Albazero, The (Albacruz)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE CAIRNS,LORD JUSTICE ROSKILL,LORD JUSTICE ORMROD |
| Judgment Date | 14 May 1975 |
| Judgment citation (vLex) | [1975] EWCA Civ J0514-1 |
| Docket Number | 1970 F. folio 505 |
| Court | Court of Appeal (Civil Division) |
| Date | 14 May 1975 |
[1975] EWCA Civ J0514-1
In The Supreme Court of Judicature
Court of Appeal
On Appeal from The High Court of Justice Queen's Bench Division Admiralty Court
Lord Justice Cairns
Lord Justice Roskill and
Lord Justice Ormrod
The Ship "Albazero"
MR. J. HOBHOUSE. Q. C. and MR. A. LONGMORE (instructed by Messrs, Clyde & Co., Solicitors, London) appeared on behalf of the Plaintiffs (Respondents).
MR. M. J. MUSTILL Q. C. and MR. J. G. GILMAN (instructed by Messrs. Ince & Co., Solicitors. London) appeared on behalf of the Defendants (Appellants)
This appeal involves a conflict between two legal principles — one of a broad and general character, the other of a special nature and of a comparatively narrow compass. The general principle is that in an action for damages for breach of contract the plaintiff can only recover such damages as he has actually suffered. The special rule is that a plaintiff who has made a contract with a ship owner under which goods are carried by sea can recover damages from the ship owner for the loss of or damage to the goods caused by the ship owner's breach of the contract, whether or not he has himself been damnified.
The broad principle is so fundamental to our law that nobody in this case has thought it necessary to cite authority for it. Nevertheless it is a principle which cannot be applied literally in all circumstances; a trustee can certainly sue for damages for breach of a contract which he has made in the course of executing the trust notwithstanding that the real sufferer from the breach is his cestui que trust and not himself; and an agent who has contracted in his own name for an undisclosed principal can sue for damages for breach of contract although the actual loss fell upon his principal. In such cases as these the measure of damages will be the actual detriment to the cestui que trust or principal and the trustee or agent will hold any damages recovered on behalf of the cestui que trust or principal.
The narrower rule is one which originated in the eighteenth century, was applied from time to time in the nineteenth century, has been treated as valid by learned authors of text-books for at least a century and a half and was recognised by a judge as distinguished in this field as Mr. Justice McNair in 1961. With one exception the cases seem to imply that the damages which can be recovered are not merely nominal but represent thefull value of the goods, if lost, or the diminution in their value if damaged. In most of the cases the relationship between the Plaintiff and the owner of the goods has been such that it could not be contended that the damages were recovered on behalf of the owner.
No theoretical basis for this rule has ever been laid down in any case before the present one or in any of the textbooks to which we have been referred. In the present case Mr. Justice Brandon considered that it might be founded on estoppel; that the ship owner is estopped from denying the title of the person who has contracted with him for the carriage of the goods. I find difficulty in accepting this view: if the contract of carriage is made with the consignor it may well be that the ship owner is estopped from denying that the consignor was entitled to the goods (on his own behalf or on behalf of a principal) at the time of shipment but I cannot see why he should be estopped from setting up a change of ownership during transit.
It was not, however, any part of the case presented by counsel for the plaintiffs, either in the court below or in this court, that the rule was grounded on an estoppel, lie relied on the authorities as they stand without looking behind them for a basis in legal theory, no described the rule as a pragmatic one, by which I understand him to mean that it is a convenient rule, which ensures that where there is a breach of the contract under which goods are carried by sea there will always be an easily identifiable person who can sue for any resulting loss of or damage to the goods. It is recognised that there may be another person who can sue so that there is a theoretical risk of double recovery but there is no indication in the reports that this has ever happened and in these days when the interests of all concerned with cargoes are almostalways covered by insurance the risk is negligible.
