WhyLaw
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Report Thread starter 3 years ago
#1
Hi guys,

I have a problem which I've been stuck on - I'll write it below and then say how far i've got:

Problem:

A man (Party A) entrusted a car dealership (Party B) with two cars (RR and VW) to sell for a commission. An employee of the car dealership didn't do basic checks i.e. who owns the cars. The car dealership sells the RR to someone else (Party C) and gives the money to Party A minus the commission and makes repairs to the VW but doesn't sell it and returns it to Party A. The man (Party A) disappears...

Both cars turn out to be stolen with the RR being registered on the police stolen register and having the VIN number not match the logbook. the VW was not registered as stolen. The car dealership (Party B) received a letter from the true owner of the cars (Party D) demanding the return of both of them.

Problem arises as the car dealership hasn't got possession of either cars.

I'm looking at the tort of conversion but am getting stuck with section 3 of the Torts (Interference with Goods) Act 1977 saying that action has to be against someone who is in possession or in control of the goods...which the car dealership isn't. Does this mean that the true owner (Party D) can sue the car dealership under conversion or does he have to rely on a negligence claim against the dealership and do a conversion claim against the new owner of the RR (Party C)?

I've also looked into the 'nemo dat' rule but am struggling with the potential exception rule of mercantile agent.

In essence, I'm having difficulty understanding:
- Whether the true owner (Party D) can sue the car dealership
- Can the new owner of the RR sue the car dealership
- Can the car dealership sue anyone

Appreciate any help/discussion
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