Russell Kelsall and Jess
Goodman say court ruling highlights the need to describe goods
correctly.
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The importance of correctly
describing goods on finance agreements and invoices shouldn’t be
overstated, particularly when they are expensive, as a finance
company and dealer recently discovered in the High Court decision
of Brewer vs Mann, Fortis Lease UK Limited & Stanley Mann
Racing Limited (2010).
Mrs Brewer saw an advert for
a ‘1930 Speed Six Bentley’. After inspecting the vehicle with her
husband and speaking to the motor trader who assured her the
description was accurate, she decided to buy it for £425,000. She
paid a deposit to the dealer and entered into a hire purchase
agreement with Fortis Lease UK Limited. Fortis then bought the
vehicle from the trader.
The invoice between Fortis
and the trader, and the agreement between Fortis and Mrs Brewer,
both described the vehicle as a ‘1930 Speed Six
Bentley’.
After missing some payments,
Mrs Brewer decided to sell the vehicle and took it to an auctioneer
to be valued. The auctioneer noted that the vehicle was not an
original and complete ‘1930 Speed Six Bentley’. The only original
part was a small part of the chassis. She contacted Fortis and
stated she proposed to bring a claim against the dealer and asked
Fortis not to take any action against her. Fortis declined and
terminated the agreement.
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By GlobalDataProceedings were then issued
by Mrs Brewer against Fortis and the dealer. Fortis defended the
claim and issued a counterclaim for the unpaid balance under the
agreement. It also issued a contribution claim against the dealer.
Mrs Brewer’s claim was, quite simply, that the vehicle had been
wrongly described.
The court therefore looked at
the wording of both the agreement and the invoice. It decided that
the meaning of a ‘1930 Speed Six Bentley’ was a ‘1930 Speed Six car
with a 1930 Speed Six engine and chassis’.
Because the vehicle did not
match this description, Mrs Brewer was entitled to terminate the
agreement and had no further liability to Fortis. She also
recovered the monies she had paid both to Fortis and the dealer.
Fortis’s counterclaim for the unpaid balance therefore failed, but
it was entitled to an indemnity from the dealer.
The court’s decision is,
perhaps, unsurprising. Mrs Brewer was a consumer buyer of an
expensive and seemingly rare vintage motor vehicle. The court found
the dealer’s evidence to be wholly unsatisfactory and plainly had
sympathy with Mrs Brewer who, if the court had dismissed her claim,
would have had a substantial liability to a finance company for a
vehicle she didn’t want to buy.
It is therefore a very useful
and timely reminder for finance companies and traders alike of
their responsibilities when selling or hiring motor vehicles,
especially prestige or high-quality marques.
y Russell Kelsall and
Jess Goodman are solicitors specialising in asset finance
litigation, particularly involving motor vehicles, at Squire
Sanders Hammonds
