Risks Associated with Objects That Have No Acquisition Records

Most museums have some acquisition records from the nineteenth and twentieth centuries that provide little or no information about how an object came to be in their collections. Sometimes objects were transferred by societies that are now defunct and where ownership was unclear. ^{Footnote 16} Some objects have been deposited anonymously by members of the public who have either sent objects through the post or quietly left them in the museum before departing. Furthermore, museums have many objects for which, although it is known that they were originally transferred on loan, the lenders cannot be found.

It is possible that an object was transferred to the museum on trust for charitable purposes (such as educational purposes). If so, there is little risk of any breach of the law. The Charity Commission encourages museums to root out any objects that do not have merit. ^{Footnote 17} If the governing body is acting in the best interests of the museum and for the benefit of the public in transferring objects to another museum, or selling them and using any proceeds of the sale for charitable purposes (such as to acquire new objects or to care for the remaining collections), it is highly unlikely that there will be a breach of charity law. In contrast, dealing with objects that may have been transferred on loan is hazardous. The lender may have been negligent in failing to remind the museum that the object was being lent rather than being given and in making no effort to let the museum know of his or her whereabouts, but this carelessness with his own property will not usually affect a museum’s liability in conversion. ^{Footnote 18} Similarly, all of the efforts that a museum may have made to discover whether the object was on loan or not (such as searching through its acquisition records) will normally be irrelevant. In law, the general rule is that the defendant is strictly liable – there is no defense of good faith. ^{Footnote 19} This potential liability will cause any museum to hesitate in transferring an object elsewhere.

Objects on Loan and the Tort of Conversion

If a museum sells an object that was on loan, the claimant will use the tort of conversion to recover it or to obtain compensation for its loss. ^{Footnote 20} In law, the claimant merely has to show that the defendant deliberately treated the object in a way that was inconsistent with the rights of the owner and that the defendant’s conduct was so extensive that the owner was excluded from possession of it. ^{Footnote 21} A claimant is not obliged to show that the museum was at fault. Museums are therefore at risk if they assume that they own their collections where there are no records to substantiate this fact.

The legal principles that form the basis for the action in conversion are derived from decisions made in cases centuries ago. The law is complex because it requires an understanding of subtle issues relating to possession and mental control. For example, the claimant does not need to prove that he is the owner; ^{Footnote 22} he only needs to demonstrate that he has a legal right to immediate possession of the object. ^{Footnote 23} This would be the case where he has transferred the object on loan but where the loan can be brought to an end at any time. It is sufficient if the claimant can show that he has a right to possess the object that is superior to the defendant’s right. Thus, a possessor (such as a finder), who exercises control over the object, may have rights that are good against everyone apart from an earlier owner. ^{Footnote 24} By permitting a claimant to assert his possessory rights against anyone who later interferes with his enjoyment of the property, ^{Footnote 25} the law provides a pragmatic solution that avoids social disorder. ^{Footnote 26} Furthermore, by recognizing different degrees of possession, the tort is sufficiently flexible to identify who has the better right to an object in the context not only of sales and loans but also of more elaborate transactions. In Kuwait Airways Corp. v. Iraqi Airways Co., Lord Nicholls observed that, as conversion could take place in such widely differing circumstances, it was difficult to formulate a precise test. ^{Footnote 27} As Sarah Green and John Randall have remarked, the courts have tended to look backwards to decided cases over the centuries rather than to look forward with a view to producing guidance that will help with new situations. ^{Footnote 28} As we will see, the lack of a clear legal “map” can create the risk of overhasty decisions.

The normal remedy sought will be financial compensation. ^{Footnote 29} It is possible to ask the court to make an order at its discretion for the return of the object itself where it is unique, as cultural objects often will be. ^{Footnote 30} Where the loan object has been given away or sold by a museum, the claimant has a choice of defendants; as successive possessors will have deprived him of his property, in turn, the claimant may sue each one and require them to account for the benefits that they have received. ^{Footnote 31} In Kuwait Airways, Lord Nicholls appeared critical of the principle that each person along a chain of transactions will be held strictly liable to pay compensation, regardless of fault and regardless of whether their possession was for a short period before the object was transferred to another. ^{Footnote 32} However, his Lordship went on to acknowledge that the principle of strict liability was “deeply ingrained in the common law.” ^{Footnote 33}

