Westoll v Lindsay
| Jurisdiction | Scotland |
| Judgment Date | 15 June 1916 |
| Docket Number | No. 92. |
| Date | 15 June 1916 |
| Court | Court of Session |
Lord Dewar, Lord President, Lord Johnston, Lord Mackenzie, Lord Skerrington.
Ship—Affreightment—Charter-party—Demurrage—Exceptions—Strikes—Delay ‘by reason of’ a strike—Ship arriving after termination of strike—Berthing delayed by congestion at the port—Damages.
A charter-party, which allowed ten days on demurrage beyond the lay-days at a specified payment per day, contained a clause providing that, if the cargo could not be discharged ‘by reason of’ a strike or lockout, ‘the days’ should not count during the continuance thereof, and also providing that ‘in case of any delay by reason of the before-mentioned causes no claim for damages’ should lie. Owing to congestion at the port of discharge, due to a strike which had ended before the vessel arrived, she did not obtain a berth until the expiry of the lay-days, and ten days were required for her discharge.
In an action for a sum representing demurrage for these ten days, held (rev. judgment of Lord Dewar) that, as the strike had terminated before the ship's arrival, the clause of exemption was inapplicable, and decree granted.
Moor Line v. Distillers Co., 1912 S. C. 514, distinguished.
On 22nd October 1913 James Westoll, managing director of the steamship ‘Gladys Royle,’ of Sunderland, brought an action against William N. Lindsay, grain merchant, Leith, in which he claimed payment of £400 as demurrage incurred through delay in the discharge of the vessel.
The following facts were admitted:—
By charter-party between the pursuer and Messrs Louis Dreyfus & Co., London, dated 15th July 1913, it was inter alia agreed that the ‘Gladys Royle’ should load, at Sulina and Novorossisk, a cargo of grain, and carry it to Leith. The charter-party contained the following clauses:—‘(7) Twenty-one running days, Sundays, Good Friday, Easter Monday, Whit Monday, and Christmas Day excepted, are to be allowed the said freighters (if the steamer be not sooner despatched) for loading and unloading, and ten days on demurrage over and above the said lay-days at fourpence per ton on the steamer's gross register tonnage per running day.’‘(13) If the cargo cannot be loaded or discharged by reason of a strike or lock-out of any class of workmen essential to the loading or discharge of the cargo, the days shall not count during the continuance of such strike or lockout. A strike of the receiver's men only shall not exonerate him from any demurrage for which he may be liable under this charter, if by the use of reasonable diligence he could have obtained other suitable labour, and in case of any delay by reason of the before-mentioned causes, no claim for damages shall be made by the receivers of the cargo, the owners of the ship, or by any other party under this charter.’ The demurrage rate fixed by clause 7 was subsequently altered to £40 per day by a letter dated 22nd July 1913.
Nine days in all were occupied in loading the steamer at Sulina and Novorossisk. She arrived at Leith on 25th August 1913, and on the following day notice of readiness to discharge was sent to the defender as the holder of a bill of lading which stipulated that demurrage should be payable in accordance with the charter-party. The defender accordingly, under the charter-party, had twelve days within which to take delivery of the cargo; but, owing to the congested state of the port in consequence of a strike which had terminated on 18th August, all the berths suitable for the discharge of the ‘Gladys Royle’ were occupied by other steamers, and she did not obtain a berth till Saturday, 6th September. Discharge commenced on Monday, 8th September, and was completed on 18th September.
The defender, founding upon clause 13 of the charter-party, averred that ‘any delay which took place in the discharge of the “Gladys Royle” occurred by reason of the strike above referred to.’ It was admitted by the parties in a joint minute of admissions that, if this defence was unsound, the ship was on demurrage from the morning of 9th September, the lay days having expired on 8th September.
The pursuer pleaded inter alia;—(2) The defender having detained the said vessel on demurrage for ten days, is bound to pay the agreed-on rate of demurrage in terms of the charter-party and the letter condescended on, and decree therefor should be pronounced against the defender.
The defender pleaded inter alia;—(3) The defender not being liable to pay any sum to the pursuer as demurrage under the bill of lading, charter-party, and letter condescended on, the defender should be assoilzied.
