NSW Police v Hick; Horton v NSW Police [2017] NSWLC 8

Local Court New South Wales

Medium Neutral Citation: NSW Police v Hick; Horton v NSW Police [2017] NSWLC 8 Hearing dates: 13 January 2017 Date of orders: 21 April 2017 Decision date: 21 April 2017 Jurisdiction: Civil Before: Dakin LCM Decision: The application by NSW Police is granted. The application by Luke James Horton is dismissed. Catchwords: APPLICATION PROCEEDINGS – disposal of property seized by police - competing applications for disposal of motor vehicle – s 219, Law Enforcement (Powers and Responsibilities) Act 2002 Legislation Cited: Law Enforcement (Powers and Responsibilities) 2002, ss 218, 219 Surveillance Devices Act 2007 Cases Cited: Carolan v State of New South Wales and Anor [2013] NSWSC 1593 Commissioner of Police v Pecover [2014] NSW 1427 Fantakis v Commissioner of Police [2013] NSWSC 685 Jones v Dunkel (1959) 101 CLR 298 RHG Mortgage Ltd v Ianni [2015] NSWCA 56 Texts Cited: J W Carter, Carter on Contract, Lexis Nexis (6th ed, 2013) Category: Principal judgment Parties: New South Wales Police (first applicant/second respondent) Luke James Horton (second applicant) Raymond Hick (first respondent) Representation: Sgt Lockett (police prosecutor) Second applicant in person First respondent in person File Number(s): 2016/00319834; 2016/00309015

Judgment 1. Both applications are made under section 219 of the Law Enforcement (Powers and Responsibilities) Act 2002, hereinafter referred to as LEPRA. Mr Horton seeks return of an unregistered 1948 model FX Holden sedan ('the car') which he says he is lawfully entitled to as the owner. New South Wales Police oppose his application and seek orders that the car be delivered up to Raymond Hick who is the brother of Gary Hick. The application by police was filed first in time. 2. Mr Horton's application is said to be made under sections 154F, 188 and 527C of the Crimes Act 1900. It is implicit in the way this litigation has been conducted that Mr Horton has no basis to bring criminal charges under any or all of those sections against NSW Police. Rather, his application is in effect a response (in opposition) to the orders sought by NSW Police. 3. Section 218 of LEPRA provides that a police officer who seizes property must return the item to the owner or person who had lawful possession at the time it was seized if the officer is satisfied that the item is not required as an exhibit or it is lawful for the person to have possession of the item. 4. In the present case the car was seized by police as a result of Mr Horton's complaint that the car was his property and that it had been stolen. Subsequent investigations led police to conclude that no criminal offence had been committed. Accordingly, retention of the car as an exhibit is not required. However, in the face of the claim brought by Mr Horton, police are not prepared to return the car to either Raymond or Gary Hick pursuant to section 218. Rather, they seek orders under section 219 that the car be returned to Raymond Hick. 5. There is no dispute that the car is in the possession of New South Wales Police and that section 219 of LEPRA applies to both applications. That section has as one of its objects, the protection of police who have property in their possession. The provision is designed to resolve a situation where the police entertain a doubt as to whether the person applying for delivery of the property does in fact have lawful title to the property. [1] 6. Section 219 invests the Local Court with significant powers. These include the power to adjust rights to property as between those who appear to be lawfully entitled to that property; to extinguish either wholly or in part any interest a person may have in property; to order forfeiture of the property to the Crown; to make findings as to ownership of property and a power to make incidental or ancillary orders so as to give effect to the purposes of the statute. [2] These types of powers are ordinarily reserved to superior courts and are usually only available in the exercise of an equitable jurisdiction. No argument has been advanced challenging the jurisdiction of the Local Court to hear and determine either application. 7. A claimant has the onus of establishing to the civil standard lawful entitlement to the property. [3] At issue in this case is whether either NSW Police on behalf of Raymond Hick, or alternatively Mr Horton, can demonstrate lawful entitlement to the car. A finding in favour of one will be determinative of both applications. 8. The facts leading to both applications may be shortly stated. Gary Hick (hereinafter Mr Hick) was the owner of the subject motor car in 2006. He was entitled to exclusive possession. Mr Hick lived in Bundaberg Queensland. Mr Horton was resident in the United States of America. His mother lived in Bundaberg. In November 2005 he travelled to Australia to holiday with his fiancée Denise Lepe Mercado. He and Ms Mercado rented a house in Bundaberg relatively near to Mr Hick's home. 9. In early 2006 Mr Horton approached Mr Hick. It was agreed that Mr Hick would sell the car to Mr Horton for the agreed sum of $10,000. The agreement was wholly oral. The terms of the agreement are in dispute and resolution of the terms of that agreement is central to disposition of the applications before the court. 