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GENERAL EDITOR: PROF WALTER VAN GERVEN

Property Law Chapter 2. The protection of property rights

Background
2.59 (UK)
Task Force
Meetings
Court of Appeal, 26 June 1990
IBL Ltd v Coussens
Preface ASSESSMENT OF DAMAGES
The director's cars
Introduction. Essential directions on using
the casebook
Chapter 1. General issues: setting the
scene Original language version (source reference: cf. casebook)

• Chapter 2. The protection of property

rights LORD JUSTICE NEILL:
Chapter 3. Types of property rights:
This is an appeal by IBL Limited ("IBL") against part of the order dated 3rd
immovables and movables
November 1989 of Mr. Patrick Bennett QC sitting as a judge of the High
Chapter 4. Property rights in respect of Court. By his order the judge ordered the respondent ("Mr. Coussens") to
claims return to IBL an Aston Martin motor car and a Rolls Royce motor car
together with their keys and registration documents or alter-natively to pay
Chapter 5. Security interests to IBL the sum of £62,000 together with interest from 1st March 1988 to
Chapter 6. Management: trust, treuhand 20th October 1989.
and fiducie
IBL do not now seek the return of the two cars, but they argue that the
Chapter 7. Creation judge erred in giving Mr. Cous-sens the option to retain the cars on
payment of £62,000 and interest in that (a) the sum of £62,000 was not the
Chapter 8. Transfer assessed value of the cars; or (b) if £62,000 was the assessed value, the
Chapter 9. Destruction assessment was made in error because the parties were not given an
opportunity to adduce evidence of value or make any submissions in
Chapter 10. Uniform or harmonised regard thereto.
property law
It is further argued that the sum of £62,000 merely represented the figure
Tables
at which IBL had offered to sell the cars to Mr. Coussens in February 1988,
which offer had been refused, and that the cars had substantially
increased in value since February 1988. IBL contend that there has been a
continuing conversion of the cars and that the damages for this conversion
should be assessed on the basis of the value of the cars as at the date of
judgment.

On behalf of Mr. Coussens on the other hand it is argued that the cars
were converted in February 1988 when Mr. Coussens declined to return
them to IBL. The sum of £62,000 was the value of the cars at that time.
IBL, had they wanted to replace the cars, could have gone out into the
market to buy replacements. In any event it was now too late for IBL to
seek to put further evidence before the court as to the value of the cars.

At all material times until 19th February 1988 Mr. Coussens was the
chairman of IBL. At one time he was also chief executive and the owner of
over 50% of the shares in IBL. In October 1987 Inspectorate International
SA ("Inspector-ate") made an offer for the shares in IBL. As a result control
of IBL passed to Inspectorate and to its subsidiary company in the United
Kingdom, Meridian Group Services Ltd. ("Meridian"). At the time of the
takeover Mr. Coussens gave various warranties relating to the sale of the
shares and the business of IBL.

IBL bought the two cars which are the subject of the present proceedings
for the use of Mr. Coussens while he was chairman and managing director
of IBL. The Aston Martin was built especially for him. The Rolls Royce has
a number plate which he acquired and paid for himself.

Soon after IBL had been taken over difficulties arose between Mr.
Coussens and the new owners. It is unnecessary to investigate these
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difficulties for the purpose of this appeal. It is sufficient to refer to three
letters which were written by or on behalf of Mr. Orrock, the chairman of
Meridian, in January and February 1988.

On 20th January 1988 Mr. Orrock wrote to Mr. Coussens:

"As you are aware from Arthur Andersen, we will be making a substantial
call under the warranties given by you upon acquisition of IBL by
Inspector-ate.

We therefore feel it inappropriate for us to enter into any further financial

agreements and will not be paying you compensation in respect of
termina-tion of your employment and will withdraw from the sale of the IBL
company flat to you.

With regard to the company cars, you may either return them or purchase
the Rolls Royce for £25,000 and the Aston Martin for £37,000, such
payments to be made by the end of January, 1988. Please confirm which
option you are taking ...

