CHENG PIK KIN AND ANOTHER v. ALLIED MARINE CONSULTANTS LTD. AND OTHERS

HCPI 748/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. HCPI 748 OF 2000

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J U D G M E N T

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1. These proceedings arise out of an accident on 28 November 1997 when Mr Chan Man Yuan (the deceased), a marine surveyor, in the course of his employment, entered an enclosed space in a cargo hold access hatch on board the ship "Madonna Lily" in Chiwan, PRC, and died as a result of suffocation caused by oxygen depletion. The 1st defendant was his employer, and the 2nd and 3rd defendants were the owner and demise charterer of the vessel at the time. The plaintiffs brought the action against the 1st defendant for breach of contract of employment and negligence, and against the 2nd and 3rd defendants for breach of statutory duty under the Occupier's Liability Ordinance and negligence. By third party proceedings the 1st defendant, and the 2nd and 3rd defendants jointly, seek orders for contribution or indemnity against each other.

2. Immediately before this trial began I approved a settlement sum to be paid to the plaintiffs by the 2nd and 3rd defendants in satisfaction of all their claims in this action and their costs in respect of those defendants, but without prejudice to the claims that the defendants have against each other for contribution or indemnity, and the plaintiff's claim for costs against the 1st defendant. It is those claims with which I am now concerned, also taking into account any contributory negligence on the part of the deceased.

The Facts

3. The facts leading up to the accident are largely undisputed, although there is no consensus, and little evidence, as to how the deceased came to enter the access hatch.

4. The deceased was, as I have said, a marine surveyor, in the employment of the 1st defendant. He was attending the ship on the instructions of his employers to check, for the owners and charterers, the condition, quality and quantity of the cargo of soybeans, and the seals on the holds. The purpose of this was to protect the shippers against any possible claims by the cargo owners for damage or short delivery. As I understand it, the surveyor would make an initial check on the hatch seals and condition of the cargo while it was on its mooring, and a survey as to quantity, and possibly a more detailed look at quality, would take place upon discharge when it was alongside. The 1st defendant had been requested to send a surveyor to carry out this work by a fax dated 10 November, and they confirmed the next day that they would send the deceased. The evidence here is that the shippers suspected that a claim of short delivery would be made, and the prime purpose of the employment of a surveyor was to have evidence that the cargo could not have been interfered with from the time of loading and sealing of the hatches. The deceased's prime concern therefore was to check those seals to be able to state that they were still in place and secured. It appears that the check as to condition and quality was secondary to this. However, it is clear that the deceased decided at some point that he would take samples from the holds, although the fact that he left his proper sample bags in his hotel room suggests that he had not initially intended to.

5. The deceased was acquainted with the captain of the ship, Leovegildo J. Dangaran, having conducted two previous surveys on board the same ship, and the captain regarded him as a friend. He came on board at about 2.20 p.m. on 28 November, not bringing with him any equipment or sample bags, although he must have had a camera as the captain in his statement said that he knew he would be taking pictures, but he did not know whether he would take samples. He and the captain chatted in the captain's dayroom, and he was offered the assistance of the Chief Officer which he declined and said, as he had before, that he only needed the help of an assistant bosun. AB Cordero was on duty and was told to assist. The deceased left the captain at 3.15 p.m. and went on deck, and the captain went to the bridge, as he said: "to keep an eye on the situation", and from where he could see the hatches of all seven holds, although not the access hatches, which were hidden by the raised coamings of the holds.

6. The deceased and the AB opened the hatch to hold No. 1 at about 3.25 p.m., the deceased took photographs and, on being asked by the captain over a walkie talkie, said the condition of the cargo was good. The hatch was then closed. The deceased and AB Cordero then did the same with holds Nos. 2 and 3, except in these cases they left the hatches open. The AB told the captain over the walkie talkie that they would take samples from the forward holds and went aft to get bags, the captain believed from the kitchen. He left the bridge and went back to his dayroom at 3.35 p.m. leaving the Second Officer in charge. There was due to be a change of watch at 4.00 p.m. when the Chief Officer would take over the bridge and AB Anglo would take over from AB Cordero.

7. The next thing that anyone on the ship was aware of was at about 4.20 p.m. when the Chief Officer telephoned to the captain, asked if the deceased was there and said that AB Anglo had not been able to find him or AB Cordero, there being no response to his walkie talkie. The captain made a public address call for everyone to look for them and shortly received a call from the Chief Officer that the deceased and AB Cordero were lying at the bottom of the ladder into the access hatch of No. 1 hold. Breathing apparatus was brought and the bodies of the deceased and AB Cordero recovered.

