England and Wales High Court (Commercial Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		14/02/2011

Mr Justice Hamblen:

Introduction

1. This case concerns the damage caused to the marine port and starboard engines of two high-speed catamarans, which were owned and operated by the Claimant ("Wightlink") on a high speed passenger ferry service between Portsmouth and the Isle of Wight, called the m/v "FASTCAT SHANKLIN" ("the SHANKLIN") and the m/v "FASTCAT RYDE" ("the RYDE").
2. Wightlink contends that this damage was caused by breach of contract on the part of the Defendant ("MPS") in its performance between 2003 and 2006 of its overhauls of the engines.
3. In summary Wightlink's case is that:

(1) MPS agreed with Wightlink to carry out W6 overhauls of the starboard and port main engines on the RYDE and the SHANKLIN, the engines being 16 cylinder V-type diesel engines manufactured by Motoren-und-Turbinen-Union Friedrichshafen GmbH ("MTU") between 2003 and 2006. This required MPS completely to disassemble each of the engines and then to rebuild it using as many new components as were deemed required.

(2) The port engine of the SHANKLIN suffered a catastrophic failure in July 2006. Subsequently, in November 2006 the port engine of the RYDE suffered a catastrophic failure.

(3) Following the respective failures the engines were sent to MTU's service facility at Duisburg, Germany for assessment and repair. In addition, although they had not suffered catastrophic failures, the starboard engines from each of the RYDE and the SHANKLIN were removed and sent to MTU for assessment and, if necessary, repair (in November 2006 and April 2007 respectively).

(4) On disassembly of each of the engines by MTU, it was apparent that MPS had not carried out any of the overhauls properly or with reasonable skill and care. In particular, MPS had failed to ensure that the clearance between the piston pins and the piston pin bushes in the connecting rods in each of the 16 cylinders was in accordance with MTU's written requirements; the internal diameter of the piston pin bushes on almost all of the connecting rods in each of the engines were undersized.

(5) This was the cause of the catastrophic failures of the port engines of the SHANKLIN and the RYDE. In essence, the undersizing caused high reaction forces and increased loading between the pistons and cylinder liners which, over time, caused metal fatigue and led to failure.

4. MPS denies that its work caused the engine failures, or that it was defective. In particular, it denies that small clearances between the piston pins and bushes could or did cause the failures. It contends that it was Wightlink's own poor standards of servicing and maintenance and repairs that caused the vessels' engines to fail.

The outline facts

The parties

5. Wightlink operates ferry services between the Isle of Wight and the UK mainland. It purchased the RYDE and the SHANKLIN in 2000 and employed them both as passenger ferries on its standard routes. It owns a number of other vessels powered by engines manufactured by MTU including m/v "OUR LADY PAMELA" and m/v "OUR LADY PATRICIA".
6. MPS is part of the Mitchell group of companies. It is an authorised distributor for a number of diesel engine manufacturers and provides support for such engines. At the time that it carried out the overhauls of the engines it was an authorised distributor for MTU engines.

The vessels

7. The SHANKLIN and the RYDE were constructed in 1996 by Kvaerner Fjellstrand.
8. After their launch in 1996 they were operated on a ferry service in the Philippines. Wightlink purchased the RYDE and the SHANKLIN in 2000. Prior to their being delivered to Wightlink, MTU's agents in Cebu, Philippines carried out a scheduled W6 overhaul of the vessels' engines.
9. Following their purchase by Wightlink, the vessels were operated on a ferry service between the Isle of Wight and Portsmouth. In 2003 Wightlink determined that their engines each required a scheduled W6 overhaul. It agreed with MPS that MPS should carry out a staged programme of overhauls of the four engines so as to minimise the disruption to Wightlink's ferry service.
10. It was Wightlink's case that the overhauls which were to be carried out were to be W6 overhauls and that MPS was contractually required to follow the MTU Manual requirements in relation to such overhauls. There was no dispute that a W6 overhaul is a major overhaul requiring complete engine disassembly.

The overhaul of the SHANKLIN engines

11. By letter dated 2 October 2003 MPS provided Wightlink with a quotation for the overhaul of each of the SHANKLIN's engines (a cost of £170,219 per engine). This was to include "full overhaul, inspection, rebuild and full Dynotest programme". Parts which are not routinely replaced during an overhaul but which were unserviceable or missing were to be replaced at cost. The engines were to enjoy a 12 months warranty following the overhaul. The quotation was acceptable to Wightlink and it indicated this by letter dated 23 October 2003.
12. Although the first of the SHANKLIN's engines was to have been delivered in the middle of November, 2003, there was a slight delay as Wightlink needed to employ her for slightly longer than originally envisaged before she was taken out of service; this resulted in a slight change to the agreed payment schedule. Ultimately, the port engine (no. 5591660) and the starboard engine (no. 5591661) of the SHANKLIN were delivered to MPS in late December 2003.
13. The two engines were disassembled, overhauled and then rebuilt by MPS in early 2004. Once this had been completed, it proceeded to test both engines on its test bed. When tested both engines suffered piston seizures which caused damage to the engines. MPS was unable to ascertain the cause of the problem and in March 2004 it arranged for a specialist engineer from MTU (a Mr Heinz Streicher) to assist in identifying and resolving the problems which had been experienced.
14. The starboard engine (no. 5591661) was tested in his presence, having been rebuilt before his arrival from Germany. It failed on the test bed and was then rebuilt and tested again. On this test, further problems were experienced. Mr Streicher determined that this was consequent upon there being cracks in 13 of the 16 cylinder heads; similar cracks were found in 3 of the cylinder heads in the port engine.
15. After Mr Streicher's return to Germany and in the light of his conclusions about the cylinder heads, on 7 April 2004 Mr Lamb of MPS contacted Mr Frampton of Wightlink by telephone and recommended that all cylinder heads be replaced regardless of damage, which he agreed to.
16. The engines were then disassembled, overhauled and rebuilt again and then tested. They were returned to Wightlink at the beginning of May 2004.
17. On 13 May 2004 representatives from both MPS and Wightlink met at Wightlink's offices to discuss the overhauls of the SHANKLIN engines. At this meeting MPS provided Wightlink with service reports for each engine in addition to a number of documents recording certain measurements taken during testing.
18. Mr Streicher wrote an internal report relating to his visit to MPS which was critical of MPS' facilities, the training of its personnel and aspects of the overhaul carried out. However, MPS remained and remains an authorised distributor for MTU.

