(Formerly 2014 Folio 836 & others) |
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Fetter Lane London, EC4A 1NL |
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B e f o r e :
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BONHAMS 1793 LTD |
Claimant |
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- and - |
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(1) MS KRISTINE KLEVE LAWSON |
Defendants |
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Mr Richard Eschwege (instructed by Ross & Co Solicitors LLP) for the Fourth Defendant
Mr Joseph Ford the Second Defendant in person
The other parties did not attend
Hearing dates: 19th and 20th October 2015
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Crown Copyright ©
The Honourable Mr Justice Flaux:
Introduction
"As at 27 June 2014, before the auction of the Ferrari model 375 Plus Grand Prix Roadster, serial no. 0384AM (the "Car"), did:
(i) Ms Swaters; or
(ii) Ms Lawson and Mr Ford
have title to the Car (including, for the avoidance of doubt, any spare parts)
without prejudice to any dispute as to title between Ms Lawson and Mr Ford on the one hand, and Mr Gardner on the other."
The witness evidence
Events leading up to the purchase of the Car by Mr Swaters
"RE: wreck of Ferrari type 375 plus automobile, serial number 0384 AM
The undersigned Michel WATERPLAS, Superintendent at the Brussels Criminal Investigation Department, hereby certifies that, further to the ruling handed down by the King's Prosecutor in Brussels (Dr. 27.11.1233/89), seizure of the automobile referenced above has been lifted today, 2/14/90.
Mr. KRUCH may therefore have free use of this automobile."
Acquisition of good title in the chassis as a matter of Belgian law
"I. In matters of personalty, possession is equivalent to title.
II. Nevertheless, one who has lost or from whom was stolen a thing may claim it during three years, counting from the day of the loss or theft, against the one in whose hands he finds it, saving for that one his recourse against him from whom he holds it…"
(1) It is sufficient for the possessor to be in good faith for the purposes of Article 2279 at the time he acquires possession. Good faith is to be assessed on the basis of his knowledge at the moment of acquisition. That does not exclude subsequent conduct (such as intentionally hiding possession) as evidence of lack of good faith at the moment of acquisition.(2) There is a rebuttable presumption that the possessor acquired possession in good faith.
(3) Good faith means that the possessor believed and could have believed that he acquired the goods from the owner or from a person who had capacity or authority to transfer title, even if this was not the case in reality.
(4) The good faith of the possessor is a fact intensive enquiry which takes into account all the circumstances. It is thus a question of fact for this court and not for the experts, although Mr Brijs purported to express his view on the issue.
"We did not doubt that we had title to the Car, but we were prepared to see what we could do so that Mr Kleve would not continue to make claims about the Car, which, as far as we were concerned were not correct. Of course at the time we had bought only the chassis. It was damaged and incomplete. It was missing the parts such as the fuel tank. If there were spare parts retained by Mr Kleve it made sense to reunite these with the chassis even if their true value was low or doubtful. That was why we approached Kleve in 1990…"
"Thank you very much for your fax of yesterday. What a wonderful documentation you sent me. This will help me a lot for the negotiation and for the rebuild of this car. …
Don't you think that this car, which is definitely the 0384 is the car that was entered by Ferrari at the Mille Miglia for Maglioli at the Le Mans Marzetto/Maglioli and Silverstone Gonzales?
At the three events Ferrari entered the car under the number 0394. But 0394 according to the factory was never build, was only an engine sold to Vandervell/Whitehead.
According to Ferrari documentation, 0384 was rebuild 1954 Sept 2 and sold to Kimberly.
On the chassis of this car you can found the number 03?4. The ? is for sure either a 8 or a 9. That's why I think it possible that, by mistake they entered 0384 at the Mille Miglia, Le Mans and Silverstone under the number 0394.
Last week I was in Maranello and looked through the archives and found:
0384 KIMBERLY
0392 GOLDSMITH
0396 EDGAR
0398 VALIENTE
0400 DESTROYED BY THE FACTORY
Do you know what happened between KIMBERLY and KARL KLEVE (Cincinnati)??"
1. I would like very much to buy the car and rebuild it with the help of the Factory, make clear the situation, 384 or 394 and keep it in the future museum. I think this car is worthwhile.
2. I have already spoken with the factory and they agree to help me to found the real story and to rebuild the car.
3. The man who owns the car in Belgium is ready to sell to me the car, because he realises he will never be able to rebuilt the car, but he is a trader and is asking 1.000.000 US $ towards the Belgian law, he is the real owner, because he bought it in good faith, imported it regularly, paid the taxes…
4. Before to reach at an acceptable deal with the actual legal owner in Belgium, I want to make an acceptable agreement with Karl Kleve.
5. If I don't buy the car, the actual owner for sure will sell it to another trader. I think that Lamplough [a dealer whom Mr Seibert had said had been in Cincinnati and offered Mr Kleve US $800,000 for the car] wants to pay 500.000 US $ for the car but he wants the ownership and physically the remain of the chassis."
Events leading up to the Settlement Agreement
"with power to act in my stead and in my behalf regarding Ferrari 375 Plus (Grand Prix Roadster) Chassis No: 0384AM With full complete authority and power, including but not limited to, investigate, negotiate, present documents, receive documents, convey, make endorsements, to sign and swear to any document, to perform any act that may be necessary or require[d] by United States or International law or regulation…
Giving and granting to this Attorney-in-Fact power and authority to do and perform every act necessary and proper to be done in the exercise of any of the foregoing powers as fully as I might or could possibly do, if present, with full power of substitution and revocation, hereby ratifying and conforming all that my Attorney-in-Fact shall lawfully do or cause to be done by virtue of this document.
This power shall remain in full force until cancelled in writing…
This power shall be binding upon and inure to the benefit of the parties herein, their estate, successors and assigns".
