Home Information Cases Colour Quest v Total Downstream [2009]

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Colour Quest v Total Downstream [2009]

Summary

As a matter of fact companies in the Total group had control of tank filling operations at the part of the Buncefield oil storage depot where an explosion occurred and were vicariously liable for the careless tank filling activities of their employees. One of the causes of the explosion was the failure to promulgate an adequate system to prevent overfilling of a tank.

Facts

The court was required to determine preliminary issues in proceedings arising out of explosions at the Buncefield oil storage depot. The cause of the explosions was the ignition of an enormous vapour cloud that had developed from the spillage of some 300 tons of petrol from a storage tank. The tank was part of the operations of the third defendant (H), a joint venture company between two oil companies (T and C) which owned 60 and 40 per cent respectively of H. There ensued a large fire which engulfed a further 20 fuel storage tanks. Apart from damage to a large proportion of the Buncefield site, significant damage was also caused to both commercial and residential properties outside the perimeter of the depot, in particular on the adjacent industrial estate. The claimants consisted of companies, many situated on the industrial estate, and individuals resident in the vicinity of the depot and companies which owned the other storage facilities and a warehouse at the site. Summary judgment was given for the claimants in the light of admissions made by T and H that either one or the other was vicariously liable for various acts of negligence by the relevant supervisor on duty at Buncefield on the night of the explosions. The main preliminary issue was whether T or H was vicariously liable for the faults in the operation of the site which were causative of the explosion: the relevant employee (N) was employed by T and the issue was whether, having been seconded to H, he was to be regarded as the employee of H, thus rendering H liable in place of T. T submitted that the effect of the relevant joint venture agreements was that, as between T and C, the site was to be operated by H, the relevant employees worked under the immediate direction of the board of H and H retained ultimate responsibility for directing and controlling the manner of tank filling operations. C submitted that H discharged its obligations by delegating its functions to T, such functions being performed by employees of T both on and off site.

Held

(1) The identity of the person vicariously liable for the careless tank filling activities of N was a question of fact. As a matter of fact T had control of tank filling operations. T failed to establish that H was responsible for the negligence of N. The activities of the on-site staff were under the control of T and not H. (2) One of the causes of the explosion was the failure to promulgate an adequate system to prevent overfilling of a tank. That was a fault of T's head office staff. (3) T was not entitled to a contractual indemnity as against C or H, because the relevant clauses were not intended to indemnify a party in respect of its own negligence. (4) T was liable to claimants outside the site under Rylands v Fletcher. It could not avoid liability under Rylands v Fletcher and in nuisance to those within the site on the basis that they had consented to the oil storage. Where there was negligence there was no defence available because the consent was vitiated, Attorney General v Cory Bros & Co Ltd (No1) (1921) 1 AC 521 HL considered and A Prosser & Son Ltd v Levy (1955) 1 WLR 1224 CA followed. (5) The claimants, subject to proof of damage, had a claim in private nuisance. There could be liability in private nuisance for a single or isolated escape as opposed to a state of affairs where there was both unreasonable or negligent user of land and foreseeability of escape, Midwood & Co v Manchester Corp (1905) 2 KB 597 CA followed. (6) The explosion endangered the health and comfort of the public at large. Subject to establishing loss, there was a claim in public nuisance, R v Rimmington (Anthony) (2005) UKHL 63, (2006) 1 AC 459 applied, Attorney General v PYA Quarries Ltd (No1) (1957) 2 QB 169 CA and Corby Group Litigation Claimants v Corby BC (2008) EWCA Civ 463, (2009) QB 335 followed. The causes of action in public and private nuisance were not mutually exclusive. A claimant could recover damages in public nuisance where access to or from his premises was obstructed so as to occasion a loss of trade, Wilkes v Hungerford Market Co 132 ER 110 CCP and Blundy Clark & Co Ltd v London & North Eastern Railway Co (1931) 2 KB 334 CA followed. There was no requirement that those who suffered special damage in proximity to the explosion had to show a proprietary interest before they could recover, PYA, Rimmington, Corby and Moto Hospitality Ltd v Secretary of State for Transport (2007) EWCA Civ 764, (2008) 1 WLR 2822 followed. (7) The claims of an oil company (S) arising out of its inability to use the pipelines from the site failed. S did not have the necessary legal ownership of the pipeline or right to possession, Leigh & Sillivan Ltd v Aliakmon Shipping Co Ltd (The Aliakmon) (1986) AC 785 HL followed. S's claim did not fall within any exception to the usual rule, Morrison Steamship Co Ltd v Owners of Cargo Lately Laden on Board the Greystoke Castle (1947) AC 265 HL and Caltex Oil (Australia) Pty v Dredge Willemstad, The 136 CLR 529 HC (Aus) considered.

Preliminary issues determined

Queen's Bench Division
David Steel J
Judgment date
20 March 2009
References

LTL 25/3/2009 : [2009] EWHC 540 (Comm)