London & Overseas Freighters Ltd v Timber Shipping Company S.A. (Charterparty, London Explorer)
| Jurisdiction | England & Wales |
| Judge | Lord Reid,Lord Morris of Borth-y-Gest,Lord Guest,Lord Donovan,Lord Cross of Chelsea |
| Judgment Date | 12 May 1971 |
| Judgment citation (vLex) | [1971] UKHL J0512-2 |
| Date | 12 May 1971 |
| Court | House of Lords |
[1971] UKHL J0512-2
House of Lords
Lord Reid
Lord Morris of Borth-y-Gest
Lord Guest
Lord Donovan
Lord Cross of Chelsea
and
Upon Report from the Appellate Committee, to whom was referred the Cause Timber Shipping Company S.A. against London & Overseas Freighters Limited, Timber Shipping Company S.A. against London & Overseas Freighters Limited (Second Appeal) [ Consolidated Appeals], That the Committee had heard Counsel, as well on Tuesday the 16th, as on Wednesday the 17th and Thursday the 18th, days of March last, upon the Petition and Appeal of Timber Shipping Company S.A., whose registered office is situate at Avenida Justo, Arosamena Y Calle 31, No. 3-80, Panama, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 14th of July 1970, so far as regards the words: "It is Ordered that this appeal be dismissed that the said Judgment of the Honourable Mr. Justice Mocatta (save only as to interest) be affirmed and that the Claimant's costs of this appeal be taxed by a Taxing Master and paid by the Respondents to the Claimant" might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order, so far as aforesaid, might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet; as also upon the Petition and Appeal of Timber Shipping Company S.A., whose registered office is situate at Avenida Justo, Arosamena Y Calle 31, No. 3-80, Panama, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 14th of July 1970, so far as regards the words: "It is Ordered that the Claimant's cross-appeal be allowed that the said Order of the Honourable Mr. Justice Mocatta be wholly set aside and that the said Award be affirmed. And it is Ordered that the Claimant's costs of the Notice of Motion the hearing thereof before the Honourable Mr. Justice Mocatta and this appeal and cross-appeal be taxed by a Taxing Master and paid by the Respondents to the Claimant" might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order, so far as aforesaid, might be reversed, varied or altered, or that the Petitioners might have such other relief in the premises as to Her Majesty the Queen, in Her Court of Parliament, might seem meet (which said Appeals were, by an Order of this House of the 14th day of October last, ordered to be Consolidated); as also upon the Case of London & Overseas Freighters Limited, lodged in answer to the said Appeals; 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 Her Majesty the Queen assembled, That the said Orders of Her Majesty's Court of Appeal of the 14th day of July 1970, in part complained of in the said Appeals, be, and the same are hereby, Varied: And it is further Ordered, That as regards the matter of the Charterparty rate, the said Orders of Her Majesty's Court of Appeal be, and the same are hereby, Affirmed, and that the said Petitions and Appeals be, and the same are hereby, dismissed this House: And it is further Ordered, That as regards the matter as to Interest, the said Orders of Her Majesty's Court of Appeal be, and the same are hereby, Reversed: And it is further Ordered, That the Cause be, and the same is hereby, remitted back to the Queen's Bench Division of the High Court of Justice with a Direction that so far as regards the words: " and we further award and adjudge that the Charterers do pay interest on the said sum at the rate of 8 per cent. per annum from 1st June 1969 until the said capital sum shall in fact be paid" the Award of the 6th day of January 1970 be, and the same is hereby, Set Aside: And it is further Ordered, That, by consent, the Appellants do pay, or cause to be paid, to the said Respondents three-quarters of the Costs incurred by them in the Courts below both in respect of the Award relating to the Charterparty rate and as to Interest, to be taxed by a Taxing Master if not agreed: 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 Appeals to this House, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
The Respondents were the owners of the LONDON EXPLORER. On 25th October 1967 the vessel was hired by a time charter to the Appellants for "12 months 15 days more or less in Charterers option". This period ran from the delivery of the vessel to the Charterers on 29th December. The last voyage under the charter was a voyage from Japan with a cargo for New Orleans and Houston. The vessel arrived at New Orleans on 11th December 1968. So if all had gone well she would have been redelivered at Houston well within the period set out in the charter. But a strike of dock labourers at New Orleans prevented discharge of cargo there from being completed until 28th February 1969. The vessel then proceeded to Houston where another strike prevented completion of discharge of cargo until 24th April. The vessel was then redelivered to the owners.
Strikes are not covered by the off-hire clause and the Appellants admit that they must make a payment in respect of the whole period up to 24th April. The question in this appeal is as to the proper basis on which it must be assessed. Charter rates had fallen substantially since the date of the charter. The Appellants contend that their only liability in respect of the period 29th December 1968 (or alternatively 13th January 1969) until 24th April 1969 is a liability to pay damages for breach of contract and that such damages must be assessed at the market rate then current. The Respondents contend that they are entitled to the rate of hire set out in the charter for the whole period. This contention was upheld by the Court of Appeal on a Special Case stated by the arbitrators. The arbitrators had held that throughout the disputed period the ship remained on hire and had therefore decided in favour of the Respondents.
