Electronically stored information, as opposed to the media upon which it was stored, was intangible and not a chattel and could not be “goods” for the purposes of the Torts (Interference with Goods) Act 1977. It was accordingly not capable of being wrongfully interfered with so as to constitute the tort of conversion.

The Court of Appeal, Civil Division, so held when allowing an appeal by the Environment Agency against the decision made by Judge Havelock-Allan QC, sitting in the Bristol Mercantile Court on 2 October 2013, on an interim application in proceedings brought by the claimant, Churngold Recycling Ltd, against the defendant, the Environment Agency, for conversion of the claimant’s documents, electronically held information and copies of that material by the unlawful seizure, copying and failure to deliver up that material, contrary to section 4 of the Torts (Interference with Goods) Act 1977, that the defendant was not entitled to keep copies of those original documents and use them for the purposes of their ongoing criminal investigation, as it had unlawfully taken the original documents outside of its powers, and the court had power to order delivery up of those copies.

During the course of a criminal investigation arising out of the removal of hazardous waste, the defendant purported to exercise the powers conferred by section 108 of the Environment Act 1995 at the claimant’s premises, by inspecting and copying a large volume of documentation for the purpose of the investigation. Electronically held information was copied by electronic transfer to the defendant’s storage media and in excess of 700,000 paper documents were electronically scanned. The claimants sought an order for delivery up of the original documents and copies.

By a consent order, the defendant provided the claimant with copies of all of the material which it had scanned, as well as digital copies of computer material that had been copied on-site by electronic transfer. The defendant then sought an order that the claimant was not entitled to withhold production of certain material or copies of it on the basis, as the claimant contended, that the material was not “a record” for the purposes of section 108(4)(k) of the 1995 Act, and a declaration that even if the material was not a “record” the Agency was not thereby precluded from examining or inspecting it. By the time of the hearing the originals of all documentary material had been returned to the claimant and the defendant accepted for the purposes of the hearing of the applications that the originals were not “records” for the purposes of the 1995 Act. Accordingly, the only subject-matter of the hearing was the copies of the original documents. The judge held that if copies were taken of documents which had been unlawfully seized, the court had power to order delivery up of the originals and the copies as well; that an order for delivery up of the copies as well as the originals involved a conclusion that in the events that had occurred, the copies had not become the property of the party who unlawfully seized the originals; that if they had, the ownership of the copies would be an absolute defence to the claim in conversion; and that it was arguable that the defendant did not have property in the copies that it had taken.

MOSES LJ said that the essence of the tort of conversion, summarised by Lord Nicholls in Kuwait Airways Corporation v Iraqi Airways Co (Nos 4 and 5) [2002] 2 AC 883, was that the defendant’s conduct was inconsistent with the rights of the owner (or other person entitled to possession), that the conduct was deliberate, not accidental, and that the conduct was so extensive an encroachment on the rights of the owner as to exclude him from use and possession of the goods. The copies the defendant made belonged to the defendant. It was the owner of those copies and, accordingly, there could be no question of any conduct by the defendant inconsistent with the rights of the owner of those copies, still less any encroachment on those rights. It was not arguable that the goods with which it was alleged the Environment Agency wrongly interfered, namely the copies, were goods belonging to the claimant. The claimant had not acquired any proprietary rights in those copies. Section 14(1) of the Torts (Interference with Goods) Act 1977 did not define goods but provided that unless the context otherwise required, “goods” included all chattels personal other than things in action and money. The electronically stored information retained by the defendant through the electronic scanning of paper documents and electronic transfer of the claimant’s electronically held information, as opposed to the media upon which it was stored, was intangible and accordingly, not a chattel and therefore outwith the scope of the 1977 Act. The question of whether intangible property was capable of being wrongfully interfered with so as to constitute the tort of conversion was put beyond doubt by the Court of Appeal following the decision in Your Response Limited v Data Team Business Media Limited [2014] EWCA Civ 281, [2014] WLR (D) 131 where Moore-Bick LJ cited the House of Lords decision in OBG Ltd v Allan [2008] AC 1 as clear authority for the proposition that the essence of conversion was a wrongful interference with the possession of tangible property and that the common law drew a sharp distinction between tangible and intangible property. The Court of Appeal in Your Response Limited acknowledged that there was a powerful case to be made for recognising that the essential elements of possession could be exercised over digitised material and that the dichotomy between choses in possession and choses in action and the recognition of a third category of intangible property susceptible to possession should be reconsidered. However, bound by the decision in the case of OBG Ltd, it held that an electronic database was not property susceptible of possession which was capable of being subject to conversion. In the light of those authorities there was nothing the court could or should do by way of reconsideration in the light of modern technology. The judge was accordingly not entitled to take the view that it was strongly arguable that the copies, including the electronic data, could be the subject matter of the tort of conversion or to order their delivery up to the claimant.

GLOSTER and VOS LJJ agreed.