Cartus Corporation v Atlantic Mobility Ltd

A claimant seeking delivery up of goods in another’s possession must show an immediate right to possession, a demand for return, and refusal after a reasonable time. A bailee or other person in possession must normally deliver goods forthwith on demand. A reasonable period may be allowed to investigate a genuine doubt about the claimant’s entitlement, but unexplained delay after that period can constitute wrongful detention and expose the defendant to liability and costs. Failure to provide reassurance in response to clear demands may justify proceedings for delivery up and associated costs, even where the defendant has not expressly refused.

The claimant sought delivery up of two containers containing household goods belonging to its clients. The goods had been placed with a company which entered liquidation and were later held at premises controlled by the defendant. The claimant made repeated demands for delivery, preservation and information about the goods’ whereabouts. The defendant did not provide timely assurances, and proceedings were issued under CPR Pt 8. The delivery-up application was later conceded and adjourned generally, with costs reserved. The central issues were whether the claimant had an immediate right to possession, whether the demands had been refused after a reasonable period, and whether the proceedings and resulting costs were justified.

1. Right to possession. The claimant had an immediate right to possession of both lots. Clause 27 of the service agreement provided for that right when the original bailee entered insolvency. Even if the agreement had been assigned and the defendant became a sub-bailee, the claimant’s right to possession remained superior, absent a contractual right or lien entitling the defendant to detain the goods.
2. Wrongful detention. A claimant in conversion by wrongful detention must establish: (i) an immediate right to possession when the conversion occurred; (ii) a demand for return; and (iii) refusal after a reasonable time to comply. A bailee or person in possession must normally deliver goods forthwith on demand. A reasonable period may be allowed where there is genuine doubt about the claimant’s entitlement, but no such doubt existed here.
3. Conduct justifying proceedings. The defendant failed, without good reason, to respond adequately to repeated demands concerning the Woolston lot. Its failure to provide reassurance created suspicion and uncertainty and justified the claimant in concluding that there was a refusal to comply. The claimant was therefore justified in issuing proceedings and preparing an interim preservation application. The later undertaking merely preserved the position pending the inter partes hearing.
4. Procedural points. The requirement in CPR r19.5A, giving effect to section 8 of the Torts (Interference with Goods) Act 1977, would not have defeated the application because the proceedings were issued under CPR Pt 8 and particulars of claim were not served. Any omission would, at most, have led to an order for further particulars. The claimant was the correct applicant notwithstanding the interests of the underlying owners.
5. Order. The claimant was awarded 90 per cent of its costs of the delivery-up application, including the costs of the costs application, subject to detailed assessment. Wayne Sidell was joined for the purpose of the claimant’s application for a non-party costs order, with written submissions invited on directions.