Levison v Patent Steam Carpet Cleaning Company Ltd
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,SIR DAVID CAIRNS,LORD JUSTICE ORR |
| Judgment Date | 22 April 1977 |
| Judgment citation (vLex) | [1977] EWCA Civ J0422-1 |
| Docket Number | Plaint No. 7515768 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 April 1977 |
[1977] EWCA Civ J0422-1
The Master of The Rolls
(Lord Denning)
Lord Justice Orr and
Sir David Cairns
In The Supreme Court of Judicature
Court of Appeal
On Appeal from the Shoreditch County Court
(His Honour Judge Willis)
MR. P. TWIGG (Instructed by Messrs. Barlow, Lyde & Gilbert, Solicitors, London) appeared on behalf of the Plaintiffs (Respondents).
MR. M. BELOFF (instructed by Messrs. Pritchard, Englefield & Tobin, Solicitors, London) appeared on behalf of the Defendants (Appellants).
It was a fine Chinese carpet worth £900, but it needed cleaning. Mr. and Mrs. Levison had it in their home. On 5th July, 1972, Mrs. Levison telephoned the cleaners and told the young lady that she had a carpet and curtains for cleaning and asked them to come and collect them. The young lady said, "Yes. The van will call on 17th July". She made a note of the particulars on a printed form, giving the date, name, address and, in additions "Date for collection, 17/7/'72; Date for return, 31/7/'72; Instructions: Collect heavy Chinese carpet for cleaning, and velvet curtains for cleaning".
Then, on 17th July, the young lady in the office gave this printed form to the van-driver, but she wrote on it these further words for him: "Get order". This meant that he was to get the householder to sign the back of the form.
When the van-driver arrived at the house, Mrs. Levison was out, but her husband was in. He stayed in so as to see the carpet off. By that time they wanted a rug washed as well. So Mr. Levinson gave the van-driver both the carpet and the rug. He added these words on the front just beneath the carpet: "1 white rug to be washed".
Mr. Levison also signed that form on the back in the space provided for signature. He did not read the print but it contained many lines of small print containing terms and conditions, of which I will quote a few: Condition 1 gave the cleaners power to sub-contract any of the work or storage. Condition 2 said: "The maximum value of any carpet, rug or tapestry delivered to the Company for any purpose whatsoever shall if the area thereof exceed four square yards be deemed to be £2 per square yard, and if the area does not exceed four square yards shall be deemed to be £10. This carpet was 5 yards by 4 yards, that is 20 square yards:so that, under this condition, the maximum value was deemed to be £40. Condition 5: "All merchandise is expressly accepted at the owner's risk and owners are recommended either to insure such merchandise in such manner as to cover them whilst in the Company's hands or to instruct the Company to insure it as their agents in such sum and in such manner at their cost as they shall specify". Condition 8: "The Company shall only be liable to execute services or to account in any way to the owner if the Order for such services is on the Company's Official Order From and the owner signs the same in accordance with these Conditions'. Condition 9 deals with delay and adds: "… If the Company is liable for any delay its liability shall not exceed the limits imposed by Clause 2(a) hereof".
Finally the Form said: "I/We the Undersigned agree to the terms and conditions set out above and on the face of this document. I.H. Levison (Signature of Owner)".
So Mr. Levison signed the form. The driver took the form, the carpet and the rug. A week or so later the rug was returned washed. But the carpet was not. Mrs. Levison telephoned several times. The first time she was told: "It is not ready yet". The next time she was told: "It is in the corner of the warehouse and we cannot get it out". Then: "We cannot find it and we are looking for it". Finally: "We are sorry but it has been stolen". The one letter was on 12th September, 1972. from the cleaners: "… I understand that we are having difficulty in returning your Chinese carpet after cleaning, and, despite a number of detailed searches, this item cannot be traced at present".
Mr. Levison approached his insurers. They took up the matter with the Cleaners, who replied on 5th October, 1972: "… Underthe terms and conditions of contract, upon which these goods were accepted, our total liability in this event is £2.00 per sq. yd., which limits our liability to £44.00. We are enclosing a copy of the terms and conditions … for your perusal".
Now Mr. and Mrs. Levison sue the cleaners for loss of the carpet, claiming the full sum of £900.
The County Court Judge gave judgment against the cleaners. They appeal to this Court.
