Douglas Financial Consultants Pty Ltd v Price [1991] QSCFC 7 [1992] 1 Qd R 243

10 20 30 40 50 60 IN THE SUPREME COURT OF QUEENSLAND FULL COURT No. 2938 of 1989 BEFORE ; Mr. Justice Thomas Mr. Justice Moynihan Mr. Justice Ambrose BRISBANE, 21 FEBRUARY 199 1 (Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Chief Court Reporter,Court Reporting Bureau.) BETWEEN : DOUGLAS FINANCIAL CONSULTANTS PTY . LTD. (Plaintiff) Respondent -and- DAVID RUSSELI. PRICE (Defendant) Appellant JUDGMENT MR. JUSTICE THOMAS: In my opinion the appeal should be allowed with costs. I publish my reasons. I intend to seek further submissions as to the form of the order that will foilow . MR. JUSTICE MOYNIHAN: I agree with the order proposed by the presiding judge once there is a resolution, as it were, in respect of the final form of the order, and for the reasons which he publishes, and I also agree with the reasons about to be published by my brother Ambrose. MR. JUSTICE AMBROSE: I would allow the appeal and hear submissions on the form of order sought. I would also order that the respondent pay to the appellant his costs of the REVISED COPIES ISSUED Court Reporting Bureau Date: Li I \D I -'lovt. Printer, Qid. l [1991] QSCFC 7 -- 1 of 45 -- appeal to be taxed, and I publish my reasons. MR. JUSTICE THOMAS: In the light of the absence of any facts or grounds being suggested which raise any litigatable issue between the parties, and in view of the original 10 10 arrangement which apparently conceded that there was no further issue and that the result of the action should abide the result of the summary judgment application, it would seem that the appropriate order that follows the allowing of this appeal is that there should be judgment for the defendant in the action. Accordingly, the order of the Court will be: appeal allowed with costs, summons dismissed, and judgment for the defendant in the action with costs to be taxed. 30 30 40 40 50 60 60 —Govt. Printer, Qld. 2 \ -- 2 of 45 -- IN THE SUPREME COURT fe q i joG^ OF QUEENSLAND FULL COURT WRIT NO. 2938 OF 1989 BETWEEN : AND: DOUGLAS FINANCIAL CONSULTANTS PTY LTD (Plaintiff) Respondent DAVID RUSSELL PRICE (Defendant) Appellant THOMAS J MOYNIHAN J AMBROSE J Reasons for judgment delivered by Thomas and Ambrose JJ on 21st February, 1991. Moynihan J agreeing with the reasons and orders of Thomas and Ambrose JJ. "APPEAL ALLOWED WITH COSTS, SUMMONS DISMISSED AND ORDER THERE BE JUDGMENT FOR THE DEFENDANT IN THE ACTION WITH COSTS TO BE TAXED." -- 3 of 45 -- IN THE SUPREME COURT OF QUEENSLAND FULL COURT No. 2938 of 1989 Before the Full Court Mr. Justice Thomas Mr. Justice Moynihan Mr. Justice Ambrose BETWEEN: DOUGLAS FINANCIAL CONSULTANTS PTY . LTD. (Plaintiff) Respondent AND: DAVID RUSSELL PRICE (Defendant) Appellant REASONS FOR JUDGMENT - THOMAS J. Delivered the 21st day of February, 1991. CATCHWORDS: Motor Vehicles - Conflict of Laws - Security granted and held in New South Wales - Series of sales without title - No registration of security interest in Queensland - Ultimate sale in Queensland to bona fide purchaser for value without notice - Whether s. 26 of Motor Vehicles Securities Act (Old.) applies to extinguish title of original holder of security interest - No need for restricted territorial limitation to be read into Act. Motor Vehicles Security Act ss. 26, 39: s. 5 definition "security interest" . Counsel: Mr. Andrews for Appellant Mr. Perry for Respondent Solicitors: Nicol Robinson & Kidd town agents for Wilson & Copley for Appellant Hopgood & Ganim for Respondent Hearing date: 13th November, 1990. -- 4 of 45 -- IN THE. SUPREME COURT OF QUEENSLAND FULL COURT No. 2938 of 1989 BETWEEN: DOUGLAS FINANCIAL CONSULTANTS PTY . LTD. (Plaintiff) Respondent AND : DAVID RUSSELL PRICE / (Defendant) Appellant REASONS FOR JUDGMENT - THOMAS J. Delivered the 21st day of February, 1991. This is a defendant's appeal against summary judgment'for $45,000.00 and interest. The litigation follows a sequence of sales of a Mercedes Benz coupe motor vehicle. The story starts in 1985 when Beneficial Finance Corporation Limited ("Beneficial") was the owner of the car. It leased it to one Schaffer for a period of four years. In February 1986, without any right to do so, Schaffer sold it to the appellant ("Price") for $22,000.00 or its near equivalent. In June 1987 Price sold the car to the plaintiff/respondent ("Douglas") for $45,000.00.. In June 1989 Douglas was compelled to surrender the vehicle to Beneficial when an officer of the Queensland Police, acting upon a complaint by Beneficial, required him to do so. Douglas then sued Price for $45,000.00 as moneys paid for a consideration which had wholly failed. At common law, Beneficial remained the owner of the car at all material times. None of the sales would confer valid title, because nemo dat quod non habet - no-one can give what he does -- 5 of 45 -- 2 not have. The only basis upon which Price could claim that Douglas received any title was through reliance upon s. 26 of the Motor Vehicles Securities Act 1986. According to the submissions made on behalf of Price, this had the effect of extinguishing Beneficial's interest in the car, and giving good title to Douglas. If that is correct then Douglas has no claim against Price. It may be observed that Beneficial is not a party to this litigation. This. Court's determination will bind Douglas and Price inter se, but will not bind Beneficial. However in order to determine the rights of Douglas and Price in relation to each other it is necessary to deal with.the question of the alleged extinction of Beneficial's interest. In the present matter relevant interests arose and relevant events occurred in New South Wales and in Queensland. It will be necessary to ascertain whether the proper interpretation of the Motor Vehicles Securities Act requires it to be applied to such events and interests, and in particular whether that Act causes the extinction of Beneficial's interest. Beneficial's lease to Schaffer was made in New South Wales in 1985. The proper law of that transaction was that of New South Wales. By February 1986 Schaffer had taken the vehicle to Queensland. It still had a New South Wales' registration number. Schaffer, claimed to be the owner of the car and he sold it to Price in Queensland. No documents were produced in relation to this transaction but the evidence shows that it was finalised in March 1986. Thereafter Price had possession of the vehicle in Queensland and. when registration fell due it was renewed in -- 6 of 45 -- 3 Queensland. Finally, the sale from Price to Douglas occurred in Queensland in June 1987. At material times there came into operation various legislative provisions in both New South Wales and Queensland relating to the registration of security interests in motor vehicles. On 1st August, 1986 relevant provisions of the Registration of Interests in Goods Act 1986 (N.S.W.) were proclaimed to take effect; and on 1st December, 1986 relevant provisions of the Motor Vehicles Securities Act 1986 (Qld.) were proclaimed to take effect. Both Acts have similar although by no means identical provisions which enable the registration of interests in relevant goods (which for the purposes of the present discussion will be limited to motor vehicles). So far as it is relevant to the interest of a lessor of a motor vehicle, under the New South Wales Act "registrable interest" is defined to include the interest in the goods of a lessor of them; and under the Queensland Act, "security interest" is defined to include an interest in a motor vehicle by way of security in respect of a liability arising in connection with a lease. It expressly includes "the interest of ... a lessor in respect of the liability of a lessee". Of course the primary interest of the lessor under the familiar system of leasing of motor vehicles is that of an owner who acquires or agrees to acquire the vehicle for the purpose of the lease (see cl. 3 of the leasing agreement), and who leases the vehicle to the lessor giving no property or interest to him other than that of a bailee. Whilst I have some reservations as to the appropriateness of the definition in the Queensland Act to comprehend the lessor's -- 7 of 45 -- rights of ownership, it would seem that such ownership may be said to be an interest that arises in respect of the liability of the lessee, and thus to fall within the definition. Each Act is therefore prima facie couched in language capable of application to Beneficial's interest as owner-lessor under its lease . Each Act provides for a system of registration of security interests and provides for potential divesting of the interest of the security holder upon the sale of a vehicle when a person entitled to register a relevant interest fails to do so. When Schaffer sold to Price neither Act was in force (so far as relevant provisions are concerned). When Price sold to Douglas both Acts were in force (so far as relevant provisions are concerned) (see Q.G.G. 26th July, 1986 p. 2283; Q.G.G. 1st November, 1986 p. 1353). Beneficial at no time registered its