Chartered Trust Ireland Ltd v Healy

• Jurisdiction: Ireland
• Judge: Mr. Justice Barron
• Judgment Date: 10 December 1985
• Neutral Citation: 1986 WJSC-HC 273
• Court: High Court
• Date: 10 December 1985

1986 WJSC-HC 273

THE HIGH COURT

Circuit Appeal

CHARTERED TRUST IRELAND LTD v. HEALY

CHARTERED TRUST IRELAND LIMITED

-v-

THOMAS HEALY AND JOHN COMMINS

Citations:

BRANWHITE V WORCESTER WORKS FINANCE LTD 1968 3 AER 105

HIRE PURCHASE ACT 1946

UNITED DOMINIONS TRUST (IRL) LTD V SHANNON CARAVANS LTD 1976 IR 225

WALL V NEW IRELAND ASSURANCE CO LTD 1965 IR 186

Synopsis:

EVIDENCE

Estoppel

Mistake - Sale of goods - Supplier of vehicle to be acquired by defendant - Transaction to be effected by hire-purchase agreement between finance company and defendant - Fraudulent sale by supplier to finance company - Hire-purchase agreement between finance company and defendant - Discovery of fraud - Action by finance company against defendant to enforce agreement - No title acquired by finance company - Defendant not estopped from pleading plaintiff's lack of title - (Ct. App. - Barron J. - 10/12/85)

|Chartered Trust Ireland Ltd. v. Healy|

AGENCY

Agent

Knowledge - Imputation to principal - Invoice supplied by defendant's secretary to fraudster - Secretary agreeing to conceal matter from defendant - Fraudster purporting to sell vehicle in name of defendant - No property acquired by buyer - Buyer claiming damages from defendant - Guilty Knowledge of secretary not to be imputed to defendant - Buyer's claim dismissed - (Ct. App. - Barron J. - 10/12/85)

|Chartered Trust Ireland Ltd. v. Healy|

SALE OF GOODS

Mistake

Fraud - Agent - Guilty knowledge - Whether imputed to principal - Second defendant being dealer in lorries - First defendant wishing to acquire vehicle advertised by fraudster - Transaction to be effected by purchase by plaintiff and by hire-purchase agreement with first defendant - Fraudster furnishing plaintiff with invoice from office of second defendant and recording sale to plaintiff - Invoice obtained by fraudster from second defendant's secretary who agreed to conceal matter from second defendant - Price paid by plaintiff by cheque delivered to fraudster - Vehicle delivered by fraudster to first defendant - First defendant engaging to buy vehicle from plaintiff on hire- purchase terms - Payments made by first defendant to plaintiff pursuant to hire-purchase agreement - Subsequent discovery that registration number of vehicle was false - Failure of consideration - Held that property in vehicle never passed to plaintiff by reason of mistake - Held that hire-purchase agreement a nullity - Held that first defendant not estopped from denying that property had passed to plaintiff - Held that first defendant entitled to succeed in counterclaim for recovery of sums paid to plaintiff - Held that guilty knowledge of secretary of second defendant could not be imputed to him and that plaintiff's claim against second defendant failed - (Ct. App. - Barron J. - 10/12/85)

|Chartered Trust Ireland Ltd. v. Healy|

MISTAKE

Sale of goods

Consideration - Failure - Fraud - Property not passing to buyer - Recovery of money paid by buyer - ~See~ Sale of Goods, mistake - (Ct. App. - Barron J. - 10/12/85)

|Chartered Trust Ireland Ltd. v. Healy|

Mr. Justice Barron

1 The Defendant is a sand and gravel contractor. Towards the end of 1978 he decided to buy an additional lorry for the purposes of his business. He saw an advertisement in the paper for such a lorry giving a phone number in County Armagh. He arranged a meeting with the advertiser in Dundalk. He met this gentleman whose name was Fleming at The Fairways Hotel, Dundalk, and went with him to his premises in Bessbrooke in County Armagh. He was shown a lorry with a Dublin registration which was suitable for his purposes. He was asked the price of £7,500 for this lorry. He had seen similar lorries in the course of his quest for an additional lorry and felt that the price asked was reasonable. Fleming asked him how he was going to finance the transaction and whether or not he would be able to get finance from a hire purchase company. He informed Fleming that he had done business before with the Plaintiff company and Fleming said that he would arrange the finance for him.

2 The evidence does not disclose fully how Fleming contacted the Plaintiff company. However, it is clear that he furnished to them a document which purported to be an invoice from John Commins in relation to a Leyland Rever 1977 lorry, chassis number 67992, registered number 889 OZA for a price of £12,500 less a trade in of a six wheel Ford for £5,000 leaving a balance of£7,500 which with VAT at 10% came to a total of £8,250. The Plaintiff company having received the application for finance for the purchase of this vehicle decided to accept the Defendant as a hirer. They made it a condition of granting the finance that the Defendant should pay off two other transactions which he had with them for a total settlement figure of £2,088. This settlement figure was apparently communicated to Fleming or whoever was acting on Fleming's instructions to arrange the deal with the Plaintiff company. When the arrangements had been made Fleming notified the Defendant that it was arranged and both of them went to the offices of the Plaintiff where they met Mr. Coyle the Manager and were shown the hire purchase agreement. I accept the Defendant's evidence on this point. Until this meeting the Defendant had been unaware of the existence of John Commins. He says that he became aware of his existence because he saw his name at the top of the invoice. He then signed the agreement and at the request apparently of Mr. Coyle gave a cheque for £2,050 and not £2,088 in favour of John Commins. At the same time the Plaintiff company made out a cheque for £6,162 also in favour of John Commins. Both of these cheques were given to Fleming who brought them to his bank in Newry where he endorsed both cheques John Commins and also R. Fleming.

3 The Defendant had already obtained delivery of the lorry from Fleming earlier in the same day. It appears that the Defendant asked Fleming for the tax book of the vehicle but Fleming told him that he had forgotten to bring it with him from the North of Ireland and that he would send it on to him. Fleming did not do this and despite many telephone calls to him by the Defendant never did so. The Defendant persisted in trying to obtain this book from Fleming for well over a year. During this period the Defendant or his driver were stopped by the Gardaí and asked for particulars of taxation of the vehicle. The Defendant explained that he hadn't yet got the log book. The Defendant says that this happened on very many occasions to his driver and that ultimately his driver refused to drive the vehicle. I do not accept the Defendant's evidence that the Guards stopped the lorry continually and that by reason of this he had to take it off the road and only used it thereafter occasionally when he was stuck for a vehicle. In my view he is indulging in an ordinary form of exaggeration brought about by hindsight. The reality of the matter is that the lorry was probably stopped on one or perhaps two occasions and as a result two things happened. First of all Mrs. Healy rang up the Motor Taxation Office and asked how one could get a duplicate tax book. She was told that she would be sent out a form and that she would have to set out on the form the name of the previous owner. Since she did not know the name of the previous owner she did not follow up this application. Secondly, though he continued to use the lorry the Defendant began to have suspicions about it. He told Fleming of these suspicions. The latter's reaction was to be expected. He appeared to offer to regularise the position. He took back the lorry ostensibly for this purpose and as one might have expected, the Defendant never saw the lorry again nor Fleming either.

4 The Defendant had been paying irregularly on foot of the hire purchase agreement and from time to time he was visited by representatives of the Plaintiff company seeking payment. Sometime in the month of September 1980 at a time when the lorry had gone back to Fleming he told Mr. O'Byrne, one of the Plaintiffs representatives, that there was a problem with the tax book which was preventing him from using the lorry and that it would be unfair to force him to pay regularly because of this. He asked for further time in which to pay the instalments owing and was told that there was a way in which such payments could be deferred. He was given a form either then or subsequently indicating how to apply for such deferment. In the event he did not sign the form but continued paying the instalments until sometime in 1983. He then ceased paying the instalments. He had had a number of other transactions and had completed all of those. On the 24th of January, 1984 the company served notice of termination and commenced these...