Hostick v The New Zealand Railway & Locomotive Society Waikato Branch Inc HC Hamilton CIV 2005-419-1311 [2006] NZHC 807; [2006] 3 NZLR 842; [2006] NZAR 609 (12 July 2006)

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AND THE NEW ZEALAND RAILWAY & LOCOMOTIVE SOCIETY WAIKATO BRANCH INCORPORATED Defendant

This judgment was delivered by me on [ ] at [ am/pm ], pursuant to Rule 540(4) of the High Court Rules.

Rainey Collins, PO Box 689 Wellington (A Knowsley) Tompkins Wake, PO Box 258 Hamilton (JA MacGillivray)

HOSTICK & ANOR V THE NZ RAILWAY & LOCOMOTIVE SOCIETY WAIKATO BRANCH INCORPORATED HC HAM CIV-2005-419-1311 12 July 2006

Introduction [1] Background [2] The circumstances of purchase [15] On what basis was JA1267 purchased? [22] Result [66]

[1] This case concerns the ownership of a steam railway locomotive, JA1267. The plaintiffs, Leslie Hostick and Ian Welch, claim that with others, they are part owners of the locomotive. The defendant, The New Zealand Railway and Locomotive Society Waikato Branch Incorporated (“the Waikato Branch”) denies that the plaintiffs own shares in the locomotive. The Waikato Branch claims to be the legal owner of JA1267.

[2] The steam railway locomotive JA1267 was built in 1950 and weighs approximately 110.6 tonnes. It was originally owned by New Zealand Railways and was based at the Lynwood Locomotive Depot in Christchurch. It was one of the last steam locomotives disposed of by New Zealand Railways when it moved to diesel engines. It was sold in 1972 for $1,300. It is currently stored on a farm property in Te Awamutu under temporary cover. It has been there since 1972 and requires restoration.

[3] The Waikato Branch was incorporated on 1 May 1991. Prior to its incorporation there had been an unincorporated Waikato Branch of the New Zealand Railway & Locomotive Society Incorporated (“the New Zealand Society”). With the move from steam to diesel in the late 1960s the New Zealand Society and various branches became concerned to preserve steam locomotives and memorabilia before there was nothing left. The last steam locomotive ran in the North Island at Christmas 1967. A scrapping programme proceeded, with the last locomotives retained by New Zealand Railways being in the South Island in 1972.

[4] In the early 1970s the Waikato Branch was active. The plaintiff, Mr Hostick, was the Waikato Branch’s preservation officer and secretary. The Waikato Branch operated under the rules of the New Zealand Society and sent annual reports to it, but otherwise functioned as a separate entity. It made its own decisions by its own Committee without reference to Wellington.

[5] It seems that those involved were fixed with an intention to preserve as many steam locomotives as they practically could and to keep these as a static display. Some land had been secured for use from a sympathetic farmer who owned land adjoining the New Zealand Dairy Company sites in Te Awamutu, and this was used to house the locomotives. In due course this display became the Te Awamutu Railway Museum.

[6] Mr Hostick, one of the plaintiffs, is a former Committee member and member of the Waikato Branch. He is a longstanding train enthusiast, and worked for 33 years in the service of the New Zealand Railways locomotive repair depots in Te Rapa and Frankton. 12 of those years were spent working with steam engines and the rest with diesel and electric engines. He personally owns three steam locomotives. He was the Secretary and Preservation Officer of the Waikato Branch in the 1971-72 period. He has since resigned.

[7] Mr Brown, who was the witness called for the Waikato Branch and who has filed its major affidavit, is also a longstanding train enthusiast. He was a steam locomotive engine driver with New Zealand Railways for nine years, ceasing his work as a locomotive engine driver by choice when New Zealand Railways moved to diesel. He has, however, kept up his great interest and involvement with steam engines, and is still a licensed steam locomotive driver. He was president of the Waikato Branch from 1970 until 1986 and is still involved with the Branch.

[8] Mr Welch, the co-plaintiff with Mr Hostick, was not one of the 1972 committee or contributors, but has since purchased the ownership of some shares claimed in JA1267 from the original contributors. He is also a director of the Mainline Steam Trust. Mr Hostick wishes to lease JA1267 to the Mainline Steam Trust for restoration and display.

