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Issues Involved:
1. Causation of Dermatitis 2. Presence of Irritant in Garments 3. Condition of Appellant's Skin 4. Manufacturing Process and Negligence 5. Liability of Retailers under Sale of Goods Act 6. Liability of Manufacturers in Tort 7. Application of Donoghue v. Stevenson Principle Detailed Analysis: 1. Causation of Dermatitis: The appellant claimed that the dermatitis was caused by an irritating chemical in the underwear purchased from the respondents. The High Court of Australia had previously set aside the judgment in favor of the appellant, with a dissenting opinion from Evatt, J. The Privy Council concluded that the disease was of external origin, rejecting the respondents' argument that it was internally produced. The medical evidence, including the testimony of Dr. Upton and Dr. de Crespigny, supported the finding that the dermatitis was externally caused. 2. Presence of Irritant in Garments: The appellant argued that the dermatitis was due to free sulphites in the garments, which were admitted by the respondents to be present. The Chief Justice found that the garments contained sulphur dioxide, indicating the presence of free sulphites. However, the exact quantity of sulphites present when the garments were sold could not be determined due to washing. The Privy Council accepted the Chief Justice's conclusion that free sulphites were present in the garments in sufficient quantities to cause dermatitis. 3. Condition of Appellant's Skin: The Chief Justice held that the appellant's skin was normal, supported by evidence that he had previously worn woollen undergarments without issue. The argument that the appellant's past tuberculosis made him more susceptible to skin disease was not established. The Privy Council agreed with the Chief Justice's finding that the appellant's skin was normal. 4. Manufacturing Process and Negligence: Evidence showed that the manufacturing process involved several steps to remove chemicals, but negligence could result in residual free sulphites. The Chief Justice concluded that the presence of free sulphites indicated negligence in the manufacturing process. The Privy Council concurred, noting that the manufacturers failed to rebut the inference of negligence. 5. Liability of Retailers under Sale of Goods Act: The retailers were found liable for breach of implied conditions under Section 14 of the South Australia Sale of Goods Act, 1895. The Privy Council held that liability was established under both exceptions (i) and (ii) of Section 14. The garments were not fit for their intended purpose and were not of merchantable quality due to the hidden defect of free sulphites. 6. Liability of Manufacturers in Tort: The manufacturers were held liable in tort based on the principle established in Donoghue v. Stevenson. The Privy Council found that the manufacturers owed a duty of care to the appellant, as the garments were intended to reach the ultimate consumer without intermediate examination. The presence of free sulphites constituted a hidden defect, and the manufacturers' negligence in the manufacturing process breached their duty of care. 7. Application of Donoghue v. Stevenson Principle: The Privy Council applied the principle from Donoghue v. Stevenson, which established that manufacturers owe a duty of care to the ultimate consumer. The presence of a hidden defect (free sulphites) in the garments, similar to the decomposed snail in the opaque bottle in Donoghue, justified the application of this principle. The garments were intended to be worn next to the skin, and the defect was not detectable by reasonable examination. Conclusion: The Privy Council restored the judgment of the Chief Justice, holding both respondents liable for the appellant's dermatitis. The appeal was allowed with costs, and the appellant's petition for leave to adduce further evidence was dismissed without costs. The judgment emphasized the application of the Donoghue v. Stevenson principle, affirming the manufacturers' duty of care to the ultimate consumer.
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