Rav Bahamas Ltd v Great Lakes Reinsurance (UK) Plc
| Jurisdiction | Bahamas |
| Judge | Mr. Justice Isaacs, JA,Sir Michael Barnett, P |
| Judgment Date | 08 September 2022 |
| Neutral Citation | BS 2022 CA 120 |
| Docket Number | SCCivApp. No. 26 of 2022 |
| Court | Court of Appeal (Bahamas) |
| Year | 2022 |
(as Subrogee of Modrono's Bimini Place Limited)
The Honourable Sir Michael Barnett, P
The Honourable Mr. Justice Isaacs, JA
The Honourable Mr. Justice Evans, JA
SCCivApp. No. 26 of 2022
IN THE COURT OF APPEAL
Civil appeal — Contract — Contractual relationship — Breach of contract — Negligence — Exclusion clause — Implied term — Subrogation — Judicial deference — Sections 40 & 41 of the Consumer Protection Act
The appellant is the owner/operator of the Bimini Bay Marina. The respondent, Great Lakes, is the insurer of a 41-foot vessel known as the Rum N' Coke. The vessel was beneficially owned by Modrono's Bimini Place (MBP). Manuel Modrono, Jr. (Modrono) is an owner and officer of MBP. Modrono and his father (Modrono, Sr.) purchased the vessel but its monthly expenses at various marinas were split among Modrono, Modrono, Sr., Anthony Modrono and James Begera. The relationship between the owner(s) of the vessel and the appellant was governed by a Boat Slip Lease agreement (BSL).
In July 2009 both Modrono and Tony left Bimini to return to Florida; Modrono left that morning and Tony later that afternoon. Tony's evidence is that he secured and locked the vessel prior to his departure.
Sometime around July 2009, while the vessel was docked at the appellant's marina, an employee of the marina received a call from an unknown individual claiming to be one of the owners of the vessel. The unknown individual instructed the employee to ready the vessel for sailing; he gave the employee specific instructions. The employee, having met the vessel unlocked, did as he was instructed and readied the vessel. Two days later the employee met two men, one of whom he assumed was the captain of the vessel; he paid the employee for his services. The vessel has not been found.
The respondent conducted an investigation which concluded that the owners of the vessel were not involved in the theft of the vessel and, therefore, the respondent paid out the insurance claim. The respondent sued the appellant on the basis of subrogation. The respondent claimed damages, interest and costs. The respondent's cause of action was based upon breach of contract and negligence by the appellant. The court below found that the appellant breached its duty of care and therefore the respondent was entitled to the damages claimed. The appellant now appeals that decision to this Court.
Held (Barnett, P. concurring): appeal allowed. Judge's decision that the respondent was entitled to damages is quashed. Costs, here and below, to the appellant, to be taxed if not agreed.
per Isaacs, JA: Paragraph 17 of the BSL provides that “the tenant is responsible for … taking all necessary precautions to ensure that the boat is secure from damage from any all causes including without limitation theft…”.
There is no duty on the appellant to prevent the theft of the vessel. Having regard to the boating traffic at the marina and the level of security implemented by the marina it would not be reasonable to place the onus of securing the vessel from theft on the appellant. The Judge's finding of systemic failures to provide adequate security cannot be supported by the evidence.
The judge's finding that the appellant breached its duty of care cannot be sustained in the face of paragraph 17 of the BSL as this paragraph places the responsibility to prevent theft of the vessel on the respondent.
Further, the judge's finding that a reasonable investigation was conducted appears flawed. The investigation did not condescend to inquire of all of the owners / operators of the vessel whether they had removed the vessel or authorized anyone else to do so.
Ashby v. Tolhurst [1937] 2 K.B. 242. considered
Bahamasair Holdings Ltd v Messier Dowty [2018] UKPC 25 applied
Caparo Industries plc v Dickman [1990] 1 All ER 568 considered
Halbauer v Brighton Corporation [1954] 1 WLR 1161 applied
Hollins v. J. Davy Ltd. [1963] 1 Q.B. 844 considered
McGraddie v McGraddie and another [2013] UKSC 58 considered
Pratt v Aigaion Insurance Co SA [2008] EWHC 489 (Admlty) considered
Stephen Carroll v An Post National Lottery Company [1996] 1 IR 443 considered
Sze Hai Tong Bank v Rambler Cycle Co [1959] A.C. 576 mentioned
Taylor v Cooper's Marine Specialist [2011] 1 BHS J. No. 54 considered
Watt v Thomas [1947] 1 All ER 582 considered
per Barnett, P.: The relationship between the appellant and the boat owner was contractual. There was no basis for implying terms pleaded in the Statement of Claim as a part of the contract. Further, there is no basis for imposing tortious obligations in a contractual relationship.
Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd and another [2015] UKSC 72 applied
Mr. John Wilson, QC with Ms. D'Andra Johnson, Counsel for the Appellant
Mrs. Tara Archer-Glasgow with Mr. Audley Hanna, Jr., Counsel for the Respondent
Judgment delivered by the Honourable
. The appellant is unhappy with the decision of Mr. Justice Ian Winder (“the Judge”) delivered on 17 January 2022, wherein the Judge said, inter alia:
“13. … that the Defendant breached its duty of care as its actions fell below the reasonable standard expected of it, resulting in the loss of the Vessel…
14. I did not find that Clause 3(7) the Boat Slip Lease was effective to exclude the Defendant from being liable with respect to the theft of the Vessel…
…
16. … On a strict reading of Clause 3(7) therefore, it could not contemplate the negligence of the nature claimed against the Defendant in this action, which led to the theft of the Vessel. The lapses, resulting in the Defendant's breach of its duty of care, which were identified in the findings of Alphonso were systemic and could not be confined to any negligent act or omission by any porter, attendant, or servant of the Defendant.
17. In any event it seems that Section 40 and 4[1] of the Consumer Protection Act 2006 would exclude the operation of clause 7 of the Lease for the purpose of excluding liability…”
. The appellant asks that we overturn the Judge's decision, dismissing the action on the following grounds:
“1. The learned Judge erred in law and in his assessment of the evidence before him in concluding that the Appellant owed a duty of care to the Respondent to prevent the theft of the Vessel. In so holding the Learned Judge:
i. Misapplied the law and the applicable test for determining the existence of a duty of care to the facts that was before him. The Learned Judge ought to have concluded that in accordance with the Boat Slip Lease and in particular paragraph 17 of the Fourth Schedule thereof, either alone or in conjunction with the prevailing circumstances unique to a boating marina, that the Appellant did not owe a duty to the Respondent to prevent theft of the Vessel. In so imposing a duty the learned Judge essentially enlarged the property rights of the Respondent which had already been delineated through the carefully constructed commercial arrangement between the parties.
ii. Did not consider at all the effect of paragraph 17 of the Fourth schedule to the Boat Slip Lease dated 7th March, 2008 (the “Lease”) entered into between the Vessel owner and the Respondent in determining whether a duty was owed to the Respondent. Had the Learned Judge considered or properly considered paragraph 17 of the Fourth Schedule he would have concluded that it was not fair just or reasonable to impose a duty on the Appellant in the circumstances to prevent the theft of the Vessel where the parties to the Lease expressly agreed that this duty was to be borne solely by Modrono's Bimini Place Limited (the “Owner”).
2. In the event the learned Judge was correct in holding that the Appellant owed a duty to the Respondent to prevent theft the learned Judged (sic) erred in his assessment of the evidence in determining that the Appellant breached that duty in that:
i. The evidence was insufficient to establish on a balance of probability that Mr. Modrono locked and secured the Vessel.
ii. The accepted position on the evidence that no one at the Marina was in possession of keys to the Vessel.
iii. The Respondent's evidence was uncorroborated and diametrically opposed to the Appellant's but expressly preferred by the learned Judge without reason.
iv. The absence of any evidence that the vessel had to be broken into or was locked and the uncontested evidence that the ‘thieves’ advised Oneil that the Vessel was unlocked in instructing him to prepare the vessel for sailing. The only reasonable inference which ought to have been drawn by the learned Judge was that the ‘thieves’ unlocked the Vessel and obtained the keys to the Vessel directly from or through the negligence of the Owner and/or his co-owners.
The above should have led the Learned Judge to infer that at most the critical act which was directly causative of the theft, the proof of which rested with the Respondent, was not proven and at best the probabilities were equal.
3. The Learned Judge erred as a matter of law in proceeding to consider a claim in tort for negligence advanced by the Respondents in the face of the parties' contractual relationship. Such a claim, especially as it related to theft, was not open to the Respondents as a matter of law given the terms of the parties' contractual arrangement.
4. Alternatively (as must be assumed given that the Learned Judge proceeded to consider the applicability of the exclusion in clause 3(7) of the Boat Slip Lease to the claim for negligence) the Learned Judge erred as a matter of law in implying a term into the Boat Slip Lease that the Appellant would take any measures to keep the Vessel safe from theft. There was nothing in the Learned Judge's Judgment to indicate that he...
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