Facts: There was a contract between the defendant (D) and the plaintiff (P) to 'supply, fit and hang’ a security door at the rear of a clothing shop. Thieves broke into the shop and stole a large quantity of stock (economic loss to P).
Held: Causation between the breach and the economic loss was established. The ‘but for’ test and common sense principles were applied (but for the failure of D to install a security door that provided reasonable protection against unlawful entry, the economic loss suffered by P would not have occurred). Although D’s breach was only one of the factors that caused the P’s loss, this was still held to be sufficient. (i.e. it was irrelevant that another cause of the economic loss was the actions of the thieves). The actions of the thieves stealing stock, after breaking in, were not considered an intervening act, as this was the exact event that the parties had bargained for.
Issue 1: Was there a breach of an express or implied term of the contract?
Held (majority): There was no express term. However, the majority found there was a breach of an implied term (i.e. the contract had an implied warranty to install a door that was reasonably fit for purpose - i.e. preventing breaking and entering).
Held (minority): The minority disagreed saying that the door had been fit for purpose as it delayed the thieves by 45 minutes-1 hour. Hypothetically, if a better security door had been installed, the thieves still may have broken in and took additional time to get through it.