Stephenson v Cookson

For the implied term of satisfactory quality, disclosure of a physical feature does not necessarily disclose an underlying condition that makes goods unsatisfactory. The statutory disclosure proviso applies only to the matter actually making the goods unsatisfactory, where that matter was specifically drawn to the buyer’s attention. A sufficient evidential link between the disclosed feature and the underlying condition is therefore important. On permission to appeal, the Court of Appeal will not revisit factual findings merely because another view is possible. Permission requires a real prospect of establishing an error of law, including a legally material misunderstanding of the evidence. Reliance on the seller’s skill or judgment remains necessary for a fitness-for-purpose claim.

A horse was sold for £14,500 under a contract dated 29 June 2006. After the horse was returned and resold at a substantially reduced price, the buyer brought proceedings alleging breach of the implied terms under the Sale of Goods Act 1979. The York County Court found a breach of section 14(2)(a) and awarded £10,500 in damages.

The seller sought permission to appeal. He argued that the buyer had been told about thickening around the horse’s pastern, that the horse was nevertheless of satisfactory quality, and that the statutory disclosure proviso applied. He also challenged the finding on fitness for purpose. The central issues were whether the disclosed thickening was sufficiently linked to the osteoarthritis later discovered, and whether the County Court’s findings disclosed an arguable error of law.

Application refused. Lord Justice Pill refused the renewed application for permission to appeal.

1. The decisive issue under section 14 of the Sale of Goods Act 1979 was whether the thickening of the pastern, which had been drawn to the buyer’s attention, was sufficiently linked to the osteoarthritis that made the horse unsatisfactory. The Recorder was entitled to distinguish between those matters. The veterinary evidence did not establish the necessary link.
2. The disclosure proviso in section 14(2C)(a) did not assist the seller. The matter making the horse unsatisfactory was the significant underlying osteoarthritis, not merely the visible thickening. The horse’s earlier performance and the absence of problems following the earlier injury did not establish that the disclosed feature was the cause or symptom of the later-diagnosed condition.
3. Bartlett v Sidney Marcus Limited [1965] 1 WLR 1013, concerning a buyer who knew of a defective clutch but later discovered that its extent or cause was more serious, was materially distinguishable. In the present case, the evidential link between the disclosed feature and the serious condition had not been shown.
4. The Court of Appeal must respect findings of fact made by the judge who heard the evidence. It may intervene only where an error of law is established, including a legally material misunderstanding of the evidence. There was no real prospect of establishing such an error. The evidence supported the finding that the horse was of unsatisfactory quality, notwithstanding its subsequent good performance.
5. The fitness-for-purpose ground also disclosed no real prospect of success. The Recorder found that the buyers had not relied on the seller’s expertise, and there was no perversity in that conclusion.

The order was: application refused.

• Court of Appeal (Civil Division) — On 3 November 2009, refused the renewed application for permission to appeal.
• York County Court — On 11 December 2008, Mr Recorder E E Elliott QC found a breach of section 14(2)(a) of the Sale of Goods Act 1979 and awarded £10,500 damages.