Wickham Holdings Ltd v Brooke House Motors Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DANCKWERTS,THE MASTER OF THE ROLLS |
| Judgment Date | 08 November 1966 |
| Judgment citation (vLex) | [1966] EWCA Civ J1108-2 |
| Court | Court of Appeal |
| Date | 08 November 1966 |
[1966] EWCA Civ J1108-2
The Master of the Rolls (Lord Denning)
Lord Justice Danckwerts and
Lord Justice Winn
In The Supreme Court of Judicature
Court of Appeal
From Mr Justice Penton Atkinson
MR D. DRAYCOTT, Q.C. and MR JOHN BAKER (instructed by Mesere Beach & Beach) appeared as Counsel for the Appellants.
MR PETER SHERIDAN (instructed by Messrs Montagu's and Cox & Cerdale) appeared as Counsel for the Respondents.
In October 1964 Mr Pattinson got a Rover 3 litre on hire purchase from a Finance Company called Vickaa Holdings Ltd. The cash price of it was £894. The finance charges wam £854. the option f £1. So the total hire purchase price was £869. He paid £234 each down, He had to pay the balance over the Host twelve months at £54. 10s.0d. a moth, the first instalment being on the 28th November, 1964. The hire purchase agreement had all the usual clauses on the book. Mr Pattinson paid the first seven months instalments quite regularly up to the 28th May, 1965, amounting to £381.10e.0d. So altogether he had paid £234 cash down and £381. 10s.0d, Instalments, making £615.10o.0d. on this Rover car out of a total hire purchase price of £889. So he had paid three-quarters of the price: and was well up to date.
Early in June 1965 Mr Pattinson thought he would trade the Hover in for another car. He went to a firm of dealers called Starnes Motors, who were owned by Brooke House Motors Ltd. On the 11th July, 1965, these dealers telephoned to the Finance Company and asked then what was the "settlement figure" for the Rover. The Finance Company said that the amount required to complete was £274.l.0d., but they would accept £270 for settlement within days. She Finance Company confirmed it is writing to the dealers saying: "Res-D.E. Pattinson, Rover - 9789 PU. We confirm our telephone conversation that the amount required to complete the above account is £270, providing this sum is received within the next seven days", On receipt of this information, the dealers entered into a transaction with Mr Pattinson. They let him have another car and accepted this Rover car in part exchange, tasking him an allovance for it. They did some repairs to the Rover costing £50, and later sold it. But meanwhile the dealers had made an unfortunate mistake. They had intended to send the £270 to the Finance Company within the seven days. But they overlooked it. They mislaid the latter from the finance Company and never sent the £270. Itappears that director was on holiday. They were very rushed and forget all about it.
The Finance company soon found out what had happened: and they determined to take advantage of it. They claimed that Mr Fattinson, by selling the Rover to the dealere, had broken their hire purchase agreement; and they were entitled to take the car. On the 23rd July, 1965, they wrote to Mr Pattinson saying: "From information received it would appear that you have disposed of our vehicle and as this is h of our agreement we hereby give you formal notice terminating the hiring". On the 2nd September, 1965, they sent along sons "car snatchers" to the dealers to try and get the car. But of course it had gone. The dealers had resold it. Then for the first time the dealers - realised their mistake. They telephoned the Finance Company and offered £270, and sent a cheque for that sum. The Finance Company refused it. The dealers asked: "What do you want?". The Finance Company replied: "The car or its trade value". A few days later the dealers offered not only the £270 but £15 or £20 more, but the Finance Company refused to accept it. On the 16th September, 1965, the Finance Company issued a writ against the dealers claiming the return of the Rover car, or its value, and damages for its detention. The dealers offered £274.108,0d. and paid it into Court.
The Judge held that the ear belonged to the Finance Company: and that they were entitled to its trade value as at the date of judgment £415 less the £50 which the dealers had expended for repairs, making £365. Then he added £75 damages for detention. Together the total sum he awarded was £440. The dealers appeal to this court and say that the Finance Company should only recover the £274. 10s.0d.