interest, either in New South Wales or Queensland. Section 26(1) of the Queensland Act provides - "26. Extinguishing of security interest. (1) Where a person is the holder of a security interest in a motor vehicle and a purchaser purchases or purports to purchase an interest in that motor vehicle for value and- in good faith and without notice of the security interest at the time he pays the purchase price (or, where the price is not. paid at any one time when he first pays part of the purchase price)- (a) the security interest in that motor vehicle is extinguished; and (b) the purchaser acquires the interest purchased or putatively purchased in that motor vehicle free from the security interest." The corresponding provision in New South Wales is more complex, and contains differential provisions according to -- 8 of 45 -- 5 whether the vehicle is purchased from a dealer. However it is sufficient for present purposes to note that under s. 9(2) of the New South Wales Act, where prescribed goods are the subject of a registrable interest and are purchased in good faith for value without notice of the registrable interest at the time of payment of the purchase price, the property in the goods of the creditor who has the registrable interest is divested from him and vested in the purchaser, and the purchaser acquires the goods freed and discharged from the registrable interest. The question of notice is dealt with differently by the respective Acts. It is unnecessary to attempt a summary of the New South Wales provisions. The Queensland Act provides in s. 13 that, except where otherwise prescribed, a person has notice of a security interest where at the material time he has actual notice of it, or where the security instrument is registered or. where he has been put on inquiry as to the existence of the security interest and abstains from inquiry when he might reasonably have expected it to reveal the security interest. It would seem that there has been some interstate co-operation in this area and that since 1986 several States (including New South Wales and Queensland) have introduced broadly similar registration systems in relation to security interests in relation to chattels (including motor vehicles), with similar provisions for the extinction of the security interest in favour of bona fide purchasers for value without notice. Registration of the security interest of course enables the holder of that interest to prove appropriate notice. Such provisions exist for example in the Chattels Securities Act 1987 -- 9 of 45 -- 6 (W.A. ) s. 7. .1 do not pretend to have examined the position in the other States and Territories, and for present purposes will confine attention to the three States already mentioned. There would seem to be an ultimate objective of deeming registration in one State equivalent to registration in another "recognised" or "participating" State. Each Act contains provision for the proclamation of recognised or participating States, but it is sufficient to mention s. 39 of the Queensland Act (which was inserted by the Motor Vehicles Securities Act Amendment Act of 1986). It provides - "39. Recognized States. (1) The Governor in Council - (a) if he is satisfied that in another State or territory, the law for the registration of security interests is such as to enable reciprocal arrangements to be made with this State in relation to the recording and dissemination of information as to security interests registered in that State and this State, may, by Order in Council, declare that other State or territory to be a recognized , . ■ ■ State; and (b) may, by Order in Council, vary or revoke a declaration under paragraph (a). (2) Upon registration of a security interest with the person authorized by the law of a recognized State to register security interests and for so long as that registration remains current, the provisions of sections 13(b) and 22 apply as if the instrument evidencing the security interest had been registered under this Act and that registration had taken effect ." That provision was proclaimed to take effect from 1st December, 1986 (Q.G.G. 1st November, 1986, p. 1353). However there has been no declaration by the Governor in Council of any other State as a recognised State. The end result of this legislative O o o -- 10 of 45 -- 7 provision, when an appropriate declaration is made (e.g. proclaiming New South Wales to be a recognised State), will be that interests registered in that State will be deemed to be registered under the Queensland Act. In short it will facilitate Queensland registration by persons outside the State. Such provisions in no way suggest any intention to cut down the apparently general operation of s. 26 upon transactions and chattels to which it applies. Thus the legislation in these three States has set up a framework which may eventually give the owners of security interests the advantage of interstate notice of registration. In the meantime each Act is already in force in its own State, and in order to obtain the benefits of registration in relation to sales of the chattel within that State the holder of a security interest must register his interest in that State. If he fails to do so, there are provisions which will give bona fide purchasers (etc.) the advantage of good title when there has been no registration or notice. But there is no uniformity in the prescription of the vehicles or security interests that are to be so affected. For example on 28th August, 1987 the operation of s. 9 of the New South Wales Act (and in turn s. 10) was, by ministerial notification in the Gazette (N.S.W. G.G. No. 126 of 1 August, 1986, p. 3713), so far as motor vehicles are concerned, limited to vehicles registered in New South Wales. There is no such limitation upon the operation of the Queensland Act. In Western Australia there is an express provision that "if a security interest over goods situated in another State or in a Territory is extinguished . . . under the provisions of a law of -- 11 of 45 -- 8 that State or Territory declared under s. 3(8) to be a corresponding law of that State or Territory for the purposes of this Act, that interest is also extinguished ... for the purposes of the law of Western Australia" (s. 11(1) of the Western Australian Act). It may also be noted in passing that the New South Wales now expressly defines "registrable interest" as applying to interests whether they arise under the law of New South Wales or the law of a participating state (s. 3(1)). However such a provision was inserted into that Act only in 1989. It is not difficult to foresee that when all the schemes of the participating States are in force there will be a system whereunder the holder of a security right in relation to a vehicle in the participating States will know that he can protect his interest in all participating States merely by registering his interest in one of them, and that if he fails to do so his interest may be subject to extinction by a sale in any of those States. Of course each Act must be construed according to its own words. I have referred to the three separate legislative measures principally to ascertain the degree of commonality that exists, and to understand how the system might work in relation to a vehicle that might go from State to State. It seems to me that until such time as provision for deemed registration has been duly made in recognised States, the prudent security holder will arrange to register his interest in all States which have divesting provisions such as s . 26 if there is a risk that the vehicle might be taken to that State. -- 12 of 45 -- 9 What then is the correct construction of s. 26 of the Queensland Act in relation to the purported sale in Queensland of a vehicle situated in Queensland? It was by a process of construction that the learned chamber judge concluded that s. 26 was not intended to apply to a sale that would extinguish a security interest when the proper law of the security interest was New South Wales. Careful examination is always required of legislation that might be taken as applying to transactions and rights situated beyond the jurisdiction of the legislature concerned. Decisions earlier in this century sometimes referred to a "presumption" that legislation (whether State, Commonwealth or British) was restricted in its operation within territorial limits ( Jumbunna Coal Mine N.L. v. Victorian Coalminer's Association (1906) 6 C.L.R. 309, 363; Mynott v. Barnard (1939) 62 C.L.R. 68, 75, 79, 90-91 ). As O'Connor J. observed in the Jumbunna case (above) "most statutes, if their general words were taken literally in their widest sense, would apply to the whole world, but they are always read as being prima facie restricted in their operation within territorial limits". Whilst the language of "presumption" and of "territorial" limitation has fallen into disuse, courts do not readily anticipate that a parliament intends its legislation to apply to people in other countries. Of course the context may indicate a clear intention to affect conduct or transactions