S/L/36. Mistaken Identity: Case note on Shogun Finance v Hudson (2004) UKHL

In a recent hearing the House of Lords was presented with the opportunity to clarify the legal rights of the innocent parties affected by a fraudulent hire purchase and subsequent sale of a motor vehicle. For decades many cases of 'mistaken identity', which have involved similar scenarios of rogue trading, have followed the traditional and long-established common law rule of nemo dat quod non habet - i.e. no one can give a better title than he has, which has generally favoured the original owner. Determining whether title was passed from the original owner to the rogue and then to the innocent purchaser is fundamental when considering the application of the nemo dat principle. By law such cases fall into one of two categories: void for mistake or voidable for fraud4. It is, however, by all means not a straight-forward task and it seems that the recent House of Lords decision has not managed shed any new light on how to correctly approach such cases.