The overhaul of the RYDE engines

19. By letter dated 19 October 2004 MPS provided Wightlink with a quotation for the overhaul of each of the RYDE's engines and the replacement of all 32 cylinder heads. By letter dated 29 November 2004 Captain Frampton of Wightlink confirmed the price and payment terms.
20. The port engine (no. 5591593) and the starboard engine (no. 5591594) from the RYDE were delivered to MPS on 17 January 2005. The engines were disassembled by MPS who then observed that both required, amongst other things, new engine blocks, the cost of which was not something included in the agreed price for the overhaul. On 25 January 2005, Kevin Draper of MPS advised Captain Frampton that the cost of a new engine block was £45,268.69. By letter dated 2 February 2005 Captain Frampton confirmed Wightlink's agreement to the purchase of two new engine blocks for the RYDE's engines at this price.
21. The engines were then overhauled, rebuilt and returned to Wightlink in April 2005. MPS then provided Wightlink with service department reports for the engines in addition to a number of documents recording certain measurements taken during testing.

Catastrophic failure of the SHANKLIN starboard engine due to crew negligence

22. On 23 February 2006 the starboard engine (no. 5591661) of the SHANKLIN suffered a catastrophic failure whilst en route from Portsmouth to the Isle of Wight; investigations revealed that the crankshaft had broken. The cause of this failure was attributed at the time to a series of crew errors which had occurred about 5 weeks previously. The engine overheated on 16 January 2006 consequent upon the failure by the duty engineer to open the raw water cooling suction valve prior to departure as it was operated without any (or a severely restricted) sea water cooling flow; it was then, mistakenly, left running at full power; and finally cold water was poured into the overheated engine subjecting it to possible thermal stressing.
23. The engine was returned to MPS for stripping, investigation and rebuilding. By letter dated 10 April 2006 Mr Winterman of MPS provided a quotation for a further unscheduled W6 overhaul of it and the replacement engine components required. This was accepted by Wightlink and MPS proceeded to disassemble, overhaul and rebuild the engine. It was returned to Wightlink and re-installed on the SHANKLIN in May 2006.

Catastrophic failure of the SHANKLIN port engine (no. 5591660)

24. On 22 July 2006 the port engine (no. 5591660) on the SHANKLIN suffered a catastrophic failure while the vessel was proceeding from the Isle of Wight to Portsmouth. It was subsequently established that the no. 6 unit of the A-bank of cylinders on the engine had failed.
25. The engine was removed from the SHANKLIN and returned to the manufacturers, MTU, in Duisburg, Germany for inspection and repair. This process was overseen by Mr Josef Grote of MTU. A report on MTU's inspection of the disassembled engine, identifying the defective parts and the requirements for repair or replacement of the various components was prepared. It noted that the Conrod bushings were far below the MTU specified dimensions:

"Bushings far below specified dimensions. Actual 60.010 – 60.040

Spec.: 60.070 – 60.080, all bushings with clearly visible wear traces – replace by new part and drill to dimension"

26. MTU carried out a W6 overhaul. The failed piston, liner and associated components from cylinder A6 were examined by metallurgists Materials Technology Limited who produced a report dated 27 September 2006. They concluded that the likely cause of the failure was metal fatigue. In the light of this report as well as the various other reports in existence at the time, Casebourne, Leach & Co., consulting marine engineers and ship surveyors, determined in a report to average adjusters dated 23 October 2006, that of two suggested possible causes for the failure the more likely was incorrect machining of the piston gudgeon bushes.
27. MTU subsequently produced a written "Damage Scenario" setting out its Duisberg workshop's view as to the likely cause of the failure of the engine. This was provided to Wightlink at the end of November 2006. It stated that the suspected reason for the damage was that:

"the necessary clearance between piston bolt and bushing was minimal

minimal clearance would cause high reaction forces between liner wall and piston crown due to restricted movement of piston at reversal points..."

Catastrophic failure of the RYDE port engine (no. 5591593) and removal of the starboard engine (no. 5591594)

28. On 8 November 2006 while on passage from Ryde to Portsmouth, the lubricating oil alarm on the RYDE's port engine (no. 5591593) sounded and the engine stopped. The vessel continued to Portsmouth on her starboard engine. Following investigations and removal of the cylinder head on unit no. B8 it was apparent that a catastrophic failure of the piston had occurred which rendered the engine unfit for continued service without major repairs.
29. The port engine (no. 5591593) was removed from the RYDE and returned to MTU, in Duisburg, Germany for inspection and repair. In addition, as a consequence of its increasing concerns about the overhauls which had been carried out by MPS, Wightlink decided to remove the starboard engine (no. 5591594) from the RYDE at the same time and to return it to MTU for inspection and, if necessary, repair.
30. The inspection of both engines was overseen by Mr Grote. A report on MTU's inspection of the disassembled port engine (no. 5591593), identifying the defective parts and the requirements for repair or replacement of the various components was prepared dated 14 December 2006. In the Inspection Report the following was recorded as regards the Conrods:

"B8 conrod/B8 piston were damaged by torn-off piston crown. All other conrods had undersized piston pin bores (by 0.03-0.04mm too small) and axial parallelism and twist were clearly out of tolerance."