beyond the limits of the enacting State, and where the intention to do so is clear, the question becomes one of constitutional right or power to do so. A convenient starting point in relation to this latter question -- 13 of 45 -- is Broken Hill South Limited v. Commissioner of Taxation (N.S.W.) (1936) 56 C.L.R. 337, 375 - "The power to make laws for the peace, order and good government of a State does not enable the State Parliament to impose by reference to some act, matter or thing occurring outside the State a liability upon a person unconnected with the State whether by domicil, residence or otherwise. But it is within the competence of the State legislature to make any fact, circumstance, occurrence or thing in or connected with the territory the occasion of the imposition upon any person concerned therein of a liability to taxation or of any other liability." (Cf.. Pearce v. Florenca (1976) 9 A.L.R. 289; Ex parte Iskra (1964) 80 W.N.N.S.W. 923.) It is unnecessary to discuss the aspect of constitutional power at any length, because quite plainly the existence of the car within Queensland and the sale of it within Queensland afford a sufficient connection and circumstance to enable the Queensland Parliament, if it sees fit, to legislate concerning the disposition of the car and of the title to it. ( Goodwin v. Jorgensen (1973) 47 A.L.J.R. 376, 376 IID, 378 I A-C, 3801; Hunt v. B.P. Exploration Co. (Libya) Ltd. (1979-1980) 144 C.L.R. 565, 572). As Dixon J. observed in Broken Hill South Limited v. Commissioner of Taxation (N.S.W.) ( above), "no doubt there must be some relevance to the circumstances in the exercise of the power. But it is of no importance upon the question of validity that the liability imposed is, or may be, altogether disproportionate to the territorial connection ..." The present case is not in my view one concerned with constitutional power, but rather with the question of construction, and determination of the question whether s. 26 of the Queensland Act should be taken to have intended to extinguish -- 14 of 45 -- 11 the title of an interstate owner who fails to avail himself of the benefits of registering his interest in Queensland. In the area of contract law, the courts have sometimes limited the application of a State enactment to contracts whose proper law happens to be the law of that State ( Barcello v. Electrolytic Zinc Co. (1932) 48 C.L.R. 391; Wanganui Ranqitiki Electric Power Board v. Australian Mutual Providence Society (1933-1934) 50 C.L.R. 580, 600-601). In Mynott v. Barnard (above) Latham C.J. regarded those cases as "special", observing that they dealt with the applicability of a statute which altered the obligations of mortgages,, and that the question had been determined by adopting the principle that a legislature "in intervening for the purpose of varying existing contractual relations, might reasonably be supposed to be intending to deal with such obligations only where they were obligations created by contracts, the governing law of which was that of the country of the legislature in question". Dixon J. expressed his view thus in the Wanganui Ranqitiki case (above) at p. 601. "The rule is one of construction only, and it may have little or no place where some other restriction is supplied by context or subject matter. But, in the absence of any countervailing consideration, the principle is, I think, that general words should not be understood as extending to cases which, according to the rules of private international law administered in our courts, are governed by foreign law." This introduces the concept of private international law, and its frequent recourse to the proper law of the transaction. On this basis, the New South Wales statute that on its face gave unrestricted application of a moratorium upon mortgage debts was -- 15 of 45 -- held not to apply to a debt situated in New Zealand and subject to New Zealand law. Dixon J.'s views may be thought to have been read down somewhat by Barwick C.J. in Hunt v. B.P. Exploration (above pp. 569-570), when His Honour summarised them thus - "The passages from Barcelo's Case and the Wanganui-Rangitikei Case to which we were referred relate to a settled rule of construction that where the generality or universality of the words of a statute would give it an effect or operation on matters or things governed by foreign law, that generality or universality will be qualified so as to limit the effect and operation of the Act to matters and things within the legislative competence of the enacting legislature. In the Act with which the Court was dealing in these cases there were general words which, being given universal or unrestrained operation, would exceed the legislative competence of the respective legislatures. There was therefore need to connect their terms with the jurisdiction of the legislating State which, basically, is territorial." In Kays Leasing Corporation Ptv. Ltd, v. Fletcher (1964) 116 C.L.R. 124, the judgment of Kitto J. reveals a similar interpretation of the Wanganui Ranqitiki case to that mentioned by Latham C.J. in Mynott v. Barnard . The question was whether certain provisions in the New South Wales Hire Purchase Act which purported to make a hire purchase agreement void if entered into in contravention of certain provisions in that Act, applied to a hire purchase agreement entered into in the State of Victoria. The proper law of that hire purchase agreement was Victoria, as the agreement so stated. Kitto J. held that the New South Wales Act should not be construed as applying v to such an agreement, but reached this decision by construing the Act as restricted to contracts entered into in New South Wales rather than to contract the proper law of which was New South Wales (ibid. p. 144). His Honour's disinclination to apply a "proper law" limitation -- 16 of 45 -- 13 stemmed from the observation that where legislation was directed against oppressive practices, "provisions enacted as salutary reforms might be set at nought by the simple expedient adopted in the present case of inserting in an agreement a stipulation that validity should be a matter for the law of some other country" (p. 143). His Honour thought it still necessary to limit the destructive effect of the legislation to those contracts that were entered into within New South Wales, because the concern of the legislature was to prevent an objectionable practice at the point of the making of the agreement. "The intention, I think, must be that the statute shall step in at that point, and therefore whenever an offending hire purchase agreement is entered into in New South Wales" (p. 144). The above instances of "reading down" are rather remote from the language and scheme of the present legislation, but they afford examples of the application of statute law to transactions when an effect might thereby be produced upon rights or obligations in other States or countries. I turn to the Act in question in this case. The long title of the Motor Vehicles Securities Act 1986 describes itself as an Act "to provide for the registration of instruments creating security interests in motor vehicles . . . and for other purposes". Section 6 requires a register to be kept in which there is entered certain details "in respect of each registered instrument". Section 11 provides that apart from priority of instruments an unregistered instrument has no effect "as to the motor vehicle" against any person other than the parties to the instrument. Section 12 deals with questions of -- 17 of 45 -- 14 priorities between successive security interest holders. The learned chamber judge characterised the legislation as applying to those instruments that create security interests, and that certainly seems to be its primary focus at least in relation to the system of registration. But registration is not an end in itself. It is a facility that will enable a security holder to protect himself against loss of his vehicle to a bona fide purchaser for value without notice and which may ensure priority over other security interests. Indeed s. 26 is a core provision of the Act and much of the rest of it is built around that provision. The Act is an example of legislative protection of the bona fide purchaser. Such protection of bona fide purchases for value without notice is by no means novel (compare The Factors Act 1892 ss. 3, 9, 10, and the Sale of Goods Act 1896 ss. 24 and 27). The tension between the rights of original owners and of bona fide purchasers was well identified by Denning L.J. in Bishop Gate Motor Finance Corporation v. Transport Brakes Ltd. (1949) 1 K.B. 332, 336-337 - "In the development of our law, two principles have striven for mastery. The first is for the protection of property; no-one can give a better title than he himself possesses. The second is for the protection of commercial transactions; the person who takes in good faith and for value without notice should get a better title. The first principle has held sway for a long time, but it has been modified by the common law itself and by