Barber v NWS Bank Plc
| Jurisdiction | England & Wales |
| Judge | Sir Roger Parker,Lord Justice Peter Gibson,Lord Justice Kennedy |
| Judgment Date | 17 November 1995 |
| Judgment citation (vLex) | [1995] EWCA Civ J1117-8 |
| Docket Number | QBENI 93/1773/E |
| Court | Court of Appeal (Civil Division) |
| Date | 17 November 1995 |
[1995] EWCA Civ J1117-8
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Before: Lord Justice Kennedy Lord Justice Peter Gibson Sir Roger Parker
QBENI 93/1773/E
MR. N. STRAUSS QC & MR. D. WALBANK (Instructed by Messrs Slaughter and May, 35 Basinghall St, London, EC2V 5DB) appeared on behalf of the Appellant.
MR. IAN MILLIGAN QC & MR. M. WOOD (Instructed by K. M. Cook, City Road, Chester X, CH99 3AD) appeared on behalf of the Respondent.
Sir Roger Parker:-
On or shortly before 10th October 1989 Mr Barber, the appellant, saw and test drove a Honda Accord Car, Registration No E320 WHC then in the possession of and apparently owned by Kestrel Garages (Eastbourne) Ltd ("Kestrel"). He decided to buy it.
A cash price of £7995 was agreed, of which an initial deposit of £3800 was to be satisfied by the acceptance of Mr Barber's Audi Car in part exchange. The transaction was to be and was carried out by the familiar mechanism of a sale by Kestrel to a finance company, in this case the Respondent, NWS Bank plc ("the Bank") and the Bank then agreeing to sell to Mr Barber on the terms of a conditional sale agreement regulated by the Consumer Credit Act 1974 ("the Agreement"). This provided, inter alia, that Mr Barber should pay the balance of the cash price within ten days of the making of the agreement whereupon the property in the car would pass to him, but that he should have the option of deferring payment. If the balance was not paid within that time Mr Barber would be deemed to have exercised the option and the passing of the property in the goods would then be subject to Clause 6 of the Agreement.
That Clause provided:-
"Upon the Customer duly paying to the Company the said Balance of the total cash price and all other sums (if any) payable by the Customer hereunder the property in the Goods shall pass to the Customer but until such time the property in the Goods shall remain vested in the Company."
Mr Barber did not pay the balance of the cash price within 10 days but duly paid the instalments of purchase price and interest provided for by the agreement until 2nd May 1991. He was then in difficulty meeting the instalments and decided that he would like to sell the Honda, purchase a cheaper car and pay off the Bank out of the proceeds. He asserts, but it is not accepted, that he enquired of the Bank whether he could do this and was told it was in order.
On the 25th May Mr Barber was made an offer for the Honda by a garage called Lewis Road Car Sales. Having thought it over he decided to accept it. On the 28th May he telephoned the garage with the intention of accepting it only to be told that there was a prior finance agreement with monies outstanding and that no dealer would touch it.
Mr Barber then left it to his wife to make enquiries. After ascertaining that the prior agreement appeared to be with Mercantile Credit Company Limited (Mercantile Credit) she handed the matter over to Solicitors, Slaughter & May, who, by letter to the Bank dated 10th June 1991, sought clarification. After considerable delay the Bank replied on the 10th July in the following terms:
"Notification was received from HPI Plc as to registration of a prior interest in the vehicle by Mercantile Credit Company Limited and I am awaiting clarification from them as to their interest but to date, they have failed to reply to my letter of 12th February 1991 in relation thereto.
The vehicle was supplied to my client by Kestrel Garages (Eastbourne) Limited but the copy Hire Purchase Agreement provided by Mercantile Credit Company Limited is in the name of Car Comfort Hire Limited and no explanation has been provided therefor.
The number of the agreement at Mercantile Credit is 03/5806 9345–6 and their reference SD/ SB90111443SB.CAD2 is dealing with this matter.
I note that there are arrears under the agreement with your client in the sum of £769.33 and I must request his reasonable proposals for settlement thereof failing which, I will have no alternative but to enforce the agreement against him without further reference."
This letter is revealing. It makes it clear that the Bank already knew by 12th February 1991 of the fact that Mercantile Credit had registered a prior interest but had apparently done nothing about it. It also makes it clear that, prior to 12th February, it had obtained from Mercantile Credit a copy of the prior Hire Purchase Agreement from which it would have known from whom Mercantile Credit had acquired the car and that the hirer under that agreement was Car Comfort Hire Ltd (Car Comfort).
