HSE Mining Pty Ltd v Mining Equipment Spares Pty Ltd - [2009] WADC 66

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: HSE MINING PTY LTD -v- MINING EQUIPMENT SPARES PTY LTD [2009] WADC 66

CORAM: STAVRIANOU DCJ

HEARD: 28-31 OCTOBER 2008 & 7 NOVEMBER 2008

DELIVERED : 1 MAY 2009

FILE NO/S: CIV 2408 of 2007

BETWEEN: HSE MINING PTY LTD (ACN 060 475 630)
Plaintiff
AND
MINING EQUIPMENT SPARES PTY LTD (ACN 083 225 763)
Defendant

Catchwords:

Contract - Failure of engine in course of reconditioning - Warranty as to work done - Turns on own facts

Contract - Damages for breach - Assessment of damages - Wasted expenditure

Conversion - Proof of delivery and retention of engine parts - Turns on own facts

Legislation:

Nil

Result:

Judgment for plaintiff

Representation:

Counsel:

Plaintiff: Mr A P Hershowitz
Defendant: Mr J C Curthoys

Solicitors:

Plaintiff: Sparke Helmore
Defendant: GG Legal

Case(s) referred to in judgment(s):

Commonwealth v Amann Aviation Pty Ltd (1992) 174 CLR 64
McRae v Commonwealth Disposals Commission (1951) 84 CLR 377
Robinson v Harman (1848) 1 Exch 850; 154 ER 363

STAVRIANOU DCJ:

Introduction

The plaintiff ("HSE") carries on business as a mining and earthmoving contractor. For a number of years it arranged for its Caterpillar diesel engines to be overhauled and serviced by the defendant ("MES").
This action concerns two of HSE's engines.
The claim in relation to the first engine ("the 3512") arises out of a failure of that engine while MES was carrying out an overhaul of it.
HSE claims damages in relation to the 3512 pursuant to a warranty ("the warranty") provided by MES. The claim is for the cost of a replacement engine, for the cost of parts supplied by HSE and for the cost of work done by a subcontractor on the 3512. There is also a claim for the cost of an engineer who inspected and prepared a report concerning the 3512 failure.
The principal controversy between the parties in relation to the 3512 concerns the cause of its failure.
MES counterclaims $37,000 being the unpaid price of work done in relation to the 3512.
HSE claims the second engine ("the 3508") was delivered to MES and has never been returned. MES contends that it does not have the parts which are alleged to comprise the 3508.
The claim in relation to the 3508 is for its return and in the alternative damages for conversion.

Background facts

In or about December 2002 HSE and MES agreed that MES would, from time to time, repair HSE's engines.
The work to be done in relation to the 3512 was subject to the warranty which provided that MES would guarantee all labour, services and parts supplied by it in respect of overhaul work carried out on HSE's behalf for 6,000 hours or 12 months, whichever occurs first.
Mr John Brian Moralee ("Mr Moralee") is the operations manager for HSE. Between 2002 and 2004 he was its plant manager and was responsible for maintenance and control of its plant and equipment.
Mr Jeff Young ("Mr Young") is the product support manager of MES.
Mr Ivan Erceg ("Mr Erceg") is the managing director of MES. In 1998 Mr Erceg established MES. Its business includes the overhaul of diesel engines. In a year MES would overhaul between 60 and 100 engines of which probably 20 would be Caterpillar 3512 engines.
Noordeman Diesel ("Noordeman") carries on business as a repairer of diesel engines.
By about October 2003 the 3512 had completed its service life and was due for overhaul. Mr Moralee arranged for the 3512 to be delivered to MES to enable it to be stripped and a quotation prepared for its overhaul.
On 2 October 2003 Mr Young sent an email to Mr Moralee as follows:
"Could you please contact me about the CAT 3512 engine, also we do not have an order number relating to this engine."
Mr Moralee responded by email on 2 October 2003 as follows:
"Jeff, will give you a call and I'm in the process of getting an order No to you to strip, access (sic) and quote. Talk to you soon."
On 2 October 2003 HSE provided a purchase order in the sum of $3,300 to MES to strip, inspect and quote to overhaul the 3512.
The engine block of the 3512 was delivered to MES and was found to be badly corroded. Mr Moralee was supplied with a quality assurance job evaluation report which noted that the upper deck face of the block was "badly corroded". He was told that it was necessary "for the engine cylinder block to go out for its scheduled servicing to check the bores, to check some of the seal area, where – it needed some machining done in the seal area where the cylinder liners would seal and it needed the crankshaft tunnel checked".
Mr Moralee was informed by MES that the 3512 required machine work done and needed the crankshaft level checked. It was Mr Moralee's preference to send the 3512 to Noordeman for this work to be done before the overhaul work to be done by HSE could proceed.
The work required on the engine block before the overhaul could proceed included a machining process to remove the corrosion.
On 15 October 2003 Noordeman provided an estimate to HSE for the cost of repairs to the 3512 of $7,735.40. The estimate noted that "the block is currently 0.011" below minimum specification and that after machining the deck it will be approximately 0.015 "below".
On 21 October 2003 MES provided an estimate to HSE of $131,619.90 to carry out the overhaul work. The estimate included an allowance for labour of $20,000, $74,938.85 for materials and an allowance for subcontractors. Mr Moralee discussed the estimate with Mr Erceg and Mr Young and there were negotiations as to the work to be done.
The agreement ultimately reached in relation to the 3512 was that MES would carry out the labour and services and be paid $48,320.84. HSE would supply MES with all parts required for the assembly listed in the job estimate and would pay for and arrange for work to be done on the 3512 by Noordeman. HSE maintained an account with Noordeman and it was agreed that the engine block would be sent to that firm for its reconditioning.
On 11 November 2003 HSE issued a purchase order to Noordeman for it to repair the 3512 block at a cost of $7,735.40.
On 2 December 2003 Noordeman provided a quote to HSE in the sum of $1,432.35 for extra work to be done on the 3512.
In a note contained in a facsimile dated 4 December 2003 to the head office of HSE Mr Moralee requested the head office to provide an amended purchase order for the further work to be done by Noordeman. Mr Moralee noted in the facsimile that because of the condition of the block it needed to be decked. He noted that in the circumstances he had decided to take the option of off‑setting and machining the main crank tunnel to shift the crankshaft closer to the block deck by 0.014". He noted this would result in the block being within acceptable WesTrac standards. WesTrac is the Caterpillar engine dealer for Western Australia.
Work was done on the 3512 by Noordeman and the 3512 was then sent to HSE to enable the overhaul to proceed.
On 27 January 2004 Mr Moralee sent an email to Mr Young seeking advice as to progress of work on the 3512 and the date of its return to site. Mr Young responded the same day by email and stated that the repairs would start that week and be completed around 18 February 2004.
The work to be done on the 3512 was carried out by employees of MES including Mr David Craig Hall ("Mr Hall") and subcontractors engaged by MES. In the course of the overhaul MES discovered that there was a problem described as backlash with the gears of the 3512.
On 3 February 2004 Mr Young sent an email to Mr Moralee concerning the backlash problem as follows:
"John,
What do you want to do about the .030 inch backlash we have on the gears?
•Do you wish to inspect these gears before we go ahead and assemble?
•Do you want us to buy new gears and try and eliminate some of the backlash? Do you want us to just carry on regardless?"
The problem with the backlash was eliminated when the crankshaft of the engine was bolted into position.
On 25 February 2004 Mr Hall began a dynamometer test on the 3512. A dynamometer is a testing device which is able to simulate engine operating conditions. During the course of testing the engine is monitored and records are kept of water temperature, oil pressure and oil temperature. In the course of dynamometer testing the 3512 failed. The mechanism of the failure is outlined subsequently in these reasons.
On 25 February 2004 Mr Young telephoned Mr Moralee and told him that the 3512 had failed on the dynamometer.
Shortly thereafter Mr Moralee attended MES's workshop where he had a conversation with Mr Erceg in relation to the 3512. The cause of the failure was discussed as was the question of whether any damage suffered by HSE would be covered by the warranty. There was an issue as to whether the engine had failed because of the way in which it had been assembled or because of a failure of a part. Mr Erceg said to Mr Moralee that the problem arose because of a broken cylinder head valve falling into the engine. There was no resolution as to responsibility and Mr Moralee contacted Paul Hudson Townend ("Dr Townend"), a consulting engineer, for the purpose of him carrying out an inspection and providing a report as to the 3512.
On about 26 February 2004 Dr Townend attended MES's workshop and inspected the 3512. When he attended the 3512 had been removed from the dynamometer and had been substantially dismantled. On that day Dr Townend told Mr Moralee that he did not believe the cylinder head valve had anything to do with the cause of failure. It was Dr Townend's opinion that the problem arose in the bottom end of the engine where the big ends end bearings are located and the bolts.
In March 2004 Dr Townend provided a report to HSE in which he concluded that the cause of the failure was loose bolts. Dr Townend's fee for his services of $2,244 was paid by HSE.
The circumstances leading to the engagement of Dr Townend and the responsibility for payment of his fee are in issue between the parties.
On 15 March 2004 a copy of Dr Townend's report was sent by HSE to MES. Mr Moralee noted in the email which attached the report that the findings in the report were very clear. He noted that he would wait for Mr Erceg's call to discuss the plan to have the engine back in service as soon as possible.
On 17 March 2004 Mr Erceg wrote to Mr Moralee as follows:
"Dear John,
This letter is in response to the report regarding HSE CAT 3512 engine failure compiled by Dr Paul Townend.
Although Mining Equipment Spares do not agree with the findings of the report, we will however accept responsibility for the failure, not through faulty workmanship but for agreeing to assemble an engine that was outside the OEM's specifications and using non-OEM parts.
Mining Equipment Spares took this unusual step with the view of trying to assist HSE with an economical overhaul at their request, unfortunately it has not been economical for either parties.
With this in mind we will compensate HSE for all the parts that were damaged in the failure but will not rebuild the engine as it is not within Mining Equipment Spares' policies. Once the compensation has been met, the CAT 3512 engine will be returned to HSE unassembled.
As a result of this engine failure and the associated report, the relationship between Mining Equipment Spares and HSE has been severely damaged and it is Mining Equipment Spares' decision to cease carrying out any further overhauls for HSE.
In regards to the CAT 777D engine we have stripped down in our workshop, we have ceased all work on this engine and all the parts will be returned to HSE for assembly.
Mining Equipment Spares intend to carry out their own investigation into the CAT 3512 engine failure and will require all the damaged parts to be returned to Mining Equipment Spares. The findings will be released to HSE after which negotiations may need to be conducted."
On 18 March 2004 MES issued an invoice to HSE for work done on the 3512 in the sum of $48,320.83. The invoice was not paid. At trial the quantum of MES's counterclaim based upon the unpaid invoice was agreed at $37,000.
In June 2006 the 3512 was inspected and tested by Hofmann Engineering Pty Ltd ("Hofmanns").

