THE REPUBLIC OF TRINIDAD AND TOBAGO IN THE HIGH COURT OF JUSTICE Claim No. CV2015-00128 Between HOOKMALLY ALI LIMITED Claimant AND PETROLEUM COMPANY OF TRINIDAD AND TOBAGO LIMITED [PETROTRIN] [INCORRECTLY SUED AS PETROLEUM COMPANY OF TRINIDAD AND TOBAGO] Defendant Before The Honourable Mr. Justice Frank Seepersad Appearances: 1. Ms. L. Francis for the Claimant 2. Mr. K. Garcia instructed by Ms. M. Sinanan for the Defendant Date of delivery: 30 th June, 2016 Page 1 of 17
DECISION 1. Before the Court for its determination is the Claimant s claim by virtue of which the following reliefs were sought against the Defendant: a. Damages for breach of contract made on or about December 2013 between the Claimant and Defendant for the rental and use of excavator equipment registration No. SN#CAT0320CHSBN0922-320CL. b. Damages for consequential loss suffered as a result of the negligence of the Defendant, the servant and/or agent of the Defendant in the use, operation, driving, management and/or control of Excavator equipment registration No. SN#CAT0320CHSBN0922-320CL on the 31 st December at Station Beach, La Brea. c. Special Damages. d. Statutory Interest. e. Such further and/or other reliefs as the nature of the case may deem fit. f. Costs. Background facts 2. In December of 2013, an oil spill occurred in the Gulf of Paria, near the southwestern town of La Brea and, as a result, a large volume of crude oil washed up unto the La Brea shoreline. 3. Thereafter, the Defendant attempted to contain and clean up the said oil spill. In furtherance of this clean up objective, the Defendant engaged the Claimant to supply an excavator on a day to day basis along with the services of an operator. Page 2 of 17
4. The excavator was used inter alia to cut channels in the earth along the shoreline so as to cause the spilt oil to flow and/or pool into these channels and become trapped therein and the excavator s bucket was also used to physically scrape the shore of the beach. 5. The Claimant contends that the engagement by the Defendant as aforesaid was by way of an oral contract. The Claimant s case is that there were no written terms of that contract and that the parties agreed to waive the formalities of drafting formal terms and conditions or written contracts for the rental of the said equipment. 6. The Claimant further contends that it was an implied term ( the implied term ) of the oral contract that the Defendant would take reasonable care in the working and the use of the excavator so as to prevent accidents and/or destruction of same and further alleged that the Defendant breached that implied term and was guilty of negligence. At paragraph 7 of the Statement of Case under Particulars of Negligence, the Claimant pleaded as follows: a. Failing to exercise any or any precautionary measures in the use and operation of the equipment; b. Negligently directing the equipment to be used in dangerous and/or risky locations and conditions; c. Causing the said equipment to be drive and placed in unusually dangerous situations or conditions causing same to become stuck in wet sand and soil; d. Failing to have the said equipment dislodged in a timely manner when it became stuck in the wet sand and oil or at all; e. Failing to hire other machinery or equipment or other assistance to have the said equipment dislodged in time or at all; f. Causing the equipment to remain stuck in the said sand and oil for over 6 hours until high tide came in and totally submerged the said equipment; Page 3 of 17
g. Failing to have the equipment removed after the tide ebbed or at all causing further deterioration and loss. 7. In its Defence, the Defendant accepted the existence of the oral agreement but denied that the parties agreed to waive the formalities of drafting formal terms and conditions or the need for a written contract in relation to the use of the excavator. The Defendant contended that the contract was made partly orally, partly in writing and partly by conduct and/or as result of a course of dealing between the parties and that the net result was that it did include written terms. Specifically, the Defendant stated that the contractual arrangement was governed by the terms of its written General Conditions of Contract (GCC). 8. The GCC contains standard terms and conditions for the performance of work by the Defendant s external/independent contractors and provides at clause 9.5 that the contractor shall hold Petrotrin harmless from and against all liabilities, proceedings, costs, charges or expenses arising out of or in connection with all materials, equipment, services, supplies and other items to be furnished by the contractor in connection with the contract. At Clause 9.6 it is stated that in no event shall either party be liable for consequential or indirect loss. 9. In its Reply, the Claimant denied that the contract was governed by the GCC and stated that the GCC only applied to services for which it was registered with the Defendant and that the services it provided under the instant contract were not services for which it was registered, since the instant contract was in the nature of Equipment Rental or Oil Spill Clean Up work. 10. On December 31, 2013, while the Claimant s operator was operating its excavator along the shoreline, same became stuck on the beach during the low tide. Efforts to free it failed and the high tide came in thereby causing the excavator to become totally submerged in sea water. Page 4 of 17
