"Valverda."

JurisdictionUK Non-devolved
JudgeLord Roche,Lord Maugham,Lord Russell of Killowen,Lord Wright,Lord Atkin
Judgment Date22 December 1937
Date1937
Year1937
CourtHouse of Lords
Commissioners for Executing Office of Lord High Admiral of United Kingdom
and
Owners of Motor Vessel "Valverda", Her Cargo and Freight.

[1937] UKHL J1222-3

Lord Atkin

Lord Russell of Killowen

Lord Wright

Lord Maugham

Lord Roche

House of Lords

Lord Atkin

My Lords,

1

In this case I have had the opportunity of reading the Opinion which my noble and learned friend Lord Wright is about to deliver. I entirely agree with it, and I have nothing to add.

Lord Russell of Killowen

My Lords,

2

I have had the same advantage, and I also concur.

Lord Wright

My Lords,

3

The Appellants, whom I shall refer to as the Admiralty, obtained from Sir Norman Raeburn, K.C., an Award in their favour of £11,000 for salvage services rendered to the Respondents' motor vessel "Valverda," her cargo and freight, by vessels belonging to His Majesty. The Award was in the form of a special case subject to the opinion of the Court on the question of law stated in it. If the Court should answer that question in a sense contrary to the opinion of the Arbitrator, the Award was to be for £6,500. Branson J., before whom the special case came, took the same view as the Arbitrator, but his decision was reversed by the Court of Appeal by a majority, composed of Slesser and Scott LJJ., Greer L.J. dissenting.

4

The central question in the case is the meaning and effect of section 557 (1) of the Merchant Shipping Act, 1894. This section is in the following terms:

"557. (1) Where salvage services are rendered by any ship belonging to Her Majesty or by the commander or crew thereof, no claim shall be allowed for any loss damage, or risk caused to the ship or her stores, tackle or furniture, or for the use of any stores or other articles belonging to Her Majesty, supplied in order to effect those services, or for any other expense or loss sustained by Her Majesty by reason of that service, and no claim for salvage services by the commander or crew, or part of the crew of any of Her Majesty's ships shall be finally adjudicated upon, unless the consent of the Admiralty to the prosecution of that claim is proved."

5

This provision was amended by the Merchant Shipping (Salvage) Act, 1916, which was described in the Preamble as "An Act to authorise the recovery of salvage in respect of services rendered by certain ships belonging to His Majesty." Section 1 of that Act provided as follows:—

"1. Where salvage services are rendered by any ship belonging to His Majesty and that ship is a ship specially equipped with salvage plant, or is a tug, the Admiralty shall, notwithstanding anything contained in section Five hundred and fifty-seven of the Merchant Shipping Act, 1894, be entitled to claim salvage on behalf of His Majesty for such services, and shall have the same rights and remedies as if the ship rendering such services did not belong to His Majesty"

6

The Admiralty's primary contention was that the operation of Section 557 was excluded and superseded by a Salvage agreement entered into between the Admiralty and the Respondents. They alternatively contended that the agreement was not for salvage but for work and labour, and took the case out of the law of maritime salvage, so that the section did not apply at all. In the further alternative they contended that the section did not prohibit all claims for salvage, but merely excluded certain specific elements, leaving the Admiralty entitled to claim in respect of anything not expressly excluded, in particular for the use or services of the vessels. The dispute did not affect the claims in respect of such of the Admiralty vessels employed in the salvage as fell within the Amending Act of 1916 or the claims of the officers and crews of all the vessels employed. These claims were not contested and were covered by the alternative Award of £6,500.

7

The "Valverda" is a motor vessel of 8,806 tons gross register. She was at the time of the salvage services on a voyage from Curacoa to Lands End for orders with a cargo of petroleum, Ship, cargo and freight were valued at £92,616 in all. On the 21st January, 1935, when she was in about Lat. 25° 17' N., Long. 52° 00' W., a fire broke out in her engine room. She sent out by wireless an SOS signal. H.M.S. "Frobisher", a cruiser of 9,860 tons displacement, proceeded in answer to the signal, reached her on the 22nd January, 1935, took her in tow as she was helpless and towed her to Bermuda, a distance of about 900 miles. The "Guardian", a smaller cruiser of 3,050 tons, also came up to assist and rendered some help. At a later stage, salvage services were also rendered by two craft within the description of the Act of 1916, and some assistance was given by a Fleet Auxiliary, the "Orangeleaf". The Arbitrator found that the services were difficult and dangerous and involved serious risk to the salving vessels (save the Fleet Auxiliary), and their personnel. On the 25th January, 1935, the Respondents in England signed the Admiralty Standard Form of Salvage Agreement which was also signed on behalf of the Admiralty. The parties were by then fully apprised by wireless of the position of the "Valverda" and of the names and character of H.M. vessels which were rendering the salvage services. The Respondents made at the time no suggestion that any distinction should be drawn between the classes of Admiralty vessels which might participate in the services.

8

The Arbitrator found that the Admiralty incurred expenses, which were reasonable expenses, in rendering the salvage services, amounting to £4,770 19s. 2d. These expenses consisted of extra consumption of fuel and stores, of the value of gear and wires lost, of the cost of repairing damage sustained and other matters in connection with the salving vessels, which in addition to the two cruisers and the "Orangeleaf," included also H.M.S. "Sandboy" and the yard craft "Creole." Of the £4,770 19s. 2d., £864 os. 3d. was for repairs to the "Sandboy" and £264 0s. 10d. was for extra fuel and stores consumed by the "Sandboy" and "Creole." The Arbitrator found that the "Sandboy" and "Creole" were vessels within the Act of 1916, whereas the "Frobisher," "Guardian" and "Orangeleaf" were not. It was common ground that the Admiralty in their claim were representing also the claims of the officers and crews of the salving vessels, and were trustees pro tanto on their behalf of any award, and would apportion and distribute the appropriate amount among them according to the Admiralty Rules in that regard. The necessary permission of the Admiralty for the officers and crews to claim was produced de bene esse to the Arbitrator. The question stated by the Arbitrator was whether the Admiralty were entitled in law to salvage remuneration in respect of the services of H.M.S. "Frobisher," H.M.S. "Guardian" and R.F.A. "Orangeleaf." He made his Award of £11,000 on the footing that they were so entitled. His alternative Award of £6,500 was on the footing that they were not.

