Martin v Chief Constable of the Nottinghamshire Constabulary

(Approved by the Court)

Wednesday, 19 February 2003

1. LORD JUSTICE PILL: This is an appeal against a decision of His Honour Judge Nicholl delivered at the Birmingham County Court on 29 May 2002. The judge dismissed a claim for damages by Mr John Andrew Martin for wrongful detention by the Chief Constable of the Nottinghamshire Constabulary, the respondent, of a Mercedes 300SL convertible in 1990.

2. It is necessary to refer to the history of the action. An action was commenced by the appellant, Mr Martin, in December 1993 for wrongful arrest, false imprisonment, malicious prosecution, wrongful seizure and wrongful retention of goods. That claim arose out of events, some of which it is necessary to describe. The action was tried in April 1998 before Popplewell J and a jury, and by order dated 24 April was dismissed. The appellant appealed to this court and the appeal on the first four causes of action was dismissed on 4 November 1999. However, the appeal on the issue of wrongful retention of the Mercedes was allowed, to the extent of the issue being remitted to the Birmingham County Court. It was in those circumstances that His Honour Judge Nicholl heard the present case. We have been referred to the judgment of this court. Nothing in it constrained the conduct of the case by the county court judge and it is not suggested that the county court judge in the way he dealt with it in any way offended against what had been said in this court.

3. New statements of case were served limited to this issue. The appellant sought a very substantial sum of damages on the basis that if the Mercedes had been returned to him before 12 September 1990 he would have been able to sell it and as a result save his business. It was agreed that liability would be tried first, and on 29 May 2002 after a hearing lasting three days the judge dismissed the claim.

4. The appeal is made with the permission of this court. Put very briefly, the issues are that the respondent was liable for conversion of the Mercedes by delivering it to Wheelhouse Garage ("Wheelhouse"); second, that the respondent had not been justified in law in detaining the Mercedes throughout the relevant period; third, the claim that there had been no conversion because no demand for the return of the vehicle had been made at the relevant time.

5. The appellant had purchased the Mercedes in March 1990. He agreed to sell it to Mr Anthony Collard for £80,000. Mr Collard paid a small deposit and the balance by cheque. At that stage the appellant reserved title to the vehicle. The cheque was not met and the appellant repossessed the Mercedes. However, on 2 May 1990, the appellant accepted another cheque from Mr Collard and gave up possession of the Mercedes to him. There were several subsequent transactions in relation to the Mercedes. It was obtained by Mr Norbury and Mr Harry Jones in circumstances in which the judge said that strong-armed tactics had been used. It was sold by Norbury and Jones to Castle Garages Kennelworth Ltd ("Castle Garages") and sold by them to Wheelhouse. (It appears that the proprietor of Wheelhouse Garage is a Mr Wheelhouse, but I will just refer to the garage as "Wheelhouse").

6. Wheelhouse advertised the Mercedes for sale in the Sunday Times on 3 June. The appellant saw the advertisement and recognised the vehicle. He telephoned Wheelhouse, giving a false name and address. After Wheelhouse had parked the vehicle, the appellant took possession of it and drove it away using a spare set of keys. Wheelhouse reported the theft to the police and so did Mr Martin report his taking of the vehicle, which of course he did so by way of a claim of right to it. He was fully interviewed by the police on 5 June. Detective Constable Sweetenham was the officer in the case. At that stage he believed that Wheelhouse was the true owner of the vehicle. As a result the appellant was arrested and detained, that arrest and detention being the subject of the claims dismissed by Popplewell J and the jury. Prior to his release the appellant was charged with theft. That charge was found by the court to have been made in good faith. However, some further investigations were conducted and by 21 August 1990 the officer in the case had reached the conclusion that it was unlikely that the appellant had stolen the Mercedes. The result of the investigation was passed to the CPS and on 7 September the prosecution was discontinued. The appellant's solicitors first sought the release of the Mercedes from the police by letter dated 12 September.

7. The vehicle was seized by police officers after the appellant had told them where he had left it and that seizure was held in the earlier part of the action to have been lawful. On 7 June the police passed possession of the Mercedes to Wheelhouse. A "Form of Indemnity" was signed by Wheelhouse, described as Indemnity - Receipt - Disclaimer, acknowledging that the Mercedes was:

"Released on condition it is not sold or disposed of without court order or police authority."

8. On 27 July the Solicitors acting for Castle Garages informed the police that proceedings had been issued by Mr Norbury and that there was an issue on the title to the Mercedes. The police themselves were informed by Mr Norbury and Mr Jones that they claimed to be the owners of the vehicle. A claim was also maintained by Castle Garages. On receipt of the demand on 12 September the police's initial reaction was that the Mercedes should be released to the appellant; but consideration having been given to the competing demands, they did not pass the vehicle back to him, and indeed on 7 November commenced interpleader proceedings in relation to the vehicle.

