Blue & White Barra Pty Ltd v Solley No. DCCIV-99-1327

BLUE & WHITE BARRA PTY LTD V SOLLEY
[2000] SADC 127

Judge D. Bright
Civil

The plaintiff is the owner of a fish farm at Murray Bridge. On 9th May 1998 a fire occurred. It began in an electrical switch box. The defendant is an electrician. He performed all electrical work at the premises, including, in particular, all electrical work in the vicinity of the point of origin of the fire. The plaintiff blames him for the fire. He denies responsibility.
The plaintiff is a company which was formed by a Mr. White and a Mr. Nourse for the purpose of the farm. Mr. White is a businessman whose background is as a builder and manager. At one stage, he owned a large franchise for Ezy Bilt garages and sheds. Later he was manager of a factory which manufactured and pelletised fertiliser. He is a practical, hands-on man. He became interested in farming barramundi and, over a number of years, researched articles on the subject and learned as much as he could about it. He examined both the physical requirements for a successful farm and also the economics of owning such a farm and selling its produce. He believed he saw an opening. He persuaded Mr. Nourse to arrange for Nourse money to be invested. Both men were to provide labour. Most of the expertise was Mr. White’s.
In 1996 they leased a large shed in Murray Bridge. It was about 33 metres x 16 metres and about 25 years old. It had been built as a poultry battery and used for that purpose for about 20 years. For that reason it had adjustable vents along the roof ridge and also good ventilation at the eaves. When poultry farming ceased, the batteries were removed, leaving the shed empty. It remained so, apart from a short period of use as a car workshop, until the plaintiff took a lease.
Messrs. White and Nourse re-furbished the shed to some extent, and cleaned it up. The basic structure is a series of steel trusses, which rest on steel columns. Those trusses and columns are linked by timber purlins, to which corrugated iron has been nailed. Between the iron and the purlins insulation was placed, consisting of aluminium foil sarking, to which was fixed a felt, or rock wool. By the time the plaintiff moved in, that insulation was still in reasonable condition, but some had torn away, or was hanging down.
The steelwork had been painted with red paint which was, in some areas, in good condition. In others, rust was developing appropriate to its age. Mr. White and his son brushed down and wiped all the steelwork and did what they could to tidy up the insulation. They then lined the whole shed, walls and roof, with orange Fortecon plastic of the sort often used under foundation slabs. The shed runs north - south. The front is to the north. A Fortecon curtain was hung across the shed about two thirds of the way towards the rear.
The larger space was devoted to the tanks in which the fish were to be raised. The smaller space housed ancillary equipment, feed and the like. A small office was built as a lean to to the outside of the western wall.
In briefest terms, the plan was to buy fingerlings when about 70mm long and then to grow them over a period of about 6 months to about 600 grams in weight, at which time they could be sold. It was planned to have enough tanks to have fish at all stages of development in a continuous cycle.
Each tank was about a metre deep and perhaps 5 metres in diameter. Some were constructed of masonry and some of steel. Each tank needed to be maintained at a constant temperature and so required a heater. The water had to be kept clean and in good condition. To achieve this, each tank had a pump which removed water, pushed it through a filter rather like a swimming pool filter and then back to the tank via a venturi to which an air tube was attached. Thus the water was aerated and cleaned. The nozzle of the venturi was so aimed that it caused the water in the tank to circulate gently.
A particular problem is that excreta and other waste generate ammonia, which must be removed from the water. To do this, another pump drew water from the tank and pumped it to the top of what is called a bio-filter suspended above the tank. The water percolated through that filter and down into the tank.
This is enough to explain why electricity was needed to each tank to power the pumps and the heaters. I turn to the electric supply. Three phase power came from a pole in the street to a junction box on the outside of the northern end of the shed. It then went through three cartridge fuses, one for each phase. From there it went to a switchboard (switchboard “A”) inside the lean to office. The wiring of the shed took place in various stages, but, by the time of the fire, there was power to 6 tanks, to a few other power points, to lights and to a sub-board (switchboard “B”) on the eastern wall, intended to power future tanks.
