Muirhead v Industrial Tank Specialties [1986] QB 507

Key points

  • Junior Books is limited its specific facts
  • Pure economic loss from defective products is not recoverable due to insufficient proximity between the manufacturer and final consumer

Facts

  • C an enterprising fishmonger, conceived a scheme to supply the market for lobsters at times of high demand by keeping them in tanks
  • The tanks from ITS failed to work properly and the lobsters died
  • ITS was insolvent and C sued the French manufacturer (D) of the pumps instead

Held (Court of Appeal)

  • Damages were recovered for the dead lobsters and consequential loss of profits from the dead lobsters
  • Damages were not recoverable for the cost of the pumps and consequential losses from the defective pumps (PEL)

Robert Goff LJ

Junior Books confined to specific facts

  • Lord Roskill and Lord Fraser both held that there was an especially close proximity between the subcontractor (C) and building owner (D) and Lord Roskill held that reliance by the building owner was significant
  • However, the reliance in Junior Books cannot be distinguished from reliance generally placed by ultimate consumers of any goods upon their manufacturers: p. 527
  • Given the elements of proximity and reliance put forth by Lords Roskill and Fraser, Junior Books should be interpreted as a case where a duty of care for pure economic loss arose due to an assumption of responsibility, but it should be confined to its particular facts since the principle of assumption of responsibility goes against the fact that the parties deliberately structured their contracts to avoid direct liability between them: p. 528

Current case

  • The close proximity between the subcontractor and the building owner found in Junior Books does not apply in the current case, which involves the ordinary purchase of chattels
  • Lords Fraser and Roskill stated that there is no assumption of responsibility in such cases by a manufacturer towards the ultimate consumer as there is insufficient proximity between them: p.128