11. The Defendant s case at trial was that the work performed under the contract was in the nature of External Civil Work and/or Earthworks and that these were works for which the Claimant was registered to perform and to which the GCC applied. 12. The Defendant further argued that in the event that the GCC did not apply to the contract, the Defendant is not liable to the Claimant because at common law the course of dealings created a circumstance of bailment. The Defendant further argued that even if there was an implied term as outlined by the Claimant, the Defendant did not breach it. Issues 13. The issues that arose for the Court s determination were as follows: a. What was the true nature of the service for which the Claimant was contracted to provide and was the contractual relationship that existed governed by the provisions of the GCC? b. If the provision of the Claimant s service was governed by the GCC, whether the GCC acts as bar in relation to the instant claim; c. Whether the common law in relation to Bailment applies and insulates the Defendant from the Claimant s claim; d. If the provision of the service was not governed by the GCC, whether the implied terms outlined by the Claimant applied to the contract and what, if any, were the other terms and conditions which governed same; e. Whether the Defendant is liable to the Claimant for breach of contract and/or negligence. Resolution of Issues: 14. The Defendant s evidence was that the operator and excavator were used to cut channels along the shoreline to enable the spilt oil to flow into or pool into the said channels and the Defendant argued that this amounted to earthwork. The Defendant asked the Court to consider that the term earthwork was defined in the Merriam Webster Dictionary as Page 5 of 17
an embankment or other construction made of earth; especially one used as a field fortification; or the operations connected with excavations and embankments of earth. 15. The Defendant argued that the primary purpose for which the Claimant s excavator was engaged was to scoop the earth s surface thereby cutting channels. The evidence also established that the excavator s bucket was also used to scoop up spilt oil and place same into the channels which were dug. 16. The Claimant in the course of its submissions pointed out that in the Defendant s Work Definition Booklet at page 14 which was exhibited before the Court as document 14, earthworks is defined in the following terms: includes clearing, grubbing, cutting, excavation, benching, shoring, filling and compacting of areas in soil or rock, using mechanical earthmoving equipment such as tractors, loaders and excavators, rollers, including sheep foot rollers and vibratory type compactors for the construction of site infrastructure as well as sampling and provision of density test results and would include construction of pollution pits, water dams and landfill areas for solid waste disposal. 17. The Court formed the view that the work undertaken by the excavator could not be confined to the category of earthwork. The Claimant was engaged in an emergency oil spill cleanup and its excavator manned by its operator was used in that process. All the activity that was undertaken on the shoreline was done in furtherance of the ultimate objective, which was the cleanup of the spilt oil. The Court therefore felt that the Defendant s attempt to compartmentalize the work was artificial, unfair and unfortunate and its invitation for the Court to treat the work as earthworks in accordance with the Webster Dictionary definition was disingenuous. 18. Ms. Davis Beharry testified on behalf of the Defendant and stated that the Claimant was not registered for Environmental Works or for Equipment Rental Services. Her evidence was to the effect that the GCC applied in relation to works for which contractors were duly registered. The Claimant was registered for External Civil Work and for Earthworks. The Defendant also sought to rely on the Exhibit CDB2 to Ms. Davis Page 6 of 17
Beharry s witness statement. This was a letter dated 25 th April, 2005 which indicates that the Claimant Company accepted the Defendant s General Conditions of contract when it was duly registered. According to the witness s evidence, registration is not automatic and she testified that the Defendant undertakes evaluations before it registers any contractor for a requested category. When the acceptance letter was signed in 2005, neither the Claimant nor the Defendant could have reasonably contemplated that the Claimant would have been called upon to engage in the assistance of oil spill cleanup work at La Brea. The Defendant also has, within its work categories, a specific category of work in relation to oil spill cleanup, and contractors could apply to be registered for same. The Claimant however never submitted any request to be so registered. The said letter did not expressly say that in the event the