ON APPEAL FROM THE LEEDS COUNTY COURT
TECHNOLOGY AND CONSTRUCTION COURT LIST
HIS HONOUR JUDGE COCKROFT
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE LLOYD
MR JUSTICE LEWISON
| (1) KEITH LOWE
(2) ANN LOWE
|- and -
|W MACHELL JOINERY LTD
Lisa Linklater (instructed by Lee & Priestley) for the Respondent
Hearing date: 6 April 2011
Crown Copyright ©
See Costs Judgment:  EWCA Civ 798
Lord Justice Lloyd:
"1.28 Flights and landings should be guarded at the sides (see Diagram 11):
a. in dwellings - where there is a drop of more than 600mm
1.29 Except on stairs in a building which is not likely to be used by children under 5 years the guarding to a flight should prevent children being held fast by the guarding. The construction should be such that:
a. a 100mm sphere cannot pass through any openings in the guarding; and
b. children will not readily be able to climb the guarding."
"3.3 Where buildings are likely to be used by children under 5 years the guarding should prevent children being held fast by the guarding. The construction should be such that a 100mm sphere cannot pass through any opening on the guarding and so that children will not readily be able to climb it. Horizontal rails for such guarding should be avoided."
"It seems to me … that the Defendant ought not to have designed a staircase which could not obtain Building Regulations approval. However, even if I were wrong about that, the least which could reasonably be required of the Defendants was that they warned the Claimants of the significance of the 100 millimetre sphere on the drawings and of the need for the Claimant to obtain approval in particular for the spindle design before the parts were manufactured, or alternatively to satisfy the building inspector, if they could, that the premises would not be occupied or visited by children under 5."
"In the present case, the Defendants supplied a staircase which had it been assembled, exactly complied with the Claimants' requirements, but unbeknown to both parties, would have been unlawful, though easily capable of being modified. However, the Claimants will not accept a modified staircase. They cannot expect to receive general damages for having to put up with something they have no intention of putting up with."
"(1) Except as provided by this section and section 15 below and subject to any other enactment, there is no implied term about the quality or fitness for any particular purpose of goods supplied under a contract of sale.
(2) Where the seller sells goods in the course of a business, there is an implied term that the goods supplied under the contract are of satisfactory quality.
(2A) For the purposes of this Act, goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all the other relevant circumstances.
(2B) For the purposes of this Act, the quality of goods includes their state and condition and the following (among others) are in appropriate cases aspects of the quality of goods—
(a) fitness for all the purposes for which goods of the kind in question are commonly supplied,
(b) appearance and finish,
(c) freedom from minor defects,
(d) safety, and
(2C) The term implied by subsection (2) above does not extend to any matter making the quality of goods unsatisfactory—
(a) which is specifically drawn to the buyer's attention before the contract is made,
(3) Where the seller sells goods in the course of a business and the buyer, expressly or by implication, makes known—
(a) to the seller,
any particular purpose for which the goods are being bought, there is an implied term that the goods supplied under the contract are reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied, except where the circumstances show that the buyer does not rely, or that it is unreasonable for him to rely, on the skill or judgment of the seller ….
(6) As regards England and Wales and Northern Ireland, the terms implied by subsections (2) and (3) above are conditions."
"15A Modification of remedies for breach of condition in non-consumer cases
(1) Where in the case of a contract of sale—
(a) the buyer would, apart from this subsection, have the right to reject goods by reason of a breach on the part of the seller of a term implied by section 13, 14 or 15 above, but
(b) the breach is so slight that it would be unreasonable for him to reject them,
then, if the buyer does not deal as consumer, the breach is not to be treated as a breach of condition but may be treated as a breach of warranty.
(2) This section applies unless a contrary intention appears in, or is to be implied from, the contract.
(3) It is for the seller to show that a breach fell within subsection (1)(b) above."
"A party who seeks to advance a different case, in circumstances such as this, bears a heavy burden as regards showing that the case could not have been conducted differently, in any material respect, as regards the evidence."
