MECO PAK AB Ltd v Electropaint Ltd

Where a specialist supplier provides equipment intended to operate with another contractor’s system, its responsibility may extend to ensuring that the systems work together. An express technical tolerance does not necessarily exhaust that obligation or exclude an implied term that the goods be reasonably fit for their known purpose under the Sale of Goods Act, section 14(3). The contract must be construed in its technical context. An appellant should not ordinarily succeed on a construction argument that was neither pleaded nor properly advanced at trial. The appeal was dismissed.

MECO PAK AB Ltd v Electropaint Ltd concerned a subcontractor’s claim for unpaid sums and the main contractor’s counterclaim. Meco Pak had supplied loading, unloading and synchronisation equipment for a bottle-painting production line.

The Walsall County Court found for Electropaint on both the claim and counterclaim. Meco Pak appealed, arguing that the trial judge had imposed responsibility beyond the contractual requirement to provide a synchronisation system operating within specified tolerances. The central issues were whether that construction argument could be entertained when it had not been pleaded or properly advanced at trial, and whether a statutory term of reasonable fitness applied.

1. Disposition. The Court of Appeal dismissed the appeal with costs. Mantell LJ gave the principal judgment. Latham LJ agreed. Simon Brown LJ agreed with the result and added separate reasoning.
2. Trial judge’s findings. The judge was entitled to find that Meco Pak bore contractual responsibility for designing and installing equipment properly synchronised with Marwel’s conveyor line. Meco Pak had designed a sophisticated electronic system and was in the best, or possibly the only, position to ensure that it operated satisfactorily with Marwel’s equipment. The finding that the synchronisation device was unfit for its known purpose was available on the evidence, even though the reasoning could have been expressed more clearly.
3. Unpleaded construction argument. Meco Pak argued on appeal that the contractual documents required only a system capable of synchronisation within specified tolerances, and did not impose a wider obligation to ensure compatibility. Mantell LJ held that the point had not been pleaded, had not been placed at the forefront of the submissions at trial, and had not been addressed in the judgment. Meco Pak should not succeed on that basis.
4. Additional reasoning. Simon Brown LJ considered the proposed express-term argument flawed on its true analysis. The specified tolerance had changed during the discussions, the evidence indicated that Meco Pak expected to meet a substantially wider tolerance, and the subsequent attempts to make the system work contradicted any simple assertion that responsibility ended with compliance with the stated figure. It therefore remained open to imply a term under the Sale of Goods Act, section 14(3), that the system be reasonably fit for its known purpose. That term had been breached. This was additional reasoning in Simon Brown LJ’s separate judgment.
5. The court was not addressed on whether the form of the County Court order should have given judgment separately on the claim and counterclaim. It reserved its position on that issue and dismissed the appeal with costs.

1. Court of Appeal (Civil Division): In [2001] EWCA Civ 1537, the appeal from the County Court was dismissed with costs.
2. Walsall County Court: Mr Recorder Millington found for Electropaint on Meco Pak’s claim and on Electropaint’s counterclaim.