Trebor Bassett Holdings and Others (Respondents/Claimants) v Adt Fire
| Jurisdiction | England & Wales |
| Judge | President of the Queen's Bench Division,Lord Justice Aikens,Lord Justice Tomlinson,Lord Justice Richards,The Chancellor of the High Court |
| Judgment Date | 23 August 2012 |
| Neutral Citation | [2012] EWCA Civ 249,[2012] EWCA Civ 1158 |
| Docket Number | Case No: A1/2011/2172,Case No: A1/2011/2179 and 2172 |
| Court | Court of Appeal (Civil Division) |
| Date | 23 August 2012 |
[2012] EWCA Civ 1158
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
TECHNOLOGY AND CONSTRUCTION COURT
Mr Justice Coulson
Royal Courts of Justice
Strand, London, WC2A 2LL
The Chancellor of the High Court
Lord Justice Richards
and
Lord Justice Tomlinson
Case No: A1/2011/2179 and 2172
Roger ter Haar QC and Ben Quiney (instructed by DAC Beachcroft LLP) for the Appellants
Nicholas Dennys QC and Dominique Rawley QC (instructed by Eversheds LLP) for the Respondent
Hearing dates : 4,5 July 2012
Introduction
The First Appellant, Trebor Bassett, was in 2005 the owner of a factory in Pontefract known as the New Manufacturing Unit, generally referred to as the "NMU". An extension to the NMU generally known as "Production Area B" was in 2005 used by the Second Appellant, Cadbury, for the production of popcorn by the "oil pop" method. The oil pop method of manufacture is a hazardous method which involves heating the popcorn in pans of soya oil over a naked gas flame until it reaches a temperature at which it "pops". There were three other distinct areas of the NMU. In Production Area A Cadbury produced popcorn using the "air popping" method. There was also a packaging area and an area concerned with the production of other chocolate confectionery.
On 8 June 2005 the entire NMU was destroyed by a fire which began in the oil pop production area.
The Respondent and cross-Appellant ADT had, pursuant to a contract concluded with Cadbury in 2003, designed, supplied, installed and commissioned a fire suppression system which was intended to extinguish fires in two discrete but connected parts of the oil pop production area, the elevator and hopper arrangements. The system was designed to discharge carbon dioxide, CO 2, into the hopper and elevator automatically upon fire being detected by one or more sensors located within them. The fire was at one stage of its development contained within the hopper, insofar as that is itself an enclosed area, albeit it originated elsewhere. One or more kernels of popcorn had overheated in a pan or pans. In a smouldering, i.e. burning but not flaming condition, the popcorn passed through the next two stages of the production process, the "dosing drum" and the "rotary sieve", at which stage nothing untoward was observed. It was then conveyed by the elevator to the hopper. The air drop from the elevator into the hopper may have caused a transition from smouldering to flaming. A smouldering fire then developed in the mass of popcorn in the hopper. The fire was contained in the hopper for a period of about 8–15 minutes before it escaped in a manner which I will later describe.
Having escaped the hopper, the fire spread quite quickly in spite of, indeed arguably because of, attempts to put it out and, despite the prompt attendance of the fire brigade, destroyed the entire NMU. The oil pop production area was not segregated from the rest of the building in such a manner as to prevent or retard the spread of fire therefrom. The building was unprotected by any sort of sprinkler system.
The fire suppression system did not automatically discharge CO 2 into the hopper as, had it been properly designed to deal with a deep-seated fire of this nature, it would have done.
It was common ground at the trial that, had the fire suppression system discharged CO 2 into the hopper at an appropriate moment, it would have extinguished the fire before it had had an opportunity to escape that enclosed place.
Trebor Bassett and Cadbury sued ADT in respect of their loss suffered in consequence of the fire. Trebor Bassett claims in respect of the damage to the building. Cadbury claims in respect of the damage to the machinery, increased cost of working and business interruption. The trial of liability came before Coulson J in the Technology and Construction Court in March of 2011. On 22 July 2011 he delivered a long and detailed judgment, running to 627 paragraphs – [2011] EWHC 1936 (TCC). It is now reported, although the full judgment is not reproduced, at [2011] BLR 661.
The judge held that ADT owed to Cadbury a contractual duty to exercise reasonable skill and care in carrying out the design of the system. It was not in dispute that a co-extensive duty was owed in tort, and the judge so held.
