The Brimnes ; Tenax Steamship Company Ltd v The Brimnes (Owners)
| Jurisdiction | England & Wales |
| Date | 1972 |
| Court | Queen's Bench Division (Admiralty) |
Shipping - Charterparty - Time charter - Hire due monthly in advance - Right to withdraw ship “failing … punctual … payment” - Late tender of hire by charterers - Whether owners entitled to withdraw ship - Payment of hire to be made “in cash” - Meaning - Payment made by charterers by Telex transfer order - When payment effected - Notice of withdrawal of ship sent by owners by Telex - Message not noticed immediately - Acceptance by parties of use of Telex during normal business hours - When notice of withdrawal received - Ships' Names - Brimnes
By the terms of a time charter, owners had the right to withdraw their ship “failing … punctual … payment of the hire,” such payment to be made in New York “in cash” monthly in advance. A notice purporting to withdraw the ship on the ground of late payment of the month's hire due on April 1, 1970, was sent by Telex by the owners' London agents to the charterers on April 2 while the charterers' instructions by Telex transfer order to credit the owners' account at a New York bank were being carried out through the agency of that bank.
The precise times of payment and receipt by the charterers of the notice of withdrawal were in issue.
In an action by the charterers claiming that the owners' withdrawal of the ship had been wrongful and in breach of the charterparty: —
Held, giving judgment for the owners, (1) that under the charterparty the owners had become entitled to withdraw the ship on the ground of the charterers' failure to pay the April the words “failing … punctual … payment” in the charter 1970 hire by April 1, 1970 (post, p. 409E); and that, in view of party, they would have been entitled to do so even if the notice of withdrawal had been received by the charterers after payment had been made (post, p. 409B–D).
Per curiam. The obligation to pay the hire punctually was not an essential term of the contract (post, p. 408B, C).
(2) That the words “payment … in cash” comprehended any commercially recognised method of transferring funds the result of which was to give the transferee the unconditional right to their immediate use (post, p. 400A–C); that in the present case where transfer was effected by Telex transfer order the time of payment had been when the New York bank had debited the charterers' agents' account and credited that of the owners (post, p. 402C, D); that, in view of the parties' acceptance of the use of Telex during normal business hours the owners' notice of withdrawal of the ship had been received by the charterers when it had arrived on the machine in their office notwithstanding that it had not been noticed until the following morning (post, p. 406A, B), and that, on the facts the withdrawal had occurred before the late payment of the hire and the owners had in any event validly withdrawn the ship (post, p. 406C, D).
The following cases are referred to in the judgment:
Central Estates (Belgravia) Ltd. v. Woolgar (No. 2) [
Clarke v. Grant [
Dies v. British and International Mining and Finance Corporation Ltd. [
Doe d. Nash v. Birch (
Ellis v. Rowbotham [
Empresa Cubana de Fletes v. Lagonisi Shipping Co. Ltd. [
Entores Ltd. v. Miles Far East Corporation [
Green's Case (
Italian State Railways v. Mavrogordatos [
Langfond (Owners) v. Canadian Forwarding & Export Co. (
Macdonald v. Dennys Lascelles Ltd. (
Maclaine v. Gatty [
Matthews v. Smallwood [
Mayson v. Clouet [
Pennant's Case, Harvy d. Pennant v. Oswald (
Tankexpress A/S v. Compagnie Financiere Belge des Petroles S.A. [
Tonnelier v. Smith (
Ward v. Day (
Wehner v. Dene Steam Shipping Co. [
Wulfsberg & Co. v. Weardale Steamship (Owners) (
Zim Israel Navigation Co. Ltd. v. Effy Shipping Corporation [
The following additional cases were cited in argument:
Blumberg v. Life Interests and Reversionary Securities Corporation Ltd. [
British and Beningtons Ltd. v. North Western Cachar Tea Co. Ltd. [
Car and Universal Finance Co. Ltd. v. Caldwell [
Creery v. Summersell and Flowerdew & Co. Ltd. [
Elson v. Prices Tailors Ltd. [
Felix Hadley & Co. v. Hadley [
Financings Ltd. v. Baldock [
