Tool-Rite Co P/L v Bowater Tutt Industries P/L No. DCCIV-95-449 Judgment No. D3928
[1998] SADC 3928
•15 December 1998
TOOL-RITE CO. PTY. LTD. V BOWATER TUTT INDUSTRIES P/L trading as DETROIT ENGINE & TURBINE COMPANY
[1998] SADC D3928
Judge Bishop
Civil
INTRODUCTION
Tool-Rite Co. Pty. Ltd. (the plaintiff) has claimed $8,427.83, together with interest, from Bowater Tutt Industries Pty. Ltd., trading as Detroit Engine and Turbine Company (“the defendant”) for work performed and materials supplied pursuant to agreements made between them and at the defendant’s request in July and August 1994 in relation to Compressor No. 1 (“the compressor”) installed at the Bolivar Sewerage Treatment Works (“Bolivar”). In denying that claim, the defendant has counterclaimed $80,333.96 for loss and damages suffered as a result of the plaintiff’s alleged breach of those agreements and or negligence. In reply, the plaintiff has denied that the defendant is entitled to the damages and relief sought in the counterclaim.
Trial of these actions commenced on 10 November 1997 and, with regrettable but unavoidable delays, occupied 20 hearing days during which 1637 pages of transcript were taken until 20 November 1998. To facilitate resolution of the issues here arising, by document in writing made on 10 November 1997 and amended on 16 November 1998, the parties agreed:
“Corrosion Damage
1.There was corrosion damage to the LP [low pressure] cylinder bore of Compressor No. 1 at Bolivar in or about July/August of 1994.
2.If the corrosion damage was caused by water or coolant entering the LP cylinder through the mating surfaces of the upper head of the LP cylinder and the LP cylinder (i.e., where the head gasket is placed), then:
2.1the plaintiff’s claim should be dismissed
2.2the defendant should have judgment on its counterclaim for damages to be assessed with respect to the corrosion repairs.
3.If the corrosion damage was caused in a way other than that set out in paragraph 2 above, then:
3.1the plaintiff should have judgment on its claim, with damages to be assessed
3.2the defendant’s counterclaim insofar as it relates to the cost of the corrosion repairs should be dismissed.
Conrod Failure
4.The high pressure [HP] conrod on Compressor No. 1 failed on 19 December 1994.
5.The cause of the conrod failure was the use of an incorrect nut being a black unhardened sub-standard nut (“the black nut”) fitted to the conrod bolt.
6.If the plaintiff was responsible for the installation of the black nut then the defendant should have judgment on its counterclaim for damages to be assessed with respect to the repairs of the damage caused by the conrod failure.
7.If the plaintiff was not responsible for the installation of the black nut then the defendant’s counterclaim insofar as it relates to the cost of the conrod repairs should be dismissed.”
[My emphasis.]
Three witnesses gave evidence for the plaintiff - Mr. Sain (then the plaintiff’s managing director), Mr. Williamson (a mechanical engineer) and Mr. Hobson (a motor mechanic previously employed with the plaintiff). For the defendant, there were seven witnesses - Mr. Conway (an electrical engineer previously employed with the defendant), Mr. Tait (a mechanical engineer employed with the defendant), Mr. Short (previously employed with the defendant), Mr. Hordacre (a fitter and turner previously employed with the plaintiff), Mr. Kean (a fitter, machinist and co-owner of Finsbury Service Pty. Ltd.), Mr. Sleep (previously employed as Contract Supervisor at Bolivar with the Engineering & Water Supply Department (“EWS”) and Mr. Egan (a metallurgist previously employed with Amdel, a provider of analytical services). Numerous exhibits were tendered, including extensive correspondence between the parties (exhibits P1 and P1A, which were later chronologically consolidated (“CB”)) relating to the issues here to be determined. Conveniently, reference shall now be made to that correspondence (with my emphasis added).
CORRESPONDENCE
The compressor was one of three reciprocating compressors sold and shipped to the defendant in 1992 by the American manufacturer, Gardner-Denver Compressors (“GD”). On 20 April 1993, GD sent to the defendant a document explaining the, “importance of extended storage preparation on new compressors not placed into service within 30 calendar days” (CB3) so as,
“to minimize storage deterioration to compressor internal parts. The major concern is rust due to temperature changes, causing condensation” (CB4).
On 1 January 1993, the plaintiff became the Australian agent for GD; previously the defendant had held that position.
On 23 April 1993, GD wrote to the defendant concerning, “considerable internal rust and corrosion” which had been observed by the plaintiff on two of the three compressors’ low pressure piston rods as “a result of storage deterioration” (CB9). On 29 April 1993, the defendant replied, agreeing that “it is unfortunate these units rusted” (CB11).
On 26 August 1993, the plaintiff accepted responsibility to repair and commission the compressor, indicating to the defendant that, “it will be a requirement for us to investigate the cause of the two previous failures ... as in our opinion it seems there may be other factors external to the compressor which could be contributed [sic] to its failure” (CB22).
On 13 September 1993, the plaintiff wrote to the defendant regarding the defendant’s “lack of co-operation” and the “lack of parts available for reassembly”, including “the HP cross head which is in your store and supposed to be delivered here last week, as well as conrod-bolts and bearings” (CB30). On 17 September 1993, the plaintiff obtained numerous parts ‘from the compressor’ at Bolivar with which to rebuild it, including two conrod bolts (CB31).
On 15 October 1993, GD wrote to the plaintiff offering (inter alia) three comments - that a gas scrubber should be installed in the suction line to the compressor; that cooling water should be maintained 20oF higher than inlet gas temperature; and that pulsation bottles at 2nd stage are non-existent (CB33). On 11 February 1994, a meeting was held at Bolivar between the plaintiff, the defendant and EWS to, “ensure that the reinstallation is in accordance with GD requirements” (CB37). Upon the three comments of GD, the Minutes of Meeting recorded that - in relation to the cooling water, the defendant and EWS were to investigate; in relation to undersized interstage pulsation bottle, no action by defendant yet; and, in relation to install gas scrubber for H2S, GD was to advise effect of increased H2S levels on valve life and maintenance program (CB38, 39).
While the plaintiff was engaged in recommissioning the compressor, the defendant was engaged in recommissioning Compressors Nos. 2 and 3 (CB39). On 9 March 1994, the plaintiff wrote to the defendant regarding the plaintiff’s concern about work being “tampered with” in the plaintiff’s absence and parts appearing to have been “exchanged or taken from” the components brought to site by the plaintiff (CB39A and 39B). On 11 March 1994, the defendant replied denying those allegations (CB39C and 39D).
On 29 March 1994, GD wrote to EWS confirming (inter alia) the three comments that it had offered to the plaintiff on 15 October 1993 (CB40, 41). On 30 March 1994, EWS replied, asking whether there were any particular areas of high priority where, “unless action is taken further damage may occur to the Compressors” (CB42). GD replied on 4 April 1994, recommending that a suction scrubber and filters be installed with adequate drain connections and also indicating that, after review of the gas analysis provided by the plaintiff, the amount of H2S should have no effect on the operation of the compressors (CB43, 44).
On 13 April 1994, the defendant advised the plaintiff that the defendant could provide required parts “from compressor No. 3 and order new ones to replace them” (CB47).
On 18 April 1994, the plaintiff asked the defendant to review the matters referred to in GD’s letter of 15 October 1993, “as if all these items are not addressed the longevity of the unit could be compromised” (CB48, 49). On that date, the defendant also wrote critically to the plaintiff and referred to having provided the plaintiff with a tension wrench on Friday, 15 April 1994 (CB50).
On 20 April 1994, the plaintiff informed the defendant that the compressor was, “all back together. Please notify us when pipework is complete” (CB53); and, on 21 April 1994, that, “We will be available to commission the unit once you have attached all the ancillary equipment” (CB54).
On 10 May 1994, a meeting was held between the plaintiff, the defendant and EWS. Minutes of the meeting recorded (inter alia):
“1..... Gas Quality
GD correspondence advised H2S not a problem. Toolrite advised GD concerned mainly with moisture and particulates. GD adamant that scrubber is required. Appears to be quantity of water in gas. Issue of removing CO2 and H2S as well as water and particulates should be looked at for longevity of compressors. Compressors can run with negative inlet pressure.
GD’s advice to DETCO and EWS in [sic] H2S is not a problem since compressors designed to operate on sour gas.
GD to be requested to provide a recommendation regarding means of [bringing] gas quality up to an accepted standard. Gas temperature vs cooling water temperature should also be considered.
ACTION: DETCO
2.......
3.Pulsation Bottles
Toolrite will provide DETCO with correct sizing of pulsation bottles.
ACTION: TOOLRITE”
(CB55, 56).
On 11 May 1994, the plaintiff expressed continuing concern to the defendant about, “the items which seem to be “tampered” with on site”:
“As you are aware the substitution of a non standard bolt and loosening off of the HP x LP Packing could have been of grave consequence and as advised I [Sain] personally saw Don [Hordacre] check these for tightness before I sealed the unit off.
Yesterday we had problems in commissioning with HP interstage trips. This resulted in the removal of the valves on the HP Head and we found that some of these valves had been used indeed some with carbon build up on the faces and that others had severe heat marks and pitting.
Obviously we have 1 of 2 scenarios
1.The valves were not reconditioned. As you supplied them to us .... this seems unlikely.
2.The valves were exchanged for others out of the other units without your knowledge.
In either case .... this situation mirrors both our concerns as to what is occurring .... as our risk is unacceptable when affected by actions beyond our control” (CB60).
To that letter, the defendant did not reply.
On 16 May 1994, the plaintiff advised the defendant that it did not recommend the operation of the compressor, “until all problems associated with this installation are resolved and solutions actioned”:
“The unit has been rebuilt to GD standards and will be commissioned, but we must advise that damage to the unit can occur if run in the current situation. Of particular short term concern is the moisture levels present, as was evident in your [Tait] presence, where a large quantity of water was removed from the unit cover, valves, piston rings and piston rods which may cause severe failure of the unit.
While the unit may be fully operational and we warrant our supplied parts and labour against defects, we advise that we would not operate this unit until all problems are rectified and that operation of this compressor may invalidate warranty considerations” (CB64).
On 19 May 1994, the plaintiff sent to the defendant a copy of a letter (of that date) sent by the plaintiff to GD, seeking the information requested of GD by the defendant and EWS on 10 May 1994 - including what type of cleaning of the gas is required; what type of scrubber is required; what are the acceptable maximum levels of H2O, H2S and particulates to provide longevity to the compressors; and sizing of the pulsation bottles - so that,
“Hopefully this will then allow Detroit and the EWS to engineer the correct solutions and complete this project to everyone’s satisfaction” (CB67, 68).
On 25 May 1994, the compressor was commissioned by the plaintiff, in that the printed “Start-Up Check List” was completed. Upon that document, Mr. Sain noted:
Unit is used with Digester Gas high H2S, CO2 and saturated vapour. No scrubber, Pulsation bottles too small, cycle rate too high. Inlet temp. too high for cooling temp. Coupling should be rigid type” (CB69).
On 3 June 1994, following reply to the request for information from GD, the plaintiff sent that reply to the defendant and EWS, enclosing sketches of the recommended gas scrubber and pulsation bottles (as previously sent to the defendant on 10 April 1992) and noting that, “Suction scrubber could be utilized as volume bottle” (CB70-78).
On 12 July 1994, the plaintiff wrote to the defendant:
“Further to your letter of the 28 June 1994 [which was not here tendered] we advise that we are not in a position to give approval or disapproval to the running of No 1 Compressor. The matters we have brought to your attention are items forwarded to us by GD or observed on site and were for the longevity of your equipment.
If you have satisfied yourself that all items have been attended to then it is for you to make the decision to run the unit. We cannot give our approval to your engineering as we have not fully assessed the parameters as this is beyond the scope of our contracted work ....
