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Cite as: 1999 SCLR 225, [1998] ScotCS 83

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OPINION OF LORD GILL

in the cause

SKERRIES SALMON LIMITED

Pursuer;

against

(First) THE BRAER CORPORATION; (Second) ASSURANCEFORENINGEN SKULD

Defenders:

and

THE INTERNATIONAL OIL POLLUTION COMPENSATION FUND

Minuter:

________________

1 December 1998

I Introduction

This action arises from the loss of the Braer at Garths Ness, Shetland on 5 January 1993. The action has been debated on the Procedure Roll on the preliminary pleas for the defenders and the minuter. In the course of the debate the pursuers have abandoned the action against the former second, third, and fourth defenders, who were said to be directors of the first defenders, and have radically amended the conclusions. This has narrowed the scope of the debate to two matters, namely the relevancy of the pursuers' claim and the specification of the averments of loss.

The pursuers are a company whose principal activity is salmon farming. The first defenders were the owners of the Braer. The now second defenders were the insurers. The minuter is the International Oil Pollution Compensation Fund. By virtue of section 6 of the Merchant Shipping Act 1974 the Fund is entitled to intervene in the process.

The pursuers now have three principal Conclusions, in the following terms:

"1 For Declarator that

(a) While carrying a cargo of persistent oil in bulk, namely 84,000 tons or thereby of Norwegian Gullfaks crude oil, the MV "Braer" ran aground off Garth's Ness Zetland on 5 January 1993, so allowing a quantity of the said oil to escape from said vessel;

(b) that the First Defender was then the owner of said vessel and

(c) that the First Defender has in consequence incurred a liability to the Pursuer under the first section of the Merchant Shipping (Oil Pollution) Act 1971 for such damage or loss as the Pursuer has been caused by contamination resulting from the said escape of oil;

2 For Declarator that

(a) as at the date of said escape of oil there was extant a Certificate issued under the authority of the Government of Liberia certificating that there was in force in respect of the MV Braer a contract of insurance or other security conform to the requirements of Article VII of the International Convention on Civil Liability for Oil Pollution Damage signed at Brussels between 29th November 1969 and 31st December 1970, which insurance or other security had been granted by the Second Defender, and

(b) the Pursuer is therefore entitled under the twelfth section of the said Act to enforce his claim in respect of the liability referred to in Head (c) of Conclusion 1 above against the second named Defender.

3 For payment to the Pursuer by the second Defender of such proportion of the amount paid into Court by the second Defender pursuant to the fifth and twelfth sections of the said Act as £399,416.03 Sterling, or such a lesser figure as to the court may seem the true extent of the liability referred to in Head (c) of Conclusion 1 hereof, shall bear to the total value of the whole liability to all Pursuers which the Court shall hold to have been incurred by the First Defender under the first section of the said Act in consequence of the said escape of oil from the MV Braer".

The pursuers' averments set out a brief narrative of the grounding of the Braer, the breaking up of the ship; the discharge into the sea of virtually all of its cargo of oil (Cond 2), and the imposition of the fishing Exclusion Zone in the area affected by oil pollution (Cond 3).

The pursuers aver that the mishap affected their business in the following way:-

"The said accident and the consequent pollution damage attracted world-wide publicity. Prior to said accident Shetland produced fish and fish products were highly regarded worldwide for their quality. The said accident had a profound detrimental effect on both the quality of and the image of the quality of Shetland produced fish and fish products. In consequence, demand forShetland produced fish and fish products, including farmed salmon, decreased dramatically. In consequence the pursuer sustained the loss and damage being pollution damage hereinafter condesdended on (Cond 4) ... The principal activity of the pursuer is that of salmon farming. The financial viability of the pursuer is directly dependent upon salmon farming. The contamination caused by the escape of the said oil affected the area in which the pursuer's activities were being carried out. The pollution damage affected its business. With reference to the defenders' averments in answer it is admitted that the pursuer's fish farm was at all times outwith the exclusion zone imposed as aforesaid by Her Majesty's Government. Admitted that no oil from the "Braer" has thus far been detected in the water in the vicinity of the pursuer's salmon farm. Admitted that there was no oil contamination of the pursuer's nets, cages or fish as a result of the said escape of oil from the "Braer" (Cond 7) ... "

The admissions that I have quoted are direct admissions of averments made by the defenders and the minuter.