[9] JA1267 appears to have been the last locomotive purchased from New Zealand Railways. In affidavit evidence that was not challenged, Mr Hostick stated that New Zealand Railways would only deal with groups or Societies and not individuals. His evidence was that he initially suggested purchase of JA1267 to his fellow Waikato Branch Committee members. The purchase price of $1,300.00

(which was undoubtedly a lot of money to the members at the time) was raised by a number of Waikato Branch members each contributing various amounts of money and the Waikato Branch itself contributing some. The treasurer issued receipts.

[10] The process of acquisition of the locomotive took some time. Ultimately it came north to Te Awamutu with the considerable costs of the journey being initially met by the Waikato Branch, but reimbursed by the sale of fares for the trip to members of the public. The trip, which was the last long distance steam locomotive journey in New Zealand, was appropriately named the “Steam Finale”.

[11] Prior to the move Mr Hostick did a considerable amount of work and travelling to organise the trip north and the arrangements for the locomotive’s accommodation. It came to Te Awamutu and a track connection was then laid from the dairy company’s private siting to the site. Once the locomotive was on the site, the members constructed a roof over it for better protection.

[12] The Waikato Te Awamutu Railway Museum is no longer operating and JA1267 is in need of attention. It is undoubtedly a locomotive of some value and great interest. Mr Hostick and those who support him, and the Waikato Branch, have different plans for its restoration and future use. None of the parties involved in this proceeding appear to be seeking any personal profit or other gain from the locomotive. They are all driven by enthusiasm for and commitment to the steam locomotive. This has not, however, prevented them from having clearly irreconcilable views as to the best future for the locomotive, and very different views of its recent history.

[13] The question of ownership must be determined by what happened at the time of its purchase from New Zealand Railways and payment. Those events took place approximately 35 years ago. It was no surprise to find when the evidence was presented that memories were faded, if not non-existent of actual events. A considerable quantity of relevant documents have survived and it is possible to trace the relevant circumstances in some detail. It is necessary to ascertain whether indeed the Waikato Branch owns the locomotive, or rather whether particular individuals, including the Waikato Branch, own it jointly.

[14] Consideration of the facts must be seen in the context of the different perspectives on the purchase of Mr Hostick and Mr Brown. Mr Hostick is adamant that right from the start the locomotive was being purchased by a group of individuals, with receipts for each person being issued by the treasurer of the Branch. The Branch was the convenient name to use in dealing with New Zealand Railways, and the useful administrative focus for this group of Waikato steam locomotive enthusiasts. In contrast, Mr Brown, while acknowledging that Mr Hostick on occasions wished to focus on who made contributions to the purchase of locomotives, maintained that those locomotives were purchased for the benefit of the Waikato Branch. He said that he was concerned at the time of purchase that Mr Hostick was working in his own interests and not in the interests of the Waikato Branch.

[15] There were some discussions between Mr Hostick and New Zealand Railways relating to JA1267 in the first half of 1971. These led to New Zealand Railways writing a letter (which still exists) to Mr Hostick in his capacity as secretary for the Waikato Branch thanking him for a letter of 18 June 1971 (which no longer exists), and for the forwarding of a deposit of $130.00 for the purchase. An official receipt was sent, but that is also no longer available. There is a receipt of

15 August 1971 for $22.00 made out to “LJ Hostick”. From the date, this would appear to be a further deposit. It is not clear who issued the receipt.

[16] The first record in the Minutes of the Waikato Branch referring to JA1267 is dated 11 December 1971 under the heading of ‘General Business’. It read:

[17] The Minutes of 12 February 1972 show that the secretary was authorised to approach an employee of New Zealand Railways concerning the date of removal.

[18] The Minutes of Saturday 11 March 1972 recorded that the secretary should negotiate further with New Zealand Railways on a number of points relating to “steaming” JA1267 from Wellington to Frankton.