There has been some disagreement about some details of the history of the installation, but, in the end, they do not matter much. There is no evidence that the defendant selected (or advised the selection) of inappropriate materials or equipment. I am not satisfied that the choice of a cheaper, rather than a more expensive switchboard box is relevant. There is no evidence that the defendant’s design or layout of his work was defective. Apart from inferences I am asked to draw from the occurrence and location of the fire, there is no specific evidence of faulty workmanship by the defendant.
It is clear that the fire began in switchboard “A”. The face plate, or escutcheon, has a hole burned in it. I accept that the hole was caused by arcing of electricity between the escutcheon and some nearby source of live power. There are further holes in the back of the metal box containing the switchboard. They, too, appear to result from arcing.
Both sets of holes are fairly low down in the switchboard. The holes to the escutcheon are perhaps 15cms to the right of those to the box. The pattern of smoke/heat damage to the escutcheon suggests that the fire started near the hole in the escutcheon and spread towards the area of the holes in the box. If so, it could easily have burned or melted insulation from wires in that area, leading to further arcing. It is possible, though less likely, that it started at rear left and proceeded to front right.
The main force of the fire was upward. All of the non-metallic contents of the switchboard were completely destroyed. What remained was a tangle of now uninsulated wires, some of which still terminated in the brass clamps which had formerly been part of circuit breakers, or other components. None of those components remained in any state to enable anyone to consider whether, or how, any of them may have failed. There was no evidence after the fire that any of the heaters, pumps, lights, or other appliances in use in the shed had malfunctioned in any way. It is probable that, when the fire broke out, pumps and some heaters were operating.
In these unfortunate circumstances, Mr. White has cast around to try to identify a cause for the fire. He purports to recall two minor incidents which might be relevant.
Shortly before the fire, the defendant had wired into the supply circuit a large emergency generator. To do that, he removed the escutcheon from the switchboard and disconnected the four conductors (3 active phases, plus neutral) from the top of the main switch at the top left of the switchboard. On the same wall and nearby he mounted a change over switch to enable power to come in either from the generator, or from mains power. Wiring went from the generator to that switch. The wires which had been disconnected from the main switch in the switchboard were connected to the top of the changeover switch. A new length of cable was then installed between the bottom of the changover switch and the top of the main switch. Thus, apart from removing 4 conductors from the top of the main switch and then putting 4 new conductors in to re-connect, no changes were made to the wiring inside the switchboard.
Mr. White says that he saw the defendant make that re connection. It appeared to be rather difficult. Mr. White inferred that the switchboard was crowded and that the defendant was having trouble fitting in the new cable. Did he, in forcing the new cable in, damage or dislodge anything else?
The defendant denies it. He says that the cable containing the four new wires was 16mm in diameter and rather hard to bend. He was making a link between two points quite close together, which involved making a number of bends in the cable. That may have appeared difficult. However, once bent into place, the cable only filled the space vacated by the original cable. It did not increase the mass of cable in the switchbox. In any event, he says, the box still had room for at least half a dozen more circuit breakers and associated wiring.
The holes in both the escutcheon and the back of the box are perhaps 50cms below the top of the main switch. They do not appear to be associated with any defect at or near the point of re-connection. It would be odd for much heat to descend to a lower point if there were a defect. There is no reason why he would have done so, but I suppose it is possible that the defendant inadvertently pulled loose a wire terminating near those holes. He denies doing so. There is no evidence that he did. One would think that the force necessary to do so would be great enough to mean that it would not pass unnoticed by an electrician.
I am not persuaded that anything untoward occurred in the course of installing the generator which gave rise to the fire.
There is alleged to be a second incident. There had been a history of experimenting with heaters. At first, three element, three phase heaters were installed in each tank. This resulted in an overload and excessive, expensive electricity consumption. It was decided to disconnect one element in each heater and to re-wire the connections to the remaining two. The wire at each tank which was disconnected was also disconnected from its circuit breaker in the switchboard and capped at each end.
About 10 days before the fire Mr. White noticed that the circuit breakers to the heater for tank No. 5 had tripped. He called the defendant. The defendant says he attended and began by simply trying to re-set the circuit breaker. It tripped again at once. He realised there must be a problem with the heater. He went to it and ran his hands up each of the elements, feeling for pitting or other obvious defects. He found none.
