Dennant v Skinner and Collom [1948] 2 KB 164 (KBD)

1219 words (5 pages) Case Summary

22nd Dec 2020 Case Summary Reference this In-house law team

Jurisdiction / Tag(s): UK Law

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Background

Dennant v Skinner and Collom1 is but one in a long line of cases concerning whether a unilateral mistake in inter praesentes or face-to-face dealings would void the contract formed. These commonly involve the claimant selling his goods to a rogue who assumes the identity of another and who later sells the goods on to an unsuspecting third party. The rogue then disappears, leaving the claimant and the third party (usually the defendant) to litigate over whether the initial contract was void ab initio. If the contract was valid, then the defendant would be deemed the rightful owner of the goods; if not, then the goods would have to be returned to the claimant.

After the decision of the House of Lords in Lake v Simmons,2 which cited the earlier case of Phillips v Brooks,3 the general position is a presumption that the claimant intended to deal with the person physically present in front of him at the time of the contract, instead of the person the rogue purported to be. However, the presumption can be rebutted by showing that the identity was a crucial consideration of the claimant, and the importance was such that the claimant would not have entered into the contract had he known that the identity presented by the rogue was fictitious.

A separate, but related issue concerns the law governing the passing of property. The law in this area is relatively straightforward. Under Rule 1, s.18 of the Sale of Goods Act 1893 (“SOGA 1893”), “where there is an unconditional contract for the sale of specific goods, in a deliverable state, the property in the goods passes to the buyer when the contract is made, and it is immaterial whether the time of payment or the time of delivery, or both, be postponed.”

Issues in the case

In Dennant, the main dispute was over the importance placed by the claimant on the rogue’s identity at the time of the contract, a matter which the court chose to resolve by determining whether the claimant would have entered into the contract had he known the rogue’s true identity. A slightly lesser issue was whether property in the goods had passed from the claimant, given the lack of actual payment by the rogue.

Facts

In an auction held by the claimant (Dennant), a man successfully bid for a van. After the lot was knocked down to him, he identified himself as George Albert King from King’s Motors of Oxford, a highly reputable firm in the industry. Five more vehicles were subsequently knocked down to King by the claimant, including the vehicle to which the proceedings related. Before allowing delivery, the claimant accepted a cheque from King, but obtained a signed certificate which stated that ownership of the vehicles would not pass until the cheque was honoured.

The cheque was dishonoured, and the claimant subsequently discovered that King had no actual connection with King’s Motors. Some time later, the relevant vehicle came to be in the possession of the defendant (Skinner), who refused to return the vehicle. The claimant brought proceedings for the return of the vehicle, and the defendant brought in Collom, the person from whom he bought the vehicle as a third party. The claim was dismissed by Hallett J in the King’s Bench Division.

Decision

After applying Lake v Simmons, Hallett J held that the claimant’s mistake as to King’s identity did not affect the validity of the contract, which was concluded on the fall of the hammer. At that point in time, no inquiry was made about King’s identity. In fact, the identity of the highest bidder was never considered by the claimant at the time, and Hallett J found that the claimant would have been willing to transact with any other person irrespective of their identity. The certificate similarly had no effect on the contract, as the contract was concluded before the execution of the certificate.

The second issue was also decided in favour of the defendant, as Hallett J found that property in the vehicle had passed from the claimant to King when the lot was knocked down to him. Pursuant to Rule 1, s.18 of SOGA 1893, the parties were deemed to have intended the property to pass when the contract was made, irrespective of any delay in payment or delivery. Such intention was negatived neither by conditions of the auction nor the certificate, which only allowed the claimant to retain possession – but not ownership – of the vehicle until the cheque was honoured.

Commentary

Dennant has mainly been recognised as an example in a series of cases notable for establishing the general position in inter praesentes cases as mentioned above, alongside Lake v Simmons and Phillips v Brooks. It was cited in Ingram v Little4 and more recently by the House of Lords in Shogun Finance Ltd v Hudson.5

A related question which Dennant does not explicitly deal with is whether contracts tainted by mistakes as to identity are void or voidable. As the former treats contracts as if they never existed at law, no title passes from the claimant to the rogue nor from the rogue to the third party. The latter, on the other hand, allows the contract to exist as a valid agreement until set aside, thereby making it possible for title to pass to the third party. As MacMillan notes,6 authorities on this point seem to be divided into three categories: where mistakes as to identity do not affect the validity of the contract,7 where a contract is void for mistake as to identity,8 and where the contract is voidable for fraud.9 Dennant appears to fall firmly within the first category, and Hallett J specifically left unanswered the question of whether the second or the third would be more desirable.10

In its discussion of when property passes, Dennant was concerned with the older incarnation of Rule 1, s.18 in the Sale of Goods Act 1893, and not its counterpart in the Sale of Goods Act 1979. However, Dennant is still treated as good authority for the purposes of the new Rule 1, s.18 as both provisions are identically worded.11