LORD JUSTICE DYSON:
Overview of the case
- This is an appeal from the decision of Judge John Toulmin CMG QC whereby he ordered that there be judgment for the Defendants ("TBA") and dismissed the claimants' claim for damages for professional negligence. Before 31 March 1994 the Hammersmith Hospital ("the hospital") was owned by the Secretary of State for Health and managed by the Hammersmith and Queen Charlotte Special Health Authority ("SHA"). The Hammersmith Hospitals National Health Trust was formed on 31 March 1994 to own and manage inter alia the hospital. TBA are a firm of general practitioner mechanical and electrical building services consulting engineers. They are not specialists in combustion, incineration or waste management technology. The claimants' case is that TBA gave negligent advice to SHA in relation to the installation at the hospital in 1993 of two Erithglen Corsair 1000S dual fired waste incinerators. Each incinerator was required to burn 250 kgs of clinical waste per hour, and to produce emissions of carbon monoxide ("CO") not exceeding 100 mgs per cubic metre averaged over an hour. This limit for emissions was the maximum permitted under Guidance PG5/1 (91) issued by the Secretary of State for the Environment in February 1991. The incinerators were manufactured and supplied by Erithglen Ltd ("Erithglen"). The Claimants contend that the incinerators did not achieve the throughput of 250 kgs per hour, and that they exceeded the specified limit for emissions of CO. Eventually, the plant was closed in June 1997. Erithglen went into receivership in September 1994.
History of events in more detail
- Since the 1980s, TBA had been involved in the management and design of 18 projects for the hospital. By the late 1980s, the boilers in the Hospital Boiler House were close to the end of their effective working life. TBA considered various options for their replacement. On 12 June 1990, Erithglen submitted to TBA their first proposal for the installation of Corsair boilers at the Hospital. Erithglen had already installed Corsairs at a number of other NHS hospitals. In November 1990, TBA produced a report describing 4 options (including Corsairs). Amongst these was option 2B, which involved the building of a new boiler house with a large capacity Corsair incinerator.
- In February 1991, the Secretary of State issued PG5/1 (91) to which I have referred.
- On 4 July 1991, the boiler house was destroyed by fire. The need to replace the boilers now became urgent. SHA made it clear to TBA that they favoured an incinerator on site. TBA advised SHA that option 2B was their preferred option. This advice was accepted by SHA. On 14 November, TBA sent to SHA a draft Approval in Principle (AIP) report for final discussion and approval. When approved by SHA, it was sent to the Department of Health for its consent. The report stated that proposals had been sought from four major incinerator manufacturers which would dispose of the hospital's clinical waste, and would satisfy the requirements of impending legislation on clinical waste incineration processes. The proposals included two from Erithglen. One was for a single Corsair 2500S boiler. The other was for a pair of Corsair 1250S boilers each of which was said to have a waste capacity of 312Kg per hour. In their report, TBA endorsed both of the Erithglen proposals.
- On 21 November, TBA submitted to SHA a quotation for a full mechanical and electrical design service for the incinerators. On 2 December, Mr Pym, SHA's project manager, accepted the quotation, and confirmed the appointment of TBA as "lead design consultants", stating that they would be required to undertake the Project Management through to commissioning and completion. Pending approval by the Department of Health, TBA were requested to proceed on the basis of option 2B.
- On 6 December, TBA sent to Mr Piggin, the managing director of Erithglen, a copy of a report received from SHA, which gave SHA's total capacity requirements, including waste anticipated from other hospitals under SHA's control, as 3.2 tonnes per day. On 9 December, Erithglen provided calculations for boiler operations and waste consumption based on two Corsair 1000S boilers. On 12 December, Mr McKenzie, TBA's project manager, wrote to Erithglen asking whether the boilers that it was proposing would meet the requirements of PG5/1, and asking for a copy of the Warren Spring report (see paragraph 8 below). Mr Piggin replied by letter dated 17 December, sending a copy of the report, and saying:
"1) The proposed equipment will fully comply with Environmental Protection Act 1990, Part 1, Secretary of State's Guidance - Clinical Waste Incineration Processes Under 1 Tonne an Hour, PG5/9(91), February 1991."
