Russell v Wilson [1923] HCA 60; (1923) 33 CLR 538 (13 December 1923)

On 6th May 1921 the appellant, who is a police officer, purporting to act under authority conferred on him by a search warrant issued under sec. 40 of the Gaming and Betting Act 1912 N.S.W. (No. 25 of 1912) entered the premises of the respondent and seized certain property including money and valuable securities. On 8th June 1921 the respondent was convicted of an offence under sec. 42 of the Act. He appealed to Quarter Sessions against this conviction, and on 25th August 1921 his appeal was dismissed and the conviction affirmed. Part of the money and valuable securities seized by the appellant had been received by the respondent in connection with the sweep business for carrying on which he was convicted. No order for forfeiture was made under sec. 44 of the Act. Upon the conviction of the respondent the property which had been seized was returned to the police and remained thereafter in the possession of the appellant. After the appeal had been dismissed the respondent on 1st September 1921 demanded the return of the money and documents, and, this demand not having been complied with, on 16th November he commenced an action in the Supreme Court for detinue. At the trial of the action the jury was dispensed with and Gordon J. gave judgment for the respondent for £375 14s. 1d. or the return of the goods with one shilling for the detention. The Supreme Court in Full Court dismissed a motion for a new trial; and this appeal is against that order. Both in the Supreme Court and in this Court it was assumed that the seizure by the appellant was lawful, and I shall deal with the case on that footing.

Mr. Piddington for the appellant argued that as the goods were lawfully taken out of the possession of the respondent he must establish his title as owner in order to succeed in the action. In my opinion, the respondent has shown title as owner. Apart from the provisions of the Gaming and Betting Act it could not be denied that the property in the money, cheques, &c., sent to the respondent in connection with the sweep passed to him, and in my opinion there is nothing in the Act which prevents the property from passing. On the contrary, sec. 48 seems to assume that the property would pass to the recipient of the money or valuable thing.

An alternative argument was founded on sec. 58 of the Act, which provides that no action shall be brought for anything done or omitted to be done in pursuance of the Act unless commenced within three months next after the act or omission complained of. Assuming the seizure by the appellant to have been lawful, it is clear that the respondent had no right to recover the goods seized until 25th August 1921, when his appeal was dismissed, and the action was brought within three months next after that date.

