Konrad Andrew Flaws And Leslie Blance Barclay V. The International Oil Pollution Compensation Fund
| Jurisdiction | Scotland |
| Judge | Lord Gill |
| Date | 06 March 2001 |
| Docket Number | 042/5 |
| Court | Court of Session |
| Published date | 06 March 2001 |
| OUTER HOUSE, COURT OF SESSION | |
| 042/5/99 | OPINION OF LORD GILL in the cause KONRAD ANDREW FLAWS and LESLIE BLANCE BARCLAY Pursuers; against THE INTERNATIONAL OIL POLLUTION COMPENSATION FUND Defender: ________________ |
For the pursuer : Gale, QC; Paull & Williamsons
For the defender : C M Campbell QC, Grahame; Morton Fraser Commercial
6 March 2001
The background
[1]This case arises from negotiations between the parties to settle the pursuers' claims for compensation for damage caused by the wreck of the Braer. At the date of the incident the pursuers were in partnership as fishermen. They operated the fishing vessel Winsome. They sue for declarator that the defender is obliged by virtue of two contracts constituted by letters passing between the defender and the pursuers' agents to make payment of certain sums to the pursuers. There are ancillary conclusions for payment of these sums and for expenses.
[2]The action is founded on the following averments:
"By letters dated 2nd and 4th, both dates September 1997, addressed to the pursuers the defenders offered to pay the pursuers (a) a sum of £30,852.40 in respect of loss of income as a consequence of inability to fish for the period from 27th June, 1995 to 17th October, 1995 and (b) a sum of £93,356.76 in full and final settlement of the claim in respect of loss of income from fishing from 20th October, 1995 onwards. By letters dated 18th June, 1998 the pursuers' agents wrote to the defenders' agents Messrs Morton Fraser, accepting said offers. Said items of correspondence are lodged herewith and referred to for their whole terms which are held to be repeated herein brevitatis causa."
[3]This case has been debated on the procedure roll on a preliminary plea for the defenders. Although the parties have not entered into a formal minute of admissions, there is no dispute on the essential facts. It is agreed on record that after the Braer incident the defender made certain interim payments to the pursuers. The defender avers that these payments amounted to £270,746.22, which I think that the pursuers now accept. When the final value of the claim was being negotiated, Miss Sally Gregory, a claims officer of the defender, sent two letters to the pursuers, dated 2 and 4 September 1997, in which she stated that the defender had accepted the pursuers' remaining claims as admissible in the sums of £30,852.40 and £93,356.76 respectively. The pursuers' solicitors sent to the defender two letters, both dated 18 June 1998, which treated the defender's letters of 2 and 4 September 1997 as offers and bore to be acceptances of them.
[4]The defender pleads that neither of Miss Gregory's letters constituted an offer; but counsel for the defender gave up that point at the outset of the debate. I shall therefore refer to the letters as the first and the second offers.
The first offer (2 September 1997) and the purported acceptance
[5]The first offer relates to compensation for the period from 20 October 1995. It is addressed to the pursuers care of their agents, Bell Ingram Rural, Aberdeen. It is in the following terms:
"I refer to your claim for compensation following the Braer incident.
There is a limit on the amount of compensation payable by the IOPC Fund for pollution damage. This limit is fixed by the 1971 Fund Convention and the Merchant Shipping Acts 1971 and 1974. At present the limit is approximately £50 million, including the compensation actually paid by the shipowner and his insurer. In the event that the total amount of all admitted claims exceeds this maximum amount, the amount available must be distributed on a pro rata basis between the claimants.
The total of the claims for pollution damage arising out of the Braer incident exceeds this limit. Unfortunately, the accurate figures are not available as some claimants have not yet given full details of their claims. To avoid the risk of overpayment, the IOPC Fund's Executive Committee decided on 17 October 1995 that no further payment of claims should be made until more accurate information regarding the total amount of claims is available. It was decided that in the meantime the assessment of claims should continue although payment in full cannot be guaranteed.
Your claim in respect of loss of income from fishing since 20 October 1995 has been accepted as admissible in the amount of £93,356.76 in full and final settlement of your claim. If the IOPC Fund's maximum limit is exceeded, your payment and those of all outstanding claims will have to be reduced to a proportion of the admitted amounts.
I will contact you as soon as I have more accurate information as to the value of outstanding claims and once the Executive Committee has decided how these claims should be progressed.