On 17th December 1914 the Lord Ordinary (Dewar) assoilzied the defender from the conclusions of the summons.*
The pursuer reclaimed, and the case was heard before the First Division on 6th and 7th June 1916.
Argued for the reclaimer:—Clause 13, in so far as it dealt with a ‘claim for damages,’ had no application here, the present action being for demurrage, and not for damages. According to the authorities ‘demurrage’ was a sum fixed for the use of a ship during a stipulated period.1‘Damages,’ on the other hand, was the amount payable for detention of the ship beyond that period, and required to be assessed.2 The claim for demurrage arose from contract, whereas that for damages was founded upon fault and was only competent when breach of the contract had occurred. In the present case the claim was for demurrage, and accordingly the strike clause so far as it dealt with damages did not apply. On a fair construction of that clause it was clear that the distinction between demurrage and damages was present to the minds of the contracting parties.
The expression ‘the days’ occurring in the first sentence could only refer to the provisions of clause 7, where ‘demurrage’ was used in the sense now contended for, and in the second sentence ‘demurrage’ and ‘damages’ were sharply contrasted. Moreover, the introduction of the ‘receivers’ emphasised the distinction, and indicated that damages proper and not demurrage must have been contemplated in the second branch of the sentence, for the receiver could not prosecute, although he might defend, a claim for demurrage. The Moor Line case1 was distinguishable on the facts. In that case the strike had occurred during the running of the lay-days, and the question which arose turned upon the interpretation of the phrase ‘days for discharging,’ which were held to mean lay-days. Had the lay-days expired before the strike occurred the controversy could not have arisen. Assuming, however, that damages covered demurrage, the strike clause nevertheless did not apply. The first sentence of clause 13 provided that the ‘days’ should not count during the continuance of a strike or lockout of workmen ‘essential to the discharge,’ if, as a consequence thereof, discharge did not take place. The existence of a strike among these workmen qualified all the provisions of the clause, and it had been expressly incorporated, in the last branch of the second sentence, as a ground of exemption from a claim for damages, by the words ‘the before-mentioned causes.’ It was impossible, therefore, to plead the clause as a defence to the present claim. The strike had terminated before the ‘Gladys Royle’ arrived at Leith, and the delay in discharging her had not been due to an existing strike, but to the charterer's inability to procure a berth. No doubt, a berth was not available in consequence of congestion at the port following upon the strike, but that was not sufficient. To found a defence upon the clause, the strike must actually have prevented or delayed discharge, and not merely rendered it impossible for the ship to obtain her berth because some other ship occupying that berth had been prevented from completing her discharge earlier.2 The decision in the Moor Line case1 could not be read as supporting the charterer's contention. That case turned upon a question of relevancy, and the Second Division, following Leonis Steamship Co. v. BankUNK,3 allowed a proof. The LeonisUNK case,3 however, was in direct contrast to the present as regarded the strike clause, for the contingency which there occurred had been expressly provided for. The Moor Line case,1 accordingly, had no direct bearing upon the question raised in this branch of the case; and, in any event, if the decision was to be regarded as an authority for the proposition that the consequences of a strike constituted a ground for exemption, it must be held as
overruled by the judgment of the House of Lords in Central Argentine Railway v. MarwoodELR.1
Argued for the respondent;—The pursuer's claim was barred by the concluding sentence of clause 13, for delay had occurred ‘by reason of a strike.’ The word ‘damages’ which was there used included demurrage. Strictly speaking ‘demurrage’ was, as Lord Trayner explained in Gardiner v. Macfarlane, M'Crindell, & Co.SC,2 an agreed-on and certain sum payable under the contract for delay beyond a stipulated period; but commercially its meaning had been extended to cover damages, whether liquid or illiquid, for detention of the ship,3 and in the Moor Line case4 it had been held that a claim for damages included a claim for demurrage. There was therefore authority for the contention that the last sentence of clause 13 covered claims for demurrage. The charter-party was a commercial document, and must be construed from the business man's point of view. Broadly...
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