Wilex Cocoa and Coconut Products Ltd v Electric Power Corporation [2011] WSCA 8 (26 August 2011)

IN THE COURT OF APPEAL OF SAMOA
HELD AT MULINUU

C.A. 25/10A

BETWEEN:

WILEX COCOA AND COCONUT PRODUCTS LTD a duly incorporated company having its registered office at Apia
Appellant/Respondent

AND:

THE ELECTRIC POWER CORPORATION a body corporate established under the Electric Power Corporation Act 1972 and continued under the Electric Power Corporation Act 1980
Respondent/Appellant

Coram: Honourable Justice Baragwanath
Honourable Justice Fisher
Honourable Justice Hammond

Counsel: C Meechan, P Fepuleai and A Roma for Wilex
A Hooker and D Clarke for EPC

Hearing: 22 August 2011

Judgment: 26 August 2011

JUDGMENT OF THE COURT

Overview and result

1. On 1 June 2003 traffic was stopped on the road outside the factory of the appellant Wilex Cocoa and Coconut Products Ltd whose stored products, including chocolate, required continuous air-conditioning. Sparks were being emitted from power lines by which the respondent Electric Power Corporation delivered electricity to consumers including Wilex. Bystanders saw black smoke and then flames emerging from the Wilex factory. Despite the efforts of fire fighters the factory was destroyed.
   
2. Wilex sued EPC in the Supreme Court, pleading:
   
   • (1) EPC owed Wilex a duty of care in respect of the design, provision and maintenance of electricity and suitable electrical equipment necessary for the supply of electricity services to the Wilex factory;
     
   • (2) EPC breached that duty;
     
   • (3) Such breach caused the fire which destroyed the factory.
     

At trial Wilex contended:

(1) there had been a power surge from within EPC's system resulting from an escape of electricity from high voltage lines carried on the top cross-members of EPC's poles into the low voltage lines carried on lower cross-members from which power was supplied to Wilex;

(2) such surge caused the fire and loss of the factory;

(3) the surge resulted from breach by EPC of its duty of care owed to Wilex.

By judgment of 22 October 2010 the Supreme Court (Slicer J) found that Wilex had failed to establish any of these contentions and dismissed Wilex's claim.

3. On its appeal to this Court against that decision Wilex repeated its contentions. We agree with the Supreme Court's conclusion that Wilex failed to establish the occurrence of a power surge and therefore dismiss Wilex's appeal.
   
4. A cross-appeal was brought by EPC against the costs decision of the Supreme Court which had ordered that the sum of $1,283,396 in favour of EPC be paid only by Wilex rather than by the director of Wilex, Mr Edward Lotasiano Wilson, as well. We deal with the cross-appeal in our concurrent No 2 judgment.
   

Context

5. The Wilex factory was on the northern side of the Main Road which runs east-west at Moataa on the island of Upolu, Samoa. The electricity supplied by EPC to the Wilex factory was supposed to be of low voltage - 415 volts - required for the 3-phase operations of Wilex, as it was for a nearby factory operated by Penaia Brothers. Neighbouring domestic consumers required a 230V supply. Both 415V and 230V supplies derived from a high voltage current of 22kV carried via lines (called "conductors") attached by an insulator to the top cross member of EPC's power poles. Reduction of the high voltage to 415V and 230V was achieved on a pole sited some 400 meters west of the Wilex premises, by running a lead from the 22kV line down to a transformer beneath it on the pole. From the transformer the lowered 415V current was carried by means of four lines (three live and one neutral) via insulators fitted to the lower cross member on successive power poles, one almost directly outside the Wilex premises ("the Wilex pole"). Supply from the Wilex pole to the Wilex factory was by four EPC 415kV lines, each protected by plastic coating, which ran to four insulators fitted to the outside southern wall of the building which is depicted in the Perspective Plan attached to this judgment.
   
