LMS International Ltd and others v Styrene Packaging and Insulation Ltd and others [2005] EWHC 2065 (TCC); [2006] TCLR 6
High Court, Technology and Construction Court — 30 September 2005
Facts
Styrene Packaging and Insulation Ltd manufactured expanded polystyrene at a factory in Bradford. On 6 August 2003, a fire began while an employee was cutting rejected blocks with a hot-wire machine. It spread rapidly through the factory and into two adjoining units, damaging their buildings and contents. LMS occupied those units; the other two claimants owned them.
The factory contained substantial quantities of polystyrene, including recently manufactured blocks containing residual pentane, a flammable blowing agent. Blocks were stored close to the cutting machine without fire-resistant separation. Small fires had occurred previously, and the Health and Safety Executive and fire authority had raised concerns about the arrangements.
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The company occupied the factory, while four individuals owned it and were also its directors and shareholders. The claimants sued the company under the rule in Rylands v Fletcher, negligence and nuisance. They also claimed against the individuals and raised a separate issue concerning the failure to repair the damaged party wall.
Issues
The court had to determine how the fire began, whether the company’s storage and manufacturing activities attracted strict liability, and whether failures in fire precautions and training caused the damage. It also had to distinguish the company’s liability from any liability of the individual owners.
Decision
Judge Peter Coulson QC held the company liable under Rylands v Fletcher and, independently, in negligence and nuisance. The individuals were not liable merely as the company’s landlords or directors. They were, however, liable to the two neighbouring owners for breaching obligations of support imposed by the relevant deeds.
This was a trial of liability. The amount of compensation was left for a separate hearing.
Why the fire claim succeeded
The judge found that a cutting wire broke and produced a spark through electrical arcing. The spark ignited pentane in the block being cut, which then caught fire. Flames spread to the nearby stored blocks. This explanation was supported by the employee’s original accounts, the physical remains of the wires and expert evidence. The judge rejected the suggestion that the fire was inexplicable.
For the Rylands v Fletcher claim, the important combination was the quantity and flammability of the material, its storage close to a source of ignition, and the resulting foreseeable risk to adjoining property. The court held that this amounted to a non-natural use of land. It was not enough to characterise the operation simply as an ordinary manufacturing business on an industrial estate.
The judge compared the accumulation of polystyrene and pentane with the industrial chemical storage considered in Cambridge Water. He distinguished the ordinary domestic water supply in Transco. The strict-liability finding meant that the claimants did not have to establish negligence to succeed on this ground.
The alternative negligence claim nevertheless succeeded. The duty remained one of reasonable care in the circumstances; the court did not create a different legal duty simply because the activity was dangerous. The known risks and history of fires were crucial to deciding what reasonable care required.
The company had failed to provide adequate training in operating the machine and responding to fires. It had neither separated the stored blocks with fire-resistant barriers nor installed an automatic detection system in the upper production area. It had also failed to fit the recommended interlock that would cut power to the wires if the conveyor jammed.
The authorities’ decision not to bring enforcement proceedings did not establish that the company’s precautions were reasonable. Their recommendations had not been implemented, and the company had not kept them adequately informed. However, the judge rejected the separate allegation that failing to install sprinklers itself amounted to negligence on these facts.
The findings covered both prevention and containment. Even if the fire’s initial outbreak had been unavoidable, proper training and precautions would probably have prevented it from spreading beyond the cutting machine. The judge did not blame the employee personally for panicking and failing to extinguish the fire: his reaction reflected the company’s inadequate training.
The owners and the party wall
The company’s fire liability did not automatically extend to the four individuals. The court found no basis for holding them responsible as landlords for authorising or participating in the nuisance, and their status as directors did not make them liable for the company’s defaults.
The support claim rested on different obligations. The deeds gave the adjoining units rights of support from the factory property. The individual owners breached those obligations by failing to arrange the necessary remedial work after the fire damaged the wall and roof structure.
The company was also responsible in nuisance for failing to address the damaged party wall. That finding did not create an additional recovery for the same loss: the judge expected the resulting damage to be covered by the successful fire claims.