The Law Reform Committee had considered this issue in 1971. Its report was the precursor to the Torts (Interference with Goods) Act 1977, which amended and largely unified the old forms of action to produce the modern action in conversion. ^{Footnote 34} The committee thought that, if the principle of strict liability was altered, the claimant might face insuperable difficulties in attempting to establish that a defendant in a chain of disposals (such as an auctioneer or dealer) was at fault. The committee suggested that, as most handlers of goods were professionals who were insured, the advantage of strict liability was that it was clear and certain; it meant that claims could be made on insurance policies without difficulty. ^{Footnote 35} As Lord Denning had noted in R.H. Willis and Son v. British Car Auction Ltd., auction houses will normally charge a buyer’s premium on every sale and will use this money to pay for insurance to protect not only themselves but also the purchasers from potential third party claims. ^{Footnote 36} Thus, if a trader or auctioneer does not have the time or inclination to act as a detective to check the ownership history of an object, he can take out insurance to cover the risk of being sued by a third party. Lord Denning described this system as one of “doing justice between the parties” so that they are all protected. ^{Footnote 37} It is therefore difficult to understand why judicial concern to protect commercial people, such as auctioneers, persists when they are so easily able to protect themselves. ^{Footnote 38}

The fact that a claimant can sue successive possessors makes it very difficult for museums to find a solution when they wish to transfer or sell (or perhaps destroy) objects from their collections but where there are no records in relation to how they came to be acquired. Not only the museum, but also any recipient, could be sued in conversion if the object turns out to have been originally transferred on loan. Good faith is no defense. Taking out insurance, even if it was possible, would not necessarily be an answer. Museums are concerned to avoid any injury to their reputations because they depend upon public trust. ^{Footnote 39} If a person complains that the museum has sold an object on loan, this action is likely to attract the attention of the media, and the museum will be seen to be highly irresponsible by members of the public, who expect museums to care for their collections in the long term and to consult donors before transferring them elsewhere. A further concern is that it is common for the value of cultural objects to fluctuate, making it difficult to anticipate the size of any claim for compensation if the object cannot be returned. ^{Footnote 40} Museums with unwanted objects may not be able to take out insurance to cover the financial risks of anyone coming forward to claim an object that they have transferred or sold elsewhere. And no museum can insure against reputational damage.

Museum Ethics and Stewardship of Collections

There are a wide variety of museums in the UK. They include national museums, independent museums, and local authority museums. National museums and some independent museums are charitable. ^{Footnote 41} Legal title to the collections will normally be vested in the governing body, which may be a board of trustees, a company, or a local authority. All of those who work in these museums, and their governing bodies, are expected to adhere to the Museum Association’s Code of Ethics.

Both the current Code of Ethics and its predecessor, published in 2015 and 2007 respectively by the Museums Association, emphasize that museums and their governing bodies act as stewards (or guardians) of their collections. The 2015 Code of Ethics, under the heading “2. Stewardship of Collections” states:

The key principle of stewardship is developed further at a later point in the new Code of Ethics, which speaks of museums “safeguarding items for the benefit of future audiences with its obligation to optimise access for present audiences.” ^{Footnote 42}

Sales and Conversion

Both charity law and museum professional practice encourage museums to review their collections and to deaccession and dispose of objects that are not being engaged with by the public. ^{Footnote 43} If an object is unwanted, museums are expected to try and keep the object within the public domain by transferring it to another museum if they can. The thinking is that a transfer to another museum will benefit the public because there is the opportunity for different visitors to enjoy the object in its new location.

In normal circumstances, museums will only sell an object to a private buyer if it cannot be rehoused in another museum. This occasionally happens when either the object has relatively little cultural value or when there is a surfeit of such objects. The classic examples are things from the Victorian era, such as bed pans and coal scuttles, which may still be of some interest to private purchasers. However, if there is no record of an object’s history and if it was in fact transferred on loan, any sale would be a conversion of the object. The lender could therefore sue the museum. The purchaser could also sue the museum demanding the return of the price paid, on the basis that there has been a breach of an implied term in the sale agreement that the museum had a right to sell. ^{Footnote 44} A museum may therefore be advised that it is safer to keep the object, rather than selling it, in order to avoid any risk of litigation and damage to its reputation.

Stewardship: Transfers, Loans, and Conversions

Although museums will avoid selling objects that have no acquisition records, are they on safer ground if they transfer or lend them to other museums? Museums are encouraged by the Code of Ethics to transfer unwanted objects to other museums. If there is doubt over legal title, the recipient museum could be informed of this risk and the fact that it may be obliged to surrender the object if someone can prove that she is the owner. In these circumstances, could the museums deny that they were converting the object by claiming that they were merely acting as stewards of cultural property? Their argument would be that there had been merely a transfer of physical possession so that the object, although available to be reclaimed, was now to be found in a different location. Both museums would rely upon the guidance in the Code of Ethics to make the point that they held the cultural object as stewards for the benefit of the general public and future generations. They could argue that a transfer would not be asserting any rights to the exclusion of the true owner; it would be simply a matter of swapping one steward for another. If this argument was accepted, museums could feel free to transfer their “orphan collections” between each other, and there would be a partial solution to the problem of long-term care and storage of unwanted objects.

