Upstate Ltd v BHW Refrigeration & Air Conditioning Ltd [2005] EWHC 2968 (TCC)

[2005] EWHC 2968 (TCC)Case No HT 05 105
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
St Dunstan’s House
Venue 133-137 Fetter LaneDate Date: 21 December 2005
London, EC4A 1HD
Before
HIS HONOUR JUDGE JOHN TOULMIN CMG QC
Between
UPSTATE LTDClaimantBHW REFRIGERATION & AIR CONDITIONING LTDDefendant
Mr Andrew Miller (instructed by Cozen O’Connor) for ClaimantMr Ian Ridd (instructed by Berrymans Lace Mawer) for Defendant
JudgmentHis Honour Judge John Toulmin CMG QCThis is a claim made by Upstate Ltd (Upstate) arising out of a failure on 5 August 2003 of the temperature controller on a freezer supplied by BHW Refrigeration & Air Conditioning Ltd (BHW). The failure caused a substantial agreed loss to Upstate in the sum of £140,000 inclusive of VAT.
[1]Upstate operates a bio technical business undertaking research and the production of materials for use in research. Upstate imports products from New York which it stores in refrigerated conditions either in chillers or freezer cabinets prior to them being distributed within the United Kingdom and 14 other countries.[2]There is no dispute that on 17 January 2002 BHW supplied and installed a refrigerated cabinet No.ABX700N with a serial number of 01FA60248 (“0248”). There is also no dispute that the cabinet failed on 5 August 2003 and that Upstate had as a result to replace all the contents of the cabinet.[3]What is disputed by BHW is that it is liable for the loss. There is a remarkable lack of evidence before me from Upstate. I have had no oral evidence from Upstate as to the circumstances in which BHW was called out to make emergency repairs on 30 July 2003, 5 August 2003 and the night of 8/9 August 2003.[4]The Claimants’ case relies almost entirely on the expert evidence of Dr Fletcher who, working back from the call out on the 8/9 August 2003 concludes that on each occasion there must have been water ingress which caused a fault or faults on the temperature controller of the freezer, the cause of which BHW’s engineer should on the occasion of the first call out on 30 July 2003 have investigated, found and rectified.[5]Although there is no direct evidence I am asked to conclude, on the basis of Dr Fletcher’s opinion, that on 30 July 2003 there must have existed a hole in the door frame trim which had torn causing water to enter the temperature controller. Mr Hulme, who attended on that day, failed to notice that the water had leaked onto the controller, through the hole and had failed to repair the hole. I am asked to conclude that water leaked through the hole again on 5 August 2003 causing the temperature controller again to fail. On 5 August 2003 there is no dispute that the freezer defrosted causing irreparable damage to the contents. Upstate contend that this would not have occurred if Mr Hulme had repaired the hole on 30 July 2003 in accordance with what it claims are BHW’s contractual obligations.[6]BHW contends, relying on the evidence of its own witnesses and its expert Mr Bailey, that in all the circumstances Dr Fletcher’s theory is not the correct or most likely answer to what caused the temperature controller in the freezer to fail. BHW submits that either I should reject Dr Fletcher’s evidence outright, or say that this is one of those rare cases where there is so little evidence that I must conclude that Upstate have not discharged its burden of proof on the facts.