The material facts are succinctly stated in the judgment of the learned primary Judge, Gordon J., as follows:—"On 6th May 1921 a search warrant was issued under the provisions of sec. 40 of the Act No. 25 of 1912 in respect of premises occupied by the plaintiff. That section gives power, after the issue of that search warrant, to the person entrusted with the execution of the warrant, to enter into the premises described, to bring before any two justices of the peace all persons found there, and to seize all moneys, coin, notes, cheques, IOU's, or other writings for securing the payment of money, and all lists, cards or other documents relating to racing or betting found in such house, room, office or place. Under the authority conferred on him by that warrant and section of the Act the defendant, who is a police officer and was entrusted with the execution of that warrant, entered the premises. He then under that authority arrested the plaintiff and took possession of certain property including the property in question. The plaintiff was afterwards brought up before the Police Court, charged with an offence under sec. 42 of the Act and convicted, the date of that conviction being 8th June 1921. The plaintiff appealed from that conviction; and the appeal came on for hearing on 25th August 1921 before the Quarter Sessions, and was dismissed. The conviction, therefore, was then affirmed. It is admitted that no other charge was pending against him beyond the one on which the plaintiff was charged and convicted. When the Magistrate convicted the plaintiff, as he did, he might have made an order under sec. 44 that all that money and property found in the plaintiff's possession on those premises should be forfeited or destroyed. He made no such order. ... I am satisfied as a fact that after the dismissal of the appeal to Quarter Sessions there was a demand for and a refusal by the defendant to return those goods so found on the plaintiff's premises. ... The property taken possession of under the provisions of the Act to which I have referred and held by the defendant at the present time consisted of certain bank-notes, certain cash, certain cheques and certain postal notes. Certain of the bank-notes, amounting to £240, were in a small kit-bag together with other articles to which it is unnecessary to refer. As far as the £240 in that kit-bag were concerned, it is not—and could not—be disputed that it was money derived from a legitimate source; that is, that it is the proceeds of the sale by the plaintiff of property of his to Mr. Gardiner and was the money paid to him by the purchaser for that property. ... In another kit-bag there were cash, bank-notes, cheques, postal notes and other documents. With regard to £10 of that, that also represented the purchase-money paid for this property, and, with regard to one cheque for £8 10s., that was proved affirmatively to be moneys which had been obtained by the plaintiff altogether independent of the sweep business which he was promoting. It was money which he earned in carrying on his legitimate business. Consequently, as far as the £250 and the cheque for £8 10s. are concerned, the plaintiff has proved affirmatively a perfectly good, legitimate title. Supposing there was a demand and refusal prior to action brought, as I have held there was, it is not denied that the plaintiff is entitled to a verdict for the £250 and the £8 10s. cheque. As far as the balance of the property sued for in this action is concerned—cheques, cash and securities—it is admitted by the plaintiff that he cannot say whether any or what portion of that balance belongs to his legitimate business; he cannot say whether any or what portion belongs to his wrongful business, that is, the sweep he was promoting. He says he mixed everything up together, and therefore it is impossible for him to say whether those securities and the cash were obtained by him in the course of carrying on the sweep business, or whether they were obtained by him in carrying on his legitimate business; and I will assume that the whole of them were obtained by him in carrying on the illegitimate business, that is, the promotion of the sweep." The date of the demand and refusal referred to by Gordon J. was a few days before 13th October 1921. The writ in this action was issued on 16th November 1921.