I have had the advantage of reading in draft the judgment about to be delivered by Lord Justice Roskill. He has analysed the authorities and commercial considerations in a manner which I could not hope to emulate. I agree with his reasoning and with his conclusion that it is still the law that a consignor can recover from a ship owner the value of goods lost by reason of a breach of the contract between the consignor and the ship-owner notwithstanding that the consignor had at the time of the loss neither the property in nor the right of possession of the goods and that the rule applies when the contract under which the goods are carried is a time charter.
If, contrary to my view, it were necessary for the plaintiffs to establish that at the time of the loss they were entitled to the property in the cargo or the right to possession of it then, for the reasons given by Lord Justice Roskill, I should hold that they were not so entitled.
In the result I consider that Hr. Justice Brandon was right in his conclusions and that the appeal must be dismissed.
This appeal by the defendant ship owners from a judgment of Mr. Justice Brandon dated 14th January, 1974 and at present only reported in (1974) 2 All England Reports 906, raises an important and difficult question relating to the liability of ship owners for the loss of or damage to goods carried in their vessels. The plaintiffs, Concord Petroleum Corporation, were the time charterers from the defendants of a vessel named the Albacruz under a five year time charter in the Shell Time B (1963) form as modified, dated 9th May, 1969 (Bundle B page 12). The defendants were the owners of two tank vessels, the Albacruz (the time chartered vessel) and the Albazero. The latter vessel was thus the sister ship of the former and was arrested by the plaintiffs in respect of theirclaim against the defendants arising out of the total loss of the Albacruz together with her cargo of crude oil in the North Atlantic on 14th January, 1970 whilst trading under that time charter.
For case of reference in this judgment I shall refer to the time charterers as the plaintiffs, the ship owners as the defendants and the Albacruz as the vessel. The plaintiffs sued the defendants claiming the full value of the cargo so totally lost. Their writ in rem was issued on 15th December 1970 less than twelve months after that loss. As between the plaintiffs and the defendants no question of any time limit for the commencement of proceedings arises.
Stated briefly, the plaintiffs' contention was that the defendants were in breach of that time charter, that that breach caused the total loss of the cargo, that it was irrelevant whether or not the plaintiffs were at the time of loss the owners of the cargo or the persons immediately entitled to its possession or whether or not at that time title to or right to possession of or risk had passed to another and that accordingly the plaintiffs were entitled to recover the full value of that cargo from the defendants, alternatively the plaintiffs contended that if contrary to their main contention it was relevant that they should be the owners of the cargo or the persons immediately entitled to its possession at the time of loss, neither the legal title nor the right to possession had passed from them at the date of loss.
Stated equally briefly, the defendants' contention was that assuming (but only for the purposes of the present argument) that there had been a relevant breach of the time charter which caused the loss, the plaintiffs could not recover the full value of the cargo from the defendants because they were not the owners that cargo nor were they the persons immediatelyentitled to possession at the date of loss nor was the cargo then at their risk but were entitled to nominal damages only.
Thus the crucial issue arises: where there is an express contract (in this case the time charter) between a plaintiff and a carrier of goods by sea, where under the carrier has agreed with the plaintiff to carry goods and the carrier in breach of that express contract causes loss of or damage to those goods, can that plaintiff recover the full value of the goods so lost or damaged notwithstanding that the property, the immediate right to possession and also the risk is with another? It was not disputed in argument before us that if the property or the right to possession were in the plaintiff in such circumstances, the plaintiff could recover the full value of the cargo.
The learned judge ordered preliminary issues to be tried: Bundle A page 3 and 4. Pleadings were duly delivered in those preliminary issues in order to define them. In a most careful and lucid judgment; the learned judge held that neither the property nor the immediate right to possession was in the plaintiffs at the time of loss but notwithstanding that fact, the plaintiffs were as a matter of law entitled to recover the full value of the cargo from the defendants. It is from that decision that the defendants appeal to this Court. The defendants by a respondents' notice challenged the learned judge's conclusion that neither the property not the immediate right to possession was vested in them at the time of loss.
In his judgment the learned judge so fully related the relevant facts and cited the relevant extracts from the contractual...
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