Scottish High Court of Justiciary Decisons

LORD JUSTICE-CLERK (Wheatley).—The respondents were charged with an offence under section 1 (1) (a) and (b) of the Trade Descriptions Act, 1968.

They are a long-established firm of auctioneers and valuers, mainly of livestock and farm implements. On 15th July 1972 they held an auction sale of motor cars, and this was the only auction sale of this kind which they have ever held. In the course of this auction a sale was effected of a car which, like all the other cars exposed for sale at the auction, had a card affixed to the windscreen giving certain particulars of it. These particulars consisted of the make, year of manufacture, registration number, the period for which it was licensed and the period covered by the current M.O.T. test. There was also included the description "Good Condition." There is a finding in fact that this description was false to a material extent, and it was this false description which was the basis of the charge. The Sheriff held that, while in the circumstances found proved the respondents had applied a false description to the motor car in terms of section 1 (1) (a) of the Act, they had not supplied the car in terms of section 1 (1) (b). Despite his finding on section 1 (1) (a) he acquitted the respondents, holding that they had established the defence provided for in section 24 (1). Against that acquittal the Crown has now appealed. The learned Advocate-depute did not challenge the Sheriff's decision quoad section 1 (1) (b) and so far as section 24 (1) is concerned he accepted that under paragraph (a) it had been established that the commission of the offence was due to reliance on information supplied to them by the owner of the car. Even when that part of the statutory defence is established, however, the respondents must also prove that they took all reasonable precautions and exercised all due diligence to avoid the commission of the offence. The Sheriff found that this part of the defence had also been established, and it is this finding which is the sole issue in the appeal.

The material facts bearing on this point can be shortly stated. This was the first auction of motor cars to be held by the respondents. Their managing director gave instructions that no information was to be given as to the condition of the cars in the sale. Despite this, a clerkess in the office put a description of the car on all the cards affixed to cars in the sale, and the offending description was affixed to the car in question. The respondents employed no motor mechanic to test the condition of the cars, and no mechanical or other test was made. One of their qualified auctioneers who conducted the auction sale checked the particulars from the registration book and looked at the M.O.T. certificate of this particular car. He looked at the car externally and saw that it was bright and shiny-looking. He assumed that, as an M.O.T. certificate had just been issued, the car was in a road- worth condition. I pause to observe that this was an unwarranted assumption, since the M.O.T. test only covers a limited number of checks and in this case these did not extend to the defects libelled and held to be proved.

The learned Advocate-depute submitted that, while the respondents had applied the false trade description to the car, there was no obligation on them to supply any description as to its condition. If, however, they chose to supply a description, it was their duty to take all reasonable precautions and exercise all due diligence to avoid a false trade description being given. So far as the description of the car was concerned, this was a description of a technical matter outwith the normal competence and experience of the respondents and in these circumstances they should not have applied it at all, or, if they were going to apply a description, they should have had the car tested by a competent mechanic, to ensure that the description given was accurate and not false. Moreover, the managing director had not done all that might have been reasonably expected of him. He obviously recognised that the respondents were not in a position to apply a description to the car's condition, since he instructed that no description of any of the cars in the sale should be given. The fact that his instructions were not carried out did not absolve him from further responsibility, since this was the respondents' first venture in a car auction sale, in respect of which he was setting up a new system for the conduct of such a sale, and it was accordingly his duty to see that his instructions were carried out before the sale began. His failure to do so indicated a failure to take all reasonable precautions and exercise all due diligence to avoid a false trade description being applied to the ear. Counsel for the respondents in his submissions in effect relied on the reasons given by the Sheriff for finding the defence under section 24 (1) established, and, as I propose to examine these, I do not require to rehearse counsel's arguments. I should point out, however, that Mr Cameron expressly started that in the circumstances here present he could not invoke the decision and opinions in Tesco Supermarkets Ltd v. Nattrass to exclude responsibility on the respondents by reason of the action of their employees.

The Sheriff states that in his opinion the respondents took all reasonable precautions. His reason for coming to this conclusion is that the details about the car were checked from the registration book and the M.O.T. certificate. I pause to observe that these had nothing to do with the false trade description applied to the car. He then proceeds to point out that the auctioneer looked at the car and saw that it was shiny and appeared externally to be in good condition. This may or may not be a proper way of testing livestock, but it is not the proper way of testing the condition of a motor car if no other test is made. He goes on to say that the only other precaution the respondents could have taken was to have the car examined by a qualified mechanic, but he considered that, in view of the number of cars in the auction sale and the short time available, it was unreasonable to expect them to do this. This is not a finding in fact. It is an opinion or an inference from the facts. In my view it is not warranted. The respondents were engaging for the first time in a venture in which they had no experience. They were under no obligation to give any description of the condition of the car, but, if they elected to do so, they should have taken some reasonable steps to see that their description was warranted. In my opinion what they did was wholly inadequate. If the number of cars and the time factor made a proper examination impossible, although these factors were within their own control, then they should not have given a trade description at all. I cannot agree that in the circumstances they took all reasonable precautions.

That in itself is sufficient to dispose of the statutory defence. The Sheriff proceeds, however, to find that there was no failure in due diligence to avoid the commission of the offence. He states that, while the managing director failed to exercise due diligence by failing to ensure that his instructions that no description of the cars should be given were carried out, this was not a failure in due diligence to avoid the commission of the offence. In the circumstances I think that that is just what it was. Presumably the instructions were given by him because he knew that the respondents were not in a position to give such a description, and (in the absence of any Tesco argument) his failure to see that his instructions were carried out was a failure in due diligence to see that what he knew would be an offence was not committed. Strangely enough, the Sheriff expresses the view that the managing director's failure to see that the description was omitted and his failure to see that his instructions were carried out are irrelevant considerations. I must respectfully differ from him. Finally he opines that while it would have been a precaution to provide no description at all, that would not have been a reasonable precaution. Again I have to differ from him. In view of the respondents' inability to warrant a description of the car's condition, it was an obvious precaution, and the one which the managing director intended to take, but one which in fact was not taken.

I am accordingly of the opinion that the Sheriff erred in holding that the statutory defence under section 24 (1) was established. That being so, there was a contravention of section 1 (1) (a), and the respondents should have been convicted of it.

I therefore move your Lordships to answer questions (2) and (3) in the negative, and to remit the case back to the Sheriff with an instruction to convict of the charge under section 1 (1) (a).

LORD MILLIGAN .—I agree.

LORD KISSEN .—I also agree.