Hollier v Rambler Motors (A. M. C.) Ltd

JurisdictionEngland & Wales
Date1972
CourtCourt of Appeal (Civil Division)
[COURT OF APPEAL]

HOLLIER v. RAMBLER MOTORS (A.M.C.) LTD.

[Plaint No. 7053422]

1971 Nov. 18, 19 Salmon and Stamp L.JJ. and Latey J.

Contract - Exception clauses - Negligence - Car damaged by fire caused by repairers' negligence - Repairers "not responsible for damage caused by fire to customer's cars on the premises" - Whether repairers' liability for negligence excluded - Implied term - Whether term to be implied from course of dealing

The plaintiff had had his car repaired at the defendants' garage on three or four occasions over a period of five years. On at least two of the occasions he had signed a form, but had not read the printed words: "The company is not responsible for damage caused by fire to customer's cars on the premises."

[Reported by MRS. CELIA FOX, Barrister-at-Law]

By an oral agreement made between the plaintiff and the defendants, the defendants agreed to repair his car and, while at their premises, the car was damaged by a fire caused by the defendants' negligence. The plaintiff claimed damages for breach of the implied term that the defendants would take reasonable care of his car. The defendants relied on the condition excluding responsibility for damage to cars caused by fire which they contended was incorporated into the oral agreement because of the previous course of dealing between the parties. Judge Worthington-Evans held that the condition was incorporated into the contract and excluded the defendants' liability for negligence, and he dismissed the claim.

On appeal by the plaintiff:-

Held, allowing the appeal, that there was no sufficient course of dealing, so that the condition relied on could not be imported into the oral contract to exempt the defendants' from their own negligence; but that, in any event, the language of the condition was not so plain that it clearly excluded liability for their negligence; and, accordingly, the defendants were liable to the plaintiff.

Turner v. Civil Service Supply Association Ltd. [1926] 1 K.B. 50 and Fagan v. Green & Edwards Ltd. [1926] 1 K.B. 102 overruled.

The following cases are referred to in the judgments:

Alderslade v. Hendon Laundry Ltd. [1945] K.B. 189; [1945] 1 All E.R. 244, C.A.

Fagan v. Green & Edwards Ltd. [1926] 1 K.B. 102.

Hardwick Game Farm v. Suffolk Agricultural Poultry Producers Association[1969] 2 A.C. 31; [1968] 3 W.L.R. 110; [1968] 2 All E.R. 444, H.L.(E.).

McCutcheon v. David MacBrayne Ltd. [1964] 1 W.L.R. 125; [1964] 1 All E.R. 430, H.L.(Sc.).

Olley v. Marlborough Court Ltd. [1949] 1 K.B. 532; [1949] 1 All E.R. 127, C.A.

Price & Co. v. Union Lighterage Co. [1904] 1 K.B. 412, C.A.

Rutter v. Palmer [1922] 2 K.B. 87, C.A.

Turner v. Civil Service Supply Association Ltd. [1926] 1 K.B. 50.

The following additional cases were cited in argument:

Canada Steamship Lines Ltd. v. The King [1952] A.C. 192; [1952] 1 All E.R, 305, P.C.

Cockerton v. Knavery Aznar S.A. [1960] 2 Lloyd's Rep. 450.

Polemis and Furness, Withy & Co. Ltd., In re [1921] 3 K.B. 560, C.A.

Spurling (J.) Ltd. v. Bradshaw [1956] 1 W.L.R. 461; [1956] 2 All E.R. 121, C.A.

Thornton v. Shoe Lane Parking Ltd. [1971] 2 Q.B. 163; [1971] 2 W.L.R. 585; [1971] 1 All E.R. 686, C.A.

Travers (Joseph) & Sons Ltd. v. Cooper [1915] 1 K.B. 73, C.A.

APPEAL from Judge Worthington-Evans at Brentford County Court.

The plaintiff, Walter William Frederick Hollier, commenced an action against the defendants, Rambler Motors (A.M.C.) Ltd., to recover damages for breach of contract causing loss in value of his car in a fire at the defendants' premises. The plaintiff claimed that the fire and the damage had been caused by the defendants' negligence. The defendants relied on

the terms of a condition which they contended excluded liability for their negligence, and could be imported into the oral contract made between the parties, because of a previous course of dealing. Judge Worthington-Evans gave judgment for the defendants. The plaintiff appealed on the ground, that the judge was wrong to hold that the plaintiff was bound by the exclusion clause because on the facts found there was no sufficient course of dealing between the parties.

The facts are stated in the judgment of Salmon L.J.

