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False Trade Descriptions and Economy of Truth.

“Everybody knows that sometimes half a truth is no better than a downright falsehood.” First published in the Justice of the Peace (2002) 166 JPN 380 and 409. Also published in (2002) 110 TSC Communique, issues 7, 8 and 9.

True or False?

“In the ordinary way dealers are under no positive duty to disclose the defects and disadvantages of their wares.  Generally, they are entitled to be economical with the truth, although not, of course, to lie.” (Per Simon Brown LJ in Farrand v Lazarus, post).

“Everybody knows that sometimes half a truth is no better than a downright falsehood.” (Per Lord Macnaughten in Gluckstein v Barnes [1900] AC 240).

“When I use a word, it means just what I choose it to mean – neither more nor less.” (Per Humpty Dumpty in Lewis Carroll’s Through the Looking-Glass).

If Mr Dumpty was a trader, and his words were trade descriptions, would he survive on an economy of truth or would he suffer a great fall?

Sailing Close to the Wind

The Trade Descriptions Act 1968 (“TDA”) is seemingly a statutory regime designed to require traders to tell the truth about the goods and services they deal in.  But, how much of the truth must a trader disclose in order not to offend against the TDA?  Those in business, whether sole traders or international corporations, inevitably make claims about the things they sell.  The advertising industry thrives on promoting the goods and services of its clients.  The more attractive a product can be made to sound, the more likely it is to sell.  It is in the commercial interests of traders to stretch the truth as far as they can without offending but, if they do offend, it is no defence that what they said was almost true.  Concentrated Foods Ltd v Champ [1944] 1 KB 342, was a case under the Food and Drugs Act 1938 (see now the Food Safety Act 1990) which, like the TDA, contained what might be categorised as trader honesty legislation.  There the court had to consider whether the trader’s use of a public analyst to verify the claims it had made for its product could support a statutory defence that it did not know, and “could not with reasonable diligence have ascertained” that the label on its product was calculated to mislead.  Wrottesley J said of the inquiry which the defendant had made of the analyst: “Such an inquiry savours too much of the question: ‘How close can I sail to the wind without being taken aback?’  That is not the sort of diligence Parliament had in mind.”

Trade Descriptions and Degree of Truth

S 1(1) TDA creates three offences which might be committed in the course of trade or business.  Under s 1(1)(a) it is an offence if a person “applies a false trade description to any goods”.  Under s 1(1)(b) it is an offence if a person supplies or offers to supply any goods to which a false trade description is applied”.  There are thus the three offences of “applying”, “offering to supply” and “supplying”.  All the offences involve there being a trade description which is “false” (or misleading – see s 3).  For many traders, however, “truth” is a precious commodity which must be used as sparingly as possible, not because it will ever run out, but because, if used too liberally, it could remove too much gloss from the description of the goods and dull products are more difficult to sell.

The amount of truth it is necessary for a trader to include in a trade description will depend on whether he has applied it or is simply supplying goods to which a trade description has been applied by someone else (not under his direction or control).  In the latter case of supplying or offering to supply, the trader may be able to disclaim the trade description and will need to consider how much truth to expend on such disclaimer.  If a large dose of truth is used to qualify a falsity it could render it true such that there is no false trade description to disclaim (R v Bull, post).  On the other hand, to give a dishonest disclaimer could be to apply a separate false trade description (Corfield v Starr, post)

 S 14 TDA deals with the making of false statements, in the course of any trade or business, in relation to the provision of services, accommodation or facilities.  Under s 14(1)(a) it is an offence for a person “to make a statement which he knows to be false” and under s 14(1)(b) it is an offence for a person “recklessly to make a statement which is false”.  Widgery LCJ held in MFI Warehouses Ltd v Nattrass [1973] 1 All ER 762, that a person is reckless if he does “ not have regard to the truth or falsity of his [statement] even though it cannot be shown that he was deliberately closing his eyes to the truth, or that he had any kind of dishonest mind.”

False to a Material Degree

S 3(1) TDA provides that “a false trade description is a trade description which is false to a material degree”.  Similarly, s 14(4) says that, in that section, the word “false” means “false to a material degree”.  A description or statement may therefore be permitted to contain a small element of falsity.  Whether the falsity is to a material degree will depend both on the extent of the falsity and on how it is likely to be perceived by the consumer.  Surprisingly there is a dearth of authorities on the meaning of “material degree”.

One of the few reported cases on “material degree” is Donnelly v Rowlands [1971] 1 All ER 9.  The defendant in that case offered to supply milk which was contained in bottles each embossed with the name of one of a variety of well-known milk supplier to whom the bottles belonged.  The foil caps on the bottles of milk read: “Untreated milk Produced from TT cows” followed by the defendant’s name and the address of his farm.  The magistrates’ court acquitted the defendant of the alleged offence under s 1(1)(b) TDA.  Dismissing the prosecutor’s appeal, Parker LCJ said: “The justices here approached the matter by looking at the whole of the description on the bottles.  The whole of the description on the bottles consisted of the wording on the foil cap and the embossed wording.  What I think the justices were saying was: if one looks at the whole thing, the falsity contained in the embossed words on the bottles was not a falsity to a material degree bearing in mind the accuracy of the trade description on the foil cap.  In my judgment that is a possible approach, although I find it quite unnecessary to go to those lengths.  It seems to me that such trade description as there was was not false in any degree.  The words on the foil cap were an accurate trade description of the milk, and in their context the words on the bottle did not refer to the milk which had already been accurately described, but merely conveyed, as the fact was, that it was a bottle belonging to the person whose name was embossed.  Looked at in that way, which is the ordinary way that any member of the public would look at it, there was no falsity here at all in the trade description.  Of course, if there was a finding supported by evidence that members of the public were misled, and would, on reading the embossed words, even though coupled with the foil cap, nevertheless think that CWS, Express or the like had had something more to do with the production than merely being the owner of the bottle, then there would be some ground for saying that there was a false trade description.”  

Although the approach taken by the justices, of looking at “the whole thing” was said by Parker LCJ to have been a “possible approach”, that approach now has to be looked at in the context of the subsequently developed doctrine of disclaimer and the extent to which qualifying words can prevent a description from being false.  We will look at disclaimers and “Bull disclaimers” later in this article. 

Parker LCJ presumably thought the trade description embossed on the glass of the bottles was not false, to any degree, because consumers would be aware from their experience (in the days when most milk was delivered to the customer’s door in milk bottles and the empties were left for the milkman to collect) that the embossed words on the bottles indicated the ownership of the bottles.  The description, therefore, was not at all material to the contents of the bottles and the origin of the contents was accurately given on the foil cap.