10. It is Mr Horton's case that the car had great historical significance. He says it was the first Holden vehicle built in Australia and the first to be delivered into Queensland. He described the car as a handmade prototype. At one stage before the hearing commenced he valued the car at $1,000,000. 11. Mr Hick agrees that the car is of some historical significance. He scoffed at the value suggested by Mr Horton. Further, he does not accept the car holds the historical significance asserted by Mr Horton. He understands the car to be the first Holden motor vehicle sold in Bundaberg rather than in Queensland. He acknowledged however that as at 2006 it is remained one of the oldest Holden motor vehicles still in existence in Queensland. He estimates the car is worth about $30,000. 12. Mr Hick says that at the time, Mr Horton told him he could not pay the full purchase price but could pay $3,000. The balance would be paid within a couple of months after Mr Horton returned to the United States and completed setting up his business. Notwithstanding Mr Hick parted with possession of the vehicle, he says it was agreed that he would retain ownership of the vehicle until the balance of the purchase price was paid. 13. Mr Hick says Mr Horton paid him $3,000 in cash. He issued a receipt to Mr Horton but he was unable to locate a copy. He considered the sum of $3,000 could be wasted. To avoid doing so he placed the money in a filing cabinet. He said he preferred to wait until the balance was paid as $10,000 was more capable of being applied to some worthwhile purpose. 14. Mr Horton disputes this version of events. Mr Horton says that the agreement was reached at night and he had in his possession $500 in cash. Mr Hick insisted the purchase price be paid in cash. He says that as agreed, he returned the next day and paid the balance. Mr Hick denied this occurred. Mr Horton did not produce any bank or financial records to demonstrate the source of those funds. Rather, he produced a number of bank records indicating international money transfers in his favour. He says these documents evidence his ready access to large amounts of cash. He said it was his usual practice to deal in cash and indeed he had a large amount of cash in the courtroom during the hearing which he offered to produce to corroborate his assertions. 15. In support of his version of events, Mr Horton produced a handwritten receipt dated 25 January 2006. The receipt is said to evidence acknowledgement by Mr Hick that he received the sum of $500 in part payment for the car. Mr Horton cross-examined Mr Hick about the receipt. Mr Hick denied he issued or signed the receipt. He challenged the authenticity of the document and whilst accepting the signature appeared to look similar to his, he suggested that it could have easily been copied or forged from the receipt he issued to Mr Horton when the sum $3,000 was paid. 16. Mr Horton said that his fiancée was present at the time he reached agreement with Mr Hick, when part payment of $500 was made, and when the receipt was issued. Ms Mercado did not give evidence in these proceedings nor was Mr Hick questioned as to whether she was present at the time. 17. Expert handwriting analysis would have assisted the court's determination of the authenticity of the receipt relied upon by Mr Horton. There is no explanation as to why this evidence was not sought or why Ms Mercado did not give evidence. 18. I accept that some allowance should be made to Mr Horton as he is not legally represented and could not be expected to be familiar with the procedures of the court or of the rules of evidence. However, as the nature of the agreement between he and Mr Hick bears such significance in determination of each application, an inference often referred to as the rule in Jones v Dunkel [4] arises from his failure to call Ms Mercado. The rule operates where there is an unexplained failure by a party to call a witness. In appropriate circumstances, this may lead to an inference that the uncalled witness would not have assisted the party. In RHG Mortgage Ltd v Ianni [5] the New South Wales Court of Appeal reiterated that the circumstances for drawing a Jones v Dunkel inference are found where an uncalled witness is a person presumably able to put the true complexion on the facts relied upon by a party as a ground for any inference favourable to that party. The three conditions to be applied (and which apply in the present cases) were identified by the Court as first, whether the uncalled witness would be expected to be called by one party rather than the other; secondly, whether his or her evidence would elucidate the matter; and finally, whether his or her absence is explained. I am satisfied those prerequisites have been established and an adverse inference should be drawn in respect of Mr Horton's evidence about the terms of the agreement. 19. It was agreed that whilst the car was in Mr Horton's possession he was permitted to clean and polish the car and prepare it for shipping to the United States. It is Mr Hick's position that he was comfortable with the arrangement as the place where Mr Horton initially stored the car was a relatively short distance from where he lived. This permitted him to periodically check the car remained in situ. 20. Mr Horton says that after he paid the balance of the purchase price to Mr Hick he hired a trailer and collected the car from a storage facility in Bundaberg. He says that the storage shed owner was reluctant to release the car as Mr Hick owed him unpaid storage fees. Mr Horton says as a sign of goodwill he agreed to pay the owner $1,000. Whilst this was less than the amount owed by Mr Hick the operator agreed to release the car. Mr Horton said that the storage shed operator told him that he and Mr Hick were friends and this influenced his decision to release the car for less than the amount owing. 