Kingspan Environmental Ltd & Ors v Borealis A/s & Anor

In this action the claimant companies claim damages of the order of £ 40 million, originally put at around £ 100 million, in respect of the supply to them by the defendants of a polymer known as Borecene. The claimants used Borecene as the raw material with which to rotomould static tanks to hold bulk liquids, in particular kerosene. The tanks come in five basic styles - Bunded, Horizontal, Rectangular (Slimline), Low Profile and Vertical - with different designs in each style. A bunded tank is a single skin tank housed in an outer tank to prevent leakage into the ground.

A substantial proportion of the oil tanks manufactured from Borecene supplied to the claimants in 2002-3 have failed. From late 2003 onwards complaints began to come in that oil tanks made from Borecene were cracking (a few had begun to deform) and leaking. These failures were in much greater numbers and at a higher rate than had been the case in respect of the type of resin previously used.

The claimants contend that the failures of their tanks made from Borecene are the consequence of breaches of the contracts for the sale of that product to them, and that their losses are also attributable to misrepresentations which were made to them about its characteristics. In essence they say that the Borecene supplied was not fit for the purpose of making static oil tanks because it had inadequate resistance to ultra violet light (“UV”) either because of its intrinsic characteristics or its inadequate stabilisation package or a combination of the two.

The defendants say that Borecene is neither unsuitable nor unfit for purpose and has certainly not been shown to be so. The tank failures arose from the claimants’ inability or failure properly to use Borecene and to ensure that it could make satisfactory tanks taking account of Borecene’s different rotomoulding properties of which they were aware. They also contend that the issues in this case are to be determined by the law of Denmark and that any liability they may have is severely limited by the terms of the relevant contracts.

The parties have swamped the court with a vast amount of material, which they have been preparing over several years. The factual statements are many and long. Experts’

The inordinate size of the material and the scatter gun approach adopted, particularly by the claimants, is an enemy to understanding. In order not to make what will be a long judgment interminable, I propose to confine it to the critical areas. I shall not attempt a summary of all the evidence. What follows are my conclusions from the totality of the material, factual and expert, adduced by each side. I have been much assisted by the final submissions of both parties, which have helpfully directed me to the matters that in the end the parties regarded as significant. I have reconsidered all the evidence to which those submissions make reference whether or not I have expressly referred to it in this judgment.

In the earlier case of Balmoral Group Ltd v Borealis UK Limited, Borealis AS and Borealis A/S [2006] EWHC 1900 (Comm) Balmoral claimed (unsuccessfully) in respect of the failures of its oil tanks made from Borecene. The claim in those proceedings was that Borecene had inadequate environmental stress cracking resistance (“ESCR”). Environmental Stress Cracking is the cracking of a polyethylene part under stress when in contact with a medium, e.g. kerosene, in the absence of which fracture does not occur under the same conditions of stress. No claim was made in that case in respect of inadequate UV resistance. Nor has any other claim been made against Borealis on that basis.

The claimants (as now named) are:

Kingspan Environmental Ltd was previously called Plashapes Ltd (6 July 1984 – 13 August 1999) and then Titan Environmental Ltd (13 August 1999 to 10 September 2008). For the purposes of this action it is convenient to describe it as “Titan”, the name which it had for most of the time with which this action is concerned. It is the principal UK trading company of, and became part of, the Kingspan Group, of which the ultimate holding company is Kingspan Group Plc, when its then ultimate parent company – then known as S & D Management Ltd (“S & D”) (Footnote: ¹) - was acquired by the Kingspan Group on 11 March 1996. At the material times its manufacturing site was at Banbridge, County Down. It is now based in Portadown.

The second claimant is, and at all material times has been, named Tyrell Tanks Ltd. It, too, became part of the Kingspan Group upon the acquisition of S & D in March 1996. It manufactured tanks at a site in Portadown, County Armagh. Its business and assets were transferred to the first claimant as from 1 January 2007.

The third claimant is, and always has been, Rom Plastics Ltd. It became part of the Kingspan Group in 1997 (Footnote: ²). It was a small manufacturing and sales company carrying on business from its site in Glenamaddy, County Galway, ROI. In 2003 its business and assets were transferred to the fourth claimant. Until its business was fully transferred it continued to purchase Borecene for use by itself or the fourth claimant and continued with the manufacture of oil tanks.

Titan Environmental Ltd was previously called Kingspan GSP Ltd, its name between 5 December 1989 and 7 June 2005. Before that it was called General Steel Products Ltd. It is convenient to call it GSP. It was acquired by the Kingspan Group in March 1996 on the acquisition of S & D, its then parent. It is the principal ROI trading company in the group. It carries out tank manufacturing from its site at Carrickmacross in the ROI.

The relevant details of the claimant companies, all of which have Kingspan Group Plc as their ultimate holding company, and the names which I propose to use in respect of them in this judgment, when it is necessary to distinguish them are, thus, as follows:

Another member of the Kingspan Group of Companies was Plastics Development Centre (PDC). This company operated as the research and development arm of the Kingspan companies. Its personnel included Dr Julia McDaid (“Dr McDaid”), who had a Ph.D. in the field of rotomoulding and an M.Sc., in Polymer Science and Engineering, and Mr Dessie Gregg.

All the above companies form part of what in 2002/3 was the Kingspan Environmental Containers Division, now called the Kingspan Environmental and Renewables (“E & R”) Division, one of the six operating divisions of the Kingspan Group. That division designs, manufactures and markets a large range of containers for oil, waste water, rainwater, oil separation and hot water. All four claimants were at material times manufacturers and suppliers of static oil tanks.

Unless it is necessary to distinguish between one claimant and another, or between a claimant and PDC, I shall refer to them generically as “Kingspan”.

The E & R Division sells primarily on a wholesale basis, with the UK and Ireland as its primary market, although products are sold and distributed in France, Spain, Germany, Denmark, Poland, Czechoslovakia, Norway, Sweden and the United States.

So far as oil tanks are concerned the purchasers fall into two groups:

The E & R Division endeavours to persuade architects, engineers, Housing

The companies in the E & R Division would almost never enter into a direct commercial relationship with the end user or customer.

Polymerisation is effected by a process of reacting (by the use of a catalyst) monomer molecules together in a chemical reaction to form long polymer chains. In the polymerisation of ethylene (H₂C = CH₂) the double bonds (represented by the “=”) that link the two carbon atoms in the compound are broken into a single bond to form a reactive monomer with radicals. The monomers then join to form a polymer chain of polyethylene with the general structure [CH₂-CH₂]n where n is the number of repeating units which may be several thousand. The process is illustrated by the following diagram:

A polymer is, thus, a large molecule composed of repeating structural units typically connected by covalent chemical bonds (i.e. bonds formed as a result of the sharing of two electrons by two atoms). Co – monomers are often added in the process to produce a polymer with different properties (such as a reduction in density, for which butane, hexane and octane are typically used).

With polythenes some of the polymer chains are arranged in a very regular pattern. These are described as being in a crystalline form and are referred to as crystallites. These ordered regions are separated by amorphous material. The ratio between the ordered and the amorphous regions in a polymeric material is commonly referred to as its crystallinity, which is expressed as a percentage of the whole structure represented by the ordered material. The crystalline phase has higher rigidity and greater resistance to applied load whilst the amorphous phase is generally more flexible.

Polymers are often distinguished by their density as low, medium or high density polyethylenes (L/M/HDPE). Low Density PE has molecular chains with more side branches than high and medium density PEs.

There are currently three types of catalyst in commercial use:

ZN catalysts were developed in the 1950s. They allowed commercial production of polypropylene as well of high density polyethylene (“HDPE”) and linear low density polyethylene (“LLDPE”). Metallocene is a generic type of catalyst system for the production of polymers, first patented in the 1980s and used in industry since the

Borecene is a Medium Density Polyethylene (“MDPE”) made with a metallocene catalyst and a hexene co-monomer. Until they began to purchase Borecene from Borealis in 2002 Kingspan had used an MDPE produced by a Ziegler-Natta catalyst. These were manufactured by a number of companies including Dow, DuPont, Polinter, Samsung, and Borealis.

A polymer is made up of molecular chains of varying lengths. It is unlike simpler compounds, which may be composed of identical molecules having the same structure and molecular weight. Because of the variation of the length and weight of molecule chains in polymers, polymer molecular weights are usually given as averages. Three types of averages habitually used are:

The chemical structure of a polymer will differ according to the catalyst by which it has been produced. Different catalysts cause the monomers to join together in different ways. Different polymers will have different sets of molecular chain lengths and, therefore different weight average molecular weights and molecular weight distribution (MWD). MWD is a measure of the spread of the distribution of molecular weights. It is given by the ratio of Mw to Mn. MWD = Mw / Mn. If all the chains had identical weights the MWD would be 1. Typical MWD values for PE are 2 – 2.6 for narrow distribution and 2.6 – 5 for a broad distribution.

The table below derived from the witness statement of Ms Anne Marie Fatnes, who was the principal development engineer of Borealis Norway, shows typical values for Borecene and Borealis’ ME 8154/5, a ZN which was sold as a tank grade:

Polymers produced with metallocene catalysts often have a lower weight average molecular weight – Mw - and a narrower MWD reflecting a lower quantity of the longer and heavier chains (the high molecular weight fractions) compared with those produced with Ziegler-Natta catalysts. These longer chains, called tie molecules tie different regions of the polymer together (see para 32 below). The shear force required to produce disentanglement causing the chains to realign in the direction of the shear stress would be greater for a material with higher MW and broader MWD. Conversely, a polymer with a lower MW and narrower MWD would require less shear stress to cause disentanglement and will experience a smaller drop in viscosity in the course of disentanglement.

The following diagram shows (in bold) the so called tie molecules, which are links between the inter-crystalline domains of the semi-crystalline polymer. The crystalline domains are the ordered regions where the chains are in a regular pattern, as opposed to the amorphous regions where the chains are arranged like spaghetti. The ordered crystalline regions are conventionally referred to as spherulites because in most cases the crystals have a broadly spherical shape.

None of Kingspan’s experts has measured the number of tie molecules in Borecene or been able to compare that number with a number derived from ZN material.

Polymers are often characterised by their melt flow index (MFI). This is defined as the mass of the polymer, in grams, flowing in ten minutes through a die 2.1 mm in diameter and length with an applied load of 2.16 Kg at 190 C. MFI (usually specified in whole or half integers) is inversely proportional to the viscosity of the melted polymer – the higher the MFI, the lower the viscosity (resistance to flow). Borecene RM 8402 has an MFR of 6; Borecene RM 7402 has an MFR of 4. ZNs have MFRs ranging from 1.9 to 3.8.

A lower viscosity is likely to be regarded as advantageous by rotomoulders. The material will flow more easily round the mould; shorter moulding cycles are possible as the material melts more quickly and forms parts faster; and faster consolidation allows lower peak internal temperatures.

Higher MFI polyethylenes also have a lower Mw - weight average molecular weight. Thus MFI is an indirect measure of such molecular weight.

Although the term Melt Flow Index is used, the expression Melt Flow Rate (MFR) is more common.

It is important to note that the melt flow index test is carried out at an elevated level of shear, greater than the actual shear levels used in rotomoulding which are very low (hence the habitual reference to polythene’s viscosity at zero shear). Materials whose MFI is similar (e.g. RM 7402 at 4 and Dow NG 2432 at 3.8) will have significantly different viscosity values at 0.1s^-1 viz 2125 Pa.S for the former and 2792 Pa.S for the latter.

The conventional wisdom, prior to the introduction of Borecene, was that polythene resins with a greater MFI had higher flow properties but lesser impact strength and ESCR. Borecene, however, turned out to have improved mechanical properties: see Tables 2 & 3 and Figure 22 in the first report of Dr Nugent (Nugent 1): paras 114,126-7.

Metallocene catalysed PE resins like Borecene contain more highly ordered molecules (and lower amounts of amorphous material) and therefore have, as was a known feature, higher intrinsic crystallinity. Higher crystallinity imparts increased strength and stiffness compared with ZN polymers. Borecene resins are, thus, generally stiffer and stronger. Strong materials, if they fail, have a greater tendency to do so in a brittle manner but this is not always so.

The crystallinity of a product is affected by the conditions in which it is processed. If a tank is cooled more slowly in the course of processing, the spherulites will have more time to grow before solidification causes crystal growth to cease.

Kingspan manufactures its tanks by a process of rotomoulding. I described this process in my judgment in Balmoral in the following terms.

“4

Rotational moulding works in this way. A quantity of polyethylene in powdered form (the charge) is placed into one of the two halves of a steel mould, which are then clamped together. The mould, which is mounted on the arm of a machine, is introduced into an oven and continuously rotated on two axes at a low speed (typically 4- 8 revs/min), so that all parts of the interior surface of the mould pass through the pool. The charge becomes tacky and then melts in the heat (of up to around 300° C), forming a molten pool. As the powder becomes tacky it starts to stick to the mould. More powder sticks to particles that have become tacky before. As a result a layer of viscous, largely immobile, liquid forms over the entirety of the mould. The wall thickness distribution of the melt is largely determined at this stage. The product has, however, to remain in the oven in order to eliminate the bubbles (trapped pockets of gas) in the melt. After about 20 minutes the mould is removed from the oven and cooled. At this stage crystallization of the melt will occur. The crystallizing melt will shrink away from the mould, the rate of crystallization being dependent, in part, on the rate of cooling. When the polyethylene is sufficiently cool, the tank, as it has now become, is removed from the mould. A very high proportion of rotomoulding production is of tanks of one form or another.

Pigmentation

6

Natural polyethylene is white or yellow in colour. A very large percentage, of the oil tanks in the British Isles are "oil tank green". The standard pigment used in almost all cases, including by Balmoral, is a green phthalocyanine based pigment. There are several different brands of such pigment. The addition of a pigment has a deleterious effect on the properties of the natural product (Footnote: ⁵). Further, pigment particles affect the way in which the polymer crystallizes as it cools and hence the crystalline structure. Some pigments, of which phthalocyanine green is one, are nucleating agents i.e. they encourage early initiation of the process of crystallisation.

7

Polymer can be mixed with a pigment in a number of different ways. The two can be dry-blended. In this process polyethylene in powder form is mixed with the pigment either in a blender before being added to the mould or in the mould itself. An alternative process is grind blending whereby polymer pellets are mixed with pigment and the mixture is ground into a powder. Another option is to use a masterbatch. A masterbatch is created by taking a high concentration of pigment and grind blending or compounding it with a base polymer. The resulting masterbatch is then mixed either in a blender or in the mould with virgin polymer. A further process is compounding. In this case polyethylene powder (Footnote: ⁶) is mixed with a pigment under heat in an extruder. The resulting pellet is then ground to powder. The blending process is sometimes carried out by the product manufacturer and sometimes by a third party.

8

In broad terms the evenness of the spread and distribution of the pigment and the homogeneity of the resulting structure are increased, according to which option on a scale from dry blending to compounding is selected (Footnote: ⁷). So is the expense. Dry blending involves no grinding. Grind blending a masterbatch involves grinding only a fraction of the material which will form the charge. Compounding is the most expensive of all because it involves an additional process (Footnote: ⁸). But it provides the best method of mixing and dispersion of the pigment in the product, and the least reduction in the properties of the base resin”.

Borealis supplied Borecene in pellet and powdered form. The Borecenes whose quality and characteristics are in issue in this case are RM 8402, with an MFR of 6, and RM 7402, with an MFR of 4. RM 8402 and RM 7402 are the pellet form. RM 8403 and 7403 are the powdered versions. Borealis supplies Ziegler Natta and Borecene of different MFIs and types with different numbers (the numbers of the pellet and powder forms being sequential, with the pellet number being the even, and the powder, the odd number). In many cases the product has been renumbered during the period with which this action is concerned. Thus RM 8402 started off life as ME 8160. Appendix 1 to this judgment, which is not an agreed document, sets out the details of the numbering according to the Claimants.

All polymers, including ZN polymers, degrade over time when exposed to ultra violet light or heat (amongst other things). The exposure of an organic material such as polyethylene to heat or light in the presence of atmospheric oxygen causes the formation of free radicals which initiate and sustain the process of oxidation (light induced oxidation being faster because of the higher energy of UV light versus heat). This chemical process, unless arrested, produces changes in the polymer structure which can produce, over time, discolouration, deterioration of mechanical properties (tensile, flexural or impact strength) and the formation of visible defects such as cracks. The fact that a tank is heavily oxidised does not necessarily mean that it will fail. Nor does the fact that a crack develops necessarily mean that it will propagate through the material. Stress concentration, which may result from thin walls, thin/thickness transition (particularly at abrupt changes in section), sharp radii or pigment particles, accentuates the formation and propagation of cracks.

Degradation initiates at the weakest chemical bond. As a number of references in the technical literature record, it starts and progresses in the amorphous phase. In polyethylenes the C-H bond will, if a sufficient energy threshold is reached, undergo cleavage. UV and heat in solar light provide energy and that energy may be supplemented by stresses arising at areas of stress concentration. Once bond cleavage has occurred a sequence of reactions causes a fragmentation of the polymer chains (known as chain scission) into shorter oxidised compounds with a worsening of the polymer’s mechanical properties. Scission of the tie molecules makes separation of the crystalline lamellae easier. Fragmentation results in the polymer becoming embrittled. This leads to a reduction of the impact resistance and elongation properties of the plastic. The damaged sites may also establish a new chemical bond between themselves and create a new network of polymer chains, a phenomenon known as cross linking. Research suggests that Polymers in general experience significantly more chain scission than cross linking – something like 8 to 10 times.

The oxidation process in polymers is inhibited by the use of additives.

Antioxidants are additives which are used to prevent the oxidation of polyethylene and other polymers as a result of exposure to heat (generated in the rotomoulding process) or oxygen. The additives react with the chemical intermediates in the process of oxidation (i.e. free radicals and peroxides) and convert them into less harmful products. Antioxidants divide into primary and secondary antioxidants. Primary antioxidants decompose free radicals; secondary antioxidants reduce peroxides. Combinations of the two are widely used in the stabilisation of polyethylene and generally provide better performance than either type alone. Antioxidants are, however, chemically unstable when exposed to ultra violet light. Other products must therefore be used to prevent the oxidative degradation of polymers resulting from exposure to light and oxygen.

These products are referred to as light stabilisers. The most common type of light stabilisers are ultraviolet absorbers and hindered amine light stabilisers (HALS). The former absorb harmful ultra violet light and convert it into harmless vibrational energy. The latter act as radical scavengers, prevent their reaction with oxygen and thereby control oxidative degradation.

HALS were developed in Japan by Sankyo in the 1970s and were subsequently produced and distributed worldwide by manufacturers such as Ciba-Geigy and American Cyanamid. HALS are usually categorised as low- or high-molecular weight types. The former are rarely used in polyethylene. High molecular HALS are widely used and supplied by companies such as CIBA and Cytec. They include brands known as Tinuvin 622, Chimassorb 944, Tinuvin 783 and Cyasorb UV-3346.

Tinuvin 622 was in widespread use in the 1980s for rotomoulding PE grades. It provided much better performance as a stabilisation system than one based on UV absorbers alone. Further improvements took place and new HALS were promoted for applications requiring longer term weathering resistance than could be achieved with Tinuvin 622. At some stage Ciba-Geigy introduced Tinuvin 783. This was a blended product consisting of 50% Tinuvin 622 and 50% Chimassorb 944, which was intended to provide a UV stabilisation performance comparable to Chimassorb 944 with less of the discolouring that the latter product had displayed. A CIBA brochure included graphs which showed Tinuvin 783 performing better than both of its constituent parts used separately.

The Borecene grades supplied to Kingspan by Borealis from the end of 2001 onwards were stabilised with Tinuvin 783 in combination with 1,800 ppm of the antioxidant Irganox B 215 which is a 1:2 mixture of the primary antioxidant Irganox 1010 and the secondary antioxidant Irgafos 168. No criticism is made of the antioxidant package. Borecene RM 8402 as supplied to Kingspan contained a target concentration of 1,300 ppm of Tinuvin 783 and RM 7402 had one of 1,500 ppm.

Various pigments are used as colouring agents in plastics. They have different effects on the weather resistance characteristics of the final part. Generally speaking pigments provide some protection to the polyethylene substrate by blocking the permeation of harmful ultraviolet light. Carbon black pigment, which blocks light across the whole 300-3,000 nm spectrum, is well known to have a beneficial effect in this respect. But some pigments have a negative effect on the weathering performance of polymers. Thus, some yellow and red organic pigments are unstable to ultra violet light and may actually accelerate degradation during weathering. Some phthalocyanine green pigments contain copper ions which are, to use Mr Halvorsen of Borealis’ phrase, “poisonous” to polyethylene. The effect of any given pigment (i) differs not merely from colour to colour but also from particular pigment to particular pigment; (ii) may be either positive or negative; (iii) and is dependent on the concentration of the pigment and the type and concentration of the light stabiliser (s) employed.

Oil tanks are often made with a “tank green” colourant. The pigment used by Kingspan was such a colourant whose major component is phthalocyanine green. There are, however, many different pigments which contain phthalocyanine green.

Over the period with which this case is concerned various standards for weather resistance have either been in force or in the course of preparation.

The Oil Firing Technical Association for the Petroleum Industry (OFTEC) is a voluntary trade association consisting of tank manufacturers, installers, and material suppliers. The claimants were all members of OFTEC. OFTEC prescribed a standard: OFTEC Oil Firing Equipment Standard OFS T 100:1999 Polyethylene Oil Storage Tanks and Bunds for Distillate Fuels. That standard was published in April 1999 (replacing an earlier one in 1994) and known as OFS T 100 (“the OFTEC Standard”) - for the manufacture of domestic oil tanks.

One of the reasons why OFTEC produced a standard of its own was because of the delay that took place in the production and coming into force of a European standard. It was introduced in order to ensure that UK tank manufacturers produced tanks in accordance with the draft European standard which was due to come into force, to which I refer below.

The Comité Européen de Normalisation (CEN) is a European Committee for

Both the prEN13341 and the OFS T 100 standards addressed the criterion of resistance to UV radiation. Prior to September 2000 prEN13341 provided:

“Weather Resistance

For outside installations, after exposure to total irradiance of 22GJ/m2 (900 kilolangleys), equivalent to 10 years exposure in a Northern European climate, the elongation at break shall be greater than 50% of the initial value”

The OFTEC Standard was similar. It provided as follows:

“4.1.6

Weather Resistance

When determined in accordance with sections 5.1.5 and 5.1.3 the elongation at break after exposure to a total irradiance of 22GJ/m2 (900 Kilolangleys) shall be greater than 50% of the initial elongation to break.

These terms require explanation. Irradiance is the radiant flux hitting a given surface area. Irradiance measured by relation to an interval of time is referred to as radiant exposure. The SI (Footnote: ⁹) measure of radiant exposure is J/m² – joules per square metre. GJ/m² (Gigajoules per square metre) means 10⁹ J/m² i.e. 1 billion joules per square metre. A Langley is also a measure of irradiance, which is used in the US and other countries which do not use SI units. 1 Langley = 41,840 J/m². A kilolangley (Kly) is 1,000 langleys. 1 GJ m² = 24 Kly.

The amount of irradiance to which a tank will be exposed depends on where it is in the world and whether and to what extent it is protected from the sun. The amount of irradiance in any given place in any given year will depend on the weather pattern and will differ from year to year. Typical solar irradiance in the British Isles is of the order of 80kly per year (Footnote: ¹⁰) (Footnote: ¹¹). Tanks in the UK and NI were often, but not invariably, sold with 10 year guarantees. 10 years of solar irradiance will, therefore, equal approximately 800kly or 33.5 Gj/m² (Footnote: ¹²).

The elongation at break test, to which the two standards refer, is a test of tensile strength. A specimen of material is taken, which may be in one of two forms. The first of these is a piece of rotomoulded product. A box or cube is rotomoulded. A piece is then cut from the side in the shape of a dog bone. The second is a compression moulded plate. This involves taking a sample from a rotomoulded product, such as the side of an oil tank, melting it and then compressing it down so that it becomes a thinner plaque. It is then made into a dog bone and tested. This form of specimen allows the testing of the thicker parts of rotomoulded products which might otherwise be too thick to be sampled.

The dog bone specimen is put under stress by being stretched in a special machine until it breaks. The extent to which it becomes elongated before breaking and the percentage by which the material stretches compared to its starting length are recorded. These are the reference figures. The elongation before break may be substantial – e.g. by 10 times or 1,000%. Unexposed Borecene had very substantial EaB figures. The more a material is able to be elongated without breaking the lower its brittleness and the higher its ductility.

The best way to test weatherability i.e. resistance to UV would be to expose samples of the product in the area where it is to be used and to see what happens over the contemplated period of its use. But products made from polyethylene are often intended to be used for many years. Tests in real time are done; but, for practical commercial reasons, especially when a new product is involved, some form of accelerated weathering test is used.

Accelerated testing is done in a Weather-O-Meter (“WOM”), a machine which simulates natural weathering especially by light. The specimen is placed in the WOM for what may be several thousand hours. After a specified period in the WOM, e.g. 1,000 hours, the sample is put in the stretching machine and its elongation at break (“EaB”) measured. The elongation at break is expressed as a percentage of the elongation at break of the original unexposed specimen. The testing continues with other samples exposed to increasing hours in the WOM until a sample’s EaB decreases to 50% of the reference value, or less, at which point it is deemed to fail the test.

Thus if the reference specimen was elongated by 700% when it broke originally there will be a failure if it is only elongated by 350% when it breaks (at, say, 1,000 hours) because that is 50% of the original figure.

The EaB test will not tell you when the material will fail. A specimen which breaks after, say, 3,000 hours will have been deliberately stretched in a manner which the polymer would not endure in service. The fact that a given polyethylene will, in those conditions, have been reduced to 50% of its original value after x hours does not mean that a tank made from the same material (to which no stretching has been applied) will fail in the field after the same interval.

That would be so even if the conditions in the WOM exactly replicated the conditions applicable to any given tank in service. But they do not. 80 Klys of irradiance from exposure in the WOM does not have the same effect as an overall irradiance of 80 Klys over, say, a year in service in the UK. For one thing, the exposure in the WOM is constant; whereas 80 Klys of exposure over the course of a year will be made up of extremely varied degrees of irradiance from moment to moment. And the irradiance will be at a higher rate (Footnote: ¹³). In those circumstances things can happen to the material which would not happen in normal circumstances.

There are several other reasons why there can be no equivalence. ISO 4892-1 (1999), a standard governing accelerated UV exposure, states that:

“even though it is very tempting, calculation of an “acceleration factor” relating “x” hours or megajoules of radiant exposure in an accelerated laboratory test to “y” months or years of actual exposure is not recommended”

and gives, in para 4.1.4 eight factors that may decrease the degree of correlation between laboratory tests and exterior exposures. The majority of those (e.g. “light intensities higher than those experienced in actual use conditions”) suggest that the laboratory tests will exaggerate the effect of the actual irradiance to which a tank may be subject. As Professor Malatesta records, light in accelerated tests is not like sunlight, and temperatures are higher than in a natural environment, and these may lead to chemical reactions which would not occur under daylight exposure.

There are other relevant features of the test. It mainly measures the extent to which the polymer breaks down at the surface as it degrades. This is relevant for present purposes because the tanks are said to have failed because of degradation which began on the surface as a result of UV. But the test is very sensitive to defects in the sample which may cause the sample to fail earlier for reasons other than UV degradation e.g. because of bubbles or other deformities as a result of which the sample will be stretched to break more easily than it would otherwise. FTIR testing (see para 759) may be a better method of determining whether there is UV degradation. The standard deviation on the tests is very high. Further, Borecene, as Borealis regularly pointed out, is at a disadvantage compared with other material when the EaB test is used. Its elongation to break before exposure is often much more than that of other materials; it reduces more markedly upon exposure; but, after any given exposure, the EaB which represents 50% of the original EaB figure for Borecene may still be greater than, or at least comparable to, the EaB for other materials. I call this “the EaB test disadvantage point”.

