Title & Possession

Cases

Armory v Delamirie

[1722] EWHC KB J94 (1722) 1 Strange 505, 93 ER 664, [1722] EWHC KB J94

Finder of a jewel may maintain trover.

The plaintiff being a chimney sweeper’s boy found a jewel and carried it to the defendant’s shop (who was a goldsmith) to know what it was, and delivered it into the hands of the apprentice, who under pretence of weighing it, took out the stones, and calling to the master to let him know it came to three halfpence, the master offered the boy the money, who refused to take it, and insisted to have the thing again; whereupon the apprentice delivered him back the socket without the stones. And now in trover against the master these points were ruled:

1. That the finder of a jewel, though he does not by such finding acquire an absolute property or ownership, yet he has such a property as will enable him to keep it against all but the rightful owner, and consequently may maintain trover.

2. That the action well lay against the master, who gives a credit to his apprentice, and is answerable for his neglect.[1]

3. As to the value of the jewel several of the trade were examined to prove what a jewel of the finest water that would fit the socket would be worth; and the Chief Justice directed the jury, that unless the defendant did produce the jewel, and shew it not to be of the finest water, they should presume the strongest against him, and make the value of the best jewels the measure of their damages: which they accordingly did.

United States of Americal and Republic of France v Dollfus MIEG Et CIE and Bank of England

[1952] AC 593

Earl Jowitt

Light is thrown on the present problem by the United States cases. They are precedents on international law which is based on the generally accepted policy of civilized nations; they are evidence of what that is. They should be given special weight because they are derived from the common law: see The Davis31; Long v. The Tampico32 and Compania Espanola de Navigacion Maritima S.A. v. The Navemar.33

On the point of possession and control the law is as follows: (1) Possession is exclusive and individual and cannot exist in two persons at the same time. (2) In the case of a bailment possession is in the bailee because transfer of possession is an essential ingredient in bailment. (3) No element of possession can remain in the bailor; a fortiori he does not retain custody. (4) Control of a chattel cannot exist apart from possession or custody; control is an element in possession. (5) A bailor cannot have control, since he has neither possession nor custody; all he has is a bare right against the bailee only to terminate the bailment and thereby regain control. (6) Delivery of control to the bailee is just an essential element in the delivery of possession. (7) If there were neither possession nor control in the bailee there would be no bailment but the bank would be the mere servant or agent of the three governments. (8) The bailor’s right to sue in trespass is not founded on possession, which he has not got, but on ownership, which he has. (9) This action is not one in which judgment would necessarily result in seizure and detention of the bailed goods. (10) Actions for detinue and conversion, being personal actions, are correctly brought against the person in actual possession (e.g., a bailee); a bailee can always be sued by a third party and the bailor’s title can be tried in the action without any necessity of joining the bailor. (11) Judgment for the plaintiffs in the present case for damages only would not even affect the bailor’s right to possession as against the bailee because the bailee is not estopped from denying his bailor’s title if he elects to challenge it relying on the title of a third party and with that party’s authority.

Even if the bars, or any of them, were held by the bank as bailees for the three governments, neither in fact nor in law were they in the possession or under the control of those governments or any of them. At all material times they were in the possession and under the control of the bank.

Ancona v. Rogers,34 relied on by the appellants, is distinguishable. It turned on the words of the Bills of Sale Act, 1854, and the relevant expression was “apparent possession,” which is different from actual possession. The judgment was not concerned with possession as opposed to property, and the rule in the dicta relied on applies only where the bailor has the property and the bailee has possession. In such a case the bailor can sue by virtue of his right of property, but only the bailee can sue for possession. If it was intended to suggest that the goods were actually in possession of the bailor, the dicta, which were obiter, were wrong. In any event, they are not binding on the House of Lords.

In The Amazone,35 also relied on by the appellants, the key to the decision was that the applicant was the registered owner of the yacht and the claim was in rem, and an order would have had to be made against him to remove his name from the register. That case does not help either party in the present action.

[They also referred to Pollock and Wright on Possession, pp. 20, 27, 131, 145, 163, 166; Halsbury’s Laws of England, 2nd ed., Vol. I, p. 724, para. 1196; p. 773, para. 1265; p. 774, para. 1267; Lincoln Wagon and Engine Co. v. Mumford36; The Winkfield37; Wilson v. Anderton38; Wetherman v. London and Liverpool Bank of Commerce Ld.39; Rogers, Sons & Co. v. Lambert & Co.40 and The Crimdon.41]

To sum up the argument: (1) This was not a contract of bailment. (2) If it was, then (a) no possession or control remained in the bailors; (b) even if some element of possession or control remained in them, it was not the sort of possession or control referred to by Lord Atkin in The Cristina,42 and (c) even if possession or control remained in them, then, if the claim for delivery up is abandoned (as the plaintiff company is willing to abandon it), judgment for the plaintiff company would not involve seizure or detention of the bars within Lord Atkin’s proposition, and so the action must proceed in respect of the claim for damages for conversion. (3) In any event, the action can go on as regards the 13 bars because once they were sold any element of control or possession in the governments disappeared.

Richard Wilberforce following. The question of control is not material if it is held that there was not a bailment or if in the proceeding it is not sought to recover property in the possession or control of the foreign governments. Lord Atkin’s observations in The Cristina42 were made in relation to a ship. To apply them to chattels generally is not a mere gloss on his words but amounts to transferring them to another field where they have no place. That case applies only to an action in rem, and in other cases retention in the hands of the possessor himself is necessary to bring them within its principles. The Cristina43 was a case of requisition, which is not a term of art but usually denotes a temporary possession or control rather than a confiscation: see McNair on The Legal Effects of War, 3rd ed., p. 435n. As to the position of state-owned ships, see per Lord Wright.44 The immunity of ships in the ownership or possession of foreign governments is based on the fundamental characteristic that they are used for public purposes: see The Crimdon45 and The Broadmayne.46 The courts disallow process in regard to requisitioned ships and it is in the light of this situation that “control” is spoken of in The Cristina.47 This conception is not capable of being transplanted on to land and applied to chattels, though a permissible extension of the principle would be to apply it to aircraft.

In a case such as the present it is not a sufficient test to say that the property is in the hands of a person who has no right to deny the title of him from whom he received it and who has to carry out his orders. That does not coincide with what was in the minds of the Lords who decided The Cristina,48 for the question of title did not arise there. But in a case like the present you create difficulties if you eliminate the conception of title. There may be many persons who have to carry out the orders of a foreign sovereign with regard to property, to whom it would be strange to apply the doctrine of sovereign immunity.

On the appellants’ argument it would apply to a purely contractual right arising out of a contract for the manufacture and delivery of shells by order of a foreign sovereign. Yet it could not apply there, for example, if the manufacturer went bankrupt and his creditors claimed his assets. Other examples might be found in the case of a company controlled by a foreign government; there again the doctrine would not apply. Yet if the principle rested on an unconditional obligation to carry out the orders of a foreign sovereign it would be hard to find any bounds to its application.

Both in civil and criminal matters the courts are accustomed to dealing with elaborate cases of possession: see, for example, The Jupiter (No. 3).49 To deal with this case on the basis of possession is not strange or artificial. Possession is transferred when an object is given to a bailee to hold on bailment: see Pollock and Wright on Possession, pp. 58, 131. The article in the Law Quarterly Review cited on behalf of the appellants did not take account of that. The possession by the bank is distinct from possession by the governments.

Sir Hartley Shawcross K.C. in reply. The case for the appellants rests mainly on control. But on the question of impleading a foreign sovereign one may find an indirect impleading in respect of property of which the sovereign has neither possession nor control at the time of the suit: see The Cristina.50 Indirect impleading covers any case where the sovereign is a necessary or proper party to the action and is put in the dilemma that he must either intervene (if need be by leave of the court) or risk some prejudice to his interest in the subject-matter of the suit. In the present case the appellants would have been proper parties and but for the doctrine of sovereign immunity would in the normal course have been brought in by interpleader. It would be strange if the parties most interested in the subject-matter were not proper parties to the action. But their interest is sufficient: see Dollfus Mieg et Compagnie S.A. v. Bank of England.51 It is an instance of indirect impleading which has scope beyond an action in rem.

As to the question of bailment, the bank was the custodian of the bars for its customers, although a possible view is that though it was not the bailee in the sense of being bound to return specific bars to specific customers it was bailee for the pool of gold for all its customers.

The American cases relied on by the company are not binding on the House of Lords and, in any event, turn on their own facts. Perhaps they exemplify a more liberal view from the subject’s standpoint so that actions which would have been stayed here have not been stayed in the United States. The key to those cases lies in the degree of control left in the bailor. There is nothing in the doctrine of sovereign immunity in English law to suggest that the sovereign’s interest must be exclusive.

As to possession, although it is true that possession cannot reside in two persons who have adverse claims, the argument for the company involves too strict an interpretation of the peculiar English doctrine of possession based on the old forms of action. It is an over-refinement to say that a person who has had possession loses it the moment he places it in the temporary custody of some person, not his servant, to hold it safe. This is not supported by English authority and is contrary to the rule of international law. Roman law has had a great influence on the law of bailment: see Halsbury’s Laws of England, 2nd ed., Vol. I, p. 725, para. 1196. Considering possession broadly one can have regard to the principles of Roman law. A bailee did not have the animus to hold as owner and so he had not got possession although he held the corpus: see Buckland’s Textbook of Roman Law, 2nd ed., pp. 196, 467, 500. The true view is that a bailor with an immediate right to possession has possession. Although the trover and detinue cases are not conclusive on this matter a bailor can sue in trover and detinue when he has an immediate right to possession and the bailee is his delegate. [He referred to The Arantzazu Mendi52; Government of the Republic of Spain v. The Arantzazu Mendi53; Ancona v. Rogers54; Lincoln Wagon and Engine Co. v. Mumford55 and Holmes on The Common Law, p. 235.]

As to control by the foreign sovereign, the shipping authorities are not inapplicable to the present case and the second limb of Lord Atkin’s observations in The Cristina56 does not apply to ships only. One can have control of a chattel apart from possession. In the user of bars of gold the significant thing is how they shall be employed, whether as security or as a medium of exchange or as a symbol of value. In this respect the appellants controlled the gold and it does not matter how it was kept. It is an offence to common sense to say that a foreign sovereign who

in the ordinary course of dealing with such things as gold puts them into the custody of some other person loses his right of immunity. For example, while he is staying at an hotel he may deposit jewellery in the hotel keeper’s safe. There has never been a case in which an argument such as the company’s has succeeded.

If it is claimed that damages is merely an alternative remedy the court should not allow this. If it were allowed it would drive a horse and cart through the doctrine of sovereign immunity. In the present case the claims for delivery up and for damages are alternative remedies in the same cause of action. To order the bank to pay damages because it will not deliver up something which it holds for the foreign sovereigns is an interference with the rights of the foreign sovereigns. If it paid damages it could assert a title to the gold against the governments. The effect of the company’s argument is that at some stage or other the governments must prove their title and that is just what they are not to be forced to do. Such a proceeding has the indirect result of putting pressure on the bailee to deliver up the goods, and this device would largely destroy the possession and control of property which a sovereign can exercise through a bailee. The court can neither award damages nor order delivery up.

Only in the case of the 13 bars which have been disposed of, thereby destroying the possession and control of the governments, may damages perhaps be awarded. But if the respondents were right in their main contention, no bailee in the position of the bank would be safe from an action for damages whether he dealt with the goods in accordance with the bailment or not.

Their Lordships took time for consideration.

1952. Feb. 25. EARL JOWITT. My Lords, Dollfus Mieg et Cie., the respondents to this appeal, are a French company who before the outbreak of war in 1939 had acquired as their property 64 bars of gold. These bars of gold were stored in a bank at Limoges in a special vault which the respondents had hired. When the German armies overran Limoges they captured the 64 bars in question and carried them off to Germany; and when the American armies occupied that part of Germany at which the bars had been stored by the Germans they were taken possession of by the Americans and brought to Frankfurt, where they remained for some time in American custody. Negotiations followed between the various allied governments as to the course to be followed with gold captured by the allied armies in Germany and finally a treaty was signed between 18 allied governments. Nothing, I think, turns for present purposes on the precise terms of that treaty – it is sufficient to say that the 64 gold bars in question, together with other gold bars, passed into the possession of the American, British and French Governments. These governments established a “Tripartite Commission for the Restitution of Monetary Gold” to deal with gold taken from Germany on their behalf.

In March, 1948, a “gold set-aside account” was opened at the Bank of England in accordance with the terms of a letter from H.M. Treasury dated March 9, 1948, and the bank’s reply dated March 11, 1948. The trial judge set out the terms of these letters in his judgment and came to the conclusion that the effect of the letters was to create a contract between the Bank of England and the American, British and French Governments. He regarded the Treasury as a mere intermediary acting on behalf of the governments who were to operate the account. I think he was amply justified in reaching this conclusion.

The terms of the contract must be construed in the light of the course of business which was well known to all the contracting parties. Ever since 1940 the Bank of England in operating a gold set-aside account had not kept separate the gold belonging to one customer from the gold belonging to another customer, though the customers’ gold, considered globally, was kept separate from gold belonging to the bank itself. Under the “gold set-aside” account as managed in 1948 the bank on receiving gold in whatever form from a customer would weigh the gold and assay it and, if necessary, bring it up to the standard of fineness for good delivery in the London Bullion Market. Until the completion of weighing and assay the particular gold would be kept separate in the name of the depositor, but once these operations were completed there would be recorded in the books of the bank the number of ounces of fine gold comprised in the deposit, and the depositor would be entitled to receive from the bank the number of ounces of fine gold so ascertained, less charges. The customer would, however, no longer be entitled to receive any particular bars of gold in satisfaction of his contract. The contract, in short, once weighing and assaying had been completed, created a relationship between the depositor and the bank closely resembling that of debtor and creditor, except that the bank’s obligation was to be discharged by the handing over of the requisite number of ounces of fine gold.

During the hearing in your Lordships’ House we had produced for our inspection the bank’s account. This is headed “Bar Gold set aside o/a His Majesty’s Treasury o/a the Governments of the United States, the United Kingdom and France.” The account opens under date May 20/April 19-23, 1948, with an item imported from B.N. Suisse Berne,” and this is entered as 578700 oz. fine.”

