Bailment
Nature of Bailment
A bailment arises where goods belonging to one person are delivered into the custody of another for some period or purpose. One party holds another person’s goods / personal property with the former’s consent, whether express or implied.
Bailment includes, hire, letting and hire purchase as well as the lending and safekeeping of goods. It covers matters as diverse as warehousing and dry cleaning. It arises where goods or other personal property are delivered to another for repair or processing, provided that they are not altered in their nature. The goods involved may be any movable property such as vehicles plant and equipment.
The delivery of goods under a bailment is distinct from a sale or exchange. A bailment implies an obligation to redeliver the same goods. If the arrangement involves the processing of the goods, so that they are altered in nature, then there is no bailment.
Creating Bailment
A bailment may be made by the owner or another person (who may not own the goods but may have possession). This person is called the bailor. The person to whom the bailor gives or delivers the goods is the bailee. The bailee, the person to whom the goods are given, will have custody or physical possession of them. The bailee may have custody of the goods through another person, such as an employee.
The bailment arises by delivery of the goods to the bailee. The bailor retains his better title. The bailee must obtain the goods by consent. He must do so with the authority of a person with better title. His authority to deal with the goods arises from the bailor’s consent. The consent may be expressed or implied. In some cases, possession may be taken under a legal power or by necessity.
The bailee has possession of the goods, but the bailor has a better title. The bailee may not deny the bailor’s better title. The bailee has a special property in the goods. The arrangement may arise with or without a contract. The default common law rules apply where there is no contract. Where there is a contract, it will usually govern the matter.
Possession Required
The bailee must obtain possession of the goods. This will generally require delivery by the bailor. In some cases, possession may be held by a third-party on his behalf. The bailee must consent expressly or impliedly to act as such. The consent of both parties is of the essence in bailment. A bailment without consent may arise where a person comes into possession of goods in pursuance of legal powers, such as where goods are seized.
Possession implies physical or constructive possession, or possession through another together with an intention to control and possess the goods. It requires an assumption of control. This assumption of control creates a duty to take care of the goods. These duties may be varied or regulated by the terms of a contract.
As with possession generally, a bailee may have control and possession through the physical custody of another. This will commonly occur where an employee has physical custody in the course of his employment on behalf of his employer.
The bailee may come into possession of goods under legal powers. This may occur where goods are seized.
Types of Bailment
A bailment may be made for either the bailor’s use and benefit or for that of the bailee. It may be free, or the payment may go one way or the other. For example, in a hiring, the bailee pays the bailor. Where work is undertaken to goods, the bailor pays the bailee. Where goods are loaned, and no monies are paid, there is a gratuitous bailment.
It may not be apparent whether the bailment is gratuitous or contractual. For example, where goods are left in a cloakroom in a public place, the question may arise as to whether this is covered by a contract. Where the deposit of goods is incidental to another commercial transaction, it is not usually treated as a gratuitous bailment, notwithstanding that it is not covered by a contract.
A contract may cover some or all the terms of the bailment, but it need not necessarily do so. Where a bailment is accompanied by a contract, it will be a breach of contract to terminate in breach of its terms. Where a contract expires, the bailment may become a bailment at will. The bailor’s rights may be restricted by the terms of a contract affecting the bailment
Contractual and Gratuitous Bailment
The duties and rights applying to a bailment of goods depend on the nature of the bailment. Goods may be given to the bailee for either the bailor or bailee’s purpose. There may, for example, be a lease or hiring of the goods. There may be a loan. The goods may be put into the possession of the bailee, in order for the latter to undertake work on them.
A gratuitous bailment is one for which no money is paid. The duties of the bailee are lower than for a bailee for reward or payment. The liabilities of a bailee for reward may be governed by the terms of a contract. The duties are higher in the case of a bailment for reward than a gratuitous bailment.
A bailment of goods is “at will” unless there is an enforceable promise to allow the goods to be kept for a period. The arrangement can be terminated by notice, and the bailor may require the return of the goods at any time. A loaned item may, therefore, be demanded at any time. In contrast, a lease or hire purchase arrangement is governed by the terms of the relevant contract. There must be a contractual promise with consideration.
Title
Generally, the bailee cannot challenge the bailor’s title. This is equivalent to the landlord and tenant principle, by which the tenant may not challenge the landlord’s title. Nonetheless, the bailee is obliged to deliver the goods back to a person with better title.
A special procedure known as interpleader may be used, when more than one party makes a claim to goods, which are in the possession of another. That other may put the goods under the control of the court while the third parties contest their respective rights and entitlements.
The general inability of the bailee to challenge the title of the bailor means that the bailor may be able to claim compensation from the bailee for loss and damage to the goods, notwithstanding that they are not owned by the bailor. In this case, the bailor may be obliged to hold what he receives on behalf of the person with better title.
This rule has been modified in England, Wales and in Northern Ireland. A defendant is entitled in a claim of interference with the goods, to assert that a third party has better title in respect of all or part of the interest being claimed.
Claim for Loss or Damage to Goods
In the case of a contractual bailment, the true owner may not have sufficient rights of possession to take trespass proceedings against a third-party. He is not able to sue for conversion as he is not entitled to immediate possession. The bailor retains the rights to sue for damages for damage to his residual right after termination of the bailment, effectively his future rights.
The bailee may make a claim of trespass against third-parties who interfere with his possession. He may sue for direct interference by third-parties in trespass and for loss and damage caused by negligence. The bailee’s loss will be limited to the particular financial loss which he incurs. The precise nature of the rights which a bailee may assert depends on the nature of the bailment and his interest in the goods.
Apart from trespass, the owner may sue for damage caused by negligence. This does not require the same immediate right of possession as trespass. Both the bailor and the bailee may be able to recover loss incurred by them by reason of the same negligence.
A bailment, governed by a contract may in some instances, be specifically enforceable. The court may order the goods to be delivered to the bailee where the bailor seeks to terminate the bailment in breach of contract.
Redelivery
The bailee has a duty to re-deliver the good on demand or as the contract requires. The general presumption is that the bailee should make the goods available at his own premises. Where a demand is made by the bailor, the bailee must comply within a reasonable time. What is reasonable depends on the circumstances. Failure to deliver gives rise to liability for detinue (in the Republic of Ireland).
The goods may be delivered at the bailor’s direction. Innocent delivery to the incorrect party could lead to liability for conversion for the bailee. A bailee is responsible for his own default and that of his employees for whom he is vicariously liable. A bailee is also liable for the default of his independent contractors. This is on the basis that he cannot divest himself of his duty to take care of the goods. If he chooses to sub-contract and entrust the goods to another, he retains responsibility.
The bailor need not be the true owner of goods. He need only have a better title than that of the bailee. The bailee cannot deny the bailor’s title. By taking the goods, he impliedly agrees not to challenge the bailor’s title. This principle does not apply where the bailee is compelled to surrender the goods to a person with a better title (“the true owner”).
Where a bailee is faced with competing claims to the title to the goods, the best course is to “interplead”. This involves putting the goods under the control of the courts and allowing the bailor and the third party to contest the position without involving him. This will only be necessary where the third parties are competing for delivery rather than damages.
Sale of Goods Issues
A bailor may (in principle) sell goods to a third-party who has no knowledge of the hiring, who may take free from it. The position is not free from doubt. The fact that the goods are not in the possession of the seller will generally give the notice to the purchaser of the bailee’s rights. The sale may breach a contract with the bailee.
Where goods which are subject to a bailment, are sold to a third-party, difficult questions arise as to whether the third-party is bound by the terms of the bailment. There is some support for the proposition that the buyer may take the goods subject to the contract. Various legal theories have been employed for this purpose.
A buyer of goods where the title is retained may be a bailor pending transfer of title unless this position is varied by the terms of the contract.
Unsolicited Goods
A person who receives goods without his request or consent is not thereby made a bailor. This applies in the case of unsolicited goods. Similarly, where a person takes possession of goods of a wholly different nature to that which he understands he is to receive, he may not have possession of them in accordance with general principles.
Statutory provision exists in relation to unsolicited goods. If a person receives goods without contracting or agreeing to acquire them, there exists a procedure under the Sale of Goods Act by which he can give notice requiring them to be collected. If they are not collected after a set period, he becomes the owner.
The consent of the bailee need not continue. A person who obtains possession of goods by consent remains bailee notwithstanding that he withdraws consents and notwithstanding that he cannot redeliver the goods, although he wishes to do so.
However, there may be a change in his status as bailee, entailing lesser obligations, because the bailment is no longer voluntary. Where bailment becomes involuntary, the bailor must refrain from causing willful harm to the goods.
References and Sources
Cases
Webb v. Ireland
[1987] IESC 2; [1988] IR 353; [1988] ILRM 565
Finlay CJ
14. Having reached the conclusion as a matter of law that the State was estopped from challenging the title of the plaintiffs to the hoard because it was placed estopped with them and accepted on a bailment, the learned trial judge did not find it necessary to decide the question of the right or title of the landowners to the hoard. He expressed his opinion that the action was not an action concerned with the ownership of the hoard but was an action between a bailor and a bailee and the sole issue was whether the plaintiffs as bailors were entitled to the return of the hoard from the State. The action, he stated, is not concerned with the ownership of the hoard and will not determine its ownership.
15. The first issue which falls to be determined on this appeal, from a logical point of view, is the question as to whether, assuming that the hoard was received by the National Museum as agent for the State in the capacity of a bailee, there must be an implied term in that bailment that the plaintiffs as bailors had a good title to the goods. The decision of the High Court was based on the decision of the Court of Appeal in Rogers Sons & Co v. Lambert & Co [1891] 1 QB 318
16. I have considered that decision and I have come to the conclusion that on the facts of this case there can not be implied into the arrangements between the plaintiffs and the defendant, surrounding the deposit of the hoard with the Museum, any term establishing a title in the plaintiffs to the hoard. The terms under which the hoard was deposited are clearly set out in the letter written by the solicitors for the plaintiffs which was brought to the director of the Museum at the same time as the articles were. The reference in that letter, which I have already quoted in full, to deliver these articles to your care for the present and pending determination of the legal ownership (emphasis added) is, in my opinion, wholly inconsistent with implying into any bailment arising from that delivery an acknowledgment or admission of the plaintiffs’ title to the goods. Whilst, therefore, I would accept as a general proposition of law that bailment involves an implied term as to the title of the bailor of the goods, it can only do so to the extent and in the instances where such an implied term is not by the express terms of the bailment excluded. I am satisfied that this case is one in which such an implied term is by the express terms of the letter excluded from the bailment.
17. It is next necessary to consider the issue as to whether even assuming that the title of the plaintiffs to the goods is not an implied term in this bailment, the State is by reason of the bailment estopped from asserting its own title to the goods which it claims it derived from the landowners, O’Brien and O’Leary.
18. The decision of the learned trial judge in this context was again based largely on the decision in Rogers Sons & Co v. Lambert & Co and also in Biddle v. Bond (1865) 6 B & S 225 which is cited with approval in that case. There can be no doubt that Rogers Sons & Co v. Lambert & Co is a clear authority for the proposition that if a bailee seeks to refuse the return of goods, asserting the right of a third party to the possession and ownership of them, that he can only do so expressly on behalf of and with the authority of the third party, and that having asserted such a right he must prove it. The decision, however, does not appear to me to exclude or indeed to deal at all with the situation where a bailee asserts not the right of a third party to the goods but his own title to them, even if it has been acquired subsequent to the original bailment. The facts of Rogers Sons & Co v. Lambert & Co where the plaintiffs had purchased copper from the defendants and paid for it and whereby the defendants expressly undertook to warehouse the copper and upon payment of the proper warehousing charges to deliver it to the plaintiffs or their order, made it, of course, quite unnecessary to consider any assertion by the defendants of a title in themselves to the copper. In considering the nature of jus tertii which can be asserted by a bailee Lopes LJ at p. 328 of the report quotes with approval from the decision in Biddle v. Bond where Blackburn J delivering the judgment of the Court of the Queen’s Bench said:-
19. We think that the true ground on which a bailee may set up the jus tertii is that indicated in Shelbury v. Scotsford, viz., that the estoppel ceases when the bailment on which it is founded is determined by what is equivalent to an eviction by title paramount.
20. In my view, the true legal position which arises where a bailee asserts and establishes a title in himself to the goods is that he establishes the termination of the bailment and that by reason of that termination any estoppel which would otherwise arise between a bailee and a bailor ceases to operate. Such a view of the law appears to be logical and, in my view, appears also to yield a just result for there could be significant injustice if a bailee having lawfully and properly acquired a title to the goods which had been bailed with him were obliged to return them to the bailor by virtue of an estoppel and presumably left to the remedy of a subsequent second action for the delivery back of the goods to himself again. I, therefore, conclude that it is necessary in this appeal to determine the question as to whether by virtue of the contracts and conveyances made between the State acting through the Minister for Education and the owners of the land the State had, by the time of the institution of these proceedings acquired a title to these articles as against the plaintiffs.
21. The defendants assert a title to the goods derived through the landowners, Messrs. O’Brien and O’Leary, on two separate grounds. Firstly, they allege that the landowner had
Walsh J
Walsh J .
84. The facts of this case have been so fully set out in the judgment which has just been delivered by the Chief Justice that I do not find it necessary to repeat any of them.
85. The Chief Justice has set out in five paragraphs the conclusions of the learned High Court judge. The sequence is not exactly the same as that of the High Court judge in his own judgment but I propose to deal with the matters in the order which has been followed by the Chief Justice.
86. The defence raised in the High Court by the defendants was to rely upon the claim that the former royal prerogative in relation to treasure trove was still applicable in the sense that it was claimed that the State was the successor in title of such prerogative. The claim which the State made to the ownership of the chattels in question was founded on that assertion and was to the effect that it superseded any claim of right of the plaintiffs. For the reasons given by the Chief Justice in the course of his judgment I am of the opinion that this claim by the defendants based on succession to the royal prerogative was rightly rejected by the learned High Court judge and that it cannot be sustained in this or any court. If the State has a rightful claim then it must be found elsewhere. That is a matter to which I shall return later in this judgment. However, so far as the High Court is concerned once the learned High Court judge has reached his decision to reject the State’s claim to a royal prerogative the question of bailment became of great importance. The claim of the museum authorities, voiced through the State, to retain the articles in question notwithstanding that they were bailees of the objects had to be rejected as the claim was based, and apparently solely based, upon the title claimed through the royal prerogative. I agree with the view expressed by the learned High Court judge that all other things being equal, a bailee is not entitled to challenge the title of the bailor.
87. In this case the chattels were left with the museum authorities, as a State agency, and they were left with them for safe keeping pending the outcome of any determination of legal ownership. The bailment was a gratuitous bailment which conferred no rights upon the bailee as such even though it may have imposed certain liabilities. This case is not concerned with that latter aspect of bailment. A gratuitous bailee is precluded from using a chattel bailed in any manner whatever without the express and complete consent of the bailor, unless such use is needful for its preservation. The chattels were not bailed to the bailee for the purpose of being used for any certain time, or at all, but solely for safe keeping pending the outcome of the establishment of legal title. Being a gratuitous bailment it was open at any time to the bailor, in this case the respondents, to call for the return of the article. Other things being equal the bailee could not legally refuse to return them. The objects were bailed to the museum authorities as agents of the appellants and they were not received by the museum authorities as stakeholders or in any similar capacity.
88. In this case, the bailee’s principal, namely the State, asserted a title based on the alleged succession to the royal prerogative of treasure trove. That being the case, then the judge, in my view, was perfectly correct in holding that as the claim to title set up by the bailee in the defence to the claim for return of the goods could not be sustained he was obliged to order the return of the goods to the bailor without determining the title of the bailors. I am of opinion that the use of the words ‘pending determination of the legal ownership’ adds nothing to the matter once the bailees have failed, or their principles have failed, to establish the title which they asserted. It is also my opinion that if a claim for the return had been made before, and without waiting for the title to be established, the bailees would have no legal answer to the claim to return the goods on demand having regard the nature of the bailment unless they were able to establish a claim of title on behalf of themselves or their principals. This they failed to do. This aspect of the case does not concern any claim by a third party because the bailees were quite clearly acknowledged to be and were treated as agents of the appellants. At no time did the bailees, namely the National Museum authorities, assert a claim on behalf of any part other than the State. Obviously if the bailee can establish a title for himself or for his principals he has ousted the title of the bailor and the matter ceases to be one of bailment. However, that is not what happened in the present case.
89. But in so far as the learned High Court judge held that the bailees could not avail of a title to the goods acquired after the bailment, it appears to me that he was not correct.
90. The second ground of defence which was offered by the appellants in the High Court was that if they did not have a right to the title before the bailment, they did acquire the title by assignment from those who had it before it was sought to determine the bailment. This post bailment title, which is asserted, is claimed to be derived from the owners of the lands in which the chattels were found, namely Messrs O’Brien and O’Leary. The landowners had by an agreement, for consideration of £25,000 to each of them, assigned to the State all their title to the chattels found. Naturally, this was only effective to pass title if they had any title.
91. This claim is based on the argument that the owner of the fee simple of the land is entitled to any chattel which may be on the land against any finder of the chattel upon the land. There is legal authority for such proposition and, also, there is legal authority to distinguish between a claim which the owner of land may assert in respect of objects found upon this land as from those which are found in or under the land surface. The Chief Justice in his judgment has referred in some detail to the legal authorities in question and has analysed them.
92. These cases reflect that the importance which appears to have been attached to the ownership of lands was such as to denigrate, if not obliterate, the true title claimed in respect of the chattels themselves.
93. I think it is true to say that there is no such thing as a chattel which has never had an owner. In this particular case the judge found as a fact that the chattels had been placed in or on the land for safe keeping. I say in or on the land because I have regard to the number of centuries that has elapsed which makes it difficult to say whether the initial hiding place was beneath the surface of the soil or simply achieved that situation through the course of time. On the view I take of this case it is not necessary for me to decide whether some distinction should be drawn between the chattels found upon the land and those found in land or under land. Leaving aside any question which might arise under the Statute of Limitations, 1957, which was not relied upon in this case, it cannot be asserted that these articles were abandoned in the sense that ownership had been abandoned. If chattels are expressly or by implication abandoned in favour of a particular and ascertainable person or persons then the chattels become the property of that person or those persons if they accept them. If they do not accept them then the chattels have no particular owner. Articles cannot be regarded as lost if they are intentionally placed in a particular situation. In my opinion it would be a great injustice if the true owner of the chattels, having intentionally placed them in a particular place for safe keeping and then cannot recall where he placed them, or where he did not have an opportunity to come back to recover them, should be deemed to have lost his title in favour of the owner of the lands in which he placed them. Strictly speaking nothing can be said to be lost in the literal sense if it continues to exist even though its owner may be unknown or because it has been unknowingly misplaced. Notwithstanding the number and the weight of the authorities cited it is my opinion that the owner of the land upon which mislaid or unremembered chattels are intentionally placed for safe keeping, whether in or under the surface, cannot claim to be the owner of the chattels simply by reason of his being the owner of the land. To so hold would be fail to vindicate the rights of property of the true owners of the chattels so placed and would permit the type of injustice which Article 40.3 of the Constitution is designed to prevent. The owner of such land is to be deemed to be in bare possession of the chattels even if he does not know of their existence on his lands. He can assert a good claim to possession, as distinct from ownership, against any claimant whether it be trespasser, or otherwise, whose claim is based on simply unearthing and removing the chattels in question. Even the former royal prerogative of treasure trove acknowledged that in so far as treasure trove was concerned the true owner, or his successors in title, could always claim ownership and possession of the treasure if he could establish title.
British Wagon Co. Ltd. v. Shortt.
Davitt P. [1969] I.R. 437
In their statement of claim, delivered on the 9th November, 1959, the plaintiffs claim the return of the machinery, or payment of its value, stated to be £1,200, together with damages for its detention. In the alternative, they claim damages for conversion of the goods by the defendant. They also repeat their claim for an account. In his defence, delivered on the 25th April, 1960, the defendant does not admit that the goods are or were the plaintiffs’ property, pleads that he purchased them in good faith and expended £601 2s. 6d. in repairing and fitting parts to the machinery; and generally traverses the allegations in the statement of claim. He counterclaims for the £601 2s. 6d., alleging that he has been at all times willing to return the goods on receiving a fair allowance for the increased value of the machinery due to his expenditure. In their reply, delivered the 16th May, 1960, the plaintiffs join issue and say that if the defendant did expend any money on the machinery he did so after he became aware that it belonged to the plaintiffs and without any request by them. They generally traverse the allegations in the counterclaim; plead that the value of the machinery has been depreciated by the defendant’s actions; and say that they are entitled to possession without making any payment.
I am satisfied that the plaintiffs are entitled to relief of some kind and my only difficulty is as to the nature and extent of the relief I should give them. The defendant contends that he should be allowed to give back the goods and be paid the £601 2s. 6d.in other words, that the plaintiffs can have judgment for the return of the goods and that he should have judgment on his counterclaim. The plaintiffs’ present attitude is that they do not want the goods returned, but only damages for their conversion.
The defendant has been in possession of the goods since the 24th April, 1957over 31/2 years ago. They are, if efficient, capable of highly profitable use; their profit earning capacity can be conservatively estimated at £1,500 a year or, very roughly, 15s. 0d. an hour. The goods constitute in fact one machine. The defendant says that he used it for some time; but that it was never really efficient; that it has been lying idle for two years, and out in the open since the early part of 1959. He estimates its present value at from £800 to £900, including the increase in value due to his repairs and replacements. The plaintiffs, on the other hand, say that at the time the machine was converted by the defendant to his own use it was worth from £1,200 to £1,500, and they estimate its profit earning capacity at as much as £2,000 a year. They contend that they should have damages assessed accordingly, which would mean that they should get something between £4,000 and £5,000 damages£1,200, at least, plus £2,000 a year for 12/3years.
I take the view that both plaintiffs and defendant are quite unreasonable in their contentions. I do not accept the defendant’s case that he made little use of the machine. He considered that it was worth paying £1,300 for and spending £600 on. These facts seem to be quite inconsistent with his evidence that he could, and did, make little profitable use of it. I believe that he made profitable use of it for a considerable time, until, I believe, the demand for land reclamation work fell off.
Whatever use he did make of it he had, apart from running expenses, for £1,900. Assuming that he could get the work, he could possibly have made a profit of £1,500 a year for, I believe, at least two years. Having, I believe, made considerable use of the machine, plus his own parts, he now proposes to hand it back on getting £600; and the plaintiffs, whose property the machine is, are to get back a depreciated machine, worth possibly £800 or less, after paying £600 to get it. The plaintiffs, on the other hand, have not suffered anything like £4,500 damages. They do not engage in the business of hiring out machines in the ordinary sense. They in reality sell out and out by means of hire-purchase. At the time the defendant acquired the machine from Bolger I am sure that they would have been perfectly satisfied if he had stepped into Bolger’s shoes and become liable for the balance of unpaid instalments, viz., £2,019 odd. If they had got back the machine on the crucial date, the 19th March, 1959, they would, I am sure, have attempted to sell itagain, I am sure, by way of hire-purchase. Their loss, as far as I can see, is the value of the machine on that date plus interest.
I take the view that I have a discretion as to whether the plaintiffs should have judgment for the return of the machine, together with damages for its detention, or whether they should have simply damages for its conversion. I am satisfied that they are entitled to one or the other. The defendant refused to return the machine when demanded on the 19th March, 1959; he was not, in my opinion, entitled to refuse to hand back the machine until he was paid £600; and by refusing to do so, or to do so unconditionally, converted it to his own use. I am prepared to exercise my discretion by acceding to the request of counsel for the plaintiffs and awarding damages for conversion of the machine without allowing its return. I consider that this case is distinguishable from that of the Strand Electric & Engineering Co. Ltd. v. Bradford Entertainments Ltd. (1), relied on by counsel for the plaintiffs. In that case the plaintiffs normally carried on the business of hiring out the equipment in question; and during the material period were actually at the loss of hirage charges. In the present case the plaintiffs do not carry on any business of that kind, and are not at the loss of hirage charges of that nature. I consider that if I assess the value of the machine at £1,200 at the date of its conversion, and allow interest at 10 per cent per annum on that sum, I will be doing substantial justice between the parties. Assuming that there will be no payment before the 19th December, 1960, I assess damages at £1,410.
