Penfolds Wines Pty Ltd v Elliott [1946] HCA 46

Penfolds Wines Pty Ltd v Elliott [1946] HCA 46 - HCA 1946 case summary — Zoe

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the evidence of Elliott that the two bottles delivered to Moon were brought to Elliott by Elliott's brother to be filled with wine other than the company's wine and that they were so filled. Elliott admitted in evidence that he had " for years " and on a subsequent occasion followed the same practice of filling branded bottles with wine other than the company's wine and delivering them in the way of trade to his brother. Apart from the subject transaction Elliott stated that his sales of wine in bottles as distinct from sales in glasses in the bar were of two kinds. The more expensive wine was sold in sealed bottles, the less expensive wine was sold in bottles supplied by the customer either on the day he obtained the wine or some days earlier, the wine in each instance being syphoned from a barrel. Elliott stated that he sometimes bought bottles from boys who collected them from residents of Singleton and sometimes took them from residents who wished to get rid of them. Sometimes he dis- posed of surplus bottles to a merchant in Newcastle. He said that on his view of the legal position he was entitled to fill a bottle brought to him by a customer with any wine to be purchased by that cus- tomer, but that he was not entitled to fill a branded bottle with wine for a customer who had not brought that bottle to be filled. Elliott admitted that he knew the means adopted by the company for asserting its ownership of the bottles. He did not admit, and the judge did not believe, that he necessarily saw the brand embossed on the Lottle when he handled one of the company's bottles or that he knew that the bottles handed to Moon bore the company's brands. Elliott's brother gave evidence as to the manner in which he obtained wine from Elliott, usually two gallons at a time. He said he left bottles to be filled as wine became available. Elliott admitted that the distinction between branded and unbranded bottles was well- known in the trade, that he had known it for years, that he knew that there was a restriction upon the use of branded bottles and that he considered that he complied with all the requirements of the restriction when he abstained from selling branded bottles and only filled them with wine when brought to him by his brother or some other customers. He admitted that he would fill a bottle, even though he knew that it was the company's bottle. The judge was not satisfied, however, that Elliott did not supply wine in bottles other than those which the customers had brought to him, or that he obtained only unbranded bottles from the persons, boys or house- holders who brought them to him. But there was no finding that he did not so supply wine. It seemed clear that there were full bottles in Elliott's storeroom, and that these full bottles included some

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At the time he filled the two bottles his brother left with him, he him- self was in possession of them. If the bottles had been out of his own possession and in the possession of some other person, then to lift the bottles up against the will of that person and to fill them with wine would have amounted to trespasses. The reason is that the movement of the bottles and the use of them as receptacles are invasions of the possession of the second person. But they are things which the man possessed of the bottles may do without committing trespass. The respondent came into possession of the bottles without trespass. For his brother delivered possession to him of the two bottles specifically in question. In the same way, if any other customer ever left bottles of the appellant with him for wine to be poured into them, those customers must have similarly delivered possession of the bottles to the respondent. His possession of the appellants' bottles was, therefore, never trespassory. That his brother was in possession of the two bottles specifically in question there can be no doubt. If, as his evidence suggests, the latter did obtain the two bottles immediately from a retailer of the appellants' wine, it may be that he held the bottles upon a bailment in which the appellants were bailors and he was bailee. Such a bailment needs a privity between them. But the inference is perhaps warranted that, in the distribution of the appellants' wines, each successive merchant or trader, from the wholesaler to the retailer, had an implied author- ity from the appellants to create a bailment of the bottles from the appellants to the buyer to whom the merchant or trader sold the wine. There is, however, no importance in the question whether the possession of the respondent's brother, and of any customers in like case with him, is to be considered independent or as that of a bailee from the appellants upon a bailment determinable on demand. For it has been settled for centuries, to quote the language of the Year Book (1498), 16 H. VII., p. 3, pl. 7: "that where one comes to the goods by lawful means by delivery of the plaintiff immediately at the first, he shall not ever be punished as a trespasser but by writ of detinue ; nor any more shall his donee, vendee or sub-bailee who -comes to the plaintiff's goods by such means" (cited by the late Mr. Justice R. S. Wright in Pollock and Wright's Possession in the Common Law, 1st ed. (1888), p. 137). Thus in Year Book (1462), 2 E. IV., 'p. 4, Choke says: "if the case were that I bail goods to F. to keep for my use, and F. gives them to G., I agree that I shall not have trespass against G., for he had lawful possession by reason of the bailment, and by his gift the property (i.e. special property or posses- sion) is vested in the donee " (Pollock and Wright, p. 154).