As witnessed by you, the unit was commissioned and running satisfactorily ....
The unit was in fine operational state when we commissioned it and we feel it only needs to be primed, checked for water in the cylinders and crossheads to be lubed to allow it to go into service. Your company must ascertain if all criteria has been met as per our previous advice” (CB82).
On 25 July 1994, preparatory to restarting the compressor, Mr. Sleep (from EWS) and Mr. Tony Van Lysdonk (from the defendant) checked for moisture in a lower discharge valve of the lower head of the LP cylinder and there found 1/8 to 1/4 cup of “water”, “either condensate or cooling water” (Sleep, T1274). The upper head and head gasket were subsequently removed. On 28 July 1994, the plaintiff wrote to the defendant, indicating these “facts that seem apparent”:
1...... There is no visual sign of damage or tracking of the gasket or its mating surface.
2There is no swelling of the gasket.
3.There are 4 areas of corrosion or crystal or chemical deposits; 2 near waterways and 2 away from water passages.
4.The whole of the cylinder seems to be “washed” and has had Mobil 600 Super Cylinder Oil removed from the whole face which is quite a different condition to that seen in the HP Piston.
5.Some black tracking was evident in the cylinder which may be molybdenum disulphate we use when assembling compressors.
As it is impossible to show mechanical damage or leakage at the gasket face it is very difficult to blame the gasket or its fitting as a cause of the cylinder condition.
As discussed with you, you have taken samples of the crystals for analysis and this may reveal their composition and hopefully point to the cause of this situation.
Further the EWS have taken some of the water for analysis which may also help to determine what is occurring.
If the gasket, which seems the least likely solution, proves to be faulty I will need to probe GD with regards to warranty consideration .... and GD may require some proof of the gasket source.
Please ensure that the gaskets remains intact and safe as this may prejudice any possible warranty consideration.
With regard to remedial work we await your order number” (CB 83, 84).
(Somewhat surprisingly, the head gasket, which was subsequently taken to the plaintiff’s premises, later disappeared and was not here produced.)
On 4 August 1994, the defendant wrote to the plaintiff:
“We have received preliminary results from Amdel of the liquid and corrosion products found in Compressor No 1. They have found traces of coolant in the liquid in the bore of the low pressure cylinder, and have found no evidence that the corrosion products are a result of any reaction with hydrogen sulphide. This is consistent with the observation that no corrosion is evident on the cylinder head, but is present on the cylinder wall below the gasket and appears to be aligned with cooling water passages in the cylinder.
Please note these are preliminary results, however they do suggest that the cause of the problem was in fact a leak in the head gasket rather than condensation and could well be a warranty situation” (CB86).
To that letter, the plaintiff replied, on 12 August 1994, that it could not agree with the statements there made:
“[We] can see no correlation between the two samples or how your laboratory has drawn its conclusions. We have sought other advice on this matter and the information we have been given is that there is inconclusive evidence to categorically state that we have cooling water in the cylinder. Our industry sources have suggested that we would need samples of the saturated inlet gas to be tested as these may also contain the same elements that are present in the conditioned cooling water. Further we would need to know the composition of the cooling water additives from the manufacturer to check for any elements exclusive to the conditioner.
We have discussed this matter with Amdel Mr. Bernard Egan after we gained your permission to do so and he advises that there is a possibility that the preliminary results only report to moisture and elements coming from the inlet saturated gas. .... As stated he approached his investigation from the view point that we were looking to prove that we have cooling water in the cylinder rather than trying to identify what the moisture was and where it could possibly have come from” (CB96).
In that reply, the plaintiff also said that removal and inspection of both upper and lower heads for any “tracking” or gasket leaks had not revealed any evidence of either fault; that no distortion was present in the heads and cylinders; that the corrosion had occurred in a “dead spot” of the compressor around the cylinder to head joint; that the build up of moisture believed to have come from the inlet gas had caused the observed corrosion; and that, in the plaintiff’s conclusion from test and available evidence, there was no leakage due to material and workmanship provided by the plaintiff (CB 96, 97).
On 23 August 1994, when the plaintiff was still engaged by the defendant in repairing the compressor, the plaintiff wrote to the defendant confirming that valve plates in the LP valves (which had originally been overhauled by the defendant and handed to the plaintiff in sealed bags as complete overhauled units) had, “show[n] up on the lapping plate as being surface ground and are full of troughs and ridges”. The plaintiff concluded:
“We had a problem with commissioning of this unit when it was pointed out that the LP pumping action was down; this is obviously due to the valves supplied to us by Detroit” (CB110).
On 24 August 1994, the plaintiff informed the defendant that it could not give any warranty consideration to the compressor, “as we can find no evidence of head gasket failure due to installation or failure of the head gasket material” (CB111). The defendant replied, on 25 August 1994, that,
“You are basing your position on the fact that the head gasket appears not to have failed and that therefore the water found in the cylinder came from the inlet gas” (CB113).
The defendant also said that the plaintiff had disregarded many other significant issues, including Amdel’s analysis - “traces of coolant found in liquid, and pH of liquid basic (as is the coolant) not acidic as would be expected from condensation products in the presence of H2S”; and that the amount of liquid drained from the cylinder (“at least a litre”) was not entirely condensate and the only other source of liquid was the coolant (CB 113-114). In reply to that letter, on 25 August 1994 the plaintiff again denied that the head gasket had failed (CB115).
On 29 August 1994, the defendant’s solicitors wrote to the plaintiff and advised:
“The work required to repair the compressor was clearly warranty work for which your company was responsible. The evidence establishes the presence of coolant in the fluid found in the damaged cylinder and this contamination can only have been caused by some defect in the parts or labour for which your company was responsible. I am of the view that your assertions regarding the apparent condition of the head gasket miss the point. If coolant was present in the fluid, then the evidence overwhelmingly points to fault on your part. If you will not concede your responsibility with respect to the warranty work, then the matter will have to be resolved by a Court” (CB125).
On 14 September 1994, the defendant forwarded to the plaintiff a document summarizing all of the concerns that GD and the plaintiff were believed to have expressed regarding the compressors at Bolivar, together with the action taken by the defendant to address those concerns, and requested,
“review of these issues and confirmation that they are acceptable” (CB133). The document listed 16 matters of concern and the remedial action which had been taken by the defendant (CB134, 135).
In replying to that letter (and document) on 15 September 1994, while indicating an inability to comment on some of the concerns, the plaintiff did respond to other concerns, including the following:
Concern.................. Gas Scrubber should be installed on suction line (CB134).
Action taken A stainless steel coalescing filter was installed in the inlet pulsation bottle as detailed by GD. No other scrubbing has been installed (CB134).
Response................ We cannot comment on the scrubber other than our on site observations of No 1 compressor, which shows considerable water and particles being ingested by the compressor. This level is what we would consider as being well above normal, but have no empirical data (CB139).
ConcernCooling water should be maintained 20oF (11oC) above the inlet gas temperature (CB134).
Action taken........... This has not been done. Gas temperature approximately 28 - 30oC. Water temperature = 28o - 32oC (CB134).
ResponseOur records show gas inlet temperature at 37 degrees Celsius and cooling water temperature at 23-26 degrees Celsius. As previously advised we believe that this is a major source of water vapour dropping out of suspension and cause of some of the water problems we have observed on site. Water jacket temperature should be approximately 20 degrees Fahrenheit above maximum inlet temperature to reduce water dropout (CB139).
Concern.................. Recommend suction scrubber and filters to be installed with adequate drain connections (CB135).
Action taken........... Suction scrubber was installed as per GD advice. Pulsation bottles with coalescent filter pads were originally installed with adequate drain points (CB135).
ResponseRefer to item [re gas scrubber, above] and reiterate our on site observations regarding water in the unit especially from start up (CB140).
On 26 October 1994, Finsbury Service Pty. Ltd. (which had taken over from the plaintiff the repair of the LP system of the compressor) informed the defendant that the compressor had been started on 23 September 1994 (and run for four hours) and had been further tested on 24 and 28 September 1994 (for four hours and one hour, respectively):
“To date .... all other visual and temperature readings are indicative of satisfactory performance. When schedules permit, a thorough internal examination is required on this unit, to ensure that the running gear and valves etc. are intact and performing as per specification” (CB145).
On 20 December 1994, the defendant wrote to the plaintiff confirming that, on 19 December 1994, the HP conrod of the compressor had failed. (That failure, the parties have agreed, was due to the improper installation of “the black nut” to a conrod bolt.) Because the plaintiff had rebuilt that part of the compressor, it was invited to inspect the compressor before independent investigations commenced (CB147).
On 21 December 1994, the plaintiff wrote to the defendant:
“With regard to what we have observed on site I do suspect that a probable cause for the failure was the nut on the HP conrod. Making some investigations with the people who fitted the conrod here in my shop, they are both emphatic that the conrod was marked for matching edges with either one or two stamped dots. They cannot remember which was used for the LP and which was for the HP, however this fact does not matter.
They also remember that the conrod had new nuts and that these were both definitely black. They further remember that the nut was a special type with one machined face and six dots, one on each corner of the hex. They distinctly remember that the nuts should only be, and were applied, with the machined face to the conrod. The nuts we viewed yesterday, besides one being plated and the other not, are different to the ones fitted and torqued in our workshop. I do have an example of a similar nut to the one fitted to your unit in our office if you wish to see the distinct difference between those found in the compressor and those we know were fitted. The recollection of both persons involved is very clear and indeed collaborate each others recollection when quizzed independently” (CB148).
On 10 January 1995, the plaintiff wrote to the defendant informing of the price and availability of conrod nuts and bolts for the compressors. The plaintiff also asked the defendant to send it one of the nuts from Compressor 2 or 3, so that it could be sent to GD for any comments (CB155). To that letter, the defendant on that day replied, ordering 12 nuts for conrod bearing cap bolts for the compressors and confirming that it would appreciate if the plaintiff discussed the situation with GD,
“as compressors 2 & 3 also have the same type nuts as #1 ie apparently non-genuine. We will provide the existing nuts when they are changed out” (CB152).
(The plaintiff had never worked on Compressors Nos. 2 and 3 (T357) and did not ever receive the “existing nuts” from those compressors (nor were those nuts here produced).)
On 23 January 1995, the defendant wrote to the plaintiff enclosing a copy of a report (dated 10 January 1995) from Amdel, in which Amdel had concluded, “that one of the high pressure conrod big end nuts failed resulting in separation of the bearing cap and consequential damage” (CB159). In that letter, the defendant also observed that:
·.. the four big end bearing nuts were plain (that is, with no machined face or markings);
·.. the two LP nuts and one of the HP nuts were plated [that is, they were silvery in colour];
·.. the other nut on the HP bearing was black [this is the incorrect, black nut which failed];
·.. only one of the four nuts was black, notwithstanding the plaintiff’s contention that all of the nuts fitted were black;
·.. inspection of Compressors Nos. 2 and 3 had revealed that those compressors also had plain, plated nuts identical to [three of] those nuts in Compressor No. 1; and
·.. a spare conrod assembly in the defendant’s stock similarly had plain, plated nuts identical to those at Bolivar (CB159, 160).
(Such an assembly was not here produced by the defendant; nor was there here produced by the plaintiff the “new spare conrod” assembly, which it provided to Amdel for comparison testing (see CB151) and of which assembly both nuts were “black, had raised faces for the seal face (indicated by pimples)” and, upon testing, were found to be hardened (see CB151)).