6. Power entered the building via four separate lines. These converged into a single Wilex "mains" cable, comprising four separate wires, which ran along the hatched line in a northerly direction across steel roof beams into the centre of the factory building and then down to the floor, from where each of its four wires was connected separately to the main switch board. That was attached to the wall which formed the western part of the northern side of the Packaging Room, on the other side of which was the Cold Room consisting of a steel container. The eastern part of the northern side of the Packaging Room was set further back and abutted the southern wall of the Store Room. An air conditioner was fitted to the eastern side of the eastern wall of the Store Room. It was powered by single phase flex running from a power outlet, linked to the main switch board, and was regularly switching on and off to maintain the temperature required to protect its products. An external stand-by generator linked via a Change-Over Gear box and cable to the main switchboard was switched off but was ready to be activated should the EPC power supply fail.
   
7. Wilex's theory of how the fire started was advanced by Mr Kamm, an experienced US electrical engineer. He considered that there had been a power surge caused by some failure in EPC's system, which allowed high voltage rather than 415 volt supply to enter the Wilex mains cable, degrading it and igniting the structure of the building. For EPC, Messrs Oliver, consulting electrical engineer and Kelderman, forensic scientist and fire investigator, denied that there had been any such surge.
   
8. In addition to disputing the Wilex contention Messrs Oliver and Kelderman offered an alternative cause. They considered that there had been heating of an amateur splice in the air conditioner flex, of which some physical evidence remained, which had set off a fire within the area of the Wilex store room. EPC will succeed if it can resist the Wilex contention, whether or not its own alternative theory is established.
   
9. Wilex now contends that Slicer J erred in rejecting Mr Kamm's opinion and in dismissing the claims of surge, causation of the fire, and breach of duty.
   

The claim of surge and the application for leave to call new evidence

10. There is no evidence of fault in EPC's system tending to establish that a power surge from its 22kV lines entered the low voltage lines and from there the Wilex building. Wilex did not suggest that the high voltage wires carried on the top cross-beam of the successive power poles were able to touch the lower 400V wires. Neither the 400V and 230V lines nor the transformer display evidence of such a mishap. The only evidence of shorting in EPC's system was of contact between two low voltage lines at a point between the pole carrying the transformer and the Wilex pole.
    
11. Mr Luff, a fire expert who emphasised that he is not an electrical expert and who performed an early examination of the building after the fire, considered that the fire commenced at a point near the main switchboard. He reached that conclusion from the extensive damage at that point (2B/841). So Wilex submitted that the fire did not begin at the air-conditioning unit. Mr Kelderman considered that the burn patterns demonstrated the contrary: the fire started in the area of the air-conditioner and extended in other directions from there. The pattern of burning was towards, not away from, the master switchboard.
    
12. Wilex submitted that the burn pattern was of a secondary fire. That was rejected by Mr Kelderman. On appeal Wilex sought to meet his argument by a new thesis as to the line of the mains cable.
    
13. At trial the Wilex theory advanced by Mr Kamm had been that overheating of the main cable occurred along its length and the fire could have begun somewhere in the production room ceiling. On appeal however Wilex advanced a modified theory, that the cable had caused the fire at a point in the wall behind the switchboard.
    
14. When the position of the cable was noted as marked in the attached plan it had been displaced from its original position, conceivably by falling components or perhaps by fire fighters. In its submissions in this Court EPC responded that there was no evidence at trial to support Wilex's modified theory - that the mains cable travelled over the top of the cold container then descended down the common wall between the container and the cool storeroom, reversing on itself then to travel under the cool container and up into the main switchboard. That theory brought its path close to Mr Kelderman's area of origin (at the air-conditioner) albeit on the wrong side of the storeroom. Counsel for EPC submitted that there was no logical reason why the cable would follow this path.
    
15. In reply counsel for Wilex submitted that the main cable was unburnt for part of its length near where it will have connected with the switchboard; that that is explained by its having run under and been protected by the steel cold container; and that at page 1438 of the Case on Appeal a diagram of the wiring contained the notation: "Wilex Mains Cable travel underneath the Container to reach the MSB from underneath here".
    
16. Counsel for EPC then compared that diagram with the one which had been produced at trial and discovered it did not contain the notation. Mr Wilson has confirmed that the trial version did not carry the notation. He has deposed that the version with the notation was used by "our staff" in preparation of the Case because it provided a clearer copy and "The wording was inadvertently not deleted". Counsel for EPC has pointed out that the document appearing in the bundle still bore the page number "00087" from the original trial bundle as well as the Court of Appeal number 1438. Mr Wilson's explanation cannot be correct.
    
