Rogers v Parish (Scarborough) Ltd

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE MUSTILL,LORD JUSTICE WOOLF,SIR EDWARD EVELEIGH
Judgment Date05 November 1986
Judgment citation (vLex)[1986] EWCA Civ J1105-6
Date05 November 1986
Docket Number86/0992

[1986] EWCA Civ J1105-6

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE LEEDS CROWN COURT

QUEEN'S BENCH DIVISION

Royal Courts of Justice

Before:

Lord Justice Mustill

Lord Justice Woolf

Sir Edward Eveleigh

86/0992

Peter Mark Rogers

and

Peter Mark Rogers (Junior)
and
Parish (Scarborough) Limited

and

Lombard North Central Plc

and

Land Rover (UK) Limited

MR W. T. J. HIRST, instructed by Messrs Cook Fowler & Outhet (Scarborough), appeared for the Appellants (Plaintiffs).

MR D. M. A. BRYANT, instructed by Messrs Thorpe & Co. (Scarborough), appeared for the First Respondents (First Defendants).

MR M. S. W. HOYLE, instructed by Messrs Wilde Sapte, appeared for the Second Respondents (Second Defendants).

LORD JUSTICE MUSTILL
1

This is an appeal by plaintiffs against a judgment given in favour of two defendants by His Honour Judge Herrod, Q.C., sitting as a Deputy High Court Judge in Leeds. The first plaintiff is a Yorkshire businessman; the first defendants are motor dealers with a franchise for the sale of Range Rovers; and the second defendants are a finance house. During May 1980 two Range Rovers were delivered by the manufacturers to the first defendants' premises. The particulars of their registration numbers are immaterial; it is sufficient to say that one of the vehicles was coloured green and the other yellow.

2

For a number of months the vehicles were stored in an open compound. Afterwards they were moved to showrooms indoors. It proved necessary as a consequence of their prolonged storage to clean up some rust on the wheels of the vehicles and to touch up the paintwork to take account of some minor damage during delivery.

3

On 6th November 1981 the green Range Rover was sold under a conditional sale agreement to the plaintiffs. The transaction took a conventional shape, the vehicle being sold by the dealers to the finance house and then re-sold by the latter to the plaintiffs. It was an express term of the sale agreement by the finance house to the plaintiffs that (page 83):

4

"7(a) The Seller supplies the Goods to the Buyer for his use with the benefit…of the following which are implied by statute:

5

"(ii) a condition that the Goods are of merchantable quality;

6

"(d) Nothing in this agreement does or will affect the statutory rights of the Buyer in respect of the Goods." It appears that at the time of the sale, or perhaps at the time of delivery under the sale, the plaintiff was handed a warranty document. This document, so far as material to the present dispute, reads as follows (page 43):

7

"Should any part of the vehicle require repair or replacement as a result of a manufacturing or material defect within twelve months from the date on which the vehicle was handed over to the first owner, the part will be repaired or replaced completely free of charge by your authorised Dealer, regardless of any change of ownership during the period covered. Any part so repaired or replaced will benefit from these arrangements for the balance of the period applicable to the vehicle." After certain exclusions the document went on as follows: "Tour statutory rights and obligations as against the supplier are not in any way affected by this statement."

8

The warranty document also prescribed a procedure which the purchaser was to follow if he wished to take advantage of the warranty, and this included a liberty to take the vehicle to another franchised dealer if it was inconvenient to return it to the vendor for repair. It does not appear from the documents before us whether this warranty was signed or precisely what its contractual status was intended to be, but primarily at least it must have constituted an engagement by the manufacturers collateral to the sale contract itself.

9

The price at which the vehicle was sold was some £16,000. After a few weeks' use it proved unsatisfactory and was returned by the plaintiff to the dealers. By agreement between the parties a yellow vehicle of the same type was substituted for the original subject-matter of the sale. The parties were thereafter content to have their relationship governed by the same contractual terms as had applied to the original purchase and sale. All the proceedings in the present action have gone forward on that basis.

