Hay v Snorkel Elevating Work Platforms Pty Ltd & Ors [2008] ACTSC 129 (27 November 2008)

Last Updated: 23 December 2008

MICHAEL GERARD HAY v SNORKEL ELEVATING WORK PLATFORMS PTY LIMITED & ORS

[2008] ACTSC 129 (27 November 2008)

CONTRACT LAW – claim of indemnity – breach of contract – whether defective keeper pin supplied in breach of contractual obligation – when and why keeper pin failed – keeper pin did not conform with agreed specifications – breach of contract established.

NEGLIGENCE – claim of indemnity – provision of under strength keeper pin – negligence established.

CAUSATION – was the breach of contract or negligence a relevant cause of the accident – whether chain of causation broken – gap in evidence – no evidence of the force designed to be exerted upon keeper pin – no evidence of safety margin – “hit or miss” experimentation to fix specifications – causation not established.

EVIDENCE – admissibility – certificate relied upon as accurate in expert report – maker of certificate reasonably presumed to have first hand knowledge of the asserted fact – no objection regarding insufficient notice – evidence not inherently doubtful – lapse of time – not clear maker of certificate able to be identified – disproportionate delay and expense in locating and summoning maker – s63 (1), s63(2)(b), s64(1), s64(2)(b) of the Evidence Act 1995 (Cth) apply – certificate admitted into evidence.

Evidence Act 1995 (Cth) s 63(1), s 63(2)(b), s 64(1), s 64(2)(b)

Hay v Nominal Defendant & Ors [2006] ACTSC 115

No. SC 157 of 1999

Judge: Higgins CJ

Supreme Court of the ACT

Date: 27 November 2008

IN THE SUPREME COURT OF THE )

) No. SC 157 of 1999

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: MICHAEL GERARD HAY

Plaintiff

AND: THE NOMINAL DEFENDANT

First Defendant

AND: SNORKEL ELEVATING WORK PLATFORMS PTY LIMITED ACN 003 724 141

Second Defendant

AND: KENNARDS HIRE AUSTRALIA PTY LIMITED ACN 001 740 727

Third Defendant

AND: KENNARDS HIRE AUSTRALIA PTY LIMITED ACN 000 166 352

Fourth Defendant

AND: EASI-RENTS PTY LIMITED ACN 003 617 105

Fifth Defendant

AND: BORREN METAL FORMING LIMITED

Sixth Defendant

AND: SNORKEL ELEVATING WORK PLATFORMS LIMITED

Seventh Defendant

AND: KENNARDS HIRE PTY LIMITED ACN 001 740 727

First Third Party

AND: COMMONWEALTH OF AUSTRALIA

Second Third Party

ORDER

Judge: Higgins CJ

Date: 27 November 2008

Place: Canberra

THE COURT ORDERS THAT:

1. There be judgment for the sixth defendant against the second and seventh defendants on the contribution claims.

1. This matter arises out of an originating application dated 2 March 1999. The plaintiff was badly injured on 22 October 1997 when an elevating platform he was operating collapsed. A supporting arm of the platform detached whilst the platform was raised. The plaintiff sued seven defendants, two being the Snorkel interests (Snorkel Elevating Work Platforms Limited “Snorkel NZ” and Snorkel Elevating Work Platforms Pty Limited “Snorkel NSW” referred to collectively as “Snorkel”) another being Borren Metal Forming Limited (Borren), a New Zealand manufacturer of metal products.

2. Damages have been awarded to the plaintiff against Snorkel, assessed in the sum of $7,263,756.71 (see Hay v Nominal Defendant & Ors [2006] ACTSC 115 (29 November 2006)). Snorkel NZ was the manufacturer, and Snorkel NSW the supplier, of the platform. The plaintiff discontinued against Borren, the manufacturer of a keeper pin the function of which was to stabilise a pivot pin around which the eye of a levelling rod rotated. There was inside the eye a nylon bush facilitating a low friction rotation of the eye around the pivot pin.

3. The keeper pin was not designed to bear the load of the platform as it was raised or lowered. It fitted through a hole in the pivot pin and was bolted in place. It was designed merely to stabilise the pivot pin.

4. Following the accident, the keeper pin was found to have been fractured not far from its base. The fractured end was not located at the accident scene despite a search by police investigators with metal detectors. The fractured end was heavily rusted.

5. Snorkel NZ claims indemnity from Borren alleging breach of the contract for the supply of the keeper pins, alleging, in essence, that the subject keeper pin was defective. It relied on an analysis of the part of the pin remaining suggesting that the pin was made from steel having a lower carbon content than if steel equivalent to AISI 4140 had been used. That steel, it alleges, was the composition contracted for.

