BSS Group Plc v Makers (UK) Ltd (T/a Allied Services)

JurisdictionEngland & Wales
JudgeLord Justice Rimer,Sir David Keene,Lord Justice Pill
Judgment Date20 July 2011
Neutral Citation[2011] EWCA Civ 809
Docket NumberCase No: B2/2011/0148 & 0149
CourtCourt of Appeal (Civil Division)
Date20 July 2011

[2011] EWCA Civ 809

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM CAMBRIDGE COUNTY COURT

His Honour Judge O'brien

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Pill

Lord Justice Rimer

and

Sir David Keene

Case No: B2/2011/0148 & 0149

Claim No: 8PE01274

Between:
BSS Group Plc
Appellant
and
Makers (UK) Limited (T/a Allied Services)
Respondent

Mr Mark Diggle (instructed by Weightmans LLP) for the Appellant

Mr Neil Levy (instructed by Over Taylor Biggs) for the Respondent

Hearing date: 7 July 2011

Lord Justice Rimer

Introduction

1

These appeals, brought with the permission of Leveson LJ, are against orders on liability and costs made by His Honour Judge O'Brien in Cambridge County Court on 8 September and 14 December 2010 respectively. As there were two orders, two appeals were required, although if the appellant were to succeed on the liability appeal, success on the costs appeal would follow.

2

The appellant, BSS Group Plc ('BSS'), is the third party to a CPR Part 20 additional claim brought against it by Makers (UK) Limited ('Makers'). Makers was the defendant to a claim brought against it by Stephen Daniel, Barry Daniel and B & S Mechanical Services Limited ('the claimants'). That claim was disposed of by consent and the only matter tried by the judge (over 7 and 8 June 2010) was the additional claim.

3

The issue at the trial was whether, in supplying to Makers particular types of adaptor and valve for use in connection with a particular plumbing project, BSS was in breach of the implied term as to fitness for purpose imposed by section 14(3) of the Sale of Goods Act 1979, as amended. The problem was that the threads on the adaptor and valve were incompatible such that, despite appearances to the contrary, the connection of the two components became insecure under pressure; and, within hours, the valve blew off resulting in a damaging flood. The judge held that BSS had breached the implied term and found it liable accordingly. BSS challenges his decision.

4

Mark Diggle represented BSS and Neil Levy represented Makers. Both also appeared below. We had very able arguments from them.

Section 14(3)

5

As it is at the heart of the appeal, I shall set out its material provisions now:

'(3) Where the seller sells goods in the course of a business and the buyer, expressly or by implication, makes known –

(a) to the seller; or…

any particular purpose for which the goods are being bought, there is an implied term that the goods supplied under the contract are reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied, except where the circumstances show that the buyer does not rely, or that it is unreasonable for him to rely, on the skill or judgment of the seller….'

Section 14(6) explains that the term so implied is a condition.

6

Section 14(3) is a re-enactment, in slightly modified form, of section 14(1) of the Sale of Goods Act 1893. The 1893 Act was a codifying Act intended to reflect the pre-existing common law (see, for example, Henry Kendall & Sons (a firm) v. William Lillico & Sons Ltd and Others [1969] 2 AC 31, at 91H, per Lord Morris of Borth-y-Gest; Ashington Piggeries Ltd and Another v. Christopher Hill Ltd [1972] AC 441, 501, per Lord Diplock). In Jewson Ltd v. Boyhan [2004] 1 Lloyd's Law Reports 505, Clarke LJ, at paragraph [15], identified the questions arising under a section 14(3) claim as being: (i) whether the buyer, expressly or by implication, made known to the vendor the purpose for which the goods were being bought; (ii) if so, whether they were reasonably fit for that purpose; (iii) if they were not reasonably fit for that purpose, whether the vendor has shown (a) that the buyer did not rely upon its skill and judgment, or (b) if it did, that it was unreasonable for him to do so.

The facts

7

I take these from the judge's reserved judgment, as supplemented by agreed matters. In 2006 Greene King decided to renovate its Earl of Derby public house in Cambridge ('the property'). It instructed Cubitt Theobald Limited to do the work and in July 2007 that company sub-contracted the plumbing work to Makers. The work included the installation of new water services.

