Calor Gas Limited v Walsall Gas Cylinders Limited

Unauthorised filling of another person’s cylinders may constitute conversion even where the cylinders suffer no physical damage. The relevant question is whether the deliberate conduct substantially interferes with the claimant’s immediate right to possession, including by exercising temporary dominion over the goods. A claimant with an immediate right to possession may also sue in trespass where a determinable bailment leaves it with sufficient possessory rights. An unlawful means conspiracy requires a combination, unlawful means, intention to injure, and loss. Intention may be established where the defendants’ gain and the claimant’s loss are necessarily linked.

Calor supplied LPG in cylinders which remained its property and could only be filled by Calor. It claimed that the defendants had filled Calor cylinders with LPG at premises in Walsall without authority. The claims were framed in conversion or trespass to goods, passing off, and unlawful means conspiracy.

The court rejected the passing-off claim because there was insufficient evidence of a misleading representation to customers. It considered whether Calor had sufficient possessory rights to sue, whether the unauthorised filling amounted to conversion or trespass, and whether the defendants had acted in combination with the necessary intention to injure.

1. Conversion and possessory standing. A claimant need not prove ownership alone. It must have possession or an immediate right to possession when the conversion occurs. Breach of the Cylinder Refill Agreement, by taking a cylinder to an unauthorised filler, automatically gave Calor an immediate right to repossess the cylinder. That was sufficient to support a conversion claim.
2. Trespass to goods. The ordinary requirement is actual possession at the time of trespass. However, where a bailment is determinable at will, the bailor may retain sufficient possession to sue third parties. The court applied the reasoning in Calor Gas Limited v Homebase Limited, where the same contractual structure gave Calor an immediate right to possession. The judge also considered that the same right would permit a trespass claim, although that point was unnecessary to the result.
3. Unauthorised use. Deliberately taking possession of a cylinder, knowing that it belongs to Calor and that Calor does not permit its filling, involved temporary dominion and conduct inconsistent with Calor’s possessory rights. The interference was sufficiently substantial to constitute conversion even though no physical damage was proved. The judge preferred the reasoning of Latham CJ in Penfolds Wines Pty Ltd v Elliot to the contrary analysis of Dixon J.
4. Alternative trespass. If the interference had not amounted to conversion, deliberately handling and filling the cylinders would have constituted direct and immediate interference sufficient for trespass to goods.
5. Unlawful means conspiracy. The court adopted the principles summarised in Lybian Investment Authority and ors v King. Formal agreement was unnecessary; a tacit combination with a common design sufficed. The defendants had to intend injury, and knowledge of the facts making the means unlawful was sufficient, including blind-eye knowledge.
6. Application and order. The evidence established that Walsall Gas Cylinders Limited and Riffat Mahmood acted in combination with Ahtaf Mahmood, Starlight and Kashaf Mahmood. The unauthorised handling and filling of Calor cylinders were unlawful means. The defendants’ profit and Calor’s lost profit were necessarily linked, establishing intention to injure and loss. The claim succeeded against all three defendants. Calor was entitled to injunctions, with consequential orders to be agreed or determined at a short hearing.