statute to meet the needs of our times." The legislation in question tips, the scales in favour of protection of the person who takes in good faith and for value, but it also provides a means by which the person with the better title may protect it, namely by the system of registration. There is no good reason why a corporation which parts with -- 18 of 45 -- 15 possession of a vehicle in another State may not obtain appropriate protection under the Queensland Act if there is a risk that the vehicle might be taken to Queensland, or why it should be immune from the consequences that the Act provides if the vehicle is in fact taken to Queensland and sold there. The Act expressly deals with the sale of a vehicle when a security interest exists with respect to it. It is difficult to discern any intention that the legislation should not apply if the security holder happens to have acquired its interest outside Queensland, or that it requires some such limitation. As I read the Act, any security interest can be registered here and there is no need to read down the operative words. The evidence does not clearly indicate the resident status of Beneficial, which is stated in some of the documents to be incorporated in South Australia, as having an address at 285 George Street, Sydney, New South Wales, and as having accounts at various addresses in Queensland, New South Wales, Victoria, South Australia and Western Australia. Plainly Beneficial acquired its security interest in New South Wales. However its ownership is a right in rem. That company may be taken to reside in more than one place. However the evidence in this summary judgment application on this aspect is not sufficiently clear to permit this point to be further pursued. For the purposes of the present discussion I shall assume that Beneficial held that entitlement in New South Wales. The learned chamber judge considered the question as to what law should be applied to the relevant transaction, (i.e. the sale from Price to Douglas in June 1987). His Honour observed - -- 19 of 45 -- 16 "There is no doubt that there is a general principle of private international law that the lex situs governs the validity of the assignment of a chattel and generally regulates the effect of a transfer of a chattel on proprietary rights (see, for example, Dicey and Morris, The Conflict of Laws (10th ed.) p. 555, and Sykes and Pryles, Australian Private International Law (2nd ed . ) pp . 612 and 615)." Although those references support that view in relation to a single assignment, it may well be that a wider view needs to be taken in the case of multiple assignments of the one chattel, where different interests may have arisen in different places at different times. According to Dicey (11th ed.) pp. 942, 948 the following principles may be stated - "Rule 119. - The validity of a transfer of a tangible movable and its effect on the proprietary rights of the parties thereto and of those claiming under them in respect thereof are governed by the law of the country where the movable is at the time of the transfer (lex situs). (1) A transfer of a tangible movable which is valid and effective by the law of the country where the movable is at the time of the transfer is valid and effective in England. Rule 120. - A title to a tangible movable acquired or reserved in accordance with Rule 119 will be recognised as valid in England if the movable is removed from the country where it was situated at the time when such title was acquired, unless and until such title is displaced by a new title acquired in accordance with the law of the country to which it is removed." One may apply the principle stated in r. 119 to the assignment from Douglas to Price. Beneficial can only show a common law title. It obtained no statutory rights. The Registration of Interests in Goods Act 1986 (N.S.W.) gives Beneficial no rights or priorities above those of the common law. Its original common -- 20 of 45 -- 17 O o law title (subject to the effect of any valid statute that displaces the position at common law) would be recognised by both New South Wales and Queensland courts, whether the property were in New South Wales or Queensland. However that common law title subsists only until it is displaced by a new title acquired in accordance with the law of the country to which the chattel has been removed, namely Queensland (r. 120). Thus if a new title were acquired under Queensland law overriding prior titles, the earlier title acquired in New South Wales is displaced. This would appear to be the effect of the Queensland legislation. It. simply provides that a later transaction which has taken place wholly within Queensland has the effect of overriding prior titles. The effect is similar to the conferring of a new and valid title upon a purchaser under the Factors Act. If the prior title had been acquired in Queensland or in New South Wales the divesting effect would still be the same. The local law of New South Wales would be applied to determine the effects of transactions which occurred when the goods were in New South Wales; but the effects of transactions which occur when the goods are in Queensland must be decided by the law of Queensland (Dicey ibid., p. 949). If this is the correct statement of the rules of private international law then Queensland law would be applied to the assignment from Douglas to Price equally by Queensland and New South Wales courts. In short, the lex situs with respect to that assignment governs the transaction and any effect that it may have on the proprietary interest. -- 21 of 45 -- 18 One comes to the same result, although by a different route, through the discussion of the problem by Sykes and Pryles, Australian Private International Law . (2nd ed.) where multiple assignments are regarded as affording a special category. Those learned authors have observed "the few decisions of moment in this area show an obvious preference for the second lex situs", and they also suggest that this solutions is to be favoured in principle (see pp. 622-625). The Queensland Act applies directly to what is called the "second transaction", treating it as standing on its own feet, and purporting to regulate title with respect to that chattel (see Sykes and Pryles, pp. 624-625; Sykes on Securities (4th ed. ) p. 962). Some further support for this view may be found in a Canadian decision Century Credit Corporation v. Richard (1962) 34 D.L.R. (2d) 291. That case involved a contest between the original Quebec owner of a motor vehicle, and the ultimate Ontario purchaser of it. The original owner gave possession to a conditional sale purchaser, reserving the ownership to itself (the conditional vendor) and giving possession to the conditional purchaser. That person brought the vehicle into Ontario without the knowledge of the vendor who sold it to a person who purchased it in good faith and without notice. Legislation in Ontario included a Sale of Goods Act and a Factors Act , which enabled a person in possession of goods with the consent of the seller to give a good title in certain circumstances to bona fide purchasers for value. Indeed such visions are virtually identical with s. 27 of the Sale of Goods Act (Queensland) and s. 3 of the Factors Act 1892 (Queensland). These provisions were -- 22 of 45 -- 19 held to give the Ontario purchaser an absolute title, and it was held that the Quebec owners title was thereby displaced by the valid sale in Ontario. The decision was a direct application of the principles of private international law stated by Dicey. Kelly J .A . (delivering the judgment of the court) observed - "if the laws of Ontario provide that a later transaction which takes place wholly within Ontario has the effect of overriding prior titles, then since Ontario does not seek to give its laws any extra-territorial effect the laws of Ontario prevail and the title created under the laws of Ontario displaces the title reserved in the Quebec transaction." (Pages 293-294; Compare "Conditional Sales and the Conflict of Laws" - J.S. Ziegel 1967 45 Can. Bar Rev. 284.) The learned chamber judge, having opted for the application of the lex situs, went on to observe that "that does not necessarily mean that s. 26 of the Queensland Act applies to the transaction of 26th June, 1987 so as to extinguish the interest of Beneficial", thus reserving a question of construction of the Queensland Act. Against the above background it is difficult to find warrant for any reading down the Queensland Statute. If one applies the principle of construction stated by Dixon J. in the Wanganui Rangitiki case above that "general words should not be understood as extending to cases which, according to the rules of private international law administered in our Courts, are governed by foreign law", the consequences of this particular transaction would be governed by Queensland law, wherever the litigation were to be conducted. Section 26 is therefore not a provision which should have its operation curtailed by the application of this principle of construction. -- 23 of 45 -- Section 26 deals with the purchase of motor vehicles in which some person holds a security interest. Its operation should be limited to sales effected in Queensland because it seems unlikely that the Queensland Parliament was intending to regulate such sales in other States any more than the New South Wales Parliament in s. 9 of its Act or the Western Australian Parliaments in s. 7 of its Act were intending to regulate such sales in other States. Such a limitation (sometimes called peremptory application) is consistent with the cases already cited including Barcello. Wanganui. Mvnott. Kavs Leasing and Goodwin v. Jorgensen (above), but it is difficult to see any further warrant for excluding from the operation of s . 