Shogun Finance Ltd v Hudson
| Jurisdiction | England & Wales |
| Judgment Date | 28 June 2001 |
| Neutral Citation | [2001] EWCA Civ 1000 |
| Date | 28 June 2001 |
| Court | Court of Appeal (Civil Division) |
Court Of Appeal
Before Lord Justice Brooke, Lord Justice Sedley and Lord Justice Dyson.
Hire purchase - car fraudulently obtained by forging signature on agreement - subsequent innocent purchaser did not obtain good title to car
The innocent purchaser of a motor vehicle from a rogue who had obtained it fraudulently by signing a hire-purchase agreement with a forged signature, did not obtain good title to it.
The Court of Appeal so held, Lord Justice Sedley dissenting, in a reserved judgment when dismissing the appeal of the defendant, Norman Hudson, against the decision of Mr Assistant Recorder D. E. B. Grant on January 13, 2000, in Leicester County Court giving judgment for the plaintiff creditor, Shogun Finance Ltd, for Pounds 18,374.52 in its claim for, inter alia, damages for conversion of a Mitsubishi Shogun SWB, which Mr Hudson had purchased from a rogue in June 1996.
The rogue purchased the car from a dealer in Leicester, producing a genuine but stolen or unlawfully obtained licence in the name of Durlabh Patel. After the plaintiff made a credit search which was acceptable and having accepted the forged signature on the form of the agreement, the dealer accepted a 10 per cent deposit for the agreed price of Pounds 22,250 from the rogue, who subsequently sold the car to the defendant purchasing in good faith for Pounds 17,000.
Mr Jeremy Cousins, QC and Mr Nicholas George for Mr Hudson; Mr George Bompas QC, and Mr Sunil Iyer for Shogun Finance.
LORD JUSTICE SEDLEY, dissenting, said that it might seem remarkable that the law governing the consequences of a fraud as common as the present was still in doubt.
The effect of section 27 of the Hire Purchase Act 1964, as substituted by paragraph 22 of Schedule 4 to the Consumer Credit Act 1974, was that a person, who in good faith bought a car from someone who turned out only to have it on hire purchase, obtained a good title.
The law was reviewed by the Court of Appeal in Lewis v AverayELR ((1972) 1 QB 198, 205-207) but, in his Lordship's view, the state of the law was still unclear.
There were strong reasons why the plaintiff should be made to bear the loss: it accepted the rogue was the true holder of the licence, gave him finance on the basis of that and of a credit check which showed no judgments or debts registered against the licence holder and verified his address, but it had no good reason to be confident it was...
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