Snowy River Shire Council v Adaminaby Craft Group Inc

[2014] NSWLC 7

Local Court

New South Wales

Medium Neutral Citation:	Snowy River Shire Council v Adaminaby Craft Group Inc [2014] NSWLC 7
Hearing dates:	19-20/03/14; 9-10/04/2014
Decision date:	19 June 2014
Jurisdiction:	Civil
Before:	Magistrate Bone
Decision:	Verdict for the plaintiff
Catchwords:	TORTS - detinue - claim for return of a curtain - creative work depicting features and history of town - curtain sewn by volunteer members of the community - dispute as to ownership - dispute as to creator of design
Legislation Cited:	Local Government Act 1993
Cases Cited:	Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (2000) 202 CLR 588 Leigh v Taylor [1902] AC 157 McKeown v Cavalier Yachts Pty Ltd and Anor (1988) 13 NSWLR 303
Texts Cited:	Fleming on Torts Halsbury's Laws of Australia
Category:	Principal judgment
Parties:	Snowy River Shire Council (plaintiff) Adaminaby Craft Group Inc (defendant)
Representation:	A Bradbury for the plaintiff J Robb for the defendant
File Number(s):	2012/180465

Judgment

Reasons for Decision

1. The plaintiff Council has taken proceedings in the General Division of the Local Court for the return of a curtain. The Council asserts that it is owner of the curtain and that the defendant has the curtain in its possession and the Council wants it back. The defendant does not assert that it owns the curtain but accepts that it has it in its possession. It denies that the Council is the owner of the curtain and asserts that it, the defendant, is under no obligation to return the curtain

Some background

1. Adaminaby is a small, picturesque town in the foothills of the Snowy Mountains of southern New South Wales. It was settled on the banks of the Eucumbene River in the nineteenth century. The Snowy Mountains scheme, one of the engineering wonders of the world, was launched in Adaminaby in 1949.

1. The town that had existed on the banks of the river for over a century was doomed because the creation of Lake Eucumbene, an essential element of the scheme, meant that it was to disappear under the waters of the lake. Most of the buildings were therefore relocated to the present site of the town, the relocation taking place in 1957.

1. Among the buildings which were moved from the old town to the new was the Adaminaby Memorial School of Arts Hall. It had been erected in the first decade of the twentieth century. Over time the hall fell into a state of disrepair. A public meeting was held on 14 January 1998, with a view to forming a committee to "establish whether the hall was worth keeping". A Commonwealth Government grant received by the plaintiff in the late 1990s meant that work could be undertaken to restore the hall and a project was commenced for that purpose. In 2001 or 2002 it was decided that a new stage curtain would be made for the hall. Fabric was obtained. There is a significant divergence of evidence as to the provenance of that fabric. The plaintiff maintains that it obtained the fabric and the defendant maintains that the fabric was donated by Mrs Katherine (Ann) Kennedy, a prominent member of the defendant. What is not in doubt is the display which is upon the curtain. The curtain is, in my opinion, a work of art. It consists of two pieces, its total length is nearly seven metres and its height (or "drop") is nearly three metres. The curtain displays the essence of Adaminaby, its history and its seasons. It shows, among other things, lakes, mountains, Aborigines, a settler's hut, gold-mining, newer buildings, the War Memorial, flora and fauna (including a rather spectacular rainbow trout), and sporting activities as diverse as horse-racing and snow skiing. The features were placed onto the fabric by a variety of means which, in simple terms, may be reduced to sewing and appliqué. Appliqué is a method whereby a feature is created away from the curtain and then applied to the curtain. The sewing and appliqué were done by the residents of Adaminaby and nearby areas. The curtain was officially opened by Her Excellency the Governor of New South Wales on 7 May 2004.

1. For a number of years after the official opening the curtain remained in place on the stage of the hall. It was often viewed by tourists. It was a common practice for the operator of a tourist enterprise to let those in charge of the hall know that a busload of tourists was coming to Adaminaby. The hall would then be open when the tourists arrived and each tourist was encouraged to donate a gold coin upon viewing the curtain. Members of the Adaminaby Craft group, then an unincorporated body, would generally attend the hall on such occasions and take the opportunity to sell their arts and crafts to tourists.

