JANUARY CASE READING TUTORIAL

LEWIS V AVERAY
ANSWERS
a)

Lewis v Averay [1971] 3 All ER 907; [1972] 1 QB 198. Note

the spelling of the case names!! The second citation will be the
most authoritative as it is later, and so the judges will have had
time to confirm their judgements as correct. Where there is a
choice of citations, only one should be provided the most
authoritative, which is usually the latter.

b)

The Appellant is Anthony John Averay, the defendant at first

instance.

c)

The Respondent is Mr Lewis, the plaintiff at first instance.

d)

Court of Appeal, Civil Division

e)

22nd July 1971

f)

Lord Denning MR; Megaw, Phillimore LJJ. The judgments are

reported in order of the seniority of the judges.

g)

Three judges sat. This is an appeal and an uneven number of

judges always sits to ensure a clear verdict.

h)

The Appellant was represented by both RN Titheridge and

ACBM David of Counsel, and Amery- Parker & Co, solicitors.
The Respondent was represented by DL Prebble of Counsel and
Adams, Brown & Co , Bristol, solicitors.

i)

Mr Lewis car was for sale. A rogue, who represented himself

as the famous actor Richard Greene, offered to buy the car for
the agreed price of $450. He proffered a cheque for this amount
but Mr Lewis was reluctant to hand over the car until the
cheque cleared. The rogue purported to establish his identity by

showing a special admission pass to Pinewood Studios. This

satisfied Mr Lewis who handed over the car and log books in
return for the cheque. The cheque was worthless. The rogue
sold the car to Mr Averay, an innocent purchaser.
The rogue could not be found.
j)

The remedy sought on this appeal was to have the decision of

the County Court judge overturned. (The remedy sought at first
instance was damages for conversion of the car).

k)

The issue of law is (per Lord Denning at 205):

Was there a valid contract of sale between Mr Lewis and the
rogue?
To decide this, the following issue needs to be decided (per
Lord Denning, at 206):
What is the effect on the contract of a mistake by one party as to
the identity of the other?

l)

There are no issues of fact. This is an appeal. Any issues of fact

would have been decided at first instance.

m)

Ratio: Per Lord Denning (at 207) and Phillimore LJ ( at 208)

mistake as to the identity of the rogue did not prevent the
formation of a valid contract. But it did render it voidable, that
is liable to be set aside at the instance of the mistaken person, so
long as he does so before third parties have in good faith
acquired rights.
The reasoning of Megaw LJ: mistake as to the identity of the
rogue did not prevent the formation of a valid contract because
it was a mistake as to attributes (creditworthiness), not identity.
Be aware of the very different reasons for the judges decisions.
Even though the decision was unanimous, the reasons for the
decision are not consistent and each reason does not constitute a

separate ratio. There can only be one ratio for a case and unless
this is found in unanimity or a clear majority it does not exist.
Here, the judgments of Denning MR and Phillimore LJ
constitute the ratio, whereas the different reasoning of Megaw
LJ does not.
(n)
Obiter
Per Lord Denning:
206
Unilateral mistake as to identity does not render a contract void.
206
Fine distinctions between mistake as to identity and its attributes
do no good to the law. This is a distinction without a
difference.
207
It is wrong that the rights of an innocent purchaser should depend
on whether the original seller was mistaken as to identity or
attribute.
207
When a contract is made between parties in person then the
contract is made between the parties physically present ( even
though it may be avoided for fraud)
Per Megaw LJ
209
discussion of the value of Mrs Lewis evidence.
(o)

Cases followed: Phillips v Brooks, and Kings Norton Metal v

Eldridge Merrett& Co
Cases distinguished: Lake v Simmons, Sowler v Potter, (Ingram
v Little was overturned rather than distinguished)

(p)

Look at the answer to (m) above. The reasoning of the majority

(though Phillimore LJs reasons are not very detailed) is quite
different from the reasoning of Megaw LJ. This is very important
to note when the decision of the judges is the same but the
rationale for those decisions is quite different. Depending on the
extent of the difference between the judges this may mean that
there is no true ratio in the case and each of the judgments is
merely persuasive. If a subsequent set of facts is before the
courts which are indistinguishable from the facts in the original
case then there is a precedent for the outcome even if the
reasoning is not consistent. But if the subsequent case draws on
similar principles but with different facts then the original case is
not a binding precedent.
In this case, with the 2:1 reasoning, the reasoning of Lord
Denning is the ratio that is followed by the courts in later
decisions.

(q)

The Court held that the appeal be allowed. The contract between
Mr Lewis and the rogue was voidable, but could not be avoided
once the car had been on sold to a bona fide purchaser for value
without notice.

(r)
Regardless of the difficulty arising from there being conflicting
reasons given by the judges, as an English decision, this case is not a
binding precedent in NSW. It is, however of great persuasive value and
in the absence of any cases considering the same issue, it can be
considered the law in NSW. However, it is not only necessary to look at
what Australian cases have considered this issue but it is necessary to
look also at its development in the English Courts. A more recent decision
is Shogun Finance v Hudson [2003] UKHL 62 in which many of these
issues were considered in great detail. So in considering the law in NSW
you must look at the different reasons in the Lewis case as well as the
more recent English decisions that consider Lewis. Then look at the
comments that have been made by the Australian Courts about this line of
cases.