CF Asset Finance Ltd v Okonji

Where an intermediary is authorised to submit a customer's hire proposal to a finance company, that authority ordinarily includes authority, at least ostensibly, to receive and communicate the customer's decision not to proceed before acceptance. Communication of revocation to the intermediary prevents the finance company from accepting the proposal, so no contract is formed. The court also considered the separate defence of non est factum. That defence requires both a non-negligent signing or release of the document and a fundamental difference between the document signed and the transaction understood. On the lead judgment's view, a signer who knows the document is a hire agreement but believes it will be used only for a credit check is mistaken about its use, not its nature. That issue was unnecessary to the decision.

Two partners in a solicitors' firm appealed against a Central London County Court judgment awarding the claimant finance company £24,910 plus interest. An equipment supplier's salesman had persuaded one partner to sign blank hire documentation to enable a credit check. The supplier later completed and submitted the agreement to the finance company, which accepted it. Before acceptance, the partner told the salesman that she did not wish to proceed.

The county court judge found that the salesman had acted fraudulently, but treated the agreement as binding and rejected non est factum because of the partner's negligence. He did not determine whether the offer had been revoked. The central issues were whether revocation communicated to the supplier was effective before acceptance and, alternatively, whether non est factum applied.

Appeal allowed. The Court of Appeal held that no contract had been concluded because the offer was revoked before acceptance.

1. Revocation and communication. An offer may be withdrawn before acceptance, but the revocation must be communicated to the offeree directly or through an intermediary. In Financing Ltd v Stimson [1962] 1 WLR 1184, authority to receive and forward hire-purchase forms was treated as including authority to receive a notice of revocation.
2. Agency. The trading agreement authorised the supplier to introduce customers by submitting completed proposals. Although it denied authority to negotiate or bind the finance company generally, that conceded agency necessarily carried at least ostensible authority to receive and communicate a customer's decision not to proceed before acceptance. The partner's communication on 6 November 2006 therefore revoked any offer, and there was no offer capable of acceptance on 9 November 2006.
3. Non est factum. Patten LJ considered, obiter, that the defence requires both absence of negligence in signing or releasing the document and a fundamental difference between the document signed and the transaction understood. A belief that an intermediary will use a signed hire agreement only for a credit check is not, on his view, a mistake about the document's nature where the signer knew what she was signing. The Master of the Rolls agreed that the unchallenged finding of negligence was fatal, but declined to express a concluded view on the latter issue. Sullivan LJ expressed no view on it.

• Court of Appeal (Civil Division): Allowed the appeal on the ground that the appellants' offer had been revoked before acceptance. No contract was concluded.
• Central London County Court: His Honour Judge Edward Bailey gave judgment against the appellants on 18 April 2013 for £24,910 plus interest. He rejected the non est factum defence and did not determine the revocation issue.