[19] The Minutes of 13 May 1972 recorded that Mr Hostick moved a motion that New Zealand Railways be written to about repairs that were needed to JA1267, and the Minutes of 8 July 1972 recorded further motions relating to JA1267’s trip north, the “steam finale”.

[20] The Minutes of the meeting of 12 August 1972 are important and were rightly the focus of considerable attention during the trial. They show that Mr Brown as chairman and Mr Hostick as secretary were present, together with three other members. Under the heading ‘General Business’ the following is recorded:

Mr Hostick	$ 200.00
Mr Callagher	$ 200.00
Mr Brown	$ 200.00
Mr Galbreath	$ 200.00
Mr Allan	$ 100.00
Mr Simpson	$ 22.00
Waikato Branch, NZR & LS	$ 378.00
	$1300.00

3. It was decided that those members who have contributed a minimum of $100.00 in payment for part ownership of JA1267 were not obliged to pay a fare to travel on “Steam Finale”.

[22] There is no system of formal registration of ownership of locomotives in New Zealand and therefore no record to which recourse can be had which might assist on the question of ownership of JA1267.

[23] The contract to purchase JA1267 was between New Zealand Railways and the Waikato branch of the New Zealand Railway & Locomotive Society Inc. The letter from New Zealand Railways confirming the receipt of the deposit was to the Waikato Branch. However, the Waikato Branch did not exist as a legal entity and it is therefore necessary to decide who the contracting party was. It cannot be an entity known as the Waikato Branch for the New Zealand Railway & Locomotive Society Inc, because no such legal entity existed. The New Zealand Railway Locomotive Society Inc did exist but it has not been suggested by either party that it became the owner. Mr Brown observed in his evidence that the Waikato Branch, apart from working under the rules of the New Zealand Society and orders annual reports, operated as if it were a “separate entity” to it. Given that the Waikato Branch was unincorporated, its operation was akin to that of a club.

[24] I do not consider it realistic to regard the New Zealand Society as the principal contracting party. Although the evidence is not very precise, it seems as if the Waikato Branch acted independently of the New Zealand Society, and that the New Zealand Society did nothing to hold out the Branch as authorised to enter into contracts on its behalf.

[25] The liability of unincorporated associations has not received a great deal of attention in New Zealand cases. In Carr v Shaw (1913) 32 GLR 437 it was held that the members and president of an unincorporated association is liable in respect of the contract entered into by the manager of the club. It seems that the members or officers of the club who have held out the person representing the club as being authorised to enter into a contract, or who have subsequently sanctioned or ratified the transaction, can be personally liable.

[26] Rather, I consider that the original contracting parties who would have been liable in respect of the contract with New Zealand Railways, would have been those members of the Branch who gave authority expressed or implied for the entry into the contract. It is stated in Chitty on Contracts Vol 1 29^thEdition para 9-068:

Liability of unincorporated associations. An unincorporated association is not a legal person and therefore cannot sue or be sued unless such a course is authorised by express or implied statutory provisions ass in the case of a trade union and a trustee savings bank. Nor can a contract be made so as to

bind all persons who from time to time become members of such an association. But a contract purportedly made by or with an incorporated association is not necessarily a nullity. If the person or persons who actually made the contract had no authority to contract on behalf of the members they may be held to have contract personally. On the other hand, if they had the authority, express or implied, of all or some of the members of the association to contract on their behalf, the contract can be enforced by or against those members as co-principals to the contract by the ordinary rules of agency.

In Bradley Egg Farm Ltd v Clifford [1943] 2 All ER 378 the members of an executive council of an unincorporated association were held to be liable on a contract. So in this case, the members who were personally involved in the purchase, would have been the original contracting parties in 1971.

[27] Exactly which members of the Waikato Branch would have been the contracting principals to the original contract with New Zealand Railways is not clear. Those principals would certainly have included Mr Hostick, who was the secretary of the Waikato Branch and who had carried out the negotiation with New Zealand Railways, and to whom the 12^thJuly 1971 letter of contract was addressed. I am satisfied that Mr Hostick had initiated the acquisition of JA1267.

