Colour Quest Ltd v Total Downstream UK Plc [QBD (Comm)]

JurisdictionEngland & Wales
CourtQueen's Bench Division (Commercial Court)
JudgeMr Justice David Steel:,MR JUSTICE DAVID STEEL
Judgment Date20 March 2009
Neutral Citation[2009] EWHC 540 (Comm)
Docket NumberCase No: 2007 FOLIO NO 1057
Date20 March 2009

[2009] EWHC 540 (Comm)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

COMMERCIAL COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Mr Justice David Steel

Case No: 2007 FOLIO NO 1057

Between:
Colour Quest Limited and Others
Claimants
and
(1) Total Downstream UK Plc
(2) Total UK Limited
(3) Hertfordshire Oil Storage Limited
Defendants
and
(1) Total Downstream UK Plc
(2) Total UK Limited
Part 20 Claimants
and
Chevron Limited
1st Part 20 Defendant/Third Party
and
Total Milford Haven Refinery Limited
Fourth Party
and
Hertfordshire Oil Storage Limited
2nd Part 20 Defendant

Jonathan Gaisman Q.C. & David Turner & Siobán Healy (instructed by Kennedys) for the Colour Quest Claimants

Lexa Hilliard (instructed by Collins Solicitors) for the Douglas Jessop Claimants

Justin Fenwick Q.C. & Paul Sutherland (instructed by Pinsent Masons LLP) for West London Pipeline and Storage Ltd and United Kingdom Oil Pipelines Ltd

Vernon Flynn Q.C. (instructed by Linklaters LLP) for BP Oil UK Limited

Laurence Rabinowitz Q.C. & Richard Handyside (instructed by Simmons & Simmons) for Shell UK Limited

Lord Grabiner Q.C. & Andrew Bartlett Q.C. & Julian Field & Alan MacLean & Alexander Antelme & Simon Birt (instructed by Davies Arnold Cooper) for the First and Second Defendants

Philip Edey (instructed by Edwards Angell Palmer & Dodge UK LLP) for Hertfordshire Oil Storage Limited

Jonathan Sumption Q.C. & Andrew Popplewell Q.C. & Michael Bools (instructed by Herbert Smith LLP) for Chevron Limited

Gordon Pollock Q.C. & Claire Blanchard (instructed by Halliwells LLP) for TAV Engineering Limited

Hearing dates: 1 October – 16 December 2008

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

MR JUSTICE DAVID STEEL

Index

Paragraphs

Introduction

1 —28

Contractual Summary

29 —58

Evidence

59—68

Documentary History of the JVA

69 —204

Vicarious Liability

The law

205 —220

The agreements

221 —249

The facts

250 —303

Conclusion

304 —329

Total Off-site negligence

330 —365

Indemnities

366 —393

Wilful Misconduct

394

Consent

395 —406

Nuisance

407

Private

408 -421

Public

422 -464

Shell claim

465 —517

WLPS / UKOP

518 —523

Postscript

524

Appendix 1 —Map of the Buncefield site

Appendix 2 —List of actions

Mr Justice David Steel

Introduction

1

At about 0600 on Sunday 11 December 2005, a number of explosions occurred at the Buncefield Oil Storage Depot at Hemel Hempstead, Hertfordshire. At least one of the initial explosions was of massive proportions. Indeed it is thought to have been the largest peacetime explosion in Europe ever to have occurred. It measured 2.4 on the Richter scale and could be heard 200 km away.

2

The cause of the explosion was the ignition of an enormous vapour cloud that had developed from the spillage of some 300 tons of petrol from a storage tank. There ensued a large fire which engulfed a further 20 fuel storage tanks. The fire burned for a considerable period emitting large volumes of black smoke which remained visible over Southern England for several days. Some 2000 people were evacuated from their homes and the nearby M1 motorway was closed. Mercifully the timing of the explosion (and the day of the week) meant that only 43 people were injured in the incident, none of them seriously. There were no fatalities.

3

Apart from damage to a large proportion of the Buncefield site, significant damage was also caused to both commercial and residential properties outside the perimeter of the depot. In particular there was a substantial impact on the adjacent industrial estate. This was home to over 600 businesses employing about 16,500 people. All these businesses suffered disruption. The premises of 20 businesses employing 600 people were destroyed and the premises of another 60 businesses employing 3800 people were heavily damaged and unusable. The incident also damaged a great amount of housing throughout the St. Albans district. The claims are said to total in excess of £750 million. Little imagination is required to envisage the likely outcome if the explosion had occurred on the Monday morning with people at or on their way to work. 1

4

The Buncefield depot was a large and strategically important fuel storage site or tank farm used by a number of oil companies. There was a throughput of 2.5 million tonnes per year. The depot received petrol, aviation fuel, diesel and other fuels by pipeline. These fuels were stored in tanks and distributed by pipeline or road tanker to London and South East England. It was handling a large proportion of the total supply to consumers in the South East. In addition the terminal acted as the main pipeline transit point meeting much of Heathrow's and Gatwick's demand for aviation fuel. On the day of the explosion, the site contained over 35 million litres of petrol, diesel and aviation fuel.

