Australian appeals court endorses third category of property for crypto

The Full Court of the Supreme Court of Tasmania has handed down a potentially influential judgment endorsing the view that Bitcoin is property and can be subject to the torts of conversion and detinue. In Poulton v Conrad [2025] TASFC 7, the Full Court endorsed the view (albeit obiter) that control over private keys is sufficient to establish that intangible property like Bitcoin can be 'possessed', and a third category of property for digital assets beyond choses in possession and choses in action.

Background

The dispute began with an action in the Magistrates Court arising out of an arrangement where the respondent, Conrad, paid the appellant, Poulton, A$10,000 to invest in Bitcoin on his behalf. The parties agreed that Conrad would pay a fee to Poulton but no agreement was reached as to the amount of that fee.

Conrad pleaded several causes of action (because although Poulton acquired the Bitcoin, he kept some of it as a fee for his service), including detinue, conversion or trespass to goods, restitution, contract and negligence.

Reasoning

The Full Court first considered whether Poulton could raise a new argument (that Bitcoin was incapable of possession) that he had abandoned in the earlier appeal before Brett J. The Court said he could not. Shanahan CJ explained that allowing Poulton to change his position would be unfair to Conrad who had relied on the case as it was previously argued, stating that '[t]here is no way back through the waters of the Lethe' (at [49]). Jago J agreed and the appeal was dismissed on that basis.

Estcourt J dissented but would have dismissed the appeal on the grounds that Bitcoin is susceptible to an action in tort for conversion or detinue which requires that the property be capable of possession. The judge's colleagues went on to endorse (albeit obiter) the view that the law of property must adapt to 21st century circumstances and that Bitcoin although an intangible asset is capable of possession via control of private keys.

Digital assets as a third category of property

The Full Court referred to the Magistrate’s reasoning that Bitcoin software restricts control of a holding to the person in possession of the relevant private key or PIN, and that these rights are definable, identifiable by third parties, capable of assumption by third parties and have some degree of permanence. This was found to satisfy the definition of property set out in National Provincial Bank v Ainsworth [1965] 1 AC 1175 (at [28]).

The Full Court discussed overseas authorities such as AA v Persons Unknown [2019] EWHC 3556, which held that cryptocurrencies are a form of property capable of being the subject of a proprietary injunction, and Henderson v Walker [2019] NZHC 2184, where the New Zealand High Court extended the tort of conversion to purely personal digital information including emails.

Estcourt J also cited the Victorian Supreme Court decision of Re Blockchain Tech Pty Ltd [2024] VSC 690 which dealt with the question of whether an interest in Bitcoin can be subject of a bailment. Attiwill J found that a person’s interest in Bitcoin is property but not a chose in possession (as intangible property is incapable of being physically possessed) and therefore cannot be the subject of a bailment.

Estcourt J disagreed with Attiwill J, stating that his Honour's conclusion (at [92]):

does not go far enough to meet the exigencies of the digital age and should not be followed as to the way in which Bitcoin should be characterised.'

Instead, Estcourt J agreed with Moore-Bick LJ in Your Response Ltd v Datateam Business Media Ltd (2015) 1 QB 41, stating that (at [93]):

[T]here is a powerful case for reconsidering the dichotomy between choses in possession and choses in action, and for recognising a third category of intangible property. Such a category in my view, would comprise property that is capable of assumption by third parties, that is rivalrous, that is capable of exclusive control, and that is susceptible of possession. As such it should be amenable to at least, the torts involved in the present case, namely, conversion and detinue. Bitcoin falls into such a category, and it should, in my view, be so regarded by this Court. (emphasis added)

In doing so, his Honour declined to follow the House of Lords’ decision in OBG Ltd v Allan [2008] AC 1 which had held that only choses in possession were capable of being possessed.

Jago J agreed with the reasoning of Estcourt J. Shanahan CJ agreed that Bitcoin was capable of being property and separately discussed whether Bitcoin was capable of possession, focusing on the idea that the central premise of possession is control (at [55]):

in the case of crypto currency that is represented by the relevant key or PIN. Those exclusive signifiers, whilst data, are contemporary avatars of the various means by which the common law recognises and secures proprietary rights, whether that be by occupation or other devices by which dominion is claimed over entitlements to wealth.

Conclusion

The case is yet another to confirm that Bitcoin is capable of being characterised as property. However, the Full Court diverged from the reasoning in Re Blockchain arguing that Bitcoin does not fit into either choses in possession or choses in action, instead seeking to recognise a third category of intangible property for digital assets (an idea also proposed by the UK Law Commission in their Digital Assets final report). The UK Parliament is reviewing legislation which would codify provision for a third category of property which could extend personal property rights to digital assets.

While the Full Court's views do not form part of its binding ruling, as the first appeals court in Australia to consider the question of whether cryptocurrency is property and, if so, what type of property, the decision in this case may prove influential particularly given the unanimous view seemingly shared by the Full Court. For the time being, the law on the question of whether cryptocurrency is a chose in action or in possession will remain unsettled. As new circumstances come before the Courts, they will need to grapple with these questions and the practical need to provide a remedy where a person is deprived of a valuable digital asset like Bitcoin.

Written by Steven Pettigrove and Emma Assaf