Guarantees
Cases
Medivance Instruments Ltd. v Gaslane Pipework Services Ltd. & Anor
[2002] EWCA Civ 500 (18th April, 2002)
Neuberger LJ
Indirect support for that conclusion is to be found in Wright –v- Dunlop (1973) 7 KIR 255, which involved a claim by employees who had contracted cancer as a result of working with a product called Nonox S, which had been supplied to their employer, Dunlops by ICI. At 7 KIR 272, the Court of Appeal said this:
“ICI, then, owed a duty to Dunlops’ employees in respect of Nonox S. What was the extent of the duty? It was a duty to take all reasonable steps to satisfy themselves that Nonox S was safe… in the sense that there was no substantial risk of any substantial injury to health on the part of persons who were likely to use it or to be brought into contact with its use…
It is obvious that the answer to the question: “What are reasonable steps?” must depend upon the particular facts. …
If the manufacturer discovers that the product is unsafe, or has reason to believe that it may be unsafe, his duty may be to cease … to … supply the product in its unsafe form. It may be that in some circumstances the duty would be fulfilled by less drastic action: by, for example, giving proper warning to persons to whom the product is supplied of the relevant facts, as known or suspected, giving rise to the actual or potential risk….”
Of course, the Court of Appeal in that case was not concerned with the precise question which arises in the present instance, particularly as between the appellant and Gaslane, involving the construction and effect of section 14. However, it appears to me that those observations tend to support the view that whether a defect prevents an article being of “merchantable quality” or “reasonably fit for [a particular] purpose” cannot automatically be answered in the negative, merely because the specific defect complained of by the purchaser was the subject of a clear and unambiguous warning supplied to him by the seller at the time of the sale of the article.
So far as section 14(2) is concerned, I consider that it is clear from paragraph (a) that it cannot be denied that an article is of “merchantable quality”, because of a defect from which it suffers, if that defect has been clearly and unambiguously drawn to the attention of the purchaser at the time of sale. However, so far as fitness for purpose in section 14(3) is concerned, there is no provision equivalent to section 14(2)(a). Therefore, a warning of the defect, however clear and unambiguous, is not necessarily decisive. Accordingly, I consider that it sets a standard that must be judged by considering the article concerned, the purpose for which it was, and was known to the seller, to be used, and all other relevant circumstances, including any warning about any particular defect in the article concerned.
As Mr Brown said, if a seller can always avoid liability for a defect, whatever its nature, by providing a clear warning of the defect, then the seller would be effectively being permitted to define the scope of his contractual duty in every case, irrespective of the circumstances. There is obvious force in the point that, because manufacturers and suppliers such as Vulcana and Gaslane are far more knowledgeable as to the state of the art with regard to heaters, they should not automatically be able to satisfy the requirements of section 14 by issuing an appropriately worded and highlighted warning of the defect, if there is a simple, commonly used, and inexpensive way of avoiding the defect.
Having said that, it is right to say that in many cases the existence of a clear and unambiguous warning of a particular defect or risk when the product is sold, will, on its own, be enough to defeat a claim based on section 14, when, in the absence of such a warning, the claim would have succeeded. A relatively recent example may be found in Wormell –v- RHM Agriculture (East) Limited [1987] 1 WLR 1091. The case was concerned only with a claim under section 14(3), because it was accepted that if the claim failed under that sub-section, it could not succeed under section 14(2) – see at [1987] 1 WLR 1094A-B. Dillon LJ said this at [1987] 1 WLR 1094H to 1095A:
“These are goods which both [the defendant’s representative] and the plaintiff knew would be supplied with detailed instructions, and both of them expected that the plaintiff would read the instructions. Plainly the instructions have to be taken into account in considering whether the goods were fit for the purpose. The plaintiff cannot simply say that the weed killer was not reasonably fit for its purpose of killing wild oats if it would have been fit for that purpose if used in accordance with the instructions.”
The second sentence of that observation could be said to suggest that an appropriately worded warning is not necessarily conclusive in favour of the seller. Although the balance of the passage could be said to point the other way, it seems to me that it must be taken to be a conclusion based on the effect of the instructions and the risk or defect in that case.