The 64 bars, the subject-matter of these proceedings, were dealt with on a different basis. By a letter of July 10, 1948, a Monsieur Rueff, who was acting on behalf of the French delegation of the Inter-Allied Reparations Agency, wrote to the Secretary-General of the Tripartite Commission asking that the 64 bars should be preserved in their present form, and, as a result of this request, the Secretary-General of the Tripartite Commission, in a letter dated July 16 addressed to the Bank of England, asked if the bank would be able and willing to “have these bars set aside intact on arrival, if they can be identified, pending receipt of a further communication from the Commission.” By a letter of July 19, 1948, the Bank of England answered as follows: “The proposal which you make is acceptable to the Bank of England provided that at the time we receive the authority of the Commission to hold the gold at the disposal of the Bank of France we also receive instructions from them to ship the gold from London.”

Shortly after these letters the bank received the 64 bars and, as requested, set them aside. The weighing and assaying of the 64 bars was not completed until shortly before October 25, 1948, and their gold content was on that day entered in the “gold set-aside account” as 25,679.605 fine ounces. This entry was, however, plainly not intended to terminate the bank’s obligation to hold the specific 64 bars, for the letter of October 25, 1948, from the bank to the Tripartite Commission recording the above facts concludes with this sentence: “I would mention that in view of the circumstances outlined in your letter under reference these bars have been temporarily segregated pending the receipt of instructions as to their disposal.”

In these circumstances, I think that the correct view is that the letters of July coupled with the sending of the 64 bars to the bank constituted a bailment of the 64 bars “pending receipt of a further communication from the Commission,” and that the contract of bailment continued, notwithstanding the entry of October 25. If there had been no special arrangement constituted

by the July letters I should have been of opinion that the bailment of the individual bars had been terminated when the account was credited with the fine gold content.

The writ in the action in which Dollfus Mieg were plaintiffs and the Bank of England were defendants was issued on October 18, 1948, and claimed delivery of the 64 bars and an injunction restraining the defendants from parting with the bars; and on November 2 the plaintiffs asked for an injunction restraining the defendant bank from selling or parting with the possession of the 64 bars. On the same day the bank served notice of motion asking the court to set aside the writ on the ground that the 64 bars were in the possession or control of the Governments of the United States of America, the Republic of France and the United Kingdom, and upon the further ground that the two foreign governments who declined to submit to the jurisdiction were directly or indirectly impleaded. On March 8, 1949, the writ was amended by the insertion of a claim for damages for detention and conversion of the 64 bars.

The respondents Dollfus Mieg by an affidavit sworn on their behalf by Frederic Engel on October 16, 1948, asserted that the 64 gold bars in question had been purchased by them and remained their property at all material times; and an affidavit sworn by Mr. Rootham, an assistant chief cashier in the employment of the Bank of England, set out the terms of the letters of March 9 and 11, 1948, and was relied upon by the bank in support of their application to stay all further proceedings. It is the fact that this latter affidavit made no reference to the July correspondence. Further affidavits were put in establishing the fact that the Governments of the United States of America and of the Republic of France were not willing to submit to the jurisdiction. Mr. Engel made a further affidavit dated December 17, 1948, referring to and exhibiting the letter from Mr. Rueff of July 10, 1948, and this produced a further affidavit by Mr. Rootham exhibiting the two letters of July 16 and 19, 1948, respectively.

I have briefly referred to all the evidence that was available to Jenkins J. when the case was heard before him in March, 1949. Unfortunately the fact that by some mistake 13 of the 64 bars had been delivered to purchasers outside the bank between December 30, 1948, and January 26, 1949, had not then been discovered, so that the case before the trial judge proceeded on the basis, which everyone believed to be the fact, that the 64 bars were still intact in the bank’s possession. If discovery had been ordered it is possible that this fact would have been brought to light; but, whether this would have been so or not, it seems to me desirable that in a case of this sort an order should be made for full disclosure of documents before the hearing. In the present case, as is apparent from the judgment of the Master of the Rolls, documents were produced before the Court of Appeal which had not been produced before the trial judge, and in your Lordships’ House still further documents were produced which had not been available to either of the courts below. This would have been avoided if full discovery had been given.

Jenkins J. delivered his reserved judgment on April 6, 1949, setting aside the writ.57 He regarded the three governments as being in possession or control of the 64 bars of gold, which were held for their public purposes, and regarded the action against the Bank of England as being an attempt to sue indirectly the three governments, two of whom he treated as foreign sovereign States. He decided that so long as property is in the possession or control of a foreign sovereign State no court in this country can entertain proceedings which, if successful, would result in any interference with the foreign sovereign State’s exercise of such possession or control, whether directly (as by removing the property from the custody of an agent to whom the foreign sovereign State has entrusted it), or indirectly (as by casting in damages for wrongful possession an agent through whom the foreign sovereign State is exercising its possession or control).

Dollfus Mieg appealed to the Court of Appeal, and before the conclusion of the hearing in that court the fact that by some error 13 of the 64 bars had been delivered on the market was revealed. I have not overlooked the fact that the disposal of the 13 bars did not take place until after the issue of the writ. This difficulty could have been surmounted by the issue of a further writ after January 26, 1949, and all the parties have asked us to treat the case as though the writ had been issued on the later date. My Lords, it is, I think, clear that so treating the date of the writ the action in regard to these 13 bars must be allowed to proceed, for in regard to them it may well be argued that no question any longer arises of interfering with the possession or control of a foreign sovereign State. I do not think it would be proper for us to come to any final conclusion as to this matter. It is not for us to try the case. We have merely to decide at this stage whether the action should or should not be allowed to go for trial, and in so far as the 13 bars are concerned I certainly think that

the action should be allowed to go on. All the members of the Court of Appeal thought, however, that the disposal of the 13 bars made it inevitable that the action should be allowed to proceed as to the entire 64 bars. The Master of the Rolls58 thought that the disposal of the 13 bars had “destroyed at a single blow the whole premiss on which the judgment below proceeded.” Somervell L.J. would have agreed with the judgment of Jenkins J. but for the disposal of the 13 bars. He states his view as follows59: “The 64 bars for all relevant purposes at all material times were in the pool. Thirteen of them were disposed of, and the whole 64 might have been disposed of without instructions from or reference to the Tripartite Commission. In these circumstances it seems to me impossible to hold that these 64 bars were in the possession or control of the three governments.” Cohen L.J. agreed with Somervell L.J. My Lords, I cannot agree with this reasoning. If the bars were in the possession or control of the governments I cannot think that the fact that by some error of internal management 13 bars were disposed of alters the position except as to those 13 bars. For the question of possession or control must depend on the terms of the contract under which the bars in question came to the bank; if possession or control was retained by the governments that position is not altered by the fact that through an error 13 bars were disposed of in breach of the contract. Unless the disposal of the 13 bars throws some light upon the terms of the contract it seems to me to be irrelevant in regard to the remaining 51 bars. I have already stated my view that in regard to the 64 bars there was a contract of bailment and an obligation was thereby imposed on the bank to keep these bars separate and intact and not to allow them to become merged in the general pool of customers’ gold pending the receipt of further instructions. The Master of the Rolls, differing in this respect from the other judges in the Court of Appeal, thought that Jenkins J. had come to an erroneous conclusion on the facts as presented to him. He thought that from and after the time at which the 64 bars were delivered to the bank the governments no longer had such a degree of possession or control as would justify them in asking to have the action stayed.

Lord Porter

The facts have been set out by Jenkins J. in the court of first instance, by Cohen L.J. in the Court of Appeal, and by the noble Earl on the woolsack in your Lordships’ House. I need not repeat them.

Jenkins J. stayed the action, but when he gave his judgment he was unaware that after action brought the bank had delivered 13 of the 64 bars to third parties. The majority of the Court of Appeal, as I understand them, would have reached the same conclusion as the learned judge if they had had to depend on the same material, but thought that the disposal by the bank of the 13 bars destroyed the argument for staying the proceedings in respect of the whole of the 64; Somervell L.J.’s view being that the bank had ceased to keep them separate because, thoughit had stacked them in two special trucks and placed a notice that they were not for disposal, it had failed to enter a warning note on the cards relating to the consignment in question and that the entry of the note was a precaution which must be observed if the bars are to be regarded as separated from the pool. The Master of the Rolls went further and thought that even without the additional evidence a case had been made for allowing the action to proceed against the bank. In his view it was not established that the bank were ever under a duty to keep the bars separate and, even if they were, he agreed with the other members of the court in thinking that they had not done so.

This portion of the case involves a question of fact or inference from fact and, in my view, the inference drawn by the Court of Appeal is not justified. The correspondence and affidavit evidence show that though since 1940 it has not been the practice of the bank, except as the consequence of a special arrangement, to keep a customer’s gold separate from that of other customers, yet in this special case they agreed to do so and took steps to carry out their agreement. I cannot read the letter dated October 25, 1948, from the bank to the Tripartite Commission as bearing any other meaning. The suggestion that it means “We have in fact but without obligation held the bars separate but that separation ceased once we had assayed,” is inconsistent with that letter, and indeed with the general import of the correspondence. The entry in the account crediting it with the value of the bars and the charges made for assaying do not conflict with this view. It is but an account-keeping device and it would be odd if the bank, knowing that an action had been brought against it and, indeed, as a result of that fact, were to change the whole relationship between itself and its customer.

But it is said H.M. Treasury was the customer and the Tripartite Commission was merely empowered to draw on the account through certain specified persons nominated by the Treasury. I cannot take that view. The Treasury was no doubt the instrument by means of which the relationship between the bank and the Tripartite Commission was brought about; the Commission, however, were the only body entitled to deal with it and, in fact, through their secretary, gave instructions to the bank and were informed by its officials of the action taken. It is true that instructions as to the operation of the account are, in the words of Sir Edward Rowe Dutton, in his letter of March 9, 1948, entrusted to certain named representatives, but this arrangement is limited to instructions for the operation of the account and leaves the Commission to make arrangements through its secretary as to the disposal of the bars. In fact, the Commission gave such instructions and the bank accepted them.

Had, then, the 64 bars remained intact, I find myself in agreement with the original judgment of Jenkins J.

Does it, then, make a difference that in error 13 bars were treated as if they were part of the pool from which gold could be drawn for customers generally instead of being treated as confined in use to one particular customer? The reason for the decision of the majority in the Court of Appeal is perhaps most clearly exemplified in the words of Somervell L.J. He says68: “The authorities of the bank responsible for the correspondence with the Tripartite Commission intended that these bars should be kept apart from the pool and held as individual bars for the three governments. Some steps were taken to this end, but, as the facts show and as is admitted, one necessary step was not taken. The 64 bars for all relevant purposes at all material dates were in the pool.” My Lords, with all due respect, I am unable to concur with this view. In fact, the bars were kept separate in two trucks and a notice was placed on them to indicate that they were to be used only for a particular purpose. It is true that one precaution, viz., an entry on the cards, which would have been helpful in avoiding a misuse of the bars and might have prevented it, was not taken, but that neglect did not cancel the instructions of the Tripartite Commission or the bank’s acceptance of them. So long as the bars remained in the possession of the bank, a failure to take all possible precautions or indeed even a failure to take all reasonable precautions to prevent the bars being dealt with in the ordinary course, is not effective to destroy the conditions on which the bank were instructed to hold the bars and on which they agreed that the bars should be held. Misdelivery may in certain cases put an end to a claim to possession, though it will not in the normal case destroy a right of property. On the other hand, negligence in failing to take all possible steps to see that an arrangement which had been made is carried out does not alter the fact that all bars in the possession of the bank remained in their possession subject to the terms upon which they were deposited. In such a case, however, misdelivery does, in my view, affect the position, since, as regards the 13 bars, it can no longer be asserted that they are in the possession of the three governments through their bailees, the bank.

That the bank are bailees is, I think, not open to doubt, but that fact leaves undecided the difficult and interesting question: Can those who assert a possessory title to goods but make no claim to the property in them be said still to retain possession after they have entrusted those goods to a bailee to hold on their behalf? There is no direct English authority which decides the point, much less one binding on your Lordships. The nearest, I suppose, is Ancona v. Rogers,69 a decision on the words “apparent possession” contained in section 1 of the Bills of Sale Act, 1854 (17 & 18 Vict. c. 36). In delivering the judgment of the court in that case Mellish L.J. said70: “There is no doubt that a bailor, who has delivered goods to a bailee to keep them on account of the bailor, may still treat the goods as being in his own possession, and can maintain trespass against a wrongdoer who interferes with them. It was argued, however, that this was a mere legal or constructive possession of the goods and that in the Bills of Sale Act the word ‘possession’ was used in a popular sense and meant actual or manual possession. We do not agree with this argument. It seems to us that goods which have been delivered to a bailee to keep for the bailor, such as a gentleman’s plate delivered to his banker, or his furniture warehoused at the pantechnicon, would, in a popular sense, as well as in a legal sense, be said to be still in his possession.” It is urged, however, that these “dicta” are “obiter,” and wrong; that, in any case, the judgment was not concerned with “possession” as opposed to property and that the true view is that the rule applies only in a case where the bailor has the property and the bailee has the possession. In such a case it is maintained that the bailor can sue in right of his property but that an action in right of possession belongs to the bailee only. This contention may be true where the bailor has no right to demand an immediate return of the article at his will, but the better opinion is, I think, that where the bailor can at any moment demand the return of the object bailed, he still has possession. See Pollock and Wright on Possession (1888), p. 166; Beal on Bailments (1900), p. 40; and Halsbury’s Laws of England, 2nd ed., Vol. I, p. 775, sub tit. Bailment. In each of the authorities referred to the right of the bailor is limited to a case of gratuitous bailment, a requisite which, in my opinion, is fulfilled in the present case. The bank held the bars, without any right of lien, at the will of the Commission.

The Commission being, in my opinion, as I have indicated, still in possession of 51 of the bars, it has to be determined whether they or the bank are entitled to immunity from suit instituted by the respondents. Such an action, it is argued on behalf of the latter, can be brought and determined without in any way impleading the two governments or affecting their rights. It is accepted by both parties that the principles to be considered are those laid down by Lord Atkin in Compania Naviera Vascongado v. The Cristina.71 In the relevant passage he says, in regard to those principles: “The first is that the courts of a country will not implead a foreign sovereign, that is, they will not by their process make him against his will a party to legal proceedings whether the proceedings involve process against his person or seek to recover from him specific property or damages. The second is that they will not by their process, whether the sovereign is a party to proceedings or not, seize or detain property which is his or of which he is in possession or control.” As, in the view which I have expressed, the three governments are in possession of the 51 bars, it is not necessary to inquire what is the exact meaning to be attributed to the word “control.” It is enough that they are in possession and an attempt is being made to interfere with that possession.