It is unnecessary to say anything as to the property seized except as to the portion obtained in carrying on the sweep business. The contention put forward for the appellant as to that was that the respondent must fail, because (1) the property having been in fact received by him in contravention of secs. 42, 44 and 45 of the Gaming and Betting Act 1912, the law, both by virtue of the common law and by force of secs. 48 of the Act, refuses to recognize him as the true and absolute owner of the property; (2) inasmuch as his actual possession was lawfully terminated on 6th May and never in fact renewed, he could not succeed by reason of possession only. In other words, the appellant, having once obtained possession rightfully, can never be considered a wrongdoer. We must confess we should feel greatly pressed by the first point if it were essential. The cases of Cope v. Rowlands[1], Whiteman v. Sadler[2], Bridger v. Savage[3] and Gordon v. Chief Commissioner of Metropolitan Police[4] are, we think, formidable authorities in support of the appellant's contention. Nor do we feel convinced that sub-sec. 3 of sec. 44—the forfeiture provision—settles the matter. The jurisdiction to forfeit extends to all moneys, &c., "found in such house, room, office, or place," and therefore to such property as admittedly belonged to him, as for instance, the £250 and £8 10s. cheque in this case; and even to the property of other persons. Sec. 48, so far as it goes, assists the contention. However, it is not in our view necessary to express any definite opinion on the first point, as we are clearly of opinion that the second point cannot be sustained. Immediately before the seizure on 6th May 1921, Wilson was in actual possession of all the property seized, which comprised the proceeds of the forbidden transactions. But he was possessed of that property as for himself by the actual consent of the original, and, we shall for this purpose assume, the continuing, absolute owners of the property. That is to say, he had possession of the property, not as servant or agent of another, but as in his own right subject to any right of the absolute owners to recover it whenever they so desired. Had there been no intervention of the police, his possession would have continued unless the absolute owners had recovered the property from him, either upon simple demand or by action. They have not intervened, and the matter is left to a contest between Wilson and the police. We interpose one observation: that the contest does not involve any reliance by him on any illegal transaction. He starts with actual possession as being the owner of the property. It is true his possession was broken. But it is of the essence of the matter to inquire first what right his possession in the circumstances conferred, and next what the breaking of it involved with regard to that right. Possession, in the relevant sense, is not merely evidence of absolute title: it confers a title of its own, which is sometimes called a "possessory title." This possessory title is as good as the absolute title as against, it is usually said, every person except the absolute owner. As to real property, Cockburn C.J. said in Asher v. Whitlock[5]:—"All the old law on the doctrine of disseisin was founded on the principle that the disseisor's title was good against all but the disseisee. It is too clear to admit of doubt, that if the devisor had been turned out of possession he could have maintained ejectment. What is the position of the devisee? There can be no doubt that a man has a right to devise that estate, which the law gives him against all the world but the true owner." This is affirmed by the Privy Council in Perry v. Clissold[6]. So as to chattels. In Glenwood Lumber Co. v. Phillips[7] Lord Davey quoted from Jeffries v. Great Western Railway Co.[8] the words of Lord Campbell, who said: "I am of opinion that the law is that a person possessed of goods as his property has a good title as against every stranger, and that one who takes them from him having no title in himself is a wrongdoer, and cannot defend himself by showing that there was title in some third person, for against a wrongdoer possession is title." Lord Davey added some words of the Master of the Rolls in The Winkfield[9], namely: "Therefore it is not open to the defendant, being a wrongdoer, to inquire into the nature or limitation of the possessor's right, and unless it is competent for him to do so the question of his relation to, or liability towards, the true owner cannot come into the discussion at all, and therefore, as between those two parties, full damages have to be paid without any further inquiry." In the later case of Eastern Construction Co. v. National Trust Co.[10] Lord Atkinson, delivering the judgment of the Privy Council (Lords Atkinson, Moulton and Parker), also referred to the question. He quoted Lord Campbell's observation that as "against a wrongdoer possession is title." He quoted Armory v. Delamirie[11] as deciding the finder has "such a property as will enable him to keep it against all but the rightful owner," and reaffirmed Glenwood Lumber Co. v. Phillips[12]. It is therefore clear that Wilson had by that possession a real "title" to the property, just as lawful and just as powerful as if it were the absolute title, except as against the absolute owner, or any person claiming to hold by virtue of the absolute owner's authority. And it is also clear that a wrongdoer is, according to Lord Campbell, "one who takes them" (the goods) "from him" (the possessor), "having no title in himself." The expression "having no title in himself" must, we think, mean no legal right superior to the title of possessor. If the person taking the goods has a superior right, then to the extent of that superior right, and to that extent only, must the possessory title yield. The absolute owner, his rights being unqualified by any circumstance, would of course be justified in taking and keeping or demanding the goods, because his title is superior. The defendant in Buckley v. Gross[13] had a superior title, because, as Blackburn J. said (Crompton J. being of the same opinion), the plaintiff's possession was such that it became the duty of the constable at common law to deprive him of it permanently and to hold the property for the true owners, the possession of the police henceforth being that of the true owners. The constable's right and duty being to terminate the plaintiff's actual possession finally, when that was done the plaintiff's possessory title vanished, and he necessarily failed. Apply those principles here. What was the superior right of the police? It was created, and therefore limited, by the statute, and did not, as in Buckley's Case[14], exist at common law.

Again, under the statute, the powers of the police are limited by the Act and cannot be extended beyond those limits. Sec. 40 permits the issue of the warrant and authorizes its form and the action under it. Sec. 44 empowers the Court on conviction of the offender to adjudge the forfeiture or destruction of the property found. But what if the offender is acquitted, or if, although he is convicted, the Court refuses to adjudge forfeiture or destruction? Is the property derelict or outlaw? Suppose the original owner declines or fails to take advantage of sec. 48? There is nothing in the Act which introduces the groundwork of Buckley v. Gross[15], namely, that it is the duty of the police to deprive the betting-house keeper permanently of the property—which, unlike the finder in Buckley v. Gross, he has received from, and with the actual knowledge and consent of, the original owners—and to hold that property henceforth for those owners. Whatever protection the Legislature has intended for those owners, it has expressed. They may exercise, or decline to exercise it: Quilibet potest renunciare juri pro se introducto. But their abstinence is not equivalent to an authority to the police to set up their absolute rights and hold on their behalf. The result is that the instant the proceedings authorized by the Act are terminated—that is, finally terminated—the power of seizure and retention by the police are exhausted. That is admitted as to the £250 and the £8 10s. cheque; why not as to the remainder? The police statutory right having expired when the demand was made in October, their superior right no longer existed, and the refusal was that of a person who was depriving the respondent of the property and having, in Lord Campbell's words, "no title in himself," that is, a wrongdoer. The respondent's position reverted to that immediately before the seizure as to both classes of the property seized, and he had an instant right as against the appellant to possession.