Robert Johnson for the plaintiff. The nub of the appeal is that the plaintiff was not bound by the exclusion clause. McCutcheon v. David MacBrayne Ltd. [1964] 1 W.L.R. 125 sets out the principles to be applied in determining whether an exclusion clause can be implied into a contract by a previous course of dealing. On the authority of that case the exclusion clause cannot be relied on by the defendants. One of the factors to be taken into account in considering whether there has been a course of dealing from which a term is to be implied into the contract is whether the consignor actually knew what were the terms written on the back of the risk note. Lord Devlin, if the passage is read literally, said that no term could be implied into a contract by a course of dealing unless it could be shown that the party had actual and not only constructive knowledge of the term, and with such actual knowledge had in fact assented to it. Reliance is also placed on Thornton v. Shoe Lane Parking Ltd. [1971] 2 Q.B. 163.

The rules to be applied in construing an exclusion clause are set out by Scrutton L.J. in Rutter v. Palmer [1922] 2 K.B. 87, 92. The clause relied on by the defendants on its true construction cannot exclude their liability for negligence. [Reference was made to Turner v. Civil Service Supply Association Ltd. [1926] 1 K.B. 50; Fagan v. Green & Edwards Ltd.[1926] 1 K.B. 102; Price & Co. v. Union Lottery Co. [1904] 1 K.B. 412:Travers (Joseph) & Sons Ltd. v. Cooper [1915] 1 K.B. 73; In re Polemis and Furness, Withy & Co. Ltd. [1921] 3 K.B. 560; Alderslade v. Hendon Laundry Ltd. [1945] K.B. 189.]

The exception clause could not be imported into the oral contract made on March 17. If it was so imported on its true construction it did not exclude the defendants' liability for negligence.

Simon Tuckey for the defendants. The evidence was that there was a course of dealing consisting of three or four occasions over a five year period. That is a sufficient course of dealing to import the exclusion clause into the oral contract. There are passages in Hardwick Game Farm v. Suffolk Agricultural Poultry Producers Association [1969] 2 A.C. 31 expressly disapproving the passage of Lord Devlin in McCutcheon v. David MacBrayne Ltd. dealing with actual knowledge: see per Lord Guest at p. 101 and Lord Pearce at p. 113. The correct test to apply when considering whether a term should be incorporated into the oral contract is: what would the officious bystander say having regard to all the circumstances of the parties? The county court judge applied the objective test and rightly concluded that the parties intended that the term should be imported into the oral contract by their previous course of dealing. The plaintiff was not led to believe that no condition for ned part of the oral contract. There was no mistake on his part. The question is really one

of fact and degree. [Reference was made to J. Spurling Ltd. v. Bradshaw[1956] 1 W.L.R. 461; Cockerton v. Knavery Aznar S.A. [1960] 2 Lloyd's Rep. 450.] The trial judge was in the best position to decide whether or not the term should be implied. If the exclusion clause formed part of the contract, it excluded the defendants' liability for negligence.Rutter v. Palmer [1922] 2 K.B. 87 sets out the principles to be applied in deciding the question. Reliance is placed on Lord Greene M.R.'s judgment in Alderslade v. Hendon Laundry Ltd. [1945] K.B. 189, 192, as supporting the contention that the defendants' liability for negligence is excluded. The first question is: are the words capable of excluding liability for negligence? The answer is yes. The words are simple and mean what they say. The clause must be taken within its context and the document must be taken as a whole. It is to some degree a matter of impression. The second question is: whether there is any other liability to which the clause could relate? The answer is clearly and unequivocally no. Thirdly, in what circumstances is negligence excluded? [Reference was made to Coote, Exception Clauses, (1964), pp. 31, 32.] These words exempted liability for negligence. To reach a contrary conclusion would mean overruling a long line of authority.

Johnson in reply. The better test to apply is whether considering all the circumstances it is reasonable to imply the term into the oral contract. The state of knowledge, or its absence, is a factor to be considered: seeOlley v. Marlborough Court Ltd. [1949] 1 K.B. 532, per Denning L.J. at p. 549. Totality of the case is to show that clear words must be used to exclude liability for negligence.

SALMON L.J.The plaintiff bought a secondhand Rambler car early in 1970. I understand that that is a make of car which is manufactured by the American Motor Corporation. The plaintiff had had Rambler cars for some five years. In the middle of March 1970 he telephoned the defendants, Rambler Motors (A.M.C.) Ltd., spoke to the manager and told him that he wanted some repair work done to the car as it had developed an oil leak. The manager said that the defendants could not do anything about it for the moment, but if the plaintiff would have it towed or sent in on a conveyor the defendants would attend to the defects and put them in order. The plaintiff agreed. Those were the only terms of the agreement, expressed over the telephone. There would, however, obviously be an implied term that the defendants would carry out the repairs and look after his car with reasonable skill and care; and there would also be an implied term that the plaintiff would pay a fair and reasonable price for the repairs. The plaintiff had his motor car conveyed to the defendants' garage towards the end of March. While it was at the...

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