Yeoman Credit Ltd v Odgers

JurisdictionEngland & Wales
JudgeLORD JUSTICE HARMAN,LORD JUSTICE DAVIES
Judgment Date17 January 1962
Judgment citation (vLex)[1962] EWCA Civ J0117-2
CourtCourt of Appeal
Date17 January 1962

[1962] EWCA Civ J0117-2

In The Supreme Court of Judicature

Court of Appeal

From Plymouth County Court Judge Shepherd

Before:

Lord Justice Holroyd Pearce

Lord Justice Harman and

Lord Justice Davies

Between:
Yeoman Credit Limited
Plaintiffs
and
Andrew David Odgers
Defendant
and
Vospers Motor House (Plymouth) Limited
Third Party

The Hon. S. CHARLES SILKIN (instructed by Messrs Gibson & Weldon, Agents for Messrs Broadbent & Huddart, Plymouth) appeared on behalf of the Appellant (Third Party).

MR THOMAS A. C. CONINGSBY (instructed by Messrs Gregory, Rowcliffe & Co., Agents for Messrs J. A. Pearce & Major, Plymouth) appeared on behalf of the Respondent (Defendant).

1

LORD JUSTICE PEARCE: This is an appeal by the Third Party against part of a judgment of His Honour Judge Shepherd at the Plymouth County Court. After giving judgment for the Plaintiffs against the Defendant for £595. 17s. 6d. and costs, he gave judgment for the Defendant against the Third Party for £595. 17s. 6d. and for the costs payable by the Defendant tothe Plaintiffs. He also gave the Defendant his costs against the Third Party.

2

The Third Party is a Company dealing in motor cars in Plymouth. In October, 1959, it had a secondhand Jaguar Mark VII for sale, and the Defendant considered taking it on hire-purchase terms. The Third Party warranted that it was in perfect condition, and as a result the Defendant, in reliance on the warranty, entered into a hire-purchase transaction in respect of the car. The Third Party sold it to the Plaintiffs, a finance company, who hired it to the Defendant on a hire-purchase agreement dated 6th October, 1959. The rentals (spread over three years) were £27. 7s. 9d. per month. The cash price was £995, and the hire-purchase price was £1,186. 19s. Od. The Defendant paid £200 as the initial payment.

3

The price of the car was higher than was normal for its age and model in view of its purported condition. Unfortunately, the warranty was broken, and the car was not in perfect condition. Almost on the first day of the hiring the Plaintiff had trouble with the brakes which, in the Judge's words, "were likely to let the driver down at any time". This trouble continued despite the attentions of experts in Jaguar cars, and the car remained unroadworthy. The Defendant took it back to the Third Party's workshop three times for them to repair the brakes, and on a fourth occasion it was sent to a garage where they had a thorough knowledge of Jaguars. This garage made the car roadworthy for the moment, but admitted that it could not say what the condition would be after driving 100 miles. "It is now clear", said the learned Judge, "that neither Vospers nor Pikes could discover the defect in the brakes which gave all the trouble".

4

On the occasions when the Defendant went out in the car he found that the brakes failed. In the result he only drove the car 100 miles in all and never went at a speed above50 miles per hour. On one occasion, when the brakes failed, the car crushed a perambulator, and the Defendant not unnaturally lost all confidence in it. He paid four monthly instalments amounting to £109. 11s. 0d. In view of the defective condition of the car he failed to pay the instalments due in March, April and May, 1960. The hirer had a right to return the car on certain terms under clause 5 of the agreement, but, at the suggestion of the Defendant, the Plaintiffs terminated the hiring by notice dated 16th May and retook possession on the 17th, as they were entitled to do 3 under clauses 4 and 6 on non-payment of instalments. They tried to sell the car locally, but the condition of its braking system was probably well-known and no reasonable offer could be obtained.

5

Four months after taking possession they transported it to London and sold it by auction for the net sum of £280. 15s. 6d. It was said that part of the drop in price was due to a slump in car prices. Nevertheless this was an odd price for a car that was sold to the Defendant in October, 1959, for £995 and had been kept by him in good condition. This fact amongst others made the Defendant very resistant to a claim by the Plaintiffs for a further sum under clause 8 of the hire-purchase agreement.

6

On 11th November, 1960, the Plaintiffs wrote to the Defendant setting out the history of the transaction and concluding: "Our net loss in the matter is therefore £595. 12s. 6d. made up as follows: Unpaid balance of hire-purchase price at date when agreement was terminated, £876. 8s. 0d. Less net proceeds of sale as above, £280. 15s. 6d. - £595. 12s. 6d. This, amount we claim from you pursuant to the provisions of your above mentioned hire-purchase agreement. Kindly let us hear from you with your proposals for payment of the amount due". The claim as framed was not maintainable.

7

As the Defendant refused to pay, this action wasstarted by Writ, And, after Order XIV proceedings, was remitted to the County Court where the Third Party proceedings were added. The Defendant claimed indemnity from the Third Party on the ground that he was entitled to reimbursement of all damage including his liability to the Plaintiffs. The Third Party denied all liability whatsoever.

