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You are here: BAILII >> Databases >> England and Wales High Court (Commercial Court) Decisions >> Colour Quest Ltd & Ors v Total Downstream UK Plc & Ors (Rev 1) [2009] EWHC 540 (Comm) (20 March 2009) URL: http://www.bailii.org/ew/cases/EWHC/Comm/2009/540.html Cite as: [2009] EWHC 540 (Comm), [2009] 1 CLC 186, [2009] 2 Lloyd's Rep 1 |
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QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
COLOUR QUEST LIMITED AND OTHERS |
Claimants |
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- and - |
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(1) TOTAL DOWNSTREAM UK PLC (2) TOTAL UK LIMITED (3) HERTFORDSHIRE OIL STORAGE LIMITED |
Defendants |
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- and - |
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(1) TOTAL DOWNSTREAM UK PLC (2) TOTAL UK LIMITED |
Part 20 Claimants |
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- and - |
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CHEVRON LIMITED |
1st Part 20 Defendant/ Third Party |
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- and - |
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TOTAL MILFORD HAVEN REFINERY LIMITED |
Fourth Party |
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- and - |
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HERTFORDSHIRE OIL STORAGE LIMITED |
2nd Part 20 Defendant |
____________________
Lexa Hilliard (instructed by Collins Solicitors) for the Douglas Jessop Claimants
Justin Fenwick Q.C. & Paul Sutherland (instructed by Pinsent Masons LLP) for West London Pipeline and Storage Ltd and United Kingdom Oil Pipelines Ltd
Vernon Flynn Q.C. (instructed by Linklaters LLP) for BP Oil UK Limited
Laurence Rabinowitz Q.C. & Richard Handyside (instructed by Simmons & Simmons) for Shell UK Limited
Lord Grabiner Q.C. & Andrew Bartlett Q.C. & Julian Field & Alan MacLean & Alexander Antelme & Simon Birt (instructed by Davies Arnold Cooper) for the First and Second Defendants
Philip Edey (instructed by Edwards Angell Palmer & Dodge UK LLP) for Hertfordshire Oil Storage Limited
Jonathan Sumption Q.C. & Andrew Popplewell Q.C. & Michael Bools (instructed by Herbert Smith LLP) for Chevron Limited
Gordon Pollock Q.C. & Claire Blanchard (instructed by Halliwells LLP) for TAV Engineering Limited
Hearing dates: 1 October - 16 December 2008
____________________
Crown Copyright ©
Index | Paragraphs |
Introduction | 1 - 28 |
Contractual Summary | 29 - 58 |
Evidence | 59- 68 |
Documentary History of the JVA | 69 - 204 |
Vicarious Liability | |
The law | 205 - 220 |
The agreements | 221 - 249 |
The facts | 250 - 303 |
Conclusion | 304 - 329 |
Total Off-site negligence | 330 - 365 |
Indemnities | 366 - 393 |
Wilful Misconduct | 394 |
Consent | 395 - 406 |
Nuisance | 407 |
Private | 408 -421 |
Public | 422 -464 |
Shell claim | 465 - 517 |
WLPS / UKOP | 518 - 523 |
Postscript | 524 |
Appendix 1 - Map of the Buncefield site | Appendix 1 |
Appendix 2 - List of actions | Appendix 3 |
Mr Justice David Steel:
Introduction
a) Hertfordshire Oil Storage Ltd ("HOSL") site.
It was in two sections, East and West, and formed the basis of a joint venture between Total and Chevron. HOSL West comprised 16 tanks and HOSL East had 10 tanks (although notably 3 were reserved for Total's exclusive use for the storage of aviation fuel). All the tanks were operated from a control room located in an administrative building on the HOSL West site. The control room was equipped with a Motherwell automated control and tank gauging system for the operation of Fina-Line and the HOSL storage and road loading facilities. HOSL West was the centre of the fire and explosion.
b) United Kingdom Oil Pipelines Ltd ("UKOP") and West London Pipeline and Storage Ltd ("WLPS") site: these were sometimes referred to as the BPA sites, BPA being the company engaged by WLPS and UKOP to operate the site.
This was also split in two, a North or Cherry Tree Farm Section and a main section all lying between the HOSL West and HOSL East site. There were 6 storage tanks and other facilities operated for the WLPS/UKOP shareholders. The whole site was heavily damaged in the incident.
c) BP Oil Ltd site.
This facility was on the south side of the depot and escaped major damage.
d) Ex-Shell UK site
This was on the south-west side of the depot. The tanks and office buildings formerly used by Shell had been closed down. In part it was used as a tanker park for Shell drivers picking up fuel under an exchange agreement with Chevron. In addition a large warehouse (the "Blackstone" warehouse) had been constructed on the site. This was heavily damaged.
a) The Fina-line, a 10 inch diameter pipeline from the Lindsey Oil refinery on Humberside which terminated within the HOSL West site. Although it was not an asset of the Total/Chevron joint venture, it was operated, including the control of flow rates, from the same control room as the HOSL tanks.
b) The UKOP North pipeline, a 10 inch diameter pipeline running from Shell's Stanlow refinery on Merseyside. Having passed a pumping station at Kingsbury it terminated at the UKOP/BPA Cherry Tree Farm or North site. It could feed tanks in both the HOSL East and West sites as directed from the HOSL control room. However the flow rates were set at Kingsbury.
c) The UKOP South pipeline, a 14 inch diameter pipeline from Shell Haven and BP Coryton Refinery via Kingsbury with a spur terminating in the BPA Main site. Flow rates were also set at Kingsbury.
a) On 10 December 2005 at 0630, tank 915 in bund A at HOSL West started to receive part of a consignment of 10,500 m3 of unleaded motor fuel (PU50) from the Fina-line which had earlier been filling Tank 901. This change was prompted by the low level alarm sounding on Tank 915 which was supplying fuel to the loading racks. The net rate of inflow allowing for the continuing outflow was about 140 m3 /hr. At this rate the available ullage would have been sufficient until well into daytime on 11 December.
b) The supervisors on duty in the control room were Mr Graham Nash as Pipeline Supervisor and Mr Mark Forde as Terminal Supervisor. At 0700 these two supervisors were replaced by Mr Philip Doran. In addition Mr Terry Fitt came on duty[2].
c) Shortly before the next change of watch, at about 1845, those in the control room arranged for Tank 912 in bund A to start to receive a consignment of 8,400m3 unleaded motor fuel from the UKOP South pipeline at a pumping rate of about 500m3 per hour set by Kingsbury. The pumping schedule contemplated that this delivery would run throughout the watch until about 0815 on 11 December.
d) Immediately prior to the commencement of delivery of this consignment, Tank 912 had available ullage of only 4,971m3 (on the basis of the level set for the High alarm) and thus a transfer of the delivery to another tank was required before the end of the night-time watch to accommodate the remainder of the consignment.
e) At 1900 a shift handover in the control room took place. Mr Philip Doran (and Mr Terry Fitt) handed over to Mr Graham Nash (as Pipeline Supervisor) and Mr Mark Forde (as Terminal Supervisor).
f) The only relevant recorded activity in the control room involving the Motherwell system during the night (until immediately before the explosion) was the entering into the automated system at 1902 of the product data in respect of samples taken from the consignment entering Tank 912 from the UKOP South pipeline.
g) At about 2315 the terminal was closed to tankers to enable stock checking to be carried out. The terminal reopened for transfers into road tankers at about midnight. The stock check was completed at about 0130 and no abnormalities were reported.
h) At about 0100 on 11 December 2005 the pumping rate from the Fina-line pipeline into Tank 915 was increased to a net rate of 240m3 per hour by those in the control room. Even at that rate there was sufficient ullage in Tank 915 to continue receiving fuel until after the end of the night shift.
i) At some point between 0300 and 0315 the tank gauge for Tank 912 became stuck and from then onwards the Motherwell system recorded an unchanged reading of 12.188m (96.41% full) notwithstanding that filling of the tank continued at a rate of about 550m3 per hour.
j) Neither supervisor responsible for receipt of the consignment of oil into Tank 912 noticed that the reading remained unchanged let alone appreciated that the gauge on tank 912 had become stuck.
k) The level in Tank 912 went past the High alarm level (12.630 metres) at about 0329 and then past a High High level alarm (12.730 metres) at about 0334. But since these were connected to the stuck tank gauge no alarm sounded.
l) The level continued to the independent safety switch and alarm (the TAV or Cobham switch) set at the "ultimate high" level of 13.114 metres. The mechanism was designed, if such a level was reached, to activate a trip function to close valves on the incoming pipes. But this did not operate because it was out of position having not been padlocked in its operating position following a recent test.
m) The floating tank lid was now near the edge of the roof. Calculations reveal that Tank 912 would have been completely full at 0520 in the sense that it would have begun to overflow through the roof vents.
n) At about 0538 a low-lying white mist began to develop in the vicinity of the North West corner of bund A in which various tanks including Tank 912 were situated. The mist was recorded on CCTV footage recovered after the incident.
o) By about 0546 CCTV cameras along Buncefield Lane on the western edge of the site showed that the mist had thickened to about 2 metres deep and was so dense that it was not possible to see through it. The mist appeared to flow away from Bund A in all directions.
p) At 0550 a tanker driver contacted the supervisors and informed them that there was a strong smell of petrol vapour at the loading bays and a strange white mist at the north end of the site. Mr Forde went to investigate at about 0553.
q) Between 0550 and 0600 a thick fog of between 5 and 7 metres in height was to be seen near the junction where Cherry Tree Lane meets Buncefield Lane. The fog continued to spread west of the Buncefield site into adjacent office car parks. Cars being parked off-site began to rev uncontrollably.
r) Without warning at 0553 the flow rate into Tank 912 was increased first to 890 m3 per hour and on to over 900 m3 per hour by those operating the UKOP pipeline off site at Kingsbury, thus increasing the rate of overflow by over 60%.
s) At 0559 Mr Forde contacted Mr Nash by radio and informed him that a tank seemed to have split and he should call the fire brigade.
t) On the basis that the relevant tank was Tank 912 but under the mistaken impression that Tank 912 was being filled from the Fina-line, Mr Nash immediately diverted the Fina-line delivery to Tank 911. In fact this resulted in a diversion from Tank 915 not tank 912 and accordingly the overflow continued.
u) At 0601 the first explosion occurred.
The proceedings
a) Total: the company history is complicated,[3] but it is not necessary for the moment to enter into all the detail. The HOSL section of the Buncefield site originated from a joint venture agreement between Fina and Texaco in 1988. Put simply Fina was later taken over by Total although the precise identity of the party to the joint venture and the associated agreements within the Total camp at the time of the explosion was and remains a matter of controversy. The three Total companies (the first defendant, the second defendant and the fourth party) were jointly represented at the trial. I refer to them compendiously as Total.
b) HOSL, the third defendant was the joint venture company itself. It was owned by Total as to 60% and Chevron as to 40%. It was separately represented pursuant to instructions from a litigation sub-committee comprised of three directors appointed specifically for that purpose. The sub-committee did not concern itself with disputes as between HOSL and its shareholders.
a) Outside the fence (OTF):
i) Colour Quest Ltd & others – mainly a group of companies, many of which were situated in the local industrial estate. They were represented by Messrs Kennedys and for convenience were referred to as the Kennedys Claimants.
ii) Douglas Jessop & others – mainly individual claimants from the Hemel Hempstead area. They were represented by Messrs Collins. Again for convenience they were referred to as the Collins Claimants.
b) Inside the fence (ITF):
i) WLPS and UKOP – these companies were the legal owners of the sites at Buncefield other than those owned by HOSL and BP – the beneficial ownership being held by various participants pursuant to trust deeds. By the time of the explosion the participants were Chevron, Total, BP and Shell.
ii) BP Oil UK Ltd as above.
iii) Shell UK Ltd as above.
iv) BRE/Hemel 1 Limited owners of the Blackstone warehouse on the ex-Shell site.
a) Chevron[4].
b) TAV Engineering – this company was the manufacturer of the independent[5] TAV or "Cobham" alarm fitted to Tank 912 which failed to operate. During the course of the hearing Total's claim against TAV was settled and TAV took no further part in the proceedings.
c) Motherwell – this company was responsible for installing and maintaining the tank level equipment. Prior to the hearing, Motherwell went into liquidation and did not participate in the trial.
Case management
i) Allowing the overfilling of Tank 912 and the escape of around 300 mts of unleaded petroleum from Tank 912 on the morning of 11 December 2005;
ii) Failing to prevent Tank 912 from overtopping by around 300 mts of unleaded petroleum which escaped on the morning of 11 December 2005;
iii) Allowing the pipeline to Tank 912 to discharge a greater quantity of petroleum than Tank 912 had the physical capacity to accept;
iv) Failing to divert the delivery of petroleum to a storage tank with adequate ullage before 4,971 cu.m of fuel had been delivered;
v) Failing properly to monitor the filling of Tank 912;
vi) Failing to observe or heed that the gauge for Tank 912 had become stuck at about 0300 on 11 December 2005;
vii) (without prejudice to the existence or institution of any system) failing to operate such system to ensure that Tank 912 on the night of 10/11 December was not overfilled and did not overtop.
Summary of the agreements relating to the joint venture
"2.9 Authority and Duties of Operator
2.9.1 Texaco and Petrofina shall exercise all voting and other powers of control available to them in relation to the Operator so as to procure (insofar as they are able by the exercise of such rights and powers) that the Operator shall undertake inter alia the following responsibilities in connection with the operation and maintenance of the Facilities:…"
"(a) the development and implementation within three calendar months after the date of this Agreement of an accounting procedure to regulate actions in relation to all expenditures made and all commitments incurred in connection with its [i.e. BOSL's] duties hereunder ("the Accounting Procedure");
(b) the development and implementation within three calendar months after the date of this Agreement of procedures and regulations to govern [BOSL's] operation and maintenance of the Facilities ("the Operating Regulations");
(c) the receipt from the Constructor of the Facilities and the subsequent operation and maintenance thereof in accordance with the Operating Regulations and the Accounting Procedure.
(d) the provision of all technical and advisory services required for the safe and efficient operation of the Facilities."
"to indemnify the other as to one half of any claim by or liability to (including any costs and expenses necessarily incurred in respect of such claim or liability) any party not being a party hereto, arising from the Joint Operations."
"As contemplated by Clause 3.1.5 of the JVA, the terms and conditions set forth in clause 2 of the JVA in relation to the development at Avonmouth will apply mutatis mutandis to the joint development and subsequent operation of the petroleum storage and distribution facilities … situate at Buncefield…"
"...undertake on behalf of Texaco and Petrofina the acceptance from the Constructor of the joint facilities to be developed by Texaco and Petrofina hereunder and the subsequent operation and maintenance thereof."
a) There were obligations on the part of Fina (i) to allow access to the terminal (Clause 4.1); (ii) to comply with health and safety legislation applicable to the terminal (Clause 4.2); (iii) to provide the contractor with (among other things) manuals, procedures and other technical information (Clause 4.3); and (iv) to pay BPA's charges (Clause 5).
b) BPA expressly assumed liability for third party claims in respect of personal injury or death, and damage to or loss of property arising from the 'default or negligent act or omission' of itself, its sub-contractors or its employees: Clause 6.4.
"4.2 - Operation of the terminal control system to monitor product receipt into tankage and dispatch to UKOP West London or terminal loading racks
- Tankage management
- Aviation fuel handling
- ….
- Liaison with UKOP Kingsbury control centre and HOSL terminal personnel…
- …
- Monitor work carried out within the Terminal that affects the equipment … in accordance with Fina operating and safety procedures
- Day to day liaison with the nominated HOSL management Representative"
"2. IMPLEMENTATION
2.1 The parties hereto shall, during the continuance of the JVA, exercise all voting rights and other powers of control available to them in relation to [HOSL], so as to procure (insofar as they are able by the exercise of such rights and powers) that [HOSL] shall fully comply with the provisions of the Accounting Procedure and the Operating Regulations."
a) Section I, para. 1.1(iii)(j) of the Accounting Procedure defined Fina as the Operator of the terminal. It distinguished between Fina's role in that capacity from its capacity as Participant.
b) Section I, para. 1.2 of the Accounting Procedure identified its purpose as being to ensure that Fina as Operator would be funded or reimbursed for its actual costs of operating the terminal. The procedural mechanism was a monthly cash call from Fina to the partners to fund an operating account in Fina's name at a level consistent with that necessary for 'Terminal Operations': para. 2. This was to be adjusted by a monthly cash reconciliation of actual expenditure by Fina: paras. 4 & 5.
c) Section II of the Accounting Procedure defined the categories of 'Chargeable Expenditure' which could be charged to the operating account and as regards staff costs dealt with the cost of its own employees (para. 2.1); the cost of employees "seconded" by Participants to work 'on Terminal Operations under the direct control of the Operator' (para. 2.2); the cost of agency staff engaged on a similar basis (para. 2.3); and subcontracted services provided by third parties (para. 3.1) or Participants (para. 3.3).
d) The combined effect of Clause 2.10.2 of the JVA and Section III of the Accounting Procedure was that Chargeable Expenditure on joint venture operations was to be funded by Participants in proportion to their usage of the terminal ('Class A Expenditure'), except for insurance premiums, rates, maintenance items above £10,000 and the Fina management fee, which were to be borne 50/50 ('Class B Expenditure').
e) The Operating Regulations were in Schedule 2. The schedule provided that words defined in the first schedule should have the same meaning. Thus Section A, para. 3.1 of the Operating Regulations provided:
"The Operator [Fina] shall recruit and employ such staff as the Board [of HOSL] shall from time to time consider necessary for the proper conduct of the Terminal Operations and each of the Participants shall (if so requested by the Board) second personnel to [HOSL] on a full time basis and otherwise on terms to be agreed by the Participant."