1. In 2010 the curtain was removed from the hall. There was a rift between the committee which controlled the hall and persons who were members of the unincorporated entity which preceded the creation of the defendant. From then until now the curtain has been in the possession of the defendant (or its unincorporated predecessor). Since it was taken, the curtain has been displayed in an Adaminaby church hall on occasions when tourist buses have come to Adaminaby. Rather than seek a gold coin donation, however, the tourist operator is required to pay a small fee to the defendant, the amount being dependent upon the number of persons who view the curtain.

The nature of the defendant

1. The defendant is an incorporated body. It was incorporated on 17 June 2010. It was, prior to its incorporation, an unincorporated body. The unincorporated body came into existence as the result of a motion passed at a public meeting on 28 October 2004.

1. The defendant's history is similar to that of many organisations formed for recreational purposes. I will give a hypothetical example of the kind of path that many such organisations have taken. A few people in the town of Thomas-Jacobsville in the 1950s might have enjoyed bush-walking. They would initially have been regarded as friends engaged in an activity in which they had a mutual interest. As their group became larger and strangers sought to join them they might have decided to formalise their activity. They would have done that by calling a public meeting, creating the Thomas-Jacobsville Bushwalking Club and electing a committee. That might have happened in the 1960s. Around the 1980s bodies of that nature were encouraged by the NSW government to incorporate. Had our hypothetical body decided to incorporate it would have become the Thomas-Jacobsville Bushwalking Club Incorporated. There were advantages in incorporation. Prior to incorporation, the debts and legal liability of the unincorporated body were the debts and legal liability of the members of the committee. Following incorporation, those individuals were no longer personally liable; the incorporated body was a legal entity and could both sue and be sued. It was a requirement of incorporation that the organisation take out an insurance policy. Following incorporation people could confidently accept positions on the committee without any concern that they were personally liable for any deficiency on the part of the body.

"The community"

1. There have been numerous references in these proceedings to "the community". Various witnesses have expressed the opinion that the curtain belongs to "the community". Those opinions do not, of course, influence me in my search to ascertain if the plaintiff owns the curtain but they raise interesting issues. Things can be owned only by people or by incorporated bodies. They cannot be owned by "the community" although they may be owned by bodies which represent the community (e.g. Commonwealth of Australia, the State of New South Wales, the Snowy River Shire Council, the National Trust).

A s 355 committee

1. There have been numerous references in the proceedings to a "s 355 committee". The terminology is a reference to a committee formed pursuant to s 355 of the Local Government Act 1993. That section states:

A function of a council may, subject to this Chapter, be exercised: ...

(b) by a committee of the council...

1. An action undertaken by a s 355 committee is, therefore, an action taken by the Council or Shire which was responsible for the creation of the committee.

Matters of dispute

1. Counsel for the plaintiff stated early in his written submission and when speaking of the issue of ownership of the curtain that "the defendant has made this a contest between Council and Mrs Kennedy". I would not necessarily agree with that observation but there is no doubt that Mrs Kennedy was an extremely important witness in the case.

1. The plaintiff maintains that it bought the plain fabric or material which has become the curtain upon which the artistic work which was done and which became the curtain that is an exhibit before the court. It also maintains that the artistic work done upon the curtain followed a design created by James Melverley. The defendant maintains that the fabric was purchased by Mrs Kennedy and that the design was based upon an idea which came from the mind of Mrs Kennedy. The evidence presented by the plaintiff upon these issues is far more impressive than that presented by the defendant. I have reached that conclusion principally for the following reasons.