Not surprisingly, therefore, the experts are agreed that there is no demonstrated correlation between an accelerated ageing test in a WOM and a tank’s service life (Footnote: ¹⁴). ISO 4892-1 recommends that results from WOM tests are best used to compare relative performance. Dr Botkin, Kingspan’s expert, agreed that, when a sample has reached 50% of its initial EaB, it is likely to have a significant proportion of its mechanical properties intact. Mr Svein Jamtvedt, a senior polymer scientist of Borealis, whose evidence I found convincing, regarded it as a very conservative estimate of when a product was likely to fail in service.

When, therefore, in the rest of this judgment, exposure in the WOM is converted into years of outdoor exposure, the conversion is not to be treated as anything like exact.

In 2005 Kingspan caused RAPRA (Footnote: ¹⁵) to carry out a series of accelerated EaB weathering tests on four ZN grade materials (Dow, Matrix and Exxon and Borealis’ RG 7402) to determine whether they complied with the requirements of prEN 13341, which was then in force. 1 mm samples compression moulded from rotomoulded tanks (as the standard then required) failed in the case of Dow after only 3,000 hours and looked likely to fail by 10,000 hours in the case of Matrix and Exxon. Since the tests were on materials which Kingspan regarded as reliable, the results took those concerned aback. The assumption was that it was the tests which were defective, not the materials.

In the result a proposal, which Dr McDaid supported, was made by RAPRA and Impact Laboratories, the two CEN UK accredited test houses, to change to a 4 mm sample on the basis that a 1 mm sample was “flawed”, being unrepresentative in terms of thickness (the tanks as made are thicker and thickness improves UV resistance) and molecular morphology. Subsequently a 3.5 mm sample was proposed and eventually EN 13341 was changed to require 3 mm samples. Dr McDaid agreed that, given the flawed nature of the test, the fact that green pigmented Borecene samples had failed the prEN 13341 standard in October 2002 was “meaningless”.

In 2007 Kingspan carried out further tests through RAPRA and Impact Laboratories on 3 mm and 4.5 mm samples. The RAPRA tests showed that out of 5 materials, including Dow NG 2432, only 2 (Borealis’ RG 7402, which was a ZN, and Total M 4041, a metallocene material) had not failed by 8,888 hours. Both samples failed the prEN test of 34GJ/m². The Dow 3 mm sample would probably have failed the 22 GJ/m² test of the OFTEC Standard (Footnote: ¹⁶). By contrast in the Impact tests all the materials passed after 10,700 hours.

Tests by Impact in 2006 on 1 mm samples from tanks produced from the Dow material by five different manufacturers had shown significantly different results (50% of original EaB at between 3,200 and 8,800 hours); and that none of the tanks would meet the 34 GJ/m² requirement and two would fail after 22 GJ/m² of exposure. Dr Botkin, a Kingspan expert, accepted that this showed that rotomoulders can significantly affect the UV resistance of the grades of materials that they use by their rotomoulding process.

The matters set out in the previous paragraphs indicate (a) the variability of accelerated weathering tests; (b) the fact that tanks made of material in which one has confidence based on experience can fail them; (c) the limited correlation between the results of such tests and actual performance in service; and (d) the significant effect of processing on UV performance. Similarly both pigmentation (type and method of incorporation) and design (which affects stress) affect UV resistance/weatherability.

There is a measure of disagreement between the experts as to the utility of the EaB test. Professor Williams, a Kingspan expert, thought that it “tells you almost nothing”.

Whatever its merits or demerits, it has become a de facto global standard. It seems to me that the test will give a good approximation of what is probably the minimum lifetime of the polymer but that the actual life may well be much greater.

The reference in prEN13341 (until September 2000) and in the OFTEC standard to “22GJ/m² (900 kilolangleys)” is inaccurate – a remarkable error. 22 GJ/m² in fact equals only about 530 Klys – about 6.5 years at an annual solar radiance of 80kly. 900 Kly is about 37.7 GJ/m². This error was noted at the OFTEC committee meeting on 15 September 1999 (see para 249). In September 2000 the draft of prEN13341 was revised to change from 22 GJ/m² to 37.6 GJ/m². A copy of this version was sent by Dr McDaid to Ms Fatnes on 20 September 2000. In 2001 the draft was revised to 34 GJ/m². This represents about 10 years at 80 Klys per year. The OFTEC 1999 Standard continued to state the weathering test requirement to be 22 GJ/m² until at least November 2002.

I say “at least November 2002” because during the course of the trial Kingspan disclosed to Borealis, as I was told in January 2012, a version of the OFTEC Standard which did not include reference to 22 GJ/m² but prescribed the material requirement as being that the material should “meet the requirements of prEN13341”. No reference was made to this version in the evidence of any witness, lay or expert, or in the extensive written or oral closing submissions (which included the contention that “The OFTS standard of April 1999 was the standard in force over the period in which Borealis supplied the Claimants with Borecene (2001-2003”) (Footnote: ¹⁷); and it was only in response to a question posed by me in the course of writing this judgment that I was referred to it at all. Borealis submit that in circumstances where no suggestion had been made until then that there was an amendment in force in November 2002 it is not clear that the November 2002 amendment was in force at that date.

I am left in some doubt as to whether the amendment was in fact in force in November 2002. If it was, no one concerned with this case appears to have noticed it. I note that on 12 June 2003 Dr McDaid emailed to David Bradley to say that prEN13341 should be in place within six months and said that once the dates were confirmed she would draw up a timetable concerning various stages of implementation. There was no suggestion that this standard was, in effect, already in force, via the OFTEC Standard. Nor have any minutes been produced of OFTEC meetings discussing the change or any notification of it. There is no evidence that Kingspan appreciated that there had been any change in the OFTEC standard, or when they did so, or that in 2002 they made any fresh request for a letter of conformity to the prEN13341 standard.

If the amendment to the OFTEC standard was in force it would add a further complication. prEN13341 does not provide for a letter of conformity in respect of tank type tests. The tank is required to satisfy the prEN13341 requirements. It is not apparent that in or by November 2002 any tank testing had been done to establish satisfaction of the prEN13341 requirements. However, the November 2002 version of the OFTEC standard does still call for a letter of conformity in the case of new or alternative material grades. There is in the papers a further version of the OFTEC standard of February 2003 with the words “Amended draft” in manuscript at the top. That does have the following provision:

“NOTE1 Until the implementation of EN 13341 and at OFTEC'S discretion a letter of conformity from the Raw Material Manufacturer can be accepted as a means of compliance with the requirements of Table 1 of Pr EN 13341:2004”.

In order to reach 34 GJ/m² it would be necessary to have somewhere in the region of over 13,500 - 15,300 hours in a 0.35 W/m² WOM and about 10,000 hours in a 0.51 W/m² WOM: for the distinction see paras 85- 92 below.

The earth receives radiation from the sun in the form of UV radiation (wavelengths 290 - 400 nm), visible light (wavelengths 400 - 800 nm) and infrared radiation (wavelengths over 800 nm). WOMs incorporate xenon arc lamps and glass filters. With the proper lamp and filter combination, the relative level of irradiance as a function of wavelength is comparable to that of natural sunlight at wavelengths in the UV region of the spectrum (i.e. less than 400 nm).

Accelerated weathering using weatherometers is subject to two different industry standards: (1) ISO – 4892 Plastics Methods of exposure to laboratory light sources and (2) ASTM – G155 Standard Practice for Operating Xenon Light Arc Apparatus for Exposure of Non-Metallic Materials (Florida Weather).

The irradiance level of a WOM is measured at a standard wavelength (usually 340nm) and also over a range of wavelengths (usually 300 - 400 nm). Under ISO 4892-2 the specified radiance level is 0.51 W/m² at 340nm, which corresponds to 60 W/m² over the 300-400nm range. This was the level used in the Borealis WOM and is often used in Europe. Under the OFTEC Standard the specified radiance level is 0.35 W/m² at 340 nm, which corresponds to 41 W/m² over the 300-400nm range. The OFTEC Standard required testing to be carried out at this irradiance level, which was also the level used by (i) Ciba Speciality Chemicals, (ii) Cytec Industries and (iii) in North America where weatherometers are operated in accordance with ASTM – G155 (formerly G 26) which specifies the lesser irradiance. The difference in levels means that the effect of exposure for 1,000 hours differs according to which type of WOM has been used.

There is a further system of categorising resistance to UV light, namely the UV-X system. This is a North American system (first devised by Exxon Mobil in the USA). The number in the UV-X rating refers to the number of hours (in thousands) in which the product can last in a WOM operating to US standard ASTM D 2565 -99 before its

The OFTEC and CEN standards committees required performance to be measured by reference to exposure to total irradiance measured in GJ/m². It is possible to convert irradiance in the WOM to an estimated solar irradiance. In this respect the calculations of Kingspan’s expert (Dr Botkin) are done on the basis that irradiance in the 300 – 400 nm range constitutes 6.8% of the global spectral irradiance using the 300-2,450 nm range of wavelengths, as specified in Table 1 of ISO 4892-1. Accordingly an irradiance of 60 W/m² over the 300 - 400 nm range corresponds to a global solar irradiance of 880 W/m² (60 divided by 6.8%). In order to determine the radiant energy represented by a given exposure in a WOM the global solar irradiance is multiplied by the exposure time in seconds (1 hour being 3,600 seconds).

For example, 4,000 hours of accelerated weathering in a WOM with a specified radiance level of 0.51 W/m² at 340nm corresponds to a total radiant energy of 12.7 GJ/m² and 305 Klys calculated as follows:

The defendant’s expert (Professor Malatesta) proceeds on the basis that global irradiance is in the somewhat wider range of 295-3,000 nm. As a result the calculations of the parties differ somewhat.

The upshot of those calculations, which are agreed but do not purport to be exact, is, by way of example, as follows:

Appendix 2 to this judgment contains agreed tables giving further data in respect of years 1-6 and data from years 1 – 10 on an assumption of 90 Klys per year irradiance.

The interrelationship between the standards and the concepts they employ is somewhat confusing. The OFTEC Standard, which was in force as a Code to which OFTEC members agreed to subscribe, specified until at least November 2002 that sections from the moulded tank should have an EaB of more than 50% of the initial EaB after exposure to “22 GJ/m² (900 Klys)”. It said nothing about 10 years. 900 Klys would represent 10 years of exposure in Northern Europe on a basis of 90 Klys per year. The OFTEC Standard prescribed a test in a WOM of 0.35 W/m² for 10,000 hours. This would not amount to 900 Klys although it would amount to about 22 GJ/m². So the test procedure married up with the 22 GJ/m² figure (about 6 years). Had a WOM of 0.51 W/m² been prescribed it would have been equivalent to 800-900 Klys.

The prEN13341 standard, which was not in force until 26 April 2005, referred (initially) to “22 GJ/m² (900 Klys)”. That was expressed to be “equivalent to 10 years exposure in a Northern European climate”. The latter quoted words were included when the figure was changed to 37.6 GJ/m², but omitted when it was changed to 34 GJ/m². The standard required testing in a WOM of 0.51 W/m² on samples cut from the moulded tank. Kingspan did not sell its tanks as CEN certified.

Impact tests are often used to measure the resistance of polyethylenes to impact and may provide useful information and enable a ranking of materials. It was Dr Botkin’s view that such tests are a much less sensitive means of assessing surface degradation resulting from weathering than EaB tests because, in his experience, the tensile impact strength of a polyethylene decreases much more slowly during weathering than does its elongation at break. By contrast both Mr Jamtvedt and Ms Fatnes, and Professor Marshall, regarded tensile impact tests as more reliable because of the sensitivity of EaB tests to sample selection and the high degree of variation. In addition they did not discriminate against Borecene in the manner described in para 70 above. Tensile impact testing was the testing method used by CIBA and preferred by KIWA (the Dutch certification body).

In one version of the test a specimen is struck by a weighted pendulum with a striker attached moving at high speed and the amount of energy per unit area expressed in J/mm² required to break the test specimen is the tensile impact strength.

In another version measurements are taken either of the height from which a striker has to drop, or the weight of the striker that has to be used from an unchanging height, in order for failure to occur. A load measuring instrument can be incorporated in the striker head to measure the loads and deflections at the moment when the striker is in contact with the specimen. This test is commonly carried out when the PE has been held at very low temperatures, e.g. - 40°C (to encourage embrittlement). Kingspan and their experts have not carried out any such tests. A series of tests carried out before 2002 showed that Borecene had superior impact characteristics to non Borecene resins as its increased crystallinity would lead you to expect: see the first

The OFTEC Standard contains a number of definitions including:

“3.5

Raw Material

Section 4 is headed “REQUIREMENTS”. It provides in para 4.1 for “Material requirements” and in para 4.2. for “Constructional Requirements”. Section 5 is headed “TEST METHODS”. Section 5.1. prescribes “Material Tests” and Section 5.2. “Construction Tests”.

Sections 4.1.1 and 4.1.2 provide for material composition and density.

Section 4.1.3 is headed Melt Flow Rate and reads:

“When determined in accordance with Section 5.1.2 the melt flow rate of the raw material shall be less than 5g/10 min and greater than 1.5g/10 min. The melt flow index measured on the moulded tank shall have a maximum allowable variation of -15% and + 15% of that value measured on the raw material used.

Where a PE grade is used that is not a conventional MDPE (e.g. a metallocene) then a Melt Flow Rate outside this tolerance may be allowed if the suitability of the grade can be proved”. [Bold added]

The second paragraph of section 4.1.3 was added in April 1999 with the introduction of Borecene which often has MFRs in excess of 5.

Section 5.1.2. provides:

“5.1.2.

Melt Flow Rate

The melt flow rate is measured on the raw materials and on sections taken from any location on the moulded tank and of the bund and of the bund cover, in accordance with ISO 1133 Condition 4.” [Bold added (apart from heading)]

As can be seen sections 4.1.3.and 5.1.2 require a measurement of the MFR of both the raw material (which Borealis produces) and “the moulded tank” and any bund or bund cover. In addition sections 4.1.4 (Tensile Properties) and 4.1.5 (Resistance against

There is good reason for requiring tests on the moulded tank. In the case of Weather Resistance, for instance, the processing of the polymer, the nature, quality and quantity of the pigment and the way in which it is mixed with the polymer (dry blending, compounding, or masterbatch) may affect, beneficially or prejudicially, its weather resistance characteristics. So also may the design of the tanks and the wall thickness and wall thickness variation involved.

Section 4.1.6 provides, as we have seen :

“4.1.6

Weather Resistance

When determined in accordance with sections 5.1.5 and 5.1.3 the elongation at break after exposure to a total irradiance of 22GJ/m² (900 Kilolangleys) (Footnote: ¹⁸) shall be greater than 50% of the initial elongation to break.”

Section 5.1.5 provides

“5.1.5

Weather Resistance

Samples cut from the moulded tank, the bund and the bund lid are exposed to UV radiation with a Xenon lamp in accordance with ISO 4892. Alternatively, test specimens can be taken from compression moulded sheets, moulded from pieces from the moulded tank, bund and bund lid.

The condition of the weather test will be:

(a)

Xenon

(b)

Black Standard Temperature 65°C

(c)

R.H. – 50%

(d)

Spray – 18/102

(e)

Test duration – 10,000 hours

(f)

Test irradiance at 340 nm – 0.35 w/m²”

Sections 4.2.1 – 4.2.10 make a number of constructional requirements under the headings; Nominal Capacity and Tolerance, Visual Inspection, Weight, Wall Thickness, Impact Requirements etc. Para 4.2.4 provides:

“4.2.4

Wall Thickness

For storage of Class C1 and C2 fuel to BS 2869 the minimum thickness for the tank or bund shall be 4.5mm.

A margin of 10% of the wall thickness is permitted in zones clearly defined by the manufacturer on a specification document submitted to the OFCERT Directorate, with justification that it has no effects on the physical properties of the tank.”

This requirement was imposed in order to provide a sufficient protection against the permeation of fuel though the tank. It is not concerned with structural integrity.

Para 4.2.6. provides:

“4.2.6

Deformation Requirement for Tanks

4.2.6.1 Tanks with a brimful capacity equal to or less than 3500 litres

When tested in accordance with Section 5.2.6.1 the deformations shall be as follows:

Max increase in volume	12.5%
Max increase in length	12.5%
Max increase in width	13.5%

In the case of a vertical cylindrical tank only the volumetric limit shall apply”

Section 5.2.6.1. provides (for tanks less than 3,500 litres) the following creep test (Footnote: ¹⁹):

“5.2.6.1 The tank shall be subjected for 42 days to a hydraulic pressure 30% greater than that which would be exerted at the lowest point of a full tank. The temperature of the test room shall be 23°C ± 2°C.

The test shall be carried out as follows:

Locate the tank in the centre of a reference grid

Stabilise the tank in position by the addition of 300mm of water

Measure the width and length of the tank

Fill the tank with water at approximately 700 litres/hr ± 100 litres/hr

Measure the capacity to within ± 0.5%

Apply the excess pressure. Check and maintain the excess once per day during 42 days

Measure the change in length, width and volume, immediately after applying the excess once per day during the 42 days. Check daily whether the dimensions still comply with the requirements.”

Section 6 provides:

“6.0

TYPE TEST

Section 10 provides:

“10.

APPROVED MATERIAL GRADES AND NEW OR ALTERNATIVE MATERIAL GRADES

10.1

Where a manufacturer has an approved range of models in a particular grade of MDPE, the method of approval for a new or alternative grade to Section 4.2 is as follows:

1)

The Test House shall identify up to three models of tank in the range for assessment in the new material, based on performance against OFS T100 Section 4.2 in the conventional grade.

2)

The manufacturer shall supply those models identified for full testing to OFS T100 Section 4.2. The samples shall be of conventional weight of the tank model under review.

3)

The results found shall be compared to the conventional material, and where the comparison is favourable, a full pass across the whole range of approved models can be given to Section 4.2.

4)

Full approval is at the discretion of OFTEC and requires a Letter of Conformity for the Raw Material and an ISO approved Quality System as specified in 7.2.

The Standard by its terms requires that conforming tanks should in fact satisfy the Weather Resistance (as well as other) material tests. Section 1 of the Standard, headed “Scope”, provides that “This standard specifies requirements for static thermoplastic tanks...” [Bold added]. The same section provides that “The purpose of this standard is to define material used, requirements and test methods for type tests and production quality control tests”. One of those requirements is that the samples for the section 5.1.5 test should be samples from one of the moulded tanks whose type was being tested. A requirement to take samples from the moulded tank was also made in respect of the Melt Flow Rate under 5.1.2 (see para 104 above), the Tensile test under 5.1.3, and the Resistance against Oil test under 5.1.4.

The Standard thus contemplates two forms of test:

Under section 6 a type of tank is under test. The second paragraph of the section requires the construction tests specified in section 5.2 to be carried out and the first requires a letter of conformity to the material tests from the material supplier. One of the requirements of the material tests (Density) calls for a test on the raw material only. Another (Melt Flow Rate) calls for tests both on the material and the moulded tank. The remaining three require tests to be carried out only on the moulded tank. Since the material supplier will not be the manufacturer of the moulded tank being tested, the question arises as to what the letter of conformity is required to say in respect of tests on a section from the moulded tank. Is it to state (i) that the material supplier expects the material to satisfy the moulded tank tests; (ii) that the supplier warrants that it will; or (iii) that the supplier has carried out the moulded tank tests on a tank of the type under test or, at any rate, some form of moulded tank; or (iv) something else?

The problem is particularly acute in relation to the Weather Resistance test which requires thousands of hours of radiation and where the characteristics of the moulded tank will or may fundamentally affect its weather resistance and are entirely in the hands of the manufacturer. In the ordinary course of things the material supplier may, as Borealis did, have the means of manufacturing some form of product – in Borealis’ case a small production machine on which they used, mainly, a square box mould but for which they had moulds with more complex shapes. But it will not know, unless told, the pigment to be used by the manufacturer, the details of the design of the tank or the intended processing conditions and is unlikely to be able to replicate them. It cannot, therefore, testify to compliance (as opposed to an expectation of compliance) unless it has been provided (as Borealis never was) with a section of the moulded tank and has carried out the relevant tests.

PDC interpreted the Standard as allowing Kingspan to satisfy OFTEC’s requirements without conducting its own tests on the material on the basis that it was incumbent on the material supplier to establish that the products produced using the material satisfied the UV thresholds. In the event none of the claimants carried out, nor did they procure to be carried out, any of the moulded tank tests on any tank that they had made. What they did do was to obtain letters of conformity from Borealis.

Borealis submits that Kingspan was in error. It is for the tank manufacturer, whose processes and pigmentation can fundamentally alter the raw material, to meet the requirements by carrying out the tests on his moulded tanks which the Standard prescribes.

The first Borealis letter of conformity, issued on 16 August 1999, was in the following terms:

“This is to inform you that the Borealis Polyethylene ME8161 as supplied to PDC, when processed according to Good manufacturing practice, is expected to meet the requirements of the OFTEC Oil Firing Equipment Standard OFS T100 (May 1994). That is/

5.

Weather resistance exceeding 22 GJ (TUVR).”

There was a reason for, and a history behind, the use of letters such as this. The Polymer Development Centre at Athlone (hereafter “Athlone” to avoid confusion with PDC), which was the OFTEC approved Test House, did not at the relevant time have the capability to carry out UV weathering tests. In early 1999 it was thought that a WOM would be available by July. In the event it was not available until after 2003. (Mr Gregg’s evidence was that the test equipment had to be certified by a body called NAMAS (Footnote: ²⁰) to ensure that the correct levels of radiation were delivered by the machine and that there was some problem with the equipment as a result of which Athlone concluded that they could not test in accordance with the European standard). The problem could not be solved by the use of another Test House because there was no OFTEC approved Test House capable of performing the UV weather resistance test. Kingspan, itself, did not have the ability to undertake testing according to the Standard; and was not approved for the purpose (Footnote: ²¹).

Reference to a letter of conformity in the OFTEC Standard first appeared in the 1999 version. Para 6 of the June 1994 version had said “The following list of tests, described in section 5 of this standard should be carried out when a tank is being type tested”. There then followed a list of the material and constructional tests. But a practice developed of material suppliers issuing letters of conformity: see the letter of conformity given by Enichem to Plashapes (Titan) in September 1994, in which Enichem stated that “the following parameters as measured in our laboratories do comply with the requirements of [the Standard]” [Bold added], and then set out the material requirements.

Athlone produced a template for letters of conformity. In January 1999 Athlone faxed to Mr Gregg of PDC a letter of conformity with the name of the material redacted and “grade name + material supplier name” inserted which read:

“This is to inform you that the grade name + material supplier name, when processed according to Good Manufacturing Practice, is expected to meet the requirements of the OFTEC Oil Firing Equipment Standard OFS T100 (May 1994)”

Against this appear in manuscript the words added by the sender “Typical statement”. There were then set out the 5 material properties (Density, MFI, Tensile properties, Resistance against Oil, and Weather Resistance) and the criteria applicable. The last of those was:

“Weather Resistance exceeding 22 GJ (TUVR)”

A typed up copy with the words “Supplier Letterhead” dated 12 January 1999 with the added words “as supplied to the Kingspan Group” after “...material supplier name” was also generated by Kingspan.

The reference to 22GJ should obviously read GJ/m². TUVR stands for Total Ultra Violet Resistance whereas the Standard refers to total irradiance.

Polimeri Europa France (“Polimeri”) provided a letter of conformity for Titan in February 1999 with similar introductory words to those set out above in respect of a material which was similar to DuPont 8504. This indicated in relation to the tests which referred to moulded tanks that “The test is made on the final article ant (sic) thus we cannot give guarantee; but from our general knowledge we expect it to comply”.

In August 2000 Mr Peter Schindler, who was then working with Dow, gave Kingspan a certificate of conformity in respect of Dowlex NG 2432 which was in the “expected to meet the requirements” form. In it he recommended confirming the tensile and resistance to oil requirements in Kingspan’s own laboratory because the tests “were supposed to be tested on a piece of moulded tank”; and said, in relation to the weathering requirement, that the natural material had just passed, and pigmented samples would have to be tested, which were expected to show improved resistance. His evidence was that, even with a letter of conformity, he advised rotomoulders to test the product themselves.

OFTEC was well aware of the practice of relying on letters of conformity as appears from an annex to the minutes of an OFTEC meeting on June 11 1998:

“At present there is no independent testing carried out on material properties. MA (Footnote: ²²) has prepared a price list for the various tests which can be conducted at the Polymer Development centre and it will be up to the Committee to decide whether to proceed down this route or stick with the current arrangement of accepting manufacturers’ certification”. [Bold added]

In 1998 and 1999 there was some discussion within OFTEC as to how to deal with these problems. The idea of a list of materials that had already been approved was mooted but that idea was not progressed.

On 18 February 1999 Mr Mark Atterbury, the technical manager of Athlone sent a memo to OFTEC Committee OFC/4, a subcommittee of plastic and steel tank manufacturers (“the Tank Committee”), with a proposed final draft of an updated version of the 1994 standard. The proposal was that section 6 should begin with the sentence: “A letter of conformity to sections 5.1.1 to 5.1.5 from the material supplier is required until further notice from the OFTEC directorate”. The idea was, as Mr Gregg explained, that letters of conformity were to be used until material testing could be undertaken in compliance with the OFTEC Standard and the pending EN13341 standard.

The April 1999 version of the OFTEC Standard introduced the requirement for a letter of conformity in respect of the section 5.1 material tests requirements by the inclusion of the following as the opening sentence of section 6:

“A letter of conformity to Sections 5.1.1 to 5.1.5 from the material supplier is required”

coupled with the enumeration in the “following list of tests ... to be carried out” of the constructional, but not the material, requirements.

It is apparent from the history leading up to the amendment and its terms that OFTEC contemplated that the type test would, so far as material requirements were concerned, be satisfied by a letter of conformity from the material supplier. Whilst the Standard did not exhibit a typical letter, OFTEC must have contemplated the continued use of the template that Athlone had earlier put forward.

Section 10 of the 1999 Standard was also new. It was entitled “Approved Material Grades and New or Alternative Material Grades”. Its terms are set out in para 114 above. It deals with the situation where a tank type has already been approved by the manufacturer who wishes to make that tank from a new material. In such a case Section 10 required the section 4.2/5.2 tank construction tests to be carried out at Athlone on up to 3 models of tanks. An OFTEC certificate could then be issued once the material supplier provided the manufacturer with a Letter of Conformity in respect of the Raw Material (and the site had an ISO Approved Quality System) This was how Dr McDaid understood the system to work.

That begs the question as to what “a Letter of Conformity for the Raw Material” under 10.1.4 was supposed to relate to. Borealis draws attention to the reference to “the Raw Material” i.e. the virgin polymer and submits that that means that only the characteristics of the raw material specified in section 5, which do not include the weathering requirement, need be the subject of the letter. I do not regard this as correct. It seems to me that the Standard intended that, in the event of a new material, the same sort of letter of conformity should be given as under section 6 i.e. a letter of conformity to sections 5.1.1. to 5.1.5. In any event it was such a letter which Borealis gave.

This situation meant that, whilst the OFTEC Standard laid down requirements which could only be met if samples from the moulded tank satisfied the requisite test, OFTEC was prepared to treat compliance with those requirements as established without any test having been carried out by any Test House on the moulded tank in question, on the basis of a letter of conformity from the material supplier as to his expectations of how his material, once moulded, would perform. Any such expectations could not, as Kingspan knew, have been based on any testing on sections from the tanks as moulded by Kingspan and with the pigment used by it (Footnote: ²³).

