LMS International Ltd and Others v Styrene Packaging and Insulation Ltd and Others
| Jurisdiction | England & Wales |
| Judge | HIS HONOUR JUDGE PETER COULSON QC |
| Judgment Date | 30 September 2005 |
| Neutral Citation | [2005] EWHC 2065 (TCC),[2005] EWHC 2113 (TCC) |
| Docket Number | CASE NO: HT-04–254 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 30 September 2005 |
[2005] EWHC 2065 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
His Honour Judge Peter Coulson QC
CASE NO: HT-04–254
Mr Stephen Bickford-Smith, instructed by Beachcroft Wansbroughs, for the Claimants
Mr Andrew McGee, instructed by Gordons, for the First Defendants
APPROVED JUDGMENT
A INTRODUCTION
On Wednesday, the 6th August 2003, a fire started in the upper floor of the Defendants' factory premises at Unit D, Parkhouse Industrial Estate, Low Moor Road, Bradford. The premises at Unit D were owned by the Second, Third, Fourth and Fifth Defendants. Unit D was occupied by the First Defendant company, of which the other Defendants were directors and shareholders, and used for the making of polystyrene blocks for insulation purposes and polystyrene mouldings to be used in packaging. It is admitted that the fire broke out "whilst an employee of the First Defendant was cutting expanded polystyrene blocks with a hot wire machine…": see paragraph 13 of the Amended Particulars of Claim and Paragraph 10 of the Amended Defence. Although the West Yorkshire Fire Brigade attended Unit D within 5 minutes of being alerted to the disaster, the fire spread so quickly that Unit D was largely destroyed. The fire and smoke from Unit D spread to the two adjoining factory Units, B and C (which had originally been part of the same factory building prior to its sub-division) and caused extensive damage to those Units and their contents.
The First Claimants, LMS International Limited, are the lessees and occupiers of both Units B and C. The Second Claimants, Wallaby Investments Limited, are the owners of Unit B. The Third Claimants, Contract Experts Limited, are the owners of Unit C. All three Claimants now bring proceedings against the Defendants arising out of the fire of 6 th August 2003. They were represented by Mr Stephen Bickford-Smith of Counsel.
The First Claimants claim compensation for the damage done by the fire and smoke to their machinery, plant and stock, and they also make a substantial claim for business interruption. Their damages claim is estimated to be in excess of £2 million. The Second and Third Claimants claim around £400,000 in respect of building re-instatement costs and about £360,000 in respect of lost rent, together with one or two other smaller sums.
All these claims are brought against the First Defendants, who occupied Unit D and who operated the polystyrene manufacturing business from those premises. In the alternative, the same claims are also made against the four individuals who are grouped together as the Second—Fifth Defendants, as the landlords of Unit D and as directors/shareholders of the First Defendants. One of these four, Mr Michael Edge, was a key witness at the trial.
In this Judgment I shall refer principally to the First Defendants, because they were directly involved in the events before and after the fire. They were represented by Mr. Andrew McGee of Counsel. The Second-Fifth Defendants did not appear and were not represented.
On 12th October 2004, I ordered that there should be split trial, with all issues of liability dealt with at the first hearing, and all quantum issues left over until a second hearing. The trial on all liability issues took place on 20, 21, 22, 28, 29 and 30 June and 5th July 2005. Both Counsel helpfully provided me with written opening statements and written closing submissions, and I am extremely grateful to them for their assistance. This Judgment, which has been slightly delayed by the long vacation, is solely concerned with issues of liability.
The claims brought by the Claimants are put in a number of different ways, and it is important to identify at the outset the different legal concepts that are said to arise in this case. First, the entirety of the Claimants' loss is sought to be recovered against the First Defendants on the simple basis that the fire and/or spread of fire arose from the dangerous materials and activities inherent in the First Defendants' manufacturing business (including, but by no means limited to, the storage at Unit D of large quantities of inflammable material), and that, since, on the Claimants' case, this constituted a non-natural user of land, the First Defendants were strictly liable to the Claimants for the escape of fire in accordance with the rule in Rylands v Fletcher (1866) LR 1 Ex 265 at 279, affirmed at (1868) LR 3 HL 330. In the alternative, all of the Claimants' loss is claimed against the First Defendants pursuant to a claim in negligence and nuisance, on the basis that the fire resulted from the First Defendant's actionable default. This primary claim in negligence and nuisance, unlike the strict liability claim based on Rylands v Fletcher, requires a finding of culpability on the part of the First Defendants.