The pursuers' claim is made under two heads, namely loss of profit and "necessary administration costs". The pursuers' averments are as follows

"As a result of the oil pollution the pursuer has sustained serious loss, injury and damage. It has sustained pollution damage. Following the incident in the course of the ensuing thirty months the pursuer was forced to sell its farm produce at greatly reduced prices. The pursuer's business profit was reduced by an amount equal to the price loss hereinafter condescended on. Prior to the said incident, from January 1989 onwards the price secured for the sale of Shetland farmed salmon, such as that produced and sold by the pursuer, bore a consistent correlation to the price secured on the sale of comparable Norwegian salmon. But for the said incident the said consistent price correlation would have been maintained. The pursuer's loss is the difference between the price which would have been secured having regard to the said pre-incident correlation between Norwegian and Shetland prices, and the prices actually secured. The Schedule appended hereto catalogues the pursuer's loss, on a month to month basis, for the period of 30 months following said incident as calculated on the basis hereinbefore condescended on. On the Second Schedule appended hereto there is catalogued, on a month to month basis, a comparison of Norwegian and Shetland prices over the period from January 1989 to October 1995. The figures for Norwegian prices are on the basis of prices as reported by Kontali. The Shetland prices are on the basis as reported by Framgord Limited, a specialist sales marketing and distribution company based in Shetland who purchase, at predetermined prices, the farmed salmon produced by the majority of salmon farmers in Shetland. Said Schedules are referred to for their terms which are held to be repeated herein brevitatis causa. The pursuer has incurred necessary administration costs in connection with the preparation of quantification of the present claim in the sum of £19,111. The pursuer has received an interim payment from the International Oil Pollution Compensation Fund as shown in the first of the said Schedules. Accordingly the pursuer's loss is represented by the sum sued for (Cond 8) ..."

The First Schedule contains a table of figures representing a calculation of losses in the months from January 1993 to June 1995, together with an interest calculation. It is not obvious how this Schedule vouches the sum sued for. The Second Schedule contains tables of figures that bear to be a comparison of Norwegian and Shetland prices in the months from January 1989 to December 1992. It is not obvious how these figures support the averment that in that period there was "a consistent correlation" between the prices of Norwegian and Shetland salmon.

On the basis of these averments, the pursuers impute liability for their alleged losses to the first defenders under section 1 of the Merchant Shipping (Oil Pollution) Act 1971 (Cond 5) and to the second defenders under section 12 (Cond 6).

The defenders' pleas-in-law include the following:

"1 The pursuer's averments being irrelevant and insufficient in law to support the Conclusions of the Summons, the action should be dismissed.

2 The pursuer's averments being essentially lacking in specification, the action should be dismissed."

The minuter's pleas-in-law include the following:

"1 The pursuer's averments being irrelevant et separatim being lacking in specification, the action should be dismissed.

2 Separatim, the pursuer's claim in respect of administration costs in pursuing this claim being irrelevant et separatim being lacking in specification, the action should be dismissed."

II The statutory provisions

Section 1 of the 1971 Act provides inter alia as follows:

"1. (1) Where, as a result of any occurrence taking place while a ship is carrying a cargo of persistent oil in bulk, any persistent oil carried by the ship (whether as part of the cargo or otherwise) is discharged or escapes from the ship, the owner of the ship shall be liable, except as otherwise provided by this Act, -

(a) for any damage caused in the area of the United Kingdom by
contamination resulting from the discharge or escape; and

(b) for the cost of any measures reasonably taken after the discharge or escape for the purpose of preventing or reducing any such damage in the area of the United Kingdom; and

Section 20 provides, inter alia, that "'damage' includes loss."

Section 12 provides, inter alia, that where it is alleged that the owner of the ship has incurred a liability under section 1, proceedings to enforce a claim in respect of the liability may be brought against the insurer of the ship.

