George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE OLIVER,LORD JUSTICE KERR |
| Judgment Date | 29 September 1982 |
| Judgment citation (vLex) | [1982] EWCA Civ J0929-1 |
| Docket Number | 82/0392 |
| Court | Court of Appeal (Civil Division) |
| Date | 29 September 1982 |
[1982] EWCA Civ J0929-1
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR. JUSTICE PARKER)
Royal Courts of Justice.
The Master of the Rolls (Lord Denning)
Lord Justice Oliver
Lord Justice Kerr
82/0392
1979 G. No. 1137
MR. PATRICK TWIGG (instructed by Messrs. McKenna & Co.) appeared on behalf of the (Plaintiff) Respondent.
MR. MARK G. WALLER, Q.C. and MR. MORDECAI LEVENE (instructed by Messrs. Davidson Doughty & Co.) appeared on behalf of the (Defendant) Appellant.
In outline
Many of you know Lewis Carroll's "Through the Looking Glass". In it there are these words:
"'The time has come', the Walrus said, 'to talk of many things—of ships and shoes and sealingwax—of cabbages and kings'".
Today it is not "of cabbages and kings"—but of cabbages and what-nots. Some farmers (called George Mitchell Ltd.) ordered 30 lbs. of cabbage seed. It was supplied. It looked just like cabbage seed. No one could say it was not. The farmers planted it over 63 acres. Six months later there appeared out of the ground a lot of loose green leaves. They looked like cabbage leaves but they never turned in. They had no hearts. They were not "cabbages" in our common parlance because they had no hearts. The crop was useless for human consumption. Sheep or cattle might eat it if hungry enough. It was commercially useless. The price of the seed was £192. The loss to the farmers was over £61,000. They claimed damages from the seed merchants. The judge awarded them that sum with interest. The total comes to nearly £100,000.
The seed merchants appeal to this court. They say that they supplied the seed on a printed clause by which their liability was limited to the cost of the seed, that is, £192. They rely much on two recent cases in the House of Lords— Photo Production Ltd. v. Securicor Transport Ltd. (1980) Appeal Cases 827 and Ailsa Craig Fishing Co. Ltd. v. Malvern Fishing Co. and Securicor, 26th November, 1981 (not yet reported.
In detail
The farmers' farm land is in the maritime belt of the East Lothian, almost at sea level. The soil is very fertile. It has very mild winters with no frosts. It is about the one place in the country where Dutch winter cabbage can be grown successfully. It is sown in the spring and transplanted in the summer. It grows very slowly and stands throughout the winter in the fields. It is harvested from February onwards. It is a hard, dense, heavy cabbage which captures the market at a time when there is very little other green-stuff available.
For the last 25 years these farmers—and other farmers in the maritime belt—have got their seed from Finneys who get it from Holland. Finneys had a representative, Mr. Wing. He called on the farmers each year. At Christmas 1973 he came. They gave him an order by word of mouth for 30 lbs. of Finneys Late Dutch Special Cabbage Seed. There was no order in writing. In February 1974 the seeds arrived. The invoice gave the date of despatch as the 14th February, 1974.
"30 lb. Cabbage. Finneys Late Dutch Special £192.00. Important. For Seeds Act, Statutory Declaration, Conditions of Sale etc., see reverse".
Then on the back there were in small print many Conditions of Sale. Included in them was the clause relied upon by Finneys. They say that their liability was limited to the return of the price, £192: and that they are not liable for £61,000 claimed.
Are the Conditions part of the contract?
The farmers were aware that the sale was subject to some Conditions of Sale. All seed merchants have Conditions of Sale. They were on the back of the catalogue. They were also on the back of the invoice each year. So it would seem that the farmers were bound at common law by the terms of them. The inference from the course of dealing would be that the farmers had accepted the Conditions as printed—even though they had never read them and did not realise that they contained a limitation on liability.
But in view of modern developments, it is to be noticed that the Conditions were not negotiated at all between any representative bodies. They were not negotiated by the National Farmers' Union. They were introduced by the seed merchants by putting them in their catalogue and invoice—and never objected to by the farmers.
