Rowland v Stevenson & Anor

Mr De Graef said he told Mr Stevenson he could do so but not before 6.00 pm because of the use for racing boats before that time. Mr De Graef said he said to Mr Stevenson: "Wow, I wish I had a stepfather like you because I wouldn't mind a Beneteau yacht as a birthday present", to which Mr Stevenson said: "He's a good son". Mr De Graef said that Mr Rowland later approached him and asked if Mr Stevenson had arranged the mooring of the French Bee to which he replied that he had and it was a great birthday present. 16 Andrew Ippolito attended the dinner at the Hunters Hill Hotel. He said Mr Stevenson said: "Neil is getting the boat, I am giving it to him as a present for his birthday". He said Mr Stevenson repeated the statement during the dinner. Mr Ippolito's secretary, Wendy Fay McCowan, swore an affidavit swearing to the conversations of Mr Stevenson in identical terms to those of Mr Ippolito. Ms McCowan was overseas and unavailable for cross-examination. When the identity was put to Mr Ippolito, he swore that he did not confer with Ms McCowan and said that Mr Stevenson's statement was short and he remembered it very well: "I mean, how difficult is that?" 17 Steffan Ippolito was assisting in putting up decorations before Mr Rowland's birthday party at the sailing club in the early afternoon of 1 February 2003. He saw Mr Stevenson sailing French Bee towards the sailing club and mooring it in front of the restaurant. Subsequently, Mr Stevenson entered the restaurant and he said he heard him say: "I sailed it over because I am going to give the boat to Neil for his birthday present". Mr Ippolito said he congratulated Neil saying: "That's a great present." 18 On the night of the party, the speeches were recorded on videotapes that were tendered in evidence. Mrs Rowland spoke about her son and his companion, thanked people for attending the function and introduced Mr Stevenson who had a few words to say. Mr Stevenson thanked Mr Rowland for seeing eye to eye with him and continued: "So all I can say is Neil you have been a fabulous guy, we've seen eye to eye on most things … ah… what can I say I want to present you with a present can you come up and have a look at this… it's not the boat." 19 As Mr Rowland approached the stage he said: "Presents, presents". Mr Stevenson repeated: "It's not the boat…yet". Mr Rowland opened the present. Mr Stevenson said it was something Mr Rowland had always wanted. It was a mini slot car set. The audience laughed. Mr Stevenson said: "And you can have the boat". They shook hands and Mr Stevenson said: "Tell them the price son!" This was a reference to a current television programme. 20 Mrs Rowland and her son explained that there was a family joke. Mr Rowland always wanted a slot car set but he never received one from his father before he died. 21 Mr Rowland in his acceptance speech said: "OK, now. Shirley and Stuart. Thank you, I love you, I really mean it. I really, really love you and I really, really mean it. Thank you for " French Bee "; there's a yacht out there. Thank you Stuart, you just gave me."

