Lash Atlantico, The (Manina III)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE KERR,LORD JUSTICE CROOM-JOHNSON,LORD JUSTICE MUSTILL |
| Judgment Date | 18 December 1986 |
| Judgment citation (vLex) | [1986] EWCA Civ J1218-5 |
| Docket Number | 86/1149 |
| Court | Court of Appeal (Civil Division) |
| Date | 18 December 1986 |
[1986] EWCA Civ J1218-5
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
ADMIRALTY COURT
(MR. JUSTICE SHEEN)
ADMIRALTY ACTION in rem against the
Ship: "LASH ATLANTICO"
Royal Courts of Justice
Lord Justice Kerr
Lord Justice Croom-Johnson
and
Lord Justice Mustill
86/1149
1980 Folio 797
MISS BELINDA BUCKNALL (instructed by Messrs. Ince & Co, Solicitors, London EC3R 5EN) appeared on behalf of the Plaintiffs (Appellants)
MR. BERNARD EDER (instructed by Messrs. Thomas Cooper & Stibbard, Solicitors, London EC3A 1AB) appeared on behalf of the Defendants (Respondents)
This is an appeal by the plaintiffs from a judgment given by Mr. Justice Sheen in the Admiralty Court on 10th May 1985 reported in [1985] 2 Lloyd's Reports 464. It concerned a reference to assess damages resulting from a collision for which the defendants were admittedly wholly to blame. Accordingly it was first heard by the Admiralty Registrar who had to consider a number of points. The only one with which we are now concerned is whether the plaintiffs are entitled to recover their loss from the defendants in United States dollars as they claim, or in Greek drachma as the defendants contend. The registrar upheld the plaintiffs' claim in favour of dollars; the judge reversed him in favour of drachma; and the plaintiffs are now appealing to this court. Due to the depreciation of the drachma against the dollar since the collision, the amount in dispute is substantial.
The casualty was a collision between the plaintiffs' ship Manina III (which I shall call "Manina") and the defendants' ship Lash Atlantico in February 1979, in the port of Constanza in Rumania. The Manina was lying double-berthed outside another vessel at the berth when she was damaged in the course of manoeuvres by the Lash Atlantico.
The Manina is owned by Manina Shipping Co. S.A. of Panama. She was managed throughout in a way which is common, if not almost universal, to one-ship companies with Greek shareholders, by managing agents. In the present case these were Grecomar Shipping Agency Ltd. of Piraeus.
The evidence showed that a Mr. Leventakis was the president of Manina Shipping Co. S.A. and also the managing director of Grecomar and that he controlled both companies. Grecomar carried on their business, including the management of the Manina, in US dollars, principally through an account at the London branch of the National Bank of Greece.
So far as the trading operations of the Manina and the consequences of this particular casualty are concerned, it is indisputable on the evidence that the only relevant currency is US dollars. Thus, if one considers the consequences of the casualty, temporary repairs had to be carried out in Constanza, and then permanent repairs in Piraeus, and it is common ground that these were incurred and paid for in US dollars. To the extent that any local currency was required, whether in Constanza or in Greece, it is also common ground that this was acquired by the sale of dollars. The other major consequence of the casualty was that the vessel was inevitably prevented from trading during the period of the repairs. There again it is common ground that the freight losses which the plaintiffs are entitled to recover are properly to be measured in US dollars.
Miss Bucknall accordingly submitted on behalf of the plaintiffs that the effect of the casualty was felt by them in dollars, an expression derived from the decision of the House of Lords in The "Despina R" [1985] Appeal Cases 685, to which I come later. Apart from the consequences of this casualty, the vessel's normal trading activities and management were equally conducted exclusively in dollars. So, if one were to ask oneself what was the currency in which the vessel's daily operations were carried out, and in relation to whose fluctuations those concerned with the vessel were at risk, the answer can again only be that the currency is dollars.
None of the foregoing matters were disputed by Mr. Eder on behalf of the defendants. Nor does he raise any issue on the question of foreseeability. He concedes, obviously rightly, that it was reasonably foreseeable that a vessel registered in Panama but managed in Greece would or might be likely to be traded and managed in terms of US dollars.
