White v. John Warrick & Co. Ltd.

A newsagent hired a delivery cycle. A spare cycle was supplied, and its saddle slipped and threw him off. The hire agreement said the company was not liable for personal injuries to riders. The Court of Appeal held that this clause did not clearly cover negligence (failure to take reasonable care), and ordered a new trial on negligence. The judgment has no numbered paragraphs and is delivered by three judges in turn.

Quick Revision

Read the full judgment: BAILII

Parties

Mr Tom White — plaintiff and appellant. He was a newsagent and tobacconist at Canonbury and the hirer of the cycles.

John Warrick & Co. Ltd. — defendants and respondents. They owned carrier cycles and hired them out. The judgment text reads "Warrick".

Mr Justice Parker — the trial judge whose judgment for the defendants was appealed. He is not a party.

Anthony — a witness, not a party. He worked for White in June 1950. He was the chief witness on the condition of the cycle.

Procedural History

1. The Court of Appeal sat at the Royal Courts of Justice, and the judgment is dated 24 June 1953. The appeal was heard before Singleton, Denning and Morris L.JJ. The record gives no case number.
2. White's claim was heard by Mr Justice Parker. He gave judgment for the defendants (Singleton L.J.).
3. If the judge had found White entitled to damages, he would have awarded £505. That was a provisional assessment and no more (Singleton L.J.).
4. White appealed. Mr Macintyre appeared for the appellant and Mr E Brian Gibbens for the respondents.
5. Mr Gibbens argued that £505 was too much. The Court said it saw no reason to interfere with the provisional assessment of damages (Singleton L.J.).
6. The Court of Appeal allowed the appeal, set aside the judgment below and ordered a new trial on negligence.

Facts

1. White, a newsagent, arranged with the defendants to be supplied with a tradesman's cycle with a large carrier in front. He wanted it to deliver newspapers.
2. The arrangement was in a written contract dated 13 April 1948. It was on a printed form used by the defendant company. White was called the hirer.
3. Clause 1 let three-year hire of Carrier Cycles No. 13409, then year to year, at a weekly rent of 5s. each. The rent was payable quarterly in advance.
4. Clause 2 said that, for that sum, the defendants would maintain the machines in working order and condition. Punctures were excepted. They would also supply spare carriers as soon as possible when the hirer's machines were being repaired, at no extra charge.
5. Other clauses made the defendants supply lamps and accessories and repair damage in certain cases.
6. The machine was used by White for a considerable time. So far as the Court knew, it was kept in order until towards the end of May 1950, when it needed repair. The defendants were told.
7. On Saturday 3 June 1950 a representative of the defendants went to White's shop. He left a spare cycle and took away the cycle needing repair. The defendants were purporting to perform Clause 2.
8. White got on the cycle very soon and did not examine it. After about a quarter of a mile the saddle went forward and threw him onto the ground. He hurt his right leg and was shaken.
9. He pushed the cycle back to his shop. The saddle then sloped down onto the cross-bar. He found it quite loose and moving about.
10. At first it was not thought he was badly hurt. He had injured his knee and was in hospital for some time with synovitis. Medical reports showed stiffness in the knee joint and likely further trouble from time to time.
11. White, his wife and Anthony gave evidence. It seemed to show that some nuts under the seat were rusty and could not be moved.
12. Anthony was not employed by White at the trial. In June 1950 he delivered newspapers for White. After hearing of the accident he saw the cycle and found the saddle tilted back.
13. Anthony said he used the cycle several times afterwards. The saddle slipped backwards and made him lose control. He tried to tighten the nut, but it was too rusty to shift. His evidence impressed the judge. There was other evidence on both sides.
14. White made two claims. The first was breach of warranty (a contract promise): the defendants had to supply a cycle reasonably fit for its purpose.
15. The second claim was in paragraph 6 of the Statement of Claim. It alleged that the accident was due to the negligence or breach of contract of the defendants, their servants or agents.
16. The particulars said the defendants failed to take proper care that the spare cycle was in working condition. They allegedly handed it over without warning when they knew or ought to have known the saddle was not properly fastened.
17. In substance the second claim said the defendants owed a duty to take the care a reasonably careful cycle owner would take when hiring out a cycle. If they had examined it, they would have found the nuts rusty and the saddle loose. White used it as intended.
18. The defendants denied negligence, breach of duty and breach of contract. They also pleaded Clause 11 in paragraph 4 of the Defence.
19. Clause 11 said nothing in the agreement made the defendants liable for personal injuries to the riders of the machines hired. It also excluded third-party claims and loss of the hirer's goods in the machines.
20. Mr Macintyre conceded that Clause 11 would stop White succeeding on a claim for breach of contract.