He then opened the junction box containing the connection between the wiring circuit and the elements. There were two elements and he had a 50/50 chance of guessing which was faulty. He disconnected one. He says that he then went back to the switchboard and re-set the circuit breakers. They did not trip, so he realised he had disconnected the faulty element. He switched off the circuit breaker, removed the faulty element, disconnected the wire leading to it from its circuit breaker and capped each end of that wire. He then re-set the circuit breakers.
The effect of this was to leave one element acting as a single phase 240V heater. To maintain the temperature of the water, it would have to be on for longer than the previous 2 element set up. All the heaters were on timers, so arranged that they would come on at night when the cheaper “J” tariff applied. Now that tank 5 had to stay on longer it would have to be set to run longer. He says he asked Mr. White to re-set the timer for tank 5 to whatever time he chose.
Mr. White remembers the incident differently in some respects. He says that the defendant did not run his hands over the elements in the water. He says that the defendant disconnected one element and asked Mr. White to re-set the circuit breaker. He did so and there was an immediate white flash and a loud bang as the circuit breaker tripped. Obviously the faulty element was the one still connected, so, having identified it, the defendant disconnected it and re-connected the good element. Mr. White says he swore at the flash/bang with fright and commented on it to the defendant. The defendant denies it. He says he would not ask anyone else to assist him - he does his own switching on and off. He denies ever hearing of or about a flash/bang until much later. He denies that his first experimental disconnection resulted in the faulty element remaining connected.
I must decide between the two versions. Each was clear about it. It is a matter far more likely to be recalled by Mr. White, who was shocked by it, than by the defendant, who might be expected to be more used to it. As against that, Mr. White’s version was not documented until a good while after the fire and, given his belief that it was significant, that is odd. There is some force in the defendant’s assertion that he just would not allow another person to activate circuits on which he was working. I prefer the defendant.
In the end it may not matter much, but, for a good while, it was seen as significant. I shall try to explain that. No photograph or plan of the switchboard pre dating the fire exists. In the course of instructing an expert, the defendant drew a sketch, depicting the three rows of circuit breakers in the switchbox. He designated the three phase circuit breakers with numbers which the expert - and the advisers to plaintiff and defendant - took to refer to the number of the fish tank, to the heater of which that circuit breaker related. The circuit breaker numbered 5 is very close to the hole burned in the escutcheon. The questions arose: “did the flash/bang in the course of work on tank 5 damage the switchboard, or any of its components? If so, should the defendant have appreciated the risk of that occurring and done something about it?”
Professor Hobson, a well qualified electrical engineer described a possible problem. Whenever contact points in a circuit breaker under load are tripped, or opened, there will be a spark, or arc generated. What was described was a big flash. The spark is, or it generates, ionised gases, partly consisting of vapour from burning of the contact points and partly from heat effects on plastic parts inside the circuit breaker. Depending on the circumstances of a particular tripping incident, more, or less, gas will be generated. Circuit breakers are specifically vented (at the top rear, in the case of those used here) to enable gas to escape. That gas may deposit carbon inside and outside the circuit breaker. Such a deposit can lead to the development of electrical paths or tracks, leading from the live components of the circuit breaker to points of different potential, such as the earthed escutcheon plate and switchboard box. Once a deposit of conductive (or partly conductive) material occurs, tracking develops at an unpredictable rate.
It may reach a stage where a track is close enough to, say, an earthed component, for current to jump, or arc, across to that component. That arc may be hot and could be hot enough to cause the holes burned in the escutcheon plate and box. In the absence of specific evidence pointing to some other cause, Prof. Hobson believed that this phenomenon could be the explanation here.
Mr. Kutek, also a well qualified electrical engineer, was not aware of this problem in relation to circuit breakers, though aware of the phenomenon of tracking generally. He thought it a most remote possibility.
Prof. Hobson relied on his experience in a laboratory set up to test electrical components to destruction to determine whether they complied with Australian Standards. He had not personally seen it, but was aware of the problem from discussions with others specifically involved in testing circuit breakers. He did not think it was a well known phenomenon and was not aware of articles or text books referring to it.
