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On appeal from: [2008] EWCA Civ 382. The question in this case is what constitutes a consumer hire agreement within the meaning of the Consumer Credit Act 1974, section 15.


The Respondents, TRM Copy Centres (UK) and others (“TRM”) commenced proceedings against the appellants, Lanwall Services Ltd (“Lanwall”) on discovering that Lanwall had removed their photocopiers from a retailer’s premises where they had been installed under various location agreements (“the Agreements”) and replaced them with Lanwall’s own photocopying equipment. TRM’s claim was that Lanwall’s actions constituted the tort of inducing the retailers to breach their Agreements with TRM. Lanwall defended the claim by arguing that the Agreements constituted consumer hire agreements under section 15 of the Consumer Credit Act 1974 (“the Act”), and therefore that TRM should have had a licence to make such consumer hire agreements with the retailer: as TRM had no such licence, the Agreements were unenforceable.

The preliminary issue as to the nature of the Agreements was put before the Courts for assessment. At first instance, Flaux J held that the Agreements were not consumer hire agreements, and the Court of Appeal agreed, upholding the decision in favour of TRM.

The House of Lords also decided that the Agreements were not consumer hire agreements, on the basis that they lacked the necessary obligation for the retailer to pay anything in cash or kind for the hire of the photocopier. The only obligation for the retailer to pay money to TRM existed on the basis of how many copies had been made by the photocopier; and if no copies were made, the retailer owed nothing to TRM. To regard the Agreements as hire agreements was to overlook the commercial reality of the transaction.

After dismissing the appeal, Baroness Hale of Richmond expressed a note of unease, however, that the case appeared to rest on so fine an interpretation of the Consumer Credit Act 1974. She clarified that, further than establishing whether the Agreements could be technically defined as consumer hire agreements, there was a necessity to assess whether, after looking at the reality of the transaction, the Agreements constituted the type of arrangement that ought to fall under the ambit of the consumer protection legislation. As the retailer was not locked into an expensive or onerous arrangement with TRM, she concluded that the Agreements did not fall into the category of agreements that required the consumer protection envisaged by the Act and therefore for this reason also, it was just to dismiss the appeal.

For judgment, please download: [2009] UKHL 35
On appeal from: [2008] EWCA Civ 382 
See here for the Consumer Credit Act 1974.

Case commentary by Eleanor Mann of Olswang.

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