Posted: June 23rd, 2022

Property Law Trespass to Goods

Property Law Trespass to Goods
1. The Penfolds Wine case considers the issue of trespass and whether a person who sold wine bottles which were a property of Penfolds wines amounted to trespass. From the case facts, a man was given bottles of Penfolds Wines to be filled with their wine to be served to his customers. Penfolds later discovered that the man was filling the bottle with other wines that were not Penfolds, and serving his customers, it took the man to court. The central issue in the court was whether this amounted to a trespass in order to establish a distinction between possessory and proprietary rights in order to establish whether trespass had occurred.
2. The plaintiff Penfolds Wines sort to claim relief from the defendant by way of injunction. The plaintiff sought to bar the defendant from filling the bottle with anything else that the plaintiff did not produce. Expressively seeking to limit the defendant from using the Penfolds Wines bottles as place holders for other drinks.
3. The plaintiff claimed for an equitable relief by injunction to restrain the defendant, his servants and agents from collecting or disposing of or going off with the possession or dealing in any form with the plaintiff’s bottles unless they contained the plaintiff’s products such as brandy or wine or spirits and they exist in the open market and have their content directly provisioned by the plaintiff. The appellant sought to get an injunction in order to establish real protection for proprietary goods that were the bottles marked with Penfolds Wines branding. In a prior case, it was established that to force the appellant to depend on action for damages as a basis of achieving remedy in specific cases would effectively not afford the appellant real protection for their proprietary good and their value . As such, common law remedy of an injunction or a restraining order for the defendant to cease continuing an action that was threatening to Penfolds Wines would be effective in establishing the appellant’s legal rights in regard to the bottle and setting a precedence, by compelling any such action in the future unconscionable practice.
4. Trespass is use without intent to establish a precedence of possession, damage or meddle with the chattel that belongs to Penfolds Wines. Conversion is the breach and intentional alteration of goods belonging to another party without their owner’s consent . If the plaintiff sued for conversion- it was to be established that the defendant without their authority used bottles belong to the plaintiff, and in so doing his actions amounted to the destruction of the chattel.
5. Latham CJ considered that the defendant had committed a form of trespass. However brief, his actions of handling the chattel belonging to another party even without resulting in material damage but for actions other than what was intended was a trespass. The normal use of the bottle as a container for other material other than what the owner intended was a trespass as the defendant was not an authorized to possess the bottle, let alone use for the purpose he used for. Starke J made no comment on trespass and instead directed attention to Dixon J’s argument. Dixon J argued that there was no trespass since the respondent did not infringe on another person’s possession. As customers brought bottles belonging to the Appellant and the respondent who is a seller of bulk wine in small quantities just sold them the wine in Appellant branded bottle not taking or retaining the bottles. The bottle bought by the inspector, that the respondent’s brother left him, also could not amount to trespass as at the time, he was in possession of the bottle his brother a sub-bailee had transferred to him. In receiving and taking possession of the bottle from his brother her was briefly allowed possessory title to the bottles, on behalf of his brother who was the sub-bailee who held the bottles upon the same terms and conditions as the original bailee which was the retail shop where he acquired wine. The contract between the bailor and the bailee established that the current possessor of the bottle, had a possessory title stipulated under a contract of use which denied the bailee and the sub-bailee the use of the chattels than what is intended or give the chattels to a third party- the transfer of the property to a stranger (the defendant) was unquestionably wrong, and entitled the plaintiff to sue the defendant’s brother was was the sub-bailee. They considered whether it was Elliot (the defendant) who was entitled to maintain a contract of use between the bailor (Penfolds Wines). They established that he was a third party. The bailee/sub-bailee are the ones that had the possessory title and compelled to use the bottle as per the bailor’s wish as per an earlier established precedence in the Fenn case .McTiernan J also established in his opinion that the defendant had not committed any trespass as the plaintiff’s business model harbors a voluntary assumption of risk. and also based on the fact that the defendant did not seek to sell the Penfold bottles but was coerced by the inspector to do so William J argued using the principles of equity that the defendant was guilty of trespass. He argued that equity grants injunction to acts of trespass especially when there is threat that the action may be repeated knowingly or unknowingly. This was in order for the plaintiff to establish real protection over their property.