17. We accept that the reason for a relatively unscathed length of the mains cable could have been its passing beneath the container and so being protected by the steel from the fire. But that does not meet two major points. One is that of the burn patterns. The other is the absence of any shorting at the point where the mains cable entered the main switchboard, as would be expected if that had been the location of a shorting which caused the fire.
    
18. Wilex's expert, Mr Kamm, suggested that shorting could have occurred within what he termed the "jumble" of wires linking the 22kV line to the transformer; and alternatively that there could have been a fault within the transformer. But there was no attempt by the appellant to have examined either those wires or a transformer, each of which was declared by EPC's experts to be without fault. Mr Kamm advised that the entry of a power surge from the 22kV wires into the Wilex factory would have left evidence on the supply wires. Certainly there was heating of the wires on both theories of the case, manifested by the evidence of sparking and there was no damage even to the plastic coating of the wires between the Wilex pole and factory. That absence of damage may be more consistent with the EPC theory of a short circuit within the low voltage Wilex system than with the kind of heating to be expected from the entry of 22kV voltage.
    
19. Wilex advanced what appeared to be an argument of res ipsa loquitur: "the thing speaks for itself". It contended:
    
    • (1) there was incontrovertible evidence, accepted by the trial Judge, that there had been sparking on EPC's supply wires, evidencing heating to a temperature above their designed capacity;
      
    • (2) there was no flaw in its own systems;
      
    • (3) the sparking could not have derived from any event within the Wilex factory because the supply wires were protected by a circuit-breaker within the main switchboard and by further circuit-breakers (fuses) on the Wilex pole which were provided to protect them from such an event; indeed the fusible link in two of the three duly fuses failed (because their fusing (failure) cut off the flow of current through the system, there was no need for the third to fail as well), thereby preventing a surge from within the factory from affecting the EPC supply wires;
      
    • (4) there must therefore have been some defect in EPC's system whereby power from the 22kV line entered the Wilex main cable; it therefore heated somewhere along its length which culminated in the main switch-board; and that set fire to the factory.
      
20. EPC contended:
    
    • (1) no fault in its systems was established;
      
    • (2) the fuses were not designed to fail immediately there was a current surge; and until they heated sufficiently to fail there was sparking caused by fire originating in the Wilex factory, which shorted electrical connections and generated a current which heated the supply wires to a temperature above their capacity;
      
    • (3) unchallenged expert evidence, summarised in a plan produced at trial, showed the direction of the flames: going west from the area of the air-conditioner towards the switch board where the mains cable terminated; not east from the switch board towards the air-conditioner.
      
21. EPC further asserted, and the Judge found, that there was a fault in a wire, discovered after the fire still attached to the air-conditioner as part of its power flex, namely an improper splice which heated the PCV coating of the flex thus igniting either cardboard and other materials beneath or indeed the plywood wall. EPC claimed that caused the fire, which resulted in a shorting affecting both wires and switchboard and led to a major explosion of the switchboard and destruction of the building.
    

The application for leave to adduce new evidence

22. To ensure efficient disposition of this and other pending appeals, with an August appeal fixture pending, on 13 May 2011 we conducted a callover and gave directions:
    
    • (1) records of appeal to be filed and served by 3 June 2011;
      
    • (2) appellants' submissions and chronology to be filed and served by 17 June 2011;
      
    • (3) respondents' submissions and chronology to be filed and served by 8 July 2011.
      

These directions were complied with.

23. But on 29 July 2011 Mr Fepulea'i, who had led for Wilex at the trial, filed a motion for leave to produce substantial new evidence supported by an affidavit by Mr Wilson. He asserted that since Wilex had filed its submissions in support of its appeal it had become aware of new evidence, in the form of a report of Mr Tupuola Sua, laboratory test manager, that questioned the validity of EPC's theory on causation and progress of the fire which the trial Judge had adopted.
    
