Stephenson v Cookson

This is an application for permission to appeal. It is made by Mr Jackson Reed Stephenson. He seeks permission to appeal against a judgment of Mr Recorder Elliott, Queen’s Counsel, given at York County Court on 11 December 2008, in a dispute which had arisen from the sale of a horse by the applicant, Mr Reed Stephenson, to the claimant in the action, Mr Cookson.

The judge found that the applicant had been in breach of Section 14(2)(a) of the Sale of Goods Act 1979, and he awarded damages of £10,500. The contract for the sale of the horse, Unique, was on 29 June 2006 and the sale was at a price of £14,500. The horse was subsequently returned to the applicant and sold by him at a much-reduced price, which explains the limitation of the damages in that way. In a careful judgment the Recorder set out the horse’s history and the history of the negotiations. The purchaser wanted a horse for her daughter that would be capable of show-jumping at an affiliated level and at BSJA Rules. There was a friendly relationship at that stage between the parties.

All litigation is unfortunate. This is particularly unfortunate because it led to some vitriolic allegations against the applicant; allegations that the judge found were not established, and the judge accepted that the applicant had acted in good faith in the sale.

However, as Mr Jackson on his behalf accepts, the wording of Section 14 is such that, if goods and animal are sold which are not of satisfactory quality, then, subject to the proviso in subparagraph (2C), the burden is upon the vendor. Section 14(2) provides that, 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 a satisfactory quality. Subsection (2A) 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, price (if relevant) and all the other relevant circumstances. Subsection (2B) then specifies matters to be taken into consideration. Subsection (2C)(a) provides that the implied term as to satisfactory quality does not extend to any matter making the quality of goods unsatisfactory, “which is specifically drawn to the buyers attention before the contract was made”.

There is no doubt that the horse had a relatively successful career to the date of the sale. However, when the horse, several years earlier, had been two years’ old, it had sustained a trauma, and that trauma had led to a thickening in the pastern area. The judge found that the horse was not of satisfactory quality within the meaning of Section 14. He further found that the vendor could not escape liability by reason of the proviso in subsection (2C) to which I have referred.

On behalf of the applicant Mr Jackson submits that the provision should apply. He further submits that the judge erred in law in finding that the horse was not of a satisfactory quality in the circumstances, and he further submits, to support that submission, that the judge found that there was no breach of the fitness for purpose within the section.

This is a renewed application. Permission was refused on consideration of the papers by Longmore LJ. He gave his reasons:

“1.

I do not know if a thick pastern is a symptom of osteoarthritis, but even if it is, it is different from a defective clutch of a car, which is more expensive to repair than expected. Can osteoarthritis ever be cured?

2.

The buyer was, moreover, put off detailed enquiry by the assertion that the thick pastern was caused by injury when the horse was two years’ old.”

Mr Jackson understandably has taken the court to the case of Bartlett v Sidney Marcus Limited [1965] 1WLR 1013, which was a case involving the sale of a motor vehicle with a defective clutch. Mr Jackson submits that Longmore LJ’s analogy is not appropriate as a way of justifying the judge’s decision. He submits that the case is on a par with Bartlett in that the applicant did draw to the purchaser’s attention the thickening of the pastern in the very area where it was subsequently found that osteoarthritis was present. Mr Jackson has referred me to the judgment of Salmon LJ where the principle is stated at page 1018: “It is also important to notice that the buyer’s attention was drawn to the defective clutch at the time of the sale. He knew how the clutch behaved on the road. All he discovered later was that the extent or cause of the clutch’s misbehaviour was rather graver than had been anticipated and would cost more than estimated to put in order”. Mr Jackson submits that Longmore LJ’s distinguishing the present situation from that envisaged by Salmon LJ was inappropriate.

I do not propose to set out the history of the transaction in detail. The recorder has done that clearly and in a way which is not challenged. The purchaser was sufficiently concerned to obtain the report of a veterinary surgeon. In fact it was the applicant’s veterinary surgeon, Mr Whitehead. However, he was only instructed to give a very limited report, which did not discover the osteoarthritis which subsequent investigation showed was present, and his certification did not cover that condition.

The judge’s reasoning to which Mr Jackson has referred me is at paragraph 32 and following. He sets out the submissions of Mr Deal, counsel for the purchaser, and Mr Jackson’s own submissions, which were clearly put, no doubt, as they have been to this court, and plainly understood by the judge. The judge referred to the wording of sub section 2(c) which I cited and continued. What made Unique unsatisfactory was the osteoarthritic condition:

“Not only did Mr Reed Stephenson not draw Mrs Cookson’s attention to that or appear to acknowledge that there was a thickening, but he specifically said that there was not a problem”.

[I interpose there to say that Mr Jackson challenges the latter part of that finding and he relies on an earlier finding of the judge at paragraph 7 that is inconsistent with it. I accept Mr Jackson’s submission. I do not find the Recorder justified in putting it as strongly as he did by using the word “specifically”. The true position is, as stated in paragraph 7:

“…he [that is the applicant] assured her [that is Mrs Cookson] that it was as a result of an injury that had occurred when the horse was a two-year-old and that it had never caused any problems. He was able to emphasise that it had never caused any problem by reason of the type of shows at which Unique had competed in previous years.”]