Ice-cream Ltd. v. Masterfoods Ltd.
[1990] 2 I.R. 467
Lynch J.
A number of points should be noted about these agreements which are, of course, at the very core of the two cases brought by HB and Mars and at the core of the applications which I now have to decide:
(1) The retailer is not restricted from selling the products of other suppliers in competition with HB. The only restriction is that the HB freezers must not be used for that purpose.
(2) That form of restriction is widespread throughout this State and the European Community and does not seem to have been heretofore challenged either under European law or domestic law, although I recognise that this is not a conclusive point because there can always be a first time.
(3) In many small shops the retailer will wish to accommodate only one freezer and will therefore have to be satisfied to carry only HB ice-cream products if he takes a HB freezer. However, if the retailer has a HB freezer he can negotiate with another supplier to supply a freezer and complete the change-over in two months.
(4) The retailer can provide his own freezer and carry only the brands he wishes to carry. He can also provide a second freezer, if he has room for it, and carry only the brands he likes in that freezer or carry any products in it. There is no requirement that HB ice-cream products can only be sold from HB’s freezers, just simply that other brands will not be sold from HB’s freezers.
As from the month of June, 1989, Mars began an attempt to enter into the Irish ice-cream market with its ice-cream Mars product. HB discovered that some of its retailers were storing this product in HB’s freezers contrary to their agreements with HB. I have no doubt that a substantial proportion of retailers were assured by servants of Mars that “HB would not mind”, or words to that effect, and that those assurances were made at least recklessly, not caring whether they were true or false. HB did mind and made its objections clear in correspondence and called upon Mars to desist. Mars denied that it had authorised any servant or agent to give any such assurance as referred to but nevertheless claimed that HB
had no right to object to the Mars product being stored in HB’s freezers if the retailers so wished, having regard to the provisions of Articles 85 and 86 of the Treaty of Rome and article 9 of the Restrictive Practices (Groceries) Order, 1987, as confirmed by the Restrictive Practices (Confirmation of Order) Act, 1987.
Mars claims that it should be entitled to have retailers, if the retailers so wish, use space in HB’s freezers to store and sell Mars’ products. Mars does not suggest or concede that it should get the agreement of HB to this use of HB’s freezers having regard to the legal provisions referred to above. It contends that it is entitled to this facility absolutely free of charge, that it need not pay one penny to HB for the use of its £7 million worth of freezers or towards the £1 million annual cost of servicing and replacing them.
HB objects that this is an unlawful interference with its property right in its freezers and with its contractual rights vis-Ã -vis its retailers. There is no issue but that what Mars wishes to do is an interference with HB’s property and contractual rights, but the issue is whether or not such interference is wrongful or unlawful.
HB says that its bailment by the loan or hire of its freezers to retailers does not entitle retailers nor a fortiori anyone else (in this case Mars) to store products therein which have not been supplied by HB. Mars says that the retailer has possession of the freezer and therefore there can be no trespass against HB. HB replies that such possession as the retailer has does not entitle him to store other products in HB’s freezers and that storage of other products in HB’s freezers is a trespass or is certainly a wrong committed against its property rights in the freezers.
I am satisfied that HB has a serious case to be tried on the issue of wrongful interference with its property rights in its freezers. So far as interference with HB’s contractual rights is concerned, again no real issue arises but that interference with its contractual rights has taken place. The question is whether or not that interference is lawful or, at any rate, not unlawful by virtue of Articles 85 and 86 of the Treaty of Rome or article 9 of the Order of 1987. Prima facie the interference is unlawful and therefore the onus of establishing that it is not unlawful rests on Mars.
It follows, and I am satisfied, that HB has a serious case to be tried on the issue of wrongful interference with its contractual rights vis-Ã -vis its retailers to whom it has supplied freezer cabinets.
Turning to Mars’ case, I shall deal first with Articles 85 and 86 of the Treaty of Rome. Article 85(1) provides:
“The following shall be prohibited as incompatible with the common market: all agreements between undertakings, decision by associations of undertakings and concerted practices which may affect trade between Member States and which have as their object or effect the prevention, restriction or distortion of competition within the common market, and in particular those which:
(a) directly or indirectly fix purchase or selling prices or any other trading conditions;
(b) limit or control production, markets, technical development, or investment;
(c) share markets or sources of supply;
(d) apply dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(e) make the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.”
As regards the particular examples set out in this article of breaches of it in paragraphs (a) to (e), Mars mainly relies on paragraph (e) without necessarily abandoning the possibility of a contravention of some other paragraph.
I think that a breach of paragraph (e) does not arise at all in this case. The contracts in question are bailments of freezers whether they be on loan or hire. The terms objected to relate to the very basis of the contract of bailment, namely, the purpose for which the goods (the freezers) are bailed to the bailee (the retailer). The freezers are bailed to the bailees for the purpose of storing, selling and advertising HB ice-cream products only. Those terms are not supplementary obligations nor by their nature or according to commercial usage do they not have an essential connection with the contracts of bailment. They do. It would seem that none of the particular breaches set out in paragraphs (a) to (e) of Article 85(1) apply; certainly, none clearly apply to the facts of this case. That is not, of course, conclusive because there could still be a breach of Article 85 if it was reasonably clear that there was a contravention of the general intention of the article. Is it reasonably likely that these contracts of bailment of freezers may affect trade between member states of the European Community and may prevent, restrict or distort competition within the common market? I am not satisfied that Mars has made out a sufficient prima facie or serious case to that effect.
The foregoing ruling largely but not wholly governs the case under Article 86 as well. Article 86 provides:
“Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part of it shall be prohibited as incompatible with the common market in so far as it may affect trade between Member States. Such abuse may, in particular consist in:
(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
(b) limiting production, markets or technical development to the prejudice of consumers;
(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage;
(d) making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the subject of such contracts.”
The particular breaches set out in paragraphs (a) to (d) of Article 86 are the same as those set out in Article 85, with the omission of paragraph (c) of Article 85 which relates to sharing of markets or sources of supply. My conclusions about these particular breaches in relation to Article 85 govern the particulars contained in Article 86. However, as in the case of Article 85, this is not conclusive.
I think that Mars has established a serious case to be tried that HB enjoys a dominant position within the Irish ice-cream market. However, I am not satisfied that Mars has estalished a serious case to be tried that HB has by these contracts of bailment abused its dominant position either so as to affect trade between members states or at all.
I turn now to article 9 of the Restrictive Practices (Groceries) Order, 1987, which reads:
“No supplier, wholesaler or retailer shall be a party to any agreement, arrangement or understanding (whether induced by threat, promise or otherwise) which has or is likely to have the effect of limiting or restricting entry to trade in any grocery goods.”
Ice-cream products are clearly “grocery goods” within the meaning of this article and therefore article 9 applies to them.
It was submitted by Mars that the exclusivity clause in HB’s bailment contracts with its retailers to whom it supplies freezers is illegal and unenforceable by virtue of article 9. I have already drawn attention to a number of points about these agreements. They do not restrict any retailer from selling other brands besides HB’s, provided he is equipped to do so, and there is nothing to prevent another supplier who wishes to enter into the ice-cream market in Ireland from canvassing such retailers to take Mars’ products and for such retailers, if necessary, to equip themselves to store them or offering the necessary storage to the retailer. Mars may not only canvass retailers of HB’s products to do this but it can also canvass other retailers to whom other suppliers of ice-cream bail or lend or hire freezers.
Mars says that the bailment contracts restrict its entry to the trade in Ireland. However, in this action Mars is seeking terms of entry to the Irish ice-cream trade which are more favourable to it than those available to other suppliers. In the case of HB, Mars is seeking to have available to it the £7 million capital investment and £1 million annual maintenance and replacement cost of freezers free gratisand for nothing. Mars could also, of course, seek to use storage space for its products from other suppliers of freezers, and it appears it has done that in the case of Valley Ice Cream Limited, although it has not disclosed the terms of that arrangement.
I am not satisfied that Mars has established a sufficiently serious case to be tried that the HB bailment contracts limit or restricts its entry to the Irish ice-cream trade within the meaning of article 9 of the Order of 1987.
On the question of balance of convenience as to whether to grant or refuse HB an interlocutory injunction, I think the balance lies in HB’s favour. Mars achieved its sales target in 1989 so it has not suffered any real loss to date. On the other hand, HB’s property and contractual rights have been set at nought. If I refuse an injunction there must be a danger that other suppliers might seek to poach HB’s freezer space on the basis that an injunction was unlikely to be given against them if not given against Mars. The damage suffered by HB is incapable of calculation as also is the element of bad will created thereby between HB and the retailers. Moreover, HB objected to Mars’ conduct and there has been no undue delay in bringing the proceedings. In the circumstances I think the proper status quo to be preserved is that which existed prior to the month of June, 1989, that is to say, the state of affairs existing before the alleged wrongful conduct of Mars. On being satisfied, as I am, with the undertaking as to damages given on behalf of HB, I make the order sought in HB’s notice of motion, that is to say, the interlocutory injunction asked for in the terms of paragraphs 1, 2 and 3 of its notice of motion, and I refuse to grant the orders sought by Mars in its notice of motion.
As these are interlocutory applications, this judgment in no way finally determines the issues with which I have dealt. Therefore the costs of both motions will be reserved.
Finally, I am grateful to counsel on both sides for their detailed and helpful submissions in these cases. The fact that I have not chosen to refer specifically in the course of my judgment to any of the many authorities cited does not mean that they have been overlooked.
Marcq v Christie, Manson & Woods Ltd.
[2003] EWCA Civ 731 [2003] 3 WLR 980, [2003] EWCA Civ 731, [2004] QB 286
Tuckey LJ
It is convenient to start by referring to the auctioneer cases which Mr Palmer submitted we should put on one side as being decisions on their own facts.
In National Mercantile Bank Ltd. v Rymill (1881) 44 LTNS 767 the plaintiff was the owner of horses the subject of a bill of sale. The grantor of the bill sold the horses privately in the defendant’s auction yard and following the sale, on the grantor’s instructions, the auctioneer delivered the horses to the buyer. It was held that there had been no conversion. Bramwell L.J. said that the auctioneer:
has not claimed to transfer the title and he has not purported to sell; all the dominion he exercised over the chattels was to redeliver them to the person to whom the man from whom he had received them had told him to redeliver them.
Brett and Cotton LJJ agreed that on the evidence there had been no sale by the auctioneer. This case has been criticised, mainly for the conclusion that there had been no sale by the auctioneer.
In Barker v Furlong (1891) 2 CH 172 Romer J. decided that an auctioneer who sold and delivered goods to the buyer at auction was liable. In that case the executor plaintiffs were entitled to furniture which was sent to auction without their knowledge or consent. Some of the furniture was returned unsold to the would-be seller and no claim was made against the defendant auctioneer in respect of that furniture. But he was held liable for the furniture he sold. At pages 181/2 Romer J. said:
…. where, as here, the auctioneer receives the goods into his custody, and, on selling them, hands over the goods to the purchasers with a view to passing the property in them, then I think the auctioneer has converted the goods and is liable accordingly, ……. The general rule is that where an agent takes part in transferring the property in a chattel and it turns out that his principal has no title, his ignorance of this fact affords him no protection. I was referred to the cases of a carrier and packing agent as supporting the case of the auctioneers. But the carrier and packing agent are generally held not to have converted, because by their acts they merely purport to change the position of the goods and not the property in them.
Consolidated Co. v Curtis & Son (1892) 1 QB 495 was another case of an auctioneer who sold and delivered goods the subject of a bill of sale. Collins J. held that an auctioneer who sells and delivers is liable because he is acting as more than a mere broker or intermediary. Earlier in his judgment however at page 497/8 he said:
… it is not easy to draw the line at the precise point where a dealing with goods by an intermediary becomes a conversion. The difficulty is diminished by remembering that in trover the original possession was by a fiction deemed to be lawful … and some act had therefore to be shown constituting a conversion by the defendant of the chattel to his own use, some act incompatible with a recognition on his part of the continuous right of the true owner to the dominion over it. All acts, therefore, as suggested by Blackburn J. in his opinion …. in Hollins v Fowler which are consistent with the duty of a mere finder such as the safeguarding by warehousing or asportation for the like purpose, may well be looked upon as entirely compatible with the right of the true owner, and, therefore, as not constituting a conversion by the defendant. It may be, as suggested by Brett J. in the same case, that the test is whether there is an intent to interfere in any manner with the title of or ownership in the chattel, not merely with the possession. The difficulty is, I think, rather in drawing the true inference from facts in particular cases than in grasping the principle. There are, however, happily many cases which fall clearly on one side or other of the line. It is clear that there can be no conversion by a mere bargain and sale without a transfer of possession. The act, unless in market overt, is merely void, and does not change the property or the possession: Lancashire Wagon Co. v Fitzhugh and per Brett J. in Hollins v Fowler. A fortiori, mere intervention as broker or intermediary in a sale by others is not a conversion.
This passage emphasises the point that it is interference with the title or ownership of the chattel which counts for conversion. Thus it is the act of delivery following sale which makes the auctioneer liable in conversion since that is what interferes with the title or ownership of the goods. A sale without delivery does not have this effect and does not therefore amount to conversion.
In Willis v British Car Auctions (1978) 1 WLR 438 a car on hire purchase was sold and delivered by auctioneers on the instructions of the hirer. The main issue was whether the auctioneers’ liability was affected by the fact that the car had been sold under their provisional bid procedure. This court held the auctioneers liable. In his judgment Lord Denning said at page 442:
It is now, I think, well established that if an auctioneer sells goods by knocking down with his hammer at an auction and thereafter delivers them to the purchaser – then although he is only an agent – then if the vendor has no title to the goods, both the auctioneer and the purchaser are liable in conversion to the true owner, no matter how innocent the auctioneer may have been in handling the goods or the purchaser in acquiring them: see Barker v Furlong …and Consolidated Co. v Curtis & Son… This state of law has been considered by the Law Reform Committee … in its 18th Report (Conversion and Detinue) (1971), Cmnd. 4774 as to innocent handlers: paragraphs 46-50. But Parliament has made no change in it: no doubt it would have done so in the Torts (Interference with Goods) Act 1977 if it had thought fit to do so.
The report to which Lord Denning refers was prepared by a distinguished committee chaired by Lord Pearson. Commenting on National Mercantile Bank v Rymill at para. 41 they say:
If rightly decided, it is an authority for the proposition that a bailee escapes liability for conversion, not only where he merely redelivers to his bailor, but where he delivers at the bailor’s directions to a third party without knowledge of any adverse claim, though with knowledge that such delivery is in pursuance of a sale or other disposition.
They then discuss the rule that receipt under a purported sale would amount to conversion and justify its retention without the need for a demand:
subject to the principle that a bailee who has accounted for the goods to his bailor should be exempt from liability to any other person (para. 43).
Turning to the problem of the innocent handler they say:
46. It is clear … that there are many cases in which the existing law imposes liability in conversion upon an “innocent handler” of goods…. But it is not entirely clear which acts of a handler will, and which will not, attract this liability. It has been said that a merely ministerial handling of goods at the request of an apparent owner having the actual control of them is not a conversion and that a handling is ministerial where it merely changes the position of the goods and not the property in them.
After referring to Blackburn J’s test in Hollins v Fowler they conclude:
47. Where the handler, having received goods from an apparent owner and without knowledge of any adverse claim, merely redelivers them to the same person, we consider that all the above tests can fairly be said to have been satisfied, and we think that the same applies where the handler delivers the goods at the direction of the apparent owner to a third party without knowledge of any adverse claim or that any question of title is involved. But difficulties arise where the handler has knowledge that a question of title is involved, as where the act he is required to do is to his knowledge in pursuance of a sale or other disposition by the apparent owner to a third party. In such a case, on the authority of National Mercantile Bank v Rymill no liability attaches unless the defendant himself effected the sale as agent for the apparent owner; and, although the facts of that case hardly satisfy the test propounded by Blackburn J (whether the act done by the defendant can be said to have changed no more than the position of the goods), we do not, on a balance of the conflicting considerations involved, recommend a statutory reversal of this decision.
The auctioneer cases and the report led Jack J. to the conclusion in para. 41 of his judgment that for an auctioneer to be liable there must be a sale in which he is sufficiently involved followed by delivery to the buyer.
Mr Palmer submits that this conclusion was too restrictive. An auctioneer, for example, will be liable in conversion for misdelivery (see Jackson v Cochrane (1989) 2 Queensland Reports 23 at pages 25/26 where the English cases are referred to). There is also a suggestion in Cochrane v Rymill (1879) 40 LTNS 744 (an earlier case where this auctioneer sold horses and carriages the subject of a bill of sale) that simply dealing with goods amounts to conversion. This was a case however where the auctioneer took the goods as security for a loan to the grantor. They were then sold and delivered at auction and the loan was repaid from the proceeds of sale. I do not see anything in this case which was subsequently distinguished on its facts in National Mercantile Bank v Rymill which justifies any more extensive liability for auctioneers than the later cases establish. Nor does the fact that an auctioneer may be liable for misdelivery.
Without reference to the particular facts of this case, I agree with the judges below that the authorities indicate that an auctioneer who receives goods from their apparent owner and simply redelivers them to him when they are unsold is not liable in conversion provided he has acted in good faith and without knowledge of any adverse claim to them. Although strictly the cases do not compel this conclusion they cannot simply be put aside as Mr Palmer suggests. The auctioneer intends to sell and if he does so will incur liability if he delivers the goods to the buyer. But his intention does not make him liable; it is what he does in relation to the goods which determines liability. Mere receipt of the goods does not amount to conversion. In receiving the goods from and redelivering them to their apparent owner the auctioneer in such a case has only acted ministerially. He has in the event merely changed the position of the goods and not the property in them. This I think is a just conclusion, although I realise it may be dangerous to test issues of strict liability in this way. Nevertheless I think it would be unduly harsh if auctioneers were to be held liable in circumstances such as these.
So I turn to the particular facts of this case. The first question is how relevant are the contractual terms agreed between Mr Schuenemann and Christies? They govern his (and any buyer’s) relationship with Christies but do not and cannot affect the legal position between the claimant and Christies. What Christies may do in exercising their contractual rights may impact upon the claimant’s title but the mere existence of those rights will not.
Mr Palmer argues that this analysis is contrary to authority. He relied on Smith v Bridgend County Borough Council (2002) 1 AC 336 where a company had plant on a site owned by the council. When the company got into financial difficulties the council were entitled to use the plant but entered into a continuation contract with other contractors which, on completion of the contract passed title to the plant to and allowed them to remove it from the site. The case principally involved issues about fixed and floating charges but the House also had to decide whether the council had converted the plant. Mr Palmer referred us to Lord Scott’s judgment at paras. 73–75 where he appears to have decided that the continuation contract itself amounted to conversion. But Lord Scott was in the minority. The majority judgment was given by Lord Hoffmann with whom Lords Bingham, Browne-Wilkinson and Rodger agreed. At para. 39 Lord Hoffmann said:
The council consented to the removal of the plant by [the other contractor] in violation of the company’s right to possession. The fact that they gave such consent in advance at a time when the company was not entitled to possession can make no difference. The consent remained effective until the moment when [the other contractor] took the plant. This was sufficient to amount to a conversion.
This gives no support to Mr Palmer’s submission. I read Lord Hoffmann as saying that the conversion took place when the plant was removed and that the council were liable because it happened with their consent which had been given earlier in the continuation contract.
If the contract terms between Christies and Mr Schuenemann are irrelevant unless Christies’ exercise of their contractual rights impacted on the claimant’s title there is a simple answer to all or at least most of Mr Palmer’s main argument: there is no allegation that Christies exercised a lien or power of sale or any of their other contractual rights to the detriment of the claimant’s title; so his submissions based simply on the contract terms get him nowhere.
But lest this analysis is wrong I shall consider Mr Palmer’s submissions in more detail. Looking at the contract he says it permitted Christies to catalogue, market and expose the painting for sale. The seller was not allowed to withdraw it from the sale without Christies’ consent (clause 7(c)) and when it was unsold they were entitled to keep it for two months to try and sell it privately (clause 9(d)). All the while charges were being incurred for carriage, insurance and Christies’ expenses (clause 4) which they could require to be paid before the picture could be collected, and if they were not they could sell it (clause 9(d)). Such an intrusion on the claimant’s right to immediate possession of his picture amounts to conversion.
Mr Palmer referred us to three cases which he said supported these submissions by analogy. The first of these was Saleh Farid v Theodorou (C.A. unreported 30th January 1992) where the first defendant had entered into an unauthorised sale and leaseback of the claimant’s car to secure a loan. The second defendant finance company admitted that they had converted the car even though they had not physically possessed it. Their involvement had “rendered them parties to the deprivation of the plaintiff’s title to the car”. I do not see how this case helps Mr Palmer. Although they had not been in possession of the car the finance company had admittedly been parties to the first defendant’s conversion. The car was worth very substantially more than the amount it had been “sold” for and in any event had been pledged as security for repayment of the loan.
The second case Michael Gerson (Leasing) Ltd. v Wilkinson (2001) QB 514 CA also involved an unauthorised sale and leaseback to a finance company. The question was whether the finance company could rely on section 24 of the Sale of Goods Act 1979 which protects buyers in good faith and without notice if the goods or their documents of title have been delivered or transferred to the buyer. Lord Justice Clarke at para. 30, with which the other two members of the court agreed, said that the effect of the sale and leaseback was that the goods must be taken to have been delivered to the finance company because otherwise they could not have leased them back. At para. 36 he said it made “commercial sense to hold that such arrangements involve a transfer of constructive possession to the finance company” as the purchase of goods was commonly financed by sale and leaseback contracts. Mr Palmer says that this case shows that there may be a sale without actual delivery and by analogy offering (“hawking or touting” as he put it) for sale should also be considered as the equivalent of sale and delivery. I am perfectly prepared to accept that an auctioneer may be liable if following a sale his delivery of the goods to the purchaser may be constructive, but I think the analogy which Mr Palmer seeks to make is impossible. Offering something for sale is not a sale; nor does it involve any delivery, constructive or otherwise.
Mr Palmer’s third case was Moorgate Mercantile Co. v Finch & Read (1962) 1 QB 701 CA. There the hirer of a car on hire purchase lent the car to the second defendant who used it to smuggle watches. He was caught and the car was forfeited by Customs. The court held that the second defendant had converted the car because what he had done would in all probability have resulted in the owners being deprived of it. He was to be taken to have intended the likely consequences of his conduct. Mr Palmer says that this case shows that you can convert goods by exposing them to risk and that is what Christies did by offering the picture for sale. I do not think this case, the result of which is entirely unsurprising, justifies any such conclusion. The car was converted when it was forfeited and the defendant was held liable because that was the natural and probable consequence of what he had done.
I turn then to the terms themselves. First is what Mr Palmer called “the sealed maze” which may give Christies possession of the goods for a substantial period of time. He submits that a right to subtract and enjoy a substantial possessory portion from the claimant’s overall possessory right without his consent amounts in effect to a non-statutory exception to the nemo dat principle.
I think the simple answer to this point is that the duration of Christies’ possession is of itself of no consequence. Mere possession, for however long, is immaterial. It all depends upon what else, if anything, Christies do and if that encroaches on the claimant’s title. If, for example, the claimant had made a demand for the return of the picture which Christies refused they would be liable. But if such a demand was made by Mr Schuenemann and Christies, relying on their terms, refused, this would be of no consequence to the claimant.
