The Putbus
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE EDMUND DAVIES,LORD JUSTICE PHILLIMORE |
| Judgment Date | 07 March 1969 |
| Judgment citation (vLex) | [1969] EWCA Civ J0307-2 |
| Date | 07 March 1969 |
| Court | Court of Appeal (Civil Division) |
[1969] EWCA Civ J0307-2
The Master of The Rolls (Lord Denning),
Lord Justice Edmund Davies and
Lord Justice Phillimore.
In The Supreme Court of Judicature
Court of Appeal
(Appeal of Defendants (with leave) from Order of Mr. Justice Karminski on 10th October, 1968.
Mr. ANTHONY LLOYD, Q.C., and Mr. N. PHILLIPS (instructed by Messrs. Waltons, Bright & Co.) appeared on behalf of the Plaintiffs, Respondents.
Mr. B.C. SHEEN, Q.C., and Mr. M. THOMAS (instructed by Messrs. Ince & Co.) appeared on behalf of the Defendants, Appellants.
On the 25th November, 1967, there was a collision between two ships in the approach to the New Waterway at Rotterdam. One was a small East German vessel, the "Stubbenkammer". The other was a big English tanker, the "Zenatia". The "Stubbenkammer" sank. The Netherlands Government decided to raise the wreck of the "Stubbenkammer" and remove it because it obstructed the approaches to the New Waterway.
On the 26th April, 1968, the owners of the "Stubbenkammer" applied to the District Court at Rotterdam to fix the amount to which their liability was limited. On the 17th May, 1968, the Rotterdam Court fixed the amount at 353,653 guilders and 4 7 cents. That was about£4o,771. 13s.6d. in sterling. The owners of the "Stubbenkammer" paid it into the Court at Rotterdam.
On the 26th Kay, 1958, the sister ship of the "Stubbenkammer" entered the Port of London. She was the "Putbus" and owned by the same East German owners. On the 27th Kay, 1968, the English owners of the "Zenatia" brought an Admiralty action in rem against the owners of the "Putbus", claiming compensation for damages suffered by reason of the collision. The English owners applied to arrest the "Putbus", and she was arrested on that day. The damage to the "Zenatia" was not likely to exceed£30,000. On the 28th May, 1968, the owners of the "Putbus" provided security in£30,000 to meet the claim of the English owners arising out of the collision. It was given by W.K. Webster & Co., and was in these words:-
"To the owners of the 'Zenatia'. We guarantee to pay to you on demand such sums as may be found due to you from the owners of the 'Stubbenkammer' in respect of your claim, together with Interest and costs by the High Court of Justice in England or such sum as may be otherwise agreed provided that our total liability hereunder shall not exceed the sum of£30,000 plus interest and costs or the limit of liability of the owners of the 'Stubbenkammer' calculated in accordance with the English Merchant Shipping Acts plus interest and costs, whichever shall be the lesser amount."
The limit of liability under English law would be very nearly the same as in Netherland law. It would be£40,705. 18s.41/2d. The English owners accepted that guarantee as security for their claim. On the 29th May, 1968, the "Putbus" was released from arrest.
The owners of the "Putbus" now say that, having provided the limitation fund in Rotterdam for the£40,771. 13s.6d., they should not also be compelled to give security in London. So on the 14th June, 1968, the owners of the "Putbus' applied that the guarantee given in England should be released. On the 4th October, 1968, Mr. Justice Karminski refused to release the guarantee. The owners of the "Putbus" appeal to this Court.
The application to release is made under section 5 of the Merchant Shipping (Liabilities of Shipowners and Others) Act, 1958. We are told it is the first time that that section has had to be interpreted by the Courts. It was enacted in pursuance of the International Convention signed in russels on the 10th October, 1957. It has been ratified by seventeen countries, including the United Kingdom, but the ratification by the United Kingdom was subject to two reservations.
We have looked into the Convention, as we are entitled to do. The object is plain enough. If a ship is involved in a collision in circumstances in which the owner is entitled to limit his liability, then he should only be compelled to provide a limitation fund once and for all. If he makes it available in one country to meet all the limited claims, he should not be compelled to put up security for those claims in another country: or, if he is compelled to do so, he should be able to get the additional security released.
