Court to hear claim against council over ownership of £460m bitcoin wallet and access to old landfill where hard drive was dumped in error

A judge will today (3 December) hear a claim against Newport City Council regarding a hard drive containing passwords to a Bitcoin wallet worth more than £460m that was accidentally dumped in a council-run landfill.

The case is being heard by His Honour Judge Keyser KC at Cardiff Civil and Family Court.

The partner of the claimant James Howells, who mined 8,000 Bitcoins in early 2009, is said to have mistakenly discarded the 2.5-inch laptop hard drive containing the private and public key addresses necessary to access his Bitcoin funds.

The local authority has said it will “vigorously” resist the claim, describing Howells’ case as having “no merit”.

At its peak valuation in March 2024, the maximum valuation of 8,000 Bitcoin was recorded as £467,204,720.

Howells said he misidentified the hard drive and placed it in a bin liner during a clear-out, planning to dispose of the bag at the Newport Household Waste and Recycling Centre (NHWRC) the next day.

He asked his then partner to take the bin liner to the council-owned centre after the school-run, but she initially refused.

Thinking he would take the bin liner to the landfill himself the next day, he planned to double check the hard drives before heading to the centre.

However, when he woke up the next morning, he found that his partner had already returned from the school run to say that despite her previous reluctance, she had in fact taken the two black bin liners to the NHWRC.

Since then, he has repeatedly requested access to the landfill to retrieve the hard drive, offering to contribute 10% of the Bitcoin's value (estimated at around £50 million) to the Newport community if it is successfully recovered.

Howells first met with a representative of the council in November 2013 to discuss the issue.

He then made several requests to the council about obtaining access for the retrieval of his hard drive.

However, these requests were "only given minimal consideration and were largely ignored", the particulars of claim state.

Howells has since obtained investment, assembled a team of experts and put together an excavation plan.

Part of this process involved securing legal representation in 2023, leading to a formal request to the council in September 2023.

Responding to the September 2023 request, the council asserted that it is the legal owner of the hard drive as it had been deposited at the landfill.

It relied on the provisions of s. 14 (6) of the Control of Pollution Act 1974, which states: "Anything delivered to the authority by another person in the course of using the facilities shall belong to the authority and may be dealt with accordingly."

However, Howells asserts in his claim that:

• The provision was enacted to deal only with tangible property and not intangible property;
• The provision was enacted to deal with property that had knowingly, and with consent been taken to NHWRC;
• The hard drive was misplaced unintentionally;
• At no point did the claimant intend to abandon the hard drive or the intangible and/or intellectual property contained on it;
• It would be inequitable for this provision to apply to intangible and/or intellectual property contained on the hard drive;

He alleges that this means the council is not the legal owner of the hard drive in such circumstances as title to the hard drive has not passed despite the provision relied upon by the defendant, in the Control of Pollution Act 1974.

"By asserting ownership of the hard drive, the defendant has substantially interfered with the claimant's rights and has denied the claimant access to not only the tangible property of the hard drive, but additionally has deprived the claimant of his intangible property and his access to the same", the particulars of claim states.

Howells brings a common law claim in restitution on the basis that he has at all times retained superior legal title to (1) the tangible property the hard drive, and (2) to the intangible property contained on the hard drive.

He is seeking declaratory relief that:

• The claimant is the legal owner of both the tangible and intangible property of, and in, the hard drive;
• That the defendant be ordered to deliver up the same or alternatively, to enable access for the claimant to retrieve the hard drive; or alternatively to appoint a Court receiver to retrieve the same (at no cost to the defendant).

A spokesperson for Newport City Council confirmed that the council had been contacted multiple times since 2013 about the possibility of retrieving the hard drive.

It added: “The council has told Mr. Howells multiple times that excavation is not possible under our environmental permit, and that work of that nature would have a huge negative environmental impact on the surrounding area.

“The council is the only body authorised to carry out operations on the site. Mr. Howells’s claim has no merit, and the council is vigorously resisting it.”

Adam Carey