CPA Hire Terms: Opinions Wanted

[Bri963]

Having had a look at the case, Phillips and Hyland is hardly relevant to this case, and looks to fall fairly and squarely under UCTA 1977.

I know this wasn’t under CPA model terms but using them as an industry norm, under CPA terms there’s a 3 day “cooling off” period for the hirer, after which the machine would be deemed to be in good order, etc. (section 5 (a) for non-operated plant). McNicholl was 7 days into the hire when the Manitou went up in smoke, and as no cause could be determined, no fault could be pinned to how the machine was delivered. Several times the Judgement refers to McNicholl as having accepted the machine was hired to him, in which case he was accepting Walsh’s t’s & c’s, which are less convoluted than CPA, but do refer to the hirer indemnifying the owner against loss or damage, which he hadn’t.

Arguably Experience should have told him that (a) he needed insurance, and (b) in accepting a machine for hire it isn’t a one-sided transaction and you accept responsibility for equipment hired (whether or not it was under CPA model terms) - who else does he think was responsible? Personally I think he was negligent as a hirer, regardless of the cause of the fire. Put it this way, if you lent me your petrol mower and it went up in smoke, regardless of cause, how would you feel if I refused to accept any liability?

One reason CPA terms have evolved the way they have is because the owner is more vulnerable than the hirer in terms of monetary loss.

 

[Professor Mac]

Having had a look at the case, Phillips and Hyland is hardly relevant to this case, and looks to fall fairly and squarely under UCTA 1977.

I know this wasn’t under CPA model terms but using them as an industry norm, under CPA terms there’s a 3 day “cooling off” period for the hirer, after which the machine would be deemed to be in good order, etc. (section 5 (a) for non-operated plant). McNicholl was 7 days into the hire when the Manitou went up in smoke, and as no cause could be determined, no fault could be pinned to how the machine was delivered. Several times the Judgement refers to McNicholl as having accepted the machine was hired to him, in which case he was accepting Walsh’s t’s & c’s, which are less convoluted than CPA, but do refer to the hirer indemnifying the owner against loss or damage, which he hadn’t.

Arguably Experience should have told him that (a) he needed insurance, and (b) in accepting a machine for hire it isn’t a one-sided transaction and you accept responsibility for equipment hired (whether or not it was under CPA model terms) - who else does he think was responsible? Personally I think he was negligent as a hirer, regardless of the cause of the fire. Put it this way, if you lent me your petrol mower and it went up in smoke, regardless of cause, how would you feel if I refused to accept any liability?

One reason CPA terms have evolved the way they have is because the owner is more vulnerable than the hirer in terms of monetary loss.

Thanks for this perspective; I would be interested to hear the extent to which others share something like it.

It's clear that the original hire wasn't transferred from Walsh to McNicholl Hughes, so the terms of the original hire don't bind McNicholl Hughes. But the fact that Walsh agreed to the indemnity clause does provide some support for the idea that this is an industry norm. And thanks for pointing out th three-day cooling off period, which does indeed make the CPA terms more balanced.

To be clear, it may be that McNicholl should have to pay for this damage, but the law's default rules for hiring things would have given him the opportunity to prove he wasn't at fault. In this case, maybe he couldn't have proved that, in which case he would indeed have to pay.

If I lent you my petrol mower and it went up in smoke I think I'd ask you what you'd been doing with it. If you could prove to me you hadn't done anything silly I'd assume there was an intrinsic fault in the mower, in which case I'd bear the cost myself.

I can see the argument, however, that in a B2B context it's more efficient just to stop arguments about this issue and have the hirer claim on his insurance. The issue is how to deal with uncertainty about the facts.

 

[Bri963]

Something like this will always have uncertainty around the facts. It relies on everyone being honest and having accurate recall of events, and not being skewed by monetary considerations. Take my example of your mower, for example. I might omit to mention that I filled it with fuel while the engine was running, or I’d spilled fuel and hadn’t let it dry before starting. I might conveniently forget that fact.

Machines don’t just burst into flames, there is always a cause. It can be negligence, like debris build up round an exhaust system, poor maintenance regime, such as missed fuel leaks near the exhaust or turbocharger, or unauthorised or badly performed repairs. One scenario is the machine running out of fuel, system bled through, bleed nut left slack and diesel spraying onto the turbo. Hirer error, which no hirer would admit to Unless caught fair and square. Unfortunately fire is pretty good at destroying evidence, especially when it comes to plant. Was there no cctv?

You’ll be getting the message that anything to do with equipment is usually more than a paper exercise can determine, and why a court should think a civil engineer is a suitable expert witness for a machine fire is beyond me. Makes about as much sense as asking an air traffic controller why an aircraft has burst into flames in a hangar.