Probatina Shipping Company Ltd v Sun Insurance Office Ltd (Sageorge)
| Jurisdiction | England & Wales |
| Judge | The Master of the Rolls,LORD JUSTICE ROSKILL |
| Judgment Date | 15 March 1974 |
| Judgment citation (vLex) | [1974] EWCA Civ J0315-1 |
| Court | Court of Appeal (Civil Division) |
| Date | 15 March 1974 |
[1974] EWCA Civ J0315-1
In The Supreme Court of Judicature
Court of Appeal
The Master of the Rolls(Lord Denning),
Lord Justice Buckley and
Lord Justice Roskill.
Appeal of defendants from judgment of Mr. Justice Kerr on 2nd October 1974.
Mr. MICHAEL MUSTILL, Q.C., and Mr. KENNETH ROKISON (instructed by Messrs. Ince & Co.) appeared on behalf of the Appellant Defendants.
Mr. R.A. MacCrindle, Q.C., and Mr. NICHOLAS PHILLIPS (instructed by Messrs. Holman Fenwick and Willan) appeared on behalf of the Respondent Plaintiffs.
On 29th April 1972, the vessel
Sageorge ran on to the rocks of a small island near Crete. She became a total loss, but the wreck is still there. She was insured for £75,000. Her owners claim against the underwriters for the loss. The underwriters have not paid. They say that the vessel was scuttled.
On 5th April 1973, the owners issued a writ. They delivered Points of Claim for loss by perils of the sea, and gave some particulars as asked. The underwriters have not yet delivered their Points of Defence. They ask for an order for ship's papers in the form appended to Order 72, Rule 1O: and that, meanwhile, all further proceedings be stayed.
The underwriters recognise that, in due course, when they deliver their points of defence, then, if they allege therein that the vessel was scuttled or words to that effect, they will be bound to give the best particulars they can of that allegation. That was settled in the case of the GoldSky and the Dias (1972) 2 Q.B. 611 and 625. But, before delivering the defence, the underwriters seek discovery of "ship's papers".
In all ordinary actions a defendant is not allowed discovery before delivering his defence. He must first put in his defence and then apply afterwards for discovery. It was so held by Sir George Jessell, Master of the Rolls, shortly after the Judicature Acts, see Disney v. Longbourne (1876) 2 Ch. D. 734. The usual form of pleading is that the defendant cannot give particulars — or further particulars — until after discovery.
But for many years marine insurance has been an exception. It arose in the days of sailing ships, when an action was broughton a policy in the Courts of King's Bench or Common Pleas (which sat in Westminster Hall), and the attorneys for the underwriters used to hurry down to the bottom end of the Hall and up the stairs to the Court of Exchequer. That Court had jurisdiction in equity. There the attorneys used to apply for and obtain an order for discovery of ship's papers: and, furthermore, an order for a stay of the proceedings in the King's Bench or Common Pleas until such discovery was given. That caused a great deal of delay, expense and litigation. In order to obviate this, the Judges of the King's Bench and Common Pleas from about 1800 took it upon themselves to make an order for ship's papers and a stay meanwhile. That appears from the report of Goldschmidt v. Maryat (1809) 1 Camp, 559. The practice thus established was continued after the Judicature Acts, see West of England Bank v. Caxton Insurance Co. (1877) 2 Ex. D. 472.. In 1881 Lord Justice Brett gave this justification for it; "The underwriters have no means of knowing how a loss was caused: it occurs abroad and when the ship is entirely under the control of the assured. In addition to this, the contract of insurance is made, in peculiar terms, on behalf of the assured himself and all persons interested, and who these persons are, especially at the time of the loss, are entirely unknown to the underwriters" see China Steamship Co. v. Commercial Assurance Co. (1881) 8 Q.B.D. 142 at page 145. In 1898, the practice was extended so as to enable a re-insurer to get an order for ship's papers, see China Traders Co. v. Royal Exchange (1898) 2 Q.B. 187. In 1932 it was held to apply to marine policies with land risks: so that, when an insurance contained a warehouse-to-warehouse clause — and the loss occurred on land — an order for ship'spapers was made, see Leon v. Casey (1932) 2 K.B. 576. It was in that case that Lord Justice Greer made severe criticism of the practice. He said (at page 588):
"The order for ship's papers was invented at a time when it was necessary in order to do justice to the case of the insurer: it has now become an unfair and unjust weapon in the hands of the insurer".
His criticisms had effect. In 1936 the Rules of Court were amended (by Order 31, Rule 12A) so as to enable a judge to refuse an order for ship's papers unless he was satisfied that it was "necessary or expedient" and also giving him a complete discretion as to whether he should order a stay, or not.
Soon after that amendment, there was the case of Keevill & Keevill v. Boag (1940) 57 Lloyd's Reports 263. A consignment of eggs was damaged by excess of damp in the ship's hold. An order for ship's papers was refused. Lord Justice Goddard said it showed "how fortunate it is that the rule has been altered". Since that time it has been very rare for an order for ship's papers to be made save when the underwriters say that they are going to allege that the vessel was scuttled. In such a case we are told that an order for "ship's papers" is still made and a stay meanwhile. There is no scuttling case in which it has been refused.
