New South Wales Supreme Court CITATION : Hall v Sawkins [2000] NSWSC 441 CURRENT JURISDICTION: Common Law Division FILE NUMBER(S) : SC 10546/2000 HEARING DATE(S) : 17 April, 8 May 2000 JUDGMENT DATE : 11 May 2000 PARTIES : Scott Andrew Hall v Graeme Edward Sawkins JUDGMENT OF : O'Keefe J LOWER COURT Local Court JURISDICTION : LOWER COURT 1761/97 FILE NUMBER(S) : LOWER COURT R Clugston JUDICIAL OFFICER : COUNSEL : D. Williams - For Plaintiff A. Green - For Defendant Solicitors for the Plaintiff Messrs Thomson Bentley & Partners BANKSTOWN NSW SOLICITORS : Solicitors for the Defendant Bruce & Stewart Commercial Practice Sydney NSW CATCHWORDS : Contract - Proforma Agreement - Terms and conditions to be incorporated - Small print - Insurance - Damage waiver - Unawareness of contracting party - Construction of agreement LEGISLATION CITED : Local Court (Civil Claims) Act (1970) L'Estrange v Graucob Ltd (1934) 2 KB 394 CASES CITED : Smith v South Wales Switch Gear Co Ltd (1978) 1 WLR 165 Lief Investments Pty Limited v Conagra International Fertiliser Co (Butterworths, Unreported Judgments 16 July 1998) British Crane Hire Corporation Limited v Ipswich Plant Hire Limited (1975) 1 QB 303 DECISION : Question in Stated Case answered in the affirmative; Proceedings uplifted from Local Court to the extent applicable to plaintiff; Determination of Magistrate quashed; Proceedings against plaintiff dismissed; Defendant to pay costs, except those the subject of previous orders and in relation to application for stay. THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION O'KEEFE J THURSDAY 11 MAY 2000 010546/00 - SCOTT ANDREW HALL v GRAEME EDWARD SAWKINS T/AS AVIS NOWRA JUDGMENT 1 HIS HONOUR: Before the Court is a case stated pursuant to s 69 of the Local Court (Civil Claims) Act (1970) by a Magistrate sitting in the Local Court at Bankstown. The case arises out of a judgment given by the Magistrate against Scott Andrew Hall (the plaintiff) for $13,074.87 plus interest and costs. 2 The factual circumstance giving rise to the case indicates a most unfortunate beginning for the plaintiff's marital life. On 9 December 1995 the plaintiff attended at the Bowral office of Avis Nowra for the purposes of hiring a wedding car. On that day a contract was entered into by him for the hire of the vehicle but unfortunately whilst it was away from the offices of the defendant (who traded as Avis Nowra)and whilst being driven by a person other than the hirer, it overturned and was damaged. As a consequence it was not returned in the condition in which it had been hired and the cost of repairs amounted to $11,606.58. 3 The issue in the case concerns the terms and conditions on which the vehicle was hired, it being the contention of the defendant in these proceedings, as the successful party before the Magistrate, that they included terms that only the renter or an authorised driver would drive the vehicle and that the vehicle would be returned to the defendant at the place, date and time shown in certain boxes on the rental agreement in the same condition as it was at the commencement of the rental, fair wear and tear excepted. 4 When he attended at the office of Avis in Bowral the plaintiff signed a document which contained details relating to the plaintiff, the vehicle, the date of hire, the date of anticipated return, various costs and charges that would be levied and the details concerning any authorised person other than the hirer. No such person was named in that document. 5 At the bottom of the document there is a notation: "Important: Refer to terms on rental jacket"; and in the body of the document immediately above the place reserved for the renter's signature was the following: Agreement: By signing below, I agree to be bound by : (1) the terms of this Rental Document; (2) the terms and conditions set out in the RENTAL Jacket and headed Terms and Conditions of Rental Agreement; and (3) the terms and conditions relating to the personal property, insurance entered in boxes 55A and 55B, if accepted by me". 6 Immediately below this appears the signature of the renter, the plaintiff in this action. 7 The facts as found by the Magistrate were that no rental jacket was handed to the plaintiff by the defendant, its servants or agents and that as a consequence he was unaware of the terms included in that document. 8 If, however, that document is incorporated into the contract then the fact that the plaintiff did not make himself aware of those terms would be no answer to the claim made against him. 9 Included on the rental jacket are terms that only the renter or an authorised driver is permitted to drive the vehicle (clause 3) and concerning the return of the vehicle and its condition on return (clause 5.1A and B). That document, commences with the heading "Terms and Conditions of Rental Agreement" and then a subheading "Interpretation," under which appears the following: "1. "The Rental Agreement ( " Agreement ") between Avis and Renter made on the date set out in box 35 comprises: (a) these terms and conditions as set out in this rental jacket handed to Renter with the rental document ( " document " ) signed by Renter; and (b) the Rental Document". 