Slater v Finning Ltd [1996] UKHL 59

UKHL
Slater v Finning Ltd
[1996] UKHL 59 · 1996-07-04
The cause called in the House of Lords before Lord Keith of Kinkel, Lord Griffiths, Lord Jauncey of Tullichettle, Lord Slynn of Hadley and Lord Steyn on 10 and 11 June 1996.

At delivering judgment, on 4 July 1996—

LORD KEITH OF KINKEL —My Lords, this appeal turns on the true construction, and application to the facts of the case, of sec 14(3) of the Sale of Goods Act 1979, which provides: [his Lordship quoted the terms of sec 14(3) and continued:]The pursuers and appellants are owners of a motor fishing vessel Aquarius II , which they acquired second hand in 1981. The vessel was equipped with a 12 cylinder diesel engine (D 398) manufactured by the Caterpillar Tractor Co, having a horsepower of 750. In 1985 the appellants decided to have the overall length of the vessel increased, so as to produce greater fish carrying capacity. The work to achieve this was carried out at a yard in Skagen, Denmark. At the same time the appellants decided to uprate the power of the engine from 750 to 850 hp, and the necessary work was carried out by Caterpillar engineers in Denmark. The vessel then returned to her home port of Fraserburgh. In September 1985 the appellants called in the defenders and respondents, who are suppliers of marine diesel engines and components manufactured by Caterpillar, because the power of the vessel's engine did not appear to have been increased. The respondents' engineer did some work on the engine and advised that it should shortly be overhauled as it was using too much oil. In March 1986 an overhaul was carried out by the vessel's own engineers, assisted by one other man. Various components were replaced and others were checked and adjusted. Later the vessel's main engine bearings failed while she was at sea and on her return to port the respondents were again called in. It was found that the crankshaft required to be replaced, and the respondents' representative advised that the camshaft should also be replaced, since it was worn to some extent and replacement could conveniently be carried out while the engine was lifted out for replacement of the crankshaft. The appellants agreed, and the respondents arranged for the supply of a new camshaft from Caterpillar. The old camshaft was numbered 5L2880 (5L). The new camshaft which Caterpillar supplied was numbered 1W1854 (1W), a redesigned model which had been introduced by Caterpillar for the D398 engine in February 1982. The redesigned model had a different profile of the exhaust cams, which Caterpillar said reduced the contact stress on the cams and would lower the rate of wear and extend the service life of the camshaft. They also said that the change in design had no effect on engine performance and that the new camshaft could be used in place of the former camshaft in all earlier engines. In May 1986 the new 1W camshaft was fitted to the engine, which was reinstalled with its new crankshaft also. At the same time the gearbox was realigned by another company. Satisfactory sea trials were held and the vessel went on fishing trips but noises were heard coming from the engine, which had at the time been running for about 50 hours, and the vessel put back to Fraserburgh. The respondents were again called in, and it was found that no 6 exhaust cam lobe was badly worn. It was decided to replace completely the newly installed camshaft and followers, and this was done with another 1W model, the work being completed on 11 June 1986. Further trouble was encountered shortly afterwards, and the followers on no 9 and no 1 exhaust valves, which were found to be worn, were replaced. There was a trouble free period from the end of July till towards the end of November 1986, but then further tapping noises were heard and the vessel returned to Fraserburgh. The respondents again attended and found that no 4 exhaust follower was badly worn. It was replaced, but then it was decided again to replace the whole camshaft with its followers and cam blocks, again with the 1W model. Extensive vibration tests were carried out in an endeavour to trace the cause of the trouble. Aquarius II set off for another fishing trip in the English Channel in January 1987, but after about four weeks at sea noises were again heard coming from the engine, and she put into Plymouth. Representatives from the respondents attended, and also Mr James Carnegy, a marine surveyor from Aberdeen. No 6 exhaust valve was found to be worn. Mr Carnegy considered that it would be unsafe for the vessel to put to sea. A number of meetings were held with representatives of all interested parties, including Caterpillar, but no agreement was reached as to the cause of the trouble. The respondents offered a complete overhaul of the engine free of charge, but the appellants insisted that a new engine would be the only satisfactory solution. Aquarius II was towed to Great Yarmouth, where a new Caterpillar engine of a different design was installed.The old engine was sold and eventually found its