Trespass Overview
Cases
Poole v Burns
[1944] Ir Jur Rep 20 Davitt J:
If this had been a claim for conversion I should have had no hesitation in dismissing it, as I am satisfied that the defendant made no claim to this property, and never attempted to convert it to his own use. But the claim is for wrongful detention, and I am satisfied that a detention of some kind, against the will of the plaintiff has taken place. [Counsel for the defence] seeks to justify that detention by evidence that the defendant was in bona fide doubt as to the true ownership of the property, owing to the conflicting claims
made by the plaintiff and by a Miss Sheil who alleged the mare had been stolen from her. !
The cases he has cited establish the proposition that a bailee of property, who is in bona fide doubt as to the ownership thereof, is legally entitled to detain that property for a reasonable time in order to make enquiries or to have enquiries made as to who is the proper owner.
I have great sympathy with auctioneers and pawnbrokers and other people of that sort
who are frequently placed in such a difficult position. But I have come to the conclusion that in this case the defendant detained the animal for more than a reasonable time. If she ‘1 had made an effort she would probably have speeded up the police investigations, and it was the duty of her and not the plaintiff to do everything possible to secure the release of the animal. Instead of that she did nothing until her solicitor rang up the police on the 14th January and secured the release of the plaintiff’s property on the 16th.
I have no intention of giving heavy damages, because I am satisfied that the loss suffered on resale of the animal had nothing to do with the unlawful detention. That beingso, the plaintiff has suffered no financial loss, but in my opinion a technical wrong has been committed by the defendant and I give a decree for 1/- with costs.
Michael Hanley v. ICC Finance Ltd;
[1996] 1 I.L.R.M. 463 Kinlen J
D
This matter had been dealt with by His Honour Judge Lynch on 12 November 1993.
The plaintiff is a senior agricultural specialist and is working at the premises of the American Embassy at Ballsbridge, Dublin. In May 1992 he purchased a Volvo 440 motor vehicle, registration number 91 D 20565, from Huet Motors (Dublin) Ltd for the price of £10,250. He arranged his own financing and as far as Huet Motors (Dublin) Ltd were concerned it was in fact a cash transaction.
A receiver was appointed to Huet Motors (Dublin) Ltd on 29 July 1992 and a liquidator was appointed to that company on 17 August 1992.
The plaintiff, on the date of purchase was the only person in possession of the vehicle, registered it in his name and comprehensively insured it in his own name with the New PMPA Insurance Co. On purchasing the car, he registered his address at that time on the registration book. However, on retaxing the car in July/August 1992, he was in the process of moving house and in the circumstances he requested that the book be returned to him c/o the American Embassy, as he feared it might be lost. The embassy address was entered on the registration book.
Early on the morning of Friday, 27 August 1993, he received a telephone call at the embassy of the United States of America, from a Garda Andy Keegan, of Donnybrook Garda Station, who advised him that he, the guard, had been informed by the defendant that it was its intention to repossess the said vehicle from where it was parked, on the corner of Eglington Road and Clyde Road, adjacent to the embassy. The plaintiff looked out the window and found that the car had already been removed. He had no knowledge whatsoever that the defendant claimed ownership of the vehicle and during the 15 months when the vehicle was in his possession at no time did the defendant, its servants or agents or the receiver, or liquidator of Huet Motors (Dublin) Ltd contact him in relation to the motor vehicle.
The Circuit Court granted an interim injunction in the particular circumstances of this case to restrain the defendant from disposing of the vehicle. The plaintiff says that the repossession from adjacent to his place of work, was in a manner which brought it to the attention of his superiors, and that he was anxious to be in a position to show his workmates and his superiors that he had the same car. The defendant made no effort to contact the plaintiff. Prior to his purchasing it, it was openly for sale at the premises of Huet Motors (Dublin) Ltd. That company was registered as the previous owners but the defendant made no effort at that time to assert its ownership of the vehicle or to prohibit the sale of same by the said Huet Motors (Dublin) Ltd. The registration book and the certificate of motor insurance were produced to the court. The defendant, by a letter of 27 August 1993, states:
The car in question is subject to a lease agreement in favour of ICC Finance Ltd and in accordance with the terms thereof the title vests in ICC Finance Ltd. Accordingly your client is not entitled to the return of the vehicle. The vendor to him, Huet Motors (Dublin) Ltd, had no authority or title to sell.
There is also a receipt dated 22 May 1992 stating that the sum of £10,250 was received from Mr Michael Hanley by Huet Motors. The plaintiff’s case is based on two affidavits by the plaintiff, with exhibits and the defendant’s case is dependant on two affidavits sworn by its credit control manager, Edward Kingston, together with exhibits.
It would appear that ICC Finance Ltd purchased the Volvo 440 motor vehicle from Huet Motors (Dublin) Ltd for the sum of £12,260, inclusive of VAT on 23 May 1991. It was then leased for a fixed three month period from 24 May 1991 to Tipperary Rent-a-Car Ltd. That purchase and lease were entered into with a further agreement between ICC Finance and Huet Motors (Dublin) Ltd that at the end of the aforesaid three month lease period, Huet Motors (Dublin) Ltd would repurchase the vehicle at an agreed price of £9,305.78 exclusive of VAT. This arrangement was one of 17 similar company arrangements in respect of other vehicles which ICC Finance Ltd and Huet Motors (Dublin) Ltd entered into in or about the month of May 1991. These lease/rental agreements were registered with the Irish Credit Bureau.
At the end of the three month leasing period with Tipperary Rent-a-Car Ltd, the vehicle was not bought back as agreed by Huet Motors (Dublin) Ltd. Instead a new contract was entered into between ICC Finance Ltd and another company by the name of Fleetlink Ltd, which was an associate company of, and wholly owned by, Huet Motors (Dublin) Ltd. The agreement with Fleetlink Ltd was for a lease of the aforesaid vehicle for a fixed period of twelve months from 28 January 1992 and again there was an agreement with Huet Motors (Dublin) Ltd that it would buy back the aforesaid vehicle at a fixed price of £6,665.20 exclusive of VAT at the end of the lease period.
The tax book of the vehicle was initially retained by ICC Finance. However, a Mr McCarthy, who was both a director of Huet Motors (Dublin) Ltd and Fleetlink Ltd, requested the tax book so as to tax the vehicle. The tax book was given to him for the purpose of having the vehicle taxed. Fleetlink Ltd is a company which leased vehicles and hired vehicles for short periods to third parties. It was not in the business of retailing cars to the public. Huet Motors (Dublin) Ltd went into liquidation and the liquidator advised the defendant company of the names and addresses of the persons whom he believed were in possession of the various vehicles, the property of the defendant company. Appropriate enquiries were made and it was discovered that the persons whose names were furnished either were not in possession of the vehicle or were not resident at the address given and supplied by the liquidator. It has been the experience of the defendant company that where a person is notified that the defendant company wants the vehicle in question returned because of failure to pay the rentals, or for some other breach of the agreement between the defendant company and a lessee, invariably the vehicle is not returned and it becomes very difficult for the defendant company to obtain possession of the vehicle. Because of this experience the defendant company has adopted the practice of repossessing the vehicles which it owns and at the same time advising the local gardaí, where the vehicle is repossessed, of such repossession. That was the practice adopted in this case. The defendant company did not consent to Fleetlink Ltd parting with possession of the said vehicles to anyone, not alone Huet Motors (Dublin) Ltd, for the purpose of selling same to an innocent third party. The defendant says it did not intend to cause any embarrassment to the plaintiff and if in fact it did, it is prepared to write to his employers or superiors advising them of the circumstances surrounding the matter and the reason for the defendant company repossessing the vehicle. It is accepted by the defendant company totally, that the plaintiff herein was, and is, an unfortunate and innocent party, and a party who acted in good faith in the purchase of the vehicle in question from Huet Motors (Dublin) Ltd.
It seems clear that both parties here acted in good faith and were innocent of any wrongdoing, although the defendant with its experience, might be regarded as acting in a fairly cavalier manner. As a result of discovery it would appear that there was a series of post-dated cheques paid to the defendant that were drawn on the account of Huet Motors (Dublin) Ltd, and not on the account of Fleetlink Ltd, during the time when the alleged lease to it was in existence. It is reasonable to assume that the defendant knew that the vehicle was in the possession of Huet Motors (Dublin) Ltd or leased to them. When I said that the behaviour of the defendant was a little cavalier, I do think that it might have checked the corporation file. The court is satisfied that the vehicle was at all relevant times in the possession of Huet Motors (Dublin) Ltd, who was a mercantile agent. It would appear that it was indulging in leasing, at least on one occasion, to a wholly owned subsidiary to provide a system of cash flow. Huet Motors (Dublin) Ltd was in possession of the vehicle and in possession of the tax book. Although in fact it did not have a legal title by virtue of the provisions of s. 25 of the Sale of Goods Act 1893 and of the Factors Acts (and particularly s. 2(1) of the Factors Act 1889 ), it could and did give a good title to the vehicle.
S. 25(1) of the Sale of Goods Act 1893 provides:
Where a person having sold continues or is in possession of the goods … the delivery or transfer by that person … of the goods … under any sale, pledge or other disposition thereof to any person receiving the same in good faith and without notice of the previous sale shall have the same effect as if the person making the delivery or transfer were expressly authorised by the owner of the goods to make the same.
I am impressed by the reasoning of the English Court of Appeal in Worcester Works Finance Ltd v. Cooden Engineering Co. Ltd [1971] 3 All ER 708 .
In the circumstances I am satisfied that the learned Circuit Court judge was correct in the decision he reached. It does seem to me that the defendant here could have retained the tax book and indeed been registered. I assume that it was not registered, because, it does not like to admit to an ultimate purchaser that there have been several registered owners.
I was referred to Staffs Motor Guarantee Ltd v. British Wagon Co. Ltd [1934] 2 KB 305 and Astley Industrial Trusts Ltd v. Miller [1968] 2 All ER 36 and Chalmers, Sale of Goods , 18th ed., p. 295. While clearly the ICC Finance was not involved in any fraudulent transaction, it was, as I have found, cavalier in its approach and it, I have no doubt, has caused much strain and distress to the plaintiff.
While Staffs Motor Guarantee Ltd v. British Wagon Co. Ltd would seem to support some of the defendant’s submissions, I would prefer the reasoning in the Worcester Works Finance Ltd v. Cooden Engineering Co. Ltd [1971] 3 All ER 708 .
The civil bill claims, inter alia , a mandatory injunction directing the defendant to deliver up possession of the said motor vehicle to the plaintiff.
The plaintiff makes a bald claim for damages but does not indicate whether this should be negligence, conversion or detinue. Each of these would be a separate head of damage and should be specifically pleaded. What is one to make of the bald claim for ‘damages’ ? The only plea in the endorsement of claim which would help to answer this question is in paragraph 5. It sets out that the defendant has converted the said motor vehicle to its own use. Therefore, this case should be decided on the basis of a claim for conversion, not a claim in detinue (which entitles one to the return of the vehicle and damages) or a claim in negligence.
I would wish to be addressed on what losses, if any, should be awarded as damages in a claim based on the tort of conversion. I would refer to McGregor on Damages , 14th ed., paras. 1087–1089 and particularly to the quotation from Denning LJ (as he then was) where he says:
It is an action against him because he has had the benefit of the goods. It resembles, therefore, an action for restitution rather than an action of tort. But it is unnecessary to place it in any formal category.
The author goes on to say that:
Looked at from this angle the plaintiff could always recover beyond his proved loss to the extent of the benefit conferred on the defendant by his use of the goods and it would seem that for Denning LJ this same result could have been arrived at in an action of conversion as much as in one of detinue.
In England detinue is gone by statute.
Detinue can include damages from the moment of detention to return of the chattel and special damages (Bullen and Leake, 10th ed., p. 317). Damages must be assessed at the date of judgment, not at the date of refusal which is a normal proof of detinue (see Rosenthal v. Alderton & Sons Ltd [1946] 1 KB 274 ; C.V. Stacks v. Mikloo [1948] 2 KB 23 and McMahon and Binchy, Irish Law of Torts , 2nd ed. p. 531).
I find the proposition by Denning LJ of subsuming these two distinct torts into a claim for restitution very attractive. It seems to me that the trial judge should look at all aspects of the case and decide the relevant periods and the nature of damage having regard to all the particular circumstances of each individual case. The matter should be clarified by statute.
Proceedings had been instituted by the plaintiff against the defendant for defamation. I was asked to postpone making any order until that matter had been determined. I had indicated that I would not make any order until I had been fully addressed on the nature of the claim mentioned in the civil bill and what were the appropriate parameters of such a claim which I believed to be based on conversion. I was open, of course, to argument because in fact detinue constitutes negligence. When the defamation action came to court it was settled. And that included damages arising in the present case. The plaintiff is in fact in possession of the vehicle. In the circumstances and by consent I am dismissing the appeal and awarding the plaintiff costs in both courts, with a certificate for senior counsel for the appeal.
Shield Life Insurance Co. Ltd. v. Ulster Bank Ltd.
[1995] 3 IR 225 Costello P. 229
Introduction
This judgment relates to two actions in which the liability of the Ulster Bank Ltd. (“the bank”) to the Shield Insurance Company Ltd. (now Eagle Star Insurance Company (Ireland) Limited and hereinafter referred to as “the plaintiff”) is to be determined. Substantial issues in both cases are the same, but they differ on some important points, as outlined later.
