High Court of Ireland Decisions

24 February 1995

KINLEN J:

This matter had been dealt with by His Honour Judge Lynch on the 12 November, 1993.

The Plaintiff is a senior agricultural specialist and is working at the premises of the American Embassy at Ballsbridge, Dublin. In May, 1992 he purchased a Volvo 440 motor vehicle, registration number 91 D 20565, from Huet Motors (Dublin) Limited for the price of £10,250. He arranged his own financing and as far as Huet Motors (Dublin) Limited were concerned it was in fact a cash transaction.

A receiver was appointed to Huet Motors (Dublin) Limited on the 29 July, 1992 and a liquidator was appointed to that company on the 17 August, 1992.

The Plaintiff, on the date of purchase was the only person in possession of the vehicle, registered it in his name and comprehensively insured it in his own name with the New PMPA Insurance Company. On purchasing the car he registered his address at that time on the registration book. However, on retaxing the car in July/August, 1992, he was in the process of moving house and in the circumstances he requested that the book be returned to him c/o the American Embassy, as he feared it might be lost. The Embassy address was entered on the registration book.

Early on the morning of Friday, the 27 August, 1993, he received a telephone call at the Embassy of the United States of America, from a Garda Andy Keegan, of Donnybrook Garda Station, who advised him that he, the guard, had been informed by the Defendant that it was their intention to repossess the said vehicle from where it was parked, on the corner of Eglington Road and Clyde Road, adjacent to the Embassy. The Plaintiff looked out the window and found that the car had already been removed. He had no knowledge whatsoever that the Defendant claimed ownership of the vehicle and during the fifteen months when the vehicle was in his possession at no time did the Defendant, its servants or agents or the receiver, or liquidator of Huet Motors (Dublin) Limited contact him in relation to the motor vehicle.

The Circuit Court granted an interim injunction in the particular circumstances of this case to restrain the Defendant from disposing of the vehicle. The Plaintiff says that the repossession from adjacent to his place of work, was in a manner which brought it to the attention of his superiors, and that he was anxious to be in a position to show his workmates and his superiors that he had the same car. The Defendant made no effort to contact the Plaintiff. Prior to his purchasing it, it was openly for sale at the premises of Huet Motors (Dublin) Limited. That company was registered as the previous owners but the Defendant made no effort at that time to assert their ownership of the vehicle or to prohibit the sale of same by the said Huet Motors (Dublin) Limited. The registration book and the certificate of motor insurance were produced to the Court. The Defendant, by a letter of the 27 August, 1993, states:-

"The car in question is subject to a lease agreement in favour of ICC Finance Limited and in accordance with the terms thereof the title vests in ICC Finance Limited. Accordingly your client is not entitled to the return of the vehicle. The vendor to him, Huet Motors (Dublin) Limited, had no authority or title to sell".

There is also a receipt dated the 22 May, 1992 stating that the sum of £10,250 was received from Mr Michael Hanley by Huet Motors. The Plaintiff's case is based on two Affidavits by the Plaintiff, with exhibits and the Defendant's case is dependant on two Affidavits sworn by their credit control manager, Edward Kingston, together with exhibits.

It would appear that ICC Finance Limited purchased the Volvo 440 motor vehicle from Huet Motors (Dublin) Limited for the sum of £12,260, inclusive of VAT on the 23 May, 1991. It was then leased for a fixed three month period from the 24 May, 1991 to Tipperary Rent-a-Car Limited. That purchase and lease were entered into with a further agreement between the ICC Finance and Huet Motors (Dublin) Limited that at the end of the aforesaid three month lease period, Huet Motors (Dublin) Limited would repurchase the vehicle at an agreed price of £9,305.78 exclusive of VAT. This arrangement was one of seventeen similar company arrangements in respect of other vehicles which ICC Finance Limited and Huet Motors (Dublin) Limited entered into in or about the month of May, 1991. These lease/rental agreements were registered with the Irish Credit Bureau.

