Mobil Oil Hong Kong Ltd. and Another v. Hong Kong United Dockyards Ltd.
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CACV000162/1987
Headnote Negligence A "dead ship" moored to a harbour buoy in order to ride out Typhoon Ellen in September 1983 had been insufficiently prepared against the risks inherent in the situation. As a result she broke free at the height of the typhoon and eventually caused substantial damage to the Plaintiffs' shore-based installations. Prior to the onset of the typhoon the ship, which had herself earlier suffered severe damage by reason of stranding off Taiwan, had been lying within the dockyard of the Defendants awaiting instructions from the Owners as to her repair. Various factors were argued as together imposing liability upon the Defendants. Held, reversing the decision of the court below, that the circumstances did not disclose a degree of proximity between the parties sufficient to fix the Defendants with a duty of care.
_________ Coram: Hon. Cons, V.-P., Kempster & Clough, JJ.A. Dates of hearing: 4 - 7, 10 - 13 October 1988 Date of delivery of judgment: 2 November 1988 _______________ J U D G M E N T _______________ Cons, V.-P.: 1. This is an appeal from the judgment of Macdougall J. whereby he found the Defendant, Hong Kong United Dockyard Limited, ("HUD"), guilty of negligence with regard to the M.V. Hua Lien in that when she was sent out from HUD"s yard to be moored at a typhoon buoy during the passage of Typhoon Ellen in September 1983, HUD had failed to take all reasonable precautions to prevent her from creating a danger to life and property. 2. The Hua Lien, a vessel of almost 10,000 gross tonnage, was a roll on roll off passenger and cargo ferry operated by the Taiwan Car Ferry Company, Since dissolved, normally plying between Hua Lien and Keelung. On the 19th April 1983 she struck a submerged rock off Hua Lien, causing severe damage to her bottom plates with consequential flooding in the engine room and other compartments. To prevent her sinking she was beached in shallow water. 3. There was no dry dock in Taiwan capable of taking a vessel with the draft of the Hua Lien. She was brought instead to Hong Kong, arriving on the 29th May, where Mr. Temple, at that time the Senior Project Manager of HUD and generally in charge of all ship repair work in the yard, accepted her into the custody of HUD. Temporary repairs were carried out. In particular a "D shackle" was attached to the port anchor cable and one shackle's length of the cable itself, i.e. 90 feet, was slacked out, so that in the event of a typhoon the Hua Lien could be moored to a typhoon buoy in the harbour. It is the policy of HUD not to permit vessels to lie alongside their repair berths the passage of a typhoon close to Hong Kong. At the same time the yard carried out a simulated drop of the starboard anchor to ensure that it was in working order. It is advisable, when moored to a buoy and the conditions so warrant, to drop a vessel's second anchor to minimise excessive yawing. 4. By reason of her stranding the Hua Lien had become a "dead ship", i.e. in this instance, a vessel unable to proceed under its own power. As such the Hua Lien could not enter the waters of Hong Kong except with the permission of the Director of Marine. Permission had been provisionally given, subject to inspection on arrival, at a meeting attended, inter alia, by representatives of the Marine Department, including one Captain Shearman, and Mr. Temple on the 26th May. Subsequently a Dead Ship Permit was issued. Endorsed thereon were various conditions, the first being that the Hua Lien should take up a berth as and when directed. Thus on the 7th September, when Typhoon Ellen was perceived to be approaching, Hong Kong a direction was given for "the Master or officer in charge of the vessel to remove (her) to south of Kau Yi Chau, to Western Anchorage or to sea within two hours upon the No. 3. Typhoon Signal being hoisted". In fact a particular buoy in the Western Anchorage had already been allocated by the Marine Department. 5. More general conditions were that the Hua Lien should have on board a sufficient complement of deck and engine room officers, and "a qualified master during the period that any local storm signal is hoisted". To that end, Eastern World wide Shipping Ltd., the local agents of the owner, had appointed a master, engineer and second officer, all with appropriate certificates, and a further crew of three. The master accepted custody of the vessel on behalf of the owners on the 16th June, signing a formal letter to this effect. HUD were then able to dispense with the security guard which HUD had engaged meanwhile. Nine days earlier the owners had appointed a Mr. J.D. Wort of Hong Kong to act as their local superintendent. 