Howmet Ltd v 1) Economy Devices Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Mr. Justice Edwards-Stuart |
| Judgment Date | 28 November 2014 |
| Neutral Citation | [2014] EWHC 3933 (TCC) |
| Docket Number | Case No: HT-113-66 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 28 November 2014 |
[2014] EWHC 3933 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Rolls Building, 7 Rolls Buildings
London EC4A 1NL
Mr. Justice Edwards-Stuart
Case No: HT-113-66
Ben Quiney Esq, QC &James Sharpe Esq (instructed by Reynolds Porter Chamberlain LLP) for the Claimant
Andrew Bartlett Esq, QC &Alexander Antelme Esq, QC (instructed by Weightmans) for the First Defendant
Hearing dates: 23 rd– 26 th June 2014; 30 th June 2014 – 2 nd July 2014; and 10 th July 2014
Introduction
1. On 12 February 2007 there was a disastrous fire at the Claimant's factory in Exeter. The Claimant ("Howmet") says that it was caused by the failure of a probe that was supposed to detect a loss of liquid in a hot water tank. As a result of the combination of some rather unusual events the heater to the tank was switched on at a time when the tank was virtually empty. The probe, being out of the water, should have isolated the heating units in the tank. It failed to do so and so the heaters overheated and set fire to the tank, and the fire quickly spread to the factory. It caused losses in excess of £20 million.
2. The First Defendant, Economy Devices Ltd ("EDL"), was the manufacturer of the probe. The Second Defendant, Electrochemical Supplies Ltd ("ECS"), was engaged to design, supply and install a new grain etch line ("GEL"), which included the tank that caught fire. The Third Defendant, MJD Technologies Ltd ("MJD"), purchased the probe from EDL and installed it as part of a subcontract with ECS for the electrical system for the new GEL. MJD is now dormant and has neither assets nor insurance. It has not served a Defence and has effectively played no part in the litigation. Howmet has now settled its claim against ECS and so the trial was confined to the issues between Howmet and EDL.
3. Howmet claims that the probe, known as a Therm O Level ("thermolevel"), was negligently designed with the result that it was unreliable in service and, in any event, was not a failsafe device. It complains also about the brochure produced by EDL which, it says, contained misleading information as to the qualities of the product.
4. EDL denies liability. It contends that the losses sustained by Howmet were not within the scope of any duty owed by EDL, that the fire was caused by acts of Howmet which broke the chain of causation and that there was nothing wrong with what it says was a simple and relatively low grade product. In the alternative, it relies on the defence of contributory negligence.
5. In addition, EDL puts Howmet to proof of the cause of the fire, which it says is far from self-evident.
6. In a more general way EDL asserts that this is a David and Goliath situation. Howmet is part of the very substantial Alcoa group, and itself had a turnover in excess of $100 million in 2005. EDL, by contrast, is said to have been a three person company — one director, his wife (as company secretary) and a technician — which had a turnover at the time of the fire of less than £50,000. It is said that over about 25 years it had sold about 5000 thermolevels without ever having received a substantiated claim. Since, in the event, EDL called no evidence 1 none of this has been proved. On the other hand, EDL's history as a company has not been disputed, although the extent to which it had received complaints about the performance of thermolevels is in issue.
7. EDL says, in effect, that it is against reason to hold the supplier of a low level device responsible for enormous losses that result from the device being used in a situation and under conditions over which the supplier has neither knowledge nor control: all the more so, submits EDL, when the end user is a sophisticated organisation that is well able to satisfy itself of the suitability of the device for the purpose for which it proposes to use it.
8. In the context of this case the expression "failsafe" is used in its engineering sense, that is to say that it describes a safety device which, in the event of its own failure or maloperation, leaves the system it serves in a safe or deactivated condition.
9. Howmet was represented by Mr. Ben Quiney QC and Mr. James Sharpe, instructed by Reynolds Porter Chamberlain. EDL was represented by Mr. Andrew Bartlett QC and Mr. Alexander Antelme QC, instructed by Weightmans
The operation of the grain etch line ("GEL")
10. Howmet produces metal castings for use in the aerospace and other precision component markets. The castings are produced using the lost wax process which it is not necessary to describe for the purposes of this judgment. When the casting has been produced it is taken to the GEL. The GEL consists of several polypropylene tanks, each measuring 1450 mm x 700 mm x 600 mm (deep). The castings are lowered into the tanks by a mechanical hoist. The casting is first dipped in ferric acid, heated to 80°C. It is then washed in tanks containing hot and cold water. This process causes the grain of the casting to be exposed which enables the operators to check that it has been produced to the correct specification.
11. Four of the tanks in the line are heated by one or more heating units within the tank. The probe of the thermolevel is suspended vertically in the tank and is connected to a control box. That in turn is wired back to a control panel. The thermolevel has two functions: first, to measure the temperature of the liquid and, second, to detect a drop in level of the liquid below which the heater will be exposed and consequently liable to overheat.
