Court determines title to £11 million Ferrari after 25 year old dispute

10/11/15

In June 2014, the American billionaire Leslie Wexner paid nearly £11 million for a Ferrari 375 Plus (the “Car”) at an auction held by Bonhams at the Goodwood Festival of Speed. The Car was the star attraction of the auction: it is one of only six 375 Plus Ferraris ever made, only four of which remain in existence. The Ferrari 375 Plus has a famous racing pedigree from the 1950s.

Mr Wexner has subsequently sought to rescind his contract of sale with the Car’s sellers and his buyer’s agreement with Bonhams, alleging that he was misled about the title to the Car.  He wants his money back.

Eight parties, some of whom have asserted various interests in the Car or in its parts, are now involved in proceedings before the English Court which will determine the fate of the Car and who gets to keep a share (if any) of the proceeds of sale. The Car is currently in a container in Southampton, fully restored, and waiting for its owner to collect it.

The trial of the action is due to commence next year. Flaux J ordered a trial of a preliminary issue to determine who before the auction owned the Car’s chassis, and who owned the Car’s spare parts.

The Car was bought by an Ohio car collector, Mr Karl Kleve, in 1958. The Car’s wrecked chassis was stolen from Ohio in 1989 and found its way to Belgium. Mr Jacques Swaters, a highly decorated Belgian war hero, racing driver, Ferrari enthusiast, and friend of Enzo Ferrari, bought the chassis in 1990 and went about restoring the Car. Mr Kleve made attempts to regain possession of the Car. In 1999, Mr Swaters said he entered into a settlement agreement with Mr Kleve governed by New York law. Both Mr Kleve and Mr Swaters are now dead.

Before the English Court, Mr Swaters’ daughter, Ms Florence Swaters, said that she had title to the chassis as a matter of Belgian law, and title to the chassis and the spare parts under the settlement agreement. But parties claiming through Mr Kleve, his daughter Ms Kristine Lawson and a Mr Joseph Ford, said that the Car and its spare parts belonged to them. They alleged that: Mr Swaters did not act in good faith when he purchased the chassis and so could not acquire title under Belgian law; the settlement agreement was a forgery and Mr Kleve’s agent had no authority to enter the agreement; and they had title to the Car as a matter of Ohio law.  

At trial, Flaux J reviewed evidence from the 25 year old dispute: material from the Ferrari archives, and motor racing documents going back to the 1950s. He considered expert evidence on the authenticity of the settlement agreement, Belgian law on the transfer of title, the New York law of agency, and Ohio law on motor vehicles.

He held that before the auction Ms Swaters had title to the Car, including the spare parts. He dismissed all the claims of Ms Lawson and Mr Ford.

The judgment is here.