The plaintiff carries on an insurance business and has its head office in Cork. A Mr. James O’Callaghan carried on an insurance broker’s business in that city through a company he owned called T.J. O’Callaghan Life and Pensions Ltd. He was a customer of the bank in its South Mall branch in Cork City. He was also an accomplished forger and, up to a point, a successful fraudster and it is his wrongdoing which has led to these proceedings. He defrauded the plaintiff (and others) on six occasions, two of which are the subject of the litigation before me. The first action relates to a transaction in which he was involved with a Mrs. Catherine Murphy. On the 14th January, 1988, Mrs. Murphy drew a cheque for £30,000 on Allied Irish Banks plc naming the plaintiff as the payee, and she gave it to Mr. O’Callaghan for transmission to the plaintiff for what she thought was an investment bond which it had issued in her favour. The bond given to her by Mr. O’Callaghan was, in fact, a forgery and the plaintiff was at that time completely unaware of this transaction and never issued a bond to Mrs. Murphy. Mr. O’Callaghan, either himself or on his direction, had Mrs. Murphy’s cheque endorsed with the words”John Dorgan O’Callaghan L.P.” and either himself or Mr. Dorgan (an employee of his company) lodged the cheque in the bank’s South Mall branch for collection. The broker had two accounts in the branch in the name of his company, one designated an “office account” and the other designated a “clients’ account”. On the instructions of the broker or Mr. Dorgan the lodgement of £30,000 was split and £25,000 was lodged to the credit of the clients account and £5,000 to the office account. On the following day £23,000 was drawn out of the clients’ account by the broker. The fraud was not detected until the following year as a result of which on the 19th April, 1989, the plaintiff’s contract with the broker was terminated. Later, the plaintiff issued a bond to Mrs. Murphy in the same terms as that forged by the broker and has sued the bank in these proceedings as payee of the cheque claiming to be its true owner and that the bank had, as a matter of law, wrongly converted it.
Before the broker’s wrongdoing had been discovered he had engaged in another fraud a year later. This time one of his victims was a Mr. Cornelius O’Callaghan. An insurance policy, which Mr. C. O’Callaghan owned, matured and the proceeds were paid to him by cheque for the sum of £19,828.80 by the Standard Life Assurance Company. The cheque was drawn on the Ulster Bank and Mr. C. O’Callaghan was the payee named on it. The cheque was crossed and the words “not negotiable” were added. Mr. C. O’Callaghan arranged with the broker that he would invest £20,000 in an investment bond to be issued by the plaintiff and on the 15th January, 1989, the broker delivered to him a forged bond purporting to be a bond issued by the plaintiff. In return Mr. C. O’Callaghan signed the cheque on the reverse side (in circumstances to be considered in greater detail later) and gave it to the broker together with the sum of £172 to make up the sum of £20,000. The broker lodged this cheque with the bank and on his instructions the sum of £20,000 was paid into his office account, a sum of £17,500 was paid into his clients’ account and a sum of £500 was given to the broker in cash. Later the plaintiff issued a bond to Mr. C. O’Callaghan in the same terms as those contained in the forged bond and in the second action it has sued the bank on the same basis as that pleaded in the first action.
Mrs. Murphy’s cheque
The plaintiff’s submissions
The plaintiff’s basic submission is that the bank committed the tort of conversion and can only avoid liability by relying on s. 4 of the Cheques Act, 1959. This section was designed to give a greater measure of protection to collecting bankers than that afforded by earlier legislation. This is to be found firstly in sub-s. 1 which provides:
“Where a banker, in good faith and without negligence,-
(a) receives payment for a customer of an instrument to which this section applies; or
(b) having credited a customer’s account with the amount of such an instrument, receives payment thereof for himself;
and the customer has no title, or a defective title, to the instrument, the banker does not incur any liability to the true owner of the instrument by reason only of having received payment thereof.”
The banker’s protection is further enhanced by sub-s. 3 which provides:
“A banker is not to be treated for the purposes of this section as having been negligent by reason only of his failure to concern himself with absence of, or irregularity in, indorsement of an instrument.”
The plaintiff’s submissions on this section can be summarised as follows:
(1) The section applies to cheques (sub-section 2). As payee of Mrs. Murphy’s cheque it was its “true owner” within the meaning of sub-section 1.
(2) The plaintiff accepts that the bank firstly credited its customer’s (i.e. the broker’s) account and then received payment on the cheque as a result of it being cleared through the clearance system in the ordinary way and so s. 4, sub-s. 1 (b) applies. It submits that the bank’s customer had no title to the cheque as its payee had not indorsed it and the indorsement was irregular. It accepts that the bank acted in good faith but it points out that it can only obtain the protection of the section if it acted without negligence.
(3) It is accepted that s. 4, sub-s. 3 means that in considering the issue of the bank’s negligence the court cannot treat negligence as having been established by reason only of the bank’s failure to concern itself with the irregularity in the endorsement but it is submitted that the evidence in the case establishes quite clearly that the bank was negligent.
(4) As the bank cannot claim the protection of the section it is liable at common law for the conversion of the cheque and so the plaintiff is entitled to payment of £30,000.
(5) The Cheques Act, 1959, enacted in this country the provisions of the English Cheques Act, 1957. Section 4 of the English Act is in identical terms with s. 4 of our Act and the plaintiff submits that our Act should be construed in the way s. 4 of the English Act was construed by Diplock L.J., in Marfini & Co. Ltd. v. Midland Bank Ltd. [1968] 1 W.L.R. 956. In the course of his judgment Diplock L.J. (at p. 970) stated:
“At common law one’s duty to one’s neighbour who is the owner, or entitled to possession, of any goods is to refrain from doing any voluntary act in relation to his goods which is a usurpation of his proprietary or possessory rights in them. Subject to some exceptions which are irrelevant for the purposes of the present case, it matters not that the doer of the act of usurpation did not know, and could not by the exercise of any reasonable care have known, of his neighbour’s interest in the goods. This duty is absolute; he acts at his peril.
A banker’s business, of its very nature, exposes him daily to this peril. His contract with his customer requires him to accept possession of cheques delivered to him by his customer, to present them for payment to the banks on which the cheques are drawn, to receive payment of them and to credit the amount thereof to his customer’s account, either on receipt of the cheques themselves from the customer, or in receipt of actual payment of the cheques from the banks on which they are drawn. If the customer is not entitled to the cheque which he delivers to his banker for collection, the banker, however innocent and careful he might have been, would at common law be liable to the true owner of the cheque for the amount of which he receives payment, either as damages for conversion or under the cognate cause of action, based historically on assumpsit, for money had and received.
So strict a liability, so absolute a duty, on bankers would have discouraged the development of banking business. It was accordingly progressively mitigated by statute, first by s. 82 of the Bills of Exchange Act, 1882, then by the Bills of Exchange (Crossed Cheques) Act, 1906, and finally by s. 4 of the Cheques Act, 1957 . . .”
Having quoted s. 4 and made certain comments on it Diplock L.J. went on at p. 972 of the report:
“It is, however, in my view, clear that the intention of the subsection and its statutory predecessors is to substitute for the absolute duty owed at common law by a banker to the true owner of a cheque not to take any steps in the ordinary course of business, leading up to and including the receipt of payment of the cheque and the crediting of the amount of the cheque to the account of his customer, in usurpation of the true owner’s title thereto, a qualified duty to take reasonable care to refrain from taking any such step which he foresees, or ought reasonably to have foreseen, was likely to cause loss or damage to the true owner.
The only respect in which this substituted statutory duty differs from a common law cause of action in negligence is that, since it takes the form of a qualified immunity from a strict liability at common law, the onus of showing that he did take such reasonable care lies on the defendant banker. Granted good faith in the banker (the other condition of the immunity) the usual matter with respect to which the banker must take reasonable care is to satisfy himself that his own customer’s title to the cheque delivered to him for collection is not defective, i.e., that no other person is the true owner of it. Where the customer is in possession of the cheque at the time of delivery for collection, and appears on the face of it to be the ‘holder’,i.e., the payee or endorsee or the bearer, the banker is, in my view, entitled to assume that the customer is the owner of the cheque unless there are facts which are known, or ought to be known, to the banker which would cause a reasonable banker to suspect that the customer is not the true owner.
What facts ought to be known to the banker, i.e., what enquiries he should make, and what facts are sufficient to cause him reasonably to suspect that the customer is not the true owner, must depend on current banking practice, and change as that practice changes. Cases decided thirty years ago, when the use by the general public of banking facilities was much less widespread, may not be a reliable guide to what the duty of a careful banker, in relation to enquiries and as to facts which should give rise to suspicion, is today.
The duty of care owed by the banker to the true owner of the cheque does not arise until the cheque is delivered to him by his customer. It is then, and then only, that a duty to make enquiries can arise. Any antecedent enquiries that he has made are relevant only in so far as they have already brought to his knowledge facts which a careful banker ought to ascertain about his customer before accepting for collection the cheque which is the subject-matter of the action, and so have relieved him of any need to ascertain them again when the cheque which is the subject-matter of the action is delivered to him. What the court has to do is to look at all the circumstances at the time of the acts complained of, and to ask itself were those circumstances such as would cause a reasonable banker possessed of such information about his customer as a reasonable banker would possess, to suspect that this customer was not the true owner of the cheque.”
The defendant’s submissions
The defendant made five principal submissions as follows:
(1) Firstly, it was submitted that whilst the bank was primarily a collecting agent of Mrs. Murphy’s cheque for its customer it was more than a collecting agent in the circumstances of this case. It refers to s. 27, sub-s. 2 of the Act of 1882, which provides that “where value at any time has been given for a bill [which would include a cheque] the holder is deemed to be a holder for value” as regards all parties who became parties prior to that time. It is submitted that the bank gave value for this cheque by crediting the amount of the cheque to its customer’s account before receiving payment through the clearing system and then submitted that the bank is not only a “holder for value” but it is also a “holder in due course” within the meaning of s. 29 of the Act of 1882. This section provides as follows:
“29. – (1) A holder in due course is a holder who has taken a bill, complete and regular on the face of it, under the following conditions; namely,
(a) That he became the holder of it before it was overdue, and without notice that it had been previously dishonoured, if such was the fact:
(b) That he took the bill in good faith and for value, and that at the time the bill was negotiated to him he had no notice of any defect in the title of the person who negotiated it.”
The bank became a “holder in due course” it is said because it took the bill in good faith and for value and as such a holder it obtains the rights conferred by s. 38 of the Act of 1882. This means that the bank can sue on the bill in its own name and, as holder in due course,
“. . . holds the bill free from any defect of title of prior parties, as well as from mere personal defences available to prior parties amongst themselves, and may enforce payment against all parties liable on the bill.”
It follows, therefore, that even if its customer’s title was defective it held the bill free from those defects and is entitled to enforce payment of it. For this reason the bank and not the plaintiff (the named payee) was the”true owner” of the cheque and no claim for damages for conversion by the payee at common law exists.
I have the following observations on these submissions:
(a) It is true that if value is given by a collecting bank on the transfer of a cheque from a customer that the bank may not merely be an agent for collection but becomes a “holder for value”. I will assume that the bank in this case gave value for the cheque which the broker lodged in that it credited the broker’s account with the amount of the cheque before receiving payment through the clearing system from the bank on which it was drawn. But s. 29 of the Bills of Exchange Act, 1882, defines “holder in due course” as a “holder” who takes the cheque in certain conditions and therefore the bank has first to established that it is “holder” of the cheque before it can be regarded as a “holder in due course”. A “holder” of a bill is defined in s. 2 of the Act of 1882 as meaning “the payee or indorsee of a bill or note who is in possession of it, or the bearer thereof” and the bank was not the “payee” of the cheque (the plaintiff was), nor the “indorsee” of the cheque (the broker never endorsed it to the bank), nor its “bearer”which is defined in s. 2 as the person in possession of a bill which is “payable to bearer” (Mrs. Murphy’s cheque was not such a cheque). The status of a collecting banker who receives an unindorsed cheque for collection on behalf of a customer was the subject of a provision in s. 2 of the Cheques Act, 1959. This provided that:
“A banker, who gives value for, or has a lien on, a cheque payable to order which the holder delivers to him for collection without indorsing it has such (if any) rights as he would have had if, upon delivery, the holder had indorsed it in blank.”
I have emphasised the word “holder” in the section to draw attention to the fact that the section only applies when the customer is a “holder” of the cheque, and as Mrs. Murphy’s cheque had never been endorsed to the broker he was not its”holder” when he lodged it for collection. It follows that the bank never became a “holder” of Mrs. Murphy’s cheque. ”
(b) Secondly, in order to constitute the holder of a bill or cheque”a holder in due course”, it must be shown that the bill was”complete and regular on its face” (s. 29, sub-section 1). This cheque was not “complete and regular on its face” as the endorsement was highly irregular, not having been completed by the payee. Accordingly, even if the bank was “a holder” it did not become a “holder in due course” and so cannot claim rights under section 38.
(c) Thirdly, in order to constitute a “holder” of a cheque a”holder in due course” it must be shown (as s. 29, sub-s. 1 (b) provides) that at the time the bill was negotiated the bank had no notice of any defect in the title of the person who negotiated it. Assuming for the moment that the broker”negotiated” the cheque at the time of its lodgement the bank had notice of the defect in the broker’s title to it because there was no proper endorsement to the broker by the payee. Accordingly the bank does not comply with the provisions of s. 29, sub-section 1 (b).
For the above reasons the bank cannot claim that it was other than an agent for collection of the cheque and it has failed to show that the plaintiff was not its true owner.
(2) The public policy issue: The defendant’s second submission, which I must confess I found to be a most startling one, was that even though the plaintiff may have been the payee of the cheque and was deprived of its proceeds by the broker’s fraud, and even though it was completely innocent of any wrongdoings, and even though the bank may have been in breach of the duty it owed to it, the court should refuse the plaintiff’s claim on the grounds of public policy, the grounds of public policy being the application of the doctrine of “ex turpi causa non oritur actio”.
This submission was based on certain obiter dicta of the trial judge in Thackwell v. Barclays Bank plc. [1986] 1 All E.R. 676, a case whose relevant facts can be summarised as follows.
