England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION

		Royal Courts of Justice Strand, London WC2A 2LL
		23 May 2001

There is before the Court an application by the owners and mortgagee bank of the " Kastor Too" for summary judgment against the hull and machinery insurers of the vessel claiming $U.S. 3 million said to be due upon the total loss of the vessel by insured perils of fire and/or explosion on 10th March 2000.

The Facts.

The "Kastor Too" was a bulk carrier of some 10,933 G.RT. and 6,250 net built in Japan in 1977 and registered in Limassol. She was insured by the Defendants under a policy incorporating the Institute Time Clauses, Hulls, 1.10.83 in respect of loss by perils of the seas, fire, explosion and negligence of Master, officers, crew or pilots at an agreed value of $ 3 million.

On 29/3/00 she sailed from Aqaba in the Gulf with a full cargo of rock phosphate bound for Vizag in India.

The following account of her loss is taken from statements of the officers and crew made at Colombo within a week or so of the loss where they were all interviewed by representatives of both the Owners and the insurers. The statements before me were those taken on behalf of the Owners.

On 9/3/00 the vessel was off Socotra Island in fair weather and calm seas when at about 14.20 a fire was discovered in the engine room. The seat of the fire appeared to in the vicinity of the starboard forward upper purifier flat and/or the workshop area under the flat. An unsuccessful attempt was made to extinguish the fire with hand held extinguishers. An explosion was heard in the engine room. The decision was made to seal off the engine room and release C02 from the fixed system. Initially this appeared to have some effect in controlling the fire but after about thirty minutes a second explosion was heard followed by an increase in smoke from the funnel and the starboard engine room ventilator. At about 17.30, some three hours after discovery of the fire, the crew were ordered to abandon ship. The life boats were situated on the port and starboard sides just forward of the accommodation at the after end of No. 4 cargo hold. The Master and Chief Engineer were the last to enter the boats and while they were still on deck they heard what they described as a loud explosion and say that they saw smoke coming from the after end of No. 4 Cargo hold just forward of the accommodation. Some other, but not all members of the crew heard an explosion, described with varying degree of severity. No other member of the crew reported seeing smoke from the after end of No. 4 hold. Shortly afterwards the aft trim of the vessel was observed to have increased. On 10/3/00 the vessel sank in deep water about twelve hours after she was abandoned and about fifteen hours after discovery of the fire. The crew were rescued and taken to Colombo where they were interviewed by representatives of the Owners and insurers.

The Pleadings.

Paragraph 6 of the Particulars of Claim alleges that the fire caused a series of explosions and that the fire and/or explosions caused such damage to the vessel as allowed sea water to flood the engine room, No. 4 hold and double bottom tanks thereby causing the vessel to sink. Paragraph 6(5) pleads reliance on a Report dated 25/7/00 of Mr. Charlton of Burgoynes" …for further particulars of the likely series of events..." which lead to the loss of the vessel.

The Amended Defence does not plead any positive case as to the cause of the loss of the vessel and certainly does not suggest any connivance on the part of Owners. The Claimants are put to proof of the fire and explosions and the Defence asserts in paragraph 5 .4 that ". . . a fire in the engine room and consequent explosions would not have caused and did not cause the flooding of No. 4 hold, or any double bottom tanks, or any other spaces in the vessel than the engine room, or the sinking of the vessel."

The Application for Summary Judgment

is founded on CPR. Part 24.2, which provides;

"the court may give judgment against a... defendant ...if

(a) it considers that -

(ii) the defendant has no real prospect of successfully defending the claim . .. .and (b) there is no other reason why the claim. . . should be disposed of at trial."

Mr. Baker's first and bold submission was that in the light of CPR. Part 16.5(5), which requires a defendant who denies the claimant's allegations to state his reason for so doing and also to state his own version of events if different, the Defendants have no real prospect of successfully defending this claim and further that the Claimants were not even required to "delve into" the precise mechanism of how the vessel came to sink. He said that the court should be satisfied that the vessel sustained fire and explosions and in the absence of any positive case put forward by the underwriters should find that the vessel sank as a consequence of these without further inquiry.

I have no doubt that on the facts of this case this approach is manifestly incorrect in law.

Firstly, the Defendants have complied with CPR. Part 16.5(2) by pleading in paragraph 5.4 of their Defence that fire and explosions in the engine room could not and did not cause flooding in No. 4 hold or the double bottom tanks.

Secondly, the Claimants themselves have expressly pleaded a positive case on causation of loss by sinking of the vessel by incorporation of Mr. Charlton's opinion set out in his report.

