#5223 - Winkworth V. Christie Manson - Conflict of Laws BCL

Winkworth v. Christie Manson

Facts

The goods with which the action and counterclaim are concerned ("the goods"), were stolen in England from the lawful possession of the plaintiff who was the owner of them at the time of the theft and was domiciled in England and Wales. They were subsequently taken to Italy and sold and delivered by a third party to the second defendant under a contract made in Italy, and as to the contractual rights of the parties governed by Italian law, the goods also being at the time of such sale and delivery, physically situated in Italy.

The goods were thereafter delivered by the second defendant to Christie's in England for the sale there by auction by Christie's on his behalf. Some of the goods were sold in England by Christie's on his behalf, but before the proceeds of sale were paid over by them to the second defendant or the balance of the goods were sold, the plaintiff asked for and received undertakings from Christie's not to part with the proceeds of sale and not to part with the possession of the balance of the goods then remaining unsold pending determination of the issues between the plaintiff and the second defendant.

In the action the plaintiff seeks a declaration that certain works of art have at all material times been his property. He seeks an injunction restraining Christie's from, inter alia, paying to the second defendant any part of the proceeds of sale of these works of art or disposing of any of them at present in their possession.

Question

Whether upon the basis of the agreed facts set forth in the schedule to this order English domestic law or Italian domestic law is to be applied to the issue whether the plaintiff or the [second] defendant ... has title to the goods with which this action and the said counterclaim are concerned and to the proceeds of sale of those goods…

In the circumstances, a crucial issue in the present case must be: was the effect of the sale in Italy to confer on the second defendant a title to ownership of the goods which is valid even against the plaintiff? and the question of law now before the court resolves itself to the question whether this issue falls to be determined in accordance with English domestic law or Italian domestic law.

Holding

It is common ground that at the time of the theft the plaintiff was the owner of the goods, and that they were in his lawful possession. It is also common ground that he neither knew of nor consented to their removal to Italy or any subsequent dealing with or movements of them up to the time when the undertakings were given by Christie's.

On the other hand, if the effect of the subsequent sale in Italy was to confer on the second defendant a title to ownership of the goods, which is valid even against the plaintiff and is of such a nature that it must now be recognised by the English court, it would necessarily follow that, in the events which have happened, the plaintiff has lost and the second defendant has acquired, the immediate right to possession of them.

General Rule and Five Exceptions

…a general rule of private international law that the validity of a transfer of movable property and its effect on the proprietary rights of any persons claiming to be interested therein are governed by the law of the country where the property is situated at the time of the transfer ("lex situs").

Pausing there, Cammell v. Sewell is thus, in my judgment, clear authority for the following proposition: the mere circumstances that the goods in the present case have been brought back to England, following the sale to the second defendant and that their proceeds are now in England do not entitle the English court to decline to apply Italian law for the purpose of determining the relevant issue if, but for those circumstances, that would be the law applicable.

Exception 1: The first is the exception summarised as follows in Dicey & Morris, The Conflict of Laws, 9th ed. (1973), at p. 539: “If goods are in transit, and their situs is casual or not known, a transfer which is valid and effective by its proper law will (semble) be valid and effective in England.”

Exception 2: The second exception to the general rule accepted and asserted by Mr. Gilman arises where a purchaser claiming title has not acted bona fide.

Exception 3: The third exception is the case where the English court declines to recognise the particular law of the relevant situs, because it considers it contrary to English public policy.

Exception 4: The fourth exception arises where a statute in force in the country which is the forum in which the case is heard obliges the court to apply the law of its own country.

Exception 5: Fifthly, Mr. Gilman recognised that special rules might apply to determine the relevant law governing the effect of general assignments of movables on bankruptcy or succession.

Exception for cases where rights of third parties are violated on account of theft

Argument: He pointed out, however, that the present case is, in contrast, concerned with the respective proprietary rights of the second defendant and the plaintiff. He pointed out the many circumstances which cumulatively give this case a strong association with England, at least if it be regarded solely from the standpoint of his client. At the time of the theft, the goods were situated in England, in the ownership and lawful possession of a person who was domiciled in England. The plaintiff neither knew of nor consented to the removal of the goods from England or anything which made such removal more probable.

Rejected:

Secondly, it makes it plain that the principle is capable of applying so as to bind and destroy the proprietary rights of a third person, even though he was not a party to the relevant disposition and did not consent to it, but asserts his claim by virtue of a title prior in time to that of any such party. It thus effectively deprives the plaintiff in the present case of any opportunity to argue that the principle is capable of applying only in determining the rights of the parties to a relevant disposition or their respective successors inter se, and indeed his counsel has not asserted any such broad proposition.

Fictional situs in cases of theft?

Argument: …it does not follow that the situs of the goods must be regarded as Italian for the purpose of determining the respective proprietary claims of the plaintiff and the second defendant. For the latter purpose, he suggested, on the particular facts of the present case, the court is entitled and obliged to hold that the situs of the goods remained English throughout. They were in England at the date of the theft; they are still here; they never left England with the plaintiff's consent.

Rejected:

It is in my judgment abundantly clear from the authorities already cited that, in appropriate circumstances, the court is prepared to follow the principle of Cammell v. Sewell by applying the law of country A, in favour of a person who acquires title to personal property under the law of that country, even though the effect of such application is to destroy the proprietary rights of a former owner, who never himself possessed the property in country A and never consented, expressly or implicitly, to its going to country A. This was the situation in Cammell v. Sewell itself, where, as Cockburn C.J. pointed out in argument, 5 H. & N. 728, 735: “...the goods were wrecked on the coast of Norway, and came there without the owner's assent.”

Accordingly, I think it clear that, if the principle of Cammell v. Sewell applies at all on the facts of the present case, then the lex situs of the relevant disposition...