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Some misunderstanding appeared to arise during the hearing of the appeal about two matters, which, for that reason, should be men- tioned. The first is the rule that, where there has been a trespass de bonis an action lies against the person committing the trespass not only at the suit of the person in possession, but also at the suit of a person immediately entitled to possession. Thus, suppose that after a purchaser of the appellants' wine from a retailer had consumed the contents of the bottle, a stranger were to take the bottle out of his possession against his will; in such a case an action of trespass could be maintained against the stranger not only by the purchaser whose possession had been violated, but by the appellants as the persons immediately entitled to possession. It is sometimes said, in stating the rule, that an immediate right to possession is enough to support an action of trespass, meaning when an invasion of possession has taken place. The statement, however, seems to have been mis- understood and treatéd as if it meant that an owner of a chattel personal out of possession but entitled immediately to resume it could complain in trespass of any use of the chattel which he had not authorized made by the person in possession or by anyone acting under the latter's authority. This is not so. If it were so, conver- sion would have been an unnecessary remedy and, indeed, a wrong to a right of property would exist going far beyond the limits of that tort, which is confined to acts inconsistent with the right to posses- sion. Further, the whole law of larceny at common law would be different and the statutory offence of larceny as a bailee need never have been created. The error is dealt with at length by the late Mr. Justice R. S. Wright (Pollock and Wright, pp. 145-147) who states the true principle, which Sir William Holdsworth said was implied in the earlier authorities but had not before been clearly stated (History of English Law, vol. 7, pp. 423, 424). It is, perhaps, desirable to set out a little of Mr. Justice Wright's text : - "In some cases," he says, "an owner of a thing who has never yet acquired the possession of it; or an owner who has parted with the possession, is nevertheless, in virtue of his right to possession, entitled to sue or prosecute a stranger who takes the thing; and it is of much practical and theoretical importance to discover in what cases a mere right to possession

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construed as a conversion, that tort has no place inthe case. Itis not out of the case because of the appellants' situation as bailor. On the contrary, if any conversion had been committed by the respondent, clearly the appellants as the persons entitled immediately on demand to the possession of the bottles would be the proper party to complain ofit. But nothing in the course pursued by the respondent in receiv- ing and filling bottles and returning them could possibly amount to the tort of conversion. The essence of conversion is a dealing with a chattel in a manner repugnant to the immediate right of possession of the person who has the property or special property in the chattel. It may take the form of a disposal of the goods by way of sale, or pledge or other intended transfer of an interest followed by delivery, of the destruction or change of the nature or character of the thing, as for example, pouring water into wine or cutting the seals from a deed, or of an appropriation evidenced by refusal to deliver or other denial of title. But damage to the chattel is not conversion, nor is use, nor is a transfer of possession otherwise than for the pur- pose of affecting the immediate right to possession, nor is it always conversion to lose the goods beyond hope of recovery. An intent to do that which would deprive " the true owner " of his immediate tight to possession or impair it may be said to form the essential ground of the tort. There is nothing in the course followed by the respondent in supplying wine to his customers who brought bottles to receive it involving any deprival or impairment of property in the bottles, that is of the immediate right to possession. The re-delivery of the bottles to the persons who left them could not amount to a conversion : see per Bigham J. in Union Credit Bank Ltd. v. Mersey Docks and Harbour Board (1). The re-delivery could not amount to a conversion because, though involving a transfer of possession, its purpose was not to confer any right over the property in the bottles, but merely to return or restore them to the person who had left them there to be filled. Indeed if they had been withheld from that per- son, he could have complained, at least theoretically, of an actionable wrong, that is unless it were done as a result of the intervention of the true owners and upon their demand.

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Before

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Judgment (210 paragraphs)

Cited By (11)