[28] I also accept that right from the start, Mr Hostick was anxious to ensure that those who contributed to the locomotive were part-owners of it, in accordance with their contributions. Mr Hostick was a difficult and at times cantankerous witness. However, I consider that he was honest, and his evidence is supported by the existing written material. His evidence is also broadly in accord with that of Mr Brown, who acknowledged Mr Hostick’s wish to have individual ownership of the locomotive.

[29] The sequence of events, and contributions of the parties, following the exchange of letters and the receipt in 1971, is unclear. Understandably with the passage of time and the restriction documents, it has not been possible to reconstruct exactly how matters progressed. The minutes of the Waikato Branch, however, which have already been referred to earlier in this judgment, show the Waikato Branch making provision for the purchase of the locomotive. The minutes prior to August 1972 do not refer to who actually owns the locomotive.

[30] In the minute of 12 August 1972 it was recorded that the ownership shares in JA1267 were to be as set out. The receipts that post-date the meeting show that cash payments recorded in that minute had not all been made at that time of the minute, but were made roughly in accord with the break-down stated in the minutes over the following months.

[31] Mr Hostick’s evidence about the meeting was entirely straight forward. He says that the note recorded what was agreed. The document is quite explicit. It refers to “ownership shares”. It sets them out with precision. It indicates that the motion was moved by Mr Hostick and seconded by a Mr Krippner and carried. The second motion of that day, noted under point 3 and referring to “part ownership”, was moved by Mr Hostick and seconded by Mr Callagher. There was no indication of any wish to revisit this earlier motion in the later Minutes. It is a specific and unambiguous record of the basis of ownership, and it entirely supports the position of Mr Hostick. There is no evidence of any dissent on Mr Brown’s part. I accept that from his own personal point of view he saw his contribution as being a donation to the Waikato Branch. This is very much to his credit, but it does not change the legal basis that was specifically agreed on that date.

[32] Mr Brown and Mr Hostick did not differ in their mutual recall that it was Mr Hostick’s general approach to insist that it was necessary to record who had contributed towards JA1267. It also seems that Mr Hostick wanted the figures to be rounded, to take into account the deposit payments. Mr Brown said that he never agreed to the Minutes of 12 August 1972 that showed JA1267 being owned in shares. He said that the Minute was recorded in that way at Mr Hostick’s insistence. He considered the recording exercise a waste of time. He felt that if Mr Hostick wanted to write down who had put in what money, that he could not stop him. He said in his evidence that he refused as chairman to sign the Minutes because he would have objected to the way in which ownership was referred to. However, he also said, understandably, that he could not particularly recall the meeting.

[33] Following that meeting the “Steam Finale” took place, at a cost of approximately $5,000.00. It seems that the expense of the trip was funded by the

Waikato Branch, but the cost was recovered by the payment of fares by those who enjoyed the trip.

[34] Four different receipts dated 9 September 1972 were produced. The receipts were to Mr RS Galbreath, Mr RVC Brown, LJ Hostick and Mr Kevin Callagher. They were all dated 9 September 1972. They all record payment for “shares”. An earlier receipt dated 9 September 1970 for Mr Hostick relating to shares in JA1267, for $178.00 was also produced. There are two later receipts to RVC Brown from

1976 for “20 shares” and “10 shares”. There is one from 21 February 1976 to RS Galbreath for $50.00 of which $28.00 appears to relate to JA1267. There is one to R Stratton from 25 May 1979 for $40.00 recording shares in JA1267.

[35] There is no dispute about the existence or validity of these documents. The issue is what they mean. Do they mean that the moneys were all contributed by members of the Waikato Branch effectively as donations to the Waikato Branch which owned JA1267? Or did they record payments by individual owners for part- ownership or “shares” in the locomotive? The words on the receipts are consistent with the latter proposition. The recollection of the parties as to what happened in

1972 and why it happened are vague, and not of great assistance given the passing of time.

[36] Mr Hostick’s evidence that the locomotive was purchased by various persons as a group of individual joint owners, is supported by an affidavit of AB Fordyce dated 16 October 2003. Mr Fordyce has since died. It is accepted that his evidence is admissible under s 3 of the Evidence Amendment Act (No. 2) 1980, with the normal reservation as to weight.

