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Douglas v Glenvarigill Co Ltd

Court of Session (Outer House) 05 February 2010

Case Analysis Where Reported Case Digest

[2010] CSOH 14; 2010 S.L.T. 634; 2010 G.W.D. 7-129; Official Transcript

Subject: Sale of goods Keywords: Breach of contract; Cars; Contracts of sale; Defective goods; Reasonable time; Rejection; Scotland Summary: In the case of a latent defect, time began to run for the purposes of the Sale of Goods Act 1979 s.35(4) as soon as the goods were delivered, albeit some level of delay in rejection might be reasonable if the defect was not immediately apparent, and it was too late to reject the goods after a period of 15 months without previous complaint. Abstract: The owner of a vehicle (D) raised an action against G, from whom he had purchased the vehicle, on the basis that G had breached the Sale of Goods Act 1979 s.14. D sought declarator that he was entitled to reject the vehicle, repayment of the purchase price, and damages of 15,000 in respect of losses arising from the breach. D had taken delivery of the vehicle in February 2005. He gave evidence that as of March 2006 the vehicle began to experience problems, and had suffered a spontaneous and rapid loss of power on one occasion, and had shut down into safety mode, slowing the vehicle significantly, on another. The vehicle was returned in May 2006 for initial repair but broke down immediately on collection. D intimated to G that he wished to reject the vehicle but G refused to accept the rejection and delivered the vehicle to D's home. The problems persisted and the vehicle was placed in storage. During that time a consultant automotive engineer (B) examined the vehicle on D's behalf and concluded that the problems had arisen from a defect with the communications hub. G subsequently made the necessary repairs. G submitted that (1) D had stated in evidence that he was satisfied with the vehicle at the time of delivery and that serious problems did not arise until 13 months later; further, evidence given by B was to the effect that it was merely possible that the defect existed at the time of sale; (2) the defect was ultimately found to be of a fairly trivial nature, and there was little evidence that, when the problems occurred, the vehicle's occupants were ever in any danger; there had accordingly been no breach of s.14; (3) D was entitled to damages however certain sums claimed were not due. The vehicle did not require to be placed in storage and could have

been left on the street, and neither comprehensive insurance nor road tax was necessary when the vehicle was in storage. D contended that if he had failed to timeously reject the vehicle and was deemed to have accepted it pursuant to s.35(4), his actions had amounted to a valid rescission of the contract under s.48C. Decree granted for 13,459.92. (1) It could reasonably be inferred that the defect existed from the date of delivery. There was nothing to cause it to arise at a later date, interference of any sort was inherently unlikely, and there was no evidence of such interference when B made his examination. (2) The defect was extremely serious albeit easily remedied. A vehicle which experienced a rapid loss of power and which would unexpectedly shut down into safety mode created a clear and obvious risk of danger to the vehicle's occupants and other road users due to its inability to travel at the same speed as other traffic. D had accordingly demonstrated a breach of s.14. (3) In the case of a latent defect, time began to run for the purposes of s.35(4) as soon as the goods were delivered, albeit some level of delay in rejection might be reasonable if the defect was not immediately apparent. If it had been intended that the period should run from the appearance of a defect that would have been expressly provided. Further, rejection was a relatively drastic remedy, and at a certain stage commercial closure was required to permit the parties to arrange their affairs on the basis that the goods had been effectively sold. In any event, damages remained as an alternative remedy, thus a buyer was not left without recourse against the seller. (4) A reasonable time within the meaning of s.35(4) had elapsed from delivery of the vehicle to the time it had been taken for initial repair, without intimation of rejection. D was thus deemed to have accepted the vehicle. There was no basis in the authorities for rejection where a latent defect manifested itself for the first time more than a year after delivery, moreover, in the present case, it appeared that D had had uninterrupted use of the vehicle from delivery to the time the major problems manifested themselves, and further, had waited until they re-appeared before taking the vehicle for repair. (5) D was entitled to damages of 13,459.92. It was appropriate to reimburse him for the cost of G's final examination and subsequent repairs, and further, in respect of the storage costs where the vehicle might otherwise have suffered damage or deterioration. D was also entitled to the wasted costs of comprehensive insurance and road tax from the date the vehicle was taken for initial repair until it was placed in storage. Further awards were due in respect of inconvenience, a diminution in the value of the vehicle due to G's initial incompetent remedial work, and depreciation. (6) D's submissions on rescission were not sufficiently detailed and he could not rely on s.48C. However, to allow resolution of the true issue in dispute, D was entitled, if he so wished, to have the case put out by order so as to make further submissions in this

regard. Judge: Lord Drummond Young Counsel: For the pursuer: Clark QC. For the defender: Gillies (Solicitor Advocate). Solicitor: For the pursuer: Balfour & Manson. For the defender: McGrigors LLP.

