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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Marcq v Christie, Manson & Woods Ltd. [2003] EWCA Civ 731 (23rd May 2003) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2003/731.html Cite as: [2004] QB 286, [2003] EWCA Civ 731, [2003] 3 WLR 980 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MR. JUSTICE JACK
and HIS HONOUR JUDGE HALLGARTEN Q.C.
CENTRAL LONDON COUNTY COURT
Strand, London, WC2A 2LL |
||
B e f o r e :
LORD JUSTICE TUCKEY
and
LORD JUSTICE KEENE
____________________
MARCQ |
Appellant (Claimant) |
|
- and - |
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CHRISTIE, MANSON & WOODS LIMITED |
Respondent (Defendant) |
____________________
Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
John McCAUGHRAN Q.C. (instructed by Stephenson Harwood) for the Respondent
____________________
AS APPROVED BY THE COURT
CROWN COPYRIGHT ©
Crown Copyright ©
Lord Justice TUCKEY:
The facts
The claimant shall by 19th November 2002 make an application to the Central London County Court business list for permission to serve a reply out of time for the purpose of pleading want of good faith and notice annexing a draft reply to that application, failing which this action shall stand dismissed.
No such application was made and on 28th November 2002 the claim was dismissed. Mr Palmer maintains that it is still open to the claimant to contend that Christies had notice of the theft of the picture in answer to Christies' assertion that they did not. I do not agree. The claimant has had disclosure of all Christies' documents and more than ample opportunity to state his case about notice and has not done so. We must proceed therefore on the basis that Christies acted in good faith and without notice.
2. Christie's role as agent.
Our sales at public auction are undertaken as agent, on behalf of the Seller….
4. Expenses
The Seller will bear all costs relating to:
(a) packing and shipping the Lot to us for sale;
…..
(c) packing and shipping the Lot if it is returned to the Seller
(d) insurance under Christie's Fine Arts Policy (explained below);
…..
(f) catalogue illustration;
…..
(k) a contribution to our general expenses if the Lot is not sold equal to 5% of the Insured Value
5A. Where Insurance is arranged by us
(a) Unless we agree otherwise, the Lot will be automatically insured under Christie's Fine Arts Policy for the amount that we from time to time consider to be its appropriate value.
(b) We shall charge the Seller a sum to cover insurance, at the rate of 1% of …if the Lot is unsold, its insured value….
6. The Seller's undertakings regarding the Lot
We shall handle the Lot, and the Buyer will purchase, on the basis of the Seller's undertakings that;
(a) the Seller is the sole owner of the Lot with an unrestricted right to transfer title to the buyer free from all third party rights or claims….
(c) the Seller has notified us in writing … of any concerns expressed by third parties in relation to the ownership …. of the Lot.
7. Sale Arrangements
…..
(c) The Seller may not withdraw the Lot from sale without our consent….
(d) If either we or the Seller withdraw the Lot, we shall charge the Seller a fee equal to 10% of the Insured Value, plus an amount equal to our commission if the Lot had been sold at the Insured Value, together with any applicable VAT and insurance and other expenses…..
9. After the Sale
(a) Accounting
………
If for any reason we make payment to the Seller of the amount due before payment by the Buyer, we shall acquire complete ownership of and title in the Lot …
(d) Unsold Lot
If any Lot is unsold, or is not included in a sale, or is withdrawn from sale for any reason, it must be collected from us within 35 days after we send the Seller a notice requiring the Seller to collect it. If any such Lot remains uncollected for a period exceeding 35 days, a storage charge of £1 per item per day will apply and an additional charge will be made for insurance. The Seller will not be entitled to collect the Lot until all outstanding charges are met.
If any such Lot is not collected within 90 days after the date of the sale or the date of the notice referred to above (whichever occurs first) it may be disposed of by us as we see fit, which may involve its removal to a third party warehouse at the Seller's expense and its sale by public auction on such terms as we consider appropriate, including those relating to estimates and reserves. We shall then account to the Seller for the proceeds of sale, having deducted all amounts due.
If any Lot is bought in or otherwise unsold by auction, we are authorised as the exclusive agent for the Seller for a period of two months following the auction to sell such Lot privately for a price that will result in a payment to the Seller of not less than the net amount – i.e. after deduction of all charges due from the Seller – to which the Seller would have been entitled had the Lot been sold at a price equal to the Reserve, or for such lesser amount as we and the Seller shall agree. In such event the Seller's obligations to us with respect to such a Lot are the same as if it had been sold at auction…..
The Judgments below
I deduce that there is a strong line of authority in the Court of Appeal that, for an auctioneer to be liable where he receives in good faith and without notice goods for auction from a non-owner, there must be a sale in which he is sufficiently involved followed by delivery to the purchaser. I am therefore so far against Professor Palmer's submission. So I would uphold the similar conclusion reached by Judge Hallgarten …
44. Secondly it is clear that the lien here was never exercised against anyone, let alone against [the claimant]. Nor did a right to exercise the lien arise. For the right would only arise after a notice had been sent requiring collection. No such notice was sent by Christies here. Even if a right of lien had been exercised by Christies against Mr Schuenemann, I think it doubtful whether that would amount to a conversion as against [the claimant]….
