a) I don't think C has committed conversion. There are some strong arguments that really you need to interfere with the claimant's legal property rights by exercising exclusive control over the subject matter (see Douglas CLJ 2008 for a summary), and I can't see how C has done this for the reasons stated by Professor Stevens.
b) A can sue C, if C had committed conversion. Essentially, as owner of the goods A has a right to exclusive control, which imposes a prima facie duty of non-interference on the rest of the world. The agreement with B essentially gives B a consent defence against A if A sues them in conversion (i.e. it's a liberty as against A to do things that would otherwise make them liable to A for conversion). That clearly doesn't change the point that C still owes A duties of non-interference, and there is no obvious reason why B's liberty as against A should assist C, if C breaches that duty. Stepping away from the doctrinal answer, correct me if I am wrong, but wouldn't the other result also undermine the point that because of the Torts (Interference with Goods) Act 1973 there's no ius tertii in English law? I am happy to see that Professor Tettenborn also found an authority that gets to the correct result.
I think that point (b) may highlight a problem in thinking about conversion in terms of interferences with possession and rights to possession, in that it makes the question (b) raises more difficult than it needs to be.
Chris
On Wed, Jun 29, 2011 at 12:31 PM, Robert Stevens
<robert.stevens@ucl.ac.uk> wrote:
> I post on behalf of Greg Tolhurst:
> Assume A hires goods to B to be used in B’s business run from premises
> leased from C.
> The contract of hire states that if B fails to pay A on time, or gives up
> possession of A’s goods, then A may terminate and retake possession.
> B goes broke and leaves C’s premises with A’s goods there.
> Before A finds out, C leases the premises with A’s goods intact, to D.
> Questions:
> (a) Is C liable in conversion?
Without more, I do not see how C has committed conversion. C has simply
leased premises which happen to have A's goods upon them. He has not by
doing so denied A possession of the goods. If someone leaves their
umbrella in my hallway I don't thereby commit conversion, and I won't do
so even if I sell my house.
A has, I think, a licence to go on to the premises to retake his goods,
and that licence is good against C and D.
Robert