The pleadings and issues

The issue in relation to the 3512 is what caused its failure on 25 February 2004.
HSE relies upon the warranty in relation to the work done on the 3512.
MES admits the warranty and pleads that there were terms of the agreement to overhaul the 3512 that:
(a)MES would exercise reasonable care and skill in carrying out work on the 3512;
(b)all materials and parts supplied by HSE would be good and proper materials and parts, fit for the purpose for which they were intended.
MES pleads that in breach of the agreement the materials and parts supplied for use in the assembly of the 3512 were not good and proper parts.
MES pleads the cause of the failure of the 3512 was:
(a)discrepancy in the alignment of the bearing tunnels in the engine block, contrary to the original engine manufacturer's specifications;
(b)discrepancy in the engine block cylinder deck height, contrary to the original engine manufacturer's specifications; and
(c)the failure of parts supplied by HSE to MES, used in the assembly of the engine.
HSE pleads that:
(a)an exhaust valve of the 3512 engine broke at the head to stem transition and piston impact caused valve fracture;
(b)the primary cause of the 3512 failure was loose big end bolts on the No 5 and No 6 conrods;
(c)the No 5 and No 6 big end bearings seized and spun because their bolts had insufficient pre‑load;
(d)the loss of clearance, caused by loss of big end bearing thickness, in turn due to seizure, caused the piston to impact with the cylinder head;
(e)the piston impact on the cylinder head broke an exhaust valve after the big end bearings reduced in thickness; and
(f)the load flanks on the No 6 big end bolts had been installed to a snug tightness rather than a full torque tightness.
MES's case is that when the 3512 was supplied to it by HSE it was out of specification after being overhauled by Noordeman. There was geometric misalignment of the crankshaft main tunnel which caused vibration and this caused loosening of the bolts and failure. The bolts had been on MES's case properly tightened before the engine was placed on the dynamometer.
It is accepted that if the bolts had not been properly tightened resulting in the 3512 failure then the warranty would apply and MES would be liable for damages.
MES puts in issue the quantum of damages sought by HSE.
HSE maintains that the MES did not carry out the work required in relation to the 3512 with reasonable skill and care and is not entitled to payment of the outstanding amount sought by counterclaim.
HSE relies upon an oral agreement made between Mr Moralee and Mr Erceg on 26 February 2004 in relation to the claim for Dr Townend's fee. MES denies the existence of the agreement and pleads that HSE retained Dr Townend to perform an expert investigation into the failure of the 3512.
The quantum of Dr Townend's fee of $2,244 is agreed.
HSE's claim in relation to the 3508 is that parts which are alleged to comprise the 3508 were delivered to MES.
MES denies that it is in possession of the parts.
HSE claims $70,301 being the cost of the parts. The valuation evidence relied upon by HSE is based upon the parts being usable second‑hand parts. MES contends there is no evidence as to whether the parts the subject of the claim were usable second‑hand parts.

Non-expert evidence

Mr Moralee gave evidence in an honest and straightforward manner. I found him to be a generally reliable witness.
Mr Erceg gave evidence that it was standard practice of MES to complete an evaluation report in relation to engine overhauls or rebuilds. The standard report comprises eight pages. In relation to the overhaul of the 3512 MES produced in evidence one page of the evaluation report being what is described as the engine assembly checklist. Mr Erceg gave evidence that only the one page produced was relevant. He said this was because of the nature of the work that MES was carrying out on the 3512. HSE through its solicitors made requests to MES for production of the remaining pages of the evaluation report. The pages were never discovered or produced. In cross‑examination Mr Erceg said he would produce the pages. They were never produced.
Mr Erceg was cross‑examined at length about the defence of MES to HSE's claim and in particular the assertion as to the existence of an agreement that the benefit of the warranty relied upon by HSE had been waived. The defence was amended prior to trial to abandon reliance upon the alleged waiver. Mr Erceg's evidence was that he did not know why the defence had been amended to abandon reliance upon the agreement to waive the benefit of the warranty. It was his evidence that his former solicitors were "recording everything wrong".
Mr Erceg was asked in cross‑examination:
"It is the case that when you first investigated it appeared as if your mechanics hadn't tightened the bolts properly, isn't that correct? – No comment.
You don't want to answer the question? – No comment."
Mr Erceg was further asked:
"In a letter written by your solicitor he says that it appeared to you after you had first read the Townend report that your mechanics hadn't tightened the bolts properly. Is that correct? ‑ I don't know.
You don't know? ‑ No.
Well, let me ask you this; did you ever form the view that your mechanics hadn't tightened the bolts properly? ‑ Absolutely. Anything if - if something goes wrong with the engine you always think the worst. There could be something - a mechanical fault could be at work which is fault. You always - you cannot discount anything.
Did you check whether or not the bolts had been properly torqued and they'd been properly tightened? ‑ Me, myself? No.
After the failure? – Dr Townend did.
No, after the failure did you take any steps to ascertain whether or not the bolts had been properly tightened or torqued? ‑ Not me.
So you never spoke to any of the fitters who assembled to find out whether they tightly - properly bolted? ‑ Not myself. Through Dr Townend and my supervisor we did and my supervisor said to me it appears that there was a bolt loose. When I say loose, they hang loose. The reason being ‑‑‑
Sorry, your supervisor told you that the bolts had been loose? ‑ Yes. That Townend told him that the bolts was loose but Townend told him.
On disassembly after the failure did you ascertain whether or not the bolts had been properly tightened before assembly? ‑ Not at all.
You didn't ask the questions? ‑ No. They were stripping engine the ‑‑‑
Did you ask anybody who did the work whether or not on disassembly they found bolts that were loose? ‑ I did not but I heard that there was a bolt loose - there was a bolt loose. There was a bolt loose on four of those or six of those - or four.
On disassembly? ‑ Yeah.
After the failure? ‑ When I say loose - because everything was overheated and when you heat something, expands and the stretching of the bolts because the pistons has seized in the liner and all the pressure the other 11 cylinders are still working while this piston was seized in the liner, of course it's pulling force will stretch the bolts and therefore those bolts are not longer tied.
Mr Erceg, in Mr Laczko's report, his initial report, he wrote there that there was no evidence of loose bolts on disassembly and when he asked him today how he knew that he told us that you told him that? ‑ No, the measurements - the measurements of the stem, when you measure the stem of the bolts ‑‑‑
No, just answer the question. He told us, he gave evidence in this court, that you said to him the bolts were not loose on disassembly and that's why he put it in his report? ‑ We determined - can I answer ‑‑‑
No, please answer my question. Did you tell him that the bolts were not loose on disassembly and that's why he put it in the report? ‑ I told him the bolts was tight when assembled. The bolt was torqued.
No, I'm talking about disassembly? ‑ But I did answer your question.
No, you didn't? ‑ They were loose due to stretching of the piston pulling - pulling the piston down through the - through the seized line up."

