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High Court of Australia |
THOMAS BROWN AND SONS LTD. v. FAZAL DEEN [1962] HCA 59; (1962) 108 CLR 391
Bailment
High Court of Australia
Kitto(1), Windeyer(1) and Owen(1) JJ.
CATCHWORDS
Bailment - Deposit of goods for safe custody - Contract of bailment illegal as to part - Severability of terms of contract - Conversion of goods by bailee - Limitation of action for conversion - Detinue - Necessity to prove partly illegal contract to establish claim - Property subject of illegal contract irrecoverable.
HEARING
Brisbane, 1962, September 12-14;DECISION
November 30.2. The story told by the plaintiff is set out in detail and with clarity in the judgment appealed from. In important respects his evidence was corroborated by the evidence of one Pittman who had been the secretary of the company from 1937 until 1951 and who gave evidence also of certain events which occurred in 1959. The learned trial judge had ample opportunity of seeing and hearing these two witnesses who were examined and cross-examined at length and his conclusion about them should be quoted : "The foregoing is a bare outline of the relevant facts as I find them to be ; and from this recital, it is apparent that I have accepted the plaintiff and Pittman as honest witnesses, whose evidence could for the most part be relied on. Against a general overall impression of their honesty, I have had to weigh many improbabilities in the story related by them, which counsel for the company and Harden urged strongly upon me ; the evidence in contradiction to that of the plaintiff and his witness, Pittman ; and also the fact that Harden had died after the writ was issued and his evidence was therefore not available. That the story of the plaintiff is a strange one cannot be denied ; but its strangeness and its improbabilities have not been sufficient to induce me to reject evidence which, both as it was elicited and after further consideration, appeared to me to come from witnesses endeavouring to speak the truth." The plaintiff's case was to the following effect : He was born in the Punjab in 1898 and after leaving school worked for some years with various firms of jewellers gaining experience of gems and jewellery. In 1922 he came to Australia to join his father who was a hawker in the outback of Queensland and they carried on their business together. They also bought and sold precious stones. In 1925 the plaintiff went back to India and remained there until 1929 when he returned to Australia bringing with him a quantity of gems obtained in India and Ceylon. He resumed hawking with his father and at the end of 1929 began to prospect for gold in the Northern Territory. He continued to deal in gems. In 1933 he set up a store at Tennants Creek where he went to live and erected a plant there to crush gold-bearing stone. His father died in 1935 and the plaintiff went to India in the following year, returning in November 1936 and bringing with him three of his sons and a quantity of rubies, sapphires and alexandrites. He returned to Tennants Creek where, as well as his store and crushing plant and his gem buying activities, he owned a number of gold mining ventures in the area. In addition he did prospecting work as a result of which he collected a substantial quantity of what he described as alluvial gold which he smelted into bars and buried. When the bombing of Darwin took place at the end of 1942 he left Tennants Creek in some haste, bringing with him the bars of gold of which there were 19, of a total weight of about 1,968 ounces which represented about 139 pounds weight, and a quantity of gems. He went then to live in Brisbane. His association with the company had been a long one. He and his father before him had been customers of it for many years and he had first met Harden in 1923 when the latter was the manager of the company's Rockhampton branch. Over the years their association became a fairly close one and Harden used to advise him on business matters. In 1931 Harden was appointed general manager of the company at its Brisbane office and, between 1932 and 1943, the plaintiff on occasions left with Harden parcels of gems to be kept by the latter in the safe in his office. These he had authority from the plaintiff to sell, if the occasion offered, and to credit the proceeds to his account with the company. No receipt was given by the company or by Harden on the deposit of these gems. (at p399)
3. When the plaintiff came to live in Brisbane in 1943 he brought with him the gold bars and a parcel of gems. He kept them in an old leather suitcase bound with leather straps which he hid in the house in which he was living. From time to time he visited the company's premises and there saw Harden and on one of these occasions, in June 1943, when they were discussing the war situation, Harden asked what the plaintiff's people regarded as the best form of security. The plaintiff replied "Number one is land and buildings, number two gold, gems and jewels". Harden, who knew of the plaintiff's gold mining activities, asked if the plaintiff had any gold, to which the plaintiff replied that he had "Good bit". Harden asked where he kept it and the plaintiff replied "With me". Harden remarked that that was not a safe method of