6. Between the initial drydocking at the beginning of June, which had been necessary to effect the temporary repairs, and the arrival of Typhoon Ellen in September, the Hua Lien had been dry-docked for a second time so that further investigation could he made into what was necessary to restore her to 1st class condition. As a result various tenders and estimates were made, including a suggestion by Mr. Wort, albeit rejected by the underwriter's, that the vessel be written off as a constructive total loss. However by the time the No. 1. Signal was hoisted on the 7th September no agreement had been reached and such work as had been done was long past, other than a small correction to the ship's ballast on the 24th August. The Hua lien was simply lying alongside the berth, awaiting the outcome of the negotiations between the owners, the underwriters and the yard HUD had no other present interest in her. 7. The No. 3 Signal went up at 7.45 on the morning of the 8th September. At 10.15, In accordance with the policy of HUD and the express order of the Director of Marine, and with the assistance of three tugs and a pilot cutter, the Hua Lien was made fast by her port anchor cable to Buoy A42. On board were the master, the two officers and the crew of three. 8. At 4.45 that afternoon the No. 8 was hoisted, signalling winds of gale force, followed later by the 9, and then, at 2 o'clock the next morning by the highest signal No. 10, indicating that winds of hurricane force might he expected. So it remained until 10 a.m. During that period, when the typhoon was at its height, probably at about 7.45 a.m., the Hua Lien's mooring cable snapped, leaving her completely at the mercy of the elements. The starboard anchor, which the crew had attempted to drop earlier, was apparently jammed solid at the guillotine stopper. The tug Lamina, which had been called shortly before the cable parted, was standing by, but in the appalling conditions was unable to do more than at one stage to nudge the Hua Lien to one side as she drifted towards another vessel. Soon afterwards the crew did manage to free the starboard anchor, but it proved insufficient to hold the vessel against the wind. The tug continued to stand by as the Hua Lien dragged westward, at one time threatening the Tsing Yi bridge, and was instrumental in rescuing the crew when she eventually grounded on the island, causing substantial damage to the installations of the two Plaintiffs in the process. The assessment of the damage has been reserved for the time being. The action below proceeded on the question of liability alone. The hearing occasioned some 37 working days, the judge having the assistance of a marine assessor. 9. The "Shipmasters' Guide" is published in Hong Kong by the Director of Marine. It is a small hook intended, so the preface runs, "to provide masters of vessels called at Hong Kong with information on subjects of particular local maritime concern or application". Part I is, headed "Tronical Cyclones Affecting Hong Kong". Section 2 thereof refers to Related Port Regulations. Most of paragraphs 2.2.1 and 2.2.2 may be usefully set out:-
I may observe in passing that all 13 requirements under 2.2.2 were endorsed on the permit issued to the Hua Lien on 13th August. 10. Section 4 of Part I contains "Advice to Shipmasters" I need only refer to -
11. It is apparently the custom of HUD to hand a copy of the Shipmasters' Guide to the master of any foreign vessel which comes into its yard. That custom was followed with regard to Hua Lien, although unfortunately it was not appreciated at the time that the master was part of the Japanese salvage team due to leave Hong Kong almost immediately. No copy was given to the master who assumed custody from the yard on the 16th June or to the master who replaced him during July and was the master at the time of Typhoon Ellen. Both he and the First Mate were foreign certificated officers, although the master was a local man and had received at least some of his training in the Hong Kong Sea School. More importantly I have to observe that in any event the requirements listed in the Shipmasters' Guide, and endorsed on the Dead Ship Permit, were no more than would be expected as basic good seamanship. Certain Shearman observed that "generally speaking, a shipmaster will take these precautions without being told. It is in his training to do so". Captain Third, a marine consultant with Brookes Bell & Co., having wide seafaring experience and bolding a United Kingdom Extra Master Certificate, described them as "commonsense and fairly basic precautions." 