Southesk Trust Company Ltd & Anor v. Angus Council & Ors [2006] ScotCS CSOH

OUTER HOUSE, COURT OF SESSION

[2006] CSOH 006

A1599/02

OPINION OF LORD MACPHAIL

in the cause

(FIRST) SOUTHESK TRUST COMPANY LIMITED and

(SECOND) ELSICK FARMS LIMITED

Pursuers;

against

ANGUS COUNCIL

First Defenders;

NYNAS UK AB

Second Defenders;

HARRY LAWSON LIMITED

Third Defenders;

SCOTTISH WATER

Fourth Defenders:

________________

Pursuers: Clarke; Brodies, W.S.

First Defenders: No appearance

Second Defenders: Jones, Solicitor Advocate; Brechin Tindal Oatts

Third Defenders: Hofford; HBM Sayers

Fourth Defenders: Haldane; Dundas & Wilson

20 January 2006

Introduction

[1] The pursuers sue this action as the trustees acting under a deed of trust between the late Earl of Southesk KCVO and others. The property they hold in trust includes the Kinnaird Mill Trout Farm near Brechin, Angus. The trout farm is fed from the waters of the River South Esk. The pursuers seek damages for the loss and damage which they aver they sustained when a large quantity of diesel oil entered the river after a spillage during a delivery of oil at Brechin High School. As a result, say the pursuers, a substantial quantity of fish in the trout farm became contaminated by the oil and had to be destroyed; and the pursuers also suffered other losses. They sue each of the defenders for payment of £112,354.82. The first defenders are the local authority who are the owners of Brechin High School and the employers of the janitors. The second defenders produce and deliver oil for heating purposes. The third defenders were engaged by the second defenders to deliver the oil to the school. The fourth defenders are a body corporate created by the Water (Scotland) Act 2002 in terms of which they have succeeded to the liabilities of the North of Scotland Water Authority.

[2] Each of the defenders have stated a general plea to the relevancy of the averments against them, while the pursuers have stated pleas to the relevancy of the averments of the first, second and third defenders. When the case called before me on the Procedure Roll there was no appearance on behalf of the first defenders. I was advised that they accepted that as far as they were concerned there should be inquiry by way of proof before answer. Counsel for each of the other defenders submitted that the action so far as laid against them should be dismissed. Counsel for the pursuers did not argue their pleas to the relevancy and invited me to repel them.

[3] Before counsel embarked on their submissions, counsel for the fourth defenders tendered a minute of amendment containing averments and a plea-in-law to the effect that any obligation on their part to make reparation to the pursuers had prescribed in terms of section 6 of the Prescription and Limitation (Scotland) Act 1973. On counsel's unopposed motion I allowed the minute of amendment to be received and I appointed the pursuers to lodge answers, if so advised, within six weeks. Counsel were agreed that the hearing on the Procedure Roll should proceed notwithstanding this development.

[4] It is convenient to record now that the solicitor advocate for the second defenders tendered a supplementary note of argument at the bar, and I allowed it to be received. In the course of the hearing I allowed the following minor amendments. In article 3 of the condescendence I allowed the sentence at the foot of page 24 and the top of page 25 to be amended to read:

"At the material time businesses, including fish farms, could be found located at rivers in Scotland or used waters diverted from such rivers."

In article 9 on page 37, at lines 17 and 19, I allowed the figure of "450 kg", startlingly averred to be the average selling weight of the pursuers' fish, to be modified to "450 gm".

The pursuers' averments of fact

[5] It is necessary to set out the pursuers' averments of fact in articles 2 and 3 of the condescendence in so far as they were discussed at the hearing. It will be convenient, for future reference, to divide the averments into numbered sub-paragraphs. In article 2 the pursuers aver:

"(Cond 2)

(1) The property held in trust by the pursuers in terms of the Deed of Trust includes the Kinnaird Mill Trout Farm near Brechin in Angus. The trout farm is located adjacent to and is fed from the waters of the River South Esk. The first defenders own Brechin High School and employ inter alia the janitor and assistant janitor at the said school. The second defenders produce and deliver oil for heating purposes. In about June 1999, the first defenders ordered oil from the second defenders. The third defenders were engaged by the second defenders to deliver the said oil.

(2) At about 7.00 a.m. on about 22^nd June 1999, Adam Finnie, an employee of the third defenders, arrived at Brechin High School to deliver the oil. At all material times Adam Finnie was acting in the course of his employment as an employee of the third defenders. Edwin Murray, assistant janitor at the school, was in attendance at the oil tanks. At all material times Edwin Murray was acting in the course of his employment as an employee of the first defenders.

(3) The oil tanks at the school were housed within a single-storey brick building with a paved flat roof. The single-storey brick building was attached to the main school premises. There were two oil tanks in the building. Oil was delivered by means of connecting an oil delivery hose to the connection point on the outside wall of the building and delivering oil into the first tank. The two tanks were linked by a pipe. The link pipe was approximately 1.25 inches in diameter. Oil fed into the first tank passed to the second tank through the link pipe under the action of gravity. The first tank could fill up even though the second tank was only partially filled. The first tank was therefore able to overflow, even when less than the full capacity of the two tanks had been delivered. The first tank was more likely to overflow if oil was delivered more quickly than would allow it to pass into the second tank. At all material times the first defenders were aware that if the rate of flow into the first tank exceeded the rate of flow from the first to the second tank, oil could back-up in the first tank and escape through the vent pipes. No bund or catchpit or chamber was located at the site of the tanks for the purpose of containing an overflow of oil and avoiding or reducing the possibility of it flowing into the town's drainage system. Each tank had a vent pipe. Each vent pipe projected through the roof. The vent pipes were not visible to a person standing at the hose connection point. There were two drains in the paved flat roof. These drained to the drainage system. On the outside of the wall of the building containing the tanks there were gauges showing oil levels within the tanks.

(4) Edwin Murray [the assistant janitor] gave instructions to Adam Finnie [the third defenders' employee]. Adam Finnie connected the oil delivery hose. Adam Finnie commenced pumping oil from the delivery vehicle to the tanks. The oil delivery hose was 2 inches in diameter. Accordingly, oil flowed into the first tank from the delivery vehicle more quickly than it could transfer, by means of the linking pipe, into the second tank. During delivery of the oil, Edwin Murray did not check the vent pipes to see whether oil was escaping. Edwin Murray did not supervise the delivery of oil by Adam Finnie in order to check that oil was being delivered at an appropriate rate or to check the gauges to see whether a tank was becoming full. During delivery of the oil, Adam Finnie did not take steps to have the vent pipes checked to see whether oil was escaping. Adam Finnie did not ask Edwin Murray to check the vent pipes to see whether oil was escaping. Adam Finnie did not check the gauges to see whether a tank was becoming full.

(5) A substantial quantity of oil escaped from one of the vents in the paved roof of the building. At about 11.50 a.m. on 22^nd June 1999, the second defenders contacted the Scottish Environment Protection Agency (SEPA) and informed them that approximately 1500 gallons of oil had escaped from a vent as the tank was being filled. The North of Scotland Water Authority estimated that between 1200 and 1700 gallons of diesel oil had been spilled. Significant quantities of the oil entered the drainage system and thereafter entered the River South Esk. SEPA noted that hydrologists doing work at a gauging station on the river reported seeing diesel oil in the river on 23^rd June 1999. Janice Wotherspoon, a SEPA Environment Protection Officer, also noticed diesel in the River South Esk on 23^rd June 1999. Further oil was discharged from the drainage system into the river in the evening of 23^rd June 1999 or in the early hours of 24^th June 1999.

(6) As a result of the oil spillage on 22^nd June, a substantial number of fish in the fish farm became contaminated by the oil and required to be destroyed. The pursuers discovered the contamination of the fish when they were harvested, at about 4.30 a.m. on the 24^th June 1999. By letter dated 28 June 1999, North of Scotland Water Authority advised the first defenders of the seriousness of the incident and required the first defenders to notify the authority in writing within fourteen days of all remedial steps the first defenders intended to take to prevent a repetition of such an incident. The authority stressed that all deliveries of oil and diesel must be supervised. The authority invoiced the first defenders for the costs of remedial action. Thereafter, the first defenders issued instructions that deliveries of oil required to be supervised.

