The Sivand
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE EVANS,LORD JUSTICE HOBHOUSE,LORD JUSTICE PILL |
| Judgment Date | 29 January 1998 |
| Judgment citation (vLex) | [1998] EWCA Civ J0129-20 |
| Docket Number | QBADF 96/1443/B |
| Court | Court of Appeal (Civil Division) |
| Date | 29 January 1998 |
[1998] EWCA Civ J0129-20
Lord Justice Evans
Lord Justice Hobhouse
Lord Justice Pill
QBADF 96/1443/B
IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMIRALTY COURT
(MR JUSTICE LONGMORE)
Royal Courts of Justice
Strand
London W2A 21L
MR MARK CRAN QC and MR NEIL CALVER (instructed by Messrs Ince & Co, London EC3R 5EN) appeared on behalf of the Appellant (Defendant).
MR NICHOLAS HAMBLEN QC (instructed by Messrs Sinclair Roche & Temperley, London EC2V 7LE) appeared on behalf of the Respondent (Plaintiff).
The facts of this case are straightforward. They could even come from a text book. The appellant's vessel "Sivand" damaged harbour installations owned by the respondents, as the result of negligent handling. The respondents engaged contractors to carry out the repairs under a standard form of contract on ICE Conditions. An unforeseen event occurred in the course of the works. The contractors used a jack-up barge, meaning a barge which is supported when in position by extending legs which rest on the sea bed. The correct procedures were carried out, but the sea-bed and its sub-soil proved unable to support the weight of one of the legs. The barge capsized and became a total loss. The contractors claimed and recovered an extra payment under clause 12 of the ICE conditions for the consequences of this unforeseen event. The Respondents now seek to recover that extra amount from the appellants. There is no dispute as to the cost of repairs apart from this item, and those costs have already been paid.
The appellants say that the sum in question became due to the contractors only because of this untoward and unforeseen event. This means in law, they submit, that the extra loss suffered by the respondents cannot properly be regarded as having been caused by the negligent handling of their ship. Alternatively, they submit, if it was so caused, then it is too remote a consequence of the negligence to enable the respondents to recover damages. This, they say, follows, perhaps inevitably, from the fact that the collapse of the barge and therefore the increased cost of the repairs which resulted from it was not due to negligence and was not reasonably foreseeable or foreseen. In lawyer's language, there was an intervening event which broke the chain of causation flowing from the negligence for which they are responsible, and consequences which are not reasonably foreseeable, even if directly caused, are by definition too remote to give rise to a right to recover compensation in law: The Wagon Mound (No.l) [1961] A.C. 388.
The respondents on the other hand submit that they are entitled to recover as damages the reasonable cost of repairs to their property which was damaged. They acted reasonably in employing reputable contractors on appropriate standard terms. The fact that the total cost includes a sum which became due under clause 12, even as the result of an unforeseen event, does not deprive them of their right to recover the actual, reasonable, cost. Causation is a matter of common sense. No sensible person could doubt but that the whole of the cost they incurred was the measure of the loss caused to them by the negligently handling of the ship.
History of proceedings
The contractors' claim under clause 12 of the I.C.E. Conditions was referred to arbitration in December 1987. The arbitrator is John Uff Q.C. By his first Interim Award dated 3rd November 1989 he made detailed findings of fact as to how the collapse of the barge occurred. These include:-
"5.7 ……. It is also common ground that, for these two legs to have punched through the soil below the seabed, there must have been a failure in shear of the soil below the bottom of the leg. In this sense, the immediate cause of the failure was the ground conditions. However, the underlying question was why the soil below spud leg 2 and/or l came to be in a condition where failure was possible, having regard to the previous preloading sequence.
5.8 What was the effective cause of the failure? was it due to something which falls within the term "conditions" within the meaning of Clause 12 of the ICE Conditions? (pp. 99-lOO).
"6.16 If the continuing settlement cannot be explained by instability or by the theory set out on page 99 of the expert's bundle, what was the cause? In my opinion, the cause must be taken to be the reaction of the ground to spud leg number 2 being such that its bearing capacity decreased as penetration and titling of the barge occurred. (p.118).
