Law of Tort Tutorial weeks 6-7 Question One Presented by: Joseph ( ) Sing( )

Question One Facts Facts Issues Issues Rules Rules Applications Applications Conclusion Conclusion

Facts B&C Co. Ltd ---- Car --  A (hire-purchase) B&C Co. Ltd ---- Car --  A (hire-purchase) A --- $6000 monthly--  B&C Co. Ltd. (2 years) A --- $6000 monthly--  B&C Co. Ltd. (2 years) A uses illegal method to make him become registered car owner A uses illegal method to make him become registered car owner A -----car----  D, an auctioneer A -----car----  D, an auctioneer D-----car--  X (public auction) D-----car--  X (public auction)

Issues Can B&C Co. Ltd. sue A, if so, what is the remedies available? Can B&C Co. Ltd. sue A, if so, what is the remedies available? Can B&C Co. Ltd. sue D, if so, what is the remedies available? Can B&C Co. Ltd. sue D, if so, what is the remedies available? Does X get the title of the car? Does X get the title of the car?

Rules Trespass to Chattels Trespass to Chattels Conversion Conversion Sale of Goods Ordinance s24 Sale of Goods Ordinance s24 Principle of Jus Tertii Principle of Jus Tertii

Trespass to Chattels unlawful interference with the possession of a chattel by P. unlawful interference with the possession of a chattel by P. direct and intentional act direct and intentional act P have possession or a right to possession P have possession or a right to possession

Conversion intentional act intentional act Someone’s act which is the owner can do only, and seriously inconsistent the possession of goods Someone’s act which is the owner can do only, and seriously inconsistent the possession of goods D knows the goods do not belong to P or intention not to challenge P’s right is not relevant. D knows the goods do not belong to P or intention not to challenge P’s right is not relevant. Note that: The difference between trespass to chattels and conversion is: Note that: The difference between trespass to chattels and conversion is: Trespass: not serious interference (liable) Trespass: not serious interference (liable) Conversion: ONLY Serious interference (liable) Conversion: ONLY Serious interference (liable)

Principle of Jus Tertii Definition: D claims that he has a better title or is acting for 3 rd party who has a better title. Definition: D claims that he has a better title or is acting for 3 rd party who has a better title. P has possession of the chattel and D does not have a better title, D cannot plead jus tertii. P has possession of the chattel and D does not have a better title, D cannot plead jus tertii. When P was not in possession of the chattel but relied on his right to possession, D can plead jus tertii. When P was not in possession of the chattel but relied on his right to possession, D can plead jus tertii.

Cases Penfolds Wine v Elliott (1947) 74 CLR 204 (supra) Penfolds Wine v Elliott (1947) 74 CLR 204 (supra) R.H. Willis and Son v British Car Auctions Ltd (1978) R.H. Willis and Son v British Car Auctions Ltd (1978) Leake v Loveday (1842) 4 Man & F 972 Leake v Loveday (1842) 4 Man & F 972

Penfolds Wine v Elliott (1947) P sold wines bottle with words “This bottle is the property of Penfolds Wine Ltd” P sold wines bottle with words “This bottle is the property of Penfolds Wine Ltd” The bottles could not be used for storing any other product The bottles could not be used for storing any other product D brought two empty bottles for own wine and sold D brought two empty bottles for own wine and sold Held: D had committed conversion. Held: D had committed conversion. D used bottles for his own trade D used bottles for his own trade D Violated the P’s title to use the bottle D Violated the P’s title to use the bottle

Applications: A’s Remedies - Trespass to chattel: intentionally and directly interference on the possession of the car - Conversion: A changed the ownership registration, gave the car to the D for disposal, A committed an act of conversion A changed the ownership registration, gave the car to the D for disposal, A committed an act of conversion A breached the HP contract A breached the HP contract HP contract was void and B&C Co. had the right to immediate possession HP contract was void and B&C Co. had the right to immediate possession In the law of conversion, A gave the Car to D without the consent of B&C Co, will liable in conversion In the law of conversion, A gave the Car to D without the consent of B&C Co, will liable in conversion A was liable the unpaid purchase price to BC Ltd. A was liable the unpaid purchase price to BC Ltd.

R.H. Willis and Son v British Car Auctions Ltd (1978) P, a motor car dealers, sold a car on hire-purchase terms to C (Mr. Croucher) P, a motor car dealers, sold a car on hire-purchase terms to C (Mr. Croucher) In default of the agreement, C entered the car in car auction run by D (auctioneers) In default of the agreement, C entered the car in car auction run by D (auctioneers) In the auction, the car was sold to the highest bidder In the auction, the car was sold to the highest bidder On knowing that the car had been sold, P bought an action against the auctioneers for conversion On knowing that the car had been sold, P bought an action against the auctioneers for conversion Held: the auctioneers were liable in conversion to the true owner since they had sold a chattel to which they did not have any good title Held: the auctioneers were liable in conversion to the true owner since they had sold a chattel to which they did not have any good title

Applications: D’s remedies Conversion: When A hands over the car D for sale in the public auction. In law, the receipt by D of B&C Co.’s chattel amounts to conversion if D’s act is inconsistent with B&C Co.’s title to the good. When A hands over the car D for sale in the public auction. In law, the receipt by D of B&C Co.’s chattel amounts to conversion if D’s act is inconsistent with B&C Co.’s title to the good. On this basis, D receiving goods for sale to X may render him liable in conversion even if he innocently effects the sales because his act is inconsistent with B&C Co.’s title. On this basis, D receiving goods for sale to X may render him liable in conversion even if he innocently effects the sales because his act is inconsistent with B&C Co.’s title.

Sale of Goods Ordinance s24 Where goods are openly sold in a shop or market in Hong Kong, in the ordinary course of the business of such shop or market, the buyer acquires a good title to the goods, provided he buys them in good faith and without notice of any defect or want of title on the part of the seller. Where goods are openly sold in a shop or market in Hong Kong, in the ordinary course of the business of such shop or market, the buyer acquires a good title to the goods, provided he buys them in good faith and without notice of any defect or want of title on the part of the seller.

Leake v Loveday (1842) It was held that where P was not in possession at the time of the conversion but relied on his right to possession, jus tertii could be pleaded by the defendant. It was held that where P was not in possession at the time of the conversion but relied on his right to possession, jus tertii could be pleaded by the defendant.

Applications: X’s Title If B&C Co. will take legal action against X for conversion. X can plead jus tertii as defence If B&C Co. will take legal action against X for conversion. X can plead jus tertii as defence As a buyer in market overt, X may also claim that he has bought the car in good faith and without knowledge of the defeat in the seller’s title As a buyer in market overt, X may also claim that he has bought the car in good faith and without knowledge of the defeat in the seller’s title

Conclusion B&C Co. may sue A for Trespass to chattels The remedies: Damage The remedies: Damage B&C Co. may sue both A and D for conversion The remedies: Damages The remedies: Damages -Both A and D are liable to pay the outstanding balance due from -Both A and D are liable to pay the outstanding balance due from B&C Co. ($6000*18=$108000) B&C Co. ($6000*18=$108000) X’s title to the car He may get the title as he may plead that he buys the car in the market overt, for bona fide value and without knowledge of defeat in title He may get the title as he may plead that he buys the car in the market overt, for bona fide value and without knowledge of defeat in title