Issues Raised

The judgment does not number its issues. The questions the judges dealt with were these.

1. Do the words "machines hired" in Clause 11 cover the spare machine that replaced the hired machine?
2. Can a claim in negligence be brought alongside a contract claim on the same facts, so that Clause 11 does not bar it?
3. Does Clause 11 exempt the defendants from liability for negligence, or only from contractual liability?
4. Was the claim in negligence founded in tort (a civil wrong), not contract?
5. Given that the trial judge made no finding on negligence, should there be a new trial?

Arguments Contended

For the appellant (White)

1. Clause 11 speaks of machines hired. It protects only a machine hired under the contract (Mr Macintyre; the first point taken in the Court of Appeal).
2. It does not protect a spare machine provided while the hired machine was out of order.
3. Clause 11 may relieve the defendants of a claim for breach of contract. It does not protect them if a cause of action in negligence is established.
4. He accepted that Clause 11 barred a claim for breach of contract. His case was that negligence was proved on the facts and Clause 11 is no bar to an action in negligence.
5. The Statement of Claim alleged that the defendants owed White a duty to take reasonable care when hiring out a cycle. It said they breached it, so White is entitled to damages (as framed by Singleton L.J.).
6. Authorities were cited to the Court, including Alderslade v Hendon Laundry (Mr Macintyre named it). The judgment names no counsel for the others:
   • Lord Macmillan's speech in Donoghue v Stevenson;
   • Taylor v Manchester, Sheffield & Lincolnshire Railway;
   • Kelly v Metropolitan Railway;
   • Olley v Marlborough Court, Alderslade v Hendon Laundry (Mr Macintyre) and Rutter v Palmer.
7. Clause 11 may refer to matters other than negligence. Its language could operate on the opening words of Clause 2 (the duty to maintain the machines). It can apply to injury occurring without negligence (Mr Macintyre, as recorded by Morris L.J.).

For the respondents (John Warrick & Co. Ltd.)

1. They denied negligence, breach of duty and breach of contract.
2. They relied on Clause 11: the defendants are not liable for personal injuries to the plaintiff when riding a machine provided for him.
3. If there was negligence, it was negligence in performing the contract. The spare machine was supplied under the obligation in the contract, and any cause of action arose out of the agreement. Clause 11 therefore prevents success, negligence or not (Mr Gibbens).
4. The negligence alleged was a breach of contract, not an independent tort. The facts were the same for both. White should not recover by framing his action in tort (Mr Gibbens, as recorded by Denning L.J.).
5. He relied on Lord Finlay in Elder, Dempster v Paterson and on Scrutton L.J. in Hall v Brooklands Auto-Racing Club.
6. He submitted that £505 was too high, given the injury and the medical report.

Court's Reasoning

Singleton L.J.

1. Noted: The facts are as above. The trial judge accepted White's evidence on the condition of the cycle over the defendants' evidence. He did not say in so many words that there was negligence.
2. Noted: Parker J's first answer to the defence was that the accident happened on a spare machine, not a machine hired. He said the clause applied only to a hired machine.
3. Held: The words machines hired cover the spare machine that takes the place of the machine hired. The printed form deals with machines in the plural, and Clauses 2 and 12 support this reading. It is the natural reading, and the submission fails.
4. Noted: The second submission was that Clause 11 relieves liability in contract but not in negligence. Mr Gibbens said any negligence was in the performance of the contract, so Clause 11 barred it. Singleton L.J. called this a question of some nicety.
5. Noted: Parker J said some claims can be brought in contract or tort. One example is a claim against a carrier. Another is a claim against a bailee (a person holding another's goods) who fails to deliver them. He said there was no room for an alternative claim at common law here.
6. Noted: Singleton L.J. was not sure that this is right. The Court had authorities cited that Parker J did not have.
7. Noted: Lord Macmillan in Donoghue v Stevenson said a contract does not stop a separate right of action in negligence between the same parties. The injured railway passenger may sue for breach of the contract of safe carriage or for negligence.
8. Held: On those words, the same facts can give rise to a claim in contract and a claim in tort. Clause 11 may bar the contract claim. It cannot be said to shut out the normal action for negligence.
9. Noted: Taylor v Manchester (A. L. Smith L.J.) said a person lawfully on railway premises can sue the company for active negligence of its servants, with or without a contract.
10. Noted: In Olley v Marlborough Court Singleton L.J. quoted Scrutton L.J. in Rutter v Palmer: a defendant is not exempt from liability for his servants' negligence unless adequate words are used. Denning L.J. there said an inn notice of that kind did not exempt from negligence, only from liability as insurer.
11. Noted: Alderslade v Hendon Laundry (Lord Greene MR) says a clause is read as covering negligence where negligence is the only ground of the loss. Where the loss may arise on another ground, the clause is confined to that other ground and excludes negligence.
12. Held: The primary object of Clause 11 is to relieve the defendants from liability for breach of contract or breach of warranty. Unless clear words also exempt negligence, the clause ought not to be construed as giving protection to the defendants if negligence is proved against them.
13. Held: Suppose the accident was due to lack of proper care in handing out the cycle. Then Clause 11 does not save the defendants.
14. Noted: There is no finding on negligence. The judge may have been inclined to find negligence but did not say so. He read Clause 11 as covering negligence, and assumed that it did.
15. Held: The Court cannot deal with the case finally. A new trial on negligence is needed, with the Court's opinion that negligence proved against the defendants is not excused by Clause 11. The appeal should be allowed.