THE CORROSION
Upon the evidence, there is no doubt that the LP cylinder bore of the compressor was observed to have been corroded when inspected by numerous persons in July 1994. The issue which here arises is - what caused that corrosion, which necessitated honing of the bore and cleaning of the cylinder heads and valves (vide CB120-122). Was that corrosion caused by coolant flowing into the cylinder bore through a leaking upper head gasket (as contended by the defendant), was it caused by condensate from the digester gas being processed in the compressor (as contended by the plaintiff) or was it caused by a combination of those influences (for which resolution neither party here contended)? Determination of this issue entails a comprehensive consideration of the evidence. To that consideration, I shall now turn (adding my emphasis where appropriate).
When rebuilding the compressor in 1993 and 1994, the plaintiff fitted the upper head gasket (“the gasket”) between mating surfaces of the low pressure (LP) cylinder and the upper head of that cylinder. After the compressor was commissioned by the plaintiff on 25 May 1994 (during which process the compressor operated for about one and a half hours), it was not restarted for about two months. During the restarting procedures in July 1994, fluid was detected in the lower head of the LP cylinder. Upon removal of a valve in the upper head, corrosion was there observed. The upper head was then removed to determine the nature and extent of that corrosion.
Mr. Sain
In the evidence of Mr. Sain, a new and “genuine” GD head gasket had been fitted to the upper head during the rebuild of the compressor (T59, 89). He had seen Mr. Hobson and, probably, Mr. Hordacre, install the gasket in the plaintiff’s workshop at Holden Hill (T89). He later said that the gasket had been installed at Bolivar, after disassembly of the compressor for ease of handling (T273); and that he could not now recall the gasket having been installed at the workshop (T457). The cylinder head was fitted ‘loosely’ at the workshop, but the gasket was not there tightened (T455, 456, 457).
When the upper head was removed at Bolivar in July 1994 (in the presence of Mr. Sain, Mr. Hordacre and Mr. Hobson (then employees of the plaintiff) and representatives of the defendant and EWS), Mr. Sain observed,
“signs of corrosion or salt build-up .... inside the cylinder .... leading from above the head gasket through the head gasket area down into the cylinder. .... There was corrosion damage all the way through the unit. It wasn’t just isolated to one pocket” (T88, 89).
He described the “corrosion”:
“like scaly rust .... it is hard to describe. It is like some sort of chemical compound .... Not conventional rust .... Brown .... It was very thick .... like a lump and lumps and - like you would see, when you form crystals of salt .... there was a couple of places on the bore” (T93).
When again asked to describe the corrosion, he said:
“It was, for a better description, brown candle wax having been dripped down the inside and probably something in the order of .... three-quarters of an inch long and about three-quarters of an inch wide in various spots around the cylinder bore” (T94, 95).
He did not observe any of that deposit on the gasket, which was carefully removed (without sticking) from the cylinder.
Upon inspecting the gasket, Mr. Sain observed it to be a, “relatively clean ....normal head gasket .... still very pliable” (T95, 96). He did not see any corrosion, pitting or abnormality in the mating surfaces between the cylinder and the upper head (T96, 97, 103); nor did he observe any “tracking” in those surfaces or on the gasket, which is “usually” indicative of a leaking gasket (T98). The gasket was not discoloured, as it could have been had the “purplish” coolant been leaking past it (T98, 99).
In describing what he had observed in the cylinder bore, Mr. Sain said,
“I saw .... three or four different areas of corrosion .... like candle wax or crystals built up there” (T104).
He was unable to see from where that corrosion had come, but did not observe that it had come from the coolant water passages. He did not there observe any abnormalities; nor did he observe any swelling or damage of the gasket (T104, 106). The corrosion, he noticed, was not adjacent to the coolant water passages, but at various locations which he could not remember (T106, 107).
Mr. Sain also observed a substantial amount of similar corrosive deposits in the valve pockets of the upper head above the gasket, which, in his experience, had never resulted from a gasket problem (because of the force of gravity)(T121, 122). He was unable to detect any evidence of a gasket leak having occurred (T123). Coolants are usually ‘conditioned’, he said, to ensure that they are not corrosive (T123). (Mr. Egan, the metallurgist, later explained that coolants will lose their anti-corrosive effect if exposed to air (T1477).) Mr. Sain said that, with a head gasket leak, there would usually be “a discoloration .... around one side of the bore”, distinct from ‘candle-like streaks running down the bore’ (T122).
When he later inspected the lower head, Mr. Sain observed signs of corrosion similar in appearance to that seen by him in the upper part of the cylinder; that is to say,
“signs of corrosion in all of the valve pockets, similar to what I described .... in all the valve pockets, and also below the piston line [in the bore]” (T145).
Previously, when looking through the valve pockets in the upper head, he had noticed significant corrosion in that head:
“there was moisture and corrosion in the upper head and also in the valve pockets. .... There was a wax like falling formation, there was corrosion around the surface between where the ridge of the cylinder sits and the head and also up into the valve pockets, which is substantially higher” (T515).
In his opinion, the presence of corrosion above the upper head gasket was inconsistent with the leaking of coolant from that gasket (T369). (In the “Breakdown of Work” document for the period ending Friday, 19 August 1994, the plaintiff had detailed eight hours for “Clean heads and valves” and four hours for “Stripping valves and cleaning ready for lapping” (CB120-122).)
The plaintiff requested the defendant safely to retain the gasket after it had been removed from the LP cylinder. The gasket was then taken to the plaintiff’s premises, together with other dismantled compressor parts. Later, Mr. Sain explained, the gasket was thrown out with other “rubbish”, after inspection by the defendant and there was no further use for it (T246, 247). He then qualified that response by saying that the gasket might have been returned to the defendant and, “I don’t know where the gasket is” (T252).
In cross-examination, Mr. Sain acknowledged that the corrosion could have resulted from running the compressor with an influx of digester gas during the commissioning on 25 May 1994 and from the compressor then not having operated for about two months (T447, 448, 450). He had previously referred (T190) to the following provision of the Manual (exhibit P5, page 28) as being applicable to the compressor:
“Nonlubricated units must be operated at least one hour every two or three days to prevent rust film forming on the cylinder walls. If nonlubricated units must stand idle for a prolonged period of time, adequate protection against moisture and rust formation must be provided.”
(Compare, also, the “Extended Storage Preparation” document which the defendant received from GD in April 1993 (CB4).)
Mr. Sain confirmed, in evidence, that which he had written for the plaintiff to the defendant on 28 July 1994 (CB83, 84), namely, that there were four areas of corrosion, two of them were near the water passages and two were away from water passages (T481). At that stage of his evidence, Mr. Sain was not aware that there are four (not two) water passages in the cylinder (T478, 479) and that the two additional passages are ‘blocked’ by the upper and lower gaskets and heads, which have only two water passages, corresponding to two of the water passages in the cylinder. The two additional passages, he later explained, do not assist in cooling the compressor (T501, 502) but were for manufacturing purposes (T500). He did agree, however, that if there were an imperfection in the gasket, then coolant could enter the cylinder from any of those four passages (T509).
While agreeing that a gasket leak could result from failure to tighten the head bolts securing the gasket, from the existence of uneven mating surfaces or from the presence of foreign particles, Mr. Sain said that the plaintiff had not been able to detect any failure of the gasket. He explained that, when the compressor is stopped, there still remains some digester gas in the compressor, with “a higher possibility” that moisture will condense and cause corrosion (T529, 530). In his recollection, both Mr. Hordacre and Mr. Hobson had tightened (“torqued”) the upper head, at Bolivar, when he was present. He had no recollection of the head later having been removed (T533) or rotated (T579, 580).
In re-examination, Mr. Sain said that the corrosion which he had observed was, “even above that line where the gasket sits”, above the two additional water passages and “generally throughout the whole unit”, by which he meant:
“There was the candle like structures within the bore but there was also corrosion further up into the head of the unit, into the dome section of the head of the unit and various corrosion around the ring section” (T585-587).
Mr. Williamson
Mr. Williamson is a mechanical engineer with considerable experience of compressors and gaskets. He is also personally known to Mr. Sain. Without charging a fee, he inspected various parts of a LP head section (including a head gasket) at the plaintiff’s premises on 11 August 1994, and later reported to the plaintiff. When Mr. Williamson inspected those parts, Mr. Conway (then an employee of the defendant) was also present, together with Mr. Sain and Mr. Hobson (T682). Upon all the evidence presented, I am satisfied that the parts inspected by Mr. Williamson (including the head gasket) were parts of, or were installed in, the compressor when the corrosion was detected.
Mr. Williamson reported that, “The cylinder, head and valve assemblies had considerable deposits of material and the cylinder exhibited signs of corrosion deposits” (exhibit P2). (He was not asked to examine those deposits.) Upon his visual inspection, “The gasket was intact and displayed no areas of deterioration or “swelling””. He could not detect any “tracking” across the gasket or mating surfaces. There was no evidence to suggest that the gasket had been leaking. He was unable to detect any irregularities or damage to the mating surfaces. In his reported conclusion (in exhibit P2),
“the gasket was not leaking .... as it would have exhibited signs of deterioration and “tracking” all of which were not evident.
While not part of my brief, in my opinion, I feel that the corrosion and deposits exhibited is [sic] far greater than what I would have expected to see with a leak of treated cooling water. Further investigation should pursue other possible sources of contamination.”
In evidence, Mr. Williamson confirmed the content of his typewritten report. He had been unable to find a pathway across the gasket for the coolant to have passed (T605). He did not observe any ‘staining’ where that could have occurred (T597). With regard to corrosion, he said,
“I think that the machine suffered a very generalised form of corrosion, in that most of the surfaces of the machine did exhibit minor corrosion, but there was more specific corrosion in areas
around the cylinder bore, and around the valve pockets, and, to a lesser extent, the surfaces of the cylinder head. .... There was corrosion above the gasket” (T612).
(He made it clear that he was there speaking of the upper cylinder head (T613).)
Mr. Williamson described the corrosion damage to the bore of the cylinder as:
“a streaking, a discoloration of the bore that seemed to come from above [“from high in the machine”], it seemed to come from at least the junction of the gasket and was streaking downwards towards the piston .... there are quite a few patches of this discoloration on the bore” (T614).
He accepted that the ‘staining’ could have resulted from failure of the gasket (although he did not see any such failure) because,
“there was staining on the bores that would lead me to suggest that we have had some sort of moisture enter the machine from a position at least as high as the junction of the gasket. There may have been moisture leaking from the height of the valves down into the machine; I observed staining from the junction of the gasket down, and I observed general corrosion throughout the machine, and I observed corrosion around the valve pockets in the head of the machine .... there was certainly a significant amount of debris in the machine .... on the bore of the cylinder. There was debris in the head of the compressor, the upper cylinder head. .... It was a generalised debris. My recollection is it was most evident just above the gasket surface, the mating surface. .... where it had accumulated into a crust was most evident in areas above and below the gasket” (T614, 615, 616).
By “corrosion”, he meant, “a rust of the surface of the bore and the head”; and by “debris and deposits”, he meant material of a composition unknown to him (T616).
Mr. Williamson did agree that,
“there were four particular lines or streams of deposits coming down from the head gasket area into the cylinder bore adjacent to the water coolant galleries” (T650).
While there were more deposits in that area, “there were other generalised areas of deposit” (T650). Had the two additional water passages contributed to a leaking of coolant into the bore, he would have expected to see evidence of a “leakage pathway”. He did not observe such evidence (T655).
Mr. Hobson
Mr. Hobson, a qualified motor mechanic for more than 20 years, was responsible, with Mr. Hordacre, for rebuilding the compressor. He fitted a new head gasket to the LP upper cylinder at Bolivar (T663), where tensioning of the gasket occurred (T686). Previously, he said, preliminary tensioning had been effected, but the plaintiff did not have a sufficiently large tension wrench with which to achieve the ‘final’ tensioning, until one was borrowed from the defendant (T685, 690). Mr. Hobson described how he climbed on top of the compressor and held a socket spanner in position on the head bolts , while Mr. Hordacre effected “the fairly hefty tensions” required (T689, 690). (In that recollection, Mr. Hobson was mistaken because, as emerged during Mr. Hordacre’s evidence, the Manual (exhibit P5) specifies a comparatively low tension for those bolts, certainly well within the capacity of the plaintiff’s tension wrench (T1145; cf. T748, 749).)
