Conversion

Conversion occurs when one party deals with goods in a manner inconsistent with the true owner’s immediate right of possession. So, if you come into possession of someone else's property by any means and do something they would not want done with it, conversion is likely to have occurred. This includes any alteration or damage to the goods or unauthorised usage of them.

 

A recent case exemplifying this is Chep v Bunnings, where the hardware chain, Bunnings, had large numbers of shipping pallets from pallet provider, Chep, some of which were held under a hire agreement, and some of which were not. Those which were not hired were to be returned to Chep, or one of Chep’s hirers, forthwith as is normal practice. Bunnings instead, due to its failure to maintain adequate records, maintained possession of the non-hired pallets in among the hired pallets for a number of years. The error was only discovered by Chep when checking 82,216 pallets returned by Bunnings in October 2007. Only 17,526 of these were subject to hire agreements. Bunnings’ conduct was found to be contrary to Chep’s right to possession.

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Detinue

The difference between detinue and conversion is that detinue focuses on a person’s refusal to return goods to the rightful owner on demand. Thus an item lent or left accidentally, or an item hired out can become the subject of detinue when the person in physical possession fails to comply with a demand for return.

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In Chep v Bunnings, Bunnings was found to have committed detinue by failing to return the non-hire pallets as required. From 2002 they had held large numbers of shipping pallets, having returned only a few previously. In May 2007 Chep demanded the return of the pallets and a court order was issued in August 2007 requiring the return of the same. Bunnings did not comply until October 2007. This delay constituted detinue.

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A more obvious form of detinue is to be found in permanent keeping of goods – such actions that criminal law would deem to be theft. The basic elements in a classic case of detinue involve a demand for return and refusal to return. But these are not essential, such as where it can be shown that the defendant would have refused to return the goods, this is sufficient to constitute a detinue.

 

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[1] Chep v Bunnings [2010] NSWSC 301.

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