On 26 February 2013, His Honour Judge Mackie QC (sitting as a judge of the High Court) handed down judgment in VFS Financial Services Limited v JF Plant Tyres Limited [2013] EWHC 346 (QB) on an issue of importance for all asset and motor finance providers: what is a “disposition” for the purposes of Part III of the Hire Purchase Act 1964 (“HPA 1964”)? This welcome and pragmatic judgment makes it clear that unless money is paid for a vehicle, there will be no ‘sale’ meaning there is no ‘disposition’ (and therefore no potential for protection) under the HPA 1964.

The Facts

By a hire purchase agreement dated 13 April 2008 (“Agreement”), VFS Financial Services Limited (“VFS”) let a Volvo FM420 8x4 truck (“Vehicle”) to Slingsby Plant Hire (“Slingsby”). After taking delivery of the Vehicle, Slingsby, VFS and Doncaster Aggregates Limited (“Doncaster”) agreed to novate the Agreement so that Doncaster was substituted for Slingsby as the ‘debtor’.

Doncaster failed to make payments on time. VFS terminated the Agreement for non-payment on 16 February 2012 and tried to recover possession of the Vehicle. Doncaster had, however, parted with possession of the Vehicle in December 2011 to JF Plant Tyres Limited (“JF”). JF claimed it was the owner of the Vehicle under the exception to the nemo dat rule contained in Part III of the HPA 1964. JF argued that it acquired title because (a) Slingsby owed it just over £41,000 and Doncaster owed JP almost £4,000 and (b) Doncaster and Slingsby’s managing director, a Mr Slingsby, offered the Vehicle in satisfaction of those debts and JF accepted this offer. To evidence the ‘terms’ of settlement, Doncaster then issued an invoice for the Vehicle to JF for £89,896.79 (including VAT).

The Proceedings

VFS issued proceedings for JF’s wrongful interference with the Vehicle. JF’s defence relied on the protection of Part III of the HPA 1964. VFS said JF was not protected under Part III: there was no ‘disposition’ by Doncaster meaning Part III of the HPA 1964 had no effect. It therefore applied for summary judgment.

The Judgment

After hearing submissions, HHJ Mackie QC decided:

  • The meaning of “disposition” was considered by His Honour Judge Astill (sitting as a judge of the High Court) in Royscott Trust v Burno Daken Limited & David Ball (1993) Unreported, 9 July 1993. While there was no transcript, there was commentary and extracts from the judgment in Equipment and Motor Vehicle Leasing and Hiring: Law and Practice
  • The facts of Royscott Trust were “remarkably similar to those here” because it involved the taking of a vehicle in part satisfaction of an outstanding debt.
  • HHJ Astill had decided in Royscott Trust that “it appears to me that the consideration of this transaction was not money” but a “forbearance to sue for that part of the outstanding debt represented by the vehicle’s value”. This was not a “disposition as defined by section 29”.
  • While “sale” and “contract for sale” were not defined by the HPA 1964, and it was not simply a question of taking the definitions from the Sale of Goods Act 1979 (“SGA 1979”), the “concept of sale of a chattel has at common law and in statute long been associated with a money transaction”.
  • In “a context where there seems no need to stretch the definition to cover less conventional transactions, and thereby broaden the exception to the nemo dat rule, and given the careful wording of the section – particularly “disposition (as so defined)” – I conclude that ‘disposition’ is limited to the specific types of transactions described in the section where the vehicle is transferred in return for money”.

The Court therefore granted VFS’ application for summary judgment against Doncaster.


This is a sensible and pragmatic decision which will be welcomed by asset and motor finance providers. It is difficult to imagine how the Court could have sensibly come to any other conclusion; particularly in the application (by analogy) of the definitions in the SGA 1979 of “sale” and “contract of sale”. It is, of course, not a new concept for the HPA 1964 to adopt the definitions used in the SGA 1979. In Dodds v Yorkshire Bank Finance Limited [1992] CCLR 92, the Court of Appeal noted that the lender had “very properly” conceded that the words “good faith” in the HPA 1964, though not defined, must be interpreted in the same way as in Section 61(3) of the SGA 1979. It therefore follows that unless third parties actually pay for a vehicle (and provide supporting evidence) which is subject to finance outstanding under a hire purchase or conditional sale agreement, a defence relying on Part III of the HPA 1964 is plainly misconceived and summary judgment can be obtained.