Ramsden v HM Revenue and Customs

A bailee’s failure to return goods after a demand may constitute conversion where the goods are lost, or where the failure to return them within a reasonable time amounts to refusal. The cause of action accrues when the loss or unequivocal refusal occurs; a continuing conversion does not arise where the goods are permanently lost and unrecoverable. The Data Protection Acts protect personal data, not documents as property, and do not impose a general duty to preserve or return documents. In a loss-of-chance claim, the claimant must prove on the balance of probabilities what he would have done, but need show only a real or substantial chance that a third party would have acted favourably. Historic loss of evidence does not relieve a claimant of proving causation. Deliberate concealment under section 32 of the Limitation Act 1980 requires proof of relevant concealment; mere loss or destruction is insufficient.

The claimant alleged that HMRC had wrongfully retained and lost documents taken into its possession in 1988. He claimed conversion, wrongful interference with goods, damage to a reversionary interest, breaches of the Data Protection Act 1984 and Data Protection Act 1998, and loss of chances to challenge tax assessments, bankruptcy and related consequences.

The action followed earlier interlocutory proceedings before Master Thornett, including limitation rulings and directions for a preliminary trial on liability in principle. The central questions were when any cause of action accrued, whether HMRC’s conduct caused an actionable loss, whether the Data Protection Acts applied, and whether limitation was postponed by deliberate concealment.

1. Conversion and refusal. The court found that HMRC had taken documents into its possession, but the claimant had not proved their precise nature or extent. The documents were probably destroyed by 1998 or, at the latest, 2004. A demand followed by loss, or by failure to return within a reasonable time, can establish conversion under section 2(2) of the Torts (Interference with Goods) Act 1977. Alternatively, statements that the documents were lost or mislaid amounted to an unequivocal refusal to return them.
2. No continuing conversion. The cause of action accrued in April 1998 or, alternatively, in 2004. The continuing duty to restore a chattel does not extend to goods which have been lost and are no longer recoverable. The conversion and reversionary-interest claims were therefore statute barred.
3. Data protection. The Data Protection Acts concern personal data, not document protection or proprietary rights in documents. They imposed no general duty to return or preserve the 1988 documents. The 2016 and 2017 requests were answered truthfully because HMRC did not hold the relevant data. Any historic breach would have accrued by 1998 or 2004 and was time barred; in any event, no loss was caused by the later requests.
4. Loss of chance and causation. Under Perry v Raleys [2019] UKSC 5, questions concerning what the claimant would have done were determined on the balance of probabilities, while a claim depending on a third party required only a real or substantial chance. The claimant had access to substantial alternative documentation and failed to prove that the missing documents prevented effective challenges or caused any lost chance. His prolonged inaction independently defeated causation.
5. Limitation and concealment. Section 32 of the Limitation Act 1980 did not assist. The loss of the documents was communicated sufficiently in 1998 and 2004, and deliberate concealment was not proved. Delivery up was a remedy for conversion, not a freestanding cause of action. The action was to be dismissed, subject to the parties drawing up the appropriate order.

This was a first-instance decision. Earlier interlocutory proceedings before Master Thornett included limitation rulings and directions for trial of the preliminary issue. The judgment also considered the effect of an earlier bankruptcy-annulment decision, but no appeal was determined in this judgment.