| Fair trading — Consumer credit — Agreement — Agreements for supply and use of photocopiers for public use in retail premises — Payments to be made only where machines used — Whether consideration pre-condition of consumer hire agreement — Whether payments stipulated payments — Whether agreements regulated consumer hire agreements — Consumer Credit Act 1974, s 15
TRM Copy Centres (UK) Ltd and others v Lanwall Services Ltd
QBD: Flaux J: 18 July 2007
{It was a necessary precondition of a consumer hire agreement under s 15 of the Consumer Credit Act 1974 that some consideration for the hire was paid by or on behalf of the hirer. Agreements providing for payment to be made only when equipment was used were not consumer hire agreements within s 15.
Flaux J so held, inter alia, in the Queen’s Bench Division in a reserved judgment when determining preliminary issues which had arisen out of alleged inducement by the defendant, Lanwall Services Ltd, of breach of contract on the part of various customers of the claimants, TRM Copy Centres (UK) Ltd (“TRM”), Digital 4 Convenience plc and D4C Finance Ltd.
TRM supplied photocopiers for public use in retail premises under “location agreements” whereby a customer using one of the photocopiers was charged a prescribed copy rate and the retailer, who was entitled to deduct a commission, accounted to TRM for the sum collected. On the defendant removing TRM’s photocopiers from the premises of a number of retailers, and replacing them with equipment supplied by the defendant, TRM alleged that the defendant’s actions constituted the tort of inducing the retailers to breach the agreements. In its defence and counterclaim, the defendant contended that the Consumer Credit Act 1974 applied to the agreements and relied on certain provisions relating to termination of agreements governed by that Act.
FLAUX J said that the first preliminary issue was whether a location agreement between TRM and a retailer who was an individual was a regulated consumer hire agreement within s 15 of the Consumer Credit Act 1974. As a preliminary to that issue the question arose whether it was a necessary pre-condition of a consumer hire agreement that some consideration for the hire was paid by or on behalf of the “hirer”. S 15(1)(c) of the 1974 Act was predicated on there being some payment by the “hirer” as consideration for the hire, as one of the preconditions of a “consumer hire agreement”. It was not necessary for the consideration to have been paid by the hirer; it was enough if it was paid on his behalf by a third party. The copy rates set out in the agreements were not stipulated payments for the hire of the photocopier, for the simple reason that there was no obligation on the retailer to make any payment at all. This was the antithesis of the position under a hire agreement, where the hirer paid for the hire of the goods which came into his possession even if he did not use them. The concept of hire was one which entailed a stipulated payment or payments by the hirer as consideration for the hire. The agreements were not consumer hire agreements within the meaning of the 1974 Act. There was no entitlement on the part of the retailers to terminate the agreements under the consumer credit legislation and any entitlement to do so had to depend on the construction of the agreements.
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