Buying on Finance. New Court ruling

godtabh

Judge says couple legally own €30,000 campervan they bought from a man though it wasn’t his to sell

A WINDOW fitter and his wife, who were "duped" into buying a dream campervan the seller did not own, have been told by a judge it is legally their property and cannot be touched by a bank.

Circuit Court President, Mr Justice Raymond Groarke, today told Friends First Finance Ltd it could not seize the vehicle from Stephen and Margaret Murtagh.

Barrister John Morrissey, counsel for the Murtaghs, told the Circuit Civil Court the couple had bought it from a Barry Callaghan who operated a vehicle recovery and sales unit in Enniskerry, Co Wicklow.

It had transpired Callaghan had bought the Ford Transit-based mobile home in a hire purchase agreement with Friends First Finance in 2007 and still owed more than €30,000 on it when he sold it to Mr Murtagh in April 2008.

Mr Murtagh said that when Callaghan accepted their offer it was like their first family Christmas. They were so excited that he had not checked out its history after Callaghan said he owned it and that there was no outstanding finance on it. He had seemed a nice guy.

Mr Murtagh told Judge Groarke he had borrowed €30,000 from EBS Building Society and had handed a draft cheque and €1,600 in cash to Callaghan.

They were in a hurry to leave on a first trip in it. It was registered in his name in 2008 but Callaghan had since gone out of business.

He said he never had dealings with Friends First and was shocked to receive a letter from them in July 2011claiming the campervan was theirs under a business hire purchase agreement in 2007 with Barry Callaghan. The bank wanted him to surrender it to them for possession or buy it from them.

His solicitor Padraig Murphy had informed Friends First that the Murtaghs, of Woodford Crescent, Clondalkin, Dublin, had bought the campervan in good faith without notice of anyone else’s rights or interests including the banks and that it was now their property.

Judge Groarke said Mr Murtagh was an entirely honest man and trusted Mr Callaghan. He had made a €30,000 plus investment that he would be paying back until 2037 and had been assured there were no problems of outstanding finance or ownership.

He said the bank, because of an error, had delayed by two years in registering the hire purchase agreement on any car check website so even if Mr Murtagh had carried out an inquiry he would not have discovered anything untoward.

Friends First Finance had known from November 2009 that Mr Callaghan had sold on the vehicle to Mr Murtagh but had taken no action until 2011. There had to be some obligation, particularly on banks, to take early steps to alert an innocent and duped individual that they would be pursuing him.

Judge Groarke said the bank had not sued Mr Callaghan nor had it made any counter claim against Mr Murtagh’s application for a declaration that the campervan was rightly his.

He said the court was not making any conclusion as to conversion by Mr Callaghan of a €30,000 vehicle presumably to his own benefit but noted that the bank had not reported to the gardai any suspicion of criminal conversion.

- Ray Managh

Does something like this have wider implications for buying/selling cars with finance?

alias no.9

Looks like a major **** up by the bank, their failure made it impossible for the buyers to do an effective finance check. They didn't register their interest in a timely manner and even when they knew the story, just took the soft option of putting the squeeze on an innocent third party and even that they ****ed up. There's probably more cases like this but I'm not so sure there is any implications where the bank has registered their interest correctly and takes timely action when they find out the vehicle has been sold on.