Hardwick Game Farm v Suffolk Agricultural Poultry Producers Association (Grimsdale & Sons Ltd v Suffolk Agricultural Poultry Producers Association, Holland Colombo Trading Society Ltd v Grimsdale & Sons Ltd, Kendall (Henry) & Sons v William Lillico & Sons Ltd)

Under Sale of Goods Act 1893, section 14(1), a particular purpose is a communicated purpose sufficiently specific to show the seller what fitness is required. Reliance on the seller’s skill or judgment is a question of fact. Dealings between knowledgeable merchants or common trade-association membership neither establish nor exclude it automatically.

Once the condition arises, it assures reasonable fitness even against a latent defect which reasonable skill could not have discovered. Clear and apt words are required to exclude the condition. A statutory warranty for feeding stuffs may cover an ingredient intended for compounding, and ordinary rules of remoteness govern damages for its breach.

Hardwick Game Farm settled a claim against its supplier, Suffolk Agricultural and Poultry Producers Association Ltd (S.A.P.P.A.), after aflatoxin in compounded feed killed or injured young pheasants. S.A.P.P.A. sought to pass that liability to Grimsdale, which in turn sought to recover from Kendall and Holland Colombo, the importers and upstream sellers of Brazilian groundnut meal.

The appeals concerned implied conditions under section 14 of the Sale of Goods Act 1893 and the statutory warranty in section 2(2) of the Fertilisers and Feeding Stuffs Act 1926. They also raised the effect of latent-defect clauses, whether pheasants were poultry, remoteness of the loss, and whether the 1926 Act applied to the c.i.f. contracts between the merchants.

1. The appeals were dismissed. Kendall’s and Holland Colombo’s appeal was dismissed by a majority of four to one. Lord Guest dissented on their liability. Grimsdale’s appeal against S.A.P.P.A. was dismissed unanimously.

2. Section 14(1). Lords Reid, Morris of Borth-y-Gest, Pearce and Wilberforce held that resale in smaller quantities for compounding into cattle and poultry feed was a sufficiently particular purpose. Reliance is not presumed merely because the seller knows the purpose, especially between equally knowledgeable merchants. But it may be inferred from the whole bargain. Here Kendall had introduced and promoted a new line of Brazilian meal, and the evidence supported an inference that Grimsdale relied on its skill and judgment. The condition assured fitness notwithstanding that the toxin was undiscoverable at the time.

3. Contractual clauses. The established course of dealing incorporated Grimsdale’s sold-note terms into its contracts with S.A.P.P.A. However, the clause placing responsibility for latent defects on the buyer did not clearly exclude the implied condition of fitness. The similar standard-form clause in the upstream contracts was likewise ineffective to exclude that condition.

4. Statutory warranty. The majority held that groundnut meal sold to be compounded was sold for use as food for cattle or poultry within section 2(2) of the Fertilisers and Feeding Stuffs Act 1926. Pheasants were not poultry, but the warranty was broken because the meal was unsuitable for poultry. Loss caused when poultry feed was foreseeably fed to pheasants was not too remote.

5. c.i.f. sales. Lords Morris, Pearce and Wilberforce held that the statutory warranty applied to these English c.i.f. contracts. The passing of documents and payment in London could not sensibly make the warranty depend on the ship’s fortuitous position at that moment. Lord Reid and Lord Guest took the contrary view, but the statutory point was an independently sufficient ground supporting the majority result.

• House of Lords: dismissed the upstream sellers’ appeal by majority and dismissed Grimsdale’s appeal against S.A.P.P.A. unanimously.
• Court of Appeal: upheld Grimsdale’s liability to S.A.P.P.A. and, by majority on the material issue, upheld liability of Kendall and Holland Colombo under section 14(1) of the Sale of Goods Act 1893.
• High Court (Havers J): made the relevant factual findings on contamination and determined the contractual and statutory claims. The judgment is referred to as [1964] 2 Lloyd's Rep. at 269.