Mr Stevenson said: "Pleasure". Mr Rowland responded: "I love you for it", to which Mr Stevenson replied: "You're my son." 22 After further acknowledgments, the master of ceremonies said: "Cake". Mr Rowland said: "Cake is coming, Jeremy. 10 seconds". Having concluded his speech, Mr Rowland proceeded to the verandah where the cake had been placed on a table and cut it while the guests gathered around. 23 The cake was a replica of the French Bee but it had the word Aquarius on its hull. Mr Rowland explained that he intended to change the name of the boat when given it. He had an inflatable called Aquarius moored in a pen at Pulpit Point. 24 David Craik attended the birthday party. He recalled the presentation of the slot racing car and Stuart Stevenson saying words to the effect: "Shirley and I decided to give Neil the yacht French Bee which is moored in front of the restaurant. Here's the key son it's all yours tell them the price son." Mr Craik's recollection of keys being handed to Mr Rowland was inaccurate but in other respects the video confirmed his impression. 25 Evan John Worthington swore an affidavit filed on behalf of Mr Stevenson. He was a guest at the birthday party. His recollection was of Mr Stevenson referring to Mr Rowland as his son and presenting him with a birthday gift being a toy model of some sort and saying: "And you may as well have the boat". There was laughter at that point in the speech. 26 Mr Stevenson denied ever having said anything about a gift of the French Bee until the night of the birthday party. And then he said it was in jest. It was never discussed with Mrs Rowland, he said, nor did he provide photographs of the French Bee and was not aware that a birthday cake in its image was cut at the party. He said the first time that he knew anything about a cake was in court when he saw the videos played. 27 Mr Stevenson said he brought the French Bee to the sailing club in case Mr Rowland wanted to take any of the guests out sailing the next morning. He said the slot car was the real present. It was a costly item. 28 Mr Rowland was to have lunch at the sailing club with Mrs Rowland and her son the next day. Mr Rowland said he and his partner had planned to go to Bundaberg that afternoon and those plans were well known. Mrs Rowland agreed. Mr Stevenson denied any knowledge of them. Mr Rowland said he handed the keys to French Bee back to Mr Stevenson so he could return it to the mooring at Pulpit Point. Thereafter, until 11 March 2003, the keys remained at the matrimonial home of Mrs Rowland and Mr Stevenson and the boat was moored there. 29 Mr Rowland returned to Sydney from Bundaberg for about five days before taking a trip to China with his mother and Mr Stevenson and returning to the United States of America. It was not until 31 March 2003 that he contacted Esanda about paying out the contract and it was not until 30 April 2003 that new account details in the name of Mr Rowland were processed by Esanda. 30 In the meantime, on 11 March 2003, the marriage between Mrs Rowland and Mr Stevenson broke down and Mr Stevenson left the Hunters Hill property. 31 On 2 May 2003, Mr Rowland deposited $11,969.52 in Mr Stevenson's bank account. That was a reimbursement of the monthly payments on French Bee for February, March and April 2003. Mr Rowland wrote to Mr Stevenson on that day. He noted that his request to Esanda to debit his account with all payments had not been acted upon. He confirmed that he had given authority to his bank to make future instalment payments. He requested Mr Stevenson to sign an enclosed transfer of registration form for the Waterways Authority and a receipt by Mr Stevenson and Mrs Rowland of $1 as consideration for the gift of the French Bee. He enclosed a return envelope for that purpose. He put Mr Stevenson on notice that he would commence legal proceedings to require the transfer of the boat and he noted that Mrs Rowland agreed to the transfer. Mr Stevenson did not sign or return the documents. 32 There was a dispute as to whether Mr Rowland received a response to his letter of 2 May 2003. He said he did not. Mr Stevenson said he put under the door of Mr Rowland's Hunters Hill premises a letter of 14 May 2003. Mr Rowland said he did not receive the letter. In the end, little turns upon this controversy. 33 When Mr Rowland took up residence at Birkenhead on his return to Australia, the French Bee was moored there from August 2003 until January 2004. He then returned it to Pulpit Point when he moved to a property he owned near his mother's home. 34 Mr Rowland made the monthly payments to Esanda from May to October 2003 and in November 2003 he paid the balloon payment of $138,875.34 in discharge of the liability to Esanda. On 26 October 2003 he paid the annual insurance premium of $2,381.05. 35 In May 2004, Geoffrey Richard Foley sailed the French Bee from its mooring at Pulpit Point to Long Nose Point where he picked up Mr Stevenson and they sailed the boat to the Cruising Yacht Club in Rushcutters Bay. From there it was returned to Pulpit Point on Mr Rowland's instructions and Mr Foley repeated the process of sailing it to Rushcutters Bay for a second time. Since then the yacht has been in the possession of Mr Stevenson. During the period in which Mr Rowland reclaimed possession of the boat, he said some damage was observable and he obtained a quotation of $3,234 to repair it. Since Mr Stevenson regained possession of the French Bee Mr Rowland maintained that his observation of it from shore suggested that it had been sun damaged, weathered and was in need of maintenance.

