United Central Bakeries Limited V. Spooner Industries Limited &c
| Jurisdiction | Scotland |
| Judge | Lord Hodge |
| Neutral Citation | [2012] CSOH 111 |
| Court | Court of Session |
| Published date | 29 June 2012 |
| Year | 2012 |
| Date | 29 June 2012 |
| Docket Number | CA20/12 |
| OUTER HOUSE, COURT OF SESSION [2012] CSOH 111 | |
| CA20/12 | OPINION OF LORD HODGE in the cause UNITED CENTRAL BAKERIES LIMITED Pursuer; against SPOONER INDUSTRIES LIMITED AND FORBO SIEGLING (UK) LIMITED Defender: ________________ |
Pursuer: A. Clark QC; D Sheldon; Ledingham Chalmers LLP
First Defender: A Young QC; DLA Piper Scotland LLP
Second Defender: G. Clarke QC; M. McGregor: Simpson & Marwick LLP
29 June 2012
[1] The pursuer, United Central Bakeries Ltd ("UCB") operates an industrial bakery at Whitehill Industrial Estate, Bathgate. It bakes naan bread and other products. Dough is sprayed with rapeseed oil before being cooked in an oven at about 450° C. A conveyor belt takes the portions of dough into and through the oven and removes the cooked naan bread from the other side of the oven. Individual portions of naan bread sometimes catch fire during the cooking process and emerge from the oven on fire.
[2] UCB suffered a fire in the naan bread oven in 2001 and, advised by consulting engineers, installed a fire suppression system. In order to reduce wastage, in 2003 UCB engaged Spooner Industries Limited ("Spooner") to design, supply and fit a helical conveyor, known as a heliveyor, to transport cooked naan breads after they had come from the oven to an attic area in the factory from where they were sent to a packing area. UCB avers that Spooner was a specialist supplier of ovens, process controls and other technical services to the baking industry.
[3] In May and June 2003 UCB and Spooner entered into a contract for the supply and installation of the heliveyor. UCB avers that it was a contract to which either the Supply of Goods and Services Act 1982 or the Sale of Goods Act 1979 applied. Spooner supplied a twin-track heliveyor which was installed in the factory in August 2003. The belts of the heliveyor were made of "Ultraform" which was Polyacetal-POM (Polyoxymethyline) and was described in the manufacturer's data sheet as "highly crystalline thermoplastics".
[4] In December 2003 a fire broke out on the naan bread production line and the Ultraform belting caught fire. The tracks of the heliveyor were damaged but UCB's employees extinguished the fire before it caused further damage to the factory. The inner track was repaired with belting from the outer track. Spooner obtained replacement belting from Forbo Seigling (UK) Ltd ("Forbo") and the new belting was installed in the outer track of the heliveyor in January 2004.
[5] As more fully set out below, UCB avers that it was concerned that burning naan bread had caused the belting of the heliveyor to catch fire and it sought reassurance from Spooner and from Forbo that the belting was suitable for purpose.
[6] In November 2006 burning naan bread caused a fire to break out on the naan bread production line by igniting the belting material on the inner track of the heliveyor. The fire spread and destroyed part of the factory. UCB had to rebuild that part of the factory and replace or repair machinery. It suffered loss through the interruption of its business. It claims damages of £6,788,556 from Spooner and Forbo.
[7] This action arises out of the initial contract for the supply of the heliveyor and the later contract which UCB entered into with Spooner for the supply of replacement belting for the heliveyor after the fire in December 2003. The principal contractual claims against Spooner are to be the subject of a proof. The defenders in a debate sought to exclude from probation (a) UCB's case against them in delict which concerned alleged negligent misrepresentation in the context of the supply of the replacement belting and (b) averments about a collateral warranty.
The averments of misrepresentation
[8] The focus of the claim of misrepresentation is on statements made by Mr Sandy Grieve of Spooner in an email dated 22 June 2004 and by Mr Dennis Jackson of Forbo in a letter of 30 June 2004. The messages are set out in paragraphs [14] and [17] respectively. But, as Mr Alastair Clark QC for UCB submitted, it is necessary to see those statements in the context of the earlier communications between the parties. UCB avers that before and after the delivery of the replacement belting it raised with Spooner and Forbo the question of whether the correct material had been used for the belt and its concern that the belt would ignite on contact with burning naan bread. In particular UCB refers to the following communications.