The fact that Christies catalogued and offered the picture for sale and did so for reward adds nothing to the claimant’s case; that is an auctioneer’s business.
At common law an auctioneer has a lien over the goods for his costs and commission (see Williams v Millington 1 HBL 81). Under clause 9 (d) the seller is not entitled to collect his goods until all outstanding charges are met. As I have already said, in this case it is not alleged that Christies exercised any lien or similar right under clause 9 (d) over the picture. The need for such a right to be exercised was made clear by Millett J. in Barclays Mercantile Business Finance Ltd. v Sibec Developments Ltd. (1992) 1 W.L.R 1253, 1257-8 when he said:
Demand is not an essential precondition of the tort: what is required is an overt act of withholding possession from the true owner. Such an act may consist of a refusal to deliver up the chattel on demand, but it may be demonstrated by other conduct, for example by asserting a lien. Some positive act of withholding, however, is required; so that, absent any positive conduct on the part of the defendant, the plaintiff can establish a cause of action in conversion only by making a demand.
If the lien was exercised in response to a demand for the picture by the claimant there is no doubt that this would amount to conversion. In Loeschman v Machin (1818) 2 Stark 311 Abbott J. said:
If he [the hirer of the goods] send them to an auctioneer to be sold, he is guilty of a conversion of the goods; and that if the auctioneer afterwards refuse to deliver them to the owner, unless he will pay a sum of money which he claims, he is also guilty of a conversion.
This case is not however authority for the proposition that the exercise of a lien against the would-be seller would amount to conversion against the true owner. As Jack J. said there must be some doubt about this.
The other case about lien to which Mr Palmer referred was Tear v Freebody (1858) 4 CBNS 228 in which the surveyor to a parish was found to have taken possession of the plaintiff’s materials so as to obtain an unfounded lien over them. This was therefore the overt assertion of a lien against the owner of the materials which not surprisingly was held to amount to conversion and so takes the matter no further.
I turn finally to consider the submission that Christies received the picture by way of pledge because of the lien and the right to sell contained in clause 9(d).
Halsbury’s Laws of England 4th ed Reissue Volume 36 (1) at paras. 101, 103 and 104 states:
A ‘pawn’ or ‘pledge’ is a bailment of personal property as a security for some debt or engagement….
Pawn has been described as a security where, by contract, a deposit of goods is made a security for a debt and the right to the property vests in the pawnee so far as is necessary to secure the debt; in this sense it is intermediate between a simple lien and a mortgage which wholly passes the property in the thing conveyed.
The rights of the pawnee in the thing pawned are distinguishable from a common law lien in that he acquires a special property or special interest in the property pawned, whereas a person exercising a lien has only a right to detain the subject matter of the lien until he is paid, and a lien is not transferable to a third person.
Mr Palmer relied on the Australian case of A.N.Z. Banking Group v Curlett (1992) 10 ACLC 1292 where customs agents refused to deliver up goods which they were holding because they had not been paid by their customers. Their contract entitled them to a “special and general lien and pledge for monies due” over all goods which came into their possession. The bank who had a charge over the customer’s assets argued that this was not a pledge. Ormiston J. in the Supreme Court of Victoria held that it was and in doing so rejected the bank’s arguments that pledge was confined to securing a loan or other advance, that the debt had to exist at the time the goods were deposited and that the deposit had to be for the sole purpose of securing the obligation in question.
I have no difficulty in accepting these general propositions. But the first question is, whether looking at the contract as a whole, the parties have intended that the goods should be pledged. In ANZ the clearest indication of the parties’ intentions was to be found in the contract which expressly pledged the goods. There is no such expressed intention in the instant case. The deposit of the picture with Christies was for the purpose of their selling it as agents for Mr Schuenemann. If one asks whether it was also deposited for the purpose of providing security for some future debt I think the answer must be no. The court should be slow to infer such a purpose because otherwise any custodian who takes a lien over goods with a residual right to sell (as most do) would be a pledgee. Some may wish to provide expressly for this, but it should not be readily inferred from contract terms such as clause 9 (d).
Those terms themselves provide a further reason for saying that there is no pledge here. Assuming that it is possible to spell out a pledge simply from the right to sell, clause 9(d) only confers that right if an unsold Lot is uncollected 90 days after the sale or 35 days after notice to collect has been given. There is no right to sell before this time and no general right attaching to all goods as there was in ANZ. Looking at the language of section 11 (2) of the 1977 Act I do not think it can be said that Christies’ receipt of the picture from Mr Schuenemann was a “receipt of goods by way of pledge”. At the time of receipt Christies had no power of sale whatsoever.
In para. 24 I concluded that generally an auctioneer who has acted in good faith and without notice is not liable in conversion if he returns unsold goods to the prospective seller. For the reasons I have given I do not think the particular facts of this case make Christies liable to the claimant in conversion either.
Bailment
The draft amended particulars of claim allege that Christies were in breach of their obligations “as a bailee of the claimant or as a person owing the obligations of or equivalent to those of a finder, or as an involuntary or unconscious bailee”. As such Christies are alleged to have had a variety of duties which Mr Palmer summarised in his final submissions to us as follows:
A person taking possession of goods for a limited period or purpose owes a duty to take such care as is reasonable in all the circumstances to ensure that the person who delivers has the right to do so and the person to whom he redelivers the goods has a right to receive them.
Mr Palmer supports these submissions with a broad plea to the merits of the claimant’s case. His picture has been stolen. It has passed through the hands of international auctioneers who should at least have to explain why they did not discover it had been stolen. Auctioneers should have a strong interest in the provenance of high value portable items and not simply rely on their client’s word. Such standards are now expected as, for example, The Return of Cultural Objects Regulations SI 1994/501 and The British Art Market Federation Code 2000 show.
The critical question is whether any relationship of bailor and bailee or the like existed between Christies and the claimant. Such a relationship undoubtedly existed between Christies and Mr Schuenemann. But how can it be said to have existed with the claimant of whose interest in the painting Christies were wholly unaware?
Mr Palmer relied on a number of cases to say that it could. First he referred us to three cases of gratuitous bailment: McCowan v McCullogh (1926) 1 DLR 312 where a man mistakenly took the plaintiff’s suitcase from a train, Mitchell v Ealing London B.C. (1979) QB 1 where the council stored the plaintiff’s goods after they had evicted her and City Television v Conference and Training Office Ltd. (2001) EWCA Civ 1770 where the defendants came into possession of equipment stolen from the plaintiffs. Next we were referred to two cases of what Mr Palmer called constructive bailment where the interest of the owner was reasonably foreseeable: Southland Hospital Board v Perkins (1986) 1 NZLR 373, where a hospital were held to be bailees of a deceased patient’s ring and Heffron v Imperial Parking Ltd. (1974) 46 DLR (3d) 642 where the owners of a parking lot were held to be bailees of the contents of a car which was stolen from the lot. Then we were referred to Parker v BA Board (1982) QB 1004 where the rights and obligations of a finder were considered. After this flurry of citation Mr Palmer submitted that there was no case since the war in which someone in the position of bailee or the like had not been found subject to some duty.
But this begs the question: duty to whom? None of these cases sheds light on the critical question in this case. Christies were not a gratuitous or involuntary bailee. There was no doubt as to what they were bailees of and they were not finders. They believed they were bailees for reward of Mr Schuenemann and no-one else.
Support for the view that a bailee must have some knowledge of the existence of his bailor is to be found in the Pioneer Container where at page 342 Lord Goff said:
Their Lordships wish to add that this conclusion … produces a result which in their opinion is both principled and just. They incline to the opinion that a sub-bailee can only be said for these purposes to have voluntarily taken into his possession the goods of another if he has sufficient notice that a person other than a bailee is interested in the goods so that it can properly be said that (in addition to his duties to the bailee) he has, by taking the goods into his custody, assumed towards that other person the responsibility for the goods which is characteristic of a bailee. This they believe to be the underlying principle.
Mr Palmer rightly submits that the House of Lords was not concerned with the position of a bailor who sub-bails the goods without the owner’s authority. Nevertheless the statement emphasises the obvious, which is that if you are to owe duties to someone else you should know or at least have some means of knowing of his existence. We have not been referred to any authority to the contrary.
Mr Palmer placed considerable reliance on the decision of Staughton J. in AVX v EGM (unreported 1/7/82). In that case the defendants had agreed to the return of defective spheres of solder which they had manufactured for the plaintiffs. By mistake, as well as returning the defective solder in one box, the plaintiffs returned twenty-one boxes of capacitors which were as the judge said ” finished goods which could not, by any stretch of imagination, be said to look remotely like solder spheres”. The defendants set about scrapping the capacitors in the mistaken belief that they were their own property and mixed them with the rejected solder spheres so that it became uneconomic to retrieve them. The judge held that they were liable as unconscious bailees whose duty before dealing with the goods was to “use what is in all the circumstances of the case a sufficient standard of care to ascertain that they truly” were their own goods.
On the facts of that case I should have thought that there would have been no difficulty in establishing negligence without invoking any relationship of bailor and bailee. A person, who destroys goods which are self-evidently not his in the mistaken belief that they are, must be liable. In the instant case Christies asserted no personal rights of ownership over the picture and after it went unsold simply returned it to Mr Schuenemann from whom they had received it in the first place. So I do not think that AVX is authority for the proposition that an agent who receives goods from someone who is their apparent owner and later returns them to him owes any duty to their true owner to investigate title in the absence of anything to put him on enquiry.
Mr Palmer’s proposed duty has far reaching implications, not only for auctioneers but also for other custodians such as warehousemen and carriers whose position has been clear since
TRM Copy Centres (UK) Ltd & Ors v Lanwall Services Ltd
[2008] EWCA Civ 382 [2008] 4 All ER 608, [2008] 2 All ER (Comm) 1021, [2008] EWCA Civ 382, [2008] Bus LR 1231
Thomas LJ
Bailment
It was accepted on behalf of TRM that there was a transfer of possession to the Retailer under the terms of the Location Agreement; hence a bailment was created.
Bailment was once the subject of much learning, particularly in the late eighteenth and early nineteenth centuries, following the decision of Chief Justice Holt in Coggs v Bernard (1703) 2 Ld Raym 909. Professor Palmer, as editor of the section on bailment in Halsbury’s Laws of England (4th edition) Volume 3 (1) (2005 reissue), sets out at paragraph 2 the five classes of transaction that have been categorised as falling within the definition of bailment.
“(1) the gratuitous deposit of a chattel with the bailee, who is simply to keep it for the bailor;
(2) the delivery of a chattel to the bailee, who is to do something without reward for the bailee to or with the chattel;
(3) the gratuitous loan of a chattel by the bailor to the bailee for the bailee to use;
(4) the pawn or pledge of a chattel by the bailor to the bailee, who is to hold it as a security for a loan or debt or the fulfilment of an obligation; and
(5) the hire of a chattel or services by the bailor to the bailee for reward.”
That classification is derived from Coggs v Bernard and the classic works: Sir William Jones’ late eighteenth century synthesis of the common law, Roman and civil law: Essay on the Law of Bailments, (Ibbetson edition 2004); Chancellor Kent’s early nineteenth century Commentaries on American Law; and Joseph Story’s Commentaries on the Law of Bailment written in 1832. However, as is noted by Professor Palmer at paragraph 2 of Halsbury’s Laws, modern authority now recognises many variations on these basic models of bailment and many examples that do not fit precisely into these categories. For example, as Professor Palmer points out at paragraph 2 of Halsbury’s Laws and in Palmer on Bailment (second edition, at page 132), certain modern kinds of bailment such as contracts of hire purchase and conditional sales which arise by virtue of a title retention clause do not readily fall within the standard classification. Yet, as set out, bailment by way of hire is a long established category.
A bailment by way of hire
Neither the terms of s.15 nor of s.189 of the Act state in terms that the bailment must be by way of hire. However, the use of the term bailment juxtaposed with hire leads, I think, to the inevitable conclusion that Parliament was intending to encompass within the statutory definition the category of bailment by way of hire. It is clear from the Crowther Report on Consumer Credit (1971) that for some purposes that Committee regarded long term rental agreements for consumer goods (a bailment by way of hire) as if they were credit transactions (see paragraph 2.4.56). It was no doubt for such reasons it was decided to make provision in the Act for such transactions. I agree with the views of Professor Goode in Consumer Credit Law and Practice at paragraph 23.75 that s.15 of the Act was concerned solely with bailment by way of hire.
It was not disputed that a bailment by way of hire under s.15 of the Act must include a right of the bailee to use and enjoy the goods, an obligation to return the goods at the end of the period and to pay or provide a reward. The obligation to pay or provide a reward needs more detailed discussion.
The need for payment or other reward
Although the terms of s.15 of the Act were wide, the Judge noted that it was not argued for Lanwall that a gratuitous bailment, namely a bailment under which no consideration was provided by or on behalf of the bailee, could in itself amount to a consumer hire agreement; he considered that the provision in s.15(1)(c) clearly pointed to that conclusion. The judge expressed the view that to the extent the decision of the Epsom County Court in Proudfoot v Cheam High School [2001] CLY 902, relying on s.79(2) of the Act, expressed a contrary view, it was wrongly decided.
It was common ground on the appeal that a gratuitous bailment was not a hire agreement within s.15 of the Act; payment to the bailor was needed. Although in s.79 of the Act, a provision dealing with the obligation to provide the hirer under a consumer hire agreement with information, sub-section (2) provides that the obligation does not apply to an agreement under which “no sum is or will or may become payable by the hirer”, that provision, as the judge rightly held, refers to the position at the time the request is made; it has no other effect. In my view, the use of the term hire in s.15 of the Act plainly implies payment or, as I discuss at paragraph 20, reward, and this is made clear by s.15(1)(c).
Furthermore it has always been clear that a contract of hire is one requiring payment (or reward): see the judgment of Holt CJ in Coggs v Bernard at 913, Jones paragraphs 56 and 117, and Story (paragraph 374, 9th edition 1878). Professor Goode also expressed the view that payment was required. The common position adopted by the parties was plainly right.
The conclusion that the requirement of payment, in addition to the transfer of possession, is necessary if a transaction is to be held to be a hiring of a chattel was implicit in the decision of Sir Andrew Morritt in Britax International v Commissioners of Inland Revenue [2001] STC 1652. It was in this case that the term “stipulated payment” to which Flaux J referred was used. In reaching his conclusion, Sir Andrew Morritt relied upon the definition of a hire of chattels in Halsbury’s Laws of England and the New Shorter Oxford English Dictionary:
“26 In Frazer v Trebilcock (1964) 42 TC 217 one issue was whether the car acquired for use in a driving school was provided wholly or mainly for hire to or for the carriage of members of the public. The Commissioners considered that it was. Buckley J disagreed. He referred to the definition of a hire of chattels in Halsbury’s Laws of England namely:
“a contract by which the hirer obtains a right to use the chattel hired in return for the payment…The proprietary interest in the chattel is not changed, but remains in the owner. But upon delivery the hirer becomes legally possessed of the chattel hired, so that if it is lent for a time certain, even the true owner is debarred during that time from resuming possession against the will of the hirer…”
He concluded (page 227) that there was no contract of hire because the pupil
“never obtained any right or interest in the car of a kind which could be said to amount to a hiring.”
…
27 The normal meaning of hire is, in my judgment, to obtain from another the temporary use of a chattel for a stipulated payment. See New Shorter Oxford English Dictionary (1993) Ed. The concept involves obtaining the right to possession of the chattel for the period of the hire to the exclusion of the hirer. See the definition quoted in paragraph 26. I can see nothing in the terms of Chapter III of Part II of Capital Allowances Act 1990 to suggest that the concept of hiring to which s.35(2) applies is so limited as to give rise to any of the exclusions for which Britax or Standard Chartered contend.”
The Court of Appeal upheld the approach of Sir Andrew Morritt by concluding that there were no distinctions to be drawn between the legal concept of hiring and the commercial concept of hiring and endorsed his construction: see Jonathan Parker LJ at [2002] EWCA Civ 806 at paragraphs 69-75.
The absurdity of the contrary argument is pointed out in an article in [1979] CLJ 180 by Professor Palmer and Professor Yates (as they now are). They point out that if a gratuitous bailment was a consumer hire agreement, a person who persuades a neighbour to look after his budgerigar for six months whilst he visits relations in Australia might find that the agreement was within s.15; so also would be the free loan of a book for a period of time.
I accept, as contended by Lanwall, that although the bailee will generally make payment in money, an agreement could be a hire agreement if, instead of money being paid, there was some other form of reward or recompense (the terms used by Holt, Jones, Kent and Story) or a quid pro quo …the term put forward by Lanwall as used Atkinson J in McCarthy vBritish Oak Insurance [1938] 3 All ER 1 at page 4 in his description of a contract for hire). The use by Sir Andrew Morritt of the term “stipulated payment” was not, in my view,intended as an exclusive definition of the form of reward required under a bailment by way of hire. An agreement has always been regarded as an agreement for hire whether there is payment in money or some other form of reward or recompense: see Jones (paragraph 124), Story (paragraph 377) and Palmer (page 1209).
The view that, provided that there is a reward, it need not be in money is carried through into modern legislation: see s.6 of the Supply of Goods and Services Act 1982 where a contract of hire is also defined.
“6 The contracts concerned
(1) In this Act [in its application to England and Wales and Northern Ireland] a “contract for the hire of goods” means a contract under which one person bails or agrees to bail goods to another by way of hire, other than an excepted contract.
(2) For the purposes of this section an excepted contract means any of the following:-
a) a hire-purchase agreement;
b) a contract under which goods are (or are to be) bailed in exchange for trading stamps on their redemption.
(3) For the purposes of this Act [in its application to England and Wales and Northern Ireland] a contract is a contract for the hire of goods whether or not services are also provided or to be provided under the contract, and (subject to subsection (2) above) whatever is the nature of the consideration for the bailment or agreement to bail by way of hire.”
Although this is a later enactment, it confirms that Parliament, in modern legislation, did not intend to alter the traditional view that the reward need not be only in money.
Lanwell also relied on the definition of “hire purchase agreement” in s.189 of the Act which made specific reference to the requirement for periodical payments in this type of transaction:
“an agreement, other than a conditional sale agreement, under which
(a) Goods are bailed or (in Scotland) hired in return for periodical payments by the person to whom they are bailed or hired and …”
It was submitted that, if it had been intended that a consumer hire agreement was confined to cases where periodic or other payments were made, it would have been easy to make a similar provision in the definition in s.15 of the Act. Although as I have stated above, a hiring can be for a reward that is not monetary, I do not consider this follows by making a contrast between s.15 and the definition of hire purchase; that the reward can be other than in money is implicit in a bailment by way of hire.
Thus it is clear in my view that a hire agreement under s.15 of the Act must include terms for payment or the provision of other reward by the bailee.
The relevance of the purpose and nature of the payment or the reward.
It was argued, however, on behalf of TRM that if the agreement was to be a hire agreement within s.15 of the Act it was not enough that there be a simple provision for payment by the hirer; it had to be clear that the purpose of the payment was for possession of the goods as opposed to the use of the goods. Thus in the case of a copier, if the payment was a periodic rental for the possession of the copier at the premises, the agreement was a hire agreement; but if the payment was calculated on the basis of the numbers of copies made, then it was not a hire agreement.
I cannot accept that contention. The essence of hire is the right to use the goods bailed; if so, then payment for possession as opposed to use cannot be a factor that distinguishes a hire agreement from other forms of bailment. If payment is made by reference to use, and it is use by the hirer that distinguishes a hire agreement from other types of bailment, then payment by use would point to the contract being a contract for hire. If, for example, possession of a car is taken under an agreement that payment is to be made on the basis of use at a given rate per mile, that would be a hire agreement, even though payment was related to use.
Lanwall’s contention was much simpler; it did not contend that the purpose of the payment or other reward was relevant. It contended that all the elements of bailment by way of hire were present in the Location Agreement. It was not in issue that there was a transfer of possession to the Retailer nor that the Retailer had to return the copier at the end of the period of the agreement. Furthermore the Retailer was entitled to use the copier. Finally the agreement provided for a reward either through payment by the Retailer to TRM or by means of a quid pro quo provided by TRM to the Retailer; all that was necessary was that there be payment to the person who had bailed the goods by the person who had possession of them. Even if no payment was made, the Retailer nonetheless provided a reward in the form of a quid pro quo, as he had agreed to provide TRM with space in the shop or sub-post office for the copier which his customers could use for a specified period; that space would otherwise have been used to sell other goods.
Nor can I accept that contention. In my view, the nature of the payment and how it was made and the nature of the quid pro quo are all relevant to the issue of whether the agreement is a hire agreement. The terms of the Location Agreement have to be more carefully examined.
Under the Location Agreement, it is clear, in my view, that although the photocopier was transferred into the possession of the Retailer, the Retailer was not paying for it to be located in his possession at his shop or sub-post office. On the contrary it was TRM who undertook to pay the Retailer a commission for the use of the space in his shop or sub-post office and for accounting for the monies that were paid. In return, what the Retailer was required to do was to provide space for the machine and account to TRM for the sums paid for the use of the machine by any user at the rate specified by TRM. This was not therefore a bailment where the bailee paid or provided a non-monetary reward either for use or possession of the goods bailed. Although the copier was bailed to the Retailer, as bailee, he was paid commission on the funds collected for the use of space and for the collection of the funds. Such an agreement cannot possibly therefore be characterised as a conventional bailment by way of hire. Is it nonetheless a hire agreement within s.15 of the Act, as Landwall contend, because the Retailer has possession, he in fact would make payments which were derived from the use of the copier and, even though there was no minimum payment, he provided a reward to TRM by making space available for the copier?
The commercial purpose and nature of the Location Agreement
In my view that question is answered not by seeking to place the Location Agreement in a defined category of conventional transactions, by adding together a separate classification of each of the obligations under the Agreement, but by asking whether the Location Agreement given its commercial purpose can be properly described as a hire agreement as defined by s.15.
This was essentially the approach taken by the Lord President, Lord Hope, when giving the judgment of the Inner House in Eurocopy (Scotland) plc v Lothian Health Board [1995] SLT 1356. Eurocopy supplied the Health Board with a copier free of charge on the basis that it was paid for a minimum monthly copy volume of 11,000 with additional copies being charged at the same rate of 4.6p per copy. The Health Board was required to purchase photocopy paper from Eurocopy and therefore had to purchase paper every month to satisfy the minimum copy volume. A pleading issue as to the nature of the contract arose on the way the case was pleaded by Eurocopy. The Health Board contended that it was not a hire agreement as the word hire was not used in the agreement and there were no charges for the hire of the machine; it was an agreement for the supply of paper. The Sheriff Principal concluded it was a contract of hire with the cost of the hire being determined by the amount of use made, subject to an agreed minimum. In dismissing the appeal Lord Hope’s conclusion in respect of the Board’s contention, arrived at by a detailed analysis of the terms of the contract, that it was a contract for the supply of paper was set out at page 1360:
“It seems to us however that the result of this analytical approach to the meaning of the contract is far removed from its commercial reality. In Antaios Compania Naviera SA v Salen Rederierna AB at [1985] AC, p 201D, Lord Diplock said that he agreed with a passage in the arbitrators’ award in which they stated that a construction should be given to the withdrawal clause in the charterparty which did not defeat the commercial purpose of the contract. He then added these words: “I take this opportunity of restating that if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made to yield to business common sense.
Common sense tells us that what this agreement was really designed to do was to regulate the terms and conditions upon which the pursuers were to supply the defenders with the photocopiers.”
After reviewing the terms of the agreement, Lord Hope continued:
“We agree with senior counsel for the pursuers that it would be to turn the agreement on its head to regard it as a contract for the supply of unused paper. Prima facie it is a contract for the hire of the equipment which the pursuers have agreed to supply and service. All the essential elements of a contract for the location of corporeal moveables are present in this agreement.”
