Westbrook v Esera [2002] WSSC 4 (4 March 2002)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN

GEORGE WESTBROOK
of Kamehameha Highway, Aiea, Hawai'i, Businessman.
Plaintiff

AND

FATA ESERA
c/- Peace Corps, Matautu, Apia.
First Defendant

AND

ALAVINE SU’A
c/- Central Bank of Samoa, Apia.
Second Defendant

Counsel: R Drake for plaintiff
PA Fepuleai for defendant

Hearing: 28 February 2002
Judgment: 4 March 2002

JUDGMENT OF SAPOLU CJ

Facts

The essential facts of this case are brief and straight forward. The plaintiff is a businessman in Honolulu, Hawaii. He wanted to start a rental car business in Samoa. In 2000 he learnt that his friend Perite Ioka (Perite) was coming to Samoa at the end of 2000 for the general election to be held in early 2001. Thus he arranged with Perite for two vehicles owned by the plaintiff to be shipped to Samoa under Perite’s name. The arrangement was that when the vehicles arrive in Samoa, Perite will obtain the release of the vehicles from customs and give them to a cousin of the plaintiff in Samoa. The plaintiff then paid for the freight for the two vehicles in Hawaii and gave Perite US$2,500 to pay for the customs duty in Samoa. The vehicles were a 1991 Suzuki Geo-Tracker 8304 and a 1993 Suzuki Geo-Tracker 8903.

Perite then travelled to Samoa. The vehicles arrived in Samoa in the first half of December 2000. The vehicles were released from customs and they were taken to Perite’s family in Afega. The first defendant, who lives with his wife, the second defendant, near Perite’s family, saw the two vehicles parked at Perite’s family. He became interested in the 1991 Suzuki Geo-Tracker 8304. He enquired as to the owner of that vehicle. Perite told the first defendant that he was the owner and he had shipped the two vehicles from Hawaii and he offered to sell the 1991 Suzuki Geo Tracker 8304 to the first defendant for $18,000. This was on 17 December. The first defendant then arranged a loan of $18,000 with the ANZ Bank to pay for the vehicle. On 20 December after obtaining his loan from the bank, the first defendant paid the money over to Perite at the JT Sportsclub in Fugalei. He was not given a receipt for the money nor did he appear to have asked for one. The first defendant then got the vehicle. He has been using the vehicle up to now. Curiously, the vehicle has remained registered in Perite’s name. There is no evidence of the first defendant having tried to change the registration of the vehicle to his name.

In March 2001, the plaintiff learnt in Hawaii from his cousin in Samoa to whom Perite was supposed to deliver the vehicles upon arrival in Samoa, that Perite had returned to Hawaii without delivering up the vehicles. When the plaintiff went to see Perite at his address in Hawaii, Perite had shifted without leaving a forwarding address. The plaintiff also found out that the 1991 Suzuki Geo Tracker 8304 was in the possession of the defendants. So he instructed a firm of solicitors in Apia to recover possession of the vehicle from the defendants. The solicitors wrote to the defendants on 23 July 2001 demanding possession of the vehicle. The defendants refused to deliver up possession. The first defendant claimed he had purchased the vehicle from Perite in good faith for valuable consideration without notice of any defect in title on the part of the seller Perite. Consequently, the plaintiff brought these proceedings in detinue for the return to him of the vehicle and for damages; the cause of action in detinue having accrued at the time the defendants refused the plaintiff’s demand to deliver up the vehicle. The plaintiff also seeks cancellation of the registration of the vehicle in Perite’s name. The defendants did not take issue with the cause of action perhaps because detinue still exists as a tort in some common law jurisdictions for instance, New Zealand. However, it should be noted that detinue has been abolished as a tort in England: see eg Winfield & Jolowicz on Tort (1994) 14^th ed p. 513.

Law applied to facts

In the present case, the relevant common law principle, as expressed in the Latin maxim nemo dat quod non habet, is that no person can give what he does not have. The principle is often referred to in shortened form as the nemo dat rule. It means in the context of a sale of goods transaction that a seller of goods cannot give a better title than he possesses in the goods to a buyer. It was found that this principle worked injustices to innocent buyers in a number of cases. Exceptions to the principle were then created partly by statute and partly by the common law itself. The statutory exceptions, originally created by English statute, have been adopted in ss.22,23,24 and 25 of our own Sale of Goods Act 1975. The competing principles underlying these changes were stated in Bishopsgate Motor Finance Corporation v Transport Brakes Ltd [1949] 1 KB 332 by Denning LJ at pp 336 – 337 as follows:

"In the development of our law, two principles have striven for mastery. The first is for the protection of property: no one can give a better title than he himself possesses. The second is for the protection of commercial transactions: the person who takes in good faith and for value without notice should get a good title. The first principle has held sway for a long time, but it has been modified by the common law itself and by statute so as to meet the needs of our own times."