- The waste capacities claimed by Erithglen for the Corsair 1250S and 1000S were 314 Kg per hour and 250 Kg per hour respectively.
Warren Spring report
- This report was issued in October 1991. It was prepared for the Secretary of State for Trade and Industry. The judge said that "it was an independent report acknowledged on all sides to be of considerable authority". The report was the result of an investigation into emissions from the Corsair 1250S waste incinerator that had been supplied by Erithglen at Ryhope Hospital, Sunderland. The following extracts are relevant:
"3.3.1 Carbon Monoxide
Carbon monoxide (CO) concentrations averaged 670 mg m-3 in test period 1 and were slightly improved in test period 2. Both are well above the CO limit value given in the Secretary of State's Guidance notes for New Clinical Waste incinerators. Mean combustion efficiency was low, averaging 99.3%. It should be possible to achieve combustion efficiencies of >99.9% on modern clinical waste incinerators, although there are no interim requirements for existing plants given in the Guidance Notes. However, existing units of this design will have to meet the EP Act limits by 1995. Therefore, this type of plant will require combustion modification or face closure.
There were frequent, large excursions in carbon monoxide concentration and several of the 15 minute mean values exceeded 1500 mg m-3 (see appendix B)
....
3.4 Reasons For Poor Combustion Performance
There are two general reasons for the poor gas phase combustion. These are:
(a) operational factors such as poorly controlled bag feeding rates, combustion air settings etc, and
(b) engineering design problems.
Both of these problems will need to be overcome if the unit is to perform satisfactorily and fully meet the combustion requirements of the Clinical Waste Incineration Guidance Note. More importantly, performance will need to improve considerably to meet the more stringent combustion criteria being considered by the EC for this process. The detailed reasons for poor gas phase combustion are discussed below."
- The detailed reasons are then set out at paragraphs 3.4.1 to 3.4.4 under the headings of "feeding problems", "furnace door and ram feeder problems", "low furnace chamber temperature" and "low furnace gas residence times". The report continues at paragraph 3.4.5:
"3.4.5 Modifications
Some operational and minor engineering changes were made to the incinerator in the weeks following the trial. A limited retrial to monitor gas phase combustion was undertaken. Although carbon monoxide levels were much reduced and were on average much closer to achieving the 100 mg/m3 limit, there were still appreciable excursions above 2000mg/m3. The data from this short trial were also very limited and further work will be required to establish what further modifications are necessary to satisfy the Guidance Note CO criteria.
The re-trial demonstrated that gas phase combustion problems resulting from low residence times within the combustion chamber and other factors could be considerably reduced by increasing furnace gas temperature and turbulence. Changes to operational practices could also help, but there is a limit to what these measures could achieve and a larger combustion chamber may be required."
The ensuing correspondence
- On 2 January 1992, Mr McKenzie sent a copy of the report to Mr Pym. Mr Pym is a qualified engineer. He did not give evidence. He read both the report and Mr Piggin's letter of 17 December, and on 21 January, he wrote to TBA :
"...
Inevitably the Warren Springs report identifies further issues on which I feel we need assurances from Erithglen, specifically on the following points:-
W.S. Report in 3.3.1 identifies high CO concentrations with frequent large excursions in CO concentrations exceeding 1500mg m-3."
- There was a progress meeting on 22 January at which there were present representatives of SHA and TBA. It was noted that the queries that had been raised had to be clarified by Erithglen before it would be possible to send them a letter of intent. Accordingly, Mr McKenzie wrote again to Mr Piggin on 24 January. He enclosed a copy of Mr Pym's letter and asked for a reply to the points raised. The reply came by letter dated 30 January 1992. This letter, and TBA's response to it, lie at the heart of this appeal. So far as material, the letter reads as follows:
"...
We would answer the questions raised in the letter from the Health Authority as follows:-
3.3.1 - High Carbon-monoxide Concentrations and 3.3.2 - Unburnt Hydrocarbon Emissions.
