Strathfillan (Owners of S.S.) v Ikala (Owners of S.S.)
| Jurisdiction | England & Wales |
| Judge | The Lord Chancellor,Viscount Sumner,Lord Carson,Lord Warrington of Clyffe,. |
| Judgment Date | 30 November 1928 |
| Judgment citation (vLex) | [1928] UKHL J1130-3 |
| Date | 30 November 1928 |
| Court | House of Lords |
[1928] UKHL J1130-3
House of Lords
Lord Chancellor.
Lord Sumner.
Lord Buckmaster.
Lord Carson.
Lord Warrington of Clyffe.
After hearing Counsel on Thursday, the 25th day of October last, upon the Petition and Appeal of the Owners of the Steamship "Strathfillan," 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 19th of December 1927, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied, or altered, and that the Petitioners might have the relief prayed for in the Appeal, or 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 "Ikala," 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 19th day of December 1927, complained of in the said Appeal, be, and the same is hereby, Affirmed, and that the said Petition and Appeal be, and the same is hereby, dismissed this House: And it is further Ordered, That the Appellants do pay, or cause to be paid, to the said Respondents the Costs incurred by them in respect of the said Appeal, the amount thereof to be certified by the Clerk of the Parliaments.
My Lords,
The question involved in this case relates to the measure of damage recoverable against a wrong-doer for the loss of use of a chattel.
The Appellants are an English Company whose business consists in the importation to this country and the sale here of lubricating oil. In the year 1917 the business of importing oil was strictly regulated by the British Government; the question of the proper use of tonnage was of paramount importance to the nation, and the Government decided the amount which each importer should be allowed to bring in; the actual quota allowed to the Appellants was 1,188,700 barrels. The Appellants owned two steamers, one of which was known as "The Strathfillan." These two vessels were exclusively used by the Appellants for the importation of oil, but were quite insufficient to carry the quantity which they were allowed to import. The British Government allotted space in liners to the Appellants to the extent of 657,400 barrels, and the balance of the necessary shipping space had to be provided by the chartering of outside vessels with the permission of the Shipping Controller. On the 8th August, 1917, the "Strathfillan" was damaged by collision with the "Ikala;" the owners of the "Ikala," who are the present respondents, admitted their liability to pay 70 per cent. of the damage thereby occasioned, and the present suit is brought by the Appellants to ascertain and recover that amount. The Appellants delivered a claim consisting of nine different items; the only item now in dispute is the claim for loss of use of the vessel, which was put at 14 days and claimed at £574 15s. 2d. per day. The damages were assessed by the learned Registrar and Merchants; they allowed 13 days as the time during which the Appellants were deprived of the use of the "Strathfillan" by reason of the collision, and that finding is not in issue. No evidence was called on behalf of the Respondents at the Reference, and the only relevant evidence was that of Mr. Balsillie, the Assistant Manager of the Shipping Department of the Appellant Company. After explaining the regulation of imports and the space allowed to the Appellants in liners, Mr. Balsillie stated that in addition to the "Strathfillan" the Appellants had a similar vessel slightly larger, "but the majority of the transport that we had to provide for our proportion was in chartered vessels, which chartered vessels were all controlled, and we had to get permission from the Shipping Controller even to charter them. If any of our own vessels were delayed that increased the quantity of chartered tonnage that we had to get." He went on to explain that when they ascertained that the "Strathfillan" would be delayed they tried to obtain permission from the Government to purchase another vessel, but that that plain failed; that the Appellant Company hired extra tonnage and paid 230s. on a net Charter Form; and he stated that the Appellants' claim for detention was on the basis of what they had paid themselves to do the work the "Strathfillan" would have done. In re-examination a question was put to him in this form;
"In consequence of not getting her to carry goods you had to charter at these high rates?", to which he replied "Yes, we had to maintain it."
This answer led to a further cross examination on behalf of the respondents, which began by the question
"Do you say because of the 14 days' delay by this collision you had to charter in October?"
the answer was "Certainly, to the extent of that loss." He was asked to explain the answer, and he said "It means this; that she was 14 days delayed repairing the actual damage, and then there were another 11 days. There were 25 days' use of that vessel gone—lost for ever. Twenty-five days' loss of work puts the whole programme back, which means that we have to charter the equivalent of the work that vessel would have done during those 25 days, and we charge you for your proportion." A little later on he said "Every delay had to be made up, at the cost we paid for people to do the work."
The learned Registrar and Merchants allowed the Appellants a sum equal to 13 days' loss of use of the vessel at £550 per day. In the Registrar's reasons he says "The Plaintiffs claimed for the loss of time on a commercial basis, and evidence was given that in consequence of this delay of the "Strathfillan," and for other purposes it was necessary to charter other vessels, and this evidence was uncontradicted. The rate of hire at that time for vessels carrying oil was fixed by the Ministry of Shipping, and the claim was made on this basis."
The Respondents appealed from this decision to the President of the Probate, Divorce and Admiralty Court, but the learned President confirmed the Registrar's award. From this decision the Respondents appealed to the Court of Appeal, who reversed the decision and remitted the case to the learned Registrar and for the purpose of assessing the amount of compensation due to the owners of the "Strathfillan" for the loss to them for 13 days of the use of the said vessel as a profit earning vessel.
The Court of Appeal were struck by the fact that the Appellants in fact imported into this country the whole of their quota for 1917, and that the "Strathfillan" completed her last voyage in 1917 on the 8th December, so that even if the voyage had been completed 13 days earlier it would have been impossible for her to make another voyage during that year. The Court of Appeal deduced from this fact that even if there had been no collision the Appellants would have been unable to make use of the "Strathfillan" during the 13 days, and therefore they held that it was impossible to allow to the Appellants the cost of hiring a neutral ship as a substitute for that period.
My Lords, in my view this decision is based upon a fallacy. It is quite true that the Appellants could not have used the "Strathfillan" in any case to bring in part of their 1917 quota during that year. But the evidence showed that the "Strathfillan" was being used during the whole of 1917 and 1918, except when she was in dry dock for the repairs due to the collision and for certain alterations which the owners effected at the same time. It was proved that in October and November of 1917 the Appellants were chartering neutral vessels to carry oil to this country; and in my judgment the fact that the 1917 quota was completed and that the "Strathfillan" contributed her full share to that quota is quite irrelevant. The work that she would have been doing during the period of her disablement was the work which she actually did as soon as the disablement came to an end, namely, the importation of oil for 1918.
Under these circumstances, the observations made by the Court of Appeal as to the possibility of what Lord Atkin describes as infructuous use of the vessel" did not arise. In my judgment the measure of damage for the loss of use of a commercial chattel such as this which was being used by the injured party for commercial purposes is the commercial value to him of the chattel during the period for which he was deprived of its use. If in fact he hired another chattel to take its place the hire paid would prima facie be the amount of the damage which he sustained; but if no other chattel could be found to replace the injured one I do not see that that alters the measure of damage; it merely deprives the Court of one possible means of assessing it. In such a case other methods of ascertaining the loss must be employed; and the obvious method is to find out what was the market value of chattels of that kind during the time that the Plaintiff is deprived of their use, and to see whether the facts prove that it was worth the Plaintiff's while to pay at least that amount for such a chattel. In view of the conditions which prevailed as to tonnage at the end of 1917, the suggestion that unless the Appellants prove that they actually hired a particular vessel to replace the one damaged they may have to rest content with interest on the capital cost of the damaged vessel for 13 days is to my mind so repugnant to common sense and reality as to amount to a denial of justice to the injured party.
In the present case it is proved by Mr. Balsillie's evidence that the Appellants were in...
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