"Conversion" is an unlawful act in English law whereby:
- a person without authority
- does any act,
- which interferes with the title of goods owned by another person.
The aggrieved person doesn't have to own the goods.
For example, when a person takes the property of another person, and deals the goods as their own, a claim for conversion may arise where the goods are:
- not returned on demand
- used for the purposes of the wrongdoer
- diminished in value, or
It's said the goods are "converted" for the purposes of the wrongdoer.
Conversion only applies to physical property.
Common design is a different tort. It is a form of conspiracy where two or more people perform acts in commission of a tort, such as infringement of intellectual property rights. It gives rise to joint and several liability for the tort.
Liability for Tort of Conversion
In order to be liable the wrongdoer:
- must have actual possession of the goods or
- an immediate right to possession of the goods (such as being in storage).
In order to have a claim, the innocent party:
- must have an interest in the property, such as a bailor, mortgage or a charge
- is not required to show that it's the paramount owner (ie the ultimate owner) of the property.
In this way, businesses which have leased property from another and then have their own title inferred may have an actionable claim.
This might include damage to the goods, taking possession of them or detaining them.
Conversion may take place in a number of different ways. They include by:
- taking possession over the goods, to control the goods.
It is not required to show that the wrongdoer intended to acquire title to the goods.
A person detains goods with lawful reason or who borrows goods in the absence of authority of the person with title to the goods may be liable
- taking possession of the goods, to exercise a right of ownership over them.
In cases such as these, the goods may be sold and delivered to a third party, however as wrongdoer does not have title to the goods, it becomes liable to the person.
This rationale applies whether or not title was conveyed or not: the wrongdoer did not have title itself to convey the goods, provided each case that the goods were delivered
- detaining goods in the face of an unjustified refusal to deliver up the goods after a demand is made.
The innocent party retains an immediate right to possession, and the demand is made whilst the wrongdoer remains in possession of the goods.
A claim for conversion is also available where the goods have changed form since the wrongdoer unlawfully took possession. For instance, where seeds become trees, or timber is used to construct a building.
Conversion is a tort of strict liability: it is immaterial that the wrongdoer didn't know that:
- the goods were owned by another person
- they were negligent, or
- there was no intention to harm the goods.
Suing for Conversion
Actions for conversion are usually prefaced by an unconditional demand for the delivery - the return - of the relevant goods.
Although the person in possession of the goods may wish to take time to make enquiries in respect to whether the person making the demand has a proper title to sustain the demand, the goods must be delivered after a reasonable time.
In circumstances where the goods are not delivered, the wrongdoer may at law assume the role of an insurer, and be liable for any damage or theft of the goods after a reasonable time has elapsed.
Is Conversion a Criminal Offence?
Conversion is a civil wrong rather than criminal offence. The legal tests applied in torts such as conversion are quite different to that applied in the criminal law.
Although the same conduct might also qualify as a criminal offence, conversion is a claim brought in the civil courts to obtain delivery of the goods and/or compensation for the goods in damages.