But it is said that the decision in The Cristina72 is not of universal application but applies only to an action in rem and that, in other cases, retention in the hands of the possessor himself is required to bring its principles into force. It is true that the matter then under consideration was a ship and that a decision in respect of a ship is an action in rem and would therefore bind all the world and not the parties only, but the observations of those members of your Lordships’ House who sat to decide the case were by no means confined to actions in rem. They extended to the case of all chattels: see, in particular, the observations of Lords Maugham and Wright. The principle, in my opinion, is a wider one and embraces any chattel, whether the subject of an action in rem or not. No doubt the doctrine should, as Lord Maugham said in The Cristina,73 be narrowly watched, but it has always to be remembered that governments must act through servants or agents and often through bailees, and it would destroy the efficacy of the doctrine if it were strictly confined to personal possession.

I do not myself find any great enlightenment in the American cases on the subject under discussion. They all, I think, turn on who was in possession at a particular time and depend on their own facts.

So far I have dealt with the claim of the respondents to recover the gold bars themselves and with their claim to an injunction. Sir Andrew Clark, however, on their behalf, expressed himself as willing to give up that claim and rest on his right to recover damages for conversion. Such a claim, he maintained, neither impleaded the sovereigns nor involved a seizure of their property. It was merely a claim for damages against the bank. But if the bank were ordered to pay damages to the respondents, Messrs. Dollfus Mieg et Cie.’s right of property would in law be transferred to them on their paying the damages awarded, and it would follow that, if the Tripartite Commission required the bank to return the bars, the bank could refuse to do so, relying on the title acquired by the payment of the damages, and thereby compel the governments either to bring an action or forgo their rights. The object of the rule, it has been said, is that a sovereign may not be compelled either to submit to a foreign jurisdiction or be compelled to go to law to obtain or preserve his right. Such an object might be defeated if this action were permitted to proceed since the bank is in possession and could refuse to surrender the bars and so compel the governments, if so minded, to take action in an endeavour to recover them.

Elitestone Ltd v. Morris and Another

[1997] UKHL 15 [1997] 1 WLR 687, [1997] 27 EG 116, [1997] 2 All ER 513, [1997] 2 EGLR 115, [1997] NPC 66, [1997] WLR 687, (1998) 30 HLR 266, [1997] EG 62, [1997] UKHL 15

Lord LLoyd

My Lords,

The plaintiffs, Elitestone Ltd., are the freehold owners of land known as Holt’s Field, Murton, Near Swansea. The land is divided into 27 lots. The defendant, Mr. Morris, is the occupier of a chalet or bungalow on Lot No. 6. It is not known for certain when the chalet was built. But it seems likely that it was before 1945. Mr. Morris has lived there since 1971.

The plaintiffs acquired the freehold in 1989 with a view to redevelopment. On 30 April 1991 they issued proceedings in the Swansea County Court claiming possession against all 27 occupiers. Five lead actions were selected, including that in which Mr. Morris was defendant. They came on for trial before Mr. Assistant Recorder Bidder in November 1994. The assistant recorder had a number of issues to decide. He dealt with them in a most impressive manner. So far as Mr. Morris is concerned, his defence was that he is a tenant from year-to-year, that he occupies the premises as his residence, and is therefore entitled to the protection of the Rent Act 1977. He claims a declaration to that effect.

The assistant recorder held, correctly, at the end of what was necessarily a very lengthy judgment that the question in Mr. Morris’s case turned on whether or not the bungalow formed part of the realty. If it did, then Mr. Morris was entitled to his declaration.

Having visited the site, the assistant recorder had this to say:

“While the house rested on the concrete pillars which were themselves attached to the ground, it seems to me clear that at least by 1985 and probably before, it would have been clear to anybody that this was a structure that was not meant to be enjoyed as a chattel to be picked up and moved in due course but that it should be a long-term feature of the realty albeit that, because of its construction, it would plainly need more regular maintenance.”

The Court of Appeal disagreed (unreported), 28 July 1995, Court of Appeal (Civil Division) Transcript No. 1025 of 1995. Aldous L.J., who gave the leading judgment, was much influenced by the fact that the bungalow was resting by its own weight on concrete pillars, without any attachment. He was also influenced by the uncertainty of Mr. Morris’ tenure. Although Mr. Morris had been in occupation since 1971, he was required to obtain an annual “licence.” At first the licence fee was £3 a year. It rose to £10 in 1984, then to £52 in 1985, and finally to £85 in 1989. In 1990 the plaintiffs required a licence fee of £1,000: but Mr. Morris, and the other occupiers declined to pay.

On these facts Aldous L.J. inferred that it was the common intention of the parties that the occupiers should acquire the ownership of their bungalows, but the ownership of the sites should remain in the freeholders. On that footing Mr. Morris’ bungalow was to be regarded as a chattel. It was never annexed to the soil, so it never became part of the realty. It followed that the tenancy did not include the bungalow, and Mr. Morris was not a protected tenant.

Unlike the judge, the Court of Appeal did not have the advantage of having seen the bungalow. Nor were they shown any of the photographs, some of which were put before your Lordships. These photographs were taken only very recently. Like all photographs they can be deceptive. But if the Court of Appeal had seen the photographs, it is at least possible that they would have taken a different view. For the photographs show very clearly what the bungalow is, and especially what it is not. It is not like a Portakabin, or mobile home. The nature of the structure is such that it could not be taken down and re-erected elsewhere. It could only be removed by a process of demolition. This, as will appear later, is a factor of great importance in the present case. If a structure can only be enjoyed in situ, and is such that it cannot be removed in whole or in sections to another site, there is at least a strong inference that the purpose of placing the structure on the original site was that it should form part of the realty at that site, and therefore cease to be a chattel.

There were a number of other issues in the Court of Appeal. I need only mention one. This was an argument by the plaintiffs that Mr. Morris was estopped by convention from denying that the bungalow was a chattel. There was, so it was said, a common assumption that the chalets were owned separately from the land, since each occupier purchased his own chalet from the previous occupier (Mr. Morris paid £250 for No. 6 in 1971), and each occupier paid an annual licence fee to the freeholders. Since the Court of Appeal held that the bungalow was a chattel, they did not find it necessary to deal with the estoppel argument. The plaintiffs might have renewed the argument before your Lordships. But in the meantime the House had given judgment in Melluish v. B.M.I. (No. 3) Ltd. [1996] A.C. 454. In that case Lord Browne-Wilkinson said, at p. 473:

“The terms expressly or implicitly agreed between the fixer of the chattel and the owner of the land cannot affect the determination of the question whether, in law, the chattel has become a fixture and therefore in law belongs to the owner of the soil: . . . The terms of such agreement will regulate the contractual rights to sever the chattel from the land as between the parties to that contract and, where an equitable right is conferred by the contract, as against certain third parties. But such agreement cannot prevent the chattel, once fixed, becoming in law part of the land and as such owned by the owner of the land so long as it remains fixed.”

If an express agreement cannot prevent a chattel from becoming part of the land, so long as it is fixed to the land, it is obvious that a common assumption cannot have that effect. It is not surprising, therefore, that Mr. Thom abandoned his estoppel argument.

Thus the sole remaining issue for your Lordships is whether Mr. Morris’ bungalow did indeed become part of the land, or whether it has remained a chattel ever since it was first constructed before 1945.

It will be noticed that in framing the issue for decision I have avoided the use of the word “fixture.” There are two reasons for this. The first is that “fixture”, though a hallowed term in this branch of the law, does not always bear the same meaning in law as it does in everyday life. In ordinary language one thinks of a fixture as being something fixed to a building. One would not ordinarily think of the building itself as a fixture. Thus in Boswell v. Crucible Steel Co. [1925] 1 K.B. 119 the question was whether plate glass windows which formed part of the wall of a warehouse were landlord’s fixtures within the meaning of a repairing covenant. Atkin L.J. said, at p. 123:

“. . . I am quite satisfied that they are not landlord’s fixtures, and for the simple reason that they are not fixtures at all in the sense in which that term is generally understood. A fixture, as that term is used in connection with the house, means something which has been affixed to the freehold as accessory to the house. It does not include things which were made part of the house itself in the course of its construction.”

Yet in Billing v. Pill [1954] 1 Q.B. 70, 75 Lord Goddard C.J. said:

“What is a fixture? The commonest fixture is a house which is built into the land, so that in law it is regarded as part of the land. The house and the land are one thing.”

There is another reason. The term fixture is apt to be a source of misunderstanding owing to the existence of the category of so called “tenants’ fixtures”, (a term used to cover both trade fixtures and ornamental fixtures) which are fixtures in the full sense of the word (and therefore part of the realty) but which may nevertheless be removed by the tenant in the course of or at the end of his tenancy. Such fixtures are sometimes confused with chattels which have never become fixtures at all. Indeed the confusion arose in this very case. In the course of his judgment Aldous L.J. quoted at length from the judgment of Scott L.J. in Webb v. Frank Bevis Ltd. [1940] 1 A.E.R. 247. The case concerned a shed which was 135 feet long and 50 feet wide. The shed was built on a concrete floor to which it was attached by iron straps. Having referred to Webb v. Frank Bevis Ltd. and a decision of Hirst J. in Deen v. Andrews [1986] 1 E.G.L.R. 262 Aldous L.J. continued:

“In the present case we are concerned with a chalet which rests on concrete pillars and I believe falls to be considered as a unit which is not annexed to the land. It was no more annexed to the land than the greenhouse in Deen v. Andrews or the large shed in Webb v. Frank Bevis Ltd. Prima facie, the chalet is a chattel and not a fixture.”

A little later he said: “Unit 6 was just as much a chattel as the very large shed was in the Webb case and the greenhouse in Deen v. Andrews.”

But when one looks at Scott L.J’s. judgment in Webb v. Frank Bevis Ltd. it is clear that the shed in question was not a chattel. It was annexed to the land, and was held to form part of the realty. But it could be severed from the land and removed by the tenant at the end of his tenancy because it was in the nature of a tenant’s fixture, having been erected by the tenant for use in his trade. It follows that Webb v. Frank Bevis Ltd. affords no parallel to the present case, as indeed Mr. Thom conceded.

For my part I find it better in the present case to avoid the traditional two-fold distinction between chattels and fixtures, and to adopt the three-fold classification set out in Woodfall, Landlord and Tenants, Release 36 (1994), vol. 1, pp. 13/83, para. 13.131:

“An object which is brought onto land may be classified under one of three broad heads. It may be (a) a chattel; (b) a fixture; or (c) part and parcel of the land itself. Objects in categories (b) and (c) are treated as being part of the land.”

So the question in the present appeal is whether, when the bungalow was built, it became part and parcel of the land itself. The materials out of which the bungalow was constructed, that is to say, the timber frame walls, the feather boarding, the suspended timber floors, the chip-board ceilings, and so on, were all, of course, chattels when they were brought onto the site. Did they cease to be chattels when they were built into the composite structure? The answer to the question, as Blackburn J. pointed out in Holland v. Hodgson (1872) L.R. 7 C.P. 328, depends on the circumstances of each case, but mainly on two factors, the degree of annexation to the land, and the object of the annexation.

Degree of annexation

The importance of the degree of annexation will vary from object to object. In the case of a large object, such as a house, the question does not often arise. Annexation goes without saying. So there is little recent authority on the point, and I do not get much help from the early cases in which wooden structures have been held not to form part of the realty, such as the wooden mill in Rex v. Otley (1830) 1 B. & Ad. 161, the wooden barn in Wansborough v. Maton (1836) 4 Ad. & El. 884 and the granary in Wiltshear v. Cottrell (1853) 1 E. & B. 674. But there is a more recent decision of the High Court of Australia which is of greater assistance. In Reid v. Smith [1905] 3 C.L.R. 656, 659 Griffiths C.J. stated the question as follows:

“The short point raised in this case is whether an ordinary dwelling-house, erected upon an ordinary town allotment in a large town, but not fastened to the soil, remains a chattel or becomes part of the freehold.”

The Supreme Court of Queensland had held that the house remained a chattel. But the High Court reversed this decision, treating the answer as being almost a matter of common sense. The house in that case was made of wood, and rested by its own weight on brick piers. The house was not attached to the brick piers in any way. It was separated by iron plates placed on top of the piers, in order to prevent an invasion of white ants. There was an extensive citation of English and American authorities. It was held that the absence of any attachment did not prevent the house forming part of the realty. Two quotations, at p. 667, from the American authorities may suffice. In Snedeker v. Warring, 2 Kernan 178 Parker J. said:

“A thing may be as firmly fixed to the land by gravitation as by clamps or cement. Its character may depend upon the object of its erection.”

In Goff v. O’Conner, 16 Ill. 422, the court said:

“Houses in common intendment of the law are not fixtures, but part of the land. . . . This does not depend, in the case of houses, so much upon the particular mode of attaching, or fixing and connecting them with the land, upon which they stand or rest, as upon the uses and purposes for which they are erected and designed.”

Purpose of annexation

Many different tests have been suggested, such as whether the object which has been fixed to the property has been so fixed for the better enjoyment of the object as a chattel, or whether it has been fixed with a view to effecting a permanent improvement of the freehold. This and similar tests are useful when one is considering an object such as a tapestry, which may or may not be fixed to a house so as to become part of the freehold: see Leigh v. Taylor [1902] AC 157. These tests are less useful when one is considering the house itself. In the case of the house the answer is as much a matter of common sense as precise analysis. A house which is constructed in such a way so as to be removable, whether as a unit, or in sections, may well remain a chattel, even though it is connected temporarily to mains services such as water and electricity. But a house which is constructed in such a way that it cannot be removed at all, save by destruction, cannot have been intended to remain as a chattel. It must have been intended to form part of the realty. I know of no better analogy than the example given by Blackburn J. in Holland v. Hodgson, L.R.7 C.P.P. 328, 335:

Applying that analogy to the present case, I do not doubt that when Mr. Morris’ bungalow was built, and as each of the timber frame walls were placed in position, they all became part of the structure, which was itself part and parcel of the land. The object of bringing the individual bits of wood onto the site seems to be so clear that the absence of any attachment to the soil (save by gravity) becomes an irrelevance.

