A sale is a contract built on trust and confidence. The genuine seller desires to deliver a good product to his customer and – why not – in turn make a profit, and the purchaser hopes to receive what he paid for, with no ugly surprises.
To guarantee this peaceful rapport, the law provides for the guarantee against latent defect. It is an absolute guarantee, one which is inherent and automatic, unless otherwise stipulated. It is a valuable instrument for those who would like to go beyond the usual fervid rants on specifically-dedicated groups on social media.
The law states that the warranty that a seller owes to a buyer is in respect of the quiet possession of the thing sold and of any latent defect therein (article 1408, Civil Code).
This is a renounceable obligation; however, generally speaking, a seller is bound to warrant the thing sold against any latent defects that render it unfit for the use for which it is intended or which diminish its value to such an extent that the buyer would not have bought it or would have tendered a lower price, if he had been aware of them.
In the case of ‘Victor Mifsud et vs Victor Spiteri et’ (finally decided by the Court of Appeal on July 20), the plaintiff lamented that a bus that they had bought had serious hidden defects that diminished its value drastically, so much so that had they known about these defects, they would not have bought it. For this reason, the plaintiffs asked that the respondents be ordered to pay all damages suffered thereby. By means of a judgment of the Civil Court, First Hall, the respondents were ordered to pay the plaintiffs the sum of €10,062.89.
The respondents appealed and this is where we pick this case up.
In their appeal, the respondents stated that the first court should not have found that the defect existed at the moment that the sale was concluded.
The Court of Appeal clarified that not every defect can lead to a successful action at law. The defect has to be hidden at the moment of sale and it has to be such as to render the thing purchased unfit for the use for which it was acquired. It has to be an abnormality, a failure or a defect in the good sold that eliminates its integrity or usefulness.
The defect has to be hidden at the moment of sale and it has to be such as to render the thing purchased unfit for the use for which it was acquired
Moreover, the seller is not answerable for any apparent defects that the buyer might have been able – through careful analysis – to discover for himself.
The seller has to responsibility to inspect the thing bought, at least superficially. This is not to say that the law’s dogma is towards a pure caveat emptor (buyers beware!) – far from that. The law simply requires an ordinary assessment of the suitability of the thing bought.
Of course, one is not expected to conduct complex and minute analysis of the thing bought and be penalised if one does not, for this would place an excessive burden on the buyer. The court would consider the circumstances of the case, by taking into account various factors pertaining to the situation at hand, and it will then decide whether the defect was hidden or apparent.
In this case, it was stated that after being used for a number of months, the bus’s windscreen suddenly cracked. On close inspection by the first court-appointed expert, it was concluded that the frame that held the windscreen was defective and this was why the windscreen had cracked. The court stated that there was no doubt that the defect was latent, and not apparent, and held that the plaintiffs should not be faulted for not noticing the defect.
However, this was not all.
Before the first court, after the first original expert, another three court experts were appointed as ‘additional referees’.
There is nothing strange with this; in fact, our law provides that when a party disagrees with the conclusions of the original court expert, it may ask the court to proceed to the appointment of additional referees who shall make their report on reaching a majority decision on the subject of the reference.
Simply put, this is one way how one can contest the conclusions reached by the first court expert.
It is a costly procedure (its proponent would have to pay the costs of three experts) and it can only be requested by means of a note to be filed within 10 days from the date of the publication of the report or when the referee has been dispensed from attending before the court; such time shall start to run from the date of the receipt by the party or his legal procurator of a notice signed by the Registrar of the Court, stating that the report has been published.
The peculiarity here was that these additional three court experts disagreed with the first one, stating that the defect encountered had nothing to do with the design or manufacture of the vehicle, so the respondents were not to be faulted.
The respondents lamented to the fact that the first court had accepted the first report and totally disregarded the second.
The Court of Appeal stated that the law is clear in that the court is not bound to adopt the report of the referees against its own conviction. If it is not convinced, it can decide against what its expert says.
Likewise, the court can ‘choose’ between a number of reports filed before it, for there is no doctrine that says that ‘additional referees’ are necessarily better or more reliable than the first one.
Here, for example, the original court-appointed referee had the benefit of seeing something that the subsequent experts did not: the cracked windscreen itself. This was because by the time the additional referees were appointed, the windscreen had been fixed. Therefore, the first court had been correct to rely on the first report, and not the second.
For these reasons, the court rejected the appeal and confirmed the first judgment. It also ordered the respondents to pay the costs of the case.
Carlos Bugeja is partner at Azzopardi, Borg & Abela Advocates.