MS Amlin Corporate Member Ltd v Buckeye Bahamas Hub Ltd
| Jurisdiction | Bahamas |
| Judge | Madam Senior Justice Deborah Fraser |
| Judgment Date | 04 December 2023 |
| Court | Supreme Court (Bahamas) |
| Year | 2023 |
| Docket Number | 2020/COM/adm/00016 |
(suing on behalf of itself and all other underwriters subscribing to policy of insurance No. B0621MMILYFY16CVA, including underwriters at Lloyds of London)
Her Ladyship The Honourable Madam Senior Justice Deborah Fraser
2020/COM/adm/00016
IN THE SUPREME COURT
COMMERCIAL DIVISION
Application to Amend Statement of Case — Part 20 of the Supreme Court Civil Procedure Rules, 2022 — Promptness of Application — Prejudice to the Claimant — Prejudice to the Defendant — Limitation Period — Compensation through Costs — Administration of Justice
Mr. Terry North and Mr. Richard Horton for the Claimant
Mr. Oscar Johnson Jr. K.C. and Mr. Keith Major Jr. for the Defendant
This is an application brought by the Claimant, MS Amlin Corporate Member Limited (“ Claimant”), requesting leave to amend its Statement of Case.
The Claimant is an insurance underwriter transacting business in the Lloyds of London Insurance Market with their principal place of business in London, England.
Buckeye Bahamas Hub Limited (“ Defendant”) is a company organized and existing under the laws of the Commonwealth of The Bahamas, owning and operating an oil storage terminal located in Freeport, in the said Commonwealth.
The action arises from substantial damage to the M/Y “Dream”, a 2001 1987 Abeking and Rasmussen Motor Yacht (“ Dream”) which, at all material times, was moored at Bradford Marine's facility in Freeport, The Bahamas across a channel from the Defendant.
The damage claim was resolved by the Claimant with the owner of the Dream and the Claimant acquired all rights of subrogation resulting from the payment of the aforementioned claim/action.
The Dream is and was at all material times alleged to be insured by its owners with the Claimants for the sum of US$46,225,400.00.
The substantial damage occurred during Hurricane Matthew in October 2016. On 03 October 2016, while securing alongside Dock 3 (Green Dock) at Bradford Marine, the fourteen member crew aboard the Dream began preparing the vessel for the possible impact of Hurricane Matthew.
The Dream was securely moored in accordance with its hurricane plan. Dream was moored directly across from the Defendant pending landfall of Hurricane Matthew.
The Dream's crew noticed and determined that the vessel was covered in some kind of oil as the hurricane passed overhead.
The Claimant alleges that the pattern of the oil residue covering the majority of the exterior surfaces of the Dream indicated that it emanated from the crude oil storage facility (approximately 1/2 mile south of the vessel's mooring position) at the Defendant.
The Claimant further alleges that several other vessels moored adjacent to the Dream were also covered in the same type of oil residue.
The Claimant also claims that the oil migrated onto the Dream as a direct and proximate result of the failure of a fuel tank dome at the Defendant.
The claim was reported to Ms. Karen Weiss (“ Ms. Weiss”), the Manager for Insurance and Risk for the Defendant, who in turn allegedly admitted liability. Through correspondence sent by Ms. Weiss on 25 October 2016 to Mr. Stewart Hutcheson (the Claimant's Surveyor) and Captain Gurmeet Ahluwalia (the Dream's Manager) she stated:
“As you are aware, Buckeye Bahamas Hub (“BBH”) has offered at its expense to clean the oily substance from the hull of the M/V Dream. Additionally, we continue to offer to perform a detail of the hull only with the approved products, while the vessel is in The Bahamas located at Bradford Marine. This can be done quickly and cost efficiently by the contractors we have engaged to perform such cleaning services…BBH remains willing to pay the costs of cleaning the hull of the M/V Dream in The Bahamas. However, BBH will not pay any additional amounts attributable to having that work performed in the United States and it will not be responsible for any delays or other consequences to the vessel resulting from your decision to proceed to the United States rather than have the cleaning performed in The Bahamas at the Bradford Marine facility.”
Despite the Defendant's offer, the Dream's crew attempted, at the paint manufacturer's recommendation, to clean the vessel using Joy and other mild cleaning agents but, were unsuccessful in removing the oil stains created by the alleged failure of the Defendant's fuel tank dome.