9. In those proceedings the police were the claimants and the respondents were the appellant, Norbury and Jones, and Castle Garages. The interpleader proceedings proceeded to trial. By an order of 13 May 1991 the appellant was permitted to sell the Mercedes for the sum £48,000, which was to be paid into court to abide the event. The appellant was subsequently joined as a defendant in proceedings involving Norbury and Jones and Castle Garages and he counterclaimed. Judgment in that action was given in his favour against Norbury and Jones on 8 September 1997 in a sum of over £87,000 which was increased upon appeal to this court to a sum of just over £150,000.

10. In retaining the vehicle the respondent relies upon the provisions of section 22 of the Police and Civil Evidence Act 1984. Section 19 deals with the circumstances in which a constable may seize property. Section 22 deals with the power to retain and provides, so far as is material:

"(1)... anything which has been seized by a constable or taken away by a constable following a requirement made by virtue of section 19 or 20 above may be retained so long as is necessary in all the circumstances.

(2) Without prejudice to the generality of subsection (1) above -

(b) anything may be retained in order to establish its lawful owner, where there are reasonable grounds for believing that it has been obtained in consequence of the commission of an offence."

11. On behalf of the respondent, Mr Tomlinson QC concedes by reference to the decision of this court in <U>Webb v Chief Constable of Merseyside Police</U> [2000] QB 424 at 448D:

"If the police right to retain the goods comes to an end, the right to possession of the person from whom they were seized revives. In the absence of any evidence that anybody else is the true owner, once the police right of retention comes to an end, the Person from whom they were [compulsorily] taken is entitled to possession."

12. Mr Tomlinson submits that the judge was correct to hold that the police were by virtue of their statutory powers entitled to retain possession. It is necessary to refer to a concession, which the judge noted (at paragraph 31) of his judgment, in relation to timing:

"In fact, it is conceded that by then [12 September 1990 when the demand was made] the Chief Constable was justified in the light of the conflicting claims in respect of the car in seeking legal advice and subsequently instituting the interpleader proceedings."

That concession is reflected in the skeleton argument first submitted to the court for the purpose of this appeal. Mr Loades, who now appears for the appellant, did not appear at the trial and neither was the first skeleton argument his. He has sought to withdrew that concession. In my judgment it is impossible for him to do so in the circumstances. It would do an injustice, if the court is to do justice between the parties. It would do an injustice if the court were to consider a point which was plainly conceded in the court below and on the basis of which the trial before the county court judge was conducted.

13. The first point made by Mr Loades is that in transferring possession of the Mercedes to Wheelhouse in the circumstances which existed there was a conversion by the police. The judge's findings on that issue appear at paragraph 25 of his judgment, and I set them out as a series of propositions as Mr Loades has helpfully done in his skeleton argument:

(1) "In my judgment, what took place here was a handing over to Wheelhouse Garages Ltd in order for them to keep the car in safe custody."

(2) "Detective Constable Sweettenham, who was not himself responsible for the handing over of the car and indeed did not wish it to be handed over to [Wheelhouse], because he had effectively given an undertaking to [the appellant] on 5th June that if he revealed where the car was and it was surrendered it would be kept by the police."

(3) "I am quite satisfied from his evidence that this being an extremely valuable car, it could well have been in danger if it had been kept in either a police compound or the underground car park that they had."

(4) "... in my judgment on the facts of this case, there is no question of that constituting a conversion."

Mr Loades submits:

"(i) The terms on which [the Mercedes] was released were contrary to the express undertaking given to the Appellant;

(ii) The terms did not stipulate that the release was for the purpose of storage or safe-keeping; (iii) The terms only prevented the sale or disposal of the motorcar BUT did not prevent Wheelhouse from driving it;

(there was evidence that during the 11 months in which the vehicle was in the possession of Wheelhouse it clocked up a distance of 3,000 miles)

"(iv) The release to Wheelhouse and the terms of it were adverse to the interests of the owner;

(v) The release was in breach of the Respondent's powers to retain seized property for the purposes provided in section 22 of the 1984 Act;

(vi) The release was not pursuant to a court order."

14. Mr Loades concedes that for the police to transfer possession of goods, which were lawfully in their possession following a seizure, for safe storage with an agent does not amount to a conversion. An example was put to him in the course or argument by Moreland J of frozen meat being seized and retained. There would be no conversion if the police were to commit such produce to the care of a cold store.

15. What Mr Loads submits is that the indemnity obtained by the police did not prevent or seek to prevent the use of the vehicle which in fact occurred, that use amounting to a conversion. This is not a case where it can be alleged at this stage on behalf of the appellant that the acts of Wheelhouse constituted the conversion. The case had not been pleaded on that basis and it is clear from the judgment that no such claim was entertained by the judge, though an attempt may has been made by counsel then acting to make such a claim in the course of the hearing. The judge stated (at paragraph 23 of his judgment) having referred to the mileage:

"That in itself cannot now be alleged as a conversion."

