Parsons Corporation & Ors v CV Scheepvaartonderneming Happy Ranger [2006] EWHC 122 (Comm)

[2006] EWHC 122 (Comm)Case No 1999 FOLIO 357
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 9 th February 2006
Before
MRS JUSTICE GLOSTER, DBE
Between
Parsons CorporationClaimants(formerly The Parsons Corporation),ClaimantParsons Energy & Chemicals GroupingClaimant(a company incorporated under the laws of the State of Texas USAClaimantWorleyParsons Group, IncClaimantWorleyParsons InternationalClaimantSaudi Arabian Parsons LimitedClaimantItalian Petrochemical Manufacturers SpAClaimantATB Caldereria SpAClaimantC.V. Scheepvaartonderneming Happy RangerDefendant“HAPPY RANGER”Defendant
Richard Lord Esq, QC & Simon Salzedo Esq(instructed by Barlow Lyde & Gilbert) for ClaimantsNigel Jacobs Esq & Christopher Smith Esq (instructed by Winter Scott) for DefendantHearing Hearing dates: 19 th-21 st July 2005; 25 th-26 th July 2005; 28 th July 2005; 3 August 2005Further evidence and written submissions 10 th August 2005
Judgment
[1]At 16.45 hours on 11 March 1998, at Port Marghera in Italy, the Defendant’s vessel, the Happy Ranger (“the Vessel”), began the loading of a process vessel (“the process vessel”) belonging to the Third Claimant. This was a large cylindrical object required as part of a gas plant in Saudi Arabia, and weighed 833 t. The process vessel was lifted from a low loader on the quay by means of the Vessel’s two cranes. The Vessel was on her maiden voyage, having been delivered to the Defendant by the shipbuilders on 16 February 1998, in Flushing, Holland. The intention was that the Vessel would carry the process vessel to Al-Jubail in Saudi Arabia.[2]At approximately 17.44 hours, just as the cranes on the Vessel had completed the vertical lift and were swinging the process vessel inboard, one of the double ramshorn hooks (No. 87896) on the number 2 (aft) crane broke. The process vessel fell to the ground. Fortunately there were no serious injuries and only minor damage to the Vessel. Unsurprisingly, the process vessel itself suffered serious damage, the cost of repairs and ancillary costs amounting to in excess of US $2 million.[3]The reason that the hook broke, as is now common ground on the basis of agreed expert evidence from metallurgists, was that one of the double ramshorn hooks on the aft crane did not conform to its specifications in some respects and suffered from casting defects. Accordingly, the hook failed (at its shank) as a result of a brittle fracture. In paragraph 9 of their joint memorandum the experts reported as follows:
“The fracture of the shank of the crane hook occurred by unstable crack propagation from the larger of the two initial crack/defects when the highest resultant load ever experienced by the hook was applied.”
[4]It was, or became, common ground during the course of the hearing that: i) None of the hooks on the Vessel were ever tested to their safe working load (“swl”) of 250 t. ii) Lloyd’s Register of Shipping (“Lloyd’s”) requires a crane (covered by Chapter 9 of the Lloyd’s Rules) to be tested to 110% of swl; in this case, this meant 400 x 110% = 440 t. in respect of the cranes. Lloyd’s rules envisaged that, except in the case of loose gear, the safety critical items of a crane would all be tested to 110% of swl by an imposition of a load of 110% of swl on the crane itself. However, although it is true that, where there is a single hook involved, a load on the crane will test the hook to the same extent, that is not so with the more unusual double hook ramshorn arrangement where the test load is lifted with the hooks at an angle to the vertical. iii) None of the hooks on the Vessel were ever tested to their swl of 250 t. + 10% (275 t.). iv) There is a separate requirement (in Chapter 9 of the Lloyd’s Rules) for the testing of “loose gear”. That is specified to include hooks but exclude items integral to, or permanently attached to, a lifting device. In this case, for the load bearing capacity in question, if the double hooks were indeed “loose gear”, as the Claimants contend and the Defendant denies, they should have been tested to swl x 1.22 + 20t, that is to say to a load of 325 t. It is common ground that they were not so tested. v) On the basis of the metallurgical evidence, the defect in the hook which led to it breaking, was not time dependent. That meant that the defect weakened the hook in such a way that it would carry loads up to what the defect permitted, but would break if they were higher. It therefore followed that the hook was subject, when it broke, to the highest load it had ever experienced, which load had ex hypothesi not been replicated or exceeded in testing. vi) Accordingly, it follows, that if the hook had been proof tested to 325, 275 or even its swl of 250 t., or indeed any load higher than it actually experienced, it would have broken during the test and the accident would never have happened.

The parties and other relevant entities

[5]The Defendant is a one ship company registered in Holland. At all material times it acted for relevant purposes through Mammoet Shipping B.V. (“Mammoet”), a Dutch based specialist heavy lift shipping operator and carrier. Mammoet itself was a specialist in heavy lifting and an expert in the mechanical and engineering matters necessary to carry on business as such. Mr. Peterse, its managing director, who was the Defendant’s principal witness, is a qualified naval architect. At some time in the mid 1990s, Mammoet decided to commission, in the name of itself and/or separate one ship companies as owners, four specialist heavy lift vessels. These were to be the “Happy R” series of vessels, namely the Happy River, the Happy Rover, the Sailer Jupiter and the Happy Ranger. They were similar in construction but not identical. The Vessel, which was the last in the series of the four vessels to be built, was the subject of a Shipbuilding Contract (“the Shipbuilding Contract”) dated 6 July 1995 under which Mammoet as agent for the Defendant contracted with BV Scheepswerf en Machinefabriek De Merwede v/h Van Vliet & Co. (“De Merwede”), a well-known and experienced shipyard, for the construction of a multi-purpose heavy lift cargo vessel. De Merwede had built the first three vessels in the series. However, the construction of the Vessel was sub-contracted by De Merwede to De Schelde Scheepsniewbouw BV (“De Schelde”), also a well known and respected Dutch shipyard with about 125 years of shipbuilding experience.[6]De Schelde appointed the Classification Society, Lloyd’s, to approve the design, specification and construction of the Vessel and to check that the construction of the Vessel complied with Lloyd’s Rules and Regulations for the Classification of Ships during construction. The design and construction of the Vessel was also approved by the Dutch Harbour and Labour Inspectorate (“DHI”). As from 1 January 1998 the responsibility for certifying the loading and unloading gear on board Dutch vessels had been transferred from the DHI to the classification societies. However, in the present case, the cranes were certified by both the DHI and Lloyd’s, probably because the certification occurred during a transitional period.[7]The Vessel was to be fitted with 2 x 400 t. swl masthead cranes manufactured by Huisman Special Lifting Equipment BV (“Huisman”), well-known crane manufacturers founded in 1929 and specialising in the manufacture of masthead cranes. Huisman itself employed Lloyd’s to survey the cranes to check compliance with Lloyd’s Code for Lifting Appliances in a Marine Environment.[8]Each crane was mounted with two ramshorn hooks connected by a triangular plate to the lower block of the crane. The design of the hooks was approved by Lloyd’s (as evidenced by the fact that Lloyd’s certified the arrangement).[9]The crane hooks were cast by Stahlgesserie Rothernsee GmbH (“SGR”) who, at the material time, were on Lloyd’s’ List of Approved Manufacturers of Materials and would have had a quality assurance programme which was acceptable to Lloyd’s. The hooks were cast in steel by SGR as part of a batch at some stage in 1996. This was significant because the evidence showed that it was well known that the casting process, especially where large casts are concerned, is liable to produce defects in the cast due to differential thermal expansion in the heat treatment process. The Hanover office of Lloyd’s was engaged by SGR to carry out certain tests on the hooks including by way of visual examination, magnetic particle tests and ultrasound testing. These tests were carried out from about October 1996 to January 1997 and evidenced by various certificates, issued by Lloyd’s, confirming that the castings had been tested and complied with Huisman’s specifications. The hooks were not, however, at this stage proof load tested.[10]The First to Fifth Claimants are all members of the Parsons group of companies based in California. Parsons had contracted to provide plant to the Fifth Claimant for use in construction of a gas plant in Saudi Arabia. The Parsons Claimants had contracted with the Sixth/Seventh Claimants to manufacture the process vessel in Italy and thus the Parsons Claimants required transport of the process vessel from the Sixth/Seventh Claimants’ workshop at Port Marghera to Saudi Arabia. It is not necessary to distinguish between the Claimants for the purposes of this judgment. They include the manufacturers of the process vessel as well as all potentially relevant companies in the Parsons group, including the company which purchased the process vessel from the manufacturers, and the Third Claimant which contracted with the Defendant to carry the process vessel. I am satisfied, on the evidence which I have heard, that the Claimants include any person who could have had an interest in the damaged process vessel on 11 March 1998, when the accident occurred.

