In Indian Herbs (UK) Ltd v Hadley and Ottoway Ltd (Court of Appeal, 21 January 1999, Smith Bernal Transcript, Appeal number 98/0996/1) a slightly different but analogous question arose. A supplier on "simple" retention of title terms was held to have unlawfully repossessed goods prematurely before the date for payment was due. It was accordingly held to have wrongfully interfered with goods even though it was common ground that the majority of the purchase price was not paid. There had been an interference with the buyer's immediate right to possession. It's claim to set aside a default judgment raising a defence of continuing ownership was rejected.

There was a concession by counsel for the buyer that "the plaintiff [buyer] would on principles of unjust enrichment have to account for the purchase price of the goods which had not been paid." (Transcript, p 7).

Therefore it seems the usual measure of damages for conversion, that is the value of the goods, was not applicable.

Further Mummery LJ concluded:

"In my judgment, on the material we have seen and the arguments we have heard, no real purpose would be served by setting aside the default judgment. It turned out in the course of argument that the crucial point between the parties is what goods had been paid for and what goods had not been paid for. It is accepted on behalf of the third defendant [supplier] that, if the goods were paid for, there is no right to repossess them. It is accepted on behalf of the plaintiff that if goods were not paid for, even if the repossession was wrongful, the contractual liability to pay for them is a factor which the plaintiff is under a duty to account for on unjust enrichment principles in the assessment of damages." (p.18).

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Gerard McMeel
Faculty of Law
University of Bristol