Conversion

Table of Contents

In Queensland, the tort of conversion is the act of dealing with a chattel (a good or an item of personal property) in a manner that  is repugnant to the immediate right of possession of the person who has the 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 considered conversion.

Relevantly, the ‘offender’ does not necessarily need to be aware that the goods belong to someone else or intend to challenge the owner’s right to possession to be held liable for conversion.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 main elements to the tort 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

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

3. Refusal to deliver them up

There must be a 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 be able to sue both the buyer and the seller.17

4. Consequential damage

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

Defences for Conversion

The following are examples of defences which may be raised in defence of a claim for conversion:

Necessity

There can be no conversion 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.

Consent

There can be no conversion if the conversion 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 will generally be compensatory damages (i.e. damages taht aim to put the plaintiff in the same position they would have been in, but for the conduct of the defendant). Remedies for conversion may 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.

Frequently Asked Questions

Many people confuse the tort of trespass to goods/chattels and the tort of conversion as both these torts involve an intentional interference with property rights. The main difference between trespass to goods and conversion is the degree of interference required to establish a cause of action for each tort.

Conversion occurs where a person uses or alters another’s personal property without consent. This interference must be so serious that the person wrongfully dealing with the property may be required to pay its full value.

Conversely, trespass to goods/chattels involves an interference with personal property that falls short of conversion. In cases of trespass, the person at fault may only be responsible to the extent of the damage caused.

Common examples of conversion involve situations where a person takes, sells or modifies property that belongs to another, consequently depriving them from their right to possess the property. For example, if you loaned a piece of your personal property to someone, and they proceed to give that property away to a third person without your consent, this could be considered an act of conversion.

For when you need Assistance

If you are in a position where you property rights are being interfered with by another person, you may be entitled to bring a claim for conversion or other related causes of action. Contact Gibbs Wright Litigation Lawyers today for a free and confidential consultation to discuss your legal rights and options.

[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.

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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.

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