way to South Africa, where, after an extensive overhaul by the Caterpillar dealer there, it was installed in a vessel called Ocean Spray . It appears that the overhaul did not include replacement of the camshaft or followers. Thereafter the Ocean Spray went on extensive fishing trips lasting on average 54 days and logged many thousands of miles without encountering any trouble with the camshaft. There was evidence that 1W camshafts installed in hundreds of other D398 engines had operated without giving any trouble.The appellants raised the present action against the respondents in April 1989, concluding for payment of some £662,500 by way of damages on the ground of breach by the respondents of the condition contained in s 14(3) of the Act of 1979. The respondents counterclaimed for the sum of some £63,700 with interest in respect of goods and services supplied by them to the appellants and unpaid for.A proof was heard before Lord Weir, who on 22 January 1993 assoilzied the respondents from the conclusions of the summons and gave judgment in their favour for the sum counterclaimed with interest, amounting in all to £82,826. After an elaborate review of the evidence, which included expert evidence on both sides, the Lord Ordinary concluded that the cause of the failure of the camshafts was excessive torsional resonance excited by some cause external to the engine and the camshafts themselves. The Lord Ordinary accepted the evidence of the witness Dr Halleen, an employee of the Caterpillar Co, of which he said this:
‘The effect of Dr Halleen's evidence was that in his view whatever caused the torsional resonance to be excited and so leading to damage, it was not the 1W camshafts, which were supplied by the defenders, but that the cause had to be an external one. It is important to observe that there was no suggestion at any time that external forces could not have been responsible. The inability to establish what precisely was the external force is, in my opinion, immaterial. The mystery might have been unravelled if further examination of the engine and its associated parts had taken place before it had been removed from the Aquarius . This did not occur so the problem to that extent remains unsolved. But what has been established quite convincingly is that whatever the cause, it was not due to excitation coming from within the engine or any part of it which, added to the torsional frequency inherent in the engine, could have led to resonance and so to the failures. In particular, in my judgment, the fitting of these camshafts were not responsible for the failures which were observed.’
Later, under reference to the terms of sec 14 (3), the Lord Ordinary said:
‘The question which has to be borne in mind is, "What was the specified purpose?" The purpose for which the camshafts and followers were supplied was for use as competent parts of the engine of the pursuers' fishing vessel. No question arises as to the manner in which these parts were installed. This case is not concerned with a contract of services. There is no evidence that the defenders were told of any special circumstances concerning this engine which would have made the requirement for a new camshaft any different from that of any other D398 engine. The defenders supplied the pursuers with the camshaft and followers appropriate to this type of engine in 1986. The proper question is whether the inference can be drawn that they themselves were unfit for their intended purpose.
‘The answer to that question is to be derived from my analysis of the evidence, and, in my opinion, the evidence demonstrates that the camshafts and their followers were in fact fit for their purpose. The damage observed in them from time to time was not due to their unfitness to fulfil the purpose, but were the consequences of external factors. But for these factors, they would not have failed. That, in my judgment, is a complete answer to the pursuers' case.’
The appellants reclaimed, and on 30 November 1994 the Second Division (Lord Justice-Clerk Ross, Lord Clyde and Lord Morison) refused the reclaiming motion and affirmed the interlocutor of the Lord Ordinary, subject to an agreed adjustment of the interest element in his award in favour of the respondents. The appellants now appeal to your Lordships' House.The argument for the appellants did not involve any challenge to the Lord Ordinary's findings in fact. It was accepted that the excessive torsional resonance which resulted in damage to the camshafts was caused by some unascertained force external to the engine and the camshafts themselves. It was argued, however, that the condition to be implied by sec 14(3) of the Act of 1979 was properly to be related to Aquarius II as a vessel having its own peculiar characteristics, including the possession of a tendency to give rise to excessive torsional resonance in the engine camshaft. The appellants had made known to the respondents that the camshafts were being bought for the specific purpose of installation in Aquarius II . The respondents therefore took