keeping it and the plaintiff asked him "What good idea?". Harden said "What about if we make space here, Thomas Brown & Sons, if we make space available for you to bring your safe and you lock up your gold and gems and all your valuables in that?" The plaintiff said that he would be glad to do so. Harden called Pittman, the secretary of the company, into his office and asked whether space could be made available for a safe in a strong-room in the basement of the building in which the plaintiff might store his valuables. Pittman said that this could be done if the safe was not too large. He took the plaintiff to the basement strong-room and the available space was measured by the plaintiff with a piece of string. Pittman told him that he would have a cupboard made to hold the safe. The plaintiff went back to Harden's office, told him that he had seen the strong-room and Harden said "It would be a very good thing for you to put all these things into Thomas Brown's strong-room for safety". The plaintiff thanked him. Before he left the office he asked Harden for some of his gems which were in Harden's hands and the latter unlocked his office safe and took out a box in which they were contained. The plaintiff emptied them on to a sheet of paper, wrapped them up and handed the box back to Harden. He then left the office carrying the parcel of gems with him and went to an auctioneer's premises where he bought a second-hand safe, which had only one key, and arranged to have it carted to his house by a carrier named Kelly. He went home and sorted the gems - to which he added those brought by him from Tennants Creek - into classes, weighed the stones in each class, listed them and parcelled them up again. He had also a list showing the weights of the gold bars. He put the parcel of gems and the bars of gold, each of which was wrapped in newspaper, into the suitcase. Later he put it and the safe into his truck and drove to the company's premises. He left his truck in a yard at the rear of the premises, took the suitcase from it, carried it to the lift and went up in the lift to Harden's room. He told Harden that he had brought his "wealth" to put in the strong-room. Harden asked if he might see the gold and the plaintiff opened the suitcase, Harden picked up one of the bars, unwrapped it and looked at it. He asked the plaintiff if he was prepared to sell the gold for 15,000 pounds but the plaintiff refused, saying that he wanted to keep it for his old age. Harden told him to pack it up and take it to Pittman and put it in the strong-room. The plaintiff accordingly carried the suitcase to Pittman's room, which was close by, and told him that he had brought the safe and other things to be put in the strong-room. Pittman told him to get a trolley from the packing room and bring the safe and the suitcase to the basement strong-room. The plaintiff carried the suitcase to the lift and took it down to the basement where he got a trolley. He unloaded the safe from the truck on to the trolley, placed the suitcase on top of it, and wheeled the load to the basement strong-room where Pittman was waiting for him. Pittman opened the door of the strong-room and they went inside. A cupboard had been built, as Pittman had promised, and the safe was put into it. The plaintiff began to place the contents of the suitcase in the safe. In the course of doing this Pittman noticed that the wrapping on one of the bars had been torn or become unwrapped and that a golden coloured metal could be seen. He asked what it was and the plaintiff told him that it was gold. When the contents of the suitcase had been placed in the safe the plaintiff locked it and the cupboard door. Pittman locked up the strong-room and the plaintiff went back to Harden's office and told him that he had put the gold and the gems into the safe. He showed Harden the key of the safe and the key of the cupboard and Harden suggested that he should give them to him, saying that the plaintiff would not be allowed to go into the strong-room and that the keys would therefore be of no use to him, adding "I want you to forget what you put in there for your old age". The plaintiff agreed and handed over the keys to Harden. Harden asked him to give him details of what he had put in the safe and noted down on a scribbling pad what the plaintiff told him. He said "You are a very wealthy man, Fazal. No doubt it will come in handy in your old age ; but remember we are making Thomas Brown's - you are very lucky Thomas Brown's made this place available for you and everything safe and sound, and we will look after it. We will give you back when you need it". When he returned to his house the plaintiff listed in Urdu in an old book which had belonged to his father particulars of the weights of the bars of gold and particulars of the gems which he had left in the safe. All this is his story. (at p401)
