Lawsuit document containing allegations of conversion also known as trespass to chattelsHelpful Guide to Understanding Tortious Conduct Known as Conversion or Trespass to Chattels or Detinue Including the Nuanced Differences

Conversion, which is also often mistakenly called trespass to chattels, involves the wrongful interference with a mobile object of another.  Such object might be money (see: Wymor Construction Inc.  v. Gray, [2012] O.J.  4181), goods, equipment, supplies, or other materially tangible things and possibly, as below, intangible things such as electronic data as information.  While conversion may be described using terms familiar to criminal law such as theft or robbery or burglary, and while conversion may occur by theft, robbery, or burglary, the tort of conversion may occur by other methods.  Additionally, while 'wrongfulness' is an element of conversion, it is inaccurate to presume that the wrongfulness must include criminal or illicit intentions.  While conversion does require an element of intention, such 'intention' may merely be an action that was an innocent intention; and accordingly, conversion falls within the family of torts known as the strict liability torts whereas even if the conversion, being the wrongful interference, was without nefarious or illicit intentions and purely with innocent intentions, liability may still result.  The tort of conversion was well articulated within the case of BMW Canada Inc.  (Alphera Financial Services Canada) v. Mirzai, 2018 ONSC 180 which stated:

[17]  The tort of conversion involves the wrongful interference with the goods of another, such as taking, using or destroying those goods in a manner inconsistent with the owner’s right of possession: DaimlerChrysler Canada Inc.  v. Associated Bailiffs & Co.  Ltd., 2005 CanLII 24234 (ON SC).

[18]  The crux of the tort of conversion is the defendant committing a wrongful act with respect to the property.  Evidence must show or permit an inference to be drawn that the defendant acted in such a way as to deny the Plaintiffs title or possessory right.  (Simpson v. Gowers (1981)1981 CanLII 1884 (ON CA), 32 OR (2d) 385 (C.A.) at 387, per MacKinnon  A.  C.  J.  O.).

[19]  The tort is one of strict liability, and accordingly, it is no defence that the wrongful act was committed in all innocence.  The defendant cannot claim contributory negligence or some fault on the part of the plaintiff:  Boma Manufacturing Ltd.  V.  Canadian Imperial Bank of Commerce, 1996 CanLII 149 (SCC), [1996] 3 SCR 727 at para.  31.  Diplock L.J.  asserted this principle in Marfani & Co.  v. Midland Bank, Ltd., [1968] 2 All E.R.  573, at pp.  577-78:

.  . .  the moral concept of fault in the sense of either knowledge by the doer of an act that is likely to cause injury, loss or damage to another, or lack of reasonable care to avoid causing injury, loss or damage to another, plays no part.

[20]  In Westboro Flooring and Decor Inc.  v. Bank of Nova Scotia, 2004 CanLII 59980 (ON CA), [2004] O.J.  No.  2464, the Court of Appeal confirmed that all that is required re intent is the defendant acts in a manner that is inconsistent with the owner’s title or possessory right, and any blameworthy conduct beyond that is not essential (at para.  14 – 16, per Simmons, J.A.).  The philosophy behind strict liability is that a defendant cannot use or convey anything which is no title to use or convey.

[21]  There are four essential elements for the tort of conversion.

i.   The defendant commits a wrongful act;

ii.   Involving the Plaintiff’s chattel;

iii.  By handling or disposing of the chattel;

iv. With the intention of denying or negating the Plaintiff’s title or other possessory interest.


Additional Helpful Principles

Further information as to what constitutes the tort of conversion, including jurisprudence regarding the nature of 'intention' element may be found in AVS Transport Inc.  v. van Ravenswaay et al., 2016 ONSC 3568 which says:

[16]  Conversion is an intentional tort committed when a defendant a) commits a wrongful act b) involving the Plaintiffs chattel, c) by handling or disposing of the chattel d) with the intention of denying or negating the Plaintiffs title or other possessory interest (see Fridman, law of torts in Canada (third).  Carswell; London, Ontario, 2010, page 118; Boma Manufacturing Ltd.  v. Canadian Imperial Bank of Commerce, 1996 CanLII 149 (SCC), [1996] 3 S.C.R.  727 per Iacobucci, J., at para.  31; 2934752 Canada Inc.  v. W.  Pickett & Bros Customs Brokers Inc., [1999] O.J.  No 5435, para.  30, per Archibald, J.; Pop N’Juice Inc.  v. 1203891 Ontario Ltd., [2004] O.J.  No.  3085 (Ontario S.C.J.) at para.  17 – 21, per Fedak, J.; and Daimler Chrysler Canada Inc.  v. Associated Bailiffs & Co.  [2005] O.J.  No.  2855 (Ont.  S.C.J.) para.  9, per Perell, J.).

