Contractors whose business involves providing security or protective installations owe an implied warranty that the work as completed will be reasonably fit for its protective purpose, even if the express terms of the contract are complied with, where the customer relies on the contractor's skill and judgment.
Later decisions that cite Reg Glass Pty Ltd v Rivers Locking Systems Pty Ltd
REG. GLASS PTY. LTD. v. RIVERS LOCKING SYSTEMS PTY. LTD. [1968] HCA 64; (1968) 120 CLR 516
Contract
High Court of Australia
Barwick C.J.(1), McTiernan(1), Menzies(1), Windeyer(2) and Owen(3) JJ.
CATCHWORDS
Contract - Implied term - Breach - Damages - Work done and materials supplied - Installation of burglar-proof door - Door installed not in breach of specifications in express contract - Door not reasonable protection against breaking and entering - Reliance on contractor's skill and knowledge - Whether warranty of fitness for intended purpose implied - Goods stolen - Measure of damages.
HEARING
Sydney, 1968, August 12, 19;DECISION
October 17.
2. The plaintiff, a retailer of men's wear, opened a new branch of its
business in a shop at 401 New South Head Road, Double Bay.
The shop was in a
new block of shops and offices fronting New South Head Road and backing on to
Kiaora Lane. In order to obtain insurance
upon its stock the plaintiff found
it necessary to install burglar-proof devices including what can loosely be
described as a burglar-proof
door at the back of the shop where it opened upon
a passageway leading through a gateway to Kiaora Lane. The plaintiff accepted
the
defendant's quotation as follows:
"RIVERS LOCKING SYSTEMS PTY. LTD.and fit
Engineers Protecting Against Burglary Lockmakers
and Manufacturers of Rivers Non Break-Out-Devices.
14 Carby Avenue, Concord, N.S.W.
26th January, 1966.
Mr. R. Glass,
Reg. Glass Pty. Ltd.,
25 Victory Street,
ROSE BAY.
Dear Sir:
Re - SHOP 2. 401 NEW SOUTH HEAD RD. DOUBLE BAY.
We have pleasure in submitting quotation to supply Rivers
security at the above premises as follows: FRONT SLIDING DOOR: Supply
Rivers 2 Point Non-break-out Locking
System, operated by key from outside.
43 pounds 0. 0. ($86.00)
REAR SINGLE DOOR: Supply, fit and
hang core door to suit opening, steel
sheet outside area, fit Rivers 4 Point
Non-break-out Locking System,
operated by key from inside, hinge
stops etc. Transfer latch from existing
door to this door. 63 pounds 10. 0. ($127.00)
KEYS: Both locks may be built to one
combination or separately as desired,
number of keys required supplied.
Thanking you for this opportunity to quote and assuring
you of our best service at all times.
We are,
Yours faithfully,
RIVERS LOCKING SYSTEMS PTY. LTD.
