Egan v Motor Services (Bath) Ltd

Goods sold in the course of a business satisfy the statutory standard of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory. The assessment is objective and depends on the description, price and all other relevant circumstances.

A minor defect does not necessarily make goods unsatisfactory. Its nature and consequences must be sufficient to cause a reasonable person to regard the goods as unsatisfactory. A vehicle which handles normally is not of unsatisfactory quality merely because it is camber sensitive or a wheel setting may fall outside the manufacturer's specification.

The buyer purchased a new Audi motor car from the seller and sought to reject it because he considered that its steering caused it to veer to the left. He claimed repayment of the purchase price and damages for breach of the condition of satisfactory quality implied by section 14 of the Sale of Goods Act 1979.

His Honour Judge Rutherford dismissed the claim in Bristol County Court. He found that the vehicle had not been secretly adjusted after its purported rejection and had handled normally throughout. Its tendency to follow the road's camber did not amount to a defect.

The buyer appealed against the factual findings, the treatment of a vehicle inspector's evidence and the conclusion that a wheel alignment outside the manufacturer's specification would not necessarily make the vehicle unsatisfactory.

1. Appeal dismissed. Smith LJ, with whom Arden LJ and Ward LJ agreed, held that the trial judge's essential finding was that the steering was not defective. Although parts of his judgment were expressed unclearly, he had accepted the evidence that the car was merely camber sensitive and handled normally.

2. The trial judge had not explained why he rejected the factual evidence of the buyer's vehicle inspector. That omission was unfortunate because the evidence concerned a crucial issue. Nevertheless, the inspector's description of the test drive was unclear, and the judge was entitled to prefer the more convincing accounts given by the seller's witnesses. The rejection of the evidence was not perverse. A rehearing would have been disproportionate given the modest value of the claim and the evidential basis for the judge's conclusion.

3. The judge was also entitled to find that the buyer had not proved that the rear wheel alignment was outside the manufacturer's specification when the vehicle was rejected. The different test results could be attributed to variability between equipment. The evidence did not establish that the seller had secretly adjusted the vehicle.

4. Smith LJ held, obiter, that the controlling standard under section 14(2A) of the Sale of Goods Act 1979 is objective. The judge must decide whether a reasonable person would regard the goods as satisfactory, taking account of their description, price and all other relevant circumstances. Although freedom from minor defects is an aspect of quality under section 14(2B)(c), the existence of a minor defect does not by itself confer a right to reject. The defect must be sufficiently consequential to make the goods objectively unsatisfactory. A setting outside the manufacturer's specification will not necessarily meet that standard.

5. Smith LJ further stated that circulation of a draft judgment permits correction of typographical, spelling and minor factual errors, and assists consideration of costs and appeals. It does not permit counsel to reargue the case. A request to reconsider a substantive point is appropriate only in exceptional circumstances, such as inadequate reasons or reliance on a point or authority which the parties did not address.

Ward LJ added that dissatisfaction of the particular purchaser did not satisfy section 14(2A). He also emphasised, obiter, that low-value disputes of this kind should ordinarily be considered for mediation before disproportionate litigation costs are incurred.

1. Court of Appeal (Civil Division): The buyer's appeal was dismissed unanimously. The court upheld the conclusion that the vehicle was of satisfactory quality: [2007] EWCA Civ 1002.
2. Bristol County Court: His Honour Judge Rutherford dismissed the buyer's claim on 2 January 2007 after finding that the vehicle handled normally and was of satisfactory quality. No citation is stated in the judgment.