This was an unsatisfactory state of affairs in relation to tanks intended to hold inflammable liquids capable of causing great environmental damage. A material, which the Standard required to be tested on rotomoulded tanks, would, from Oftec’s perspective be approved as an alternative material grade, and a tank made from that material would pass the OFTEC tank type test, even though the material and any tank made with that material had not been tested as the Standard required. This state of affairs resulted in part from the fact that testing for UV resistance is a time consuming and expensive exercise (about £ 3 per hour in 1998 for what might take over a year if the WOM was to replicate 900 Klys) which Kingspan and other tank manufacturers wished to avoid if they could. Moreover the need to carry out such testing could be a significant disincentive to any rotomoulder who contemplated changing material, and thus a problem for anyone who might seek to persuade them to do so.

I recognise that WOM trials carried out on natural Borecene (or any other new material) will enable some assessment to be made as to how long tanks made from it could be expected to last. The value of any such assessment depends on the nature of the tests and the results. These might well be an inadequate substitute for tests on the tanks as made by the manufacturer in question, which is what the Standard requires, particularly when the pigment and process adopted could make a very substantial difference (in either direction) to the weather resistance of the end product. If a manufacturer wants to know how well his tank will weather he needs to perform weathering tests on pieces cut from a tank made by his process, with his pigment and to his designs. That is what Dr Botkin, Kingspan’s expert, would emphatically have encouraged; and he would have cautioned against selling tanks without testing of those tanks against the OFTEC Standard.

Dr McDaid said that she thought that a letter of conformity was as good as the Section

Borealis knew of the OFTEC Standard at the beginning of its dealings with Kingspan. It was, itself, a member of OFTEC. Ms Fatnes attended meetings on its behalf from 18 February 1999 onwards (Mr Shorter had attended before). She was well aware of the OFTEC weathering requirement.

She also became aware – see paragraph 249 below – that the figure of 22 GJ/m² was an incorrect conversion of 900 Klys and should have been c. 37.5 GJ/m² and that to resist 900 Klys a tank would have to withstand much more than 22 GJ/m².

I am, also, satisfied that Borealis knew that, for OFTEC purposes, the letter of conformity was intended to constitute evidence of compliance with the material requirements of OFS T100, and to constitute a representation by it (but not a warranty) that the material referred to in the letter was expected to provide the specified level of weather resistance, if processed in accordance with good manufacturing practice. That that is so is apparent from the matters to which I refer in paragraphs 142-155 below.

On 22 December 1996, Borealis sent to Athlone a letter of conformity for several grades, including its Borecene grade ME 8166. The letter stated that those grades, when processed according to good manufacturing practice, were expected to meet the requirements of the OFTEC Standard (then in its 1994 form).

On 18 February 1999 Ms Fatnes attended the Tank Committee, of which Mr Gregg was a member and whose minutes Dr McDaid saw. The agenda for the meeting indicates that proposed amendments to the OFTEC Standard were to be discussed. Mr Atterbury had provided a memorandum of that date dealing with that subject. Manuscript notations on the memorandum (probably in Ms Fatnes’ hand) show that it was to be copied to three individuals at Borealis who did not attend the meeting. The proposed amendments to the OFTEC Standard were discussed and the proposed amendments were attached to the minutes.

The minutes record that there was discussion about the need to define the weathering standard, in relation to which Mr Atterbury and Ms Fatnes and Mr Shorter were to liaise. (Nothing appears to have come of this). Mr Gregg and Mr Atterbury raised the possibility of specifying a stabilisation system which would conform to the weathering requirement as a short route to approval. It was noted that pigment type and opacity (i.e. the concentration of the pigment) had a major bearing on weathering stability and should be taken into account.

Agreement was reached on allowing a higher MFR tolerance for unconventional MDPE grades (e.g. Borecene) available now or in the future. The Minutes record:

“The regime of OFTEC tests on the tank would prove the suitability of the material. [Mark Atterbury] advised that it was important that suppliers of new material grades have knowledge of the expected effect of contact with fuels to assure conformance with the resistance to oil requirement in particular.”

On 19 February 1999 Mr Shorter, now of ICO Europe, sent to Messrs Webster, Wood and Tew of Borealis a fax which referred to two very good points having come out of the meeting of which the second was:

“(b)

“The letter of conformity, for base grades, has been accepted and will continue. This means that I can still write a letter confirming the grade specification to enable moulders to use grades while they are still under test at PDC [Athlone] (Footnote: ²⁴). This is obviously based on the fact that they comply with the base resin requirements as laid down by OFTEC.”

On 22 February 1999 Ms Fatnes sent an internal email in which she agreed that Mr Shorter had summarised some of the highlights of the meeting and observed:

“Letter of conformity still accepted during tank test period

…..

Test procedure regarding weathering still not finalised. [MA] has the responsibility for making a proposal before the next meeting. Here I think we

(Borealis) should give some input as well” [Bold added]

Ms Fatnes said during part of her evidence that her understanding was that a letter of conformity would be part of the approval process but that there would be some form of testing of a moulded tank “representing the tanks, using the correct pigment, using the correct processing conditions”. At other stages she appeared to accept that the provision of a letter instead of section 5.1 tests was probably the implication of the proposed amendments and that she had understood as much.

The likelihood is that, although she did not address her mind to this very clearly, at this stage (February 1999) she realised that the proposal was that OFTEC weathering and other material requirements were to continue to be met, so far as OFTEC testing was concerned, through the provision of a letter of conformity from the material supplier, pending the completion of any Athlone testing. The practice, which had begun before then, of OFTEC treating a letter of conformity as satisfying the test simply continued, in part, no doubt, because WOM testing at Athlone did not become available in July 1999 as expected, although it did at some later date. This was not an issue of any great consequence at the time because UV weatherability had not surfaced as an issue of concern.

Consistently with this in November 1999, after Borealis had provided a letter of conformity for Borecene, Ms Fatnes said in a Borealis sales pack that Borecene “meets regulations (example OFTEC)”, which she could scarcely have said if she thought the question whether or not it did so depended on whether the tank manufacturer had carried out the material tests.

On 18 May 1999 Dr McDaid of PDC wrote to Bob Wood, the Rotomoulding Sales Manager of Borealis UK, saying:

“As discussed with Dessie 17^th May 1999, please find attached a copy of Conformity Certificate as required by OFTEC

Materials that pass the OFTEC tank tests must also comply with the material requirements in the standard T-100. Only after receiving such a letter from the material manufacturer can OFTEC give a full pass on a new tank material.

Please supply a letter stating that ME8160/1, as supplied by Borealis conforms with each of the listed requirements.”

She attached a copy of the 12 January 1999 draft (see para 125 above). This letter shows Dr McDaid’s understanding that it was a letter from the material manufacturer in relation to the material which would lead to “a full pass”.

In September 1999 Mr Atterbury circulated a report to the Tank Committee, which met on 15 September (see para 249 below). This included the following:

“Several members are running into difficulties with letters of conformity for new material grades with regards to weathering requirements.

Essentially, the weathering test can take up to 18 months to complete which is impractical in a commercial environment.

Some material suppliers with new grades (which are still fundamentally MDPE) are insisting on carrying out the weathering test prior to advising on conformance to the OFTEC standard, which is of course the most responsible reaction. However, where members have fully approved their tank model range in the new material by having them successfully tested against the constructional tests, they are having to wait 18 months for the full letter of conformity to be produced.”

It is apparent from this report:

The Tank Committee met again on 9 February 2000. Mr Atterbury reported that the OFTEC Standard weathering tests took 18 months to complete and were very expensive. According to the minutes he said that the timescale associated with the test should be reviewed subject to appropriate letters of conformity from material suppliers. (This again appears to contemplate use of the letter of conformity pending the completion of the test). A working group was formed to consider new wording to be proposed to the OFCERT Committee.

An understanding of the function of the letter of conformity appears from a report of the Construction Industry Research and Information Association (“CIRIA”) in 2000. CIRIA was engaged in research into the manufacture and manufacturing requirements of external oil storage tanks. Borealis (and in particular, Ms Fatnes) received literature from CIRIA, including a Review of Above Ground Proprietary Prefabricated Bunded Oil Storage Tanks (Paper 603/19). Appendix C of that report (internal page 121) addresses the requirements in the Standard. After listing the material requirements of section 4.1 it stated:

“Usually these requirements are met by a letter of conformity. This letter, from the polymer manufacturers, must guarantee that the material used in the manufacture of the oil storage tanks meets the requirements detailed in OFS T100.”

A representation that the material is expected to provide the relevant level of weather resistance, if processed in accordance with good manufacturing practice, begs the question whether that means the material in its natural or in its pigmented state. It cannot refer to the material’s raw state (powder or pellet) because no EaB tests can be carried out on such material and the letter of conformity refers to the material being manufactured in accordance with good manufacturing practice.

The representation must, as it seems to me, refer to the material in the form in which Kingspan intended to use it i.e. pigmented with green pigment.

I say that for two reasons. First, the letter related to the tank as manufactured. Kingspan’s tanks for outdoor oil storage were, as all concerned knew, habitually made out of green pigmented polymer, as were the tanks of many other manufacturers. Second, Ms Fatnes made clear in her evidence that in issuing the letter of conformity she was taking account of the effect of green pigment. It was also Dr McDaid’s understanding that the letter of conformity applied to the green moulded material.

Section 10.1.4 provides:

“4

Full approval is at the discretion of OFTEC and requires a Letter of Conformity for the Raw Material and an ISO approved Quality System as specified in 7.2.” [Bold added]

Borealis argues that the reference to Raw Material is necessarily a reference to Raw Material as defined (“a virgin material of a single density and single melt flow index”) such that any letter of conformity can only legitimately provide comfort in relation to the characteristics of the virgin unprocessed material. I reject this. In the context in which it appears section 10 is contemplating a letter of conformity for the virgin material which will express a view as to how that material will perform once moulded into a tank.

The contrary conclusion would:

The events leading up to Kingspan’s decision to purchase Borecene, the purchases of Borecene, and the effects of Kingspan using it cover a period of over 7 years. Kingspan relies on what was said to them over that period in promotional material, certificates of conformity, an email of 18 November 2001, and at a meeting on 3 December 2002, and on other occasions, as misrepresentations as to the UV stability of Borecene in respect of which they are entitled to claim. There is an issue between the parties as to:

In the paragraphs that follow I set out the relevant history followed by my conclusions as to whether, assuming the matter to be governed by English law, there were any, and, if so, what representations were made, whether they were false and whether they were relied on. I then turn to consider the applicable law.

It is convenient at the outset to set out the representations (some said to have been made more than once) on which, as Mr Justin Fenwick QC on behalf of Kingspan made clear in his final submissions, Kingspan seeks to rely. They are as follows:

These representations are part of a whole raft of representations which were originally pleaded, and which fell into four basic categories (expounded in the 24 pages of Appendix G to Kingspan’s opening):

Borealis submit that some of the representations set out in para 164 above are either not pleaded or were pleaded but have been withdrawn and invite me not to allow Kingspan to rely on any representations which are in those categories or were never put. I agree with this approach. Any litigant is entitled to know what case it has to answer, in order to decide what questions to ask and what evidence to adduce. That is particularly important in a case of this size. In those circumstances I do not regard it as open to Kingspan to rely on what has not been pleaded or has been withdrawn. Having pleaded their misrepresentation claim on so wide a basis, they cannot justifiably complain of the exclusion of that which they did not plead (or even apply to amend to plead) or which they have disavowed.

Accordingly I do not regard it as open to Kingspan to rely on representations (c) and (d), which were withdrawn (see Kingspan’s response of 2 November 2010 to Borealis’ 4^th request for further information at para 34). Nor can reliance be placed on representations (i), (j) and (k) none of which are pleaded. In addition representation (k) is contained in a 2004 document and cannot have been relied on in respect of any purchases in 2002 and 2003.

As to (e) Mr Jamtvedt was questioned as to whether Borecene could properly be said to have a broad processing window in circumstances where the antioxidant package, it was suggested, had a narrow processing window. But Kingspan in effect confirmed in a letter of 1 December 2010 responding to requests for further information that they were not advancing any criticism of the antioxidant package, and Dr McDaid’s evidence was to the same effect. In a footnote to their written opening, Kingspan stated that they had abandoned their case that statements as to the improved processability of Borecene were false. In these circumstances I do not regard it as open to them to rely on this representation. As to (f) the only representation that can be relied on is as to 22 GJ/m².

In 1996 Titan and Tyrell between them were, and were well known to be, the largest manufacturers of oil storage tanks in the UK. At that time the two companies had for some considerable time been using DuPont SCLAIR 8504 UV8D resin for the production of oil tanks without any significant problems. Although these companies were sizeable users of it, the volume ordered was low in the context of Europe as a whole. Tyrell had also been purchasing material from Borealis and others.

On 20 or 21 June 1996 there was a meeting at PDC’s premises attended by Bob Wood, the Rotomoulding Sales Manager of Borealis UK and Mick Shorter, then a senior technical engineer of Borealis, who did not give evidence, and Dessie Gregg of PDC. The purpose of the meeting was for Borealis to introduce Borecene (ME 8166/67) and to persuade Mr Gregg as to its superiority for use in the manufacture of oil tanks.

The minutes of this meeting have not survived and there is a dispute as to what occurred at it. According to Mr Gregg’s witness statement he informed the Borealis representatives that any new material must be at least the equivalent of DuPont 8504 UV8D. He showed them the specification sheet for it and said that the new material must have at least the equivalent properties, a reasonable processing window, an OFTEC letter of conformity and a UV package that would provide a 10 year life span for the oil tanks. He made it clear that the powder would be dry blended and that the tanks were supplied with a 10 year guarantee. Mr Wood and Mr Shorter listed the advantages of Borecene and assured him they were confident that Borecene would be at least the equal of DuPont 8504UV8D in terms of UV resistance.

In his oral evidence Mr Gregg accepted that he probably did not mention UV or UV 8 specifically; nor did he say that Borecene had to contain a UV package which would provide a 10 year lifespan. What he said was that Borecene had to be the equivalent of DuPont 8504UV8D, whose specification sheet he produced, and Borealis said that Borecene would give Kingspan a better tank.

In his written statement Mr Wood referred to making at least one visit before a sample batch was sent to Tyrell but gave no details of what transpired. In his oral evidence he accepted that the aim was to persuade Kingspan of the superiority of Borecene, that he was aware that Tyrell was using DuPont (although he was unaware that UV8 was in the title – he knew it as DuPont 8504). He accepted that he or Mr Shorter said that Borealis’ grades were UV stabilised; and that, had he been asked, he would have indicated that Borecene had the same or better characteristics by comparison with Du Pont 8504. He said that Mr Gregg had not said that he wanted Borecene to have as good a UV stability as the DuPont or Dow grades.

What I find likely to have happened is the following. The Borealis representatives said that Borecene was at least as good as the DuPont material, the specification sheet for which Mr Gregg produced, and would give Kingspan a better tank. There was no reference to UV 8 or UV stability beyond the fact that the full title of the material - DuPont 8504 UV8D - is on the sheet. The sheet contains no reference in the specification to the UV properties of the grade. I regard it as unlikely that, when referring to DuPont’s material, reference was made to its full title. Mr Wood, who knew the Du Pont material as DuPont 8504, would not have done so. Mr Gregg did not say that the material had to be UV8, or that he wanted a UV package to provide a 10 year life span; nor was there any discussion about the significance of UV 8 or about UV resistance or stability. Mr Gregg’s evidence was that at this time he did not know what the UV 8 designation meant although at some later stage he came to understand that it referred to 8,000 hours in, he assumed, a WOM of some sort. Nor did he know that tanks could degrade on account of UV light. Even in October 2002 the UV-X rating system was very new to Dr McDaid, whose evidence was that Borealis never mentioned to her that Borecene contained a UV 8 package. Borealis did not use the UV system in its literature or that nomenclature in relation to their UV packages.

The discussion was about mechanical properties and passing the test at Athlone; and it was concerned with a grade of Borecene (ME 8166/7) that Kingspan never purchased in any quantity (RM 8402 was not yet available for commercial sale and RM 7402 had not been developed) and which was discontinued in the summer of 1999. Whatever was said cannot have been regarded as a representation about a different product supplied over five years later.

Borealis’ evidence (Ms Fatnes and Mr Halvorsen), which I accept, was that they did not then, or thereafter, sell their product as UV 8 because this was not a nomenclature that they used at the time.

At this time the UV stabiliser used by Borealis was Tinuvin 622.

Borealis was in discussion with CIBA, an additive supplier, about changing to Tinuvin 783. CIBA’s recommendation was that Tinuvin be used at a concentration of 3,000ppm (0.3%). In a fax dated May 15 1996 Mr Muller of CIBA wrote to Mr

Ms Fatnes’ evidence, which I have no reason to doubt, was (a) that she was not aware of having received this because she was not involved very much with polypropylene which was the subject which Mr Øysaed was primarily looking at; and (b) that polypropylene was more prone to degradation than polyethylenes. Kingspan points out that CIBA’s recommendation expressly extended to LLDPE (i.e. linear low density polyethylene products). Since Ziegler Natta was an LLDPE, and Borealis treated the stabiliser test results for Ziegler Natta products as relevant to Borecene grades (see, for example, Borealis treatment of the Series E Cytec results – paras 2545 below), the recommendation was relevant to Borecene. I agree. Professor Malatesta said that, in his experience, stabiliser suppliers would exaggerate the stabiliser needed because it was in their commercial interests to do so. Kingspan invite me to treat this as pure speculation. I do not doubt that such suppliers have no incentive to minimise the amount of stabiliser necessary and an incentive to err on the higher side of caution. Whether any particular recommendation is more than necessary can only be determined by some empirical testing.

Between 21 June and 27 August 1996 Tyrell at Portadown manufactured 6 designs of tanks from ME 8167. The purpose of the trial, so far as Mr Gregg was concerned, was to compare Borecene with the existing DuPont material in order to see whether Borecene could be used to make oil tanks and whether any processing gains (such as reductions in shot weight or cycle time) could be achieved. On 27 August 1996 Mr Shorter, then of Borealis, visited Portadown where Mr Gregg told him that some improvement, predominantly in reduced shot weight, had been witnessed. No UV testing was involved. Kingspan did not have the facilities for such testing. Mr Gregg said at the visit that “the yes/no criteria [sic] is the passing of the OFTEC standard”. Of particular concern was the deformation test (sections 4.2.6.1/5.2.61) of the OFTEC Standard– the one which was most often failed. Five tanks were to be sent from these production runs to Athlone for testing.

Borealis launched Borecene at The Association of Rotational Moulders Conference which took place between 20 and 22 October 1996 in Vienna. Dr McDaid attended. Ms Fatnes gave a presentation called “Third Generation of Polyethylenes for Rotational Moulding”. The presentation stated that this third generation of polyethylenes had “very interesting properties and opportunities compared to traditional LLDPE materials”, and went on to state, amongst other things:

On 4 December 1996 Andre Van Uffelt, a senior commercial manager, and Ms Fatnes, both of Borealis, attended a further meeting at Portadown. Mr Gregg reported that tests had been done on five different tanks with reduced shot weights and one had failed. Ms Fatnes’ note records that “Tyrell uses much SC/air 8504” as well as other material. The upshot was that Borealis was to supply 2 tons of ME 8167, 1 ton of ME 8169, and 200 kg each of two other polymers and Tyrell was to test tanks according to an agreed program.

Borealis, like other material suppliers, produced brochures expounding the virtues and explaining the characteristics of its products, which from time to time it updated or amended. It also produced Product Specifications. In 1996, Borealis published two brochures:

‘Rotational Moulding’ contained the statement that all Borealis grades for “Rotational Moulding are fully UV stabilised”; and referred to ME 8166/7 as suitable for tanks.

In ‘Borecene Polyethylene for Rotational Moulding’ Borecene was described as having several advantages when compared with conventional polymers including “improved flow properties” and “improved mechanical properties” which included “improved behaviour under constant load (creep)”. It added:

“Reduced weight

An advantage of these Borealis polymers for the rotomoulding process, because of the easy flow properties, is the possibility to reduce the weight of the moulded article, due to the even wall thickness control.

The powder will flow easier in complicated shapes, and give improved definition.”

“Why use Borealis Borecene rotomoulding polymers

….With these Borecene polymers with a higher Melt Flow you are able to reach the properties of conventional polymers with a lower melt flow. One advantage will be the improvement of material handling”

As stated in para 142 above, on 22 December 1996, Borealis sent to Athlone a letter of conformity for several grades, including its Borecene grade ME8166. The letter stated that these grades, “when processed according to good manufacturing practice, [were] expected to meet the requirements of the [OFTEC Standard]. That is:

“…

In early 1997 PDC carried out trials on, inter alia, (i) 3 tanks made from Novacor 8504, a polymer equivalent to DuPont 8504 UV 8D, and (ii) 2 tanks using model Tyrell 270R, 1 tank using ME 8167 and 1 using Novacor 8504. The tanks were sent to Athlone for deformation testing. Mr Gregg came to the conclusion from the results that there was no significant improvement in performance as a result of using Borecene 8167. As a result further testing was not pursued.

On 20 June 1997 Borealis produced an Internal Product Specification (IPS) for ME 8160 (later named RM 8402). This specified a target concentration of 1,000 ppm of Tinuvin 622 and a Min/Max of 850 and 1,800. In August 1997 – see the Borealis document headed “New Borecene Product Mix, proposed 8.8.97” - this was increased to 1,500 ppm Tinuvin 622 (Min/Max: 1,250/1,750). This was a much lower amount than ME8166, which had a target of 2,500 ppm. Mr Wood, although UK sales manager, was not, and never became, aware that ME8160 had been introduced with this (1,500 ppm) significantly reduced UV package.

On 11 August 1997, Borealis held an internal meeting in Norway to discuss its strategy for Borecene. Ms Fatnes’ minute of this meeting records (highlighting is not in original):

“Summary/conclusions



A new product, ME8160, MFR 6 density 940…will be created to cover the interesting applications in addition to the existing Borecene products.



Reduce Borecene production cost by reducing amount of UV stabiliser if possible.

...



Define target applications for Borecene.



Initiate changes in IPS (Footnote: ²⁶) to adjust density of ME8166 and evaluate UV level of ME8166 and ME8160



Check UV level needed to guaranty 10 years lifetime”

It is apparent from these minutes that Borealis was keen to reduce cost by reducing the amount of stabiliser. The fact that UV stabiliser was an expensive additive was a recurring theme as was a concern that the price of Borecene was making Borecene uncompetitive. It is also clear that Borealis was looking for a stabiliser package which would deliver 10 years of UV stability. Ms Fatnes’ evidence was that the reference to 10 years lifetime was a general statement not directed at oil tanks. But, even if general, it must surely have included them, not least because of the 10 year reference in the prEN standard and what appears in the next paragraph.

The minutes of an internal Borealis meeting on 19 June 1996 written by Ms Fatnes record:

“1.

Estimation of long term properties.

....

Need normally to estimate properties to approx. 10 years.

...

Actions

...

4.

Define test program for hoop stress / creep testing for PE for rotomoulding applications. The target is to be able to estimate long-term properties and predict behaviour for a tank or similar.”

I infer that the reason for Borealis wanting to be satisfied that the properties of their material would last for about 10 years was because that is the figure that appeared in the prEN standard. I cannot tell whether at this early stage they were aware that tank manufacturers often sold oil tanks with a 10 year guarantee. But I am satisfied that, if they did not know then, they became aware of it later. Ms Fatnes suggested in her evidence that she was unaware that tank manufacturers customarily sold oil tanks with a 10 year warranty until November 2002 (Footnote: ²⁷). But in her statement in the Balmoral litigation she had said:

“Borealis at various levels (including myself) were well aware that Balmoral and other tank manufacturers were selling with a 10 year/guarantee.” (Footnote: ²⁸)

I now turn to the series of WOM exposure tests that Borealis conducted, referred to or relied on from 1997 onwards. Kingspan has identified each series of tests by the letters of the alphabet and I adopt that identification. The results are sometimes presented in the form of graphs or bar charts, which Kingspan has converted into tabular form. These tables are at Appendix 3 to this judgment. I have amended some of the figures to reflect my findings on the stabilisers involved about which there is, in some cases, a limited area of dispute.

On 27 August 1997 Mr Didrichsen of Borealis reported to Ms Fatnes, inter alia, the EaB results after 2,000 and 3,000 hours exposure in Borealis’ WOM (0.51 W/m²) of moulded samples of various products, being four Borecenes namely ME 8167 and ME 8169 (both unpigmented) and ME 8177 and ME 8179 (both black); and two ZN’s namely ME 8131 (black) and ME 8152 (unpigmented). ME 8152 was Borealis’ highest selling general purpose Ziegler Natta (Footnote: ²⁹). The EaB results, i.e. the percentage by which the specimen had been stretched at break included the following (the percentage of the original is in brackets):

The Borecene tested had Tinuvin 622 at a concentration of 2,500 ppm. As can be seen, both unpigmented Borecenes failed the test after 2,000 hours by which time their EaB was <50%. ME 8167 and 8169 were general purpose grades, not intended for a market with a high UV requirement. Since there was no result at 2,000 hours for the ZN ME 8152 it is not possible to tell whether it had failed by then; although taking the figures on a linear basis it probably had not. At 3,000 hours Borecene performed worse in terms of the percentage of the original EaB percentage than ME 8152, but there was no great difference in terms of the EaB percentages at 3,000 hours. These figures illustrate the EaB test disadvantage point. No tests were carried out on ME 8160/1 – which was to become RM 8402/3. At 3,000 hours the black pigmented Borecenes retained their original EaB and the black pigmented ZN retained 79% of the original. Black pigment (usually compounded) has always been recognised as giving a high degree of UV protection.

Borealis had a Norwegian customer – Dyno - for which it conducted a series of UV tests on natural and pigmented Borecene grades. The initial tests were carried out on resins exposed to 1,500 hours in Borealis’ WOM. The results were provided to Ms Fatnes by Mr Didrichsen on 21 November 1997.

These results showed, inter alia, that natural ME8169 (MFR 6), which became RM 8343, stabilised with 2,500 ppm Tinuvin 622, Borealis’ biggest selling Borecene, failed the 50% EaB test after 1,500 hours in the Borealis WOM (something like 1 – 1.5 years’ exposure in Scandinavia), at which point it had fallen to 41% of its unexposed value - compared to natural ME 8152, the general purpose Ziegler Natta grade, stabilised with 2,500 ppm Tinuvin 622 ( ZN used by ROM), which had fallen to 51%. But a reading at 1,000 hours showed that the ZN had fallen to 48% when the Borecene had retained 79% of EaB.

Better results were obtained with green pigmented Dyno ZN and Borecene 8169. The results after 1,500 hours were 145% of the original EaB for the ME 8152 (Footnote: ³⁰) and 78% for the ME 8169. In each of these cases the actual percentage EaB (as opposed to the percentage of the original percentage) was higher in the case of Borecene. The green pigment appeared to double or treble the lifetime.

These results were considered by Borealis to be poor at the time as appears from the following:

Despite the results Borealis did not then review its decision to stabilise ME8160 with the lower UV stabilisation package of 1,500ppm of Tinuvin 622. In November 1997 Borealis issued a fresh IPS, with the target Tinuvin 622 concentration remaining at 1,500ppm. Further IPSs for ME8160 were issued in December 1997 and in February 1998 with the same target concentration.

Updated results for Series A were obtained in December 1997. These showed that at

In 1997 Borealis re- issued its “Borecene polyethylene for Rotational Moulding” in almost identical terms to the 1996 version.

