Karsales (Harrow) Ltd v Wallis
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE BIRKETT,LORD JUSTICE DENNING |
| Judgment Date | 12 June 1956 |
| Judgment citation (vLex) | [1956] EWCA Civ J0612-1 |
| Date | 12 June 1956 |
| Court | Court of Appeal |
[1956] EWCA Civ J0612-1
Lord Justice Denning
Lord Justice Birkett and
Lord Justice Parker
In The Supreme Court of Judicature
Court of Appeal
Mr. JOHN LLOYD-ELEY (instructed by Messrs Sampson & Co.) appeared on behalf of the Appellant (Defendant).
Mr. M. AMWYL-DAVIES (instructed by Messrs. Home, Engall & Freeman, Egham) appeared on behalf of the Respondents (Plaintiffs).
Mr. Wallis, the Defendant in this action, is the owner of the By Pass Garage, Baghot. At the end of 1954 a Mr. Stinton case to his wishing to him a second-hand Buick motor car. Mr. Wallis inspected it and found it an excellent car. He not the money to pay the price, some £600a and he said he would but it through a hire purchase finance company, ifMr. Sitnton could make the necessary arrangements. Mr. Stinotn at first put forward forms for the North Central Wagon Company as the hire purchase finance company. They rejected the application. He next suggested Mutual Finance Limited, and got Mr. Walls to sing their forms. Mr. Walls signed them in blank over a sixpenny stamp, with no details filled in. he did not on that occasion pay any sum cash down to Mr. Stinson; nor did he this matter. Mr. Stinton took the form away and kept the car in his possession. The forms were in due course submitted to mutual Finance Limited, but he did not it himself: he did it through an intermediary called Karsales (Harrow) Limited. Mutual Finance Limited accepted the application and the transaction was concluded in this ways Karsalea Limited bought the car from Mr. Stinton and re-sold it to Mutual Finance Limited; then Mutual Finance Limited let it out on hire-purchase terms to Mr. Wallis on the terms of the form which Mr. Wallis had signed. No one in the offices of the finance company ever inspected the car, but someone must have filled in the details on the for, giving the registration number of the car, the total price, the initial payment, and the installments. They dated it the 10th February, 1955, and sent a copy to Mr. Wallis. He accepted the form without objection, and has in the pleadings in this action admitted that it is an agreement between Mutual Finance Limited end himself. But when Mr. Wallis received the agreement the car had still not been delivered. It was apparently still in Mr. Stinton's possession. Mr. Wallis had not seen it since his first inspection. So he got into touch with Mr. Stinton and asked for delivery, Mr. Stinton said he would not deliver it because he had not been paid - meaning presumably that he had not been paid by the finance company the sum due for the car. He told Mr. Wallis that he would make enquiries. It would appear that he was paid soon afterwards because what happens was this: About a week later the vehicle was left, late at night outsideMr. Wallis's garage. It was examined by Mr. Wallis next morning. It was the same Buick car as he had previously inspected in this sense, that it had the same body and engine and registration number, but it had been badly damaged. It had evidently been towed in: there was a rope attached to the front bumper. It was, as the Judge found, "in a deplorable sate". The tyres has been changed, the new tyres has been taken off and old ones put on; the radio - the wireless set - had been removed from it; the chrome strips round the body were missing: and when Mr. Wallis got a fitter to took at the engine, the cylinder head has off, all the values were burnt, and there were two broken pistons. The car would not go. Mr. Wallis said to Mr. Stinton "I will not accept the car in this condition"; the car was towed away to Mr. Stinton's place and was never put right. It would cost £150 to put it into the condition in which Mr. Wallis had first seen it.
Mutual Finance Limited, after several months, assigned all their rights under the hire purchase agreement to Karsales (Harrow) Limited, the intermediary to which I have refered, and Karsales (Harrow) Limited now sue Mr. Wallis for ten months' installments of payment under the hire purchase agreement. The Judge has found that they are entitled to those payments as having b due under the agreement, and the question is whether that decision is right In point of law or not.
On this matter, Mr. Lloyd-Eley, on behalf of Mr. Wallis, says that he agreed to take on hire purchase terms a Buick motor car which he had seen a week or two before he had signed these documents. He says that it was the duty of the finance company to see that there was delivered to Mr. Wallis a motor car which corresponded to the car he had seen. He says that, owing to its condition on delivery, there was a fundamental breach by the finance company and that they cannot recover the installments. In answer Mr. Anwyl-Davies, on behalf of the finance company, says that there was delivered to Mr. Wallis a Buick motor car of the registration number specified in the agreement and they are in onway responsible for the condition on delivery. They rely on clause 3 (g) of the hire purchase agreements: "No condition or warranty that the vehicle is roadworthy or as to its age, condition or fitness for any purpose is given by the owner or implied herein". The judge held that that clause in this document meant that the hire purchase company were not responsible in any way for the condition of this car when it was delivered, and that although it was in this deplorable condition they could still recover the instalments due under the agreement; and that, even though the car was rejected by Mr. Wallis, they could still recover of them.
In my opinion under a hire purchase agreement of this kind, when the hirer has himself previously seen and examined the motor car and made application for hire-purchase on the basis of his inspection of it, there is an obligation on the lender to deliver the car in substantially the same condition as when it was seen. It makes no difference that the lender is a finance company which has bought the car in the interval without seeing it. The lender must know, from the ordinary course of business, that the hirer applies on the faith of his inspection and on the understanding that the car will be delivered in substantially the same conditions and it is an implied terra of the agreement that pending delivery the car will be kept in suitable order and repair for the purposes of the bailment. This is supported by Story on Bailment, Articles 383 to 385, and ( Robertson v. Amaon Tug & Lighterage Company 7 Queen'sBench Division, page 598).
The Plaintiffs say that there can be no such implication in this case in view of the express terms of clause 3 (g): but the law about exempting clauses has been much developed in recent years, at any rats about printed exempting clauses, which so often pass unread. notwithstanding earlier cases which might suggest the contrary, it is now settled that exempting clauses of this kind, no matter how widely they are expressed, only avail the party when he is carrying out his contract in its essential respects. He is not allowed to use then as a cover for misconductor indifference or to enable him to turn a blind eye to his obligations. They do not avail him when he is guilty of a brench which goes to the root of the construct. The thing to do is to look at the contract apart from the exempting clauses and see what are the terms, express or implied, which imposs an obligation on the party. If he has been guilty of a breach of those obligations in a respect which impose an obligation on the party. If he ahs been guilty of a breach of those obligations in a respect which goes to the very root of the contract, he cannot rely on the exempting clauses. I could refer in this regard to what was said by Mr. Justice Roche in the copra cake case (Pinnock Brothers v. Levis & Poat. 1923, 1 King's Bench, page 690, at page 695) and the Judgments of Mr. Justice Devlin in ( Alexander v. Railway Executive 1951 2 King's Bench, page 682) and ( Smeaton Hanecomb & Company v. Sassoon I. Setty son & Company 1953 2 All EnglandReports, page 1468), and the recent case in this Court of ( J. Spurling Limited v. Bradshaw 1956 1 Weekly Law Reports, page 461), and the cases there mentioned. The principle is sometimes said to be that the party cannot rely on an exempting clause when he delivers something "different in kind" from that contracted for, or has broken a "fundamental term" or a "fundamental contractual obligation", but these are, I think, all comprehended by the general principle that a breach which goes to the root of the contract disentitles the party from relying on the exempting clause. In the present case the lender was in breach of the implied obligation that I have mentioned. When Mr. Wallis inspected the car prior to signing the application form, the car was in excellent condition and would go: whereas the car...
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