England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
MANCHESTER DISTRICT REGISTRY
MERCANTILE BUSINESS

		15 December 2010

INTRODUCTION

1. In this action the Claimant fire service ("LFRS") claims damages against the Defendant ("Fame") in respect of its purchase from Fame of three vehicles each of which is known as a "Command Support Unit/Mobile Fire Station" ("CSU"). Each CSU consisted of a Citroen Relay 1800 cab unit and chassis which was modified to take a longer chassis on which was built the main body of the vehicle. All the conversion work was done by Fame. Photographs of the exterior one of the finished vehicles, together with some parts of its interior can be seen at 1/35-50 (ie pages 35-50 of trial bundle 1). LFRS alleges essentially that the CSUs were not fit for purpose or of satisfactory quality because (a) their intended payload could not be carried at their "plated" (ie legally permitted maximum) weight and (b) their transmissions and in particular gearbox and clutch were not powerful enough to enable them to operate properly at their plated weight with the result that there were numerous clutch and related failures. Aside from seeking damages in respect of the cost of repairs in respect of the breakdowns to date, LFRS seeks to recover the cost of replacing the existing cab units on each vehicle with different and more powerful units which in particular have a stronger transmission system. That exercise has already been carried out in respect one of the CSUs namely that originally registered as PO56 VLR now re-registered as PO59 0DR ("VLR"). The other two are registered as PO56 TVY ("TVY") and PO56 UDK ("UDK"). The original plated weight of each CSU was 5,500 kg (ie 5.5 metric tonnes – "mt") but at Fame's suggestion this was increased to 5,750 kg.

THE EVIDENCE

2. For LFRS I heard from Simon Cable, its former Head of Operational Risk Management, and the following employees: Trevor Gibson an Emergency Planning Officer, Martin Hodgson a Technical Services Manager, John Hargreaves, Head of Fleet Services, James Wallace, a fire-fighter and instructor, and Mark McCracken another fire-fighter. For Fame I heard from its Managing Director Jennie Bussandri, and its two workshop supervisors Harvey Bernstein and Scott Harris. There is an abundance of contemporaneous documentary evidence which has greatly assisted me.
3. Each side also called one expert (Mr Griffiths and Mr Rimmer respectively). With the prior consent of both parties they gave evidence concurrently as part of the Manchester Concurrent Evidence Pilot Scheme. After I asked questions of them both in accordance with the Scheme's Guidelines, they were cross-examined by Counsel. I found this way of giving expert evidence to be of particular value in this case, in terms of the Court's understanding of the issues and it almost certainly saved time and costs as well.
4. Both in respect of factual and expert evidence, many issues were narrowed in the course of the trial.

BACKGROUND

5. It is common ground that the CSUs were to have a dual function. First they would act as a command support unit at fire incidents where four or more fire engines were in attendance. Second they would fulfil a community fire safety and awareness "outreach" role by travelling to various sites, for example schools, where the public could visit them and be educated on such issues. They were intended as replacements for older vehicles.
6. Since 1990 Fame had been in the business of specialist vehicle conversions for use by public authorities such as the police, fire and ambulance services as well as local authorities and some private bodies. It has a present turnover of around £2m. Since 1991 it has manufactured a total of some 585 vehicles and on average each takes some 5 months to build. It has made some 200 vehicles with the particular cab unit supplied here namely the Citroen Relay 1800. The layout and internal design and contents of the body of the vehicle depends on the individual customer's requirements.
7. When the cab and its original chassis is supplied to Fame by Citroen it has a gross vehicle weight ("GVW") of 3.5 mt and a gross train weight ("GTR") of 2mt. This meant that the cab could pull a trailer of up to 2 mt. These were the original plated weights of the vehicle and were shown on plates on the inside of the engine housing. As a matter of law they could not be exceeded. Fame's standard procedure upon conversion of each cab and chassis was to seek to have the unit "replated" at a total weight of 5.5 mt. This would be granted by the Vehicle & Operator Services Agency ("VOSA") following the submission to it of a Form VTG10 which notified it of, and justified, alterations to the vehicle. Apart from the addition of a body the alterations entailed the creation of a longer chassis and a two axles at the rear instead of one.

THE LAW

8. Section 14 of the Sale of Goods Act 1979 (as amended) ("the Act") provides as follows:

"14. Implied terms about quality or fitness.......

(2) Where the seller sells goods in the course of a business, there is an implied term that the goods supplied under the contract are of satisfactory quality.

(2A) For the purposes of this Act, goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all the other relevant circumstances.

(2B) For the purposes of this Act, the quality of goods includes their state and condition and the following (among others) are in appropriate cases aspects of the quality of goods—

(a) fitness for all the purposes for which goods of the kind in question are commonly supplied,

(b) appearance and finish,

(c) freedom from minor defects,

(d) safety, and

(e) durability....

(3) Where the seller sells goods in the course of a business and the buyer, expressly or by implication, makes known—

(a) to the seller...

any particular purpose for which the goods are being bought, there is an implied that the goods supplied under the contract are reasonably fit for that purpose, whether or not that is a purpose for which such goods are commonly supplied, except where the circumstances show that the buyer does not rely, or that it is unreasonable for him to rely, on the skill or judgment of the seller.."

THE FACTS

Pre-contractual history

9. It is common ground that the contract between these parties arose as a result of LFRS's acceptance of Fame's written quotation dated 13 March 2006. This followed an important meeting which took place on 8 March. However in order to ascertain the particular purposes for which the CSU's were required it is necessary to examine the pre-contractual history in some detail.
10. The first significant contact between these parties came in around August 2005. LFRS had learned of Fame because it had supplied similar vehicles to the Cheshire Fire Service ("CFS"). The first quotation from Fame was on 31 August. It was based on CFS's specification but the covering letter said that Fame would be "happy to prepare a quotation and floor plan based on your own specification".
11. LFRS had in fact already drawn up a User Specification ("U.S.") setting out its requirements for the new vehicles. By 19 August Version 2 had been prepared. On 14 September LFRS sent an e-mail to Fame attaching a variety of documents including Version 3 of the U.S. I will refer to the content of the U.S.s hereafter but they all contained a list of the contents of the CSU and a specification of the IT and communications equipment which it would carry. It was intended that the supply of a large part of the computer hardware and software should go out to separate tender but the fitting thereof would be done by Fame in any event. Fame was itself invited to tender for the IT Equipment and did so successfully. There is an issue as to when and how Fame learned of the detail of some of the IT equipment to be fitted with which I deal below.
12. I note here certain parts of Version 3 of the U.S. because they remained in all subsequent versions:

(1) under the heading "Introduction" the document stated that it has specified the criteria necessary to secure a mobile fire station for delivering community fire safety education to the public and effective and efficient support of incident command. Later it said that while the vehicle has this dual functionality the primary and predominant use would be as a mobile fire station.

