241 Pizza

The claimants commenced proceedings when they discovered that the defendant had removed their photocopiers from premises where they had been installed under subsisting location agreements, and replaced them with equipment supplied by the defendant.

Their case was that the defendant’s actions constituted the tort of inducing the retailers to breach their location agreements with the claimants.

The defence was that the location agreements were consumer hire agreements. Various consequences followed if the defendant was right on that point.

The 1974 Act provided that a licence was required to carry on a consumer hire business, and that agreements of that kind which were made by unlicensed traders were not enforceable against the hirer. The defendant said that the claimants were not licensed so that their agreements were unenforceable against the retailers.

Under each location agreement the retailer agreed to the installation of the photocopier on his premises and undertook to provide a location for it which was easily visible and accessible by the retailer’s customers.

The retailer and his customers could use the photocopier. If they did, they were charged the rate per copy that was provided for in the agreement. The retailer undertook to collect all sums paid for copies made on the photocopier and to account for them to the claimant.

He was entitled to deduct from those sums commission at a rate which increased as a greater number of copies were made, together with the value-added tax thereon. Accounting for those sums took place monthly.

No sums other than the rate per copy, less commission, were payable by either party in consideration of their undertakings to each other.

The agreement was for an initial period of 36 months. Thereafter unless terminated by either party on giving 90 days notice, it was renewed automatically for successive periods of 12 months.

All one needed to know when applying the 1974 Act in Scotland was that the Act had defined this type of agreement as one for the hiring of goods. It was the fact that the hiring was in consideration of an ascertained hire or rent which the hirer agreed to pay that marked this kind of contract out from others under which the temporary use or possession of a thing was given to another.

The English definition which referred to an agreement for the bailment of goods overlooked the fact that bailment was not synonymous with hire. It embraced all situations in which possession of goods was given by one person to another upon condition that they shall be restored to the person by whom possession had been given, or dealt with as he directed, upon expiry of the agreed period of possession.

The defendant accepted that this was a bailment by way of hire, that was to say, it was a bailment under which the person who received possession agreed to pay for the use of the chattel in cash or kind during the period of his possession of it.

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