8

The material words of clause 8, which deals with the sums payable on termination of the hiring, are as follows: "Whether the hiring be terminated by the hirer or the owner the hirer shall remain liable… to pay to the owner… (i) all arrears of hire rent… (iii) if the owner sells the goods within three months of the goods being returned" – then there follow provisions which are irrelevant as the car was not in this case sold within three months – "or if the owner does not sell the goods within three months of the goods being returned, damages (if any) for the hirer's failure to keep the goods in good repair and condition and by way of compensation for the owner's anticipated loss on the transaction and for depreciation of the goods such further sum as may be necessary to make the aggregate of the hirer's payments by way of first payment and monthly rentals equal to one half of the hire-purchase price of the goods".

9

The Plaintiffs put forward in the action a claim to £595. 13s. 6d. made up of three items: (1) Three instalments in arrear, £82. 3s. 3d. (2) Damages by way of compensation for the Plaintiffs' anticipated loss on the transaction, £311. 14s. 0d. (3) An item for depreciation of the vehicle, being the sum necessary to make the aggregate of the Defendant's payments equal to one half of the hire-purchase price. Thus, by a different calculation, they arrived at the sum claimed in their letter of the 11th November, 1960.

10

At the hearing the Defendant's representative attacked the Plaintiffs' claim by a criticism of the inadequate sum obtained on the sale of the car. The Third Party's representative, as he was entitled to do, also cross-examined thePlaintiffs' witnesses. Neither of them took objection to the item of £311 on the ground that, on a true construction of the agreement, such an item was not maintainable, Nor does the Third Party's Notice of Appeal make such a suggestion. The Judge, having decided that the objections that had been put forward to the claim were not valid, gave the Plaintiffs judgment for the amount claimed. He then said: "As for the Defendant's claim against the Third Party the damages must be those flowing from the breach and I am of the view that they must be the damage which Mr Odgers, acting as a reasonable man, suffered. Mr Huddart has argued that the amount of the damages should be limited to the cost of providing a new braking system even though there has been no evidence before me as to what that cost would be. I do not accept that argument because that is not the damage which Mr Odgerc. suffered. I accept Mr Odgers, evidence that he refused to pay any more instalments to the Finance Company because he wanted this matter brought to Court and to get rid of this car which was almost valueless to him. I think he was justified in taking this attitude and whilst the fact that he lost all confidence in the car is not important in considering the legal consequences, it supports his evidence as to the car's continuing defective condition. I am satisfied that the damages are more than the cost of renewing the braking system and that they must include the sum which he must pay to the Finance Company. Mr Odgers would not have entered into the hire-purchase agreement but for this warranty which was broken by Vospers and would not have incurred his present liability to the Finance Company. Mr Huddart has not sought to argue that Mr Odgers is not liable for any part of the Plaintiffs' claim and I find that the whole figure claimed by the Plaintiffs is to be recovered by the Defendant from the Third Party as damages and give judgment accordingly".

11

Mr Silkin in a careful argument contends that that conclusion is wrong. First, he contends that the Defendantshould have minimised his damage by returning the car instead of waiting for the Plaintiffs to determine the agreement. It is clear on the agreement that clause 8 spplieu equally whether the owners or the hirer determine the hiring, and the Defendant's liability would therefore be the same in either event. But Mr Silkin in this Court for the first time contends that the item of £311 could not be awarded, on the proper construction of clause 8, and was only awarded because the Defendant's and Third Party's representatives and also the Judge failed to perceive this. Had the Defendant returned the car, he argues, the error in construction would have been so obvious that it would not have occurred. Secondly, he argues that the Third Party only has to pay damages that properly flow from the breach and that the item of £311 does not properly flow from it,

12

I cannot accept the argument that the Defendant failed to minimise his damages by not returning...

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10 cases
  • Brewer v Mann
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 7 Marzo 2012
    ...311 Mr Downey on the other hand submitted that Mrs Brewer was entitled to what he called reliance damages as awarded in Yeoman Credit Ltd v. Odgers [1962] 1 WLR 215 (CA) and Charterhouse Credit Co Ltd v. Tolly [1963] 2 QB 683 (CA). Although Mrs Brewer had not accepted Fortis's repudiation, ......
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  • New York Laser Clinic Ltd v Naturastudios Ltd
    • United Kingdom
    • Queen's Bench Division
    • 30 Octubre 2019
    ...entered into the hire-purchase agreement.” 45 Another “car” case is Yeoman Credit v Odgers Vospers Motor House Plymouth (Third Party) [1962] 1 WLR 215 (CA) 46 In Wells (Merstham) Ltd v Buckland Sand and Silica Ltd [1965] 2 Q.B. 170 (Davies J), the Defendant was a vendor of sand and the Cl......
  • Brewer v Mann
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    • Queen's Bench Division
    • 2 Octubre 2012
    ...car to the car that was delivered to Mrs Brewer. 219 Mrs Brewer's claim is similar to the claim which was held to be recoverable in Yeoman Credit Ltd v Odgers49 with these words: “Here we are not dealing with a breach of warranty on a sale where the purchaser can sell an unsuitable article ......
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