THE WITNESSES

[7]The only factual witness for Upstate was Mr de Rijk who was at the time operations manager of Upstate and now has the title of Director of Logistics. He has not given any evidence of his own relating to the cause of the problems on 30 July, 5 August and 8/9 August 2003 which caused BHW to be called out to deal with problems with the freezer. I note that both on 5 August 2003 and on the night of 8 and 9 August 2003 he was the person who called BHW for assistance. He was cross examined only very briefly by the Defendants.[8]For the Defendants, Mr Baker, the office manager and a partner in BHW and Mr Holt, also a partner, gave oral evidence. The evidence of Mr Wilson, who went with Mr Holt on the visit during the night of 8/9 August 2003 was read.[9]On being assured that the relevant notices had been served, and there being no dispute that Mr Hulme is living in Ireland and is permanently resident out of the jurisdiction and overseas, I admitted his evidence in writing. I made it clear that the weight of his evidence would be a matter of separate consideration. Upstate submits that the evidence in his witness statement and the note of his evidence prepared by Mr Baker should be given no weight.[10]Upstate started to argue that in considering the evidence of BHW’s witnesses I should bear in mind that they would have had no reason to remember accurately the three incidents so long after the event because the letter before action from the Claimant was not written until 31 March 2004, about eight months after the event. It is clear that the BHW witnesses would in fact have needed to remember the events much earlier than that since there was a site meeting with BHW on 4 December 2003 to discuss the freezer failure. I shall deal with questions of the accuracy of recollection of witnesses on individual issues later but I have formed a view that all those witnesses who gave oral evidence were doing their best to assist the court.[11]I also conclude that the experts in the case, Dr Fletcher for Upstate and Mr Bailey for BHW were doing their best to assist the court and genuinely reached differing conclusions on the cause of the breakdowns of the freezer on 30 July 2005 and 5 August 2005.

THE LAW

[12]Each party relies on the judgment of the House of Lords in Rhesa Shipping SA v Edmunds [1985] 1 WLR 948. The decision was unanimous and is contained in a single speech from Lord Brandon of Oakbrook. At page 955 he said:
“My Lords, the late Sir Arthur Conan Doyle in his book The Sign of Four describes his hero Mr Sherlock Holmes as saying to the latter’s friend, Dr Watson: “How often have I said to you that, when you have eliminated the impossible, whatever remains, however improbable must be the truth?”
It is no doubt on the basis of this well known but unjudicial dictum that Bingham J decided to accept the ship owner’s submarine theory even though he regarded for seven cogent reasons as improbable. In my view there are three reasons why it is inappropriate to apply the dictum of Mr Sherlock Holmes, to which I have referred, to the process of fact-finding which a Judge of first instance has to perform at the conclusion of a case of the kind here concerned. The first reason is … that the Judge is not bound always to make a finding one way or the other with regard to the facts averred by the parties. He has open to him the third alternative of saying that the party on whom the burden of proof lies in relation to any averment made by him has failed to discharge that burden. No Judge likes to decide cases on burden of proof if he can legitimately avoid having to do so. There are cases however in which owing to the unsatisfactory state of the evidence or otherwise, deciding on the burden of proof is the only just course to take. The second reason is that the dictum can only apply when all facts are known so that all possible explanations except a single extremely improbable one can properly be eliminated … The third reason is that the legal concept of proof of a case on the balance of probabilities must be applied with common sense. It requires a Judge of first instance before he finds that a particular event occurred, to be satisfied on the evidence that it is more likely to have occurred than not. If such a Judge concludes on a whole series of cogent grounds that the occurrence of an event is extremely improbable, a finding by him that it is nevertheless more likely to have occurred than not, does not accord with common sense. This is especially so when it is open to the Judge to say simply that the evidence leaves him in doubt whether the event occurred or not and that the party on whom the burden of proving that the event occurred lies, has therefore failed to discharge such burden.” “How often have I said to you that, when you have eliminated the impossible, whatever remains, however improbable must be the truth?”[13]Upstate submits that I should determine the case by finding on the evidence, including the expert evidence, that they have satisfied the burden of proof.[14]BHW submits that: i) Upstate have not discharged the burden of proving the cause of failure; ii) BHW is under no burden to prove the cause of the failure or even, on the balance of probabilities, the truth of any alternative explanation; iii) it is open to the court to conclude that the cause of the failure remains in doubt and, if it does, the claim fails; and iv) in this case all possible explanations cannot be eliminated because the temperature controller was not available for examination.

