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You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Robot Arenas Ltd & Anor v Waterf1eld & Anor [2010] EWHC 115 (QB) (08 February 2010) URL: https://www.bailii.org/ew/cases/EWHC/QB/2010/115.html Cite as: [2010] EWHC 115 (QB) |
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QUEEN'S BENCH DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
(Sitting as a Deputy Judge of the Queen's Bench Division)
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(1) ROBOT ARENAS LIMITED (2) MR EDWARD HOPPITT |
Claimants |
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- and - |
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(1) SIMON WATERF1ELD (2) NEWTON NOTTINGHAM LLP |
Defendants |
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Mr Stephen Beresford (instructed by Freeth Cartwright LLP) for the Defendants
Hearing dates: 11th, 12th, 13th, 14th January 2010
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Crown Copyright ©
Mr C Edelman QC :
Introduction
The Law
(a) Abandonment
"The notion of abandonment may apply in two different senses to objects found by a non-owner: one colloquial and one juristic. In the first sense, a loser may abandon the search for a lost object, whether by reason of other claims on his time, or a belief that the place where the object has been lost is one where others are likely to find it and return it. The loser in that position does not resign any proprietary or possessory claims to the chattel, and when the chattel is found the ordinary rules apply: the law recognises the paramount claim of the owner and, subject to that, normally awards the goods to the person first in possession.
The second and more important is that of a divesting abandonment, where the fmder comes upon a chattel that the owner has previously left or cast away with the intention of divesting himself not only of possession but also of ownership."
The Defendants' case on abandonment is and must necessarily be that there has been a divesting abandonment.
"Despite some surviving doubt, the better opinion appears to be that divesting abandonment is a defence to conversion provided that a party entitled to do so has renounced possession and the immediate right to possession of the chattels in question. Clear evidence both of intention to abandon and of some physical act of relinquishment will be required and, given the element of strict liability in conversion as contrasted with the need for mens rea in crime, it would seem that a mere reasonable belief that abandonment had taken place would not suffice as a defence. ..."
Neither Mr Ashfield nor Mr Beresford sought to challenge this conclusion which is supported by the preceding text (and by the earlier paragraphs 13-044 and 13-045). Accordingly, the test that I will apply for the purposes of ascertaining whether there has been abandonment in this case is whether there has been both an intention to abandon and some physical act of relinquishment.
(b) Destruction of goods belonging to another
"... The position of the possessor who erroneously believes that he is the owner of the chattel was examined by Staughton J. in AVX Limited v. EGM Solders Limited. There, the plaintiffs had rejected a consignment of solder spheres which had been supplied to them by the defendants. It was agreed that the spheres should be returned to the defendants and the plaintiffs engaged, for this purpose, carriers named Sayer. The plaintiffs delivered to Sayer not only a box containing the rejected spheres but 21 other boxes containing various capacitors. These capacitors were the property of AVX and were to be transported by Sayer to AVX's distribution centre at Aldershot. They were, of course, sharply distinguishable in appearance from the rejected spheres, which were individually "miniscule".
Regrettably, Sayer made out a delivery order which, in addition to other inaccuracies, stated that all of the packages were to be delivered to the defendants, EGM. Their driver carried out this instruction and the goods were received in due course at EGM's premises. EGM's staff assuming that all 22 boxes contained rejected and defective goods, instructed two of their employees to scrap the entire consignment. They did this by emptying them into rubbish skips. In the case of the capacitors, this involved unreeling and severing the paper strips upon which the goods were packaged. The result was to render AVX's goods practically valueless for commercial purposes. Whereas they might with great effort, have been separated and retrieved from the skips, the task would have remained of regrouping them into their different categories, and this was "vastly more difficult". The case could therefore be regarded, for practical purposes, as one where the unwitting possessor had deliberately (albeit bona fide) destroyed the goods."
"... on balance we submit that a possessor who is wholly and blamelessly unaware of the fact that goods in his possession belong to another should not be liable for intentionally destroying those goods. To phrase the matter another way, his liability for conversion by destruction should be conditional, like the involuntary bailee's liability for conversion by mis-delivery, upon his failure to establish that, in performing the act, he exercised reasonable care. That obligation would be broken if the possessor should reasonably have become aware of the true ownership of the goods when he committed the act of destruction, but it is difficult to see how it could be broken otherwise. It may, of course, be objected that this approach creates an irrational distinction between conversion by destruction and conversion by subsequent sale. Against this, it can only be pleaded that the solution proposed offers a roughly equitable distribution of rights and immunities, which enable the original circumstances of the Defendant's possession to be brought into account as a mitigation of his duty without excessively prejudicing the owner's interests."
