Mt Vaea Company Ltd v Faanunu [2000] WSSC 20 (18 July 2000)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN:

MT VAEA COMPANY LTD
a duly incorporated company having its registered office at Lalovaea.
Plaintiff

AND:

SUSI QUAN FAANUNU,
Widow of Vailima.
Defendant

Counsel: H J Schuster for plaintiff
A J Pereira for defendant

Hearing: 14 July 2000
Judgment: 18 July 2000

JUDGMENT OF SAPOLU CJ

On 21 March 2000 an interim injunction was granted against the defendant on an ex parte motion by the plaintiff. The injunction was to restrain the defendant from interfering with any movable or immovable property of the plaintiff or removing any such property from the plaintiff’s Mt Vaea Nite Club. The injunction was also to restrain the defendant from using certain pick-up vehicles and from interfering with the management of the Mt Vaea Nite Club.

The term “movable” used in the injunction is just a legal term which refers to such physical personal properties like the musical instruments and pick-up vehicles which form the subject matter of the present proceedings. The term “immovable” is a legal term which refers to interests in land and it includes leases and mortgage debts.

After the interim injunction was granted against the defendant, she filed a motion to discharge the injunction. It is that motion we are concerned with in the present proceedings. The question at the core of these proceedings is whether certain musical instruments and the two pick-up vehicles to which the injunction applies belong to the plaintiff. If they do belong to the plaintiff then there is no problem, the injunction should apply to them. But if those items of property do not belong to the plaintiff, then the question arises whether the injunction should apply to them.

It should be clear that the motion to discharge relates only to the properties which are covered by the injunction. But it does not relate to all the matters that the injunction is restraining the defendant from doing such as interfering with the management and operation of the Mt Vaea Nite Club. So in effect what the defendant is seeking is not a total discharge of the injunction but only a partial discharge.

Now the plaintiff is a registered company. According to the affidavit of Everleilani Rasmussen, the plaintiff was incorporated and registered as a company on 14 November 1990. Its principal asset is the Mt Vaea Nite Club which is quite a popular nite club in Apia. Before the Mt Vaea Nite Club was incorporated as a company, it was individually owned, managed and operated by its founder Tiatia Sausoo Brown (Tiatia) being assisted by his children who worked in the nite club. According to Everleilani Rasmussen in her affidavit, when the nite club was incorporated as a company Tiatia’s children became the shareholders and directors of the company. It appears that Everleilani who is a granddaughter of Tiatia also became a director of the new company. The company was running smoothly and part of the monies earned by the company from the nite club was used for the family and family faalavelave. Then Tiatia took seriously ill in 1998 so that he could not continue to manage the nite club. His son Oli Brown took over the management of the nite club. At that time some of Tiatia’s children had migrated overseas. It is not clear whether Tiatia’s daughter Veronica Keil (deceased) had passed away at that time. However, Tiatia’s daughter Kamalita Aiono continued to work in the nite club. Oli Brown’s second wife, who is the defendant in these proceedings, was also working in the night club. Oli as manager of the plaintiff company kept all the moneys earned from the nite club. From those moneys were paid the wages of the staff, including those of the members of the Mt Vaea band. The wages of Oli which were $400 a week, the defendant’s $200 a week, and Kamalita’s $200 a week were also paid from the same source. No doubt all the other expenses associated with the operation of the nite club were also paid from the income of the nite club kept by Oli.

In March 2000 Oli, unfortunately, passed away. Tiatia is still ill to be involved again with the operation of the nite club. It is an added misfortune that there is now this dispute between the defendant and Oli’s sisters, including Kamalita Aiono, over certain properties in relation to the nite club. Only one of Oli’s sisters, Eve Kaisami, is siding with the defendant. Part of this dispute relates to the ownership of the musical instruments and pick-up vehicles which form the subject-matter of these proceedings. For clarity, these properties are categorised as follows: the musical instruments and equipment from Australia, a piano korg, the musical instruments and equipment from American Samoa, the Ram 50 Dodge pick-up vehicle, and the Daihatsu Rocky pick-up vehicle. I will now deal with each of those items of property in turn.