THE FACTS

[15]On 17 January 2002 BHW supplied the refrigerated cabinet (0248) to Upstate at a basic cost of £1,215 plus VAT. Upstate’s premises were then at Botolph Clayton. In June 2002 Upstate moved to new premises at Milton Keynes and BHW moved the freezer to the new premises. In December 2004 (after the events with which I am concerned) Upstate moved to Dundee.[16]This freezer and other freezers were maintained by BHW under a maintenance contract. For the period from 1 November 2002 to 31 October 2003 there were initially three other units. Two further units were installed by BHW on 20 May 2003 and 26 June 2003.[17]The written agreement specified that there would be four maintenance visits per year to carry out specific checks. Among the checks was:
“Visual inspection of cabinet exterior/interior condition and note any defects.”
Although it is common ground that the cost of the emergency calls, also referred to as “breakdown visits”, was not included, Upstate contends that a similar visual inspection of the exterior and interior of the cabinet was a specific obligation in relation to emergency calls as well as to the routine maintenance visits.[18]The only specific positive obligation in relation to emergency calls set out explicitly in the contract was that BHW agreed to a “target response time to emergency calls of 6.00 hours”. I was told by Mr Baker, BHW’s office manager, that breakdown visits were charged at the time at the rate of £30 per hour for site and travel time.[19]It appears that there were no problems with the freezer cabinet No.0248 before 30 July 2003. On that date Mr Baker received a telephone call from someone called Katherine. He wrote on the job sheet:
“No temperature display? Defrosting.”
Mr Shaun Hulme was the engineer who attended. Upstate have not provided any evidence of their own as to what was the problem with the freezer. There is, for example, no evidence that, as they now allege, Upstate had found any water in the freezer cabinet or on the temperature controller. Mr de Rijk, the Director of Logistics at Upstate and their only factual witness, gives no evidence of the circumstances in which the telephone call was made.[20]Mr Baker, who is now the office manager at BHW, is a refrigeration engineer with 40 years experience. He said in his witness statement, evidence which was not challenged, that Katherine telephoned to say that there was no temperature display on the freezer cabinet. He said that she told him that Upstate was reluctant to open the freezer door. She asked Mr Baker if the unit might need defrosting. He said that he did not know but would arrange for an engineer to visit.[21]He sent Mr Hulme to visit and Mr Hulme reported to him that the freezer was working and at a frozen temperature but the controller was not showing a temperature display. Mr Baker said that he spoke to Upstate (person unidentified) who requested that BHW get a temperature display back up on the freezer.[22]Mr Baker asked Mr Hulme to pick up a new temperature controller from one of BHW’s wholesalers at Wellingbrough and return to Milton Keynes and fit it. This he did.[23]Mr Baker said that Mr Hulme would probably have brought the defective controller back to the office but there would have been no reason to retain it and it would have been thrown away.[24]This account is consistent with Mr Hulme’s engineer’s report made before he left Milton Keynes at about 3 pm. This report was countersigned by a representative of Upstate who has not been called to give evidence. The report says:
“Travel, test unit controller u/s (unserviceable) 12 power, no display, new req …”
The note then indicates that Mr Hulme travelled to Wellingbrough to collect the new temperature controller, that he returned, set up the new temperature controller and fitted it. There is no mention of water in either Mr Baker’s written statement or Mr Hulme’s written note which was countersigned by a representative of Upstate.[25]Mr Hulme’s first visit to Milton Keynes was at about 10 am and the second visit, to fit the new temperature controller, was some time later on his return from Wellingbrough.[26]In answer to questions in cross examination, Mr Baker said clearly that the reason why Upstate was anxious for the new temperature controller to be fitted was that Upstate wanted to have the temperature display working on the freezer.[27]Mr Baker also gave evidence that he took a statement from Mr Hulme in August 2004 which was later turned into a witness statement and on being assured that the relevant notices had been given, I admitted it under the Civil Evidence Act.[28]Upstate argued that it should be given no weight for two reasons. First it is argued that this is the first time that Mr Hulme would have reason to remember the incident and secondly that he was thoroughly prompted by Mr Baker when he made his statement.[29]With regard to the first point, it is said to be important that the letter before action had arrived. It appeared at one stage to be being suggested by Mr Miller for Upstate that BHW witnesses would have had no reason to remember the events in July/August 2003 until after the letter before action arrived in March 2004.[30]This is clearly incorrect. Even in the very incomplete bundle of documents with which I have been provided, it is clear that there was a meeting between Mr Baker and Mr de Rijk on 4 December 2003 and there is no indication from the brief note that this was the first meeting. I asked the parties when in fact BHW would first have known that Upstate was investigating the incident but neither solicitors nor counsel on either side were able to help me.[31]I have no knowledge as to when Mr Hulme first had reason to recall his visit on 30 July 2003. It was a rather unusual visit since he had to go to Upstate at Milton Keynes and then to Wellingbrough and then back to Milton Keynes. It may well be that this is something that he would have cause to remember as a visit which was outside the ordinary.[32]In his statement taken down by Mr Baker in August 2004, Mr Hulme said that on his arrival at Upstate’s premises he noted that the electronic thermostat had no red LED display. He said that he took a very brief look at the interior of the freezer in order not to raise the temperature more than necessary. He went on in his statement:
“I noted that hoar frost was present in the cabinet and that low temperature air escaping when the door opened caused condense vapour to form in the air. From that I concluded that the cabinet interior was at low temperature.”