4. In December 1945 the plaintiff went to India and to enable him to obtain a taxation clearance Harden guaranteed his liability to tax. He returned to Australia in May 1948 and shortly after his return asked Harden if he might borrow from the company sufficient money to pay the air fares to Australia of a number of members of his family. The fares amounted to about 1,500 pounds. To continue with his account of the events, he says that at this interview Harden then mentioned the fact that his safe was in the basement strongroom and they went down to it together. Harden opened the safe and they saw that the contents were as they had been left in 1943. On their return to Harden's room, Harden sent for Pittman, told him that the company was making a short term loan to the plaintiff, and instructed him to make out a cheque on the company's account payable to Qantas Limited for 1,560 pounds. Pittman did this. He and Harden signed the cheque and it was handed to the plaintiff who paid it to Qantas Limited. A few days later the plaintiff repaid the loan by a cheque drawn by one of his sons. (at p402)
5. It is convenient now to refer to a number of changes which occurred in the company's staff over the relevant periods. In 1951 Pittman resigned from the company's service, thinking that he had been unfairly treated in the matter of promotion. He was succeeded as secretary by a man named Loxton who was dismissed from the company's employ in 1957. His place was taken by one Gough who, early in 1959, was promoted to the position of manager of the Brisbane office. Harden had ceased to be general manager in 1953 but remained a member of the local board of directors until January 1959. He was also a member of the London board until July 1959, the company being an English company. After his retirement from the position of general manager in 1953 and until January 1959 when he retired from the local board, he retained a room in the company's premises and attended there in the capacity of consultant. A man named Ellemor, who had long been in the company's service, was transferred from its Rockhampton branch to Brisbane in 1952 and when Harden ceased to be the general manager in 1953, Ellemor took over the position. (at p402)
6. Turning back to the history of the events in question, it appears that some time in 1950 one Ketchion, a carpenter who had entered the company's employ in 1949, went into the basement strongroom to get a step-ladder. He noticed in the strong-room two cupboards, the doors of which were closed, one of these cupboards being the one in which the plaintiff's safe had been put. In April or May 1953, Ketchion again went to the strong-room to replace an electric light bulb and saw that one of the cupboard doors was partly open and that, inside it, was a safe the door of which was also open. The safe was empty. Ketchion mentioned this to a man named Till, one of the company's employees, and they both went down to the strong-room and moved the safe on a trolley to another strong-room which was on the ground floor, putting it on top of another safe. No key to the safe could be found and new keys for it were cut and the safe put into use for the company's purposes. Soon afterwards Harden left on a trip to England, returning to Brisbane at the end of the year. The plaintiff says that thereafter he visited him at the company's office on a number of occasions but no mention was made of the safe or its contents. The fact that the safe had been found to be empty and had been moved does not seem to have been brought to Harden's notice. Early in 1959 the plaintiff read in a newspaper a reference to the fact that Harden had ceased to be associated with the company. He went to the company's premises and saw Ellemor, referred to the newspaper announcement and asked Ellemor whether Harden would be coming back. Ellemor said that he would not, using words which indicated that he and Harden were not on good terms, as was the fact. The plaintiff told Ellemor that he had a safe in the basement strong-room containing valuables and asked whether Harden had said anything about it. Ellemor replied that he knew nothing of the safe and, not wishing to speak to Harden himself, told the plaintiff to get in touch with him and let him, Ellemor, know what happened. The plaintiff telephoned Harden and told him that he had spoken to Ellemor about his safe and its contents and that Ellemor had said he knew nothing about it and had told him to ring him. Harden replied that he would telephone Gough at once and told the plaintiff to ring him back in about 15 minutes' time. The plaintiff rang Ellemor, told him that he had spoken to Harden and that Harden was going to telephone Gough and suggested that Ellemor should listen to the conversation between Harden and Gough. A little later the plaintiff telephoned Harden again and Harden told him that he had not been able to get in touch with Gough because he was engaged. Later Harden telephoned the plaintiff and said that he had made inquiries of Gough and had been told that the safe had been removed from the strong-room by Till and was being used for the company's papers. The plaintiff asked him who had given Till authority to move the safe and how he had got the keys. Referring to Loxton and Gough, the plaintiff said that they knew nothing about the safe and had no authority to tell Till to move it and that only he, Harden and Pittman knew about the safe in the strong-room. He added "You are the man responsible for my valuables and my safe". Later in the evening Harden again rang the plaintiff and suggested that he should go to the police. The plaintiff did not do so but instead consulted his solicitors. On the following day, 20th February 1959, he went to the company's premises and there saw Ellemor and Gough. (at p403)