[17]  A defendant, by using the Plaintiff’s goods or by giving or selling them to a third person, indicates the assertion of rights over the goods necessary for conversion.  (Toronto Dominion Bank Ltd.  v. Dearborn Motors Ltd.  (1968), 1968 CanLII 624 (BC SC), 64 WWR 577 (B.  C.  S.  C.) at 581 per Verchere, J.)

[18]  The crux of the tort of conversion is the Defendant committing a wrongful act with respect to the property.  Evidence must show or permit an inference to be drawn that the Defendant acted in such a way as to deny the Plaintiffs title or possessory right.  (Simpson v. Gowers (1981), 1981 CanLII 1884 (ON CA), 32 OR (2d) 385 (C.A.) at 387, per MacKinnon  A.  C.  J.  O.).

[19]  The “intent” to deny the Plaintiff’s title or possessory interest has been given broad meaning.  The most compelling at evidence by which a Defendant may deny Plaintiff’s title or possessory right is by selling it without having any personal right to do so (see Unisys Canada Inc.  v. Imperial Optical Company (1998) 43 C.C.L.T.  (2d) 286 (Ont.  Gen.Div.) at page 292 per Hoilett, J., aff’d 49 C.C.L.T.  (2d)  237 (C.A.).

[20]  Any time someone receives or disposes of a chattel without satisfying himself of its title, they acquire or dispose of the chattel at his/her own risk (see Battleford’s Credit Union LTD.  v. Korpam Tractor and Tarts Ltd.  (1983), 28 SASK.  R.  215 (Q.  B.) at (217, per Wimmer, J.).

[21]  Some cases have held that intent must be proved and if the defendant had no intention of depriving plaintiff of the benefit of the property or if no such inference can be drawn from the evidence, no conversion occurs (see Gasparetto v. Fizzard (1989), 1989 CanLII 1471 (NS SC), 99 N.  S.  R.  (2d) 29 TD, and Robertson v. Stang (1997), 38 C.  C.  L.  T.  (2d) 62 (B.  C.  S.  C.).  Fridman points out that in one case it has been held that the absence of fraud on the part of the defendant might excuse him (see Waite, Reid and Company Ltd.  v. Rodstrom (1967), 1967 CanLII 596 (BC SC), 62 D.  L.  R.  (2d) 661 (B.  C.  S.  C.) At 670 per Wilson C.  J.).

[22]  Fridman considers this case is an anomaly.  The weight of authority is to the contrary holding that innocence or lack of specific intention to defraud the Plaintiff is no defence.  Conversion is a strict liability tort (see Boma, supra., at para 31-32.).  The fact that the Defendant acted in good faith or innocently will not excuse the defendant (see Boma, supra, at para.  31; Mutungih v. Bokun (2006), 40 C.C.L.T.  (3d) 313 (Ont.  S.C.) at p.  317 per Mungovin, J.).  As Fridman points out, “In case after case the innocence of the defendant in accepting money or goods has been held to be irrelevant to liability.  His good faith is immaterial.  His lack of knowledge of the rights of the plaintiff is not assisted him to escape liability.” (see: Fridman, supra at page 126, footnotes omitted).   In Westboro Flooring and Decor Inc.  v. Bank of Nova Scotia, 2004 CanLII 59980 (ON CA), [2004] O.J.  No.  2464, the Court of Appeal confirmed that all that is required re intent is the Defendant acts in a manner that is inconsistent with the owner’s title or possessory right, and any blameworthy conduct beyond that is not essential (at para.  14 – 16, per Simmons, J.A.).

[23]  The philosophy behind strict liability is that a defendant cannot use or convey anything which is no title to use or convey (see Fridman, supra, at page 127).  This is the practical expression of nemo dat quod non habet (one cannot give what one does not own).

[24]  Similarly, absent a statutory right, not only is the innocence of the defendant no defence, the defendant cannot claim contributory negligence or some fault on the part of the plaintiff (see Boma, supra, at 476).

