Liesbosch Dredger (Owners of) v Owners of SS Edison (The Liesbosch)

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Wright,.
Judgment Date28 February 1933
Judgment citation (vLex)[1933] UKHL J0228-1
Date28 February 1933

[1933] UKHL J0228-1

House of Lords

Lord Buckmaster.

Lord Warrington of Clyffe.

Lord Tomlin.

Lord Russell of Killowen.

Lord Wright.

Owners of Dredger "Liesbosch"
and
Owners of SS. "Edison".

After hearing Counsel as well on Thursday the 26th, as on Friday the 27th, days of January last, upon the Petition and Appeal of the Owners of the Dredger or Vessel "Liesbosch,” praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 1st of February, 1932, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied, or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King, in His Court of Parliament might seem meet; as also upon the printed Case of the Owners of the Steamship or Vessel "Edison," lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 1st day of February,1932, complained of in the said Appeal, be, and the same is hereby, Varied by substituting for the Judgment for nine thousand one hundred and seventy seven pounds three shillings and four pence (9177l. 3s. 4d.) a Judgment for such sum as the Admiralty Registrar may find on reference back to him; and that subject to such Variation, the said Order be, and the same is hereby, Affirmed: And it is further Ordered, That the Cause be, and the same is hereby remitted back to the said Registrar, with a Direction to assess the true measure of damage on the principles laid down by this House: And it is also further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents three quarters of the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.

Lord Wright .

My Lords,

1

On the 26th November, 1928, the Respondents' steamship "Edison" in proceeding to sea from the port of Patras fouled the moorings of the Appellants' dredger "Liesbosch" and did not free them until she had carried the "Liesbosch" into the open sea, where the "Liesbosch", being without crew on board, filled with water in the heavy sea which was running, sank and became a total loss. The Appellants issued a writ in the Admiralty Division, and when the Respondents admitted sole liability for the collision and loss (which they did not do until the 7th May, 1930) the claim was referred to the Registrar and Merchants to assess the damages. The Appellants, who are civil engineers, had entered into a contract dated the 4th March, 1927, with the Harbour Board of Patras for the construction under heavy penalties of piers and quay walls at Patras; the work involved among other things a considerable amount of dredging; for this work at the date of the accident the Appellants were using the "Liesbosch", which they had purchased in October, 1927, in Holland for £4,000, to which must be added as part of the cost the sum of £2,000, expended in fitting her out and transporting her to Patras. She was insured for £5,520. There was evidence that in Holland there were available for purchase by the Appellants in and about December, 1928, one or more dredgers by which the "Liesbosch" might have been replaced, but the Appellants did not then take steps to purchase a dredger in substitution for the "Liesbosch"; all their liquid resources were engaged in the contract undertaking and in the deposit which under the contract they had made. In January, 1929, the Patras Harbour Authorities threatened to cancel the contract and forfeit the deposit unless the "Liesbosch" were replaced within a certain time. The Appellants, owing to their financial embarrassments being unable to buy a dredger, decided to hire one in the Mediterranean, and on the 11th May, 1929, hired from Ancona in Italy a dredger called the "Adria", at a high rate of hire; the "Adria" was somewhat larger than the "Liesbosch", but more expensive to work and in order to obtain her the Appellants were compelled along with her also to take on hire a tug and two hopper barges. On 17th June, 1929, the "Adria" and her attendant fleet arrived at Patras and commenced to work on the contract; until then work had been suspended since the date the "Liesbosch" was lost, as the Harbour Board would not let the Appellants do other work until dredging was resumed. The monthly rate of hire of the "Adria" proved so burdensome to the Appellants that the Harbour Board, in order to help them, purchased the "Adria", under a contract dated the 30th June, 1929 from the Italian owners, for a sum in cash and resold her to the Appellants for the same sum, payable in 48 monthly instalments at 6 per cent. interest. The amended claim of the Appellants before the Registrar and Merchants was filed on the 14th November, 1930. It was presented in five parts which were as follows:—Part 1 was for the price paid for the substituted "Adria", viz., £9,177 3s. 4d. and £882 7s. 2d. for expenses connected with the purchase. Part 2 was for £2,922 1s. 2d. for overhead charges and interest on capital invested, as being thrown away during the period when work was stopped, that is from the date the "Liesbosch" was lost until the "Adria" commenced work. Part 3 was for £6,838 9s. 8d., being for hire paid for the "Adria" and her satellites from 4th May, 1929, to 3rd July, 1930. Part 4 was for £1,078 16s. 1d., being for the extra expense in working the "Adria" while on hire over what would have been the cost of working the "Liesbosch". Part 5 was for £2,353 10s. 3d. for profit alleged to have been lost owing to the stoppage of work under the contract between the date of the loss of the "Liesbosch" and the date when the "Adria" recommenced work. On this claim the Registrar made his Report on the 7th May, 1931. In substance he admitted the Appellants' claim, though he reduced it from £23,514 to £19,820; he reduced certain items, and in particular under Part 5, he held that as the Appellants were able after the "Adria" arrived to resume the contract there was no loss of profit during the period of delay, but merely a loss of interest, which he put at rather over £700. The claim was put forward in drachmas, but I have taken the agreed rate of exchange. He made no finding as to the value of the "Liesbosch" at the date of the collision, but held in effect that:

