The Western Australian Court of Appeal has provided a reminder that it is significantly more difficult to prove negligence in a product liability case than it is to prove breach of contract on the basis of implied terms and conditions imposed by statute.

The plaintiff was a drilling company involved in mineral exploitation in Western Australia and it purchased a TS24 compressor from its supplier. The supplier had sourced the compressor from an American manufacturer and made representations to the plaintiff that it would be appropriate for use in the plaintiff’s business. The compressor failed and was repaired on eight separate occasions before the plaintiff ultimately determined that it was uneconomical to continue operating it. As a result of the failures, the plaintiff suffered economic loss and sued the supplier for breach of contract and sued the American manufacturer for negligence.

The trial judge accepted evidence that the majority of contractors which had used TS24 compressors for mining in Western Australia had experienced similar failures to those experienced by the plaintiff. It was determined that the TS24 was not fit for its intended purpose and was not of merchantable quality and that the supplier had breached its contract with the plaintiff in accordance with the provisions of the Sale of Goods Act 1895 (WA).

Notwithstanding the finding that the compressor was not fit for its intended purpose, the trial judge was not satisfied that the plaintiff had proven negligent design or manufacture and dismissed the plaintiff’s claim against the manufacturer. The plaintiff appealed the decision and argued that the evidence supported an inference that there was no other explanation for the failure of the compressor (both in the plaintiff’s business and in other businesses) other than that the design or manufacture of the TS24 compressor was negligent.

The Court of Appeal dismissed the appeal and determined that it was incumbent on the plaintiff to prove the actual cause of the failure. The plaintiff did not present any expert evidence identifying a specific defect in the compressor that caused the failures; nor did the plaintiff adduce any evidence comparing the design of the TS24 compressor to other compressors in the market. The Court determined that it could not substitute an assumption for evidence and it could not simply assume that in the absence of another explanation for the failure of the compressor, it must have been negligently designed or manufactured.

Swick Nominees Pty Ltd v Leroi International Inc [2015]

It is well-established that a manufacturer does not owe a duty of care to ensure that a product is fit for its intended purpose.  It is easier to prove breach of implied warranties concerning fitness for purpose than it is to prove negligence.