The High Court has awarded a farmer €42,387.34 after finding that an electrical fault in a New Holland tractor caused a fire that destroyed the tractor and two others.
Mr Justice O’Neill ruled that the equipment seller was liable under a collateral contract with the farmer. He found no breach of contract by the leasing company.
The farmer had sought the tractor from Dermot Kelly Limited in April 1998 and obtained it through a six-month lease with New Holland Finance (Ireland) Limited. The leasing company bought the tractor from the seller and leased it to him. The judgment gives the lease dates as 8 April 1998 to 8 October 2002.
The fire happened in June 1998 after the farmer and an agricultural contractor had been cutting silage on a farm near Enfield, Co Meath. The three tractors were parked beside the silage pit late that night. The farmer’s tractor and the contractor’s two Fiat tractors were found destroyed by fire the following morning.
The cause of the fire was disputed. An engineer called for the farmer said an electrical fault near the tractor’s control panel caused combustion inside the locked cab. A defence engineer said the remains did not establish a specific cause and considered the older Fiat tractors a more likely source. The defence also raised theories of deliberate ignition, but the judge found those theories unsupported and unconvincing.
The judge accepted evidence that the order of debris in the cab showed the fire began inside it. Because the cab was locked and the fire was not malicious, he considered an electrical fault highly probable. He found that the fault started the fire, which spread to the other tractors with the help of wind. He rejected the argument that a fire in the locked cab would have extinguished itself from lack of oxygen.
The farmer was not a consumer under the Consumer Credit Act 1995 because he acquired the tractor in the course of his farming business. The judge therefore held that the lease was not a consumer-hire agreement and that the Act’s implied quality and fitness terms did not apply. He also found the lease was not a sale-of-goods contract and that the farmer had not established a contractual claim against the finance company.
The judge found that the seller’s agreement to sell the tractor to the finance company was part of a collateral contract with the farmer, made in return for the farmer entering the lease. He held that the contract for the new tractor carried an implied condition that it be of merchantable quality and free from dangerous defects. The electrical defect breached that condition. Judgment was entered against Dermot Kelly Limited for the agreed damages of €42,387.34.