Disclaimers and the "Bull" Disclaimer.
Courts must consider not only whether a false description has been disclaimed but, firstly, whether the description has been qualified by information which prevents it from being false in the first place. First published in the Justice of the Peace (1996) 160 JPN 642.
The Trade Descriptions Act
S 1(1) of the Trade Descriptions Act 1968 ("the Act") makes it an offence, in the course of a trade or business to (a) apply a false trade description to any goods; or (b) supply or offer to supply goods to which a false trade description is applied. These offences require no mens rea. The harshness of this strict liability is compensated for, to some degree, by s 24 of the Act which provides a statutory defence if, inter alia, the defendant can prove that "he took all reasonable precautions and exercised all due diligence to avoid the commission of [the] offence". By contrast with s 24, "the disclaimer notice is a creation of the courts. It is not dealt with in the Act at all" (per Widgery LCJ in Waltham Forest London Borough Council v TG Wheatley (Central Garage) Ltd [1978] RTR 157).
Disclaimers and s 1(1)(a) - supplying
One of the earliest references to the existence of a common law doctrine of disclaimer was made by Wein J in Tarleton Engineering Co Ltd v Nattrass [1973] 3 All ER 699, where, in upholding that a mileage reading could be a trade description, he said:
"If the description is in fact false because the true mileage is in excess of [that stated] an offence is committed by the seller who applies that description to the goods even though he is unaware of the falsity of the description. He can protect himself by some disclaimer of the accuracy of the mileometer".
Wein J did not, however, set out the circumstances in which a disclaimer might be effective and this fell to the true father of the disclaimer, Widgery LCJ, in the much quoted case of Norman v Bennett [1974] 3 All ER 351, where he said:
"This case raises, I think for the first time, a need for the court to think a little more deeply about the extent to which a false trade description can be disclaimed so as to prevent the supplier of the goods from committing a criminal offence".
Widgery LCJ was, therefore, only looking at disclaimers as a potential protection for the person who supplied goods with a false trade description already applied (s 1(1)(b)). He continued that:
"Where a false trade description is attached to goods, its effect can be neutralised by an express disclaimer or contradiction of the message contained in the description. To be effective any such disclaimer must be as bold, precise and compelling as the trade description itself and must be as effectively brought to the notice of any person to whom the goods may be supplied. In other words, the disclaimer must equal the trade description in the extent to which it is likely to get home to anyone interested in receiving the goods. To be effective as a defence to a charge under s 1(1)(b) of the 1968 Act any such disclaimer must be made before the goods are supplied".
Having expounded the doctrine, Widgery LCJ then found it to be not really applicable to the circumstances in that case:
"In this particular transaction there were two experienced dealers of cars who from the very outset knew that the speedometer was not guaranteed ... Against that background it cannot be that the false trade description can stand to the prejudice of the seller. ... the trade description was never applied at all because of the understanding between the two parties. An alternative approach is that the trade description was applied to the goods but was instantly disclaimed or negatived by the understanding between them".
Widgery LCJ re-stated the doctrine six months later in Zawadski v Sleigh [1975] RTR 113:
"The justices ... had to ask themselves whether anything ... said in the ring by the auctioneer could be described as neutralising the message otherwise transmitted by the incorrect odometer and whether such transmission was as bold, precise and compelling as the odometer reading itself had been. That really is the test and it seems to me not to matter whether the auctioneer when dealing with this matter in the ring purported to do it on their behalf or on behalf of the seller or on behalf of both. The vital test is to put oneself in the position of the buyer bidding for the car at the auction and to ask oneself whether the message conveyed by the odometer reading had been sufficiently contradicted to pass the test to which I have referred, and specifically contradicted in regard to the particular car with which the particular buyer was concerned".
