United Central Bakeries Limited V. Spooner Industries Limited+forbo Siegling (uk) Limited
| Jurisdiction | Scotland |
| Judge | Lord Hodge |
| Neutral Citation | [2013] CSOH 150 |
| Court | Court of Session |
| Docket Number | CA20/12 |
| Date | 05 September 2013 |
| Published date | 05 September 2013 |
| OUTER HOUSE, COURT OF SESSION | |
| [2013] CSOH 150 | |
| CA20/12 | OPINION OF LORD HODGE in the cause UNITED CENTRAL BAKERIES LIMITED Pursuers; against SPOONER INDUSTRIES LIMITED and FORBO SIEGLING (UK) LIMITED Defenders: ________________ |
Pursuers: A Clark, QC, Sheldon; Ledingham Chalmers LLP
Defenders: A Young, QC, Saunders; DLA Piper Scotland LLP
Second defenders: G Clarke, QC; Simpson & Marwick LLP
5 September 2013
[1] The pursuer ("UCB") is an industrial baker. It owns a factory at Whitehill industrial estate, Bathgate. Late at night on 31 October 2006 a serious fire occurred and destroyed about one-third of the factory. UCB's insurers paid out £6,788,556. The fire started on an item of equipment called a "heliveyor" which I describe below. UCB's insurers in a subrogated claim seek to recover that sum from (i) the manufacturers and sellers of heliveyor ("Spooner") and (ii) the sellers of plastic belting used on the heliveyor ("Siegling"). The belting was produced by an associated company and Siegling marketed and sold the belting in the United Kingdom.
[2] There was no dispute as to the most likely cause of fire. I had the benefit of the expert evidence of Dr Christopher Wareham and Mr Lee Masson. They agreed that the fire was probably caused by small burning pieces of naan bread, which had been trapped in the travelling oven and had caught fire before exiting the oven. The burning piece or pieces had lodged in a gap or gaps between the plastic modules of the heliveyor where they had heated the adjacent modules sufficiently to cause them to melt and ignite. Naan bread debris and oil residue on the heliveyor may have assisted the spread of the fire on the belt but were not a significant cause of the fire.
[3] The defenders, with the benefit of hindsight, did not dispute that the type of plastic belting which had been used on the heliveyor was not suitable to convey the hot naan breads shortly after they came out of the oven because of their propensity to catch fire in the oven. But that concession does not of itself provide an answer to the question whether either of the defenders is liable for the damage caused by the fire.
[4] UCB claims damages against Spooner for (i) breach of implied terms of the contract of sale of the heliveyor under section 14(2) and (3) of the Sale of Goods Act 1979 and (ii) negligence in using plastic belting material which was unsuitable for a production line. UCB also seeks damages from both Spooner and Siegling for an alleged negligent misrepresentation of the suitability of the plastic belting for use on its production line and a negligent failure to warn of its flammability when exposed to flame.
The principal witnesses
[5] Before setting out the facts, I comment briefly on the credibility and reliability of the principal witnesses as counsel challenged some of the evidence which I heard. I found the witnesses to be generally both credible and reliable. I am not persuaded that any disputed issue of fact has much bearing on liability in this case. When I have not accepted as reliable part of the evidence of a witness and have preferred the evidence of another witness, my decision has affected the narrative of the factual background rather than altered the apportionment of liability between the parties because the principal facts upon which liability rests are not seriously in dispute.
[6] Mr Archibald Cunningham, who is managing director of UCB, is an experienced and successful businessman. He is also a determined and forceful man. He has reflected on events since the fire and was clearly aggrieved that the defenders had provided UCB with a belt which he considered unsuitable for its purpose. He was angry that the defenders had "fobbed off" his inquiries by the assurances which they had given him in 2004, which I discuss below. This caused him to give some defensive answers on cross-examination. He overstated the frequency of burning product exiting the ovens. Other witnesses did not support his testimony on this. He also overstated the frequency of the cleaning of the ovens; he stated that the slats of the ovens were cleaned daily when UCB's cleaning sheets suggest that the ovens were cleaned weekly and there was evidence of some build-up of carbon on the slats of the ovens. I do not accept his evidence on cross-examination that he believed that the first serious fire was caused by a piece of red hot metal which had broken off the oven. But his faulty recollection on these matters did not in my view undermine his credibility or seriously compromise his general reliability. In particular, I accept his evidence that he relied on the advice which the defenders gave in 2004 in deciding to keep the heliveyor as part of UCB's production line.
[7] Mr Ronald Stebbings had been general manager at UCB since July 2006 and was previously operations manager with responsibility for production, planning and distribution. He was a credible and generally reliable witness. Mr Derek Thomson had been the general manager before Mr Stebbings and was also commercial manager. Among other things Mr Thomson described the site visits which customers made to check on hygiene and quality control. He was a credible and reliable witness whose evidence was not seriously challenged. Mr Steven Jeffrey was the engineering manager at UCB between 2003 and 2005. He gave his evidence in a straightforward manner and I do not question his credibility. His recollection was sometimes vague and on several occasions, including importantly his reaction to Siegling's letter of 30 June 2004, he qualified in his oral evidence what he had stated in his witness statement.
[8] Mr Alexander Grieve is an engineer in the food industry. In about 1996 he became the managing director of Triphase Ltd, which manufactured heliveyors. In about 2001 Spooner acquired the intellectual property rights of Triphase Ltd and employed Mr Grieve as a chief engineer in its food division. His principal role was to sell Spooner's products to the bakery industry. He was a credible and straightforward witness who tried hard to give an accurate account of his recollection. I had no difficulty in accepting his evidence.
[9] Mr David Alderson was formerly employed as an applications engineer by Triphase Ltd and then by Spooner. He now works as a technical director of a company of which Mr Grieve is the managing director. He gave evidence about the design of the heliveyor for UCB in 2003. He explained that one could not use steel belting on a heliveyor and that he did not consider that there was a risk of fire through using plastic belting. He also spoke of placing the order for the plastic belting with Siegling. He also was a straightforward witness who gave his evidence with care. I accept him as a credible and generally reliable witness.
[10] Mr Dennis Jackson is a retired engineer. He worked for Siegling and its predecessor companies for about 30 years in the manufacture and supply of conveyor belts. He was an honest witness but had a poor recollection of events. He did not recall the number of visits he had made to UCB's factory or the discussions which he had had in 2004 with Mr Grieve or with Mr Steven Jeffrey of UCB. His recollection was wrong in several details. In particular, I do not accept his evidence that there had been a consensus in 2004 that the lack of cleaning of the conveyor belt and proper housekeeping had caused an earlier fire on the heliveyor in December 2003. That recollection was contradicted by contemporary documents.
[11] UCB also led the evidence of Mr Paul Tucker. He is a commissioning and production engineer with expertise on the commissioning and design of bakery ovens. He was not an expert on fire propagation. He gave expert evidence on the responsibilities of a design engineer. He criticised Spooner's design of the heliveyor and in particular its failure to assess the risk that the conveyor would carry bakery product which was on fire. He also criticised both Spooner and Siegling for failing to give written warnings of the flammability of the plastic belting. While I have had regard to his report in the context of the common law cases which UCB advances against Spooner and Siegling, its value is considerably diminished by the dependence of its analysis on the Supply of Machinery (Safety) Regulations 1992. UCB pleaded no case against Spooner under those regulations.
The factual background
[12] Until late 2006 UCB's factory included facilities for producing naan bread. In 2003 production of naan bread amounted to about two-thirds of the factory's turnover. As a result of increasing price competition, Mr Cunningham decided to move UCB's production to more profitable products, such as gluten-free bread. Thus when the fire occurred in late 2006, UCB's production of naan bread was coming to an end. The ovens which produced naan bread were heated to about 400˚ C in order to create the desired scorching and brown bubbles on the surface of the bread and thus resemble the effect of a tandoor oven. Most bakery products do not require such high temperatures. It was thus very unfortunate that UCB suffered the serious fire as it was ending its production of naan bread.
[13] The production process may be summarised as follows. Dough was first mixed in a hopper before being placed in moulds. The moulded dough then passed through a proving chamber where the dough rested for about 20 minutes. The operatives standing between the proving chamber and the mouth of the oven would hand stretch each naan bread into its familiar tear-drop shape. Rapeseed oil was then applied to the surface of the naan breads. By 2003 UCB had introduced an automated spray chamber which sprayed the rapeseed oil onto the naan breads before they entered the oven. A slatted steel conveyor moved the naan breads through the oven. They remained in the oven for only about 20 to 40 seconds before exiting onto a steel wire conveyor. Because...
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