Mr. Hobson and Mr. Hordacre also removed the upper head in July 1994. In Mr. Hobson’s evidence,
“we removed it and found this crystalline corrosion, whatever, in the bore .... There was absolutely nothing wrong with the head gasket, but there were certainly crystalline deposits like I’d never myself witnessed before on the top face of the piston, the upper part, internal parts of the head and the worst corrosion or particles were around, sitting about where the rings sit on the piston” (T660, 661).
When removed, the gasket was neither wet, nor swollen (T774, 780). He observed a crystalline-type deposit in “the top of the cast iron head and also in the valves or the valve pockets” (T663), together with corrosion damage around the inlet valves, which were “fairly pitted once they were cleaned up and the crystalline was taken off of them” (T664). The deposits, he thought, were “mainly on the inlet side but there were several deposits in several positions on the cylinder itself” (T665).
Mr. Hobson first observed “streak marks on the top of the piston” (T666), “like something had been running when it was obviously in a liquid form and, as I mentioned earlier, this crystalline appearance is something I have never seen quite like before” (T667). He did not observe any pattern to the corrosion,
“just several areas that had this fairly ugly looking crystalline deposit on it and where it had been sitting on the rings itself, which, there must have been some amount of moisture in there at some stage, it had fairly well rusted the internal bore of the cylinder” (T667, 668).
He did not observe any corrosion close to the gasket; there was some around the ring area of the piston, but ‘a fair way below the gasket’ (T672).
Having disassembled parts of the compressor, those parts were taken to the plaintiff’s premises, where they were inspected by other persons, including Mr. Williamson and a representative of the defendant (T682). (Upon this evidence, I am satisfied that the necessary ‘chain’ has been established in relation to identification of the relevant parts about which the witnesses gave description.)
Mr. Hobson explained that, upon commissioning the compressor in May 1994, he had been involved in checking and rechecking all of the bolts and nuts for tightness (T698). (On the Start-up Check List of 25 May 1994 (CB69), the appropriate box for that purpose has been ticked.) He denied that it had been necessary to remove, rotate, replace and re-tension the upper head at Bolivar because of the head having been previously incorrectly mounted in relation to the piping required for the incoming digester gas (T684, 764-769).
Mr. Conway
When Mr. Conway attended at Bolivar after fluid had been detected in the lower head (through the pocket of a valve which had been removed), he observed a substantial amount of “rusty-coloured corrosion” around the cylinder walls and below the piston (T823). He collected samples of solid particulate corrosion. Someone else, he said, had taken samples of liquid (T824). (Presumably all of those samples were collected through the valve pocket. I say “presumably” because, upon the evidence, I am not satisfied that the necessary chain of evidence, in respect of the samples which were later received and analysed at Amdel, has here been established in any sense that is worthwhile or probative.)
Later, when the upper head had been removed, Mr. Conway again inspected the compressor:
“I saw corrosion in the upper part of the cylinder, similarly on the cylinder walls. There was no particular corrosion on the upper head itself, but there was definite corrosion on the cylinder walls. In
particular, that corrosion was located in four distinct positions and those four distinct positions correlated immediately with the four cooling passages in the cylinder” (T826).
He described those four positions of corrosion:
they looked very similar to, say, candle wax where it has dripped down the sides of a candle” (T830).
Although the inside of the upper head did not show any “particular corrosion”, that which it did show was spread uniformly over the surface and there were “no separately identifiable areas of more or less corrosion” (T830). However, he said,
“from the gasket line downwards this dripping that looked very much like candle wax drippings was evident in the four locations immediately adjacent to the water passages” (T830).
He did not then notice anything in particular about the gasket, which was slightly damaged from having been removed. Apart from that, there was “nothing particular about it.” As he recalled, the gasket was dry (T831).
Mr. Conway next inspected the upper cylinder assembly, in company with Mr. Sain and Mr. Williamson, after it had been taken from Bolivar to the plaintiff’s premises and the piston had been removed. He confirmed, in evidence, his previous descriptions of the upper cylinder. He also inspected the lower cylinder head where, he said, most of the corrosion was evident (T832). He observed corrosion on the lower cylinder bore or walls, comparable in quantity and position with that on the upper cylinder bore (T833). He later qualified that answer:
“In the upper cylinder on the bore area above the piston, the corrosion was in the candle drip like arrangement I mentioned previously. In the lower cylinder, it was more evenly distributed .... but not so much defined, in terms of actual drips” (T924).
Some weeks later, when he went to the plaintiff’s premises and retrieved the compressor parts, the gasket was not there. He was told that it had been thrown out.
In cross-examination, Mr. Conway acknowledged that there was corrosion in the valve pockets of the lower head and that the valve which had been removed was, “all gummed up with corrosion as well” (T838). While he could not specifically recall, there may have also been corrosion damage in the valve pockets of the upper head (T838).
“I can’t recall seeing any particular corrosion damage in the upper head. If there was, and I don’t believe there was, it would have been much less substantial than in the corrosion that was evident down the cylinder wall and in the lower head” (T839).
He also acknowledged that there were “different possibilities” as to the cause of corrosion in a compressor of this kind, including an inadequate moisture extractor in the accessory components, failure to close the isolating valves leading to the compressor and failure to maintain a sufficiently high cooling water temperature (T843, 844). Those issues, he agreed, had been raised in correspondence between the parties but were disputed by the defendant (T848). He further acknowledged that there had previously been a problem with corrosion damage to this compressor, caused by storage deterioration, as far back as April 1993 (T844). At the conclusion of his evidence, there was the following exchange:
HIS HONOUR:
“Q.As an engineer, can you explain to me, if the reason for that appearance [of a candle drip like arrangement] in relation to the upper cylinder [walls] was the failure of a gasket in that area, how there could have been or to what may have been attributable similar appearances in relation to the lower cylinder [walls].
A.Yes. The coolant, which we believed had passed the upper gasket, would have dribbled down the sides of the bore in that candle drip type arrangement. From there it would have seeped past the piston rings into the lower cylinder where it would have collected.
Q.Did you observe any solid corrosion in the lower cylinder.
A.Yes, we did” (T924, 925).
Mr. Tait
In addressing the plaintiff’s expressed concerns (in correspondence) about the efficacy of the compressor’s accessory components, Mr. Tait explained that investigation by the defendant occupied about two and a half months, both before and after the compressor was commissioned on 25 May 1994. He did not think that any modifications to those components were made after the commissioning, because the defendant did not consider that the plaintiff’s concerns were valid; the defendant’s concern was with the warranty of the plaintiff’s work on the compressor. After the commissioning, when the compressor was operated for between one and a half and two hours, the compressor was not started again before the alleged gasket failure was detected late in July 1994 (T958, 959).
In cross-examination, Mr. Tait accepted that the digester gas being processed in the compressor was saturated with moisture somewhere in the region of 85 or 90 per cent (T995). He agreed that the defendant could have removed a valve after the commissioning, for the purpose of measuring any moisture dropout which had occurred, but it did not do so because, in that regard, the defendant had not previously encountered problems (T996). After the commissioning, the defendant had ‘shut down’ the compressor, which entailed “shutting off the valves, shutting off the water system and shutting down the electrics” (T997). Thereafter, he said, the defendant did not take any measures to protect the compressor against moisture deposits which might have formed during the commissioning process,
“because the systems in place were already there to take out as much moisture as required, and we have two other compressors that have been running and had none of these problems” (T997).
Mr. Tait was not aware of the concerns about ‘storage deterioration’ referred to in the correspondence between the parties in April 1993 (see CB 2-4, 7-9) (T1001-1003). He confirmed that digester gas does contain a number of contaminants, in addition to water (T1005). Regarding the plaintiff’s previously expressed concern that, ‘the cooling water should be maintained 20oF higher than the inlet gas temperature’, Mr. Tait said,
“we had met probably three quarters of the requirement and that last quarter of the requirement we hadn’t met and we didn’t feel necessary because of our experience with those compressors at that stage” (T1012).
Mr. Tait was present when a large quantity of “water” was removed (through the lower valves) from the compressor about ten days before it was commissioned. He did not recall the colour of that “water”. Had it been purple (a coolant colour), he said that the defendant might have raised it with the plaintiff (T1024). (That “water”, which was referred to in correspondence of 16 May 1994 from the plaintiff (CB64), was never tested, according to Mr. Sleep, who was present at the time and noted that the “fluid” was “clear, unlike the pink colour of coolant water” (T1268), “possible condensation” (T1270).)
Mr. Short
Mr. Short inspected the upper cylinder, upper cylinder head and head gasket after those parts had been removed to the plaintiff’s premises. To him, the gasket did not appear to have been compressed to the extent that he would have expected had it been fully tightened (T1075). While he did not observe any “tracking”, or erosion of the gasket by gas or liquid having been forced past it, he said that that is not necessary and liquid can still leak past, over a broad area, if a gasket is not clamped tightly between the mating surfaces of the cylinder and head (T1080).
Addressing the cylinder bore, Mr. Short said,
“There were several places where there was corrosion in the bore starting from the top of the bore and extended downward consistent with liquid leaking into the bore at several locations” (T1080).
He described that corrosion as being a build-up (not a stain), a rusty orange colour and ‘about three or four’ markings “more or less” aligned with water passages in the top of the cylinder. (The new head gasket here tendered (exhibit D4) has only two apertures for coolant water (as did the depictions of the head gaskets and cylinder in the Manual, exhibit P5, at page 9). During evidence, Mr. Williamson had previously marked, on exhibit D4, the positions of two additional water passages which he believed were present in the gasket that he inspected (T601).)
In cross-examination, Mr. Short said that there appeared to be some dampness in the gasket, along where the two additional water passages had been marked on exhibit D4, “as if water had been oozing past the gasket” and, “discoloration in some of those areas as if water had been leaking past and you get some staining from the additives in the water” (T1090). The corrosion in the cylinder bore was leaking “from the head gasket joint”, not from above the head gasket (T1090). He could not recall having seen corrosion in valve pockets of the upper head,
“but in view of the gases that were being pumped there, I wouldn’t be surprised there to find a certain amount of corrosion” (T1092).
When asked:
“If I was to suggest that rather than the corrosion being simply three perhaps deposits, the corrosion was, in fact, throughout the cylinder, including the upper and lower head, you would agree with that” (T1092),
he replied:
“It could be, yes.”
(In fact he did not look into the lower head (T1092).)
Describing the corrosive deposits which he had observed in several places in the cylinder bore, Mr. Short said,
“it had the general appearance of rust and it more or less came down like a curtain effect from the top of the bore down to the piston .... a build-up in that it was granular rather than a stain .... It wasn’t very thick” (T1092, 1093).
Upon the assumption that the corrosion was above the head gasket, he agreed that could tend to suggest something other than ‘a leaking down effect from the gasket face itself’ (T1093). He agreed, also, that the gasket was of good quality and not swollen (T1093). Towards the end of Mr. Short’s evidence, I asked him:
“If corrosion were to have been observed in the lower cylinder head and bore, would that feature militate against the cause of a similar corrosive appearance in the upper head and bore being the failure of the upper head gasket” (T1095),
to which he replied:
“There could be independent causes of corrosion in this unit because the compressors were handling sewage gas, which of itself can be somewhat corrosive. So that one would have to do an analysis of the corrosion to determine whether it was caused by the action of sewage gas or by leakage of the coolant water into the cylinder .... I understand that such an analysis .... was done” (T1095).
