Royal Courts of Justice
Strand
London WC2
Tuesday, 24th June 2001
B e f o r e :
and
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v
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MR MALCOLM MORRIS the Appellant on his own behalf
MR AND MRS CROFT appeared in person.
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1. This is an appeal against a decision of Her Honour Judge Coates sitting at the Brighton County Court on 7th July 2000. Mr Malcolm Morris, the appellant, had appealed against a decision of District Judge Hammond sitting at the same court on 17th April 2000. Her Honour Judge Coates allowed his appeal in part but confirmed that part of the district judge's order which provided that the appellant should pay storage charges of over £3,000 to the respondents Beaconsfield Motors.
2. I refer briefly to the background to this most unfortunate dispute. In the Summer of 1977 the appellant delivered an Alvis motorcar to Beaconsfield Motors, the respondents, for welding work to be performed on it. He was quoted a price of £1,000. The work was completed in early 1998 but was not paid for. Beaconsfield Motors remained in possession of the car. The appellant asked the firm to obtain an MOT for the vehicle and the cost of the extra work was agreed at £600.
3. In the Spring and Summer of 1998 the appellant did pay sums towards those due for the work done. Moreover, in October 1998, Beaconsfield Motors accepted in part discharge of the debt owed to them a Jaguar motorcar which by agreement was valued at £425.
4. The respondents continued to attempt to contact the appellant but were unable to do so. On 11th March 1999, they took advantage of the remedy under the Tort (Interference with Goods) Act 1977, and they sent to the appellant a notice, which stated that on 30th June 1999 they proposed to sell the vehicle. The notice also provided:
The amount payable by you prior to service of this notice was £688.30 for repair work and £3,392 for storage charges. The storage charges are £8 per day and the said sum relates to 424 days as at 10th March 1999, continuing thereafter at the same daily rate.
This notice is given pursuant to the Torts (Interference with Goods) Act, 1977. Payment in full must be made or the sale will be effected accordingly.
5. The number plate on the vehicle was thought to have value in itself as a cherished number plate, and Beaconsfield Motors paid a sum of £105 to the revenue to retain it as one step towards protecting their lien and its value.
6. In August 1999 the appellant commenced proceedings seeking an order restraining the respondents from selling the car and for the car to be delivered up to him. The respondents counterclaimed for the outstanding repair costs, storage charges for the whole period when the car was with them, and £105, the costs involved with the number plate.
7. District Judge Hammond held that the respondents were entitled to the sums counterclaimed for the outstanding repair costs and retaining the number plate. He also held that from the date of the notice under the 1977 Act (that is from 11th March 1999) they were entitled to storage charges for the Alvis motorcar. The district judge also held that the appellant should have the opportunity to retrieve the car and number plate and made an order in these terms:
Judgment for the Defendant [that is Beaconsfield Motors]
(a) £623.30 in respect of outstanding costs of repairs
(b) £105.00 in respect of cost of retaining mark
(c) £3,216.00 damages in respect of storage charges from 11th March 1999 to date to be paid by the 29th May 2000.
If the judgment is not paid by that date
1. Alvis Car and Registration No 770-8VC to be sold at the best price reasonably obtainable.
2. Proceeds to be applied:
(i) towards costs of sale then
(ii) towards judgment debt then
(iii) paid into court to the credit of the Claimant.
8. In my judgment that was, subject to the issue of the storage charges now raised, an order which the learned deputy district judge was entitled to make and was a perfectly proper order in the circumstances.
9. Appealing to the circuit judge, the appellant contended that the respondents were not entitled to levy storage charges to protect their lien. He further made allegations in relation to the MOT, stating that Beaconsfield Motors had not given an accurate account of the matter. The registration was transferred in May 1999 and the car must have had an MOT and yet, submits the appellant, he was being asked to pay for an MOT.
10. The matter went before His Honour Judge Kennedy QC for directions and Judge Kennedy ordered that the claimant's appeal be listed for hearing before a circuit judge. He made other orders which were routine in the circumstances and also stated:
The claimant raises a point of law as to liability for storage charges on the basis that the goods were still purportedly [held] under a lien. Save for this issue the appeal is as to issues of fact and is therefore liable to be struck out at the hearing.
11. The appellant submits that Judge Coates, when she heard the appeal, took that as a direction from Judge Kennedy and declined to have regard to any matter other than the storage charges. There where other matters the appellant sought to raise.