III The submissions for the parties

Counsel for the defenders submitted (1) that on their own averments and admissions the pursuers could not be said to have suffered "damage caused ... by contamination" within the meaning of section 1(1)(a) of the 1971 Act; (2) that they had suffered no more than relational economic loss; and (3) that in any event the claim was irrelevant for lack of specification of the claims for loss of profits and for administration costs. Counsel for the defenders invited me to sustain their plea-in-law 1, a general plea to relevancy, and in relation to the specification points to sustain plea-in-law 2. In their first and second submissions counsel for the defenders founded on my decision in the Landcatch cases (Landcatch Ltd v International Oil Pollution Compensation Fund, 11 November 1997, unreported), which they invited me to follow.

Counsel for the minuter made no submission on the general relevancy of the action, it being common ground that the minuter had made a provisional payment to the pursuers to account of their claim. He submitted that the claim for "necessary administration costs" was irrelevant for lack of specification. Counsel for the minuter invited me to sustain his plea-in-law 2 by excluding from probation the sentence "The pursuer has incurred necessary administration costs in connection with the preparation of quantification of the present claim in the sum of £19,111" (Closed Record, p 23B). Since the minuter did not challenge the relevancy of the action at this stage, counsel invited me to reserve his plea-in-law 1.

Counsel for the pursuers submitted (1) that my decision in Landcatch Ltd v International Oil Pollution Compensation Fund (supra) was wrong and that I should not follow it; (2) that in any event the case was distinguishable on its facts; and (3) that the averments on both heads of loss were sufficient to entitle the pursuers to enquiry. I should therefore allow proof before answer on the whole record.

IV The Landcatch cases

In the Landcatch cases (supra), the pursuers carried on business far from the contaminated area. There was no physical damage to the smolt that they produced. They had incurred costs in the production of the smolt in the expectation that, in accordance with past experience, they would enter into contracts with producers in Shetland. In the event those producers placed no orders with the pursuers because of the designation of the Exclusion Zone. The pursuers were therefore no more than potential trade suppliers of smolt to salmon farmers in the contaminated area.

In those cases I held, inter alia, that while the fact that the claim was made for economic loss was not sufficient per se to exclude it, the statutory liability under section 1 of the 1971 Act was not indeterminate. On the contrary, it was a liability for such loss where it was directly caused by contamination in accordance with established principles of law. It was therefore for the pursuers to aver and prove that the necessary proximity existed between them and the defenders in order to bring themselves within the category of cases in which such losses were recoverable (Landcatch Ltd v International Oil Pollution Compensation Fund, supra, pp 36-40).

On that view, applying established principles of the common law, I held that the pursuers' claims were for purely relational economic loss. The law excluded claims for economic loss where the claimant had only contractual rights in relation to the property damaged. A fortiori, it excluded such claims where they were based on the loss of an opportunity to enter into contractual relations (ibid, at pp 44-54).

V The questions of relevancy
(a) The interpretation of section 1 of the 1971 Act

Counsel for the defenders argued on the basis of my decision in Landcatch Ltd v International Oil Pollution Compensation Fund (supra) that the pursuers had not pled a relevant ground of action under section 1 of the 1971 Act because on the pursuers' own admissions their fish farm was outwith the Exclusion Zone; no oil was detected in the waters surrounding it; and there was no oil contamination of the pursuers' nets, cages or fish. The claim was brought in respect of the economic effects of contamination upon the pursuers' commercial activities. Nothing was averred in the pleadings that could be described as "damage caused ... by contamination resulting from the discharge or escape" of oil (s. 1(1)(a)). The admissions made in condescendence 7 (supra) were fatal to the pursuers' case because on those admissions none of the qualifying conditions of liability in section 1(1)(a), (b) and (c) could be made out.

Counsel for the defenders renewed the concession made in Landcatch Ltd v International Oil Pollution Compensation Fund (supra) that compensation for economic loss could be recoverable under this legislation; but he argued that the loss had to be caused by contamination. He cited as a possible example the case of a fisherman whose normal fishing grounds were within the area that had been contaminated and who was prevented from going to sea by reason of the designation of the Exclusion Zone. That could be an example of a loss directly caused by contamination, even though it was of an economic nature. But if the pursuers' fish farm was outside the Exclusion Zone, and if the fish farm and its stock had no contact with oil, it could not be said that the pursuers suffered "damage ... caused by contamination" in the sense of section 1(1).

