Grant and Anor v YYH Holdings Pty Limited and Anor [2013] HCATrans 115 (10 May 2013)

Last Updated: 15 May 2013

[2013] HCATrans 115

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S343 of 2012

B e t w e e n -

PHILIP DWYER GRANT

First Applicant

KAREN SANDRA GRANT

Second Applicant

and

YYH HOLDINGS PTY LIMITED

First Respondent

HAMOUD ALI AL-KHALAF TRADING AS TRANSPORTATION EST

Second Respondent

Application for special leave to appeal

HAYNE J
GAGELER J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 10 MAY 2013, AT 12.10 PM

Copyright in the High Court of Australia

____________________

MR M.J. LEEMING, SC: May it please the Court, I appear with my learned friend, MS S. CIRILLO, for the applicant. (instructed by Harris Freidman)

MR M.J. NEIL, QC: May it please the Court, I appear with my learned friend, MR J.H. BISHOP, for the respondent. (instructed by Benjamin & Khoury)

HAYNE J: Yes, Mr Leeming.

MR LEEMING: If it please the Court, the question is as to the operation of the Limitation Act on the facts that can be shortly stated and are uncontroversial. As your Honours know, my clients wrongfully retained a small flock of sheep – rams and ewes. There was a demand for the return of those sheep that was made no later than 31 January 2004. It was refused. Proceedings were not commenced until more than six years later. Those proceedings were in conversion, detinue, contract and estoppel. Contract and estoppel, my clients succeeded and they were not agitated on appeal. My clients succeeded in relation to the original sheep for limitation defence. The case is really about the 393 progeny, the embryos and the doses of semen that had been extracted. It was common ground, at all times, that all of that happened after 2004.

HAYNE J: So, after - - -

MR LEEMING: After the demand had been made.

HAYNE J: Sorry, after - - -

MR LEEMING: The first demand had been made.

HAYNE J: - - - after demand but at a time before the original claim was barred.

MR LEEMING: No evidence of that. I do not cavil with the way that evidentiary vacuum has been addressed by either court below.

HAYNE J: Both the extraction of the reading material and the assertion of possessory rights over the progeny would be separate and distinct acts of conversion, would they not?

MR LEEMING: Your Honour has the point, of course - - -

HAYNE J: What is the answer to it?

MR LEEMING: There is no answer that has been developed so far because there has been no attention given to what we say is the key fact that emerges from section 21. Section 21, of course, not merely renders non-maintainable the original statute barred cause of action for conversion or detinue, it also renders not maintainable those causes of action on its literal text specified in paragraph (b). That is to say, subsequent acts of conversion which, considered alone, would not be statute barred, are statute barred by dint of section 21 which has familiar forms for most of the place.

The key fact is this, your Honour. The very act of impregnating the ewe, the very act of extracting the embryo, the very act of extracting the semen from the ram were, themselves, acts of conversion. We accept completely that the separate embryo, the separate doses of semen, the progeny were separate goods, and that is the way the debate was argued at trial without any consideration to anything else.

HAYNE J: Because your side of the record acquired those separate goods by an act of conversion, what was your side of the record’s right to possession of those items at the instant after they came into existence by extraction, et cetera?

MR LEEMING: None, but the world changes, we say, after 2010 because we say on the - - -

HAYNE J: That is a very broad submission, Mr Leeming.

MR LEEMING: It is, it is broader than I need for the purposes of this application. The world changes for the purpose of the operation of section 21 upon those separate causes of action conversion that my learned friend’s clients would have. They would be entitled to say, in 2006 when you caused that ewe to be impregnated, or when you extracted that semen, that itself was an act of conversion, and my clients are given a defence in relation to that, we say, on its proper construction. The answer to that proposition turns upon – as my learned friends say and it was accepted below – a literal definition of “goods”, and if it be true that on its proper construction 21 is confined to the goods the subject of the less than statute barred cause of action in conversion or detinue, then we will lose in relation to the progeny.

We say, how bizarre it would be though, purposively, if this section which is designed to put an end to litigation after six years of doing nothing after a lawful demand, after a cause of action is accrued, if it were impossible for the true owner to complain in the sense of vindicating court for some reasonable licence fee for the act of converting that is impregnating the ewe cannot do that, that is plainly caught by 21, but can bring an action for detinue in relation to the intended foreseeable natural consequence of that act, namely, getting the progeny.

Now, that is a question that is right or wrong, it turns on the legal meaning of section 21 and that is half of what I want to say. The other half of what I want to say is that there has been no analysis, with respect, either at trial or in the intermediate Court of Appeal, on the other two chattels, the embryos and the doses of semen.

HAYNE J: At what point and by what process did you client acquire a better immediate right to possession of the embryos or the semen than the opposite party?

MR LEEMING: The premise to your Honour’s question is that the opposite party has any right to possession.

HAYNE J: Because its goods were converted and the product of the conversion, I would have thought, does not give the converter a better right to possession of that product than the person who had the initial right to possession of that from which it was converted. Now, if you can follow that proposition you are doing extraordinarily well, Mr Leeming, but I think you understand it.

MR LEEMING: I understand exactly. I do, indeed. It is like I steal an apple tree that is in someone’s pot plant. I put it on my land and an apple falls off it. Who owns the apple, the separate chattel that has come into existence?

HAYNE J: Yes.

