________________________________________

From: Jason Neyers [jneyers@uwo.ca]

Sent: 31 March 2010 20:32

To: Colin Liew

Cc: ODG

Subject: Re: Beneficial owners can sue for negligently-caused economic loss to  property

Dear Colleagues:

I was wondering if anyone had any thoughts about this case. I suppose one's view might depend ultimately on how one views the rights enjoyed by the equitable owner. If they are simply "rights against rights" as I have heard argued at the various Obligations conferences, then the decision appears wrongly decided.

I was also a little surprised with the ease that the Court of Appeal side-stepped The Aliakmon:  what difference in justice is made when the legal owner is joined?

Jason Neyers

Associate Professor of Law

Faculty of Law

University of Western Ontario

N6A 3K7

(519) 661-2111 x. 88435

Colin Liew wrote:

Dear all,

The English Court of Appeal in Shell UK Ltd & Ors v Total UK Ltd & Ors [2010] EWCA Civ 180<http://www.bailii.org/ew/cases/EWCA/Civ/2010/180.html> has decided (at [142]) that a duty of care is owed to a beneficial owner of property by a defendant who can reasonably foresee that his negligent actions will damage that property. If, therefore, such property is, in breach of duty, damaged by the defendant, that defendant will be liable not merely for the physical loss of that property but also for the foreseeable consequences of that loss, such as the extra expenditure to which the beneficial owner is put or the loss of profit which he incurs. Provided that the beneficial owner can join the legal owner in the proceedings, it does not matter that the beneficial owner is not himself in possession of the property.

The appeal arose out of the 2005 Buncefield fire where, due to the negligence of Total (as found by David Steel J in March 2009), substantial damage was caused to the Hertfordshire Oil Storage Terminal. At issue in this appeal, however, was whether Shell could claim damages against Total in respect of economic losses caused to it as beneficial owner of land and facilities at Buncefield.

Regards,

Colin

Looking at it from the other end, it's worth noting that it has also been held -- sensibly -- that a trustee or PR can sue for the damage to a trust estate even though the actual burden of the loss falls on the beneficiaries. See Chappell v Somers & Blake [2004] Ch. 19, [2003] EWHC 1644 (Ch), esp. at [27]–[28]; also Malkins Nominees Ltd v Société Financière Mirelis SA [2004] EWHC 2631 (Ch).

Andrew