Grand Champion Tankers Ltd v Norpipe A/S (Marion)
| Jurisdiction | England & Wales |
| Judge | Lord Diplock,Lord Scarman,Lord Roskill,Lord Brandon of Oakbrook,Lord Brightman |
| Judgment Date | 17 May 1984 |
| Judgment citation (vLex) | [1984] UKHL J0517-3 |
| Date | 17 May 1984 |
| Court | House of Lords |
[1984] UKHL J0517-3
Lord Diplock
Lord Scarman
Lord Roskill
Lord Brandon of Oakbrook
Lord Brightman
House of Lords
My Lords,
I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Brandon of Oakbrook. I agree with it, and for the reasons which he gives I would dismiss this appeal.
My Lords,
I have had the advantage of reading in draft the speech to be delivered by my noble and learned friend, Lord Brandon of Oakbrook. I agree with it, and for the reasons he gives, I would dismiss the appeal with costs.
My Lords,
I have had the advantage of reading in draft the speech to be delivered by my noble and learned friend, Lord Brandon of Oakbrook. I agree with it and for the reasons which he gives I would dismiss this appeal.
My Lords,
On 12 March 1977 the Liberian tanker Marion, owned by the appellants, left Hamburg for Teesside in order to load a cargo there. On 14 March 1977 the Marion arrived near the entrance to the Teesside Fairway, but, because there was no loading berth immediately available for her, she was obliged to come to anchor and wait. The place where her Master, Captain Potenza, chose to anchor her was off Hartlepool about 2.7 miles east of The Heugh and about one mile from the Tees Fairway buoy. Four days later, on 18 March 1977, a loading berth having become available for her, the Marion tried to weigh anchor so as to enable her to proceed inward to that berth. Her efforts to do so, however, failed because her anchor had fouled a pipeline on the sea-bed which carries oil from the Ekofisk Field through Tees Bay to Teesside. As a result of the anchor of the Marion so fouling the pipeline, and of her efforts to haul it up after that had happened, the pipeline was severely damaged.
On 27 September 1977 the 13 named respondents, all of whom are oil companies of one kind or another, brought an action against the appellants in the Admiralty Court in which they alleged that the fouling of the pipeline by the anchor of the " Marion", and the damage to the pipeline resulting from such fouling, had been caused by the negligence of the servants or agents of the appellants on board that ship. The amount of the damages claimed in the action exceeded U.S. $25,000,000.
On 23 July 1981 the appellants formally admitted liability for the fouling of the pipeline and the consequential damage done to it. On the following day, 24 July 1981, the appellants began an action of their own in the Admiralty Court against the 13 named respondents and all other persons having claims in respect of the damage to the pipeline, in which they claimed a decree that they were entitled to have their total liability in respect of such damage limited to the sum of £982,292.06, pursuant to the relevant provisions of the Merchant Shipping Acts 1894-1979.
The limitation action was tried by Sheen J. over a period of 32 days in January, February and March 1982. On 30 March 1982 the learned judge, in a reserved judgment, decided the action in favour of the appellants and granted them the decree of limitation of liability which they sought.
By notice of appeal dated 10 May 1982 the 13 named respondents appealed to the Court of Appeal against the decision of Sheen J. The appeal was heard by a division of the Court of Appeal consisting of Sir John Donaldson, M.R. and Dunn and Purchas L.J J. over a period of seven days in April and May 1983. On 20 May 1983 the Court of Appeal, in reserved judgments, unanimously allowed the appeal, ordered that the appellants be refused a decree of limitation of liability, and refused them leave to appeal to your Lordships' House. Leave for the appellants to do so was later given by the Appeal Committee.
