ON 25 NOVEMBER 1946, the High Court of Australia delivered Penfolds Wines Pty Ltd v Elliott [1946] HCA 46; (1946) 74 CLR 204 (25 November 1946)
http://www.austlii.edu.au/au/cases/cth/HCA/1946/46.html
Mr Elliott used of Penfolds’ empty wine bottles to carry other wine.
Dixon J (at 229) said:
“But nothing in the course pursued by the respondent in receiving and filling bottles and returning them could possibly amount to the tort of conversion. The essence of conversion is a dealing with a chattel in a manner repugnant to the immediate right of possession of the person who has the property or special property in the chattel. It may take the form of a disposal of the goods by way of sale, or pledge or other intended transfer of an interest followed by delivery, of the destruction or change of the nature or character of the thing, as for example, pouring water into wine or cutting the seals from a deed, or of an appropriation evidenced by refusal to deliver or other denial of title. But damage to the chattel is not conversion, nor is use, nor is a transfer of possession otherwise than for the purpose of affecting the immediate right to possession, nor is it always conversion to lose the goods beyond hope of recovery. An intent to do that which would deprive “the true owner” of his immediate right to possession or impair it may be said to form the essential ground of the tort.”
The tort of conversion generally concerns a defendant’s intentional dealing with goods in a manner inconsistent with or repugnant to the plaintiff’s ownership of the goods: per Latham CJ at 217 – 221, Dixon J (Starke J agreeing) at 228 – 230, McTiernan J at 234 – 235 and Williams J at 239 – 244.
An act repugnant or inconsistent to the terms of the bailment, or consistent only to treat the goods as his or her own, terminates the bailment resulting in possession revesting to the owner who can sue the bailee in trover: per Latham CJ at pp 214 and 217-8, Dixon J at p 227, McTiernan J at p 233 and Williams J at pp 241-2.
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