Young & Marten Ltd v McManus Childs Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Reid,Lord Pearce,Lord Upjohn,Lord Wilberforce,Lord Pearson |
| Judgment Date | 10 July 1968 |
| Judgment citation (vLex) | [1968] UKHL J0710-3 |
| Date | 10 July 1968 |
| Court | House of Lords |
[1968] UKHL J0710-3
Lord Reid
Lord Pearce
Lord Upjohn
Lord Wilberforce
Lord Pearson
House of Lords
Upon Report from the Appellate Committee, to whom was referred the Cause Young and Marten Limited against McManus Childs Limited, that the Committee had heard Counsel, as well on Monday the 6th as on Tuesday the 7th and Wednesday the 8th, days of May last, upon the Petition and Appeal of Young and Marten Limited, whose registered office is situate at Caledonian Works, Romford Road, Stratford, London E.15, 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 McManus Childs Limited, 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 Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
Some time before 1958 the Respondents decided to build a number of houses for sale. They contracted with Saunders. Saunders then sub-contracted with the Appellants for the rooling. There was a discussion about the type of tiles to be used and Saunders for "prestige" reasons decided to have a rather expensive type, Somerset 13, made by Browne of Bridgwater. I think that it is clear that Saunders, who was highly skilled and experienced, relied entirely on his own skill and judgment in making this decision. The Appellants' representatives agreed with his choice, but that does not appear to me to mean that Saunders relied to any extent on the judgment of the Appellants' representative. The Appellants then sub-contracted the tiling work to Acme, and Acme obtained the tiles from Browne.
The houses were completed and sold in 1958. But very soon these tiles began to give trouble. It is agreed that the defects in these tiles could not have been detected by any reasonable examination before they were fixed on the roofs. And it is agreed that generally these tiles are of good quality and that there must have been some fault in the manufacture of this batch. Various attempts were made to put matters right for which Browne assumed liability, but they were unavailing, and ultimately the owners of a number of the houses decided to reroof them and successfully sued the Respondents for the cost.
The Respondents brought in the Appellants as liable to them on an implied warranty. Normally the Appellants would then have brought in Acme and Acme would have brought in Browne. But before they could do so time had run out under the provisions of the Limitation Act. For reasons which it is not material to consider this case is proceeding on the footing that, although there was in fact no contract between the Appellants and the Respondents, Saunders must be regarded as the Respondents' agent who made a contract between them and the Appellants.
This is a contract for the supply of work and materials and this case raises a general question as to the nature and extent of the warranties which the law implies in such a contract. As regards the contractor's liability for the work done there is no dispute in this case: admittedly it must be done with all proper skill and care. The question at issue relates to his liability in respect of material supplied by him under the contract. The Appellants maintain that the warranty in respect of materials is similar to that in respect of work, so that, if the selection of material and of the person to supply it is left to the contractor, he must exercise due skill and care in choosing the material and the person to supply it. But where, as in this case, the material and the supplier were chosen by the Respondents, the Appellants maintain that there was no warranty as to the fitness or quality of the tiles. The Respondents admit that, if it is held that the choice of this type of tile was theirs and theirs alone, there can be no implied warranty that this type of tile was fit for the contract purpose. But they say that there still was a warranty that the tiles would be of good quality and that that warranty must be implied notwithstanding the fact that they left no choice to the Appellants in selecting the person who was to supply the tiles. If that is right then the Respondents must succeed. The loss was not caused by Somerset 13 tiles being unsuitable for the contract purpose: it was caused by the tiles which were supplied being of defective quality.
There is not very much authority on this matter so it may be well first to consider it as a question of principle. In my view no warranty ought to be implied in a contract unless it is in all the circumstances reasonable. If authority be required for that proposition I find it in the judgment of the Exchequer Chamber in Readhead v. Midland Railway Co. L.R. 4 Q.B. 379 at page 392:
"Warranties implied by law are for the most part founded on the presumed intention of the parties, and ought certainly to be founded on reason, and with a just regard to the interests of the party who is supposed to give the warranty, as well as of the party to whom it is supposed to be given."
I take first the general question of the contractor's liability where the material which he is required to use can be obtained from any one of several suppliers and the choice of suppliers is left to him. There is no doubt that in every case he is bound to make a proper inspection of the material before using it, and he will be liable if the loss is caused by the use of material which reasonable inspection would have shown to be defective. The question is whether he warrants the material against latent defects.
There are in my view good reasons for implying such a warranty if it is not excluded by the terms of the contract. If the contractor's employer suffers loss by reason of the emergence of the latent defect, he will generally have no redress if he cannot recover damages from the contractor. But if he can recover damages the contractor will generally not have to bear the loss: he will have bought the defective material from a seller who will be liable under section 14 (2) of the Sale of Goods Act because the material was not of merchantable quality. And if that seller had in turn bought from someone else there will again be liability so that there will be a chain of liability from the employer who suffers the damage back to the author of the defect. Of course the chain may be broken because the contractor (or an earlier buyer) may have agreed to enter into a contract under which his supplier excluded or limited his ordinary liability under the Sale of Goods Act. But in general that has nothing to do with the employer and should not deprive him of his remedy. If the contractor chooses to buy on such terms he takes the risk of having to bear the loss himself if the goods prove to be defective.
Moreover many contracts for work and materials closely resemble contracts of sale: where the employer contracts for the supply and installation of a machine or other article, the supply of the machine may be the main element and the work of installation be a comparatively small matter. If the employer had bought the article and installed it himself he would have had a warranty under section 14 (2), and it would be strange that the fact that the seller also agreed to install it should make all the difference.
The specialty in the present case is that these tiles were only made by one manufacturer. So the contractor had to buy them from him or from someone who bought from him. Why should that make any difference? It would make a difference if that manufacturer was only willing to sell on terms which excluded or limited his ordinary liability under the Sale of Goods Act, and that fact was known to the employer and the contractor when they made their contract. For it would be unreasonable to put on the contractor a liability for latent defects when the employer had chosen the supplier with knowledge that the contractor could not have recourse against him. If the manufacturer's disclaimer of liability caused him to supply the goods at a cheaper price, as in theory at least it should, the employer ought not to get the benefit of a cheap price as well as a warranty from the contractor.
A more difficult case would be where the employer and contractor had no reason to suppose, when they made their contract, that the manufacturer would refuse to sell subject to a seller's ordinary liabilities in respect of the goods which he sells. But I need not consider that case now because there is no suggestion that Brownes had refused to sell except on terms which limited their ordinary liability in respect of latent defects in their tiles. No doubt there will be some cases where, although the contractor had a right of recourse against the manufacturer, he cannot in fact operate that right. The supplier may have become insolvent, or, as in the present case, the action against the contractor may be so delayed that he has no time left in which to sue his supplier. But these cases...
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