Widgery LCJ's dicta, in Norman v Bennett, was approved by the Court of Appeal in R v Hammertons Cars Ltd [1976] 3 All ER 758, which was also a supplying case. Lawton LJ said:
"We understand his judgment as meaning that when there is clear evidence that a false trade description has been affixed or annexed to or marked on or incorporated with the goods (see s 4(1)(a) of the 1968 Act), then there is a strong inference that that description has been applied to them unless other evidence shows that what looks like an indication as to the matters which can constitute a trade description was not such an indication at all. Common sense says that such other evidence should be bold, precise and compelling ... The evidence must be looked at as a whole ... the right question for the court of trial is this: has the prosecution proved that the defendant supplied goods to which a false trade description was applied? If the evidence was positive that at the beginning of the negotiations a false trade description was applied but before they were concluded the defendant made it clear to the purchaser that the trade description should be disregarded, then the answer to the question will be No; but if he did not make it clear then the answer will probably be Yes. Each case must depend on its own facts; but in most cases of the kind now before the court a mileometer reading is on the motor car for the prospective purchaser to see and to take into consideration when deciding whether to buy. If dealers do not want prospective purchasers to take any notice of mileometer readings they must take positive and effective steps to ensure that the customer understands that the mileometer reading is meaningless ... We should expect both justices and juries to find that a casual remark in the course of oral negotiations or 'small print' in a contractual document were not effective".
Although the disclaimer defence has its origins in mileometer cases it applies equally to any trade description. It has also been extended to s 14 of the Act which deals with false statements as to services, accommodation or facilities - Smallshaw v PKC Associates Ltd (1995) 159 JP 730.
Disclaimers and S 24
It is apparent from Norman v Bennett that if a disclaimer is effective, then it neutralises the false trade description and, as Lawton LJ put it in R v Hammertons Cars, "what looks like a trade description ... was not such a description at all". It follows that there is in those circumstances no offence and so the statutory defence in s 24 has no relevance. This distinction between disclaimers and s 24 was clarified by Donaldson LJ in Crook v Howells Garages (Newport) Ltd [1980] RTR 434:
"One reasonable precaution which can and should in almost every case be taken to avoid the commission of the offence is to issue a disclaimer. The defendants did not issue a disclaimer in this case, and accordingly it would have been impossible ... for them to have satisfied the justices that they took all - and I stress the word 'all' - reasonable precautions. There may be wholly exceptional cases of which I wot not where it can be said that, despite the absence of a disclaimer, all reasonable precautions have been taken to avoid the commission of the offence. In a sense perhaps it is not a defence at all. If a disclaimer is made no offence is committed because a false trade description is not applied. But it is very difficult to see how, in the absence of that precaution being taken with a view to avoiding the commission of the offence, it is possible to rely on section 24(1)".
Disclaimers and offers to supply
S 6 of the Act provides that "a person exposing goods for supply or having goods in his possession for supply shall be deemed to offer to supply them". It follows that the offence of offering to supply goods is complete once goods are exposed for supply. Any attempt at a disclaimer made after the goods are exposed for supply will, therefore, come too late to avoid the commission of an offence. Thus in Lewin v Fuell (1991) 155 JP 206, Pill J held that:
"An oral disclaimer given by Mr Fuell to anyone who inquired about the goods does not nullify the false trade description admittedly applied to them at the time they were exposed for supply".
Woolf LJ added that:
"It would probably be against the whole intent and purpose of the section ... if it was open to a trader such as Mr Fuell to expose watches and other goods of this sort to which a false trade description was applied and a disclaimer was only made when someone approached him to purchase those goods ... the section has been designed in a way which creates the offence when the goods are exposed. If there is to be any disclaimer of any sort it must exist at that time".
Disclaimers and s 1(1)(a) - applying
In Newman and Another v Hackney London Borough Council [1982] RTR 296; (1982) 80 LGR 611, the defendants "applied a false trade description ... by deliberately winding back the odometer". They submitted that there was no offence because an effective disclaimer sticker had been placed over the odometer. Ormrod LJ took a dim view of the defendants' practice and was not prepared to accept that the disclaimer doctrine was applicable to applying offences in the same way as it was to supplying offences:
"The offence is committed when the false trade description is applied to the vehicle or goods and that is at the time when the odometer reading is altered to read a meaningful figure like 21,000 miles. In that light, a disclaimer has no application at all. ... There can be no conceivable honest motive in re-setting the odometer and then sticking a sticker on it to say that the figures on the odometer are not guaranteed, or however it was put".
