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Mr Tuke is suing Mr Derek Hood and his company, JD Classics Ltd, for around £9 million, with success

Discussion in 'Vintage (thru 365 GTC4)' started by Platini 289, Apr 23, 2018.

  1. Platini 289

    Platini 289 Karting

    Sep 21, 2015
    73
    Mr Tuke, from Guildford, is suing Mr Derek Hood and his company, JD Classics Ltd, for around £9 million - Success against JD Classics Ltd so far. Watch out Newport Beach CA!


    What effect will this have on the high end classic car market?


    “Mr Michael Tuke instructed Michael Grenfell to institute multiple proceedings against J D Classics Ltd and Derek Hood the first case of which (against the Company only) was concluded successfully on the 18th of April 2018.
    In 2009 Mr Tuke sold his highly successful business, and had £40m to invest in Classic Cars.
    He instructed Mr Derek Hood of J D Classics Ltd as a professional advisor and his agent for buying and selling cars on his behalf. Mr Hood advised him that he could double his money.
    Over the next few years Mr Tuke bought and sold some 41 classic cars on the advice of Mr Hood, and, at a time when the values of classic cars was increasing, suffered catastrophic losses which nearly bankrupted him.
    Mr Hood on behalf of J D Classics Ltd denied that he was Mr Tuke's agent, or that he should produce any documents to explain fully and transparently details of the various transactions.
    After we carried out detailed enquiries and analysis of thousands of documents, we issued proceedings against J D Classics Ltd to have that issue decided. Subsequently three further sets of proceedings were issued against J D Classics Ltd, in two of which fraud and deceit are alleged against both the Company and Mr Hood, and similar allegations are being added to the third claim. Some 18 cars are involved.
    The Agency case was decided in Mr Tuke's favour as mentioned above. Although not part of that case the Judge nevertheless observed that Mr Hood had been guilty of deliberate and dishonest conduct in relation the the sale of an XKSS on Mr Tuke's behalf.
    The other three cases are to be consolidated and heard at a later date.
    The Approved Judgment is available below.


    This case illustrates how important it is for both dealers and customers to establish at the start of a relationship exactly what that relationship is, and to confirm it in writing. An agent has a duty of absolute fidelity and openness to its principal and must not make a secret profit at the principal's expense.“


    Related links:

    http://www.wilmotslitigation.co.uk/sites/default/files/Tuke_0.pdf

    https://www.telegraph.co.uk/news/2018/03/19/tycoon-spent-40m-classic-cars-sues-car-dealer-invested-claiming/

    https://www.jdclassics.com/News/2017/Opening-Soon-in-Newport-Beach/4371


    https://www.pistonheads.com/gassing/topic.asp?h=0&f=140&t=1731962
     
  2. greyboxer

    greyboxer F1 World Champ

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    The judgement is a fascinating read not just for the specific case but as an insight as to how many folk will now perceive the industry (with its clear parallels to some recent art world cases)
     
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  3. Timmmmmmmmmmy

    Timmmmmmmmmmy Formula 3

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    Totally agree, 1.15 million quid for an Allard. WTF. Even the worlds best Allard should be about half that...... Just my 2 cents.
     
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  4. Bluebottle

    Bluebottle F1 Rookie
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    At the end of the day, they're all second hand car dealers, however posh they may sound and however valuable their stock. Most of them are no better than Arthur Daley.

    In the last year I have heard two friends tell me that they are never going to deal with Simon Kidston (after the sale of a £1m.+ Lamborghini) and Talacrest (after the purchase of a Dino), yet these are two dealers with a reputation for buying and selling some of the rarest and most valuable cars in the world.

    It will be very interesting to see how this action ends up, but it does underline two things about classic cars:
    1. Be very careful about whom you trust when buying or selling.
    2. Buy a car because you want it, not because it's going to be an investment.
     
  5. tifoso2728

    tifoso2728 F1 Veteran
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    Even the finest investment houses in the world have their clients understand the caveat of "nothing is guaranteed. "
     
  6. Alex308qv

    Alex308qv Karting

    Jul 1, 2016
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    Two thought-obvious life lessons: If someone claims a scheme to double money, and they want you in on it (as opposed to doing it themselves), turn and run, Forrest, run. And diversification.
     
  7. Marcel Massini

    Marcel Massini F1 World Champ
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    At least one of the two parties involved here is/was greedy, greedy, greedy.
    Always the same story.

    Marcel Massini
     
  8. Collesano

    Collesano Rookie

    Jan 14, 2017
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    England UK
    Heavy investors went into Mr Hood's...business in September 2016. http://www.charmecapitalpartners.com/news/charme-capital-partners-acquires-jd-classics

    Rumours suggest that one of the investors behind the CCP transaction have (former) strong links to both Fiat and Ferrari...?