I continue at paragraph 36. The Recorder stated:

“Because in truth, he -- and it is perfectly understandable given the history of the matter -- had not experienced the problem. He did not draw her attention […] ‘Any matter making the quality of goods unsatisfactory’. It was the osteoarthritic condition, which could only be seen by way of x-rays, that made the horse unsatisfactory.”

There was a problem. There was an “unsatisfactory” matter in relation to the pastern and that was the significant osteoarthritic condition. The Recorder rejected the argument on subsection 2(c) and went on to consider the “fitness for purpose” claim to which I will refer briefly.

Before expressing conclusions I refer to the veterinary evidence before the judge. Following the purchase the purchaser obtained on 27 July 2006 a veterinary report from the Royal Veterinary College and that is signed by Mr Michael Archer. He refers to the firm swelling around the pastern joint. He refers to his radiographic examination. Radiographs of the pastern joints in the hind legs showed obvious chronic osteoarthritic changes in the left hind pastern. With the amount of bony change and damage to the joint it would be anticipated that, with work, this problem will get worse.

Under the heading “Recommendations”:

“The arthritic problem in this left hind leg has obviously been present for some time and without treatment it is likely to prevent this horse from being able to show jump at a high level. Returning this horse to the seller may be an option.”

Evidence was given by Mr Whitehead. He was called for good reason by Mr Jackson to deal with the unfounded claims, described by the judge as “vitriolic”, made against the applicant. However, the judge then permitted Mr Whitehead, who had been called as a lay witness, to be cross-examined as an expert -- he, of course, having examined the horse, albeit a much more limited examination, before the contract was made. I need only refer to a part of his evidence as summarised by the judge:

“I have no reason to disagree with the findings of the Veterinary College in the conclusions they draw. The conclusion was that this was significant osteoarthritis and the future for the horse would have been bleak. I can confirm that the horse has had no problems with its pastern.”

This application turns, in my judgment, on a short point. It is one which the Recorder plainly had in mind from the way in which he expressed himself, and also, though less plainly put, in the reasons given by Longmore LJ. The judge found no sufficient link between the thickening of the pastern, to which undoubtedly the applicant drew the purchaser’s attention, and the osteoarthritis only subsequently found on radiographic examination. That is a bridge he would have to cross to establish a real prospect of success in this court. In my judgment he has not crossed it, and the veterinary evidence does not establish any such link. There are cases, and they are not rare, where there is an injury to a part of the body, whether it is a human body or an animal’s body, which is unrelated to a subsequent and serious condition, which is already an underlying condition present in that part of the body.

The veterinary evidence does not establish a link between the thickening -- which had caused no problems for several years in the horse’s performance -- and the serious osteoarthritis subsequently discovered on radiographic examination. The lack of the link is demonstrated by the absence of a reference to it in the RVC report, in the language of Mr Whitehead to which I have referred, and also in the horse’s performance on the years following a trauma when the horse was two years’ old. That rendered significant the judge’s finding at paragraph 7 that the injury that occurred when the horse was a two-year-old had never caused any problems. It explains Longmore LJ’s second point that the buyer was put off detailed enquiry. That, as a matter of law, was not an issue; but what Longmore LJ did have in mind was the lack of a link. Longmore LJ in his reason 1 expressly said: “I do not know if a thick pastern is a symptom of osteoarthritis”, and thereby, albeit inferentially, expressed a provisional view that the link had not been established. The rest of his Ground 1 was based on an assumption which, in my judgment, is not on the evidence established.

This may be a harsh finding because, at first glance, one would think that in the same part of the body a trauma, albeit several years earlier, is likely to bear a link with the serious osteoarthritis subsequently found to be present. In my judgment the Recorder was entitled, in the paragraphs to which I have referred, to make the finding he did. A distinction could properly be drawn, and the judge drew it in paragraph 36, between the thickening and the osteoarthritis.

I turn to the point in relation to fitness for purpose. The judge found for the applicant on that ground because he found that there had been no reliance by the purchasers on the vendor’s expertise, and so in my judgment there was no perversity in his finding against the applicant on the first ground but for him on the second.

There remains the question whether there was, on the evidence, a breach of Section 14 by reason of the condition of the horse. In this, as on the issue have already considered, members of this court must bear in mind that it is the trial judge who hears the evidence and who makes the findings of fact. This court can intervene only if there is an error of law is established, for present purposes a real prospect that it can be established, though of course a misunderstanding of evidence can amount in itself to an error of law.

Mr Jackson relies on the good performance of Unique as the judge found it to be in the time following its return to him by the purchaser, and that was a factor which the judge had in mind. However, he was entitled, in my judgment, and plainly entitled on the veterinary evidence before him, to make the finding of fact he did. There are firm statements, first in the RVC report, supported, in the event, by the evidence which Mr Whitehead no doubt reluctantly gave, that the future was bleak.

Mr Jackson has said all that could be said on behalf of the applicant. He has made his submissions persuasively, but I have been unable to conclude that, on a fuller consideration in this court, there is a real prospect that the applicant would be successful. Accordingly, this application must be refused.