Goodlife Foods Ltd v Hall Fire Protection Ltd
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Stephen Davies |
| Judgment Date | 07 April 2017 |
| Neutral Citation | [2017] EWHC 767 (TCC) |
| Docket Number | Case No: C50MA004 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 07 April 2017 |
[2017] EWHC 767 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MANCHESTER DISTRICT REGISTRY
TECHONOLOGY AND CONSTRUCTION COURT
Manchester Civil Justice Centre,
1 Bridge Street West, Manchester M60 9DJ
His Honour Judge Stephen Davies
SITTING AS A JUDGE OF THE HIGH COURT
Case No: C50MA004
Aidan Christie QC & Martyn Naylor (instructed by Clyde & Co LLP, Manchester M2) for the Claimant
Leigh-Ann Mulcahy QC & Katherine Del Mar (instructed by Plexus Law, London EC3R) for the Defendant
Hearing dates: 6, 7, 8 March 2017
Draft judgment circulated: 23 March 2017
Contents
| Section | Content | Paragraphs |
| A. | Introduction and summary of my decision | 1 – 8 |
| B. | The preliminary issue – the exclusion clause | |
| B.1 | The evidence in relation to incorporation of clause 11 and its reasonableness | 9 – 36 |
| B.2 | Incorporation of Hall Fire Solutions' standard terms and conditions | 37 – 38 |
| B.3 | The proper construction of clause 11 | 39 – 51 |
| B.4 | Was clause 11 an unusual and onerous clause and, if so, was it effectively incorporated? | 52 – 62 |
| B.5 | Does the purported exclusion of liability for death and personal injuries render clause 11 as a whole unreasonable? | 63 – 71 |
| B.6 | Is clause 11, even disregarding the purported exclusion of liability for death and personal injuries, unreasonable? | 72 – 91 |
| C. | The application to amend to plead the claim for breach of statutory duty | 92 – 93 |
| C.1 | Was the fire suppression system "electrical equipment" falling within the scope of the 1994 Regulations? | 94 – 124 |
| C2. | Is the limitation period applicable to claims under s. 41(1) CPA 1987 6 years from the date of the fire? | 125 – 130 |
| D. | Conclusions | 131 – 134 |
A. Introduction and summary of my decision
The claimant ("Goodlife") claims that the defendant ("Hall Fire") is liable for a fire which occurred in an industrial frying machine at its factory premises in Warrington on 25 May 2012 and which it says led to property damage and business interruption losses in excess of £6 million. It claims that the cause of the fire was a failure or malfunction of a fire suppression system supplied and installed by Hall Fire some 10 years earlier in 2002. Its principal case is that there was a defect in the installation of a compression joint on a dog-leg section of pipework on the top of the hood of the frying machine which should have carried suppressant media to extinguish or suppress the fire but which did not do so because the joint failed and separated.
The claim was issued in 2016, so that it is common ground that the pleaded claim for breach of contract is statute barred under the Limitation Act 1980. The existing pleaded claim also pleads negligence, and it is common ground that if there is a valid claim in negligence the 6 year limitation period would not begin to run until the date of the fire, with the result that the negligence claim would not be statute barred. However Hall Fire contends that clause 11 of its standard terms and conditions, which it pleads was incorporated into the contract with Goodlife, and which it pleads was reasonable under the Unfair Contract Terms Act 1977 (" UCTA 1977"), validly excludes any claim in negligence. This issue was ordered to be tried as a preliminary issue and is the subject of the first part of this judgment.
Prior to the hearing of the preliminary issue Goodlife identified an alternative claim for breach of statutory duty under s.41(1) of the Consumer Protection Act 1987 ("CPA 1987") and paragraph 14 of the Electrical Equipment (Safety) Regulations 1994 ("the 1994 Regulations"). By s. 41(4) of the CPA 1987 the exclusion or limitation of liability under s. 41(1) by any contract term or notice is prohibited, so that it is common ground that if there is a valid claim under s. 41(1) Hall Fire cannot rely on clause 11 to defeat it. However Hall Fire did not accept that the proposed claim under s. 41(1) had a real prospect of succeed and, hence was not willing to agree to Goodlife amending its claim to plead it. Accordingly, Goodlife issued an application for permission to amend, which by agreement was dealt with at the same time as the trial of the preliminary issue.
