B.P. EXPLORATION OPERATING Company Ltd Pursuers (Appellants) against CHEVRON TRANSPORT (SCOTLAND) Defenders (Respondents)

JurisdictionUK Non-devolved
JudgeLORD SLYNN OF HADLEY,LORD HOPE OF CRAIGHEAD,LORD CLYDE,LORD HOBHOUSE OF WOODBOROUGH,LORD MILLETT
Judgment Date18 October 2001
Neutral Citation[2001] UKHL 50
Docket NumberNo 2
CourtHouse of Lords
Date18 October 2001

[2001] UKHL 50

HOUSE OF LORDS

Lord Slynn of Hadley

Lord Hope of Craighead

Lord Clyde

Lord Hobhouse of Wood-borough

Lord Millett

Bp Exploration Operating Co Ltd
(Appellants)
and
Chevron Transport (Scotland)
(Respondents)
LORD SLYNN OF HADLEY

My Lords,

1

I have had the advantage of reading in draft the opinions of my noble and learned friends Lord Hope of Craighead and Lord Hobhouse of Woodborough.

2

As to the point of general importance raised on section 74 of the Harbours, Docks and Piers Clauses Act 1847 it is apparent that the "owner" of a vessel in different statutory contexts can, as the authorities cited to your Lordships show, sometimes include or mean a demise charterer. It seemed to me however clear on the submissions of Mr Campbell QC (and the speech of my noble and learned friend Lord Hobhouse of Woodborough makes it abundantly clear) that in section 74 of that Act "owner" has its natural meaning of the registered owner. Any other construction defeats the purpose of seeking to provide a clear-cut method of recovery without proof of negligence on the part of the owner whilst maintaining a claim in negligence against the master or person having charge of the vessel which does damage to the harbour or docks. On this point I accordingly differ from the opinion of the Inner House and I would allow the appeal on this point in the action against Tankers.

3

As to the other points raised on this appeal I am in full agreement with the opinion of Lord Hope of Craighead and I would make the orders which he proposes for the reasons which he has given.

LORD HOPE OF CRAIGHEAD

My Lords,

4

On 28 February 1990 the vessel Chevron North America berthed at the Sullom Voe terminal in Shetland for the purpose of loading crude oil from the terminal into her cargo tanks. The terminal is owned and operated by BP Exploration Operating Co Ltd ("BP"), who are the appellants in these appeals. BP aver that the following day the average wind speed increased to about 40 knots with gusts up to 62 knots as the weather conditions deteriorated, and that the four loading arms on the jetty to which the vessel was attached sustained irreparable damage when the vessel's mooring winches rendered and she moved off the berth. They say that each of the loading arms required to be replaced at a total cost for parts of about £1m and that the removal of the existing loading arms and the installation of the new ones cost about £1.5m. They also say that they incurred interest and finance charges, loss of management time and associated expenditure for the period during which the jetty was out of operation amounting to about £0.5m. Following upon this incident BP raised the three separate actions of damages which are now before your Lordships' House in these appeals.

5

On 21 February 1995 BP raised their first action against Chevron Shipping Co ("Shipping"), a corporation formed under the laws of California. Shipping are designed in the instance of the summons as the owners of the vessel Chevron North America. In article 1 of the condescendence it is averred that Shipping are the owners, managers and operators of the vessel, that the master was employed by them and that he was acting for them and on their behalf at the time of the incident. These averments were at first admitted by Shipping in their defences, but on 12 June 1995 they withdrew these admissions. BP say that their solicitors were then told by the shipping's solicitors that the vessel was owned by Chevron Tankers (Bermuda) Ltd ("Tankers"), a company incorporated under the laws of Bermuda. In response to this change of position BP introduced averments into this action to the effect that Shipping are personally barred from asserting that they are not the owners of the vessel and do not bear responsibility for its on-board equipment and its operations and crew.

6

On 16 June 1995 BP raised their second action against Tankers. They aver that Tankers are, or any rate at the time of the incident were, the owners of the vessel, that the master was employed by them and that he was acting for and on their behalf at that time. On 18 August 1995 Tankers lodged defences to this action in which they admit that they are the owners of the vessel. But they aver that at the time of the incident she was the subject of a bareboat charterparty in terms of which the charterers were Chevron Transport Corporation ("Transport"), a company incorporated under the laws of Liberia. They also claim that any obligation on their part to make reparation to BP has prescribed in terms of section 6 of the Prescription and Limitation (Scotland) Act 1973 as the action was raised against them after the expiration of the prescriptive period of five years.

