West Law Report

SCHWARZSCHILD v HARRODS LTD

Posted in cause of action, Conversion, Westlaw Reports by mrkooenglish on May 2, 2008

Last updated: 7:12 PM BST 09/04/2008
Queen’s Bench Division
Eady J
March 19, 2008

Accrual of cause of action – Conversion – Detinue – Jewellery – Limitation periods – Summary judgments – Demand for return of goods – Unequivocal refusal to return goods – Pt 24 Civil Procedure Rules 1998

FACTS

The appellant (S) appealed against an order for summary judgment made in favour of the respondent company (H) in respect of proceedings brought by S alleging that H had committed the tort of conversion in accordance with the Torts (Interference with Goods) Act 1977 s. 2(2). S had become entitled to jewellery contained in a safe deposit box held by H. However, after five years of non-payment of the box rental, H opened the box and made a list of its contents. Six years later H opened the box and made another list before mixing the jewellery with the contents of other deposit boxes in respect of which rental payments were owed. Three years later, a private investigator (D) acting for S sent a letter to H demanding an “immediate commencement of the process to return S’s jewellery”. H did not respond. A meeting then took place between the parties, which S said was without prejudice, and at which there was an inspection of the various mixed items in H’s possession. Eight years after that, S brought proceedings but the judge granted H summary judgment on the basis that they were time-barred.

The judge concluded that D’s letter should be construed as an unequivocal demand for delivery up of S’s jewellery; that because of the meeting between the parties there was no need for it to be demonstrated that H had responded with an unequivocal refusal; and that at or after the meeting, S acquired knowledge that the jewellery had been lost and that a cause of action in conversion had come about. S submitted that in order to give rise to a cause of action in statutory conversion it was necessary to establish both that the jewellery had been demanded from H and that there had been an unequivocal refusal. S also argued that although the judge had found that D’s letter represented an unequivocal demand, at no point in his judgment was an unequivocal refusal identified, whether before the critical date for limitation purposes or otherwise. H contended that in some circumstances it would be sufficient to show that a defendant merely “neglected” to comply with a demand.

ISSUE

Whether H had committed the tort of conversion in accordance with the Torts (Interference with Goods) Act 1977 s. 2(2).

HELD (appeal allowed)

Statutory conversion, corresponding to the common law tort of detinue, required a demand for the goods to be returned and an unequivocal refusal, Clayton v Le Roy [1911] 2 KB 1031 CA applied. It was true that there were passing references in some authorities to “neglect” or “failure” as alternatives to “refusal” but those were not easy to reconcile with the much fuller reasoning in Clayton. Inaction or neglect might perhaps in some circumstances be interpreted as an unequivocal response, but that was unlikely to be at all common.

It was right that the court should be guided by the decision in Clayton. The judge at no point identified an unequivocal refusal and D’s letter was at least equivocal. There was therefore no sufficient basis for the judge to conclude that a limitation defence was bound to succeed. It could not be said to be clear that a cause of action arose at the relevant time. According to CPR Pt 24, it was right to ask whether S had a real, as opposed to fanciful, prospect of resisting the limitation defence on the evidence as it stood. In the instant court’s view, the answer was in the affirmative and the order for summary judgment was set aside.

Stuart Isaacs QC and William Willson (instructed by Watson & Brown, South Shields) for the appellant. Ian Croxford QC and Andrew Mold (instructed by Lewis Silkin) for the respondent.

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