The closing meeting and the agreements signed
"WHEREAS Kleve is the owner of the herein referenced automobile, [of] which was removed from his possession in or about 1989. The automobile described TO WIT
FERRARI 375 PLUS serial number: 0384AM ("Subject Automobile")
Thereafter Kleve retained the services of Mark Daniels/National Search Services to locate and recover the subject automobile, or alternatively negotiate any resolution, disposition or settlement, subject to the satisfactory approval of Kleve and;
WHEREAS Daniels is the corporate officer of National Search Services Inc having encumbrance for services rendered for the benefit of Kleve on the subject automobile and Daniels personally is appointed Attorney-in-Fact holder of a Power of Attorney executed by Kleve, and;
WHEREAS Lancksweert is the agent/representative of the person or entity currently in possession of the subject automobile for purposes of settlement, resolution and disposition of the aforementioned subject automobile and;
WHEREAS the parties are negotiating and acting in their capacity for the benefit respectively of their agency."
1. THAT as soon as reasonably possible upon execution of this Agreement Lancksweert shall deposit an amount equal to U.S. $625,000 in lawful United States currency in an escrow account ("the Account") satisfactory to Lancksweert, such amounts to be released only upon written direction of Lancksweert after satisfaction of the conditions set forth in section 2 below.
2. Upon deposit of the escrow amount and written notice to Daniels or a designated representative's verification of the escrow deposit, Daniels shall within two days following such notice, deliver to a designated representative of Daniels executed ownership documents of the subject automobile; to include the Title, Power of Attorney, Letter of Authority, Lien Release and Bill of Sale, all of which have been reviewed by Lancksweert in advance (collectively the "Transfer Documents"). In addition to the Transfer Documents, Daniels and Kleve shall provide a letter certifying that the release of the theft status of the subject automobile and the transfer of good and clear title and executed relevant documents for the benefit of Lancksweert or to any other person or entity as Lancksweert may designate shall be valid and released to Lancksweert upon satisfactory evidence that Lancksweert has deposited the full and complete amount and the receipt thereof, as previously herein indicated in Section 1. Simultaneously upon release of the Transfer Documents to Lancksweert, the funds in the Account shall be released to Daniels or designated representative. If Daniels fails to deliver the transfer documents and related documents, the funds held in escrow shall be returned to Lancksweert immediately.
3. (a) Kleve and Daniels represent and warrant, jointly and severally, that upon consumation [sic] of the transactions provided for above, Lancksweert, or any other person or entity that Lancksweert may designate, shall have good and clear title to and hold all rights, title and interests in the subject automobile free and clear of any claims, liens or encumbrances.
(b) Kleve and Daniels represent and warrant, jointly and severally, that good and free title to the subject automobile shall be conveyed to Lancksweert free and clear of all liens, claims, charges and encumbrances of any kind or nature.
(c) Kleve and Daniels represent and warrant, jointly and severally, that there are no claims, litigation, actions, proceedings, hearings or other administrative or judicial matters pending or threatened, or third party consents required from any person or entity, which would in any way affect the ownership of the subject automobile.
5 Non Performance or Breach by Lancksweert
Lancksweert expressly agrees that he and/or any person or entity on whose behalf Lancksweert is acting, or any person or entity who is acting on behalf of Lancksweert, breaches or fails to remit the complete and full payment as stipulated herein for the benefit of Kleve and Daniels, Kleve and Daniels withdrawl [sic] any agreements or representations, and shall reserve all rights to the subject automobile, as well as, any and all rights to pursue and necessary legal remedies and action.
9 New York Law
This Agreement will be construed in accordance with and governed by the internal laws of the State of New York without reference to the conflicts of laws principals [sic] thereof.
Authenticity of the Settlement Agreement
Mr Daniels' actual authority to conclude the Settlement Agreement
Apparent authority
(1) Where an agent acts without actual authority in respect of a transaction, he may nevertheless act with apparent authority where a third party reasonably believes, based on manifestations traceable to the principal, that the agent has authority to act on behalf of the principal;(2) Where a principal signs a power of attorney, but separately communicates to the agent that the scope of his authority is narrower than that set out in the power of attorney, the agent will continue to have apparent authority to the full scope of the grant with respect to a third party who is aware of the power of attorney and reasonably relies on the scope of the authority granted therein, but who does not know about the separate limitation.
Subsequent events after the Settlement Agreement
The Settlement Agreement is a valid and binding contract
Spare parts
Irrelevance of Ohio law
"…both in the court below and in their original briefs in this Court, the parties relied primarily upon New York authorities to support their respective contentions. It is not clear whether the parties did so because they believed that New York law governed or because they believed that there was no material difference between the laws of the two States. Whatever their reasoning, we find no grounds for reversal in the reference to New York law.
Because this is a diversity case, we must apply the choice of law rules of the forum State, in this instance, New York. Although New York courts generally accord deference to choice of law provisions in contracts…such provisions are not controlling and may be disregarded where the most significant contacts with the matter in dispute are in another State. Moreover, in the absence of a strong countervailing public policy, the parties to litigation may consent by their conduct to the law to be applied."
"When property held by the decedent at the time of her death is actually owned by another from whom possession is wrongfully withheld, such property is not property belonging to the estate and the party claiming ownership is not a creditor of the estate."
"Ohio law would therefore look to the agreement of the parties to determine whether title to goods had passed from seller to buyer. The fact that Kleve, and subsequently Ms Lawson might have retained possession of certain Ferrari Spare Parts and after the 1999 Agreement was consummated is not dispositive of title under Ohio law. Instead, the question of ownership of the rights in the Spare Parts would be determined by the 1999 Agreement."
Conclusion