A Mr. Thackwell sold machinery to a firm I shall call Alan Jones for £44,227. This firm sold it on, together with other machinery, to a second firm which I shall call Riva, for £80,989.90. This transaction was financed by a hire purchase company who paid Alan Jones a sum of £80,989.90. Out of that sum Alan Jones issued a cheque for £44,227 to Mr. Thackwell. One of the directors of Alan Jones then forged Mr. Thackwell’s name on the back of the cheque and lodged it for collection in a branch of Barclays Bank. Mr. Thackwell never received payment and he sued Barclays Bank. The evidence established that the whole transaction was an elaborate fraud on the hire purchase company effected by invoicing Riva one machine at an exorbitant figure as well as invoicing a machine that did not exist. The court held that the bank had been negligent in collecting the forged cheque in the way it did but nonetheless refused to grant Mr. Thackwell any relief. The bank pleaded as a defence the doctrine of ex turpi causa non oritur actio and claimed that Mr. Thackwell had been a party to or had knowledge of the fraud on the hire purchase company. The court (per Hutchison J.) held that Mr. Thackwell had been in fact a party to the fraudulent re-financing transaction and it concluded that it would not permit him to make a claim against the bank on the grounds of public policy, “just as it would prevent a burglar from whom the stolen goods were snatched by a third party just as the burglar left the victim’s house from maintaining an action in conversion against the third party” (page 689).
Having so decided the judge went on to make further comments on which the bank in this case relies. Having concluded that Mr. Thackwell had been fraudulent he went on to express the opinion that even if he had found Mr. Thackwell innocent and that the director of Alan Jones alone had been the perpetrator of the fraud he would have denied Mr. Thackwell recovery. And so counsel in this case argued that if Mr. Thackwell could not recover against the bank, even if he was ignorant of the fraud, so too the Shield Insurance Company, though wholly innocent of the fraud committed on it and on Mrs. Murphy, could not recover.
It seems to me that this submission is based on a misconstruction of the judgment. In Thackwell v. Barclays Bank plc [1986] 1 All E.R. 676 the court agreed that when the doctrine was invoked its task was firstly (a) to look at the proximity of the illegal conduct relied on by the defendant with the claim maintained by the plaintiff and then (b) “consider whether there are other considerations which as a matter of public policy ought to effect the plaintiff’s right to recover” (at page 687). The court concluded that the plaintiff was not entitled to recover in conversion against the bank because the cheque alleged to have been converted constituted in reality the very proceeds of the fraudulent conduct established in the case and the judge expressed the view that “by permitting Mr. Thackwell recover the proceeds of this cheque from the bank I should, as it seems to me, be indirectly assisting in the commission of a crime” (p. 689) and as a matter of public policy he declared he would not have been entitled to relief. I can find no considerations of public policy in this case which would justify a refusal of the plaintiff’s claim should negligence be established. Certainly the court would not be assisting in the commission of a crime by so doing, because it would not, by awarding damages, be ordering the return of stolen money. The court’s order would in effect compensate the payee of a cheque which had, as a matter of the application of common law principles, been converted by the collecting bank. This defence must therefore fail.
(3) The third ground of defence is a denial that there was any negligence on the bank’s part and a submission that it is thereby protected by s. 4 of the Cheques Act, 1959.
(4) The fourth is a claim that if the bank was negligent the plaintiff was guilty of contributory negligence and the damages recoverable should be reduced because of this.
I propose to examine these submissions in the next part of my judgment in which I shall express my conclusions on the evidence which the parties adduced at the hearing on the negligence issue.
(5) The fifth and final submission related to the level of damages and I shall leave that to the end.
Negligence issues
(a) The bank’s duty of care
The legal principles applicable have been clearly stated in the authorities to which I was referred by the plaintiff. The plaintiff is entitled to damages for conversion unless the defendant can establish that it took reasonable care that its customer’s title to the cheque was not defective. What facts are sufficient to cause a bank reasonably to suspect that its customer is not the true owner of the cheque depends on current banking practise. All the circumstances surrounding the transaction including past circumstances may be relevant.
A banker is not to be treated as having been negligent by reason only of his failure to concern himself with an irregularity in the indorsement on a cheque (s. 4, sub-s. 3 of the Act of 1959). But if there are other circumstances either antecedent to the transaction in suit or part of the transaction in suit which, taken in conjunction with the irregularity of the indorsement, would put a prudent banker on inquiry, then the irregularity in the indorsement, and the failure of the banker to concern himself with that irregularity, may be considered by the court in considering whether the banker has been guilty of breach of duty to the cheque’s true owner.
Each case must ultimately depend on its own facts. But there may be special circumstances in a case which affect the banker’s duty of care to which the banker should pay particular regard. Those special circumstances may include, as in this case, a situation in which a customer maintains two accounts, an office account and a clients’ account, and in which it is clear that the customer is holding money in an account as a trustee. Previous movements in and out of that account by the customer which may suggest that it is not being operated in a manner consistent with the customer’s duty as a trustee may be relevant in considering the bank’s duty in relation to the payment into a clients’ account of a cheque which has been irregularly indorsed.
Webb v. Ireland
[1988] IR 353
Finlay C.J.
This is an appeal brought by the defendants against the order of the High Court made on the 10th 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 defendant, 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 the 17th February, 1980, went to a place near Killenaule in County 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 Gobán Saor. Buildings described as”Derrynaflan Abbey” or “Gobán’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 the 8th 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 plaintiff delivered the articles the following 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 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 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 recieved by Dr. Breandán Ó Riordáin , the director of the National Museum, who immediately recognised their general value and importance and it was established at the trial that Dr. Ó Riordáin 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 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 comprising the hoard to what must have been their original condition.
The solicitors for the plaintiffs on the 9th October, 1980, wrote to Dr. Ó Riordáin 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 Riordáin and the solicitors for the plaintiffs wrote again on the 2nd March, 1981, asking for a firm commitment within one month. On the 16th June, 1981, the Chief State Solicitor wrote to the solicitors for the plaintiffs referring to the letter of the 18th February, 1980, addressed to Dr. Ó Riordáin 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. There does not appear to have been a direct response to that letter but on the 23rd 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 the 8th 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 the 16th June, 1981. These proceedings were then instituted by plenary summons on the 11th 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 the 7th 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 the 10th December, 1986, the learned trial judge reached the following conclusions:
(1) That applying the decision of this Court in Byrne v. Ireland [1972] I.R. 241 with regard to the question of a State immunity from suit, 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 hence was not carried into our law by virtue of the Constitution of Ireland.
(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 the 18th 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 estopped from challenging the title of the plaintiffs to the hoard because it was placed 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 England in Rogers, Sons & Co. v. Lambert & Co. [1891] 1 Q.B. 318.
I have considered that decision and I have come to the conclusion that on the facts of this case there cannot 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 plaintiff 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 andpending 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. [1891] 1 Q.B. 318 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 where 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 L.J. at p. 328 of the report quotes with approval from the decision in Biddle v. Bond (1865) 6 B. & S. 225 where Blackburn J., delivering the judgment of the Court of Queen’s Bench said at p. 233:
“We think that the true ground on which a bailee may set up the jus tertii is that indicated in Shelbury v. Scotsford Yelv. 22, 3rd ed. translated, 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 ceased 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 acquires.
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 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. Brigg Gas Co. (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 South Staffordshire Water Co. v. Sharman [1896] 2 Q.B. 44, Lord Russell C.J., at pp. 46-47, quoted with approval 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 a 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 costituted 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 City of London Corporation v. Appleyard [1963] 1 W.L.R. 982. 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 L.J.Q.B. 75, and the decision in Parker v. British Airways Board [1982] Q.B. 1004 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 Hannah v. Peel [1945] K.B. 509, where the owner of a house had never entered into possession of it though the title had devolved 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 all these cases, although it is clearly obiter to the facts contained in it, I would find the general propositions set out by Donaldson L.J. in Parker v. British Airways Board [1982] Q.B. 1004, at pp. 1017-1018, 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 fel 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 sub-section involved is s. 14, sub-s. 1 (b) 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 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 acknowledgement 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 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 provisions of article 11 of the Constitution of the Irish Free State (the 1922 Constitution). That being so, it is argued, the provisions of Article 49, s. 1 of the Constitution of Ireland vest that prerogative in the people and the provisions of Article 49, s. 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.
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 in 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 the 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 on the part of 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.
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 those 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 nineteenth century it is quite clear that the prerogative of 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 of 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 [1972] I.R. 241 no royal prerogative in existence prior to the enactment of the Constitution of 1922 was by vritue 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 the 11th December, 1936, and were therefore not captured by Article 49, s. 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 [1972] I.R. 241 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, s. 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, s. 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, s. 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.
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 created and 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 or 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 as 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 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 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 conoted 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 M.R. in Amalgamated Property Co. v. Texas Bank [1982] Q.B. 84, 122:
“When the parties to a transaction proceed on the basis of an underlying assumption – either of fact or of law – whether due to misrepresentation or mistake 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 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.
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 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 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 this Court and is exclusively a matter of legislative policy.
I would allow this 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.
Delaney v Wallis & Son
14 LR Ir 31 (CA, 1884 aff Ex Div, 1883)
Sir Edward Sullivan C: This is a case of considerable importance, not merely in relation to the position of salemasters in Dublin and elsewhere, but to the public. It arises on a special case stated in an action brought by Denis Delaney against John Wallis & Sons, for the sum of £71 8s, claimed as damages for the conversion by the defendants oftwenty-one sheep of the plaintiff; and there is a count also for money had and received by the defendants for the plaintiff’s use. The defendants’ defence was a denial of the acts of conversion, and a denial that any money was received by them for the use of the plaintiff. It is necessary to be very clear as to the particular facts stated by the parties in the special case, and what we think are the fair inferences to be drawn therefrom. The special case states that the plaintiff is a farmer, residing at prima facie Roskeen, in the Queen’s County, and that the sheep the subject-matter of the action were, on or about the 17th January 1883, stolen off his land by a man named Michael Crossan. That the defendants are public salemasters, and transact their business in that capacity in the new cattle-market established by the Corporation of Dublin, under the provisions of the Dublin Improvement Act (12 & 13 Vic c 79, s 80). That on every Thursdaya public market for the sale of cattle and sheep is held in this market, the legal hour for commencing sales being eight o’clock in the morning. That on Thursday, the 18th January 1883, Michael Crossan, accompanied by two other men, brought the twenty-one sheep, which had been so stolen by him from the plaintiff, to the stand of the defendants in the new cattle-market, between eight and nine o’clock, and asked the defendants to have the sheep sold for him. The defendants did not know Michael Crossan, or either of the men with him, and were entirely ignorant that the sheep had been stolen. The name given by Michael Crossan was ‘John Cullen’; and the name Dunne was also mentioned. The sheep were, within a few minutes purchased by Mr P Graves, butcher, Rathgar, at 63s. each; and this price, less £1.13s for commission, and 2s. handed to Michael Crossan in cash, was paid to Michael Crossan by defendants. The entry in defendants’ books as to the transaction, made at the time, is in the words and figures following:
JOHN CULLEN (OR DUNNE)
Twenty-one sheep – Graves – 63s.
£66 3 0
Commission £1 13 0
Cash 2 0
1 15 0
Cash £64 8 0
And the invoice given to said Michael Crossan at the time he received the £64 8s., which was paid him by cheque, was in the following words and figures:
JOHN WALLIS & SONS,
Cattle and Sheep Salesmen, Corn and Wool Brokers, Dublin, Liverpool and Manchester Office – 33, Bachelor’s-walk.
Cattle-market, Dublin, 18th January 1883.
Sold for MR JOHN CULLEN:
The special case then states that the twenty-one sheep were taken by Mr Graves immediately after his purchase; and that the whole transaction was closed by payment to Michael Crossan by nine o’clock in the morning. That on the day following the sale, the plaintiff informed the defendants, at their office in Dublin, that the sheep had been stolen off his lands; and that this was the first information the defendants had on the subject. That the defendants informed the plaintiff of the facts hereinbefore stated, including the name and address of the purchaser of the sheep.
Now, on the statement of the facts that I have read, we think that we must assume that the possession of those sheep which were brought to the stand of the defendants in the public market, and which Crossan asked the defendants to have sold for him, was given to the defendants for the purpose of the sale. The facts of the case are inconsistent with any other supposition. We also think that we must assume that the twenty-one sheep, when taken away by Graves were taken away from the stand of the defendants, the sellers, and that the defendants were the persons who gave the sheep over to the purchaser to take away.
It has been suggested that the position of the defendants was not different from that of a bystander listening to and promoting a bargain between a person selling in a public market and a purchaser, and not having possession of the articles sold. The case, in our opinion, is entirely inconsistent with such a state of facts. The statements that the defendants are salemasters, that they have a stand in the cattle-market, and that Crossan employed them to have the sheep sold for him, are pregnant with this, that the defendants got possession of the sheep to sell, and having that possession sold them, and delivered them to the buyer. A very important question then arises, whether, this being a market overt, and the defendants giving a good title to the purchaser of the sheep by their sale, the defendants are liable to the real owner for the value of them. We are all of opinion that the Court of Exchequer was right in giving judgment for the plaintiff, and holding that the defendants were guilty of conversion of the sheep. When the facts are stated as we find them, there is no doubt as to the law. The principle applicable to such a case defendant, who has acted throughout innocently in the matter; but, setting aside the hardship of the case, the law applicable to it is perfectly clear. Here is Peggsa, man who received a good deal of attention in a case bearing some resemblance to the present, that of Ganly v Ledwidge Ir R 10 CL 33, where Lord Fitzgerald and Lord Justice Barry held that salemasters who had sold a cow that had been stolen from the plaintiff, and had delivered the beast to the purchaser, were liable in trover. The Lord Chief Justice Whiteside was of a different opinion. I beg respectfully to express my dissent from his judgment. He would appear to have been led astray by some observations in the case of Greenway v Fisher 1 C & P 190, as to persons acting in a public employment being protected. Certainly, the judgments of Lord Fitzgerald and Lord Justice Barry commend themselves to my mind as being entirely right, there being no warrant for the proposition that a seller in market overt is protected as well as a buyer. It is said that this is a case of great hardship on the defendants. I do not see that it is so. If one of two innocent parties must suffer, the responsibility must rest where the law casts it; but I really think that salemasters may very well be required to make some inquiry as to the persons who bring them cattle for sale before they effect a sale for them.