24. On 8 August 2011 Mr Kelderman swore an affidavit challenging the competence and opinion of Mr Sua. On 9 August 2011 Ms Ey, barrister and solicitor, a partner in the law firm representing EPC, swore an affidavit in opposition to the application for leave to file further evidence, setting out the sequence of events preceding and during the Supreme Court trial which had began on 10 August and continued on 11-13 and 15-20 August 2010. She exhibited letters evidencing attempts by EPC to secure exchange of experts' briefs and also a memorandum dated 3 August 2010 from leading counsel in New Zealand (not Ms Meechan), who had given certain advice to Wilex, prepared in support of a contemplated application for adjournment of the trial. It included his opinion that Wilex and its solicitors had been diligent in their efforts to prepare the case but that their belief that it could be made ready for trial had been somewhat naïve; they lacked the experience of conducting major trials of this kind which would have equipped them to understand what was required. He considered that delaying the trial to give him the opportunity to prepare the Wilex case properly would assist in a far more efficient disposal of the case in the long run. But the application for adjournment was not pursued.
    
25. On 17 August 2011 Wilex filed a second affidavit by Mr Wilson in answer to that of Ms Ey and one by Dr Babrauskas, an internationally distinguished fire safety scientist whose writings had been cited by EPC as authoritative. Mr Wilson deposed that the brief of Wilex's expert witness, Mr Kamm (which asserted that there had been a power surge from EPC's system which led to the fire, evidenced by by-standers' evidence of sparking on the overhead supply lines before the smoke and fire that demolished the factory), had been provided to Wilex in October 2007. EPC was due to provide its briefs of evidence by 5 August 2010 at 10am and did not do so until 9 August at 5pm. EPC's witnesses had initially declined to accept the evidence of the eye witnesses. Yet, just before and after Wilex's expert left New Zealand on 16 August 2010, EPC provided amended briefs setting up a previously unparticularised theory of the case.
    
    • (1) One, advanced by Mr Oliver on 15 August 2010 (3/1272-1283), asserted that the sparking on 400V wires was due to short circuit faults within the Wilex premises, culminating in the major short which caused the 415V wires west of the Wilex pole to swing apart; when two of the pole fuses failed the wires swung together causing contact between them, evidenced by a photograph showing damage caused by that event, while there was no explanation for sparking in the 22kV lines. He stated:
      

2.3...If the short circuit fault is in small (low current) cables, the resulting increase in the current may be small, perhaps less than 100 Amps. However, if the fault is in a mains cable or main switchboard the increase could be many thousands of Amps.

2.4 When a short circuit fault occurs in premises downstream from the main switchboard it is normal that the fuse or circuit breaker will trip and turn the power to that circuit off. But before the fuse or circuit breaker has time to trip a large current will flow for a short period of time.

(2) Another (3/1284-1296) asserting that if there had been arcing from the 22kV wires all consumers attached to the low voltage wire affected would have sustained widespread damage, advanced by Mr Oliver in reply to evidence of Mr Kamm claiming that there had been arcing between the 22kV line and a low voltage wire, was received after Mr Kamm had departed.

(3) So too was one of Mr Kelderman (3/1329-1340 deposing that a "blue arcing effect" can result from atmospheric conditions.

(4) On 19 August in oral evidence (3/868 and 876) Mr Oliver expressed the opinion that the current (which, on EPC's theory both heated the wall by the air-conditioner causing the fire and in addition caused the sparking seen by eye-witnesses, caused by the fire), was insufficient to trigger the circuit-breaker on the main switchboard; what tripped were two of the three fuses on the Wilex pole, activated by the load on the downstream (Wilex) side

26. On appeal Wilex submitted that these themes were not squarely put to Mr Kamm in cross-examination. They were not. But no application for adjournment was made by Wilex to give it time to respond to the amended Oliver briefs. Wilex elected to allow the case to proceed to judgment
    

New evidence: discussion

27. New evidence is not lightly admitted after the conclusion of a trial. In Jennings v Estate of Ione Onesemo [2010] WSCA 12 at [21-3] this Court adopted, in the case of an allegation that a verdict had been obtained by perjury, the formulation of the Court of Appeal of New Zealand in Shannon v Shannon [2005] NZCA 83 (CA). The plaintiff must show all three of the following:
    

(a) the evidence has been newly discovered since trial;

(b) either the evidence could not have been found by the time of the trial by exercise of reasonable diligence; or its rejection would constitute an affront to justice;

(c) the evidence is so strong that it would reasonably be expected to be decisive at a rehearing, and if unanswered, must have that result.