For this purpose, 'Terminal Operations' meant 'the operation and maintenance of the Terminal in accordance with the JVA, this Agreement and applicable law': Accounting Procedure, para. 1.1.iii(p).
f) Section B, para. 3.1 of the Operating Instructions made provision with regard to custody and control of the fuel stored at the terminal as follows:
"4 Custody and Control
4.1 ….[HOSL] shall have custody and control of the Products at the Terminal in accordance with these Operating Regulations or as the board may otherwise determine however….each Participant shall retain all risk in its Product delivered to the Terminal"
g) The Operating Regulations also included provisions relating to Liabilities and Insurance at Section C. These provisions conferred limited rights of indemnity on the Participants against HOSL and vice versa. They were replaced by slightly different provisions in a Novation Agreement in 1994 (see below).
a) The agreement recited the JVA provision for a jointly owned company, in the event HOSL, to operate and maintain the Buncefield terminal on the Participants' behalf.
b) Recital (G) read "[HOSL] and Fina now wish to establish the terms upon which Fina will provide [HOSL] with certain accounting and administrative support services".
c) In clause 1.1 "the terminal" was defined as "the petroleum storage and distribution facility operated and maintained by [HOSL] on behalf of Fina and Texaco".
d) Under Clause 3, Fina undertook to provide HOSL with 'general accounting and administrative services from time to time required by [HOSL] in connection with its operation of the Terminal'. For this purpose, Fina was to make available the services of its accounting, finance, insurance, legal and personnel departments, together with 'the use of such other of its departments as [HOSL] may from time to time require hereunder'; and was to provide 'engineering services of a routine nature.'
e) Clause 3.3 conferred a general authority on Fina to enter into contracts with third parties for the supply of services and equipment for the terminal.
f) Fina was to receive an indemnity in respect of its costs of providing the services (Clause 4.3) and to be entitled to a management fee of £35,000 a year, index-linked (Clause 5.1).
g) It was expressly recognised that in its capacity as the provider of these services, Fina would be responsible for the negligence of its employees. Clause 4.3 conferred on Fina a right of indemnity against HOSL for debts and liabilities incurred 'in the proper performance of its obligations hereunder'; and Clause 7.2 provided HOSL should keep Fina indemnified against liabilities arising out of the performance of its duties, 'without prejudice to any claims which [HOSL] may have against Fina in respect of any negligence or Wilful Misconduct".
"The Contractor shall provide one controller on a 24 hour shift basis whose prime duties will include the day to day operation of the automated control systems located within the HOSL Control Room….
The services shall…be undertaken in accordance with the operating manuals and procedures provided by [Fina] from time to time….
PURPOSE OF JOB
Day to day operation of the control systems located within the HOSL Control Room for the control of Fina-line, the HOSL tank farm and loading racks.
All duties to conform to procedures and work instructions in compliance with [Fina's] policy on Health, Safety and the Environment….
MAIN DUTIES
1.0 Fina-Line Control
1.1 Operation of the Fina-Line SCADA system for the remote/automatic operation of pipeline equipment in accordance with operating procedures and work instructions.
1.2 Compilation of run-sheets for charting of product movements through the pipeline.
1.3 Production and distribution of pumping programmes in accordance with schedule and off-take requirements.
1.4 Liaison with HOSL and LOR personnel for general operational matters and fault rectification…..
2.0 HOSL Terminal Operation
2.1 operation of the Motherwell tank gauging system to control and monitor product receipts into HOSL storage.
….
2.3 Operation of the Motherwell tank gauging system for general tankage management.
2.7 Liaison with Duty Supervisor to maintain adequate tank rotation and any identified movement amendments to rectify stock situations.
2.8 Liaison with Kingsbury Control Centre with respect to receipts from the UKOP system.
….
2.15 Control and operation of [Fina's] Aviation facilities via the Motherwell control system."
"In its capacity as manager of the Buncefield Terminal, Fina shall during the Buncefield Interim Period conduct all ordinary business in relation to the Buncefield Terminal in a proper and workmanlike manner and shall conduct operations in accordance with methods and practices customarily used in good and prudent oil storage practice with that degree of diligence and prudence reasonably and ordinarily exercised by experienced managers engaged in a similar activity under similar circumstances and conditions."
"a consolidating shareholders agreement relating to the Buncefield Terminal, substantially in the form of the Buncefield JVA but amended to reflect the existence of an operating company."
"Subject as hereinafter provided, all of the property and other assets acquired or held for use in connection with the operation and maintenance of the Buncefield Terminal in accordance with this Agreement (as supplemented/amended and/or novated) shall be owned and borne by [Chevron], Fina and Elf and their permitted assigns and successors ("the Participants") in proportion to their undivided participating interests ("Participating Interests") as follows:-
[Chevron] 40
Fina 40
Elf 20"
"3. Subject as expressly provided in this Novation Agreement all other provisions of the Joint Venture Agreement shall remain in full force and effect and binding on the parties thereto, insofar as the same are in force and effect and binding on those parties immediately prior to the Effective Date."
"[HOSL] shall recruit and employ such staff as the [HOSL Board] shall from time to time consider necessary for the proper conduct of the Terminal Operations and each of the Participants shall (if so requested by the [HOSL Board]) second personnel to [HOSL] on a full time basis and otherwise on terms to be agreed by the [HOSL Board]." Section 1 para 2.1
"1.1 Each of the Participants shall indemnify, hold harmless and defend each other from and against any and all liabilities, claims, demands, proceedings, damages, losses, costs, charges and expenses whatsoever arising directly or indirectly out of or as a consequence of the death or illness of or injury to any employee, servant or agent of such Participant or the loss of or damage to any equipment or property…of such Participant or any of its employees, servants or agents, whether or not resulting from or contributed to by any negligence or default on the part of [HOSL] or any of the other Participants or any of their employees, servants or agents…
1.2 Save as otherwise expressly provided herein, [HOSL] shall indemnify and hold harmless the Participants from and against any and all claims by third parties in respect of the injury to …any person or the damage to or loss or destruction of any property which may arise out of or in the course of or by reason of the Terminal Operations, save and except if and to the extent that [HOSL] is not indemnified in respect of any such personal injury, death or illness or damage to or loss or destruction of property by insurance taken out by [HOSL] pursuant to paragraph 2.1.2 of these Operating Regulations, then each of the Participants, to the extent of its Participating Interest, shall indemnify and hold harmless [HOSL] from and against any such claims by third parties (and from and against any and all actions, proceedings, liabilities, losses, damages, costs, charges and expenses whatsoever in respect thereof or in relation thereto)."
Documentary evidence
Total Witnesses
a) Mike Linley who was a director of HOSL from April 1998 to March 2003. During that period he was responsible, within Fina / Total's Supply Department, for Terminal Operations.
b) Brian Parsons who was General Manager of the HOSL East and West sites at the Buncefield terminal from October 1989 to February 1994. He was also General Manager of the Fina-line during that period.
c) Robert White who was General Manager of the HOSL sites and the Fina-line in succession to Brian Parsons from April 1994 to February 2008.
d) Jonathan Tonks who was Operations Manager of the HOSL sites and the Fina-line from February 2001 to August 2005. His line manager was Mr. White.
e) Keith Letchford who was Fina / Total's UK Group Insurance Manager from 1983 to 2001.
f) Robert McNiff who was Insurance Manager from 2002.
Chevron witnesses
a) Brian Spittlehouse who was Manager of UK Operations from 1988 to 1995 and a director of HOSL from 1989 to 1995.
b) Dennis Morgan who was Terminal Network Development Manager and a director of HOSL from November 1995 to April 1999.
c) Simon Humphries who was General Manager Supply and Distribution and a director of HOSL from July 1992 to July 1995.
d) David Lund who was a director of HOSL from July 1999 to July 2005. During that period he was Manager Terminals becoming General Manager Logistics from September 2005.
e) Nicholas Williamson who was a director of HOSL from February 1995 to April 1999.
f) John Holt who was a director of HOSL from July 1999 to March 2001.
g) Bryan Workman who was a director of HOSL from June 2001 to November 2005.
h) Leonard Magrill who was Director and General Manager Marketing and Planning from 1996 to 1997 and a director of HOSL from July 1984 to January 1992.
This list was in short made up of every single Chevron director of HOSL from 1989 to the eve of the explosion.
Total Statements
a) Sidney Sinclair who was Operations Manager of the HOSL sites and the Fina-line from February 1992 to April 2001 handing over to Jonathan Tonks. It was accepted that his family commitments made it impossible for him to be called and that his statement, albeit not agreed, should be admitted subject to weight.
b) Steve Lewis who was Terminal and Pipeline Operations Co-ordinator at Buncefield from 2001 until the explosion. He was unwell and his statement was admitted on the same terms.
c) Siobhan Fanning who was the Supply Operator responsible for the scheduling and planning of the pipeline deliveries to Buncefield. Her evidence was agreed.
Other witness statements
a) Mark Forde who was the Terminal Supervisor on duty (together with Graham Nash as Pipeline Supervisor) at the time of the explosion.
b) Nigel Beedham who was Total's Terminal Operations Manager and a director of HOSL in succession to Mike Linley from March 2003 to January 2007.
c) Stephen Ollerhead who was Director of Logistics and a director of HOSL from 1997 until October 2003. He moved then to Paris as Logistics Co-ordinator of Marketing Europe. In December 2005 he was appointed to lead Total's Accident Investigation Team.
d) Lynne Donaldson who, in succession to Mr Ollerhead, was Director of Logistics from October 2003 to May 2007 and a director of HOSL throughout the same period to the present day.
Indeed Mr Forde, Mr Ollerhead and Miss Donaldson were actually included in the witness timetable formulated by Total shortly before the trial began.
a) Not a single supervisor with experience of operating practices in the HOSL control room was called. It was explained that Mr Nash was not called as he was not regarded by Total as a reliable witness. Such was not suggested as regards Mr Forde who had been trained in terminal operations at Buncefield in the early 1990s in preparation for the introduction of the Fina-line and had been a supervisor since 1993 nor as regards other supervisors from whom statements were taken and tendered, most of whom had given evidence to the HSE or the Total investigation or both. The latter included David Martin a technician from 1994 to 2005 and a supervisor from November 2005 but trained in post from July 2005 and Philip Martin a supervisor from 1992 to 2002 (later to take over from Mr Tonks in August 2005). Another notable absentee was Mr Doran who handed over to Mr Nash and Mr Forde.
b) Only one Total director of HOSL (Mr Linley) was called. Yet he left that post some 2 ½ years before the explosion. This was despite the fact that statements had been taken from Philip Jordan a director from 1993 to 1996, Stephen Ollerhead, a director from 1997 to 2003, Nigel Beedham, a director from 2003 onwards and Richard Jones, a director from 2001 onwards. The other Total directors in the overall period included Peter Johnson 1989 to 1993, John Bond 1989 to 1993, Aidan Dwan 1993 to 1996 and Jonathan Bond 1997 to 1998 (although some or all of them may not have been available).
Expert evidence
a) Data analysis. The focus here was on the information and database tables stored in the Motherwell Automatic Tank Gauging System computer drives. Chevron called Dr Harri Kytomaa a specialist in mechanical engineering with particular experience in the investigation of fires and explosions. He had held meetings in September 2008 with Mr Samuel Sudler, a Senior Project Engineer retained by Total, with particular experience in electronic control analysis. A joint memorandum was prepared following those meetings.
b) Operational negligence. Chevron relied upon the evidence of Mr Raymond Rich, the Logistics Support Operation Manager at the Aldermaston Petroleum Storage depot. Total relied upon the evidence of Mr Robin Heels, a consultant safety engineer with Vectra Group Ltd. Following meetings in July and August 2008, a joint memorandum was prepared in October 2008.
c) Accountancy. Total called Mr Martin Hall, a chartered accountant, who had examined Total's accounting records so as to determine whether any premiums incurred in effecting the Total group insurance programme had been charged to the joint venture.
The documentary history of the JVA
"11. It was agreed that Fina would operate and engineer HOSL 89 and provide secretarial service."
"5. It was agreed that Petrofina would propose the basis for the management fee…largely based on those already agreed for BOSL."
The question of staffing was postponed until the next meeting on 11 July 1989 where the minutes record:
"8…No decision had yet been taken as to whether the staff would be seconded by the participants or employed by HOSL."
"The principal activity of the company became [trading only commencing post balance sheet] the operation of joint venture petroleum product storage facilities."
"Manning levels
Mr Parsons tabled an amended version of the paper outlining a proposal on the manning at Buncefield in 1991.
The integration of terminal and pipeline manpower was agreed to be the most economic philosophy with ground fuels throughput being equitably shared between Petrofina and Texaco. Avtur [aviation fuel] would be solely for Petrofina's account as would be Fina-line costs.
The proposition was on the basis of a management team comprising a Fina nominated general manager, two assistant managers and an engineer - the latter predominantly on pipeline work but contributing also to automation needs at the Terminal. The management team would be made up of secondees.
There would be ten shift controllers provided on a contractual basis by BPA the six technicians and two clerical assistants would be directly employed by HOSL but could be drawn from Petrofina and Texaco staff."
"He said that with the exception of Mr Perrin who would be on secondment from Texaco and the BPA shift controllers Petrofina would wish to employ all the other staff. To effect the transfer of suitable personnel to Petrofina, Texaco would therefore first need to make them redundant."
It was Chevron's case that this statement of policy, taken with the nomination of the general manager, demonstrated Fina's determination to undertake the operation of the site. Total asserted that the position remained consistent with "secondment" of Fina staff to HOSL.
"6 JOINT VENTURE STRUCTURE
Mr Johnson reported that Fina's Legal Department had raised again the desirability of having a joint venture rather than corporate vehicle for operations at Buncefield.
It was agreed that there were good reasons for a corporate operation, not least the perceived independence from the two shareholders, but that a final decision should be taken following consideration of written proposals from Fina's Legal Department.
7 OPERATING BUDGET 1991
The Operating Budget, previously circulated, was accepted with the exception of the manning structure appointments where it was agreed that costs relating to Operations Managers (pipeline and Terminal) should be merely split 50/50 rather than subdivided further."
"I enclose herewith the long awaited Agreement related to the running of the Buncefield Terminal for your comments.
As discussed at the last HOSL Board meeting this Agreement is based on the upstream Joint Venture Operating Agreement and appoints Fina as Operator of the two joint venture participants, Fina and Texaco, removing the need for a joint venture company. This preferred structure has also been discussed by David Codd and Malcolm Webb and I understand that no fundamental problems with this proposed structure were foreseen.
Fina's preference for this joint venture arrangement is based on the cost savings involved and a wish to simplify the structure."
"As I have explained to you Fina wished to remove the limited company, HOSL, from the joint venture arrangements at Buncefield as part of its management strategy, introduced by its Chief Executive, to remove all unnecessary companies from its corporate structure."
"I understand that the main line of argument against our proposals were that Texaco's management wished the Buncefield agreement to match the commercial terms in force at Avonmouth. Our document did that. Commercially the two are word for word the same - the only difference being the alteration of legal structure which required that, for example, where previously the term Board has been used, it was necessary to refer to the Management Committee. The basic commercial reflection of the Avonmouth agreement would have been quite apparent had our proposed documentation been reviewed."
"At no point has Texaco actually set out what purpose it believes the joint venture company, HOSL, served nor why it felt it had to remain. However, notwithstanding the above, which I set out to put the record straight, I am resigned to the fact Texaco will not consider our proposals and therefore revert to the former structure.
Accordingly please find enclosed for your comments a further draft Operating Agreement which provides for the continuance of HOSL and a draft management agreement which follow the format of the BOSL agreements."
"1.12 Hertfordshire Oil Storage Ltd will be the operator of the Terminal on behalf of Texaco and Fina in accordance with their Operating and Safety Manual and with statutory regulations. Organograms of the terminal management structure for operations and emergencies are included in the appendices."
Nonetheless confusingly the attached organogram placed the General Manager at HOSL under the line management of Fina's Distribution Manager at Epsom.
"Responsibility for the joint venture is vested in the HOSL Board consisting of four directors, two from each company. Management Services together with other central office support services are provided by Fina PLC."
"There still appears to be some confusion on the part of HSE on the accountability of joint venture operations using seconded and contract staff.
I explained the set-up at HOSL, i.e., that whilst nobody is actually on the HOSL payroll as such, their responsibilities during secondment are directly to HOSL and report through HOSL management to the HOSL board."
"Fina PLC is the management company in the Joint Venture Agreement and runs HOSL with Fina plc and contract staff on behalf of Texaco Ltd and Fina plc and is responsible for the stock and financial operations of the terminal. HOSL is also responsible for Fina plc activities associated with operation and receipt of product from the Fina-line and the storage of aviation fuel for Fina plc only."
"HOSL relationship with Fina and Texaco
Under the terms of the Joint Venture Agreement, Fina plc has been nominated as the Managing Company with responsibility for providing the following support and services to HOSL,
- Engineering
- Accounting
- Personnel
- Administration - Purchasing Legal etc
- EHS
It was not clear during the Audit that the proper channels of communication are used when Texaco and Fina contact HOSL.
It is recommended that the relationship between HOSL and Fina/Texaco is clarified by the HOSL Board of Directors. In the case of Fina, points of contact at a working level will be evident when the organisation chart and job descriptions are published. Texaco should follow the proper channels when dealing with an independent Joint Venture Company and ensure that the General Manager is kept fully informed."
Notably, as appears from this document, Fina thus regarded "engineering" and "environment, health and safety" matters as within their purview as the "managing company".
"5. PERSONNEL
Mr Parsons reported that BPA had been given notice that their contract for the supply of shift supervisors and controllers would expire at end January 1993. Fina were currently interviewing five supervisors who would be responsible for terminal operations and pipeline activities. The question of continuing to employ the five contracted controllers was under consideration."
"Fina plc is the management company in the Joint Venture Agreement. HOSL runs with own and contract staff on behalf of Texaco Ltd and Fina plc and is responsible for the stock and financial operations of the terminal. HOSL is also responsible for Fina plc activities associated with operation and receipt of product from the Fina-line and the storage of aviation fuel for Fina plc only. HOSL also provides certain services to the Fina laboratory built on HOSL land. Accounting procedures have been set up to allocate costs associated with HOSL operations and also the Fina-line, aviation fuel and Laboratory costs."
