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Published: Fri, 02 Feb 2018
All courts bind all lower courts and themselves
Although the judgements for Ingram v little and Lewis v Averay seem to be conflicting and thus offer the impression that they are distinguishable on the facts, in actual fact it can be argued that the two cases are not. This view is reinforced by Lord Denning in Lewis v Averay stating that ‘the materials facts in each case are quite indistinguishable the one from the other’. This is because the basic elements in each circumstance appear to be the same: there is a face-to-face agreement between the original owner of the car and the ‘rogue’; a cheque was used as the form of payment which was then dishonoured; the original owners of the car seemed to be induced by ‘the rogue’ who lied about his identity to enter into a contract; and the car was passed onto an innocent third party who had acted in good faith when purchasing the vehicle from ‘the rogue’. However, since these two cases are similar, the judgement that has been reached in Lewis v Averay should have ideally followed that of Ingram v Little, but as aforementioned, the judgements are conflicting, thus it can be inferred that Lewis v Averay has in fact overturned Ingram v Little.
What central issue are the courts in Ingram v Little and then Lewis v Averay called upon to resolve? What are the possible resolutions of this issue and what consequences flow from the different ways in which this issue can be resolved?
The central issue that the courts in both cases are called upon to resolve is whether a mistake in an individual’s identity renders a contract void or voidable and whether the title of the property has passed from the original owner to ‘the rogue’, enabling him to pass it on. There are three possible resolutions of this issue; firstly, it can be argued that if no title of the vehicle has been passed onto ‘the rogue’ from the original owner, then he has no right to sell it to a third party, which in turn means that no title has been transferred to the defendants in each case, Mr Little or Mr Lewis. As a result, the car should be returned to the original owner or they would be entitled to recover damages for conversion. This idea was applied in Ingram v Little, since the court ruled that the two ladies were able to recover £720 from Mr Little.
The second option is that the title of the car has been transferred to the ‘rogue’ when the agreement was formed between the two parties, therefore ‘the rogue’ is able to sell the vehicle and pass on the title. This is based on the argument that the identity of ‘the rogue’ was not of vital importance when the original owners were deciding whether or not to sell the car to him during the face-to-face negotiations. Therefore the fact that he lied about his name did not have any effect which would prevent a contract from being formed, albeit it would be voidable for fraud. Thus it can be inferred, since the title of the car has transferred to ‘the rogue’, he was able to pass it onto the innocent third party who bought the vehicle in good faith and therefore acquired the right of ownership. Consequently, the third party should be allowed to retain the car and the burden is placed on the original owners. This principle was adopted in Lewis v Averay where it was decided that the car should belong to the second victim Mr Averay.
The third approach branches out from the second option but it leads the same consequence where the third party who acquired the vehicle in good faith should be permitted to retain it. Lord Denning, in Lewis v Averay was of the opinion that ‘the property in the goods did not pass until the seller let the rogue have to the goods’; this seems to suggest that although ‘the rogue’ misrepresented himself as a different person, a contract has been formed as the original owners willingly handed over the car and the log book, accepted the cheque and signed the receipt. Hence a good contract has been formed under which the title of the car has passed to ‘the rogue’ and later to Mr Averay. Lord Denning furthers this point and says that this is so ‘unless and until [the contract] is avoided’. This means that unless Mr Lewis sues ‘the rogue’ for fraud, which would mean the contract can be avoided, before he sells the car to the ultimate buyer, then the original owner should not have the vehicle returned to him since he is no longer entitled to own it. Based on this argument, the appeal was allowed and Mr Averay, the ultimate buyer, was permitted to retain the car.
What ‘rules’ does each court believe itself to be bound by in resolving this central issue?
It appears that the courts have used two ‘rules’ to resolve the central issue in each case. Firstly, the courts have applied the doctrine of judicial precedent, which states that all courts bind all lower courts and some courts also bind themselves, through citing different cases. One significant case that the judges have referred to in Ingram v Little and Lewis v Averay is Phillips v Brooks Ltd. This case was held in the House of Lords, which was at that time the highest court in country. Since both Ingram v Little and Lewis v Averay were held in the Court of Appeal, if in accordance to the doctrine of binding precedent, the decisions should have followed that of Phillips v Brooks. However, whilst the judgement was approved in Lewis v Averay, it was distinguished in Ingram v Little.
The second rule the courts have been concerned with is the law of mistake of identity. The key issue is whether the identity of the rogue in each case was a matter of vital importance when the original sellers were deciding to sell the car. It was found that in Ingram v Little, the rogue’s identity was fundamental as it was assumed that the two sisters intended to sell the car only to ‘P.G.M. Hutchinson’ in Caterham and not the person who was physically present, since Miss Hilda Ingram went to the post office and checked the telephone directory, which confirmed the existence of such a man under the name ‘Hutchinson’. As a result, the court ruled in favour of the original sellers and declared the contract void as the rogue had made the ‘fraudulent misrepresentation’ before the contract was completed. On the other hand, the court found in favour of Mr Averay in Lewis v Avery, as it was held that Mr Lewis had intended to deal with the person before him and whether he was the actor Richard Greene or not was not important. Thus the contract was said to be voidable and not void.