1. The plaintiff elicited evidence from Nick Giuliani, the principal of Cooma Furnishing, that he was asked to obtain and supply material for a curtain, that he obtained the material, took it to the hall at Adaminaby and installed tracks upon which the curtain was to hang. Mr Guiliani has produced quotations and invoices to corroborate his evidence. The plaintiff has produced affidavit and documentary evidence which indicates that it paid for the material and services provided by Mr Giuliani. Mr Guiliani was paid $3,207. Mrs Kennedy has given evidence that she purchased the fabric from Spotlight and has produced a receipt from Spotlight for such purchase. The cost of the fabric was $178. The receipt does not provide any detail of significance as to what was purchased. A number of witnesses support Mr Giuliani's evidence that he was approached by people seeking advice and quotes for the project and that he took the material to the hall and built runners.

1. The matters in the preceding paragraph strongly support the conclusion that the material supplied by Mr Giuliani and paid for by the plaintiff was the material used to create the curtain. The evidence also raises another issue. There is no doubt that Mr Giuliani provided material which he took to the hall. If, as asserted by Mrs Kennedy, the curtain was made from material supplied by her, what happened to the material supplied by Mr Giuliani? There is no doubt that he took over nineteen square metres of material to the hall. It is inconceivable that such a quantity of material could somehow disappear. The defendant relies not only upon the evidence of Mrs Kennedy but upon the evidence of Ms Selby-Brown, an expert who examined and measured the curtain. Her primary reason for concluding that the curtain which was tendered in evidence was not the material supplied by Mr Giuliani was that the exhibit was slightly longer than as described in Mr Giuliani's quotation. In my opinion, the evidence of Mr Giuliani and those who corroborate him is much more persuasive than the evidence of Mrs Kennedy and Ms Selby-Brown.

1. The plaintiff maintains that it engaged an artist, James Melverley, to produce a design for the curtain. There is clear evidence that Mr Melverley produced a design in the form of a painting and that the plaintiff paid him $1,950 for the design, the painting and the copyright. A photograph of the painting was introduced into evidence. The design on the curtain closely resembles the design on the painting. Mrs Kennedy claims that the design on the curtain is hers. She described herself in a visitor's book as "Designer of Stage Curtain". She was asked in cross-examination "it was your conceptualisation, your mind, correct?" and she replied "yes". She also said in evidence "I did not use Mr Melverley's design" and "the painting had nothing to do with the artistic work on the curtain". It is incomprehensible that two people could, completely independently of each other, come up with two designs that are, if not identical, so closely matched as to be virtually indistinguishable except upon close scrutiny.

1. Mrs Kennedy's evidence upon these matters was unacceptable. She was not a reliable witness.

The facts

1. The facts which I accept as having been proven are as follows:

1. In 2001 or 2002, some residents of Adaminaby discussed the poor condition of the stage curtains in the Adaminaby Memorial School of Arts Hall. Those persons included Phillipa Dodds and Mrs Kennedy.

1. A public meeting was held in the hall and there was general support for a project that would result in the hanging of a new curtain of which the Adaminaby community could be proud.

1. In early 2002, Nick Giuliani, the principal of Cooma Furnishing prepared a quotation for the supply and installation of a new stage curtain for the Adaminaby Memorial School of Arts Hall.

1. Around the same time, the plaintiff approved the making of a new stage curtain.

1. In May 2002, Mr Giuliani took an order for the supply and installation of the curtain.

1. In May or June 2002, Mr Giuliani attended the Hall and installed tracks for the curtain. He also hung a back piece for the curtain, that piece being fire resistant. He did not hang the curtain itself but left it in the Hall. It was, at that stage, a large plain piece of fabric about 6.7 metres wide and 2.9 metres high.

1. The plaintiff paid Mr Giuliani $3,207 for his services.

1. At about the same time James Melverley, an artist, painted a design for the curtain. The plaintiff paid Mr Melverley $1,950. His account was for "Curtain Project Adaminaby School of Arts. Concept and design, preliminary drawings $500. Framed painting of image $650. Complete copyright to image $800". Payment was made on 14 May 2002.