(Sgd.) R. RIVERS
Managing Director." (at p518)
3. It was with the item styled "rear single door" referred to in this
quotation that the litigation, of which this appeal is part,
has been
concerned. The basic problem, as we see it, is to determine the character of
the obligation which the defendant undertook
in the contract made by the
giving and acceptance of the foregoing quotation. (at p519)
4. What happened is that after the defendant had fitted and hung a door to suit the opening - as we construe the word "opening" in the document - and covered with steel sheet the outside area - as we construe the words "the outside area" in the document - and fitted Rivers 4 Point Non-break-out Locking System, thieves broke into the shop, not indeed through the door but by forcing the door out of position, and stole a lot of stock. (at p519)
5. The door had been hung by the defendant upon the existing wooden frame
work within the opening in the brick wall which consisted
of two vertical
jambs and a horizontal lintel. This frame work was of Pacific Maple, a soft
wood, and the jambs were four and one-half
inches wide. The edges of the jambs
facing the passageway were flush with the line of bricks constituting the wall
of the passageway
and were about two inches in width. These edges and the edge
of the lintel facing the passageway were not in any way protected. By
virtue
of the Rivers 4 Point Locking System the door was held in position by two
horizontal and two vertical bars. The horizontal
bars fitted into holes in the
bricks beyond the jambs on either side; the bottom vertical bar fitted into a
copper recess cap which
fitted into a hole drilled into the concrete floor;
the top vertical bar fitted into a metal bracket attached to the lintel. His
Honour, the learned trial judge, speaking of the door at the time of this
fitting and hanging as we have described it found as follows:
"I am satisfied that at this time it closed easily and correctly
and that the locking handle, which was on the inside, when operated
moved the two horizontal bars and the two vertical bars into their
recess. When the door was fitted in this way, the part which faced
the passageway was protected by a solid steel sheet of sixteen-gauge
thickness and, as one viewed the door and the frame from the
passageway, it could be seen that there was a steel sheet, though
its thickness could not be visually determined. Also, looking at the
door from the passageway, there was exposed part of the lintel and
part of each jamb, that is to say in the case of the jambs the whole
of that part which had not been cut away for the rebate, which
constituted about two inches in width, and I think also a similar
width of the lintel.
I will add to this description that when the horizontal locking
bars were in the locked position, they passed through metal guides
securely attached to the inside face of the jambs and protruded
thence into the recesses that had been made in the brickwork. I am
satisfied that the degree of penetration on the hinge side was very
slight and that on the closing side the amount of penetration into
the brickwork was about three-quarters of an inch." (at p520)
6. His Honour also made a finding about the way in which the thieves entered
the shop. It was as follows:
". . . the thieves first splintered and removed the closing jamb
and the lintel, using the closing side of the door as a fulcrum and
then, having removed or splintered the jamb, used the chipped bricks
as a fulcrum to force the closing side of the door out into the
passageway. This activity also involved a certain amount of chipping
of the brick round the socket into which the horizontal locking bar
on the closing side was fitted, with the result that the brick did
not present any distraction to prevent the locking bar being levered
towards the passage. The action of forcing the door in this way also
caused the vertical locking bar into the floor to be forced out of
its socket and, indeed, the evidence before me was that it was bent.
When the robbery was discovered, the jamb on the hinge side was
substantially intact although it was weakened in its attachment to
the brick wall, and the door on that side, although not completely
undamaged, was practically so. When the operation was completed, the
door bore on its face and side about forty-four different marks of a
jemmy. This method of forcing the door was acknowledged by Mr.
Marshall to be probable and he also said that although it was
difficult to make an estimate of the time involved, it would
probably have taken between three-quarters of an hour and one hour.
. . . . . . . . . . . . .
In the condition in which this door was installed there was
exposed to the view of anyone looking at it from the passage, a
considerable area of softwood. The door, unquestionably, was flush
with this wood along the side which formed a right-angle with the
passage but the wood constituting both door jambs, as I have already
explained, projected towards the passage from beyond the face of the
door for about two inches. In my opinion, it is clear that a
determined burglar equipped with a jemmy could splinter this wood
and lever open the door into the passageway, in a comparatively
short time. There is some evidence to suggest that this could have
been done in about an hour and, in my opinion, this estimate is the
outside limit and it would probably have taken a shorter time." (at p520)