On 25 May 1998, Mr Didrichsen emailed Ms Fatnes updated results in graph form, showing the results for the samples after 3,000 and 5,000 hours of UV exposure in Borealis’ 0.51 W/m² WOM. These results revealed, inter alia, the following:

The tests indicated that natural Borecenes ME 8167 (which failed by 2,000 hours) and ME 8169 (which failed by 1,500 hours) performed better than natural ZN ME 8152 (which failed by 1,000 hours). They showed that the green pigment provided much greater protection than natural polymer for both Borecene and ZN; but also that green pigmented Borecene ME 8169 with Tinuvin 622 at 2,500 ppm was likely to be insufficient to satisfy the EaB test after 10,000 hours in a WOM of 0.35 W/m². Despite this result, a further IPS for ME8160 was issued in 1998, again showing a target concentration of Tinuvin 622 of 1,500ppm.

An internal Borealis document dated 5 June 1998 signed by Ms Fatnes included the following results, inter alia:

The conclusions of the document, which was reissued on 19 May 1999 in the same terms, were these:

“  Natural materials, both Borecene and standard materials, have a minimum lifetime of 1 year in South Florida climate.

•

If long lifetimes with high UV exposure are wanted, use of black or coloured resins are recommended (sic). When chosing (sic) colour it is important to choose one giving good UV stability as differences can be large between the pigments.

•

Borecene gives equal or better UV stability compared with standard Borealis resins.”

On 26 June 1998 Borealis representatives had a meeting with CIBA Speciality Chemicals (“CIBA”) in Rønningen. On 31 July 1998, Mr Jamtvedt of Borealis distributed a report of the visit, which concerned a joint project between Borealis and CIBA into the UV performance of various UV stabilisers.

These tests, which were tensile impact tests, were carried out using the CIBA 0.35 W/m² WOM, which was weaker than Borealis’ 0.51 W/m² WOM. They also used stabiliser packages of 2,500 ppm of Tinuvin 622 or 783 (or Cyasorb UV 3346) and not the 1,300 ppm and 1,500 ppm which, as we shall see, came to be used for the Tinuvin 783 in RM 8402 and 7402 respectively.

The tests were carried out on 6 specimens. 5 (Specimens B, E, H, I and K) were of ME 8168 (Borecene), which became RM 8342, with different stabiliser packages all at 2,500 ppm. Specimen L was of ME 8152 (ZN) with the same stabiliser package as Specimen B i.e. Tinuvin 622 2,500 ppm; Irganox B215 1,800 ppm. The number of hours to 50% retained tensile strength was approximately as follows:

If Specimen B (Borecene/Tinuvin 622) is compared with Specimen I (Borecene /Tinuvin 783) the use of Tinuvin 783 instead of Tinuvin 622 could be said at least to double the lifetime of the resin. However, CIBA’s report of the results refers to Sample B giving a worse performance than the others stabilised with Tinuvin 622 “probably due to worse process stabilisation”. If so, the comparison would not be sound evidence of a doubling of the lifetime by the use of Tinuvin 783. A comparison between Borecene Specimens E or H/Tinuvin 622 (where the antioxidant package was not identical) and Borecene Specimen I/Tinuvin 783 would show increases of at least 52% and 40%.

A comparison between Specimen L (ZN/Tinuvin 622) and Specimen I

These comparisons assume that there is a linear relationship between performance and Hals concentration, a matter to which I revert in para 453 below.

Towards the end of 1998 Borealis began to specify a higher level of Tinuvin 622 for ME 8160. The IPS for ME 8160 dated 25 September 1998 has the 1,500 target figure changed in manuscript to 2,500 (although there is another annotation on the present copy of the document in what looks like a different hand which restores the 1,500 figure). On 15 October 1998 a further IPS was issued in typescript showing a target loading of Tinuvin 783 at 2,500.

In October 1998 Mr Jamtvedt of Borealis received a further set of results relating to the TA 1206 project. These were tensile impact tests on samples exposed to weathering in Florida i.e. not in a WOM. The conclusion of the tests, on specimens with the same characteristics as those used in the artificial weathering tests (i.e. as in Specimens, B, E, H, I, K and L) was that after 1 year of Florida exposure no differentiation could be made between the different stabiliser systems and both metallocene and traditional polymers were still doing well.

These results did not found any basis for suggesting that switching from Tinuvin 622 to 783 would double the lifetime of tanks. They dealt with concentrations of 2,500 ppm, not 1,500 or 1,300.

In 1998 Borealis republished “Rotational Moulding” which continued to describe Borecene grades as “UV stabilised” (without the “fully”) and ME 8166 as suitable for the manufacture of tanks. It was republished in the same terms in 1999.

Borealis also published the “Borecene Processing Guide” which stated that Borecene had improved mechanical qualities relative to conventional polyethylenes including improved ESCR and improved creep properties, especially at high temperature and that it could maintain mechanical properties at higher MFR. The guide makes clear that Borecene was developed for rotomoulding for various applications including fuel tanks. The Processing Guide repeated the claim that all Borealis grades were fully stabilised.

It also contained the following:

“Sintering

Because of the lower viscosity and easier flow of molten Borecene an even distribution of polymer in the mould will be achieved at a lower temperature, allowing the heating to be stopped earlier for Borecene than for conventional materials. This results in excellent sintering at lower air peak temperatures, thereby saving energy as well as shortening the overall heating time in the oven.

For Borecene MFR=6 material it is possible to stop the heating at a temperature of about 165 degrees while for standard materials the heating normally needs to be continued to a temperature of 185 degrees”

Material	Sticking	Melting	Needed Sintering Interval
Borecene MFR 6	90-110	110-130	130-165
Borecene MFR 3	90-110	110-130	130-175
Conventional	75-110	110-130	130-185

On 8 December 1998 a meeting took place between Mr Halvorsen and Mr Wood of Borealis and Dr McDaid and Mr Gregg of Kingspan. Borealis sought to introduce ME

Mr Gregg did not recollect everything that was said. In his witness statement he recalled repeating that what Kingspan was interested in establishing was whether the new grades of Borecene were at least equal to or outperformed DuPont 8504 UV8D in terms of material properties, which to his mind included UV resistance. But in cross examination, when presented with Dr McDaid’s notes of the meeting, which make no mention of UV or UV8 or DuPont 8504, he accepted that the likelihood was that he had not said this. Cost was also raised, Mr Wood saying that Kingspan should be paying a premium for Borecene as it was a premium material and would lead to savings in processing time and shot weights.

In his witness statement Mr Wood said that there was no discussion about whether Borecene had a UV 8 package. The most he would have said at this meeting was that Borecene contained a stabiliser package which comprised an industry recognised additive, which had been tested and which performed at least as well, if not better than, Borealis’ previous ZN grades (“the stabiliser package statement”). He had learnt this from Ms Fatnes, who had told him that Borecene was as good as, if not better than, the Ziegler Natta grades. There was however no discussion about UV or about Borecene having a UV 8 capability. Mr Halvorsen’s evidence is that he would not have commented on DuPont UV8D without having gone away and checked whether it compared first.

In the light of that evidence I do not regard it as established that Mr Gregg (or Dr McDaid) said that Borecene had to be at least as good as DuPont UV8 or that there was any significant discussion about UV resistance characteristics. But Mr Wood probably did make the stabiliser package statement.

Dr McDaid’s evidence which I accept was that Mr Wood and Mr Halvorsen emphasised, inter alia, the reduced cycle time including the fact that the product could be moulded at a lower PIAT; and specifically recommended in February 1999 a PIAT of 175° C.

As a result of this meeting PDC decided to proceed with further investigation into Borecene materials. PDC agreed with Borealis that tanks made in trials that were to take place would be sent to Athlone for testing.

Another IPS for ME 8160 was issued on 23 February 1999. It specified a target content for Tinuvin 622 of 1,500 ppm (Footnote: ³²). On 9 March 1999 Ms Fatnes sent a fax to a colleague in which she indicated that ME 8160/1 would contain Tinuvin 783 at between 1,000 and 3,000 ppm. She asked “what tests and samples are needed to get the new products approved”.

On 25 February 1999 trials took place at Titan using ME 8161 (the powder version of ME 8160), 1 tonne of which Borealis supplied free of charge. This was dry blended with green pigment. Two tank types (LP 1200 and H 1250) were moulded in Borecene and Dow 2432. Mr Wood and Mr Halvorsen attended those trials on behalf of Borealis. The oven time was set to achieve a PIAT of 175° C. PDC were told that ME 8161 was the replacement grade for ME 8167, which had been trialled in the summer of 1996. Mr Gregg in his witness statement recalled that the assurances previously given in relation to ME 8167 were repeated for ME 8161; but it is not clear to me exactly what he was claiming to have been said and, as appears in paras 170 - 176 above, I do not accept that Mr Gregg’s evidence about the June 1996 meeting was accurate. There is no reference in either of the notes of the February 1999 meeting or in Dr McDaid’s evidence to any particular assurance or representation. Dr McDaid’s note of the trial records that “The material moulded very well in a number of ways”. Another Kingspan note records that “The MFI of 6 is very beneficial for processing, the sintering time is significantly reduced and hence the required cooking time is shorter”.

On 3 March 1999 4 tanks (2 of each type) were sent to Athlone to start the 42 day deformation test.

On 14 April 1999, Mr Jamtvedt of Borealis emailed Mr Vulic of Cytec, another large additives supplier, suggesting test formulations using Tinuvin 622 and 783. It was proposed that the loading level would be maintained at 2,500 ppm, for both Tinuvin 622 and 783. On 6 May 1999, Mr Vulic emailed Mr Jamtvedt proposing that test runs be carried out on various additive packages, including:

On 13 July 1999, Roger Goris of Borealis wrote to Chantal Monfrére (Footnote: ³³) of ICO Diegem, copying Mr Webster, Borealis' then General Sales Manager for Rotomoulding. He stated that in recent EaB tests the UV results as a very conservative estimate indicated a lifetime of 2.5 years for the natural Borecene, a lifetime of 7 years for black Borecene, with coloured Borecene somewhere between the two. Figures produced by CIBA with a life time based on impact strength resulted in higher figures for Borealis than those based on EaB. He went on to say:

“I discussed issue [sic] with John Webster recently and agreed there urgenty

[sic] is a need to make an official Borealis statement/leaflet about life time.

We will do this with priority. I can not [sic] give a dead line [sic] now. It depends of [sic] the decision if we want to make extra tests or not.

In July 1999, Borealis obtained a further set of results (Series D) from tests in their WOM, in relation to which Ms Fatnes produced a report. The tests were run on ME 8160 (later RM 8402) with Tinuvin 783 at levels of 1,500 and 2,500 ppm and on an ME 8161 reference sample with 1,500 ppm Tinuvin 622. These were target concentrations. The actual concentrations were 1,415 and 2,760 ppm. The results showed that, after 2,500 hours of UV exposure using Borealis’ WOM:

Kingspan submits that, since these results suggested that (i) Tinuvin 783 at a concentration of 1,415ppm, and (ii) Tinuvin 622 at a concentration of 1,500ppm afforded approximately the same level of UV protection, they provided no reasonable basis for believing that using Tinuvin 783 at a concentration of 1,415ppm would provide the same protection as Tinuvin 622 at the higher concentration of 2,500 ppm. Moreover:

The conclusion that Ms Fatnes drew from the results in her technical report, which seems to me appropriate in the light of the data, was that:

“The results indicate similar or slightly improved UV stability for Tin 783 both at 1500ppm and 2500ppm levels. compared to the reference material ME8161 which has 1500ppm Tinuvin 622 after WOM testing for 2500 hours. There seems to be little to gain from increasing UV level from 1500 to 2500ppm.”

Her report also showed the results of an earlier test on ME 8167 and ME 8169 with Tinuvin 622 at 2,500 ppm where by 2,500 hours both samples were down to 29%.

On 4 June 1999 Athlone produced a report on the four Borecene tanks referred to in para 226 above (and on 8 tanks made from other material) which concluded that the H1250 and LP 1200 models met the requirements of Sections 4.2.1 to 4.2.8 of the OFTEC Standard in all respects. The report stated that :

“In accordance with OFTEC regulations a full pass in Borecene material can be issued across the whole of the Titan range once a letter of conformity has been received by the testhouse”

The tests which had been requested and carried out were the tests on the constructional requirements of the Standard.

The Athlone report related to RM 8402 and was for Titan. There is some evidence of a submission by Tyrell of an RM 8402 245 tank to Athlone (see para 484 below) but it seems to me unlikely that any such report was ever given. There is no evidence of the submission of any RM 7402 tanks to Athlone or of any report from Athlone in response in either 2002 or 2003.

The effect of this was that only two types of Borecene made tanks were tested. Whilst this was what the Standard permitted I agree with Mr McDonald, Borealis’ tank design expert, that it is unsatisfactory (in his view “alarming to say the least”) for Kingspan to obtain a blanket certification for all their products made from Borecene when only two different shapes had been tested. These did not include any of the tanks which, made from ZN, had had a relatively high failure rate e.g. R 245.

On 18 May 1999, Dr McDaid, having learned that Borecene had passed the tank constructional requirements during tests carried out at Athlone, sent a fax to Mr Wood of Borealis asking him to issue a letter of conformity in respect of the OFTEC material requirements. Her fax pointed out that materials that pass the OFTEC tank test must also comply with the material requirements of the standard and that it was only after receiving a letter from the material manufacturer that OFTEC could give a full pass on new tank material. She attached the draft referred to in para 124 above.

By mid-1999, Borealis was considering a change in the UV stabiliser to its Borecene products. On 27 July 1999, Ms Fatnes wrote to various of her colleagues at Borealis, including Mr Halvorsen and Mr Jamtvedt, stating:

“We plan to change the UV stabiliser in our Borecene products to improve performance and reduce cost. New IPS’s will be issued (Responsible: AMF)

The change will be implemented from 1.9.99 if possible, or as our soon as our stock of the old stabiliser (Tinuvin 622) is empty.

The following changes are planned:

Product	New UV/amount	Old UV/amount
ME8160	Tinuvin 783/1300ppm	Tinuvin 622/1500ppm
ME8168	Tinuvin 783/1500ppm	Tinuvin 622/2500 ppm
ME8164	Tinuvin 783/ 1300ppm	Tinuvin 622/ 2500ppm”

By email dated 4 August 1999 Ms Fatnes wrote to Mr Leif Rehn, also of Borealis, in relation to the requested letter of conformity. Her email stated:

“You issued a “letter of conformity” for Borealis Rotomoulding grades to the OFTEC in 1995. We need to add the newest Borecene grade(s) to that list.

In specific [sic] it is asked by one customer for our grade ME8160.

What do you need to issue this for our new grades?”

On 5 August 1999 Mr Ervik of Borealis Norway faxed a letter to the Chairman of the CEN Committee. He told him that, based upon experience, Borealis knew that tanks made from Borecene would not retain 50% EaB when exposed to a total irradiance of 22 GJ/m² but that, since Borecene had very good mechanical properties, it could have an EaB which was 15% of initial EaB and still withstand the minimum requirement (presumably 22 GJ/m²) for unexposed (sic) material. He asked for an exception.

By a fax dated 9 August 1999, Ms Fatnes sent Mr Rehn a copy of the OFTEC standard and “copy of request for “letter of conformity” for Borecene ME8160/61 (MFR 6,0, density 940.)” Ms Fatnes went on to state:

“As discussed the UV criterias (sic) cannot be met with natural material, but should be OK for the green pigmented material that is used for the tanks.

Please issue a letter of conformity for ME 8160/1 and send to Julia McDaid…” [Bold added]

A copy of the OFTEC standard was faxed to Mr Rehn that day. The document has a manuscript notation against section 4.1.6 that 8,000 hrs is the equivalent of 500 kilolangleys (Footnote: ³⁵). It was originally suggested that this was a non contemporaneous annotation. But that suggestion was withdrawn. It is inconsistent with the presence of the note on two copies of the document, one with and one without the fax insignia. The date of the annotation must be no later than 9 August 1999 when the fax was sent and the likelihood is that it is in Ms Fatnes’ handwriting, and that the calculation was made in order to get some idea of what the OFTEC weathering threshold in Klys represented in terms of WOM exposure (Footnote: ³⁶).

By a fax dated 12 August 1999, Mr Rehn sent Ms Fatnes “the requested OFTEC Statements regarding the Borealis Polyethylenes ME8160 and ME8161”. The letters of conformity stated:

“This is to inform you that the Borealis Polyethylene ME[8160][8161] as supplied to PDC, when processed according to Good manufacturing practice, is expected to meet the requirements of the OFTEC Oil Firing Equipment Standard OFS T100 (may 1994). That is

…

5.

Water [sic] resistance exceeding 22 GJ (TUVR).”

On 16 August 1999, Mr Rehn issued a new version of the letters of conformity in relation to ME8160/1, which referred to ME8160/1 as supplied to the Kingspan Group rather than PDC, and corrected the typographical error at point 5 (“Water resistance”) to read “Weather resistance”.

It is apparent from the faxes of 5 and 9 August 1999 that Borealis believed that natural Borecene would not meet the <50% EaB after 22 GJ/m² test and that meeting that test was dependent on pigment.

It is not clear to me on exactly what basis Borealis felt able to give the letter of conformity at this stage. The results of tests in a Borealis WOM - where 22 GJ/m² would equate to around 6,200 hours - on natural Borecene with 2,500 ppm Tinuvin 622 had shown that ME 8169 (MFR 6) failed at 2,000 hours (Series A) or 1,500 hours

Green pigment could be expected to increase weather resistance. In the case of Series B in the Borealis WOM ME 8169 had not failed at 3,000 hours, but had failed by 5,000 hours.

The likelihood, as it seems to me, is that Borealis felt able to sign the Letter because of (i) their previous satisfactory experience with ME 8152; (ii) the Series C and D results themselves; and (iii) a 2-3 fold factor to allow for pigment. They may also have relied on the similarity of performance between Tinuvin at 1,415 and 2,760 ppm in Series D to draw comfort from the results for Specimen I (Tinuvin 783 2,500 ppm) in Series C.

On 15 September 1999, the Tank Committee met. Mr Gregg attended on behalf of PDC and Ms Fatnes on behalf of Borealis. Mr Shorter was also in attendance but, by this stage, he had begun working for ICO Polymers. The incorrect conversion of the irradiance threshold in the OFTEC weathering standard from kilolangleys was discussed. The minutes of the meeting record:

“(d)

It was agreed that Clause 4.1.6 of OFS T100 contained an incorrect measurement. The figure 22 giga joules per m² was shown as the equivalent of 900 kilolangleys. This was incorrect, and should read 37.5 g³/m². BR agreed to pass the relevant minutes of the TC266 European Committee meeting to A-MF and/or MS for confirmation after which DG will produce a new paragraph.”

DG is Mr Gregg, who does not appear to have produced such a paragraph.

The figure of 900 Klys had been based on a CIBA world radiation map which showed an average annual radiation across Northern Europe of 80/90 Klys per year. Someone connected with CEN had obviously miscalculated the conversion to GJ/m². The CEN technical committee later agreed that 80kLys per year was more appropriate and in the later draft of the prEN standard of June 2001 the GJ/m² value was reduced to 34.

Borealis was seeking to amend prEN1334 so as to permit a higher MFR than the 5 specified in the then current draft, in order to accommodate Borecene. (The 5 MFR limit had originally been set on the basis that higher MFR grades were traditionally associated with reduced physical properties). On 24 March 1999 Ms Fatnes had sent Dr McDaid and Mr Gregg of PDC a fax proposing that the CEN standard be adapted in the same way as OFS 100 had been changed. Mr Gregg was a member of the CEN Committee. Mr James McGreer was its Chairman. On 21 September 1999, Ms Fatnes wrote to Mr McGreer, with a copy to Dr McDaid, to request that the CEN Committee consider extending the MFR window to MFR 6 grades, so as to accommodate the higher MFR of the new Borecene materials. She attached a report of hers entitled “Comparison between Borecene and standard rotomoulding grades” which represented that the higher melt flow properties did not reduce Borecene’s properties and stated:

“The results show clearly that Borecene has equal or improved properties in all areas. Borecene grades have excellent mechanical properties in spite of having higher MFR. Borecene is superior to standard grades when it comes to

•

Sintering properties/cycle time reduction potential;

•

Impact properties;

•

Environmental Stress Crack Resistance (ESCR);

•

Long term creep properties.”

The report was silent as to weathering properties.

It was Dr McDaid’s evidence that she understood this statement as follows:

“... it confirmed for me in particular Borealis were confident in their 6 melt Borecene material. This was given to me in the context of their request to widen MFR specification, and thereby that confirmed to me that they had confidence in the grade as being suitable for rotomoulding of oil storage tanks, and this information was background, background information and confirmed those messages.”

Ms Fatnes wrote to Dr McDaid on 1 November 1999 and made various statements about the properties of Borecene. Her email stated:

“[Their] attributes gives [sic] polymers with improved properties compared with conventional catalyst...Properties which are improved are for example impact, creep and ESCR properties....Borecene and other metallocene based polyethylenes have improved properties in many ways, but they are still polyethylenes There is every reason to believe that their long-term properties will continue in line with the way they do for standard materials.”

By November 1999 Borealis had obtained a further set of EaB test results from Cytec. On 18 November 1999, Ms Fatnes emailed Nikita Andreev, Borealis’ Russian representative, the results which were set out in two slides. They were provided to Mr Andreev in response to a request to Ms Fatnes from Mr Webster for data on the UV performance of Borecene as against standard resin in order to keep “Nikita’s customer happy”. The tests compared the performance of Cyasorb UV 3346, Tinuvin 622 and Tinuvin 783 at a concentration of 3,000 ppm as a stabiliser for an unidentified ZN material.

The results showed that, at that concentration, Tinuvin 622 would fail (i.e. reach 50% of original EaB) at 3,760 and Tinuvin 783 at 8,970 hours in the CIBA 0.35 W/m² WOM. These results were encouraging so far as a comparison between Tinuvin 783 and Tinuvin 622 was concerned. However, the testing was carried out at 3,000 ppm on a ZN grade; and the results were inconsistent with the Series D results where ME 8161 at a concentration of 1,500 ppm Tinuvin 622 and ME 8161 at a concentration of 1,415 ppm Tinuvin 783 showed no material difference in performance of the two stabilisers.

On 8-9 December 1999, a Borealis meeting was held at Rønnigen to discuss, amongst other matters, (Footnote: ³⁷) Project TA12106. The updated results for the tensile impact strength testing of specimens exposed to natural (Florida) UV in relation to project TA12106 were distributed.

The results showed that, after 2 years of Florida exposure, Specimen L - the Ziegler Natta specimen (ME8152) outperformed all the Borecene specimens (B, E, H, J, K) in terms of percentages of original retained tensile impact strength (retaining approximately 93% of its original tensile impact strength). The relevant Borecene percentages were: Specimen B 78%; E 91%; H 73%; I 79%; K 89%. In this test Specimen I (stabilised with Tinuvin 783 at a concentration of 2,500ppm) did not significantly outperform any of the specimens stabilised with Tinuvin 622 at a concentration of 2,500ppm.

In parallel with the TA12106 CIBA joint project, Borealis was running a further project with CIBA comparing base stabilisers (TA 12492). Weathering tests were carried out in a CIBA WOM on Borecene ME 8168, stabilised with different additive packages all but two of which included Tinuvin 622 at 2,500 ppm. The Ziegler Natta resin ME8152 was used for reference purposes. The test results were discussed in the course of Borealis’ meeting with CIBA on 8-9 December 1999.

These results, based on retained impact strength, showed that:

On 10 December 1999, Mr Halvorsen sent an email to Ms Fatnes and Mr Ervik (amongst others), indicating what UV values should be in the Borealis Toolbox (i.e. the electronic database accessed by the technical team). In relation to natural Borecene, he stated:

“Natural 4000h in WOM = 250 Kly; Lifetime approx 4 years in

In May 2000, Borealis published its Borecene RM 7402 specification sheet, which included the statement that “the additive package is specifically formulated for rotational moulding” and that “the polymer is fully UV stabilised and contains long term antioxidant”.

In June 2000, Borealis published a further version of the Borecene Processing Guide. The Guide said (in terms very similar to those which had appeared in the 1998 version):

“As with standard materials, a coloured Borecene product can be made either by using a coloured compound, or by dry blending with colour pigments or a master-batch. The best quality is obtained with the former method, which not only gives the most homogenous colour but also the best mechanical properties in the formed item.

However, good quality colouring can also be achieved through dry blending. As with standard materials, pigments which are stable in the rotational moulding process should be used. Their selection is also based on the need for adequate pigment dispersion through the formed item.

When changing from a standard material to a Borecene grade, the same pigments can be used, in the same quantity: The colour may appear brighter and glossier as Borecene grades do not yellow so quickly when overcooked. Internal investigations have shown that for the pigments studied these pigments have less effect on shrinkage rates in Borecene, due to nucleation and crystallisation, than in standard materials.

It is recommended that the quality of the Borecene product is initially monitored to ensure correct pigmentation. Details regarding pigments can be supplied by the pigment manufacturer.” [Bold added]

OCTOBER 2000: SERIES G

By email dated Monday 30 October 2000, Mr Didrichsen emailed Ms Fatnes a set of UV test results (both EaB and Tensile Impact strength) conducted in a Borealis WOM on ME8152 (ZN), and Borecenes ME8169 and ME8161, the previous number for RM 8403. The results were:

These results had some surprises. The tensile impact strength of ME8152 (ZN) appeared to increase after being exposed to 1,000 hours of UV in the Borealis WOM and was still greater than the reference value after 2,000 and 3,000 hours. But its EaB appeared to fall very dramatically after 1,000 hours of testing.

The bar charts in which the results are expressed do not indicate, and there is a dispute, as to what the stabiliser package was. Kingspan suggests that the likelihood is

I think this is unlikely. The evidence is confusing (and Ms Fatnes was confused at the time – see her email of 3 November 2000). But Mr Didrichsen’s email of 6 November 2000 (and an earlier one of 19 October 2000) indicates that in October 2000 there was more than one set of tests going on. The 6 November 2000 email refers to ME 8167, 8161 and 8169 as having been placed in the WOM on 5 July 1999. The email of 19 October 2000 refers to ME 8169, 8161, and 8167 having been exposed for 7,500 hours (far less than exposure from 5 July 1999) and the results so far as showing no significant reduction in EaB. Whatever these emails are referring to, it cannot, in the case of ME 8161 (=RM 8403), be the tests whose results appear as Series G for two reasons: (a) the Series G results only went to 3,000 hours; and (b) the results showed at 3,000 hours a significant reduction in EaB.

Both emails also refer to the exposure of ME 8169/RM 8343 with a new UV package. The email of 6 November refers to that exposure starting on 15 Jan 2000. The email of 19 October 2000 refers to ME 8169 with new UV packages (sic) having spent 5,000 hours in the WOM and adds: “I believe we’ll wait until we get to 7,500 hours before we begin tests because there is little testing material.” This cannot be a reference to the Series G tests because they only went to, and were reported as at, 3,000 hours. What the emails do show is the continued use of the old name - ME 8169 – after the change.

The minutes of the Borealis meeting of 24 October 2000 record that the

“Background” to the meeting included

“ New UV package for Borecene was implemented Q 4 99. Test results to verify performance is needed.

 Tests started on samples compression moulded from rotomoulded boxes, both with new and old UV packages. These samples give a UV performance of >2x “old” results for rotomoulded boxes/Elongation to break measurements.”

The minutes then record that Mr Didrichsen “presented results from comparing results achieved with Elongation to break tests v Tensile Impact tests. Also latest test result with Compression moulded samples were discussed”.

