Gregor Fisken Ltd v Carl

A contract for the sale of goods may require delivery of a specific item held by a third party, rather than merely tendering it for collection. Where the item’s identity is contractual, the buyer is entitled to a reasonable opportunity to examine it before acceptance. A contractual fee for recovery efforts must be construed with the provision governing recovery from the party originally believed to possess the goods. An estoppel by convention requires a communicated common assumption and detrimental reliance. Specific performance is appropriate where the goods are unique, the claimant has a contractual right to them, and delivery is readily achievable.

The claimant bought a rare Ferrari from the defendant under an agreement which recorded that its original gearbox was absent. The defendant agreed to use best efforts to recover it. The agreement provided for delivery without additional compensation if recovered from Canepa, but for a possible fee if formal legal correspondence or litigation secured recovery in other circumstances.

After the gearbox was located at Canepa’s premises, the parties disputed authentication, delivery arrangements and the defendant’s entitlement to a $500,000 fee. The claimant sought delivery and specific performance. The defendant alleged that the claimant lacked title to sue, had repudiated the agreement, and was liable for the fee.

1. The claimant had title to sue. Although it was described in the agreement as agent for an unidentified principal, it signed as buyer without an agency qualification. Applying the objective approach in Shogun v Hudson [2004] 1 AC 919, Hamid v Francis Bradshaw [2013] EWCA Civ 470 and The Elikon [2003] EWCA Civ 812, the document did not make clear that it had signed as agent, and the extrinsic evidence could not establish that both parties knew this.

2. The agreement was a sale of goods including the gearbox. Since delivery of the specific N2 gearbox was required, the claimant was entitled under section 34 of the Sale of Goods Act 1979 to a reasonable opportunity to examine it. Inspection in Italy was an appropriate arrangement.

3. The defendant’s obligation was to deliver the gearbox to the claimant, not merely make it available for collection at Canepa’s premises. The natural meaning of “turn over”, together with the defendant’s greater control over the gearbox’s location, supported that construction. The defendant had to pay shipment to the claimant, but not shipment to Italy, which the claimant had agreed to fund.

4. Clause 7.6 governed recovery from Canepa and required delivery without additional compensation. Clause 7.11 did not introduce a fee where the gearbox was recovered from Canepa, even following formal legal correspondence. The defendant therefore had no contractual entitlement to the fee.

5. The parties had formed a common understanding that the fee might be payable, and the defendant’s case was capable in principle of constituting estoppel by convention. It failed because the alleged detrimental reliance occurred before the common understanding was communicated. The claimant was therefore not estopped.

6. The claimant’s email proposing shipment to Italy, inspection and payment on authentication accorded with its contractual rights and was not repudiatory. The defendant’s response was a breach, the agreement was not terminated, and the claimant’s refusal to pay the fee was not itself a breach.

7. Title to the gearbox had not passed on completion. Clause 7.12, which contemplated the defendant pursuing recovery proceedings, was inconsistent with title having passed before the gearbox was turned over. Consideration had nevertheless been paid because the claimant was entitled to receive the gearbox without further payment in the relevant circumstances.

8. The defendant was wrongfully withholding the gearbox in breach of contract. Specific performance was ordered because the gearbox and car were unique, the claimant had a contractual right to delivery, and damages were inadequate. The precise terms of the order were to be settled, with consequential matters and any permission application dealt with thereafter.