J U D G M E N T

Wednesday 31 January 2007

LORD JUSTICE SCOTT BAKER: Lord Justice Thomas will give the first judgment.

LORD JUSTICE THOMAS:

1. This is an appeal from the decision of Her Honour Judge Faber with the permission of this court against a judgment she gave for the return of a car to the claimant. The car had been purchased by the defendant to the action for £4,000. It is common ground that the issue which arises on this appeal is a pure issue of fact. It is a claim which ordinarily might be thought to fall within the small claims track and certainly within the fast claims track. The costs vastly exceed the sum in issue.

2. The claimant in the action, Mr Lee, was the owner of a Caterham 7 motor car. In 2000 he lent it to Mr Ferguson who lived on the World's End Estate, which was an estate owned by the Royal Borough of Kensington and Chelsea. When Mr Lee went abroad he allowed Mr Ferguson to use the car. Mr Ferguson parked it in the Edith Yard car park which residents of the World's End Estate were able to use. Mr Ferguson claimed that he had a right to park his car in the Edith Yard car park. The judge accepted that. There has been no appeal from that finding.

3. Mr Ferguson parked Mr Lee's car in the car park for a period of time. When the insurance and licence expired in 2001 he left the car there. In August 2002 he found it had disappeared. In June 2003 Mr Lee returned from overseas. The car was reported missing. It was found to be in the possession of Mr Crook, the defendant in the action.

4. Mr Crook's account was that he had bought the car from Mr Keen, the Part 20 defendant. He said that he had done so in March 2003 for the sum of £4,000. The precise status of Mr Keen, Mr Crook's knowledge of Mr Keen's position and of the circumstances in which Mr Keen had acquired the car were issues before the judge and are the subject matter of this appeal.

5. It is not in dispute that the Royal Borough of Kensington and Chelsea had leased the car park at Edith Yard to Metropolitan Car Parks Limited (a company now in liquidation). A director of that company, Mr Marks, considered that the Caterham 7 was not a car which the Borough had authorised to be parked at Edith Yard. He considered, therefore, that it had incurred fees of over £11,000. Under the terms and conditions of the Metropolitan Car Parks' arrangement, if the vehicle was not properly parked there, he was entitled to authorise its sale to recoup the fees.

6. In October 2002, Mr Marks showed Mr Keen three or more cars and asked to arrange for their removal. In November 2002, Mr Keen arranged for the removal of the Caterham 7 and two others. The judge found that, as Mr Ferguson had a right to park the car in the car park under the arrangements he had with the Royal Borough, he could do so without fee. The company therefore had no right to take away the car and anyone who acquired it either from the company or from someone to whom the company had sold it had no title. There is no appeal from that finding.

7. It is common ground that when the car was sold to him, Mr Crook acquired no title. Mr Lee was therefore entitled to the return of the car from Mr Crook and to the costs of the proceedings. He had made a claim for damages for loss of use, but in all the circumstances of the car not being usable for a long period of time that claim was not pursued.

8. In the Part 20 proceedings, with which this appeal is concerned, Mr Crook claimed an indemnity from Mr Keen on the basis, first, that he had sold the car to Mr Crook and he had therefore broken the implied warranty of title; and secondly, that there were express representations that he had good title and had recently acquired the car from Metropolitan Car Parks.

9. Mr Keen's defence was that he had made no representation, that he had acted as an agent, and that Mr Crook knew those facts.

10. The issues in this appeal relate to the findings the judge made in relation to the Part 20 claim and the issues I have summarised. She found that Mr Keen was the agent of the company to remove the car, and that if he sold it for a profit he was obliged to account for that to the company. She also found that Mr Crook knew that Mr Keen was not the owner of the car and that he was selling it as agent of the company. It was on the basis of that finding that the judge decided that Mr Keen was not liable to Mr Crook for any implied warranty as he was an agent. It was also clear that there had been no misrepresentation.

11. The issue before this court is whether the judge was properly entitled to make those findings. It is said that there is no evidential basis for them and that the judge failed to give reasons. It is helpful to look, as has been argued succinctly today, at the two issues separately. I turn, first, to the question of whether the arrangement between Mr Keen and Metropolitan Car Parks was a relationship of agency. The evidence was summarised by the judge at paragraphs 42-48 of her judgment. The relevant evidence on that issue was derived from statements made and the oral evidence given, of which we have transcripts.

12. In his witness statement Mr Marks said that Mr Keen acted under the authority of the company to remove and dispose of the vehicle. He felt that the car was of little value and that the cost of sale was beyond the realisation proceeds. He was glad that Mr Keen had sold it. He believed that Mr Keen had made very little profit and that he did other works for the company in lieu of payment.

13. Mr Keen in his witness statement said that he was asked by Mr Marks, the director of the company, to remove the car. He was to try to sell it and if there was money left over, to give it to the company. He restored the car and found Mr Crook as a buyer. There was little profit after deducting the costs of refurbishment, which had been extensive. He came to an arrangement with Mr Marks to do other works in lieu of paying over the small profit of £250.