In these circumstances the last paragraph is, to say the least, surprising.
At this point I interrupt the chronology to mention that it later emerged that the first registered keeper of the Honda was a Mr Williams, that Mr Williams owned and controlled both Car Comfort and Kestrel and that both these companies operated from the same address. Whether NWS was aware of any of these facts is not known but it could not have been difficult to find them out.
Slaughter & May sought further explanation from the Bank and, when none was forthcoming, wrote on 16th August 1991 rescinding the Conditional Sale Agreement. The relevant paragraph reads:-
"On the grounds that you do not have title to the vehicle today, we rescind this contract on behalf of our client, as there has been a total failure of consideration. We ask that you return all the instalments paid by Mr Barber to date. He will put the car at the disposal of the true owner."
On 21st August the Bank replied saying, inter alia, that the rescission was not accepted and that the claim for a refund of the deposit and instalments would be strenuously defended.
Further correspondence ensued in which, on the 2nd September, the Bank stated that, without admitting the claim of Mercantile Credit, they had paid it in full.
On the 25th September the Bank served on Mr Barber a default notice under S.87(1) of the Consumer Credit Act. This concludes the essential background.
On the 9th October 1991 Slaughter & May issued a Writ on behalf of Mr Barber claiming, inter alia, a declaration that the Conditional Sale Agreement had been validly rescinded by their letter of 16th August and the return of all monies paid thereunder as monies paid upon a consideration which had wholly failed.
Pleadings followed in which the Bank counter-claimed delivery of the Honda, arrears of £1522.17 and interest. Thereafter, by Summons under R.S.C. Order 14A issued on 16th July 1992, Mr Barber sought the determination of five questions of law and construction.
They were:-
1.Whether it was an express and/or implied condition of the agreement that the Defendant was at the date of the agreement the owner of the motor car the subject of the said agreement.
2.Whether it was an implied condition of the agreement that the Defendant was at the date of the agreement entitled to give the Plaintiff an option to purchase the said motor car. (We gave leave to amend this question so that the option was described as "an option to complete the purchase of the said motor car at any time.)
3.Whether the Defendant's inability at the date of the agreement to say with certainty that it would have the right to sell the motor car at the date when property in the motor car was to pass to the Plaintiff was a breach of the condition implied under section 12(1) of the Sale of Goods Act 1979 that "NWS Bank PLC will have a right to sell the motor car at the time when the property is to pass".
4.Whether in the events that have happened the Plaintiff was entitled, as he purported to do by letter dated 16th August 1991, to rescind the agreement and to demand repayment of all monies paid to the Defendant thereunder.
5.Whether in the events that have happened the default notice referred to at paragraph 15 of the Amended Defence and Counterclaim herein had its intended or any effect.
The summons was heard by Master Creightmore who, by Order dated 8th March 1993, ordered that Questions 1, 2 and 4 be answered in the affirmative, that Question 5 be answered in the negative, that Mr Barber be at liberty to sign judgment for £6850.58 (being the total of deposit and instalments paid) and for damages and interest to be assessed and that the Bank pay Mr Barber's costs in any event.
The Bank appealed and the appeal was heard by Sir Gervase Sheldon, sitting as a Deputy Judge of the High Court, on 23rd April 1993. He ordered that the appeal be allowed, that the Master's Order and any judgment pursuant thereto be set aside, that all monies paid by the Bank thereunder be refunded forthwith, that Mr Barber's claim be...
To continue reading
Request your trial
-
Giedo Van Ger Garde BV v Force India Formula One Team Ltd (formerly Spyker f1 Team Ltd (England))
...(see Rover International Limited v Cannon Film Sales Limited [1989] 1 WLR 912, Warman v Southern Counties Car Finance [1949] 2 KB 577, Barber v NWS Bank [1996] 1 WLR 641 at 646G and Baltic Shipping v Dhillon [1993] 176 CLR 344. Second benefits under the Fee Agreement are to be disregarded. ......
-
Mizuho Corporate Bank Limited v Woori Bank
...AC 191, Lombard North Central Plc v Butterworth [1987] QB 527, Bunge Corp v Tradax Export SA [1981] 1 WLR 711, Barber v NWS Bank plc [1996] 1 WLR 641 and BS & N Ltd v Micado Shipping Ltd [2001] 1 Lloyd’s LR 341. Similarly, I failed to see how the breach of the 51 days clause goes to the ‘ro......
- Freeman v Walker