The point as to the limitation of action under sec. 58 of the Act obviously cannot arise in view of the date of the demand.

This appeal is from a judgment—a verdict as it is here called—in detinue, for the return to the plaintiff of the things seized or their value, and one shilling for damages.

The police seized the money, cheques, &c., of a sweep promoter, Wilson, on 6th May 1921, as under sec. 40 of the Gaming and Betting Act 1912; on 8th June following Wilson was convicted and fined, but no order was made for forfeiture or destruction of the goods; on 29th June Wilson lodged an appeal to Quarter Sessions from the conviction; the conviction was confirmed by Quarter Sessions on 25th August; the writ in this action was issued on 16th November. So that if the defendant to this action, a sergeant of police, did not wrongfully withhold the goods from the plaintiff during the time between 8th June and 25th August, the action was brought within the three months prescribed by sec. 58.

Now the goods—money, documents and all—were actually put in evidence at the trial. It appears also that except when they were in Court they were kept in a safe at the police station. It is admitted by the sergeant that at some time between the conviction (8th June) and 11th June, the solicitor for Wilson asked the sergeant to return the goods and that the sergeant refused—saying that he would have to hold them for twenty-one days pending appeal. In my opinion this refusal was right—for this reason (if not others) that the goods as exhibits were under the control of the Court, and he was not justified in handing them over without the Court's order until the day for notice of appeal should have passed, and, on notice being given, until the appeal should be determined. After the conviction was confirmed, Wilson's solicitor made application to the Inspector-General of Police to inform him in whose possession the goods were, and the Inspector-General having replied (8th October) that they were in charge of Sergeant Russell, the sergeant was asked to return them, and he refused. Therefore, whether the wrongful act began on 25th August or after 8th October is immaterial: the action was commenced within the three months from the first wrongful act of detention. Up to 8th June, the goods were, as both parties assume, under the control of the police by virtue of the warrant; from 8th June they were under the control of the Court, until 25th August at all events.

If, therefore, the limitation of three months prescribed by sec. 58 applies as from the first wrongful act, the action was brought within the three months; but the words of sec. 58 are peculiar. I am going to assume that the section applies to detention of goods such as in this case; but the point is doubtful. I am strongly inclined to think, however, that under the final words of the section the three months do not begin to run, in a case of "continuation of damage," until "the doing such damage has ceased." Under the ordinary Statute of Limitations the time begins to run in detinue from the moment when the possession of the defendant becomes unlawful (Darby & Bosanquet, 2nd ed., p. 43); but under sec. 58 it would appear to run from the time that the damage has ceased. It would, indeed, be extraordinary that a man should be deprived of his wrongfully detained property if he do not bring his action within three months. But the point has not been argued. It is argued, however, by counsel for the appellant, that the plaintiff cannot by action at law recover the money, &c., which are the fruits of his own offence. This point seems to be answered sufficiently by the case of Gordon v. Chief Commissioner of Metropolitan Police[16]. No doubt the mere receipt of the money for the unlawful purpose referred to in sec. 45 is made an offence by that section; but the act of receiving was over when the police seized. The money received belonged to the offender; it was given to him by subscribers to the gaming transaction; and the offender merely asks the Court to order it to be restored. He does not ask the Court to aid him in the receipt, or to treat the receipt itself as being legal or as not involving the liability to punishment. The right to possession as against outsiders having no title remained in Wilson subject to the temporary right to possession given to the police until conviction, and to the Court until the conviction was affirmed. The position of Wilson in this case is quite different from that of the plaintiff in Buckley v. Gross[17], for in that case an Act of Parliament, operating through an order of a justice, terminated absolutely the possession of the wrongdoer and gave the whole right of property and possession to the purchaser from the police.