(7) Further explained and averred that the tanks were installed when the school was built in 1970. From about 1974 it was known to the first defenders that the gauges were slow in displaying the levels of oil in the tanks. The first defenders' head janitor, David Candy, understands there to have been two previous oil spillages from the tanks. The first defenders or their predecessors had for many years ordered supplies of oil from the second defenders. The second defenders, through the third defenders, had arranged for the delivery of oil to the first defenders' tanks during the said period. The second defenders gave instructions to the third defenders as to the procedures to be followed during delivery of oil."

[6] In article 3 of the condescendence the averments of fact continue:

"(Cond 3)

(8) In many towns in Scotland, water or other fluids which enter the drainage system flow into pipes which also carry sewage. In such a system, the pipes commonly have a means which allows for overflow from them. The means of overflow is commonly a Combined Sewerage Overflow ("CSO"). A CSO can be as simple as a hole or vent in a pipe. In the event of the level of sewage and drainage water or fluids within a pipe reaching the level at which a CSO is positioned, the contents of the pipe will overflow. Commonly, the CSO will discharge this overflow into a local watercourse. At all material times, this was the system in Brechin.

(9) The pipe into which the oil entered following upon the oil spillage hereinbefore condescended upon was a pipe which carried its contents (subject to overflow into a watercourse) to a sewage treatment works. The said pipe had, as a design feature, a number of CSOs. In particular, there was a CSO in the pipe where it ran adjacent to Skinner's Burn. Accordingly, it was a design feature of the drainage system in Brechin at the material time that water or fluids which drained into sewage pipes were to be able to overflow from the pipes into local watercourses and in particular into Skinner's Burn. Skinner's Burn flows into the River South Esk.

(10) At the material time, a piece of flow logging equipment, used for monitoring flow, which was owned or at least used by North of Scotland Water, had become lodged in the sewer pipe just downstream of the CSO which discharges into Skinner's Burn. The piece of equipment was approximately one foot square. It had been installed in a manhole by North of Scotland Water several months prior to 22^nd June 1999. It had become dislodged from its position at the manhole and had lodged in the sewer pipe. North of Scotland Water knew that it had become dislodged. It was of such a size that, if dislodged from its installed position and lodged in a sewage pipe it would block or at least partially block the sewage pipe. Its presence is likely to have caused or materially contributed to causing the contents of the sewer pipe to back up on 22^nd June 1999. The said contents then overflowed from the CSO and discharged into Skinner's Burn. Included in the said contents was the oil which entered the drainage system on 22^nd June 1999.

(11) At the material time, business, including fish farms, could be found located at rivers in Scotland or used water diverted from such rivers.

(12) [...] oil from the spillage at Brechin High School entered into the river on 23^rd and 24^th June 1999. With reference to whether the entry of the oil into the river was caused solely by the presence of the blockage, it is explained and averred that the Brechin Advertiser of 28^th October 1999 reported that the community council had been informed on the previous Monday that the pollution of the burn highlighted by them recently had been investigated by SEPA, who had inspected Skinner's Burn. The inspection had revealed pollution of the final section of the burn from the CSO at Brechin Castle. SEPA's report stated that it had previously highlighted to NOSWA the unsatisfactory nature of the CSOs on the Brechin system and had actively been seeking improvements to these overflows. SEPA further advised that they had informed NOSWA that they should have in place a policy of inspections to ensure that CSOs do not operate prematurely. Accordingly, it is believed and averred that after the blockage had been removed in June 1999 the CSO at Skinner's Burn continued to operate in an unsatisfactory manner and to discharge effluent prematurely. It is believed and averred that even without such blockage discharge from the CSO into Skinner's Burn and into the river had occurred in the past and continued to occur.

(13) Further explained and averred that the fourth defenders as successors to North of Scotland Water are the statutory body responsible for the Brechin sewerage system and know or ought to know why the oil contamination reached the river. In view of their denial that it was caused by the said blockage, they are called upon to specify what they say caused it. With reference to the fourth defenders' averment that they do not know or admit that the piece of equipment was present in the sewer pipe, it is explained and averred that by letter dated 31^st August 1999, D R Milne (Collection Manager, Tayside) of the fourth defenders' predecessor North of Scotland Water, advised SEPA that 'The problem appears to have been caused by a piece of flow logging equipment that became lodged in the sewer immediately downstream of the overflow. This piece of equipment had been installed in a manhole by our contractor a number of months earlier but was believed to have been stolen.'"

[7] I shall now consider separately the arguments presented by each of the defenders in support of their motion that their plea to relevancy should be sustained and the action so far as directed against them should be dismissed.

The pursuers' case against the second defenders

Averments

[8] It is necessary to quote in full the pursuers' case against the second defenders.

The averments appear in article 6 of the condescendence:

"(Cond 6) Separatim, the second defenders owed to the pursuers a duty to take reasonable care to avoid causing loss or damage to the property held by the pursuers in trust and in particular the fish in the fish farm. In the exercise of reasonable care, it was the duty of the second defenders to see to it that the oil was delivered to Brechin High School in a manner which did not result in a material risk that there would be an overflow or escape of the oil. In the exercise of reasonable care, it was the duty of the second defenders to prevent an overflow or escape of the oil. In the exercise of reasonable care, it was the duty of the second defenders to give adequate instructions or directions to the third defenders et separatim to the third defenders' employee Adam Finnie so as to allow oil to be delivered without overflowing or escaping. In the exercise of reasonable care, it was the duty of the second defenders to instruct Adam Finnie to have regard to the gauges on the wall and to check whether any tank was becoming full. In the exercise of reasonable care, it was the duty of second defenders to instruct Adam Finnie to take steps to have the vent pipes checked to see whether oil was escaping, such as by asking the janitor to check the vent pipes. The second defenders, as a company involved in the supply of oil to tanks located in towns in Scotland, including Brechin, knew or ought to have known that oil which was spilled would enter the local drainage system. The said defenders knew or ought to have known that oil entering the drainage system could find its way into local watercourses, whether or not the precise mechanism of such pollution was know to them. The said defenders knew or ought to have known that the local watercourses in Brechin included Skinner's Burn, which flowed into the River South Esk. The said defenders knew or ought to have known that from time to time pipes such as sewage pipes become blocked and to [sic] overflow, or otherwise be [sic] caused to overflow. The said defenders knew or ought to have known that oil which entered the drainage system in Brechin would, in the event of overflow from a sewage pipe, be liable to flow into a watercourse and then from it into the River South Esk and to cause damage to property, such as fish, in the river. At all material times the second defenders were or ought to have been fully aware of the inherently dangerous nature of oil and of the risks of pollution and damage caused by its spillage or overflow. The second defenders failed in each and all of the said duties, and by their failures caused the loss and damage hereinafter condescended upon."

Submissions

[9] The solicitor advocate for the second defenders presented two lines of attack upon the pursuers' case against them. First, the pursuers had failed to aver facts and circumstances giving rise to a duty of care upon these defenders. Secondly, even if the pursuers had relevantly pleaded a duty of care, the averments of any breach of that duty were so lacking in specification as to be irrelevant. As to the first line, the pursuers averred that the first defenders ordered oil from the second defenders, who produced and delivered oil for heating purposes; and the second defenders engaged the third defenders to deliver the oil. The oil was delivered by Finnie, who was acting in the course of his employment with the third defenders; and he was given instructions by the first defenders' assistant janitor, Murray (sub-paragraphs 1 and 2). It was plain that the pursuers were offering to prove that the second defenders sub-contracted to the third defenders the task of delivering the oil. There was a bare averment that the second defenders gave instructions to the third defenders as to the procedures to be followed during delivery of the oil (sub-paragraph 7, final sentence). The case made against the second defenders in article 6 was that they failed to give adequate instructions or directions to the third defenders and to Finnie so as to allow oil to be delivered without overflowing or escaping. They should have instructed Finnie to have regard to the gauges on the wall and to check whether any tank was becoming full; and to take steps to have the vent pipes checked to see whether oil was escaping.