It is also to be noticed that the farmers never thought of insuring against any breach of contract by the seedsmen. It would be difficult to get any quotation. It might be possible for the seed merchants to insure themselves; something in the nature of a product liability insurance. Some seed merchants do so.
The printed Condition here
The limitation clause here is of long standing in the seed trade. It has been in use for many years. The material part of it is as follows:
"All Seeds, Bulbs, Corms, Tubers, Roots, Shrubs, Trees and Plants (hereinafter referred to as 'Seeds or Plants') offered for sale or sold by us to which the Seeds Act 1920 or the Plant Varieties and Seeds Act 1964 as the case may be and the Regulations thereunder apply have been tested in accordance with the provisions of the same. In the event of any seeds or plants sold or agreed to be sold by us not complying with the express terms of the contract of sale or with any representation made by us or by any duly authorised agent or representative on our behalf prior to, at the time of, or in any such contract, or any seeds or plants proving defective in varietal purity we will, at our option, replace the defective seeds or plants, free of charge to the buyer or will refund all payments made to us by the buyer in respect of the defective seeds or plants and this shall be the limit of our obligation. We hereby exclude all liability for any loss or damage arising from the use of any seeds or plants supplied by us and for any consequential loss or damage arising out of such use or any failure in the performance of or any defect in any seeds or plants supplied by us or for any other loss or damage whatsoever save for, at our option, liability for any such replacement or refund as afordsaid. In accordance with the established custom of the Seed Trade any express or implied condition, statement or warranty, statutory or otherwise, not stated in these Conditions is hereby excluded. The price of any seeds or plants sold or offered for sale by us is based upon the foregoing limitations upon our liability. The price of such seeds or plants would be much greater if a more extensive liability were required to be undertaken by us".
The natural meaning
There was much discussion before us as to the construction of that Condition. I am much impressed by the words I have underlined. Taking the clause in its natural plain meaning, I think it is effective to limit the liability of the seed merchants to a return of the money or replacement of the seeds. The explanation they give seems fair enough. They say that it is so as to keep the price low: and that if they were to undertake any greater liability, the price would be much greater.
After all, the seed merchants did supply seeds. True, they were the wrong kind altogether. But they were seeds. On the natural interpretation, I think the Condition is sufficient to limit the seed merchants to a refund of the price paid or replacement of the seeds.
The hostile meaning
Before the decisions of the House of Lords in the two Securicor cases, I would have been inclined to decide the case as the judge did. I would been "hostile" to the clause. I would have said that the goods supplied here were different in kind from those that were ordered, and that the seed merchants could not avail themselves of the limitation clause. But in the light of the House of Lords' cases, I think that that approach is not available.
I am particularly impressed by the words of Lord Wilberforce in the second Securicor case where he said:
"One must not strive to create ambiguities by strained construction, as I think the appellants have striven to do. The relevant words must be given, if possible, their natural, plain meaning. Clauses of limitation are not regarded by the courts with the same hostility as clauses of exclusion: this is because they must be related to other contractual terms, in particular to the risks to which the defending party may be exposed, the remuneration which he receives, and possibly also the opportunity of the other party to insure."
To my mind these two cases have revolutionised our approach to exemption clauses. In order to explain their importance, I propose to take you through the story.
The heyday of Freedom of Contract
None of you nowadays will remember the trouble we had—when I was called to the Bar—with exemption clauses. They were printed in small print on the back of tickets and order forms and invoices. They were contained in catalogues or timetables. They were held to be binding on any person who took them without objection. No one ever did object. He never read them or knew what was in them. No matter how unreasonable they were, he was bound. All this was done in the name of "freedom of contract". But the freedom was all on the side of the big concern which had the use of the printing press. No freedom for the little man who took the ticket or order form or invoice. The big concern said, "Take it or leave it". The little man had no option but to take it. The big concern could and did exempt itself from liability in its own interest without regard to the little man. It got away with it time after...
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