I should be grateful if you would confirm in writing within the next 2-3 weeks whether or not this offer is acceptable in full and final settlement of your fishing claim following the Braer incident."
[6]Miss Gregory wrote to the pursuers a letter dated 29 September which bore to impose a time limit for acceptance of this offer. This letter is lodged in process and was referred to in the debate; but it is not incorporated in the pleadings. The pursuers claim that they did not receive that letter timeously. For the purpose of the debate counsel for the defender confirmed that they did not rely on this letter and did not submit that it took effect. I need not therefore quote the letter and I shall not refer to it further.
[7]By letter dated 18 June 1998 the pursuers' solicitors, Paull and Williamsons, Edinburgh, wrote to the defender's solicitors, Morton Fraser Commercial, Edinburgh, in the following terms:
"We refer to your clients' letter to ours dated 2nd September 1997. On behalf of and as instructed by our above clients following our acceptance, on their behalf, by letter of today's date, of the assessment of their loss for the period 27th June 1995 to 17th October 1995 in the sum of £30,852.40, we hereby accept the offer contained in your clients' said letter in respect of compensation for loss of fishing income from 20th October 1995 onwards, and that on the basis stated therein."
[8]This letter does not correspond with the first offer in relation to the amount of the offer or to the period of the losses which it covers. At the debate counsel for the defender intimated that they did not take any point about this. They formally acknowledged that this was an acceptance that, if timeous, related to the first offer.
The second offer (4 September 1997) and the purported acceptance
[9]The second offer relates to compensation for the period from 27 June 1995 to 17 October 1995. It is addressed directly to the pursuers. It is in the following terms:
"I refer to your claim for compensation following the Braer incident.
There is a limit on the amount of compensation payable by the IOPC Fund for pollution damage. This limit is fixed by the 1971 Fund Convention and the Merchant Shipping Acts 1971 and 1974. At present the limit is approximately £50 million. In the event that the total amount of all claims against the Fund exceed this maximum amount, compensation must be distributed on a pro rata basis between the claimants.
In view of the recent information it appears that the total of the claims for pollution damage arising out of the Braer incident may exceed this limit. Unfortunately, accurate figures are not available as some claimants have not yet given details of their claims. To avoid the risk of overpayment, the IOPC Fund's Executive Committee decided on 17 October 1995 that no further payment of claims should be made until more accurate information regarding the total level of claims is available. In the meantime it was decided that the assessment of claims should continue, although payment in full cannot be guaranteed.
Accordingly your claim in respect of loss of income for the period from 27 June 1995 to 17 October 1995 has been accepted as admissible in the amount of £30,852.40. If the IOPC Fund's maximum limit is exceeded, your payment and those of all other claimants will have to be reduced to a proportion of the approved amounts.
I will contact you again once the Executive Committee has decided how these claims should be progressed."
[10]I should mention that in relation to the second offer, which the pursuers say was received by their agents, Bell Ingram Rural, on 19 September 1997 but was not seen by them until June 1998 (Cond. 3, infra), counsel for the defender expressly disclaimed any argument to the effect that the agents' knowledge of the offer should be imputed to the pursuers.
[11]By letter dated 18 June 1998, Paull and Williamsons wrote to Morton Fraser Commercial in the following terms:
"We refer to your clients' letter of 4th September 1997 addressed to our clients, Messrs. Flaws and Barclay at 5 Bruce Crescent, Lerwick, in which they state that our clients' claim in respect of loss of income for the period 27th June 1995 to 17th October 1995 has been accepted as admissible in the amount of £30,852.40. We hereby confirm on behalf of our clients their acceptance of that assessment, and that subject to the condition stated in the penultimate paragraph of your clients' said letter."
The pleadings
[12]In relation to the first offer the defender's averments are as follows:
" ... Separatim, esto it was an offer to make payment of said sum to the pursuers (which is denied) the defenders imposed a time limit on any acceptance thereof. It was stated therein that confirmation in writing was required within two to three weeks. No confirmation was received from the pursuers or their agents within three weeks from the date of said letter. Accordingly, the offer lapsed on expiry of the three week period and was not open for acceptance on 18th June, 1998 ... (Ans. 3)."
In relation to both offers the defender's averments are as follows:
" ... Separatim in any event, esto there were offers on 2nd and 4th September,...
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