Dimskal Shipping Company SA v International Transport Workers Federation (The Evia Luck)

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Keith of Kinkel,Lord Templeman,Lord Ackner,Lord Goff of Chieveley,Lord Lowry
Judgment Date07 Nov 1991
Judgment citation (vLex)[1991] UKHL J1107-3

[1991] UKHL J1107-3

House of Lords

Lord Keith of Kinkel

Lord Templeman

Lord Ackner

Lord Goff of Chieveley

Lord Lowry

Dimskal Shipping Co. S.A.
(Respondents)
and
International Transport Workers Federation (A Trade Union)
(Appellants)
Lord Keith of Kinkel

My Lords,

1

I have had the opportunity of considering in draft the speech to be delivered by my noble and learned friend Lord Goff of Chieveley. I agree with it, and for the reasons he gives would dismiss this appeal.

Lord Templeman

My Lords,

2

The appellant federation is a trade union which seeks to prevent the employment of cheap labour on vessels flying flags of convenience. The respondents own the Evia Luck which was registered in Panama and employed a crew recruited in Greece and in the Philippines on terms which were inferior to those approved by the federation. The Evia Luck put into a port in Sweden and the federation blacked the ship by persuading local workers not to load the ship or to assist her to depart the port until the owners entered into contracts with the federation and the crew whereby the owners paid compensation to the federation for the crew in respect of past wages, entered into fresh contracts of employment with the crew on terms approved by the federation and made a contribution to the welfare fund of the federation.

3

The contracts entered into by the owners as a result of the blacking organised by the federation were expressed to be governed by English law. In this appeal the owners seek to uphold the decision of the Court of Appeal (McCowan L.J. and Sir Roger Ormrod, Neill L.J. dissenting) whereby the Court of Appeal ordered the federation to pay the owners $111,743 with interest and declared that the agreements to which the federation and the owners were parties were void. The Court of Appeal [1990] 1 Lloyd's Rep. 319by a majority thus reversed the judgment of Phillips J. [1989] 1 Lloyd's Rep. 166 who had dismissed the action by the owners.

4

In Universe Tank Ships Inc. of Monrovia v. The International Transport Workers' Federation (the Universe Sentinel) [1983] 1 A.C. 366 Lord Diplock commented, at p. 384 that:

"Commercial pressure, in some degree, exists wherever one party to a commercial transaction is in a stronger bargaining position than the other party … In the instant case the economic duress complained of was exercised in the field of industrial relations to which very special considerations apply."

5

Under the English common law an employer has never been guilty of economic duress if at a time when unemployment is high and workers are weak wages are low. Under the English common law a trade union is guilty of economic duress if the union forces an employer to increase wages by procuring a boycott of the employer's business. Parliament has intervened to restrict the common law rights of employers and to confer immunities on trade unions and other persons engaged in industrial action. Thus section 13 of the Trade Union and Labour Relations Act 1974 as amended provided that:

"(1) An act done by a person in contemplation or furtherance of a trade dispute shall not be actionable in tort on the ground only — ( a) that it induces another person to break a contract or interferes or induces any other person to interfere with its performance; or ( b) that it consists in his threatening that a contract (whether one to which he is a party or not) will be broken or its performance interfered with, or that he will induce another person to break a contract or to interfere with its performance."

6

In the Universe Sentinel the Act of 1974 protected the federation against claims similar to those made in the present proceeding save only for the contribution to the welfare fund of the federation. Lord Diplock said, at p. 385:

"The immunities from liability in tort provided by sections 13 and 14 are not directly applicable to the ship-owners' cause of action for money had and received. Nevertheless, these sections, together with the definition of trade dispute in section 29, afford an indication, which your Lordships should respect, of where public policy requires the line shall be drawn between what kind of commercial pressure by a trade union on an employer in the field of industrial relations ought to be treated as legitimised despite the fact that the will of the employer is thereby coerced, and what kind of commercial pressure in that field does amount to economic duress that entitles the employer victim to restitutionary remedies."