We would also ask you to return all credit cards, keys, documents and any
other property belonging to the company on or before 31 January 1988."

Mr. Coussens, however, did not return either of the cars by the end of
January and accordingly on 4 February Mr. Orrock wrote again:

"The Rolls Royce and Aston Martin are the prop-erty of the company and
despite notice of a reason-able price for each, you have not settled. This
offer is extended therefore for seven days from today's date. In the event
that your cheque is not received within this time period, the company will
recover its property."

On 19th February, by a letter signed on his behalf, Mr. Orrock asked Mr.
Coussens to return any prop-erty belonging to the company including the
two cars to the company premises forthwith.

On 18 August 1988 IBL issued a writ. By the writ IBL claimed (inter alia) an
injunction requiring Mr. Coussens to deliver up the two cars and their keys
and also damages for breach of contract and/or for conversion. It was
alleged that IBL had been de-prived of the use of the cars and in addition
dam-ages were claimed in respect of any depreciation in the value of the
cars from 19th February 1988.

A summons for judgment under Order 14 came before Deputy Master

Rose on 18th May 1989. The Deputy Master made an order un-der RSC
Order 14, Rule 9 that Mr. Coussens should give IBL possession of the two
cars within 28 days by delivering them to the of-fices of IBL's solicitors. The
order provided that Mr. Coussens should not have the option of retain-ing
the cars "on paying the assessed value thereof" .

Mr. Coussens then appealed to the judge. Pending the hearing of the
appeal Mr. Coussens retained the Aston Martin though he returned the
Rolls Royce to IBL.

It was argued on behalf of Mr. Coussens before the judge that there was a
concluded agree-ment whereby the two cars were to be transferred to the
ownership of Mr. Coussens. The judge came to the conclusion, however,
that there was no evi-dence to support such an agreement. He therefore
told the party that he was dismissing the appeal. It is clear, however, that
the judge varied the Master's order to a significant extent. According to the
note of the judgment with which we have been provided he said this:

"However, in my judgment, the plaintiff [IBL] was prepared to sell two cars
in January 1988 and if it receives a like amount and is compensated for in-
terest, it is my judgment that damages is the proper remedy for the wrong
they have suffered. The ap-peal is therefore dismissed and I give judgment
for the plaintiff for the return of the two cars, alterna-tively, their value in the
sum of £62,000 with inter-est to be assessed from 1st March 1988 as the
offer to purchase expired on 11th February 1988 ... The rate will be 1%
above base rate."

At this point the judge was informed that the Rolls Royce had been
returned to IBL. After hear-ing further submissions the judge continued:

"The Rolls Royce be returned to the defendant against payment of the

agreed sum of damages."

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The judge gave his judgment on Friday, 20th October 1989. Following his
judgment an order was drawn up, but this was later corrected. In its final
form the order provided as follows:

"... 2. At the option of the defendant: either (1) The defendant do return the
Aston Martin motor car registration number A 722 GPD and the keys
thereto by 17th November 1989 to the offices of the plaintiffs' solicitors ...
or (2) the defendant do pay on or before 4pm on 17th November 1989 to
the plaintiffs the sum of £62,000 and interest thereon from 1st March 1988
to 20th October 1989 at the rate of 1% above base rate and the plaintiffs
do contemporaneously deliver up the Rolls Royce motor car registration
number 1 BLV and the keys thereto, and the registration documents to the
Rolls Royce and Aston Martin cars aforesaid at Watling House.

2.In the event of the defendant opting for option (2) set out above, the
plaintiffs are ordered to de-liver up the motor car registration number 1 BLV
[the Rolls Royce] together with the keys and the registration documents to
the said car and the As-ton Martin, against tender by the defendant of a
Banker's Order for £75,423.42, such delivery up to be made no later than
4pm on 17th November 1989."

