O' Donnell v Truck & MacHinery Sales Ltd
| Jurisdiction | Ireland |
| Judge | Mr. Justice Moriarty |
| Judgment Date | 07 June 1996 |
| Neutral Citation | [1996] IEHC 3 |
| Docket Number | 1590S/1992 |
| Court | High Court |
| Date | 07 June 1996 |
[1996] IEHC 3
THE HIGH COURT
BETWEEN
AND
AND
AND
Citations:
SALE OF GOODS ACT 1893 S14(2)
SALE OF GOODS ACT 1893 S14(4)
SALE OF GOODS & SUPPLY OF SERVICES ACT 1980 S14(2)
SALE OF GOODS & SUPPLY OF SERVICES ACT 1980 S14(4)
SALE OF GOODS & SUPPLY OF SERVICES ACT 1980 S45(1)
HEDLEY BYRNE & CO LTD V HELLER & PARTNERS LTD 1964 AC 465
SECURITY TRUST LTD V HUGH MOORE & ALEXANDER LTD 1964 IR 417
DOOLAN V MURRAY & ORS UNREP KEANE 21.12.93 1994/2/414
ESSO PETROLEUM CO V MARDEN 1976 2 AER 5
CIVIL LIABILITY ACT 1961 S34(1)
CIVIL LIABILITY ACT 1961 S2
WILLIAMS JOINT TORTS & CONTRIBUTORY NEGLIGENCE (1951) 215
LYONS V THOMAS 1986 IR 666
GRAN GELATO LTD V RICHCLIFF (GROUP) LTD 1992 CH 560
MISREPRESENTATION ACT 1967 (UK)
CALLINAN V VOLUNTARY HEALTH INSURANCE BOARD UNREP SUPREME 28.7.94 1994/8/2192
Synopsis:
CONTRACT
Counterclaim - agreement for sale and exchange of goods - s.14(2) and s.14(4) Sale of Goods Act, 1893 & 1980 - whether goods reasonably fit for required purpose - whether negligent misrepresentation and or statutory misrepresentation pursuant to s.45(1) Sale of Goods and Supply of Services Act, 1980 - whether contributory negligence - s.34(1) Civil Liability Act, 1961 - damages Held: Negligent and Statutory misrepresentation - contributory negligence found - (High Court: Moriarty J. - 07/06/1996) [1997] 1 ILRM 466
|O'Donnell & Co. Ltd. v. Truck & Machinery Sales Ltd.|
For the purpose of convenience in the judgment I will refer, because it is confusing when a Plaintiff is effectively a Respondent, to Pat O'Donnell & Co. Limited either by name or as Defendants to the Counterclaim and to Truck & Machinery Sales Limited either as Counterclaimants or by their corporate name.
The primarily factual issues to be determined upon the hearing of this Counterclaim relate to an agreement between both parties of the 12th February, 1992, for the sale and exchange of a substantial quantity of mechanical shovels; as further set forth in a signed written consent of the 23rd March, 1992, which also detailed the related basis of compromise of pending proceedings involving the Counterclaimants and German vendors of like equipment who may be referred to as Zettelmeyer.
The agreement was concluded between the respective managing directors of both companies, Mr. James Mansfield and Mr. Pat O'Donnell, each of whom had traded in the business of earth moving equipment for in excess of 25 years and who were the most crucial witnesses in the hearing.
On both the liability and potential measure of damage issues there transpired to be a particularity of detail to such an extent that the trial's projected duration was more than trebled. But the particular circumstances giving rise to the agreement may be summarised as follows.
As Mr. Mansfield's business of leasing earth moving equipment in Ireland, primarily to those working quarries and gravel pits, and selling on such equipment both in Ireland and internationally, increased he came to have need of a substantial consignment of four-wheeled mechanical shovels. He had dealings with Mr. O'Donnell's company who had held the franchise in such equipment for the Volvo Group since 1970 back in 1988 when a substantial and mutually satisfactory agreement for the purchase of several Volve dump trucks was concluded between them.
The range of mechanical shovels available for purchase in Ireland at the time comprised of the American Caterpillar, the then market leader; the Japanese Konatsu; Volvo; and Zettelmeyer.
Of these, Mr. Mansfield bought 11 Zettelmeyers for approximately £900,000 of two different types, in late 1989 and 1990 and had cause to regret the decision, for they proved unreliable.
Upon getting no satisfaction from Zettelmeyer personnel Mr. Mansfield commenced High Court proceedings in May 1991. His problems in this regard were compounded when Mr. O'Donnell informed him in 1991 that Volvo were in the course of taking over Zettelmeyer and this acquisition duly took place.