7

In the Universe Sentinel [1983] 1 A.C. 366 Lord Diplock held and the majority of the House agreed, that the contribution to the welfare fund was not concerned with the terms and conditions of employment of the crew so as to be protected by the Act of 1974 and that this contribution was therefore recoverable as money had and received as a result of economic duress. The contracts of employment were however valid notwithstanding that section 13 only applied to liability in tort. Lord Diplock refused to draw any distinction between tort and restitution.

8

Thereafter section 17 of the Employment Act 1980 provided that:

"(1) Nothing in section 13 of the 1974 Act shall prevent an act from being actionable in tort on a ground specified in sub section (1)(a) or (b) of that section in any case where: ( a) the contract concerned is not a contract of employment and ( b) one of the facts relied upon for the purpose of establishing liability is that there has been secondary action which is not action satisfying the requirements of sub section (3), ( 4) or (5) below. (2) For the purposes of this section there is secondary action in relation to a trade dispute when, and only when, a person — ( a) induces another to break a contract of employment or interferes or induces another to interfere with its performance, or ( b) threatens that a contract of employment under which he or another is employed will be broken or its performance interfered with, or he will induce another to break the contract of employment or to interfere with its performance if the employer under the contract of employment is not a party to the trade dispute."

9

The Evia Luck was blacked by secondary action, namely industrial action by workers in Sweden who were not employed by the owner but by Swedish port authorities.

10

The Universe Sentinel concerned a ship which had been blacked within the jurisdiction of the courts of this country. The agreements between the owners and the federation had been made in this country and were valid under the Act of 1974. If the Evia Luck had been blacked in this country and the agreements had been made in this country, section 17 of the Employment Act 1980 amending the Act of 1974 would have entitled the owners to avoid the contracts and recover the monies paid thereunder.

11

The Acts of 1974 and 1980 are only two illustrations of the fact that the relationship between economic duress, industrial action and the law is governed by legislative powers rather than by the judicial common law and that this relationship is altered from time to time by the legislature in accordance with what is perceived to be the public interest. Outside the United Kingdom the legality of industrial action depends on the current legislation of each country; economic duress and the doctrine of restitution may appear in different guises or not appear at all, and the common law itself may be applied in a different manner or not at all.

12

The federation did not do anything wrong according to Swedish law. The owners' actions against the Federation in tort were dismissed both by Phillips J. and by the Court of Appeal because the conduct of the federation in Sweden was not unlawful by the law of that country. And yet the Court of Appeal has ordered the federation to pay damages for that conduct.

13

In my opinion the owners are not entitled to succeed in this country. In the first place the courts of this country should not concern themselves with industrial action lawfully carried out in the place where that action occurred. In the second place as Lord Diplock pointed out there is no difference between tort and restitution. Monies paid as a result of conduct lawful where committed and irrecoverable in this country under the law of tort should not be recoverable in this country under the law of restitution. The contents of a bottle cannot be changed by altering the label.

14

I gratefully adopt the views cogently and forcefully expressed by Phillips J. and by Neill L.J. and for the reasons given by them, which I have endeavoured to reinforce, I would allow this appeal.

Lord Ackner

My Lords,

15

I have had the advantage of reading in draft the speech of my noble and learned friend Lord Goff of Chieveley. I agree with it and for the reasons which he gives I, too, would dismiss the appeal.

Lord Goff of Chieveley

My Lords,

16

This appeal is concerned with the campaign which has been waged for many years by the International Transport Workers Federation ("the I.T.F.") against shipowners whose ships fly flags of convenience. The last case of this kind before your Lordships' House was Universe Tankships Inc. of Monrovia v. International Transport Workers Federation (The Universe Sentinel) [1982] A.C. 366, to which I shall have to refer in a moment. That case was concerned with a Liberian ship. The present case is concerned with a Panamanian ship, Evia Luck, owned by the respondents, Dimskal Shipping Co. S.A. ("the owners"). It arose out of events which occurred in February and March 1983 when the vessel lay at Uddevalla in Sweden. She was then manned by a crew consisting of 10 Greek nationals (under contracts of employment governed by Greek law) and 20 Filipino nationals (under contracts of employment governed by Philippine law). Agents of the I.T.F. boarded the vessel at Uddevalla. They informed the master, officers and crew that the vessel, which...

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