[9] On 17 January 2004 Mr Steven Jeffrey, an engineer employed by UCB, sent to Mr Grieve, the chief engineer of Spooner's food division, an email which he copied to Mr Archy Cunningham, the Group Managing Director of UCB, in these terms:
"Sandy I have left numerous messages on your mobile phone mailbox as well as sent three e-mails just before Christmas that you have not replied to any, this is somewhat disappointing to say the least. I want someone from Spooner on site A.S.A.P. to help with answer the question, what cause the fire at the Heliveyor. I also want the material specification on the belting."
[10] On 19 January 2004 Mr Grieve replied as follows:
"I am somewhat surprised at your comments given that I've tried to be in touch and then been in constant communication with Archie up to the belt delivery last week.
I thought that I had provided top drawer free services to enable "trade price" supply of the spare belt and pushed delivery when it seemed to have stalled.
I further understood that you were getting the full specification of the belt from Dennis. [I'll get the full specification to you today].
When we last spoke I advised that there was no means for the Heliveyor to ignite itself with the only energy at the drive motor [which] is mounted outboard of the frame/belt.
It seemed to me then that the most likely cause was flaming debris from the Oven.
I will arrange to visit site to discuss next week."
Mr Dennis Jackson visited UCB's factory on 20 January 2004.
[11] Mr Jeffrey of UCB sent an email on 21 January to Mr Grieve of Spooner and copied it to Mr Cunningham. He stated:
"Sandy to enable us to install the C.I.P. system to the heliveyor can you tell me the flow rate of water required to clean the belting and at what temp the water should be to clean effectively.
Stevie
PS I had a visit from Dennis Jackson yesterday to review the belting and to check on delivery of the replacement belt, which arrived Monday morning."
[12] On 28 January 2004 Mr Jeffrey reported a test which UCB had carried out, using a blow torch to ignite a piece of the new belting. In an email to Mr Jackson of Forbo, which he copied to Mr Grieve of Spooner and to Mr Cunningham, he stated:
"Dennis thank you for the free samples of modular belting (re: our Heliveyor belting), we conducted the same test on the brand new belt as we did the belt that had bee[n] on line during the fire. We found that when we set the belt on fire deliberately the belt continued to stay lit, furthermore it intensified sending the section of belt up completely. We have a sample of modular belting that I sho[we]d you when your were on site from a another supplier that we conducted the same trials with and this belt seem to self extinguish."
[13] On about 26 February Mr Grieve visited UCB's factory to meet Mr Cunningham and Mr Jeffrey. On the same day Mr Cunningham sent Mr Grieve another copy of the email which I have set out in paragraph [12] above. On 1 March Mr Grieve sent an email to Mr Jackson of Forbo in these terms:
"Dennis,
I visited Archy last Thursday regarding a new enquiry and was surprised to learn that U.C.B. are still unhappy and or uncertain regarding your technical explanation about the belt fire they had before Christmas.
They are concerned that the new belt will catch fire if burning product travels on it from the oven.
They insist that the fire was probably caused with burning bread after it had already passed over the plastic bends leading to the heliveyor.
[THE PLASTIC BELT ON THE BENDS DID NOT CATCH FIRE !!]
From the technical specification and our various discussions I was certain that burning bread was highly unlikely to ignite the plastic modules.
Having visited Stevie/Archy and been advised of their "combustion trial" what are your thoughts? What do your technical guru's think?
Archy is a very important client who has a vast network of up and coming decision makers.
It is important to me that I advise him correctly."
[14] There is then a gap in the email exchanges until June 2004 when there was a flurry of messages. On 22 June at 17.23 hours Mr Jeffrey of UCB emailed Mr Grieve of Spooner stating that UCB had "still heard nothing with regards to the fire on the heliveyor last December 23rd." At 17.48 hours on the same day Mr Grieve replied to Mr Jeffrey and copied his message to Mr Jackson of Forbo. He stated:
"Dennis Jackson had his technical people look into the fire and I am sure they concluded that the correct materials were used.
The belt should be impossible to set fire to with burning naan bread and the belt itself is unable to feed any fire which may start from, say Oven components!
However Dennis did say that he would "close-off" this incident through his Scottish agents.
We can be available to call-in with Dennis if that moves things forward.
Has our spray bar been fitted?
Is it able to control products/fat building-up?"
[15] That elicited the following response on 23 June from Mr Jeffrey to Mr Grieve of Spooner and Mr Cunningham of UCB, which was copied to Mr Jackson of Forbo:
"Sandy, can Dennis explain how when we place a naked flame next to his belt it goes up and also the fire intensifies, while when we done the same test on our white modular belt, the fire self extinguished [?] ..."
[16] Mr Cunningham of UCB then intervened at 10.54 hours on the same day by sending the following message to Mr Jeffrey and Mr Grieve, which he copied to Mr Jackson:
"Am not really happy with the...
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