Mr Erceg's evidence was generally unconvincing. He at times was careful in his answers to ensure that he did not answer in a way which might affect MES's case. It was his evidence that he made a commercial decision to accept responsibility for the failure of the 3512. He had on his evidence purchased a replacement crankshaft as a sign of good faith.
Mr Hall gave evidence that he is a qualified diesel mechanic. He had completed a four‑year apprenticeship in 1984 then worked for MES for five years.
It was Mr Hall's evidence that he recalled a 3512 that had failed on a dynamometer. It was his evidence that he had disassembled and assessed the 3512 and then rebuilt it.
Mr Hall gave evidence that an assembly checklist is completed prior to an engine being tested. This is a written document and as the assembly of an engine occurs there is a signing off by a fellow tradesman at each stage. He explained that this was "so that you don't miss anything". He said this was the procedure which had been adopted in relation to the 3512.
Mr Hall gave evidence that the head bolts, main bearing bolts and big end bolts are critical bolts which need to be fitted in the course of assembly.
Mr Hall was asked in examination‑in‑chief about whether it was necessary to tighten the bolts to the conrods in the installation process. Mr Hall's evidence was as follows:
"Now, is it necessary to install those bolts and tighten them as part of the 3512 engine reassembly? ‑ Yes, yes it is.
Could you explain to his Honour exactly how you'd do that? ‑ Okay. There's a - a set procedure laid out in the manual for the - it's a two-step process and an ordered sequence that you would tighten each bolt in - in order to a predetermined torque. And then you would advance the bolts - you'd mark the bolts where they sit when they're torqued and then you would advance the bolts a certain degree of rotation to give the bolts a set amount of stretch, so.
Now, first of all, you said you'd torque the bolts. What does torque the bolts mean? ‑ Torquing the bolts is - it's getting into the - trying to think how to put it properly. It's a set weight to turn a bolt which is through a torque wrench, which is - it's been tensioned, and it records the amount of weight it actually takes to turn the bolt. On the torque wrenches that we used at the time, they have an indicator that when you set the torque that you want, that indicator will show and it will make an audible noise so you don't over‑torque them.
And where would you get the - how would you know how much to torque it? ‑ It's from the manual.
All right. So you torque it, the bolt, and what happens then? ‑ Once you've torqued the bolts in - in sequence to the torque, you would then mark the bolts and advance them the - predetermined from the manual - amount of advance."
It was Mr Hall's evidence that the procedure he had adopted for the big end or conrod bolts on the 3512 was as he described. He had utilised the same procedure for all the bolts and he gave evidence he was satisfied that the big end bolts had been properly tightened.
Mr Hall was cross‑examined in detail in relation to his recollection of the 3512 and the work he had done on it. He gave evidence that he was not good with dates. He was clear in his evidence that he had only worked on one 3512 which had failed when he was working on it. He had done hundreds of assemblies and overhauls of engines since the 3512. He accepted that it would be difficult to remember exactly what had happened on a particular engine and how he might have done things on a particular engine.
The view I formed was that his recollection was not good. It was his evidence that the 3512 had been in MES's workshop about 12 months before the failure. This was clearly not the case.
It was Mr Hall's evidence he was not the only employee of MES who worked on the 3512. It was his view that he had done more than half of the work on the engine. Mr Hall identified his initials and those of another employee on an assembly checklist adjacent to an entry of "conrod bolt torques". The assembly checklist was one of eight pages.
Mr Hall accepted that if there were problems with the deck height it would have been recorded in the evaluation sheet. He said that in part of the evaluation sheet that was produced in evidence he had only written his own initials. One of the entries on the assembly checklist related to backlash. The relevant annotation on the document is "out of spec". Mr Hall accepted that the backlash problem had been fixed and that the engine assembly check had not been corrected.
The evidence of Mr Hall was very general. His memory was not good and I am not prepared to accept based upon his evidence that the bolts were properly tightened.
In the course of cross‑examination of Mr Erceg counsel for HSE sought to tender a communication dated 27 July 2005 from the solicitor for MES. The communication referred to the backlash problem and relevantly provided:
"The 3 February (or thereabouts) conversation set out at paragraph 3 of the Minute regarding the 'backlash' issue with the gears now appears to be immaterial to the agreement between MES and HSE.
The 'backlash' problem observed and detected by MES was reported to John Moralee for HSE. The issue was further referred to Noordemans who had been responsible for the repairs to the block. Noordemans then took the block away again and upon the return of the block to MES the problem, or at least the observable symptoms of the underlying problem, appeared to have been fixed. At that point MES went ahead with the rebuild. The warranty issue does not appear to have been discussed at that time."
Mr Erceg agreed that the backlash problem had been fixed.
The communication is accepted to have been written by the then solicitor for MES. In the circumstances I am prepared to receive the document as an exhibit.

Operation and testing of diesel engines

HSE and MES called expert evidence at trial as to the operation and components of diesel engines. The summary which follows is based upon the written report and evidence of Peter Zoltan Laczko ("Mr Laczko") dated 21 February 2006 and the oral evidence of Dr Townend.
The engine block is the frame of the engine. Within the block of the 3512 are 12 cylinders. The top of each cylinder is fixed. Within each cylinder is a piston.
The cylinder head provides a cover over each of the pistons. Located in the cylinder head above each cylinder is a fuel injector and a mechanism for exhaust gases.
The cylinder head is constructed of cast iron and forms the upper part of the combustion chamber, together with the piston and cylinder walls. It is bolted to the cylinder block.
The 3512 is a four‑stroke internal combustion engine. Fuel is injected into each cylinder and ignites producing gas. The gas expands in each cylinder and the energy created forces the piston away from the top of the cylinder. The piston moves in the cylinder within a carefully designed range. The upper and lower ranges are referred to as top dead centre and bottom dead centre respectively. The force transfers from the piston through an attached connecting rod ("conrod") to the crankshaft which then provides drive power. The conrod transfers the linear motion of the piston to the rotary motion of the crankshaft.
A conrod has a big end and a small end. Each piston connects to the small end of a conrod. The big end of the conrod connects to the crankshaft and is secured in place with bolts and a shell which encloses a big end bearing.
The crankshaft is supported in position by main bearings. The main bearings are stationary and rotation occurs in the crankshaft.
During manufacture, the block is machined. The cylinders are bored and the crankshaft main bearing supports are tunnel bored.
The lower half of the block, where the crankshaft is located, is known as the crankcase.
A stroke is the movement of the piston through the full length of the cylinder. One movement causes the crankshaft to rotate half a turn. There are two crankshaft revolutions in one complete engine cycle. The four strokes are:
1.The inlet stroke.
With the inlet valve open and the exhaust valve closed, the piston moves from top dead centre to bottom dead centre, creating a low‑pressure area in the cylinder. Clean, filtered air rushes through the open inlet valve to relieve this low‑pressure area, and the cylinder fills with air.
2.The compression stroke.
With both valves closed, the piston moves from the bottom dead centre to top dead centre, compressing the air. During this stroke the air becomes heated to a temperature sufficiently high to ignite the fuel.
Strokes 1 and 2 complete one full movement and rotate the crankshaft one turn.
3.The power stroke.
At approximately top dead centre, the fuel is injected, or sprayed, into the hot, compressed air, where it ignites, burns and expands. Both valves remain closed, and the pressure acts on the piston crown, forcing it down the cylinder from the top dead centre to bottom dead centre.
4.The exhaust stroke
At approximately bottom dead centre, the exhaust valve opens and the piston starts to move from bottom dead centre to top dead centre, driving the burnt gas from the cylinder through the open exhaust valve.
Strokes 3 and 4 complete a second full movement and rotate the crankshaft a further turn to complete two full turns of the crankshaft.
At the completion of the exhaust stroke, the exhaust valve closes, the inlet valve opens and the piston moves down the cylinder on the next inlet stroke.
The piston of an internal combustion engine must be brought to rest at both top dead centre and bottom dead centre positions before its direction of motion is changed.
The high forces involved in the operation of a diesel engine require that it be carefully designed. The design allows some deviation but the tolerances are extremely small.
Lubrication is required to minimise friction within the engine. In the case of a main bearing and a crankshaft the friction‑free surface is provided by a liquid film typically oil. The friction‑free surface provided by oil is known as hydrodynamic lubrication which eliminates metal contact. An oil film is formed between the two sliding surfaces separating them and providing a low sliding friction. The mechanism is only active during the sliding movement. At the start and at the termination of movement the oil film is not present. At these times wear can take place. Hydrodynamic lubrication is present in linear motion (slideways) and in rotational motion (journals).
The operation of hydrodynamic lubrication in journal bearings is such that before the rotation commences the shaft rests on the bearing surface. When the rotation commences the shaft moves up the bore until an equilibrium condition is reached when the shaft is supported on a wedge of lubricant. The moving surfaces are then held apart by the pressure generated within the fluid film. Journal bearings are designed so that at normal operating conditions the continuously generated fluid pressure supports the load with no contact between the bearing surfaces.
Hydrodynamic lubrication relies on maintaining a tightly defined clearance between the bearing and the shaft. The bearings rely on the clearance for hydrodynamic lubrication. The wedge of oil provides the separation. A thin film of oil is always present between the shaft and the bearing. If the clearance is not maintained a seizure will occur which results in metal to metal contact rather than the two surfaces being separated by the oil film.
The alignment of the crankshaft to the bearings is critical. The design tolerances are extremely small. If the crankshaft is not properly aligned then the wedge of oil will not be evenly distributed across the surface between the bearings and the crankshaft.
The alignment of the crankshaft is determined by the engine block. If the engine block is not within the design tolerances then the crankshaft cannot be correctly aligned.

