Tojo Maru (Owners) v N.v Bureau Wijsmuller; The Tojo Maru
| Jurisdiction | England & Wales |
| Judge | THE MASTER OF THE ROLLS,LORD JUSTICE SALMON,LORD JUSTICE KARMINSKI |
| Judgment Date | 30 July 1969 |
| Judgment citation (vLex) | [1969] EWCA Civ J0730-6 |
| Date | 30 July 1969 |
| Court | Court of Appeal (Civil Division) |
[1969] EWCA Civ J0730-6
In The Supreme Court of Judicature
Court of Appeal
Civil Division
On appeal from Order of Lord Justice Willmer, sitting as an additional Judge of the Probate, Divorce and Admiralty Division.
The Master of the Rolls (Lord Denning)
Lord Justice Salmon and
Lord Justice Karminski
Mr DESMOND ACKNER, Q.C., Mr G.R.A. DARLING, Q.C., and Mr ANTHONY EVANS (instructed by Messrs Richards, Butler & Co.) appeared on behalf of the Appellants.
Mr MICHAEL KERR, Q. C., Mr J.F. WILLMER, Q.C., and Mr N.A. PHILLIPS (instructed by Messrs Whitehouse-Vaux & Elborne) appeared on behalf of the Respondents.
In February 1965 a Japanese tanker, the "Tojo Maru", loaded a cargo of oil at Mena al Ahmadi in the Persian Gulf. She was leaving the port when she was in collision with an Italian tanker, the "Fina Italia". The "Tojo Maru" was badly damaged. She had a gaping wound in her side. A Dutch salvage tug "Groningen" rushed to the scene and offered help. On the 28th February, 1965, the Master of the "Tojo Maru" accepted the offer. He signed a salvage agreement on behalf of his owners. So did the Master of the tug on behalf of the Dutch salvors. It was a Lloyd's Standard Form of Salvage Agreement headed "No Cure — No Pay". It only contained one clause which is material here: "The services shall be rendered and accepted as salvage services upon the principle of 'No Cure — No Pay'". That is the principle of maritime law which is accepted all the world over.
The Dutch salvors quickly got to work. They sent out a party of eight men by air from Holland. They were all experts in salvage work and included a Chief Diver named Vis. They made a salvage plan. One important thing was to make a big steel patch and place it over the wound in the side of the "Tojo Maru" and make it watertight.
All went for a time according to plan. On the 4th April, 1965, a bigger Dutch tug, the "Jacob Van Heemskerck", arrived and relieved the "Groningen", which left.
On the morning of the 11th April, 1965, the steel patch was being hauled, as close as possible to the wound. But the time was not yet ripe to bolt it to the side. The reason was because the "Togo Maru" had a lot of gas inside her and this had to be got rid of. Yet at this point the Chief Diver, Vis, made a bad mistake. He tried to bolt the plate into position before the gas was cleared. He went down into the water with a special gun called a Cox Bolt Gun. He fired it under water. The bolt went through the shell plating of the "Tojo Maru". There was an explosion inside the vessel, followed by otherexplosions. Fire broke out and much damage was done.
The Arbitrator found that Vis was acting "contrary to orders". His action "was a breach of the duty owed by the contractors to the owners of the vessel and was negligent and was the sole cause of the explosions. The ensuing damage was foreseeable. The absence of fault or privity of the contractors was established".
It took over a fortnight to get the "Tojo Maru" in a fit state to be towed away. On the 27th April, 1965, she was ready for towage. She was taken to Singapore, where more repairs were done. Thence to Kobe, where she was fully repaired.
The owners of the Dutch tug now claim salvage reward. The owners of the "Tojo Maru" counterclaim damages for the negligence of Diver Vis. The issues went to arbitration before Mr J.V. Naisby, Q.C. He found the following figures:-
(i) The claim for salvage reward. If no damage had been done by Vis, the salved value of vessel and freight would have been £1,532,389; but the damage done by Vis cost £202,514 to repair. So the net salved value of vessel and freight was £1,329,875. The Arbitrator took that figure as the basis for calculating the remuneration payable to the salvors. He awarded them £125,000 for their services.
(ii) The counterclaim for negligence. The owners of the "Tojo Maru" suffered loss owing to the damage done by Vis, which came to £331,767, made up as to £202,514 for the cost of repairing the damage and as to £129,253 for the delay and loss of profit. The Arbitrator held that the owners were entitled to counterclaim £331,767 from the salvors.
(iii) Set-off. The Arbitrator held that there should be a set-off of the sums due on either side. He deducted the £125,000 from the £331,767 and held that the salvors were liable to the owners for £206,767.
