The "Sunrise Crane"

• Jurisdiction: Singapore
• Judge: Belinda Ang Saw Ean J
• Judgment Date: 26 November 2003
• Neutral Citation: [2003] SGHC 291
• Docket Number: Admiralty in Rem No 600097 of 2001
• Date: 26 November 2003
• Year: 2003
• Published date: 17 December 2003
• Plaintiff Counsel: Thomas Tan and Daryll Ng (Haridass Ho and Partners)
• Citation: [2003] SGHC 291
• Defendant Counsel: John Seow and Kelly Yap (Rajah and Tann)
• Court: High Court (Singapore)
• Subject Matter: Whether defendants owed duty of care to plaintiffs in discharging contaminated nitric acid into their vessel,Breach of duty,Whether defendants breached duty of care in discharging contaminated nitric acid into plaintiffs' vessel without any warning of its nature and characteristics,Tort,Dangerous goods,Negligence,Duty of care,Standard of care

1 In this action founded on negligence, the Plaintiffs as the registered owners of the Pristine are claiming damages from the Defendants for corrosion damage to their vessel Pristine and consequential losses. The Defendants, Doman Shipping S.A., are the registered owners of the Sunrise Crane of the port of Panama.

History and Nature of Dispute

2 At all material times, the Pristine operated from Singapore as a slop tanker collecting MARPOL Annex I (oil) slops off larger vessels for disposal. The Pristine a small steel tanker, built in 1975 was registered in Singapore. The vessel had four sets of wing cargo tanks (port and starboard) located forward of the accommodation, pump room and machinery space. The cargo tanks were constructed of steel. The vessel was classed with NK and was extensively refurbished in January 2001.

3 The Sunrise Crane is an IMO Type II and III chemical tanker, built in Japan in 1992. She had in her no.3C tank about 34mt of contaminated nitric acid for disposal. The contaminant was hydraulic oil that had leaked from the vessel’s defective cargo pump.

4 At all material times, the Sunrise Crane under the management of Setsuyo Kisen Co Ltd (“Setsuyo”) was time chartered to Tsurumi Sunmarine Co Ltd (“Tsurumi”) who had sub-chartered the vessel to Uyeno Transtech Ltd (“Uyeno”). It was Uyeno’s cargo of nitric acid that was contaminated by hydraulic oil. The Defendants are entered with the Japan Ship Owners’ Mutual Protection & Indemnity Association (“Japan P & I Club”). The latter’s local correspondents were Spica Services (S) Pte Ltd (“Spica”). Captain Malvinder Jit Singh Gill (“Captain Gill”), a marine surveyor with Matthews-Daniel International Pte Ltd, was appointed to make inquiries for the engagement of a suitable disposal contractor.

5 The Pristine was berthed port side to an anchored Sunrise Crane on the morning of 8 March 2001. Sunrise Crane discharged approximately 34mt of contaminated nitric acid into the Pristine’s no.1 wing cargo tank via a flexible cargo hose using the port aft manifold. After discharge had commenced, yellowish fumes were seen emanating from her forward vent. The deck became hot and she was seen listing progressively to port whereupon her crew evacuated to the Sunrise Crane. Some of the crew members from the chemical tanker with protective equipment and breathing apparatus boarded the vessel to close the valves and openings on the Pristine. Thereafter, the crew of the Pristine returned to their listing vessel. On or about the time of the arrival of Salvalet, the flexible cargo hose was disconnected and Sunrise Crane cast off from the listing Pristine. The Sunrise Crane shortly weighed anchor and departed for her next assignment.

6 The Salvalet was dispatched to the Pristine by salvors, Semco Salvage and Marine Pte Ltd (“Semco”). Lloyd's Open Form 2000 was signed at 0800 hours on 8 March 2001 by the respective masters of Salvalet and Pristine. By 1135 hours, Pristine had capsized but remained just afloat. Her hull bottom plating was found with corroded holes in way of cargo tank nos.1 and 2. Yellowish-brown fumes were seen issuing from the corroded holes. Eventually, Semco righted the capsized vessel and she was towed to Singapore where she was sold “as is where is” for S$50,000.

7 Dr. Neil Sanders, a chemist with Dr. J H Burgoynes & Partners Ltd, was appointed to assist Semco. He explained that nitric acid is a strong oxidising agent, corrosive and is very toxic. In addition, highly toxic nitrogen oxide fumes are produced by chemical reactions involving nitric acid. If sufficiently concentrated, nitric acid would corrode and dissolve mild steel rapidly. He concluded that the holes in the bottom steel plating (and also in the bulkheads between the tanks) of the Pristine were due to the effects of concentrated nitric acid loaded into the vessel.

8 The Plaintiffs’ contention is that the Pristine was to have loaded “contaminated lubes” from the chemical tanker Sunrise Crane. Their case is that at the time in question, the Plaintiffs did not know, as they were not told, that the substance to be disposed of was nitric acid that had been contaminated by hydraulic oil. They say contaminated nitric acid being a dangerous liquid, they were entitled to a warning of that fact. There was no sign of trouble until after the contaminated nitric acid was pumped into her cargo holds following a ship-to-ship transfer operation with the Sunrise Crane.