The facts of Donnelly v Rowlands are similar to those of Stone v Burn [1911] 1 KB 927, which was decided under a forerunner of the TDA, the Merchandise Marks Act 1887 (“MMA”).  The defendant there, with no intention to do wrong, bottled Bass’s beer in bottles belonging to, and embossed with the name of, the “Felinfoel Brewery Company”.  He put Bass’s labels on the bottles and sold the beer as Bass’s.  Alverstone LCJ said:  “Under those circumstances I should unhesitatingly come to the conclusion that so long as the labels remained upon the bottles no reasonable purchaser could think that he was purchasing the Felinfoel Company’s beer.  But that does not dispose of the case. … By s 5(1), ‘A person shall be deemed to apply a … trade description to goods who … encloses any goods … in … any covering … to which a trade description has been applied.”  Had that case been heard today, it might still have been found that a trade description had been applied since s 4 (1)(b) TDA provides that a person applies a trade description to goods if he … places the goods in on or with anything which the trade description has been affixed or annexed to …”  The defendant had argued that the application of the false description “Felinfoel” was “expressly negatived by the affixing of the [Bass] labels.”  This was, in effect, one of the earliest arguments that a false trade description had been disclaimed.  However, the disclaimer doctrine had yet to be established and the deeming provision in s 5(1) MMA, quoted above, prevailed.  It is conceivable that had the decision in Stone v Burn been drawn to Parker LCJ’s attention in Donnelly v Rowland, he might have followed it.  It is more likely, however, that he would have distinguished it on the basis that the MMA defined “false trade description” as “a trade description which is false in a material respect as regards the goods to which it is applied ...”  “Material respect” does not have the same meaning as the words “material degree” used in the TDA and it will be recalled that Parker LCJ did not consider the embossed description on the milk bottle to be false “to any degree”.  It is evident from the initial words in the passage quoted from Alverstone LCJ, ante, that had he been considering the matter under the TDA he may not have regarded the embossed wording on the beer bottles as false to a material “degree”.  Nonetheless, so long as the differences between the former and current legislation are borne in mind, Stone v Burn remains a good authority.

Stone v Burn was applied in Roberts v Severn Petroleum & Trading Co Ltd [1981] RTR 312 (some 10 years after Donnelly v Rowlands).  The defendant there had supplied petrol to a garage that, to the knowledge of the garage, was not Esso petrol.  The pumps at the garage had no brand name on them but the garage had a large “Esso” sign on a pole and another such sign, over the garage, that was in the Esso livery.  Donaldson LJ said: “[The prosecution] submits that the tanks of this garage were receptacles to which a trade description, namely, that the contents were the product of the Esso Petroleum Company, had been affixed.  He refers us to … Stone v Burn where a brewer placed Bass beer in bottles which were embossed with the name of another company and was held to be guilty of an offence under an earlier statute in much the same terms, notwithstanding that he put Bass labels on the bottles as well.  In the light of that decision [the defendant was] indeed committing an offence under the [TDA]”.  Although Donaldson LJ did not refer to Donnelly v Rowlands he would have found it easy to distinguish that case.  The trade description “Esso” was false to a material degree because it would be taken to apply to the content of the tanks and not to the tanks themselves.  The consumer would expect that the petrol stored for sale at an “Esso” garage would be “Esso” petrol.  Furthermore, there was nothing to contradict the trade description “Esso”.

That there is a relationship between the material falsity of a trade description or statement and what the consumer was likely to take the statement to mean is supported by the judgment of Lord Fraser given in the House of Lords in British Airways Board v Taylor  [1976] 1 All ER 65.  BOAC, the defendant airline’s predecessor, had written to a passenger confirming his reservation on a particular flight.  There was a seat available at that time but, because of BOAC’s policy of overbooking, there was no seat available when the passenger sought to take up his reservation.  One of the issues in the case was whether BOAC had recklessly made a false statement contrary to s 14(1)(b) TDA.  Lord Fraser said: “It was faintly argued that the airline might escape liability by virtue of s 14(4) which provides: ‘In this section “false” means false to a material degree ...’  The argument was that ... the number of passengers who were off-loaded because of the overbooking policy was very small in relation to the total number of passengers who booked seats, and therefore that the statement was not false to any material degree.  I cannot agree.  The falsity of the statement was material to [the passenger] and that is enough for the present purpose.” 

An example of materiality arose in Haringey London Borough Council v Piro Shoes Ltd [1976] Crim LR 462.  That case concerned shoes, displayed in a shop, which were marked “all leather”.  It was accepted that as the shoes were not entirely made of leather the trade description “all leather” was false (to a material degree).  The issue in the case was whether the defendant company had a due diligence defence under s 24 TDA having instructed the shop manager that the shoes were not to leave the shop without the word “all” being crossed out.  It was held that s 24 did not apply since, even if the instruction had been complied with the offence of “offering to supply” would have been committed before the word “all” was deleted.  It was, it seems, taken as read that if the word “all” had been crossed out then the remaining description “all leather” would not have been false.”  The description “all leather” with the word “all” crossed out but still quite legible would indeed indicate that the goods were not all leather.  If, however, the word “all” was obliterated, or not there in the first place, the word “leather” on its own could reasonably be taken to indicate “all leather”.  Even so, if parts of the shoes which are relatively small and unlikely to be made of leather (e.g the stitching, laces, eyelets and nails) are not made of leather then the description would not be false to a material degree.  Indeed even shoes described as “all leather” are unlikely to have leather stitching.  The de minimis principle (i.e. the principle that the law takes no account of trifles) will also come into play in relation to very small discrepancies.  In some cases, however, even the tiniest quantity will be material.  Goods described as “lead free” should contain no traces of lead at all and drugs should be exactly as described.

In R v Ford Motor Co Ltd [1974] 3 All ER 489, the Court of Appeal had to consider whether a car, which had been damaged and repaired, could properly be described as “new”.  Bridge J held that: “The suggestion that a car ceases to be new as soon as it sustains any significant damage and irrespective of the quality of the repairs ... is a test which we do not find it possible to accept. ... The questions to be asked when a car has sustained damage which has thereafter been repaired, both events having occurred away from the manufacturer’s premises, are first: what is the extent and nature of the damage? and second: what is the quality of the repairs which have been effected?  If the damage which a new car after leaving the factory has sustained is, although perhaps extensive, either superficial in character or limited to certain defined parts of the vehicle which can be simply replaced by new parts, then provided that such damage is in practical terms perfectly repaired so that it can in truth be said after repairs have been effected that the vehicle is as good as new, in our judgment it would not be a false trade description to describe such a vehicle as new. ... The question whether the repairs ... have attained the necessary degree of perfection to entitle the car to be described as new must be a matter of fact and degree to be decided by the tribunal of fact.”  Although not expressly stated in his judgment, Bridge J was, in the above passage, considering whether the trade description “new”, as applied to a repaired car was false to a material degree within s 3(1) TDA and determined, not surprisingly, that it was a matter of fact and degree.  It is apparent that provided the car was “as good as new” after repair, Bridge J did not consider that in order to tell the truth it was necessary for the seller to reveal that the car had been repaired.