In order to decide whether the transferring museum or receiving museum is acting in a manner that is inconsistent with the rights of the owner, a court would consider whether they have consciously interfered with the owner’s rights. It is a matter of determining whether the defendant has exercised control over the object with the intention of asserting dominion over it. This will normally be the case when someone purchases stolen goods for their own use. ^{Footnote 45} In contrast, a defendant will not be liable if he merely has physical possession of the goods but has no power to deal with them, as may happen when intermediaries transport or store goods. ^{Footnote 46} The courts have struggled at times to determine the liability of intermediaries. However, auctioneers and dealers who have carried out instructions from the apparent owners of goods to sell them have been held liable. ^{Footnote 47} This approach would have made good commercial sense in the nineteenth century when it was not uncommon for dealers to agree to buy goods that might be for their own purposes (to buy and then resell) or with the intention of acting as an agent for another. ^{Footnote 48}

The courts have been less willing to impose liability where the intermediary has not been directly involved in selling the object in question. In National Mercantile Bank v. Rymill, it was decided that an auctioneer was not liable because he had not effected a sale but had only introduced the seller to the purchaser. ^{Footnote 49} Similarly, in Marcq v. Christie Manson and Woods Ltd., the Court of Appeal held that Christie’s was not liable where, having innocently attempted and failed to sell a stolen painting, it returned the painting to the apparent owner. The claimant was the victim of the theft and sued Christie’s, arguing that it was guilty of conversion because it had asserted control over the painting by cataloguing it, offering it for sale, keeping it in its possession for five months, and having a contractual lien over it. However, Christie’s responded that it had not asserted dominion over the painting: it had not sold the painting and neither had it exercised its lien. ^{Footnote 50} Christie’s argument was accepted, and it was held that Christie’s was not liable for conversion where, having failed to sell the painting, it redelivered the painting to the person who it believed in good faith to be the owner. ^{Footnote 51} Lord Justice Tuckey, with whom Lord Justices Keene and Peter Gibson agreed, stated that Christie’s had, “in the event, merely changed the position of the goods and not the property in them.” ^{Footnote 52} Relying upon the decision in Marcq, one could argue that a museum that transfers a cultural object to another museum where it can be better displayed and enjoyed is merely changing the location of the object. Unfortunately, the recent decision in London Borough of Tower Hamlets v. London Borough of Bromley suggests otherwise. Indeed, it goes further and raises doubts over the wisdom of a short-term loan of a cultural object between museums (such as for a special exhibition) where the ownership history is unknown.

The Decision in Tower Hamlets

The question of whether lending a cultural object to a museum would be seen as an act of conversion was one among a number of issues that arose for decision in the Tower Hamlets case. ^{Footnote 53} The case concerned a dispute between two local authorities over the ownership of a valuable bronze sculpture created by Henry Moore in 1957. Moore drew on his wartime experiences in London in creating the sculpture. He sold it to the London County Council in 1962, believing that it would benefit Londoners. The sculpture was placed on the Stifford Estate in what is now the London Borough of Tower Hamlets. It was formally titled “Draped Seated Woman” but eventually became known affectionately as “Old Flo.” The background to the dispute between the two local authorities was that a now disgraced former mayor of Tower Hamlets declared in 2012 that the sculpture would be sold at Christie’s and the proceeds used to fund social housing projects. Bromley objected to the sale and maintained that the sculpture should stay in the public sector, safeguarded for the benefit of the people of London.

When the London County Council was abolished in 1965, its powers were transferred to the Greater London Council (GLC). When the GLC was abolished in 1986, its powers passed to the London Residuary Body before being distributed among various local authorities. Tower Hamlets assumed that it owned the sculpture because it owned the land on which the sculpture had originally been placed. One issue, therefore, was whether the sculpture was a fixture; if it was, Tower Hamlets would own it because it owned the land. However, Justice Norris ruled that the sculpture was a chattel. The ownership of the sculpture therefore depended upon an analysis of the statutory powers under which it had been acquired ^{Footnote 54} and retained ^{Footnote 55} to determine which local authority could claim ownership as successor in title to the London County Council. Norris J concluded that the relevant statutory powers were the ones concerned with providing works of art for the community as part of an arts education program (rather than the statutory powers available in connection with housing functions). He decided that title to the sculpture had passed from London County Council to the GLC, then to the London Residuary Body, and finally to Bromley.