Denning L.J.

1. Noted: The defendants supplied a bicycle on hire, intending that White and his servants would ride it. It was defective and threw the rider. White claims for breach of contract or negligence. The defendants rely on the printed clause.
2. Held: Two principles are well settled. First, a person can exempt himself from a liability imposed by the common law only by a contract. The injured party must have entered it freely and deliberately, in words that are "clear beyond the possibility of misunderstanding".
3. Held: Second, suppose there are two heads of liability, one for negligence and one strict. Then an exemption clause is construed, so far as possible, as exempting only the strict liability.
4. Noted: Here the two heads are negligence and breach of contract. Contract liability is stricter. The defendants may be liable in contract for a defective machine even without negligence (Hyman v Nye).
5. Held: The exemption clause is construed as exempting the defendants only from contractual liability, not from liability for negligence.
6. Noted: Mr Gibbens admitted that the clause would not avail against an independent tort. He said the negligence here was a breach of contract, arising from the same facts. White should not recover by framing his action in tort. Parker J took that view.
7. Held: Denning L.J. could not agree. The claim in negligence is founded in tort and not on contract.
8. Why: If White's servant had been riding and injured, he could sue in negligence on the principle in Donoghue v Stevenson. The clause would be no defence against him. So the defendants owed the servant a duty of care, and a fortiori (all the more) they owed the same duty to White.
9. Held: Breach of that duty is a tort provable without relying on any contract. White could also rely on the contract, but he is not bound to. If he can avoid the clause by framing his claim in tort, he is entitled to do so.
10. Noted: Elder, Dempster v Paterson (Lord Finlay) concerned a bill of lading clause exempting charterers and owners from liability for bad stowage. The owners, who were not parties to the contract, could rely on it.
11. Held: That case decides that a party cannot go back on an exemption. This applies where he deliberately agreed, in plain words, to exempt a third party from liability for negligence. He must have intended the third party to benefit. It is a case of a third party taking advantage of a contract made for his benefit (Smith v River Douglas Catchment Board). It has no application here.
12. Noted: Mr Gibbens relied on Scrutton L.J. in Hall v Brooklands Auto-Racing Club: "When the Defendant has protection under a contract, it is not permissible to disregard the contract and allege a wider liability in tort."
13. Held: That passage applies only where the contract by the plaintiff plainly gives the defendant an exemption from liability for the tort. An example is a transport company stipulating for exemption from damage, howsoever caused. The contract must be by and with the plaintiff.
14. Held: In Donoghue v Stevenson a manufacturer cannot exempt himself from liability to the consumer by a clause in his contract with the wholesaler. This is so even if the clause is brought to the consumer's notice. It is to the third party's prejudice and does not bind him.
15. Held: Neither case affects this one, which turns on construing the clause. It exempts the defendants from liability in contract, but not in tort. If White can make out negligence, he may do so, although the same facts give a contract cause of action from which the defendants are exempt.
16. Held: He agreed with Singleton L.J. There is no definite finding of negligence and no transcript of the evidence, so there must be a new trial on that point.

Morris L.J.

1. Noted: The appeal depends on construing Clause 11.
2. Held: The words machines hired do not refer only to machines originally supplied. Clause 2 required payment for a substituted machine, and that was payment by way of hire. Clauses 4, 8 and 12 also make Mr Macintyre's contention impossible to sustain.
3. Noted: The harder question is whether Clause 11 exempts liability in all circumstances. Morris L.J. had some doubt in argument but reached a clear conclusion.
4. Held: Clause 11 does not provide an exemption if negligence is alleged and proved. He agreed with the judgments of the other two judges.
5. Noted: The general approach was laid down by Scrutton L.J. in Rutter v Palmer. First, the defendant is not exempt from liability for negligence of his servants unless adequate words are used. Second, the liability apart from the exempting words must be ascertained. Third, the particular clause is considered. If the only liability is for negligence, the clause more readily operates to exempt.
6. Noted: Lord Greene MR said the same in Alderslade v Hendon Laundry, in the passage quoted by Singleton L.J.
7. Held: Mr Macintyre is right that Clause 11 may refer to matters other than negligence. It might operate on the opening words of Clause 2, the duty to maintain the machines in working order, and on other provisions. It can apply to injury occurring without negligence.
8. Held: On the principles of Scrutton L.J. and Lord Greene, Clause 11 is not clear enough to exempt from liability if negligence is proved. He agreed with the proposed course.

