Bear Necessities Daycare Ltd v Lancashire Fuels 4 U Ltd

Interim delivery-up relief for goods is discretionary and is granted only where compelling reasons justify disturbing the existing possession of the goods. A risk that the goods will be disposed of, destroyed or damaged will ordinarily be necessary, although its absence is not an absolute bar in exceptional circumstances. The court should not conduct a mini-trial of disputed contractual liability at the interim stage. It should assess whether the applicant’s loss can be compensated in damages and weigh the parties’ respective prejudice. Where the applicant’s own contractual breach created the relevant risk, and the respondent’s continued possession is not shown to threaten the goods, the balance of convenience may favour leaving them in the respondent’s possession.

The applicant sought interim delivery-up and preservation orders for two leased cars held by the first respondent. It alleged that the first respondent had failed to make contractual reimbursements and was therefore wrongfully interfering with the cars under the Torts (Interference with Goods) Act 1977. It also relied on the applicant’s possible breach of its own leasing arrangements, which required the cars to remain in its possession and control.

The application had initially been made before the claim for delivery up was pleaded. Permission to amend the Particulars of Claim was subsequently granted. The central issues were whether interim relief should be granted under CPR 25.1 and section 4 of the 1977 Act, and whether the disputed payment and contractual issues should be determined before trial.

1. Applications dismissed. The court dismissed the applications for interim delivery up and preservation of the two cars.
2. Interim relief was a matter of judicial discretion and would not be granted save where there were compelling reasons. The court distinguished the specific circumstances considered in Howard E. Perry & Co Ltd v British Railways Board [1980] 2 All E R 579. Although the absence of a risk that goods would be disposed of, lost or destroyed was not an absolute bar, the usual position was that a risk of disposal, destruction or damage would be necessary.
3. The court would not conduct a mini-trial on the disputed question whether the first respondent had failed to make the relevant payments. The evidence did not establish that the first respondent was likely to damage or improperly dispose of the cars.
4. The applicant’s possible breach of its leasing contract with VWFS did not make delivery up just or proportionate. Any loss caused by continued possession could be compensated in damages. By contrast, removing the cars would disadvantage the first respondent, which would need to obtain substitute vehicles and might lose the benefit of its contracts with the applicant before trial.
5. The balance of convenience clearly favoured leaving the cars with the first respondent. The applicant was ordered to pay the first respondent’s costs of both applications, summarily assessed at £4,332.