Cause of the accident

8. It is apparent from the evidence of all the witnesses that one of the greatest dangers on board ship is that of depletion of oxygen in enclosed spaces, particularly in the holds when carrying certain cargoes, such as organic matter, as here. For this reason all ships are required to carry testing equipment to check any space before entering, and breathing apparatus to use where there is evidence of insufficient oxygen, or the presence of other gases. This is something which is, or ought to be, at the forefront of any experienced mariner's mind when faced with an enclosed space. There can be little dispute here that the deceased was experienced. He had been at sea since at least 1977, and had obtained in the course of his career a number of certificates of competency as well as licences up to Chief Mate, and a transitional certificate of competency as master in 1989. It is true that the latter was issued by the Republic of Panama, and most of the others by Liberia, and Mr Wright for the 2nd and 3rd defendants has sought to show that these are of little value. While I accept the evidence that such certificates are easily obtained, often without proper examination, to the extent that, were a certificate from these countries the only evidence of a person's competence, one would be taking a risk to accept it, we have here in addition clear evidence of at least 14 years experience at sea, followed by 6 years in the employment of the 1st defendant as a marine surveyor, when any lack of competence would be readily apparent. I accordingly accept the evidence of Mr Lee Kai Kong of the 1st defendant that the deceased had carried out numerous surveys and he was satisfied as to his competence.

9. In his statement, the captain gives his view as to the likely sequence of events, which none of the other witnesses could say was unlikely. This is that AB Cordero went down into the access hatch, probably to collect a sample of the soybean cargo, and collapsed from lack of oxygen, whereupon the deceased followed him down to help him and succumbed to the same fate. It is not likely to have happened the other way round as the AB had the walkie talkie and it would be a matter of a moment for him to have called for help if he had seen the deceased collapse. The reason that it was intended to use the access hatch seems to have been speed and convenience. As I have noted above, the deceased and the AB had closed the hatch cover of No.1 hold, and it seems probable that it was after that the deceased decided to collect samples and returned to it. Rather than open the hold again, the decision was taken, by whom is not clear, to go down the access hatch, a course of conduct the deceased, and the AB, ought to have known was fraught with danger, and for which precautions should have been taken.

Liability

10. The 1st defendant lays the blame for this accident on the ship owners and charterers, the 2nd and 3rd defendants, in that they failed to take care of the deceased's safety on board, and under the Occupier's Liability Ordinance, Cap. 314. The 2nd and 3rd defendants say that the 1st defendant failed adequately to train or instruct the deceased or to provide him with proper equipment, to provide a safe place and system of work and to take reasonable care of his safety. All defendants claim contributory negligence against the deceased. I will look at the liability of each of the parties in turn.

11. The 1st defendant has both a contractual and common law duty of care in respect of the safety of the deceased as his employer. This includes ensuring that he is properly trained, and sufficiently competent for the work he is required to do, and properly equipped. I have already found above that his employers considered him competent, and with the requisite experience for the work he did. Apart from this accident, there is nothing to suggest to the contrary. However, there is no evidence as to training, and the certificates he was in possession of do not guarantee that proper training has taken place. It may well be that experience was all the deceased had, and in my view the 1st defendant should not have relied solely on those certificates in respect of training.

12. As to equipment, the evidence is that both oxygen meters and breathing apparatus were available at the 1st defendant's offices, and any employee had the use of them if necessary, or there was the possibility that they were going to have to enter an enclosed space in the work they were sent to do. In this case, the deceased was not expecting to have to enter an enclosed space. It was an inspection of hatch seals, and a check of cargo as to quality and quantity. Opening the hold, taking photographs, collecting a sample from the top of the hold, and later doing a draft survey to check the quantity, would not normally involve any danger to the deceased, nor any expectation of going into any enclosed space. It was, as Mr Lee Kai Kong described it to the deceased before he set out, an easy job with which he was very familiar. To instruct or require the deceased to carry equipment which was very unlikely to be necessary was very much further than a reasonable employer need go in protecting their employee. It would be a counsel of perfection to laden him with equipment to deal with every situation, however unlikely.

13. What then of his training? I have already said that his employers should not have relied solely on his Panamian and Liberian certificates as proof that he was properly trained, and, in a business such as marine surveying, where numerous dangers are to be expected on board ship in different situations, it is clear that even experienced surveyors need at least constant reminders, and some sort of ongoing in-service training. The two experts called by the parties were not entirely in agreement as to the extent of that training. While Captain Lloyd for the 2nd and 3rd defendants said that his company still sent their surveyors on safety courses, Captain Moore for the 1st defendant said they relied on circulating information on safety, and accidents that had occurred. Mr Lee said that the 1st defendant did neither, but only had informal discussions as to dangers and safety.

