Marcq v Christie, Manson & Woods Ltd.

For conversion, an auctioneer’s good-faith receipt of goods from their apparent owner, followed by simple redelivery when the goods remain unsold, is ministerial handling and does not suffice. Intention to sell, prolonged possession, cataloguing, offering goods for sale, or contractual rights to retain or sell do not themselves alter that conclusion. Liability depends on a sufficiently extensive and deliberate encroachment on the true owner’s rights, normally shown by sale and delivery, or by a positive act withholding possession from the true owner. A lien and conditional power of sale do not make the receipt a pledge without an intention to take the goods as security. An unknown true owner is not thereby the auctioneer’s bailor, and no general duty to investigate title arises absent circumstances putting the auctioneer on enquiry.

The claimant alleged that an oil painting stolen from him had been consigned to Christie’s by a person who was not its owner. Christie’s catalogued and offered the painting at auction, but it remained unsold and was returned to the consignor. The claim alleged conversion, bailment and related duties.

The County Court struck out the claim. Jack J. upheld that decision and gave the claimant a final opportunity to plead bad faith or notice of the theft. No such application was made. The appeal concerned whether an auctioneer acting in good faith and without notice was liable when unsold goods were returned to the apparent owner, including whether the contractual lien and sale provisions created a pledge or bailment relationship with the true owner.

1. Disposition. The Court of Appeal unanimously dismissed the appeal. The pleaded facts established no reasonable grounds for a claim in conversion or bailment. The court proceeded on the basis that Christie’s acted in good faith and without notice of the claimant’s interest, since the claimant had not pleaded otherwise despite a final opportunity to do so.
2. Conversion. The court applied the three features identified in Kuwait Airways Corporation v Iraqi Airways Co. (2002) UKHL 9: conduct inconsistent with the owner’s rights, deliberate conduct, and an encroachment sufficiently extensive to exclude the owner from use and possession. The first two features alone were insufficient.
3. An auctioneer who receives goods from their apparent owner for auction and simply returns them to that person when they are unsold acts ministerially. The auctioneer changes the position of the goods, but not their property. The intention to sell and the mere receipt of the goods do not create liability. The authorities establish liability where the auctioneer sells and delivers the goods, but those cases do not govern an unsold return.
4. The contractual terms between Christie’s and the apparent seller could not affect the claimant’s legal position merely because they existed. Liability depended on the exercise of contractual rights in a manner that encroached on the claimant’s title. No lien, power of sale or other right had been exercised here. Mere duration of possession, cataloguing, offering the painting for sale and acting for reward were insufficient.
5. A lien and conditional power of sale did not make Christie’s receipt a pledge. Applying Torts (Interference with Goods) Act 1977, section 11(2), pledge required an intention that the goods be deposited as security. The contractual power of sale arose only after later conditions and could not retrospectively make the original receipt a receipt by way of pledge.
6. Bailment. Christie’s were bailees for reward of the apparent seller, not of the claimant, whose interest was wholly unknown. The court applied the reasoning in The Pioneer Container (1994) 2 AC 324 that notice of another person’s interest is relevant to assuming bailment duties towards that person. A conventional negligence claim might arise if circumstances put an agent on enquiry, but no such circumstances were pleaded. The claim was therefore properly struck out. Costs orders were made below and on appeal.

1. Court of Appeal (Civil Division): The appeal was dismissed. [2003] EWCA Civ 731.
2. High Court: Mr Justice Jack upheld the County Court’s decision and gave the claimant a final opportunity to plead want of good faith or notice.
3. Central London County Court: Judge Hallgarten QC struck out the claim on the basis that it disclosed no reasonable grounds for bringing a claim.