(2) under the heading "outcome requirements for the mobile fire station" it was said that the requirements would include among other things the provision of a facility for the dynamic deployment of personnel and equipment capable of delivering fire safety education to the public, to provide a self-contained base for sustained community fire safety activity and to provide IT and communications equipment which supports a range of passive and interactive educational programs;

(3) under the heading "outcome requirements for incident command and control" the requirements included among others the provision of effective and efficient incident command support at every stage of an incident, sufficient capacity and resilience for a range of disparate and potentially catastrophic incidents";

(4) under the heading "constraints" the document stated that "space within the vehicles is likely to be at a premium because of the [dual] functionality sought, however it is implicit that the size and type of vehicle chosen is dictated by the capability required and that this is not compromised. It is however recognised that are limitations on the vehicle size are imposed by the accommodation available at the host stations;

(5) under the heading "vehicle including exterior" paragraph 3 stated that "the vehicle cab shall provide seating for one driver and 1 additional person" and paragraph 6 stated that "the load-bearing capacity of the vehicle shall be adequate for the immediate needs of the vehicle and there will be spare capacity for any potential operational or fire safety developments".

13. I note here Mr Cable's somewhat curious evidence that in truth the predominant use was as a command unit not as a mobile fire station but nothing turns on this. Clearly Fame was entitled to proceed on what was said in the U.S. and in any event the question of breach of contract does not here depend on which was the predominant use. On any view the vehicle to be built would have the detailed dual functionality set out in the U.S.
14. The covering e-mail of 14 September 2005 listed a number of areas of concern on the part of LFRS having viewed the Cheshire vehicles. One of them was about weight capacity which they had understood from Cheshire to have been a problem and it was felt that LFRS would require more equipment than Cheshire. Another concern related to the noise of the generator and it was noted that the LFRS team had seen a diesel generator which had a low noise level.
15. Fame responded to this by its letter dated 23 September 2005. It answered the concern over weight capacity by saying that the finished weight of the relevant Cheshire vehicle was 4980 kg and the problem there had been a slight overload on the front axle. This was the result of a change from the initial specification by adding an item weighing about 80 kg which would have been positioned further back on the vehicle had been known at the beginning. So Fame was reassuring LFRS over its weight concerns here. As for the generator, Fame said that it could not fit the diesel generator because it together with the water required for the water cooling system would be "weight prohibitive". Instead it would fit an air cooled generator. The only other reference to weight came in paragraph 5 of that letter which dealt with a separate air supported structure which was to be stowed on the vehicle at a weight of 65 kg. The concern was not as to the weight itself but where it would be stowed in the vehicle and how it would be handled manually. With this letter Fame included its initial floorplan for the CSU. A revised floorplan was sent on 28 September. Both show what was at that stage half-height racking intended for IT equipment in the top left of the plan at, for example, 4/1334.
16. By a letter dated 10 October 2005 to Mr Taylor of LFRS, Fame raised a series of questions arising out of version 3 of the US. Mrs Bussandri accepted in evidence that by then she had read version 3.
17. There was then a further meeting on 26 October. It is common ground that by this meeting LFRS wanted to increase the height of the racking to full-height and move the printer. This is referred to in LFRS's manuscript notes of the meeting and also the revised plan with Mr Hodgson's annotations on it at 4/1239. In fact the decision to go to full-height may have been taken initially at an earlier meeting attended by Mr Cable on 9 October. But either way, there is no evidence that Mrs Bussandri or anyone else at Fame expressed any concern at this change. Mr Hodgson and Mr Cable denied that it did so and it is common ground that thereafter the CSUs were built with the full-height racking. Although Fame did not know exactly what would go into that rack in terms of equipment it must have known that it might be utilised to the full (otherwise LFRS would not have asked for it) and anyway the equipment which was to go into the CSU (including on the racking) was known before the contract was made (see below).
18. Indeed in cross-examination Mrs Bussandri accepted that she agreed to this alteration and did not indicate any problem with it at that stage. The final agreed internal plan included the full-height racking sited over one of the front axles, as she accepted – see 4/1248-1249.
19. On 14 February 2006 (4/1364) Mr Taylor sent to Fame a copy of the IT specification for which suppliers would be invited to tender. He said that "I have forwarded these to you immediately in order that you can determine the feasibility and cost of installation of the specified items in the vehicles. It is anticipated that you will provide us with a specification drawings and fixed price for the vehicle in accordance with the PITO contract for earlier ordering ..." In fact this specification had been produced initially with the assistance of a consultant engaged by Fame. The specification itself is to be found at 4/1255. It goes into considerable detail as to the hardware and software to be supplied. As noted above, LFRS's IT requirements were themselves summarised in the U.S. It is now suggested that this specification was only sent on 16 March 2006 but I do not follow that since the relevant e-mail is clearly dated 14 February. I accept that the final version of the specification to be the subject of the tender may not have gone out until 26 May 2006, when the formal tender documents were issued but there was no detailed evidence put before me to show that there was any change in requirements which had a significant impact on weight. And as will be seen below, when it actually came to saying what items of IT equipment were heavier than expected, and how, Fame's evidence turned out to be very limited indeed.
20. It therefore follows that before the contract was made with LFRS Fame knew in sufficient detail, the nature and extent of the IT equipment to be installed within the vehicle. That is subject to one qualification concerning the nature, size and weight of the hard drives actually supplied and I deal with that matter below.
21. At all material times prior to the making of this contract both parties knew that each vehicle would have a plated weight of 5.5 mt. This was the standard weight of the conversions being supplied by Fame and it therefore knew that the requirements of LFRS as notified to Fame would have to be accommodated within that weight. Fame also knew that the vehicle supplied should have some spare capacity because of what was stated in the US. That could only mean that the vehicle supplied when fully loaded should not be at the maximum of 5.5 mt.