[22] As to the second of those requirements, the Court in Shannon said:

[124] This leaves the question of whether there is a due diligence requirement in New Zealand. In our view there is. Not to have any kind of due diligence rule could, in our view, encourage the proliferation of actions by providing an incentive for parties dissatisfied with judgments to search for further evidence. It could also discourage thoroughness in pre-trial discovery and preparation, as litigants would be aware that, were they unsuccessful, they could later uncover some other evidence to show that the other party's evidence may have been untrue and thus essentially allow them to run their case again before another judge.

[125] We consider, however, that the rule is not immutable. The courts should, in our view, have a discretion to allow actions to proceed, even if based on evidence that would have been reasonably discoverable at the time of the original hearing. The test should be whether it is in the interests of justice to do so and whether the public would consider it an affront to justice not to let the case proceed. The discretion should not be lightly exercise, particularly in cases where the "new" evidence is evidence of the same type as was adduced at the original trial of the matter or where it is of a type that would have been expected to have been adduced .... Before exercising its discretion to waive the due diligence requirement a court should, at the least, require a very convincing explanation as to why the "new" evidence was not available at the first trial. The evidence must also be of very high relevance and materiality.

In Jennings this Court concluded:

[23] In short ... a plaintiff who has not shown reasonable diligence will fail unless the public would consider it an affront to justice not to let the case proceed and the interests of justice so require. This is plainly intended as a stringent requirement which will rarely be satisfied.

Similar approaches are seen in Paper Reclaim Ltd v Aotearoa International Ltd (No 2) [2007] NZSC 1; [2007] 2 NZLR 124 (SC), Ladd v Marshall [1954] EWCA Civ 1; [1954] 1 WLR 1489; [1954] 3 All ER 745 and Daly v Sheikh [2002] EWCA Civ 1630. An appellate court will not allow "post trial shopping for another expert": Wallace v R [2010] NZCA 46.

The proposed new evidence

28. The new evidence of Mr Sua, who conducted tests of burning PVC, disputed that heating the PVC flex could have caused it to ignite so that heated particles dropped and ignited. It was challenged by Mr Kelderman (affidavit 19 August 2011) but supported by affidavits of Dr Babrauskas (17 August and 22 August).
    
29. Dr Babrauskas (para 6.1 17 August) asserts that the EPC theory cannot be right, because the switchboard circuit breaker or fuses on the pole outside would have provided protection against EPC's scenario.
    
30. He also challenges the Judge's acceptance of EPC's evidence that had there been a surge from a 22kV wire other consumers would have been affected.
    

Did Wilex exercise due diligence?

31. Following the fire Wilex did engage a fire safety expert, Mr Luff. But his evidence was so unhelpful to its case that he was called not by Wilex but by EPC. Because he is not an electrical expert he asked Wilex to appoint such an expert, but was unsuccessful. He was told by Mr Wilson that there was no evidence of fire in or around the switch board when Mr Wilson entered the premises, which occurred after smoke was seen (840). He found no correlation between EPC and the fire (841).
    
32. Subsequently Wilex did retain Mr Kamm, who is a distinguished electrical engineer. But Mr Kamm did not perform any examination of any EPC equipment, and in particular neither the "jungle of wires" nor the transformer. Nor did he examine the air-conditioner and the wire that remained attached to it. Mr Kamm contented himself with speaking to the electrical contractor who from time to time serviced Wilex equipment and deposing that he regarded him as credible.
    
33. As Dr Babrauskas has written, and confirmed by affidavit, air-conditioners are 'a common source of fires. Reasonable preparation by Wilex would have included consideration of that as a potential cause. We are not satisfied that Wilex has satisfied the reasonable diligence test.
    

Affront to justice?

34. We are not satisfied that there can be any affront to justice by declining leave to admit the evidence of Mr Sua's tests or that of Dr Babrauskas in support of his methodology. That is because in his second affidavit Dr Babrauskas advises that:
    

...poor connections are a known cause of fires...local heating at the connection ignites an adjacent non-electrical combustible item, which may commonly be a wood stud, plywood paneling,...etc.

Yet one of the scenarios advanced by Mr Kelderman is exactly that of combustion of the plywood wall.