Another case which dealt with the degree of falsity in the description “new” was R v Anderson (1988) 152 JP 373.  The defendant was the managing director of a company which dealt in Nissan cars.  His company received bonus payments from Nissan if a certain number of the cars it sold had been previously registered in the company’s name.  The defendant sold three such cars to individual customers describing them as “new” despite the previous registration.  The cars at the time of supply were in mint condition and had only very low delivery mileages on their odometers.  The managing director was charged with applying and supplying offences under s 1(1) TDA.  At his trial the defence invited the Crown Court judge to rule that there was no case to answer on the basis that the description “new” as applied to the three cars could not be false and that the word “new” did not indicate anything as to the registration position of the cars.  He was convicted and appealed to the Court of Appeal.  Waterhouse J held “that the trial Judge was correct in his ruling that in this particular case it was open to the jury to find that the word ‘new’, in the context in which it was used, carried the indication ... that the cars had not had any previous registered keeper and that the purchasers would be the first registered keepers.  The word ‘new’ is susceptible of a variety of interpretations, depending on the context in which it is used.”  As in the Ford case there appears to have been no express argument that the description “new” was not false to a material degree, but Waterhouse J effectively held that it could be.  As in British Airways Board v Taylor, ante, the way the consumer interpreted the description (or statement) was relevant to its degree of falsity.  In Anderson “there was strong affirmative evidence from the purchasers that the word had carried for them the indication alleged.”

Although it was a prosecution brought under the Food and Drugs Act 1955 the observation of Watkins LJ in Shearer v Rowe (1985) 149 JP 698, is instructive.  He said: “I do not see how any sensible conclusion could be reached unless it ascribe to the average sensible purchaser an intention to receive beef and only beef when asking for minced beef.”  A trade description can be materially false even if the goods to which it is applied is of no less quality than if the description had been true.  See Kirshenboim v Salmon and Gluckstein Ltd [1898] 2 QB 19 where machine-made cigarettes were held to have been falsely described as “hand-made” even though they were of equally good quality as hand-made cigarettes. 

If a trade description or statement within s 14 TDA is false to a material degree can it be disclaimed and, if so, what degree of truth must such a disclaimer contain?

True Because Not False, But False Because Misleading

S 3(2) TDA provides: “A trade description which, though not false, is misleading, that is to say, likely to be taken for such an indication of any of the matters specified in s 2 of this Act as would be false to a material degree, shall be deemed to be a false trade description.”  The distinction between the levels of truth required for falsity or deemed falsity is well illustrated in Surrey County Council v Clark (1992) 156 JP 798, where the defendant had supplied a puzzle resembling a Rubik Cube but which did not bear the name “Rubik” or the manufacture’s name “Matchbox”.  The defendant was charged with supplying goods to which a false trade description was applied by means of the picture on the packaging and the puzzle itself.  On the prosecutor’s appeal, Taylor LJ said: “This raises the difficult question as to what distinguishes an indirect indication amounting to a false description under s 3(1) from a description not false but misleading within s 3(2).  The distinction may be between an indication which tells a lie about itself and one which, whilst accurate on its face, misleads by its associations in the mind of the consumer.  Had Rubik been mentioned, or had a logo applied by Matchbox to all their products been used, there would clearly have been a false but indirect assertion that Matchbox were the manufacturers. ... Different considerations ... apply when one proceeds to s 3(2) of the Act ... We have seen the impugned article and an example of the Rubik equivalent. … The get up in each case is practically identical in size, construction, colouring, design and materials. … Even though it was not a false trade description in the sense of s 3(1), it was deemed to be, by reason of the misleading … under s 3(2).”  See also Robertson v Dicicco (1972) 70 LGR 589 and Dixons Ltd v Barnett (1989) 153 JP 268.

Disclaimers and S 1(1)(b) TDA

The locus classicus for the doctrine of disclaimer is Norman v Bennett [1974] 3 All ER 351, where Widgery LCJ 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. ... 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) [TDA] any such disclaimer must be made before the goods are supplied”.  The doctrine, as expounded by Widgery LCJ, was applied by the Court of Appeal in R v Hammertons Cars Ltd [1976] 3 All ER 758, which was also a case involving a false odometer reading.  Lawton LJ said: “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”.

To say that, to be effective, a disclaimer must render the trade description “meaningless” is a strong statement.  For a trader to deprive a trade description of meaning, such that it will be disregarded by a prospective purchaser, must clearly involve the trader in telling the truth, but not necessarily the whole truth.  A declaration by a trader that an odometer reading must not be relied upon or even that it is incorrect may make it meaningless, but it will not tell the consumer what the actual mileage is.  As we shall see, however, disclaimers, in the context of odometers, are only there to protect the innocent trader who does not know the true mileage because the false reading was applied by someone else.  To protect himself, the innocent car dealer must either check the mileage, and declare what he knows, or disclaim the accuracy of the description.

Disclaimers and S 1(1)(a) TDA

The proposition that the doctrine of disclaimer is not applicable to the trader who applies the false trade description was put beyond doubt 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 [statutory defence] 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)”.  Furthermore a false trade description was no less applied if no one was likely to be misled by it.  It followed that it was an offence to turn an odometer back to zero even though it would be obvious to a prospective purchaser that such a mileage could not be true.  In essence a trader cannot disclaim his own fraud.  Lane LCJ also commented, albeit almost in passing, on the degree of truth required from a disclaimer if it is to avail the innocent trader who wishes to sell goods which he has discovered have a false trade description applied to them.  He said that “the defendant who by making inquiries discovers the falsity of a reading would no doubt be able to protect himself by frankly disclosing the result of his enquiries in such way that any purchaser would be in the same state of knowledge as the dealer himself.”  To give the prospective purchaser the same knowledge which is held by the trader must involve the trader in telling all he knows i.e. the whole truth.

There is one circumstance in which, notwithstanding R v Southwood, a disclaimer may protect a trader from a charge under s 1(1)(a).  It arises from the fact that s 4 TDA includes within its definition of, what amounts to, “applying” not only the initial physical application by e.g. marking the goods with the description or annexing or incorporating the description with the goods, but also using an existing trade description.  The second hand car dealer who buys a car and sells it on without disclaiming the odometer reading “uses” that trade description, as to the car’s history, since it will be a feature of the car that a purchaser will take note of.  If the odometer reading is false then, prima facie, the dealer commits an offence under s 1(1)(a) TDA.  In London Borough of Newham v Singh and Sandhu (1988) 152 JP 239, however, it was held that where the alleged applying of a trade description was by “using” it, within the meaning of s 4 (1)(c) TDA, then a disclaimer could provide a defence to a charge under s 1(1)(a) by indicating that the trader was not in fact “using” the description.  Watkins LJ said “although a disclaimer is not apt to be used as a defence under subs. (a), the words of it can be prayed in aid ... by a defendant when he is maintaining ... that [he was] 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”.  A sufficiently truthful and prominent disclaimer can therefore protect the innocent trader from offending under both sections 1(1)(a) and (b).