7. The first problem is whether, in installing the door as it did, the
defendant was in any way in breach of the contract formed
by the giving and
acceptance of the quotation which we have already set out. (at p520)
8. Our reading of the express provision of the quotation is that it was merely the outside area of the door that was to be covered with steel sheet, and the contract did not in terms provide that the whole area of the gap in the brickwork to form a doorway should be covered with sheet steel. Secondly, it is our opinion that the door suited the opening according to the terms of the contract. We regard "the opening" as being the space between the jambs, lintel and floor and not the space between the brickwork and the floor. We do not read the quotation as requiring that the door should be hung from the bricks without any jamb or lintel between the door and the bricks. Accordingly, upon the findings made, we do not think there was any breach by the defendant of the express terms of the contract. (at p521)
9. By common law, however, there was a term to be implied in the contract. The business of the defendant was to provide burglarproof protection and the plaintiff unquestionably relied upon its skill and ability to supply, fit and hang a door which would provide reasonable protection against persons seeking to break in when the locking devices were in operation. (G. H. Myers and Co. v. Brent Cross Service Co. (1934) 1 KB 46 ; Stewart v. Reavell's Garage (1952) 2 QB 545 .) It would, for instance, have been a plain breach of the contract if the locking devices had done no more than penetrate the wooden jambs and lintel so that pressure against the door could have split the wood and pushed the door in. Similarly, if the defendant had fixed the steel sheeting to the outside area of the door in such a way as it could have readily been removed, e.g., by exposed screws, although there would have been compliance with the express terms of the contract, the implied term would have been broken. The problem, as we see it therefore, is whether the Supreme Court was correct in setting aside the finding of the learned trial judge that the manner of the hanging of the door was such that the door did not provide reasonable protection against persons seeking to enter the shop. (at p521)
10. In our opinion the learned trial judge's finding was correct. It was,
perhaps, natural that the plaintiff should have concentrated
attention upon a
particular means of safeguarding the door, i.e., by sheathing the jambs with
steel, and this emphasis, as we see
it, led the Supreme Court to the
conclusion that the plaintiff was seeking to add to the contract work not
covered by the contract.
Naturally and properly the Supreme Court decided that
there was no basis for implying in the contract a specific term that the jambs
and lintel should be sheathed with steel plate. Thus the Supreme Court said
(1968) 2 NSWR, at p 191:
"But, in our opinion, there is no warrant for implying into the
contract an undertaking by the appellant to do work and supply
materials going beyond the work and materials agreed to be done and
supplied by the express terms of the contract between the parties,
which is what the respondent's claim in the action comes to in
substance and effect when regard is had to what it relies upon as
amounting to a breach. The contract was only to supply, fit and hang
a door of specified construction 'to suit opening', and although the
quoted words have been relied on in argument in support of the
proposition that 'opening' means the entire opening in the brickwork
constituted by the door and its frame and that the obligation was to
supply and fit a door which gave reasonable protection against
unauthorized entry or exit through that opening, they merely mean,
in our opinion, to suit the opening in the form of a door frame left
by the removal of the existing hollow core door; and the door was
agreed to be fitted with a specified locking device. Such degree of
protection as this door and locking device might give against
burglary was thus assured to the respondent. There is no warrant for
implying an understanding to give further and better protection
against burglary by doing further work upon the respondent's
premises not contracted for, in the form of putting strips of steel
on the door jambs." (at p522)
11. With great respect to the members of the Supreme Court, however, we do
not consider that the question can be stated in such
particular terms. The
defendant could, in a variety of ways, have fulfilled its obligation to
supply, fit and hang a door so that
it would constitute reasonably fit
protection against thieves, and it was certainly not under any particular
obligation to sheath
the jambs. The point is, however, that the work as it was
done did not constitute the door a reasonable deterrent to thieves wanting
to
break into the shop, and it is not the point that the contract did not provide
a particular means of making it such a deterrent.
The contract did not provide
in terms that the two horizontal locking bars should, when in position, be
bedded into the bricks but,
as we have already said, to have bedded them
merely in the wooden jambs would have constituted a breach of the implied
warranty to
supply, fit and hang a door which would, when in use, provide a
reasonable means to prevent thieves from breaking into the shop.