5

The depot contained various sites including (see attached plan at Appendix 1):

a) Hertfordshire Oil Storage Ltd (“HOSL”) site.

It was in two sections, East and West, and formed the basis of a joint venture between Total and Chevron. HOSL West comprised 16 tanks and HOSL East had 10 tanks (although notably 3 were reserved for Total's exclusive use for

the storage of aviation fuel). All the tanks were operated from a control room located in an administrative building on the HOSL West site. The control room was equipped with a Motherwell automated control and tank gauging system for the operation of Fina-Line and the HOSL storage and road loading facilities. HOSL West was the centre of the fire and explosion.

b) United Kingdom Oil Pipelines Ltd (“UKOP”) and West London Pipeline and Storage Ltd (“WLPS”) site: these were sometimes referred to as the BPA sites, BPA being the company engaged by WLPS and UKOP to operate the site.

This was also split in two, a North or Cherry Tree Farm Section and a main section all lying between the HOSL West and HOSL East site. There were 6 storage tanks and other facilities operated for the WLPS/UKOP shareholders. The whole site was heavily damaged in the incident.

c) BP Oil Ltd site.

This facility was on the south side of the depot and escaped major damage.

d) Ex-Shell UK site

This was on the south-west side of the depot. The tanks and office buildings formerly used by Shell had been closed down. In part it was used as a tanker park for Shell drivers picking up fuel under an exchange agreement with Chevron. In addition a large warehouse (the “Blackstone” warehouse) had been constructed on the site. This was heavily damaged.

6

The fuels arrived at the site through a system of three pipelines:

a) The Fina-line, a 10 inch diameter pipeline from the Lindsey Oil refinery on Humberside which terminated within the HOSL West site. Although it was not an asset of the Total/Chevron joint venture, it was operated, including the control of flow rates, from the same control room as the HOSL tanks.

b) The UKOP North pipeline, a 10 inch diameter pipeline running from Shell's Stanlow refinery on Merseyside. Having passed a pumping station at Kingsbury it terminated at the UKOP/BPA Cherry Tree Farm or North site. It could feed tanks in both the HOSL East and West sites as directed from the HOSL control room. However the flow rates were set at Kingsbury.

c) The UKOP South pipeline, a 14 inch diameter pipeline from Shell Haven and BP Coryton Refinery via Kingsbury with a spur terminating in the BPA Main site. Flow rates were also set at Kingsbury.

7

Motor fuel departed from the site by road tankers from dedicated loading facilities or “racks” at HOSL West, BP and BPA. However in the case of aviation jet fuel it left by road from a loading gantry or via two pipelines from the UKOP/BPA sites into the West London Pipeline System owned by WLPS and operated by BPA.

8

In the lead up to the explosion, the site was importing unleaded petrol through the Fina-line and the UKOP South pipeline and diesel through the UKOP North pipeline. At the same time, unleaded petrol was being exported by road tankers filled at the gantry on the HOSL West site.

9

The HOSL control room was continuously manned by one or more pipeline and terminal supervisors on two watches: 0700 to 1900 and 1900 to 0700.

10

At the time of the explosions the weather was calm, cold, and humid. There was a very light westerly wind, the temperature was about 0° centigrade and the relative humidity was 99%.

11

The sequence of events was in summary as follows:

a) On 10 December 2005 at 0630, tank 915 in bund A at HOSL West started to receive part of a consignment of 10,500 m 3 of unleaded motor fuel (PU50) from the Fina-line which had earlier been filling Tank 901. This change was prompted by the low level alarm sounding on Tank 915 which was supplying fuel to the loading racks. The net rate of inflow allowing for the continuing outflow was about 140 m 3 /hr. At this rate the available ullage would have been sufficient until well into daytime on 11 December.

b) The supervisors on duty in the control room were Mr Graham Nash as Pipeline Supervisor and Mr Mark Forde as Terminal Supervisor. At 0700 these two supervisors were replaced by Mr Philip Doran. In addition Mr Terry Fitt came on duty 2.

c) Shortly before the next change of watch, at about 1845, those in the control room arranged for Tank 912 in bund A to start to receive a consignment of 8,400m 3 unleaded motor fuel from the UKOP South pipeline at a pumping rate of about 500m 3 per hour set by Kingsbury. The pumping schedule contemplated that this delivery would run throughout the watch until about 0815 on 11 December.

d) Immediately prior to the commencement of delivery of this...

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