7

On 28 September 1995 BP raised their third action against Transport. They aver that Transport were at all material times the bareboat charterers of the vessel, that the master was employed by them and that he was acting for them and on their behalf at the time of the incident. In their defences to this action Transport admit that they were the bareboat charterers of the vessel, that the master was employed by them and that he was acting on their behalf. But they too claim that any obligation on their part to make reparation to BP has prescribed in terms of section 6 of the 1973 Act as the action was raised against them after the expiration of the prescriptive period.

8

Each of these three actions contains three separate grounds of fault, and each of them contains three separate grounds on which BP claim that they have a title to sue for the loss and damage. BP's first case of fault is that the accident was caused by the defenders' breach of their contract with them as the operators of the terminal. Their second case of fault is that it was caused by the defenders' negligence and that of the master for whose actions they were responsible. They aver that they have a title to sue both for breach of contract and on the ground of negligence in their capacity as the operators of the terminal, and that all the other participants in the terminal have assigned their rights to them in respect of the loss and damage. BP also aver that the jetty to which the loading arms were attached was constructed on land owned by the Crown Estates Commissioners and leased to Shetland Islands Council by whom their respective rights of action, if any, to sue for the loss and damage caused to their property have been assigned to them. BP's third case of fault is that the loading arms formed part of the property of Shetland Islands Council as the harbour authority, that the defenders are liable under section 74 of the Harbours, Docks, and Piers Clauses Act 1847 (10 & 11 Vict c 27) and that the harbour authority's right to payment under this provision has also been assigned to them.

9

In the courts below all three defenders were represented by the same counsel. Although the actions have not been formally conjoined, it was envisaged that in the event of a proof being allowed in more than one action they would be heard together. But the defenders submitted to the Lord Ordinary that Tankers and Transport should be assoilzied from the claims made against them on the ground that any rights against them had prescribed. They submitted that BP's averments of personal bar against Shipping were irrelevant and that, as this was the only basis upon which Shipping were said to be liable as owners of the vessel, the action against Shipping should be dismissed. They also submitted that BP's averments in support of their claims in each action that the defenders were liable for breach of contract and in negligence were irrelevant. With regard to the claims made in each action based on section 74 of the 1847 Act, they submitted that the averments in support of the cases against Shipping and Tankers on this ground too were irrelevant as the vessel was subject to a demise charter to Transport at the time of the incident.

10

The Lord Ordinary (Dawson) 2000 SLT 201 allowed a proof before answer in all three actions. After hearing reclaiming motions for the defenders in each action the First Division (the Lord President (Rodger) and Lords Sutherland and Cowie) 2000 SLT 1374 recalled the Lord Ordinary's interlocutors. The Lord President, who delivered the opinion of the court, dealt with the issues which were argued in the Inner House in the following order: (1) the plea relating to prescription in the action against Transport; (2) the plea relating to prescription in the action against Tankers; (3) the plea of personal bar in the action against Shipping; (4) the averments about the employment of the master in the actions against Shipping and Tankers; (5) the averments as to breach of contract and delict in the actions against Shipping and Tankers; and (6) the statutory case made against Shipping and Tankers under section 74 of the 1847 Act. The court sustained the plea of prescription in the action against Transport and dismissed that action. It also held that the statutory case made under section 74 of the 1847 Act in the actions against Shipping and Tankers was irrelevant, and the averments in support of it were excluded from probation. All the other issues raised in regard to these two actions were allowed to go to proof before answer.

The issues

11

In the appeals to this House the following issues have been raised: (1) whether a proof before answer should have been allowed of BP's averments in answer to the plea of prescription in the action against Transport; (2) whether, where a vessel is hired out under a bareboat demise charterparty, section 74 of the 1847 Act imposes liability on the registered owner of the vessel or on the charterer; (3) whether, in the action against Shipping, BP's averments of personal bar are nonetheless sufficient to allow them a proof before...

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