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The Protection of Property Rights in Respect of Goods
Protection of Personal Property Rights: Roman
Law vs English Law
A. Roman Law
Under Roman Law it was possible for B to simply assert his property right by means of a vindicatio action. The victim would go to court and assert "this is my thing" and would receive the monetary value of the property.
Note that there were also other ways of protecting property rights in Roman Law (e.g. the possessory interdicts, the law of delict)
The action directly protected dominium (ownership) of the property. It also changed the legal relationship of the parties by giving rise to a duty to return the goods or pay an equivalent sum of money with a corresponding right.
B. English Law
However, in English Law, B can only assert his right indirectly through D's 'wrong' (i.e. by bringing an action in tort). There is no equivalent to the vindicatio. A property right gives someone a right not to have the rest of world interfere with their title. This means that if someone breaches their corresponding duty not to interfere with the title then the victim can sue them for the wrong they have committed.
Note that there is some dispute over whether a secondary right arises on breach of the primary duty or whether the defendant is simply liable to be sued
John Gardner's continuity thesis: the claimant has acquired a secondary right that arises on breach of the primary right to bring an action against the defendant
In Professor Swadling's opinion, the better view is not to talk in terms of rights and duties, but to simply say that the defendant is liable to be sued
Could there ever be a vindicatio in English Law?
One feature of English property law that poses a potential barrier to a vindicatio action is relativity of title. An equivalent action to the vindicatio in English law would therefore need to adopt relativity of title by allowing someone with less than the best title to bring the claim.
In line with the rest of English law, it would be expected that the remedy for a vindicatio action in
English law would be damages (value of property) or specific recovery of the chattel in unique cases.
Should there be a vindicatio in English Law?
N McBride (2016) 28 SAcLJ 1052:
(a) Argument 1: No because it would arguably add little to the remedies currently available
It is difficult to see what the advantage to using a vindicatio action over conversion.
Pre-action protocol would require C to first ask D for the chattel back and for D to refuse before a claim was brought. C would likely meet the requirements for a claim in conversion at this point anyway.
(b) Argument 2: No because inefficient use of court resources By waiting to see if D has violated C's rights it ensures that court resources are only spent on cases where intervention is urgently required
Analysis: given that court proceedings are costly to the individual, they will only be relied upon in cases where there has been a violation of rights.
(c) Argument 3: Yes because historical absence of vindicatio remedy
Many legal academics argue that the reason why there is strict liability in conversion is because common law failed to provide an effective vindicatio
If we argue that strict liability is unjustified in the tort of conversion (which we can on a Fullerian view of legal duties) then we need a vindicatio remedy to take its place o
Protection under Common Law: The Old Actions
There were a number of torts that were historically used to protect rights in personal property.
Substance of Action: wrongful detention of chattel
o Mere possession was not enough- there must be evidence of wrongful detention
Wrongful detention means a refusal to recognise the title of the claimant
E.g. in Clayton clear evidence of a demand and refusal was needed for the limitation period to begin
Although refusal to recognise title did not always require actual demand and refusal
Abolished by 1978 Act, S2- no longer possible to bring an action in the name of detinue
But the very facts that gave rise to liability in detinue today seem to give rise to liability in conversion. It seems to have been adopted under the head of conversion
E.g. Harrods adopted the Clayton requirement of an unequivocal refusal
B. Trespass to Goods
Requires a direct physical interference with the property of another (e.g. scratching the panel of a car)
Claimant alleged that he had casually lost a chattel out of his possession , that it afterwards came into D's possession by finding, and that D, well knowing it to be C's property, yet refused to return it and converted and disposed of it to his own use
Unlike trespass it requires an element of intention to convert the title to the property, as opposed to mere possession
Overview of Torts used Today
There are three torts that are commonly used to protect personal property rights in English Law today. A. Trespass
Substance: deliberately and directly physically interfering with C's exclusive control of a thing.
Damages: the value of the loss caused
Substance: deliberately interfering with C's right to exclusive control of the thing
Mindset required: need to deliberately interfere with the physical goods but not the right
Damages: the value of the property
Substance: carelessly damaging the thing of another
Trespass and conversion are strict liability wrongs in the sense that C only needs to deliberately do the act that causes the interference, he need not know of B's property right to the thing. Negligence requires an element of fault.
Where D pays C monetary damages for interfering with C's property right then C's ownership will cease to exist. In that sense, the money received by C functions as a substitute for C's right.
BBMB Finance: where C commits the wrong of conversion, the basic rule is that C will be ordered to pay a sum equal to the value of B's right at the time of C's interference with that right. Therefore, C is liable for the difference in value of the shares. Hence, damages are set by the value of B's right, not the extent of B's loss o
Confirmed by Kuwait Airways: in that case, if D had refused to take the aircraft, the
Iraqi government would have found a difference use for them, rather than return them
S8 Torts (Interference with Goods) Act 1977
Jus tertii was a defence that allowed a defendant to claim that someone else had a better title. The act abolishes the defence but allows the defendant to join a 3 rd party to the proceedings. The purpose of the rule is so that the court can solve all claims at once (and insure that the claimant cannot recover for the full amount if there is a known 3 rd party with a better title).