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 TDA which deals with false statements as to services, accommodation or facilities – see, for example, Smallshaw v PKC Associates Ltd (1995) 159 JP 730. 

 All was relatively clear in the field of disclaimers until the entry of R v Bull (1996) 160 JP 240, which highlighted the distinction between the traditional disclaimer, which neutralises a trade description, and a qualification which, as part of the trade description itself, prevents it from being false in the first place.

Bull Disclaimers

In R v Bull, ante, the trader was charged with applying a false trade description by copying a false mileage from a vehicle’s odometer onto a sales invoice in a box marked “Odometer Reading”.  Immediately after the space for the mileage on the pre-printed invoice there was an asterix.  A further asterix immediately below that was followed by the 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, interpreted this as, in effect, saying: “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”.  On the face of it, Mr Bull had applied a false trade description to the vehicle, albeit innocently, by means of the invoice.  He could not disclaim his own application of a false trade description (R v Southwood) and since the alleged applying was his physical act of writing the mileage on the invoice, rather than his using the odometer reading, it would not avail him to say, as the defendants in London Borough of Newham v Singh and Sandhu had done, that he was not using the description.  Nonetheless Waterhouse J held that Mr Bull was not guilty of applying a false trade description to the vehicle.  Waterhouse J considered that the words following the asterix were not a “mere disclaimer” (which would have been ineffective in an applying case) but a qualification to the stated odometer reading which was an integral part of the trade description.  When the qualification is read as part of the trade description, the trade description is not false.  Such qualifying words (which might be termed a “Bull disclaimer”), if they are to be more than a “mere disclaimer”, must be so proximate to the false indication that it can be said to be part of the trade description.  Waterhouse J said: “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”.

For a more detailed discussion of R v Bull and the authorities on the disclaimer doctrine which preceded it, see “Trade Descriptions: Disclaimers and the ‘Bull’ Disclaimer” (1996) 160 JPN 642.  A pre-Bull example of where a qualification in the trade description itself prevented it from being false arose in Wolkind and Northcott v Pura Foods Ltd (1987) 151 492.  The trade description “vegetable lard” was alleged to be false because, so it was said, “lard” meant “pig-fat” and yet the product was composed entirely of vegetable oil.  The Shorter Oxford Dictionary, however, contained the definition: “Compound lard.  Lard made from vegetable oils”.  It followed that “lard” could be made from vegetable oils and so, even if the word “lard”, on its own, may have been false, it was not so when qualified by the word “vegetable”.  The prosecution had been brought under s 1(1)(b) TDA and the Divisional Court went on to hold that if it was wrong in, what amounted to, treating the word “vegetable” as a qualification, that word was an effective disclaimer.  There was also a disclaimer provided by the additional words “100% vegetable oils”.  It is not stated in the report where on the label those words appeared but, as they were described as being “emphatically printed”, it is assumed that they were fairly close to (and conceivably part of) the trade description “vegetable lard”.

Description as a Whole

In Durham Trading Standards v Kingsley Clothing Ltd (1990) 154 JP 124, Neill LJ sought to distil, from a small number of Divisional Court authorities, guidance as to “the correct approach” for considering whether a false trade description had been applied to goods.  Firstly he said it was necessary to consider the matter in four stages: “(1) Has a trade description as defined been applied to the goods?  (2) Is that trade description false in any particular?  (3) If it is, is it false to a material degree. ... (4) If it is not, one may then want to consider s 3(2).  In s 3(2), when one is considering a trade description which, though not false, is misleading, the justices can put themselves in the position of the ordinary shopper.”  Thus far what Neill LJ said is not controversial.  However, he went on to set out a further proposition.  He said: “Secondly, in deciding whether a description is false to a material degree, it is permissible to look at the whole of the description of the goods to see whether that part or element of the description which is false is materially false, having regard to the accuracy of the other parts”.  In this second proposition Neil LJ refers to “description” rather than to “trade description”.  His reference to “false to a material degree” suggests that dropping the prefix “trade” was not intentional but we cannot be sure.  What is abundantly clear is that he formulated this proposition exclusively from Widgery LCJ’s judgment, in Donnelly v Rowlands, where he said that the justices’ approach in that case was a “possible” one.

It is submitted that Neill LJ’s second piece of guidance is flawed and that it should not be followed.  It is to be observed that Neill LJ did not say that the court “should”, still less “must” look at the description as a whole, merely that that was “permissible”.  If looking at the description as a whole was a proper way of evaluating whether a false trade description had been applied to goods, then surely it ought to be done in every case.  It is unsatisfactory that Neill LJ did not make it clear whether in applying his guidance one should look at everything which describes the goods or only those things which are trade descriptions as defined in s 2 TDA.  Whichever approach is adopted, it involves the possibility of taking account of every single thing that describes the goods, however small and however remote from the (trade) description which is said to be false.  Such an approach would make a nonsense of the disclaimer doctrine which had been expounded in Norman v Bennett, followed in numerous other cases and endorsed by the Court of Appeal in R v Southwood some two years before Neill LJ gave his judgment.  Not only did Neil LJ base his second proposition entirely on Donnelly v Rowlands, but he did not consider, in formulating his guidance, any authorities on the disclaimer doctrine.  We have seen that the effectiveness of a disclaimer is conditional upon a number of factors such as the disclaimer being as “bold, precise and compelling” as the trade description itself which must be rendered “meaningless”.  These requirements for effectiveness would serve no purpose if they could be circumvented by an alternative approach of looking at the accuracy of everything that described the goods, wherever such elements of the overall description appeared on the goods and with whatever prominence.  It makes no sense for a less stringent approach to be adopted, in determining whether a false trade description has been applied, than that required to determine if a disclaimer is effective.  If there is no false trade description, the question of disclaimer does not arise.  The disclaimer doctrine is now so firmly established that it cannot be “permissible” to consider the falsity of the description “having regard to the accuracy of other parts”.