The expert evidence

It is accepted that the big end bearing of the conrod to No 5 piston failed due to the looseness of bolts. The failure of the bearing caused the piston head to impact with one of the valves resulting in damage.
HSE's case is that bolts were not properly tightened and this caused the failure. MES's case is that the bolts were properly tightened and self‑loosened because of vibrations caused by misalignment.
Each expert called had experience in assessment of engine failures and had academic qualifications.
Dr Townend is a consulting engineer and gave evidence on behalf of HSE. For his Master of Science degree Dr Townend studied welding technology. His thesis for his doctorate concerned fracture mechanics, which he described in his evidence as the study of how and why things break. He is familiar with Caterpillar diesel engines including the 3512. He has significant experience in the investigation of failed engines. Dr Townend was cross‑examined concerning evidence which he had given in different proceedings in which adverse findings were made in relation to his evidence. Dr Townend readily accepted that in that case he had jumped to a conclusion without proper scientific investigation. I have carefully considered that evidence and do not consider it impacts upon my view of the evidence of Dr Townend in this case. I was impressed by his evidence. He is well qualified and approached the assessment of the failure in an objective manner. He was in my view a reliable and honest witness. He had a good knowledge of the 3512 and its operation as well as knowledge of the operation of engines generally.
Dr Townend gave evidence that he was not given any information as to the possible cause of the failure. His brief was to determine what was the sequence of events that led to the failure of the 3512.
Dr Townend went to HSE's premises where he met Mr Moralee and Mr Erceg. He saw the 3512 which was almost fully dismantled. He visually inspected the 3512 for about one hour and took photographs. Dr Townend spoke to Mr Erceg during the inspection who told him that the deck was 0.025 inches out of specifications. It was Dr Townend's evidence that he removed the bolts from the big ends of No 5, No 6 and No 9 cylinders for the purposes of examination.
It was the evidence of Dr Townend that an inspection of the bolts revealed that they had been loose whilst in service. This conclusion was based upon the polishing of the shafts which he had observed. The bolts from No 5 piston position were the only ones which were shiny and bent.
Dr Townend in his evidence explained by reference to a diagram the securing of the bolts as follows:
"Thank you, and then your last diagram is the polishing wear on bolt shanks? ‑ The bolt shanks are black. In fact the entire bolts are black when they're new. These were new bolts, all new bolts were fitted to all of them. So because of this angle, a loose bolt will allow a conrod cap to touch it. As it tries to come off it jams against the shanks of the bolt because the bolts are at an angle, you just can't do it. If the bolts are tight then the cap can't move along the bolt and so the shanks remain black."
The tightening process of bolts was described by Dr Townend as follows:
"HERSHOWITZ, MR: On page 39? – Page 39, figure 30.
So you say that was to snug tightness, and how do you determine that? ‑ By degree. By degree. The - the procedure to tighten the bolts consists of two parts. The first part is with a torque wrench and they're tightening to a figure of - well, the recommended tightness is 90 Newton metres, and that takes out all the slack in the system and makes sure all of the metal surfaces are touching each other, and there is a small amount of pre‑load on it. That's stage 1. Stage 2 is you go back to the bolts again, mark on the position of the bolts, usually a line across the head of the bolt and in these particular bolts, they had to be tightened a further 90 degrees, and so you now don't need to measure anything other than how far the head rotates. So as long as the head rotates another 90 degrees, they're now fully tightened. So the first part with the torque wrench is just snug tight and that isn't adequate. The real heavy tightening is the second part, the 90 degree part turn.
You say in the next paragraph that the gramophone grooves scoring that is produced by the final stage of tightening was found on the number 9 big end bolts on the nine piston. Look at figure 32. Is that what you're referring to? ‑ No. Figure 33.
33, sorry? ‑ We can see the brightness there, but on 33, I've shown a magnified view of one of the flanks of one of the threads within that bright zone, and the tightening scores have taken off all of the surface that was there on a new bolt. In other words, it's very heavily metal - the metal contacted with the making threads.
Thank you. Now, what did those findings and observations - what was significant about those and what did you deduce from all of that? ‑ I think we need to compare it with figure 31.
Yes, certainly? ‑ On page 40. Figure 31 shows what I believe to be snub tightening, relatively light tightening. You could see that basket-weave of crystals that were on the surface have still not been quite rubbed off. Whereas, compare that to figure 33, it's really almost gauging due to the tightening.
Figure 31 was the number 6 BN bolt? ‑ Yes.
And figure 33 is number 9 ‑‑? ‑ Right. So that told me that the reason the bolts were loose was because they weren't tightened fully in the first place. Figure 6, number 6."
It was Dr Townend's view that no damage could be found which could be attributed to deck height variation and misalignment of the crankshaft level.
It was Dr Townend's evidence that the primary cause of the engine failure was loose big end bolts on the No 5 and No 6 conrods. This was because the No 5 and No 6 conrod bearing shells rotated. The shells are unable to rotate if they are adequately secured into position by the bolts. It was Dr Townend's opinion that the bolts securing the No 5 big end shell were not fully tightened prior to the 3512 being placed on the dynamometer.
Dr Townend was asked in evidence as to the consequence of loose bolts securing the conrod to piston No 5 and said:
"The bolts clearly were at the end of – after the catastrophic failure – the bolts clearly were far looser than they were originally. Some loosening must have occurred for the cap to be able to contact those bolts. They couldn't have been protruding.
Don't worry about why they were loose or how they became loose. What was the consequence of the loose bolts? – The consequence of the loose bolts just allow a little more movement.
What happened on your examination? What was the consequence of that? – The bolts were so loose very late in the piece, the main events had already happened.
But just tell us what those main events were. That's what I'm trying to say? – The main events were that the bearing shelves (sic) were not sufficiently clamped.
Yes? – Crushed by bolt preload to remain in their place.
What happened because of that? – Because of that the shelves spun and started to seize.
Yes, and thereafter? – When that had progressed to a point where the piston travel – because as that happens the thickness of the bearings – some of the thickness of the bearings is lost by attrition – and the piston can now travel further up the cylinder than it used to.
Why can it travel further? – Because wear on here – around here – now allows the piston to go further up the cylinder than it used to. The bearing shelves (sic) constrain the movement of the conrod and piston so that before the piston can hit the cylinder head the shelves and the crankshaft pull it back down again, and so if the shelves (sic) have worn to be too thin, then that allows extra movement of the piston up the cylinder."
Dr Townend gave evidence that the deck height is not something which can be investigated without specialised tools. He inspected the condition of the bearing shells inside the big end and noted that there was polishing. It was his evidence that there was polishing wear visible on the big end lower half shell to piston No 9.

