Hopcraft v Close Brothers Ltd; Johnson v FirstRand Bank Ltd; Wrench v FirstRand Bank Ltd

The appeals concerned the common situation in which a car dealer introduces a customer to a lender to sell the car on finance, and the lender pays a commission to the dealer. In each of the appeals, the commission was either not disclosed, or only partially disclosed, to the customer.

The customers brought claims against the lenders, seeking rescission of the finance contracts and/or monetary remedies. All three appeals concerned claims in the tort of bribery and for dishonest assistance in breach of fiduciary duty. The appeal in Johnson also concerned a claim that Mr Johnson’s relationship with FirstRand Bank Ltd was “unfair” for the purposes of the Consumer Credit Act 1974 (“the 1974 Act”).

The Supreme Court held that: (i) for a claim in the tort of bribery to succeed, the recipient of the putative bribe must owe fiduciary duties; (ii) for a fiduciary duty to exist, “there must be the assumption of responsibility by the fiduciary to act exclusively on behalf of the other in the conduct of the other’s affairs” (§100); (iii) that test was not satisfied in relation to the car dealers; and (iv) the claims in bribery therefore failed. The absence of any fiduciary duty was also fatal to the claims for dishonest assistance in a breach of fiduciary duty.

In relation to Mr Johnson’s claim under the 1974 Act, the Supreme Court emphasised that the question of whether a relationship is “unfair” is highly fact-sensitive. The Court concluded that the relevant relationship was unfair on the particular facts of Mr Johnson’s case, and ordered that FirstRand Bank Ltd pay him an amount equal to the commission, plus interest.

Andrew Scott KC, Ajay Ratan and George Molyneaux acted for Close Brothers Ltd (with Laurence Rabinowitz KC, Niranjan Venkatesan KC and Dame Sarah Worthington KC (Hon)), instructed by Slaughter and May.

The judgment is available here.

The court’s press summary is available here.