"ORGANISATION AND RESPONSIBILITIES
FINA-LINE is part of the integrated management of HOSL. Fina Plc is the managing company for HOSL and staff are employed by Fina and seconded to HOSL, except for controllers (and supervisors until 31/01/93) who are sub-contracted from BPA. HOSL was audited on 7/9 April 1992 (report HSEQ 92/5 issued July 1992). The Audit made a number of recommendations concerning the organisation, reporting responsibilities, interfaces with other companies and operating procedures…...
The attached organisation chart for the integrated management of the HOSL terminal and FINA-LINE is planned to come into effect on 1st February 1993. Draft job descriptions have been produced for the positions above in the organisation chart."
"Control Room
As a result of the manpower changes outlined in the General Manager's report, a proposal was made to rearrange the Control Room to facilitate that Terminal and FINA-LINE controls being in the hands of the one Controller. This will enable the Supervisor to be free to attend to matters specifically requiring his attention out on the Terminal unless two persons are specifically needed in the Control Room at the time. The engineers would arrange a detailed estimate of the costs which would be split on a 50:50 basis with FINA-LINE."
This sort of material was relied upon by Chevron as demonstrating the difficulty of separating out work in the control room as regards the Fina-line from that associated with the HOSL tankage. Total argued that there was no real difficulty: it was simply an accounting exercise.
"Fina PLC is currently the Management Company supporting HOSL's Management in the following areas:
Personnel
Engineering
Legal/Secretarial
Accounting/Purchasing
Environment, Health & Safety
Total Quality".
As in the April 1992 Environmental Audit these tasks, as emphasised by Chevron, appear to extend somewhat beyond those specified in the Management Agreement.
"General Manager has overall responsibility for all matters relating to Health and Safety at Work and the Protection of the Environment, and to ensure the satisfactory implementation of this Policy. He is responsible for ensuring that formal training of personnel is provided.
In carrying out these duties, he will be supported by specialist staff in Fina plc including the Engineering Safety Officer and Manager, Environment and Safety Audit."
"The 1988 Joint Venture Agreement (with new page 16) is approved save that there is a typo. Clause 6.1.2 appears twice in the document. The second clause 6.1.2 should of course be clause 6.1.3!
As an aside, I note that the new Accounting Procedure and Operating Regulations as referred to in the new Buncefield Joint Venture Agreement are to be annexed to the 1988 Joint Venture Novation Agreement. It seems to me that they will need to be doctored slightly to reflect the continued existence of HOSL. Alternatively, paragraph (f) of the Novation Agreement needs to be reworded slightly to make it clear that the new Accounting Procedure and Operating Regulations are to be read against the background of HOSL being in existence."
"OPERATIONS REPORT
The Operations Report January to June 1995 was considered by the Board.
It was noted that 3 ex-BPA controllers had joined the Company as duty supervisors and had undergone extensive training on terminal operations and, following a retirement, a new technician with electrical qualifications had been appointed. There are now 8 duty supervisors and 7 technicians working for the Company. The senior supervisor has been replaced by an operations co-ordinator working 50% of the time for HOSL."
"(a) Possible Liquidation
Mr Mann said that a meeting had been held in November to discuss the proposed joint venture agreement. Since that meeting Fina has been reassessing the need to liquidate the Company which will prove to be quite complicated. If it was decided not to liquidate, a new Joint Venture Agreement with amendments would be adopted in any case. It was agreed that Fina should recirculate the JVA with a note explaining its thinking behind retaining the limited company status. Texaco and Elf will then discuss the position with their lawyers."
In fact by the time of the next meeting on 19 July 1996, it had been decided to stick with HOSL.
"Petrofina has decided to attempt accreditation under the International Safety Rating Scheme (ISRS) and will commence in the UK with an audit of HOSL in July 1997."
This was a further example on Chevron's case of the enforcement of Fina's standards of safety across the board for all terminals in which Fina had an active managerial interest, introduced without prior consultation with the HOSL board.
"The new Joint Venture Agreement is still in the drafting stage. It was questioned whether the original Agreement was still valid and pertinent to the Partners current operations and liabilities. A decision with regard to the need for a new Agreement will be taken prior to the next meeting after legal opinion has been sought by Fina."
"Whilst there is a legal framework in place for HOSL between the parties, this may not now strictly reflect the agreed evolution of operating practices at the practical level of the terminal."
It was recommended that each party should review the documentation to identify "necessary revisions to the JVA for the future."[13]
"4. When the tank is approx 95% full, the ATG activated an alarm which signals to the Supervisor the need to switch to another tank if the batch receipt has not been completed."
"Further to our detailed review of Fina plc's Terminal Operations with respect to Health & Safety Management, it has been decided that a training programme be compiled for all those staff who work within the Terminal or who have line management responsibilities for Terminal Operations within a head office environment…
Fina will advise its Joint Venture Partner of the costs associated with delivering the training programme and seek approval to proceed without delay."
"1.1.4 The Companies Senior Managers conduct regular safety tours.
The Senior Manager on site conducts a safety tour on a monthly basis, this is supported by further tours which are carried out by the Managing Director, General Manager and Operations Manager throughout the year at prescribed periods. …
The Senior Manager on site attends at least half of all Safety Meetings….
1.1.6 The objectives are set annually by the Managing Company [Fina] and are specific to the location. These are measurable, time bounded and will often relate to particular elements contained within the Fina Safety Management System.
1.2 LOSS CONTROL CO-ORDINATOR
The Loss Control Co-ordinator is responsible for the development, co-ordination, administration and auditing of the Fina plc managed Oil Terminal Safety and Health Loss Control System and will advise the General Manager on Safety and Health Loss Control.
The Loss Control Co-ordinator will ensure that the safety and health loss control system and training are developed, implementation strategies identified and that appropriate system auditing is conducted to measure and evaluate the quality and compliance of the system.
1.2.1 The Managing Companies Operations and Safety Engineer [Mr Coalwood] has been designated Loss Control Co-ordinator….
4.0 TASK ANALYSIS
Fina plc recognises the need to identify the most critical tasks carried out by its employees and contractors. Critical tasks are those relatively few tasks which have the highest potential for loss (safety, health, environment, quality, fire etc) if they are done incorrectly. All staff carrying out task analysis and risk assessment will have received appropriate training.
4.1.2 It was decided that any task which attracted a high rating required immediate attention in the form of a formal task procedure and work procedures or practices could cover those attracting medium or low ratings.
4.1.3 Critical tasks, procedures and practices will be reviewed as part of the accident investigation procedure … and in any case every 18 months."
There followed a table identifying that the Terminal Manager was responsible for appropriate task analysis.
"It is recommended that we initiate immediately the drafting of MAPP documents for each COMAH site identified above but the top priority is to complete Safety Management System that has been developed under ISSSRS for the ex-Fina terminal and in particular the risk assessments for major hazards under the existing assessment system. The next priority must be to develop a common Safety Management System for all TotalFina terminals. "
"As an employer, TotalFina GB has a Duty of Care and is legally obliged to provide a safe working environment and to ensure that all our activities are carried out in a safe manner. This is achieved by assessing the risks in carrying out our activities, taking action to reduce the level of risk as far as is reasonably practicable, putting in place systems of work where necessary and training our employees. These principles are embodied in what is commonly called a Safety Management System (SMS) and the Directors have set an objective of ensuring that an SMS is in place in all operational areas of Total during 2000.
A great deal of effort has been put by all of us within "Operations" throughout 1999 to ensure that our revised SMS which we refer to as "Safety & Health Loss Control Manual", is adopted at HOSL, Sunderland and WOSL. We have set ourselves a target of having a common SMS for the terminal that we operate by the end of 2000."
"1. the name and address of the operator;
2. the address of the establishment in concern;
3. the name or position of the person in charge of the establishment;… ".
1. Total Fina, Watford, Hertfordshire
2. HOSL, Buncefield Terminal
3. Mr White
"… we are pleased to confirm details of your appointment with Totalfina…With effect from 1st July 2000 you will be employed as Duty Supervisor HOSL and be based at H.O.S.L. This position will report to S. Sinclair, Operations Manager, HOSL."[15]
"Control room staff to be reminded of the need to check tank ullages at least once every shift and log this check (possibly using the daily log sheet). Can you send me a copy of whatever instruction you send out?"
"In January 1998, PetroFina adopted the International Small Site Safety Rating System (ex Det Norske Veritas - "DNV") as the common approach to the Health and Safety Management at Terminals.
Fina plc seconded one of their Operations Engineers to implement the protocol and organise the appropriate training. Work began in February 1998 with the aim of external accreditation for the Health and Safety Systems of the Fina plc operated Terminals.
In April 1999, TOTALFINA is formed. The new Group reviews its approach to Health and Safety Management System and chooses ISSSRS as the "Group Standard"."
"1. Storage Tank No 912 -this tank contains gasoline which is the substance presenting the greatest flammable hazard. This tank is as large as any other storing gasoline and is located in a central position between two similar vessels which also contain motor spirit. Should this tank be on fire it would affect both the adjacent vessels within the bund thus providing maximum impact in terms of risk.
Further to this the tank is located nearest to our western boundary adjoining both Buncefield Lane and the Industrial Estate. The bund containing this tank is also the nearest to Cherry Trees Lane. This lane can be quite busy during rush hour periods of day with traffic accessing adjacent work sites. Should a catastrophic tank failure occur then motor spirit could be released into both Cherry Trees Lane and Buncefield Lane."
"Operational procedures.
There are various types of operating procedure used at the terminal. All identified critical tasks have either a task practise or a task procedure. Further to these there are standard operating procedures. Staff consultation, information, instruction and training are all given as part of the adoption of any of these procedures. It is a requirement that the staff member signs documentation to demonstrate when he/she is satisfied and has obtained a good level of understanding of the procedures.
…. The task practises and procedures have been based, wherever possible, on recognised published best practise.
…
Operating procedures can only be generated by the Terminal Manager in conjunction with the Senior Supervisor and Safety Adviser. ….See the attached organogram which details the terminal management and safety structure.
Procedures are required to be re-examined at any stage should there be changes to the plant, equipment, staff and in any event at intervals not exceeding eighteen months. Critical task practises and procedures are required as part of the SMS, to be discussed with operators and technicians on annual basis to ensure their continuing relevance and validity."
"As most of you know we experienced a Near Miss situation last week when Tank 903 was almost overtopped during a filling from UKOP South.
This resulted in the shearing of one of the foam pourers and damage to others.
However, more serious is the issue of potential major accident which could have occurred had the tanks been belatedly switched.
Following an investigation, involving members of Control Room Staff, we are urgently putting in place measures to ensure that this does not recur and Jon will be circulating some details in the Incident Report to be published soon.
However, in the interim, we will need to exercise extreme care when receiving off any pipeline and, during this period at least, we must insist on regular checks via the tank gauging system when receiving into HOSL tanks.
Please ensure that this is adhered to strictly and details documented on the log.
We will keep you updated as to progress on changes to procedure in order to avoid a recurrence."
Quite what changes in procedure or other remedial measures were put in place remains obscure.
"Carries responsibility of managing 2.5 million tonne/pa terminal and 2 million tonne/pa pipeline in addition to the management responsibilities of the Colnbrook jet handling facility…
Responsibility for 13 Total staff and 5 contract personnel.
….
Ensuring that the terminal and pipelines are operated in accordance with legislation, company requirements and industry best practice …
Position is field based at HOSL with line reporting to Term. Ops. Manager… Liaison and day to day contact with most departments in HO [Head Office] …
Accountable to the partner Companies notably Total in the management role…"
"Current batch 562A: PU50:915 (connected from 912)
NOYS [not on your shift]
BPA 912 open for TX7123"
Vicarious liability – the law
a) The question was not determined by the terms of the agreement between the harbour authority and the stevedores;
b) The harbour authority had not discharged the heavy burden of proof so as to shift onto the stevedores responsibility for the negligence of the craneman given that the craneman was exercising his discretion as to the manner of his driving.
"The expressions used in any individual case must always be considered in regard to the subject matter under discussion but amongst the many tests suggested I think that the most satisfactory, by which to ascertain who is the employer at any particular time, is to ask who is entitled to tell the employee the way in which he is to do the work upon which he is engaged. If someone other than his general employer is authorized to do this he will, as a rule, be the person liable for the employee's negligence. But it is not enough that the task to be performed should be under his control, he must also control the method of performing it. It is true that in most cases no orders as to how a job should be done are given or required: the man is left to do his own work in his own way. But the ultimate question is not what specific orders, or whether any specific orders, were given but who is entitled to give the orders as to how the work should be done."
"Servants cannot be transferred from one service to another without their consent and even where consent may be implied there will always remain a question as to the extent and effect of the transfer."
"7. The opinions make clear that decisions of this kind depend on the particular facts and that many factors may bear on the result (see Lord Porter at p 17). In assessing the facts, certain considerations will or may be relevant. These include: (a) the burden of showing that responsibility does not remain with the general employer, is on the general employer and is a heavy one (Viscount Simon at p 10, Lord Macmillan at p 13, Lord Uthwatt at p 21). (b) By whom is the negligent employee engaged? Who pays him? Who has power to dismiss him (Lord Simon at p 10)? In the present case the answer to these questions is the general employer, the third defendants. (c) Who has the immediate direction and control of the relevant work (Lord Simon at p 10, Lord Porter at p 16)? Who is entitled to tell the employee the way in which he is to do the work upon which he is engaged (Lord Porter at p 16, Lord Uthwatt at p 23: "The proper test is whether or not the hirer had authority to control the manner of execution of the act in question. Given the existence of that authority its exercise or non-exercise on the occasion of the doing the act is irrelevant.") (d) The inquiry should concentrate on the relevant negligent act, and then ask whose responsibility it was to prevent it (Lord Simon at pp 10, 11). In the Mersey Docks case, the stevedores had no responsibility for the way in which the crane driver drove his crane, and it was this which caused the accident (Lord Simon at p 12, Lord Macmillan at p 13, Lord Simonds at p 18). The ultimate question may be, not what specific orders or whether any specific orders were given, but who is entitled to give the orders as to how the work should be done (Lord Porter at p 17). (e) A transfer of services can only be effected with the employee's consent (Lord Porter at p 15, Lord Uthwatt at p 21). (f) Responsibility should lie with the master in whose act some degree of fault, though remote, may be found (Lord Simonds at p 18)."
"78 The remaining question is to attempt to define the circumstances in which the liability should be dual. It is possible that where the right to control the method of performance of the employee's duties lies solely on the one side or the other, then the responsibility similarly lies on the same side. That reflects the significance of Lord Esher MR's doctrine of entire and absolute control. If so, then it will only be where the right of control is shared that vicarious liability can be dual. I would agree that the balance of authority is in favour of this solution. On this basis, I agree with May LJ's analysis of the facts in this case as demonstrating a situation of shared control. I would go further and say that it is a situation of shared control where it is just for both employers to share a dual vicarious liability. The relevant employee, Darren, was both part of the temporary employer's team, under the supervision of Mr Horsley, and part of the general employer's small hired squad, under the supervision of its Mr Megson."
"79 However, I am a little sceptical that the doctrine of dual vicarious liability is to be wholly equated with the question of control. I can see that, where the assumption is that liability has to fall wholly and solely on the one side or the other, then a test of sole right of control has force to it. Even the Mersey Docks case [1947] AC 1, however, does not make the control test wholly determinative. Once, however, a doctrine of dual responsibility becomes possible, I am less clear that either the existence of sole right of control or the existence of something less than entire and absolute control necessarily either excludes or respectively invokes the doctrine. Even in the establishment of a formal employer/employee relationship, the right of control has not retained the critical significance it once did. I would prefer to say that I anticipate that subsequent cases may, in various factual circumstances, refine the circumstances in which dual vicarious liability may be imposed. I would hazard, however, the view that what one is looking for is a situation where the employee in question, at any rate for relevant purposes, is so much a part of the work, business or organisation of both employers that it is just to make both employers answer for his negligence…..
80 One is looking therefore for practical and structural considerations. Is the employee, in context, still recognisable as the employee of his general employer and, in addition, to be treated as though he was the employee of the temporary employer as well? Thus in the Mersey Docks situation, it is tempting to think that liability will not be shared: the employee is used, for a limited time, in his general employer's own sphere of operations, operating his general employer's crane, exercising his own discretion as a crane driver. Even if the right of control were to some extent shared, as in practice it is almost bound to be, one would hesitate to say that it is a case for dual vicarious liability. One could contrast the situation where the employee is contracted-out labour: he is selected and possibly trained by his general employer, hired out by that employer as an integral part of his business, but employed at the temporary employer's site or his customer's site, using the temporary employer's equipment, and subject to the temporary employer's directions. In such a situation, responsibility is likely to be shared. A third situation, where an employee is seconded for a substantial period of time to the temporary employer, to perform a role embedded in that employer's organisation, is likely to result in the sole responsibility of that employer."
"49. All of the members of the House of Lords referred to the authority to control the crane driver. That authority is conferred by the contract of employment. It is only if the agreement between the general employer and the hirer is to be taken, in all the circumstances, as conferring on the hirer the power to control the manner of execution of the work that a transfer of vicarious liability can occur. Indeed, in our judgment no such transfer can take place without the consent of the employee, although of course that may be inferred: see the decision of the House of Lords in Nokes v Doncaster Amalgamated Colliery [1940] AC 1014 . As Bridge J observed in Smith and another v Blandford Gee Cementation Co Ltd [1970] 3 AER 154 at 160 in relation to a finding by a tribunal that a contract of services had been transferred:
"To my mind, it runs counter to a fundamental principle that a man's contractual position, particularly in such a vital matter as the identity of the master whom he is to serve, shall be crucially affected by an agreement between two other parties, the terms of which are never communicated to him."
. …..
59 We accept OT's submission that the judge failed to take sufficiently into account that, as Lord Simon said in Mersey Docks and Harbour Board, the burden on a party seeking to show a transfer or assumption of liability to or by the hirer of an employee is a heavy one. This does not mean that the burden of proving the relevant facts is any different from that in any other civil trial. It emphasises that exceptional facts are required for a contractor to be vicariously liable for the negligence of his sub-contractor. Those facts were not present in this case."
a) Who engaged and paid Mr Nash? Who could dismiss him?
b) How long had he worked at the HOSL site?
c) Whose equipment was he using?
d) What role did the off-site Total staff have in regard to giving instructions to the "site staff"?