14. As the judge rightly observed, when they were cross-examined on their statements, their oral evidence differed. When cross-examined, Mr Marks made it clear that his interest in the arrangement was that it did not cost the company money. He did not expect Mr Keen to account for any profit. However, it is important to observe that, consistently throughout his evidence, save on one occasion, he said that he believed that Mr Keen acted on behalf of the company. At one stage he said that Mr Keen did not sell the car for the company; but when re-examined about it, he again said that he had acted on the company's behalf.

15. When Mr Keen was cross-examined on his statement, he said that he had been asked to "get rid of" the vehicle. He had paid nothing to the company as the cost of disposal of the car exceeded the cost of the repairs and cost of the disposal of the other two cars. He considered that how he disposed of them was up to him. If the company had asked for the car back, he would have given it to them provided he had been reimbursed for what he had expended. He did not account to the company for the very small profit that he may have made, as he was under no obligation to do so. He gave evidence about the acquisition of the log book. He maintained, however, that throughout he acted as an agent.

16. The judge set out her conclusions in paragraphs 70-73 of her judgment. In essence she found that the evidence given by the witnesses was not consistent with what had been said in their statements. She said:

"70. Mr Marks' witness statement described a classic agency arrangement. Reference is made to the lien clause permitting the company to sell the vehicle and apply the sale proceeds to the repayment of outstanding parking charges. It is said that 'at all times James Keen was acting under the authority of Metropolitan Car Parks to remove and dispose of this vehicle'. Finally it is said that in respect of the profit Mr Keen made he did other works for the company in lieu of payment. Mr Keen's statement was to the same effect, namely that monies left over from sale would be given to the company and that in the event he did works for the company instead of paying it the £250."

The judge concluded that Mr Keen and Mr Marks blatantly changed their evidence on significant issues; they were not reliable witnesses. She also made that finding about Mr Crook. She then made the findings of fact which I have set out.

17. It has been argued succinctly before us today by Mr Macpherson for Mr Crook that the evidence points to a classic case where Mr Keen acquired the title and sold it as a principal. Miss Allsop has argued on the contrary that it is a classic case of agency. The principal points made by Mr Macpherson were that Mr Keen had spent money on restoring the car, that he had retained the vehicle and had use of it for four months, that he had applied in January 2003 for a log book and an MOT certificate, that he might have kept the vehicle, and that he had never met anyone else from the company other than Mr Marks. He contends that, although there may have been an agency to remove the vehicle, in the circumstances, particularly on the basis of the evidence that no one accounted and answers to the effect that Mr Keen did not think he was under a duty to account, this was plainly a case of sale by Mr Keen and not agency.

18. On the other hand, Miss Allsop submitted that regard must be had to the whole of the evidence and in particular to the statements, which are quite clear, as well as to what Mr Marks had said repeatedly as to Mr Keen acting on behalf of the company. Secondly, she went on to say that the agency contained a degree of discretion and that Mr Keen was to dispose of the car as he thought fit. It was assumed therefore that the parties had not given a lot of thought to what would happen if there was a profit because the car would otherwise have gone for scrap. But if it was disposed of at a profit, then there would have to be an account. She says that it is common ground that Mr Keen must have acted as an agent when he removed the car. There was nothing to show that there was any change in his status.

19. In my judgment it is unfortunate that the learned judge did not give fuller reasons for her decision. But it seems to me on an examination of the whole of the evidence, which I have endeavoured to summarise, that she was entitled to come to the conclusion which she did. In both their oral evidence and in their written statements, Mr Marks and Mr Keen each said that they thought that the car was being disposed of on behalf of the company. There is nothing, it seems to me, inconsistent in what actually happened with that position. There is little in the issue in relation to the log book. The carrying out of the repairs by Mr Keen was entirely consistent with the position that he was putting the car into a condition where it could be sold, but he would then have to account.

20. In looking at the answers that they gave to the hypothetical questions it seems to me that the learned judge, who had the benefit of seeing and hearing the witnesses, was entitled to give less weight to them. She was entitled to look at the reality of what was before her, namely a car which was thought to be of little value and that those concerned had never turned their minds to a more analytical examination of the question of agency. To my mind it is fanciful to think that there would have been an analytical analysis of the duties to account and therefore, on the hypothetical answers given, the judge was entitled to take the view she must have done, if she was to reach the conclusion she did. It seems to me that on the evidence that was before her, although it is regrettable that she did not give fuller reasons for her decision, the judge was entitled to reach the conclusion that she did.