MR LEEMING: There is no doubt the question is interesting. There is no doubt the question is not answered by questions of swans in cases that are centuries old, especially when one is talking not about the natural reproductive processes of these animals. We say we win on this. We say there has been no analysis at trial, at the court or in my learned friends’ written submissions. My learned friends have to fail in relation to a claim, the detinue of the genetics, as they were called, unless they can show title; that is to say, ownership of them, that is all they can have. Ownership of those genetics can only come about because of some question of common law, hence the question your Honour, the presiding judge, puts to me, and we say no.

When it is the conduct of the possessors who brought into existence these separate goods – the doses and the embryos and maintained them - there is no relationship to any common law rule about swans and dams. My learned friends cannot point to title. I am not saying there is anything particularly meritorious about this but, ultimately, these questions come down to title, and we say, with respect, nowhere in any of the reasons below - - -

HAYNE J: Title or immediate right to possession?

MR LEEMING: Either will do. I accept completely. I say there is no title, and I say there is no immediate right to possession of the separate good created by reason of the activities, even though they be converting of my clients, there is an overlap here in relation to section 21 because I say at least after 2010 when one cannot complain about the cause of action, that undoubtedly existed for extracting the embryos from the ewes. Again, even I am wrong about the same goods the section 21 argument would apply to the genetics. It is shortly stated, if this Court were minded to grant special leave, it is very hard to see the argument taking more than an hour.

HAYNE J: Appeals to judicial indolence are not often attractive, Mr Leeming.

MR LEEMING: I will do what I can. I think there is nothing else than that that I can say. It is shortly stated. It has not been developed before. It is an argument that was put in the alternative below. We do not understand what the answer is, at least from my learned friends’ written submissions.

HAYNE J: Can I just understand it better than I think I do? Your argument depends, does it, on section 21?

MR LEEMING: Yes.

HAYNE J: It has necessarily been held, has it not, against you in the courts below - whether expressly or implicitly – that the opposite party had either a right to possession of, or ownership of, the genetics and offspring after separation?

MR LEEMING: I accept that. Only, if so, could the orders be sustained.

HAYNE J: Your argument seems – correct me if I am wrong – to accept that that can be so, yet be defeated by section 21. If the premise is wrong, this is an argument I understand, but we never get to section 21. You, in your reliance on section 21, it seems to me, truly confess and avoid but confess the ownership and avoid by the limitation. Now, do please correct me and point out the error in the analysis that may well be there.

MR LEEMING: The fault, if there be fault, is mine for being too elliptic. The argument is legally distinct in relation to the progeny and the genetics. On the progeny, I will fail if the goods – because I accept the progeny of different goods – I will fail unless a purposive construction gives work to actions on the further cause of action – that is to say, the act of conversion on the ewe producing the progeny - does not also prevent detinue in the separate good that is the progeny. I think your Honour has that. In relation to the genetics, that is different because even if I be wrong in relation to the progeny as to what is called the same goods argument - if my learned friends’ textual argument about section 21 - - -

GAGELER J: Can I just interrupt? What do you mean by the genetics? Is that the embryos?

MR LEEMING: Both – 14 embryos, 237 doses - - -

GAGELER J: You draw a distinction between a lamb and an embryo?

MR LEEMING: I do.

HAYNE J: It will move to the Supreme Court of the US at this point, I think.

MR LEEMING: That is not where I am going, as your Honours know. I do because, to the extent there has been analysis of this, we are backing cases of swans and I cannot - - -

GAGELER J: What is the proposition? What is the principle by which you draw a distinction between a lamb and an embryo for these purposes?

MR LEEMING: Lurking behind the statute, when one has cases like this where separate goods come into existence, the common law answers the question – answers two questions – who has title to the new goods and who has an immediate right to possession of them? One might think, in relation to new goods, you are likely to have a similar answer, and your Honour the presiding judge’s distinction has not been fleshed out in our submissions, but we accept and acknowledge it.

What is the answer to that question? Well, we know from the decisions below, developed centuries before assisted reproductive technology that we have seen here, one has regard to ownership of the mother. I say, if that be all there is in the common law principle, it does not answer anything to do with embryos and semen. It is possible, I accept, that on one view of the common law, the embryos are treated differently from the doses because of whether it comes from the mother or the father sheep.

Those questions are wholly unexplored. We would say there is at least an argument – unexplored completely in any of the decisions below – and I do not know what my learned friend says about it.

GAGELER J: Are they explored in your written submissions in the application for special leave?

MR LEEMING: Well, we say, at paragraph 35 on page 91, and conflating there, I accept, title and immediate right to possession, we say, what was relied upon in the courts below is insufficient to deal with embryos and semen, hence, the italicised “rams”. We would say there is at least an argument worthy of consideration that where the act of conversion that causes these genetics is itself the subject of 21 and where that is the conduct of my clients – both at the time and throughout preserving these separate goods – why should that not belong to them?

GAGELER J: Just on that page, paragraph 40, what is the amount in issue?

MR LEEMING: It was entitled to an appeal as a right, as your Honour may have seen from the affidavit evidence, just over a $100,000. This is about costs, to be perfectly candid about it. It seems odd that one has a four day trial with senior and junior counsel in the District Court about this, but that is the position. May it please the Court?

HAYNE J: We will not trouble you, Mr Neil.

We are of the opinion that an appeal to this Court would enjoy insufficient prospects of success to warrant a grant of special leave to appeal. Special leave must be refused.

MR LEEMING: May it please the Court.

MR NEIL: Yes. Costs, your Honour?

HAYNE J: Can you resist costs, Mr Leeming? With costs.

AT 12.26 PM THE MATTER WAS CONCLUDED