The High Court of Justice Business and Property Courts in Wales rejected the legal request of James Howell, in his suit against city of Newport in South Wales, to excavate a land fill site to recover a hard drive containing his public and private keys to access the storage of 8,000 bitcoin he had in 2013. Howell asserted 3 claims seeking to order the city of Newport to allow him to excavate the landfill:
(i) A proprietary restitutionary claim (paragraphs 46-50)
(ii) An equitable proprietary claim (paragraphs 51-54)
(iii) A claim for declarations that the claimant is the legal owner of the Hard Drive and all tangible and intangible property on it, together with either (a) an order for delivery up of the Hard Drive or (b) damages for its wrongful retention (paragraphs 55-58).
The Judge rejected each claim.
If the allegations are true, it’s a tragedy for Howell. Here’s how the Court described the allegations:
- For the purposes of the application I assume the following facts, which are averred in the particulars of claim. (Whether or not those facts are correct does not fall for my determination on this application.) On 15 February 2009 the claimant ran Bitcoin software for the first time at his home in Newport, South Wales. In early 2009 he was able to mine 8,000 Bitcoin, which “are currently located in their original wallet addresses” (particulars of claim, paragraph 9). The Bitcoin software created a “wallet.dat” file for the claimant containing a public and private key address, which was saved on an internal laptop hard drive (“the Hard Drive”). The private key, stored within the wallet.dat file, is the only information that can enable access to the claimant’s Bitcoin. The Hard Drive was 21⁄2 inches in size and black and silver in colour, and it had a white label, on which was black writing. The Hard Drive was owned and in the possession of the claimant. In 2010 the claimant placed the Hard Drive in a drawer located within his home office. (In his evidence he explains why he removed it from the laptop.) Thereafter he accessed the Hard Drive periodically, using a USB connector cable, because it contained not only the wallet.dat file but numerous other files, documents and photographs. The Hard Drive was fully operational and accessible. On 4 August 2013 the claimant had a clear-out from his home office, placing everything that he thought he did not need into two black bin- liner bags. In his drawers he found two hard drives: one was the Hard Drive, and the other was a blank hard drive that contained no data. He meant to throw out the blank hard drive, but instead he mistakenly picked up the Hard Drive and put it into one of the black bin-liners. He then left the two bin bags downstairs in his house and asked his partner at the time to take them to the landfill at the Site the following day after completing the school run. However, she said that she did not want to take the black bin bags to the Site and refused to do so. The claimant was not overly concerned at her refusal, because he decided that on the following morning he would check to make sure that he had put the correct hard drive in the bin bags.
- However, when he awoke at 9 o’clock the following morning he found that his partner had had a change of heart and had already taken the bin bags to the Site and manually deposited them into the general waste bins at the Site. In October and November 2013 the value of Bitcoin rose sharply and the claimant’s holding increased in value to approximately £9 million. (It is implied in the particulars of claim and expressly stated in his evidence that this increase in value of Bitcoin alerted the claimant to the need to check that he had indeed disposed of the correct hard drive.) The claimant first met with a local representative of the defendant (Mr Gwyn Jones, the Operations Manager) on 25 November 2013 to discuss the question of access to the Hard Drive. Thereafter he made repeated requests to the defendant for access to the Site in order to find and retrieve the Hard Drive, but these were largely ignored by the defendant. The claimant then set about securing investment and expertise to enable a team of experts to undertake a landfill excavation and recovery operation and in 2023 he began to advance his case formally to the defendant.