Takataka v Hurrell [2006] TOLawRp 24; [2006] Tonga LR 260 (16 August 2006)

IN THE COURT OF APPEAL OF TONGA

Takataka anor

v

Hurrell anors

Court of Appeal, Nuku'alofa
Burchett, Salmon, and Moore JJ
AC 6/2005

8 August 2006; 16 August 2006

Car ownership – loan – respondent acted in good faith – appeal dismissed

The facts are set out in full at Takataka anor v Hurrell anors [2005] Tonga LR 359 (CA). The Supreme Court dismissed the claim and found that there was no valid cause of action against Hurrell and that none of the actions of the third or fourth respondents were unlawful. The Court held that the third respondent had acted at all times in good faith. It also held that there was no adequate proof of the value of the vehicle at any time after the agreement with Prema and that the appellants had not properly proved any of the damages claimed. The Court was concerned with the position of Taufalele and set aside the judgment against him. It ordered that Takataka was entitled to possession of the car. The appellants appealed.

Held:

1. The Court accepted that the third respondent acted in good faith. He was faced with competing claims to the vehicle. He did what he thought on reasonable grounds, was correct in the circumstances and could not be criticised for that. There was apparently some confusion caused by an incomplete record of changes to ownership but again there could be no duty to the appellant arising from this fact. In any case the appellants did not establish that any loss arose over the two week period when Taufalele regained possession of the car.

2. The evidence of loss produced by the appellant was inadequate. The only evidence of the value of the car at the time of the transaction between Hurrell and Taufalele was what was paid - $400. There was no evidence of its value at the time it was seized for the second time by the Police other than the appellants' estimate that it was then worth no more than $1,000.

3. In respect of the other heads of damage claimed, the court was not persuaded that the Judge was wrong in his conclusion that they were not proven. The loan to Prema could only be recovered from Prema.

4. There was one respect in which the Court concluded that the appellants were entitled to succeed. Counsel informed the Court that he was given no opportunity to present argument on the question of whether the judgment against Taufalele should be set aside. He should have had that opportunity and accordingly the Court restored that judgment. Therefore if the appellants wished to take the matter further they would have to comply with the directions in the order made by Ford J on 15th July 2004. The ultimate outcome may appear inevitable but that was a matter for the appellants and their counsel.

5. In all other respects the appeal was dismissed. The first, third and fourth respondents were entitled to costs to be taxed if not agreed.

Counsel for appellant: Mr Kengike
Counsel for first respondent: Mrs Vaihu
Counsel for third and fourth respondents: Mr Kefu
No appearance on behalf of second respondent

Judgment

[1] This is an appeal against a judgment of Thomas J dismissing a claim by the appellants for damages arising from the alleged actions of the respondents in relation to a Nissan motor vehicle owned by the second appellant (Lita).

[2] The vehicle was originally owned by one Ivan Prema who purchased it in 1999. In May 2000 Prema borrowed $2,000 from Lita to be repaid in 3 months. It was agreed that if the loan was not repaid the vehicle would become the property of Lita. To secure this arrangement the vehicle was transferred into Lita's name. The money was not repaid, however the appellants made no enquiries regarding the car until late in 2001.

[3] In the meantime Prema had rented a property from the first respondent (Hurrell). He vacated when he could not pay the rent leaving owing about $600. He left the vehicle, which was by this time in a damaged condition, in Hurrell's garage. It sat in the garage for about 6 months when Hurrell sold it to the second respondent (Taufalele) for $400.00. By this time Mr Prema had gone to Fiji. He had told Hurrell to sell parts of the car to recover the rent he owed. Instead, Hurrell sold the vehicle to Taufalele. There is no evidence of Mr Prema having ever returned to Tonga or taking any further interest in the vehicle.

[4] When he could not find the car the first appellant (Takataka) contacted the third respondent Superintendent Taulahi. Superintendent Taulahi was shown the change of ownership form and seized the car from Taufalele. A short time later Taufalele persuaded the Police to return the car to him. He had it for about two weeks during which time it seems he may have removed same parts he had added to the vehicle. Takataka persuaded the Police that he was entitled to the car and it was seized again. Takataka then inspected the car – it seems for the first time since his dealings with Mr Prema – and was so disappointed with its condition that he refused to take possession of it and commenced these proceedings.