Dr Townend gave evidence that at the No 5 cylinder position there was extensive damage. Upon examination of the cylinder only three of the four valve heads were present. There was one detached valve head embedded into the crown of the piston. In his view at some point the piston had come into contact with all four valves. In other words, that it had gone beyond the top dead centre position.
It was Dr Townend's evidence that the loss of clearance, caused by loss of big end bearing thickness in turn due to seizure, caused the piston to impact with the cylinder head. In its usual operation when the piston reaches the top of its stroke, it is then restricted from any further movement, by the big end itself. If the shells start to wear then the piston can travel a further distance. In Dr Townend's opinion No 5 piston travelled sufficiently beyond its normal distance to strike the head itself and to leave the indentation marks on the valve he observed on inspection.
There was no evidence provided to Dr Townend of any alignment testing that had been done prior to the failure of the 3512. It was his view that the bolts could not become loose because of vibrations caused by misalignment.
Dr Townend's view was that in his experience where an engine suffers a failure there could be a deviation in the alignment of the main bearings to the engine block. He gave evidence that in his experience geometric misalignment of a crankshaft bearing tunnel could cause vibrations if the misalignment was so serious that the bearings could not turn, that the crankshaft could not turn in the bearings. Properly tightened bolts would not come loose after the period of testing on a dynamometer that occurred in relation to the 3512.
Dr Townend emphasised that the seizure which had occurred was of the big end bearings and not of the main bearings. The misalignment referred to was of the main bearings. In his view misalignment would have caused the main bearings to seize rapidly and the 3512 would not have been able to have been dynamometer tested for the length of time that it was.
In this case the seizure occurred of the bearing to the conrod and not the main bearing.
Dr Townend incorporated in his report a report from Noordeman as follows:
"We refer to the 3512 failure and notwithstanding measurements supplied [by Ranch Autos we can confirm that the tunnel in the Caterpillar 3512 block is in alignment according to accepted industry checking procedures].
The accepted checking procedure after a line bore has been completed is firstly to determine the distance from the block deck to the centre line of the tunnel in both of the outside main tunnels. Following this check, and providing they are the same within tolerance, a straight edge is placed through the tunnel with it wresting on both end main tunnels. A feeler gauge is then used to ensure that the clearance is no greater than .002" on any of the individual main tunnels between the two end tunnels. This procedure is repeated twice, once at 6.00 o'clock (i.e. the bottom of the tunnel) and again at 3.00 or 9.00 o'clock (i.e. at the side of the tunnel). With this particular block there is no main tunnel clearance over .002", which is accepted tolerance.
We have been using this method of checking main tunnels for 20 years to determine the need for a tunnel bore in worn blocks and as a final check of blocks that have been line bored. The same method is used in blocks ranging from small Toyota and Nissan diesels right through to the larger Caterpillar 3500 series and Cummins K38 and K50 series engines. It is a method that has not failed us in the past and as mentioned is used as an accepted check within the industry to determine the alignment of the cylinder block main tunnels."
Dr Townend's evidence was that the measurements taken by Hofmanns show that the crankshaft main tunnel was not in alignment and that the main bearings were not in alignment.
Dr Townend was taken in cross‑examination to a report from Ranch Automotive Repairs Pty Ltd ("Ranch") which contained measurements which suggested the block was out of specification. Dr Townend accepted that he did not ask to see the Ranch measurements referred to in the Noordeman report. It was Dr Townend's evidence that an engine with the specifications as measured by Ranch would be unable to turn. It was his evidence that the measurements taken post‑failure could not in his opinion be relied upon. The important measurements were those made before failure.
Dr Townend's evidence was that he did not accept that if the main crank tunnel is sufficiently out of alignment it can cause vibration in an engine.
In his evidence Dr Townend explained the 3512 failure in the following way:
"The piston struck the head. Number 5 piston struck the head, number 5 head, quite violently, and deformed the top of the piston sufficiently for it to start to seize on the cylinder of number 5 and produce some great resistance to any further motion. And so it had to be dragged along by the crankshaft and put abnormal loads on the crankshaft bearings and so it is no surprise at all that it produced distortion in that, because of the striking action of the piston against the head and because of the piston refusing to move, because it was seized – seizing onto the cylinder."
It was his view that uneven polishing did not establish that the crankshaft was out of alignment. Neither the bottom half of the conrods or the top half of the main bearings should normally be showing polishing. The polishing which was observed may have in his view been caused by low levels of lubricant or a dry start. In his evidence he explained polishing in the following way:
"What's not correct and why not? ‑ If the crankshaft has not been correctly aligned it will do something as minor as polishing. Polishing is a very light form of wear but it's metal to metal, wear nevertheless but it's a very light form.
Is there any other circumstances when polishing also occurs in relation to the oil? ‑ When a crankshaft, when an engine isn't used for some time the oil that supports or keeps the two surfaces apart in the bearings, there's the weight of the crankshaft which is quite considerable resting on the lower shell, and after some period of inoperation there is very little oil there and so immediately upon start up there is a possibility of there being metal to metal contact and producing polishing.
Thank you. Just further down that page, the third paragraph, third sentence. Mr Laczko said there should not be any polishing whatsoever after 100 minutes of service life. Is that correct? ‑ I'm looking for it but I can answer without reading it.
You see the main paragraph starts with figure 1? ‑ Yes, I do.
Which goes to the third sentence? ‑ We're still on page 19?
Yes? ‑ The main paragraph starts figure 1?
Yes. Second line down, there should not be any polishing whatsoever after 100 minutes of service life? ‑ There is likely to be polishing the very first time the engine is started.
If the engine had operated normally would you expect that statement to be true? ‑ I would expect no extra polishing for normal service other than what occurred during first start up before the oil flow got through there. This is the reason why some oil is put in to the bearings. They're not totally dry but there's very little and there's no oil pressure. Some engines actually have a pump that starts up first of all to float the crankshaft before it's turned over to avoid polishing.
Dr Townend, why don't you please look at the last paragraph on that page. Figure 2 identifies a copper based overlay on the engine block of number 2 and 4 main bearings. This indicates the engine block has been out of alignment and has been built up by the use of a copper alloy. Do you see that? ‑ Yes, I do."
It was Dr Townend's evidence that the wear damage on the shanks of the bolts could only have been due to them being loose.
Dr Townend did not accept that misalignment caused vibration of the pistons and conrods. It was his view the 3512 did not fail due to vibration caused by misalignment.
Mr Laczko has tertiary qualifications in metallurgy and has over the years been involved in failure analysis work on diesel engines. Reports from Mr Laczko dated 25 January 2005, 21 February 2006 and 27 October 2008 were tendered in evidence. His report of 25 January 2005 was two pages and was based upon a review of Dr Townend's report and information provided to him relating to the misalignment of the crankshaft main bores to the axis of the engine and the cylinder liner axes. He noted in his report he had been informed by MES that the main bearing tunnel was out of alignment with the cylinder head deck. He concluded that angular misalignment of the crankshaft to the piston cylinder bores caused the failure.
Mr Laczko's report of 21 February 2006 comprises 24 pages. He noted that Dr Townend's conclusion was not supported by the objective evidence. He reached the same conclusion as to the cause of the failure as he had in his first report.
Mr Laczko's report of 27 October 2008 is two pages and concluded that the big end bolts had been loose during the final stages of failure of the 3512 and that the bearing failure was caused primarily by self‑loosening of the bolts. The cause of the self‑loosening was in his view vibration caused by geometric misalignment of the cranskshaft tunnel.
It was Mr Laczko's view that in the failure of a big end bearing there will be no heat applied to the engine block. There would be no reason for the block to suffer any kind of physical force or loading which would distort it. On that basis given the results of the Ranch and Hofmanns' testing MES contends the block was distorted when delivered to it by HSE.
It was Mr Laczko's evidence that local heating is the prime cause of distortion of a cylinder block. He gave evidence that mechanical distortion due to large forces was a possibility but in his view this was very unlikely in the case of an engine block made of cast iron. It was his evidence cast iron is brittle and will not deform without cracking. There was in this case no evidence of cracking.
It was Mr Laczko's evidence that when an engine has a big end bearing failure heat generated will be limited to the conrod big ends and to the crankshaft journal. No heat would be applied to the block and there was no reason in his opinion why the block would suffer any kind of force, or loading which might distort it. He did not consider that the cylinder block would have lost or changed any geometric alignments of the crankshaft bearing tunnels or of the cylinder line of the bores as a result of the failure.
It was Mr Laczko's evidence the main bearings must be in a straight line. If individual bearing locations are not in a straight line, then the crankshaft cannot be properly aligned. The crankshaft could in his opinion probably be placed into its position, but it will not form an even clearance. There will be deviations between the centreline of the crankshaft journals and the centreline of the bearings and there could be contact between them. Some may be perfectly aligned, others may have contact.
It was Mr Laczko's evidence that the Hofmann report demonstrated that there were significant deviations from the straight line of the crankshaft tunnel.
In his report of 21 February 2006 Mr Laczko noted that one sign that a crankshaft is not correctly aligned is if there are signs of wear on the bearings. He described this pattern of wear as polishing. He expanded on his report in his evidence as follows:
"The concept that I'm – I'm – I'm talking about in that paragraph is that if the – if the crankshaft bearing tunnel isn't a – doesn't form a straight line, then the centrelines of the bearings will not be on centre with the crankshaft journals. This'll cause the crankshaft to contact some of these bearings where it shouldn't have contact. And if that occurs, that will be shown by the fact that there will be some polishing of the new bearings due to that contact. Now, when an engine is correctly aligned, when the crankshaft is correctly aligned and it runs – the engine runs, even for a full life, then there's no contact with the upper halves of the bearings. The crankshaft, by its own weight, is down, and all the loading on the crankshaft applied by the firing of the cylinders is downward. Now, it's not completely downward, but it's within an angle of, say, 30 degrees on each side of being in the vertical direction. So all of the loading is supported by the lower half of the bearing, which is in the bearing cap. None of the loading is supported by the upper halves of the bearings, which are in the block. When those engines are taken apart, there's no sign of any metal to metal contact or polishing. There's no sign of wear on the upper halves of the bearing shells. These inserts are called bearing shells that are removable. There's no sign of any contact or wear on those. It's a very common – it's – event and experience that those bearings are still as new. There's no contact; it doesn't occur. There's no reason why it should occur. This also applies to the big end bearings, but in that case, the situation is reversed, because it's the upper half of the bearing, which is in the connecting rod, which is carrying the load and the lower half, which is in the cap, is not carrying the load. It's carrying a small amount of load due to inertial effects, but it's – the loading is very low. And once again, the wear that – that occurs is on the upper half of the bearing on the big ends."
It was Mr Laczko's evidence that the bolts that were loose were the big end bearing cap bolts on the No 5 cylinder. The bolts in his opinion had come loose and caused the failure.
As to the tightness of the bolts it was Mr Laczko's evidence that bolts can come loose because they have not been tightened correctly during assembly or if the particular conrod is suffering from a lot of vibration. It was Mr Laczko's evidence that:
"The correct tightening of the bolts involves, assembling the bearing cap so the crankshaft is fitted to the engine block and the bearing cap bolts have already been tightened, the main bearing cap bolts. Assembling the connecting rod with the bearings in it, tightening those bolts up by hand with a hand spanner which is known as snug tight, and then further tightening the bolts to a pre-specified torque of actually rotational force. So the torque would be a rotational force on the bolt applied with a calibrated measuring tool, a torque wrench. So you've got a torque wrench and you pull on the handle, it's got an indicator usually which clicks and tells you that you've reached the torque. The torque is indicated in the torque wrench by actually bending a steel lever to a certain amount."
It was the evidence of Mr Laczko that markings and wear on bearings are not the same thing. Some bearings do operate without showing any signs of wear.
It was Mr Laczko's opinion that the bolts came loose because the 3512 suffered from excessive levels of vibration, particularly in the pistons and conrods. This was in his view because of the angular misalignment between the piston bores and the crankshaft. It was Mr Laczko's evidence that the self‑loosening effect on the bolts is a function of the amplitude of the vibration.
It was Mr Laczko's evidence that the major force applied in the engine is created by the firing of the mixture above the piston. The piston is pushed downwards by the force of the expanding gas due to combustion. The piston is then pushing down on the conrod, the conrod is then pushing downwards on the crankshaft causing it to rotate. Accordingly, the force is applied to the upper half of the big end bearing.
Mr Laczko's evidence explained the angular misalignment in his evidence as follows:
"The other explanation is the angular misalignment. The angular misalignment of the crankshaft to the – the cylinder bores is a very unusual situation. And it – it can only arise when the engine is incorrectly machined after – I mean, it – it never arises with – with new engines that come from the factory. It could only arise if the crankshaft is – crankshaft tunnel is machined out of alignment, away from its original centreline. So it can only arise then and then – the information I've been given, in the case of this engine, is that that was indeed the case and that the engine was found to have a crankshaft alignment problem when it was first assembled. That was identified originally by the fact that some gears which mesh with the crankshaft had incorrect backlash, meaning their centre distances weren't correct. So the crankshaft was out of position. And then further, it was identified by the fact that the pistons did not come to uniform height in the liners. When they come to the top dead centre, they should all come to exactly the same distance from the top of the liner, because the crankshaft has to be parallel to the – well, it's better to say the crankshaft has to be normal to the cylinder liners and at the same distance from the top of the cylinder liner to the centre of the crankshaft, so that when the pistons rise – the crankshaft's rotating and the pistons rise to the top of the liner, they're all at the same – exactly the same level from the top. Distance down is measured from the top of the liner. Now, my understanding is that that was found to be not the case and the engine was sent away to have the top of the – the cylinder block machined at an angle to its original surface. So it was machined so that if this desk, for example, was the top of the cylinder block with the cylinder liners in it, it was machined to remove metal from one end, but not from the other, which would change the angle of the plane relative to the access of the crankshaft. A very unusual condition. I – I'm not – mostly people that I'm involved with wouldn't even consider such an operation."
It was Mr Laczko's evidence that the polishing of the bolts was evidence that they were loose when the engine was running.
Mr Laczko gave evidence that the measurements referred to in Hofmann's report showed a degree of discrepancy or misalignment that exists between the crankshaft centreline and the cylinder bores in relation to bores 1 to 6.
Mr Laczko gave evidence in relation to the photographs which had been taken by Dr Townend. A photograph of a general view of the bottom end of the engine block showed polishing on the left‑hand side of the left bearing. It was his evidence there should not be any polishing whatsoever after 100 minutes of service life. It was his evidence that very often an engine that has done its full life will not show any polishing because there is very little load applied to the upper half of the bearings. It was his evidence that force from the combustion of the diesel fuel is directed down the piston and through the conrod onto the crankshaft. That force is absorbed into the crankshaft causing it to rotate. The loading of the crankshaft is mainly downwards because the force is coming from the top of the engine. The loading is absorbed in the bottom, or lower half, of the main bearing.
Mr Laczko gave evidence as to one of the photographs attached to Dr Townend's report which showed the upper half of the main bearings still in place in the engine block. He gave evidence the upper halves of the bearing do not bear the load from the combustion. Accordingly, in his view there should not be any polishing under normal operating conditions. If the alignment of the crankshaft was correct, even if there was polishing it would be constant across the entire surface of the bearing, not only in one part as depicted in the photograph. It was Mr Laczko's view that the uneven polishing was evidence of a problem with the alignment of the crankshaft.
Mr Laczko gave evidence that Dr Townend noted that polishing wear can be seen on the half shells that were the lower shells in service. The polishing indicated that there was metal to metal contact; that is, that the hydrodynamic lubrication was not maintained. There was uneven polishing in each of the conrods. The uneven polishing demonstrated in his view a problem with the alignment of the crankshaft.

