Robertson & Anor v Bembridge Harbour Improvements Company Ltd (MY 'Tangent')

A contractual obligation to take all reasonable steps to maintain harbour facilities in reasonably good working order may require repair of known and increasing corrosion where there is a patent risk that it will interfere with the facilities’ proper operation. A failure to keep appropriate monitoring records may prevent the contracting party obtaining the benefit of evidential doubt.

Where the parties advance competing causal mechanisms and no third mechanism is suggested, the court may choose between them on the balance of probabilities. Where damaged property is sold without repairs, the normal measure of loss is the difference between its market value before and after the damage, rather than unrepaired repair costs.

The claimants owned the motor yacht Tangent, moored at the defendant’s marina. The vessel sank overnight after a low tide. The claimants alleged that a known corrosion hole in a pontoon pile caught a rubbing block or fixing bolt, holding down the pontoon as the tide rose and causing water ingress. The defendant alleged that defective mooring lines and fenders caused the casualty and brought a counterclaim for the resulting recovery costs.

The court had to determine whether the defendant breached the Mooring Licence, which causal mechanism was more likely, whether the counterclaim was made out, and the proper measure and amount of the claimants’ loss.

1. Liability. The defendant breached its contractual obligation to take all reasonable steps to maintain the marina facilities in reasonably good working order. It knew of significant corrosion holes in the pile structures and of the risk that a guide block could snag. Although postponement might have been reasonable when the holes were smaller, it was not reasonable to defer repair during the winter of 2016/2017 when the relevant hole was at least 500 mm long and 110 mm wide. The relevant obligation concerned maintenance, not merely monitoring. [2021] EWHC 1025 (Comm), paras 36–49.
2. The defendant had not taken all reasonable steps to monitor the holes. Its failure to keep appropriate records meant that it was not entitled to the benefit of assumptions about their size or progression. The court relied by analogy on UBS AG v Kommunal Wasserwerke Leipzig [2014] EWHC 3615 (Comm). [2021] EWHC 1025 (Comm), paras 38–40.
3. Causation. Since neither party suggested a third mechanism, the court had to choose between the competing explanations unless both were so unlikely that no finding could be made. The claimants’ explanation was significantly more likely on the evidence, including the corrosion-hole damage, the likely width and wear of the rubbing block, the tidal evidence, and the weaknesses in the defendant’s complex fender theory. Causation was established on the balance of probabilities. [2021] EWHC 1025 (Comm), paras 50–52 and 56–101.
4. The authorities on latitude in taking reasonable steps and on the distinction between reasonable endeavours and all reasonable endeavours did not determine the case because they concerned different wording and the decision did not turn on fine linguistic distinctions. The Elli and the Frixos and Rhodia International Holdings Ltd v Huntsman International LLC were therefore only considered in that limited context. [2021] EWHC 1025 (Comm), para 48.
5. Loss. Because the vessel was sold damaged and no repairs were carried out, the proper measure of the principal loss was the difference between its market value immediately before and after the casualty. Repair costs could be evidentially relevant but could not themselves be claimed. The pleading was sufficient to raise a loss-of-value claim. Involnert Management v Aprilgrange did not assist because its discussion of insured value concerned the absence of a practical alternative, not proof that insured value necessarily equalled market value. [2021] EWHC 1025 (Comm), paras 121–136.
6. The claimants recovered £95,000 for diminution in value and £23,888.10 for salvage and related costs. Loss of use of the mooring was rejected as unsupported and a sunk cost. The claim was allowed and the counterclaim dismissed. Damages were awarded in the sum of £118,888.10. [2021] EWHC 1025 (Comm), paras 137–140.