Admiralty Commissioners v SS Susquehanna

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeViscount Dunedin,Lord Sumner,Lord Phillimore,Lord Carson,Lord Blanesburgh,.
Judgment Date18 June 1926
Judgment citation (vLex)[1926] UKHL J0618-1
Date18 June 1926

[1926] UKHL J0618-1

House of Lords

Viscount Dunedin.

Lord Sumner.

Lord Phillimore.

Lord Carson.

Lord Blanesburgh.

The Commissioners for Executing the Office of the Lord High Admiral of the United Kingdom
and
The Owners of the SS. "Susquehanna."

After hearing Counsel, as well on Friday the 16th, as on Monday the 19th days of April last, upon the Petition and Appeal of the Commissioners for Executing the Office of Lord High Admiral of the United Kingdom, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 27th of July 1925, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied, or altered, and that the Petitioners might have the relief prayed for in the Appeal, or such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of the Owners of the Steamship "Susquehanna," lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 27th day of July 1925, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.

Viscount Dunedin .

My Lords,

1

The "Prestol" was an oil tank steamer belonging to the Admiralty, and was being used to supply the needs of the oil-driven ships of the British Navy which were stationed in the Baltic. Whilst on this service she was injured in collision with a steamer called the "Susquehanna" near Dantzig. It was admitted that the "Susquehanna" was to blame for the collision. In consequence of the injury the "Prestol" had to be sent home to Rosyth. The repairs occupied 32 days. The place of the "Prestol" was filled by the "Belgol," another oil tank steamer belonging to the Admiralty, which, for that purpose, was withdrawn from her service on the Clyde. The owners of the "Susquehanna" admitted liability to pay (1) for the necessary repairs, (2) for the pay and victualling of the crew of the "Prestol" during the period of repairs, and (3) for survey and office expenses. But the Commissioners of the Admiralty further claimed a sum of £225 a day for the period of 32 days. This was not admitted by the owners of the "Susquehanna," and the present action is as to that sum. The matter was in the ordinary course remitted to the Registrar and Merchants; they, having regard to the fact that if the "Prestol" had been let on a time charter she would have earned a sum slightly less than £225 a day and also to the fact that she was in dock, where she was secure, allowed an overhead sum of £6,400 as damages for the detention of the "Prestol," that is to say, at the rate of £200 a day. The facts on which they based their judgment were these: There is a good commercial demand for oil tank ships, and they held that if the Admiralty had gone into the market and offered an oil tanker of the class of the "Belgol" for hire they would have got it taken on these terms. On appeal to the President, that learned Judge referred the case back to the Registrar and Merchants. He held that the naked fact that a vessel of that sort could, if let out, have earned the money was not per se a sufficient reason for finding the defendants liable in that sum but that various other elements fell to be considered. On appeal the Court of Appeal unanimously upheld the judgment of the learned President and the appeal has now been taken by the Admiralty to your Lordships' House. The actual question for decision is therefore only whether the judgment referring back the case to the Registrar for further consideration should stand, or whether the Registrar's award of £200 a day should be confirmed simpliciter; but inasmuch as the decision involves the general question of the proper method of calculating damages in such cases, it will, I think, be right that your Lordships should express your opinion on the principles on which such cases should be decided.

2

As a preliminary to any opinion which I would wish to give it will, I think, be well to see exactly how the authorities stand which have received the imprimatur of this House and are consequently binding upon us to-day. It would not, I think, serve any useful purpose to cite other decisions where the ground has been covered by the decisions in this House. The first case that need be quoted is the " Greta Holme," 1897, App. Cas. 596. That case laid down that damages were due for the period during which a ship was rendered useless, even though the ship was not a ship of the kind which could secure commercial employment and earn consequent reward. That, and that alone, was the true point of the case. It is true that a sum was then fixed, but it was fixed by your Lordships much as a jury would fix it. The "Greta Holme" was a dredger. Her services were lost during the period which was occupied in her repair. She could not be, and was not, replaced by any other dredger. There was evidence that if anyone had had a dredger of the same sort he could have let it out at the rate of £100 a day. The dredger was disabled for 15 weeks. Their Lordships, really acting as a jury, assessed the damages at £500.

3

The next case was the " Mediana," 1900, App. Cas. 113. The " Mediana" was a lightship used by the Mersey Docks and Harbour Board for the lighting of the Mersey. They had need of four lightships, but they kept six; one of the extra ones, namely, the fifth, was used when a periodical overhaul of each of the four was undertaken. The other, or sixth, was kept as an extra one for contingencies. The result was that one being injured, No. 6 was brought into play and the Mersey Board were put to no extra expense. It was not a case like that of the " Greta Holme," of the work of the authority being partly suspended. The Board claimed £4 4 s. a day for the deprivation of the services of the lightship which had been put hors de combat by a collision for which the defendants were responsible. Phillimore, J., before whom the action depended, held that he was bound by four authorities in Admiralty to find nothing due. This was admittedly so unless the " Greta Holme" had displaced the earlier authorities. He held that it did not, looking to the difference of circumstances as above described, but his judgment was reversed by the Court of Appeal and that judgment was upheld, by this House. They held that the " Greta Holme" did apply. The sum awarded, however, was taken as admitted, so that there was no discussion in either the Court of Appeal or in this House on the precise principles upon which the sum awarded was fixed. It was taken as if it had been found by a jury. Nevertheless, Halsbury, L.C., gave a long opinion on the general question of the ascertainment of damages. I analyse his opinion as follows: Small damages are not synonymous with nominal damages; damages which are not nominal may be either small or large; no exact rules for the valuation of damages can be given; special damage must be specially proved, but general damages only admit of such evidence as is in the circumstances available, and the amount becomes a jury question; depriving a person of the use of his chattel is a ground for real and not for nominal damages. I am not here concerned with that part of his judgment which explains and distinguishes the judgment in the " City of Pekin."

4

Then came the case of the " Marpessa" 1907, App. Cas. 241. This was the case of a dredger employed by a harbour board, and the point of dispute was what allowance was to be made for the days during which, owing to the necessary repairs due to the collision, the dredger was hors de combat. It was not replaced during that time by any other dredger, and no direct pecuniary loss could be proved. The claim as made was for £102 a day, which was based on a theoretical calculation which first of all took what had been paid in the past for another vessel which had been hired, and, adding the expenses of running, brought out an owner's profit of 27 per cent. after allowing 7 per cent. for depreciation. Then, applying the same method to the dredger in question and taking the original cost as the sum on which depreciation was to be calculated, the sum of £102 per day was arrived at.

5

The Registrar refused to accept this method, and dealt with the claim in much the same way as a jury would have done. He reduced the amount to £35 a day. In doing so he made his own calculations, in particular allowing 7 per cent. to cover establishment charges, owner's profit and general damage, and calculating that 7 per cent. not on the original value but on the depreciated value of the vessel. His award was upheld by the President, by the Court of Appeal and by this House, Loreburn, L.C., pointing out that in some respects the judgment was wrong, e.g., in calculating for owner's profit; in others inadequate, e.g., in taking the upkeep as what it was in dock instead of what it was on service, but with the Registrar's decision, as a jury finding, he would not interfere, as he did not see that it was based on principles that were absolutely wrong.

6

My Lords, I think that the result of the decisions may be stated in the following propositions:—

(1) There is no difference in this matter between the position in Admiralty law and that of the Common law, and the Common law says that the damages due either for breach of contract or for...

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