[10] However, the fundamental problem for the pursuers was that while they pleaded these duties of instruction, they did not aver any factual basis which could give rise to such a duty upon the employer of an independent contractor. As a general rule, an independent contractor was not subject to detailed direction or control from the employer in the manner of performing his work, and was alone responsible if by his negligence he caused loss or damage to a third party (Walker on Delict (2^nd edn), pp 154-155; Clerk and Lindsell on Torts (18^th edn), paragraph 5-48; D & F Estates Ltd v Church Commissioners for England [1989] 1 AC 177 per Lord Bridge of Harwich at 208-209). To succeed against the second defenders the pursuers would have to show either that they were in some way responsible for the acts and omissions of Finnie and the third defenders, or that the second defenders themselves had committed some other act or omission for which they were directly liable. It was conceded that there were apparent exceptions to the general rule that an employer of an independent contractor was not liable for the negligence of the independent contractor: in these exceptional cases the employer was himself in breach of some duty which he personally owed to the third party. Here, it was not clear on which of these exceptions the pursuers intended to rely. It appeared, however, from the averments made relative to instructions, that they might be founding on the exception relative to the employer's retaining control and direction of the operation in his own hands (Walker, supra, pages 160-161; Stephen v Thurso Police Commissioners (1876) 3 R 535; Marshall v William Sharp & Sons Ltd 1991 SLT 114). Or it might be that the pursuers intended to maintain that, while the second defenders did not retain actual control, they issued inadequate instructions. The pursuers had failed to give fair notice of why the defenders should be held responsible (Weir v East of Scotland Water Authority 2001 SLT 1205). If they intended to advance a case based on an alleged omission to give instructions, they had not averred any facts and circumstances from which it could be inferred that the second defenders were in control of the delivery of the oil. If they intended to advance a case based on commission of a fault, they must offer to prove what instructions the second defenders gave to the third defenders, why they were inadequate, that they were passed to Finnie and that he acted upon them and thus caused or materially contributed to the accident.

[11] The second defenders' second line of attack was that even if the pursuers had relevantly pleaded a duty of care, the averments of any breach of that duty were so lacking in specification as to be irrelevant: they also failed to give the pursuers fair notice of the case the pursuers intended to make. The pursuers averred that the oil overflowed because the diameter of the link pipe was less than that of the delivery hose. But the pursuers did not offer to prove that the second defenders knew or ought to have known that, or the speed of delivery chosen by Finnie. While the pursuers said that the second defenders ought to have instructed Finnie about the gauges and the vents, they also said that the gauges did not correctly display the oil levels in the tanks, and they did not aver that the second defenders knew or ought to have known of the existence of the vent pipes. The second defenders' solicitor advocate made further submissions as to lack of specification, and submitted that their plea to relevancy should be sustained and the action so far as laid against them dismissed.

[12] Counsel for the pursuer began by addressing me on the proper approach to determining whether to dismiss an action at procedure roll and on the question whether on the pursuers' averments it could not be said that the damage to the pursuers' property was reasonably foreseeable. Counsel's submissions on these matters are more apposite to the submissions made on behalf of the other defenders, and I shall refer to them in detail later.

[13] As to the legal basis of the pursuers' case against the second defenders, the pursuers' counsel submitted that the pursuers had brought themselves within one of the exceptions to the general rule that a contractor was not liable for the acts of his subcontractor. That was the exception relative to cases where the contractor was carrying out an inherently hazardous operation. Counsel relied on Honeywill & Stein v Larkin Bros (London's Commercial Photographers) Ltd [1934] 1 KB 191; The Pass of Ballater [1942] P 112; Alcock v Wraith (1991) 59 BLR 16; Walker, supra, p 159; and Clerk and Lindsell, supra, paragraph 5-59. The pursuers had expressly averred: "At all material times the second defenders were or ought to have been fully aware of the inherently dangerous nature of oil and of the risks of pollution and damage caused by its spillage or overflow" (the penultimate averment in article 6). The action should not be dismissed if the pursuers could possibly prove that the delivery of oil was capable of being regarded as the type of activity which attracted the exception rather than the general rule. The pursuers' counsel also made submissions in response to the second defenders' arguments as to lack of specification, but it will be convenient to deal with these later.

[14] In response to the submission that the pursuers had founded on the exception relative to inherently hazardous operations, the solicitor advocate for the second defenders submitted that the antepenultimate averment in article 6 referred to the inherently dangerous nature of oil, while the exception related to the danger of the operation being carried out (Honeywill & Stein; The Pass of Ballater; Alcock v Wraith; Bower v Peate (1875-76) LR 1 QBD 321). The identical averment had been made in the cases against the first and third defenders. In article 6 it was not made in the context of the averments of duty, but appeared at the end of the averments relative to foreseeability: it was not pleaded as a way of circumventing the general rule that contractors were not liable for the acts of their sub-contractors. It was not said that the delivery of oil was an inherently hazardous operation. If it was, there would be significant consequences. It was not inherently hazardous for a motorist to fill the tank of his car with petrol at a filling station.

Discussion

[15] Having considered these submissions I am not convinced, on the basis of the argument advanced by the pursuers, that they have demonstrated that the exception on which they found is part of the law of Scotland. The few cases cited were English. The earliest is Bower v Peate. There, the parties were the respective owners of two adjoining houses. The plaintiff employed a contractor to pull down his house and excavate the foundations, work which would necessarily interfere with the defendant's absolute right of support, so that the work contracted for would infringe the defendant's right if it caused damage. It was held (at pages 326-327) that the plaintiff had an absolute duty to prevent such damage, and that there was "an obvious difference" between that case and "committing work to a contractor to be executed from which, if properly done, no injurious consequences can arise." The case appears to belong to the chapter of the law concerned with the withdrawal of support from neighbouring land (Clerk and Lindsell, paragraph 5-53) and not to be authority for the pursuers' proposition.

[16] Cockburn CJ, however, said (at page 326):

". . . a man who orders work to be executed, from which, in the natural course of things, injurious consequences to his neighbour must be expected to arise, unless means are adopted by which such consequences may be prevented, is bound to see to the doing of that which is necessary to prevent the mischief, and cannot relieve himself of his responsibility by employing some one else - whether it be the contractor employed to do the work from which the danger arises or some independent person - to do what is necessary to prevent the act he has ordered to be done from becoming wrongful."

This dictum appears to be so broadly stated as to deprive the exception of any content: there are few operations which are not capable of being a source of danger to others. I am fortified in this view by the following statement in Salmond on Torts (14th edn, 1965, page 687; 21^st edn, 1996, page 461) which was approved in Salisbury v Woodland [1970] 1 QB 324 (at page 337):

"One thing can, however, be said with confidence: the mere fact that the work entrusted to the contractor is of a character which may cause damage to others unless precautions are taken is not sufficient to impose liability on the employer. There are few operations entrusted to an agent which are not capable, if due precautions are not observed, of being sources of danger and mischief to others; and if the principal was responsible for this reason alone, the distinction between servants and independent contractors would be practically eliminated from the law."

[17] The next case cited was Honeywill & Stein Ltd. The plaintiffs had done some work in a cinema and, having obtained from the owners of the cinema permission to have their work photographed, engaged the defendants to take the photographs. The photographer prepared to take a photograph by flashlight, which involved igniting magnesium powder in a metal tray. When he ignited the powder, it flared up, set fire to a curtain and caused a fire. The plaintiffs paid the cinema owners the cost of repairing the damage, and sued the defendants for that amount. The defence to the action was that the plaintiffs need not have paid because in an action brought against them by the cinema owners the plaintiffs would have had a defence that the damage had been caused by the negligence of the defendants, for whose acts or defaults the plaintiffs were not responsible as the defendants had been independent contractors. The Court held that the "ultimate employer" of an independent contractor was liable for the latter's "extra-hazardous acts, that is, acts which, in their very nature, involve in the eyes of the law special danger to others" (page 197). The Court referred to such acts as operations which were "extra-hazardous or dangerous" (page 200) and "inherently dangerous" (page 201), and approved the following statement of principle (at pages 199-200):

"The principle is that if a man does work on or near another's property which involves danger to that property unless proper care is taken, he is liable to the owners of the property for damage resulting to it from the failure to take proper care, and is equally liable if, instead of doing the work himself, he procures another, whether agent, servant or otherwise, to do it for him."

The principle is said to be one of strict liability (page 200):

"The appellants, in procuring this work to be performed by their contractors, the respondents, assumed an obligation to the cinema which was, as we think, absolute, but which was at least an obligation to use reasonable precautions, to see that no damage resulted to the cinema company from these dangerous operations: that obligation they could not delegate by employing the respondents as independent contractors, but they were liable in this regard for the respondents' acts."