Under such a charter there is no hiring in the true sense. It is not disputed that throughout the chartered vessel remains in the possession of the owners, and the Master and crew remain the owners' servants. What the charterer gets is a right to have the use of the vessel. The Appellants contend that on a proper construction of this charter that right came to an end at latest on 13th January, that thereafter they had no right to use or give directions for the use of the vessel: they could therefore only be liable in damages for their wrongful use of the vessel until its redelivery on 24th April.
Parties are of course entitled to make any agreement they choose. But it seems to me to be highly unlikely that any parties would agree that, if the completion of the last voyage is delayed beyond a particular date, by some cause for which neither is responsible, the charterers should have no right at all to give any directions as to the future movements of the vessel. The vessel might then still be in mid-ocean and it would seem odd, to say the least, if the owners then became free to use the vessel as they chose subject only to any liability they might have under bills of lading of the cargo to its consignees.
The law regarding this kind of time charter is scanty. Gray & Co. v. Christie & Co. (1889) 5 T.L.R. 577 was the earliest case cited and has come to be regarded as the leading case. The case only took one day before Mathew J. It does not look like a leading case. The whole report only extends to one column of print. None of the editors of other series of reports then current thought it worth reporting. But the accident that the editor of the Times Law Reports thought differently has set it up as the leading authority.
By a charterparty, the terms of which are not quoted, Grays let their ship to timber importers for three calendar months from 26th June. So the period expired on 26th September. Charter rates had risen and the owners objected to the vessel being sent on a voyage which would not end by that date. Nevertheless Christies sent her on a voyage which was expected to end on 30th September. There was some unexplained delay and the ship was not redelivered until 13th October. So the owners claimed payment for the last seventeen days at the higher current market rate. Their claim failed. The judgment is very short. Mathew J. said that this was a time charter but it was also a voyage charter. Counsel in the case were unable to explain that. Then he added:
"It could not have been in the contemplation of the parties to do anything so unbusinesslike as to make it a breach of the charterparty to send the steamer on a voyage which could not have been completed by the 26th."
This case has been regarded as authority for some very wide propositions. I think it is authority, and good authority, for the proposition that there is a presumption that a definite date for the termination of a time charter should be regarded as an approximate date only. I think that it was rightly held that Christies were within their rights in sending the ship on a voyage expected to end four days after the stipulated date. But I do not think that Mathew J. intended to say that they would have been entitled to send the ship on a voyage not expected to end until 13th October. And further I think that Mathew J. was right in holding that, once the vessel had set out on a legitimate...
To continue reading
Request your trial
-
Alma Shipping Corporation of Monrovia v Mantovani (Dione)
...until re do livery, even though the market rate may have gone up or down, see ( Timber Shipping Co. S. A. v. London & Overseas Freighters Ltd. 1972) Appeal Cases 1. (e) If the charterer sends the vessel on an illegitimate last voyage that is, a voyage which it cannot be expected to complete......
-
Punjab National Bank v de Boinville
...to what that sense was, there is a strong case for considering it. 46 In Timber Shipping Co. S.A. v. London & Overseas Freighters Ltd [1972] A.C. 1, the printed word "about" in a charterparty had been replaced by "15 days more or less". Lord Reid said this (at p. 15): "There is a controvers......
-
Narandas-Girdhar and Anr v Bradstock
...(Mottram Consultants Ltd v Bernard Sunley & Sons Ltd [1975] 2 Lloyd’s Rep 197; Timber Shipping Co SA v London & Overseas Freighters Ltd [1972] AC 1; Jefco Mechanical Services Ltd v Lambeth London Borough Council (1983) 24 BLR 1), or clauses derived from printed forms (Team Service plc v Kie......
-
Robert Bou-Simon v BGC Brokers LP
...the case in relation to printed forms ( Mottram Consultants Ltd v Bernard Sunley & Sons Ltd [1975] 2 Lloyd's re 197; Timber Shipping Co SA v London & Overseas Freighters Ltd [1972] AC 1; Jefco Mechanical Services Ltd v Lambeth London Borough Council (1983) 24 BLR 1), or clauses derived from......
-
RESOLVING AMBIGUITY THROUGH EXTRINSIC EVIDENCE
...considerations from a normal pre-contract deletion: Timber Shipping Co SA v London & Overseas Freighters Ltd (The London Explorer)[1972] AC 1 at 15. A more detailed account of the conflicting authorities on deletion of words in printed forms is found in Kim Lewison, The Interpretation of Co......
-
Corporate accountability in South Africa: Sharpening the role of criminal law
...lity from tort law to crim inal law in the case of a company for fault-based statutor y offences); and Tesco Supermark ets v Nattrass [1972] AC 153 (House of Lords conr mation of the application of id entication doct rine to companies for fault-based offences). In South Af rica, the Crim ......