[37] Mr Fordyce provided $20.00 towards the purchase in the course of the “Steam Finale” trip. He received a receipt, which he could no longer find. He stated that he was positive that the receipt conveyed some degree of ownership because he has always told other people that he owned at least a few nuts and bolts in the locomotive if nothing else.

[38] His evidence is supportive of Mr Hostick’s position although, as with all the evidence in this case, it suffers from the disadvantage that it is a recollection of events that transpired many years ago. I also note that Mr Fordyce has clearly sided with Mr Hostick on the division that has occurred between the former members of the Waikato Branch on this issue. He explains this by referring to Mr Hostick as being the prime mover in the preservation of the locomotive. The fact that he was in general a supporter of Mr Hostick’s position also weakens somewhat the reliability of the statement that he made. However, I do give some weight to his brief. He certainly had no financial motivation to make up what he said, and it is consistent with the receipts that have been produced to this Court.

[39] There was also a letter written by another contributor who is deceased, a Mr Allan. The letter was written in February 1989. Mr Allan recorded that he was “proud to be feel part of that honour of ownership”.

[40] I do not consider that that letter can be fairly interpreted as supporting Mr Hostick’s case. The reference to Mr Allan feeling part of the “honour of ownership” and his other remarks about having a share or interest may reflect something entirely different from the legal right of ownership. Given the informality of the document and the imprecision of the statements made it would be dangerous to place reliance on it as supporting Mr Hostick’s position. I cannot feel confident that the letter is not more a wish to respond in an amiable manner to the lobbying and position taking that had started to occur by that time.

[41] There were other letters produced where persons who are still living had expressed views about the ownership. I put those letters entirely to one side. They are inadmissible.

[42] Certainly some persons who are still living and who were involved in the purchase have not been called by either side. Mr MacGillivary for the Defendant suggested that the implication could be drawn that their evidence would not help Mr Hostick’s case. However, I do not think that such an implication could possibly be drawn in the circumstances. It is not surprising that after 35 years persons who might have been involved at the time are not called, either because they do not wish

to be called and that wish is being respected, or because given the time that has gone by, they are unable to make any helpful contribution to the question of what happened in 1972.

[43] I consider Mr Brown to be an honest man, who is acting in these proceedings from the best of motives. I do not consider that Mr Brown has a reliable recollection of events in 1972. For instance, he thought that the amounts referred to in the Minute of 12 August 1972 had been paid prior to the meeting. It became clear on analysis of the receipts that that could not be so.

[44] I do not accept Mr Brown’s evidence that he did not notice the word “ownership” in the Minutes because he was upset. He said in evidence that he “would say” that the Minutes were not signed because he objected to them. This is clearly a reconstruction. He had frankly conceded just before this statement that he had no actual recollection of the meeting and the Minutes.

[45] I consider that he is mistaken in his suggestion that he sought to disassociate himself in an express way from the Minutes which recorded that the ownership was held in shares, by not signing those Minutes. The earlier Minutes of 13 May 1970 and 8 July 1972 were also not signed by Mr Brown, and this was also the position in relation to the later Minutes of 9 September 1972. There was no suggestion that Mr Brown sought to disassociate himself from those other Minutes. I do not consider that non-signing of the Minutes indicates any disapproval or holding back. He might have privately disapproved, but he did nothing to weaken the force of the resolution. Indeed, on Mr Brown’s own evidence the Minutes are not inconsistent with much of what he recalls. He did not deny that Mr Hostick was insistent about the contributions being recorded. There is no record in later minutes of dissent or a refusal to sign.

[46] The Minutes are in Mr Hostick’s handwriting, and he undoubtedly had a particular point of view. Nevertheless I am satisfied that they recorded the intention of the meeting. I have no doubt that Mr Brown was not happy with the resolution and would have preferred that it had not been passed. I accept that unselfishly he wished his contribution to be a donation to the Waikato Branch, and he would have

liked to have seen the Waikato Branch as owner. However, this was not the way in which Mr Hostick approached matters. When Mr Hostick gave evidence he presented as a very forceful and determined man, who expressed his views with absolute clarity. I do not consider him capable of either prevarication or indeed subtlety. I am sure that the entire meeting knew what his views were and what he intended to record, and that those present were prepared to go along with his approach. Mr Brown may not have liked it and had private reservations, but this cannot weaken the force of the resolution.