the risk that Aquarius II might have some unknown and unusual characteristic such as would cause the camshafts to be subjected to excessive wear. In the event the camshafts proved not to be reasonably fit for use as part of the engine of Aquarius II .Counsel for the appellants relied on Cammell Laird & Co Ltd v. The Manganese Bronze and Brass Co Ltd. In that case the defendants had contracted to supply, for two ships under construction by the plaintiffs, two propellers according to specifications provided, and to the entire satisfaction of the plaintiffs and the shipowners. On trials the propeller fitted to one of the ships made so much noise that the vessel could not be classed A1 at Lloyds, though it worked perfectly well on the other ship. A second propeller was made for the first ship and proved equally unsatisfactory. A third propeller, however, worked quite silently. The plaintiffs sued the defendants for breach of contract, founding inter alia on sec 14(1) of the Sale of Goods Act 1893, the statutory predecessor of sec 14(3) of the Act of 1979. This House held that the defendants had been in breach of sec 14(1). There was an implied condition that the propeller should be reasonably fit for use on the particular ship for which it was required, and it was not.The case does not however, in my opinion, assist the appellants. The propeller was not a standard part to be fitted to a standard propulsion plant. It was specifically manufactured for a specific ship. Lord Macmillan at p 418, dealing with the plaintiffs' case that the propeller was not to their satisfaction nor that of the shipowners, said: ‘The appellants wanted a propeller that would work. How could they know whether it was satisfactory until they had tried it? It has been proved that the unsatisfactory operation of the two discarded propellers was not due to the terms of the specification or to the way in which they were fitted to the ship or to any peculiarity in the ship itself or its engines, for at the third attempt the respondents supplied a propeller made to the same specification, which, when similarly fitted to the ship, worked satisfactorily; and a propeller made by the respondents to a practically identical specification for a sister ship also worked satisfactorily. The experts appear to have found great difficulty in ascertaining why the first two propellers worked unsatisfactorily; but it is, I think, demonstrated that the cause resided in the propellers themselves."In the present case the Lord Ordinary has found that cause of the trouble did not lie in the camshafts themselves but in some external feature peculiar to Aquarius II .The case of Griffiths v. Peter Conway Ltd is closer to the point. There the plaintiff had purchased from the defendants a Harris tweed coat, which had been specially made for her. Shortly after she had begun to wear the coat she contracted dermatitis. She sued the defendants for damages, claiming breach of sec 14(1) of the Act of 1893 in that the coat was not reasonably fit for the purpose for which it was supplied. It was proved that the plaintiff's skin was abnormally sensitive, and that there was nothing in the coat which would have affected the skin of a normal person. The defendants were not aware of the plaintiff's abnormal sensitivity, and the plaintiff herself was also unaware of it. Branson J dismissed the action and his judgment was affirmed by the Court of Appeal. Sir Wilfrid Greene MR quoted the relevant findings of the trial judge and continued at p 691: ‘That finding is, of course, that no normal skin would have been affected by this cloth. There was nothing in it which would affect a normal skin, but the plaintiff unfortunately had an idiosyncrasy, and that was the real reason why she contracted this disease.
‘On the basis of that finding, which is not challenged, Mr Morris says:

"Take the language of the section, and the present case falls within it."

He says that the buyer, Mrs Griffiths, expressly made known to the defendants the particular purpose for which the coat was required—that is to say, for the purpose of being worn by her, Mrs Griffiths, when it was made. Once that state of affairs is shown to exist, Mr Morris says that the language of the section relentlessly and without any escape imposes upon the seller the obligation which the section imports.
‘It seems to me that there is one quite sufficient answer to that argument. Before the condition as to reasonable fitness is implied, it is necessary that the buyer should make known, expressly or by implication, first of all the particular purpose for which the goods are required. The particular purpose for which the goods were required was the purpose of being worn by a woman suffering from an abnormality. It seems to me that, if a person suffering from such an abnormality requires an article of clothing for his or her use, and desires to obtain the benefit of the implied condition, he or she does not make known to the seller the particular purpose merely by saying:

"The article of clothing is for my own wear."