But this was not the end of the story. When Henry Moore died in 1986, the local press described Tower Hamlets as the owner, believing that this was the case because of the location of the sculpture. Tower Hamlets accepted that this was the position, and, in 1992, it made arrangements for the sculpture to be restored after it was damaged by graffiti. In 1996, it lent the sculpture to the Yorkshire Sculpture Park for a three-year period. Neither the London Residuary Body nor Bromley made any objections. Indeed, the only reason for Bromley’s intervention more recently was to prevent Tower Hamlets from selling the sculpture and dissipating the proceeds. It was held that Tower Hamlets had acted inconsistently with the rights of Bromley as owner. Norris J explained that,

Norris J decided that the conduct of Tower Hamlets was deliberate and was sufficient to exclude Bromley from its use and possession of the sculpture. ^{Footnote 57} Since Bromley had not asserted its rights within six years by bringing an action in conversion, its legal title was extinguished by the Limitation Act 1980. ^{Footnote 58} As a result, Tower Hamlets owned the sculpture.

Norris J rejected Bromley’s argument that Tower Hamlets had not exercised any rights of dominion over the sculpture but had merely been safeguarding it. Bromley had relied upon Fouldes v. Willoughby, ^{Footnote 59} and Norris J noted that it had been held in that case that a “simple asportation of a chattel, without any intention of making any further use of it, was not sufficient to establish conversion.” ^{Footnote 60} But Norris J added that it was also clearly decided in that case that

Norris J added:

Norris J assumed that Tower Hamlets was acting for “its own purposes” and did not explore Bromley’s argument regarding safeguarding the sculpture and stewardship further. Yet, if one considers the conduct of Tower Hamlets during the events of 1992–2002, it is clear that it cared for the sculpture in the same manner as a museum curator would care for a sculpture in a museum collection. After the sculpture had been vandalized, Tower Hamlets liaised with the Henry Moore Foundation, which paid for its cleansing and replaced the plinth. It then lent the sculpture to the Yorkshire Sculpture Park, making the type of arrangement that, in this writer’s experience, is not uncommon between museums – the loan is free and one party pays for the costs of transport and installation costs (Tower Hamlets in this case) and the other party (the Yorkshire Sculpture Park) agrees to pay for the transport and installation costs upon its return. The Henry Moore sculpture is worth millions of pounds; any private individual or company who owned it might restore it in order to obtain a financial return, such as by selling it or leasing it. However, the evidence in this case suggests that Tower Hamlets was acting as a steward of cultural property, caring for this cultural object for the public benefit. It is clear that the Henry Moore Foundation would have taken this view; the foundation is a charity and would not have used its own charity funds to restore the sculpture and to pay for its insurance during the loan if Tower Hamlets was acting for private commercial purposes.

The judgment in Tower Hamlets reveals the difficulties of applying the legal principles in conversion to the actions of bodies that have public purposes and that may not be acting for commercial gain. Although Tower Hamlets was described by Norris J as acting for its “own purposes,” the reality is that the repair or restoration of a cultural object by a public body is carried out on the basis of its importance to the public. Recently, I discussed the judge’s reasoning at a workshop in London for museum curators. I was informed that museums will pay substantial sums of money towards the restoration of “orphan” objects when they are of sufficient cultural importance. The work will be done on the basis that the object deserves to be preserved for the sake of humankind and with a view to making it accessible to members of the public, both in this country and worldwide.

Norris J’s view that the restoration of a cultural object can amount to conversion is important because it now seems that museums that have repaired orphan objects will be viewed as having converted them; it may also mean that these museums may well have title to these objects due to the expiration of the limitation period. Unfortunately, this result provides little satisfaction to museum professionals, who desire certainty in dealing with their collections. Given that there are a large number of objects that may or may not be on loan, for which conditions may or may not have been attached, it is little comfort to know that a repair to an object in the past may end up being significant in providing a limitation period defense to any possible legal claim.

The most disquieting aspect of Norris J’s judgment is the ruling that the loan of a cultural object to the Yorkshire Sculpture Park amounted to a conversion. This ruling presents a significant dilemma for all museums and their governing bodies. If there is a desire to avoid committing a conversion of an object, then it would appear that museums should avoid lending objects to other museums for exhibition purposes where there are no acquisition records relating to these objects. But there are so many objects that lack acquisition records that this solution is impractical. Museums may very well choose to ignore the risk that they may be converting an object because it is a core value within the museum sector that collections should be accessible and enjoyed by all. ^{Footnote 61} The Charity Commission expressly encourages loans of cultural objects in order to promote public access. ^{Footnote 62} The national museums typically have tens of thousands of objects on loan to museums, other public bodies, and researchers. ^{Footnote 63} It is unsatisfactory to find a decision that affects cultural property management in which the real world of professional practice has not been taken into account.

