The New Northumbria Hotel Ltd (Company No. 3699960) v Maymask (148) LLP

On an interim conversion claim, the claimant need not establish an absolute title good against all third parties. It is sufficient to show a better right to possession than the defendant. Where that issue is genuinely disputed, the court applies the American Cyanamid approach.

The court asks whether damages would adequately compensate the claimant and whether the defendant could meet any award. Injunctive relief may be granted for property that is clearly the claimant’s or uniquely valuable because of information stored in it. It should be refused where damages provide an adequate remedy and the balance of convenience does not justify interference with an ongoing business.

The claimant operated a hotel business from premises occupied by a tenant. The defendant acquired the freehold reversion and took possession after the tenant’s lease was forfeited. It also appropriated chattels used in the business, including furniture, furnishings, crockery, cutlery, equipment, stationery and consumables.

The claimant alleged conversion and sought interim injunctive relief, including delivery up. It claimed either to own the chattels or to have a contractual right to use them under a management and trading agreement. The defendant contended that the tenant owned them and that they had been sold to the defendant by the tenant’s administrators. The central issues were the claimant’s better right to possession and the appropriate interim relief.

1. The application was determined on an interim basis and on the balance of convenience. The court confined itself to the conversion claim concerning the chattels, rather than wider allegations of breach of contract, conspiracy or misconduct by the administrators.

2. The claimant’s primary case that it owned all the chattels was not established, but remained arguable. The evidence showed that some items, including stationery and consumables, clearly belonged to the claimant, while other items might have been hired from the tenant. The tenant’s accounts, the claimant’s accounts, invoices and the management agreement did not establish the defendant’s title or present right to possession of the remaining chattels.

3. A claimant in conversion need only show a better right to possession than the defendant. Absolute title good against third parties is unnecessary. A contractual bailment under a sale agreement containing a retention-of-title clause could suffice.

4. The court applied the American Cyanamid principles. Delivery up of the stationery was ordered because the claimant’s position was clear and the relief would enable it to conduct such business as remained. An inquiry was ordered into consumables belonging to the claimant that had been appropriated.

5. Damages were an adequate remedy for the balance of the chattels because they were not unique and could be replaced, or because restitutionary damages could be measured by the claimant’s payment for their use. The tills were exceptional because they contained the claimant’s historic trading data. They were to be delivered up unless the defendant provided reasonable access for extraction of that data.

6. The injunction was refused in relation to the remaining chattels. The court concluded that damages could be paid and noted that the claimant would also have faced difficulty satisfying any cross-undertaking in damages. Costs were reserved until trial.