Stevenson and Another v Rogers
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE POTTER,SIR PATRICK RUSSELL,LADY JUSTICE BUTLER-SLOSS |
| Judgment Date | 08 December 1998 |
| Judgment citation (vLex) | [1998] EWCA Civ J1208-14 |
| Docket Number | QBENF 97/0668/1 |
| Court | Court of Appeal (Civil Division) |
| Date | 08 December 1998 |
[1998] EWCA Civ J1208-14
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
PLYMOUTH DISTRICT REGISTRY
(HIS HONOUR JUDGE ANTHONY THOMPSON QC SITTING AS A DEPUTY JUDGE OF THE HIGH COURT)
Royal Courts of Justice
Strand
London WC2
Lady Justice Butler-Sloss
Lord Justice Potter
Sir Patrick Russell
QBENF 97/0668/1
MR COLIN WYNTER ESQ.(Instructed by Bond Pearce, Plymouth, P11 3AE) appeared on behalf of the Appellants
MR ALASTAIR NORRIS QC (Instructed by Roger Richards, Paignton, Devon, TQ4 61E) appeared on behalf of the Respondent
This appeal raises an interesting point upon the provisions of s14(2) of the Sale of Goods Act 1979 ("SGA 1979"). It arises from a decision of HH Judge Thompson QC sitting as a deputy high court Judge, in which he held upon a preliminary issue that the sale by the defendant to the plaintiff in April 1988 of the m/v JELLE for £600,000 was not a sale of goods "in the course of a business" for the purposes of s.14(2), and thus did not give rise to an implied term that the JELLE was of merchantable quality. That decision was effective to determine the outcome of the litigation between the parties.
THE FACTS
At the time of sale, the defendant had been a fisherman for some twenty years. He carried on the business of a fisherman, having purchased his first fishing vessel the DOLLY MOPP many years before. He bought the JELLE in 1983, operating the two boats for a time till he sold the DOLLY MOPP in November 1986, continuing his business with the JELLE. In April 1988 he sold the JELLE, intending to have a new boat built to his requirements, but shortly afterwards changed his mind and, by way of replacement, bought the MARILYN JANE on 20th May 1988 which he thereafter used for his fishing business.
THE JUDGMENT
The judge found in favour of the defendant that the sale of the JELLE was not made "in the course of a business". In doing so, rather than construing those words broadly and at face value, he recited and purported to apply the construction applied to similar words in the two leading authorities of Davies -v- Sumner [1984] 1 WLR 1301 per Lord Keith at 1304E-1306B (relating to s.1(1) of the Trade Descriptions Act 1968 ) and R & B Customs Brokers Co Ltd -v- United Dominions Trust Ltd [1988] 1 WLR 321 per Dillon LJ at 330E–331A (relating to s.12(1) of the Unfair Contract Terms Act 1977 ). It is appropriate to quote the passages relied on by the judge at this stage.
In the course of his judgment in Davies -v- Sumner, Lord Keith considered an earlier decision in Havering London Borough Council -v- Stevenson [1970] 1WLR 1375 in which the Divisional Court upheld the conviction of the defendant for an offence under s.1(1)(b) of the Trade Descriptions Act 1968. In the Havering case the defendant carried on a car hire business as opposed to the business of a motor car vendor or dealer. He had a fleet of twenty-four cars and made a regular practice of selling his hire cars when he had had them for about two years or when the condition of a particular vehicle warranted it. He did not buy or sell the cars at a profit but simply for the purposes of replacing his fleet vehicles from time to time. By way of contrast, the facts in Davies -v- Sumner were that the defendant was a courier who used his own car almost exclusively in the course of his occupation. He sold it in order to replace it with another for similar use. He was charged before justices with the offence of applying, "in the course of trade or business", a false trade description in respect of the mileage as shown on the odometer and he was acquitted on the grounds that the sale was not in the course of a trade or business within the meaning of the section. On appeal, the prosecution submitted that it was sufficient that the transaction was reasonably incidental to the carrying on of his business as courier. Lord Keith stated at 1305E–1306B.
