Wessanen Foods Ltd v Jofson Ltd

A contractual exclusion of liability for property damage may encompass claims framed in contract as well as tort. Where liability is preserved for damage that directly results from negligence, the phrase ordinarily preserves loss directly and naturally resulting from the negligence; it does not require negligence to be the sole or proximate cause. A contractual obligation to carry out repairs as quickly as reasonably possible is fact-sensitive. A usual response time is not necessarily a guarantee. Equipment is not defective merely because its safe operation depends on trained users following a straightforward procedure.

The claimant hired battery-powered fork lift trucks from the defendant under a contract which included maintenance, repair and familiarisation obligations. A truck caught fire after its battery cables became damaged and remained live. The claimant alleged breach of contract and negligence concerning the cable length, training and the defendant’s response to notification of the damaged truck.

The defendant relied on contractual exclusions and denied breach, negligence and causation. The court also considered foreseeability and, although unnecessary to the result, the recoverability of a discrete element of damages.

1. Construction of the contract. Clause 6(c) excluded liability for property damage however arising, including contractual claims, unless the damage directly resulted from the defendant’s negligence. “Directly” referred to loss directly and naturally resulting from negligence, akin to the first limb of Hadley v Baxendale, and did not require negligence to be the sole or proximate cause. Clause 14(b) was subordinate to, and did not alter, clause 6(c).
2. Unfairness. Clause 6(c) was not unreasonable under the Unfair Contract Terms Act 1977. The parties were experienced commercial parties. The claimant had greater, rather than weaker, bargaining power, knew or ought to have known the terms, and insurance was a neutral factor.
3. Liability. The trucks were safe and fit for purpose. Cables of the length supplied were in widespread safe use and contrary industry standards or manufacturers’ recommendations had not been shown. The defendant was not required to make the equipment “idiot-proof”. The familiarisation training was adequate, and any alleged omission was made good by the claimant’s own training provider.
4. The maintenance obligation required repairs as quickly as reasonably possible. The relevant circumstances included the problem as reported, its stated urgency, the parties’ usual procedure and the engineer’s other commitments. The defendant’s decision to attend the following morning was not a breach. A duty to warn might arise where maintenance revealed repeated damage or a health and safety risk, but any such duty was fulfilled on the facts.
5. Causation. Even assuming breach concerning cable length, the fire was caused by the driver’s failure to stow the cables correctly and the claimant employee’s failure to disconnect the damaged cables from the battery. Those acts were intervening causes attributable to the claimant.
6. Fire damage was nevertheless foreseeable if breach and causation had been established. The claimant’s claim was dismissed. The defendant’s counterclaim for the destroyed truck succeeded in the sum of £13,500.