Vibixa Ltd v Komori UK Ltd & Ors

The Court of Appeal decided two issues: (1) how "general enabling words" in the preamble to a statutory instrument are to be interpreted; and (2) whether health and safety regulations made under section 15(1) of the Health and Safety at Work etc Act 1974 can give rise to a purchaser's claim for property damage and consequential loss. The court held that general enabling words may be read as importing an unexpressed enabling power only where that power is necessary for the validity or effect of the instrument, where the operative provisions make it clear that the unexpressed power must have been invoked, or where a conforming interpretation is required by Community law or to secure compatibility with Convention rights; they do not cover every power that could have been used. Applying that test, the court held that the Supply of Machinery (Safety) Regulations 1992 were not made under section 15(1) of the 1974 Act. In any event the court held that regulations under section 15(1) cannot form the basis of a claim by a purchaser for property damage or consequential loss of profits under section 47(2) of the 1974 Act.

This appeal arose from an order of Field J (26 July 2005) striking out parts of Vibixa's and Polestar's claims that relied on breach of statutory duty under the Health and Safety at Work etc Act 1974. The claimants sought damages for property damage and loss of profit caused by fires allegedly started by defective printing machinery supplied by the respondents. The claimants relied on section 47(2) of the 1974 Act, contending that the Supply of Machinery (Safety) Regulations 1992 were "health and safety regulations" made under section 15(1) of the 1974 Act so as to give rise to a statutory cause of action for damage to property.

The court identified three principal issues: (i) the legal effect of broad words in a statutory instrument preamble such as "and of all his other enabling powers"; (ii) whether those words in the 1992 machinery regulations imported the power in section 15(1) of the 1974 Act; and (iii) whether health and safety regulations made under section 15(1) can properly be used to create a right of action for property damage and consequential financial loss suffered by a purchaser.

• On statutory interpretation the court held that general enabling words may be construed as referring to an unexpressed enabling power where that is necessary for the instrument's validity or operation, where the instrument's terms require it, or to achieve conformity with Community law or compatibility with Convention rights; they will not be read so as to import any power that might conceivably have been used.
• Applying that approach, the court found the machinery regulations had been made under the European Communities Act 1972 (section 2(2)) to implement the machinery directive and did not require reading-in of section 15(1). The directive did not manifest an objective to create remedies for purchasers against suppliers for property damage, and domestic implementation (including PUWER reg 10 and the text and structure of the machinery regulations) indicated the regulations were not made as health and safety regulations under the 1974 Act.
• Finally, and in any event, the court held that section 15(1) regulations are directed to the general purposes of Part I of the 1974 Act (promotion of health, safety and welfare of people at work) and do not extend to creating a statutory cause of action for an employer/purchaser to recover ordinary property damage or consequential financial loss. The court therefore dismissed the appeals and upheld the strike-out of the statutory duty claims.

Appeal dismissed. The Court held that (1) general enabling words are only read as importing an unexpressed enabling power where necessary for validity, operation or to secure conformity with Community law or Convention rights; they do not import every conceivable power. Applying that test, the Supply of Machinery (Safety) Regulations 1992 were not made under section 15(1) of the Health and Safety at Work etc Act 1974. Further, regulations under section 15(1) cannot give rise to a purchaser's claim for property damage and consequential loss under section 47(2). Accordingly the judge was right to strike out the statutory duty claims.

Appeal from Field J in the Queen's Bench Division: order of 26 July 2005 striking out part of the claim pleaded under the Health and Safety at Work etc Act 1974; reported below as [2005] EWHC 1674 (QB).