Thunder Air Ltd v Hilmarsson

Under the Torts (Interference with Goods) Act 1977, delivery-up relief is available only against a person in possession or control of the goods. A company director or beneficial owner does not thereby possess or control company property. Separate legal personality remains decisive unless the company is a nominee or its identity can properly be ignored. Directing company employees to deliver property acts as an agent of the company and does not establish personal control.

Electronic files are not goods for the purposes of the 1977 Act. A claimant seeking to found English jurisdiction on a tort exception must establish a good arguable case that the defendant committed the tort in England.

Thunder Air Limited sought interim delivery-up relief against Mr Hilmar Hilmarsson under section 4 of the Torts (Interference with Goods) Act 1977. The application followed the termination of an aircraft-management agreement with Avijet Establishment, of which Mr Hilmarsson was a beneficial owner.

An earlier order had required delivery of documents and other property within the jurisdiction. Much of the material was subsequently delivered. Mr Hilmarsson disputed personal liability for conversion and challenged the jurisdiction of the English court, relying on his Swiss domicile and the Lugano Convention. The issues were whether he personally possessed or controlled the material, whether the statutory tort was arguable, and whether England had jurisdiction.

1. Statutory scope. The 1977 Act permits delivery-up relief only against a person in possession or control of the goods. Electronic documents stored on computers are not goods within the Act. The earlier order was therefore wrong to include computer files. The claim could proceed, if at all, only in relation to hard-copy documents and other physical items (paras [23]–[31]).
2. Conversion. Conversion requires conduct inconsistent with the owner’s rights, deliberate conduct, and an encroachment sufficiently extensive to exclude the owner from use and possession. Mere unauthorised retention is insufficient unless detention is adverse and accompanied by an intention to keep the goods. The court did not need finally to decide whether the alleged failure to answer the demands amounted to conversion (para [30]–[31]).
3. Possession and control. Avijet had legal possession and control of the documents because it acquired them while performing its own contractual obligations. Mr Hilmarsson’s beneficial ownership, management of the business, and ability to direct Avijet’s staff did not give him personal control for the purposes of sections 3 and 4. A director does not acquire possession or control of company assets merely through control of the company’s operations. The case was indistinguishable from Joiner v George [2002] EWHC 90 (Ch) (paras [32]–[39]).
4. Interim relief and jurisdiction. The court accepted that section 24(1)(a) of the Civil Jurisdiction and Judgments Act 1982 permitted consideration of interim relief despite a threatened jurisdiction challenge. However, the claimant had not established a serious issue to be tried or a good arguable case that Mr Hilmarsson committed conversion. The injunction was discharged. Since the tort was not sufficiently arguable, the Article 5(3) tort jurisdiction under the Lugano Convention was unavailable. The substantive jurisdiction application succeeded and the further proceedings were stayed (paras [40]–[44]).

This was a first-instance decision on the effective return date of an interim application. An earlier order had been made by HHJ Behrens, sitting as a Deputy High Court Judge, on 12 November 2007. The present court discharged that order’s injunction and stayed further proceedings following the jurisdiction challenge.