The decision in Tower Hamlets might also be viewed as flawed in so far as it failed to fully discuss the reasoning in the case law as it might be applied to public bodies dealing with cultural property. In Hollins v. Fowler, Justice Blackburn suggested that,

Bromley would have had no objection to the Henry Moore sculpture being lent to the Yorkshire Sculpture Park, where it would be safe and where the public would enjoy it. Applying Blackburn J’s guidance, Tower Hamlet’s conduct could be justified or at least excused. In contrast, Bromley strongly objected to the proposed sale at a public auction where the sculpture was likely to be purchased by a private collector and where the proceeds of the sale would be spent on social housing. It is surely at this point, where Tower Hamlets could not justify or excuse its actions to the true owner, that there would have been a conversion. If so, Bromley was well within the six-year limitation period in bringing its claim.

There are certain key characteristics of conversion that are emphasized in the case law but which cannot be found in the case involving Tower Hamlets. The actions taken by a defendant must be such that the claimant is “deprived” of his property and that he is “excluded” from enjoying it. As Lord Nicholls stated in Kuwait Airways,

If a statue, painting, or other work of art or antiquity is lent by one museum to another, it is difficult to see how a claimant is “deprived” of it; the work of art or antiquity is there, ready to be reclaimed. In the meantime, it is accessible to the public, which in most, if not all, cases will be in tune with the true owner’s wishes.

The principle that the “use” made of the object must be adverse to the rights of the true owner can also be found in the earlier Fouldes case, upon which Bromley had relied. For example, Lord Abinger stated: “In order to constitute a conversion, it is necessary either that the party taking the goods should intend some use to be made of them, by himself or by those for whom he acts, or that, owing to his act, the goods are destroyed or consumed, to the prejudice of the lawful owner.” ^{Footnote 66} In the same case, Rolfe B expands on this point by asking: “[S]uppose I, seeing a horse in a ploughed field, thought it had strayed, and, under that impression, led it back to pasture, it is clear that an action of trespass would lie against me; but would any man say that this amounted to a conversion of the horse to my own use?” ^{Footnote 67}

The idea that the “use” made of the chattel must be in some way adverse to the rights of the owner is a difficult principle to apply to public bodies, such as local authorities or charities caring for works of art and other cultural property for the common good. The courts are accustomed to dealing with cases that involve determining whether the defendant has received a personal benefit by using or selling the property. ^{Footnote 68} For example, if a thief (A) takes a car belonging to another and then lends it to X, this will be a conversion by both A and X. It is easy to see why. The owner may need the car to transport him from one location to another, and the fact that the car is missing therefore deprives him of the opportunity to use it and forces him to pay to find some other way of travelling. But this reasoning cannot be automatically expanded into a principle that a loan in any circumstances will amount to a conversion.

The Impact of the Tower Hamlets decision

In Tower Hamlets LBC v. Bromley LC, ^{Footnote 69} there was a fresh hearing before Norris J in which Bromley sought his permission to appeal his decision regarding the conversion of the sculpture. Norris J refused permission, noting that Bromley wished to appeal on the basis that

I would suggest, in response, that the purpose of possession is relevant as an evidentiary tool in determining whether the claimant is being excluded from the enjoyment of his property. As Lord Nicholls stated in Kuwait Airways,

In the Tower Hamlets case, Bromley was arguing that Tower Hamlets had held the sculpture for a public purpose, enabling the public to have access to it. The fact that Tower Hamlets was not making decisions for its own benefit was arguably a factor that needed to be taken into account in determining whether Tower Hamlet had exercised sufficient dominion over the object to exclude the true owner (Bromley) from the enjoyment of its property. This aspect of the decision by Norris J has a potentially wide impact upon the whole of the museum sector. It would suggest that all museums dealing with orphan objects may be converting them by lending them to other museums. This is surely quite unsatisfactory, and the decision is not on all fours with established principles in the law of conversion.

Yet it appears that Norris J viewed his decision as one that was limited to an analysis of the statutory powers of local authorities. In rejecting the request for leave to appeal, Norris J stated:

Local authorities operate in accordance with a raft of legislation that governs them, some of which is commercial in character, ^{Footnote 73} while other legislation encourages local authorities to act to benefit their local communities. ^{Footnote 74} In 1959, the Court of Appeal decided, in Re Endacott, that the functions of local authorities were not charitable. ^{Footnote 75} Although the powers and duties of local authorities focus upon serving the local community, this is not enough to achieve charitable status. A body will only be charitable if it benefits the community in a way that the law regards as charitable. ^{Footnote 76} Local authorities have “public” purposes, but these are too vague and wide to fall within the narrow legal definition of charity. ^{Footnote 77} It could therefore be argued that the notion of “stewardship” is weaker when applied to local authorities because, unlike charitable museums, they are not currently under any statutory obligation to hold cultural property on trust for the benefit of the public.