35. Nor is there such affront in relation to Dr Babrauskas's argument that there could have been a surge that did not affect other users if it travelled along a wire which was connected only to the Wilex factory. Such thesis depends on proof of such facts; even now there is no evidence to such effect. Wilex's submission that there was something idiosyncratic about the Wilex setup that resulted in its being the only casualty of the pulse lacks any evidentiary basis.
    
36. Greater analysis is required of Dr Babrauskas's opinion that the switchboard circuit breaker or fuses on the pole outside would have provided protection against EPC's scenario. He expresses the view that as a result:
    

From a physics point of view, [EPC's] assertion that a fire originating in the Wilex factory caused the voltage abnormalities observed on the day of the fire has no scientific merit.

37. That opinion depends on two factual propositions:
    
    • (1) As to the nature and duration of the sparking seen on the power wires;
      
    • (2) As to the character and operation of the circuit-breakers.
      
38. As to the former, Slicer J stated:
    

117 There was no dispute that reliable witnesses had seen flashing and heard noises described as 'crackling' or akin to a shot.

118 Oliver and Kelderman accepted the credibility of the [eye-] witnesses but not their nuance or detail. Oliver summarised his analysis of their collective evidence by saying:

... In my experience, what those witnesses described are common observations by laypeople in relation to a fire of this type...

119 Uili Taisia gave evidence that on Saturday, the day prior to the fire, he had seen flashes on the power lines near the Wilex factory. Such sparking, not dangerous, can occur in atmospheric conditions of high humidity. It is sometimes accompanied by crackling and is a natural phenomenon called a Corona Discharge. It occurs when the air surrounding an electrical component ionises i.e. breaks down and the air 'glows' usually a blue/white colour. Oliver had observed the same natural phenomena whilst walking, early in the morning of 14 August 2010, past the Samoan Supreme Court. Whilst it may appear to a layperson to indicate faulty electrical equipment it is but a transient, harmless natural occurrence.

120 The question of the evidence of the observed sparking on 1 June was whether it was evidence of a pulse predating the fire or a consequence. On any version the main switchboard exploded well after the fire had developed, not simultaneous with any pulse.

121. Oliver considered the observations of the witnesses and his own findings of the conductors and transmission wires made on 12 August 2010.
     
122. Electric current flowing through a power line creates a magnetic field which interacts with magnetic fields of adjacent wires. The strength of the field depends on the magnitude of the current. If a short circuit occurs downstream the magnetic fields alter creating a repulsion force causing the lines to move out. When the current ceases, they return. If the kinetic energy is sufficiently strong the returning wires might touch, creating a second short circuit which creates a flash and spark with a repeat of the process described above. That process can intensify. When the downstream circuit breakers trip, the current at the trip point reverses and makes the dynamics more complex.
     
123. Thus a fire causing multiple short circuits within the Wilex premises while the master switchboard was still energised could cause secondary shorting faults in several spans between the premises and the transformer. This would explain the 'flashing' on the 400V lines.
     
124. Oliver had examined the damage to the master switchboard and found that the plastic insulation had been damaged by fire creating a further short circuit fault at the point of damage. In his opinion:
     

"...these short circuit faults created an increased current in the overhead lines between the Wilex pole and the transformer pole. When the explosion occurred in the main switchboard, this caused a massive increase in the current as well. These current increases could well have caused the outer pairs of overhead lines on Span 1, 2 and 3 to swing. It appears to me that these lines on Span 1 and on Span 3 had swung and then touched together several times."

125. He added a further explanation for any sparking along the lines between the EPC pole and the Wilex factory that:
     

"...when the short circuit faults in the Wilex premises and, most likely, those caused in and by the main switchboard explosion, caused the pole fuses in the Wilex power pole to eventually blow, this certainly would have been accompanied by sparks and smoke coming from the pole fuses themselves. It is possible that these sparks and his smoke would have appeared to be travelled towards the factory from the pole to and an observer seeing this from a distance."

126. At any scene of an accident or dramatic event, witnesses see different occurrences and have differing impressions. Multiple events become mixed in memory or lack detail and produce differing perceptions. The witnesses saw flashing consistent with a series of short circuits occurring after damage by fire and at a later time, a result of the explosion in the master switchboard.
     