I come now to the relevant provisions of the Torts (Interference with

Goods) Act 1977 ("the 1977 Act") which was enacted to amend the law
relating to conversion and other torts affecting goods.

By section 1 of the 1977 Act a group of torts was collected together under
the heading "Wrongful interference with goods". The section provided that
wrongful interfer-ence or wrongful interference with goods should mean
(inter alia) (a) conversion of goods (also called trover), (b) trespass to
goods,(c) negligence so far as it results in damage to goods or to an in-
terest in goods.

By section 2(1) of the 1977 Act the tort of detinue was abolished. It follows
there-fore that the only cause of action with which we are concerned in the
present appeal is the action for conversion of goods. But, though the action
of detinue has been abolished, the relief which is now available in
proceedings for wrongful interference may include relief which would not
formerly have been available in an action for conversion but could have
been claimed in an action for detinue.

At common law an action in conversion was a purely personal action and it

resulted in a judg-ment for pecuniary damages only. An action in detinue,
however, (as Diplock LJ explained in General & Finance Facilities Limited
v. Cooks Cars [1963] 1 WLR 644 at page 650) was akin to an action in rem
and was appropriate where the plaintiff sought specific restitution of his
chattel. Before the Common Law Procedure Act 1854 a plaintiff who
wished to insist on the return of his chattel had to have recourse to
Chancery, but since that time the court has had a general power to order
the delivery up of a chattel though such an order is not likely to be made
where the article claimed is an ordinary article of com-merce.

As will be seen the 1977 Act gives the court the power to grant remedies in
an action for con-version which would only previously have been available
in an action in detinue. Thus sec-tion 3 of the 1977 Act, so far as is
material, provides as follows:

"(1) In proceedings for wrongful interference against the person who is in

possession or in control of the goods relief may be given in accordance
with this section, so far as appropriate.
(2) The relief is - (a) an order for delivery of the goods, and for payment of
any consequential damages, or (b) an order for delivery of the goods, but
giving the defendant the alternative of paying damages by reference to the
value of the goods, together in either alternative with payment of any
consequential dam-ages, or (c) damages.
(3) Subject to rules of court - (a) relief shall be given under only one of
paragraphs (a), (b) and (c) of subsection (2), (b) relief under paragraph (a)
of subsection (2) is at the discretion of the court, and the claimant may
choose between the others.
(4) If it is shown to the satisfaction of the court that an order under
subsection (2)(a) has not been complied with, the court may - (a) revoke
the order, or the relevant part of it, and (b) make an order for payment of
damages by reference to the value of the goods.
(5) Where an order is made under subsection (2)(b) the defendant may
satisfy the order by returning the goods at any time before execution of

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judgment, but without prejudice to li-ability to pay any consequential
damages."

It will be seen that the order made by the Master was an order in the form
provided for in section 3(2)(a). By virtue of RSC Order 14 Rule 9 such an
order can be made on an application for summary judgment as well as
after trial. The order made by the judge on the other hand was an order in
the form provided for in section 3(2)(b). It is to be noted that in neither
order was any provision made for the payment of any consequential
damages.

Before turning to consider the order made by the judge in further detail it is
first necessary to dispose of a preliminary argument raised on behalf of Mr.
Coussens.

It was argued that IBL should have been ready at the hearing before the
judge to adduce any evidence of value which they wished to put before
him and that, even though the judge may have been in error, it was now
too late for IBL to attempt to re-open the issue of quantum. Our attention
was drawn to Ladd v. Marshall [1954] 1 WLR 1489 and to Langdale v
Danby [1982] 1 WLR 1123.

I have considered this argument but I am satisfied that it would not be in

accordance with the justice of the case to accept it. It seems clear that the
judge, though purporting to dismiss the appeal, did not appreciate the
important distinctions between his order and the order which had been
made by the Master and that no sufficient consideration was given to how
the damages should be assessed. It follows therefore that if we conclude
that the judge was in error it will be necessary for there to be some further
assessment unless the matter can be disposed of by agreement.

