Pty Ltd & Anor [2017] QSC 247
PARTIES:
PAULETTE RYAN
(Applicant)
v
SIMON GEORGE & SONS PTY LTD(First Respondent)
and
ANTHONY FRANCIS McEWAN
(Second Respondent)FILE NO/S:
SC 463 of 2017
DIVISION:
Trial
PROCEEDING:
Application
ORIGINATING COURT:
Supreme Court at Cairns
DELIVERED ON:
31 October 2017
DELIVERED AT:
Cairns
HEARING DATE:
27 October 2017
JUDGE:
Henry J
ORDERS:
1. That part of the application which sought declarations is dismissed.
2. I will hear the parties further as to that part of the application seeking such other orders as this Court deems appropriate and will also hear the parties as to costs.
CATCHWORDS:
PROCEDURE – SUPREME COURT – PRACTICE – INITIATING PROCEDURES – APPLICATION – whether mode of commencement by application under r 11 UCPR correct – whether or not there was a substantial dispute of fact – where counsel for the applicant contended if there was a substantial dispute of fact it was irrelevant because that applicant’s possession was determinative
TORTS – TROVER AND DETINUE – POSSESSIONS OR RIGHT TO POSSESSIONS – RIGHT TO POSSESSION – PARTICULAR RIGHTS – JUS TERTII – where the applicant has possession of the property – where the first respondent has a charge over and where the applicant relied on the principle that a defence of jus tertii is not open to a wrongdoer or stranger against a possessor of the property in question – where the court held that the application was not brought as between a possessor and a wrongdoer
Civil Proceedings Act 2011 (Qld) s 17
Uniform Civil Procedure Rules 1999 (Qld) r 11
Banks v Ferrari & Ors [2000] NSWSC 874, cited
Jeffries v Great Western Railway Company (1856) 2 EL & BL 680, distinguished
The Winkfield [1902] P 42, distinguished
COUNSEL:
M A Jonsson QC for the applicant
P Hackett for the first respondentNo appearance for the second respondent
SOLICITORS:
The Law Office for the applicant
N R Barbi Solicitor for the first respondent
The applicant Ms Ryan seeks the following orders:
“1. A declaration that the Applicant is entitled to have the entire beneficial interest in a motor vehicle namely a 1966 Ford Mustang convertible bearing the registration PNY-11 and VIN 6T07A204833 (“motor vehicle”)
2. A declaration that the First Respondent is not entitled to a charge and/or possession of the said motor vehicle.
3. Such other order or orders that this Honourable Court deems appropriate.”
The dispute underlying the present application is connected with a claim of the first respondent against the second respondent Mr McEwan, heard in Brisbane, in which judgment was given on 28 August 2017 (“the Brisbane proceeding”).
The Brisbane Proceeding
The Brisbane proceeding concerned fraud against the first respondent by Mr McEwan in his capacity as the first respondent’s Cairns branch manager. It was a fraud for which Mr McEwan was also prosecuted and imprisoned. In the Brisbane proceeding it was alleged Mr McEwan had misappropriated money and used it to acquire, among other things, 10 American vintage motor vehicles, including the 1966 Ford Mustang convertible with which the present application is concerned (“the Mustang”).
That allegation was admitted in Mr McEwan’s defence filed 7 February 2014. Yet in an affidavit affirmed 23 August 2013 he deposed:
“My de facto partner Paulette Ryan is the owner of a 1966 Ford Mustang convertible, registration PNY-11, valued at between $25,000 and $30,000, (‘the Mustang’). Paulette, with her own money, purchased the Mustang and I did not contribute to the payment of the purchase price in any way. I have in the past and continue to pay the registration and insurance costs of the Mustang as given the number of rare vehicles I own, I receive a discounted rate on insurance from Shannon’s Insurance.”[1]
[1] Affidavit of Jack George, court file number 7, Ex JG2, p 24.
In giving reasons for judgment, the trial judge relevantly observed:
“In relation to the 1966 Ford Mustang, however – and despite having subsequently, in his defence, pleaded that he did acquire the 1966 Ford Mustang – the defendant deposed in his August 2013 affidavit to the Mustang having been purchased by his de facto partner, Paulette Ryan, with her own money. He said in that affidavit that he did not contribute to the payment of the purchase money in any way. So there is, in relation to the Mustang, this contradiction between the defendant’s sworn affidavit and the pleadings subsequently filed on his behalf. The prospect that Ms Ryan, at least, claims to have an interest, or may claim to have an interest, in the vehicle is also confirmed by a recent diary note of a conversation between the plaintiff’s solicitor and the defendant’s solicitor; at which time the defendant’s solicitor confirmed that he had spoken to Paulette Ryan on the previous Friday and, amongst other things, she had told him that she wanted to keep the Ford Mustang convertible. Saying that it was hers and that he then informed her that certain consequences might flow from her adopting that attitude. ...
