Warwickshire County Council v Johnson

The House of Lords allowed the appeal and quashed the conviction under section 20(1) of the Consumer Protection Act 1987. The court held (1) a price indication which is not misleading on its face can become misleading if the person who gives it later refuses to honour it when a consumer attempts to take up the offer (section 20(1)); and (2) the phrase "in the course of any business of his" in sections 20(1) and 20(2)(a) must be read as referring to a business of which the defendant is the owner or in which he has a controlling interest, so that an employed branch manager who acts contrary to employer policy is not prosecutable under those subsections as the primary offender. The court relied on statutory construction, the policy and drafting of the Act (including sections 39, 40 and 45), and permitted reference to parliamentary material within the limits established in Pepper v Hart to resolve ambiguity about Parliament's intention.

The appellant was a branch manager at a Dixon's store who displayed a notice offering to "beat any TV, Hi-Fi and Video price by 20 on the spot". A customer found an identical set elsewhere in the town at 159.95, sought to buy from Dixon's at 139.95 and was refused. The local authority prosecuted under section 20(1) of the Consumer Protection Act 1987. At first instance the justices dismissed the information. A case to state was made and the Divisional Court allowed the prosecution, holding the notice was misleading because it was not honoured and that the manager was acting "in the course of any business of his".

The appellant appealed to the House of Lords. Two legal questions were certified: (1) whether a statement not misleading on its face can become misleading if it is not honoured on a particular occasion; and (2) whether an employed branch manager can be guilty "in the course of any business of his" under section 20(2)(a). The appellant also invited the Lords to consider ministerial statements made during passage of the Bill (invoking the reasoning in Pepper v Hart) to resolve any ambiguity.

The court answered the first question affirmatively: the notice could be tested only when taken up and it became misleading when the appellant refused to honour it. On the second question the court rejected the Divisional Court's broader construction. After analysing sections 20, 39, 40 and 45, and considering the parliamentary debate referred to by the appellant, the Lords concluded that the wording "of his" was intended to direct proceedings primarily against employers or those having a controlling interest in the business, not ordinary employees acting within their employment. The court thus allowed the appeal, quashed the conviction, ordered costs to be paid from central funds and remitted the cause to the Queen's Bench Division to act consistently with the judgment.

Appeal allowed. The House of Lords held that (1) a price indication not misleading on its face may become misleading if the maker later refuses to honour it when a consumer attempts to accept it (answer to first certified question: yes); and (2) the phrase "in the course of any business of his" in sections 20(1) and 20(2)(a) of the Consumer Protection Act 1987 refers to a business of which the defendant is the owner or has a controlling interest, so an employed branch manager is not the primary offender under those subsections (answer to second certified question: no). The conviction was quashed and the matter remitted to the Queen's Bench Division.