England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LEICESTER COUNTY COURT
(MR. RECORDER GRANT)

		Royal Courts of Justice Strand, London, WC2A 2LL Thursday 28th June, 2001

LORD JUSTICE SEDLEY:

The problem

1. A man goes into a motor dealer's to buy a new vehicle which is on display. He wants to take it on hire purchase. The dealer telephones the finance company with whom he ordinarily deals and gives them the details on the driving licence which the man produces as proof of his identity. The finance company verify from the electoral register the licence-holder's name and address and check that no outstanding debts are registered against him. They approve the transaction; the dealer completes the forms; the man makes a down-payment and either drives off in the vehicle or collects it when the documentation is ready. He then sells it to an innocent buyer.
2. The fraud is one which must happen every day of the year - especially if it is as easy to perpetrate as it was in this case. It causes the finance company a good deal of trouble and some loss, but provided the vehicle can be traced they can reclaim it and re-sell it. It is the end-buyer who, having parted with a large sum of money, now finds himself either parting with the vehicle for which he has paid it or, if he wants to keep it, parting with a similar sum over again to the finance company. This, at any rate, is the situation if the decision in the present case of Mr Assistant Recorder D.E.B.Grant, sitting at Leicester County Court on 13 January 2000, is correct. It may seem remarkable that the law governing the consequences of a fraud as common as this is still in doubt, but it is.

The facts

3. The assistant recorder's clear and methodical judgment sets out the key evidence and his essential findings of fact. They include these:

(a) On 10 June 1996 a rogue went into the showrooms of Chris Varieva Ltd in Leicester. He told the sales manager, Mr Bailey, that his name was Patel and that he wanted to buy a Mitsubishi Shogun which was on display. They agreed a price, subject to the obtaining of hire purchase finance.

(b) The rogue produced a driving licence in the name of Durlabh Patel of 45 Mayflower Road, Leicester. The licence was genuine but had been stolen or otherwise unlawfully obtained. Mr Bailey telephoned the claimants' sales support centre, gave their new business clerk the details which the rogue had provided and faxed to them a copy of the driving licence followed by the draft agreement signed by the rogue using Mr Patel's name. The claimants made a computer search, first to check the name and address against the electoral register, then to check whether any county court judgments or bankruptcy orders were registered against him, then to check his credit rating with one or more credit reference agencies. It took, as it generally does, about 5 minutes.

(c) The information to which they had immediate access (some people might be disturbed to learn) included the length of time Mr Durlabh Patel had lived at his address, where he worked and how long he had worked there, his bank account number and how long he had held the account, his date of birth and his driving licence number. It also confirmed that there were no adverse credit references and gave Mr Patel a credit score which resulted in automatic acceptance of the proposal. It did not apparently include any information about his capacity to pay the instalments on the agreed price of £22,250.

(d) The claimants compared the signatures on the faxed copies of the driving licence and the agreement form and evidently believed them to match. They told the dealer that the proposal was accepted. The dealer accepted a 10 per cent deposit in the form partly of cash and partly of a cheque, which was of course dishonoured, and handed the vehicle over to the rogue with complete documentation.

(e) The rogue sold the Shogun to the defendant, Mr Hudson, for £17,000 in circumstances which do not emerge fully from the judgment. What does emerge is that the defendant was a car-breaker who dealt in spare parts and had latterly gone into the courtesy car business. But the assistant recorder found as a fact that he was not a car dealer and that, although he acted carelessly in undertaking a poorly documented transaction, he bought the vehicle in good faith. These findings and their legal consequences are not challenged by the claimants.

4. On the basis of these findings the assistant recorder gave judgment for the claimants. Although the claim was for delivery up of the Shogun, it was agreed that judgment, if in the claimants' favour, should be for the value of the vehicle, £18, 374.52.

The law

5. S.27 of the Hire Purchase Act 1964, as amended, provides:

"(1) This section applies where a motor vehicle has been bailed … under a hire purchase agreement … and, before the property in the vehicle has become vested in the debtor, he disposes of the vehicle to another person.

(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 … agreement …, that disposition shall have effect as if the creditor's title to the vehicle had been vested in the debtor immediately before that disposition."

S.29(1) defines a private purchaser as - for present purposes - one who, at the time of purchase, does not carry on a business of buying cars in order to sell them. S.29(4) defines the debtor as - for present purposes - the person to whom the vehicle is bailed.

6. The effect is that a person, other than a car dealer, who in good faith buys a car from someone who turns out only to have it on hire purchase, obtains a good title. The question in the present case is therefore whether the rogue had the vehicle on hire purchase, or whether the transaction he had induced the claimants to enter into was a legal nullity, making him not a bailee of the vehicle until the agreement was terminated but a thief from the start. Only then, on the assistant recorder's findings of fact, would the claim against the defendant be sound.
7. The textbook principles of common law, at which it is going to be necessary to look again below, are in summary these:

(a) A dealer who, by post, is induced by a rogue, A, to believe that he is dealing with B, with whom he is willing to deal, makes no contract at all and (absent sale in market overt) can recover the goods he has parted with from an innocent purchaser: Cundy v Lindsay (1878) 3 App Cas 459 (HL).

(b) A dealer who, by post, is induced by a rogue, A, to believe that the rogue is B, when B in truth has no separate identity, contracts with A. The contract is voidable, but until avoided enables a good title to be passed to an innocent purchaser: King's Norton Metal Co. Ltd v Edridge Merrett & Co Ltd (18979) 14 TLR 98 (CA).

(c) A dealer who sells face-to-face is presumed (absent strong rebutting evidence) to be selling to the person before him, even if the person is a rogue, A, who has induced the dealer to believe that he is B, and it is only to B that the dealer is willing to sell. A good title consequently passes to an honest purchaser through the rogue: Phillips v Brooks [1919] 2 KB 243 (Horridge J).

(d) The presumption is rebutted where A's fraud, albeit committed face-to-face, was such that the seller's offer was in truth directed to B, not to A. The rogue can consequently not pass on a good title even to an honest purchaser: Ingram v Little [1961] 1 QB 31 (CA, Devlin LJ dissenting).

(e) A deed which bears a false signature is a forgery and creates no rights whatever: Re De Leeuw [1922] 2 Ch 540 (Peterson J); Gallie v Lee [1969] 2 Ch 17 (CA).