contractor accepted any future work with the Defendant that fell outside the scope of works for which registration was obtained, that same would be subject to the provisions of the GCC. 19. The Court rejected the Defendant s suggestion that the intent of the letter dated 25 th April, 2005 was to bind the contractor to the terms of the GCC even if the contractor, subsequent to its registration, engaged in works for which it was not registered. The Defendant also relied on clause 30:1 of the GCC and submitted that this clause rendered the Claimant s case wholly unwinnable as the clause provides that the contractor shall be deemed to have visited and carefully examined the site of the work and the surroundings; to have satisfied itself as to the nature and conditions of existing facilities, possible obstructions etc 20. The Defendant had clearly defined work categories. Category 80 dealt with Environmental Matters and two areas of work which are provided for are oil spill response and cleanup. There is also a category of work referred to as Earth Moving Equipment Rental Services. Mr. Azard Shah outlined at paragraph 6 of his witness statement the procedure that is usually adopted to engage contracting services and he testified that the procedure also applies in relation to merit awards where contractors are engaged in emergency situations. From this witness s evidence, it was evident that the outlined procedure was not complied with in relation to use of the Claimant s excavator. Page 7 of 17
After the Claimant s excavator was used and suffered damage, the Defendant generated a purchase order agreement and this document was signed by or on behalf of the Claimant. Having considered the evidence and the nature of the task that was engaged, the Court formed the view, and found as a fact, that the Claimant s excavator and its operator fell under the purview of, and was subject to, the directions issued by the Defendant as it related to oil spill cleanup works. The site at La Brea had been cordoned off and only authorised personnel wearing protective gear were allowed on site. The Claimant s representatives other than the operator had no meaningful access to the coast line area and the operator s activity and the scope of operation was determined and directed by the Defendant. The purchase order generated by the Defendant was issued, subsequent to the use of the Claimant s excavator, and even though it was executed by agents of the Claimant, the signing of same could not result in the retroactive incorporation of the terms of the GCC in relation to the arrangement that existed between the parties. 21. There was an evident departure from the applicable standard procedures usually engaged by the Defendant and this departure may have been dictated by the emergency of the situation that arose. The evidence suggested to this Court that the Defendant did not have a proper working plan in place to deal with the magnitude of the oil spill that had manifested itself in La Brea. The Defendant adopted a reactive stance and its failure to have approved systems and clear protocols in place to deal with the circumstance that occurred in La Brea has to be condemned. It should have always been at the forefront of the Defendant s contemplation that an oil spill could occur and a clearly defined and methodical system should have been in place to deal with any such circumstance. In the absence of clearly defined emergency response protocols the Defendant rented the Claimant s excavator with an operator so as to assist in its oil spill cleanup response efforts. 22. This Oil Spill was a matter of national concern. The entire beach and coast line which was affected was deemed to be hazardous. The area where the excavator was deployed was cordoned off and no one from the Claimant company (other than the operator of the equipment which Defendant rented) including the Claimant s directors or managers Page 8 of 17
would have had access to the affected area. Consequently, there could not have been careful examination of the site of the work or the surroundings so as to be satisfied of the nature and conditions, possible obstructions etc. 23. Protective clothing and gear had to be used by persons and security personnel were stationed at the entrances. The excavator was sent up to 10 miles up the coast line by the Defendant and those areas could not have been visible from the entrance. Mr. Ali on behalf of the Claimant went to the beach prior to the provision of the excavator. 24. Even if the terms of the GCC governed the arrangement, Clause 30:1 in the circumstances can provide no protection to the Defendant as the Claimant had no opportunity to assess the inherent risks that were involved. 25. The Court finds that it is inherently more probable that the Claimant trusted the Defendant to act responsibly and not negligently with its equipment and the terms of the GCC, in the opinion of the Court, did not govern the arrangement between the parties. What were the terms that governed the relationship and, does the common law with respect to Bailment apply? 