It was Mr Laczko's evidence the lower half of the conrods should not be showing polishing. The load from the conrods is to the top of the crankshaft, hence it is being applied through the top half of the big end and not the lower half. It was his opinion the existence of polishing on the lower half of the big end also indicates problems with alignment of the crankshaft. The bottom half of the conrods is the corollary of the top half of the main bearing – neither should be showing polishing.
It was Mr Laczko's evidence that one photograph attached to Dr Townend's report shows seven main bearing lower half shells showing polishing wear marks. It was his evidence one can expect to see polishing because these have load applied. The polishing would typically appear in the bottom third of the main bearing lower half shells. The polishing was uneven around and across the bearings and this in his view indicated a problem with the alignment of the crankshaft. In the case of the crankshaft and the main bearing the misaligned crankshaft indicated that there was not enough oil to keep the surfaces separated and there was metal to metal contact.
Mr Laczko gave evidence that during the course of a dynamometer test the load is progressively increased. This explained why the engine was able to run for 100 minutes before failing.
It was Mr Laczko's evidence that once the bearings failed the inertia of the upstroke of the piston towards top dead centre position would have caused the piston to continue beyond its limit represented by the top dead centre position and caused the top of the piston to strike the valve.
It was his evidence the main bearings were polished and showed metal flow on the upper halves, not the lower halves as expected. This indicated that the crankshaft was loaded more by the force required to move the pistons up and down in the cylinders than by the firing force. This was supported by the unusual wear pattern of the big end bearings, where the lower halves were polished rather than the upper halves. It was Mr Laczko's evidence the high friction was the cause of piston seizure. High friction was caused by the angular misalignment of the piston cylinder bores to the crankshaft. The bores were not normal to the axis of the crank, thus the pistons were loaded against the cylinders and the big end bearings were pulled to the side. Both of these conditions will create large frictional forces on the piston and big end bearing.
It was Mr Laczko's evidence that metal to metal contact caused the No 5 piston to seize and the big end bearings to wear to the steel backing. It also caused one gudgeon pin bush to overheat. The increased clearance in the big end bearings caused the piston to hit the valves and one valve fractured.

The failure of the 3512

I accept that the block of the 3512 was not within specification on 15 October 2003. On 29 October 2003 Noordeman sent a facsimile to HSE advising that following machining the deck would still be below specification. Noordeman thereafter carried out work on the block. This involved the machining of the crankshaft tunnel to shift the crankshaft closer to the deck of the block by 0.014 inches. After the work had been completed the deck was 0.005 inches under specification.
After Noordeman had completed its work on the 3512 MES did not suggest to Mr Moralee or HSE that there were any alignment issues with the 3512 which would impact upon its operation.
This 3512 failed when it was being tested on the dynamometer by Mr Hall. The failure occurred at the number 5 big end.
MES's case is that there was a problem with the engine block in the areas that Mr Laczko concluded were out of alignment and that caused the vibrations which resulted in the loosening of the bolts. I accept that work had been done by Noordeman on the block and deck of the 3512 before it was delivered to MES and that post‑failure measurements made by Hofmann and Ranch revealed misalignment.
MES's case places significant reliance upon the pre-failure condition of the engine. The complete eight page evaluation document which Mr Hall and other employees and contractors of MES completed was not produced by MES. Mr Hall's evidence was that there was other information in the document completed when the deck was received back from Noordeman.
Mr Erceg did not search for the documents. There were requests for the entire document but only one page was produced. HSE maintains it is open to draw an adverse inference that there is something in those other pages which does not support MES's position regarding the pre-failure condition of the engine. Mr Hall's evidence was that he would have filled in some of the other pages. Mr Erceg's evidence is unsatisfactory as to why the documents were not produced. In the circumstances I consider that I can infer that the balance of the evaluation report would not have assisted MES's case.
I accept that the cause of the failure of the 3512 was loose big end bolts on the No 5 and No 6 conrods. The failure occurred because both the No 5 and No 6 conrod bearing shells rotated, which they cannot do if they are adequately secured in position by the force of the bolts. The bolts were not holding the big end bearings in place.
The No 5 and No 6 big end bearings seized and spun because the bolts had insufficient pre‑load.
I accept as Dr Townend outlined that the loss of clearance, caused by loss of big end bearing thickness in turn due to seizure, caused the piston to impact with the cylinder head. When a piston reaches the top of its stroke, the big end of the conrod restricts further movement. If the bearing shells start to wear then the piston is able to travel a little further distance and in this case to travel far enough to strike the head itself.
It is MES's case that Mr Laczko accurately deduced from the photographs of the 3512 that the block was out of alignment and that subsequent measurements by Hofmann confirmed that conclusion. Mr Laczko's evidence was that if the crankshaft is not properly aligned then the lubricant will not be evenly distributed across the surface between the bearings and the crankshaft.
Dr Townend accepted that the load on the crankshaft was downwards and that there should not be polishing under normal condition. If the alignment of the crankshaft was correct even if there was polishing it would be constant across the entire surface of the bearing not only in one part.
Mr Hall's evidence is the only evidence as to pre-assembly process. His evidence was as to events which occurred in February 2004. He could not be expected to recall the detail of the work he did. There is no record of what torque was applied. The evaluation report does not in my view advance the position. The failure of MES to produce the entire evaluation report is significant. The single page document produced was itself shown to be inaccurate insofar as there had been no correction to indicate that the backlash problem had been remedied.
Mr Laczko's evidence is that the misalignment caused the bolts to self‑loosen as a result of vibration. This theory as to failure was first articulated in writing in his report of 27 October 2008. His earlier reports had proceeded on the basis that the bolts were properly tightened. He could have seen from a proper inspection of the photographs attached to Dr Townend's report that there was polishing and bending of the bolts.
Mr Laczko had considered the photographs taken by Dr Townend. He concluded the block was out of alignment and this view is supported by the post failure measurements made by Hofmanns. Dr Townend accepted that the Hofmann report indicated that the engine was not within specification. Mr Laczko considered that the signs of uneven wear on the bearings which were visible in the photographs were indicative of misalignment. There is no issue that there was wear on the bearings and that polishing should not be present.
Dr Townend concluded that there was no evidence of variations in the deck heights and misalignment of the crankshaft tunnel and in his opinion deck height variations and misalignment of the crankshaft were not relevant to the failure of the engine. Dr Townend's view is that that geometric vibration of the crankshaft could cause vibration if the misalignment was so serious that the bearings could not turn. In that circumstance the crankshaft could not turn in the bearings. Mr Hall's evidence was there was no difficulty in the crankshaft turning when he assembled it. The factual position is that the crankshaft was able to operate when the 3512 was attached to the dynamometer.
Mr Laczko's report was prepared on the basis of information supplied by Mr Erceg.
There is no evidence that vibrations did occur in the 3512 which forms the basis of the conclusion reached by Mr Laczko as to the loosening of the bolts and the failure of the 3512.
It was Dr Townend's evidence which Mr Laczko accepted that if there was a significant misalignment problem the engine would have had difficulty turning the crankshaft on assembly.
There is no clear evidence that I am prepared to rely upon to establish that there were pre‑failure alignment issues. Even if there were pre‑failure alignment problems I am not satisfied that the vibrations which would result would be sufficient to cause the bolts to loosen and lead to the failure. Mr Laczko's evidence does not satisfy me in relation to that matter. He produced no data or evidence which I am prepared to accept to support his opinion in relation to the loosening.
Dr Townend's opinion as to the cause of the failure is not necessarily inconsistent with there having been some misalignment but not such as to cause vibration resulting in the loosening of bolts.
Dr Townend was very firm in his opinion that one cannot compare post‑failure and pre‑failure condition of an engine because on catastrophic failure there is going to be some sort of distortion. The crankshaft was damaged and the damage could have affected the measurements made. On that basis I accept that Dr Townend's view that post‑event failure measurements are not indicative of pre‑failure condition.
MES's theory is vibrations from the misalignment caused self-loosening. I consider the cause of the failure was the failure to secure the bolts. In that regard I accept Dr Townend's opinion in preference to that expressed by Mr Laczko.
I cannot be satisfied based upon the evidence of Mr Hall that the bolts were properly tightened. I have already outlined my views in relation to Mr Hall's evidence and its reliability.
Dr Townend and Mr Laczko were qualified and experienced in relation to failure of engines.
Mr Laczko proceeded on the assumption that the bolts were properly tightened and that there was misalignment. This was based upon information provided to him by MES. He did not examine the engine block before he prepared his first report and did not have the advantage Dr Townend had of examining all of the parts.
Dr Townend inspected the 3512 shortly after it had failed. He was able to view the 3512 in its then partly disassembled state. He had in my view an advantage in this respect over Mr Laczko who was not engaged until a much later stage.
Dr Townend took photographs of the components of the 3512 and prepared a comprehensive and detailed report. There was nothing inconsistent between his view as to the cause of the failure and the usual operation of the 3512. His investigations were careful and thorough.
In this report Dr Townend had included photographs of the bolts. The photographs showed that the shanks to the number 5 position bolts were lighter than those removed from the number 6 position. The photographs also showed polishing marks on the number 5 position big end bolts. Mr Laczko did not before preparation of his early reports properly consider the condition of bolts and the photographs of the bolts. Ultimately it was the condition of the bolts which led Mr Laczko to change his view as to the cause of the failure. Mr Laczko would not concede in evidence that there was an advantage in looking at the actual parts rather than the photographs of them which had been taken by Dr Townend.
Dr Townend's findings and conclusions were logical and explained all of the relevant matters he had discovered on inspection. He was carefully cross‑examined and maintained his views throughout. He was prepared to make appropriate concessions. His view as to cause of the failure is logical.
Dr Townend had been engaged to ascertain the cause of the failure and approached the matter on that basis. Mr Laczko had been instructed from the outset that the bolts had all been tightened. He assumed that to be the case and his first two reports proceeded on that basis. He had been informed that the main bearing tunnel was out of alignment with the cylinder head deck after the bearing bores had been built up by using bronze welding. It was Mr Laczko's evidence that he relied upon what Mr Erceg had told him and also relied upon the photographs which he said were consistent with what he had been told. It was on that basis that Mr Laczko prepared his reports.
It was only at a very late stage before trial that Mr Laczko inspected the bolts and expressed the opinion that vibration would have caused the bolts to loosen while the 3512 was being tested. There was no supporting evidence in relation to there having been vibration. This aspect of his conclusion as to cause of the failure was not supported by evidence.
It was Mr Laczko's evidence that the post failure measurements of the engine block accurately show the state of the engine block pre-failure. In the case of the 3512 there was no evidence of cracking. Dr Townend's view is that there can be deviations in measurement pre and post‑failure. Mr Laczko accepted that it was possible for there to be deviations. Dr Townend refers to problems in measurement which can produce differing results and his view is criticised in this respect by MES. I prefer, as I have said, Dr Townend's view based as it is upon the proposition that in a failure there are significant forces applied to the components of the engine. Dr Townend's evidence as to the effect on components of lack of lubrication at start up adequately explains the polishing of the main and big end bearings.
Dr Townend has maintained the views expressed in his report throughout. Mr Laczko changed his opinion and only provided a written report very shortly before trial in which the changed opinion is expressed.
Dr Townend's opinion as to the cause of failure is consistent and logical. There is no evidence supporting Mr Laczko's theory that vibrations caused the bolts to loosen.
I am not satisfied that the evidence of Mr Hall establishes that the bolts were secured. In the circumstances there is nothing in the view I have formed of his evidence which affects the opinion expressed by Dr Townend.
As I have said, I prefer the evidence and explanation of Dr Townend to that of Mr Laczko as to the failure of the 3512.
I am not satisfied that HSE breached the implied term that the materials and parts supplied by it would be fit for the purpose.
In the circumstances I consider that HSE has made out its claim in relation to the 3512.