22. At one stage in her evidence Mrs Bussandri accepted that she knew by reference to the IT Specification at 4/1255 what had to go into the CSUs but could not tell what its weight was and would have to wait until the build process to see if it could be accommodated. And Fame would use its experience. If that really was Fame's approach then it was taking a considerable risk. It was not a risk to be borne by its customer in the absence of a very clear qualification to the customer's expectations – which was not given.
23. In the course of her evidence Mrs Bussandri accepted that at no stage before the making of the contract did she indicate to LFRS that there may be a problem over the weight of the vehicle in terms of it being able to accept all of the items to go on it.
24. On 8 March 2006 there was a meeting between the parties at Fame. A note of the meeting, compiled by Mr Hodgson is at 4/1246-1247. The accuracy of that note has not been disputed. In the second bullet point he records "vehicle plated to 5.5 tonne, weights are close to the limits but should not be a problem." He says that this is what Mrs Bussandri told him and she agreed in evidence that that she did.
25. Fame makes the general point that it was for LFRS at all times to specify the weight of all the items to be contained within the CSU. I disagree. Fame was undertaking to supply a vehicle to cater for LFRS's needs at a particular weight, as it had done for many customers in the past. And on any view it knew the weight of the cab and chassis and the basic shell of what it was to provide, whereas LFRS did not. If Fame was unsure as to weight in any material sense it was for Fame to qualify its obligation or at the very least to make clear that the vehicle might not accommodate all of LFRS's requirements or simply to get LFRS to provide a list of weights. None of that was done. Instead, Mrs Bussandri positively assured LFRS that weight would not be a problem. (See paragraph 24 above.) And she accepted that in this regard it turned out that she was wrong.
26. Version 6 of the U.S. was supplied to Fame on 11 March 2006.
27. The quotation came on 13 March 2006. It sets out in detail the nature and design of the vehicle together with all the items to be supplied in it. So far as the IT equipment was concerned this was dealt with at page 7 where the quotation stated that it included the work required to accommodate the "free issue" computer equipment. The total cost of each vehicle was £116,681. One optional extra was the separate Air Shelter which would be stowed on the vehicle at a unit cost of £7975. In the event this was not purchased.
28. The quotation was sent under cover of an e-mail and was described as "the final edition of our Quotation for the vehicles. We believe we have now covered everything.." In my judgment that must be a reference to accommodating LFRS's requirements, although Mrs Bussandri was not willing to accept that characterisation.
29. LFRS accepted the quotation by its Purchase Order dated 20 March 2006 at which point the contract was made.
30. On the statements of case and in opening written submissions it was submitted on behalf of Fame that the various versions of the U.S. supplied to Fame were of no contractual significance. It was pointed out that no reference thereto was made in the quotation. But that does not mean that the U.S. was not of significance in relation to the making known to Fame of the purpose for which these vehicles were required. I quite accept that IT and radio equipment apart, the quotation is definitive as to what Fame was obliged to place within the vehicle. But that does not exclude an obligation on the part of Fame to ensure that the vehicle was fit for the various purposes enunciated in the U.S.
31. Indeed in cross-examination Mrs Bussandri accepted that the obligation on the part of Fame was to build a vehicle according to the customer's specification. This was subject to the obvious point that Fame were not obliged to supply a particular item which for example had been requested by LFRS in the specification but not then the subject of the quotation (insofar as there was such a discrepancy). Mrs Bussandri was taken to Version 6 of the U.S. specifically. She accepted, for example, that the vehicle had to provide sufficient capacity and resilience for a range of disparate and potentially catastrophic incidents. She also accepted that the vehicles had to be capable of being housed in the nominated fire station appliance bays at Fulwood. Blackburn and Lancaster. She said that Fame's quotation was based upon version 6. She was taken to paragraph 3 of the section dealing with the exterior of the vehicle and the reference to the provision of seating for one driver and one additional person. She agreed that the vehicle had to supply seating for two people and accepted that it had to be able to carry two people. Insofar as Mrs Bussandri was drawing a distinction between providing a vehicle with seats for two people and providing one which at least for some of the time would be carrying two people I reject that distinction. There is nothing in the quotation which suggests that the vehicle was being supplied for a driver only and version 6 makes it plain that there may well be a passenger. It must follow, therefore, that one of the purposes for which this vehicle was required was an ability to operate at within the plated weight on the basis that there would be one driver and one passenger.
32. Mrs Bussandri was then taken to the other items on the very detailed list which is set out in Version 6 concerning exterior and interior items at 1/164-170. She said that when Fame was quoting, she knew that all of these things would have to go onto the vehicle at a plated weight of 5.5 mt.
33. Mrs Bussandri said that although not documented there were conversations with LFRS whereby they were warned that the vehicle as built might reach or possibly exceed the plated weight but she accepted that no such warning was given before the contract was made.
34. In my judgement, and by reason of s14 (3) of the Act these vehicles had to be reasonably fit for the following purposes which were made known to Fame either expressly (through the U.S.) or impliedly:

(1) To be operated in a satisfactory manner with all the items listed on the Quotation loaded upon them and the IT and radio equipment referred to in Version 6 of the U.S. and in the IT Specification, together with a driver and passenger;

(2) The vehicles also had to be operated legally with that payload. In this case since the plated weight was 5.5 mt, the vehicles so laden could not exceed that weight;

(3) The payload referred to above would also include a full tank of petrol and a full load of water required for some of the equipment to be provided, namely the water tanks for kitchen and toilet flushing use and comestibles like paper.

35. In addition, in my judgment, by reason of s14 (2) – (2B) of the Act, in order for the CSUs here to be of satisfactory quality they would have to fulfil the purposes set out above. The "other relevant circumstances" referred to in s14 (2A) would clearly include Version 6 of the U.S.

