IN THE COUNTY COURT AT EDMONTON
59 Fore Street
Edmonton
Before
DEPUTY DISTRICT JUDGE PERRY
______________
GARY ALEXANDER
- v -
COPART UK LTD
______________
Mr Alexander (claimant’s brother) appeared as a lay representative on behalf of the Claimant
Mr Garner (director of the defendant company) appeared on behalf of the Defendant
______________
JUDGMENT
5th APRIL 2018, 16.08-16.23
(AS APPROVED)
______________
DEPUTY DISTRICT JUDGE PERRY:
1. The defendant in this case is a company which deals in on-line auctions for the sale of accident damaged vehicles, including, it appears, insurance write-offs where the vehicles are capable of repair but uneconomic to repair, so far as the insurance companies are concerned.
2. The claimant is a car dealer who purchases vehicles from the defendant company and has done so for a number of years. His dealings with the company are so voluminous that he is unable to give an estimate as to how many vehicles he has bought from the defendant, but I am told he bids for up to 30 lots at a time, so clearly he has dealt with them for some considerable period.
3. The business relationship had not appeared to cause a problem until the sale of a particular vehicle which occurred last summer. The defendants advertised a vehicle on its website. It is explained in Mr Garner's witness statement that members of the defendant, and indeed they only sell to their members, members of the defendant are able to put in advanced maximum bids. A procedure was adopted which sounds very similar to that on eBay where you indicate the most you are prepared to pay. The company then bids on your behalf until that limit has been reached and it is open to bidders to increase their bids later if they wish to do so.
4. The evidence is, and it is not disputed, that the claimant put two bids in on this particular vehicle. One on the 27th of August 2017 for £700 and a further one on the 28th of August 2017 for £1,500. Ultimately, he was successful with a bid of £2,050. The auction concluding on the 1st of September last year.
5. Having made the two initial bids, the claimant telephoned the defendant company to ask about the number of previous owners for the vehicle. It appears that he did this because he had an interested party who wanted a one owner vehicle. It is the claimant's case that he spoke with a lady at the defendant company and asked how many owners were shown on the log book. She said she had to go and get the log book and went away and came back with the document to hand. He asked her then how many owners were shown and she said, “The log book states number of keepers, one”. He then said he asked her if there was one, how many previous owners there were, and again she replied, “The log book says number of keepers, one”.
6. The defendant's case is that the person with whom the claimant spoke, Ms Fair, read to the claimant verbatim what was on the log book which was the number of former keepers, one, in addition to the person named as being the current registered keeper of the vehicle.
7. I have a witness statement from Ms Fair, she has not attended court today to be cross-examined on that. She exhibits to her witness statement an email which she sent to Carrie Payer on the 7th of November which is over two months after the conversation took place, in which she sets out her recollection and she makes a witness statement dated the 15th of March, and again, in which she sets out her recollection and says what she would have done in the usual course of events.
8. I prefer the claimant's evidence on this particular point. He raised the issue with the company within three days of the auction closing. Events would then be fresh in his mind. They were of particular importance to him and I have not considered that
Ms Fair's recollection over two months afterwards when she was responding to an email to a question, which we don't know what it was because it has not been produced, her recollection would not have been as clear and in the circumstances, I find the claimant's recollection to be more accurate.
9. It transpired when the claimant carried out HPI check, that the vehicle had in fact had two owners and he complained about this fact to the defendant company.
The defendants rely upon an exclusion clause in their contract which basically puts the onus on making inquiries upon buyers and it exempts them from any misrepresentation which they may make.
10. Having preferred the evidence of the claimant on the contents of the conversation with Ms Fair, it follows that there was clearly a misrepresentation. I find that Ms Fair was not acting in any way dishonestly or fraudulently in making that representation. Her evidence is quite clear, she has no financial incentive in doing so. However, I do take a view given my findings of the conversation, that she was negligent in her response to the claimant's enquiries and there was therefore, a negligent misrepresentation.