Musical instruments and equipment from Australia

In relation to the musical instruments and equipment from Australia, the defendant in her affidavit and oral testimony states that she went to Australia in August 1999 for a medical check-up. While she was in Australia, her sister who lives in Australia purchased musical instruments and equipment for the Mt Vaea Nite Club pursuant to a private deal with Oli. When questioned by counsel for the plaintiff about the nature of that private deal, the defendant replied that Oli phoned her sister while she, the defendant, was in Australia. Her sister then sent a catalogue, presumably of musical instruments and equipment, to Oli who requested the purchase of the musical instruments and equipment. The defendant in her oral testimony also states that the money Oli was going to use to pay for these instruments and equipment was to come from the Mt Vaea Nite Club. The total cost of the musical instruments and equipment was AUD$3,312.45. The sale dockets for these purchases are annexed to the defendant’s affidavit. They show the name of the defendant as the purchaser and receiver and not that of her sister. When cross-examined by counsel for the plaintiff as to why her name appears on the sales dockets and not that of her sister, the defendant replied it was because she was bringing the instruments and equipment with her to Samoa. The defendant is now claiming that these instruments and equipment belong to her sister and should be given to her. This seems to suggest that Oli by the time he died in March this year had not paid for the instruments and equipment claimed to have been purchased in August 1999.

For the plaintiff, the witness Kamalita Aiono states in her evidence that the aforesaid instruments and equipment from Australia were acquired for the Mt Vaea band and paid for with the plaintiff company’s money. In any event, when Oli died the Mt Vaea band performed at his funeral and after that band performance members of the band took some of the instruments and equipment and have never returned them. As a consequence, none of the instruments and equipment now claimed by the defendant is still with the nite club. The defendant, who left the nite club when Oli died in March 2000, is not able to say whether any of the instruments or equipment in question is still in the nite club.

After careful consideration, I have decided not to accept the defendant’s evidence. I find it suspicious and does not inspire confidence as to its credibility. The sales dockets for the purchase of these musical instruments and equipment are in the defendant’s name and not her sister’s. I find the defendant’s explanation for her name appearing on the sales dockets to be unsatisfactory and therefore unacceptable. There is also no explanation given by the defendant as to why the instruments and equipment which were purchased in August 1999 were still unpaid by March this year when Oli died, that is, if the defendant is right Oli was to pay for them with the Mt Vaea Nite Club’s money. In my view, it was the defendant, herself, who purchased the instruments and equipment in Australia for the nite club with money provided by the nite club. There was, therefore, no need for Oli or the plaintiff to pay any money to the defendant’s sister for purchases she was not involved with. As these instruments and equipment were purchased for the Mt Vaea band and paid for with the plaintiff’s money, I find that the ownership of those items of property belongs to the plaintiff. The injunction, therefore, rightly applies to them.

Even if one were to accept the defendant’s evidence for the purpose of argument, she would still acquire no right or interest in the instruments and equipment. On the evidence, Oli as a director and manger of the plaintiff would be acting either as the company itself or on behalf of the company when he entered into the so-called private deal with the defendant’s sister. The defendant’s sister knew that the instruments and equipment were intended for the plaintiff’s band. She must have known from the defendant or Oli that Oli was running the Mt Vaea Nite Club as its manager. Thus as between Oli and the defendant’s sister, the transaction has all the appearance of a contract of sale of goods between the plaintiff company and the defendant’s sister. The property in the instruments and equipment must have already passed to the plaintiff even though the price still remains unpaid. The defendant would have no right under the aforesaid contract of sale of goods of which she was not a party. Only her sister, as a party to that contract of sale of goods, would have been able to bring an action against the plaintiff for the price of the instruments and the equipment.

If on the other hand it is to be assumed that the defendant’s sister was dealing with Oli as an individual, then the transaction would be a contract of sale of goods between the defendant’s sister and Oli. But as between Oli and the plaintiff, Oli was acquiring the musical instruments and equipment as agent in his capacity as manager of the plaintiff, or as the plaintiff itself in his capacity as director of the plaintiff. Under this scenario the property in the instruments and equipment which had passed to Oli as an individual would in turn pass to the plaintiff as principal or as the company. The defendant would acquire no right under the aforesaid contract of sale of goods of which she was not a party. Only her sister, as a party to that contract of sale of goods, would have been able to bring an action against Oli for the price of the instruments and the equipment. No doubt Oli would in turn have looked to the plaintiff for payment of the purchase price. After all those items of property were used by the plaintiff’s band.