Mr. Hordacre
According to Mr. Hordacre, the cylinder heads and gaskets were installed and finally tightened during the assembly of the compressor at the plaintiff’s premises (T1114, 1143). (In this respect, his evidence differs from that of Mr. Sain and Mr. Hobson.) At Bolivar, the compressor was dismantled into three pieces and reassembled in the compressor room (T1116). During that reassembly, the upper head of the LP cylinder had to be removed because the inlet and outlet flanges were facing in the wrong direction in relation to the ancillary connecting pipes which had to be attached. Mr. Hordacre said that he told Mr. Sain of the need to rotate the head and “probably need to put a new head gasket” on the compressor; that Mr. Sain replied that there was no other gasket to put on, and the work should be done after the defendant’s employees had gone home; and that he (Mr. Hordacre) and Mr. Hobson did as they were directed and did not use a new gasket (T1118). Reusing a head gasket, he later said, is usually bad practice (T1144).
When fluid was detected in the lower cylinder, Mr. Hordacre and Mr. Hobson removed valves and a considerable amount of fluid emerged. Upon removing the upper head and gasket, Mr. Hordacre observed, “quite a bit of fluid on top of the piston”. The gasket felt rather heavy and seemed to be very wet, damp and swollen with fluid of some type (T1129). Some days later, the gasket had dried out and ‘shrunk back to a regular type gasket’ (T1131). In the upper cylinder head, he noticed,
“some small crystallisation marks and .... some etching type marks which were also evident in the cylinder directly under these particular areas on that head” (T1132).
On the upper surface of the cylinder, “above the piston and to the top of the cylinder where the gasket goes”, he again noticed a crystalline deposit. In the cylinder bore, he observed,
“a crystalline deposit mainly because the fluid had dried out over these days .... and in a few other areas on the top of the bore we noticed a black etching type mark and some of those etchings were also under the crystal that had been scraped off [by the defendant’s employees]” (T1132, 1133).
With Mr. Hobson, Mr. Hordacre took the dismantled LP unit to the plaintiff’s premises and was there present when Mr. Williamson inspected it.
In cross-examination, Mr. Hordacre said that he did not remember seeing corrosion (as distinct from fluid damage) in the lower head, but he did observe some corrosion in the upper head (T1176). He continued,
“The damage I observed in the lower head was also evident in the upper head and the cylinder and it wasn’t corrosion, it was what I would call etching .... or leaching” (T1176)
which, he agreed, is caused by contact between metal and rather severe moisture. In both heads, he saw damage in the form of black porous marks:
“The pockets of foreign matter that I observed in the upper and lower head in the valve pockets were of a slight crystalline powdery type nature” (T1177).
He observed those foreign deposits at points above the line of the gasket; that is, he said, “across parts of where the gasket face is and they were also in the cylinder”, but where, exactly, he could not recall (T1177).
Mr. Hordacre was present when the “water” referred to in the plaintiff’s letter of 16 May 1994 had been detected and removed from the compressor (CB64). Noticing loose bolts on the valve covers, he removed a set of valves from the upper head and found a lot of moisture - “it was actually fluid sitting in the chamber just under the valve” and “there was fluid on top of the piston” (T1180). The valves were “fairly carboned up and looked like they had been running for quite some time”:
“so we deduced from that, that obviously in an emergency situation to keep the other two compressors running .... they must have taken valves out of the head of no. 1 compressor to put in the other compressors and put the other valves back into no. 1” (T1180).
Then, he said,
when we went on to pull the lower valves out there was a considerable amount of fluid that came out from underneath the heads” (T1180).
His opinion, at the time, was that the fluid had probably come from the manifold which fed the digester gas into the compressor,
“because it was fairly wet gas and it was all collecting down this end of the manifold - when the [gate] valves were opened then it came straight through the valve off the manifold” (T1181).
That fluid had neither the colour nor smell of coolant (T1182).
Mr. Kean
After fluid was detected in the compressor, Mr. Kean inspected the upper head and observed corrosion marks tracking down the side of the cylinder bore and where the rings had sat for some time (T1209). He could not recall observing any problem with either head (T1209). He did not notice any staining or tracking on the upper head mating surfaces, which did not have to be re-machined when repairing the corrosion damage (T1231). He could not recall having observed corrosion in either head (T1231). (That is, perhaps, not surprising, in view of the fact (as recorded in the correspondence: CB120-122) that, on 18 August 1994, Mr. Hordacre had spent eight hours in cleaning the heads and valves.) He described the corrosion in the cylinder bore as being,
“in specific runs down the side of the bore and then where the liquid had accumulated on the top of the rings it had sat there .... and caused corrosion” (T1231).
Mr. Kean said that Finsbury Service had previously encountered problems with corrosion from digester gas in a number of these compressors. He was aware that digester gas had caused corrosion damage, in different areas, to all three compressors; that had been a problem (T1238, 1239):
“[T]he corrosion on the valves was a problem because the machines were static for some time with gas in the system. .... If the machines are left idle and you get the digester gas still present in the system, you tended to get a pitting effect .... primarily on the valves” (T1240, 1241).
When re-commissioning the compressor in September 1994, he ran it for about 100 to 150 hours, for between 10 and 15 days. He did not consider that it was possible to commission such a compressor by running it for between one and a half and two hours. (In fairness to the plaintiff, the correspondence does record that the plaintiff was disinclined to run the compressor until concerns about the accessory component had been rectified.) He explained that, if a compressor were to be ‘shut down’, the only method by which digester gas can be eliminated is to “purge the system out with nitrogen” (T1243):
“[I]f the machine has been run, unless it has been purged you will still have gas in the system .... [even if] you turn off the isolator valve” (T1244).
Mr. Kean ventured the opinion that, if the upper head gasket of the compressor were to have leaked after the compressor had not been started for some time, then he “would expect to find some amount of moisture within the cylinder which would be a distinctive run [or runs] or settlement of moisture above the ring” (T1246, 1247). By ‘distinct runs’, he meant a, “very localised area of run where liquid had actually come down the bore” (T1254). (He explained that the possibility of a gasket leaking could be increased if the considerable pressure under which the coolant is contained were to be maintained when the compressor is not operating (T1250).) He also expressed the view that, if corrosive deposits observed in and around the upper head of the compressor had resulted from the failure of the upper head gasket, then he would expect to observe some similar corrosive deposits in and around the lower head and bore of the compressor from coolant that ran down (T1250, 1251). By contrast, he explained, with the condensate of digester gas,
“from our experience, when you get a condensate drop-out from digester gas or a corrosive gas of any sort, CO2, carbonic acid, tends to be in droplet form and it tends to sit on the bore or in patchy areas depending on where the heating and cooling was. In this instance, a machine running for one, one and a half hours hadn’t even got hot. So I would expect it to be all over the place. .... Digester gas condensate tends to condense all over the cylinder. It’s not a single line. I mean, it just doesn’t gather in one place. If it’s on the top of the cylinder it will tend to be all over the cylinder and you will have a pitting all over the place. This is from my experience” (T1251).
Were a corrosive appearance to be, ‘like a candle having dripped down the bore .... in a line’, from his experience Mr. Kean believed such an appearance to be more consistent with coolant discharge than the effect of digester gas (T1252, 1253). However, he said, a corrosive appearance in valve pockets of the upper head is not consistent with coolant having escaped from a head gasket (T1253):
“[I]n .... any type of machine pumping this type of gas you will always get some gas or condensate drop out. If the machine had been running on loaded for any period of time the valves themselves would have attracted some condensate on cooling down .... in which it’s possible that you would get some condensation corrosion around those valves” (T1253).
Whether corrosive appearances may be consistent with both influences - digester gas and escaping coolant - would depend, he said, on the area in which the corrosion had occurred (T1253).
Mr. Kean did not agree that he would expect to observe evidence of ‘tracking’ across a gasket or mating surfaces, in the event of a head gasket failure, if the compressor had not been hot and not much air had been able to enter (T1254). He had not encountered any problem with digester gas condensate in the other two compressors at Bolivar because of the presence of the ‘lip’ around the circumference of the cylinder bore and the corresponding recess around the upper head (as depicted in the sketch, exhibit P10)(T1260).
Mr. Sleep
As Contracts Inspector with EWS, Mr. Sleep was closely involved with the three compressors installed at Bolivar by the defendant. He maintained comprehensive diary notes of his involvement. On 2 May 1994, after rebuilding the compressor, the plaintiff first started it, preparatory to it being commissioned. That day, because there was no oil pressure, the compressor only ran for between 10 and 15 seconds. On 7 May 1994, the compressor again only ran for a few seconds, because a knocking sound was heard in the LP cylinder area (the loose retaining plate was then discovered). The valves in the lower head of the LP cylinder were examined and a considerable amount of clear fluid was there detected, in respect of which Mr. Sleep noted, “unlike pink colour of coolant” and, “possible condensation?” (T1270). (That fluid was not tested.) On 25 May 1994 (when the compressor was commissioned), after running it for about one and a half hours, the compressor was ‘shut down’ pending resolution of the plaintiff’s concerns, including moisture. The compressor was not again started before the fluid was detected in July.
On 25 July 1994, preparatory to starting the compressor, Mr. Sleep and Mr. Tony Van Lydonk (an employee of the defendant) checked for moisture in a discharge valve of the lower head. That check revealed between 1/8 and 1/4 cup of “water”, which was collected by Mr. Van Lydonk and sent to Amdel for analysis (T1274, 1275). In respect of that fluid, Mr. Sleep noted, “either condensate or cooling water” (exhibit P13). He did not recall that it was ‘cooling water pink’ in colour (T1319). Removal of a discharge valve in the upper head then revealed (he noted):
“Cylinder walls above piston showed evidence of water dripping down cylinder, some scale noticed, cylinder surface seemed dry - no oil coating - heads to be removed for further inspection - moisture appeared to be coming from head gasket - possible leakage through gasket. (It has been stated by Tony (Detco) that the sealant was put on the head gasket and then the head not torqued down until the next day by Tool-Rite” (exhibit P13).
In evidence, Mr. Sleep said that the “drip marks” were below the upper head gasket (T1276). He could not recall whether he actually saw ‘water’, as such, or merely evidence of ‘water’. By “evidence of water dripping” he meant that the rust stain indicated that there might have been water. By “condensate”, “water” or “moisture”, he meant “fluid” (T1329, 1330).
On 26 July 1994, Mr. Sleep noted that Mr. Sain, Mr. Hordacre, Mr. Conway and another employee of the defendant had attended at Bolivar, visually to inspect the “suspected water leak” and the “apparent leak”. On 27 July 1994, he noted (in respect of the plaintiff’s attendance that day):
“upper head and gasket was removed - water leakage through gasket was not obvious, if leakage occurred at all - It was evident that no sealant had been used on head gasket” (exhibit P13; T1441).
That day he again saw, “these apparent drip marks coming down from the gasket” and, he thought, “a scaly corrosion around the cylinder” (T1277). By ‘drip marks coming down from the gasket’, as he recalled:
“there were like corrosion marks in the shape of drips where you would expect perhaps water or something to be dripping down the cylinder and it had left a corrosion stain there on the actual cylinder” (T1278).
He could not recall that those ‘drip marks’ were in any particular pattern on the bore.
When inspecting the upper cylinder head on 27 July 1994, Mr. Sleep thought that,
“there was like a crystalline type of deposit .... Again a staining sort of a corrosion .... from this crystalline deposit” (T1278).