Building the vehicles

36. Fame has alleged that during the process of building the vehicles LFRS effectively required the addition of certain items which then led to the vehicles being close to or possibly over their plated weight. The major item focussed upon here was the IT equipment. Although Fame won the IT tender there was still some equipment which was going to be supplied for installation by LFRS. Mrs Bussandri said that when the IT equipment actually arrived some of it was much heavier than could have been expected from Version 6 of the U.S. or the IT Specification. In the end this complaint was confined to the hard drives. These were contained in separate boxes to be stowed on the floor. As installed, they can be seen beneath the work surface at 1/44. Mrs Bussandri said that by 2006 she would have expected them to be smaller and more compact and housed within the monitor unit. I do not see anything in this point. Version 6 and the IT Specification do not suggest that this is how they would arrive and indeed Version 6 refers separately to flat screens as does the IT Specification – see 4/1260. There is no material before me to suggest that the nature of the hard drives supplied was such that it was obviously outmoded to the extent that Fame could not reasonably have expected them to take this form, insofar as their form was not already dictated by version 6 and the IT Specification. Nor is there any evidence that the size or weight of the hard drives was ever raised as a problem with LFRS at the time either in writing or orally. Nor is there any evidence as to the extra weight which hard drives in this form entailed.
37. Mr Bernstein and Mr Harris both asserted that some of the IT Equipment was outdated or antiquated but I did not think this took the matter any further. There was no real detail given and Mr Bernstein said that he would have to have provided for the equipment going in being old or new. Mr Harris in evidence said that some of the radio and other equipment that turned up was bulky and other vehicles, he thought, used smaller radios. But without more, that cannot begin to suggest that there were substantial additions to the weight of the vehicles which were requested and which Fame could not be reasonably expected to have contemplated. Nor did Mr Bernstein or Mr Harris express any concerns over weight to LFRS at the time.
38. A further point was made about the racking but the fact is that before the contract was made Fame agreed a layout plan on the basis of full-size racking and never suggested it should not be filled with equipment. Nor was there any suggestion prior to delivery of the vehicles that the racking itself should be moved further back in the vehicle. Fame's e-mail of 16 May 2006 at item 11 refers to the racking but not to seek a change (because of its anticipated loaded weight) – rather to say that Fame did not wish to comment on further storage space until all of the equipment had gone into the racking. In cross-examination Mrs Bussandri accepted that she was not indicating any problem with the racking itself or its location.
39. Mrs Bussandri did say that at a meeting with Mr Marshall on 21 September 2006 she raised concerns with him over weight but if so it was not raised when Lynn at Fame e-mailed LFRS shortly after, on 29 September and in any event, there is no evidence that any concern that might have been expressed was due to some additional item requested by LFRS.
40. Having considered all of the evidence I am quite satisfied that if a weight problem with the vehicles was to emerge (as it did) this could not be attributed to some variation of the contract whereby further items were added. Moreover in the absence of any request by Fame not to be held to the 5.5 mt plated weight as a result, it is hard to see why that should not continue to apply.