6. There could also be conversion according to Latham CJ. Starke J argued that there was evidence to support a conversion based on only two bottles, but this was a rare and casual circumstance, and the evidence did not amount to a proper case for granting the plaintiff his wish for an injunction. There was no substantial evidence to establish proper case for conversion apart from the rare case of using the two bottles in a manner not consistent to the plaintiff’s wish. McTiernan J argued that the defendants actions of putting within the two bottles wine from another wine cellar amounted to asportation of the chattel. This amounted to a tort of conversion as the defendant was a third party. William J argues that there was no conversion on the defendant’s part as the defendant did not have any obligation to examine any bottles which were brought to him, and further more he had the intention of returning the bottle to the sub-bailee, who had brought the bottles to him under specific circumstance. The bottles were brought to him by his customers and he had no obligation to the plaintiff to evaluate the endorsements indicating ownership.
7. Dixon J argue there could not be a conversion in relation to selling wine to customers with bottle branded in the Appellant name as the respondent did not make any act, or intention that was not in line with Penfolds Wines’ right to possession, impair or destroy. He did not retain the bottle, destroy them or impair their use, even for the two bottles taken away by the inspector in exchange for cash.
8. Latham CJ argued that while the defendant and in the use of the bottle as a third party had no obligation to the bailor, his brother had, and knowingly gave the defendant the bottle for use for a purpose that was inconsistent with the dominion of the owner of the chattel. He additionally exchanged the bottles to Moon in exchange for some shillings, purporting the bottles as his own, effectively committing a tort of conversion.
9. In Flack, officers of the law gained a search warrant to Flack’s house and in fulfilling the warrant, found a briefcase with $433,000. Flack, the owner of the premise had no idea of the briefcase existence and its content. The goods were seized as evidence and taken into custody of the police.
10. Hill J argued that The police have the power to seize and retain good for a specified period of time, but they do not have the power to retain beyond extended time necessary for investigation and prosecution as their superior right diminishes with time. Flack on several occasions asked that they be returned but the officers outlined that it was still under their custody as it was an essential part in their investigation three years later. Mrs. Flack pushed the matter in front of a judge suing in conversion against defendant the Chairperson of the National Crime Authority as the first respondent, and the Commonwealth, the second respondent. The goods had been lawfully taken from her premise.
11. Flack had possessory title to the briefcase for the mere fact that it was in her premise. Possessory title is as good as absolute title of ownership in all manners with the exception of the manifestation of the true owner. Seizure of the bag under a legal warrant does not take away the possessory title from Mrs. Flack and does not provide the defendants any defense. Hill J sort to establish right to possession and invoked an earlier precedence from Penfolds Case. Proof of ownership did not matter as possessory title provided Mrs. Flack special property in the chattel. This was relevant as the briefcase’ ownership was by default Mrs. Flack’s property and the authorities did not have to compel Mrs. Flack to waive ownership until the original owner came forward.
Latham CJ Starke J Dixon J McTiernan J Williams J
Was there a trespass? No Yes No No No
Was there a conversion? Yes Yes No Yes No
Should the Plaintiff get the remedy they sought Yes No No No No

Samantha Hepburn, Australian Property Law: Cases, Materials and Analysis (5th ed., LexisNexis, 2020)
Fenn v. Bittleston. [57]-[69].
Flack v Chairperson, National Crime Authority [1997] FCA 1331; 150 ALR 153.
Model Dairy Pty. Ltd. v. White
Penfolds Wines Pty Ltd v Elliott [1946] HCA 46; (1946) 74 CLR 204 (25 November 1946)
Russell v Wilson [1923] HCA 60; 33 CLR 538; [1923] 30 ALR 75, [44


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