Vicarious liability - the agreements
a) the terms of any agreement between Total and HOSL are not determinative (let alone one only between Total and Chevron);
b) there would remain an issue as to how HOSL set about conducting its operating obligations and as to whether, in particular, HOSL delegated its tasks to Total so that Mr White continued in fact to work under the direction of his employer Total rather than the HOSL board.
Joint Venture Agreements
a) that it was inconsistent with HOSL having custody and control of the product and undertaking the other responsibilities accorded to it.
b) that it merely reflected discussions about a proposal to dissolve HOSL; an idea which in the event was abandoned.
c) that it was inconsistent with the limited scope of the Management Agreement between Total and HOSL.
a) they fell within the generic provisions of clause 3.1
b) the scope of the Management Agreement was expanded by tacit consent
c) there was an implied parallel agreement
d) the services were ex-contractual and provided either gratuitously or on the basis of quantum meruit.
"Notwithstanding the foregoing, for the purpose of all liabilities, claims, actions, demands and proceedings arising out of or in connection with this Agreement (i) the Company agrees to assume itself the entire obligations, responsibilities and liabilities of itself, HOSL and each of the HOSL Participants; and (ii) the Contractor shall look only to the Company for the due performance of the obligations, responsibilities and liabilities assumed by the Company under this Agreement and nothing herein contained shall impose any liability upon or entitle the Contractor to make or bring any action, claim or proceedings on or against HOSL or any of the HOSL participants."
"The Company shall provide the Contractor with all manuals, drawings, procedures and other technical information relating to the HOSL Terminal and the equipment thereon which are necessary in accordance with good oil industry practice for the Contractor to perform the services."
"Having broadly adapted the Management Agreement used for BOSL there is a need to ensure Petrofina, as the management Company, reserves the right to engage third parties as necessary to enable it to discharge its operating responsibilities to HOSL. Sub-clause 3.3.2 of the MA covers this. Sub-clause 4.1 amplifies it specifically in the context of sharing the HOSL services and costs with Fina- line."
a) the concept that a long period of operation by HOSL should be followed by a very short intermission of operation by Fina would be wholly implausible and impractical.
b) indeed the proposal to liquidate HOSL only makes sense against the background of HOSL having no practical value from the perspective of day to day operations and, either directly or indirectly, Fina should continue to undertake them.
c) put another way, the appointment of Fina as "designated manager" does not on the face of it reflect a change in status but simply the removal of the corporate umbrella under which the management and operational activities took place.
"Such Accounting Procedure and Operating Regulations are to be interpreted as if references to the Manager are to HOSL and references to the Management Committee are to the HOSL Board."
"The Manager shall recruit and employ such staff as the Management Committee shall from time to time consider necessary for the proper conduct of the Terminal Operations and each of the Participants shall (if so requested by the Management Committee) second personnel to the Manager on a full time basis and otherwise on terms to be agreed by the Management Committee."
a) "secondment" is a somewhat ambiguous concept: it can encompass a temporary transfer of employment but it can equally reflect simply a temporary transfer of role or of place of work.
b) there were certainly no secondees within the meaning of the paragraph since there was no request by the HOSL board.
c) all staff remained employees of Fina: HOSL never employed anyone.
d) it was never suggested that the HOSL board was responsible for the activities of off-site employees of Fina insofar as their activities impinged on the operation of the Buncefield site.
Summary of the JVA Agreements
a) The parties intended that HOSL should have the same status as BOSL;
b) HOSL was simply the joint venture corporate vehicle for Buncefield;
c) The designation of HOSL as operator was not inconsistent with delegation of operational functions to Fina under the terms of the Supplemental Operating Agreement and/or the Management Agreement.
d) For three years Total had been the operator under the terms of the Supplemental Operating Agreement.
e) The option of liquidating HOSL does not appear to have been intended by the parties to impact on front line operational responsibilities one way or the other.[24]
f) In short, the agreements favour the conclusion that Fina operated the site but are not conclusive one way or the other: the determining factor, certainly from the perspective of deciding who was vicariously liable for Mr Nash, is an analysis of the factual state of affairs.
Vicarious liability – the facts
The origin of the joint venture
a) I found Mr Spittlehouse to be a convincing witness, refreshingly clear and confident. His recollection and understanding was supported by the evidence of Mr Lund and Mr Magrill. No evidence was called to challenge it.
b) It is supported by the fact that Texaco/Chevron regarded itself as the "operator" of BOSL. This was a view that seems to have been shared by Total.
c) It also has some support from the minute of the meeting which took place on 21 February 1989[25] only weeks after Fina had exercised the option for the HOSL site contained in clause 3 of the JVA. The minute stated "it was agreed that Fina would operate and engineer HOSL 89[26] and provide secretarial service."
d) Indeed any request by Fina in this respect is entirely consistent with the fact that the catalyst for the Buncefield joint venture was the construction of the Fina pipeline which was an expensive facility that was to remain outside the joint venture[27].
HOSL management
a) that, whilst there was limited and very intermittent contact between board members and site staff between board meetings,[31] the board was not realistically in a position to conduct day to day direction of the terminal operations.
b) that the primary purpose of the corporate structure of the joint venture was to provide a channel for funding capital expenditure and operating costs.
c) that the primary purpose of the board was to furnish a forum for discussion of high level topics of mutual interest and in particular decisions relating to the budget.
"But my point is that you cannot simply responsibly manage a terminal, particularly one which is storing gasoline, which is hazardous, by having a site manager taking all the decisions that are necessary to manage that site. Some of those decisions, in my opinion, if it is to be operated responsibly, and efficiently come to that, since the information can be shared across different terminals, need to be referred up into a management hierarchy, and I think -- health and safety is a prime example. We wouldn't want to go and write a health and safety system for one terminal, shall we say BOSL for the sake of argument, when in practice we could write a health and safety system for all of Texaco's terminals, with some tweaks for each terminal depending on the particular characteristics of that terminal. That wouldn't be an efficient way to do it.
Similarly, if we had complex decisions which the terminal manager didn't feel capable or we didn't think was capable of taking, then we would want a structure to deal with those decisions, namely, having higher managers, more experienced managers in place to handle them.
That is what I believe we set up in the case of HOSL and BOSL, with Fina providing those sorts of management services in the case of HOSL and Texaco providing those sorts of management services in the case of BOSL. It was a nice sort of arrangement for us to enter into because it was 50/50.
As far as your earlier question about the board meetings, yes, as far as HOSL was concerned we would see that as a chance to catch up on what was going on at HOSL, an operation which we weren't in day-to-day contact with. Similarly, I imagine at least, that Fina would think exactly the same of the board meeting at BOSL, they would have a chance to find out what Texaco had been doing in the intervening six months."
Hiring and firing
a) The nature of a "secondment" is variable: it can involve a change of employment: it can also simply involve a change of working site.
b) This is demonstrated by the appointment letters of Mr Nash:
a) 1990: "we are pleased to confirm your engagement with [Fina] … as a Technician seconded to [HOSL]".
b) 1992: "I am pleased to confirm your promotion to the position of Duty Supervisor,[HOSL]".
c) 1999: "You will be employed as Duty Supervisor with [Total] and will continue to be based at HOSL".
d) 2000: "you will be employed as Duty Supervisor, HOSL and be based at HOSL."
c) The secondment was not solely concerned with the joint venture facilities but also the Fina-line and the Fina –aviation tanks.
Reporting Lines
"A. My immediate line manager would have been Mr Bond, reporting to Mr Johnson.
Q. Mr Bond, I think, was the director of distribution at the Epsom head office of Fina, wasn't he?
A. Yes, he was.
Q. And Mr Johnson, what title did he have?
A. General Manager Operations, and one of his functions was distribution.
Q. Yes. Did the appraisals that Mr Bond conducted cover both the Fina-Line work and the terminal work?
A. It would have involved my total work -- sorry, it is a word that is difficult in some circumstances – my overall work.
Q. At Buncefield?
A. At Buncefield.
Q. That was presumably because he was your line manager for your overall work at Buncefield?
A. Yes, he was."
"13. As General Manager of HOSL I was answerable to the HOSL Board, whereas, as General Manager of the Fina-line, I was answerable to Total/Fina. In other words, I had two separate lines of upward reporting: directly to the HOSL Board in respect of the HOSL Terminal and directly to the Total/Fina "Manager Operations", with respect to the Fina-line.
14. In respect of my role as General Manager of HOSL, the Organisation Structure chart set out below accurately reflects the reporting lines in place when I was appointed to the role. The fact that I reported to the HOSL Board did not change during my time as General Manager, but by the time of the Incident the reporting lines below me had changed somewhat, such that each of the Operations Manager, Operations Co-ordinator and Administration Controller reported to me directly."
"CHRISTINE MARSHALL: Right. So, the day-to-day things; getting the product through, getting the tanker drivers through, any running repairs to property or anything like that, all of that would go through you at the Total line, through Nigel?
ROBERT WHITE: Yes. Providing it was within the budget which we mentioned a moment ago.
JOHN WILKINSON: Sort of operational control then with Total, if that's a fair way to summarise it.
ROBERT WHITE: Yes."
a) he looked to the board for allocation of resources and the setting of budgets in respect of the joint venture facilities;
b) but he reported to what he described as his "boss", Total's Terminal Operations Manager at Watford, initially Mr Linley and, from 2003, Mr Beedham (who in turn reported to Mr Ollerhead and subsequently Ms Donaldson) in respect of all activities at Buncefield;
c) in the result as regards day to day operations or any line management issues he took instructions from Total.
"Q. Mr White reported to you in his capacity as the general manager of HOSL as well as in his capacity as the general manager of the Fina-Line, didn't he?
A. If I can qualify the word "report" by saying that Mr White would have been in contact with me, in my capacity as Total terminal operations manager, to report to me any matters that he felt appropriate, but not to receive direction."
"Q. That is completely untrue. You were his boss, weren't you?
A. It was certainly true I was his boss for the Fina-Line and it is certainly true I was a member of the HOSL board.
Q. You were his boss for HOSL matters as well, were you not?
A. My definition of "boss", my Lord, wouldn't be the most appropriate response to say yes to counsel's question. I didn't consider myself as the sole person who directed Mr White in respect of HOSL operation."(page 114-115)
"Q. You were not carrying out this exercise in your capacity as director of HOSL, you were carrying it out as terminal operations manager or, as is explained in the first page, as Mr White's immediate manager. That is right, isn't it?
A. I was carrying out the appraisal as Robert's line manager for Fina-Line operations. I was also reviewing his performance and agreeing his objectives with respect to terminal operations, mindful of what the HOSL board's requirements for the terminal were." (pages 121 -122)
(a) The only available job description for Total's Terminal Operations Manager relates to Mr. Linley and dates from November 1999. It recorded under the heading 'Context':
"The job holder ensures that TotalFina-Line and the 7 oil storage terminals in which TotalFina manages and engineers [this included Buncefield], are operated and maintained in a safe and cost-effective manner."
And under the heading 'Job Purpose' and 'Principal Accountabilities' that he was:
"responsible for ensuring that all terminals operated by TotalFina, provide the service required by the Company and joint venture partners in a safe and efficient manner."
Annexed to it were two organograms, the second of which identified the seven terminals, including Buncefield, and showed Mr. White as reporting to him on the same basis as the managers of terminals wholly owned by Total. Mr Linley accepted this as an accurate description of his responsibilities.
(b) Mr. White's job description at the time of the incident was dated October 2005. This document, on a TotalFinaElf form, described the job holder as the General Manager of HOSL and pipeline operations at Buncefield, with additional responsibility for the Colnbrook jet handling facility near Heathrow. He was required to maintain 'liaison and day to day contact with most departments in HO'. The position was said to exist
"to ensure where reasonably practicable that the terminal and pipelines deliver the Company [sc. Total's] requirements safely to the customer."
It added:
"Accountable to the partner companies, notably Total in the management role, to provide a safe and efficient operating regime".
(c) Mr. White, like Mr. Parsons before him, was appraised by his line manager at Head Office. The form for 2002, recording an appraisal presumably carried out in early 2003, may be taken as typical. Mr. Linley reviewed Mr. White's performance against a number of objectives and agreed fresh objectives for 2003. Training courses were agreed, to be arranged by the Head Office HR department in the course of the year. In his concluding comments, Mr. Linley refers to Mr. White as 'managing both the FinaLine and TFE's largest UK terminal'.
(d) Mr White's Colnbrook responsibilities meant that he only spent three or four days a week on site. Indeed the establishment of Mr White's Colnbrook role is a further demonstration that he was under the complete control of Total. It occurred on Mr Beedham's instructions without any prior consultation with the HOSL board or Chevron directors, and when the latter complained they were met with the answer that it was no concern of theirs because the individuals were Total employees.
Health and Safety
"Q. "Petrofina has decided to attempt accreditation under the ISSSRS scheme and will commence in the UK with an audit of HOSL in July 1997." The board was simply told that the decision had already been made and that the first steps towards implementing it were being taken at the very moment that this report was being prepared. That is what happened, isn't it?
A. My Lord, my interpretation of this minute is that this audit was going to be a benchmark audit to understand what Safety Management System HOSL had in place and what potential gaps there may be with respect to the ISSSRS protocol. I believe in July 1997 there was not a Safety Management System that would have been recognised as ISSSRS.
Q. Indeed. So the first stage in implementing ISSSRS would be to conduct such an audit, and that was already in hand, wasn't it?
A. Yes, I would agree.
Q. Yes, and it is saying: the decision has already been made and we are getting on with it, isn't it?
A. My interpretation of this minute is that Petrofina, so Fina for the UK, was going to have ISSSRS as its Safety Management System and it wanted to understand the variances that the HOSL system had at that time to ISSSRS.
Q. Mr Linley, you are trying to divert attention from the point of my question and you know you are doing that, don't you? Have a look at what it says: "Petrofina has decided to attempt accreditation ..." Had they already decided it or not?
A. Yes, Petrofina had decided."
"CHRISTINE MARSHALL: The safety management system. How were you aware that it was a change?
ROBERT WHITE: There was quite a transformation from what we previously had to what we were now introducing.
CHRISTINE MARSHALL: What changed?
ROBERT WHITE: A huge documented system. There was quite a significant amount of retraining at that point, or training. It was brought in with a bit of a fanfare, recognised system, international small site safety rating system (inaudible). It is all there, anyway. It was quite a significant move, I think.
CHRISTINE MARSHALL: When you say there was a fanfare, are there any particular individuals associated with that process?
ROBERT WHITE: The sponsor of it was Steve Ollerhead, who was the director of HOSL at the time.
CHRISTINE MARSHALL: The way we do things like that in our organisation is the person at the top of it will usually send out a global email or something of that sort saying, "This is the change that we are making. This is how we are going to phase it in. This is a training plan" and so on. Is that the sort of process Steve Ollerhead -
ROBERT WHITE: Yes, plus we had one or two -- I certainly attended one major meeting with a lot of people. Maybe there were 20 people there, seemed to be key players in this who needed to be brought on board in the introduction of it, in terms of managers. The sessions were lead and driven by Steve.
CHRISTINE MARSHALL: Would they all be Total people, as far as you know?
ROBERT WHITE: Yes.
JOHN WILKINSON: So, the installation of the system was out with your role in HOSL. In other words, the system was introduced to you. There was no consultation period beforehand. It was announced that this was going to happen?
ROBERT WHITE: Yes.
JOHN WILKINSON: Then there was a rollout, as you have described it in meetings and so on?
ROBERT WHITE: Yes.
JOHN WILKINSON: Are you aware of what system Texaco were operating at that time and subsequently?
ROBERT WHITE: No: I know they had a system but I do not know what it was. I think it was mentioned at one of the board meetings.
JOHN WILKINSON: Was there any decision process by the board on this? I should perhaps have asked that question as well, as to whether to adopt the system or that --
ROBERT WHITE: Not to my knowledge. It was an introduction by Total Fina Elf as part of the way that the management company managed or a part of the management system for one of their terminals."
"The manual demonstrates that TotalFinaElf intends to manage health, safety and the environment with the same degree of expertise and to exacting standards as per other core business activities in order to effectively control risk and prevent harm to people.
This manual describes the various management systems that we will use to achieve those objectives."
COMAH
"Q. The giving of that notice involved formally recognising to HSE, didn't it, that the operator was going to have the much more onerous obligations imposed on operators of top tier sites by COMAH?
A. Yes, that is correct.
Q. You told us on Thursday that you wrote that letter in your capacity as a director of HOSL.
A. Yes, that is right.
Q. And I suggested to you at the time that, since it was on Total notepaper and signed by you as terminal operations manager, you in fact wrote it on behalf of Total, and you didn't accept that.
A. No, that is correct.
Q. If you wrote it as a director of HOSL, by what authority did you do that?
A. I was a director of HOSL.
Q. Did you take the view, Mr Linley, that a director of a company has authority to do anything on its behalf?
A. No, I think the HOSL board had given clear direction to Total to support the company HOSL in its preparation of any information necessary to comply with the COMAH regulations.
Q. Did you think that all directors were entitled to deal with HSE about COMAH or was it just you?
A. I would say any director would have had that authority."
"Q. Did you think that it was appropriate for you to give that notice?
A. Yes, on behalf of HOSL, I did.
Q. If it was being given on behalf of HOSL, why did you think it was appropriate for you as opposed to Mr Tonks to reply? After all, this was an answer to a letter which the HSE had actually addressed to Mr Tonks, wasn't it?
A. Yes, that is right.
Q. They had addressed a letter to Mr Tonks, it was taken out of Mr Tonks' hand by him and you in combination, and you wrote the answer.
A. Yes, that is correct.
Q. Why was that necessary?
A. It probably wasn't necessary but it's what I did.
Q. Yes. The only capacity in which you could have written that letter, Mr Linley, was the capacity in which you actually signed it, namely, as terminal operations manager. That is right, isn't it?
