Hamida Begum (on behalf of MD Khalil Mollah) v Maran (UK) Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Coulson,Lord Justice Males,Lord Justice Bean |
| Judgment Date | 10 March 2021 |
| Neutral Citation | [2021] EWCA Civ 326 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: B3/2020/1263 |
| Date | 10 March 2021 |
Lord Justice Bean
Lord Justice Coulson
and
Lord Justice Males
Case No: B3/2020/1263
IN THE COURT OF APPEAL OF ENGLAND AND WALES
(CIVIL DIVISION)
ON APPEAL FROM
THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
(THE HONOURABLE MR JUSTICE JAY)
Strand, London, WC2A 2LL
Robert Bright QC and James Goudkamp (instructed by Ince Gordon Dadds LLP) for the Appellant
Richard Hermer QC and Rachael Toney (instructed by Leigh Day) for the Respondent
Hearing dates: 9 and 10 February 2021
Approved Judgment
INTRODUCTION
By a judgment dated 13 July 2020 ( [2020] EWHC 1846 (QB)), Jay J (“the judge”) refused the Appellant's application for reverse summary judgment under CPR Part 24.2, and the related application to strike out the claim under CPR Part 3.4. He found that it could not be said that the duty of care alleged on behalf of the Respondent would certainly fail, and that it should be allowed to proceed to trial. In addition, although he found that, on the face of it, the law of Bangladesh applied to the claim, and that this imposed a strict limitation period of one year which had not been complied with, the judge considered that there were arguments available to the Respondent under Articles 7 and 26 of Rome II which he could not resolve by way of interim application, which meant that he could not say that the claim was definitely statute barred.
The judge himself granted permission to appeal on the issue as to the existence of a duty of care. This court granted the Appellant permission to appeal on the two time bar issues arising out of Articles 7 and 26. Notwithstanding what ought to have been the relatively narrow scope for debate on the appeal, the joint authorities filled 5 full lever arch files and ran to 64 separate cases, statutes or commentaries. As is so often the way, only a handful of those were of direct application to the issues on appeal. Leading Counsels' oral submissions, on the other hand, were focused and illuminating.
I set out the factual background in Section 2. I identify some of the relevant passages in the judge's judgment in Section 3. I identify the relevant tests under CPR Part 24.2 and Part 3.4 in Section 4. Then at Section 5 I identify the assumptions relevant to the claim which, on these interim applications, were made by the judge in favour of the Respondent/claimant.
The Respondent puts her case as to the existence of a duty of care in two different ways. I deal with each separately in Sections 6 and 7. Thereafter I deal with the time bar issues, setting out in Section 8 the relevant background to those issues before analysing, in Sections 9 and 10 respectively, the arguments under Article 7 and Article 26 of Rome II. There is a short summary of my conclusions at Section 11.
THE FACTUAL BACKGROUND
The Respondent is the widow of Mohammed Khalil Mollah (“the deceased”) who had worked in the shipyards in Chattogram in Bangladesh for about 9 years. On 30 March 2018, he was working on the demolition of an oil tanker (“the vessel”) at the Zuma Enterprise Yard (“the Zuma Yard”) when he fell to his death.
The vessel had been registered to Centaurus Special Maritime Enterprise (“CSME”), a Liberian company that is part of the Angelicoussis shipping group. All the shares in CSME are directly owned by another company within the same group, Maran Tankers Shipholdings Limited (“MTS”), incorporated in the Cayman Islands. Another related company, Maran Tankers Management (“MTM”), also incorporated in Liberia, operated and managed the vessel.
By an agreement made between MTM and the Appellant (another related company, an English company and therefore amenable to the jurisdiction of the English court) on 1 August 2013, the Appellant agreed to provide agency and shipbroking services to MTM in respect of the vessel and 28 other ships. It was common ground that one of these services was the negotiation and agreement of contracts of sale as and when the ships reached the end of their working lives. It is the Respondent's case, on the disputed but currently uncontroverted evidence, that the Appellant had complete control over the sale of any of the vessels, including who it was sold to and for what price. The question of price was particularly important because, on the Respondent's case, a high price meant that the Appellant would have known that the vessel in question would be broken up in Bangladesh at a yard with negligible safety standards.
