JOHN ORR, CHIEF CONSTABLE, STRATHCLYDE POLICE v. DAVID WILLIAM SHARP and MALCOLM McLEAN McMILLAN and NORWICH UNION INSURANCE LTD
A4715/99
JUDGMENT OF SHERIFF PRINCIPAL EDWARD F BOWEN QC
in the cause
JOHN ORR, CHIEF CONSTABLE, STRATHCLYDE POLICE
PURSUERS
against
(1) DAVID WILLIAM SHARP; (2) MALCOLM McLEAN McMILLAN; and (3) NORWICH UNION INSURANCE LTD
DEFENDER
Act: No appearance.
Alt: (1st defender) Wilson, Russels Gibson McCaffrey, Solicitors.
(2nd defender) Livingstone, Livingstone Brown, Solicitors.
GLASGOW, 15 March 2002.
The Sheriff Principal having resumed consideration of the cause, sustains the appeal; recalls the sheriff's interlocutor dated 21 September 2001 complained of; deletes finding in fact (68) therefrom and renumbers the existing findings in fact accordingly; deletes finding in fact and law no. (3); deletes the finding in law and substitutes therefor "The second defender being the owner of the subject in medio is entitled to be ranked and preferred to the first defender"; sustains the plea in law for the second defender and repels the plea in law for the first defender; ranks and prefers the claim of the second defender and repels the claim of the first defender; reserves all questions of expenses.
NOTE:
[1]This action of multiple-poinding concerns the fate of a Porsche 911 Carrera 4 motor car which has been held by the Chief Constable of Strathclyde since August 1998. He is the pursuer and real raiser but has presented no submissions to the court; the first and second defenders are the competing claimants.
[2]The car in question is a 1992 model with certain distinctive features. It was bought by the first defender from Glenvarigill Motors, Bearsden, in January 1997. On 16 July 1998 the first defender reported to the police that it had been stolen from the driveway of his home. The police noted gouge marks on the driveway, consistent with the vehicle being removed by a low-loader vehicle. The first defender reported the loss to his insurers, Norwich Union Insurance Ltd and handed over the registration documents and two sets of keys to the car to them.
[3]On 20 July 1998 the second defender bought the car from a Mr Struthers. It was bearing false registration plates. It was fitted with a Gemini Aquilla alarm. Mr Struthers handed over one key and ring. It did not have a 'fob' which would de-activate the alarm. He provided no documentation, and the sheriff did not reach a conclusion as to the price paid although he held that "the second defender paid to Mr Struthers a sum of money in cash". The second defender had the Gemini alarm removed from the car.
[4]Early in August 1998 the second defender spoke to a friend who was in the motor trade. He told him that he had not received documentation for the subject in medio. The friend made a search using the chassis number of the vehicle which revealed that there was police interest in the car. The second defender contacted the police on receipt of this information.
[5]The vehicle was removed to Brand Street Police Office in Govan. It was seen there by the first defender. Despite the fact that it had certain distinctive characteristics the first defender said that it was not his. Subsequently a detective constable showed the first defender the car key and ring which had been provided to the second defender by Mr Struthers. The first defender identified this as a set of keys which he had held for the vehicle. He subsequently maintained that one of the sets recovered from the insurers had not in fact been handed to them.
[6]In the meantime the same detective constable had interview Mr Struthers. He stated that he had sold the car to the second defender on behalf of a Ronnie Morrison who had recently been sentenced to a period of imprisonment. No such person was traced to any custodial establishment in Scotland.
[7]The fact that he had failed to identify his own car, and the circumstances relating to the keys, led to suspicions on the part of the police that the first defender had been attempting to defraud his insurance company. He was charged by them, but the case was subsequently marked "no proceedings" by the procurator fiscal.
[8]Doubts remained as to ownership of the car and accordingly the present action was raised in name of the Chief Constable. The sheriff made a large number of factual findings, including the following:
"(65)It is not established that the subject in medio was stolen from the home of the first defender on or about 16 July 1998.
(66)It is not established that Mr Struthers attempted to sell or sold the subject in medio to the second defender on the instructions of or on behalf of or with the connivance of the first defender.
(68)Mr John Struthers was aware when he was involved in the sale of the subject in medio to the second defender that lawful title to the subject in medio could not be transferred to the second defender.
(70)In February 1999 Mr Struthers was interviewed by John Lavery, Private Investigator at the Boulevard Hotel near Glasgow. Mr Struthers told Mr Lavery that he had acted as agent for both Mr Morrison and the second defender in respect of the sale of the Porsche motor vehicle Mr Morrison wished to sell. He gave a description of Mr Morrison. He said that he became aware of a problem in respect of the sale and that he discovered that Mr Morrison was David Sharp, 35 Torran Drive, Erskine".
[9]Thereafter the sheriff found in favour of the first defender. As it was not established how Mr Struthers came to be in possession of the subject in medio the sheriff rejected an argument that Mr Struthers was a mercantile agent in possession of goods with ostensible authority to sell them and thus capable of passing on good title in terms of Section 2 of the Factors Act 1889. The sheriff was not satisfied that the second defender purchased the motor vehicle in good faith. Upon the view the first defender was the original owner the sheriff concluded that he had established a better title to the car than the second defender.