1. Over the next eighteen months or so a number of people worked on the curtain. The Hall would generally be opened twice a week so that people could come in and make their contribution. Much of the work was done by people who became members of the defendant when it came into being. Some of the work was done by others. School children and members of the Country Women's Association attended on occasion. To use the words of Valmae Sanders "community members could come and contribute as they pleased". None of the people who contributed to the artistic work which was done on the curtain was paid.

1. The curtain was completed in early 2004. The finished product closely matched the design created by Mr Melverley. There are a few difference but these are of a minor nature. The curtain was unveiled by Her Excellency the Governor on 7 May 2004. A plaque to commemorate the event bore the words "This plaque commemorates the opening of the ADAMINABY MEMORIAL HALL STAGE CURTAIN by Her Excellency Professor Marie Bashir AC Governor of New South Wales". The plaque bore the names of the Mayor and General Manager of the plaintiff.

1. The Adaminaby Craft Group came into being as an unincorporated body following a public meeting held at the Hall on 28 October 2004. Mrs Kennedy was a member of the committee of that organisation from the time of its inception until some date in 2010.

1. A s 355 committee created to manage the hall came into being on 30 November 2006. It conducted a bank account (prior to the creation of the committee, monies collected or raised for the hall went directly into the plaintiff's bank account). Mrs Kennedy was a member of that committee from the time of its inception until some date in 2010. The committee appointed her to the position of hall manager. This was not a new position for Mrs Kennedy as the plaintiff had appointed her to that position in June 2001. Mrs Kennedy had a key to the hall and was responsible for the opening of the hall from 2001 until 2010. Among her other duties was reporting to the committee in relation to any repairs or maintenance that were required.

1. The curtain hung in the Hall until 2010. Money was collected by way of gold coin donation from tourists who came to Adaminaby on bus tours. On such occasions the Hall would be opened for the tourists, the money would be collected by the custodian of the Hall and then deposited into the s 355 committee's bank account.

1. Insurance for the curtain was discussed at s 355 committee meetings held on 17 February and 14 April 2009. The minutes of the first meeting state that "The Council Property Manager, Ms Lorraine Thomas, advises that the Council insurer would not insure the curtain unless it was Council property" and that "Ann Kennedy undertook to discuss this with the Craft Group". The minutes of the second meeting state "Curtain Insurance. Ann Kennedy reported that a community meeting had been held to gauge community concern about insurance issues relating to the stage curtains. Based on the outcomes of that meeting the Craft Group has decided that the curtain insurance is in the hands of the Craft Group. Members have made investigations and concluded that appropriate insurance cover would cost about $2,000 annually, they have decided not to insure it, this amount will be set aside annually and in about five years members believe that they should have saved enough to repair or replace the stage curtain in the event of damage or destruction".

1. Relations between the defendant and the plaintiff deteriorated in 2009 and 2010. A number of issues contributed to this deterioration but the major one appears to relate to money. An email of 15 April 2010, under the hand of "The Adaminaby Craft Group" concluded with the sentence "The Adaminaby Craft Group over several years have financed the memorial hall but are no longer going to do so".

1. The curtain was removed from the hall between 11 and 17 May 2010. There is no direct evidence as to the identity of the person or persons who removed the curtain but it became clear very shortly after its removal that it was in the possession of the defendant.

1. On 2 June 2010, the defendant advised the plaintiff that it was terminating its use of the hall. It indicated, in relation to the curtain, that "it will undergo refurbishment and then it will be up to the Adaminaby Craft Group to relocate it in a safe and easily accessible venue".

1. The defendant was incorporated (that is, became a legal entity) on 17 June 2010.

1. By letter of 30 April 2012, the plaintiff's solicitor wrote to the defendant. In that letter the plaintiff asserted that it owned the curtain and demanded its return.