[33]He went on to say that with regard to the controller and refrigeration unit, he found that the compressor was running. He also found that the 12 volt power supply was present at the controller and the display at the front was not working. He said that the control did not seem to have been damaged or to have been in contact with water so he could only think that an internal failure had caused the failure of the display panel. Mr Hulme said that he explained the position to the Upstate staff who said that the temperature display should be reinstated as soon as possible. He contacted BHW’s office to tell them what had happened, refixed the panels to the freezer and left the site. He then received another telephone call and was told to go to Wellingbrough to collect a replacement unit which, on his return, he fitted and he left working.[34]His subsequent witness statement in September 2005 is in very similar terms. He explains his contemporaneous note by saying that u/s is shorthand for unserviceable and the reference to 12 power is intended to confirm that a 12 volt supply was detected.[35]On 5 August 2003 Mr Baker received a telephone call from Mr de Rijk who told him that the freezer cabinet had defrosted. He said that the thermostat controller had no temperature control and that the temperature alarm system had not dialled out to give a warning of the rising temperature of the freezer. Mr Baker says that the telephone call was the first of the day although there is no record of the precise time. There is no dispute that as a result of the defrosting the contents of the freezer were spoiled and had to be destroyed.[36]Mr Baker asked Mr Holt, a very experienced engineer and a partner in BHW, to visit the site. He arrived at Milton Keynes at 1.50 pm. It was a very hot day. The outside temperature had reached 29 C or 84 F. It had been at a similar temperature since 11.20 am that day. The temperature had been steadily rising since early morning.[37]In his witness statement Mr Holt said that the temperature in the room housing the freezer cabinets felt even hotter than the temperature outside and above 30 C. He confirmed on arrival that the freezer had defrosted. He opened the panel door and felt hot air escaping from the interior of the freezer. He went out to his van to get a test meter and when he returned he found that the temperature display had illuminated. The time he was away, he said, was about 10 minutes. The 12v power had been restored and the fridge was working again. He concluded that the battery charger must have failed temporarily due to overheating. Upstate say that I should reject his evidence that the freezer started to function again because there is no mention of it in the engineer’s report.[38]Mr Holt said that the result of the freezer cabinet defrosting had been that some water from the interior had dripped down the front of the cabinet. He dried out the water which he had found. He inspected the electrics attached to the front panel at the bottom of the cabinet. He said that there was water on the body shell of the temperature controller.[39]Mr Holt noticed evidence of short circuiting in the form of flash marks across the back and in the vicinity of two faulty terminals. He thought that the shorting may have occurred when power was returned to the control unit due to the water which had gone down the back of it. He said that there was a spare controller on site so he decided to replace the freezer controller with the spare one as a precaution. He felt that there was some doubt as to the long term reliability of the existing controller due to the defrost water.[40]His engineer’s report, made at the time, was, as one would expect, relatively brief:
“Cabinet not working due to battery back-up overheating and stopping. This also stopped the –20 degrees cabinet from working due to it using the same power supply defrosting the cabinet and running water over the controller causing it to short out. Fitted customer spare controller ran on test and left working ok.”
