Chaudhry v Prabhakar
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE MAY,LORD JUSTICE STUART-SMITH,LORD JUSTICE STOCKER |
| Judgment Date | 20 May 1988 |
| Judgment citation (vLex) | [1988] EWCA Civ J0520-3 |
| Docket Number | 88/0458 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 May 1988 |
[1988] EWCA Civ J0520-3
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM ORDERS OF MR J.P. GORMAN Q.C., SITTING AS A DEPUTY HIGH COURT JUDGE AND MR JUSTICE ROCH
Royal Courts of Justice
Lord Justice May
Lord Justice Stocker
Lord Justice Stuart-Smith
88/0458
and
MR MARK HOYLE, instructed by Messrs Khans, appeared for the Appellant (First Defendant).
MR TIMOTHY SCOTT, instructed by Messrs Benson Mazure & Co., appeared for the Respondent (Plaintiff).
I will ask Lord Justice Stuart-Smith to give the first judgment.
This is an appeal from the judgment of Mr Gorman Q.C., sitting as a deputy judge of the Queen's Bench Division in which he held the first defendant liable for the sum of £5,526.58. He held the second defendant also liable in a somewhat larger sum. Both defendants appealed against the judgment; but the appeal of the second defendant was abandoned shortly before the hearing.
The case concerns a Volkswagon Golf motor-car sold by the second defendant to the plaintiff, the first defendant acting as an unpaid agent for the plaintiff. The sale price was £4,500. Unfortunately the car turned out to be unroadworthy and quite valueless.
The circumstances in which the sale arose were these. The plaintiff is a young woman of 26; she is an accountant; she knew nothing about the mechanical side of motor-cars; but she had recently passed her driving test and was minded to buy a second-hand car.
The first defendant was a close friend; he was not a mechanic, but worked in a grocer's shop. Nevertheless he had had quite a bit to do with motor-cars. He had helped a cousin of the plaintiff to buy a car; he had not infrequently bought and sold cars for himself; seemingly making a profit on the transactions. The plaintiff clearly regarded him as someone who knew a good deal more about motor-cars than she did. She asked him if he could see if he could find her a suitable car and she stipulated that such car should not have been involved in an accident. He agreed to do so. He was not to be paid and he acted solely out of friendship.
Shortly after this the first defendant came across the car. He was talking to a friend in the presence of the second defendant who said that he had a Golf motor-car for sale which was available outside. The first defendant went to look at it. It looked very attractive. It had what the first defendant described as a "lot of make-up" and he thought it would be a nice car for a lady to drive. He became aware that the second defendant was a car sprayer and panel beater and that the bonnet of the car had been crumpled and either straightened or replaced.
With the consent of the second defendant he took the car round to the plaintiff. He told her that it was in very good condition; it was one year old and had 8,000 miles on the clock; and that he highly recommended it. He also said that the owner was a friend of his and had a garage and no way would he give him a car that was not a good one. This was not correct, since he had never met the second defendant before.
The plaintiff asked the first defendant if the car had been involved in an accident and he said no. He commended the car and assured her that she need not have it examined by a mechanic. As a result of these assurances the plaintiff did not have it examined by a mechanic; she decided to buy it. She paid £100 to the first defendant, which he handed to the second defendant. The balance of the price was paid by bankers draft direct to the second defendant.
Although there was some superficial appraisal by the plaintiff's brother before the plaintiff decided to buy, the judge found that the plaintiff had relied upon the first defendant.
Over the next few weeks the car did not perform satisfactorily; but it was not until about two months after the sale that the major defects came to light. While the plaintiff's brother was driving the car it was involved in an accident. When the insurance company's engineer, a Mr English, examined the car, he discovered that it had been involved in a previous accident. In his evidence he said that it had been involved in a very severe frontal impact such that the whole of the vehicle would need to be stripped out and the engine rebuilt. Some very bad attempt had been made to repair the vehicle, but it remained very severely damaged and unroadworthy. He likened it to a can of beans that had been cut open, it having in effect broken its back. Moreover, accessories had been fitted such as a battery, water bottles and cables, so that the repair was invisible unless the accessories were removed; and the underseal had been put over the chassis repair in an attempt to disguise it. The break or cut in the chassis was left open with ragged edges and the repair had left it distorted and misaligned. It was not economical to repair it.