Assessment of damages in relation to the 3512

HSE claims for damages as follows:
(a)the cost of a replacement engine of $49,500;
(b)the cost of parts purchased of $65,172.46; and
(c)the sum paid to Noordeman in the sum of $9,167.75.
The compensation principle in contract provides that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed: Robinson v Harman (1848) 1 Exch 850 at 855; 154 ER 363 per Parke B.
In Commonwealth v Amann Aviation Pty Ltd (1992) 174 CLR 64 Mason CJ and Dawson J said at 80:
"The onus of proving damages sustained lies on a plaintiff and the amount of damages awarded will be commensurate with the plaintiff's expectation, objectively determined, rather than subjectively ascertained. That is to say, a plaintiff must prove, on the balance of probabilities, that his or her expectation of a certain outcome, as a result of performance of the contract, had a likelihood of attainment rather than being mere expectation."
HSE submits that the agreement was that it would purchase the replacement parts and arrange and pay the subcontractor services and MES would supply the labour and some parts in consideration for HSE paying to MES the sum of $48,320.84.
Following the failure of the 3512 HSE purchased an engine from WesTrac Used Parts to be installed into a dump truck which was awaiting the failed 3512. The cost of the engine was $49,500 and that sum was paid by HSE. The engine when purchased had completed about 17,000 hours of service and had about 3,000 hours of life left to run before it needed a full rebuild and replacement. Had the 3512 been reconditioned and not failed Mr Moralee expected it to have run for a minimum of 20,000 hours before its next overhaul would have been due. HSE would save for the breach have received the 3512 fully reconditioned and capable of delivering 6,000 hours or 12 months of service.
I accept that HSE is entitled to the cost of a replacement engine without parts of $49,500 and is entitled to damages in that sum. There is no issue raised by MES in relation to this sum.
By about October 2003, the 3512 engine had come to the end of its service life. HSE decided to have it overhauled and on that basis MES was engaged. The cost of overhauling the 3512 relevantly required work to be done by Noordeman, replacement parts to be utilised and labour to assemble the 3512 using the replacement parts.
The agreement concluded was that HSE would purchase the replacement parts and pay for Noordeman's services and MES would supply the labour and some parts in consideration of HSE paying to MES $48,320.84.
Mr Erceg in his letter dated 17 March 2004 stated that MSE would compensate HSE for the damaged parts and that when the payment of compensation had been made the 3512 would be returned disassembled. The 3512 and the parts supplied by HSE have never been returned by MES to HSE. There is no evidence that the parts supplied or the 3512 were of any value subsequent to the failure.
Expenditure reasonably incurred in preparation for, or in the course of performance of a contract is recoverable to the extent to which it is wasted as a result of breach (see Sneddon, NC and Ellinghaus MP, Cheshire and Fifoot's "Law of Contract" 9^th Aust ed, 2008, at [23.11], p 1087). HSE is entitled to recover expenditure that it incurred in performance of its side of the contract, where the expenditure is wasted because of MES's breach (McRae v Commonwealth Disposals Commission (1951) 84 CLR 377).
I accept as submitted by HSE that an award of damages including repayment of the sum of $9,171.56 for Noordeman's services and the sum of $65,171.56 will have the effect of putting HSE back in the position it would have been had the breach not occurred. It will not place HSE in a superior position: Commonwealth v Amman Aviation Pty Ltd (1992) 174 CLR 64.
HSE has been required to meet expenditure in the form of cost of replacement parts, Noordeman's fees and the cost of a replacement engine. The expenditure on the parts and the Noordeman fee has been lost. The parts supplied have not been returned. I am satisfied that all of the expenditure is damage which flows directly from the breach of the agreement by HSE by MES.
HSE incurred the Noordeman expenditure and the cost of parts as a direct result of entering into the agreement with MES and in performance of its side of that agreement. Because of MES's breach it has lost the benefit of the services and the parts (McRae v Commonwealth Disposals Commission (supra).
If the contract had not breached the position would have been that HSE would have made payment to MES of the agreed sum of $37,000.

Dr Townend's fee

When Mr Moralee arrived at MES's workshop on 25 February 2004 the 3512 had been removed from the dynamometer and had been dismantled. It was Mr Moralee's evidence that when he spoke to Mr Erceg he had told him that MES had already started to order parts and that MES would get the 3512 back together. There was a discussion about obtaining an independent report as to the cause of the failure and whether the damage to the 3512 would be covered by the warranty.
It was Mr Moralee's evidence that Mr Erceg suggested that Dr Townend be used to assess the 3512. Mr Moralee agreed and it was his evidence that Mr Erceg agreed to pay for the cost of the report. It was on his evidence to be an open report to MES and HSE to decide upon the cause of the failure. At the request of Mr Erceg, Mr Moralee arranged for Dr Townend to attend the premises.
It was Mr Erceg's evidence that Mr Moralee had telephoned him after the engine failure. He had asked if there was any objection to Dr Townend performing a failure analysis. He said Mr Moralee had engaged Dr Townend and had given him a purchase order. There was on his evidence no discussion about who would meet payment of Dr Townend's fee.
Mr Erceg gave evidence in cross‑examination that he told Mr Moralee that an expert must first investigate and determine cause before any repairs could be carried out.
He was asked about the report and said:
"The day he came out, Mr Moralee, I'm just trying to clarify this now, when he said he needed it repaired immediately, you told him an expert must first investigate and determine cause before you can repair. That's what you told him that day, isn't it? ‑ Absolutely.
So you're the one who came up with the idea that the expert must report? ‑ No, because we wouldn't do the job unless we get paid for it. We've been bitten by HSE before, so we didn't want to do the - incur more costs, before we get the expert to assess the situation and tell me who's wrong."
Mr Erceg said in evidence that if MES had agreed to meet payment there would have been a purchase order. He said that was how people were engaged. Mr Moralee denied that it was his suggestion that Dr Townend be engaged. He was adamant that Mr Erceg had said that he would meet the expert's costs.
During the course of the inspection Dr Townend raised the question of payment for his report with Mr Moralee. He asked Mr Moralee for a purchase order as he was concerned that MES would not pay his fee if his report was unfavourable. It was Dr Townend's evidence that HSE would meet payment of his account.
The circumstance in which Dr Townend was engaged were that HSE and MES were unsure as to whether the warranty in relation to the 3512 would be applicable. It was a question of determining responsibility and for that purpose Dr Townend was engaged.
The quantum of the claim in relation to Dr Townend's report is admitted. It was Dr Townend's evidence that he spoke to Mr Moralee about his report and his fee. It was his evidence that HSE would provide an order number to him and would meet payment of his fee.
The evidence of Mr Moralee was that the report was to be for both parties. Mr Erceg denied that there was such an agreement.
It was Dr Townend's evidence that he preferred HSE to raise the purchase order. Dr Townend had given a favourable report to Mr Erceg in the past.
Mr Moralee's evidence was that Dr Townend requested that he issue the purchase order to him because he was concerned that Mr Erceg would not pay. This is consistent with Dr Townend's evidence that HSE was to make payment to him of his fee.
The impression I formed of Mr Erceg's evidence was that he believed that because a purchase order was not issued by MES there was no agreement. Further, because HSE had issued the purchase order it was responsible for payment. That may be the case as between HSE and Dr Townend but does not affect any agreement between HSE and MES. I consider that it was improbable that there would not have been a discussion about payment of Dr Townend's fee as was suggested by Mr Erceg in his evidence. There was an issue as to who was responsible. Mr Erceg was already taking steps to deal with the 3512 failure by the time Mr Moralee became involved. I prefer Mr Moralee's evidence to that of Mr Erceg as to the discussions as to responsibility for payment of Dr Townend's fee. I accept that it was agreed by Mr Erceg that MES would meet the cost of Dr Townend's services.
The claim in relation to Dr Townend's fees succeeds.