8. This court had to review the state of the law, summarised above, in Lewis v Averay [1972] 1 QB 198. There a private seller had parted with his car in return for a worthless cheque to a rogue who persuaded him that he was the well-known actor who played Robin Hood on television, and who sold it on to the defendant. In the leading judgment (which would be a gem of judicial prose even if it were not - as it remarkably was - delivered ex tempore), Lord Denning MR said:

"The real question in the case is whether on May 8, 1969, there was a contract of sale under which the property in the car passed from Mr. Lewis to the rogue. If there was such a contract, then, even though it was voidable for fraud, nevertheless Mr. Averay would get a good title to the car. But if there was no contract of sale by Mr. Lewis to the rogue – either because there was, on the face of it, no agreement between the parties, or because any apparent agreement was a nullity and void ab initio for mistake, then no property would pass from Mr. Lewis to the rogue. Mr. Averay would not get a good title because the rogue had no property to pass to him.

There is no doubt that Mr. Lewis was mistaken as to the identity of the person who handed him the cheque. He thought that he was Richard Greene, a film actor of standing and worth: whereas in fact he was a rogue whose identity is quite unknown. It was under the influence of that mistake that Mr. Lewis let the rogue have the car. He would not have dreamed of letting him have it otherwise.

What is the effect of this mistake? There are two cases in our books which cannot, to my mind, be reconciled the one with the other. One of them is Phillips v. Brooks Ltd. [1919] 2 KB 243, where a jeweller had a ring for sale. The other is Ingram v. Little [1961] 1 QB 31, where two ladies had a car for sale. In each case the story is very similar to the present. A plausible rogue comes along. The rogue says he like the ring, or the car, as the case may be. He asks the price. The seller names it. The rogue says he is prepared to buy it at that price. He pulls out a cheque book. He writes, or prepares to write, a cheque for the price. The seller hesitates. He has never met this man before. He does not want to hand over the ring or the car not knowing whether the cheque will be met. The rogue notices the seller's hesitation. He is quick with his next move. He says to the jeweller, in Phillips v. Brooks: "I am Sir George Bullough of 11 St. James's Square"; or to the ladies in Ingram v. Little "I am P.G.M. Hutchinson of Stanstead House, Stanstead Road, Caterham"; or to the post-graduate student in the present case: "I am Richard Green, the film actor of the Robin Hood Series." Each seller checks up the information. The jeweller looks up the directory and finds there is a Sir George Bullough at 11 St. James's Square. The ladies check up too. They look at the telephone directory and find there is a "P.G.M. Hutchinson of Stanstead House, Stanstead Road, Caterham." The post-graduate student checks up too. He examines the official pass of the Pinewood Studios and finds that it is a pass for "Richard A. Green" to the Pinewood Studios with this man's photograph on it. In each case the seller feels that this is sufficient confirmation of the man's identity. So he accepts the cheque signed by the rogue and lets him have the ring, in the one case, and the car and logbook in the other two cases. The rogue goes off and sells the goods to a third person who buys them in entire good faith and pays the price to the rogue. The rogue disappears. The original seller presents the cheque. It is dishonoured. Who is entitled to the goods? The original seller? Or the ultimate buyer? The courts have given different answers. In Phillips v. Brooks, the ultimate buyer was held to be entitled to the ring. In Ingram v. Little the original seller was held to be entitled to the car. In the present case the deputy country court judge has held the original seller entitled.

It seems to me that the material facts in each case are quite indistinguishable the one from the other. In each case there was, to all outward appearance, a contract: but there was a mistake by the seller as to the identity of the buyer. This mistake was fundamental. In each case it led to the handing over of the goods. Without it the seller would not have parted with them.

This case therefore raises the question: What is the effect of a mistake by one party as to the identity of the other? It has sometimes been said that if a party makes a mistake as to the identity of the person with whom he is contracting there is not contract, or, if there is a contract, it is a nullity and void, so that no property can pass under it. This has been supported by a reference to the French jurist Pothier; but I have said before, and I repeat now, his statement is no part of English law. I know that it was quoted by Lord Haldane in Lake v. Simmons [1927] AC 487, 501, and, as such, misled Tucker J. In Sowler v. Potter [1940] 1 KB 271, into holding that a lease was void whereas it was really voidable. But Pothier's statement has given rise to such refinements that it is time it was dead and buried together.

For instance, in Ingram v. Little [1961] 1 QB 31 the majority of the court suggested that the difference between Phillips v. Brooks [1919] 2 KB 243 and Ingram v. Little was that in Phillips v. Brooks the contract of sale was concluded (so as to pass the property to the rogue) before the rogue made the fraudulent misrepresentation: see [1961] 1 QB 31, 51, 60: whereas in Ingram v. Little the rogue made the fraudulent misrepresentation before the contract was concluded. My own view is that in each case the property in the goods did not pass until the seller let the rogue have the goods.

Again it has been suggested that a mistake as to the identity of a person is one thing: and a mistake as to his attributes is another. A mistake as to identity, it is said, avoids a contract: whereas a mistake as to attributes does not. But this is a distinction without a difference. A man's very name is one of his attributes. It is also a key to his identity. If the, he gives a false name, is it a mistake as to his identity? Or a mistake as to his attributes? These fine distinctions do no good to the law.

As I listened to the argument in this case, I felt it wrong that an innocent purchaser (who knew nothing of what passed between the seller and the rogue) should have his title depend on such refinements. After all, he has acted with complete circumspection and in entire good faith: whereas it was the seller who let the rogue have the goods and thus enabled him to commit the fraud. I do not, therefore, accept the theory that a mistake as to identity renders a contract void. I think the true principle is that which underlies the decisions of this court in King's Norton Metal Co. Ltd. V. Edridge Merrett & Co. Ltd. (1897) 14 TLR 98 and of Horridge J. In Phillips v. Brooks [1919] 2 KB 243, which has stood for these last 50 years. It is this: When two parties have come to a contract – or rather what appears, on the fact of it, to be a contract – the fact that one party is mistaken as to the identity of the other does not mean that there is no contract, or that the contract is a nullity and void from the beginning. It only means that the contract is voidable, that is, liable to be set aside at the instance of the mistaken person, so long as he does so before third parties have in good faith acquired rights under it.

Applied to the cases such as the present, this principle is in full accord with the presumption stated by Pearce LJ and also Devlin LJ in Ingram v. Little [1961] 1 QB 31, 61, 66. When a dealing is had between a seller like Mr. Lewis and a person who is actually there present before him, then the presumption in law is that there is a contract, even though there is a fraudulent impersonation by the buyer representing himself as a different man than he is. There is a contract made with the very person there, who is present in person. It is liable no doubt to be avoided for fraud, but it is still a good contract under which title will pass unless and until it is avoided. In support of that presumption, Devlin LJ quoted, as p.66 not only the English case of Phillips v. Brooks, but other cases in the United States where "the courts hold that if A appeared in person before B, impersonating C, an innocent purchaser from A gets the property in the goods against B." That seems to me to be right in principle in this country also.