Prof. Hobson referred to the fact that many electrical components are not individually tested on manufacture. Samples are tested for conformity with design standards. Despite care, there can be no guarantee that a particular component sold in a shop, such as a circuit breaker, will be free from defect. It is human experience that duds do get through occasionally.
Mr. Kutek made the comment that it would be odd if, within their design parameters, circuit breakers were known to fail in this way. To answer this the defence called Mr. Platt. He is an electrical engineer who has performed the specific tests relied on by Prof. Hobson. He confirmed that he, personally, had seen deposits of carbon form over the exterior and interior surfaces of circuit breakers while he tested them, which were capable of leading to tracking.
Against this background, it is suggested that arcing near the circuit breaker which had been subject to a severe flash/bang was predictable after that event and should have been adverted to by the defendant. Prof. Hobson did not agree that an ordinary competent electrical tradesman would have known this - quite the contrary. Mr. Kutek was not aware of it, and thought it most unlikely. I do not think he would have expected the defendant to have adverted to it.
Of much more significance, there is now dispute as to whether or not the circuit breaker nearest to the arcing went to the heater in tank 5, anyway. The evidence that it did comes from Mr. White, who, for his own purposes, had numbered the circuit breakers with texta pen numbers on pieces of duct tape stuck to the escutcheon. There is no reason to doubt that he did that correctly. The numbers were seen by the defendant. No trace of those numbers survived the fire.
Mr. White recalls that the circuit breaker for tank 5 was in the bottom row adjacent to the hole in the escutcheon. He supports his recall by claiming that this location matches what one would expect if the tanks corresponded in their location and numbering to the location and numbering of the circuit breakers on the board. With two three phase breakers on each of the three rows on the board, No. 5 would be the left of the two on the 3rd row. Mr. White recalls that that is what he found when he numbered the circuit breakers.
The defendant denies that. He says that the very reason for numbering the circuit breakers would have been because they did not follow that logical sequence. He said that his practice when installing circuits was to run wiring from all appliances or power outlets back to the switchboard and then to connect up to the circuit breakers on the board. Connection to circuit breakers would occur in random order as he selected the next cable from the bunch of cables awaiting connection. Having made those connections, he would put little round plastic tags with various colours and numbers in order along the rows of breakers on the board. He would then, by testing, establish where each numbered circuit terminated and would place a corresponding tag on that conductor at the outlet or appliance it supplied. Thus, the circuit numbers he affixed, though in sequence on the board, would bear no relation to the physical location or order of the outlets or tanks supplied.
In a recent inspection (he had kept away from the plaintiff’s farm since assisting in the immediate aftermath of the fire) he noticed that his circuit numbering tags were still in place on, in particular, the heater to tank 5. It was circuit 3. He says that that would have been connected to circuit breaker 3 on the board, which was the 3rd from the left on the top row of two single phase circuit breakers and two 3 phase breakers. Circuit 3 would relate to the first 3 phase circuit breaker. That circuit breaker was nowhere near the hole in the escutcheon (or those in the box).

If that is right, any problem arising out of work on tank 5 does not seem to be related to the arcing giving rise to those holes, regardless of whether it was, or was not, competently performed. The flash/bang would be irrelevant. Again, the physical work in disconnecting the wire which had gone to the faulty element, involved no more than removal of the escutcheon, loosening of a screw at the top of the circuit breaker, pulling out the end of that wire, screwing a cap over it, perhaps screwing in the screw on the circuit breaker in case it fell out, and replacing the escutcheon. None of that is likely to have affected a breaker in the bottom row, or the wiring attached to it.
In the absence of a flash/bang to a breaker in the bottom row, and considering that they were relatively new and, apparently, not subjected to abnormal loads, it seems to me that the phenomenon of tracking becomes less likely. It increases the chance that some other explanation is the correct explanation. Though I prefer the defendant, I note that Mr. White asserts that the defendant did not even open the escutcheon that day - in which case it would be impossible for the defendant to have loosened or dislodged anything inside.
