Costello v Chief Constable of Derbyshire Constabulary

Possession of a chattel creates a possessory title which is enforceable against everyone except a person claiming under a better title. The rule applies even where possession was obtained by theft or other unlawful means.

Lawful police seizure suspends that title only for the period authorised by statute. When the statutory purpose ends, the former possessor is entitled to the property's return unless an identified person proves a superior title, a statutory disposition has displaced the possessory title, or returning or possessing the property would itself be unlawful. Public policy does not confer an additional power of confiscation on the police.

The police seized a Ford Escort from the claimant under section 19 of the Police and Criminal Evidence Act 1984, believing it to be stolen. Their statutory purposes for retaining it under section 22 ended on 5 January 1997. The true owner could not be identified.

His Honour Judge Styler found that the car was stolen and that the claimant knew this. He consequently dismissed the claim for its return and later refused a rehearing based on Webb v Chief Constable of Merseyside Police [2000] 2 WLR 546.

The claimant appealed against the factual finding and the refusal to order delivery. The central legal issue was whether possession obtained through theft nevertheless gave the claimant a title enforceable against the police after their statutory right of retention expired.

1. Appeal allowed unanimously. Lightman J delivered the judgment, with which Robert Walker and Keene LJJ agreed. The claimant was entitled to delivery of the car and damages for wrongful detention from 5 January 1997.

2. The county court judge was entitled to find that the car was stolen and that the claimant knew it. The altered vehicle identification number, erased engine number, car-ringing equipment, expert evidence, circumstances of acquisition, claimant's expertise and conduct, and his unsatisfactory evidence supported that conclusion. The allegation that the judge had prejudged the case was unsupported. A judge who has read the papers may disclose a provisional view, provided that the judge does not appear to have a closed mind.

3. Possession itself gives a possessor a title enforceable against the world except a person claiming under a better title. Titles to personal property are relative. The rule applies whether possession was acquired lawfully, by theft or by another unlawful means. A thief's title is frail but remains legally protected against a person unable to establish a superior title.

4. Sections 19 and 22 of the Police and Criminal Evidence Act 1984 confer no title on the police. Lawful seizure suspends or temporarily divests existing possessory rights only while retention remains necessary for the statutory purposes. When that authority ends, the former possessor's title revives. Public policy cannot supply an unauthorised power to confiscate property believed to be the proceeds or product of crime.

5. A possessory title may be displaced where legislation authorises a transfer of possession to another person. The authorities concerning orders under police property legislation depended critically upon such an order. Section 8 of the Torts (Interference with Goods) Act 1977 did not assist because the police could not identify a third party with a better right.

6. The exceptions to enforcement are confined to cases where transfer by the police would be unlawful or the claimant's possession would itself be unlawful, as with unauthorised possession of controlled drugs or a firearm. Otherwise, law and equity protect the possessory title even where the claimant is a thief or receiver.

7. The car was ordered to be delivered to the claimant. Damages for its wrongful detention from 5 January 1997 were to be assessed by the district judge. Exemplary damages were excluded because the claim for them had no basis in law or fact.

1. Court of Appeal: The court allowed the appeal unanimously, ordered delivery of the car and directed assessment of compensatory damages for detention from 5 January 1997. Exemplary damages were excluded.

2. Derby County Court: His Honour Judge Styler held on 23 November 1999 that the claimant knowingly possessed a stolen car and could not recover it. On 14 December 1999 he refused a rehearing sought following Webb v Chief Constable of Merseyside Police [2000] 2 WLR 546. He refused permission to appeal, which the Court of Appeal later granted.