[10]For the second defender Mr Livingstone, Solicitor, contended that the sheriff had erred in two respects. First there were errors of approach in relation to the onus of proof and bona fide possession. The second defender had led at the proof for the purpose of demonstrating that he had possession of the car; it did not follow that there was any burden of proof on him, and more specifically there was no requirement on him to establish "bona fide" possession. There was a presumption that the possessor of a moveable was the proprietor of it (Dickson, Evidence (3rd ed) para 149). That presumption had been described as a "strong" one, Wilkinson, The Scottish Law of Evidence p 198. To overcome the presumption it had to be shown not only that the property once belonged to the person seeking to recover it but that his possession terminated in such a way that the subsequent possessor could not have acquired a right of property. There was a specific finding that it was not established that the subject in medio had been stolen. That being so the first defender had not shown that he came to lose possession in a manner whereby he was not deprived of title. Reference was made to Prangnell O'Neill v Skivington, 1984 SLT 282 in particular passages in the opinion of Lord Hunter at p 284 and in the opinion of Lord Dunpark at p 291. That approach did not depend on any question of good faith. It was perfectly possible to buy goods in suspicious circumstances but nevertheless to acquire a good title. That depended on whether the person purporting to pass title was in a position to do so, a question which was a matter of fact not faith. The second defender had shown not only that he possessed the car but that he had purchased it. Whilst Mr Struthers' actings may have "reeked of suspicion" it did not follow that he could not pass on title to the car. If the first defender was perpetrating a fraud on his insurance company that did not affect the ability of the second defender to acquire a good title.
[11]Mr Livingstone further argued that the sheriff was not entitled to make finding in fact (68). A finding that Mr Struthers was aware that lawful title to the car could not be passed to the second defender ran contrary to the other findings in the Note. The car might have been stolen, and Mr Struthers might or might not have known of that. Equally, it might have departed from the possession of the first defender in some other way whereby title could be passed on. There was accordingly no basis for making finding in fact (68) which might be interpreted as standing in the way of the second defender's claim.
[12]On behalf of the first defender Mr Wilson, Solicitor, maintained that the sheriff was correct in holding that good faith was essential to the second defender's right to succeed. Walker on Evidence para 3.10.1 set out the underlying maxim; in pari quasa melior est conditio possidentis, that is, in an equal case the possessor is in the better position. The sheriff had referred to the authorities dealt within the footnote to that paragraph and had properly concluded that the presumption applied to bona fide possession. It was clear from what was said in Prangnell O'Neill v Skivington at p 284 that the strength of the presumption varied according to the circumstances and good faith was relevant to that. The position was that Mr Struthers had passed on to the second defender a vehicle bearing a false number plate and without proper documentation in the form of a registration document and test certificate. There was only one key without the appropriate key fob to operate the alarm and the second defender had caused the alarm to be removed from the car. In that situation the sheriff was entitled to infer that Struthers could not pass on good title and knew of that, and was also entitled to look at the actings of the second defender and infer that he had not acted in good faith. On the other hand there was little to support the view that the first defender was dishonest. His evidence about the keys could have been a genuine mistake and there was little else to support finding in fact (65) whereby the sheriff held that it was "not established" that the subject in medio was stolen. That finding did not preclude the car having been stolen. The overall result was that this was not an "equal case" and the presumption arising from possession did not apply.
[13]I have some doubts as to whether it was necessary for the sheriff to make finding in fact (68). The question of Mr Struthers "awareness" as to the ability to pass on title to the car does not directly affect the issue of whether he could, as a matter of law, do so. The finding is not a critical one for either party. Nevertheless I feel compelled to uphold Mr Livingstone's submission in respect of it. Having held that it was not established that the car had been stolen from the home of the first defender I do not consider that it was consistent to make a factual finding which implies that Mr Struthers was unable to pass on title to it. If the car was not stolen it leaves open the possibility that it came into the possession of Struthers lawfully. That would be the position if it had been the intention of the first defender to perpetrate a fraud on his insurance company; the unlawful act is the false pretence to the insurance company, not disposal of the car. In these circumstances finding in fact (68) falls, in my view to be deleted.
[14]On the central issue it appears to me that having found neither party to be particularly convincing it is difficult to view this as anything other than an "equal case" and it accordingly appears to me that the well established presumption which arises from the possession of moveable property must be held to apply. Moreover, I am unable to agree with the sheriff that it was necessary for the second defender to establish bona fide possession or that the presumption only applies to possession which can be so categorised. The sheriff referred to Erskine 2.1.24 and 25 and quoted a passage which concludes with the sentence:
"No person, though he should possess optima fide is entitled to retain a subject not his own after the true owner appears and makes good his claim to it; for the strongest bona fides must give way to truth".
That sentence supports the view advanced by Mr Livingstone that what was critical is fact not faith. It makes it plain that a possessor in good faith can never acquire a title if it is shown that in fact the property belongs to another, but is not authority for the view that someone who acquires property in suspicious circumstances cannot become the owner.
[15]The nature of the presumption is not in doubt, nor is the manner in which it may be rebutted. "In overcoming the presumption by proving the property, it must be shown not only that the moveables once belonged to the person seeking to recover them, but that his possession terminated in such a way that the subsequent possessor could not have acquired a right of property in them": Dickson on Evidence (3rd ed) para 150. In the present case the first defender has shown that the car once belonged to him. He has, however, failed to prove that the property was stolen and in consequence has not established that his possession terminated in such a way that the second defender could not have acquired a right of ownership. In these circumstances I must allow the appeal and allow the claim of the second defender.
[16]In accordance with the wishes of parties all questions of expenses are reserved.