In this case Mr. Lewis made a contract of sale with the very man, the rogue, who came to the flat. I say that he "made a contract" because in this regard we do not look into his intentions, or into his mind to know what he was thinking or into the mind of the rogue. We look to the outward appearances. On the fact of the dealing, Mr. Lewis made a contract under which he sold the car to the rogue, delivered the car and the logbook to him, and took a cheque in return. The contract is evidenced by the receipts which were signed. It was, of course, induced by fraud. The rogue made false representations as to his identity. But it was still a contract, though voidable for fraud. It was a contract under which this property passed to the rogue, and in due course passed from the rogue to Mr. Averay, before the contract was avoided.

Though I very much regret that either of these good and reliable gentlemen should suffer, in my judgment it is Mr. Lewis who should do so. I think the appeal should be allowed and judgment entered for the defendant."

9. While this reasoning offers a principled basis (though not the only possible one) for the resolution of these recurrent cases, it can be seen that it omits any reference to Cundy v Lindsay, a decision which is unhappily inconsistent with it but is binding on this court. This may be why - though equally without reference to that case - the other two members of this court agreed with the outcome proposed by the Master of the Rolls but not with his reasoning. Phillimore LJ took the view that there was nothing to displace the presumption that the seller meant to deal with the man in front of him whoever he was. Megaw LJ, while unhappy about the majority decision in Ingram v Little, considered that the relevant mistake was not as to the identity but as to the attributes - the creditworthiness - of the rogue. In the result, Lewis v Averay is authority for little except that the state of the law is still unclear.
10. In his dissenting judgment in Ingram v Little Devlin LJ, having considered the authorities and expressed a preference for the reasoning found in this country in Phillips v Brooks, in New Zealand in Fawcett v Star Car Sales Ltd. [1960] NZLR 406 and in decisions of the United States' courts, said:

"There can be no doubt, as all the difference of opinion shows, that the dividing line between voidness and voidability, between fundamental mistake and incidental deceit, is a very fine one. That a fine and difficult distinction has to be drawn is not necessarily any reproach to the law. But need the rights of the parties in a case like this depend on such a distinction? The great virtue of the common law is that it sets out to solve legal problems by the application to them of principles which the ordinary man is expected to recognise as sensible and just; their application in any particular case may produce what seems to him a hard result, but as principles they should be within his understanding and merit his approval. But here, contrary to its habit, the common law, instead of looking for a principle that is simple and just, rests on theoretical distinctions. Why should the question whether the defendant should or should not pay the plaintiff damages for conversion depend upon voidness or voidability, and upon inferences to be drawn from a conversation in which the defendant took part? The true spirit of the common law is to override theoretical distinctions when they stand in the way of doing practical justice. For the doing of justice, the relevant question in this sort of case is not whether the contract was void or voidable, but which of two innocent parties shall suffer for the fraud of a third. The plain answer is that the loss should be divided between them in such proportion as is just in all the circumstances. If it be pure misfortune, the loss should be borne equally; of the fault or imprudence of either party has caused or contributed to the loss, it should be borne by that party in the whole or in the greater part. In saying this, I am suggesting nothing novel, for this sort of observation has often been made. But it is only in comparatively recent times that the idea of giving to a court power to apportion loss has found a place in our law. I have in mind particularly the Law Reform Acts of 1935, 1943 and 1945, that dealt respectively with joint tortfeasors, frustrated contracts and contributory negligence. These statutes, which I believe to have worked satisfactorily, show a modern inclination towards a decision based on a just apportionment rather than one given in black or in white according to the logic of the law. I believe it would be useful if Parliament were now to consider whether or not it is practicable by means of a similar act of law reform to provide for the victims of a fraud a better way of adjusting their mutual loss than that which has grown out of the common law."

11. It was this judgment which prompted Lord Gardiner LC to refer the problem to the Law Reform Committee. We have been shown the Committee's Twelfth Report (Cmnd. 2958, 1966) on the transfer of title to chattels. The conclusion of its distinguished members did not chime with that of Lord Devlin (as he by then was). It was that apportionment of consequential loss was not practicable; that the loser of stolen goods should retain title unless they were bought in good faith by retail or at auction; but that a contract made under a mistake as to the buyer's identity should be voidable as against honest third parties and not void. If the last of these proposals had been adopted, it would have produced the outcome at which Lord Denning MR arrived in Lewis v Averay. Instead, the illogical and sometimes barely perceptible distinctions made in earlier decisions, some of them representing an unarticulated judicial policy on the incidence of loss as between innocent parties, continue to represent the law.

This case

12. To my mind there are strong reasons why the claimants in the present case ought, if the law permitted it, to be made to bear the loss. They accepted that the rogue was the true holder of a driving licence which could have been anybody's, and they gave him £20,000-worth of finance on the basis of that and of a credit check which showed only that there were no judgments or debts registered against the holder of the licence. They verified they existence and dwelling place of the true holder, but they had no good reason to be confident that it was with him that they were in truth dealing, and no reason whatever to think that, simply because he passed a credit check, the real Mr Patel would be able to pay the instalments. It is one thing for the claimants' sales support manager to assert, as she did without challenge, that "the identity of the customer is absolutely crucial". It is another thing, and in my view one which takes most of the wind out of the claimants' sails, to observe what this amounted to in practice. The claimants could afford to take such a cavalier approach only because, if the buyer was in fact a rogue who was simply going to sell the car on, they could count with reasonable confidence on being able to repossess it. The loser would be the innocent purchaser, not the finance company. If there was ever a seller who ought to be treated as having assumed the risk of loss, it was in my judgment the present claimants.
13. But until and unless a higher court than this straightens the law out, we have to live with the decided cases. I say this not because I do not believe that this court can move the law forward where the way is open, but because, even if the escape were not blocked by precedent, there is more than one way the law can go. One is towards apportionment of loss, a course which can only be taken by Parliament. The other is towards an allocation of loss by reference to a better set of tests than now exist; but the decision of their Lordships' House in Cundy v Lindsay stands in the way in the sense that the law cannot be comprehensively adjusted so long as this element of it remains fixed. Any decision of this court which ignored or marginalised it would create a conflict which would assist neither the standing of the law nor the ability of people to know where they stood.
14. For my part, in spite of the persuasive submission of Mr Jeremy Cousins QC for the appellant, I can find no fault with the assistant recorder's conclusion on this aspect of the case, even if it is a little light on reasoning. He said:

"In my judgment, although the offer was made by the rogue, the claimant's acceptance was addressed to Mr D.J.Patel… [A]t all material times the claimant intended to hire the vehicle to Mr D.J.Patel, and it could well be said that in fact the claimant was not mistaken about the identity of the hirer, namely that the identity of the hirer was Mr D.J.Patel. However, if the claimant was mistaken about the identity of the hirer, then that mistake was at all material times known to the rogue and there was thus unilateral mistake as to the terms of the contract….In my judgment, no contract in the form of the hire purchase agreement was concluded."

