CHEP is the largest hirer of pallets in Australia. So large, in fact, that when Bunnings Group, an operator of retail hardware stores, appropriated a large number of pallets for its own use, CHEP never had a shortage of pallets to meet its own needs. Bunnings was found liable for conversion because it knew that CHEP did not consent to the use of the pallets (unless Bunnings paid for them) and at all times had an immediate right to repossess them.

The interesting thing is the award of damages: CHEP suffered no actual loss from the conversion, but the NSWCA held that it was entitled to damages to compensate it for the loss of use of otherwise profitable property (assuming there had also been some use of the property by the wrongdoer). Such an award was, in the court’s view, a legitimate aspect of compensatory damages. No need to consider whether it was really a restitutionary award representing the wrongdoer’s profit (although one of the judges on the panel preferred to frame it in those terms): Bunnings Group Ltd v CHEP Australia Ltd, [2011] NWSCA 342.

[Link available here].