The law bearing on this subject has been most exhaustively treated in a case of Hollins v Fowler LR 7 HL 757. The facts of that case are very different from the present but the principles of law applicable are, I think, very clearly stated in the judgments in the House of Lords; and I think it will be found that those principles are clearly applicable to the present case. That was not so strong a case as the present for holding the defendants liable, for there the defendants had not done any act which changed the property in the goods sold by them, while here the salesmasters put the property in the animals sold into the purchaser by their sale to them in market overt. There, Lord is not the true owner of these goods, but appearing to act as such, and who has no power whatever to sell, takes them to the defendant, and gets a loan from him upon them. The defendant keeps them, and finally sells them in such a way as to pass the property in them to the buyers; and if that is not a conversion, then I think there can be no such thing.’ He unquestionably puts the case, which has here been suggested at the Bar, ofa man bringinga horse by the bridle to an auctioneer, and saying, ‘I want to sell my horse,’ and the auctioneer thereupon finding him a purchaser, and the horse being sold while the owner is still holding him by the bridle, and he himself giving the horse to the purchaser: it is suggested rightly enough, that in such a case the auctioneer may not be liable to the right owner, as having never got possession of the horse he might not be regarded as guilty of conversion. That state of things, as I have already shown, does not exist here. We find that the defendants got possession of the plaintiff’s sheep, that they sold the sheep when in their possession, and gave possession of them to the purchaser.
We affirm the judgment of the Exchequer Division, and give judgment for the plaintiff for the sum of £71 8s., and costs.
.
FitzGibbon LJ: The only doubt I entertain is upon the sufficiency of the statements in the special case to elucidate the facts. I am not quite certain that we should not act more prudently by declining to give our decision unless the parties can agree to amend the case by stating that before the sale the custody of the sheep was, for the purpose of sale, given to the defendants, who accepted it by placing the sheep upon their stand; and also that the defendants made the sale, paid the seller, looked to the purchaser for the price, and in pursuance of the sale delivered the sheep to the purchaser. It, however, I think, sufficiently appeared that all these matters of fact are in accordance with the truth; they are consistent with, if not implied by, the statements of the special case; and, assuming them to be established, I have no hesitation in concurring with the Lord Chancellor and Chief Justice. The defendants had such a special possession of the sheep as would have entitled them to maintain an action of trover against a wrongdoer; having such a possession they parted with the sheep to a purchaser, with the intention of passing the property, and they are on first principles liable for sending the plaintiff’s property in a wrong direction, by a sale and transfer to which they were parties. As to the argument ab inconveniente, I think there is no hardship or injustice in holding salesmasters liable if they wrongfully sell property for people of whose title they are ignorant, and of whom they know nothing. Here it appears that the defendants did not ascertain even the name of the person for whom they acted.
Barry LJ: Assuming the facts to be specified by the Lord Chancellor and Lord Chief Justice Morris (and I think we are justified in so inferring from the Case Stated), I do not think that the question so elaborately discussed in Hollins v Fowler LR 7 HL 757 arises at all. The position of the defendant here does not, in my opinion, resemble that of the broker who acts as a mere intermediary between an intending vendor and an intending purchaser. The defendant here had the physical possession of the animals, he effected the sale, delivered them to the buyer, and by the sale, being in market overt, he divested the owner’s property until conviction of the thief. I think his action in the transaction constituted a conversion, and that the decision of the Exchequer must be affirmed.
McDonagh v Galway County Council
[2019] IEHC 304 (10 May 2019)
JUDGMENT of Mr. Justice Garrett Simons delivered on 10 May 2019.
INTRODUCTION
1. These proceedings concern the exercise by a local authority of its statutory powers under the Control of Horses Act 1996. This Act confers upon a local authority a power to detain horses, and, in certain circumstances, to destroy a horse which has been detained. On the facts of the present case, Galway County Council made a decision to destroy a horse on the basis that there were fees of €3,129.68 outstanding in respect of inter alia the transportation, housing and veterinary care of the horse. This figure also included a sum of €589.93 in respect of unspecified “administration” costs.
2. The decision to destroy the animal was made against a background whereby there was an ongoing dispute between the Local Authority and the person asserting ownership of the horse as to whether the latter had established proof of ownership.
3. The person asserting ownership of the horse then instituted the within judicial review proceedings. The proceedings allege that the conduct of the Local Authority in destroying the horse was unlawful. In this regard, the Applicant relies on the judgment of the High Court (Hedigan J.) in Burke v. South Dublin County Council [2013] IEHC 185. The Applicant maintains that a local authority is not entitled to use its statutory power to destroy an animal for the sole purpose of, as the Applicant characterises it, enforcing a contractual debt. The Applicant pleads that Galway County Council should instead have relied upon section 39(3) of the Control of Horses Act 1996 to recover, as a simple contract debt, any amount which the authority maintains is due and owing to it under the legislation. The Applicant also pleads that the issue of the fees being sought was consistently identified as an issue in dispute, and that the Local Authority had been called upon to refrain from euthanising the horse until that issue was resolved.
4. For the reasons set out in detail herein, I have come to the conclusion that, in the particular circumstances of this case, the Local Authority acted precipitously in arranging to have the horse destroyed. First, there is no evidence before the court to demonstrate that the Local Authority was authorised under the Bye-Laws to recover an amount of €3,129.68. In particular, the Bye-Laws do not authorise the charging of fees in respect of “administration”. Secondly, it was disproportionate to destroy the animal in circumstances where there was an ongoing dispute as to whether the Applicant had established proof of ownership, and where the Local Authority had indicated that it would assess additional documentation which had been provided by the Applicant. Thirdly, the Local Authority should at least have considered the option of disposing of the horse by way of sale rather than destruction.
FACTUAL BACKGROUND
5. The Applicant purports to be the owner of a horse referred to as “Chief of Colours”. This horse was detained by officials of Galway County Council (hereinafter ” the Local Authority” or ” Galway “), acting in conjunction with members of An Garda Síochana, on 11th February 2018. The horse was detained pursuant to the provisions of section 37 of the Control of Horses Act 1996.
6. One of the relevant officials of the Local Authority, Mr Shane Coogan, has sworn an affidavit to the effect that the horse was seized in circumstances where it was causing a hazard to road users at the edge of the Headford Road, Co. Galway. Mr Coogan avers that the horse was one of a total of ten equines posing a danger to persons or property.
7. Mr Coogan has exhibited a copy of the Notice of Seizure and Detention of a Horse(s) dated 11th February 2018. It is stated as follows at the end of the Notice.
“The owner(s) of the horses may collect the horse(s) on production of suitable identification, proof of ownership in the form of a copy of horse passport/licence; micro-chip number; proof of lease/access to equine registered lands for the keeping of the animal(s) and the payment of all appropriate fees.
Please take note that if the owner does not collect the horses within 5 days from the date of this notice, the Council will dispose of the horses in accordance with Galway County Council’s Bye-Laws and the Control of Horses Act 1996. Galway County Council reserves the right to retain the horses pending any prosecution it might take.”
8. The Applicant has consistently queried whether the horse was in a public place at the time when it was seized. The implication being that, in truth, the horse had been wrongfully removed from private lands. However, in circumstances where the Applicant has not adduced any direct evidence to the effect that the horse was removed from private lands, the only inference that this court can draw is that the horse was, in fact, in a public place at the time it was detained.
9. There appears to have been some initial confusion within the Local Authority as to whether or not the horse in respect of which the Applicant is claiming ownership had been detained. Specifically, the Applicant has averred that when he attended at the public counter of the Local Authority on 13th February 2018, he was mistakenly informed that his horse had not been detained. At all events, this mistake was soon corrected, and by 16th February 2018, the Local Authority officials confirmed that they had detained a horse which met the description of the horse in respect of which the Applicant claims ownership.
10. The Local Authority subsequently wrote to the Applicant on 26th February 2018 in the following terms. (This letter appears to have crossed with a letter of the same date from the Applicant’s solicitors).
“You presented to the housing section public counter on Friday the 16th of February 2018 at 0900 and advised that you are the owner of a Standardbred, skewbald stallion which was seized by Galway County Council over the weekend of the 11th of February 2018. You presented a passport issued by The Standardbred and Trotting Horse Association of Great Britain and Ireland, (displaying the chip number […]) this association is not a passport issuing body authorised by the Department of Agriculture, Food and the Marine in Ireland. The passport you presented has not been lodged with an Irish Passport Issuing Organisation and does not feature on the Irish Central Database.
As the keeper of the equine you are obliged to lodge the passport (which is considered to be a foreign passport) with an Irish Passport Issuing Organisation (PIO) – in order that it is notified to Department of Agriculture (Central Equine Database).
The Irish PIO will examine the passport when it is being lodged and they will be in a position to advise whether it is a valid identification document, and if not, they can advise you on how to procure a compliant identification document for the equine.
Furthermore you advised that you want your horse to be returned to you as soon as possible.
In order for the Council to consider returning the horse to your care, you must tender proof for the following:
(a) Proof of ownership of the horse such as a copy of the correct & appropriate horse passport as issued by the relevant Irish Authorities, microchip number & photographic evidence.
(b) Proof of written confirmation of the accommodation and sustenance arrangements in place for the horse, such as proof of lease agreements or land ownership. Please note that any lands proposed for the keeping of the horse will be subject of an assessment of suitability by Galway County Council and the decision on suitability of nominated lands will be made based on the inspector’s findings.
(c) Equine registration number of the leased/owned lands or premises where the animal will be kept.
(d) Payment of costs to the Council.
The breakdown of costs are:
(1) Horse seizure and transport – €450.00 plus vat @ 13.5% = €510.75.
(2) Vet fee for health check and marking card – €80.00 plus vat @ 13.5% = €90.80.
(3) Bed and breakfast per night – Sunday night 11th February to Monday night 26th February €20.00 x 16 nights – €160.00 plus vat @ 13.5% = €363.20.
(4) Return charge and transport – €450.00 plus vat @ 23% = €553.50.
(5) Galway County Council Administration = €589.93
Total cost including vat= €2108.18.
Please note that each additional night beyond the 26th of February 2018 incurs an additional charge of €20 plus vat @ 13.5%.
The proofs listed above must be presented to the County Council before 1pm on the 5th of March 2018.”
11. This letter was responded to on behalf of the Applicant by his solicitors, Rhatigan & Company Solicitors. The solicitor’s letter is dated 14th March 2018. As noted earlier, the Applicant disputes the Local Authority’s assertion that the horse was detained while it was in a public place. The Applicant’s position in this regard was set out in detail in the solicitor’s letter, and, in particular, it was alleged that the field in which the horse had been maintained is adequately fenced.
12. Insofar as proof of ownership is concerned, the solicitor’s letter stated as follows.
“Furthermore, you have advised in your letter that the passport presented by our client which was issued by the Standardbred and Trotting Horse Association of Great Britain and Ireland is an association that is not a passport issuing body authorised by the Department of Agriculture Food and Marine in Ireland and whilst we find this somewhat hard to believe we are liaising with the Department in relation to this matter. However, we have contacted the Standardbred and Trotting Horse Association of Great Britain and Ireland who have advised us that at some stage last year the association did transfer its Irish horses onto the Irish stud book and we have now checked with the Irish Harness Racing Association who confirm that Chief of Colours is on their books with the owner being recorded as Edward McDonagh. We are awaiting instructions as to how to convert our client’s current passport into one from the Irish Harness Racing Association and in the meantime, it is perfectly clear that our client is the owner of the horse that you ceased (sic). Therefore, we fail to see why you are insisting on proof of ownership unless it is your position that our client is not the owner of the horse despite the horse being micro chipped and if that is your position you might set that out in writing. In relation to the ownership of the land that our client will keep his horse on, we fail to see what relevance this is to Galway County Council so long as the land that the horse is kept on is not public property and our client will have no difficulty giving an undertaking that his horse will not be kept on public property.
Finally, in relation to the payment of costs to the Council, it would be our view that the costs in question are only payable if our client’s horse was in fact on public property when it was ceased (sic) by Galway County Council and therefore we would call upon you to furnish us with your proof that this is the case pending what our client is told by the Gardaí.
Our client has no desire for Galway County Council to be incurring costs in keeping his horse and it is clear that he is the owner of the horse in question. We fail to see why Galway County Council is continuing to put itself to the expense of holding the horse when despite the fact that there may not be an Irish issued passport for the horse, it is clear that the horse is on our client’s property and the horse will not be kept on public property. We would call upon Galway County Council to immediately return our client’s horse without any further delay and if Galway County Council is not prepared to return our client’s horse then at the very least, we would call upon you by return to advise us as to the location of our client’s horse and confirm that our client can arrange for his Vet to examine his horse to ensure that his horse is being properly maintained by Galway County Council and in this regard we look forward to hearing from you.”
13. A letter was sent by Galway County Council on 6th April 2018 to Mr Edward McDonagh, the Applicant, at his home address. This letter refers to the earlier letter from the Local Authority of 26th February 2018, and, in effect, repeats the proofs to be presented by the Applicant. A further breakdown of costs is provided; this time it has been updated to reflect the additional nights of “Bed and Breakfast”. The revised figure for costs is €3,129.68.
14. The letter concludes as follows.
“I again call upon you to furnish to the Council the necessary proofs by 1pm on Friday the 13th April 2018.
If the Council have not received the required proofs by this time on this date an instruction will be issued for the animal to be euthanised.”
15. This letter of 6th April 2018 appears to be the first occasion upon which the Local Authority had indicated in writing to the Applicant an intention to destroy the horse. In the event, the horse was, in fact, destroyed a mere seven days later, i.e. on 13th April 2018.
16. This letter from the Local Authority was responded to by the Applicant’s solicitor on 12th April 2018. The key passages of the solicitor’s letter are as follows.
“We refer to previous correspondence in relation to the above matter resting with your letter of the 6th inst sent directly to our client, the contents of which we note. First of all, we note that you refer to our letter of the 14th ult and state that our letter does not address the necessary proofs required by the council in order for the council to consider returning the horse to our client. However, you have failed to respond to our letter of the 14th ult which raises a number of valid issues that Galway County Council needs to deal with. First and foremost, we would call upon you to confirm the whereabouts of our client’s horse and confirm furthermore that our client can have his horse inspected by his own vet to ensure the animal’s wellbeing.
