Harrison v Madejski & Anor

A purchaser who receives a valuable vehicle registration mark which the contract did not include may be unjustly enriched, even though the statutory registration scheme caused the mark to pass with the vehicle. The enrichment is ordinarily valued by the mark’s objective market value. Subjective devaluation is not established merely by evidence that the defendant was willing to pay less. A readily realisable benefit may constitute an incontrovertible benefit, particularly where the defendant requested or freely accepted it. A Bullock costs order may be made where claims against two defendants are substantively alternative and it was reasonable to sue both. Costs sanctions must, however, be based on relevant reprehensible conduct, not merely poor business standards or a reasonable refusal to mediate.

Sir John Madejski sold a Jaguar XJ220 through Coys of Kensington to Malcolm Harrison. Madejski intended to retain the personalised registration mark JM2, but the vehicle was sold without its registration plates and the auction materials did not state that the mark was included. Harrison nevertheless registered the vehicle with the mark.

The Reading County Court held that Harrison was unjustly enriched and ordered him to pay £31,585 plus interest. It dismissed Madejski’s claims against Coys for breach of contract and negligence, but made costs orders affecting both defendants. Harrison appealed the unjust-enrichment and Bullock-order decisions. Coys appealed the reduction of its recoverable costs. The central issues were whether the mark was excluded from the contract, how the enrichment should be valued, whether change of position was available, and how the parties’ conduct affected costs.

1. Harrison’s appeal dismissed. The trial judge had correctly treated whether the mark was included in the sale as the critical issue. His finding that no reasonable buyer could have concluded that the mark was included established that the contractual sale excluded it. Subjective belief could not alter the objective contractual terms.
2. The statutory scheme under Part II of the Vehicle Excise and Registration Act 1984 and the Retention of Registration Marks Regulations 1993 did not make the enrichment non-unjust. As in Cressman v Coys of Kensington (Sales) Ltd, the statutory mechanism explained how the purchaser acquired the mark but did not confer a right to retain a mark excluded by the contract.
3. The enrichment was properly valued at the mark’s objective market value of £50,000, less the cost of bringing the vehicle to the standard required for an MoT certificate. Benedetti v Sawiris established that objective market value is the starting point and that subjective devaluation is not automatic. Harrison received a readily realisable, incontrovertible benefit and had freely accepted it by procuring registration in his name.
4. The change-of-position defence was unavailable. The payment made under the contract was not an inequitable change of position in circumstances where no reasonable buyer could have thought the mark was included and the buyer had allowed himself to disregard what should have been obvious. The judge had also been entitled to refuse the unpleaded defence.
5. The Bullock order was within the trial judge’s discretion. The claims against Harrison and Coys were substantively alternative, arose from the same auction and transaction, and it was reasonable to sue both because the relevant evidence was disputed. The principles stated in Whitehead v Searle were not contravened.
6. Coys’ appeal allowed in part. The judge had erred in reducing Coys’ costs for matters which were not relevantly reprehensible, including inadequate general business standards, lost computer files and a reasonable refusal to mediate. He was nevertheless entitled to take account of Coys’ deceitful letter, prolonged failure to correct untruthful statements, failure to respond to information requests and unreliable evidence. Coys’ recoverable costs were therefore increased from 50 per cent to 75 per cent.

• Court of Appeal (Civil Division): Harrison’s appeal dismissed. Coys’ appeal allowed in part, substituting 75 per cent for 50 per cent in the costs order.
• Reading County Court: His Honour Judge Hamilton ordered Harrison to pay £31,585 plus interest and made the related costs orders. The claims against Coys for breach of contract and negligence were dismissed.