12. Before the appeal was heard, Beaconsfield Motors sold the vehicle for £500 and arrangements have since been made with respect to the registration plate. For reasons I will give, it is not necessary to consider that matter in detail.
13. Beaconsfield Motors were entitled to sell the vehicle by virtue of the order of the district judge. A stay in relation to his order was not sought and Beaconsfield Motors cannot be criticised in any way, either for exercising the power conferred by the 1977 Act or for selling the vehicle following the order of the district judge.
14. The appellant now appeals to this court with permission of Henry LJ. The point is again taken on the storage charges. It is further alleged that the sale for £500 was not for the best possible price, and in his bundle of documents the appellant produces material in support of that. He submits that pursuant to the indication by Henry LJ and to errors which have occurred below, the whole matter should go back to the beginning and there should be a rehearing. He further seeks directions in relation to the Alvis motorcar. He seeks an order that the car be delivered up, the sale set aside and Beaconsfield Motors supply the name and address of the person to whom the car was sold.
15. Subject to the point on the storage charges, I see no merit whatever in the appellant's submissions. The district judge was the tribunal of fact in this case. I have indicated my view of the order he made. It is not open to this court to allow issues of fact to be raised, which were raised or could have been raised before the district judge. Moreover, it is not open to the court on this application to conduct an investigation into such matters as the sale of the vehicle, which was properly conducted following an order of the Court. It is not open to this Court in the present proceedings to investigate whether a reasonable price was obtained for the vehicle. I am certainly not encouraging such proceedings but any such claim would have to be the subject of different proceedings.
16. I see no merit in the criticism made of Judge Coates for dealing with the case as she did, subject to the point on the storage charges. Judge Kennedy did not, in my judgment, give a direction forbidding the judge hearing the appeal from considering any matters which that judge thought were relevant. The appellant says that at a subsequent hearing before His Honour Judge Kennedy QC, following the decision of Judge Coates, Judge Kennedy told him that the order which he had given, or had intended to give, on 4th May 2000 had not been correctly transcribed. The appellant also contends that Judge Coates treated it as a direction. I see no reference to that effect in her judgment. Moreover, both judges were aware that appeals from the Small Claims Court are only on points of law. I would have regarded it as most surprising had Judge Coates been prepared to reopen some of the matters which then and indeed subsequently the appellant has sought to reopen.
17. There remains the question of the storage charges. In relation to those, Judge Coates stated at the beginning of her judgment:
The appeal is brought today on the basis of whether or not, legally, it is right to order sums for storage to be part of the sums recovered by means of exercising of the lien and sale. Mr Morris has produced for me today Chitty on Contracts [1994] edition, p145, paragraph 32/064 which sets out the provisions in respect of a lien of a worker. What that says inter alia is that the lien covers the sum due for materials supplied and work performed on the chattel, but not charges for warehousing and storage even during the period of the lien. Therefore, to allow that effectively to happen, which is what has happened as the result of the judgment, I accept, is an appeal point and that would be wrong.
18. Nevertheless, having given that indication, the learned judge stated at page 2F:
That is not an end of the matter, and I make it perfectly clear, because they still have a judgment for £3,392 storage charges, which they can pursue against Mr Morris and no doubt they will. That has not gone out of the window.
19. The sum appears not to be quite right in the order of the district judge which was for a slightly lower sum, but in the event that is not material. The order of the circuit judge reflected the statement at page 2F of her judgment, to which I have referred.
20. The appellant makes a second appeal to this Court. Such appeals rarely now happen having regard to the contents of the CPR. However, Henry LJ, following an oral hearing on 5th April 2001, granted permission to appeal. Henry LJ referred to the question of the storage charges and to the references in Chitty on Contracts and Halsbury's Laws of England in relation to whether a person enforcing a lien can charge for storage of the property held. Henry LJ stated:
It is clear that, not only is this a second tier appeal, but it is also an appeal from the Small Claims Court, where the right to appeal is limited, for relevant purposes, to points of law. This does seem to me to be a point of law which there are compelling reasons to hear, because it seems at first blush as though the courts below might have been wrong about it.