127. The summary of Oliver's opinion was that the observed sparking was confined to the 400V lines and his conclusion was:
     

"(1) 400V overhead lines – short circuit faults within the factory caused by the fire, and/or second short circuit faults and/or resulted in swaying and waves in Spans 1 & 3, as a result of which the outer pairs of lines touched causing arcing multiple times;

(2) 22kV overhead lines – possibly mistaken, and actually saw sparking on 400V overhead lines instead;

(3) Insulated lines between Wilex pole and factory – possibly mistaken and actually saw what they thought were sparks travelling towards factory when pole fuses blew..."

We infer that the Judge accepted Mr Oliver's analysis.

39. Wilex emphasised the evidence of the Rev Faafeti Milo whose affidavit stated:
    

... at around 3pm ...I observed bright blue sparks flashing from the EPC cables starting from in front of the Penaia Brothers at Apia Park and moving towards the power pole in front of Wilex...I saw sparks from the top cables sparking one another....taxis in front of me...were parked and were also witnessing these flashes...two of the tasis made u-turns and drove back in the opposite direction...I ...noted a lot of vehicles coming from the opposite direction stopping and making u-turns obviously to avoid the sparking cables. I continued to observe the sparking of the wires from the western end in front of the Penaia Brothers and moving towards the electricity pole in front of the Wilex factory. The last sparks I saw were from the wire at the electricity pole in front of the Wilex factory going towards the factory.

He said that the smoke followed shortly after the sparks.

40. Ms Toenuti Fualau had been sitting in front of the house next to Wilex on the western side. In her affidavit she stated:
    

...we were taken by surprise b y what appeared to be a shotgun being fired coming from the electrical post in front of the Wilex factory. I saw the sparks from the electrical wires coming towards the east to the west and back from the west to the east. I heard the crackling noise and saw the sparks of light coming from the electrical wires. I saw these sparks of lightening from the post right in front of the Wilex factory moving towards the Wilex factory....a little time after that [in oral evidence put at 10 minutes] we saw black smoke coming from the Wilex factory. The time of the incident was around 3.30 pm because I could hear the church bells ringing...

In her oral evidence she said the "arc welding spark" was on the bottom power lines from east to west and returned back, and that the sparks turned into fire and spread from the Wilex post to the factory. Questioned by the Judge she said that what she saw was sparks not flames.

41. Wilex challenged the Judge's assessment that this evidence assisted EPC, submitting that the ten minutes between the sparking and the smoke supported the Wilex analysis. It further challenged the Judge's reliance on the witness's evidence that she saw wires hanging down as consistent with the circuit-breakers having fused. But the latter point is self-evident: the wires were cut long after the fusing.
    
42. Maika Lemi lived across the road from and nearly opposite the Wilex factory. He said that after 3pm he heard what sounded like the sound of a gun being fired coming from the main road. He walked towards the road and saw what appeared to be sparking on the lower electrical wires and the sound of a gun being fired. He believed there were many such sounds. He went to the Penaia Brothers factory and was told by the boss's wife to turn off the meter of the three phase power in case it was affected by what appeared to be a fire running along the electricity lines. He later saw black smoke from the rear of the Wilex factory.
    
43. In Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103; [2008] 2 NZLR 141 the Supreme Court of New Zealand emphasised that an appellate court is required to make its own evaluation of the facts and should give no greater deference to the decision appealed from beyond the customary caution appropriate when the fact finder had a special advantage such as the opportunity to assess the credibility of witnesses. But that was a case where the facts were undisputed: the issue was simply whether a proposed trade mark for whiskey "WILD GEESE" was deceptively similar to an existing mark "WILD TURKEY". Such a case has however nothing in common with this, where the facts are disputed. It falls rather within the authorities, endorsed in Austin, Nichols at [13], "when facts found by the trial judge turn on issues of credibility", among them Rae v International Insurance Brokers (Nelson Marlborough) Ltd [1998] 3 NZLR 190 properly cited by counsel for Wilex. The Court there emphasised that:
    

Any tendency or wish to engage in a general factual retrial must be firmly resisted. This Court will not reverse a factual finding unless compelling grounds are shown for doing so.

44. In such cases as this the Court of Appeal must necessarily acknowledge the advantages enjoyed by the trial judge who has seen and heard the witnesses and been exposed to the case in its entire context from beginning to end. We add that the caution appropriate when reviewing the evaluation of a trial judge extends beyond credibility to issues of capacity and reliability.
    