21. The second issue can be dealt with more shortly. Even if there was an agency, as the judge was entitled to find, nonetheless Mr Keen would be liable if Mr Crook had no knowledge of the agency because he would be acting as an agent of an undisclosed principal. The issue of knowledge therefore was essential to consider. In relation to that the important evidence given by Mr Crook was in his witness statement. He said that Mr Keen was a casual acquaintance, and he described the circumstances in which he had seen the Caterham 7 car, a car he had "always hankered after". He then described the circumstances in which he had acquired the car. He said:

"6. .... I said something along the lines of 'I have always wanted one of them'. Mr Keen responded by saying that the vehicle was for sale. He went on to explain that there was a story behind the vehicle. He was acquainted with a director of the company, Metropolitan Car Parks. Metropolitan had been in control of a particular car park in London (and at that stage I was not aware of the address) and had encountered a situation whereby a number of vehicles had been abandoned in the car park. These vehicles were either parked without proper authority or had been parked for a period over and above that which was permitted. Metropolitan had given the owners the opportunity to remove those vehicles by placing notices on them giving notice of an intention to remove and dispose but, even after these notices had expired, certain vehicles remained in the car park. Metropolitan had invited Mr Keen to remove the vehicles and I gather that some remuneration passed between him and Metropolitan Car Parks in respect of the vehicles that were being removed.

7. Keen had moved a number of vehicles and had retained the Caterham motor vehicle, perhaps on the basis that it had some value."

22. In her judgment the judge referred to the word "remuneration" as being consistent with the contract of agency and inconsistent with a purchase by Mr Keen from Metropolitan Car Parks.

23. In his oral evidence Mr Crook sought to retract the statement he had made in relation to the knowledge of Metropolitan Car Parks. He said that he did know of the car park company's name. The judge attached importance to that fact. Mr Crook also made it clear in his evidence that he was never told that Mr Keen was the owner of the car; he had assumed that to be the case. It is important to refer to a passage in his cross-examination which arose out of a letter that had been written in July 2003 by Mr Crook's solicitors to the original claimant in the action, Mr Lee. In that letter it was pointed out that the car had been purchased in good faith from a third party and that that third party in turn purchased it from elsewhere. The letter went on:

"Before purchasing the vehicle that is in his possession our client made extensive enquiries concerning previous ownership and the car's history. He made enquiries of Caterham Motor Vehicle, Arch Motors and Manufacturing Company Limited and the Lotus Seven Owners Club. He has been told that prior to his ownership the vehicle was abandoned, partly dismantled, in a car park for at least six years. He has been told anecdotally that as a result of the vehicle's abandonment and unpaid parking charges title of the vehicle may well have passed to the owner of the car park in question. In that that suggestion has been made, we invite you to disprove it."

When cross-examined about that letter, Mr Crook was asked whether that was what Mr Keen had told him. He said:

"He actually said that the car was being removed because of unpaid parking charges and then the company has the right to sell the car.

Q. He told you that the company had the right to sell the car?

A. For the unpaid parking charges so they had the right to dispose of it how they see fit."

He went on to say that he was not told by Mr Keen that Mr Keen was the owner of the car, but he had assumed that that was the position.

24. The other aspect of Mr Crook's oral evidence to which it is necessary briefly to refer is that which he gave in relation to the car's log book. In his statement he said that he had learnt about the log book after the acquisition of the vehicle; but in his oral evidence he at first said that he had learnt of that position and that Mr Keen was shown as the owner on the log book prior to purchase. He had to retract that in re-examination.

25. The judge concluded that Mr Crook was an unreliable witness. Although Mr Macpherson has sought to attack that finding, it seems to me, on the basis of the manifest inconsistencies that existed between his statement and his oral evidence, that the judge was entitled to take the view she did of his credibility.

26. The judge also found Mr Keen to be unreliable. In his written statement he said very little about the sale. In his oral evidence he accepted that in January 2003 he had registered the car in his name with the DVLA. He went on to say that he had never discussed who the owner was, but that he had merely given the history. He confirmed that he considered that the account given in Mr Crook's statement was what had happened.

27. The question that arises is: on the basis of that evidence was the judge entitled to find that Mr Crook knew, first of all, of the existence of an agency; and secondly, that Mr Keen was not the owner of the car? Again the judge did not set out in her judgment any reasons for her conclusion. It seems to me that on the basis of the evidence before her, looking at it as a whole, she was entitled to come to the view, first of all, that she did not accept Mr Crook's evidence as in any way reliable, and that taking the statement of Mr Crook and the answers that he had given it was reasonable to infer that he knew that Mr Keen was selling the car on behalf of Metropolitan Car Parks Limited and that he was not the owner. It seems to me that she was entitled to attach considerable weight to what she inferred, having had the benefit of seeing Mr Crook give evidence, to be Mr Crook's change of story in respect of the important factors as to the detailed knowledge. She was also entitled to give weight to the admissions against interest that he had made in relation to his examination of the history of the car.

28. It seems to me that, looking at the evidence as a whole, though it is regrettable that no fuller reasons were given for her conclusions, the learned judge was entitled to come to the conclusions that she did. If that is right, then the claim on the basis that there was a misrepresentation fails in limine simply because there was no evidence to sustain it. The claim that Mr Keen was liable as the agent for an undisclosed principal also fails because Mr Crook would have known of the fact of agency. For those reasons I consider that this appeal should be dismissed.

29. LORD JUSTICE SCOTT BAKER: I agree. I, too, would dismiss the appeal.

ORDER: Appeal dismissed with costs; detailed assessment of appellant's costs.