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Elisaia v Ropati [2008] WSSC 51 (25 July 2008)

IN THE SUPREME COURT OF SAMOA
HELD AT APIA

BETWEEN:

BOB PAUPAU ELISAIA
of Tulaele, Retired.
Plaintiff

AND:

VAEPULE ROPATI
of Talimatau, Businessman.
First Defendant

AND:

POLIMA ISABELLA MAEPU
of Tulaele.
Second Defendant

Counsel: R Papalii for plaintiff
R T Faaiuaso for first defendant
P A Fepuleai for second defendant

Hearing: 22 July 2008
Judgment: 25 July 2008

JUDGMENT OF SAPOLU CJ

Introduction

1. I have already dealt with the law that is applicable to this case in my judgment delivered in Bob Paupau Elisaia v Vaepule Ropati and Another (2006) (unreported judgment delivered on 12 April 2006) which was concerned with proceedings on a motion for an interim injunction by the plaintiff. I do not propose to repeat in full in this judgment my discussion of the law and relevant legal principles in that judgment.

2. In Bob Paupau Elisaia v Vaepule Ropati and Another (2006), I had also dealt in detail with the facts alleged in the affidavits filed by the plaintiff and the first defendant in the proceedings for an interim injunction. The evidence adduced by the plaintiff and the first defendant in these proceedings for the substantive hearing are substantially the same, insofar as material, as the facts alleged in their respective affidavits filed in the previous proceedings.

3. It should also be mentioned that the second defendant did not appear in the proceedings for an interim injunction and has again failed to appear in these proceedings for the substantive hearing. As a result, counsel for the second defendant sought leave to withdraw as counsel and leave was granted. The matter relating to the second defendant has been adjourned for formal proof by the plaintiff.

Facts

4. The material facts may be briefly stated. The plaintiff is a resident of New Zealand but visits his home in Samoa occasionally. During one of the plaintiff’s visits to Samoa he bought a 1998 Toyota Hiace van from its previous owner which is a company. That was on 14 September 2005.

5. The price of the van was $21,000. The plaintiff obtained a loan from a bank in Apia to pay for the van. He paid a deposit of $20,000 on 14 September 2005 to the previous owner when he bought the van and was given possession of it. The previous owner’s private number plate remained on the van. Transfer of the ownership papers was deferred until the general manager of the company from whom the plaintiff bought the van returned from overseas.

6. On 31 December 2005 the ownership papers were transferred to the plaintiff and he paid the balance of the price of the van which was $1,000 to the previous owner. The plaintiff’s intention in buying the van was to use it as a taxi.

7. When it was time for the plaintiff to return to New Zealand, he left his van with the second defendant who is his grand nephew. At that time, the second defendant was living at the plaintiff’s house at Tulaele.

8. The plaintiff also left some money with the second defendant to have the van registered under the plaintiff’s name and to obtain a taxi license and number plate so that the van could be operated as a taxi. The arrangement was for the second defendant to run the van as a taxi and its earnings were to be used to pay off the bank loan which the plaintiff had obtained to buy the van.

9. Not long after the plaintiff returned to New Zealand, a member of his family in Samoa contacted him that the second defendant had sold the van. When the plaintiff contacted the second defendant, he was told by the second defendant that the van had merely been hired out to the first defendant at $100 per day. The plaintiff was happy as that would be money to pay off the bank loan. However, when the plaintiff later found out that no money was going into the bank he came back to Samoa.

10. It was then that the plaintiff found out that the second defendant had sold the van to the first defendant. The second defendant had also left Samoa for New Zealand.

11. As it seems from the evidence, soon after the plaintiff’s return to New Zealand after he bought the van, the second defendant replaced the private number plate on the van with a taxi number plate registered under a different name. A ‘for sale’ sign was then put on the van.

12. At that time, the first defendant who is a taxi operator was looking for a van to buy for use as a taxi.

13. According to the evidence given by the first defendant under cross-examination, the second defendant came with the van to him and tried to sell it to him. When he enquired as to who owned the van, the written information given to him by the second defendant showed that the number plate on the van was not registered under the name of the second defendant but under a different name. So the first defendant told the second defendant that he would not buy the van as it was registered under the name of someone else. The second defendant then left.

14. Two or three days later, the second defendant returned with the van to the first defendant. At that time, the second defendant had with him papers which showed that ownership of the van had been registered under the name of the first defendant. The first defendant then agreed to buy the van. The price was $22,000.

15. The first defendant first paid a deposit of $10,000. As the second defendant was then about to leave for New Zealand, the balance of $12,000 was left to be paid when the second defendant returned from New Zealand. Fortunately for the first defendant, he has not had to pay for the balance of $12,000.

