This was an appeal by the claimant, VAI, from a decision of 30 October 2002 striking out the particulars of claim on the basis that the claim was statute barred. On 5 September 1994 Davy (later taken over by VAI) entered into a contract with Bostock for the supply of gearboxes, couplings and lubrication systems. The equipment was shipped to India and installed in July 1996. Two years later on, 31 August 1998, part of the equipment suffered a catastrophic failure. Replacement parts were installed that were not successful. On 1 February 2002 a claim was brought under the terms of the warranty and an express term in the guarantee. The defendants argued that the claim be struck out as being out of time. At first instance the judge agreed that the claim was statute barred. The claimant appealed.

*Full case details VAI Industries (UK) Limited vs Bostock & Bramley & Ors [2003] EWCA Civ 1069, 23 July 2003, Court of Appeal
The claimants argued that they were not statute barred because (1) they were bringing a specific claim for breach of the warranty, (2) a claim under the guarantee based on the argument that any latent defect found within three years from the date of acceptance be made good, and (3) there was a new contract for a replacement of the parts.

Reference

There was an implied term and a presumed intention on the part of both parties that if replacement equipment was provided, then those replacements would be free from defects from design and would conform to specification. The judge was therefore wrong to strike out the claim. The cause of action arose when the replacement parts were delivered or fitted and that date was within the limitation period. If a new contract arose in respect of the replacement parts then that would certainly not be statute barred. The defendant's allegation that their assistance in repairing was only a gesture of good will and they did not intend to be bound by contract was quite simply fanciful. VAI was therefore allowed to reinstate its claim.

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Postscript

This is an interesting case because it demonstrates that in some circumstances it will be possible to argue that the claim is not time barred because the time runs from the date on which the replacement works were carried out. It would of course be quite unfortunate if time ran from the original breach such that the claimant needed to bring legal proceedings in order to preserve time, when the supplier or installer was attempting to carry out remedial works in an attempt to avoid legal proceedings.