Will Hooper acts for buyer as Court of Appeal hands down judgment in $44m Ferrari dispute
The Court of Appeal has handed down its judgment in the long-running saga about the ownership of the original gearbox of a 1962 Ferrari 250 GTO sold for US$ 44m in 2018. The GTO was sold and delivered by the Appellant seller, Mr Carl, to the Respondent buyer, Gregor Fisken Limited (“GFL”) but, as the sale contract recognised, without the original gearbox which had gone missing. The contract contained various provisions concerning the seller’s obligations to deliver up the gearbox to the buyer should he be able to find and retrieve it. In certain circumstances, he was entitled to a fee of US$ 500,000 for his efforts in so doing. The gearbox was subsequently discovered, the parties fell out, and GFL sued the seller for specific performance of the obligations to deliver up the gearbox.
The seller had argued at first instance that GFL was not a proper party to sue on the contract, lacking standing on the alleged basis that it had acted at all times as an agent for a disclosed but unidentified principal. GFL had been described as an agent in the header to the contract, but had signed it in an unqualified manner. As a matter of fact, GFL was not an agent: it had resold the GTO to a third party.
The seller also maintained that, if GFL was a proper party, it had repudiated the contract and could not enforce the seller’s obligations to deliver up the gearbox. In the alternative, if the contract remained in force, the seller claimed entitlement to the US$ 500,000 in exchange for delivering up gearbox.
The High Court held that GFL was a proper party to sue, there had been no repudiation, the seller was obliged to deliver up the gearbox and was not entitled to the US$ 500,000. The seller’s principal argument on appeal was that GFL lacked standing. The Court of Appeal rejected that argument, affirming GFL’s right to sue on the contract and to the gearbox. The Court of Appeal further confirmed that there had been no repudiation by GFL, but that the seller was to be paid the US $500,000 for his efforts in locating and retrieving the gearbox, as well as the shipping costs for sending the gearbox to GFL. Otherwise, the Court dismissed the appeal.
The Court of Appeal’s judgment will be of particular interest to car enthusiasts, the motor industry, and commercial practitioners alike. It also includes detailed analysis of the signature principle which dates back 150 years, and shows that when, as to apparent capacity, there is a mismatch between description and signature in a contract, it is the signature which prevails. The Court expressly affirmed that principle.
The Court of Appeal’s judgment is available here.
William Hooper appeared for GFL, instructed by Simon Walton and Nick Leigh of Rosenblatt.