White v John Warwick & Co Ltd

An exemption clause must be construed according to the liabilities which it clearly identifies. Where the same facts may give rise to strict contractual liability and liability in negligence, a clause directed generally to personal injury or contractual performance will ordinarily exclude the contractual liability but not negligence unless clear words address negligence.

A contractual relationship does not prevent a concurrent action in tort. A person supplying a machine for immediate use owes a duty to take reasonable care that it is safe, and the injured user may rely on that duty even where the same facts also support a contractual claim.

The plaintiff hired a carrier cycle from the defendants under a written agreement. While the hired cycle was being repaired, the defendants supplied a spare cycle. The plaintiff was injured when its saddle moved while he was riding it.

He claimed damages for breach of warranty and, alternatively, negligence. The defendants relied on clause 11, which stated that nothing in the agreement would make them liable for personal injuries to riders of the machines hired.

Mr Justice Parker entered judgment for the defendants. The Court of Appeal considered whether the clause covered the spare cycle and whether it excluded liability in negligence. It also considered whether the absence of a definite finding on negligence required a new trial.

1. Appeal allowed. The judgment below was set aside. A new trial was ordered on the issue of negligence. The appellant received the costs of the appeal, with costs of the first trial to be dealt with at the new trial.
2. Clause 11 applied to the spare cycle. The obligation to supply a spare cycle during repair, together with the agreement’s other provisions, meant that the substitute machine was also a machine hired.
3. The clause did not exclude liability in negligence. Lord Justice Singleton and Lord Justice Morris applied the approach in Rutter v Palmer and Alderslade v Hendon Laundry Ltd.: the liability apart from the clause must first be identified, and sufficiently clear words are required before negligence is excluded.
4. Lord Justice Denning explained that the defendants could be strictly liable in contract for supplying a defective machine, even without negligence. The clause therefore naturally operated on contractual liability, while leaving liability for negligence unaffected.
5. The contractual relationship did not prevent a concurrent tort claim. The defendants owed a duty of care to the rider, whether the rider was the hirer or his servant, applying the principle in Donoghue v Stevenson. The plaintiff was not required to frame his claim in contract.
6. The Court could not finally determine negligence because the trial judge had made no definite finding on it and the evidence was not available in a form permitting the Court to decide the issue. The issue was therefore remitted for a new trial.

• Court of Appeal: Allowed the appeal from the judgment of Mr Justice Parker, set aside the judgment for the defendants, and ordered a new trial on negligence.