Photo Production Ltd v Securicor Transport Ltd

It was a factory at Gillingham in Kent. A firm called Photo Production Ltd. made Christmas cards there, and such like. There was a lot of paper and cardboard about which would burn easily. The factory was shut up for the night, locked and secure. No one was supposed to go in except a man on night patrol. He came from a security firm called Securicor. He had a bunch of keys. His duty was to go through the factory and see that all was safe and secure. No burglars and no fire.

On the night of 18th/19th October, 1973, the patrol-man was George Musgrove. He was a young man only 23 years old, unmarried. He came of a respectable family and had satisfactory references. He had been with Securicor for some three months. Securicor cannot be blamed for employing him on the job.

At the dead of night - ten minutes before midnight - Musgrove went to the factory. He unlocked the front door and went through the factory, switching on the lights as he went. Then he lit a match and threw it on to a cardboard box. It burst into flames. He says that he only meant it to be a very small fire and intended to put it out within a minute or two. But it got beyond his control He was terrified and dialled 999 for the fire brigade. He tried to stop it spreading. He lost his glasses and false teeth. His right hand and arm were burnt. He staggered out of the factory through the smoke and flames. By that time the firemen and police were there. They had answered the call with great promptitude. They were at the factory at three minutes past midnight. But they could not save it. There was already a wall of flame across the building. Flames were coming through the roof. The place was gutted. The damage to the building and stock was put at £400,000. The loss of business at £250,000. Musgrove was afterwards charged with arson. He pleaded guilty to malicious damage and was sentencedto three years' imprisonment.

The occupiers of the factory claim damages from Securicor for this loss. The judge has held that Securicor are exempted from liability by an exception clause in the contract. The factory occupiers appeal to this court.

THE RESPONSIBILITY OF SECURICOR

It was conceded before us that Musgrove, the patrol-man, was acting in the course of his employment by Securicor, even though the fire was caused by a deliberate criminal act on his part. This concession was inevitable when regard is had to the decision of this court in Morris v. Martin (C.W.) & Sons (1966) 1 Queen's Bench 716. But Mr. Machin reserved liberty to challenge it in the House of Lords. So I will restate the reasons as applied to this case. Suppose that Musgrove had been merely negligent, as, for instance, by leaving a door unlocked through which thieves entered and stole: or by lighting a cigarette and dropping the stub-end carelessly, and thus causing a fire. No one could doubt that his act of negligence would be done in the course of his employment. He would be doing carelessly what he was employed to do carefully. Securicor would be liable for his act, unless protected by an exemption clause. Now suppose that he did it deliberately. That should make no difference. Especially as in 99 cases out of 100 it would be impossible to know for certain whether the act was done negligently or deliberately. In this very case Musgrove at first denied that he caused the fire. Afterwards he said he lit a cigarette and flicked away the match. It was only later that he told the truth and said he had lighted a match and thrown it on a cardboard box. It seems to me that Securicor should not be able to avoid their liability simply because Musgrove did a deliberate act instead of a negligent one.

Securicor were under a duty to give a careful and trustworthy service of night patrol. This was a duty owed to all the neighbourhood who were in sufficient proximity to the factory. Securicor are liable for the wrongful act of their servant in the course of it, no matter whether the wrong done be carelessness or deliberate wrongdoing. Compare Lloyd v. Grace, Smith & Co. (1912) Appeal Cases 176, where there was a deliberate fraud.

By the same token, it is clear that any person who was injured or damaged in the fire would have a cause of action in tort against Securicor for the wrongful act of their servant. If a passer-by was burnt and injured in the fire, he would be able to sue them. So would any person whose goods were destroyed or damaged by it. So would any neighbour whose building was burnt down. Also the freeholder of this very factory if he had let it off to the occupier. As against any of these, Securicor could not rely on the exemption clause in the contract; because those injured persona were not parties to the contract and would not be affected by it, see Midland Silicones v. Scruttons (1962) Appeal Cases 441. Securicor seem to have been aware of this: for they insured themselves in respect of any liability incurred by them, except that they had to bear the first £10,000 themselves.

THE CONTRACT WITH THE OCCUPIER OF THE FACTORY

Now, seeing that all those injured persons could sue Securicor in tort, there is no reason whatever why the occupier of the factory should not also sue Securicor in tort. But I hasten to say that in the 19th Century it would have been different. At that time it was thought - and held - that if a duty to use care arose out of a contract, no one could sue for a breach of that" contract except a party to it, and he could only sue in contract and not in tort: see the position summarised in Candler v. Crane, Christmas & Co. (1951) 2 King's Bench 164 at page 177: Midland Silicones v. Scruttons (1962) Appeal Cases at pages 483/4: and Dutton v. Bognor Regis U.D.C. (1972) 1 Queen's Bench at page 393. But, during the last few years, it has become plain that, if the facts disclose the self-same duty of care arising both in contract and in tort - and a breach of that duty - then the plaintiff can sue either in contract or in tort, as he pleases: see Esso v. Mardon (1976) Queen's Bench 805 at pages 818/820: Batty v. Metropolitan Properties Realisation Ltd. (1978) 2 Weekly Law Reports 800: and the selfsame consequences apply both as to remoteness of damage - see Parsons v. Attley (1977) 3 Weekly Law Reports at pages 998, 1001; and statute of limitation - see Sparham-Souter v. Town & Country Developments (Essex) Ltd. (1976) 1 Queen's Bench at pages 866/8; Green v. Midland Bank, unreported, Mr. Justice Oliver, 21st November, 1971. The result should not, and does not, depend on the legal classification in which the plaintiff puts his case.

Nevertheless, if the injured party - who had a contract with Securicor - sue them in tort, then Securicor can rely on an exemption clause in the contract with the injured party: provided that it is fair and reasonable for them to do so. So I turn to the clause.

THE CONTRACT

The contract was contained in one of the printed forms used by the Securicor Group. These terms were typed into the form:

"The Company shall provide their Fight Patrol Service whereby four visits per night shall be made seven nights per week and two visits shall be made during the afternoon of Saturday, and four visits shall be made during the day of Sunday"

The standard conditions were printed overleaf, and were asfollows:

I Under no circumstances shall the Company be responsible for any injurious act or default by any employee of the Company unless such act or default could have been foreseen and avoided by the exercise of due diligence on the part of the Company as his employer, nor in any event shall the Company be held responsible for:

(a) Any loss suffered by the customer through burglary, theft, fire or any other cause, except insofar as such loss is solely attributable to the negligence of the Company's employees acting within the course of their employment.

(b) Any failure of the Company to carry out the service by reason of strikes, lockouts, labour disputes, weather conditions, traffic congestion, mechanical breakdown, obstruction of any public or private road or highway or other cause beyond the Company's control.

If notwithstanding the foregoing provision any liability on the part of the Company shall arise (whether under the express or implied terms thereof or at common law) for any injury "to or loss or damage of whatsoever nature sustained by the customer, such liability shall, under all circumstances be confined to claims of which written notification is received by the Secretary of the Company at its Head Office within one month of the happening of the default by the Company alleged to give rise to such liability; and subject thereto, shall be limited to the payment by the Company by way of damages of a sum not exceeding £1,000 (inclusive of costs) in respect of any one claim arising from any duty assumed by the Company which involves the operation, testing, examination or inspection of the operational condition of any machine, plant or equipment in or about the customer's premises, or which involves the provision of any service unrelated solely to the prevention or detection of fire or theft; and shall be otherwise limited to a maximum of £25,000 for the consequences of each...