[41]He said that he did not recall seeing any crack in the cabinet trim and thought that if it had been present he would have seen it while he was removing the water round the cabinet.[42]Mr Holt, who gave his evidence in a frank and open manner, noted in oral evidence that the other freezers were not controlled in the same way. He said that he examined much of the cabinet to some extent and was “pretty sure that if there had been a hole he would have seen it”. He did not know where the water had come from.[43]On 7 August 2003 BHW sent an invoice for £390.79 plus VAT in relation to the two visits. For the first visit Upstate was charged for 1 hour’s labour and 5 hours travel. A description of the work was:
“Electronic thermostat faulty collected new thermostat. Return and fit same tested OK.”
[44]For the second visit Upstate was charged for 1 hour’s travel and 3 hours labour. In addition there was a small charge for a transformer 230/12. The note of the work was:
“Power supply to thermostat failed (overheating). Replaced power source with mains transformer. Tested OK.”
[45]The labour time charge of 3 hours would indicate that Mr Holt had made more than a cursory examination of the freezer and would tend to support his claim that if there had been a hole in the cabinet he would have seen it.[46]Unfortunately the problem with the freezer was not solved by Mr Holt on 5 August 2003. During the night of the 8/9 August 2003 he was again called out by Mr de Rijk. Mr de Rijk’s witness statement again does not set out the circumstances of his telephone call and he was not asked about it.[47]The note of the call out indicated that the cabinet temperature was high. The alarm was going continuously and the immediate request was to isolate the alarm.[48]Mr Wilson and Mr Holt attended. Mr Wilson is also a qualified engineer. They disconnected the alarm and Mr Holt worked on the freezer while Mr Wilson wrote the report. It was as follows:
“Called at site. Disconnected alarm. Found water in electronic controller. Door frame trim broken causing water to enter controller 12.32/12.45 am.”
[49]In his written statement Mr Holt said that the cabinet had been emptied of the metal trays of product. It had only partially defrosted and there was little ice build up. Water was found on the bottom of the cabinet:
“Where it had come from I was not sure. Some water was dripping on the right hand side of the controller … I assumed at the time that water had got into the trim and had run to the right side where it was dripping. However the trim was rather brittle so I did not examine it closely to avoid breaking it further. I could see that it was covering a silicone seal. The crack in the trim was filled with sealant.”
[50]In cross examination Mr Holt said it was not the same sort of problem which had occurred on 30 July 2003.[51]On 13 August 2003 Mr Holt returned and fitted a new control panel. He filled the gap in the freezer casing above the control panel with sealant and fitted a cover over the control panel to protect it from water. There were no further problems with this freezer. The plastic trim of another freezer was later found to be damaged.[52]On 2nd October 2003 BHW sent a renewal notice together with a new maintenance agreement to cover the additional number of freezers. This was signed by a representative of Upstate on 17 October 2003.[53]It is not clear when anyone from BHW was first asked to remember the events of July/August 2003 but it cannot, as I have already found, have been later than 4 December 2003. At the meeting on 4 December 2003 Mr Holt said that he told the meeting that the reason why the temperature controller failed was because it had overheated. He said there were no visible signs of failure.[54]He telephoned the suppliers of the battery charger. He was told that the battery charger was not intended to be operated at above 40 C. On 8 December 2003 Mr Baker passed this information on to Mr de Rijk.[55]In early December 2003 Dr Fletcher of Hawkins Associates was instructed on behalf of Upstate. Mr Fletcher had various discussions with Mr Baker and Mr Holt and wrote to Mr Baker on 12 January 2004.[56]Mr Baker replied to Dr Fletcher’s letter on 14 January 2004. He explained in relation to the call out on 8/9 August 2003 that the controller had failed due to melt water entry via a damaged freezer door trim section. In relation to the fact that no charge had been made for this visit he wrote:
“Due to the short period between controller failures and as a gesture of goodwill to a valued client, no charge was made for the call out and subsequent controller replacement.”
