Shah H Haddad trading as Liverpool City Cars and 4WDs v Lansvale Intersection Pty Limited

[2006] NSWSC 44

CITATION:	Shah H Haddad trading as Liverpool City Cars & 4WDs v Lansvale Intersection Pty Limited [2006] NSWSC 44
HEARING DATE(S):	9 February 2006
JUDGMENT DATE :	17 February 2006
JURISDICTION:	Common Law Division
JUDGMENT OF:	Associate Justice Malpass at 1
DECISION:	The summons is dismissed; the court has been asked to reserve the question of costs of the appeal and I so order.
CATCHWORDS:	Breach of warranty of quiet possession - plaintiff had possession or immediate right to possession at the time of seizure by police - subsections (1) and (2) create independent rights.
LEGISLATION CITED:	Sale of Goods Act 1923, s17(1), (2)
CASES CITED:	Microbeads AG & Anor v Vinhurst Road Markings Ltd [1975] 1 WLR 218
PARTIES:	Shah H Haddad trading as Liverpool City Cars & 4WDs (Plaintiff) Lansvale Intersection Pty Limited (Defendant)
FILE NUMBER(S):	SC 11798/05
COUNSEL:	Mr E Baskerville (Plaintiff) Mr A Canceri (Defendant)
SOLICITORS:	Hassetts (Plaintiff) Henshaws (Defendant)
LOWER COURT JURISDICTION:	Local Court
LOWER COURT FILE NUMBER(S):	1895/2002
LOWER COURT JUDICIAL OFFICER :	Clarke LCM

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IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

Associate Justice Malpass

17 February 2006

11798 of 2005 Shah H Haddad trading as Liverpool City Cars & 4WDs v Lansvale Intersection Pty Limited

JUDGMENT

1 His Honour: These proceedings concern a motor vehicle (a Series 80 Toyota Landcruiser). It came to be owned by Ms McCabe. She went through a sale procedure with Ms Gard (alias Ms Gordon) for the sum of $32,950. The transaction was completed at about 9.20pm on Friday 29 November 2002. Notice that the bank cheque given to Ms McCabe had been dishonoured was given on Wednesday 4 December 2002. The matter was reported to Balmain Police on that date. It has been found that the vehicle was obtained from Ms McCabe by fraud and not by way of larceny by trick or mistake.

2 On Saturday 30 November 2002, Ms Gard purported to sell the motor vehicle to the plaintiff for the sum of $17,000.

3 After taking delivery of the motor vehicle, the plaintiff purported to sell it to the defendant (a company of which Mr De Souza was a director) for the sum of $21,500.

4 On Monday 2 December 2002, the defendant took possession of the motor vehicle. On 5 December 2002, it purported to sell it to Main North Motors for the sum of $28,800. The vehicle was taken to a holding place at Newcastle.

5 The tax invoice for this transaction had the following endorsement:-

Title to the goods, described above, does not pass until payment is received in full and all cheques have cleared.

6 On 8 December 2002, the police took possession of the motor vehicle. On 9 December 2002, the defendant stopped payment on the cheque given by it in respect of the purchase of the motor vehicle.

7 Thereafter, proceedings were taken by the police pursuant to terms of s134 of the Criminal Procedure Act 1986. The dispute as to title that took place concerned only Ms McCabe and the defendant. Ms McCabe was the successful party in that dispute.

8 Proceedings were brought in the Local Court by the defendant against the plaintiff, Ms McCabe and Ms Gard. One of the claims made by the defendant against the plaintiff was a breach of implied warranty pursuant to s17(2) of the Sale of Goods Act 1923 (the Act). This provision implies a warranty that the buyer shall have and enjoy quiet possession of the goods. A hearing took place before Clarke LCM. His Honour prepared a judgment dated 13 February 2005. It was delivered by a registrar on 17 February 2005.

9 The Magistrate found a breach of the warranty and ordered, inter alia, that the plaintiff pay to the defendant damages in the sum of $28,800. It is necessary to refer only to certain of the other matters that were the subject of findings. The Magistrate found that the plaintiff had acted in good faith and without knowledge of the defect in title (apparently, he relied on the provisions of s27 of the Act). Accordingly, he held that the plaintiff had obtained good title to the motor vehicle on 30 November 2002. The Magistrate took the view that the police proceedings had resolved the question of title between Ms McCabe and the defendant (by implication, he seems to have found that legal interest in the motor vehicle was had by Ms McCabe and not by the defendant).

