James Elliott v Irish Asphalt, Part 2: European Court of Justice

The request made by the Irish Supreme Court for a preliminary ruling in this case is now before the European Court of Justice for consideration (Case 613/14). For each case that comes before the ECJ, an opinion is given by an Advocate General on the questions raised. The Advocate General’s opinion is not always followed by the ECJ, but is often persuasive not only in the instant case but also in subsequent cases.

The nub of the questions put to the ECJ by the Supreme Court was as follows:

1. Does the European Court of Justice have jurisdiction to interpret the text of a harmonised national standard (IS 13242:2002) which was itself based on a standard of the European Committee for Standardisation (CEN) (EN 13242:2002)?

2. Is the Irish Supreme Court obliged not to apply implied terms of merchantability and fitness for purpose or quality on the grounds that those terms, or their application, created standards or imposed technical specifications or requirements that had not been notified to the EU Commission under the Technical Standards Directive 98/34?

3. Is the Irish Supreme Court obliged to presume that a product produced in accordance with the relevant standard is of merchantable quality and fit for its purpose, and if so, may such a presumption be rebutted only by tests carried out in accordance with the standard at the time of supply of the product?

These are crucial points for Irish Asphalt: the aggregates supplied to JEC were tested for pyrite after they had been used in the construction of the building. If IA could demonstrate that the aggregates should have been presumed to comply with Standard IS 13242:2002, and that a product is only in breach of the standard if it is tested at the time of production or supply, then this would dislodge the judgment against IA by the High and Supreme Courts.   The principle of supremacy of European law requires a national court to apply European law in preference to national law where there is a conflict.

The opinion was delivered by Advocate General Campos Sanchez – Bordona 28 January 2016.

The Advocate General recited the key provisions of the Construction Products Directive 89/106, the Technical Standards Directives 83/189 as amended by Directive 98/34, and the Irish Sale of Goods Act 1893 as amended by the Sale of Goods and Supply of Services Act 1980.

On the first question relating to the jurisdiction of the ECJ to interpret the harmonised standard, the Advocate General considered that, as the ECJ clearly has jurisdiction to interpret the Construction Products Directive, it must then have jurisdiction to interpret a harmonised standard adopted pursuant to that Directive.

On the second question, the Advocate General accepted the view of the Irish Supreme Court, to the effect that a product could be tested “during the products economically reasonable working life”, and that the directive did not require that proof of conformity with the technical standard could only be established by a test carried out at the time of the products manufacture. This is an important point for JEC; if compliance with the standard could only be established by tests carried out at the time of manufacture, then all of the testing of the aggregates for the purposes of the litigation would be ruled out of consideration.

On the third question, the Advocate General was of the opinion that a presumption of fitness for use of construction products was of no effect when the merchantable quality of construction products is assessed, for the purposes of application of a national law governing the sale of goods.

Another important point for JEC is that if Irish Asphalt could demonstrate that s. 14 ( 2) of the 1893 Act should not be applied, then it would only have to comply with the technical standard, and not with the requirement of merchantable quality under the Act.

Arguably the most important aspect of the opinion relates to the question of whether the provisions of Irish law implying terms of merchantable quality of fitness for purpose must be disapplied, as they have not been notified to the Commission in accordance with Directive 98/34. The Advocate General was quite clear that a provision of national law such as s. 14(2), which can be excluded by agreement between the parties, could not constitute a technical regulation within the meaning of the definition of Directive 98/34.

If the ECJ follows the Advocate General’s opinion, then the Supreme Court will be in a position to confirm its judgement on liability expressed in its decision of December 2014. In it, the Supreme Court upheld the finding of Charlton J in the High Court decision of May 2011, and award damages for IA’s breach of contract.

It will be the end of an exceptionally long and costly road for both parties.  I will post an update when the ECJ issues its ruling.

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