This plant was ordered in early 1989 as a proto-type plant, and was tested in late 1990 by Warren Springs Laboratory.
The reasons given in the report 3.4 - Reasons for Poor Combustion Performance, have now been solved by the following design changes:-
3.4.1 - Feeding Problems
The elevator is now controlled by an inverter drive, which allows the system to deliver one bag per charge to the new Airlock Loader, see below. This is achieved by detecting the bag at the top of the elevator, slowing the drive and then stopping in approximately 100mm. A second photo-electric cell now detects the bag dropping into the Airlock.
3.4.2 - Furnace Door and Ram Feeder Problems
The furnace door has been re-designed to be airtight. The ram feeder system has been discontinued and a new rotary airlock system has been introduced, thus eliminating this problem completely
The rotary airlock needs no maintenance during its working life and has only one moving part.
3.4.3 - Low Furnace Chamber Temperature
This problem has been largely overcome by 3.4.2. above. Furthermore, the fully modulating primary burner is now controlled by the furnace temperature, thus always maintaining 1050(C.
3.4.4. Low Furnace Gas Residence Times
The furnace diameter has been increased, and the primary and post combustion .. are now controlled by inverters which are controlled by the PLC which responds to high/low Carbon-monoxide levels, due to the charging rate. This has resulted in a far better turbulence within the firing chamber.
Oxygen Injection
Erithglen and BOC are conducting tests on Twin Corsair 1000S Boilers at Derbyshire Royal Infirmary and the new system will contribute the following advantages for our clients:-
1) Higher through-puts with total combustion and burn- out.
2) Reduced gas/oil consumption.
3) Increased thermal efficiency.
4) Substantially lower emissions to atmosphere including Carbon-monoxide and particulates."
- There were no further queries by Mr Pym or Mr McKenzie.
- On 31 January, Erithglen submitted its price for the supply, installation, commissioning and training of operators for two Corsair 1000S boilers. This offer was accepted by Mr Pym in a letter dated 13 February. A number of queries were raised by the Department of Health. These were all answered apparently to the satisfaction of the Department, who gave the project their approval. On 31 March, SHA submitted its official order to TBA. On 5 June, SHA placed its official order with Erithglen. There were express terms of the resultant contract that each boiler would have a capacity to incinerate 250 kgs per hour, and that they would satisfy the requirements of PG5/1(91).
- In due course, the boilers were installed. Practical completion was certified as having taken place on 1 October 1993. The plant operated until it was closed on 1 June 1997. We were told by Mr Wilmot-Smith QC that the boilers were never able to achieve the throughput rate of 250Kgs per hour without exceeding the emission levels for CO prescribed by PG5/1.
The central complaint against TBA
- Many allegations were made against TBA in the amended statement of claim. They did not include the specific allegation that TBA were negligent in accepting the assurances given by Erithglen in the letter of 30 January 1992, and in failing to carry out further investigations into the matters of concern that had been identified by Mr Pym in his letter of 21 January. Indeed, there was no reference to the letter of 30 January in the claimants' pleadings at all. But at the hearing, the letter and TBA's response to it assumed a central position in the attack advanced by the claimants. The sole ground of appeal concerns the way in which the judge interpreted a single answer given by the claimants' expert witness, Mr Hyde, during his cross-examination.
The evidence of Mr Hyde relating to the letter of 30 January 1992
- The critical answer was given by Mr Hyde during the following exchange that is to be found at day 12/166:
"Q: Competent engineers who did not regard the basic concept as fundamentally unsound might well regard Erithglen's assurances as appropriate
A: As I have stated earlier, I think that there are areas of competence which would perhaps consider the assurances appropriate, and others who would take a more sceptical view."