21. No evidence was called from the storage shed operator to corroborate Mr Horton's version. However, whilst this deficiency could again ground an adverse inference to the effect that the operator would not support Mr Horton's version of events, Mr Hick agreed in cross examination that storage fees were owing at the time the vehicle was sold. He said it was much less than $1,000 although he did not know the exact sum nor could he produce any supporting documentation. 22. After Mr Horton returned to the United States he sent three Western Union money transfers to Mr Hick which he says were to discharge his goodwill gesture. It therefore follows that the issue of unpaid storage fees bears some significance in the determination of each application. Mr Hicks says that Mr Horton reneged on the agreement and did not pay the balance of the purchase price. He says there was never any discussion with Mr Horton about unpaid storage fees or that any issue had been raised with him by the storage shed owner about unpaid fees. 23. Mr Horton explained that he was required to prepare a number of documents and attend to other regulatory requirements which included having the car inspected by the Queensland Department of Transport at Bundaberg, before the car could be shipped to the United States. In his statement to police he said that he attended to these arrangements on 27 January 2006. However, in his evidence he says he did so on 26 January 2006 being the day after he paid the deposit of $500. It was pointed out to Mr Horton that it was likely 26 January was a public holiday and that government departments such as the Department of Transport were unlikely to be open for business. He said that the date was probably a typo or mistake. 24. Given these events occurred more than 10 years ago the explanation of a typographical error or simple mistake is plausible save for one issue. Mr Horton does not dispute that he wrote the note on the copy of the receipt he relies upon. I accept the reference to the year 2005 is an error and that the reference to pm is likely to be incorrect as the writing commences "To night [sic] is the last night for the old Girl in her storage…" These inconsistencies bear some significance because of the competing versions provided by Mr Hick and Mr Horton. The use of the word "To night" [sic] in that temporal context and the geographic nexus to the where the car is located at that time the note is written casts doubt not only on the authenticity of the receipt relied upon by Mr Horton but also on his ability to accurately recall events. 25. This is particularly so as it is Mr Hick's case that he never received full payment. He says that inexplicably in late 2006 and early in 2007 he received the three Western Union money orders from Mr Horton. Mr Hick said that he was unable to cash the money orders as there was no Western Union outlet in Bundaberg. Mr Hick retained the envelopes the money orders arrived in. They serve to identify the post mark, date stamp and the sender's details. A note was enclosed with one of the first of those money orders which read: - "Hey Mr Hick, well things are doin ok. Hopefully I might still open my hot rod shop up at the end of Dec. I have a building and I'm just waiting for the owner to give me the ok after Christmas. Anyway more money on the way. Luke." 26. Mr Horton acknowledges that he sent these money orders and that he wrote the note. He says that the money orders were for unpaid storage shed fees. He accepts the total value of these money orders in Australian dollars was $922.85. He says that it was his intention to forward $1,000. He expected the lesser amount was the result of Western Union deducting fees plus currency conversion charges. 27. Mr Hick says that there was not ever any variation to the original agreement. He never agreed to payment of the balance by instalment. Mr Horton never advised him that the money orders were for unpaid storage shed fees or that they were to be remitted to the storage shed owner. Further, there was never any inquiry by Mr Horton before making these payments as to whether or not any storage fees remained owing by Mr Hick. It is also significant that these payments were not forwarded to Mr Hick until 11 months after the agreement. 28. On balance I find Mr Horton's explanation of these three payments implausible. These payments were made at least 11 months after Mr Horton agreed to make the goodwill payment to the storage shed owner. Absent any instructions or request by Mr Horton that Mr Hick remit the payments to the storage shed operator or indeed what the payments were for, I reject his evidence on this aspect. 29. Mr Hick said he wrote to Mr Horton at the address in California as shown in the sender details on the envelopes containing the money orders. His intention was to advise Mr Horton that he unable to negotiate the money orders. His letter was returned to him as unclaimed mail. 30. Mr Hick's evidence indicates he acquiesced in Mr Horton's failure to comply with the terms of the agreement. I accept his evidence establishes that he accepted the money orders as part payment of the balance of the purchase price and not as reimbursement of monies owed to the storage shed owner. 