Solicitors:
Crown Solicitor (Plaintiff)
Manion McCosker (First Defendant)
HLB Mann Judd (Second Defendant)
Minter Ellison (Third and Fourth Defendant)
Clyde & Co (Fifth Defendant)
File Number(s): 2014/250563
Publication restriction: Nil
[2]
ex tempore Judgment
By an amended summons, the State of New South Wales applies for orders under s 219 of the Law Enforcement (Powers and Responsibilities) Act 2002 ("LEPRA") for either the delivery or forfeiture of twenty items that were seized by police in late 2013 as part of an investigation into a theft at the residence of the first defendant, Peter O'Mara, between 17 July 2010 and 10 August 2010. Police seized the twenty items when they executed a search warrant at a property in Wiley Park which was the residential home of the parents of a caretaker of Mr O'Mara's residence. The police no longer require the property for the purposes of their investigation.
The property consists of eighteen valuable paintings and drawings, a statue described as a "Bronze Temple Dog, Ming Dynasty", and a silver bowl. They are currently being stored at the Art Gallery of New South Wales.
Section 219 of LEPRA provides:
"219 Disposal of property on application to court
(1) A court may, on application by any person, make an order that property to which this Division applies:
(a) be delivered to the person who appears to be lawfully entitled to the property, or
(b) if that person cannot be ascertained, be dealt with as the court thinks fit.
(2) In determining an application the court may do any one or more of the following things:
(a) adjust rights to property as between people who appear to be lawfully entitled to the same property or the same or different parts of property (including adjusting rights by extinguishing, whether in whole or in part, any interests in the property of such persons),
(b) make a finding or order as to the ownership and delivery of property,
(c) make a finding or order as to the liability for and payment of expenses incurred in keeping property in police custody,
(d) order, if the person who is lawfully entitled to the property cannot be ascertained, that the property be forfeited to the Crown,
(e) make any necessary incidental or ancillary orders.
(3) Property ordered to be forfeited to the Crown:
(a) in the case of money, is to be paid to the Treasurer for payment into the Consolidated Fund, or
(b) in any other case, may be sold by or on behalf of the Commissioner at public auction and the proceeds of sale are to be paid to the Treasurer for payment into the Consolidated Fund.
(4) If the property is not money or is not fit or suitable for sale, or fails to sell at public auction, it is to be disposed of in accordance with the directions of the Commissioner.
(5) An order under subsection (2) (a) that provides for the extinguishment, whether in whole or in part, of any interest in property operates to extinguish the interest according to its tenor."
At least in the context of this case the reference to "property" in the section is to the chattel itself rather than the legal interest in that chattel (see LEPRA s 3; Crimes Act 1900 s 4). Otherwise there is no doubt that the relevant property is "property to which this Division applies" within the meaning of s 219(1) of LEPRA.
There were initially five defendants to the proceedings. The first was Mr O'Mara. He has filed an appearance submitting to the Court's orders. In doing so he appears to have disclaimed any entitlement to the property.
The second defendant is Pacific Plastics (Queensland) Pty Ltd ("Pacific Plastics"). Pacific Plastics was at all material times a company owned by Mr O'Mara. As I will explain, at least at some point Pacific Plastics had an interest in some of the art works that were recovered. It is now in liquidation. Leave is sought by the State to proceed against it under s 471B of the Corporations Act 2001.
A representative of the liquidator has emailed the fifth respondent indicating that the liquidator does not oppose the orders sought by the fifth respondent for the recovery of nineteen of the twenty items the subject of this application. Clearly they do not take any position in respect of the twentieth item. Accordingly, leave will be granted to proceed against Pacific Plastics so that there is no doubt that it is bound by the outcome of these proceedings.
The amended summons also names as third and fourth defendants, Grant Sparks and David Leigh. They were the receivers and managers of the assets and undertakings of Pacific Plastics. At some point they asserted an entitlement on behalf of Pacific Plastics to two of the items that were recovered. However, consent orders were later entered discontinuing the proceedings against them, with each party to pay their own costs. In those circumstances I am satisfied that the former third and fourth defendants do not assert any entitlement to the property that has been recovered, either in some personal capacity or on behalf of Pacific Plastics.
