Lamb Head Shipping Company Ltd v Jennings (Marel)

Monday 6th December 1993.

The Court has before it an appeal by the 1st and 3rd plaintiffs (the "plaintiffs") in this action. They are the owners and, by assignment and re-assignment, current mortgagees of the vessel "Marel", which sank on the 14th November 1985 off the south- east coast of Spain while on a voyage from Thessaloniki in Greece to Ghent in Belgium.

The respondent to the appeal, sole defendant in the action, is a representative underwriter of the marine hull policy under which the "Marel" was insured at the time of the sinking. That was a time policy for the period 7th December 1984 to 7th December 1985 which covered, among other risks, "perils of the sea".

The plaintiffs claim is that the "Marel" was sunk by perils of the sea and that the defendant is bound to indemnify the plaintiffs in the amount of his proportion of the insured value of the vessel under the policy.

The plaintiffs appeal is brought against the judgment of His Honour Judge Diamond QC, sitting as a Judge of the High Court in the Commercial Court, given on 20th December 1991 after the trial of the action, whereby it was adjudged that the action be dismissed with costs.

The facts are set out fully and very carefully in the Judge's judgment. There is no need for me to repeat them here. The Judge directed himself correctly, at the foot of page 6 of his judgment, that:

"The sole issue in the action is whether, as the owners claim, the loss of the "Marel" was caused by perils of the sea, a peril insured by the policy of insurance".

In considering the relevant law he directed himself, in my judgment correctly, at page 8 that:

"The burden of proving, on a balance of probabilities, that a ship was lost by perils of the sea is and remains throughout on the owners".

He referred to a statement by Scrutton LJ, in La Compania Naviera Martiatu v. The Corporation of The Royal Exchange Assurance [1923] 1 KB 650 at 657 that:

"This view renders it unnecessary finally to discuss the burden of proof, but in my present view if there are circumstances suggesting that another cause than a peril insured against was the dominant or effective cause of the entry of sea water into the ship and an examination of all the evidence and probabilities leaves the Court doubtful what is the real cause of the loss, the assured has failed to prove his case".

That statement was expressly approved by the House of Lords in The Popi M [1985] 1 WLR 948. In that case the only speech in the House of Lords was delivered by Lord Brandon of Oakbrook with whom the other members of the House, Lords Fraser of Tullybelton, Diplock, Roskill and Templeman all agreed.

Similarly in Regina Fur Company Ltd. v. Bossom [1958] 2 Ll. Reps. 425 at 434, Sellers LJ said:

"In order to succeed, the plaintiffs have to prove a loss of goods covered by the policy due to a risk insured against, and this obligation remains none the less where the evidence advanced to prove the loss, if rejected, and/or evidence called by the defendant underwriter, might establish or tend seriously to show that a crime had been committed by the claimants. If the evidence of all the witnesses and the effect of all the documents leaves the Court in doubt on the question whether or not there was a fortuitous loss —that is, by breaking and entering and stealing —the plaintiffs would not be entitled to judgment as they would not have established the material fact that the loss of goods was due to a risk insured by the policy".

To the same effect is the statement of Lord Evershed MR, in the same case, at page 428.

"Now, I have no doubt whatever that insurers, having a claim of this kind made against them, are entitled to say, by way of defence, 'Prove the case strictly —we require it to be strictly proved'. It was argued by Mr. Gallop and also by Mr. Goodenday: If such is the nature of the substantial defence made, then, if the plaintiffs succeed in establishing a prima facie case the onus in some way shifts to the defendants, who, if they desire to persist in the defence, must then allege and prove affirmatively some answer to the case which has been prima facie established and they must therefore, by pleading, give proper notice of what that answer is. Mr. Gallop, indeed, put the case even more strongly, contending that the issue in this case really was, on the pleadings, and upon analysis, 'Was it more probable that a fraud had been committed against the defendants than not?'

I must say, without any qualification, that I think both those propositions are erroneous. I think that a defendant —whether he is an underwriter or any other kind of defendant —is entitled to say, by way of defence, 'I require this case to be strictly proved, and admit nothing'. Where such is the defence the onus remains throughout upon the plaintiffs to establish the case they are alleging".

In addition in The Popi M Lord Brandon, in giving reasons why a certain dictum of Mr. Sherlock Holmes was not good law, said at 956 C to D as the third reason the following:

"The third reason is that the legal concept of proof of a case on a balance of probabilities must be applied with common sense. It requires a Judge of first instance, before he finds that a particular event occurred, to be satisfied on the evidence that it is more likely to have occurred than not. If such a Judge concludes on a whole series of cogent grounds that the occurrence of an event is extremely improbable, a finding by him that it is nevertheless more likely to have occurred than not does not accord with common sense. This is especially so when it is open to the Judge to say simply that the evidence leaves him in doubt whether the event occurred or not and that the party on whom the burden of proving that the event occurred lies has therefore failed to discharge such burden".

The basic position in relation to the "Marel" is that it is common ground that she sank because her engine room and, a bit later, the number 4 Hold became flooded with sea water. The crucial question is how the flooding of the engine room came about.

The plaintiffs assert that it came about by "perils of the sea". That means fortuitous accidents or casualties of the seas, but it does not include the ordinary action of the wind and waves.

The plaintiffs' pleaded case, which they claim the Judge should have accepted, is that the cause of the flooding of the engine room was most probably a substantial breach of her port side shell plating, itself caused most probably by a collision with an unidentified object.

The flooding of the engine room began at 0510 on the

14th November 1985. At 0525 the crew abandoned ship. At 0620 they were picked up by a German ship, the "Norasia Rebecca". She located the "Marel" at about 0700 and kept watch until the "Marel" actually sank at 1236.

From these observations the expert witnesses on both sides agreed that from 0510 until about 0930 the entry of sea water was confined to the engine room. After about 0930 the sea water began to flow from the engine room into the number 4 Hold and it was as the result of the progressive flooding of the number 4 Hold, as well as the engine room, that the vessel sank.

From these conclusions the experts also made calculations, which were substantially agreed, as to the amount of water which had got into the engine room as it filled, and the size of the opening in the ship's steel plating on the port side by way of the engine room, which there would have to have been if the flooding of the engine room from 0510 to 0930 had come about from an opening in the steel plating occasioned by collision with an unidentified object.

The answer was that the opening would have had to be one of about 1000 square centimetres, for instance one metre long and ten centimetres wide.

The Judge found, on clear evidence, that the shell plating of the vessel on the port side by way of the engine room was seaworthy and in good condition. It would seem, therefore, that it must have required a very powerful blow by a large object to make such a large opening in the steel plate.

The primary submission for the plaintiffs in the court below was therefore that the "Marel" had hit a floating or submerged container which had fallen from some other ship elsewhere and drifted into her path. The evidence also showed, however, that if there was indeed an opening in the port side shell plating of the "Marel" by way of the engine room, it must have been more than 4.5 metres below the still water line. That was because videos taken of the "Marel" shortly before the trial, where she lay on the sea bottom, showed no sign of any opening in her shell plating down to the level which has been calculated where the side of the ship is obscured by the mud of the seabed.

Against that background there was evidence that there had been no report of any container having been lost in the vicinity during the period before the sinking of the "Marel". More importantly, there was also cogent scientific evidence to the effect that the sea...