10 There are other provisions in this clause that are not relevant to the determination of the matter presently before the Court. 11 Returning to the document signed by the plaintiff, it is my view that the reference at the foot of the document; namely, "Important: Refer to terms on rental jacket" must be understood in the light of the document as a whole including that part of the agreement which immediately precedes the renter's signature. So understood notation to which I have just referred is, in my opinion, included in the document to draw to the attention of the renter that there are terms of which he or she should be aware and if one then relates that to the body of the document, the rental jacket that is being referred to in that notation is, "the Rental Jacket headed Terms and Conditions of Rental Agreement" referred to in that part of the body of the document which I have set out above. 12 Reading that document one would first get the impression that the use of the definite article 'the' in relation to "Rental Jacket headed Terms and Conditions of Rental Agreement" was deliberate and intended to draw to the attention of the hirer that on a particular rental jacket there were terms and conditions that form part of the terms and conditions of the contract. 13 The fact that the definite article is used to my mind conveys that one would read that term as referring to that particular rental jacket which was handed to the hirer at the time the contract was entered into. Those terms or some of them may be relevant, depending upon other matters included in the form signed by the plaintiff in each particular case. They may be relevant to loss damage waiver, personal accident, personal effects and baggage loss and responsibility for the vehicle and its condition on return. 14 I instance these because in the body of that document boxes 51A (LDW) loss damage waiver, 51B (PEB) personal effects and baggage insurance, and 51C (RAW) responsibility amount waiver are all specifically included. The plaintiff in this case paid extra money for a loss damage waiver and a further sum for responsibility amount waiver. 15 When he did not receive any rental jacket it is entirely understandable that he would not regard that as unusual since, if he adverted to it at all, it may have contained terms relevant to a situation not material to the particular hiring he was entering into. However, as a matter of construction I am of the view that the references to "the rental jacket" in the body of the document are intended to be particular and specific and to indicate that those terms which are included in any document responding to that description which is handed to the hirer at the time of hiring will form part of the contract. 16 This view of the contract is supported by the form of the contract contended for by the defendant in these proceedings. 17 The contract contended for by the defendant is one which includes the terms set out on their standard form of rental jacket; clause 1A of which provides: "The rental agreement between Avis and renter...comprises: These terms and conditions as set out on this rental jacket handed to renter with the rental document". 18 The contract asserted by the defendant in this case thus adopts the construction which I have placed upon the principal document. The use of the specific demonstrative pronoun "this" in the above provision and "this" being qualified or to be understood as the rental jacket handed to the renter with the rental document is confirmatory of such construction. 19 In the circumstances of this case the contract between the plaintiff and the defendant was constituted by the document which is Exhibit B in these proceedings; namely, the form that I have first referred to and did not include the terms on any standard form of Avis rental jacket. 20 Mr Green, on behalf of the defendant, has argued that I should construe the contract as including terms on a rental jacket that was never handed to the plaintiff but on the very contract advanced by the defendant this is not so. 21 In support of his argument he relies upon the well-known case of L'Estrange v Graucob Ltd (1934) 2KB 394(the small print case). The case has commonly been referred to in that way over the years because the unsuccessful party in it complained that she was not bound by terms which were in very small print and which as a consequence she did not read (supra at 399). It was a case, however, in which the terms were clearly included in the document obtained by the unsuccessful party and signed by her. They included a term, albeit in small print, as follows: "Any express or implied condition, statement, or warranty, statutory or otherwise not stated herein will here be excluded". 