Events in November 2006 – early 2007 and replating

41. The VOSA plating certificates at 5.5 mt for vehicles TVY and UDK are dated 30 October 2006 and the certificate for VLR is dated 20 December. TVY was delivered on or about 12 November. A weight ticket for it dated 3 November records a gross weight of 5.420 mt. UDK was delivered on about 18 December. Its gross weight according to a weight ticket dated 14 December is 5.460 mt. Vehicle VLR was delivered on around 3 March 2007. Its weight ticket dated 26 February 2007 gives a weight of 5.540 mt.
42. It is common ground that none of those recorded weights include provision for a driver, full tank of fuel or tank of water. On any view if these items were added, vehicles TVY and UDK would then exceed their plated weight. Even before adding these items vehicle VLR was above its plated weight. The normal allowance which Fame makes is 80 kg for the driver, 40 kg for water and 80 kg for fuel. This comes to 200 kg. A passenger would add another 80 kg. If these were added TVY would weigh 5.7 mt, UDK would weigh 5.74 mt and VLR would weigh 5.82 mt.
43. It is common ground that all three were "replated" to 5.75 mt by around April 2007. What this means is that their maximum permitted weight was raised. The evidence of the LFRS witnesses is that when the first two vehicles were delivered they had not appreciated that they were weighed without payload and so might be over the plated weight operationally. Fame had not told them of the basis on which they had been weighed. As for VLR its weight ticket was not seen prior to delivery. Mr Cable says that when discussing arrangements for the delivery of VLR Mrs Bussandri offered the option of replating upwards to allow for capacity for developments in the future. Mr Gibson says that he was made aware of this opportunity at the "sign-off" meeting for VLR on 28 February 2007. Again it was put on the basis of spare capacity. Mr Hodgson was also present on that occasion and says that Mrs Bussandri offered this opportunity to Mr Cable and himself while on the shop floor of Fame's premises. They all agree that they decided to take up this opportunity and would pay the relevant fees as required by Fame. Its invoice to LFRS for the uprating is dated 28 February and by an e-mail dated 9 March Lynn at Fame requested Mr Hodgson to let Fame have back the original certificates in order that the replating can be done. A new "converter's plate" certificate for each of the three vehicles was issued by Fame's specialist engineers, was issued on 16 April 2007 (4/1503, 1509 and 1515). At the bottom right-hand corner of each is a copy of the new certificate as it would be attached to the engine.
44. Fame's case is that this matter was not or at least not only raised on 28 February but in fact had been raised by Mrs Bussandri back in November 2006. She said that she had a discussion with Mr Andrew Marshall, another employee of LFRS. She told him that she was concerned that the vehicles may be overweight on delivery and so they should uprate and Mr Marshall agreed. Mr Marshall is no longer with LFRS and neither side called him as a witness.
45. In aid of Fame's case here I was referred to three DVLA forms known as V112G. Those for TVY and UDK were signed by Mr Marshall. There is no date for the signature but the form is said to relate to vehicles to have a vehicle excise licence to start from 1 November 2006. The third form, for VLR, is signed by Mr Hodgson and refers to a licence to run from 1 December. Mrs Bussandri says that all three were signed at the same time and they prove that uprating was discussed and agreed then because the only reason for filling out that form was in anticipation of a future uprating.
46. Both experts gave agreed evidence about such forms. It is as follows: if a vehicle is exempt from Goods Vehicle (Plating and Testing) Regulations 1988 ("the Regulations") it means that first, such vehicles are not subject to the equivalent of an annual MOT test. Second, and as a consequence proof of passing such a test is not required in order to obtain a vehicle excise licence. Third if alterations are carried out to such a vehicle or if its owner simply wishes to raise (or reduce) its plated weight, then this can be done without involving the vehicle in further testing undertaken by or on behalf of the DVLA. What would still be required would be a certificate from an authorised contractor to the effect that with such alterations the vehicle can still properly be driven at that weight or at such other notified weight. Both experts agree that the SV Tech certificates dated 16 April constitute such a document. And those certificates do indeed refer in terms to vehicles exempt under Form 112G.
47. It is common ground that the CSUs here would be eligible for exemption probably under paragraph 14 of Schedule 2 of the Regulations. But the fact that the Forms 112G were filled in at the end of 2006 (if that is the right date) does not irresistibly mean that their purpose was to enable speedy uprating. Mr Hodgson for his part denied filling out the Form 112G because of uprating. He was not sure whether he signed it before 1 December but said that in any event he did it because it would exempt the vehicle from MOT testing. LFRS did not need such testing as they tested their vehicles to their own high standards anyway. He accepted however that there were other meetings involving representatives from LFRS at which he may not have been present.
48. It was put to Mrs Bussandri that she was wrong in asserting that all of this was discussed and agreed in late 2006 and that she was only saying this now because the evidence showed clearly that the vehicles were or would be, once laden, in excess of the agreed plated weight of 5.5 mt. In addition to relying on the Form 112G she also pointed to the fact that on 8 February 2007 a Mr Hughes from mi Technology Group wrote to a Mr Underwood at VOSA seeking to justify an increase in plated weights to 5.75 mt. Had this been as a result of a specific agreement to uprate these three CSUs this would be strong evidence that this occurred, on any view, before 28 February. But in fact it transpired that Fame was also considering such an uprating scheme for other vehicles in any event, including those supplied to Cheshire. It was not specific to those ordered by LFRS. Moreover, save as a matter of good practice it was not clear to the experts why such a letter was needed: if the vehicles were exempt under Form V112G specific approval was not required from VOSA. The letter of 8 February was chased by an e-mail of 12 February from Mr Marsh at SV Tech, Fame's appointed engineers. This referred to a conversation the previous week with Mr Underwood. It recorded that Mrs Bussandri had had "about 6 vehicles built for police and fire applications that were slightly above their required weight." Mrs Bussandri said that there were about 10 vehicles in total being considered for replating and so it is not clear if the 6 referred to here even included the CSUs being supplied to LFRS.
49. In the e-mail of 12 February, confirmation was sought that they could safely increase without the need for a retest on the basis that they would all have passed a test for 5.75 mt at the time when vehicles like this were tested for 5.5 mt on conversion back in 2002. The response was that Mr Underwood had no objection provided that a further re-test at a goods vehicle testing station would be required for those vehicles subject to plating and testing. That appears to refer to non-exempted vehicles.