The particular points which were argued by Hall Fire as demonstrating that the proposed new claim has no real prospect of success were:
(a) Goodlife has no real prospect of proving that the fire suppression system was "electrical equipment" falling within the scope of the 1994 Regulations.
(b) Goodlife has no real prospect of establishing that the limitation period applicable to its s. 41(1) CPA 1987 is not subject to a longstop limitation period of 10 years from the date of the supply of the fire suppression system.
It is agreed that issue (b) is a pure point of law. I am told that there is no authority on the point. Hall Fire submits that the applicable limitation period is that which applies to product liability claims under Part 1 of the CPA 1987, which includes a 10-year longstop period from the date of supply of the relevant product. Goodlife accepts that if that was so then the claim would undoubtedly be statute-barred. However Goodlife submits that the applicable limitation period is the general limitation period for claims for breach of statutory duty causing damage to property, which is 6 years from the date of accrual of the cause of action, which here is the date of the fire. If so, then it is accepted by Hall Fire that the claim is still within the limitation period. In the circumstances, and since Hall Fire would not be prejudiced by the amended claim, if allowed, being treated as having been issued as at the date this action was begun, Hall Fire did not submit that the proper course was for me to refuse the application and require Goodlife to issue a new claim. Furthermore, Hall Fire did not contend that if I concluded that the claim was properly arguable permission to amend should be refused on discretionary grounds.
Issue (a) involves the application of the 1994 Regulations, on their proper construction, to the facts of this case. Again, I am told that there is no authority directly on point as to the definition of electrical equipment under the 1994 Regulations. The issue cannot be determined without reference to the detail of the fire suppression system and the respects in which it is alleged that it failed or malfunctioned. Mr Christie QC leading Mr Naylor for Goodlife properly reminded me that it was inappropriate to conduct a mini-trial insofar as there was any dispute as to these matters. He also reminded me that this is so, even where there is no obvious conflict of fact at the time of the application, if reasonable grounds exist for believing that a fuller investigation into the facts would add to or alter the evidence available to the trial judge and so affect the outcome of the case: see the summary by Lewison J of the applicable principles in Easyair v Opal [2009] EWHC 339 (Ch) at [15]. I accept that I can and should only determine this issue against Goodlife if I am satisfied that this is not the case and if, on that basis, I am satisfied that the proposed amended claim has no real prospect of success.
I must express my gratitude at the outset for the efficient preparation for this hearing and for the excellence of the written and oral submissions I have received.
In short, I have decided that: (a) clause 11 of Hall Fire's standard terms and conditions was incorporated and was reasonable and, thus, is effective to exclude any liability for negligence; and (b) Goodlife has no real prospect of proving that the fire suppression system as a whole, or the pipework about which primary complaint is made, comprised electrical equipment within the Regulations. It follows that this claim in its existing form cannot succeed and must be dismissed. It also follows that the proposed amended claim cannot succeed and the application to amend must be dismissed. I cannot however completely discount the possibility that some more limited and more focussed claim based on breach of the 1994 Regulations may properly be made, and my provisional view is that Goodlife should at least be given the opportunity to see if that is something which it can and does wish to do by means of a draft substituted Particulars of Claim. I am satisfied that it is at least reasonably arguable that any proposed claim under the CPA 1987 and the 1994 Regulations is not limitation barred.
B. The preliminary issue – the exclusion clause
B.1 The evidence in relation to incorporation of clause 11 and its reasonableness
I heard evidence from Mr Foster for Goodlife, who was unable to say anything of direct relevance on this topic, since he was only employed by Goodlife from 2003. No explanation was offered for the failure to call Mr Hamlett, the managing director of Goodlife both now and in 2001–2002. Nor was any explanation offered for the apparent failure to make contact with, seek to obtain a statement from, or to call Mr Brady, who dealt with Hall Fire in relation to the original quotation. Whilst I do not consider that I should draw adverse inferences against Goodlife in relation to any specific matters about which these men might have given evidence, equally I am satisfied that there is no proper basis for drawing inferences favourable to Goodlife in relation to matters about which those witnesses might have been able to assist had they provided witness statements and been called. I should also say that due to the passage of time and the way in which it operated its document retention policy Goodlife has been unable to disclose anything in relation to the formation or performance of...
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