22 There was no doubt in that case, according to their Lordships in the Court of Appeal, that the unsuccessful party had "assented to the writing constituting the agreement between the parties" and in those circumstances "in the absence of fraud (it was) immaterial that the defendant had not read the agreement and did not know its content (at 40 per Strutton LJ). To the same effect is the judgment of Maugham LJ(supra at 407). 23 Smith v South Wales Switch Gear Co Ltd (1978) 1WLR 165, is another case relied upon by the defendant. The contract in that case included a condition as follows: "Subject to our general conditions of contract obtainable on request". These conditions were neither requested nor provided. 24 In determining the matter the House of Lords held that, although over a period of time there had been more than one set of general conditions of contract, the set current at the time of the contract was the one incorporated into the contract by the expressed term to which I have referred. It does not seem to me that those two cases advance the cause of the defendant. 25 Reliance was also placed on Lief Investment Pty Limited v Conagra International Fertiliser Co Butterworths Unreported Judgments 16 July 1998. In that case the issue was not whether terms had been incorporated by reference, but rather that where there was doubt as to the terms so incorporated, the Court should do its best to identify the terms that were intended. In reaching this conclusion Sheller JA, with whom Mason P and Beazley JA agreed, relied upon Smith v South Wales Switch Gear Co Limited (supra)and made it clear that the question involved in the case was not whether there were terms incorporated into the contract but rather as to the identification and content of those terms. That is different from the present case. 26 In British Crane Hire Corporation Limited v Ipswich Plant Hire Limited (1975) 1QB 303 the Court of Appeal dealt with a matter involving terms to be implied in a contract concerned with the hire of a large piece of excavating equipment known as a dragline, which had sunk into a swamp on two occasions; once because of negligence on the part of the owner's employees; once because of a failure on the part of the hirer's employees to observe proper standards of care. 27 In that case, in the absence of any specific conditions, the Court of Appeal (Denning MR) said: "It is the hirer's job to get it (the equipment) back on the road and restore it at the end of the hiring". 28 Sir Eric Sachs took a like view (supra at 312) when he said: "It seems to me that someone who hires a chattle is under an obligation to return that article to the owner unless he shows good cause for not returning it. What is good cause must depend on the particular facts of the case and must involve questions of degree". 29 That case was determined in the absence of there being any particular terms relating to the hire or the condition of the vehicle on return. 30 The present case is different. Not only were there terms concerning what the hirer would pay on return of the vehicle but the hirer in this case also took out insurance described as "loss damage waiver" and "responsibility amount waiver" which would be reasonably anticipated or expected to ensure that if the vehicle were damaged and not returned in the condition in which it was hired (fair wear and tear accepted) the insurances which had been taken out would cover it. 31 One commonly hears renters say 'have I got all the insurances' and they are told they have. The document in this case itself suggests that insurances relevant to the subject matter of the condition of the vehicle and in particular accidental damage, were dealt with by the additional amounts paid by the renter. 32 As a consequence I think that there is not room for the implied condition in relation to the bailment of the kind that was dealt with in British Crane Hire Corporation v Ipswich Plant Hire (supra). 33 For the foregoing reasons I am of the opinion that the Magistrate fell into error. His error was an error in relation to the construction of the contract and, thus, involved a question of law. 34 The question in the Case stated is answered in the affirmative. I direct the parties to bring in Short Minutes of Order later today that reflect the above decision. 35 I make orders in accordance with the Short Minutes of Order dated 11 May 2000 which I will initial and date today and place with the papers. ********** Last Modified: 12/07/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.