11. I have to ask myself whether the misrepresentation induce the contract. It is right to say that bids had been made by the claimant before the enquiry was made as to the number of previous owners. He was not questioned about those bids in cross examination, I do not know whether they relate to the particular the transaction in mind, there is no way of my knowing that. However, I do take a view that as he had lined up a buyer of £4,000 for the vehicle, his decision to purchase at the ultimate purchase price was indeed influenced by the misrepresentation. The defence therefore which the defendant has to rely upon is its exclusion clause.
12. I have looked at the Misrepresentation Act, and in particular s.3, which provides that, “If a contract contains a term which would exclude or restrict any liability which a party to a contract may be subject by reason of any misrepresentation made by him before the contract was made, the term should be of no effect except in so far as it satisfies the requirements of unreasonableness as stated in s.11.1 of the Unfair Contract Terms Act 1977” and “it is for those claiming that the term satisfies the requirement to show that it does”. The burden of proof therefore is upon the defendant to establish that the clause is reasonable not upon the claimant to prove that it is unreasonable.
13. There has been no evidence from the defendant on that point. All I have are the various points referred to in the defence which has been filed on the defendant's behalf. But they say it is reasonable in the terms of the business which they carry out. It is explained to me the number of bids which are made per day, it is impracticable and financially unviable for car dealers to carry out HPI checks on all vehicles they are bidding on, and I accept that evidence which does not appear to have been challenged.
Looking at the factors in Schedule 2, that I am required to have regard to, the strength of the bargaining positions of the parties, this is quite clearly a standard clause which the defendants insist upon. There appears to be no scope in the context of an auction contract for the claimant to negotiate an alternative position with the supplier.
14. It says in paragraph A of schedule 2 to the Unfair Contract Terms Act, in considering the strength of the bargaining position I have got to take account of, among other things, “…alternative means by which the customer's requirements could have been met”. I am sure there must be other companies apart from the defendant company in this business. Nobody has addressed me as to the terms or conditions those companies apply. I suspect they are very similar to those of the defendant, but if the defendant wanted to rely upon the fact that the claimant could have gone elsewhere without that term, it was for the defendant to produce evidence of that fact given the presumption contained in the Act.
15. The next issue is whether the customer receives an inducement to agree to the term. From the defence I have got it denies any inducement was there. An inducement in this context is an advantage to the customer to accept the term rather than anything else. It is not duress which causes a customer to enter into a contract.
I accept the customer knew or should have known of the existence of the term, but that to my mind does not in itself render the contract term fair.
16. The defendant had in its possession the registration document. It had possession of that knowledge. It could have answered the question accurately. It's not reasonable in the circumstances to then hide behind the exclusion clause in the contract, and therefore I find the exclusion clause is not applicable.
17. The remedy of rescission is not possible because the vehicle has been disposed of and I therefore have to look at what loss the claimant has suffered. It is set out in his particulars of claim at paragraph 27. His calculation is of a loss of £1,679.60. I found that calculation confusing and unhelpful.
18. My analysis of the claimant's position is this; the claimant needs to be put in the position he would have been in had the contract been performed, had the vehicle only had one previous owner. If that had been the position, on the evidence before me, the claimant would have sold the vehicle for £4,000. He would, if the contract had been performed properly, have incurred the cost of purchase of £2,084.60. He would, as has been acknowledged, incurred the delivery charge of £160. He would have incurred, and that is supported by the email in evidence, the cost of repairs of £720. There would have been the valet cost of £40. He would not, on the evidence before me, have incurred any advertising costs because he had a buyer in waiting, there would therefore be no need to advertise. He has not incurred any storage charges and it is not therefore appropriate to allow a charge for storage to be made.
19. I therefore come to total deductions, that is the cost of purchase, the delivery charge, the repairs and the valet of £3,004.60. If I deduct that from £4,000 that leaves £995.40 which is a profit that the claimant would have made had the representation been accurate and not had a misrepresentation. So, in the circumstances I shall enter judgment for the claimant for that sum.
