Lloyd's Maritime and Commercial Law Quarterly
VICARIOUS LIABILITY FOR FRAUDULENT MISREPRESENTATIONS
Marcus Roberts*
1. Quinn v. CC Automotive
In Quinn v. CC Automotive Group Ltd (t/a Carcraft)
1 the Court of Appeal had to decide which one of two innocent parties “should bear the loss caused by a rogue”,2 one Abeed Khan. Mr Quinn possessed a silver Jaguar car, the subject of a hire purchase agreement with Black Horse Ltd. He wanted to buy a red Jaguar, so he visited the showroom of the respondent (trading as Carcraft). At the showroom he met Carcraft’s employee, Mr Khan, and agreed to buy a blue Jaguar (no red ones were available). Mr Quinn agreed to pay £7,500 as well as his silver Jaguar in part exchange. As part of the deal, Carcraft promised to clear his outstanding finance with Black Horse Ltd and to arrange hire purchase financing for the blue Jaguar. According to the trial judge, this was not an unusual arrangement.
Later, Mr Khan telephoned Mr Quinn’s wife and told her that he had found a red Jaguar, but that it was in Bury. This did not deter the Quinns, who, after seeing a computer image of the red Jaguar at the respondent’s showroom, decided to buy it. Nine days later, Mr and Mrs Quinn met Mr Khan at a motorway service station. There, they cancelled the agreement for the blue Jaguar and signed a finance agreement for the red one. The price was £7,500 in addition to the part exchange of the silver Jaguar; Carcraft would arrange the finance and would clear the outstanding debt with Black Horse Ltd.
Mr Khan rang a week later to say that he was collecting the red Jaguar and asked the Quinns to meet him at the same service station. He also said that a further £700 was required as Black Horse Ltd had “not allowed enough finance”. When Mrs Quinn replied that they could only afford £400, he accepted that and said that the balance could be paid later. The red Jaguar was duly exchanged at the service station in return for the £400 and the silver Jaguar. It was found at trial that neither Mr Quinn nor his wife thought it odd that they met Mr Khan at the service station and had completed their arrangements there. Instead, they thought that he was merely doing everything possible to help them.
Mr Quinn cancelled his finance payments to Black Horse Ltd, believing that they would now be handled by Carcraft. He subsequently received a letter from Black Horse Ltd advising him that he owed it money. It emerged that Mr Khan had not settled the finance and had instead sold the silver Jaguar to a bona fide purchaser for value without notice of the fraud. It also emerged that the red Jaguar had never belonged to Carcraft.
* Senior Tutor, University of Auckland. The author would like to thank Professor Peter Watts of the University of Auckland for his advice and assistance in drafting this case note.
1. [2010] EWCA Civ 1412.
2. At [1].
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