My Lords, the issues between the parties have fortunately been considerably narrowed since the lengthy hearing of the action before Sheen J. The following matters of fact and law, or of mixed fact and law, were common ground before your Lordships. Firstly, that, if the appellants are entitled to limit their liability, the sum of £982,292.06 referred to earlier is the correct amount of their limited liability. Secondly, that the immediate cause of the damage to the pipeline was the negligence of the master of the Marion, Captain Potenza, in navigating by reference to a long obsolete chart on which the pipeline was not shown, leading him to let go his anchor in a place where, if he had been aware of the presence of the pipeline, as he would have been if he had navigated by reference to an up-to-date Chart, he would never have done. Thirdly, that, having regard to the express terms of section 503 of the Merchant Shipping Act 1894, as amended by the Merchant Shipping (Liability of Shipowners and Others) Act 1958, the material parts of which are to be found set out in full in the judgment of Sheen J., the appellants are only entitled to have their liability limited if they can prove that the damage to the pipeline occurred without actual fault on their part. Fourthly, that, on the true construction of the statutory provisions referred to above, the burden of proving (a) that there was no actual fault of the appellants, and (b) that, if there was any such actual fault, it did not contribute to the damage to the pipeline, is in either case upon the appellants. Fifthly, that, since the appellants had delegated the management and operation of the Marion wholly to an English company, Fairfield-Maxwell Services Ltd. (FMSL), the person whose fault would constitute, as a matter of law, the actual fault of the appellants, is the managing director of FMSL, Mr. Downard. Sixthly, that, whereas FMSL employed three other persons in a managerial capacity, namely Mr. Lowry as operations manager, Mr. Graham as assistant operations manager and Mr. Martinengo (an engineer) as superintendent, no faults of theirs, if they occurred, could constitute, as a matter of law, the actual fault of the appellants.
There were two main respects in which it was contended for the 13 named respondents that the appellants had failed to discharge the burden of proving that there had been no fault on the part of Mr. Downard which contributed to the damage to the pipeline. First, it was said that the appellants had not proved that Mr. Downard had a proper system for ensuring that the charts and other nautical publications on board the Marion (a) were not obsolete or superseded, or (b), if still current, were kept corrected up-to-date at all times. Secondly, it was said that the appellants had not proved that there had been no fault of Mr. Downard in failing to ensure that there was brought to his notice a document received by FMSL from the Liberian Marine Inspectorate on 28 April 1976 and known as a Safety Inspection Report, relating to an inspection of the Marion in February of that year. That report stated among other things "Navigational charts for trade of vessel corrections omitted for several years", and it was said that, if Mr. Downard had seen that report and read that statement, he would, on his own admission, have taken immediate and radical steps, which his subordinates did not take, to put matters right.
It will be necessary later to examine the evidence, and the findings of the two courts below, with regard to the two criticisms of Mr. Downard referred to above. Before doing that, however, it will, I think be helpful to indicate the approach which courts have in recent years adopted to questions of actual fault on the part of shipowners or ship managers in contested limitation actions.
The question whether, where damage had been done by a ship, such damage occurred without the actual fault of her owners or managers is primarily one of fact, to be decided by reference to all the circumstances of any particular case. Such a question involves nevertheless an element of law, in that the answer to it must depend, in part at least, on what approach courts dealing with contested limitation actions adopt, in relation to safety of navigation, to the responsibilities of masters on the one hand and shipowners or ship managers on the other.
There was a time when courts dealing with contested limitation actions considered that shipowners or ship managers sufficiently discharged their responsibilities if they appointed a competent master and thereafter left all questions of safe navigation, including the obtaining at their expense of all necessary charts and other nautical publications, entirely to him. That former approach of such courts has now been out of date for more than 20 years, as appears from the decision of the Court of Appeal in The England [1973] 1 Lloyd's Rep. 373.
The issue in that case was whether Mr. Groen, the owner of a motor coaster which traded frequently to the port of London without the assistance of a pilot, was guilty of actual fault contributing to a collision between his ship and another in the River Thames, in that he had failed to take any, or any proper, steps to ensure that the master of his ship had on board, and available for his use, a copy of the latest Port of London River Byelaws. It was held by the Court of Appeal, reversing the Admiralty judge, that Mr. Groen had been guilty of actual fault in this respect, and that it had not been proved that such fault did not contribute to the collision.
In relation to that issue, Sir Gordon Willmer, who was the acknowledged master of Admiralty law in his time, said at p. 383:
"It may be that 20 years ago what Mr. Groen did and did not do might have passed muster; but the decision of the House of Lords in the case of The Norman [1960] 1 Lloyd's Rep. 1, seems to me to have thrown quite a fresh light on the extent of the managerial duties of owners and managers,...
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