I must turn now to the order made by the judge.

It was argued on behalf of IBL that as the order made by the judge was an
order in a form which could have been made before 1977 only if the action
were framed in detinue it was appropri-ate that any damages awarded
pursuant to such an order should be assessed on the same basis as they
would have been assessed in such an action. It fol-lowed therefore, it was
argued, that in accordance with Rosenthal v. Alderton & Sons Ltd. [1946]
KB 374, the value of the cars should have been calculated as at the date
of judgment.

It is to be observed that the 1977 Act does not give any guidance as to the
date at which the value of the goods is to be assessed. Nor do I find it
possible to obtain any help from section 6, which is concerned with the
assessment of damages where goods have been improved by an innocent
defendant. Thus section 6(1) merely provides:

"If in proceedings for wrongful interfer-ence against a person (the

'improver') who has improved the goods, it is shown that the improver
acted in the mistaken but honest belief that he had a good title to them, an
allowance shall be made for the extent to which, at the time as at which the
goods fall to be valued in assessing damages, the value of the goods is
attrib-utable to the improvement."

In considering any award of damages in an action in tort it is necessary to

bear in mind the general principle which was re-stated by Brandon LJ in
Brandeis Goldschmidt & Co. v. West-ern Transport [1981] QB 864 at page
870:

"Damages in tort are awarded by way of monetary compensation for loss

or losses which a plaintiff has actually sustained, and the measure of
damages awarded on this basis may vary infinitely according to the
individual circumstances of any particular case."

In Brandeisthe Court of Appeal substituted an award of £5 nominal

damages in an action in detinue where the goods had been recov-ered
and the plaintiffs had failed to show that they had suffered any quantifiable
loss by reason of an adverse interference with their business operations.

At the same time it is necessary to bear in mind that where the goods are
irreversibly con-verted and are not recovered the general rule is that the
measure of damages is the value of the goods at the time of conversion.
This general rule has been recently reaffirmed by the Privy Council in
BBMD Ltd. v EDA Holdings Ltd. [1990] 1 WLR 409.

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An examination of the provisions of the 1977 Act in the light of the existing
rules of the common law indicates that when making an award of dam-
ages under section 3 of the 1977 Act the court is faced with a number of
competing con-siderations. These considerations include:

(a)The fact that the tort of detinue has been abolished.

(b)The fact that the remedies now available for the tort of conversion
(hitherto a purely personal ac-tion) have in effect extended the scope of
the tort so that a proprietary claim can be asserted.
(c)The general rule that where goods have been irreversibly converted
their value is assessed at the date of conversion. It may be noted,
however, that even where goods are articles of ordinary commerce the
damages may be assessed by reference to the cost of replacement goods
if the cost has increased between the date of conversion and the date
when the plaintiff, acting reasonably, ought to have obtained the
replacement: The Playa Larga [1983] 2 Lloyds' Reports 171.
(d)The former general rule that in detinue the value of the goods detained
was assessed at the date of judgment.
(e)The fact that after conversion the value of goods may fall instead of rise.

I have come to the conclusion that if one takes account of all these
considerations and the fact that several different remedies are available
under section 3 of the 1977 Act it is not possible, or indeed appropriate, to
attempt to lay down any rule which is intended to be of uni-versal
application as to the date by reference to which the value of goods is to be
assessed. The method of valuation and the date of valuation will depend
on the circumstances.

I return to the facts of the present case where we are concerned with an
order made under section 3(2)(b) of the 1977 Act.