Torts (Interference with Goods) Act, S8- Competing rights to the goods
(1) The defendant in an action for wrongful interference shall be entitled to show, in accordance with the rules of court, that a third party has a better right than C as respects all or any part of the interest claimed by C, or in right of which he sues, and any rule of law
(sometimes called jus tertii) to the contrary is abolished
1.The Tort of Conversion
Conversion is a common law action in tort imposing strict liability for a wrongful interference with the right to possession of a chattel. (a)
Scope of Protection
What acts amount to conversion?
Some established cases of conversion include:
1. Taking someone else's goods for your own use
2. Intentionally destroying someone else's goods
3. Wrongfully detaining someone else's chattels
Lord Nicholls in Kuwait gave 3 requirements:
1. Conduct inconsistent with the rights of the owner
2. Deliberate, not accidental, conduct
A distinction is made between intentionally interfering with someone else's property right and intentionally dealing with a chattel. Conversion requires that the defendant intentionally do the act that gives rise to the interference with the claimant's right, unlike negligence which requires mere carelessness
But it is strict liability in the sense that it does not require the defendant to know of the claimant's better right (e.g. he may think that he the best title to it)
3. Such an extensive encroachment that it excludes the claimant from the chattel
No need to literally take the thing away from the claimant, just interfere with it in a sufficient way
Club Cruise spoke of 'dominium'- but it is very opaque about the meaning of this
Furthermore, taking the thing away is not always sufficient for exclusion:
o Fouldes: movement of horses did not amount to conversion. He explicitly recognised the claimant's interest in them, and the claimant had the option of recovering them
Whereas in Perry: they recognised the claimant's title but simply didn't want to return it to them at that moment (by reason of fear of aggravating the strike, among others). Held that they had still committed conversion.
o This shows that misappropriation is not essential
The feature of detinue seems to have been adopted that there must be a demand and refusal for return of the property (Clayton, detinue case)
The Nature of Liability in Conversion
Generally speaking, liability is strict, and arises irrespective of fault. This means that D does not need to have knowledge of the other's property rights.
Hollins v Fowler is authority- rogue obtained cotton from C, and it was purchased from the rogue by innocent defendants. Held that they were liable in conversion.
Why is there no fault requirement?
o See McBride article- because we don't have a vindication action in English law,
conversion overtakes this role. Where D is in possession, it doesn't matter whether he is at fault, he should just give back the goods.
o But what happens where there is no possession of the goods by D? Can we reason under vindicatio history? Stops being a surrogate vindication
Are there exceptions where fault is relevant?
Christie's Case: If someone has possession of the title for the purpose of auctioning it,
doesn't sell it and returns it to the seller, then there is no conversion provided that the auctioneer acts in good faith and without notice of the 3 rd parties title
Issue with this fault-based liability is how they can have 'notice of title'. It cant be enough that someone asserts that they have a right to the property because the auctioneer cannot be sure of the truth of this assertion.
o Court was unclear on this issue and there has been no subsequent case law to clarify the position
What Property Rights does Conversion protect?
Protects title to property that is better than the title of the defendant
Armory- boy had acquired a title by virtue of taking possession of the ring he found
Hierarchy of rights operates
Equitable rights- can the beneficiary of a trust bring an action in conversion?
o MCC: Can only sue in conversion at common law if you have an immediate right to possession. Therefore, someone with a mere equitable title under a trust cannot sue.
o Note- there is a question of this can be reconciled with the decision in Shell UK v
Total UK. Discuss the problematic nature of that decision and how it arguably wrong.
There is longstanding authority for MCC but not for Total.
Choses in action will not be protected (OBG v Allen)
o Baroness Hale and Lord Nicholls in the minority held that it could be protected
Lord Nicholls: given that the current law allows conversion of documentary intangibles (e.g. cheques) there is no reason why the law should not extend to choses in action
Baroness Hale: contractual rights come within the definition of 'property'
The test she adopted for 'property' is whether a right is assignable.
Problem 1: if this makes contractual rights property, then it would undermine the numeras clausus principle.
Problem 2: there are a number of possible tests for identifying property rights. The transferability of the right is not conclusive
Douglas (2011) MLR 329: Rejects the arguments put forward in Lord Nicholls and
Baroness Hale's speeches that conversion should protect contractual rights.
The reason why conversion is limited to chattels may be due to its historical origins in the action of detinue where the claimant would plead that he had lost the chattel and that the defendant had come into possession of it and converted it for his own use.
The question arises whether, given that detinue has been superseded by conversion, this limitation ought to still stand
Case Law on Conversion
Armory v Delamirie (1722)- Court of Kings Bench
Facts: C, a chimney sweeper's boy found a jewel and carried it to D (goldsmith)'s shop to find out what it was. He gave it to the hands of the apprentice who took out the stones to weigh them.
After discovering its worth the master offered the boy some money but he refused it, insisting on having back the jewel again. The apprentice delivered him back the socket without the stones.
Held: the chimney sweep's boy could bring an action in conversion
1. That the finder of a jewel, though he does not by such finding acquire an absolute
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