Those deposits did not have a pattern similar to random drip marks in the bore (T1439, 1440, 1443). He did not see anything white in colour on the bore, only a rust-coloured stain (T1440). He could not recall specifically looking at the lower head. He did look at the upper head gasket, but could not recall seeing (and did not note) any defect or abnormality such as tracking marks or pathway through which coolant could have escaped (T1279, 1442). On 11 August 1994, he inspected parts of the compressor at the plaintiff’s premises, to where those parts had been removed. In the lower head, he observed crystalline deposits in gas suction ports (or pockets) around valves, and in the bottom of the suction gas gallery (T1280). Those deposits were the same as he had observed in the upper head - a yellowish crystalline deposit all over the inside of the gallery area (T1455).
In cross-examination, Mr. Sleep acknowledged the existence of a ‘lip’ protruding around the circumference of the top of the LP cylinder adjacent to the bore, and a corresponding groove in the surface of the upper head. While he did not see any corrosion in the gap there created (see exhibit P10),
“if there was a leak it would have been coming from that gap and it would have to be coming via a leak in the actual head gasket to get there in the first place” (T1327).
In his view,
“I believe the corrosion staining, whatever, in the form of drip marks .... was coming down from that gap [behind which the head gasket was positioned]” (T1439) [ that is, “from the top of the lip” (T1445)].
Those drip marks might have been aligned to the valve openings; he could not recall. The valve openings (or pockets) were also reasonably close to the lip (T1444, 1445).
In explaining his terminology, Mr. Sleep said that he used “stain”, “corrosion” and “corrosive stain” interchangeably; that “corrosive stain” was associated with pitting; that “drip marks” related to the staining; and that “crystalline deposits” referred not to corrosion, but to deposits in the head - as if liquid had evaporated and left a crystalline deposit (T1447-1448). He could not recall seeing such deposits in the upper bore, where he saw apparent drip marks (T1448). He did not have any note (nor recollection) of the upper head having been rotated at Bolivar. He could not understand why that should have been done. There had been a problem and a need to realign discharge pipes (by re-cutting and re-welding), he recalled, but that had not related to the LP cylinder or head (T1471). Had the head been rotated outside normal working hours, he said that the compressor operators would (if aware) have informed him (T1475).
Mr. Egan
On 29 July 1994, Mr. Egan, who was them employed as a metallurgist at Amdel, received from Mr. Conway four samples for analysis - two solid (semi-crystalline) samples and two fluid samples (one purporting to be a sample of cooling water from the compressor, and the other purporting to be a sample of “water” from the cylinder of the compressor). Later he received for identification three further solid samples.
In his opening address, Mr. Robertson, counsel for the defendant, indicated that the defendant was relying upon,
“certain expert evidence about the chemical constituents of the liquid extracted from the cylinder, namely that that liquid was alkaline in its content which is, the defendant will submit, consistent with the coolant which was used in the machine and is also consistent with the defendant’s theory of gasket failure and inconsistent with the plaintiff’s primary theory of condensation of digester gases” (T810-811).
In his written submissions, Mr. Robertson conceded (at page 12) that, “there is no strict chain of evidence in relation to the samples provided to Amdel.” Some of the deficiencies in proof of that chain are frankly referred to by Mr. Robertson in paragraph 10 of those submissions. Most importantly, perhaps, in relation to the fluid extracted from the compressor, while Mr. Conway said that he understood Mr. Sleep had taken those samples (T824), Mr. Sleep said that Mr. Van Lydonk had collected and taken them away (T1274, 1275). Mr. Van Lydonk was not called to give evidence. Mr. Geyer, counsel for the plaintiff, had indicated that proof of the samples was here an issue.
Having considered all of the evidence (or the lack of it) relating to the identification, collection, safekeeping and reception by Mr. Egan of the samples, I am not satisfied that the necessary chain of proof has here been established. The evidence of Mr. Egan relating to analyses of those samples and his opinions expressed in relation thereto are, therefore, here excluded and neither party can rely upon that evidence. However, his expert testimony of a general nature remains to be considered.
Mr. Egan gave evidence that digester gases are usually very acidic and can cause rapid corrosion of steel and iron The condensate of such gases is also generally acidic (T1356). Accepting that the coolant in the compressor included the rust inhibiting (or anti-corrosive) product described as Alfloc 2001, he said that the coolant would be very alkaline (normal water being regarded as neutral in acidity or alkalinity) (T1357, 1358). Depending on the particular concentration, one would expect a mixture of digester gas condensate and coolant to neutralize each other. Although the anti-corrosive component of a coolant does assist in preventing corrosion, it is only effective in a cooling system from which air has been excluded. Were coolant to escape into the bore of a cylinder, then the coolant would be exposed both to air and other reactive gases and could possibly attack the bore and cause etching, because the coolant would no longer have the inhibiting properties which prevent water from causing corrosion (T1477, 1480).
Mr. Egan agreed that, if corrosion damage to the compressor were to have appeared as dark (brown or black) stains or drip marks, such an appearance would be inconsistent with the colour that one would expect to be indicative of the corrosion inhibitors present in cooling water, with this qualification (T1479, 1480). If pure water containing Alfloc 2001 were to be evaporated, he said that one would expect to obtain a white crystalline product of sodium hydroxide, sodium nitrite, sodium nitrate and, possibly, a form of silicane. But, if that coolant were to be contaminated with rust, or other corrosive products, the colour would change (T1482). In my understanding of the concluding pages of his evidence, corrosion from aerated cooling water will produce common rust (T1485); coolant could effect the staining of a cylinder bore which appeared ‘like candle dripping down in discrete lines’ (T1485, 1486); corrosive damage to a cylinder bore caused by digester gas would be more uniform in appearance than ‘like candle dripping down in discrete lines’ (T1486, 1487); and if digester gas condensate were to drip into a cylinder bore through valve openings in the upper head, then a streaking or concentration of condensate below the valve openings could result (T1487).
THE BLACK NUT
Upon the evidence, there is no doubt that the high pressure (HP) conrod of the compressor failed on 19 December 1994, because of the installation of an incorrect, black, unhardened, sub-standard nut (“the black nut” or “the nut”) to one of the two conrod bolts securing that conrod to the crankshaft of the compressor. The issue which here arises is whether the defendant has established that the plaintiff was responsible for the installation of the black nut. Determination of this issue also requires comprehensive consideration of the relevant evidence, to which I now turn (again adding my emphasis where appropriate).
Mr. Sain
As explained in evidence, the compressor comprised both a LP and HP cylinder, each cylinder having a separate piston and attached conrod. Both conrods were attached to the same crankshaft in the one crankcase, each conrod being attached to the crankshaft by a conrod-cap and two hardened bolts and nuts.
According to Mr. Sain, when rebuilding the compressor, the plaintiff replaced one conrod assembly (that is, a conrod, conrod-cap, two bolts and two nuts) with a new conrod assembly (delivered by Mr. Tait of the defendant) and fitted new conrod bolts and nuts to the other conrod and conrod-cap (which were also delivered by Mr. Tait (T324)). (That the plaintiff did obtain two conrod bolts from the defendant, on 17 September 1993, is recorded in CB31.) Both cylinders, pistons and conrod assemblies were identical in appearance. He could not recall into which cylinder the new conrod assembly was installed (T324). As the former agent of GD, the defendant still had a supply of spare parts, some of which the plaintiff used in rebuilding the compressor.
Mr. Sain explained that the correct conrod nuts for use in the compressor were a “special” nut:
“They are a specially manufactured conrod nut, quite specific dimensions and also quite specific description and they are made of a very high quality steel, which are hardened to a given strength” (T304).
(The bolts, he said, were also “special” bolts (T308).) Those nuts were black in colour (T304), and visually distinctive, with a raised surface on one side (giving greater thread area) (T310) and six small, raised dimples or nipples on the other side, one in each of the six corners of the nut (“purely a matter of showing that it is a special nut”) (T320, 321). Mr. Sain sketched both a standard nut and a special nut on exhibit P6. (A “special” nut was not here produced.)
Mr. Sain said that he was present with Mr. Hordacre, Mr. Hobson and a Mr. Gillespie from GD when either Mr. Hordacre or Mr. Hobson installed four “special” nuts in the compressor (T328). He also recalled that, when installing the two conrods and conrod-caps, those components were ‘spot’ marked to ensure, in accordance with the plaintiff’s normal practice, that they were being fitted correctly (T325, 327).
When Mr. Sain attended at Bolivar in December 1994, at Mr. Conway’s request, and inspected the compressor, he observed that,
“there was a massive failure at the bottom conrod being the high pressure conrod of the horizontal piston .... I observed a silver and a black nut on what was the remains of the damaged portion of the conrod. .... The black nut was the source of the failure. .... The nut had obviously stripped its thread .... The silver nut looked to be intact” (T334-337).
He inspected the black nut and observed that it was a standard nut, without nipples or a raised surface, “just a conventional plain commercial grade nut” (T339). Mr. Sain remarked to employees of the defendant who were there,
“somebody has put a non-standard nut in this compressor. The nuts we put in were two black nuts. Somebody has been in here. That is not the nut we installed” (T339).
Upon close inspection of the conrod, he could not see the ‘spot’ marking which had been placed upon the conrod that had previously been installed by the plaintiff (T340). He concluded that someone had changed the conrods and nuts (T341), a task which would take at least three or four hours (T342).
Mr. Sain explained that, during commissioning of the compressor on 25 May 1994, the cover was taken off the crankcase and oil was squirted around all of the moving parts. Had there then been a non-standard nut fitted (by which he meant a nut that was not a special nut), then it would have been observed by the plaintiff’s employees, especially because of the colour difference between black and silver nuts (T344). On 10 January 1995, the plaintiff wrote to the defendant and asked for one of the conrod nuts from Compressor No. 2 or No. 3, so that it could be sent to GD for any comments (CB155). The defendant that day replied, indicating that those two compressors,
“also have the same type nuts as #1 ie apparently non-genuine. We will provide the existing nuts when they are changed out” (CB152).
On 23 January 1995, the defendant wrote informing the plaintiff (inter alia) that those two compressors were also fitted with “plain, plated [that is, silver] nuts identical to those [that is, three of them] in Compressor #1” (CB159, 160). The plaintiff had never worked on Compressors No. 2 and No. 3 (T357). The defendant did not provide the plaintiff with the existing nuts as had been requested (T908).
The defendant’s letter of 23 January 1995 (above) did not come as a surprise to Mr. Sain because, he said,
“it was common practice, on that site, that parts would be taken out of one machine and put into another, and parts juggled from compressors 2 and 3 in order to keep them running. So it would not surprise me, once we had left site, parts were taken out of compressor 1, 2 and 3 and juggled around because that was very, very common practice, even when we were on site. .... Also at a point of rebuilding compressor No. 1, if we did not have a part, it would be taken from No. 1 and 2 and given to us, that was quite the norm” (T355).
Previously, on 11 May 1994, the plaintiff had written to the defendant expressing concern about ‘tampering’ with parts which had been fitted to the compressor by the plaintiff, namely, the substitution of a non-standard bolt, the loosening of the HP x LP packing and the substitution of valves on the HP head (CB60). (Mr. Sain had found the bolt loosely hanging on one of the support plates for the scraper rings adjacent to the cross-slide going up to the LP cylinder (T221, 222). The valves, which were old and used, had not been fitted by the plaintiff (T226).)
In cross-examination, Mr. Sain explained that, when the conrod assemblies were installed at the plaintiff’s premises, the conrod nuts required a degree of tightening with a tension wrench which was borrowed from the defendant, because the plaintiff did not have the appropriate wrench (T551, 552). That tensioning was later rechecked, he thought, at Bolivar (T552). He could not remember checking the tension, personally, at the plaintiff’s premises, but “would assume that’s what would have been done” (T555). He then said,
“They were checked at Tool-Rite and double-checked and probably triple-checked, then when they were taken to site [Bolivar] they were more than likely checked but I cannot recollect them physically being checked, because I can’t remember” (T555).
