Michael Nulty Deceased and Others v Milton Keynes Borough Council
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE EDWARDS-STUART,Mr Justice Edwards-Stuart |
| Judgment Date | 03 November 2011 |
| Neutral Citation | [2011] EWHC 2847 (TCC) |
| Docket Number | Case No: HT 09 273 & HT 09 474 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 03 November 2011 |
[2011] EWHC 2847 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Justice Edwards-stuart
Case No: HT 09 273 & HT 09 474
Mr Andrew Rigney QC (instructed by Clyde & Co) for the Claimant in action HT 09 273
Mr Graham Eklund QC and Mr Nigel Lewers (instructed by Berrymans Lace Mawer) for the Claimant in action HT 09 474
Hearing dates: 19–28 July 2011
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
These proceedings arise out of two fires that occurred on 2 and 3 April 2005 at a recycling centre near Milton Keynes ("the centre"), the second of which caused very substantial damage to the centre and its contents amounting to about £4.5 million. There was also a further small fire that broke out five days later, on 8 April 2005. The Claimant, the Milton Keynes Borough Council ("the Council"), owns the centre but sub-contracts its operation. There are two parallel actions. In the first action, the issues are what caused the first fire and whether the first fire caused the second fire. The only defendant against whom that action is continued is the First Defendant, Michael Nulty, a self employed electrical engineer.
The second set of proceedings has been brought by Mr Nulty's liability insurers, the National Insurance & Guarantee Corporation Ltd ("NIG"). The Council's case in the first action is that the first fire was caused by a cigarette end, carelessly discarded by Mr Nulty, but this is contested by NIG. In the second set of proceedings NIG contends that Mr Nulty was in breach of the requirement of his policy to give prompt notice of any circumstance likely to give rise to a claim and that, as a result, it has been seriously prejudiced in its ability to contest Mr Nulty's alleged liability for causing the first fire. I shall refer to this as the coverage dispute.
Unfortunately, Mr Nulty died in December 2010 and has therefore been unable to defend himself in these proceedings. Instead, the defence on his behalf has been effectively conducted by NIG even though it has its own separate claim against Mr Nulty. At a pre-trial review that was heard on 14 June 2011 it was ordered by Akenhead J that the trial of these actions should proceed in the absence of any person representing Mr Nulty's estate. I should explain at this point that the limit of indemnity in Mr Nulty's liability policy is £2 million and the Council's building insurers, who are bringing this claim by way of subrogation in the name of the Council, have made it clear that they will only seek to enforce any judgment obtained against Mr Nulty up to the limit of indemnity of £2 million and no further. Accordingly, Mr Nulty's estate is not exposed to any risk of enforcement against it.
In the first set of proceedings it is common ground that there are only three candidates for the cause of the first fire. First, a cigarette end carelessly discarded by someone smoking in the area where the fire started. Second, arcing from a live electric cable. Third, arson by an intruder. As I have said, the Council alleges that the fire was caused by the first of these, and that it was Mr Nulty who was to blame. NIG contends that if the fire was caused by a carelessly discarded cigarette, then it could equally well have been discarded by someone else. But its primary case is that the fire was caused by electrical arcing or, alternatively, by an intruder.
NIG contends further that the second fire had nothing whatever to do with the first fire, but was probably caused by an intruder. The relevance of the third fire, which was fairly minor, is that it is not really in issue that it was the result of a failure to extinguish the second fire properly. In these circumstances the Council contends that the second fire was caused in the same way. Whilst I refer to contentions made by NIG, I must make it clear at the outset that the burden of proving the cause of the fires is and remains throughout on the Council.
The centre has two balers. One is known as the commercial baler, and it processes paper and cardboard, the waste products of local businesses. The other is known as the domestic baler, and that processes tins and plastic from household waste in addition to paper and cardboard. Each machine has its own control panel beside it. Until 1996 there was a third baler, known as the small Boa baler. It was removed when a previous operator left the site, but the cable that supplied it was left in place and, worse still, at the time of the fires was not disconnected from the supply distribution board and was in fact live. It had been left coiled up beside the domestic baler and insulating tape, or something similar, had been put over the uninsulated ends of the conductors. No one knows why it was live at the time of the first fire. Two of the cores of the cable showed signs of arcing and the question is whether that arcing was the cause of the first fire or the result of it.
With this brief introduction I will now turn to the facts.
The main building and the electrical system
Before turning to the first fire, I should say a little more about the recycling plant itself. The recycling facilities at the centre were in one large building, which measured approximately 80 metres ( east-west) and 60 metres (north-south). It was divided into two main areas: the tipping area and the processing area. The tipping area was at a slightly lower level than the processing area, and within it was a separate part which dealt with plastics (the PLYSU area). These areas are shown in the plan attached to this judgment entitled Figure 1.
Most of the machinery was in the eastern half of the processing area, with direct mechanical access to it by means of conveyors from the tipping area. The principal means of pedestrian access to each area was by way of large roller shutter doors which gave on to the yard outside. Along the southern side of the processing area was the office block. The domestic and commercial balers were in the processing area. A person entering the processing area through the roller shutter doors would walk across an open space before reaching the area in which all the plant was situated. The domestic and commercial balers were at the southern end of the processing area and quite close to the low voltage switch room which was set into the office block, but the access to which was from the processing area. All this is shown on the more detailed plan attached to this judgment entitled Figure 2.
The main distribution board, which served the whole building, was in the PLYSU area. The supply to this came from a local substation. The low voltage switch room (marked "2" on Figure 2) contained two distribution boards: Distribution Board No1, and Distribution Board No 2. These distribution boards served, amongst other equipment, the domestic and commercial balers.
The first fire
On about 30 March 2005 the domestic baler developed a leak from a flange on the oil feed pipe to the hydraulic ram. An engineer was called in, but did not arrive until the morning of Saturday, 2 April 2005. But earlier that morning, at about 03:00 hours (I shall use the 24 hour clock throughout), there had been a power cut and the centre had no electricity. The shift workers who operated the equipment in the centre were sent home, because they could not carry on working in the dark, and the matter was reported to the Operations Manager, Mr Aylmer, at about 09:00 hours. He in turn called in the electricity supply company at about 10:10 hours, who sent an engineer or engineers to the site who arrived at about 11:45 hours, or shortly beforehand. The supply to the centre had been cut at the local substation close by. The electricians from the electricity company checked the various distribution boards in the centre and concluded that the cause of the power cut was a fault in the control panel of the commercial baler. Their records show that they left the centre at 13:05 hours and so the power must have been restored shortly before then (Mr Aylmer said in evidence that it was restored at "12 o'clock-ish": Day 2/131).
In the meantime, the repairs to the oil leak on the domestic baler had been completed by about 11:00 hours and the engineer then the left the site. Absorbent granules had been spread on the floor under and in the area around the domestic baler to soak up the oil. Owing to the poor light conditions as a result of the power cut, a forklift truck was brought up to the domestic baler and parked so that its headlights could be used to enable the engineer to see what he was doing.
An important consequence of the power cut was that the employees working on the overnight shift could not clear up the processing floor as they would usually have done during the last 30 minutes of the shift. Accordingly, after the evacuation following the power cut the centre was left in a very untidy state and there was waste scattered all over the floor. An added hazard in the area where the first fire started was the presence of the oil on the floor that had leaked from the domestic baler.
At the time of the fires Mr Michael Nulty was a smoker, and he said that he smoked some 10–15...
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