A. I did sign it as terminal operations manager, but that wasn't my intent when I was writing the letter."
"CHRISTINE MARSHALL: You have said to us that Total was the management company for the HOSL site.
ROBERT WHITE: That is correct, yes.
CHRISTINE MARSHALL: Can you just go into a bit more detail about how that works?
ROBERT WHITE: I cannot actually tell you what their remit was to the joint venture because if I did have sight of the management agreement or -- again, whichever version of that it may be, or the initial set up, I do not recall it. So I am not sure of the sort of terms of reference to the joint venture.
CHRISTINE MARSHALL: But in practical terms how does it work?
ROBERT WHITE: Well, I guess the best place to start is that everyone - all of the people who are employed at HOSL are Total employees. So we all have line responsibilities going up into Total. As you have seen from the folder you have there, one of our principal documents in managing safety is the safety management system or loss control manual, which is a Total managed, edited, scripted, driven document. Therefore the system is driven by the management company."
Tank filling
a) ought to have undertaken a risk analysis for tank filling;
b) if it had done so, it would have been classified as a critical task; and
c) this in turn would have given rise to a task procedure.
This is all of a piece with Total having authority to direct the manner in which tank filling should be conducted.
Conclusion
The missing witnesses
"(1) In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action.
(2) If a court is willing to draw such inferences, they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness.
(3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue.
(4) If the reason for the witness's absence or silence satisfies the court, then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified." (p240)
"The appellants, who are a public corporation, elected to call no witnesses, thus depriving the court of any positive evidence as to whether the condition of the fence and the adjacent terrain had been noticed by any particular servant of theirs or as to what he or any other of their servants either thought or did about it. This is a legitimate tactical move under our adversarial system of litigation. But a defendant who adopts it cannot complain if the court draws from the facts which have been disclosed all reasonable inferences as to what are the facts which the defendant has chosen to withhold."
Terms of engagement
a) Even the limited services required under clause 3.2 (such as the preparation of reports and the undertaking of routine maintenance) would be difficult, if not impossible, to furnish absent a concurrent role as operator. Indeed the Supplemental Operating Agreement required HOSL to provide reports on Terminal Operations as required by the Participants: this task was thus in turn delegated to Fina under the Management Agreement.
b) Also delegated were all engineering matters (in addition to routine maintenance undertaken by Fina as the management company) for which a fee was charged.[39]
c) Notably the handling of health and safety was not one of the specific functions assigned to Fina under clause 3.2, yet there can, in my judgment, be no dispute that such matters were in fact so assigned.[40] No fee was charged presumably because there was no incremental cost (other than the COMAH costs which were shared under the Accounting Procedure) .
d) Initially all operational activities were undertaken by a combination of management staff located at Buncefield supported by supervisors and technicians engaged from BPA. In due course all staff became employed by Total. There was thus no need for arrangements to be made for HOSL to pay any additional fee for these services as they were already all on Total's payroll.[41]
a) The first is that the management and operation of the terminal, although not listed among the specific services, came within the generic term "general... administrative services" in Clause 3.1 of the Management Agreement. The list of specific services is expressly said to be without prejudice to the generality of Clause 3.1: see Clause 3.2.
b) The second possibility is that although the Management Agreement did not in terms extend to the management and day to day operation of the terminal, its scope was impliedly expanded with the agreement of both Participants when Fina actually performed those functions and was paid its costs of doing so by HOSL.
c) Third, there was an agreement distinct from the Management Agreement, to be implied from the same matters, which covered just these additional services.
d) Finally, Fina could have managed and operated the terminal from day to day on no contractual basis at all, but gratuitously or on the basis of some restitutionary right to quantum meruit.
Total off-site Negligence
a) A failure to ensure that a risk assessment was performed as regards tank filling operations;
b) A consequent failure to categorise the operation as a critical task;
c) And the further consequence of a failure to promulgate appropriate written work procedures for use in the control room.
"Tank overfill is prevented by a roof mounted Cobham switch which, if actuated, will cause the pipeline manifold to close."
Incorrect pipeline
a) During the night watch of 9/10 December, the Fina-line was filling Tank 901 until Mr Nash switched it to Tank 915 which was feeding the racks and on which a Low alarm had sounded.
b) When Mr Doran took over his shift at 0700 on 10 December, the Fina-line was already feeding Tank 915. However Mr Nash told Mr Doran that the Fina-line was feeding Tank 912: indeed he thought Tank 912 was feeding the racks.
c) During the shift Mr Doran was asked by Kingsbury to prepare to receive another consignment of unleaded fuel and, on discovering that the earlier consignment was already directed into Tank 915, directed the UKOP consignment into Tank 912 at about 1850 (i.e. only 10 minutes before the end of his watch).
d) However Mr Doran did not orally inform Mr Nash about the change in the arrangements as originally reported to him at the beginning of his shift: it was regarded as satisfactory so long as unleaded fuel was going into unleaded tanks.
e) Mr Nash did not look at the Motherwell screen for Tank 912 levels until the report of overflow. He then switched the Fina-line supply from Tank 915 to Tank 911.
a) the entry of the fuel properties into the Motherwell system at the change of watch.
b) the movement dip log during the watch.
These entries were both made on the basis that the movement into Tank 912 was from the UKOP line.
Safe fill level
(a) The overfill level is the level at which any additional fuel will spill out of the tank (or cause the floating roof to hit the tank-top): para. 1.3.11.
(b) The safe fill level is the level up to which the tank is "allowed" to receive fuel after the normal fill level has been reached. It is determined by reference to "the amount of time necessary to take the appropriate action necessary to completely shut down or divert product flow before the level of product in the tank reaches the overfill level": para. 1.3.17. Given the tight timing I accept the view that this does not mean that it is proper to fill to the safe fill level. It is simply the highest level to which the fuel can rise, consistent with avoiding an overfill.
(c) The normal fill level (corresponding to "normal capacity") is no higher than the point at which, assuming proper operating practices and a tank in good condition, the supervisor must begin to shut down so as to ensure that the safe fill level is not exceeded: para. 1.3.10.
(1) Protection against tank overfill is best achieved by a combination of awareness of available tank capacity and inventory, and careful monitoring and control of product movement: API 2350, para. 1.4.1.
(2) Where level detectors and associated alarm systems are fitted, they are not an alternative to awareness of available tank capacity and inventory and careful monitoring and control of product movement, but constitute an "additional means of protection" supplementing them: API 2350, para. 1.4.1. Indeed this last observation in the API practice is followed by a "Caution" in the following terms:
"CAUTION: High-level detectors and/or automatic shutdown/diversion systems on tanks containing Class I and Class II liquids shall not be used for control of routine tank filling operations. These devices are intended to signal a potential emergency and initiate certain manual responses or activate automatic response mechanisms."
(3) API 2350 provides that each filling should be planned in advance: para. 4.2.1. The anticipated final level should be determined at this stage. To provide a safety margin with respect to overfill, the normal capacity (normal fill level) of each tank should be used: para. 4.2.1.1. But the planned level must on no account exceed the safe fill level: para. 4.2.1.2.
(4) During the filling, the supervisor must conduct "regular scheduled monitoring of product receipts", including regular scheduled comparisons of (i) the remaining ullage with the remaining product volume to be received; and (ii) the product level indicated on the instruments with the product level which would be expected at any given time: para. 4.4.1.
(5) For the purpose of planning and monitoring the filling, "frequent, acknowledged communication" should be maintained between the facility operator and the transporter (e.g. the pipeline operator): para. 2.1.2.
(6) If an electrical or mechanical failure occurs that affects the performance of the level detectors (e.g. a stuck gauge), fuel receipt must stop, and not begin again until either the detectors are functioning properly, or else manual operations and procedures have been implemented to allow for the absence of a functional gauging and alarm system: para. 2.2.2.
(1) Most importantly there must be written procedures for avoiding tank overfill, which must cover (among other things) the planning and monitoring of product receipt: paras. 4.1.1, 4.2.1 and 4.4.1. API 2350 requires this notwithstanding that it is drafted on the assumption that the workforce will be knowledgeable, qualified and well trained: see paras. 4.7.1, 4.7.3, 4.7.4.
(2) The written procedures must be regularly reviewed in the light of experience by the facility operator: para. 4.1.3.
(3) The facility operator must conduct reviews or inspection of product receipt operations to ensure that the procedures are being followed: para. 4.1.2.
(4) Personnel assigned to control product movements must be knowledgeable and qualified, and "thoroughly familiar" with the written procedures and operating instructions: paras. 4.7.1, 4.7.2. There must be an organised program of training, with regular monitoring of performance so as to assess the need for refresher training: paras. 4.7.3, 4.7.4.
(5) There must be written procedures for testing inspecting and maintaining equipment associated with the overfill protection system: para. 4.8.1.
Practice in the control room
TAV Switch
a) On 16 January 2002, Mr Lewis, the Terminal Operations Manager, sent an email to Total Watford drawing attention to the HSE requirement that the TAV overfill protection should be live at all times. Thus it was necessary in the event of a fault to "log it on the notice board", to write a defect report detailing both the fault and the action needed and to undertake repairs quickly.
b) The TAV alarm test sheet for March 2003 records that the alarm for Tank 912 could not be tested as the test cable was broken. This state of affairs appears to have been the same in May 2003 and in July 2003.
c) The TAV switch on Tank 912 became inoperable again in May 2004 and was replaced. It also appears to have been inoperable in January, April, May and June 2004.
Indemnities
"Their Lordships think that the duty of a court in approaching the consideration of such clauses may be summarized as follows: -
(1) If the clause contains language which expressly exempts the person in whose favour it is made (hereafter called "the proferens ") from the consequence of the negligence of his own servants, effect must be given to that provision. Any doubts which existed whether this was the law in the Province of Quebec were removed by the decision of the Supreme Court of Canada in The Glengoil Steamship Company v. Pilkington.16
(2) If there is no express reference to negligence, the court must consider whether the words used are wide enough, in their ordinary meaning, to cover negligence on the part of the servants of the proferens. If no doubt arises at this point, it must be resolved against the proferens in accordance with article 1019 of the Civil Code of Lower Canada: In cases of doubt, the contract is interpreted against him who has stipulated and in "favour of him who has contracted the obligation."
(3) If the words used are wide enough for the above purpose, the court must then consider whether the head of damage may "be based on some ground other than that of negligence," to quote again Lord Greene in the Alderslade case. The "other ground" must not be so fanciful or remote that the proferens cannot be supposed to have desired protection against it; but subject to this qualification, which is no doubt to be implied from Lord Greene's words, the existence of a possible head of damage other than that of negligence is fatal to the proferens even if the words used are prima facie wide enough to cover negligence on the part of his servants."
a) clause 9.2 of the JVA does not expressly extend to negligence;
b) and whilst wide enough to cover negligence, there are obviously a number of other heads of liability to which the clause can apply e.g. breach of contract, breach of statutory duty, nuisance, Rylands v Fletcher etc. [51]
a) HOSL shall indemnify a participant against claims by third parties arising out of the operation of the terminal (save where liability has accrued by the negligence of the participant).
b) If and to the extent that HOSL is not in turn indemnified in respect of the liability by insurance taken out pursuant to paragraph 2.1.2 of the Operating Regulations, the participants must indemnify HOSL for "such" claims in proportion to their participating interests.
"3. Save as expressly provided in the Novation Agreement itself, the Joint Venture Agreement of 1988 is to continue in full force and effect."
a) Under para 1.2 a full indemnity is to be furnished to a participant by HOSL to which Chevron would contribute under the Accounting Procedure in proportion to its throughput but subject to a deduction in respect of HOSL's primary liability insurance.
b) In contrast under Clause 9.2 a partial indemnity is to be furnished to a participant to which Chevron would contribute by reference to its shareholding without any allowance for insurance recoveries.
a) If clause 9.2 was still in effect, the consequence has to be, on Total's case, an implied amendment of clause 9.2 so as to read: "Each of Texaco and Petrofina and Elf agrees to indemnify the othersasto the extent of their respective Participating Interests in respectone halfof any claim by or liability to (including any costs and expenses necessarily incurred in respect of such claim or liability) any party not being a party hereto, arising from the Joint Operations."
b) This is somewhat unwieldy but, it is suggested, is necessary to reflect the impact of Clause 1(b) of the Novation Agreement:
"Elf undertakes with each of Texaco and Fina to observe, perform, discharge and be bound by all liabilities and obligations of Texaco in respect of the Texaco assigned interest and Fina in respect of the Fina assigned interest in the place of Texaco and Fina respectively whether actual, contingent or otherwise arising on or after the Effective Date as if Elf had at all times been a party to the Joint Venture Agreement in relation to such respective interests in place of Texaco and Fina."
c) However on the face of it, Clause 1(b) is concerned with an assumption on the part of Elf of a 10% proportion of Texaco and Fina's liabilities so as to coincide with the grant of a 20% interest under clause 1(a).
d) The transfer of rights was achieved by Clause 2 which substituted an entirely new provision in the 1988 JVA allocating an interest in the Buncefield terminal to Texaco, Fina and Elf on a 40/40/20 basis. But no express provision was made for transferring to Elf the rights of indemnity under clause 9.2 (although of course as a Participant Elf could pray in aid the indemnity provisions under para. 1.2 of the Operating Regulations).
e) The conclusion that clause 9.2 had been superseded is further fortified by the deletion of the definition of "Joint Operations" by the Novation Agreement a phrase only to be found in Clause 9.2.
a) The Management Agreement gave rise to a distinct legal relationship outside the scope of the JVA (to which HOSL was not a party).
b) The terms of the Management Agreement expressly recognised that Fina would be liable to HOSL for defective performance of those services.
a) The legal interest of Elf and Fina in the Buncefield site was never transferred to TUKL prior to the explosion.
b) The shares in HOSL held by Elf and Fina were never transferred to TUKL prior to the explosion.
"Following the mergers of Total, Fina and Elf Groups, it is proposed that Total Downstream UK PLC and Total Milford Haven Refinery Limited (the "Transferors") transfer to Total UK Limited (the "Transferee") their shares held in Hertfordshire Oil Storage Limited ("HOSL") and their respective Participating Interest (as defined in the Joint Venture Agreement of 18th March 1988 as amended by Novation Agreement dated 1 January 1994) (The "Joint Venture Agreement") held in relation to Buncefield Terminal and Avonmouth Terminal (hereinafter the "Terminals") and any and all contracts (the "Contracts") entered into by the Transferors with you in relation to or in connection with the Terminals (a list of the Contracts is attached hereto in Schedule 1);
Would you therefore please accept this letter as formal notification of the transfer and request for consent to the Transferee assuming all the obligations of the Transferors and to the Transferors being released from all the obligations pursuant to the terms of the said Joint Venture Agreement and Contracts.
If you agree with the above transfer could you please confirm this by signing and returning to us the accompanying copy attached hereto."
The Management Agreement
a) On 6 August 1992, Miss Ellison[55] of Fina's legal department wrote to Miss Mahmood of Texaco's legal department as follows:
"HOSL and BOSL
Following your meeting today with Roger Smith there is another issue with regard to HOSL and BOSL which I would like to clear up and that is in respect of the Indemnities given by HOSL to Fina and by BOSL to Texaco.
Although in the 1988 Joint Venture Agreement it was agreed that any liability incurred by either Texaco or Fina would be shared on a 50/50 basis between the two, irrespective of negligence or wilful misconduct; when we came to execute the Management Agreements both for Texaco at Avonmouth and for Fina at Buncefield the management company was indemnified by BOSL or HOSL (as the case may be) unless there was either negligence or wilful misconduct.
This matter was raised at the last Board Meeting and it was agreed that the respective lawyers should resolve the issue. My proposal is that we follow the standard North sea principle that where a company is acting as operator on a no gain no loss basis that they be indemnified for their actions or omissions on a full indemnity basis regardless of negligence and that any liability that accrues due to it's wilful misconduct expressly excludes any liability for consequential losses.
Clearly some detail needs to be put into the drafting, which I am happy to do, but first could you please confirm your agreement to the principle."
It is perhaps interesting that Miss Ellison regarded Fina as in an analogous position to an 'operator' in the North Sea. Indeed the whole purpose of any discussion of the topic must have been on the basis that Total was operating the HOSL site. There was little reason to think that accounting or administrative errors could give rise to liability. But the more important thing to note is that the topic of the suggested amendment was not even discussed at the board meeting of HOSL held on 24 July 1992, let alone left to the lawyers to resolve.
b) In her reply on 14 August 1992 Miss Mahmood argued that "a slight amendment" should be effected "along the lines of the third paragraph of your letter". It was not suggested that she had any authority to agree to such an amendment which in any event needed to be prepared in writing and duly executed.
c) This exchange continued with Miss Ellison's response of 21 August 1992 containing a proposed form of amendment:
"I am glad that you agree in principle to the amendments I have suggested and propose that the best way to tackle this would be to amend the present Clause 7.1.2 and insert a new Clause 7.2. Please consider the drafting set out below where I have highlighted the insertion I have made in Clause 7.1.2. The proviso which previously stood at the end of that sub-clause has in addition been deleted. This drafting, of course, relates to the Management Agreement for HOSL but identical wording should be incorporated into the BOSL Agreement, mutatis mutandis.
"7.1.2 at all times keep Fina indemnified and held harmless against all or any actions, proceedings, claims, demands and liabilities whatsoever arising out of the performance of Fina's duties and obligations hereunder regardless of any negligence by Fina which may be brought or prosecuted against or incurred by Fina.
7.2 Fina shall not be liable to the Company or to Texaco for any loss or damage arising out of activities under this Agreement unless such loss or damage results from its Wilful Misconduct and provided that in no case shall Fina be liable to the Company or to Texaco for any loss of profit or any other consequential loss.""
d) Matters were brought to a close on 26 August 1992, in Miss Mahmood's response, where she expressed the belief that the wording would be acceptable and predictably went on to say:
"Subject to obtaining my client's confirmation that they understand and accept the revision, I shall revert to you as soon as possible so that we can agree brief amending agreements as appropriate."