Thus, even if I were to accept the defendant’s evidence regarding the acquisition of the musical instruments and equipment from Australia, which I do not, she would still have been unable to claim ownership or any proprietary interest in those items of property. Ownership would still be with the plaintiff. Thus the injunction that was granted rightly applies to those properties.

Piano korg

According to the defendant’s affidavit and oral testimony, the piano korg was a gift from her sister in Australia to Oli after the defendant and Oli were married in Australia in May 1995. The validity of this marriage was questioned by counsel for the plaintiff as Oli’s first marriage has not been legally dissolved. The defendant says in her affidavit that the piano korg cost AUD$1,700. From 1995 up to the time of Oli’s death in March this year, the piano korg was used by the plaintiff’s band at the Mt Vaea Nite Club. The defendant now claims the piano korg should be given to her regardless of what consequences may follow to the Mt Vaea band and the plaintiff which is Oli’s family’s business.

I must say that as a matter of law it is wrong for the defendant to use her motion to discharge the interim injunction that was granted against her to claim that the piano korg should be given to her. It is an important principle of the law of personal property that a person with possession of a chattel can maintain his possession against anyone except the true owner or someone claiming through or on behalf of the true owner. But the defendant is not the owner of the piano korg. She is not even claiming through or on behalf of Oli’s estate given that Oli is now deceased and he appears to have been the true owner. The plaintiff therefore has no standing to make a successful claim for possession of the piano korg. So even if it is accepted that the plaintiff is not the legal owner of the piano korg, it is in possession of the piano korg which gives it a possessory title that can be maintained against everyone except the true owner or someone claiming through him or on his behalf.

As Oli has died it would appear that if the piano korg rightly belonged to him, it must now form part of his estate. The administrator of Oli’s estate would be the appropriate person to claim the piano korg but not the defendant unless she is appointed the administrator. In any event the evidence given for the plaintiff by the witness Kamalita is that the piano korg is no longer at the Mt Vaea Nite Club. Someone must have taken it.

In these circumstances, I have decided not to engraft onto the injunction an express exception concerning the piano korg if it is still in the plaintiff’s possession. The reason is that if the Court does so, it would be going against the principle of the law of personal property that a person with possession of a chattel can maintain his possession against the whole world except the true owner or someone claiming through him or on his behalf.

Musical instruments and equipment from American Samoa

According to the evidence of the witness Roy Willis who is a businessman in American Samoa, he and Oli were cousins. They became very close so that he looked upon Oli as his own real brother. Roy Willis then received in American Samoa a letter from Oli for certain musical instruments and equipment that Oli required. From the sales dockets annexed to the affidavit of Roy Willis, that must have been in the early part of 1999. Roy Willis purchased those musical instruments and equipment in American Samoa and supplied them to Oli in Apia on the understanding that when Oli’s business was successful then the instruments and equipment were to be paid. As I understand the evidence of Roy Willis, he wanted to assist Oli’s business for Oli was like a real brother to him. There was no thinking on his part about taking the instruments or equipment back. The supply of the instruments and equipment was an outright transfer to Oli. But he did not give the instruments and equipment to Oli as a gift. They were to be paid when Oli’s business was successful.

The total cost of these instruments and equipment was said to be US$9,864.27. However it appears from paragraph 23 of the affidavit of Roy Willis that the transmission unit included in the list of musical instruments and equipment was really a spare part for Oli’s Ram 50 Dodge pick up vehicle. So this item of property should not be included in the category of musical instruments and equipment from American Samoa. Subtracting the price of the transmission unit which was US$400, the real total cost of the musical instruments and equipment should be US$9,464.27.

From the sales documents annexed to the affidavit of Roy Willis, it appears that some of the musical instruments and equipment were purchased in American Samoa in May 1999 and probably sent over to Samoa about the same time. In July 1999 Roy Willis purchased a drum machine which must also have been sent over to Samoa about the same time. In October 1999 Roy Willis purchased the transmission unit I have already referred to which must have also been sent over to Samoa about the same time. Then in March 2000 before Oli died, Roy Willis purchased an “arm multi” which must have also been sent over to Samoa about the same time. So it is clear that these transactions took place over a period of time from May 1999 to March 2000.

