Suzanne Thew v Mrs M Cole (Defendant/Applicant)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Tuckey,Lord Justice Jonathan Parker |
| Judgment Date | 16 December 2003 |
| Neutral Citation | [2003] EWCA Civ 1828,[2003] EWCA Civ 1589 |
| Date | 16 December 2003 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: B2/2001/1455 — THEW/COLE |
[2003] EWCA Civ 1828
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CARDIFF COUNTY COURT
HIS HONOUR JUDGE MASTERMAN (THEW v COLE) and LIVERPOOL COUNTY COURT
HIS HONOUR JUDGE MARSHALL-EVANS Q.C.(KING v DALTRAY
Lord Justice Tuckey
Lord Justice Jonathan Parker and
Mr Justice Evans-lombe
Case No: B2/2001/1455 — THEW/COLE
B2/2002/2074 — KING/DALTRAY
Jonathan HOUGH (instructed by Hugh James) for COLE Jeremy STUART-SMITH Q.C. and Jonathan HOUGH (instructed by Weightman Vizards) for KING Julia SMITH (instructed by Boote Edgar Esterkin) for THEW Benjamin WILLIAMS (instructed by Gray Purdue) for DALTRAY
Introduction
These two appeals arise from the long running dispute between companies who provide hire cars on credit to the innocent victims of motor accidents and the motor insurance market. It is not necessary to set out the history of this dispute which is now well known. It is summarised at the beginning of this court's judgment in Burdis v Livsey [2002] EWCA Civ. 210; [2003] QB 36. The present appeals raise points on the agreements of two credit hire companies: Alpha Accident Management Limited which is now in administration and Western Accident Management Limited which has ceased trading. In each case the first issue is whether the agreement is exempt from regulation under the Consumer Credit Act 1974 because the hire charges were required "to be paid within a period not exceeding twelve months beginning with the date of the agreement". In the Liverpool County Court in King v Daltray His Honour Judge Marshall-Evans Q.C. and in the Cardiff County Court in Thew v Cole His Honour Judge Masterman held that the agreements were exempt. The appellants say they were wrong. In King v Daltray, if the judge's decision is wrong and the agreement is regulated, there are further issues as to whether it contained the prescribed terms and if so whether it should be enforced and a point on quantum; in Thew v Cole there is an issue as to whether the hire charges were recoverable in any event.
The threshold issue in each appeal therefore is whether the agreements are exempt and I propose to deal with this first.
The facts
King v Daltray
Mr King's Volvo was damaged on 18 th August 1999 whilst it was parked outside his house in Waltham Abbey by Mr Daltray's admitted negligence. Mr King needed a replacement vehicle whilst his own was being repaired to transport his disabled wife. On 13 th September 1999 through the agency of his repairers Mr King entered into a rental agreement with Alpha for the hire of a similar Volvo to his own. The agreement was headed:
"This is an agreement exempt from regulation under the Consumer Credit Act 1974".
For present purposes it is only necessary to refer to the following terms.
5. Where the hire is consequent to the Hirer's own vehicle being damaged as a result of a road traffic accident
i. The Lessor will allow the Hirer to defer payment of the hire charges until such time as a claim for damages has been concluded (irrespective of outcome) against the party alleged to be at fault (the Third Party) or for a period of not more than 12 months from the start of the agreement whichever period is shorter….
iv. Notwithstanding the deferred payment facility referred to in clause 5 (i) above, the Hirer will discharge any indebtedness as soon as reasonably practicable, and shall take such action as is necessary to obtain any judgment or interim payment in order to ensure that payment is made within the maximum period allowed under this agreement.
The maximum period of hire was stated to be three months. In the event Mr King hired the car for ten days. His claim was for £886.54, the total amount due to Alpha under the rental agreement.
Thew v Cole
Mrs Thew's car was damaged beyond economic repair on 7 th November 1998 in a collision in a car park in Blaenavon for which Mrs Cole was admittedly liable. Mrs Thew needed to hire a replacement car and entered into two agreements with Western: a hire agreement and a credit agreement. Nothing turns on the terms of the hire agreement. The credit agreement started by saying:
This agreement is not regulated by the Consumer Credit Act 1974, being an exempt agreement.
