Lowe v Lombank Ltd
| Jurisdiction | England & Wales |
| Judge | MR. JUSTICE DIPLOCK,LORD GODDARD |
| Judgment Date | 09 February 1960 |
| Judgment citation (vLex) | [1960] EWCA Civ J0209-3 |
| Court | Court of Appeal |
| Date | 09 February 1960 |
[1960] EWCA Civ J0209-3
Lord Goddard
Lord Justice Upjohn
Mr. Justice Diplock
In The Supreme Court of Judicature
Court of Appeal
MR. G.H.C. BINGHAM, Q.C., and MR. J. JAFFE, instructed by Messrs. Mawby, Barrie & Letts, agents for John P. Bonney & Adler (Southport), appeared for the Appellant. (Plaintiff).
THE HON. T.G. ROCHE, Q.C., and MR. D. MORRIS, instructed by Messrs. Victor Mischcon & Co., appeared for the Respondents. (Defendants).
Mr. Justice Diplock will deliver the judgment of the court.
This is an appeal by the plaintiff from a judgment of Judge Harold Brown in the Southport County Court dismissing her claim against the respondents, a hire purchase finance company, for damages for breach of the statutory condition, enacted in section 8, subsection (2), of the Hire Purchase Act 1938, that a car which she acquired on hire purchase from the respondents was reasonably fit for the purpose for which it was required.
The appellant, who was a widow aged 65, was minded to buy a second-hand car to replace an ancient vehicle which she then owned. She got in touch through her son with a motor-dealer, Charles Brown, who owned a 1947 Standard car. On 8th June, 1958, Charles Brown's brother, who was acting on his behalf, offered the Standard car to her at the price of £200 and told her that he could get hire purchase and would allow 45 for the car she then owned. He assured her that the Standard car was in perfect or almost perfect condition and on this assurance she agreed to proceed with the transaction. The name of the hire purchase finance company with whom the hire purchase was to be arranged was not at this stage mentioned. She gave George Brown, at his suggestion, £10 to clinch the bargain.
On the following day, 9th June, George Brown came when the appellant was busy preparing lunch. She did not see the car, but was presented by George Brown with a printed form of hire purchase agreement issued by the respondents, which, no doubt like many other hirers, she signed without reading. It will be necessary for this court to read it with some care later. She paid him £40,which together with the £10 already paid and the allowance of £45 on her old car, made up the initial payment of £95 referred to in the hire purchase agreement, and undertook to pay the balance of £158 by 24 monthly instalments. On the same evening the Standard car was brought round by George and Charles Brown to the appellant's house, when she saw it for the first time. They did not leave it with her, but took it away on the excuse that some minor adjustment was required. It was handed over to her at some later date which the County Court Judge was not able to fix with certainty and the appellant then signed a document headed "Delivery Receipt", which was presented to her for signature by one of the Browns. This document, which bears the date, 9th June, 1958, although it was signed at a later date, will also require careful scrutiny.
The learned judge accepted the evidence of a motor engineer called by the appellant that so far from being "perfect" or "almost perfect" the car was utterly unroadworthy and indeed a danger to its occupiers and other road users at the time of this transaction. The principal defects were in the engine, steering and brakes. There was evidence that these were defects, which would not be apparent to a layman upon inspection and, although there is no specific finding to this effect, it would appear from the fact that the learned County Court Judge acquitted George Brown of fraud that he accepted this.
These defects became progressively apparent after the car had been delivered, but it was not until 6th November, 1958, that the appellant through her solicitors complained to the respondents, to be met with the reply that the respondents were "acting purely as bankers" and "have at no time either expressed or implied any warranty in respect of the vehicle concerned in our contract". They concluded with a demand for continued payment of current instalments.
On 5th January, 1959, the appellant started proceedings against the respondents claiming damages for fraud, based on the misrepresentations of George Brown or alternatively for breach of the implied condition of fitness under section 8, sub-section (2), of the Hire Purchase Act . She claimed in the alternative rescission of the Hire Purchase Agreement of 9th June, 1958, but this claim, in view of the delay, was not pressed at the trial. The County Court Judge was not prepared to find that George Brown was fraudulent. He described him as a "careless optimist", and we have not been asked to reverse this finding. The only questions on this appeal are (l) whether the hire purchase agreement was subject to the implied condition that the car should be reasonably fit for the purpose for which it was required, that is for use as a means of transport and (2) if so, whether the appellant is estopped from relying upon the defects which in fact existed in the car as constituting a breach of that implied condition.
The County Court Judge answered the first question in the affirmative, and the second also in the affirmative; and accordingly gave judgment for the respondents, but in case he were wrong assessed the damages at £160.
The common law, as Mr. Roche points out, subject to some restrictions based on public policy, permits persons to make whatever contractual bargains they please and will enforce those bargains. This general principle, of which the underlying assumptions are that persons entering into contracts are of equal bargaining power and read and understand what they sign, ignores the fact that under modern conditions many transactions, particularly of hire purchase, are entered into "by ignorant persons whose only choice is either not to enter into the transaction at all or to enter into it upon the terms of a standard agreement drafted by the Hire Purchase Company containing numerous clauses printed in miniscule characters which the hirers do not in fact read and if they did would be incapable of understanding. To meet this abuse of bargaining power by hire purchase finance companies Parliament in 1938 enacted the Hire Purchase Act, 1938, containing a number of provisions for the protection of the small hire-purchaser, that is, the hire-purchaser of goods whose hire-purchase price did not exceed £100. In 1954, with the fall in the value of money this protection was extended to goods whose hire-purchase price did not exceed £300. It applies, therefore, to the hire purchase agreement under consideration in the present appeal.
Section 8, sub-section (2), of the Act of 1938 reads as follows: "Where the hirer expressly or by implication makes known the particular purpose for which the goods are required, there shall be an implied condition that the goods shall be reasonably fit for such purpose".
Sub-section (3), so far as is relevant, reads: "….the owner shall not be entitled to rely on any provision in the agreement excluding or modifying the condition set out in sub-section (2) of this section unless he proves that before the agreement was made the provision was brought to the notice of the hirer and its effect made clear to him",.
The learned judge has found as a fact-indeed it was undisputed on the evidence - that no provision in the hire purchase agreement excluding or modifying the implied condition was brought to the notice of the appellant. Prima facie, therefore, if the hirer did expressly or by implication make known that she required the standard car for use as a means of transport, the statutory condition applies and upon the facts as found by the County Court Judge was manifestly breached.
Mr. Roche's first contention, which does not appear to have been advanced before the County Court Judge, so that no cross-examination was directed to it, is that the appellant did not make known either expressly or by implication to the respondents that she required the Standard car for use as a means of transport. She made it known expressly to Brown, the deader, but the County Court Judge held, in our view rightly, that, in view of an express clause in the Hire Purchase Agreement, Brown was not the agent of the respondents for the purpose of receiving this information.
It is at first sight a bold contention that, when a widow, for she is so described in the hire purchase agreement,...
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