The building and design of the Vessel, the hooks and the cranes

[11]The original designs for the Happy R series of vessels included a single hook on each crane of 500 t. swl. This was the conventional arrangement at that time for heavy lift vessels. This was changed to a specification for two hooks of 250 t. swl each, simply on the basis that 250 t. was half of 500 t. Although this was a more costly arrangement, it was considered preferable on operational grounds. It was common ground that the decision to require the double hook arrangement was made by Mammoet/Mr Peterse, on behalf of the Defendant.[12]The double hook arrangement was unusual, but not exceptional. Capt Henk Alblas, the Superintendent of construction on behalf of Mammoet, had not come across it in the 60 or so vessels of the Spliethoff fleet operated by Mammoet, and knew of it only in the Happy Buccaneer. Mr Malcolm Dailey, the expert heavy lift engineer called by the Claimants, could recall only one double hook arrangement that he had been involved with by 1998, although he said that it was frequently used nowadays“on heavy lift ships as it offers the opportunity of having a lower hook height”. Mr Peterse thought that it was still unusual even today.[13]The static axial load in each hook of a double hook arrangement does not, where the slings are at an angle to the vertical, equal half the load in an equivalent single hook. The expert evidence given by Dr P.S.J. Crofton, the metallurgist called by the Claimants, explained that, for any given load on the crane, as the angle from the vertical of the twin hooks increases, so the load in each hook increases according to a simple mathematical formula; viz. for a load on the crane of 400 t. (swl), the load on each hook increases from 200 t. at vertical (0°) to 213 t. at 20°, 231 t. at 30° and indeed equates to safe working load of the hook (250) t. at 36.9°. Angles greater than 45° are not of practical significance because, in practice, heavy lifts are not undertaken using angles greater than 45º. During the trial, this point was referred to by counsel as “the double hook point”. It was common ground that this was a basic point that should be borne in mind when testing hooks, or cranes with double hooks, or when loading cargo onto ships by means of cranes with double hooks.[14]The hooks were designed to be (and were) held on to the “D” Plate of the crane by bolts or pins, rather than welded, and were capable of being removed without special difficulty. Based on the evidence of the experts, I find as a fact (and indeed it was effectively common ground) that the hooks would have been removed in any event every 4 to 5 years at the Vessel’s special survey. They were also designed to be removed whenever the 800 t. spreader beam was used, including during what was referred to as the 800 t. spreader beam test.[15]Construction of the Vessel took place during 1997 at de Schelde’s yard. The Vessel’s cranes were installed at some stage in the autumn of 1997. By the beginning of October 1997 the contract of carriage had been concluded between the Third Claimant and the Defendant for carriage of the process vessel. Mammoet knew that the maximum estimated weight of the process vessel, which had been specified in the contract of carriage as 780 t., was in fact 833 t. including lifting saddles. On learning of the weight increase, Mammoet charged the Claimants extra freight to cover this and to cover the cost of obtaining an exemption certificate from Lloyd’s.[16]Delivery of the Vessel occurred on 16 February 1998. On the same day, she sailed on her maiden voyage bound for Hamburg, Teesport and Porto Marghera, where she was scheduled to load the process vessel.

The contract of carriage

[17]The lifting of the process vessel onto the Vessel took place pursuant to a contract of carriage between the Third Claimant and the Defendant contained in a written agreement dated 7 October 1997, which incorporated the Hague-Visby rules. The material parts of Article III of these read as follows: “Article III 1. The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to(a) make the ship seaworthy(b) properly man, equip and supply the ship(c) make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation 2. Subject to the provisions of Article IV, the carrier shall properly and carefully load, handle, stow, carry, keep, care for and discharge the goods carried”. (a) make the ship seaworthy (b) properly man, equip and supply the ship (c) make the holds, refrigerating and cool chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage and preservation

B THE ISSUES

[18]It was not in dispute at the trial: i) that the Vessel was not seaworthy at the time of the accident because of the latent defect in the failed hook; ii) that the burden of proof is upon the Defendant to show that it exercised due diligence to make the Vessel seaworthy under Article III, Rule 1; iii) that the Defendant and Mammoet are to be treated as synonymous for these purposes; iv) that the Defendant is liable for the failings of subcontractors, or sub-sub-contractors, after 16 February 1998; and v) that the Defendant’s non-delegable duty under Article III Rule 1 attached when the Vessel came into their “orbit”, or under its ownership, possession or control.[19]As to the last point, it was common ground that, under Article III Rule 1 of the Hague-Visby Rules, a shipowner will not, in principle, be liable for any defects in the construction of the vessel because this would involve “an almost unlimited retrogression” in relation to a shipowner’s non-delegable duties. As Wright J. stated in W. Angliss v. Peninsular and Oriental Steam Navigation Co. [1927] 1 KB 456 at 460-461: “… The Carriage of Goods by Sea Acts have introduced a new and obligatory code of responsibilities and immunities as affecting carriers under bills of lading in place of the former rule that carriers by sea, while generally under the liability of common carriers, were free by contract to vary and limit their liabilities. In particular, the Acts have expressly abolished the previous absolute obligation to provide a seaworthy ship and have substituted an obligation to use due diligence to that effect. The carrier may not be the owner of the ship, but merely the charterer; he may not have contracted for the building of the ship, but merely have purchased her, possibly years after she has been built. In the two latter cases the builders and their men cannot possibly be deemed to have been the agents or servants of the carrier and it is illogical that there should be such difference in the carrier's obligations merely because he has bought the ship by the method of contracting with the builders to build it for him. In addition, if the carrier were held liable for the bad workmanship of the builders' men, he might equally be held liable for bad workmanship by the men employed by the various sub-contractors who supply material for the builders, such as steel-workers in furnaces and rolling mills, or who supply special articles such as castings, pumps or proprietary machines, which would involve an almost unlimited retrogression.[20]The same principle was applied more recently in The “Kapitan Sakharov” [2000] 2 Ll.R. 255 at 271-3 (per Auld LJ); see, also, Scruttonon Charterparties (20th Ed.) – page 429. The “Kapitan Sakharov” illustrates that the relevant failure to exercise due diligence must relate to the performance of a function undertaken (by the sub-contractor) as a carrier or on behalf of the carrier rather than in an alternative capacity, namely shipper as in The“Kapitan Sakharov”. The Court of Appeal also confirmed (by reference to W. Angliss & Co. (Australia) v. P & O Navigation Company (supra)) that a carrier:(a) should not be exposed to an infinite liability in time; and(b) is not, without more, liable for latent defects in a vessel before it acquired it. Both these propositions are relevant to the instant case.[21]Further, in “The Muncaster Castle” [1961] AC 807 the House of Lords unanimously considered that a shipowner’s/carrier’s duty under Article III, Rule 1 would not start and he would not be responsible for work carried out until the transfer of ownership, or possession of the vessel, or until the vessel came into his “orbit”, service or “control”: see perViscount Simonds at 8402a-b, per Lord Merriman at 860b-c, per Lord Radcliffe at 867f-868b, and per Lord Keith at 870c-d and f-g. Further, having referred in detail to Angliss, Lord Radcliffe stated (at 847E-G):
“It is plain to me that this conclusion turns on the consideration that the causative carelessness took place at a time before the carrier's obligation under article III (1) had attached and in circumstances, therefore, when the builders and their men could not be described as agents for the carrier ‘before and at the beginning of the voyage to … make the ship seaworthy’. This is a tenable position for those who engage themselves upon the work of bringing the ship into existence. The carrier's responsibility for the work itself does not begin until the ship comes into his orbit, and it begins then as a responsibility to make sure by careful and skilled inspection that what he is taking into his service is in fit condition for the purpose and, if there is anything lacking that is fairly discoverable, to put it right. This is recognised in the judgment. But if the bad work that has been done is ‘concealed’ and so cannot be detected by any reasonable care, then the lack of diligence to which unseaworthiness is due is not to be attributed to the carrier.”
[22]The Claimants claim damages for breach of the contract of carriage and in particular for breach of Article III, Rules 1 and/or 2. Their primary case is under Article III, Rule 1. The Claimants contend that the Defendant was itself at fault in allowing the lift to go ahead in the circumstances, and also in law responsible for the fault of others including the crane manufacturers and Lloyd’s, the classification society which oversaw the testing regime for the cranes and granted a special exemption certificate for this particular loading. They contend that the Defendant is also liable for the failings of others prior to the date of delivery on 16 February 1998. As an alternative case, the Claimant say the actual lifting was carried out in such a way as to put extra loading on the hook, causing the breakage.[23]The Defendant denies liability. It contends that, for the purpose of Article III Rule 1 of the Hague-Visby Rules, the Vessel came into the Defendant’s “orbit” on 16 February 1998. Accordingly it contends that, prior to 16 February, it cannot be liable for the negligence of any one or more of the builders, De Merwede and De Schelde, the foundry, SGR, the crane manufacturers, or Huisman, Lloyd’s or DHI. In principle the Defendant accepts that it could be liable in tort for its own negligence prior to 16 February. However, it submitted that:(a) the scope of its duty of care owed to the Claimants prior to 16 February is limited; and(b) the Defendant in any event was neither negligent nor did it act in breach of its duty of care prior to 16 February 1998. It further submits that, on and at all material times after 16 February 1998, the Defendant, its servants or agents, exercised due diligence to make the Vessel seaworthy within the meaning of Article III Rule 1 of the Hague-Visby Rules. In particular the Defendant submitted that: i) On handover of the Vessel the Defendants received all necessary certification. A separate hook certificate would not have been provided to the Defendants because: (1) the hook should have been proof tested and certified by the foundry and all the Defendants were concerned to receive was the “complete” crane certificate; and (2) the hook would not constitute “loose gear” so as to attract a separate certificate on handover; ii) Mr Piet Mast, the Lloyd’s surveyor in charge of the Flushing office reasonably granted the swl extension temporarily increasing the swl of each crane to 424 t.; iii) Mr. T.P.R Moolenaar, of Mammoet, the cargo inspector and port captain at the lift, acted reasonably in permitting the load to take place, especially in the light of the Mast extension; and iv) the lifting operations were carried out “properly and carefully” within the meaning of Article III Rule 2 of the Hague-Visby Rules.[24]Thus the issues which the Court has to decide may be summarised as follows: i) Did the Vessel come into the Defendant’s “orbit” prior to 16 February 1998 for the purpose of its having responsibility under Article III, Rule 1 for any failure to exercise due diligence in relation to the manufacture or testing of the crane or the hook, prior to that date? If so, when? ii) If the Defendant was responsible at any time prior to 16 February 1998, has it discharged the burden of proof of showing that it (or its sub-contractors or others) exercised due diligence to make the Vessel seaworthy? iii) If not, was such failure to exercise due diligence to make the Vessel seaworthy causative of the accident’s occurrence? iv) Has the Defendant discharged the burden of proof of showing that it (or its sub-contractors or others) exercised due diligence to make the Vessel seaworthy, after 16 February 1998? v) If not, was such failure to exercise due diligence in relation to seaworthiness causative of the accident’s occurrence? vi) Was the loading of the process vessel carried out properly and carefully within the meaning of Article III Rule 2 of the Hague-Visby Rules? If not, was such negligence causative of loss? vii) Have the Claimants proved their loss?[25]There is also an issue as to whether the hooks in question were loose gear as defined in Section 1.2, Chapter 9, of the Lloyd’s Rules. However this issue is not determinative of the case because, even if the hooks were not loose gear, the Claimants contend that they should have been tested to at least 110% of swl.[26]It was common ground that, by virtue of Article IV of the Hague-Visby Rules, the burden of proof was on the Defendant to show that it had exercised due diligence in making the Vessel seaworthy for the purposes of Article III, Rule 1.