[47] The receipts also corroborate Mr Hostick’s approach to the matter. They do not show the contributions as donations to the Waikato Branch. They show them as payments for shares in the ownership of the locomotive.

[48] It is also significant that another engine, WAD800, was purchased, not by the Waikato Branch, but in shares, between New Zealand Society, the Waikato Branch and others. While this may be regarded as something of a legal anomaly, given that the Waikato Branch was a branch of the New Zealand Society, it nevertheless indicates that in relation to other locomotives Mr Hostick’s approach prevailed. Despite Mr McGillivary for the Waikato Branch’s submissions to the contrary, the documents at the time show clearly, in my view, that the WAD800 was owned in shares. Further, another engine, JA1275, appears to have been purchased with Mr Hostick being a part owner. This is consistent with Mr Hostick’s evidence that he was very insistent that the ownership of locomotives to which he contributed be in shares, and further corroborates his evidence.

[49] Mr MacGillivary for the Waikato Branch argued that the burden of proof was on Mr Hostick, and that as matters stand the Waikato Branch must be regarded as the legal owner of JA1267. Insofar as the Plaintiffs have the onus of proving that the locomotive is owned by individuals rather than by the Waikato Branch, they have discharged that onus. I am satisfied on the balance of probabilities that ownership of JA1267 was in shares.

[50] Mr MacGillivary submitted that it is very difficult for the Court to determine with confidence what the intentions of 11 individuals were over 30 years ago. That

might be so if it was memory that was the sole indicator of what happened. However, that is not the case. The Minutes and receipts clearly document ownership and shares, rather than by the Waikato Branch.

[51] It is, of course, the case that the very first Minutes through 1971 and early

1972 record the Waikato Branch carrying out various actions in relation to the locomotive. Those Minutes show that it was the Waikato Branch generally that organised the “Steam Finale” trip. These Minutes pre-dated the 12 August 1972

Minute. The actions by the Waikato Branch are equally consistent with it acting as the effective manager of the locomotive. Its individual members were after all members of a club, and at that time connected in trust, and enthusiasm for the preservation of steam locomotives. It is entirely consistent with the joint ownership of a number of enthusiasts, all of whom were members of the Waikato Branch, that the Waikato Branch should organise various events in relation to the locomotive.

[52] Mr MacGillivary argued that the true cost of purchasing JA1267 must include all the costs of transport. Those extra costs totalled in excess of $5,000.00. However, those costs were recovered, and I see them in a separate category from the actual costs of acquiring the locomotive.

[53] I am satisfied that Mr Hostick’s account of the basis of purchase is correct. Despite the fact that the purchase was nominally by the Waikato Branch, it was agreed at the meeting of 12 August 1972 that those who financed the actual purchase would own the locomotive in shares which reflected their percentage contribution. By agreement that shareholding was later adjusted when certain further payments were made, for which receipts were given by the Waikato Branch recording the acquisition of shares.

[54] Both sides sought to rely on events that had taken place since purchase. Clearly there had been a split in the Waikato Branch, with some members siding with Mr Hostick and others with Mr Brown as to who owned JA1267. A good deal of the submissions in the trial concerned that later evidence. However, I do not find those later events to be of any particular assistance. This group of people, united in a laudable effort to preserve the locomotive, unfortunately split with all the extreme

position taking that can arise when such an event occurs in an amateur group. The position taking that occurred starting in the 1980s, long after the actual purchase had taken place and when memories would have already faded. I have not found the evidence of these later statements and actions to be of any particular assistance.

[55] The hypothetical question was asked of Mr Hostick in evidence of what would have happened in the majority of the “owners” had decided that JA1267 should be sold for cash. Mr Hostick resolutely refused to answer this question, describing the hypothesis as not a possibility and ridiculous.