As suggested in AVS Transport Inc., the issue as to whether conversion is an intentional tort or strict liability tort appears to remain somewhat debated; however, it does appear from the majority of the cited jurisprudence that most scholars view conversion as a strict liability tort.

Damages

Generally, when determining the damages applicable to a claim in conversion such will be based upon the actual value of the object converted at the time that the object was converted in a similar manner to that for the calculation of actual damages arising from other torts.  Per the BMW Canada Inc. case cited above:

[26]  In determining damages for the tort of conversion, the law as a fiction treats a conversion as resulting in a “forced sale” of the plaintiff’s chattel, requiring a defendant to pay the market value of the goods at the time of the conversion.

Valuing Intangible Concerns

Whether the object which is the subject to the tort of converion must be tangible or may include something intangible, such as data or information or even certain rights, is often debated within legal circles.  Clear case law confirming whether conversion applies to intangible things remains elusive; however, the precedent case of Boma Manufacturing Ltd. appears to provide some guidance whereas within the Supreme Court confirmed that the tort of conversion may apply to the wrongful negotiation of a banking cheque, whereas a banking cheque is merely a piece of paper that represents a financial instrument in accordance to the Bills of Exchange Act, R.S.C.  1985, c.  B-4, and whereas the damages suffered for conversion of a banking cheque may be for the face value of the instrument rather than merely the physical value of the paper itself.  Accordingly, per Boma, the intangible aspects of a tangible thing may be the prominent basis for establishing damages.  specifically, the Supreme Court said:

37.  The drawer, the payee or the endorsee can bring an action for conversion of a cheque.  To make the claim for damages for conversion, the plaintiff must prove that he or she was either in actual possession or entitled to immediate possession of the chattel.  As Rafferty states in “Forged Cheques: A Consideration of the Rights and Obligations of Banks and Their Customers” (1979-1980), 4 C.B.L.J.  208, at p.  228, "[t]he conversion action, however, will lie only if the drawer is still the true owner of the cheque.  It must not have been issued to the payee" (Jervis B.  Webb Co.  v. Bank of Nova Scotia (1965)1965 CanLII 626 (ON SC), 49 D.L.R.  (2d) 692 (Ont.  H.C.), and see for example Ontario Woodsworth Memorial Foundation v. Grozbord, 1969 CanLII 14 (SCC), [1969] S.C.R.  622).  The defendant's liability extends to the face value of the converted instrument, and is not limited to the value of the instrument as paper and ink (Norwich Union Fire Insurance Society Ltd.  v. Banque Canadienne Nationale1934 CanLII 39 (SCC), [1934] S.C.R.  596).

Despite the Supreme Court addressing intangible concerns involving rights to money per the negotiability of a cheque as within the Boma case, the question as to whether intangibles, such as intellectual properties, are protected per the tort of conversion seems to remain debated.  As said in UBS Wireless Services, Inc.  v. Inukshuk Wireless Partnership, 2008 CanLII 19796:

[35]  The Partnership submits that neither conversion nor detinue apply to the rights at issue in this case.  Traditionally, these torts have applied only to chattels, which are tangible forms of personal property.  In May 2007, the House of Lords affirmed this traditional scope in OBG v. Allan, [2007] UKHL 21 at paras.  95, 100, 210, 271, 321.  The Partnership submits that the present case is distinguishable from those instances in which Canadian courts have shown some flexibility in applying conversion or detinue to intangible property rights, such as intellectual property.  Here, the rights at issue belong to the Crown, which regulates and licenses their use.  In view of the reasons set out below, it is not necessary to address this point.

It seems confusing that rights to intangibles, such as the right to monies due as scribed upon a tangible cheque per Boma are protected by the tort of conversion and yet other intangibles, for example client data contained within a computer hard drive or even designs or information upon paper, would be without protection by the tort of conversion.  As an age old tort, existing from times of tangibles, it may now be time for the higher courts to confirm that all forms of intellectual properties are indeed protected by the tort of conversion.