15. This was a straightforward application of Cundy v Lindsay: the rogue, A, had masqueraded as B, and it was with B alone that the finance company was willing to contract. Mr Cousins' principal assault on it is accordingly based on the face-to-face principle: the rogue was in front of the dealer, and the dealer was the finance company's eyes and ears for those purposes for which the finance company relied on him, including his identification. The assistant recorder rejected this argument. He said:

"I am not satisfied that this was a contract made inter praesentes … I do not find … that the dealer was acting as the agent of the finance company for the purpose of making the hire purchase agreement. The dealer may have had authority to communicate the decision of the finance company to the customer, but in my judgment the dealer had no authority actually to make the agreement in question."

16. There is no error in this as far as it goes; but it does not deal with the crucial point. Accepting that the dealer was not the finance company's general agent, did he nevertheless represent the claimants in the way described by Lord Morris of Borth-y-Gest in Branwhite v Worcester Works Finance Ltd [1969] 1 AC 552, 573, when he pointed out that "A dealer may for some ad hoc purpose be the agent of a finance company" and adopted what Pearson LJ had said in Mercantile Credit v Hamblin [1965] 2 QB 242, 269:

"There is no rule of law that in a hire purchase transaction the dealer never is, or always is, acting as agent for the finance company or as agent for the customer… Nevertheless, the dealer is to some extent an intermediary between the customer and the finance company, and he may well have in a particular case some ad hoc agencies to do particular things on behalf of one or the other or, it may be, both of those two parties."

17. The facts found by the assistant recorder (who had the foregoing cases before him), while they may not have made the dealer the claimants' agent for the purpose of making the hire purchase agreement, did in my judgment make the dealer the claimants' agent for certain specific purposes connected with it. One such purpose was to ascertain the identity of the hirer; another was to convey by fax the proffered proof of his identity, the driving licence; a third was to submit by fax the draft agreement signed by the hirer. These were the very elements which, had they been carried out in the claimants' offices, would have amounted to face-to-face dealing with the rogue. It was, in other words, as if the rogue had told the claimants' new business clerk across a desk that he was Mr Durlabh Patel of 45 Mayflower Road, Leicester and that this was his driving licence, and had signed contract form in front of the clerk. The claimants had delegated to the dealer the job of obtaining these elements for them. That the dealer may simultaneously have been the rogue's agent in supplying them does not mean that he was not, for these limited but crucial purposes, also the claimants' agent.
18. If this is so, we have then to decide whether the presumption that it was the rogue with whom the claimants contracted is displaced by their belief that they were contracting with Mr Patel. I find little difficulty in holding that it is not. The situation which I have described in paragraph 12 above could hardly be further from the situation which in Ingram v Little persuaded the majority in this court that the contract was void and that no title had therefore passed: two ladies in Bournemouth taken in by a smooth confidence trickster who traded on their naïveté. Without falling into the error of determining law simply by factual similarity or difference, I would hold that the claimant finance company, using the dealer as its agent, had in law contracted face-to-face with a fraudsman in circumstances insufficient to rebut the presumption that it was with him, and not with the person he claimed to be, that they were contracting.
19. It follows that, the contract not having been avoided, it was from the debtor within the meaning of sections 27 and 29 that the defendant bought the Shogun in - as the assistant recorder found - good faith and that, as a private purchaser, he acquired a good title. I see no way of reconciling the decided cases on the effect of forgery of deeds, on which Mr George Bompas QC has relied for the claimants, with the decided cases on mistake in relation to transfer of title unless, as Mr Cousins suggests, different principles apply to a transaction which, by law, is a nullity unless in writing and duly attested. If not, the overlap is large, since these contractual mistakes are typically induced by a fake signature - but I can see no difference in this regard between the signature in Cundy v Lindsay and that in the King's Norton case, neither of which was the writer's true signature and both of which were designed to deceive. If we are to follow the mistake cases, therefore, I see no room for doctrines relating to forgery. If we were simply to adopt the principle that forgery unravels everything, the mistake cases would become largely irrelevant.
20. What then of the decision of this court in Hector v Lyons (1988) 58 P&CR 156? In that case the appellant had for some reason contracted to buy a house using his son's name. He was consequently denied specific performance when the vendor failed to complete, being - it was held - neither the purchaser nor the purchaser's agent. Sir Nicolas Browne-Wilkinson V-C said:

"On the first limb of his argument Mr. Cogley [the appellant's counsel] relies on the line of cases dealing with unilateral mistake. In those cases, typically goods are sold by a vendor V, to a purchaser P, under the mistake that P is someone else, X. The cases referred to in Lewis v. Averay typify that type of transaction. Normally the case is that the purchaser P makes a fraudulent representation to the vendor that he, P, is some other person, X. In the case of a face to face sale, where the sale is over a counter or between two individuals, the law is well established that the mere fact that the vendor, V, is under a misapprehension as to the identity of the person in front of him does not operate so as to render the contract void for mistake, it being a mere unilateral mistake as to a quality of the purchaser; only in cases where the identity of the purchaser is of direct and important materiality in inducing the vendor to enter into the contract is a mistake of that kind capable of avoiding the contract.

With one exception those cases are entirely concerned with transactions between individuals fact to fact entering into oral agreement. In my judgment the principle there enunciated has no application to a case such as the present where there is a contract and wholly in writing. There the identity of the vendor and of the purchaser is established by the names of the parties included in the written contract. Once those names are there in the contract, the only question for the court is to identify who they are.

In the present case the deputy judge has found as a fact that the party named in the written contract was Mr. Hector junior. It follows, in my judgment, that in the absence of rectification, which has not been claimed, or Mr. Cogley's alternative argument based on agency the only person who can enforce that contract is the party to it, namely Mr. Hector junior."

