Mg Construction Limited Against Agd Equipment Limited

JurisdictionScotland
JudgeLord Ericht
Neutral Citation[2020] CSOH 72
Docket NumberCA1/18
Date14 July 2020
CourtCourt of Session
Published date14 July 2020
OUTER HOUSE, COURT OF SESSION
[2020] CSOH 72
CA1/18
OPINION OF LORD ERICHT
In the cause
M G CONSTRUCTION LIMITED
Pursuer
against
AGD EQUIPMENT LIMITED
Defender
Pursuer: Marney; Brandon Malone & Company
Defender: Brown; Anderson Strathern LLP
14 July 2020
Introduction
[1] The pursuer, a construction company, purchased a pile driving hammer from the
defender. The hammer failed while in use on a construction site. The manufacturer
replaced the hammer. The pursuer raised an action against the supplier for recovery of the
amount paid in settlement of breach of the construction contract, loss of profit on the
remaining work due to be carried out, legal costs, consultancy fees and lost director’s time,
on the ground that the hammer was not of satisfactory quality under section 14 of the Sale of
Goods Act 1979.
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[2] The case called before me for proof before answer on liability. I heard the evidence
prior to the COVID-19 outbreak, with closing submissions being made by telephone due to
the restrictions resulting from the outbreak.
The failure
[3] A piling hammer (also known as a rig) is a hydraulic impact hammer used for pile
driving. It is attached to a leader which acts as a guide for the hammer so that verticality
may be easily maintained resulting in the piles being driven into the ground plum. The
leader is attached to the base excavator. The base excavator is a vehicle which is separate
from the hammer, but to which the hammer is attached. The base excavator provides the
necessary hydraulic power and ability to travel the machine from pile position to pile
position. The ram box, which is also known as a swivel arm, is part of the leader assembly.
[4] There was an incident with the hammer on 17 May 2015. The pursuer had been
contracted by Barhale Limited to drive piles on a site in Portobello. The ram box failed,
breaking into two parts, and the hammer collapsed.
[5] On inspection of the failed hammer, it became apparent that it had sheared along the
line of a pre-existing crack. The crack had gone all the way round. The crack had been
repaired by a weld. That weld will be referred to in this opinion as the “casualty weld”.
Metal plates had also been inserted within the box. There was also another weld, on the
surface of the ram box. That other weld will be referred to in this opinion as the “check
weld”.
[6] The pursuer’s position was that the casualty weld had not been made by the pursuer
and so must have been made prior to delivery. The defender’s position was that it had not
been made before delivery. The defender drew attention to a scenario (the “Defender’s
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Scenario”) which might explain the making of the casualty weld after delivery. The
Defender’s Scenario was that after taking delivery of the hammer the pursuer’s staff had
misused it by pushing it against piles which had not been inserted into the ground straight
in order to straighten them. The misuse caused the swivel arm to fail due to fatigue, and
that failure was repaired by the casualty weld shortly before the incident.
[7] The key issues at proof were whether the pursuer had proved that the casualty weld
had been made before delivery, and if so whether the pursuer had failed to mitigate or had
broken the chain of causation.
Statutory provision
[8] Section 14 of the Sale of Goods Act 1979 provides:
14.Implied terms about quality or fitness.
(1) Except as provided by this section and section 15 below and subject to any
other enactment, there is no implied [term] about the quality or fitness for
any particular purpose of goods supplied under a contract of sale.
(2) Where the seller sells goods in the course of a business, there is an implied
term that the goods supplied under the contract are of satisfactory quality.
(2A) For the purposes of this Act, goods are of satisfactory quality if they meet the
standard that a reasonable person would regard as satisfactory, taking
account of any description of the goods, the price (if relevant) and all the
other relevant circumstances.
(2B) For the purposes of this Act, the quality of goods includes their state and
condition and the following (among others) are in appropriate cases aspects
of the quality of goods
(a) fitness for all the purposes for which goods of the kind in question are
commonly supplied,
(b) appearance and finish,
(c) freedom from minor defects,

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