A similar report was prepared for the starboard engine (no. 5591594) dated 20 December 2006.

31. As with the SHANKLIN port engine, it was decided that the engine required an unscheduled W6 overhaul. It was also decided that the condition of the starboard engine (no. 5591594) of the RYDE (although it had not yet suffered a catastrophic failure) was such that it also needed an unscheduled W6 overhaul. As was recorded by C.W. Molyneux, the surveyor appointed by underwriters to investigate the damage caused to the engines following his attendance at MTU's premises for a survey on 16 January 2007:

"Several issues have been highlighted by MTU in Germany that may be related to the most recent W6 overhaul, notably the gudgeon pin / bush clearances...Please note that as a precaution the Owners had the starboard engine removed and sent MTU, Duisburg, for inspection. Conditions similar to those discovered on the port main engine have been discovered and once again the gudgeon pin/bush clearances have been found to be below manufacturers tolerance."

Removal of the SHANKLIN starboard engine (no. 5991661)

32. Shortly after the W6 overhaul carried out by MPS in the spring of 2006 and the SHANKLIN returned to service, the lubricating oil pressure was noted by Wightlink to be abnormally low. MPS was advised of Wightlink's concerns and they both sought to resolve the problem. Wightlink changed from a synthetic oil in service to a regular mineral oil. In addition, the fuel pumps were removed and sent to Bosch to be pressure tested where it was discovered that the high pressure non-return valves were leaking; repairs were carried out and the pumps refitted. Nevertheless, samples of lube oil drawn from the engine in early 2007 exhibited excessive soot. In the absence of a solution to the problem and concerns consequent upon the condition of the other engines, in April 2007 Wightlink determined to remove the SHANKLIN starboard engine (no. 5591661) and return it to MTU for inspection and, if necessary, repair.
33. MTU's inspection report dated 6 February 2007 noted amongst other matters that:

"14 conrod bushings were drilled to far below the tolerance (spec.: 60.070 – 60.080 / act.: 60.030 – 60.050)."

34. As with the other three engines inspected by MTU, the SHANKLIN starboard engine (no. 5591661) was in a condition which it was considered required a complete W6 overhaul, which was duly carried out.

The claim

35. Wightlink's claim is for the cost of the removal and repair of the four engines together with some storage charges. The total sum claimed by Wightlink is £1,397,959.10.

The witness evidence

36. At the trial I heard factual evidence from the following witnesses for Wightlink:

(1) Mr John MacDougall – who has been the Engineering Superintendent for Wightlink (now Ship Manager) and has had responsibility for the maintenance and day to day running of the SHANKLIN and the RYDE since 2000.

(2) Mr Mark Parsons – who has been a Ship Manager at Wightlink since 1999 and manages the technical side of the maintenance of the vessels in Wightlink's fleet as well as ensuring that they comply with relevant regulations.

(3) Mr Josef Grote – who has been a Senior Manager at the MTU repair centre in Duisburg, Germany since 1998 and oversaw the disassembly, inspection and repair of all four engines which are the subject of this dispute.

37. I heard evidence from the following factual witnesses for MPS:

(1) Mr Kevin Draper – who was the Engine Supervisor at MPS until 2005 when he became its Manager of Product Support.

(2) Mr Maurice Lamb – who has been the Director of Product Support at MPS for the past 10 years.

(3) Mr Alan Ratcliffe – who is a machinist of engine parts at MPS and was involved in the W6 overhauls of the four engines which are the subject of this dispute.

(4) Mr Angus Winterman – who was the MPS Group Aftersales Manager from 2002 until June 2006 when he became the General Manager, Sales.

38. In addition I heard expert evidence from Mr Ian Head for Wightlink and from Mr John Blowes for MPS, consultant marine engineers.
39. There were major differences between the experts in relation to the central issue in dispute, namely the cause of the engine failures. Mr Head was adamant that these were due to the fact that there was insufficient clearance between the piston pins and the bushes. Mr Blowes was equally adamant that this was not and indeed could not be the cause, and that the explanation lay in poor servicing and maintenance by Wightlink.

The principal issues

40. The principal issues which fall to be determined are as follows:

(1) What duties did MPS owe to Wightlink?

(2) Was MPS in breach of duty?

(3) If so, did MPS's breaches of duty cause the engine failures and/or the damage to or defects found within the engines?

(4) Was it reasonable for Wightlink to repair the engines and, if so, should credit be given by Wightlink for betterment?

(1) What duties did MPS owe to Wightlink?

41. The contracts between the parties are contained in or evidenced by the quotation and acceptance letters of October 2003 (for SHANKLIN), November/December 2004 (for RYDE) and the quotation letter of 10 April 2006 (for the SHANKLIN starboard engine overhaul). Although there had been an agreement in principle prior to October 2003 that MPS would carry out a staged programme of overhauls, there was no contractual commitment that this be done and each overhaul was separately contracted for.
42. The letters for the SHANKLIN and RYDE overhauls describe the service contracted for as being the "overhaul and rebuild" of the engines which was to include "full overhaul, inspection, rebuild and full Dynotest programme". They do not state that this is to be a W6 service. By contrast, the April 2006 letter for the SHANKLIN starboard engine overhaul did provide a quotation "to perform a W6 overhaul on the engine and replace additional components required to bring the engine back to an operational condition".
43. The parties were aware that the engines were MTU engines and that the MTU "overhaul and rebuild" service is the W6 service. It was understood that the service would be carried out by reference to the MTU Manual for W6 services but, save in respect of the SHANKLIN starboard engine 2006 overhaul, there was no contractual agreement to perform a W6 service.
44. Wightlink contended that not only was it contractually agreed that MPS would perform a W6 service but also that this meant that the terms of the Manual were incorporated into the contract so that strict compliance with the Manual was contractually required.
45. Wightlink placed particular reliance upon the statement made in the Manual that a W6 overhaul:

"Requires complete engine disassembly to facilitate repair/overhaul of all relevant components. The decisive factor is the component condition or the actual dimensions, referenced to the Tolerance and Wear Limits List."