Finally I return to the judgment of the Court of Appeal. I need say no more about the absence of attachment, which was the first of the reasons given by the Court of Appeal for reversing the assistant recorder. The second reason was the intention which the court inferred from the previous course of dealing between the parties, and in particular the uncertainty of Mr. Morris’ tenure. The third reason was the analogy with the shed in Webb v. Frank Bevis Ltd. [1940] 1 All E.R. 247, and the greenhouse in Deen v. Andrews [1986] 1 E.G.L.R. 262.

As to the second reason the Court of Appeal may have been misled by Blackburn J.’s. use of the word “intention” in Holland v. Hodgson, L.R.7 C.P. 328. But as the subsequent decision of the Court of Appeal in Hobson v. Gorringe [1897] 1 Ch. 182 made clear, and as the decision of the House in Melluish v. B.M.I. (No. 3) Ltd. [1996] A.C. 454 put beyond question, the intention of the parties is only relevant to the extent that it can be derived from the degree and object of the annexation. The subjective intention of the parties cannot affect the question whether the chattel has, in law, become part of the freehold, any more than the subjective intention of the parties can prevent what they have called a licence from taking effect as a tenancy, if that is what in law it is: see Street v. Mountford [1985] AC 809.

As for the third of the reasons, I have already pointed out that Webb v. Frank Bevis Ltd. does not support the Court of Appeal’s conclusion, because the shed in that case was held to be a fixture, albeit a fixture which the tenant was entitled to remove.

In Deen v. Andrews the question was whether a greenhouse was a building so as to pass to the purchaser under a contract for the sale of land “together with the farmhouses and other buildings.” Hirst J. held that it was not. He followed an earlier decision in H.E. Dibble Ltd. v. Moore [1970] 2 Q.B. 181 in which the Court of Appeal, reversing the trial judge, held that a greenhouse was not an “erection” within section 62(1) of the Law of Property Act 1925. I note that in the latter case Megaw L.J., at p. 187G, drew attention to some evidence “that it was customary to move such greenhouses every few years to a fresh site.” It is obvious that a greenhouse which can be moved from site to site is a long way removed from a two bedroom bungalow which cannot be moved at all without being demolished.

For the above reasons I would allow this appeal and restore the order of the assistant recorder.

LORD CLYDE

My Lords,

It is not now disputed that Mr. Morris, the first appellant, is the tenant of Lot No. 6 in the area of land known as Holt’s Field, which is owned by the plaintiffs. He and the second appellant have been living in the bungalow on that site which was erected more than half a century ago. The problem then arises whether the bungalow is part of the land so as to be included in his tenancy. An issue arose whether an estoppel by convention had arisen preventing the contention that the bungalow was part of the realty. It has been held that no such estoppel has arisen and that issue is not now argued. The only question left in the case is whether the bungalow is or is not a chattel. The assistant recorder held that it had become annexed to and part of the realty. The Court of Appeal held that it was a chattel and so was not included in the tenancy of Lot No. 6.

It is necessary at the outset to define what the bungalow comprises. It seems from the facts in the present case as if some form of actual attachment of the bungalow to realty might exist, in the connection with the main electric supply cable and certain drain pipes. But these matters have not been explored in the facts and we are required to proceed on the basis that the bungalow is not physically attached to the land. The next consideration is whether the foundations form part of the bungalow. These are sunk into the ground and if they were to be treated as part of the bungalow would clearly be an element of physical connection with the ground. But it does not appear that there is any particular adaptation of the foundations to the structure above nor any adaptation of the structure to suit the foundations. The main structural elements of the bungalow simply rest on the concrete blocks. The bungalow and the foundations are severable from each other and it is not appropriate to treat the whole as a unum quid so as to conclude that the bungalow is built into the ground. It is with the wooden structure alone that the case is concerned. That was the view on which the Court of Appeal proceeded and on the facts available in this case I consider it correct to proceed on that basis.

The question posed by the parties in their agreed statement of facts and issues is: “Whether the bungalow erected at Unit 6, Holt’s Field was a chattel or a fixture.” I entirely share the unease which has been expressed by my noble and learned friend, Lord Lloyd of Berwick on the use of the word fixture. The ambiguity is illustrated by a passage in the judgment of Rigby L.J. in In re De Falbe [1901] 1 Ch. 523, 530 where having referred to an originally unbending rule that everything affixed to the freehold was held to go with the freehold his Lordship stated:

“But in modern times there have come to be important exceptions to this rule, one being in favour of trade fixtures and entitling a person who has put up what are now called ‘fixtures’ (which means removable fixed things) for the purposes of trade to remove them.”

Later in his judgment he stated, at p. 533:

“But the question is, whether they were not made ‘fixtures,’ meaning thereby objects fixed to the wall which might be removed at the will of the person who had fixed them.”

In Boyd v. Shorrock (1867) L.R. 5 Eq. 72 Sir W. Page Wood V.-C. regarded as conclusive of the case before him a definition given in Ex parte Barclay (1855) 5 De G. M. & G. 403, 410:

“By ‘fixtures’ we understand such things as are ordinarily affixed to the freehold for the convenience of the occupier, and which may be removed without material injury to the freehold, such will be machinery, using a generic term; and in houses, grates, cupboards, and other like things.”

As the law has developed it has become easy to neglect the original principle from which the consequences of attachment of a chattel to realty derive. That is the principle of accession, from which the more particular example has been formulated, inaedificatum solo solo cedit. A clear distinction has to be draw between the principle of accession and the rules of removability.

My Lords, the distinction between these two matters was pointed out long ago by Lord Cairns L.C. in Bain v. Brand (1876) 1 App.Cas. 762. In that case it was declared that the law as to fixtures is the same in Scotland as in England. His Lordship stated, at p. 767, that there were two general rules under the comprehensive term of fixtures:

“One of these rules is the general well-known rule that whatever is fixed to the freehold of land becomes part of the freehold or inheritance. The other is quite a different and separate rule;–whatever once becomes part of the inheritance cannot be severed by a limited owner, whether he be owner for life or for years, without the commission of that which, in the law of England, is called waste, and which, according to the law of both England and Scotland, is undoubtedly an offence which can be restrained. Those, my Lords, are two rules, not one by way of exception to the other, but two rules standing consistently together. My Lords, an exception indeed, and a very important exception, has been made, not to the first of these rules, but to the second. To the first rule which I have stated to your Lordships there is, so far as I am aware, no exception whatever. That which is fixed to the inheritance becomes a part of the inheritance at the present day as much as it did in the earliest times. But to the second rule, namely, the irremovability of things fixed to the inheritance, there is undoubtedly ground for a very important exception. That exception has been established in favour of fixtures which have been attached to the inheritance for the purposes of trade, and perhaps in a minor degree for the purpose of agriculture. Under that exception a tenant who has fixed to the inheritance things for the purpose of trade has a certain power of severance and removal during the tenancy. . . “

It would be right to add that the exception has been developed so as to extend beyond the purposes of trade. By the end of the 19th century it was clearly established that the exception included objects which had been affixed to the freehold by way of ornament: In re De Falbe [1901] 1 Ch. 523, 539. This reflected not a change in the law but, as Lord Macnaghten put it in Leigh v. Taylor [1902] AC 157, 162, a change “in our habits and mode of life.” No doubt the category of exceptions may continue to change.

The present case, however, is concerned with the first of the two rules and not the second. But it is not altogether clear that the distinction between the two rules was clearly put before the Court of Appeal in the present case. If the distinction is not noticed there is a danger that the true issue may become confused by questions truly relating to removability. The Court of Appeal found assistance in the decision in Webb v. Frank Bevis Ltd. [1940] 1 All E.R. 247, regarding the bungalow as no more annexed to the land and just as much a chattel as the large shed in that case. But the court in the Webb case held that the large shed was a fixture but was removable by the tenant. I should add that the second rule may involve particular consideration of the various relationships between the interested parties which may play a part in the matter of removability, such as landlord and tenant, or mortgagor and mortgagee. But those differences play only a subordinate role in relation to the first rule.

The answer to that question is to be found by a consideration of the particular facts and circumstances. In the generality there are a number of considerations to which resort may be had to solve the problem. But each case in this matter has to turn on its own facts. Comparable cases are useful for guidance in respect of the considerations employed but can only rarely provide conclusive answers. It has not been suggested that if the bungalow is real property it can be regarded as distinct from the site so as to be excluded from the property let to Mr. Morris. The question then can be simply asked whether the bungalow is a chattel or realty. On that wider approach a useful starting point can be found in the words of the old commentator Heineccius (Elementa Iuris Civilis secundum ordinem Pandectarum, Lib.I. Tit VIII. Sec.199) where, in classifying things as moveable or immoveable he describes the latter as being things “quae vel salvae moveri nequeunt, ut fundus, aedes, ager . . . vel usus perpetui causa iunguntur immobilibus, aut horum usui destinantur.”

The first of these factors may serve both to identify an item as being real property in its own right and to indicate a case of accession. But account has also to be taken of the degree of physical attachment and the possibility or impossibility of restoring the article from its constituent parts after dissolution. In one early Scottish case large leaden vessels which were not fastened to the building in any way but simply rested by their own weight were held to be heritable since they had had to be taken to pieces in order to be removed and had then been sold as old lead: Niven v. Pitcairn (1823) 2 S. 270. In Hellawell v. Eastwood (1851) 6 Exch. 295, 312, Parke B., in considering the mode and extent of annexation of the articles in that case, referred to the consideration whether the object in question “can easily be removed, integré, salvé, et commodé, or not, without injury to itself or the fabric of the building.” It is agreed in the present case that as matter of fact that “the bungalow is not removable in one piece; nor is it demountable for re-erection elsewhere”. That agreed finding is in my view one powerful indication that it is not of the nature of a chattel.

In many cases the problem of accession arises in relation to some article or articles which have been placed in or affixed to a building. An unusual, although by no means unique, feature of the present case is that the alleged chattel is the building itself. This invites the approach of simply asking whether it is real property in its own right. Apart from the considerations which I already mentioned it seems to me that it is proper to have regard to the genus of the alleged chattel. That approach was adopted in the Australian case, Reid v.Smith (1905) 3 C.L.R. 656. At p. 668 Griffith C.J. said under reference to the decision in the lower court:

“I differ from the learned judge in thinking that it is not sufficient to show that the thing in question is a dwelling-house — an ordinary dwelling-house, on a town allotment, in an inhabited town. In the case of a similar building in another part of the country, erected under entirely different circumstances, a different conclusion might be drawn.”

O’Connor J. put the point more strongly, at p. 679:

“It would I think be stretching the rules of the common law to a point at which they cease to be rules of common sense, if it were to be laid down as a general rule that, except in very exceptional cases, wooden houses, resting by their own weight on land, could ever be regarded as mere chattels, removable at the will of the owner of the timber of which they are built.”

In several cases before the Lands Valuation Appeal Court in Scotland where the issue has arisen whether particular subjects are heritable or moveable for the purposes of valuation for local taxation the test has been applied by asking the question whether the particular subjects belong to a genus which is prima facie of a heritable character and, if they are, whether there are any special facts to deprive them of that character. This approach was recognised in Assessor for the City of Glasgow v. Gilmartin, 1920 S.C. 488 and in John Menzies & Co. Ltd. v. Assessor for Edinburgh, 1937 S.C. 784. It was later applied to such subjects as residential chalets: Assessor for Renfrewshire v. Mitchell 1966 S.L.T. 53, contractors’ huts: Assessor for Dunbarton v. L.K. McKenzie and Partners 1968 S.L.T. 82 and static caravans: Redgate Caravan Parks Ltd. v. Assessor for Ayrshire 1973 S.L.T. 52. Beyond question Mr. Morris’ bungalow is of the genus “dwelling-house” and dwelling houses are generally of the nature of real property. While it is situated in a rural setting it evidently forms part of a development of a number of other houses whose positions are even noted on the ordnance survey map. I find no factors which would justify taking it out of the category of dwelling-houses. On the contrary there are powerful indications that it and its constituent parts do not possess the character of a chattel. It seems to me to be real property.

If the problem is approached as one of accession it has to be noted that in the present case the bungalow is not attached or secured to any realty. It is not joined by any physical link which would require to be severed for it to be detached. But accession can operate even where there is only a juxtaposition without any physical bond between the article and the freehold. Thus the sculptures in D’Eyncourt v. Gregory (1866) L.R. 3 Eq. 382 which simply rested by their own weight were held to form part of the architectural design for the hall in which they were placed and so fell to be treated as part of the freehold. The reasoning in such a case where there is no physical attachment was identified by Blackburn J. in Holland v. Hodgson (1872) L.R. 7 C.P. 328, 335: “But even in such a case, if the intention is apparent to make the articles part of the land, they do become part of the land.” He continued with the following instructive observations:

“Thus blocks of stone placed one on the top of another without any mortar or cement for the purpose of forming a dry stone wall would become part of the land, though the same stones, if deposited in a builder’s yard and for convenience sake stacked on the top of each other in the form of a wall, would remain chattels. On the other hand, an article may be very firmly fixed to the land, and yet the circumstances may be such as to show that it was never intended to be part of the land, and then it does not become part of the land. The anchor of a large ship must be very firmly fixed in the ground in order to bear the strain of the cable, yet no one could suppose that it became part of the land, even though it should chance that shipowner was also the owner of the fee of the spot where the anchor was dropped. An anchor similarly fixed in the soil for the purpose of bearing the strain of the chain of a suspension bridge would be part of the land. Perhaps the true rule is, that articles not otherwise attached to the land than by their own weight are not to be considered as part of the land, unless the circumstances are such as to shew that they were intended to be part of the land, the onus of shewing that they were so intended lying on those who assert that they have ceased to be chattels, and that, on the contrary, an article which is affixed to the land even slightly is to be considered as part of the land, unless the circumstances are such as to shew that it was intended all along to continue a chattel, the onus lying on those who contend that it is a chattel.”

It is important to observe that intention in this context is to be assessed objectively and not subjectively. Indeed it may be that the use of the word intention is misleading. It is the purpose which the object is serving which has to be regarded, not the purpose of the person who put it there. The question is whether the object is designed for the use or enjoyment of the land or for the more complete or convenient use or enjoyment of the thing itself. As the foregoing passage from the judgment of Blackburn J. makes clear, the intention has to be shown from the circumstances. That point was taken up by A.L. Smith L.J. in Hobson v. Goringe [1897] 1 Ch. 182, 193, a decision approved by this House in Reynolds v. Ashby & Son [1904] A.C. 466, where he observes that Blackburn J.,

“was contemplating and referring to circumstances which shewed the degree of annexation and the object of such annexation which were patent for all to see, and not to the circumstances of a chance agreement that might or might not exist between the owner of a chattel and a hirer thereof.”