6. The history of the contractual arrangement for the supply of keeper pins is set out in the tendered documents. I will not set them out in these reasons.

7. Initially, Borren was requested to manufacture the pins from “bright, mild steel, case hardened or through hardened as required”. Borren offered to make them from AISI 8620 or AISI 4140 steel. A sample so made using the latter type of steel was accepted. In 1991, it appears that the early batches so supplied were too brittle. The specification was then amended by Snorkel NZ to require “material 4140 normalised from 500°C”. Pins were delivered so manufactured. There were no complaints of pin failure or unsuitability thereafter.

8. It is noteworthy that at no stage does it appear that any calculation was done to quantify the load which any keeper pin might be subjected to in the normal operation of the elevating platform. It is obvious it was not a load bearing component but, as the levelling eye rotated about the pivot pin, some load would be transferred to it depending on the co-efficient of friction between the pivot pin and the bush or bearing within the eye of the levelling rod.

9. Although he did not recall seeing the revised specification, Mr Borren, in his evidence, did not dispute that the accepted description for the metal to be used in respect of the keeper pins, after 1991, was AISI 4140, heated treated to 500°C (Exhibit B, Attachment 3 confirms this inference). Mr Borren’s credit was, by reason of this lack of acknowledgement in his evidence, subjected to attack. I do not endorse that attack, nor do I believe anything turns on it. I am satisfied that Borren’s agreement was to supply keeper pins after 1991 made of AISI 4140 steel, heat treated, after Borren was itself able to do so, to 500°C. That is what they purported to do.

10. The next question is whether the keeper pin supplied and used in the subject machine was supplied by Borren in breach of that contractual obligation.

11. First, it is highly unlikely, in my view, that the subject keeper pin was not supplied by Borren. Nor does Borren seriously suggest otherwise. I find that it was so supplied.

12. The remains of the subject keeper pin were examined by Associate Professor Yeomans. He is a qualified and expert metallurgist. His report is exhibit B.

13. He noticed a “shrinkage cavity” or “pipe” in the metal fragment examined. That feature, he opined, resulted from “an insufficient supply of molten metal to completely fill” the mould cavity. This resulted in a loss of cross section, in the order of 0.8%, thereby reducing load bearing capacity. The appearance of the fracture indicated to him that it “is not a brittle fracture per se”. He further commented that “it could be questioned whether casting is an appropriate method of manufacture of the pinkeeper given that as–cast microstructures do not necessarily have high toughness levels”.

14. It should be noted that Borren was not asked by Snorkel NZ to use any other process. Nor did Snorkel specify any minimum tensile strength for the pins.

15. Professor Yeomans sent the pin remnant to Metallurgical Services Pty Limited which provided a Certificate of Chemical Analysis dated 8 May 1998.

16. Snorkel NZ challenged the admissibility of this Certificate. Clearly, so far as Professor Yeomans was concerned, he relied upon it as accurate but could not himself verify the result. He did have regard to reference works which provided a typical profile of AISI 4140. That was not challenged.

17. Certainly the maker of the Certificate may reasonably be presumed to have had first-hand knowledge of the asserted fact, that is, the composition of the metal of the subject pin.

18. It is not objected that insufficient notice of intention to rely upon the Certificate was given. Nor is the evidence of a kind that would be regarded as inherently doubtful. Indeed, as Professor Yeomans himself indicated, it would be regarded by experts, such as himself, as highly reliable data on which to base an opinion.

19. It is not clear whether the maker of the Certificate could, after this lapse of time (since 1997), be identified. It is certainly apparent that disproportionate delay and expense would be caused if the maker had to be located and summonsed to appear. Consequently, it appears to me that s 63(1) and s 63(2)(b) of the Evidence Act 1995 (Cth) apply to the Certificate. In any event, s 64(1) and s 64(2)(b) apply. The Certificate is, accordingly, admitted into evidence.

20. It then supports the opinion of Professor Yeomans, expressed in his report, though “indicative” due to the small sample, that the pin had lacked the degree of strength that it would have had if the steel had conformed to the profile of AISI 4140. Dr Yeomans opined that, as a matter of calculation, the pin keeper constructed as analysed would have a strength of 4.7 on a scale known as the Rockwell hardness test compared with about 36.6 (head) and 27.5 (shaft) for a replacement pin keeper manufactured as specified with AISI 4140 steel. Only the head of the broken pin keeper, of course, was available to be tested. The Vickers hardness test returned a result of (average) 152 HV20 for the subject pin keeper compared with 356 HV20 for a replacement pin.