26 those transactions where the proper law of the security interest is not that of Queensland. Such a limitation introduces an unwarranted artificiality. The decision of Ryan J. in Woods v. Nissan Finance Corporation Limited (1987) 5 M.V.R. 435 is an application of the Motor Vehicles Securities Act 1986 consistent with the above analysis. In that case the interest of the owner (a hire purchase company which obtained its security interest in the Northern Territory and which failed to register its interest in Queensland) was extinguished in favour of a purchaser who acquired the vehicle in Queensland without notice of any security interest for value and in good faith. It may be useful to test whether the above analysis leads to any absurdity or inconvenience. It would follow that upon purchasing the vehicle Douglas succeeded in extinguishing the title of the New South Wales owner and that Beneficial's -- 24 of 45 -- 21 subsequent repossession was unlawful. The vehicle is now presumably in New South Wales in the possession or disposition of Beneficial or a successor in title. Douglas may bring an action in New South Wales against Beneficial to recover the vehicle, or in Queensland for damages arising from unlawful repossession. His title would be based upon the effect of the Queensland Statute upon Beneficial's interest in the light of events that occurred in Queensland, including the failure of Beneficial to register its interest in Queensland. If the above construction is correct, the statute will be so construed by both Queensland and New South Wales courts. On the footing that the lex situs of the chattel should determine the question of title at the time of the transaction in question, it would be determined that the Queensland Act operated to extinguish Beneficial's title in 1987. I turn to the question whether the extinction of Beneficial's interest involves a retrospective application of the Act. This was argued only faintly. The submission is that there are no provisions in the Act which apply the scheme of the legislation to property rights which existed prior to the passing of the Act. The answer to the submission is that s. 26 applies prospectively to sales of vehicles within Queensland that occur after the commencement of the Act, i.e. after 1st December, 1986. The sale (Price to Douglas) occurred in June 1987. It is true that one of the prescribed consequences of that transaction has an effect upon an interest that existed before the commencement of the Act, but that is not the consequence of any retrospective application. There is a distinction between the commencement of -- 25 of 45 -- 22 an Act and the scope of its application once commenced. Once commenced an Act may impinge upon rights and obligations in existence before that date. Section 26 discloses an intention with reasonable certainty to prescribe the consequences of sales that occur after the commencing date, and it should be given effect ( Maxwell v. Murphy (1957) 96 C.L.R. 261, 267). The appeal should be allowed with costs. Further submissions will be received on form of order. -- 26 of 45 -- IN THE SUPREME COURT OF QUEENSLAND FULL COURT No. 2938 of 1989 Before the Full Court Mr. Justice Thomas Mr. Justice Moynihan Mr. Justice Ambrose BETWEEN : AND: DOUGLAS FINANCIAL CONSULTANTS (Plaintiff) Respondent DAVID RUSSELL PRICE (Defendant) Appellant REASONS FOR JUDGMENT - B.W. AMBROSE J. Delivered the 21st day of February, 1991 Counsel : Mr. Andrews for Appellant Mr. Perry for Respondent Solicitors : Nicol Robinson & Kidd town agents for Wilson & Copley for Appellant Hopgood & Ganim for Respondent Hearing Date: 13th November, 1990 -- 27 of 45 -- IN THE SUPREME COURT OF QUEENSLAND FULL COURT No. 2938 of 1989 BETWEEN : DOUGLAS FINANCIAL CONSULTANTS (Plaintiff) Respondent AND : DAVID RUSSELL PRICE (Defendant) Appellant REASONS FOR JUDGMENT - B.W. AMBROSE J. Delivered the 21st-day of February, 1991 This is an appeal by a defendant against whom summary judgment was given in favour of the respondent for the sum of $45,000.00 together with interest from 26th June, 1989 to date of judgment. The appellant who conducted business as a motor vehicle dealer on the Gold Coast sold a Mercedes Benz coupe motor vehicle to the respondent on 26th June, 1987. The respondent's cause of action was for moneys paid for a consideration which wholly failed in that the appellant did not transfer title to that motor vehicle. The facts relevant to the case may be shortly stated. On 8th May, 1985 Beneficial Finance Corporation Limited ("Beneficial") leased the motor vehicle in question to a Mr. Schaffer of Woolahra in the State of New South Wales for a period of four years. In February 1986 the appellant met Schaffer in Queensland. Schaffer had the motor vehicle in his possession. Although the -- 28 of 45 -- 2 lease between Schaffer and Beneficial was still on foot Schaffer did not inform the appellant of this fact but claimed to be the owner of the motor vehicle and produced documentary evidence to Support this claim. Eventually Schaffer transferred the motor vehicle to the appellant in exchange for another motor vehicle together with a cash payment. The transaction between Schaffer and the appellant in which Schaffer purported to transfer the motor vehicle in question was finalised on 23rd March, 1986. After this transaction between Schaffer and the appellant legislation was passed both in New South Wales and in Queensland concerning the effect of such a transaction upon an interest such as that held by Beneficial in the motor vehicle; on 1st August, 1986 the Registration of Interest in Goods Act 1986 (N.S.W.) came into operation. On 1st December, 1986 the Motor Vehicles Securities Act 1986 (Qld.) came into operation. It seems clear that the issue between the appellant and the resppndent in this case depends upon the effect of that Queensland legislation. On 26th June, 1987 the appellant agreed to sell the motor vehicle to the respondent. Upon completion of this agreement the registration of the vehicle was transferred from the name of the appellant to that of the respondent. It seems clear that at no material time did either the appellant or the respondent have any notice of any interest which Beneficial had in the motor vehicle. The respondent enjoyed the use of the motor vehicle which it had purchased from the appellant for nearly two years until on 26th June, 1989 it was compelled to surrender possession of it to a Queensland police officer acting upon a complaint made -- 29 of 45 -- 3 by Beneficial who as lessor of the motor vehicle to the man Schaffer claimed to be entitled to it as owner. Upon the hearing of its application for summary judgment the respondent contended that at all material times Beneficial was the legal owner of the motor vehicle and that consequently the appellant was unable to transfer legal title to it when it purported to do so on 26th June, 1987. On behalf of the appellant it is contended that by reason of the provisions of the Motor Vehicles Securities Act 1986 (Qld.) the respondent did get good legal title to the motor vehicle and consequently its claim against the appellant must fail . It was common ground both upon the application for summary judgment and before this Court that the respondent's entitlement to summary judgment depended upon whether or not the appellant transferred title to it in June 1987 which in turn depended upon the effect upon the transaction between them of the Motor Vehicles Securities Act 1986 (Qld.) which came into operation between the time the appellant acquired the motor vehicle from Schaffer and the time he purported to sell it to the respondent. At the time of the sale by Schaffer to the appellant in March 1986 under the law as it then stood both in New South Wales and in Queensland Beneficial as owner/lessor of the motor vehicle retained its title irrespective of the appellant's lack of knowledge of it. The Queensland and New South Wales legislation to which I have referred, although not identical in effect, generally speaking requires persons holding an interest in motor vehicles / -- 30 of 45 -- 4 of the sort which Beneficial held over the motor vehicle in issue to register that interest. If such an interest be not registered then under the Queensland legislation, at least, any purchaser for value in good faith and without notice of that interest at the time he pays the purchase price takes that motor vehicle free of such interest. Upon a sale of a motor vehicle to such a purchaser such an interest is "extinguished" under the Queensland legislation. Under the New South Wales legislation purchasers (who are not dealers) from a dealer appear to be similarly protected should a ■ motor vehicle which they purchase be encumbered with a security or a "registrable interest". It is unnecessary to deal in detail with this legislation upon the ( facts of this case. In construing the Queensland legislation the learned chamber judge concluded that it was "primarily concerned with instruments creating 'security interests' and with the registration of those instruments". His Honour's approach is demonstrated by the following observation in his judgment - ^ "The Act concentrates upon the instrument creating the security interest. It is the 'security interest' which is the real subject matter of the legislation. ( Section 39 aside, the legislation does not by its terms expressly limit the field of its operation; but clearly it must be read down so as to operate within the legislative competence of the Queensland Parliament. Given the provisions in particular that I have referred to above I have come to the conclusion that the Queensland legislation operates with respect to instruments creating security instruments the proper law of which is Queensland. Where the proper law of an instrument creating a security instrument is that of some other State then provided that State is recognised pursuant to s. 39 that instrument may be registered in the State of its proper law and its existence will then be deemed to be known in Queensland." -- 31 of 45 -- 5 l o u It is clear from the way in which the learned chamber judge dealt at some length with matters of principle that he concluded that the critical issue before him was whether s. 26 of the Queensland Act operated at the time of the sale of the motor vehicle by the appellant to the respondent to extinguish the interest which Beneficial held in the motor vehicle as lessor pursuant to its lease agreement with Schaffer made in New South Wales on 8th May, 1985 the proper law of which was that of New South Wales. While of course it cannot be denied that in its express terms s. 26 of the Queensland Act does purport to "extinguish" security interests which are not registered under that Act I am unpersuaded that the extinguishment of such interests is the only concern of the legislation. Similarly I am unpersuaded that the registration of such interests by the holders of them is the only or even the primary concern of the legislation. In my view the primary concern of the legislation is the balancing of the rights of the holders of security interests in motor vehicles who permit persons to clothe themselves with indicia of unencumbered ownership and the rights of persons who in good faith and for value, with no notice of such security interests, purchase those motor vehicles relying no doubt upon such indicia. On my reading of the legislation it provides that a purchaser of such a motor vehicle for value and in good faith without notice of any security interest at the time he pays the purchase price takes that vehicle free of that interest if it has not been registered under the Act. -- 32 of 45 -- 6 Sections 5, 6, 7 and 13(b) of the Queensland Statute have the effect that registration of an instrument creating a security interest under the Act constitutes notice to all persons of that security interest. It is clear then that any person contemplating purchasing a motor vehicle may by enquiry under s. 22 of the Act obtain a certificate containing the particulars of registration of any instrument evidencing a security interest in that motor vehicle. Under s. 23 of the Act upon payment of the prescribed fee a person may search for and inspect any instrument filed under the Act . In my view the focus of the Queensland Act is upon the sale within Queensland of "encumbered" motor vehicles. Its object is to define the rights of a purchaser for value of a motor vehicle without actual notice of a security interest held by another in it and those of the holder of such security interest. I can find nothing in the legislation which expressly indicates that the "security interest in a motor vehicle" ^ ^ referred to in s. 26(1) of the Act is confined to only those security interests which arise from an instrument the proper law (^J of which is that of Queensland. Indeed s. 39 of the Act rather suggests to my mind that the "security interest" referred to in s. 26(1) refers to such an interest wherever created. Section 39(2) treats, registration of such an interest in another "recognised State" as the equivalent of registration under the Queensland Act. It is pertinent to note that s. 39 in effect deals with "deemed" registration of an interest in Queensland by virtue of its registration in another State; it does not purport -- 33 of 45 -- 7 to deal with the effect of the substantive provisions of s. 26 of the Queensland Act upon a security interest created by an instrument executed in such other State or the proper law of which is that of that other State. It assumes that such an interest may be registered in Queensland - hence the "deeming" provision. The only reason for providing a means for registering such an interest created out of Queensland must be that it comes within the express terms of s. 26 of the Queensland Act. There can be little doubt in my view that the general rule is that it is the lex situs which governs the transfer of chattels when that transfer is.effected by contract. I refer to Cammell v. Sewell (1860) 5 H. & N. 728 157 E.R. 1371, Castrique v. Imrie (1870) L.R. 4 H.L. 414, Inqlis v. Robertson and Baxter (1898) A . C . 616 and Embiricos v. Anglo-Austrian Bank (1905) 1 K.B. 677 - at pp. 683-684. For a discussion of the effect given to legislation in other jurisdictions similar to that under consideration here I refer to an article by J.L.R. Davis - "Conditional Sales and Chattel Mortgages in the Conflict of Laws" (January 1964), Vol. 18, International and Comparative Law Quarterly. The author of that article traces the development of the law on this topic in the common law jurisdictions in Canada and in the United States. At p. 76 the author (writing more than a quarter of a century ago) having analysed in detail many of the North American cases dealing with the point observes - "it appears that some States at least have no central office for recording such interests but merely a number of local county offices and some regulations do not provide for the noting of the security on the document of title to the motor car. It is obvious from the cases noted above that motor cars form by far -- 34 of 45 -- 8 the largest proportion of chattels removed from one State and sold in another and it is in this field of recording security instruments that the greatest good can be achieved to prevent such frauds taking place." Reference to the North American cases illustrates some divergence in views as to the necessity for the holder of a security interest arising from an instrument executed in one State to protect that interest against extinction at the hands of a bona fide purchaser for value without notice in another State, by registering his interest in that other State. In Rennie's Car Sales and Hicks v. Union Acceptance Corn. Ltd . (1955) 4 D.L.R. 822 the appellate division of the Supreme Court of Alberta held that a careful reading of Provincial legislation showed that it referred only to a sale made or a mortgage given or filed within the Province. In that case a sale within the Province was effected before registration of a mortgage of the motor vehicle given in another Province was registered. However after the sale the mortgage was registered within the time allowed for registration of security instruments created outside the Province. The judgment proceeded on the basis that "the common law right of the mortgagee" from another Province was preserved until the expiration of the time limited for filing under the legislation of Alberta; consequently the mortgagee's interest was not defeated by the sale even though it was made before registration. In Inman v. Rowsev (1949) 41 S.O. 2(d) 655 the Supreme Court of Florida upon appeal held that the vendor of a motor vehicle under a conditional contract of sale in California who failed to register his interest in Florida which required such registration -- 35 of 45 -- 9 to protect a purchaser for value without notice could not assert his rights against such a purchaser. In my view the only question to be determined in this case is one of interpretation of the Queensland Act. If one accepts the proposition that the object of the Act is to protect in Queensland the purchaser of a motor vehicle for value and in good faith without knowledge of a security interest against the rights of the holder of that security interest who has failed to register it so that its existence may be discovered by enquiry and search made at the