Clause 1 stated that its purpose was to finance sums payable to Western under the hire agreement. The relevant terms for present purposes are:
2. If at the termination of the Hire an amount representing the rental due … is not paid… Western will give you credit for that amount ("the Credit Facility") for a period not exceeding 12 months from the date of this agreement (including the date of this agreement). ….
5. The total amount of the Credit Facility and all interest is payable to Western in a single payment on the date of payment to you or any person on your behalf of a sum which satisfies any judgment or compromise in respect of the Claim or on termination …. or, if neither of these have occurred 12 months from the date of this agreement.
The date of the agreement is 21 st November 1998. Mrs Thew's claim included £2,684.22, the full amount due under the hire agreement.
The Legislation
The 1974 Act applies to credit agreements entered into by private individuals and unincorporated bodies within certain financial limits. Such a consumer credit agreement is a regulated credit agreement if it is not an exempt agreement. Article 3 of the Consumer Credit (Exempt Agreements) Order 1989 says:
(1) The Act shall not regulate a consumer credit agreement which is an agreement of one of the following descriptions, that is to say –
(a) a debtor-creditor-supplier agreement being either -
(i) an agreement for fixed-sum credit under which the total number of payments to be made by the debtor does not exceed four, and those payments are required to be made within a period not exceeding twelve months beginning with the date of the agreement….
It is common ground that the agreements the subject to these appeals are debtor-creditor-supplier agreements for fixed-sum credit.
The judgments below
Judge Marshall-Evans Q. C. heard King v Daltray as one of six selected test cases. Five of these cases related to the Hamco Group of companies who have since settled with the motor insurers. A variety of issues arose in those cases which the judge had to resolve, but are no longer relevant. He dealt quite shortly with the exemption argument in this case. Having referred to the decisions of this court in Zoan v Rouamba [2000] 1 WLR 1509 and Ketley v Gilbert [2001] 1 WLR 986 to which I shall come shortly he said:
… hire payment is to be deferred "for a period of not more than twelve months from the start of the agreement" which to my mind means to be paid within that twelve month period which starts when the agreement is made.
This conclusion made it unnecessary for the judge to consider the position if the agreement was regulated, but he decided that it would have been enforceable even if it was regulated.
Judge Masterman's decision in Thew v Cole was made on appeal from a District Judge who had decided that the Western agreement was regulated. Judge Masterman however said:
In my judgment the credit agreement achieves its stated purpose and …. Clause 5 is to be read as referring to the same period of time as in clause 2 and therefore it achieves exemption….
This court's decisions
In Zoan the contract provided that the hire charges could remain outstanding "until a date on or before twelve months after the date of this agreement". Such charges were to become immediately due and payable upon, at the latest, "the first anniversary of this agreement". This court held that the twelve months did not include the date of the agreement and so the agreement was regulated. This is hardly surprising given that payment could be made on the anniversary of the agreement. In giving the judgment of the court Chadwick L.J. said at para. 23:
Where, under some legislative provision, an act is required to be done within a fixed period of time "beginning with" or "from" a specified day it is a question of construction whether this specified day itself is to be included in, or excluded from, that period. Where the period within which the act is to be done is expressed to be a number of days, months or years from or after a specified day, the courts have held, consistently since Young v Higgon (1840) 6 M & W.49, that the specified day is excluded from the period; that is to say, that the period commences on the day after the specified day.
To qualify for exemption however the payment had to be made within twelve months including the day of the agreement. Thus at para. 24 Chadwick L.J. said:
Where, however, the period in which the act is to be done is expressed to be a period beginning with a specified day, then it has been held with equal consistency over the past forty years or thereabouts, that the legislature (or the relevant rule-making body, as the case may be) has shown a clear intention that the specified day must be included in the period.
Such a construction of paragraph 3 (1) is not in issue on these appeals.
In Ketley the contract provided for payment of the hire charges when the third party claim was satisfied "or on the expiry of twelve months starting with the date of this agreement" whichever was earlier. The Circuit Judge held that "the words 'on the expiry of twelve months' meant in plain English after twelve months have been exceeded" so the agreement was not exempt. This court upheld his decision. Brooke L.J. gave the first judgment. He...
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