26. The Defendant submitted that in the event the Court found that the terms of the GCC did not govern the arrangement between the parties, the relationship had to be viewed as one of bailment. In Halsbury s Laws of England, Volume 2 (2008), at paragraph 1554, the common law in relation to Bailment is outlined as follows: a. The owner of a chattel which he lets out for hire is under an obligation to ascertain that the chattel is reasonably fit and suitable for the purpose for which it is expressly let out; b. His delivery of it to the hirer amounts to an implied warranty that the chattel is in fact as fit and suitable for that purpose as reasonable care and sill can make it; c. If, therefore damage or loss is caused to the hirer by reason of some defect in the fitness of the chattel of which the owner was or ought to have been aware, the owner is liable not only for the immediate results of his lace of care, but also for Page 9 of 17
any other consequences which may reasonably be supposed to have been within the contemplation of the parties. 27. This issue of Bailment was never pleaded and the Defendant in its submissions sought to import the said principle and submitted that the Claimant s delivery of its excavator amounted to an implied warranty that the excavator was fit and suitable for the purpose for which it was ultimately used. In this case and having regard to the peculiar and industry specific activity that had to be undertaken in the context where the Claimant had never been registered to undertaken oil spill cleanup works, the onus would have been on the Defendant to be satisfied that the excavator was suitable to be used on the shore. In doing so, issues such as the level of sand saturation and the weight of the excavator should have been considered by the Defendant. The work that had to be engaged was not within the Claimant s area of expertise and no proper assessment of the aforesaid beach could have been made by the Claimant or its representatives so as to evaluate risk. A request was made to rent a piece of their equipment and the Defendant had the responsibility of ensuring that the equipment requested was fit for the purpose for which it was to be used and that it was ultimately safely used. 28. The Defendant also referred the Court to Halbury s Laws of England, Fourth Edition, Volume 2 par. 1554 which states that: a. It is negligent to let out on hire a vehicle to convey a number of people or a quantity of merchandise without previously taking care that the vehicle is reasonably safe, and where a horse jobber lets out a horse he impliedly warrants that it is of sufficient capacity and docility for the purpose for which it was hired; b. A similar warranty of fitness extends to a servant of the bailor who accompanies a chattel and whose services are necessary for the proper use and enjoyment of the chattel by the hirer; in this case the warranty of the bailor is no longer confined to those acts of his servant which are within the scope of his employment; Page 10 of 17
c. The warranty extends to all acts of the servant in carrying out the responsibility which the bailor has delegated to him. 29. The Defendant contended that it would have been negligent of the Claimant to have let out or hire an excavator to work on the shoreline in the vicinity of an oil spill to cut channels in the earth along the shoreline without previously taking care to ensure that the excavator was reasonably safe and stated that in letting that particular excavator for that particular purpose, the Claimant impliedly warranted that the excavator was suitable for the purpose for which it was hired. A similar warranty of fitness, the Defendant argued, extended to the Claimant s operator, whose services were necessary for the proper use and enjoyment of the excavator by the Defendant. The Defendant stated that the warranty was not confined to those acts of the operator which were within the scope of his employment, but extended to all acts of the operator while operating the excavator and if the excavator became stuck as a result of the manner in which the operator controlled it, the responsibility fell on the Claimant and not on the Defendant. 30. The Defendant contended that the excavator was under the control of the Claimant s operator and that he was in charge of and manipulated the controls of the excavator and therefore, the Claimant is responsible for the actions of its employee. 31. During cross examination, the Claimant s operator, David Seecharan, accepted that he had control over the excavator and the following questions were asked of him and his responses were as follows: Counsel for the Defendant: Response: Counsel for the Defendant: It was you sir who was actually in control of operating the excavator? Yes If Petrotrin personnel told you to do something that was unsafe, like drive excavator into middle of ocean you had the discretion to refuse to do that. Page 11 of 17