Lord Hope then referred to the principles of Scottish law relating to contracts of location of corporeal moveables and continued:
“In this case what the pursuers have chosen to do is to obtain their return by means of a charge which is related to the volume of copies made by the use of the machines. In cl 3 (a) the user is taken bound to purchase the agreed minimum monthly copy volume quarterly in advance at an agreed price. This is in effect a standing charge, measured by a formula which assumes that a minimum volume of copies each month will be produced by the use of the equipment. The fact that the pursuers’ return is calculated by an assumed throughput is consistent with their argument that this is the consideration for the supply of the photocopiers, and that the contract should be interpreted as one for the hire of these machines. It does not require the agreement to be read as a contract for the sale of quantities of unused paper.”
Lord Hope added that he considered that the argument was in any event sterile because it was not necessary to attach any label to the agreement.
I agree with the approach of the Inner House. It is necessary to look at the commercial purpose of this agreement and ask the question, “Is this a contract of hire?”
The essential nature of the agreement was:
a) The copier was placed by TRM in a small shop or sub-post office and possession transferred to the Retailer for a defined period of time; the space otherwise available to the Retailer for selling goods was thus made available to TRM.
b) The copier was available for use by the customers and the Retailer, but no one was bound to use it.
c) Payments were made by any person who used the machine; the Retailer accounted to TRM, as owner and bailor, for those monies. The fact that the sums were computed by reference to the number of copies made on the copier rather than by reference to the monies actually received made no difference; it was plainly the sensible way to account as there would be no argument as to the sum due. Clause 4 was an accounting clause and not a clause under which the Retailer was bound to make pre-determined payments.
d) The Retailer was entitled to deduct the agreed commission as his reward for this work and making the space available.
e) The Retailer made no payment unless, like a customer, he used the machine. There was no obligation on the Retailer to make any minimum payment; if, like a member of the public, he used the machine, he paid for the copy, getting a proportionate part back.
It is of course possible to take the points made by Lanwall – the transfer of possession, the fixed period, the ability to use and the reward – and then to attempt to draw a conclusion that it is a hire agreement on the basis that each of the elements can be said to be present. However, although there was a transfer of possession for a defined period, the terms as to use and reward are not those to be found in a conventional hire agreement for the reasons I have set out. Approaching the matter more generally, it is clear, in my view, that the Location Agreement is a commercial arrangement for placing a copier in a shop or sub-post office under which the owner of the machine pays the owner of the shop or sub-post office a commission based on the use made of the machine by the shop’s customers. In any ordinary and commercial sense of the word, the Retailer is not hiring the machine; he is providing space in the shop for the owner of the machine to install the machine from which they will jointly hope to make money.
Conclusion
Although there was a bailment, it was not a bailment by way of hire and therefore not a hire agreement within s.15 of the Act. It was a species of bailment that can be recognised as one developed by the modern practice of placing machines on premises primarily for use by persons other than the owner of the premises. This type of arrangement can take many forms, but where the owner of the machine and the owner of the premises enter into an arrangement where the owner of the machine bails the machine to the owner of the premises who is paid a commission on its use, it will generally not be that form of bailment known as a bailment by way of hire. In this case it was not a bailment by way of hire. It is another variant of bailment which cannot be readily fitted into the categories developed by Holt CJ, Jones, Kent and Story; the law of bailment (as was pointed out by Turner J in New Zealand in Motor Mart v Webb [1958] NZLR 773 at 780) like any other part of the common law makes incremental developments in this way.
In my view, therefore, the judge was right to conclude in answering the preliminary issue that a Location Agreement made with a Retailer who was an individual was not a consumer hire agreement as defined by s.15 of the Consumer Credit Act 1974 as amended.
Lord Justice Hooper:
I agree.
Sir Mark Potter:
I also agree.
Sheila Flannery v Margo Forbes Dean, ISPCA and Meath Branch of ISPCA
1994 No. 7214P
High Court
2 February 1995
[1995] 2 I.L.R.M. 393
(ex tempore) (Costello P)
COSTELLO P
delivered his judgment on 2 February 1995 saying: These proceedings arose out of the fact that the plaintiff (Ms Sheila Flannery) suffered what was clearly a financial disaster in December 1993. Her lands at Dunboyne were sold and she found herself with no accommodation for her horses, for which she claims a strong fondness.
Arising from what was a critical situation, the plaintiff endeavoured to make arrangements for the maintenance of her horses and to this end she contacted Ms Carol Benson, with whom she was acquainted. Ms Benson was the licensee at Killeen Castle, County Meath, where she carried on a riding establishment and where there were stables and fields, and an agreement was reached between the plaintiff and Ms Benson by which Ms Benson took care of some of the plaintiff’s horses.
There is confusion in this case as to the exact number of horses that were given to Ms Benson but I do not think that it is necessary to elucidate this point because it is agreed that initially either 20 or 21 horses arrived at Killeen Castle and that a further horse subsequently arrived there. There is obviously a very serious dispute in relation to what happened to the other four horses. There is evidence that a Mr Byrne took away a horse because he had not, he claimed, been paid by the plaintiff and was using this method to obtain payment. But these are matters which do not concern this case and I have deliberately refused to allow evidence to be given in relation to them.
There is also a dispute between Ms Benson and the plaintiff as to the terms of their agreement. As to the facts and recollections of what occurred in relation to this dispute, I do not think that the plaintiff is a reliable witness and I prefer Ms Benson’s evidence to that of the plaintiff. I think that the plaintiff’s memory is very distorted as a result of the traumatic experience of her financial disaster. The agreement with Ms Benson was to the effect that 13 horses were to be on grass and that seven were to be on full livery, the plaintiff agreeing to provide feeding and hay and to pay for their accommodation.
What happened thereafter is a matter of very serious dispute. On 25 February 1994 the gardaí came out to Killeen Castle with Mrs Dean and a veterinary surgeon, and I am quite satisfied that the horses were in a very bad condition on that date. There was a dispute as to who was to blame for the very poor condition of the horses but I am quite satisfied that the fault did not lie with Ms Benson. The recollection of Mrs Dean in relation to this dispute is also not accurate because it is quite clear that it was she who contacted the gardaí. The evidence which I heard today indicates that Garda Fitzgerald was contacted by Mrs Dean and that he then went out to Killeen Castle as a result of what Mrs Dean told him. At that time there were 16 horses at Killeen Castle. I accept Mrs Dean’s evidence as to what happened on this occasion and I accept the evidence of the witnesses called on behalf of Mrs Dean and the Meath Society as to the condition of the horses.
The issue in this case is whether Mrs Dean was entitled to remove the horses from Killeen Castle. Before returning to that issue I should refer to the fact that District Judge Brophy, who was contacted about the situation that had arisen, played a very important role in trying to deal with it in a sensible and informal way by seeing the plaintiff and Mrs Dean, and it is greatly to be regretted that his advice was not taken. On 25 February 1994 Mrs Dean wrote to District Judge Brophy and stated:
I have today seen 16 large TB X brood mares, most heavy in foal. They are confined on mud only, absolutely no grazing whatever.
There is a civil case to answer. My only brief is the welfare of the animals. The vet, Brendan Barry, MVB, MRCVS, of Drogheda, has said our society *396 must take these animals into immediate care or they will not survive. One at least may already be in a terminal state.
I will arrange livery, feeding and insurance etc. for the guards pending this case.
According to that letter what Mrs Dean was doing was arranging to look after the animals for the gardaí pending the hearing of the case. The gardaí brought a prosecution against the plaintiff and on 27 April 1994 the case against her was dismissed. The situation at that time was that some of the mares had already foaled. The position is that Mrs Dean and the Meath Society now have 15 horses and three foals belonging to the plaintiff. I am quite satisfied that the death of one of the horses and of three of the foals was not the responsibility of these defendants. However, this case does not end there.
Following the District Court proceedings the plaintiff was in negotiation with a Mr Beatty of Dunlavin. Mr Beatty did not know the plaintiff but had obliged her on the basis that she was in urgent need of a place for some of her horses. On 2 April 1994 the plaintiff left seven yearlings with Mr Beatty which were to be collected by the plaintiff to be put out on grass within a few weeks but they were left with Mr Beatty without payment and he found himself with seven yearlings in a most unsuitable place. As a result of contacts that were made, Mr Beatty saw Mrs Dean and wrote to her at her request indicating that he was surrendering these seven animals in good condition to the Wicklow Branch of the ISPCA and that the money which was owed to him by the plaintiff for looking after the animals had been paid in full by the society. Mr Beatty was very worried about the legal right of giving the horses to the society and he asked that they get legal advice on the matter. When the society came to take the horses from Mr Beatty he assumed that they had obtained legal advice and he gave the horses to Mrs Dean.
The third matter to be considered in this case relates to horses left by the plaintiff at Mr Patrick Kavanagh’s stables at Brittas Lodge. In November 1993 an agreement was drawn up for the renting of some stables at Brittas Lodge. This agreement was handed in by the plaintiff in the course of this hearing but the effect of it is not relevant to what I have to decide. The plaintiff was entitled to rent these stables for a number of her horses, including a stallion, some foals and a gelding.
A very considerable difference of opinion arose in relation to this third matter. The foals were removed from Brittas Lodge but the gelding and the stallion were left there, and a dispute arose between Mr Kavanagh and the plaintiff in relation to payment. Mr Kavanagh says that he was trying to get the plaintiff to take her animals away, particularly the stallion, and that on 17 March he gave her five days to remove the stallion from his premises. In the course of this case I indicated to the plaintiff that I was not deciding who was right in relation to the *397 dispute about payment because the situation was this: Mr Kavanagh was entitled to ask the plaintiff to take her stallion from his premises. He may or may not have had a good reason for doing so but he was entitled to make that request. Instead of complying with Mr Kavanagh’s request, the plaintiff left the stallion in his possession when he wanted to end his arrangement with her. Mr Kavanagh then wrote a letter dated 12 May 1994 requesting Mrs Dean to take the stallion. What this letter amounted to was a letter of authorisation to Mrs Dean to take the stallion.
I would now like to say this: The plaintiff has spent her life looking after horses and breeding them and I think that she is a person with a deep love of horses. Mrs Dean has also spent many years of her life looking after the welfare of animals, particularly the welfare of horses. I am quite satisfied that Mrs Dean acted out of her love of horses and out of concern for their welfare, and I find it reprehensible that the plaintiff should use this Court for the purpose of casting aspersions on Mrs Dean’s character and by suggesting in particular that Mrs Dean was trying to sell her horses presumably to make money for herself. Mrs Dean acted as she did out of the highest motives but I think that she acted wrongly in law. I do not think that Mrs Dean had any legal right to do what she did. The position is that there is rather inadequate law in existence in relation to animals that stray and trespass, and it is the Protection of Animals Act 1911. There is also rather inadequate law in relation to the pounds kept by local authorities under the 1935 statute (the Pounds (Provision and Maintenance) Act 1935) and the regulations made thereunder. I think that Mrs Dean understood the situation facing her on 25 February 1994. I think she understood that the animals should be brought to the local authority pound. However, Mrs Dean was of the opinion that the animals could not be looked after properly in the pound because it was in disrepair. That may or may not have been so, but the situation is that Mrs Dean felt that she could not let the horses go into the pound. And Mrs Dean’s letter to District Judge Brophy indicated that she was arranging for the feeding and care of the horses for the gardaí pending the hearing of the case. As I have said, there is no doubt that Mrs Dean acted out of her concern for the welfare of the horses, but she had no right to keep them contrary to the wishes of the plaintiff. Mrs Dean’s remedy, if there was a need to apply one in the circumstances, was to involve the local authority in putting the horses into the pound pending the hearing of the case for cruelty against the plaintiff.
I have now to consider the legal submissions and the authorities to which I have been referred. I do not think that the quotation from p. 91 of Bell’s Modern Law of Personal Property in England and Ireland assists the defendants in this case. It deals with a situation in which a bailee may possess the goods of a bailor and where consent is required for the possession of the goods to be lawful and where the bailee must have authority from the bailor. It then goes on to refer to authority to hold the goods by the operation of law and deals with a situation *398 where the owner of goods has not given consent but where the bailee is entitled to hold the goods lawfully, for example, where a person may get possession of property under a court order and be bailee without the consent of the owner of the goods. The author goes on to refer to a number of cases in which he suggests that some sort of operation of law can arise, for example, where a person takes a watch from a drunken person; where a hospital takes jewellery from a mental patient; where goods are taken from a burning house. Those examples are very distant from the present case. Here there were three different contracts which gave no right to Ms Benson, Mr Beatty and Mr Kavanagh to pass title to a third party. They could have terminated their contracts with the plaintiff by contacting her. If they had been unable to find the plaintiff they could have informed the gardaí that they were going to require the local authority to operate its powers under the law, but they had no authority to pass any right of possession in the goods to any third party.
In the salvage case to which I have been referred (China-Pacific v. Food Corporation of India [1982] AC 939) a completely different situation arose. There is no question of an agency of necessity arising in this case because the contracts between the plaintiff and Ms Benson, Mr Beatty and Mr Kavanagh did not permit them to pass title in the goods to a third party. Great Northern Railway Co. v. Swaffield (1874) LR 9 Exch 132 is a case in which a bailee was required to take action for the safety of a chattel, which is a perfectly understandable principle in relation to the duties of a bailee. Tappenden (Trading as English & American Autos) v. Artus [1963] 3 All ER 213 seems to me to relate to what a bailee may do in certain circumstances. The implied rights and duties of a bailee are well established and I find that these cases do not support the argument that the defendants were entitled to take lawful possession of the horses. As I say, Mrs Dean and the Meath Society acted out of concern for the welfare of the animals but I think that they did not act legally.
I now wish to make certain findings. I am quite satisfied that Mrs Dean was acting on behalf of the Meath SPCA, an unincorporated association, that is to say, each of its members are liable if it could be shown that acts had been done on behalf of the members of the association. I find that the Meath SPCA is properly joined as a defendant in this case as Mrs Dean was acting on its behalf. The situation is different in relation to the ISPCA, which is also an unincorporated association. It could have been sued if Mrs Dean had been acting on its behalf. However, as Mrs Dean was acting on behalf of the Meath SPCA, which is a different unincorporated association, the plaintiff has not got any claim against the ISPCA. I must therefore hold that the plaintiff is entitled to the return of the horses which the Meath SPCA now have in their possession.
In this case I decided that I would first deal with the legal position arising from the events which led to these proceedings. On that part of the case I came to the conclusion that the plaintiff’s horses were taken without legal title to them *399 from the three places where they were being kept. That being so, then technically a claim for damages would arise, and I have now heard submissions and evidence on the question of damages.
Since the beginning of this case the plaintiff has maintained that she suffered very considerable loss from the wrongful acts of which she complained. On 12 December 1994 she wrote a letter to the defendants setting out in detail total losses of £360,000. As the court gives assistance to persons who are appearing for themselves, I would not have hesitated to adjourn this matter if I had thought that there was the slightest injustice being done to the plaintiff. However, I am absolutely satisfied that no injustice is being done by deciding this case today. The first point I would like to make is this: The date for the hearing of this case was fixed before Christmas and the plaintiff has had a considerable time in which to prepare her case. Had the plaintiff had any witnesses to back up her claim for damages, I am quite certain that she would have been fully capable of having them in court when this case started.
The second point I would like to make is this: I have already said that I find the plaintiff to be a completely unreliable witness and I think that the basis on which her claim is advanced is pure fantasy. It has no basis in reality. Her suggestion that she would have earned £50,000 in fees from the stallion is incredible. It is just not true. I am not saying that she is deliberately telling me lies but that she is not capable of telling the truth. When I do my best to help a lay litigant who is not telling me the truth, I cannot allow a case to go on. In this case I cannot allow the defendants to be subjected to a further day’s hearing. I am quite satisfied that I cannot accept a word of the plaintiff’s evidence on the loss claimed by her and I must accordingly hold that she has failed to establish that she suffered any damage. Apart from not accepting the plaintiff’s evidence, I would find it extremely difficult to see how she could prove any loss. It is quite clear that she could not have sold her horses in February 1994 and for many months after February. As the horses have been considerably improved under the care and attention of Mrs Dean, I can find no basis on which the plaintiff can claim for loss of sale of some of her horses. In relation to the plaintiff’s claim for loss of stud fees, I find that this claim is also pure fantasy. I do not accept that she had land rented in Galway. I do not think that she had any land available on which the stallion could stand and I do not think that she had mares available for servicing. I must therefore hold on the evidence before me that that part of her claim is unsustainable. I also cannot hold that the claim relating to the foals properly arises. The claim for loss of stock is, again, a matter that is impossible to substantiate, and the claim of £150,000 for disruption of a special breed is pure nonsense and fantasy. I am quite certain that the plaintiff has been under a great deal of strain and, expressing a layman’s view, perhaps the strain has caused the way in which the plaintiff’s evidence has been given over the last three days. Be that as it may, I cannot award the plaintiff any damages under *400 this heading because I am quite satisfied that it was brought about by the problems she cited, which had nothing to do with the particular legal issue in this case. I must therefore hold that the plaintiff is not entitled to any special or general damages.
All that remains is the question of costs. In the exercise of my discretion I do not think that I should award the plaintiff any costs against any of the defendants. Had the plaintiff behaved in a reasonable way when District Judge Brophy was attempting to settle the case between the parties, this case need never have come on. Even though the defendants have lost the legal issue, it would be an injustice to them to ask them to pay the plaintiff’s costs. In the circumstances I will make no order for costs in relation to Mrs Dean and the Meath SPCA.
M’Neill v Millin & Co., Ltd.
High Court of Justice.
King’s Bench Division.
13 November 1905
[1906] 40 I.L.T.R 91
Lord O’Brien L.C.J., Madden, Wright JJ.
Lord O’Brien, L.C.J.
The plaintiff at the trial rested his case on negligence, in that the defendants did not take due care of the car. Such negligence has been negatived by the jury, but certain additional findings seem based on that portion of the evidence I have read. Without considering the answers to the earlier questions submitted to the jury, I confine myself to questions 4, 5, and 6. [Reads questions.] I emphasise “for him” in question 4. Now, what do these findings amount to? That there was a representation made of a certain condition of facts said to be existing in point of fact; that they represented that the motor car was in fact insured. Now, I think there was a duty when the question as to the motor being insured was asked to answer truly, and I think that in this case negligence was established, and it is found here by the jury. The answer to question 6 shows that the representation made was the efficient cause, the causa causans, or the approximate cause of the plaintiff not having insured his motor car. You have then a representation of a fact plainly intended to be acted upon, you have negligence in making the representation and the representation acted upon, it being the proximate cause of the defendant abstaining from insuring the car himself. [Refers to Freeman v. Cooke, 2 Exch 654 and Carr v. L. & N. W. Ry. Co., L. R. 10 C. P. 307.] Now, in this present case you have the very thing which was not in that last-named case, for you have here a finding that the representation was the efficient cause of the plaintiff’s course of action. Therefore the defendants must make good the representation—namely, that the motor car was insured, that it was insured for the benefit of the plaintiff, and that the money obtained under such insurance is held by them for the plaintiff. Therefore the plaintiff is entitled to succeed.
Madden, J.
I concur in holding that the defendant must make good his representation to the plaintiff. Counsel for the defendant argued that estoppel is only a rule of evidence, and that the agreement as to insurance by the defendants was at most a nudum factum. The answers, however, to questions 5 and 6 render the defendants clearly liable. The defendants were not under any duty to insure, but they were under a duty to answer truly as to the fact of their having insured the car. The plaintiff has altered his position for the worse, and, therefore, the case is brought within the principle in the leading case.
Wright, J., concurred.
M’Neill v Millin & Co., Ltd.
Supreme Court of Judicature.
Court of Appeal.
3 May 1906
[1906] 40 I.L.T.R 154
Walker L.C. FitzGibbon Holmes L.JJ
Walker, L.C.
The conversation between the plaintiff and the defendants’ manager had the effect of supplying a new term in the original contract—namely, that on and after Oct. 27, 1904, the car should be held on the terms that the defendants would keep it insured while at their works. The findings of the jury are quite sufficient to establish this fact. The appeal must be dismissed.
FitzGibbon, L.J.
I concur. As between bailor and bailee all rights and liabilities are founded on contract. The statement made by the defendants’ manager to the plaintiff may be regarded in two ways. Either (1) as having been made in pursuance of a term, which, in the opinion of the defendants, had formed part of the original contract; or (2) as a new term introduced by mutual agreement, that, then and thenceforth, the defendants would hold the car on the terms that, while in their possession, they would keep it insured.
Holmes, L.J.
I concur. Apparently the defendants were under the impression that it was a term of the contract for repair that the car should be kept insured by them while at their works. The defendants’ manager brought this to the notice of the plaintiff, who said in effect—“I accede to that.”
Michael T.S. Webb and Michael O’Connell Webb v Ireland and the Attorney General
1982 No.3139
1987 No. 19 P
High Court
Supreme Court
10 December 1986
16 December 1987
[1988] I.L.R.M. 565
(Blayney J)
(Finlay CJ, Walsh, Henchy, Griffin and McCarthy JJ)
29 July 1986 and 10 December 1986
HIGH COURT
BLAYNEY J delivered his judgment on 29 July 1986 saying: This an action by the finders of the Derrynaflan Hoard to recover possession of it from the State on whose behalf it is held by the National Museum.
The importance of the find was described as follows in a memorandum prepared by Dr. Michael Ryan, the keeper of Irish antiquities in the National Museum:
The Derrynaflan hoard is one of the most significant discoveries of early Christian art ever made. The chalice dates to the early ninth century and preliminary study has revealed the extremely important breakthrough which analysis of its decoration and technology will have for later Irish and, probably also, Viking studies. The small paten stands close comparison with the Ardagh Chalice in style, technique and range of motifs — it is a superb piece and like the chalice is an immensely important contribution to knowledge. The strainer is also a first class objet d’art unique in many respects — while the covering basin, although severely corroded, is likewise a significant and valuable find in its own right.
The case raises important questions of law but there is very little dispute as to the facts which I find to be as follows:
The objects constituting the hoard were found by the plaintiffs, using metal detectors, on 17 February 1980. The place where they were found is an island of pasture land, known as Derrynaflan, surrounded by a vast area of bog, and is situated about nine miles north east of Cashel between the villages of Horse and Jockey and Killenaule. The island is owner jointly by Mr Denis O’Brien and Mr John O’Leary in unequal shares. Mr O’Brien being entitled to 10/24ths and Mr O’Leary 14/24ths. It is approximately 73 acres in area and has on it the remains of a church and other buildings which formed part of an Abbey, and a tomb which is supposed to be that of the Guban Saer. On 8 June 1935 a preservation order had been made by the Minister for Finance under s. 8 of the National Monuments Act 1930 in respect of the buildings and the tomb which are described in the order as ‘Derrynaflan Abbey or Guban’s Church and grave’. At the time of the find there had for some years been a Bord Failte notice on a wall *569 of the Church giving some brief facts about the site and a Board of Works notice informing the public that it is an offence to injure or interfere in any manner with a national monument.
The hoard was found in a pit which had been dug partially into the remains of a bank and partially into the side of a ditch which, at the time the hoard was deposited in the pit, had either silted up or been backfilled. The hoard had clearly been buried in the pit with the object of concealing it. The plaintiffs dug down into the pit using a small garden trowel and their hands and the first part of the hoard, the bronze basin, was encountered about nine inches under the surface.
I find that the plaintiffs had the implied permission of the owners of the land to go to the island for the purpose of visiting the church and tomb which were the subject of the Preservation Order, but they did not have any permission, express or implied, to dig in the lands as they did.