Counsel for the pursuers accepted that on the face of it the claim was excluded by my decision in the Landcatch cases (supra). But they invited me not to follow that decision on the basis of two propositions which had not been argued for the pursuers in those cases.

The first proposition of counsel for the pursuers was that a statute designed to give effect to a convention should be given a broad and liberal interpretation; and that on such an interpretation, the "but for" test, which I rejected in those cases, provided the appropriate criterion for liability under section 1.

Counsel for the pursuers relied on the fact that the 1971 Act implements the International Convention on Civil Liability for Oil Pollution Damage 1969. They argued that while my construction of this legislation in Landcatch represented what would otherwise be the usual approach to statutory interpretation (cf. Stair Encyclopaedia, Interpretation of Statutes, vol 12, para 1126), that was not the construction to be adopted where a statute implemented a convention. In such a case the court should from the outset adopt a broad and liberal approach.

On such an approach the court should not impose limitations on liability that were not expressly to be found in the words of the section. In these provisions, "damage" and "loss" (s. 1; s. 20) were used in an unrestricted and unqualified way. Therefore the "but for" test should be applied.

This interpretation did not result in there being unlimited liability. There was a limitation, but it was a limitation imposed by the financial ceiling on the liabilities of the owners and insurers rather than a limitation of the ambit of their liabilities.

The first proposition for the pursuers is based on a statement in the speech of Lord Brandon of Oakbrook in The Antonis P Lemos ([1985] AC 711) supporting the view that since the provisions of the statute under consideration in that case were designed to give domestic effect to an international convention, a broad and liberal construction should be given to them (at pp 725G-726A; cf also p 731D-E).

In my view, counsel for the pursuers have wrested one statement from the speech of Lord Brandon of Oakbrook and used it outwith its context as the basis for (1) a general theory that a statute implementing a convention is to be interpreted on a different principle from that which would apply in any other statute; and (2) a view that on the broad and liberal construction section 1 in this case should be given the widest possible scope.

In my opinion, the argument for the pursuers is misconceived on both points. It is important to see how the matter arose in The Antonis P Lemos (supra). The question in the case was as to the scope of section 20(2)(h) of the Supreme Court Act 1981, which gave effect to an international convention. A doubt had arisen as to the meaning of the section. In the Court of Appeal Parker LJ, in construing that provision, said that it was well established by authority that that provision, being based on and intended to give effect to a convention, "should be given a liberal and broad rather than a restricted construction, and so construed, if reasonably possible, to conform to the language of the convention" (at p 717A-B). One source of that principle was the statement of Lord Diplock in The Eschersheim ([1976] 1 WLR 430) to the effect that if the statute and the convention differ in their language, the statute should be construed in the same sense as the convention "if the words of the statute are reasonably capable of bearing that meaning" (at p 436B-E).

These statements are in line with the principle that at the first stage of construction the court should look only to the words of the statute. If those words are plain and unambiguous they must prevail, whether or not they implement the convention accurately (Salomon v CCE [1967] 2 QB 116, Diplock LJ at p 143D-F). In such a case, because the section has a clear meaning, there is no need to refer to the convention or to any other source. But if the section is ambiguous or obscure, the court may then go to the second stage of construction by referring to the convention for guidance and reading the section with a presumption that it is intended to give effect to the convention (Salomon v CCE, supra, at pp 143G-144A).

That was the approach taken in The Antonis P Lemos. Since the convention in that case had been implemented in the United Kingdom by separate statutes for England and Northern Ireland and for Scotland, the House of Lords sought a meaning on which the laws on the point in the United Kingdom jurisdictions would be uniform in giving effect to the convention. The court therefore adopted the broad and liberal construction only at the stage where there was a doubt as to the meaning of the section. At that stage the court could refer to the convention and construe the section in accordance with it, provided that the words of the section were reasonably capable of bearing the meaning which that construction indicated.

