Candlewood Navigation Corporation Ltd v Mitsui O.S.K. Lines Ltd (Ibaraki Maru, Mineral Transporter)
| Jurisdiction | UK Non-devolved |
| Judgment Date | 1985 |
| Date | 1985 |
| Year | 1985 |
| Court | Privy Council |
Negligence - Duty of care to whom? - Time charterer - Defendant's vessel negligently colliding with vessel subject of bareboat charter with time charter back to vessel's owner - Whether economic loss recoverable by time charterer - Damages - Remoteness - Foreseeability - Collision between two vessels - Temporary repairs delayed by union ban - Ban in support of political rather than industrial objectives - Whether union ban foreseeable - Whether in quantifying damages due to bareboat charterer days lost through union ban to be included - Ships' Names - Ibaraki Maru - Mineral Transporter
By a bareboat charter the first plaintiff owner let the Ibaraki Maru to the second plaintiff and by a time charter of the same date the second plaintiff let it back to the first plaintiff. Under the bareboat charter the bareboat charterer was liable for the cost of repairs occasioned by a collision, and under the time charter the daily hire payable by the time charterer to the bareboat charterer was reduced while the vessel was undergoing repairs. While the vessel was at anchor off Port Kembla, New South Wales, the Mineral Transporter owned by the defendant negligently collided with it causing damage. Temporary repairs to the Ibaraki Maru were delayed by 32.79 days by a union ban in support of its campaign to persuade foreign vessels trading regularly to Australia to have repair and maintenance work done in Australia. Final repairs were effected in Japan. On the plaintiffs' claim for damages for negligence against the defendant in the Supreme Court of New South Wales Admiralty Division, Yeldham J. held that the time charterer was entitled to recover the amount of hire paid whilst the vessel was not operational and the profits it lost during that period, and that the bareboat charterer was entitled to recover the total cost of repairs and the amount by which the hire had been reduced, and in quantifying the damages the days lost by reason of the union ban should be included.
On the defendant's appeal to the Judicial Committee: —
Held, allowing the appeal in part, (1) that it was well established at common law that if a wrong was done to a chattel a person who merely had a contractual right in relation to the chattel and not a proprietary or possessory right could not bring an action against the wrongdoer for inJury to his contractual right, and in particular that a time charterer could not recover damages for pecuniary loss caused by damage to the chartered vessel by a third party; that the common law limitation should be applied because a limit had to be imposed upon the liability of a wrongdoer towards those suffering economic loss in consequence of his negligence; and that, since the first plaintiff's claim was exclusively for economic loss suffered as time charterer and not as owner of the damaged vessel, the first plaintiff was not entitled to recover from the defendant the hire paid to the bareboat charterer and loss of profits while the vessel was not operational (post, pp. 385C–E, 394D–E, F–G, 395A).
(2) That it was not practicable to distinguish between industrial and political strikes and therefore the days lost as a result of the union ban were foreseeable as a possible consequence of the defendant's negligence and should be included in quantifying the damages payable by the defendant to the bareboat charterer in respect of the cost of repairs to the vessel and the amount by which the hire payable by the time charterer had been reduced whilst the vessel was being repaired (post, pp. 395E–F, G–H).
The following cases are referred to in the judgment of their Lordships:
Anns v. Merton London Borough Council[
Caltex Oil (Australia) Pty. Ltd. v. The Dredge “Willemstad”(
Cattle v. Stockton Waterworks Co.(
Donoghue v. Stevenson[
Dorset Yacht Co. Ltd. v. Home Office[
Elliott Steam Tug Co. Ltd. v. The Shipping Controller[
Fletcher v. Rylands(
Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd.[
H.M.S. London[
Junior Books Ltd. v. Veitchi Co. Ltd.[
Leigh and Sullivan Ltd. v. Aliakmon Shipping Co. Ltd.[
Lumley v. Gye(
Margarine Union G.m.b.H. v. Cambay Prince Steamship Co. Ltd.[
McColl. v. Canadian Pacific Railway Co.[
McLoughlin v. O'Brian[
Morrison Steamship Co. Ltd. v. Greystoke Castle (Cargo Owners)[
Peabody Donation Fund (Governors of) v. Sir Lindsay Parkinson & Co. Ltd.[
Reavis v. Clan Line,
Rivtow Marine Ltd. v. Washington Iron Works(
Robins Dry Dock & Repair Co. v. Flint(
SCM. (United Kingdom) Ltd. v. W. J. Whittall & Son Ltd.[
Simpson & Co. v. Thomson(
Societe Anonyme de Remorquage a Helice v. Bennetts[
Spartan Steel & Alloys Ltd. v. Martin & Co. (Contractors) Ltd.[
State of Louisiana, Ex. rel. Guste v. M/V Testbank(
Weller & Co. v. Foot and Mouth Disease Research Institute[
World Harmony, The[
The following additional cases were cited in argument:
Anglo-American Steamship Co. Ltd. v. Houlder Line Ltd.[
Attorney-General for New South Wales v. Perpetual Trustee Co. Ltd.[
Lamb v. Camden London Borough Council[
Ministry of Housing and Local Government v. Sharp[
National Employers' Mutual General Association Ltd. v. Waind & Hill (No. 2)[
Okehampton, The[
Overseas Tankship (U.K.) Ltd. v. Miller Steamship Co. Pty. (The Wagon Mound (No. 2))[
Ross v. Caunters[
Tate & Lyle Food and Distribution Ltd. v. Greater London Council[
APPEAL (No. 27 of 1984) by the appellant defendant, Candlewood Navigation Corporation Ltd., with leave of the Supreme Court of New South Wales Admiralty Division, from a judgment of Yeldham J. on 21 October 1983 in the Supreme Court of New South Wales Admiralty Division whereby in an action by the respondent plaintiffs, Mitsui O.S.K. Lines Ltd. and Matsuoka Steamship Co. Ltd., claiming damages for negligence judgment was given for the first plaintiff for Yen 98,511,548 and for the second plaintiff for Yen 386,436,248.
The facts are stated in the judgment of their Lordships.
C. S. C. Sheller QC and R. B. S. Macfarlan (both of the New South Wales Bar) for the defendant.
A. M. Gleeson Q.C., B. C. Oslington and J. N. West (all of the New South Wales Bar) for the plaintiffs.
1 July. The judgment of their Lordships was delivered by LORD FRASER OF TULLYBELTON.
In the early hours of 10 July 1981 two ships collided off Port Kembla in New South Wales. One of them, the motor vessel Ibaraki Maru, was at anchor waiting for a berth in the port. The other, the Mineral Transporter, had also been at anchor, slightly more than a mile from the Ibaraki Maru, when her starboard anchor failed, for reasons not attributable to negligence by her owners or crew, and she drifted until she collided with the Ibaraki Maru. In proceedings in the Supreme Court of New South Wales the trial judge (Yeldham J.) held that there had been negligence by those on board the Mineral Transporter in failing to take steps, after the anchor had failed, to avert the collision. He also held that there had been no contributory negligence by those on board the Ibaraki Maru, and therefore that the Mineral Transporter was wholly to blame for the accident. No appeal has been brought from those findings of fault.
The present appeal by the owner of the Mineral Transporter (defendant in the action) comes directly from Yeldham J. to the Board. It raises two questions with regard to the assessment of damages. One of the questions involves an important issue of principle. The other, although financially important to the parties, is of less general application. The issue of principle arises in this way. At the time of the collision the Ibaraki Maru was the subject of a bareboat (or demise) charter from the first plaintiff, her owner, to...
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