12. It is accepted that certain of those "fairly basic precautions" had not been taken. There was no "auxiliary power capable of working anchors, windlass and ballast pumps'' (e). Repairs required to restore sufficient emergency power would have taken approximately one week to complete at a cost of approximately US$10,000, a not insubstantial sum in itself, but small when set against the total bill incurred at the yard which was for HK$4.5 million. There were no alternative means (f) of working the mooring chain or the starboard anchor, save of course, that either could be let go. 13. Likewise it is not disputed that there were no "towing lines available fore and aft ready for use" (j) and no "spare bower anchor prepared and ready for releasing (k)". Mr, Steel, who has appeared for HUD both here and below, endeavoured strenuously to persuade us that the failure to take these two particular precautions was not in fact negligent. Tow lines rigged around the ship were, he suggested, intended primarily against the risk of fire and could not in any event have been picked up by the tug during the course of the typhoon. He castigated Captain Third's suggestion of streaming a buoyed messenger astern as "original thinking" which would not be expected as a general practice. The rigging of a spare anchor for emergency release, by either of the two methods canvassed in evidence, was, he contended, unusual in Hong Kong, although perhaps not otherwise unique, and was therefore no derogation from prevailing standards of care. 14. We have been taken carefully through the relevant evidence by both Mr. Steel and by Mr. Griffiths, who has appeared for the Plaintiffs both here and below. For my part I do not think it necessary to say more than that in my view there was evidence to support the judge when he found, as it seems to me he did, that it would have been prudent to heed all the advice contained in the Shipmasters' Guide. These two particular precautions would have been useful reserve measures in the event a vessel should find herself adrift, as indeed the Hua Lien did. 15. The anchor cables of the Hua Lien, in accordance with the requirements of the China Register in which she was entered, were of U2 steel 52 mm diameter with a normal breaking strain in the order of 150 tons. The Classification Societies however permit a maximum acceptable limit of 11% for wastage and wear, which would give a breaking strain at that level in the order of 118 tons. 16. On the 16th March 1984, that is several months and one typhoon later, in which incidentally history repeated itself in that the port anchor chain of the Hua Lien again parted, Captain Third inspected a sample of the cable that had failed on the later occasion. It was part of the original cable which had been severed by the salvors in Taiwan. He took measurements of ten links, finding that some exhibited wear greater than was permitted by class standards. As however these had been taken in a manner not acceptable to the Classification Societies, in September 1986 he took further measurements, finding, as his report then indicated, "wastage/wear at levels in excess of classification allowances and are consistent with our findings upon survey in 1984". 17. Gellatly Hankey Marine Services Hong Kong, a firm which is part of an international group of marine surveyors, carried out actual tests on part of the chain used during Ellen, and found the breaking factors to be either 151 or 155 tons. The judge however felt unable to rely upon these results as they did not accurately reflect the type of load that would have been placed on a chain in typhoon conditions at the buoy. Mr. Steel suggested that the judge misunderstood the evidence in this respect. He further pointed Out that the requirements of the China Register are not necessarily the same as those of Lloyd's Register referred to in the Shipmasters' Guide and the Permit Conditions. Lloyd's Register allows ferries on certain restricted services indicated in the Register Book, (which I understand does not include the service between Hua Lien and Keelung), to be equipped with cables one grade below those which would otherwise be required. Had a reduced standard been adopted only two of the links measured by Captain Third would have fallen below requirements. 