Nitrigin Éireann Teoranta and Another v Inco Alloys Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 31 October 1991 |
| Date | 31 October 1991 |
| Court | Queen's Bench Division |
Limitation of Action - Negligence - Accrual of cause of action - Piping supplied for chemical factory - Crack in pipe causing no damage repaired by makers - Subsequent crack causing explosion resulting in damage to property and shutdown of plant - Whether cause of action accruing at time of first crack - Whether claim statute-barred
The first defendants, specialist pipe makers, supplied the plaintiff chemical manufacturers with steel alloy tubing for a chemical factory in summer 1981. In July 1983 the plaintiffs found that the pipe had cracked. The plaintiffs were unable to discover the cause of the cracking but repaired the pipe by grinding out the crack. On 27 June 1984 the pipe again cracked and burst causing an explosion which damaged the structure of the plant around the pipe causing it to shut down. The plaintiffs issued a writ against the defendants on 21 June 1990 claiming damages for, inter alia, negligence including the cost of repairs to the plant, the cost of replacing the burst pipe and loss of profits resulting from the shut-down of the plant.
On the preliminary question whether the cause of action arose in July 1983 so that it was statute-barred or whether it did not arise until the explosion of 27 June 1984: —
Held, that, since the cracking to the pipe in 1983 had been a defect in the quality of the pipe itself which had not caused personal injury or damage to other property and since the relationship between the first defendants and the plaintiffs was not such as to give rise to a special duty of care, no cause of action had then arisen and the loss resulting from that cracking had been economic loss and irrecoverable in negligence; that, on the assumed facts, the first defendant's negligence had in 1984 caused physical damage to other property and a cause of action in negligence had first accrued when that physical damage occurred; and that, accordingly, the plaintiffs' claim was not statute-barred (post, pp. 503H–504A, 505B–C, H–506B, C).
The following cases are referred to in the judgment:
D. & F. Estates Ltd. v. Church Commissioners for England [
Department of the Environment v. Thomas Bates and Son Ltd. [
Donoghue v. Stevenson [
Greater Nottingham Co-operative Society Ltd. v. Cementation Piling and Foundations Ltd. [
Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [
Junior Books Ltd. v. Veitchi Co. Ltd. [
Ketteman v. Hansel Properties Ltd. [
London Congregational Union Inc. v. Harriss & Harriss [
Muirhead v. Industrial Tank Specialities Ltd. [
Murphy v. Brentwood District Council [
Pirelli General Cable Works Ltd. v. Oscar Faber & Partners [
Simaan General Contracting Co. v. Pilkington Glass Ltd. (No. 2) [
No additional cases were cited in argument.
PRELIMINARY ISSUE
By a writ issued on 21 June 1990, the plaintiffs, Nitrigin Eireann Teoranta (a body corporate) and Irish Fertiliser Industries Ltd., which were both limited companies incorporated in the Republic of Ireland, claimed as against the first and second defendants, Inco Alloys Ltd. (formerly Wiggins Alloys Ltd.) and Labho Realisations Ltd. (in liquidation), damages for breach of contract and negligence arising out of an explosion at the plaintiffs' chemical plant at Marino Point, Cobh, County Cork, Ireland on 27 June 1984. On 18 June 1991 Master Trench ordered the trial of a preliminary issue of law between the plaintiffs and the first defendants on the whether the plaintiffs' claim against the first defendants in negligence was statute-barred.
The facts are set out in the judgment.
James Watson for the plaintiffs.
Charles Harris Q.C. and Simon Wheatley for the first defendants.
The second defendants did not appear and were not represented.
31 October. MAY J. read the following judgment. These are preliminary issues of law ordered to be tried by order of Master Trench dated 18 June 1991 and the trial has proceeded upon assumed facts agreed between the parties for the purpose of the preliminary issues only. The issue as formulated in the master's order is simply whether the plaintiffs' claim against the first defendants in negligence is statute-barred. That formulation presupposes that, limitation apart, the plaintiffs do have a cause of action in negligence against the first defendants. It emerged during the hearing that one of the arguments advanced by the first defendants was that the plaintiffs do not have such a cause of action and further that the first defendants wished to reserve another argument that the plaintiffs do not have such a cause of action, the argument being based on the antecedent contractual relationship between the parties. Accordingly it was agreed that I should determine the issues which were in fact argued which became whether on the assumed facts (and the first defendants reserving their argument based on antecedent contractual relationship) the plaintiffs have a cause of action against the first defendants in negligence and if so whether it is statute-barred.
It is agreed that for the present purposes no distinction need be drawn between the first plaintiffs and the second plaintiffs: I will call them simply “the plaintiffs.”
The plaintiffs are an Irish chemical manufacturer who own and operate a chemical production plant at Marino Point, Cobh, County Cork, Ireland. Part of the plant is a primary reformer, which is essentially a furnace containing 10 rows of tubing, each consisting of three harps, through which a mixture of methane gas and steam is fed under conditions of high pressure and temperature. Each harp contains a header tube where the gases are collected. The first defendants, under their former name Wiggin Alloys Ltd., were a specialist manufacturer of steel alloy materials and they manufactured proprietary alloy tubing used to form the primary reformer harp assembly and in particular the header tube assemblies. The second defendants fabricated the primary reformer using the first defendants' materials in 1979 and fabricated replacement harps in 1981. The replacement tubing was manufactured in about May or June 1981 and was installed by the second defendants in about August or September 1981.
The alloy tubing used in 1981 was manufactured and supplied by the first defendants pursuant to a contract between themselves and the plaintiffs made in about March 1981. The statement of claim recites and relies on a number of express and implied terms of that contract. It is further alleged that the first defendants owed...
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