United States Shipping Board v Frank C. Strick & Company, Ltd
| Jurisdiction | England & Wales |
| Judge | The Lord Chancellor,Lord Atkinson,Lord Shaw of Dunfermline,Lord Sumner,. |
| Judgment Date | 07 May 1926 |
| Judgment citation (vLex) | [1926] UKHL J0507-2 |
| Date | 07 May 1926 |
| Court | House of Lords |
[1926] UKHL J0507-2
House of Lords
Lord Chancellor.
Viscount Haldane.
Lord Atkinson.
Lord Shaw.
Lord Sumner.
After hearing Counsel, as well on Tuesday the 9th, as on Thursday, the 11th, and Friday, the 12th, days of February last, upon the Petition and Appeal of the United States Shipping Board, 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 18th of December 1924, 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 Frank C. Strick and 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 18th day of December 1924, 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,
This Appeal is concerned with a claim for demurrage. The appellants, the United States Shipping Board, were the owners of a steamship called the "Hinckley," and chartered her to the respondents by a charter-party which provided that the ship should proceed to Delagoa Bay and there load a cargo of coal not exceeding 5,500 tons to be carried to Suez and there discharged. Clause 3 of the charter-party provided as follows:—
The cargo to be loaded, subject to port regulations, in regular turn as customary at the rate of 1,000 tons per day (excluding bunkering time, Sundays, Custom House, Colliery and local holidays, Easter Monday and Tuesday, Whit Monday and Tuesday, and three days following Christmas Day, and from 1 p.m. on Saturday or the day previous to any such holiday, to 7 a.m. on Monday or the day after any such holiday unless used), commencing when written notice is given of steamer being completely discharged of inward cargo and ballast in all her holds and ready to load, such notice to be given between business hours of 9 a.m. and 5 p.m., or 1 p.m. on Saturdays.
If detained longer, charterers to pay demurrage at the following rates: £300 (three hundred pounds) per running day or pro rata for part thereof.
The "Hinckley" arrived at Delagoa Bay and anchored within the commercial limits of that port on the 30th July 1920, and on the following day (the 31st July) her master gave notice of the ship being completely discharged and ready to load. At Delagoa Bay there are no docks, and there is only one berth or loading place at which one steamer at a time can lie and be loaded with coal; and the port regulations provide that all ships calling for coal shall load at this berth by means of the coaling appliance, and that ships shall be berthed at the coaling appliance in order of arrival. Accordingly if, when a ship arrives at the port, there are other vessels lying at the loading place or awaiting their turn to be berthed there, the ship has to lie out in the harbour (where she is still within the commercial limits of the port) until her turn for loading comes. When the "Hinckley" arrived at Delagoa Bay on the 30th July, a vessel was loading at the coal appliance and there were other vessels waiting their turn to load coal; and accordingly the "Hinckley" had to lie out in the harbour and await her turn. Her turn came on the 26th August, and at 9.10 a.m. on that day she got alongside the loading place; and the loading, which was conducted with despatch, was completed at 2.10 p.m. on the 28th August, Her cargo was 5,267 tons of coal, and if this were loaded at the rate of 1,000 tons a day it would take about five days and six hours to load; but, in fact, the loading was accomplished (as the above statement shows) in about two days and five hours, so that there was a considerable saving on the time allowed.