The plaintiffs brought the hoard home and the following day, the first named plaintiff brought it to the National Museum and delivered it into the custody of Dr Brendán Ó Ríordáin the Director of the Museum. At the same time Mr Webb gave Dr Ó Rioŕdáin a letter from his solicitor which was in the following terms:
18 February 1980
Dear Sir
We have been consulted by Mr Michael T.S. Webb with reference to certain articles which he and his son Mr Michael Webb Junior found on the 17th February 1980. These articles appear to be a chalice, tray and screener and it is possible that they may constitute treasure trove. Our client is advised that these articles should, with the minimum possible delay and handling, be delivered to the care and custody of experts who have the facilities for examination and preserving the same. We have accordingly advised our client that he should deliver these articles to your care for the present and pending determination of the legal ownership or status thereof; and also, of course, subject to any rights to payment or reward which our client and his son have.
Yours faithfully,
O’Brien & Binchy.
Dr. Ó Ríordáin told Mr Webb that he thought that the articles making up the hoard were treasure trove, but in regard to this aspect of the matter he would have to be guided by the Attorney General’s office. He told Mr Webb that he would be honourably treated. It was arranged that Dr Michael Ryan and Miss Mary Cahill would meet in Cashel on the following Sunday and that he would show them where he had found the hoard. On that day Mr Webb brought Dr Ryan and Miss Mary Cahill to Derrynaflan, as arranged, and pointed out the spot where the hoard had been buried.
The National Museum then set about ascertaining who were the *570 owners of the island, and having discovered that it was Mr O’Brien and Mr O’Leary, they sought and obtained their permission to carry out excavations on the site. These excavations which lasted for about six weeks, were carried out in the Spring of 1980, and resulted in a number of missing components being found which belonged either to the patent, the strainer or the bronze basin.
Mr Webb had been told by Dr. Ó Ríordáin that he would be honourably treated, but in October, 1980, eight months after the find, nothing had been done to implement this promise, so he instructed his solicitors, Messrs O’Brien and Binchy to write to Dr Ó Ríordáin which they did on the 9 October 1980. Dr Ó Ríordáin replied that the matter was being considered by the head of the Department of Education. In response to a further letter he confirmed that the hoard was held at the National Museum.
No further communication was received from Dr Ó Ríordáin, or from the Department of Education, and Mr Webb’s solicitors wrote again on 2 March 1981 asking for a firm commitment within one month. No reply was received to this letter notwithstanding a reminder on 19 March, 1981.
On 16 June 1981 the Chief State Solicitor wrote to Messrs O’Brien and Binchy, referring to their letter of 18 February 1980 to Dr. Ó Ríordáin, and stating that the Government would be willing to make an award of £10,000 to the plaintiffs in respect of their interest in the finds. This was clearly not acceptable to the plaintiffs as the next letter from Messrs O’Brien and Binchy was a letter of 23 November 1981 to the Chief State Solicitor asking for the return of the hoard. No reply to this letter was received and a reminder was sent on 12 January 1982 saying that he had sent a reminder to the Attorney General and hoped to hear from him shortly. After some further correspondence the Chief State Solicitor wrote on 8 February 1982 saying that he had been instructed to point out that the Derrynaflan Hoard was the property of the State and that the Government was prepared to make an award of £10,000 to the plaintiffs as had been stated in the Chief State Solicitor’s letter of 16 June 1981. Following receipt of that letter the Plenary Summons in the action was issued on 11 March 1982.
While the correspondence with the plaintiffs’ solicitors was going on, correspondence was also taking place between the National Museum and a solicitor acting on behalf of the landowners. The question of awards was considered at a Cabinet meeting on 12 March 1981 and the decision of the Government was that endeavour should be made to negotiate awards of a maximum of £25,000 each to Messrs O’Leary and O’Brien and of up to £10,000 to the plaintiffs. Messrs O’Leary and O’Brien agreed to accept awards of £25,000 each, and on 7 July 1981 each signed separate documents in precisely the same form conveying their interest to the Minister for Education. The terms of document signed by Mr O’Brien were as follows: *571
I, Denis O’Brien of Lurgoe, Killenaule, in the County of Tipperary, in consideration of the payment to me of the sum of £25,000, hereby convey to the Minister for Education, absolutely and free from charges or encumbrances, all rights, property or interest that I may have in the objects now known as the Derrynaflan hoard and in the possession of the National Museum of Ireland, and mentioned in the schedule hereto which were found on or about the 17th day of February 1980, and on dates subsequent thereto, on the lands of Lurgoe, Killenaule, aforesaid, which said lands are the property of John O’Leary and myself no other person having any interest therein.
SCHEDULE
Chalice.
Silver Paten.
Silver and Bronze Paten stand.
Gild Bronze Strainer.
Bronze Basin.
Fragments of various metals and glass associated with the above.
Dated this 7th day of July 1981
Signed: Denis O’Brien
Witness: Matthew McNamara, Solicitor, Cashel, County Tipperary
Evidence of the value of the hoard was given on behalf of the plaintiffs by Mr Richard Camber, who has a master’s degree in fine arts and is a director of Sothebys. In his opinion the value of the hoard on the open market would be between £5 million and £8 million.
Dr Michael Ryan valued it at between £2.5 million and £3 million. It is clear accordingly that the hoard has a minimum value of £2.5 million.
The plaintiffs’ claim is in detinue for the return of the hoard. In order to sustain a claim in detinue, a plaintiff must show that at the time of bringing the action he had the right to the immediate possession of the chattel. In my opinion the plaintiffs have made out a prima facie case that they had such a right at the relevant time.
The plaintiffs, having found the hoard, took possession of it, so they clearly had possession at the time it was delivered to the National Museum on 18 February, 1980. That delivery constituted the State, through the National Museum, a bailee of the hoard. And to quote from the judgment of Lopes L.J. in Roger, Sons & Co. v Lambert & Co [1891] 1QB 318 at 327:
The general rule is, as was said by Blackburn, J., in Biddle v Bond (1865) 6 B & S 225, at p. 231 ‘that one who has received property from another as his bailee, or agent, or servant, must restore or account for that property to him from whom he received it’.
In the present case the duty to restore the hoard arose when Messrs O’Brien and Binchy wrote on behalf of the plaintiffs on 23 July 1981 requesting the return of the hoard. When that request was made, the plaintiffs had the right to the immediate possession of the hoard and that was the position when the plenary summons was issued on 11 March 1982.
*572
It was submitted on behalf of the State by Mr Liston SC that the plaintiffs’ possession of the hoard was not lawful and that on this ground the claim should fail. But Mr Liston SC indicated that he was not relying very strongly on this submission and I think he was right to take up this attitude. The fact that what the plaintiffs did in order to remove the hoard from the ground may have been a trespass to the land, or may have been an offence under the National Monuments Act 1930, is of no assistance to the State. To quote again the judgment of Lopes LJ. in Rogers, Sons & Co v Lambert & Co.:
It is an implied term of the bailment of goods that the bailor at the time of the bailment had a good title to the goods bailed.
It follows from this that, apart from certain exceptions which I shall discuss later when dealing with the defence, the State is estopped from denying the title of the bailor and so is estopped from claiming that the plaintiffs’ possession was unlawful. In this connection I would refer also to the statement of law in Paton on Bailment (1952 edition) at page 390 which in my opinion correctly states the law:
It is an old-established doctrine that the bailee is estopped from denying the title of the bailor.
I now go on to consider the grounds of defence raised by the State. The main grounds relied upon were those set out in paragraphs 7 and 8 of the defence, the relevant parts of which are as follows:
7. The National Museum is in possession of the said articles with the authority of the Defendants and of the Minister for Education.
8. Insofar as the said articles consist of treasure trove, such articles are the property of the State. Insofar as the said articles do not constitute treasure trove, they are the property of the Minister for Education by virtue of conveyances from Denis O’Brien and John O’Leary the owners and occupiers of the lands in which the said articles were found.
Two separate grounds are raised here: Firstly, that based on treasure trove, and secondly that based on the conveyances by Denis O’Brien and John O’Leary to the Minister for Education.
In answer to the defence of treasure trove, Mr Kinlen SC submitted that treasure trove is not part of our law; that the right to treasure trove was a right which formed part of the prerogative of the Crown in England and was not carried into our law by the Constitution of Saorstát Éireann in 1922. He based this submission on the decision of the Supreme Court in Byrne v Ireland [1972] IR 241 where it was decided that the State did not enjoy immunity from suit on the ground that such immunity, which was formerly part of the prerogative of the Crown, was not carried over into our law by the 1922 Constitution.
The principal judgment in Byrne v Ireland was given by Walsh J. Having analysed in great detail the origin of the royal prerogative and the *573 provisions of the 1922 Constitution, he expressed his conclusions as follows at p.p. 274–275:
The position and power granted to the King in that Constitution (i.e. the Constitution of Saorstát Éireann) owed everything to the express provisions to that effect in that Constitution. In Saorstát Éireann he was not the personification of the State and, therefore, the common-law immunities or prerogatives of the King which were personal to him did not exist in Saorstát Éireann because any such claim postulated, of necessity, the acceptance in the Constitution of Saorstát Éireann of the King as the personification of the State. All royal prerogatives to be found in the common law of England and in the common law of Ireland prior to the enactment of the Constitution of Saorstát Éireann, 1922, ceased to be part of the law of Saorstát Éireann because they were based on concepts expressly repudiated by Article 2 of that Constitution and, therefore, were inconsistent with the provisions of that Constitution and were not carried over by Article 73 thereof. I am fortified in this view by the opinion expressed by Murnaghan J., and concurred in by all the members of the former Supreme Court, in Irish Employers Mutual Insurance Association In re Ltd [1955] IR 176 at page 240 of the report. In my view, the assumptions and the concessions in the cases which I have mentioned, that the former royal prerogatives were carried over by common law into the law of Saorstát Éireann, were incorrect.
Since the royal prerogatives were not carried over into the law of Saorstát Éireann by the 1922 Constitution, they were not part of the law of Saorstát Éireann at the passing of the present Constitution in 1937 and so were not made part of our current law. It was argued in Byrne v Ireland that the prerogatives had been carried over by Article 49.1 of the Constitution which is as follows:
All powers, functions, rights and prerogatives whatsoever exercisable in or in respect of Saorstát Éireann immediately before the 11th day of December, 1936, whether in virtue of the Constitution then in force or otherwise, by the authority in which the executive power of Saorstát Éireann was then vested are hereby declared to belong to the people.
Walsh J. dealt with this submission as follows after considering the terms of the Constitutional (Amendment) Act 1936 and the Executive Authority (External Relations) Act 1936:
It is unnecessary to enquire what powers, functions, rights or prerogatives were exercisable by the King on the 10th December, 1936, in or in respect of Saorstát Éireann as, for the reasons I have already given, they did not include a right of immunity from suit in the courts of Saorstát Éireann. Therefore, the provisions of Article 49, Section I of the Constitution of Ireland which vested in and declared to belong to the People all the powers, functions, rights and prerogatives whatsoever exercisable in or in respect of Saorstát Éireann immediately before the 11th December, 1936, whether in virtue of the Constitution of Saorstát Éireann or otherwise, did not carry over or set up an immunity from suit.
In my opinion this conclusion is equally valid if one substitutes the royal prerogative of treasure trove for the prerogative of immunity from suit. As the latter was not carried over by Article 49.1, the former was not carried over either.
Mr Liston argued that Byrne v Ireland decided no more than that the royal prerogative of immunity from suit has not been carried over into our law and it did not determine what the position is in regard to the other prerogatives of the Crown. This is no doubt correct but the reasoning on which the decision was based was that none of the prerogatives had survived under the 1922 Constitution. It was because of this that the prerogative in contention in the action, namely, immunity from suit, had not survived. The finding that none of the prerogatives of the Crown had been carried over into the law of Saorstát Éireann by the 1922 Constitution was accordingly part of the ratio decidendi in Byrne v Ireland and is in my opinion binding on me.
I am of opinion accordingly that the defence based on the former royal prerogative of treasure trove fails.
The next ground of defence is that insofar as the hoard is not treasure trove (and that now must be taken as referring to the entire of the hoard) it is the property of the Minister for Education by virtue of the conveyances from Denis O’Brien and John O’Leary, and the National Museum is in possession of the hoard with the authority of the defendants and of the Minister for Education. This plea is in form a plea of a jus tertii, that is to say, a plea that the title to the hoard is in a third person, and that the defendants defend on behalf of and the upon the right and title and by the authority of the tertius . But in my opinion the facts do not support such a plea. The Minister for Education is not a third party vis-a-vis the State. Any property vested in the Minister for Education is State property. So the plea that the hoard is the property of the Minister for Education is a plea that it is the property of the State and this in fact is in accord with the facts as the ground on which the return of the hoard was refused, as stated in the Chief State Solicitor’s letter of 8 February 1982, was that the hoard was the property of the State. It is not a plea that it is the property of a third party.
Taking the plea in this sense, is it a valid defence to the plaintiffs’ claim? In other words, where a bailor claims the return of goods bailed, is it a valid defence for the bailee to prove a title in himself to the goods, such title being alleged to have arisen after the date of the bailment? It seems to me that it is not.
As I pointed out earlier, it is a long established principle that a bailee is estopped from denying the title of the bailor. So the State is estopped from denying the title of the plaintiffs unless it can bring itself within one of the exceptions to this rule. These exceptions are set out as follows in the judgment of Lord Esher M. R. in Rogers, Sons & Co v Lambert & Co [1891] 1 QB 318 at page 325:
In my opinion, the law is laid down in Biddle v Bond 6 B. & S. 225 by Lord Blackburn, in a considered judgment of the Court of Queen’s Bench, delivered by a judge who knew more about these matters than anyone else, and it is, I think, laid down there distinctly that, as between a bailee and his bailor under an ordinary contract of bailment, the bailee must, if he desires to defend an action for the *575 non-delivery of the goods upon the demand of the bailor, show that he has already delivered them upon a delivery order authorized by the bailor, or he may ask for an interpleader order, or he may, at his own risk as regards the plaintiff, say, ‘I defend the action on behalf of A. B., and I say that he is the person really entitled to the goods’. If he takes the latter course, he must not only allege the title of the third party, but he must prove it; and, if he does not prove it, he has no defence. ‘A bailee’, says Lord Blackburn, ‘can set up the title of another only if he defends upon the right and title and by the authority of that person’. He must allege that title and must prove it. That is the law laid down, and it seems to me rightly laid down, in Biddle v Bond.
In my opinion the State cannot bring itself within any of the exceptions referred to in that passage. It has not delivered the hoard to any person upon a delivery order authorised by the plaintiffs nor is it defending the action on behalf of a third party whom it says is the person really entitled to the hoard. In the circumstances the well-established principle of estopped as between a bailee and a bailor applies and the State is estopped from denying the title of the plaintiffs and so cannot raise the plea that the hoard is the property of the State by virtue of the conveyances from Messrs O’Brien and O’Leary. The second ground of defence raised by the State accordingly fails also.
In view of my conclusions on this second ground, it is not necessary for me to consider the difficult legal issue which was very fully argued in the course of the hearing, as to the respective rights to the hoard of the plaintiffs, as finders, and Messrs O’Brien and O’Leary, as the owners of the land in which the hoard was found. That may have to be determined in other proceedings but as the State is estopped from denying the plaintiffs’ title, it does not have to be determined in this action. Nor do I have to consider the effect of the conveyances executed by Messrs O’Brien and O’Leary in favour of the Minister for Education.
Mr Liston SC submitted that the action was concerned with the ownership of the hoard, but in my opinion this is not so. It is an action between a bailor and a bailee, and the sole issue is whether the plaintiffs as bailors are entitled to the return of the hoard from the State. The action is not concerned with the ownership of the hoard, and will not determine its ownership.
Mr Liston SC also submitted that the delivery of the hoard to the National Museum did not create a bailment on the basis that the plaintiffs, as finders, were bailees for the true owner, and under an obligation to deliver the hoard to him, and in delivering it to the Museum they were simply fulfilling this obligation. This submission would have had great cogency if the State was entitled to the hoard as treasure trove. In that case the State’s right to the hoard would have arisen immediately on its being found, and no bailment would have been created by the delivery to the Museum since such delivery would have constituted a delivery by the finders to the party entitled to the hoard. But the fact that there is no right of treasure trove vested in the State destroys the foundation of the submission. It means that the Museum did not receive *576 the hoard as agent of the owner, and so there was nothing to prevent the delivery of the hoard creating a bailment as in my opinion it did.
Mr Liston SC argued further that the terms of the letter on which the hoard was delivered was such that the plaintiffs were not entitled to demand the return of the hoard. In my opinion there is nothing in the letter which would enable it to be construed in this way. It does not either state expressly or imply that the hoard was being delivered to the Museum permanently or for any fixed period. On the contrary it expressly states that it was being delivered for the present and pending determination of the legal ownership or status thereof. In my opinion the most important words here are for the present. They indicated that the hoard was being handed over to the Museum temporarily and not permanently. It follows that the plaintiffs were entitled to demand to have the hoard back, as they did.
For the reasons which I have given in the course of this judgment I consider that none of the grounds of defence relied on by the State is an answer to the plaintiffs’ claim and the plaintiffs are accordingly entitled to an order for the return of the hoard. But such an order will have to be subject to conditions. During the time the hoard has been in the possession of the Museum, considerable work has been done to it for the purpose of preserving and restoring it. Also, as a result of the excavations carried out by the Museum, additional components were found and were used in the restoration of the paten in particular.
All this work has added greatly to the value of the hoard so that it would be inequitable to make an order for the return of the hoard without requiring the plaintiffs to make an allowance to the State commensurate with the extent of the increase in value. The principle which it seems to me I must apply is set out in the following passage from the judgment of Lord Macnaghten in Peruvian Guano Co Ltd v Dreyfus Brothers & Co. [1892] AC 166 at 176:
The old writ under a verdict in an action of detinue authorized the sheriff to distrain the goods and chattels of the defendant if he did not return the goods, or pay a sum of money which was the assessed value of the goods. ‘This’, Mellish LJ says in In re Scarth, Law Rep. 10 Ch 234, ‘gave the defendant a choice whether he would give up the goods or pay the money, and drove into equity all who wanted to recover the actual goods’. But I need not point out that equity would not interfere unless the goods were of special value; nor would it, I apprehend, assist the claimant if he refused to do equity by making just allowances. The Common Law Procedure Act 1854 enabled courts of common law to make an order for the return of the goods, if they saw fit to do so. The effect of that provision, as pointed out by Maule, J., in Chilton v Carrington, 15 CB 730, is not to take away the option in all cases, but it enables ‘the Court or Judge to make an order for delivery, where it would be unjust to allow the defendant to have the option and where he can, and in the opinion of the Court or Judge ought to, restore the chattel in specie’. I am not aware of any authority upon the point, but I should doubt whether it was incumbent upon the Court to order the defendant to return the goods in specie where the plaintiff refused to make a fair and just allowance, and so claimed the interposition of the Court, under the Common Law Procedure Act, for the purpose of obtaining an advantage not consistent with the justice of the case.
*577
The principle is summarised in Salmond and Heuston on the Law of Torts (18th edition 1981) at p. 107:
If the defendant has, since taking the property, increased the value of it by his own labour or expenditure, the plaintiff is entitled to recover as damages only its original and not its present value. This being so, it is clear that if the plaintiff seeks specific restitution instead of damages the court must either refuse this remedy altogether or grant it only on the terms that the plaintiff shall make to the defendant a fair allowance in respect of the increased value of the property.
It seems to me that in order to do justice between the parties I should give the State the opportunity of adducing evidence as to what this allowance should be — the plaintiff being entitled to call evidence in reply — and I should give both sides the opportunity of making submissions to me on the issue.
In the circumstances I propose to adjourn giving final judgment and to re-enter the case for further hearing on the single issue of what allowance should be made to the State as a condition of the plaintiffs getting an order for the return of the hoard.
Second Judgment
BLAYNEY J delivered his judgment on 10 December 1986 saying: I adjourned giving final judgment in this case and re-entered it for further hearing on the sole issue of what allowance should be made to the State as a condition of the plaintiffs getting an order for the return of the hoard.
At the resumed hearing, evidence was adduced by the State as to the value of the hoard at the date it was delivered to the National Museum and as to its present value, and Mr Liston SC submitted that the allowance should be the difference between the two which, on the evidence of his witness, Mr Faulkner, would be in the region of £5 million. He submitted that the correct measure was a figure commensurate with the increase in value, which was the expression I had used in my judgment.
Mr Ryan SC, on the other hand, submitted that the measure of a fair and just allowance was such as was necessary to do complete justice between the parties.
Having further considered the matter, the conclusion I have come to is that the measure which I had referred to in my judgment, namely, a figure commensurate with the increase in value, is not supported by the authorities.
In Peruvian Guano Co v Dreyfus Brothers [1892] AC 166, the case from which I cited an extract from the judgment of Lord Macnaghten, one of the issues was whether the defendants, who had wrongfully detained certain cargoes, the property of the plaintiffs, were entitled to repayment of expenses incurred by them on account of freight or landing charges. It was held that they were. Lord Watson said at p. 186: *578
The only issue before the House was whether certain outlays made by the company in relation to the cargoes in their possession ought to be disallowed to the company as expenditure incurred by them in prosecution of a legal wrong. All of their Lordships held that the terms of the consent order were sufficient to deprive the action of the company in making these outlays of any wrongful aspect, and to imply their right to be repaid.
The facts of the case were complex and it is not necessary to set them out in detail, but it is clear from this extract that they were very different from the facts I am concerned with here. All that was involved was outlay which did not in any way increase the value of the cargoes, and the right to be repaid derived from a consent order and not from any equitable principle. In view of this, the actual decision in the case is not of assistance in determining what is the correct measure to apply.
In Munro v Willmott [1948] 2 All ER 983, a decision of the High Court in England, the plaintiff, with the permission of the defendant, the owner of an Inn, had left her car in the yard of the Inn, and it remained their for three years. At that stage it had become an obstruction and the defendant wanted it removed. Being unable to trace the plaintiff, he had repairs carried out to the car at a cost of £85 and then sold by auction for £105, less £5 commission. It was held that the value of the car at the date of judgment was £120.
The plaintiff sued in detinue and conversion. She recovered damages in the sum of £35, being the value of the car at the date of the judgment less the £85 which had been spent by the defendant in having it repaired. In dealing with the damages for detinue, Lynskey J said at p. 986 H:
The measure of damages in detinue, it seems to me, must be similar, if not the same. At any rate, when I am asked to give damages in detinue for the value of a motor car as at today, and I find that a large sum of money has been spent on it for the purpose of making it even saleable, I must take that into account in assessing what is the value of the property the plaintiff has lost. [His Lordship considered the evidence as to the value of the car, and continued:] I assess the value of the car today at £120. On that, in my view, the defendent ought to be given credit for producing that result. It is as a result of the £73 he spent in repairs and renewals and as a result of his own expenditure of time, labour and materials in painting and renovating the outside of the car that that price was realisable at all. If he had not spent that money, I am quite satisfied this car would probably have realised today something in the nature of £20 or £25 as scrap. The result is that the defendant is entitled to credit, not from the point of view of payment for what he has done, but in order to arrive at what is the true value of the property which the plaintiff has lost. In my view, the value of the property which the plaintiff has lost is approximately £35, and there will be judgment for that amount.
In Greenwood v Bennett [1972] 3 All ER 586, a decision of the Court of Appeal in England, the court in an interpleader proceeding considered the right of a bona fide purchaser of a stolen car to be reimbursed by the owner, to whom the car was restored by the order of the court, for repairs which he had carried out to the car.
The car was owned by Bennett; was stolen by Searle and sold by him to Harper for £75 after it had been involved in an accident. Harper *579 expended £226.47 on repairs to the car and sold it to a finance company who let it on hire purchase to Prattle for £450. The police traced the car to Prattle and they took possession of it. The Chief Constable took out an interpleader summons to determine to whom he should return it. The county court judge held that Bennett was entitled to possession of the car and Harper was not entitled to be reimbursed for the amount he had spent on repairs. On appeal it was held that Harper was entitled to be paid by Bennett the £226.47 he had expended on repairing the car.
