Pendragon Plc and Others (Applicants/Claimants) v Walon Ltd and Another (Respondents/Defendants)
| Jurisdiction | England & Wales |
| Judge | His Honour Judge S P Grenfell |
| Judgment Date | 05 May 2005 |
| Neutral Citation | [2005] EWHC 1082 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: HQ05X01112 |
| Date | 05 May 2005 |
[2005] EWHC 1082 (QB)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
His Honour Judge S P Grenfell
Case No: HQ05X01112
Mr Richard Edwards (instructed by Edwards Geldard) for the applicants/claimants
Mr Gerard McMeel (instructed by Colin Armstrong) for the first respondent/defendant
The second respondents did not appear and were not represented
Hearing dates : 27–28 th April 2005
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
His Honour Judge Grenfell:
Pendragon Plc ("Pendragon") and 4 of its subsidiaries, the claimants, claim to have bought 116 Rover cars from MG Rover ("MGR") before it went into administration. It is common ground that at all material times the cars were being stored in the MG Rover compound at Upper Heyford, owned and operated by Walon Ltd ("Walon").
The claimants seek delivery up of the cars. Pendragon has been joined as applicant, simply because as parent company it can give the necessary undertaking as to damages on behalf of its subsidiaries, the claimants. They base their case for delivery up on the following facts. Walon admits that it still holds 114 of the cars. It seems that 2 out of the 116 have already been released to a carrier, although their whereabouts remain a mystery at present. The claimants have exhibited letters from Eversheds (15 th and 18 th April 2005), solicitors for the administrators of MGR, who confirm that title to the 116 cars rests with Pendragon and consent to the immediate release of the cars from the two compounds mentioned. The cars from the second respondent's compound in Manchester have been released on terms of which I have not been made aware. Capital Bank has confirmed that it has released the cars. The claimants have demanded the release of the 116 cars, but Walon has refused to deliver them up.
The conflicting interests of the parties arise from the administration of MGR. Walon claims that MGR owes it £1.25m in storage charges and desires to retain the cars as security for these charges. The claimants argue that they have an immediate right to possession and that the refusal to deliver up amounts to a conversion of the cars.
I have been greatly assisted by the submissions of counsel. I am conscious of the urgency of the application, at least, from the claimants' point of view. It was unfortunate that a bomb scare delayed the start of the application resulting in only a finite time the following day, last Friday, to conclude submissions. This was the first day that counsel could manage for judgment.
Mr McMeel, counsel for Walon, argues first that the claimants cannot for the purposes of this application establish an immediate right to possession. He submits that title should not be confused with right to possession, the latter being the determining factor as to whether the claimants can sue in conversion; that no conversion in any event can be established; and that as bailee, Walon, in the absence of an acknowledgement of the claimants' right to possession and relying on section 29 Sale of Goods Act 1979, is entitled to retain the cars as security for the debt owed to it by MGR for the storage charges. In essence, he submits that the application is premature and that it is more appropriate that the legal complexities should be sorted out in due course in the Commercial Court with MGR joined. He urges me to do no more at this stage than to "hold the ring between the parties", by which I take him to mean not only the present parties to this application, but also MGR.
The claimants' application is brought under Part 25.1(1)(e) Civil Procedure Rules1 and section 4 of the Torts (Interference with Goods) Act 19772. See also section 1 (a) for the 'Definition of "wrongful interference with goods"' as meaning 'conversion of goods.'
It is common ground that, in order to succeed in an action for conversion, the claimants must establish first that they have an immediate right to possession; and second that there has been a conversion. For the purposes of this action they must satisfy me that there are in reality no outstanding issues which prevent the ordering of immediate relief that cannot be compensated later by damages if that later proves to have been wrong.
Does Walon have a lien over the 116 cars that could defeat any right to possession on the part of the claimants?
The undisputed facts are that the 116 cars were delivered by MGR to Walon for storage at their compound under a contract which plainly allowed for storage charges to be paid by MGR to Walon, until such time as they were released to purchasers; that some £1.25m is owed by MGR in that respect to Walon. I do not have before me the precise terms of that contract, although it is said by Mr Armstrong in his witness statement on behalf of Walon that the cars "are security for that debt" and "It is my view that Walon Ltd has a lien over the cars (albeit, that I understand that this lien could only be exercised against the Administrators of MG Rover …". Although Mr McMeel has argued that there is a contractual lien, there is no evidence that that is so. It is then argued by Mr McMeel that Walon asserts a common law lien as "warehouseman/repairer". There is, however, no evidence before me to suggest that Walon did anything to these cars other than store them.
Mr Edwards, counsel for the claimants, submits that without some element of improvement, no common law lien lies. He relies on Hatton v Car Maintenance Company Ltd [1915] 1 Ch 621 and the passage of Megaw LJ in Chellaram v Butlers [1978] 2 Lloyd's Rep 412 at 415, a case in which the owners of goods sent them to a company for shipment to Africa, who sent them on to the defendants; the company
went into liquidation and the defendants among other things asserted a lien on the goods against the ownership of the plaintiffs. Megaw LJ said:
"There is no custom giving persons in the position of the defendants a general lien – certainly not a general lien against the owners of the goods in respect of someone else's debts unrelated to the particular goods."
Megaw LJ went on to hold that even if there were some form of general lien as between the defendants and the company,
"It is, as we see it, at best a very artificial concept that the plaintiffs come under this very onerous liability to a third party, with whom they have no contractual link.."
and held that the plaintiffs' claim was not defeated by any general lien which the defendants were entitled to exercise against the plaintiffs' goods.
On the evidence before me I consider that the assertion of a lien over the 116 (or at least 114) cars is no more than speculative and I can see no basis on which, if there were...
To continue reading
Request your trial