[57]On 31 March 2004 Cozen O’Connor, a firm of solicitors and registered foreign lawyers, wrote a letter before action to BHW. In the letter they claim that BHW was in breach of an express term of its contract with Upstate to carry out a visual inspection of the cabinet’s exterior/interior condition. The letter alleges that if such an examination had been carried out on 30 July 2003 the employee of BHW would have noticed the broken doorframe trim which allowed water to gather in and around the freezer’s thermostat which in turn caused the short circuiting of the thermostat and its back-up power source and safety systems.[58]On 15 April 2004 BHW was alerted by someone called John from Upstate that on the previous night a freezer alarm had been activated three times. Mr Holt checked the freezer (a different one) and found damage to the inner plastic trim in approximately the same position as he had seen it on 9 August 2003. He thought that the metal trays used by Upstate might have caused the damage to the trim.[59]Mr Holt said that on a breakdown visit he would not expect an engineer to carry out a full maintenance check. He said that in order to carry out the check, the cabinet needed to be empty. A maintenance check would take about 30 minutes.

THE EXPERT EVIDENCE

[60]The expert’s joint statement is an excellent summary of the matters on which the experts agree and disagree. The experts co-operated well in the course of the procedure and were able to reach a degree of agreement. They agreed that it was likely that the hole in the door trim was created during use by Upstate during movement of stock in and out of the freezer.[61]On 15 July 2005 the experts carried out a joint examination and testing of the freezer. The slope of the compartment floor was such that water ran towards the back of the compartment and almost four litres could be added before water reached the trim at the front of the compartment.[62]The experts agreed that it is unlikely that the freezer would have defrosted in the short period between 5 August 2003 and 8/9 August 2003 and that the water entered the controller by running out of the front of the freezer and then into the gap between the cabinet and the equipment frame at the base of the freezer. They thought it is most likely that, as indicated in the BHW engineer’s report, the water found on 8/9 August 2003 had come from the channel in the trim.[63]Whilst the experts were able to agree as to the cause of failure on 8/9 August 2003 they disagree about the earlier incidents. Dr Fletcher concludes that the most probable explanation is that all three failures were caused by water dripping onto the electronic controller and that the water came from the hole in the trim which was created in the period leading up to the first failure on 30 July 2003. This hole should have been identified and repaired at the 30 July 2003 visit.[64]Mr Bailey says that if Mr Holt’s evidence is accepted relating to 5 August 2003 the water was not caused by water falling onto the controller but by a temporary failure in the 12v power supply system which caused a temporary loss of the display but not a loss of temperature control.[65]In relation to the failure on 30 July 2003 Mr Bailey relies on Mr Hulme’s evidence (including his contemporaneous note) in concluding that the electronic controller had suffered a random failure unconnected with water ingress which caused a temporary loss of the display but not of temperature control.[66]Mr Bailey says that in relation to the third failure on 8/9 August 2003 the defrost water has to start overflowing the trim before it can enter the hole in the trim. If the water does overflow the trim, it is easier for the water to run out of the cabinet and down the front and into the controller than being routed via the trim.[67]The freezer was brought into court and I had an opportunity to examine it as well as to see some helpful photographs.[68]Dr Fletcher arrives at his conclusions by a process of elimination. In reaching his conclusion he relies on the argument that it is improbable that the freezer should have failed three times in a short time from three different causes and after the repair on 13 August 2003, it has not failed since. He dismisses the alternative possibilities put forward by Mr Bailey.[69]In his own report, working backwards from the events of 8/9 August 2003, he arrives at his conclusion as to what Mr Holt must have seen on 5 August 2003. Having satisfied himself that the facts as I should find them do support his theory he goes on to interpret the events of 30 July 2003 in a way which is consistent with his theory.[70]He concludes his report:
“It is most likely that all three failures at Upstate … were caused by the same underlying fault whereby water that had accumulated in the door trim dripped onto the controller. This fault was diagnosed directly by BHW at the time of their visit on 8/9 August.”