9 Their pleaded case is that the Defendants were under a duty which they had breached to give full details of the dangerous nature of the cargo before Pristine received it into the cargo tanks. The Defendants were also in breach of an alternative duty to deliver cargo that was safe for the receiving vessel. It is further alleged that prior to receiving the contaminated cargo, the Defendants represented to the Plaintiffs and their representatives on board that what was to be delivered was “contaminated lubes”. The Plaintiffs and their representatives relied and acted on that representation by making arrangements to proceed to outside the port limits of Singapore (“OPL”) to receive the “contaminated lubes”.

10 It is not disputed that Captain Gill had at all material times dealt only with Malcolm Douglas Windsor (“Windsor”) from Pink Energy Enterprises (“Pink Energy”) and the disposal contract awarded to Pink Energy was for approximately 34mt of nitric acid contaminated with hydraulic oil. Moreover, prior to the ship-to-ship transfer, Pink Energy had seen a sample of the contaminated nitric acid. It was Pink Energy who had fixed the Pristine to collect the contaminated nitric acid. The Pristine was at that time on a two-year time charter to Pristine Maritime Pte Ltd ("Pristine Maritime").

11 The Defendants have denied negligence. The Defendants accept that they owed a duty to inform Pink Energy of the nature of the cargo to be disposed of. But they deny that they owe a similar duty to the Plaintiffs. There was no antecedent contract between them and the Plaintiffs and they did not know the identity of Pristine Maritime and the Plaintiffs. There could therefore be no proximate relationship insofar as the Plaintiffs and Pristine Maritime were concerned so as to give rise to a duty of care. Neither was it foreseeable that Pink Energy would misinform Pristine Maritime (and consequently the Plaintiffs) in the Works Order issued to Pristine Maritime by Pink Energy that the Pristine was to collect Annex I slops from Sunrise Crane. The Defendants argue that it was Windsor’s wrongdoing that had caused the damage to the Pristine.

12 In the event they are held liable in damages, the Defendants say they are entitled to limit their liability. They have pleaded as a defence limitation of liability under s136 of the Merchant Shipping Act (Cap.179). According to the Defendants’ calculations, tonnage limitation is $380,267.52

The Law

13 It is common ground that nitric acid is a dangerous chemical. The law applicable to dangerous goods is the well-established principles of the law of negligence. The duty owed is that of reasonable care to prevent the dangerous goods from doing injury or damage to persons or property likely to come into contact with them. The burden of proving negligence is on the plaintiff.

14 The persons who are likely to come into contact with dangerous goods would be those who come within Lord Atkin’s two-step test in Donoghue v Stevenson [1932] AC 562. This invokes questions of reasonable foreseeability of injury or harm and the establishment of a proximate relationship. English law has added a third limb to the two-step test, namely a duty of care would only arise if it is “fair just and reasonable” to impose such a duty. Until 1996, the threefold test has been largely applied in cases concerned with economic loss or public services. See Clerk & Lindsell on Torts (18^th ed) para. 7-22. The third limb is now recognised as part of an overall test that applies generally to all tort cases. In other words, it also applies to a personal injury or physical damage case. In Marc Rich & Co AG v Bishop Rock Marine Co Ltd [1996] 1 AC 211, the House of Lords rejected the suggestion that in cases of physical damage the threefold test has no application and held that it applies to all cases of tort. In Mohd bin Sapri v Soil-Build (Pte) Ltd [1996] 2 SLR 505, the Court of Appeal adopted the proposition in Marc Rich and applied the threefold test to a personal injury claim.

15 What would constitute reasonable care or precaution must necessarily depend on the facts and circumstances of each case. In Hodge & Sons v Anglo-American Oil Company and D T Miller & Co [1922] 12 Lloyd’s Law List Rep.183, Lord Scrutton observed that the obligation to take reasonable care would probably be fulfilled by entrusting the dangerous goods to a competent person with reasonable warning of its dangerous character, if that danger is not obvious.

16 In that case, a serious explosion on a petroleum barge, the Warwick, caused the death of a number of workmen and injury to others. Considerable property damage was also done. The Warwick was the property of the defendant Anglo-American Oil and was used for the carriage of petroleum. Anglo- American Oil had contracted with ship repairers, Miller, to do certain work on the barge. Miller in turn subcontracted the work to Hodge. On the morning of the casualty, Miller had informed Hodge that the barge was on the way to its wharf in order that the tank with which the barge was fitted might be altered and repaired by Hodge. The barge was brought to Hodge’s wharf by a lighterman employed by Anglo-American Oil. An explosion occurred within half an hour of her arrival at the wharf. The foreman of Hodge had commenced work on the Warwick’s tank with an oxy-acetylene burner before it was free of petrol vapour and consequently caused the disastrous explosion.

17 Hodge sued Anglo-American Oil for property damage. Willmott, an...