The same approach is exemplified in Gatoil International Inc v Arkwright-Boston Mfrs. Mutual Insurance Co (1985 SC (HL) 1), which related to the same convention. In that case Lord Keith of Kinkel said : "It is to be observed that, while some divergences from the provisions of the 1952 Convention can be seen both in the provisions of the Act of 1956 relating to England and in those relating to Scotland, it is desirable that such provisions for both jurisdictions as can be identified as having a common derivation from particular provisions of the Convention should be interpreted alike in each of these jurisdictions, if that can be done without undue straining of language" (at p 15).

These decisions do not establish that the mere fact that a statute implements a convention entitles the court to interpret the statute in a broader and more liberal way than it otherwise would. The submission for the pursuers particularly misses the point in the present case since counsel for the pursuers have not suggested that in section 1 of the 1971 Act there is any particular ambiguity or obscurity, or for that matter any seeming inconsistency with the 1969 Convention.

In support of the proposed broad and liberal approach counsel for the pursuers also referred me to the decision of the House of Lords in James Buchanan & Co Ltd v Babco Forwarding & Shipping (UK) Ltd ([1978] AC 141) on the interpretation of a convention. I need not analyse that decision in the present case because in that case the convention was incorporated in the statute itself. For that reason different principles of interpretation applied (ibid.,Lord Wilberforce at p 152).

For the reasons that I gave in the Landcatch cases (Landcatch Ltd v International Oil Pollution Compensation Fund, supra, at pp 37-40), I consider that this section can be satisfactorily construed on its own terms without reference to any external aid to construction such as the 1969 Convention. On that view, the question of using a broad and liberal approach to the construction of section 1 does not arise.

In any event, I do not accept that if a broad and liberal approach were legitimate, it would lead to the interpretation of the section for which counsel for the pursuers contend. On that interpretation, the section would apply to all losses that would not have occurred but for the mishap. That interpretation is at odds with the purpose of the 1969 Convention, namely to provide for the making of "adequate compensation ... to persons who suffer damage caused by pollution resulting from the escape or discharge of oil from ships ... " (1969 Convention, preamble). For the reasons that I gave in Landcatch v International Oil Pollution Compensation Fund (supra, at pp 40-41), I consider that section 1 implements a clear purpose of the Convention to restrict the ambit of liability for pollution damage in a case of this kind.

On the pursuers' view, the ambit of liability would be so wide that, with a limited fund available to meet the claims (Merchant Shipping Act 1974, ss. 4 and 5) and with an almost limitless extension of the range of entitled claimants, no individual claimant would ever be given adequate compensation.

In any event, the pursuers' view of what the broad and liberal approach should be creates a difficulty in the interpretation of paragraphs (a), (b) and (c) of section 1(1). On the pursuers' submission, section 1(1)(a) would cover every consequence of the contamination. On that view, the reference to certain particular consequences in (b) and (c) would be otiose. Counsel for the pursuers attempted to meet that difficulty by saying that paragraphs (b) and (c) explain rather than limit the scope of section 1(1)(a); but that, I think, is an unreasonable interpretation. If paragraphs (b) and (c) were not intended to create a specific ground of liability, there is no reason why they should have been enacted merely to explain what was meant in paragraph (a).

A final argument for the pursuers on the interpretation of section 1 was based on the agreed fact that the minuter had made provisional payments to the pursuers in respect of the present claim. It was argued that this consideration supported the view that the section extended liability to consequences such as those averred by the pursuers. In my view the payment made by the minuters is an irrelevant consideration. The actings of the minuters, on whatever view of the legislation those actings proceeded, cannot be used as a legitimate guide to the construction of the section.

I therefore reject the first proposition for the pursuers on this part of the case.

The second proposition for the pursuers was that it was inapposite to interpret such a statute by reference to concepts drawn from an area of the common law which was in a state of development.