There is, however, one aspect which points towards drachma in this case, and it is that on which the judge seized—if I may so put it—and on which Mr. Eder relies on this appeal. The documents disclosed by the plaintiffs included two sets of accounts produced by Grecomar, the managing agents, for the years 1979 and 1980 respectively. In 1979 the vessel suffered this casualty and there was a small loss. In 1980 there was a trading profit. Both sets of accounts were expressed in drachma. There were two for each year. First, the equivalent of a balance sheet, showing the capital position of the Manina company in terms of assets and liabilities. The second was a trading or profit and loss account rendered by Grecomar to the shareholders of the company. All these accounts were expressed exclusively in drachma. Thus, at the end of the 1979 trading account there was a loss of some 81m. drachma, apparently largely attributable to this casualty. At the end of the corresponding account for 1980 there was an operating profit of some 151m. drachma.
The judge concluded that the fact that these accounts produced by the managing agents were expressed in drachma conclusively determined that the plaintiffs could only recover their loss in drachma.
Mr. Eder put the position as follows in his skeleton argument:
"As the learned judge correctly held….. the currencies used by the managers (Grecomar) in operating the ship are not relevant because on the evidence in the present case the plaintiffs did not 'feel' the benefit or loss of such operations until Grecomar accounted to them i.e. the plaintiffs at the end of the financial year".
His submission therefore concentrates on the plaintiffs as the shipowners in isolation from all the commercial considerations. Admittedly, the ship was managed and traded by managing agents and they conducted their operations entirely in dollars. He accepts that the fortunes or misfortunes of the ship were in fact measured in dollars, as well as the consequences of this casualty. But he submits that at the final point the plaintiffs have felt their loss in drachma, because it is only as and when these accounts were rendered to them by Grecomar—or, perhaps more realistically, were produced by Grecomar for reasons which we do not know—that the plaintiffs felt their loss.
For the sake of completeness, I should add Mr. Eder accepts that the numbers of drachma shown in those accounts were in part determined by fluctuations of the dollar against other currencies, in particular drachma, during these years. To that extent the figures were again determined by the fate of the dollar. But since the final accounts were rendered in drachma, Mr. Eder submits that this is conclusive.
Miss Bucknall, on the other hand, submits that it is commercially and legally irrelevant that the presentation of the trading results of this vessel for these years was made in drachma; one does not know for what purpose.
I should mention one other aspect of the evidence although it proved to be inconclusive. The only witness, Mr. Leventakis, was asked about the significance of these accounts. He was asked about the consequences, if any, of the loss shown in the first year and the profit in the second year. It seems clear that no payment in either direction took place. There appears to have been no distribution of profit at the end of 1980, and there was certainly no reimbursement to Grecomar of the loss balance at the end of 1979. Unfortunately, although the witness tried to explain something in relation to these balances which undoubtedly referred to dollars, the tape recording is defective and what he was saying is not clear. My impression is that he was saying that any credit balance in favour of the shareholders would be reinvested—that is the word that was used—in other ventures and other ships, and that the relevant currency would again be dollars. But since the evidence is unclear, I prefer not to place any reliance upon it.
Those are the salient facts. The question is then on which side of the line the present case falls as the result of the application of the principles stated by the House of Lords in The "Despina R". The leading speech was given by Lord Wilberforce, and there was also a short speech by Lord Russell of Killowen. I will set out some passages from both before stating into which category in my view the present case falls. In that regard I should mention that Miss Bucknall accepts that the burden is on the plaintiffs to show that the appropriate currency is US dollars.
At p.696 Lord Wilberforce explains the terminology which he uses in later passages:
"The first [alternative] is to take the currency in which the expense or loss was immediately sustained. This I shall call 'the expenditure currency'. The second is to take the currency in which the loss was effectively felt or borne by the plaintiff, having regard to the currency in which he generally operates or with which he has closest connection—this I shall call 'the plaintiff's currency'".
He then considered these alternatives for the purpose of reimbursing the victim of a tort, as in the present case, and said at...
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