Stevenson v Rogers

For section 14(2) of the Sale of Goods Act 1979, a sale is made in the course of a business unless it is a purely private sale outside the seller’s business. The provision does not require regular dealing in the goods sold, or regularity in comparable transactions.

The narrower construction adopted for different consumer-protection legislation does not govern section 14(2). Although the same phrase appears elsewhere in the statutory scheme, its meaning depends on the provision’s legislative history, context and purpose.

A fisherman sold his fishing vessel for £600,000 while continuing his fishing business with a replacement vessel. The purchasers contended that the sale carried the implied condition of merchantable quality under section 14(2) of the Sale of Goods Act 1979.

On a preliminary issue, a deputy High Court judge held that the isolated disposal was not made in the course of the seller’s business. He treated it as a sporadic sale of equipment, applying the regularity approach derived from decisions under other legislation.

The purchasers appealed. The central issue was whether section 14(2) required regularity or an integral trading activity before a business seller’s sale fell within the provision.

Appeal allowed unanimously. Potter LJ gave the leading judgment. Sir Patrick Russell agreed with its conclusions, and Butler-Sloss LJ agreed with both judgments.

1. Section 14(2) of the Sale of Goods Act 1979 was to be given its wide, ordinary meaning. The change made by section 3 of the Supply of Goods (Implied Terms) Act 1973 deliberately widened protection beyond sales by dealers in goods of the relevant description. It imposed the implied condition on every business seller, subject only to the distinction between a business sale and a purely private sale.

2. The regularity requirement derived from Davies v Sumner [1984] 1 WLR 1301 did not govern section 14(2). That decision concerned a criminal statute using the phrase “trade or business”. The decision in R & B Customs Brokers Co Ltd v United Dominions Trust Ltd [1988] 1 WLR 321 was confined to section 12 of the Unfair Contract Terms Act 1977. Its construction could not curtail the wider protection intended by section 14(2).

3. The court was entitled to consult the Law Commission report and Parliamentary material to resolve the real doubt created by the differing authorities. Those materials confirmed that section 14(2) was intended to protect buyers where a seller acted in the course of a business, whether or not the seller habitually dealt in the goods sold.

4. Accordingly, the vessel was sold in the course of the defendant’s business and the contract contained an implied term as to merchantable quality. Potter LJ added that, if the narrower Davies approach had applied, the judge would have been entitled to regard the transaction, rather than the vessel itself, as merely incidental to the fishing business. There was no order for Court of Appeal costs; the costs below were costs in the cause.

• Court of Appeal: Allowed the purchasers’ appeal and held that the sale was made in the course of the seller’s business for section 14(2) of the Sale of Goods Act 1979.
• High Court, Queen’s Bench Division: HH Judge Anthony Thompson QC, sitting as a deputy High Court judge, determined a preliminary issue in favour of the seller. He held that the sale was not in the course of a business.