In support of that proposition counsel for the pursuers referred to the statement of Lord President Hope in Weir v National Westminster Bank (1994 SLT 1251) to the effect that cases involving pure economic loss give rise to situations of particular difficulty, and that it is in this field especially that reliance on general principle may produce results which are unreasonable (at p 1258 D-F). Counsel suggested that the court should not assume that Parliament intended the section to be construed by reference to the changing standards of the common law. The common law on the subject of economic loss was in a state of flux, particularly in the aftermath of Anns v Merton LBC ([1978] AC 728) and Junior Books Ltd v Veitchi Co Ltd (1982 SC (HL) 244). It had been in an uncertain state when the 1971 Act was passed. Parliament could not have intended that an area of the common law that was in an uncertain state should regulate the interpretation of the legislation. The history of negligence was the history of the unexpected (Bourhill v Young 1941 SC 395, Lord Justice-Clerk Aitchison at p 437).

I do not accept this argument. Few if any aspects of the law are static. There is no novelty in the idea that Parliament should enact legislation which the courts will interpret using common law principles which are in a state of development. I have no reason to suppose that Parliament intended that in the 1971 Act the common law principles governing the ambit of liability for loss should not apply.

The statement of Lord President Hope to which counsel for the pursuers referred was made in a different factual context, where the question related to the duty of care owed by a bank to its customer; and it was made by way of reference to the comments of Lord Bridge of Harwich in Caparo Industries plc v Dickman ([1990] 2 AC 605) on the problem of defining a general principle by which the existence of a duty of care can be determined. In Caparo the question related to the duties of the auditors of a company to its shareholders and to prospective investors. In my view the statements of Lord President Hope and of Lord Bridge of Harwich in those cases are not directly relevant to the argument of counsel for the pursuers on the point that I have to decide in this case.

For the reasons that I gave in the Landcatch cases, I consider that the use of familiar legal concepts of liability, loss, damage, causation, and contributory negligence in the relevant provisions of the Act indicates that the ordinary limitations on liability imposed by the general law are to apply to section 1 of the 1971 Act (Landcatch Ltd v International Oil Pollution Compensation Fund, supra, at p 38). These provisions were enacted after the common law had for over a hundred years imposed limits on the recoverability of damages and statutory compensation on the grounds of causation and remoteness (eg Ricket v Metropolitan Railway (1867) L.R. 2 H.L. 175; Cattle v Stockton Waterworks (1875) LR 10 QB 453; Caledonian Railway Co v Walker's Trs (1882) 9 R (HL) 19).

I therefore reject the second proposition for the pursuers on this part of the case.

(b) Whether Landcatch v International Oil Pollution Compensation Fund is distinguishable

The pursuers rely on four factors to distinguish this case from Landcatch, namely the proximity of the pursuers' fish farm to the Exclusion Zone; the fact that the pursuers' business is aquaculture; the fact that the pursuers shared the same market with fish farmers within the Exclusion Zone, and the fact that Shetland salmon is a recognised product with a special market identity. Counsel for the pursuers argued that if a line is to be drawn in this case circumscribing liability for economic loss, these factors provide the necessary proximity, or the necessary "something more" (Murphy v Brentwood DC [1991] 1 AC 398, Lord Oliver of Aylmerton at pp 485H - 487C), that brings the pursuers' case within that line.

In my view, these factors do not provide any material ground of distinction. The essential averments, so far as the present claim is concerned, are that the pursuers' fish farm was outside the Zone and that the pursuers' equipment and stock suffered no contamination. All that happened was that damage to other parties' property caused the pursuers to suffer financial loss. In this respect the pursuers are in a similar position to that of the unsuccessful plaintiffs in S A de Remorquage à Hélice v Bennetts ([1911] 1 KB 243). But unlike the plaintiffs in that case, the pursuers on their own averments did not even have a contract related to any of the damaged property.

Counsel for the pursuers accepted that if the pursuers were to fail on the two main points that they have taken concerning my decision in the Landcatch cases, their claim fell to be judged as no more than a claim based on relational economic loss. For the reasons that I gave in the Landcatch cases (Landcatch Ltd v International Oil Pollution Compensation Fund, supra, at pp 44-54), I consider that this action is irrelevant on that account (cf Candlewood Navigation Corporation Ltd v Mitsui OSK Lines [1986] AC 1; Leigh and Sillavan Ltd v Aliakmon Shipping Co Ltd [1986] 1 AC 785).