- Before I come to what the judge said about this answer, I need to refer to certain other passages in Mr Hyde's evidence. At 12/68, he agreed that it was an everyday experience for general practice building services engineers (such as TBA) to rely on information from specialist manufacturers. He added "and it is a not infrequent experience to be lied to as well". At 12/149, he was asked specifically about how he would have responded to the letter of 30 January 1992. He said:
"A. Difficult for me to judge, my Lord, how would I have responded in 1991. I tend, I think, to be a somewhat sceptical individual, and had I read in 1991 that they had fitted a larger combustion chamber, that they have - and that they have achieved a greater degree of turbulence by installing inverters I think I might have been sceptical at that time.
JUDGE TOULMIN: Only might?
A: Probably would. I cannot say for certain but I think so."
At 12/157 the following exchange took place in relation to the letter:
"Q. So to a non-specialist that provided a good level of comfort for going ahead?.
A. It provided a level of comfort but whether it provided sufficient comfort to go and spend over a million pounds before one had actually seen one tested at its rated throughput is a matter of opinion and probably an area in which I tend to disagree with Mr Carver."
And then at 12/158-9, the following occurred between Mr Hyde and the judge:
"A. I think you have, yes. I am saying that the areas that Erithglen were addressing in their letter of 30th January 1992 were moves in the right direction, but there was no proof there that it was - that they had done enough to completely rectify the problem.
JUDGE TOULMIN: So they were entitled to be comforted to some extent by what was in that letter?
A. I think that is reasonable, yes.
JUDGE TOULMIN: And there was nothing in that letter which amounted to a - either a glaring omission, in other words, an area of the Warren Springs report which was not dealt with, nor alternatively a comment in that letter which should have put them on enquiry that things were not as good as Erithglen said they were?
A. Well, I believe that a - to look at the letter with a sceptical eye and to think, "What are they doing, how much have they done, is this really going to cure the problem", would have resulted in them still being on warning that maybe the problems are not yet right.
JUDGE TOULMIN: And what should they have done about it?
A: Recommended that the installation of, or the commitment to those boilers should be delayed until a working installation can be found."
- A little later at 12/166 there was the critical answer to which I have referred. At 13/54, Mr Wilmot-Smith explored that answer with Mr Hyde in re-examination as follows:
"Q. Did you mean or intend to convey that answer, by that answer, that a competent engineer would accept the assurances as being appropriate or otherwise?
A. I think a competent engineer should have maintained a reasonable degree of scepticism.
JUDGE TOULMIN. He may have maintained a reasonable degree of scepticism, the question is what, if anything, he should have done about it on the basis of the letter which he received?
A. I think he should have asked for further information: how much larger is the combustion chamber going to be; how have you dealt with the airlock doors."
- The judge challenged that last answer by pointing out that during his cross-examination, Mr Hyde had been taken through each of the sub-paragraphs of the Warren Spring report, and had agreed that the answers given by Erithglen in relation to them had been acceptable.
- The judge accepted the evidence given by Mr Hyde at 12/166. At page 29 of his judgment, he said this:
"Mr Hyde for the SHA made serious criticisms of TBA in his written reports and maintained in evidence that he would in the circumstances have made further checks, but conceded in relation to Mr Piggin's letter dated 30 January 1992 that a non-specialist would have been comforted by Mr Piggin's answers, and that it was apparent from the Warren Springs Report that further development work could be done and was being done and that some competent engineers "would perhaps consider the assurances appropriate and others would take a more sceptical view." Despite efforts in re-examination to encourage Mr Hyde to modify this answer I am satisfied that it represents his considered opinion. If I accept Mr Hyde's opinion I should conclude that a reasonable body of the profession would have acted in the same way as Mr McKenzie."
Correct interpretation of Mr Hyde's answer
- Mr Wilmot-Smith submits that the judge misinterpreted the answer given by Mr Hyde. He contends that the judge construed the answer as a volte-face, or a retraction of all that Mr Hyde had previously said, and was wrong to do so. The opening words "as I have stated earlier" show that Mr Hyde was not intending to say anything new, still less to say something that would completely undermine his opinion that TBA had been negligent in recommending the Corsair boilers. Mr Wilmot-Smith makes the further point that the judge should have appreciated that his interpretation was wrong, since it was at odds with the very clear answers that he gave in re-examination to which I have just referred. Finally, he criticises the judge for holding that the answer represented Mr Hyde's "considered" opinion: it was, in effect, an "off the cuff" remark made in an unguarded moment when he was being pressed in cross-examination.