Mr Justice Lewison
"It is on the basis of the pleadings that the parties decide what evidence they will need to place before the court and what preparations are necessary before the trial. Where one party advances a case that is inconsistent with his pleadings, it often happens that the other party takes no point on this. Where the departure from the pleadings causes no prejudice, or where for some other reason it is obvious that the court, if asked, will give permission to amend the pleading, the other party may be sensible to take no pleading point. Where, however, departure from a pleading will cause prejudice, it is in the interests of justice that the other party should be entitled to insist that this is not permitted unless the pleading is appropriately amended. That then introduces, in its proper context, the issue of whether or not the party in question should be permitted to advance a case which has not hitherto been pleaded."
"Their Lordships consider that the plaintiffs cannot complain of being misled about the evidence they would need to adduce at the trial. On the pleadings, the whole question of contractual liability and the construction of the agreement was in issue. It would have been open to the Meat Board, without any amendment of the pleadings, to put before Heron J the argument upon which it now relies."
"Mr Reynold [counsel for the Appellant] concedes that neither point was argued below and that it represents to some extent a departure from Mr Jones' pleaded case."
Lord Justice Rix
"My Lords, I think that a point such as this, not taken at the trial, and presented for the first time in the Court of Appeal, ought to be most jealously scrutinised. The conduct of a cause at the trial is governed by, and the questions asked of the witnesses are directed to, the points then suggested. And it is obvious that no care is exercised in the elucidation of facts not material to them.
It appears to me that under these circumstances a Court of Appeal ought only to decide in favour of an appellant on a ground there put forward for the first time, if it be satisfied beyond doubt, first, that it has before it all the facts bearing upon the new contention, as completely as would have been the case if the controversy had arisen at the trial; and next, that no satisfactory explanation had been afforded them when in the witness box."
"52. Civil trials are conducted on the basis that the court decides the factual and legal issues which the parties bring before the court. Normally each party should bring before the court the whole relevant case that he wishes to advance. He may choose to confine his claim or defence to some only of the theoretical ways in which the case may be put. If he does so, the court will decide the issues which are raised and normally will not decide issues which are not raised. Normally a party cannot raise in subsequent proceedings claims or issues which could and should have been raised in the first proceedings. Equally a party cannot, in my judgment, normally seek to appeal a trial judge's decision on the basis that a claim, which could have been brought before the trial judge, but was not, would have succeeded if it had been so brought. The justice of this as a general principle is, in my view, obvious. It is not merely a matter of efficiency, expediency and cost, but of substantial justice. Parties to litigation are entitled to know where they stand. The parties are entitled, and the court requires, to know what the issues are. Upon this depends a variety of decisions, including, by the parties, what evidence to call, how much effort and money it is appropriate to invest in the case, and generally how to conduct the case; and, by the court, what case management and administrative decisions and directions to make and give, and the substantive decisions in the case itself. Litigation should be resolved once and for all, and it is not, generally speaking, just if a party who successfully contested a case advanced on one basis should be expected to face on appeal, not a challenge to the original decision, but a new case advanced on a different basis. There may be exceptional cases in which the court would not apply the general principle which I have expressed. But in my view this is not such a case."
". It therefore appears to their Lordships that despite the fact that the true construction of the contract was not argued before the judge, the plaintiffs could not have complained of prejudice if the point had been taken in the Court of Appeal. It was a question of law on which no further evidence could have been called. The position is the same before their Lordships' Board …  … If there were any possibility that the outcome could have been affected if the point had been taken earlier, that of course would have been an entirely different matter."
That is not this case.
"I would like to take this opportunity to remind you that any problems you may feel you have with any of the products I have supplied will be addressed and where necessary put right. I find that talking either face to face or by phone more productive than letter-writing as finer details can be discussed there and then, giving quicker and more effective solutions. I look forward to hearing from you soon to resolve the problem or problems. I am nearly always available."
