Gregor Fisken Ltd v Mr Bernard Carl
| Jurisdiction | England & Wales |
| Judge | Pearce |
| Judgment Date | 01 June 2020 |
| Neutral Citation | [2020] EWHC 1385 (Comm) |
| Date | 01 June 2020 |
| Docket Number | Case No: LM-2018-000138 |
| Court | Queen's Bench Division (Commercial Court) |
[2020] EWHC 1385 (Comm)
HIS HONOUR JUDGE Pearce
Case No: LM-2018-000138
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
LONDON CIRCUIT COMMERCIAL COURT (QBD)
Rolls Building.
Fetter Lane
London
EC4A 1NL
Mr William Hooper (instructed by ROSENBLATT LIMITED) for the Claimant
Mr Jeremy Cousins QC (instructed by DAVIS WOOLFE LIMITED) for the Defendant
Hearing dates: 5, 6, 9 and 10 December 2019
I direct that, pursuant to CPR PD 39A para 6.1, no official shorthand note shall be taken of this judgment and that copies of this version as handed down may be treated as authentic.
Introduction
This case arises from a contract (“the Agreement”) dated 18 October 2017 for the sale of a Ferrari 250 GTO (“the GTO”). Whilst the GTO has been delivered to the Claimant's order, its original gearbox numbered N2 (“the Gearbox”), which was not with the car at the time of delivery, has not. The Gearbox is currently with a Ferrari specialist in California, Canepa Group Inc (“Canepa”), held to the Defendant's order, subject to a court order obtained by the Claimant preventing its disposal.
The Claimant seeks an order that the Defendant secure delivery up of the Gearbox. The Defendant resists an order for delivery up, at least without the payment of a fee $500,000 (“the Fee”). He also seeks damages for loss of use of the Fee.
Background
The GTO is one of a small number of Ferrari 250 GTO Series 1 coupés. It is common ground that these are rare and valuable classic sports cars. By way of example, the Defendant refers in his statement to one being sold for $70 million. The purchase price in this case, $44 million, is an indication of their high value.
The Defendant purchased the GTO in 1997. In 2016, he marketed the GTO for sale through a Ferrari dealer, Talacrest. At this time, the Gearbox was not in the GTO. It seems that the Gearbox had been removed for repair and a replacement put in. The precise circumstances of this happening and the whereabouts of the Gearbox until it was confirmed to be in the possession of Canepa are not entirely clear. In any event, the absence of the original gearbox was declared during the negotiations between the Claimant and the Defendant.
The marketing for sale of the GTO came to the attention of Mr Gregor Fisken, a classic car dealer who, since 1997, has operated through the Claimant company. Mr Fisken and the Defendant had been involved in previous classic car sales.
Mr Fisken's evidence was to the effect that he was purchasing the GTO for a customer of his, a person introduced by an associate of Mr Fisken and another Ferrari dealer, Mr Joe Macari. Mr Macari operates through Joe Macari Car Company Limited.
On or about 18 October 2017, the Claimant and the Defendant entered in the Agreement. The Agreement defines the contracting parties as being, as “ seller”, the Defendant, and as “ buyer”, the Claimant “ as agent for an undisclosed principal.” The price of the GTO is stated to be $44,000,000. The document is signed by the Defendant and the Claimant. At this point in the document there is no repetition of the statement that the Claimant is acting as agent.
It should immediately be noted that an issue arises as to the terminology used in the Agreement. The phrase “agent for an undisclosed principal” is inherently contradictory — the fact of describing a party as an agent discloses the existence of a principal. The better phrase to use, where the fact that a party is acting as agent is disclosed but the identity of the principal is not is “agent for an unidentified principal.”
Section 7 of the Agreement deals with completion, title and delivery as follows:
“5.1 Completion of this sale (‘completion’) will take place immediately upon Seller notifying Buyer by email .. that Goodman Derick LLP, Solicitors for Seller have received in to their client account the Balance Price, whereupon title to and insurance risk in the GTO will automatically pass from Seller to buyer.
5.2 On signing this Agreement Seller shall forthwith deliver to Goodman Derrick LLP an executed Bill of Sale of the GTO in favour of Buyer in the form set out in the Schedule.
5.3 Seller and Buyer will reflect the passing of title by Goodman Derrick LLP forthwith after Completion delivering to Buyer the executed Bills of Sale for the GTO. Seller will forthwith after Completion procure the release of the GTO into the control of Buyer or his pre-notified collection agent.”
As for the Gearbox, the Agreement provides:
“7 The gearbox
7.1 As at the date of this Agreement, Seller does not have possession of the Gearbox, numbered N2, originally delivered with the GTO (the “Gearbox”).
7.2 Seller believes the Gearbox to have been delivered to and to be in the care and/or custody of Bruce Canepa of Canepa Design… Seller has corresponded with Canepa regarding the whereabouts of the Gearbox but Canepa has advised that they have not been able to locate it.
