The defendant finance company alleged that the plaintiff car dealer, by its conduct, was estopped from denying the authority of their (rogue) customer to sell the car at issue, because they had permitted the customer, unkown to them, to take possession of the car and its registration book without having made any or sufficient inquiries about him and before he was accepted as a client by the hire purchase company.
Held: By entrusting the car to the stranger together with a document which clearly stated that it did not prove legal ownership, the plaintiffs were not making any representation that the stranger was entitled to deal with the car as his own, so as to estop them from asserting their own title. The only issue fell to be decided in that case was one of the nature of representation, if any, made by the true owner by giving possession of the car and the registration book to a stranger. The question of estoppel by negligence was specifically ruled by the court not to be the issue to be determined.
Hodson LJ (majority) said: ‘In my judgment the case fell to be decided not upon a consideration of negligence but upon what is the nature of the representation made by the delivery of the registration book. The book itself is not a document of title; its terms negative ownership and it contains no representation by the plaintiffs or anyone else that the thief was entitled to deal with the car as his own. I think (counsel for plaintiffs) was right in saying that while a person in possession of a chattel may reasonably be thought to be the owner when he offers it for sale, the case of a person in possession of a motor-car does not differ in kind although the absence of the registration book detracts from the signification of possession.’
Denning LJ (dissenting) referred to Dixon J’s ‘well-considered analysis’ of estoppel in Grundt as ‘the most satisfactory that I know.’
Judges:
Lord Denning MR, Hodson LJ
Citations:
[1957] 1 QB 371
Citing:
Cited – Grundt v Great Boulder Proprietary Gold Mines Limited 8-Oct-1937
(High Court of Australia) Parties to a transaction may choose to enter into it on the basis that certain facts are to be treated as correct as between themselves for the purpose of the transaction, although both know that they are contrary to the . .
Cited by:
Cited – Prime Sight Ltd v Lavarello PC 9-Jul-2013
(Gibraltar) Parties to a contract for the sale of land including the appellant company declared a purchase price which both knew to be false. Faced with insolvency proceedings, the appellant sought to challenge a claim for the full amount.
Lists of cited by and citing cases may be incomplete.
Estoppel
Updated: 04 May 2022; Ref: scu.519656