21. From these results Professor Yeomans concluded that the tensile strength of the failed pin keeper was 550 MPa compared with 775 to 1100 MPa for a replacement pin keeper constructed as specified from AISI 4140 steel. The difference, Professor Yeomans considered, was due to the low carbon content of the steel.

22. It is also important to note that the heavy rust corrosion on the exposed surface of the failed pin keeper indicated to Professor Yeomans that it had broken some “several months” before the accident to the plaintiff.

23. I would respectfully agree with that conclusion.

24. It was submitted on behalf of Borren that the failed keeper pin might have been of pre 1992 manufacture, when there had been complaint of brittle pins. There was evidence that cadmium plating had been used on such pins which, according to Mr Sexton, tended to make the earlier pins brittle. I simply note that there is no evidence that the failed keeper pin was cadmium plated.

25. I consider it unlikely that the failed keeper pin was a pre-1992 pin, though that was theoretically possible. I think it more likely than not that it was of more recent manufacture and had no different appearance to other pin keepers.

26. I conclude, therefore, that this pin did not conform to the specifications agreed between Borren and Snorkel NZ.

27. I also note the evidence referred to by Snorkel’s counsel of various certificates produced on discovery by Borren. A number of test results so recorded were low in carbon to a similar extent as the failed keeper pin. A suggested cause was erratic aluminium deoxidation by Borren’s furnaceman. In other words, the failure to meet specification could be use of milder steel or careless work practices or both.

28. Thus Snorkel NZ succeeds in establishing breach of contract and in establishing negligence on the part of Borren in so far as the keeper pin in question was of lower tensile strength than a standard keeper pin.

29. However, there is an issue raised as to whether that breach of contract or negligence was relevantly a cause of the injury to the plaintiff.

30. Essentially, that raises an issue as to whether the breaking of the pin was because of its lack of full strength or whether the collapse occurred because the pivot pin bound to the bush inside the levelling arm eye, perhaps because one of the plastic spacers was missing allowing rust to develop inside the surfaces of the pivot pin and arm but, in any event, because there was such an increase in the co-efficient of friction between the surfaces that the load on the keeper pin increased to the point where even a full-strength keeper pin would snap. Then it was a matter only of time for the pivot pin to work loose and the levelling arm to collapse.

31. There is, also, the consideration that the platform had been inspected by Mr Irfan Noor for Snorkel NSW on 16 October 1997. The accident occurred on 22 October 1997. To note and inspect the state of any keeper pin (or, indeed, the spacers for pivot pins) was clearly part of the expected inspection regime.

32. It seems to me that, given the state of the remnant of the keeper pin attached to the machine after the accident, it is more probable than not that it was broken by the time Mr Noor inspected the machine.

33. However, that, of itself, does not, to my mind, break the chain of causation. It may affect contribution as between Borren and Snorkel NSW if Borren’s negligence in providing an under-strength pin was a relevant cause of the accident.

34. However, I do not believe that it is proved that it was.

35. There is an insurmountable gap in Snorkel’s evidence. There is no evidence of the force designed to be exerted upon the keeper pin, nor of the safety margin, if any, allowed for a pin to be fatigued or of lesser strength than optimal strength. It may be assumed, from the lack of reported failures, that in normal operation the normally made keeper pins would not fracture. However, it clearly would not be expected to withstand a “binding” of the pivot pin to the bush of the levelling arm, whether the fault lay with the pivot pin or the bush.

36. It is simply impossible to conclude that a machine functioning within its normal parameters would not snap a full strength keeper pin but would snap one that was (approximately) half strength. It does not appear that Snorkel used anything other than “hit or miss” experimentation to fix on the specifications for the keeper pins.

37. It follows that Snorkel fails both as to Snorkel NZ’s contract and tort claims and as to Snorkel NSW’s tort claim against Borren. Causation is essential in either case. It is unnecessary to consider other issues.

38. There will be judgment for Borren against Snorkel on the contribution claims. I will hear the parties as to costs.

I certify that the preceding thirty-eight (38) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Chief Justice Higgins.

Associate:

Date: 27 November 2008

Counsel for the 2nd and 7th defendants: D L Williams SC with W L Sharwood

Solicitor for the 2nd and 7th defendants: Clayton Utz

Counsel for the 6th defendant: C Barry QC with G Blank

Solicitor for the 6th defendant: Mallesons Stephen Jaques

Date of hearing: 8, 9, 10, 11, 12 September 2008

Date of judgment: 27 November 2008