The plaintiffs were the owners of a motor tanker which ran aground on the edge of a reef and oil escaped into the sea and was washed into the waters of Singapore. The first defendants and agents appointed by them therefore took measures to remove the oil to prevent and reduce the damage caused by oil pollution. The first defendants incurred expenses in so doing and are seeking to recover them under s 14 of the Prevention of Pollution of the Sea Act 1971, as amended by the 1981 amendment to the Act (collectively 'the PPSA 1971-81'). The oil pollution also caused damage and loss to the other defendants.
The dispute between the plaintiffs and the first defendants turns on the meaning of s 18 of the Merchant Shipping (Oil Pollution) Act 1981 ('the MSOPA') and its effect on s 14 of the PPSA. The issue as stated to the court as a preliminary point of law therefore concerned the liability of the plaintiffs to the first defendants.
The Court held that the liability of the plaintiffs to the defendants was unlimited: There is, in the context of oil pollution damage to the environment, good logic and reason for the law to limit the liability of owners of oil tankers but not that of non-oil tankers for oil pollution damage, precisely on the ground that liability of the former is potentially much larger than that of the latter group. If the oil tanker owners were faced with unlimited liability, they would become uninsurable, which would result in higher costs for consumers.
There was a conclusive argument against construing the word 'liability' to include a statutory liability in relation to the first defendants. Under s 18, the tortfeasor is only liable for the costs of preventive measures taken by another person if he incurs or might incur a liability but for those measures. If the word 'liability' were to include a statutory duty, then it must follow that the tortfeasor has in any case already incurred a statutory liability to the person who has taken the preventive measures. Therefore the word 'liability' is not intended to refer to liability under s 14 of the PPSA.
The court accordingly held that the liability of the plaintiffs to the first defendants for the costs incurred by them in reasonably taking measures to prevent or reduce oil pollution damage is recoverable in full within s 14 of the PPSA 1971-1981 and such liability is not affected by s 18of the MSOPA 1981.