10

Unfortunately it proved that the yellow vehicle was no more satisfactory than its predecessor. It is now known, as the learned judge found in his judgment, that by the time the vehicle was sold to the plaintiffs it had deteriorated to the extent that oil seals at vital junctions were no longer sound and that the defective seals permitted the loss of significant quantities of oil. It also proved to be the case that the engine and the gearbox of the vehicle had defects at the time of sale. After a series of inspections and attempts at repair it was found as late as June 1982, some six months after the delivery of the second vehicle, that the engine was still misfiring at all road speeds and that excessive noise was emitting from the gearbox and the transfer box. In addition the vehicle was suffering, as the learned judge has found, from substantial defects as regards the bodywork. In all the condition of the vehicle was such that, as the learned judge has found, "it must be said that the defects to the engine, the gearbox and the bodywork reflect great discredit upon the inspection procedures at the Land Rover factory".

11

As I have already said, the vehicle had been subjected to a number of inspections during the months following its delivery and also to attempts to put it right. During this period the plaintiff had been able to drive it for upwards of 5,500 miles, albeit in a manner which gave him no satisfaction. In the end, however, he lost patience, and during May 1982 he gave notice to the dealers that the car was rejected. We are told that thereafter it has remained in the possession of the plaintiff since the defendants were unwilling to take it back.

12

In due course the plaintiff instituted the present action against both the dealers as first defendants and the finance house as second defendants. The latter were plainly parties to a direct contract of sale with the plaintiffs. The position of the first defendants might be more complex, but they are content to have the issue of liability dealt with on the basis that they are in privity with the plaintiffs and that their liabilities are to be assessed in precisely the same manner.

13

In these circumstances two questions arise: first whether the defendants were in breach of an express promise that the vehicle was new; and second whether they were in breach of an express or implied promise that the car would be in merchantable condition. I say "express or implied" because there was, as I have already indicated, an express promise by the second defendants. In the event, however, both the defendants and the plaintiffs have been content to treat this case as if it were governed by the provisions relating to implied terms created by Section 14 of the Sale of Goods Act 1979, and in particular by the definition of the words "merchantable quality" which are to be found in Section 14(6) of that Act.

14

It is convenient to deal first with the contention that the goods were unmerchantable at the time of delivery and that the plaintiff was accordingly entitled to reject them. An implied term as to merchantability has been governed by statute, the Sale of Goods Act, since 1893. It was however subject to important modification by the Supply of Goods (Implied Terms) Act 1973, as regards both a change in the wording of Section 14(2) itself and the addition of a new definition of merchantable quality. These were re-enacted with a minor alteration as regards the definition in Section 14 of the Sale of Goods Act 1979, the material parts of which read as follows.

15

Section 14(2): "Where the seller sells goods in the course of a business, there is an implied condition that the goods supplied under the contract are of merchantable quality, except that there is no such condition—

16

"(a) as regards defects specifically drawn to the buyer's attention before the contract is made; or

17

"(b) if the buyer examines the goods before the contract is made as regards defects which that examination ought to reveal."

18

Section 14(6): "Goods of any kind are of merchantable quality within the meaning of subsection (2) above if they are as fit for the purpose or purposes for which goods of that kind are commonly bought as it is reasonable to expect having regard to any description applied to them, the price (if relevant) and all the other relevant circumstances."

19

In the course of argument before us our attention was drawn to various expressions of opinion in cases decided before the enactment of the 1973 legislation as to the precise significance of the term "merchantable quality". In my judgment this is not a practice to be encouraged. The 1973 Act was an amending Act and it cannot be assumed that the new definition was included simply because the draftsman saw a convenient opportunity to reproduce in more felicitous and economical terms the gist of the speeches and judgments previously delivered. The language of Section 14(6) is clear and free from technicality, and it should be sufficient in the great majority of cases to enable the fact-finding judge to arrive at a decision without exploring the intricacies of the prior law. In my judgment the present is not one of those exceptional cases where it may be necessary to have recourse to the former decisions in order to give...

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