In order … to preserve the possibility that Ms Ryan may wish to assert a higher interest in the 1966 Ford Mustang convertible, I propose including a further order which will stay the operation of the declaration concerning the Ford Mustang for a period of 14 days to give Ms Ryan the opportunity to make whatever application to whichever Court of appropriate jurisdiction she may be advised is appropriate for the purposes of vindicating whatever rights or interests she may have.”[2][2] Affidavit of Jack George, court file number 7, JG9, pp 81-82.
It is unclear from the reasons for judgment whether there had been argument as to whether Ms Ryan ought to have been given notice of that proceeding pursuant to s 17 Civil Proceedings Act 2011 (Qld) in order to avoid the potential for inconsistency in outcome as between that proceeding and any separate proceeding Ms Ryan might have been advised was appropriate as a mechanism for vindicating her rights or interests in respect of the Mustang.
His Honour’s ensuing orders, in addition to his order that Mr McEwan pay about $2.2 million, included:
“…2. It is declared that the plaintiff has a charge over and is entitled to possession of the following funds and vehicles:
…
(c) 1966 Ford Mustang Convertible;
…
3. Order 2(c) above is stayed for a period of 14 days to enable any application by any person claiming an entitlement to the vehicle referred to in that order to be made to a Court of competent jurisdiction; there will be judgment, accordingly.”
The order did not state what should occur if such an application was made within 14 days, as the present application has been. For instance it was not ordered that, if such an application was brought within 14 days, the stay would extend until the application was concluded. Nor was there any order as to whether, if such an application succeeded, the parties ought return before his Honour with a view to further argument as to appropriate orders or amendment of his declaration. The potential problem of inconsistent outcomes as a consequence of the present dispute not being litigated as part of the Brisbane proceeding was not the focus of submissions before me.
Substantial dispute of fact
There is, in any event, an unavoidable threshold problem with the present application. That problem is a substantial dispute of fact between Ms Ryan and the first respondent as to whether Ms Ryan has a beneficial interest in the Mustang and, conversely, whether the first respondent has a right to or interest in the vehicle. It is a dispute which makes Ms Ryan’s application an inappropriate form of proceeding in pursuit of her rights. It is only necessary to enlarge upon the facts a little in order to illustrate the problem.
Ms Ryan is in possession of the Mustang, but the alleged circumstances under which she came to possess the vehicle are not entirely straightforward. Her affidavit explains she swapped her Chevrolet Bel Air motor vehicle for the Mustang in about December 2010, trading it with one Cindy Delaforce who she asserts was the former owner of the Mustang.
Ms Ryan asserts she came to own the Chevrolet, formerly co-owned by her and her former husband Shawn Ryan, as “part of the separation” from Mr Ryan. Her affidavit says the separation occurred at the end of 2009 but is silent as to when she became the sole owner.
One of the oddities of Ms Ryan’s claim to ownership of the Mustang is that she was bankrupt between 21 July 2010 and 22 July 2013, yet she was in that era allegedly able to acquire the Mustang by swapping her Chevrolet for it when bankrupt. Neither vehicle was mentioned as being owned by her in her statement of affairs dated 8 July 2010. How ownership of either vehicle did not vest in the trustee in bankruptcy pursuant to s 58(1) Bankruptcy Act 1966 (Cth) is not apparent.
Ms Ryan deposes she took possession of the Mustang in December 2010, by which time she was not just a bankrupt but was in a romantic relationship with Mr McEwan. In an affidavit by him in the aforementioned proceeding, he described Ms Ryan as his de facto partner. She, however, denies ever sharing houses or mixing finances with him.
If that be correct, it is at first blush curious that after she allegedly acquired the Mustang it was registered in Mr McEwan’s name. This, she deposes, occurred because he could get a registration discount because of his involvement in an entity she calls “Hot Radical Car Club Inc”. She deposes she transferred the car’s registration to her name in October 2013 because she had, by then, joined that so-called club. It transpires, however, that some months before she did this, Fryberg J had, on 25 July 2013, imposed a freezing order over Mr McEwan’s assets, which were listed for the purposes of the order as including the Mustang. Also, before the change in registration, the first respondent had registered its security interest in the Mustang on 2 August 2013.
None of this is to suggest that vehicle registration or security registration is necessarily determinative of ownership or right of possession in the present context, but the timing of the registration change against that background gives cause for caution in fact finding.
It is unnecessary to enlarge upon other potential oddities in the evidence concerning the Mustang’s insurance, Mr McEwan’s past vehicle dealings with Ms Delaforce and Mr McEwan’s past interest in a Chevrolet Bel Air. Indeed, I am reluctant to extend the above analysis lest it be thought that I am intimating I do not accept Ms Ryan’s assertion of her interest in the Mustang or disbelieve her limited oral evidence given in the course of some brief cross-examination which occurred before me. I do not intend to express any view about the reliability of Ms Ryan or her assertion of her interest in the Mustang. It is sufficient for me to observe that there exists a body of circumstantial evidence which is consistent with the first respondent’s case that Mr McEwan acquired ownership in the Mustang and is inconsistent with Ms Ryan’s direct evidence that she acquired and is the owner of the vehicle.