If it were possible to take Neill LJ’s words literally, they would be acceptable since it would mean looking at a single description as a whole rather than at all the descriptions associated with the goods as a whole.  Unfortunately, we know that that is not what he meant.  He cited Parker LCJ in Donnelly v Rowlands as saying: “The justices here approached the matter by looking at the whole description on the bottles.  The whole of the description on the bottles consisted of the wording on the foil cap and the embossed wording.”  Those pieces of information are not one description but two.  The description on the cap of the milk bottle would only be effective as a disclaimer if it was as bold precise and compelling as the trade description given by the embossed wording on the bottle.  Although Parker LCJ referred to the justices as having considered the wording on the cap and the embossed wording on the bottles as one (trade) description it is evident that he in fact regarded them as quite separate descriptions.  It was the very fact that they were separate trade descriptions that enabled Parker LCJ to conclude that no false trade description had been applied to the milk because the description embossed on the bottle was applied to the bottle and not to the milk.  The court should, of course, consider everything that describes the product, but it must determine what it is that forms the trade description in question, what it is that the trade description describes, whether it is false (or misleading) to a material degree and (in a s 1(1)(b) case) whether there is anything that effectively disclaims it.

If there was any possibility that Neill LJ’s second proposition could co-exist with the disclaimer doctrine, such a notion must have been removed by the expounding of the “Bull disclaimer”.  It should be noted that R v Bull was a decision of the Court of Appeal and that the judgment, delivered by Waterhouse J, was the judgment of the Court which also comprised of Swinton Thomas LJ and Harrison J.  The Bull disclaimer, i.e. the words qualifying what would otherwise be a falsity, to be effective as such, must be an integral part of the trade description – it cannot be anywhere on the goods or associated material.  The positioning of the qualification is crucial and in Bull itself the qualifying words were immediately below and linked to the false statement as to the odometer reading such that it could be said to be part of the trade description.

Whilst R v Bull may have complicated the law on disclaimers, it should have put an end to any continuing suggestion that a trade description is, for example, all the words on an invoice or label.  That is not to say that there cannot be situations where the trade description is the whole product; we have seen the example of the “Rubik” cube in Surrey County Council v Clark, ante.  S 2(1) defines a trade description in terms of “an indication” of one of the specified matters.  That indication may be in words or pictures or a combination of indicators, but, once it has been determined what is properly to be regarded as part of the trade description which is alleged to be false, the accuracy of other indications on the goods are irrelevant to the question of whether that description is indeed false.

Obligation to Tell the Whole Truth

In Farrand v Lazarus and others [2002] EWHC 226 Admin, the Divisional Court had occasion to consider the extent to which a trader had to tell the truth if he was to be able to avail himself of a disclaimer defence.  The three defendants were partners in a second-hand car business and the charges against each of them were the same.  The charges related to two cars, a Fiesta and an Escort, which the defendants had purchased at auction.  The odometer of each car only had five digits.  In each case, however, it was made known to the defendants at the time of their purchases that the actual mileage of the cars was 100,000 miles greater than the mileages recorded on the odometers.  The defendants displayed the cars on their forecourt.  All the cars in their garage, had a notice next to the odometer stating: “Code of Practice for the Motor Industry:  1. We do not Guarantee the Accuracy of the Recorded mileage.  2. To the best of our knowledge and belief the reading is correct/incorrect.”  The cars were seen by Trading Standards officers, offered for supply, on the defendants’ forecourt and they were subsequently sold.  The Fiesta was sold to different customers on three occasions, it having been returned to the defendants by the first two.  The defendants sold the Escort once.  Twelve informations were laid against the defendants under s 1(1) TDA and they were convicted by the magistrate of ten offences which included “applying”, contrary to s 1(1)(a), and “supplying” and “offering to supply” contrary to s 1(1)(b).

The defendants appealed to the Crown Court which allowed all ten appeals.  The prosecution then appealed, by way of case stated, in respect of four matters only, namely, two offences of “offering to supply” the Fiesta, “supplying” the Fiesta and “offering to supply” the Escort, in each case, a false trade description having been applied by means of the odometer readings.  Wisely, the prosecution did not appeal in relation to any of the s 1(1)(a) “applying” allegations.  In allowing the appeal, Simon Brown LJ said: “The question [raised] is this: what is the position of the dealer who does not himself alter or replace the odometer, but who knows the vehicle’s true mileage and knows that the odometer materially understates it?  To neutralise the description by a sufficient disclaimer, must he disclose the true mileage ... or is that rather to be regarded merely as ‘good practice’ and not ‘a requirement in law’ as the Crown Court concluded. ... If one starts with the particular facts of this case and asks simply the question suggested by Norman v Bennett, the case which first adumbrated the doctrine of disclaimer, was this particular disclaimer ‘as bold, precise and compelling as the trade description itself?’, the answer must surely be no.  To suggest merely that the reading on these odometers was incorrect to the best of [the defendants’] knowledge and belief seriously understated the fact that they knew perfectly well not only that the reading was incorrect, but that it was grossly and potentially misleadingly so.  The proforma nature of the disclaimer, moreover, and the fact that it is common to all cars sold at [the defendants’] garage again tend to depreciate its impact.  Indeed, it could hardly be further from the sort of emphatic contradiction of the message sent by the odometer that to my mind was required to neutralise its effect.  In my judgment, only disclosure of the known fact and extent of the falsity of the registered mileage figures would have achieved that here.”  Simon Brown LJ relied, in particular, on the dicta of Lane LCJ, in R v Southwood, noted ante, that “the defendant who by making inquiries discovers the falsity of a reading would no doubt be able to protect himself by frankly disclosing the result of his enquiries in such way that any purchaser would be in the same state of knowledge as the dealer himself.”

An unfortunate aspect of Waterhouse J’s judgment in R v Bull is that there is no indication that he had considered R v Southwood.  Similarly in Farrand v Lazarus there is no indication that Simon Brown LJ had R v Bull drawn to his attention.  In Farrand v Lazarus, the court was concerned with the odometer itself rather than with a quotation of its reading.  Nonetheless, the concept of the Bull disclaimer appears wide enough to enable a sufficiently qualified odometer reading to be true even though, taken alone the odometer gives a false reading.  If, for example, there was a clear statement immediately next to the odometer which stated “100,000 miles must be added to the mileage shown” then that qualification would be part of the trade description which would not then be false.  Such a situation was mooted in Southend Borough Council v White, post, where Nolan LJ suggested that “one [possibility] would be for the defendant in question to [affix] to the dashboard a clear and prominent statement showing the mileage covered in addition to that shown on the odometer and making it plain to the observer that the true mileage had to be taken from the odometer and the additional fixture read together.”... Would it be sufficient, however, to state only that the odometer reading was incorrect without disclosing the true mileage?  Clearly Simon Brown LJ thought that any disclaimer (of the “mere” variety) would have to reveal the state of the trader’s knowledge, but that presupposes that there is a false trade description to disclaim.  The answer lies in what Waterhouse J, in R v Bull, stated to be the need to consider “other relevant circumstances”.  One such circumstance must be the trader’s level of knowledge.  In Farrand v Lazarus the defendants’ knowledge that the true mileage was in fact 100,000 miles higher than stated, meant that the disclaimer, even if regarded as a qualification, did not prevent the odometer reading being a false trade description.  Indeed, apart from clearly stating the full truth the only way a trader could avoid offending in such circumstances would be to completely hide the odometer reading from view.