Woolf LJ, agreeing, added:

"This was a contract in writing for sale of land. Parties to the contract are normally to be ascertained from the document of documents containing the contract. There can be limited circumstances where it is possible to allow oral evidence to be given in relation to a written contract, but those circumstances are recognised as being exceptional and should, in my view, be strictly confined. The sort of exceptions that I have in mind are referred to in Cheshire and Fifoot and Furmstone on Contract, which sets out the general principle to which I have made reference."

In this case Mr. Cogley, first of all, seeks to found authority and justification for departing from the normal rule on the case of King's Norton Metal Co. (Ltd.) v. Edridge, Merrett, and Co. (Ltd.), to which my Lord has already referred. That was a case involving a written contract. It was a written contract which described one of the parties as "Hallam and Co." Hallam and Co. Did not exist, and I would regard the case, so far as the admission of evidence is concerned, as being no more than an illustration of the principle that evidence can be properly admitted in order to identify the true party to a written contract, when the description of that party in the contract does not make it clear who is the real contracting party. The oral evidence in King's Norton Metal Co. (Ltd.) v. Edridge, Merrett, and Co. (Ltd.) identified the rogue, Wallis, as the true party. The contract was made between him and the plaintiffs and was a binding contract since the plaintiffs had intended to supply their goods to Hallam and Co. Whoever that firm might be."

Staughton LJ reached the same result by a much more fact-specific route.

21. As a just and principled solution of the case then before the court, this decision is unproblematical. The appellant, having used the name of another person as the purchaser, was in no position to assert that he himself was the purchaser. But while it might follow that the son whose name had been used could if he wished have obtained specific performance against the vendor, it cannot equally have followed that the vendor could have obtained specific performance against the son, for (absent affirmation) it was not his contract. No more in the present case could the claimant finance company have demanded payment from Mr Durlabh Patel. But why not? Only, as it seems to me, because it is necessarily open to the person whose name has been used to establish that it was neither he nor his agent who signed the contract: in other words, to show that one of the parties is not the party named in the contract. If, returning from Woolf LJ's reasoning to that of the Vice-Chancellor, there remains the task of identifying who the parties are, again there is a paradox. The purchaser will be identified either as the person whose name has been used without his knowledge or consent, or as the person who so used it, or as the user of a simple alias. In the absence of affirmation, it cannot be the first of these for the reason I have given. If it is the second, one is back in the Cundy v Lindsay situation: the vendor has been induced to deal with a rogue using a respectable person's name, and there is no contract. If it is the third - a false name designed to disguise the purchaser rather than to deceive the vendor - the situation will resemble that in the King's Norton case, with a quite different outcome for the eventual bona fide purchaser.
22. For these reasons it is necessary, it seems to me, to ask whether the Vice-Chancellor's proposition that the face-to-face principle has no application "to a case such as the present where there is a contract and wholly in writing" is intended to govern all contracts made in writing, or whether it is the words "a case such as the present" which are critical. What marked out the case then before the court was that a person who was not named in the contract was seeking to enforce it. It is entirely intelligible that such a person cannot rely on a mistake which he himself has induced as to his identity simply because he induced it face-to-face and not, as in the early cases, by post. The equivalent in the present case would be the rogue demanding delivery of the car. So read, Hector v Lyons appears to me to sit comfortably enough with the already difficult body of earlier authority. Read as Mr Bompas would have us read it, it would disrupt the very body of authority on which much of its reasoning is predicated.
23. Not without hesitation, therefore, I would accept Mr Cousins' argument that the case is governed for better or for worse by the face-to-face principle. It may be that this test is only one of a group of differential rules of thumb for distributing loss among innocent parties; but it seems to be the one that fits the facts of this case. While this outcome happens to meet what seems to me to be the justice of the case, it gives little pleasure to arrive at it on such a jurisprudentially unsatisfactory basis. If Parliament is not to legislate for a power to apportion loss, the Law Reform Committee's third proposal might at least enable a higher tribunal to cut the Gordian knot into which the law has tied itself.
24. I would allow the appeal.

LORD JUSTICE DYSON:

25. The issue in this case is whether the rogue was the "debtor" under a "hire purchase agreement" within the meaning of the Hire Purchase Act 1964. Only if he was, would his purported sale of the car to the defendant on 11 June 1996 have been effective to pass title. Mr Bompas QC on behalf of the claimant submits that the rogue was not the debtor under the hire purchase agreement of 11 June 1996 on the grounds that (a) the agreement was a nullity (Mr Patel's signature having been forged); alternatively, (b) in so far as the agreement was valid and enforceable, it was only valid and enforceable by and against Mr Patel; alternatively, (c) the agreement was void because the claimant company intended to contract only with Mr Patel, and the identity of Mr Patel was a matter of vital importance to it: see Cundy v Lindsay [1878] 3 App Cas 459, and the various authorities on mistaken identity to some of which Sedley LJ has referred.
26. In support of (a), Mr Bompas referred to Re De Leeuw, Jakens v Central Advance and Discount Corporation [1922] 2 Ch 540, 553, and also to Gallie v Lee [1969] 2 Ch 17, 30, where Lord Denning MR said:

"If the deed was not his deed at all (non est factum), he is not bound by his signature any more than he is bound by a forgery. The document is a nullity just as if a rogue had forged his signature. No one can claim title under it, not even an innocent purchaser who bought on the faith of it, nor an innocent lender who lent his money on the faith of it. No matter that this innocent person acted in the utmost good faith, without notice of anything wrong, yet he takes nothing by the document."

27. Mr Bompas did not develop this argument, and in view of the conclusion that I have reached on his second and third submissions, I do not propose to express a view on it.
28. In support of his second submission, Mr Bompas relies on Hector v Lyons [1988] P & CR 156, and in particular on the passages which Sedley LJ has cited at paragraph 20 of his judgment. At page 159, Sir Nicolas Browne-Wilkinson V-C said that the principle enunciated in the cases concerned with mistaken identity where two parties make an oral agreement face to face:

"…has no application to a case such as the present where there is a contract and wholly in writing. There the identity of the vendor and of the purchaser is established by the names of the parties included in the written contract. Once those names are there in the contract, the only question for the court is to identify who they are."

