Alliott v Cheeld (Blacksmith)

A defect does not automatically amount to a breach of condition. The question is one of degree, assessed by reference to what a reasonable person would regard as satisfactory and relevant matters including price, appearance and finish. In a consumer transaction near the boundary between sale of goods and supply of services, the court need not decide the precise classification where the implied terms are materially similar and the result is the same under either regime. Defects may constitute a breach of condition where their nature, rectification cost and practicalities, together with the contractual expectation of quality, make the statutory standard unmet. A right to reject is not lost without a sound finding of unconditional acceptance.

The appellants entered into an oral contract with the respondent, a blacksmith, for a porch costing £6,500 and paid a £2,000 deposit. They alleged defective workmanship and sought to reject the porch. The Deputy District Judge found a breach of warranty, assessed the cost of remedying the defects at £2,250 and ordered payment of £2,000 to the respondent. HHJ McIntyre allowed an appeal concerning the assessment of damages and permitted further evidence, but rejected the argument that the defects necessarily constituted a breach of condition. On second appeal, the issues included the classification of the defects under the Sale of Goods Act 1979 or the Supply of Goods and Services Act 1982, loss of the right to reject by affirmation, and the propriety of remission for further evidence.

Lord Justice Treacy gave the leading judgment. Lord Justice Kitchin and Lord Justice Lloyd agreed with his reasoning and outcome. The appeal was allowed.

1. Remission for further evidence. The Circuit Judge should not have remitted the case for evidence about the cost of remedying the workmanship. The case had proceeded under the informal small claims procedure, expert evidence had previously been refused as disproportionate, and the Deputy District Judge had assessed the defects using the contract price, photographs and an examination of part of the work.
2. Condition or warranty. Not every defect is a breach of condition. The distinction is one of degree. Minor defects may amount only to a breach of warranty sounding in damages. Under the Sale of Goods Act 1979, satisfactory quality had to be assessed by the statutory criteria, including the reasonable-person standard and matters such as price, appearance and finish. The nature of the defects, the cost and practicalities of rectification, including substantial dismantling and reworking, and the contractual expectation of the highest quality established a breach of condition under section 14(6) of that Act. The same conclusion followed under section 4(2) of the Supply of Goods and Services Act 1982, so it was unnecessary to determine which statutory regime applied.
3. Right to reject. The respondent’s argument that the appellants had affirmed the contract was raised for the first time on the second appeal, a practice which the court deprecated. The issue had not been decided below. In any event, the evidence that the appellants arranged painting and delayed rejection was ambiguous and capable of showing only provisional acceptance pending the finished appearance, with the respondent aware of their dissatisfaction. The court therefore declined to sustain the judgment on the basis of affirmation.
4. Orders. The Circuit Judge’s order for further evidence and the Deputy District Judge’s judgment were set aside. The respondent’s claim was dismissed. Judgment was entered on the counterclaim for £2,150, and the further £2,000 paid by the appellants under the Deputy District Judge’s order was ordered to be repaid.

• Court of Appeal (Civil Division) — On second appeal, the court allowed the appeal and made orders dismissing the claim and allowing the counterclaim.
• Milton Keynes County Court — HHJ McIntyre, on 19 September 2012, allowed the appeal concerning the assessment of the cost of remedial work and permitted further evidence. He rejected the contention that the defects necessarily constituted a breach of condition.
• Milton Keynes County Court — Deputy District Judge Bennett, on 23 February 2012, found defective workmanship amounting to a breach of warranty, assessed the cost of remedying it at £2,250 and ordered the appellants to pay £2,000.