It appears to me that as between Oli and Roy Willis these transactions involving musical instruments and equipment were individual contracts of sale of goods even though payment of the purchase price in each case was not concurrent with delivery but postponed to some future date when the business of which Oli was manager and a director was successful. However, as between Oli and the plaintiff, I am of the clear view that either Oli was acting as agent for the plaintiff in his capacity as manager of the plaintiff, or he was acting as the company, itself, in his capacity as director: see Bateman Television Ltd v Bateman and Thomas [1971] 453, per Turner J at p.463. As far as Oli and the plaintiff were concerned the musical instruments and equipment were intended for the plaintiff’s band and were actually used by the plaintiff’s band. The evidence of Roy Willis that these instruments and equipment were to be paid when the business was successful also suggests that the money to be used for payment of these items of property was to come from the plaintiff’s income.

In the circumstances, I am also of the view that the property in the musical instruments and equipment had already passed from Roy Willis to Oli and further passed from Oli to the plaintiff. The plaintiff, is therefore, the present owner of those instruments and equipment and the defendant who was not a party to any of the transactions, cannot interfere with those items of property. While Roy Willis may look for payment of those properties to Oli, and now Oli’s estate as he has passed away, Oli’s estate would in turn look to the plaintiff for payment. The defendant does not come into the picture at all as she was not a party to the transactions between Roy Willis and Oli, and between Oli and the plaintiff.

The injunction therefore rightly applies to these musical instruments and equipment from American Samoa.

Ram 50 Dodge pick-up vehicle

This Ram 50 Dodge pick-up vehicle was owned by Tiatia. In 1998 Tiatia transferred the pick-up vehicle to his son Oli who he also appointed manager of the plaintiff. On 10 February 1999 the vehicle was registered in the register of motor vehicles under the name of Oli. In March 2000 Oli passed away.

This pick-up vehicle would now appear to form part of Oli’s estate. He has not divorced his first wife from whom he has three children. He also has one child from the defendant. An administrator has not been appointed of his estate. It appears no application for letters of administration of Oli’s estate has been filed.

In these circumstances the defendant has no standing to apply to lift the interim injunction to the extent that it applies to the Ram 50 Dodge pick-up vehicle. The plaintiff being in possession of the pick up vehicle can maintain its possession against the whole world except the true owner or someone claiming through or behalf of the true owner. The defendant is not claiming through or on behalf of her husband Oli who has passed away. She is claiming on her own behalf. She cannot succeed.

I have decided to leave it to the defendant to decide what should be the next step to take in respect of this matter. I have decided not to accept the request by counsel for the defendant for the Court to take into its custody the pick-up vehicle until Oli’s estate has been sorted out. In my view the plaintiff’s possession of this vehicle gives it possessory title against the whole world except the true owner or someone claiming through or on behalf of the true owner. This is an important principle of the law of personal property. For the Court to accept the request by counsel for the defendant and remove the vehicle from the plaintiff’s possession without a proper application before the Court would be contrary to law. Perhaps Oli’s estate should now take appropriate and immediate steps to appoint an administrator.

Daihatsu Rocky pick-up vehicle

According to the evidence of the witness Roy Willis he used to come over to Apia from American Samoa and used Oli’s vehicle. This must be the Ram 50 Dodge pick-up vehicle which was transferred to Oli by his father Tiatia. Roy Willis then entered into an arrangement with Oli whereby each of them would provide some money for the purchase of a vehicle which Roy Willis would use on his frequent visits to Apia and during his absence when he returns to American Samoa would be used by Oli. At the end of November or the beginning of December 1999, Roy Willis gave US$4,000 to Oli for the purchase of a vehicle. It was not until February 2000 that the Daihatsu Rocky pick-up vehicle was purchased. The cost was $16,500. There is some conflict between the evidence of the defendant and that of the plaintiff’s witness Kamalita Aiono as to the circumstances of the purchase of the said pick-up vehicle. However, both were in agreement that the money that was used to pay for the vehicle was obtained by Oli from the plaintiff’s business. The defendant said that she then took the money to the seller. The vehicle was then registered in the register of motor vehicles on 10 February 1999.