Having regard to the circuit numbering tags, I think it more probable than not that the heater to tank 5 was connected to circuit breaker 3 in the top row and not to circuit breaker 5 in the bottom row. I so find. Even had I not so found, I would not have found the defendant negligent in failing to appreciate the need to check a circuit breaker after a flash/bang for the possibility of a carbon deposit which might lead to tracking. Even if it had been warm to the touch after such an incident, a) it appears that the defendant did not, on Mr. White’s version, return to the switchboard for some time, and, b) I don’t know what he ought to have made of it if he had felt warmth.
The left side of a circuit breaker at the left end of a row of breakers could be seen or touched if the escutcheon was off, as could the right side of a breaker on the right. Other breakers would have their front and, perhaps, a bit of their top visible and touchable. The relevant breaker would have been one of these. The opportunity to see or feel anything must have been very limited.
The possibility of a loose terminal has been raised. In relation to tank No. 5, it was suggested in argument that the shock of a flash/bang may have loosened the terminal on that breaker. No evidence was given to that effect. However, one assumes that, if it occurred, it was produced by the faulty heater element. That element was then disconnected and, so, no current thereafter passed through the wire and terminal leading to it. That is so whether it was disconnected at the element only (as Mr. White asserted) or at both ends (as the defendant asserts).
The relevant breaker had originally been 3 phase, then it was reduced to two. I am not clear whether a defect in one element could produce a flash/bang in the wire or breaker connected to the good element. It was only the wire to the good element that remained connected when the heater was reduced to one element. No mechanism was suggested, or proved, whereby such a flash/bang might cause a terminal to become loose. I cannot conclude that any flash/bang was associated with any loosening of any terminal screw.
For these reasons, I am not persuaded that either of the two incidents referred to by Mr. White proves any want of care on the part of the defendant, even on Mr. White’s version of those incidents.
This leaves me, as it has left others, to work back from the fact of the fire to consider whether that fact, standing virtually alone, establishes that want of care. The fire did happen. What caused it?
Mr. Kutek said that a possible cause is a loose connection between a wire and a circuit breaker near the hole in the escutcheon. I took him to refer to a connection which was loose because the defendant had failed to screw it up tightly. He says that such a loose connection can get hot, perhaps hot enough to damage insulation, allowing a wire to melt through to some adjacent wire or other component. That could, in time, produce arcing.
He found, in the debris in the switchboard after the fire, a terminal to a circuit breaker with no wire attached and with its screw screwed out to a point where it would not grip a wire. Unfortunately, that proves nothing. We know that, in the conversion from 3 element to 2 element heaters, 6 wires were disconnected. A seventh was probably disconnected when the faulty element in tank 5 was disconnected. Whether, and, if so, how far the screws in the terminals those wires occupied, were screwed back in is not known. The terminal found could be any one of them, rather than evidence of a faulty connection which was still live at the time of the fire.
Prof. Hobson and the defendant point out that, even accepting the hypothesis of a loose connection, the current flow through it would have been that drawn by the appliance supplied by it. No appliance drew so much current as to come near to exceeding the capacity of the wire connected to it. The amount of heating in that wire would not have been enough to damage insulation, even allowing for some heating at a loose joint. Prof. Hobson had personally subjected a sample of the wire used to a blow torch without damaging the insulation enough to explain the fire.
Mr. Kutek referred to what he called a “non Ohmic” resistance being possible over a loose joint. He theorised that such a condition could generate otherwise unexpectedly high temperature. Prof. Hobson doubted it. The evidence does not allow me to regard it as a very likely explanation. It was noted that, after the fire, the clock in the timer for the heater on tank 5 was not set at the same time as the remaining timers - it was 10 minutes or so behind. Mr. Kutek said that that could be consistent with an intermittently interrupted circuit due to a loose joint. However, we also know that it had been re set ten days earlier, after the work on tank 5. How much care was taken to set it accurately? It could just be a manual error. There was no need for the timer to be set with any exactness. I am not satisfied that tank 5 had anything to do with the fire. If so, deductions cannot be made from the timer to that tank.
However, in the absence of other competing explanations, even an unlikely one may, in the end, be the most probable.
Mr. Watson is a very experienced electrical tradesman, then employed by ETSA to investigate electrical mishaps, to determine what caused them and whether statutory regulations and standards had been breached. He was involved in formulating some aspects of some standards and in some aspects of testing electrical components for compliance with them.