In any event, the issue in that case did not concern a defect in the sense of a problem with the product which could lead to damage; it was concerned with a defect in the sense of a problem with the product which meant that it would not perform its intended function in certain circumstances. Rather more similar to the present case on the facts is Holmes –v- Ashford [1950] 2 All ER 76. In that case, the manufacturer of a hair dye was held not liable to a client of a hairdresser who contracted dermatitis as a result of being treated with the dye, because the dye was supplied with a clear warning of such a possible danger and a recommendation to test the effect of the dye first. The Court of Appeal applied the reasoning of an earlier Court of Appeal judgment in Hodge & Sons –v- Anglo-American Oil Co. (1922) LC.L.Rep 183, where at 188 Scrutton LJ said this:
“[I]f the barge… is an article of danger in itself, it is the duty of the owners to take proper and reasonable precautions to prevent its doing damage to people likely to come into contact with it. These precautions may be fulfilled by entrusting it to a competent person with reasonable warning of its dangerous character if the danger is not obvious.”
These two cases are not precisely in point as they were not concerned with section 14 or its statutory predecessor, but with negligence. However, they illustrate the great significance of warnings to (or indeed knowledge of) the buyer of a defect or risk. Nonetheless, they do not appear to compel the conclusion that such knowledge or warning of the defect or risk is enough to exonerate the seller of any liability for damage caused by the defect or risk, in every case.
In my judgment, the warning in this case was plainly an important factor in favour of the respondents, as the Judge said. He observed that “installers [of a heater] can… reasonably expect ordinary precautions to be taken to guard against the known risk”. He then found on the evidence, plainly rightly, that the risk in the present case was both properly warned against, and anyway well known to the appellant. He also said that it “depends on the circumstances whether such warnings will be sufficient to discharge the duties that rest upon [the seller]”. On the facts of the present case, he held that the circumstances were such that the respondents had discharged their duties under section 14 by giving the warning (if that was necessary in light of the appellant’s knowledge of the risk and experience in dealing with it in relation to other heaters).
Particularly in connection with the appellant’s case under section 14(3), the Judge thought, in any event, that the Heater was fit for the purpose for which it was supplied, in light of the fact that the appellant had specifically asked for the particular Heater, having knowingly used heaters of the same sort in the factory, with precisely the same risk. By 1993, when the Heater was supplied to the appellant, some of these earlier heaters had been used in the factory for about eight years. Accordingly, not only was the appellant well aware of the risk in question, but it had taken satisfactory steps to avoid it, in terms of marking the relevant area on the ground, and ensuring that members of its staff were properly instructed of the risk. The evidence suggests, and so far as the respondents were aware at the time, there was no reason to think that this state of affairs had proved anything other than entirely satisfactory. It would be quite unrealistic, particularly in a case involving a commercial buyer, to disregard the past experience and attitude of that buyer in relation to the use and care of articles of a very similar nature, when considering whether the article in question can fairly be said to have been fit for the purpose.
Fourthly, the Judge had the benefit of expert evidence. In this connection, there was clear evidence from a properly instructed and qualified expert, Mr Christie, called on behalf of Gaslane, to the effect that, essentially in light of the various factors to which I have referred, but also based on his experience, the Heater was of merchantable quality and fit for the purpose for which it was supplied. In particular, as I have mentioned, he did not consider that the use of the packing area, and the nature of the articles therein, posed an unusual risk, such that, even if the Heater was of merchantable quality generally for commercial purposes, it was not fit for the purpose of being used in the packing area, at least without a device or a guard.
Although the appellant’s expert, Dr Foster, expressed some views critical of the selection of the particular Heater for use in the packing area, it is hard to see why the Judge was not entitled to prefer the evidence of Mr Christie, particularly in light of some of the answers which Dr Foster gave in cross examination. Thus, in light of the fact that the Heater was “officially approved”, Dr Foster accepted that he “would not criticise Gaslane for picking [it]”. Further, Dr Foster was not experienced in the requirements of the design of heaters, other than through having consulted appropriate standards.
Expert evidence is not, of course, conclusive, especially when it is directed to the very issue which the Judge has to determine. However, unless the case is one where the Judge can get clear guidance from his own experience (as in some professional negligence cases), the factual evidence, common general knowledge or common sense, it can obviously be of value. That is particularly true in a case with a technical dimension, or where the case involves a practical dimension outside the skill and expertise of the Judge. Although not particularly technical, the present case was one in which expert evidence could reasonably have been regarded by the Court to be of assistance.
Conclusion
In my judgment, bearing in mind his findings of primary fact, Judge Price QC was plainly entitled to reach the conclusion that the Heater was merchantable and fit for its purpose in light of the four factors which he identified, despite the points made by the appellant. Indeed, in light of the cumulative effect of the four factors he relied on, I do not consider that he could properly have reached a different conclusion from that which he did. In these circumstances, I am of the view that the Heater was of merchantable quality and fit for the purpose for which it was supplied. As the appellant admittedly cannot succeed on any other basis alleged against either respondent, this appeal should accordingly be dismissed.
MANCE LJ:
I agree.
THORPE LJ:
I also agree.