(iv) Limitation of liability. But the Arbitrator held that the salvors were entitled to limit their liability according to thetonnage of their tug, the "Jacob Van Heemskerck". The limitation fund of that tug is £10,725. 11s. 0d. So he awarded the owners of the "Tojo Maru" £10,725. 11s. 0d. against the salvors and gave the salvors nothing.
LORD JUSTICE Willmer agreed with the Arbitrator on most things, but disagreed with him on the limitation of liability. He held that the Dutch salvors were not entitled to limit their liability. So they got nothing for all their work and were liable to the owners of the "Tojo Maru" for the whole balance of £206,767. The Dutch salvors appeal to this Court.
The first point in the appeal is this: Are the owners of the "Tojo Maru" entitled on their counterclaim to recover from the owners of the Dutch tug full damages for the negligence of Diver Vis? If this point were to be determined by the principle to which we are accustomed by English common law, the owners of the "Tojo Maru" would be so entitled. They would be liable to pay the salvage award but would be entitled to counterclaim for the whole £331,767. It would be like a contract for work and labour to be done for an agreed sum. If the work is done, but in the doing of it the contractor has been guilty of negligence, he is entitled to recover the contract sum but the employer can cross-claim for the cost of putting right the defects and recover in addition any consequential damage: see Davis v. Hedges (1871) L.R. 6 Q.B., 67; or, alternatively, the employer can set it up in diminution or extinction of the price and in addition claim any extra damage: see Mondel v. Steel (1841) 8 M. & W., page 858; Dakin & Co. Ltd. v. Lee, 1916 1 K.B., page 566.
But this case is not to be determined by the common law of England. It is to be determined by the maritime law of the world which the English Court of Admiralty has done so much to form. "It is not the ordinary municipal law of the country but it is the law which the English Court of Admiralty, either by Act of Parliament or by reiterated decisions and traditionsand principles has adopted as the English maritime law": see The Gaetano and Maria (1882) 3 P.D. at page 143 by Lord Justice Brett. This is especially the case with the law of salvage which has "a peculiarly equitable character": see The Five Steel Barges, (1890) 15 P.D. at page 146 by Sir James Hannen. It is in no way dependent on contract: see The Hestia, 1895 P., 199, by Mr Justice Bruce. As a great American Judge, Mr Justice Story, has said, "Salvage is a mixed question of private right and public policy": see The Albion, (1861) Lushington at page 284.
We should, therefore, eschew our common law notions and seek for the principles of the maritime law. The Court of Admiralty has always encouraged those who go to the rescue of others in distress. This is high policy. "It is of the utmost importance to the safety of shipping", said Dr Lushington, "that the owners of steam tugs and other salvors should know that this Court is inclined to reward liberally unusual efforts to assist vessels in distress, whenever those efforts are successful": see The Albion (1861) Lushington, page 284. The Court of Admiralty is not only liberal. It holds out powerful incentives to salvors. One is the principle of "No Cure No Pay". If successful, the salvor gets a high reward. If unsuccessful, he gets nothing. Lord Phillimore puts it thus in a classic passage: "Success is necessary for a salvage reward. Contributions to that success, or, as it is sometimes expressed, meritorious contributions to that success, give a title to salvage reward. Services, however meritorious, which do not contribute to the ultimate success, do not give a title to salvage reward": see The s.s. Melanie, 1925 A.C at page 262. That is very different from the common law. A doctor who tries to save a patient gets paid, even though the patient dies. But a salvor, who tries to save a ship, gets nothing if the ship is lost. Another important incentive which runs, I believe, through the cases in the Court of Admiralty is that if the salvor is successful in saving the vessel but by some mischance, lack ofskill, or even want of care, does some injury to it whilst he is saving it, he is not liable to pay the full amount of the damage he has done. Salvors might well be discouraged from all attempts to rescue if they were to be exposed to damages for everything which went amiss. The only effect of negligence is that his salvage remuneration may be somewhat less on that account. That, too, is very different from the common law, which holds a contractor liable to pay the full amount of any damage done by his negligence.
Seeing that this lies at the heart of the matter, I will take pains to prove it. The authorities show beyond question that, in assessing the amount of salvage remuneration, the conduct of the salvor is a material consideration. He is rewarded highly for great service, poorly for bad service. If he has behaved in a violent or overbearing manner, it may diminish the amount of his reward, even though he has done no damage: see The Maria (1882) 7 P.D., page 203. So also if he has been negligent and, by so doing, damaged the vessel he is seeking to save, it may diminish the amount of his reward,...
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