Braganza v BP Shipping Ltd & Anor

Where a contractual power permits one party to form an opinion affecting another’s rights, the opinion must be formed honestly, in good faith and in a rational and reasonable manner. The decision-maker must take account of relevant matters, disregard irrelevant matters, and be properly directed in law. Where the power operates as an exception to a contractual liability, the party relying on the exception bears the burden of establishing the necessary reasonable opinion.

In assessing an unexplained death, the claimant must prove the alleged accident on the balance of probabilities. The court need not choose between competing possibilities where neither is more probable than the other. A finding of suicide requires evidence sufficiently cogent and proportionate to the seriousness of that finding.

The claimant, the widow of a chief engineer who disappeared from an oil tanker in the mid-North Atlantic, brought claims in tort under the Fatal Accidents Act 1976 and in contract for death benefits under his employment agreement.

The defendants alleged that he had committed suicide. The contractual exclusion applied where, in the defendants’ opinion, death resulted from the officer’s wilful act, default or misconduct. The central issues were whether the claimant had proved an accidental fall and whether the defendants had reasonably formed the opinion that the death resulted from suicide.

1. The tort claim failed. The evidence established real possibilities of both accidental fall and suicide, but neither was shown to be more likely than the other. The court therefore could not find the cause of death on the balance of probabilities. It was impermissible to select the least improbable explanation.

2. A finding of suicide required evidence of sufficient cogency proportionate to the seriousness of the finding. The claimant had not proved accidental death, and the tort issues of breach and causation were consequently unnecessary to the result.

3. The contractual phrase “wilful act” naturally included suicide, which is a deliberate act with intended consequences. The absence of an express reference to suicide did not require a narrower construction. In any event, disabling oneself from performing promised contractual services would be blameworthy in the relevant sense.

4. BP’s contractual opinion had to be honest, made in good faith, and formed in a “Wednesbury” reasonable manner. BP had to consider relevant matters, exclude irrelevant matters, act rationally, and be properly directed in law. Because clause 7.6.3 operated as an exception to the liability to pay death benefits, BP bore the burden of showing that its opinion was reasonable.

5. BP’s investigation failed to take into account the real possibility that the deceased had gone on deck to assess the weather for planned engineering work. That was relevant evidence supporting an accidental fall. BP was therefore not properly directed and had failed to take a relevant matter into account. Its opinion was unreasonable, so the contractual exclusion did not apply.

6. The contractual claim succeeded. The claimant was awarded $230,265 with interest. Quantum in the tort claim was not assessed.