Kirwin v Anderson

Date

17 June 1991

Legislation

Trade Descriptions Act 1968, s.1(1)

Keywords

meaning of business; meaning of trade; agency

Counsel

Grove-Hull QC, D. Westcott, R. Litherland

Solicitors:

Sharpe Pritchard, London, as agents for the County Solicitor; Simon Stowe, Staffordshire.

Judge:

Nolan LJ, Judge J

Court:

High Court (Queen’s Bench Division)

Reported:

156 JP 301, [1992] CCLR 101.

Summary:

The respondent carried on business under the name of "National Finance and Leasing" and supplied new vehicles and capital equipment. He ordered a new Citroen car on behalf of one of his customers with a mileage of 1,030 miles and later sold it with a mileage of 120 miles.

At first instance the justices trying an offence under s1(1)(b) of the Trade Descriptions Act 1968 concluded that the respondent was not acting in the course of a trade or business in the supply of the car.

Two questions arose on appeal to the divisional court:

• does s 1(1)(b) of the Act apply to the supply of goods by an agent in the course of an agency business?
• was the supply by the respondent, in the present case, carried out in the course of his business?

In relation to the first question, the Divisional Court concluded that:

• it is clear from the context of the Trade Descriptions Act that supply by an agent was covered no less than supply by a principal;
• the purpose of the Act is to protect the consumer and that protection is required irrespective of whether he obtains goods from a principal or agent. A customer may not know, and may have no means of finding out, whether the person who is supplying him is indeed a principal or is merely an agent;

In assessing whether sale was within the 'course of business', the divisional court considered the cases of Havering London Borough Council v Stevenson and Davies v Sumner and concluded as follows:

Decision

• the fact that the sale was discharged for no commission, commission being foregone by way of a moral obligation, was in no way inconsistent with it being carried out "in the course of business"
• it is in no way an unbusinesslike act to discharge a moral obligation, if the means of discharge amount to a normal business activity;
• further it surely cannot be right that the protection of the consumer should depend upon the motives of the supplier in relation to the question whether or not he, the supplier, charges a commission upon the sale; and
• the test is not so much whether a profit results from the transaction as whether the transaction is of the type normally conducted in the trade. In Davies v Sumner the car was what might be called a capital asset of the trade. Here it was an asset of a kind whose sale was a normal part of the respondent's trading activities.

Accordingly the appeal was allowed and the decision of the justices quashed.