In my judgement the likelihood is that there were at least three sets of tests. One was on rotomoulded samples with the new UV package. Two were on samples compression moulded from rotomoulded boxes both with the new and the old package. The October and November emails from Mr Didrichsen refer to these compression moulded tests – hence the reference in the 6 November 2000 email in

Kingspan drew attention to a number of features of the results including the following (Footnote: ³⁸):

In November 2000, Borealis re-published “Rotational Moulding”, a brochure for which Mr Webster accepted responsibility. Under the ‘Applications’ section, RM8402 was described as:

“Very good flow, combined with high stiffness. Technical and intricately shaped articles. E.g. underground, oil, water tanks.”

The brochure continued to refer to Borecene grades as “UV stabilised”.

Borealis also re-published “Borecene Polyethylene for Rotational Moulding” which again indicated that Borecene had improved mechanical properties including higher impact strength and ESCR. It also stated that “Recent developments utilising an innovative UV stabilisation system gives the Borecene grades superior light stability to standard polyethylene.”

Dr McDaid’s evidence was that she relied on these representations:

“Q. Did you rely upon this document, starting on page 186, at the time at which Borecene was bought?

A. Yes, because I[t] reiterated all of the benefits of Borecene that I and the rest of the rotomoulding industry had been advised of. It was all part of the -- it all fed into the same message.”

The Brochure also contained the following passage:

“Significant material savings

Borecene displays improved behaviour under constant load (creep). This, together with the general improvement in mechanical properties provides the potential to significantly reduce wall thickness and so decrease the weight of most rotomoulded articles. An even wall thickness distribution due to the material’s flow properties further facilitates light weighting potential.”

DECEMBER 2000: SERIES H - POLIMOON TEST RESULTS

On 12 December 2000, Mr Didrichsen, who has not given evidence, emailed Ms Fatnes a further set of WOM results (“WOM test 1999.xls”), which Borealis had undertaken in its WOM for a customer called Polimoon. This test, which was on ME 8169 (which became RM 8343), ME 8161 (which became RM 8403) and ME 8167, all Borecene, has given rise to considerable controversy for a number of reasons.

First, the results appear on a graph the title of which is “UV testing according to ISO 8256”. That is the standard relating to testing for tensile impact strength. However the vertical axis is described as “Elongation to break %”. There is also a reference on the spread sheet with the results to a test procedure - the use of a “Dog bone from 1 mm compr.moulded plaques according to TC266-N200/ISO16101”. ISO 16101, although it includes an EaB test as a possible procedure, applies it to changes after exposure to

In my view the references to “Results WOM test” and “Elongation to break %” make it likely that these tests were EaB tests of a product exposed to UV in a WOM and not chemical degradation tests. I accept Mr Ervik’s evidence that they were the former. The numbers are consistent with, and are expressed as, EaB percentages and not tensile impact measurements (for which the numbers are too high) in N/mm or Kj/m². The duration is also far greater than the 42 days required under ISO 16101.

Second, the results have oddities. The percentages of the original EaB were as follows:

Third, Kingspan submits that the results were inconsistent with all the previous EaB test results obtained and, in particular:

I accept that the Polimoon results were much better than most of their predecessors. At the same time they were performed on RM 8403 with 1,300 ppm Tinuvin 783 over an extended period, and, even with a generous allowance for the deviation of results, showed natural Borecene RM 8403 in a very favourable light.

Fourth, Kingspan submits that the tests were probably carried out on Borecene resins with the old, Tinuvin 622, additive packages – hence the point at vii in the last paragraph but one. (Ms Fatnes said that the testing began in October 1999, prior to the general change in UV package to Tinuvin 783). If so, the stabilisation packages would have been:

As to this, Mr Ervik’s recollection is that the tests were carried out on the new packages and that seems to me likely to be correct. The Series H tests on ME 8169, 8161 and 8167 cannot be the tests referred to in the email of 6 November 2000 as having begun in a WOM in 5 July 1999. By October 2000 about 11,000 hours would have elapsed, not 7,500. They are, however, likely to be the tests started on 15 January 2000, including the test on ME 8169 with the new UV package in compression moulded samples referred to in that email, which as at the end of October would recently have completed 7,500 hours. If, in fact, the tests were on Borecene with the “old” package, the new package could be expected to produce even better results.

Fifth, the Polimoon results were based on 1mm thick compression moulded samples made from products rotomoulded by Polimoon (Footnote: ³⁹), other than the ME 8169/RM 8343

On the basis of the five reasons to which I have referred Kingspan submits that the Polimoon test results could not safely be relied on as a basis for assessing the weather resistance of Borecene. Nor could they (on what was known about them in November 2000) be relied on to say that Borecene grades were UV stabilised for use in oil tanks required to withstand 10 years of outdoors exposure in Northern Europe.

In May 2001 further Polimoon results at 10,000 hours showed the following percentages of original EaB:

10,000 hours in a Borealis WOM would amount to around 800 Klys and, on Professor Malatesta’s approach to about 10.6 years UK exposure, with plenty of room to go before the 50% figure was reached. These were outstanding results for ME 8161/RM 8403; and, even if the stabiliser was 1,500 Tinuvin 622, the results for 1,300 Tinuvin 783 could be expected to be as good.

In May 2001 Borealis supplied Kingspan with a specification sheet for RM 8402 which described the material as suitable for static oil tanks. It described the polymer as “fully stabilised” and containing a long term antioxidant. They also supplied one for RM 7402 (which has an MFR of 4) which described it as suitable for rotational moulding of products for outdoor and underground applications such as “large, thick walled tanks”. The additive package of both was said to be specifically formulated for rotational moulding: “the polymer is fully UV stabilised and contains long term antioxidant”. These claims were repeated in the RM 7402 sheet of September 2001 and the RM 8402 sheet for August 2003.

In around April 2001, Borealis obtained results for the set of tests discussed between Mr Jamtvedt and Mr Vulic of Cytec in April 1999 (see para 228 above), the purpose of which had been to ascertain whether a more cost-competitive loading of Cyasorb UV-4611 (Footnote: ⁴⁰) could be used in Borecene. The Borecene used was ME 8168. The Tinuvin 783 specimens contained Tinuvin 783 at a concentration of 1,750ppm. These were compared with specimens of Cytec’s UV - 3346 and UV - 4611 at the same concentration with either 2,000 or 500 ppm of zinc stearate anti-oxidant. Mr Jamtvedt accepted that the 1,750ppm concentration used in these series of tests probably reflected what he would have recommended as being an appropriate starting value for Tinuvin 783 before he began the testing.

The first report on this project was produced on 2 April 2001 and an updated report (including results for samples exposed to 10,000 hours of Xenon Arc weathering) was produced on 28 June 2001. The tests covered the effect of differing cycle times on the tensile strength and EAB values of the resins tested.

These results showed that Specimen 2, i.e. the specimen loaded with Tinuvin 783 at a concentration of 1,750ppm:

However, the tensile impact results showed a 52% and 64% retained original tensile strength at 10,000 hours.

Kingspan submits that all EAB results (on unpigmented Borecene) with the exception of Polimoon indicated that Borecene would be unable to withstand 22 GJ/m² worth of weathering or 10 years of weathering in Northern Europe. They point to Mr Jamtvedt’s evidence that the poor EaB results reflected changes in the surface of the polymer, to which tensile impact tests were less sensitive.

On 12 October 2001 Mr Wood wrote to Mr Rusk, the Operations Director of Titan, following a telephone conversation on the possibility of Borealis supplying the Kingspan Group with Borecene for the year 2002. He indicated that Borealis could consider 5 and 10K MT per annum of Borecene natural pellet, all Kingspan’s needs for compounded black, and possibly oil tank green for the second half of the year. He quoted prices for the first quarter. At some stage in late 2001 Kingspan decided to use RM 8402 across the group. The decision to purchase was a commercial decision made by Mr Rusk, who acted on the recommendation of PDC who, in the person of Mr Gregg, felt able to recommend it because (a) it had been said by Borealis to be suitable for oil storage tanks; (b) Borecene had been passed by Athlone; (c) Borealis had provided a certificate of conformity; and (d) Dr McDaid had carried out trials. It began to be delivered in production volumes in early 2002.

KIWA is the approval/certification body for the Netherlands. In 2001 Kingspan was exploring the possibility of entering the market for oil tanks in the Netherlands. It was, therefore, concerned to involve itself with the content of the standards to be applied by KIWA. KIWA had asked for information on the weathering /UV performance of Borecene for 10-25 years.

On 13 November 2001, Dr McDaid emailed Ms Fatnes:

On 18 November 2001 Ms Fatnes replied:

“We have been struggling a lot with our Weather-O-Meters and UV testing in general for a long time. So the amount of documentation is not on the level we would like to see it.

In general my recommendation would be:

-

for UV exposed products with expected lifetime of five years - Natural Borecene can be used

-

for lifetime 10 years - Colours improving UV performance are needed, (example green for OFTEC approved tanks)

-

for lifetimes > 10 years: Black Borecene grades are recommended.

The OFTEC statement was given before a lot of data was available, on the following bases:

-

ME8152 (Footnote: ⁴¹) was already approved

-

The RM8402 UV package was improved to double the lifetime of the Borecene grades vs. ME8152

-

The green pigment would bring the necessary additional UV performance.

Since Borecene has a much higher starting value for Elongation to break, the traditional measurement of defining lifetime as the time when 50% reduction of elongation to break is reached, is also negative for Borecene vs. materials starting at a lower elongation to break. So we have also tried to look at lifetime based on impact performance.

Please find below some slides showing UV test results for Borecene”

At some stage Dr McDaid wrote in manuscript on the email “5 yrs N European” and “Change OFTEC letter of conformity to 34 GJ/m²”. As is apparent from the note, by this time she had become aware of the miscalculation in converting 900 Klys.

Dr McDaid said of this email:

“......To me that was confirmation that the green pigment, as used – the green colour, let's call it phthalocyanine green, used by Kingspan and all of the other -- the vast majority of the other tank manufacturers would provide ten years' UV performance.”

Of the statement that “The RM8402 UV package was improved to double the lifetime of the Borecene grades vs. ME8152” she said that it :

“….confirmed to me that the conventional grade, the ME8152, which had been already OFTEC approved, and I was aware had been supplied to the industry for many years, that the UV performance – that the UV package in that had been improved, as it says, to double the lifetime in the Borecene RM8402 grade.”

The email was accompanied by eight slides. The second slide said this:

It is not wholly clear where the data in this slide came from. But it looks as if it was from the toolbox or from whatever it was that caused the entries in the toolbox: see para 260 above.

The fourth slide looked like this:

This graph was based on the Series C CIBA test results of July 1998 and compared Specimen B (Borecene ME 8168 Tinuvin 622 2,500 ppm), on the left hand side against the results for Specimen I (ME 8168 Tinuvin 783 2,500 ppm), on the right. The vertical axis is the hours of exposure necessary to produce 50% of the original tensile impact strength. But the Specimen B result was suspect: see para 210 above.

The fifth slide looked like this:

These were the Polimoon results from Series H (excluding the 10,000 hour result) for RM 8343 (=ME 8169) – the results for RM 8403 were in fact better. They indicated that EaB remained close to the original figure and at about 95% even at 7,500 hours.

The sixth slide looked like this and contained data in relation to EaB properties :

The seventh slide looked like this and contained data in relation to tensile impact strength:

These data were in each case derived from the Series G results for ME 8169 (RM 8343) which were more favourable than the ME 8161 (RM 8403) test, even though ME 8161 was the powder form of 8402 which Kingspan was about to purchase in large quantities.

The eighth slide said this:

A number of other things were apparent from this email. Firstly, the recommendation for 10 years was given on the footing that the green pigment selected would double the weatherability and 10 years would be the limit beyond which black was recommended. Second, Borealis expressed themselves as having been struggling with their WOMs and UV testing for a long time with documentation not on the level they would like to see. That was an indication that Borealis did not have a sizeable body of recorded data bearing on the question of weatherability and was given on the basis of limited information. Third, the WOM EaB results on natural Borecene were expressed as giving a lifetime of 4,000 hours representing 250 Kly (erroneously as it happens – the correct figure beings about 300 – 350 Kly). The WOM tensile impact results were expressed as giving a lifetime of 6,000 hours which in a Borealis WOM would be something like 500 Klys. 22 GJ/m² is about 500 Klys. 34 GJ/m² is about 800 Klys. This figures show the effect which the pigment would need to have depending on the figure for natural Borecene from which you start and the Kly figure which you wish to replicate in a WOM.

The data slides in the PowerPoint file from which the slides emanate contained embedded data, of which Ms Fatnes was unaware, but which Kingspan was able to access by double clicking on the top slides. I regard the significance of that as very limited. The necessarily complicated analysis of the point is contained in Appendix 4.

Dr McDaid replied to Ms Fatnes the next day. In her email she said:

“Have Borealis ever tested pigmented samples similar to the ‘tank green’?

I am not sure if are [sic] aware but there was an error in the weathering test requirements in OFS T100 and prEN13341. The irradiance was miscalculated as 22 GJ/m2 instead of 34GJ/m2 (equivalent to 800 Kly). In the letter of conformity received 16/08/99 from Leif Rhen [sic] the weather resistance of ME8161 (Footnote: ⁴³) is given as ‘exceeding 22 GJ/m2’.

Can you please re-issue the letter of conformity for RM8402 stating that the weather resistance will exceed 34 GJ/m2 (elongation at break shall be greater than 50% of the initial value).”

On 26 November 2001, Ms Fatnes responded in the following terms:

“We have tested several coloured samples, but have not tested “tank green” as far as I know. We would be very interested in getting relevant sample (or the pigment) for testing.

Regarding OFTEC:

I knew the CEN standard was updated but was not aware of the change in OFTEC. Could you get me a copy of the latest version?

We will of course look into updating the statement according to the latest

OFTEC requirements. To whom should such a statement be sent.” [Bold added]

On the evidence before me it is true that Borealis had not tested tank green so far as any tests on ME 8160/1 = RM 8402/3 are concerned. But Ms Fatnes appears to have been unaware of, or forgotten, the Dyno tests which did include Green Borecene ME 8169.

Kingspan submits that the absence of any suggestion that Borealis needed to conduct further tests before issuing an updated letter of conformity implied that Borealis was satisfied that Borecene was capable of withstanding 34 GJ/m² of weathering (circa 800 Klys). I do not, however, regard this email as making any statement about compliance with any 34 GJ/m² standard. Borealis simply said that they would look into the question of updating the letter. Moreover the figures given in the second and eighth slides attached to the email of 18 November would not necessarily be ones on the basis of which Borealis would express an expectation of 34 GJ/m².

There is no evidence that any version of the OFTEC Standard was sent in response to the email of 26 November.

Borealis was now acutely aware that its products were more expensive than those of its competitors. A Borealis presentation document of 19/20 November 2001 referred to the price pressure from its competition:

“Market Situation

- Market price remains well below Borealis prices:



Bonar buying DOW @ є760 nat.pellets



ICO switching volume to Exxon at є750/t

 Borealis = є850/t lowest”

On 26 November 2001 there was an internal meeting of the Customer Support Team (“CST”) at Borealis. The minutes record that the focus for 2002 was to include a reduction in additive cost by 10% in Borecene RM. The minutes of a further meeting on 11 March 2002 record that “New UV and at lower concentration for Borecene RM will be tested in March”.

The 19/20 November 2001 presentation document also recorded:

“Lowlights:

- Big problems with cracking oil tanks at Balmoral – polymer or pigments”.

On 4 January 2002 Mr Wood sent an internal email which said:

“Finally we received an order for 3000 Mt of RM8402… In the knowledge of Balmoral’s problems should we consider introducing RM 7402 for Oil Tanks

– if there is a problem it would be multiplied 6 fold!!!”

At the turn of the year Dr McDaid and Ms Fatnes were in correspondence about the latest draft of prEN13341 and how the proposed KIWA standard might differ from it. Borealis was trying to help Kingspan in their discussions/negotiations with KIWA, which was showing signs of wanting to set a national standard of its own, despite the proposed European one. On 6 December 2001 Dr McDaid sent Ms Fatnes the latest draft of prEN13341, which she asked to be kept confidential, together with extracts from the proposed Dutch standard. She pointed out that KIWA wanted to test for UV stability over a shorter period than the European standard i.e. for the equivalent of 5 years exposure in a moderate climate and that KIWA also insisted that tensile impact was a superior test for detecting surface degradation. She also said that moulded samples of pigmented (tank green) RM 8402 and a powder sample would be shipped to Borealis that day.

On 18 December 2001, after these had arrived, Ms Fatnes asked to know what the pigment was and who was the pigment supplier. Dr McDaid replied saying that Kingspan did not tend to disclose their pigment supplier but that she would try to obtain any information particularly required from them directly. In her reply Ms Fatnes said, inter alia, that the pigment type was essential for understanding its effect on the UV performance. Dr McDaid agreed to get the information sought.

On 8 January 2002 Dr McDaid supplied an “H & S Data Sheet” for the Oil Tank Green pigment. On 14 January 2002 Ms Fatnes responded to a question that Dr McDaid had asked as to whether she expected pigmented RM 8402 to meet a particular requirement of KIWA (that after the equivalent of 5 years’ exposure the change in tensile impact strength should not be greater than 25%) by saying that she would like to see some results from the UV test on the green samples that Kingspan had sent for testing before replying.

On 28 January 2002 Ms Fatnes sent an email to Dr McDaid in which she said:

“2)

Regarding the UV requirements in prEN 13341 (total irradiance of 34 GJ/m² there may be something wrong. I just got a big ? from my colleagues who are experts in this field. 34 GJ/m² may be far too high. We are checking this via other experts in the field..

Please let me know what expected lifetime for outdoor tanks would be (I have been assuming 8-10 years mid European climate. Is that correct?)” [Bold added]

This email is somewhat surprising given that Ms Fatnes was present at the OFTEC meeting of 15 September 1999 at which it was agreed that the correct measurement should be 37.5 GJ/m² as the equivalent to the 900 Klys specified in both the Standard and prEN13341. In any event on 28 January Dr McDaid emailed to say that she understood that 34 GJ/m² was based on an assumed 10 year Northern European exposure. On 5 February 2002 Ms Fatnes emailed Dr McDaid to say that Borealis had looked into “the UV requirement “34 GJ/m²” and I can confirm that it is in principle OK and corresponds to 10 years North European climate”.

I do not regard this email, which was not sent with any intention of inducing Kingspan to buy Borecene, as making any statement about whether RM 8402 satisfied the prEN13341 requirement to have an EaB of more than 50% after irradiance of 34 GJ/m² in a WOM. It is the end of a discussion, itself part of a discussion about the draft European standard and the proposed KIWA standard and the differences between them, of what 34 GJ/m² represents in terms of exposure in Northern Europe.

On 6 March 2002 Mr Ervik wrote to Dr McDaid (further to her request of 22 January 2002) stating that “optimum peak temperature for Borecene RM8345 (powder version of Borecene RM8344) is approx 190°C, when using a rotolog. Borecene RM8345 may however be processed at 190° C + / - 20 C and still have satisfactory properties.” RM 8345 had an MFI of 6. Mr Halvorsen subsequently sent Dr McDaid a memo on 16 April 2002 saying that Borecene (he was referring to Borecenes generally) could be processed at a peak temperature of 175°C, and then later on stated that it could also be processed at a peak temperature of 220°C “keeping good mechanical properties”. These two temperatures produce a PIAT window of 45°C. The memo said that Borecene has a broader processing window temperature wise than conventional materials.

Until about the end of October 2002 Kingspan ordered RM 8402 from Borealis and it was used in all four factories.

On 27 August 2002, Mr Gregg of PDC, prompted by what was then thought to be the impending introduction of prEN13341, sent Mr Phelan, Mr Fred Rusk and Dr McDaid an email with an attachment setting out his understanding as to the relationship between UV packages and what was required to provide 10 years of weather resistance in Europe. The attachment stated:

“Titan have always specified UV8 package or equivalent to provide sufficient UV protection for minimum 10 year life in Europe (incl S Europe).

EN 13341 specifies that the material must be tested to a total irradiance of 34 GJ/m², which is the equivalent of 10 years exposure in Northern Europe.

It has been brought to our attention that some suppliers are not using a UV 8 package. This is being further investigated through our contacts and more information should be available in a week’s time.

As it stands we know that material supplied with the UV8 package in the past has provided us with a minimum 10-year life span in the UK and hopefully on the continent.

To date we have not had to conduct any weather resistance tests and have been able to get by with a certificate from the material supplier.

We have concerns that unless we have a UV8 package there is a strong possibility that the material will not pass the EN weathering test. In fact some material suppliers have also expressed reservations.

We strongly recommend that each material supplier be reminded that all future supplies are to a minimum of UV8 specification, if not we will remove them from our preferred suppliers list” [Bold added]

The attachment went on to express concern about the extent of the programme of tests on materials which the EN standard would require manufacturers to carry out.

It is apparent from this email that Kingspan was working on the basis (a) that a 10 year minimum lifetime was needed for prEN13341; (b) that material to the UV 8 standard would provide it (in fact it could only do so with pigment); and (c) that it had been possible for them to “get by” by way of compliance with section 4.1 of the OFTEC standard by relying on a raw material manufacturer’s certificate of conformity.

By 2002 Mr Shorter had left Borealis and had set up ECMS, a consultancy firm in rotomoulding. He is the contact, or one of the contacts, referred to in the 27 August email. In late August 2002 Mr Gregg engaged him to test the materials supplied by different suppliers to Kingspan to determine the UV additives/absorbers used by them. On 2 September 2002 Mr Shorter emailed Mr Gregg to confirm the upshot of a telephone conversation between them that day, namely that Mr Gregg would forward samples to be tested for UV additive package and Mr Shorter would prepare a technical report comparing their performance with that of a typical UV package. Mr Shorter suggested that the timing was right for a company like Kingspan actively to specify to their supplier what performance was required in terms of UV resistance. Before then Mr Gregg had seen no such need, taking it for granted that suppliers providing raw materials to manufacturers would ensure that the material met the weathering requirements of the OFTEC Standard.

In the course of this conversation Mr Shorter had indicated, inter alia, that some suppliers had been downgrading their UV package over the last 12 – 18 months; that he had done a lot of the earlier work for OFTEC and, although no weathering tests were carried out he would be fairly confident that a material with a UV 8 package would pass the new European weathering test but he was doubtful whether a UV 6 material would do so.

On 6 September 2002, Ms Fatnes wrote to Mr Ari Makela (of Borealis) indicating, in relation to Balmoral, that she had got indications from Mr Halvorsen that Borealis “may have a big problem here”. The same day, Mr Halvorsen also wrote to Mr Makela providing an update on what had been done as a result of Balmoral’s problems with Borecene. He indicated that, in the light of Balmoral’s problems with cracking tanks, Borealis undertook a range of testing on RM8402, RM7402 and a reference grade. Based on the outcome of the testing they could not find any problems with the material.

Mr Halvorsen said:

“Therefore internally we have discussed [the Balmoral issues], and we have decided to do some more testing. The reason for this is that maybe UV stability is influenced. Just to try to explain you, when you do a tecroblend (Footnote: ⁴⁴), all natural particles will not be coated with pigment – compare to what will happen with a dry mix. Therefore we want to test elongation to break after the samples have been exposed in Weather-O-Meter. I doubt this is the case but still I think we should do the testing. The customer is not informed about this

Based on all this, I believe the way of processing is the problem …”

Ms Fatnes was not able to say whether any further EaB or other weathering tests were undertaken on samples exposed in a WOM. Nor could Mr Halvorsen recall whether any weathering tests had been done as part of the Balmoral investigation, but he thought that some FTIR tests may have been done under Mr Borve’s auspices. Borealis considered that the cause of the problem might be that Balmoral’s pigment was not covering all of the material. If that was true, then the natural material left uncovered by pigment might be degraded by UV. In the event Balmoral’s tanks proved not to have been degraded.

In October 2002 Borealis produced an internal presentation in relation to the tank failures at Balmoral. One of the questions asked was:

“UV is the amount we add sufficient for 10 years outside in Europe?

Check with additive group + supplier (statement)”. [Bold added]

Mr Borve of Borealis was to address that question and tests were to be carried out on RM7402/RM8402 using “Maus mould with small radius” with various different green pigments, different coating levels, and with dry-blended and grind blended material.

One of the slides for the presentation set out the advice of Dr Astrid Frøhaug, a member of Borealis’ Additive Research department, as contained in an email of 4 October 2002. The email and slide stated:

“10 years outdoor in central Europe corresponds to 15,000 hr in weather-ometer (WOM) (Footnote: ⁴⁵).

We have some data for natural nonpigmented Borecene. We have 65% retained tensile strength after 10,000 hr in WOM with 1750ppm Tinuvin 783⁴⁵ (about 6.5 year) (But you may have other results if you are measuring other mechanical properties...,and it is also a matter whether you are measuring absolute or % retained strength). We have a lot of data showing that we have the same UV-stability with the new recipe as with the old one.

Nearly all pigments has a positive effect on the effect on the UV-stability (except azo red and yellow). Ti02 (white) is the poorest one, only doubling the UV-stability while e.g. phthalo green is about 5x better than unpigmented PE. So with “normal” amounts of UV-stabiliser and a “normal” pigment it should be no problem to stand 10 years outdoor in central Europe…”

Kingspan observed that it is apparent from this passage that contrary to what Borealis had told Dr McDaid on 18 November 2001), Borealis (or Dr Frøhaug at least), recognised that the new Tinuvin package did not give rise to a doubling of the lifetime of Borecene as against ME8152. It is not clear what was the basis upon which the observation “phthalo green is about 5x better than unpigmented PE” was made. It may be that Borealis tested some green pigmented Borecene samples; but, if so, such tests have not been disclosed.

By now Borealis had come to realise that the Balmoral complaint was a potential time bomb insofar as RM 8402 had been sold to other customers with similar applications.

On 25 September 2002 Mr Borve wrote to Mr Webster with the results of tests undertaken to ascertain the concentration of UV stabiliser contained in a specimen of Borecene sent to Borealis by Balmoral for testing. Mr Borve indicated that:

“the conclusion from the analysis of the powder-sample showed that both polymers were of RM8402-type, and contained around 1800 ppm UV stabiliser (normal)”.

Kingspan observe that, if 1,800 ppm was to be regarded as a ‘normal’ concentration of UV stabiliser in September 2002, it is unclear how Borealis could have justified its previous decision to reduce the stabilisation in RM8402 to 1,300ppm. I am not convinced that much can be read into this. Mr Borve may simply have been indicating that 1,800ppm was not abnormally low. Stabiliser concentrations have a target and a max/min figure. The range from min to max may be 4-500 ppm. Borealis aimed always to be above the target. In those circumstances 1,800 ppm could be regarded as not abnormal if the target was 1,300 ppm, even though it is 500ppm in excess. It is also not clear what the stabiliser was.

In his reply of the same day Mr Webster said that Mr Joyce of Balmoral had been on the telephone and that Mr Webster had told him that one of the six matters that Borealis were looking at was whether the amount of UV added was “sufficient for 10 years outside in Europe.” Mr Webster’s evidence was that Mr Joyce had asked that question. In the event, in October a programme of investigation was worked on between Balmoral (Mr Joyce) and Borealis (Mr Webster and Mr Borve) at an ARM conference in Toronto. Balmoral tanks were failing in substantial numbers after a relatively short time, such that inadequate UV resistance could not be the cause. On that account Borealis decided not to make UV a central feature of their investigation.

Borealis undertook testing on four differently processed specimens of the materials used by Kingspan to make its RM8402 tanks. The testing was carried out in respect of each specimen type at two different testing speeds (100mm/min and 50 mm/min) in the Borealis WOM. The parties are agreed that the specimens tested were as follows:

The results of these tests, available in September 2002, were concerning in that at 4,000 hours in a Borealis WOM the A specimens, sections from Borecene rotomoulded by PDC from green dry blended powder, had failed, having either 34% or 42% of original EaB. At the same time Sample B had either 69% or 60% of original EaB; Sample C had 52% or 66% and Sample D had 62% at 100mm/min.