All Cases Cited

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J&H Ritchie Ltd v Lloyd Ltd [2007] UKHL 9; [2007] 1 W.L.R. 670; [2007] 2 All E.R. 353; [2007] 1 All E.R. (Comm) 987; [2007] Bus. L.R. 944; [2007] 1 Lloyd's Rep. 544; 2007 S.C. (H.L.) 89; 2007 S.L.T. 377; [2007] 1 C.L.C. 208; (2007) 157 N.L.J. 403; (2007) 151 S.J.L.B. 397; 2007 G.W.D. 9-171; Times, March 8, 2007; Official Transcript; HL; 2007-03-07 Fiat Auto Financial Services v Connelly 2007 S.L.T. (Sh Ct) 111; 2007 G.W.D. 15-293; Sh Ct (Glasgow); 200612-19 Lamarra v Capital Bank Plc 2007 S.C. 95; 2006 S.L.T. 1053; 2007 S.C.L.R. 719; 2006 G.W.D. 33-686; IH (Ex Div); 2006-10-10 Mack v Glasgow City Council [2006] CSIH 18; 2006 S.C. 543; 2006 S.L.T. 556; 2006 Rep. L.R. 95; 2006 Hous. L.R. 2; 2006 G.W.D. 15-287; IH (Ex Div); 2006-03-30 Jones v Callagher (t/a Gallery Kitchens & Bathrooms) [2004] EWCA Civ 10; [2005] 1 Lloyd's Rep. 377; Official Transcript; CA (Civ Div); 2004-01-13 Clegg v Andersson (t/a Nordic Marine) [2003] EWCA Civ 320; [2003] 1 All E.R. (Comm) 721; [2003] 2 Lloyd's Rep. 32; (2003) 100(20) L.S.G. 28; Times, April 14, 2003; Official Transcript; CA (Civ Div); 2003-03-11 Truk (UK) Ltd v Tokmakidis GmbH [2000] 2 All E.R. (Comm) 594; [2000] 1 Lloyd's Rep. 543; QBD (Merc); 1999-12-22 Charles Henshaw & Sons Ltd v Antlerport Ltd [1995] C.L.C. 1312; Scotsman, June 28, 1995; OH; 1995-06-02 Rogers v Parish (Scarborough) Ltd [1987] Q.B. 933; [1987] 2 W.L.R. 353; [1987] 2 All E.R. 232; [1987] R.T.R. 312; (1987) 6 Tr. L.R. 55; (1987) 84 L.S.G. 905; (1987) 131 S.J. 223; CA (Civ Div); 1986-11-05

Bernstein v Pamson Motors (Golders Green) Ltd [1987] 2 All E.R. 220; [1987] R.T.R. 384; Times, October 25, 1986; QBD; 1986-10-24 Smith v Park 1980 S.L.T. (Sh. Ct.) 62; Sh Pr; 1979-03-22 Mechans Ltd v Highland Marine Charters Ltd 1964 S.C. 48; 1964 S.L.T. 27; IH (2 Div); 1963-11-22 Burrell v Harding's Executrix 1931 S.L.T. 76; OH; 1930-12-09 Nelson v William Chalmers & Co Ltd 1913 S.C. 441; 1913 1 S.L.T. 190; IH (Ex Div); 1912-12-17 Munro & Co v Bennet & Son 1911 S.C. 337; 1911 1 S.L.T. 120; IH (1 Div); 1910-12-23 Aird & Coghill (A Firm) v Pullan & Adams (A Firm) (1904) 7 F. 258; (1904) 12 S.L.T. 603; IH (2 Div); 1904-12-22 Hick v Raymond & Reid [1893] A.C. 22; [1891-4] All E.R. Rep. 491; HL; 1892-12-16 Hadley v Baxendale 156 E.R. 145; (1854) 9 Ex. 341; Ex Ct; 1854-02-23

All Cases Citing

Mentioned by Richford v Parks of Hamilton (Townhead Garage) Ltd Official Transcript; Sh Ct (South Strathclyde) (Hamilton); 2012-01-10