A preliminary conclusion

1. I am satisfied that it was the understanding of all who contributed to the curtain, whether financially, through the creation of the design, by undertaking artistic work or in any other way, that it was to hang in the Adaminaby Memorial School of Arts Hall. The evidence points unerringly to that conclusion. The curtain was opened at the hall by Her Excellency the Governor in the presence of a significant number of persons. Speeches were made by a number of persons including Mrs Kennedy. The plaque which commemorates the event refers to "the opening of the ADAMINABY MEMORIAL HALL STAGE CURTAIN". There was nothing said or done to indicate that the curtain's permanent home was anywhere other than the Hall.

Submissions

1. Counsel made oral submissions at the conclusion of the evidence and subsequently presented written submissions. I do not intend to outline those submissions in any detail whatsoever except to say that it is the plaintiff's principal contention that it is the owner of the curtain and is therefore entitled to its return.

Legal issues

1. Possession is nine tenths of the law: this very common expression has been about for centuries. It is a saying which contains strands of common sense and strands of common law. It is not a legal principle as such. It means that if something is in the possession of a person, it is difficult for another to successfully make a claim for it. In very broad terms, the legal meaning of the expression is that only a person who can prove that he or she is the legal owner of a thing has a better right to it than the possessor- in other words, it's yours until someone legally proves that it isn't. It is not up to the possessor to prove that he or she is the legal owner- it is up to the person who is not in possession to prove that he or she is the legal owner. If, for example, a person lays claim to a pair of shoes which I am wearing it is up to that person to prove that he or she owns the shoes; it is not up to me to prove that I own them. To the extent that the phrase might be applied in law, there are the difficulties of establishing who is the possessor. If an item is the subject of a bailment, it might be argued that the item, although in the physical possession of the bailee, is in the legal possession of the bailor. Similarly, if an item has been stolen, it might be argued that the item, although in the physical possession of the thief, is in the legal possession of the person from whom the item was stolen.

1. Reference has been made by both parties to a number of principles and authorities. I will now refer to what I consider to be some relevant principles and authorities of relevance to the case.

1. Leigh v Taylor [1902] AC 157 is an English case which involved the ownership of tapestries. A tenant for life had hung tapestries in the drawing room of a mansion. They were attached to the wall by the use of tacks, cloth, wood and nails. When the tenant died, the owner asserted that the tapestries had become attached to the freehold and the tenant's estate asserted that they were the property of the estate. The judges of the House of Lords determined that the tapestries should be returned to the estate. The issue, they said, was whether the tapestries had "become part of the house" or were merely "ornamental". Something of an ornamental nature might become the property of the owner of the mansion but only if affixed in a permanent way, e.g., by being painted onto a wall or by being a fresco in the floor.

1. McKeown v Cavalier Yachts Pty Ltd and Anor (1988) 13 NSWLR 303 is a case in which Young J was considering proceedings for detention of a yacht. The court referred to the doctrine of accession, something which has been raised by the plaintiff in the current case, and also outlined the approach which a court should take in a case of detention. The facts of the case, in very simple form, were that the plaintiff owned the hull of a yacht and the defendant did a lot of work on it in order to bring it to sailing condition. The worth of the unimproved hull was estimated at $1,777 and the worth of the improvement was estimated at $24,499. Despite the significant difference in the value of the hull and the improvements, and accepting that the improvements could not conveniently be detached, the ownership of the finished product rested with the owner of the "primary chattel", namely the hull. His Honour then referred to a number of authorities and quoted extracts from Fleming on Torts and other practices as to the approach which the court should take once it had determined ownership. He held that a court should not ordinarily order the return of goods unless the goods have a special value or are unique and damages could not properly compensate the owner.

1. The defendant has referred to a passage from Halsbury's Laws of Australia in which it is stated that "inventing or creating a new thing prima facie leads to ownership of it. Even where a new thing is created out of materials owned ... by another, the creator owns the new thing, subject to possible damages in conversion, to the extent that the materials have lost their original identity".

1. An example of this principle is to be found in Associated Alloys Pty Ltd v ACN 001 452 106 Pty Ltd (2000) 202 CLR 588. The facts of the case, in short, were that the plaintiff had sold steel to the defendant upon terms under which the plaintiff delivered the steel but retained ownership of it until payment was made. The defendant used the steel to manufacture goods for a third party but did not pay the plaintiff. The High Court held that, despite the terms of the contract, the plaintiff did not own the manufactured goods, although it was entitled to damages for the loss of the steel.

