TRM COPY CENTRES (UK) LTD V LANWALL SERVICES LTD

[2009] UKHL 35, House of Lords, Lord Hope, Lord Hoffmann, Lord Rodger, Lord Walker and Baroness Hale, 17 June 2009

Bailment – Inducing breach of contract – Claimant supplied photocopying machines – Defendant persuaded customers to use its machines – Whether defendant guilty of tort of inducing breach of contract – Whether claimant’s agreements were terminable by notice by reason of being consumer hire agreements – Consumer Credit Act 1974, section 15

TRM supplied, by way of lease, photocopying machines for installation in shops and post offices. The leases – Location Agreements – lasted for periods of 36 or 60 months, thereafter continuing for successive periods of 12 months unless notice was given. Payment was to be based on usage. Lanwall, a competitor, persuaded customers to take its photocopiers and to remove those supplied by TRM. The present action was one for the tort of inducing breach of contract. TRM asserted that the agreements were consumer hire agreements within section 15 of the Consumer Credit Act 1974, which defines this term as “an agreement made by a person with an individual … for the bailment … of goods to the hirer, being an agreement which— (a) is not a hire-purchase agreement, and (b) is capable of subsisting for more than three months, and (c) does not require the hirer to make payments exceeding £25,000.” Such an agreement may be terminated by three months’ notice, and accordingly Lanwall argued that the termination of TRM’s agreements was valid so that Lanwall could not be liable for inducing breach of contract. The House of Lords held that TRM’s agreements were not consumer hire agreements within section 15. The terms of the Location Agreements did not require any obligation for payment for hire, but instead payment was made to Lanwall based on the amount of usage to which photocopiers were put. If no copies were made, nothing was payable. That arrangement was inconsistent with hire, which required payment.