News

06.02.18

06.02.18 Filing a claim based on hidden defects (in time): How “short” is the short term really?

In recent case law, an easing is noticeable with regard to the start and duration of the short term to file a claim based on hidden defects (Article 1648 Belgian Civil Code). This evolution in favour of the buyer seems to have been motivated by fairness and reasonableness.

However, it should not be forgotten that there are notable contradictions in case law, which makes it far from possible to draw far-reaching conclusions. Therefore, it remains appropriate to be cautious and to summon in good time. In addition, the Vienna Sales Convention provides a specific regulation regarding the buyer's examination obligation, which appears from recent (unpublished) Belgian case law.

Ratio legis of the short term

Article 1648 of the Civil Code stipulates that the claim based on a defect, which gives ground for an annulment of sale, must be filed by the buyer within a short period of time, according to the nature of the defect and the customs of the place where the sale is concluded.

The legislator has not specified the starting period or the duration of the short term. The start of the short term as well as the duration is autonomously determined by the trial court, taking into account the specific circumstances of the case.

The Court of Cassation, however, formulated a number of additional criteria in its judgment of 23 March 1984. When assessing the short term, the trial court must take into account (i) the nature of the sold goods, (ii) the nature of the defect, (iii) the use of the good, (iv) the capacity of the parties and (v) any possible extrajudicial and judicial actions taken by them (Cass, AR 4132, 23 March 1984 (Blomme / Fort), Arr.Cass 1983-84, 969).

The ratio legis of Article 1648 of the Civil Code is to avoid problems of proof so that the investigation into the occurrence of a defect and the state of a sold good is not made impossible by the long lapse of time. This is logical. The ratio legis of Article 1648 is also to safeguard the seller’s right of recourse against his seller or the manufacturer.

Start of the short term

Today, there is almost unanimity in case law and legal doctrine that the short term starts as soon as the buyer is aware of the existence of a hidden defect or could reasonably be aware of it. It is also generally accepted that the short term only starts after serious negotiations have taken place and where it has been established that an amicable settlement is impossible. It can be assumed that the same principle also applies to negotiations in the context of (extra-) judicial mediation.

Case law also takes into account the intervention of a (court) expert, as a buyer can only get knowledge of hidden defects as a result of an expert investigation. It must concern a contradictory expert investigation, which can be judicial or amicable. Case law, however, seems to require that the buyer take legal action when it is determined during the expert proceedings or in the expert report that the seller is liable. A judgment rendered by the Court of First Instance of West Flanders, department Kortrijk, of 14 July 2014, which is discussed below, nevertheless seems to contain an easing of this view. This raises the question of whether this concerns a unique view or can be regarded as a general trend.

The situation is, of course, different if the buyer is already aware of the hidden defects and nevertheless claims the appointment of a court expert without bringing legal action against the seller based on the indemnity for hidden defects. In that case, the claim is belated. Therefore, careful buyers should include their claim to appoint a court expert based on Article 19 § 3 of the Judicial Code in a summons on the merits, in which also a claim on the merits – even if they only claim compensation for a provisional amount – is filed.

Impact of the nature of the defect on the short term

The Court of Appeal of Liege has declared a claim for hidden defects admissible, which was filed almost four years after the purchase of certain buildings.

In July and September 2008, various buildings were purchased. The buyer discovered damage to the wooden facades two years later. The Court states that it was sufficiently demonstrated that (i) the damage only manifested itself progressively since 2010 and (ii) the defects became known to the buyer only after consulting with timber experts in November 2011, and in particular after an expert report in December 2011. The Court noted that as soon as the damage became visible, the buyer did not delay discovering the cause of the damage and formulating a claim against the seller (Liege (20th k.) 19 June 2014, nr. 2013 / RG / 380, consultable on www.stradalex.be ).

The Court of First Instance of Antwerp has ruled that in the event of a defect that only gradually manifests itself, such as the formation of a fungus, the short (admissibility) period of the liability claim against the seller for hidden defects only starts upon its discovery  (in this case on the occasion of the execution of works). Therefore, a claim filed even seven years after the purchase, is not necessarily belated (Court of First Instance of Antwerp (Antwerp section) 16 February 2016, T. Aann, 2017, issue 3, 267).

Impact of (extra) judicial actions

The Court of First Instance of West Flanders, department Kortrijk, has ruled that a claim filed on 24 January 24 2012, and thus eleven months after the hidden defects were established in a final court expert report dated 28 February 2011, is considered to be filed within the short term (The Court of First Instance West Flanders (department Kortrijk) (7th k.) 14 July 2014, TGR-TWVR 2015, edition 1.37).

The Court of Appeal of Ghent has ruled that reasons for delay in filing the claim for hidden defects, irrespective of the will of the buyer and which explain a certain lapse of time between discovering the defect and filing the claim, may imply, nevertheless, that the short term was respected. The Court specifically refers to consulting the legal assistance insurer and the elements to be proven (Court of Appeal Ghent (13e k.) 2 May 2017, D.A.O.R. 2017/3, n 123, 98, a mere summary of the judgment).

The short term of the examination obligation in the Vienna Convention on contracts for the International Sale of Goods

The Commercial Court of Antwerp, Hasselt division, has already ruled on the short term and examination obligation of the buyer in the Vienna Sales Convention. The facts at the basis of this unpublished judgment are the following:

- In June 2015, an Italian manufacturer (seller) delivered a number of food carts to a Belgian distributor (buyer). The buyer in turn sold these carts to its customers in the autumn of 2015. The seller requested payment for the delivered carts in December 2015. The buyer refused payment and argued for the first time that the carts had defects. The seller came on-site and determined that there was incorrect use.

The buyer carried out further repairs and invoiced the repair costs to the seller who refused to pay these costs. The buyer started legal proceedings in July 2017 and requested the appointment of a court expert to investigate the defects. Because of the international character of the purchase of movable property, the Vienna Convention on contracts for the International Sale of Goods (CISG) was applicable between the parties.

The Court ruled that the buyer had failed to fulfill its obligation to examine the goods (Article 38, 3 CISG). The buyer must examine the goods at the time of the delivery of the goods or shortly thereafter. The buyer had failed to examine the carts in the months that it had kept the carts. It was considered that there was no justification for postponing the examination by more than 5 months.

The court decided that the buyer, who failed to examine the goods in a timely manner, lost its rights and so also the right to request the appointment of a court expert before doing justice, especially since repairs had already been carried out and no consensual state of the delivered goods was available. Hence, at present, no useful observations can be made (Commercial Court of Antwerp, Division Hasselt 13 December 2017, A/17/03171, unpublished) 

Conclusion

Buyers will have to be sure to initiate legal action based on hidden defects in time and ensure that they have sufficient evidence to prevent their claim from being declared unfounded. As a buyer, it is advisable to act quickly when it turns out that negotiations do not offer a way out or when defects come to light during an expert investigation. In the case of hidden defects in an international context, it is important not to lose sight of the specific provisions of the Vienna Convention on contracts for the International Sale of Goods.

Hugo Keulers, Partner

Yves Lenders, Partner

Jo Willems, Counsel