Of course the
defendant did not undertake to provide a door which would defeat all
endeavours of determined thieves to break in and
steal, and its implied
obligation was, of necessity, qualified. Nevertheless we are not prepared to
express that qualification more
particularly than by using terms indicating
reasonable fitness for the purpose for which the door was being installed; in
particular,
we are not prepared to state the qualification in terms of the
time by which would-be breakers have been delayed by the door. Of
course the
door as fitted would delay progress longer than would the hollow core wooden
door which it replaced, but that, we think,
is not enough. What the plaintiff
contracted for was a door which when locked would be reasonably fit to keep
would-be breakers out
of the shop and the door as fitted and hung by the
defendant was, as the learned trial judge found, not of that character. We
think
that finding was open; indeed we agree with it. In our opinion the
Supreme Court was wrong in its conclusion that breach of contract
had not been
established against the defendant. (at p523)
12. The question of damages has its difficulties. The learned trial judge decided that the entry was due to the breach and that the measure of damages was the value of the goods stolen. This the respondent disputes. The respondent first claims that the amount assessed by his Honour was against the evidence and the weight of evidence, and pointed to a number of circumstances suggesting that the plaintiff's claim had been grossly exaggerated. In our opinion, however, nothing appears to show that his Honour's conclusion about the plaintiff's loss by theft was wrong. The more fundamental question, however, is whether the measure of damages for the breach of contract was the value of the goods stolen. Upon the whole we agree with his Honour, the learned trial judge, that it was. It is true that it cannot be predicated that a door complying with the warranty would have prevented the thieves from breaking into the shop but once breach of warranty is established, and it appears that the actual entry made was due to the breach of warranty, we think that the loss suffered from the entry is prima facie the measure of damages for breach of warranty. This involves two steps. First that the loss suffered resulted from the breach, and secondly that the loss suffered was, when the contract was made, reasonably foreseeable as likely to result from such a breach. His Honour's affirmative finding as to both these matters cannot, we think, be disturbed. (at p523)
13. Accordingly, in our opinion, the appeal should be allowed and the judgment for the plaintiff for $10,365.53 should be restored. (at p523)
WINDEYER J. I agree entirely in the judgment to be delivered by my brother Owen. (at p523)
2. There would no doubt have been no great difficulty in devising a door with different and stronger surrounding elements of the doorway; and such an arrangement would have made more difficult a breaking and entering in the particular way that occurred. But the question is not whether a better thing could have been done, but whether what was done was a breach of contract. I am unable to spell out of the written quotation any express warranty enlarging the scope of the warranty of fitness which is implied by the common law. I do not think that the evidence shewed a breach of the warranty that the door with its associated arrangements would be reasonably fit for its purpose as made known by the respondent to the appellant, namely to provide a deterrent against breaking and entering. And I do not think that it can be said that as fitted it did not answer the description in the documents of the work to be done by the respondent. That the shop was in fact broken into does not establish that the contract for the door was broken. (at p524)
3. I should add that I am not persuaded that if there were a breach the loss flowed from the breach. If the reinforcement of the door frame by metal, as now suggested by the appellant, had been provided, it seems to me by no means certain that the breaking and entering would not still have occurred. It would have taken longer, because it would have been less easy for the lawbreaker to get at the part of the brickwork which he had to remove to get at the bolt and free the door. A better door frame and a more secure locking system as suggested would have been a greater deterrent to shopbreakers; but it is not to my mind shewn that it would have deterred this shopbreaker. (at p524)
4. I would dismiss the appeal. (at p524)
OWEN J. The appellant, the plaintiff in this action, was the lessee of a
lock-up shop in which it intended to conduct the business
of selling men's
clothing and the defendant carried on the business of supplying and fitting
commercial premises, such as shops,
with doors equipped with what were called
"Rivers Locking Systems" designed to afford a measure of protection against
thieves breaking
into and out of such premises. The plaintiff's shop was one
of a number which fronted an arcade. Running behind the shops there was
an
enclosed passageway into which the back door of each shop opened and which led
to a loading dock opening on to a lane, the loading
dock being fitted with a
roller shutter. This passageway would obviously offer attractions to anyone
who wished to break into any
of the shops since such a person would, if the
roller shutter at the loading dock was pulled down, be able to work unobserved
while
forcing the door of the shop of his choice or breaking through the
single course brick wall which separated the shops from the passageway.