Issue E [What, broadly, was the cause of collapse?]
6.17 There are many matters which could be said to be a cause of the collapse. including the fact that the Claimant was using the barge to lift a comparatively heavy piece of concrete. However, the legal test of causation excludes matters which would not of themselves rank as a cause. In my opinion, the collapse was caused by whatever phenomenon was responsible for the barge moving from the initial small settlement of around 5 cms to a substantially larger settlement, perhaps 2O or 3O cms, at which point the instability of the barge was such that further and progressive collapse was irresistible and inevitable. In my opinion, and I so find, that cause was as set out under Issue D. (p.119).
Issue F
6.19 Does the cause that I have found rank as a "physical condition … which … could not reasonably have been foreseen by an experienced contractor" within the meaning of Clause 12 of the ICE Conditions? In order to answer this question it is necessary to be precise as to whether the cause of collapse is a physical condition, and if so its nature. The Respondent has argued with great force and skill that the only relevant physical condition is a layer of harder material into which the relevant spud leg was driven, which (on Professor Hanna's theory) is underlain by softer material which permitted the leg to penetrate. This, it is argued, was entirely foreseeable and indeed foreseen ….. (p.12O).
6.22 In my opinion, taking into account particularly the unprecedented nature of this collapse, there must have been a very unusual combination of soil strength and applied stresses around the base of leg number 2 just before failure occurred. It is not possible to calculate or precisely to predict these strengths and stresses, but they must have existed for failure to have occurred, having regard to the findings that I have already made. Was this a physical condition? In my opinion it was. Clause 12 contains no limitation on the meaning of "physical condition" and I can see no reason why a combination of strength and stress should not fall within the term. The "condition" was thus a transient combination, the elements of which existed at the time the contract was made but which came together only near the point of failure. I do not regard this as placing the condition outside the wording of Clause 12 : See Holland Dredging v.Dredging & Construction 37BLR, at p.35. (pp.122-123).
"6.23 Put more simply, I do not believe that the condition which led to the collapse of Stevin 73 could have been foreseen. Of a certainty it was not foreseen by anyone." (p. 123).
Clause 12 reads as follows:-
"(l) If during the execution of the Works the Contractor shall encounter physical conditions (other) than weather conditions or conditions due to weather conditions) or artificial obstructions which conditions or obstructions he considers could not reasonably have been foreseen by an experienced contractor and the Contractor is of opinion that additional cost will be incurred which would not have been incurred if the physical conditions or artificial obstructions had not been encountered he shall if he intends to make any claim for additional payment give notice to the Engineer pursuant to Clause 52(4) ….
(3) To the extent that the Engineer shall decide that the whole or some part of the said physical conditions or artifial obstructions could not reasonably have been foreseen by an experienced contractor the Engineer shall take any delay suffered by the Contractor as a result of such conditions or obstructions into account in determining any extension of time to which the Contractor is entitled under Clause 44 and the Contractor shall subject to Clause 52(4) (notwithstanding that the Engineer may not have given any instructions or orders pursuant to sub-clause (2) of this Clause) be paid in accordance with Clause 6O such sum as represents the reasonable cost of carrying out any additional work done and additional Construction Plant used …… "
The respondents appealed, with leave, first to His Honour Judge Fox Andrews Q.C. and then to the Court of Appeal. The arbitrator's award was upheld.
The first question of law raised on the appeals was:-
"(l) Whether on the facts as found by the learned Arbitrator Harbour and General Works (Stevin) Limited, the respondents to this application and the claimants in the arbitration (whom I shall call 'the contractors"), have encountered physical conditions which they could not reasonably have foreseen so as to entitle them to claims under clause 12 of the ICE conditions."(p.194).
Parker L.J. giving the leading judgment said this:-
"Mr Dyson submits that the physical condition of the soil, which was found by the arbitrator to be foreseeable, really concludes the matter and that applied stress is not and cannot be any part of the physical condition.
Attractive as his argument appears to be at first sight, I cannot accept it, The Arbitrator was in my view saying that the general soil conditions were...
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