Although such is the object of the Convention, there are special considerations in respect of the cost of wreck-raising and wreck removal? and the United Kingdom, when ratifying the Convention, made a reservation on this point. So we cannot get much guidance from the Convention in respect of wreck-raising or wreck-removal. We have to go by the Act of Parliament.I will not read the section. It is not a piece of English. It is only a collection of word-symbols. The only thing to do is to take it word by word and phrase by phrase and try to apply it to this case.
It appears from section 5(1) and (2) (a) (b) that in order to get the security released, the East German owners must satisfy these conditions:-
(1) Under section 5(2)(b) the East German owners must show that the£40,771. 13s.6d. (which the East German owners have provided in Rotterdam in respect of their liabilities) is equal to or more than the limit under the English Acts, namely,£40,705. 18s.41/2d. That condition is clearly fulfilled.
(2) Under section 5(2) (a) the East German owners must show that such part of that£40,771. 13s.6d. "as corresponds to the claim" of the English owners will be actually available to them.
Those words "as corresponds to the claim" are the crucial words in the case. In order to understand what they mean, we have to go to section 5(4)(c). We were told that it is supposed to be a dictionary, but, if so, it is the worst dictionary that I ever did see. It is quite unintelligible. It says:
"When part only of the amount for which a guarantee was given will be available to a claimant, that part shall not be taken to correspond to his claim if any other part may be available to a claimant in respect of a liability to which no limit is set as mentioned" in section 503(1) of the Merchant Shipping Act, 1894, as amended by section 1 of the 1900 Act and section 2 of the 1958 Act."
I will apply that subsection as best I can.
"The amount for which a guarantee was given" is the amount of£40,771. 13s.6d. which the East German owners gave at Rotterdam. "Part only of" that£40,771. 13s.6d. will be available to the English owners: because there is another claimant, namely, the Dutch Government, whose claim may be£100,000, or more. There is, therefore an "other part" of the£40,771. 13s.6d. which may be available to that claimant, theDutch Government. So the question is whether that "other part" may be available "in respect of a liability to which no Halt is set by section 503 (as amended) of the Merchant Shipping Act, 1894".
It comes ultimately to this: what is the nature of the liability of the East German owners to the Dutch Government? Is it a liability to which a limit is set by section 503 (as amended) or not? If no limit is set by section 503, then the part available to the English owners does not "Correspond to their claim"; but, if it is a liability to which a limit is set by section 503, then it does "Correspond to their claim". Seeing that this is a liability arising under Dutch law, this must mean; is it a type of liability to which a limit is set by section 503 (as amended) or not?
In order to ascertain the type of liability there was expert evidence as to Dutch law. It showed quite clearly that the liability of the East German owners to the Dutch Government depended on whether the "Stubbenkammer" was at fault or not. If she was at fault, then the East German owners were liable, otherwise not. That is a liability of a type which is imposed by the common law of England, namely, a liability to damages for negligence. By our English law there is a public right of passage through our navigable channels, whether in a port or the approaches to it. That right is infringed when, through negligence on the part of the owners, a vessel has sunk in such a position as to cause obstruction in the channel. The public authority concerned - the Port Authority, or the Crown, as the case may be - is in duty bound to remove the obstruction, and, having done so, it has a common law right to recover against the owners, as damages, the reasonable cost of the work, see The Elle ( 1915 P. 111); and ( Dee Conservancy Board and Others v. McConnell 1928 2 K.B. 159).
The type of liability in Dutch law is, therefore, the same as in English law. Is it a type to which a limit is set by section 503, as amended? I think it is. First of all, it isa liability to damages for negligence, and not a liability to pay a debt. Thus, it is quite different 'from ( The Stonedale 1956 A.C. 1), when the liability was in debt, irrespective of negligence. Secondly, it was liability to damages "where rights are infringed": for the right of public passage is infringed through the negligent act or omission which caused the obstruction. Those words "where rights are infringed" were inserted in section 5(2) of the 1958 Act, so as to fill the gap disclosed by ( The Millieu 1940 p. 1). The draftsman has taken the very words used by Mr. Justice Lawton.
We are, therefore, able to answer the question which Viscount Simonds left open in The Stonedale No. 1 (1956 A.C.) at page 9, when he said: "It may have to be decided some day whether a shipowner faced with such a common law claim can successfully limit his liability In respect of it" under the Merchant Shipping Acts. The answer is that he can do so.
Seeing that it is a type of liability to which a limit, is set...
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