29. In Hector v Lyons, Mr Hector senior, the person seeking to enforce the contract, was not named as a contracting party in the written instrument. The named purchaser was his son. As Sedley LJ points out, if one translated the result in Hector v Lyons to the present case, the rogue would not be able to make any claim against the finance company under the hire purchase agreement. Sedley LJ suggests that the Vice-Chancellor's reasoning is confined to cases where a person not named in a written contract is seeking to enforce it. I do not think that his judgment can be read in this restricted way. Nor do I consider that the judgment of Woolf LJ can be so read either. He said at page 160:

"This was a contract in writing for sale of land. Parties to the contract are normally to be ascertained from the document or documents containing the contract. There can be limited circumstances where it is possible to allow oral evidence to be given in relation to a written contract, but those circumstances are recognised as being exceptional and should, in my view, be strictly confined."

30. It is true that the Vice-Chancellor said that if Mrs Lyons had sought to enforce the contract against Mr Hector senior, the position might have been different, in that he might have estopped himself by his conduct from denying that he was the person named in the contract. In other words, the father would not have been liable as a party to the contract, because he was not a contracting party. If money was payable under the terms of the contract, he would not have been contractually liable to pay. But he might have been estopped by his conduct from denying that he was a contracting party, and therefore from denying his liability to pay what was due under the contract. But as the Vice-Chancellor said: "that is quite a different case".
31. It seems to me that the reasoning in Hector v Lyons is of application in the present case. The question here is whether the rogue was the debtor under the written hire purchase agreement, notwithstanding that he was not named as the hirer in that agreement. In my view, the answer is clearly: no. In the unlikely event that the claimant had sought to enforce the contract against the rogue, it is possible that he would have been estopped from denying that he was the hirer liable to perform the hirer's obligations under the contract. But that is not this case. Nor can that possibility make the rogue the debtor under the agreement.
32. I agree that the claimant could not hold Mr Patel liable under the hire purchase agreement. That is because his signature was forged, and he would be able to say that the agreement was not his contract. Nothing in Hector v Lyons would compel the conclusion that Mr Patel was a party to the contract simply because he was named as the party. The fact that his signature was forged makes all the difference. In Cundy v Lindsay, Lord Cairns LC said (page 465) that dishonest Blenkarn was "acting here just in the same way as if he had forged the signature of Blenkiron & Co, the respectable firm". In such a situation, there could be no contract.
33. Mr Cousins QC invites us not to apply the reasoning in Hector v Lyons. He points out that Sowler v Potter [1939] 4 All ER 478 was not cited to the court, and that in Sowler, "the relevance of the identity of the parties did not cease even when there had been a forgery and the instrument in question was a lease" (I quote from his supplemental skeleton argument). In Sowler, the defendant had been convicted of an offence in the name of Ann Robinson. She then assumed the name of Ann Potter. The plaintiff's evidence was that, if he had known that she was Ann Robinson, he would not have granted her the lease. The plaintiff, therefore, contended that the lease was void for mistake. Tucker J rejected this contention. He said:

"This case of landlord and tenant is clearly a case where the consideration of the person with whom the contract was made was a vital element in the contract, and that, therefore, if there was any mistake on the part of the plaintiff with regard to the identity of the person with whom she was contracting, the contract is void ab initio."

34. The decision in Sowler v Potter has been criticised: see, for example, Solle v Butcher [1950] 1 KB 671, 691; Gallie v Lee [1969] 2 Ch 17, 33, 41, 45; and Lewis v Averay [1972] 1 QB 198, 206. Anson's Law of Contract 27th Edition suggests (page 318) that the proper approach in a case such as Sowler "would be to inquire whether a stipulation could be implied into the offer that the offer excluded Ann Robinson, and whether this stipulation was known to the offeree. The answer is clear: no such stipulation could possible be implied, and the contract should not have been held to be void". I would agree with this approach. In any event, in so far as there is a difference of approach between Sowler v Potter and Hector v Lyons, this court is bound to follow the later authority.
35. Accordingly, I would dismiss this appeal on the short ground that the rogue was not the hirer named in the written hire purchase agreement, and was therefore not the debtor under that agreement. In the event, section 27(1) of the 1964 Act cannot avail the defendant.
36. In case I am wrong as to that, I must consider whether the agreement was void for mistake or merely voidable for fraudulent misrepresentation without regard to the fact that the agreement was wholly in writing. It is common ground that the agreement had not been avoided before the rogue purported to sell the car to the defendant. As Pearce LJ said in Ingram v Little [1961] 1 QB 31, 55:

" The question here is whether there was any contract, whether offer and acceptance met. For, as Gresson P. said in Fawcett v Star Car Sales Ltd, "a void contract is a paradox; in truth there is no contract at all.""

37. In Ingram, all three members of the court were influenced by Professor Goodhart's classic article "Mistake as to identity in the law of Contract" 57 LQR 228, which identified the relevant question in cases of mistaken identity as being objective viz: " How would a reasonable man placed in the position of the offeree have interpreted the offer?": see Sellers LJ pages 53-54, Pearce LJ page 55 and Devlin LJ page 64. Despite the criticisms by Megaw LJ in Lewis v Averay [1972] 1 QB 198, 208F to H, the importance of the Goodhart article and the approach adopted in Ingram v Little was to show that in deciding whether an apparent contract is non-existent owing to mistake in identity, the court applies an objective test, and does not examine the motives or subjective intentions of the parties.
38. Much has been said about what Gresson P called the "Inter praesentes principle" in Fawcett v Star Car Sales Limited [1960] NZLR 406, 420. I shall refer to it as the "face to face principle". It has variously been referred to as a "principle" and a "presumption". In Ingram v Little, at page 57, Pearce LJ said:

"An apparent contract made orally inter praesentes raises particular difficulties. The offer is apparently addressed to the physical person present. Prima facie, he, by whatever name he is called, is the person to whom the offer is made. His physical presence identified by sight and hearing preponderates over vagaries of nomenclature. "Praesentia corporis tollit errorem nominis" said Lord Bacon (Law Tracts (1737), p.102. Yet clearly, though difficult, it is not impossible to rebut the prima facie presumption that the offer can be accepted by the person to whom it is physically addressed. To take two extreme instances. If a man orally commissions a portrait from some unknown artist who had deliberately passed himself off, whether by disguise or merely by verbal cosmetics, as a famous painter, the imposter could not accept the offer. For though the offer is made to him physically, it is obviously, as he knows, addressed to the famous painter. The mistake in identity on such facts is clear and the nature of the contract makes it obvious that identity was of vital importance to the offeror. At the other end of the scale, if a shopkeeper sells goods in a normal cash transaction to a man who misrepresents himself as being some well-known figure, the transaction will normally be valid. For the shopkeeper was ready to sell goods for cash to the world at large and the particular identity of the purchaser in such a contract was not of sufficient importance to override the physical presence identified by sight and hearing. Thus the nature of the proposed contract must have a strong bearing on the question of whether the intention of the offeror (as understood by his offeree) was to make his offer to some other particular identity rather than to the physical person to whom it was orally offered.

