Thompson v T. Lohan (Plant Hire) Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE FOX,LORD JUSTICE DILLON,LORD JUSTICE WOOLF |
| Judgment Date | 03 February 1987 |
| Judgment citation (vLex) | [1987] EWCA Civ J0203-5 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 87/0078 |
| Date | 03 February 1987 |
[1987] EWCA Civ J0203-5
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
OH APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(MR JUSTICE HODGSON)
Royal Courts of Justice,
Lord Justice Fox
Lord Justice Dillon
Lord Justice Woolf
87/0078
1983 T. No. 2335
MR JOHN SAMUELS, Q.C. and MR R. PERCIVAL (instructed by Messrs. Hewitt oollacott & Chown, Agents for Morton Slack & Co., Solicitors, Sheffield) appeared on behalf of the Appellants.
MR IGOR JUDGE, Q.C. and MR S. MASKREY (instructed by Messrs. Burton & Co., Solicitors, Lincoln) appeared on behalf of the Respondents.
This is an appeal by the second defendants, who are also the Third Party, from a decision of Hodgson J.
The plaintiff's husband was killed on 18th September 1982. The Judge held that his death was due to the negligence of a Mr Hill, who was driving an excavator. Both the plaintiff's husband and Mr Hill were working as drivers in a quarry which was owned, or worked, by the second defendant—to which I shall refer as the Third Party. Both the plaintiff's husband and Mr Hill at that time were employed T. Lohan (Plant Hire) Limited, the first defendants. The plaintiff, as personal representative, sued both defendants for damages.
The Judge said in his judgment that, at the trial, nobody contended otherwise than that it was Lohan, as employers, who would be vicariously liable to the plaintiff for Mr Hill's negligence—if indeed there was negligence.
I understood Mr Samuels, for the appellants, to question that, but it is not in the event necessary for me to consider it further. The plaintiff in fact obtained judgment and an award of costs against Lohan.
The allegation against the Third Party is to be found in paragraph 5 of the Statement of Claim:
"At the trial of this matter the Plaintiff will, if necessary, contend that by reason of the contract set out in the letter of the 8th September 1982 from the First Defendants to the Second Defendants, the deceased and Mr Hill were at all material times in the employment of the Second Defendants, and acting in the course of that employment".
In Third Party proceedings, Lohan claimed to be indemnified by the Third Party against Lohan's liability to the plaintiff, as found by the Judge, and that indemnity is based upon alleged contractual provisions in circumstances to which I will refer in due course.
Lohan carried on the business of hiring out plant and machinery, with drivers if required. The Third Party quarried stone from time to time at Bigby Quarry, South Humberside. They were quarrying there in September 1982. Their own machinery was fully engaged, so they had to hire machinery and drivers from Lohan. They hired from Lohan an excavator; Mr Hill was the driver. They also hired another excavator later.
The existence of a contract is not in dispute; however the question as to its precise terms I will come to later. The initial agreement was made between Mr Danby, on behalf of Lohan, and Mr Pinder on behalf of the Third Party.
For many years Lohan had been a member of an organisation called the Contractors' Plant Association. This Association had model terms of contract, which were used by its members, and the terms were generally referred to in the industry as the C.P.A. terms or conditions. Those terms were well known in the industry.
However, by September 1983 the Association had changed its name to Construction Plant Hire Association, and acquired a new constitution—but that is not a matter of consequence in the case. Nor is the fact that in September 1982 Lohan had accidentally allowed its membership to lapse.
The model terms and conditions of the C.P.A. had a form attached which was to he filled in, and signed, by the hirer. It seems however, that in practice Mr Danby found hirers mostly did not do so—they did not bother—so he devised a form of letter of his own which contained the following:
"All plant hired out under the terms and conditions of the Contractors Plant Hire Association Conditions of Hire a copy of which will be forwarded on request".
As to the position of the two individuals principally concerned, Mr Pinder was the Quarry Manager of the Third Party, and Mr Danby was a Director of Lohan.
Mr Pinder had previously hired from Lohan and knew that Lohan traded on the C.P.A. model terms—and the Judge so found.
The Third Party had previously only hired from Lohans on two occasions with a driver, although they had hired plant on a number of occasions without the inclusion of a driver.
