Sandhu Menswear Company Ltd v Woolworths Plc

An occupier may owe a duty of care to neighbouring property owners where combustible material creates an obvious and significant risk that third parties may ignite it and cause damage. The risk need not have resulted in a previous similar fire or have been the subject of a specific warning. The standard of care may take account of the defendant organisation’s actual knowledge, including its internal fire-safety policies and specialist knowledge. A deficient risk assessment, inadequate housekeeping, failure to investigate local risks and failure to secure or remove combustible waste may constitute breach. Informal arrangements with a contractor for waste collection do not excuse the occupier’s failure to control the waste while it remains on its premises.

Sandhu occupied a warehouse adjoining premises occupied by Woolworths. A fire was deliberately started in combustible cardboard and packaging left in open stillages outside Woolworths’ unit. The fire spread to both units, damaging Sandhu’s property.

Sandhu claimed damages in excess of £400,000, alleging that Woolworths had negligently accumulated and stored combustible waste despite local vandalism and arson risks, internal fire-safety requirements and warnings concerning the premises. Liability was tried separately from causation and damage. The central issues were whether Woolworths owed Sandhu a duty of care, whether that duty was breached, and whether Woolworths’ arrangements with Wincanton for waste collection provided a defence.

1. Duty of care. Woolworths owed Sandhu a duty not to leave combustible material in a manner which might cause damage to neighbouring property. Applying Smith v Littlewoods Organisation Ltd [1987] 1 AC 241, the risk was substantially more than a mere possibility. It was foreseeable that children or young people could access the industrial estate, ignite waste packaging and cause fire to spread to neighbouring buildings. A previous fire at the unit, or a specific complaint identifying a fire risk, was unnecessary.
2. Standard of care. The required care was assessed by reference to the knowledge Woolworths possessed as an organisation. Its mandatory Fire SIP, specialist fire-safety knowledge, landlord’s complaints and information about local crime were relevant. The court followed the approach in Wimpey Construction Ltd v D V Poole [1984] 2 Lloyd’s Reports 499.
3. Breach. Woolworths failed to carry out the checks required by Fire SIP, failed to investigate local fire, police and neighbouring-occupier information, conducted an inadequate fire-risk assessment, and left open stillages containing combustible waste close to the building and perimeter fence. Those failures created the relevant source of danger and amounted to breach. The court explained the formulation in Gabriel v Kirklees MBC [2004] EWCA Civ 345 as requiring proof that the source of danger resulted from failure to exercise reasonable care.
4. Wincanton. Woolworths had not proved the nature or adequacy of its informal arrangements with Wincanton. In any event, a contractor’s failure to collect waste did not excuse Woolworths’ continuing duty to keep it away from the building and fence.
5. Disposition. Woolworths were liable in damages. Directions were invited for the subsequent assessment of damages.

First-instance judgment. The court recorded earlier orders limiting the trial to liability and striking out Woolworths’ allegation of contributory negligence.