"The Participant shall, each as to its Participating Interest, keep the Manager indemnified and held harmless against any loss, injury or damage arising out of the performance of the Manager's duties and obligations hereunder except insofar as the said loss, injury or damage shall arise out of the Wilful Misconduct of the Manager provided that the Manager shall not be liable in any event, regardless of Wilful Misconduct, for any consequential loss."
"Fina explained that this was a common clause in their current JVA's and had been expressly allowed for by Board resolution between Fina and Texaco. Fina would produce a side letter on this point."
"Thank you for your letters of 26th and 29th November.
Dealing firstly with your letter of 26th November, I confirm that I replied to your letter of 6th August 1992, confirming my agreement to each of Texaco and Fina being indemnified by BOSL or HOSL (as the case may be) unless the relevant party was guilty of wilful misconduct. Attached is a copy of my letter dated 25th August 1992 agreeing to your proposed amendment to both Management Agreements."
a) The amendment remained undocumented despite the bureaucratic processes of the joint venture parties
b) No mention of it is contained in the minutes of meetings of the HOSL or BOSL Board
c) The new agreement was to reflect the accession of Elf which would not be managing either Buncefield or Avonmouth
d) As regards Buncefield, the existing Management Agreement (to which Elf was not a party) would remain in force until the future of HOSL was decided (something over which Elf had no control).
Wilful Misconduct
a) in the light of my conclusion that the supervisor had no proper instructions and such was causative of the explosion, it is accepted that Mr Nash must be acquitted of wilful misconduct;
b) even on the assumption that Mr Nash was properly instructed (or the absence of appropriate instruction was not causative of the explosion) I am wholly unpersuaded that Mr Nash wilfully misconducted himself in the sense prescribed simply by failing to pay any or any adequate heed to the Motherwell screen. No doubt it was lazy: but there were in theory no less than three alarms to warn him of any danger.
Consent
"The plaintiffs in the second action (the trustees) were themselves parties to the bringing of the colliery spoil upon their land. In consideration of payment they allowed Cory Brothers to have the use of their land for this purpose. There is no authority for applying the doctrine of Fletcher v Rylands to such a case, and, in my opinion, so to apply it would involve an unwarrantable extension of the principle of that decision. A plaintiff who is himself a consenting party to the accumulation cannot rely simply upon the escape of the accumulated material; he must further establish that the escape was due to want of reasonable care on the part of the person who made the deposit. If he does establish this he is entitled to succeed unless the licence was given in such very special terms as to prevent the licensor from complaining of negligence in carrying out the work licensed."
"The negligence of Cory & Co. in this respect makes them responsible as between them and the trustees for the escape of the colliery spoil, despite the licence enjoyed by them, on the authority of the case of Rylands v. Fletcher. They had permission to bring the spoil on the land of the trustees. By reason of that permission the company would not be liable to the trustees if the spoil escaped without any negligence on their part, as they would be liable if the trustees had been strangers with whom they had no contractual relations. No right or permission was expressly or impliedly given to them to exercise the right or permission they had obtained without reasonable care."
"If the plaintiff has consented to the source of danger and there has been no negligence on the part of the defendant, the defendant is not liable, and the same applies if the water is maintained for the common benefit of both the plaintiffs and the defendant."
Thereafter having cited various examples including Peters he went on at p. 1233:
"From these judgments it appears that there are two important elements for consideration, namely, negligence and consent. In the case of an ordinary water supply in a block of premises each tenant can normally be regarded as consenting to the presence of water on the premises if the supply is of the usual character. It cannot be said that he consents to it if it is of quite an unusual kind, or is defective or dangerous, unless he knows of that….. It appears to us that they cannot be said to have consented to the set-up or installation as it existed at the time the damage was caused. Over and above this, negligence on the part of the defendants which causes or contributes to the damage takes the case out of the exception to the rule in Rylands v. Fletcher. It cannot be disputed that the leaving of the pipe in the condition in which it was constituted negligence, as the judge said.."
Nuisance
Private nuisance
"It cannot, I think, be seriously contended that, where the premises of an adjoining owner are blown up by an explosion brought about through the agency of the defendants' system of electric lighting, there is not a nuisance….There was a gradual accumulation of explosive gas brought about by the fusion of the bitumen by the operation of the overheated electric wires, which process went on for some three hours, and ultimately resulted in an explosion. If that was not a nuisance I do not know what would be one." Per Collins MR (p605)
"Did the nuisance arise? In my opinion it clearly did in this case. As I have said I am not going to repeat the reasoning which has already been expressed by Lord Sumner. I concur in his opinion that Midwood v. Manchester Corporation is a case which governs us and that the principle applicable in Midwood v. Manchester Corporation and in the present case is the principle in Rylands v. Fletcher…" per Kennedy LJ at p. 784
"It is worthy of note that so closely connected are the two branches of the law that text-books on the law of nuisance regard cases coming under the rule in Rylands v. Fletcher as their proper subject, and, as the judgment of Blackburn J. in that case itself shows, the law of nuisance and the rule in Rylands v. Fletcher might in most cases be invoked indifferently. One typical illustration will suffice. In Charing Cross Electricity Supply Co. v. Hydraulic Power Co. it was the rule in Rylands v. Fletcher that was relied on by the Court of Appeal; but the authority of Midwood Co., Ld. v. Manchester Corporation was invoked and that was a case of nuisance and nothing else." At p 183
"I quite agree that a private nuisance always involves some degree of repetition or continuance. An isolated act which is over and done with, once and for all, may give rise to an action for negligence or an action under the rule in Rylands v. Fletcher, but not an action for nuisance. A good example is an explosion in a factory which breaks windows for miles around. It gives rise to an action under Rylands v. Fletcher but no other action if there was no negligence: see Read v. J. Lyons & Co. But an isolated act may amount to a public nuisance if it is done under such circumstances that the public right to condemn it should be vindicated."
Leaving aside that this passage was obiter, notably it excludes circumstances involving negligence (and for that matter public nuisance). In the circumstances and having regard to the later authorities set out below, I feel unable to accord it the significance that Total invites.
"Nuisance is commonly regarded as a tort in respect of land. In Read v. J. Lyons & Co. Ltd., Lord Simonds said: "he alone has a lawful claim who has suffered an invasion of some proprietary or other interest in land." In this connection the allegation of damage to the plaintiff's motor-car calls for special consideration, since the allegation is that when the offending smuts from the defendants' chimney alighted upon it, the motor-car was not actually upon land in the plaintiff's occupation, but was on the public highway outside his door; Whether or not a claim in respect of private nuisance lies for damage to the motorcar in these circumstances, in my judgment such damage is covered by the doctrine in Rylands v Fletcher."
"Most nuisances do arise from a long continuing condition; and many isolated happenings do not constitute a nuisance. It is, however, clear from the authorities that an isolated happening by itself can create an actionable nuisance. Such an authority is Midwood & Co. Ltd. v. Manchester Corporation [l905] 2 K.B. 597, where an electric main installed by the defendants fused…The Court of Appeal held that the defendants were liable, all the Lords Justices being of the opinion that they had caused a nuisance… I am satisfied that the law is correctly stated in Winfield on Tort, 8th ed. at p.364: "When the nuisance is the escape of tangible things which damage the plaintiff in the enjoyment of his property, there is no rule that he cannot sue for the first escape." (p969)
"In particular, I do not regard the two authorities cited to your Lordships, West v Bristol Tramways Co. [I908] 2 K.B. 14 and Rainham Chemical Works Ltd v. Belvedere Fish Guano Co. Ltd. (1921) 2 A.C. 465, as providing any strong pointer towards a contrary conclusion. It would moreover lead to a more coherent body of common law principles if the rule were to be regarded essentially as an extension of the law of nuisance to cases of isolated escapes from land, even though the rule as established is not limited to escapes which are in fact isolated. I wish to point out, however, that in truth the escape of the P.C.E. from E.C.L.'s land, in the form of trace elements carried in percolating water, has not been an isolated escape, but a continuing escape resulting from a state of affairs which has come into existence at the base of the chalk aquifer underneath E.C.L.3 premises. Classically, this would have been regarded as a case of nuisance; and it would seem strange if, by characterising the case as one falling under the rule in Rylands v. Fletcher, the liability should thereby be rendered more strict in the circumstances of the present case."
I do not read the last sentence as holding that an isolated escape satisfying the appropriate criteria could not constitute a nuisance.
"Rylands v Fletcher was therefore an innovation in being the first clear imposition of liability for damage caused by an escape which was not alleged to be either intended or reasonably foreseeable. I think that this is what Professor Newark meant when he said in his celebrated article ("The Boundaries of Nuisance" (1949) 65 LQR 480, 488) that the novelty in Rylands v Fletcher was the decision that "an isolated escape is actionable". That is not because a single deluge is less of a nuisance than a steady trickle, but because repeated escapes such as the discharge of water in the mining cases and the discharge of chemicals in the factory cases do not raise any question about whether the escape was reasonably foreseeable. If the defendant does not know what he is doing, the plaintiff will certainly tell him. It is the single escape which raises the question of whether or not it was reasonably foreseeable and, if not, whether the defendant should nevertheless be liable. Rylands v Fletcher decided that he should." (para 27 per Lord Hoffmann)
Public nuisance
"A person is guilty of a public nuisance (also known as common nuisance), who (a) does an act not warranted by law, or (b) omits to discharge a legal duty, if the effect of the act or omission is to endanger the life, health, property, morals, or comfort of the public, or to obstruct the public in the exercise or enjoyment of rights common to all Her Majesty's subjects."
a) Total maintain that a claimant can only claim for interference with his own rights: losses which arise from interference with the ability of others (such as customers of the claimant) to exercise their rights are too remote; and
b) Total maintain that the class of those who can recover in public nuisance is restricted to those with proprietary interests proximate to or in the vicinity of the public nuisance.
First limb - interference with rights of the public as members of the public
"I would for my part accept that the offence as defined by Stephen, as defined in Archbold (save for the reference to morals), as enacted in the Commonwealth codes quoted above and as applied in the cases (other than R v Soul 70 Cr App R 295) referred to in paras 13 to 22 above is clear, precise, adequately defined and based on a discernible rational principle. A legal adviser asked to give his opinion in advance would ascertain whether the act or omission contemplated was likely to inflict significant injury on a substantial section of the public exercising their ordinary rights as such: if so, an obvious risk of causing a public nuisance would be apparent; if not, not."( per Lord Bingham at p 484)
The appeal in Rimmington was however successful because the public element of the offence was not made out. The circumstances of the alleged offence were the dispatch of hate mail which was properly to be regarded as a campaign against individuals in receipt of the mail and not against the public.
"But central to the content of the crime was the suffering of common injury by members of the public by interference with rights enjoyed by them as such. I shall, to avoid wearisome repetition, refer to this feature in this opinion as "the requirement of common injury"."(Rimmington para 6)
This common injury does not involve the infliction of a similar injury as in the hate-mail situation. It means the simultaneous interference with the rights of a significant section of the public.
"It is difficult to ascertain with any precision from these citations how widely spread the effect of a nuisance must be for it to qualify as a public nuisance and to become the subject of a criminal prosecution or of a relator action by the Attorney-General. It is obvious, notwithstanding Blackstone's definition, that it is not a prerequisite of a public nuisance that all of Her Majesty's subjects should be affected by it; for otherwise no public nuisance could ever be established at all."(p 182)
"In the course of his judgment Turner L.J. said: It is not on the ground of any criminal offence committed, or for the purpose of giving a better remedy in the case of a criminal offence, that this court is or can be called on to interfere. It is on the ground of injury to property that the jurisdiction of this court must rest; and taking it to rest upon that ground, the only distinction which seems to me to exist between cases of public nuisance and private nuisance is this- that in cases of private nuisance the injury is to individual property, and in cases of public nuisance the injury is to the property of mankind."(p 183)
"It is, however, clear, in my opinion, that any nuisance is public which materially affects the reasonable comfort and convenience of life of a class of Her Majesty's subjects. The sphere of the nuisance may be described generally as "the neighbourhood "; but the question whether the local community within that sphere comprises a sufficient number of persons to constitute a class of the public is a question of fact in every case. It is not necessary, in my judgment, to prove that every member of the class has been injuriously affected; it is sufficient to show that a representative cross-section of the class has been so affected for an injunction to issue."(p 184)
a) Private nuisance involves interference with someone's private right to enjoy his own land. Public nuisance involves the endangering of the health, comfort or property of the public.
b) It follows that a collection of private nuisances can constitute a public nuisance:[62] but it does not follow either that in consequence the claim in private nuisance is subsumed or that a public nuisance involving interference with health or comfort cannot be freestanding.
a) British Celanese v. A H Hunt [1969] 1 WLR 959 per Lawton J at 969A: "It is, however, clear from the authorities that an isolated happening by itself can create an actionable nuisance".
b) In Jan de Nul v Royal Belge [2000] 2 Lloyd's Rep. 700 at paragraph
96, Moore-Bick J said: "Although [public nuisance] does sometimes
arise for consideration in the context of an interference with the
plaintiff's use and enjoyment of land similar to that which would
support a claim in private nuisance (see, for example, PYA) that is not its essential nature".
c) In Corby, the Court had to consider whether personal injury was recoverable in public nuisance. Dyson LJ having just quoted extensively from Lord Bingham's speech in Rimmington observed at paragraph 30: "It is true that the same conduct can amount to a private nuisance and a public nuisance. But the two torts are distinct and the rights protected by them are different."
d) As regards textbook authority the 2006 edition of Winfield and Jolowicz on Tort states at page 643: "Nuisances are divided into public and private, although it is quite possible for the same conduct to amount to both" and then again at p. 646: "The same state of affairs may, of course, constitute both torts, a private nuisance in so far as A suffers interference with the enjoyment of land and a public nuisance in so far as B suffers some special damage".
Second limb – obstruction to public highways
"iv) It is denied that such entitlement extends to any claim where the damage did not result from interference with the claimant's own exercise of the public right to use the public highways around the Buncefield site.
v) It is denied that such entitlement extends to any claim where the damage that is alleged to be particular substantial and direct was not caused by injury to proprietary rights of the claimant in hereditaments in proximity to the public nuisance."
"The case of Wilkes v. The Hungerford Market Company has no bearing on the present question that merely declared what, under the particular circumstances which existed in that case, would establish a right of action; but there the question is, whether, the works being lawful, and there being no right of action in that respect, the Plaintiff has a right to compensation by a novel interpretation of certain words in the statute."
"As far as I have been able to examine the cases, in all of them, except two, in which an individual has been allowed to maintain an action for damage which he has specially sustained by the obstruction of a highway, the injury complained of has been personal to himself, either immediately, or by immediate consequence. The two excepted cases are those of Baker v. Moore (mentioned by Mr. Justice Gould in Iveson v. Moore) ; and Wilkes v. Hungerford Market Company …..The case of Baker v. Moore appears to me to be even more doubtful than that of Wilkes v. Hungerford Market Company; and as to this latter case, Chief Justice Erle, in delivering the judgment of the majority of the Judges in the present case, observed:--"If the question were raised in an action now, we think it probable that the action would fail, both from the effect of the cases which preceded Wilkes v. The Hungerford Market Company and also from the reasoning in the judgment in Ogilvy v. Caledonian Railway Company." In this observation upon Wilkes Case I entirely agree": at p.187/88
"Upon a review of all the authorities, and upon a consideration of the sections of the statutes relating to this subject, I have satisfied myself that the temporary obstruction of the highway, which prevented the free passage of persons along it, and so incidentally interrupted the resort to the Plaintiff's public house, would not have been the subject of an action at common law, as an individual injury sustained by the Plaintiff in Error, distinguishing his case from that of the rest of the public. That, therefore, he altogether fails to bring himself within the general principle upon which a claim to compensation under the Acts in question has been determined to depend; that upon the construction of the clauses on which his claim is rested, the 6th section of the Railways Clauses Act, and the (58th section of the Lands Clauses Act), are both inapplicable, as his damage arose from the temporary operations of the company, and not from their permanent works. And upon the 16th section of the Railways Clauses Act, which does apply to his case, his damage was not of such a nature as to entitle him to compensation; the interruption of persons who would have resorted to his house but for the obstruction of the highway, being a consequential injury to the Plaintiff in Error too remote to be within the provisions of that section."
"The Plaintiff relied on the case of Wilkes v. Hungerford Market Company, and on other decisions following upon it. What was ultimately decided in that case was, that where a corporate body had, under lawful authority, obstructed a public thoroughfare, but had continued the obstruction beyond the proper and necessary time, a person living in a house bordering on the obstructed line might, in respect of that prolonged obstruction, sustain an action on the ground that, in consequence of the prolonged obstruction, passengers had been unable conveniently to pass by his door, and so that he had lost profit in his business. I confess that I have great difficulty in agreeing with that decision; a difficulty which, as I collect from the language of Sir William Erle, in delivering the judgment of the Exchequer Chamber in the case now before us, was felt by him, and the Judges who concurred with him. But it is enough to say that the relief to which the plaintiff was there held to be entitled was not founded on any suggestion of injury to the land, or to the house; the sole ground on which there can be any title to relief in this case but on an injury to the occupier which the Court must have held, in the language of Chief Justice Tindal, to have been the direct, necessary, natural, and immediate consequence of the obstruction."
"It is a fallacy, almost a mockery, to answer, "the custom is one thing, and the house another; and the injury is to the custom, not to the house." You cannot sever the custom from the house itself, or from the interest of the occupier; for the custom is the thing appertaining to the house which gives it its special character, and constitutes its value to the occupier, and for which he pays in the high rent he has agreed to give. If you diminish the custom of a public house, you diminish its value either to let or sell, and therefore you deteriorate the public house and the interest of the tenant therein.": p. 205
"The error in the decision (for so I must respectfully deem it to be) which has led to the judgment now appealed from, and to others upon which that judgment is founded, appears to me to have arisen entirely from the meaning attributed to those words "injuriously affected," which have been interpreted to mean affected in such a manner as but for the statutes would constitute an injury at law, and would support an action for damages." But there is not, in my judgment, any warrant for so interpreting or paraphrasing the words, which, in my opinion, are plainly used in their ordinary and popular sense; for it is evident that lands affected in the proper exercise of the statutory powers cannot, in a legal sense, be said to be "injuriously affected.."