Resolution of conflict of evidence 36 I do not accept Mr Stevenson's assertion that he said nothing about a gift of the French Bee until the night of the birthday party and then his comment was in jest. The weight of the evidence supports the contrary assertions of Mrs Rowland and her son, corroborated as they are by Mr De Graef, other attendees at the Hunters Hill Hotel, at the sailing club on the afternoon of the birthday and at the party that evening. 37 The video recording of the speeches at the birthday party has Mr Stevenson saying, on presenting the slot car: "It's not the boat…yet". That suggested that the boat was yet to come and is inconsistent with Mr Stevenson's version of events that he only said: "And you may as well have the boat" as a joke. When Mr Rowland, in his acceptance speech, thanked Mr Stevenson for making a gift of French Bee to him, Mr Stevenson said: "Pleasure", a remark totally consistent with a serious intention to make a gift. 38 Mr Rowland was 40. It was highly unlikely that the slot car was intended as the real present. Yet Mr Stevenson maintained it was. 39 Mr Stevenson asserted that his relationship with Mr Rowland was no more than friendship. Yet the video of the proceedings at the birthday party clearly indicated more. Mr Rowland referred to Mr Stevenson as "Dad". Mr Rowland said he really, really, loved Mr Stevenson who responded: "You're my son." 40 I do not accept that Mr Stevenson did not see the birthday cake until he viewed the video in court. The video recording demonstrated that the cutting of the cake was a central part of the festivities and that those seated at tables in the restaurant moved out onto the verandah to view that ceremony. 41 Mr Stevenson said he spoke to Mr De Graef about a mooring because Mr Rowland told him several weeks before the party that he wanted the French Bee moored there. In his affidavit, Mr Stevenson said that Mr Rowland explained that he wanted the French Bee there because he might take it out with his friends the day after the party. In cross-examination Mr Stevenson said Mr Rowland did not tell him his reason for wanting the boat at the party. He said he assumed that Mr Rowland might want to take his friends out on it the next day. When this conflict in evidence was pointed out to him, Mr Stevenson returned to the version in his affidavit and maintained it was accurate. Yet there had been an arrangement for Mr Stevenson to lunch the day after the party with Mrs Rowland and her son and Mr Rowland and his companion were to leave for Bundaberg that afternoon. Further, Mr Stevenson said he would not have allowed Mr Rowland to take the boat out alone and he would have sailed the boat with Mr Rowland and friends had he been asked. But no such request was made. I reject Mr Stevenson's explanation for the mooring of the French Bee and accept the evidence of Mr De Graef. That evidence was supported by Mr Steffan Ippolito's evidence. 42 Of the $11,969.52 paid into his account, Mr Stevenson said that he did not repay it because he had no money. Yet he had $310,600 in a bank account in Hong Kong from which he withdrew about $120,000 to purchase a new Mercedes Benz motor vehicle. 43 Mr Stevenson maintained the boat was his property yet he did not pay the insurance premium in 2003 and in May 2004, when he seized the boat, he used it as, in his description, a good bargaining chip in seeking to be released from a guarantee. 44 Mr Stevenson said of his letter of 14 May 2003 that he printed it from the hard drive of his computer on follow-up paper bearing the address of the premises at which he was staying. Following an assertion of recent fabrication by Mr Stevenson of the delivery of this letter, Paul Joseph Dillon, Mr Stevenson's solicitor, gave evidence that he created the letterhead in a different font on his computer, printed out the original letter and gave it to Mr Stevenson. When asked why he did not use the express post envelope provided by Mr Rowland rather than put the letter under Mr Rowland's door, Mr Stevenson said he had torn it up. Yet it was annexed to his affidavit. 