7. In the meantime the safe had been found in the ground floor strong-room. According to Ellemor and Gough they took the plaintiff there but he failed to identify it. They then took him to the basement strong-room and showed him the empty cupboard. The plaintiff's account of this incident was that he was only taken to the basement strong-room where the safe had originally been left and that his safe was not there. Later, in October 1959, the plaintiff with his solicitor and the company's solicitor and Ellemor and Gough visited the ground floor strong-room and there the plaintiff immediately identified his safe. The learned trial judge did not make any specific finding about the suggested failure by the plaintiff to identify the safe on the first occasion but inclined to the view that his account of that visit was correct. He said, however, that he had no doubt that the safe in question, which was an exhibit at the trial, was the plaintiff's safe. In fact, in the course of the trial and after evidence had been given by the carter who had carried it from the auction room to the plaintiff's house in 1943 and by a member of the firm of auctioneers from which it had been bought, the fact that it was the plaintiff's safe was conceded. (at p404)
8. In support of the plaintiff's case, Pittman was called as a witness. He said that he had known the plaintiff as a customer of the company for many years and that some time before 1942 he had seen a box of gems in Harden's office which Harden had said belonged to the plaintiff, these apparently being the gems which, according to the plaintiff, he had left in Harden's custody with authority to sell. Pittman said that on another occasion prior to 1943 when he was the secretary of the company and Harden was about to leave Brisbane on a visit to other States of the Commonwealth, he gave Pittman the keys of the safe in his room telling him that one of the drawers in the safe contained his own papers and the other drawer contained gems belonging to the plaintiff. In 1943, the witness said, Harden called him into his room on an occasion when the plaintiff was there and said that the plaintiff wished to lock up some of his valuables and asked whether there would be sufficient room in the basement strongroom if the plaintiff brought in a safe. Pittman replied that space could be found. He and the plaintiff went to the strong-room and he pointed out where a safe might be put, saying that he would have doors put in some existing shelving in order to make a cupboard. The plaintiff measured the space with a piece of string. Some time later the plaintiff came to his room carrying what appeared to be a very heavy leather bag with straps around it. He told Pittman that he had brought the safe and Pittman told him to get a trolley and wheel it to the strong-room. Pittman went to the basement and unlocked the strong-room door and the plaintiff wheeled in a trolley on which were the safe and the leather bag. Pittman helped him put the safe into the cupboard and the plaintiff opened the leather bag and began to put a number of parcels into the safe. Pittman thought that there were 18 or 20 parcels. They were wrapped in newspaper but the covering of one package was torn or had come unwrapped and he saw what he described as "a dirty yellow metal, dull yellow metal". He asked the plaintiff what it was and the plaintiff said it was gold. The plaintiff put the parcels into the safe, closed and locked its door and the door of the cupboard, and they went upstairs after locking the strong-room door. Pittman also gave evidence relating to the incident when the company's cheque for 1,560 pounds was given to the plaintiff in order to pay the air fares to Australia for his family. He said that he was instructed by Harden to prepare the cheque and that he did so and that he and Harden signed it. He said also that in February 1959, after he had left the company's employ, Ellemor telephoned him and asked him about the plaintiff's gold. Pittman told him that he had seen the plaintiff put gold into the safe ; that Harden had instructed him to make space for the safe available in the basement strong-room ; and that he had helped the plaintiff to put the safe in the cupboard in the strongroom. In the course of the conversation Ellemor told Pittman that Harden had told Gough where to find the safe. Some time later Pittman rang Ellemor and told him that he had given a statement in connexion with the gold to the plaintiff's solicitor and had told the solicitor that he intended to tell Ellemor and Harden that he had done so but that he had not yet been able to get in touch with Harden. Ellemor told Pittman that Harden had denied that the safe was on the premises, to which Pittman replied "He cannot deny that because you told me he had told Gough where to find it". Ellemor replied "That's right". Ellemor told him that the safe had been found in the ground floor strongroom and was being used by Till for Harden's personal papers. Later Pittman went to the solicitors for the company and to the solicitors for Harden and gave a statement to each of them. (at p405)
