Hi-Lite Electrical Led v Wolseley UK Ltd [2011] EWHC 2153 (TCC)

“It is admitted that the Fire originated in the W300. The fire was caused by arcing in the float cable caused by a fatigue failure. The fatigue failure was in turn caused by the fact that the cable was shortened by Mr Fletcher so that it was less than 10cm long, and/or because the cable was damaged in the course of installation and/or service.”

“8.15 We agree that a failure of the float switch cable after 9 weeks service was premature. However: 8.15.1 In Mr Champion’s and Mr Bullen’s opinion a fatigue failure after only 9 weeks service implies an excessive flexing frequency (number of cycles) of operation, leading to an excessive stress probably arising from a shortened length of free cable to the float switch, or damage to the float switch cable, or some combination of some or all of these factors; 8.15.2 Mr Coates is of the opinion that the premature failure is indicative of a defect in, or damage to, the cable.” 8.15.1 In Mr Champion’s and Mr Bullen’s opinion a fatigue failure after only 9 weeks service implies an excessive flexing frequency (number of cycles) of operation, leading to an excessive stress probably arising from a shortened length of free cable to the float switch, or damage to the float switch cable, or some combination of some or all of these factors; 8.15.2 Mr Coates is of the opinion that the premature failure is indicative of a defect in, or damage to, the cable.”

“The question, and the sole question, which Your Lordships have to decide is whether, on the basis of those primary findings of fact, Bingham J. and the Court of Appeal were justified in drawing the inference that the ship was, on a balance of probabilities, lost by perils of the sea. In approaching this question it is important that two matters should be borne constantly in mind. The first matter is that the burden of proving, on a balance of probabilities, that the ship was lost by perils of the sea, is and remains throughout on the shipowners. Although it is open to underwriters to suggest and seek to prove some other cause of loss, against which the ship was not insured, there is no obligation on them to do so. Moreover, if they chose to do so, there is no obligation on them to prove, even on a balance of probabilities, the truth of their alternative case. The second matter is that it is always open to a court, even after the kind of prolonged inquiry with a mass of expert evidence which took place in this case, to conclude, at the end of the day, that the proximate cause of the ship's loss, even on a balance of probabilities, remains in doubt, with the consequence that the shipowners have failed to discharge the burden of proof which lay upon them.”

“Lord Brandon of Oakbrook, giving the only substantive opinion, described the approach of the trial judge as erroneous by reference to the inappropriateness of applying what was described as the dictum of Mr Sherlock Holmes. First, a trial judge was not compelled to choose between two theories, where the evidence was unsatisfactory; he could decide the case on the basis that the claimant had not proved his case. Secondly it was not possible to proceed on the basis of eliminating the impossible and deciding that the remaining explanation, however improbable, must be the cause, unless all the relevant facts were known; that state of affairs did not exist, as the ship had sunk in deep water. Thirdly, the concept of proof on a balance of probabilities had to be applied with common sense. It required a judge, before he found a particular event occurred, to be satisfied on the evidence that it was more likely to have occurred than not. If the judge concluded that the occurrence of an event was extremely improbable, a finding by him that it nevertheless was more likely to have occurred than not did not accord with common sense. He concluded: “In my opinion Bingham J. adopted an erroneous approach to this case by regarding himself as compelled to choose between two theories, both of which he regarded as extremely improbable, or one of which he regarded as extremely improbable and the other of which he regarded as virtually impossible. He should have borne in mind, and considered carefully in his judgment, the third alternative which was open to him, namely, that the evidence left him in doubt as to the cause of the aperture in the ship's hull, and that, in these circumstances, the shipowners had failed to discharge the burden of proof which was on them.”” “In my opinion Bingham J. adopted an erroneous approach to this case by regarding himself as compelled to choose between two theories, both of which he regarded as extremely improbable, or one of which he regarded as extremely improbable and the other of which he regarded as virtually impossible. He should have borne in mind, and considered carefully in his judgment, the third alternative which was open to him, namely, that the evidence left him in doubt as to the cause of the aperture in the ship's hull, and that, in these circumstances, the shipowners had failed to discharge the burden of proof which was on them.””

“As a matter of common sense it will usually be safe for a judge to conclude, where there are two competing theories before him neither of which is improbable, that having rejected one it is logical to accept the other as being the cause on the balance of probabilities. It was accepted in the course of argument on behalf of the appellant that, as a matter of principle, if there were only three possible causes of an event, then it was permissible for a judge to approach the matter by analysing each of those causes. If he ranked those causes in terms of probability and concluded that one was more probable than the others, then, provided those were the only three possible causes, he was entitled to conclude that the one he considered most probable, was the probable cause of the event provided it was not improbable.”

“For the avoidance of doubt all of the material is disclosed to you so that you may consider Obsession’s claim against Hi-Lite and then indicate whether there are any additional matters which Hi-Lite should raise in its defence...”

“Further, in my view it also does not matter whether you regard the doctrine of “new intervening act” as part of the law of “causation” or “remoteness of damage”

“The question of the effect of a novus actus ‘can only be answered on a consideration of all the circumstances and, in particular, the quality of that later act or event’. Four issues need to be addressed. Was the intervening conduct of the third party such as to render the original wrongdoing merely a part of the history of events? Was the third party’s conduct either deliberate or wholly unreasonable? Was the intervention foreseeable? Is the conduct of the third party wholly independent of the defendant…?”