Significant Legislation Cited

Sale of Goods Act 1979 (c.54) s.14 Sale of Goods Act 1979 (c.54) s.35(4) Sale of Goods Act 1979 (c.54) s.48C

Legislation Cited

COMMISSION DIRECTIVE 94/44 OF SEPTEMBER 19, European Consumer Sales Directive Sale and Supply of Goods Act 1994 (c.35) s.2(1) Sale and Supply of Goods to Consumers Regulations 2002 (SI 2002/3045) Sale of Goods Act 1893 (c.71) Sale of Goods Act 1893 (c.71) s.158(1) Sale of Goods Act 1893 (c.71) s.15B

Sale of Goods Act 1893 (c.71) s.35 Sale of Goods Act 1893 (c.71) s.35(4) Sale of Goods Act 1893 (c.71) s.48C Sale of Goods Act 1979 (c.54) Sale of Goods Act 1979 (c.54) s.14 Sale of Goods Act 1979 (c.54) s.158(1) Sale of Goods Act 1979 (c.54) s.15B Sale of Goods Act 1979 (c.54) s.15B(1) Sale of Goods Act 1979 (c.54) s.15B(1)(b) Sale of Goods Act 1979 (c.54) s.35 Sale of Goods Act 1979 (c.54) s.35(1)(a) Sale of Goods Act 1979 (c.54) s.35(1)(b) Sale of Goods Act 1979 (c.54) s.35(2)(a) Sale of Goods Act 1979 (c.54) s.35(4) Sale of Goods Act 1979 (c.54) s.35(6) Sale of Goods Act 1979 (c.54) s.35(6)(a) Sale of Goods Act 1979 (c.54) s.48A Sale of Goods Act 1979 (c.54) s.48A(2)(a) Sale of Goods Act 1979 (c.54) s.48A(2)(b) Sale of Goods Act 1979 (c.54) s.48B Sale of Goods Act 1979 (c.54) s.48C Sale of Goods Act 1979 (c.54) s.53A Sale of Goods Act 1979 (c.54) s.53A(1) Sale of Goods Act 1979 (c.54) s.59

Journal Articles

Defective cars, acceptance and remedies Acceptance; Breach of contract; Cars; Defective goods; Reasonable time; Rejection; Scotland; Supply of goods. Cons. L. Today 2011, Feb, 3 Faulty goods, rejection and connected lender liability Consumer credit agreements; Contracts of sale; Defective goods; Linked transactions; Reasonable time; Rejection; Rescission; Scotland.

Edin. L.R. 2011, 15(1), 111-115

Books

Benjamin's Sale of Goods 8th Ed. Incorporating Second Supplement Chapter: Chapter 12 - Remedies in Respect of Defects Documents: Section 2. - Breach of Contractual Term Benjamin's Sale of Goods 8th Ed. Incorporating Second Supplement Chapter: Chapter 12 - Remedies in Respect of Defects Documents: Section 3. - Additional Rights of Buyer in Consumer Cases Benjamin's Sale of Goods 8th Ed. Chapter: Chapter 12 - Remedies in Respect of Defects Documents: Section 2. - Breach of Contractual Term Benjamin's Sale of Goods 8th Ed. Chapter: Chapter 12 - Remedies in Respect of Defects Documents: Section 3. - Additional Rights of Buyer in Consumer Cases Chitty on Contracts 31st Ed. Incorporating First Supplement Chapter: Chapter 43 - Sale of Goods Documents: Sub-section (a) - Additional Remedies of the Buyer in Consumer Cases Chitty on Contracts 31st Ed. Incorporating First Supplement Chapter: Chapter 43 - Sale of Goods Documents: Sub-section (c) - Examination and Acceptance Chitty on Contracts 31st Ed. Chapter: Chapter 43 - Sale of Goods Documents: Sub-section (a) - Additional Remedies of the Buyer in Consumer Cases Chitty on Contracts 31st Ed. Chapter: Chapter 43 - Sale of Goods Documents: Sub-section (c) - Examination and Acceptance Gloag and Henderson: The Law of Scotland 13th Ed. Chapter: Chapter 12 - Supply of Goods Documents: Chapter 12 - Supply of Goods Prescription and Limitation of Actions (SULI) 2nd Ed. Johnston Chapter: Chapter 4 - The Beginning and End of the Prescriptive Period Documents: Contract

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