Holyhead Marina Ltd v Farrer & Ors (Emma)

For the purposes of Merchant Shipping Act 1995, a marina formed by floating pontoons may constitute a “dock” where its pontoons fall within the ordinary meaning of statutory structures such as landing places, jetties or stages. The statutory right to limit liability is not confined to facilities serving commercial shipping.

The exception for personal conduct requires proof of the actual knowledge of the relevant controlling natural person that the very loss suffered would probably result. Mere recklessness, awareness of risk, or vicarious responsibility is insufficient. A defence alleging this exception must identify the controlling mind and plead the relevant conduct and state of mind with particularity.

Holyhead Marina Ltd sought a limitation decree under section 191 of the Merchant Shipping Act 1995 after Storm Emma damaged its marina and vessels moored there. The defendants resisted limitation, alleging that the marina was not a “dock”, that the right to limit was barred by the personal-act exception in article 4 of the Limitation Convention, and that the limit should be calculated by reference to a large ferry using Holyhead harbour.

The claimant applied to strike out those allegations and sought summary judgment. The court determined whether the marina was within the statutory definition of “dock”, whether the article 4 defence was adequately pleaded and had a real prospect of success, and what area was relevant for calculating the limitation tonnage.

1. Dock. The ordinary meaning of “dock” is an enclosed space with gates for admitting and retaining water. The statutory definition is, however, deliberately wide and non-exclusive. The floating pontoons were landing places because people returning from sea could land there, and they could also fairly be described as jetties or stages. They therefore fell within the extended statutory meaning of “dock”. The claimant was, in principle, entitled to limit liability under section 191 of the Merchant Shipping Act 1995. The contrary defence was struck out.
2. Article 4 exception. Section 191(4), incorporating article 4 of the Limitation Convention, requires proof that the loss resulted from a personal act or omission committed intentionally, or recklessly with actual knowledge that the very loss suffered would probably result. The relevant conduct must be that of the claimant’s alter ego or directing mind. Alleging that the claimant was “ultimately responsible” was insufficient because it did not identify the natural person whose conduct and state of mind were relied on.
3. The amended defence identified the directors said to be the claimant’s controlling minds and pleaded specific acts and omissions, recklessness, and knowledge that damage to the marina and vessels would probably result. Although the case appeared highly improbable, the necessary knowledge might be inferred from the facts and the defence had, just, a real prospect of success. It was therefore not struck out and summary judgment was refused.
4. Quantum. The relevant area under section 191(2) was the area over which the claimant discharged functions. The claimant had contractual functions concerning the marina and vessels using it, but no control or authority over the wider harbour or its ferry traffic. The limit was therefore not to be calculated by reference to the Stena Adventurer. That defence was struck out.
5. A conditional order requiring security for the claimant’s costs of defending the weak article 4 case was proportionate and justified. The parties were directed to agree the amount, form and time for security, failing which the defence would be struck out. Costs were provisionally apportioned two-thirds to the claimant on the standard basis, with the remaining one-third reserved.