He carefully examined the scene over the days following the fire and spoke to various people involved. He noted at that time that the circuit to the heater on tank 5 was circuit 3. He examined the switchboard and the burned out wiring. In the end, he was not able to say what caused the fire, beyond agreeing that it probably began with arcing near the hole in the escutcheon. He enumerated “the usual suspects”, which were moisture, pollution/rubbish, rodents and the like. He did not see the board before the fire, but did see sub-board “B” on the eastern wall, which was not damaged in the fire. Nothing about that board suggested these sorts of problems. The evidence of both Mr. White and the defendant satisfied me that the main switchboard was clean and free from flammable rubbish, moisture and rodents. I cannot exclude the possibility of what counsel called “a single Kamikaze rat” - but it is most unlikely.
So I have a fire which broke out in a switchboard. The appliances and components of all kinds connected to the board appear to be appropriate. The design and the apparent installation of the wiring and appliances seem appropriate. There is no evidence which I accept pointing to a pre existing fault of any kind.
I am left with the possibility of a non Ohmic joint consequent on failure to tighten a terminal properly. I am left with the possibility of a manufacturing defect in a component, presumably, one of the circuit breakers. Could tracking, leading to arcing have developed? Is there some other explanation altogether?
I note that the screws to the terminals at top and bottom of the circuit breakers are clearly visible when the escutcheon is removed. Within broad limits it is easy to see which are screwed in a long way and which are not - I doubt you would notice the difference between a screw just tight enough to hold and one not quite tight enough. The defendant believes that, had a wire been lifting out of a terminal, it would have been easy to see the exposed shining copper above the terminal, where all that should have been visible was insulation. He did not see that.
If there was a loose connection to a terminal, it probably did not involve the relevant wire lifting up, or out of its socket, in the terminal. If it had come loose and lifted out, once out of contact with its terminal it should have caused no problem beyond ceasing to power the appliance to which it was connected.
I am unable to say whether the remote chance of trouble from a non Ohmic joint is greater than that of some manufacturing defect in a component, or greater than the possibility of some other cause to which the evidence has not adverted. Mr. Watson, with many advantages over me, could not say how the fire started. Neither could Prof. Hobson, or Mr. Kutek. Neither can I.
To the extent that the res ipsa loquitur doctrine is different from the course of logic I have already followed, I note that I am not able to be sure (on balance) what went wrong. It is possible that the defendant is responsible. He may have left a terminal loose, he may have dislodged a wire in the course of work on the switchboard. He may have done something else. I accept that it is very unlikely that anyone other than he had anything to do with installing or connecting up the switchboard. If anyone did something wrong in connection with it, it was probably him.
On the evidence, it is not possible for me to deduce, as a matter of common knowledge, that the only probable cause of the fire was some wiring defect, and that any such defect could only have occurred as a result of negligence on the part of the defendant. I cannot exclude component failure of some kind. I cannot exclude the possibility that Prof. Hobson’s explanation about tracking and arcing is correct - and, if so, that that involved no negligence on the part of the defendant. I cannot exclude the possibility of there being some other cause within the switchboard not adverted to in evidence and not now ascertainable because of the destruction of the switchboard.
Given the failure of the experts to come up with the solution, at least with any reasonable degree of certainty, I cannot do so as a matter of lay, common sense.
It must follow that the plaintiff has not established any breach of the duty owed by the defendant.
This makes the task of assessing damages rather academic. However, in case I am wrong, I shall deal with that question, albeit in less detail than if I were actually ordering payment.
Assessing loss to any business after a fire is always complicated by missing records and the like. In a long established business, patterns of production and trade may be predictable. In a new business, one must deal, to a large extent, with hopes rather than proven form. The fact that the reason for extensive fish deaths, even after damage was apparently repaired, is not known adds to the plaintiff’s problems in proving loss.
With a relatively new business, one expects that there will have been problems; that all will not have gone quite as expected. With any luck, problems will gradually be overcome and the business will move into profitability. For want of that luck, many young businesses fail. If such a business is, for example, burned out, it is not easy to prove what the future held.
