Dear all,

 

A neat little duty of care case in the UKPC today in Great Lakes Reinsurance v RAV Bahamas [2024] UKPC 11.

 

The claimant, MBP, (whose position Great Lakes was subrogated to) leased a dock in a marina in the Bahamas. The marina was owned by the defendant, RAV.  MBP stored a boat at its Marina (named Rum N’ Coke) which was insured by Great Lakes. The lease of the dock contained a clause which provided that the tenant (i.e. MBP) was responsible for “taking all necessary precuations to ensure that the Boat is secure from damage from any and all causes including… theft”. It further contained an exclusion clause which provided the landlord would not be liable to the tenant for “any act omission or negligence of any porter, attendant or other servant of the landlord in or about the performance or purported performance of any duty relating to the provisions of the said services”.

 

In July 2009(!) the boat was stolen from the dock. In the course of that theft, one thief (impersonating the owner) caused RAV’s employee, Mr O’Neil Rolle, to prepare the boat for the theft. However, it seems that these acts did not actually matter in whether the theft occurred - there was a facility at the dock for keys to be retained and subject to a procedure for release, but MBP did not use this facility. Anyone at any time could simply have walked into the Marina and stolen the boat.

 

Great Lakes paid out on MBP’s insurance claim, and brought an action in negligence against RAV. The claim was allowed by the trial judge, who applied the Caparo ‘Test’ and found a duty in tort on RAV’s part. Mr O’Neil Rolle had been negligent by facilitating the theft, and the exclusion clause did not cover this conduct (and in any event would be disapplied by consumer legislation). This judgment was overturned by the Court of Appeal. This was challenged before the UKPC.

 

It was accepted that Bahamian law was the same as English and Welsh law in this context. Lord Burrows, giving the judgment of the Board, noted that the allegation here was that RAV “faile[d]… to confer a benefit on MBP by preventing a third party causing harm to MBP. The Board is not primarily dealing with acts by RAV which had harmed MBP (i.e. which have made MBP worse off” (at [19]).

 

Lord Burrows goes on to recite the cases on conferring benefits versus making worse off in the context of Donoghue v Stevenson type claims – Robinson, N v Poole and HXA v Surrey. He notes (by reference to Tofaris and Steel (2016) 75 CLJ 128) that liability for failing to confer a benefit there must be assumption of responsibility, a prevention of another from assisting the victim, special control over the danger or an obligation arising from status (at [20]-[21]).

 

It was accepted that it had to be shown RAV had assumed responsibility. The Board rejected any such assumption. RAV was not asked to provide any safe keeping of the keys or any other security checks before a boat was sailed away. The existing security system had functioned as intended and it was not shown to make any difference to the theft.

 

Most importantly, the Board held that the lease itself negated any duty of care (at [25]) and any implied contractual duty (at [42]). Going further than this, it held that absent clear words to the contrary, it would be very rare for a landlord to assume any responsibility to prevent theft of their tenants property, and that the case was analogous to Halbauer v Brighton Corp [1954] 1 WLR 1161 where it was held that the owner of a caravan park did not owe a duty to prevent theft of caravans if they were not bailees of the caravan (at [26]-[27]). Lord Burrows contrasts the decision in Stansbie v Tromann  [1948] 2 KB 48, where the defendant decorator was held liable for failing to lock the doors – there was a (contractual) assumption of responsibility on such facts. The Board also dismissed an argument that RAV was liable vicariously for the conduct of Mr O’Neil Rolle. However, the Board held there was no breach of duty and his acts did not cause any loss (at [40]-[41]).

 

Of most interest from my perspective is that the Board also considered Airport Authority v Western Air  [2020] UKPC 29, where the owner of an airport was held liable for the theft of a plane kept there. The decision is very quickly distinguished (at [36]). Though Lord Burrows emphasised Lord Kerr’s findings that there was a creation of a source of danger and an assumption of responsibility, if one reads that decision in full one will find that Lord Kerr (i) applied the Caparo ‘test’, (ii) re-cast Lord Hoffmann’s reasoning in Gorringe as being concerned with policy, (iii) said that outside of public duty cases the courts must consider if liability is ‘fair just and reasonable’ and (iv) held that the theft meant the claim against the airport was one for ‘property damage’. Lord Burrows is being very kind in focussing only on the assumption of responsibility reasoning, which is with respect an afterthought.

 

It seems to me that the decision is correct, but arguably the terms of the lease should have been the start and end of the matter. It negated any assumption at all, just as the terms of the reference in Hedley Byrne negated responsibility on the banks part.

 

It is a shame the Board was not asked to overturn Airport Authority. With respect to the late Lord Kerr, its reasoning is very poor. The judgment reads as if there had been essentially no further decisions on duty of care post-dating Caparo (Michael and Robinson receive no mention, despite Lord Kerr giving a full judgment in the former). Hopefully, after this decision and the forceful emphasis of Robinson and N v Poole, there will be no further reference to Airport Authority.  

 

Best,

 

Matthew

 

Matthew Hoyle Barrister www.oeclaw.co.uk Switchboard: +44 (0)20 7583 2000         One Essex Court, London Temple London EC4Y 9AR United Kingdom Tel +44 (0)20 7583 2000 clerks@oeclaw.co.uk One Essex Court, Singapore #04-14 Maxwell Chambers Suites 28 Maxwell Road Singapore 069120 Tel +65 6634 1363 singapore@oeclaw.sg           Information in this message is confidential and is likely to be subject to legal professional privilege. If you have received this message in error, please notify me immediately and do not disclose, copy, distribute or retain either the whole or any part of the message or any attachments. If you are not the intended recipient, please telephone (020) 7583 2000 immediately. Regulated by the Bar Standards Board.

 

 

 

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