Tempus Shipping Company Ltd v Louis Dreyfus & Company Ltd
| Jurisdiction | England & Wales |
| Judge | Viscount Dunedin,Lord Warrington of Clyffe,Lord Atkin,Lord Thankerton |
| Judgment Date | 26 June 1931 |
| Judgment citation (vLex) | [1931] UKHL J0626-1 |
| Court | House of Lords |
| Date | 26 June 1931 |
[1931] UKHL J0626-1
House of Lords
Viscount Dunedin.
Lord Warrington of Clyffe.
Lord Atkin.
Lord Thankerton.
Lord Macmillan.
After hearing Counsel, as well on Thursday the 30th day of April, as on Friday the 1st, and Monday the 4th days of May last, upon the Petition and Appeal of Louis Dreyfus and Company, of Holland House, Bury Street, in the City of London, 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 29th of July 1930, 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 Tempus Shipping Company, Limited, 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 29th day of July 1930, 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 Respondents are the owners of the ss. Campus, and the Appellants are the owners of a cargo of maize and grain shipped on board the Campus on a return voyage from the River Plate to the United Kingdom. Shortly after starting on the homeward voyage fire broke out in the ship's bunkers, which heated and destroyed a part of the maize and threatened to spread and destroy more cargo and endanger the ship. The Captain accordingly put into the port of Monte Video, threw part of the maize overboard, and put more of it into lighters, some of which, from its condition, had to be destroyed. In doing so, general average expenses were incurred.
The present action was raised at the instance of the ship against the cargo owners for a contribution to the general expenses so incurred. The cargo owners denied liability and counterclaimed for the value of the maize destroyed. This they did upon the ground that the fire was due to bad bunker coal or, in other words, the unseaworthiness of the ship. The case was heard before Wright J., who held that the ship was unseaworthy. He held that the claim by the ship for general average contribution was not good and that the counter claim for damage to the cargo was bad in respect of the provisions of Section 502 of the Merchant Shipping Act of 1894. That Section, so far as the material part is concerned, is as follows:—
"The owner of a British sea-going ship, or any share therein, shall not be liable to make good to any extent whatever any loss or damage happening without his actual fault or privity in the following cases, namely, (1) Where any goods, merchandise, or other things whatsoever taken in or put on board his ship are lost or damaged by reason of fire on board the ship."
Wright, J., held that the loss happened without the actual fault or privity of the owners and that the destroyed maize was lost by reason of fire on the ship.
An appeal being taken to the Court of Appeal, that Court unanimously upheld Wright J's., judgment as to the counter claim, but differed as to the claim for general average. Scrutton, L.J., agreed with Wright J., but Greer and Slesser, L.Js., held that the claim for general average succeeded.
Appeal is now being taken to this House by the cargo owners.
There are thus two questions distinct in themselves, and it is expedient to consider them separately.
First, as to the claim of the cargo owners for the destruction by fire, the fire being caused by a condition of things which amounted to unseaworthiness. Now, as to authoritative decision on this point, so far as the Courts below were concerned there can be no doubt. Where there was an exception in the B/L of fire on board, it had been held that that did not protect the ship when the fire was due to unseaworthiness. But whether the statutory exception against fire was elided by proving that the fire was due to unseaworthiness came up for decision in the Virginia Case, 1912, 1 K.B. 229, where Bray, J., held that it was not, and his judgment was affirmed unanimously by the Court of Appeal in Ingram Royle v. Service Maritime, 1914, 1 K.B. 541. Now, these cases, though binding on the Court of Appeal, are not binding on your Lordships, and if you thought that they clearly were wrong, it would be your duty to hold that they were wrongly decided. But these cases were not only the unanimous decision of learned judges, but they have ruled the conduct of shipping for 17 years and it would obviously be against your Lordships' custom to disturb such a practice unless, as I say, you thought they were clearly wrong. My Lords, I cannot say any such thing. As far as my own opinion is concerned, I think they were rightly decided. No doubt the point was very arguable. The arguments pro and con are most clearly and candidly put by Kennedy, L.J., in the Virginia case. But what turned the scale was that, to come to the result opposite to that of the decision would be, as Vaughan Williams, L.J., put it "to change the words of the Section from 'a British sea-going ship' into 'a British sea-going seaworthy ship'". The Judges in the Virginia case, while thus pronouncing on the interpretation of Section 502, held that in that case Section 502 was impliedly excluded by the terms of the B/L, and the Appellant has put forward the same argument in this case. The same argument was urged in the case of Ingram Royle but was unsuccessful, it being pointed out that the reason of the exclusion in the Virginia case was based on the fact, not that the B/L mentioned fire as one of the exceptions, but that it went on in the concluding part to deal exhaustively with the question of seaworthiness, while in Ingram Royle's case there was no such concluding part. The same answer must be made in this case. In other words, the B/L equiparates with the B/L in Ingram Royle's case and not with the B/L in the Virginia case.
I am, therefore, for these reasons of opinion that the decision of the Courts below on the first point, that is to say the counter claim for damage to the maize, was right.
The second question, whether the ship could demand a general average contribution under the circumstances of the case, is not dealt with by direct authority. But there is a body of decided authority on several propositions and the question is how that general authority is to be applied to this case. That the expenditure here was of the class which gives rise to a claim for general average contribution is not denied. It was incurred in order to save the ship and cargo from the further peril from fire. "But then", say the Appellants to the Respondents, "the fire was caused by unseaworthiness due to your fault and therefore, on the authority of ( Schloss v. Heriot, 14 C.B.N.S. 59), an authority upheld by Strang Steel v. Scott & Co., ( 14 Ap. cas. 601) you cannot recover because it was your own fault which necessitated the average expenditure". To which the Respondents retort "It was settled by ( Carron Park 15 P.D. 203) and again by ( Milburn v. Jamaica Fruit Co. 2 Q.B. 1900, 540) that where there was an exception in the B/L against fault as causing fire, the rule has no application and the statutory exception against fire in Section 502 must have the same effect". These counter propositions, so far as based on the cases quoted, are all correct, so that the crucial question is whether the statutory exception of liability introduced by Section 502 has the same effect as had the exception in the B/L in Carron Park and Milburn. It is also possible to contend, and the Appellants' counsel did so contend, that the two cases of Carron Park and Milburn, which are not binding on your Lordships though they were on the Courts below, were wrongly decided.
It is, I think, best first to consider the ground on which the answer to a demand for contribution is made when the circumstances which give rise to the necessity for general average expenditure are due to the fault of the person claiming the contribution. The most authoritative statement is to be found in the Opinion of Lord Watson in Strang Steel. In that case, what caused the necessity of sacrificing something for the general safety of all was negligent navigation by the master. The loss incurred was by the jettison of cargo. The litigation arose in a somewhat peculiar way. The ship having arrived, the agents for the ship gave notice to all the consignees of cargo that they would not be allowed to remove their goods unless they made a deposit of 5 per cent. on the value "against probable average claims". In order to get their goods, certain consignees paid the deposit under protest and then raised action to get back the money so paid. They also said they had made a sufficient tender, but that aspect of the case may be disregarded. In their pleadings the Plaintiffs added a plea that they were not liable to contribute to general average on account of the ship or cargo (i.e., sacrificed cargo) because the jettison was rendered necessary by the negligence of the master. The Recorder at Rangoon, before whom the case was defended, gave effect to this plea and ordered the return of the money. This could only be right if under the circumstances there could not arise any general average claim. Lord Watson, in...
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