In this case at least the bulk of the records were lost. Mr. White’s daughter, Mrs. Johns, and her sister performed a prodigious task in re-constructing records. After getting copy records from banks, suppliers, customers and so on, they have created what appear to be pretty reliable records. Most items are covered by more than one document - e.g. a purchase may be proved by a copy sales docket, a reference to a cheque number and then a reference to a copy bank statement. Insofar as the records depend on the accuracy and industry of Mrs. Johns, I have no hesitation in accepting them.
An area of difficulty is in establishing how many fish were bought, grown and sold. Some corroboration is found in records of suppliers and purchasers. The plaintiff’s claim is largely based on certain projections for what activity would have occurred at various times. While internally logical, those projections do not match the records of sales and purchases.
One reason for this is that the records of fish deaths (and some deaths are inevitable) are not accurate. Mr. White, his son, an employee, Dave, and Mr. Nourse all made entries from time to time in a notebook and, later, on pro forma sheets to record daily losses. Minor losses are “in house” matters relevant to the efficiency and profitability of the business. Major losses should be reported to the Dept. of Fisheries, which has responsibility to monitor aquaculture for disease.
The plaintiff, as it emerged in the evidence of Mr. White, had several instances of large numbers of deaths. He believed that they reflected various operational problems, but did not result from disease. He chose to conceal these losses, fearing that the Department might suspect disease and might quarantine him, order destruction of stock, or otherwise interfere with his business. If Mr. White did his best to keep the losses secret from the Department, that does not concern me, but I am concerned that the failure to disclose the losses gave a clear impression that the farm was more successful than was the fact. This was the picture put forward for the purposes of this case. It does Mr. White no credit.
I mentioned that, if all goes well, fish are grown on a 6 month cycle. Records of movements of fish from producers to purchasers must, by law, be kept. Copies of such records were obtained from those who supplied fingerlings to the plaintiff and those who bought fish from it. From these records a more accurate indication of business activity can be gained than from the projections embodied in the plaintiff’s budget, which was prepared at a very early stage of its operations. Performance simply did not match budget.
A further matter to take into account is that, with the light of hind sight, decisions about where to spend scarce money to re-establish the business after the fire are at least debatable. The plaintiff, in a false economy, was not insured. Only the provision of extensive loans by members of Mr. White’s family kept it alive.
There was a period of a few weeks following the fire, devoted to cleaning up and repairs. There is no reason to doubt any of that, it was a big job. Cleaning up and repairing was extensive and thorough. Thereafter, the course adopted was more open to debate.
There are, as I mentioned, two filters to each tank. One was the filter like a modified swimming pool filter. That mainly dealt with solids in suspension. The other was the bio-filter which dealt with dissolved ammonia. It is constructed of metre cubes, joined together in fours or sixes. Each cube consists of many metre long, porous, plastic tubes, perhaps 10cm. in diameter. They are laid horizontally on top of each other, tied together and bound at the ends with plastic sheeting into blocks. Water is poured onto the top of a stack of these blocks and percolates through them. Special bacteria are cultivated in and grow to cover all parts of the filter. It is those bacteria which remove ammonia. It takes about 6 months for growth of those bacteria to reach an optimum level.
Removing and cleaning the filters after the fire at least substantially destroyed the bacteria. The materials to repair damaged filter blocks and the new cultures of bacteria cost a few hundred dollars per filter stack. Mr. White made up a few filters, by amalgamating salvaged parts. He did not replace filters where he did not have enough components. He said he could not afford to. He elected to pursue another venture, the raising of carp, and spent money on tanks and equipment for that. In the end, that was not successful financially.
He continued to raise barramundi at a reduced rate. He referred to the 6 month delay in fully re establishing bio filters as part of the reason. The expert evidence establishes that it does take about 6 months. However, the efficiency required of a filter is proportional to the mass of the fish in the tank. Only a short period is necessary to get to a stage where it could cope with the waste from, say, 1,000 fingerlings. The efficiency of the filter will increase at about the same rate as and keep pace with those fish as they grow. One does not have to delay stocking with fingerlings for 6 months.