There is, on any view, a substantial dispute of fact as to the central issue in the application. The fact that Ms Ryan relies on her purportedly[3] direct evidence and the first respondent relies on circumstantial evidence does not make it any less a substantial dispute of fact. The existence of such a dispute makes an application an inappropriate method of starting a proceeding – see r 11 Uniform Civil Procedure Rules 1999 (Qld).
[3] I say “purportedly” because the evidentiary foundation for some assertions in her affidavit was criticised through objections made. The conclusion reached herein makes it unnecessary to rule upon those and other objections made in respect of the admissibility of parts of affidavits filed.
Possession is not determinative
The applicant’s counsel sought to avoid the consequences of such a characterisation, which is akin to a conclusion, as he put it, that there is a serious issue to be tried. He contended if there was a substantial dispute of fact it was irrelevant because the fact of Ms Ryan’s possession was itself determinative, at least in support of a declaration that the first respondents are without any right or title to or interest in the Mustang.
The principle invoked in aid of that argument is of sound pedigree, but is not apt to the present case. That principle, articulated by Collins MR in The Winkfield [4] as arising from a long series of authorities in actions in conversion or trover and trespass, is:
“…that possession is good against a wrongdoer and that the latter cannot set up the jus tertii unless he claims under it”[5]
His Honour went on to observe, citing Lord Campbell in Jeffries v Great Western Railway Company[6], that as between possessor and wrongdoer the presumption of law is that the person who has possession has the property.
[4] [1902] P 42, 54.
[5] Ibid.
[6] (1856) 2 EL & BL 680.
In The Winkfield the reference to a wrongdoer, also referred to a stranger, was to the party responsible for a collision between ships and consequent loss of letters, parcels and the like claimed for by the Postmaster General. While the Postmaster General, as bailee in possession of such property, would have had a good answer to the bailors for damages for loss of the things bailed, he was nonetheless held to have standing as bailee in possession to recover the value of the goods as against the wrongdoer, who was a stranger to the arrangement as between the bailee and bailors. That is, his possession gave him good title as against a stranger.
In a similar vein, Lord Campbell said in Jeffries Case:
“I am of opinion that the law is that a person possessed of goods as his property has a good title as against every stranger, and the one who takes them from him, having no title in himself, is a wrongdoer, and cannot defend himself by shewing that there was title in some third person; for against a wrongdoer possession is a title.”[7]
[7] (1856) 5 EL & BL 680, 681. The above passage is wrongly quoted in The Winkfield as ending with the words “for against a wrongdoer possession is title”. That is an error (an error replicated in Banks v Ferrari & Ors [2000] NSWSC 874, which was also referred to in argument). The concluding words appearing in the actual report of Jeffries Case are: “for against a wrongdoer possession is a title” (emphasis added).
In Jeffries Case a defendant to an allegation of trover claimed “jus tertii” in defence, that is, that the goods converted were those of a third party, not the plaintiff’s. But the plaintiff was in possession of the goods as an assignee and the jury rejected a defence the assignment was fraudulent as against the defendants. It was held the defendants could not set up jus tertii as a defence to the allegation they wrongfully seized the goods.
Unlike the above discussed cases, the present application is not one brought as between the possessor of property and a wrongdoer who has damaged or converted the property to the wrongdoer’s use. The present applicant seeks in effect to cast the first respondent as the wrongdoer and stranger under the above principle in circumstances where another Court has already declared, subject to a stay, that the first respondent has a charge over and is entitled to possession of the property in question. The stay merely reflects that Court’s preparedness to afford the present applicant an opportunity to claim an entitlement to that property.
It will be recalled in The Winkfield there was no dispute about the legitimacy of the Postmaster General’s possession of the goods and in Jeffries Case the defence that the assignment placing the plaintiff in possession was fraudulent against the defendant was rejected by the jury. In each instance the possession was legitimate; there was an entitlement to possession. That aspect is disputed here. The applicant does not allege she came to be in possession as a bailee or assignee. She alleges she came to be in possession of the car because she is the actual owner of it. It is her asserted ownership of the vehicle which, if proved, would entitle her to declarations of the kind sought. Her mere possession would not support a continued stay of the declaration made in the Brisbane proceeding. The declaration was stayed because of the conflict in the materials before the trial judge as to whether the defendant in that action was the owner of the vehicle, having acquired it with misappropriated funds, or whether the present applicant was the actual owner of the vehicle.
For all of these reasons Ms Ryan cannot in these circumstances prevail merely by pointing to the fact of her possession of the vehicle.
Conclusion
As already explained, there is a substantial dispute of fact as to whether Ms Ryan is the owner of the vehicle, making it inappropriate for this proceeding to have been started by application. It may be relevant to costs as to whether that ought to have been apparent before the application was filed, so I refrain from expressing a concluded view about that presently. However, it is at least clear in hindsight that the proceeding seeking declarations should not have been started by application.
It follows I should not give either of the declarations sought by the application. It is less clear whether some other order ought be deemed appropriate in the novel circumstances of the case. I will allow the parties an opportunity to be heard about that.
Orders
My orders are:
1.That part of the application which sought declarations is dismissed.
2.I will hear the parties further as to that part of the application seeking such other orders as this Court deems appropriate and will also hear the parties as to costs.
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