9. Harden had died before the action was heard and his version of the happenings is not known. Ellemor, who gave evidence for the company, said that Harden had never spoken to him about the safe or its contents and had never handed him any key to the safe although he had given him a number of other keys shortly before he left for England in May 1953. He said that from 1953 onwards he and Loxton had had many discussions with the plaintiff on the subject of the latter's indebtedness to the company and had constantly pressed him to reduce the amount of his debt. The evidence as to the plaintiff's indebtedness to the company at various times is confused and we have not found it possible to ascertain with any degree of certainty how his various accounts stood at any particular time. It does appear, however, that in Harden's time as general manager credit was more freely given to the plaintiff by the company than was the case after Ellemor took charge. To continue with Ellemor's evidence, he said early in February 1959 he told the plaintiff that some cheques drawn by one of the plaintiff's sons had been dishonoured and that unless the plaintiff reduced his account the company would have to take legal proceedings against him. The plaintiff made no mention of the safe or its contents and said that his business affairs were in such a state that he could not pay his debts. In fact on 13th February 1959 a summons was issued at the suit of the company claiming 394 pounds but was not served until early in March. Ellemor also said that on 19th February 1959 he and Gough met the plaintiff on the company's premises and that the plaintiff asked if he might see him alone. Ellemor did so and after some discussion about the plaintiff's family, in the course of which he reproved the plaintiff for the language he was using, the plaintiff told him that he had a safe on the premises containing about 1,900 ounces of gold and a quantity of gems. The witness thought, but was not sure, that the plaintiff also mentioned banknotes. The plaintiff told him that he had left these valuables with the company in 1943 and had last seen them in 1948. Ellemor expressed surprise at the plaintiff's statement that he had not seen the safe since 1948 and the plaintiff replied that he had not been "concerned because it is being looked after here and contains what I want for my old age". He told Ellemor that the safe had been put in the basement strong-room and that he had been allowed to put it there by Harden in 1943. Ellemor asked him where the keys were and the plaintiff told him that in 1948 he had borrowed a sum of money, he thought about 1,250 pounds, to bring some of his family from India and that Harden had asked him for the keys of the safe as security for the debt. Ellemor asked him whether he had repaid the loan and the plaintiff said that he had done so shortly after it was made. Ellemor asked what he had done with the keys after the loan was repaid and the plaintiff replied that he had left them with Harden. The amount mentioned by the plaintiff, namely 1,250 pounds, was in fact the amount of 1,560 pounds which had been paid to Qantas Limited in 1948 by the company's cheque. In the course of their discussions the plaintiff said, according to Ellemor, that before the deposit of the gold and gems was made Harden had asked Pittman if space could be made available in the basement strong-room for the plaintiff's safe and that Pittman had said that it could be done. The plaintiff said also that he knew that the safe had been in the basement strongroom in 1948 because he and Harden had looked inside it prior to the loan being made. Later in the day Ellemor looked in the cupboard in the strong-room in which the plaintiff had told him the safe had been left and found that it was not there. He telephoned the plaintiff, told him this and suggested that he should get in touch with Harden. Shortly afterwards the plaintiff rang him and told him that he had spoken to Harden and that Harden had told him that he had given the keys to Gough. On the following day, 20th February 1959, Ellemor telephoned the plaintiff and told him that there was no sign of any of his property on the premises and asked him to come and see whether he could identify his safe. Soon afterwards the plaintiff arrived and, according to Ellemor, was taken first to the ground floor strong-room where the safe in fact was but the plaintiff failed to identify it. They then went to the basement strong-room where the plaintiff indicated the cupboard in which his safe had been left and which only contained some papers. The plaintiff said "My property is gone" and, according to the witness, pretended to break down and cry. Later in the day Ellemor rang Pittman and asked him whether he had any knowledge of gold and gems having been left by the plaintiff on the premises. Pittman told him that the plaintiff had had a safe there with gold in it and gave an account of the conversation he had had with Harden in 1943 in which Harden had asked him to make room in the strong-room for the safe. He told him also that he had helped the plaintiff to put the safe into the strong-room and that the plaintiff had put into it a number of parcels about seven inches long wrapped in newspapers; that the wrapping of one of the parcels was torn and showed a dull yellow metal underneath and that he had asked the plaintiff what it was and had been told that it was gold. In his evidence Ellemor denied that he had ever told Pittman that Harden had told Gough where the safe was. Gough gave evidence similar to that given by Ellemor regarding the occasion in February 1959 when he and Ellemor had taken the plaintiff to the two strong-rooms. He said the plaintiff had failed to identify his safe which was then in the strong-room on the ground floor. He also gave evidence of a number of occasions on which he had pressed the plaintiff to reduce his indebtedness to the company. (at p407)
