Mr Quinn wanted to swap his silver Jag for a red one. So he popped along to Carcraft. He met a salesman there, a Mr Khan. No red ones, I’m afraid, sir. We do have this nice blue one. Part-ex yours and for seven and a half k extra it’s yours. I can arrange the financing for you, we just swap your current payments over. OK, I’ll take it. Deal done.
Then some good news. Mr Khan on the phone. We’ve got a red one now. Mr Quinn went along to see it. It’s not here now, sir, but here’s a picture on the computer. Excellent, just what I need. Deal amended.
The deals were thrashed out at a service station a couple of weeks later. All signed up. Car will be with you next week, sir. And it was. Just bring another £700 and it’s yours, sir. Bit of trouble with the finance company. You only have £400? No problemo, we can settle that later. No need to come into Carcraft, sir. We can deal with it at the service station, it’s half-way between us. I’ll even sort out your finance company.
Mr Quinn turns up at the service station, £400 in hand, Mr Khan is there with the red Jag. Mr Quinn looks at it, sees no problem, hands over the money, drives off. And they all lived happily ever after.
Well, if “ever” means “a month”.
Anything strike you as suspicious about the above deal? It all looks in order. Maybe a little odd that it was done at a service station, redolent of football agents, bungs and Arthur Daley, but isn’t that a salesman being helpful to shift a pricey motor? Don’t salesmen often go the extra mile to get their commission?
Thing is, Mr Khan was not being a salesman. He was being a Rogue. He promptly flogged the silver Jag on to an innocent punter and then “forgot” all about clearing the existing finance Mr Quinn had on it. So the finance company chased Mr Quinn for the outstanding balance. Mr Quinn was now paying for two Jags. But he was a demi-Prescott.
Mr Quinn sued Mr Khan, and won. Good luck in executing that judgment. Mr Khan was a wisp in the wind. Mr Quinn was therefore still several thousand out of pocket. So Mr Quinn also sued Carcraft. Hey, he was your salesman. Hang on, you can’t blame us for THAT! He wasn’t even on our premises when he did the deal. No, Mr Khan was on a frolic of his own. So we’re not liable.
Amazingly, the Court at first instance found in Carcraft’s favour. The reason? The deal was well dodgy. Surely any purchaser would realise these deals are done on the forecourt and not at service stations. The domain of the dodgy dealer and shady agent. More to the point, why would Mr Khan do the deal when it looked like he was £300 short? Because Mr Quinn didn’t have the full £700? A second-hand car salesman turning down three hundred in bunce? No way would Arthur Daley ever have done that. That in itself should have made it obvious that Mr Khan was up to no good. He was therefore not acting for Carcraft but on his own terms.
Less amazingly, the Court of Appeal overturned the first instance decision. The principles of vicarious liability for the acts of an employee are well-established. Did it look as if Mr Khan was acting within the course of his employment? Yes. Mr Khan was employed to sell cars, he was selling a car. He introduced the deal on Carcraft’s premises. Carcraft had imputed knowledge of what was going on. More to the point, let’s assume that Carcraft had no knowledge about Mr Khan and his somewhat shady past. In which case Mr Quinn and Carcraft were both innocent victims of Mr Khan’s activity. One of them should bear the loss. Which one? As Hold CJ put it way back in the 17th century, “it is more reasonable, that [the master] should suffer for the cheats of his servant than strangers”.
This maxim can only apply of course if the servant is acting with the ostensible authority of the master. Good luck in suing Barclays if one of their counter staff sells you an iffy DVD. And Mr Quinn would obviously see Mr Khan had Carcraft’s authority. He was in their internets, pimping red Jags. No doubt that it was reasonable for Mr Quinn to assume everything was above board.
So, based on 300 years of authority, the Court of Appeal readily found Carcraft liable. A bit unfair, perhaps? Because Carcraft unknowingly employed a Rogue? Not quite – Mr Khan had moved from Rochdale’s Carcraft branch after he had been involved with the coppers…