Several points were raised. Some of them can be shortly disposed of. It was suggested that the contract was made on the telephone on 5th July, 1972, and was not subject to the conditions on the form. I cannot accept this suggestion. Mrs. Levison had had dealings with the firm before and had signed forms before. It seems to me that the discussions resulted in a contract in writing when the form was signed by Mr. Levison on 17th July, 1972.
The case raises other points of interest in the law of contract INEQUALITY OF BARGAINING POWER. The conditions were on the back of a standard form. The customer was asked to sign them without being given any opportunity of considering them or taking objection to them. It is a classic instance of superior bargaining power, to which Lord Diploek drew attention in Macaulay v. Schroeder (1974) 1 Weekly Law Reports at page 1316: "This standard form of contract is of comparatively modern origin. It is the result of the concentration of particular kinds of business in comparatively few hands. The terms have not been the subject of negotiation between the parties to the contract, or approved by any organisation representing the interests of the weaker party. They have been dictated by that party whose bargaining power, exercised alone or in conjunction with others providing similargoods or services, enables him to say: "If you want these goods or services at all, these are the only terms on which they are obtainable. Take it or leave it". I would only add that in this case - as in many others - the weaker party is not even told "Take it or leave it". He is simply presented with a form to sign, and told: "Sign here"; and so he does. Then later on, when the goods are lost or damaged, the form is produced: and the stronger party says: 'You have no claim. Look at the conditions on the form. You signed it and are bound by those conditions.' The law is settled by L'Estrange v. Graucob (1934) 1 Queen's Bench 394."
In such circumstances as here the Law Commission in 1975 recommended that a term which exempts the stronger party from his ordinary common-law liability should not be given effect except when it is reasonable - see Law Commission Report No. 69, Command 615, pages 62, 174: and there is a bill now before Parliament which gives effect to the test of reasonableness. It is called the Avoidance of Liability Bill. This is a gratifying piece of law reform: but I do not think we need wait for that bill to be passed into law. You never know what may happen to a bill. Meanwhile the common law has its own principles ready to hand. In Gillespie Bros. & Co. v. Bowles (Roy) Transport (1973) 1 Queen's Bench 400. I suggested that an exemption or limitation clause should not be given effect if it was unreasonable, or if it would be unreasonable to apply it in the circumstances of the case. I see no reason why this should not be applied today, at any rate in contracts in standard forms where there is inequality of bargaining power. In this case I would apply it in this way: Take the Limitation Clause 2(a). In some circumstances that clause might be reasonable. But itwould not in the present case be reasonable to allow the cleaning company to rely on it. They knew that they were to collect a heavy Chinese carpet which was worth a lot of money. To limit liability to £40 (without a word of warning) would, I think, be most unreasonable.
So also with Clause 5. It was not reasonable for the cleaning company to stipulate that all the merchandise should be "at the owner's risk" unless they did a great deal more to see that the customer was protected. At the very least they ought to have drawn the clause specifically to the customer's attentions: and made it clear that he ought to ensure against loss or damage to it. But they did nothing at all to protect him, or warn him. I do not think the cleaning company can rely on this clause. They ought to have insured themselves, and not leave it to the customer to do so.
I may be wrong, however, in applying the test of reasonableness. So I would go on to consider the other means which have been used by the courts to get round the injustice of these exemptions and limitation clauses.
STRICT CONSTRUCTION
One means is by construing the clauses "strictly" so as to cut it down to reasonable proportions. But these clauses are not susceptible to that treatment. Take the limitation clause 2(a) limiting the value to £40. Like other limitation clauses, the words are too clear to permit of much manipulation. See what the Judges said about limitation clauses in Alderslade v. Hendon Laundry (1945) King's Bench 189; Harbutts "Plasticine" v. Wayne Tank and Pump Co. (1970) 1 Queen's bench 447 at pages 470, 474; Gillespie Bros. & Co. v. Bowles (Roy) Transport (1973) 1 Queen's Bench at page 417. Take next Clause 5. That saysthat all merchandise is expressly accepted "at the owner's risk". Those words are apt to cover loss or damage which is due to the negligence of the cleaners: see the phrase examined by Lord Justice Bowen in Burton v. English (1883) 12 Queen's Bench Division at the top of page 223; and an opinion expressed on it by Mr. Justice Bighem in Allan v. James (1897) 3...
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