8

In July 2007 Makers entered into a labour only sub-contract with the claimants for the installation of the piping for a fixed price of £4,100. It instructed them that they were to replace the existing copper piping with a new plastic piping system called 'Uponor' (also known as 'Unipipe': Unipipe is the product and Uponor the manufacturer). Makers was to provide the claimants with the materials. It ordered them from BSS, whose staff at its Cambridge branch dealt with the orders. The claimants began work on 9 July 2007 and from that date BSS supplied Makers with the materials that the claimants required. They included Uponor piping, Uponor compression adaptors and 22mm isolating valves. The valves supplied in July (described in evidence by Mr Denman, the BSS representative who supplied them, as a 'cheap imported valve with no particular make') caused no problem. The problem arose on 24 August when the claimants used a different type of valve that was supplied by BSS on 12 August. I must, however, first refer to the documents of central relevance to the issues. They were created in the second week of August.

9

On 8 August Mr Carter (of Makers) sent a fax to Mr Chamberlain (of BSS). It was stated to be 'Re Earl of Derby, Cambridge' (i.e. the property) and asked for a quotation 'for the following items for the above project. ASAP.' It listed 18 classes of items of specified dimensions. Three items were identified as Uponor items, being different lengths of pipe of 32mm, 50mm and 63mm diameter. Three other items were identified as specifically to be used with such Uponor pipes, namely (a) '16 x 1.1/4" BSP [British Standard Pipe] with adapter to 32mm Uponor', (b) '1 x 2" stop tap with built in DOC adapters to 63mm Uponor', and (c) '1 x 2" DCV 2" bushed adapter to 63mm Uponor.' The other 12 items, such as bends, couplings, tees, rings and backplates and, in particular, '15 x 22mm Ballofix valves', made no reference to Uponor. The list did not refer to Uponor adaptors although BSS had in July supplied such adaptors to Makers. The judge found that 'by' 8 August (which, in the light of the evidence, meant before 8 August) BSS knew that the Uponor system was being used for the pipe work at the property.

10

BSS responded to that inquiry by a quotation faxed back on 8 August and signed by Mr MumbyCroft. It was in respect of 25 items and included, for example, the three lengths of Uponor pipe referred to in Makers' inquiry, although BSS described it under its alternative name of 'Unipipe', as it did in relation to all the Uponor items it quoted. Its response to the request for a quotation for 15 'Ballofix valves' was for part no 86310113, namely '22m CXC CP/DZR Boss Miniball [Valve] CU [Compression] WRC', the cost for 15 such valves being £151.65. Whilst there is a particular make of valve known as a 'Ballofix' valve, 'Ballofix' is, according to the evidence, also a generic term for valves of such kind. The Ballofix valve for which BSS was quoting was its own manufactured brand. It is designed for use with copper piping. It differed from the isolating valves BSS had earlier supplied in July.

11

Makers then placed orders with BSS on (as the judge found) 9 and 10 August, although the first order was apparently dated 8 August. The first order, marked for the attention of Mr MumbyCroft, was for 25 items, of which the seventh was '15 x 22mm. Boss Miniball [valves] CU [Compression] WRC', the relevant valves, namely the ones for which BSS had just quoted. The second order, marked for the attention of Mr Pound, was for eight items, of which the fifth was '20 x 2.25mm Brass [Compression] Adaptor 770004 Unipipe', i.e. Uponor compression adaptors. BSS delivered the items on 12 August. The Uponor adaptor comprises two brass components that can ostensibly be used in conjunction with a Ballofix valve to enable a Uponor pipe to be sealed off: one part of the adaptor fits into the other, the whole is attached to the pipe and the valve is then screwed into the adaptor..

12

The claimants were working in a bathroom at the property on 23 August. To enable them to do so, the water supply had been turned off. They replaced certain pipework and, at the end of the working day, had to seal off three pipes upon which they been working. This was necessary because when the property resumed service as a public house in the evening, the water supply would be turned on again. There was no evidence that all three pipes were sealed with like components, but what the evidence did show was that the claimants sealed one of the pipes by fitting to it a Uponor compression adaptor that Makers had bought from BSS (whether one ordered on 10 August or earlier was not proved) and then sealing the pipe off by screwing into the adaptor one of the 22mm Boss miniball valves that Makers had ordered on 9 August. The claimants turned the water back on, waited for half an hour to check for leaks and then left the property. During the evening, the water pressure increased. Early on 24 August, the valve blew off the end of the pipe resulting in a substantial flood and damage to the ground floor of the property.

13

An expert, James Garry, reported on 3 October 2008 on the cause of the valve failure and expressed two conclusions. First, the 22m Boss miniball valve was incompatible with the Uponor compression adaptor: the two components could not make a perfect fit because of conflicting screw threads....

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