For those reasons, therefore, I give Mr Morris permission to appeal. I am not intending to limit that permission in any way: that is to say, Mr Morris should be entitled to pursue his appeal as it was made to the district judge. That was a document that Mr Morris could not refer me to today; hence I have expressed my judgment in the way that I have.
21. It seems to me the expression "to the district judge" was intended to be to the circuit judge or from the district judge. I read that statement as no more than an indication by Henry LJ that he was giving permission to appeal generally. That is a course sometimes followed when leave is granted on a legal point because it is not always obvious to the judge granting it what implications the grant may have upon other parts of the case. The appellant relies on that statement of Henry LJ in support of the submission that he should be allowed to go back to the beginning, that is in this action to assert, for example, ownership of the vehicle. I cannot read the indication in that way.
22. In any event it is for the Court now hearing the appeal to consider the scope of the appeal and accepting that permission to leave has been given generally, what matters it is appropriate for the Court to consider. I have already stated that in my judgment the only matter which can properly be considered by this Court, in the circumstances of this case, is the legal point arising from the storage charges which have been imposed in the courts below.
23. Mr Morris has appeared in person before this Court. Exceptionally, the Court has permitted Mr Croft Senior, if I may so describe him, and Mrs Croft to address the Court. The application that they should address the Court was made on the basis that their son and his associate or partner Mr Keith Thompson, who run Beaconsfield Motors "will not be able to attend the appeal because they cannot afford another day's loss of earnings". It is exceptional to allow someone else, even a father and mother of a litigant, to appear for a litigant in person. We have done so in this case because of the exceptional nature of it, the fact that it is a second appeal, and understanding as we do when a comparatively small amount of money is involved the difficulties of Mr Croft and Mr Thompson themselves. Moreover, the bundle of documents which Mr and Mrs Croft relied on, have been prepared by or under the supervision of their son, Mr Richard Croft, and they have addressed the Court on the basis of that bundle.
24. It is right to say that much of the contents of the bundle are not in my view properly admissible upon the hearing of the appeal. What applies to the appellant also applies to them. This is not a case where the Court can reopen issues of fact or where the Court can itself conduct enquiries into the somewhat complex course which this case and the courts underlying it have taken. What Mr Justice Rimer and I have put plainly to Mr Croft is the difficulty which we see in resisting this appeal on the legal point, that it is a general principle of law that a worker asserting a right to a lien is not generally able to charge for storage of the article upon which the lien is asserted. It is put in this way in the current edition of Chitty on Contracts, Volume 2, 28th Edition, paragraph 33087 dealing with a workers lien:
Where a worker is to be paid for work done on a chattel bailed to him, he has at common law, after completion of the work a lien on the chattel for the remuneration due to him; hence he may refuse to return the chattel until he is paid. An express or implied term of the contract, especially one relating to credit, may, however, exclude such a lien. The lien covers the sum due for materials supplied and work performed on the chattel but not charges for warehousing or storage even during the period of the lien. There is no lien in common law for the maintenance of the chattel in its original condition without improvement. The lien is lost by waiver or by the worker relinquishing possession of the chattel but the mere taking of security for the debt does not discharge the lien unless it is inconsistent with the existence of the lien.
25. The sentence referring to charges for storage is supported by reference to Somes v. British Empire Shipping Company Limited (1860) 8 H.L. Cas. 338. The note in Chitty provides that Somes was distinguished by the House of Lords in China Pacific SA v. Food Corporation of India [1982] AC 939. In his speech in the House of Lords in that case, Lord Diplock stated at page 962:
My Lords, the extent to which any possessory lien that a salvor would be entitled to exercise at common law is capable of surviving or is modified by provision of clauses 4 and 5 of Lloyds Open Form raises difficult and hitherto undecided questions of law into which in my view it is not necessary for the House to enter in the instant case, and it would be unwise for your Lordships to attempt to do so. The only reason why the cargo owner upon the failure of its main propositions sought by the subsidiary proposition to reach some tabula in naufragio juiciobile was in order to avail itself of the principle which it contended was laid down by this House in Somes v. Directors of British Empire Shipping Company, to the effect that where a person entitled to a possessory lien over goods incurs expenses in maintaining possession of them, in the exercise of his right of lien, and preserving in the meantime their value as security for the owner's indebtedness to him, he cannot recover such expenses from the owner. That case is in my view authority for the proposition that where a lienee remains in possession of goods in the exercise of his right of lien only, (ie one who has refused a demand by the lienor for redelivery of the goods with which, in the absence of the lien, the lienee would be under a legal obligation to comply) he cannot recover from the lienor loss or expenses incurred by him exclusively for his own benefit in maintaining his security as lienee and from which the lienor derives no benefit as owner of the goods. I would not seek to suggest that this authority has become outdated for the proposition that it was then laid down, but I would deny that it is authority for anything more, and in particular for the further proposition that expenditure necessary for the preservation of the goods from deterioration upon which the owner does derive benefit is irrecoverable, where such expenditure is made by the bailee at that time before possession of the goods has been demanded of him by the owner and his only right to retain lawful possession of them thereafter rests upon his own election to continue in possession after such demand in the exercise of the rights of that lienee.
