Grant v Australian Knitting Mills [1935] UKPC 2 (21 October 1935)

Dr Grant contracted severe dermatitis from wearing woollen underpants containing excess free sulphites due to negligent manufacture. The Privy Council held both the retailer liable for breach of implied warranty under the Sale of Goods Act and the manufacturer liable in tort, extending the Donoghue v Stevenson principle to external products.

Facts

Dr Richard Thorold Grant, a medical practitioner in Adelaide, purchased two pairs of underpants and two singlets manufactured by Australian Knitting Mills Limited from retailers John Martin & Co. Ltd on 3rd June 1931. Upon wearing the garments, he developed severe dermatitis beginning at his ankles where the cuffs of the pants pressed tightly against his skin. The condition became generalised and extremely acute, confining him to bed for 17 weeks and requiring hospitalisation. Medical evidence established the dermatitis was of external origin.

The underpants contained free sulphites, a residue from the manufacturing process involving bisulphite of soda treatment. When combined with sweat, these sulphites produced sulphurous and sulphuric acid, causing the skin irritation. Evidence showed the manufacturer’s process was designed to neutralise such chemicals, but if not properly applied, excess sulphites would remain in the garments.

Issues

Against the Retailer

Whether the retailer was liable for breach of implied conditions under section 14 of the Sale of Goods Act 1895.

Against the Manufacturer

Whether the manufacturer owed a duty of care in tort to the ultimate consumer despite having no contractual relationship with him, applying the principle established in Donoghue v Stevenson.

Judgment

The Privy Council allowed the appeal, restoring the trial judge’s decision against both respondents.

Liability of the Retailer

The retailer conceded liability for breach of implied warranty under section 14 of the Sale of Goods Act if the garments contained improper chemicals and caused the disease.

Liability of the Manufacturer

Lord Wright, delivering the judgment, applied the principle from Donoghue v Stevenson, quoting Lord Atkin’s formulation:

“A manufacturer of products, which he sells in such a form as to show that he intends them to reach the ultimate consumer in the form in which they left him with no reasonable possibility of intermediate examination, and with the knowledge that the absence of reasonable care in the preparation or putting up of the products will result in an injury to the consumer’s life or property, owes a duty to the consumer to take that reasonable care.”

The Court held that negligence in manufacture was established as a matter of inference from the existence of the defects. Lord Wright stated:

“The appellant is not required to lay his finger on the exact person in all the chain who was responsible or to specify what he did wrong. Negligence is found as a matter of inference from the existence of the defects taken in connection with all the known circumstances.”

The Court rejected the argument that Donoghue v Stevenson was distinguishable because the ginger beer bottle was sealed whereas the garments were not. Lord Wright explained:

“The decision in Donoghue’s case did not depend on the bottle being stoppered and sealed: the essential point in this regard was that the article should reach the consumer or user subject to the same defect as it had when it left the manufacturer.”

The Court also rejected the distinction between internal consumption and external application, noting that Lord Atkin had specifically included external applications such as ointments and soaps within the principle.

Implications

This case significantly extended the application of Donoghue v Stevenson beyond food and drink to manufactured goods generally. It established that:

• The manufacturer’s duty extends to products worn externally, not merely those consumed internally
• The requirement of “control” does not necessitate sealed packaging; it is sufficient that the product reaches the consumer in the same defective condition as when it left the manufacturer
• Negligence may be inferred from the existence of defects without identifying the specific individual at fault
• A claimant may pursue both contractual remedies against a retailer and tortious remedies against a manufacturer for the same damage

The decision confirmed that the tort of negligence operates independently of any contractual relationships in the supply chain, establishing an important precedent for product liability law.

Verdict: Appeal allowed. The judgment of the Chief Justice was restored against both respondents. The retailers were held liable for breach of implied warranty under the Sale of Goods Act, and the manufacturers were held liable in tort for negligence in manufacture. The appellant was awarded £2,450 and costs.

Source: Grant v Australian Knitting Mills [1935] UKPC 2 (21 October 1935)