Pilgrims Management Company Ltd v Birlem Limited

A fuel-delivery contractor may rely on assurances from an ostensibly competent professional managing agent about the condition and ullage of an oil tank, particularly in a commercial setting. A remote delivery may be made where the driver checks that the external overfill alarm is functioning and responds promptly when it sounds. Industry guidance does not replace the common-law standard of reasonable skill and care and must be applied in context. A claimant must prove both breach and causation. Approximate tank capacity, without evidence that the quantity delivered exceeded the actual capacity or ullage, does not establish an overspill or negligence.

The claimant, a freehold management company, sought damages for alleged oil contamination after the defendant delivered fuel to an external fill point serving an oil tank at residential premises. The claim was pleaded in contract and tort and alleged that the defendant should have inspected the tank, checked its capacity and ullage, or declined to deliver.

The defendant contended that it had acted with reasonable skill and care, that its driver had tested and responded to the overfill alarm, and that a later attempted delivery by another supplier could have caused the spill. The central issues were breach, causation and, if necessary, quantum.

1. Outcome. The claim was dismissed. The claimant failed to establish breach or causation. The contractual and tortious claims gave rise to no different result.
2. Standard for delivery. The experts agreed that an oil delivery required confidence that the tank and equipment were suitable, that sufficient ullage existed, and that suitable safety devices were installed. In a commercial setting, a driver may rely on assurances from an ostensibly competent professional managing agent concerning the first two matters. The driver may rely on a functioning overfill alarm as the relevant safety device, provided it is checked and acted upon promptly (paras [49]-[53], [62], [67]).
3. Application. The managing agent was an ostensibly competent professional. The driver was therefore entitled to rely on its information that the tank was empty and that 6,000 litres were required, despite not inspecting the tank internally. He tested the external alarm and stopped delivery when it sounded. The defendant was not required to obtain written consent before proceeding (para [66]).
4. Industry guidance. The FPS Guidelines for Safer Deliveries were not applicable as a set of prescriptive flowcharts in the circumstances. They illustrated sensible precautions but were neither a substitute for nor particulars of the common-law duty (paras [55]-[61]).
5. Causation. The claimant did not prove that the defendant’s delivery caused an overspill. The defendant delivered 4,523 litres, while the estimated tank capacity was 4,546 litres. The evidence also supported a realistic possibility that a later delivery caused the relevant spill. Quantum therefore did not arise, although the evidence would in any event have been insufficient to separate damage from the 2014 and 2015 spills (paras [40], [68]-[76]).