In Farrand v Lazarus the prosecution did not appeal against the Crown Court’s decision in relation to the allegations under s 1(1)(a) TDA.  That was very sensible because the defendants had not “applied” the trade descriptions given by the odometer readings.  The odometer readings were self-applied by the mechanical operation of the odometers themselves.  The readings were accurate until the cars had exceeded 99,999 miles when the odometers would then have automatically started misdescribing the history of the cars by recording again from nought.  The odometers were not altered by the defendants or anyone else.  Furthermore, as in London Borough of Newham v Singh and Sandhu, the (purported) disclaimer was sufficient to show that the traders were not “using” the trade description.  Although inadequate as a defence to a supplying charge, the disclaimers did protect the traders from conviction under s 1(1)(a) TDA.

Caveat Emptor

To what extent should the buyer beware, and to what extent must the seller tell the truth?  Should a trader be liable for a trade description that he does not know has been applied to the goods?

In Cottee v Douglas Seaton (Used Cars) Ltd [1972] 3 All ER 750) the defendant company, who were car dealers, purchased a car with damage to its engine compartment which was filled with plastic filler.  The defendants sanded it down and painted it, thereby concealing the damage.  The defendants then sold the car to another dealer, who, unaware of the damage, sold it to a consumer.  The consumer had an accident in the car and the concealed damage came to light.  The defendants were not directly charged under s 1(1)(a) with applying the false trade description or under s 1(1)(b) with supplying the falsely described car, to the second dealer.  Instead, the defendants were charged, under s 23 TDA, that the offence by the second dealer of supplying the car to the consumer with a false trade description applied to it was due to their act or default.  It followed that unless the second dealer was guilty then neither, as charged, were the defendants.  Widgery LCJ said: “I accept that an alteration of the goods which causes them to tell a lie about themselves may be a false trade description for present purposes, but [the second dealer] did not apply a false trade description to these goods since he did not himself cover up the defect in the car and, indeed was unaware of the existence of the defect.  If [the defendants] had been directly charged in respect of the sale to [the second dealer] it might have been open to the justices … to find that they were guilty of the offence, but the form of the charge employed required the prosecution to prove an offence by [the second dealer]. … A supplier of goods does not commit an offence under s 1(1)(b) if he did not himself apply the false trade description to the goods and had no knowledge or means of knowledge that this had been done by another.”

Milmo J said: “[The defendants] have clearly committed an offence under s 1(1)(a) … with which they were not charged but have not committed [an offence] under s 23 with which they were charged. … Clearly under s 1(1)(b) it matters not by whom the false description is applied and it need not be applied by the supplier himself.  Equally clearly, this section does not require actual knowledge or constructive knowledge on the part of the offender of the falsity of the description. … I have no doubt that in doing what they did to conceal the use which had been made of plastic filler in the engine compartment of the car, [the defendants] did something which was not only likely but obviously intended to be taken as an indication that the engine compartment was in a sound condition whereas it was far from it. … [The defendants] applied a false trade description to the car and therefore committed an offence under s 1(1)(a).  Further, if [the second dealer] committed an offence, it was entirely due to this act on the part of [the defendants].  However, when [the second dealer] sold the car he was unaware that any trade description of any sort was then applied to the car and there is no finding and no evidence that he was in any way at fault in failing to detect what had been done to it. … Knowledge that, at the time of supply or offer to supply, a trade description is applied to the goods is an essential prerequisite of an offence being committed by the supplier under s 1(1)(b) of the Act. …The prosecution having failed to prove any offence on the part of [the second dealer], and the information having been laid under s 23 of the Act, the justices were right in dismissing the charges.”

It is only fair, as was held in the instant case, that a trader, who is not aware that goods have a trade description applied to them, should not be liable if such description turns out to be false.  It is evident, however, that that is not what Parliament intended.  S 24(3) provides a defence, to a person charged with an offence under s 1(1)(b), if he can “prove that he did not know, and could not with reasonable diligence have ascertained ... that the description had been applied to the goods.”  Parliament put the burden of proof firmly on the defendant to prove not just that he was unaware of the application of the trade description but also that by exercising reasonable diligence he could not have become aware.

In the case of an odometer reading, a trader will always know that such trade description as to the vehicle’s history has been applied and so has the option of disclaiming it.  Where the trade description is not obviously applied the question of disclaimer does not arise.  Cottee’s case is also authority for the proposition that a hidden repair to goods can be a trade description.  Milmo J thought that was clear and had “no doubt” that the concealed damage constituted a trade description.  Widgery LCJ, however, was only prepared to accept that “for present purposes”.  He said: “The statutory words are very wide, and it may be that they are capable of the meaning attached to them by [the prosecution], but the proposition is nevertheless a startling one.  If the [prosecution] is right the consequences will be serious for all engaged in the repair and restoration of antique furniture, china, and a variety of other goods whose skill is devoted to making repairs which cannot be detected thereafter.  If goods so repaired are subsequently sold expressly as undamaged an offence is, no doubt, committed, but if the seller cannot simply keep silent, and must disclose the repair by virtue of the Act, the doctrine of caveat emptor will be deprived of much of its force.”  Milmo J had no such reservations, he said that the TDA “is couched in very wide language and in my judgment its intention is to make considerable inroads into the legal concept of caveat emptor.”  The third judge in the case simply agreed with the judgment of Widgery LCJ without any elaboration. He therefore expressed no comment on the issue of caveat emptor.  Whatever Widgery LCJ’s reservations might have been, however, and even though he said it was “for present purposes” he did hold that the concealed damage constituted a trade description and so was effectively accepting what Milmo J was clear about i.e. that caveat emptor had to succumb to the terms of the TDA.