The principal judgment of the court was delivered by Lord Denning M.R. Having set out the facts, he referred to what the legal position would have been if the police had not taken possession of the car but it had remained in Mr Prattle’s possession and firstly an action for conversion had been taken against Harper, and secondly an action in detinue had been taken against Prattle. He then went on at page 588 F as follows:
In the third place, if Mr Bennett’s company had brought an action against Mr Prattle for specific delivery of the car, it is very unlikely that an order for specific delivery of the car would be made. But if it had been, no court would order its delivery unless compensation was made for the improvements. There is a valuable judgment by Lord Macnaghten in Peruvian Guano Co v Dreyfus Brothers & Co., where he said:
‘I am not aware of any authority upon the point, but I should doubt whether it was incumbent upon the Court to order the defendant to return the goods in specie where the plaintiff refused to make a fair and just allowance …’
So, if this car were ordered to be returned to Mr Bennett’s company, I am quite clear the court in equity would insist on a condition that payment should be made to Mr Harper for the value of the improvements which he put on it.
Both Phillimore LJ and Cairns LJ agreed with Lord Denning. The former said in his judgment at p. 589:
This was a case in which I should have thought that in the ordinary way no order for specific restitution of the chattel would have been made, because this was an ordinary commercial article; but the judge has, in effect, dealt with it as if by an order of specific restitution in allowing Mr Bennett to take the car back. In those circumstances it seems to me perfectly clear that on equitable principles someone who has improved the car since it was originally converted and who is not himself a wrongdoer — and it is not suggested that Mr Harper was in any way a wrongdoer — should be credited with the value of the work which he had put into the car by way of improving it.
And Lord Cairns said in his judgment at p. 590 A:
if there could have been an action for detinue against Mr. Harper then similarly, on the principles laid down in Munro v Wilmott and in the speech of Lord Macnaghten in Peruvian Guano Co v Dreyfus Brothers & Co, Mr. Harper’s expenditure would have had to be allowed. It appears to me that in interpleader proceedings similar considerations come into play as those which would affect an action for detinue; and, an order for delivery of the car to Mr Bennett now having been made and carried out, it seems to me that the result must be that Mr Harper ought to receive from Mr Bennett the amount of his expenditure on the car.
*580
There does not appear to be any Irish case in which the point was considered though it was raised by the defendant in British Wagon Co Ltd v J Shortt [1961]IR 164. The defendant had purchased land reclamation machinery which was subject to a hire purchase agreement and was sued in detinue and conversion by the hire purchase company which owned it. He counterclaimed for £600 which he claimed to have expended on repairs to the machinery. Davitt J, who heard the case, assessed at £1,200 the value of the machinery at the date of the hearing, and he gave judgment for that amount, plus interest, and did not make any allowance for the amount claimed to have been spent on repairs.
Of the cases referred to, only Munro v Willmott and Greenwood v Bennett are directly in point. But in neither did the court make an allowance commensurate with the increased value of the motor cars with which the actions were concerned. In both cases the allowance in effect was the amount of the expenditure incurred. In the former, the damages were reduced by this amount, and in the latter the owner of the car was directed to reimburse the party who had incurred the expenditure. In each case the court accepted that what would be a fair and just allowance was the amount of the expenditure which had been incurred by the defendants.
These cases are not binding on me but I see no reason why I should not follow them and accordingly I propose to do so.
But in applying the principle they decided to the facts of this case there is the further question that has to be considered and that is whether the State is entitled to have taken into account expenditure incurred after 23 November 1981, the date on which the plaintiffs’ solicitors wrote to the Chief State Solicitor asking for the return of the hoard. Mr Ryan SC submitted that expenditure incurred after that date, and a fortiori after 11 March 1982, the date on which the plenary summons in the action was issued, fell into a different category from expenditure incurred previously. He submitted that such expenditure should not be taken into account in assessing what was a just and fair allowance.
In my opinion this submission is correct. Lord Denning MR dealt with this point as follows in his judgment in Greenwood v Bennett at p. 589 a:
Counsel for Mr. Bennett has referred us to the familiar cases which say that a man is not entitled to compensation for work done on the goods or property of another unless there is a contract express or implied to pay for it. We all remember the saying of Pollack CB: ‘One cleans another’s shoes. What can the other do but put them on?’ (Taylor v Laird ((1856)) 25 LJ. Ex 329 at 332). That is undoubtedly the law when the person who does the work knows, or ought to know, that the property does not belong to him. He takes the risk of not being paid for his work on it. But it is very different when he honestly believes himself to be the owner of the property and does the work in that belief.
I have no doubt that the staff of the National Museum honestly believed that the State was the owner of the hoard, and what work they did was done in that belief, but is that sufficient in the light of the fact *581 that they had notice of a claim by the plaintiffs to have the hoard returned to them? It seems to me that it is not. I consider that the fact that they had received notice of a claim resulted in a situation in which they ought to have been aware, irrespective of what they believed, that there was a risk that the claim was valid, and they necessarily accepted that risk. The question of notice was referred to by Lord Denning MR immediately after the passage I have just cited, when he said:
Here we have an innocent purchaser who bought the car in good faith and without notice of any defect in the title to it
The notice here may not have been notice of an actual defect in title, but it was certainly notice of a possible defect, and in my opinion that distinguishes the State’s position from that of the innocent purchaser in Greenwood v Bennett.
On the evidence, it is clear that all the work done by the National Museum, with the exception of the excavations carried out in the Spring of 1980, was done after the plaintiffs had claimed the return of the hoard in November 1981, and so expenditure on such work cannot be taken into account. And as regards the cost of the excavations, while there might be some ground for allowing it, on the basis that the component parts found contributed to the restoration of the paten, I have no evidence of the cost and so to attempt to determine a figure would involve speculation.
There remains the amount to be paid by the National Museum to the British Museum — £24,000 — for the painstaking work of preserving the hoard and £1,800 for photography, a total of £25,800. I consider that the State is entitled to be repaid this sum as the hoard had been sent to the British Museum before the claim was made for its return. Even though most of the work may have been done after November 1981, it would in my opinion have been unreasonable for the National Museum to have taken back the hoard until the work of preservation had been completed, and so the State is entitled to be reimbursed the full cost incurred.
The final matter to be considered is the form of the order. The different forms of order which may be made in an action for detinue were outlined as follows by Diplock LJ in General And Finance Facilities Ltd. v Cooks Cars (Romford) Ltd [1963]2 All ER 314 at p. 319 B:
In the result an action in detinue today may result in a judgment in one of three different forms: (i) for the value of the chattel as assessed and damages for its detention; or (ii) for return of the chattel or recovery of its value as assessed and damages for its detention; or (iii) for return of the chattel and damages for its detention. A judgment in the first form is appropriate where the chattel is an ordinary article in commerce, for the court will not normally order specific restitution in such a case, where damages are an adequate remedy (see Whiteley, Ltd. v Hilt [1918] 2 KB 808). A judgment in this form deprives the defendant of the option which he had under the old common law form of judgment of returning the chattel; but if he has failed to do so by the time of the judgment the plaintiff, if he so elects, is entitled to a judgment in this form as of right (cf. R.S.C., Ord. 13, r. 6). In substance this is the same as the remedy in conversion although the sum recoverable, as I have indicated, may not be *582 the same as damages for conversion, for the cause of action in detinue is a continuing one up to the date of judgment and the value of the chattel is assessed as at that date (see Rosenthal v Alderton & Sons, Ltd [1946]1 KB 374). A final judgment in such a form is for a single sum of money. A judgment in the second form gives to the defendant the option of returning the chattel, but it also gives to the plaintiff the right to apply to the court to enforce specific restitution of the chattel by writ of delivery, or attachment or sequestration as well as recovering damages for its detention by writ of fieri facias (R.S.C., Ord. 42, r. 6). This is an important right and it is essential to its exercise that the judgment should specify separate amounts for the assessed value of the chattel and for the damages for its detention, for if the plaintiff wishes to proceed by writ of delivery for which he can apply ex parte (Ord. 48, r.1) he has the option of distraining for the assessed value of the chattel if the chattel itself is not recovered by the sheriff. He would be deprived of this option if the value of the chattel were not separately assessed. A judgment in the third form is unusual but can be given (see Hymas v Ogden [1905]1 KB 246). Under it the only pecuniary sum recoverable is damages for detention of the chattel. Its value need not be assessed and the plaintiff can obtain specific restitution of the chattel only by writ of delivery, attachment or sequestration. He has no option under the writ of delivery to distrain for the value of the chattel.
On the special facts of the present case it seems to me that the second form of judgment is the appropriate one, with the necessary modification that the specific restitution of the hoard will be subject to the condition that the plaintiffs shall pay the State the sum of £25,800, and the alternative decree for damages for the assessed value of the chattel should be the current value of the hoard reduced by £25,800.
I will, however, hear counsel on the form of the order as I have not yet had submissions on this although Mr Liston SC did make a reference to it at the adjourned hearing when he submitted that the plaintiffs should not have the option of recovering a decree for the value of the hoard.
In view of the different possible forms of the order, it is necessary for me to assess the value of the hoard as of today, and also to consider the question of damages for its detention.
To take the latter point first, I consider that the damages for the detention of the hoard should be nominal only, as no evidence has been given of any damage actually suffered by the plaintiffs, and accordingly I assess a figure of £1 under this head.
As to the value of the hoard at the date of this judgment, I have the evidence of Mr Richard Camber, who was called on behalf of the plaintiffs, and of Mr Richard Faulkner who was called on behalf of the State. Mr Camber’s opinion as to the value of the hoard on the open market, that is to say, if there was no restriction on its being exported from Ireland, would be between £5 million and £8 million. Mr Faulkner’s valuation was made on the basis that the hoard could not legally be sold outside this country, and in his opinion its value on this basis is £5,536,000. Mr Camber said he would not disagree with this. On this evidence I have no difficulty in finding that the present value of the hoard is £5,536,000.
Subject to hearing counsel’s submissions on the form of the order, it seems to me that it should be in the second form referred to by Diplock *583 LJ, that is to say, a judgment for the return of the hoard, or recovery of its value as assessed, less £25,800, together with £1 nominal damages for its detention, but with this modification in view of the return of the hoard being conditional on the payment of £25,800 by the plaintiffs, that it is the plaintiffs who shall have the option of choosing between the forms of relief rather than the defendants.
SUPREME COURT
FINLAY CJ
(Henchy and Griffin JJ concurring) delivered his judgment on 16 December 1987 saying: This is an appeal brought by the defendants against the order of the High Court made on 10 December 1986 directing the return to the plaintiffs of certain valuable antique articles constituting what has become known as the Derrynaflan Hoard upon payment of £25,800 by the plaintiffs to the defendants, or in the alternative at the option of the plaintiffs an order that the plaintiffs do recover against the defendants the sum of £5,510,200.
The Derrynaflan Hoard consists of a chalice, silver paten, silver and bronze paten stand, gilt bronze strainer and a bronze basin. It has been described as one of the most significant discoveries ever made of Christian art. The chalice is believed to date from the ninth century and the entire find constitutes an immensely important contribution to knowledge.
The plaintiffs, who are father and son, on 17 February 1980 went to a place near Killenaule in Country Tipperary, known as Derrynaflan which consisted of an island of pasture land surrounded by a very large area of bog. It contains the remains of a church and other buildings which formed part of an abbey and also a tomb which is supposed to be that of the Guban Saor. Buildings described as Derrynaflan Abbey or Guban’s Church and Grave were the subject matter of a Preservation Order made by the Minister for Finance under s. 8 of the National Monuments Act 1930, which order was made on 8 June 1935.
The lands known as Derrynaflan were at the time of the finding of the hoard jointly owned in unequal shares by a Mr Denis O’Brien and a Mr John O’Leary.
Each of the plaintiffs had with him a metal detector and the purpose of their visit to these lands which they reached by travelling on a raised road going through the bog was to search for metal objects which might be buried in the lands. They did not seek any permission from the owners of the lands before entering on them. After a relatively short time searching with the metal detectors one of the plaintiffs got a positive reaction and upon digging into the bottom of a bank close to the abbey and buildings with a small hand trowel the plaintiffs succeeded in unearthing the objects which constitute the hoard. They brought these objects back to their house in Clonmel and having consulted an archaeologist as to their importance and also having received the advice of their solicitor, Mr Binchy, the first-named plaintiff delivered the articles the following *584 day to the National Museum, bringing with him a letter written by his solicitor in the following terms:
18th February 1980
Dear Sir,
We have been consulted by Mr Michael T. S. Webb with reference to certain articles which he and his son, Mr Michael Webb, Junior, found on the 17th February 1980. These articles appear to be a chalice, tray and screener and it is possible that they may constitute treasure trove. Our client has been advised that these articles should with the minimum possible delay and handling be delivered to the care and custody of experts who have the facilities for examination and preserving same. We have accordingly advised our client that he should deliver these articles to your care for the present and pending determination of the legal ownership or status thereof; and also of course subject to any rights to payment or reward which our client and his son have.
Yours faithfully
O’BRIEN & BINCHY
The articles were received by Dr. Breandán Ó Ríordain, the Director of the National Museum, who immediately recognised their general value and importance and it was established at the trial that Dr. Ó Ríordáin told Mr Webb that he thought that the articles making up the hoard were treasure trove but that with regard to that aspect of the matter he would have to be guided by the Attorney General’s advice. He also told Mr Webb that he (Mr Webb) would be honourably treated.
Shortly afterwards the first-named plaintiff met officials of the museum and pointed out the precise place where the hoard had been found by him and his son.
Within a short time the museum having ascertained the owners of the land and having received their permission carried out further excavations on the site and these, which lasted for approximately six weeks resulted in a number of missing parts and components being found, belonging either to the paten, the strainer or the bronze basin. A reconstruction was then carried out together with preservation work, partly by the National Museum and partly by the British Museum at the request of the National Museum, resulting in the restoration, to a very great extent, of the articles consisting of the hoard in what must have been their original condition.
The solicitors for the plaintiffs on 9 October 1980 wrote the Dr. Ó Ríordáin reminding him of the undertaking that the plaintiffs would be honourably treated with regard to the finding of the hoard and asking that this promise would be implemented. To that letter a reply was sent, stating that the matter was being considered by the head of the Department of Education. No further communication was received, however, from Dr. Ó Ríordáin and the solicitors for the plaintiffs wrote again on 2 March 1981 asking for a firm commitment within one month. On 16 June 1981 the Chief State Solicitor wrote to the solicitors for the plaintiffs referring to the letter of 18 February 1980 addressed to Dr. Ó Ríordáin and stating that the Government would be willing to make an award of *585 £10,000 to the plaintiffs in respect of their interest in the finds. There does not appear to have been a direct response to that letter but on 23 November 1981 the plaintiffs’ solicitors wrote seeking the return of the hoard to the plaintiffs. Reminders were sent but no response to that demand was made until 8 February 1982 when the Chief State Solicitor wrote to the solicitors for the plaintiffs pointing out that his instructions were that the hoard was the property of the State and that the Government was prepared to make an award of £10,000 to the plaintiffs as had been stated in his letter of 16 June 1981. These proceedings were then instituted by plenary summons on 11 March 1982.
In March 1980 a solicitor acting on behalf of the owners of the land, Messrs. O’Brien and O’Leary, had written making a claim to an award. Considerable correspondence took place between the State and these owners and eventually both agreed to accept a sum of £25,000 each, and in consideration of that payment to convey to the Minister for Education all rights, property or interest that they may have in the objects now known as the Derrynaflan Hoard. Mr O’Brien and Mr O’Leary executed a document on 7 July 1981 acknowledging the payment of the sum of £25,000 and transferring to the Minister for Education all their rights and interests in accordance with the agreement.
In his judgment leading to the making of the order of 10 December 1986, the learned trial judge reached the following conclusions:
(1) That applying the decision of this Court in Byrne v Ireland [1972] IR 241 with regard to the question of a State immunity from suit that the former royal prerogative of treasure trove as contained in the common law was not carried into our law by the Constitution of Saorstát Éireann in 1922 and was not carried into our law by virtue of the Constitution.
(2) That in the absence of a right of treasure trove the State had not got, at the time of the delivery of the hoard to the Museum, any title to it and that, therefore, the Museum as the agent of the State received the hoard as a bailee under an ordinary contract of bailment.
(3) As bailee the State was estopped from denying the title of the plaintiffs to the hoard and was not entitled to assert a title in itself, even if that was validly conferred on it by the conveyance from Messrs. O’Brien and O’Leary.
(4) Although he found that the plaintiffs in entering upon the lands of Derrynaflan had an implied permission from the owners who had permitted access to the National Monument, they had not got any permission to dig on the lands and as soon as they commenced to dig, became trespassers. He ruled, however, that the fact that they obtained the hoard by an act of trespass did not affect the plaintiffs’ right to the return of the hoard.
(5) He specifically ruled that the terms of the letter from the solicitors for the plaintiffs delivered at the same time as the hoard, on 18 February 1980, did not alter the right of the plaintiffs as bailors to the return of the hoard.
Having reached the conclusion as a matter of law that the State was *586 estopped from challenging the title of the plaintiffs to the hoard because it was placed estopped with them and accepted on a bailment, the learned trial judge did not find it necessary to decide the question of the right or title of the landowners to the hoard. He expressed his opinion that the action was not an action concerned with the ownership of the hoard but was an action between a bailor and a bailee and the sole issue was whether the plaintiffs as bailors were entitled to the return of the hoard from the State. The action, he stated, is not concerned with the ownership of the hoard and will not determine its ownership.
The first issue which falls to be determined on this appeal, from a logical point of view, is the question as to whether, assuming that the hoard was received by the National Museum as agent for the State in the capacity of a bailee, there must be an implied term in that bailment that the plaintiffs as bailors had a good title to the goods. The decision of the High Court was based on the decision of the Court of Appeal in Rogers Sons & Co v Lambert & Co [1891]1 QB 318
I have considered that decision and I have come to the conclusion that on the facts of this case there can not be implied into the arrangements between the plaintiffs and the defendant, surrounding the deposit of the hoard with the Museum, any term establishing a title in the plaintiffs to the hoard. The terms under which the hoard was deposited are clearly set out in the letter written by the solicitors for the plaintiffs which was brought to the director of the Museum at the same time as the articles were. The reference in that letter, which I have already quoted in full, to deliver these articles to your care for the present and pending determination of the legal ownership (emphasis added) is, in my opinion, wholly inconsistent with implying into any bailment arising from that delivery an acknowledgment or admission of the plaintiffs’ title to the goods. Whilst, therefore, I would accept as a general proposition of law that bailment involves an implied term as to the title of the bailor of the goods, it can only do so to the extent and in the instances where such an implied term is not by the express terms of the bailment excluded. I am satisfied that this case is one in which such an implied term is by the express terms of the letter excluded from the bailment.
It is next necessary to consider the issue as to whether even assuming that the title of the plaintiffs to the goods is not an implied term in this bailment, the State is by reason of the bailment estopped from asserting its own title to the goods which it claims it derived from the landowners, O’Brien and O’Leary.
The decision of the learned trial judge in this context was again based largely on the decision in Rogers Sons & Co v Lambert & Co and also in Biddle v Bond (1865)6 B & S 225 which is cited with approval in that case. There can be no doubt that Rogers Sons & Co v Lambert & Co is a clear authority for the proposition that if a bailee seeks to refuse the return of goods, asserting the right of a third party to the possession and ownership of them, that he can only do so expressly on behalf of and with *587 the authority of the third party, and that having asserted such a right he must prove it. The decision, however, does not appear to me to exclude or indeed to deal at all with the situation where a bailee asserts not the right of a third party to the goods but his own title to them, even if it has been acquired subsequent to the original bailment. The facts of Rogers, Sons & Co v Lamber & Co where the plaintiffs had purchased copper from the defendants and paid for it and whereby the defendants expressly undertook to warehouse the copper and upon payment of the proper warehousing charges to deliver it to the plaintiffs or their order, made it, of course, quite unnecessary to consider any assertion by the defendants of a title in themselves to the copper. In considering the nature of jus tertii which can be asserted by a bailee Lopes LJ at p. 328 of the report quotes with approval from the decision in Biddle v Bond where Blackburn J. delivering the judgment of the Court of the Queen’s Bench said:
We think that the true ground on which a bailee may set up the jus tertii is that indicated in Shelbury v Scotsford, viz., that the estoppel ceases when the bailment on which it is founded is determined by what is equivalent to an eviction by title paramount.
In my view, the true legal position which arises where a bailee asserts and establishes a title in himself to the goods is that he establishes the termination of the bailment and that by reason of that termination any estoppel which would otherwise arise between a bailee and a bailor ceases to operate. Such a view of the law appears to be logical and, in my view, appears also to yield a just result for there could be significant injustice if a bailee having lawfully and properly acquired a title to the goods which had been bailed with him were obliged to return them to the bailor by virtue of an estoppel and presumably left to the remedy of a subsequent second action for the delivery back of the goods to himself again. I, therefore, conclude that it is necessary in this appeal to determine the question as to whether by virtue of the contracts and conveyances made between the State acting through the Minister for Education and the owners of the land the State had, by the time of the institution of these proceedings acquired a title to these articles as against the plaintiffs.
The defendants assert a title to the goods derived through the landowners, Messrs. O’Brien and O’Leary, on two separate grounds. Firstly, they allege that the landowner had a title to any chattel found in the land against any finder of it, under any circumstances. Secondly, they allege that the plaintiffs, having found the chattels and obtained possession of them by an act of trespass as found by the learned trial judge, namely, the digging in the land, and/or being guilty, as it is alleged, of an offence under s. 14 of the National Monuments Act 1930, cannot derive any lawful title to the goods thus acquired.
In the submissions before this Court it was suggested on behalf of the defendants that an offence against s. 26 of the National Monuments Act 1930 may also have been committed and it was in addition suggested that *588 the taking away of the goods from the lands might have constituted the offence of larceny. Neither of these two allegations was pleaded at any time in the action, even after a very late amendment was granted of the defence, and, in my view, neither is substantiated or proved by any evidence in the action and I would unreservedly reject both of these allegations.
Rights of the Landowner against the Finder
The decision of Chitty J. in Elwes v The Brigg Gas Company (1886) 33 Ch. D 562, is a clear and unequivocal authority for the proposition that the owner of a fee simple interest in land is entitled to any chattel which may be in the land as against the finder of that chattel, even where the finder is excavating the land with the licence of the owner. I have carefully considered the judgment in that case and I find it a very persuasive precedent.
In the case of South Staffordshire Water Co v Sharman [1896]2 QB 44, Lord Russell CJ quoted with aproval the following passage in Pollock and Wright’s Possession in the Common Law :
The possession of land carries with it in general, by our law, possession of everything which is attached to or under that land, and, in the absence of a better title elsewhere, the right to possess it also. And it makes no difference that the possessor is not aware of the thing’s existence …. It is free to anyone who requires a specific intention as part of the de facto possession to treat this as a positive rule of law. But it seems preferable to say that the legal possession rests on a real de facto possession constituted by the occupier’s general power and intent to exclude unauthorised interference.
