Lewis v Averay [1971] EWCA Civ 4 (22 July 1971)

Mr Lewis sold his car to a rogue who fraudulently impersonated the film actor Richard Greene. The rogue then sold the car to Mr Averay, an innocent purchaser. The Court of Appeal held that the contract between Lewis and the rogue was voidable for fraud, not void for mistake, so title passed to Averay.

Facts

Mr Lewis, a post-graduate chemistry student, advertised his Austin-Cooper car for sale at £450. A rogue responded and visited Mr Lewis, claiming to be Richard Greene, the well-known film actor. The rogue produced a Pinewood Studios pass bearing his photograph and the name ‘Richard A. Green’. Satisfied with this identification, Mr Lewis accepted a cheque for £450 and handed over the car, log-book and MOT certificate. The cheque was subsequently dishonoured as it had been stolen.

Meanwhile, the rogue sold the car to Mr Averay, a music student, for £200. Mr Averay acted in complete good faith, receiving the car, log-book, and a signed receipt from the rogue (who signed as ‘Keith Lewis’). When Mr Averay’s father wrote to the address on the log-book seeking a workshop manual, the fraud was discovered. The rogue had disappeared.

Issues

The central issue was whether the contract between Mr Lewis and the rogue was void for mistake as to identity, or merely voidable for fraud. If void, no property would have passed to the rogue, and Mr Averay could not have acquired good title. If voidable, property passed to the rogue and subsequently to the innocent purchaser Mr Averay before the contract was avoided.

Judgment

Lord Denning MR

Lord Denning rejected the doctrine that a mistake as to identity renders a contract void. He criticised distinctions between mistakes as to identity and mistakes as to attributes as unhelpful refinements that do not serve the law well. He stated that when parties appear to have concluded a contract face-to-face, even where there is fraudulent impersonation, the presumption is that a contract exists with the person physically present. Such a contract is voidable for fraud, not void.

Lord Denning endorsed the principle from King’s Norton Metal Co. Ltd v Edridge Merrett & Co. Ltd and Phillips v Brooks, stating that a contract induced by fraudulent misrepresentation as to identity is voidable, and title can pass unless avoided before third parties acquire rights in good faith.

Lord Justice Phillimore

Phillimore LJ agreed, citing Lord Justice Pearce’s statement in Ingram v Little that there is a prima facie presumption that a party contracts with the physical person present. He held that nothing in the present case displaced this presumption. When the car, log-book, cheque and receipts were exchanged, a contract had clearly been made. The contract was voidable for fraud, but before avoidance, the rogue had passed good title to Mr Averay.

Lord Justice Megaw

Megaw LJ expressed difficulty with the test from Ingram v Little but held that, even applying it, Mr Lewis’s mistake went only to the creditworthiness of the rogue, not to his identity as a matter of vital importance. Therefore, no unilateral mistake as to identity was established that could void the contract.

Implications

This decision affirmed that where parties deal face-to-face, there is a strong presumption that any contract formed is with the person physically present, regardless of fraudulent impersonation. Such contracts are voidable for fraud, not void for mistake. This protects innocent third-party purchasers who acquire goods before the defrauded party avoids the contract. The decision effectively limits the scope of Ingram v Little and reaffirms the approach in Phillips v Brooks.

The case highlights that as between two innocent parties, the loss falls on the original seller who parted with goods to a fraudster, rather than a subsequent good faith purchaser.

Verdict: Appeal allowed. Judgment entered for the defendant Mr Averay. The contract between Mr Lewis and the rogue was voidable for fraud, not void for mistake as to identity. Title to the car therefore passed to the innocent purchaser Mr Averay before the contract was avoided.

Source: Lewis v Averay [1971] EWCA Civ 4 (22 July 1971)