45. I do not consider that the fact that Christies took a right as against Mr Schuenemann to refuse to permit the picture to be withdrawn prior to auction can by itself, or if added to the other circumstances, convert what would not otherwise be a conversion, into one.
46. It was the view of Judge Hallgarten … that what matters in conversion is not the taking of powers by a bailee against his consignor but their exercise. I agree.
Receipt of goods by a way of pledge is conversion if delivery of the goods is conversion.
Conversion
Conversion of goods can occur in so many different circumstances that framing a precise definition of universal application is well nigh impossible.
He went on to add however:
In general, the basic features of the tort are threefold. First the defendant's conduct was inconsistent with the rights of the owner (or other person entitled to possession). Second, the conduct was deliberate, not accidental. Third, the conduct was so extensive an encroachment on the rights of the owner as to exclude him from use and possession of the goods. The contrast is with lesser acts of interference.
In the instant case the first and second of these features are present. It is the third which gives rise to the argument. Was there a sufficient encroachment on the claimant's rights as owner to amount to conversion?
I cannot find it anywhere distinctly laid down but I submit to your Lordships that on principle, one who deals with goods at the request of the person who has the actual custody of them, in the bona fide belief that the custodier is the true owner, or has the authority of the true owner, should be excused for what he does if the act is of such a nature as would be excused if done by the authority of the person in possession if he was a finder of the goods or intrusted with their custody.
I do not mean to say that this is the extreme limit of the excuse but it is a principle that will embrace most of the cases which have been suggested as difficulties.
Thus a warehouseman with whom goods had been deposited is guilty of no conversion by keeping them or restoring them to the person who deposited them with him, though that person turns out to have had no authority from the true owner….
And the same principle would apply to … persons "acting in a subsidiary character, like that of a person who has the goods of a person employing him to carry them, or a caretaker, such as a wharfinger".
has not claimed to transfer the title and he has not purported to sell; all the dominion he exercised over the chattels was to redeliver them to the person to whom the man from whom he had received them had told him to redeliver them.
Brett and Cotton LJJ agreed that on the evidence there had been no sale by the auctioneer. This case has been criticised, mainly for the conclusion that there had been no sale by the auctioneer.
…. where, as here, the auctioneer receives the goods into his custody, and, on selling them, hands over the goods to the purchasers with a view to passing the property in them, then I think the auctioneer has converted the goods and is liable accordingly, ……. The general rule is that where an agent takes part in transferring the property in a chattel and it turns out that his principal has no title, his ignorance of this fact affords him no protection. I was referred to the cases of a carrier and packing agent as supporting the case of the auctioneers. But the carrier and packing agent are generally held not to have converted, because by their acts they merely purport to change the position of the goods and not the property in them.
… it is not easy to draw the line at the precise point where a dealing with goods by an intermediary becomes a conversion. The difficulty is diminished by remembering that in trover the original possession was by a fiction deemed to be lawful … and some act had therefore to be shown constituting a conversion by the defendant of the chattel to his own use, some act incompatible with a recognition on his part of the continuous right of the true owner to the dominion over it. All acts, therefore, as suggested by Blackburn J. in his opinion …. in Hollins v Fowler which are consistent with the duty of a mere finder such as the safeguarding by warehousing or asportation for the like purpose, may well be looked upon as entirely compatible with the right of the true owner, and, therefore, as not constituting a conversion by the defendant. It may be, as suggested by Brett J. in the same case, that the test is whether there is an intent to interfere in any manner with the title of or ownership in the chattel, not merely with the possession. The difficulty is, I think, rather in drawing the true inference from facts in particular cases than in grasping the principle. There are, however, happily many cases which fall clearly on one side or other of the line. It is clear that there can be no conversion by a mere bargain and sale without a transfer of possession. The act, unless in market overt, is merely void, and does not change the property or the possession: Lancashire Wagon Co. v Fitzhugh and per Brett J. in Hollins v Fowler. A fortiori, mere intervention as broker or intermediary in a sale by others is not a conversion.
This passage emphasises the point that it is interference with the title or ownership of the chattel which counts for conversion. Thus it is the act of delivery following sale which makes the auctioneer liable in conversion since that is what interferes with the title or ownership of the goods. A sale without delivery does not have this effect and does not therefore amount to conversion.