The essential matter for the seller to know in such cases with regard to the purposes for which the article is required consists in the particular abnormality or idiosyncrasy from which the buyer suffers. It is only when he has that knowledge that he is in a position to exercise his skill or judgment, because how can he decide and exercise skill or judgment in relation to the suitability of the goods that he is selling for the use of the particular individual who is buying from him unless he knows the essential characteristics of that individual? The fact that those essential characteristics are not known, as in the present case they were not known, to the buyer does not seem to me to affect the question. When I speak of "essential characteristics" I am not, of course, referring to any variations which take place and exist within the class of normal people. No two normal people are precisely alike, and, in the matter of sensitiveness of skin, among people who would be described as normal their sensitiveness must vary in degree.’The reasoning contained in that passage is directly applicable to the facts of the present case. The particular purpose for which the camshafts were here required was that of being fitted in the engine of a vessel which suffered from a particular abnormality or idiosyncrasy, namely a tendency to create excessive torsional resonance in camshafts. The respondents, not being made aware of that tendency, were not in a position to exercise skill and judgment for the purpose of dealing with it. Nor were they in a position to make up their minds whether or not to accept the burden of the implied condition, a matter to which the Master of the Rolls alludes at p 692. It is to be noted that the Master of the Rolls specifically mentions that the plaintiff was unaware of her abnormal sensitivity.In Christopher Hill Ltd v. Ashington Piggeries Ltd a firm of mink breeders had contracted with certain sellers for the supply of animal feedstuff. The feedstuff supplied caused thousands of mink to die because one of the ingredients, Norwegian herring meal, contained a toxic chemical agent called ‘DMNA’. This House, reversing the Court of Appeal, held that the sellers were liable to the buyers inter alia for breach of sec 14(1) of the Act of 1893. It was proved that herring meal containing DMNA was deleterious to a wide variety of animals, not only to mink. On the other hand mink were more sensitive to it than other animals. Lord Wilberforce said, at [1972] AC, p 490:
‘If mink possessed an idiosyncrasy, which made the food as supplied unsuitable for them though it was perfectly suitable for other animals, this would be the buyers' responsibility, unless, as is not the case here, they had made this idiosyncrasy known to the sellers so as to show reliance on them to provide for it. But any general unsuitability would be the sellers' responsibility. Although the evidence was not very complete, it is sufficiently shown, in my opinion, that mink are more sensitive to DMNA than most other animals to whom compound foods would be sold. Chicken and pigs are among the least sensitive, next cattle and then sheep, with mink at the top of the scale. So the question arises, what does the buyer, alleging unfitness, have to prove? If the fact were that the herring meal supplied, while damaging to mink, was perfectly harmless to all other animals to whom it might be fed, it would be unjust to hold the sellers liable. If, on the other hand, the herring meal was not only lethal to mink but also deleterious, though not lethal, to other animals, the sellers' responsibility could be fairly engaged. A man can hardly claim that the product he sells is suitable, especially if that is a foodstuff, merely because it fails to kill more than one species to which it is fed.’
This passage is in line with the opinion expressed by Sir Wilfrid Greene MR in Griffiths v. Peter Conway Ltd , which was thus referred to in the speech of Lord Hodson, at p 468:
‘The defendants have proved a general defect and that their animals were poisoned thereby. The expert called by the third parties, Nils Koppang, an expert from the Department of Pathology, Veterinary College of Oslo, Norway, described the disease which had existed as early as 1957. He himself referred to toxic doses in connection with DMNA in such a way that it appears that the toxic condition was not a peculiar one such as is illustrated by the case of Griffiths v. Peter Conway Ltd , a case relied upon as a decision in favour of the seller. That was a case concerning the purchase of a Harris tweed coat by a woman with an abnormally sensitive skin who did not disclose the fact to the seller. She failed in her action because the unsuitability of the article arose from the special state of affairs relating to the buyer, of which the seller was not aware. It is otherwise here, where DMNA is shown to have been toxic to all animals, not only to mink.’
