Once the claimant demonstrated that a gas pipeline failed only where one or both of the pipes made by the defendant was non-compliant and at no other welded joint, the defendant bore the burden of proving that a pipeline made of compliant pipe would have failed in any event and failed to discharge that burden.Appeal by the defendant from a judgment of Cresswell J deciding the issue of causation and thus liability in favour of the claimant, ('BHP'). BHP was the operator of an oil and gas field in the Irish Sea. The defendant, ('Dalmine') an Italian steel maker, manufactured steel pipes used in the construction of a sub-sea gas pipeline. The pipeline suffered sulphide stress corrosion cracking ('SSCC'). The cracks initiated in the weld root between sections of pipe and then propagated through the weld metal and the adjacent pipe. BHP found that the pipes adjacent to the leak sites were out of specification because their carbon equivalent value ('CEV') exceeded 0.40 per cent, making the steel less resistant to crack propagation. In proceedings against Dalmine, BHP discovered that Dalmine had fraudulently misrepresented the CEV of the pipes during the manufacturing and supply process. Dalmine accepted responsibility for that fraud and that BHP had relied on the false documents. Cresswell J tried the issue of whether the incorporation of non-compliant pipe caused the pipeline to fail or whether it would have failed anyway. BHP accepted that it bore the burden of proving that the incorporation of non-compliant pipe caused the pipeline to fail, but submitted that Dalmine bore the burden of proving that the pipeline would have failed in any event. The judge did not have to determine the burden of proof issue because he found that on the balance of probabilities the incorporation of non-compliant pipe did cause the pipeline to fail and that the pipeline would not have failed anyway. Since BHP had succeeded on both parts of the causation issue, the judge entered judgment for BHP in deceit, with damages to be assessed. Dalmine appealed on the burden of proof issue, accepting that if it bore the burden of proving that a pipeline made of compliant pipe would have failed in any event, it would not have been able to discharge that burden.HELD: The burden of proof was generally on the party which affirmed, rather than denied, a particular thing and was therefore to be deduced from the pleadings (Joseph Constantine Steamship Line Ltd v Imperial Smelting Corp Ltd (1942) AC 154). In this case, BHP claimed that the incorporation of non-compliant pipes caused the pipeline to fail and Dalmine's defence was that the cracks would have propagated irrespective of whether the adjacent pipes were within the CEV specification. Causation was also a matter of common sense (Allied Maples Group Ltd v Simmons & Simmons (1995) 1 WLR 1602) and the plain facts were that the pipeline had not failed at any point other than where the pipe on one or both sides of the weld had been non-compliant. If the pipeline had failed at a welded joint adjacent to a pair of compliant pipes, BHP might well have borne the burden of showing that the cause of the pipeline's failure was non-compliant pipe rather than the welding procedure and/or SSCC, for both of which Dalmine was not responsible. Once BHP had shown that the pipeline failed only where one or both of the pipes was non-compliant and at no other welded joint, if Dalmine wished to show that a pipeline made of compliant pipe would have failed in any event, it bore the burden of proving that on the balance of probabilities (Carole Gay Ogilvy Chester v Fari Afshar (2002) 3 WLR 1195 considered). The burden of proving Dalmine's negative hypothetical case did not rest on BHP. The argument that the burden of proving that but for the incorporation of non-compliant pipes the pipeline would not have failed in any event rested on BHP was rejected. The purpose of the "but for" test was to exclude from consideration irrelevant causes.Appeal dismissed.

[2003] EWCA Civ 170

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