Regard may not be paid to the actual intention of the person who has caused the annexation to be made. In In re De Falbe [1901] 1 Ch. 523, 535, Vaughan Williams L.J. said that there was not to be an inquiry into the motive of the person who annexed the articles, “but a consideration of the object and purpose of the annexation as it is to be inferred from the circumstances of the case.” As Lord Cockburn put it in Dixon v. Fisher (1843) 5 D. 775, 793 “no man can make his property real or personal by merely thinking it so.” The matter has to be viewed objectively.

If one considers the object or purpose which the structure serves by being placed where it is, it was clearly placed there to enable the amenity of Holt’s Field to be enjoyed through the establishment of a residence. The bungalow was built there in order that people could live in what is represented as being an idyllic rural environment. The Court of Appeal, however, had regard to the belief of Mr. Morris that he owned the bungalow as evidence of his intention. But his belief cannot control the operation of the law in relation to accession and the matter of intention has to be judged objectively. Indeed the fact that the freeholders may have believed and reminded the occupants that their rights to remain could be terminated, which was also a factor on which the Court of Appeal relied, cannot affect the operation of the law.

Accession also involves a degree of permanence, as opposed to some merely temporary provision. This is not simply a matter of counting the years for which the structure has stood where it is, but again of appraising the whole circumstances. The bungalow has been standing on its site for about half a century and has been used for many years as the residence of Mr. Morris and his family. That the bungalow was constructed where it is for the purpose of a residence and that it cannot be removed and re-erected elsewhere point in my viewto the conclusion that it is intended to serve a permanent purpose. If it was designed and constructed in a way that would enable it to be taken down and rebuilt elsewhere, that might well point to the possibility that it still retained its character of a chattel. That the integrity of this chalet depends upon it remaining where it is provides that element of permanence which points to its having acceded to the ground. The Court of Appeal took the view that the bungalow was no more annexed to the land and just as much a chattel as the greenhouse in Deen v. Andrews [1986] 1 E.G.L.R. 262 (or, as I have already mentioned, the large shed in Webb v. Frank Bevis Ltd.). But there is a critical distinction between Deen v.Andrews and the present case in the fact that the greenhouse was demountable while the bungalow is not. I prefer the conclusion reached by the learned assistant recorder after hearing the evidence and visiting the site to form his own impression of the situation. As he observed towards the end of his judgment, a judgment which deserves commendation for the detail and care which has gone into it:

“. . . it seems to me clear that at least by 1985 and probably before, it would have been clear to anybody that this was a structure which was not meant to be enjoyed as a chattel to be picked up and moved in due course but that it should be a long-term feature of the realty albeit that, because of its construction, it would plainly need more regular maintenance.”

In my view the conclusion reached on this matter by the assistant recorder was correct. The appeal should be allowed and the order made by him relating to Unit 6 should be restored.

Chelsea Yacht & Boat Company Ltd. v Pope

[2000] EWCA Civ 425 Tuckey LJ

Various passages in the speeches in this case are relied on by both sides. However, the broad questions which the Court has to consider are accurately summarised in the head note.

In considering the degree of annexation, it is obviously of importance that the chattel can be removed without injury to itself or to the land. There must also be a degree of permanence. Purpose is also important as the illustration given by Blackburn J in Holland v Hodgson [1872] LR 7 CP 328 at 335 cited with approval in Elitestone shows. He said:

“Blocks of stone placed one on top of another without any mortar or cement for the purpose of forming a dry stone wall would become part of the land, though the same stones, if deposited in a builder’s yard and for convenience sake stacked on the top of each other in the form of a wall, would remain chattels. On the other hand, an article may be very firmly fixed to the land, and yet the circumstances may be such as to show that it was never intended to be part of the land, and then it does not become part of the land. The anchor of a large ship must be very firmly fixed in the ground in order to bear the strain of the cable, yet no one could suppose that it became part of the land, even though it should chance that the shipowner was also the owner of the fee at the spot where the anchor was dropped. An anchor similarly fixed in the soil for the purpose of bearing the strain of the chain of a suspension bridge would be part of the land.”

Miss Easty in her clear and spirited submissions to us on behalf of Mr Pope referred to a number of other cases under different legislation. First, she referred to rating cases where the Court had to consider whether the occupiers of a hulk Cory v Bristow [1877] 2 AC 262; a landing stage, Forrest v Overseers of Greenwich [1858] XXI Victoria 890; and the Hispaniola Westminister City Council v Woodbury [1991] EGLR 173, all in the Thames were in rateable occupation of land. But these cases only illustrate the circumstances in which under the intricacies of rating law a chattel becomes rateable if it occupies land or is enjoyed with land. They shed no light on the circumstances in which a chattel becomes part of the land and therefore I do not find them of assistance in this case. The same applies to the poll tax case of Stubbs v Hartnell [1997] 74 P&CR D36 which concerned a houseboat in the Thames.

Miss Easty also referred us to Makins v Elson (Inspector of Taxes) [1977] 1 WLR where the Court had to consider whether the tax-payer was liable to capital gains tax upon the disposal of his mobile caravan under the terms of section 29 of the Finance Act 1965. That Act distinguished between a dwelling house and land. The question whether the caravan became part of the land did not therefore arise and again I do not think that this decision helps to resolve the instant case.

Finally, Miss Easty relied on the decision of Farquharson J in R v Rent Officer of Nottinghamshire Registration Area ex parte Allen [1985] 2 EGLR 153 who quashed the decision of a rent officer who had registered a fair rent for a caravan on the basis that its letting fell within the Rent Act. In the course of his judgment Farquharson J said that it was not possible to say that just because the subject matter of the letting was a caravan it would not fall within the Rent Act. However, it is clear from the judgment that the only point the judge considered was whether the caravan was a house. That is the second point in this case upon which we have not heard argument. I do not think the decision casts any real light on the first point which we have to decide.

Elitestone is binding upon us and we have to apply the principles laid down in that case. How should they be applied to the facts of this case?

Miss Easty firstly argued that both the district judge and the judge had found the facts against the appellants in a way which did not enable this Court to interfere.

I do not accept this submission. The district judge decided the case on the basis that Elitestone was of no assistance. He does not appear to have addressed the question of whether the houseboat became part of the land at all. As I have already said, it is not clear whether the judge really did so either. If he did, he appears to have based his decision on the fact that the houseboat was: “Permanently immobile and let as such.” But it was not permanently immobile and it is common ground that the terms of the agreement could not of themselves have created the necessary annexure. For these reasons I do not think we are in any way bound by the findings below.

Turning firstly to the degree of annexure it is important to bear in mind that what is required is sufficient attachment to the land so that the chattel becomes part of the land itself. Here the houseboat rested periodically on the river bed below it and was secured by ropes and perhaps to an extent the services to other structures. It is difficult to see how attachments in this way to the pontoons, the anchor in the riverbed and the rings in the embankment wall could possibly make the houseboat part of the land. One is bound to ask “which land?” There is in my judgment no satisfactory answer to this question. More importantly, however, all these attachments could simply be undone. The houseboat could be moved quite easily without injury to itself or the land. The Agreement contemplates that it will be moved, and, in practical terms, required Mr Pope to dry dock it if he was to fulfil his obligation to paint the hull. The fact that it cannot move under its own power is not the point. Whilst the houseboat was obviously intended to be moored where it was for the term of the Agreement at least, the fact that it could and would have to be moved greatly undermines the argument based on permanence.

Turning then to the object or purpose of annexure, Miss Easty strongly submits that the attachment of the houseboat was to provide a permanent home for its occupant. I do not agree. It is not necessary to annex the houseboat to the land to enable it to be used as a home. The attachments were, like the ship’s anchor referred to by Blackburn J, to prevent the houseboat from being carried by the tide or the weather up or down stream and to provide the services to it.

For these reasons I conclude that the houseboat has not become part of the land. I support this conclusion on the grounds of common sense. It is common sense that a house built on land is part of the land. (See Lord Lloyd in Elitestone at page 692 H). So too it is common sense that a boat on a river is not part of the land. A boat, albeit one used as a home, is not of the same genus as real property.

For these reasons I would allow this appeal and answer no to the question, “Was the agreement governed by the Housing Act 1988.”

LORD JUSTICE WALLER: I agree that, for the reasons given by my Lord and those about to be given by my Lord, Morritt LJ, which I have had the advantage of reading in draft, this appeal should be allowed.

LORD JUSTICE MORRITT: The circumstances in which this appeal arises have been fully described by Tuckey LJ. I gratefully adopt his account of them. It is common ground that the Housing Act 1988 applies to lease or tenancies of land but not of equivalent agreements in relation to chattels. It is equally plain that originally both the landing craft and the barge in which it now rests were chattels. It seems to me, therefore that there are two questions only (1) Has the combined barge/landing-craft become part of the land? (2) If it has is it a dwelling-house?

We heard argument on the first point only. Accordingly the views I express are directed to that point alone even if some of them might be capable of being addressed to both of them.

We are, of course, bound by the decision of the House of Lords in Elitestone v Morris [1997] 1 WLR 687. In that case the House of Lords pointed out that the question was whether the chattel had become part and parcel of the land, not whether it was a fixture. (See page 691G- H). The House of Lords also approved the test formulated by Blackburn J in Holland v Hodgson [1872] LR 7 CP 328 that the answer to the question depends on two factors, the degree and object of annexation. Lord Lloyd of Berwick pointed out that the intention of the parties was only relevant to the extent to which it could be derived from the degree and object of annexation. Illustrative of those principles in relation to a tapestry is the decision in Leigh v Taylor [1902] AC 157 to which we were referred.

In addition to these three cases we were referred to a number of other cases by way of illustration. I commend Miss Easty for her diligence, but I find them of no assistance.

The three rating cases, Cory v Bristow [1877] 2 AC 262, Forrest v Overseers of Greenwich [1858] XXI Victoria 890 and Westminister City Council v Woodbury (VO)And Another [1991] EGLR 173 CA were all concerned with whether there was rateable occupation of the river bed by means of a derrick hulk, a vessel permanently moored and the landing stage. In none of them was the Court concerned with the question whether the chattel in question had itself become a part of the land.

In Makins & Elson [1977] 1 WLR 21 the Court was concerned with the exemption from Capital Gains Tax afforded to the tax payer’s residence by section 29 of the relevant Finance Act. The definition of residence for present purposes was:

“(a) a dwelling house or part of a dwelling house which is, or has at any time in his period of ownership been, his only or main residence, or (b) land which he has for his own occupation and enjoyment with that residence as its garden or grounds…”

Foster J held that the tax payer’s caravan was within paragraph (a) of that definition. It formed no part of his conclusion that in the circumstances of the case the caravan which he had described had become a part of the land itself. In Stubbs v Hartnell [1997] 74 P&CR 36 the Court was concerned with liability to council tax in relation to a houseboat. But liability did not depend on whether the houseboat was part of the land or not. Accordingly, it is of no direct relevance to the question before us. In R v the Rent Officer of Nottinghamshire ex party Allen [1985] 2 EGLR 153 the question was whether a fully mobile caravan was a house for the purposes of the Rent Act 1977. The question whether it was part of the land was not argued. To the like effect, there is a decision in respect of a houseboat called the “Lady Betty” noted in [1949] 118 JPR 376. The question was whether it was a house within the meaning of the Furnished Houses Rent Control Act 1946, not whether it was part of the land.

In agreeing with the district judge, Judge Cotran said:

“The factors necessary to decide the preliminary issue were (a) the terms of tenancy – use and removability; (b) the degree of permanence and movability/immovability; and (c) the nature of the structure and its use. He…” – that is the district judge,

“… said that on the facts as he found them, and on the three factors of importance, the “Dinty Moore”, nothing else was an ensured tenancy within the meaning of the Housing Act 1988. It seems to me that to argue that no houseboat can ever be protected is wrong. Certainly it is wrong if one considers the criteria that the case law has put forward. There has been no decision on a houseboat as such but there has been, in relation to a caravan and its mobility/immobility, and it makes not the slightest difference, as far as I am concerned, whether a houseboat lies on the land after removal from water or is attached to the river bed and/or float for part of the day, so long as it is permanently immobile and let as such.”

In my view there are a number of criticisms which may be made of that passage. First the terms of the tenancy do not appear to me to have any relevance to whether there has been the requisite degree or purpose of annexation. They show the intention of the parties in regard to the contract, but, as Lord Lloyd of Berwick pointed out in Elitestone v Morris (page 693 F) the intention of the parties is irrelevant save in so far as it is derived from the degree and object of the annexation. Second, the judge considered that the only points of importance were whether the object was permanently immobile and let as such. On the first point he was wrong as a matter of fact that the Dinty Moore could be easily detached from its moorings and service connections and towed away by a barge. The second point was only relevant if the Housing Act applied, and that depended on whether the Dinty Moore was part of the land; thus reliance on the second point begged the question to be determined. Third, the judge did not seek to apply Elitestone v Morris, or, as was required by that decision, the twin factors of degree and object of annexation. Indeed at page 15B of the transcript of his judgment he said that that case did not assist the argument.

In the light of these criticisms I reject the submission by counsel for Mr Pope that the issue was one of fact on which both judges below had reached clear conclusions with which this Court should not interfere.

The proper test is that laid down in Holland v Hodgson as approved in Elitestone & Morris. The Court has to consider both the degree and object of annexation. The Dinty Moore is attached to the river wall and the river in the manner described by Tuckey LJ ultimately by ropes and service connections. Those ropes and services may be untied and disconnected without any undue effort to enable the Dinty Moor to be towed away by a barge. Thus the degree of annexation does not require recognition of the Dinty Moore a part of the land.

Counsel for Mr Pope emphasise that the purpose of the annexation was to provide a home. Certainly the object of the conversion of the landing craft and its attachment to the services was to provide a home. But there is nothing to prevent the removal of the Dinty Moore from this mooring to another. The provision of a home does not necessitate annexing the structure (be it a caravan or a boat) to the land so as to become a part of it; it is sufficient that it is fitted out for living in.

I agree with Tuckey LJ that the Dinty Moore cannot, in these and the other circumstances to which he refers, be regarded as a part of the land. In those circumstances the second question, whether the Dinty Moore is a dwelling house within the Housing Act 1988, does not arise.

I too would allow this appeal.