50. I do not see anything in that correspondence which indicates that Fame must have discussed uprating the three CSUs in question with LFRS prior to the signing of the Forms 112G. Indeed given the date of the invoice to LFRS and the later certificate I think that the documents point to the matter only having been agreed in late February. On this point I prefer Mr Hodgson's evidence to Mrs Bussandri's. It makes sense and is corroborated by the evidence of Mr Cable and Mr Gibson albeit that they are fellow employees. I appreciate that Mrs Bussandri vigorously denied placing the date of the agreement to uprate in late 2006 to avoid the accusation that she let at least two of the vehicles go knowing that they would be overweight but her emphatic reliance on the logic behind the Form 112G turned out to be misplaced and I found her evidence on occasion to be somewhat too dogmatic, for example over the allegedly unknown or unforeseen computer equipment which, on closer analysis did not bear scrutiny. I also note that in her letter dated 7 November she wrongly asserted that TVY's plated weight when delivered was 5.75 mt which is not correct, and that LFRS immediately asserted that the replating offer did not come until the following year. See paragraph 83 below. Furthermore, according to her witness statement she actually told representatives (plural) of LFRS at visits on 6 7 and 8 November 2007 that all three vehicles would be overweight once the driver and other payload was added. But none of the representatives who gave evidence agreed and Mr Marshall was not a witness. And if this was agreed then I cannot understand why the process was not started at once. Otherwise LFRS would have to operate the vehicles at less than full load in the meantime. Mrs Bussandri said that once the V112G was signed the vehicle was exempt from the plated weight but that was not what the experts said. Replating still required a certificate from a body like SV Tech.

Emergence of weight issues

51. The three CSUs were operated by LFRS on the assumption that they were within their plated weight of 5.75 mt. However in August 2007 it became apparent that they were in fact in excess of that weight. One of them came in at around 6 mt as against the weight on the ticket of 5.54 mt. See the e-mail dated 27 July 2007 and on 8 August Mr Gibson weighed another CSU which came in at 5.89 mt. He informed Lynn at Fame of these issues that day. Mr Gibson said that the third CSU was significantly above 5.75 mt and I assume at the same order of weight as at least the CSU that came in at 5.89 mt.
52. The excess over the ticketed weight can be explained first by the addition of two personnel. Mr Hodgson's view was that while Fame has said that an allowance of 80 kg should be allowed for a driver this was an underestimate as far as fire-fighters were concerned even if they did not have with them the full kit and equipment which might have been present on a pump. It would be more like 90-95 kg. With water and fuel and comestibles that payload could explain 300 kg of the difference. There were then some additional items that had been added by LFRS since delivery – Mr Ian Taylor of LFRS produced a list in an e-mail dated 2 August – this was part of the radio equipment which LFRS knew would be added. Mr Hodgson also said that one of the fixed antennae assemblies was added in the summer of 2007. This would appear to be something other than what was on the e-mail of 2 August. In addition there was a new extra which was a remote repeater assembly to assist with radio transmissions to and from the radio antennae on the CSU where the signal was weak. Storage for this was not part of the U.S.
53. On the face of it, and even making a modest allowance for items added by LFRS which Fame could not have reasonably expected to have been added either at all or at their particular weight, the CSUs exceeded their replated weight.
54. In order to bring the weight down below 5.75 mt LFRS removed some of the payload. First they required that only one person be in the vehicle when it was driven. That cannot be regarded as immaterial even if a passenger was not always required or carried. Mr Hargreaves said that the latter would play a role in mapping the route to an incident or operating the radio and play a general communications role. In an emergency satellite navigation is not a substitute. In any event where a vehicle is required to transport two people it would require very persuasive evidence indeed to show that its inability to do so is immaterial or involves no loss of functionality. There is no such evidence here. See also the opening paragraph of Mr Gibson's e-mail of 6 September 2007. In my judgment even if the only loss of the expected payload was the passenger, that was itself a serious matter and would obviously render the CSU's unfit for the stated purpose of carrying two people..
55. Second the awning which was to be carried on the vehicle and then affixed to its side when in use with TV and other equipment was removed. It appears that it did not in fact work very well – see the e-mail from Mr Gibson of 6 September 2007. As it turns out, therefore, there was no real loss of functionality here and it was not suggested that the solution would necessarily require the same weight to be carried as the awning.
56. Then a TV stand and "umbilical cord" for it were also removed. They were needed but would be on a separate vehicle. I can see that provided the other vehicle was always in attendance when the CSU needed the external TV, there was no overall loss of use but on the other hand these were items intended to be carried on this particular vehicle and I cannot discount their removal altogether.
57. Fourthly the remote repeater assembly was taken off to be relocated on another vehicle.
58. Finally a table and four of the chairs were to be removed and if needed would have to be transported to an event or incident another way. But the ability to get them there in another vehicle does not mean that there was no loss of functionality of CSU. In my view there was.
59. Mr Cable added that some of the items removed that were intended to go on a pump vehicle could not in fact do so because it had no room.
60. In his e-mail of 8 October dealing with the removal of items Mr Cable said that there was no loss of functionality. But as he said in evidence while functionality could be maintained by removing items into other vehicles this was not what they wanted originally – which was for them to be in one vehicle – as made known to Fame. It was a compromise they should not have had to make. Furthermore his e-mail is predicated on the basis that the upshot would be that they could carry the second person. In the event this proved not to be the case.
61. Fame also points to another part of Mr Gibson's e-mail of 6 September where he said that with the items removed the vehicle could "operate as originally envisaged". But it does not follow that this means that the removed items were in fact immaterial. I suspect it refers to then being able to carry two people. Moreover he was not cross-examined about this particular observation. In my view it does not assist Fame.
62. It is argued that the 19" racking could have been relocated within the CSU after the event. But even if this were so it cannot alter the fundamental problem of gross weight.