It was submitted that this required strict compliance with the Tolerance and Wear Limits specified by MTU in the re-built engines.

46. In relation to the SHANKLIN and RYDE overhauls there was, however, no contractual agreement that the overhaul would be a W6 service. Further, in relation to none of the overhauls was there an express agreement that the W6 Manual was to be incorporated in or followed as a matter of contract. Nor in my judgment can such an agreement be inferred from the terms of the Manual or otherwise.
47. The opening words of the Manual read: "the tolerances and wear limits indicated in this publication are intended as a guide for the examination of engine components during inspection and repair." As this indicates, and as would be expected, the Manual is a guide; it is not drafted as a contractual specification and nor would it easily so function.
48. As Hobhouse J stated in Alexander & Ors v Standard Telephones and Cables Ltd (No 2) [1991] IRLR 286 at [31]:

"The fact that another document is not itself contractual does not prevent it from being incorporated into the contract if that intention is shown as between [the parties]. Where a document is expressly incorporated by general words it is still necessary to consider, in conjunction with the words of incorporation, whether any particular part of that document is apt to be a term of the contract; if it is inapt, the correct construction of the contract may be that it is not a term of the contract. Where it is not a case of express incorporation, but a matter of inferring the contractual intent, the character of the document and the relevant part of it and whether it is apt to form part of the individual contract is central to the decision whether or not the inference should be drawn."

49. There was no express incorporation of the Manual in this case, nor is it apt to form part of the contract. The Manual recognises, for example, that "work listed here which is not relevant to the respective engine equipment can be disregarded" and that "specific operational conditions may require modification of the Maintenance Schedule". Further, in some instances, it would be impossible for MPS to abide by the Manual tolerances as many of the parts were supplied pre-machined by, and in some instances to tolerances outside of their own guidelines. Moreover, what was being sought and provided was a highly bespoke and intricate service, with adjustments and refinements as were specifically required, but also in many instances with discussions about what parts might be needed anew with consequent cost consequences. On occasion, for example, Wightlink refused to have certain new parts, so the Manual dimensions were of no application.
50. For all these reasons I reject Wightlink's contention that the Manual was contractually incorporated and that there was any contractual requirement that the Manual be strictly complied with.
51. On the other hand it was common ground that MPS owed duties as a matter of contract to exercise reasonable skill and care in and about all work and servicing carried out by it and that all components replaced or reconditioned would be of satisfactory quality and fit for use within the particular engine. I accept that this meant that in carrying out the overhauls MPS had to have regard to the MTU Manual, including its Tolerance and Wear Limits. This was a MTU engine. The MTU Manual sets out in detail how a major overhaul involving disassembly, inspection and rebuild of such an engine should be carried out. That was the obvious and only specifically relevant reference document for such an overhaul. The Manual should therefore have been used as a reference point. However, there was no requirement that it be strictly complied with.

(2) Was MPS in breach of its duties to Wightlink?

52. According to the Tolerance and Wear Limits Manual, the clearance between the piston pins and the piston pin bushes were stated to be a minimum of 0.070mm and a maximum of 0.085mm.
53. Judged against that criteria, I find that the clearances between the piston pins and the piston pin bushes were undersized in almost every cylinder of all four engines. This is clearly evidenced by the data sheets prepared by MTU, Duisburg, Germany when it dismantled the engines and was supported by the evidence of Mr Grote. Mr Blowes questioned some of the smaller recorded measurements on the grounds that such clearances would have been difficult if not impossible to achieve and would have made assembly of the unit problematical. However, I accept the measurements as being broadly accurate and as clearly establishing clearances below the minimum stated in the Manual. MPS also sought to cast doubt on the figures by suggesting that there was no satisfactory documentary evidence of the diameter of the piston pins. However, I accept Mr Head's evidence that, save for the exceptions noted or accepted by him, all of the pins were of 60 mm diameter or so close thereto as to make no material difference.
54. Indeed, it was MPS' evidence and case that they deliberately machined the bushes with smaller clearances in accordance with common industry and their own standard practice. Their machinist, Mr Ratcliffe, explained that they would aim for a constant running clearance of 0.025 to 0.038 mm. This practice is described as selective machining.
55. Wightlink's expert, Mr Head, accepted that provided selective machining is properly carried out it is acceptable practice. If, for example, MPS had carried out selective machining with the aim of achieving a clearance of between 0.070mm and 0.085mm that would be unobjectionable. In his opinion, however, what was unacceptable was selective machining to a different and lower clearance than that specified by MTU. MPS's expert, Mr Blowes, disagreed. It was his opinion that selective machining to the clearances identified by Mr Ratcliffe was not only acceptable and widely followed practice, but was preferable in terms of both engine wear and noise.
56. I shall address below in the context of the issue of causation the technical justification for and effect of machining to these lower tolerances. Whether so doing involved a breach of the duty of reasonable skill and care will therefore be considered further once the issue of causation has been addressed.

(3) Did MPS's breaches of duty cause the engine failures and/or the damage to or defects found within the engines?

