Zabihi v Janzemini & Ors

A claimant who proves conversion of goods may recover damages even where the precise identity and value of the goods cannot be established with precision. The court must do its best on the evidence available, while avoiding an award inconsistent with the parties’ understanding of the goods’ value. An alleged oral guarantee is unenforceable where it falls within section 4 of the Statute of Frauds Act 1677. A claim based on illegal importation will not fail where the illegality is irrelevant to establishing title and the claim to recover the goods or their value.

The claimant alleged that he entrusted four sets of valuable jewellery to the first defendant for sale, subject to obligations concerning safekeeping and accounting for the proceeds. He claimed conversion and related relief against the first defendant, and contractual liability against the second defendant, whom he said had agreed to share responsibility for safekeeping and sale. The defendants disputed the jewellery’s identity, value and the alleged arrangements. The claimant also pursued monetary claims, while the first and third defendants counterclaimed various sums. The central issues were what jewellery had been entrusted, its recoverable value, whether the second defendant had assumed contractual obligations, and whether the monetary claims were proved.

1. Jewellery claim against the first defendant. The court found that four sets of diamond and gold jewellery had been handed over and converted, but rejected both the claimant’s account of exceptionally valuable antique jewellery and the first defendant’s case that the jewellery produced in 2006 was the same jewellery. The claimant’s fabricated and backdated documents did not prevent recovery on the evidence that remained.
2. Where conversion is established but the precise identity and value of the converted goods cannot be proved, the court must do its best to assess damages from the available evidence. The principle in Armory v Delamirie (1721) 1 Strange 505 required qualification where the nature of the goods was itself uncertain. The jewellery’s open-market value was assessed at £125,000.
3. The first defendant’s claim for repayment of a £20,000 advance succeeded. The other monetary claims failed. The alleged oral guarantee supporting the £70,000 claim was unenforceable under section 4 of the Statute of Frauds Act 1677, and the other alleged representations and duty of care were not proved.
4. The claim against the second defendant failed. No sufficiently established oral agreement made him responsible for safekeeping, insurance or sale proceeds. Even if such an agreement had existed, the alleged breach was not established on the claimant’s case, which treated sale as the intended purpose of the arrangement. The claim against the second defendant was dismissed.
5. The illegality defence failed. Even assuming that the jewellery had been smuggled into the country, that fact was irrelevant to establishing the claimant’s title and claim for recovery or value. The reliance on Tinsley v Milligan [1994] 1 AC 340 was therefore not in point.

The claimant succeeded on the jewellery claim against the first defendant only, with loss assessed at £125,000. The first defendant succeeded on the £20,000 counterclaim.