10 The judgment of his Honour records that the plaintiff admitted that he had a right to sell the motor vehicle, but denied that he owed a right to the defendant to enjoy quiet possession thereof. In dealing with this submission, the Magistrate found himself guided by what was said in Microbeads AG & Anor v Vinhurst Road Markings Ltd [1975] 1 WLR 218. This led him to the conclusion that there had been a breach of the warranty.

11 On 5 May 2005, the plaintiff brought an appeal against that decision. The appeal was brought more than two months out of time. Accordingly, it is only maintainable if an extension of time is granted by the court.

12 The court has been informed that the appeal came to be struck out (by reason of non-attendance of the plaintiff). It came to be restored by Hoeben J and his Honour granted leave to appeal to the plaintiff.

13 Such an order is of no assistance to the plaintiff in this case. It is alleged that the error made by the Magistrate is one in point of law and it is not said that it involves a mixed question of law and fact.

14 The appeal came on for hearing on 9 February 2006. Both parties were represented by counsel. Both counsel made oral submissions.

15 The defendant opposes the granting of an extension of time. It is not said that the delay has occasioned prejudice and the application is opposed on other grounds.

16 The summons contains the following:-

GROUNDS FOR EXTENSION OF TIME
The plaintiff was emotionally upset by the decision of Magistrate Clarke and had the extra stress of having his wife overseas at the time and the care of his young child plus running his small car dealership business in Liverpool. He is only now able to focus his mind on the issues in the case and very clearly wishes to appeal the decision of Magistrate Clarke.

17 This is the only material offered on behalf of the plaintiff to explain the delay. There is no supporting affidavit evidence. Of itself, it might be thought to be unpersuasive (particularly as the plaintiff had been legally represented during the Local Court proceedings).

18 Before dealing with this matter further, it is convenient to look at the merits of the appeal. The court does not exercise its discretionary power to grant an extension in cases where it would be futile to do so.

19 The summons also contains the following:-

THE NATURE OF THE CASE
See judgment of Magistrate Clarke dated 13 January attached as Annexure 1 , paragraphs 7 to 32 inclusive. The magistrate found that the plaintiff had breached an implied warranty under section 17(2) of the Sale of Goods Act 1923 in that the defendant did not have quite [sic] possession of the vehicle – see paragraph 71 of Annexure 1 .
THE QUESTIONS INVOLVED
The Defendant had sold the vehicle and parted with possession before the police seized the vehicle. Therefore who was the person who had his quite [sic] possession interfered with? The plaintiff contends that it was the person who bought the vehicle from the defendant.
REASON WHY LEAVE SHOULD BE GIVEN
If the plaintiff’s contention is correct then he would not be liable to the defendant. If the matter is not corrected the plaintiff would be liable to the defendant for a substantial sum of money which would be a grave injustice.

20 The matters argued fell within a narrow compass. One aspect of it was referred to as the “possession question”. This was the question identified in the summons. The other aspect was that the Microbeads decision was said to be distinguishable. Whilst it was argued, it may be said that it was not identified as a ground of appeal.

21 There was no express finding on the issue of whether or not possession had passed to Main North Motors. However, it is implicit in the findings that were made that possession remained with the defendant at the time of the police seizure. It was this seizure and the subsequent police proceedings that brought about a legal disturbance of quiet possession of the motor vehicle.

22 There was evidence before the Magistrate supporting a finding that either possession or an immediate right to possession remained with the plaintiff at the time of the police action. The plaintiff has placed emphasis on the finding that he obtained good title to the motor vehicle. This finding did not bring about a situation where the Magistrate could not make the further finding of breach of the warranty of quiet possession (see Microbeads). Subsections (1) and (2) of s17 of the Act create independent rights and remedies. There can be a breach of subsection (2) without a breach of subsection (1) thereof.

23 It follows that I do not accept the submission that Microbeads was distinguishable. In my view, the submission was misconceived and did not assist the plaintiff.

24 Accordingly, the arguments advanced on behalf of the plaintiff in this appeal fail. No error in point of law has been demonstrated.

25 In these circumstances, it would be futile to grant an extension of time. Therefore, both the application for extension of time and the appeal fail.

26 The summons is dismissed. The court has been asked to reserve the question of costs of the appeal and I so order.

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