The 3508 claim

HSE's case is that MES is in possession of parts of one of its 3508 engines and refuses to return them.
Mr Moralee gave evidence that in 2003 HSE owned core engines and long engines. It was his evidence that a long engine is a reconditioned engine without accessories installed to enable it to operate.
The claim is pleaded as follows:
"14.The Plaintiff is the owner of a 3508 Caterpillar 777B engine ('the Core Engine') which comprises the parts ('the parts') particularised below.
PARTICULARS
(i)One crankshaft;
(ii)8 piston and rod assembly, spray nozzles and associated hardware;
(iii)8 liner assembly;
(iv)8 complete cylinder heads including all rocker/valve train and covers;
(v)1 engine sump, oil pump and all associated piping and hardware;
(vi)1 flywheel and rear cover assembly including all associated gears and shafts;
(vii)2 camshafts and associated rack assembly and actuating parts;
(viii)1 front timing cover and all associated gears assembly and shafts;
(ix)1 engine front damper/balancer;
(x)All associated bolts, hardware and fittings to assemble 3508 Caterpillar 777B engine.
15.On or about 9 July 2003, as part of a job quoted under Job Estimate number 'CPI-01' dated 1 July 2003, the Defendant undertook to remove certain ancillary components from the Core Engine, overhaul same ancillary components and fit same ancillary components to a rebuilt long engine belonging to the Plaintiff, which was at the relevant time in the Defendant's possession ('the job').
PARTICULARS
1.The Plaintiff relies on the following documents:
(i)fax from Jeff Young, to John Moralee dated 4 July 2003;
(ii)the Defendant's Job Estimate document titled 'CPI-01' dated 1 July 2003;
(iii)the Plaintiff's Purchase Order Number 11062 dated 9 July 2003.
2.The ancillary components are listed in the Job Estimate Number 'CPI-01'.
16.To enable the Defendant to perform the job, the Plaintiff delivered to the Defendant the Core Engine, which contained both the ancillary components and the parts.
17.The Defendant completed the job as set out in paragraph 24 and returned the rebuilt long engine to the Plaintiff, thereafter issuing a tax invoice no 2131 of 22 July 2003, which the Plaintiff paid on or about 23 October 2003.
18.The Core Engine comprising the parts remains in the possession of the Defendant.
19.In or about August 2004 the Plaintiff demanded the return of the parts but the Defendant refused to deliver up the same to the Plaintiff, thereby detaining and converting the parts to is own use and wrongfully depriving the Plaintiff of the same.
20.As a result of the Defendant's refusal as set out in paragraph 19 above, the Plaintiff has suffered damages in the sum of $63,910.00 plus GST being the value of the parts.
PARTICULARS
Particulars will be provided in the Plaintiff's Particulars of Damages."
On 4 July 2003 Mr Young sent a facsimile to Mr Moralee enclosing an estimate of $47,737.22 for work to be done on a CAT 3508 engine. The facsimile refers to the condition of the engine.
On 9 July 2003 HSE issued a purchase order to MES in relation to work to be done on a 3508. The work is described as being to:
(1)remove all ancillary components from engine and overhaul to MES warrantable specs;
(2)fit all over all overhauled components to rebuilt long engine (at MES overhauled), dyno to HP spec. New wiring harness to be fitted to engine.
Mr Moralee's evidence in relation to the purchase order was that Item 1 related to work to be done in relation to a core engine and Item 2 related to work to be done on a long engine.
Mr Moralee gave evidence that after the work had been completed HSE received back one complete reconditioned engine.
Mr Erceg's evidence which I accept in this regard is that he had caused a search of MES's premises to be undertaken and that the only parts located were for the 3512. He was clear in his evidence that parts for a different 3508 engine had been collected by MES after MES has advised it no longer would do work for HSE. His evidence in this respect was as follows:
"The engine that you say that was picked up. That was the engine that had been ‑‑‑? – That's the engine we didn't want to overhaul because we were having a problem with the payments from HSE Mining and then also the problem with this next engine that failed. We didn't want to go in to the deeper engagement with HSE Mining and that was a money decision, a commercial decision. We wait for three months for our payments on the first engine.
When you say parts were picked up, were they the parts from this engine that you ‑‑‑? ‑ Complete engine was picked up and WesTrac has overhauled that engine for them I believe, I'm not sure."
By facsimile dated 4 August 2004 from the solicitors for HSE to MES demand was made for return of 3508 parts.
The response of MES to the claim was to assert an unpaid repairers lien in relation to the parts. In a letter from its solicitors MES's position was enunciated as follows:
"We do not have detailed instructions as to what parts belonging to your client are in the possession of our client. Although our client acknowledges it has a few of those parts. Our client is entitled pursuant to its unpaid repairer's lien to hold any such parts."
It was Mr Erceg's evidence that the solicitors' letter was written without authority. In any event the letter makes clear that MES had not provided detailed instructions. Mr Erceg said this was a mistake and the reference to the 3508 should have been a reference to the 3512. In the circumstances I do not accept that the content of the letter establishes that MES had possession of the parts claimed. MES had until trial asserted a possessory lien over parts the subject of the claim, but did not admit possession of the parts.
It is necessary for HSE to satisfy me in relation to its claim.
It is clear that there was a request by MES for HSE to do work on a 3508. Ultimately a reconditioned engine was delivered to HSE. HSE was invoiced and the work was paid for in about October 2003.
The case of MES is that it does not have any of the parts of HSE in its possession. This was Mr Erceg's evidence. By March 2004 the relationship had broken down. In his letter of March 2004 Mr Erceg had noted in relation to a different 3508 engine that MES had ceased all work on that engine and all the parts will be returned to HSE. Mr Moralee's evidence was that the parts from that engine were collected. In these circumstances I consider it impossible that if parts the subject of the claim were in the possession of MES they would also not have been collected by HSE.
MES's case is that it is impossible to identify the engine parts the subject of the claim. HSE did not lead any evidence as to when the parts were delivered and their condition when delivered. Mr Moralee did not give evidence that he caused the parts to be delivered. His evidence was in this respect vague and I am not prepared to rely upon this part of his evidence. He did not have personal knowledge of the items the subject of the claim and in my view assumed the parts had been delivered to and remained with MES. His evidence in this respect appeared to be very much dependent upon the content of documents rather than any independent recollection.
The facsimile from MES dated 4 July 2003 refers to the long engine. The purchase order dated 9 July 2003 notes that the long engine was at MES. There is no evidence as to the location of the core engine. A handwritten note by Mr Moralee on the purchase order states "Truck 219 short engine still at MES". I am not satisfied this establishes that that the short engine was at MES. As counsel for HES submitted, at best this is evidence as to what Mr Moralee believed. There is no evidence that any engine delivered to MES came from Truck 219.
There is no written record of HSE delivering the items the subject of claim to MES. There is no evidence as to serial numbers or other identification of the items the subject of the claim.
I am not satisfied on the evidence that the claim is made out.
Daniel John Sweeney ("Mr Sweeney") is a qualified heavy diesel mechanic with over 25 years experience working in mining. He is the owner of a mechanical repair workshop performing work on behalf of clients in the mining industry. His role is to order parts and spares for engines and regularly deals with 3508 Caterpillar engines. Mr Sweeney's expertise was not challenged nor was his valuation.
He gave evidence he was asked to value engine parts by reference to a quotation from Expressway. He was able to identify the parts required and by reference to the price for an equivalent part concluded that a reasonable estimate of the cost of the parts in a second-hand usable condition was $70,301.
Mr Sweeney's evidence was that his valuation was based on a usable second‑hand part. An unusable part is incapable of being sold on the market. There is no record or other evidence as to the condition of the parts.
Whilst I am satisfied that Mr Sweeney's evidence is reliable and that the value of usable parts would have been $70,301 there is no evidence as I have said as to the condition of the parts delivered.
The claim for damages for conversion is dismissed.

Conclusion

HSE is entitled to judgment for damages. I will hear the parties as to the final form of orders and costs.