Approved
DDJ M. J. Perry
19/04/2018
---------------
This transcript has been approved by the Judge
59 Fore Street
Edmonton
Before
DEPUTY DISTRICT JUDGE PERRY
______________
GARY ALEXANDER
- v -
COPART UK LTD
______________
Mr Alexander (claimant’s brother) appeared as a lay representative on behalf of the Claimant
Mr Garner (director of the defendant company) appeared on behalf of the Defendant
______________
JUDGMENT
5th APRIL 2018, 16.08-16.23
(AS APPROVED)
______________
DEPUTY DISTRICT JUDGE PERRY:
1. The defendant in this case is a company which deals in on-line auctions for the sale of accident damaged vehicles, including, it appears, insurance write-offs where the vehicles are capable of repair but uneconomic to repair, so far as the insurance companies are concerned.
2. The claimant is a car dealer who purchases vehicles from the defendant company and has done so for a number of years. His dealings with the company are so voluminous that he is unable to give an estimate as to how many vehicles he has bought from the defendant, but I am told he bids for up to 30 lots at a time, so clearly he has dealt with them for some considerable period.
3. The business relationship had not appeared to cause a problem until the sale of a particular vehicle which occurred last summer. The defendants advertised a vehicle on its website. It is explained in Mr Garner's witness statement that members of the defendant, and indeed they only sell to their members, members of the defendant are able to put in advanced maximum bids. A procedure was adopted which sounds very similar to that on eBay where you indicate the most you are prepared to pay. The company then bids on your behalf until that limit has been reached and it is open to bidders to increase their bids later if they wish to do so.
4. The evidence is, and it is not disputed, that the claimant put two bids in on this particular vehicle. One on the 27th of August 2017 for £700 and a further one on the 28th of August 2017 for £1,500. Ultimately, he was successful with a bid of £2,050. The auction concluding on the 1st of September last year.
5. Having made the two initial bids, the claimant telephoned the defendant company to ask about the number of previous owners for the vehicle. It appears that he did this because he had an interested party who wanted a one owner vehicle. It is the claimant's case that he spoke with a lady at the defendant company and asked how many owners were shown on the log book. She said she had to go and get the log book and went away and came back with the document to hand. He asked her then how many owners were shown and she said, “The log book states number of keepers, one”. He then said he asked her if there was one, how many previous owners there were, and again she replied, “The log book says number of keepers, one”.
6. The defendant's case is that the person with whom the claimant spoke, Ms Fair, read to the claimant verbatim what was on the log book which was the number of former keepers, one, in addition to the person named as being the current registered keeper of the vehicle.
7. I have a witness statement from Ms Fair, she has not attended court today to be cross-examined on that. She exhibits to her witness statement an email which she sent to Carrie Payer on the 7th of November which is over two months after the conversation took place, in which she sets out her recollection and she makes a witness statement dated the 15th of March, and again, in which she sets out her recollection and says what she would have done in the usual course of events.
8. I prefer the claimant's evidence on this particular point. He raised the issue with the company within three days of the auction closing. Events would then be fresh in his mind. They were of particular importance to him and I have not considered that
Ms Fair's recollection over two months afterwards when she was responding to an email to a question, which we don't know what it was because it has not been produced, her recollection would not have been as clear and in the circumstances, I find the claimant's recollection to be more accurate.
9. It transpired when the claimant carried out HPI check, that the vehicle had in fact had two owners and he complained about this fact to the defendant company.
The defendants rely upon an exclusion clause in their contract which basically puts the onus on making inquiries upon buyers and it exempts them from any misrepresentation which they may make.
10. Having preferred the evidence of the claimant on the contents of the conversation with Ms Fair, it follows that there was clearly a misrepresentation. I find that Ms Fair was not acting in any way dishonestly or fraudulently in making that representation. Her evidence is quite clear, she has no financial incentive in doing so. However, I do take a view given my findings of the conversation, that she was negligent in her response to the claimant's enquiries and there was therefore, a negligent misrepresentation.