    Since there are three more court cases to follow, wonder how the investors/CCP will view Mr Hood's future in the company, once the dust have settled?
     
  9. Marcel Massini

    Marcel Massini F1 World Champ
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    Old news.
    Matteo di Montezemolo at Charme Capital Partners, son of Luca Cordero di Montezemolo, formerly of Fiat and Ferrari.
    No secrets here.

    Marcel Massini
     
    of2worlds and 375+ like this.
  10. merstheman

    merstheman F1 Rookie

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    It's not surprising that this kind of thing happens. Not at all. Every transaction that involves that much money for non-essential things is always going to be vulnerable to greedy business practices. We'll see what happens but my feeling is cars will remain expensive, dealers will continue to tout them as investments, and people will continue to lose money from being careless, or at least having their priorities in what I believe to be the wrong order.
     
  11. Timmmmmmmmmmy

    Timmmmmmmmmmy Formula 3

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    Having skim read the judgement, the thing that got me was the amount of double talk to hide the fact the dealer principle was buying and selling cars for his own benefit, like why not just come clear. It reminds me of the comments from Goldman Sachs, that everyone (investor or not) is to be treated as a counterparty....... (Which wont encourage repeat custom).
     
  12. Timmmmmmmmmmy

    Timmmmmmmmmmy Formula 3

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    I have heard nothing but good about Kidston so I wonder if they simply didn't realise the profits they hoped for? Which wouldn't necessarily be the fault of SK.
     
  13. johngtc

    johngtc Formula Junior
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    Mar 4, 2005
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    Caveat emptor!

    I would expect to do very thorough due diligence if I were spending 40 million. (And that's purely academic!!)
     
  14. Bluebottle

    Bluebottle F1 Rookie
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    No, he got a very good price, I believe, but was not impressed by the level of service, given the not insubstantial commission that SK was earning.
     
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  15. Schlesser

    Schlesser Rookie

    Feb 12, 2013
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    Greedy? Would you like to learn something about an expert/fiduciari who tried to get commissions in Villa d'Este from both sides?
     
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  16. Timmmmmmmmmmy

    Timmmmmmmmmmy Formula 3

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    Fair point John, otherwise why pay for a premium service?
     
  17. wbaeumer

    wbaeumer F1 Veteran
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    Is Kidston a dealer? I know him as a broker...
     
  18. Bluebottle

    Bluebottle F1 Rookie
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    Dealer, broker, agent, investment consultant, they tend to blur into each other, as Mr. Tuke appears to have discovered. I use the term "dealer" as shorthand to encompass all varieties of people whose business is to effect the purchase and / or sale of second-hand cars, either as principal or on behalf of others.
     
    Timmmmmmmmmmy likes this.
  19. Timmmmmmmmmmy

    Timmmmmmmmmmy Formula 3

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    So many of us wish to trust people and institutions, that is the foundation of most business dealings. One key area the judgement discussed was that Mr. Tuke should have written a contract with Mr. Hood setting out what role Mr. Hood would have and provisions for conflict of interest. And that is possibly a great lesson for many Ferrari owners as it would be for buying any high value item such as a house. One doesn't want to become cynical of everyone but as Warren Buffet said "If you can't see who the mark is, its probably you"
     
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  20. Parnelli

    Parnelli Formula Junior
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  21. Marcel Massini

    Marcel Massini F1 World Champ
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    of2worlds and Timmmmmmmmmmy like this.
  22. IXLR84FUN

    IXLR84FUN Rookie

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    #22 IXLR84FUN, May 13, 2018
    Last edited: May 13, 2018
    When it goes all wrong with ''Investing'' in classic cars, this is an interesting read on one of the Big Players in high money cars, and a client with deep pockets. Amazing that so many millions get exchanged on only an email exchanges, without a hard-contract.

    The relationship of trust with a car dealer has always been questioned and in this ruling it follows a series of baiting claims that drain the clients wallet, socking him with heavy '' The Bubble'' losses over an 8 year period.

    www.wilmotslitigation.co.uk/blog/2018/04/19/success-against-jd-classics-ltd

    https://4pumpcourt.com/news-sean-brannigan-qc-and-alexander-wright-successfully-act-for-michael-tuke-in-classic-car-litigation-against-jd-classics-limited.html
     
  23. Foncool

    Foncool Karting

    Oct 27, 2011
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    The most amazing part of this world, is there are numerous situations where the dealer/broker/consultant facilitates a transaction that is obviously a “bad” deal for one of the parties involved. Then even though the party on the short end of the transaction knows that his interest were compromised by that dealer/broker/consultant that individual continues to do business with and trust that dealer/broker/consultant on more transactions.
     
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  24. sp1der

    sp1der Formula 3
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    Just read the company is now in administration
     
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