Robertson v Swift [2014] UKSC 50

Dr Robertson cancelled a home-removal contract after paying a deposit. The Supreme Court held that a trader's failure to give written notice of the right to cancel under the 2008 Regulations did not deprive the consumer of that right, allowing recovery of the deposit.

Facts

Dr Robertson, the appellant, sought a quotation from Mr Swift, a removals contractor, for moving his belongings from Weybridge to Exmouth. Following a telephone call on 27 July 2011 and a visit by Mr Swift to Dr Robertson’s home the next day, the parties agreed a price of £5,750 plus insurance and VAT (totalling £7,595.40). Mr Swift emailed a removal acceptance document and standard conditions, which included graduated cancellation charges. On a second visit that evening, Dr Robertson signed the acceptance document and paid a £1,000 deposit.

After further inquiries, Dr Robertson found a cheaper firm and, on 30 July, telephoned Mr Swift to cancel. He confirmed cancellation by letter posted on 1 August 2011 (which Mr Swift said he never received). Mr Swift claimed cancellation charges; Dr Robertson counterclaimed for the return of his deposit, relying on the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc Regulations 2008.

The Deputy District Judge and, on first appeal, HHJ Tyzack QC held the Regulations did not apply because the contract was not concluded on a single visit. The Court of Appeal held the Regulations did apply but, since Mr Swift had not served written notice of the right to cancel, the cancellation period had not begun and Dr Robertson could not cancel; therefore the deposit was irrecoverable, though the cancellation charges were unenforceable.

Issues

The central issue before the Supreme Court was whether a consumer’s right to cancel under regulation 7(1) of the 2008 Regulations was contingent on the trader having first given written notice of the right to cancel under regulation 7(2), such that, in the absence of such notice, no cancellation period had commenced and the consumer could not cancel or recover any deposit paid.

Arguments

Appellant (Dr Robertson)

Dr Robertson argued that the Regulations, read in light of Council Directive 85/577/EEC, entitled him to cancel the contract and recover his deposit notwithstanding Mr Swift’s failure to give written notice of the right to cancel. To hold otherwise would defeat the consumer-protection purpose of the Directive.

Respondent (Mr Swift)

Mr Swift submitted that the result was absurd because Dr Robertson had invited him to his home, he had turned away other work, and Dr Robertson (an intelligent negotiator) had cancelled at one day’s notice. He implicitly relied on the Court of Appeal’s reasoning that, without written notice, no cancellation period had run and cancellation was not possible.

Intervener (Office of Fair Trading)

Ms Ford proposed two purposive readings of the Regulations: (i) reading “within” in regulations 7(1) and 8(1) as “at any time prior to the expiration of” the cancellation period, which would not expire if no notice were served; or (ii) reinterpreting the definition of “cancellation period” in regulation 2(1) so it commenced when the trader was required to give notice, expiring 7 days after receipt of the notice.

Judgment

Lord Kerr (with whom Lady Hale, Lord Wilson, Lord Carnwath and Lord Hodge agreed) allowed the appeal.

Scope of the Regulations

The Court endorsed Jackson LJ’s conclusion that regulation 5(a) applies whenever the contract is concluded at the consumer’s home, whether or not earlier negotiations occurred there. Making protection depend on whether negotiations were confined to a single visit would be inconsistent with the intended breadth of the Regulations. The Court also confirmed that the Regulations were not ultra vires, given that article 8 of the Directive permits Member States to adopt more favourable consumer-protection measures.

Interpretative approach

The Court reiterated the well-settled principle, following Schulte v Deutsche Bausparkasse Badenia AG and Vodafone 2 v HMRC, that domestic implementing legislation must be construed, so far as possible, in light of the wording and purpose of the Directive. This obligation is broad and far-reaching and permits departure from a strict literal reading, provided the construction goes with the grain of the legislation.

Purpose of the Directive and centrality of the right to cancel

Drawing on Martín Martín v EDP Editores SL, Heininger, E Friz GmbH v von der Heyden and Schulte, the Court held that the requirement to give written notice of the right to cancel is not a technical precondition to the existence of the right but a means of ensuring the consumer knows of it. Where no notice is given, the CJEU has held that the seven-day period does not begin to run and the consumer can exercise the right of cancellation at any time. Article 4 of the Directive requires Member States to adopt appropriate measures so that traders who fail to inform consumers bear the consequences of that failure.

Purposive construction of the Regulations

Applying the principle in R (Quintavalle) v Secretary of State for Health, the Court adopted a purposive construction. Of the two constructions proposed by the intervener, the Court preferred reading “within” in regulations 7(1) and 8(1) as “at any time prior to the expiration of” the cancellation period. Where no notice of cancellation rights has been given, the cancellation period does not expire and the consumer can cancel at any time. This reading is a simple and tenable reading of the actual wording and achieves conformity with the Directive.

Outcome

Dr Robertson was entitled to cancel by his letter of 1 August 2011, and by virtue of regulation 8(5) it was immaterial that Mr Swift did not receive it. He was accordingly entitled to recover his £1,000 deposit under regulation 10(1). The appeal was allowed.

Implications

The decision confirms that under the 2008 Regulations a consumer’s right to cancel a contract concluded during a trader’s visit to the consumer’s home is not defeated by the trader’s failure to give the required written notice of that right. On the contrary, that failure leaves the cancellation period open indefinitely, enabling the consumer to cancel at any time and recover sums paid.

The judgment illustrates the strength of the interpretative obligation on national courts to give effect to the purpose of an EU directive, even where that requires reading statutory language more expansively than a strict literal reading might allow. It also confirms that the Regulations apply irrespective of whether contract negotiations extended over more than one visit, and irrespective of whether the visit was solicited by the consumer — Parliament having deliberately chosen a consistent approach to solicited and unsolicited visits, as noted in the Explanatory Memorandum.

Practically, the case is important to traders who conduct business at consumers’ homes: failure to give written notice of the right to cancel not only renders any cancellation charge unenforceable but also exposes the trader to the consumer withdrawing at any point and recovering the deposit in full. For consumers, it reinforces the cooling-off protection as a substantive safety net rather than a formality dependent on the trader’s compliance. The Court’s approach is grounded in the specific wording and purpose of the 2008 Regulations and the underlying Directive, and the decision should be read in that context.

Verdict: Appeal allowed. Dr Robertson was entitled to cancel the contract by his letter of 1 August 2011 and to recover his deposit of £1,000.

Source: Robertson v Swift [2014] UKSC 50