R v Warwickshire County Council, Ex parte Johnson (Johnson, Ex parte)

A price indication may become misleading when a consumer attempts to accept the continuing offer and the trader refuses to honour it. A single refusal may suffice, even though the indication was not misleading when displayed and there was no general intention or practice of dishonouring it.

Under section 20 of the Consumer Protection Act 1987, the words “any business of his” restrict liability to a person who owns the business or has a controlling interest in it. An employee acting solely in the employer’s business does not satisfy that requirement.

A branch manager displayed a notice promising to beat any competing television, hi-fi or video price by £20. He refused a consumer’s request to purchase a television on those terms. The magistrates dismissed an information under section 20(1) of the Consumer Protection Act 1987, although they considered that the manager had acted in the course of a business of his.

The Divisional Court allowed the prosecuting authority’s appeal, held the notice misleading and interpreted the statutory phrase as extending to an employee acting in the course of his employment. It imposed an absolute discharge. The House considered whether a facially accurate offer could become misleading through a single refusal to honour it and whether an employed branch manager acted in the course of “any business of his”.

1. The appeal was allowed unanimously and the conviction was quashed. Lord Roskill delivered the leading speech. Lord Griffiths, Lord Emslie, Lord Ackner and Lord Lowry agreed with his reasons and proposed order.

2. Per Lord Roskill, the first certified question was answered affirmatively. The notice constituted a continuing offer whose capacity to mislead could be tested when a consumer attempted to take it up. The consumer was misled by the notice when the appellant refused to beat the competing price by £20. Neither the notice’s apparent accuracy when displayed nor the absence of a general practice or intention to dishonour it prevented that refusal from making it misleading. A contrary construction would seriously restrict the effectiveness of the consumer-protection legislation.

3. The second certified question was answered negatively. The words “in the course of any business of his” in section 20 of the Consumer Protection Act 1987 mean a business which the defendant owns or in which the defendant has a controlling interest. An employed branch manager does not act in the course of a business of his merely because managing the employer’s branch is his occupation. Lord Roskill therefore differed from the Divisional Court.

4. Section 40(1) did not support the wider construction. Its natural word order connected “any business of his” with “some other person”. The incorporation of section 20(1) through section 39(5) also prevented the later occurrence of that phrase from being related to the person mentioned at the subsection’s beginning. In any event, the appellant had been charged under section 20(1), not section 40(1).

5. Applying Pepper v Hart, Lord Roskill considered the responsible Minister’s parliamentary statement because the legislation was ambiguous and its interpretation controversial. The statement confirmed that “of his” had deliberately been retained to direct proceedings against the corporate employer rather than individual employees. It was consistent with the construction reached from the statutory text.

6. The Divisional Court’s order was set aside, the conviction quashed and the cause remitted to the Queen’s Bench Division. The appellant’s appeal costs were ordered to be paid from central funds under section 17 of the Prosecution of Offences Act 1985.

1. House of Lords: The appeal was allowed unanimously. The Divisional Court’s order was set aside, the conviction quashed and the cause remitted to the Queen’s Bench Division.

2. Divisional Court of the Queen’s Bench Division: The prosecuting authority’s appeal was allowed. The notice was held misleading and the employed branch manager was held to have acted in the course of a business of his. The appellant received an absolute discharge and was ordered to pay the appeal costs.

3. Stratford-upon-Avon justices: The information under section 20(1) of the Consumer Protection Act 1987 was dismissed. The justices considered the notice not misleading, although they held that the appellant had acted in the course of a business of his.