"After the many irreconcilable decisions upon the compensation clauses in the Land Clauses Consolidation Act, and the Railways Clauses Consolidation Act, I think we may be said to have arrived at some settled conclusions upon the subject. It may be taken to have been finally decided that in order to found a claim to compensation under the Acts there must be an injury and damage to the house or land itself in which the person claiming compensation has an interest. A mere personal obstruction or inconvenience, or a damage occasioned to a man's trade or the goodwill of his business, although of such a nature that but for the Act of Parliament it might have been the subject of an action for damages, will not entitle the injured party to compensation under it. Some uncertainty still remains as to the particular character of the damage and injury to the house or land itself upon which a claim to compensation may be founded."
"The cases under the Land Clauses Consolidation Act, relevant for the reason already stated, I find it very difficult to reconcile. Lord Blackburn in Caledonian Ry. Co. v. Walker's Trustees goes through them in a way which relieves me of the necessity of referring to them in detail. He comes to the conclusion, as I understand his judgment, that the decisions of the House of Lords in Caledonian Ry. Co. v. Ogilvy and in Ricket's case are not consistent with the decisions in McCarthy's case (a), approving Beckett's case, and therefore he follows " the later and more deliberate decision ", that is, McCarthy's case. The House of Lords in the Caledonian Ry. Co. v. Walker's Trustees, following McCarthy's case, did allow the claimant under the Land Clauses Consolidation Act to recover compensation, and therefore decided that the matter of which he complained would have given him a cause of action for particular damage before the Act authorizing it was passed. Now the plaintiff there complained of the closing of a public highway and substituting for it a lengthier road of a steeper gradient than the way closed, whereby the access to his house was injured. This decision appears to me to support the conclusion I have arrived at in the cases decided independently of the Land Clauses Consolidation Act."
"In Wilkes v. Hungerford Market Co. it was held that the defendants, who had obstructed a highway for a longer period than was justified by their statutory powers, were liable to pay damages to a bookseller whose shop adjoined the highway, and who proved loss of custom due to the unauthorized obstruction. In Ricket v.Metropolitan Ry. Co. Lord Chelmsford in the course of his speech throws grave doubt on the correctness of the decision in Wilkes v. Hungerford Market Co. , but I do not think it can be said to have been overruled, and it is in accord with the earlier authorities to which I have referred, and having regard to the subsequent decision of the House of Lords in Metropolitan Board of Works v. McCarthy I think it ought to be regarded as correctly decided.
"If the diminution in value of business premises due to an unauthorized obstruction gives the owner a good cause of action, it seems to me that the interference with his business which gave rise to the loss of business earnings ought a fortiori to be regarded as particular damage giving him a cause of action. These cases would afford ample authority for the decision in the plaintiffs' favour of the point under consideration."at p. 368[69]
"In Ricket's case it was held, first, that the plaintiff claiming compensation had not suffered any peculiar damage which would have entitled him to succeed in an action for damages at common law; and secondly, that in any event he had not proved that his land was injuriously affected. It is difficult to reconcile this case with the decision of the Court of Common Pleas in the case of Beckett v. Midland Ry. Co., which was approved by the House of Lords in Metropolitan Board of Works v. McCarthy , or with the decision of the House of Lords in the last named case; but, be this as it may, Ricket's case (1) is not an authority against the plaintiff's claim in the present case."
"Greer LJ states expressly and I agree with him that Wilkes v. Hungerford Market ought not to be considered to have been overruled. As I have pointed out above the chief criticism directed against it is as to remoteness of the damage not that there was no prima facie cause of action in respect of the injury suffered. The court went on over the ground again and accepted the series of authorities of which Iveson v. Moore and Rose v. Miles are typical examples."
"I can see no difference in principle between the case where the relevant interference with a business consists of the obstruction of its customers and the case where it consists of obstruction of its employees."
"This case made it apparent that the arbitrary rules stated by, for example, Lord Cranworth in Ricket's case, were not necessary to keep the floodgates shut. The construction of the railways would have caused no loss to post houses or coaching inns if the trains had not run. So after Brand's case the cases on injurious affection caused by the construction of the works returned to more logical principles. Ricket v Metropolitan Railway Co LR 2. HL 175 was explained and distinguished in later cases in your Lordships' House until it became very difficult to say for what proposition, if any, it remained authority."
Proprietary rights in the vicinity of the public nuisance
a) In PYA, Romer LJ stated at p.184: "Any nuisance is public which materially affects the reasonable comfort and convenience of life of a class of Her Majesty's subjects."
b) In Rimmington Lord Bingham introduced the topic this way at para. 6:-
"It became clear over time that there were some acts and omissions which were socially objectionable but could not found an action in private nuisance because the injury was suffered by the local community as a whole rather than by individual victims and because members of the public suffered injury to their rights as such rather than as private owners or occupiers of land. Interference with the use of a public highway or a public navigable river provides the best and most typical example. Conduct of this kind came to be treated as criminal and punishable as such. In an unpoliced and unregulated society, in which local government was rudimentary or nonexistent, common nuisance, as the offence was known, came to be (in the words of J R Spencer, "Public Nuisance-A Critical Examination" [1989] CLJ 55, 59) "a rag-bag of odds and ends which we should nowadays call 'public welfare offences ". But central to the content of the crime was the suffering of common injury by members of the public by interference with rights enjoyed by them as such. I shall, to avoid wearisome repetition, refer to this feature in this opinion as "the requirement of common injury."
On the facts there was no actual or potential interference with land: one claim concerned a campaign of inflammatory letters: the other a "joke" package. Indeed many examples of public nuisance envisaged in the speech were not dependent on any interference with proprietary rights e.g. offering unfit meat for sale, making a hoax phone call or extinguishing the lights at a football match.
c) In Corby the claim was being made by mothers allegedly exposed to a contaminating substance which caused birth defects. The whole thrust of the defendant's argument on the strike out application was that public nuisance was like private nuisance and, since the latter could not give rise to a claim for personal injury because it was based on interference with enjoyment of the land, so also the former. This was rejected by the court at para 27:
"It seems to me that it is at least arguable that Professor Newark was wrong to describe a public nuisance as a "tort to the enjoyment of rights in land". The definition of the crime of public nuisance says nothing about enjoyment of land and some public nuisances undoubtedly have nothing to do with the interference with enjoyment of land. As Lord Bingham said, the ingredients of the crime and the tort are the same. A public nuisance is simply an unlawful act or omission which endangers the life, safety, health, property or comfort of the public. As was said in Salmond and Heuston on the Law of Torts (21 st edition 1986): "Public and private nuisances are not in reality two species of the same genus at all. There is no generic conception which includes the crime of making a bomb-hoax and the tort of allowing one's trees to overhang the land of a neighbour"."
d) Likewise in Jan de Nul v Royal Belge [2000] 2 Lloyd's Rep. 700 dredging operations in one area of Southampton Water caused silting in the vicinity of commercial wharves and oyster bed of the parties. Moore- Bick J summarised the claim in public nuisance as follows at para 96:
"Liability in public nuisance, however, raises more difficult questions. Although it does sometimes arise for consideration in the context of an interference with the plaintiffs use and enjoyment of land similar to that which would support a claim in private nuisance (see, for example, Attorney-General v. PYA. Quarries Ltd., [l957] Q.B. 169), that is not its essential nature. Perhaps it is most commonly encountered in the context of obstruction of the highway or of a navigable waterway interfering with the public right of passage, but, as the editors of Clerk & Lindsell point out in par. 18-05, the scope of public nuisance is wide and the acts and omissions to which it applies are all unlawful. Private nuisance, on the other hand, is only concerned with interference with the use and enjoyment of land and may be committed by doing acts which are not necessarily unlawful in themselves."
"60. Mr Holgate seeks to extract two principles from the authorities: first, that the rights interfered with must be "appurtenant" to the claimant's land; secondly, the obstruction must be "proximate". The only reference to "appurtenant rights" in the 19th C Cases seems to be in the argument of counsel for the railway company in Walker's Trustees (p 267-8). He spoke of the need for the right to have " ... a degree of proximity to the affected property which made it, in a reasonable sense, an appurtenant of the property".
63. His argument failed, and his use of the term "appurtenant" was not followed by the majority. Lord Selborne mentioned the argument that the access was not "a right so connected with or incident to their real estate" as· to give rise to compensation (p 280); but he regarded it as sufficient that the right of access "was direct and proximate and not indirect or remote" (p 285). The argument found a possible echo in the speech of Lord Blackburn, who referred to an action for obstruction of a public way as one for infringement of a right attached to the land" (p 298); but he was alone in using that language.
72. In summary, "proximity" appears as a relevant factor in the 19th C cases but not as a distinct test. Thus, for example, Lord Penzance spoke of "proximity to, or relative position with" the highway. In so far as one can find a common theme in the speeches, it echoes the common law requirement that the loss must be "particular, direct, and substantial". Thus the claim in Walker's Trustees succeeded because what had been a "direct, straight and level" access was "altogether cut off', leaving as the only alternative a "distant and circuitous access". Proximity may of course be a factor in deciding whether the damage is sufficiently "direct".
Shell claim[70]
fall under 3 heads:
a) the loss of aviation fuel being stored for Shell in tankage on the WLPS/UKOP site immediately prior to the Incident (the Lost Fuel Claim);
b) losses suffered as a result of Shell's inability to supply aviation fuel to customers at Heathrow, Gatwick, Luton, Bournemouth and Farnborough airports, save only in reduced volumes and/or at increased cost (the Aviation Claim); and
c) losses as a result of Shell's inability to lift ground fuels by tanker at the HOSL West site in order to supply customers save only in reduced volumes and/or at increased cost (the Ground Fuels Claim).
"… if and insofar as physical damage has been caused to assets of which WLPS/UKOP (as the case may be) is the legal owner, then that owner is entitled to bring claims in respect thereof (and any recoverable consequential losses) in its own name against those legally responsible for causing such loss and/or damage. Insofar as such claims are brought in respect of or as a consequence of damage to assets which WLPS/UKOP (as the case may be) holds on trust, then any damages recovered are to be held on trust for the beneficiaries, and apportioned in accordance with the beneficiaries' respective interests. It is not appropriate for a party with a mere beneficial interest, such as Shell alleges it has, itself to bring a claim against the alleged tortfeasor(s) in respect of loss due to physical damage to assets of which it is a beneficial owner, or loss and damage consequential thereto."
"At common law there is no doubt about the position. In case of a wrong done to a chattel the common law does not recognize a person whose only rights are a contractual right to have the use or services of the chattel for purposes of making profits or gains without possession of or property in the chattel. Such a person cannot claim for injury done to his contractual right."
"My Lords, there is a long line of authority for a principle of law that, in order to enable a person to claim in negligence for loss caused to him by reason of loss of or damage to property, he must have had either the legal ownership of or a possessory title to the property concerned at the time when the loss or damage occurred, and it is not enough for him to have only had contractual rights in relation to such property which have been adversely affected by the loss of or damage to it."
a) Shell was entitled to immediate possession of the damaged assets;
b) The claim fell within the exception to the general rule identified in Morrison Steamship Co Ltd v Greystoke Castle [1947] AC. 265;
c) The claim fell within the exception to the general rule identified in Caltex Oil (Australia) Pty v The Dredge "Willemstad" (1976) 136 C.L.R. 529;
d) The exclusionary rule is no longer good law.
Right to possession
The WLPS pipeline system
"13. USER RIGHTS
13.1 Participants shall be entitled to use the various parts of the West London Assets as follows:-
13.1.1 the storage facilities at Buncefield and the pipelines from Buncefield to Perry Oaks
13.1.2 The pipeline from Longford to Walton on Thames in accordance with the provisions of the Memorandum of Agreement
13.1.3 in the case of a Participant or Participants having financed such a Modification as referred to in sub-clause 10.3 that part of the West London Assets comprising the Modification
13.2 If a Participant wishes to use a part of the West London Assets to which it is not entitled under sub-clause 13.1 it must first obtain the approval of WLCC. WLCC shall use every reasonable endeavour to permit the Participant use of the part to which it is not entitled by sub-clause 13.1"
The UKOP Pipeline System
Operation of the WLPS and UKOP Pipeline Systems by BPA
Beneficial ownership
"My Lords, under this head Mr. Clarke put forward two propositions of law. The first proposition was that a person who has the equitable ownership of goods is entitled to sue in tort for negligence anyone who by want of care causes them to be lost or damaged without joining the legal owner as a party to the action….In my view, the first proposition cannot be supported. There may be cases where a person who is the equitable owner of certain goods has also a possessory title to them. In such a case he is entitled, by virtue of his possessory title rather than his equitable ownership, to sue in tort for negligence anyone whose want of care has caused loss of or damage to the goods without joining the legal owner as a party to the action: see for instance Healey v. Healey [I9151 1 K.B. 938. If, however, the person is the equitable owner of the goods and no more, then he must join the legal owner as a party to the action, either as co-plaintiff if he is willing or as co-defendant if he is not. This has always been the law in the field of equitable ownership of land and I see no reason why it should not also be so in the field of equitable ownership of goods."
"In my judgment, the law of this country is and always has been that an action for negligence in respect of loss or damage to goods cannot succeed unless the plaintiff is at the time of tort complained of the owner of the goods or the person entitled to possession of them."
"It has further, in their Lordships' opinion, been established, by authority of long standing, that where one person, A, who has or is entitled to have the possession of goods, is deprived of such possession by the tortious conduct of another person, B, whether such conduct consists in conversion or negligence, the proper measure in law of the damages recoverable by A from B is the full market value of the goods at the time when and the place where possession of them should have been given. For this purpose it is irrelevant whether A has the general property in the goods as the outright owner of them, or only a special property in them as pledgee, or only possession or a right to possession of them as a bailee."
"I am of opinion that the plaintiff has a title to the immediate possession of the chattels claimed by her, because the trustees of the settlement only hold them in trust to allow them to be used by her, and it is impossible for them to be used by her unless she has an immediate right to claim possession of them from the trustees. I, therefore, hold that the plaintiff is entitled to maintain this action against her husband without joining the trustees of the settlement as parties."
"A careful reading of the statement of facts preceding the judgment of Shearman J reveals, however, that the wife was not merely the equitable owner of the chattels. They consisted of furniture and household effects 'in, on or about' the husband's residence used by her. She had been in actual possession of the chattels when they were taken from her and she was entitled to immediate possession of them….. The case is not authority for the proposition that an equitable title alone suffices to support a claim for conversion. The decision was squarely based on the wife's title to the immediate possession of the goods claimed."
"Thus it was the plaintiffs' primary submission that 'a person with an equitable interest in goods can sue for conversion as having an immediate right to possession'; or, to put it another way, Macmillan had 'a good cause of action against Lehman Brothers for damage to its reversionary interest in the share certificates'- the 'reversionary interest' referred to being the equitable interest. The second basis for their case thus added nothing to the first. This argument was advanced, relying on Healey v Healey [1915] 1 KB 938 and what Sir David Cairns had said in International Factors Ltd v Rodriguez [l979] 1 A11 ER 17 at 20-21, [1979] QB 351 at 357-358 with the concurrence of Bridge LJ. Healey v Healey [1915] 1 KB 938 is not authority for the cited proposition, indeed it is authority against it as appears from what Shearman J (at 940) said. The furniture and household effects in question had been removed from the house where she was living by the trustee, her husband. She claimed in detinue for their return:
'Now, the only title which it is necessary for a plaintiff to allege in order to maintain an action in detinue is a title to the immediate possession of the goods. I am of opinion that the plaintiff has a title to the immediate possession of the chattels claimed by her because the trustees of the settlement only hold them in trust to allow them to be used by her, and it is impossible for them to be used by her unless she has an immediate right to claim possession of them from the trustees.'
The basis of the cause of action was the wrongful deprivation of legal possession, not the fact that she was the beneficiary of the trust."
a) Shell (in common with the other participants) had a right to use these assets.
b) WLPS and UKOP managed the assets on the participants' behalf.
c) WLPS and UKOP were obliged to act on instructions from the participants' co-ordinating committees.
d) WLPS and UKOP had no employees.
e) It was open to the participants to terminate the trust and thereafter call for transfer of the assets.
a) WLPS and UKOP were joint venture vehicles set up with the purpose of holding title to real estate interests at Buncefield owned and pooled by the participants.
b) WLPS and UKOP also were accorded possession of the assets for the purposes of their operation.
c) WLPS and UKOP retained constructive possession but accorded actual possession of the bulk of the assets to BPA.
d) Shell and the other participants were merely entitled to make such use of the facilities in respect of their individual capacity requirements as the various co-ordinating committees (presumably acting on a unanimous basis) allowed.
e) This structure was wholly inconsistent with the right of any individual participant to call for immediate possession of the pipeline systems.
The Greystoke Castle exception
"But it may be said that this is an answer to the contention that the damage is too remote, but does not deal with the allegation that it does not flow from the tortious act but from the contractual relationship between the ship and its cargo. Sir William McNair put this contention in the words " Liability or damage arising from a " contract with a third party gives no ground for a claim for " damages in an action for negligence against a wrongdoer " unless the liability or damage arose from physical injury" to the plaintiff's person or to property owned by or in the " possession of the plaintiff." For this contention there may be much to be said where the person or thing injured was not engaged, as is cargo when being carried in a ship, on a joint adventure. I do not, however, think it applies to such carriage. It is true that general average is not affected by insurance law but the outlook upon the mutual obligation entered into by ship and cargo owners resulting in the undertaking of a common adventure may be illustrated by the fact that whereas in non-marine cases there is no loss unless the thing insured is injured, in marine insurance cases the loss of the adventure constitutes a loss for which underwriters are liable though the cargo itself be safe."