Counsel for the defendants referred to the competing needs for the protection of property and the protection of commercial transactions and placed emphasis on the latter. However, these matters are only competing considerations which explain the need to modify the nemo dat principle so that its application will not result in injustice to innocent buyers in certain cases. If, however, the defendants are to avoid the application of the nemo dat principle to them in this case, they should be able to bring themselves within one of the exceptions. That counsel for the defendants attempted to do as will be shown in the course of this judgment.

Section 22(1) of the Act which is the provision that counsel for the plaintiff relied on, provides:

"Subject to the provisions of this Act, where goods are sold by a person who is not the owner thereof, and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller’s authority to sell".

It is clear that the first part of s.22(1) re-enacts the common law nemo dat principle that no person can give what he does not have and a seller of goods cannot give a better title than he possesses in those goods to a buyer. The second part enables a seller to pass title if the circumstances give rise to estoppel. However, estoppel was not relied on by the defendants and nothing more will be said about it.

On the facts of the present case, it is clear the plaintiff did not give his consent or any authority to Perite to sell any of the vehicles. Perite was told by the plaintiff to release the vehicles to the plaintiff’s cousin. That was not done. Instead, Perite sold one of the vehicles to the first defendant who claims to have purchased the vehicle in good faith for valuable consideration and without notice that Perite had no title as he was not the owner of the vehicle. In these circumstances, I am of the view s.22(1) applies. The first defendant, therefore, has not acquired any title to the vehicle for Perite had no title to the vehicle and did not have the consent or authority of the plaintiff to sell the vehicle. Ownership of the vehicle still remains with the plaintiff.

For the defendants it was submitted that the first defendant had acquired a good title as he is a buyer in good faith for value without notice under s.23. That section of the Act provides:

"Where the seller of goods has a voidable title thereto, but his title has not been avoided at the time of the sale, the buyer acquires a good title to the goods, provided he buys them in good faith and without notice of the seller’s defect of title."

There was no dispute that the first defendant bought the vehicle in good faith and without notice of the seller’s defect in title. There was also no dispute that the plaintiff as owner did not avoid the sale at the time it occurred by "communicating" to the first defendant that Perite was not the owner of the vehicle and the plaintiff had not authorised or given his consent to him to sell the vehicle. However, for s.23 to apply, the defendants would also have to adduce evidence to show that Perite had a voidable title to the vehicle. If Perite did not have a voidable title then s.23 does not apply and the first defendant has not acquired any title to the vehicle.

It was submitted by counsel for the defendants that the registration of the vehicle in Perite’s name gave him title to the vehicle. Given the present status of the motor vehicles register, registration of a vehicle in the register of motor vehicles does not confer title even though it may provide evidence of title. It follows that a certificate of registration of a motor vehicle is also not a document of title. On this point see the judgment of this Court in Mt Vaea Co Ltd v Susi Quan Faanunu (2000) (unreported judgment delivered on 18 July 2000) where the relevant New Zealand and English authorities are referred to. Registration of the vehicle in Perite’s name therefore confers no title on him in the vehicle, not even a voidable title. It is also to be noted that the principle of "indefeasibility of title" in the law real property is different from the principles which govern the transfer of title in the law of personal property in the context of sale of goods transactions.

Counsel for the defendants also relied in his submissions on a passage from Business Law of Australia (5 ed) by Vermeesoh and Lindgren at 1834 where it states.

"The commonest illustration of a voidable title is one which has been procured through the misrepresentation, innocent or fraudulent, of the buyer. It is voidable at the option of the injured party."

In reference to the exception provided in s.23 to the nemo dat rule, Professor Atiyah in "The Sale of Goods" (1990) (as reprinted in 1991 and 1992) states at p.369:

"The great practical importance of this rule is that, if a person buys goods "by fraud and disposes of them before the other party avoids the contract, a buyer in "good faith from the fraudulent party acquires a good title".

