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England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Bassano v Toft & Ors  EWHC 377 (QB) (26 February 2014)
Cite as:  Bus LR D9,  EWHC 377 (QB)
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QUEEN'S BENCH DIVISION
AND IN THE CENTRAL LONDON COUNTY COURT
Strand, London, WC2A 2LL
B e f o r e :
(sitting additionally as a judge of the Central London County Court)
| KATHRYN BASSANO
|- and –
PETER BIDDULPH and PETER BIDDULPH LTD
BORRO LOAN LTD and BORRO LOAN 2 LTD
| First Defendant
Mr Allston (instructed by Hartnells LLP) for the First Defendant
Ms Taylor (instructed by Rubinstein Phillips Lewis LLP) for the Second Defendants
Mr Payton (instructed by Wright & Wright LLP) for the Third Defendants
Hearing dates: 14-17 January 2014
Crown Copyright ©
The Hon. Mr Justice Popplewell :
(1) The viola was sold to Peter Biddulph for £230,000, being the best price reasonably obtainable in the light of unsuccessful attempts to sell the viola at an acceptable price for the previous 4 years.
(2) The proceeds of the sale were paid into court to abide the outcome of the proceedings.
(3) The issues between Peter Biddulph and Mrs Bassano fell away. Peter Biddulph undertook, as one of the terms on which the sale was ordered, no longer to pursue any claim for the repayment of the £50,000 advanced to Mrs Bassano, and made no claim against the proceeds of sale to be paid into Court. Mrs Bassano abandoned a small damages claim previously advanced against Peter Biddulph alleging minor damage to the viola.
(4) The Defendants resolved between themselves the previous competing claims to security in the viola or its proceeds of sale. Peter Biddulph fell out of the proceedings. Mr Toft does not pursue a claim to have any security interest in the viola or its proceeds. It was agreed (between the Defendants) that Borro had a valid and enforceable claim and security interest as pledgee in respect of the amount of its loan plus interest.
(1) Mr Toft's claim for a money judgment for repayment of his loan plus interest;
(2) Borro's claim for a money judgment to enforce repayment of its loan plus interest;
(3) Borro's claim to a priority security interest in the proceeds of sale of the viola by virtue of its position as pledgee.
The claim by Mr Toft
(1) The agreement is not a regulated agreement, being an exempt agreement by reason of s16B of the Act.
(2) Alternatively, if the agreement is a regulated agreement:
(a) it was not made by Mr Toft in the course of a consumer credit business, which removes any bar to enforceability arising from the fact that Mr Toft is unlicensed; and
(b) it is a non-commercial agreement, which removes any bar to enforceability arising from the fact that the agreement does not comply with the detailed requirements laid down in Part V of the Act and the regulations made thereunder.
(3) Alternatively the Court should exercise its discretion under sections 65 and 127 to enforce the agreement.
Exemption under s. 16B
Agreement made in the course of a consumer credit business
"Any disposal of a chattel held for the purposes of a business may, in a certain sense, be said to have been in the course of that business, irrespective of whether the chattel was acquired with a view to resale or for consumption or as a capital asset. But in my opinion section 1(1) of the Act is not intended to cast such a wide net as this. The expression "in the course of a trade or business" in the context of an Act having consumer protection as its primary purpose conveys the concept of some degree of regularity, and it is to be observed that the long title to the Act refers to misdescriptions of goods, services, accommodation and facilities provided in the course of trade. …….."
The claim by Borro
Execution of the Borro Loan Agreement
"This is a credit agreement regulated by the Consumer Credit Act 1974
The client signed it by clicking "I Accept" in their account in the presence of a Borro representative and has agreed to be legally bound by its terms.
Date of signature 01/07/2011
Time of Signature: 14:05:41"
Loss of security interest by loss of possession.
"And as to the second point, we agree entirely with the doctrine laid down in Ryall v Rolle (1 Atk. 165), that in the case of a simple pawn of a personal chattel, if the creditor parts with the possession he loses his property in the pledge: but we think the delivery of the chronometer to Wilson under the terms of the agreement itself was not a parting with the possession, but that the possession of Captain Wilson was still the possession of Messrs. Capper. The terms of the agreement were that "they would allow him the use of it for the voyage:" words that gave him no interest in the chronometer, but only a licence or permission to use it, for a limited time, whilst he continued as their servant, and employed it for the purpose of navigating their ship. During the continuance of the voyage, and when the voyage terminated, the possession of Captain Wilson was the possession of Messrs. Capper; just as the possession of plate by a butler is the possession of the master; and the delivery over to the Plaintiff was, as between Captain Wilson and the Defendants a wrongful act, just as the delivery over of the plate by the butler to a stranger would have been; and could give no more right to the bailee than Captain Wilson had himself. We therefore think the property belonged to the Defendants, and that the rule must be made absolute for entering the verdict for the Defendants."
(1) he loses possession as a result of theft or fraud (Babcock v Lawson);
(2) he delivers up the goods to an agent to be sold on his behalf (North Western Bank v Poynter) or to be retained by the agent for a specific purpose (Reeves v Capper);
(3) such agent makes an unauthorised delivery of possession to a third party (Reeves v Capper, Donald v Suckling);
(4) he sub pledges the goods, at least in circumstances where he retains the ability to redeem the subpledge if the pledgor seeks to redeem the pledge (Donald v Suckling).
(1) Delivery by Borro to Bishop was delivery by Borrro to its agent for the purposes of safe keeping and demonstration to potential purchasers, in order to enable it to be sold and the proceeds used to repay the loan. There was no surrender of possession in the legal sense, merely surrender of custody. The transfer of custody was not inconsistent with preserving the special interest of Borro as pledgee; on the contrary it was for the purposes of protecting that interest. This conclusion is unaffected by the error in naming Borro Loan 2 Ltd in the written tripartite agreement. The bailment to Bishop was a bailment on the terms of the agreement and clearly understood by both Borro Loan Ltd and Bishop to have been such. The document evidenced the terms orally agreed on which Bishop was to take possession of the Viola from Borro as bailee.
(2) Delivery by Bishop to Mr Dahler was unauthorised by Borro. It was contrary to the terms on which it was agreed that Borro would hold the viola. It was not a voluntary surrender by Borro of its special interest so as to defeat it, just as the owners' special interest in Reeves v Capper was not destroyed by the master's unauthorised transfer to the attorney by means of the attornment by the makers in that case. It was not a voluntary surrender of possession by Borro at all.
(3) The delivery of the viola to Mr Ingles of Sotheby's pursuant to the order of the court, to which Borro consented, was a transfer of custody to an agent for the purposes of sale. Again there was no surrender of possession in the legal sense, merely surrender of custody. It was not inconsistent with Borro preserving the special interest as pledgee; on the contrary it was for the purposes of protecting that interest by realising the security by selling the viola.