Issue (i): Did the Vessel come into the Defendant’s “orbit” prior to 16 February 1998?

[27]There was no real dispute that Mammoet had a very significant input into the design and specification of the Vessel. Under clause 2 of the shipbuilding contract, Mammoet was entitled to have a representative to attend and monitor construction and testing. The person who acted as its representative was Captain Henk Alblas of Spliethoff, another Dutch company, who supervised her construction and testing on Mammoet’s behalf and attended almost on a daily basis at Schelde’s shipyard in Flushing. As I have already said, the Vessel was not an “off the shelf” purchase of a standard vessel. It is clear, and I so find, that there were numerous discussions, between Mammoet, represented by, amongst others, Mr. Peterse and Huismann, in which the design specification of the cranes were discussed in detail. In about September 1995, Mammoet, acting by Mr Peterse, decided that the Happy Ranger and the other Happy R vessels should have on each crane, not one ramshorn hook of 500 t., but 2 x hooks each of swl 250 t.. Capt. Alblas represented Mammoet and the Defendant throughout the design, construction and testing of the Happy Ranger. He had no real heavy lift experience, but was sent for a while onto the Happy Buccaneer to gain experience.[28]The Shipbuilding Contract dated 6 July 1996 was in standard form. The vessel was to be built to relevant specifications under the supervision of, and to the requirements of, Lloyd’s (see Articles 1(c), (d) and Article 3(b)). During the course of construction the Defendant’s rights were limited. Article 2 entitled the Defendant to inspect the Vessel and to give advice but expressly stated:
“However the BUILDER remains ultimately responsible for the construction of VESSEL in accordance with this CONTRACT”
. The Defendants’ representative (Captain Alblas) was entitled to two days’ written notice of any tests but these tests could be carried out without the representative’s attendance. Article 3 entitled the Defendant to request “minor modifications” although the Builder was not obliged to carry out any such requests. Article 4 provided for the Vessel to have dock and sea trials. “The methods to be used will be selected by the BUILDER to suit the VESSEL’s trial trip programme”. Article 6 dealt with the delivery of the Vessel and the passing of title and risk (“only upon delivery of the VESSEL” per Article 6(4)).

(b) provided:

“On delivery of the VESSEL to the BUYER every responsibility for the safety and generally for the condition of the VESSEL is transferred to the BUYER, and thereafter all responsibilities on the part of the BUILDER shall cease with the exception of the guarantee obligations provided for in Article 12 hereof.”
[29]The “warranty” period ran for 12 months from acceptance of the Vessel: see Article 12.[30]Capt. Alblas knew that the cranes were intended to have a swl of 400 t. and that there was no intention to limit the angles at which the double hooks could operate. There was no design or other limit on the angle to which the hooks could make to the vertical. There was no limitation in the crane manual either. It was to be anticipated that during the working life of the Vessel, angles of up to 45° would be used in lifts of heavy cargoes. At 45° the hook would have nearly a 50% higher load on it than when hanging vertically and, at maximum crane load, the swl of the hooks would be exceeded at 36.9°. Although Captain Alblas appreciated that point by the time he gave evidence, he had not appreciated it at the time of his involvement with the building of the Vessel and the testing of the cranes.[31]The Defendant had known since October 1997 that the Vessel would be carrying a heavy process vessel then estimated to weigh 780 t., from 16 December 1997 that it would be in excess of the cranes’ specified swl and from 21 January 1998 that the maximum weight would actually be in the region of 833.3 t. net of rigging. By mid December 1997, Mammoet had started to prepare lifting plans detailing how the lifting would be effected and it continued to refine these plans before and after delivery of the Vessel: see the plans dated 11 December 1997, 12 February 1998, 23 February 1998 and the final lifting plan.[32]On Mammoet’s instruction, the Master of the Vessel started on board in November or December 1997. He had no real experience of this type of crane and neither had the crane operators. The chief engineer came aboard at the same time as the Master. The chief officer came on board in February 1998; he had no experience of this type of crane either.[33]The hooks were tested at various times and several certificates were issued in respect of them by various Lloyd’s personnel. None of these stated or suggested that the hooks were proof load tested at any stage. The tests were principally metallurgical tests and it was common ground that these would not have revealed the fault. The Defendant at trial did not rely on the various tests of the hooks carried between 7 October 1996 and 13 March 1997 (although such reliance had been pleaded in its Further Information). In its closing submissions it also submitted, for the first time, that it was entitled to assume that the hook had been proof tested and certified by the foundry, which is a point I consider below in connection with the issue of due diligence after 16 February. However, none of the tests carried out on the hooks between 7 October 1996 and 13 March 1997 addressed proof loading (or any other loading) of the hook.[34]During January and February 1998 certain tests were carried out on the cranes which were witnessed by Captain Alblas on behalf of Mammoet. He saw a copy of the test drawing before the tests took place. The test procedures were drawn up between Huisman and Lloyd’s and the Defendant was not involved in drawing up the detail of the tests[35]On 14 January 1998 a 400 t. spreader beam test was carried out on board the Vessel, whilst Captain Alblas was present. However, the Defendant accepted that no reliance could be placed on this test because:(i) the purpose of the test was to test the capacity of the spreader beam rather than the crane as rigged;(ii) there was no evidence that the aft crane had been used during the test; and(iii) that, accordingly, there was no evidence that this test would have tested the hooks on the aft crane. On 20 January 1998 an 800 t. spreader beam test was carried out on board the Vessel, again witnessed by Captain Alblas. However, as was accepted by the Defendant, this test involved both cranes, but not the hooks, so was not relevant for the purpose of testing the load on the hooks.[36]More importantly, during the course of 3–5 February, two 440 t. barge tests were performed in accordance with test drawings prepared by Huisman. These barge tests were carried out on both the Vessel’s cranes, which involved lifting a barge of theoretical weight of 440 t. The tests were witnessed by Captain Alblas, on behalf of Mammoet, who saw a copy of the test drawing before the tests took place. The precise facts surrounding the barge tests are somewhat uncertain, but it appears likely that on 3 February, the barge test was attended by Huisman, Lloyd’s and the DHI. However, a problem was experienced on the forward crane, on that date, which meant that the barge test was aborted. The crane was repaired and on 4 February the 440 t. barge test was carried out by Huisman and Lloyd’s. The DHI did not attend on this occasion because they had not been formally invited to the tests. Captain Alblas cannot remember the identity of the person or persons from Lloyd’s who attended and there is little evidence of what they actually did or saw. It appears that, on or prior to handover, Lloyd’s issued a certificate bearing the date 16 February 1998 signed by a Mr Gelaudie, which purported to state that he had witnessed the cranes having been barge tested on that date, and, likewise, the Cargo Gear Book was endorsed to similar effect. However, there was no evidence from Mr Gelaudie explaining the circumstances in which he signed the relevant certificate and the cargo book or what, if any, inspections or tests he actually carried out or witnessed. I find as a fact that no-one from Lloyd’s did attend on 16 February for the purposes of carrying out tests, not least because that was the date that the Vessel set sail and the barge test took approximately a day to carry out. Indeed by the end of the trial it had become common ground that no tests were in fact carried out on this date. The likelihood is, in my judgment, that the certificates were simply signed on 16 February (when Lloyd’s personnel do appear to have come on board probably in connection with the handover) because that was the handover date, although the barge tests did in fact take place earlier, and were witnessed by personnel from Lloyd’s on that date. On 5 February the test was repeated for the DHI and a certificate dated 11 February was issued by it, addressed to the Defendant. I shall have to deal with the adequacy of these tests at a later stage, but, for the purposes of the present issue, what is relevant is that Captain Alblas was clearly present when they were being carried out and aware of what was being done. He was there not merely as an observer, but as a buyer’s representative to use his skill and experience to protect its interests.