The Defendant was advised that the Dream would likely need to be repainted and that its teak deck surfaces would need to be replaced. Thereafter, multiple demands were made for disclosure of liability insurance information at which point the Defendant and/or its parent, Buckeye Partners, L.P. and/or its insurers purportedly refused to respond to demands for assistance and restoration of the Dream.
It was subsequently determined by the Claimant's surveyor, in conjunction with a joint survey which took place at the Defendant, that the dome in issue failed during Hurricane Matthew, that the dome had not been properly maintained and was not fit for its intended purpose, specifically to prevent fuel oil stored therein during a storm.
It was also determined in the joint inspection between the Defendant's foreman and Neil Maclaren, another surveyor retained by the Claimant, that the cause of the leakage of tank #0815 was two-fold: (a) a skylight/geodesic dome over the tank failed during Hurricane Matthew; and (b) the flashing between the tank walls and the geodesic dome peeled off.
The Claimant alleges that the Defendant had a non-delegable duty of care to ensure that its fuel tanks were fit for their intended purpose and properly maintained.
The Claimant further alleges that the Defendant breached its duty of care by failing to properly maintain the dome on tank #0815 in good order and condition or in compliance with all local building codes then in place, thus rendering tank #0815 unfit for its intended purpose. The Claimant also alleges negligence and claims that it has suffered loss and damage.
On 06 March 2020, the Claimant filed a Writ of Summons and a Statement of Claim on 21 September 2020 against the Defendant alleging negligence based on the above. They claim reliefs in the form of damages, interest and costs.
On 19 October 2020, the Defendant filed its Defence denying the allegations made in the Statement of Claim and putting the Claimant to strict proof thereof. It avers that the Claimants' failure to accept the Defendant's reasonable non-admission of liability offer, was a failure on the Claimant's part to observe its own duty to mitigate.
The Defendant further avers that it placed the Claimant on notice that the Defendant would not be responsible for any delays or other consequences to the vessel resulting from the Claimant's insured choosing not to accept the Defendant's early and reasonable offer of assistance.
It also avers that its tanks were fit for their intended purpose and properly and adequately maintained at all material times; additionally the extent and type of damage sustained to such tanks by the natural causes during the passing of Hurricane Matthew were not reasonably foreseeable.
After discovery, on 17 July 2023, the Claimant brought an application for leave to amend its Statement of Case (as the action and this application are now governed by the Supreme Court Civil Procedure Rules, 2022 – “ CPR”) based on certain information disclosed by the Defendant during discovery. It attached a draft Statement of Case to the application outlining the amendments it wishes to make.
The Defendant objects to such amendments on the basis that the relevant limitation period (in relation to the purported changes) has expired and that the suggested amendments are not in compliance with part 20.1 of the CPR.
The issue that this Court must decide is whether the Court ought to grant leave to the Claimant to amend its Statement of Case in the manner set out in the draft Statement of Case?
On 17 July 2023, the Claimant filed the First Affidavit of Shenique R. Hanna (“ SH Affidavit”). It provides that: (i) the initial pleadings focused on the escape of fuel oil from fuel tank #8015, with the cause being a result of insufficient maintenance; (ii) as part of the discovery process the Defendant voluntarily disclosed documents to the Claimant on or about 22 October 2021 concerning fuel tanks #8013 and #8014 in addition to fuel tank #8015 (“ Discovery”); and (iii) both parties engaged in an extended process of obtaining further and better particulars from each other which process was to conclude by virtue of this Honourable Court's Further Case Management Order made 20 March 2023, on 14 April 2023 with the exchange of further Supplemental Lists.
The SH Affidavit further states that: (i) After Discovery and upon the Claimant instructing its fuel tank expert, the Claimant has been advised that it is necessary to widen the scope of its pleadings based on the documents available and their contents so that the claim is not confined only to tank #8015, and so that other possible causes of the fuel oil leak are encompassed; (ii) the application for leave to amend was made promptly upon receiving the expert's advice; (iii) it is unlikely that the Defendant would suffer any prejudice that could not be remedied by costs. The amendments only concerns documentary evidence that has already been produced by the Defendant, and the Defendant has ample opportunity to amend and take further instructions if required; and (iv) on the other hand, if the Claimant was denied the opportunity to amend then it may be argued that its pleadings are insufficient to support the evidence, and its claim may fail.
On 24 August 2023, the...
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