office of the Registrar of Commercial Acts at Brisbane, one must determine whether the legislation is to be construed so as to protect that purchaser only from unregistered security interests created within Queensland and not from such interests created outside Queensland - whether in another Australian State or Territory or elsewhere. I can see no reason to place the suggested constraint upon the application of the Queensland Statute to sales of motor vehicles made in Queensland. It cannot be said in my view that in construing the terms "instrument" and "security interest" particularly where used in ss. 6, 7, 13, 22, 23 and 26 of the Act, the Legislature intended only to refer to security interests in, and instruments creating them executed in Queensland or the proper law of which is that of Queensland. The intent of the Legislature was to define the rights of the purchaser and those of the holder of a security interest at least with respect to the sale within Queensland of a motor vehicle in Queensland. Under the Queensland Act such a security interest may be registered wherever the instrument -- 36 of 45 -- 0 creating it may have been executed. I can see no reason to construe the legislation as depriving a purchaser in Queensland of the rights prima facie given, him by s. 26. against the holder of an unregistered security interest on the ground merely that the proper law of the agreement between the holder of that interest and the vendor or a predecessor in title of the vendor of the motor vehicle concerned is other than that of Queensland. It is clearly open to the Queensland Legislature to enact legislation to.permit in certain circumstances a person without good title to goods to sell goods in circumstances which permit the purchaser to acquire good.title. Thus under s. 22(1) of the Sale of Goods Act 1893 (Eng.) where goods are sold in market ( overt according to the usage of the market the buyer acquires a good title to the goods provided he buys them in good faith and without notice of any defect or want of title on the part of the seller. This rule of course does not operate in Queensland having regard to the provisions of the Sale of Goods Act of 1896. See Sorlev and Stirling v. Surawski (1953) St.R.Qd. 110. However ^ it would clearly be competent for the Queensland Legislature to adopt such a rule by amendment to the Sale of Goods Act if it were so minded. For a consideration of the circumstances necessary for such a sale in England to attract the protection given to a purchaser in good faith without notice of any defect or want of title on the part of the seller see Reid v. Commissioner of Police (1973) 1 Q.B. 551. The purchaser in that case failed to establish one of the essential circumstances to take the protection given by sale in market overt because although the market opened at 7.00 a.m. the purchase was made - 10 -- 37 of 45 -- 11 between that time and sunrise that day which occurred at 8.19 a.m. Consequently the purchase had not been made "in business hours between sunrise and sunset". The goods in that case had been stolen from the true owner and it seems clear from the report that had the sale in market overt been effected between sunrise and sunset the purchaser in the circumstances would have obtained a good title even against the true owner. In Winkworth v. Christie Manson and Woods Ltd. (1980) 1 Ch. 496 Slade J. considered a case where artworks had been stolen from the plaintiff in England and taken to Italy where they had been sold to a defendant under a contract made in Italy in accord with and governed by Italian law. That defendant delivered those works for sale to another defendant who was an auctioneer in England. The plaintiff brought action seeking a declaration that the works of art had at all material times been his property. The defendant who had purchased the paintings in Italy pleaded that under Italian law he had acquired good title. Slade J. held that the general rule was that the validity of a transfer of moveables was governed by the lex situs and if under that law the transferee acquired a valid title then the English Court would recognise it. He held that the question of title to the goods fell to be determined in accordance with Italian law. His Honour adopted the statement of principle in Cheshire and Norths Private International Law (10th ed., 1979) at p. 527 in the following terms - "Therefore it is now established that the proprietary effect of a particular assignment of moveables is governed exclusively by the law of a country where they are situated at the time of the assignment. An owner will be divested of his title to moveables if they are taken to a foreign country and there assigned -- 38 of 45 -- 12 in circumstances sufficient by the local law to pass a valid title to the assignee. The title recognised by the foreign lex situs overrides earlier and inconsistent titles no matter by what law they may have been created." At p. 513 Slade J. observed - "It must be accepted that exclusive reference to the lex situs must cause hardship to a previous owner in some cases. Particularly if his goods have been moved to and sold in a foreign country without his knowledge or consent. Crompton J. however in the passage already quoted from 5 H. & N. 728, 744, 745 in the majority judgment in Cammell v. Sewell expressly recognised that the English law as to stolen goods acquired by a purchaser under sale in market overt might seem harsh to a former foreign owner but expressed the view that it made no difference that such owner did not intend them to be sent to the country where they were sold. The English Court I do not doubt would ordinarily expect a foreign court to apply the principle of Cammell v. Sewell and recognise the title of a person who had acquired a title to goods under English law by virtue of a purchase in England in market overt at a time when they were situated in England. And this will be the case even though such foreign court on an exclusive application of its own law would have recognised a previous owner from whom the goods had been stolen as having a better title. If this would be the attitude of the English Court it could not in my judgment solely on the pretext of a newly formulated exception to the rule in Cammell v. Sewell either logically or reasonably refuse to recognise the title of goods to the person who has acquired a title to them under Italian law by virtue of a purchase in Italy at a time when they were situated in Italy. It makes no difference that the English Court on an exclusive application of its own law would have regarded the previous owner from whom the goods had been stolen in England as having a better title to them." In the Wanqanui-Rangitikei Electric Power Board v. A.M.P. (1934) 50 C.L.R. 581 the High Court considered whether legislation passed in New South Wales aimed at annulling pro tanto obligations upon mortgagors to pay interest applied to a mortgage given over property in New Zealand by a local authority in that country empowered to borrow on the security of that property which required payments of principal and interest to be -- 39 of 45 -- 13 made to the mortgagee in Sydney. It was - contended that the mortgagor in that case was entitled to rely upon the New South Wales legislation as reducing its obligations under the terms of the mortgage. At pp. 600-601 Dixon J. said - "The case is one for applying what I believe to be the well settled rule of construction. The rule is that an enactment describing acts, matters or things in general, words so that if restrained by no consideration lying outside its express meaning its intended application would be universal is to be read as confined to what according to the rules of international law administered or recognised in our courts it is within the province of our law to affect or control. The rule is one of construction only and it may have little or no place where some other restriction is supplied by context or subject matter. But in the absence of any countervailing consideration the principle is I think that general words should not be understood as extending to cases which according to the rules of private international law administered in our courts are governed by foreign law. As the present statute deals with the discharge pro tanto of obligations it ought to be understood as confined to those obligations which arise under the law of New South Wales ... The circumstances of the present case illustrate the soundness of the presumption by which unless a contrary intention appears, statutory provisions are understood as having no application to matters governed by foreign law. For even if the.New South Wales enactment were construed as extending to obligations having some other proper law in no forum out of New South Wales would it be recognised as affecting them. Thus the respondent's society would remain entitled subject to the operation of legislation of New Zealand to enforce the security according to its tenor notwithstanding the construction given to the New South Wales statute, a matter which in any