Welcome Financial Services Ltd (Claimant/Appellant) v Nine Regions Ltd (Trading as Log Book Loans)
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Simon Brown QC |
| Judgment Date | 22 April 2010 |
| Neutral Citation | [2010] EWHC B3 (Merc) |
| Court | Queen's Bench Division |
| Date | 22 April 2010 |
| Docket Number | Claim No. 8QT53127 |
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISOIN
BIRMINGHAM DISTRICT REGISTRY
MERCANTILE COURT
ON APPEAL FROM THE WANDSWORTH COUNTY COURT
Before: His Honour Judge Simon Brown QC
Claim No. 8QT53127
Counsel for the Appellant: Kam Jaspal instructed by Cleggs, Nottingham
Counsel for the Respondent: Paul Joseph instructed Wiesmayers of Great Bookham
Introduction
The Appellant is a company which provides credit, including personal loans and car finance through hire purchase agreements.
The Respondent is a company which provides “no credit check” loans to individuals with a bad credit history secured against the debtor's vehicle, title to which is assigned to the Respondent by means of a Bill of Sale.
The Appellant appeals against the Order of District Judge Habershon sitting at Wandsworth County Court dated 7 th August 2009. By that Order, she granted a declaration that the Respondent was beneficially entitled to the proceeds of sale of the motor vehicle registration number P002 OCR held by British Car Auctions Limited and that the Appellant had no proprietary interest therein.
There are 9 other similar cases currently stayed pending this appeal.
The Appellant submits that the Learned Judge was wrong in law to find that the Respondent was a ‘private purchaser’ within the meaning of section 27(2) of the Hire Purchase Act 1964 as defined by section 29(2) of the Hire Purchase Act 1964.
Agreed Facts
The Appellant purchased the motor vehicle P002 OCR, a silver Ford Ka, on the 17th July 2007 from Bournemouth Motor Company (the Vehicle”). The Appellant entered into a hire purchase agreement for a total sum payable of £6,012 at 37.5 APR regulated by the Consumer Credit Act 1974 with a Miss Charli Scott of Flat 9, 35 Parkstone Road, Poole, Dorset BH15 2NG on the same day.
It was an express term of the agreement with the Appellant that “the goods will not become your property until you have made all the payments. You must not sell them before then”.
As is standard practice under such agreements, although title to the Vehicle remained with the Appellant, Miss Scott drove the Vehicle away.
Miss Scott subsequently, in breach of the terms of her agreement with the Appellant, entered into an agreement with the Respondent three days later on the 20 th July 2007 whereby she assigned the Vehicle to the Respondent pursuant to a Bill of Sale dated 20thJuly 2007 as security for a loan of £1286.06 at 347.6% APR.
Clauses 7, 8 and 10 of the Bill of Sale contained the following express terms: “that in case the Borrower shall make default in payment or in the performance of any sum under the Consumer Credit Agreement or be in breach of any obligation in it or in the performance of any covenant or agreement contained in this Bill of Sale and necessary for maintaining this security or if he shall do or suffer any matter of thing whereby he shall become a bankrupt or shall suffer the Vehicle to be distrained for rent, rates or taxes or if he shall not without reasonable excuse upon demand in writing by the Lender produce to it the last receipt for rent, rates and taxes or if execution shall during the continuance of this security have been levied against the goods including the Vehicle of the Borrower under any judgment at law then and in any such case it shall be lawful for the lender its servants or agents to the Borrower to seize and take possession of the vehicle from the property of the Borrower or from any public place, and to use reasonable and proportionate measures to seize and take possession of the vehicle from any other place.” [ Clause 7]
“If the lender has a right to seize the vehicle and wishes to do so, the lender will notify you before doing so by sending you the appropriate Default Notice and once the period has expired during which you can remedy any breach the lender and its agents may enter and remain on any premises owned by the borrower where the vehicle may be and if necessary break open doors and windows in order to obtain admission and take possession of the vehicle and take it away and after the expiration of 5clear days from the date of seizure may sell the vehicle by public auction or private contract on or off the premises. The Lender and its agents may also take reasonable and proportionate measures to seize and take possession of the vehicle from any other place.” [ Clause 8]
“The Lender shall be entitled out of the proceeds of any such sale to retain an amount equivalent to all sums due in accordance with the Consumer Credit Agreement and all other reasonable costs charges, payments and expenses incurred …“[ Clause 10].
The Bill of Sale was registered with the Supreme Court of England and Wales on the 29th July 2007.
It is common ground that, in accordance with their usual business practices, the Respondent registered its interest in the Vehicle on the HPI Limited (“the Register”) on the 20 th July 2007 and the Appellant registered its interest on the Register on the 23 rd July 2007.
Miss Scott defaulted on the terms of her loan with the Respondent. A default notice was served on her by the Respondent on s” October 2007.
The Vehicle was repossessed by Anglia UK, as agents for the Respondent, in or about November 2007.
The Vehicle was sold by British Car Auctions Limited, as agents for the Respondent, at an auction at their Blackbushe House for £3241.90.
The Law
The starting point is the principle of nemo dat quod non habet, namely no one can transfer a better title to goods than he himself possesses. Section 21(1) of the Sale of Goods Act 1979 provides:
“21.— Sale by person not the owner.
(1) Subject to this Act, where goods are sold by a person who is not their owner, and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by his conduct precluded from denying the seller's authority to sell.”
Section 27(2) of the Hire-Purchase Act 1964 (as amended by the Consumer Credit Act 1974 which repealed the majority of the 1964 Act save for Part III thereof) provides a limited statutory exception to the above general rule in the case of a disposition to a “private purchaser”:
“(2) Where the disposition referred to in subsection (1) above is to a private purchaser, and he is a purchaser of the motor vehicle in good faith without notice of the hire-purchase or conditional sale agreement (the “relevant agreement”) that disposition shall have effect as if the creditor's title to the vehicle has been vested in the debtor immediately before that disposition.”
Section 29(1) defines “disposition” as “any sale or contract of sale (including a conditional sale agreement), any bailment under a hire-purchase agreement and any transfer of the property in goods in pursuance of a provision in that behalf contained in a hire-purchase agreement, and includes any transaction purporting to be a disposition”.
Section 29(2) defines a “private purchaser” as follows:
“(2) In this Part of this Act “trade or finance purchaser’ means a purchaser who, at the time of the disposition made to him,carries on a business which consists, wholly or partly~—
(a) of purchasing motor vehicles for the purpose of offering or exposing them for sale, or
(b) of providing finance by purchasing motor vehicles for the purpose of bailing or (in Scotland) hiring them under hire-purchase agreements or agreeing to sell them under conditional sale agreements, and “private purchaser” means a purchaser who, at the time of the disposition made to him, does not carry on any such business.”
The term ‘private purchaser’ is used in...
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