Case: BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Outcome: applied
Reigate v Union Manufacturing Co (Ramsbottom) Ltd [1918] 1 KB 592 at 605, in a passage cited with approval by the Judicial Committee of the Privy Council in an Australian appeal, BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 at 283, Scrutton LJ said: A term can only be implied if it is necessary in the business sense to give efficacy to the contract i.e., if it is such a term that it can confidently be said that if at the time the contract was being negotiated some one had said to the parties, 'What will happen in such a case?', they would both have replied: 'Of course, so and so will happen; we did not trouble to say that; it is too clear. Lord Justice Mackinnon made observations to like effect in relation to the implication of a contractual term in Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206 at 227 in a passage which also commended itself to the Judicial Committee in BP Westernport Case (ibid). That they did so did not relieve Flottweg of all design responsibility, so far as the supply of a line "N&#178; flushed" from the malaxeurs is concerned. It necessarily followed, in order to give business efficacy to the contractual specification of the level of exclusion of atmospheric oxygen to be achieved ( BP Refinery (Westernport) Pty Ltd v Shire of Hastings , supra) that the equipment in the line from the malaxeurs on which Flottweg supplied at least had design features, or could be modified as contractually anticipated, so as at least to achieve that specification with an occupationally safe and commercially feasible supply of nitrogen of sufficient purity. As to what this might be, Mr Carey did not offer an opinion. Mr Nieuwkerk, who undertook the design and who consulted Mr Lorenz and Dr Paterson, did. When Mr Nieuwkerk had the benefit of a range of data not available to him when working on the plant during the test conducted on 25 May 2006 or, because of Olivaylle's belated attention to the rigour of its discovery obligation, when giving his initial affidavit in these proceedings, he came in his further affidavit to express the following opinion concerning the required sufficiency of nitrogen for the production line in its condition as last encountered by him in 2006: It is apparent that the filing and emptying of the malaxeurs has much less effect on the oxygen levels than I first thought. In particular, ..., the fact that oxygen levels were able to remain under 1% during the filling and emptying of the second run of malaxeur 1 suggests that the volume of additional nitrogen required to ensure that oxygen levels were maintained at similar levels in the other malaxeurs may not be as much as I ... estimated [in an earlier affidavit]. Accordingly, my estimate [in] my earlier affidavit that the volume of nitrogen necessary to operate at below 1% might be in the order of 120 cubic metres per hour, now appears to be high. The data also confirms my previous view that the nitrogen supply to the malaxeurs should be maintained continuously during the harvesting season, including when the system was not actively processing olives. This is because it was my observation, consistent with my experience, that were the oxygen levels were brought down to low levels prior to the start of processing those low levels were able to be maintained. For example, on each of the 21 st April 2006, 27 th April 2006 and 25 May 200 where the levels were brought down to below 1% prior to the commencement of processing, in most cases, those levels were able to be maintained throughout the process run. In my opinion, having observed the operation of the plant in 2005 and 2006 and now having the benefit of the data on the compact disc and Daily Data Sheets, if the available supply of nitrogen was doubled to 40 cubic metres per hour (which is the expanded maximum capacity of the existing nitrogen generator) this may be sufficient to maintain oxygen levels of below 1% in all parts of the plant through the process. [Emphasis added] In his oral evidence, Mr Nieuwkerk explained what he meant by the word "may" in his opinion as to sufficiency of nitrogen supply. The answer he gave was "should", ie more likely than not. It was well within his expertise to express such an opinion. I recall also that, in relation to the task of the provision of sufficient nitrogen and sufficient purity, Nr Nieuwkerk was retained by Olivaylle, not by Flottweg. The following excerpt, taken from Mr Nieuwkerk's later affidavit, offers a convenient summary both of his views and those initially given by Mr Carey in relation to the further data: At paragraph 18.6 and 18.7 [of his affidavit] Mr Carey sets out his observations in relation to the oxygen sensor data for the test on 25 May 2006 which appears on the compact disc which is marked as Exhibit ADC7 to Mr Carey's affidavit. I was at the plant during the 25 May 2006 test. I have reviewed the material on the compact disc in detail. I have also been given and have reviewed a bundle of documents which are described as the "Daily Data" sheets for various days during the 2006 and 2007 harvests ("Daily Data Sheets"). A folder which contains copies of the Daily Data Sheets that I have been provided is exhibited to me and is marked "DWN-4". The Daily Data Sheets in DWN-4 are in chronological order separated by numbered tabs. I did not have access to the Daily Data Sheets or the information on the compact disc at the time of the test in 2006 or at any time prior to swearing my earlier affidavit. According to my recollection of the events of 25 May 2006 along with these additional materials now made available to me it appears to me that a number of statements made by Mr Carey in paragraphs 18.6 and 18.7 [of his affidavit] are incorrect as follows: (i) at paragraph 18.6 Mr Carey states that in the time immediately before 2.35pm the level of oxygen in the malaxeur "rose sharply to around the atmospheric level of 20.9%". This is incorrect. The data shows that the only changes in recorded oxygen levels during this period were as follows: (A) At 2.03pm and 4 seconds the oxygen level is recorded at 20.562%; (B) At 2.03pm and 14 seconds the oxygen level is recorded as dropping to 0.281%; (C) At 2.19pm and 14 seconds the recorded oxygen level is recorded as rising at 0.311%; (D) At 2.35pm and 14 seconds the oxygen level is recorded as rising to 1.306%; (E) At 2.51pm and 14 seconds the oxygen level is recorded as dropping to 0.965% It is apparent from the data, and as Mr Carey states at paragraph 18.10.1, that there is a sampling interval of 16 minutes (that is, a single fresh reading is only taken every 16 minutes, despite the spreadsheets included on the compact disc reporting values for every 10 second interval). With respect to the recorded drop from above 20% to below 1% at 2.03pm (as opposed to the rise referred to by Mr Carey) I say that in my experience such a drop is impossible to achieve in 16 minutes in a vessel the size of a malaxeur with a maximum available nitrogen supply of 20 cubic metres per hour. I believe that this data reflects the sensor being switched at that time from sampling the outside air to sampling the atmosphere in the malaxeur. This is only the explanation that is consistent with the very sharp changes in the oxygen levels. If correct, the data for the time immediately prior to 2.03pm does not record the oxygen levels inside the malaxeur at all and is irrelevant to any assessment of whether the malaxeur was sufficiently sealed prior to that time. I note also that for the 16 minute cycle between 12.27pm and 12.43pm the reading is zero. This indicates, as Mr Carey states at 18.10.2, that the sensor was not functioning at that time. Mr Carey states that the second time in the day that the level of oxygen was below 1% in malaxeur 1 was between 2.51pm and 8pm "when the malaxeur was empty and closed after the last batch of olive paste during the day's run had been malaxed". This is not correct. The Daily Data Sheet for 25 May 2006 (a copy of which is at Tab 15 of DWN-4) shows that malaxeur 1 was filled and emptied during that time. In particular, it commenced filling at 3.05pm, it was full by 3.44pm, it started to empty at 4.35pm and it was not completely empty until 5pm. This is consistent with my recollection of the events of that day