Wiltshire v Powell & Ors

A judgment in personam determining title to goods binds a person claiming through a litigant as a privy only where the relevant interest was acquired after judgment. The same principle applies by analogy to goods as to land. A purchaser who acquired before judgment is not bound merely because title derives from the unsuccessful litigant. Wider privity of interest requires sufficient identification and fairness, with circumstances such as participation or knowingly standing by potentially relevant. A declaration must be confined to the rights of parties represented in the litigation. Section 21 of the Sale of Goods Act 1979 makes good faith irrelevant to the seller’s ability to pass title, but does not enlarge the doctrine of estoppel.

Mr Wiltshire obtained judgment against Christopher Ebbs declaring that Wiltshire, as trustee of the Spilsby Soaring Trust, owned the Rallye aircraft. Before that judgment, Ebbs had purportedly sold the aircraft to Messrs Etherington, Heapy and Storey, who later sold it to Mr Powell.

In proceedings brought by Powell, Mr Recorder Maw declared Powell the owner. Wiltshire appealed, contending that the earlier judgment bound the successive purchasers because their title derived from Ebbs. The central issue was whether purchasers who acquired their interests before the earlier judgment were privies bound by estoppel per rem judicatam.

Appeal dismissed unanimously. Costs were to be assessed if not agreed, and leave to appeal was refused.

1. Section 21 of the Sale of Goods Act 1979 provides that a seller cannot pass better title than he has. The purchaser’s good faith is therefore irrelevant to the title issue. That rule did not, however, determine whether the purchasers were bound by the earlier judgment.
2. A judgment in personam binds the parties and their privies. For estoppel per rem judicatam, the same title must have been in issue in both actions. A person deriving an interest from a litigant is bound only where the interest was acquired after the earlier judgment, because the interest was then represented in the proceedings. The Court of Appeal applied this principle by analogy to ownership of goods as well as land, following Hodson v Walker (1872) LR 7 Exch 55 and the related authorities.
3. A wider privity of interest may arise where there is a sufficient degree of identification to make it just to bind the non-party. Relevant considerations include the person’s interest in the earlier litigation or its subject matter, participation or knowingly standing by, and fairness. Powell had not participated in or watched the earlier proceedings, and Wiltshire knew of his interest but did not join him or otherwise protect his position. It was therefore unjust to bind Powell.
4. Finality of litigation supports the doctrine. Arden LJ observed that a purchaser acquiring after judgment could be bound to prevent an unsuccessful litigant defeating the judgment by disposing of the property. That result would be compatible with article 6 and justified under article 1 of the First Protocol to the European Convention on Human Rights. Those observations did not alter the position of pre-judgment purchasers.
5. The earlier declaration was drawn too broadly. Under RSC Ord. 15 r.16 and CPR 40.20, declaratory relief concerns the legal rights of parties represented in the proceedings and should not determine the rights of non-parties. The conflicting judgments were not a reason to extend privity unfairly.

• Court of Appeal (Civil Division): Appeal from the Lincoln County Court was dismissed with costs; leave to appeal was refused.
• Lincoln County Court: Mr Recorder Maw declared Mr Powell the owner of the aircraft and rejected Mr Wiltshire’s claim based on the earlier judgment.