In August 2012, the Court of Appeal heard a case between the sweet manufacturer Trebor Basset (part of the Cadbury group) and ADT Fire and Security.
Trebor had a popcorn plant where corn was popped in pans of oil before being transported to a hopper for packaging. Trebor instructed ADT to design and install a fire suppressing system which would automatically release CO2 to extinguish any fire that broke out in the hopper.
When a fire did break out, the system failed to discharge any CO2 and the fire continued unabated. The workers in the factory emptied the burning contents of the hopper onto the factory floor and attempted to stamp the fire out. This failed and not only did the fire spread to destroy the whole factory but it also consumed the chocolate factory next door, causing a reported £110 million of damage.
The judge at first instance found that ADT had a tortious liability for their failure to exercise reasonable care and skill when designing the system and made an award in Trebor’s favour. Crucially, he reduced this award by 75% due to Trebor’s contributory negligence. The Court found Trebor “woefully at fault”; not only had factory workers tipped the burning popcorn onto the floor but Trebor had failed to install any other fire extinguishing systems such as sprinklers.
Trebor appealed against the finding of 75% contributory negligence and argued that ADT had a contractual obligation that went beyond exercising reasonable care and skill. This argument centred on two points:
The Court of Appeal held that the provision of a bespoke system was not a supply of goods so point one failed. The Court of Appeal also found that the wording of the specification was not sufficient to guarantee that the system would do what the specification described. The Court stated that such liability would be unusual and that very clear wording would be needed for the specification to act as a guarantee of performance, particularly when dealing with something as unpredictable as a fire.
The decision at first instance was upheld. The usual wording of a specification is not a guarantee of performance where there is an element of design.
David Baverstock, Trainee Solicitor, Fladgate LLP (email@example.com)
Gillian Birkby, Partner, Fladgate LLP (firstname.lastname@example.org)