The Scope of Conversion: Property and Contract
| Date | 01 May 2011 |
| Published date | 01 May 2011 |
| Author | Simon Douglas |
| DOI | http://doi.org/10.1111/j.1468-2230.2011.00850.x |
THE
MODERN LAW REVIEW
Volume 74 May 2011 No 3
The Scope of Conversion: Property and Contract
Simon Douglas
n
The article asks whether the tort of conversion should be expanded so as to protect contractual
rights.The suggestion, found in recent case law and academic texts,that conversion should pro-
tect contractual rights because such rights belong tothe law of property is rejected. It is argued
that this approach is purely semantic and ignores the fact that contractual rights have di¡erent
characteristics to other kinds of rights that we typically class as ‘property rights’. The better
approach,it is argued, is to ask whether it is actually possible to protect contractual rights through
the tort of conversion.The article attempts to show that the absence of certain features from con-
tractual rights, in particular the factthat such rights do not relate to a physical objectand are not
exigible against the world,makes the expansion of conversion extremelydi⁄cult.
In the recent case of OBG Ltd vAllan
1
two dissenting speeches delivered in the
House of Lords challenged the long-standing assumption that only chattelscould
be converted. Conversion is the common law’s principal form of protection for
rights in chattels. Although ambiguity has long been a characteristic of the
action,
2
the fact that a claim in conversion could only be brought in cases invol-
ving chattels has always been accepted.The two dissenting speechesi n OBG Ltd v
Allan questioned this limitation. Lord Nicholls and Baroness Hale both argued
that conversion should be expa nded so as to protect contractual rights.
The minority speeches in OBG Ltd vAllan raise issues that are not just impor-
tant to the tort of conversion. Speci¢cally, they raise the long-standing question
of where the boundary between propertylaw and contract law lies. Is a contrac-
tual right a form of ‘property’? If not, should it be protected in the same way as
property? Does the fact that much wealth is now stored in contractual rights
rather than in chattels and land make the divisionbetween propertyand contract
redundant? Because conversion has always been limited to the protection of
property rights, any attempt to expand it to contractual rights will raise these dif-
¢cult questions. This article aims to answer some of them by asking whether
n
Fellowand Tutorin Law,Wadham College,Oxford. I am gratefulto Ben McFarlane, Je¡rey Hackney,
Philip Morgan, Sarah Green and the twoanonymous referees for their comments on this paper.
1[2007] UKHL 21; [2008] 1 AC 1 (HL).
2As Hackney pointsout, it was never made clear what a‘conversion’of a chattel actually consists of.
See J. Hackney,‘Denials Ancient and Modern, with some Roman Footnotes’ in A. Burrows and
A. Rodger(eds), Mappingthe Law: Essays in Honourof PeterBirks (Oxford: OUP, 2006) 569^572.
r2011The Author.The Modern Law Review r2011The Modern Law Review Limited.
Published by BlackwellPublishing, 9600 Garsington Road,Oxford OX4 2DQ,UK and 350 Main Street, Malden, MA 02148, USA
(2011) 74(3) 329^349
conversion should be expanded along the lines argued for by Lord Nicholls and
Baroness Hale.The ¢rst part of this article examines the present scope of the tort.
It will then consider the argumentsmade by Lord Nicholls and Baroness Hale for
the expansion of conversion. In the ¢nal part it will be asked whether such an
expansion of thetort is feasible as a matter of legal doctrine.
THE PRESENT SCOPE OF THE TORT
A conversion involves the deliberate exercise of controlover a chattel to the com-
plete ‘exclusion’ or ‘deprivation’ of others.
3
Examples would include stealing
another’s jewellery, eating his cake or detaining his car.The word‘misappropria-
tion’ is sometimes used to describe these acts.
4
However, a‘misappropriation’sug-
gests that the defendant bene¢ts from his conduct by taking the chattel for
himself, something which is not necessary for liability in the tort.
5
Ifadefendant,
for example, deliberately destroys the claimant’s painting then he converts it
despite the absence of an obvious bene¢t to himself. A simple ‘deprivation’ or
‘exclusion’ is the gist of the tort.
6
If a conversionco nsists of a deprivation, then it may be argued thatthe tort should
not be con¢ned to cases involvingchattels as it may be possible to deprive a claimant
of other things, such as his land, his reputation or his contractual rights. The reason
whyconversion has been limited to cases involving chattels probably lies in the his-
torical origins of the action.When conversion emerged in the late 15
th
century its
purpose was primarily to supersede the older action of detinue.
7
In so doing the
action adopted a number of the ‘counts’, or formal allegations, that were pleaded
when a claim i n detinue was brought. One such allegation was the ‘trover’ count:
the claimant wouldplead that he had ‘casually lost the chattel and that the defendant,
having come into possession by ¢nding, converted the chattel to his own use’.
8
The
‘¢nding’allegation was recognised to be ¢ctional (or‘non-traversable’) from an early
stage,
9
meaning that adefendant was unable to deny it.This did not mean that con-
version could only be brought agai nst a defendant who had come into poss ession of
the claimant’s chattel by ¢nding, just that the court would assume, regardless ofwhat
the real facts were, that the claimant had lost the chattel and the defendanthad found
it. One possible e¡ect of this ¢ctional allegation was to limit conversion to cases
involving chattels. Whereas a chattel can be ‘lost’ and ‘found’, other things such as
land, reputations and contractual rights, cannot be.
10
Any lawyer, therefore, would
3S. Douglas,‘The Nature of Conversion’ [2009] CLJ198, 209^217.
4Birks uses this word to describe conversion:P. Birks,‘PersonalProperty:Proprietary Rights and
Remedies’(2000) 11KCLJ 1,6.
5Douglas,n 3 above,206^209.
6ibid.
7See J. Baker, An Introductionto English Legal History (Butterworths: London, 4
th
ed, 2002) 397 and
A.W. B. Simpson,‘The Introduction of the Action on the Case for Conversion’(195 9) 7 5 LQ R
364.
8Baker, ibid.
9A likely early example of this is Lord MounteaglevCountess ofWorcester(1555) D yer 121, 73 E R 265.
10 In relation to land and reputation, there may have been an additional obstacle to expansion.
Because one’s land and reputation were already protected by existing actions, an expansion of
conversion would have duplicated the actions, something that was generally prohibited. (See
The Scope of Conversion
330 r2011The Author.The ModernLaw Review r2011The Modern Law Review Limited.
(2011) 74(3) 329^349
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