McCutcheon v David Macbrayne Ltd
| Jurisdiction | UK Non-devolved |
| Judge | Lord Reid,Lord Hodson,Lord Guest,Lord Devlin,Lord Pearce |
| Judgment Date | 21 January 1964 |
| Judgment citation (vLex) | [1964] UKHL J0121-3 |
| Court | House of Lords |
| Docket Number | No. 3. |
| Date | 21 January 1964 |
[1964] UKHL J0121-3
Lord Reid
Lord Hodson
Lord Guest
Lord Devlin
Lord Pearce
House of Lords
Upon Report from the Appellate Committee, to whom was referred the Cause McCutcheon against David MacBrayne Limited, that the Committee had heard Counsel as well on Monday the 2d, as on Tuesday the 3d days of December last, upon the Petition and Appeal of Alexander McCutcheon (Assisted Person), residing at Laggan Farm, Bowmore, Islay, praying, That the matter of the Interlocutor set forth in the Schedule thereto, namely, an Interlocutor of the Lords of Session in Scotland, of the Second Division of the 7th of November 1962, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Interlocutor might be reversed, varied or altered, or that the Petitioner might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament might seem meet; as also upon the Case of David MacBrayne Limited, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Interlocutor of the 7th day of November 1962, complained of in the said Appeal, be, and the same is hereby, Recalled, and that the Interlocutor of the Lord Ordinary of the 23d day of March 1962, thereby Recalled, be, and the same is hereby, Restored: And it is further Ordered, That the said Cause be, and the same is hereby, remitted back to the Court of Session in Scotland to proceed as accords: And it is further Ordered, That the Respondents do pay, or cause to be paid, to the said Appellant the Costs of the Action in the Inner House of the Court of Session and also the Costs incurred by him in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That unless the Costs, certified as aforesaid, shall be paid to the party entitled to the same within one calendar month from the date of the certificate thereof, the Court of Session in Scotland, or the Judge acting as Vacation Judge, shall issue such summary process or diligence for the recovery of such Costs as shall be lawful and necessary.
My Lords,
The Appellant is a farm grieve in Islay. While on the mainland in October, 1960, he asked his brother-in-law, Mr. McSporran, a farmer in Islay, to have his car sent by the Respondents to West Loch Tarbert. Mr. McSporran took the car to Port Askaig. He found in the Respondents' office there the purser of their vessel "Lochiel", who quoted the freight for a return journey for the car. He paid the money, obtained a receipt and delivered the car to the Respondents. It was shipped on the "Lochiel" but the vessel never reached West Loch Tarbert. She sank owing to negligent navigation by the Respondents' servants, and the car was a total loss. The Appellant sues for its value, agreed at £480.
The question is, what was the contract between the parties? The contract was an oral one. No document was signed or changed hands until the contract was completed. I agree with the unanimous view of the learned judges of the Court of Session that the terms of the receipt which was made out by the purser and handed to Mr. McSporran after he paid the freight cannot be regarded as terms of the contract. So the case is not one of the familiar ticket cases where the question is whether conditions endorsed on or referred to in a ticket or other document handed to the consignor in making the contract are binding on the consignor. If conditions not mentioned when this contract was made are to be added to or regarded as part of this contract it must be for some reason different from those principles which are now well settled in ticket cases. If this oral contract stands unqualified there can be no doubt that the Respondents are liable for the damage caused by the negligence of their servants.
The Respondents' case is that their elaborate printed conditions form part of this contract. If they do, then admittedly they exclude liability in this case. I think I can fairly summarise the evidence on this matter. The Respondents exhibit copies of these conditions in their office, but neither the Appellant nor his agent Mr. McSporran had read these notices, and I agree that they can play no part in the decision of this case. Their practice was to require consignors to sign risk notes which included these conditions before accepting any goods for carriage, but on this occasion no risk note was signed. The Respondents' clerkess, knowing that Mr. McSporran was bringing the car for shipment, made out a risk note for his signature, but when he arrived she was not there and he dealt with the purser of the "Lochiel", who was in the office. He asked for a return passage for the car. The purser quoted a charge of some £6. He paid that sum and then the purser made out and gave him a receipt which he put in his pocket without looking at it. He then delivered the car. The purser forgot to ask him to sign the risk note.
The Lord Ordinary believed the evidence of Mr. McSporran and the Appellant. Mr. McSporran had consigned goods of various kinds on a number of previous occasions. He said that sometimes he had signed a note, sometimes he had not. On one occasion he had sent his own car. A risk note for that consignment was produced signed by him. He had never read the risk notes signed by him. He says—"I sort of just signed it at the time as a matter of form." He admitted that he knew he was signing in connection with some conditions but he did not know what they were. In particular, he did not know that he was agreeing to send the goods at owner's risk. The Appellant had consigned goods on four previous occasions. On three of them he was acting on behalf of his employer. On the other occasion he had sent his own car. Each time he had signed a risk note. He also admitted that he knew there were conditions but said that he did not know what they were.
The Respondents contend that, by reason of the knowledge thus gained by the Appellant and his agent in these previous transactions, the Appellant is bound by their conditions. But this case differs essentially from the ticket cases. There, the carrier in making the contract hands over a document containing or referring to conditions which he intends to be part of the contract. So if the consignor or passenger, when accepting the document, knows or ought as a reasonable man to know that that is the carrier's intention, he can hardly deny that the conditions are part of the contract, or claim, in the absence of special circumstances, to be in a better position than he would be if he had read the document. But here, in making the contract neither party referred to, or indeed had in mind, any additional terms, and the contract was complete and fully effective without any additional terms. If it could be said that when making the contract Mr. McSporran knew that the Respondents always required a risk note to be signed and knew that the purser was simply forgetting to put it before him for signature, then it might be said that neither he nor his principal could take advantage of the error of the other party of which he was aware. But counsel frankly admitted that he could not put his case as high as that.
The only other ground on which it would seem possible to import these conditions is that based on a course of dealing. If two parties have made a series of similar contracts each containing certain conditions, and then they make another without expressly referring to those conditions it may be that those conditions ought to be implied. If the officious bystander had asked them whether they had intended to leave out the conditions this time, both must, as honest men, have said "of course not". But again the facts here will not support that ground. According to Mr. McSporran, there had been no consistent course of dealing; sometimes he was asked to sign and sometimes not. And, moreover, he did not know what the conditions were. This time he was offered an oral contract without any reference to conditions, and he accepted the offer in good faith.
The Respondents also rely on the Appellant's previous knowledge. I doubt whether it is possible to spell out a course of dealing in his case. In all but one of the previous cases he had been acting on behalf of his employer in sending a different kind of goods and he did not know that the Respondents always sought to insist on excluding liability for their own negligence. So it cannot be said that when he asked his agent to make a contract for him he knew that this or, indeed, any other special term would be included in it. He left his agent a free hand to contract, and I see nothing to prevent him from taking advantage of the contract which his agent in fact made. "The judicial task is not to discover the actual intentions of each party: it is to decide what each was reasonably entitled to conclude from the attitude of the other" (Gloag, Contract p. 7). In this case I do not think that either party was reasonably bound or entitled to conclude from the attitude of the other as known to him that these conditions were intended by the other party to be part of this contract. I would therefore allow the appeal and restore the interlocutor of the Lord Ordinary.
My Lords,
The decision of the Second Division of the Inner House in favour of the Defenders seems to me to involve an extension of the application of the doctrine of "course of dealing" which is not warranted by the facts of this case.
Assuming in favour of the Defenders that the experience of the Pursuer and his brother-in-law, who acted as his agent, would...
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