Sample B, which had not failed at 4,000 hours would have had (on a linear extrapolation) an expected lifetime of between 6,000 and 7,000 hours which would probably meet the 22 GJ/m² requirement and give a UV-X rating of between UV 8 and 10. But there was no room for improvement on account of pigmentation since these tests were on pigmented material.

As appears from paragraph 73 above, tests of 1mm compression moulded samples of Dow NG 2432 carried out in 2005 by RAPRA produced significantly worse results, in that failure occurred after 3,000 hours in a 0.51 W/m².

On 23 October 2002 Mr Wood stopped all deliveries of RM 8402 to Kingspan. In an internal Borealis email of that date Ms Bergius said that this was:

“..due to fear of problems with the tanks after production/use ref problems/big claim from Balmoral

Bob asks that RM 8402 be changed to RM 7402 for these customers”

The evidence as to exactly why Borealis took this step is unclear. Mr Webster said that it was very much Mr Wood’s suggestion. Kingspan had some concerns and wanted reassurance so he thought - why not take a belt and braces approach? Mr Wood said that the initiative for a change came from Mr Rusk, who was concerned about RM 8402. He, Mr Wood, thought that, if Mr Rusk was concerned about the RM 8402, then RM 7402, with a slightly lower MFR (UV was not then in issue), would be slightly tougher and so why not go for that? He claimed not to have been influenced at all by the KIWA results (which he could not recall whether he had received). The change was just to give the customer a feeling of confidence.

The likelihood is that Mr Wood had by the end of October already learnt of the KIWA test results (Footnote: ⁴⁶), which – on the assumption that you could treat reaching 50% of the original EaB as the time when UV related cracking would occur - showed, so far as the A specimens were concerned, that, even with the green pigment chosen the material would not last 10 years nor even withstand 22 GJ/m² and would, in any event, fail the OFTEC and prEN13341 EaB tests. In the light of that, as Ms Bergius’ contemporaneous email shows, he feared that continued use of RM 8402 might lead to a claim of similar magnitude to that being presented by Balmoral and, therefore, asked for the change to be made.

The first version of Borealis’ report on testing RM 8402 for KIWA approval is dated 7 October 2002 and was sent to Dr McDaid by Mr Halvorsen on 8 October 2002. It contained no reference to any UV results. The second version of the report, which was sent to Dr McDaid by Mr Halvorsen on 1 November 2002, gave the result for sample B - the specimen type defined in the prEN standard. This revealed that after 4,000 hours the sample had decreased from 1,200 % to 820 %, the latter figure being c 68% of the former. No other results were included.

Meanwhile on 16 October 2002 Dr McDaid had had a conversation with Mr Halvorsen. He told her that the rotationally moulded A specimens had failed before 4,000 hours. Dr McDaid then had a conversation with Ms Fatnes in the course of which she was given details of the 4 sample results. For some reason Dr McDaid made two notes of this conversation.

According to one of them Ms Fatnes said (a) that the Borealis package was UV 5 or 6 and that Borealis had never claimed to use a UV 8 package; and (b) that she was aware of the UV requirement of prEN13341 and the OFTEC Standard but was not concerned and thought that the pigment would offer sufficient protection over 10,000 hours. She said that the 10,000 hour requirement of prEN13341 – the EaB test - put Borealis at a disadvantage because, even with a 50% drop the absolute value was much higher than that of competitors at the 50% stage - the EaB test disadvantage point. According to the second note she was “confident” that the green pigment would extend the range sufficiently to meet the European standard.

Ms Fatnes’ evidence is that, while she may have said that she expected pigments to extend the lifetime of Borecene, she thought it unlikely that she would have assured Dr McDaid that the addition of green pigment would extend UV performance of the end product sufficiently to meet the requirements of prEN13341 or OFTEC because the lifetime of a product depended on a number of factors such as pigment and processing over which Borealis had no control. It was, she suggests, unlikely that she would have given such an assurance during a conversation about the KIWA results, which were themselves obtained from green pigmented samples from Kingspan which showed, in respect of Sample A, the opposite.

I think the likelihood is that Ms Fatnes, whilst giving no assurance, said that she confidently expected that an appropriate pigment would extend the UV weatherability for the requisite period.

It is not suggested that Kingspan was induced to continue purchasing Borecene, whether RM 8402 or RM 7402, as a result of what was said in this telephone conversation. Dr McDaid discussed this conversation with Mr Gregg. His evidence was that he was shocked because he thought that it was for the material supplier to ensure that the material supplied would, of itself, i.e. without pigment, satisfy the OFTEC UV requirements.

On 17 and 24 October 2002 Dr McDaid and Mr Gregg spoke with Mick Shorter. Her note of these conversations, which accorded with Mr Gregg’s general recollection, reads as follows:

“Borealis – UV Package, discussion with Mick Shorter, 17/10/02 & 24/10/02

Borecene grades were specified with a UV 8 package in their early days. MS had a signed agreement with Borealis that they would not alter the package without consulting him.

In Dec ’00 he visited Norway and was informed that the package had been reduced to UV 5 in Jan ’00.

MS indicated that it would take up to 5 years to effectively approved (sic) a UV package.

He suggested that the switch was made for processing efficiency and cost savings. Suppliers are keen to harmonise packages in various grades for different processes/applications.”

In the light of what they had learnt from Mr Shorter Dr McDaid and Mr Gregg drafted a letter for Mr Rusk to send to Mr Wood of Borealis. This letter was sent on 30 October 2002. In it Mr Rusk referred to the “alarming” UV test results for RM 8402 samples. He observed that the specimen type defined in prEN13341 (i.e. Sample B) was expected to reach the limiting value of 50% at less than 7,000 hours rather than the 10,000 hours required by that standard (Footnote: ⁴⁷). He referred to Miss Fatnes’ telephone conversation with Dr McDaid of 16 October 2002 (see para 351 above); pointed out that the UV 5 package to which she had referred offered substantially lower UV protection than what he described as the industry benchmark (Footnote: ⁴⁸) of a UV 8 or equivalent package; and said that Kingspan had always been assured by Borealis that their grades approved for tank use would meet the requirement of the OFTEC and prEN standards, but the test results clearly indicated that RM 8402 would not pass the UV test in the prEN standard and would not therefore be suitable for use in oil tanks and also, he said, invalidated the OFTEC approval for RM 8402.

The letter went on to say:

“We would like to draw your attention to three other relevant items of information with (sic) are very pertinent. Firstly, when Borealis first approached Tyrrel/Plashapes in the early 1990’s with the intention of selling them material they were advised that amongst other properties the minimum UV performance would have to be based on Du Pont 8504 UV8D which we were using at that time, (see attached specification sheet). Secondly, trials were conducted at Tyrrel Tanks in 1996 and 1997 when the subject of the UV package was discussed. On both occasions Borealis confirmed the use of a UV 8 package. Thirdly, in a recent meeting with Fred Rusk at Titan Environmental Bob Wood and John Webster when asked about the UV package in RM8402, claimed it was UV8.”

On 31 October 2002 Mick Shorter sent his report on additives. This revealed that the Borealis sample which he had had analysed had a UV stabilisation package of 700 ppm Tinuvin 622 which Mr Shorter described as on the low side of a UV 4 level of performance. He observed that a UV 8 level would be achieved by a typical formulation based on, e.g., 2,000 ppm of Tinuvin 783 and a UV 4 performance would result from using 800-1,000 ppm. He expressed the view that the level analysed in the Borecene sample indicated a performance below UV 4.

A meeting was arranged for 1 November 2002 at the Banbridge site to discuss Mr Shorter’s conclusions. It was attended by Mr Shorter and Noel Crowe, Pat Phelan, David Drury, Dr McDaid, Mr Gregg and Fred Rusk of Kingspan. Dr McDaid and Mr Gregg expressed dismay that Borealis had let them down in that PDC had proceeded on the basis that the Borecene grades met the relevant OFTEC standards but in the light of Ms Fatnes’ statements and Mr Shorter’s investigations it was apparent that they did not or at least there was evidence that they did not. The upshot was that PDC was to pursue investigations with Mr Shorter.

On 7 November Dr McDaid gave instructions to Mr Shorter to do the following:

As is apparent from these instructions Kingspan had not previously specified an antioxidant or stabiliser package to their suppliers. Mr Gregg had assumed that all the material Kingspan purchased met prEN13341 and that no additive package needed to be specified.

Ms Fatnes replied to Mr Rusk’s letter on 14 November. She said that “UV testing” and “UV performance” were not easy and straightforward tests; that a number of factors influenced the results such as the material and its stabilisers, the preparation of the test piece (compression moulding, rotational moulding etc.), the preparation of the dogbone for the test, the WOM used, the temperature and humidity in the test chamber, and the tests used (EaB, tensile strength, tensile impact etc.). As a result of becoming increasingly aware of this Borealis had tried to reduce the variation in the test results and to understand the different factors; and had chosen to rely a lot on advice and test results from additive suppliers. Based on that information the UV package chosen “was expected to meet the requirements to UV performance”. Internal tests at Borealis had not been able to fully show this and “therefore we have done work to clarify the reasons behind”. (This was a reference to data from CIBA and Cytec).

Ms Fatnes made the EaB test disadvantage point and suggested the comparison should be between remaining properties and not a 50% reduction from highly variable starting levels. (The problem with that point is that the material, when moulded, needs to pass the EaB test in order to comply with the OFTEC Standard, and would need to do so in the future to comply with the prEN standard).

She explained that the letter of conformity had been made “to the best of our knowledge and on the following arguments in lack of real data”: ME 8152 (which was the general purpose ZN) had been used earlier and conformed with OFTEC. The UV package in all Borecene grades had been improved. Supplier information indicated that, based on their data, the package would be sufficient to give the necessary UV protection. Further the right type of green pigment would boost UV performance. The DuPont 8504 material was “not in detail known to us”. The UV 8 performance indication from DuPont was very probably based on compression moulded samples (which, she said, would tend to give better results than samples which were just rotationally moulded).

She added:

“We realise that the UV results achieved in the Kingspan samples are not as good as both Kingspan and Borealis would like. We therefore propose that we discuss possible ways to improve the performance in the Borecene grade that Kingspan would like to work with in the future. Solutions could involve both improvements in base resin and in choice of pigment to boost performance”.

On 21-22 November 2002, a meeting took place of Borealis’ rotomoulding marketing team at which a power point presentation was produced. Ms Fatnes contributed to sections 8 and 9 of the presentation, entitled ‘Enhanced Borecene’ and ‘Borecene & UV Stability’. Kingspan draws attention to the following aspects of the presentation:

On 27^th November Dr McDaid emailed Mr Shorter to give him further instructions about testing another RM 8402 sample. On 2 December Mr Shorter emailed Mr Gregg a memo dated 29 November 2002 in relation to the tests carried out. The memo pointed out that outdoor exposure was, to date, the only real means of providing reliable information on the performance of a given stabiliser; and that some components could be detrimental to the light stability of LLDPE including pigment.

In the report Mr Shorter recommended, by way of general guidelines, the following appropriate loading levels of Tinuvin 783 for different UV performances for natural polymer:

His report emphasized (a) that some pigments could prejudicially affect the UV performance and the stability and dispersability of the stabilisation components; (b) that when discussing performance the whole formulation should be studied i.e. base polymer, pigment and typical pigment concentration, wall thickness etc; (c) that the UV stability of a rotomoulded part can be related to thickness, processing conditions, colour and pigment levels, dispersion of the pigment and location; and (d) that it was important to test the final polymer product.

On 3 December 2002 a meeting took place between Kingspan (Fred Rusk, Pat Phelan, and Dr McDaid) and Borealis (Ms Fatnes and Mr Halvorsen). Mr Wood probably was not there. There are two notes of this meeting which do not wholly coincide. Nevertheless the substance of what occurred is tolerably apparent from the two of them.

As the Kingspan note records, Borealis said that the only tank complaints in which they were involved were from DESO and Balmoral where the cracking was probably attributable to (i) poor product handling (the nature of which differed in each case) and (ii) the colouring process used by ICO who supplied both DESO and Balmoral with a grind blend version of RM 8402. Borealis had not received complaints on RM 8402 products using a dry blend powder mix as employed by Kingspan.

Borealis referred to the fact that tests (i.e. the KIWA tests) conducted by them on RM 8402 as currently supplied showed that the samples were expected to reach 50% EaB at between 6-7,000 hours (Footnote: ⁴⁹) (and not the 10,000 hours required by the prEN standard) but said that such failure did not imply that the tank would then collapse. They said that they had not conducted UV tests on natural RM 8402 but had done so on other grades including RM 8342, using the same UV package.

The Borealis note records that Borealis did not have a lot of UV data for RM 8402 as most of the UV testing had been concentrated on RM 8342/3. I find this somewhat puzzling given that Series G had involved ME 8161 (=RM 8403) as well as ME 8169 (=RM 8343); as had Series H. But that may have been comparatively less than the testing on RM 8342/3.

The Kingspan note goes on to record that Borealis claimed that the stabiliser package in use in both RM 8402 and 7402 would meet the standard in natural samples (Footnote: ⁵⁰) and suggested that the lower than expected results (i.e. the KIWA tests) were due to the pigment.

Borealis said that they did not rate their grades as UV4/6/8 and conceded that their package was equivalent to less than UV 6. This was, I infer, a reference to the B specimens.

As the Borealis note records, Kingspan questioned whether Borealis’ UV package was good enough; and said that they gave a 10 year warranty. Borealis said that, based on supplier input, benchmarking with competitors and their own testing Borealis believed they had an “industry standard UV package”. The note records that the test results indicated that the green samples may not pass the 10,000 hours in the WOM as required by the prEN Standard (Footnote: ⁵¹); and that Borealis:

“explained that pigments can have a negative effect on UV and that some of the cheaper green pigments used may give negative influence. This information has become known to us recently⁵².”

Kingspan compares this statement with the representation in the Borecene Processing Guide that:

“When changing from a conventional material to a Borecene grade, the same pigments can be used, in the same quantity.”

The note records that Kingspan had used an external lab (i.e. the one used by Mr Shorter) to analyse RM 8402 which had found 700 ppm of Tinuvin 622 - see para 359 - “but not the other half of the package which is Chimassorb 944”. Borealis pointed out that it was necessary to analyse the full package and that Kingspan’s result was misleading. Then, as the Borealis note records:

“Kingspan had also got advice (from Ciba?) regarding what is needed to to [sic] reach typical UV levels:



UV 4- 800-1000 ppm Tinuvin 783



UV 8 – 2000 ppm Tinuvin 783, or 2500-3000 ppm Tinuvin 622.

We did not give the detailed recipe to Kingspan, but indicated that it is in between the recommendations for “UV4” and UV8”, and closer to UV8 than UV4.”

The advice referred to was Mr Shorter’s advice.

Ms Fatnes’ indication that the “recipe” was in between the recommendations for UV 4 and UV 8 was incorrect (or, as she put it, “I have misformulated myself. I am sorry about that”). 1,300 ppm, the formulation for RM 8402 is closer to 1,000 ppm (and 800 ppm) than it is to 2,000ppm.

Borealis’ note of the meeting goes on:

“We also informed them that RM7402 natural has passed the requested UV tests, and has an approval according to the similar standard for Chemical tanks (same UV requirements).”

The reference to “the requested UV tests” must have been a reference to OFTEC or prEN13341 or both. Ms Fatnes sought to justify this statement in her oral evidence on the basis of the Polimoon tests (Footnote: ⁵²). But those tests were not carried out on RM 7402. She then said it must have been other tests that Mr Ervik had carried out for a customer which she had been told about. There is, however, no evidence before me of the results of any tests carried out on RM 7402, either to the OFS T100 or the preEN13341 standard. Borealis had carried out testing in 2000 on RM 7402 both internally and in customer trials including Seaplast in Iceland, Rhein Bonar in Germany, and Polimoon in Norway. The results were published on 13 November 2000 but these make no reference to UV resistance.

It seems to me that the reference to RM 7402 passing the tests was in fact a reference to the approval which had been granted by Norske Veritas under “the similar standard for Chemical tanks” (CENT/TC 266) which was based on the Polimoon results for RM 8403, 8343, and ME 8167. The letters referred to in the next three paragraphs confirm that it was an approval by reference to Polimoon tests to which Ms Fatnes was referring.

On 10 November 2002 Ms Fatnes had written to Mr Wood and Mr Borve, saying:

“Please find attached a first draft to a reply letter to Kingspan regarding UV performance of 8402. It may be of interest for you to know that Polimoon Cipax has got approval for natural 7402 based on tests according to the same standard that Kingspan wants to have the material approved against."

On 17 December 2002 Ms Fatnes emailed Dr McDaid. She said that she had checked the QC records for the UV level of analysed batches of RM 8402 and the result was that they were all in line with the specification of 1,300 ppm Tinuvin 783 so that the lab result that Kingspan had received was, she believed, for some reason wrong. This made plain that the Tinuvin 783 content of RM 8402 was 1,300, which, if they were interested, Kingspan could relate mathematically to the figures of 800-1,000 and 2,000 ppm which Borealis had spoken of at the meeting.

She then said:

“2)

Tank approval of RM 7402

The UV approval for the grade was actually based on tests made on the three at that time older grades, RM8343, RM8403 (same grade as you use) and ME8166 (the MFR 3 grade which was the grade which RM7402 is replacing. All three grades (natural colour) passed the test criteria. Samples were taken from tanks made at the tank manufacturer and compression moulded and tested according to the standard in our lab.”

In the course of the meeting, Borealis distributed a draft final report into the reported oil tank failures at Balmoral and Deso, which was an updated version of the October presentation referred to at para 337 above. A section in the October presentation had repeated the contents of Dr Frøhaug’s email of 4 October 2002: see para 338. However, in the report as presented to Kingspan changes had been made (they are marked up below to show the change but the fact of the change was not apparent from the presentation itself) as follows:

“10 years outdoor in Northcentral Europe corresponds to 10.00015.000 hr in Weather-o-meter (WOM

Results: We have some data for natural (nonpigmented) Borecene. We have 65% retained tensile strength after 10.000hr in WOM with 1750 ppm Tinuvin 783. (about 6.5 year).”

Mr Borve confirmed that it “must have been” he who prepared the amended slide. But he could offer no real any explanation as to why he made the alteration other than a suggestion that it might be that Dr Frøhaug came to him after she wrote her email and corrected it, “but I don't know”. Its effect was to withhold the fact that the tests had been carried out using Tinuvin 783 at a concentration of 1,750ppm, rather than the concentration in fact used in RM8402, i.e. 1,300ppm.

The draft final report removed the statement in the fourth bullet from the interim report that “updated results from WOM test will be included in the final conclusions” and instead inserted the fact that UV results would be best for black Borecene. Mr Borve was one of the team that decided on this change. He could not say why it was made. He, himself, was not aware of the Series J/KIWA test results that had been carried out on green samples (see para 343 above) and did not become aware until these proceedings. I find this surprising. Mr Borve accepted that, if he had known these results, he would not have felt able to make the statements in the presentation about Borecene, with “normal” amounts of UV stabiliser and a “normal” pigment having no problem lasting 10 years outdoors in central Europe (see para 338) without looking deeper into it.

The draft final report still contained a number of action points including:

“1.

UV - is the amount we add sufficient for 10 years outside in Europe?

Check with additive group + supplier (statement)”

Mr Borve confirmed that no statement from any supplier was obtained. This was because with Balmoral (where the complaint did not relate to UV resistance) UV was not the issue.

Borealis concluded that the level of stabiliser would have to be increased in RM 8402 or 7402 to enable the material to meet prEN13341. Kingspan with assistance from pigment suppliers needed to establish the effect of the tank green pigment as a dry blend on the UV performance of the base material. Further testing was required to establish the minimum stabiliser level necessary to pass the prEN standard.

It was agreed that RM 7402 would be used in the future and a test program was agreed to evaluate the UV performance of natural polymer and the effect of green pigment, and the effect of using a stronger (compounded) UV package in natural and green pigment polymer.

On 17 December 2002 Mr Gregg attended a meeting, arranged by James McGreer of the Irish Rotomoulders Association, with Andreas Thuermer from CIBA to discuss the implications of additive packages in rotational moulding and their effect on the weathering test for prEN13341. Mr Thuermer expressed the view that Tinuvin 783

When he circulated his note of the meeting the next day Mr Gregg observed that he did not think that Borealis material at 1,300 ppm would have a chance of passing the weathering test and “to be completely honest I do not think that they fully understand the whole area of UV packages”. This was based on a remark of Mr Thurmer to the effect that this was a very difficult area and he thought that Borealis might not fully understand it.

Borealis continued to have doubts as to the adequacy of RM 8402. On 3 January 2003, Ms Fatnes emailed Mr Webster and Mr Borve, stating, in relation to the CEN standard expected to be in force in 2004, that:

“the natural RM8402 is very borderline with its existing UV package. Normally it has been believed that adding pigment would increase UV resistance. After this latest testing of the green samples it is clear there is no positive effect, maybe rather a negative one on UV resistance from the green pigment in question”.

She went on to say:

“The Kingspan group... want to be 100% sure to comply with the new coming standard. Without improved UV resistance they will not buy natural Borecene for oil tanks from us any more.

Kingspan are according to Bob W. willing to pay more for an improved version (+15-20 E/t ?).”

Ms Fatnes proposed an increase in the Tinuvin 783 concentration, and gave expected lifetimes in relation to the new packages:

“Grade UV Recipes Proposed new Expected

today recipy [sic] lifetime (new

recipy) [sic] in

WOM

RM 8402 1300 ppm Tin 1500 ppm Tin 4-6000 hours

783 783

RM 7402 1500 ppm Tin 2000 ppm Tin >8000 hours

783 783

RM 8342 1500 ppm Tin Same 4-6000 hours”

783

Borealis did not convey to Kingspan any concern that 2,000 ppm would be needed for a lifetime in excess of 8,000 hours.

On 17 April 2003, Dr McDaid wrote to Ms Fatnes indicating that CIBA had estimated that 34 GJ/m² corresponded to 9,500 hours in a 0.5 W/m² WOM. CIBA had advised the tank industry that a minimum of 0.2% of Tinuvin 783 would be required to comply with prEN13341 – the same figure as had been proposed for RM 7402 in Ms Fatnes’ 3 January email. When asked about this Ms Fatnes said:

“You have to remember that, when CIBA is selling additives and giving advice, they will give advice to make 110 per cent sure that what they give is passing every kind of test...”

Ms Fatnes forwarded Dr McDaid’s email to Mr Webster and noted in relation to Kingspan’s request:

“I have discussed with our additive people.

Their advice is that we need min 2500 ppm Tinuvin 783 (today we have 1500 ppm) to match 9500 hours in Weather-O-Meter.

This means an increase in additive cost from today’s 25E/t to approx. 35 E/t. We know we already lose money on the oil tank business. Do we want to make an added cost product? Can we manage to get paid for it?”

As before a principal concern as regards additives was cost.

In consequence of the advice of those concerned at Borealis with additives, on 6 May 2003 a new draft IPS for RM 7402 provided for the concentration of Tinuvin 783 to be increased to 2,500ppm of Tinuvin 783.

There were further test results in 2003 namely:

After exposure to 734 Kly, Specimen L (the Ziegler Natta ME8152 specimen, stabilised with the standard package of Tinuvin 622 at 2,500ppm) had a higher tensile impact strength value compared to Specimen I (the Borecene ME8168 specimen, stabilised with Tinuvin 783 at a concentration of 2,500ppm) in both absolute and percentage reduction terms (Footnote: ⁵³). These results suggested that, even if stabilised with Tinuvin 783 at a concentration of 2,500ppm, let alone 1,500 or 1,300 ppm, the resin would perform somewhat worse in terms of resistance to UV/weathering than ME8152, stabilised with Tinuvin 622 at a concentration of 2,500 ppm.

But none of the specimens other than specimen B had failed after 734 Kly of exposure which is about 8-9 years in Northern Europe. Dr Botkin accepted that these results, and also those referred to in the next paragraph, did not suggest that there was anything in the molecular architecture of Borecene which meant that it had inherently poor UV performance or was inherently incapable of being stabilised.

The Series K tests were carried out on natural samples which, according to Mr Jamtvedt of Borealis, had been rotomoulded by Cytec using their own machines. These results, which were for EaB and Tensile Impact strength, were performed using the Cytec WOM of 0.35 W/m². The results went up to 7,250 hours corresponding to no more than about 5 – 5.5 years of exposure in Northern Europe. Six formulations were tested. Formulation 1 (the reference resin, being the formulation used in RM 7402 incorporating 1,500 ppm Tinuvin 783) had fallen to 61% of its initial EaB value after 7,250 hours. That indicated that natural Borecene, even with an increase in concentration from 1,300ppm (the RM8402 formulation) to 1,500ppm (the RM 7402 formulation), was – on the assumption that figures from WOM tests could be directly related to actual performance - unlikely to provide protection against 10 years of weathering in Northern Europe.

The tensile impact strength results were worse. After 7,250 hours Formulation 1 was down to 49% of its initial tensile impact strength.

But the EaB tests indicated that Formulation 1 in natural Borecene would probably provide performance in excess of UV 8 i.e. about 6 years’ worth in Northern European terms.

No results were obtained for Borealis’ old additive package, i.e. Tinuvin 622 at a concentration of 2,500ppm, by way of comparison.

In June 2004 Borealis was asked by Kingspan to issue a Letter of Conformity in respect of RM 7402. Mr Halvorsen emailed to Dr McDaid the following letter:

“This is to inform you that RM7402 – produced by Borealis AS – as supplied to KINGSPAN plc, when processed according to Good Manufacturing Practice, is expected to meet the material requirements of the OFTEC OFS T100 (May 1998 and prEN13341 (draft April 2003). That is:

5.

Weather Resistance (ISO 4892-1 & 2)

34GJ/m2 irradiance, (equiv. To 800klys)

Elongation at break greater than 50% of initial value

(The material is expected to have Weather Resistance equiv. to 420klys)”

…

 Tests 3, 4 & 5 conducted on specimens prepared from samples taken from the moulded tank”

Mr Halvorsen’s evidence was that the 420klys figure came from discussions with Mr Didrichsen, who was not a witness, and Ms Fatnes and that he understood it to represent approximately 4,000 – 4,500 hours (not far off the appropriate number of hours in a Borealis WOM). Mr Halvorsen was asked about the contrast between the 2004 Letter of Conformity and what was said in December 2002:

“Q. You see we've looked together at the December meeting where you and Ms Fatnes, and I appreciate that you rather left it up to her to say so, where you've together said that 7402 had passed the required standard, which was the OFTEC standard of 10,000 hours, yes?

A. Yes.

Q. If you had known this at the time, then you would have had to say to Dr McDaid, "I'm terribly sorry, 7402 isn't sufficiently UV stabilised either", wouldn't you?

A. But at least I know I was giving what I knew at that time so she is aware of what is actually happening.

Q. I completely understand. What I'm putting to you is this, if you had known this, that the advice from Mr Didrichsen and others was that it would only withstand 420 kilo-Langleys, in December 2002, when you met with Dr McDaid and you told her that 7402 had passed the required standard, you wouldn't have been able to say that, would you?