(c) Contributory Negligence
"Contributory negligence is no defence in proceedings founded on conversion, or on intention of trespass to goods."
(d) Damages
"Where, by reason of a bailee's actual or presumed fault, a bailor cannot recover the value of goods lost or destroyed, the highest possible value is presumed against the bailee."
(i) From the judgment of Gorell Barnes J. in The Harmonides [1903] P 1 at 6:
"So that the real test, where there is no market is, as counsel on both sides agree, what is the value to the owners as a going concern, at the time the vessel was sunk? You cannot get at this with any great certainty, for you cannot get at it from the market value. Possibly, for such a ship at such a time there would be no buyers and she would have to be sold for old iron. You cannot deal with it like an ordinary commodity being sold every day. You must look at it and see what is the loss to the owners. It has been pointed out that you may look at the original cost, plus the money expended on her, and so forth. That is of assistance, but it is not complete assistance, because it is a rough, and ready method. You may look and see also how the ship is paying. That, however, is not a complete test, because you cannot be sure that the way she has been paying will continue. But one tiling is absolutely certain - you cannot say the test is per market value."
(ii) From the judgment of Stocker L.J. in The Dominium Mosaics case at 255j-256a:
"The cases cited seem to me clearly to point the distinction between a situation in which the proper and reasonable compensation for the plaintiff is diminution of the value of the building destroyed as damages on the one hand or reinstatement on the other, a distinction which, in most cases, will depend on whether or not the building destroyed is a profit-making asset. Since in almost any other case if the plaintiff recovers as damages the diminution in value he will have been restored to his original position, reinstatement, or its equivalent, is only appropriate where such is the only reasonable method of compensating a plaintiff for future loss of profits derived from the asset destroyed."
(iii) From the judgment speech of Lord Jauncey in Ruxley Electronics & Construction Limited v. Forsyth [1996] AC 344 at 357E:
"Damages are designed to compensate for an established loss and not to provide a gratuitous benefit to the aggrieved party from which it follows that the reasonableness of an award of damages is to be linked directly to the loss sustained. If it is unreasonable in a particular case to award the cost of reinstatement it must be because the loss sustained does not extend to the need to reinstate."
(iv) From the speech of Lord Lloyd in Ruxley Electronics at 367B:
"... the cost of reinstatement is not the appropriate measure of damages if the expenditure would be out of all proportion to the benefit to be obtained, and, secondly, the appropriate measure of damages in such a case is the difference in value even though it would result in a nominal award."
(v) From the speech of Lord Lloyd in Ruxley Electronics at 371G-372B, in which passage he approved the decision in Sealace Shipping Co Limited v. Oceanvoice Limited [1991] 1Lloyd's Rep 120 in the following terms:
"I have confined my citation of authority to building cases, since that is the subject matter of the present dispute. But the principle that a plaintiff cannot always insist on being placed in the same psychical position as if the contract had been performed, where to do so would be unreasonable, is not confined to building cases. In Sealace Shipping Company Limited v. Oceanvoice Limited [1991] 1 Lloyd's Rep 120, there was a contract for the sale of a ship, including a spare propeller. When the ship was delivered there was no spare propeller. It was common ground that there was no market for second-hand propellers. So the only way of providing a spare propeller would have been to commission the manufacture of a new propeller at great expense. The arbitrator held that this would be unreasonable. Instead he awarded the scrap value of the propeller, since that was all the buyer had actually lost by reason of the seller's breach. The arbitrator's decision was upheld in the Court of Appeal. Neill L.J. said, at p. 125:
"I can only read this award as meaning that he asked the question: what did these buyers really suffer as a result of the non-delivery of this spare propeller with this vessel? and he gave the answer: they lost its scrap value which in circumstances was the only value which it had for them.""
The Witnesses
(i) Mr Hoppitt: He is and was a Director of RAL. He is an IT engineer working for BT. He captained "Team Storm" in the Robot Wars television series and his team ultimately became world champions. He was described by Mr Stuart (see below) as having the technical knowledge and enthusiasm necessary to promote the Robot Wars concept.
(ii) Mr Stuart: He is and was the Managing Director of RAL and the owner of the only issued share in RAL. He is and was also the Managing Director and sole shareholder of Phantom Events and Phantom Media. He described himself in evidence as having a strong media and business background, in contrast to Mr Hoppitt. He described his expertise as being management and media.
(iii) In addition, a statement from a Mr Gray was served by the Claimants but the Defendants did not seek to cross-examine him. He had been employed as a Production Manager for the live Robot Wars tour prior to the sale by Mentorn of the Robot Wars Set and was employed by Phantom Events to perform the same role after the sale. His statement deals with the equipment which was taken to Building 29 at RAF Newton in about June 2004.
i. Mr Waterfield, who appears to have been the moving force behind NNL for all purposes relevant to this action;
ii. Mr Hughes, a Director of Hughes Property Services Limited, and who, on behalf of the company, was responsible for arranging for the clearance of building at RAF Newton on Mr Waterfield's instructions;
iii. Mr Weston, a Chartered Surveyor and Member of the Royal Institution of Chartered Surveyors who at all times material to this action was a salaried partner in the firm of Bruton Knowles;
iv. Mr Bailey, a Chartered Surveyor and Member of the Royal Institution of Chartered Surveyors who was at all times material to this action a surveyor with Bruton Knowles and a colleague of Mr Weston (Mr Bailey is now a partner in the firm of Bruton Knowles);
v. Mr Duncan, a Chartered Surveyor and Fellow of the Royal Institution of Chartered Surveyors who at all times material to this action was a partner in the firm of Donaldsons, who were instructed by Defence Estates to act as agent in relation to the disposal of RAF Newton;
vi. Mr Pezaro, who is and was at all times material to this action employed as a supervising security guard at RAF Newton.
The Facts/Evidence
(a) The Acquisition of the Robot Wars Set
"Everything is fine except the contract and Invoice should be made out to Ed hoppitt (sic) c/o Robot Arenas Limited ... (same address), this should have been made clear to you by Ed but obviously wasn't - obviously this will need to be amended, sorry for the inconvenience."
Mentorn agreed to re-issue the contract and did so in accordance with Mr Stuart's request. The re-issued contract bore a date of 2 April 2004.
(b) The Proposed World Championship Event in August 2004
(c) The Sale of RAF Newton
(d) Storage after the World Championship Event
"We spoke some time ago about longer lets on Building 29, is this still something that the owner is unlikely to want or would it be considered? Is there any other storage space on site that is available? I would prefer not to move the set back to London at the moment, if ever! ..."
"Dear Simon
We currently have a short term hire in building 29 until 30th August 2004 with Phantom Events Limited/Phantom Media Limited who are filming Robot Wars in hangar 2 the previous week. They are using this building for set storage prior to and during the event. They have asked however if there is a chance of a longer term usage of this building for storing the set rather than moving the same down to London. It may be worth considering if it does not interfere with your plans insofar as if you wish to consider film usage from the hangars they will be on site and lience more likely to use Newton than elsewhere.
Their representative is Rick Stuart (e.mail rick.stuart@[a email address])..."
"Dear David
We are completing on this at the end of September, what sort of lease do they want - if they are prepared to pay £165,000 per annum then I am interested in doing a deal ..."
"... I have got nowhere on an extension of use on building 29 for storage. The future owners said they would consider if you where (sic) prepared to pay a rediculous (sic) rental of £185000 per annum. I have queried the figure thinking that they must have been confused with a hangar but have not heard further. I did ask them to contact you direct. Unless we get some progress early next week therefore you will need to arrange to move out by the end of the licence period. Sorry to add to your burden."
"The last Robot Wars event did not take place as the company were let down by their seating contractors. They should have therefore vacated the building (My staff are checking in the morning) I doubt therefore if they are now interested."
(e) What happened to the Robot Wars Set after the cancellation of the Robot Wars World Championship?
"I am advised by the new owner of the site, that there is equipment still in this building from your usage last summer. Please contact me immediately to advise as to its removal."