18. The judge does not appear to have given consideration to this last argument, but in my view it is of little importance. Computer exercises carried out by Mr. Byrne, a research expert, with British Maritime Technology, showed that the load factor on the cable during Ellen was at times such that even a new cable would have parted. No doubt, as the judge found, the wastage of` the cable played a part but the real cause of its snapping was not its condition but its length. When the Hua Lien was put on to the buoy the cable was fixed at one shackle. But the guillotine stopper, which is designed to hold the cable at the desired length, was faulty, and during the course of the typhoon allowed further cable to slip out. By the time Ellen was at her worst the Hua Lien was riding to seven shackles, a length agreed by all witnesses to be grossly excessive. The effect is for the ship to yaw wildly from side to side, sailing up on her chain until she is brought up at the end of the arc with a violent jerk, to repeat the process the other way. Tremendous impulse loads are imposed on the chain each time, and it must have been at such a moment that the Hua Lien's gave way parting at the link just forward of the guillotine stopper. 19. The principal fault in the stopper, as the judge found, was the lack of a securing pin. The securing bar, which is the part intended to hold the chain firmly in position, was thus able to ride up and let the chain pass out beneath. I gain the impression that this was a gradual or intermittent process, eventually stopped when a pin was found, or taken from the starboard stopper, and inserted. The chain was then held, as can be seen in the photographs, with a joining link hard against the securing bar. A joining link is very slightly lily larger than the common, open or intermediate links which form the rest of the chain. 20. Apart from the lack of the pin, the stopper generally was in a rusty and worn condition. The judge came to no definite conclusion as to whether, even with the pin in, it would have allowed the lesser links to slip by, but felt it reasonable to conclude that the slackness in the mechanism must have had "some influence on the release of the cable". 21. It is apparent from the transcript of recorded radio messages passing between the Master and the HUD Dock Master during the typhoon that at sometime before the mooring chain snapped the Master had indeed attempted to drop the starboard anchor, but found it impossible. We do not know why this was so. One suggestion is that, following the simulated drop in June, the chain had been allowed to ride up hard against the securing bar. This is a sensible procedure, for it takes the strain off the windlass brake, but in the absence of power to take the weight off the bar it would have been more difficult to raise it. All that the Master said over the radio was that the guillotine was "jammed dead and rusting". 22. No computer exercises were carried out to discover what loads would have been imposed upon the mooring cable had the starboard anchor been dropped in time. It is not possible to say therefore whether the assistance given would have been enough to save the cable, although clearly it would have been a help. It is obvious though, that the state of the anchor would have been revealed by inspection before leaving the berth, when it could, of course, have been put right with no difficulty. The same applies to the missing pin in the port guillotine stopper. 23. This brief resume of the basic facts indicates beyond doubt that the Hua Lien was negligently prepared for the typhoon. Even if the absence of wind lass power is ignored - Mr. Griffiths has not pressed strongly in this respect - there was no safety pin in the Port guillotine stopper and no back up system by way of towing lines and spare anchor. 24. The question for this Court in who is to be responsible for that negligence, or in particular, is HUD to be responsible for we are not concerned with any other liability. Put in the form appropriate to the approach taken by our law to this question, it becomes "Did HUD in the circumstances owe a duty of care to the Plaintiffs?" 25. Like the judge below we have been referred to a host of authorities. I mean no disrespect by not referring to each individually, but speaking for myself, I would suggest that the present state of the law is succinctly set out in a passage from the judgment of Balcombe L.J. in Clarke v. Bruce Lance & Co. [1988] 1 W.L.R. 881 at 884, to which my attention has been drawn by my Lord Clough J.A. -
26. It may be noted in passing that the approach is appropriate only for situations which have not so far fallen for consideration by the courts -
27. However the present is a novel type of factual situation. There are, so far as can be ascertained, no authorities which cover it.
