Causes of Action - Conversion

Table of Contents

In Queensland, conversion is the act of dealing with a chattel (a good or an item of personal property) in a manner which is repugnant to the immediate right of possession of the person who has that right in the chattel.[1] Mere retention of goods that come into the possession of a person is insufficient to amount to conversion; conversion requires that the goods be detained (kept) after demand for their return,[2] and that there was an intent to deprive or impair the owner’s immediate right to possession.[3]

For example, a person taking, selling or modifying goods that belong to another (therefore depriving him or her from their right to possess the goods) is conversion. The defendant does not necessarily need to be aware that the goods belong to someone else or intend to challenge the owner’s right to possession.[4]

In many cases, conversion may overlap with Trespass to Goods or Detinue.

Who can sue?

A person who wants to sue for conversion must show that they had an immediate right to possession at the time of the act of conversion.[5] Additionally, they must prove that the right of possession derives from a proprietary or possessory interest in the goods.[6]

What does and does not amount to conversion?

The following acts will not generally constitute conversion:

  • Mere unauthorised possession of another person’s chattels;[7]
  • An assertion of ownership by a person out of possession;[8]
  • An unauthorised bargain and sale of the plaintiff’s goods with delivery;[9]
  • Taking goods into custody for temporary purposes;[10] and
  • The harmless use of goods without an assertion of dominion.[11]

The above list is not exhaustive. It is important to note that conversion can only be applied to chattels (goods), and not to land.

Elements of Conversion

There are four elements of conversion.

1. Title to Sue

There must be possession or right to possession of property at the time of the conversion.[12] An owner of goods who has not yet transferred their right to immediate possession could sue, as they would have an immediate right to possession at the time of the conversion happening.[13]

2. Proof of Demand by the Plaintiff

  1. There must be proof of demand by the plaintiff for the return of the chattel.[14]

3. Refusal to deliver them up

  1. Refusal by a defendant who has power to ‘deliver up’ ( i.e. return) the chattel, at the time of demand.[15] The unauthorised sale and delivery of goods or chattels belonging to another individual constitutes conversion,[16] in which case the plaintiff may sue both the buyer and the seller.[17]

4. Consequential damage

As a result of the defendant’s conduct, the plaintiff has suffered loss. This will usually be calculated as the value of the chattel.

Defences for Conversion

An action in conversion may be defended on any of the following basis:

Necessity

There can be no trespass if the inference occurs in circumstances where consent could not be obtained, but where the interference was necessary. This defence will require consideration of the relevant facts of the case to determine whether the interference was in fact necessary, and the difficulty or impossibility in obtaining consent.

Abatement (also known as Self-Help)

A person may be entitled to enter the land of another or take other self-help measures, upon giving of due notice, to abate a nuisance which substantially interferes with enjoyment of one’s land. A person may lawfully retake goods that have been wrongfully taken out of that person’s possession.

Consent

There can be no trespass if the interference occurs with the plaintiff’s consent. Consent can either be express or implied.[18]

The above list is not exhaustive.

Remedies for Conversion

Damages for tortious causes of action such as conversion are generally compensatory (i.e. they aim to put the plaintiff in the position which they would have been in, but for the conduct of the defendant). Remedies for conversion can include:

Damages

The primary remedy for conversion is damages. The Courts will usually measure the full value of the chattel with the consequential losses.

Abatement (also known as Self-Help)

A person may be entitled to enter the land of another or take other self-help measures, upon giving of due notice, to abate a nuisance which substantially interferes with enjoyment of one’s land. A person may lawfully retake goods which have been wrongfully taken out of the person’s possession if such an order is made.

Specific Restitution

The remedy of specific restitution may be awarded where damages are inadequate.

The above list is not exhaustive.

For when you need Assistance

If your property rights are being interfered with in any way, contact Gibbs Wright Litigation Lawyers today. We can discuss your conversion matter over a free and confidential consultation discussing your options and legal rights.

[1] Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204, 229.

[2] Pratten v Pratten [2005] QCA 213 [60].

[3] Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204 at 229; R v Hansford (1974) 8 SASR 164 at 169; Horsley v Phillips Fine Art Auctioneers Pty Ltd (1995) 7 BPR 14,360.

[4] Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204 at 229.

[5] Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204 at 229; Casey Interiors Pty Ltd (in liq) v Specialised Roofing Systems Pty Ltd (1993) 115 FLR 96.

[6] Jarvis v Williams [1955] 1 All ER 108 at 109; Maynegrain Pty Ltd v Compafina Bank [1984] 1 NSWLR 258.

[7] Bunnings Group Ltd v Chep Australia Ltd (2011) 82 NSWLR 420; [2011] NSWCA 342.

[8] Oakley v Lyster [1931] 1 KB 148.

[9] Lancashire Waggon Co v Fitzhugh (1861) 6 H & N 502; Perpetual Trustees & National Executors of Tasmania Ltd v Perkins (1989) Aust Torts Reports 80-295.

[10] Fouldes v Willoughby (1841) 8 M &W 540; Bunnings Group Ltd v CHEP Australia Ltd [2011] NSWCA 342.

[11] Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204; McKenna & Armistead Pty Ltd v Excavations Pty Ltd (1957) 57 SR (NSW) 515.

[12] Penfolds Wines Pty Ltd v Elliott (1946) 74 CLR 204.

[13] Wertheim v Cheel (1885) 11 VLR 107.

[14] Pratten v Pratten [2005] QCA 213 [61].

[15] Ibid.

[16] Claxton v Everingham (1884) 6 ALT 132; Glass v Hollander (1935) 35 SR (NSW) 304.

[17] Wilkinson v King (1809) 2 Camp 335; Metcalfe v Lumsden (1844) 1 Car & Kir 309.

[18] Pwllbach Colliery Co Ltd v Woodman [1915] AC 63; Lyttelton Times Co Ltd v Warners Ltd [1907] AC 476.

The content of this publication is intended as general commentary only and may not be suitable or applicable to your personal circumstances. It is not intended to replace independent legal advice. You can contact us at our Brisbane Office for a free consultation on a range of litigation matters on (07) 3088 6364.

Do you need a Litigation lawyer?

We offer an initial, no cost, obligation-free consultation to assess the strength of your case.