Sale of tractor unit by private treaty two days after withdrawal from auction sale–Vehicle not of merchantable quality–Whether auction condition purporting to restrict purchaser’s remedies applied to the subsequent private sale in auctioneer’s premises–Held that it did not–Private sale a completely separate transaction–Auctioneer should have drawn specific attention to this condition if it was intended to apply to the private sale–Doubts expressed by judges as to whether condition would in any case have been effective to restrict purchaser’s remedies
This was an
appeal by the plaintiffs, dealers in vehicles, from a decision of Judge
Suddards at Halifax County Court dismissing a claim in respect of the price of
a tractor unit which the defendant, Andrew Stirling, had purchased at the
Central Motor Auction Rooms in Manchester but not in the course of an auction
sale. The circumstances of the sale are fully set out in the judgment of Browne
LJ. The defendant rejected the tractor on the ground that it was defective and
stopped his cheque for the purchase money.
Clifford
Norton (instructed by Rice-Jones & Smiths, of Halifax) appeared on behalf
of the appellants; D C Mitchell (instructed by Isadore Goldman & Son)
represented the respondent.
Giving the
first judgment at the invitation of Megaw LJ, BROWNE LJ said: This is an appeal
by the plaintiffs from a decision of His Honour Judge Suddards given at the
Halifax County Court on July 28 1977. The plaintiffs brought their action on a
cheque given by the defendant in respect of the price of a tractor unit called
a Scania. The actual claim was for the balance of the cheque. The cheque
originally had been for £1,828.44. In circumstances I shall explain later, the
defendant rejected the vehicle, and it was resold for £1,100, leaving a balance
of £727 odd, in respect of which the action was brought. The defence relied on
the ‘implied condition’ provisions of the Sale of Goods Act and said that the
vehicle was not reasonably fit for the purpose for which it was bought and/or was
not of merchantable quality.
The facts were
these. The plaintiffs, who are dealers in vehicles, specialising in tractor
units and trailers, bought this particular vehicle in the beginning of October
1975, for £1,682. They bought it somewhere in Staffordshire and had it driven
back to Halifax. They gave it what the judge called ‘a face-lift’ and then
entered it for sale by auction at the Central Motor Auction Rooms in
Manchester. It was put up for sale on October 14 1975 subject to a reserve of
£1,700.
We have before
us the entry form used by that auction company, which has on its back various
conditions. The relevant conditions for the purposes of the present case are
two. First, clause 8 provides that:
Where a
vehicle is sold without reserve and/or without warranty it shall be implied
that it is sold with all faults imperfections and errors of description and the
purchaser shall have no right to return the vehicle to claim damages or to any
other remedy of whatsoever nature.
Then by clause
18(c)
The word . .
. (c) ‘sale’ used in these conditions shall include sale by private treaty as
well as sale by auction.
It was pointed
out to us that on the face of that entry form there is a box with the heading
‘Is the vehicle sold with warranty? If
Yes please complete the following . . . ‘: and then there are various
particulars. As I understand it, that box was not completed in this case. But
the vehicle was not sold without reserve; it was sold with reserve.
At the hearing
the auctioneer gave evidence in which he said that copies of those conditions,
in larger type, were posted up around the auction room. He also said: ‘The
auctioneer at each session mentions the salient points. I say all vehicles are
sold without warranty unless otherwise stated. All vehicles sold with warranty
have a prominent notice ‘With warranty’ on the windscreen. But I never sold any
commercial vehicle with warranty.’
What happened
was that the defendant went to the sale on October 14 and bought some other
vehicles. He said in evidence that he saw this particular tractor, the Scania,
but that as there was no warranty on it he was not interested. The reserve was
not reached and the vehicle was withdrawn. It stayed in the auctioneer’s yard.
A day or two later, on October 16, the respondent came to the auctioneer’s
premises to settle up for the vehicles which he had bought. He saw this tractor
again. He saw the auctioneer and he offered him £1,500. There was a certain
amount of bargaining, in the course of which the auctioneer telephoned to the plaintiffs.
Eventually it was agreed between the auctioneer and the defendant that he would
buy the tractor for £1,828.44: that was £1,690 plus VAT. The vehicle then set
out from Manchester in order to go to Scotland, where the defendant carries on
his business, I gather; but 5 miles out of Manchester, on the motorway, it
broke down irretrievably. It was towed up to Scotland. It turned out that it
had serious faults, as a result of which the defendant returned the vehicle;
and it was eventually, as I have said, resold for £1,100.