Transmission problems

63. Both before and after the removal of these items there had been complaints by drivers that the CSUs felt underpowered to drive and sometimes they required much effort to stop. Mr Gibson said that on a hill it was necessary to slow right down and change gear more than usual. Mr McCracken said much the same thing. He also noticed a burning smell which he thought was the clutch burning especially on hills.
64. Then from October 2007 onwards there were numerous breakdowns: on 30 October, TVY required a new clutch at 3953 miles. On 19 May 2008 a second clutch had to be fitted at 5726 miles and on 27 January 2009 the clutch and engine mountings were found to be defective, at 8395 miles and on 5 November 2009 the clutch was replaced yet again. Various knocking noises were heard from the rear of the vehicle as well. On 28 July 2008 a new clutch had to be fitted to UDK at 6969 miles and the clutch was replaced again on 7 November 2009 at 12,525 miles. On 4 October 2007 a replacement clutch and exchange gearbox had to be fitted to VLR at 3572 miles. Further details of the breakdowns, including cost, are set out in the schedules at 1/291-293, deposed to by Mr Gibson and which were not challenged.

The likely cause of the breakdowns

65. I heard expert evidence on this point. Mr Griffiths appeared for LFRS and Mr Rimmer for Fame. In the end there were few occasions where there remained a direct contest between their opinions but I should record that overall I thought that Mr Griffiths was somewhat clearer and more authoritative than Mr Rimmer, which may be due to the fact that the former appears to have more experience and expertise in purely mechanical engineering matters.
66. I consider first the issue of performance at 5.75 mt. This was the weight of the CSUs when all the clutch breakdowns occurred.
67. Mr Griffiths' overall view was that this number of clutch failures over three vehicles at unexpectedly low mileages cannot be dismissed as coincidence. Rather, it shows that on a balance of probabilities, the transmissions of the CSUs, including their clutch and gearbox, were not sufficiently robust to take a weight of 5.75 mt. He said that a normal clutch life could be expected to be around 60,000 miles.
68. Mr Rimmer did not agree with that view but in the end said that he could not commit to any one other explanation for these breakdowns. Originally he saw as one contributing factor the slope at Fullwood fire station where TVY is based but he readily accepted that there was nothing in this point once it became clear that the angle of the slope into the station had been changed in May 2006. See the correct diagram at 4/1539 and the photograph at 4/1532.
69. A second possible explanation was the fact that TVY may have been used for intensive driver training with a resultant wear on the clutch. In fact there was no evidence that this was so and none of LFRS's witnesses were cross-examined to this effect. Moreover, Mr Griffiths said that training would involve normal manoeuvres and given that all those who were trained were already experienced HGV drivers, one would not expect them to damage the gearbox in the course of training. On the question of training generally, although Mr Rimmer did not allege as a separate cause, inadequate training, there was specific evidence from Mr Wallace who worked as an instructor for LFRS and trained drivers on the CSU. His witness statement at 1/300B-D explains that all those who drive the CSUs have been given specific training which includes driving the vehicles in a variety of conditions and this would include low speed manoeuvres. The driver would either pass or fail. At 4/1540-1567 are training records showing the elements of the training that must be completed and passed, signed by the instructor. Extracts from TVY's log book has also been produced to show, by way of example, that none of the drivers listed therein had not been trained. Clutch control was covered under the heading "varying traffic drive". As far as Mr Wallace was concerned even if the fire appliances were automatic the drivers he trained were used to driving manual vehicles – but if they changed gear incorrectly he would tell them. And Mr McCracken, as an example, found no problem in changing, or attempting to change gear manually. There is no evidence that the problems here were caused by drivers mis-managing gear changes – just because they tended when on other duties to use an automatic vehicle.
70. Mr Rimmer's only other suggested explanation was general bad driving by the operatives. They might miss a gear or change down too quickly causing the application of a high torque and a catastrophic clutch failure. But if they had had the training, this was unlikely and Mr Rimmer accepted that this would reduce the risk. Mr Griffiths saw the prospect of damage this way as unlikely, given that they were competent drivers using synchromesh gears. If one used the gears as a brake going from high to low speed it could damage the clutch but this was really driver abuse. It also needed to be remembered that this type of cab was used by all manner of drivers for example those delivering flowers and usually there would be no problem. In my view this other explanation from Mr Rimmer should be rejected.
71. Citroen, as the manufacturer of the cab, was asked whether the engine and drive were capable of operating at a gross weight of 5.75 mt. An e-mail from Mr Page at Citroen dated 21 April said that if the cab was a "40" (ie 4 mt not 3.5 mt as in our case) that would be 1745 kg over the designed weight (here it would be 2.25 mt above the design weight) and performance would certainly be reduced. And it certainly would not extend the vehicle's life expectancy. Therefore, and unsurprisingly, Citroen's view suggests that performance at this weight would be reduced.
72. Ultimately Mr Rimmer was bound to accept that in the absence of his explanatory factors the transmission must be to blame. I reject those explanations because they are simply implausible for the reasons already given. His only further point was to question whether the clutch/gearbox problems have continued but this was not the subject of evidence or investigation at trial and the fact is that for two of the vehicles the problems were still appearing in November 2009, some 3 years after delivery. He also said that he would like to have had very much more specific evidence on the particular type of clutch failure but this was not something sought at an earlier stage and I and the experts must proceed on what we have.
73. Fame suggested in its closing submissions that the only logical explanation for the problems is the fact that the CSUs were in fact being driven as emergency response vehicles in the same way, and at the same speed, as ordinary fire engines. But there is no evidence of this and Mr Rimmer did not suggest it. The thrust of LFRS's evidence was in fact that the drivers were trained to use the CSU's in the more limited "blue light" role in terms of moving through and negotiating traffic as opposed to driving at high speed.
74. In my judgment it is quite clear that the CSUs could not be driven properly or adequately at 5.75 mt because the transmission was simply not strong enough and I accept Mr Griffiths evidence in this regard.
75. There is a second question as to whether CSUs were in fact capable of operating at 5.5 mt. There is no direct evidence of this since the breakdowns occurred by the time they were at 5.75 mt.
76. However there is first the evidence of what happened to the 6 vehicles supplied to FOCSA Services UK Limited ("FOCSA"). These had the same cab but a "flatbed" over the chassis and were used for refuse collections with variable loads. They experienced a very large number of clutch problems which are set out at paragraph 1.11 of the second joint statement of the experts. The matter was litigated and Fame, through its insurers settled FOCSA's claim at £300,000. Mrs Bussandri said that they had no involvement in such settlement discussions and did not even attend the mediation at which they took place. The existence of the FOCSA litigation was not disclosed by Fame in this case and specific disclosure was only sought by LFRS earlier this year when it found out about it from other sources. I appreciate that Mrs Bussandri says that she could see no connection between the two cases not least because the FOCSA vehicles were flatbeds and they carried varying loads (of refuse) but I think that she underplayed its significance especially given the outcome. I also consider that to say as she did in paragraph 69 of her witness statement that "there are hundreds of Fame conversions still in everyday operation ..rated at 5,500 kgs without any problems." is overstating it, given what happened at FOCSA. That said, I accept that there was no final determination in the FOCSA case and the papers produced did not extend to any expert reports. Any consideration of that case must necessarily be limited and proportionate.
77. The experts here proceeded on the basis that the problems occurred when the FOCSA vehicles were being drive generally below 5.5 mt. Mrs Bussandri said that there was evidence of use at above this weight but both parties confirmed at the start of the trial that the Court should proceed on the same basis that the experts have. In the end they agreed that one consequence of making a single unit at 5.5 mt out of a cab originally rated at 3.5 mt but with the ability to pull a trailer at 2 mt was this: there would now be one centre of gravity not two, such that there will be less weight on the front axle when going up a hill which can cause wheel spin (complained of by FOCSA drivers) and too much weight on the front axle if the vehicle was facing downhill and needed to reverse up. Both of those phenomena would require hard work on the gears and could cause early wear.
78. At this point one needs to return to the e-mail from Citroen referred to above. On the question of 5.5 mt Mr Page said that he did not see any problem with the engine and drive train going up to that weight because, after all, "if the vehicle was towing a trailer it would be expected to pull up to the GTW without a problem." However that does not address the specific point considered by the experts, namely performance on hills. In any event as both of them recognised the communications from Citroen are so brief that they are of limited assistance.
79. One also needs to consider Mrs Bussandri's general point that Fame has sold hundreds of these units without any problem. But unless the detail of their operation and weight is compared it is difficult to derive much from this. Indeed she said that on average the units sold tended to run at about 4.8 mt. But that is considerably below 5.5 mt let alone 5.75 mt.
80. In my judgment the likelihood is that problems may occur if vehicles such as those supplied to LFRS are operated at or very close to 5.5 mt. And the more one exceeds that weight the more likely that is. The FOCSA evidence is thus indirect support for the conclusion that the problems experienced at 5.75 mt are clearly due to an inadequate transmission for that weight.

BREACH OF CONTRACT

81. Against the facts as found above I conclude as follows:

Transmission performance

(1) The CSUs were not of satisfactory quality nor were they reasonably for their purpose of being driven on the roads at a plated weight of 5.75 mt; although the contract provided for vehicles with a plated weight of 5.5 mt, once it was agreed that there would be replating, the contract must have been impliedly varied or a separate warranty given, so that Fame's obligation was to supply vehicles fit for driving at 5.75 mt. Given that Fame (on any view of the evidence) suggested this course and LFRS would obviously not have gone ahead if they were told that the CSU's would not run properly at that rate, this analysis cannot be in doubt. Nor has it been asserted that if the transmissions were to blame for the breakdowns Fame would not be in breach of contract;

(2) I do not find that the vehicles were necessarily unfit if the load had been 5.5 mt. But in the light of the above, this does not matter;

(3) The breach can also be expressed this way: I am quite satisfied that 5.75 mt is the minimum weight of the CSU laden with all the equipment and items which were necessary for the requirements set out in Version 6 and made known to Fame. Regardless of plated weight, it was obliged to supply a vehicle which could be driven in a satisfactory manner at that payload. For the reasons given above it did not;

Weight

(4) In addition the CSU's were to be fit for the purpose of legally carrying LFRS's requirements and with spare capacity on top. See paragraph 6 of Version 6 at 1/165. Whether supplied with a plated weight of 5.5 mt or 5.75 mt they were not; they were not of satisfactory quality either;

Misrepresentation

(5) By reason of the Quotation referring to a plated weight of 5.5 mt and/or Mrs Bussandri's statement at the meeting on 8 March 2006, Fame represented and/or warranted that LFRS's required payload could be carried within a plated weight of 5.5 mt; that representation was false and there was a breach of that warranty.