At the end of the three month leasing period with Tipperary Rent-a-Car Limited, the vehicle was not bought back as agreed by Huet Motors (Dublin) Limited. Instead a new contract was entered into between ICC Finance Limited and another company by the name of Fleetlink Limited, which was an associate company of, and wholly owned by, Huet Motors (Dublin) Limited. The agreement with Fleetlink Limited was for a lease of the aforesaid vehicle for a fixed period of twelve months from the 28 January, 1992 and again there was an agreement with Huet Motors (Dublin) Limited that it would buy back the aforesaid vehicle at a fixed price of £6,665.20 exclusive of VAT at the end of the lease period.

The tax book of the vehicle was initially retained by ICC Finance. However, a Mr McCarthy, who was both a director of Huet Motors (Dublin) Limited and Fleetlink Limited, requested the tax book so as to tax the vehicle. The tax book was given to him for the purpose of having the vehicle taxed. Fleetlink Limited is a company which leased vehicles and hired vehicles for short periods to third parties. It was not in the business of retailing cars to the public. Huet Motors (Dublin) Limited went into liquidation and the liquidator advised the Defendant company of the names and address of the persons whom he believed were in possession of the various vehicles, the property of the Defendant company. Appropriate enquiries were made and it was discovered that the persons whose names were furnished either were not in possession of the vehicle or were not resident at the address given and supplied by the liquidator. It has been the experience of the Defendant company that where a person is notified that the Defendant company wants the vehicle in question returned because of failure to pay the rentals, or for some other breach of the agreement between the Defendant company and a lessee, invariably the vehicle is not returned and it becomes very difficult for the Defendant company to obtain possession of the vehicle. Because of this experience the Defendant company has adopted the practice of repossessing the vehicles which it owns and at the same time advising the local gardai, where the vehicle is repossessed, of such repossession. That was the practice adopted in this case. The Defendant company did not consent to Fleetlink Limited parting with possession of the said vehicles to anyone, not alone Huet Motors (Dublin) Limited, for the purpose of selling same to an innocent third party. The Defendants say they did not intend to cause any embarrassment to the Plaintiff and if in fact they did, they are prepared to write to his employers or superiors advising them of the circumstances surrounding the matter and the reason for the Defendant company repossessing the vehicle. It is accepted by the Defendant company totally, that the Plaintiff herein was, and is, an unfortunate and innocent party, and a party who acted in good faith in the purchase of the vehicle in question from Huet Motors (Dublin) Limited.

It seems clear that both parties here acted in good faith and were innocent of any wrongdoing, although the Defendant, with its experience, might be regarded as acting in a fairly cavalier manner. As a result of discovery it would appear that there was a series of post-dated cheques paid to the Defendant that were drawn on the account of Huet Motors (Dublin) Limited, and not on the account of Fleetlink Limited, during the time when the alleged lease to them was in existence. It is reasonable to assume that the Defendant knew that the vehicle was in the possession of Huet Motors (Dublin) Limited or leased to them. When I said that the behaviour of the Defendant was a little cavalier, I do think that it might have checked the corporation file. The Court is satisfied that the vehicle was at all relevant times in the possession of Huet Motors (Dublin) Limited, who was a mercantile agent. It would appear that it was indulging in leasing, at least on one occasion, to a wholly owned subsidiary to provide a system of cash flow. Huet Motors (Dublin) Limited was in possession of the vehicle and in possession of the tax book. Although in fact they did not have a legal title by virtue of the provisions of Section 25 of the Sale of Goods Act, 1893 and of the Factors Acts (and particularly S 2(1) of the Factors Act, 1889), they could and did give a good title to the vehicle.

Section 25(1) of the Sale of Goods Act, 1893 provides:-

"Where a person having sold continues or is in possession of the goods . . . the delivery or transfer by that person . . . of the goods . . . under any sale, pledge or other disposition thereof to any person receiving the same in good faith and without notice of the previous sale shall have the same effect as if the person making the delivery or transfer were expressly authorised by the owner of the goods to make the sale."

