Online Catering Ltd v Acton and another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Ward,Lady Justice Smith,Lord Justice Rimer |
| Judgment Date | 10 February 2010 |
| Neutral Citation | [2010] EWCA Civ 58 |
| Court | Court of Appeal (Civil Division) |
| Date | 10 February 2010 |
| Docket Number | Case No: B2/2008/2836 |
[2010] EWCA Civ 58
IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CENTRAL LONDON COUNTY COURT
Mr Recoder De La Piquerie
Before: Lord Justice Ward
Lady Justice Smith
and
Lord Justice Rimer
Case No: B2/2008/2836
8CL02643
Mr Ali Reza Sinai (instructed by Harper & Odell) for the appellant
Mr Neil Mendoza (instructed by Barlow Lyde & Gilbert) for the respondents
Hearing date: 7th October 2009
Lord Justice Ward:
The issues which have grown exponentially from this simple claim for damages for wrongful interference with goods is not the stuff that happens in an ordinary day in the county court. The Recorder, Mr Paul de la Piquerie, sitting at the Central London County Court on 4th November 2008, dismissed the claim but gave the claimant permission to appeal “on the sole issue whether the contract by the Defendant to repair the Claimant's vehicles entered into between the parties was a bill of sale and unenforceable for non-registration as such”.
The claim was straightforward enough. The claimant, Online Catering Limited, which is a catering company which operates a fleet of vehicles for the delivery of its food and drink, claimed that it was the owner of and entitled to possession of a Ford Transit van allegedly worth £22,000 and a Renault Master van said to be worth £15,000. Metropolitan Fleet Services is the trading name of Drakeglen Ltd which carries on business repairing and servicing motor vehicles. Mr Frank Acton is its managing director. Both Mr Acton and his company were joined as defendants. Metropolitan Fleet Services entered into an agreement with Online Catering Ltd to service and repair its vehicles and did so from time to time. At about 10.00 in the evening of 4th April 2008 Mr Acton and others entered the claimant's premises and deliberately and falsely represented to the claimant's employees that the two vehicles were being taken away for the purpose of carrying out repairs to them. They took possession of the vans and refused to return them. This claim was then brought for their return or payment of £37,000, their value, for consequential damages being the cost of hiring replacements at £900 a week, and also for exemplary damages. The defendants, who acted in person throughout the proceedings in the County Court, put in a “home made” Defence which alleged that the claimants were in default of the terms and conditions of the contract as some £11,772.62 had been outstanding since August 2007 for work done and that consequently they were entitled to seize the vehicles pursuant to clause 28 of the terms of business. There was no formal reply from the claimant but in his witness statement Mr Habib Namini, the claimant's managing director, denied that the claimant was in default; denied that the contract was subject to the second defendant's terms of business which had not been provided to the claimant when the agreement was made and finally submitted that the provision permitting the seizure of the vehicles was “manifestly unfair because it attempts to give the second defendant an unfettered right to seize another party's assets without the parties first having recourse to an independent third party or a Court of Law to establish that there has in fact been a default of agreement”. The claimant's case was expanded in the skeleton argument submitted by Mr Ali Reza Sinai at the trial to assert that the seizure contravened section 7 of the Law of Distress Amendment Act 1888 and the Distress for Rent Rules 1988.
The Recorder was distinctly unimpressed with the evidence led by the claimant. He found that “Mr Namini gave evidence which in some respects was clearly untrue”. He had denied that any money was owing yet eventually counsel made the formal concession that “without prejudice to the existence of default in the 'Terms of Business' and in particular clause 6 thereof, the claimant concedes that unpaid sums were due for the purposes of clause 28(b) provided the clause was incorporated into the agreement between the Claimant and the Defendants”. By contrast, the first defendant, Mr Acton, and his wife, “gave their evidence well”. They did not deny “that they had removed the vehicles as a result of a misrepresentation that they required to be repaired, when they did not”. Nor did they deny “that the object of the removal of the vehicles was to put pressure on the Claimant to pay the outstanding bills”. The Recorder's conclusion was that having listened to and heard all the evidence, he accepted the evidence of the defendant where it differed from the claimant.