Thirdly, as a matter of substantive law the ultimate burden rests upon the Claimants to prove upon a balance of probability that the vessel was lost by insured perils even if a credible alternative explanation for the loss is neither advanced nor proved by underwriters. This principle was affirmed by the decision of the House of Lords in The Popi M [1985] 2 LL. R. 1 in a case founded on perils of the seas. Mr. Baker relies only on the perils of fire and/or explosion for the purpose of the present application and seeks to distinguish this decision on the grounds that perils of the seas requires proof of a fortuitous event causing ingress of sea water as in the The Popi M. He argues that a fire or an explosion is an insured peril without further qualification and if the insured proves a fire or an explosion he does not have to negative negligence or intent in relation to its cause in order to establish the existence of the peril. This is correct so far as the definition of the insured peril is concerned but the insured must always establish that the operation of the insured peril caused the loss claimed. The claim is for the total loss of the vessel by sinking. Whether the fire and/or explosions caused the vessel to sink is very much in issue in this case and the insurers require the Claimants to prove this to the requisite legal standard.

The Evidence on the Application.

Apart from the crew statements both parties submitted expert evidence in the form of written reports. The Claimants relied on the report from Mr. Charlton, who described himself as a fire safety engineer and frankly conceded that he was "... not qualified to discuss the reasons why the vessel sank, in terms of marine engineering and stability considerations." So far as stability was concerned the Claimants produced expert calculations, which were not challenged by the Defendants, which demonstrated that the vessel would not have sunk in the prevailing sea conditions solely by reason of flooding of the engine room. The buoyancy of the vessel was such that flooding of the engine room together with No. 4 hold and adjacent double bottom tanks would have to occur before the vessel would sink.

The Defendants adduced reports from Dr. Bound of Minton, Trehane & Davies Ltd., who has 18 years' experience of investigating losses caused by fire and explosion including those in a maritime context. They also submitted reports by Mr. Todd of Brookes, Bell, Jarrett, Kirman. Mr. Todd is a qualified Chartered Engineer with a First Class Engineer's Certificate of Competency for steam and motor vessels. He had 14 years' sea experience on a variety of vessels before specialising in marine casualty investigation work amongst other related maritime matters.

Proposed Mechanism of Loss of the Vessel.

The questions posed by the loss of the vessel concern;

1) the origin of the fire,

2) the cause and locations of the explosions,

3) the sequence of flooding of a) the engine room, and b) the No.4 hold and double bottom tanks.

There is no direct physical or even unanimous eye witness evidence relating to any of the above. The Claimants' case and any answer to it depends entirely upon the necessarily hypothetical opinions of the various experts based upon the narrative contained in the crew statements and the characteristics of the vessel as shown in her plans and drawings. There were only very limited extracts from the ship's plans in reduced photocopy format in the evidence adduced on the application before me and I had no assistance in the form of an expert's explanation of their effect and significance other than the necessarily brief references in their written reports. On any view this was a most unsatisfactory basis to make any confident assessment of the ultimate persuasiveness of the rival expert contentions.

The starting point is the uncontested fact that this was a very unusual casualty. Experience shows that modern merchant vessels, even those built in 1977, do not usually sink as a result of fires in the engine room. This was the unchallenged evidence of Mr. Todd and Dr. Bound and is supported by a study conducted by N.K.K. into 73 cases of engine room fires between 1980 and 1992 of which only one resulted in the loss of the vessel for reasons which were not explained.

Even the origin of the fire is unclear in this case. Mr. Charlton suggests that this might have been caused by some unidentified fault in the oil purifier which was in use at the time or possibly by an electrical fault in the cables supplying power from a source in the engine room to an electric welding device which was being used on deck.

Mr. Charlton considers that the engine room could have flooded if the fire, which started high up in the engine room, had spread downwards towards the bottom of the engine room and attacked valves on sea water lines causing leakages into the engine room. The Defendants accept this is possible but point out that quick closing valves should have cut off oil required to fuel such a downward spread of fire and this theory presupposes some defect in these valves.

Even if the engine room flooded in the manner proposed there remains a serious question as to how events in the engine room could have led to flooding of the No. 4 hold and double bottom tanks. Mr. Charlton proposes a number of what he describes as possible sequences of events that might in theory, and it is no more than that, account for this. The most promising from Owners' point of view is an explosion in the No. 4 hold starboard topside fuel oil tank which Mr. Charlton says is supported by the statements of the Master and Chief Engineer just before they embarked into a lifeboat. The No.4 hold was separated from the engine room by a water tight bulkhead at frame No. 36. The purifier flat was situated in the engine room immediately aft of this bulkhead at about sea level. A tank, part filled with heavy fuel oil at the time, extended forward from the engine room/ No .4 hold bulkhead into the starboard topside of No. 4 hold. This tank was partly above and partly below the water line. There was a diesel oil service and settling tank on the purifier flat at a distance 1.5 metres aft of the bulkhead. Mr. Charlton suggested that the evidence of the Master and Chief Engineer as to the third explosion and appearance of smoke from the after end of No.4 hold as they were about to embark into the life boat could indicate an explosion in the No. 4 topside tank causing a rupture in the bulkhead between the engine room and No. 4 hold and permitting the hold to flood from the engine room.