Conclusion on Issue (i)

[37]I accept the submission of Mr Nigel Jacobs, counsel on behalf of the Defendant, that, in the circumstances set out above, prior to 16 February 1998, the Vessel did not come under the Defendant’s control or service, or in that sense, “within its orbit”. In The “Muncaster Castle” (supra), the term “orbit” is used co-extensively with ownership or service or control, and I do not consider that it should be construed in any looser sense. The Shipbuilding Contract itself shows how, contractually, the Defendant did not assume responsibility for the Vessel until 16 February. Mr Dailey (the Claimants’ heavy lift expert) accepted in evidence that responsibility shifted to the Defendants on 16 February. Moreover, the fact that the Master and/or Chief Officer were on board the Vessel prior to delivery for familiarisation purposes did not in my judgment mean that the Vessel passed into the Defendant’s orbit prior to 16 February. The evidence, not surprisingly, showed that, in contracts in relation to shipbuilding and ship sale, it is standard practice for a buyer to place officers on board the Vessel for familiarisation prior to the completion of purchase. If a vessel were to be in a ship purchaser’s “orbit” by reason of familiarisation alone, there would be few ship sale cases in which the vessel had not passed into the prospective owners’ orbit prior to delivery, which I would find a surprising conclusion. Further, the fact that the Defendant prepared lifting plans for the performance of its contract with the Claimants, before the Vessel had been delivered to the Defendants cannot bear on this issue. The Defendant obviously could not wait until 16 February (when the lift was to be carried out at the beginning of March), especially when the contract of carriage was concluded the previous October and the operation needed considerable pre-planning. This was accepted by Mr Dailey, who agreed in cross-examination that the planning of the lifting operation might take some time. Moreover, although the Defendant had Captain Alblas as its representative at the yard and present during the various tests, the reality is that, at that stage, the Defendant was entitled to entrust the testing regime to Huisman and Lloyd’s, as was accepted by Mr Dailey in evidence. Although in his subsequent evidence, Mr Dailey sought to draw Mammoet into the tests, his initial answers were as follows:
“Q. They are linked and once you have chosen the design it is down to the builders of the vessel and the crane manufacturers and class to devise the appropriate tests. A. Yes I agree with that.”
Later, he said, “Q. The purpose of having buildings and class, one of the purposes obviously you entrust the builders and class to ensure that the tests are carried out properly. A. That is true, yes.” A. Yes I agree with that.” A. That is true, yes.”[38]However, and this becomes relevant at a later stage of the analysis, Mr Dailey also made the point that it was not merely that the Defendant had a role in the tests, but rather that it had a duty to check through everything at handover:
“Q. But he is not responsible for devising the tests? A. No he is there to accept that the tests are adequate to prove the equipment was suitable for use. Q. Yes but as it were he does not devise does he? A. No. What he would have approved in this one because it was called the crane barge test that the 440 tonnes actually tested the cranes. It was never called the hook test so mentally you would not have been focused on it being a hook test, you just look at the test of the crane and calibre. Q. He is not the person who would devise whether or not there would be a specific hook test that is the responsibility of Lloyd’s and Huisman. A. Initially yes but in the end as a competent operator Mammoet should be asking for those tests. They would ask for the tests on the 400 tonne beams or the 800 tonne beams. Q. Doesn’t that all turn on Lloyd’s rules? A. It may well do. It may be in this instance Lloyd’s got it wrong, I don’t know. The end product which went out at the handover and sailed was not fit for purpose.”
Q. Yes but as it were he does not devise does he?

Q. Doesn’t that all turn on Lloyd’s rules?

[39]Thus, whilst I conclude, contrary to the submissions of Mr Richard Lord QC, who appeared on behalf of the Claimants, that the Defendant was not responsible, without more, for any negligence of others prior to the delivery of the Vessel (because I do not consider that the Vessel’s was under the Defendant’s control or within its “orbit” before that date), that is not, in my judgment, the critical issue, or the end of the story. What matters, in my view, is what actions were, or were not, taken by Mammoet and the Defendant after the latter took delivery of the Vessel, in the light of the knowledge that they clearly had:(a) as a result of the certificates which had been handed over;(b) as a result of the tests which they knew had been carried out and those which they knew had not been carried out;(c) as to the design of the ramshorn hooks and the lifting equipment; and(d) as to the properties of the process vessel that had to be loaded. It is to this issue which I now turn.

Issues (ii) and (iii)

[40]In the circumstances these issues do not arise for determination. Issue (iv): Has the Defendant discharged the burden of proof of showing that it (or its sub-contractors or others) exercised due diligence to make the Vessel seaworthy, after 16 February 1998?[41]I heard extensive evidence from witnesses on both sides, both factual and expert, and received lengthy detailed submissions, both written and oral, from counsel, both during and after the hearing. I have carefully considered all of these, but it is not feasible to attempt to summarise all the evidence and arguments. In my judgment, the Defendant has failed to discharge the burden of showing that it did indeed exercise due diligence to make the Vessel seaworthy, after it took delivery on 16 February 1998. Before summarising my reasons for this conclusion, I should say something about the respective expert witnesses called by the parties.[42]Dr Crofton’s evidence on metallurgical matters was not seriously challenged in cross-examination. Indeed, much of it was agreed in the joint statement produced by him and the Defendant’s expert, Robert Bulpett, who did not give oral evidence. What is of particular importance is the experts’ agreement of the point that the failure of the hook took place upon its being loaded with the greatest load it had ever experienced. From this it follows that the hook was never proof tested to a sufficient load to justify its use in the lifting of the process vessel. Dr Crofton was a highly experienced metallurgical engineer and a very competent scientist. He had great experience in the engineering of steel and I accept his evidence in full. One point of some significance which emerged from his evidence was that casting large hooks is a less reliable process than forging them. Mr Nigel Smith (the Defendant’s heavy lift expert) accepted that Dr Crofton was probably right about this, although he said he was not aware of it when he wrote his report. The relative unreliability of casting was later confirmed by Mr Peterse, who said that, after the accident, Mammoet switched to using the more expensive forging process for its heavy lift hooks. I accept Mr Lord’s submission that, on the basis of this evidence, any competent marine engineer would appreciate that the testing regime appropriate for cast hooks could not be less rigorous than that which was applicable to forged hooks. The reason that such failures are rarely encountered in practice is because the hooks are normally proof tested at some point before they are used, as Mr Smith accepted.[43]So far as the respective evidence of the two heavy lift experts was concerned, where their evidence differed materially, I preferred the evidence of Mr Dailey, the Claimant’s expert, to that of Mr Smith, the Defendant’s expert. My reasons for this view are: i) Mr Dailey’s knowledge of heavy lift practice was comprehensive and his experience more extensive than Mr Smith’s. The latter’s experience was in the main confined to some experience as a vessel’s officer prior to 1983. He had no recent experience of managing or planning any heavy lifting projects, or in the design or supervision of the building of heavy lifting vessels and very little experience of either heavy lift practice, or the practice on handover of this type of vessel. ii) As became clear in his cross examination, Mr. Smith in fact had very limited experience in relation to certification, and none whatsoever in relation to the certification which should be expected in relation to heavy lifting equipment. His experience was limited to two bulk carriers with which he was involved in 1991, a small passenger vessel conversion in 2003, and inspection of certain certificates on gas carriers. In contrast Mr. Dailey did have extensive experience in dealing with lift vessels and classification societies and the certificates they issue. iii) Mr Dailey in giving his oral evidence displayed integrity, authority and expertise, which Mr Smith could not match. iv) I did not find Mr Smith so reliable as an expert witness; apart from his limited experience in certain relevant areas as noted above, he vacillated somewhat in giving his evidence; for example, in giving evidence in relation to the issue whether the lifting plan, showing grommets and shackles, implied that calculations of angles and loads had been done. Thus, he first accepted that the lifting plan provided no basis for the assumption that, in planning the lift, account was indeed taken of the relevant angles; then, having heard Mr Peterse’s contrary account, Mr Smith then sought to suggest that Mammoet had done calculations, but quickly accepted that he had not seen any such calculations; then, when further questioned by the Court, Mr Smith said he agreed with Mr Peterse that the relevant calculations were implicit in the lifting plan drawing; and he finally (and correctly) agreed again that the drawing itself did not permit such an inference. v) I found him to be less objective than Mr Dailey. For example, I found the contrast between the attempt in his report to show that the barge test was an important and relevant test of the hooks and his oral evidence that the barge test was never designed to test the hooks, but only the crane, to be less than impressive.[44]Before setting out the particular respects in which, in my judgment, the Defendant failed to exercise due diligence, it is appropriate to remind oneself of some of the more obvious circumstances surrounding the accident. As I have said, it was common ground that the hook broke during loading after it experienced a heavier load in the lift than it had ever had before, in testing or otherwise. The whole point of a testing regime, as a matter of first principle and the Lloyd’s code, is to test all safety critical items to a load greater (by at least 10%) than they will experience in practice. Thus, in reality, the Defendant has to justify why there was a failure to test to the load at which the hook broke, in circumstances where, as Mr Smith accepted, the test required was a simple proof load test, which would have taken a hour or so; where the Defendant and Mammoet (itself a highly experienced specialist heavy lift shipping operator) were responsible for the double hook design which gave rise to the particular risk in the first place; where, as I find as a fact, that they failed at all material times to appreciate that the new double hook configuration meant that axial loads would vary with angle, and in particular to appreciate that, in consequence, proof testing the crane would not amount to adequate proof testing of the hooks. By “all material times”, I include the testing stage as well as at handover stage and thereafter, including when planning for and undertaking the lift. I include the testing stage, because although I have held that the Defendant was not itself responsible for any negligence or failure on the part of Lloyd’s, Huisman, Schelde or others before taking delivery of the Vessel, the Defendant nonetheless thereafter retained the knowledge that it had acquired during the testing stage.[45]The particular respects in which, in my judgment, the Defendant has failed to prove that it exercised due diligence for the purposes of Article III, Rule 1 on and after 16 February may be summarised as follows. (1). Failure to appreciate on and after handover that there had been no adequate proof testing of the hooks[46]First, in my judgment, the Defendant and Mammoet (for whom it is common ground that the Defendant is liable) should have appreciated, on handover, that that the new double hook configuration meant that axial loads would vary with angle and that there had been no testing of the hooks not merely to 110% of swl, but also in order to comply with the loose gear requirements set out in Chapter 9 of the Lloyd’s Regulations for testing of lifting appliances.[47]The relevant provisions were as follows:
“Section 1 Testing 1.1 General 1.1.1 Every lifting appliance is to be tested and thoroughly examined before being taken into use for the first time or after any subsequent alteration or repair which may affect the strength of the appliance, or at certain Periodical Surveys as indicated in Section 3. 1.1.2 Every item of loose gear is to be proof tested and thoroughly examined before being taken into use for the first time or after any subsequent repair or alteration which may affect the strength of the item. … 1.2 Loose gear For the purpose of these requirements, loose gear is defined as including: Hooks Shackles Blocks Swivels Chains Rings and similar items not permanently attached to the lifting appliance. Lifting beams, spreaders, frames and similar items of equipment which are not an integral part of the lifting appliance are also considered as loose gear. Built-in sheaves and blocks and other items permanently attached to the lifting appliance are not considered as loose gear and the test on the complete system ‘as rigged’ will be accepted as the test on these items. 1.2.2 The proof load applied to each item of lose gear is to be as required by Table 9.1.1 and associated Notes, as illustrated in Fig 9.1.1.”
Testing For the purpose of these requirements, loose gear is defined as including: Hooks Shackles Blocks Swivels Chains Rings Hooks Shackles Blocks Swivels Chains Rings and similar items not permanently attached to the lifting appliance. Lifting beams, spreaders, frames and similar items of equipment which are not an integral part of the lifting appliance are also considered as loose gear. Built-in sheaves and blocks and other items permanently attached to the lifting appliance are not considered as loose gear and the test on the complete system ‘as rigged’ will be accepted as the test on these items.

Chains Rings

[48]Mr Jacobs’ main submissions in opening (as reflected in the pleadings, the written submissions and the witness statements) were as follows. He submitted that the Defendant was entitled to rely on barge tests of the crane which, as I have already described above, were carried out on 3, 4 and 5 February 1998 on both the Vessel’s cranes. He also submitted that the Defendant was entitled to rely on certificates stating that such tests had been carried out, issued respectively by the DHI dated 11 February 1998 and by Lloyd’s dated 16 February 1998. (The Defendant no longer relied on any tests of the cranes carried out before 3 February 1998.) He further submitted that the Rules did not require the independent testing of the hooks as “loose gear” and there was no reason otherwise to test them separately. He contended that the hooks were not in fact “loose gear”, but even if they were strictly loose gear, the Rules were ambiguous and, on a reasonable and legitimate interpretation, permitted the ramshorn hooks to be treated as “permanently attached to the lifting appliance”. As a result, the hooks could be tested with the cranes “as rigged”.[49]He submitted that upon taking delivery of the Vessel the Defendant was not expected to repeat the testing and examination procedures which had taken place throughout the previous years, but was entitled to rely upon the tests which had been previously carried out. He accepted that upon handover the Defendant was under a duty to check that they received all necessary documentation from the builders and/or class. However, in circumstances where Lloyd’s itself had not apparently realised that a separate hook certificate was necessary, or that the hooks were (contrary to his submissions) loose gear under its own rules, the Defendant could not be criticised for not appreciating that it had not received a separate or, or indeed any relevant, hook certificate, or the significance of such absence. Nor was the Defendant under an obligation to conduct a “Sherlock Holmes” type analysis of the documentation. He further submitted that in these circumstances the Defendant did not fail to exercise due diligence by failing to obtain a document from Lloyd’s (i.e. a certificate relating to the proof testing of the hook) which Lloyd’s did not generally supply. Thus, he submitted, there would be nothing on the face of the documents to alert a reasonable shipowner to the possibility that the cranes and/or hooks had not been properly inspected and/or classed.[50]I do not accept these arguments. As Mr Smith accepted, it is a fundamental rule that any safety critical item should be proof loaded before it is put into use and that this requirement underpins the regime of the Lloyd’s codes relevant to this case. The minimum proof testing requirement is that an item should be loaded to its Safe Working Load plus 10%. A higher requirement applies (amounting to 325 t. for an swl of 250 t.) if the Claimants are right in their submission that the hook was loose gear under the rules. In my judgment, on the natural reading and construction of the Lloyd’s Rules, the hooks were loose gear; indeed, that is precisely what the rules say. I reject Mr Jacobs’ submission that Rule 9.1.2. is only relevant to testing at the foundry. It is clear from Rule 1.1.2 that chapter 9 is directed at every lifting appliance before being taken into use for the first time. Even if it were the case that a hook would not qualify as loose gear if it were permanently attached, the evidence in relation to the Vessel clearly established that these hooks were not permanently attached to the cranes. The hook was designed to be removable (it was bolted and not welded to the rest of the crane assembly) and had to be removed whenever the 800 t. spreader beam was tested or used. Mr Dailey’s evidence, which I accept, in relation to how hooks were treated by Lloyd’s, was that when all hooks were single hooks a “lackadaisical” attitude “crept in”, which led some surveyors to accept proof testing of the crane as testing of the hooks, even though that was not permitted under the strict letter of the rules. Despite this, Mr Dailey was clear that where a double hook was involved, the loose gear rules obviously needed properly to be applied and that, in the one instance he was aware of in 1998, that was indeed the practice followed. Moreover, the Defendant relied (for other purposes) on a statement of a Mr Mast of Lloyd’s, who was the senior Lloyd’s representative at in Flushing. Although his statement was inconsistent and unsatisfactory in various respects, he nonetheless said that “the hooks fall within the definition of ‘loose gear’ as described in the Lifting Appliances Code”. He did not give oral evidence. Whilst this statement may technically be inadmissible opinion evidence, the fact that he considered the hooks to be loose gear supported Mr Dailey’s expert view.[51]But even if one puts on one side the strict requirements of the Regulations, Mr Dailey’s evidence was that it was in any event common sense that the hooks themselves had to be proof tested, because a double hook cannot be properly tested merely by testing the crane. Mr Dailey emphasised on several occasions that a competent heavy lift professional or shipowner would realise that a proof load test certificate showing the testing of the hooks to proof load was an essential requirement for a heavy lift vessel with a double hook arrangement, and that such a person should ensure that he has one. Not only do I accept Mr Dailey’s view, but it is obvious common sense, once it is accepted that any competent heavy lift professional or owner would understand that the load in a double hook arrangement will exceed the load in the crane. Many of the relevant witnesses (for, example, Mr Peterse) accepted this point. Mr Smith gave evidence to the same effect:
“when you are dealing with cranes it is a fundamental point that you learn very early that the angle of the slings affects the load in the slings.”
Later he said “It is fundamental to whenever you are dealing with cranes whether they are small ones or big ones that you consider the angle of the sling …” and that it would be a serious failing not to do so.[52]Given that a hook (which is part of a double hook arrangement) will not have been satisfactorily tested by the proof tests carried out on the crane and requires to be tested itself, it seems to me to be only common sense that a certificate to that effect is a required item, if the ship is to carry out heavy lifting using the hook in such an arrangement. Mr Dailey’s evidence was that, if he had been the inspector on the lift, it would not have gone ahead because of the lack of a certificate showing that the hooks had been proof tested. Even Mr Smith accepted that:
“If Mammoet knew that the hooks had not been tested then they shouldn’t have started the lift.”
[53]Moreover, in my judgment, and contrary to Mr Jacobs’ submissions, the Defendant was not in all the circumstances entitled to rely on the barge test, nor on the fact that DHI and Lloyd’s had respectively issued their certificates dated 11 February 1998 (Document E /14) and 16 February 1998 (Document E /15) based, or purportedly based, on that test. In Mr Jacobs’ favour I am prepared to assume that the latter certificate was indeed supplied to the Defendant on handover (although the evidence was very unclear about this). I find as a fact that the barge test was indeed carried out (and may even have been carried out twice), but the precise loads exerted on the hooks during this test are uncertain. They were never considered by whoever planned the test, as was accepted by Mr Smith in cross-examination. They could have been greater or less than the figure which was estimated as 225.5 t., on the assumption that the barge weighed exactly 440 t. and the angle of the hooks was 12.7°. However it was clear that, at the time, the angle was not calculated, and was only calculated later. It may well have been different in either direction. It is possible that, during the barge test, the hook might have held a load of approaching 225 t. The actual load could easily have been less than this because, as Mr Dailey explained, there are numerous unknowns involved in that calculation, and there was no sufficient record kept of the calibration of the barge itself. I consider, based on all the evidence (including that relating to subsequent lifting of the crane, to which I refer below), that it is probable that the load imposed on each hook of the aft crane during the barge test was significantly (though not much) less than 225 t. It was probably in the range of 210-215 t. given the weight at which the hook subsequently broke.[54]However (whatever the precise weight exerted by the barge test) what in my judgment was, or should have been, obvious, to the Defendant and Mammoet, given:(a) their considerable experience as heavy lift ship operators;(b) the fact that they had been responsible for the change in the design in the crane to the double hook arrangement;(c) their attendance (by Captain Alblas) at the tests prior to the hand over; and(d) the terms of the certificates themselves (which only related to the swl of the cranes), was that the hooks themselves had not been proof tested. This meant that, given the double hook point, there could be no certainty whatsoever that they had been tested to their swl of 250 t, let alone to a proof test figure of 275 t. (i.e. swl x 1.1) or a loose gear figure of 325 t. (i.e. swl x 1.22 + 20). Nor do I consider that the Defendant and Mammoet can, in the circumstances of this case, shelter behind the apparent satisfaction of Lloyd’s and the DHI with the testing of the cranes prior to handover of the Vessel or behind the fact that the tests were devised by Huisman and carried out under the supervision of Lloyd’s and DHI . As Mr Lord submitted, Mammoet had its own functions and duties to discharge, on behalf of the Defendant and the fact that Captain Alblas may have not sufficient heavy lifting experience, cannot exonerate Mammoet.

The Defendant’s new point relating to a proof test at the foundry

[55]In his closing submissions, Mr Jacobs raised a wholly new point for the first time to the effect that the hooks should have been proof tested at the foundry. He submitted that the Defendant was entitled to assume that this had been done, and, accordingly, to assume that there was no need for any further testing. This point was taken apparently in the light of:(a) evidence given by Mr Smith on the penultimate day of evidence, when he said that he would have expected the hooks to have been proof tested at the foundry (i.e. by SGR) before delivery to Huisman; and(b) evidence given on the following day, by Mr Peterse in re-examination, that he was aware that hooks should be proof tested at the foundry and that he would not expect to see certificates for testing done at that stage. Reliance was also sought to be placed on Dr. Crofton’s statement in cross-examination that it was most usual for foundries to test hooks. As Mr Lord submitted, this was something of a volte-face in the presentation of the Defendant’s case. The defence that was pleaded, opened and advanced in the Defendant’s factual and expert evidence was that the (barge) crane test was in fact a reasonable test of the whole crane and hooks, and nobody needed to have done any other tests. By his closing submissions, and contrary to his earlier approach, Mr Jacobs was, on the contrary, contending that Lloyd’s and Huisman were negligent in not checking for certificates of proof loading of the hooks from the foundry (and by necessary implication, negligent because the crane test was not going to suffice); and that the Defendant was reasonably entitled to assume, even in the absence of any relevant certificate, that the hooks had in fact been proof tested by the foundry, so that no further tests or certificates were necessary.[56]Mr Lord submitted that the point was not available to the Defendant on the pleadings and that it was, in any event, clearly wrong on the weight of the evidence before the Court. He also submitted that the Defendant should not be permitted to amend its case to raise it. I agree. Moreover, even if I had been minded to allow the Defendant to amend to raise the point, or I had taken the view that Mr Jacobs could run the point without the need for any amendment, I would have held against him on this new point. Shortly stated my reasons for this conclusion are as follows.[57]It is clear that the point was never pleaded or referred to in Further Information documents, Voluntary Further Particulars, or otherwise. No amendment was put forward to rely upon any proof test at SGR’s foundry. I would have rejected any application for permission to amend on the grounds of lateness. By the time the new point was taken, the evidence had all been completed and the point was not put to Mr. Dailey. In any event, in my judgment, the new point would not have succeeded on the evidence before me. The evidence put in and relied on by the Defendant was unequivocally to the effect that the hooks were proof tested as part and parcel of the cranes. All four of the Defendant’s witnesses gave evidence to that effect. Although Mr Smith’s report did suggest (at paragraph 4.4) that it would be usual for hooks to be tested before they were delivered to the crane manufacturer, he did not suggest before the trial that this would have been a proof test, or a substitute for a proof test. He went on in the next paragraph to say that:
“In my experience the hook of a large ship’s crane was always considered as part of the complete system and was tested as such.”
At other passages in his reports, he confirmed the testing of hooks as part of the complete crane.[58]There was no reliance in the Defendant’s opening skeleton argument upon any proof test of the hooks which might have taken place before the hooks were supplied to Huisman. I agree with Mr Lord that the suggestion that the Defendant was entitled to rely upon an assumption that the hooks had been proof tested at the foundry is inconsistent with the case it put forward at all times until the oral expert evidence that the point of the beam and barge testing was to test the crane as a whole including the hooks. It is also at odds with common sense, because it would mean that a safety critical part of the lifting apparatus, namely the hooks, were proof tested in a test which was not recorded or certified in any way that was available to the shipowner, or cargo owners or any lifting surveyor. No rationale has been suggested for the contrast between the retention of various certificates about the chemical composition of the hooks and the absence of any record of the alleged proof tests. Moreover, Lloyd’s regime for proof testing would be unnecessary and pointless if testing at the foundry could simply be assumed to have taken place. Likewise, I reject the Defendant’s submission that there was no foundry proof test certificate to that effect by saying it was the sort of document which would only be given to Lloyd’s or Huisman, and not to the Defendant. I find such a submission not only illogical, but also contrary to the evidence, since there were in fact several certificates from the foundry or from the time when the hook was at the foundry which were issued to SGR or Huisman, but which were given to the Defendant on hand over and were relied upon by it, as part of its original case. Accordingly I reject the new point. (2). The submission by Mammoet to Lloyd’s of a lift plan and Lloyd’s grant of an extension[59]After delivery of the Vessel on 16February 1998 Lloyd’s was engaged directly by Mammoet/the Defendant, as opposed to by the shipyard, which had been the position prior to delivery. On or about 24 February, Mammoet formally applied to Lloyd’s for a special exemption allowing loads of up to 424 t. per crane (i.e. 6% over swl) for the purposes of lifting the process vessel. Mammoet attached a load plan which was probably that dated 23 February (Document E/110). On 2 March Lloyd’s granted “a temporary increasement [sic] of the Safe Working Loads” (“the extension”) in the amount requested (Document E/111). This extension was received by the Defendants on 4 March and it referred to:(1) Certificate No. FLU 800013/1 dated 2 March 1998 (E/20);(2) the Interim Certificate of Class No. FLU 800013 dated 2 March 1998 (E/19) and the Cargo Gear Book (E/20B).[60]In my judgment the Defendant/Mammoet have failed to establish that they exercised due diligence in relation to obtaining this extension. I find the lift plan that was submitted by Mammoet to Lloyd’s (E/110) to have been misleading. It did not make it clear that there was a double hook arrangement in place and suggested (by the calculation) to the reader that what was being considered was a calculation of load on a single hook (as had the predecessor version with a calculation in similar terms (E/97)). There is no evidence to suggest that Mammoet ever calculated the angles of the hooks, and therefore the loads that would be on the hooks, during the lifting. Mr Peterse (although he had not been involved in drawing the plan) claimed for the first time in his oral evidence that the lifting plan at E/110 implied that the angles of the hooks, and therefore the loadings on the individual hooks, must have been calculated. The Defendant sought to support that contention by a yet further expert report from Mr Smith received at or shortly after the end of the oral hearing. I reject this contention. The claim is based on the assertion that the specification of shackles and slings in E/110 necessarily implies that the sling/ grommet loads, and thus the hook loads, have been calculated. The mere specification does not do so. As Mr Dailey pointed out, the shackles and slings/grommets could have been selected without any calculation, as they are on any basis of more than ample capacity to undertake the lift. Moreover, as Mr Lord submitted, the only document produced by the Defendant with the relevant angles and loads marked on it is dated December 1999, which itself suggests that no such calculation was done before the accident.[61]I also find that the Defendant has failed to discharge the burden of proof of showing that Lloyd’s (for whose failings it was accepted that the Defendant was responsible) carried out its function of granting the extension with due diligence. It may be that the extension was requested orally before the Vessel left on 16 February, but it does not seem that it was formally sought until a letter dated 24 February from Mammoet to Lloyd’s, which has not been made available in evidence. Mr Piet Mast, the relevant Lloyd’s surveyor at the time, and the senior man in charge of the Lloyd’s Flushing office, who granted the extension, gave a written witness statement. However, he did not come to court to give an explanation of his actions despite apparently intending to do so until just before the start of trial. Lloyd’s were not apparently prepared to allow him to attend the trial for cross-examination. He signed the certificate No. FLU 800013/1 dated 3 March 1998 (E/20); the Interim Certificate of Class No. FLU 800013 dated 2 March 1998 (E/19) and the Cargo Gear Book purportedly on 16 February 1998 (E/20B). All three documents purported to record that on 16 February he personally had attended on board the Vessel and had “thoroughly examined” the cranes for the purpose of the extension. It was perfectly clear from his witness statement that this was untrue. As he himself said in his statement, he did not attend any of the testings of the hooks and cranes that took place in January and early February. The only sensible inference from his statement is that neither did he attend on 16 February, or on any other date, to examine the cranes or the hooks for the purpose of granting the extension. He took the view, that, in the light of the earlier certificate (E/15) issued by Mr Gelaudie of Lloyd’s on 16 February, certifying the swl of the cranes to 250 t. (based on the barge test), “there was no point in performing a test to confirm that the cranes could safely handle 424 mt”.[62]In my judgment, the Defendant has failed to show that the grant of the extension was anything other than negligent. Apart from the fact that there was no separate examination of the cranes at all, it is clear that no proper consideration whatsoever was given to the risks of going ahead with the increased load. The grant of such exemptions should not be a rubber stamping exercise. It clearly was in this case. Indeed, as Mr Lord submitted, it was casual in the extreme. The very minimum requirement for grant of an exemption was an inspection of the cranes; Mr. Mast had, however, never inspected the cranes, despite falsely certifying that he had. He appears to have issued an exemption purely on the basis that he understood that another surveyor had examined the cranes some days before. He does not appear to have considered the lifting plan at E/110 which, as I have said already, was unhelpful and misleading. Moreover, if indeed Mr. Mast thought that the hooks were loose gear, as he suggested in paragraph 10 of his statement, it is even more surprising that he did not give some thought to the consequences of the double hook arrangement and the question as to whether, if the hooks themselves had not been proof loaded, he could ever have issued the exemption.[63]Furthermore anyone at Mammoet looking at the extension certificates, (Mr Peterse did not but a Mr W.J. Fokker in the operational Department apparently did) must have appreciated that they were incorrect as they certified tests of cranes on a date when Mammoet knew there were not any and they certified inspections for the purposes of an exemption, purportedly carried out before the formal request for the exemption had been made.[64]It follows that I hold that the Defendant has not discharged the burden of proving for the purposes of Article III, Rule 1 that it had exercised due diligence to make the Vessel seaworthy. Issue (v): Was such failure to exercise due diligence in relation to seaworthiness causative of the accident’s occurrence?[65]The Claimants can only succeed if the breaches by the Defendant to make the Vessel seaworthy were causative of the damage to the process vessel. In my judgment such breaches were indeed causative of the damage. Each breach, taken separately and cumulatively, was one of the several legally effective causes of the accident. Thus: i) Had Mammoet/ the Defendant appreciated the fact that the hooks had not been proof tested, and that there were no certificates to that effect there should, and could, have been a proof test of the hooks before the loading took place. If that had happened, the defect would have been discovered, since it would have tested the hooks to at least 110% of their swl, which it is common ground was greater than the weight of the load at the time that the hook broke. ii) Had Lloyd's done its job properly at the time Mr Mast came to consider the grant of the extension, it would have appreciated that, given the double hook arrangement, the previous barge test had not tested the hooks to the loads which they might experience in practice, and it would have insisted that a proof load test was done. Issue (vi): Was the loading of the process vessel carried out properly and carefully within the meaning of Article III Rule 2 of the Hague-Visby Rules?[66]In the light of my decision in relation to Article III Rule 1, it is not strictly necessary for me to reach any conclusion on this issue. However, given that I have heard the evidence, it is obviously desirable that I should do so.[67]The facts surrounding the loading were as follows. On 6 March, the Vessel entered Port Marghera and moored. Mammoet’s loading superintendent, Mr T.P.R. Moolenaar joined the Vessel to supervise the loading. On 7 March loading operations began and some smaller pieces were loaded without incident. As I have already stated, none of the lifting plans for the process vessel used by Mammoet appear ever to have calculated the angles that the hooks would make to the vertical or the potential loads that, accordingly, might be on the individual hooks, as result of the double hook point. The lift of the process vessel began at 16.45 hours on 11 March. By 17.16 hours or thereabouts the load was clear or nearly clear of the trailer. Despite the fact that this load was expected to be on the very limit of what the Vessel could lift (833 t. + 14 t. rigging = 847 t.) and the exemption certificate only allowed for 424 t. per crane) the Vessel’s cranes were operated by junior officers who had no experience of their use. They were using them for this type of in tandem lift for the first time. As soon as the lift began with the process vessel clear of the trailer, the readouts from the cranes showed a load on the aft Number 2 (aft) crane of 399 t. and on the forward crane of 426 t., which suggested that the weight was not evenly distributed. This suggests that, theoretically, the hooks on the aft crane experienced a load of 207 t. at that time. Because the 426 t. figure was over the Lloyd’s exemption, Mr Moolenaar phoned the Mammoet head office and spoke to a Mr Knipscheer, who in turn spoke to Mr Peterse. Mr Peterse told them to go ahead, apparently without consulting Lloyd’s. Mr Moolenaar (who did not give evidence) seems to have thought that the load readouts were probably inaccurate. The lift resumed at about 17.20-6. As indicated above, the vertical lifting phase was completed by about 17.44 when the relatively delicate operation of swinging the process vessel inboard, requiring synchronized slewing (horizontal rotation) and luffing (raising of the jib) by both cranes started. Within a minute or so of this procedure beginning, the hook broke.[68]The following facts were, or were virtually, common ground. There was no reliable direct evidence of the load at which the hook failed. However either the load at which it failed was above 207 t. (as appears likely) or the barge test subjected the hook to less than 225 t., or both these things happened. The hook did not fail when it was subjected to a load of 207 t. immediately after the process vessel had been lifted clear of the truck. Thus it follows that when the hook did fail, it was carrying a load greater than 207 t. There were many possible reasons for an increase of the load. The precise combination of these factors which actually occurred is a matter of speculation on the evidence. They include the possibility that the crew had slightly adjusted the weight distribution by (say) one degree so that the lift point on the aft crane was marginally lower than on the forward crane. If this had occurred the static load in the lower crane would increase by 11.7 t. (to about 219 t.). As Mr Dailey accepted in cross-examination, this type of manoeuvre in response to the fact that the aft and forward cranes were reading 399 t. and 426 t. respectively cannot be criticised. (I should say that I was not assisted by Mr Smith’s late evidence in relation to the lowering of the aft crane and weight transfer and have decided this point on the basis of the earlier agreement between the experts on the issue). The process of slewing and luffing would have added a dynamic force in the order of about 2 – 3 tonnes, as Mr Smith said. Jerkiness as the aft crane luffed and slewed might have imposed additional (dynamic) loads on the hook. The fact that the hook broke just as the aft crane began to slew in makes it very likely that the straw which broke the camel’s back was an element of dynamic loading arising at the start of the slewing. In these circumstances, it can be seen how the dynamic loading on the failed hook could have reached (say) 222 t. which might have been slightly above the force achieved during the barge tests. During the barge test, the hook might have held a load of approaching 225 t. The actual load could easily have been less than this because, as Mr Dailey explained, there are numerous unknowns involved in that calculation, and there was no sufficient record kept of the calibration of the barge itself.[69]In my judgment, based on all the evidence, it is probable that the load imposed on each hook of the aft crane during the barge test was significantly (though not massively) less than 225 t., possibly in the range 210-215 t. That was close to, but did not exceed, the load at which the hook would fail, which may have been somewhere in the range 210-225 t. That higher load was reached during the second part of the lift, when the aft crane began to slew in.[70]In my judgment the loading of the process vessel was not carried out properly and carefully within the meaning of Article III Rule 2. My reasons can be shortly summarised as follows. FirstI accept Mr Lord’s submissions that the Defendant was negligent in proceeding to plan and effect the loading when it knew or should have known that the hooks had not been tested to 110% of swl or even close to it. I accept that the Defendant/ Mammoet did not apply their minds to hook loadings or slings angles at all. Had they done so they would have worked out that the hooks were only tested to about 225 t. which was too small as a test for a load anticipated to be 219 t., even if spread between the cranes. Thus the lift plan dated 11 December 1997 (E/97) assumes a single hook. By 12 February 1998, Mammoet had realised that there were double hooks, so in later plans (for example, E/106 and following) there were depictions of this. However the calculation formula remained the same, and failed to take account of the change in the drawing. The “load per hook” stated on the drawing was not per hook, and Mammoet failed to factor in the actual load per hook at any point. However, this failure is in reality no different from the point which I have already decided against the Defendant under Issue (iv) above. It was causative of the Claimants’ loss, because if the point had been appreciated, the lifting could not have gone ahead. However it adds nothing to my previous findings under Article III, Rule 1.[71]I also consider that it was negligent and a breach of the Defendant’s obligations under Article III Rule 2 for Mr Peterse to authorise the carrying on of the loading operation after the read out showed 426 t. Mr Peterse knew the read out on the number 1 crane (the forward crane) was more than the permitted maximum. His failure to consult Lloyd’s was irresponsible. His excuse that it was 17.30 and therefore too late in the day to contact Lloyd’s was not persuasive, in the absence of any attempt to do so on his part. Nor was his attempt to justify an approach of “carry on regardless”, on the basis that the load meters only had an accuracy of 1-2%, convincing. All this meant was that (taking the 2% figure) a reading of 426 t. signified that the true figure was between about 418 and 434 t. That was all the more reason to stop the load, not a reason to carry on. As Mr Lord submitted, there was an alternative. The load was only just off the trailer. It could have been replaced and the grommets removed/adjusted, as envisaged by the claimants in their plans. However, it was clear from his evidence that Mr. Peterse took a gamble to avoid the risk of losing time.[72]Mr Lord submitted that this negligence was also causative. He submitted that when the load was first lifted off the trailer at 17.16 hours, the weight distribution on the forward/aft cranes was 426 t.-399 t. and the hooks on the aft crane experienced (theoretically) a load of 207 t. The hook did not break then or for some 28 minutes thereafter, just after it had started slewing in when it experienced an additional, if small, extra load. (Mr. Smith calculated it as 1.7 t. but accepted that it may have been more). So submits Mr Lord, if the Defendant had put the load down, the load would have been readjusted to even out the weight distribution so that, instead of 426-399 t., the Defendant would have had about 412.5 t. on each crane (426 + 399/2). This, he submitted, would have given a theoretical load on the hooks of (412.5/2 divided by cos 15) = 213 t., i.e. an extra load of 6 t. over and above what it had on first starting the lift. Thus, he contended, it would be fair to infer that the hook would have broken as the crane took up the strain and before the load was clear of the trailer. He submitted that no significant damage in that event would have resulted. On the other hand, he submitted, if the load at which the hook was destined to break was significantly above 213 t., then it was possible that a properly balanced load could have been brought aboard without excessive dynamic forces and without the hook having broken at all. In that event, he submitted, somebody else’s cargo might have been damaged another day, but again, no loss would have been incurred by these Claimants.[73]I reject these submissions. What would have happened if Mr Peterse had not gone ahead with the load that evening, but instead waited for Lloyd’s to grant a further extension (as it most probably would have done), or alternatively had directed the Defendant/Mammoet’s employees properly to rebalance the load, is entirely speculative. The likelihood is that the hook would have broken in any event, and significant damage caused. Accordingly, save in respect of the first point, as to the negligent planning of the loading, the Claimants have failed to prove causation under this issue,

Issue (vii): Have the Claimants proved their loss?

[74]Mr Jacobs made several points as to the alleged unsatisfactory nature of the Claimants’ disclosure in relation to the proof of the quantum of their loss. I am satisfied, having heard the evidence of Mr Charles Hancock, a former Vice-President and Project Manager of the Claimants, that there is nothing in such criticisms and the Claimants have adequately proved their losses, including the item relating to the entitlement of the Fifth Claimant, described in the evidence as “Saudi Arabia Parsons”, to receive an indemnity from the Third Claimant.[75]I will hear further from counsel as to the amount of the Hague-Visby package limitation, pursuant to Article IV Rule 5, if necessary, and as to the precise form of the order.[76]Finally, I should like to express my gratitude to leading and junior counsel, and to the respective firms of solicitors, for their detailed and helpful written and oral submissions. The fact that not all such submissions have been referred to in this judgment does not mean that they have not been of assistance in enabling me to reach my conclusions.

Cited in 2 later judgments