The inapplicability of the disclaimer doctrine to applying offences was confirmed by the Court of Appeal in R v Southwood [1987] 3 All ER 556, where Lane LCJ said:
"If a dealer falsifies the mileage reading on a car which is offered for sale, he applies a false trade description to goods in the course of a trade, and so he commits an offence under s 1(1)(a). He would have no escape under the provisions of s 24. It seems somewhat illogical to allow him to use a so-called 'disclaimer' to avoid conviction. The 'disclaimer' ... would be saying: 'This is a false trade description. I assert that it is a false trade description, and because I assert that it is a false trade description it ceases to be a false trade description applied to goods, and consequently I am not guilty of a contravention of s 1(1)(a).' The assertion does not cause the description to be any less false than it was originally, nor does it cause the description to cease to be applied to the car. It seems that on the strict wording of the Act, therefore, the so called 'disclaimer' provides no defence to a person charged under s 1 (1)(a)".
Later in his judgment Lane LCJ said:
"We have come to the conclusion that the judgment of the Divisional Court in Newman v Hackney London BC was correct and that there is a distinction so far as 'disclaimers' are concerned between [s 1(1)(a) and s 1(1)(b)] and that it is not open to a person charged under s 1(1)(a) to rely on any disclaimer"
Lane LCJ made it clear that a trader could not avoid liability by turning the odometer back to zero or some other figure which could not reasonably be expected to be true. "That no one was misled, or likely to be misled, is an irrelevant consideration ... clocking is not a proper method of attempting to avoid liability".
Applying by using
S 4 of the Act defines the ways in which a trade description can be applied to goods. These include marking the goods themselves or anything they are supplied in, or placing them anything marked with the description. In addition to these physical ways of applying a trade description, which would cover the altering of an odometer, s 4(1)(c) provides that a person applies a trade description if he "uses the trade description in any manner likely to be taken as referring to the goods".
In London Borough of Newham v Singh and Sandhu (1988) 152 JP 239, the Divisional Court held that where an offence of applying was by virtue of the "using" provision in s 4 (1)(c) then a disclaimer might provide a defence by showing that the defendant was not "using" the description. The defendants in that case sold a car unaware that whilst it had been out of their possession for a few days the odometer had been altered. A sticker on the odometer in red print advised prospective purchasers to "please disregard the recorded mileage on this vehicle and accept this as an incorrect reading".
In view of the disclaimer there was no offence of supplying under s 1(1)(b), but the prosecution argued that the defendants had applied a false trade description by using the odometer reading to sell the car and that an offence of applying under s 1(1)(a) could not be disclaimed. Watkins LJ said that:
"although a disclaimer is not apt to be used as a defence under subs. (a), the words of it can be prayed in aid, as they were in the instant case, by a defendant when he is maintaining, as both of these respondents did, that they were informing any purchaser of the motor car by the disclaimer for the purchaser to disregard entirely what was recorded upon the odometer, in other words, to treat the record as incorrect".
The Bull disclaimer
In R v Bull (1996) 160 JP 240, the Court of Appeal was faced with a situation where a car dealer had not physically tampered with the odometer but had innocently copied the mileage onto the sales invoice in a box marked "Odometer Reading". There was an asterix after that figure the meaning of which was explained by a further asterix immediately below by the pre-printed words: "Trade Descriptions Act 1968. We have been unable to confirm the mileage recorded on this odometer and therefore it must be considered incorrect". Waterhouse J, in delivering the judgment of the Court, considered that what was therefore being said was: "This vehicle has an odometer with an actual reading of 47,526 but that must be considered incorrect because we have been unable to confirm the mileage recorded upon it". In moral terms Mr Bull was no more culpable than Messrs Singh and Sandhu. The same defence was not open to him however because, by writing the mileage on the invoice, he applied the trade description in the physical sense within the meaning of s 4(1)(a) or (b) and was not simply using it within s 4(1)(c). Waterhouse J said; "we ... have no doubt that ... there was an applying of a trade description to the invoice".
The prosecution argued firstly that a disclaimer had no effect in an "applying" case, and secondly that the disclaimer was itself a false statement because Mr Bull had taken no meaningful steps to ascertain the true mileage. Waterhouse J said: "We are unimpressed by that second argument". In relation to the first point the Court held that:
"The essential question is whether or not the qualification to the figure applied by the appellant to the invoice in this case is properly to be regarded as part of the trade description or is to be regarded as a 'mere disclaimer' ".
Waterhouse J thus drew a distinction between the traditional disclaimer and the one used in this case. Whereas the traditional or "mere" disclaimer was a separate component which had the effect, in a supplying case, of neutralising the false trade description, Mr Bull's disclaimer was so much an integral part of the trade description that it was never false.
