Britvic Soft Drinks Ltd v Messer UK Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Mance,Mr Justice Neuberger,Lord Justice Thorpe |
| Judgment Date | 30 April 2002 |
| Neutral Citation | [2002] EWCA Civ 548 |
| Docket Number | Case No: A3/2001/1385 |
| Court | Court of Appeal (Civil Division) |
| Date | 30 April 2002 |
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QUEEN'S BENCH
DIVISION (COMMERCIAL COURT)
(TOMLINSON J.)
Lord Justice Thorpe
Lord Justice Mance and
Mr Justice Neuberger
Case No: A3/2001/1385
Andrew Prynne QC, Charles Gibson QC & Geraint Webb (instructed by Messrs Eversheds) for the Appellants
John McCaughran (instructed by Messrs Nicholson Graham & Jones) for the Respondents
Introduction
This appeal now relates to very limited parts of a judgment which was handed down by Tomlinson J on 9th May 2001 and extends to 130 pages.
The litigation arises from the discovery in May 1998 that carbon dioxide being produced at the Severnside, Bristol chemical plant operated by Terra Nitrogen (UK) Limited ("Terra") contained trace levels of benzene. It was subsequently ascertained that the cause was a leak, which had enabled natural gas, containing benzene, to by-pass the reforming section of the plant where it would normally have been removed. Benzene in sufficiently high quantities is a carcinogen.
In the months prior to the discovery, Terra had supplied quantities of carbon dioxide, contaminated in this way with benzene, to Messer UK Limited. Messer had in turn sold it on to a variety of end users, including the four respondents, Britvic Soft Drinks ("Britvic"), Bass Brewers Limited ("Bass"), Thomas Hardy Packaging Limited ("THP") and to Brothers Drinks Company Limited ("Brothers") who had used it in the manufacture of sparkling drinks. These as a result contained traces of benzene, although not in quantities that could pose any risk to health. Considerable publicity was nonetheless given to the discovery. The travails of Perrier, following somewhat similar contamination of its product by carbon dioxide in 1990, were well-known, and the claimants had to allay public concern regarding contamination and to protect its business by withdrawing from wholesalers quantities of the drinks which had been manufactured and remained unsold. The present claim was brought to recover loss thereby suffered.
The judge found that the only relevant express term of the supplies to Britvic and Bass was that the carbon dioxide would conform with British Standard 4105 ("BS 4105"). He held that, both under the terms of BS 4105 and under terms to be implied by virtue of s. 14 of the sale of Goods Act 1979, Britvic and Bass were entitled to recover damages from Messer in respect of such supplies in the amounts of respectively, £2,077,195 and £80,500. The appeal which was brought with the judge's permission against that conclusion has now been abandoned. But the appellants continue to argue, for reasons which will appear, that the judge was wrong to rely on the terms of BS 4105 as containing any undertaking relevant to the presence of benzene.
I turn next to the supplies made by Messer to THP and Brothers. Any claims which THP and Brothers have against Messer arising out of these supplies have been assigned by THP to Bass. The judge held that Bass was in this capacity entitled to recover a further £34,500 from Messer. The correctness of the judge's conclusion in that regard is the remaining issue on this appeal. It is however of considerable significance for other proceedings, including those between Barcardi-Martini Limited, THP, Messer and Terra [2002] EWCA Civ 549 the appeal in which was argued before us immediately after the present.
Messer's supplies to THP and Brothers were made under the terms of two contracts in, for present purposes, materially identical terms. The first contract was signed with Brothers on 30th January 1997, the second with THP on 13 th May 1997. The contract with Brothers covered an estimated annual requirement of 220 tonnes for a minimum of five years. The contract with THP provided for THP to order and Messer to supply a minimum of 750 tonnes and of five years. Each contract was on Messer's standard terms providing, inter alia, as follows:
"Definitions
In this contract:
2.3 'Equipment' means storage vessel(s) together with associated vaporising and/or other Equipment, which is supplied to the Customer by Messer under a separate Contract agreement.
2.4 'Standard' means Messer's industrial grade specifications for the Gas.
2.5 'Delivery Point' means the place at the Premises at which the Gas leaves the flexible hose connected to the Messer road or rail tanker which is used to transfer the Gas into the Equipment.
….