14. On this evidence, I am of the view that the 1st defendant could and should have done more to ensure that their staff were kept up to date with information about dangers on board ship, and fully aware of such dangers and knew how to deal with them. In this they were to an extent failing in their duty of care to the deceased both contractually and at common law, and must bear some responsibility for this accident. Apart from this, I am not satisfied that there is a case against them for an unsafe system of work, nor an unsafe place of work, over which they had no control.

15. As to the 2nd and 3rd defendants, it is necessary to consider the duties of the master of the ship and his responsibility towards the deceased. It cannot be denied that the captain is in overall charge of the ship and responsible for the safety of all on board, including lawful visitors. Mr Wright says that his duty is discharged by satisfying himself that the deceased is qualified and competent to carry out the tasks expected of him, and follow procedures to safeguard him while on board. He also relies heavily on the codes of safety procedures for entry into enclosed spaces, which are well documented and widely circulated among mariners. These involve careful planning before entry into such spaces, a responsible officer or other competent person being appointed to assess the risk and take charge of the operation, and arrange the necessary procedure and equipment depending on the level of risk. The 2nd and 3rd defendants' case is that the deceased was appointed by the captain as that competent person, and he had thereby discharged his duty.

16. I regret that I do not find the situation here as simple as that. The safety codes for enclosed spaces are clearly for the purpose of intended and planned entry into such a space, and a competent officer or other person appointed specifically for that operation. There was no such operation planned or envisaged here. As far as the captain was concerned, the deceased was carrying out a routine check of the hold seals and the cargo, an operation normally entailing no danger whatsoever, apart from those necessarily present to anyone on the deck of such a ship, where minor dangers abound for the unwary. There was therefore no appointment of the deceased for a hazardous operation nor delegation by the captain in accordance with these codes, which accordingly do not cover the situation here.

17. It is necessary to look at the risks to the deceased generally on the ship and then the steps, if any, taken by the captain to ensure he was safe. First as to the risks, I have to ask myself what the captain knew of the deceased, his ability and training, and his competence should any dangerous situation arise. The captain said that he had met the deceased twice before, although in his statement it is clear it was on the same trip with soybean from Rio Grande to Shekou and then to Shanghai, and he had actually boarded the ship twice, once in each of those places. The visit was for the same purpose as in this case: to inspect and remove cargo hatch seals, check the condition of the cargo and take a draft survey as to quantity. On that occasion he had again refused the services of the Chief Officer to assist and said he only needed an AB. In respect of the full holds he had taken samples from the deck, but for those less full, the so-called "slack" holds, he had sent the AB down the access hatch to take samples, while remaining on deck himself. He said that he relied on the deceased as a former master and experienced surveyor to use his good judgment and comply with the necessary safety procedures.

18. The question is here whether he was entitled to rely on the deceased's own competence. What after all did he know about him? We do not know whether the deceased told him that he was a former master himself. There is no evidence, apart from the, slightly suspect, Panamian certificate, that he had ever served on board ship as master, and the captain's own experience of him was as a cargo surveyor. As Captain Lloyd told the court, not all cargo surveyors are experienced mariners, and some have no seagoing experience at all, being what he dismissed as little better than tally clerks. In short, the captain here was not in possession of sufficient information about the deceased as to his ability to deal with a dangerous situation which might arise. Further, he knew that on the previous cargo survey that the deceased had done, he had required the AB with him to enter the access hatch into the hold. On that occasion of course he knew that the hatches had been opened and the holds ventilated for several hours before, but it does indicate that he knew that the deceased considered this a proper method of collecting a sample, rather than with a bucket and lanyard from the deck, and in the present case there were also two holds which were "slack" on the Madonna Lily.

19. The captain therefore, without full information as to the deceased's training and general on board competence, having experienced only his ability as a cargo surveyor, and in the knowledge of his working methods, first did not insist on a more senior officer to accompany him, which as captain he was entitled to do on board his own ship, and then failed to continually monitor and observe either through a responsible officer, or himself, that the deceased was reasonably safe. He clearly felt he had some responsibility towards him, as he stayed on the bridge initially "to keep an eye on the situation", and kept in touch over the walkie talkie until he went below to his day room. If he had continued to monitor the progress of the operation I have no doubt that he would have been aware of the intention for the AB to enter the access hatch and could have intervened.

20. For these reasons I am satisfied that the 2nd and 3rd defendants, through their servant or agent the master of the Madonna Lily, bear a large degree of blame for this accident.