In my judgment when the damages are as-sessed it will be necessary for

the court to proceed as follows:

(1)To decide whether if the cars had not been converted IBL would have
kept and used the cars or have disposed of them elsewhere.
(2)To decide whether if the cars would have been kept and used IBL could
and should have obtained replacement cars and, if so, when.
(3)If (a) the cars would have been kept and used and (b) it is decided
either that IBL were under no obligation to obtain replacements or that they
would have been unable to do so, the court will assess the dam-ages in
the light of those findings. It seems to me that the damages on this basis
are likely to be assessed by reference to the value of the cars at the date
of judgment, 3rd November 1989. Such an assessment would take
account of the value of the option which the judge's order gave to Mr.
Coussens.
(4)If the court decides that the cars would not have been kept and used or
replacements could and should have been obtained it seems clear that an
earlier date should be used for the calculation of the damages.
(5)To calculate any damages suffered by reason of the loss of the use of
the cars between the date of conversion and the date ascertained in
accordance with (3) and (4).

Accordingly I would allow the appeal and order that the matter should be
referred to a Master for the calculation of the damages. It may be that in
the light of the guidance which we have given the par-ties will be able to
reach some agreement. If this is not possible I anticipate that evidence as
well as argument will be necessary before the Master.

LORD JUSTICE NICHOLLS:

In 1977 detinue was abolished, but the remedies formerly granted in

respect of it were preserved. Now, where a plaintiff sues in respect of
goods which are still wrongfully retained by a de-fendant, he has available
to him, despite the aboli-tion of detinue, the old remedies formerly
available in detinue, as well as a simple claim for damages in conversion.
That, stated broadly, is the effect of sections 1 to 3 of the Torts
(Interference with Goods) Act 1977, so far as relevant for pre-sent
purposes. On this appeal we are concerned with how these pieces fit
together.

The facts are simple. Until two years ago, the de-fendant, Mr. Coussens,
was the chairman of the plaintiff, IBL Limited. At one time he was also the
chief executive and a majority shareholder in the company. In November
1987 the company was taken over, following an offer which valued the

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company at almost £30 million. Disputes arose, and the purchaser put
forward claims for substantial damages for breach of warranty and
misrepresentation. These claims were denied by the defendant. In
February 1988 he was dismissed, and the plaintiff demanded the return of
the two cars belonging to the company which were being used by him: an
Aston Martin and a Rolls Royce number 1 BLV. He did not return the cars,
and this action followed.

The question which has arisen is this. The plaintiff sues in conversion, in
respect of the wrongful refusal to return the two cars. On an ap-plication for
summary judgment the deputy judge made an order, pursuant to section
3(2)(b) of the 1977 Act, for the delivery up of the two cars but giving to the
defendant the alternative of paying damages by reference to the value of
the cars. As at what date is such value to be fixed? Is it the date of
judgment, in accordance with Diplock LJ's observations regarding the date
at which the value of the goods falls to be assessed where the cause of
action is detinue (see General and Finance Facilities Ltd. v cooks Cars
(Romford) Ltd. [1963] 1 WLR 644, 651)? Or, detinue having been
abolished and the cause of action re-lied on being conversion, is it
February 1988, being the date on which the defendant converted the
goods by refusing to return them? In the present case the plaintiff claims
that the cars, and the Aston Martin in particular, are now worth
considerably more than in February 1988.

The distinction between these two dates emerges clearly from Diplock LJ's
judgment in the General and Finance case. He noted (at page 648) the
difference between the date at which the two causes of action accrued:

"There are important distinctions between a cause of action in conversion

and a cause of action in detinue. The former is a single wrongful act and
the cause of action accrues at the date of the conver-sion; the latter is a
continuing cause of action which accrues at the date of the wrongful
refusal to deliver up the goods and continues until delivery up of the goods
or judgment in the action for deti-nue." Regarding conversion, he said (at
page 649):

"The action in conversion is a purely personal action and results in a

judgment for pecu-niary damages only. The judgment is for a single sum of
which the measure is generally the value of the chattel at the date of the
conversion together with any consequential damage flowing from the
conversion and not too remote to be recoverable in law. With great respect
to the dictum of Goddard LJ in Sachs v. Miklos this is not necessarily the
same as the measure of damages for detinue where the same act
constitutes detinue as well as conversion, although in many cases this will
be so."