In our case, the facts lie in the debatable area between the two extremes."

At page 66, Devlin LJ said:

" The presumption that a person is intending to contract with the person to whom he is actually addressing the words of contract seems to me to be a simple and sensible one and supported by some good authority."

So too in Lewis v Averay, Lord Denning MR at page 207C said:

" Applied to the cases such as the present, this principle is in full accord with the presumption stated by Pearce LJ and also Devlin LJ in Ingram v Little [1961] 1 QB 31, 61, 66. When a dealing is had between a seller like Mr Lewis and a person who is actually there present before him, then the presumption in law is that there is a contract, even though there is a fraudulent impersonation by the buyer representing himself as a different man than he is. There is a contract made with the very person there, who is present in person."

Phillimore LJ at page 208A said:

" I share the regret expressed by Lord Denning MR. I think the law was conveniently stated by Pearce LJ in the course of his judgment in Ingram v Little [1961] 1 QB 31 to which reference has already been made. He said, at p.61:

Each case must be decided on its own facts. The question in such cases is this. Has it been sufficiently shown in the particular circumstances that, contrary to the prima facie presumption" - and I would emphasise those words - "a party was not contracting with the physical person to whom he uttered the offer, but with another individual whom (as the other party ought to have understood) he believed to be the physical person present. The answer to that question is a finding of fact.

Now, in that particular case the Court of Appeal, by a majority and in the very special and unusual facts of the case, decided that it had been sufficiently shown in the particular circumstances that, contrary to the prima facie presumption, the lady who was selling the motor car was not dealing with the person actually present. But in the present case I am bound to say that I do not think there was anything which could displace the prima facie presumption that Mr Lewis was dealing with the gentleman present there in the flat - the rogue."

The "principle" to which Lord Denning was referring to in the passage that I have just quoted was that stated by him at page 207B in these terms:

" When two parties have come to a contract - or rather what appears, on the face of it, to be a contract - the fact that one party is mistaken as to the identity of the other does not mean that there is no contract, or that the contract is a nullity and void from the beginning. It only means that the contract is voidable, that is, liable to be set aside at the instance of the mistaken party, so long as he does so before third parties have in good faith acquired rights under it."

In my view, despite what Lord Denning said at page 207C, this principle is not in full accord with the decision in Ingram v Little, nor is it consistent with Cundy v Lindsay, to which no reference was made, although it was cited in argument.

39. Mr Cousins does not, however, rely on the principle stated by Lord Denning in Lewis v Averay. Rather, he contends that, in substance, the present case is one to which the face to face principle applies. He accepts, of course, that the agreement was not made by the claimant company and the rogue in each other's presence. But he submits that, even if the dealer was not the agent of the claimant for the purposes of making the hire purchase agreement, it was the company's agent for the purpose of receiving information from the rogue and passing it on to the company. He says that the dealer was the "eyes and ears" of the company so that, in effect, this was a face to face agreement. It is this argument which, in a somewhat more elaborate form, is referred to and accepted by Sedley LJ at paragraphs 17 and 18 of his judgment.
40. I have reached a different conclusion on this issue. It is important to keep in mind that the face to face principle is no more than an aid to determining the issue which arises where a contract has apparently been made orally by parties face to face: to whom should the offeree reasonably have interpreted the offer as having been made? Applied to the facts of this case, the question is: viewed objectively, should the rogue have interpreted the offer by the finance company as an offer to enter into the hire purchase agreement with him or with Mr Patel ? If with him, then there was a contract which could be avoided by the claimant company for misrepresentation. If with Mr Patel, there was no contract at all, because there was no acceptance by the party to whom the company's offer, properly understood, was made. As Pearce LJ pointed out in Ingram v Little, the nature of the proposed contract has a strong bearing on the question of whether the intention of the offeror (reasonably understood by the offeree) was to make his offer to some third person, rather than to the person to whom it was orally made. The nature of the contract may well indicate whether the identity of the other contracting party is of vital importance to the offeror - all relevant circumstances must be considered. I have already referred to the important passage in the judgment of Pearce LJ in Ingram v Little at page 61, which was cited in the judgment of Phillimore LJ in Lewis v Averay.
41. Two questions, therefore, arise: (i) should the agreement that was apparently made between the company and the rogue be regarded, in effect, as having been made face to face? and (ii) whether the answer to (i) is yes or no, to whom should the offer made by the finance company be interpreted as having been made?
42. As regards (i) it is accepted by Mr Cousins that the dealer was not the company's general agent for the purpose of making the agreement: see Branwhite v Worcester Works Finance Ltd [1969] 1 AC 552. In that case, the House of Lords held by a majority that it is not possible to define the relationship between dealers and finance companies in terms which can be of general application. A dealer may for some ad-hoc purpose be the agent of a finance company, but as Pearson LJ said in Mercantile Credit Co. Ltd v Hamblin [1965] 2 QB 242, 269:

"In a typical hire purchase transaction the dealer is a party in his own right, selling his car to the finance company, and he is acting primarily on his own behalf and not as general agent for either of the other two parties. There is no need to attribute to him an agency in order to account for his participation in the transaction. Nevertheless the dealer is to some extent an intermediary between the customer and the finance company, and he may well have in a particular case some ad-hoc agencies to do particular things on behalf of one or other or it may be both of those two parties."

43. In Branwhite, Lord Upjohn (with whom Lord Guest agreed) said at page 579D:

" My Lords, it is no doubt true that for some purposes the motor dealer acts as an agent in the loose sense of being a go-between for the intending purchaser and the finance company. He fills in the forms on behalf of the intending purchaser: he no doubt has information which enables him to fill in some of the details, and he has a supply of forms, which enables him to perform those useful business functions. But, so far as relevant to the question before your Lordships, I do not think the doctrine of agency enters into it at all."