"Any disposal of any chattel held for the purposes of a business may, in a certain sense, be said to have been in the course of that business, irrespective of whether the chattel was acquired with a view to resale or for consumption or as a capital asset. But in my opinion section 1(1) of the Act is not intended to cast such a wide net as this. The expression "in the course of a trade or business" in the context of an Act having consumer protection as its primary purpose conveys the concept of some degree of regularity and it is to be observed that the long title to the Act refer to " mis-descriptions of goods, services, accommodation and facilities provided in the course of trade. Lord Parker CJ in the Havering case [1970] 1 WLR 1375 clearly considered that the expression was not used in the broadest sense. The reason why the transaction there in issue was caught was that in his view it was "an integral part of the business carried on as a car hire firm". That would not cover the sporadic selling off of pieces of equipment which were no longer required for the purposes of a business. The vital feature of the Havering case appears to have been, in Lord Parker's view, that the defendant's business as part of its normal practice bought and disposed of cars. The need for some degree of regularity does not, however, involve that a one-off adventure in the nature of trade, carried through with a view to profit, would not fall within section 1(1) because such a transaction would itself constitute a trade.
In the present case it was sought to be inferred that the respondent, covering as he did such a large regular mileage, was likely to have occasion to sell his car at regular intervals, so that he too would have a normal practice of buying and disposing of cars. It is sufficient to say that such a normal practice had not yet been established at the time of the alleged offence. The respondent might well revert to hiring a car, as he had previously done. Further, the respondent's car was a piece of equipment he used for providing his courier service. It was not something he exploited as stock in trade, which is what the defendant was in substance doing with his cars in the Havering case…Where a person carries on the business of hiring out some description of goods to the public and has a practice of selling off those that are no longer in good enough condition, clearly the latter goods are offered or supplied in the course of his business within the meaning of section 1(1). But the occasional sale of some worn out piece of shop equipment would not fall within the enactment."
In the R & B Customs case, there was an issue whether or not the purchase by the plaintiff of a second-hand car was made "in the course of a business" so as to preclude the plaintiff from relying upon the provisions of the Unfair Contract Terms Act 1977 (" UCTA 1977") in relation to sales to consumers. Having quoted from the speech of Lord Keith, Dillon LJ analysed it in the following manner at p.330E—
"Lord Keith held that the requisite degree of regularity had not been established on the facts of Davies -v- Sumner because a normal practice of buying and disposing of cars had not yet been established at the time of the alleged offence. He pointed out for good measure that the disposal of the car was not a disposal of stock in trade of the business, but he clearly was not holding that only a disposal of stock in trade could be a disposal in the course of trade or business.
Lord Keith emphasised the need for some degree of regularity, and he found pointers to this in the primary purpose and long title of the Trade Descriptions Act 1968. I find pointers to a similar need for regularity under the Act of 1977, where matters merely incidental to the carrying on of a business are concerned, both in the words which I would emphasise, "in the course of" in the phrase "in the course of a business" and in the concept, or legislative purpose, which must underlie the dichotomy under the Act of 1977 between those who deal as consumers and those who deal otherwise than as consumers.
This reasoning leads to the conclusion that, in the Act of 1977 also, the words "in the course of business", are not used in what Lord Keith called "the broadest sense". I also find helpful the phrase used by Lord Parker C.J. and quoted by Lord Keith, "an integral part of the business carried on". The reconciliation between that phrase and the need for some degree of regularity is as I see it as follows: there are some transactions which are clearly integral parts of the businesses concerned, and these should be held to have been carried out in the course of those businesses; this would cover, apart from much else, the instance of a one-off adventure in the nature of trade, where the transaction itself would constitute a trade or business. There are other transactions, however, such as the purchase of a car in the present case, which are at highest only incidental to the carrying on of the relevant business; here a degree of regularity is required before it can be said that they are an integral part of the business carried on, and so entered into in the course of that business."
Neill LJ, agreed with the judgment of Dillon LJ. He also referred (at p.334) to three examples of statutes other than the 1977 Act in which the phrase "in the course of a business" or similar phrases are to be found, which examples included SGA 1979 section 14(2) and (3). He stated at p.336 E-F:
" in relation to a seller of goods or supplier of services, I consider that the court should follow the guidance given by Lord Keith in Davies -v- Sumner....
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