In addition to your failure to respond to our correspondence you are now corresponding directly with our client threatening to euthanize his horse unless the proofs you have requested are furnished by 1.00 pm on Friday the 13th April 2018 which is not only completely unfair on our client and the animal itself but it is also complete abuse of power by Galway County Council. We would refer you again to our letter of the 14th ult wherein you were put on notice that our client’s horse is a very valuable stallion and our client will be holding you responsible for any loss accruing to him as a result of the actions of Galway County Council.
In relation to the proofs requested, we have contacted the Irish Harness Racing Association who have confirmed to us that our client’s horse is micro chipped and is on the Irish Stud Book with its registered owner as our client. Furthermore, and more importantly, the Irish Harness Racing Association has advised us that an equine passport is a lifetime document and that the equine passport issued by the Standard and Trotting Horse Association of Great Britain and Ireland is a perfectly valid equine passport and the Irish Harness Racing Association is at a loss to understand why it is not being recognised by Galway County Council. We are further advised by Irish Harness Racing Association that no authority issuing equine passports can issue a second passport for a horse who already has a valid passport and accordingly we would call upon you to confirm in writing that our client has satisfied the proof of ownership.
In relation to the remainder of the proofs requested, we would advise that our client is renting private land on the Headford Road from a Mr. Sean Fahy and will be obtaining documentary proof of this and furnishing it in early course and we would also advise that our client is liaising with the Department of Agriculture in relation to the equine registration number. In relation to the payment of costs to the council you have failed to deal with the issue raised in our letter of the 14th ult regarding your right to cease ( sic ) our client’s horse in the first place other than stating that our client’s horse was on public property. We are instructed that our client’s horse has been in the one field for more than three years and our client does not accept that his horse would leave the field in question unless it was taken by staff of Galway County Council or alternatively that the actions of members of Galway County Council who attended at the property caused the animal to escape and obviously, if you are stating that our client is liable for the costs of Galway County Council you must satisfy our client that Galway County Council were within its rights to confiscate the animal in the first place.
Finally, we would call upon you to desist from threatening to destroy our client’s property until such time as you have dealt with the issues raised in this and our letter of the 14th ult and in this regard we look forward to hearing from you.”
17. As explained by Mr McDonagh in his affidavit, he again attended at the public counter of the Local Authority on 12thApril 2018, and furnished a number of documents to the Local Authority.
18. This attendance is referred to as follows in an email sent from Mr Evan Mulvey of the Local Authority to the Applicant’s solicitors on the afternoon of 12th April 2018.
“Noel,
I wish to acknowledge receipt of your letter dated 12th April 2018.
I can advise that your client Mr Edward McDonagh presented to the public counter at approx. 1435, Mr. McDonagh presented 8 pages of documentation which I photocopied and returned the originals to Mr McDonagh. I verified with Mr McDonagh each page to confirm I had the accurate copies of his documents.
1. Passport- “The Standardbred & Trotting Horse Association of Great Britain & Ireland x2 pages.
2. Colour map “coarsefield” & “Carrowbrowne” x 1 page
3. Department of Agriculture, Food & the Marine – Application for registration of an equine premises x3 pages
4. AHCS “Herd number details” x 1 page
5. Letter signed by Sean Fahy regarding grazing land x 1
I explained to Mr McDonagh that I would revert once the submitted documents had been assessed.
I reminded Mr McDonagh that the fee of €3129.68 must be paid before 1300hrs tomorrow the 13th April 2018.
Mr. McDonagh advises that he will not pay the fees.
I confirm that full payment of the amount sought of €3129.68 MUST be lodged with Galway County Council by 1300hrs tomorrow Friday the 13th April 2018, failure to lodge this sum will result in an instruction to euthanize the horse.”
19. As appears from this email, the Local Authority indicated that the additional documentation submitted by the Applicant would be assessed, and that the official would then revert to the Applicant. There is no evidence, however, before the court that such an assessment was carried out prior to the decision to direct the destruction of the animal less than 24 hours later.
20. The Applicant’s solicitor sent a further letter the next day (13th April 2018). Crucially, the position in relation to the fees was dealt with as follows in that letter.
“If the fees due to Galway County Council are indeed due, then our client will discharge same in due course but our client will not discharge same today when you are literally holding a gun to his horse’s head and we would reiterate that the manner in which this matter has been dealt with by Galway County Council is a complete abuse of power and if Galway County Council persists in this abuse and destroys our client’s horse then we will be instituting legal proceedings without further notice.”
21. No substantive written response was ever made to that letter.
22. The horse was destroyed on the evening of 13th April 2018. (See Affidavit of Evan Mulvey, paragraph 19). It appears that the principal factor informing the decision to destroy the horse was the failure on the part of the Applicant to pay the fees requested.
LATE AFFIDAVITS
23. The proceedings came on for hearing before me on 9th April 2019. There was some dispute at the hearing as to whether two additional affidavits should be admitted. It seems that an affidavit had been sworn on behalf of the Applicant on the Friday before the hearing (5th April 2019), and this affidavit was then included in the Booklet of Pleadings handed into the court. The Local Authority objected to the admission of this late affidavit on the basis that no leave of the court had been granted for the filing of same. The Local Authority had prepared de bene esse its own additional affidavit in response, to which the Applicant, in turn, objected.
24. I have concluded that neither of the two late affidavits should be admitted. These proceedings are judicial review proceedings and, as such, are subject to careful case management pursuant to Order 84 of the Rules of the Superior Courts. Order 84 was significantly revised in 2011 precisely to ensure the efficient administration of judicial review proceedings. These proceedings were listed for case management / directions on a number of occasions in October and November 2018, and had either side wished to adduce further affidavits, an application in that regard should have been made to the judge in charge of the list. It is not appropriate for parties to decide unilaterally to file further affidavits at the eleventh hour without leave of the court. This is especially so in circumstances where, seemingly, no indication was given to the judge in charge of the list at the Thursday call over that such affidavits would be filed.
25. At all events, I have decided to determine the proceedings on the basis of the affidavits as they stood as of the Thursday call over, i.e. I have not had regard to the two late affidavits.
GALWAY COUNTY COUNCIL BYE-LAWS
26. Section 39(2) of the Control of Horses Act 1996 empowers a local authority to make bye-laws in respect of the following matters.
“(2) Bye-laws may be made by a local authority for all or any of the following matters in relation to horses detained within its functional area under section 37 —
(a) the notices to be given or displayed in connection with the detaining of such horses,
(b) the fees to be paid by the owner or keeper of such horses including fees in respect of their keep, any veterinary services and any transportation,
(c) the provision of veterinary services for such horses,
(d) the disposal pursuant to a direction of the local authority in whose functional area a horse is detained or of the Superintendent, as the case may be, of a horse where the owner or keeper is unknown or cannot be found and the time after which such disposal shall take place,
(e) the disposal pursuant to a direction of the local authority in whose functional area a horse is detained or of the Superintendent, as the case may be, of a horse where the owner or keeper is known and can be readily found, and where the owner or keeper, on request of the local authority, Superintendent or person in charge of a pound or place where a horse is detained within such time as may be specified in the bye-laws—
(i) fails to pay any fees specified in bye-laws made under this subsection, or
(ii) fails to produce, where appropriate, a horse licence for the time being in force in respect of the horse granted by that local authority or another relevant local authority if the horse is kept in a control area declared by that authority or another authority, or
(iii) fails to remove the horse,
(f) the disposal pursuant to a direction of the local authority in whose functional area a horse is detained or of the Superintendent, as the case may be, where the release of a horse is refused under subsection (5), and the time after which such disposal shall take place,
(g) such other matters as it considers relevant.”
27. Under section 13 of the Control of Horses Act 1996, the making of Bye-Laws is a “reserved” function, i.e. it is subject to the approval, by resolution, of the elected members of a local authority.
28. Galway County Council made Bye-Laws pursuant to section 39 of the Control of Horses Act 1996. These Bye-Laws came into operation on 1st October 1998.
29. The procedures for the release or the disposal of a detained horse are dealt with under Article 9 of the Bye-Laws as follows.
“HORSE DETAINED UNDER SECTION 37
[…]
(e) The horse may be released to the owner or keeper of the horse, on proof being tendered of his/her ownership or right to keep the horse, on production of an appropriate current licence where required under these Bye-Laws and on payment of all outstanding fees and expenses in respect of the horse provided that detention of the horse is not required by the Council or a Superintendent in accordance with Section 39(1)(a) (b) or (c) of the Act, and provided that the Council or the Superintendent is satisfied that adequate accommodation and sustenance and, if necessary, adequate veterinary attention, will be provided for the horse and is satisfied that the horse will not be cruelly treated.
(f) If the owner or keeper of the horse shall fail to make himself/herself known to the Council or cannot be found within a period of five days from the date of seizure and detention the Council or the Superintendent may dispose of the horse in accordance with these Bye-Laws and the Act.
(g) If the owner or keeper of the horse is known and can be readily found but on request by the Council, the Superintendent or the person in charge of the pound or place where the horse is kept, within 5 days or such longer period as may be specified in the request of demand being made fails to pay fees due hereunder or fails to produce a current appropriate licence where required under these Bye Laws or fails to remove the horse the Council or the Superintendent may dispose of the horse in accordance with these Bye-Laws and the Act.
(h) Where the Council or the Superintendent decides to dispose of the horse they may do so by way of sale or destruction. Sale may be by way of public auction or at a market or in any other manner considered appropriate by the Council or the Superintendent.
(i)(i) Where it is proposed to sell a horse under this Bye-Law the Council or the Superintendent shall cause a notice describing the animal and stating where it was seized, where it is being held, and the time and place of the proposed sale, to be displayed at the Garda Station for the area in which the horse was seized and at the place where it is to be sold.
(ii) If the proposed sale is otherwise than by way of auction or at a market the time and place of sale may be omitted from the said notice.
(iii) The said notice shall continue to be exhibited until the horse has been sold or the Council or the Superintendent declares the sale abortive.
(iv) Where the horse has been sold under this Bye-Law, the Council or the Superintendent shall retain out of the proceeds of sale an amount equivalent to all costs, fees and expenses of any kind incurred by the Council or the Superintendent in accordance with Part III Schedule B and C of these Bye Laws and any balance shall be remitted to the owner or keeper of the horse, if known, or if unknown, shall be retained by the Council.”
30. The position in relation to fees is dealt with as follows at article 9(d).
“(d) The Council or a Superintendent may recover from the owner or keeper of the horse all pound fees payable in respect of the horse together with all or any other expenses, including fees for keep, care and sustenance, veterinary fees, collection and transportation fees incurred by the Council or the Superintendent in accordance with Part III Schedule B of these Bye-Laws.”
BURKE V. SOUTH DUBLIN COUNTY COUNCIL
31. Both parties placed emphasis on aspects of the judgment of the High Court (Hedigan J.) in Burke v. South Dublin County Council [2013] IEHC 185. On the facts of that case, a horse had been detained by South Dublin County Council and subsequently destroyed. One of the issues in the case was whether, under the relevant Bye-Laws, the local authority was entitled to detain the horses until such time as the fees requested had been paid.
32. The wording of the South Dublin County Council Bye-Laws differed from those of Galway County Council in the following material respect. The requirement to produce a licence, pay requested fees and received a horse were disjunctive rather than cumulative. The High Court concluded, therefore, that the local authority in that case was not entitled to insist on the payment of the requested fees as a condition precedent to the return of the detained horses. Rather, the local authority was confined to its claim in contract in accordance with section 39(3).
33. Leading counsel on behalf of the Applicant, Mr Mícheal P. O’Higgins, SC, relied in particular on the following passages.
“6.4 Thus pursuant to the Act the local authority is entitled to hold the horses until the licenses for them are produced. Are they entitled to hold them until the fees are paid? The applicant argues that the wording of Bye-Law 6(g) must be carefully read. It provides that the right to dispose of the horses arises if upon demand being made, the owner fails to pay the fees or fails to produce a horse licence and fails to remove the horse. Section 37(1) (f) provides for the right to detain where there is no licence. This is quite logical because s.18 provides that it is an offence to keep a horse without a licence. No provision of the Act however specifically empowers the local authority to detain the horses until the fees are paid. Moreover the wording of the Bye-Law seems to support the argument of the applicant that the power to dispose only arises if all three elements are present i.e. failure to produce a licence, failure to pay the fees and failure to remove the horses. On a literal interpretation this means that where the licence is produced and the owner is prepared to remove the horses, the local authority should release the horses to the owner and if the owner does not pay the fees incurred then the local authority should pursue the remedy provided by s.39(3) of the Control of Horses Act i.e. it should sue him. Here the applicant did obtain licences for the horses and produced them to the local authority. He quite clearly demanded the release of the horses but did not obtain that. He was ready, willing and able to remove the horses, but the local authority refused to release them until payment of the fees.
6.5 The power to dispose of the horses is a draconian power albeit one necessary in certain circumstances. It is not a criminal sanction but a remedy available where the owner fails to remove the horses. Absent clear statutory provision I cannot see how an owner’s property rights in his horses can be arbitrarily removed in order to enforce a debt save by the order of the Court. Thus, it seems to me that in this case the action of the respondent in disposing of the horses was ultra vires and not in accordance with law.
34. Counsel on behalf of Galway County Council, Mr Stephen Dodd, BL, sought to distinguish the judgment in Burke by reference to the following factors. Counsel emphasises that the language of the South Dublin Bye-Laws differed in a significant respect from that at issue in the present case. More specifically, the requirements in relation to the payment of fees, the production of a licence and failure to remove were cumulative not disjunctive. The disjunctive nature of the requirements under the South Dublin Bye-Laws was central to the finding of the High Court in Burke . Counsel also submits that the applicant in Burke held a horse licence and that there was no dispute as to his ownership of the horse. The Burke judgment was also decided prior to the introduction of the EU (Identification of Equidae) Regulations 2016.