57. Whether the small clearances between the piston pins and bushes caused the engine failures and other defects found in the engines was the central issue in the case.
58. Wightlink's expert case was that the small clearances restricted free movement of the connecting rods as they oscillated which in turn restricted the linear movement of pistons up and down the cylinder liners, which in turn forced the pistons against cylinder liners resulting in high reaction forces and increased loading between them, particularly at the piston reversal points. This then caused metal fatigue leading to the engine failures.
59. MPS' expert case was that this did not and indeed could not have caused the failures and that the most likely cause was poor operation and maintenance of the engines by Wightlink.
60. In support of Mr Head's theory of damage, Wightlink relied in particular on the following:

(1) Mr Head's expert evidence;

(2) The contemporaneous findings made and opinions expressed as to the likely cause;

(3) The physical evidence;

(4) The very small clearances measured and the fact that the failed A6 cylinder liner had the smallest clearances;

(5) The implausibility of the alternative explanations put forward;

(6) The co-incidence of repeated failures and engine problems following MPS's overhauls in comparison to relatively trouble free operation both before and afterwards.

61. Mr Blowes put forward a raft of reasons as to why Mr Head's theory could not explain the damage. In particular, he stressed the following:

(1) There is no such thing as 'inadequate clearance'. All that is required is clearance and space for the lubricating oil (something like 3 microns); there would have to be no clearance at all, or no lubricating oil, for a piston or connecting rod bush to impose forces on the cylinder liner;

(2) The surface of any bush seizing on the common pin would be destroyed in minutes as the engine is of such great power; by contrast, these engines lasted for 5,438 and 6,468 hours;

(3) The theory requires there to have been seizure in not just the piston-pin/small-end bush but at the second source of movement, i.e. at both the piston bushes and at the connecting rod bushes; not only is this highly implausible but such a coincidental event would have left visible signs and there are none;

(4) There could have been no such fatigue failure of the metal: the number of hours of engine operation was far beyond the endurance limit for fatigue failures. Further, as Mr Head accepted, the Ryde failure reflected tension rather than fatigue failure with the bolts between the top of the piston (the crown) and the bottom of it (the skirt) pulling apart;

(5) Smaller clearances are preferable as they result in reduced wear. Small clearances are accepted industry practice;

(6) There is no physical evidence showing signs of having seized or 'grabbed' the pin; the marks are consistent with lack of lubrication;

(7) Any problems that might have been created by anything seizing or grabbing would have come out in testing and on any view long before the engine failures. Further, in relation to the Shanklin port engine by 3,000 hours Exxon had found nothing untoward.

62. Both parties made veiled attacks on the independence of the other's expert witnesses. However, I am satisfied that both experts were seeking to assist the court and give independent views.
63. There was, however, a contrast between the experts. Mr Head was an ex Salvage Association surveyor with considerable general experience which included but was not limited to diesel engines. Mr Blowes was a diesel engine specialist, albeit much of his experience was land based.
64. Mr Head would appear to have formed a fixed view at a relatively early stage that the cause of the failures must be the small clearances. He made it clear that he had made his mind up and rejected principles put to him on the basis that they did not fit his theory of what happened. He was also inclined to dismiss matters put to him as being theoretical or derived from textbooks, even if he accepted the principles involved. His evidence was very much that of the practical man but he found it difficult to back his conclusions with analysis, established theory, empirical data or similar examples. With regard to the one textbook upon which he did seek to place reliance he quoted a section that related to main bearings rather than small end bearings and eventually had to accept in cross examination that it was not relevant.
65. Mr Blowes, by contrast, explained the engineering principles which underlay his opinions and backed it up with detailed analysis and examples. His approach both in his reports and evidence was far more methodical and analytical than that of Mr Head.
66. Having carefully considered the factual and expert evidence I have come to the clear conclusion that Mr Head's theory of damage must be rejected. I found the evidence of Mr Blowes to be far more convincing on this issue for the various reasons given by him and in particular the following:

(1) Mr Head failed properly to explain in his reports and evidence the mechanism of failure. His theory depended upon the small clearances resulting in restricted movement of the pin. However, even with small clearances there is ample room for an oil film, which is only about 3 microns. If there is an oil film then there should be no restricted movement. If, on the other hand, there is no oil film then there will be metal to metal contact and abrasion or seizure leading to destruction of the pin. There was no satisfactory explanation of how physically there could be a halfway house of restricted movement.

(2) Even if restricted movement was physically possible the increased load on the cylinder liner which would result would be minimal compared to the loading forces imposed in normal operation. Mr Head accepted Mr Blowes' calculations of these forces.

(3) If there was restricted movement imposing increased loading of any significance it would be likely to have resulted in failure long before the 5,000/6,000 hours the failed engines operated. Even if one was to accept that the mode of failure would be fatigue failure, that too would be likely to occur long before that time.

(4) The physical evidence did not bear out Mr Head's theory of damage. In particular, there was no satisfactory evidence of the pins being seized or grabbed, particularly in relation to SHANKLIN port A6 and, as Mr Head accepted, in relation to RYDE port B8 the piston bolts showed tension failure, not fatigue failure. This is further discussed below.

(5) Given that there are a huge number of piston engines in the world operating with machined bushes to be fitted over pins, if small piston/bush clearances create a problem as Mr Head theorises one would expect this to be both known and documented. Mr Head was unable to identify a single example of it occurring or even being discussed.

(6) The acceptability of small clearances is supported by the recommended clearances of a number of diesel engine manufacturers, as identified by Mr Blowes in his reports; the edition of the well known engineering Yearbook, Kempe, which was identified by Mr Blowes, and by the practical experience of MPS and Mr Blowes.