"The 'applying' took place at a time when the qualification was already there and ... the correct ruling in this case would have been that there was no case to answer because the prosecution had not established the falsity of the trade description when it was applied by the appellant."
Waterhouse J made it clear, however, that to be effective in an applying case, a "Bull disclaimer", (as it may come to be known) must be so proximate to the false indication that it can be said to be part of the description.
"In considering a case of this kind, if there is a statement to the effect that the mileage is to be considered incorrect, the decision may ultimately turn on the positioning of that statement in relation to the quoted odometer reading and other relevant circumstances. The essential point here is that the statement about the incorrectness appeared immediately after the number and was highlighted by an asterix so that it is unarguable that the qualification was not part of the trade description".
It is somewhat concerning that the Court of Appeal should have introduced the concept of the Bull disclaimer without making any reference to its previous decision in R v Southwood, supra, where Lane LCJ said that "it is not open to a person charged under s 1(1)(a) to rely on any disclaimer". Waterhouse J might seek to distinguish R v Southwood on the basis that the Bull disclaimer was not a "mere disclaimer" but was part of the trade description itself, and was not, therefore, in the class of "any" disclaimer envisaged by Lord Lane CJ. This does not, however, appear to be the case. The type of disclaimer used by Mr Southwood was itself so proximate to the odometer reading that it might have been regarded as part of the trade description and it clearly stated that the odometer "is incorrect". The only way to, perhaps, reconcile Bull with Southwood is to note that Waterhouse J said that, in considering whether the disclaiming statement was effective, regard should be had not only to its proximity but also to "other relevant circumstances". High on the list of such circumstances must be the honesty of the dealer.
Bull disclaimers and dishonesty
Had the Court of Appeal not provided for a category of disclaimer applicable in applying cases then Mr Bull could have suffered an obvious injustice, indeed it is surprising that he was ever prosecuted. The appropriate solution, however, would have been to have allowed him a defence under s 24, rather than to tamper with, and unnecessarily complicate the well established doctrine of disclaimer. In R v Southwood, Lane LCJ said that it would be "absurd to suggest that the actual falsifier could, by any stretch of the imagination, be said to have taken all reasonable precautions" so as to provide him with a defence under s 24. Mr Bull, however, was not found to be the "falsifier" of the description but merely someone who had copied it and done all he could to make it clear that it should be regarded as incorrect.
As well as the conflict between Bull and Southwood, a further difficulty arises from the way in which Waterhouse J distinguished Newman v London Borough of Hackney, supra. He did so on the basis that in that case the odometer was falsified before the disclaimer was stuck to it whereas Mr Bull's description was never false because the disclaimer was there first. It is to be hoped that unscrupulous traders do not seek to rely on Bull disclaimers by sticking them on odometers before turning back the mileage. Fortunately such a ploy should not succeed.
Although, in his judgment in the Newman case, Ormrod LJ suggested that the odometer was altered before the disclaimer was applied, the facts as set out in the headnote and case stated suggest that the disclaiming sticker "was placed over the odometer before the mileage was altered". Whatever the sequence, however, Ormrod LJ covered both eventualities by saying: "It is perfectly obvious that the object of altering the odometer was to suggest that this car had done only something like 21,000 miles while, at the same time, stating that that figure should not be relied upon. It is a rather naive way of evading the provisions of the section". It follows that whether the false description or the disclaimer is applied first they end up being relied upon at the same time. The thing which really distinguishes these two cases is that Mr Newman was dishonest whereas Mr Bull was not. In R v Southwood, supra, the Court of Appeal made it plain that however clearly a trade description is expressed to be false, a disclaimer could not provide a defence to the dishonest falsifier
The Bull disclaimer, is not a miraculous new way for the rogue dealer to escape liability.
VICTOR SMITH
[The distinction between a qualification and a disclaimer was also independently made in the subsequent 2012 case of Norfolk County Trading Standards Service v Bycroft.]
Related case digests
- R v Bull [1997] RTR 123 - S 1(1)(a) TDA.
- applying - "Bull disclaimer". 1) to copy an odometer reading on to an invoice is to apply a trade description. 2) a qualification to a description is part of the description and not a "mere disclaimer".