From these citations, it is clear that the kind of situation which is contemplated under s.23 is one where, for instance, a person by trickery or deception buys goods from another, an owner for example. In such a transaction, the buyer is a fraudster and the seller is the owner who has been defrauded. The fraudster’s title will be voidable. If he then sells the goods to an innocent buyer for valuable consideration without notice, the fraudster becomes the seller. If at the time of the sale by the fraudster to the innocent buyer his voidable title had not been avoided by the owner from whom he had fraudulently bought the goods, the innocent buyer for valuable consideration without notice acquires a good title in the goods. The true owner will, therefore, not be able to recover the goods from the innocent buyer.

However, in the present case Perite did not buy the vehicle from the plaintiff using any fraudulent means. The plaintiff who appears to have been a bailor willingly shipped the vehicle from Hawaii to Samoa under Perite’s name with instructions to Perite to give the vehicle when it arrives in Samoa to the plaintiff’s cousin. Instead of doing so, Perite, who appears to have been a bailee of the vehicle for a specific purpose, sold the vehicle to the first defendant. In these circumstances, because Perite did not buy the vehicle from the plaintiff but was willingly given possession of the vehicle as a bailee for a specific purpose, he had acquired no title by way of ownership, not even a avoidable title (ownership), to the vehicle. The s.23 exception to the nemo dat rule re-enacted in s.22(1) of the Act therefore does not apply and the defendants cannot rely on s.23. The first defendant therefore has not acquired any title whatsoever because Perite never had any title, not even a voidable title, to pass to him. Accordingly, the title in the vehicle still remains with the plaintiff and the vehicle must be returned and delivered up to him.

As the arrangement between the plaintiff and Perite was clearly a bailment and the relationship between the two was that of bailor and bailee, I would like to note that in his work Bailment (1991) 2^nd ed p.243, Professor Palmer states:

"Another difference between detinue and conversion lies in the fact that in detinue the plaintiff’s immediate right to possession must arise out of a proprietary interest in the goods. Clearly a bailor who is the owner of goods, and whose right to possession is immediate, will enjoy the right to sue in detinue, whether the detainer be his original bailee or any third party who has come into possession."

Claim for damages

As I understand counsel for the plaintiff, the only claim for damages she really pursued in the course of these proceedings was damages for the unlawful use of the vehicle by the defendants from 31 August to 30 November 2001, a period of 92 days. She did not pursue or strongly pursue the other claims for damage. I have not been able to find any case, and none was cited to the Court, where damages for inconvenience has been awarded in case of detinue, at least a case with facts similar to this one. If the plaintiff wants to pursue his other claims for damages, then counsel to advise the registrar for those claims to be reinstated, and I want proper submissions with supporting authorities from counsel.

Now in this case, the plaintiff in his oral testimony said that he sent two vehicles to Samoa in the name of Perite. One of those vehicles is the subject of the present proceedings. His purpose was to set up a rental car business in Samoa. However, Perite unlawfully sold the 1991 Suzuki Geo-Tracker 8304 to the first defendant. The first defendant and his wife have had the use of the vehicle for their own purposes when, in fact they had no title to the vehicle. The plaintiff was at all times the true owner of the vehicle. The defendants must therefore pay a reasonable hire for their use of the vehicle : see Strand Electric & Engineering Co Ltd v Brisford Entertainments Ltd [1952] 2 QB 246, pp 253 – 255 per Denning LJ; Hillesden Securities Ltd v Ryjack Ltd [1983] 2 A11 ER 184, pp 187 – 188 per Parker J.

The evidence given by the plaintiff shows that the daily market rental for a vehicle of the same kind as in this case was $88. For 92 days from 31 August to 30 November 2001, that comes to a total of $8096. I will allow the plaintiff’s claim for that amount. As I have already said, this was the only claim for damages the plaintiff appear to have actively pursued in these proceedings.

Judgment

(a) The defendants are ordered to return the vehicle to the plaintiff forthwith.

(b) Registration of the vehicle in the name of Perite is cancelled.

(c) The defendants are ordered to pay damages of $8096 to the plaintiff for the use of the vehicle.

(d) The defendants are to pay to the plaintiff costs according to scale plus disbursements to be fixed by the registrar together with the plaintiff’s return air fares from Hawaii to Samoa for the hearing of this case.

CHIEF JUSTICE

Solicitors:

Drake & Co Law Firm for plaintiff
Fepuleai & Schuster Law Firm for defendants