However, museums controlled by local authorities are treated as “stewards” of cultural property in the same way as other museums by the Museums Association, the Arts Council England, and other public bodies. The Code of Ethics places severe restraints upon the sale of an object from a museum collection where a reason for the sale is to raise money. ^{Footnote 78} These restraints are designed to force the governing body (including a local authority) to demonstrate that it is acting for the public benefit. If the Code of Ethics is flouted, the museum may be stripped of its accreditation by the Arts Council for a lengthy period. This sanction will mean that the museum is ineligible to apply for public grants. When Northampton Borough Council sold the Egyptian Sekhemka statue at Christie’s in 2014 without complying with the guidance in the Code of Ethics, its museums were stripped of their accredited status. ^{Footnote 79} If “Old Flo” had been sold, Towers Hamlets would not have been subject to any sanctions because the sculpture was not part of a museum collection; even so, the Arts Council would no doubt have expressed its deep disappointment, and Tower Hamlets would have been criticized for treating a cultural object as a financial asset.

By the time that Norris J had handed down his judgment, the new mayor of Tower Hamlets had declared that Old Flo would not be sold. ^{Footnote 80} Bromley nevertheless attempted to obtain a review of Norris J’s decision, arguing that Tower Hamlets had not converted the statue either when it was restored or transferred on loan. The Court of Appeal will only grant permission to appeal a lower court’s decision if it considers that there is a reasonable prospect of success or if there is otherwise a compelling reason for an appeal to be heard. Norris J’s decision arguably did not reflect the finer nuances that one can find in decided cases concerning conversion, and it did not pay sufficient attention to the argument that Tower Hamlets was not acting as an owner but was merely caring for the sculpture in accordance with ethical norms applicable to stewards of cultural property. Consequently, one might have expected Bromley to have been given leave to appeal. However, the Court of Appeal rejected the application.

It is unfortunate that the legal principles to be applied in relation to the conversion of cultural property by public bodies has not been explored further. The decision in Tower Hamlets presents dilemmas for museums. In order to serve the public, museums are expected to lend objects from their collections for special exhibitions. They are also expected to repair them where appropriate. Yet, according to the decision in Tower Hamlets, these are acts of conversion. Equally, it is part of good collections management to dispose of unwanted items from collections, giving priority to transfers to other museums and, in particular, accredited museums. Yet it now seems clear that a permanent transfer to another museum would also be an act of conversion by the transferring museum, regardless of the fact that the museum did not intend to deny any rights of a third party that might exist. ^{Footnote 81}

As a result of the decision in Tower Hamlets, someone who has lent an object to a museum should be able to confidently assert that there has been a conversion of his property where it has subsequently been lent or transferred to another museum. The basis of the claim would be that these actions have interfered with his ownership rights. ^{Footnote 82} However, can a museum that has lent an orphan object (or repaired it) more than six years ago rely upon the Limitation Act 1980 to argue that the claimant’s action is now time barred? This should be the case. Even so, I would suggest that the decision in Tower Hamlets creates considerable uncertainty and may lead to litigation. This is why new legislation is needed that would allow museums to deal with objects with no acquisition records after they have been in the continuous possession of a museum for a specified number of years.

Loans for a Definite Period

A number of museums may have had objects transferred on loan many years ago, but whose owners cannot be traced. If the loan is for a stated period of years and this period has come to an end, the lender will be in breach of the loan agreement in failing to collect the object. There may be a contract clause that entitles the museum to dispose of the object as it thinks fit, but, even if that is not the case, a museum will eventually be entitled to dispose of it, ^{Footnote 83} provided that it has acted in a way that is “right and reasonable” beforehand. ^{Footnote 84} Admittedly, the law provides relatively little guidance on what conduct is reasonable because there are so many types of situation where a person ends up unwillingly in possession of an object (which could be a landlord, a mortgagee, or a storage company, for example). ^{Footnote 85} However, a museum that has given the owner a number of warnings and waited for a substantial period of time to elapse before finally disposing of the objects should be viewed as having acted reasonably. ^{Footnote 86}

Loans for an Indefinite Period

In contrast, museums are in an impossible position where loans have been made for an indefinite period, as has frequently occurred in the past. If the loan objects are given to another museum or destroyed, this will be a conversion. There is a statutory procedure for disposal of uncollected goods set out in the Torts (Interference with Goods) Act 1977, which might appear at first sight to be helpful. ^{Footnote 87} However, the procedure involves the service of notices for each uncollected object. The procedure is complex, not least because it appears that the notice bringing the loan agreement to an end must actually be received by the owner. ^{Footnote 88} It is therefore of little use to museums for this reason alone. It is also problematic in other respects. It is concerned with sales, enabling a purchaser to obtain a good legal title, whereas museums are keen to transfer objects to other museums where they can. And the object in question might not be easily sellable. The procedure seems to be geared toward commercial transactions, such as between a landlord and a tenant. Instead of using the notice procedure, a museum could choose instead to apply to the court for an order directing sale. ^{Footnote 89} However, this route is not popular because it may mean that certain information, such as the poor state of the museum’s entries in relation to loans, becomes a matter of public record.

