Caithness Flagstone Limited Against Ballyvesey Holdings Limited
| Jurisdiction | Scotland |
| Judge | Sheriff W Holligan,Sheriff A G McCulloch,Sheriff Principal D C W Pyle |
| Neutral Citation | [2020] SAC (CIV) 1 |
| Court | Sheriff Appeal Court |
| Docket Number | GLW-CA187-17 |
| Date | 28 January 2020 |
| Published date | 29 January 2020 |
SHERIFF APPEAL COURT
[2020] SAC (CIV) 1
GLW-CA187-17
Sheriff Principal D C W Pyle
Appeal Sheriff W Holligan
Appeal Sheriff AG McCulloch
OPINION OF SHERIFF PRINCIPAL D C W PYLE
in the cause
CAITHNESS FLAGSTONE LIMITED, a company incorporated under the Companies Acts
(Registration No SC465433) and having its registered office at Westerlea, Miller Avenue
Wick, Caithness, KW1 4DF
Pursuer and Appellant
against
BALLYVESEY HOLDINGS LIMITED, a company incorporated under the Companies Acts
(Registration No 03067227) and having its registered office c/o Montracon Limited, Carr Hill,
Doncaster, South Yorkshire, DN4 8DE
Defender and Respondent
Act: McIvride QC, instructed by Harper McLeod LLP
Alt: Borland QC and Manson, advocate, instructed by MacRoberts LLP
28 January 2020
Introduction
[1] The appellant is based in Wick. It extracts Caithness stone and manufactures
products from it. The quarrying produces stone waste. The appellant became aware of a
number of major infrastructure projects in the north of Scotland. It decided that there was
an opportunity for it to supply crushed stone for these projects. To do so it needed to
acquire a stone crusher. It hired one from the respondent by way of a hire purchase
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agreement. The appellant avers that the stone crusher was not of satisfactory quality in that
it kept breaking down and even when operated was incapable of the volume of crushed
stone the appellant had expected. It became aware that the crusher was not owned by the
respondent, which the appellant regarded as a breach of contract. The appellant rescinded
the contract and now seeks damages for loss of profit and return of instalments paid under
the agreement.
[2] The action began in Wick Sheriff Court but was transferred to the Commercial Court
in Glasgow. A preliminary proof was held. The sheriff found in favour of the respondent.
That interlocutor is now appealed to this court.
[3] The appeal concerns two principal matters: first, the sheriff’s findings in fact on the
exclusion of liability and her approach to the application of the Unfair Contract Terms
Act 1977 to those findings; secondly, the correct construction of certain provisions contained
within the Supply of Goods (Implied Terms) Act 1973.
[4] The sheriff was not invited to determine as a matter of fact that the stone crusher was
or was not of satisfactory quality. This was because the question would be academic if she
decided that the statutory warranty had been excluded by the hire purchase agreement.
That was the first issue. The second was whether the appellant was entitled to rescind the
contract because of what it avers was a breach by the respondent of the 1973 Act.
The Unfair Contract Terms Act 1977
[5] The respondent is the parent company of a group of companies, one of whom is
Scotia Plant Limited which supplied the stone crusher. The respondent has a trading
division which trades under the name of Ballyvesey Finance. Clause 8 of the hire purchase
agreement is in the following terms:
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“8 Exclusion of Liability
We both recognise that there is risk that the Goods may not perform as expected and
may not be satisfactory. When Goods are financed the risk of them not working
satisfactorily or according to any representations made may be assumed by you, us
or the supplier of them.
You and we both appreciate that the allocation of risk is a matter of agreement and
have decided that you shall bear the risk on the terms set our herein as you
acknowledge that we are only a financier of goods and you yourself have chosen the
Goods from the supplier.
Accordingly, you and we both agree:
8.1 That the supplier you have chosen is not our agent and is not our agent [sic] and
is not authorised to make statements or representations binding upon us;
8.2 That you will obtain any warranties relating to the suitability or performance of
the Goods which you require direct from the supplier. If we have the benefit of any
such warranties, then we shall transfer the benefit of them to you if you so request;
8.3 That save in the event of death or personal injury caused by our negligence we
shall have no liability for the description, state, condition, suitability or performance
of the Goods and any term otherwise implied by law are [sic] expressly excluded to
the full extent permitted by law;
8.4 If contrary to clause 8.3 above, the law requires terms to be implied into this
Agreement, then you and we both agree that we not [sic] liable for any breach of
them because if the breach of any such term had been allocated differently, then we
would have charged higher Payments or we would not have entered into this
Agreement;
8.5 In on [sic] event will we be liable to you in contract or other area of law including
any liability for negligence (save in the event of death or personal injury caused by
our negligence) for any loss of revenue, anticipated savings or profits or any loss of
use or value or for any indirect or consequential loss; and
8.6 Notwithstanding the above, our maximum liability is limited to:
(a) in respect of indirect or consequential loss an amount not exceeding the
Cash Price (exc. VAT) of the Goods as shown in the Financial Details overleaf;
(b) in respect of any other form of loss, the lesser of the cost of repairing the
Goods, their dilution in value or the total of the Payments outstanding at the
date you suffer the loss. You agree that it is both reasonable and acceptable
for us to exclude or limit our liability to you in this way…”
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