Commonwealth Smelting Ltd v Guardian Royal Exchange Assurance Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE ACKNER,LORD JUSTICE PARKER,LORD JUSTICE STEPHEN BROWN |
| Judgment Date | 26 November 1985 |
| Judgment citation (vLex) | [1985] EWCA Civ J1126-3 |
| Docket Number | 85/0762 |
| Court | Court of Appeal (Civil Division) |
| Date | 26 November 1985 |
[1985] EWCA Civ J1126-3
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
(Mr. Justice Staughton)
Royal Courts of Justice
Lord Justice Ackner
Lord Justice Stephen Brown
and
Lord Justice Parker
85/0762
MR. KENNETH STUART ROKISON, QC. and MR. ANGUS J.S. GLENNIE (instructed by Messrs Ince & Co.) appeared on behalf of the Appellants/Plaintiffs.
MR. EDWARD ANTHONY MACHIN, QC. and MR. PATRICK TWIGG (instructed by Messrs Herbert Smith & Co.) appeared on behalf of the Respondents/Defendants.
I will ask Lord Justice Parker to be kind enough to give the first judgment.
The plaintiffs/appellants, Commonwealth Smelting Limited, operate a smelting works at Avonmouth, near Bristol. The works include a blower house. The blower house contains machinery designed to provide a supply of air under pressure to be blown into furnaces elsewhere.
So far as relevant for present purposes, the machinery consisted in a large and heavy impeller within a cast iron casing. The impeller was driven through a gearbox by a motor. The casing was of a minimum thickness of 14 millimetres. The impeller, when working, was driven at a speed of 6,717 revolutions per minute.
At about 11.35 pm. on 11th August 1981 something happened, as a result of which the blower was completely destroyed.
At page 5 of his judgment the learned judge, Mr. Justice Staughton, said this:
"The impeller and casing of the blower were broken into a number of pieces of varying size. There were large holes in the cavity walls of the blower house where metal fragments had struck and broken through the inner brick layer. Smaller fragments of flying metal had caused holes in the plastic external sheeting of cooling towers some 57 yards away. The wooden doors of the blower house were splintered and broken but showed no sign of distortion. Their wooden boards were broken as a result of impact with rapidly moving objects. Two of the doors were wholly displaced from the wall of the building. The shaft and large fragments of the impeller were found on the floor of the blower house."
The material damage done is agreed between the parties to have amounted to some £68,874, and as a result of the material damage, the plaintiffs' business was interrupted, causing them consequential loss which is agreed to have amounted to £1,848,267.
All but a very small part of that damage consisted in the destruction of the blower casing and the impeller and the consequential damage was caused, if not entirely, almost entirely by the delay which was necessary whilst the casing of the blower was replaced, for it had to be manufactured. The impeller caused no delay, for the plaintiffs held a spare.
The plaintiffs were insured under two policies of insurance. One covered damage to buildings, machinery, plant and other contents by fire, lightning, or explosion, The other covered consequential loss in the event of destruction of, or damage to, any building or other property used by the plaintiffs for the purpose of business by fire, lightning, or explosion. The defendants were the leading underwriters under both policies, their proportions varying slightly, but being in the order of 25 percent.
It is common ground that if the plaintiffs are entitled to recover under the material damage policy, they are also entitled to recover under the consequential loss policy.
The plaintiffs contend that the damage was caused by "explosion". If they are right, they are entitled to recover; if they are not right, they are not so entitled. On 31st July 1984 Mr. Justice Staughton held that they were not entitled to recover and they now appeal.
So far as the material damage policy is concerned, the primary risks are described as being—
"(1) Fire…..
(2) Lightning;
(3) Explosion, not occasioned by or happening through any of the perils specified in 1(b) above,
(i) of boilers used for domestic purposes only,
(ii) in a building not being part of any gas works, of gas used for domestic purposes or used for lighting or heating the building"
The plaintiffs do not claim under the primary risks. There was, however, an extension in special clause No. 10, which reads as follows:
"(10) In consideration of the payment of an additional premium, the Insurance under this Policy shall, subject to the Special Conditions hereinafter contained, extend to include:
Destruction or damage (by Fire or otherwise) of or to the property insured directly caused by:
1 Explosion, but excluding
(a) destruction or damage (other than destruction or damage by Fire resulting from explosion) occasioned by the bursting of a boiler (not being a boiler used for domestic purposes only), economiser or other vessel, machine or apparatus in which internal pressure is due to steam only and belonging to or under the control of the Insured."
There was also an exclusion (b) which appeared in the policy, which read as follows:
(b) damage to or destruction of vessels, machinery or apparatus or their contents resulting from the explosion thereof."
That exclusion, however, appeared in the policy due to an error, and it is agreed that it should have been omitted.
It is unnecessary to read any further provisions of the policy.
The witnesses who saw the accident described it in terms which are set out by the learned judge at page 4 of his judgment:
"In the night of 11th August, 1981, Mr. Adams and Mr. Westlake were working on process operation in the complex, not far from the blower house. Mr. Westlake described events as follows: 'I seen a big explosion and the doors blown out and a big cloud of fire and smoke. I seen the doors blown out first, then I heard the very loud bang.' Mr. Adams was not in a position to see the blower house, but he too heard a loud bang which he described as an explosion; then he could see the doors of the blower house on fire."
The learned judge apparently did not rely on the eye-witness accounts and, for my part, I consider he was right to take the course that he did.
It is perfectly plain that, to an outside observer, something may appear to be an explosion which is not an explosion at all, when one knows the full facts. It might be, for example, that in a particular building there was a very serious collapse of a gantry, which resulted in the doors of a building flying out and a loud bang. Nobody would describe that as being an explosion if they knew the full facts, but to an observer seeing the doors fly out and hearing the bang, it may well appear that the whole thing had been due to an explosion of some sort.
The judge rightly investigated what had happened. I do not find it necessary to read the account which he gave. It is accepted as being accurate. Reduced to its essentials, it amounts to this. A fatigue crack in the impeller assembly resulted in that assembly breaking up very rapidly into pieces. Those pieces, owing to the centrifugal force developed by the speed of rotation of the propeller, flew off and struck the casing. Even a small piece weighing as little as 200 grammes was sufficient to shatter the casing on first impact. The judge found, and there is no challenge to it, that the air pressure within the casing played no significant part in the sudden shattering of the casing owing to the impact of the first piece of the impeller which struck it.
The casing and the impeller having been destroyed, the air under pressure within the casing was suddenly released and both this air pressure and the fragments played their part in causing damage to the boiler house and elsewhere. The part played by the air pressure was small, compared with the part played by the flying fragments which were impelled by centrifugal force for very considerable distances.
The judge having been through various dictionary meanings of the word "explosion", to which I will return, dealt with the ultimate question very shortly. At page 9 of his judgment he said this:
"It is apparent that the word "explosion" may have different shades of meaning according to its context. Thus Mr. Adams and Mr. Westlake both perceived an explosion. It seems to me that they used the word correctly for the purpose of relating to others or to the court what they saw and heard that night. They were using it in the sense of Oxford English Dictionary meaning (2) or Wild meaning (1). But I am concerned with the meaning of the word as one of the perils covered by a policy of insurance. In that context it is proper to pay more attention to the cause of a particular event than to what it looks or sounds like to an observer some yards away. The perils in a policy of insurance are, after all, an attempt to define certain causes of loss....
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