Moorgate Mercantile Company Ltd v Finch and Read
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DANCKWERTS,LORD JUSTICE ORMEROD,LORD JUSTICE WILLMER |
| Judgment Date | 28 March 1962 |
| Judgment citation (vLex) | [1962] EWCA Civ J0328-1 |
| Court | Court of Appeal |
| Date | 28 March 1962 |
[1962] EWCA Civ J0328-1
In The Supreme Court of Judicature
Court of Appeal
Lord Justice Ormerod
Lord Justice Willmer and
Lord Justice Danckwerts
Mr M. Miller (instructed by Messrs Gerald Samuels & Shine) appeared on behalf of the Appellant (Second Defendant).
Mr P. Goodenday (instructed by Messrs Nicholson, Graham & Jones) appeared on behalf of the Respondents (Plaintiffs).
LORD JUSTICE OHMEHOD: We shall not trouble you, Mr Goodenday.
I will ask Lord Justice Danckwerts to deliver the first Judgment.
This is an appeal from a Judgment of Judge Herbert in the Westminster County Court which was given by him on the 28th November, 1961. The subject of the dispute is a car, a Ford Zephyr, which was the subject of a hire purchase agreement. The Plaintiffs are a hire purchase company, and by an agreement dated 5th October, 1960 they hired, as owners, the car in question to a man called Brian Finch, who is called "George Finch" in the contract, but there is some suggestion in the evidence that his name was really "Brian". There are two Defendants: one is the said George, or Brian, Finch, who has not been served and has disappeared, and the Appellant, who is the other Defendant, Stanley Read.
I will deal with the terms of the hire purchase agreement so far as they are material later, but first of all it is necessary to state what happened, because the facts indeed are somewhat remarkable, as it seems to me. The vital day was the 23rd November, 1960, and on that day the car was on the premises of a Mr Eyles, who had a restaurant and a garage. The car had been brought there by Finch to have a new clutch fitted to it. While the car was still there the Defendant Read appeared at the restaurant and asked Eyles for the loan of a car for a short time. Eyles went to the garage, and apparently the only convenient car available was this car which was under hire purchase to Finch. Eyles asked Finch's permission to lend the car, without telling him to whom it was actually to be lent, but saying it was to be lent to a friend of his. Finch agreed, because apparently he was in a somewhat impecunious state and could not pay the amount due in respect of the repairs to the car, and therefore felt he could not very well object.
So Read took the car away, and what happened was that he proceeded to put in it 675 uncustomed watches - that is to say, Swiss watches which had not paid any duty - and unfortunately for him, when he went to a place which I think was his home, there were Customs men on watch and they caught him with the goods in the car. He pleaded guilty to the offence and went to prison. The car was forfeited under the provisions of the relevant Statute by the Customs and Excise authorities. The Plaintiffs brought this action against Read for damages for conversion, and the learned County Court Judge decided in the Plaintiffs' favour. From that Judgment the Defendant Read has appealed.
There are really three points which have been argued on behalf of the Appellant: First, that there was no conversion; secondly, that the provision upon which the Plaintiffs relied in the contract of hire purchase was not enforceable; and, thirdly, a point that was rather difficult to establish, I think, that Finch had some equity for relief against an unconscionable contract, and that because of that equitable right which Finch might have, the Plaintiffs were not entitled to claim the car or sue in conversion against the Appellant.
The first question is the question of conversion and depends upon whether the Plaintiffs had an immediate right to possession at the time when the car was disposed of in this way, and, secondly, whether any act of conversion was committed by the Appellant.
The relevant provisions of the hire purchase agreement are these: Paragraph 4: "The Hirer shall keep the vehicle in the Hirer's own actual possession and control". Then there are certain other provisions in the same clause, which goes on: and shall not remove it from the above or any other permitted address", (there is an address mentioned above in the "box" inthis particular form of contract), "without the previous written consent of the Owners" (who, of course, are the Plaintiffs, the hire purchase company) "who may by themselves, their servants or agents inspect it", and so on. Then among the other things which the hirer shall not do which are set out in paragraph 9, (b) is "use or permit the vehicle to be used for an illegal purpose or otherwise than for the purpose mentioned in Part 4 of the Schedule hereto", which in fact was left blank.
Then the most material clause is Clause 11, which is in these terms: "In case of any and every breach of any term or condition hereof the Owners shall forthwith without notice or demand become entitled immediately to recover possession of the vehicle: and, if they see fit, the Owners may: (a) Without prejudice to their claim for arrears of hire or damages for breach of this Agreement or any other rights hereunder and without notice repossess themselves of and remove the vehicle and/or (b) By written notice sent (by post or otherwise) to or left at the Hirer's last known address forthwith and for all purposes absolutely determine and end this Agreement and the hiring hereby constituted and thereupon the Hirer shall no longer be in possession of the vehicle with the Owners' consent nor shall either party thereafter have any rights hereunder but such termination shall not discharge any pre-existing liability of the Hirer to the Owners".
The first question to decide is whether what the Defendant Read did constituted a conversion. What he did, of course, was to go to the place where the car happened to be, to borrow it and then fill it up with the uncustomed goods, which conduct was likely to result in the consequence which indeed in fact happened, that the car was seized by the Customs authorities and sold. I think it is clear, and it seems to me to be an irresistible inference, that when he went to borrowthe car, he had already in his mind the intention of using it for the illegal purposes for which he did in fact use it, and I think that if he had not deceived the persons who were concerned with the car about his intentions - that is to say, Finch and Byles, the garage owner - if they had known he intended to use it for an illegal purpose they would not have allowed him to take it. But in any case it seems to me that the consequences of what he did resulted in a conversion of the car in question.
The learned County Court Judge cited a passage from Salmond 12th Edition. The latest edition is the 13th, and we have also been referred to the 11th, but the passage is the same in each of the editions, and it will be sufficient if I quote it as it appears on page 254 of the 12th Edition, under the heading, paragraph 73, "Conversion Defined": "A conversion is an act of wilful interference, without lawful justification, with any chattel in a manner inconsistent with the right of another, whereby that other is deprived of the use and possession of it. Two elements are combined in such interference: (i) A dealing with the chattel in a manner inconsistent with the right of the person entitled to it, and (ii) an intention in so doing to deny that person's right or to assert a right which is in fact inconsistent with such right".
What the Appellant did in fact was to take the car and use it in a way which...
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