9

The substance of the Salvage Agreement which was signed may be briefly summarised. It was on the Admiralty Standard Form of Salvage Agreement, described on its face as D.46 (a dockyard form) established October, 1917, Revised June, 1934. It bears no relation to, and contains no reference to, section 557. It was obviously and admittedly prepared in view, and for purposes, of the Act of 1916. Under the agreement the Admiralty agreed to use such endeavours as they or their officers might in their absolute discretion think fit to salve or assist the ship "Valverda" and her cargo and freight, and the owners engaged the services of the Admiralty for such purposes. It was stipulated that the agreement should relate back to the services already rendered before its execution. The remuneration, if not agreed, was to be fixed by arbitration in accordance with the provisions particularised in the relevant sections of the agreement, and was to consist, if the services were successful or beneficial, of a reasonable amount of salvage. Provision was made for the owners giving security on the termination of the service to the satisfaction of the Committee of Lloyds and pending the completion of the security the Admiralty were to have a maritime lien on the property salved for their remuneration. Clause 5 contained provisions which were to apply if the services were not successful or beneficial. In that event the actual out-of-pocket expenses incurred by or on behalf of the Admiralty in the endeavours to salve the ship, cargo and freight, together with compensation not exceeding £350 for any loss or damage incurred in such endeavours, was to be the measure of the remuneration to the Admiralty, but there was not to be included in the expenses or compensation any charge for the use of any ship or tug belonging to His Majesty.

10

It was strenuously contended on behalf of the Admiralty that this agreement, which was deliberately entered into by the Respondents with full knowledge of all the material facts, overrode the provisions of Section 557. It was pointed out that the beneficial, onerous and expensive services were rendered in consideration of the Respondents' undertakings. His Majesty's vessels, even if by statute bound to stand by, were under no legal obligation to render salvage, and might have left the salvage operations to other vessels. It is true that the Admiralty in the King's Regulations have strongly inculcated on the officers and crews of His Majesty's ships that it is their duty to render assistance to vessels in distress, but that is a moral obligation and gives no legal rights to a shipowner, whereas the agreement did give legal rights to the Respondents, but only in consideration of the corresponding legal rights given to the Admiralty. It was urged that the Respondents had "contracted out" of the statute or had waived its benefit, and that the agreement was enforceable according to its apparent tenor in the...

To continue reading

Request your trial
21 cases
  • Goring, The (Admiralty)
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 25 February 1987
    ...is in other words by the English maritime law." 29 More specifically Lord Roche observed in Admiralty Commissioners v. Valverda (Owners) [1938] A.C. 173, 200: "The law of salvage as administered by the Court of Admiralty is a maritime law derived from ancient and various sources and develop......
  • Oppenheim v Tobacco Securities Trust Company Ltd
    • United Kingdom
    • House of Lords
    • 13 December 1950
    ...cases if in a poverty case this House had to consider them. But, as was observed by Lord Wright in Admiralty Commissioners v. Valverda [1938], A.C. 173 at 194, while "this House has no doubt power to over-rule even a long established course of decisions of the Courts, provided it has not it......
  • Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd
    • United Kingdom
    • House of Lords
    • 15 June 1942
    ...finally declaring the law, to reverse it, unless there are very special circumstances such as were recently considered in the Valverda, 1938, A.C. 173. On the other hand, in Lissenden v. Bosch, 1940, A.C. 412, the House has recently overruled a decision which had been acted upon in frequent......
  • Johnson v Moreton
    • United Kingdom
    • House of Lords
    • 27 July 1978
    ...[1956] S.C. 39, especially per Lord Sorn. I myself share the doubts of Lord Wright in Admiralty Commissioners v. Valverda Owners [1938] A.C. 173 at 185 as to whether the first of these cases was correctly decided; the point is now academic and cannot be tested since the Employers Liability ......
  • Request a trial to view additional results
2 books & journal articles
  • List of cases
    • South Africa
    • Transactions of the Centre for Business Law No. 2011-47, January 2011
    • 1 January 2011
    ...Shipbrokers v The Ship Off‌i Gloria [1993] 3 NZLR 576, see also The Off‌i GloriaAcrux, The [1965] P 391Admiralty Cmrs v Valverda (Owners) [1938] AC 173Advance, The 60 F 766 (1894)Aichhorn v The Ship MV Talbot (1974) 132 CLR 449Airservices Australia v Canadian Airlines International Ltd (199......
  • Introduction
    • South Africa
    • Transactions of the Centre for Business Law No. 2011-47, January 2011
    • 1 January 2011
    ...Bold Buccleugh (1851) 7 Moo PC 267 at 285; Price, op cit 52 n 52, at 3; Hutton, op cit n 54, at 88.137 Admiralty Cmrs v Valverda (Owners) [1938] AC 173 at 186.138 The Bold Buccleugh (1851) 7 Moo PC 267 at 284; The Halcyon Isle [1981] AC 221; Vanderwater v Mills 60 US 82 (1857).139 See Gilmo......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT