Trebor Bassett Holdings Ltd & Anor v ADT Fire and Security Plc

A bespoke fire-suppression installation is ordinarily a contract for design skill and reasonable care, not a supply of goods whose quality or fitness can be judged in the abstract. Wording that a system is designed for particular risks and generally complies with a technical standard normally sets the standard of care; it does not guarantee success or eliminate every risk without clear and unequivocal language. Where contractual and tortious duties are co-extensive, contributory negligence may reduce damages under the Law Reform (Contributory Negligence) Act 1945. A predictable emergency response to the breach will not break causation unless it is so powerful that the breach was no cause at all. Prior knowledge can affect causation or mitigation only if attributable to the claimant at the appropriate organisational level.

ADT agreed in 2003 to design, supply, install and commission a carbon-dioxide fire-suppression system for Cadbury’s popcorn-production facility. A fire in 2005 was not detected or suppressed in the hopper and the factory was destroyed. Coulson J held that ADT had breached its contractual and tortious duties by failing to use reasonable skill and care in the design, but reduced Cadbury’s damages by 75 per cent for contributory negligence: [2011] EWHC 1936 (TCC).

Cadbury appealed, arguing that the contract imposed absolute obligations concerning the system’s suitability, quality and fitness for purpose. ADT cross-appealed on causation, relying on the employees’ response to the fire. The central issues were the proper characterisation of the contract, whether the specification guaranteed a result, and whether the employees’ conduct broke the causal chain.

1. Disposition. The appeal and ADT’s cross-appeal were dismissed. The reduction of damages to reflect Cadbury’s responsibility for the loss was upheld.
2. Character of the contract. The agreement was principally for the provision of design skill and reasonable care in selecting, combining, locating and installing components for a particular hazard. It was not naturally characterised as a sale of goods. The equipment itself was not defective; the failure lay in the design. The statutory terms concerning satisfactory quality and fitness for purpose therefore had no application to the system as a whole under the Supply of Goods and Services Act 1982.
3. Specification and result obligation. The description of the system as designed to suit the specific risks and to comply generally with BS 5306 Part 4 supplied a benchmark against which reasonable skill and care was to be judged. It did not guarantee that every fire would be extinguished or that every risk would be eliminated. A result obligation required clear and unequivocal language. The reasoning in Thake v Maurice [1986] 1 QB 644 and Greaves & Co (Contractors) Ltd v Baynham Meikle & Partners [1975] 1 WLR 1095 was sufficiently analogous.
4. Implied fitness term. Cadbury had not sufficiently communicated the relevant particular purpose or shown reasonable reliance on ADT’s skill and judgment for the purposes of sections 4(4) and 4(5) of the 1982 Act. The principal contractual obligation consequently remained one of reasonable skill and care. Since that obligation was co-extensive with the tortious duty, the reduction permitted by section 1 of the Law Reform (Contributory Negligence) Act 1945 was available.
5. Causation. The employees’ actions in releasing and attempting to extinguish burning popcorn occurred in an emergency created by the defective design. Their response was a predictable, seamless development of the danger. Applying the approach in Roberts v Bettany [2001] EWCA Civ 109, the conduct was not so powerful that ADT’s breach ceased to be a cause of the destruction.
6. Prior fire. For completeness, the court rejected the judge’s contingent conclusion that the 2004 fire would have broken causation if a guarantee had existed. Knowledge capable of affecting causation or mitigation had to be attributed to Cadbury at the appropriate management level. That issue had not been properly pleaded, investigated or found as a matter of corporate knowledge.

1. Court of Appeal (Civil Division): [2012] EWCA Civ 1158, 23 August 2012. Appeal and cross-appeal dismissed.
2. High Court, Technology and Construction Court: Coulson J, [2011] EWHC 1936 (TCC). ADT was liable for negligent design, but Cadbury’s damages were reduced by 75 per cent for contributory negligence.