Thus it is clear that the Daihatsu Rocky pick-up vehicle was purchased with money provided by Roy Willis and the plaintiff. The money was not a gift to Oli. It is not clear what proportion of the purchase price of $16,500 was paid by Roy Willis and what proportion was paid by the plaintiff as there was no proper evidence as to the exchange rate of the US dollars provided by Roy Willis at the time of the purchase in February this year. Be that as it may, I am of the view that even though Oli may have had legal ownership of the vehicle, both Roy Willis and the plaintiff have equitable ownership of the vehicle to the extent of their respective contributions to the purchase price. Consequently there is a resulting trust in favour of Roy Willis and the plaintiff in respect of their individual contributions to the purchase price. If Oli’s legal ownership has now vested in his estate, his estate would hold the vehicle on a resulting trust in favour of Roy Willis and the plaintiff to the extent of their respective contributions to the purchase money. The defendant who has current possession of the pick-up vehicle cannot maintain her possession against Roy Willis and the plaintiff who are the equitable owners of the pick-up vehicle having provided the purchase money for the pick-up vehicle in the character of purchasers.

In the New Zealand case of Bateman Television Ltd v Bateman and Thomas [1971] NZLR 453 the respondents who were the two directors of the appellant company trade in two of the appellant company’s existing cars in part-payment of two new cars. The balance of the purchase price was paid with the company’s money. The respondents then placed the two new cars under their names even though the whole purchase price was provided by the appellant company. In liquidation proceedings the question arose in relation to the two new cars whether they were the property of the company or the respondent directors. The Court of Appeal held that in those circumstances a presumption will arise of a resulting trust in favour of the appellant company which provided the consideration for the purchase of the new cars.

Turner J who delivered the leading judgment in that case said at p.461.

“I think that he [the trial Judge] should have directed himself that the whole of the consideration for these purchases having moved from the company, a presumption arose from that fact of a resulting trust in the company’s favour – Dyer v Dyer (1788) 2 Cox E of 92; [1788] EWHC J8; 30 ER 42 and The Venture [1908] P218. He should then have inquired whether in this particular case circumstances were proved by which the presumption of resulting trust should be regarded as rebutted – Standing v Bowring [1885] UKLawRpCh 282; (1885) 31 Ch D 282 per Cotton L J at p 287”.

Then at p. 462 Turner J went on to say:

“The second class of cases is that in which A, using funds provided by B, purchases, in the absence of B, a property, putting it in his own name. Here, if the evidence is such that B, can be said to have advanced the moneys to A in the character of a purchaser, there will be a resulting trust”.

And at p. 463 Turner J said:

“[Where] no satisfactory evidence is produced to rebut it, a presumption will arise to a resulting trust in favour of him who finds the consideration.”

At p.467, Richmond J in delivering his concerning judgment said:

“The used cars were handed over in part payment of the purchase price for the new cars. The prima facie inference is that this was done by the company, to which the cars belonged, by the agency of its directors. Thus the case is one where the company has directly advanced a part of the purchase moneys for the new cars and, on the face of it, in the capacity of a purchaser. Then one finds that all subsequent instalments of the purchase price were also paid by the company... In my opinion there was clearly a presumption of a resulting trust of the entire equitable interest in the new cars in favour of the company”.

On the facts of this case, it is clear that the full purchase money for the Daihatsu Rocky pick-up vehicle was provided by Roy Willis and the plaintiff company to Oli in the character of purchasers. Oli then purchased the Daihatsu Rocky pick-up vehicle which he put in his name. Applying the statements of principle in Bateman’s case, a presumption of a resulting trust would arise in favour of Roy Willis and the plaintiff company who provided the full consideration for the purchase of the vehicle, to the extent of each party’s contribution to the consideration The question would then arise whether there is any satisfactory evidence which could rebut the presumption. The answer is that there is none. Thus the presumption stands. So, in this case, Oli would have held the Daihatsu Rocky pick-up vehicle on a resulting trust in favour of Roy Willis and the plaintiff to the extent of the contribution made by each of them to the purchase price. Now that Oli has passed away, his estate would hold the pick-up vehicle on a resulting trust in favour of Roy Willis and the plaintiff, there being no evidence to rebut the presumption of a resulting trust.