10. Mrs. Harden was then called as a witness. She spoke of an occasion in February 1959 when she heard her husband speaking on the telephone. She fixed the date as being February 19th, saying in cross-examination that she remembered that the 19th was the day because her birthday was on 19th October. She said that some time in the afternoon of that day the telephone rang and her husband answered it. He said "Is that you, Fazal ? How are you ?" Then he said "Keys ? What keys ?" and then "Safe ? What safe ?" After a pause her husband said "Now I remember. You asked me to make accommodation available in Thomas Brown's for valuable papers you had in connexion with land at Mt. Gravatt near the Mosque and I told Pittman to make that accommodation available to you". Then he said "Safe ? You never had a safe at Thomas Brown's" in an astonished voice, then "Keys ? No, I had no keys of yours, I handed the keys of the office to Ellemor when I resigned". Next he said "I'll ring Gough and find out what he can tell me". Later in the day she said that her husband rang the plaintiff again and said "I have spoken to Gough and there are no keys of yours at the office. Why did you bring a safe into the office without asking my permission ?" ; and, after a pause "Pittman helped you bring it in just for a few papers", and after another pause "What gold and notes ? What nonsense. Gold and notes. Why don't you call it diamonds, Fazal ?" and rang off. Later he telephoned again and she heard him say "Is that you, Fazal ? The only thing you can do is to put the matter in the hands of the police. I advise you to do it without hesitation, don't delay, and if you don't notify them I shall" and rang off. The learned trial judge made no express mention of this witness' evidence in his reasons for judgment but counsel for the plaintiff told us that when he began to address on her evidence his Honour said that he need not do so, from which it seems to be clear enough that he was not disposed to accept it. (at p408)
11. The foregoing is an outline of the evidence which the learned judge had to consider. One further incident should perhaps be mentioned. The plaintiff gave evidence that before he left for India at the end of 1945 he gave Harden 1,000 pounds in notes to be deposited with the company free of interest. Harden handed the money to Pittman and told him that the plaintiff wanted no interest on it since to accept interest was against his religious beliefs. There is no doubt that this happened. Its only significance is that it suggests that the plaintiff regarded the company as his banker. (at p408)
12. The case was obviously one in which it was necessary to examine the evidence with the greatest care and this the learned trial judge did. The plaintiff's story was a strange one : Harden was dead and Pittman had left the company's employ because he felt he had not been advanced in its service. Furthermore the National Security (Exchange Control) Regulations which were in force in 1943 required all persons who had gold in their possession or control to deliver it to the Commonwealth Bank, although the plaintiff claimed to believe that this had no application to alluvial gold. No receipt was given for the gold or gems or for the keys left with Harden and no record of the deposit was made in the company's records other than the list said to have been made by Harden on a scribbling pad. Between 1948 when, according to the plaintiff, he and Harden inspected the safe and its contents, and 1959 no reference to it appears to have been made by the one to the other ; and, no mention of the deposit was made by the plaintiff to Ellemor until February 1959 despite the fact that for a considerable period the latter had been pressing the plaintiff to reduce his indebtedness to the company. These and kindred matters serve to create doubt as to the truth of the plaintiff's story. On the other hand it must be remembered that the plaintiff belonged to a race the members of which, as a matter of general knowledge, regard gold and precious stones as a most desirable form of investment. The association between the plaintiff and Harden was of long standing. They trusted one another and, for many years, Harden had been the plaintiff's adviser on business matters. Having regard to the requirements of the law relating to gold, it is perhaps not surprising that no formal written record of the deposit was made and there are some matters, which are beyond dispute, which tend to support the plaintiff's case. There is no doubt that in 1943 he purchased the safe which was found on the company's premises in 1959. The safe which we inspected during the hearing of the