White v John Warwick & Co [1953] EWCA Civ 2 (24 June 1953)

A newsagent was injured when the saddle of a hired bicycle, supplied as a replacement under a hire agreement, tilted forward causing him to fall. The Court of Appeal held that an exemption clause protecting against contractual liability did not extend to liability for negligence, establishing important principles on construing exemption clauses.

Facts

The Plaintiff, Mr Tom White, was a newsagent who entered into a hire agreement with the Defendants for a tradesman’s carrier cycle. Under Clause 2 of the agreement, the Defendants undertook to maintain the machines in working order and supply spare carriers when the hirer’s machines were being repaired. On 3rd June 1950, when the Plaintiff’s cycle required repair, the Defendants supplied a spare cycle. Shortly after the Plaintiff began riding it, the saddle tilted forward, throwing him off and causing injury to his knee resulting in synovitis and lasting stiffness.

The Agreement

The hire agreement contained Clause 11 which stated:

Nothing in this Agreement shall render the Defendants liable for any personal injuries to the riders of the machines hired nor for any third-party claims, nor loss of any goods, belonging to the Hirer, in the machines.

Issues

1. Whether Clause 11 applied to spare machines supplied in substitution for the hired machine, or only to machines originally hired.

2. Whether Clause 11, which exempted the Defendants from liability for personal injuries, protected them from claims based on negligence as well as breach of contract.

Arguments

For the Plaintiff

The Plaintiff argued that the exemption clause only applied to machines originally hired, not spare machines. Alternatively, even if the clause applied to spare machines, it only exempted the Defendants from liability for breach of contract, not from liability for negligence.

For the Defendants

The Defendants submitted that the spare machine fell within the meaning of ‘machines hired’ and that any negligence was in connection with the performance of the contract, such that Clause 11 provided complete protection.

Judgment

Lord Justice Singleton

His Lordship held that ‘machines hired’ in Clause 11 covered spare machines supplied under Clause 2. However, on the question of negligence, he applied the principles from Alderslade v Hendon Laundry Ltd:

where the head of damage in respect of which limitation of liability is sought to be imposed by such a clause is one which rests on negligence and nothing else, the clause must be construed as extending to that head of damage, because if it were not so construed it would lack subject-matter. Where, on the other hand, the head of damage may be based on some ground other than that of negligence, the general principle is that the clause must be confined to loss occurring through that other cause to the exclusion of loss arising through negligence.

Since the primary object of Clause 11 was to relieve the Defendants from liability for breach of contract or warranty, it should not be construed as absolving them from liability for negligence absent clear words to that effect.

Lord Justice Denning

His Lordship stated two well-settled principles:

The first is that if a person desires to exempt himself from a liability which the common law imposes on him, he can only do so by a contract freely and deliberately entered into by the injured party in words that are clear beyond the possibility of misunderstanding. The second is: If there are two possible heads of liability on the Defendant, one for negligence, and the other a strict liability, an exemption clause will be construed, so far as possible, as exempting the Defendant only from his strict liability and not as relieving him from his liability for negligence.

He held that the claim for negligence was founded in tort, not contract, and that the Plaintiff was entitled to frame his claim in tort to avoid the exemption clause.

Lord Justice Morris

His Lordship agreed, applying the principles from Rutter v Palmer:

In construing an exemption clause certain general rules may be applied: First the defendant is not exempted from liability for the negligence of his servants unless adequate words are used; secondly, the liability of the defendant apart from the exempting words must be ascertained; then the particular clause in question must be considered; and if the only liability of the party pleading the exemption is a liability for negligence, the clause will more readily operate to exempt him.

He concluded that Clause 11 was not clear enough to exempt from liability for negligence.

Implications

This case established important principles for the construction of exemption clauses. Where a defendant may be liable on multiple grounds (such as both contract and tort), an exemption clause will be construed narrowly to exempt only from the stricter contractual liability unless clear words extend to negligence. The case affirms that a claimant may elect to sue in tort rather than contract where both causes of action arise from the same facts, and an exemption clause covering contractual liability will not automatically bar the tortious claim.

Verdict: Appeal allowed. The judgment below was set aside and a new trial ordered on the issue of negligence. The Court held that the exemption clause protected the Defendants from liability for breach of contract but not from liability in negligence.

Source: White v John Warwick & Co [1953] EWCA Civ 2 (24 June 1953)