By contrast, the action in detinue partook of the nature of an action in rem

in which a plaintiff seeks specific restitution of his chattel. Diplock LJ noted
(at page 651):

"... the cause of action in detinue is a continuing one up to the date of

judgment and the value of the chattel is assessed as at that date."

Rival conclusions are sought to be founded on these observations. The

plaintiff seeks to derive support from the close correlation between Diplock
LJ's exposition (at pp. 650-1) of the three forms in which judgment might
be given in an action of detinue, and section 3(2) of the Act. The Act was
not intended to alter the forms of re-lief available where the wrongdoer is in
possession or control of the goods. "The value of the goods" in section
3(2)(b) means their current value.

On the other hand, the defendant pointed to the abolition of detinue, and
contended that, since the cause of action being relied on is conversion,
references to damages in section 3(2) are damages assessed in
accordance with the established principles relating to conversion. This is
so, as much with a judgment in form (b) envis-aged by section 3(2), as with
a judg-ment in form (c). In the instant case the damages are to be
assessed by reference to the value of the cars at February 1988, when
they were converted by the defendant to his own use.

In my view the key lies in appreciating that when the Act was passed in
1977 there was no ab-solute rule governing the date as at which damages
were to be assessed in conversion or the value of goods were to be
assessed in detinue. In one of the passages I have quoted above, Diplock
LJ referred to the measure of damages in conversion as "generally" being
the value of the chattel at the date of conversion. He added no such

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qualification when dealing with the relief available in detinue. Nor did
Evershed J when giving the judgment of the Court of Appeal in Rosen-thal
v Alderton and Sons Ltd. [1946] KB 374, 377:

"In an action of detinue the value of the goods claimed but not returned
ought, in our judgment, to be assessed as at the date of the judgment or
ver-dict. A successful plaintiff in an action of detinue was, under the old
practice, entitled to judgment for the re-delivery of the goods or, in case
they were not returned, to their value together with damages and costs;
and such value was either assessed by the jury at the trial or by the sheriff
upon an inquest ... Unless the alternative methods of assessing value were
liable to produce substantially different results, the time at which the value
was in each case to be determined, must have been the date of the
verdict."

However, I do not think that either Diplock LJ or Evershed J were intending

to do more than state a general rule. Neither of them is to be taken as
envisaging that in detinue the value of the goods was always to be
assessed, whatever the circum-stances, at the date of judgment. Such a
rigid, in-flexible approach would accord ill with the com-pensatory objective
underlying awards of damages. Whatever may or may not have the been
the prac-tice in past centuries, I cannot think by the mid-twentieth century
the old forms of action, in ruling us from their graves, still retained sufficient
vigour to compel an award of damages in a sum assessed as at the date
of judgment if, in the particular cir-cumstances and applying ordinary
principles of causation and mitigation, the loss to the plaintiff fairly to be
attributed to the non-return of his goods was a lesser sum. Indeed, in the
Rosenthal case itself Evershed J envisaged (at page 379) that although a
bailee who has parted with the goods is estopped from so asserting in
answer to a claim in detinue for delivery up, yet if the bailor knew of the
conversion at the time he might not be able to rely on a claim in detinue for
the current value of the goods. That flexible approach was adopted by the
Court of Appeal in Sachs v Miklos [1948] 2 KB 23. Lord Goddard CJ (at
page 39) stated that, in assessing damages for detinue or for conversion,
the damages are not nec-essarily and in all cases the value of the goods at
the date of judgment:"The question is what is the plaintiff's loss, what
damages he has suffered, by the wrongful act of the defendants."There the
court held that if the plaintiff, who had a cause of action against the
defendant bailee in detinue as well as in conversion, knew or ought to
have known that the furniture was going to be sold by the bailee, he could
not recover the rise in price of the furniture after the date when it was sold.