44. Lords Reid and Wilberforce dissented on the agency issue. In my judgment, it is unhelpful and potentially misleading to say that the dealer in the present case was the agent of the finance company. It is true that the company had delegated to the dealer the task of performing various functions, including the ascertainment of the identity of the hirer, and conveying the driving licence and the draft agreement signed by the rogue. For these purposes, the dealer acted as the company's agent in what Lord Upjohn described as the "loose sense of being a go-between for the intending purchaser and the finance company". But it seems that the dealer had no authority to make any decisions that were binding on the claimant. It certainly had no authority to enter into the contract on behalf of the claimant. It was merely an intermediary for the purposes of obtaining and communicating information about the hirer to the company. If the dealer had been authorised by the company to make the hire purchase agreement, then in my view the face to face principle would have applied. There would have been a presumption that the dealer, as agent, had intended to make the contract with the person to whom it made the offer face to face. But in my judgment, on the facts of this case, no such presumption arose. The basis of the presumption is that, where two parties, both enjoying authority to make a contract, make an apparent agreement face to face, they intend to contract with each other, and not with someone else. The dealer in the present case was no more than a conduit pipe for the purposes of communicating information to enable the finance company to decide whether to enter into a hire purchase agreement. This emphasises the critical difference between what happened in this case and a straightforward oral agreement made face to face. I would , therefore, reject the submission of Mr Cousins that the agreement between the claimant and the rogue was one to which the face to face principle applied.
45. As regards (ii), even if it had been correct to view this case as one to which the face to face principle applied, I consider that it would have been displaced on the facts. The evidence of Janet Sentence, the company's sales support manager, was read at trial. It was not challenged. It included the following:

" 4. Although I am unable to comment on issues of law, I can say that for the purposes of a hire purchase agreement, the identity of the customer is absolutely crucial. This is because every individual has a credit rating and the finance company will only agree to provide credit to the customer if it is satisfied about the customer's credit rating.

5. The dealer will contact the Plaintiff's New Business Clerk by telephone with a credit proposal. The decision on the proposal depends on the credit rating of the customer and the clerk will take down the customer's details, such as his name, address, occupation, employer and bank details, in order to obtain the identity of the customer. These details are entered into the Plaintiff's computer by the clerk.

6. At this stage, the Plaintiff's computer system will search various information sources for details about the customer, namely whether he appears in the Register of Electors, whether he has any County Court Judgments registered against him or is the subject of a bankruptcy order. Enquiries are also made of credit reference agencies to ascertain the customer's credit rating. This exercise takes about 5 minutes and will incur various charges. The result of the enquiries made appear in the Basrop report at pages 2 to 14 of the attached exhibits.

7. Page number 2 shows the address recorded for Durlabh Patel as 45 Mayflower Road, Leicester and that he had resided there for 9 years. Employer Micro Systems Limited of 2 Halsbury Street, Leicester where he had been employed for 5 years, and his bank details, i.e. Midland Bank, account number 01366998 with whom he had held the account for 5 years. Page 5 confirms Mr Patel's date of birth and also confirms his name and employer including his occupation and confirming also his driving licence number. Page 6 repeats the recorded address and gives an enquiry status code of 01 which indicates all information given confirmed with no adverse credit reference entries recorded. Page 9 records details of the application for searches and confirms this was made at 2.04pm on the 10 June 1996.

8. The Plaintiff's computer also incorporates a credit scoring automatic accept or reject system which will in some instances give an acceptance without referral to an underwriter and that is what happened in this instance.

9. The agreement in question was not a sale but a hire purchase, namely a Consumer Credit agreement. It is well known and would have been known to the dealer and customer that the Plaintiff would undertake credit enquiries of the customer, and would rely on the result of these enquiries in deciding whether to grant credit to the customer, as is indeed the case. The customer's identity is crucial to these enquiries and to the Plaintiff's decision whether or not to offer credit.

10. It is also fundamental to the Plaintiff's compliance with the statutory regime in the Consumer Credit Act 1974 since, if the Plaintiff does not have the correct identity of the customer, it is impossible to send copies of the agreement and/or a default notice in the event of default. In the circumstances, I confirm that the customer's identity is in fact fundamental to the hire purchase agreement."

46. The Judge accepted this evidence. Paragraph 10 of the witness statement is of particular significance. The claimant is not entitled to reclaim possession of the car in the event of default by the hirer unless it has previously sent a default notice. Accordingly, the identity of the hirer is of the greatest importance to the company. The judge found (page 21G) that at all material times the claimant intended to hire the vehicle to Mr Patel. That finding of fact was no doubt based on the evidence of Ms. Sentence. In my view, it is unassailable. It follows that, even if the part played by the dealer in the transaction brought the face to face principle into play, that principle was displaced on the facts of this case.
47. For all these reasons, I would dismiss this appeal.

LORD JUSTICE BROOKE:

48. I agree with Dyson LJ, whose judgment I have read in draft, that this court is bound, on the authority of Hector v Lyons 58 P&CR 156, to hold that the hire-purchase agreement, if it was made between anyone, was made between the claimants and Durlabh Patel of 45 Mayflower Road, Leicester. The claimants did not make this agreement with anyone else. Durlabh Patel is a real person who lives at 45 Mayflower Road, Leicester, so that this case is quite different from the case of King's Norton Metal Co Ltd v Edridge Merrett & Co Ltd (1897) 14 TLR 98, in which one of the supposed parties to a written agreement did not in fact exist.
49. Mr Patel would of course be able to deny that he was liable under the hire-purchase agreement because his signature was forged. But I know of no principle of law which would enable a court to substitute another person, whose name does not appear in a written agreement, as a party to that agreement, and there is no scope for holding that Mr Patel made the agreement as agent for the unnamed rogue, so that the rogue could derive benefit from it.
50. I would therefore dismiss this appeal on that ground.
51. It is therefore unnecessary for me to say anything at all about the alternative ground on which the claimants resisted the appeal. I do not know why Parliament did not accept the principled recommendation of a very strong Law Reform Committee 35 years ago. The committee said in paragraph 13 of their report that the then state of the law led to the drawing of fine distinctions which were a reproach to the law. It is evident from the judgment of Sedley LJ, which I have read in draft, that the judgment of this court in Lewis v Averay [1972] 1 QB 198 did not extinguish that reproach. The majority of that court found themselves bound by the judgment of the majority in Ingram v Little [1961] 1 QB 31, the case which led to the October 1963 reference to the Law Reform Committee. The law is therefore still in the sorry condition in which the committee found it, and only Parliament or the House of Lords can remedy the position now.
52. Before leaving the case, I would like to pay tribute to the judgment of the assistant recorder. It was a model of its kind.
ORDER: Appeal dismissed; draft order on costs approved with amendment of Access to Justice Act to community Legal Services Costs Regulations; leave to appeal refused. (Order does not form part of approved Judgment)