Response: Counsel of the Defendant: Response: Counsel for the Defendant: Response: Yes That is why you say in paragraph 10 of your witness statement you say I never operated the excavator in the water, I confined my operations to the shoreline only. That s because you were in control of the excavator. Yes And you retained the discretion, did you not, no matter what Petrotrin s personnel told you to do, decide if and where it was safe to use the excavator. Yes 32. The Defendant therefore suggested that it was the operator who had the final say as to whether he would comply with the directions of the Defendant and that if the requested activity was deemed to be unsafe then Mr. Seecharan should have refused to comply. 33. The Defendant never pleaded in its defence that the excavator was not fit for purpose for which it was used and the issue of Bailment was not raised. The Court found that it had before it no evidence so as to establish on a balance of probabilities that the excavator was not fit and suitable to conduct work on the beach. The Defendant rented the excavator to assist in its oil spill cleanup operations together with the use of an operator. The operator at the material time was not an independent contractor, but he had to follow the directives given by the Defendant. The Defendant did not plead that the excavator became stuck as a result of the operator s negligence nor was any evidence adduced to establish that the operator s control or management of the excavator caused it to become stuck. On the contrary, the evidence established that the excavator had in fact been used in the cleanup effort extensively for 5 days prior to it becoming stuck. Page 12 of 17
34. The Court therefore found as a fact that at the material time the excavator and its operator were both under the purview of the Defendant and Mr. Seecharan was at the time the employee of the Defendant pro hac vice. The Court also found as a fact that the excavator was reasonably fit and suitable to engage in the type of work for which it was used. Consequently, the law in relation to Bailment provides no assistance to the Defendant. Was there negligence? 35. Based on the evidence, the Court found that the material facts in this case are as follows: a. The Oil Spill was an emergency situation attributed to the Defendant and the onus was on the Defendant to initiate and execute an oil spill cleanup. b. The Defendant s representatives/servants and/or agents directed the excavator operator, Mr. Seecharan, as to where to deploy the excavator and determined the work that was to be done on the beach. c. The Defendant failed to contact the Claimant when the excavator became stuck in low tide at 10 am and the Claimant was only informed of the situation around 3 p.m., some 5 hours later and after the tide had come in and the excavator was then already submerged in seawater. d. The Defendant was at all material times aware that the Claimant was not a registered contractor to engage in Oil Spill Cleanup operations or Hazardous Waste disposal. e. The Defendant adduced no evidence that satisfy the Court that adequate steps were taken to dislodge the excavator and no equipment or machinery was on site to deal with such a circumstance. f. The oil spill cleanup operation extended further up the beach from the entrance area of the beach (which was the area shown to the Claimant s representative) by at least 10 miles and the Defendant s officials directed and guided the Claimant s operator to go further and further up the beach. Page 13 of 17
g. The excavator became stuck in an area close to the river mouth which was many miles from the entrance of the beach. 36. The evidence led this Court to find that the Defendant failed to implement any proper precautionary measures in relation to the use of the excavator. No evidence was led as to whether adequate steps were taken so as to identify the likely risks to which workers and employees may have been exposed and there was no evidence that any assessment of the work along the beach and close to the shoreline was made in relation to the suitability of the excavator that were used in the cleanup. At the Defendant s direction, the excavator was taken close to the shore line and it traversed upon wet sand. The area where the excavator was located when it became stuck was a considerable distance away from the area at the beach entrance which was shown to the Claimant s representative when the site visit was undertaken and although the operator said in evidence that he retained a discretion as to whether the work that he was instructed to perform was safe, there is no evidence to suggest that he had the requisite knowledge and/or capability to make any considered determination as to the inherent risks that were involved prior to taking the excavator close to the shoreline. The possibility that equipment working on sands subject to the tides could become stuck should have been contemplated by the Defendant and the necessary equipment and/or technical expertise to deal with such a situation should have been available at the site. No adequate precautions were taken nor were provisions made to guard against or to mitigate the real and foreseeable likelihood that the excavator could have become stuck. Further, no technical or engineering assessment was undertaken to determine whether the level of water saturation of the sand could have withstood the weight of the excavator. These are all facts to which the Defendant ought to have addressed its mind and it ultimately failed to consider whether its deployment of the excavator on the area closer to the shoreline was safe. 37. The issues as to whether a job safety analysis or risk/technical/emergency assessment as to sand saturation and the capability of the area to sustain the weight of the excavator should have been considered, and these considerations fell within the ambit of items (b) and (c) as pleaded under the Claimant s particulars of negligence to its statement of case Page 14 of 17