11. I have to ask myself whether the misrepresentation induce the contract. It is right to say that bids had been made by the claimant before the enquiry was made as to the number of previous owners. He was not questioned about those bids in cross examination, I do not know whether they relate to the particular the transaction in mind, there is no way of my knowing that. However, I do take a view that as he had lined up a buyer of £4,000 for the vehicle, his decision to purchase at the ultimate purchase price was indeed influenced by the misrepresentation. The defence therefore which the defendant has to rely upon is its exclusion clause.
12. I have looked at the Misrepresentation Act, and in particular s.3, which provides that, “If a contract contains a term which would exclude or restrict any liability which a party to a contract may be subject by reason of any misrepresentation made by him before the contract was made, the term should be of no effect except in so far as it satisfies the requirements of unreasonableness as stated in s.11.1 of the Unfair Contract Terms Act 1977” and “it is for those claiming that the term satisfies the requirement to show that it does”. The burden of proof therefore is upon the defendant to establish that the clause is reasonable not upon the claimant to prove that it is unreasonable.
13. There has been no evidence from the defendant on that point. All I have are the various points referred to in the defence which has been filed on the defendant's behalf. But they say it is reasonable in the terms of the business which they carry out. It is explained to me the number of bids which are made per day, it is impracticable and financially unviable for car dealers to carry out HPI checks on all vehicles they are bidding on, and I accept that evidence which does not appear to have been challenged.
Looking at the factors in Schedule 2, that I am required to have regard to, the strength of the bargaining positions of the parties, this is quite clearly a standard clause which the defendants insist upon. There appears to be no scope in the context of an auction contract for the claimant to negotiate an alternative position with the supplier.
14. It says in paragraph A of schedule 2 to the Unfair Contract Terms Act, in considering the strength of the bargaining position I have got to take account of, among other things, “…alternative means by which the customer's requirements could have been met”. I am sure there must be other companies apart from the defendant company in this business. Nobody has addressed me as to the terms or conditions those companies apply. I suspect they are very similar to those of the defendant, but if the defendant wanted to rely upon the fact that the claimant could have gone elsewhere without that term, it was for the defendant to produce evidence of that fact given the presumption contained in the Act.
15. The next issue is whether the customer receives an inducement to agree to the term. From the defence I have got it denies any inducement was there. An inducement in this context is an advantage to the customer to accept the term rather than anything else. It is not duress which causes a customer to enter into a contract.
I accept the customer knew or should have known of the existence of the term, but that to my mind does not in itself render the contract term fair.
16. The defendant had in its possession the registration document. It had possession of that knowledge. It could have answered the question accurately. It's not reasonable in the circumstances to then hide behind the exclusion clause in the contract, and therefore I find the exclusion clause is not applicable.
17. The remedy of rescission is not possible because the vehicle has been disposed of and I therefore have to look at what loss the claimant has suffered. It is set out in his particulars of claim at paragraph 27. His calculation is of a loss of £1,679.60. I found that calculation confusing and unhelpful.
18. My analysis of the claimant's position is this; the claimant needs to be put in the position he would have been in had the contract been performed, had the vehicle only had one previous owner. If that had been the position, on the evidence before me, the claimant would have sold the vehicle for £4,000. He would, if the contract had been performed properly, have incurred the cost of purchase of £2,084.60. He would, as has been acknowledged, incurred the delivery charge of £160. He would have incurred, and that is supported by the email in evidence, the cost of repairs of £720. There would have been the valet cost of £40. He would not, on the evidence before me, have incurred any advertising costs because he had a buyer in waiting, there would therefore be no need to advertise. He has not incurred any storage charges and it is not therefore appropriate to allow a charge for storage to be made.
19. I therefore come to total deductions, that is the cost of purchase, the delivery charge, the repairs and the valet of £3,004.60. If I deduct that from £4,000 that leaves £995.40 which is a profit that the claimant would have made had the representation been accurate and not had a misrepresentation. So, in the circumstances I shall enter judgment for the claimant for that sum.
Approved
DDJ M. J. Perry
19/04/2018
---------------
This transcript has been approved by the Judge
Victory at Long Last “court” Has “declared” Copart Exclusion Clauses Do “not” Mee
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