(Short adjournment)

JUDGMENT ON ORDER FOR POSSESSION

LORD JUSTICE MORRITT: The question arises on the form of the order as to whether we should make an order for possession in 28 days or whether we should remit the matter to the county court for the determination of the further issues alleged by counsel for Mr Pope still to be in play.

The position is that following our judgment Mr Pope has no security of tenure. The licence under which he formerly occupied was last extended to 31st August 1997. Accordingly the term under which he last occupied expired at that date. The notice to quit, which on our findings was not strictly required, was served on 18th November 1997 and required Mr Pope to give up possession on 1st January 1998.

The proceedings were commenced on 20th March 1998 and the notice of appeal was served on 26th April 1999. It seems to me that both the notice, the service of the proceedings and the service of the notice of appeal seeking an order for possession were more than sufficient to terminate any residual right of occupation which Mr Pope might have had. Even if it be assumed that he held over on terms requiring reasonable notice to be given, for my part I am satisfied that one, other or all three of those gave the requisite notice. Accordingly for my part I would make the order for possession within 28 days as sought.

LORD JUSTICE TUCKEY: I agree.

LORD JUSTICE WALLER: I also agree.

JUDGMENT ON STAY

LORD JUSTICE MORRITT: We refuse a stay of execution of our order on the undertaking of the claimants that they will forthwith on receiving vacant possession of the boat remit it for the necessary repairs, and, if they consider that the boat is beyond economic repair then we give liberty to both parties to apply to the county court to determine what if any further relief would be sought. It is also on the undertaking that if the boat is capable of economic repair, is repaired, and if the House of Lords determine we were wrong, that the claimants will let Mr Pope back into occupation of it.

Cardigan v Moore & Anor

[2012] EWHC 1024 (Ch)

Newey J

Issue 2: Does the Lease extend to such of the Paintings as are in Savernake Lodge?

It is the Earl’s case that many of the Paintings are included in the Lease. The Paintings in question were taken to Savernake Lodge from elsewhere on the Estate when the Earl moved into the property in the early 1980s. The 8th Marquess explained in a witness statement:

“I was aware that my son felt in the same way about the family heirlooms – especially the collection of family paintings – as my father did, and so we agreed that my son should permanently take the bulk of the family collection to Savernake Lodge with him, excepting the very largest canvasses that had been particularly painted for the halls in the enormous Tottenham House, which were therefore too large to get in the front door of Savernake Lodge”.

Once at Savernake Lodge, larger Paintings were secured by means of large heavy-duty hooks drilled into the walls. Smaller Paintings were hung from steel hooks hammered into the walls. An extensive burglar alarm system was installed to protect the collection. The main room was upholstered in such a way as to match the “Unnamed Landscape”. The Earl’s mother recalled in her witness statement that “[t]he fabric selection for the curtains and sofas were all designed to echo the soft orange and light green colours of the Unnamed Landscape”.

Under clause 1 of the Lease, Savernake Lodge is demised to the Earl together with, among other things, “the use of all the Landlords’ furniture fixtures and fittings in or on the premises”. Mr Bishop relied on each of the words: “furniture”, “fixtures” and “fittings”.

With regard to the first of the words, the Concise Oxford Dictionary defines “furniture” as “the movable articles that are used to make a room or building suitable for living or working in, such as tables, chairs or desks”. As this definition indicates, the word “furniture” nowadays connotes items such as tables, chairs and desks which have a function other than decoration. To my mind, artwork displayed on a room’s walls, which is essentially decorative, would not normally be regarded as furniture. Paintings might perhaps be said to help to furnish a room. I do not think, however, that they would naturally be considered furniture.

Turning to “fixtures”, there was little or no disagreement between the parties as to the relevant legal principles. It was common ground that, when considering whether a chattel has become a fixture, regard is to be had to (a) the degree to which the chattel has become annexed to the land and (b) the purpose of such annexation. The law was explained by Blackburn J in these terms in Holland v Hodgson (1872) LR 7 CP 328 (at 334-335):

“There is no doubt that the general maxim of the law is, that what is annexed to the land becomes part of the land; but it is very difficult, if not impossible, to say with precision what constitutes an annexation sufficient for this purpose. It is a question which must depend on the circumstances of each case, and mainly on two circumstances, as indicating the intention, viz., the degree of annexation and the object of the annexation. When the article in question is no further attached to the land, then by its own weight it is generally to be considered a mere chattel; see Wiltshear v. Cottrell, and the cases there cited. But even in such a case, if the intention is apparent to make the articles part of the land, they do become part of the land: see D’Eyncourt v. Gregory. Thus blocks of stone placed one on the top of another without any mortar or cement for the purpose of forming a dry stone wall would become part of the land, though the same stones, if deposited in a builder’s yard and for convenience sake stacked on the top of each other in the form of a wall, would remain chattels. On the other hand, an article may be very firmly fixed to the land, and yet the circumstances may be such as to shew that it was never intended to be part of the land, and then it does not become part of the land. The anchor of a large ship must be very firmly fixed in the ground in order to bear the strain of the cable, yet no one could suppose that it became part of the land, even though it should chance that the shipowner was also the owner of the fee of the spot where the anchor was dropped. An anchor similarly fixed in the soil for the purpose of bearing the strain of the chain of a suspension bridge would be part of the land. Perhaps the true rule is, that articles not otherwise attached to the land than by their own weight are not to be considered as part of the land, unless the circumstances are such as to shew that they were intended to be part of the land, the onus of shewing that they were so intended lying on those who assert that they have ceased to be chattels, and that, on the contrary, an article which is affixed to the land even slightly is to be considered as part of the land, unless the circumstances are such as to shew that it was intended all along to continue a chattel, the onus lying on those who contend that it is a chattel.”

Rather more recently, Scarman LJ said this about the law in Berkley v Poulett [1977] 1 EGLR 86 (at 88-89):

“If the purpose of the annexation be for the better enjoyment of the object itself, it may remain a chattel, notwithstanding a high degree of physical annexation. Clearly, however, it remains significant to discover the extent of physical disturbance of the building or the land involved in the removal of the object. If an object cannot be removed without serious damage to, or destruction of, some part of the realty, the case for its having become a fixture is a strong one. The relationship of the two tests to each other requires consideration. If there is no physical annexation there is no fixture. Quicquid plantatur solo solo cedit. Nevertheless an object, resting on the ground by its own weight alone, can be a fixture, if it be so heavy that there is no need to tie it into a foundation, and if it were put in place to improve the realty. Prima facie, however, an object resting on the ground by its own weight alone is not a fixture: see Megarry and Wade, p 716. Conversely, an object affixed to realty but capable of being removed without much difficulty may yet be a fixture, if, for example, the purpose of its affixing be that “of creating a beautiful room as a whole” (Neville J in In Re Whaley [1908] 1 Ch 615 at p 619). And in the famous instance of Lord Chesterfield’s Settled Estates [1911] 1 Ch 237 Grinling Gibbons carvings, which had been affixed to a suite of rooms 200 years earlier, were held to be fixtures. Today so great are the technical skills of affixing and removing objects to land or buildings that the second test is more likely than the first to be decisive. Perhaps the enduring significance of the first test is a reminder that there must be some degree of physical annexation before a chattel can be treated as part of the realty”.

As Miss Reed pointed out, the present case has similarities to Berkley v Poulett. That case concerned, among other things, whether some pictures in an ancestral home were fixtures and so had been sold with the house. Each of the pictures in question had been “fixed into the recesses of a panelled wall” (see 87). The Court of Appeal held, by a majority, that the pictures were not fixtures. Scarman LJ explained his thinking in these terms (at 89):

“It is enough to say that the pictures were firmly fixed and that their removal needed skill and experience if it were to be done without damage to the wall and panelling. Certainly they were firmly enough fixed to become fixtures if that was the object and purpose of their affixing. But, if ordinary skill was used, as it was, in their removal, they could be taken down, and in the event were taken down, without much trouble and without damage to the structure of the rooms. The decisive question is therefore as to the object and purpose of their affixing. Pictures had hung in the two rooms for centuries. ‘The Return’ had been in the anteroom for a very long time—perhaps ever since it was painted. The 7th Earl decided in the early part of the 20th century to install in the two rooms the panelling and so designed it that there were recesses for pictures. It is this feature which lends plausibility to the suggestion that the pictures, fitted into the recesses left for them, were not to be enjoyed as objects in themselves but as part of the grand architectural design of the two rooms. The Vice-Chancellor rejected this view. So do I. When the panelling was installed in the two rooms the design was either panelled walls with recesses for pictures to be enjoyed as pictures, or rooms having walls which were a composite of panelling and pictures: in other words, the pictures were to be part of a composite mural. I think the former was the truth. The panelling was Victorian, the pictures a heterogeneous collection”.

In the course of his judgment, Stamp LJ, the other member of the majority, remarked (at 95):

“Framed pictures are hung on or fixed to the walls for their better enjoyment as pictures, however much they may beautify the rooms in which they are found”.

He also said (again at 95):

“Framed oil paintings in my judgment are, and remain, chattels whether they be hung upon, or over, or screwed by mirror plates to, the panelling of a room, or hung from, over, or screwed by mirror plates to, the walls of an unpanelled room”.

Mr Bishop stressed that, whereas the pictures at issue in Berkley v Poulett were a “heterogeneous collection” (in Scarman LJ’s words), the Paintings are all associated with the Earl’s family. On the other hand, the Paintings do not seem to have been as firmly fixed to the walls as those with which the Court of Appeal was concerned in Berkley v Poulett. Moreover, the Paintings have not been in Savernake Lodge as long as the pictures in dispute in Berkley v Poulett had been in place. While the Paintings have a strong association with the Earl’s family, the link with Savernake Lodge is far weaker.

In all the circumstances, it appears to me that the Paintings are not fixtures. As is apparent from Stamp LJ’s comments in Berkley v Poulett, framed paintings do not usually constitute fixtures, and there is no good reason for the position to be different with the Paintings. They were housed in Savernake Lodge. They never became part of the building. That, in the case of the “Unnamed Landscape”, the colour scheme of a room was based on a painting does not, in my view, alter the position.

Moving on to the word “fittings”, it was suggested that clause 2.26 casts light on what the Lease was intended to comprise. By that clause, the Earl covenanted:

“At the expiration or sooner determination of the said term quietly to yield up the demised premises together with all furniture fixtures and fastenings that now are or which during the said term shall be affixed or fastened thereto (except tenant’s fixtures) in such condition as shall be in accordance with the covenants on the part of the Tenant herein contained and in case any of the said fixtures and fittings shall be missing broken damaged or destroyed forthwith to replace them with others of a similar kind and of equal value and to make good any damage caused to the demised premises by the removal of the Tenant’s fixtures fittings furniture and effects”.

Mr Bishop argued that clause 2.26 uses “fastenings” and “fittings” interchangeably (speaking of “furniture fixtures and fastenings” and “the said fixtures and fittings”) and that the reference in clause 1 to “fixtures and fittings” should therefore be read so as to include chattels which were “fastenings” or “fastened” to Savernake Lodge. The Paintings (it was submitted) fall comfortably within “fastenings” and so are also “fittings”.

On balance, however, the preferable view is, I think, that the Paintings do not represent “fittings”. The word “fittings” is not a legal term of art (see Woodfall, “Landlord and Tenant”, at paragraph 13.131). It is often used in combination with “fixtures” (as in “fixtures and fittings”). That was the case in Berkley v Poulett (see [1977] 1 EGLR 86 at 88), but no one appears to have considered the addition of “fittings” important. Nor does reference to the Oxford English Dictionary suggest that the word “fittings” extends the scope of clause 1 in a relevant way. The Dictionary defines “fittings” as “Fixtures, apparatus, furniture”. Clause 1 makes separate reference to “fixtures” and “furniture”, and the Paintings would not normally be regarded as “apparatus”. Further, the word “fitted” would not naturally apply to the Paintings. A carpet or cupboard might be “fitted”. The Paintings were surely hung rather than “fitted”. The value of the Paintings is also, to my mind, of significance. Had the parties intended the Lease to extend to such valuable items, they might have been expected to refer to them specifically, not to rely on the somewhat vague word “fittings”.

With regard to clause 2.26, the word “fastenings” is not obviously apt to refer to the Paintings. The word would, I should have thought, refer more naturally to an attachment than to the thing attached. On that basis, the chains used to secure Paintings might be “fastenings” but the Paintings themselves would not be. Alternatively, it might be said that the meaning of “fastenings” should be determined by reference to “fittings” rather than the other way around. In any case, the “furniture fixtures and fastenings” which are to be yielded up need not correspond precisely with the “furniture fixtures and fittings” demised. It makes sense that the Earl should be obliged to yield up chattels in Savernake Lodge belonging to the landlords regardless of whether they were encompassed by clause 1.

Accordingly, the Lease does not, in my judgment, extend to any of the Paintings. They do not, as it seems to me, fall within the words “furniture fixtures and fittings”, as those words are used in clause 1 of the Lease.

Roche Ireland Ltd -v- O’Mahoney & Anor

2010] IEHC 491

4. The issues

4.1 The primary issues, in my view, which arise on the pleadings and on the facts are the following:

(a) whether the plaintiff is in lawful possession of the material which emanated from the O’Mahony lands and which was incorporated into the Roche premises in the course of the landfill remediation works and landscaping or, alternatively, whether Mr. O’Mahony as the owner of the O’Mahony lands has a claim against the plaintiff for return to him of the said material or to be compensated to its value; and

(b) whether, in making and repeating the communications that the plaintiff acted wrongfully in acquiring, using and retaining that material, the defendants have been, or if they continue to make or repeat such communications will be, liable under any of the torts invoked in the statement of claim, thus entitling the plaintiff to the ancillary injunctive relief it seeks.

4.2 There is a myriad of peripheral issues arising from other allegations made by Mr. O’Mahony in relation to the plaintiff’s conduct. I propose focusing on what I have identified as the primary issues but, as regards the peripheral issues, I think it is appropriate to record the following findings from the evidence.

5. Findings on peripheral issues

5.1 On the basis of the evidence of Mr. Pat O’Shea, the current Operations Director of the plaintiff, I am satisfied that the plaintiff did not commit any breaches of the Waste Management Acts 1996 to 2008 arising out of the removal of the material from the O’Mahony lands to the plaintiff’s premises. It was confirmed by letter dated 11th March, 2009 from Clare County Council to Mr. O’Shea that that was the view of Clare County Council and that no further action was deemed necessary.