[5] The statement of claim pleaded that the sale from Hurrell to Taufalele was unlawful, that the action of the third respondent in releasing the vehicle to Taufalele after it had been originally seized was unlawful and that the fourth respondent was vicariously liable for the actions of the third respondent. The appellants claimed losses totalling some $34,000 under the heads of loss of car, damages, loss of benefit and unlawful seizure of the car. They sought damages and an order for possession of the car.

[6] Taufalele took no step in the proceeding and judgment by default was entered against him. Judgment was not entered for any monetary sum, rather a directions hearing was set to provide a date for formal proof of damages. The appellants have taken no step in that regard.

[7] Justice Thomas dismissed the claim finding that there was no valid cause of action against Hurrell and that none of the actions of the third or fourth respondents were unlawful. He held that the third respondent had acted at all times in good faith. He also held that there was no adequate proof of the value of the vehicle at any time after the agreement with Prema and that the appellants had not properly proved any of the damages claimed. The judge expressed himself as concerned with the position of Taufalele and set aside the judgment against him. He ordered that Takataka was entitled to possession of the car.

[8] This appeal followed. The appellants also made an application to adduce further evidence. That application was heard by this Court last year and was dismissed.

[9] We have now heard full argument on the substantive appeal.

[10] Mr Kengike repeated the arguments made in the Supreme Court. Essentially his claim appears to be that Hurrell and Taufalele had a duty to the appellants to check on the ownership of the vehicle before selling it. We cannot accept that any such duty existed. There was no reason for Hurrell to suspect that Prema was not the owner of the car. Prema had obviously abandoned it and had told Hurrell that he could sell parts of it to meet the arrears of rent. Any obligation that either Hurrell or Taufalele had to register a change of ownership cannot translate into an obligation to the appellants.

[11] Assuming that Lita was entitled to immediate possession of the vehicle at the time of the transaction between Hurrell and Taufalele the question arises as to whether Hurrell has liability under the tort of conversion. He of course had no intention of denying Lita's right, he being unaware of it, but even if despite that, liability in conversion exists we consider, as appears below, that as no loss has been proved the issue is moot.

[12] As to the third and fourth respondents we accept, as did Justice Thomas, that the third respondent acted in good faith. He was faced with competing claims to the vehicle. He did what he thought on reasonable grounds, was correct in the circumstances and cannot be criticised for that. There was apparently some confusion caused by an incomplete record of changes to ownership but again there can be no duty to the appellant arising from this fact. In any case the appellants did not establish that any loss arose over the two week period when Taufalele regained possession of the car.

[13] Additionally the evidence of loss produced by the appellant was inadequate. The only evidence of the value of the car at the time of the transaction between Hurrell and Taufalele was what was paid - $400. There is no evidence of its value at the time it was seized for the second time by the Police other than the appellants' estimate that it was then worth no more than $1,000.00.

[14] Subsequent to the judgment against him in the Supreme Court Takataka took possession of the vehicle. His counsel advised us from the bar that it was then worthless but there is no evidence of that and certainly that was not the evidence before the Supreme Court.

[15] In respect of the other heads of damage claimed we are not persuaded that Justice Thomas was wrong in his conclusion that they were not proven. We agree with him that the loan to Prema can only be recovered from Prema.

[16] There is one respect in which we have concluded that the appellants are entitled to succeed. Counsel informed the Court that he was given no opportunity to present argument on the question of whether the judgment against Taufalele should be set aside. He should have had that opportunity and accordingly we restore that judgment. This means that if the appellants wish to take the matter further they will have to comply with the directions in the order made by Ford J on 15th July 2004. The ultimate outcome may appear inevitable but that is a matter for the appellants and their counsel.

[17] In all other respects the appeal is dismissed. The first, third and fourth respondents are entitled to costs to be taxed if not agreed.