On the 5th October 1920 the charterers rendered an account to the owners for the balance of freight, from which they deducted £462 10 s. as despatch money for the time saved in loading. The balance shown by the account was paid to the owners, and the charterers had no further communication with them at that time; but in June 1922 the owners wrote to the charterers to say that their attention had been drawn to a claim for demurrage on the "Hinckley" for £6,397 1 s. 4 d. This claim was based upon the view that, the master's notice of readiness to load having been given at 11 a.m. on Saturday the 31st July 1920, the time for loading then began; and that, a Saturday afternoon and Sunday having intervened, the time for loading expired at 6.24 a.m. on the 7th August and the vessel was therefore on demurrage from that time until 2.10 p.m. on the 28th August. The owners also claimed payment of the £462 10 s. deducted from the freight as despatch money; but, as this claim stands or falls with the other, it need not be further mentioned. The claim was disputed and was referred to an arbitrator, who decided in favour of the owners (the present appellants) subject to a case which he stated for the opinion of the High Court. On the argument of the Case stated, Rowlatt J. confirmed the award; but on appeal to the Court of Appeal, that Court reversed the decision of Rowlatt J. and decided in favour of the charterers. The owners have now appealed to this House.
The view taken by Rowlatt J. was that the time for loading began to run when the notice of readiness to load was given, although the ship could not then commence loading but had to await her turn to be berthed. On the other hand the Court of Appeal held that the words in clause 3 "commencing when written notice is given of steamer being completely discharged of inward cargo and ballast in all her holds and ready to load" defined the period at which the obligation of the charterers to load in turn became binding, but that this obligation did not become actually operative until the time when the ship's turn to load arrived. The question which your Lordships have to determine is, which of these two views is correct?
My Lords, the general rules which in the absence of express words to the contrary govern the construction of charter-parties are now well settled. Where, as in this case, the stipulated destination of a ship is a port without further limitation, the ship is an "arrived ship" so soon as she reaches the commercial limits of the port. Where, as here, the charter-party provides for a notice of readiness to load being given by the master, such a notice may be given so soon as the ship is an arrived ship and is in fact ready to load. And where, as here, lay days are fixed, either by a number of days or by a specified daily rate of loading, those days begin to run on the giving of the notice of readiness to load, and as from that time the risk of delay by reason of local impediments falls upon the charterer and not upon the owner of the vessel. All this is clearly established by a series of authorities which cannot now be shaken, including ( Tapscott v. Balfour 1872, L.R. 8 C.P. 46), ( Thiis v. Byers 1876, L.R. 1 Q.B.D. 244), ( Nelson v. Dahl 1879, L.R. 12 Ch.D. 568), ( Pyman v. Dreyfus 1889, L.R. 24 Q.B.D. 152), ( Leonis v. Rank L.R. 1908, 1 K.B. 499), and ( Alexander v. Aktieselskabet Hansa L.R. 1920, A.C. 88).
But these rules, like all other rules of construction, must yield to the express terms of the contract entered into between the parties; and if the contract contains terms which are inconsistent with the application of the general rules of construction, the contract and not the rules must prevail. Now, the contract in this case is that the cargo shall be loaded "subject to port regulations in regular turn as customary at the rate of 1,000 tons per day"; and if there were nothing more, I doubt whether anyone would say that the charterer had contracted to load out of his regular turn as fixed by the port regulations, or to pay demurrage or damages if he failed to do so. If the contract had been only to load "in the usual and customary manner," those words must have been held (as in Tapscott v. Balfour) to refer to the mode and not to the time of loading; but the contract is to load "in regular turn as customary," and the expression "in regular turn" has reference to succession, and therefore to the time and not only to the mode of loading. The contract is to load in regular turn at a daily rate of speed, that is to say, to commence loading when the turn arrives and then to continue at the stipulated speed; and if this were all, the charterer could hardly be held to be in default or liable to demurrage only because he had awaited his turn to be berthed before commencing to load.
The cases in which the expression "in turn" or other like expressions have been considered appear to me to be wholly consistent with this view. In ( Robertson v. Jackson 1845, 2 C.B. 412) the charterers had engaged that the vessel should carry a cargo of coal to Algiers and there be unloaded at the average rate of not less than 20 tons of coal per day (Sundays excepted), and if detained on their part during a longer period they engaged to pay for such detention at the rate of £5 per day, "to reckon from the time of the vessel being ready to unload and in turn to deliver"; and it was held that the words...
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