Lloyd's Maritime and Commercial Law Quarterly
NEGLIGENCE AND EXCLUSION CLAUSES AGAIN
N. E. Palmer
Head of Department of Law, University of Reading.
Hard on the heels of Ailsa Craig Fishing Co. Ltd. v. Malvern Fishing Co. Ltd.1 comes another important decision on the contractual avoidance of liability for negligence. Whereas the clause in Ailsa Craig was one of limitation, that in The Raphael
2 purported to exclude liability completely. It appeared (as cl. 2) in a contract for the restowing of a derrick on board the appellants’ ship, and provided that:
“Except as stated herein we [the respondent contractors] shall not be liable for any damage … suffered by you … and which may arise from or be in any way connected with any act or omission of any person or corporation employed by us or by any sub-contractors or engaged in any capacity herewith”.
Part of the derrick fell on to the deck during restowing, damaging the vessel. The respondent contractors relied on the clause. Preliminary issues were ordered to be tried as to whether (inter alia) their standard terms were incorporated and excluded liability for negligence. Robert Goff, J., held against the appellants on both points and their appeal (on the construction question alone) was dismissed by the Court of Appeal.
The starting point for the court was the three-tier test formulated for the exclusion of negligence liability by Lord Morton of Henryton in Canada Steamship Lines Ltd. v. R.
3 Lord Morton summarized the court’s duty as follows:
“(1) If the clause contains language which expressly exempts the … proferens … from the consequence of the negligence of his own servants, effect must be given to that provision … (2) If there is no express reference to negligence, the Court must consider whether the words used are wide enough, in their ordinary meaning, to cover negligence on the part of the servants of the proferens. If a doubt arises at this point, it must be resolved against the proferens … (3) If the words used are wide enough for the above purpose, the Court must then consider whether the ‘head of damage may be based on some ground other than that of negligence.’ … The ‘other ground’ must not be so fanciful or remote that the proferens cannot be supposed to have desired protection against it, but subject to this qualification … the existence of a possible head of damage other than that of negligence is fatal to the proferens even if the words used are prima facie wide enough to cover negligence on the part of his servants”.
557