21. Which brings me to the deceased himself. He was in fact a very experienced mariner, although there is a question mark over precisely what training he had received, with none from his employer, and had been in the marine survey business for some years. He must have known of the dangers on board ship and in particular that which should be at the forefront of any mariner's mind, the danger of enclosed spaces, and more so when dealing with cargoes which cause oxygen depletion. It is therefore difficult to understand why such a man, capable of exercising the skill and judgment expected, should enter this access hatch without even the simplest of precautions which would have rendered it safe to do so. Even if the AB had entered the hatch on his own initiative before the deceased could stop him, the proper course would still have been to summon assistance rather than putting his own life in danger. It is therefore inevitable that there is a finding that the deceased was to some degree the author of his own misfortune.

Apportionment of liability

22. We have a situation where all parties have to shoulder a proportion of the blame for this tragic accident. The 1st defendant for the lack of training, the 2nd and 3rd defendants for failure to ensure the safety of the deceased on their ship, and the deceased himself for his own negligence in carrying out his duties. I am satisfied that the greater part of the blame must fall on the 2nd and 3rd defendants. It was their captain who had the prime duty to see that the deceased was safe and the opportunity to do so, which he failed to take. He clearly made assumptions that he was not entitled to, and in so doing fell below the standard expected of a ship's master with responsibility for all on board. I accordingly find the 2nd and 3rd defendants to be liable to the extent of 50%.

23. The lack of training for which I find the 1st defendant responsible is less of a cause of the accident, as they were also aware of the deceased's experience and ability, and were entitled to some extent to rely on it, although they should have done more to train and inform. I find that their share of the liability is 30%, with the deceased liable for his own negligence to the extent of 20%.

Conclusion

24. The settlement approved by me as between the plaintiffs and the 2nd and 3rd defendants was in the sum of $2,600,000.00. In addition to this, and taken into account in that settlement, the sum of $1,110,000.00 was paid to the dependents of the deceased in Employees Compensation proceedings. The plaintiffs have accordingly received a total of $3,710,000.00. The original sum claimed in the plaintiffs' statement of damages was about $6,400,000.00. Now I have no doubt that the latter sum would not have been recovered in full if this matter had proceeded to trial on quantum, such claims as a matter of course being set at the highest considered attainable if all the claims are successful. Equally I have no doubt that, in arriving at a settlement, the parties took into account any likely finding of contributory negligence.

25. I have heard no further evidence as to quantum, nor as to the percentage which was allowed for as to contributory negligence, so I will, for the purpose of these proceedings, assume that it was the same as I have found, and the figure of the settlement is the same as I would have arrived at after trial. It therefore is only a matter of apportioning between the defendants what should have been paid by them, and applying this to the sums actually paid. This is 5/8 in respect of the 2nd and 3rd defendants and 3/8 in respect of the 1st defendant. Applying this to the total of $3,710,000.00, I find that the 1st defendant should have paid a sum of $1,391,250.00 and the other defendants the sum of $2,318,750.00.

26. On the proceedings for contribution between the defendants there will according be judgment for the 2nd and 3rd defendants in the sum of $281,250.00 against the 1st defendant, being the balance of what the latter should have paid of the sums received by the plaintiffs.

Costs

27. As between the defendants, I am aware of the fact that the 2nd and 3rd defendants have throughout been claiming that they are entitled to a complete indemnity from the 1st defendant as to the damages paid and their own costs. In the light of my findings above they have fallen far short of their expectations and claims. Indeed, I find them to have a greater responsibility than the 1st defendant. I am not satisfied however that it would be right to apportion costs in the proceedings between themselves in the same proportion. Although the 2nd and 3rd defendants would in the event of a full trial have been liable for that proportion of such costs, they have here been instrumental in shortening the proceedings by way of a sensible settlement, which they have funded. I am accordingly of the view that the justice of the situation can be met by making an order nisi that the defendants bear their own costs as between each other.

28. With regard to the costs as between the plaintiffs and the 1st defendant, had the plaintiffs been awarded damages at trial with a 20% discount for contributory negligence, they would still have received all their costs, there being no authority, as far as I am aware, to the effect that costs should be apportioned between plaintiff and defendant in the same ratio as liability where the plaintiff is largely successful. In the same way, I see no reason now why the plaintiffs should suffer in costs. I have to assume that as between the plaintiffs and the 2nd and 3rd defendants the costs agreed, namely $300,000.00, fully covered the costs which the plaintiffs would have received in respect of their costs against those defendants after taxation. It only remains therefore to make an order nisi that the 1st defendant pay the costs of the plaintiffs to be taxed of the proceedings but only in so far as they relate to the 1st defendant's defence of the action. I appreciate that this will be a difficult matter to deal with on taxation, as it has to assume that part of the costs relate to the other defendants, who have already paid. I consider that the only fair way of ascertaining those costs is to direct the taxing master to assess the 1st defendant's share of the costs at half the total, the other defendant's having acted in concert and not incurred extra costs as a result of there being two of them.

29. In the event of any difficulty in respect of the above orders there will be general liberty to apply.