Which of the conflicting judgements in Ingram v Little and Lewis v Averay do you find persuasive and what, for you, makes them so?
The judgements in the two cases are conflicting and this seems to be based on what attitude the court has in deciding who should bear the responsibility and burden or absorb the loss of a contract induced by the misrepresentation of identity by the second party. In Lewis v Averay the court ruled that the responsibility lay with Mr Lewis the first victim and so the car was permitted to be retained by Mr Averay. This judgement seems to be influenced by the view that Mr Lewis should have been astute, since although he purported to wait ‘until the cheque was cleared’ before he was willing to let ‘the rogue’ have the car, he did not expressly declare his apprehension, and instead he merely said that ‘there were one or two small jobs he would like to do on the car before letting him have it’. Furthermore, after seeing the special pass of admission to Pinewood Studios, Mr Lewis was immediately satisfied that the man he was dealing with was truly Mr Richard Greene, and so let him take the car and log book without waiting for the cheque to be cleared, which implies his carelessness. On the other hand, it can be argued that Mr Lewis had reasonable grounds in believing that the man before him was Mr Richard Greene. This is because taking into account the era this case occurred in, £450 was a relatively significant amount of money and it would have been logical to assume that a famous actor would be able to afford to pay it, and moreover, ‘Mr Richard Greene’ would have a reputation to uphold, thus it would be highly unlikely that he would allow his name to be ruined by dishonoured cheques. However, although these may be valid arguments, but when considering who should ‘shoulder’ the responsibility in the absence of ‘the rogue’, as if he did not disappear, it would be appropriate that all costs should be paid by him to the first and second victims, it would seem unfair that the innocent third party, Mr Averay, who had bought the car in good faith and had no reason to doubt the rogue’s identity, had to; thus it can be inferred that Mr Lewis should bear the loss since in accepting the rogue’s cheque, he took the risk that the cheque may be dishonoured. Furthermore, in taking the risk Mr Lewis may have induced a knock-on effect, where once in possession of the car, the rogue sells it to Mr Averay who could have in turn sold it another party and so on. If this occurs, then should the car be returned to Mr Lewis once he discovers that the cheque is dishonoured? Who should be the one to absorb the loss if such a situation arises? Thus, in deciding that Mr Lewis should bear the loss, the court has taken a practical approach, as otherwise, where should the cut off point be?
However, on the contrary, in Ingram v Little the court ruled that the two sisters should be entitled to recover damages for conversion, which implies that the burden was placed on the defendant, the ultimate buyer. However, since the facts of the two cases appear to be indistinguishable, it does not seem fair that innocent third party should have to absorb the loss, as the court also ruled that the defendant had bought the car in good faith. Furthermore, one could argue that perhaps if the plaintiffs had been different people such as white middleclass men and not elderly women, the court may have ruled differently and in favour of the defendant. Therefore due to all the above reasons, the judgement in Lewis v Averay appears to be more persuasive than that of Ingram v Little.
Hanson has answered the question ‘What happens if a judge does not like a precedent?’ with the following two quotations: ‘If a judge of reasonable strength of mind thought a particular precedent was wrong he must be a great fool if he couldn’t get round it’ [Lord Radcliffe 1984]; and ‘I am unable to adduce any reason to show that the decision which I am about to pronounce is right – but I am bound by authority which of course it is my duty to follow’ [Per Buckley LJ 1915]. Discuss which of these statements is most applicable to the decisions in either Ingram v Little or Lewis v Averay.
It appears that the first quotation by Lord Radcliffe is most applicable to the decision in Lewis v Averay. This is because whilst the facts of this case and that of the earlier case, Ingram v Little, seem to be the same, Lord Denning did not follow the decision made in Ingram v Little where the original buyers were entitled to recover damages for conversion based on the judgement that the identity of the rogue was fundamental to the contract and so since it was misrepresented, the contract was held to be void. Instead he asserted that ‘I do not…accept the theory that a mistake as to identity renders a contract void…the fact that one party is mistaken as to the identity of the other…only means that the contract is voidable’. Moreover, he stated that ‘as I listened to the argument…I felt wrong that an innocent purchaser (who knew nothing of what passed between the seller and the rogue) should have his title depend on such refinements’; as a result, he ruled in favour of the ultimate buyer for him to retain the car. Thus in doing so, he has set aside the precedent established in the earlier case and has effectively overturned it, even though he did not expressly state that he is overturning it. As a result, it can be argued that the second quotation is not applicable here in this sense, since it claims that one must abide by precedent even if there is no strong reason to support it.
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