DISCUSSION
Proceedings not moot
35. The Local Authority submits that the proceedings are moot in circumstances where the horse had already been destroyed before the proceedings were instituted. It is further submitted that the grant of declaratory relief would serve no purpose. Reliance is placed in this regard on the judgment in P.V. v. The Courts Service [2009] 4 IR 264 (” P . V .”) and Godsil v. Ireland [2015] 4 IR 535 (” Godsil “).
36. The concept of mootness ordinarily arises where proceedings have been overtaken by external events with the consequence that the resolution of the underlying dispute no longer has any practical relevance. For example, in the context of immigration law, a challenge to an earlier decision may have become moot because the applicant has since obtained a form of immigration permission which allows him or her to remain in the State. The “wrong” alleged in respect of the earlier decision no longer has any practical significance. See, for example, Lo finmakin v. Minister for Justice Equality and Law Reform [2013] IESC 49, [2013] 4 IR 274.
37. Both of the judgments relied upon by the Local Authority are examples of this type of mootness. The central issue in P.V . concerned custody of a child’s passport. The child’s mother had sought to make an ex parte application before the District Court directing the father of the child to surrender the passport. The District Court Clerk refused to list the application for hearing because the form of proceedings was irregular. The mother then made an application directly to the High Court, and that court directed the father to hand the passport over. The applicant next instituted separate judicial review proceedings seeking to challenge the earlier decision of the District Court Clerk. Those judicial review proceedings were dismissed as moot in circumstances where the mother had already obtained the relief which was the purpose for the attempted application to the District Court in the first place.
38. The proceedings in Godsil were rendered moot by a legislative amendment. The plaintiff in those proceedings had sought to challenge legislation which precluded an undischarged bankrupt from seeking election. The proceedings were rendered moot in circumstances where the impugned legislation was amended by the Electoral (Amendment) (No.2) Bill 2014. The Supreme Court concluded that the legislative amendment was made in direct response to the proceedings, and allowed the plaintiff her costs.
39. The facts of the present case are entirely different in that there has been no intervening event which renders the proceedings moot. Instead, the Local Authority seeks to rely on its having done the very thing which the Applicant alleges to have been unlawful. In effect, the Local Authority seeks to resist judicial review proceedings, which challenge its conduct in having the horse destroyed, by reliance on the fact that it destroyed the horse. This argument is entirely circular.
40. I do not think that the concept of mootness should apply in such circumstances. To hold otherwise might well have the unintended consequence of encouraging public authorities, whose actions have been queried, to carry out and complete those actions promptly before legal proceedings can be instituted. The public authority could then seek to avoid review of its actions by arguing that any proceedings are now moot. This would be to place a premium on public authorities acting precipitously and would undermine the rule of law.
41. The Applicant has been granted leave to challenge the conduct of the Local Authority in directing the destruction of the horse “Chief of Colours”. This issue is justiciable, and in the event that the court were to find in favour of the Applicant, it has jurisdiction to grant declaratory relief and damages. There thus remains a live issue as between the Applicant and the Local Authority as to whether the latter’s conduct in directing the destruction of the horse was lawful.
Statutory power to dispose of animal by destruction
42. The first substantive issue to be addressed is the nature and extent of a local authority’s statutory power to destroy a horse which has been detained by it. The legislation allows for the destruction of an animal in three principal circumstances as follows.
(i). An express power of destruction is provided for under section 41 of the Control of Horses Act 1996. The power is exercisable where a horse is in such pain or distress or state of acute neglect or so severely injured or diseased that it would be in the interests of the welfare of the horse, or the safety, health or welfare of other animals or persons it may come into contact with, to have it humanely destroyed.
(ii). A horse which has been detained on three or more occasions may be disposed of pursuant to section 40 of the Control of Horses Act 1996. The statutory definition of “dispose of” under section 2 includes to have destroyed.
(iii). A local authority is empowered under section 37 of the Control of Horses Act 1996 to make bye-laws providing for inter alia the disposal of a detained horse pursuant to a direction of the local authority. In particular, bye-laws may provide for the disposal of an animal where the owner or keeper, on request, fails to pay any fees specified in the bye-laws within such time as may be specified in the bye-laws. The statutory definition of “dispose of” under section 2 of the Control of Horses Act 1996 includes to have destroyed.
(The relevant extracts from the Galway County Council Bye-Laws have been set out earlier).
43. The structure of the legislation is unusual in that where the Act itself regulates the disposal a horse (section 40), there are extensive procedural safeguards built-in. These ensure a right to be heard on the part of the owner of the horse. There is also a right of appeal to the District Court. By contrast, section 39 purports to allow a local authority to make bye-laws which would enable a local authority to dispose of a horse (including by way of destruction of the animal) merely because there has been a failure to comply with a request to pay fees. It seems somewhat anomalous that such extensive provision should be made for fair procedures under section 40 only to have those largely set at naught by allowing the local authority the freedom to make such bye-laws.
44. Galway County Council seeks to explain this distinction as follows in its written legal submissions.
“20. It should also be observed that the power to dispose under Bye Laws 9 (g) and (f) is entirely different to the power to dispose under section 40 of the 1996 Act. Under section 40 of the 1996 Act, there is a power to dispose where a horse has been detained on two or more occasions within the last 12 months. This applies even where the owner can produce all proof of ownership, a horse licence and has paid all the fees and expense and is willing to remove the horse. In contrast under Bye-Law 9 (f) the Council can only dispose of the horse where one of these circumstances exist.”
45. I am satisfied that Galway County Council is, in principle, empowered pursuant to its Bye-Laws to dispose of a horse, by way of destruction, in circumstances inter alia where the owner has failed on request to pay any fees specified in the Bye-Laws. This power may be exercised within a period of five days.
46. However, given that the exercise of a statutory power to dispose of a horse, by way of destruction is—to borrow the language of Hedigan J. in Burke v. South Dublin County Council [2013] IEHC 185—a Draconian one, a local authority is obliged to comply with and act in accordance with the requirements of its own Bye-Laws. This is because a decision to destroy a horse potentially engages the constitutional property rights of the owner. The statutory regime seeks to balance (i) the public interest in ensuring that horses do not cause a danger to persons or property or a nuisance, against (ii) the property rights of horse owners. The power must be exercised reasonably and proportionately. In at least some instances, it will be necessary to have regard to the submissions of potentially affected parties ( audi alterem partem ).
47. On the facts of the present case, I have concluded that the actions of Galway County Council in destroying “Chief of Colours” on 13th April 2018 were ultra vires for the following three reasons.
(i) Sum not properly requested
48. First, the Local Authority has failed to establish that the request to pay the sum of €3,129.68 was properly made in accordance with the Bye-Laws. The Bye-Laws confer upon the Local Authority an extraordinary entitlement to demand payment under the threat of the disposal of the horse at issue. There is no provision made whereby the affected person can challenge the amount requested by the Local Authority nor is there a right of appeal to an independent tribunal. This entitlement to demand payment is in marked contrast to the normal method of enforcing payment, namely as a simple contract debt as provided for under section 39(3) of the Control of Horses Act 1996.
49. In order for such an extraordinary entitlement to be lawful, it is essential that the manner in which the amount demanded is to be calculated is objective and transparent. This is achieved by the requirement under section 39(2)(b) of the Control of Horses Act 1996 that the fees to be paid by the owner or keeper of such horses (including fees in respect of their keep, any veterinary services and any transportation) be specified in the Bye-Laws. The making of the Bye-Laws is a reserved function of the elected members and is subject to extensive public consultation under section 13 of the Control of Horses Act 1996. Thus, the setting of the fees has a democratic imprimatur.
50. The amount of the fees payable under Galway County Council’s Bye-Laws are set out in Schedule B as follows.
DESCRIPTION AMOUNT OF FEE
(i). Collection and transportation of horse by vehicle from a place where it was found to the place of detention. Actual costs or £100 per horse, whichever is the greater.
(ii). Care and sustenance during the period of detention. Actual costs or £30 per day per horse, whichever is the greater.
(iii). Veterinary attention where provided. Actual costs or £40 per visit per horse, whichever is the greater.
51. As appears, the fees are referable to the three categories of fees identified in Section 39(2)(b) as follows.
“(b) the fees to be paid by the owner or keeper of such horses including fees in respect of their keep, any veterinary services and any transportation”.
52. Crucially, there is no reference in either the Bye-Laws nor section 39(2) to “administration” costs. Yet, the breakdown of the sum of €3,129.68 demanded by Galway County Council in its letter of 6th April 2018 indicates that a sum of €589.93 is being claimed in respect of “Galway County Council Administration”. There is no legal basis for demanding this payment, and its inclusion in the overall sum of €3,129.68 vitiates the demand for payment.
53. There is a further difficulty with the demand for payment as follows. Schedule B of the Bye Laws purports to set costs by reference (i) to fixed figures, e.g. £30 per day per horse in the case of care and sustenance during the period of detention, and (ii) to “actual costs”. As explained presently at paragraph 68, I have grave doubts as to whether it is lawful for a local authority to set fees other than by reference to objective figures. A reference to “actual costs” is too vague, and does not meet the requirement for legal certainty. It also undermines the public participation provided for under section 13. However, in the absence of a challenge to the validity of the Bye-Laws, this court must treat same as valid. Nevertheless, the Bye-Laws must be interpreted insofar as possible to ensure compliance with the property rights of owners. Accordingly, in circumstances where Galway County Council wishes to rely on the “actual costs” incurred, the Local Authority must vouch for those costs, i.e. evidence should be provided which substantiates that it incurred this level of costs.
54. In the present case, there is no evidence before the court that the sum requested is in accordance with the fees specified in the Bye-Laws. The Local Authority has failed to provide evidence either to the Applicant during the course of the exchange of correspondence in March and April 2018, or to this court, that the sum requested does, in fact, represent the “actual costs”.
(ii) Ongoing dispute as to proof of ownership
55. Galway County Council has discretion to dispose of a horse in the circumstances provided for under the Bye-Laws. As is the case with most statutory discretion, the courts will show some deference to the Local Authority’s decision-making. There are, however, limits to this discretion. The decision to destroy a horse engages the property rights of the owner of that animal. The decision must therefore be proportionate. The Local Authority has cited the judgment of the Supreme Court in Meadows v. Minister for Justice and Equality [2010] IESC 3, [2010] 2 IR 701. The principle of proportionality forms part of the “reasonableness test”. This is reflected, albeit in a specific contingency, under section 40 of the Control of Horses Act 1996.
56. On the facts of the present case, I have concluded that it was disproportionate for the Local Authority to proceed to have the horse destroyed on 13th April 2018 in circumstances where there was an ongoing dispute between the Applicant and the Local Authority as to whether the former had established his ownership of the horse. That dispute had rested with verbal representation made by an official, subsequently confirmed in writing by email to the Applicant’s solicitor, that the Local Authority would assess additional documentation provided by the Applicant on 12th April 2018. There is no evidence before this court that such an assessment was, in fact, ever carried out. Certainly there is no evidence of an assessment having been carried out in the intervening 24 hours before the decision to destroy the horse was made.
57. The Local Authority should have carried out and completed its assessment of the documentation provided by the Applicant before making a decision to destroy the horse. It was unreasonable and disproportionate to demand of an individual that they pay what is not an insignificant sum of €3,129.68 in circumstances where the Local Authority might ultimately refuse to release the horse to the individual in the event that the Local Authority was not satisfied of proof of ownership. The so-called “Bed and Breakfast” fees were €20 (plus VAT) per night, and the Local Authority should have held off for as long as it took for the officials to assess the additional documentation. This could not have taken more than a number of days and, accordingly, the extra cost to the Local Authority would have been very small. This is especially so where the Applicant’s solicitor had indicated in his letter of 13th April 2018 that the Applicant would pay the fees requested in due course.
58. Whereas it is correct to say that the Bye-Laws allow the Local Authority to exercise its power to destroy a horse within a very short period of time, namely five days, a local authority may be precluded from exercising its statutory power in this regard as a result of its conduct and/or representations. On the facts of the present case, the events of 12th April 2018 gave rise to a reasonable expectation on the part of the Applicant that an assessment of the additional documentation would be carried out before a final decision was made to destroy the horse. By acting as it did, in a precipitous manner, the Local Authority breached the legitimate expectation of the Applicant.
59. Strictly speaking, it is not necessary for this court to resolve the ongoing dispute between the Applicant and the Local Authority as to the status of the equine passport issued by the Standardbred and Trotting Horse Association of Great Britain and Ireland. This is because the present case is being determined on the basis that the failure of the Local Authority to defer a decision to destroy the horse pending its assessment of the additional documentation furnished by the Applicant rendered its conduct unlawful. I should observe, however, that it is not entirely clear that the Local Authority fully understood the obligations under the Commission Implementing Regulation (EU) 2015/262 (Equine Passport Regulation). In particular, if and insofar as the Local Authority was suggesting that a second equine passport had to be issued or that the passport furnished by the Applicant was “invalid” (as was submitted in oral argument before me), this appears to be mistaken. The purpose of the EU Regulation was to ensure a single identification document for each individual horse. The requirement under Article 27 of the EU Regulation was to lodge an equine passport with one of the Irish passport issuing organisations. It did not require the issuing of an entirely new passport. As I say, it is not necessary to resolve this issue for the purposes of the present proceedings.
60. It was suggested at the hearing before me that the court should infer that there was nothing “new” in the additional documents furnished on 12th April 2018, and that any assessment of the documents would have resulted in the same outcome as the earlier assessments, i.e. a refusal to recognise the Applicant as owner of the horse. With respect, a respondent in judicial review proceedings has a duty of candour to the court. Accordingly, if the Local Authority had wished to make the case that the documentation submitted on 12th April 2018 was inadequate, then this should clearly have been explained on affidavit. If the Local Authority wished to rely on a contemporaneous decision in this regard, then documentation evincing that decision should have been furnished. None of this occurred.