As for the terms of the contract, he found that when the initial account was opened the Terms of Business of Mr Acton's company were handed to a Mr Pirooze, the claimant's transport manager, who was dealing with the matter on the claimant's behalf. Mr Pirooze was not called and no reason was given for his absence. There was no direct evidence to contradict that which was given by the defendants. The Recorder found that “the terms of business were therefore brought to the attention of the claimant at the outset, were agreed to by the claimant and formed part of the contract”.
The terms of business included these provisions:
“6. Payment for all repairs and all spare parts supplied is due on completion of work …
7. The company shall have a general lien on a vehicle and all its contents for all monies owing to the company by the customer on any account whatsoever. …
8. If the customer's indebtedness to the company is not satisfied within 3 months from the first account rendered to the customer, the company may without notice sell the vehicle and/or the contents thereof by public auction or private treaty. The net proceeds of sale shall be applied towards satisfying monies due from the customer to the company, and any balance shall be paid by the company to the customer on demand.
…
27. Default [which I venture to think might be better expressed as “you will be in default”] If you breach this agreement in any way; …
28. Our rights on your default
If, any of the events in clause 27 or any default of any part of this agreement occurs
(a) we may terminate this agreement …
(b) you permit us and we may obtain goods at any time of the value of unpaid sums that is due. You are however responsible for the insurance of the seized goods and you must inform your insurers that we have your goods.”
The Recorder accepted that money was owing for repairs. The defendants had written on 26th September 2007 requesting payment of “the overdue invoices”. On 26th March 2008 there was a reminder in respect of the “outstanding amount of £11,772.62” in which Mr Acton wrote:
“I am surprised to have received no reply to our previous letters asking for immediate settlement of the attached statement which is long overdue. May I remind you are in breach of our terms and conditions. Unfortunately I cannot allow this account to remain unpaid any longer and I regret that we will exercise our rights to recover the amounts outstanding within seven days. I am still hopeful that you will render this action unnecessary by sending your remittance in full to arrive here within 7 days.”
As the Recorder said: “Needless to say no money was paid.” After the vehicles had been removed the defendants wrote to say they would gladly release the vehicles on receipt of payment “by banker's draft only”. Thus the Recorder found as facts that
“repair works were carried out to various vehicles which the claimant owned or leased, that various sums of money had been outstanding for a not inconsiderable period of time, that despite the fact that the claimant maintained in the witness box under oath that he owed no money and that all monies which were due and payable had been paid, that is not the case.”
The issue, as the Recorder correctly identified it, was whether the seizure of the vehicles was wrongful. He held that clause 8 gave the defendants no more right than their common law lien but he found:
“There was however a default within the meaning of clause 27 of the terms of the business and therefore contractually by clause 28(b) there was the following right “You permit us and we may obtain goods at any time of the value of the unpaid sums that is due”.”
He rejected the defendant's defences as argued. He found as a fact that the terms of business were incorporated. He held that all submissions based on the law relating to Distress for Rent had no bearing in this case because there was no relationship of landlord and tenant and no rent was due and owing. Indeed he believed the point had been abandoned. Although that might be thought to be the end of the case, the Recorder then introduced a new point of his own making. He said:
“During the course however of the authorities referred to by counsel it emerged that one of the matters I wished to be addressed upon is the question as to whether the powers contained under the terms of business fell within the Bills of Sale Act 1887 (sic) as amended and if so whether and to what extent it affected the right to seize as was done in this case.”
He held that the contract was technically a bill of sale because clause 28 was a licence to take possession of personal chattels as security for any debt and that consequently the agreement, as a bill of sale, should have been registered pursuant to section 8 of the Act but was not. Section 8 provides that if the bill is not registered,
“such bill of sale, as...
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