Bethany Hardstaff v Fred Sherwood & Sons (Transport) Limited

A signed hire contract is not unenforceable merely because the hirer did not read or understand its terms or implications. A mistaken belief about entitlement to a vehicle does not, without more, negate an intention to create legal relations. Nor does the availability of a courtesy vehicle under the claimant’s own insurance policy make the hire contract unenforceable or allow the defendant to benefit from that alternative source of recovery. Where the hire company supplied the vehicle and the claimant was obliged to pay, consideration exists. An appellate court should not determine an unresolved factual issue in place of the trial judge, particularly where the argument was not pleaded or advanced below.

The claimant appealed from the Cardiff County Court judgment of District Judge Morgan dated 27 January 2022, which dismissed her claim for damages arising from a 2018 car accident insofar as it sought the cost of hiring a replacement vehicle. The appeal, permitted on one ground, concerned whether the hire contract was unenforceable because the claimant had not been given an explanation of her prospective liability, had alternative insurance cover providing a courtesy car, and believed that the courtesy car was what she was receiving.

The respondent additionally contended that there was no intention to create legal relations or no consideration, although those arguments had not been determined below.

1. Appeal allowed in part. The judge below was wrong in law to treat the hire contract as unenforceable. A person who signs a contract is not relieved from it merely because they did not read or understand its terms or implications. There was no evidence of misrepresentation by the hire company.
2. The availability of a courtesy vehicle under the claimant’s own insurance policy did not render the hire contract unenforceable. A defendant cannot benefit from the claimant having an alternative source of recovery under her own policy, applying the principle illustrated by Bee v Jenson [2007] EWCA Civ 923, at paragraph 11.
3. The respondent’s alternative arguments could not sustain the judgment. The lower judge had not decided that there was no intention to create legal relations or no consideration. A mistaken belief that the claimant was already entitled to the vehicle did not negate contractual intention when she signed the agreement. Further, the hire company was obliged to provide the vehicle and the claimant was obliged to pay, so there was consideration.
4. The appeal was limited to enforceability. The lower judge’s conclusion that the recoverable hire period was nine days was open on the evidence and was not challenged with permission to appeal. Judgment was therefore set aside on enforceability and the recoverable hire was limited to nine days, quantified at £1,491.47.

• High Court (Chancery Division): Appeal from the Cardiff County Court judgment of District Judge Morgan dated 27 January 2022. The appeal was allowed in part and the recoverable hire period was limited to nine days.
• Cardiff County Court: Claim for replacement-vehicle hire charges dismissed on the basis that the hire contract was unenforceable; the judge also concluded that no more than nine days’ hire was appropriate.