"having regard to all the existing circumstances, such as the severe terms of their contract in regard to penalties and their want of liquid resources"

2

they had acted reasonably and that the hiring of the "Adria" to complete an important contract with a public body was a direct and natural result of the collision. He did not in terms find that but for financial reasons the "Liesbosch" could have been replaced by purchasing an equivalent dredger, say in Holland, at a reasonable price and with little delay, but his finding that it was admitted by the Appellants that they had not then the means to purchase a dredger does not contradict the evidence led by the Respondents that there were in Holland at the date of the collision suitable dredgers for sale. On objections being taken to the Registrar's Report, Langton, J., before whom the matter came, disallowed the Respondents' objections that the damages claimed were too remote and confirmed the Report, with a trifling variation. On Appeal, the Court of Appeal, allowed the Appeal with costs, holding that the Registrar had proceeded on a wrong basis in allowing damages which were too remote in law, and ordered Judgment to be entered for £9,177 3s. 4d. with interest from the 26th November, 1928, to the date of their order at 5 per cent. From this order the matter comes before your Lordships' House.

3

The substantial issue is what in such a case as the present is the true measure of damage. It is not questioned that when a vessel is lost by collision due to the sole negligence of the wrongdoing vessel the owners of the former vessel are entitled to what is called restitutio in integrum, which means that they should recover such a sum as will replace them so far as can be done by compensation in money, in the same position as if the loss had not been inflicted on them, subject to the rules of law as to remoteness of damage. The Respondents contend that all that is recoverable as damages is the true value to the owners of the lost vessel, as at the time and place of loss. Before considering what is involved in this contention, I think it desirable to examine the claim made by the Appellants, which found favour with the Registrar and Langton, J., and which in effect is that all their circumstances, in particular their want of means, must be taken into account and hence the damages must be based on their actual loss, provided only that, as the Registrar and the Judge have found, they acted reasonably in the unfortunate predicament in which they were placed, even though but for their financial embarrassment they could have replaced the "Liesbosch" at a moderate price and with comparatively short delay. In my judgment the Appellants are not entitled to recover damages on this basis. The Respondents' tortious act involved the physical loss of the dredger; that loss must somehow be reduced to terms of money. But the Appellants' actual loss in so far as it was due to their...

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    ...sought to say before us that damages ought not to be recoverable under this head at all. He referred to the case of The Liesbosch (1933) Appeal Cases 449. In that case Lord Wright said that the loss due to the impecuniosity of the plaintiffs was not recoverable. I think that that statement ......
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1 firm's commentaries
  • The Gift Of Gold - Recovery Of The Costs Of Third Party Funding In Arbitration
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    ...could not recover losses which he would have avoided if he had been more pecunious (Owners of Dredger "Liesbosch" v Owners of SS Edison [1933] AC 449). The modern position, though, is that a claimant will recover its actual loss, provided it acted reasonably given the impecuniosity, and pro......
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    ...Report No 262 (1999) [10.4] [10.8] which notes a 'shift in emphasis' (at [10.6]) towards deductibility being the starting point. (107) [1933] AC 449. (108) (1966) 114 CLR (109) [1956] AC 185. Contra R v Jennings [1966] SCR 532; North Island Wholesale Groceries Ltd v Hewin [1982] 2 NZLR 176;......

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