Time to reject: Clegg v Andersson

United Kingdom
Bernstein v Pamson Motors established that three weeks was too long to keep a car before rejecting it. A recent case has, however, overruled this. In Clegg v Andersson (2003), the Court of Appeal said that the Claimants were entitled to reject a brand new boat even after seven months.

Mr and Mrs Clegg bought a new yacht from the Defendant in August 2000. The yacht had a number of extras, including a shoal draught keel. When the manufacturer delivered the yacht to the Defendant in July 2000, the Defendant noticed that the keel was substantially heavier than the manufacturer’s standard specification. The Defendant informed the Claimants of this fact when he delivered the yacht to them. The Claimants sailed it for a day, and then for an eight-day trip, following which Mr Clegg told the Defendant that he liked the boat and the way it sailed. The Claimants and the Defendant corresponded regularly regarding the overweight keel until March 2001. The Defendant liaised with the manufacturer of the yacht and recommended to the Claimants that 1000kg of excess lead be shaved off the keel. The manufacturer sent staff to do the work, however, the Claimants suggested that, rather than remove weight, the rigging could be adjusted to compensate for the excess weight. The Claimants instructed the Defendant not to allow any work to be carried out until it had provided them with plans and amended specifications, as well as information regarding the yacht’s performance and the effect of the overweight keel and various proposed modifications on resale. The Claimants made clear that they did not have the relevant expertise to decide on what modifications were appropriate, and needed certain information so that their advisors could assist them. The information requested was not provided to the Claimants until 14 February 2001.

Three weeks later on 6 March 2001 the Claimants rejected the yacht on the basis that it had not yet been perfected and delivered and the sea trials had revealed problems. The Claimants claimed the return of the purchase price and damages for breach of contract.

At trial the Claimants claimed that s13 Sale of Goods Act 1979 (“SGA”) had been breached because the yacht supplied did not correspond with the description in the contract, which entitled them to reject the yacht and to recover the purchase price and damages. However, the judge decided that the Claimants were not entitled to reject the yacht because the contractual term regarding the keel’s weight was not a condition, and the yacht as delivered met the description in the contract of the goods to be sold. In any case, even if there had been a breach of condition, the Claimants had lost their right to reject the yacht before 6 March. There was no breach of s14 SGA, as the yacht was of satisfactory quality - the implications of the keel being overweight were so small as to be incapable of measurement in relation to matters such as speed and fuel efficiency, and so long term and so dependent on how often the yacht was sailed and in what conditions of wind and sea in relation to the possibility of a reduction in the service life of the rigging. The Claimants had also failed to mitigate their loss. The Claimants appealed.

The Court of Appeal considered three issues:

  • whether there was a breach of
    condition;
  • if so, whether the Claimants had lost their right to reject the yacht; and
  • whether the Claimants were in any event entitled to damages and if so, how much.

Was there a breach of condition?

On appeal, it was decided that the evidence established beyond doubt that the effect of the overweight keel on the safety of the rig was both adverse and unacceptable to the manufacturers of the rig, and the yacht required remedial treatment. At first, the Defendant had proposed to have 1000 kg shaved off the keel, however this was later reduced to 800 kg. The Court held that a reasonable person would consider that the yacht as delivered was not of satisfactory quality because of the overweight keel, the adverse effect this had on rig safety and the need for more than minimal remedial work. The Court said that a “reasonable person” was not an expert. In this case, had the reasonable person been told that the seller himself had realised that a very large quantity of lead would have to be removed in some as yet unspecified way from the keel of a brand new, valuable boat, with as yet unspecified consequences for its safety and performance, he would have little difficulty in concluding that the boat was not of satisfactory quality. Had he been told that the seller would later recommend removal of different quantities of lead, he would have no difficulty in concluding that the yacht was not of satisfactory quality. Further, the parties’ experts agreed that the yacht was dangerous as a result of the excess weight of the keel. On this basis, the Claimants had established a claim under s14 SGA and it was unnecessary to consider whether a claim existed under s13 as well.

Had the claimants lost their right to reject the yacht?

A buyer has the right to reject goods that are not of satisfactory quality, although he does have to act reasonably in choosing rejection rather than damages or cure. He can reject the goods for whatever reason he chooses, as long as he has not lost the right to do so by accepting them (s11(4) SGA).

In this case, the Claimants were initially entitled to reject the yacht. However, the Defendant argued that they had lost this right by the time they purported to reject the yacht on 6 March 2001. At the original trial the judge agreed that the Claimants had accepted the yacht through their conduct following the delivery of the yacht. These actions included taking an eight day family cruise, instructing the Defendant that remedial work should not be undertaken on the keel, leaving personal possessions on the yacht throughout the process, Mr Clegg’s indication that he wished to move the yacht to Portugal or Gibraltar in May 2001, his assertion that he had an insurable interest in the yacht and his attempt to register the yacht. The Judge said that the concerns Mr Clegg raised in correspondence did not relate to whether he should reject the yacht, but simply whether the remedial work proposed by the Defendant was necessary.

However, on appeal the Court held that these actions did not indicate acceptance of the yacht. In his correspondence with the Defendant, Mr Clegg had simply been requesting information so that he might decide whether or not to accept the yacht. He had requested revised specifications and measurements so that his advisors might help him to determine whether or not to accept the yacht. Until these were delivered, the Claimants were in no position to decide whether to accept the yacht or not. Even if they had agreed to the remedial repairs, this would not mean they had accepted the yacht, since under s35(6)(a) SGA a buyer is not deemed to have accepted goods if he asks for or agrees to their repair by the seller. The acts of insuring the yacht and attempting to register it were not inconsistent with the Defendant’s interest in it, especially since the Claimants were obliged to do so under the loan agreement for the purchase money. Mr Clegg had not known that the yacht was dangerous when he took his family on holiday on it.

A buyer is deemed to have accepted goods when after the lapse of a reasonable time he retains the goods without intimating to the seller that he has rejected them (s35(4) SGA) and a “reasonable time” is determined by the facts of each case. Time taken in requesting or agreeing to repairs, and for carrying out the repairs, is not to be counted. In this case, the Claimants had not received the information they had requested until three weeks before they rejected the yacht, which did not exceed a reasonable time. The Claimants were therefore entitled to reject the yacht on 6 March 2001, and to the return of the purchase price and other acquisition costs, as well as compensation for consequential losses.

Conclusion

The principles arising from this case do not simply apply to the purchase of boats, but to any goods. The Court of Appeal held that the principle arising from Bernstein v Pamson Motors is no longer good law, since it was based on the provisions of the Sale of Goods Act 1979, before amendment by the Sale and Supply of Goods Act 1994. Whether a buyer has lost the right to reject goods by leaving it too long to tell the seller he is rejecting them will come down to the facts of each case, however as a result of Clegg v Andersson, the consumer appears to be placed in a much stronger position than he was by Bernstein v Pamson Motors.

For further information please contact Diane Everist at diane.everist@cms-cmck.com or on +44 (0)20 7367 2050