[18] I regret that I do not find this decision persuasive for the following reasons. First, the distinction between hazardous and extra-hazardous acts is one which would appear to be difficult to apply in practice: it seems hard to identify a criterion for describing a given act as "hazardous" or "extra-hazardous". Secondly, the statement of principle appears to be vulnerable to the same comment as the dictum in Bower v Peate: that there are few operations which are not capable of being a source of danger to others. Thirdly, I am not convinced that the cases relied on by the Court vouch the principle. I note that a stronger view was expressed by the Supreme Court of New South Wales: that the cases cited by the Court in Honeywill & Stein Ltd "neither enunciate nor support any such general principle" (Torette House Pty Ltd v Berkman (1939) 39 SR (NSW) 156 at page 168 per Jordan CJ). Fourthly, the principle does not appear to be consistent with the ordinary rule that the greater the risk, the greater the precautions that must be taken to obviate it (Read v J Lyons & Co [1947] AC 156 at 172-173 per Lord Macmillan, 180-181 per Lord Uthwatt). It has been said that the decision of the House of Lords in Read v J Lyons & Co "constituted a denial of a general theory of strict liability for ultra-hazardous activities" (Street on Torts (10^th edn), page 396); and that the House of Lords "by accepting the principle that in the case of dangerous things and operations there is a special responsibility to take care proportioned to the danger, discarded the notion of strict liability and preserved the concept of fault" (Stoneman v Lyons (1975) 133 CLR 550 at 575 per Mason J).

[19] The pursuers also cited The Pass of Ballater. In that case the judge considered Honeywill & Stein Ltd, accepted the principle of strict liability for the use of materials dangerous in themselves, and said (at page 117):

"The point may perhaps be crystallized by saying that [the contractor] has not merely a duty to take care but a duty to provide that care is taken."

The last case cited was Alcock v Wraith (1999) 59 BLR 16, which was mentioned only briefly. The owner of a terraced house had engaged a builder to re-roof it. The builder made an inadequate joint between the tiles on the new roof and the slates of the adjacent house. The owner was held liable to his neighbour for damage caused by the penetration of rain through the joint, the trial judge having found that the making of a waterproof joint between slates and tiles was a "notoriously difficult" operation. That is a finding which may not command universal assent. The case perhaps illustrates how opinions may reasonably differ as to whether a given operation is extra-hazardous.

[20] No Scottish cases were cited in argument, and I myself have been unable to find any modern decision on this matter by the Inner House or by the House of Lords in a Scottish appeal. I note that the existence of the exception was accepted in the Outer House in Sanderson v Commissioners for the Burgh of Paisley (1899) 7 SLT 255, Anderson v Brady & Ross Ltd 1964 SLT (Notes) 11, Duncan's Hotel v Ferguson Ltd 1974 SC 191 at 196, and McKenzie v Peter McAinsh 1975 SLT (Notes) 34. Decisions which may be relevant are cited in the Opinions in these cases and in 14 Stair Memorial Encyclopaedia paragraph 2138 and 15 Stair Memorial Encyclopaedia paragraph 251. Clearly a consideration of the modern law of Scotland on this point could be undertaken only after full argument. To illustrate the difficulty of the matter I refer with diffidence to a few other cases which were not cited. In England, Brooke LJ said in Bottomley v Todmorden Cricket Club [2004] PIQR P18 at paragraph 50:

"It is therefore not necessary, even if it was appropriate for us at this level, to consider the criticisms of Honeywill v Larkin made by Professor Atiyah in Vicarious Liability in the Law of Torts (Butterworths, 1967) [chapter 32] or by Mason J in the High Court of Australia in Stevens v Brodribb Sawmilling Co Pty Ltd 160 CLR 16, 30. Honeywill v Larkin is binding on us, although it may well be that the House of Lords today would prefer to avoid subtle distinctions between what is and is not 'extra-hazardous' and would follow Mason J when he said: '[T]he traditional common law response to the creation of a special danger is not to impose strict liability but to insist on a higher standard of care in the performance of an existing duty.'"

In Australia, Mason J (as he then was) in an earlier case (Stoneman v Lyons, supra) had reviewed the law in England, the United States and Australia and had observed that this was a branch of the law notorious for its difficulty and that there was powerful authority for the proposition that the doctrine of extra-hazardous acts formed no part of the common law. In Stevens his Lordship concluded, after a further review, that the doctrine had no place in the law of Australia.

[21] I have decided not to put this case out by order for further argument on this point but only to record my response to the limited submissions addressed to me by the pursuers, which is that I am not persuaded by the English cases cited that there exists in the law of Scotland such an exception as that for which they contend. I shall nevertheless assume in the pursuers' favour that a principal is liable for the negligence of his independent contractor where the activities the latter has been engaged to perform are "extra-hazardous". I shall also assume that such activities are activities which in themselves are dangerous: and that if they are such that it is only negligence in the manner of conducting them, as distinct from the character of the activities themselves, which will probably cause damage to others, the principal is not liable.

[22] In my opinion the pursuers have not relevantly averred that the second defenders owed them any duty by virtue of this rule. The averment on which the pursuers rely is in these terms:

"At all material times the second defenders were or ought to have been fully aware of the inherently dangerous nature of oil and of the risks of pollution and damage caused by its spillage or overflow."

Since this averment appears not only in article 6, the case against the second defenders, but also in article 4, the case against the first defenders, and in article 7, the case against the third defenders, in identical terms but for the substitution for "second" of "first" and "third" respectively, it is difficult to conceive that the averment in article 6 was tailored to fit the case against the second defenders. Further, in article 6 the averment does not appear at the beginning of the article, in order to lay a foundation for the averments of duty, but at the end, apparently to justify the averments about matters of which the second defenders knew or ought to have known. Be that as it may, the important point is that the averment does not square with the doctrine of extra-hazardous acts on which the pursuers found. It is not said that the delivery of oil is an operation of an inherently dangerous nature. What is said is that oil itself is inherently dangerous and there is a risk of pollution and damage if it spills or overflows. It does not follow, however, that there is a risk of pollution or damage even if the operation of delivering the oil is executed with due care. It is not said, and in my view it cannot be said, that notwithstanding the taking of proper precautions, there is some special element of danger arising from the operation. The operation of delivering fuel is an everyday occurrence: it is delivered not only to buildings where oil is used for heating, but also to filling stations, and from pumps at the filling stations into the tanks of motor vehicles. In each case the operation would involve a risk of pollution, damage or injury if it was not executed with due care, but it entails elementary precautions which are well known and which, if taken, eliminate the risk. Thus it cannot, in my opinion, be described as inherently dangerous. Accordingly the second defenders were not under a duty to the pursuers to see that the operation was carried out without negligence.

[23] Assuming, however, the existence of such a duty, the pursuers' averments as to how the second defenders were in breach of it appear to me to lack specification. It seems from article 6 that the pursuers' case is that the duty should have been discharged by the giving of instructions:

"In the exercise of reasonable care, it was the duty of the second defenders to

see to it that the oil was delivered to Brechin High School in a manner which did not result in a material risk that there would be an overflow or escape of oil. In the exercise of reasonable care, it was the duty of the second defenders to prevent an overflow or escape of the oil. In the exercise of reasonable care, it was the duty of the second defenders to give adequate instructions or directions to the third defenders et separatim to the third defenders' employee Adam Finnie so as to allow oil to be delivered without overflowing or escaping. In the exercise of reasonable care, it was the duty of the second defenders to instruct Adam Finnie to have regard to the gauges on the wall and to check whether any tank was becoming full. In the exercise of reasonable care, it was the duty of second defenders to instruct Adam Finnie to take steps to have the vent pipes checked to see whether oil was escaping, such as by asking the janitor to check the vent pipes."

[24] The pursuers' counsel maintained that their overall point was that they offered to prove that the supplier of highly dangerous materials must instruct his contractor on what steps to take and that those steps included checking the gauges and having the vent pipes checked. It is necessary to note, however, in the first place, that it is not clear how the second defenders failed to give adequate instructions or directions to the third defenders. In article 2, sub-paragraph (7), the pursuers assert that the second defenders did indeed give instructions to the third defenders:

"The second defenders gave instructions to the third defenders as to the procedures to be followed during delivery of oil."