The time has now come for the practice to be revised, even in scuttling cases. It should be brought up to date. It arose in the days of sailing ships when underwriters in Lloyd's Coffee House were completely in the dark as to the loss of the vessel. It is not appropriate in the present day when underwriters at Lloyds get information as soon as anyone of a loss, and of the circumstances in which it occurred. The order itself is in aform which is appended to the Rules of Court. But this form is so long, so full of repetitive detail, and so obscure that it must have been drafted by a conveyancer in the days when payment was so much a folio. The only people who know how it works are the few firms of solicitors in the City of London who handle these cases. The claimant has to produce not only his own documents but also those of many other people, all over the face of the globe, or else show that he has made reasonable endeavours to find them, and has failed. The cost of it all may run into thousands of pounds. The time taken may take months and months. It may be that in the haystack of paper, the defendants may find a needle which will enable them to draw blood. But, this is a very remote chance. It is not sufficient to justify the burden which this order puts on the plaintiff. He may find it so onerous that he will settle at any price rather than be harassed further. I do not say that it has happened. But it is open to abuse. So it must beremedied.
The singular feature about an order for ship's papers is that it is an order on the plaintiff to give discovery of documents before the defendant delivers his defence. This feature should be retained. In scuttling cases it may still serve a useful purpose. When a shipowner claims on a policy for loss by perils of the sea, he will be anxious that the underwriters should admit his claim as soon as may be. He will, therefore, or at any rate should, produce all papers that are relevant to his claim; and, in addition, all other papers that the underwriters reasonably ask to sec. If he does not do so, but instead goes ahead with his action, it will be open to the defendants to apply for an order for ship's papers before defence.
But the order should not be made automatically. The Judge should see whether or not it is a proper case for it. For this purpose counsel should put before the Judge the reasons for it. Counsel will not, of course, disclose any material which would be privileged or which it would be inadvisable to mention. But he should give such reasons as he can properly disclose without embarrassment or giving away too much of his client's case. That is what Mr. Justice Kerr suggested, and I agree with it. If the reasons are such as to warrant an order for discovery before defence, the Judge will make it.
If the order is made, it may be made in the form appended to Order 72, Rule 10. But, I venture to suggest that it might be shortened so as to require the plaintiff to disclose all documents relating to the insurance of the ship and cargo, and to the adventure on which she was engaged, which are or have been in the possession or power of the plaintiff and any persons interested in such insurance and adventure. In order to comply with this order, the plaintiff must apply to the persons interested and get the documents, if he can, or else show that he is unable to get them. If the defendants are not satisfied with the documents disclosed, they can make a request for specific documents: and if it is refused, apply to the Judge.
So much for the order for ship's papers. But should the plaintiff's action be stayed until he complies with the order? Under the old practice before 1936 the action was automatically stayed until the order was complied with. Under the rules now, it is in the discretion of the Judge whether to order a stay, or not. In exercising this discretion, it is important that the action should not be unduly delayed pending the discovery. Afterall, if the defendants have- sufficient reason for alleging scuttling, they should have sufficient material to plead it in their defence, and to give particulars of it. Accordingly, as Mr. Justice Kerr said: "in many if not most cases, it may be much more sensible to refuse a stay". The defendants should deliver their defence, giving the best particulars they can at that stage: and then give further particulars after the discovery has been had, or, if need be, amending the defence after discovery. But, on the other...
To continue reading
Request your trial
-
Various Airfinance Leasing Companies (listed at Schedule A to the Claim Form) (2) ALIF Segregated Portfolio Company (for and on behalf of itself and each of ALIF Segregated Portfolio Company 2, ALIF Segregated Portfolio Company 4 and ALIF Segregated Portfolio Company 5) v Saudi Arabian Airlines Corporation
...policy” and often or invariably only in respect of “scuttling allegations” ( Probatina Shipping Co Ltd v Sun Insurance Office Ltd [1974] 1 QB 635, 641–642). This, therefore, is an exceptional power and the absence of any rule in the CPR permitting a similar order to be made in other circums......
-
K/S Merc-Scandia XXXXII v Underwriters of Lloyd's Policy No 25T 1054 and Others
...as Bouton v Houlder Brothers & C0 [1904] 1KB 784; Leon v Casey [1932] 2KB576 and Probatina Shipping Co Ltd v Sun Insurance office Ltd [1974] QB 635 in which various Courts have suggested that, historically, one of the reasons why the special discovery order of "ship's papers" in marine i......
-
Manifest Shipping Company Ltd v Uni-Polaris Shipping Company Ltd (Star Sea)
...Ltd [1994] CLC 373. Port Line Ltd v Ben Line Steamers LtdELR [1958] 2 QB 146. Probatina Shipping Co Ltd v Sun Insurance Office LtdELR [1974] QB 635. Royal Boskalis v MountainUNK (unreported, 18 December 1995, Rix J). Société Anonyme des Minerais v Grant Trading Inc (“The Ert Stefanie”)UNK [......
-
Manifest Shipping Co. v. Uni-Polaris Shipping Co. et al., (2001) 266 N.R. 50 (HL)
...Union v. Transport Industries Insurance Co. (1985), 4 N.S.W.L.R. 107, refd to. [paras. 56, 100]. Probatina Shipping v. Sun Insurance, [1974] Q.B. 635, refd to. [para. Leon v. Casey, [1932] 2 K.B. 576, refd to. [para. 58]. Twizell v. Allen (1839), 3 M. & W. 337 (Ex. Ct.), refd to. [para.......
-
Post-Contract Disclosures in Insurance Law
...see generally, Leon v. Casey [1932] 2 K.B. 576 at 519 per Scrutton LJ; and Probatina Shipping Co. Ltd. v. Sun Insurance Office Ltd. [1974] 1 Lloyd's Rep. 369 at 371 per Lord Denning M.R. 14 Banque Financère v. Westgate Insurance Co. [1990] 2 All E.R. 947 at 960 per Lord Jauncey of Tullichet......