Somewhat inconsistently, Mr. Sain then said that he did personally check the tensioning of the nuts on the conrod assembly “in the [plaintiff’s] workshop” (T556). On the day of commissioning, he said, the face plate was not removed to check tensioning of the nuts, because he had already personally checked that in the workshop (T556). He confirmed that he did not personally tension the conrod nuts, but was present when they were tensioned (T556).
In cross-examination, Mr. Sain denied that, when commissioning the compressor, Mr. Hordacre had told him that he should take off the cover plate and check the conrod nuts and that he (Mr. Sain) had refused (T572). He confirmed that the nuts were checked on site (T573). He denied that Mr Hobson had later told him (in the presence of Mr. Hordacre) that ‘We forgot’, in relation to the nuts which had been fitted (T574). He denied having later told Mr. Hobson and Mr. Hordacre that they were to maintain the story that he (Mr. Sain) had fitted four black, dimple nuts (T574). He denied having used nuts on a temporary basis, with the intention of later replacing them with proper GD nuts (T576). He also denied that the black nut (exhibit D6), the silver nut (exhibit D7) and the broken bolt with silver nut (exhibit D8) (all of which were observed to be installed in the compressor when it failed in December 1994) had been installed by the plaintiff.
Mr. Hobson
Mr. Hobson, who assisted Mr. Hordacre in rebuilding the compressor, remembered installing nuts in the conrod area:
“The nut we installed came with the conrod, brand new with the connecting rod bolts .... they were both matching pairs of bolts and nuts” (T702).
He described those bolts and nuts as being “special” because they are fitted to a very critical part of the compressor (T702):
“The nuts had a machined face, either ground or machined face on one edge and on the other edge is made .... dimples on it so that you cannot put it on backwards” (T702, 703).
(In giving his evidence, it later became apparent that, at first, Mr. Hobson was telling of having installed only two nuts (T702), which were a “very dark grey” in colour and had been handed to him by Mr. Sain in “a fairly well packaged box, grease-wrapped, brand new conrod” with fittings (T703). The sketch that he drew (exhibit P8) of the conrod nut was very similar to that previously drawn (in exhibit P6) by Mr. Sain.) The nuts that he had installed were not those nuts (exhibits D6, D7 and D8) which were later found to be in the compressor (T711-713, 796).
Mr. Hobson recalled that, on the day before commissioning the compressor, the cover plates were removed, the conrod nuts were checked and lubrication was applied, “because this is the first time that the compressor was actually to be started or turned” (T716). He never noticed any change in those nuts (T716). (That he had previously been giving evidence about the conrod assembly on the HP cylinder then became apparent (at T716).) He explained that, in accordance with recognized common practice, he had ‘punch’ marked the conrod and conrod-cap fitted to each of the HP and LP cylinders so that, if later dismantled, those parts could be reassembled in their correct positions (T733).
In cross-examination, Mr. Hobson recalled having assisted in the installation of the conrod assemblies of both the HP and LP cylinders (T741). He also recalled having personally fitted and tensioned the conrod nuts to both conrods on the same occasion (T742, 743). He denied having installed those conrod assemblies with silver and black nuts, saying:
“I am qualified and I wouldn’t put odd conrod nuts on a secondhand lawnmower, let alone something of this nature and as I’d only just become employed as a contractor for Mr. Sain, I was obviously out to impress and the last thing I’d be doing is something wrong” (T752, 753).
During the commissioning process, he was involved mainly in checking bolts, including head and conrod bolts, and in lubricating the compressor (T771). He denied having remarked ‘We forgot’ to Mr. Hordacre when told of the conrod failure (T790). He denied that Mr. Sain had directed Mr. Hordacre and him to say that they had installed four black, dimple nuts to the conrod assembly areas of the compressor (T790). He also denied having suggested to Mr. Hordacre that two ‘left-over’ nuts be temporarily used to secure the conrod-cap (T791).
Mr. Conway
Mr. Conway explained that, after corrosion had been detected in the compressor in July 1994, the HP cylinder remained at Bolivar (T834). He arranged for Finsbury Service Pty. Ltd. to collect and repair the LP cylinder. For about three months, Finsbury Service worked on the compressor, which was later recommissioned and began operating around October 1994 (T834, 865). When the compressor failed in December 1994, because of the improper black nut, he arranged for Mr. Egan to examine the conrod bolts and nuts, which were later returned (T835, 836).
In cross-examination, Mr. Conway agreed that parts had frequently been taken from one compressor and used on another when there was a shortage of parts (T872). He agreed that the defendant’s employees had worked on accessory components of the compressor after hours, because of urgency and to meet EWS deadlines. He also agreed that the plaintiff had expressed concerns regarding ‘tampering’ and unauthorized work on the compressor in the plaintiff’s absence (T875). The defendant’s employees had assisted Finsbury Service in re-commissioning the compressor in September 1994 (T885).
Mr. Conway said that the defendant had ascertained that the conrod nuts in Compressors No. 2 and No. 3 were identical to three of the four conrod nuts found in Compressor No. 1 (that is, plain, silver-plated nuts) and identical to those in a new conrod assembly taken from the defendant’s stock (which was not here produced)(T907-910). He agreed that he could not rule out the possibility that someone had taken out the correct nuts (as fitted by the plaintiff) and replaced them with incorrect nuts (T908).
Mr. Tait
Mr. Tait recalled having delivered some compressor parts to the plaintiff late in December 1993, including a conrod in a box - a complete conrod assembly with bolts and nuts from the defendant’s stock - for the purpose of replacing the HP conrod in the compressor (T933). While he could not remember the colour of the nuts, he was ‘most definite’ that the box contained a GD component. (He thought that there was “some paperwork and possible stamping on the box” from GD (T968).) He has never seen black and dimpled GD nuts.
Mr. Tait said that the defendant had provided a large tensioning wrench for the plaintiff to tighten certain nuts (T1040). Regarding the complete conrod assembly for the HP cylinder, he remembered that Mr. Sain,
“wanted to play it safe and replace that particular conrod so, therefore, we supplied it for that very purpose” (T1042).
He could recall actually looking into the box, but could not recall what the nuts looked like; nor could he remember having seen nuts with dimples on one side (T1042).
Mr. Tait accepted that a few valve plates might have been ‘switched’ from Compressor No. 3, “but apart from that, I don’t believe there was too much else” (T1045). He also accepted that valves could possibly have been exchanged without his knowledge, saying that “anything is possible” (T1059). He could not recall having replied to the plaintiff’s letter of 11 May 1994 (CB60) regarding alleged ‘tampering’ (T1059), but could recall Mr. Sain having shown him some valves which appeared to have been used (T1059). (Mr. Tait had previously replied to an earlier allegation of tampering - see CB39A to 39D (T1069-1070).)
Mr. Hordacre
When Mr. Hordacre picked up the completely disassembled compressor from Finsbury Service Pty. Ltd., in 1993, some parts were missing, including a conrod, some conrod bolts and nuts and a few valves (T1103, 1104). For the plaintiff, he later received,
“a conrod assembly from DETCO to replace the one that was missing and that particular assembly was missing the conrod nuts” (T1104).
He could remember that Mr. Tait supplied him with a new conrod, but did not think that it was in a box, because it did not have any nuts (T1164). (In those two respects - box and nuts - Mr. Hordacre’s evidence is in conflict with that of Mr. Tait.) He then described it as a “conrod assembly” - rod, bolts, cap and shells, but without nuts (T1105).
Mr. Hordacre said that he also received from Mr. Tait two nuts, which were from a Detroit diesel engine head and which he (Mr. Hordacre) thought were suitable for use,
“although Eddie Sain decided that we should be using GD nuts and wouldn’t allow us to put them on” (T1105).
Those two nuts, he said, were black with a machined face (T1105). He also said that Mr. Sain told him that he (Mr. Hordacre) would have to find nuts suitable to use, because he was not ordering any more (T1106).
In Mr. Hordacre’s evidence,
“I didn’t fit the conrod nuts. Andrew Hobson fitted the conrod nuts. It was at that stage that we realised that we only had two genuine conrod nuts .... The rods were sitting in the crankcase with the caps on the bolts and he had one cap with the two genuine nuts sitting on it and he didn’t have nuts on the other one. .... Andrew decided that we would put one of those nuts on each cap, and he pulled a couple of nuts out of the box of spare parts that were there .... and he put one of the other nuts on each conrod and then we proceeded to torque the bottom end up near enough .... to work out what clearance we had between the bearing and the crankshaft” (T1107, 1108).
He described the “two genuine nuts” as being silver, with a couple of dimples and a machined face (T1108). Those nuts, he continued,
“were the nuts that were supplied with that conrod which was the second-hand conrod, and to me, they didn’t really seem to be a proper conrod nut because I have seen other conrod nuts and usually they are black with three dimples in the side of them like a dimple in every second flat” (T1108, 1109).
The two “other nuts” that were used, he said, “were black ones out of the box without machined faces and without dimples in them” (T1109). The two “silver” nuts, he said,
“were the nuts that were installed on the conrod that was complete .... the one that came in the parts from Finsbury Pumps to which they assured me that they were the genuine GD nuts” (T1110).
In effect, he then explained that there were fitted to the compressor by Mr. Hordacre and him,
“One ordinary [black] nut on each conrod, and one of the silver ones on each conrod as well” (T1112).
When the compressor was reassembled at Bolivar (after having been dismantled to pass through the compressor-room door), Mr. Hordacre said that the thought of replacing the (incorrect) conrod nuts, “never even crossed either of our minds” (T1122). That thought would also not appear to have crossed his mind when, on the day of commissioning at Bolivar, a tension wrench capable of achieving the required tension finally to tighten the (incorrect) nuts was obtained from the defendant (T1112, 1149). On that day, when Mr. Sain and he were checking the tensions on the bolts of the compressor, Mr. Hordacre said that he told Mr. Sain,
“It’s only going to take a half an hour to take the bolts off this cover plate and use Detroit’s wrench to check the four conrod nuts (T1125),
but Mr. Sain’s effectual reply was,
“No, that’s good enough. I’ll just mark it off as being done. They should be okay” (T1125).
Mr. Hordacre said that when he looked into the crankcase, in December, he saw one black and one silver nut on each conrod (T1137) (those being the colours of the nuts that, he said, Mr. Hobson had fitted to the HP cylinder when the compressor was rebuilt). (In that respect, Mr. Hordacre is in conflict with Mr. Conway, who said that three of the four conrod nuts found in the compressor were silver and only one was black (T907-910).) Mr. Hordacre said that, on return to the plaintiff’s premises, he told Mr. Hobson that the problem was that, “those nuts on the conrod were never ever changed” and Mr. Hobson replied, “We forgot” (T1137). Mr. Hordacre also said that Mr. Sain said to Mr. Hobson and him, “We have to get the story right. The story is that all the nuts were black nuts and were dimpled” (T1138).
Mr. Hordacre did confirm there had been tampering with the compressor (T1188), in that loose bolts had been found on valve covers and new valves had been changed for old (T1180). He disputed that Mr. Hobson had checked the conrod nuts at Bolivar (T1189).
Mr. Kean
In reconditioning the LP cylinder of the compressor in September 1994, Mr. Kean said that Finsbury Service did not work on the HP cylinder:
“Virtually we would have looked inside to check there was nothing in there but that was all” (T1212).
Certainly, he said, they did not tension the nuts on the conrod assemblies. After the conrod failure, in December 1994, he was again involved in repairing the compressor (T1213).
Mr. Kean said that Finsbury Service had not interchanged any parts between the compressors. There were problems with Compressors No. 2 and No. 3 about May and June 1994, including a crankshaft failure of No. 3 (T1218) and the need to replace valves on those compressors (T1224). He was aware that the defendant was switching parts between those compressors when there was a shortage of parts (T1226).