- I cannot accept these submissions. As Mr Bartlett QC points out in his skeleton argument, in the passages at 12/68 and 149, Mr Hyde had said that he had a particular tendency to be sceptical about assurances given by manufacturers. That is entirely consistent with his answer at 12/166. It is clear that Mr Hyde was referring to those earlier answers when he said at 12/166 "as I have stated earlier…". He was saying that he tends to be sceptical, but he was not saying that there were not other competent engineers who would be less sceptical. At 12/157, he was saying that to a non-specialist (like TBA), the letter provided a level of comfort, but whether it provided sufficient comfort was a "matter of opinion and probably an area in which I tend to disagree with Mr Carver". Mr Carver was the expert called by TBA. In the succeeding answers given at 12/158-59, Mr Hyde was making it clear that he would not have accepted the assurances given by the letter. But he was certainly not saying that in his opinion all reasonably competent non-specialist engineers would have shared that view.
- In my opinion, therefore, the answer given at 12/166 was consistent with the earlier oral evidence to which I have referred. It was a clear and unambiguous answer, and in my judgment, the judge did not misinterpret it. The judge was alive to the fact that, during his re-examination, Mr Wilmot-Smith had successfully "encouraged" Mr Hyde to retract the damaging answer that he had given earlier. The judge was entitled to conclude that the earlier answer reflected Mr Hyde's true and considered opinion. In any event, I do not accept that the answer was a volte face. Mr Hyde was always of the opinion that, upon receipt of the letter of 30 January 1992, TBA should have made enquiries to satisfy themselves that the modifications described in the letter had been effective to cure the problems identified in the Warren Spring report. That was what he had said in his report, and what he said at the trial. In his report, he did not address the question whether there was room for a different view as to whether a reasonably competent general services engineer would have accepted the assurances given by Erithglen in the letter. But he was asked to consider this question when he was cross-examined. In my judgment, the passage at 12/157 shows that Mr Hyde considered that there was room for a reasonable difference of view as to whether the letter provided sufficient assurance. It is worth repeating what Mr Hyde said: "…is a matter of opinion and probably an area in which I tend to disagree with Mr Carver" (my emphasis). The words that I have emphasised are not the language of a witness who is asserting that there is no room for a view other than his own as to what a reasonably competent general services engineer would have done on receipt of the letter.
- It follows that the judge did not misunderstand Mr Hyde's answer at 12/166. He construed it correctly in accordance with its plain meaning. It was not inconsistent with the rest of Mr Hyde's evidence. It seems to me that Mr Wilmot-Smith's argument conflates two distinct strands of Mr Hyde's evidence. These were that: (a) in his opinion, TBA should not have accepted the assurances given by the letter of 30 January; but (b) other (less sceptical) reasonably competent engineers would or might have regarded the assurances as sufficient and, therefore, acceptable. In his report, Mr Hyde concentrated on (a). During cross-examination, he conceded (b).
- I should make it clear that Mr Wilmot-Smith does not contend that the judge's conclusion that "a reasonable body of the profession would have acted in the same way as Mr McKenzie" was not open to him on the evidence. The judge did not base his conclusion simply on an acceptance of the single answer given by Mr Hyde. In view of the very limited scope of the argument advanced by Mr Wilmot-Smith on appeal, it is not strictly necessary to consider the other matters relied on by the judge. But, in summary, they were that: (i) Erithglen was regarded as a reputable manufacturer at the time; (ii) Mr McKenzie was a conscientious, competent and truthful witness; (iii) before the incinerators were accepted under the contract, they would be subject to performance tests; (iv) the letter of 30 January sounded reassuring, and it would only have been if TBA had had prior knowledge or suspicion that the Corsairs had been under-performing at Derby or elsewhere that they might have been put on enquiry; (v) there had been visits to the Derby plant in October (by Mr Cross of TBA) and in December 1991 (by Mr McKenzie together with Mr Wright and Mr Croydon of SHA), and during conversations with the plant operators on those occasions, the judge found that nothing "detrimental" was learnt; and (vi) in 1990, Mr Hyde had written reports on the possible installation or upgrade of Corsairs at Ealing and Walsall hospitals, and none of the reports suggested that CO emissions were a problem.
