Lombard North Central plc v Stobart
Queen's Bench Division 22 February 1990 (Times Law Report 2.3.90)

In April 1985, Mr Stobart, the purchaser, entered into a conditional sale agreement with the company for a Volkswagen Kamper. The cash price was £7,600 and the total sum payable was £10946 payable over 5 years by 60 monthly instalments of £157.

The purchaser paid 23 instalments and then wanted money to go on holiday and decided to sell the car. In May 1987, he inquired of the company how much he owed. He was told on the telephone that the amount outstanding was £1044 and this amount was confirmed in writing. On 4 June 1987 the purchaser sold the car for £5100 and paid the settlement fee, then £1003, to the company. On the 8 June 1987, the company realised its mistake - the true amount outstanding was £5814 - and sued.

At the original trial in June 1989 at Southampton Crown Court, the judge made two important findings of fact:

1. that the purchaser had genuinely believed that only £1044 was outstanding, and

2. that he would not have sold the car if he had known the true settlement figure.

Thus, by selling the car when he would not otherwise have done so, the purchaser had acted to his detriment.

There was an unequivocal representation by the company as to the amount outstanding, coupled with a clear finding of reliance by the purchaser. This position gave rise to the equitable remedy of estoppel, whereby the plaintiff was prevented from insisting upon his strict legal rights.

The Appeal Court stated that the finding of estoppel was based on facts as found by the Crown Court and there was no reason to disagree with the way in which the Crown Court Judge decided.