“In one case, the Court of Appeal unusually allowed apportionment of causation between claimant and the defendant.”

“The problem which this court faces, on claim and counterclaim alike, is in my judgment a problem of causation of damage. On the claim, the question is how far the damage to its goods which the lessee has suffered was caused by the corporation's negligence notwithstanding the lessee's own breach of covenant. On the counterclaim, the question is how far the damage to the corporation's building which the corporation has suffered was caused by the lessee's breach of covenant, notwithstanding the corporation's own negligence. The effect is that on each question, apportionment is permissible. This is the same result as the 1945 Act would produce, but it is not reached through the Act, because the obstacle which the 1945 Act was passed to override is not there on either claim or counterclaim in the present case.”

“... I regard as particularly significant the number of outlets in the relevant half of the roof for which the corporation and the lessee were respectively responsible, and on a broad assessment I would apportion liability as to 90% to the corporation and as to 10% to the lessee.”

“If the 1945 Act has no application, what is the position on the two claims? The evidence clearly indicates that the damage to the plaintiff's premises was attributable to two concurrent causes, both operating contemporaneously. One was the defendant's negligence and the other was the plaintiff's breach of covenant. I agree with the finding of Dillon LJ that simply as a matter of causation, based upon the amount of water which was wrongfully on the roof, the plaintiff's breach of covenant was a factor of one-tenth of that united cause, and the defendant's negligence a factor of nine-tenths. If the collapse had been caused by the combined negligence of the defendant and some third party, the plaintiff would have been entitled to recover all its damages from the defendant, leaving it to get contribution from its fellow tortfeasor: see Grant v Sun Shipping Co Ltd[1948] AC 549 at p 563 per Lord du Parcq. But that does not apply when the other cause comes from the plaintiff himself. ... Where one is dealing with two contemporaneous causes, each springing from the breach of a legal duty but operating in unequal proportions, the solution should be to assess the recoverable damages for both on the basis of causation.”

“Similarly, we think that the facts and circumstances of the present case are such that it can and should be easily distinguished from those in [Tennant]. We merely add respectfully our view that the scope and extent of this last mentioned case would have to be a matter of substantial argument if the principle there applied were to arise for consideration in another case.”

“On the other hand, in category (i) cases there is no decision in which contributory negligence has been held to be a partial defence. There are powerful dicta to the effect that it cannot be: see the judgment of the court in Tennant Radiant Heat Ltd. v. Warrington Development Corporation [1988] 1 E.G.L.R. 41 , in Bank of Nova Scotia v. Hellenic Mutual War Risks Association (Bermuda) Ltd. [1990] 1 Q.B. 818 , 904, and the observations of Nolan L.J. in Schering Agrochemicals Ltd. v. Resibel N.V. S.A. (unreported), 26 November 1992; Court of Appeal (Civil Division) Transcript No. 1298 of 1992, noted in (1993) 109 L.Q.R. 175 , 177. The defendant's argument that, because the plaintiff owed duties to its employees it was therefore under a duty in its own interest to see that the defendant fulfilled its obligations under the contract, is inconsistent with many cases in which it has been held that employers and others liable to third parties for failure of plant or equipment are entitled to rely on warranties given by their suppliers: see for example Mowbray v. Merryweather [1895] 2 Q.B. 640 ; Sims v. Foster Wheeler Ltd. [1966] 1 W.L.R. 769 , 777 and Lambert v. Lewis [1982] A.C. 225 ... That a contracting party is entitled to rely on the other party to a contract to carry out his undertaking and to act carefully in doing so was emphasised by Devlin J. in Compania Naviera Maropan S.A. v. Bowaters Lloyd Pulp and Paper Mills Ltd. [1955] 2 Q.B. 68 , 77, where he said: “Indeed, I think business, whether maritime or otherwise, might be gravely impeded if the ordinary principle were not allowed to operate freely - and by the ordinary principle I mean that, generally speaking, a man is entitled to act in the faith that the other party to a contract is carrying out his part of it properly. It does not lie in the mouth of the promisor to say that a promisee has no right to assume that a promise has been faithfully carried out and should make his own inquiries to see whether it is or not. If everything done under contract has to be scrutinised and tested by the other party before he can safely act upon it, many transactions might be seriously held up...”” “Indeed, I think business, whether maritime or otherwise, might be gravely impeded if the ordinary principle were not allowed to operate freely - and by the ordinary principle I mean that, generally speaking, a man is entitled to act in the faith that the other party to a contract is carrying out his part of it properly. It does not lie in the mouth of the promisor to say that a promisee has no right to assume that a promise has been faithfully carried out and should make his own inquiries to see whether it is or not. If everything done under contract has to be scrutinised and tested by the other party before he can safely act upon it, many transactions might be seriously held up...””

“In my judgment therefore in the present state of the law contributory negligence is not a defence to a claim for damages founded on breach of a strict contractual obligation. I do not believe the wording of the Law Reform (Contributory Negligence) Act 1945 can reasonably sustain an argument to the contrary. Even if it did, in the present case the nature of the contract and the obligation undertaken by the skilled contractor did not impose on the plaintiff any duty in its own interest to prevent the defendant from committing the breaches of contract. To hold otherwise would, I consider, be equivalent to implying into the contract an obligation on the part of the plaintiff inconsistent with the express terms agreed by the parties.”