VI Questions of specification

If I am wrong in thinking that the action is irrelevant, questions arise as to the specification of the pursuers' averments of loss.

(a) Loss of profits

The pursuers aver that in the years before the mishap there was a correlation between the market prices for Shetland salmon and those for Norwegian salmon and that after the mishap there was not.

The defenders argued that the supporting schedules show no such correlation. The pursuers should therefore explain on Record what the correlation was and why it has ceased to apply. The defenders further argued that it appeared from the pursuers' averments that Shetland prices were determined in advance by the Framgord organisation. It followed therefore that at best for the pursuers anything that happened in consequence of the mishap was merely a circumstance which motivated Framgord to alter its predetermined prices. If that were so, it appeared that the pursuers' averments implied that the prices were fixed in advance by third party action, that is to say by the decisions of Framgord, on a basis that was not specified. Since the sum sued for related to losses arising after January 1993, some at least of these losses must relate to prices that were fixed before the mishap occurred. It followed therefore that there was a serious lack of specification in the pursuers' pleadings as to the basis on which the losses arose and as to the method by which the amount of them was calculated.

In my opinion, these are not questions that should be decided at a debate. Even without the schedules the pursuers' averments would be sufficient to entitle them to prove, by reference to the criterion of Norwegian prices, that after the mishap they suffered a fall in the market price of their product and that, in consequence, their profits were reduced. It is not for the court at this stage of the case to reach any factual conclusion by assessing the evidence set out in the schedules. Whether the schedules bear out the pursuers' averments as to loss of profits would be a matter to be decided after proof.

For the same reasons I do not accept the argument that the pursuers' averments as to the role of Framgord in predetermining prices indicate that the pursuers' alleged loss cannot have been a consequence of the mishap. The court should not attempt at this stage to draw any factual conclusion on the point.

If these had been the only questions for decision, I would have held that they were both matters for proof before answer.

(b) Administration costs

Counsel for the minuter argued that the words "necessary administration costs" suggested that these were internal costs: for example, time spent by the pursuers' staff in preparing and processing the claim. A claim for such costs was not relevant. So long as it seemed that that could be the nature of the claim, the claim lacked specification. On the other hand, if the administration costs represented outlays, there was no fair notice on record of what the outlays were. In this respect the case could be distinguished from Landcatch Ltd v International Oil Pollution Compensation Fund (supra), and from Shetland Seafarms v The Braer Corporation (10 September 1998, unreported), where the averments related to expenses that were plainly outlays.

Counsel for the pursuers accepted that if these were internal costs, the claim could not be maintained. They argued that they were entitled to enquiry to establish what the costs were and whether they were outlays.

I am not persuaded that the pursuers' averments are comparable with the averments on which I allowed proof before answer in Landcatch Ltd v International Oil Pollution Compensation Fund (supra) and in Shetland Sea Farms Ltd v The Braer Corporation (supra). In the former case, although the specification of the claim was less than desirable, it was at least clear that it related to outlays (Landcatch v International Oil Pollution Compensation Fund, supra, at pp 21 and 54-55). In the latter case it was not disputed that the costs involved were outlays (Shetland Sea Farms Ltd v The Braer Corporation, supra, at pp 5-6; 8-10; 18-20).

In this case the natural reading of the averment is that it relates to the pursuers' internal administrative costs rather than to outlays. At best for the pursuers the averment could relate to either. Since the facts are peculiarly within the pursuers' own knowledge, I consider that the pursuers could and should have made specific averments as to the nature of these costs. In my view, this averment is irrelevant. If the point had arisen, I would have excluded the averment from probation.

VII Interlocutor

Since I consider the action to be irrelevant, I need not deal with plea-in-law 2 for the defenders nor with plea-in-law 2 for the minuter. Plea-in-law 2 for the minuter is not in any event in appropriate terms. For the reason that I have given, plea-in-law 1 for the minuter does not arise at this stage. I shall therefore sustain plea-in-law 1 for the defenders and dismiss the action.