FT Everard & Sons Ltd. v BP Marine Ltd.

A claimant alleging that a lubricant was unfit for purpose must establish a sufficiently clear connection between the product and the damage. A failure mechanism is not invariably essential, but where the product’s defective quality is itself unsupported, circumstantial evidence must be clear and compelling. Temporal correlation alone, particularly where alternative causes remain plausible, may be inadequate. A single imperfect operational test will not necessarily shift the evidential burden to the defendant.

A contractual clause invalidating claims for defects in quality may, on its proper context, concern compliance with specification, quantity and freedom from contamination rather than broader fitness-for-purpose claims. Such a clause must be construed against the party seeking to rely on it.

FT Everard & Sons Ltd. v BP Marine Ltd. claimed approximately £725,000 from BP for repair costs, loss of hire and related expenses. Everard alleged that BP’s C3 lubricating oil was not reasonably fit for use in the hydraulic systems of three coastal tankers and had caused wear and overheating damage to their pumps.

BP denied causation and relied on alternative explanations, principally engine and pump misalignment, contamination and mechanical factors. BP also relied on a contractual limitation and exclusion clause. The issues were whether the oil caused the damage and, if so, whether clause 10(c) invalidated the claim or was reasonable under the Unfair Contract Terms Act 1977.

1. Claim dismissed. Everard failed to prove that C3 caused the damage to the pumps. The expert evidence did not establish any relevant tribological defect or material difference between C3 and the other oils used.
2. The absence of a failure mechanism was not, by itself, fatal to the claim. However, where there was also no evidence identifying how the oil was of poor quality, the circumstantial evidence had to be clear and compelling. The evidence concerning the chronology and condition of the pumps was not sufficiently reliable.
3. The alleged correlation between the introduction of C3 and the pump failures was unsatisfactory. The overall pattern was at least as consistent with misalignment and other causes. The court could not draw reliable conclusions from the correlation exercise.
4. The test conducted on 17 September 2002 did not establish causation or shift the evidential burden. It involved one pump on one vessel, was a working operation rather than a properly designed or monitored experiment, and did not exclude other possible causes. The possibility of clearance or another unidentified factor remained.
5. The court rejected as unconvincing both the proposed oil-starvation theory and BP’s principal over-pressurisation theory. The inability to establish a single cause reinforced the conclusion that Everard had not proved that the oil damaged the pumps.
6. Although unnecessary to the outcome, the court construed clause 10(c) as addressing defects in the supplied product’s specification, quality and quantity, and contamination, rather than a broader claim that the oil was unfit for a particular use. Read in that way, the clause was reasonable under section 3 of the Unfair Contract Terms Act 1977 and would not have invalidated a successful claim.

First-instance judgment. No earlier appellate decision is stated in the judgment.