"22. Are there any other arguments which would justify rejection of the goods? There were some feeble complaints about variation in the colour of the wood and an alleged failure to conform to British Standard in the way that the risers were butt-jointed to the back of the treads. However, these arguments were not advanced at trial with any conviction for the good reason that Mr Nicholson [the single joint expert] dismisses both in his report. I do not, therefore, propose to address them further.
23. An argument belatedly raised concerning the application of the Building Regulations 2000, as amended, does, however, merit close attention…"
"The Defendant has failed to build a staircase and has failed even to supply the goods despite numinous (sc numerous) request."
It was only on 8 June 2010, within two months of trial, that amended particulars of claim were served. These pleaded certain express terms (and numerous breaches of them), none of which remain in any way relevant, but also pleaded the following implied terms:
"5. There were implied terms of the contract:
(a) That the staircase would be of satisfactory quality, taking into account the matters set out in section 14(2)(b) Sale of Goods Act 1979 (as amended) ("the Act") and
(b) Pursuant to section 14(3) of the Act that the staircase would be fit for purpose; and/or
(c) That the staircase would be constructed in accordance with and in such a way as to satisfy the relevant building regulations and British Standards."
"The staircase does not comply with current building regulations. Specifically the spindles do [not] comply/satisfy paragraph 1.29 of Building regulations Approved Document K – Stairs, ladders and ramps."
That was the sole breach found by the judge (albeit in terms not of paragraph 1.29 of K1, but of paragraph 3.3 of K2). It was as such a breach of the para 5(c) implied term. But what of the statutory implied terms? The judge did not say that he found the staircase to be of unsatisfactory quality or unfit for its purpose. Why was that, or did he just fail to consider that possibility?
"The issue was whether the breach of contract (failure to design spindles to a staircase in conformity with Building Reg. Approved Doct K), justified rejection of the goods. With modest modification to the design the spindles would have been compliant. No prospect of successfully appealing the decision that in the circumstances rejection was disproportionate and unreasonable."
Similarly, during submissions as to costs, the judge referred to the Lowes seizing "the only point available to you which is that I have found that there was a breach in that the staircase was not Part K Building Regulations compliant".
"The principal question concerns the rejection of the goods. Some potentially difficult issues arise, on which the judge does not seem to have received much assistance at the trial. The judge found that the reasons given at the time of rejection were unfounded [judgment §§ 16-23]. I did not understand that part of the judgment to be challenged, nor could it be. He then found [§35] that the failure to comply with the Building Regs was a breach of contract and, it must be assumed though he did not say so, a breach of condition. If it was a breach of condition the appellants were arguably entitled to reject the goods however lacking in good sense that step was. That ability is in principle not reduced by the judge's finding [§35] that by the time the Building Regs point arose the appellants had already purported to reject the goods, on inadequate grounds. That a rejection on wrong grounds can be validated by the existence of good grounds not then relied on is established in principle by a long series of cases, most recently Glencore Grain v Lebanese OIC  2 Lloyd's Rep 386 and South Caribbean v Transfigura  1 Lloyd's Rep 128 -. That again is, however, subject to the qualification [Glencore at p395] that the subsequent reason cannot be relied on if that reason, if relied on at the right time, "could have been put right". That verbal statement at first sight attracts the judge's (commonsense) view that the breach could have been rectified with reasonable co-operation. It may, however, not be right to take that view in respect of regulatory as opposed to simply physical fitness. I am afraid that that sort of point cannot be resolved at the application stage …
This appeal raises difficult issues, the resolution of which will cost far more than anything that either party is likely to obtain from it. I add my voice to that of the judge in urging the parties to seek an accommodation."
"It may be that this is what the judge had in mind when he posed the question at  "…does the failure of the staircase to comply in the respect explained with the building regulations, justify rejection?" However, it is respectfully submitted that he erred in posing that question. It formed no part of the respondent's pleaded case that the appellants did not deal as consumers. Nor was that alleged at trial. Under s61(5A) SOGA the burden would have been on the respondent, had it wished to rely on s15A, to (plead and) prove that the appellants did not deal as consumers."