A. Maybe you are correct...”

In around September 2005, Mr Ervik obtained a set of weathering tests on RM 7402, as set out in his report of 14 September 2005, on the use of UV stabiliser in black rotational moulding grades. Carbon black was added to 8 of the 9 specimens, and tests were done on those specimens with varying concentrations of carbon black and different amounts of Tinuvin 783 stabiliser or none at all. The reference resin (sample 1) was left in its natural form, but stabilised with Tinuvin 783 at a concentration of 1,500 ppm (i.e. as per the RM 7402 supplied to Kingspan). EaB measurements were taken after 2,000 hours and 16,600 hours. The EAB value of sample 1 had fallen by 39% after 2,000 hours. Both Mr Ervik and Mr Halvorsen suggested that this was because the stabiliser was added in an unsophisticated and possibly defective extruder in the laboratory where the stabiliser would be exposed to air rather than in the course of commercial production. The other samples had reductions in EaB of only between 1 and 27% even after 16,600 hours.

With that inevitably lengthy introduction I turn to consider first, the law; secondly, what pleaded representations were made and whether they were false; thirdly, whether they were intended to be relied on and induced the contracts now in suit namely the several contracts for the supply of first RM 8402 and then RM 7402 between the beginning of 2002 and the autumn of 2003.

As I have said, there is a dispute between the parties as to whether the claim in misrepresentation (if there is one) is governed by the law of England or the law of Denmark; and that question depends, in part, on which of those laws governs the contracts between the parties. At this stage I propose to assume that the applicable law is English law.

Where A has entered into a contract with B after a misrepresentation has been made to him by B, or B’s agent, and as a result A has suffered loss, then B is liable to pay damages to A, unless B proves (i) that he had reasonable grounds to believe and (ii) that he did believe up to the time the contract was made that the facts represented were true: Misrepresentation Act 1967 section 2(1).

The effect of section 2(1) is to make a representor who cannot prove reasonable grounds for a false representation liable as if the statement had been fraudulent. In effect the Act imposes an absolute obligation not to state facts which are untrue and which the representor cannot prove he had reasonable grounds to believe. There is no need for the representee to establish that the representor acted negligently.

A claim in misrepresentation may only be advanced by a representee. This includes (i) the persons to whom the representation is directly made and their principals; (ii) persons to whom the representor intended or expected the representation to be passed on; and (iii) members of a class at which the representation was directed: Chitty (30^th Ed.) at 6-028.

A misrepresentation is a false statement of fact, as distinct from a statement of opinion - which is not to be regarded as a statement of fact merely because it turns out to be wrong. In certain circumstances a statement of opinion may be regarded as a statement of fact: Chitty at 6-007. A statement of opinion may be regarded as a false statement of fact if:

A statement of opinion may carry with it an implied representation that the person making the statement has reasonable grounds for his belief: Chitty at 6-009, 6-011. Such an implied representation is likely to arise where the person expressing the opinion was in a position to ascertain whether or not it was true. Whether such an implied representation arises depends on the words used, the context in which they were used, the knowledge and experience of the speaker, the position of the parties, and how a reasonable person in the position of the person to whom they were addressed would have been entitled to understand them. If the misrepresentation alleged is that the person making the statement had reasonable grounds for his opinion/ belief, it will be for the representee to establish that the representor had no such grounds.

There is a category of statement, sometimes referred to as “puffs” and, in more modern language mere sales talk, which will not found a case in representation. This may be so where a statement is in such general terms as to be unverifiable.

Thus in Dimmock v Hallett [1866] LR 2 Ch App 21 a description in auction particulars that a farm’s land was “fertile and improvable” was said to be “a mere flourishing description by an auctioneer” which could not, save in extreme cases, be regarded as a misrepresentation, and a statement that the land “in course of time may

In Johnson v Smart (1860) 2 Giff 151 at 156, a description in auction particulars which described a house which the purchaser had not seen as “substantial and convenient” was held to be “a description so relative in its terms to afford abundant opportunity for a conflict of evidence as to matters which are rather matters of opinion than of fact”. But the Vice Chancellor does not appear to have ruled out reliance on it on that basis since he went on to decide that the allegation that the house was not substantially built was not made out and accepted, on the evidence of three surveyors, that the description was not untrue.

The representee must show that the representor intended him to act on the statement: Banque Keyser Ullmann SA v Skandia (UK) Insurance [1990] 1 QB 665,790. That was always the rule in deceit; and the latter case indicates that the same applies in a claim under section 2 of the Misrepresentation Act.

If a statement has more than one meaning, the question is whether or not it was understood by the representee in the meaning which the court ascribes to it - which is the meaning which would be attributed to it by a reasonable person in the position of the representee - and that having that understanding he relied on it. Arkwright v Newbold (1881) 17 Ch D 301; Smith v Chadwick (1884) 9 App.Cas 187. But for a claim in deceit it would be necessary to establish that the representor intended the representee to understand the representation in the sense in which he did or was willing that he should do so: see Goose v Wilson, Sandford & Co [2001] 1 Lloyd’s Rep P.N. 189 paras 41,42.

The representee must establish that he would not have entered into the contract if the representation had not been made – so called “but for” causation. It is not, however, necessary for him to show that the representation was the sole inducement. But it must have played a real and substantial part in causing him to enter into the contract: see generally Raffeisen Zentralbank Osterreichen AG v RBS [2010] EWHC 1392 (Comm); Goose v Wilson, Sandford & Co, para 41. In order to determine inducement, it is not always sufficient to ask what would have happened if the representation had not been made. A representation, once made, may bring something into mind the truth of which becomes a material cause of the representee entering into the contract, even if, had it not been made, the representee would not have thought to inquire about it: Raffeisen, para 197; Dadourian Group International v Simms [2006] EWHC 2973 (Ch), para 548.

Once a representee proves that a statement was in fact false, the burden under section 2(1) shifts to the representor to prove that he had reasonable grounds to believe and did believe up to the time the contract was made that the facts represented were true. Where the negotiations for a contract have continued over a substantial time and the misrepresentation was made some while before the contract was finally entered into, this burden may be a heavy one. It will not be sufficient for the representor to prove that he had reasonable grounds to believe the statement was true when made; he will have to go on to prove that he had reasonable grounds to believe and did believe the statement was true when the contract was made: Chitty at 6-075 & 6-019.

As is apparent from the previous paragraph, the relevant time for assessing the falsity or otherwise of the representations in issue and the reasonableness of the representor’s belief is at the time when they are said to have been relied on i.e. when the contracts for the purchase of Borecene were made.

Borealis represented in its brochures that Borecene was suitable for use in the manufacture by rotomoulding of external oil tanks. This was a representation of the most general character.

Borealis also represented that all Borecene grades for rotomoulding were either “fully UV stabilised” (1996 Rotational Moulding Brochure; 2001 specification sheet) or “UV stabilised” (July 1998 and November 2000 Rotational Moulding Brochures; 1998 Processing Guide) and that RM 7402 was “fully stabilised” (May 2000 and May 2001 specification sheets). Borealis contends that these statements were too unspecific to amount to an actionable representation. Kingspan contends that in context they meant that Borecene had a stabiliser package which would preserve it from UV degradation for the expected lifetime of the product, which was 10 years.

I do not regard these statements as akin to a mere puff. In deciding what was being represented it is necessary to take into account a number of matters. First, the statements relate to natural Borecene. They say nothing about the effect of pigment or the moulded tank. Secondly the brochures and specification sheets were for general use, covering a large range of possible uses, rather than relating to any specific requirement of longevity, such as 10 years. Thirdly, the brochures which Kingspan received veered between “fully UV stabilised” and “UV stabilised”. A reasonable reader who had received all the brochures, as PDC had, would wonder what the difference was. Fourthly, both expressions are unquantified and imprecise and beg the question, at any rate from an expert rotomoulder, as to what exactly the phrase signified, which such a representee could reasonably be expected to ask. Kingspan never asked what exactly “fully UV stabilised”/“UV stabilised” meant. What they did was to ask for details of UV weatherability when they sought the letter of conformity in 1999 and when Dr McDaid emailed Ms Fatnes on 13 November 2001.

In those circumstances neither the expression “UV stabilised” nor “fully UV stabilised”, can, in my judgement, be taken as a representation that natural Borecene contained such stabiliser as would preserve tanks rotomoulded from it for whatever desired lifetime for rotomoulded tanks had been communicated to Borealis. It was no doubt implicit in that phrase that Borecene would have what could be regarded as a reasonable stabiliser package, looking at the question in broad terms in the context of

In any event, even if that be too narrow a view, Ms Fatnes’ email of 18 November 2001 contained a recommendation that natural Borecene could be used for outdoor applications with an expected lifetime of about 5 years. Attached to it were slides which showed that lifetime had been estimated at 4,000 hours in a Borealis WOM based on the <50% EaB test. The relevant slide showed a lifetime of 4 years in Scandinavia. Another slide gave a lifetime of 6,000 hours based on Tensile Impact evaluation of 6,000 hours. Whatever “stabilised” or “fully stabilised” might otherwise signify, Kingspan could not reasonably have thought, after this, that it meant that natural Borecene was expected to last more than about that time.

Borealis represented by its letter of conformity of August 1999 that RM 8402 (as ME 8160 became) when processed according to good manufacturing process was expected to meet the requirements of the OFTEC Standard namely weather resistance exceeding 22 GJ/m². It made a similar representation in 2004 in relation to RM 7402. But that cannot have induced any of the relevant contracts.

For the reasons stated in paras 156 - 158 above, that representation must be regarded, and was understood by Dr McDaid as, a representation that this result was expected when Borecene was used to manufacture green rotomoulded oil tanks.

The statement was a statement of opinion, not a guarantee or a warranty. It had to be such since as Kingspan knew, Borealis was not a manufacturer of tanks and had not carried out tests on any samples from Kingspan’s green rotomoulded tanks (or, as represented by Ms Fatnes’ email of 26 November 2001, any green tanks). Borealis did not know what pigment Kingspan used (other than that it was green, of which there are many varieties with different effects on UV resistance which may, in some cases, be prejudicial). Kingspan was reluctant to identify its pigment supplier. Dr McDaid of PDC knew by 2000 at the latest that pigments could improve weatherability, but that some could accelerate the degradation process: as was stated in an article on the Borealis website entitled “UV stabilisers”, which Dr McDaid had seen.

I am satisfied that the letter impliedly represented that Borealis had reasonable grounds for expressing that opinion. Borealis, although not rotomoulders, were experts in polythene production. They were being asked, and agreed, to give a formal letter for the purpose of satisfying OFTEC and obtaining a full pass, as had been explained to them in Dr McDaid’s fax of 18 May 1999. Kingspan was entitled to understand from the letter that Borealis had a reasonable basis for it. At the same time the representation had to be understood in light of the facts (a) that it assumed good manufacturing process; (b) that it was not, as Kingspan knew, based on any actual test of Kingspan’s own tanks with whatever pigment, process and designs they had been manufactured; and (c) it was expressed as an expectation not an advice.

Dr Botkin, Kingspan’s expert, accepted – in my view rightly – that anyone who received the letter of conformity knowing that there had been no test on one of his tanks would realise that what he was receiving was an opinion rather than any sort of definitive advice. He, himself, would have “emphatically encouraged” Kingspan to

Borealis made the statements which are set out in Ms Fatnes’ email of 18 November 2001. I do not regard this email as a mere exchange of ideas. It included “in general” a recommendation that for UV exposed natural Borecene a lifetime of 5 years was expected; but for a lifetime of 10 years colours improving UV performance were needed; and for lifetimes in excess of 10 years black Borecene was recommended. I regard it as implicit in that recommendation, that there was a reasonable basis for expecting a 5 year lifetime for tanks made from natural Borecene and 10 for tanks made from green coloured Borecene. That representation was qualified by the observation that it was a recommendation made on the basis of a level of documentation which was less than Borealis would like to see – it would, therefore, need to be considered with some caution. It was not a representation that Borecene would have those lifetimes. Further, in respect of green pigmented Borecene it was an indication as to the potential doubling effect of a pigment, which the moulder would have to select and apply, as opposed to the natural Borecene which was all that Borealis supplied.

Borecene was suitable for use in the manufacture by rotomoulding of external oil tanks. Kingspan themselves have manufactured tens of thousands of tanks that have not failed, even allowing for tanks that may have failed but whose failure has not been reported. Borecene has been used to manufacture tanks for use externally in, inter alia, Norway and the Philippines, as well as in other applications such as boats and tractor roofs. It was used successfully by firms such as JFC, a small rotational moulder in Ireland, who used RM 8343 for the manufacture of oil tanks; and by Uponor, a large Swedish firm for pipe systems and also for very large green tanks for those systems. It appears to have been used “successfully” in UV terms by Balmoral in the sense that, whatever caused those tanks to fail, it was not inadequate UV resistance. Professors Marshall and Malatesta and Dr Nugent all regarded it as suitable for rotomoulding oil tanks for external use. Dr Botkin accepted that it was possible to make tanks from Borecene lasting 10 years at any rate if you increased the thickness.

The critical question is the length of time that such tanks would withstand weathering. That is the subject of the other representations that are relied on.

The representation that Borecene was fully UV stabilised was not false. 1,300 ppm Tinuvin 783 was a reasonable UV package. Further, insofar as the representation about Borecene’s UV stability boiled down, by November 2001, to an expectation that natural Borecene 8402 would last in the open for about 5 years that was not false either, in that there were reasonable grounds to hold that view for the following reasons.

The UV testing carried out by Borealis between 1997 and 2000 showed, as both Dr Botkin and Mr Malatesta confirmed, that Borecene performed in a broadly similar way to ZN grades which had been used for many years without giving rise to any problems. The basis for the figures in the 18^th November 2001 email appears from the material attached to it. The 4,000 hours figure is based on EaB testing of ME 8169 (RM 8343) from the 30 October 2000 Series G tests, where the EaB test was failed by 3,000 hours, and the Series H Polimoon tests where the samples experienced practically no reduction in EaB even after 7,500 hours. 4,000 hours was, accordingly, fairly low down on the spectrum. The results for ME 8161/RM8403 in the two series also provided support for an expected lifetime of 4,000 hours.

It seems to me that based on that material Ms Fatnes was able reasonably to entertain the expectation that natural Borecene would last about 5 years. 4,000 hours in a Borealis WOM would amount to about 4 years in Northern Europe. The EaB test is a severe one and, to some extent, biased against Borecene because of the EaB test disadvantage point. A material which fails the EaB test is, as Dr Botkin accepted, likely to have a significant proportion of its mechanical properties intact. Failure of the test is, for the reasons explained in paras 67 - 71 above, not a reliable indicator of when a material will actually fail. In addition the Polimoon Cipax results were indicative of a UV 14 performance rating for RM 8402. This would amount to about 10 years on natural Borecene. The use of a 4,000 hours figure involved a substantial reduction from that figure.

In addition, as Dr Botkin accepted, the Cytec results in November 2003 on natural Borecene were evidence of performance in excess of UV 8, which represents around 6 years exposure in Northern Europe.

Kingspan submits that, in light of the testing carried out by or known to Borealis, by the end of 2001, there was no reasonable basis on which Borealis could have suggested that Borecene, even with green pigmentation, was adequately UV stabilised or otherwise suitable for use in the manufacture of oil storage tanks in Northern Europe. The representations made to that effect were false.

I do not regard that as the relevant inquiry under this part of the claim. The representation in the letter of conformity was that RM 8402, if processed in accordance with good manufacturing practice, was expected to provide 22 GJ/m² resistance. The question is whether there was a reasonable basis for that expectation when Kingspan entered into the contracts to purchase RM 8402, namely from the end of 2001 or the beginning of 2002 until autumn 2002.

Borealis submits that it had reasonable grounds for that expectation because:

I turn therefore to consider the import of the tests.

The Series A test showed that natural Borecene (both ME 8167 and 8169), when stabilised with Tinuvin 622 at a concentration of 2,500 ppm, failed the 50% EAB test after only 2,000 hours in the Borealis WOM. ME 8152 (Borealis’ ZN) failed after 3,000 hours but, since there was no reading at 2,000 hours, it is impossible to say whether it had failed at that time. At 3,000 hours in terms of the percentage of the original percentage EaB ME 8152 did better (42% instead of 21/28%), but the actual percentages were quite similar (110% vs. 95 or 90% ). Dr Botkin accepted that these results did not show a significant difference between the performance of Borecene and ZN resins. The black Borecene grades showed no reduction in EaB after 3,000 hours or 5,000 hours and did better in this respect than black ZN which had 79% of original EaB at 3,000 hours and 57% at 5,000 hours. This comparison suggested, as Dr Botkin also accepted, that there was nothing inherently wrong with Borecene.

I do not regard the comparison between ME 8152 and ME 8167 or 8169 as invalid because ME 8154 was Borealis’ ZN tank grade. ME 8152, which was in fact used by ROM before Borecene, and ME 8154 have very similar densities (934 kg/m³ compared with 940 kg/m³) and could be expected to perform similarly.

These showed the following results (for Borecene stabilised with Tinuvin 622 at a concentration of 2,500 ppm and ZN stabilised with Tinuvin 622 at 2,500 ppm) after exposure in a Borealis 0.51 W/m² WOM:

This project involved tests on six specimens (5 Borecene: ME 8168 (RM 8342) – which Dr Botkin expected would behave in a similar way to RM 8402 - and 1 ZN: ME 8152). The artificial weathering results of July 1998 from exposure in a CIBA WOM of 0.35 W/m² showed the following:

If Tinuvin 783 shows at least 52% better performance than Tinuvin 622, that would indicate that 1,300 ppm of Tinuvin 783 would equate to at least 2,000 ppm of Tinuvin 622 and 1,500 ppm to at least 2,300 ppm. Those figures are a linear extrapolation.

But it was Professor Malatesta’s opinion (based on research by Dr Gugumus in an article entitled “Light stabilisation of metallocene polyolefins” to which he referred) that the relationship between HALS concentration and UV stability is not linear: performance is proportionate to the square root of the concentration (i.e. if you double the concentration the performance is 1.41 (√2) greater). In that case 1,300 ppm would, on the basis of the Series C tests be the equivalent of at least 3,000 ppm and 1,500 ppm of at least 3,400 ppm. The mathematics which leads to that result is in Appendix 5.

I accept the validity of Professor Malatesta’s opinion.

Mr Jamtvedt’s evidence was that he was comfortable that 1,500ppm of Tinuvin 783 was an appropriate package for Borecene grades on the basis of these tests, a CIBA brochure showing Tinuvin 783 performing several times better than Tinuvin 622 (Footnote: ⁵⁷) and discussions with CIBA in which they confirmed that 1,500 ppm of Tinuvin 783 would provide equivalent performance to 2,500 ppm of Tinuvin 622 (which had been used successfully for a number of years). RM 8402 only contained 1,300ppm of Tinuvin 783, and not 1,500ppm. But, on the footing that performance is proportional to the square root of the concentration, the difference of 200 ppm would only produce a reduction of about 7-8%. This is not an amount sufficient to explain the difference in failure between RM 8402 and ZN tanks.

The Florida weathering results of December 1999 showed that the retained tensile impact strength of ME 8168, when stabilised with Tinuvin 783 at a concentration of 2,500 ppm had not fallen below 50% at 2 years of Florida exposure.

The Series D testing carried out by Borealis in its WOM showed the following:

This was a test on unidentified ZN specimens. All of them had failed the EaB tests within 10,000 hours in Cytec’s WOM (0.35 W/m²). The grade stabilised with Tinuvin 783 at a concentration of 3,000ppm had failed within 8,970 hours. This lifetime exceeded 22 GJ/m² (on Professor Malatesta’s approach). This was at a concentration of more than double that contained in the RM 8402 supplied to Borealis. At the same time the Series D tests had indicated that there was not a great deal to be gained (if anything) by increasing Tinuvin 783 from 1,415 to 2,760 ppm in the case of Borecene. The ZN stabilised with 3,000 ppm Tinuvin 622 failed at 3,760 hours i.e. in about 42% of the time.

The primary purpose of this project was to assess the effectiveness of different antioxidants. Borealis attributes significance to specimen 8, containing a 1:1 blend of Tinuvin 622 and Chimassorb 2020 in ME 8168. This retained 77% of its tensile impact strength after 10,000 hours in the CIBA WOM operated at an irradiance of 0.35W/m² at 340nm. Mr Jamtvedt regarded the 1:1 blend of Tinuvin 622 and Chimassorb 2020 (similar to 944) – Specimen 8 - to be similar to Tinuvin 783 and said that the results (which also included the sample doing well (c 65%) at 16,000 hours) therefore gave him confidence in the UV performance of Tinuvin 783 in Borecene.

These tests concerned 3 unpigmented resins - one ZN ME 8152; and two Borecenes ME 8161 (= RM 8403) and ME 8169 (RM 8343). The significance of the results seems to me as follows :

These EaB tests, showed that, after 10,000 hours of exposure in the Borealis WOM, 1 mm compression moulded samples of Borecene RM 8343, RM 8403, and ME 8167 had only experienced 30%, 17% and 25% reduction in EaB values i.e. they were not even close to failure. 10,000 hours represented about 37.5 GJ/m², on Professor Malatesta’s basis. Taken at face value the results indicate that natural Borecene could easily pass not only the 22 GJ/m² test but also the 37.6 and 34 GJ/m² tests. If, as Kingspan contended, the tests were carried out on the old 8403 package (1,500 ppm of Tinuvin 622, and not 1,300 ppm of Tinuvin 783), the results were even better.

The fact that the tests were carried out on 1mm compression moulded samples does not, as it seems to me, rob them of significance.

The OFTEC Standard requires testing to be carried out either on samples cut from the moulded tank or from compression moulded sheets moulded from pieces from the moulded tank. The OFTEC Standard, by various cross reference set out in the footnote⁵⁹ specified a preferred thickness of 4mm +/- 0.2 mm for the tensile tests

In circumstances where both standards permitted or called for compression moulded samples it is not realistic to dismiss results derived from them. The 1m prEN14431 requirement was, under pressure from rotomoulders, including Kingspan, later changed to 3 mm. The complaint was that the 1 mm sample was unduly prejudicial to the material: see para 74 above.

If comparison is to be made between 1 mm compressed and thicker rotomoulded samples, a number of considerations arise. It was Mr Jamtvedt’s evidence (a) that he had a feeling that using a thinner sample than the rotomoulded sample would have “given higher figures or long – less reduction over time”; (b) that 1mm thick compression moulded samples were normally used for plastic film; and (c) that the compression moulding process would have artificially improved the sample as compared to the tank’s post-rotomoulded (but uncompressed) state by taking out surface defects. The compression moulding process meant that the sample not only was “a better product” but also that it was “a different product” in that the process eliminates “both surface imperfections and any bubbles that there may be”.

But he also said that thicker samples would be expected to have greater, and thinner samples less, weatherability; and that testing on compression moulded samples was more reliable in that with rotomoulded samples performance can be affected by defects, particularly surface defects in the sample, rather than its UV stability. Both points seem to me valid. Further compression moulded samples will suffer heat degradation in the process of compression. Mr Thuermer of CIBA regarded the test as not good for rotomoulders for that reason.

In circumstances where the draft European and KIWA standards mandated 1mm compression moulded samples for the weathering test I do not find the critique based on the fact that such samples were used particularly persuasive, although Ms Fatnes was, herself to deploy the point later: see para 365. I note that Den Norske Veritas accepted these results.

It seems to me that Borealis was entitled to take, as they did, considerable comfort from these figures, which represented exposure over a very sizeable period of time, and produced very comparable results from the same test conditions for 3 different Borecenes, including RM 8403. As Dr Botkin agreed, taken at face value the results were inconsistent with the proposition that it was not possible to stabilise RM 8402 adequately or that it had inherently weak UV performance.

These WOM tests were carried out at an irradiance setting of 0.35W/m² on ME 8168 using 4 different formulations of stabiliser. Their purpose was to assess the UV performance of different formulations at two different processing cycle times using

The details of the results are set out in paras 288 - 292 above. The EaB results for Tinuvin 783 showed failure in the 14 minute cycle at 4,000 hours. This was not a good EaB result for Tinuvin 783. But in the tensile strength tests failure had not occurred at 10,000 hours.

In determining whether Borealis had reasonable grounds to express the opinion it expressed in the letter of conformity it is necessary to take into account a number of factors including (a) the range of the EaB results, in some of which ZN material itself fared badly; (b) the high standard variation to be expected from such results, which will differ according to the circumstances of the test, the process by which any tank has been rotomoulded, any compression moulding effected and any sample prepared, and which will on occasion produce odd features; (c) the fact that whilst natural material was being supplied, it was expected to be strengthened by an appropriate pigment and rotomoulded in accordance with good practice.

Having considered the plethora of material and the parties’ submissions as to its significance, I do not regard it as established that Borealis did not have reasonable grounds to expect that green pigmented RM 8402, rotomoulded in accordance with good manufacturing practice, would meet the 22 GJ/m² test. In my judgement it did have such grounds.

I regard the matters relied on by Borealis as set out in para 447 above as providing a reasonable basis upon which Borealis was entitled to hold the view that it expressed – that view being held up to the time at which the relevant contracts were entered into by Ms Fatnes who signed the letter of conformity and by Mr Jamtvedt.

Previous experience with ME 8152 and 8154 indicated that ZN polyethylene was capable of lasting for many years without being adversely affected by weathering. The Series B Dyno results and other material, e.g. from CIBA, made it reasonable to expect that the appropriate green pigment would increase the durability of the polymer in EaB terms by at least a factor of 2 and probably nearer 3 times. Series C results showed how much Tinuvin 783 was an improvement on Tinuvin 622. The Series D results for ME 8160 (RM 8402) indicated failure in EaB terms at above 10 GJ/m². Applying a reasonably to be expected factor to allow for pigment would take the figure to well above 20 GJ/m². The Series H Polimoon results placed the failure figure for natural material way above 20 GJ/m².

In the light of those matters I do not regard the contra indications from the results as making it unreasonable for Borealis to entertain the expectation. Series F contained tensile impact results, which Borealis and KIWA favoured, two of which (Specimens 1 and 4) with Tinuvin 622 at 2,500 ppm involved a reduction below 50% at 6,000 hours (itself about 15 GJ/m².); but with much better results for other specimens, particularly specimens 5, 7, and 8 none of which came close to 50% reduction even at

In this respect I regard the Series H Polimoon results as of some importance. It is obviously necessary not to pick the cherry from an otherwise unpalatable cake. But for the reasons set out in para 465 – 469 above, the results seem to me of particular significance. They were a firm indication of what could be achieved. An expectation could not reasonably be founded on a freak result or one that could only be achieved by extraordinary expedients. But there was no reason to regard either of those characteristics as present. That these results were obtained was an indication that good manufacturing practice could be expected to produce acceptable results; and the figures were such as to allow a generous margin of error.

The Series I tests had poor results for Borecene with 1,750 ppm Tinuvin 783 but in the tensile impact tests failure had not occurred by 10,000 hours in a CIBA 0.35 W/m² WOM, which would equate to about 22 GJ/m².

The Series J and K tests were carried out after Kingspan began to purchase Borecene and, in the case of the latter, at about the time when they were ceasing to do so. In relation to the Series J test in October 2002 the 1 mm compression moulded samples – as called for by prEN13341 had reached about 69% of initial EaB after 4,000 hours in a Borealis WOM which would suggest an expected lifetime of between 6,000 and 7,000 hours which would meet the 22 GJ/m² requirement. This was a significantly better result than a test of similar samples of green pigmented Dow NG 2432 tested by RAPRA in 2005 which experienced more than 50% reduction in EaB after 3,000 hours: see para 73 above.

The Florida Weathering tests on natural samples were in August 2003 all performing well, save for Specimen B, after 4-5 years exposure which was equivalent to 7-9 years in Northern Europe.

The Series K results in November 2003 which Mr Jamtvedt expected were carried out on 3-4 mm natural rotomoulded samples showed, in the case of Sample 1, which had a very similar stabilisation package to RM 8402 (albeit with 200 ppm less Tinuvin 783) that it had only experienced about 40% reduction in EaB after 7,250 hours in a 0.35 W/m² WOM, equivalent to UV 8, in the order of 19 GJ/m². These Cytec tests were more favourable than the previous Series I test – a difference which may reflect a different processing.