This prompted what I regard to be an important telephone conversation which is the subject of a note by Mr Weston on his copy of the fax. The note states: "Says not his". In his witness statement, Mr Weston's evidence was that Mr Stuart contacted him in response to the fax and advised him that the items did not belong to him (which Mr Weston understood to mean that they did not belong to Phantom Events), that he, Mr Stuart, thought that the building had been cleared and was unaware of any equipment there. Mr Weston stated that the name of RAL was never mentioned. When cross-examined, he elaborated on that conversation whilst emphasising that he could not remember the exact words used. The gist of the words used, on his recollection, was that he told Mr Stuart that he had been contacted by the new owner who was concerned about materials in Building 29 and said to Mr Stuart that he thought he had moved out in August, to which Mr Stuart replied that he had. Mr Weston then asked whose materials they were to which Mr Stuart replied that they were not his but that he had used contractors and would ask them if they knew.
"Dear Mr Weston
I have been informed by Phantom Events, the company with which we were working to run the event last year at RAF Newton that you contacted him regarding the collection of the parts in building 29.
Phantom inform me that the site has changed hands and is now under new ownership - if you could forward me details of the new owners then I will personally make contact with them and make arrangements for the removal of the parts in building 29 as quickly as possible.
Yours sincerely, ..."
"What we desperately need at the moment is somewhere to store this set while we work on a permanent solution,"
he added:
"It's a piece of TV history and doesn't take up a great deal of space - probably no more than 10 square metres. ..."
The figure of 10 square metres would not be dissimilar to the quantity of equipment that Mr Hughes described as being present in and removed from Building 29 but Mr Hoppitt denied that he had used the figure of 10 square metres.
"The remainder of the clearance works will be complete by tomorrow afternoon."
and he was cross-examined on the basis that this referred to the completion of the clearance of Building 29. He denied this and stated that it referred to other clearance works, with Building 29 being clear, in the sense that the equipment in it had been removed on 4 March 2005. He also specifically denied having seen any chairs in the building.
(i) In the telephone conversation with Mr Duncan, Mr Hoppitt stated:
"And the building's empty";
(ii) In one of his telephone conversations with Mr Waterfield, Mr Hoppitt stated:
"And I went up at the weekend to do a reccy, just to check that everything was still where it was and what have you for the trucks, and found locks had been changed and it was all gone ...."
Mr Hoppitt's explanation for using this language was that these were "colloquial" telephone conversations during which he did not go into detail as to what remained.
(f) The Marketability and Value of the Robot Wars Set
(g) The Destruction of the Contents of Building 29
"Dear Robert
I have had a letter this morning from Robot Arenas Limited c/o 35 Manor Road, Marlesham Heath, Ipswich, Suffolk IP5 3S asking to be advised as to the contact to arrange for removal of their equipment. They have given no phone number: you will need to write to them on this issue.
Regards ..."
"Dear Sirs
RAF NEWTON
I understand from David Weston of BK that you require access to remove your equipment from Unit 25 RAF Newton.We are happy to give you access to the site but as far as we are aware you have the only keys to the padlock of the building. If you care to let me know when you wish to gain access I will see if it can be arranged.
I look forward to hearing from you.
Yours sincerely ..."
Mr Duncan did not consult with Mr Waterfield before sending that letter and had no authority to act on NNL's behalf but had assumed that everyone would be happy to allow RAL on to the site. Mr Weston could not remember the source of his information about the keys but assumed that he must have telephoned security at RAF Newton to discover that they had no keys to Building 29.
"I have made some enquiries and spoken to my colleagues about booking the trucks and crew needed and I believe we will be coming to site to collect within the next 6-8 weeks. If this is not soon enough please let me know as soon as possible.
Once I have an exact date I will let you know so that security at the gate can be informed."
In his conversations with Mr Waterfield on 7 March 2005, Mr Hoppitt referred to having written to Mr Duncan on 24 February 2005. Mr Duncan's evidence was that there is no record of his ever having received the letter of 20 February and my conclusion is that he did not receive it. Mr Hoppitt's explanation for referring to a letter of 24 February in his conversations with Mr Waterfield was that he had posted the letter on 24 February. Whilst I do have some doubts about whether the letter of 20 February was ever sent, I cannot rule out the possibility that it was posted and went astray. Whether or not it was written and posted in February 2005 is not, however, material to my conclusions, although if it was written at the time, the contents of the letter do suggest that perhaps Mr Hoppitt had not been aware of Mr Stuart's removal of the major part of the equipment in Building 29 at the end of August 2004.
Conclusions
(a) Abandonment
(b) Liability for Conversion/Negligence
(c) Contributory Negligence
(d) Quantum
(e) Damages for Use and Occupation
Outcome