It is now, I think, well established that if an auctioneer sells goods by knocking down with his hammer at an auction and thereafter delivers them to the purchaser – then although he is only an agent – then if the vendor has no title to the goods, both the auctioneer and the purchaser are liable in conversion to the true owner, no matter how innocent the auctioneer may have been in handling the goods or the purchaser in acquiring them: see Barker v Furlong …and Consolidated Co. v Curtis & Son… This state of law has been considered by the Law Reform Committee … in its 18th Report (Conversion and Detinue) (1971), Cmnd. 4774 as to innocent handlers: paragraphs 46-50. But Parliament has made no change in it: no doubt it would have done so in the Torts (Interference with Goods) Act 1977 if it had thought fit to do so.
If rightly decided, it is an authority for the proposition that a bailee escapes liability for conversion, not only where he merely redelivers to his bailor, but where he delivers at the bailor's directions to a third party without knowledge of any adverse claim, though with knowledge that such delivery is in pursuance of a sale or other disposition.
They then discuss the rule that receipt under a purported sale would amount to conversion and justify its retention without the need for a demand:
subject to the principle that a bailee who has accounted for the goods to his bailor should be exempt from liability to any other person (para. 43).
Turning to the problem of the innocent handler they say:
46. It is clear … that there are many cases in which the existing law imposes liability in conversion upon an "innocent handler" of goods…. But it is not entirely clear which acts of a handler will, and which will not, attract this liability. It has been said that a merely ministerial handling of goods at the request of an apparent owner having the actual control of them is not a conversion and that a handling is ministerial where it merely changes the position of the goods and not the property in them.
After referring to Blackburn J's test in Hollins v Fowler they conclude:
47. Where the handler, having received goods from an apparent owner and without knowledge of any adverse claim, merely redelivers them to the same person, we consider that all the above tests can fairly be said to have been satisfied, and we think that the same applies where the handler delivers the goods at the direction of the apparent owner to a third party without knowledge of any adverse claim or that any question of title is involved. But difficulties arise where the handler has knowledge that a question of title is involved, as where the act he is required to do is to his knowledge in pursuance of a sale or other disposition by the apparent owner to a third party. In such a case, on the authority of National Mercantile Bank v Rymill no liability attaches unless the defendant himself effected the sale as agent for the apparent owner; and, although the facts of that case hardly satisfy the test propounded by Blackburn J (whether the act done by the defendant can be said to have changed no more than the position of the goods), we do not, on a balance of the conflicting considerations involved, recommend a statutory reversal of this decision.
The council consented to the removal of the plant by [the other contractor] in violation of the company's right to possession. The fact that they gave such consent in advance at a time when the company was not entitled to possession can make no difference. The consent remained effective until the moment when [the other contractor] took the plant. This was sufficient to amount to a conversion.
This gives no support to Mr Palmer's submission. I read Lord Hoffmann as saying that the conversion took place when the plant was removed and that the council were liable because it happened with their consent which had been given earlier in the continuation contract.
Demand is not an essential precondition of the tort: what is required is an overt act of withholding possession from the true owner. Such an act may consist of a refusal to deliver up the chattel on demand, but it may be demonstrated by other conduct, for example by asserting a lien. Some positive act of withholding, however, is required; so that, absent any positive conduct on the part of the defendant, the plaintiff can establish a cause of action in conversion only by making a demand.
If he [the hirer of the goods] send them to an auctioneer to be sold, he is guilty of a conversion of the goods; and that if the auctioneer afterwards refuse to deliver them to the owner, unless he will pay a sum of money which he claims, he is also guilty of a conversion.
This case is not however authority for the proposition that the exercise of a lien against the would-be seller would amount to conversion against the true owner. As Jack J. said there must be some doubt about this.
A 'pawn' or 'pledge' is a bailment of personal property as a security for some debt or engagement….
Pawn has been described as a security where, by contract, a deposit of goods is made a security for a debt and the right to the property vests in the pawnee so far as is necessary to secure the debt; in this sense it is intermediate between a simple lien and a mortgage which wholly passes the property in the thing conveyed.
The rights of the pawnee in the thing pawned are distinguishable from a common law lien in that he acquires a special property or special interest in the property pawned, whereas a person exercising a lien has only a right to detain the subject matter of the lien until he is paid, and a lien is not transferable to a third person.
Bailment
A person taking possession of goods for a limited period or purpose owes a duty to take such care as is reasonable in all the circumstances to ensure that the person who delivers has the right to do so and the person to whom he redelivers the goods has a right to receive them.
Their Lordships wish to add that this conclusion … produces a result which in their opinion is both principled and just. They incline to the opinion that a sub-bailee can only be said for these purposes to have voluntarily taken into his possession the goods of another if he has sufficient notice that a person other than a bailee is interested in the goods so that it can properly be said that (in addition to his duties to the bailee) he has, by taking the goods into his custody, assumed towards that other person the responsibility for the goods which is characteristic of a bailee. This they believe to be the underlying principle.
Conclusion
Lord Justice Keene: I agree.
Lord Justice Peter Gibson: I also agree.