31. Thereafter Mr Hick described making numerous inquiries to locate and contact Mr Horton. These proved fruitless. Having had no further contact from Mr Horton and having received no further payments he considered Mr Horton had repudiated the agreement. He considered he was entitled to recover the car from where it was now stored at the Bundaberg home of Mr Horton's mother. Mr Hick said he was aware the car had been moved to this location by Mr Horton prior to his departure for the United States. He did not raise any issue nor did he become concerned as the vehicle was visible from the street. 32. The expression 'repudiatory breach' has been used to describe any breach which gives rise to a right to terminate the performance of a contract, on the basis that any such breach may be treated by the promisee as a repudiation of the whole contract. [6] 33. Given that on either version part payment of the purchase price had been made, it follows that Mr Hick's view that the contract had been repudiated by Mr Horton is likely to have no basis in law. However it is clear that he considered Mr Horton had failed to perform his obligations under the agreement. What remedies were available to him in those circumstances is arguable. However, as neither application has been conducted on the basis of a contractual dispute, it is not necessary to decide that issue. 34. After making contact with Mr Horton's mother Ursula Horton, Mr Hick attended her residence on 5 August 2007 and loaded the car onto a trailer. There is no evidence as to whether or not the car was locked or as to how he gained entry. As he could not locate Mr Horton, he handed her the sum of $3,000 and the three Western Union Money orders. She agreed to forward them to her son. A copy of the receipt he says she issued to him is in evidence before me. 35. Ms Horton was not called to give evidence. However, Mr Horton asserts that late at night sometime in February 2007 he received a telephone call at his home in the United States. The unidentified caller said, "Your car's gone." It is Mr Horton's position that Mr Hick acted dishonestly in taking possession of the car two months after the sale agreement. However, given the date on the receipt said to have been issued by Ursula Horton is in August, I prefer Mr Hick's evidence to that of Mr Horton as to when the car was removed from Ms Horton's home. 36. Mr Horton said he attempted to contact his mother without success the next morning. He said he contacted Queensland Police to report the theft of the car however they refused to accept the report as he was outside Australia. He said he attempted to telephone his mother at her address in Bundaberg over the next two years. He was unable to make any contact with her. He continued to attempt to report the theft to Queensland Police. He said police told him they could not take a report of a stolen vehicle from a person who was not in Australia. 37. Mr Hick said that shortly after collecting the vehicle he received three telephone calls from Mr Horton however he could not recall the dates. During the first of these calls, he said he told Mr Horton that he "accepted his repudiation of the agreement" and confirmed he had retaken possession of the car. He did not hear from Mr Horton again until he received further telephone calls from Mr Horton around April 2013. He said that during one of these three telephone calls Mr Horton inquired whether he still had the car and if so what he would now have to pay to buy the vehicle. He said he told Mr Horton that he thought it was probably worth more than the original price of $10,000 however the vehicle was no longer for sale. 38. In the final telephone call he said Mr Horton became abusive and alleged that he had stolen the vehicle. 39. After he returned to Australia in 2013 Mr Horton commenced proceedings against Mr Hick and Ms Horton (now known as Ursula Pizzoferrato after her marriage) in the District Court of Queensland. He sought return of the car or alternatively damages in the sum of $255,000, which was pleaded as being reasonable compensation for the vehicle, car parts and original documents said to be in the car when Mr Hick retook possession and restoration work he had undertaken. It is not clear how Mr Horton calculated this value. 40. Both Mr Hick and Ms Horton filed defences to Mr Horton's proceedings. Mr Horton did not take any further action to progress the litigation. He explained that he had terminated the retainer with the solicitors acting on his behalf as, amongst other things, they failed to communicate with him. He conceded in cross-examination that leave of the court which was now required before he could reinstitute these proceedings. 41. I find this explanation implausible first, noting Mr Horton's view that the car is extremely valuable; secondly, noting his assertion that Mr Hick apparently realised after selling the car that he had entered into an improvident transaction as the car was worth a lot more than $10,000; and thirdly, because of the asserted unwillingness of Queensland Police to pursue his allegations of criminal misconduct on the part of Mr Hick. 42. On 31 October 2013 Queensland Police records indicate that they accepted Mr Horton's report that the car had been stolen. He says, however, that police were now reluctant to investigate the matter because of the amount of time that had passed. Ultimately, police did investigate the matter and spoke with Mr Hick and Ms Pizzoferrato. As result of those inquiries they formed the view that the car had not been stolen and that the issue was civil rather than criminal. Police records, which were tendered, indicate a summary of their discussion with Ms Pizzoferrato in which she says she deposited the sum of $3,000 as given to her by Mr Hick to her son's bank account. Mr Horton denies receipt of this money. 