Mr. Mansfield's need to address a situation in which shovels that were unsatisfactory might also acquire built-in obsolescence provided a heaven-sent sales opportunity for Mr. O'Donnell, for in 1991 Volvo were in the course of launching on the market a new model, the L150, with a view to competing much more effectively with the highly regarded mid-range Caterpillar 966 model than had its predecessor the L160.
Knowing Mr. Mansfield to be the largest potential purchaser in Ireland, Mr. O'Donnell made intense efforts in the latter portion of 1991 to interest Mr. Mansfield in purchasing L150's, emphasising excellent performance in demonstrations held in a range of Irish locations subsequent to the launch. It became clear to Mr. O'Donnell that if an agreement was to be finalised it would have to be on the basis that included returning the 11 Zettelmeyers or otherwise resolving the ongoing litigation in regard to them.
Matters came to a head at a meeting between the two men at Mr. Mansfield's Rathcoole office on the 29th January, 1992. Following discussion of various permutations, mutual interest favoured a basis of dealing whereby the 11 Zettelmeyers would be returned to Mr. O'Donnell for shipping on a basis of a one-for-one exchange with new L150 Volvo models accompanied by a further cash purchase of other L150's.
One immediate problem arose, however. The L150's were specified as being supplied with twenty-three and a half by twenty-five inch tyres, ("the smaller tyres") whereas Mr. Mansfield was adamant that a comply with the requirements of his rental customers and merit appropriately enhanced rates of rental he would only be prepared to enter into an agreement if all the L150's could be provided with twenty-six and a half inch by twenty-five inch tyres, ("the large tyres"). Mr. O'Donnell stated that he would check whether this alteration was feasible with Volvo personnel in Sweden. He did so and upon again meeting with Mr. Mansfield on the 12th February, 1992 stated that it would be feasible to supply the shovels with the larger wheels. What was said or unsaid between the two in the context of it being a less than desirable option to take the shovels with the larger wheels for work in quarries and gravel pits is one of the principal matters of controversy on the evidence.
It was common case and must in any event have been apparent to two experienced professionals that the revision of specification would inevitably to some degree impact upon performance, but a significant gap exists in the recollection of the witnesses.
However, in the course of the latter meeting an agreement was speedily concluded whereby 11 Zettelmeyers would be replaced by eleven L150's with a further nine such models to be purchased at a price of £900,000. Whilst an order form recording essential details was then signed by both Mr. Mansfield and Mr. O'Donnell, it was agreed that the formal terms of the Agreement, in particular, having regard to the basis of settlement of the Zettelmeyer litigation; would be subsequently drawn up in conjunction with legal advisors. A written consent was accordingly prepared by Messrs. Goodbodys, Solicitors to Volvo in Ireland, and executed by all relevant parties on the 23rd March, 1992.
Pursuant to the agreement, the 11 Zettelmeyer shovels were returned and a schedule of delivery of L150's was embarked upon. Payment was duly made by the Counterclaimant to the Defendants in respect of those models requiring payment, save that by consensual variation of the agreement Mr. Mansfield sought that two of the latter models should be changed to the larger and more expensive L180 model. It is in respect of non-payment for those two shovels that the present proceedings were instituted by Pat O'Donnell & Co. Limited.
However, the first sign of overt controversy between the parties related to events far beyond Ireland.
Mr. Mansfield caused eight of the new L150's to be shipped to the Middle East as part of a large consignment of varying types of equipment intended for resale. The consignment came to be stored in Dubai and currency and other problems arose which greatly hampered the Middle East venture and have given rise to further and unrelated proceedings instituted by Truck & Machinery Sales Limited.
What is primarily relevant for present purposes is that efforts to sell L150's to the Pakistan Army appear to have antagonised local Volvo sales personnel with like intentions. It was in this context that what came to be known in the proceedings as "The Volvo letter" was written. This was a document of the 24th September, 1992 written by Mr. Liljan-Crantz of local Volvo personnel to the representative retained by the Pakistan Army decrying, inter alia, the absence of oil bath filters in the exported L150's, the fitting of the larger and unrecommended tyres as tending to make the shovel become "sluggish" and the fitting of "old" axles in contrast to a new and preferable version locally available.
Although there is again conflict in the evidence as to whether or not Mr. Mansfield had exclusively committed the L150's acquired in the agreement to the Irish rental market and a term of that effect has been pleaded in the Defence and Counterclaim, it seems to me that on the evidence, as a whole, the probabilities fall appreciatively short of Mr. Mansfield having furnished any such binding undertaking on behalf of the Counterclaimant.
However, from a Volvo standpoint, it is not difficult to conceive of the reaction when what was thought of as a discounted Irish...
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