This approach also accords with the decision of the Court of Appeal in
Brandeis Gold-schmidt & Co. Ltd. v Western Transport Ltd. [1981] 1 QB
864. There a cargo of copper belonging to the plaintiff was wrongfully
detained by the defendant. Later it was delivered up. The plaintiff claimed
to be entitled as of right, by way of damages for detention, to the fall in the
price of copper between the date when the copper should have been
handed over and the date when it was handed over. In rejecting that claim
in the particu-lar circumstances of the case, Brandon LJ (at page 870)
said:

"I cannot see why there should be any universally applicable rule for
assessing damages for wrongful detention of goods, whether it be the rule
con-tended for by the plaintiffs or any other rule. Dam-ages in tort are
awarded by way of monetary com-pensation for a loss or losses which the
plaintiff has actually sustained, and the measure of damages awarded on
this basis may vary infinitely according to the individual circumstances of
any particular case."

In my view the same approach is applicable in the converse case, where

property is wrongfully detained and is still held by the defendant and the
price has risen meanwhile. If the court declines to make an order in the
form of section 3(2)(a), the sum to be stated in the section 3(2)(b) form as
the amount of damages pay-able as the alternative to handing over the
goods will frequently be the current value of the goods. After all, the goods
are the property of the plaintiff. But this will not necessarily be the measure
of his loss. For example, if the plaintiff would have sold the goods had they
been delivered to him when they should have been, his basic measure of
loss will be the market price at that date plus interest. To award him
damages by reference to the later value of the property would be to award
him a windfall. In such a case, despite the proprietary nature of the
plaintiff's claim, the amount of dam-ages fixed as the alternative to handing
over the goods will have to be tailored suitably.

I can see nothing in this approach inconsis-tent with the judgment of Lord

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Templeman in the recent decision of the Privy Council in BBMB Finances
(Hong Kong) Ltd v EDA Hold-ings Ltd. [1990] 1 WLR 409. There the claim
was for damages for conversion. Lord Tem-pleman (at page 413)
emphasized that the claim was for damages in respect of property which
had been "irreversibly converted". The Privy Council was concerned to
apply the general rule applicable in cases of that type of conversion. But I
understand Lord Templeman to have ac-cepted that in some cases, such
as Sachs v. Miklos (supra), to which he referred at page 412, the general
rule will be displaced and damages in conversion may be awarded by
reference to the value of the property at a date later than the date when it
was converted.

I am fortified in my conclusion on this point by noting the 18th Report

(Conversion and Deti-nue) of the Law Reform Committee, published in
1971. Lord Diplock was a member of that commit-tee and signed the
report. Paragraph 88 read:

"In conversion the value of the chattel is assessable as at the date of the
conversion, whereas in detinue it is assessable as at the date of the
judgment, the reason for this distinction being the proprietary character of
the latter action. But the decided cases do not suggest that the overall
effects of rises or falls in market value are any different in the two actions;
for in a proper case the plaintiff can re-cover as consequential damages in
conversion the amount of a rise in value, and the plaintiff in deti-nue can
similarly recover the amount of a fall in value, between the act of
conversion or detinue and the date of the judgment, such recovery,
however, being subject to the principles of mitigation and standing-by and
also to evidence bearing on what the plaintiff would be likely to have done
with the chattel if it had remained in his possession."

Once it is kept in mind that there is no abso-lute rule regarding the date as
at which the goods are to be valued, the difficulties in the interpreta-tion
and application of section 3 sub-stantially disappear. The sum to be
specified in the present case as payable by the defendant as the
alternative to returning the two cars is to be calcu-lated by reference to the
value of the cars at such date as will fairly compensate the plaintiff for its
loss if the defendant chooses to pay the sum and keep the cars.