Economical with the Truth

In Farrand v Lazarus, ante, Simon Brown LJ, having found that the defendants should have revealed all they knew about the mileage of the cars, went on to suggest that this requirement to tell the whole truth was peculiar to traders who sought to disclaim false odometer readings.  He said: “I recognise, of course, that in the ordinary way dealers are under no positive duty to disclose the defects and disadvantages of their wares.  Generally, they are entitled to be economical with the truth, although not, of course, to lie.  With regard to inaccurate mileage readings, however, that, in my judgment, is not the law.  In this limited respect they are required to volunteer the truth in so far as they know it.”  But, why should there be such a distinction between inaccurate mileage readings and every other kind of false trade description?  Should not a trader always be obliged to tell the whole truth or was Simon Brown LJ restoring to prominence the caveat emptor which Widgery LCJ had, albeit reluctantly in Cottee’s case, cast into the shadows?  In R v Ford Motor Co Ltd, ante, Bridge J, having cited Widgery LCJ’s comments about the doctrine of caveat emptor in Cottee’s case, said “to derive ... a false trade description applied to this vehicle as being new exclusively from the circumstances that it had been effectively repaired after being damaged, would open just the floodgate of which Widgery LCJ ... was apprehensive, and which in our judgment should be kept firmly shut.”  There is, however, a big difference between an imperceptible repair implying the description “new” (which is not an obvious inference) and such a repair implying that the bodywork beneath the repair is sound (which is an obvious inference).  Whilst not opening floodgates, Cottee’s case did, to borrow the language of Milmo J, “make considerable inroads” into the legal concept of caveat emptor.  How economical with the truth can a trader be and to what extent must the buyer beware?

We have seen that a trader who knowingly applies a trade description, which is false to a material degree, cannot disclaim it.  In most disclaimer cases, the trader will not know the truth and is disclaiming the trade description, for that very reason, to cover himself should it transpire that it is not true.  It is clear from Cottee’s case that a trader will not be liable for a trade description if he is not aware that it is applied to the goods - knowledge that the trade description has been applied is an essential prerequisite of a supplying offence.

The remaining situation to consider is that where the trader has not physically applied a trade description to goods, and does not use it, but does supply the goods knowing that the false trade description has been applied to them.  It is difficult to imagine such a situation which does not fall into the category of, what might be termed, “self-describing trade descriptions”.  The obvious example of this type of trade description is the odometer reading.  Another example is the hidden repairs, in Cottee’s case, which Widgery LCJ referred to as being an alteration to the goods and something “which causes them to tell a lie about themselves”.  So what we have is a situation where the trader does not say or write or otherwise articulate anything about the condition or history of the goods, but the goods speak for themselves.  If the trader, to escape conviction under s 1(1)(b), must issue a disclaimer which fully corrects (to the best of his knowledge) the lie uttered by an odometer, then surely he must also say what he knows about other falsities such as the hidden repair.  If what Simon Brown LJ said about the economy of truth suggests otherwise, then it must be noted that his words were obiter.  It may be, however, that whether or not Simon Brown LJ was right is, in practice, academic.

If one looks at a self-describing trade description, such as that in Cottee’s case, it can be seen that the trader cannot remain silent.  A trade description, in one or more of the particulars set out in s 2(1) TDA (e.g. fitness for purpose, strength, other physical characteristics or history), that goods are as they purport to be, is applied to them whether the trader has drawn attention to it or not.  It is, as was held in Cottee’s case, “incorporated” with the goods and hence applied within the meaning of s 4 TDA.  If a false trade description is applied, he who did not do the applying but nonetheless seeks to supply the goods to which it is applied must either disclose the falsity or (if he is aware of it) disclaim the trade description.  In the case of the odometer there is no longer any doubt that the trader must tell all he knows.  In the case of e.g. a hidden (significant) repair, even if he is not obliged to tell the whole truth, it is difficult to see, in practice, how a trader could rely on a disclaimer which did not reveal the whole truth.  Were a trader to say, for example, no more than that a car had had some repairs carried out to its bodywork, any potential consumer is almost inevitably going to enquire as to the extent of those repairs.  If the trader does not answer he is unlikely to sell the car.  If he does answer, he must answer honestly or risk applying his own false trade description to the car.  Although what Simon Brown LJ had to say about the economy of truth may, on the face of it, be encouraging to traders who want to perpetuate commercial lies, in practice the scope for caveat emptor or lawful dishonesty is small.

The TDA is not the only legislation which the reluctant truth telling trader must treat carefully.  A trader who knows of a serious defect in a car may offend against s 75 of the Road Traffic Act 1988 if he supplies an unroadworthy vehicle.  It was held in Devon County Council v DB Cars Ltd (2002) 166 JP 38, that a trader who carries out repairs to a consumer’s vehicle, “supplies” that vehicle when he returns it to the consumer.  A trader who sells a car which is cosmetically sound but which he knows to be defective may also offend under s 15 of the Theft Act 1968 since his economy of truth can result in a dishonest deception as a result of which he is able to obtain money for a car which, but for the deception, the purchaser would not have bought.

The Offending Disclaimer

 In R v Bull, ante, the prosecution argued not only that a disclaimer had no effect in an “applying” case, but also that Mr Bull’s disclaimer was itself a false statement because he had stated that “we have been unable to confirm the mileage recorded on this odometer” and yet had in fact taken no meaningful steps to ascertain the true mileage.   Waterhouse J said he was unimpressed by that argument, but did not say why not.  The argument was, perhaps, unimpressive because, although the words of the disclaimer falsely implied that Mr Bull had carried out some enquiries as to the accuracy of the odometer reading, that did not amount to a trade description “with respect to any goods” within one of the categories prescribed by s 2(1) TDA.

 In Corfield v Starr [1981] RTR 380, the disclaimer used by Mr Starr was somewhat less true than that in R v Bull.  The defendant, a car dealer, replaced the odometer in a second hand car with one showing a lower mileage.  He displayed a notice which read: “With deep regret due to the Customer’s Protection Act we can no longer verify that the mileage shown on this vehicle is correct.”  He sold the car and was charged with both applying a false trade description to it and supplying it so described.  Bingham J said: “To counteract the statement on this odometer some statement would be needed clearly conveying to a customer or prospective customer that no reliance could be placed on the mileage reading for any purpose whatever, or that the reading was, in the words of Lawton LJ [in R v Hammertons Cars Ltd] ‘meaningless’.”  Donaldson LJ added that: “Some disclaimers can themselves amount to a false trade description.  That is not alleged in this case, but in appropriate cases those whose duty it is to enforce consumer protection legislation may like to consider laying an alternative information based upon the disclaimer itself."   It must be right that some disclaimers can themselves amount to false trade descriptions.  It is also right that Mr Starr’s disclaimer was more inaccurate than that of Mr Bull’s, but it is still difficult to see how it can amount to a trade description within the meaning of s 2(1) TDA.  If a disclaimer, so worded, does give rise to an offence it might sit more comfortably within s 14(1) TDA rather than s 1(1).  The disclaimer is falsely saying that the trader cannot offer the service of verifying the accuracy of the mileage because of a fictitious Act of Parliament.