43. Mr Horton said that he and his mother were estranged. After his return to Australia in 2013 he met with her and ultimately progress towards reconciliation of their relationship failed. A final Protection Order was made by the Ipswich Magistrates Court under the Domestic and Family Violence Protection Act 2012 (Qld) naming Ms Pizzoferrato as the respondent and Mr Horton as the aggrieved. He said there has been no contact with his mother since. 44. Mr Horton said he remained in Australia and continued to try to locate the car. Eventually he was told by another vintage car enthusiast that a car matching the description of the Holden was stored at a rural property at Bangalow New South Wales. 45. He reported the theft of the vehicle to NSW Police in 2016. Ultimately police attended the home of Raymond Hick at an address in Bangalow and took the car into possession. 46. I find that reporting the vehicle as stolen to NSW Police adversely affects Mr Horton's credit for the following reasons. First, he had been told by Queensland Police in 2014 that their investigation concluded that no criminal offence had been committed and the matter was a civil dispute between he and Mr Hick. He failed to advise NSW Police of this fact. Secondly, Mr Horton appears to have accepted the conclusions or at that stage indications of Queensland Police that it was a civil rather than criminal matter as he commenced civil recovery proceedings in the District Court of Queensland. Finally, because of his behaviour when he met with Detective Senior Constable Sheehan at the Byron Bay Police Station on 13 August 2016. He indicated to the detective that he intended to record their conversation. Detective Sheehan clearly stated his objection. He made it clear to Mr Horton that he had no objection to Ms Mercado being a party to their conversation by telephone link up as she was overseas. Without the detective's knowledge or consent, Mr Horton used a second mobile telephone which he hid out of sight to record their conversation. 47. At the commencement of the hearing of these applications, I found that in recording the conversation without the consent of Detective Sheehan, Mr Horton had deliberately contravened the Surveillance Devices Act 2007. Accordingly, Mr Horton's application to admit the recording into evidence was refused. As part of the reasoning process and leaving aside questions of relevance, after hearing the recording, I rejected Mr Horton's explanation that it was not clear to him that Detective Sheehan did not consent to their conversation being recorded. In my view the words used by the detective to convey that message could not have been clearer. 48. Mr Horton has filed an affidavit in support of his application and in defence of the orders sought by police. He has annexed 136 pages to his affidavit. Making allowance for the fact that he is not legally represented, I find that most if not all of those annexures are not relevant either directly or indirectly to a fact in issue. Many of the annexures are documents generated by Mr Horton after he took possession of the car in 2006. For the most part they are self-serving and do not provide any reliable or relevant evidence upon which the court could act. 49. I had the opportunity to assess Gary Hick as he gave evidence. I accept that he was doing his best to tell the truth. He impressed as a straight forward and reliable witness. Given that about 6 years elapsed between Mr Horton becoming aware the car had been removed from his mother's house before he challenged Mr Hick as the alleged thief, I reject his assertion that Mr Hick secreted the car at his brother's home in northern New South Wales so as to thwart his endeavours to locate it. Rather, I accept Mr Hick's evidence that he was not in a financial position to fund the restoration of the car but that his brother Raymond could do so. I accept it was for that and no other reason the car was moved to his brother's address. 50. In the absence of expert valuation evidence, I accept that the value of the car is not likely to exceed $30,000. 51. I do not find Mr Horton to be a credible witness or that his account is reliable. I am satisfied that the agreement for the sale of the car is as described by Mr Hick. I am satisfied that he is the owner of the car and entitled to possession. 52. Mr Horton's application is dismissed. Pursuant to sections 219(1)(a) and 219(2)(b) I order Gary Hick to be the owner of the car and the person entitled to possession. I order that NSW Police deliver the car to him or as he may direct. Mr Hick is to bear the costs of and incidental to delivery. 53. Pursuant to section 219(2)(c) I find and order that Mr Horton is liable for the payment of expenses in the amount of $1,310 incurred by NSW Police in keeping the car in police custody. 28 days is allowed to pay that amount. Magistrate M G Dakin Byron Bay Local Court 21 April 2017