By the summer of 2017 the vessel had come to the end of its useful life. In accordance with standard practice, CSME, as the ship owners, acted through the Appellant as their brokers to arrange its sale and demolition. Also in accordance with standard practice, the proposed sale was not directly to the shipbreakers themselves, but to a demolition cash buyer who then assumed the credit risk. In this way, in August 2017, the Appellant made enquiries, obtained quotations, conducted negotiations and agreed the sale of the vessel to Hsejar Maritime Inc (“Hsejar”).
The agreement to sell was the subject of a Memorandum of Agreement (“MoA”) dated 24 August 2017. The purchase price was over $16 million, which was the equivalent of $404 per net long ton. The evidence was that this was at the high end of the likely range. In addition, the vessel, which was being sold “as is” in Singapore, only had a modest amount of fuel oil left in its tanks.
On the Respondent's evidence, the high price for the vessel and the small amount of oil left meant that the Appellant would have known that the vessel would be broken up in Bangladesh rather than anywhere else. The judge accepted that inference ([14]) and Mr Bright QC also accepted that the applications should be determined on the assumption that the Appellant was aware of the ultimate destination of the vessel.
Why does that matter? The answer can be found in the expert evidence before the judge. For a tanker of this size, the only realistic place for it to be broken up in safe working conditions was China (the Respondent's expert evidence being that the only other safe option, Turkey, could not have taken a vessel so large). But, for reasons of cost, hardly any oil tankers are demolished in China. As the judge noted at [15], out of the 11 million tonnes of oil tankers demolished in 2018, only 80,000 tons were broken up in Chinese and Turkish yards.
The vast majority of oil tankers are instead broken up in Bangladesh (with some in India and Pakistan). The evidence is that the vessels are beached there, that is to say driven onto tidal mud flats, where they are subsequently demolished by hand by workers, such as the deceased, working from the top of the vessel downwards. There are no heavy cranes or dock infrastructure of any kind: no cranes, scaffolding, cradles or harnesses. There is nothing to allow for rapid emergency response, and few occupational health and safety controls or inspections. The evidence is that, despite international concern registered in many ways over many years, the dangerous working practices in the Bangladesh shipbreaking yards inevitably cause shockingly high rates of death and serious injury.
Following the MoA, Hsejar took delivery of the vessel on 5 September 2017. It was sailed from Singapore on 22 September and beached at Chattogram on 30 September at the Zuma Yard. From the photographs, the Zuma Yard simply consisted of an area of the shoreline where numerous tankers were beached. Six months later, on 30 March 2018, the deceased was working at the top of the vessel when he fell from a considerable height and died of his injuries.
The proceedings were commenced on 11 April 2019. The Respondent's claim against the Appellant is based on the existence of a duty of care arising out of the Appellant's autonomous control of the sale of the vessel and the Appellant's knowledge that, as a result of that sale, the vessel would be broken up in Bangladesh in highly dangerous working conditions. That is, in my view, an unusual basis of claim. Moreover, it is the only basis available to the Respondent: although there was a separate claim for unjust enrichment, the judge rejected that out of hand and there is no appeal from his decision on that aspect of the case.
THE RELEVANT PARTS OF THE JUDGMENT
At [4] the judge explained why it was appropriate to consider the Appellant's applications by reference to the summary judgment test at Part 24.2, and he reminded himself of the relevant approach at [5]. He set out the facts between [6] and [19]. He addressed the alleged duty of care by reference to the pleadings ([23] – [26]), the skeleton argument ([27] – [28]); and the oral submissions ([29] – [32]). He summarised the Appellant's case at [33] – [35].
The judge's analysis of the duty of care starts at [36]. At [37] the judge considered the Respondent's first way of putting their case as to the existence of a duty, based on ordinary Donoghue v Stevenson principles. The judge was plainly unimpressed with that way of putting the duty of care but, at [64] he indicated that he was not prepared to strike out the claim on that basis at this stage.
Between [38] and [63], the judge addressed the alternative basis for the alleged duty, by reference to the Appellant's responsibility for creating a danger which then put workers such as the deceased at risk from the conduct of third parties, such as the Zuma Yard. With respect to him, the judge's analysis in these paragraphs is not always easy to follow, in part because he concluded that this case did not easily fit within a particular category of liability recognised in the authorities. At [53] the judge referred to “the creation of danger principle”, examined it by reference...
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