Dear all,

A question about the damages, because I'm not following this - mostly because I'm a long way from being a tort lawyer. The legal title to the pipeline in question was held by what the court describe as a vehicle company who I assume have no interest bar bare legal title. If the trustee sues, I imagine they would recover damages based on the damage/destruction of the pipeline for which they would need to account to the beneficiaries, but Shell's consequential losses are irrecoverable (if I understand Rob aright). I'm not sure I see why though. If Shell were full legal owner (no trust just Shell) would they not be able to recover consequential damage - and any economic loss, or is that too remote? If they could recover as legal owners, why is this case different assuming for the moment they have a substantive cause of action?

Duncan

Dr Duncan Sheehan

Senior Lecturer in Law

Norwich Law School

University of East Anglia

Norwich NR4 7TJ

United Kingdom

Phone:44(0)1603 593255

Papers at http://ssrn.com/author=648495

See my BePress site at http://works.bepress.com/duncan_sheehan

>-----Original Message-----

>From: Kelry Loi [mailto:kelryloi@hku.hk]

>Sent: Thursday, April 01, 2010 4:11 AM

>To: 'Lionel Smith, Prof.'

>Cc: 'ODG'

>Subject: RE: Beneficial owners can sue for negligently-caused

>economic loss to property

>

>Dear colleagues,

>

>Negligence

>

>Following Lionel's point, the tortfeasor's duty of care is owed to the

>trustee, not beneficiary. Thus, the tortfeasor ought to compensate the

>trustee (not beneficiary) for the trustee's (not

>beneficiary's) loss, though

>the trustee has to account to the beneficiary for the recovery.

>

>Joining the trustee to the action allows the process to be

>shortcircuited.

>But that is just the process; it might change the party who is paid. It

>shouldn't change the amount that the tortfeasor has to fork

>out. What he

>pays the trustee/beneficiary should be the loss suffered by

>the trustee (for

>which the trustee accounts to the beneficiary); not the (greater) loss

>suffered by the beneficiary.

>

>Conversion

>

>Prof Andrew Tettenborn has a piece ((1996) 55 CLJ 36) questioning a

>beneficiary's right to sue in conversion (cited by the CA in

>MCC Proceeds v

>Lehman Bros [1998] 4 All ER 675). MCC Proceeds referred to The Aliakmon

>[1986] AC 785 as authority denying a beneficiary's right to sue in

>negligence, and that was regarded as one of the factors for denying a

>beneficiary's right to sue in conversion. Does it now mean that

>beneficiaries should be allowed to sue in conversion too?

>

>Happy holidays!

>

>Kelry.

>

>(Mr) Kelry C.F. Loi

>Asst Prof, Faculty of Law

>University of Hong Kong.

>

>

>-----Original Message-----

>From: Lionel Smith, Prof. [mailto:lionel.smith@mcgill.ca]

>Sent: Thursday, April 01, 2010 6:18 AM

>To: Jason Neyers; Colin Liew

>Cc: ODG

>Subject: Re: Beneficial owners can sue for negligently-caused

>economic loss

>to property

>

>Jason's two points are intimately linked.

>The rights against rights theory says that the beneficiary's right is a

>right in or against the trustee's ownership of the asset. The

>beneficiary

>does not have any direct right against the tortfeasor, who

>owes a duty of

>care to the trustee.

>If however the trustee is joined as a party, then it becomes

>possible to

>adjudicate his right against the tortfeasor, and also his

>obligation to the

>beneficiary to account for the recovery to the beneficiary. If

>all parties

>are joined, then a court can make an order that short circuits the two

>claims.

>Lionel

>

>

>On 31-03-10 15:32 , "Jason Neyers" <jneyers@uwo.ca> wrote:

>

>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

>

>

>