The pursuers do not anywhere disclose, however, what these instructions were or in what respects they were inadequate; nor do they say that the spillage of oil resulted from these instructions being followed. As to the instruction of Finnie about the oil gauges and the vents, it is not said that the second defenders knew or ought to have known of the existence of the gauges and the vents, or of the difference in diameter between the oil delivery hose and the link pipe between the two tanks, or of the liability of the first tank to overflow. Any such duty to instruct Finnie could only arise from knowledge which the second defenders had or ought to have had about the features and peculiarities of the tanks and the building to which the oil was to be delivered. It is not said, however, that the second defenders knew or ought to have known that there was a risk of harm unless the precautions relative to the gauges and the vent pipes were taken and that they failed to give instructions accordingly. Similarly, in the absence of such knowledge there could not be any duty on the second defenders to see to it that the oil was delivered to the school "in a manner which did not result in a material risk that there would be an overflow or escape of the oil." Without such knowledge, the second defenders were entitled to exercise reasonable care in entrusting the delivery of the oil to a competent contractor; and it was not suggested that the third defenders could not be so described.

[25] I consider, accordingly, that the pursuers' case against the second defenders is irrelevant. I shall therefore sustain their first plea-in-law and dismiss the action quoad them.

The pursuers' case against the third defenders

[26] The pursuers' case against the third defenders is pleaded in article 7 in the following terms:

"(Cond 7) The third defenders, et separatim their employee Adam Finnie for whose wrongful acts the defenders are vicariously liable, owed to the pursuers a duty to take reasonable care to avoid causing loss or damage to the property held by the pursuers in trust. In the exercise of reasonable care, it was the duty of the third defenders and their said employee to see to it that the oil was delivered to Brechin High School in a manner which did not result in a material risk that there would be an overflow or escape of the oil. In the exercise of reasonable care, it was the duty of the third defenders and their said employee to minimise the risk of an overflow or escape of the oil. In the exercise of reasonable care, it was the duty of the third defenders to give adequate instructions or directions to their employee Adam Finnie so as to allow oil to be delivered without overflowing or escaping. In the exercise of reasonable care, it was the duty of the third defenders' employee to supervise the delivery of the oil so as to avoid or minimise the risk of oil escaping. In the exercise of reasonable care, it was the duty of the third defenders to instruct Adam Finnie to take steps to have the vent pipes checked to see whether oil was escaping, such as by asking the janitor to check the vent pipes. In the exercise of reasonable care, it was the duty of the third defenders to instruct Adam Finnie to have regard to the gauges on the wall and to check whether any tank was becoming full. Separatim, it was the duty of the said Adam Finnie to have regard to the said gauges for the said purpose. The third defenders, as a company involved in the supply of oil to tanks located in towns in Scotland, including Brechin, knew or ought to have known that oil which was spilled would enter the local drainage system. The said defenders knew or ought to have known that oil entering the drainage system could find its way into local watercourses, whether or not the precise mechanism of such pollution was known to them. The said defenders knew or ought to have known that the local watercourses in Brechin included Skinner's Burn, which flowed into the River South Esk. The said defenders knew or ought to have known that from time to time pipes such as sewage pipes become blocked and to overflow [sic], or otherwise be caused to [sic] overflow. The said defenders knew or ought to have known that oil which entered the drainage system in Brechin would, in the event of overflow from a sewage pipe, be liable to flow into a watercourse and from it into the River South Esk and to cause damage to property, such as fish, in the river. At all material times the third defenders were or ought to have been fully aware of the inherently dangerous nature of oil and of the risks of pollution and damage caused by its spillage or overflow. The third defenders and their said employee failed in each and all of their respective said duties, and by their said failures caused the loss and damage hereinafter condescended upon."

Submissions

[27] Counsel for the third defenders submitted that the averments of duty were in broad terms and the duties averred were underwriting duties dressed in the garb of duties of reasonable care. As to the standard of care, it was not said that any competent oil delivery company would have given the instructions desiderated. Finnie's alleged duty to supervise was not said to be that of an oil delivery driver of ordinary competence. The duty on the third defenders to instruct Finnie about the vent pipes could arise only if the pursuers offered to prove that the third defenders knew the vent pipes were there, that there was a link pipe between the tanks, that oil could "back-up" in the first tank, that the vent pipes could be shut off in the event of overflow, and that the amount of oil discharged would cause loss to third parties. The third defenders' duty to instruct Finnie to have regard to the gauges and Finnie's duty to do so could arise only if the pursuers offered to prove that the third defenders knew or ought to have known that the gauges had to be monitored; that if they were not, the oil might back-up; that the vent pipes could be shut off; and that the oil discharged would cause loss to third parties. In any event the duty to monitor the gauges was inconsistent with the pursuers' averment (sub-paragraph (7), second averment) that they were slow in displaying the levels of oil in the tanks.

[28] Further, the pursuers did not provide a basis upon which it could be said that it was reasonably foreseeable by the third defenders or Finnie that there would be a spillage. It was not said that they knew of the existence of the link pipe, of the differing diameters of the delivery hose and the link pipe, or of the liability of the first tank to overflow. Without such knowledge, the third defenders could not be criticised on the ground of inadequacy of instructions. Reference was made to Holbeck Hall Hotel Ltd v Scarborough Borough Council [2000] QB 836 at page 856, paragraph [39].

[29] Counsel for the third defenders also made submissions about the remoteness of the injury suffered by the pursuers. It was for the pursuers to aver that the result was reasonably foreseeable: Robb v Dundee District Council 1980 SLT (Notes) 91. A remote possibility of injury was not sufficient to impose a legal duty. The averments must detail facts and circumstances from which it could be seen that the pursuers were within the ambit of the duty said to be owed by the third defenders. Harm to the pursuers must be a reasonable, probable and direct consequence of the third defenders' breach of duty. Here, the pursuers' fish farm had not been at reasonably foreseeable risk of injury through the alleged breaches by the third defenders or their employee. It was reasonably foreseeable that if one discharged oil directly into a river there would be damage to property, including fish. But there were here no averments from which it could be inferred that it was reasonably foreseeable by the third defenders that a spillage on delivering the oil would go from the vent pipe into a blocked sewage pipe and from there into Skinner's Burn, then into the river, and then into the pursuers' fish farm. Counsel also presented argument attacking the pursuers' averments of loss and damage, but it will be convenient to deal with these later.

[30] Counsel for the pursuers began by submitting that an action should not be dismissed as irrelevant unless it must necessarily fail even if all the pursuer's averments are proved (Jamieson v Jamieson 1952 SC (HL) 44, Lord Keith of Avonholm at pages 33-34, Lord Denning at page 39; Cosar Ltd v UPS Ltd 1999 SLT 259 at page 264 E-F) and that it was only in rare and exceptional cases that and action of damages for alleged negligence could be disposed of on relevancy (Miller v South of Scotland Electricity Board 1958 SC (HL) 20; Royal Bank of Scotland plc v Bannerman Johnstone Maclay 2005 SC 437, Lord Justice Clerk Gill at paragraphs [40], [44], Lady Cosgrove at paragraph [71]). The present case was not such a rare and exceptional case: if the pursuers proved their averments, they were bound to succeed. The case might involve complex questions of foreseeability and the extent of the danger posed by the oil spillage, and there were many matters that might be elucidated in evidence. The pursuers' averments of duty to instruct or direct Finnie were simple: no instructions had been given. Finnie's duty to supervise the delivery of the oil was an incident of his role as the representative of the third defenders. It did not necessarily follow from the fact that the gauges were slow in displaying the levels of oil in the tanks that there would have been no point in checking them. The essence of the pursuers' case against the third defenders was that they had a duty to take care when delivering oil, which was an inherently dangerous substance. There was no need for proof of knowledge on their part of the problems in the tanks. It was obvious that there was a potential for loss by third parties if a delivery was not supervised.

