compensation for its involvement in the ongoing Gwent Fleet
Management (GFM) fraud case, which has caused over £3 million (€3.4
million) in losses for more than 30 UK financiers.
reasonable” out-of-court settlement from WK Plasterers Ltd (WKP),
the buyer of an alleged fraudulently sold Mitsubishi Outlander
leased on hire purchase to GFM by Weatherbys.
Melanie Chell, a partner at law firm HBJ
Gateley Wareing representing Weatherbys Finance, called the action
a “textbook example of the Gwent modus operandi”.
Customers of GFM, which is currently the
subject of an investigation by Welsh police, allegedly bought cars
from a website linked to GFM called BuyNewCars4Less.
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The cars were then, allegedly, acquired from
dealerships by GFM, under finance agreements from companies such as
Weatherbys, on the understanding that they were to be used as
company cars by GFM.
GFM then, it is alleged, delivered the
vehicles to the third parties, who thought they were receiving the
vehicles originally paid for.
In the case last month, WKP originally paid
Gwent for the Outlander in January 2008, while the vehicle in
question was held at a Mitsubishi dealership.
Subsequently, Gwent approached Weatherbys to
finance the vehicle. Weatherbys, having no idea that the car had
already been “sold”, paid for the asset and leased it to Gwent.
Weatherbys thought it was leasing a company
car to a legitimate business, when in fact Gwent arranged for the
vehicle to be delivered directly to WKP.
Some time later, in the third quarter of 2008,
GFM became insolvent and ceased making payments to Weatherbys,
prompting an investigation and the commencement of legal
proceedings.
WKP then attempted to claim title to the
vehicle via the Hire Purchase Act of 1972, due to GFM’s status as
debtors in a hire purchase agreement, but was confounded by the
fact that the vehicle had been purchased from Gwent prior to the
underwriting of the hire purchase agreement.
It was proved that the Outlander had gone
straight from the Mitsubishi dealer to WKP without ever having been
in GFM’s hands, rebutting a suggestion that GFM had acted as a
mercantile agent for Mitsubishi.
“This is a deserved victory for both the
finance houses,” said Chell.
“Here we have two parties who are both totally
innocent – and the facts of the case have fallen in favour of a
finance house which has taken a robust view, and has thus been able
to recover its money from a third party.”