Sir Robin Cooke (as he now is) in the New Zealand case of Rutherford v. Attorney General [1979] 1 N.Z.L.R. 403, foreshadowing to some extent the subsequent approach of the English courts,-
Later he observed that with a view to deciding questions of that kind -
28. I would respectfully add two further factors, which perhaps may he looked upon as cautionary notices rather than signposts. The first is to take care not to over emphasize the fairly obvious fact that if the Plaintiffs fail in these proceedings they will have to hear the whole of the loss themselves. I accept that in Donoghue v. Stevenson Lord Atkin spoke of the need to avoid denying a legal remedy where there was so obviously a social wrong, but there would be no complete denial, in law that is, if HUD are not to be liable in the present instance. The law has always imposed liability on the owners for tortious damage caused by their ship or its master. 29. The second warning I take from the Judgment of Lord Bridge in Curran v. N. Ireland Housing Association [1987] A.C. 718 at 724 where he referred to the "tendency to obscure the important distinction between misfeasance and non-feasance". A similar theme was pursued by Lord Goff in Smith v. Littlewoods Ltd. [1987] A.C. 241 at 270 -
30. Although there is no general duty to protect others, no affirmative obligation to intervene even though loss to another is foreseeable, Mr. Steel concedes that there may be exceptions to the rule. He accepts that one is where the Defendant is in effective control of the situation. The emphasis is my own, inserted to differentiate the position from those cases where a defendant may have a responsibility to control the acts of third parties, cases which I find to be of no assistance in the present instance. 31. To be effective in this context Mr. Steel argued that control had to he exclusive and de jure. For my part I cannot accept a test so strict. There may be occasions of joint control, and while a right to control may often be a determining factor, as for example with the architect in Clay v. A.J. Cramp & Sons Ltd., [1964] 1 Q.B. 533, lack of the right will not excuse if in fact control has been taken.. Were it otherwise then the thief who steals my car would not be liable to the pedestrian whom he injures by careless driving. 32. The judge below said -
33. He had earlier in his judgment found that HUD "accented that the responsibility for taking all necessary precautions rested with it", but in my view this aspect cannot in the present circumstances be separate from the question of control. 34. The reasons for the judge's conclusions appear to be -
As to that the relevant passage from the evidence of Mr. Byrne reads -
Unfortunately his answers were taken no further by counsel and I find for myself difficulty in reading into them more than that a dead ship being unable to prepare itself in any way that requires power or machinery, the yard had to be "involved" in the preparation in its stead. With respect to the judge below factors 4 and 5 do little if anything to show that the yard had taken over control of the vessel. I am unable to discern the relevance of factor 3 to the question of control; while factor 2 merely indicates that extra care is needed, without pointing to responsibility. 35. With regard to factor 1, the HUD Tsing Yi "Standing Instructions for Typhoon Season May/October" are divided into three parts, i.e. measures to be enforced throughout the typhoon season, measures to be introduced when a tropical storm is forming in or enters the China Seas, and action to be taken, on instructions from the management, when it is considered that a typhoon is likely to affect Hong Kong. Among the first we find -
36. Appendix 'A' sets out the full requirements of the Marine Department to which I have already referred, save as to the towing lines, harbour phone or the hot work. 37. In the second Part our attention has been particularly drawn to the provision for "Ships Under Repair, And In Floating Docks" -
And in the third part, also with regard to Ships Under Repair -
38. As I read them overall the Standing Instructions are no more than a comprehensive plan to protect the yard and HUD's own vessels including - and this is all I am able to read into the last provision quoted - an orderly evacuation of all vessels should the need arise. HUD is clearly aware, as one would expect, of the dangers inherent in rendering a ship dead during the typhoon season and of the need to take special precautions if that is done But it does not necessarily follow that HUD thereby assumes responsibility for those precautions, although I accept that the first two provisions quoted may be taken as implying that it will at least take the initiative. However that implication must be set against the very clear conditions of Clause 19(a) of HUD's Standard Conditions of Contract -
39. With all respect to the judge below, for my part I do not find the five factors established that HUD had assumed sufficient control of the Hug Lien. 40. However Mr. Griffiths does not build his case upon control as such, but upon "all the circumstances" which, he contends, together establish a sufficiently close and direct relationship of proximity to impose a duty of care upon the Respondents: see Peabody Fund v. Parkinson [1985] 1 A.C. 210 at 240G, already set out in the passage I have quoted from Clarke v. Bruce Lance & Co. and Yuen Kun Yeu v. A.G. of Hong Kong [1988] 1 A.C. 175 at 192E:-
