DBE Energy Ltd v Biogas Products Ltd [2020] EWHC 1232 (TCC)

Mathias Cheung and Reynolds Porter Chamberlain LLP acted successfully on behalf of the Claimant, DBE Energy Ltd (DBE), in the matter of DBE Energy Ltd v Biogas Products Ltd [2020] EWHC 1232 (TCC).

This was a 3-day TCC trial under the Shorter Trials Scheme, which followed a heavily contested PTR application to expunge large parts of the Defendant’s expert evidence, in which Mathias Cheung and Reynolds Porter Chamberlain LLP also acted successfully for DBE.

These proceedings related to DBE’s claim for remedial costs and loss of revenue as a result of the catastrophic failure of the digester tank heaters and pasteuriser tanks supplied by the Defendant, Biogas Products Ltd (Biogas), for DBE’s anaerobic digestion facility in Dunsfold Park. It was DBE’s case that the failure of the equipment was caused by Biogas’ negligence and/or breach of contract in designing the equipment.

In a detailed judgment, Deputy High Court Judge Ms Joanna Smith QC concluded that DBE was substantially successful in its claim and Biogas was wholly unsuccessful in its counterclaims.

As a preliminary observation, the learned judge considered Fraser J’s guidance in Imperial Chemical Industries Ltd v Merit Merrell Technology Ltd (No. 2) [2018] EWHC 1577 (TCC), and found that Biogas’ technical expert expressed views which were biased and asserted as facts matters which were properly for the determination of the court. This was consistent with Waksman J’s decision at the PTR to expunge various sections of Biogas’ technical expert report which raised unpleaded issues.

In summary, the learned judge’s findings on liability and quantum were as follows:

The learned judge analysed the significant volume of contemporaneous documents in detail and concluded that Biogas contracted to and did indeed carry out extensive design works over a series of months in relation to the hot water system generally. Biogas also owed a concurrent duty of care in tort, akin to the design and build contractor in Storey v Charles Church Developments Ltd (1997) 73 Con LR 1.
Regulation (EU) No 305/2011 laying down harmonised conditions for the marketing of construction products and the Pressure Equipment (Safety) Regulations 2016 were plainly applicable to the equipment in question, given that the maximum pressures in the equipment were in excess of 0.5 bar.
Biogas’ argument that it would be appropriate for a designer merely to estimate the relevant operating pressures was roundly rejected. The learned judge considered that Biogas’ expert evidence that “sound engineering practice” under the Pressure Equipment Regulations could be equated with the exercise of mere “common sense” was extremely surprising and highly unlikely.
In the circumstances, Biogas was obliged to ensure that its design for the equipment could be safely integrated into, and would be compatible with, the overall design of the hot water system. However, Biogas failed to carry out adequate structural design checks and testing to take account of the total maximum pressures. The equipment supplied by Biogas was therefore unfit for purpose, and Biogas was negligent and in breach of contract.
Biogas’ contention that DBE failed to take reasonable steps to mitigate its loss was also rejected, given that the alternative remedial solution proposed by Biogas was not an obvious solution and was not necessarily quicker or cheaper. The learned judge emphasised that the duty to mitigate is not an exacting one, in line with Banco de Portugal v Waterlow [1932] AC 452 (HL).
On this basis, and doing her best to arrive at a fair and reasonable figure in accordance with the Supreme Court’s observations in One Step (Support) Ltd v Morris Garner [2018] UKSC 20, the learned judge awarded remedial costs and estimated loss of revenue due to delay totalling £224,303.77.