The law

16. As already mentioned, I have already set out the law which is applicable to this case in my judgment in Bob Paupau Elisaia v Vaepule Ropati and Another (2006) on the plaintiff’s motion for an interim injunction. I do not propose to repeat in full here what was said as to the applicable law in that judgment.

17. This is a case of sale of goods and the Sale of Goods Act 1975 therefore applies. As I said in Bob Paupau Elisaia v Vaepule Ropati and Another (2006):

"At common law no person can give what he does not have. That means no person can give a better title than he himself possesses. In the context of a sale of goods transaction, this means that a seller of goods cannot give a better title than he possesses in the goods to a buyer. So if a seller has no title in the goods which he purports to sell to a buyer then the buyer gets no title to the goods. This principle is often expressed in the Latin maxim nemo dat quod non habet which is often referred to in shortened form as the nemo dat rule. See George Westbrook v Fata Esera (2002)."

"The nemo dat rule is subject to a number of statutory and common law exceptions....Section 22(1) preserves the common law principles of estoppel and s.58 of the Act continues to apply the rules of the common law which are not inconsistent with the Act to contracts of sale of goods. Again see George Westbrook v Fata Esera."

18. Section 22(1) of the Sale of Goods Act 1975, which is of particular relevance to this case, provides:

"(1) 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."

19. In Bob Paupau Elisaia v Vaepule Ropati and Another (2006), I said:

"The first part of s.22 (1) re-enacts the common law nemo dat principle. The second part provides an exception to the nemo dat principle by providing ‘unless the owner of the goods is by his conduct precluded from denying the seller’s authority to sell."

20. In similar vein, this Court said in Cummins Engine Co Ltd v Ott Transport Ltd [2006] WSSC 21:

"The first part of s.22(1) codifies the common law principle expressed in the Latin maxim nemo dat quod non habet commonly known as the nemo dat rule which means that no person can give what he does not have. In a sale of goods transaction, that means a seller cannot give a better title than he possesses in the goods to a buyer: George Westbrook v Fata Esera [2002]WSSC 4 (Supreme Court judgment delivered on 4 March 2002); Bob Paupau Elisaia v Vaepule Ropati [2006] WSSC 14 (Supreme Court judgment delivered on 12 April 2006). The second part of s.22(1) which provides ‘unless the owner of the goods is by his conduct precluded from denying the seller’s authority to sell’ preserves the application of the common law principles of estoppel to a sale of goods transaction and in so doing creates an exception which may preclude the owner from invoking the nemo dat rule."

21. In Cummins Engine Co Ltd v Ott Transport Ltd [2006] WSSC 21, I referred to the case of Central Newbury Car Auctions Ltd v Unity Finance Ltd [1956] 3 A11 ER 905 and quoted from it. I said:

"The crux of the judgments of the majority of Hodson and Morris L J is best summed up in the headnote where it is stated:

‘By delivering the car registration book, as well as the car itself, to [the rogue] the plaintiffs had not given him the means of appearing to be the owner or of having apparent authority to sell the car, since the registration book was not a document of title to the car, and since delivery of the car without more would not have amounted to giving [the rogue] apparent authority to sell it; and therefore the plaintiffs, who were the true owners of the car, were not estopped from denying the title of the third party to sell the car to the first defendant."

22. In the same case, Denning L J after discussing the basis of the doctrine of estoppel by conduct, said at pp909-910:

"We are here concerned with the conduct of a true owner in letting a chattel out of his possession. The question is what conduct on his part is regarded by the law as so serious that it would be unfair or unjust to allow him afterwards to claim it from an innocent purchaser?

To the question thus posed, I answer that on the authorities the mere fact that the true owner is careless in the custody of the good or in the indicia of title to his goods is not sufficient to prevent his afterwards asserting his title to them. If he leaves his house wide open so that thieves enter and steal his goods, he can recover them from any person to whose hands they come, unless they have been sold meanwhile in market overt. If he entrusts his servant with the custody of goods, and the servant turns dishonest and sells them to outsiders, the true owner can recover them, no matter that he was careless in trusting the servant so far. The cases of Farquharson Brothers and Co v King and Co [1902] UKLawRpAC 26; [1902] AC 325 and Mercantile Bank of India Ltd v Central Bank of India Ltd [1938], A11 ER 52 fall into that category."

23. I had referred in detail to the authorities on estoppel by conduct arising from omission in Bob Paupau Elisaia v Vaepule Ropati [2006] WSSC14. I do not propose to repeat all of the same here. Suffice to refer to Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890 where Lord Wilberforce said at pp902-903:

"The second possible contention is also based upon estoppel. It is that the appellants are estopped from asserting their ownership by their conduct, that is, by their negligent omission to register their agreement.

