iPad 2 screen cracked by "Smart Case"?

My wife has an iPad 2 going on 3 years old now. At christmas she recieved a new Smart Case (old worn out). Yesterday the iPad was fine in the morning, sat by the bedside all day and when she went to use it in the evening its screen had cracked.

There are liner cracks along the black boarder of the screen where the "Smart Case" strikes the screen as it closes. It makes me wonder if the "Smart Case" caused the damage when she closed it in the morning.

Has anyone had a similar problem?

Any suggestions on how to approach Apple about this issue? (complicated by living in Australia nowhere near an Apple store)