5.2 On the basis of the evidence of Mr. Caoimhín Nolan, Inspector of Environmental Enforcement with the EPA, I am satisfied that the EPA has no issue as to the manner in which the capping of the landfill on the Roche premises was implemented by the plaintiff. It is clear on the evidence that Mr. O’Mahony has been repeatedly informed by the EPA that the issue of the removal of the material from the O’Mahony lands is not a matter for the EPA or the enforcement of the IPPC licence held by the plaintiff and, therefore, the EPA has no intention of launching an investigation as he requested. That position was reiterated in a letter of 1st July, 2010 from the EPA to Mr. O’Mahony.

5.3 As a result of a written complaint to An Garda Siochána made by Mr. O’Mahony on 4th September, 2008 a criminal investigation was carried out and a file was sent to the Director of Public Prosecutions on 2nd February, 2009. However, there is no evidence that the investigation related to alleged criminal activity on the part of the plaintiff and there is no evidence that a criminal prosecution has been initiated against any party.

6. Ownership/lawful possession of the material

6.1 As regards the legal principles which govern the issue of entitlement to possession and ownership of the disputed material, that is to say, the subsoil and topsoil from the O’Mahony lands, unfortunately, the relevant principles are identified to a limited extent only in the pleadings and in the submissions made at the hearing, which is understandable because Mr. O’Mahony was not legally represented. While to the lay person the principles may be difficult to understand, having regard to the history of this matter, and, in particular, the conduct of Mr. O’Mahony, which has clearly arisen from a grievance he harbours against the plaintiff, I will endeavour to summarise them in terms from which he will appreciate their implications.

6.2 To recapitulate, the plaintiff’s case is that as a result of the plaintiff having paid TAL and Martins for the works they carried out on the Roche premises and TAL and Martins, in turn, having purchased the material from Milltown, and either having paid for it or accepted liability for payment, the plaintiff, having no knowledge of the provenance of the material or any dispute in relation to it, was a bona fide purchaser for value of the material, lawfully took possession of it and is lawfully in possession of it. As I have recorded, what the plaintiff seeks is a declaration that it is in lawful possession of the material and that it has no liability to Mr. O’Mahony arising from its acquisition. Mr. O’Mahony has pleaded that the defendants are the owner of the O’Mahony lands, that the material was removed from the O’Mahony lands without the defendants’ knowledge or consent, that the plaintiff was at all times aware of the ownership and source of the material, that the defendants are the true and lawful owners of the material and are entitled to its return or to be compensated for its true value. So, the plaintiff is claiming to be in lawful possession of the material and Mr. O’Mahony is claiming ownership and an entitlement to possession. Although the wrong which the defendants allege against the plaintiff is not spelt out in the pleadings, the defendants’ claim must be based in tort for detinue or conversion of the material by the plaintiff.

6.3 The authorities relied on by the plaintiff in its written submission in support of the proposition that the plaintiff was a bona fide purchaser for value without notice of the material and, therefore, was unaffected by the rights of Mr. O’Mahony as owner of the O’Mahony lands all relate to issues concerning land as such (AIB v. Finnegan [1996] 1 ILRM 401; Gannon v. Young [2009] IEHC 511 and Kingsnorth Finance Trust Co. Ltd. v. Tizard [1986] 1 WLR 783). However, as the reference to detinue and conversion in the preceding paragraph indicates, in my view, the legal principles which are applicable to the situation which has arisen here in relation to the material are the legal principles governing possession and ownership of goods. The crucial factor, in my view, is that the material, the topsoil and the subsoil, had been severed from the O’Mahony lands when the plaintiff’s contractors agreed to acquire it. It follows that the relevant legal principles mainly derive from the Sale of Goods Act 1893, as amended by the Sale of Goods and Supply of Services Act 1980 (the Act of 1893). It is with a considerable degree of diffidence that I propose outlining these principles, which were not explored at the hearing. However, the principles, which I will outline and apply, are well established. In circumstances in which the defendants are not legally represented and Mr. O’Mahony has no legal training, having considered the matter carefully, I have come to the conclusion that it is not in his interest to invite further legal argument in this matter, which would merely give rise to further legal costs in circumstances in which the legal position is quite clear.

6.4 Even at common law the material severed from the land would have been regarded as a chattel or goods rather than as land. In Sligo Corporation v. Gilbride [1929] I.R. 351, in which the plaintiff was seeking injunctions to restrain the defendant from removing a wall and to direct the plaintiff to restore it, in the Supreme Court, Kennedy C.J. stated (at p. 362):

“If the ownership of the wall is actually in the plaintiffs, the action is in substance one for damages for trespass and trover and conversion of the stones in the wall, and the injunction is sought as ancillary to that right of property.”

Fitzgibbon J. was of a similar view stating (at p. 366):

“The real cause of action is one of trespass to the plaintiffs’ wall – assuming it to be theirs – and trover and conversion of the materials with which the wall was built”

Moreover, consistent with the decision of Gavan Duffy P. in Scully v. Corboy [1950] I.R. 141, the material comes within the definition of “goods” in s. 62 of the Act of 1893, which defines that term as including “emblements, industrial growing crops and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale”.

6.5 Although as I have stated at the outset, it is not clear in whom the title to the O’Mahony lands is vested, it is not in dispute that Mr. O’Mahony is either alone or jointly with his wife, who was in Court throughout the hearing, or through the medium of the second defendant, the owner of the O’Mahony lands. During the hearing, Mr. O’Mahony indicated that he had evidence of his title in Court. However, he was not asked to produce it. For present purposes, I am assuming that he has good title to the O’Mahony lands either solely or as aforesaid. As such, before the material was severed from the land, he owned it. When the material was severed by Milltown he remained the owner of it, subject to the rights, if any, of Milltown. A fundamental principle of our law of property, whether land or goods, like so many other fundamental rules, is known by its Latin tag: the rule nemo dat quod non habet. What the rule means is that no one can give a better title to property than his own. However, at common law that rule is subject to exceptions. Moreover, while, in the case of goods as defined in the Act of 1893, the rule was repeated in s. 21 of that Act, it is subject to the exceptions set out in succeeding sections thereof, including s. 25(2). Section 25(2) provides:

“Where a person having bought or agreed to buy goods obtains, with the consent of the seller, possession of the goods or the documents of title to the goods, the delivery or transfer by that person, or by a mercantile agent acting for him, of the goods or documents of title, under any sale, pledge or other disposition thereof, to any person receiving the same in good faith and without notice of any lien or other right of the original seller in respect of the goods, shall have the same effect as if the person making the delivery or transfer were a mercantile agent in possession of the goods or documents of title with the consent of the owner.”

In s. 62(2) of the Act of 1893 it is provided:

“A thing is deemed to be done ‘in good faith’ within the meaning of this Act when it is in fact done honestly, whether it be done negligently or not.”

6.6 The facts relevant to the application of s. 25(2) to the plaintiff, in my view, are the following. Mr. O’Mahony agreed in principle to sell the lands to Milltown and he allowed Milltown into possession of the lands. Milltown severed the material from the lands while in possession and, accordingly, was in possession of the material, although it remained in the ownership of Mr. O’Mahony until the sale to Milltown would be completed. Milltown sold the material to TAL and Martins, who used it in the landfill capping and landscaping works on the Roche premises in fulfilment of their respective contractual obligations to the plaintiff. TAL paid, or acknowledged the obligation to pay, for the material Milltown sold to it. While it is not clear on the evidence what position Martins has adopted in relation to payment to Milltown, I am assuming it has adopted a position similar to that adopted by TAL. The plaintiff paid TAL and Martins for the works in which they used the material, thereby paying for the material. The plaintiff got actual possession of the material.

6.7 Having regard to those facts, two questions arise in the application of s. 25(2), namely:

(a) Did Milltown get possession of the material with the consent of the plaintiff?

(b) Did the plaintiff receive the material, which was incorporated into the Roche premises, in good faith and without notice of any lien or right of Mr. O’Mahony as the owner of the O’Mahony lands from which the material was severed?

6.8 In relation to the first question, I am satisfied on the evidence that Milltown got possession of the material with the consent of Mr. O’Mahony. It is stated in the letter of 27th November, 2007 from Mr. O’Mahony’s then solicitors and it is pleaded on behalf of Mr. O’Mahony in his counterclaim that Mr. Murphy/Milltown was given possession with a view to doing preliminary works in aid of the development of the O’Mahony lands. It was in the course of that work that the material was severed from the O’Mahony lands. Mr. Murphy’s evidence was that Mr. O’Mahony knew that the topsoil was going to the plaintiff and he was not challenged on that in cross-examination by Mr. O’Mahony, although the thrust of Mr. O’Mahony’s evidence was that he did not know that the material was going off the site. On the basis of the totality of the evidence, I think it is probable that Mr. O’Mahony did know that Milltown was disposing of the material. In any event, I am satisfied that Milltown severed and had possession of the material with the consent of Mr. O’Mahony before the sale to TAL and Martins.

6.9 In relation to the second question, in outlining the factual background earlier, I have referred to the contacts between Mr. O’Mahony and Mr. Liddy, the then managing director of the plaintiff in 2006 and 2007. In April 2007, Mr. O’Mahony notified Mr. Liddy on two separate occasions of his intention to sell the O’Mahony lands. Subsequently, a meeting was held on 4th July, 2007 between Mr. Liddy and Mr. O’Mahony and, on the basis of Mr. Liddy’s evidence, I am satisfied that he agreed to the meeting as a courtesy to a neighbour. At the time, while the proposed development on the O’Mahony lands was of some concern to the plaintiff, the concern was not enough to induce the plaintiff to get involved in the O’Mahony lands. Subsequent to that meeting there were two e-mails from Mr. O’Mahony to Mr. Liddy in July 2007, in the second of which, dated 29th July, 2007, Mr. O’Mahony advised Mr. Liddy that he had “three joint venture proposals for the development of the site and four bids for the outright sale of the site” and that, if he did not hear from Mr. Liddy, there would be little point in keeping him advised of further negotiations with third parties. That was the end of the contact between Mr. Liddy and Mr. O’Mahony until the end of November 2007.

6.10 A meeting arranged at short notice was held between Mr. Liddy and Mr. O’Mahony on 3rd December, 2007. At that stage, Mr. Liddy was not aware of the letter of 27th November, 2007 from Mr. O’Mahony’s solicitors, as the plaintiff’s company secretary was out of the office and it had not been brought to his attention. In any event, Mr. Liddy’s evidence was that Mr. O’Mahony told him that Milltown had been allowed on to the O’Mahony lands on condition that a contract would be signed within three weeks but that on 26th November, 2007 the contract had been returned unsigned. Mr. Liddy’s evidence was that he was completely surprised by Mr. O’Mahony’s statement that Milltown had taken the material illegally. Mr. Liddy’s evidence was that Mr. O’Mahony’s suggestion that the plaintiff return the material came as a real shock to him and was completely unexpected. He passed the problem on to the plaintiff’s legal advisers at that stage.

6.11 A director of TAL, Mr. Martin Hamill, also testified. His evidence was that he was aware that Milltown was doing preparatory work on the O’Mahony lands and was stripping the site. When TAL approached Milltown to purchase the material, he was not aware that Milltown was not the true owner of the soil. On the basis of the evidence of Mr. Hamill, I am satisfied that TAL agreed with Milltown in good faith to purchase the material and received it without any notice of any lien or other right of Mr. O’Mahony in respect thereof.

6.12 Similarly, on the basis of the evidence of Mr. Liddy, I am satisfied that the plaintiff dealt with TAL honestly and in good faith and from the perspective of the plaintiff the material was incorporated into the Roche premises without notice of any lien, right or equity of Mr. O’Mahony in respect thereof. Having regard to what had transpired between the plaintiff and Mr. O’Mahony before September 2007, and the circumstances which prevailed in September 2007, although honesty, as opposed to reasonableness, is the test of good faith under the Act of 1893, in my view, it was reasonable for the plaintiff, acting by Mr. Liddy and other employees of the plaintiff, and for TAL to assume that Milltown had authority to sell the material.

6.13 In summary, having found that Milltown got possession of the material with the consent of the plaintiff and that both TAL and the plaintiff received the material in good faith and without notice of lien or other right of Mr. O’Mahony, by operation of s. 25(2) of the Act of 1893 the plaintiff obtained good title to the material which was incorporated in its premises as against Mr. O’Mahony and is entitled to retain possession thereof. The plaintiff has no liability to the defendants in respect of the material.

6.14 While it is clear that Mr. O’Mahony feels aggrieved that the sale to Milltown fell through after Milltown had sold the material to TAL which was used in fulfilling TAL’s contractual commitments to the plaintiff, he must appreciate that, in the circumstances of the events of September 2007 which I have outlined, the law protects the plaintiff, which acted honestly in its dealings with TAL which, in turn, acted honestly in its dealings with Milltown. It was Mr. O’Mahony who allowed Milltown to go into possession of the O’Mahony lands and to do the pre-development works which created the material and thus facilitated the sale of the material by Milltown to TAL. Whatever, if any, redress Mr. O’Mahony has arising out of the failure of Milltown to complete the acquisition of the O’Mahony lands and from the sale by Milltown of the material can only be pursued against Milltown. It is not a matter for the Court in these proceedings.

7. Mr. O’Mahony’s communications alleging wrongdoing on the part of the plaintiff

7.1 The plaintiff has invoked a plethora of torts in alleging wrongdoing against the defendants and in seeking civil law remedies to redress such wrongdoing. As the plaintiff has decided to forgo its claim for damages, it is unnecessary to consider whether the plaintiff has established liability on the part of the defendants for all or any of the torts alleged. Further, in the light of the findings which have been made as to the ownership and entitlement to possession of the material which was severed from the O’Mahony lands and is now incorporated in the Roche premises, in my view, the only issue which requires to be determined is whether, if the defendants were to continue to make or repeat the type of communications complained of by the plaintiff which alleged that the plaintiff acted wrongfully in acquiring, using and retaining the material, they would be liable in tort to the plaintiff, so as to entitle the plaintiff to the ancillary injunctive relief it seeks. In this context, of the torts invoked by the plaintiff, that which would obviously come into play if the defendants were to continue making or repeating such communications is injurious falsehood encompassing slander of title and slander of goods.