Immediately following the fire, large numbers of fish died at the plaintiff’s premises. A Mr. Nottage, another fish farmer, whose company was then the supplier to the plaintiff of fingerlings, was prepared to bring a tanker truck to the farm and to take away many fish to Mr. Nottage’s farm. He kept records of the fish he took, what he paid, and how many died at his premises. I have no problem associating these immediate deaths and costs with the fire.
The plaintiff retained some fish in the tanks it kept working. They did not do well. Heavy death rates continued. The reason is not clear. The only expert to see them was the local vet, who was not a specific aquaculture expert and who was not called to give evidence. Mr. White believes that there was no disease. He believes that, despite his efforts to clean everything, traces must remain of something toxic from the fire. He may be right. I accept that fish are sensitive to small changes to their environment. But, in the absence of more detailed analysis of the problem, I cannot find Mr. White’s belief proved.
The process of cobbling together bits of pipe and bits of bio filter appears to me to have been laborious and to have produced such small savings that it would have been better to replace with new, at least to a substantial extent. Mr. White said he just could not afford to do that. However, the plaintiff was lent money sufficient to satisfy all pressing creditors and to replace pipe work and bio filters.
One should not be too critical of Mr. White. The clear light of hindsight was not available to him. I suspect that the damage caused by the fire, both to the fabric which he had worked so hard to put together and to his high hopes must have been extremely depressing to him. In evidence he was on the edge of tears as he described it. I suspect that he fell into a reaction of frantic work which did not permit him to think as clearly as he might have in other circumstances.
What I think I should allow are:
1) direct costs of clearing up and repairs after the fire.
2) fish deaths over, say, six weeks after the fire.
3) The difference between 6 months production as it might have been expected and what actually occurred over the same period, being a period commencing 6 weeks after the fire.
1) Cost of cleanup and repairs.
a)Re-construction of company accounts $2,907.00 (agreed)
b)Electrical repairs $2517.89 (agreed)
c)Cleanup and repairs effected by Mr. White, his family and Mr. Nourse. If Mr. White, is allowed for at $40 per hour and the others at various lesser rates the claim comes to $73,590. Mr. Tassone, a builder experienced in repairing fire damage, gave estimates to carry out various parts of the necessary work and suggested that he could have done it for under $20,000. His estimate did not include work salvaging fish or repairing piping. There is always more to do than at first appears. I must allow for re-building the lean to office and for a few bits of furniture that were lost.

I would allow for all of this $25,000.00
TOTAL $30,424.89
2) Fish deaths during first 6 weeks.
About 6,500 fish died during this time. Some would have died before reaching maturity in any event. I shall work on 6,000 fish dying because of the fire. They were at all stages of growth between 70 and 600 grams. 350 grams may be a fair average. This gives a total weight of about 2,100 kg. of fish. In addition, about 400 kg. of fish died at Mr. Nottage’s farm. So total losses were about 2,500kg. At maturity, those fish could have been sold at $10.25/kg. I would allow $25,000.
3) Loss during a six month grow-out cycle.
Mr. Hall calculates a monthly loss of about $4,000. Mr. Irving suggests a lower rate. He points out that the plaintiff was actually trading at a loss. He predicts that it would not have survived. In fact it has survived, albeit limping along. It has survived because of loans from family members. I am prepared to assume they would have been available as a last resort if the problem had been an absence of cash, rather than fire damage. I am not prepared to assume the plaintiff would simply have been out of business before the period on which I base loss was complete.
Mr. Irving accepts that, whether called loss of profit, or, more accurately, diminution in trading loss, the economic loss over one 6 month cycle is about $24,000. That figure is accurate enough for my purposes.
The total of the figures I have discussed is $79,424.89.
A claim for interest on borrowed money is made. I cannot be sure how much would have been borrowed in any event. Even assuming the long term success of the venture, I believe it still had a pretty impoverished 6 months to negotiate - if not more. It is not a case where we are talking of lost profits which would have been ploughed back to produce more profit. I think it better to allow interest on the claim from about the time of loss to the present. The fire was in May 1997. Not all losses accrued at once. I would allow interest on the whole claim for 3 years, to the present date. I would hear the parties on the rate of interest.
However, for the reasons I have already discussed, I must dismiss the plaintiff’s claim. I will hear the parties on costs.

[2000] SADC 127

13 October 2000