67. Mr Head repeatedly returned in evidence to the point that if the engine manufacturers recommended a particular clearance then it must be necessary. However, he was unable to explain why it was necessary, nor was there any technical evidence from MTU to explain this. Nor was he able to explain at what point and why the lack of clearance would become critical. In his supplementary report he developed a theory that the reason for the recommended clearances was because of unusual oil feed arrangements which would have reduced the oil flow around the pin. There was no evidence from MTU to this effect, nor was it raised with Mr Grote. Moreover, I accept Mr Blowes' evidence that the oil feed arrangement was not unusual and that in any event there were ample sources of oil. Further, as Mr Head accepted, for lubrication purposes only a small film of oil is required and Mr Head's theory was based on lack of lubrication, not lack of cooling or cushioning.
68. In relation to the main points relied upon by Wightlink I find as follows:

(1) Mr Head's expert evidence – I have already set out above my reservations about his evidence and the reasons why that of Mr Blowes is to be preferred.

(2) The contemporaneous findings made and opinions expressed as to the likely cause – It is the case that a number of people involved at the time expressed the opinion that small clearances were the likely cause of the damage. However, the only relevant opinion evidence before the court is that of the expert witnesses. Moreover, the main source of those opinions appears to have been the views expressed by Mr Grote very early on following the SHANKLIN port engine failure. However, as he accepted in evidence, that was a view expressed on a physical examination of the engine (although he did not have the failed A6 piston) and without the benefit of any documents relating to the operational history of the engine. In an email of 20 November 2006, MTU's UK representative, Mr Peter Miller, observed that:

"One point that is agreed between Duisburg, Mitchells and myself is the time the engine has run before failure would be much shorter if all the points raised by Duisburg were incurred at the time of rebuild. Therefore we would like to examine two points that may assist further. These are comments from Mobil regarding oil/carbon deposits found in the coupling and any reports of alarms or overheating with the engine due to coolant leaks. Could you forward information from the log books of alarms or coolant leaks and have you reports from Mobil?"

This requested information was never provided.

(3) The physical evidence – In relation to SHANKLIN port A6 MTU observed that the bushings had "clearly visible wear traces" and "minor signs of seizure around the periphery". It is unclear whether this applied to the A6 bush, but in any event both experts agreed that this was in good condition. That is not consistent with Mr Head's theory of damage, nor indeed with the different physical evidence which Wightlink relied upon in relation to RYDE port B8. As to B8, Wightlink relied upon Mr Molyneux's report at the time which described the pin as having a "severely overheated surface" and being "blued", the bush as being seized on the end of the pin and other pins as being "scored around central bearing surface". Wightlink also relied upon signs of bronze from the bush having become welded to the small end and piston pin, and signs of scoring on the small end and the outside of the bush. The evidence relating to the B8 bush was unsatisfactory. Both Mr Head and Mr Blowes produced their reports on the basis of the bush being that identified by Mr Head. That bush was in very good condition. However, it was later suggested by Wightlink that was the wrong bush and not that shown in the photograph exhibited to Mr Molyneux's report. If so, then the physical evidence to back up his report has not been provided. In any event, the pin was in good condition save for signs of overheating. Mr Blowes' evidence, which I accept, was that the signs of bronze on the pin reflected transfer of metal due to overheating. If there had been metal to metal contact due to lack of clearance one would expect to see an abraded rather than a scored surface, but there was no evidence of that. Nor was there any evidence of a fatigue failure, as Mr Head's theory assumed. As he accepted, the piston bolts suffered a tension rather than a fatigue failure.

(4) The very small clearances measured and the fact that the failed A6 cylinder liner had the smallest clearances - It is correct that some of the clearances recorded by MTU were very small, although the accuracy of the smallest measurements was questioned. If one accepts that they are broadly accurate they indicate that some of the clearances were smaller than those intended by MPS and than are reflected in some of the documents and examples relied upon by Mr Blowes. However, Mr Head's theory depends upon lack of lubrication and, as Mr Blowes explained, given the very small thickness of an oil film only very small clearances are required for lubrication purposes. Mr Blowes acknowledged that larger clearances might be desirable for cooling purposes and that in this connection there is a relationship between piston diameter and the clearance required, but Mr Head's theory was not based on lack of cooling. For this reason also I reject Wightlink's criticisms of the smaller engine examples used by Mr Blowes to illustrate the acceptability of very small clearances. In relation to the issue of the clearance acceptable for lubrication purposes with comparable synthetic oils these were appropriate examples. If, as I find, very small clearances are acceptable for lubrication purposes then the fact that A6 may have had the smallest clearance makes no difference. It was still large enough for lubrication.

(5) The implausibility of the alternative explanations put forward - I address this further below.

(6) The co-incidence of repeated failures and engine problems following MPS's overhauls in comparison to relatively trouble free operation both before and afterwards. This is too general a point to be of any great weight. The evidence relating to each engine and incident has to be separately considered and assessed. Further, as MPS pointed out, there was an improvement in Wightlink's maintenance systems and record keeping after these incidents.

69. In relation to whether there was an alternative explanation of the failures, Mr Blowes' evidence in summary was as follows.

(1) SHANKLIN port engine: The damage found was scuffing at the cylinder liners. The cylinder liners were inadequately lubricated. The lubrication (oil) failed because of a number of service and maintenance issues including water leaks, fuel injector problems giving rise to a lubricating system overload. There was therefore less lubrication in the engine than was required and when the lubrication failed the piston crown tore away from the piston skirt. That is why the bolts were broken as they were.