Later on in his judgment the Chief Justice stated this principle in somewhat different form and, in particular, appeared to apply it to things which may be upon or in the land, where the statement would appear to apply to everything which is attached to or under the land. This slight qualification, if it is such, of the earlier statement is dealt with in the judgment of McNair J. in London City Corporation v Appleyard [1963] 2 All ER 843. I am satisfied that the true legal position is that there must be distinguished, with regard to the question of control, things which are on land and things which are attached to or under it. This distinction makes consistent the decision in Bridges v Hawkesworth (1851)21 LJ QB 75, and the decision in Parker v The British Airways Board [1982]1 All ER 834 which dealt with objects on land and with an absence of control over them with the decisions in the cases to which I have referred, dealing with objects attached to or under the land. The extent to which, where objects are attached to or under the land, an absence of control may deprive the owner against a finder is probably limited to cases such as Hanna v Peel [1945] KB 509, where the owner of a house had never entered into possession of it though the title had developed upon him. There is no evidence in this case of anything approaching that type of absence of control on the part of the landowners. From a consideration of *589 all these cases, although it is clearly obiter to the facts contained in it, I would find the general propositions set out by Dolandson LJ in Parker v British Airways to be a careful and, in my opinion, correct assertion of the relevant principles applicable. Two of the propositions he there states are relevant to the issues arising in this case, the first being that an occupier of land has rights superior to those of a finder over chattels in or attached to that land, and the second being that the finder of a chattel acquires very limited rights over it if he takes it into his care and control … in the course of trespassing.
I, therefore, conclude that on the facts of this case the owners of the lands, Messrs O’Brien and O’Leary had a right to possession of these chattels, superior to the plaintiffs who were finders of them, and that by the agreements made between the State and those two landowners these rights have become vested in the State.
That conclusion would obviate the necessity to reach a conclusion as to whether the plaintiffs, by reason of the fact that their finding of these objects constituted a trespass by the digging in the soil would, in any event, lose any right to possession they might have. This matter was very fully argued, however, and I feel that although it is not necessary for the decision of this case that I should express a view upon it. I do not consider that having regard to the fact that the allegation that the plaintiffs acted contrary to s. 14 of the National Monuments Act 1930 is an allegation of the commission of a criminal offence, that the evidence could support such a conclusion. The subsection involved is s. 14(1)(6) of the Act which makes it an offence to excavate, dig, plough or otherwise disturb the ground within, around, or in proximity to any such national monument without or otherwise than in accordance with the consent hereinafter mentioned. Such evidence as was given, and it does not appear to have been in any way emphasised or fully investigated with regard to the relationship between the area in which the hoard was found and the buildings constituting the national monument does not appear to me to form a safe base for even prima facie establishing a criminal offence.
With regard to the question of trespass, however, the position would appear to be as follows. The learned trial judge found that the act of digging was an act of trespass, and even though the plaintiffs may have entered with the implied licence of the owners, as was found by him, this would lead to the legal conclusion that they then became, upon commencing to dig, trespassers ab initio.
As such, the general principle of public policy seems clearly to be that they should not, because of that trespass, acquire any rights of ownership to the land or things found in it.
It was submitted on behalf of the plaintiffs that their trespass was minimal or certainly not very serious and that this altered what otherwise might have been the legal position.
There can be no doubt that the plaintiffs in this case behaved extremely responsibly once they found these objects and that their conduct *590 subsequent to the finding of them, both in the discretion with which they approached the Museum and the expedition with which they did so, and in the very active co-operation which they subsequently gave to the officials of the Museum concerning the find, was exemplary.
The principle which I have shortly outlined, that the law leans against the acquisition by a person of property rights by trespass, save in cases of prescription, is based on the requirement of the common good that the ownership and right to possession of land shall be protected from an unlawful invasion of it. There does not appear to me to be any grounds in logic or justice for a rule of law that a person who by a trespass of little extent obtains possession of a very valuable chattel would be exempt from this provision of the law, whereas a person committing a larger or more extensive trespass, and possibly deriving a much smaller profit would be penalised by it.
I would, therefore, conclude that even if the right of ownership of the hoard as between the owners of the land and the finders were different from what I have stated it to be, that the fact that these plaintiffs are finders by an act of trespass would disentitle them to any rights in the objects found, certainly as between them and the owners of the land.
On behalf of the plaintiffs challenge was made to the validity of the ‘conveyances’ obtained by the State from Messrs O’Brien and O’Leary. This was based on the fact that they are described as conveyances and yet do not appear to have been executed under seal. I am satisfied that there is nothing in this submission. What was being conveyed was the right to possession and ownership of the two owners of the land in the objects which had been found in it. These were, of course, chattels, and in the circumstances the written acknowledgment of the agreed consideration, coupled with the asserted transfer of the rights of ownership and title were sufficient to vest all the rights of the landowners in the State.
I am, therefore, satisfied that upon the execution of these documents and the payment of the money, the receipt of which is acknowledged in them, that the State became entitled to the ownership and possession of these objects subject only to the establishing by some person of a title to ownership as the ‘true owner’. In other words, it would be necessary to deprive the State of its ownership for a person to assert and establish that he was validly the successor in title to the person who owned the objects and was entitled to possession of them at the time they were, as was found by the learned trial judge, concealed in the pit in the bank.
Having regard to this view, it was not for the purpose of the main claim made by the plaintiffs in this action, namely, for the return of the hoard, necessary to determine the issue as to whether and to what extent the right or prerogative of treasure trove is part of the law of Ireland.
The plaintiffs, however, in the alternative, have claimed that in the event of their submission that the right of treasure trove was not part of the law of Ireland failing that, a constituent part of that right was the entitlement of the finder of treasure trove to a reward; that they the *591 plaintiffs as finders of so much of the hoard as constituted treasure trove were entitled to such a reward and that on the facts of the case and, in particular, on the statements made on behalf of the State by the Director of the National Museum, that they had a legitimate expectation to a reasonable reward, enforceable in the courts.
To deal with this claim it is necessary, in the first instance, to determine whether the right or prerogative of treasure trove is part of our law.
The defendants have submitted that it is part of the law on two quite separate grounds.
Firstly, it is contended that the prerogative of treasure trove was a royalty or franchise within the territory of the Irish Free State and that as such it was expressly vested in the Irish Free State by the provision of Article II of the Constitution of the Irish Free State (the 1922 Constitution). That being so, it is argued, the provisions of Article 49.1 of the Constitution vest that prerogative in the People and the provisions of Article 49.2 provide that it shall be exercised by or on the authority of the Government.
The second and quite alternative ground on which it is alleged the prerogative of treasure trove has survived into the law of Ireland is an assertion that as part of the wider and more general right of bona vacantia it is an inherent and necessary attribute of a sovereign State and that since this State is by virtue of Article 5 of the Constitution declared to be a sovereign State that it must follow that it is entitled to the prerogative of treasures trove.
To examine these two contentions it is, in my view, necessary, as shortly as possible to consider the nature and to some extent the history of what is known in law as the prerogative of treasure trove.
Treasure trove as we know it, is a creature of the common law. It is part of the more general right of bona vacantia which is the common law of England belonged to the Crown. The general purpose of the vesting of the property in bona vacantia in the Crown is usually stated to have been to prevent the strife and contention to which title by occupancy might otherwise give rise in relation to goods, land or rights to which no one can make a lawful claim.
With regard to that prerogative of treasure trove, however, it would seem clear that, historically, it also had the major purpose of being a source of revenue for the Royal Mint.
It applied only to valuable chattels which it could be established were concealed for the purpose of protecting them and with the intention of subsequently recovering them by the person who hid them and which were made of the precious metals of silver or gold, a combination of them or an alloy containing a substantial ingredient of either or both of them. The right of the Crown to the possession and ownership of such treasure trove was subject always to the obligation to restore it or its value to the ‘true owner’ if he could be found.
*592
It would appear obvious that the confining according to the common law of the right of treasure trove to gold and silver objects or objects substantially made of either or both of these metals was directly associated with the purpose of enriching the Royal Mint, and it is stated in most of the textbooks concerning this topic that in early days treasure trove when recovered by the Crown was frequently melted down into coin.
It would appear that since the accession of George III the right to treasure trove vested in the Crown has been part of the surrendered revenue of the Crown, surrendered by each succeeding monarch to the Treasury for his lifetime in return for the provision of the Civil List.
It would appear that from the earliest times the right to treasure trove was enforced on the one hand by penalties imposed on the finders of such treasure trove who failed to reveal to the appropriate authorities the find and failed to yield them to the Crown, and on the other hand by the giving of rewards to those who did reveal their finds and yielded them to the Crown.
By the 19th Century it is quite clear that the prerogative treasure trove in England and in Ireland continued to be exercised on behalf of the Crown by the Government of Great Britain and Ireland but for a purpose wholly different from that which had been its historical origin. Its purpose now clearly was the retention by the State, for the common good, of antiquarian objects, interest and value, which formed part of the heritage of the people.
Thus, during this period it would appear, for example, that internal arrangements were made by the Treasury of the British Government, dealing with the scale and measure of rewards for the finding of treasure trove which were quite inconsistent with the possibility of the acquisition by the State of the objects of treasure trove for the purpose of profit. Furthermore, the right or franchise of treasure trove in Ireland was apparently de facto exercised on behalf of the State by the Royal Irish Academy who received a grant from the Treasury for the purpose of providing rewards and who do not appear to have had any obligation to account in any way to the State for the value of what they might have acquired under this right.
In general terms, it would appear that at common law the payment of a reward to the finder of treasure trove was an act of grace and the finding and giving up of treasure trove to the State or its agent was not considered to confer on the finder any right enforceable at law to the payment of any particular reward or of a reward at all.
Having regard to this very brief summary of the apparent history and characteristics of the prerogative of treasure trove, I have, with regard to the submissions made on behalf of the defendants, under two separate headings, come to the following conclusions.
I agree with the view reached by the learned trial judge in this case that on the authority of Byrne v Ireland no royal prerogative in existence prior *593 to the enactment of the Constitution of 1922 was by virtue of the provisions of that Constitution vested in the Irish Free State. I agree with the judgment of Walsh J in Byrne v Ireland which was expressly concurred in by a majority of the court that the provisions of Article 2 of the Constitution of 1922 declaring the Irish Free State to be a Sovereign State and the provisions of Article 51 of the same Constitution expressly vesting in the King certain executive functions, being the executive functions of the Irish Free State, are inconsistent with the transference to that State of any royal prerogative. As is also set out in the decision in Byrne v Ireland it must follow from this conclusion that the royal prerogatives were not prerogatives exercisable in Saorstát Éireann immediately before 11 December 1936 and were therefore not captured by Article 49.1 of the Constitution.
It was contended on this appeal that it was possible to distinguish between a prerogative of immunity from suit, which was the subject matter of the decision in Byrne v Ireland and which could be traced to the royal dignity of the King and a prerogative of treasure trove which it was stated could be traced or related not to the dignity of his person but to his position as sovereign or ruler. Such a distinction does not alter the view which I have expressed with regard to the effect of the provisions of the Constitution of 1922, and appears to me to ignore the essential point which is that by virtue of the provisions of the Constitution of 1922 what was being created was a brand new sovereign State and that the function, power or position of the King in that sovereign State was such only as was vested in him by that Constitution and by the State created by it.
With regard to the second submission made by the defendants concerning the question of the prerogative of treasure trove, I have come to the following conclusions.
Article 5 of the Constitution declares that ‘Ireland is a Sovereign, Independent, Democratic State’.
Article 10.1 of the Constitution provides as follows:
All natural resources, including the air and all forms of potential energy, within the jurisdiction of the Parliament and Government established by this Constitution and all royalties and franchises within that jurisdiction belong to the State subject to all estates and interests therein for the time being lawfully vested in any person or body.
Article 10.3 provides as follows:
Provision may be made by law for the management of the property which belongs to the State by virtue of this Article and for the control of the alienation, whether temporary or permanent, of that property.
I am satisfied that the phrase ‘all royalties’ contained in Article 10.1 of the Constitution, construed in the light of Article 5, must be widely construed and must include one of the definitions of royalty to be found in the Shorter Oxford English Dictionary , namely, the sovereignty or sovereign rule of a State.
*594
It would, I think, now be universally accepted, certainly by the People of Ireland, and by the people of most modern States, that one of the most important national assets belonging to the people is their heritage and knowledge of its true origins and the buildings and objects which constitute keys to their ancient history. If this be so, then it would appear to me to follow that a necessary ingredient of sovereignty in a modern State and certainly in this State, having regard to the terms of the Constitution, with an emphasis on its historical origins and a constant concern for the common good is and should be an ownership by the State of objects which constitute antiquities of importance which are discovered and which have no known owner. It would appear to me to be inconsistent with the framework of the society sought to be protected by the Constitution that such objects should become the exclusive property of those who by chance may find them.
The existence of such a general ingredient of the sovereignty of the State, does, however, seem to me to lead to the conclusion that the much more limited right of the prerogative of treasure trove known to the common law should be upheld not as a right derived from the Crown but rather as an inherent attribute of the sovereignty of the State which was recognised and declared by Article 11 of the 1922 Constitution.
For the purpose of determining the issues in this case, therefore, I would conclude that there does exist in the State a right or prerogative of treasure trove, the characteristics of which are the characteristics of the prerogative of treasure trove at common law which I have already outlined in this judgment as they stood in 1922.
As I have already indicated, it would appear that the characteristics of the right to prerogative of treasure trove at common law included the practice of rewarding a diligent and honest finder who revealed his find and yielded the object of it to the Crown. This practice is, however, apparently established as one of grace only and not conferring a legal right enforceable by the courts.
The plaintiffs’ alternative claim for the enforcement by this Court of a right of reward in respect of so much of the hoard as constituted treasure trove is based on an assertion that a combination of the practices both of the British Treasury prior to 1922 and of the State through the agency of the National Museum since that time and the particular conversations and conduct of the officials of the National Museum acting as agents for the State after the finding of this hoard gave to the plaintiffs a ‘legitimate expectation’ of the making to them of a substantial reward by the State which they are entitled to enforce in the courts.
In support of the assertion that they are entitled to rely on a ‘legitimate expectation’ the plaintiffs point to the evidence which was adduced, some of it undoubtedly being hearsay but apparently without objection, as to the rewards which had been paid in the past by the Museum in respect of the finding of antique objects and in respect of interdepartmental or administrative minutes and decisions made with regard to the general *595 approach to such rewards. In particular, of course, they rely on the statement already noted in this judgment and accepted by the learned trial judge, made by the Director of the National Museum at the very first interview with the first-named plaintiff that he would be treated honourably.
It would appear that the doctrine of ‘legitimate expectation’ sometimes described as ‘reasonable expectation’, has not in those terms been the subject matter of any decision of our courts. However, the doctrine connoted by such expressions is but an aspect of the well-recognised equitable concept of promissory estoppel (which has been frequently applied in our courts), whereby a promise or representation as to intention may in certain circumstances be held binding on the representor or promisor. The nature and extent of that doctrine in circumstances such as those of this case has been expressed as follows by Lord Denning in Amalgamated Investment & Property & Co Ltd v Texas Commerce Investment Bank Ltd [1982] QB 84, 122:
When the parties to a transaction proceed on the basis that an underlying assumption — either of fact or of law — and whether due to misrepresentation or mistakes makes no difference — on which they have conducted the dealings between them — neither of them will be allowed to go back on that assumption when it would be unfair or unjust to allow him to do so. If one of them does seek to go back on it, the courts will give the other such remedy as the equity of the case demands.
Applying the law as there stated, which seems to me to accord with fundamental equitable principles, I am satisfied that the unqualified assurance given to the first-named plaintiff by the Director of the National Museum that he (Mr Webb) would be honourably treated was an integral part of the transaction under which the hoard was deposited in the Museum and accepted on behalf of the State, and that the State cannot now go back on the assurance. It must be given effect to in the form of a monetary award of an amount which is reasonable in the light of all the relevant circumstances.
It is not necessary to rule on the submission made on behalf of the plaintiffs that, regardless of any specific assurance given on behalf of the State, the plaintiffs are entitled as of right, as finders, to appropriate monetary payment for the treasure trove acquired by the State. As I have indicated, the right to treasure trove asserted by the State in this case is essentially the right vested in the State by reason of its sovereign nature bearing the characteristics attached to it by the common law prior to 1922. Prior to 1922 it appears to have been the practice in this country to give monetary rewards to finders of treasure trove. The defendants contend that such rewards were mere honoraria given as a matter of grace and not on foot of any legal liability to give them. The plaintiffs on the other hand contend that the giving of rewards to finders of treasure trove was so well-established and regular that the expectation of a reward in this case was so well-founded that the courts should give effect to it.
*596
It is not necessary for the resolution of this case to choose between those two submissions. In my opinion the plaintiffs’ claim for compensation rests solidly on the fact that the assurance given to Mr Webb that he would be honourably treated (which should be held to mean that he would be reasonably rewarded) was an integral part of the transaction whereby he deposited the hoard in the National Museum. It would be inequitable and unjust if the State were to be allowed to repudiate that assurance and give only a meagre and disproportionate award. For the State to avoid giving the plaintiffs a reasonable reward would not be to treat them honourably.
Evidence of the amounts paid in respect of previous finds of valuable antiques tendered in the High Court does not appear to me to assist in any particular way as to the appropriate amount which should be paid in this case for no distinction seems to have been made in those circumstances between objects of antique or historical value which were gold and silver and those which were not. In particular, the only comparable object which was found and brought into the possession of the National Museum would appear to be the Ardagh Chalice and certainly the evidence tendered with regard to the amounts paid to various people in respect of that find would indicate a total absence of relationship between its true commercial or market value and the amounts paid.
Having reached the conclusion, however, as I have done in this judgment, that treasure trove is a royalty or franchise vested in the State by virtue of its sovereign nature and having reached the further conclusion that there is associated with that a right of the plaintiffs in the particular circumstances of this case to a reasonable reward, I find that I am dealing with a situation in which a finder has got a right to a reward for which the law has not yet provided a precise method of assessment.
Whilst I have already decided that the fact that the finding of them arose from an act of trespass, namely, the digging in the land to enter which they had an implied licence would, apart from other considerations, defeat any right they had to the possession of the objects as between them and the owners of the land, I do not consider that the extent and the nature of the trespass in this case, having regard in particular to the subsequent conduct of the plaintiffs with regard to the hoard, could or should, as a matter of public policy, disentitle them to a reasonable reward. In particular, the statement upon which they rely which was in my view properly made, by the Director of the National Museum, after he had been made aware of the circumstances of the finding of this hoard, would be inconsistent with any such loss of rights.
It is not possible at this stage and in the absence of specific legislation to set out in any exhaustive detail the factors which might or should, as a matter of policy cover the assessment of what is a proper or reasonable reward for the finding of objects of treasure trove. As I have already indicated, evidence with regard to past payments made for antiquities are of little value, having particular regard to the fact that there is a great *597 absence in most of the cases of evidence with regard to the nature of the contents of such antiquities or to any independent assessment of their value.
It would appear to me that factors which would be certainly of relevance are the general value and importance of the objects found; the circumstances of their finding; and the nature and extent of rewards granted in other instances of treasure trove. Lastly, and of very considerable importance, is the attitude and conduct of the finders of the objects after they have been found and the alacrity with which their finding is disclosed and their possession is surrendered to the appropriate authorities. Consideration must also, in my view, be given to a situation where objects are found by an act of trespass, even though that may be not of any flagrant type and even though that may not, as on the facts of this case, disentitle the finders to their reward.
It appears to me that on the evidence which is before this Court and which was before the High Court, coupled with the finding by which this Court is bound, with regard to the market value of the objects found, that this Court is in as good a position as would be the High Court to assess a reasonable reward, having regard to the considerations which I have above outlined. In those circumstances, in litigation which has not in the courts had anything like a lengthy history but which being brought to the courts was delayed from the time of the finding of these objects, I think it is proper that this Court should itself assess the appropriate reward.
Having regard to all the considerations which I have set out above, I would assess a sum of £50,000 as a reward to the finders of this hoard to be divided equally between the two plaintiffs.
I do not intend to imply by anything contained in this judgment that the right or prerogative of treasure trove which I find to be vested in the State may not be enlarged or varied by legislation.
Indeed, the circumstances of this case may be thought to point to the necessity for such legislation. The right to treasure trove with which I have been dealing in this judgment is but an outmoded remnant of the mediaeval prerogatives which were vested at common law in the monarch. As such, its characteristics which restrict the nature of the articles to which it applies; the circumstances to be inferred as to the hiding or concealment of those objects and the vagueness as to the respective rights of the State and the finder may indicate that a variation and extension of the State’s rights in regard to ownerless articles of national importance which have been found may be called for.
It may be thought proper, for instance, to provide that all (or specified kinds of) articles or items of archaeological, historical, antiquarian or cultural value or interest should when apparently ownerless on being discovered or brought to light be deemed to vest in the State subject to the claim if established of the true owner. Such a provision might well abolish both any distinction between objects made of different materials and any request for evidence that the objects had been hidden for safe *598 keeping. In ordinary cases it would probably be desirable to have a system of reward so as to encourage finders to deliver up articles or items so found. It may be thought proper that any such system of reward should be counterbalanced by penalties applicable to improper excavation of such articles or to their concealment when found.
However, what precise changes should be made in the law is something outside the jurisdiction of his Court and is exclusively a matter of legislative policy.
I would allow his appeal by setting aside the order appealed against and substituting for it an order
(a) Dismissing the plaintiffs’ claim against the State, that they (the plaintiffs) are entitled to the return of the Derrynaflan Hoard.
(b) Declaring the State to be the owner of the hoard subject to the rights of any person capable of proving ‘true ownership’.
(c) Ordering the State to pay to each of the plaintiffs as finders of the hoard a sum of £25,000 as a reward.
WALSH J:
The facts of this case have been so fully set out in the judgment which has just been delivered by the Chief Justice that I do not find it necessary to repeat any of them.
The Chief Justice has set out in five paragraphs the conclusions of the learned High Court judge. The sequence is not exactly the same as that of the High Court judge in his own judgment but I propose to deal with the matters in the order which has been followed by the Chief Justice.
The defence raised in the High Court by the defendants was to rely upon the claim that the former royal prerogative in relation to treasure trove was still applicable in the sense that it was claimed that the State was the successor in title of such prerogative. The claim which the State made to the ownership of the chattels in question was founded on that assertion and was to the effect that it superseded any claim of right of the plaintiffs. For the reasons given by the Chief Justice in the course of his judgment I am of the opinion that this claim by the defendants based on succession to the royal prerogative was rightly rejected by the learned High Court judge and that it cannot be sustained in this or any court. If the State has a rightful claim then it must be found elsewhere. That is a matter to which I shall return later in this judgment. However, so far as the High Court is concerned once the learned High Court judge has reached his decision to reject the State’s claim to a royal prerogative the question of bailment became of great importance. The claim of the museum authorities, voiced through the State, to retain the articles in question notwithstanding that they were bailees of the objects had to be rejected as the claim was based, and apparently solely based, upon the title claimed through the royal prerogative. I agree with the view expressed by the learned High Court judge that all other things being equal, a bailee is not entitled to challenge the title of the bailor.
*599
In this case the chattels were left with the museum authorities, as a State agency, and they were left with them for safe keeping pending the outcome of any determination of legal ownership. The bailment was a gratuitous bailment which conferred no rights upon the bailee as such even though it may have imposed certain liabilities. This case is not concerned with that latter aspect of bailment. A gratuitous bailee is precluded from using a chattel bailed in any manner whatever without the express and complete consent of the bailor, unless such use is needful for its preservation. The chattels were not bailed to the bailee for the purpose of being used for any certain time, or at all, but solely for safe keeping pending the outcome of the establishment of legal title. Being a gratuitous bailment it was open at any time to the bailor, in this case the respondents, to call for the return of the article. Other things being equal the bailee could not legally refuse to return them. The objects were bailed to the museum authorities as agents of the appellants and they were not received by the museum authorities as stakeholders or in any similar capacity.