26. The difficulty faced by the respondents is that everybody, it seems to me, at all stages has worked on the basis that Beaconsfield Motors were exercising a right of lien. The district judge approached the question in that way. It was not suggested in his judgment that there was some collateral arrangement here whereby storage could be charged under contract and the 1977 act notice does not create a contrast.
27. Mr Croft has confirmed this morning that it was a right of lien that was being exercised. We would not be able to take a different view in favour of the respondents in view of the contents of the handwritten statement in their bundle. That does confirm, in my view, that it was a right of lien which the respondents were purporting to exercise at the relevant time by retaining the vehicle. It is not a case where from the facts and from the findings of the district judge it can, in my view, be said that any of the other considerations which Lord Diplock had in mind in China Pacific operated in this case.
28. The stronger charge is different from the question of the expenditure to preserve the valuable number plate. It appears to me that, because it was to the eventual benefit of the lienor, the expenditure of £105 was justified as a way of preserving the asset and the appellant would have been obliged to give credit for that sum. Whether in the event he has given credit for it on the subsequent dealings between the parties, I do not make any ruling and it is not material to do so.
29. I have not understood why Her Honour Judge Coates having, as it seems to me correctly, stated the law as to storage charges when a lien is in force, nevertheless in the later part of her judgment ordered that the storage charge was payable. Upon the facts found by the district judge and upon the way the respondents' case has been put, it appears to me that the general principle stated in Chitty must apply in this case, and that the order for storage charge cannot stand.
30. In his witness statement, I note that Mr Croft Junior refers to it as a grey area. His father and mother very strongly the point to the Court that garages cannot be expected to retain vehicles which take up valuable space on their premises indefinitely and should, they submit, be entitled to make storage charges.
31. Beaconsfield Motors exercised their right under the 1997 Act. It is a difficult position for someone holding a lien when the space the property takes up is, in relation to the value of the property, considerable, and no doubt garages and others in their position must bear that in mind. The right to exercise a lien has less value when the eventual sale of the goods following appropriate procedures may not be considerable, as in this case.
32. I well understand the feelings of Mr Croft, of Beaconsfield Motors, and his parents, about the current situation. It appears to me that they have had difficulties with the appellant but I do not regard it as the function of this Court, for the reasons I have given, to give any rulings about that. When they did understand, as the Court indicated to them, that none of Mr Morris's other points were to be given weight by the Court and what was in the Court's view in issue was the storage charge, the immediate reaction was that" we wouldn't have probably been able to get it from him anyway". I do not know whether that is right or not, but this appeal must be allowed to the extent that the storage charge of £3,216 ordered by the district judge must be set aside.
33. In other respects the judgment stands.
34. I agree with the judgment my Lord has delivered. In the light of the law relating to the entitlement to a lien in respect of storage charges, which my Lord has explained, it is easy to see why Her Honour Judge Coates came to the conclusion that the deputy district judge's decision should be reversed to the extent that it gave the defendants a lien in respect of their costs for storage.
35. What is more difficult to understand is why the judge nevertheless left unreversed the judgment in favour of the defendants for those storage costs, a judgment in the sum of something over £3,000. There was no contractual obligation on the part of Mr Morris to pay any such storage charges, or at any rate the deputy district judge made no finding to that effect, and the original judgment for the storage charges cannot have been based on a claim based on trespass since the defendants were asserting a lien over the car in respect of their repair costs.
36. Accordingly, for the reasons given by my Lord, I agree that to the extent that the learned judge left in place the judgment for storage charges, she was in error and I too would allow the appeal.
Appeal allowed