(2) RYDE port engine: the mechanical failure was the same, but the reasons were different. In this case excessive solid contaminants in the oil blocked the oil jets. This arose from service and maintenance failures. There had been massive internal water leaks from June to November 2006, the lubricating oil system was overloaded; the engine had low pressure probably caused by fuel dilution and yet, knowing this, it was being operated at full power on test.

(3) SHANKLIN starboard engine (not failed but comment on condition): there was cracking of cylinder heads pointing to over-tightening of the fuel injectors or the engine overheating, caused by boiling of the cooling water, which was caused by servicing deficiencies. The reports at the time found that 2 fuel injectors did not work and that 15/16 cylinder heads were cracked indicating poor combustion and/or poor cooling identified.

(4) RYDE starboard engine (not failed but comment on condition): the premature wear caused by high level of contaminants in the oil and fuel dilution.

70. I accept that there were some general criticisms of Wightlink's practices which were made out on the evidence. In particular, at the time they appeared to have had no proper system of preventative maintenance with clearly prescribed times/periods for doing defined maintenance and servicing tasks and with systematic record keeping. Mr Parsons' evidence was that this has since improved and that they now have spreadsheets and daily entries of all maintenance tasks. They also failed to carry out the W5 services at the time recommended by MTU.
71. I also accept, as did Mr Head, Mr Blowes' summary in his Appendix G of various reported incidents during the history of the operation of the vessels. I do not, however, accept that all the incidents noted were of particular significance nor that all the conclusions Mr Blowes drew from them were justified. In particular, although there was ample evidence of repeated problems with water leaks, there was no evidence of any significant internal water leaks, as borne out by the oil analyses results. Further, although the monthly oil analyses results showed increases in metals, water and soot those results never reached critical levels and the oil analysts never recommended a change in the oil, despite the long hours between changes. In this connection I consider that Wightlink could reasonably rely on the oil analysts' advice and recommendations.
72. Although there clearly were problems in the operations of the engines on the evidence before the court I do not consider that a precise reason for the engine failures has been established. I accept that the likely cause is overloading of the lubricating oil system rather than seizure or grabbing of the piston pins, but the cause of that overloading has not been clearly established. Although Mr Blowes' theories (save for the assumption of significant internal water leaks) provide possible explanations, I do not find them to be proved on the balance of probabilities. However, I am satisfied that Mr Head's theory cannot be the cause.
73. I accordingly find that the small clearances between the piston pins and bushes were not the cause of the engine failures and other defects found in the engines.
74. In the light of the findings made in relation to the issue of causation I return to the question of breach. As already found, there is nothing wrong with the practice of selective machining; the issue is the clearances to which that machining should have been done. Mr Ratcliffe's evidence was that the machining was done to achieve their normal running clearances of 0.025mm to 00.38 mm. It was his experience, and that of MPS, that such clearances are satisfactory. That was supported by Mr Blowes and by his own experience. It was also supported by various examples of engine manufacturers' recommended small clearances which he identified. Although those were mainly smaller engines it was Mr Blowes' evidence, which I accept, that they reflect a generally typical range, although if larger engines were included the top of the recommended range might be 0.05mm or possibly 0.055mm rather than 0.039mm. It was also supported by the formula identified by Mr Blowes in Kempe's Yearbook which gave an indicative clearance for pins of the relevant diameter of 0.043mm. Further, Mr Blowes explained that small clearances are preferable because they result in reduced wear and noise. He also identified two further reasons why small clearances would be desirable for this particular engine, namely to reduce pin travel within the bush and to minimise impact on the bearing due to the high speed of the engine. By contrast, no technical reason for requiring the larger Manual clearances was made out on the evidence and, as I have found, the smaller clearances did not cause the failures and associated engine problems. My conclusion is that the evidence establishes that machining to smaller clearances was technically justified and in accordance with accepted engineering principles and practices. Although, I accept that MPS should have had regard to the Manual's recommended clearances and should not have departed from those recommendations without some reason, I am satisfied that there were sufficiently good reasons to do so in this case. I accordingly find that MPS' selective machining so as to achieve smaller clearances than those recommended in the Manual did not involve a breach of the duty of reasonable skill and care or other breach of contract.
75. Even if it is technically justifiable and acceptable engineering practice to machine to these smaller clearances a question potentially arises as to whether a reasonably competent engine workshop would do so without first consulting MTU given that it was contrary to their Manual recommendations. There was some evidence from Mr Draper and Mr Blowes which would suggest that this should be done and one can well understand that it would be good practice to do so. However, Wightlink did not plead or advance their case in this way nor were the causation issues which would arise explored in evidence. In these circumstances I do not consider that it would be appropriate to make any finding on this issue; the issue is one of negligence and any such case should be clearly identified in advance of the evidence.
76. If, contrary to my findings above, the adoption of small clearances did involve a breach of contract I reject Wightlink's case (advanced for the first time in closing submissions) that this breach was an effective cause of the losses claimed even if it did not cause the engine failures. Wightlink sought to argue that the fact that the small end bushes were significantly undersized in each engine was in itself good reason for Wightlink to effect a full W6 service on each of the engines. However, the reality is that the engines were removed because of the failures which had occurred. Indeed that is Wightlink's own pleaded case in relation to the removal of the RYDE port engine. Although, advice was given to remove the other engines because undersized clearances were likely to be a common feature of the overhauls, that advice was given in the light of the failures which had occurred and the fact that these had been wrongly assumed to be attributable to the small clearances. So, for example, if the small clearances had been identified at the time of the SHANKLIN starboard engine overhaul in May 2006, following the failure ascribed and due to crew negligence rather than overhaul issues, I have little doubt that it would not have been said that this necessitated the removal of all the other engines, nor would this have been done.
77. Wightlink also sought to rely on a number of alleged breaches of duty in relation to the overhauls carried out by MPS ("the secondary case"). These were not explored in any detail in the argument or the evidence. The reason for this is no doubt because these were not alleged to be causative of the engine failures or of the consequent need to remove and disassemble the engines. In relation to the SHANKLIN port engine the only pleaded cause of the failure was insufficient clearances. In relation to the RYDE port engine there is also a reference to the piston pins not being parallel to the crankshaft but Mr Head never suggested that this was causative and Wightlink's counsel accepted in opening that its case was that the cause of the failures was insufficient clearances and not other issues. As to the other engines, the Particulars of Claim asserts that "as a consequence of" the failure of the RYDE port engine the starboard engine was removed, which involves an averral of the same underlying cause. Although the other engine failures are not expressly pleaded as being the reason for the removal of the SHANKLIN starboard engine, there is little doubt that they were and I so find.
78. In these circumstances Wightlink's secondary case is of no causal relevance since it is not contended that the alleged breaches caused the engine failures or the removal of the engines. It is possible that some of these alleged breaches led to increased repair costs but it was not pleaded or alleged in evidence that they resulted in any particular or separately identifiable loss and damage. Wightlink's case was put globally in relation to the entirety of the repair costs and it must stand or fall on that basis.
79. It is therefore not necessary to address Wightlink's secondary case in any detail, nor was it so addressed at trial. The pleaded breaches were as follows:

(1) RYDE port engine: piston pins not being parallel to crankshaft.

(2) RYDE /SHANKLIN starboard engines: piston crown scoring.

(3) SHANKLIN starboard engine: cylinder block misaligned; failed properly to machine cylinder block.

(4) SHANKLIN starboard engine: two relief valves in wrong locations.

(5) SHANKLIN starboard engine: some of piston crowns not paired with designated skirts.

(6) SHANKLIN starboard engine: fuel oil filters changeover valve and opening been damaged.

(7) SHANKLIN starboard engine: lubricating oil inlets for both turbochargers damaged.

(8) RYDE starboard engine: failed ensure crankshaft was in tolerance at main bearing journals and conrod bearing journals.

80. Mr Head expressed the opinion in his reports that these alleged defects would all be attributable to "inappropriate servicing" by MPS. This was disputed by Mr Blowes. Although Mr Blowes accepted in cross examination that it was possible that MPS was responsible for some of the alleged defects he did not accept that they were. Proof of breach of contract in relation to these alleged defects called for more than the cursory treatment which they received in the evidence and at trial. Bearing that in mind, and Mr Blowes' evidence in his reports and in cross examination as to why MPS fault was not necessarily involved, I am not satisfied that the further alleged breaches have been proved on the evidence with the exception of the wrongly located relief valves on the SHANKLIN starboard engine. However, there is no proven loss as a result of that breach of duty.

(4) Was it reasonable to repair the engines and should the quantum of the claim be reduced for betterment?

81. The costs claimed associated with the breakdown, removal and repair of the port and starboard engines from each of the SHANKLIN and the RYDE were as follows:

(1) £366,713.99 in respect of the SHANKLIN port engine (no. 5591660) (this is the figure obtained following an average adjustment carried out by Mediterranean Average Adjusting Company of the claim presented by Wightlink).

(2) £423,611.59 in respect of the SHANKLIN starboard engine (no. 5591661) (this is the figure obtained following an average adjustment carried out by Mediterranean Average Adjusting Company of the claim presented by Wightlink).

(3) £339,357.02 in respect of the RYDE port engine (no. 5591663) and £246,357.28 in respect of the RYDE starboard engine (this is the figure obtained following an average adjustment carried out by Mediterranean Average Adjusting Company of the claim presented by Wightlink).

In addition, storage charges have been incurred by Wightlink (of parts from the failed engines) in the sum of £21,919.22. The total claim is, therefore, for the sum of £1,397,959.10.

82. MPS contended that (1) the repair costs were not reasonable and (2) the repaired engines represent betterment for which the Claimant is not entitled to claim or for which credit must be given.
83. In relation to (1), these represent the MTU overhaul costs which costs have already been the subject of an average adjustment. No specific points were made by MPS in respect of any particular item or items of cost incurred. They simply relied on Mr Blowes' generalised evidence as to the expected overall cost of such an overhaul. That is not sufficient basis for challenging this detailed and already adjusted claim. I find that the costs claimed are reasonable.
84. In relation to (2), it is well established that no deduction is to be made from damages if there is necessary betterment due to repair – see Halsbury's Laws, Vol. 12(1) (Reissue) 4(2)(i), para. 862 and 5(1)(v), para. 983; also Bacon v Cooper (Metals) Ltd [1982] 1 All ER 397. The evidence was that if an engine has to be disassembled then it needs to be reassembled in accordance with W6 requirements. That is what was done. No attempt was made to seek to show that a particular replacement or repair carried out on that basis was unnecessary or unreasonable. No betterment case has been proved.
85. MPS had a further point that if a W5 service had taken place (as it should have done) Wightlink would have discovered any problems that the engines may have had and could have remedied them at much smaller cost and there would have been no damage of a failed engine to rectify. This appears to be an argument that the effective cause of the engine failures was Wightlink's failure to carry out a W5 service. However, a W5 would not necessarily have involved an inspection of one of the problem cylinder liners and in any event Wightlink's failure in this regard is not so unreasonable as to constitute a break in the chain of causation.
86. Finally, MPS raised a plea of contributory negligence but this has no relevance to Wightlink's contractual claim which is the principal claim advanced and the only claim actively pursued through to the end of the trial.

Conclusion

87. For the reasons outlined above Wightlink's claim fails and is dismissed.