Chatfields-Martin Walter v Lombard North Central

The High Court gave judgment yesterday on an important appeal concerning HPI, the well-known hire purchase information service.

The appellant, Chatfields-Martin Walter Ltd (a Pendragon PLC company), contracted to purchase a van that was owned by Lombard North Central PLC pursuant to a hire purchase agreement.  Having noted Lombard’s interest on the HPI database, Chatfields procured a cheque from the van’s seller (and hirer under the HP agreement) and delivered it to Lombard.  Subsequently, Chatfields carried out a second HPI search, and saw that Lombard’s interest had cleared; relying upon this, it sold the van to a third party.  In fact, Lombard’s interest had not cleared because the cheque was dishonoured.  Lombard therefore sued Chatfields for conversion.

Chatfields’ defence was that, by representing through HPI that it no longer had a financial interest in the van, Lombard was estopped from asserting ownership in a claim for conversion.

Chatfields’ defence failed at first instance, the judge holding that the case was governed by the decision of the House of Lords in Moorgate Mercantile Co Ltd v Twitchings (where Mr Twitchings’ defence of estoppel failed).

Chatfields appealed, and the case came before Leggatt J in the High Court in Birmingham. Leggatt J accepted Chatfields’ argument that Moorgate v Twitchings was distinguishable: whereas Moorgate did not register its interest at all, Lombard had registered its interest, but subsequently deleted it.  Chatfields’ plea of estoppel therefore succeeded, and the appeal was allowed.

Leggatt J’s decision will provide important guidance about the role played by the HPI scheme and, in particular, the scope of Moorgate v Twitchings.

Tom Bell, instructed by Geldards LLP, appeared for the successful appellant, Chatfields.