Upstate Ltd v BHW Refrigeration & Air Conditioning Ltd

A contractual obligation to respond to emergency repair calls may carry an implied term requiring reasonable care and skill in investigating, identifying and correcting the fault. The scope of the investigation depends on the facts and circumstances of each case. A claimant alleging that an earlier negligent repair caused later loss must prove the relevant fault, the breach, and the causal link between them. Where the evidence leaves the court in doubt about the cause of the loss, the claimant fails because the burden of proof has not been discharged. The court is entitled to reach that conclusion rather than choose between competing explanations merely because one remains possible.

The claimant operated a biotechnology business and stored products in refrigerated cabinets supplied and maintained by the defendant. A freezer controller failed on 30 July 2003, the freezer defrosted on 5 August 2003, and a further failure occurred during the night of 8–9 August 2003. The contents were spoiled, causing an agreed loss of £140,000 inclusive of VAT.

The claimant alleged that a hole in the freezer’s door-frame trim allowed water to reach the temperature controller. It alleged that the defendant’s engineer should have identified and repaired the defect during the 30 July emergency visit. The defendant disputed both the cause of the failures and the scope of its contractual obligations. The central issues were whether the defendant owed an obligation to investigate the fault with reasonable care and skill, whether the alleged defect existed on 30 July, and whether any breach caused the loss.

1. Contractual obligation. The annual agreement required four detailed maintenance visits. The separate agreement to respond to emergency calls carried a target response time of six hours, but did not require the full maintenance checks. To give the agreement business efficacy, a term was implied that the engineer would use reasonable care and skill to investigate, identify and correct the fault. The nature of the investigation depended on the circumstances.
2. Issues requiring proof. The claimant had to establish that the defendant should have found and rectified on 30 July the fault which caused the later loss; that the fault was a hole in the trim through which water reached the control panel; that the engineer should have identified or foreseen that risk and sealed the hole; and that the failure caused the 5 August damage.
3. Findings. There was no evidence of water, defrosting, an alarm, a control failure, or a hole in the trim on 30 July. The engineer attending on 5 August was accepted as honest. The judge found that the freezer had defrosted because of overheating in the power-supply system, and that the engineer would have seen the hole during his inspection if it had existed. The hole therefore did not exist on 5 August or on 30 July. The evidence of Mr Bailey was preferred and the evidence of Dr Fletcher rejected.
4. Burden of proof and disposition. The approach in Rhesa Shipping SA v Edmunds [1985] 1 WLR 948 was applied. A court may conclude that the claimant has failed to prove its case where the evidence remains unsatisfactory or leaves it in doubt. The claim failed on the positive findings. Alternatively, it would have failed because the claimant had not proved that the hole existed or caused the loss. The claim was dismissed.

Not stated in the judgment.