If a skip has your name stamped on the side, that’s your skip, isn’t it? And anyone who takes it should jolly well give it back, right? Well, not always, as this cautionary tale demonstrates
It might seem extreme to ask that a person be sent to prison if they hinder the recovery of a skip, but that was the order obtained by a company seeking to recover property it said it owned. The case illustrated not only how much metal is in demand, but how difficult it is to demonstrate ownership of it.
Faced with dwindling supplies, a metal manufacturer recently set out to recover skips. Identifying the skips was easy – they had the company’s name stamped into the metal – but proving ownership and getting them back was a whole lot trickier.
The manufacturer’s agents spotted some of “its” skips in my client’s yard. This was followed by lawyers’ letters demanding their return. My client was bemused. In the metal coating business, the standard way of shipping materials is in skips: they come in, the materials are processed and the skips go out with the materials in them. The claim my client faced was that it allow the collection of the skips from its yard. This would mean unloading skips of the materials waiting to go into the plant and losing skips needed to return the finished product to the customer.
While my client contemplated the business disruption, the alleged owner obtained an interim injunction with an order against one of the company’s officers. The potential effect of the order would be to put the person in prison were they to handle the skips.
To recover an object in law, you need to show ownership and a lawful demand for return. The presence of the metal manufacturer’s name on the skips only suggested that at some time it had been the skips’ producer or owner. The alleged owner said that did not matter – its terms and conditions reserved ownership. There was a problem with that argument, which lawyers call “privity of contract”. My client was not a party to any contract with the alleged owner, so it was not bound by those terms.
The manufacturer’s next argument was that my client did not own the skips so it must hold the skips as bailees for the real owner. As long as the court accepted that the metal manufacturer was the owner, the skips should be returned.
It is similar to picking up a discarded newspaper: has the real owner given up their right of ownership?
This left the alleged owner having to satisfy the court that it had not lost or dispensed with its right of ownership over the years. It is similar in concept to picking up a discarded newspaper on the train: has the real owner given up their right of ownership?
If the court makes an interim injunction with penal notices, the parties have to come back before the court quickly. While preparing for the hearing, we noticed that the demands for return of the skips had been made by the wrong company – the manufacturer’s foreign parent, not the local UK company. The wrong company had obtained the interim injunction and penal notice order. This was fatal: the court lifted the injunction, dismissed the penal notice and ordered the claimant to pay my client’s costs.
A good result, but the court never decided whether the original owner could prove that it retained ownership of the skips. What the court did say was that an injunction was a sledgehammer used to crack a nut; the correct remedy was damages.
With the injunction out of the way, my client secured an agreement from the person who had supplied the materials in the skips that, on return their return, they would be offered to the alleged original owner.
The lesson is that you can be liable for having something in your possession that you do not own if the rightful owner demands its return. While it sounds simple to give it back, doing so may prove remarkably complicated.
James Bessey is a partner in the construction department at Cobbetts