Gloucestershire County Council v Richardson
| Jurisdiction | England & Wales |
| Judge | Lord Reid,Lord Pearce,Lord Upjohn,Lord Wilberforce,Lord Pearson |
| Judgment Date | 10 July 1968 |
| Judgment citation (vLex) | [1968] UKHL J0710-2 |
| Date | 10 July 1968 |
| Court | House of Lords |
[1968] UKHL J0710-2
House of Lords
Lord Reid
Lord Pearce
Lord Upjohn
Lord Wilberforce
Lord Pearson
Upon Report from the Appellate Committee, to whom was referred the Cause Gloucestershire County Council against Richardson (A.P.) (trading as W. J. Richardson & Son), that the Committee had heard Counsel, as well on Monday the 13th, as on Tuesday the 14th, Wednesday the 15th and Thursday the 16th, days of May last, upon the Petition and Appeal of the Gloucestershire County Council, of Shire Hall, Gloucester, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 23d of June 1967, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Case of Henry William Richardson (Assisted Person) (trading as W. J. Richardson & Son), lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of Her Majesty the Queen assembled, That the said Order of Her Majesty's Court of Appeal, of the 23d day of June 1967, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondent the Costs incurred by him in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Costs incurred by the said Respondent in respect of the said Appeal to this House, be taxed in accordance with the provisions of the Third Schedule to the Legal Aid and Advice Act 1949, as amended by the Legal Aid Act 1960.
My Lords,
I agree with the majority of your Lordships that this appeal should be dismissed.
My Lords,
The contractor in any particular field of business, when he engages to do certain work and supply material, impliedly warrants that the materials will be of good quality, unless the particular circumstances of the case show that the parties intended otherwise. To find the intention one must consider the express terms of the contract and any admissible surrounding circumstances.
Here the parties entered into a Royal Institute of British Architects contract, a complicated and sophisticated document. There is no express acceptance by either party of liability for the quality of the nominated materials. The contractor must comply with the instructions of the architect. He must accept the architect's nomination in respect of certain sub-contractors and nominated suppliers. No nominated sub-contractor, however, can be employed (clause 21) if the contractor makes reasonable objection to him or if, inter alia, the sub-contractor will not enter into a subcontract indemnifying the contractor against claims for negligence of the sub-contractor and "against the same obligations in respect of the sub-contract as those for which the contractor is liable in respect of this contract". These words seem to make it clear that the contractor is accepting liability in respect of work done by the nominated sub-contractor.
The situation with regard to nominated suppliers, however, is noticeably different. The clause (22) which deals with nominated suppliers follows directly on that which deals with nominated sub-contractors. It provides no veto on the ground of the contractor's reasonable objection, nor on the ground of the nominated supplier refusing to indemnify the contractor. This omission cannot, I think, be unintentional. It seems, in contrast to clause 21, to point to an intention that the contractor is not undertaking liability for materials provided by a nominated supplier. Otherwise he must surely have been given, as in the case of a nominated sub-contractor, an opportunity of making reasonable objections, and a right to insist on an indemnity from the supplier.
It would not be unreasonable for the parties to intend that an employer should take the responsibility for materials provided by nominated suppliers. They have been selected, without giving the contractor any right to express views, by the employer's own expert architect who has decided that the nominated goods are suitable for the purpose and who has made the preliminary arrangements with the suppliers either before or during the main contract. The contractor is simply instructed to obtain his supplies from the nominated supplier. It is the employer who, through his architect, alone arranges the price, which is liable to be reflected in the quality and who alone can insist on tests and checks of quality. All the circumstances of the nomination appear actually to exclude any reliance on the contractor's skill and judgment. And though the contractor receives a profit on the nominated supply, it is a controlled profit and he has certain duties to perform such as co-ordinating the delivery with the work and doing his best to see that there are no delays (see clause 18 (vii)).
On the other hand, if the contractor is not liable for material provided by nominated suppliers, the employer is left without a remedy for faulty material. For the contract, by clause 22, indicates clearly that the nominated supplier is in contractual relation with the contractor only and, although the employer is paying for the nominated materials, he pays the contractor for them and the contractor pays the nominated supplier. Thus to hold that the contractor is not liable for nominated supplies is to go against one of the important reasons for the general rule that there is a warranty of good quality in materials supplied under a contract for labour and materials, namely that the employer should have a remedy against the contractor who can in turn enforce it against the supplier with whom the fault lies.
Yet in spite of this important fact I think that the contrast between the wording of clause 21 and that of clause 22 persuades one to the view that the contract shows an intention to exclude a warranty by the contractor in respect of nominated supplies. And the particular circumstances of the case fortify this view. The employers (or their architect) employed a skilled engineer to advise in respect of the columns in question. The engineer, without any consultation with the contractor, prepared detailed designs of the columns, chose out Messrs. Cawood as suitable suppliers, and gave them such instructions as he considered were necessary to specify the composition of the columns. The architect obtained a quotation from Messrs. Cawood which was lower than the amount quoted by another firm and also substantially lower than the P.C. item, and which contained a substantial limitation of the purchaser's right of recourse in the event of the columns being defective. The architect presumably was satisfied with this and, without discussing the matter with the contractor, instructed him to accept the quotation.
The employers, through their architect, having directed the contractor to buy from a manufacturer who had substantially limited his own liability, it would not be reasonable to suppose that the parties were intending the contractor to accept an unlimited liability, which might have been very great, for these columns over whose manufacture he had no control whatsoever. It is suggested in argument by the Appellants that one should assume some implied intention that there will be liability on the contractor limited to the curtailed right of recourse provided under Messrs. Cawood's quotation. If so, one would have to imply in respect of each nominated supplier that there is a liability limited to the right of recourse provided in each particular subcontract of supply. But I see no ground for such a complicated implication which, if it existed, must surely have been embodied in express terms in clause 22. In my opinion, the limitation of recourse against the nominated supplier and the other particular circumstances in respect of the supply of the columns provide confirmation of the intention indicated by the contract itself, namely, that any warranty by the contractor in respect of the quality of the nominated supplies was to be excluded.
The defect in the columns was not, therefore, a matter for which the contractor was liable or at fault. Consequently he can rely on clause 18 (5) and claim that the works were delayed "by reason of the Architect's instructions given in pursuance of clause 1 of these conditions".
I cannot with respect accept the finding of the learned Official Referee "that the cause for the suspension of the work and consequent delay was the discovery of the defects in the columns and not the result of any instruction given" or that "the continuance … of the delay was occasioned by the parties pursuing the agreed course". And I think that he placed too much weight on the contractor's admission that he would have suspended operations of his own volition. I naturally hesitate to differ from so careful and experienced an Official Referee. But I see the problem from a somewhat different angle and that difference is a question of law turning on the meaning of the word "cause" and on the construction of the words (in clause 20) "is delayed for the period named in the appendix to these conditions by one or more of the causes … which are named in clause 18 of these conditions" and the words (in clause 18) "If … the works be delayed … (v) by reason of Architect's instructions".
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