Perhaps I ought to say here that the conviction, confirmed as it has been on appeal, is binding, and that this Court cannot, even if invited by any of the parties, question its validity. But it is not to be taken for granted that the receipt of purchase-money for tickets in an ordinary sweepstake is necessarily an offence within sec. 42 (see R. v. Hobbs[18], decided under sec. 1 of the English Act of 1853, from which sec. 42 is copied).

But it is argued for the appellant that, by virtue of sec. 48, the property in these goods, so far as received by Wilson as a deposit, is not in Wilson but in the depositor or subscriber. But the action allowed by sec. 48 does not alter the relations between the betting promoter and others who have withheld the goods from him without title; it deals only with relations between the betting promoter and the person depositing the money or valuable thing. The section is copied from sec. 5 of the English Betting Act 1853; and, as explained by the Court of Appeal in Lennox v. Stoddart[19], it is a purely statutory action, like an action given by a statute for the recovery of a penalty. The person who deposits the money or the valuable thing is, under this purely statutory action, enabled to recover what he has deposited even if the money, &c., have been applied in payment in pursuance of his authority. This position was not even contested in the argument in Vogt v. Mortimer[20].

It is but right to point out that the case has been argued by both parties on the assumption that the warrant authorized the seizure of the money, cheques, &c. The warrant does not give such authority by its actual words—the warrant is, in its actual words, confined to entering into the premises and searching for all instruments of unlawful gaming, and arresting, searching and bringing before a stipendary magistrate the keepers of the premises and the persons there haunting resorting and playing; "and for so doing this shall be your warrant." Sec. 40 (3) provides that "every special warrant shall be in the form contained in the Second Schedule hereto, or to the like effect"; and this warrant contains the words used in the Second Schedule. But it may hereafter, in some other case, be argued that the Second Schedule merely gives a typical form of warrant, not limiting the words that may be contained in it, and that if the authority to seize money, cheques, &c., is to be given, that authority should be expressed in the warrant. As the point has not been argued and as the conviction has been confirmed, I think that we must give our judgment on that basis.

In this case it is admitted that the defendant in fact deprived the plaintiff of the possession of the money and goods the subject matter of the action, and retained possession of them, and refused to deliver them to the plaintiff. But it is said that at all material times the defendant was entitled to possession as against the plaintiff. Immediately before the seizure of the money and goods by the defendant they were, in my opinion, the property of the plaintiff and in his possession. It was assumed by the learned Judge who tried the case and by the parties to the action that the seizure by the defendant under the special warrant was good in law, and in the circumstances I shall make the same assumption. On that assumption I agree that the plaintiff, who had never lost his property in the money and goods, became again entitled to possession of them only when his appeal to the Quarter Sessions was dismissed on 25th August 1921, and that his cause of action arose when the demand for the delivery was made after that date. From what I have said, it follows that even if sec. 58 of the Gaming and Betting Act 1912 in other respects applies to this action it does not bar the plaintiff's claim, because the action was brought within three months next after the act complained of.