It was accepted that ADT owed a like tortious duty of care to Trebor Bassett.
The judge found that ADT had failed to design the CO 2 suppression system installed in the hopper with reasonable skill and care, and was accordingly in breach of the contractual and tortious duties which I have identified. He accordingly found ADT liable to both Trebor Bassett and Cadbury.
However the judge also found that Cadbury shared in the responsibility for the damage. He found that Cadbury was negligent, indeed "woefully at fault" and "even reckless" in its failure to segregate the oil pop production area from the rest of the building and to install sprinklers. Since the contractual duty of ADT owed to Cadbury was co-extensive with its tortious duty, he held, applying the decision of the Court of Appeal in Vesta v Butcher [1989] AC 852, that the damage recoverable by Cadbury from ADT could, in accordance with s.1 of the Law Reform (Contributory Negligence) Act 1945, be reduced to the extent appropriate to reflect Cadbury's responsibility for the damage. He held the appropriate reduction to be 75%.
The judge left open the question whether the damages recoverable by Trebor Bassett should be similarly reduced, the argument against such reduction being that the relevant acts or omissions were those of Cadbury rather than Trebor Bassett. That argument was not developed before the judge and he heard no evidence relevant to it. He did however indicate that he thought that the argument was unlikely to succeed. I note that the order subsequently drawn up, no doubt by consent, indicates that the damages recoverable by both claimants shall be subject to a reduction of 75%.
It is the judge's finding that the contractual duty owed by ADT to Cadbury is co-extensive with that owed in tort which has given rise to this appeal. Cadbury says that the judge should have found that ADT owed to it and was in breach of further contractual duties which are not co-extensive with a duty to take reasonable care. Cadbury does not challenge the judge's finding that it was at fault in the respects which I have summarised, nor does it challenge the judge's assessment that its responsibility for the damage was such that an appropriate reduction in the damages recoverable is 75%. Cadbury relies upon Vesta v Butcher as establishing, as indeed it does, that if ADT's contractual duties of which it was in causative breach are of the nature and ambit for which Cadbury contends, then the court has no power pursuant to the 1945 Act to reduce the damages recoverable in respect thereof.
Trebor Bassett, having no contractual relationship with ADT, has played no part in the appeal. Henceforth I will for convenience draw no distinction between Trebor Bassett and Cadbury and I shall refer to them compendiously as "Cadbury".
ADT responds to the appeal in two ways. It seeks to uphold the judge's conclusion as to the nature and ambit of the contractual duty owed. If however Cadbury is successful in demonstrating that ADT had in effect guaranteed the success of its CO 2 suppression system in extinguishing any developed fire in the hopper, or had undertaken some form of absolute liability in relation to the efficacy of the system, then ADT says that Cadbury cannot rely upon ADT's breach as causative of the loss, because a similar fire one year earlier in June 2004 had already demonstrated to ADT that the system was ineffective. This would have been a difficult point for ADT to run at trial consistently with its denial that it had failed to exercise reasonable skill and care in the design of the system. In fact the point was developed for the first time in final speeches, a circumstance which has given rise to some contention before us as to the extent to which it can properly be relied upon now. Nonetheless the judge resolved this point in ADT's favour, albeit on a contingent basis, since he of course found against Cadbury on the premise of an absolute liability. Thus the judge held that had Cadbury established that ADT had in effect guaranteed the efficacy of the system, Cadbury could recover no damages consequent upon the system's inefficacy because Cadbury had discovered in June 2004 that the system would not or might not prevent the escape of fire from the hopper.
Further, ADT cross-appeals. It contends that certain actions by Cadbury's employees in the immediate aftermath of the discovery of the fire should be regarded as the proximate cause of its subsequent spread and thus of the destruction of the building. It contends therefore that its breach, as found by the judge, was not causative of the loss and damage in respect of which the claim is brought.
The facts in outline
I have already remarked that the judge's judgment is very long and detailed. Resort can be had to it for a full account of the facts, and it is wholly unnecessary for the purposes of this appeal and cross-appeal to rehearse them all here. I must however sketch out the features which are relevant to the issues canvassed in argument before us on the appeal and cross-appeal. In so doing I rely exclusively on the account set out in the judgment, some passages from which I reproduce below without attribution.
The judge described the manufacturing process in this way:—
"249...
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