Detinue

As above, per USB Wireless Services Inc., the tort of detinue is closely related to the tort of conversion.  Indeed it seems that in certain situations there could be some overlap of elements of each tort; however, there are nuanced differences.  The tort of detinue, including some of the nuances between detinue and conversion, was well articulated in fsafa where it was said:

[72]  To quote on the law of detinue, G.H.L.  Fridman stated the following:

“The tort of detinue is closely related to, but is not the same as the tort of conversion.  It may be defined as the wrongful or unlawful detention of another’s goods.  Unlike conversion, it does not entail any denial of the plaintiff’s title.  Conversion is a single act where the cause of action accrues at the date of the conversion.  Detinue, however, is a continuing cause of action.  It accrues at the date of the wrongful refusal to deliver up goods and continues until delivery up of the goods, or judgment in an action for detinue.  An action for detinue will ordinarily only lie if, at the time of the demand for delivery up of the goods made by the person entitled to possession, the defendant was in actual possession.” G.H.L.  Fridman, The Law of Torts in Canada, (Toronto; Carswell, 1989) at 95-6.”

[73]  In reference to the comments of Linda Rinaldi on this subject, Remedies in Tort; supra, at 4-14, the requirement for demand in detinue she states:

The reason for the necessity of a demand for delivery before there can be liability in detinue is that the defendant may have acquired possession in ignorance of the plaintiff’s claim.  The defendant must be given an opportunity to determine whether the claim is valid.  Furthermore, because the goods are being sought, proof that the defendant is in possession of the goods is an essential element of the tort of detinue.

In both conversion and detinue, the defendant must commit an intentional and wrongful act in respect of the chattel.  In an action for conversion, the wrongful act may take the form of any intentional dealing or interference with the chattel inconsistent with the rights of the person entitled to its possession.  In act action for detinue the wrongful act consists of the wrongful withholding of the chattel.

As it appears upon review of the law of the tort of conversion and the law of the tort of detinue, a key nuanced difference is that the tort of detinue arises only upon failure to return property following a demand for return of the property.  This requirement for a demand to return property, and where the cause of action is the 'failure' to do so, provides the nuance in detinue that the cause of action is a continuing cause of action.  As a continuing cause of action, a case in detinue may provide for an eternal limitation period.  Another key nuance is that a cause of action in detinue requires that the defendant be in possession, or control, of the property as is the subject of the demand to return.  If the defendant is without possession, or control, of the property, such as having already sold or disposed of the property, a detinue case will fail and the appropriate cause of action is conversion.

Trespass to Chattels

The tort known as 'trespass to chattels' is also similar to conversion whereas the such relates to wrongful interference with a chattel; however, the distinguishing nuance is that the Plaintiff remains in possession or control of the chattel.  Perhaps the easiest way to explain the difference is to use the criminal law terms in that where conversion may arise from theft (criminal law term) being interference by removing the chattel from the possession of the rightful owner (or person with right of possession), trespass to chattels may arise from vandalism (criminal law term) being interference without removing the chattel from the possession of the rightful owner.  The elements of 'trespass to chattels' were well articulated in Ontario Consumers Home Services v. Enercare Inc., 2014 ONSC 4154 where it was stated:

[50]  In Hudson’s Bay Company v. White, [1997] O.J.  No.  307(Ont.Gen.Div.) Lederman J.  at para.  8 referenced the criteria necessary for trespass to chattels:

In Clerk and Lindsell on Torts, 17th ed.  (London: Sweet and Maxwell, 1995), at p.  705, the authors define trespass to chattels, or “trespass to goods”, as being concerned with “the direct, immediate interference with the plaintiff’s possession of a chattel”.  Halsbury’s offers a similar definition at Vol.  45, para.  1491: “Trespass to goods is an unlawful disturbance of the possession of goods by seizure or removal, or by a direct act causing damage to the goods”.

Summary Comment

The torts of conversion, detinue, and trespass to chattels, all involve elements of wrongful intentional interference with chattels.  Furthermore, the wrongful intention may, be wrongful and intended in the nefarious or illicit sense; however, the wrongfulness and the intention may arise without a nefarious or illicit state of mind yet occur nonetheless; and accordingly, these torts are, generally, of the strict liability type without an availability of a defence based on lack of intention to cause illicit harm.  The interference is deemed intentional and wrongful merely by some form of positive act that results in the interference.  For example, should a farmer accidentally yet intentionally remove animals from the rightful owner, such as animals grazing on neighbouring farmland, due to confusion in identity of the animals, such an act would be intentional and wrongful despite the the lack of nefarious intentions; however, should the animals stroll without influence onto land of the farmer from a neighbouring farmer such an act would be without intention.  Of course, failure to return the animals upon a request to do so may then trigger an right of action in detinue; however, the wrongful intention at that point would be the interference by failure to return the animals rather than any wrongful act in how the animals initially came into possession.

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