Bethany Hardstaff v Fred Sherwood & Sons (Transport) Limited

This is an appeal against the decision of District Judge Morgan of 27^th January 2022 in which he dismissed the claimant, Ms. Hardstaff’s, claim for damages against the defendant Fred Sherwood & Sons (Transport) Limited arising out of a car accident in 2018.

The appeal is brought on one ground only, with the permission of HHJ Harrison given in writing on 29^th March of this year. The one ground is whether the judge was correct to dismiss that part of Ms. Hardstaff’s claim for damages which comprised the charges for hiring a replacement vehicle on the basis that the hire contract was unenforceable.

There is no dispute that Ms. Hardstaff needed a replacement car for her work and for travel, but the judge concluded that she could not recover for the cost of the hire. As I read his judgment, his sole ground for doing so was that the contract of hire was unenforceable (see paragraphs 11 and 12 of the judgment) for the following reasons: first, Ms. Hardstaff was given no explanation as to her prospective liability under the terms of the agreement at the time of entering into the hire contract; secondly, she had alternative insurance available to her which would have provided her with a courtesy car, and she thought that that was indeed what she was getting. The judge noted at 12 that: “Had she had that alternative courtesy car, then this claim would not have been made”.

In my judgment, those reasons do not amount in law to a basis to conclude that the hire contract was unenforceable. It is common ground that Ms. Hardstaff signed the contract and it is clearly established law that a contract is not rendered unenforceable merely because the person who signed it did not read it and did not understand its terms or implications when they entered into it. There is no evidence that anything said by the hire company at the time or before she entered into it constituted any misrepresentation, and that is in any event not the way the case is put on appeal.

Nor do I see how it can be said that the fact that she had an alternative insurance car available to her, the courtesy car, makes the contract unenforceable. As Ms. Rutherford who appears for Ms. Hardstaff submitted, a defendant cannot benefit from the claimant having an alternative source of recovery under their own policy of insurance (see, for example, Bee v Jenson [2007] EWCA Civ 923 at paragraph 11).

Accordingly, for those reasons, I consider the judge was wrong in law to dismiss the claim on the grounds that the contract of hire was unenforceable. Mr. Pring contends, however, that the judge’s decision was actually that the claimant lacked the intention to create legal relations or that there was no consideration provided to her for entering into the hire agreement.

The first problem with this contention is that, however liberal an approach is taken to the interpretation of paragraphs 11 and 12 of the judgment, I cannot see that the judge determined either that there was no intention to create legal relations, a separate question of fact, or that there was no consideration in law for the entry into the hire agreement.

As to the lack of intention to create legal relations, that was not a point taken by the defendants in the defence and, when the judge himself raised the question of enforceability, it was not then argued on behalf of the defendant that the claimant lacked intention to create legal relations.

In any event I do not accept that a mistaken belief that Ms. Hardstaff was already entitled to the car that she thought she was getting negates the intention to create legal relations with the hire company at the point she entered into the contract by signing it.

Accordingly, the only way in which this point could now be raised on appeal is by way of a respondent’s notice to seek to uphold the judgment on the basis of a different legal argument. That is in fact not what the defendant seeks to do. In any event, she could not because it gives to a question of fact that was not determined before the judge. If the judge has not made a finding of fact that the claimant lacked the intention to create legal relations, it is not open to the appeal court to do so in his place.

As to lack of consideration, this also was not argued before the judge. I do not think that the judge in paragraph 12 went so far as to say that there was no consideration for the contract which Ms. Hardstaff entered into with the hire company. What he said was, had she had the alternative courtesy car under her own insurance policy then the claim would not have been made here. That may well be true. It would not have been made by her, although even then it may well have been made by somebody else.

However, as between her and the hire company, I have no doubt that there was consideration. She was obliged to pay. The hire company was obliged to provide the car, which it did, and so as between those two parties there was proper consideration. For those reasons I do not accept Mr. Pring’s contention that the judge reached a decision that there was no intention to create legal relations or there was no consideration. Accordingly, I remain of the view that the judge was wrong on the question of enforceability and therefore his judgment on that point should be set aside.

There then arises a question as to the quantum of the claim. The claim was for a period of hire of 34 days, reduced by concession made below to 32 days. The judge, at paragraphs 8 and 9 concluded: “In my judgment, with regards to the period of hire, the period of hire for the works to be carried out should have been no more than eight or nine days”. At paragraph 14 he returned to this: “So far as the period is concerned, it seems to me that again is far too long”. He then discussed the length of time taken between the car being provided to the garage for repair and it being repaired, and concluded that at most it should be no more than nine days.

Taking those two paragraphs together, it seems to me the judge did indeed conclude that the appropriate period of hire if the contract had been enforceable was one of nine days.

In giving permission to appeal, HHJ Harrison gave permission only on the point of enforceability. He noted that the judge had reached other conclusions inter alia in relation to the delay. He concluded those findings were open to him on the evidence and they do not appear to be the subject of appeal. If they were, then a separate permission to appeal application would have been necessary.

Ms. Rutherford, for the claimant, frankly accepts that if that is the right construction of the judgment, then she is not pursuing an application for permission to appeal against that part of it now. Accordingly, for those reasons I will allow the appeal and substitute for the amount claimed by the claimant the amount of hire referable to a period of nine days.