As matter of principle, therefore, it may be said that where a buyer purchases goods from a seller who deals in goods of that description, there is no breach of the implied condition of fitness where the failure of the goods to meet the intended purpose arises from an abnormal feature or idiosyncrasy, not made known to the seller by the buyer, in the buyer or in the circumstances of the use of the goods by the buyer. That is the case whether or not the buyer is himself aware of the abnormal feature or idiosyncrasy.In the course of argument my noble and learned friend Lord Griffiths put the illustration of a new front wheel tyre being purchased for a car which, unknown to the buyer or the seller, had a defect in the steering mechanism as a result of which the tyre wore out after a few hundred miles of use, instead of the many thousands which would normally be expected. In these circumstances it would be totally unreasonable that the seller should be liable for breach of sec 14(3). The present case is closely analogous. Aquarius II suffered, unknown to the respondents, from a defect in the shape of an unusual tendency to produce excessive torsional resonance in the camshafts, with the result that the camshafts became badly worn and unserviceable much sooner than would otherwise have been the case.My Lords,for these reasons I would dismiss this appeal.LORD GRIFFITHS —My Lords, I have had the advantage of reading in draft the speeches prepared by my noble and learned friends Lord Keith of Kinkel and Lord Steyn, and for the reasons they give I would dismiss this appeal.LORD JAUNCEY OF TULLICHETTLE —My Lords, I have had the advantage of reading in draft the speeches of my noble and learned friends Lord Keith of Kinkel and Lord Steyn and for the reasons they give I too would dismiss this appeal.LORD SLYNN OF HADLEY —My Lords, I have had the advantage of reading in draft the speeches prepared by my noble and learned friends Lord Keith of Kinkel and Lord Steyn. For the reasons they give I too would dismiss the appeal.LORD STEYN —My Lords, the central issue is whether a dealer, who on three occasions sold and delivered component parts of an engine manufactured by the Caterpillar Tractor Co to the owners of a fishing vessel, was in breach of the implied condition imputed to a seller by sec 14(3) of the Sale of Goods Act 1979. While it is a Scottish appeal, the relevant law of Scotland and England have been assimilated by statute. Moreover, the questions debated in this case can arise in international and domestic sales as well as in commercial and consumer sales. Given this broad context I regard the analysis and disposal of this appeal as being of general importance to our sales law. Accordingly, I propose to explain briefly why I agree that the appeal ought to be dismissed.The findings of fact of the Lord Ordinary are not challenged. The principal facts can therefore be taken quite shortly from the careful judgment of the Lord Ordinary. The pursuers owned a fishing vessel with a Caterpillar engine. In 1985 the pursuers arranged for the length of the vessel to be increased and the engine to be uprated. Subsequently the main engine bearings failed. The pursuers called in the defenders who were dealers in marine engines. The defenders advised that the camshaft should be replaced. In May 1986 they supplied a new type of camshaft and undertook the work of replacement. The replacement was not a success. In June 1986 the defenders supplied and fitted a second camshaft. Again, there were problems. In November 1986 the defenders supplied and fitted a third camshaft. The problems persisted. In 1987 the pursuers gave up and sold the engine.Taken in isolation the repeated failure of the camshafts tended to suggest that the problem lay in the unsuitability of the camshafts supplied by the defenders. There was, however, strong evidence the other way. In particular the erratic pattern of the problems experienced, the fact that the engine operated normally for several months after the second new camshaft was fitted, and the fact that the engine after it was sold apparently operated normally in South Africa, tended to suggest an extraneous explanation. That view was reinforced by the fact that there was evidence that the new type of camshaft had been installed in engines on many fishing vessels and caused no problems. In any event, the preponderance of reliable expert opinion was largely one way, and established that the excessive torsional resonance experienced by the vessel after installation of the new type of camshaft was caused by excitation forces generated by the vessel, which were external to the camshaft and the engine.Before the Lord Ordinary no question arose as to the manner in which the camshafts were installed. No claim was advanced on a contract or contracts of services. The sole cause of action was for breach of the implied condition of fitness for purpose under sec 14(3) under the Sale of Goods Act 1979. Succinctly, the Lord Ordinary concluded:
‘The defenders supplied the pursuers with the camshafts and followers appropriate to this type of engine in 1986. The proper question is whether the inference can be drawn that they themselves were unfit for their intended purpose.
‘The answer to that question is to be derived from my analysis of the evidence, and, in my opinion, the evidence demonstrates that the camshafts and their followers were in fact fit for their purpose. The damage observed in them from time to time was not due to their unfitness to fulfil the purpose, but were the consequences of external factors. But for these factors, they would not have failed. That, in my judgment is a complete answer to the pursuers' case.’