[56] While his refusal to engage on the point can be criticised, I believe that his position on the question (while expressed with some intemperance) was nevertheless truthful. He and the other members of the Waikato Branch had contributed to the locomotive on the basis of trust, united by their enthusiasm for the preservation of steam engines, and it was beyond their contemplation that the locomotive could ever be sold for scrap. Such a proposal would not have come up, and indeed it must be noted that even today, when the members have fallen out, there is no suggestion that the locomotive should not be restored and preserved in New Zealand.

[57] It was submitted that Mr Hostick’s personal intention as to individual ownership should not be assumed to have been shared by other contributors. However, the written minute and receipts that I have referred to indicates that his view was indeed shared by other contributors, with the exception of Mr Brown and possibly some others. There is some corroboration of this by Mr Fordyce. I do not consider there to be anything surprising in the fact that these members, unified as they were by trust and a common interest, used the Waikato Branch umbrella as a convenient means of acquiring locomotives, and administering the care of those locomotives.

[58] Even if it were accepted that Mr Brown’s approach was correct, and that the Waikato Branch had been intended to be the owner of the locomotive, that even and then I would have felt obliged to hold the individual branch members who were involved in the purchase, to be the owners. This is because the Waikato Branch was not a legal entity. I have referred earlier to the fact that an unincorporated

association is not a legal person and cannot sue or be sued: London Association for the Protection of Trade v Greenlands Ltd [1916] 2 AC 15, 20 and 38, Chitty on Contracts Vol 1 29^thEdition para 9-068. Unless the Branch is a legal entity, it cannot own anything. The owners in this case even on Mr Brown’s approach must have been those who were involved in the purchase. For the reasons that I have already given, I do not consider that the owner could be regarded as the New Zealand Society, because it is clear that the New Zealand Society did not know about the purchase and had nothing to do with it.

[59] I also record that if I was wrong in my conclusion that the legal ownership vested in Mr Hostick and the other contributors, I would conclude that they had beneficial ownership as a consequence of a resulting trust. When a person provides or contributes money to the purchase of property which is acquired partly or wholly into the name of another, there is a presumption that the contributor retains a beneficial interest in the property to the extent of the contribution. This presumption can be rebutted if there is something to indicate an intention to confer a beneficial interest onto the legal transferee: Bateman Television Ltd (In Liquidation) v Bateman and Thomas [1971] NZLR 453, 461-464 (CA), Potter v Potter [2003] NZCA 103; [2003] 3 NZLR 145 (CA) paras 14-16 approved, but not on this point in [2004] UKPC 41; [2005] 2 NZLR 1. If the New Zealand Society was the legal transferee, Mr Hostick and others having made voluntary payments for the purchase of the locomotive are presumed to have retained beneficial ownership, and the locomotive is held on trust for them. I am satisfied that he and others did not intend to confer title to the New Zealand Society, or someone on behalf of the Waikato Branch. I consider that the presumption applies.

[60] The Waikato Branch is of course now an Incorporated Society but this did not happen until 1991. Although this was not argued, I have considered whether the owners who had contributed and who were recorded as the owners, could be seen as holding the locomotive effectively in trust awaiting the incorporation of the Waikato Branch, at which stage it was to become owned by the Waikato Branch. I do not consider that could be so. Mr Brown has not suggested that there was any such arrangement, and in any event I accept the evidence of Mr Hostick that quite specifically this was not the arrangement, and that the ownership was to be held by the individual contributors. I accept, however, that the Waikato Branch now owns

some shares in the locomotive. Until 1991 the shares that the Branch was shown to hold would have been held by those who had donated and contributed the funds on the Waikato Branch’s behalf. After 1991 those owners who had contributed on behalf of the Waikato Branch, can be seen as having relinquished or gifted their interest in the locomotive in favour of the Waikato Branch which thereafter owned the shares contributed by those members.

[61] I conclude that since its acquisition from New Zealand Railways, locomotive JA1267 has been legally owned by those who contributed to its purchase, in shares that accord with the proportions for the payments made, including those who are later recorded by the Waikato Branch as having obtained ownership shares on the basis of receipted payments.

