Deposit

An equitable lien is lost if the property is sold to ‘the bona fide purchaser for value without notice’. This person is known as ‘Equity’s Darling’ and he is protected from the application of any equitable interest in respect of the property he buys. He is the purchaser (i.e. for ‘valuable consideration’ – not a gift) of the property and has no knowledge nor reason to know of the equitable interest in respect of the property. At times a lien may arise in respect of certain circumstances by statute. In such a situation the particular statute will provide for not only the creation of the lien but also for its application and enforcement. This enforcement may often be the power of the lienor to sell the property concerned. For example (subject to the rule laid down by the Torts (Interference with Goods) Act 1977 Sections 12 and 13) a bailee may in certain circumstances sell the bailored goods. (A ‘bailee’ is someone who keeps goods in deposit and thus has possession of another person’s goods). The Sale of Goods Act 1979 provides a statutory lien in respect of a ‘contract of sale’ (i.e. where the goods are sold for money: Section 2) for the unpaid seller: Sections 41 – 43. Thus, the seller’s lien in contracts of sale of goods now depends entirely on the 1979 Act. Subject to certain conditions set out in the Act, the unpaid seller has a statutory power and the right of sale in respect of the goods: Section 48. A statutory lien for freight on landing goods arises in favour of a shipowner under Section 494 of the Merchant Shipping Act 1894. This lien, once having arisen, can only be discharged as set out in Section 495 of the Act.