45 Mr Stevenson's manner in the witness box did not advance his cause. With respect to the discrepancies in his testimony about the reason for the mooring of the French Bee at the sailing club, the following exchange took place: "Q: We have three versions now of what happened on that occasion? A: Well there's no great revelation from me. I couldn't care less. I mean, I brought the boat over to the club for his use with his friends the next day. Q: But I just want to be clear, now, which is the final version of the evidence? A: You can have that as the final version. Q: So we can take what appears in 23.5? A: Yes. Q: As your final version? A: Yes. Q: You swear on your oath that is a correct version of what took place? A: Yes. Q: We can discard your earlier evidence given this morning as being incorrect? A: Yes, if you like." 46 When cross-examined about an inconsistency as to whether he had paid the insurance premium in 2003, the following exchange took place until I intervened and required Mr Stevenson to answer questions truthfully: "Q: Let's deal with 2003 I now have from you two - A: God. Q: - inconsistent assertions. On the one hand you say you didn't pay it and on the other hand you said you paid the insurance premium. Which one should we accept? A: Accept whichever one you like. Q: Is that your best answer to my question? A: Yes it's of no consequence to me." 47 I found Mr Stevenson to be a most unsatisfactory witness lacking credibility and reliability. Where his evidence conflicts with others, I prefer their evidence. 48 The evidence adduced in support of Mr Rowland's case was not without criticism. There were the identical recollections of Mr Ippolito and Ms McCowan, Mr Craik's faulty recollection, the failure of Mr Rowland to refer to the earlier conversations with Mr Stevenson and the handing over of the file in his affidavits, Mr Rowland's resiling from the reference to his desire to sail in the 2003 Sydney to Hobart yacht race in his affidavits, Mr Rowland's recollection of the file containing manuals in conflict with his mother's assertion that the manuals were kept on the boat. Those criticisms do not, however, detract from the overall weight of the consistent evidence that Mr Stevenson had expressed his intention of making a gift of the French Bee to Mr Rowland.

The Law of gifts 49 In Irons v Smallpiece (1819) 2 B & Ald 551 (106 ER 467), Lord Tenterden CJ said that in order to transfer property by gift there must either be a deed or instrument of gift or there must be an actual delivery of the thing to the donee. In Cochrane v Moore (1890) 25 QBD 57, Fry LJ with whom Bowen LJ agreed, having pointed out that the instrument of gift to which the Chief Justice referred must have been a will, analysed the authorities both before and after Irons and concluded that it correctly declared the existing law. At 72-73 his Lordship said: "This review of the authorities leads us to conclude that according to the old law no gift or grant of a chattel was effectual to pass it whether by parol or by deed, and whether with or without consideration unless accompanied by delivery: that on that law two exceptions have been grafted, one in the case of deeds, and the other in that of contracts of sale where the intention of the parties is that the property shall pass before delivery: but that as regards gifts by parol, the old law was in force when Irons v Smallpiece was decided: that that case therefore correctly declared the existing law: and that it has not been overruled by the decision of Pollock, B., in 1883, or the subsequent case before Cave, J." 50 Thus in Flinn v White (1950) SASR 195, a piano purchased and placed in a family home with respect to which the father later said that one of his daughters, being the family pianist, should have the piano did not effect a gift because the piano was not delivered to her. 51 Delivery need not be manual and in the case of a bulky chattel such as a yacht could not be. Constructive delivery is sufficient. As Abbott J said in Flinn at 201: "I agree with Mr Millhouse that the delivery need not be actual manual delivery, but need merely be such delivery as the subject matter of the gift is capable of, or such delivery as was reasonably practicable." 52 Delivery need not be contemporaneous with words of gift. In Re Stoneham [1919] 1 Ch 149 it was held that where the subject matter of a parol gift is already in the possession of the donee at the time when the gift is made, no further act of delivery is necessary. At 153-154, P O Lawrence J said the act of delivery might be antecedent or subsequent to the gift: "In my judgment the foundation of the rule affirmed by the Court of Appeal in Cochrane v Moore is that in order to constitute a perfect gift by word of mouth of chattels capable of delivery the donee must have had the chattels delivered into his possession by the donor or by someone on his behalf. In principle I can see no distinction between a delivery antecedent to the gift and a delivery concurrent with or subsequent to the gift. Nor can I see any reason in principle why the rule should not apply to a case where chattels have been delivered to the donee before the gift as bailee or in any other capacity, so long as they are actually in his possession at the time of the gift to the knowledge of the donor." 