Case No: 2000 Folio 1418
Neutral Citation Number: [2002] EWHC 1678 Comm
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice
Strand. London. WC2A 2LL

Date: 7 August 2002

Before

NIGEL TEARE QC
SITTING AS A JUDGE OF THE QUEEN’S BENCH DIVISION

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Between:

HDS VISCAYA AS
Claimant
‑and –

BRYGGEN SHIPPING AND TRADING AS
Defendant

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Julian Kenny (instructed by Clyde and Co.) for the Claimant
Michael Ashcroft (instructed by Ince and Co.) for the Defendant

Hearing dates: 9-10 July 2002
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Judgment

Nigel Teare QC:

1.	This is a claim by the owners of the chemical tanker VISCAYA (the Claimant) for US$98,045.61 as hire under a time charterparty on the Shelltime 4 form dated 24 February 2000. The claim is disputed because the charterers (the Defendant) say that the vessel was not properly cleaned for a cargo of methanol and as a result a sub-fixture was lost with the result that the charterers have suffered losses in the sum of US$ 164,684.

2.	There is now no dispute that but for an argument based on estoppel the method of cleaning adopted by the master was improper and was a breach of the charterparty. There was a failure to wash the tanks with fresh water.

3.	The alleged estoppel arises in this way. In late April 2000 the charterers provisionally fixed the vessel to load a cargo of methanol at Jose, Venezuela with a laycan of 6-8 May. The vessel was carrying a cargo of MTBE which it would discharge at Amuay Bay and Punta Cordon between 25 and 29 April. Thereafter she was to lift a cargo of orthoxylene and cyclohexane at Guyama, Puerto Rico with a laycan of 2-3 May. On 25 April Captain Landoey, the charterers’ operations manager, telexed Captain Hoyem, the vessel’s master, in connection with the cargo of methanol and asked him to “revert with chems/methanol you require for tank preparation. please further confirm you have filters etc for di water production on board.” Later that day a telephone conversation took place between Captain Landoey and Captain Hoyem. The case of the owners is that in the course of that conversation Captain Landoey represented that it would be sufficient for the methanol cargo to clean the tanks on VISCAYA by steaming them and spraying them with de-ionised water and that the master relied upon that representation by cleaning the tanks using that method. It is therefore said that the charterers are estopped from alleging that that method was a breach of the charterparty.

4.	There is a dispute as to what was said in the conversation. Captain Hoyem was called to give oral evidence. He is the senior master in his company but had had little, if any, previous experience of carrying methanol after a cargo of MTBE. He said that on 25 April 2000 he telephoned Captain Landoey at the charterers. The conversation lasted about 5-6 minutes. He said that he told Captain Landoey that he had very little experience of carrying methanol and was advised by Captain Landoey that after a cargo of MTBE it should not be a big problem. Captain Landoey referred to another vessel which had loaded methanol after MTBE where the tanks had been steamed and washed with de-ionised water. Captain Landoey said that the tanks on that occasion had been passed as fit. Captain Hoyem had himself heard stories as to how difficult it was to get tanks passed fit for methanol but he did not mention that to Captain Landoey. He said that he would do his best. It was then agreed that 20 drums of 200 litres of de-ionised water would be ordered. Captain Hoyem said that he regarded Captain Landoey as having given advice as to how to clean the tanks for methanol. He did not regard Captain Landoey as having given an instruction or an order. Indeed, he added that Captain Landoey was always careful to avoid saying something which could be understood as an order or as an instruction. However, he was strengthened in his belief that he had received advice as to how to clean the tanks for methanol because he and Captain Landoey agreed to order de-ionised water. After the conversation Captain Hoyem consulted his copy of Dr. Verwey’s guide to the carriage of chemical cargoes. He noted that it recommended that tanks be fresh water washed before carrying methanol. He discussed this advice with his chief officer who said that fresh water at Amuay Bay/Punta Cardo had a very high chloride content which meant that it was unsuitable and that in any event there was no spare tank on board to take the fresh water. The question of using fresh water was thus rendered irrelevant. He was not concerned that he was not following the guidelines of Dr. Verwey. Because of the advice he had received from Captain Landoey he resolved to clean by steam and de-ionised water. He accepted that had he been able to get suitable fresh water and had he had space for it on board he would have cleaned using fresh water as suggested by Dr.Verwey.