41. In his skeleton Mr. Griffiths has listed 36 of such circumstances. From them I find myself able, I hope fairly, to deduce 5 basic themes -
42. In support of No. 1 Mr. Griffiths relies upon the words of Lord Macmillan in Donoghue v. Stevenson [1932] A.C. 562 at 620 -
43. For my part I do not think the two words I have emphasized were intended to bear the weight that Mr. Griffiths seeks to put upon them. With the greatest respect, it seems to me from the passage that follows, that the commercial interest as such, of the manufacturer played no material part in his Lordships conclusion. 44. As to No. 2, it seems to me that the mere fact that HUD had the ability to take the precautions, or, as was pointed out, that the cost of doing so would have been comparatively small, takes the matter no further. Lord Keith's bystander on a cliff could certainly shout, and it would cost him or anyone nothing. 45. I take the remaining three items together. Capt. Shearman spoke of a policy of the Marine Department to require repair yards to be personally responsible for dead ships within their keeping. It is a policy that, so far as he was aware, had never been officially promulgated but depended instead upon mutual understanding. His view is probably best summarised in an answer under cross-examination -
46. To the contrary was the evidence of Mr. Gough, the Executive Manager of HUD, who said that the first he had ever heard of such a policy was at the trial itself. 47. Capt. Shearman's reference to discussions is consistent with the meeting on the 26th May. But it has to be remembered that at that stage HUD were clearly intending to, and did, take charge of the Hua Lien on its arrival in Hong Kong. I have no doubt that from then until the 16th June HUD were fully responsible for it and it is during this period that the attachment of the buoy shackle and the test of the starboard anchor was carried out. The fact that nothing more was done and possibly would not have been done even had a typhoon arrived, seems to me immaterial. No typhoon did arrive. 48. All that HUD later did by way of precautions was to fill certain ballast tanks in order to improve the stability of the vessel. This was on the 11th July, against the approach of Typhoon Vera. It was done entirely on the initiative of HUD, although they did inform Mr. Wort of what they were about. Mr. Wort then asked them to advise the master of the fact, which may show that to his mind the master was at least to some extent concerned with the safety of the ship. Nevertheless the judge took the incident -
49. The master himself apparently took the same view. In a statement given some 18 months later, and placed before the judge under the Hearsay Rules he said -
50. The Marine Department were content. In the cross-examination of Capt. Shearman we find -
51. It is not surprising then that in a statement prepared some 4 years later, Mr. Shopin Tsu, at the material time at Vice President of the owners, should say -
52. When one considers the situation as it was, say towards the end. of August, it is clear that HUD knew that no further precautions had been taken. They had not been instructed to do so and without their assistance, the appropriate precautions would have been impossible. HUD knew too - so it follows from the judge's finding - that the master himself was taking no interest. If HUD had stepped in to take the precautions on its own behalf, they may have been able to rely upon Clause 8 of the Schedule of Rates and Charges to recover their outlay. In that situation it may well be that the fair and reasonable man, knowing that it was the season for typhoons, and of the risks inherent in mooring a dead ship to a buoy, would have said that HUD ought to have so stepped in. 53. But to that situation must be added the fact that maritime law has traditionally looked to the owners to be responsible for the safety of their ships, a position reinforced by Clause 19 of the Standard Conditions of HUD. Furthermore the owners had local agents in Hong Kong, and had specifically appointed a local superintendent. It has been suggested that Mr. Wort was in reality no more than a technical adviser with regard to the repairs, but his insistence on the master being told about the ballasting operation, his requests to HUD with regard to food for the crew and other services, and his instructions to correct the slight list on the 28th August indicate that he took his duties to go further than that. There is no other yard now in Hong Kong from whom information as to standard practices could be sought, but it is pertinent, I, think, to note that no evidence was called from yards in other parts of the world which are affected by typhoons, nor, which is also important, was there any suggestion in the immediate aftermath of Ellen, or of Joe, when the Hua Lien again broke free from its mooring, from either the Marine Department or the owners that HUD were in any way to blame. 54. In the end I find myself not persuaded that in all the circumstances of this case there did exist such close and direct relations as to give rise to a duty of care on HUD I would therefore allow the appeal and enter judgment in their favour. 55. As I understand my Lords Kempster and Clough are of the same opinion I do not think there is anything to be gained by a consideration of the detailed submissions made by Mr. Steel to the effect that, were e take a different view, the damage suffered by the Plaintiffs was still nevertheless not the result of any negligence on the part of HUD.