53 In Horsley v Phillips Fine Art Auctioneers Pty Ltd, NSWSC, unreported, 5 September 1995, it was held that further delivery was unnecessary where the chattels, in that case furniture and effects, had been delivered prior to the words of gift. 54 A gift may be made of property that is subject to a charge. In Ker v Ker (1869) IR 4 Eq 15, a gift of land which was subject to a charge was made. The charge was discharged against other property and it was held that the donee was liable to make contribution. There is no reason in principle why the same should not apply to personal property. 55 A gift may be made subject to conditions precedent or subsequent (Egerton v Earl Brownlow (1853) 4 HLC 1 (10 ER 359), Partridge v Partridge (1894) 1 Ch 351 at 357). If a condition subsequent is imposed upon a gift, it will take effect but if the condition is unfulfilled, that will put an end to the gift. Thus in Ellis v Chief Adjudication Officer [1998] 1 FLR 184, a mother made a gift of her freehold property subject to a mortgage to her daughter imposing conditions that the daughter care for her in the property and that she pay off the mortgage. The daughter paid off the mortgage, became registered as the owner of the property and evicted her mother. The mother's claim to income support was rejected on the basis that the gift had come to an end when the condition subsequent for her care in the property by her daughter was breached.

The law of detinue 56 The Supreme Court Act 1970, s 93(1) provided that in proceedings for the detention of goods, judgment might be given for the delivery of the goods without giving the defendant the option of retaining the goods upon paying the value assessed, if any. In McKeown v Cavalier Yachts Pty Ltd (1998) 13 NSWLR 303, Young J pointed out that the Court would not exercise its discretion in favour of the plaintiff to order the return of a chattel unless it had special value or was unique and damages would not be a full compensation. But his Honour concluded that a yacht had sufficient individuality to fall into the class of special or unique chattels so that specific restitution should be ordered. 57 A plaintiff entitled to such to an order is entitled to any consequential damages by reason of any detriment to or depreciation of the boat and any losses due to deprivation (General and Finance Facilities Ltd v Cooks Cars (Romford) Ltd [1963] 2 All ER 314, Pargiter v Alexander (1995) 5 Tas R 158).

Resolution of issues 58 It was submitted on behalf of Mr Rowland that the events could be characterised as a contract. I reject that submission. The evidence does not support the notion that Mr Stevenson and Mrs Rowland agreed with Mr Rowland that in consideration of his undertaking the payment to Esanda they would transfer the French Bee to him. Rather, the events took the form that Mr Stevenson and Mrs Rowland would make a gift of the boat to Mr Rowland. 59 In my view, Mr Stevenson as well as Mrs Rowland had the intention of making a gift of the French Bee to Mr Rowland on his 40th birthday, and I so find. I reject the submission that Mrs Rowland and her son fastened upon words of jest by Mr Stevenson to reduce the value of the matrimonial property by excluding the French Bee from it. It was submitted that this conclusion emerged from the fact that Mr Rowland did nothing with respect to the boat until after the marriage of his mother to Mr Stevenson broke down and until that time nothing changed with respect to the yacht. It remained at Pulpit Point and the keys remained in the Hunters Hill home. Those facts are equally consistent with a gift and delay in attending to the condition to take over the balloon payment to Esanda until Mr Rowland's return to Australia. The conclusion cannot be drawn in the face of the evidence of independent witnesses that Mr Stevenson had stated that he and Mrs Rowland intended to make a gift of the French Bee to Mr Rowland at his 40th birthday party. There is no basis for rejecting that testimony. 60 It was submitted that there was no symbolic handing over of the boat on the night of the birthday party and, in consequence, I should find that no gift was perfected. I reject that submission. 