Colour Quest Ltd v Total Downstream UK Plc
Total UK Ltd v Chevron Ltd
Citations:  EWHC 540 (Comm);  2 Lloyd’s Rep 1;  1 CLC 186; (2009) 153(12) SJLB 29;  CLY 2734.
The first and second defendant were joint venture companies who delegated control over an oil storage depot to the third defendant. The first defendant’s employees negligently overfilled a fuel storage tank, leading to a vapour cloud which ignited and exploded. This damaged or destroyed everything in the vicinity, including pipelines and other equipment owned by other companies as well as several nearby residential houses.
The first defendant argued that they were not vicariously liable for the acts of their employees because the third defendant was the one who had control over those employees. The second and third defendants argued that the first defendant had practical control over the tank-filling aspect of the business.
The claimants were a variety of people whose property was damaged or who were otherwise affected by the explosion. They sued the defendants in negligence, nuisance, and the rule in Rylands v Fletcher.
- Who was vicariously liable for the negligence of the first defendant’s employees?
- Could the first defendant rely on an indemnity clause in their agreement with the second and third defendants?
- Are the actions of public or private nuisance inconsistent with each other or with liability under the rule in Rylands v Fletcher?
- With respect to the corporate claimants who had consented to the oil being brought onto the land, was there a defence of consent to the rule in Rylands v Fletcher?
The High Court held for the claimants. The first defendant was vicariously liable for the torts of the employee, as they were in actual control of the relevant area. The first defendant was not entitled to rely on the indemnity clause. Properly construed, this clause did not cover liability for negligence.
Both actions for public and private nuisance and under the rule in Rylands v Fletcher arose on these facts. Consent was not a defence to the Rylands v Fletcher actions because the escape was negligent.
This Case is Authority For…
This case was overruled by the Court of Appeal on a specific point. The point related to a beneficial owner’s ability to claim in private nuisance for damage to property which they do not have physical possession of. This was an issue for one of the claimants, who’s property was held on trust. The case remains good law in relation to the following:
Factors relevant to whether control has been transferred away from one employer to another include:
- Who engaged and paid for the employee?
- How long had they worked for each employer?
- Who provided the employee’s equipment?
- What role did the transferring employer have in regard to instructing the work?
Claims in public nuisance, private nuisance and under the rule of Rylands v Fletcher are not mutually exclusive with each other.
A private nuisance claim can arise from a one-off escape. The isolated nature of the activity is merely a factor to be taken into account when determining if the activity is reasonable use of the land.
A claimant alleging public nuisance does not need to show that they had a property interest in land affected. They do need to show that they suffered a loss which is ‘particular, substantial and direct, over and above that suffered by the public at large’.
Rylands v Fletcher
Consent is a defence to an ordinary claim for breach of the rule in Rylands v Fletcher. However, it is not available where the cause of the escape is negligence.