That was the finding which the pursuers unsuccessfully challenged in the Second Division of the Court of Session.Counsel for the appellants submitted in opening the appeal to your Lordships' House that on the findings of fact of the Lord Ordinary the buyers had established a breach of the implied term under sec 14(3). Central to his submission was the proposition that to the knowledge of the sellers the buyers bought the camshafts for installation in a particular vessel . He emphasised that the buyers were unaware of any unusual feature of the particular vessel. He argued that under sec 14(3) a seller who undertakes to supply equipment suitable for use in a particular vessel takes the risk that performance of the goods may be adversely affected by an unanticipated and unusual feature of the vessel.One is entitled to assess the submission of counsel in the light of the results which would follow from its adoption. In argument illustrations of various far reaching consequences were given. I thought the most telling was the example given by my noble and learned friend, Lord Griffiths. Postulate a firm specialising in the supply of motor tyres. A customer walks in and asks for a tyre suitable for his car which is parked on the forecourt. The firm supplies a tyre. The car breaks down due to the collapse of the tyre. There was nothing wrong with the tyre. But a defect in the steering mechanism caused the problem. Is the supplier, who was ignorant of the steering problem, liable to the customer because the tyre was unfit for the particular vehicle? If the answer is in the affirmative, such a supplier (if he is unable to disclaim liability) may be forced to resort to time consuming and expensive investigations of cars to which tyres are to be fitted. Such a view of the law would therefore tend to complicate commonplace transactions. Considerations of everyday commerce militate against the adoption of the argument. It also seems to lead to an unjust result. The submission of counsel generates an initial and provisional sense of incredulity.What then is the correct analysis? One must first turn to the words of sec 14(3) of the Act of 1979. It reads as follows:
‘Where the seller sells goods in the course of a business and the buyer, expressly or by implication, makes known—(a) to the seller … (b) … any particular purpose for which the goods are being bought, there is an implied condition that the goods supplied under the contract are reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied, except where the circumstances show that the buyer does not rely, or that it is unreasonable for him to rely, on the skill or judgment of the seller.’
But sec 14(3), and indeed 14(1) and (2), are not to be construed as a virginal text. Substantially the same statutory principles have been judicially interpreted over the last 100 years. About those principles as they appeared in sec 14 of the Sale of Goods Act 1893, it was observed that the old rule of caveat emptor has become the rule of caveat venditor in order to meet the requirements of modern commerce and trade: Grant v. Australian Knitting Mills Ltd at p 98, per Lord Wright; see also Hardwick Game Farm v. Suffolk Agricultural Poultry Producers' Association at p 123. While the implied condition that the goods are reasonably fit is inherently a relative concept, it is well established that the liability under sec 14(3) is strict in the sense that the seller's liability does not depend on whether he exercised reasonable care.Given a seller who sells goods in the ordinary course of business, sec 14(3) provides that the implied condition is only applicable in cases where the buyer ‘expressly or by necessary implication, makes known … any particular purpose for which the goods are bought’. Originally, the buyer additionally had to prove reliance on the seller's skill and judgment. In 1973 the legislature reversed the burden on this issue. Under sec 14(3), in a case where the buyer made known his purpose, there is prima facie an implied condition of fitness which the seller can defeat only by proof that the buyer did not rely, or that it was unreasonable for him to rely, on the skill or judgment of the seller. While sec 14(3) focuses on two separate issues, ie the buyer making known his purpose to the seller and reliance, and provides for different burdens of proof on them, there is a close link between the two concepts. After all, if the buyer's purpose is insufficiently communicated, the buyer cannot reasonably rely on the seller's skill or judgment to ensure that the goods answer that purpose.That brings me to the interpretation of the words in sec 14(3), which are of critical importance in the present case, namely that ‘the buyer, expressly or by implication, makes known … to the seller … any particular purpose for which the goods are being bought’. The courts have consistently given a broad and liberal interpretation to these words, consistent with the reasonable and effective protection of the buyer. Thus the courts have refused to hold that the word ‘particular’ purpose conveys the opposite of ‘general’: instead they have construed ‘particular’ as signifying a specified purpose, which may be very general, eg a bicycle to ride on the road. Similarly, the courts have adopted a non-technical approach to the manner in which the buyer must communicate the purpose to the seller. No conceptual difficulty arises in cases of express communication, but usually there will not be an express communication. One then turns to the process of implication. In the context a practical and flexible approach has prevailed. That is best demonstrated by the observations of Lord Wright in Grant v. Australian Knitting Mills Ltd. In dealing with the implication of the purpose for which the goods are bought, Lord Wright in giving the judgment of their Lordships said at p 99: ‘it will usually arise by implication from the circumstances: thus to take a case like that in question, of a purchase from a retailer, the