When
the plaintiff became the lessee of the shop its back door was a hollow core
door with an ordinary lock which would provide little
protection against an
intruder, and this, coupled with the existence of the passageway and the fact
that the rear wall of the shop
was a single course wall, made it difficult for
the plaintiff to take out a policy of insurance against loss that might result
should
some person break and enter its shop. In these circumstances an
insurance broker advised the plaintiff to consult the defendant for
the
purpose of seeing what could be done to make unlawful entry into the shop more
difficult. A Mr. Glass, representing the plaintiff,
thereupon had an interview
at the shop with Miss Rivers, the managing director of the defendant. After
inspecting the premises she
advised Mr. Glass to replace the hollow core back
door with a solid core door covered with sheet steel on the side facing the
passageway
and fitted with a Rivers Locking System. Mr. Glass inquired what
she thought would be the risk of burglary if her suggestion was
carried out
and Miss Rivers replied: " . . . if you do this work I would consider your
risks of burglary to be entry and removal
of goods through the rear wall and
removal of goods through the glass panels at the front" - that is the front of
the shop opening
on to the arcade. She said: "Your real risk is this brick
wall, it has a single course of bricks and a dark passageway, the passageway
is dark and lonely and people can work here in unlimited time. What you really
need to do is to secure this passageway", this last
remark being directed to
the provision of some safeguard to prevent entry into the passageway from the
lane. Mr. Glass said: "I cannot
take care of every possibility. There must be
some limit. I am having an alarm system fitted." Miss Rivers replied: "Our
door will
cause delay and an alarm system will support this in that it reduces
the time one can stay at work but I still recommend that you
lock the roller
shutter at the rear of this passageway because if entry is made into this
passageway through any of the adjoining
shops and the wall is breached the
roller shutter will then be opened from the inside to take stock out." Mr.
Glass then asked Miss
Rivers to give a written quotation for the work and a
few days later a written quotation was supplied. It stated:
"We have pleasure in submitting quotation to supply
Rivers security . . . as follows:
Front Sliding Door: . . . .
Rear Single Door: Supply, fit and hang solid core door to suit
opening, steel sheet outside area, fit Rivers 4 Point
Non-break-out Locking System operated by key from inside, hinge
stops etc.
63 pounds. 10. 0 ($127.00)
. . . ." (at p525)
2. The quotation was accepted by Mr. Glass and, in place of the hollow core
door, a door of the kind specified in the quotation
was supplied and hung in
the existing door frame which was made of softwood. No alarm system was
installed by the plaintiff. Some
weeks later, Mr. Glass arrived at the shop
one Monday morning to find that during the weekend the shop had been broken
into and a
quantity of goods stolen from it. The intruder, using a jemmy, had
split the wooden lintel and the door jamb on one side of the back
door and
this had enabled him to chip away sufficient of the brickwork into which a
horizontal locking bar of the door was recessed
and then, by the use of what
must have been considerable force, to lever the door open, bending a vertical
metal locking bar out
of the slot in the concrete floor into which it fitted.