45. To evaluate the evidence of eye-witnesses it is necessary to stand back and examine the evidence as a whole. The Rev Mr Milo was alone in suggesting that there had been sparking on the upper 22kV wires. There was no damage either to those wires or to the PVC-covered wires leading from the Wilex pole to the Wilex factory. While Mr Kamm contended that the introduction of high voltage into the latter wires would have left no trace we see no reason to interfere with the Judge's contrary conclusion, supported as it was by Messrs Oliver and Kelderman. Since those wires were unscathed it is unlikely that the mains cable could have overheated to such an extent as to set fire to the building.
    
46. It is common ground that the Wilex pole fuses, which contain fusible links, fail only in response to excess current, not excess voltage. Such excess current can derive from the kind of electrical event that occurred with the explosion affecting the main switchboard. It shorted on to the cable of a generator which had been inactive but which was powered up as a result. Evidence of the shorting of that cable was found after the fire. Yet there was no shorting at the point where the four wires from the main cable entered the main fuse box. If there had been such gross overheating of that cable as to have set the building alight from the entry of a 22kV voltage that would have been expected.
    
47. We have noted that the argument advanced by Dr Babrauskas ([36] above) that:
    

From a physics point of view, [EPC's] assertion that a fire originating in the Wilex factory caused the voltage abnormalities observed on the day of the fire has no scientific merit depends on both the evidence of the eye-witnesses and the characteristics of the fuses. We have decided that the Judge's appraisal of the former was well open to him: the sparking was confined to the low voltage wires and to a period consistent with Mr Oliver's evidence that damage inside the factory to electrical cables and their plastic insulation created a short circuit fault which caused an increased current and thus sparking in the overhead lines between the Wilex pole and the transformer. When the explosion occurred in the main switchboard that caused a massive increase in the current as well which could have caused the 415V lines to swing and then to touch when the current was cut off by the pole fuses blowing... His conclusion is supported by the fact of damage to two of those wires where they have come into collision. There is no such damage to the high voltage wires. The Judge accepted, as do we, that the damage is the result of the entry of excessive current which has overheated the wires and caused them to repel each other, following which they have swung together, collided, and sustained the marks shown in a photograph.

48. As to Dr Babrauskas' second point – that the fuses would have prevented the sp-sparking – it is self-evident that that how fuses will behave will depend both on their specific composition and on the nature as well as duration of the current passing through them. Dr Babrauskas has not provided data on either of these essential topics. His account of "repeated witness observations of sparking" takes at face value observations which the Judge discounted. We repeat the Judge's conclusion:
    

a fire causing multiple short circuits within the Wilex premises while the master switchboard was still energised could cause secondary shorting faults in several spans between the premises and the transformer. This would explain the 'flashing' on the 400V lines.

49. The reference by Dr Babrauskas to "a short-circuit current of such extreme magnitude as to cause conductor clashing in the incoming feed of such extreme magnitude as to cause conductor clashing" as something that "would be relieved extremely quickly (small fraction of a second) by either of these protection devices [the circuit-breaker in the switchboard and the pole fuses]" is indisputable. It does not however follow that the whole of the sparking seen was of such intensity as to swing the wires or blow the fuses.
    
50. As Mr Hooker submitted, the time taken to trigger the protection devices must be a function of their sensitivity and the current to which they are exposed. It does not follow that, because the major event which shorted the generator cable and destroyed the switchboard contributed to the current which heated and burned out the fuses, that prior lesser currents sufficient to cause sparking on the low voltage wires had the same effect.
    
51. Since the position is simply unclear Wilex does not satisfy the high standard required to secure a new trial on the basis of the evidence tendered.
    

Result

52. Wilex having failed to prove that there was a surge from the EPC equipment the appeal fails and is dismissed. It is unnecessary to consider the further issues of causation and breach of duty.
    
53. We order that the costs of EPC on the appeal, which we set at $10,000 plus disbursements to be fixed by the Registrar, are to be paid by Wilex.
    
54. We express our gratitude to all counsel, not least Ms Meechan whose acceptance of late instructions to lead for Wilex was of particular assistance to the Court.
    

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Honourable Justice Baragwanath

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Honourable Justice Fisher

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Honourable Justice Hammond