Creak v James Moore and Sons Pty Ltd [1912] HCA 67

Creak v James Moore and Sons Pty Ltd [1912] HCA 67

Where an owner of goods discovers that he has received the proceeds from the sale of his goods without authority, he must elect to affirm or disaffirm the sale—he cannot retain both the proceeds and recover the value of the goods. The obligation to elect exists until circumstances change such that election would prejudice the recipient. In this case, the plaintiffs, being aware of the facts before trial and receiving the proceeds identified as the price of the goods, were required to give credit for the amount received if they chose to disaffirm the sale; thus, the defendant was entitled to counterclaim for recovery of the money had and received.

Parties
Defendant/appellant: Charles William Creak; Plaintiff/respondent: James Moore & Sons Proprietary Limited
Jurisdiction
Australia
Judgment Date
21 October 1912
Procedural Posture
Appeal (civil) / On Appeal From Supreme Court of Victoria to High Court of Australia
Outcome
Appeal allowed; order of Supreme Court of Victoria discharged; County Court judgment restored.
Legal Topics
Conversion, Stolen Goods, Election to Affirm or Disaffirm Sale, Money Had and Received, Trusts
Property Law Torts Conversion Stolen Goods Election to Affirm or Disaffirm Sale Money Had and Received Trusts

Case Brief

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Parties

Charles William Creak

Defendant/appellant

James Moore & Sons Proprietary Limited

Plaintiff/respondent

Procedural Posture

Appeal (civil) / On Appeal From Supreme Court of Victoria to High Court of Australia

Legal Issues

  1. 1 Whether an owner of stolen goods, who receives the proceeds from the sale of such goods after learning of the source, must elect to affirm or disaffirm the sale and cannot retain both proceeds and the goods/value.
  2. 2 Whether receipt of the proceeds in good faith and without knowledge of their source precludes the obligation to elect.
  3. 3 Whether the 'Rule in Clayton's Case' (appropriation of payments) applies to this context.

Ratio Decidendi

Where an owner of goods discovers that he has received the proceeds from the sale of his goods without authority, he must elect to affirm or disaffirm the sale—he cannot retain both the proceeds and recover the value of the goods. The obligation to elect exists until circumstances change such that election would prejudice the recipient. In this case, the plaintiffs, being aware of the facts before trial and receiving the proceeds identified as the price of the goods, were required to give credit for the amount received if they chose to disaffirm the sale; thus, the defendant was entitled to counterclaim for recovery of the money had and received.

Court Disposition

Appeal allowed; order of Supreme Court of Victoria discharged; County Court judgment restored.

Orders

  • Appeal allowed; order of Supreme Court of Victoria discharged.
  • Order on appeal from County Court (by James Moore & Sons Proprietary Limited against Creak) dismissed with costs.