7.3 It is agreed that the purchase price reflects adjustments for a diminution in value caused by Seller's inability to deliver the Gearbox with the GTO.
7.4 In consideration of Buyer accepting the GTO without the Gearbox, Seller agrees to use his best efforts to recover and deliver up the Gearbox to Seller 1, as further described below.
7.5 Following Completion Seller will formally engage with Canepa and such other third parties as shall be necessary in an attempt to locate and recover the Gearbox.
7.6 If Seller recovers the Gearbox from Canepa, he will promptly turn the Gearbox over to Seller without additional compensation.
7.7 If Seller locates the Gearbox in the possession or ownership of a third party other than Canepa, he shall notify Buyer, provide his full cooperation to any efforts Buyer may undertake to recover the Gearbox and shall do so without additional compensation.
7.8 If the preparation of formal legal correspondence or the pursuit of litigation is required to secure the recovery of the Gearbox or compensation for its loss, the following terms shall apply:
7.8.1 If the Seller incurs legal costs in relation to the return of the Gearbox or related compensate, then Seller agrees not to incur more than USD$100,000 of legal costs without first obtaining Buyer's prior written consent to so, such consent not to be unreasonably withheld. Any amounts incurred in violation of this covenant will not be subject to reimbursement pursuant to Clause 7.8.3 hereunder;
7.8.2 If Seller incurs such legal costs, but fails to secure custody of the gearbox or compensation for its loss, then such legal costs shall be solely for the account of Seller or
7.8.3 If such formal correspondence or legal process secures a payment of compensation or court ordered damages are awarded, then such legal costs properly incurred in accordance with Clause 7.8.1 and evidenced to Buyer, shall be reimbursed to Seller from those proceeds.
7.9 If such formal correspondence or legal process secures a payment of compensation or court ordered damages are awarded then any such sum, after the reimbursement of legal costs described in Clause 7.8.3 above, shall be allocated
between Buyer and Seller equally, subject to a cap on the sums payable to Buyer under this Clause of USD$500,000 (five hundred thousand dollars).7.10 If such formal correspondence or legal process secures custody of the Gearbox then, Seller shall forthwith deliver the Gearbox to Buyer.
7.11 If such formal correspondence or legal process secures custody of the Gearbox then, in consideration of Defendant's services in locating and securing possession of the Gearbox, accepting the risk of unsuccessful litigation and sharing in the costs of successful litigation Buyer shall, upon being in receipt of the Gearbox, make a payment to Seller in the sum of USD$500,000 (five hundred thousand dollars) to compensate Seller for his efforts.
7.12 For the avoidance of doubt, nothing in this Agreement shall prevent Seller from taking whatever action he chooses against any third party (which specifically excludes Buyer) to procure the delivery of the gearbox or to recover any losses, claims and/or damages suffered by Seller not being able to deliver up the Gearbox pursuant to the terms of this Agreement.”
On the next day 19 October 2017, the Claimant entered into an agreement for the sale of the GTO to the buyer introduced by Mr Macari.
Subsequently it became apparent that the Gearbox was in Canepa's possession. The delivery up of the Gearbox and the liability for any fee in that regard have become the subject of this litigation.
The proceedings
The Claimant pleads a contract between it and the Defendant for the sale of the GTO contending that the Defendant was in breach of contract in failing to deliver up the Gearbox.
In the original Defence, the Defendant pleaded a contract between the Defendant and the Claimant as intermediary on behalf of “ an undisclosed principal.” The Amended Defence pleaded that the Claimant is described in the contract as “ agent for an undisclosed principal” and that “ the Claimant acted on behalf of a principal whose existence was disclosed to the Defendant, but whose identity was not.” The Claimant's entitlement to sue on the Agreement was denied. However, the enforceability of the agreement itself was not questioned. The Defendant pleaded that he had tendered the Gearbox by email at 09.24 on 21 February 2018, and by an email timed at 09.31 on the same day, the Claimant rejected the tendered performance, thereby repudiating the contract and entitling the Defendant to accept the breach and treat the Agreement as terminated. Alternatively, the Claimant is in repudiatory breach by denying the Defendant his entitlement to the Fee, a breach that the Defendant has accepted as terminating the...
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Table of cases
...114 Greenwood v Martins Bank Ltd, [1933] AC 51 (HL) ................................. 439, 443 Gregor Fisken Ltd v Carl, [2020] EWHC 1385 (Comm) ................................... 542 Grenzservice Speditions GesmbH v Jans (1995), 129 DLR (4th) 733, [1996] 4 WWR 362, 15 BCLR (3d) 370 (SC) .......
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Specific Performance: Chattels, Shares, and Payment of Money
...OR (3d) 661 (Gen Div). 37 See Fells , above note 2; Falcke , above note 2; Pusey , above note 3. See also Gregor Fisken Ltd v Carl , [2020] EWHC 1385 (Comm), speciic performance ordered of a contract to convey the gearbox of a rare car that had been included as part of the sale of the car, ......