Further to our previous article on this subject, the Court of Justice of the European Union (CJEU) has issued its preliminary ruling in the James Elliott Construction v Irish Asphalt case. The CJEU has largely followed the opinion of the Advocate General in its ruling in response to the questions raised by the Irish Supreme Court.
This case involves a dispute over the supply of defective infill material in relation to the construction of a Dublin youth centre. James Elliott Construction sought compensation from Irish Asphalt, which had supplied the material in question, claiming that it had caused "pyrite heave" which necessitated remedial works to the building costing €1.55 million. The case centres on whether there was a breach of the implied contractual terms between the parties as to the merchantability or fitness for purpose of the materials supplied.
The case reached the Supreme Court, which held that, under national law, James Elliott Construction should succeed in its claim. However, this was subject to any issue of EU law to be determined by the CJEU. In particular, the Supreme Court raised queries in relation to the interpretation of an EU standard for construction products (the "Harmonised Standard").
Set out below is the CJEU's response in respect of each of the questions raised by the Supreme Court.
1(a) Does the CJEU have jurisdiction to give a preliminary ruling on the interpretation of harmonised technical standards?
The CJEU replied in the affirmative to this question.
1(b) Whether the Harmonised Standard requires compliance to be established (i) only by the testing method indicated therein and used at the time of production and/or supply of the product or (ii) by other testing methods used later?
The CJEU held that the Harmonised Standard must be interpreted as meaning that it allows a breach of its technical specifications to be established by test methods other than those expressly provided for in the standard, and such methods may be used at any time during the economically reasonable working life of the product.
2. Should national provisions implying terms as to merchantability and fitness for purpose be disapplied on the grounds that they are technical regulations not notified in accordance with the Technical Standards Directive (Directive 98/34/EC)?
The CJEU upheld the contention that national provisions such as those at issue in this case specifying, unless the parties agree otherwise, implied contractual terms concerning merchantable quality and fitness for purpose of the products sold, cannot be considered to be a ‘'technical regulation'’ within the meaning of the Technical Standards Directive and therefore prior notification to the European Commission at the draft stage was unnecessary.
3. Does the presumption of fitness for use of building materials, derived from the Construction Products Directive (Directive 89/106/EEC) apply also for the purpose of determining whether the product is of merchantable quality when the latter is a condition laid down in general national legislation applicable to the sale of goods?
The CJEU, following the Advocate General's opinion, held that the presumption of fitness for use of construction products, which is provided for in the Construction Products Directive in order to facilitate their free movement in the internal market, does not apply, in the context of a contractual dispute, for the purposes of assessing whether one of the parties to the contract has complied with a national contractual requirement.
4 & 5. Questions regarding whether the sulphur limit of a product must comply with the Harmonised Standard to enjoy the presumption of fitness for use, and the question of whether the bearing of a CE mark is a prerequisite for a presumption of compliance with EU standards?
The CJEU noted that the questions in relation to the limits of total sulphur content of aggregate under the Harmonised Standard, and whether a product must bear the CE marking to rely on the presumption of fitness for use were raised by the Supreme Court only in the event of an affirmative answer to question 3 above and as such, there was no need to answer them.
The CJEU further noted that the decision on costs was a matter for the Irish Supreme Court to consider.
The final decision on this matter will subsequently lie with the Irish Supreme Court which will now use the above preliminary ruling of the CJEU as a basis for its interpretation and final judgment on this matter.