7.2 If, notwithstanding the making of the declaration which I intend to make that the material is in the lawful possession of the plaintiff, Mr. O’Mahony or the other defendant were to communicate to third parties the assertion that, in receiving and retaining the material, the plaintiff received and retained stolen goods, in my view, the plaintiff would unquestionably be able to establish the ingredients of the tort of injurious falsehood as outlined in McMahon and Binchy on The Law of Torts, 3rd Ed., at paragraphs 35.26 to 35.30, for the following reasons:

(a) the statement alleging receipt and retention by the plaintiff of stolen goods would be untrue;

(b) such statement would be made maliciously, because there would be no basis on which Mr. O’Mahony or the other defendant could assert some just cause, excuse or proper motivation for making the statement; and

(c) such statement could only be viewed as calculated to cause pecuniary damage to the plaintiff and being published in permanent form in writing or electronically (as, on the basis of the evidence, it is probable would be the case) the plaintiff would, by virtue of s. 20(1) of the Defamation Act 1961, be relieved from the requirement to prove special damage.

7.3 I am satisfied that the defendants’ allegation that the plaintiff has not come to court with clean hands is utterly without foundation. On the other hand, it is a matter of concern that after September 2008, notwithstanding the existence of the order of the Court made with the consent of Mr. O’Mahony, Mr. O’Mahony persisted in communications alleging wrongdoing on the part of the plaintiff. Accordingly, I consider it appropriate to grant the plaintiff injunctive relief in the terms sought by the plaintiff and set out at (C) in paragraph 3.4 above framed to cover communications to the plaintiff and its associated companies, any officer or employee of the plaintiff and its associated companies, and any third party. An injunction in the terms set out at (D) would merely replicate the content of the injunction in the terms set out at (C) in a vague manner and, for that reason, I do not propose to grant it.

7.4 Even if, despite the information furnished to him from December 2007 onwards as to the circumstances in which the material was incorporated in the Roche premises and the steps taken by TAL to ensure that the defendants would not be prejudiced by the payment of the price of the material directly to Milltown after Mr. O’Mahony raised the issue of the ownership of the material with the plaintiff and after his solicitor’s letter of 27th November, 2007, Mr. O’Mahony honestly believed that he had a good claim against the plaintiff, once the Court has decided that he does not have a good claim against the plaintiff he must appreciate that he would be acting wrongly by asserting otherwise and that he must desist from doing so. In relation to what I have referred to as the peripheral issues, having regard to the findings which I have made in paragraphs 5.1 and 5.2 above, Mr. O’Mahony must also appreciate that he must desist from alleging breaches by the plaintiff and its agents of waste management and environmental enforcement legislation in connection with the removal of the material from the O’Mahony lands and its incorporation in the Roche premises.

8. Order

8.1 The Court will make the following orders on the plaintiff’s claim:

(1) declarations in the terms set out at (A) and (B) of paragraph 3.4 above; and

(2) an injunction in the terms set out at (C) in paragraph 3.4 restraining communications to the plaintiff and its associated companies and any officer or employee of the plaintiff and its associated companies and any third party.

8.2 There will also be an order dismissing the defendants’ counterclaim.

Webb v. Ireland

[1987] IESC 2; [1988] IR 353; [1988] ILRM 565

Finlay CJ

14. Having reached the conclusion as a matter of law that the State was estopped from challenging the title of the plaintiffs to the hoard because it was placed estopped with them and accepted on a bailment, the learned trial judge did not find it necessary to decide the question of the right or title of the landowners to the hoard. He expressed his opinion that the action was not an action concerned with the ownership of the hoard but was an action between a bailor and a bailee and the sole issue was whether the plaintiffs as bailors were entitled to the return of the hoard from the State. The action, he stated, is not concerned with the ownership of the hoard and will not determine its ownership.

15. The first issue which falls to be determined on this appeal, from a logical point of view, is the question as to whether, assuming that the hoard was received by the National Museum as agent for the State in the capacity of a bailee, there must be an implied term in that bailment that the plaintiffs as bailors had a good title to the goods. The decision of the High Court was based on the decision of the Court of Appeal in Rogers Sons & Co v. Lambert & Co [1891] 1 QB 318

16. I have considered that decision and I have come to the conclusion that on the facts of this case there can not be implied into the arrangements between the plaintiffs and the defendant, surrounding the deposit of the hoard with the Museum, any term establishing a title in the plaintiffs to the hoard. The terms under which the hoard was deposited are clearly set out in the letter written by the solicitors for the plaintiffs which was brought to the director of the Museum at the same time as the articles were. The reference in that letter, which I have already quoted in full, to deliver these articles to your care for the present and pending determination of the legal ownership (emphasis added) is, in my opinion, wholly inconsistent with implying into any bailment arising from that delivery an acknowledgment or admission of the plaintiffs’ title to the goods. Whilst, therefore, I would accept as a general proposition of law that bailment involves an implied term as to the title of the bailor of the goods, it can only do so to the extent and in the instances where such an implied term is not by the express terms of the bailment excluded. I am satisfied that this case is one in which such an implied term is by the express terms of the letter excluded from the bailment.

17. It is next necessary to consider the issue as to whether even assuming that the title of the plaintiffs to the goods is not an implied term in this bailment, the State is by reason of the bailment estopped from asserting its own title to the goods which it claims it derived from the landowners, O’Brien and O’Leary.

18. The decision of the learned trial judge in this context was again based largely on the decision in Rogers Sons & Co v. Lambert & Co and also in Biddle v. Bond (1865) 6 B & S 225 which is cited with approval in that case. There can be no doubt that Rogers Sons & Co v. Lambert & Co is a clear authority for the proposition that if a bailee seeks to refuse the return of goods, asserting the right of a third party to the possession and ownership of them, that he can only do so expressly on behalf of and with the authority of the third party, and that having asserted such a right he must prove it. The decision, however, does not appear to me to exclude or indeed to deal at all with the situation where a bailee asserts not the right of a third party to the goods but his own title to them, even if it has been acquired subsequent to the original bailment. The facts of Rogers Sons & Co v. Lambert & Co where the plaintiffs had purchased copper from the defendants and paid for it and whereby the defendants expressly undertook to warehouse the copper and upon payment of the proper warehousing charges to deliver it to the plaintiffs or their order, made it, of course, quite unnecessary to consider any assertion by the defendants of a title in themselves to the copper. In considering the nature of jus tertii which can be asserted by a bailee Lopes LJ at p. 328 of the report quotes with approval from the decision in Biddle v. Bond where Blackburn J delivering the judgment of the Court of the Queen’s Bench said:-

19. We think that the true ground on which a bailee may set up the jus tertii is that indicated in Shelbury v. Scotsford, viz., that the estoppel ceases when the bailment on which it is founded is determined by what is equivalent to an eviction by title paramount.

20. In my view, the true legal position which arises where a bailee asserts and establishes a title in himself to the goods is that he establishes the termination of the bailment and that by reason of that termination any estoppel which would otherwise arise between a bailee and a bailor ceases to operate. Such a view of the law appears to be logical and, in my view, appears also to yield a just result for there could be significant injustice if a bailee having lawfully and properly acquired a title to the goods which had been bailed with him were obliged to return them to the bailor by virtue of an estoppel and presumably left to the remedy of a subsequent second action for the delivery back of the goods to himself again. I, therefore, conclude that it is necessary in this appeal to determine the question as to whether by virtue of the contracts and conveyances made between the State acting through the Minister for Education and the owners of the land the State had, by the time of the institution of these proceedings acquired a title to these articles as against the plaintiffs.

21. The defendants assert a title to the goods derived through the landowners, Messrs. O’Brien and O’Leary, on two separate grounds. Firstly, they allege that the landowner had

Walsh J

Walsh J .

84. The facts of this case have been so fully set out in the judgment which has just been delivered by the Chief Justice that I do not find it necessary to repeat any of them.

85. The Chief Justice has set out in five paragraphs the conclusions of the learned High Court judge. The sequence is not exactly the same as that of the High Court judge in his own judgment but I propose to deal with the matters in the order which has been followed by the Chief Justice.

86. The defence raised in the High Court by the defendants was to rely upon the claim that the former royal prerogative in relation to treasure trove was still applicable in the sense that it was claimed that the State was the successor in title of such prerogative. The claim which the State made to the ownership of the chattels in question was founded on that assertion and was to the effect that it superseded any claim of right of the plaintiffs. For the reasons given by the Chief Justice in the course of his judgment I am of the opinion that this claim by the defendants based on succession to the royal prerogative was rightly rejected by the learned High Court judge and that it cannot be sustained in this or any court. If the State has a rightful claim then it must be found elsewhere. That is a matter to which I shall return later in this judgment. However, so far as the High Court is concerned once the learned High Court judge has reached his decision to reject the State’s claim to a royal prerogative the question of bailment became of great importance. The claim of the museum authorities, voiced through the State, to retain the articles in question notwithstanding that they were bailees of the objects had to be rejected as the claim was based, and apparently solely based, upon the title claimed through the royal prerogative. I agree with the view expressed by the learned High Court judge that all other things being equal, a bailee is not entitled to challenge the title of the bailor.

87. In this case the chattels were left with the museum authorities, as a State agency, and they were left with them for safe keeping pending the outcome of any determination of legal ownership. The bailment was a gratuitous bailment which conferred no rights upon the bailee as such even though it may have imposed certain liabilities. This case is not concerned with that latter aspect of bailment. A gratuitous bailee is precluded from using a chattel bailed in any manner whatever without the express and complete consent of the bailor, unless such use is needful for its preservation. The chattels were not bailed to the bailee for the purpose of being used for any certain time, or at all, but solely for safe keeping pending the outcome of the establishment of legal title. Being a gratuitous bailment it was open at any time to the bailor, in this case the respondents, to call for the return of the article. Other things being equal the bailee could not legally refuse to return them. The objects were bailed to the museum authorities as agents of the appellants and they were not received by the museum authorities as stakeholders or in any similar capacity.

88. In this case, the bailee’s principal, namely the State, asserted a title based on the alleged succession to the royal prerogative of treasure trove. That being the case, then the judge, in my view, was perfectly correct in holding that as the claim to title set up by the bailee in the defence to the claim for return of the goods could not be sustained he was obliged to order the return of the goods to the bailor without determining the title of the bailors. I am of opinion that the use of the words ‘pending determination of the legal ownership’ adds nothing to the matter once the bailees have failed, or their principles have failed, to establish the title which they asserted. It is also my opinion that if a claim for the return had been made before, and without waiting for the title to be established, the bailees would have no legal answer to the claim to return the goods on demand having regard the nature of the bailment unless they were able to establish a claim of title on behalf of themselves or their principals. This they failed to do. This aspect of the case does not concern any claim by a third party because the bailees were quite clearly acknowledged to be and were treated as agents of the appellants. At no time did the bailees, namely the National Museum authorities, assert a claim on behalf of any part other than the State. Obviously if the bailee can establish a title for himself or for his principals he has ousted the title of the bailor and the matter ceases to be one of bailment. However, that is not what happened in the present case.

89. But in so far as the learned High Court judge held that the bailees could not avail of a title to the goods acquired after the bailment, it appears to me that he was not correct.

90. The second ground of defence which was offered by the appellants in the High Court was that if they did not have a right to the title before the bailment, they did acquire the title by assignment from those who had it before it was sought to determine the bailment. This post bailment title, which is asserted, is claimed to be derived from the owners of the lands in which the chattels were found, namely Messrs O’Brien and O’Leary. The landowners had by an agreement, for consideration of £25,000 to each of them, assigned to the State all their title to the chattels found. Naturally, this was only effective to pass title if they had any title.

91. This claim is based on the argument that the owner of the fee simple of the land is entitled to any chattel which may be on the land against any finder of the chattel upon the land. There is legal authority for such proposition and, also, there is legal authority to distinguish between a claim which the owner of land may assert in respect of objects found upon this land as from those which are found in or under the land surface. The Chief Justice in his judgment has referred in some detail to the legal authorities in question and has analysed them.

92. These cases reflect that the importance which appears to have been attached to the ownership of lands was such as to denigrate, if not obliterate, the true title claimed in respect of the chattels themselves.

93. I think it is true to say that there is no such thing as a chattel which has never had an owner. In this particular case the judge found as a fact that the chattels had been placed in or on the land for safe keeping. I say in or on the land because I have regard to the number of centuries that has elapsed which makes it difficult to say whether the initial hiding place was beneath the surface of the soil or simply achieved that situation through the course of time. On the view I take of this case it is not necessary for me to decide whether some distinction should be drawn between the chattels found upon the land and those found in land or under land. Leaving aside any question which might arise under the Statute of Limitations, 1957, which was not relied upon in this case, it cannot be asserted that these articles were abandoned in the sense that ownership had been abandoned. If chattels are expressly or by implication abandoned in favour of a particular and ascertainable person or persons then the chattels become the property of that person or those persons if they accept them. If they do not accept them then the chattels have no particular owner. Articles cannot be regarded as lost if they are intentionally placed in a particular situation. In my opinion it would be a great injustice if the true owner of the chattels, having intentionally placed them in a particular place for safe keeping and then cannot recall where he placed them, or where he did not have an opportunity to come back to recover them, should be deemed to have lost his title in favour of the owner of the lands in which he placed them. Strictly speaking nothing can be said to be lost in the literal sense if it continues to exist even though its owner may be unknown or because it has been unknowingly misplaced. Notwithstanding the number and the weight of the authorities cited it is my opinion that the owner of the land upon which mislaid or unremembered chattels are intentionally placed for safe keeping, whether in or under the surface, cannot claim to be the owner of the chattels simply by reason of his being the owner of the land. To so hold would be fail to vindicate the rights of property of the true owners of the chattels so placed and would permit the type of injustice which Article 40.3 of the Constitution is designed to prevent. The owner of such land is to be deemed to be in bare possession of the chattels even if he does not know of their existence on his lands. He can assert a good claim to possession, as distinct from ownership, against any claimant whether it be trespasser, or otherwise, whose claim is based on simply unearthing and removing the chattels in question. Even the former royal prerogative of treasure trove acknowledged that in so far as treasure trove was concerned the true owner, or his successors in title, could always claim ownership and possession of the treasure if he could establish title.

Title & Possession

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Title & Possession

Cases

Armory v Delamirie

United States of Americal and Republic of France v Dollfus MIEG Et CIE and Bank of England

Elitestone Ltd v. Morris and Another

Chelsea Yacht & Boat Company Ltd. v Pope

Cardigan v Moore & Anor

Roche Ireland Ltd -v- O’Mahoney & Anor

Webb v. Ireland

Legal Guide has a Better Version of this Article

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