The fifth defendant is Chubb Insurance Co of Australia Ltd ("Chubb"). Chubb positively contends that it is a person who is "lawfully entitled" to nineteen of the twenty items of property within the meaning of s 219(1)(a) of LEPRA. None of the other parties to the proceedings opposes an order being made in favour of Chubb to reflect this asserted entitlement. Nevertheless, Chubb accepts that it bears an onus of positively establishing that entitlement (see Carolan v State of New South Wales and another [2013] NSWSC 1593 at [7]).
Chubb issued a so-called "Masterpiece Personal Insurance" policy covering the period in which the property was taken from Mr O'Mara's residence ("the policy"). The named insureds for the policy were Mr O'Mara, "Vicinity Apartments Pty Ltd & O'Mara Management Pty Ltd Atf The O'Mara Management Trust", Pacific Plastics and "44 New Beach Road Pty Ltd Atf 44 New Beach Road Discretionary Trust". The last named company can be ignored. The company "O'Mara Management Pty Ltd" was another company associated with Mr O'Mara which is also now in liquidation. For reasons that follow, I am satisfied it does not have any interest in the property the subject of this application.
On or about 23 August 2010 a claim was made on the policy in respect to the items taken from Mr O'Mara's residence. Chubb paid out under the policy in respect of nineteen of the twenty items the subject of these proceedings. The one item that was not the subject of any payment by Chubb was the silver bowl to which I have referred.
Four of the items, the subject of Chubb's payment, were specifically listed in the policy's coverage summary as being covered by the "Valuable Articles" section of the policy, namely the paintings "Rita of the Seventies" by Norman Lindsay, "Capricorn Haze" by Tim Storrier, "Dreamer in the Glen" by David Boyd, and "Adieu Australia" by Garry Shead.
Another painting, "Voyeur V" by Martine Emdur, was also paid out under this section of the policy on the basis that it was covered by an extension found within the coverage summary. This extended coverage "against physical loss or damage to valuable articles while stored at or displayed [at an address in Meadowbrook Queensland] subject to the terms, conditions and exclusions stated in the policy".
One difficulty with this is that the article was taken from Mr O'Mara's residence in Darling Point. Nevertheless, a claim was made on that section of the policy and paid out. It appears that the parties to the contract treated the address listed in the extension as a mistake and accepted that it should be a reference to Mr O'Mara's Darling Point address. Critically, the significance of the fact that this payment was made concerns a clause in the policy, to which I will return, which grants Chubb rights of recovery if it makes a "payment under this policy". This was clearly a payment under the policy.
The other fourteen items the subject of Chubb's application were paid out pursuant to the "Deluxe Contexts" section of the policy. Ultimately, the total amount of $1,033,473 was paid out by Chubb.
At this point two matters should be noted. First, it is clear from the material that Mr O'Mara and Pacific Plastics funded the purchase of a number of the items the subject of this application through a financing firm Rentmix Ltd. Rentmix' Managing Director, Andrew Noble, has sworn an affidavit. In his affidavit he attaches a statement he gave to the police. He affirms its correctness. In that statement Mr Noble confirmed that Rentmix had been paid all the monies it financed to purchase the relevant art works. I am satisfied it has no claims in respect of the property the subject of this application.
Second, the coverage summary listed one of the insured entities as "O'Mara Management Pty Ltd" but only as trustee for the "O'Mara Management Trust." Some of the documents submitted in support of the claim to Chubb confirm that O'Mara Management purchased various items of art work in its capacity as a trustee. However, other documents are silent as to whether O'Mara Management acquired items in that capacity or not.
Nevertheless, in light of the fact that documents making that clear were submitted and Chubb paid out, I am satisfied that the parties treated "O'Mara Management Pty Ltd" as the insured and did not restrict it to only being insured in its capacity as a trustee. In any event, as I have indicated, Chubb paid out on the policy and that still constitutes a payment "under the policy".
The question still remains however as to what is Chubb's lawful entitlement to nineteen of the twenty items of property the subject of this application. To that end, the policy contained a clause entitled "Transfer of rights" which provides:
"If We make a payment under this Policy, We will assume any recovery rights a covered person has in connection with that loss, to the extent We have paid for the loss.