[71]He went on to say (and this is Upstate’s pleaded case) that the water most probably entered the trim through a hole in the door trim that had been caused accidentally by Upstate. He concludes that the most likely time when water would have entered this trim would be when the freezer was defrosted either intentionally or unintentionally.[72]At paragraph 5.4 of his report Dr Fletcher had to concede that if there was no water on the controller on 30 July 2003 Mr Hulme’s action in replacing the controller was reasonable. He said that:
“It would appear that no detailed examination was made of the controller and it is possible therefore that the engineer failed to observe the water or any evidence of it.”
[73]He went on:
“If there was evidence of water having entered the controller then I would expect the engineer to have determined the source of the water. Had he investigated fully, it is possible that he would have identified the source of the water as the hole in the door trim like his colleague who visited on 8/9 August 2003.”
[74]Dr Fletcher’s theory depends not only on the finding that there was water on the temperature controller on 30 July 2003 but also that there was a hole in the door trim through which the water ran. His theory also involves the hole in the trim being present on 5 August 2003 when Mr Holt was called out and also a finding that Mr Holt failed to see the hole in the course of his inspection.[75]In cross examination, Dr Fletcher had to concede that there was no evidence of an unplanned defrost before 30 July 2003 or 5 August 2003 or that Upstate was negligent in defrosting the freezer on a routine maintenance. He agreed that if Mr Holt’s evidence of events on 5 August 2003 was accepted that was incompatible with his theory. He also accepted that there was no evidence before me as to when the hole in the trim was caused. He did not know whether the conditions of intense heat had been previously replicated. He agreed that there was no evidence of water in the trim on 30 July 2003 (either from BHW or Upstate) but he says that the water must have been there. He regards the evidence of Mr Holt that on 5 August 2003 he opened the cabinet at the start of his visit and 10 minutes later the controller came back on spontaneously as implausible.[76]In his report Mr Bailey regarded Dr Fletcher’s theory as seriously flawed. He agreed that the shortcomings in the design/manufacture of the freezer meant that the electronic controller was vulnerable to damage by water ingress.[77]Nevertheless he concluded that on the available evidence there was no causal link between the incidents on 30 July 2003 and 5 August 2003 and that neither of these incidents was precipitated by water entering the temperature controller. He concluded that the causes were:
“(a) the failure of the freezer temperature controller on 30 July 2003 was due to a random internal failure; and (b) the unprompted defrost on 5 August was caused by overheating of the 12v power supply system.”
[78]He concluded that following the unscheduled defrost on 5 August 2003:
“It was plausible that water had accumulated in the door trim and that this had leaked onto the controller three days later causing it to fail.”
[79]Mr Bailey visited Upstate on 3 August 2004. Whilst he was on site he spoke to the employee called John but who is not otherwise identified. He wrote at paragraph 3.2 of his report:
“John said that although not completely certain he thought that the initial call out to the incident freezer cabinet on 30 July 2003 was due to the display of the electronic controller flickering rather than the loss of temperature control.”
[80]In relation to his conclusions as to the cause of the problem on 5 August 2003 Mr Bailey said that on the basis of Dr Fletcher’s tests, Mr Holt may have been mistaken in his view as to the cause of the problem.[81]He said at paragraph 3.9 of his report in a passage criticised by Dr Fletcher:
“3.9 It is not possible for me to confirm the reason for the temporary power loss with any certainty from the limited available evidence. However one possible explanation is that there was a loose screw terminal connection in the supply to the battery charger and that the unusually high temperatures had caused this connection to become temporarily open circuit. Alternatively there may have been a dry soldered joint within the battery charger that was also affected by heat and led to a temporary loss of output from the charger. Nevertheless on balance I think that the excessive heat within the 12v power supply panel was responsible for the unprompted defrost on 5 August 2003 and that once Mr Holt released the heat from this panel the freezer started working normally again.”
[82]In cross examination Mr Bailey adhered to the views expressed in his report. He felt that the tests carried out by Dr Fletcher were not exhaustive. He thought that his explanation in paragraph 3.9 of his report remained plausible. He agreed that if Mr Holt was mistaken on 5 August 2003 in his evidence about the controller starting spontaneously after ten minutes, Dr Fletcher’s theory of water getting on the controller was the more likely theory.[83]He maintained his opinion that there was no evidence to show a common cause for all three failures.