The appellant did not contest, in this Court, the right of the respondent to recover the sum of £258 10s., and limited his arguments on this appeal to the sum of £117, or thereabouts. This sum represented the value of certain cheques, cash and securities which the appellant had seized on the respondent's premises under a warrant issued pursuant to sec. 40 of the Gaming and Betting Act 1912. The case was conducted in the Courts below on the footing that the warrant authorized the seizure, and any other view of the effect of the warrant ought not, at this late stage of the case, to be considered, and indeed no other view was presented by the appellant. The respondent was convicted of an offence under sec. 42, and his conviction was affirmed on appeal, but no order was made for forfeiture of the cheque, cash or securities pursuant to the provisions of sec. 44 (3). The proceedings against the respondent being now ended, he brought his action against the appellant for the recovery of the cheque, cash and securities which the appellant held and refused to deliver to him. Judgment for the value of the goods or their return and payment of a nominal sum for their detention was recovered by the respondent in the Supreme Court. The appeal brought to this Court against the judgment is based on the contention that the respondent had neither the possession of nor the property in the goods. Possession of the goods was lawfully divested, so it was said, by the seizure under the warrant, while the property in the goods—the right to possess them—never vested in the respondent because the physical act of handing over the goods to the respondent by the former owners was in contravention of the Gaming and Betting Act, and therefore had no effect in point of law, or, in other words, the transaction by which the respondent acquired the physical possession of the goods had no legal consequence. The validity of the argument depends upon the proper construction of the Gaming and Betting Act. Sec. 42 prohibits the keeping of betting-houses and sec. 45 the receiving of any money or valuable things as deposits on bets or as a consideration for certain assurances, undertakings, promises or agreements. Sec. 48 enacts that any money or thing so received should be deemed to have been received to the use of the person from whom it was received, and might be recovered in any Court of competent jurisdiction. "It may be," as Buckley L.J. said in Gordon v. Chief Commissioner of Metropolitan Police[21], "that the plaintiff never ought to have acquired that property." Apart, however, from the Gaming Act, the transaction whereby the respondent obtained possession of the goods from the former owners would have vested the property in the goods in him. And the Act, in my opinion, recognizes the transaction and the acquisition of the property in the goods by the respondent, and then creates a statutory right in the former owners to recover them. Otherwise sec. 48 is meaningless.

If this be so, then the appellant "seeks to say, True, it is your property, but it ought not to have been your property; you ought not to have got it by or in betting transactions. ... If the property is taken from the plaintiff on that ground, it is taken by confiscation. There is no ground of public policy upon which the defendant should keep that which under no circumstances is his" (Gordon v. Chief Commissioner of Metropolitan Police[22]).

The provisions of sec. 58 of the Gaming and Betting Act did not bar this action, but the question whether that section covers actions brought to establish proprietary rights remains open so far as I am (concerned (cf. Sharpington v. Fulham Guardians[23]).

Solicitor for the appellant, J. V. Tillett, Crown Solicitor for New South Wales.

[1] [1836] EngR 49; (1836) 2 M. & W., 149.

[2] (1910) A.C., 514, at pp. 525-526.

[3] (1885) 15 Q.B.D., 363, at pp. 367-368.

[4] (1910) 2 K.B., 1080.

[5] (1865) L.R. 1 Q.B., 1, at pp. 5-6.

[6] (1907) A.C., 73, at p. 79.

[7] (1904) A.C., at p. 410.

[8] [1856] EngR 81; (1856) 5 E. & B., 802, at p. 805.

[9] (1902) P., at p. 55.

[10] (1914) A.C., 197, at pp. 209-211.

[11] (1722) 1 Str., 505.

[12] (1904) A.C., 405.

[13] [1863] EngR 225; (1863) 3 B. & S., 566.

[14] [1863] EngR 225; (1863) 3 B. & S., 566.

[15] [1863] EngR 225; (1863) 3 B. & S., 566.

[16] (1910) 2 K.B., 1080.

[17] [1863] EngR 225; (1863) 3 B. & S., 566.

[18] (1898) 2 Q.B., 647.

[19] (1902) 2 K.B., 21.

[20] (1906) 22 T.L.R., 763.

[21] (1910) 2 K.B., at p. 1098.

[22] (1910) 2 K.B., per Buckley L.J., at p. 1098.

[23] (1904) 2 Ch., 449.

High Court of Australia

Russell v Wilson [1923] HCA 60; (1923) 33 CLR 538 (13 December 1923)

HIGH COURT OF AUSTRALIA