and the aforesaid assessments were necessary so as to determine whether the excavator was to be used in dangerous conditions. 38. The Claimant was not registered to undertake oil spill cleanup work and its excavator and operator were rented on a day by day basis. The Claimant made its equipment and operator available to the Defendant for use in the cleanup activity and the Claimant had no control or knowledge as to the nature of the work that would be undertaken. At the time the excavator was engaged, the operator, Mr. Seecharan, was required to comply with directions issued by the Defendant. In such a circumstances, there was no obligation on the Claimant to engage in any exercise so as to determine whether there was any element of risk in relation to the use of its excavator as the Defendant had direct control and possession over same. On the evidence the Defendant failed to inform the Claimant of the fact that the excavator had been stuck in a timely manner and the Claimant was therefore afforded no opportunity to implement measures so as to mitigate the possibility of the loss of its excavator. 39. The oil and gas sector inherently involves elements of hazard and the possibility of accidents and in particular oil or gas spills must be a focal point of concern. 40. The execution of oil spill cleanup operations should have been undertaken by skilled persons with the requisite degree of specialization and the systems that were implemented by the Defendant to deal with the oil spill cleanup appeared to be ad hoc, antiquated and arbitrary. The use of the Claimant s operator who had no special skill and/or training to deal with oil spill cleanup operations was also ill advised and demonstrative of the Defendant s failure to properly assess or appreciate the risks that were associated with the hazardous exercise that was engaged. Ultimately the Defendant was charged with the responsibility of ensuring that the Claimant s excavator was used in a safe manner and had a duty of care so as to ensure that no damage was occasioned to the excavator which it rented. 41. It is also evident to this Court that this jurisdiction lacks cohesive legislation and regulations to govern the operations of entities like the Defendant when situations such as Page 15 of 17
the La Brea oil spill occur. Companies like the Defendant should not be allowed to operate unless there is strict compliance with mandates which require risk evaluation and the development and active implementation of response strategies to deal with oil or gas spill scenarios. Players in the oil and gas sector should be required to demonstrate and test their response capabilities through regular exercises. As is evident in many area of national life, there is no focus on the need to be proactive and when the inevitability of an industry related accident occurs, there is often a reactive and scrambling response. 42. As a nation we cannot continue along this path because the time will soon come when our proverbial luck will expire and our lack of preparedness will result in our ruin. Antiquated pieces of legislation like the Oil Pollution of Territorial Waters Act Chapter 37:03 enacted in 1951 ought to be revisited and meaningful fines and penalties that have a direct deterrent effect should be implemented. Under the existing legislation, if for example oil is discharged or allowed to escape in our waters from a vessel, the fine on summary conviction is $10,000.00. Such a penalty does not even amount to a slap on the wrist when one considers the adverse socio and environmental impact that an oil spill can occasion. Well thought out disaster management plans must be considered and there should also be a focus on the challenges that may militate against the effectiveness of response techniques and response strategies. Self-preservation mandates a proactive approach. 43. It appears that the Defendant had no cohesive oil spill contingency response plan that dictated the information and process by which it could manage a disaster response for the immediate to the longer term. 44. The evidence established on a balance of probabilities, that the Defendant breached the duty of care that it owed to the Claimant to use its excavator in a safe manner. Accordingly the Claimant is entitled to damages for the consequential loss it suffered as a result of the negligence of the Defendant, its servants and/or agents with respect to its use and operation of the Claimant s excavator No. SN#CAT0320CHSBN0922-320CL. This trial however, dealt only with the determination of liability and therefore the quantum of Page 16 of 17
damages that ought to be paid to the Claimant and the associated costs shall be assessed and determined before a Master in Chambers.. FRANK SEEPERSAD JUDGE Page 17 of 17