EVENTS IN OCTOBER AND NOVEMBER 2007

82. There was a meeting between LFRS and Fame on 9 October 2007 to discuss weight issues. The options of re-cabbing and reworking the interior were discussed. The latter was rejected by LFRS and reasonably so in my judgment. It would not have solved the essential problems especially in the light of what then transpired were the mechanical breakdowns. By a letter dated 11 October, LFRS asked Fame to cost the re-cabbing and this produced the estimate given in a letter dated 26 October 2007. By its letter dated 29 October LFRS asked Fame what its financial contribution should be. It proposed that Fame should pay subject to a £5,000 contribution per vehicle from LFRS as a gesture of goodwill.
83. On 7 November Fame wrote to say that it would make no contribution to the re-cabbing. It also stated (incorrectly) that the first vehicle left Fame's premises "having been weighted at 5420 kg against its plated weight of 5750 kg." On any view it had no such plated weight then. It was not replated until April 2007 at the earliest. LFRS responded on 16 November challenging Fame's position and saying that the option to replate was only offered at the time of sign-off of the third vehicle ie 28 February 2007. Thereafter the matter became litigious.

REMEDY – THE DAMAGES CLAIM

Introduction

84. LFRS claims damages for (a) the costs incurred in repairing/replacing the clutches and other items which failed and (b) the cost of putting new more powerful cabs onto the CSU's chassis so that they support the payload to which LFRS is entitled. I consider this by reference simply to the breaches of the implied terms under s14 of the Act. It is not necessary to consider any remedy that may be available for misrepresentation (rescission, for example, is unsurprisingly not claimed) nor whether there were additional express terms based upon the U.S.

Mitigation of loss - the replating at 5.75 mt

85. There can be no argument that LFRS in fact mitigated its loss as to payload by agreeing to replate at 5.75 mt. First the mechanical problems were clearly in evidence and caused by that weight. Second, even at that weight parts of the payload were missing in particular the passenger.

Repair Costs

86. These total £10,268. The only point raised by Fame here is that some or all of these costs might have been avoided if LFRS had made claims on the Citroen warranties which came with the vehicles. It is common ground that Citroen did in fact replace the clutches on the first failures of all vehicles. But thereafter as Mr Hargreaves explained LFRS's operational requirements were such that they wanted to organise speedy repairs themselves and even though Citroen were very helpful it was unlikely they could do the repairs as quickly especially as their garages were principally dealing with cars. LFRS did not want to have any of the CSUs off the road longer than necessary. Moreover there is no evidence that Citroen would in fact have honoured any later claims – it is not a foregone conclusion especially as the vehicles were at 5.75 mt. In my judgment it cannot be said that LFRS acted unreasonably in commissioning their own repairs.

The Replacement Cab

87. The sums claimed here are:

(1) The cost of 3 new cabs at £15,978.12 each including VAT;

(2) The cost of converting each of the cabs at £23,905.38 including VAT

making a total of £119,650.50.

88. The first point made by Fame here is that LFRS could and should have mitigated its loss by re-working the interior of the CSUs instead. But quite apart from the fact that LFRS was entitled to have them in the form and design specified, any such reworking would not have solved the gross weight or performance problems. So the fact that the cost of re-cabbing is "disproportionate" to the cost of re-working is not relevant.
89. It is then said that LFRS's damages should be reduced by £19,117.62 being the net credit which Fame would have given LFRS for the return of the old cabs, as opposed to treating them as scrap. But any credit for them was only offered by Fame as part of a deal where LFRS would purchase the new cabs from them, Fame at that stage not accepting any liability. See its letter dated 26 October 2007. There is no evidence otherwise that LFRS could get more than scrap value for the old cabs. It was always open to Fame to adduce such evidence but it did not do so.
90. The next point is that if LFRS had gone to Fame to do the re-cabbing work the overall cost would have been £7,914.36 cheaper. This was not a matter specifically put to any of the witnesses but in any event, given the history of this matter LFRS was quite entitled to look elsewhere than Fame.
91. Accordingly I do not find any failure to mitigate in respect of the re-cabbing costs.
92. However Fame also alleges betterment in respect of the replacement cabs. These are Fiat Ducato cabs with a manufacturers GVW of 4 mt and a GTW of 2.5 mt giving a total of 6.5 mt. Mr Hargreaves says that it is an all-round more powerful cab. The clutch in particular has a larger diameter and is more robust. Although it is plated now at 6.5 mt he would not want to operate it at that maximum. The present weight of VLR, which has already been converted and been running for about 6 months, is 6.2 mt so there is room for some expansion. It is also clear that some extra items have been added like hydraulic legs and awning poles and no doubt the new cab weighs somewhat more than the old one. It also has automatic transmission.
93. Mr Vaughan for LFRS says that no allowance for betterment should be made because LFRS had to get a replacement cab and the fact that this one gives them capacity to add yet further items and is an all-round more powerful vehicle which is capable of operating at significantly beyond 6.2 mt should not alter the position. He submits that the Court's power to reduce damages in cases like this is very limited but having regard to what is said in paragraph 26-116 of Chitty Vol. 1 (30^th edition) and the cases summarised therein I consider that I have a degree of flexibility where it is not simply replacement of what went before.
94. I make no discount just because the new cab is more powerful than before. After all the problem with the old cab was that in general terms it was not powerful enough to carry the load. LFRS is entitled to be placed in the position whereby it now has sufficient power and that has to allow for carrying a load at somewhere beyond 5.75 mt because even that was after jettisoning various items including the passenger. It also needs to be remembered that there would be the cost of converting the new cab to the existing body in any event. In all the circumstances I consider that a very modest discount should be given to reflect the increased capacity of the new cabs to up to 6.5 mt and their automatic transmission. That discount should be £5,000 in total which is a little over 10% of the cost of the 3 new cabs.

CONCLUSION

95. Accordingly LFRS succeeds in its claim against Fame to the extent of the damages awarded above. I will deal with the question of interest and the costs of the specific disclosure application along with all other post-judgment matters, following the handing-down of this judgment.