Ferrari – Car Dealer Deceit & Fraudulent Misrepresentation – Insights from Torr v Connor

This article explores aspects of the tort of deceit, fraudulent misrepresentation, and piercing the corporate veil in the context of the decision of the case of Torr v Connor, involving the sale and purchase of a second hand Ferrari.

Background of the Case

Mr Torr, who lives in Australia, responded to the Autotrader advert of Heathfield Motor Company in the UK offering a Ferrari 360 spider for sale.

Between the advert and in a subsequent telephone conversation, the Ferrari was described as having full-service history, factory fitted Stradale bumpers and wheels and to be in great condition insider and out, with no damage.

As a result, in relying on the representations, Mr Torr agreed to buy the Vehicle and had it shipped to Australia where it was inspected, revealing it to have sustained significant impact damage which had been poorly repaired, so that the bonnet and front wings were misaligned.

It was later revealed the car had been owned by the footballer Ian Wright, who had crashed it, resulting in serious front end damage, but had not been an insurance write off.

Mr Torr successfully sued Heathfield Motor Company and was awarded over £70,000.00 in  damages, but the car dealer went into voluntary liquidation and Mr Torr received nothing.

Mr Torr then issued a claim against Mr Connor personally.

The Corporate Veil

The corporate veil separates the company, as a separate legal entity, from the investors or shareholders, so that the company will as a rule be liable for its own wrongdoing, breach of contract and misrepresentation.

To pierce or lift the corporate veil so as to make the directors or shareholders liable “it is necessary to show both control of the company by the wrongdoer(s) and impropriety, that is, (mis)use of the company by them as a device or façade to conceal their wrongdoing … at the time of the relevant transaction(s)”

In the Torr case, the judge said “there could be no claim against Mr Connor for the innocent or negligent misrepresentation by HMC due to the corporate veil. The current claim is therefore brought for fraudulent misrepresentation – or deceit…………………….which requires Mr Torr to show that Mr Connor acted dishonestly, in the legal sense of the word.”

Fraudulent misrepresentation

It was represented:

The Ferrari was “a very rare example with Challenge Stradale bumpers and wheels”,

The Ferrari was in great condition inside and out

The Ferrari was “factory fitted with Challenge Stradale bumpers and wheels which added considerable value to the Ferrari”

The Ferrari was “in excellent condition with no damage to its body or interior”

The Ferrari had full-service history.

Although the car was HPI clear it had sustained extensive accident damage, which was poorly executed, and therefore could not be described as being in ‘great condition’.

The service book had pages removed and the bumpers and wheels were not factory fitted.

Dishonesty

The car seller was an experienced car dealer and mechanic who had carried out a thorough inspection of the car before sale.

It would have been immediately apparent that the car was not in excellent condition, and had undergone extensive widespread repairs.

The accident damage had not been disclosed.

It would have also been apparent that the repairs were substandard; the body panels were out of alignment, the paint work poor and parts missing.

The MOT history showed a milage discrepancy and the service book ‘doctored’ to hide the discrepancy, although it was not found that Mr Connor removed the pages.

The bumpers and wheels were not original equipment, but the defendant claimed HR Owen confirmed they were, which was not true.

It seems Mr Connor had no basis to believe the car was original ‘spec’.

As a result, the claim in dishonesty succeeded, in that Mr Connor made Representations without belief in their truth and therefore fraudulently.

This article is an overview of the law and is not a replacement for formal legal advice tailored to your specific query. For further information, please contact Stormcatcher Law by calling 0333 700 7676 or emailing knowledge@stormcatcher.co.uk.

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