8.3 Messer shall deliver the Gas by discharging it into the Equipment or such other storage vessels as have been agreed by Messer to be both safe and suitable for the storage of Gas. The risk but not the property of the Gas shall pass to the Customer on delivery to the Delivery Point. Subject to Clause 2.0 of Messer's Conditions of Sale the property of the Gas shall pass to the Customer on payment in full of the Contract price.
8.4 Messer will measure the quantities delivered by the method it customarily uses for the type of delivery made. Messer's delivery of the Gas into the Equipment at the Customer's Premises will constitute the Customer's purchase thereof
…..
8.7 The Customer will:
8.7.1 determine the suitability, compatibility and proper use of the Gas supplied by Messer;
8.7.2 have the right, in order to verify compliance of any Gas delivered, to obtain and install devices on the Customer's distribution system in order to sample such Gas prior to use.,
8.7.3 monitor the inventory of the Gas in the Equipment and shall regularly advise Messer of the level thereof The Customer shall order the Gas from Messer in sufficient time to permit delivery prior to effective exhaustion of such inventory;
11.0 Warranty
11.1 Messer warrants that the purity of the Gas is not less than that laid down in the Standard. All other implied warranties and conditions as to quality or description are excluded except to the extent that such exclusion is prevented by law.
11.2 It is the Customer's responsibility to satisfy itself that the Gas is suitable for the purpose for which the Customer intends to use it. Recommendations relating to the use of the Gas made by Messer, in writing or otherwise, are given in good faith but no warranty is given as to the suitability of the Gas for any particular purpose.
12.0 Limitation of Liability
12.1. Subject to any other limitation or exclusion of liability expressed elsewhere in this Contract, the liability of Messer, its employees and Agents to the Customer in respect of personal injury or direct physical damage to property (and losses, costs and expenses directly arising ftom such injury or damage), whether through negligence or otherwise, shall be limited to £500,000 in respect of any one incident, except that nothing in this Contract shall restrict Messer's liability to an injured person or his personal representatives for personal injury or death resulting from negligence.
12.2 Messer, its employees and Agents shall have no liability whatsoever in respect of losses, costs or expenses of a purely financial or economic nature (including, but not limited to, loss of profits, loss of use or other consequential loss), or any other loss or damage not covered in Clause 12. 1, unless such loss, cost, expense or damage be caused by Messer supplying Gas that is not of the purity warranted or by failure to deliver or by late delivery of Gas by Messer and unless such defective or late delivery or failure to deliver is notified within five days of the delivery or failure to deliver is notified within five days of the delivery or intended delivery, in which case Messer's liability shall be limited to the value of the quantity of Gas concerned (at Messer's selling price)."
Messer's industrial grade specification for the gas provided as follows:
"1. PURCHASE SPECIFICATION
1. A solution of the gas in water shall be free of any objectionable taste or odour.
….
4. Hydrocarbons (as CH) 10ppm by volume
2. SALES SPECFICATION
The product complies with BS 4105: 1990 and BS 6535
The product meets the requirements of the Miscellaneous Food Additives Regulations SI 3187 wherein it is referred to as "E290"."
A summary of the specific requirements of BS 4105 followed.
BS 4105 (as it was formulated at the relevant time) consisted of a foreword, a general section 1, followed in sections 2 and 3 by descriptions and specifications of particular constituent elements for carbon dioxide types 1 and 2, then by appendices dealing with sampling and methods for determination of the amount of such particular elements, and finally by figures showing such methods or the equipment used. Section 1 provides as follows:
"Section 1. General
1. Scope
This British Standard specifies two types of carbon dioxide for industrial use. Type 1 is suitable for industrial non-food applications, e.g. purging, inerting, life raft inflation. Type 2 is a higher quality grade which is also suitable for industrial food applications, e.g. beverages, gas packaging, food freezing and chilling.
Note 1. Type 2 carbon dioxide is covered by the specific and general criteria of purity laid down in The Miscellaneous Additives in Food Regulations 1980 ( SI 1980 No. 1834) in which carbon dioxide is referred to as E290.
This standard does not apply to carbon dioxide for:
(a) medical use, for which a specification is included in the British Pharmacopoeia.,
(b) fire fighting, for which BS 6535: Part 1 applies;
(c) welding.
Note 2. Throughout this standard, concentrations expressed by mass or volume are at a temperature of 20'C and 101.3 kPa 1 press...
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