Authorities

• M'Alister (or Donoghue) v Stevenson, [1932] AC 562, at 609 (Lord Macmillan). Cited by Singleton L.J. for the point that a contract and a right of action in negligence can coexist. Denning L.J. relied on the same case for the servant's claim and for the manufacturer and consumer example.
• Taylor v Manchester, Sheffield & Lincolnshire Railway Company, [1895] 1 QB 134, at 140 (A. L. Smith L.J.). Cited by Singleton L.J. Active negligence is actionable with or without a contract.
• Kelly v Metropolitan Railway Company, [1895] 1 QB 944. Cited by Singleton L.J. as one of the authorities referred to the Court.
• Olley v Marlborough Court Ltd., [1949] 1 KB 532, at 547 and 550. Cited by Singleton L.J. for Singleton and Denning L.JJ.'s words on a notice that did not exempt from negligence.
• Rutter v Palmer, [1922] 2 KB (Scrutton L.J.). Cited by Singleton L.J. and Morris L.J. for the three rules on construing an exemption clause.
• Alderslade v Hendon Laundry Ltd., [1945] 1 KB 189, at 192 (Lord Greene MR). Cited by Singleton L.J. and Morris L.J. for the rule on clauses covering negligence.
• Hyman v Nye, (1881) 6 QBD 685. Cited by Denning L.J. Liability in contract for a defective machine can exist without negligence.
• Elder, Dempster & Co. v Paterson, [1924] AC 548 (Lord Finlay). Relied on by Mr Gibbens. Denning L.J. said it is a third-party benefit case and does not apply.
• Smith v River Douglas Catchment Board, [1949] 2 KB 514, at 514 to 516. Cited by Denning L.J. for illustrations of a third party taking the benefit of a contract.
• Hall v Brooklands Auto-Racing Club, [1933] 1 KB 213 (Scrutton L.J.). Relied on by Mr Gibbens. Denning L.J. said it applies only where the plaintiff's own contract gives the exemption.

Judgement

The order is in these terms.

1. The appeal is allowed.
2. The judgment below is set aside.
3. There is a new trial on the issue of negligence.
4. The appellant, White, has the costs of the appeal.
5. The costs of the first trial are to be dealt with by the judge at the second trial.

Legal Principle / Ratio

A contract clause exempting a party from liability is read as covering negligence only if the words clearly say so. Where the clause can operate on non-negligent liability, it is confined to that. On these facts, Clause 11 did not exempt the defendants if negligence was proved.

The key holding of Morris L.J. is that Clause 11 "is not clear so as to exempt from liability if negligence is proved".

Obiter (an incidental remark): Denning L.J. said a manufacturer cannot exempt himself from liability to a consumer by a clause in his contract with the wholesaler.

Critical Analysis

Analysis based on the judgment text.

• The Court made no finding of negligence. The result is a new trial, and the judgment does not say whether White ultimately succeeded.
• Singleton L.J. and Morris L.J. decide the case on how Clause 11 is read. Denning L.J. also holds that the negligence claim is founded in tort and not on contract. The judgment does not say whether the other two judges adopted that reasoning.
• Denning L.J. said Hall v Brooklands applies only where the plaintiff's own contract gives the exemption. The judgment does not say what the position would be for a clause worded to cover negligence expressly.
• The transcript of the evidence was not before the Court. It could not decide negligence itself.

Significance

• The case shows that the same facts can give rise to a claim in contract and a claim in tort.
• It applies the rule that words excluding negligence must be clear.
• The notes page cites it as an illustration of contract and tort liability side by side.

Exam-Important Points

• Rule: An exemption clause covers negligence only in clear words. Where it can apply to non-negligent liability, it is confined to that.
• Trap 1: The Court did not decide that the defendants were negligent. It ordered a new trial on negligence.
• Trap 2: The words machines hired were held to cover the spare machine. White lost that point.
• Trap 3: White conceded that Clause 11 barred his claim in contract.
• Denning L.J.'s test: the servant example shows that a duty of care exists apart from the contract.
• Order: Appeal allowed; new trial; costs of the appeal to White; costs of the first trial left to the second-trial judge.

Prepared from the full text of the judgment. The judgment has no numbered paragraphs, so this page cites each judge's opinion instead.