I am impressed by the reasoning of the English Court of Appeal in Worcester Works Finance Limited v Cooden Engineering Company Limited [1971] 3 ALL ER 708.

In the circumstances I am satisfied that the learned Circuit Court Judge was correct in the decision he reached. It does seem to me that the Defendant here could have retained the tax book and indeed been registered. I assume that it was not registered, because, it does not like to admit to an ultimate purchaser that there have been several registered owners.

I was referred to Staffs Motor Guarantee Limited v British Wagon Company Limited [1934] 2 KB 305; and Astley Industrial Trusts Limited v Miller (Oakes third party) [1968] ALL ER 36 and Chalmers "Sale of Goods" 18th edition at p 295. While clearly the ICC Finance was not involved in any fraudulent transaction, it was, as I have found, cavalier in its approach and it, I have no doubt, has caused much strain and distress to the Plaintiff.

While the Staffs Motor Guarantee Limited v British Wagon Company Limited would seem to support some of the Defendant's submissions, I would prefer the reasoning in the Worcester Works Finance Limited v Cooden Engineering Company Limited, [1971] 3 ALL ER 708.

The Civil Bill claims, inter alia, mandatory injunction directing the Defendant to deliver up possession of the said motor vehicle to the Plaintiff.

The Plaintiff makes a bald claim for damages but does not indicate whether this should be negligence, conversion or detinue. Each of these would be a separate head of damage and should be specifically pleaded. What is one to make of the bald claim for "damages"? The only plea in the endorsement of claim which would help to answer this question is in paragraph 5. It sets out that the Defendant has converted the said motor vehicle to its own use. Therefore, this case should be decided on the basis of a claim for conversion, not a claim in detinue (which entitles one to the return of the vehicle and damages) or a claim in negligence.

I would wish to be addressed on what losses, if any, should be awarded as damages in a claim based on tort of conversion. I would refer to McGreggor on damages 14th ed paras 1087 -- 1089 and particularly to the quotation from Denning LJ (as he then was) where he says:-

"It is an action against him because he has had the benefit of the goods. It resembles, therefore, an action for restitution rather than an action of tort. But it is unnecessary to place it in any formal category".

The author goes on to say that:-

"Looked at from this angle the Plaintiff could always recover beyond his proved loss to the extent of the benefit conferred on the Defendant by his use of the goods but it would seem that for Denning LJ this same result could have been arrived at in an action of conversion as much as in one of detinue."

In England detinue is gone by statute.

Detinue can include damages from the moment of detention to return of the chattel and special damages (Bullen and Leake, 10th Edition, p 317). Damages must be assessed at the date of judgment, not at the date of refusal which is a normal proof of detinue (see Rosenthal v Alderton & Sons Limited, 1946 KB 374, CV Stacks v Mikloo, [1948] 2 KB 23 and MacMahon and Binchy Law of Torts, 2nd ed p 531).

I find the proposition by Denning LJ of subsuming these two distinct torts into a claim for restitution very attractive. It seems to me that the trial Judge should look at all aspects of the case and decide the relevant periods and the nature of damage having regard to all the particular circumstances of each individual case. The matter should be clarified by statute.

Proceedings had been instituted by the Plaintiff against the Defendant for defamation. I was asked to postpone making any Order until that matter had been determined. I had indicated that I would not make any Order until I had been fully addressed on the nature of the claim mentioned in the Civil Bill and what were the appropriate parameters of such a claim which I believed to be based on conversion. I was open, of course, to argument because in fact detinue constitutes negligence. When the defamation action came to Court it was settled. And that included damages arising in the present case. The Plaintiff is in fact in possession of the vehicle. In the circumstances and by consent I am dismissing the appeal and awarding the Plaintiff costs in both Courts, with a certificate for Senior Counsel for the appeal.