#7569 - Goods And Actions In Possession - Property, Equity and Trusts 1

Some introductory remarks are made about how possession is central to the idea of property and how even though the backbone of the law has been unchanged it has been incrementally developed by common law and in the UK been subject to sweeping legislative changes.

Holmes, in The Common Law (1881) speaks of the concept of possession using two examples:

• A bankrupt person does not lose possession of goods coming to him – this would be an invitation to all the world to scramble for possession of them (Webb v Fox); a rule which was justified on policy and convenience

• The idea of someone hooking a fish or a whale which has developed through custom rather than any cogent and linear concept of property law

  • He concludes saying that the law is a practical thing that should give effect to the primal instinct of one who attempts to take back what was dispossessed from him

There exists a distinction between real property and personal property

• Leases are considered as real property

• Personal Property that are either

  1. Choses in Possession (capable of being held in physical possession – jewellery etc.)

  2. Choses in Action (intangible property like debt, shares etc.)

• Three actions lie against one for wrongful interference with possession:

  1. Trespass – interference with actual possession

  2. Conversion – A suit lies where a positive wrongful act of dealing with goods in a manner inconsistent with the rights of the owner, who has rightful possession and not necessarily absolute ownership, is made

  3. Detinue – A suit lies where a plaintiff in actual possession or an immediate right to it where a defendant wrongly retains the goods following a lawful demand for them

     • Compensation for both can be return of the goods or the market value of the goods. Return may be ordered if the goods have some special value to the plaintiff; this can be adjusted for improvements (McKeown v Cavalier Yachts (1988))

• The requirements of detinue and conversion are:

  1. Actual or immediate right to posession at the date of interference/demand

     • A future right is insufficient – if ownership is transferred the agreement decides this

     • In the case of bailed goods the bailor may recall the goods at any time; meaning if a third party interferes both bailor and bailee has action against them

• A contractual right to possession without actual possession isn’t sufficient for detinue (Jarvis v Williams) – interesting example of one who buys goods from one not the owner but does not enter possession; his claim may be defeated by the wrongdoer asserting ownership of B. Jus tertii is used to deny the cause of action

• In Costello v Chief Constable of Derbyshire Constabulary, Lightman J ruled that possession, even if by theft (in which case the title is frail), vests possessory title which is good against all but one who can claim better title.

  • Battersby (Acquiring Title by Theft) comments on the idea of relative title – however acquired title prevails against all who subsequently possess without better title.

  • The same point is made in R v McKiernan [2003] in a case regarding a church bell

• The rule that a bailee can recover against a wrongdoer absent by a claim by a bailee is an exception to the general rule that damages are rewarded on a compensatory basis

• In general if jus tertii arises in a claim by the bailor against the bailee; the bailor is estopped from disputing the title of the bailee unless they can show a higher title (Biddle v Bond)

• Even if one is in breach of terms of bailment, this does not deny their entitlement to sue a third party to the bailment (Young CJ in The Anderson Group Pty Ltd v Tynan Motors [2006])

• Sometimes a bailee’s possession may be protected against a bailor (e.g. where a payment has already been tendered for the bailment; a truck in the case of City Motors v Southern Aerial Super Service)

• Actual possession is sufficient for damages to be equal to the market value of the goods but if some legal arrangement exists to limit the right of the possessor; damages will be compensatory and the plaintiff can only recover the true loss sustained (City Motors)

• Note the complex case on 121 where A allows B the use of a car when on holidays, C wrecks the car; A sues for damages B for nervous shock. If A settles; B has no claim arising from the bailment and must look to A for any interest he had in the car.