Trebor Bassett Holdings Ltd and Cadbury UK Partnership v ADT Fire and Security Plc, Court of Appeal
Trebor Basset Holdings Ltd (TB) issued proceedings against ADT Fire and Security Plc (ADT) following a fire which destroyed TB’s factory. Once the fire had started, TB’s employees had acted in a way which caused the fire to spread and destroy the factory. ADT had supplied a bespoke system to TB to ensure that any fire would be extinguished, and TB issued proceedings on the basis that the system supplied by ADT was not suitable to extinguish the fire.
The High Court initially ruled that responsibility between the parties was shared (including due to inappropriate action of TB’s employees), and reduced the damages it awarded to TB by 75% as a result of that shared liability. TB appealed, claiming that ADT had been contracted to supply a system that was fit for purpose and in accordance with a specification; ADT counter-claimed and argued that previous fires in the factory and the actions of TB’s employees meant that the chain of causation resulting in ADT’s liability had been broken.
The Court of Appeal ruled that the system that ADT had supplied to TB was not a “good” and so did not need to be of satisfactory quality or reasonably fit for purpose in accordance with the Sale of Goods Act 1979 or Supply of Goods and Services Act 1982. In addition, as the system was specific to TB, the failings of the system were a matter of design and not quality. The Court of Appeal noted that TB had contracted ADT to provide a fire suppression system rather than a fire prevention system, and had not properly instructed ADT as to its specific needs and wants. Having made a clear distinction between the “goods” and the “services” provided by ADT, the Court of Appeal found that whilst ADT had failed to design the suppression system with reasonable skill and care, there was no failure to supply “goods” of satisfactory quality under the Supply of Goods and Services Act 1982 in relation to the suppression system itself. The court held that as the goods which were supplied were of good quality, and as there was no evidence to the contrary, it could not be argued that there was both a failure to supply goods of a satisfactory quality and provide reasonable care and skill in the design. It was clear to the Court of Appeal that the shortcomings in the system were caused by the faults in the design of the system rather than the quality of the goods of which it was comprised.