appeal was not, as counsel for Harden's estate suggested, "an extremely paltry light safe". It would take a man of considerable strength to lift it and it is scarcely the kind of receptacle which, if it was intended to be kept in a strong-room, would be bought merely to house some papers. Furthermore there is no doubt that the plaintiff mentioned the safe and its contents to Ellemor as soon as he heard that Harden had ceased to be associated with the company and communicated with Harden immediately he learned that no officer of the company appeared to have any knowledge of the existence of the safe or of the fact that it had been left on the company's premises. In the final analysis, however, the acceptance or otherwise of the plaintiff's case depended in large measure upon the view formed of Pittman as a witness. The learned trial judge thought that his evidence was true. His Honour had the great advantage, denied to us, of seeing and hearing him and the plaintiff under lengthy examination and cross-examination. Consistently with the principles which appellate courts should adopt in considering the findings of fact of a judge of first instance we think it is impossible to say that he was wrong in his conclusion that Pittman and the plaintiff were witnesses upon whom reliance could be placed on the principal issues of fact involved. (at p410)
13. The finding that the plaintiff's property was entrusted to Harden as an officer of the company and that it was within the scope of his authority as general manager to accept its custody on behalf of the company should also stand. It was a finding which it was clearly open to his Honour to make and no sound reason has been advanced for interfering with it. At one stage of his argument counsel for the company submitted that if the arrangement between the plaintiff and Harden was made in contravention of the National Security (Exchange Control) Regulations Harden could not be held to have acted as his employer's agent. That this proposition cannot be supported is shown by the case of Morgan v. Babcock & Wilcox Ltd. [1929] HCA 25; (1929) 43 CLR 163 , to which reference was made in argument. (at p410)
14. It is necessary then to consider whether the agreement under which the gold, the gems and the safe were entrusted to the company's custody contravened the National Security (Exchange Control) Regulations in any respect and, if so, what was the effect of such a contravention on the plaintiff's right to maintain the action. By reg. 14 (1) of those regulations, which were in force at the relevant time, every person who had any gold in his possession or control was required to deliver it to the Commonwealth Bank within one month after it came into his possession or control. And, by reg. 14 (3), all gold so delivered thereupon vested in the Bank free from any mortgage, charge, lien, trust or other interest, the Bank being directed to pay for the gold to the person delivering it, on behalf of all persons having any interest therein, at the price fixed by the regulations. Until delivery to the Bank, therefore, he gold remained the property of the plaintiff although, on the date when it was deposited with the company, the time had long passed when it should have been delivered to the Bank. The terms of the bailment required the company to hold the gold, along with the gems and the safe, in safe custody until such time as the plaintiff required them to be redelivered to him and, while apart from the provisions of the regulations he could no doubt have demanded their return at any time, the purpose common to both parties was that the company should hold them for an indefinite period and not part with them except to the plaintiff. So far as the gold was concerned, the performance of that agreement would, and in fact it did, contravene the regulations but it does not follow that the bailment of the gems and of the safe was tainted by illegality. If the terms of the bailment relating to the gold were severable from those relating to the gems and the safe the bailment of the latter chattels would be lawful. The test of severability was stated by Jordan C.J. in McFarlane v. Daniell (1938) 38 SR (NSW) 337 "If the elimination of the invalid promises changes the extent only but not the kind of contract, the valid promises are severable : Putsman v. Taylor (1927) 1 KB 637, at pp 640, 641 " (1938) 38 SR (NSW), at p 345 . Applying that test, it is clear that the plaintiff's rights of action in respect of the gems and the safe would not be answered by a defence of illegality based upon a breach of the National Security (Exchange Control) Regulations since the contractual obligation upon the company as to the return of the plaintiff's property on demand applied to every part of the property deposited whether demanded together with the rest of it or separately. In the case of the gold, however, the plaintiff could not succeed if he was obliged to rely upon the illegal transaction to establish his case. The learned trial judge considered that proof of the bailment was not an essential part of the plaintiff's case. He based his conclusion upon the well known passage in Bowmakers Ltd. v. Barnet Instruments Ltd. (4), that "a man's right to possess his own chattels will as a general rule be enforced against