The judge
found in his judgment that the vehicle was not merchantable. It follows, of
course, that, subject to the question of the exclusion of the provisions of the
Sale of Goods Act, the defendant was entitled to reject it and was not liable
on the cheque which he had given for the price. That was what the judge found.
The question here is whether, as a result of what happened, the implied
conditions or warranties under the Sale of Goods Act were excluded. The
defendant alleged that there was an express warranty of good quality given by
the auctioneer in the course of the negotiations on October 15 or 16; but the
judge rejected this. Accordingly, the case must stand or fall on the statutory
conditions of the Sale of Goods Act.
After saying
that he rejected the evidence of the defendant about the express warranty, the
judge said: ‘There is no doubt
plaintiffs can only succeed if the Sale of Goods Act were excluded. Clearly it
was excluded at the auction. But according to the auctioneer, he takes the view
that so long as vehicles are on his premises they are covered by the conditions
of the auction. This is a difficult concept for me.’ Then the judge gave an illustration, and went
on: ‘I am satisfied the auctioneer never said anything that could give rise to
a warranty. I am equally satisfied he did not say anything to show that the
Sale of Goods Act was excluded from the sale. He assumed that the provisions of
the Sale of Goods Act were excluded. Equally, I feel that Stirling’–that is the
defendant–‘probably thought so. Mr Mitchell argues that if you want to exclude
the Sale of Goods Act you must do it specifically: hence, the notices at the
auction and the fact that the auctioneer goes to a great deal of trouble to
draw the public’s attention to them. I have reached the regrettable conclusion
that the Sale of Goods Act was not excluded from this private sale. It follows
that, the vehicle being in the condition described, Stirling was entitled to
reject it and did so. It follows also that the plaintiffs’ claim must fail.’
It seems
pretty clear, and certainly I am prepared to assume, that if a vehicle is sold
by auction in these auction rooms the conditions are incorporated. So far as
the vendor is concerned they are, of course, incorporated, because he signs the
entry form, which has the conditions on the back of it. So far as the purchaser
is concerned, the conditions, printed in large letters, are displayed prominently
in the auction rooms. Assuming that is so, the question in this case is, were
those conditions so to speak carried forward so as to be incorporated in the
contract which was made between the auctioneer and the defendant a day or two
later? If the answer to that is ‘Yes,’
the second point is whether Condition 8, as a matter of construction, is apt to
exclude the conditions under the Sale of Goods Act.
I think that
logically the first question is whether those conditions were incorporated in
the contract made on October 16. I was convinced by Mr Mitchell that they were
not. Assuming, as I say, that Mr Stirling did know that they would have been
incorporated if he had bought this vehicle in the auction, it seems to me that,
as Mr Mitchell said, this sale by private treaty was a quite separate
transaction, and one should not necessarily assume that it was on the same
terms as the sale would have been if the vehicle had been sold by auction. It
seems to me that Mr Mitchell was right in saying that it was the duty of the
auctioneer to draw specific attention to these conditions, particularly
Condition 8, if they were intended to be included in the contract on October
16. If the condition has the meaning which the plaintiffs say it has, it is a
stringent condition excluding what would otherwise be the statutory rights of
the buyer, and it seems to me that in those circumstances it is the duty of the
seller to make it clear to the buyer that the condition is being incorporated.
This is enough
to dispose of this appeal, and so I am not going to take up time by considering
in detail the construction of Condition 8. I will only say that it does seem to
me that the seller, even if it was incorporated, might have a good deal of
difficulty in establishing that it was clearly enough worded to exclude the
rights of the buyer under the Sale of Goods Act. In my judgment the judge came
to the right conclusion in this case, and I would dismiss the appeal.
SHAW LJ
agreed.
Also agreeing,
MEGAW LJ said in the course of his judgment: Like Browne LJ, I also take the
view that, even if it had been established that [Condition 8] was applicable,
the plaintiffs still would have been at any rate in very considerable
difficulty in showing that, on its terms and having regard to all the
circumstances, it was sufficient to exclude liability in respect of the Scania
tractor which was sold and which it is undisputed was not of merchantable
quality.
The appeal
was dismissed with costs.