1. It is not difficult to see the logic in the principle. Take, for example, a hypothetical circumstance in which a person who owns a blank canvas and frame lends it to a person who happens to be an excellent artist. The artist paints upon the canvas thereby creating a magnificent work of art. The owner seeks to have the frame and canvas returned and the painter declines. Common sense would dictate that, although the "primary chattel" is the property of the owner of the frame and canvas, it should not be returned. The position would be different if, for example, the artist had painted upon another surface which he or she had then attached to the original canvas in a way which allowed that surface to be easily detached from the frame and original canvas. In circumstances in which no easy detachment is possible, a court would ordinarily decline to make an order returning the object to the owner although it would make an order for compensation.

1. An aside: as I indicated at paragraph 40, possession is nine tenths of the law; a person who is in possession of something does not have to prove his entitlement to it, a claimant has to prove a better entitlement. There is no doubt that the defendant has had the physical possession of the curtain since May 2010. Was that possession a lawful possession? If the defendant was the owner of the curtain then it most certainly was a lawful possession. It could be argued, however, that if the defendant was not the owner of the curtain it could hardly be in a position of strength in relation to the litigation by taking the curtain without any reference to the plaintiff. The evidence which I have heard indicates that, without reference to the plaintiff, a member or members of the defendant took the curtain from the Hall. There is evidence to indicate that the first response of the defendant, when challenged by the plaintiff, was to indicate that it had taken the item temporarily for the purpose of repairs, something which was patently untrue.

Conclusion

1. It is indisputably the fact that the creative work which was done upon the curtain was done on a voluntary basis by a number of people, perhaps around eighty in number, over a period of around eighteen months concluding in early 2004. The Adaminaby Craft Group (the forerunner of the Adaminaby Craft Group Inc) did not exist until late 2004. Some of the workers became members of the Adaminaby Craft Group, others did not.

1. Despite Mrs Kennedy's evidence to the contrary, the thought processes which went into the creative work were not the thought processes of those persons who placed the features upon the fabric. The thought processes were those of Mr Melverley. It was his design, the product of his imagination, which was followed (in my opinion, meticulously) by the skilled exponents of the techniques of sewing and appliqué. Had Mr Melverley not been paid, it could well have been argued that he was the owner of the curtain. Such an argument would be consistent with the principle espoused in McKeown v Cavalier Yachts Pty Ltd andAnor. However, he was paid and he was paid by the plaintiff. The plaintiff had therefore paid for the fabric and for the design. I am satisfied in such circumstances that the plaintiff was the owner of the fabric and the completed product. I note, in passing, that there was debate during the s 355 committee meetings of 2009 as to ownership of the curtain. Those minutes do not indicate whether the meetings reached a conclusion as to ownership but, even if a decision had been reached that the Adaminaby Craft Group owned the curtain, such a decision could not affect the true legal position.

1. It has been argued by the defendant that even if I conclude that the plaintiff owns the curtain, the proper remedy is not an order returning it to the plaintiff but compensation. It is clear that that would be the correct approach in most circumstances. I said earlier that the trial judge in McKeown v Cavalier Yachts Pty Ltd and Anor had referred to a number of authorities and quoted extracts from Fleming on Torts and other practices as to the approach which the court should take once it had determined ownership. He held that a court should not ordinarily order the return of goods unless the goods have a special value or are unique and damages could not properly compensate the owner. There is no doubt in my mind that the curtain both has a special value and is unique. There is only one Adaminaby and there is only one curtain which depicts its history and its seasons. The curtain is unique and, for the people of Adaminaby, it is priceless.

1. There will be an order that the curtain be returned to the plaintiff.

Magistrate C Bone

Cooma Local Court

19 June 2014

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Decision last updated: 06 August 2014