Could a museum dispose of an object in the hope that it could rely if necessary upon the argument that it had acted as an “agent of necessity”? This defense has a narrow scope. It is only available if there is an emergency, and it is reasonable to dispose of the property, taking account of the interests of the owner and of the museum ^{Footnote 90} and if the museum acted in good faith ^{Footnote 91} and cannot find the owner or the owner refuses to respond with instructions. ^{Footnote 92} One difficulty is that the museum would need to show that there was an emergency in the sense of a real necessity to dispose of the object. ^{Footnote 93} Where an object could be seen as a threat to health (such as a stuffed bird containing arsenic), which was not covered by insurance, this might be viewed by the courts as an emergency. However, the scope of the defense of agency of necessity is uncertain.

If a museum has sold or transferred an uncollected loan object more than six years before any claim, could it rely upon the decision in Tower Hamlets to argue that, because the claimant failed to act for more than six years after the conversion, his title has been extinguished by the Limitation Act 1980? The answer will partly depend upon the terms of the original loan agreement, which might, for example, permit short-term loans. However, it is not clear that the museum could rely upon the decision in Tower Hamlets because, in that case, Tower Hamlets thought it had legal title to the sculpture when it arranged to lend it. In contrast, in relation to an uncollected loan, the museum will be aware that it has no legal title. Any sale might even be viewed as theft of the object, and thieves can never gain title to a stolen object. ^{Footnote 94} The law is therefore uncertain in relation to uncollected loans. Unsurprisingly, therefore, museums may feel forced to retain their uncollected loans forever. Although they would like to dispose of many of them, there seems to be no safe route to do so. A new statute is needed to give museums the power to dispose of objects that are unsuitable to be retained.

Objects Acquired in the Past

It is not uncommon for people to donate objects to museums anonymously, either by sending things through the post or simply leaving them at an unattended desk. Lay people, such as museum staff, may well assume that deposited objects have therefore been abandoned by their owners. This analysis is attractive; if someone abandons an object on someone’s land or in their buildings, the landowner (such as a museum) is entitled to deal with it as it pleases. However, it is only in rare cases that an object has been abandoned in the eyes of the law. An object that has been mislaid is not one that has been abandoned. ^{Footnote 95} In order to establish that an object has been abandoned, there would need to be evidence that the owner intended to give up his rights to the object and had physically relinquished it. ^{Footnote 96} The challenge will be to find evidence that shows that, on the balance of probabilities, the previous owner intended to give up all legal rights to the object and did not care who took possession and control of it. ^{Footnote 97} If the deposited object is of a type collected by the museum (such as a rare book left in the British Library), it is easier to infer that the owner intended to make a gift of it. Visitors to a museum may take great enjoyment out of engaging with its collections, and it may prompt them to donate something of their own as a gift in the hope of giving pleasure to others.

If a museum accepts a gift, it will be free to deal with it as it chooses. Although gifts can be made formally, by executing a deed of gift or by making a declaration of trust, this is not essential. Gifts can be made quite informally, ^{Footnote 98} by delivering an object ^{Footnote 99} with an intention to give. ^{Footnote 100} Where one person delivers an object to another person without any explanation, the courts will look objectively at the words or conduct to determine what that person intended. ^{Footnote 101} Thus, where an object has been delivered anonymously, either by being left in the museum or sent through the post, it should be easy to infer that the original owner intended to give the object to the museum and had done his best to deliver it. ^{Footnote 102} This is one situation where the position seems clear cut. The museum has accepted the gifts, and it is the owner; it is therefore free to remove and dispose of any unwanted objects.

