Moorgate Mercantile Company Ltd v Twitchings

JurisdictionUK Non-devolved
JudgeLord Wilberforce,Lord Salmon,Lord Edmund-Davies,Lord Fraser of Tullybelton,Lord Russell of Killowen
Judgment Date16 June 1976
Judgment citation (vLex)[1976] UKHL J0616-2
Date16 June 1976
CourtHouse of Lords
Moorgate Mercantile Company Limited

[1976] UKHL J0616-2

Lord Wilberforce

Lord Salmon

Lord Edmund-Davies

Lord Fraser of Tullybelton

Lord Russell of Killowen

House of Lords

Upon Report from the Appellate Committee, to whom was referred the Cause Moorgate Mercantile Company Limited against Twitchings, That the Committee had heard Counsel, as well on Monday the 5th, as on Tuesday the 6th, Wednesday the 7th, Thursday the 8th and Monday the 12th, days of April last, upon the Petition and Appeal of Moorgate Mercantile Company Limited whose registered office is at Moorgate House, 312 High Road, Tottenham, London N.15, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 18th of June 1975, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen in Her Court of Parliament, might seem meet; as also upon the Case of Alfred Twitchings, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 18th day of June 1975, complained of in the said Appeal, be, and the same is hereby, Reversed, and that the Judgment of His Honour Judge Dow of the 22d day of March 1974, thereby set aside, be, and the same is hereby, Restored: And it is further Ordered, That the Respondent do pay, or cause to be paid, to the said Appellants the Costs incurred by them in the Court of Appeal, and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Clerkenwell County Court, to do therein as shall be just and consistent with this Judgment.

Lord Wilberforce

My Lords,


This case arises out of a hire purchase agreement of a motor car, a type of transaction which has provoked much litigation in which hardship to individuals is frequently revealed. This is due to the perennial failure of English law to develop a proper method of charging movable property. The hire purchase agreement is an ingenious invention which has proved itself as a very convenient and economically stimulating method of financing sales of chattels. But by divorcing ownership (vested in a finance company) from possession (held by a dealer or private hirer), by permitting the latter to retain documents of title without any endorsement of the interest of others, and by not requiring registration, in an accessible register, of the agreement, it lends itself, almost ideally, to fraudulent dispositions. In order to reduce these risks the finance companies in about 1938 devised a registration machinery of their own, through a company called Hire Purchase Information Ltd. (H.P.I.) with which the great majority of hire purchase agreements are registered: but the system was neither compulsory nor universal, and there are some transactions which escape it. The present is one.


The appellant finance company, as owners, let a motor car on hire purchase to one McLorg. It was their intention, as it was their normal practice, to register the agreement with H.P.I. By some failure, which has not been identified, but which on the probabilities occurred within the appellants' organisation, the agreement was not registered. Consequently when the respondent, a motor dealer, who contemplated buying the car from McLorg, enquired from H.P.I. whether there was any hire purchase agreement registered or recorded against the car, McLorg having concealed it, he received a negative answer. (Some part was taken in this matter by the respondent's son, but it has been accepted that he acted for the respondent and that his enquiries are to be treated as made on behalf of the respondent). He proceeded with the purchase and resold the car. The appellants, learning of this, sued the respondent for damages for conversion and succeeded in the county court. The Court of Appeal, however, by a majority allowed the respondent's appeal: Geoffrey Lane L.J. dissented, and the majority decided as they did on different grounds.


My Lords, there are three possible bases upon which the respondent might succeed in resisting the appellants' claim. The first is by reliance upon the terms of the negative answer by H.P.I. to his enquiry. If the respondent can succeed in showing that this amounted to a representation that no finance company member of H.P.I. had any interest in the car and that this representation was made by H.P.I. as agent for the appellants, then, since he undoubtedly relied upon the answer, he could, on classical principles, raise an estoppel against the appellants. In plain language, the appellants, by reason of the representation made on their behalf, on which the respondent acted, would not be permitted to set up a state of facts—namely that they owned the car—contrary to the representation.


In spite of the persuasive judgment of Browne L.J. I regret that I cannot accept this contention under either branch. To constitute an estoppel a representation must be clear and must unequivocally state the fact which, ultimately, the maker is to be prevented from denying. The answer given by H.P.I. to the respondent's enquiry can not in my opinion bear the meaning for which the respondent must contend. It was simple and carefully drafted. Whether one considers the oral answer given on the telephone to the respondent's son or the written confirmation that followed—and I think the safe assumption is that these coincided, it was to the same effect that the car had not been recorded as being the subject of a credit sales agreement. This answer—perfectly correct in fact—has to be read in conjunction with the statement of the aims of H.P.I. which is contained in a booklet supplied for dealers' use. This contains the following:

"The conditions of issue of the books of vouchers are as follows:

1. All information supplied is given to the best knowledge and belief of H.P. Information Ltd., according to the information contained in its records. 2. H.P. Information Ltd. does not warrant or guarantee that it has a complete record of every vehicle the subject of a hire-purchase agreement or that it has a complete up-to-date record of those vehicles which were at one time but have subsequently ceased to be the subject of a hire-purchase agreement. 3. H.P. Information Ltd. does not accept liability for any action arising out of any information given."


It is quite clear that the answer given by H.P.I., both intrinsically and as it was understood by this particular motor dealer, conveyed nothing more than information as to the state of the records of H.P.I: it did not profess to and did not say anything as to the ownership or lack of ownership of any finance house member of H.P.I.


The same chain of reasoning answers the contention that H.P.I. in giving their answer were agents for the appellants. They were not. They were acting on their own account as suppliers of information to the trade. They set out to provide a service for dealers and others, and dealers paid them for their services. They did not profess to act, and were not understood to act, on behalf of finance company members. I am therefore of opinion that this first line of argument does not succeed.


The second possible contention is also based upon estoppel. It is that the appellants are estopped from asserting their ownership of the car by their conduct, i.e., by their negligent omission to register their agreement.


In a consideration of this argument it is first necessary to be clear as to what elements are necessary in order to validate a claim of estoppel, a question which requires to be answered in the light of the fact that what, on this argument, is relied upon as founding the estoppel is inaction or silence rather than positive conduct. English law has generally taken the robust line that a man who owns property is not under any general duty to safeguard it and that he may sue for its recovery any person into whose hands it has come (see Farquharson Bros. & Co. v. King & Co. [1902] A.C. 325 per Earl of Halsbury p. 332 and piu andante Lord Macnaghten p. 336). He is not estopped from asserting his title by mere inaction or silence, because inaction or silence, by contrast with positive conduct or statement, is colourless: it cannot influence a person to act to his detriment unless it acquires a positive content such that that person is entitled to rely in it. In order that silence or inaction may acquire a positive content it is usually said that there must be a duty to speak or to act in a particular way, owed to the person prejudiced, or to the public or to a class of the public of which he in the event turns out to be one. The necessity for this duty, particularly with regard to silence or omission has been stated in many authorative judgments too well known to need complete citation, for they were comprehensively reviewed by Lord Wright in Mercantile Bank of India Ltd. v. Central Bank of India Ltd. [1938] A.C. 287. Lord Wright says there:

"The existence of a duty is essential, and this is peculiarly so in the case of an omission …"


"The duty may be, in the words of Blackburn J." [in Swan v. North British Australasian Co. Ltd. 2 H. & C. 175, 182] ""to the general public of whom the person is one". There is a breach of the duty if the person estopped" (which I take to mean "sought to be estopped") "has not used due precautions to avert the...

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