"My Lords, under the law of the sea there is recognized a community between ship and cargo that does not obtain between carrier and customer on land. This is shown by two well settled principles. First, if a collision causing damage to cargo occurs, and the carrying ship and the other vessel are both in fault, cargo could under the old law recover only a moiety of the damage and under statute can now only recover a due proportion determined by the degree of blame. That conception finds no place in land carriage, where there would be joint liability for the whole. Secondly, the liability to contribute to general average expenditure is part of the law of the sea. The principle involved in general average contribution is peculiar to the law of the sea and extends only to sea risks. (Cf. Falcke v. Scottish Imperial Insurance Co.) The law of the sea apart, neither at law nor in equity can contribution be obtained on the ground that loss incurred by one person has delivered another from a common danger (see Johnson v. Wild (2)), or that expenditure incurred by one person has incidentally benefited another (cf. Ruabon Steamship Co., Ld. v. London Assurance (3).) Agency is not implied from the circumstances, and there is no equity to claim relief. The sufferer both at law and equity must look to gratitude and not to the courts for his recompense. Under the law of the sea, however, ship and cargo are linked together in the fortunes of the voyage and, in a loose sense, there is in some respects a compulsory partnership between ship and cargo in respect to the venture of sea carriage : Bell's Principles, 9th ed., s. 437 ; Bell's Commentaries, 5th ed., vol. I., p. 534. Section 66 of the Marine Insurance Act, 1906, aptly refers to the matter as "the common adventure." A breach of the duty to take care involving only damage to the ship may therefore be and in my opinion is a breach of duty owed to cargo."
"On the other hand, if two lorries A and B are meeting one another on the road, I cannot bring myself to doubt that the driver of lorry A owes a duty to both the owner of lorry B and to the owner of goods then carried in lorry B. Those owners are engaged in a common adventure with or by means of lorry B, and if lorry A is negligently driven and damages lorry B so severely that whilst no damage is done to the goods in it the goods have to be unloaded for the repair of the lorry and then reloaded or carried forward in some other way and the consequent expense is by reason of his contract or otherwise the expense of the goods owner, then in my judgment the goods owner has a direct cause of action to recover such expense. No authority to the contrary was cited and I know of none relating to land transport."
"It being recognised that the nature of the loss held to be recoverable in Anns was pure economic loss, the next point for examination is whether the avoidance of loss of that nature fell within the scope of any duty of care owed to the plaintiffs by the local authority. On the basis of the law as it stood at the time of the decision the answer to that question must be in the negative. The right to recover for pure economic loss: not flowing from physical injury, did not then extend beyond the situation where the loss had been sustained through reliance on negligent mis-statements, as in Hedley Byrne. There is room for the view that an exception is to be found in Morrison Steamship Co. Ltd. v Greystoke Castle (Cargo Owners) (19471 A.C. 265. That case, which was decided by a narrow majority, may, however, be regarded as turning on specialties of maritime law concerned in the relationship of joint adventurers at sea."
"66 General average loss
(2) There is a general average act where any extraordinary sacrifice or expenditure is voluntarily and reasonably made or incurred in time of peril for the purpose of preserving the property imperilled in the common adventure."[75]
Caltex v. Willemstad[77]
a) The use of the pipeline to convey refined products from a refinery to another's terminal was akin to a 'joint venture'.
b) The person to whom the petroleum product was being delivered had a real interest in the pipeline's continued operation despite having no proprietary or possessory interest in it.
c) The position of the pipeline was ascertainable from the charts: its use for conveying crude oil or refined products from terminal to refinery and vice versa could be readily inferred.
d) The damage to the pipeline was in breach of the duty of care owed to the refinery and it should have been apparent that more than one party was likely to be exposed to loss as a consequence.
e) The loss of use had the direct consequence of incurring expense in employing alternative modes of transport.
a) the WLPS / UKOP site was an important junction in the UKOP Pipeline System;
b) it was the point of importation of aviation fuel into the WLPS/UKOP site and was the point of supply for aviation fuel to Heathrow and Gatwick airports;
c) Shell used a tanker loading gantry on the WLPS / UKOP main site to lift aviation fuel for the purpose of supplying it to customers at airports (as did TUKL from around August 2003);
d) in the event of a major accident at the HOSL West site, extensive damage would or might be caused to the HOSL site and the adjacent WLPS / UKOP site with the possible result that each of those sites would be severely damaged and rendered inoperable and Shell would suffer loss as a result.
"Their Lordships consider that some limit or control mechanism has to be imposed upon the liability of a wrongdoer towards those who have suffered economic damage in consequence of his negligence. The need for such a limit has been repeatedly asserted in the cases, from Cattle's case, L.R. 10 Q.B. 453, to Caltex, 136 C.L.R. 529, and their Lordships are not aware that a view to the contrary has ever been judicially expressed. The policy of imposing such a limit is consistent with the policy of limiting the liability of ships and aircraft in maritime and aviation law by statute and by international agreement…
Almost any rule will have some exceptions, and the decision in the Caltex case may perhaps be regarded as one of the "exceptional cases" referred to by Gibbs J. in the passage already quoted from his judgment, The exceptional circumstances may be those referred to by Stephen J at pp. 576-577 already mentioned. Certainly the decision in Caltex does not appear to have been based upon a rejection of the general rule stated in Cattle's case. For these reasons their Lordships are of the opinion that Yeldham J. erred in holding that the time charterer was entitled to recover damages from the defendant in this case." At p.25
WLPS and UKOP
a) Which ITF claimants are entitled to claim for loss of use?
b) Is there an overlap between the ITF claimants' claims for loss of use?
c) Does Shell have a claim for economic loss in respect of loss of use?
"We are not able to agree and do not agree that damages should be assessed by reference to the value that WLPS and UKOP might have charged on the open market for use of their facilities. If the tort had not occurred, WLPS and UKOP would not have sold the use of the facilities on the open market. Nor are we able formally to agree that the damages would represent "the economic value". The reason for that is that "economic value" is not a legally defined term, or a term of art in valuation. But we do agree, as indicated above, that the loss of use requires to be valued and that this should be done in a manner which is appropriate to the facts of the case. There are various ways of valuing a loss of use, which may involve matters such as interest on a capital value, allowances for depreciation and running costs, and so forth. The most appropriate approach in this particular case will largely depend on expert accountancy evidence and is essentially a question of fact tied to the particular circumstances of the case."
Postscript
Note 1 With the added consideration that thereby the car parks would have been filling up: this in turn would have increased the force of the explosion by enhancing the congestion in the way of the advancing flame front. [Back] Note 2 He was a Technician and thus not directly concerned with operations in the control room. [Back] Note 3 By an Agreement dated 1 April 2000 between Fina and TotalFina Great Britain Ltd, Fina agreed to transfer to Total all its business and assets. TotalFina Great Britain Ltd was later renamed Total UK Limited (“TUKL”). It became a subsidiary of Fina, which was renamed Total Downstream UK Ltd. A similar merger between Total and Elf occurred later in 2000. Elf was eventually renamed Total Milford Haven Refinery Ltd. [Back] Note 4 It is unnecessary to distinguish between Chevron and Texaco. In 1984, Texaco bought all of Chevron’s European operations. In October 2001, the whole of the Chevron Corporation merged with Texaco Inc to form the ChevronTexaco Corporation. In May 2005, “Texaco” was dropped from the holding company name and it became known as Chevron Corporation. In July 2006, Texaco Limited changed its name to Chevron Limited. [Back] Note 5 Independent in the sense of being unconnected to the gauge system. [Back] Note 6 This was with particular reference to the recommendations for preparation of a court approved list of issues, identification of the issues to which witness statements related, isolation of expert issues in an agreed form of instructions, and timetabling of the trial. [Back] Note 7 Thereafter in June further admissions were made by both Total and HOSL. It was accepted on the same basis that one or the other, subject to questions of consent in regard to claimants within the perimeter, was also liable to the claimants under the rule in Rylands v. Fletcher. [Back] Note 8 More astonishing might be thought to be the absence of fatal injury to those in the control room or even to those lorry drivers who were at the loading racks. [Back] Note 9 In the event “full responsibility for the management” of the site was undertaken by HOSL and notified to the directors by letter dated 15 October 1990. [Back] Note 10 The topic was to re-emerge in late 1993. [Back] Note 11 Pertinent to other aspects of the proceedings, this included the instruction: “Tanks must not be filled above the predetermined safe working level.” As regards product receipt from a pipeline, having earlier dealt with the question of safe flow rates, the Manual stated:
“11. …Local receipt procedures must at all times be adhered to. A check must be carried out to ensure that product is capable of being received into appropriate tanks and periodic checks made on the volumes being received once product pumping commences…” [Back] Note 12 Further exchanges between the legal departments relating to a possible variation to the indemnity provisions of the Management Agreements are discussed hereafter. [Back] Note 13 Indeed at the HOSL Board meeting on 3 March 1998, the minutes record:
“It was acknowledged that in strict terms the Joint Venture Agreement did not currently reflect the Partners’ obligations and liabilities, but may however provide an acceptable level of risk. The Partners will seek legal advice to determine whether a new agreement is essential.”
[Back] Note 14 Control of Major Accidents and Hazards Regulations 1991 [Back] Note 15 This letter furnishes a good example of the variable use of “HOSL” as an acronym for the company and an acronym for the relevant part of the Buncefield site. There are many other examples.
[Back] Note 16 i.e. documents falling under the HOSL Quality Systems Manual. [Back] Note 17 Furthermore the cut off did not operate as the trip mechanism was by-passed awaiting parts. [Back] Note 18 In fact the batch had only started at 1830 when there must have been precious little ullage available in the selected tank. [Back] Note 19 Although the organisational chart shows that Mr White as General Manager reported to Total Watford and not the HOSL Board. [Back] Note 20 For this purpose no distinction need be drawn as regards vicarious responsibility for liability arising in nuisance or in Rylands v. Fletcher. [Back] Note 21 This agreement precisely matched the earlier agreement dated September 1989 relating to Avonmouth whereby Chevron was nominated as the operator. [Back] Note 22 The very same function as was allocated to HOSL under the Operating Regulations Section A, para. 5.1. [Back] Note 23 Despite the fact that the Management Agreement had by then afforded authority to HOSL to execute such an agreement. [Back] Note 24 This is apparent from an early stage as demonstrated by Miss Mahmood’s letter of 21 December 1990 (E(B)5/21) : As an aspect of its “management strategy” Fina viewed the corporate structure as unnecessary and Texaco only want to retain it so as to match the position at Avonmouth. [Back] Note 25 D Arney and A Mack are recorded as present on Texaco’s behalf in the body of the minute but the Fina attendees are not recorded. [Back] Note 26 The reference to HOSL 89 was to a new corporate entity with that name. In the event the participants were content to make use of the existing company. [Back] Note 27 As indeed were the aviation tanks. [Back] Note 28 Latterly 5 when Elf joined. [Back] Note 29 At the time of the explosion the board had not met since 15 July 2005 and was not due to meet again until 10 March 2006. [Back] Note 30 As well as the Colnbrook rail terminal. [Back] Note 31 There was very little documentary evidence of such contact in the vast trial bundles covering the 20 years of the joint venture. [Back] Note 32 As indeed was his departure in late 1992. [Back] Note 33 Initially Mr Coalwood and later Mr Metcalfe and Mr Joliffe none of whom gave evidence. [Back] Note 34 Indeed Total sought a ROSPA award. [Back] Note 38 DNV, IKM, ERM and Osprey [Back] Note 39 Initially £20,000 and later £30 per hour. [Back] Note 40 This was recognised from an early stage. [Back] Note 41 To be contrasted with say fees for computer services (E(B) 7/176) . [Back] Note 42 Although it is clear that many of the Chevron witnesses regarded the express terms as broad enough. [Back] Note 43 Equivalent to the Max. Gross Volume (equivalent to the Max. Working Volume plus the volume below the Low Low alarm). [Back] Note 44 The Motherwell system continued to record percentage volume (e.g. 105%) and ullage figures in negative terms (e.g. – 10 cm) thereafter but not in a directly monitorable form by reference to the High High alarm. [Back] Note 45 The maritime experience is that a change of shift or watch is a crucial event which often gives rise to error. [Back] Note 46 No attempt was ever made to audit the sheets or even inspect them randomly. [Back] Note 47 The near miss in November was another feature which ought to have brought the point home. [Back] Note 48 Cf. The Marion [1984] AC 563. [Back] Note 49 And by definition for any negligence of head office staff. [Back] Note 50 See E.E. Caledonia v Orbit Valve Co [1994] 1 WLR 1515 per Lord Steyn at p.1523. [Back] Note 51 Indeed a participant was not as such going to be conducting terminal operations (negligently or otherwise): any liability would be by definition strict. [Back] Note 52 See Smith v South Wales Switchgear [1978] 1 WLR 165 per Lord Dilhorne at p.168. [Back] Note 53 The manner in which HOSL would be entitled to an indemnity does not arise. However, it would on Chevron’s case be under para. 1.2 (despite the negligence) or on Total’s case under the Accounting Procedure (para 8.2). I prefer Total’s submission.
[Back] Note 54 See the definition in clause 1.1. In my judgment Chevron have not made good any allegation of wilful misconduct on the part of Mr Nash: see below. [Back] Note 55 Yet another witness not called by Total. [Back] Note 56 See also Clerk & Lindsell 19th Ed para 21-23 [Back] Note 57 Crown River v Kimbolton [1996] 2 Lloyd’s Rep. 533 [Back] Note 58 Although issues have arisen as regards the recoverability of economic loss. [Back] Note 59 [1905] 2 K.B. 597 [Back] Note 60 [1969] 1 W.L.R. 959 [Back] Note 61 See Clerk & Lindsell on Torts 19th Ed para 20-16 [Back] Note 62 “a normal and legitimate way of proving a public nuisance is to prove a sufficiently large collection of private nuisances." see Atty Gen v PYA Quarries p 188, 190: see also R v Rimmington p 487 [Back] Note 63 As already noted this issue, which might compendiously be called the requirement for special damage, does not arise at this stage. [Back] Note 64 The Court also made reference to Iveson v Moore (1699) 1 Ld Raym 486 where obstruction to a public highway providing access to the plaintiff’s colliery prevented customer access. [Back] Note 65 See also Martin v. LCC (1899) 14 TLR 575 [Back] Note 66 Lord O’Hagan expressed agreement with Lord Westbury’s dissent in Ricket at p. 265. [Back] Note 67 Phillimore LJ dissented on the basis that the “queue was nearly as offensive as a queue can be”. [Back] Note 68 A view shared by Slade J in Gravesham Borough Council v British Railways [1978] Ch 379 at p. 398. [Back] Note 69 See also Harper v Haden [1933] Ch 298 per Lord Hanworth at p. 306. [Back] Note 70 Similar issues may arise in regard to the BP claim but I make no specific findings in relation to it. [Back] Note 71 It appeared to be common ground between Shell and Total that economic loss was not recoverable under Rylands v. Fletcher but was recoverable in public nuisance, subject to proof of special damage and subject to the issues discussed above. As regards private nuisance the position is in my judgment the same as for negligence: there must be an immediate right to possession of the land the enjoyment of which is interfered with. I do not regard Hunter v. Canary Wharf [1997] AC 655 as affording authority for the proposition that beneficial ownership is sufficient in private nuisance.
[Back] Note 72 See also Societe Anonyme de Remorquage a Helice v. Bennetts [1911] 1 KB 243 [Back] Note 73 BP Oil acquired the interest of Mobil Oil Company Ltd in WLPS in about 2000. [Back] Note 74 Although WLPS had established tariffs for non-Participant users, no third party ever used the West London Pipeline System for storing or transporting fuel. [Back] Note 75 Marine Insurance Act 1906 (1906 c 41) [Back] Note 76 See also Londonwaste Ltd v. Amec Engineering Ltd 53 Con LR 66 [Back] Note 77 Caltex Oil (Australia) Pty v The Dredge “Willemstad” (1976) 136 C.L.R. 529.
[Back] Note 78 Candlewood Navigation Corp Ltd v Mitsui OSK Lines Ltd & Anr (The Mineral Transporter) [1986] AC 1 [Back] Note 79 See also Londonwaste Ltd v. Amec Civil Engineering Ltd 53 Con LR 66 [Back] Note 80 Save in the sense that absent a claim by Shell all or part of the claims in respect of loss of use might be said to disappear down a “black hole” if irrecoverable by WLPS/UKOP although I regard this proposition as begging the question: GUS Property Management v. Littlewoods (1982) SC (HL) 157. [Back]
Appendix 1 (BPA Map)
Appendix 2
The following actions (including all Part 20 Claims which have been or may be commenced within them) together constitute the Buncefield Actions:
Folio No. | First Named Claimant | First Named Defendant |
1. 2007 No. 1057 | Colour Quest Limited | Total Downstream UK plc |
2.2007 No. 1160 | Alcon Laboratories (UK) Limited | Total Downstream UK plc |
3.2007 No. 1146 | BRE/HEMEL 1 Limited | Total Downstream UK plc |
4.2007 No. 1147 | Douglas Jessop | Total Downstream UK plc |
5.2007 No.1149 | Colbree Precision Limited | Total Downstream UK plc |
6.2007 No. 1155 | Holywell Haulage Limited | Total Downstream UK plc |
7.2007 No. 1153 | Schroff UK Limited | Total Downstream UK plc |
8.2007 No. 1150 | UK Office Supplies plc | Total Downstream UK plc |
9.2007 No. 1154 | John Morley Presentations Limited | Total Downstream UK plc |
10.2007 No. 1148 | Steria Limited | Total Downstream UK plc |
11.2007 No. 1157 | National Police Improvement Agency | Total Downstream UK plc |
12.2007 No. 1145 | ADT Fire & Security Plc | Total Downstream UK plc |
13.2007 No. 1151 | West London Pipeline & Storage Limited | Total UK Limited |
14.2007 No. 491 | Shell UK Limited | Total UK Limited |
15.2007 No. 1152 | BP Oil UK Limited | Total Downstream UK plc |
16.2007 No. 142 | Marvell UK limited | Total Downstream UK plc |
17. 2007 No. 255 | Leonard Paul Myerovitz (1) & Linda Patricia Myerovtiz (2) | Total Downstream UK plc |