view might make it proper to decline to give the relief sought in these unusual proceedings. For these reasons I think that s. 5 should be confined by construction to those obligations of which the governing or proper law is that of New South Wales." In my view according to the rules of international law recognised in our courts it is within the province of the Queensland Legislature to pass legislation to give effect to a -- 40 of 45 -- 14 sale in Queensland of a motor vehicle in Queensland so that the purchaser in specified circumstances takes a title free of a security interest created by an instrument the proper law of which is one other than that of Queensland. That is the effect really of s. 22(2) of the English Sale of Goods Act and for the reasons given in Winkworth v. Christies Manson and Woods Ltd. (supra) the rules of international law applied in the courts recognise that the title to goods consequent upon a purported transfer of them will be determined according to the lex situs. For reasons of convenience or commercial expediency it seems clear from the authorities to which I have already referred that the application of the lex situs may very well on occasion so operate as to defeat or extinguish a pre-existing interest in the goods transferred held by somebody other than the transferor. Applying the rules of international law recognised by the courts there is no difficulty in construing s. 26(1) of the Queensland Act as referring not merely to security interests the proper law of which is that of Queensland but also to security interests the proper law of which is other than Queensland law. In Century Credit Corporation v. Richard (1962) 34 D.L.R. (2d) at 291 the Ontario Court of Appeal considered a case where the purchaser of a motor vehicle in Quebec under a conditional contract of sale under which the property in the motor vehicle remained in the vendor removed that car to Ontario and sold it to a second purchaser who purchased it in good faith and without notice of the Quebec vendor's interest in it. Kelly J.A. in delivering the judgment of the Court of Appeal held that by virtue of Ontario legislation the second purchaser in Ontario -- 41 of 45 -- 15 acquired a title to the motor vehicle which superseded the interest of the Quebec vendor reserved under his conditional sale to the first purchaser. At pp. 293-4 Kelly J.A. observed Vj "if the laws of Ontario were to seek to invalidate the respondent's title by refusing to recognise that the transaction which took place in Quebec had the effect of continuing the title in the respondent (vendor) this attempt of Ontario law to invalidate a transaction taking place in Quebec would be bad because the validity of a Quebec transaction must be decided according to the laws of Quebec, the lex situs: to the extent that s. 12 of the Conditional Sales Act R.S.O. 1960c61 seeks to make subject to that Act a contract made out of Ontario with respect to goods not then in Ontario but subsequently bought into Ontario it is an attempt to legislate with respect to such a transaction the effects of which are to be decided according to the law of Quebec and for this reason offends against the above-quoted rule 86 (a reference to rule 86 in Dicey's Conflict of Laws (7th ed.) at p. 537). However if the laws of Ontario provide that a later transaction which takes place wholly within Ontario has the effect of overriding prior titles then since Ontario does not seek to give its laws any extra-territorial effect the laws of Ontario prevail and the title created under the laws of Ontario displaces the title reserved in the Quebec transaction." In Goetschius v. Brightman et al (1927) 156 N.E.R. (N.Y.) 660 the Court of Appeal of New York considered a case where the purchaser of a motor vehicle under a conditional contract made in California sold it to a second purchaser in New York who purchased it in good faith and without knowledge of the property interest which the Californian vendor held in the vehicle. Under the legislation of New York then in force the reservation of property rights to vendors under conditional contracts was void against subsequent purchasers unless the contract was filed in a city or town "where the conditional vendee resides" or where the property was at the time. If the conditional vendee resided outside New York and the property was not in the State the -- 42 of 45 -- 16 contract could not. be filed. The Court of Appeal held that the local statute therefore had no application to the Californian contract where in the circumstances compliance with that statute was impossible. It held that in this situation the Californian vendor's title preserved under that contract was recognised in New York. In delivering the judgment of the Court of Appeal, Lehman J. at p. 663 observed - "At least until the owner is in a position where he could protect his rights by filing, the validity of the conditions and reservation in the contract of sale recognised by the common law of California, which is also in effect in this State, except as modified by statute, is not altered by the statutory provisions." On the material in this case there appears to have been no obstacle in the way of Beneficial registering its lease of the motor vehicle in Queensland under the Motor Vehicles Securities Act 1986 prior to the sale by the appellant to the respondent. The evidence clearly establishes that Beneficial made no effort to register its security interest either in New South Wales or in Queensland at any material time. I take the view that it is unnecessary to consider the consequences of Beneficial's failure to register its interest in New South Wales under the legislation of that State, much less what the effect of registration or non-registration required by that legislation may have had on the sale in Queensland between the appellant and the respondent. Similarly it is unnecessary upon the facts of this case to consider the application or effect of s. 26 of the Queensland Act upon a sale outside Queensland of a motor vehicle the subject of an unregistered security interest created by an instrument the proper law of which is that of Queensland. Those interesting matters may involve not merely -- 43 of 45 -- questions of statutory construction of the sort considered in Wanganui-Rangitikei Electric Power Board v. A.M.P. (supra) but also in the event of any conflict between the lex situs of the motor vehicle at the time of its sale and the proper law of the instrument creating the security interest should it be construed to have extra-territorial effect with respect to sales to purchasers without notice, questions of which legal rule ought prevail. To adopt the approach taken by the Ontario Court of Appeal in Century Credit Corporation v. Richard (supra) I would construe s. 26 of the Act as applying to security interests whether the proper law of the instrument creating them be Queensland law or the law of any other place. I see no reason to read down the perfectly plain meaning of the words used because the rules of international law applied by this Court do not make it necessary to do so. I would not construe the effect of s. 26 of the Queensland Act as in any way attempting to legislate with respect to the legal effect in New South Wales of the leasing agreement between Beneficial and Schaffer. I would construe the section merely as providing what legal consequences flow from the contract of sale between the appellant and the respondent where Beneficial had not registered its security instrument under the provisions of the Queensland Act. It is clearly within the competence of the Queensland Legislature to pass legislation which gives to a sale within Queensland of a motor vehicle in Queensland the legal effect of extinguishing a security interest in that motor vehicle. In this -- 44 of 45 -- 18 ■c regard I refer only to Goodwin v. Jorgensen (1973) 128 C.L.R. 374 at 375-6 per Barwick C.J. and at 383 per Mason J. I take the view that to read down the legislation to apply only to a "security interest" created by a security instrument the proper law of which is that of Queensland would be greatly to reduce the beneficial effect of the legislation which is obviously designed to protect bona fide purchasers for value of motor vehicles who have no notice of any security interest in them and who have no means of obtaining notice because the holders of any such interest have failed to register it as provided for in the Act. I. can find nothing in the Act to require it to be so read down. It was not so read down by Ryan J. in Woods v. Nissan Finance Corporation Ltd. (1987) 5 M.V.R. 436 although the point does not appear to have been argued before him. Upon the application for summary judgment the Chamber Judge was asked to enter judgment for the appellant if he succeeded upon the point argued - which is the only point which has been argued upon appeal. I would allow the appeal and hear submissions on the form of order sought. I would order that the respondent pay to the appellant his costs of the appeal to be taxed. -- 45 of 45 --