There is one other important legal matter which has arisen in this case that I need to refer to. As I have already said, legal ownership of the pick-up vehicle was with Oli who also registered the vehicle in his name. The equitable ownership of the vehicle would be with Roy Willis and the plaintiff who provided the full purchase money. So the resulting trust that has arisen would be a resulting trust of the entire equitable interest in the pick-up vehicle in favour of Roy Willis and the plaintiff to the extent of their respective contributions to the purchase price. But the question is, can this resulting trust arise when Oli is the registered owner of the vehicle. The point does not appear to have been raised or touched upon in Bateman’s case. Perhaps the fact of registration of a motor vehicle is immaterial for the purpose of a resulting trust where someone else has provided the purchase money in the character of a purchaser.

However, I am somewhat concerned about a resulting trust arising in favour of someone in respect of a motor vehicle when a different person is the registered owner and therefore having legal ownership. I have therefore, given the matter some consideration. After consideration I am now satisfied that a resulting trust could still arise in such circumstances in favour of a person who provides the purchase money notwithstanding the fact that registration is in a different person’s name. In the first place, I do not think that the register of motor vehicles does confer title. This is because I do not think that the registration of a motor vehicle would override the clear provisions of the Sale of Goods Act 1975 as to when property is to pass in a sale of goods transaction which may involve the sale and purchase of a motor vehicle. The term “owner” which is used in the registration provisions of the Road Traffic Ordinance 1960 is also defined in section 2 of the Ordinance by reference to possession rather than by reference to ownership.

Furthermore, in Fawcett v Car Sales Ltd [1960] NZLR 406 (CA) Gresson P stated at p.418:

“Though the registration of ownership certificate is not a document of title Joblin v Watkins [1949] 1 All ER 47; Bishopgate Motor Finance Corporation Ltd v Transport Brakes Ltd [1949] 1 KB 322; [1949] 1 All ER 37), and it cannot be assumed that the person in possession of a car and its registration book is the owner of the car (Morris LJ in Central Newbury Car Auctions Ltd v Unity Finance Ltd [1956] 3 All ER 905, 920 it is some evidence of ownership.”

At pp 428-429 of the same case Cleary J stated:

“It was common ground in the argument before us that the property in the “car could pass by sale and delivery. In Bishopgate Motor Finance “Corporation Ltd v Transport Brakes Ltd [1949] 1 KB 322; [1949] “ 1 All ER 37 there is the following passage in the judgment of Denning L J:

‘The registration book of a car, or the logbook as it is called, may not itself be a document of title, but it is the best evidence of title. The transfer of the logbook does not itself transfer the property in the car. The property, as a rule, is only transferred by sale and delivery, but a transfer is open to suspicion unless the logbook is handed over. The wise buyer insists on it in order to be sure that the seller is the owner and that the car may lawfully be on the road.’”

In Elwin v O’Regan and Maxwell [1971] NZLR1124 Beattice J stated at p.1127:

“It is quite obvious that a certificate of registration of a motor vehicle does not of itself confer title. The document makes this clear by a note for the registered owner that the certificate of registration is merely evidence of the transaction recorded therein, and does not constitute a certificate of legal ownership”.

If, as it appears from the cases I have cited, the certificate of registration of a motor vehicle is not a document of title, then it must follow that the registration itself cannot confer title to a motor vehicle. The cases seem to say that the certificate of registration is merely evidence of ownership. If that is so, then the fact of registration must also be merely evidence of ownership. But even then, it may not be conclusive evidence of ownership in a particular case. That being so, the registration of a motor vehicle in another person’s name may not be evidence sufficient to rebut the presumption of a resulting trust in favour of a person who, in the character of a purchaser, provides the purchase money, or part of it, for a motor vehicle.

Even though in this case the pick-up vehicle is registered in Oli’s name, the fact of registration is not sufficient evidence on its own to rebut the presumption of a resulting trust arising in favour of Roy Willis and the plaintiff who provided the purchase money for the vehicle.

All in all then, I am of the clear view that the defendant’s motion to discharge the ex parte interim injunction granted against her should be dismissed. It is accordingly dismissed.

Costs are awarded to the plaintiff to be fixed by the Registrar plus any disbursements.

CHIEF JUSTICE

Solicitors:
Fepuleai Law Office for plaintiff
A J Pereira for defendant