5.	Captain Landoey was also called to give oral evidence. He had more difficulty in recollecting what was said in the conversation than Captain Hoyem. In his first written statement dated 19 June 2002 (which stood as his evidence in chief) he said that on 25 April 2000 he had said to Captain Hoyem that, although he would have to get the vessel ready to load cyclohexane and orthoxylene, it was important that he also focussed his attention on the methanol cargo to be loaded. He said that he discussed the manner in which he had known previous vessels cleaned for cyclohexane and orthoxylene (by flushing the bottom, pumps, lines and suction levels on circulation with fresh water and then ventilating) but that he had not discussed the cleaning process for methanol at all. However, in a second statement dated 8 July 2002 (which also stood as his evidence in chief) he added that as a passing comment he had mentioned an occasion when a vessel had loaded methanol after it had been cleaned in the manner in which he said previous vessels had been cleaned for cyclohexane and orthoxylene. He was certain that on 25 April Captain Hoyem did not tell him that he was inexperienced in preparing a vessel to load methanol.

6.	In order to resolve this conflict of recollection it is necessary to examine the near-contemporaneous documents. On 8 May 2000, after the problems with cleaning the tanks had caused the charterers to issue an off-hire notice, Captain Hoyem was asked by his managers what had happened prior to loading. On the same day Captain Hoyem replied and said this:

“Bryggen – Bjoem Landoey ‑ advised that steaming for 3 hours and spraying with DI-water would be sufficient for cleaning to methanol after last cargo MTBE. He said that they did that with another ship before loading methanol in Canada, and they passed without problems … DI water was purchased in Puerto Rico, and we did as he had advised.”

7.	On 10 May Captain Hoyem prepared a statement of facts saying much the same. These near-contemporaneous documents provide strong corroboration for the evidence of Captain Hoyem. There is no similar support for the evidence of Captain Landoey. On 10 May the charterers’ brokers, having been informed by the owners’ managers on 9 May that Captain Landoey had given cleaning orders that steaming and spraying with DI water was suitable for cleaning for methanol, replied, saying that they declined the owners’ attempt to make “our ‘advice’ to your master turn into being ‘cleaning orders’”. Although Captain Landoey did not confirm when asked in cross examination whether the charterers’ brokers had consulted with him before sending that reply it is very probable that they did. If they did then it is further support for Captain Hoyem’s evidence because the content of the advice is not disputed.

8.	I therefore prefer the evidence of Captain Hoyem as to the substance of the conversation and find that Captain Landoey informed Captain Hoyem that he had known of a ship in Canada which had been steamed and then sprayed with de-ionised water and had been passed for loading methanol after a cargo of MTBE. However, I do not accept that during the telephone conversation Captain Hoyem told Captain Landoey that he had very little experience of loading methanol. Neither in his report to his managers nor in his statement of facts did he say that he told him that. If he had done so I consider that he would have reported doing so since it would have been an important feature of the conversation having regard to what happened afterwards. I further find that Captain Landoey did not instruct or order Captain Hoyem as to how to clean the vessel for the carriage of methanol and that Captain Hoyem did not understand Captain Landoey to be doing so. Captain Hoyem regarded the “story” he had been told as “advice”. Although Captain Hoyem was aware that it could be difficult to prepare tanks for methanol and would have used fresh water as recommended by Dr.Verwey had he thought suitable fresh water was available and that there was space to store it on board, he relied upon the story he had been told in the sense that he decided to clean the tanks in the manner described in the story because it had been mentioned by Captain Landoey and because he was of the view that the method recommended by Dr.Verwey, namely, using fresh water, was not possible.

9.	It is accepted by the owners that their case on estoppel cannot succeed unless the effect of what Captain Landoey said was a representation that steaming and spraying with distilled water was a proper and sufficient method of cleaning the tanks, that Captain Hoyem relied upon that representation, that that advice or representation was intended to be relied upon and that in all the circumstances it was reasonable for Captain Hoyem to rely upon it.

10.	These several requirements overlap to a large extent. It was submitted that they were all satisfied. Reliance was placed in particular on the context of the conversation, the fact that Captain Landoey did not qualify what he said and that what he said was immediately acted upon the Court. The context of the conversation was that Captain Landoey had telexed Captain Hoyem asking him what chemicals he required for tank preparation and had enquired what filters were available on board for the production of de-ionised water. It was submitted that the conversation which followed this request was clearly the time at which the cleaning strategy was to be decided. At the end of the conversation, having decided upon the strategy, the required materials, namely a quantity of de-ionised water, were agreed to be purchased.