one who, without any claim of right, is detaining them, or has converted them to his own use, even though it may appear either from the pleadings, or in the course of the trial, that the chattels in question came into the defendant's possession by reason of an illegal contract between himself and the plaintiff, provided that the plaintiff does not seek, and is not forced, either to found his claim on the illegal contract or to plead its illegality in order to support his claim" (1945) 1 KB, at p 71 . With all respect, we are unable to agree with his Honour's view. In Bowmakers Ltd. v. Barnet Instruments Ltd. (1945) 1 KB 65 , the plaintiff claimed damages for conversion. The conversion by the defendant was admitted as was the fact that the goods converted were the plaintiff's property. It is true that that property had come into the defendant's possession under certain hiring agreements which were said to have been unlawfully made, but the case was not one in which the plaintiff was obliged to rely upon those agreements to prove his case. They were irrelevant. The facts in the present case are very different. As the learned trial judge found, the gold and the gems had disappeared from the company's custody not later than April 1953. The tort of conversion was then complete, the Statute of Limitations began to run and, when the present proceedings were commenced, that right of action had been barred by the lapse of time. The general rule is that "where there has once been a complete cause of action arising out of contract or tort, the statute begins to run, and subsequent circumstances which would but for the prior wrongful act or default have constituted a cause of action are disregarded." (Wilkinson v. Verity (1871) LR 6 CP 206, at p 209 ; Betts v. Receiver for the Metropolitan Police District (1932) 2 KB 595, at pp 605, 606 .) Apart therefore from the contract of bailment, the failure by the company to redeliver the gold, the gems and the safe following the plaintiff's demand for them in 1959 would not have given rise to a new cause of action so as to defeat the statute. But the cases cited above show that the general rule is subject to an exception which is correctly stated in Halsbury's Laws of England, 2nd ed. vol. 33 par. 78, in these terms : "Where a bailee for safe custody has converted the goods, the bailor may demand their return and sue in detinue upon the bailee's breach of duty to deliver, although his remedy in trover is barred by statute". This is the course which the plaintiff followed in the present case and it was a course which he was obliged to follow to avoid being met by a defence of the Statute of Limitations. It meant, however, that he was obliged to prove the contract of bailment and, to support his claim in detinue, to rely upon the failure of the company to comply with the obligation imposed by it to redeliver the goods upon the demand which he made in 1959. It follows from what has been said that the plaintiff's claim to recover the value of the gold cannot be supported (A.R.P.L. Palaniappa Chettiar v. P.L.A.R. Arunaalam Chettiar [1962] UKPC 1; (1962) AC 294 ) and to this extent the appeal must succeed. (at p412)
15. The appeal should be upheld and the judgment of the Supreme Court varied by omitting so much thereof as relates to the value of the gold assessed at 29,000 pounds and in lieu thereof entering judgment for the defendant company on the plaintiff's claim to recover the value of the said gold. (at p412)
16. There remains the question of costs. The learned trial judge ordered the defendant company to pay the plaintiff's costs of the trial. He ordered further that the plaintiff pay one-fifth of the costs of the defendant Harden, now represented by Mr. Busch ; and that the defendant company pay to the plaintiff one-half of the costs recovered against the plaintiff by the defendant Harden. At the hearing a considerable body of evidence was directed solely to matters arising out of the plaintiff's claim to recover the value of the gold. In these circumstances the order that the defendant company pay the plaintiff's costs of the trial should be set aside and instead the defendant company should be ordered to pay four-fifths of those costs. On the appeal the defendant company has succeeded to a major extent and the plaintiff should pay two-thirds of its costs of the appeal. The company should pay the costs of the appeal of the respondent Busch. (at p413)
ORDER
Appeal allowed in part. Judgment of Supreme Court varied by (a) omitting so much thereof as relates to the value of the gold assessed at 29,000 pounds; (b) in lieu thereof entering judgment for the defendant company on the plaintiff's claim to recover the value of the said gold ; (c) omitting so much of the said judgment as orders the defendant company to pay the plaintiff's costs of the action ; and (d) in lieu thereof ordering that the defendant company pay four-fifths of the plaintiff's said costs. Otherwise appeal dismissed. Order that respondent Fazal Deen pay to the appellant company two-thirds of the company's costs of the appeal including the reserved costs and that the appellant company pay to the respondent Busch his costs of the appeal including the reserved costs.
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