The case raises the important questions what is the proper measure of damages when the hirer resells the cer? The Finance Company rely on this clause in the hire purchase agreements: "That neither the option of purchase, nor any other rightsor Interests under this agreement, nor the vehicle or any therein, shall be disposed of or be assignable on the part of the hirer or by anyone under him, and any assignment or dispsition or attempted assignment or disposition of the same shall he void, and shall render nugatory and absolutely determine the hirer's rights under this agreement", The Finance Company say that, when Mr Pattinson traded in the Rover car to the dealors (without the £270 having been paid in settlement), his rights in the agreement and in the car automatically determined: that thenceforward the car belonged absolutely to the Finance Company without any rights in Mr Pattinson or anyone else: and that accordingly they can recover the car or its full value. It does not matter that they had already received £615.lGs.0d. (three quarters of its value). They can, they any, recover its full value as damages in detinue or in conversion, without giving any credit for what they have already received.
The dealers any first that the Finance Company waived the clause forbidding assignment. They rely on the practice in the trade which they state in the pleading: "Further that notwithstanding any alleged terms purporting to restrict the rights of the said Derek Edward Pattoison to part with possession of the car, that it is, and has for as long as the devices of hire purchase agreements have been in operation, a recognised mercantile practice for persons in positions stellar to the said Pattinson to sell their cars subject to the payment by the purchasers of outstanding charges. Further it is a recognised mercantile practice for purchasers to telephone finance houses and acquaint then with the fact of a sale and obtain by telephone what is called settlement figure' which is the amount due to such finance houses, less a rebate tor rn of speedier payment than is in the agreement provided". That practice was admitted by the Finance Company in their Reply. The dealers say that on the faith of this practice and their telephone conversation of the 11th Juno, 1965, and the letter, they bought the car fromMr Pattinson: and that this amounted to a binding or l. I have some doubt about this. If there mm any , it was conditional on the money being paid, namely, £270 within seven days, or £274.10e.0d, within a reasonable time. No such sum was paid or tendered within due time.
Even so, there remains the important question: what is the proper measure of damage? It is a familiar situation. The hirer of a motor car, who has got it on hire purchase wrongfully. sells it to seasons else. The hiring is thereupon automatically determined. The Finance Company claims the return of the car and damages for detention or, alternatively, damages for conversion. In such a case the Finance Company is my opinion is not entitled to the full value of the car. She Finance Company is only entitled to what it has lost by the wrongful act of the defendant. I am well aware, of course, that prima facie in conversion the measure of damages is the value of the goods at the date of the conversion. But that does not apply where the plaintiff, immediately prior to the conversion, has only a limited interest in the goods, see v. (1864) 17 C.B., N.S, at p. 294, fey Mr Justice Willes. Take this case. The hirer had a most valuable interest in the oar. He had paid already £614. 10s.0d. towards the purchase price and had the right to buy it outright on paying another £274. 10s.0d. The interest of the Finance Company was limited correspondingly. Its interest was limited to securing the payment of the outstanding £274.108.Od. It is entitled to be compensated for the loss of that Interest, and no more. It was so held by Mr Justice Channell in the well known case of Bel Motor Supply Company v. Cox. 1914, 1 King's Bench, p. 244. As Lord Justice Winn pointed out in the course of the argument, immediately prior to the wrongful sale, the high probability was that the Finance Company would only get out of this transaction another £274. 10s.0di Either because ear Pattinson would complete the purchase: or because a purchaser would pay the "settlement figure". That isall the Finance Company have lost and all they should r. It would be unjust that they should recover twice as much as they turn lost.
As against this view, we were referred to United Dominions Trust (Commercial) Ltd. v. Parkway Motors Ltd., 1955 1 Weekly law Reports, p. 719. In that case the hire purchase price of a van was £626. 3s.0d. The hirer paid £529. 19s.0d. and resold it when the outstanding balance was only £96. 4s.0d. The Finance Company refused to accept this £96 and claimed the full value of the van, £950. Mr Justice McNair awarded them the £950. That was four times as much as they had load. He was referred to the case but distinguished it on this ground. In the case the hire purchase agreement contained a simple prohibition that "the hirer shall not re-let sell or part with the possession" of the goods. In the United Trust case, it contained a prohibition that the hirer "shall not sell, offer for sale, assign or charge the goods or the benefit of the agreement". The only distinction, is that is the case the printed from contained the extra words "or the benefit of the agreement". This distinction, said Mr Justice Mcr, made all the difference: and...
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