11.	I propose to consider whether the tests set out in Halsbury’s Laws Vol. 16 at para. 1042 and 1046 are satisfied:

“1042. To found an estoppel a representation must be clear and unambiguous; not necessarily susceptible of only one interpretation, but such as will be reasonably understood by the person to whom it is made in the sense contended for ...

1046. It is not necessary that the representation should be false to the knowledge of the party making it, provided that

(i)   it is intended to be acted upon in the manner in which it was acted upon; or

(ii)   the person who makes it so conducts himself that a reasonable person would take the representation to be true and believe that it was meant that he should act upon it in that manner.”

12.	I consider that Captain Hoyem understood that Captain Landoey was representing to him that in the past the tanks of another vessel, having been steamed and sprayed with distilled water, passed an inspection of fitness to load methanol. I do not consider that what Captain Landoey said could reasonably have been understood by Captain Hoyem as a representation that the tanks on board VISCAYA could be sufficiently and properly cleaned by that method for the carriage of methanol. Nor do I consider that Captain Landoey intended or that he would have been regarded by a reasonable person as intending that Captain Hoyem should rely upon what he said as a clear and unambiguous statement that the tanks on board VISCAYA could be sufficiently and properly cleaned by that method for the carriage of methanol. As it was put by counsel on behalf of the charterers Captain Landoey was at the very most suggesting a method which Captain Hoyem might consider. My reasons for reaching that conclusion are as follows:

i)   Captain Landoey did not purport to give advice but to tell a story. This suggests an air of informality not indicative of formal advice as to a sufficient and proper method of cleaning the tanks of VISCAYA for the carriage of methanol.

ii)   The history of dealings between Captain Hoyem and Captain Landoey was such that Captain Landoey was always careful not to give orders or instructions to Captain Hoyem. This suggests that if formal advice was to be given it would be couched in formal language.

iii)   Captain Hoyem had himself heard stories as to how difficult it was to get tanks passed fit for methanol but he did not mention that to Captain Landoey. If he had understood Captain Landoey to be saying that steaming and spraying with distilled water was a sufficient and proper method for cleaning the tanks of VISCAYA it seems likely that he would have raised with him the stories he had heard and sought formal confirmation from him that such method would be appropriate for VISCAYA.

iv)   There was no discussion as to whether the tanks on the vessel in Canada were coated or stainless steel tanks or what previous cargoes had been carried on that vessel. I would have expected Captain Hoyem to raise such matters with Captain Landoey if he understood the story of the Canadian vessel as being formal advice that steaming and spraying with distilled water was an appropriate method for preparing the tanks of VISCAYA for the carriage of methanol. Captain Hoyem accepted that cleaning stainless steel tanks is easier than cleaning coated tanks. Previous cargoes must obviously have an impact on what is an appropriate cleaning method.

v)   The fact that after the conversation Captain Hoyem consulted Dr Verwey’s guide and would have followed it had he not thought that suitable fresh water could not be obtained or stored on board sits unhappily with the suggestion that the cleaning strategy had been decided upon in the telephone conversation following clear and unambiguous advice from Captain Landoey.

13.	I accept that the context in which the conversation took place suggested that the conversation was of importance to both parties. They were to discuss what chemicals Captain Hoyem required. It does not follow that in such a conversation Captain Landoey would advise as to what was a suitable and appropriate method of cleaning the tanks on board VISCAYA, though he might do so. I consider, for the reasons I have given, that he did not do so. Equally, I accept that at the end of the conversation it was agreed that a quantity of de-ionised water would be ordered. However, whilst that is consistent with the suggestion that Captain Landoey advised that steaming and spraying with distilled water was a sufficient and proper method of cleaning the tanks on board VISCAYA it is also consistent with the suggestion that Captain Landoey left the decision as to how to clean the tanks to Captain Hoyem but would obviously co-operate in ordering such chemicals as Captain Hoyem required.

14. 	For the reasons which I have given I do not consider that the owners can establish  their defence of estoppel. They are therefore liable in damages for breach of the charterparty.

QUANTUM

15.	It is agreed that in the event that the Defendants succeed on their counterclaim, as they have, they are entitled to US$93,051.51 plus interest and costs.