Sir Andrew Morritt VC
[1] By an agreement in writing made in December 1999 the appellants, Mr and Mrs Clegg, agreed to buy from the respondent Mr Olle Andersson for £236,000 a new Malo 42 yacht (the yacht) with a shoal draught keel 'in accordance with the manufacturer's standard specification'. Such specification prescribed, amongst other things, draught of 1795m, displacement of 1378 tonnes and 'ballast (encapsulated lead keel) 575t'. The yacht was delivered by the manufacturers, Malo, to Mr Andersson on 25 July 2000 and by him to the Cleggs on 12 August 2000.
[2] Mr Andersson realised and informed the Cleggs at the time of delivery of the yacht that the keel was substantially heavier than the manufacturer's standard specification prescribed. Between 28 August 2000 and 1 March 2001 Mr Clegg and Mr Andersson corresponded on, amongst other matters, the overweight keel, its consequences and available remedies. On 6 March 2001 solicitors for the Cleggs wrote to Mr Andersson claiming that the Cleggs were entitled to reject the yacht and thereby did so. Mr Andersson disagreed. These proceedings were instituted by the Cleggs on 16 May 2001. They claim the return of the purchase price and damages for breach of contract.
Held: S 35(4) Reasonable time
[62] In Bernstein v Pamson Motors (Golders Green) Ltd [1987] 2 All ER 220 Rougier J was concerned with a case in which the car had been delivered to the buyer three weeks before the purported rejection. In the interval the purchaser had driven it 140 miles. Rougier J said (at 230):
'In my judgment, the nature of the particular defect, discovered ex post facto, and the speed with which it might have been discovered, are irrelevant to the concept of reasonable time in s 35 as drafted. That section seems to me to be directed solely to what is a reasonable practical interval in commercial terms between a buyer receiving the goods and his ability to send them back, taking into consideration from his point of view the nature of the goods and their function, and from the point of view of the seller the commercial desirability of being able to close his ledger reasonably soon after the transaction is complete. The complexity of the intended function of the goods is clearly of prime consideration here. What is a reasonable time in relation to a bicycle would hardly suffice for a nuclear submarine.'
[63] As the judge acknowledged, that decision has been criticised (FMB Reynolds 'Loss of Right to Reject' (1988) 104 LQR 16). Further it was based on the terms of s 35 before amendment by the 1994 Act. It is unnecessary to express a view as to whether the decision of Rougier J was correct before the amendment to s 35 effected by the 1994 Act. In my view it does not represent the law now. As originally enacted s 35(1) provided that a buyer was deemed to have accepted goods, inter alia, 'when after the lapse of a reasonable time he retains the goods without intimating to the seller that he has rejected them'. Section 59 provided then, as it does now, that what is a reasonable time is a question of fact. The material difference arises from the removal of that part of sub-s (1) to sub-s (4) and the addition of sub-ss (5) and (6). Thus sub-s (5) provides that whether or not the buyer has had a reasonable time to inspect the goods is only one of the questions to be answered in ascertaining whether there has been acceptance in accordance with sub-s (4). Subsection (6)(a) shows that time taken merely in requesting or agreeing to repairs, and, I would hold, for carrying them out, is not to be counted.
[64] In these circumstances I consider that time taken to ascertain what would be required to effect modification or repair is to be taken into account in resolving the question of fact which arises under sub-s (4). In the light of the undisputed fact that Mr Clegg did not receive the information he had sought in August and September 2000 until 15 February 2001 I consider that the three weeks which elapsed thereafter until the letter of rejection dated 6 March 2001 did not exceed a reasonable time for the purposes of s 35(4) of the 1979 Act.
[65] In the concluding sentences of para [55] the judge speculated on why Mr Clegg determined to reject the yacht when he did. He rejected the evidence of Mr Clegg and considered that he sought to manoeuvre his wife and himself into a better bargaining position with regard to Mr Andersson. In my view the reason why the Cleggs rejected the yacht when they did is irrelevant if, as I consider, they had the right to do so.
Hale LJ
[74] In English law, however, the customer has a right to reject goods which are not of satisfactory quality. He does not have to act reasonably in choosing rejection rather than damages or cure. He can reject for whatever reason he chooses. The only question is whether he has lost that right by accepting the goods: s 11(4). Once again, amendments made in the 1994 Act were designed to strengthen the buyer's right to reject by restricting the circumstances in which he might be held to have lost it. In particular, the Commissions (see [72], above) thought that informal attempts at cure should be encouraged: para 5.28.
[75] The buyer loses the right to reject if he informs the seller that he has accepted the goods, or if he acts inconsistently with the seller's reversionary interest in the goods, or if he leaves it too long before telling the seller that he rejects them: s 35(1), (4). The first two of these are subject to his having a reasonable opportunity of examining the goods to ascertain whether they conform to the contract, including the implied terms in s 14; whether he has had such an opportunity is also relevant to the third: s 35(2), (5). And a buyer does not accept the goods simply because he asks for or agrees to their repair: s 35(6). It follows that if a buyer is seeking information which the seller has agreed to supply which will enable the buyer to make a properly informed choice between acceptance, rejection or cure, and if cure in what way, he cannot have lost his right to reject.
[76] This was a buyer who was told very early on that something was not right with his brand new boat and given one suggestion for curing it. When he sought time and information to reflect upon the best way forward the sellers agreed to supply the information required. When they eventually produced this, they not only made it clear that there was no 'do nothing' option, but presented two very different options for putting it right, each different from the one they had originally proposed. In my view, time only began to run then and the three weeks it took the buyer to inform the seller that he was rejecting the boat were not more than a reasonable time.