In those circumstances it is not necessary to determine whether Kingspan relied on the letter of conformity in the sense that but for that letter (or but for that letter and other things) it would not have entered into the contracts for RM 8402.

Borealis say that the relevant reliance is not established for a number of reasons:

As to (g) there is no satisfactory evidence that any tanks made from RM 8402 other than those sent by Titan which were the subject of the report of 4 June 1999 were ever sent to Athlone, or reported on by Athlone. Two factory witnesses from Tyrell at Portadown (Mr McQuillan and Mr Doran) recalled Borecene RM 8402 245 tanks being sent to Athlone; and Mr McQuillan recalled being told that they had passed the test but neither could recall when this was. An email from Mr Atterbury of Athlone of 5 February 2002 does not list Borecene made tanks as amongst those approved for Tyrell by Athlone. No testing report has been produced and it seems to me unlikely that any such report, which would be readily discoverable, was ever made. The factory witnesses from Rom and GSP had no recollection of tanks being sent to Athlone for testing. Whilst there is evidence that Tyrell and GSP sold their tanks as OFTEC approved, Mr Egan gave evidence that Rom, to the best of his knowledge did not.

Whilst I see the force of these submissions it seems to me that Borecene would not have been purchased by any of the claimants if no letter of conformity had been produced, after it had been asked for. Kingspan’s laxity in not obtaining any report other than that of 4 June 1999 and not obtaining any letter of conformity other than

Borealis makes a more general submission as follows. Mr Rusk, who made the decision to purchase Borecene and who was not a technical person, said that he did so on three bases (a) price; (b) availability and (c) the ability of Kingspan to market their tanks as being OFTEC approved. He was not, therefore, concerned with the accuracy or otherwise of the letter of conformity or anything that was said about the performance of Borecene. Moreover both Dr McDaid and Mr Gregg said that they did not communicate with Mr Rusk to tell him of the various properties of Borecene. So the information which is said to amount to a misrepresentation was given to those who did not decide to purchase, and the man who did decide could not and did not rely on information which he was not told about.

I regard this as too simple a view. PDC (in the shape of Dr McDaid and Mr Gregg) provided expert advice to the Kingspan Group. If, absent a particular representation, they would have advised against the purchase of Borecene, Kingspan, in the form of all the claimants, may properly be regarded as having relied on the representation, once given. Further the fact that Mr Rusk wished to be satisfied as to the ability of the claimants to market their tanks as being OFTEC approved itself shows that, if no letter of conformity of any kind had been provided when asked, of which he would be likely to have been informed, the purchases would probably not have gone ahead.

The basis on which Ms Fatnes made the statements as to expected lifetimes appears in the email of 18 November 2001 and its attachment. The expected lifetime for natural Borecene of 4,000 hours based on EaB is based on the Series G results which show a figure of about 3,000 hours and the Series H Polimoon results where there was no reduction in EaB even at 7,500 hours. The comparable figure based on tensile impact, which Ms Fatnes regarded as more reliable, was 6,000 hours. 5 years was, as it seems to me a reasonable, and probably a modest, estimate for the actual service lifetime in unpigmented form.

So far as the expected lifetime of green pigmented Borecene is concerned, the upshot of the Dyno tests – Series B – and the CIBA document referred to in footnote 57, gave, in my view, Ms Fatnes reasonable grounds for expecting, as she did, that green pigment would at least double the lifetime of natural polymer and probably nearer triple it; such that green pigmented Borecene could be expected to have a lifetime up to 10 years, particularly when she had made clear that her expectation was on the basis that there was less documentation available than Borealis would like; and when the data on which it was, at least in part, based, was attached for Dr McDaid, who has a Ph.D and is an M.SC, to study, as she did. Ms Fatnes was also entitled to take into account as supporting that view the fact that Kingspan’s green ZN tanks had survived for more than 10 years without incident so far as weathering was concerned.

Further these recommendations were based on EaB or tensile impact tests where failure is defined as reaching a 50% reduction from the original measurement. That is a very conservative test. Actual service life could reasonably be expected to be markedly longer.

In those circumstances it is not necessary to determine whether Borealis had the necessary intention or whether the representations about 5 and 10 year lifetimes induced the relevant contracts. I shall, however, consider these questions shortly.

Both Ms Fatnes and Dr McDaid agreed that the statements in the 18^th November email were not made with the intention of procuring Kingspan to buy Borecene (although Borealis’ overall aim was to encourage sales) but to provide information as to the testing which had been done, in response to Dr McDaid’s request in her email of 13 November for information/results on long term weathering properties of RM grades. It was KIWA which sought this information which Kingspan wanted to provide because it was looking to supply the Dutch market.

In Goose v Wilson, Sandford & Co Morritt LJ said this:

“48.

The third criticism arose from the judge's summary of the third principle he deduced from the speech of Lord Maugham in Bradford Third Equitable Benefit Building Society v Borders [1941] 2 AER 205, 211 namely that the representor should have intended that the representation "should be acted on by the plaintiff...in the manner which resulted in damage to him". It was suggested at one stage in the argument that this formulation wrongly restricted the requisite intention. We would agree if the statement was taken to require the representor to intend to induce the specific action taken by the representee in reliance on the misrepresentation. The more normal formulation is that the representor should intend to deceive the representee, with intent, that is to say, that it shall be acted upon by him. Clerk & Lindsell

17th Ed. Para 14-29……... But, in any event, there is no indication in the passage from the judgment of Rimer J that he did in applying the principle wrongly restrict it. He referred to the absence of any intention on the part of Mr Wilson to induce Mr Goose "to enter into any transaction" or "to commit himself to anything". He considered that the Stones were "simply irrelevant to any liability to which he might be prepared to subject himself". These were findings of fact open to the judge on the evidence before him.” [Bold added]

Borealis submits that the necessary intention has not been established since the 18 November email was not written or understood to have been written to induce Kingspan to enter into any transaction.

However, the email must have been intended to be acted upon by Kingspan for the purpose of conveying the information in it as to the weathering properties of Borecene to those who sought it, and also for Kingspan to take into account for themselves in relation to their own use of any Borecene, which they were about to purchase for their existing markets, and might purchase for their contemplated new one. Not without some hesitation I regard that as a sufficient intention for present purposes.

In determining whether or not A was induced by B’s representation to enter into a contract the answer is generally to be found by asking what A would (or would not) have done if no representation had been made. Arriving at an answer may be assisted by asking what A would have done if he had been told the truth (as to which “truth” see Raffeisen, paras 192 - 194).

In the present case the email of 18 November 2001 followed the request in the email of 13 November 2001. That request was not made by Mr Rusk who was making the purchasing decision. By this date arrangements for the future purchase of Borecene were well in hand and Borealis had quoted their terms. The 18 November email was not sent to Mr Rusk. It does not appear to have been discussed internally, or at least not in any way that has been recorded. Mr Gregg did not see it nor learn of its contents; nor did Mr Rusk. Dr McDaid’s evidence was that she relied on its contents. But there is no direct evidence as to what would have happened if Borealis had either said that they had no information to give, or had declined to give any information that they had, although the absence of that evidence is not conclusive.

In my judgement the email played a real and substantial part in causing Kingspan to enter into the contracts for the purchase of Borecene. It contained important information about the weatherability of Borecene, given in email as opposed to brochure form. If Borealis had said they had no information about 10-25 year weatherability, or were not prepared to give what information they had, that would probably have raised questions about the wisdom of purchasing Borecene. At this stage Kingspan was already minded to purchase Borecene. But a representation may induce even though its effect is to cause the representee to persevere in a decision already made: Barton v County Natwest [1999] Lloyd’s Rep Banking 408, paras 55-

The 18^th November email contains the sentence: “The RM8402 UV package was improved to double the lifetime of the Borecene grades vs. ME8152”. This sentence is part of the explanation as to the basis upon which the 1999 letter of conformity had been given “before a lot of data was available”.

This statement appears to have been intended to reflect the results of the Series C CIBA tests on ME 8168/RM 8342 using Tinuvin 622 and Tinuvin 783 respectively. Results from Specimens B and I from the Series are expressed on the graph attached to the email. Specimen B with 2,500 ppm Tinuvin 622 failed the tensile impact strength test at 3,250 hours. Specimen I with 2,500 ppm Tinuvin 783 had not failed by 7,000 hours i.e. more than twice as much. But specimen B appears to have had processing faults, which the compiler of the graph and Ms Fatnes may not have appreciated. A comparison between Specimen E and Specimen I, the former with 2,500 ppm Tinuvin 622, which failed at 4,600 hours and the latter with 2,500 ppm Tinuvin 783 which had not failed at 7,000 hours showed Tinuvin 783 to be at least 52% better: how much better would depend on when Specimen I actually failed. That was a comparison between different stabilisers in the same Borecene. A comparison between Specimen I and Specimen L, the ZN, showed Tinuvin 783 to be at least 45% better. Since the RM 8402 UV package was said to double Borecene lifetime by comparison with ME 8152 that was, prima facie, the appropriate comparison (although the fourth slide made clear that the comparison in it was with RM 8343).

The comparisons in the previous paragraph are all between polyethylenes with the same concentration of stabiliser. But RM 8402 was to have 1,300 ppm 783 and not 2,500 ppm. In those circumstances even if Tinuvin 783 was 50% or 100% more efficacious than Tinuvin 622, the lifetime of a polymer incorporating a lesser quantity of the stronger package would not be expected to double the strength of the whole, unless, perhaps, the efficacy of Tinuvin 783 was, somehow, spent once a given dosage was achieved. However, as an additional complication, it is probably the case that UV performance is proportional to the square root of the concentration with the result (see paragraph 454 above) that, on the Series C results (Specimens I and E) 1,300 ppm Tinuvin 783 could be expected to give equivalent performance to 3,000 ppm of Tinuvin 622. It would not however, on those results, give double the performance of 2,500 ppm Tinuvin 622. It might be doubly efficacious as a stabiliser; so that having a lesser amount of stabiliser produced the same or a somewhat better result; but that would not mean that the grade (with a lesser amount) was twice as good.

Support for the statement can, however, be derived from the Series D results. There ME 8160 with Tinuvin 783 at 1,415 ppm had not failed at 2,500 hours when the EaB was 900% (62% of original). By contrast two specimens from an earlier test with Tinuvin 622 at 2,500 ppm on ME 8167 and ME 8169 (both Borecenes) had each failed at 2,500 hours at 300% which was 29% of the original. On that footing Tinuvin 783 was at least twice as efficacious and on a smaller concentration in Borecene.

These were the tests available when the letter of conformity was given. Prima facie, the accuracy of the statement that the letter of conformity was given on the basis that the RM 8402 package was improved to double the lifetime falls to be determined as at that date. I have come to the conclusion that Borealis did not have reasonable grounds to make that statement. It was put forward on the basis of the Series C results which, once it is appreciated that Specimen B was probably defective, do not support the proposition. The Series D results do provide some support but not enough, in my judgement, to make it reasonable to make the statement. The comparison is between different tests and between stabilisers in different Borecenes.

Insofar as the effect of the misrepresentation continued it is necessary to look at the subsequent results although they are unlikely to produce support for a statement which relates to the genesis of the 1999 letter of conformity.

The Series E results, which were all on ZN material with stabilisers at 3,000 ppm showed failure at 8,970 hours in the case of the Tinuvin 783 and 3,760 hours in the case of Tinuvin 622 i.e. over twice as long. That was, of course, a higher concentration of 783 and in a ZN material but, since the concentrations were in identical amounts, the results afford a comparison of the efficacy of the stabiliser.

The Series G test results published on 30 October 2000 showed that RM8403 (then ME8161), with 1,300ppm of Tinuvin 783, performed significantly better than ME8152, with 2,500ppm of Tinuvin 622 in the EaB tests in which ME 8152 failed after 1,000 hours and ME 8161 by 3,000. The ME 8152 EaB result seems very low (11% of original at 1,000 Hours) and ME 8152 did much better than RM 8403 in the tensile impact test.

The Series H results were, as I have found, with the new stabiliser package for RM 8403 i.e. 1,300 ppm Tinuvin 783. These showed greatly improved results. But the comparison did not include a ZN.

There was, therefore, nothing in the subsequent results which, in my judgement, lent justification to the statement.

I am, however, wholly unpersuaded that Kingspan (in the person of Mr Rusk or Mr Rusk, on the advice of Dr McDaid) would not have purchased Borecene had the doubling statement, not been made or that it was a substantial cause of the purchase. Further, the import of doubling the lifetime of ME 8152 is unclear without knowing what was taken as the original lifetime and, whatever exactly it signified, and the sentence, which was part of an explanation for how the 1999 Letter of Conformity came to be signed, cannot have been understood as meaning that the expected lifetime for Borecene was other than as stated in the recommendation contained in the earlier and operative part of the email. It would not have mattered to Kingspan if the historical information had been left out.

Accordingly if the misrepresentation issue is governed by English law, Kingspan’s misrepresentation claim against the contracting party under the Misrepresentation Act is not made out. I did not understand it to be suggested that, if that was so, a claim against the contracting party in tort would fare any better. (It may be that a claim in tort would have avoided the need to show that Borealis intended, as opposed to foresaw, reliance on the content of the email of 18 November but I have found the necessary intention established). As will be apparent hereafter I have come to the conclusion that the contracting party was Borealis Denmark.

My conclusions make it unnecessary to determine whether, in English law, any claim for misrepresentation would be available against both Borealis Denmark and Borealis UK or only against the former. A single paragraph of the Reply alleges that Borealis UK assumed a duty not to make negligent misstatements of which it was in breach. It is Kingspan’s case that if, as I have found, the contracts were with Borealis Denmark, it nevertheless has a tortious claim against Borealis UK.

In order for Kingspan to have such a claim it would be necessary to establish that Borealis UK, the commercial agent, must (applying an objective test by reference to what passed between the parties) be held to have assumed a personal responsibility for the statements made and that Kingspan reasonably relied on that assumption of responsibility: Williams v Natural Life Health Foods [1998] 1 WLR 830 at 835 GH.

I am not satisfied that Borealis UK must be taken to have assumed a responsibility of its own separate from that of its principal. Borealis UK was once, but was, at the material times, no longer, the contracting party. In Gran Gelato Ltd v Richcliff Ltd [1922] Ch 560 Sir Donald Nicholls V-C, as he then was, held that:

“in general, in a case where the principal himself owes a duty of care to the third party, the existence of a further duty of care owed by the agent to the third party is not necessary for the reasonable protection of the latter. Good reason, therefore, should exist before the law imposes a duty when the agent already owes to his principal a duty which covers the same ground and the principal is responsible to the third party for his agent’s shortcomings. I do not think there is good reason for such a duty in normal conveyancing transactions”.

I do not regard this as a case where there is good reason to impose such a duty. The general rule, as expounded in Bowstead (19^th Ed.) at 9 -116 and in Gran Gelato is that liability for negligent statements made on behalf of a disclosed principal rests on the principal and not the agent. There is nothing special about the position of Borealis UK as a commercial agent in the present case to give rise to a duty. The agent has no liability under the contract and it would be anomalous if that which could not be achieved in contract could, nevertheless, be achieved in tort. I do not regard it as a sufficient reason for imposing the duty that any claim against Borealis Denmark is subject to contractual limitations. If anything the fact that the imposition of a tortious duty would circumvent the limitations is a reason not to impose one.

That Borealis UK was the commercial agent of Borealis Denmark was apparent from the communications between the parties and the invoices. I do not regard anything said or done by Mr Wood as conveying that Borealis UK was assuming a personal responsibility as well as its principal or that Kingspan could reasonably so understand. Nor is it apparent that Kingspan reasonably relied on any such assumption.

If Borealis UK had been under a duty in tort it would have been necessary to examine whether it was negligent since, if Borealis Denmark was negligent, it does not inevitably follow that Borealis UK was as well. I do not propose to address this question.

The claimants began buying Borecene in September 2001 (an order for 24,750 Kg) and from January 2002 onwards bought in large quantities. Prior to then they had regularly (several loads a month) bought ZN grades of polymer in significant quantities (e.g. 24 tonne loads) mainly for the Glenamaddy site and for Tyrell. They received invoices for Borecene which contained terms and conditions. They purchased RM 8402 from January to November 2002 and then RM 7402 from the end of 2002 to September 2003: the details are at appendix 4 to Borealis’ opening.

According to Borealis sales of its products were made in this way. Prior to 1 January 1999 sales were made by the local sales company on its standard terms: see para 522 below. That company would itself purchase the material from the Borealis company which produced it. Thus in the UK buyers would purchase material from Borealis UK which would purchase from Borealis Norway or Borealis Sweden. It is common ground that until 1999 the claimants contracted with Borealis UK. The invoices contained Borealis UK’s terms and conditions on the reverse.

During 1999 and 2000 sales were made on Borealis’ terms (as a result of letters sent out in November 1998: see paras 523 – 526 below), which were the same for different countries, by the relevant production unit – Borealis Norway or Borealis Sweden - direct to customers. But the invoices were factored to Borealis Coordination Centre N.V (a Belgian company – hereafter “Borealis Belgium”). The effect of this was that the customer became the importer of the goods and had a significant administrative burden dealing with VAT reporting.

Kingspan does not accept that, so far as they were concerned, there was any change.

Then from January 2001 sales were made by Borealis A/S i.e. Borealis Denmark on the uniform terms.

Borealis UK terms applicable prior to 1999 provided so far as relevant as follows:

“13 WARRANTY AND EXCLUSION

In November 1998 Borealis sent to its customers a package of at least four letters. The first letter (Footnote: ⁵⁸) provided as follows:

“Dear Business Partner

Re: Shared Service Centre & Direct Invoicing

Continuously striving to be a top performer in our processes to serve customers in the most original way, Borealis has decided to establish a Shared Service Centre (SSC) for managing the transaction processing of a major part of our financial administration. The new concept will go into effect on January 1 1999.

The SSC will be located in Woluwe, Belgium under the legal umbrella of the existing Borealis Coordination Center (BCC).

We are convinced that by centralising financial tasks, Borealis’ personnel will be able to focus even more on core activities like production, logistics and sales and thus respond faster to your needs.

For the same reasons Borealis has decided to optimise its current invoicing process. This means that there will be a change from the re-invoicing principle through the local sales company to direct invoicing by the delivering production unit. Settlements, however, will be done via the local BCC account as described in the attachment. As before, all the specific payment instructions will continue to be featured on our invoices.

……..

Because of the integration of PCD⁶¹ and the direct invoicing from our production units in different countries, we recognise the need for harmonising our General Terms and Conditions of Sale. You will find the revised document attached. Irrespective of the source of delivery, you will deal with a commercial partner who applies unified conditions with respect to commercial, insurance and legal matters. We are confident that you will find the harmonised terms to be even more customer oriented and simplified.

If you have any questions or require further information, please do not hesitate to contact (name and contact information of your local credit controller (Footnote: ⁵⁹)). Thank you” [Bold added]

The second letter informed customers that from 1 January 1999 onwards Borealis’ sales invoices would be factored to Borealis Belgium “which will be the sole legal beneficiary of all collections”. This letter (i) asked customers to follow the payment instructions on the sales invoices and to quote invoice numbers as reference in all payments; (ii) indicated that the aim was to introduce direct debits as an alternative method; and (iii) invited customers to direct all payment related inquiries to Borealis Belgium.

The third letter related to the introduction of the Euro and informed customers that they could do business either in Euros or national currency. The fourth letter related to Year 2000. There was also attached (a) a form of acknowledgement of receipt and (b) Borealis’ General Terms and Conditions.

Kingspan denies that it ever received these documents. No acknowledgement of receipt has been produced.

On 11 December Borealis UK sent Mr Rusk of Plashapes (as Titan was then called) a letter which was received on 14 December 1998 and which was seen by Mr Rusk. The letter, although appearing to be responsive to a communication from Kingspan, was in fact in standard form and was sent to many customers. It included the following:

“Dear Fred

Re: Shared Service Centre

Our recent mailing on the euro into our business practices (sic), the Year 2000 challenge and the establishment of a Shared Service Centre (SSC), have raised, especially for the latter, some concerns and remarks from your side.

With the creation of a SSC, it is definitely not our aim to transfer costs, currently paid by Borealis, to you. Our customer service is always our first priority and we would therefore like to clarify the points of concern raised.

*Central invoicing: Your local Borealis Sales Office will print and dispatch the invoices in the name of the supplying Borealis plant and continue to offer assistance on any issues relating to payments. Invoicing from different sites instead of invoicing through one local sales company necessitates your maintaining different supplier files. The creation of one bank account reference for all the Borealis sites, will, however, soften the additional administrative effort. The planned second stage of the project will enable central invoicing, independent of local Sales Offices, thereby reducing the temporary complexity introduced by the first phase, and establishing one invoicing and collecting entity.

…..

We hope that this letter answers your questions and concerns, if you require any additional information, please do not hesitate to contact us.” [Bold added]

During 1999 and 2000 the invoices were, I assume, in the form described in paras 533 - 536 below, save that (i) the invoicer was Borealis Norway or Sweden, and (ii) the second page was different and provided for payment to Borealis Belgium (Footnote: ⁶⁰). The Borealis General Terms and Conditions were printed on the reverse of the invoice. I say that by way of assumption because that is what is apparent from the Balmoral judgment. There do not, however, appear to be any invoices from this period in the trial bundles. (There may, also, have been a short period during which, because of a software error, the words “Sales Office” appeared instead of Commercial Agent in respect of Balmoral UK: see para 100 of the Balmoral judgment).

Orders were sent to Borealis UK in Cheshire; but Kingspan must have made payment to Borealis Belgium.

On 3^rd November 2000 Mr Wood of Borealis UK sent to Mr Rusk of Kingspan a letter on Borealis UK notepaper, which Mr Rusk received. This included the following: “Borealis is committed to continuously improving Borealis’ customer service. This is why we are establishing a single invoicing entity. Effective January 1 2001, all material delivered by Borealis, irrespective of production site, will be invoiced from Borealis A/S, the Danish parent company.

An attached document informed Kingspan that

“Effective January 1 2001, all deliveries of Borealis products, irrespective of the production site, will be invoiced to you by our group Danish sales company:

Borealis A/S (address in Denmark given).

For sales made on DDP (Footnote: ⁶¹) terms Borealis A/S will be the importer of the goods in the country of sale and will be responsible for intrust reporting where applicable. As a consequence invoicing will include local VAT in all EU countries except Greece, Luxembourg and Ireland.

Credit management and the collection process will remain administratively within the Borealis Group’s financial Coordination Center in Belgium. Customer payments should be executed for credit of Borealis A/S directly to one of the following accounts [3 different accounts with ABN AMRO were specified according to the currency of payment]” [Bold added]

So far as Borealis was concerned, the seller from January 2001 onwards was Borealis Denmark. The 1999 - 2000 arrangement whereby the producing company’s receivables were factored to Borealis Belgium ceased. Borealis Denmark purchased the product from the producing companies. The new arrangements are described in internal Borealis documentation regarding the “Singles Sales Company (SSAC) Project”, which confirmed that Borealis Denmark would take ownership of Borecene from the selling site in “one theoretical second before the material reached the customers. This means that Borealis is the importer. The SSAC will have VAT registration numbers in all European countries. Sales will generally be with local VAT”.

The goods were all invoiced by Borealis to the relevant purchaser. Each invoice had three pages. The first page was headed “BOREALIS”. It contained in a box, inter alia, the invoice number and date and the customer number. It also contained the VAT numbers of the customer and Borealis. The number entered for the latter was the VAT number of Borealis Denmark. The terms of delivery were “DDP” the relevant Kingspan unit. The country of origin was described as Norway and the place of dispatch was, in the majority of cases, specified as Great Britain. Beneath the total invoice figure to the left of the invoice appeared the following:

“Borealis A/S

C/o Borealis UK

Borealis House

Water Lane Wilmslow

SK9 5AR Cheshire

United Kingdom

VAT no GB732914044

This document is solely payable to Borealis A/S … [address given] …via Bank transfer to the account 40092550 at ABN AMRO (London)... for beneficiary Borealis A/S

All sales are exclusively covered by Borealis General Terms and Conditions of Sale as printed on the last page.

Please contact your local Borealis representative if you have any questions regarding this oc/invoice”

Beneath those words were, on the left hand side, the words “INVOICED BY” underneath which were Borealis A/S’ name and address in Denmark together with its telephone, telex, fax and registration (both company and VAT) numbers. On the right hand side were the words “Commercial Agent” underneath which were Borealis UK’s name and address, company registration number and telephone and fax details.

The second page provided that cheques were to be sent to Borealis c/o ABN Amro at an address in London. Remittance advices were to be sent to Borealis Belgium.

The last page contained the General Terms and Conditions of Sale. These included the following:

“These General Terms and Conditions of Sale (in the following “General Terms”) together with the order confirmation shall in so far no (sic) other agreement regulating the issue has been concluded in writing apply to all products (in the following “Products”) sold by the Borealis entity given in the front page (in the following “Borealis”) to its customers (in the following “the Purchaser”).

….

5.

Product Liability

Borealis shall only be liable for damage due to product liability according to mandatory rules of applicable law and thus the liability of Borealis shall be restricted in all respects as much as possible under such law.

6.

Limitation of Liability

6.1.

Borealis does not assume any responsibility for Products being suitable for any particular purpose unless Borealis in writing has approved such suitability.

…..

6.3.

Borealis’ accumulated liability, excluding product liability which is subject to clause 5.1 above, for whatever reason including but not limited to delays, defect and shortfall shall at the option of Borealis be limited to either an exchange of the defective Products for nondefective Products or a refund of the invoiced value of the said Products.

8.

Applicable Law and Venue

These General Terms shall be governed by the law of the country where Borealis is domiciled without recourse to the conflict of laws principles of such jurisdiction, and the parties shall accept the relevant commercial court as venue.”

Negotiations between the parties over the price payable by Kingspan for Borecene took place between Mr Fred Rusk of Kingspan and Mr Wood, Borealis’ Rotomoulding Sales Manager. The terms on which it was proposed that Borecene would be sold to the Claimants were set out in Mr Wood’s letter to Mr Rusk dated 12^th October 2001: see para 293 above. That letter gave no indication that the prices he was quoting were subject to Kingspan’s acceptance of Borealis’ terms and conditions. Nor did it give any indication that any contracts for the purchase of Borecene would be subject to Danish law.

After the initial supply of RM 8402, Mr Rusk and Mr Wood had a number of meetings at which revised prices for RM 8402, and later RM 7402, were agreed, together with the volumes to be supplied. Borealis does not suggest that Mr Wood ever said that the prices he quoted were subject to purchase contracts which were subject to Borealis’ terms and conditions. Once Mr Rusk and Mr Wood had agreed a price for Borecene, each of the 4 individual sites raised purchase orders. Those purchase orders were sent to Borealis UK’s offices in Wilmslow, Cheshire. They referred to Borealis UK as the supplier. Delivery Notes gave the Sales Office as Borealis UK in Cheshire.

It is not disputed that Kingspan received, looked at and paid the numerous invoices.

On 26 April 2002 Mr Wood wrote to Mr Rusk, from Borealis UK’s offices on Borealis UK paper, to inform him “as a matter of courtesy” about some changes that were underway within Borealis. He confirmed that he would continue to be the sales manager and primary contact within Borealis. The letter enclosed a contact list, on which each of the individuals listed was located in England and contactable through the Borealis UK office. The letter made no reference to Borealis UK being the selling agent for Borealis A/S. Kingspan rely on this as being, they say, completely contrary to any suggestion that Kingspan’s contractual relationship, at that point, was not with Borealis UK but with Borealis Denmark.

Kingspan contends: