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England and Wales High Court (Technology and Construction Court) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Britannia Zinc Ltd. v Southern Electric Contracting Ltd. & Anor [2002] EWHC 606 (TCC) (12 April 2002) URL: http://www.bailii.org/ew/cases/EWHC/TCC/2002/606.html Cite as: [2002] EWHC 606 (TCC) |
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QUEENS BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
133-137, Fetter Lane, London, EC4A 1HD | ||
B e f o r e :
____________________
BRITANNIA ZINC LIMITED | Claimant | |
- and - | ||
(1) SOUTHERN ELECTRIC CONTRACTING LIMITED (2) CONNECT SOUTH WEST LIMITED | Defendants |
____________________
Julian Field (instructed by Davies Arnold Cooper for the Second Defendant)
The First Defendant did not appear and was not represented.
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Crown Copyright ©
H.H. Judge Richard Seymour Q. C. :
Introduction
“5.1.1 Damage to the furnace was caused as a result of the power failure. In particular, tuyeres in the furnace became blocked with slag. Work took place to unblock some of the tuyeres and some 11 out of 18 tuyeres needed to be replaced, at a cost of about £54,600.
5.1.2 The damaged cable required excavation and further repair, at a cost of about £33,665.
5.1.3 In order to prevent further damage and to facilitate the restarting of work in the shortest possible timeframe after restoration of power, the claimant kept hot the condensers and stoves at a cost of about £20,592.”
“19….is not of itself physical or material damage but is consequential on the other damage caused by the failure of the cable and furthermore, was incurred at least in part in order to facilitate the resumption of production.
20. Accordingly, this head of loss is irrecoverable following the striking out of the business interruption loss.”
“By 4 p.m. 22nd March 2002, experts to consider the Schedule of Loss in order to narrow quantum issues, subject to liability. Mr. Wilde to be available to attend that meeting in order to assist the experts.”
It appears that it was in the context of that direction that Mr. Shortland made contact with Mr. Wilshere and discussed with him the quantum of Britannia’s claim. Thus in my judgment it is appropriate to treat the agreement made between Mr. Shortland and Mr. Wilshere as at least analogous to an agreement made between experts pursuant to a direction of the Court under CPR 35.12.
“Where experts reach agreement on an issue during their discussions, the agreement shall not bind the parties unless the parties expressly agree to be bound by the agreement.”
It was suggested by Miss Baylis that Connect had expressly agreed to be bound by whatever Mr. Wilshere might agree with Mr. Shortland was the amount of the loss which Britannia had sustained in relation to the elements which it was open to it to pursue. She relied on correspondence between the parties’ respective solicitors as having that effect, and in particular upon the terms of a paragraph in a letter dated 15 February 2002 written by Messrs. Davies Arnold Cooper, solicitors acting on behalf of Connect, to Messrs. Reynolds Porter Chamberlain, solicitors acting on behalf of Britannia which was in the following terms:-
“In respect of the claim for material damage we suggest that a similar position be adopted with this element of your client’s claim and that our client’s loss adjuster Mr. Wilshere of Crawford & Co, meet with Mr. Wilde to discuss the claim for material damage and again produce a statement of those issues that they are able to achieve agreement upon and restrict his evidence to any points which remain in dispute between the parties.”
However, it seemed to me that that paragraph, and the other letters written by Messrs. Davies Arnold Cooper on behalf of Connect upon which Miss Baylis relied, in fact envisaged no more than the usual discussions with a view to narrowing issues which take place between experts on behalf of parties to litigation, where such experts are instructed, and not negotiations with the aim of compromising the claims of Britannia. Miss Baylis relied in support of her submission on the fact that on no view was Mr. Wilde an expert. That, of course, is so. However, he was the person upon whose evidence Britannia relied to prove its alleged loss, and it was plain to me that the purpose of the discussions contemplated by Messrs. Davies Arnold Cooper was simply to see to what extent disputes about particular elements within Britannia’s claims could be eliminated.
The evidence of loss
“1. I am a costs accountant of the Claimant Company, and I make this Witness Statement to verify the losses sustained by the Claimant following the failure of a joint repair on the 11khz cable which supplied the Main blower to the Claimant’s Imperial Smelting Furnace (“ISF”) on 20th August 1999. That repair had been made by the Defendant in this action.
2. I confirm that the documents exhibited at “BW1” to this witness statement are true and accurate records which support the loss claimed by the Claimant. References to page numbers below are to that exhibit….
4. The Material Damage loss claimed comprises three elements, namely:
4.1 Rectification of damage to the blower house cable so as to restore the power to the blower house and therefore enable the ISF to recommence operations.