Kempster, J.A. : 56. I agree that this appeal should he allowed and gratefully adopt the account of the relevant facts and the reasons for his conclusions given by Cons V.-P. I only venture to explain my own approach to the duty of care' in deference to the exhaustive analysis of matters of fact and law appearing in the judgment of Macdougall J. 57. Essentially the success of the claim advanced by the respondents derived from their ability to satisfy the judge that, in the circumstances outlined, which do not fall into a category already recognised as giving rise to a duty of care, the appellants were not only morally but legally required to take positive action to make good the omissions of the ship's owners and thus to obviate a foreseeable physical danger to the property of the respondents, who had given no consideration; such danger being none of the appellants' making. This is a duty conceptually different from that requiring the appellants to refrain from causing the respondents harm. The outcome of this appeal accordingly depends in great part on whether or not the judge should, as a mixed matter of law and fact, have so been satisfied. 58. If reasonable foreseeability of damage is without more to be equated with proximity, as Lord Wilberforce was thought to have suggested in Anns v Merton London Borough Council [1978] AC 728 at pp 751-752 the respondents must succeed but in McLoughlin v O'Brian [1983] 1 AC 410 at p 420 he explained
Further, as was pointed out by Lord Keith in Yuen Kun Yeu v AG of Hong Kong [1988] AC 175 at p 191:
per Lord Goff in Smith v Littlewoods [1987] AC 241 at p 278 and that assumption of responibility is and, in the absence of reliance, cannot be relied upon this is not a case where "reason and good sense at once point the way", per Lord Morris in Dorset Yacht Co Ltd v Home Office [1970] AC 1004 at. p 1039. The factors germane to proximity therefore warrant careful consideration. 59. Macdougall J emphasised the importance of control as such a factor and directed himself on the law as explained in Peabody Fund v Sir Lindsay Parkinson Ltd [1985] AC 210; Curran v Northern Ireland Co-ownership Housing Association [1987] AC 713 and Yuen Yeu v AG of Hong Kong; being cases involving such relationships as parent and child, schoolmaster and pupil, prison officer and Borstal boy, mental hospital and lunatic and statutory body and depositor or house purchaser. He then went on to base his conclusion that the appellants owed the respondents a duty of care on the measure of control which he found that they exercised over the Hua Lien; a "dead and potential danger to the respondents. 60. Accepting as I do the importance of the factor of control, of "all the circumstances" relied upon by the respondents the most significant, I find myself unable to agree with the judge's findings in this regard. While the appellants, like the Marine Department, required and arranged for the Hua Lien to be moved to a buoy on the approach of a succession of typhoons the commercial nature of their overall operations had no more relevance to control than their internal instructions, contractual right to charge the owners for typhoon precautions, needed, for example, to recover the cost of chartering tugs, or capacity to carry them out. None of such factors could be material unless, de jure or de facto, the appellants had sole or joint control of, the vessel or, which is not suggested, were contractually liable to the owners to carry out these precautions. The willingness of owners representatives to seek and accept advice or services, sometimes by way of ratification, or the arrangements made by the appellants for and on behalf of the owners for tugs and supplies do not suffice. As from 16th June 1983 possession of the Hua Lien was firmly vested in the owners and any waiver of clause 19 of the appellants' standard condition's terminated. By their superintendent, agents and the presence of members of their crew, the owners thereafter exercised exclusive control over the vessel and in consequence owed a duty of care to the respondents in conformity with accepted principles of maritime law and legislation. Like occupiers of land they were in the best position to recognise and remedy risks to others. Foreseeability not being in issue I accept that the appellants may have exercised a degree of control giving rise to a duty of care to the respondents after they had accepted the vessel from the salvors and prior to 16th June but, since it is not suggested that they had enhanced the danger to the respondents by anything they then did, the efficacy of the precautions they had taken is neither here nor there. After 16th June they awaited further instructions, possible to carry out major repairs, pending which the Hua Lien remained alongside their wharf. In my opinion and accepting that the master and crew might not have raised objection the appellants, albeit they had their own reasons for concern about its safety, were not entitled to board the vessel, in the absence of invitation, for any purpose other than attending to the moorings. If this be right they were not even co-occupiers. Nothing then remains as a basis for the judge's finding of "a substantial measure of control over the vessel." save his conclusion that the appellants had scant regard for the abilities and commitment of master and crew; which goes only to foreseeability. In the circumstances I find no basis for that finding.