- For the reasons that I have given, however, I am of the opinion that the single ground of appeal must be rejected. I would dismiss this appeal.
LORD JUSTICE SEDLEY:
- I agree with both judgments.
LORD JUSTICE BROOKE:
- This was an appeal against the judgment of an experienced judge who made a number of detailed factual findings to support the conclusions he reached. For example, at the outset of his judgment he set out the qualifications and experience of Mr Pym (the project manager appointed by the claimants in 1991 to co-ordinate the development of the new energy centre at the hospital) and Mr Wright (who was at the material time the consultant unit works officer responsible for the boilers at the hospital within the project team). He concluded that both these men were sophisticated and experienced users of TBA's services, who were able to understand and evaluate the advice they were given and to initiate their own questions to be answered by Erithglen. In paragraphs 10-12 of his judgment Dyson LJ shows this process at work in relation to the contents of the all-important Warren Spring report.
- Mr Wright himself, together with Mr Croydon, the hospital's energy adviser, had visited the Corsairs in operation at Derby in December 1991 together with Mr McKenzie of TBA. The judge found that they talked to the operators of the plant and learned nothing detrimental, and when he came to comment on the letter from Erithglen dated 30th January 1992, he said:
"Although the responsibility rested with Mr McKenzie I have no doubt that either Mr Wright or Mr Croydon, who had also recently visited the plant at Derby, would have asked questions directly or through Mr Pym if they had been concerned about what they had seen or heard."
- The judge said that he accepted Mr Hyde's oral evidence that at the end of 1991 Erithglen was regarded as a reputable manufacturer. He also found that by early February 1992, when the Department of Health initiated a number of queries of Mr Pym and his project team, the department would have had knowledge of the other NHS projects where the Corsairs were already operating. If anything seriously detrimental had been known to the department about those projects, either in terms of environmental safety or performance, it would have told the claimants that this project would not be approved.
- The judge recorded without criticism Mr McKenzie's evidence to the effect that he regarded it as his duty within his general competence to evaluate the options and to look critically at the data provided by Erithglen from the standpoint of a building services engineer, and not as an expert in combustion incineration or waste handling technology. He said that Mr Mackenzie came across as a conscientious, competent and truthful witness. He added that he bore in mind the fact that the correspondence must be read in the context that there were ongoing and regular discussions between Mr Pym on the one hand (whom the claimants did not call to give evidence) and Mr McKenzie and his supervising partner Mr Vince on the other.
- This case was "fact rich" and an appellate court needs to bear this in mind when it is invited to overturn the decision of a trial judge on an issue of this kind. The judge saw and heard the evidence of 16 witnesses of fact (ten of whom were engineers) and two engineers called as experts, and his judgment reveals an impressive degree of understanding of the evidence he was given. Although the judge refrained from commenting in general terms on the evidence he received from the claimants' expert Mr Hyde (who was an associate director of Ove Arup and Partners, with 13 years experience of energy consultancy commissions carried on by that firm), he clearly drew some comfort in the conclusions he reached from the fact that in two Ove Arup reports which Mr Hyde had supervised in 1990 nothing detrimental was said about the soundness of Corsair technology. I bear in mind Mr Wilmot-Smith's argument that these reports did not result in positive recommendations, but it seems to me that this was a matter the judge was fully entitled to take into account when deciding whether or not TBA were negligent in not making further inquiries after receiving the Erithglen letter.
- I agree with Dyson LJ's analysis of the effect of the critical answers given by Mr Hyde while he was in the witness box. I therefore agree, for the reasons he gives, that this appeal should be dismissed.
ORDER: Appeal dismissed with the costs.
(Order does not form part of approved Judgment)
