James Howells v Newport City Council

A claim concerning waste deposited at a disposal facility may be summarily determined where the pleaded facts establish that the statutory ownership rule defeats the claim. Under section 14(6)(c) of the Control of Pollution Act 1974, property delivered to a disposal authority in the course of using its facilities belongs to the authority. The provision is not confined to authorised or intentional disposal and does not preserve competing proprietary interests.

Cryptocurrency and the information recorded on a physical storage device must be distinguished. A private key record on a hard drive is not the cryptocurrency itself. A proprietary restitutionary claim is unavailable for a chattel where ordinary tort remedies apply. A constructive-trust claim based on unconscionable retention must have a coherent legal basis, realistic prospects, and be brought within the applicable limitation period.

The claimant alleged that a hard drive containing the only digital record of the private key to his Bitcoin had been mistakenly deposited at the defendant council’s landfill in 2013. He sought declarations of ownership, delivery of the hard drive or access for excavation, and substantial compensation.

The defendant applied under CPR Part 3 and Part 24 for strike-out or summary judgment. The central issues were whether the hard drive belonged to the council under section 14(6)(c) of the Control of Pollution Act 1974, and whether the claimant’s proprietary restitutionary, equitable and declaratory claims could nevertheless succeed.

1. Disposition. Judgment was given for the defendant and the claim was dismissed. The court held that the particulars disclosed no reasonable grounds, that the claim had no realistic prospect of success at trial, and that there was no other compelling reason for a trial.
2. Summary judgment. The court assumed the pleaded facts in the claimant’s favour. Summary judgment remains available where, despite factual disputes, the legal consequence is clear whichever way those disputes are resolved. The court may critically examine the available material, determine a legal issue suitable for decision, and need not permit complex or developing litigation to continue merely because a trial would involve disputed facts.
3. Ownership of the hard drive. Section 14(6)(c) of the Control of Pollution Act 1974 provides that anything delivered to a disposal authority by another person in the course of using its facilities belongs to the authority and may be dealt with accordingly. The words are unqualified and confer a practical right to deal with the item as waste. They do not preserve competing proprietary interests. The provision applies whether the person delivering the waste had the owner’s authority or acted by mistake, since the authority cannot sensibly be required to investigate matters outside its knowledge or control.
4. Bitcoin and the private key. The dispute was about the hard drive, not ownership of the Bitcoin. Bitcoin has no physical location and was not on or in the landfill. The hard drive contained only a digital record of the private key. That record was information embedded in a physical medium and was distinct from any right to use the key.
5. Alternative claims. The proprietary restitutionary claim could not succeed because section 14(6)(c) prevented the claimant from retaining subsisting property rights and the common-law remedy described in Armstrong DLW GmbH v Winnington Networks Ltd was unavailable for a chattel. A resulting trust was not realistically arguable. A constructive trust based on unconscionable retention was also precluded by the statutory transfer of ownership, was not realistically supported by the council’s retention of buried waste, and was subject to the six-year limitation period under section 21(3) of the Limitation Act 1980. Section 32 did not assist because the claimant knew the material facts and the later assertion of ownership was an assertion of law, not concealed fact.
6. The court declined to decide that laches would necessarily defeat the claim, but that did not create a compelling reason for a trial.