per Lord Pearce in Hedley Byrne & Co Ltd v Heller & Partners (1964 AC 465) at p 536. But this exercise is not called for until liability has first been made out on a proximity basis [Yuen Kun Yeu v AG of Hong Kong at p 193] in relation to which, as Cooke J pointed out in Rutherford v Attorney General [1976] 1 NZLR 403 at p 411, guidelines and "control mechanisms" are available. The relevance of non-feasance as opposed to misfeasance, emphasised by Lord Bridge in Curran at p. 724, is one of those guidelines 61. Another is the scope of the duty sought to be imposed. Smith v Littlewoods at p 269. For my part I cannot envisage any obligation arising other than the equivalent of that of the owners. To report to the Marine Department, not suggested by the respondents, or, which is, to provide and rig towing lines and a spare bower anchor would not meet the hypothetical standard. Accordingly compliance with the provisions outlined in paragraph 2.2.2 "Requirements for dead ships under Repair" in "Shipmasters Guide" described by the trial judge as "the distillation of generations of sea-faring wisdom and experience" would be called for. These include having "auxiliary power available capable of working anchors, windlass and ballast pumps and "alternative means of working anchors in the event of the windlass being under repair" Very substantial work and expenditure would have been needed at a time when the ability of the owners to reimburse the appellants was not assured. 62. Yet another guideline or control mechanism is the availability of a remedy against the owners, for what it is or was worth, La Banque Financiere v Westgate English Court of Appeal 28th July 1988 (Unreported) at pp 113 and 114. 63. Finally we cannot ignore the changed approach of the superior courts to the imposition of liability for negligence and the scope of any duty held to arise in novel situations as demonstrated by cases reported since March 1986 when, in considering the appeal of Yuen Kun Yeu and others, claiming damages for purely economic loss, this court was faced with the implications of the speeches of the majority of the Huse of Lords in Junior Books Ltd v Veitchi Co Ltd [1983] 1 AC 520, Now it is rather to the dissenting speech of Lord Brandon that we would be advised to turn. D & F Estates Ltd v Church Commissioners [1988] 3 WLR 368 at p 381 per Lord Bridge and at n 394 per Lord Oliver with whom Lord Templeman, Lord Ackner and Lord Jauncey agreed. 64. "In the end" said Robert Goff LJ in Paterson & Co v Merfarken Ltd [1986] 3 All ER 522 at p 540 "the choice must be one of judgment and, in the balancing of conflicting interest; and in the exercise of that judgment the court must strive neither unjustifiably to deprive potential plaintiffs of remedies for their injuries nor unjustifiably to impose too heavy a legal responsibility on potential defendants". Accepting and applying that test in the light of the authorities and of the foregoing considerations I conclude that the appellants owed no duty of care to the respondents.
Clough, J.A. : 65. I agree that this appeal should be allowed and, although we are differing from the careful reserved Judgment of Macdougall J., I have nothing to add to the reasons for that conclusion which have been stated by my Lords Cons V.-P. and Kempster J.A.
Representation: David Steel, Q.C. & Charles Haddon-Cave (M/s Crump & Co) for Defendants/Appellants John Griffiths, Q.C. & William Stone (M/s Johnson Stokes & Master) for Plaintiffs/Respondents |