[31] As to reasonable foreseeability of a spillage, it was not the pursuer's case that some duty arose from knowledge of defects in the tanks. The duty arose from the delivery of an inherently dangerous substance and the need to supervise, instruct and monitor such a delivery. It might be held after proof to be reasonably foreseeable that oil being pumped into a tank might escape. This had been an unsupervised delivery of such a substance to tanks hidden within a building, with overflow vents which were not visible from the hose connection point, gauges on the wall, and no bund or catchpit or chamber to catch spilled oil. The pursuers offered to prove that in these circumstances the duties pled arose. It was unlikely to be the law that a person delivering oil could do so while ignoring gauges and paying no attention to whether or not the oil was escaping; but all that was a matter for proof.

[32] As to the remoteness of the injury suffered by the pursuers, the pursuers offered to prove that they had sustained damage to their property within the type or kind caused by the risk created by the second and third defenders, and separately by the fourth defenders. If the accident had been caused by a known source of danger, it was immaterial that it had been caused in a way which could not have been foreseen: it was not necessary to postulate the foreseeability of a precise chain of circumstances (Hughes v Lord Advocate 1963 SC (HL) 31). The fact that a risk was small did not justify no steps being taken to eliminate it; and here no extra precautions were needed to avoid it (Overseas Tankship (UK) Ltd v The Miller Steamship Co Pty (The Wagon Mound (No 2)) [1967] AC 617 at 643-644; Jolley v Sutton London Borough Council [2000] 1 WLR 1082 at 1089-1092).

Discussion

[33] In my opinion the duties said to be incumbent on the third defenders and Finnie are misconceived. The third defenders' duties are said to be "to see to it" that the oil was delivered in a particular manner, "to minimise the risk" of an overflow or escape, "to give adequate instructions or directions" to Finnie, and "to instruct" him in relation to the vent pipes and the gauges. Finnie's duties are said to be "to see to it" that the oil was delivered in a particular manner, "to minimise the risk" of an overflow or escape, "to supervise the delivery of the oil so as to avoid or minimise the risk of oil escaping" and "to have regard to the gauges on the wall." Each of these duties is not stated to be a duty to take reasonable care, but is expressed in unqualified terms. It is nothing to the purpose that the first averment in article 7 refers to a general duty to take reasonable care, or that all but the last of the specific averments referred to above are preceded by the words "in the exercise of reasonable care". The specific averments clearly mean that "reasonable care" requires the third defenders and Finnie to ensure the performance of the acts referred to. If they are proved to have failed to "see to it" that the oil was so delivered, or to achieve any of the other results referred to, they are to be found to be in breach of duty, no matter how much care they might have taken to fulfil the duty concerned. In my opinion the third defenders' criticism that these are underwriting duties dressed in the garb of duties of reasonable care is well founded.

[34] I shall assume, however, that what is intended is that the third defenders and Finnie had a duty to take reasonable care to minimise the risk of an overflow or escape of oil and to take the other measures referred to. According to the pursuers, the third defenders' obligations were to be discharged by the giving of adequate instructions or directions to Finnie. It is not clear whether these instructions or directions should have been limited to the vent pipes and the gauges, or whether the pleader has sought to leave a loophole for the leading of evidence as to instructions or directions on other matters. In any event, if instructions or directions should have been given about having the vent pipes checked or "having regard to the gauges on the wall" and "checking whether any tank was becoming full", such instructions or directions could have been given only if the third defenders had known of the existence of the vent pipes and the gauges. It is not averred that they possessed or should have possessed any such knowledge. Nor is it said that they knew or ought to have known about the layout of the tanks, the diameter of the link pipe, the absence of a bund or catchpit or chamber and any risk of overflow, and that such knowledge made the need for such instruction or direction apparent. Whether a competent oil delivery company would have acquainted itself with the relevant features of the various premises at which oil was to be delivered by their employees in order to give them detailed instructions as to how to deliver the oil at each place is a matter on which the pursuers' pleadings are silent.

[35] It is not a sufficient answer, in my opinion, for the pursuers to say that the essence of their case against the third defenders is that they had a duty to take care (not reasonable care) when delivering oil, that there was a need to supervise, instruct and monitor the delivery of an inherently dangerous substance and that no instructions had been given. Apart from the consideration that the operation was not, in my view, inherently dangerous, the third defenders are entitled to notice of the standard of conduct and the basis of knowledge required of them upon which it is said that they had an unqualified obligation to give the instructions and directions desiderated on record.

[36] The case pleaded against Finnie is also, in my view, irrelevant. The duties said to be incumbent upon him are also pleaded in absolute terms. It is not clear whether his duty to supervise the delivery of the oil was to be discharged only by having regard to the gauges on the wall and checking whether any tank was becoming full, or whether he was to discharge it by other undisclosed means. In view of the inaccuracy of the gauges, about which the pursuers themselves make averments, it is not obvious that checking them would have led to the prevention of the overflow. It is not said that he had an independent duty, in the absence of instruction, to have the vent pipes checked. Nor is it said that he had any knowledge of the layout of the tanks, the diameters of the link pipe and the delivery hose, or the existence of the vent pipes which "were not visible to a person standing at the hose connection point" (sub-paragraph (3)).

[37] I have accordingly concluded that the pursuers' case against the third defenders, as pled, is irrelevant. I shall therefore dismiss the action so far as directed against them.

[38] I would not have sustained at this stage the third defenders' argument that the harm to the pursuers had not been reasonably foreseeable. Whether in any given case the harm sustained by the pursuer was a reasonably foreseeable result of the defender's fault is a matter on which judicial opinions may sometimes differ, and in my view it would be imprudent in this case to discuss the issue in detail. I have particularly in mind the words of Lord Steyn in Jolley at page 1090C-E where, commenting on the speech of Viscount Simonds in The Wagon Mound No 1 [1961] AC 388, he said:

"Viscount Simonds was in no way suggesting that the precise manner in which the injury occurred nor its extent had to be foreseeable. And Lord Reid was saying no more. The speech of Lord Reid in Hughes v Lord Advocate [1963] AC 837 is in harmony with the other judgments. It is not in conflict with The Wagon Mound No 1. The scope of the two modifiers - the precise manner in which the injury came about and its extent - is not definitively answered by either The Wagon Mound No 1 or Hughes v Lord Advocate. It requires determination in the context of an intense focus on the circumstances of each case: see Fleming, Law of Torts 9^th ed (1998), pp.240-243."

In my opinion, in this case such an intense focus would have been applied to the best advantage after inquiry into the circumstances by way of proof before answer.

[39] If I had allowed proof before answer quoad the third defenders, I would have excluded from probation the pursuers' averment in article 2 (sub-paragraph (7)), "The first defenders' head janitor, David Candy, understands there to have been two previous oil spillages from the tanks." The third defenders criticised this averment as lacking in specification. There is clearly no notice of the dates when or the circumstances in which the alleged spillages occurred. The pursuers' counsel disclaimed any intention of making a case against the third defenders based on this averment. He said that the averment was based on Mr Candy's precognition and was included as part of the general background. It seems clear that the averment is otiose.

The pursuers' case against the fourth defenders

Averments

[40] In article 8 the pursuers' case against the fourth defender is pleaded as follows:

"(Cond 8) North of Scotland Water, as the water authority responsible for waste water in Brechin at the material time, owed to the pursuers a duty to take reasonable care to avoid causing loss or damage to the property held by the pursuers in trust and in particular the fish in the fish farm. In the exercise of reasonable care, it was the duty of North of Scotland Water to see to it that pieces of equipment installed by them were installed securely so as not to become dislodged and to cause blockage in a sewer. In the exercise of reasonable care, it was the duty of North of Scotland Water, when it knew that a piece of equipment which was liable to block a sewer had become dislodged from its position, to inspect as soon as reasonably possible on becoming aware of the dislodgment the sewage pipes, by using rodding equipment, underwater video cameras or other suitable devices, in order to ascertain the position of the dislodged equipment and to have it removed. North of Scotland Water, as the water authority responsible for waste water in Brechin at the material time, knew or ought to have known that oil which was spilled would enter the local drainage system. North of Scotland Water knew or ought to have known that the drainage system in towns in Scotland, including Brechin, had as a design feature a means by which the contents of sewage pipes overflowed into local watercourses. North of Scotland Water knew or ought to have known that the local watercourses in Brechin included Skinner's Burn, which flowed into the River South Esk. North of Scotland Water knew or ought to have known that any deleterious matter which found its way into the sewage pipes would, in the event of overflow, be liable to flow into local watercourses, including Skinner's Burn, and thereby into the River South Esk. North of Scotland Water knew or ought to have known that in the event of the level of sewage or drainage water or fluids within a pipe reaching a level at which an overflow mechanism is positioned, the contents of the pipe would overflow. North of Scotland water knew or ought to have known that the said level could be reached as a result of volume or sewage or drainage water or fluid in the pipe or as a result of a blockage or partial blockage of the pipe. North of Scotland water knew or ought to have known that from time to time pipes such as sewage pipes become blocked. North of Scotland water knew or ought to have known that oil which entered the drainage system in Brechin would, in the event of overflow, be liable to flow from a watercourse into the River South Esk and to cause damage to property, such as fish, in the river. In each and all of these duties North of Scotland Water failed and by their failures caused the loss and damage hereinafter condescended upon. With reference to the fourth defenders' averments in answer, it is admitted that NOSWA was not involved in the actual spillage of the oil. Admitted that they had no knowledge of the spillage until after it had occurred."