This conclusion involves interpreting the references in section 3 to "dam-

ages by reference to the value of the goods" as not compelling the court
always to assess such damages by reference to the up-to-date value of
the goods. In other words, for it comes to much the same, the statute
leaves at large the date as at which the value of the goods is to be
determined. In my view that is the proper construction of this sec-tion.
Nowhere does the Act expressly state a date as at which the value of the
goods is to be assessed. To construe the references to the value of goods
as being by implication references only to the up-to-date value would fly in
the face of the need for damages to be assessed in a sum which
represents the true loss suffered by the plaintiff by reason of the
defendant's act. Further, there is some indica-tion in the statute that the
draftsman envisaged that an assessment of damages by reference to the
value of the goods in form (b) was a flexible formula: see section 3(6).

Where, then, does that leave the present case? The plaintiff seeks the
delivery up of the two cars which ought to have been returned two years
ago. Prima facie, if the cars are not returned, the plaintiff's loss is the
present value of the cars. The defendant has the option of returning the
cars, or keeping them and paying their present value.

I do not accept Mr. Gee's submission that damages ought to be assessed

by reference to the value of the cars as at February 1988 on the ground
that the plaintiff ought then to have gone into the market and bought a
replacement Aston Martin and a replacement Rolls Royce. On the
evidence pres-ently before the court, it would be unreasonable to expect
the plaintiff to have done this. The plaintiff's omission to do so cannot fairly
be described as a failure to take reasonable steps to mitigate its loss. The
cars were the plaintiff's property, held by the defendant as bailee. The
sums involved are not insubstantial. I do not see why the plaintiff should be
expected to have purchased replacement cars at its own expense in
February 1988, and be left to hope that in due course the defendant would
be able to meet a judgment for the sum involved. The plaintiff is not in the
business of buying and selling cars. These were two expensive vehicles
provided by the plaintiff for use by one of its senior officers, and the cars
remained in the defendant's possession at all material times. In my view
the plaintiff acted reasonably in seeking the return of the cars them-selves,
and this was so even though there was noth-ing unique about these two

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particular vehicles be-yond the "personalised" registration number of the
Rolls Royce.

To the above I add two observations. First, I em-phasise that the view just
expressed is founded on the somewhat exiguous material before the court
on this aspect of the case. Secondly, there is here a point which requires
further investigation. The evi-dence does not make clear what the plaintiff
would have done with the cars had they been returned in February 1988.
In January 1988 the company was willing to sell both cars to the
defendant. It may be that, if the cars had been handed back in February
1988, the plaintiff would have sold one or other or both of them, either in
the market or to a member of its staff. If that is so, it would be wrong to
assess damages for the non-return of the cars now by ref-erence to their
present value. In that event, the plaintiff's loss would be the value of the
cars at the time when the plaintiff would probably have dis-posed of them,
plus interest.

The deputy judge assessed the value of the cars at £62,000, being the
price at which the plain-tiff had offered to sell the cars to the defendant in
January 1988. That offer was not accepted. That offer price is only of
assistance if, in the events which happened, the plaintiff would have sold
the cars elsewhere had they been returned in February 1988. In its
application for summary judgment, the plaintiff sought judgment for
delivery up of the cars for their value "to be assessed" and damages for
their detention "to be assessed". The defendant resisted any order being
made at all. In my view, the plaintiff was entitled to expect that, if it were
successful in ob-taining summary judgment, it would have a further
opportunity to file evidence on the sum to be stated as the value of the
cars in the section 3(2)(b) form of order.

Accordingly I consider that this matter should be remitted to the Master to

determine, as "the amount of damages by reference to the value of the
goods" to be inserted in the form (b) order, a sum assessed in the light of
the judg-ments of this court. The Master will also need to consider what
sum, if any, to award by way of con-sequential damages, in respect of
matters such as the defendant's use of the cars since February 1988. The
parties should have an opportunity, if it be-comes necessary, to adduce
evidence on these points.

LORD JUSTICE BUTLER-SLOSS:

I agree that this appeal should be allowed.Order: Appeal allowed. Costs

below to remain as they are Costs of appeal to stay in court pending
determina-tion upon the question of assessment of damages by the
Master.
END OF DOCUMENT

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