All of Your rights of recovery will become Our rights to the extent of any payment We make under this Policy. A covered person will do everything necessary to secure such rights and do nothing after a loss to prejudice such rights. However, You may waive any rights of recovery from another person or organisation for a covered loss in writing before the loss occurs."
Counsel for Chubb provided detailed written submissions concerning the operation of this clause. I mean no disrespect to the detail of those submissions by concluding that it is sufficient for the purposes of this application to apply its plain terms such that, as between Chubb and the named insureds, the effect of Chubb's payment meant that it assumed, that is acquired, any "recovery rights" which clearly extended to the rights of the insureds to recover possession of the relevant items of property. Any doubt about that is dispelled by also considering the "Recoveries Clause" of the policy which provides:
"If We pay for covered loss of property and We recover that property, We agree to offer You an opportunity to buy it back. We will offer it to You at no higher an amount than We paid to You for that property."
This clause clearly assumes that, as between the insured and Chubb, Chubb is entitled to possession of the property unless the insured takes up the opportunity to buy the property from Chubb.
In my view, the transfer of rights clause more than suffices as a basis to found an order under s 219 of LEPRA for the delivery to Chubb of nineteen of the twenty items claimed.
The final item is, as I have stated, the silver bowl. Chubb does not seek an order for delivery of that bowl as it did not make any insurance payment in respect of it. The State seeks an order that it be forfeited to it. All that is known about the bowl was that it was at the residence occupied by Mr O'Mara and then later recovered from the residence of the parents of his caretaker. Of itself those facts might constitute a basis for Mr O'Mara to claim a possessory right. However, he has had every opportunity to make that claim but has declined. Instead, he has indicated he submits to the orders of the Court. Given that the only possible persons who appear to have any possible claims in respect of that bowl consciously chose not to, in my view it is appropriate that the bowl be forfeited to the Crown.
Accordingly, I will make orders 1 to 4 in the draft order that has been provided to me, initialled by me, dated today and placed with the papers. An order will be entered on Justice Link in accordance with its terms, namely:
1 Pursuant to s 471B of the Corporations Act 2001 (Cth), the Applicant has leave to commence, and proceed with, these proceedings against Pacific Plastics (Qld) Pty Ltd (in liquidation) (ACN 094 200 941).
2 Pursuant to s 219(1) of the Law Enforcement (Powers and Responsibilities) Act 2002 (NSW), order that the following works of art be delivered to the Fifth Respondent by the Applicant:
i. "Rita of the Seventies" by Norman Lindsay;
ii. "Capricorn Haze" by Tim Storrier;
iii. "Victoria and Moonlight" by Charles Blackman;
iv. "Gloria" by Norman Lindsay;
v. "Seated in the nude" by Norman Lindsay;
vi. "Adieu Australia" by Garry Shead;
vii. "The Red Gown" by Judy Drew;
viii. "Nude with Red Wrap" by Judy Drew;
ix. "Dreamer in the Glen" by David Boyd;
x. "Nasturtiums, Iris and Blue Vase" by Criss Canning;
xi. "Tree of Life" by John Coburn;
xii. "The Crimson Scarf" by Janet Cumbrae Stewart;
xiii. "The Girl in White" by Robert Dickerson;
xiv. "Wild Orchids" by Pro Hart;
xv. "Voyeur V" by Martine Emdur;
xvi. "Tug Boat, Williamstown Port" by John Perceval;
xvii. "Little Blue Bay, Sirius Cove, Sydney" by Arthur Streeton;
xviii. "Nude with Blue Drape" by Dora Lynell Wilson; and
xix. Sculpture described as "Bronze Temple Dog - Ming Dynasty".
3 Pursuant to s 219(2)(d) of the Law Enforcement (Powers and Responsibilities) Act 2002 (NSW), the item described as 'Silver Bowl' at paragraph 2(xx) of the Amended Summons filed 5 March 2015, be forfeited to the Crown in right of New South Wales.
4 No order as to costs of the proceedings, to the extent that each party bear their own costs.
[3]
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Decision last updated: 17 April 2015