A Dilemma for Museums: Objects Left by Mistake

Objects that have been deposited anonymously in recent times cause significant problems. One fear is that an object may have been left by mistake. If the museum simply assumes that it is a gift, which it can deal with freely, it would be an unconscious bailee. If so, the museum would not be strictly liable for conversion, but, as an exception to this general rule, it would only be liable if it could be shown that it was negligent. This principle was applied in AVX Ltd. v. EGM Solders Ltd. ^{Footnote 103} In this case, the claimants had returned a quantity of solder spheres, which they had purchased from the defendants. Unfortunately, the carriers mixed 21 boxes of capacitors belonging to the claimants with the spheres, and, after they were delivered, the defendants destroyed the whole delivery without making any checks. The defendants had been negligent because the capacitors were easy to distinguish from the solder spheres. Justice Staughton held that the defendants were liable to compensate the claimants for the value of the capacitors because an unconscious bailee owed a duty to care to ascertain that the goods were his own before destroying them. But the position is different where the bailee has acted with due diligence. In Robot Arenas Ltd. v. Waterfield, the claimant had left property on land that was purchased by the defendant. After making enquiries without success, the defendant destroyed the property because he wrongly assumed that it had been abandoned. Deputy Judge Edelman QC decided that if a possessor makes reasonabe enquiries and cannot discover if anyone owns the thing in question, he will not be liable for conversion to the true owner if he destroys it. ^{Footnote 104}

The decision in Robot Arenas gives some comfort to museums by suggesting that they are able to dispose of unwanted objects provided that they make reasonable enquiries before disposal to ensure that there has been no mistake. However, there is little guidance in relation to what checks should be made. Edelman QC thought that it would depend upon the circumstances; ^{Footnote 105} he suggested that the “more valuable (whether in monetary terms or as a personal item) the property might possibly be, the more … might reasonably be required.” ^{Footnote 106} There is no guidance regarding how long a museum must wait before disposing of the object. It may be the case that, if an object is small and easy to store, such as a small box containing jewelry or medals, the museum would be expected to keep it for quite a long period of time, while continuing to try to contact the owner. In contrast, if the object is hazardous in some respect (such as where it is infested with pests), it would no doubt be reasonable to dispose of it far more quickly.

A Dilemma for Museums: Refusal to Accept a Gift

A more significant dilemma for museums is that, even if there was an intention to make a gift, the museum must accept that gift before legal title will pass and it is able to deal with the object as the owner. This principle is illustrated by the decision in R. (Ricketts) v. Basildon Magistrates’ Court. ^{Footnote 107} In this case, Ricketts had appropriated items of clothing from bags deposited on the ground outside a British Heart Foundation (BHF) charity shop. Basildon Magistrates’ Court committed Ricketts for trial at the Crown Court on two charges of theft. Rickets appealed against this decision, arguing that he had taken property that had been abandoned; one cannot steal an object if it belongs to no one. A person can only be charged with theft if he dishonestly appropriates property “belonging to another” with the intention of permanently depriving the other of it. ^{Footnote 108} This argument was rejected by the Divisional Court. In regard to the bags left outside the BHF shop, it was held that the obvious inference was that an anonymous person had intended to make a gift and had done his best to deliver the bags. At the time that Ricketts took things out of the bags, the BHF shop had not taken the bags under its control and, therefore, could not be said to have accepted them. The bags therefore belonged to the person who was attempting to donate them. Ricketts could therefore be charged with theft because the items belonged to someone and were not ownerless.

One might assume that a museum would automatically accept any anonymously deposited gifts to enable it to deal with them as the owner. Unfortunately, it is not as simple as that. If a museum accepted a donation, then disposed of it a few months later, and this became known, there could be a public outcry. For example, the Combined Military Services Museum accepted a donation of medals and then sold them a few months’ later. When the donor discovered that the medals had been sold, she was horrified because the medals had been bestowed upon her father, and she had understood that they would be kept by the museum forever. This story was splashed across some national newspapers, and the museum was roundly condemned. ^{Footnote 109}

Museums now take great care when they receive offers of gifts for their collections. For example, Principle 2.2 of the 2015 Code of Ethics states that museums “[c]ollect according to detailed, published and regularly reviewed policies that state clearly what, how and why the museum collects.” Museums are now determined to avoid collecting objects that do not fit within their acquisitions policy or that will not be of interest to the public. If an object is offered and accepted, museums are increasingly ready to spell out to the donor that the object may be disposed of at a later date. Yet this type of conversation cannot occur where the donation is sent or deposited anonymously. A museum is not forced to accept a gift, but, if it does not, the object continues to belong to the benefactor. ^{Footnote 110} Unfortunately, this means that a museum that refuses to accept an object, attempts unsuccessfully to find the owner, and then disposes of it may be held liable in conversion if the true owner then brings a legal action. In short, museums are placed in an almost impossible position by the law in attempting to satisfy their ethical professional standards. In my view, new legislation allowing museums to obtain legal title to lent or deposited objects after a set period of time (as the Scottish Law Commission has suggested for Scottish museums) would be the best way to resolve the museums’ difficulties.