Stig of the Dump meets crypto: how one hard drive ended up in legal landfill
“Stig of the Dump” was a popular 1963 children’s novel by Clive King, where a boy discovers (and befriends) a caveman living in an old chalk pit. In Howells v Newport, our modern-day protagonist did not befriend a caveman, but rather faced the more terrifying prospect of a local council operating a landfill site. Mr Howells’ misfortune came from accidentally throwing away a laptop hard drive that he said contained access codes (or a “private key”) to Bitcoin now worth over GBP 600 million (USD 730 million). When his pleas to excavate the landfill to find his crypto treasure were denied by the local council, the matter led to litigation.
Background
Mr Howells mined Bitcoin in 2009 and stored the “wallet.dat” file (which held his private key) on a laptop hard drive. In August 2013, he mistakenly disposed of the hard drive at a landfill operated by Newport City Council, which by law collects and disposes of household waste. When he realised the hard drive was missing—and that the Bitcoin value had soared—he asked the Council for permission to excavate. The Council refused, citing environmental, permitting and public safety concerns.
Mr Howells brought a claim seeking a declaration that he owned the hard drive and the digital property on it, together with an order that the Council deliver or permit him to retrieve it, or alternatively, an order for damages equalling the Bitcoin’s value.
The English High Court’s decision
The English High Court struck out (and in the alternative, granted summary judgment against) Mr Howells’ claim. At its heart lay s 14(6)(c) of the Control of Pollution Act 1974, which states that anything delivered to an authority’s waste-disposal facility “shall belong to the authority and may be dealt with accordingly.”[1]
In the Court’s view:
- Once the hard drive entered the landfill, it became the Council’s property by operation of statute.
- Mr Howells’ arguments of “retaining equitable ownership” or “constructive trust” could not override the clear statutory mandate.
- Even if there were some question of unconscionable retention, any such claim would have been time-barred and, in any event, the Court saw no moral or legal basis to compel the Council to embark on a hazardous and expensive recovery operation.
The upshot was that Mr Howells was left without any legal remedy against the Council. In the Court’s eyes, the hard drive was gone—at least, gone as far as private property rights were concerned.
The Cayman statutory regime
Were a similar conundrum to arise in the Cayman Islands, the outcome could differ because of the divergence between the specific statutory regimes for refuse management.
It may be that the government would be incentivised to excavate, noting that s 54(2) of the Public Health Act provides that the responsible public official may “sell refuse removed from any premises or other place” and provides that the proceeds of any such sales shall be paid “into the Treasury”. Equally, the Cayman equivalent of Mr Howells may be prepared to take the risk of going treasure hunting, noting that, whilst it is a criminal offence, the penalty under s 54(3) of the Public Health Act for sorting out or disturbing material deposited by the Government in landfill is limited to a one hundred dollar fine.
Whether the Cayman statutory regime would be interpreted to have the effect of extinguishing personal property rights is certainly up for debate. However, the Cayman court is likely to find English judgments on issues of the ownership of digital assets persuasive, and therefore this decision of the English court offers interesting guidance on how statutory wording can trump creative arguments about intangible assets[2].
Key takeaways
- Property v information: In Howells v Newport, the “Bitcoin” were never physically inside the landfill; it was only the hard drive containing the private key that landed there. The Court underscored the distinction between a digital key (merely information) and the actual cryptoasset (which sits on the blockchain).
- Statutory ownership of waste: Waste legislation in England (and in many other jurisdictions) vests ownership of deposited refuse in the relevant state authority. Understanding this principle is essential for clients navigating disposal or recycling disputes, including those involving digital devices. More widely, an appreciation of the nuances of applicable statutes, however niche, is essential in any dispute.
- Hazards of DIY disposal: This saga highlights the stark risks of mixing cryptocurrency (or wider information technology), and waste disposal. Far from being purely theoretical, it can lead to million-pound mistakes—showing the need for robust document and device retention and destruction policies.
Whether it be the original carefree caveman rummaging in a chalk pit or the more modern hapless crypto-holder scouring a landfill, “Stig of the Dump”, is a story that underscores the importance of knowing what you’ve thrown away—and who owns it thereafter. Appleby’s dedicated digital asset team is well-versed in advising on how local (and cross-border) laws might affect crypto holdings, including insolvency or liquidation issues involving intangible assets.
[1] www.legislation.gov.uk/ukpga/1974/40/section/14
[2] See generally the analysis of Doyle J in Re HQP Corporation Ltd (in Official Liquidation) (unrep, FSD 109 of 2021 (DDJ), 7 July 2023) at [6]-[38], and the Appleby article on this decision here: www.applebyglobal.com/publications/re-hqp-corporation-limited-in-official-liquidation-a-lifeline-for-unredeemed-investors-in-cases-of-substantial-corporate-fraud/