(at p526)
3. In these circumstances the plaintiff sought to recover damages from the defendant for breach of an implied warranty arising from the facts that the latter's business was to supply and fit doors designed to afford a measure of protection against breaking and entering and that the plaintiff had made known to the defendant the purpose for which it required the door in circumstances which showed that it had relied on the defendant's skill and judgment. At the trial before Macfarlan J. the suggested warranty was said to be one arising under s. 19 (1) of the Sale of Goods Act, 1923, as amended (N.S.W.), but, as was pointed out by the Court of Appeal, the contract was not one for the sale of goods but for work and labour and the supply of material. This is, however, of no significance since in such a contract a warranty to the same effect as that contained in s. 19 (1) might be implied by the common law: Stewart v. Reavell's Garage (1952) 2 QB 545 (at p526)
4. It was conceded by the parties that there could be no implication of a warranty that the door as supplied, fitted and hung would afford complete protection against unlawful entry into the shop through the door and, as it seems to me, the only warranty that could possibly be implied would be one to the effect that the door as fitted and hung would offer some substantial inpediment to an unlawful entry and cause a significant period of delay to a would-be intruder who might for that reason desist from trying to force an entry through it. The implied warranty which the learned trial judge found to have been given was stated by him as being one by which the defendant promised to "supply a door designed, built and installed in a manner fit to provide reasonable protection to the plaintiff's shop from the entry of burglars" and this is, I think, only another way of expressing the same idea. His Honour went on to find that the defendant had failed to comply with the warranty because the new door had been hung in the existing door frame which could be split and parts of it removed without great difficulty, thus enabling a would-be intruder to get at the brickwork behind the door jamb and chip away sufficient of it to free the horizontal locking bar from the recess into which it fitted and allow the door to be levered out of position. His Honour considered that the breach of warranty lay in the fact that when hanging the door the defendant had not covered the passageway side of the door frame with metal strips secured by bolts running through the brickwork. Had this been done, the warranty would, in his Honour's opinion, have been complied with. He went on to find that the loss of the plaintiff's goods had resulted from the breach of warranty and entered judgment for the plaintiff for $10,152.53. (at p527)
5. In the Court of Appeal their Honours felt, as I have felt, difficulty in determining what exactly was the warranty, if one was to be implied, upon which the plaintiff's claim was based. They took the view, however, that the learned trial judge's conclusion that the warranty - however it might be expressed - was breached because the defendant had not fitted metal strips over the wooden frame of the door could not be sustained. The contract between the parties was, they said, one under which the defendant was to hang a door of the specified kind "to suit opening", that is to "suit the opening left by the removal of the hollow core door". The defendant had not contracted, expressly or by implication, to supply and fit metal strips to the door frame and the fact that it had not done that additional work and supplied that additional material could not be regarded as a breach of any obligation imposed by the contract. For that reason their Honours allowed the appeal and entered judgment for the defendant. (at p527)
6. While I am not disposed to differ from the view thus taken by the Court of Appeal, there are, in my opinion, two further matters each of which would entitle the defendant to succeed but which that Court found it unnecessary to consider. As I have said earlier, it is conceded by the parties that there could be no warranty of absolute protection against unlawful entry. The most that could be said is that the defendant warranted that the door as fitted and hung would afford a reasonable measure of protection against unlawful entry by impeding or delaying a forcible entry to a significant extent and thus discouraging the intruder from breaking into the shop by means of the door. The fact as found by the learned trial judge was that the task of splitting the wooden door frame, chipping away the brickwork so as to free one of the locking bars and forcing the door open probably took the intruder between three-quarters of an hour and an hour. It is, I think, impossible in these circumstances to say that the plaintiff established that the door did not impede or delay the thief to a significant or substantial extent and, if that be so, no breach of warranty was proved. Further, assuming that there was a breach of such a warranty, it is impossible to say that it was proved that the plaintiff's loss flowed from that breach. Suppose the door had been of such a kind as to delay the intruder's entry for two or three hours or even longer. Would he have abandoned the enterprise or would he have persisted with it and ultimately succeeded? It seems to me that the evidence does not permit of an answer to those questions. It is not known when it was that he began his work or how much time he was ready, able and willing to devote to it. Even if it be assumed that he was a reasonably skilful and determined operator, it is impossible to say whether he would have given up the task or gone on with it and ultimately broken through the door or whether he would have turned his attention to the one course brick wall and knocked or prised out sufficient bricks to get through it in which case, so a police officer who gave evidence estimated, it would probably have taken him from one-half to three-quarters of an hour. Even if it was permissible to speculate, I myself am unable to say which guess would be more likely to be the correct one. (at p528)
7. I would dismiss the appeal. (at p528)
ORDER
Appeal allowed with costs. Order of the Supreme Court (Court of Appeal Division) set aside and in lieu thereof order that the appeal to that Court be dismissed with costs.