12. As originally designed, the control box (or unit) of the thermolevel was connected only to the heater controls so that the heater would be turned off if the level of liquid in the tank fell below a certain point. However, it appears that the wiring in the control box was modified by the addition of alarm circuits which led back to the main control panel. This modification was presumably made by MJD.
13. The polypropylene tanks are combustible and so if a heater overheats there is a risk that it will set fire to the tank. Initially, the thermolevel was the only device to protect the heaters from overheating. As the evidence in this case demonstrates the thermolevel manufactured by EDL was not a failsafe device.
The background to the claim
14. By early 2005 Howmet had concerns about the safety of its existing grain etch line. A Request for Authorisation that was produced in about May 2005 described the current condition of the line in the following terms:
"The current etching line is 20 years old and requires full chemical resistant Personal Protective Equipment to be worn during operation. Due to the aggressive environment causing corrosion, excessive periods of maintenance are required with increasing failure costs.
The corrosion is such that there is the risk of a potential collapse of the tanks which would lead to an EHS incident. This could also result in the loss of at least 4 weeks production, due to manufacturing lead time. The loss in sales if such an incident was to occur would be approximately $10M."
15. The Request for Authorisation was circulated to certain members of Howmet's senior and middle management for their approval. These included two of the witnesses in the case, Mr. Simon Farrimond and Mr. Damon Gill. A table appended to the document identified the areas of importance, under each of which was listed a number of relevant features. Against each of these, under the column headed "Concept Phase", there was an X to indicate whether the particular feature was included in the proposal or not. One feature was whether or not controls had been designed to be failsafe, to which the response was "Yes".
16. If the Request for Authorisation resulted in the production of a specification for the new GEL, that document has either not survived or has not been disclosed. There is no evidence that a specification existed. In any event, Howmet decided to approach three contractors for their proposals and eventually chose ECS.
17. EDL sought to make much at the trial of various statements to the effect that the old grain etch line was unsafe. I think that this was reading too much into what was said. The position, as I find it to have been and as I explain in more detail below, was that the line was not safe for operators unless they were wearing suitable protective clothing. This was because the tanks were not entirely stable and there was a time when the structure was unsafe and had to be repaired. Clearly the line was in need of replacement, but I reject any criticism of Howmet's continued use of it prior to the installation of the new GEL.
The evidence at the trial
18. Although Howmet called a number of witnesses, many of its employees who were involved in the relevant events were not called, either because they could no longer be traced or because it was thought unnecessary and/or disproportionate to call them. EDL complained about Howmet's failure to call several witnesses who EDL alleged could have given evidence that would have been very relevant to the events leading up to the fire in February 2007: in particular, Mr. Darke, Mr. Palfrey and Mr. Moxey all of whom still worked for Howmet (or for its parent, Alcoa), or were thought to do so. Another was a Mr. Hunt: although he no longer worked for Alcoa, at least one other witness (Mr. Gill) was able to contact him.
19. For reasons that will become apparent in this judgment, I consider that there is some force in this. Since the burden of proof is on the party which has a case to prove, it must call the evidence that it requires in order to...
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Howmet Ltd v Economy Devices Ltd and Others
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...I of the 1987 Act as the loss claimed related to commercial property. This was also the case in Howmet Ltd v Economy Devices Ltd [2014] EWHC 3933 (TCC) (upheld on appeal at [2016] EWCA Civ 847 (dangerous electric fire-safety probe)), which was unsuccessful on the facts, and Goodlife Foods......
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Litigation
...189 at [96]–[100], per Burrell J; Robinson v Kenny [2014] FCA 988 at [110]–[115], per Farrell J; Howmet Ltd v Economy Devices Ltd [2014] EWHC 3933 (TCC) at [19], per Edwards-Stuart J (airmed: [2016] EWCA Civ 847); UGL Rail Pty Ltd v Wilkinson Murray Pty Ltd [2014] NSWSC 1959 at [53], per Ba......
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Contract terms
...1158 at [43], per Tomlinson LJ. 527 Lambert v Lewis [1982] AC 225 at 276, per Lord Diplock. See also Howmet Ltd v Economy Devices Ltd [2014] EWHC 3933 (TCC) at [274]–[275], per Edwards-Stuart J (airmed: [2016] EWCa Civ 847). 528 But not under the law of nSW, where the implied warranty or qu......
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Statutory regulation of work
...regulation 4(1). 228 Construction Products Regulations 2013 (SI 2013/1387) regulation 5. 229 Howmet Ltd v Economy Devices Ltd [2014] EWHC 3933 (TCC) at [214]–[216], per Edwards-Stuart J (airmed: [2016] EWCA Civ 847). 230 Being Directive No 85/374/EEC. See also Capper, “Developments in liabi......