Foster (E.) & Co. v. J. P. Best & Co. (
Heisler v. Anglo-Dal Ltd. [
Henderson v. Arthur [
Hone, In re [
Hughes v. Pump House Hotel Co. Ltd. [
Keith, Prowse & Co. v. National Telephone Co. [
Leslie Shipping Co. v. Welstead (The Raithwaite) [
Mihalis Angelos, The [
No. 58 (
Sigalas v. Schweizerische Reederei A.G. (
Spargo's Case (
Stewart & Co. v. Van Ommeren (London) Ltd. [
Stockloser v. Johnson [
Suisse Atlantique Societe d'Armement Maritime S.A. v. N.V. Rotterdamsche Kolen Centrale [
Tyrer & Co. and Hessler & Co., In re (
ACTION
By a time charterparty on the New York Produce form dated November 22, 1968, the defendants, Reinante Transoceanica Navegacion S.A. (“the owners”) chartered their vessel Brimnes to the plaintiffs, Tenax Steamship Co. Ltd. (“the charterers”). On April 2, 1970, the owners withdrew the ship on account of alleged late payment of hire. By writ issued on April 15, 1970, and subsequent statement of claim the charterers claimed that the owners' withdrawal was wrongful and in breach of the charterparty. By their defence issued on November 10, 1970, the owners counterclaimed freight, hire or other remuneration for the completion of the voyage and for repairs. By agreement between the parties, the issue of liability was tried first. The facts are stated in the judgment.
Robert Goff Q.C. and Basil Eckersley for the charterers.
Anthony Evans Q.C. and Mark Saville for the owners.
July 28. BRANDON J. read the following judgment. The court has before it claims and counterclaims arising out of a time charterparty relating to the motor vessel Brimnes made between the plaintiffs as charterers and the defendants as owners. The main question is whether the owners were entitled to withdraw the ship from the charterers' service on the ground of the charterers' admitted failure to pay hire punctually. On the footing that the owners were not so entitled, the charterers have a claim for damages, the amount of which is in dispute. On the footing that the owners were so entitled, they have a counterclaim for moneys due on a quantum meruit or otherwise, the amount of which is also in dispute. Other claims and counterclaims are raised on the pleadings, but the parties have reached agreement as to how these should be disposed of and the court does not therefore have to adjudicate Upon them. It has further been agreed that, in relation to the claim and counterclaim arising out of the withdrawal of the ship, the question of liability shall be decided first and the question of the amount of the claim or counterclaim, as the case may be, decided later.
The Brimnes is a Liberian motor vessel belonging to the port of Monrovia of 15,756 tons deadweight capacity. I shall refer to her as the ship. The charterers are Tenax Steamship Co. Ltd., an English company carrying on business at 85, London Wall, London, E.C.2. The owners are Reinante Transoceanica Navegacion S.A., a Panamanian company carrying on business in Greece and dealing in relation to the charterparty through agents in London.
The history of the matter, as I find it, is as follows. The ship was originally owned by the charterers. In or about November 1968, the charterers agreed to sell the ship to the owners on the basis that she would be immediately time-chartered back to the charterers. The purchase of the ship by the owners was financed by a loan from their bankers, Morgan Guaranty Trust Co. of New York, whom I shall call M.G.T. Repayment of the loan and payment of interest on it were secured, first, by a mortgage of the ship, and, secondly, by an assignment of the charter hire by the owners to M.G.T.
The charterparty which came into being pursuant to these arrangements was made in London on November 22, 1968. Its main terms were: (1) that the charter period should be 24 to 26 months, (2) that hire should be at the rate of U.S. $3.80 per deadweight ton per calendar month and should be paid monthly in advance in cash to M.G.T., New York, for the credit of the owners' Brimnes account; and (3) that, failing punctual payment of hire, the owners should have the right to withdraw the ship.
The ship was delivered to the charterers under the charterparty on December 18, 1968. The...
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