Even if I concluded that the Claimants had no cause of action against the First Defendants in respect of the commencement of the fire, the Claimants contend that the fact that the fire was not put out at or around the hot wire machine where it started demonstrated significant flaws and omissions in the First Defendants' fire safety/training arrangements. Accordingly the Claimants say that, as a result of this negligence on the part of the First Defendants, the fire spread to Units B and C when, but for this negligence, it would not have done. I have referred to this below as the secondary negligence/nuisance claim. It should also be noted that this claim, as well as the claim based on Rylands v Fletcher and the primary negligence/nuisance claim referred to above, is put, in the alternative, against the Second-Fifth Defendants, on the grounds that they were the landlords, alternatively the directors, of the First Defendants.
Finally, even if all those claims fail, the Claimants contend that they can recover at least part of their losses as a result of the Defendants' failure, after the fire, to re-build the party wall between Unit D, on the one hand, and Units B and C, on the other. The Claimants contend that this failure, which is said to be actionable under the terms of a number of particular Deeds, and alternatively in nuisance, has resulted in a number of the specific heads of loss that make up the total claim. I have called this the support claim. It should be noted that the support claim put by reference to the Deeds lies against the Second-Fifth Defendants only, since they (or their predecessors in title) were parties to those Deeds. The alternative support claim in nuisance is alleged primarily against the First Defendants, although the indirect liability arising from the Second-Fifth Defendants' role as landlords and directors is again relevant.
There are a large number of factual disputes between the parties, as well as significant disputes of principle. However, at the heart of this case lie the parties' different contentions as to the cause of the fire. As I have already noted, both parties agree that the fire started on a hot wire cutting machine on the upper floor of Unit D, which was being used to cut up scrap blocks. It is the Claimants' case that the fire started on this machine when one of the heated wires broke, causing a spark which ignited the polystyrene block being cut up. The First Defendants deny this and say that the cause of the fire was and remains inexplicable. Accordingly, at the trial, the First Defendants spent a good deal of time endeavouring to demonstrate that the Claimants' case as to the cause of the fire was incorrect; they were able to put forward no positive case of their own.
I propose to set out the relevant principles of law at the outset of this Judgment ( Sections B and C below) before going on to deal with some of the background facts ( Sections D, E, F and G below). At Section H, I deal with the situation at Unit D at the time of the fire and at Section I I address in detail the evidence as to the cause and spread of the fire. Section J sets out a summary of my findings as to the cause and spread of the fire. Then, having addressed some of the later events at Section K, I set out my conclusions as to the Rylands v Fletcher claim at Section L; my conclusions as to the primary negligence/nuisance claim at Section M; my conclusions as to the secondary negligence/nuisance claim at Section N; and my conclusions as to the support claim, and the other claims against the Second, Third, Fourth and Fifth Defendants, at Section O. There is then an overall summary of the key elements of this Judgment at Section P below.
B RYLANDS v FLETCHER: RELEVANT PRINCIPLES
a) General Observations
In Rylands v Fletcher at first instance, Blackburn J found the defendant liable for the flooding of the plaintiff's mine. The water had been accumulated by the Defendant on his own land to act as a mill reservoir, and had escaped to the adjoining land owned by the plaintiff. The legal basis for the defendant's liability was found to be that if a land owner collects and keeps on his land "anything likely to do mischief if it escapes [he] must keep it at his peril and if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape". The House of Lords agreed, but Lord Cairns added the qualification that the rule could only apply in cases where the defendant had made a non-natural use of the land.
Rylands v Fletcher is a rule of strict liability, requiring only that a prospective claimant demonstrates an escape from the defendant's land of something which, having been brought there by the defendant, was likely to do...
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