Mr Starr’s appeal against sentence was reported as R v Starr (1983) 5 Cr App R (S) 315.  It is apparent from Park J’s judgment that he did not consider that a disclaimer was available as a defence, even to a supplying charge, if the defendant had also applied the false trade description: “Where [the defendant] had both applied a false trade description to a car and also supplied it with such a description, using a disclaimer notice, he was nevertheless guilty of both the offences of applying and supplying. … The clocking of any car is a serious offence. … The offence is prevalent in all parts of the country.  Accordingly any motor trader who sells a car, the mileometer of which he has clocked … can, at the very least, expect the court to give serious consideration to the imposition of a custodial sentence taking effect immediately.”

Truth Between Traders

It is interesting that although Norman v Bennett, ante, is the leading authority on the requirements of an effective disclaimer, Widgery LCJ held that, on the particular facts of that case, it did not matter that the disclaimer was ineffective.  He said: “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”.

The effect of a disclaimer as between dealers was the subject of further consideration in Southend Borough Council v White (1992) 156 JP 463.  The defendant there was the sole employee of his company.  He bought a car with a recorded mileage of 98,000 miles.  The dashboard was subsequently damaged and the defendant replaced it with one which had an odometer recording only 45,000 miles.  The defendant then sold the car to another dealer to whom he had disclosed that the odometer was not correct.  The invoice contained the words “N/warranted”.  The sale price was more appropriate for a car which had travelled 100,000 miles than for one that had travelled only 45,000 miles.  The defendant was charged under s 20 TDA, it being alleged that the company’s offence was due to his “neglect”.  The magistrates were of the opinion that “in the context of a sale from one used car dealer to another there had not been a false trade description applied.”  Their decision is consistent with Norman v Bennett and, in particular, Widgery LCJ’s words: “The trade description was never applied at all because of the understanding between the two parties.”  The defendant was acquitted and the prosecutor’s appeal came before Nolan LJ who considered a number of authorities including R v Hammertons Cars Ltd, Corfield v Starr and R v Southwood.  Notable by its absence, however, is any reference in Nolan LJ’s judgment to Norman v Bennett.  In the light of the authorities which he did consider, Nolan LJ concluded: “It has long been established that a disclaimer may constitute a defence to a charge under s 1(1)(b) [TDA] but we are concerned with s 1(1)(a). … Neither [the defendant’s] disclaimer of accuracy in the odometer nor the purchaser’s knowledge of its inaccuracy could prevent the description from being false or constitute a defence against the charge under s 1(1)(a).  Nor could the existence of a reasonable explanation for the inaccuracy by itself constitute a defence.  However reasonable the explanation, the description was still false and plainly false in a material respect.”

The plain words of the TDA do not provide any basis for Widgery LCJ’s decision that transactions between traders are a special case and it is submitted that Nolan LJ’s decision in White’s case should be preferred.  It could be said that Norman v Bennett and White’s case are distinguishable from one another as the former is concerned with s 1(1)(b) whereas the latter relates to s 1(1)(a).  In either situation, however, there is no offence unless a trade description has been applied to the goods and so the same question was being considered in each case.  Widgery LCJ’s alternative basis for finding no offence as between the traders (i.e. assuming a trade description had been applied) was that the trade description had been applied but was immediately disclaimed.  We now know, however, from Farrand v Lazarus, that for such a disclaimer to be effective the full truth has to be revealed.

Whilst the decision of Nolan LJ in White’s case is sound, it is nonetheless unfortunate that he gave no apparent consideration to the inter-trader factor in Norman v Bennett.

S 23 TDA - Non-traders and the Truth

A person who does not act in the course of a trade or business cannot be directly liable for an offence under ss 1 or 14 TDA.  It does not follow, however, that someone can lie with impunity during the course of a private transaction.  Not only might such a private individual be caught by legislation in respect of which trade or business is not a prerequisite (e.g. obtaining by deception under s 15 of the Theft Act 1968) but also such dishonesty could, in due course, lead to a conviction under the TDA.  S 23 TDA enables any person to be prosecuted if an offence committed by someone else under the TDA was due to his act or default.  In Olgiersson v Kitching [1986] 1 WLR 304, a private individual, purchased a car knowing that its odometer had been replaced at 62,000 miles with a new one set at zero.  When the car had clocked up another 30,000 miles he sold it to a garage telling them that the true mileage was only 8,000 higher than that shown on the odometer.  The garage sold the car to another garage, in good faith, stating that the mileage was 38,000.  The second garage subsequently discovered the truth.  The original private seller was prosecuted under s 23 TDA, it being alleged that the supply by the first garage with the false mileage of 38,000 was due to his act or default.  Upholding the conviction of the private seller McNeill J said: “There are ... plain words in the statute.  They do not include ... words ... which ... confine the criminality of s 23 to someone who is engaged in the same trade as the principal offender. … The justices were right to conclude that [the defendant] in his capacity as a private individual was guilty of the offence charged.”

For the meaning of trade or business see “Trade or Business” (2001) 165 JPN 636.

S 24 TDA – Disclaimers and Due Diligence

S 24(1) TDA provides a defence to offences under the TDA if the defendant can prove, inter alia, that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence ...”  The relationship between s 24(1) and the doctrine of disclaimer was explained by Donaldson LJ in Crook v Howells Garages (Newport) Ltd [1980] RTR 434, where he said: “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).”  The issuing of a disclaimer, certainly in relation to odometer readings and trade descriptions of a similar nature, is therefore virtually a precondition to a defence under s 24 in relation to an offence under s 1(1)(b) TDA.  On the other hand, if an effective disclaimer were issued, then the trader would not need to have recourse to s 24.  The occasions where it would not be reasonable for a trader to issue a disclaimer would include where he is selling goods by retail, which he has purchased from a reputable wholesaler.  A shopkeeper would not be expected to disclaim the trade descriptions given on a packet of Kellogg’s cornflakes.  So far as an offence under s 1(1)(a) is concerned, just as a trader cannot avoid the commission of an offence by disclaiming the false trade description he has himself applied, (applying by innocent “using” excepted) neither can he rely on a disclaimer as a defence under s 24(1).  As Lane LCJ said in R v Southwood, ante: “It seems to us to be absurd that the actual falsifier could, by any stretch of the imagination, be said to have taken all reasonable precautions to attempt to avoid the commission of an offence merely by issuing a disclaimer, however expressed.  By his initial actions in falsifying the instrument he has disqualified himself from asserting that he has taken any precautions, let alone all reasonable precautions.” 

Some protection is given for the honest trader by s 24(3) if he can prove, in relation to goods he supplied or offered to supply, “that he did not know, and could not with reasonable diligence have ascertained, that the goods did not conform to the description or that the description had been applied to the goods.”  We have already seen that the last part of s 24(3) has been rendered otiose by the decision in Cottee’s case, ante, that knowledge that a trade description had been applied to goods was a prerequisite of an offence under s 1(1)(b).

VICTOR SMITH