Neither, in my judgment, can it constitute a conversion that it was against the wishes of the officer in the case that possession was transferred to Wheelhouse.

16. This is not a case where a contractual claim is made. The respondent exercising his powers of retention was not bound by the wishes of one of his officers even if it took the form of an undertaking. Neither, in my judgment, is it material that the written indemnity sought and obtained by the police was not of a more comprehensive kind. The learned judge found, as I have already stated, as a fact, that the handing over to Wheelhouse was in order for them to keep the car in safe custody. That is a finding of fact which, in my judgment, it is in the circumstances of this case impossible for the appellant effectively to challenge. The respondent was entitled to deliver possession of the car to Wheelhouse for the purpose of its safe custody and such transfer did not in itself constitute a conversion. I see no breach of the respondent's duties under the 1984 Act in the transfer of possession in those circumstances to Wheelhouse.

17. The second point made by the appellant is that by 21 August at the latest the respondent must have been aware that the ownership of the Mercedes was with Mr Martin. Reliance is placed on the fact that by then the officer in the case had come to the conclusion that the appellant had not stolen the vehicle. It is submitted that in those circumstances the power to retain in order to establish the lawful ownership of the vehicle, where there were reasonable grounds for believing that it had been obtained in consequence of the commission of an offence, no longer applied.

18. In the circumstances of this case I am not able to accept that submission. In my judgment the judge was entitled to hold, as he did, that:

"... the cause of action for conversion ... did not accrue until the demand for the return of the car made on 12th September 1990 was refused."

Implicit in that finding is a finding that in the view of the judge the police were entitled to rely upon their statutory powers until 12 September to retain the vehicle.

19. Having first considered the question whether a demand was necessary to create a cause of action for conversion and holding that it was, the judge went on to say (at paragraph 68) that if he was wrong about that:

"... if at some earlier stage there was a cause of action which would have accrued had the police delayed unnecessarily in their investigations and in considering whether they should return the car, I nevertheless conclude that there was no such delay... "

That was a conclusion the judge was entitled to reach on the facts.

20. The officer in the case was entitled to refer the question to the CPS for their consideration. Moreover, it does not necessarily follow from an opinion, even a firm opinion formed by the officer in the case that the appellant was not a thief, that it necessarily follows that he was the owner of the vehicle or that an offence had not been committed and section 22(2) ceased to apply. It was clear that claims to the ownership of the vehicle were being made by other parties including Castle Garages and Jones and Norbury. That those claims were not fanciful claims has been demonstrated by the fact that court proceedings were required which were pursued to a conclusion, albeit a conclusion favourable to the appellant, but one which had to be hard fought before a judge.

21. I am far from persuaded that the appellant has demonstrated that the judge's finding of fact, to which I have referred, was one which he was not entitled to reach. I would go further and say that on the facts as outlined the dispute as to ownership, the enquiries made by the police, the reference of the matter to the CPS, the power to retain the vehicle existed at least until 12 September 1990. It was conceded at the trial that there was no conversion of the vehicle after that date.

22. In those circumstances any analysis of the question whether a demand must be served before the tort of conversion is committed does not arise, and I refer to it only briefly. Mr Loades relies on the recent decision of the House of Lords in <U>Kuwait Airways v Iraqi Airways Co</U> [2002] UKHL 19, and the statement (at paragraph 39) by Lord Nicholls, when considering the ingredients of tort of conversion, that:

"First, the defendant's conduct was inconsistent with the rights of the owner (or other person entitled to possession). Second, the conduct was deliberate, not accidental. Third, the conduct was so extensive an encroachment on the rights of the owner as to exclude him from use and possession of the goods.

42. A demand and refusal to deliver up the goods are the usual way of proving an intention to keep goods adverse to the owner, but this is not the only way."

23. Mr Loades submits that in the case of the police there is an obligation on them to notify the owner that he can have his chattel back as soon as the section 22 power ceases to exist. There is a duty to the owner to make that notification and it must be made speedily. As I said, on the judge's findings of fact, which I would approve, the point does not arise. Moreover, it would not be helpful to attempt to state what might have happened had there been other findings of fact. It is clear from the approach of Lord Nicholls in <U>Kuwait Airways</U> that what constitutes a conversion and whether a demand is necessary depends on all the circumstances. Had the circumstances been different, the issue whether a demand was necessary would have been made a different issue.

24. For the reasons I have given I would dismiss this appeal.

25. LORD JUSTICE LATHAM: I agree.

26. MR JUSTICE MORELAND: I also agree.

(Appeal dismissed; Appellant do pay Respondent's costs of the appeal, such costs to be the subject of a detailed assessment).