"In a consideration of this argument it is first necessary to be clear as to what elements are necessary in order to validate a claim of estoppel, a question which requires to be answered in the light of the fact that what, on this argument, is relied upon as founding the estoppel is inaction or silence rather than positive conduct. English law has generally taken the robust line that a man who owns property is not under any general duty to safeguard it and that he may sue for its recovery any person into whose hands it has come: see Farquharson Brothers & Co v King & Co.[1902]AC 325 per Earl of Halsbury, p.332 and in andante Lord Macnaghten, p.336. He is not estopped from asserting his title by mere inaction or silence, because inaction or silence, by contrast with positive conduct or statement is colourless: it cannot influence a person to act to his detriment unless it acquires a positive content such that that person is entitled to rely on it. In order that silence or inaction may acquire a positive content it is usually said that there must be a duty to speak or to act in a particular way, owed to the person prejudiced, or to the public or to a class of the public of which he in the event turns out to be one. The necessity for this duty, particularly with regard to silence or omission, has been stated in many authoritative judgments too well known to need complete citation, for they were comprehensively reviewed by Lord Wright in Mercantile Bank of India Ltd v Central Bank of India Ltd [1938] AC 287. Lord Wright says there, at p.304:

"the existence of a duty is essential, and this is peculiarly so in the case of an omission... The duty may be, in the words of Blackburn J in Swan v North British Australasian Co Ltd, [1862] EngR 354; 2 H & C. 175, 182 to the general public of whom the person is one."

24. In the Australian case of Johnson Matthey (Aust) Pty Ltd v Dascorp Pty Ltd & Others [2003] VSC 291, Redlich J states at para 42:
    

"For almost one and half centuries the common law has recognised a duty of care as an essential element of estoppel by omission: see the cases referred to in Benjamin Sale of Goods (1997) 5th ed by A G Guest et al (eds) at para. 7-015. It has been acted upon by Courts of the highest authority. It need not be an existing duty. As Glass JA observed in Thomas Australia Wholesale Vehicle Trading v Marac Finance Australia (1985) 3 NSWLR 452 at 469 the owner’s failure –

" ... must be in breach of the duty to speak out. Unless the conduct of the taciturn owner is subjected to the litmus test of duty, I know of no way to discriminate between conduct which precludes and that which is not."

Discussion

25. The plaintiff had given his van to the second defendant to run as a taxi. Before the plaintiff returned to New Zealand he also gave the second defendant some money to register the van under the plaintiff’s name and to obtain a taxi number plate. In other words the plaintiff did not register his van under his name but left it to the second defendant to do that. The second defendant, however, did not register the van under the name of the plaintiff as he was supposed to do.
    
26. Without the knowledge, consent, or authority of the plaintiff, the second defendant sold the van to the first defendant. How that happened was that when the second defendant first tried to sell the van to the first defendant, the latter noticed from the written information given to him that the number plate on the van was not registered under the second defendant’s name. So he refused to buy the van.
    
27. Two or three days later, the second defendant returned to the first defendant with papers which showed that the van had been registered under the name of the first defendant who then bought the van.
    
28. On the authorities, estoppel by conduct did not arise in those circumstances to preclude the plaintiff as owner from claiming the van. Merely giving custody of the van to the second defendant was not sufficient to preclude the plaintiff from asserting title to it. Likewise, the omission by the plaintiff to register the van under his name before he returned to New Zealand was not a sufficient act to preclude the plaintiff from asserting title to it unless it is shown that he owned a duty to register the van to the first defendant. No such duty has been shown and no such duty arises here.
    
29. It follows that in terms of the nemo dat rule, as the second defendant had no title to the van, he had no title to pass to the first defendant who therefore acquired no title to the van. For the first defendant to acquire title, it must be shown that the plaintiff is precluded by his conduct from denying the second defendant’s authority to sell the van to the first defendant. However, there is nothing in the plaintiff’s conduct which is sufficient to preclude him from denying the second defendant’s authority to sell and asserting his title to the van.
    
30. If anything, it was the second defendant’s deception which induced the first defendant to buy the van rather than any conduct on the part of the plaintiff.
    
31. The van, which is currently in the custody of the Registrar, must therefore be returned to the plaintiff.
    

Judgment

32. Judgment is given for the plaintiff and the return of the van to the plaintiff is ordered.
    
33. There was really no other relief sought against the first defendant during the hearing. Perhaps any other relief would be sought by the plaintiff against the second defendant who is his grand nephew in separate proceedings for formal proof of his claim against the second defendant.
    
34. Costs are awarded to the plaintiff to be fixed by the Registrar together with any reasonable disbursements.
    

CHIEF JUSTICE

Solicitors
Toa Law for the plaintiff
Richard’s Law Firm for first defendant
Fepuleai & Roma Law Firm for second defendant