The car had indeed been involved in a serious previous accident and had been bought as salvage. The repairs had been carried out by or on behalf of the second defendant. His claim that he had done them properly was rejected by the judge, who held that the positioning of the accessories and use of the underseal were intended to disguise and conceal the true state of affaris. The second defendant also alleged that he had told the first defendant that the car was a salvaged car which had been repaired. This was also rejected, and the judge held the second defendant liable on the basis that there was a breach of the implied term under section 14(2) of the Sale of Goods Act 1979 that the car was of merchantable quality.
The judge held that the first defendant was in breach of his duty to take reasonable care. He regarded him as a person who was more skilled than someone with no knowledge of cars, though not putting him in the same position as a factor or seller. The gist of his finding is that, having been specially asked to find a car that had not been involved in an accident, the least he could do was to ask if it had been; that he had been put on notice in respect of the crumpled bonnet which he should have followed up further; and that he was commending as attractive and accident free a car that was neither.
Mr Hoyle on behalf of the appellant accepts that he was under a duty of care to the plaintiff, but he submitted that the learned judge had imposed too high a standard of care, and when the correct standard was applied the appellant was not in breach. In the forefront of his argument is the proposition that the appellant was a gratuitous or unpaid agent and that the duty on such a person is to take such care towards his principal as he would in relation to his own affairs and to exhibit such skill as he actually possesses. He further submitted that this standard is an entirely subjective one. This appears to mean in the context of this case that if the appellant would have bought the car himself, as he said he would, and is an honest man as the judge found him to be, he cannot be held liable because he has acted up to the standard expected of an unpaid agent.
I cannot accept this; the degree of care and skill owed by a gratuitous agent is stated by Bowstead to be such skill and care as persons ordinarily exercise in their own affairs or, where the agent has expressly or impliedly held himself out to his principal as possessing skill adequate to the performance of a particular undertaking, such skill and care as would normally be shown by one possessing that skill. See 15th edition, Article 44(3), page 152. But I am quite satisified that this is an objective standard and is not simply to be measured by the agent's honest statement that he would have similarly acted if he had been transacting the business on his own account, however foolish that may be. For my part, I would prefer to state an agent's duty of care as that which may reasonably be expected of him in all the circumstances. This was the approach of the Court of Appeal in Houghland v. R.R. Low (Luxury Coaches) Ltd. [1962] 1 Q.B. 694 on the somewhat analogous case of a gratuitous bailee. Ormerod L.J. said, at page 698:
"For my part, I have always found some difficulty in understanding just what was 'gross negligence,' because it appears to me that the standard of care required in a case of bailment, or any other type of case, is the standard demanded by the circumstances of that particular case. It seems to me that to try and put a bailment, for instance, into a watertight compartment—such as gratuitous bailment on the one hand, and bailment for reward on the other—is to overlook the fact that there might well be an infinite variety of cases, which might come into one or the other category. The question that we have to consider in a case of this kind, if it is necessary to consider negligence, is whether in the circumstances of this particular case a sufficient standard of care has been observed by the defendants or their servants."
I have no doubt that one of the relevant circumstances is whether or not the agent is paid. If he is, the relationship is a contractual one and there may be express terms upon which the parties can rely. Moreover, if a paid agent exercised any trade, profession or calling, he is required to exercise the degree of skill and diligence reasonably to be expected of a person exercising such trade, profession or calling, irrespective of the degree of skill he may possess. Where the agent is unpaid, any duty of care arises in tort. Relevant circumstances would be the actual skill and experience that the agent had, though, if he has represented such skill and experience to be...
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