If goods have been stolen and sold on, it can be important to know what happens to the title of stolen goods if purchased by a third party and what legal action can be taken in these circumstances, from applying for a freezing order to obtaining an order for delivery up. Below we look briefly at what happens to the title of goods if they have been stolen and subsequently sold within a commercial context, as well as what the original owner can do to safeguard their stolen property.  

What happens to the title of goods if they have been stolen? 

If goods have been stolen and sold on, the general rule is that the buyer will not become the legal owner, even if they paid a fair price and acted in good faith. The person who originally owned them will typically still be the rightful owner, and the title for those goods will not be transferred, even where the buyer had no knowledge that the goods were stolen. This means that if B wrongly sells goods belonging to A to C, the items will remain the lawful property of A. The fact that C has innocently purchased items that they believed were owned by B is irrelevant. 

The legal position is thus: as the seller had no title so, prima facie, the buyer has no title.  

There are certain exceptions that have arisen because of the obvious unfairness that this general rule might create where innocent buyers lose their money in difficult circumstances, although these scenarios are relatively limited. This could include estoppel by representation, where the true owner has represented that the purported seller is in fact the true owner of the goods, or estoppel by negligence, where the original owner has not taken sufficient care to ensure that their belongings or stock are not sold by a rogue third party. However, the courts are often reluctant to remove title away from people, even where they have failed to report any theft to the police for example.  

What action can be taken in these circumstances?  

Fortunately, if property has been stolen and sold on, there are steps that can be taken by the original owner to help safeguard that stolen property including, depending on the circumstances involved, applying to the courts for a freezing order and/or for an order for the delivery up of goods. 

A freezing order, also commonly known as a freezing injunction, is an interim measure granted by a court to prevent a person from being able to dispose of or deal with specified assets before a judgment has been enforced against them. Freezing orders are wide-reaching, with the power to restrain all types of assets. Orders can also be obtained in respect of assets within England and Wales, as well as assets situated outside this jurisdiction, known as worldwide freezing orders. 

Additionally or alternatively, the owner of stolen goods may consider bringing a claim for wrongful interference under the Torts (Interference with Goods) Act 1977. The 1977 Act defines several different forms of ‘wrongful interference’, including conversion. Conversion occurs when one person deals with goods which another person possesses or has the right to immediately possess, in a way which is inconsistent with that person’s rights. It can be committed in many ways, including where the person in possession of the goods refuses to return them upon request. The 1977 Act provides that in proceedings for wrongful interference, the court may grant an order for delivery up of the goods or, alternatively, damages by reference to their value. 

What advice should be sought in these circumstances? 

Seeking expert advice form a specialist lawyer can be crucial in the context of safeguarding stolen goods, where time is very often of the essence, not only to take action against an innocent buyer but to avoid any criticism from the courts around undue delay when seeking the court’s protection. 

It is therefore imperative to get professional advice as soon as possible. 

Legal disclaimer 

The matters contained within this article are intended to be for general information purposes only. This blog does not constitute legal advice, nor is it a complete or authoritative statement of the law in England and Wales and should not be treated as such. 

Whilst every effort is made to ensure that the information is correct, no warranty, either express or implied, is given as to its’ accuracy, and no liability is accepted for any errors or omissions. 

Before acting on any of the information contained herein, expert advice should always be sought.