Submissions

[41] Counsel for the fourth defenders supported her motion for dismissal of the action so far as directed against them with a general attack on the basis of the case against them and particular submissions on matters of specification. Her general attack was founded on the proposition that to found a case in delict it was necessary for the pursuers to aver an act or omission on the part of the fourth defenders which could foreseeably cause damage to the pursuers or their property. It was also necessary to aver a relationship of sufficient proximity to impose on the fourth defenders a relevant duty of care towards the pursuers. Such a duty must be owed to those to whom injury might be anticipated if the duty was not observed. Further, the situation should be one in which the court considered it fair, just and reasonable that the law should impose the duty on the fourth defenders for the benefit of the pursuers. Counsel founded on the speech of Lord Bridge of Harwich in Caparo Industries plc v Dickman [1990] 2 AC 605 at pages 617G-618B which, she said, had been approved in numerous cases on different facts (X (Minors) v Bedfordshire County Council [1995] 2 AC 633). In the present case the pursuers did not suggest that the CSO system, which they described in article 3 (sub-paragraphs (8) and (9)), was inherently flawed. As to the pursuers' averments of fact, there was no basis for the two averments beginning "Accordingly it is believed and averred" and "It is believed and averred" at the end of sub-paragraph (12). The preceding averments narrated the contents of an item in a newspaper, without any indication of the identity of the author or the authority with which it was written. There was also a clear conflict between the pursuers' averment in sub-paragraph (10) that the North of Scotland Water Authority (NOSWA) knew that the piece of flow logging equipment had become dislodged, and their averment in sub-paragraph (13) that they believed it had been stolen.

[42] As to the duties averred by the pursuers in article 8, if there was insufficient foreseeability and proximity in relation to the second and third defenders, there could be no question of reasonable foreseeability or proximity on the part of the fourth defenders, who had had nothing to do with the events complained of. There was no foundation for the first averment in article 8, which was that NOSWA owed to the pursuers a duty to take reasonable care to avoid causing loss or damage to the property held by the pursuers in trust: on no reasonable assessment of any duty of care that might be owed by the fourth defenders to third parties could any such duty extend to all and any property held by third parties in trust. That averment was irrelevant.

[43] The next averment was, "In the exercise of reasonable care, it was the duty of [NOSWA] to see to it that pieces of equipment installed by them were installed securely so as not to become dislodged and to cause blockage in a sewer." That was an averment of an absolute duty: it sought to impose on NOSWA a duty of perpetual inspection of all the sewers within their area of responsibility. The next averment laid on NOSWA a duty to inspect as soon as reasonably possible on becoming aware of the dislodgement of a piece of equipment which was liable to block a sewer. The averments of fact, however, gave two inconsistent versions of NOSWA's state of knowledge: that they knew the equipment had become dislodged, and that they believed it to have been stolen. The next averment was that NOSWA knew or ought to have known "that oil which was spilled would enter the local drainage system." But there was no indication of why they should have known that any oil spilt anywhere in their area would necessarily enter the drainage system. The chain of events referred to in the following averments went beyond what was foreseeable. The admissions at the end of article 8 that NOSWA had not been involved in the spillage and had had no knowledge of it until after it had occurred were fatal to the pursuers' case: without such knowledge, the pursuers could not get their case against the fourth defenders off the ground. In view of these admissions it could never be said that there was sufficient proximity between NOSWA and the pursuers.

[44] In any event, even if there was such proximity, the averments of fact that could set up a relevant duty of care did not exist. The bare averment that NOSWA "knew" that the equipment had become dislodged was not sufficient: the fourth defenders were entitled to know on what basis the pursuers said this (Robb, supra). Even if the pursuers were able to aver some relevant knowledge on the part of NOSWA, the case would fail on the application of the tests of foreseeability and proximity. There were no facts on which it could be said to be reasonably foreseeable that the parties at the school would seek to fill oil tanks which had inherent defects that in combination would cause the oil to overflow and that the overflow would find its way into the sewers. Even if the first two stages of the three-stage test in Caparo were to be satisfied, the third stage could not: it would not be fair, just and reasonable for the law to impose the duties averred on the fourth defenders for the benefit of the pursuers. There would be imposed on water authorities an absolute duty to ensure that at all times and in all sewers there was nothing present in them that might cause a blockage, and a duty to foresee circumstances so far beyond their control that fulfilment of that duty would be impossible. The action so far as laid against the fourth defenders should accordingly be dismissed. I shall refer later to counsel's further arguments relative to the pursuers' averments of loss and damage.

[45] In reply to these submissions by the fourth defenders, counsel for the pursuers relied on his earlier general submissions on the dismissal of actions as irrelevant, and on reasonable foreseeability. Counsel went on to submit that if the tripartite test in Caparo was to be applied, it should be applied to the whole facts and circumstances as elucidated in the evidence (Royal Bank of Scotland plc v Bannerman Johnston Maclay 2005 SC 437). It was not the pursuers' case that the CSO system was flawed. The plain inference from the averment about the story in the Brechin Advertiser was that there were problems with the CSO which continued for some months after the incident and there had been a report by an official body, SEPA, which had given information to NOSWA. The pursuers could not say that the incident was all caused by the blockage: there might be a deeper problem. The duties averred were not absolute, but were to take reasonable care. They merely involved properly securing items of equipment and, when it was known to them that an item which could cause blockage was no longer in position, checking to see if it was still in the sewer. NOSWA knew that the equipment was not where it should be. The belief that it was stolen could be examined at proof. It was not possible to rule out success for the pursuers on case they averred against the fourth defenders.

[46] In response to these submissions for the pursuers, counsel for the fourth defenders argued that the common theme in all the cases relied on by the pursuers was that the alleged wrongdoer possessed knowledge of the act or omission or was in some way in control of it. Counsel referred to The Wagon Mound (No 2) and to Royal Bank of Scotland plc at paragraph [30]. Here, the pursuers admitted that NOSWA had had no part to play in the circumstances giving rise to the harm. They did not know anything about the spillage, and the matter ended there. NOSWA had not been proximate to the events in question. It was incorrect to say that such issues as foreseeability and proximity would come out in the wash at proof before answer. Al-Saudi Banque v Clarke Pixley [1990] Ch 313 was an example of dismissal after trial of a preliminary issue of law in the absence of knowledge, relationship, foreseeability and proximity. The present case was one of the rare and exceptional cases in which an action of damages for alleged negligence could be disposed of on relevancy (Miller). Counsel also drew attention to the observation by counsel for the pursuers that there might be a deeper problem with the CSO system. He could not make such a case on the basis of his averments as to the matters believed and averred, and at the same time say that the pursuers were not making a case that the CSO system was flawed.

Discussion

[47] In my opinion the pursuers have not averred a relevant case against the fourth defenders. Article 8 begins by asserting that NOSWA owed the pursuers a duty take reasonable care to avoid causing loss and damage to the property held by the pursuers in trust. It is obviously wrong to say that NOSWA owed such a duty in relation to all the property the pursuers held in trust. I shall assume that what is intended is to say that they owed such a duty in relation to the fish in the fish farm. Two particular duties are averred. First: "In the exercise of reasonable care, it was the duty of [NOSWA] to see to it that pieces of equipment installed by them were installed securely so as not to become dislodged and to cause blockage in a sewer." Here the pleader has again employed the formula, "In the exercise of reasonable care, it was the duty of [the defenders] to see to it that . . ." It is incorrect, in my view, for the pursuers' counsel to assert that that is an averment of a duty to take reasonable care. It pays lip service to the concept of reasonable care, but seeks to impose a duty "to see to it" that a result is achieved. Such a duty is not a duty to take reasonable care, but a duty of insurance. On the pursuers' view, NOSWA would be liable the moment a piece of equipment installed by them became dislodged and blocked a sewer. To avoid liability, they would have to have a system of permanent vigilance over all their sewers. Nothing in the arguments submitted suggests that it would be fair, just and reasonable to impose such a duty on a water authority such as NOSWA.