The Defendant's experts pointed out a number of difficulties in this scenario, some of which had been acknowledged by Mr. Charlton himself.

The starting point is the observations of the Master and Chief Engineer. The Defendants say, even if they did indeed see smoke towards the after end of No. 4 hold, which was not seen by anyone else, it does not follow that it came from the hold as opposed to deck or accommodation openings such as ventilation ducts, broken air vents or sounding pipes.

In order to produce an explosion in this tank there would have to be an explosive mixture within the tank together with a source of ignition, which incidentally has not been identified. Mr. Charlton accepts that the oil in the tank should not have been heated beyond its flash point so as to produce an explosive mixture but he postulates that ". ..some residual fuel oils have true flash points at temperatures well below the quoted flash point values, so called "gassy" fuel oils ...." because of retained light fractions. In this case the fuel was not a residual fuel oil but IFO 120 and very unlikely to have contained light fractions in the opinion of the Defendants' experts. There is certainly no evidence that it did so.

Apart from this consideration, an explosion of sufficient severity to rupture this bulkhead would have occurred as the crew were still alongside in its immediate vicinity and one would have expected it to have been very obvious to everyone. Although some members of the crew report a loud explosion others do not.

The rupture would have been at high level and there would have to have been substantial flooding of the engine room before water would have started to flow into No.4 hold. This suggests a more prolonged time than the fifteen hours from the discovery of the fire to the final sinking which the Defendant's experts say was short for a casualty of this nature.

Other possibilities considered by Mr. Charlton and the Defendants' experts comments on them included the following.

An explosion in the No. 4 port or starboard double bottom fuel tanks which were mainly situated under No. 4 hold but part of which extended one frame aft of the engine room bulkhead at the bottom of the engine room. This theory is subject to the same difficulty that the fuel was IFO 120 and would not explode unless the flash point was lowered by the presence of light fractions which would be unlikely to be present. The tanks were well below the water line and the source of the fire and cooled by sea water and even if they could have been heated to an explosive temperature, itself involving a downward spread of the fire which should have been prevented by self closing valves on the fuel lines, there is no obvious source of ignition within the tanks.

A postulated explosion in the double bottom diesel oil tanks between frames 35 and 29 in the engine room is said to be unlikely for similar reasons, "gassy" diesel being unheard of, and the tanks were not immediately adjacent to the forward bulkhead.

The unlikely possibility of an explosion in the No.5 topside diesel tanks could not have damaged the forward bulkhead as they were situated some 13 metres aft of the bulkhead and any possible damage to piping or even shell plating in way of these tanks in the engine room would not have caused flooding in No. 4 cargo hold.

The free standing settling and service oil tanks on the purifier flat were nearer the source of the fire but were situated some 1.5 metres aft of the bulkhead and any explosion in these tanks would probably have resulted in rupture at the welded seams of the tanks rather than failure of the bulkhead.

Mr. Charlton's somewhat guarded conclusion was that, "Overall, therefore, there are plausible scenarios to explain the flooding of the ship beyond the engine room once the sea valves in the engine room had been damaged by fire attack."

The Defendant's experts do not go so far as to say this is impossible but they are firmly of the opinion that it is improbable.

Conclusion

An explosion in the No. 4 hold starboard topside tank seems to be Mr. Charlton's favoured mechanism for flooding of No.4 hold. In so far as this possibility, as well as each of the other scenarios considered by Mr. Charlton is concerned, having regard to the matters raised by the reports of the Defendants' experts and without the benefit of cross examination of the experts, and indeed of the ship's witnesses as to precisely what they saw and heard and when, I am quite unable to say at this stage upon the basis of the conflict of expert opinion as to the probabilities and without a detailed and expertly guided consideration of the ship's plans, that the Defendants have no real prospect of defending this claim. At the end of a full trial a court may or may not conclude that the Claimants have satisfied the burden of establishing a loss by an insured peril upon a balance of probability but I am not presently able to say whether or not they will be able to do so. Accordingly, the Claimants' application for summary judgment fails and is dismissed.