BSS Group Plc v Makers (UK) Ltd (t/a Allied Services)

Under the Sale of Goods Act 1979, section 14(3), a buyer may make a particular purpose known by implication from the circumstances. Where the seller knows the relevant system and it is likely that the goods will be used with associated components, the seller must exercise its skill and judgment to supply goods reasonably fit for that use. Reliance is ordinarily inferred once the purpose is made known. The seller bears the burden of proving absence of reliance or unreasonable reliance, and reliance need not be exclusive. The idiosyncrasy exception concerns an abnormal feature of the buyer or the circumstances of use, not incompatibility between ordinary, sound components known to the specialist seller.

Makers was the defendant in a claim concerning flooding at a public house and brought an additional claim against BSS, its supplier. The underlying claim was settled, leaving for trial whether BSS had supplied valves that breached the implied term as to fitness for purpose under section 14(3) of the Sale of Goods Act 1979.

The county court found that Makers had made known that the valves were required for use with an Uponor pipe system, that the valves were incompatible with Uponor adaptors, and that Makers relied on BSS’s skill and judgment. BSS appealed the liability order and the consequential costs order. The central issues were whether the purpose had been made known, whether the valves were reasonably fit, and whether BSS displaced the inference of reliance.

The liability and costs appeals were dismissed. Lord Justice Rimer gave the leading judgment, with which Lord Justice Pill and Sir David Keene agreed.

1. Purpose. The court used the four-question framework identified in Jewson Ltd v Boyhan [2004] 1 Lloyd’s Law Reports 505. The August fax and subsequent orders related to the same project, which BSS knew used Uponor components. Although the court would not endorse the judge’s finding that the purpose was expressly communicated, it upheld the finding that the purpose was impliedly made known. It was at least apparent or likely that the valves would be used with the Uponor pipe system.
2. Fitness. The valves were not reasonably fit for that purpose. They were BSS’s own valves, designed for copper piping, and were incompatible with the Uponor adaptors with which they were likely to be used. A specialist supplier with knowledge of the system had sufficient information to assess compatibility and was required to exercise its skill and judgment.
3. Idiosyncrasy. The principle illustrated by Griffiths v Peter Conway, Ltd [1939] 1 All ER 685 and Slater v Finning [1997] AC 473 concerns an abnormal feature of the buyer or the circumstances of use that was not made known to the seller. It did not apply to two ordinary, sound components that were simply incompatible. BSS had the relevant product information and should have checked the threads.
4. Reliance. Under section 14(3), as explained in Slater, reliance is prima facie once the purpose is made known, and the seller must prove either that the buyer did not rely on its skill and judgment or that reliance was unreasonable. Henry Kendall & Sons v William Lillico & Sons Ltd [1969] 2 AC 31 and Ashington Piggeries Ltd v Christopher Hill Ltd [1972] AC 441 supported the inference that reliance need not be exclusive. Makers’ use of installers and testers did not displace its reliance on BSS. BSS did not show that reliance was absent or unreasonable.

1. Court of Appeal (Civil Division) — In [2011] EWCA Civ 809, the court dismissed BSS’s appeals against the liability and costs orders.
2. Cambridge County Court — His Honour Judge O’Brien found BSS liable for breach of the implied term as to fitness for purpose, ordered an inquiry as to damages, and awarded Makers 80% of the costs of the liability issue.