[Schedule of Items comprising this element is at BW1, Page 3 and at Page 45 (last 5 items), Page 46 (First 4 Items) and Page 48].
4.2 Damage caused within the ISF itself immediately consequent upon the failure of the cable and resultant loss of power. This included the necessary digging out of the slag and the un-blocking of the ISF tuyeres. (The tuyeres are the means by which superheated air is fed into the ISF) [Schedule of Items comprising this element is at BW1, Pages 1 and 2, and at Page 40 (First 19 items), Page 42 (items dated 05 OCT 99 and 06 OCT 99), Page 43 (Final 4 items), Page 44, Page 45 (first 2 items)]
4.3 Prevention of further damage to condensers and the facilitation of restarting the work in the shortest possible time-frame after restoration of power [Schedule of items comprising this element is at BW1, Page 2, and at Page 40 (Last 2 items), Page 41, Page 42, Page 43 (First 4 items), Page 47 (3Item)]
5. The Material Damage claim is directly caused by the failure of the cable due to the nature of the ISF and related plant. Put simply, the Claimant produces both Zinc and Lead through the operation of the ISF, which heats the raw material ore, together with coke, to temperatures in excess of 1000º C. To achieve the high temperatures necessary for the smelting to take place a piece of machinery known as a Blower (in practice a giant fan) blows air into the ISF through a series of pipes, ultimately entering the ISF through the tuyeres. It is this heating which causes both the lead and the slag to become molten. It is the power cable to the Blower which failed and gives rise to this claim.
6. As it is the Blower which maintains the temperature in the ISF within the operating range, once the power failed, causing the ISF to suddenly come off-line, the temperature within the ISF immediately fell. As a result, the lead within the ISF, which was at that stage molten, cooled and solidifying, both within the ISF itself, and within a number of the tuyeres. Once solidified, the only means to remove the lead and slag was to physically dig it out.
7. In addition to the production of molten lead within the ISF itself, the Claimant also produces zinc. To extract the zinc, condensors which are located immediately above the ISF are utilised. The condensors are in effect brick-lined baths which contain molten lead. During the operation of the ISF zinc vapour is produced, which in turn rises up the shaft and over the condensors. The lead within the condensors is constantly agitated so as to produce lead droplets, onto which the zinc vapour condenses. At a later stage in the process, the zinc, being lighter than lead, is then skimmed of [sic] the surface of the lead before being refined further.
8. Once the power to the Blower failed, it was of great importance to maintain the heat within the condensors, in order to ensure that the lead remained molten. If this additional heat was not maintained, then the lead would have, as in the ISF, have solidified. If this had occurred, further material damage would have been caused to the condensor linings. In addition, by maintaining the heat within the condensors, delays upon restarting production once the power supply was restored where [sic] avoided.
9. To maintain the heat in the condensors, additional and extraordinary fuel costs of £20,592 were incurred. A break down of these costs is shown at page 2, together with supporting invoices at pages 4 to 48. [See BW1, Pages 16 – 21]
10. Turning to the actual costs of the Material Damage claimed for, this can be broken down as follows:
10.1 Cost of restoring power to the furnace blower including the re-routing of the cable: £33,665. The relevant invoices are at pages 4 to 48. [See BW1, pages 22-24, 36, 38-39]
10.2 The cost of the removal of slag and solidified lead from the furnace, together with the replacement of those tuyeres which had become blocked with solidified slag and lead: £54,600. The relevant supporting invoices are at pages 4 to 48. [See BW1, Pages 4 to 14]
10.3 The prevention of further damage to the condensors and the facilitating of the early resumption of production following the restoration of power: £20,592. The relevant supporting invoices are at pages 4 to 48. [See BW1, Pages 16 – 21]
11. As can be seen from these vouched figures, the total Material Damage sustained by the Claimant as a result of the cable failure totaled [sic] £108,857.”
(a) The claim in respect of the alleged cost of restoring power to the blower
(b) The claim in respect of the alleged cost of removing solidified slag and lead
(c) The claim in respect of costs allegedly incurred to avoid further damage to plant
“TO:
The supply of manpower and equipment to hold the temperature in cowper stoves 2 & 3 from 21/8 to 8.00pm 23/8
Additional site time: from 8.00pm 23/8 to 12 noon 25/8 – 40 hours @ £30.00 per hour ”
I am satisfied that the work so described was undertaken and was necessary as a result of the failure of the power supply to the blower in order to prevent further damage to the condensers and stoves at the premises of Britannia.
Conclusion