Shogun Finance Ltd v Hudson
| Shogun Finance Ltd v Hudson | |
|---|---|
A Mitsubishi Shogun
|
|
| Court | House of Lords |
| Decided | 19 December 2003 |
| Citation(s) | [2004] 1 AC 919; [2003] UKHL 62 |
| Transcript(s) | Decision from parliament.uk |
| Case history | |
| Prior action(s) | [2001] EWCA Civ 1000 |
| Court membership | |
| Judge(s) sitting | Lord Nicholls of Birkenhead, Lord Hobhouse of Woodborough, Lord Millett, Lord Phillips of Worth Matravers, Lord Walker of Gestingthorpe |
| Keywords | |
| mistaken identity, rescission | |
Shogun Finance Ltd v Hudson [2003] UKHL 62 is an English contract law case decided in the House of Lords, on the subject of mistaken identity as a basis for rescission of a contract. The case has been the subject of much criticism in failing to effectively clarify the area of mistake to identity.
A rogue went to a dealer to buy a Mitsubishi Shogun on hire purchase. The rogue told them that his name was Mr Patel and produced Mr Patel’s driving licence. The dealer communicated with Shogun Finance, which did a credit check on Mr Patel. Finding no problems, Shogun Finance authorized the hire purchase agreement and the rogue drove away.
The rogue then sold the car to Mr Norman Hudson, who had no knowledge that the vehicle belonged to Shogun Finance and was subject to an apparent hire purchase agreement. Shogun Finance brought a claim against Mr Hudson for the return of its vehicle. Mr Hudson relied on section 27 of the Hire Purchase Act 1964, which creates a statutory exception to the common law principle that "nemo dat quod non habet" (nobody can pass better title than he has), since a non-trade buyer of a car who buys in good faith from a hirer under a hire purchase agreement becomes the owner.
In a 3-2 decision, the majority of the House of Lords held there was no contract of hire purchase between Shogun Finance and the rogue, section 27 of the Hire Purchase Act therefore did not apply and the car was not Mr Hudson's. Lord Hobhouse, Lord Phillips and Lord Walker followed the principle established in Cundy v Lindsay, a contract where identity is of key importance is void if the purchaser lies about their identity. The face-to-face exemption established by Phillips v Brooks Ltd did not apply because the seller was not the dealer but the finance company.
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