[48] The second averment of duty is in these terms: "In the exercise of reasonable care, it was the duty of [NOSWA], when it knew that a piece of equipment which was liable to block a sewer had become dislodged from its position, to inspect as soon as reasonably possible on becoming aware of the dislodgement the sewage pipes . . ." It is therefore necessary to see what is said about NOSWA's state of knowledge. In article 3, sub-paragraph (10), there is the bald averment, "[NOSWA] knew that [the piece of flow logging equipment had become dislodged." There is no averment of the date, or any approximate date, when that came to the knowledge of NOSWA. It is not therefore possible to infer that they failed to inspect the pipes "as soon as reasonably possible" thereafter. Nor are the fourth defenders given any notice of how the dislodgement had come to the attention of NOSWA. Further, the bald averment of knowledge is inconsistent with the averment at the end of sub-paragraph (13) which attributes to an employee of NOSWA the statement that at some unspecified time (whether before or after the spillage is not clear) NOSWA believed that the equipment had been stolen. The fourth defenders accordingly are not afforded adequate specification of when and in what circumstances NOSWA acquired the knowledge that the equipment had become dislodged.

[49] It is also unsatisfactory, in my opinion, that the pursuers hint at a case against the fourth defenders which is not made explicit. In sub-paragraph (12) they believe and aver "that after the blockage had been removed in June 1999 the CSO at Skinner's Burn continued to operate in an unsatisfactory manner and to discharge effluent prematurely." They also believe and aver "that even without such blockage discharge from the CSO into Skinner's Burn and into the river had occurred in the past and continued to occur." I have already narrated that in the course of the debate the pursuers' counsel observed that the pursuers could not say that the incident was all caused by the blockage: there might be a deeper problem. That, it seems to me, will not do. If there is a deeper problem on account of which it is to be asserted, if necessary, that liability to the pursuers attaches to the fourth defenders, the nature of the problem and the ground of liability must be expressly stated. In the absence of such averments the whole of the passage in sub-paragraph (12) from "With reference to whether the entry of the oil into the river was caused solely by the presence of the blockage" to the end of the sub-paragraph is in my opinion irrelevant. If I had allowed inquiry, I would have excluded this passage from probation. The fact that the averred beliefs are based on a report in a newspaper is not, in my view, significant. It suggests that the pursuers' advisers have not made their own inquiries into the matters reported, but it is sufficiently clear that the source of the information that is the foundation of the beliefs is a report and a statement by SEPA. The objection to the passage is that it adumbrates a case against the fourth defenders which is not explicitly stated.

[50] The pursuers' averments against the fourth defenders inferring reasonable foreseeability and proximity seem to me to cause difficulty. The primary averment is that NOSWA "as the water authority responsible for waste water in Brechin at the material time, knew or ought to have known that oil which was spilled would enter the local drainage system." That must mean that they knew or ought to have known that any oil that was spilled anywhere in Brechin would (not "might") enter the local drainage system. That does not appear to be self-evident, and no facts are averred from which NOSWA should have acquired such knowledge. If it had been possible to overcome that difficulty, I would not at this stage have considered it appropriate to uphold the fourth defenders' arguments as to foreseeability and proximity. Proximity, like foreseeability, appears to be a matter on which differing opinions might reasonably be maintained, and it would have been preferable to examine these issues after inquiry. It may be arguable that the fact that NOSWA was unaware of the spillage until after it occurred would not necessarily be fatal to a case against them which was otherwise relevantly pleaded. However that may be, I consider that it may be said at this stage that the pursuers have not satisfied the third criterion in Caparo. On the assumption that that is a discrete criterion, it does not appear to be fair, just and reasonable that the law should, for the benefit of the pursuers, impose on the fourth defenders' predecessors any duty to ensure that all the pieces of equipment installed by them were so securely installed that they never became dislodged and blocked a sewer.

[51] For all these reasons I have concluded that the pursuers' case against the fourth defenders is irrelevant and lacking in specification, and accordingly falls to be dismissed.

Averments of loss and damage

[52] Counsel for the third and fourth defenders presented submissions critical of the pursuers' averments of loss and damage in article 9. Counsel for the third defenders took various points relative to lack of specification. He pointed out that while it was said in article 9 that some 75,015 fish were "killed" by the oil pollution, it was said in article 2 (sub-paragraph (6)) that "a substantial number of fish in the fish farm became contaminated by the oil and required to be destroyed." Counsel also criticised the averment in article 9 that the fish farm "suffered a loss of profit reasonably estimated at some £11,220 as a result of losing sales to customers which it would otherwise have been able to fulfil." It was said that there was no breakdown of that figure and no indication of what it represented or who the customers were. There are the further averments, "Scot Trout, the leading customer of the fish farm, required to buy replacement fish for those which the fish farm could not supply, at a cost of £8,500. The pursuers require to meet the claim for payment of the said sum." Counsel said that there was no specification of how the figure of £8,500 was arrived at, or of why the pursuers were under an obligation to Scot Trout to pay them the cost of the replacement fish. The next averment is, "A number of fish also became too big to sell. The loss caused by not being able to sell these fish is £8,755." Counsel asked why the fish were "too big" to sell, and said there was no specification of how the loss was incurred or what the figure of £8,755 consisted of. Counsel also submitted that even if there was a sufficient connection between the third defenders' breach of duty and harm which occurred, these defenders were not necessarily liable for all the harm which occurred, but only for the natural and direct consequences of their wrongful conduct. Here, the loss averred extended far beyond the loss of fish, to the loss of sales and the reimbursement of a customer for being unable to supply him with fish, perhaps because of a contractual obligation. Such losses were not the natural and direct consequences of allowing the oil tank to overflow.

[53] Counsel for the fourth defenders adopted these submissions. She also pointed out that there was a difference between an averment that a specified number of fish were "killed" and an averment that a substantial number "required to be destroyed". If the pursuers had elected to destroy some and not others, that might affect issues of quantification and mitigation of loss. She also questioned the following averment: "In view of the fact that the fish in the overcrowded ponds could not be injection vaccinated because this would have resulted in deaths of fish through stress, the said fish required to be given extra oral vaccine at a cost of £975." Counsel also said that the losses averred could be almost entirely pure economic loss, and pure economic losses were irrelevant.

[54] In reply to these submissions counsel for the pursuers argued that none of the loss averred was pure economic loss: the losses were either damage to property or losses which were consequential upon property damage. On a fair reading of the pleadings, some of the fish were killed and others had to be destroyed because they were unsaleable. The fish that "became too big to sell" were larger than the domestic customer would want.

[55] It appears to me to be arguable that some of the losses claimed by the pursuers are pure economic losses. There may well be an important distinction to be drawn between damage to property (the fish destroyed or killed) on the one hand and, on the other, the profits foregone because of the inability to sell further fish and the insufficiently explained payment by the pursuers to Scot Trout. This matter was not, however, explored in detail, and I would have been prepared to allow inquiry into these averments by way of proof before answer. I would also have held that it was unnecessary to specify on averment how the figures referred to were arrived at.

Result

[56] In the result, however, I shall sustain the preliminary pleas for the second, third and fourth defenders and dismiss the action in so far as it is directed against each of them. I shall repel, of consent, the first, second and third pleas-in-law for the pursuers, and allow a proof before answer quoad the pursuers and the first defenders.

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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Southesk Trust Company Ltd & Anor v. Angus Council & Ors [2006] ScotCS CSOH_6 (20 January 2006) URL: http://www.bailii.org/scot/cases/ScotCS/2006/CSOH_6.html Cite as: [2006] CSOH 6, [2006] ScotCS CSOH_6

Scottish Court of Session Decisions