In this case, the bailee’s principal, namely the State, asserted a title based on the alleged succession to the royal prerogative of treasure trove. That being the case, then the judge, in my view, was perfectly correct in holding that as the claim to title set up by the bailee in the defence to the claim for return of the goods could not be sustained he was obliged to order the return of the goods to the bailor without determining the title of the bailors. I am of opinion that the use of the words ‘pending determination of the legal ownership’ adds nothing to the matter once the bailees have failed, or their principles have failed, to establish the title which they asserted. It is also my opinion that if a claim for the return had been made before, and without waiting for the title to be established, the bailees would have no legal answer to the claim to return the goods on demand having regard the nature of the bailment unless they were able to establish a claim of title on behalf of themselves or their principals. This they failed to do. This aspect of the case does not concern any claim by a third party because the bailees were quite clearly acknowledged to be and were treated as agents of the appellants. At no time did the bailees, namely the National Museum authorities, assert a claim on behalf of any part other than the State. Obviously if the bailee can establish a title for himself or for his principals he has ousted the title of the bailor and the matter ceases to be one of bailment. However, that is not what happened in the present case.
But in so far as the learned High Court judge held that the bailees could not avail of a title to the goods acquired after the bailment, it appears to me that he was not correct.
The second ground of defence which was offered by the appellants in the High Court was that if they did not have a right to the title before the bailment, they did acquire the title by assignment from those who had it before it was sought to determine the bailment. This post bailment title, *600 which is asserted, is claimed to be derived from the owners of the lands in which the chattels were found, namely Messrs O’Brien and O’Leary. The landowners had by an agreement, for consideration of £25,000 to each of them, assigned to the State all their title to the chattels found. Naturally, this was only effective to pass title if they had any title.
This claim is based on the argument that the owner of the fee simple of the land is entitled to any chattel which may be on the land against any finder of the chattel upon the land. There is legal authority for such proposition and, also, there is legal authority to distinguish between a claim which the owner of land may assert in respect of objects found upon this land as from those which are found in or under the land surface. The Chief Justice in his judgment has referred in some detail to the legal authorities in question and has analysed them.
These cases reflect that the importance which appears to have been attached to the ownership of lands was such as to denigrate, if not obliterate, the true title claimed in respect of the chattels themselves.
I think it is true to say that there is no such thing as a chattel which has never had an owner. In this particular case the judge found as a fact that the chattels had been placed in or on the land for safe keeping. I say in or on the land because I have regard to the number of centuries that has elapsed which makes it difficult to say whether the initial hiding place was beneath the surface of the soil or simply achieved that situation through the course of time. On the view I take of this case it is not necessary for me to decide whether some distinction should be drawn between the chattels found upon the land and those found in land or under land. Leaving aside any question which might arise under the Statute of Limitations, 1957, which was not relied upon in this case, it cannot be asserted that these articles were abandoned in the sense that ownership had been abandoned. If chattels are expressly or by implication abandoned in favour of a particular and ascertainable person or persons then the chattels become the property of that person or those persons if they accept them. If they do not accept them then the chattels have no particular owner. Articles cannot be regarded as lost if they are intentionally placed in a particular situation. In my opinion it would be a great injustice if the true owner of the chattels, having intentionally placed them in a particular place for safe keeping and then cannot recall where he placed them, or where he did not have an opportunity to come back to recover them, should be deemed to have lost his title in favour of the owner of the lands in which he placed them. Strictly speaking nothing can be said to be lost in the literal sense if it continues to exist even though its owner may be unknown or because it has been unknowingly misplaced. Nothwithstanding the number and the weight of the authorities cited it is my opinion that the owner of the land upon which mislaid or unremembered chattels are intentionally placed for safe keeping, whether in or under the surface, cannot claim to be the owner of the chattels simply by reason of his being the owner of the land. To so hold would be *601 fail to vindicate the rights of property of the true owners of the chattels so placed and would permit the type of injustice which Article 40.3 of the Constitution is designed to prevent. The owner of such land is to be deemed to be in bare possession of the chattels even if he does not know of their existence on his lands. He can assert a good claim to possession, as distinct from ownership, against any claimant whether it be trespasser, or otherwise, whose claim is based on simply unearthing and removing the chattels in question. Even the former royal prerogative of treasure trove acknowledged that in so far as treasure trove was concerned the true owner, or his successors in title, could always claim ownership and possession of the treasure if he could establish title.
In the present case the owners of the land never sought to recover possession of the property. They simply sold their right of title, if any, which in my view was nil, to the State. They could not assign a right to bare possession divorced from ownership when they had already got permission. The Museum authorities, in accepting the goods as bailees, at no stage attempted to set up a true jus tertii in favour of or for the benefit of the owners of the land.
In so far the appellants sought to base their case on alleged breach of s. 141(b) of the National Monuments Act of 1930, I take the same views as those expressed by the Chief Justice.
The case does not concern chattels which are lost in the literal sense of the term or which were abandoned. The essential finding of fact by the trial judge was told that the chattels were left for safe keeping. Therefore, I am not concerned to offer any view on what might be the situation if the chattels were truly lost or abandoned.
In this Court the appellants sought to base their claim to ownership upon the provision of Article 10 of the Constitution of Ireland. In effect they abandoned the unsuccessful claim as successors of a royal prerogative.
I fully agree with the view expressed by the Chief Justice that it would now be universally accepted by the people of Ireland that one of the most important national assets belonging to the People is their heritage and the knowledge of its true origins, and the buildings and objects which constitute the keys to their ancient history. I also agree with him in his statement that it is a necessary ingredient of the sovereignty of a modern state, and for the reasons he gives, that is for the common good that there should be ownership in the State of all objects which constitute antiquities of importance and which are discovered to have no known owner. When I speak of ownership in this context, I speak of a claim of ownership as against all the persons except those who can establish a title by succession to the original owner of the chattels and other materials which make up this heritage. However, I do not wish to be understood as saying that it would not be within the competence of the Oireachtas to vest ownership in the State in the interest of the common good, in accordance with Article 43 of the Constitution, and subject to the *602 payment of just compensation, if in the circumstances justice required to payment of any compensation. I fully agree when the Chief Justice says that it would be inconsistent with the framework of the society which is created by the Constitution and which is sought to be protected by that Constitution that such objects could become the exclusive property of those who by design or by chance discover them and take possession of them. In my view that opinion applies to the owners of the land in or on which they are found or to any other persons who find them in or upon lands. But unless and until legislation be enacted the State must be regarded as owners in the sense of having a better right to possession than anyone else. I am content to base my opinion upon what I believe to be the fundamental duty of the State to safeguard all the national assets whether truly in the ownership of private individuals and more importantly, where the owner is not known or cannot be ascertained. It cannot be doubted that the chattels which are the subject of this case, fall within that category. I see no reason why it should be confined to such items as fall within the definition of treasure trove under the former law. In this country this definition would be of little benefit as so many of our antiquities in chattel form are not made of either gold or silver.
I regret that I cannot subscribe to the view that Article 10 of the Constitution rules this case. To understand Article 10 of the Constitution it is first necessary to look at Article 11 of the Constitution of Saorstát Éireann. It provided that
all the lands and waters, mines and minerals, within the territory of the Irish Free State (Saorstát Éireann) hitherto vested in the State … and also all the natural resources of the same territory (including the air and all forms of potential energy, and also all royalties and franchise within that territory shall … belong to the Irish Free State (Saorstát Éireann), subject to any trusts, grants, leases or concessions then existing in respect thereof, or any valid private interest therein and shall be controlled and administered by the Oireachtas …
This was considered and analysed by Kingsmill Moore J in Irish Employers Mutual Insurance Association Ltd, In re [1955] IR 176 at p. 220 to 222. (The judgment was actually delivered in 1950).
I agree with his conclusions that Article 11 owed its political philosophy and statement of principle to, and indeed reflected, the Declaration of Independence and the Democratic Programme issued by the First Dáil at its first meeting in January, 1919. The latter document proclaimed the right to the ownership of Ireland in the following terms:
We declare, in the words of the Irish Republican proclamation, the right of the people of Ireland to the ownership of Ireland. We declare that the Nation’s sovereignty extends not only to all men and women of the nation, but to all its material possessions, the nation’s soil and all its resources.
That was a categorical rejection of all notions of royal rights or privileges and this was repeated by Article 11 of the Constitution of Saorstát where Article 11 differed in some details from the Democratic Programme of 1919 was that Article 11 did not speak of ‘all its material possessions’ or to ‘all its resources’. Those expressions were sufficiently wide to capture chattels and artifacts. Article 10 of the Constitution of Ireland provides in section 1 that
all natural resources, including the air and all forms of potential energy, within the jurisdiction of the Parliament and Government established by this Constitution and all royalties and franchises within that jurisdiction belong to the State subject to all estates and interests therein for the time being lawfully vested in any person or body.
That Article is for all practical purposes in this case the same as Article 11 of the Constitution of Saorstát Éireann. The word ‘lands’ and the word ‘waters’ which appeared in the former Article 11 are not repeated in the present Article 10.1. That is of no consequence as the expression ‘all natural resources’ captures both. The effect of the article is that the State is the ultimate owner of all the matters therein mentioned and is by Act of the Oireachtas the ultimate intestate successor of all property capable of being the subject of succession; see s. 65 of the Succession Act 1965. It is to be noted that the State’s immediate interest in mines and minerals arises largely from various provisions of the Land Acts which reserved to the Land Commission mining rights in respect of land sold by the Commission and vested them in the State and the development of them was dealt with by the Mines and Minerals Act 1979.
This case is concerned with artefacts, that is to say, with the product of human art and workmanship. Artefacts are quite distinct from similar and other objects naturally produced. When Article 10 speaks of ‘all natural resources’ it cannot, in my opinion be held to include arterfacts. They could have been captured by the wording of the Democratic Programme of 1919 where it spoke of ‘all its material possessions’ and also where it spoke of ‘all its resources’, because of the reasons already given articles of the nature of those the subject of the case must in the context of the national heritage be regarded as part of the ‘natural resources’. However as I have already mentioned these phrases were omitted from the former Article 11 and the present Article 10 and therefore cannot be captured under the heading of ‘natural resources’, instead they are to be regarded as ‘national resources’.
What then is the meaning to be attached to the reference to ‘all royalties and franchises’ in the context in which these expressions appear. In their primary and original meanings both words were related to the royal privileges and prerogatives. A franchise was a royal privilege in the nature of a prerogrative when enjoyed by the King but became a privilege when he granted it to a subject.
As was pointed out in the Attorney General of Ontario v Mercer (1882) 8 App. Cas. 767 at pp. 778 and 779 the expression ‘royalties’ in its primary and natural sense is merely the English translation or equivalent *604 of jura regalia or ‘royal rights’. Having regard to the history of the former Article 11 and the present Article 10 the word cannot be so construed in this case. In the Canadian case referred to above the phrase under consideration was ‘all lands, mines, minerals, and royalties belonging to the several provinces of Canada …’ which appeared in s. 109 of the British North America Act 1867. The question was whether ‘royalties’ referred to the lands, mines and minerals or only to the mines and minerals. The Privy Council, which was dealing with royal rights, saw no reason to restrict the interpretation to mines and minerals to the exclusion of lands on the basis that ‘it is a sound maxim of law, that every word ought, prima facie, to be construed in its primary and natural sense, unless a secondary or more limited sense is required by the subject or the context’.
In the present case for the reasons given it is quite clear that the expression ‘royalties’ cannot be given its primary meaning. Therefore the question is, is there a secondary meaning available in keeping with the context of Article 10 of the Constitution? In view of the references to ‘natural resources’ and ‘all forms of potential energy’ it is my opinion that ‘royalties’ is to be construed as referring to the sums paid or payable for the use or exploration of the natural resources, particularly in respect of mines and minerals and the sources of potential energy all of which belong to the State by virtue of Article 10 subject to all estates and interests for the time being lawfully vested in any person or body. In my opinion to equate the word ‘royalties’ in the context in which it appears in Article 10 with the sovereignty or the sovereign authority of the State would be to say that the sovereignty of the State is conferred by Article 10 whereas it is asserted and declared by Article 5 of the Constitution.
I am satisfied that the people as the sovereign authority having by the Constitution created the State, and by Article 5 declared it to be a sovereign State, have the right and duty, acting by the State which is the juristic person capable of holding property by virtue of the Constitution, to exercise dominion over all objects forming part of the national heritage, whether they be found or not, subject always to the lawful title of a true owner if and when the true owner is discovered and to exercise full rights of ownership when no true owner can be ascertained.
It is within the power of the Oireachtas, acting on behalf of the people, to make such arrangements as it sees fit by legislation for the disposal or other use of all such objects, subject to all provisions of the Constitution as the Oireachtas deems proper in the interest of the common good. While it is not for this Court to indicate to the Oireachtas how this power should be exercised it is the duty of this Court to state that pending any such legislation the State is entitled to possession of all such objects unless and until the true successors in title of those who hid them for safe keeping can be ascertained.
With regard to the claim that the plaintiffs/respondents should be entitled to some reward for discovering and taking possession of these *605 articles special considerations apply. I fully recognise that as a matter of prudence and indeed as a way of safeguarding similar such objects as may in the future be found that it could well be regarded as expedient on the part of the State, not merely to reward such persons but generously to reward them for the sake of ensuring, or assisting in ensuring, that the objects will be disclosed to the State and will be dealt with by the State, for the benefit of the common good in accordance with the law for the time being in force. There is evidence that experience in other countries indicates that the more generous the reward the greater is the assurance of the continued availability or even survival or such objects. While it is hoped that the State in its legislation or in the exercise of its other powers might see matters in the same way, particularly in the case of persons as honest and as frank as the present plaintiffs that is a matter for the Oireachtas. For the reasons I have already given I take the view that the owners of the land were not entitled to assert a claim to ownership. It was their good fortune that the State saw fit to pay them. On the basis of ordinary justice it appears to me that the plaintiffs should be equally entitled, if not more entitled, legitimately to expect to be rewarded on a no less generous scale. I agree with the opinion of the Chief Justice on this topic already expressed in his judgment.
McCARTHY J:
It is difficult to exaggerate the importance, nationally, historically, and aesthetically of the Derrynaflan Hoard, all objects of religious significance, found within the precinct of an ancient monastery, and appearing to range in date from the later 8th and the 9th century. The trial judge found that the hoard had clearly been buried in the pit in which it was found with the object of concealing it. It had probably been there since the later 9th or 10th century. It was found by the first-named plaintiff together with his son, the second-named plaintiff, using metal detectors, on 17 February 1980 when they had the implied permission of the owners of the land to go there, but did not have any permission to dig in the lands as they did when the metal detectors disclosed the presence of what turned out to be this hoard of treasure of such quality and nature as to produce a reaction of numbness in the Keeper of Irish Antiquities in the National Museum and editor and part author of ‘The Derrynaflan Hoard — I — A Preliminary Account’, to which I am indebted for the summary I have given. Apart from the items found by the Webbs, in the course of further excavations carried out by the National Museum, a number of missing components were found in the spring of 1980. On 18 February 1980, when Mr Webb, senior, delivered the hoard as found by him and his son to Dr Ó Ríordáin, the Director of the Museum, he did so with an accompanying letter from the Webbs’ solicitors stating ‘we have accordingly advised our client that he should deliver these articles to your care for the present and pending determination of the legal ownership or status thereof; and also, of course, subject to any rights to payment or reward which our client and his son have.’ Dr. Ó Ríordáin *606 told Mr Webb that he would be honourably treated but no approach was made to him until 16 June 1981 when the Chief State Solicitor, on behalf of the Government, made an offer of an award of £10,000 to the plaintiffs, which offer was rejected on 23 November. The National Museum had set about ascertaining who were the owners of the land and on 7 July 1981 the Minister for Education paid the owners £25,000 each as consideration for the conveyance to the Minister
absolutely and free from charges or encumbrances, all rights, property or interest that I may have in the objects now known as the Derrynaflan Hoard and in the possession of the National Museum of Ireland and mentioned in the schedule hereto which were found on or about 17 February 1980, and on dates subsequent thereto, on the lands …
Dr. Ryan had valued the hoard at between 2.5 and 3 million pounds; the learned trial judge subsequently found the value to be over 5.5 million pounds. The National Museum sought to honour its undertaking; other agencies took a more niggardly view resulting in the offer of £10,000.
Estoppel No. 1
The State, through the Minister for Education, has bought whatever title the landowners had. If the landowners had a good title in possession, that is, paramount to such right of possession as the plaintiffs might have had as finders, then such title passed to the Minister. I do not find any estoppel.
Rights of the Landowners
I have considered the observations of the Chief Justice and of Walsh J holding that the landowners had a right to retain possession (Walsh J) or a right to these chattels, superior to the plaintiffs who were the finders of them (the Chief Justice).
Estoppel No. 2
Assuming that such right as the landowners had was limited to a right of possession, it would seem to follow that when the National Museum took as I believe they did take the hoard as bailee, it was an implied term of the bailment that the bailor, the Webbs, had a good title. Whilst I recognise that the terms of the solicitor’s letter ‘pending determination of the legal ownership’ recognises that such ownership may lie elsewhere, it does not, in my view, affect the limited implication of the bailment that the bailor had a better title than the bailee. Accordingly, I would accept the conclusion of the learned trial judge that the State is estopped from denying the title of the bailor and so is estopped from claiming that the plaintiffs’ possession was unlawful. This is no way inconsistent with my conclusion that the first plea of estoppel is not good in law.
The Right Itself
Despite the authority cited by the Chief Justice, which, in this context, was not considered by the trial judge, who held against the State on *607 estoppel No. 1, I am far from satisfied that ownership of land necessarily carries with it either ownership or a right to possession or other right in respect of chattels found in or over the land as against the claim of a finder. By definition, the owner, until the find, is unaware of the presence of the chattels; if the owner is a purchaser, he has bought and the vendor has sold for a price that takes no account of the chattels; these circumstances are quite apart from the problems that arise from the possible existence of a series of superior or inferior titles to the land, which term must, for this purpose, include real property of any kind. In this regard I find most persuasive the judgment of Whitehouse J, giving the judgment of the Supreme Judicial Court of Maine in Weeks v Hackett (1908) 71 Atl. Rep. 858 where English and American authorities up to that date (1908) were cited. In Armory v Delamarie 1 Strange 505, a chimney-sweeper’s boy found a jewel (presumably in a chimney) and brought it to the defendant who was a goldsmith to know what it was; the goldsmith gave it to his apprentice who, under pretence of weighing it, took out the stones, and called to the goldsmith to let him know it came to three halfpence, where upon the goldsmith offered the boy the money; he refused to take it and insisted on having it back whereupon he got the socket without the stones. Pratt CJ ruled:
1. That the finder of a jewel, though he does not by such finding acquire an absolute property of ownership, yet he has such a property as will enable him to keep it against all but the rightful owner, and consequently may maintain trover.
2. That the action well lay against the master, who gives a credit to his apprentice, and is answerable for his neglect.
3 As to the value of the jewel several of the trade were examined to prove what a jewel of the finest water that would fit the socket would be worth; and the Chief Justice directed the jury that unless the defendant did produce the jewel and show it not to be of the finest water they should presume the strongest against him and make the value of the best jewels the measure of their damages; which they accordingly did.
In Parker v British Airways Board [1982] 1 All ER 834, Donaldson L.J. cited Armory’s case at 837 stating that the rule as stated by Pratt CJ must be right as a general proposition and proceed to qualify it, particularly in the case of the trespassing finder. He said:
The person vis-a-vis whom he is a trespasser has a better title. The fundamental basis of this is clearly public policy. Wrongdoers should not benefit from their wrong-doing. This requirement would be met if the trespassing finder acquired no rights. That would, however, produce the free-for-all situation to which I have already referred, in that anyone could take the article from the trespassing finder. Accordingly, the common law has been obliged to give rights to someone else, the owner ex hypothesi being unknown. The obvious candidate is the occupier of the property on which the finder was trespassing. Curiously enough, it is difficult to find any case in which the rule is stated in this simple form, but I have no doubt that this is the law.
Public policy is an unruly horse; it is a form of judicial policy making, in this instance to be used to establish a right in someone who was *608 unaware of the subject matter of that right until it was brought to his attention by the person who is to be denied that right. Because of the view I take on what I regard as the most fundamental issue in this appeal, I do not find it necessary to express any concluded view; I do not accept that the defendants have established a right consequent on the transaction of 7 July 1981.
Article 10
In the defence it is contended that the Derrynaflan Hoard is treasure trove and as such the property of the State. Blayney J, relying upon the judgment of Walsh J in Byrne v Ireland [1972] IR 241 concluded that what had been the royal preogative of treasure trove was not carried over by Article 49.1 of the Constitution. In their notice of appeal the defendants challenged the judge’s conclusion in:
8. Holding that all royal prerogatives which had been part of the common law of Ireland ceased to be part of the law of Saorstát Éireann on the enactment of the Constitution of Saorstát Éireann, 1922.
9. Holding that the royal prerogative of treasure trove was not part of the law of Saorstát Éireann and was not carried over by Article 49.1 of the Constitution of Ireland and is not part of the law of Ireland.
10. Failing to distinguish the royal prerogative of treasure trove from the royal prerogative of immunity from suit.
11. Failing to hold that all or some of the articles which constitute the Hoard constitute treasure trove and are the property of the State.
Section C of the appellants’ written submissions dealt with whether the Hoard is the property of the State as treasure trove. Nowhere in the submission is there a reference to Article 10 of the Constitution or Article 11 of the Constitution of Saorstát Éireann. It appears to have been during the argument in this Court that for the first time the question arose as to whether or not the State might claim title to the chattels by virtue of Article 10. The Chief Justice recites this argument as:
Firstly, it is contended that the prerogative of treasure trove was a royalty or franchise within the territory of the Irish Free State and that as such it was expressly vested in the Irish Free State by the provisions of Article 11 of the Constitution of the Irish Free State (the 1922 Constitution). That being so, it is argued, that the provisions of Article 49.1 of the Constitution vest that prerogative in the People and the provisions of Article 49.2 provide that it shall be exercised by or on the authority of the Government.
The second and quite alternative ground on which it is alleged the prerogative of treasure trove has survived into the law of Ireland is an assertion that as part of the wider and more general right of bona vacantia it is an inherent and necessary attribute of a sovereign state and that since this State is by virtue of Article 5 of the Constitution declared to be a sovereign State that it must follow that it is entitled to the prerogative of treasure trove.
The Chief Justice rejects the first but upholds the second submission that a necessary ingredient of sovereignty in a modern state and certainly *609 in this State having regard to the terms of the Constitution is and should be ownership by the State of objects which constitute antiquities of importance which are discovered and which have no known owner. With this view I fully agree. Like Walsh J, I do not subscribe to the view that Article 10 of the Constitution covers the matter; I am content to found in my view upon the attributes of sovereignty possessed by the State derived from the People and identified by Article 5. What were formerly the subject of the royal prerogative as treasure trove or bona vacantia do not appear to me to fall within the term ‘natural resources’ or ‘royalties and franchises’; whether or not the subjection to all estates and interests for the time being lawfully vested in any person or body qualified both natural resources and royalties and franchises, by definition such estate or interest cannot be identified. The further sections of Article 10, in my view, lend force to the conclusion that the Article is concerned essentially with what is covered by ‘all natural resources’ and the royalties and franchises affecting or derived from them and not otherwise. For my part, I would not seek to indicate to the Oireachtas how the power to make arrangements for the disposal of or other use of such chattels should be exercised.
Reward
Whilst it may be contendeds that the plaintiffs were merely complying with law when they brought the Hoard to the attention of the National Museum, in my view, for the reasons that are set out in the judgment of the Chief Justice, they were entitled to rely on a legitimate expectation that the State would make to them a substantial reward and that they are entitled to enforce this in the courts. In this area of the case, indeed, I believe that public policy plays a significant role. Whatever criticism may be made of the plaintiffs in the use of metal detectors or for the fact that they dug below the surface in order to retrieve the Hoard, their subsequent conduct and attitude has been entirely praiseworthy; I would wish that I could say the same of those responsible for the assessing of the offer of £10,000 made to the plaintiffs, when the owners of the land ignorant of the existence of the treasure until found by the plaintiff and who had done nothing whatever save own the land, were each paid the sum of £25,000 from the same source.
I would allow this appeal accordingly and concur in the order proposed.