61 The keys had been handed to Mr Rowland prior to the party. I find that the boat was delivered to Mr Rowland by Mr Stevenson on the afternoon of his 40th birthday by Mr Stevenson handing the keys to the French Bee to Mr Rowland, saying: "It's all yours son." 62 Since delivery had already taken place, there was no need of further delivery. In any event, the presence of the yacht outside the restaurant and the cutting of the cake in its shape were sufficient symbols of the significance of the event. I find that Mr Stevenson's statement during his speech: "And you can have the boat", constituted words of gift on his and Mrs Rowland's part and the gift was then perfected. 63 The gift was subject to a condition that Mr Rowland would have to accept responsibility for making the balloon payment and, I infer, the other payments to Esanda. Mrs Rowland certainly had in mind that it would be her son's responsibility to pay all outgoings with respect to the boat once the gift had been made to him. The fact that no mention was made of the monthly payments in the discussions between Mr Rowland and Mr Stevenson is outweighed by the handing over of the file containing details of the Esanda liability including the existence and quantum of the monthly payments. 64 In my view, the assumption of liability was a condition subsequent. There was no suggestion that Mr Rowland had to make the arrangements with Esanda before the gift was made. Being a condition subsequent, the gift did not fail by reason of Mr Rowland's delay in taking over the monthly payments. He did so within a reasonable time in terms of the family arrangement and his absence from Australia and he reimbursed Mr Stevenson for the three months that had been charged to his account. 65 It was submitted that there was no completion of the gift because the Esanda liability was not assigned nor was the registration of the boat changed. The argument misconceives the nature of the transaction. It was not a question of Mr Stevenson and Mrs Rowland assigning their liability to Esanda to Mr Rowland. What was required was a voluntary assumption by Mr Rowland of that liability. That he did, albeit some months later, by arrangement with Esanda and the repayment to Mr Stevenson of three months' instalments. Thereafter, until Mr Stevenson's reclaiming of possession, Mr Rowland not only paid all moneys due to Esanda, but also paid the insurance and other outgoings on the yacht. 66 As for the argument about registration, while a pleasure craft is a ship for the purpose of the Shipping Registration Act 1981 (Cth), that provides for a system of registration of ships, a pleasure craft is exempt from the requirement to be registered under s 13 and registration under the Marine Safety Act 1998 is not determinative of ownership. While, for safety purposes the French Bee was registered in the name of Mr Stevenson, it did not require a transfer of that registration for property in the French Bee to pass to Mr Rowland.

Conclusion 67 In my view, Mr Stevenson as well as Mrs Rowland, intended to make a gift of the French Bee to Mr Rowland. The boat was delivered to Mr Rowland by Mr Stevenson on the afternoon of his 40th birthday by Mr Stevenson handing the keys to the French Bee to Mr Rowland, saying: "It's all yours son". The gift was perfected by Mr Stevenson's subsequent words gift at the party: "And you can have the boat". Mr Rowland accepted the gift in his acceptance speech by the words: "Thank you for the French Bee; there's a yacht out there. Thank you Stuart you just gave me". 68 The gift was subject to the condition that Mr Rowland discharge the balloon payment and make the monthly payments to Esanda. That was a condition subsequent. Being a condition subsequent, the gift did not fail by reason of Mr Rowland's delay in taking over the monthly payments. 69 I will give judgement for delivery of the French Bee to Mr Rowland. It has sufficient uniqueness to fall into the category referred to by Young J in McKeown. I will refer to a Master the question of damages. 70 I am not prepared to make the declaration that Mr Rowland is the owner of the French Bee. As Young J pointed out in McKeown at 312, declarations should not be made as staging posts in litigation.

71 I will hear the parties on the appropriate terms of the orders and I will hear the parties on costs. I direct the parties to bring in short minutes of orders reflecting these reasons.

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