Mr. Sleep
Mr. Sleep inspected the compressor after the conrod failure. Although there were occasions when crankcases were replaced and conrods taken out, he could not recall anyone having changed the conrod assembly on Compressor No. 1 (T1287, 1288). He did recall the loose retaining-plate bolt incident, when differrent bolts were observed (one of them lying in the bottom of a chamber in the compressor (T1303, 1304)) and the plaintiff had remarked on the incident (T1305, 1306).
Mr. Sleep recalled that, on 12 September 1994, an employee of the defendant had performed major reassembly work on Compressors No. 1 and No. 3 (T1456). (He could not recall what that person was doing.) He recalled that, when there had been a crankshaft failure in Compressor No. 3 (in about May/June 1994, according to Mr. Kean (T1218)), conrods would have been removed to effect the repair (T1459). He also recalled that, on 22 September 1994, Finsbury Service was working on the HP cylinder of the compressor, the inspection plate had been removed and a general inspection of the whole compressor was conducted (T1461, 1462). Mr. Sleep was unable to locate the running logs relating to the compressor (T1466).
Mr. Egan
On 20 December 1994, Mr. Egan attended at Bolivar, together with Mr. Conway and Mr. Sain, and inspected the compressor, which had failed. He observed fractured components and found a black conrod nut, with a stripped thread, in the compressor’s sump (T1368). On the fractured conrod assembly, there was a silver conrod nut. He took the two conrod bolts and nuts to Amdel for hardness testing. Testing established that the silver nut and both bolts had been hardened - that is, heat treated to produce a higher tensile strength - and that the stripped, black nut was of a lesser hardness and “probably just mild steel” (T1374). He identified exhibit D6 as being the black nut, exhibit D9 as a bolt with a damaged thread and exhibit D8 as the silver nut, threaded on to a broken conrod bolt.
In his report of 10 January 1995 (part of exhibit P2), Mr. Egan concluded:
“From the available evidence, it would appear that the gas compressor has failed due to a black unhardened substandard nut being fitted to a conrod bolt and then been stripped in service causing tensile overload of the other bolt, presumed to be a satisfactory nut and bolt combination.”
In that report, Mr. Egan also referred to a conrod assembly with which he had been provided by the plaintiff:
“Also Tool-Rite provided a new spare conrod plus bolts and nuts for comparison testing. Both these nuts were black, had raised faces for the seal face (indicated by pimples) and were around 25/27 Rockwell C hardness. The above indicates that the nuts used on the failed conrod were probably not original.”
(On the Rockwell C scale of hardness testing, the black nut was around 18/19 and the silver nut around 23/25.) That conrod assembly was returned to the plaintiff (and was not here produced).
In evidence, Mr. Egan sketched (exhibit P12) one of the nuts which the plaintiff had provided to him. The “pimples” (about 10 or 12), he said, were “raised on the face that actually is compressed during tightening” (T1386). He believed that the pimples were intended to provide a “crush” during the tightening process. Both those nuts, he said, appeared to be,
“consistent with high strength nuts, as you would expect in an application of this kind, whereas the black one wasn’t” (T1410).
When shown Mr. Sain’s sketch (in exhibit P6) of the “special” nut, Mr. Egan said that he could not exclude the possibility that there was a raised face as well as pimples or nipples on the nuts provided by the plaintiff (T1413). He also agreed that there could have been only six raised dimples (“I thought there were more”) (T1416). He did not dispute the possibility that the dimples were on the face opposite the raised face depicted by Mr. Hobson (in exhibit P8), although he could not remember there being a raised face on the nuts (T1418).
FINDINGS
Not surprisingly, each counsel contended that his client’s witnesses should be believed and accepted in preference to those of his opponent. For his part, Mr. Robertson submitted that each of the defendant’s witnesses was frank and truthful. Expressions employed in description of those witnesses included, “no vested interest” (Mr. Conway and Mr. Short), “an independent perspective” (Mr. Kean and Mr. Sleep), “every attempt to assist the Court” and “an astute and rational explanation” (Mr. Kean), “an impressive witness” and “frank and direct” (Mr. Tait), “no convincing evidence of [harbouring] a grudge [against Mr. Sain]” and “no reason to protect or support the defendant” (Mr. Hordacre) and “unchallenged” (Mr. Egan). In contrast, expressions used by Mr. Robertson to describe the plaintiff’s witnesses included, “gave evidence like ‘a story teller’”, “the lone gunman mostly firing blanks”, “reneged on his initial evidence”, “a poor understanding of the compressor” and “has tailored his evidence to suit his own ends” (Mr. Sain), “a series of guesses, reconstructions and speculations - straight-out fabrication” (Mr. Hobson), “insubstantial, not independent”, “as a favour to Sain for no charge” and “recollections are vague” (Mr. Williamson).
For his part, Mr. Geyer, who submitted that, “you will get discrepancies, that’s inevitable”, employed expressions such as, “a disgruntled former employee who should not be accepted” (Mr. Hordacre), “a sincere, credible witness” (Mr. Hobson) and “purely hypothesis and speculation” (Mr. Kean).
In assessment of the witnesses’ evidence, everything that counsel put, in their most helpful and thorough presentations, has been considered and weighed. Practically, it is not feasible here to canvass every contention contained in the transcript.
In relation to the first issue - what caused the corrosion damage to the LP cylinder bore of the compressor - primarily it is necessary to determine what was that corrosion, as distinct, perhaps, from corrosion to other parts of the cylinder. Ideally, as Mr. Short remarked (T1095), upon this issue there should be evidence of chemical analysis of the corrosion observed in the upper cylinder bore and head, so as to determine by what the corrosion was caused. Of such an analysis, evidence has not here been admitted. Necessarily, therefore, the first issue must be resolved by considering the evidence of the witnesses who observed and described that corrosion and the corrosion in other parts of the cylinder. As to be expected, and as the following review of that evidence previously referred to indicates, the witnesses’ descriptions differed:
Mr. Sain spoke of “corrosion or salt build-up .... leading from above the head gasket .... down into the cylinder”; “like scaly rust .... some sort of chemical compound .... Brown .... very thick .... crystals of salt”; “brown candle wax having been dripped down the inside”; and “candle wax or crystals”. He observed a substantial amount of similar corrosive deposits above the gasket and in the valve pockets of both the upper and lower heads.
Mr. Williamson referred to “corrosion deposits”; “a very generalised form of corrosion .... but .... more specific corrosion in areas around the cylinder bore, and around the valve pockets, and, to a lesser extent, the surfaces of the cylinder head”; “a streaking, a discoloration of the bore”; and “staining of the bores”.
Mr. Hobson referred to “crystalline corrosion, whatever, in the bore”; and a crystalline-type deposit “in the top of the cast iron head and also in the valves or the valve pockets”.
Mr. Conway referred to “rusty-coloured corrosion” around the cylinder walls; “very similar to, say, candle wax where it has dripped down the sides of a candle”. Although the inside of the upper head did not show any “particular corrosion”, that which it did show was spread uniformly over the surface.
Mr. Short described “corrosion in the bore .... consistent with liquid leaking into the bore”; and a build-up, not a stain, a rusty orange colour. He agreed that the corrosion could have been throughout the cylinder, including the upper head.
Mr. Hordacre referred to “crystallisation marks and .... some etching type marks” in both the upper cylinder head and in the cylinder. (On 18 August 1994, he spent eight hours in cleaning the head and valves (CB120-122).)
Mr. Kean referred to corrosion marks tracking “in specific runs down the side of the bore”, consistent with distinctive runs from a leaking gasket. He could not recall observing any problem with either head, which may be explicable by Mr. Hordacre having already cleaned the upper head and valves (CB120-122).
Mr. Sleep referred to “apparent drip marks coming down from the gasket”; “a scaly corrosion around the cylinder”; “corrosion marks in the shape of drips”; and “a corrosion stain”. In the upper cylinder head, he thought that there was “like a crystalline type of deposit .... Again a staining sort of a corrosion from this crystalline deposit”.
Having considered, and reconsidered, all of the evidence here presented, I prefer and accept that evidence upon which, in my judgment, the following position has been established.
The Corrosion
On the balance of probabilities, I am satisfied and find:
that in rebuilding the compressor, the plaintiff did install to the upper head of the LP cylinder a new GD head gasket which was properly ‘torqued’ at the plaintiff’s premises and subsequently checked for tightness at Bolivar;
that, thereafter, until fluid was detected in the LP cylinder in July 1994, the new gasket was not removed, nor was the upper cylinder head rotated;
that on 16 May 1994, the plaintiff wrote to the defendant advising that it did not recommend operating the compressor until certain concerns were resolved, including, in particular, the level of moisture which had recently been detected in the compressor;
that from around the time when the compressor was commissioned by the plaintiff on 25 May 1994 until fluid was detected in the compressor in July 1994, the compressor had operated for less than two hours, during which time moist digester gas had been processed in the compressor, the condensate of which was acidic;
that during the time when the compressor was not operating, no measures were taken by the defendant to minimize storage deterioration to internal parts of the compressor through temperature changes causing condensation;
that when the gasket was removed from the upper head in July 1994, the gasket was neither wet, swollen nor discoloured and did not appear to have leaked the coloured, rust-inhibiting coolant into the upper cylinder;
that upon inspection of both the upper cylinder bore and head, numerous persons there observed corrosion which, although differently described, was common to both the upper cylinder bore and head (a finding which, with the upper head being positioned directly above the cylinder bore, is, perhaps, really a matter of reasonable inference);
that the presence of the corrosion in the upper head above the gasket is inconsistent with the corrosion having been caused by coolant escaping past the gasket, because of the head being positioned above the gasket and because of gravitational forces;
that the corrosion damage to the LP cylinder bore was not caused by a leaking head gasket; and
(10)that the corrosion damage common to both the upper head and cylinder bore was condensate of digester gas which had previously been processed in the compressor.
The Black Nut
I agree with both counsel that resolution of the issue - whether the defendant has established that the plaintiff was responsible for the installation of the black nut - depends essentially on a finding as to credibility between Mr. Hobson and Mr. Hordacre. In my observation, while Mr. Hobson gave his evidence in a frank, forthright and open manner, which did have the ring of truth, that was not so of Mr. Hordacre. When he ceased working for the plaintiff, he and Mr. Sain had fallen out. There did appear to be an animosity between them, which could have provided Mr. Hordacre with a motive for here giving evidence differing, in numerous important respects, from that of both Mr. Sain and Mr. Hobson. I have resolved the credibility issue adversely to Mr. Hordacre.
On the balance of probabilities, I am satisfied and find:
that in rebuilding the compressor, the plaintiff (through Mr. Hobson) installed four black (or very dark grey), hardened nuts (with raised faces on one side and six raised dimples or nipples on the other) to the four conrod bolts of both the HP and LP conrods of the compressor;
that in that installation, the plaintiff (through Mr. Hobson) ‘spot’ marked the two conrods and conrod caps for the purpose of ensuring that, if removed, those parts could be replaced in identical positions;
that during the time when the plaintiff was rebuilding the compressor at Bolivar, instances of other persons having tampered with the compressor and changed parts between compressors did occur;
that when the compressor failed in December 1994, the four black (or very dark grey) hardened nuts previously installed by the plaintiff had been removed and replaced (by a person or persons unknown) with three silver hardened nuts and one black unhardened nut; and
that the plaintiff was not responsible for the installation of the black nut.
For these reasons, in my judgment, the two questions which the parties have requested that I answer should be answered as follows:
1.On the balance of probabilities, the corrosion damage to the LP cylinder bore was not caused by water or coolant entering the LP cylinder through the mating surfaces of the upper head of the LP cylinder and the LP cylinder (that is, where the head gasket was placed).
2.On the balance of probabilities, the plaintiff was not responsible for the installation of the black nut.
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