CONCLUSIONS

[84]I find as a matter of law that the annual written agreement between Upstate and BHW includes four maintenance visits per year to carry out the detailed checks specified in the agreement. In addition BHW agreed as a matter of contract that as and when necessary they would make a response to emergency calls and that the response would have a target response time of no more than six hours.[85]The agreement to make emergency calls does not include an agreement under the contract to carry out the checks specified in the written agreement. In order to give business efficacy to the agreement a term must however be implied in relation to the response to emergency calls that the engineer will use reasonable care and skill to investigate and identify the fault and correct it. The nature of the investigation required will depend on the facts and circumstances of each case.[86]Having stated the basic obligation of BHW it is necessary to set out the elements which must be proved in this case. They are: i) that BHW should have found on the visit on 30 July 2003, but failed to find, the fault which caused the damage to the contents of the freezer on 5 August 2003 and therefore failed to rectify it and that this failure caused the damage to the contents of the freezer; ii) specifically that the cause of the failure was the hole in the trim through which water seeped onto the temperature control panel; iii) that BHW should have identified the hole in the trim at the visit on 30 July 2003, should have either seen that water was seeping through it, or have foreseen that water would seep through it on to the temperature control panel, and should have sealed up the hole; and iv) that BHW’s failure to do so caused the problem which led to the failure on 5 August 2005 as a result of which Upstate suffered the loss.[87]Having considered the evidence carefully I have reached the following conclusions: i) in relation to the incident on 30 July 2003 (excluding the later statements of Mr Hulme) a) there is no evidence of any failure of the temperature control on the freezer; b) there is no evidence that the alarm sounded; c) there is no evidence of defrosting. The note “? Defrosting” on the work sheet is evidence that the caller did not know whether or not the freezer was defrosting; d) there is no evidence of any water anywhere; e) There is no evidence of any hole in the trim; f) latent failure of the controller is possible. ii) In relation to Mr Holt’s visit on 5 August 2003, I find that Mr Holt was an honest witness whose evidence can be accepted in relation to what he saw. I find: a) that the outside temperature on 5 August 2003 reached 29 C for a prolonged period and at the time of his visit at 13.50 the temperature in the room where the freezer was located was significantly hotter; b) as a result of the freezer cabinet defrosting there was water in the body shell of the temperature controller; c) Mr Holt opened the panel door and felt hot air escaping from the interior of the freezer. He went to his van to get a test meter and when he returned he found that the temperature display had illuminated; d) he dried out the water and inspected the electrics attached to the front cabinet at the bottom of the cabinet; e) he fitted a spare temperature controller as a precaution; f) in the course of his inspection and his removal of water from around the cabinet Mr Holt would have seen the hole in the cabinet trim if it had been present on that day. He did not see it.[88]It follows from the finding at (f) in relation to 5 August 2003 that there was no hole in the cabinet trim on 5 August 2003 or at the time of Mr Hulme’s visit on 30 July 2003.[89]On the basis of these findings (which do not include positive findings on the later statements of Mr Hulme) I prefer the evidence of Mr Bailey and I reject the expert evidence of Dr Fletcher. The witness statement of Mr Hulme and the evidence of “John” relating to the 30 July 2003 as reported to Mr Bailey are consistent with the findings which I have made.[90]On the basis of these findings of fact I find that Upstate’s claim fails. I am satisfied that on 30 July 2003 and 5 August 2003 that BHW engineers had responded to the emergency calls on those dates with proper care and skill and that on those occasions there was no evidence of a hole in the trim through which water had seeped or was seeping on to the temperature control panel.[91]Alternatively, if I had been unable to reach a positive conclusion, I would have concluded that the evidence leaves me in considerable doubt as to whether the hole in the trim existed on 30 July 2003 and 5 August 2003 and in these circumstances I should have concluded that Upstate has failed to discharge its burden of proving the cause of the failure.[92]In either case the claim fails.