(iii) Possibility of sale / Health of horse
61. Where the Local Authority decides to dispose of a horse, the authority undoubtedly enjoys a discretion under the Bye-Laws as to the precise method of disposal. In particular, the authority has a discretion pursuant to article 9(i) of the Bye-Laws as to whether to dispose of the horse (i) by way of sale, or (ii) by the destruction of the animal in a humane manner (as required under section 39(7) of the Control of Horses Act 1996).
62. As with the exercise of any statutory discretion, the courts will show some deference to the decision-maker to whom the decision has been entrusted under legislation. Having said that, a decision-maker is not entirely at large. In particular, a decision-maker must have regard to relevant considerations in reaching its decision. There are at least two factors to which Galway County Council should have had regard in deciding whether to dispose of the horse by way of the destruction of the animal. The Local Authority is not required to engage in a very formal or detailed assessment of these two factors. However, it is important that there should be some evidence that regard has been had to same before a decision to destroy an animal is made.
63. First, the Local Authority should have given some consideration to whether the horse might have been disposed of by way of a sale. Depending on the sum likely to be achieved in such a sale, it might have been possible to defray the costs incurred by the Local Authority itself, with any surplus being remitted to the owner. See article 9(i)(iv) of the Bye-Laws.
64. Secondly, some consideration should have been given to the state of health of the animal. It would be disproportionate for a local authority to decide to destroy an otherwise healthy animal merely in order to avoid continuation of payment of “Bed and Breakfast” fees for a short period pending the assessment of the documents furnished on 12th April 2018.
65. There was some suggestion at the hearing before me on 9th April 2019 that “Chief of Colours” was not in a healthy condition. However, there is no affidavit evidence to this effect. Such documentary evidence as there is consists of a copy of the report of a vet prepared shortly after the seizure and detention of the horse in February 2018. See Exhibit “SC1” to Mr Coogan’s affidavit. The report indicates that on initial examination on 11 February 2018, the horse was found to be shivering and in what appeared to be a depressed state. A long-term acting antibiotic and steroid injection were recommended. The report concludes by stating (i) that the animal was seen again on the following day (12 February 2018); (ii) that the vet’s recommendations with regard to husbandry had been adhered to; and (iii) that no follow-up up treatment was considered necessary. This report does not therefore support an argument that the health of the animal justified its destruction. Moreover, there is no evidence of the animal’s condition as of April 2018.
OBITER DICTA: GALWAY BYE-LAWS
66. Counsel on behalf of the Local Authority, Mr Dodd, BL, submitted firmly but politely that this court has no jurisdiction to entertain a challenge to the validity of the Bye-Laws in circumstances where same had not been pleaded. Counsel relies, by analogy, on the judgment of the High Court (Clarke J.) in Simmonds & Real Olive Co. Ltd v. Ennis Town Council [2012] IEHC 282 (impermissible collateral attack on bye-laws).
67. This submission is well made insofar as it goes. However, in circumstances where cases concerning the application and interpretation of the Control of Horses Act 1996 do not often come before the High Court because of the limited value of the horses involved, I think that it is appropriate to voice this court’s concern—albeit by way of obiter dicta —as to the manner in which the Galway Bye-Laws purport to set out the fees payable. As counsel has correctly pointed out, Bye-Laws which have been adopted as a reserved function of the elected members of a local authority carry a certain democratic legitimacy. (Counsel cited the judgment of the High Court (Cooke J.) in Island Ferries teo v. Galway County Council [2013] IEHC 587). This is reinforced by the extensive provision made for public participation under section 13 of the Control of Horses Act 1996.
68. Precisely for these reasons, Bye-Laws should be self-contained and address all relevant issues. Section 39 envisages that Bye-Laws will determine the fees payable in respect of the keep of a horse, any veterinary services and any transportation. Whereas Schedule B of the Galway Bye-Laws does indicate a fixed sum for each category, legal certainty is then undermined by the inclusion of an alternative basis of calculation, namely “actual costs”. This subjective criterion undermines the requirement for transparency and predictability.
69. It must be doubtful whether it constitutes compliance with section 39 for the Local Authority to use vague terms such as “actual costs”. The purpose of reserving the decision to make Bye-Laws to the elected members and for public participation under section 13 is to ensure democratic accountability, and, further, to ensure that members of the public know precisely what is required of them under the Bye-Laws. There is especially so where there is no procedure under the Bye-Laws by which an affected party can challenge these figures, and the Local Authority can proceed to destroy a horse within a period of five days in the event of non-payment.
CONCLUSIONS
70. The challenge to the legality of the initial seizure and detention of the horse is unfounded. On the basis of the affidavit evidence before the court, it is clear that the criteria for the detention of the horse under section 37 of the Control of Horses Act 1996 were met.
71. Galway County Council is empowered pursuant to the Bye-Laws to dispose of a horse, by way of destruction, in circumstances inter alia where the owner has failed on request to pay any fees specified in the Bye-Laws. This power may be exercised within a period of five days.
72. In order to constitute a valid exercise of this power, the Local Authority must have acted in accordance with the Bye-Laws and the Control of Horses Act 1996. In particular, the Local Authority must demonstrate that the amount which the owner has been requested to pay has been calculated by reference to the level of fees specified in the Bye-Laws. There is no reference in either the Bye-Laws nor Section 39(2) to “administration” costs. Yet, the breakdown of the sum of €3,129.68 demanded by Galway County Council in its letter of 6th April 2018 indicates that a sum of €589.93 is being claimed in respect of “Galway County Council Administration”. The improper inclusion of this fee item vitiates the demand for payment, and the subsequent decision to destroy the horse. The Local Authority has also purported to rely on the power under the Schedule of the Bye-Laws to fix the fee by reference to the “actual costs” incurred. The Local Authority has failed to provide evidence either to the Applicant during the course of the exchange of correspondence in March and April 2018, or to this court, that the sum requested does, in fact, represent the “actual costs”.
73. On the facts of the present case, I have concluded that it was disproportionate for the Local Authority to proceed to have the horse destroyed on 13th April 2018 in circumstances where there was an ongoing dispute between the Applicant and the Local Authority as to whether the former had established his ownership of the horse. The Local Authority should have carried out and completed its assessment of the documentation provided by the Applicant before making a decision to destroy the horse. The so-called “Bed and Breakfast” fees were €20 (plus VAT) per night, and the Local Authority should have held off for as long as it took for the officials to assess the additional documentation. This could not have taken more than a number of days and, accordingly, the extra cost to the Local Authority would have been very small.
74. In circumstances where the Local Authority has decided to “dispose” of a horse, it has a discretion pursuant to the Bye-Laws to do so by way of the sale of the horse or by the destruction of same in a humane manner (as required under section 39(6) of the Control of Horses Act 1996). In exercising this discretion, a Local Authority should give some consideration (i) to whether the horse might have been disposed of by way of a sale, and (ii) to the state of health of the animal.
PROPOSED ORDERS
75. For the reasons set out herein, I propose to make an order in terms of paragraph (d)(ii) of the Statement of Grounds setting aside the decision of Galway County Council to dispose, by way of destruction, of the horse referred to in these proceedings as “Chief of Colours” and bearing the microchip number 985161000736396. I also propose to make a declaration that Galway County Council acted ultra vires in purporting to demand payment of the sum of €3,129.68 and then relying on the non-payment to destroy the horse, in circumstances where this sum was not calculated in accordance with Schedule B of the Galway County Council Bye-Laws 1998.
76. The Applicant has made a claim for damages arising from the wrongful and unlawful slaughtering of the horse. See paragraph (d)(vi) of the Statement of Grounds. Neither the issue of principle as to whether Galway County Council is liable to pay damages nor the issue of the quantum of damages were argued before me. Instead, the parties seem to have been in agreement that these issues should await a determination on the threshold issue of whether or not the Local Authority had acted ultra vires . I propose to adjourn this matter briefly to allow the parties to consider whether an agreement can be reached between them on the question of damages. In this regard, I note that the indicative estimate of the value of the horse has been given variously at €1,500 and €35,000. Without in any way prejudging the issue, if the value does lie towards the lower end of the spectrum, then it would seem to be in the interests of both parties to seek to reach agreement rather than to incur further costs before the High Court. In this regard, I note that the Schedule of Costs provided under Order 99, rule 5 of the Rules of the Superior Courts indicates that the combined legal fees to date are in the order of €60,000 (exclusive of VAT).
77. I hasten to add, however, that if the parties cannot reach agreement, then the matter of damages will be listed for further argument at a date convenient to the parties.
Haggan v Paisley
Queen’s Bench Division.
8 November 1878
[1879] 13 I.L.T.R 27
May C.J., O’Brien, Barry JJ.
Feb. 8, Nov. 8, 1878
Trespass for seizure of a pianoforte, and trover for converson of same. Traverses of causes of action, and of plaintiff’s property in the pianoforte; and justification of seizure under a distress for rent. Replication to last plea, that the pianoforte was wrongfully placed on the demised premises by the defendant.
At the trial, which was had before Barry, J., and a jury, at the Antrim Summer Assizes, 1877, the facts *27 appearing were as follow:—Hanna held premises as tenant to the defendant, Paisley, at the rent of £18 per annum, and a year’s rent was due Feb. 1, 1876. In 1874, Hanna assigned the furniture in the premises (including the piano) to Cavanagh, under a bill of sale, by way of mortgage security for a debt due to him, containing a clause for re-assignment on re-payment within 24 hours after demand, and a proviso that, until default, Hanna should retain the possession and use of the furniture without interruption, and a power of sale to Cavanagh on default of payment. Hanna remained in possession till July, 1876, when, being applied to by the plaintiff, Mrs. Haggan, for payment of £37 19s. owing to her, he proposed to transfer to her some of his furniture in liquidation of the debt, to which she assented, whereupon he transferred and delivered to her the piano, the subject of the action, and she removed same to a shed belonging to Mrs. Hamilton. Paisley caused the piano to be taken and replaced in Hanna’s house. Mrs. Haggan, the plaintiff, then asked Paisley, the defendant, why he had removed her piano; and Paisley replied that he did not know she had one, but that he had put Hanna’s piano back into his house for the benefit of his creditors, as he was a bankrupt. It did not appear that there had been any demand of the piano by Mrs. Haggan, and refusal to deliver by Paisley; nor was it suggested that Cavanagh knew of the removal by Paisley. The next day Paisley distrained upon the demised premises for the year’s rent due by Hanna, and posted a notice of distress on the window of the house; whereupon Cavanagh claimed the goods distrained (including the piano) as his under his bill of sale, notwithstanding which (Cavanagh having apparently not controverted the right of distress, and it not being suggested that until then the defendant knew of Cavanagh’s claim) they were afterwards sold under the distress. At the sale Cavanagh bought the piano for £16, and a carpet for £9. He handed over to the defendant the amount of the rent due, with costs of distress, &c., retained the balance of the purchase-money, and gave the defendant a receipt for such balance, as if it had been paid to him and repaid by him to Cavanagh; and the piano was delivered to Cavanagh under the sale to him. The jury, in answer to questions left to them, found that the sale of the piano by Hanna to Mrs. Haggan, the plaintiff, was bona fide ; that at the time of the removal of the piano to Hanna’s house by Paisley, the defendant, the latter was not aware of the sale to the plaintiff; and that the value of the piano was £27. Upon those findings the learned Judge directed a verdict to be entered for the defendant; reserving leave to the plaintiff to move to have it changed into a verdict for her, with £27 damages, or with nominal damages, as the Court might think fit—the Court to be at liberty to draw inferences of fact not inconsistent with the findings of the jury.
A conditional order having been obtained by the defendant, pursuant to the leave reserved:—
Representation
M’Mahon, Q.C. (with him, Frazer), for the plaintiff, showed cause.
James Orr, for the defendant, contra.
They cited Fenn v. Bittlestone, 7 Ex. 159 ; Brierley v. Kendall, 17 Q. B. 937 ; Leake v. Loveday, 4 M. & G. 972 ; Newnham v. Stevenson, 10 C. B. 713; Gadsden v. Barrow, 9 Ex. 514; Jeffries v. The G. W. Ry. Co., 5 E. & B. 806 ; Jones v. Davis, 6 Exch. 663; Biddle v. Bond, 6 B. & S. 225; Thorne v. Tilbury, 3 H. & N. 534; Bourne v. Fosbrooke, 34 L. J. C. P. 164 ; Powell v. Hoyland, 6 Ex. 67 ; Jones v. Chapman, 2 Ex. 803 ; Jones v. Powell, 5 B. & C. 649.
Cur. adv. vult.
May, C.J.
The facts of this case appear to be as follow:—A person called Hanna held some premises in Carrickfergus, as tenant to the defendant, Paisley, at the annual rent of £18 one year’s rent was due the 1st February, 1876. Hanna, in the year 1874, by a bill of sale assigned his furniture then in these premises (including the piano, the subject of the action) to Cavanagh, by way of mortgage, to secure a debt due to him. This instrument contained a clause that, if Hanna within twenty-four hours after demand paid to Cavanagh all sums due on foot of the security, the latter should re-assign, provided that until default Hanna should remain in possession and use of the furniture without interruption by Cavanagh; in case of default in payment there was a power of sale to Cavanagh. Hanna remained in possession of the furniture until the month of July, 1876, being at the time indebted to the plaintiff in the sum of £37 19s. Being applied to for the money, he proposed to transfer to her some of his furniture in liquidation of the debt; she assented to this proposal, and a certain amount of the furniture, as ascertained by the valuation of an auctioneer to be equivalent to the amount due, and including the piano, was handed over to her by Hanna. The plaintiff caused the furniture which she thus acquired to be removed, and the piano was placed in some premises belonging to a Mrs. Hamilton. Paisley, the defendant, having heard of the removal of the piano, but not being aware, apparently, of the sale to the plaintiff, caused it to be taken and placed in Hanna’s house. The plaintiff asked him why he had removed her piano—the defendant replied that he did not know she had one, but he had put Hanna’s piano back into his house for the benefit of his creditors, as he was a bankrupt. It does not appear, however, that there was any demand of the piano by the plaintiff, and refusal to deliver by the defendant. The next day the defendant distrained upon the demised premises for the year’s rent in arrear, putting up a notice of distress on the window of the house. Cavanagh thereupon called upon the defendant, and claimed the goods distrained as his under the bill of sale, which was produced. The piano and a carpet were afterwards sold under the distress. Cavanagh bought the piano for £16, and the carpet for £9; handed over to the defendant the amount of the rent due to him, with costs of distress, &c., and retained the balance of the purchase-money; and gave to the defendant a receipt for such balance as if it had been paid to him, and repaid by him to Cavanagh. Subsequently, the plaintiff brought the present action against the defendant.
