Lewis v Averay is a landmark case in English contract law that deals with the issues of fraudulent misrepresentation, mistaken identity, and the passing of title in a contract for the sale of goods. The case clarifies the legal consequences when a seller is deceived by a rogue impersonating a third party, and the contract is later challenged on the grounds of mistaken identity. It also discusses the protection afforded to bona fide third-party purchasers who acquire goods from such rogue buyers.
Facts of Lewis v Averay
In Lewis v Averay, the plaintiff, Mr Lewis, wished to sell his car. He had advertised the car for sale at the price of £450. A rogue, impersonating the famous actor Richard Greene from The Adventures of Robin Hood television series, contacted Mr Lewis and expressed interest in buying the car for the advertised price. To convince Mr Lewis, the rogue presented a cheque bearing the name “R. A. Greene” and also showed an identification pass from Pinewood Studios, which carried his photograph and name, falsely representing himself as the actor.
After accepting the cheque and verifying the false identification, Mr Lewis handed over possession of the car to the rogue. The rogue, however, never intended to pay for the car; the cheque eventually bounced. After taking possession, the rogue sold the car to Mr Averay, the defendant, who purchased the vehicle in good faith for £200.
When the cheque bounced, and the rogue disappeared, Mr Lewis sought to reclaim the car. He argued that there had been a mistake as to the identity of the buyer, which meant that no valid contract had been concluded with the rogue. Consequently, he contended that the title to the car had never passed and that the car still belonged to him. Mr Lewis brought an action against Mr Averay for conversion, seeking the return of the vehicle.
Issues
The primary legal issues in Lewis v Averay were:
- Whether a contract was validly formed between Mr Lewis and the rogue, despite the rogue’s fraudulent misrepresentation and Mr Lewis’s mistake as to the buyer’s identity.
- Whether the title to the car had passed to the rogue, or whether Mr Lewis retained ownership due to the mistake.
- Whether Mr Averay, as a bona fide purchaser for value without notice, acquired good title to the car.
These issues revolve around the effect of mistaken identity in contracts made face-to-face and the protection of third parties who acquire goods in good faith.
Legal Principles
The case of Lewis v Averay followed the principles established in earlier authorities, notably Phillips v Brooks and Ingram v Little. These cases examine the nature of contracts where the seller is deceived about the identity of the buyer and the distinction between contracts that are void and those that are merely voidable.
In Phillips v Brooks, it was held that when a contract is made face-to-face, there is a presumption that the seller intends to contract with the person in front of him, regardless of their true identity. Consequently, the contract is valid and the title passes, even if the buyer is a rogue.
In contrast, Ingram v Little concerned contracts made through correspondence, where the mistake as to identity was held to be fundamental enough to render the contract void. However, this case was distinguished in Lewis v Averay as it involved special facts that did not apply to face-to-face transactions.
Lewis v Averay Judgement
The Court of Appeal in Lewis v Averay upheld the decision in favour of Mr Averay, the third-party purchaser. Lord Denning MR delivered the leading judgement, reasoning that the mistake as to the rogue’s identity was not an operative mistake that would prevent the formation of a valid contract.
Lord Denning emphasised that the contract between Mr Lewis and the rogue was valid and that title had passed to the rogue. Since the contract was made face-to-face, the law presumed that Mr Lewis intended to contract with the person physically present, regardless of the false identity.
The contract was fraudulent and therefore voidable at the option of Mr Lewis. However, it had not been rescinded before Mr Averay purchased the car. Mr Averay had acquired the vehicle in good faith and without notice of the fraud. Therefore, Mr Averay obtained good title to the car, and Mr Lewis could not reclaim the vehicle from him.
The court distinguished the case from Ingram v Little, where the contract was held void due to the seller’s fundamental mistake regarding the identity of the buyer in a non-face-to-face transaction. The court noted that the presumption in favour of valid contracts in face-to-face dealings applied here.
Conclusion
In Lewis v Averay, the Court of Appeal concluded that despite the plaintiff’s mistake about the buyer’s identity, a valid contract was formed between Mr Lewis and the rogue. The contract was voidable for fraud but not void. Since Mr Lewis did not rescind the contract before the rogue sold the car to Mr Averay, who bought it in good faith, title had passed, and Mr Averay was entitled to keep the car.
The case established the principle that in face-to-face transactions, the presumption is in favour of the validity of the contract despite mistaken identity. It also underscored the protection granted to innocent third-party purchasers, reinforcing important safeguards in commercial law.