reliance will be in general inferred from the fact that a buyer goes to the shop in the confidence that the tradesman has selected his stock with skill and judgment: the retailer need know nothing about the process of manufacture: it is immaterial whether he be manufacturer or not: the main inducement to deal with a good retail shop is the expectation that the tradesman will have bought the right goods of a good make: the goods sold must be, as they were in the present case, goods of a description which it is in the course of the seller's business to supply: there is no need to specify in terms the particular purpose for which the buyer requires the goods, which is none the less the particular purpose within the meaning of the section, because it is the only purpose for which any one would ordinarily want the goods. In this case the garments were naturally intended, and only intended, to be worn next the skin’.It is sufficient that the seller was aware of the buyer's purpose. On the other hand, it must be borne in mind that our law generally subscribes to an objective theory of contract. What matters in this context is how a reasonable person, circumstanced as the seller was, would have understood the buyer's purpose at the time of the making of the contract: Hardwick Game Farm v. Suffolk Agricultural Poultry Producers' Association at p 81.In the present case the buyers did not expressly communicate their purpose to the sellers. The question is what could the sellers fairly have been expected to infer about the buyers' purpose from the circumstances of the case. Neutrally, it is obvious that the sellers would have inferred that the buyers' only purpose was to buy the camshafts as working component parts in the engine of their fishing vessel. It is therefore not a case where the buyer had more than one purpose. The correct approach is well settled. Professor Roy Goode, Commercial Law (2nd edn, 1995), p 335 explains:
‘The seller is entitled to assume that the goods are required for their normal purpose, or one of their normal purposes, unless otherwise indicated by the buyer. Accordingly, if the buyer requires the goods for a non-normal purpose, he must make steps to acquaint the seller of this fact before the contract is made, otherwise the seller, if unaware of the special purpose for which the goods are bought, will not be considered to undertake that they are suitable for that purpose.’
In other words, the implication will normally be that the goods are fit for the purpose for which the goods would ordinarily be used. For example, if a contractor in England buys pipes from a dealer for use in a pipe laying project, the seller would normally assume that the pipes need merely be suitable to withstand conditions in our moderate climate. If the contractor wishes to use the pipes in arctic conditions for a Siberian project, an implied condition that the pipes would be fit to withstand such extreme weather conditions could only be imputed to the seller if the buyer specifically made that purpose known to the seller. Applying this approach to the facts of the present case, the seller was entitled to assume that the camshafts would be used in a Caterpillar engine in an ordinary vessel. And the implied condition must be so limited in scope. The particular purpose for which the buyers ordered the new camshafts was for installation in a vessel which was in fact afflicted by an abnormal tendency to resonate excessively. It follows that on the facts found by the Lord Ordinary there was no breach of the implied condition.While the application of first principles persuades me that the buyers' claim is unsustainable, that conclusion is reinforced by the decision of the Court of Appeal in Griffiths v. Peter Conway Ltd. The plaintiff contracted dermatitis from a Harris tweed coat which she had bought from the defendant. The judge found that the plaintiff had an unusually sensitive skin and that the coat would not have harmed an ordinary person. The Court of Appeal dismissed an appeal by the plaintiff against the judge's dismissal of her claim. Sir Wilfrid Greene MR explained at p 691 that if a person suffering from such an abnormality desires to obtain the protection of the implied condition, ‘The essential matter for the seller to know … consists in the particular abnormality or idiosyncrasy from which the buyer suffers. It is only when he has that knowledge that he is in a position to exercise his skill or judgment .... The fact that those essential characteristics are not known … to the buyer does not seem to me to affect the question.’Contrary to the submission of counsel for the appellants on the present case, the Court of Appeal held that it is no answer to argue that the buyer was unaware of the abnormality. Given that the inquiry is as to what the buyer made known to the seller in order to enable the seller to use his skill or judgment to select suitable goods, that holding must be right. Counsel for the appellants accepted that Griffiths v. Peter Conway Ltd was correctly decided but he said that the reasoning was wrong. He said the Court of Appeal should have decided the case on the ground of lack of reliance by the plaintiff. I disagree. The particular purpose for which the plaintiff required the coat was for wear by a person with an abnormally sensitive skin: failure to make this known to the seller was fatal to the claim. This decision fits in exactly with the approach indicated by first principles. And I would hold without hesitation that the reasoning of Sir Wilfrid Greene MR was correct. See also Christopher Hill Ltd v. Ashington Piggeries Ltd at p 490F–H, per Lord Wilberforce.Outside the field of private sales the shift from caveat emptor to caveat venditor in relation to the implied condition of fitness for purpose has been a notable feature of the development of our commercial law. But to uphold the present claim would be to allow caveat venditor to run riot.For these reasons I agree that the appeal should be dismissed.