The summons and plaint contained one count in trespass, for seizing and carrying away the piano; and a second in trover, for conversion of the piano. The defendant pleaded defences by way of traverse, and denying that the goods were the goods of the plaintiff; also, a special defence that he distrained the goods for rent due, to which there was a replication that the goods were wrongfully placed upon the demised premises by the defendant. The case was tried before Mr. Justice Barry, at the Summer Assizes, 1877, for the County Antrim. At the trial the above facts were substantially proved. The Judge left the following questions to the jury:—1. Was the sale of the piano to Mrs. Haggan a real sale, or a sham sale? The jury found that it was a real sale. 2. Had the defendant notice of that sale, when he removed the piano from Hamilton’s premises to those of Hanna? The jury found he had not. 3. What was the value of the piano? The jury found £27. Upon those findings the Judge directed a verdict to be entered for the defendant; reserving leave to the plaintiff to move to have that verdict changed into one for her, with £27 damages, or with nominal damages, as the Court might consider right—the Court to be at liberty to draw inferences of fact not inconsistent with the findings of the jury. Counsel for the defendant has accordingly moved, pursuant to the leave reserved, and has contended that the plaintiff is entitled to have the verdict entered for her, and not for nominal damages only, but for the value of the piano.
It is, I think, clear that the sale of the piano in question by Hanna to the plaintiff was wrongful as against Cavanagh, the mortgagee, and determined the right of user *28 and possession conferred on Hanna by the bill of sale of 1874, and that Cavanagh might upon the sale to, and removal of the goods by the plaintiff have at once maintained an action of trover against her: Fenn v. Bittlesone, 7 Exch. p. 159. But the defendant, Paisley, did not seize the piano by virtue of any right vested in Cavanagh, but for his own benefit, and in order that it might be subject to his distress as landlord—it being admitted that in that capacity he was not justified in seizing the piano. The case of fraudulent removal of goods in order to avoid a distress, so far from being proved, appears to have been negatived by the finding of the jury that the sale to the plaintiff was bona fide. It follows that the defendant as between himself and the plaintiff was a wrongdoer in seizing and removing this piano, and that being so, I do not think he is in a position to set up any right or title of Cavanagh in answer to the action of the plaintiff, as grounded upon the original seizure by him; and the plaintiff is entitled to have the verdict entered for her. But a further question remains to be considered, whether this verdict should be entered for nominal damages or for the value of the piano. It appears that after the seizure by the defendant, but before the sale under the distress, Cavanagh claimed the piano by virtue of his bill of sale, and at that time as against him the possessory right of Hanna was determined, and he had the absolute present right to the goods. He asserted that right, but apparently seems to have then conceded or not controverted the landlord’s right of distress for rent. The piano was afterwards sold under the distress, that is to say, a nominal sale is made to Cavanagh, who paid the defendant the amount of the rent and retained the balance of the purchase money to which he was entitled as owner of the goods.
Under such circumstances, can the plaintiff recover the value of the piano against the defendant? If the defendant had seized and converted the goods before any intervention on the part of Cavanagh, it is possible that, notwithstanding the precarious nature of her right in them, she might have been entitled to recover their value in trover against the defendant, a wrongdoer. In that view the conversion would have taken place at a time when Cavanagh had not interfered, and while it was uncertain whether he would ever interfere; and, as against a stranger and wrongdoer, it would seem that the value of the goods may be recovered by a plaintiff who has a mere right of possession, though as against the real owner the case would be different: Brierley v. Kendall, 17 Q. B. 937. But I do not think the removal of the goods by the defendant, and the placing of them by him on the premises of Hanna, constituted a conversion by the defendant. It appears to me that no conversion took place until the sale under the distress, prior to which the title of the plaintiff had determined by the assertion by Cavanagh of his title, and I think that under the circumstances the case should be regarded as a sale by the defendant of Cavanagh’s goods, not of the goods of the plaintiff. In truth, the person really damnified by the act of the defendant in removing the piano and placing it on the demised premises, appears to have been Cavanagh. The goods removed, not fraudulently, but bona fide, were relieved from the defendant’s right of distress, and so discharged from any right of the landlord’s they were the property of Cavanagh, who, it would seem, might maintain an action against the defendant and recover substantial damages in respect of this transaction. On the other hand, I do not think that the plaintiff, if allowed to recover the value of the piano, could be regarded as a trustee of the amount for Cavanagh, no privity existing between these parties and the plaintiff, as against Cavanagh, being a wrongdoer. The plaintiff has not been substantially injured, as she had no real title to the goods, and I think the justice of the case will be met by entering a verdict for the plaintiff for nominal damages, leaving Cavanagh, if he think it proper, to bring an action against the defendant.
Barry, J.
I, also, am of opinion that the verdict should be entered for the plaintiff, but do not concur in the view of my Lord that the damages should be merely nominal. It was not disputed at the trial that the piano, having been delivered to the plaintiff and placed by her for safe keeping in the shed, was at the time of its removal by the defendant in her possession. It was further conceded that the act of the defendant in removing it from the shed to the demised premises was wrongful, and the only defence ultimately relied on was the jus tertii, or title of Cavanagh under the bill of sale. The general rule of law I understand to be that, where a person is in possession of chattels, though having no other title than such possession, and a wrongdoer seizes and converts these chattels, such wrongdoer is liable to such person in an action, in which the measure of damages is, generally speaking, the value of the goods, and the wrongdoer is not permitted to set up as a defence, or in mitigation of damages, the jus tertii, or, in other words, the superior title of the real owner of the property. Mr. Orr, for the defendant, contended and cited cases to show that when the rightful owner comes forward and, as it were, ratifies and adopts the wrongful seizing, the title of the owner may be set up as a defence. That contention might possibly prevail (I do not say it would) if the defendant here had at once recognised the title of Cavanagh, and given up the goods to him without any further claim or interference for his own benefit. But the conduct of the defendant was quite the reverse. He never recognised the title of Cavanagh, save as subject and subservient to his own wrongful claim under the alleged distress. It was not suggested that Cavanagh knew of the removal of the piano from the shed at all, so it seems difficult to regard him as ratifying an act of which he was ignorant. So far from the defendant’s adopting or sheltering himself under the title of Cavanagh, the conduct of the defendant was adverse to and inconsistent with that title. He persevered in the wrongful distress, he caused the piano to be sold under that distress, he retained out of the proceeds the arrear of rent and expenses, and only recognised Cavanagh to the extent of handing him the surplus. My Lord is of opinion that previous to the intervention of Cavanagh there was only a mere asportavit of the piano by the defendant, and that the conversion by sale must be referred to Cavanagh’s title; but it seems to me that, even assuming that the removal of the piano, followed by the wrongful distress, did not constitute a conversion, the sale under the distress and the appropriation of the proceeds to the rent and expenses must be regarded as the completion of a conversion commenced or originating in the wrongful asportavit. Possibly, the law and justice of the case might best be met by awarding as damages the amount of the proceeds appropriated by the defendant, but there is some difficulty in that course, and the reservation by consent was that the damages, if substantial, were to be the value of the piano. I may add that at the trial little stress was laid, on the part of the plaintiff, upon the mode and circumstances of the sale. I offered a verdict for nominal damages, but the contention of the plaintiff’s counsel was that she should be permitted to obtain from the jury damages of an exemplary amount, as for a high-handed act of oppression—a view in which I did not concur.
O’Brien, J.
I concur with my brother Barry in opinion that, pursuant to the liberty reserved at the trial, the verdict should be entered for the plaintiff with £27 damages, which sum was admitted to have been the value of the piano.
The first question is as to plaintiff’s right to any verdict; the second is as to the amount of the damages to which she is entitled. With respect to the first question, the defendant’s counsel contended that, as the piano at the time of the seizure and alleged conversion was, in fact, the property of Cavanagh under his bill of sale, there should have been a finding for defendant on the issue whether or not it was the property of the plaintiff; and that defendant was entitled to rely on Cavanagh’s right of property as an answer to plaintiff’s claim. In my opinion, however, the defendant was not entitled to do so. It is clear upon the evidence that the original taking of the piano by the defendant was a wrongful act upon his part, as the piano was then in the actual possession of the plaintiff, who had bona fide bought it on the preceding day from Hanna, the former owner, and *29 placed it in a shed, from which it was taken by the defendant and put back by him into Hanna’s house for the purpose of defendant seizing it under a distress for a year’s rent due to him out of Hanna’s house. The jury found that the sale by Hanna to the plaintiff was a bona fide sale. They, also, found that when the defendant took the piano out of the shed and put it back into Hanna’s house, he was not aware of the fact that it had been sold by Hanna to the plaintiff. It appears, however, that defendant, after he was aware of plaintiff having bought the piano, declined to give it back to her, and retained it in his possession as having been distrained for rent, and that he posted on Hanna’s house a notice of the distress. It appears, also, that after such notice of distress was posted, Cavanagh claimed the piano under his bill of sale, but it was not suggested that until Cavanagh did so, the defendant was aware or had heard of Cavanagh’s claim. My brother Barry states in his report what took place at the sale, not that defendant gave back the piano to Cavanagh on the ground of his right to it under the bill of sale, but he states that it was actually set up for sale under the distress, and was then purchased and paid for by Cavanagh. It was then, of course, given to Cavanagh, as it would have been to any other purchaser.
Plaintiff’s counsel relied on his argument upon the decision in Leake v. Loveday, 4 M. & G. 972, in which it was held that, under the circumstances of that case, the defendants were entitled to rely upon the jus tertii as a defence to the plaintiff’s claim to the property of the goods which were the subject of the action; but, in the subsequent case of Newnham v. Stevenson, 10 C. B. 724, Jervis, C.J., in delivering the judgment of the court, rested the decision in Leake v. Loveday upon a ground which does not apply to the case now before us—namely, that the goods for which the action in Leake v. Loveday was brought were not in the actual possession of the plaintiff at the time of the conversion, and it was, therefore, necessary for the plaintiff to prove his title to the goods independent of possession, which he failed to do. In the present case, however, the plaintiff was in actual possession of the piano at the time of the seizure.
It is also to be abserved that the seizure by defendant was not on behalf of Cavanagh, as in assertion of his title (of which defendant was ignorant at the time), and which he subsequently disregarded, when he became aware of it. And it is clear, on authority, that, under such circumstances, the defendant could have no right to set up the jus tertii.
In Jeffries v. The Great Western Railway Co., 5 El. & B. 806, it appeared that one Owen had been in possession of some trucks which were his property; that he had assigned them to the plaintiff, but was allowed by plaintiff to remain in possession of them; that while Owen was in possession, and before plaintiff took possession, Owen assigned them also to the defendants, and that after the plaintiff took possession, the defendants; claiming to be entitled under the assignment to them, seized the trucks. For that seizure an action of trover was brought, and at the trial, before Pollock, C.B., defendants’ counsel offered evidence to show that while Owen was in possession with plaintiff’s consent, he had become a bankrupt; that the bankrupt court had made an order for sale of the trucks, and that, therefore, they were not the property of the plaintiff at the time of the conversion, and the defendants, if responsible at all, were responsible only to the assignees of Owen in the bankruptcy. The Chief Baron, however, stated that, unless some evidence was given that the defendant claimed under the assignees, he would reject the evidence of their title, upon the ground that the defendants, if wrongdoers, could not set up the jus tertii as a defence. The plaintiff obtained a verdict, and the Chief Baron’s ruling was confirmed by the Court, on the ground (as stated by Lord Campbell) that the defendants were strangers to the title which they proposed to set up. In the argument before us other cases were cited to the same effect, but I do not think it necessary to refer to them.
With respect to the question as to the amount of damages, I see no sufficient reason for holding that the plaintiff is not entitled to the £27, being the admitted value of the piano. Defendant’s counsel, in the argument before us, relied upon the decision in Brierly v. Kendall, 17 Q. B., p. 937. In that case plaintiff had assigned certain goods to defendant by bill of sale for securing the payment of the principal sum of £370 15s., with interest, and it was thereby provided that the principal and interest should be paid at any time the defendant might appoint by notice served on plaintiff, at least twenty-four hours before the time so appointed, that in case of such payment not being then made, the defendants might seize and sell the goods, but that until such default, the plaintiff might remain in possession of the goods, notwithstanding being disturbed by the defendants. The defendants afterwards seized the goods, having served a notice requiring payment of said principal and interest. It was admitted, however, that the notice was bad, not having been served twenty-fours before the time fixed in it for such payment, and that the plaintiff was entitled to a verdict. The question before the court was whether the plaintiff (in respect of such of the goods seized as had been comprised in the bill of sale) was entitled as damages to the full value of those goods, and the court held that the value was not the proper measure of the damages. In that case, however, it is to be observed that the defendants under the bill of sale would have been entitled to seize the goods on the day after that in which the seizure was actually made, and it would, therefore, have been manifestly unjust to have given the full value of the goods as the damages for the defendant’s act, which was wrongful only because the seizure was made a day too soon. Lord Campbell, however, stated in his judgment (p. 943) that the case would be different if the action had been brought against a third party. The decision in Brierly v. Kendall does not, therefore, govern the present case, as the defendant had no right to seize the piano, either on the day he took it, or at any subsequent time, and his act was altogether unlawful. From the observations of Mr. Justice Crompton in Jeffries v. The Great Western Railway Company, 5 E. & B. 806 (which was decided some years after Brierly v. Kendall), it would appear that in his opinion the general question we are now considering had not been yet decided; and I think that, under the circumstances of this case, we should hold that the value of the piano is the amount of damages to which the plaintiff is entitled.