On 8th September 1982 Mr Pinder required a J. C.B. excavator fitted with a hydraulic hammer, together with a driver. He discovered that Lohan could supply him, and so he telephoned Mr Danby and it was agreed that Lohan would hire the equipment to the Third Party at £12 an hour. No other terms were referred to in the conversation.
The Judge found that Mr Pinder knew the offer by Lohan was on the C.P.A. terms and that that was the practice in the industry for all hirings. He also found that it was well known to Mr Pinder that his company would have to pay for travelling to and from the site—which was something not mentioned in the telephone conversation to which I have referred.
After that telephone conversation, Mr Danby of Lohan wrote to the Third Party in the following terms by a letter dated 8th September 1982 marked for the attention of Mr C. Pinder:
"Dear Sir, We thank you for your verbal order for the hire of the following plant and have pleasure in confirming our rate and conditions of hire.
" Hire Control No. TL/2182
JCB Excavator fitted Hydraulic Hammer—£12. per hour.
Fuel to be supplied by hirer.
Hirer responsible for any tyre damage or punctures howsoever caused.
Travel to and from site at working rate.
Operators O/T and travel time—£3. per hour.
Site: Bigby Quarry, Nr. Brigg, South Humberside.
"All plant hired out under the terms and conditions of the Contractors Plant Association Conditions of Hire a copy of which will be forwarded on request.
"Assuring you of our careful attention to all your future enquiries" and in the copy before us it is signed "T. Lohan". Mr Danby dictated the letter and may or may not have signed it but that does not matter. The letter was obviously sent with the authority of Lohan and was accepted as such.
The Judge found that Mr Pinder read the letter; he told the Judge that he was content to let matters go ahead on that basis. He assumed that it was governed by the current C.P.A. Conditions. However, he did not reply to that letter.
The relevant C.P.A. Conditions are Conditions 8 and 13. Condition 8 is headed "Handling of Plant" and reads:
"When a driver or operator is supplied by the Owner with the plant, the Owner shall supply a person competent in operating the plant and such person shall he under the direction and control of the Hirer. Such drivers or operators shall for all purposes in connection with their employment in the working of the plant be regarded as the servants or agents of the Hirer (but without prejudice to any of the provisions of Clause 13) who alone shall be responsible for all claims arising in connection with the operation of the plant by the said drivers or operators. The Hirer shall not allow any other person to operate such plant without the Owner's previous consent to be confirmed in writing".
Condition 13 is headed "Hirers Responsibility for Loss and Damage" and reads:
"(a) for the avoidance of doubt it is hereby declared and agreed that nothing in this Clause affects the operation of Clauses 5, 8 and 9 of this Agreement.
"(b) During the continuance of the hire period the Hirer shall subject to the provisions referred to in subparagraph (a) make good to the Owner all loss of or damage to the plant from whatever cause the same may arise, fair wear and tear excepted, and except as provided in Clause 9 herein, and shall also fully and completely indemnify the Owner in respect of all claims by any person whatsoever for injury to person or property caused by or in connection with or arising out of the use of the plant and in respect of all costs and charges in connection therewith whether arising under statute or common law. In the event of loss of or damage to the plant, hire charges shall be continued at idle time rates until settlement has been effected."
The Judge held that the Third Party must, under these provisions, indemnify Lohan against the damages and costs recovered by the plaintiff against Lohan. Against that decision the Third Party appeals.
The first question which I deal with is this—although in fact it came later in the appellants' submissions—namely what was the contract? Was it the bare contract to supply plant at a price, or was it so supplied on the C.P.A. Conditions?
I have no doubt that it was the latter. Firstly, Mr Danby's letter of the 8th September made it quite clear that the hiring was to be on the C.P.A. terms—the letter says so.
Secondly, the Third Party raised no objection to that—indeed, it is clear that is what they expected.
Thirdly, it was absolutely common form in the industry.
Fourthly, I should refer to some passages in Mr Pinder's cross-examination. After referring to the letter of 8th September he was asked:
"You would certainly have read it? (A) Oh yes.
(Q) There was nothing inconsistent in that letter with what you understood was going to...
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