Rhesa Shipping Company S.A. v Edmunds (Popi M)

I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Brandon of Oakbrook. I agree with it, and for the reasons given by him I would allow this appeal.

I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Brandon of Oakbrook. I agree with it and for the reasons which he gives I would allow the appeal.

I have had the advantage of reading in draft the speech of my noble and learned friend, Lord Brandon of Oakbrook. For the reasons which he gives in his speech I too would allow this appeal.

This appeal arises out of two consolidated actions in the Commercial Court in which the owners of the vessel " Popi M" ("the ship") claim against hull underwriters for the alleged total loss of the ship by perils of the sea. The shipowners succeeded at first instance ( Bingham J.) and an appeal by underwriters to the Court of Appeal (Sir John Donaldson M.R. and O'Connor and May L.JJ.) was dismissed. Underwriters now, with the leave of the Appeal Committee, bring a further appeal to your Lordships' House.

My Lords, the appeal does not raise any question of law, except possibly the question what is meant by proof of a case "on a balance of probabilities." Nor do underwriters challenge before your Lordships any of the primary findings of fact made by Bingham J. The question, and the sole question, which your Lordships have to decide is whether, on the basis of those primary findings of fact, Bingham J. and the Court of Appeal were justified in drawing the inference that the ship was, on a balance of probabilities, lost by perils of the sea.

In approaching this question it is important that two matters should be borne constantly in mind. The first matter is that the burden of proving, on a balance of probabilities, that the ship was lost by perils of the sea, is and remains throughout on the shipowners. Although it is open to underwriters to suggest and seek to prove some other cause of loss, against which the ship was not insured, there is no obligation on them to do so. Moreover, if they chose to do so, there is no obligation on them to prove, even on a balance of probabilities, the truth of their alternative case.

The second matter is that it is always open to a court, even after the kind of prolonged inquiry with a mass of expert evidence which took place in this case, to conclude, at the end of the day, that the proximate cause of the ship's loss, even on a balance of probabilities, remains in doubt, with the consequence that the shipowners have failed to discharge the burden of proof which lay upon them.

This second matter appears clearly from certain observations of Scrutton L.J. in La Compania Martiartu v. The Corporation of The Royal Exchange Assurance [1923] 1 K.B. 650. That was a case in which the Court of Appeal, reversing the trial judge, found that the ship in respect of which her owners had claimed for a total loss by perils of the sea, had in fact been scuttled with the connivance of those owners. Having made that finding, Scrutton L.J. went on to say, at p. 657:

"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 leaves the Court doubtful what is the real cause of the loss, the assured has failed to prove his case."

While these observations of Scrutton L.J. were, having regard to his affirmative finding of scuttling, obiter dicta only, I am of opinion that they correctly state the principle of law applicable. Indeed counsel for the shipowners did not contend otherwise.

My Lords, the relevant findings of fact, made by Bingham J. after a hearing which occupied 12 days, were as follows:

My Lords, with regard to the cause of the ship's loss, the shipowners relied at one time on negligence of the crew (which was also covered by the relevant policies) as an alternative to perils of the sea. Subsequently, however, the shipowners accepted that, even if the loss had been contributed to in some way by negligence of the crew, such negligence could not, in all the circumstances of the case, be regarded as the proximate cause of the loss. The shipowners' case accordingly rested, and rested only, on loss by perils of the sea.

It is important to observe that this was not a case of a ship being lost with all her crew in circumstances when the immediate cause of the entry into her of sufficient water to make her sink is unexplained. On the contrary Bingham J. was able to make clear and positive findings with regard, firstly to the way in which water entered the ship, namely, through a large aperture in the shell plating on her port side in way of the engine room; and, secondly, with regard to the manner in which the water, having once entered the engine room, later flooded the two after holds as well, making it inevitable that the ship should sink. In the state of knowledge which existed it is not surprising to find that the shipowners were strenuously pressed, both at the pleading stage and during the trial before Bingham J., to specify the perils of the sea on what they relied as having been the proximate cause of creating the aperture in the ship's shell plating which led to her loss.

The shipowners relied in their pleadings, and sought to rely at the trial, on the...