Gavin Slessor V. Vetco Gray Uk Limited &c
| Jurisdiction | Scotland |
| Judge | Lord Glennie |
| Neutral Citation | [2006] CSOH 104 |
| Court | Court of Session |
| Published date | 07 July 2006 |
| Date | 07 July 2006 |
| Year | 2006 |
| OUTER HOUSE, COURT OF SESSION [2006] CSOH 104 | |
| OPINION OF LORD GLENNIE in the cause GAVIN SLESSOR Pursuer; against VETCO GRAY UK LIMITED &C Defenders: ________________ |
Pursuer: No Appearance; Anderson Strathern, WS
Defenders: R. Smith, QC, Gardner; Simpson & Marwick, WS
Third Party: Armstrong, QC; HBM Sayers
7 July 2006
Introduction
[1] This is a preliminary proof on the construction of an indemnity clause in a contract between the defender and the third party.
[2] The issue arises in the following circumstances. The defenders have been sued in this action by the pursuer, who was employed by them as a mechanical fitter. He claims that he was working at the defenders' premises in Aberdeen, assisting with lifting a control module by crane. The control module weighed about 1.7 tonnes. The pursuer avers that he was guiding the control module into a hole in a structure known as a Christmas Tree. To do this he had to stand on the Christmas Tree next to the hole. He avers that the defenders were using lifting adaptors of the wrong size. As a result, he says, the control module was not properly secured to the crane, so that it fell from the crane and struck him, causing him serious injury. In their Answers, the defenders aver that the control module and lifting adaptor were supplied to them by the third party and that the third party was responsible for the installation of the control module. They criticise the third party's field service engineer for not checking that the lift adaptor was the correct size and for not supervising the lifting operation. They say that if the accident occurred because the wrong lifting adaptor was used to lift the control module, then the accident was caused by the fault and negligence of the third party and/or their breach of statutory duty. It was also caused, they say, by the fault and negligence of the third party's field service engineer. They claim, in consequence that they are not liable to the pursuer, alternatively that they are entitled to damages from the third party in the full amount of any such liability and/or are entitled to a contribution from the third party in terms of section 3 of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1940.
[3] In answer to the defenders' claim against them, the third party relies upon the Consortium Agreement between the defender, the third party and another company, and in particular clause B13 which provides as follows:
"LIABILITY FOR DAMAGE TO PROPERTY OR PERSONAL INJURIES
The Parties hereto mutually and irrevocably undertake to release, defend and indemnify each other for damage to any property and/or injury to/or death of the personnel of the others, arising out of or in connection with the Work, howsoever caused."
The third party contends that in terms of this clause the defenders have, in effect, agreed not to claim against them for the injury to the pursuer.
The Consortium Agreement
[4] The Consortium Agreement embraces engineering, project management and supply of sub sea equipment, test facilities and related services from each of the three parties thereto. In terms of the Agreement the parties agree to act as one entity, with the Contractor, (the third party), as the single point of contact with the Customer. The Agreement has elements in it of a joint venture, with detailed provisions for a profit split ("Risk and Reward Shares") from any work carried out under the agreement. However, in performing any work for a Customer, each of the parties to the agreement was to be responsible for its part of the relevant contractual duties, and was to provide such personnel and services as might be required for its performance thereof. As is to be expected, the agreement contains detailed provisions about allocation of responsibility where one of the parties to the Agreement is at fault. For example, clause B5.6 provides that the Contractor will bear such reduced revenues or additional costs as arise from its own negligence, errors or misjudgement in its leadership roll. In terms of clause B10, which is headed "Liability - General Principals" it is provided that each party shall carry out, be responsible for and bear the technical, commercial and financial risks for its part of the supply unless otherwise set out in the Agreement. Clause B11 deals with "Liability for Technical Information and Disturbances". It provides that if one of the parties to the Agreement has furnished insufficient technical information which has been identified as the basis for part of the supply to be provided by another party, then that first party should carry the extra costs incurred by the other. Similarly, if one party negligently causes disturbances in the work of the other, that party is to be liable for the extra costs incurred. Clause B12 deals with "Liability for Defects". Under this provision each party is required to remedy defects in its performance at its own cost. However, if a defect cannot properly be identified as being related to performance by one of the parties, the costs of rendering the defect will be borne by all three parties in accordance with their respective shares of risk and reward. A modified version of this same approach is to be found in clause B20 which deals with "Cancellation or Termination" of a contract by a customer because of default by any party to the Agreement; each party bears its own costs and losses incurred by it, but the party in default pays the first tranche of any damages payable to the Customer, the remainder being split between the parties in accordance with...
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