[62] I do record that I consider that the Court does have power to order a sale of the locomotive under s 143 Property Law Act 1952 if the owners to the extent of a moiety or upwards seek this. Section 143 refers to applications for an order for the division of chattels. It reads as follows:

(1) Where any chattels belong to persons jointly or in undivided shares, the persons interested to the extent of a moiety or upwards may apply to the Court or a Judge thereof for an order for division of the chattels or of any of them, according to a valuation or otherwise, and the Court or Judge may make such order and give such consequential directions as the Court or Judge thinks fit.

(2) Where the value of the chattels concerned does not exceed [[[$200,000]]] the foregoing application may be made to a [District Court], and that Court may make such order and give such consequential directions as the Court thinks fit.

[63] The physical division of this chattel is clearly impracticable, and indeed most chattels cannot be physically divided. I respectfully agree with the decision of Casey J in Hargreaves v Fleming [1975] 1 NZLR 209, 211 where it was held that the Court may direct a sale of a chattel where it is impracticable to divide it physically. Such an order was also made under corresponding Australian legislation in Tillack v Tillack [1941] VicLawRp 35; [1941] VLR 151. The practice of the English Chancery Court has been to make such an order on dissolution of partnership, notwithstanding that a literal

interpretation of the partnership agreement might require physical division: Cook v Collingridge [1823] EngR 419; (1823) Jac 607, 37 ER 979. Section 140 of the Property Law Act 1952 contains an express power for a Court to order sale in respect of land. In my view the legislature must have intended that the Courts have a similar discretion in relation to chattels. It would not have intended that warring co-owners remain locked together, or be forced to physically dissect and thereby destroy a valuable chattel.

[64] Counsel has provided a consent memorandum which as I understand it sets out the up to date proportional contributions of the parties. They are as follows:

M Galbreath	19.2307%	$250.00
I Welch	8.9232%	$116.00
Waikato Branch	29%	$377.00
LJ Hostick	15.3846%	$200.00
K Callagher	17.0769%	$222.00
P Harwood	1.5385%	$20.00
Mr & Mrs IM Perkins	1.5385%	$20.00
R Stratton	3.0769%	$40.00
J Hannah	1.9231%	$25.00
JAT Terry	2.3076%	$30
	100%	$1,300.00

[65] While the ownership percentages appear to be clear, it will be necessary, if it is still contested, for there to be direct evidence from the necessary number of owners, if it is to be established that a moiety or more seek a sale.

[66] The plaintiffs succeed in their claim that the locomotive is owned by a group of individual persons, and not the Waikato Branch. The evidence as it presently stands does not clearly show whether the majority of the part-owners support Mr Hostick. I have recorded in my notes of the hearing that if the Waikato Branch was found to be the owner of the engine that that would be an end to the matter.

However, if the finding was that there were a number of owners, the locomotive would probably have to be sold. Apparently there is no agreement on the method of sale. I consider it appropriate that now that I have made these findings as to the ownership of the locomotive, that I leave it to the parties to see if they can reach agreement on the way forward. If not, I reserve leave to the parties to return to the Court to argue the question of what specific orders should now be made. For that reason this is an interim judgment only.

[67] The declaration that I am able to make at this stage in response to the statement of claim is as follows: The locomotive JA1267 is legally owned by Mr Hostick and others who provided contributions in 1971 and 1972 and subsequently, in shares that accord with the amount of their contributions. Where those shares have been transferred, they are now owned by the transferee.

[68] Some submissions were addressed to me on the question of how decisions could be made in respect of the locomotive if the respective owners could not agree. No authorities were cited to me on the topic and I am not clear that I am required to make a decision on this issue at this point.

[69] I expressly reserve leave to the parties to apply to the Court for consequential directions on the issue of whether there should be an order for sale under s 143, or as to the specific persons who have contributed and what the current ownership shares are, or as to how to proceed if there is not a sale.

High Court of New Zealand Decisions

Hostick v The New Zealand Railway & Locomotive Society Waikato Branch Inc HC Hamilton CIV 2005-419-1311 [2006] NZHC 807; [2006] 3 NZLR 842; [2006] NZAR 609 (12 July 2006)