Mr Justice Flaux:
- This is the trial of preliminary issues as ordered by Aikens J on 27 June 2008. The Order provided that, subject to a list of agreed and/or assumed facts being agreed between the parties, the Court should proceed to the extent necessary on the basis that the facts alleged in the statements of case are true, save where the Court considers it inappropriate to do so.
The factual background
- On the basis of the assumed facts or what is agreed between the parties, the background to the dispute can be stated relatively briefly as follows. The Claimant is the disponent owner of a cruise ship, the VAN GOGH. In 2006 the ship was chartered by the Claimant to Travelscope Cruises Limited, a cruise operator. In May 2006, the ship was scheduled to perform a series of short cruises, each of about 6 days duration from Harwich to various Norwegian ports then back to Harwich. The scheduled departure dates from Harwich were 16, 22 and 28 May 2006.
- The first two cruises were performed. During those cruises, there were outbreaks on board of a gastrointestinal virus called norovirus, affecting significant numbers of passengers and crew. It is agreed that norovirus has the following characteristics: whilst unpleasant for those suffering from it, it is a relatively mild, well known and very common illness; it typically lasts 24 to 48 hours and has no long term effect and it affects between 600,000 and a million people in the UK each year, being particularly common in "semi-closed" environments like hospitals, schools and cruise ships. The Defendant would wish to qualify that by adding that it is temporarily disabling and can be fatal to the elderly or those in poor health.
- On her return from the first cruise the ship was inspected at Harwich on 22 May 2006 by various public health officials. During that second cruise, the Claimant monitored the incidence of the illness on board and put into effect its detailed "Gastrointestinal Illness Response Plan". On 27 May, before the ship's return to Harwich, a public health official was given information about the outbreak on board by the ship's doctor in a telephone call. Upon arrival at Harwich the following day, the ship's crew handed over a medical declaration to the ship's agent. It appears that of 744 people on board (225 of them crew) 93 had contracted the disease on that second cruise (80 passengers and 13 crew, only two of whom were deck crew).
- After arrival at Harwich, an intensive process of cleaning and sanitation of the ship started on the morning of 28 May. That process was apparently still taking place when the ship was visited later in the day by various officials including Captain Andrew Rudge, a Principal Surveyor/Surveyor in Charge with the Maritime and Coastguard Agency ("MCA"), an agency of the Department of Transport, the Defendant. At about 19.00 hours, Captain Rudge issued a Detention Notice to the Master. This was on a form headed "Notice of the Detention of a Ship for failure to comply with Merchant Shipping Legislation". This Notice is not on a statutory form but on one created by the MCA for such eventualities. The Notice then stated as follows:
"I, A Rudge, the detaining officer, in exercise of power contained in the legislation listed below hereby detain this ship because it fails to comply fully with statutory requirements. The ship is prohibited from going to sea or on a voyage until released by an officer of the [MCA]. If applicable, the Chief Officer of Customs will withhold clearance until he receives advice from me that the ship has been released. The relevant points are listed below."
- The box below that, headed "Statutory Requirement", has the words inserted: "MS Shipping Legislation. MS Act 1995". In the box "Ship does not comply because" is written "Outbreak of Norovirus on previous two cruises". At the bottom of the Notice appears the following:
"THE MASTER IS HEREBY INFORMED THAT THERE IS A RIGHT OF APPEAL AGAINST THIS DETENTION NOTICE. Advice on the appeals procedure is contained in a leaflet entitled "Arbitration on Detention of Merchant Ships and Fishing Vessels" (MSF 1704) which is available from the Detaining Officer."
- For the purposes of the determination of the preliminary issues (and particularly Issue 3) the Court is to assume that at the time that he issued the Detention Notice (which I will refer to as "the first notice") Captain Rudge was satisfied of the matters set out in Paragraph 17.1 to 17.6 of the Defence which can be summarised as follows:
i) The occurrence of norovirus on the two cruises meant that there was a very high risk that further infection and illness would occur amongst passengers and crew during the course of the proposed third cruise due to commence on 28 May 2006. In those circumstances, the environment for persons on board the ship posed a risk to health.
ii) The presence of the virus meant that the crew would be at risk of infection and/or re-infection and hence there was a real risk of crew members becoming incapacitated, so that they would be unable to respond properly to an emergency situation. The danger would be exacerbated by the presence of large numbers of sick passengers making evacuation slower and more difficult. In these circumstances, the environment for persons on board the ship was also unsafe.
iii) In the light of the fact that there had been outbreaks of the illness on the two previous cruises, the minimum reasonably practicable steps that were necessary to ensure that the environment on board would be safe and without risk to health were that the ship remain in port for 48 hours before the next cruise and any ill crew should be isolated, the crew monitored for any further outbreaks and the ship steam cleaned.
- Captain Rudge has sworn a short Affidavit dated 30 July 2008 in compliance with the Order of Aikens J. It is agreed that the Court should assume that the facts contained in that Affidavit are true. In it Captain Rudge explains that after leaving the ship on the evening of 28 May, he continued to consider the detention and at home that evening prepared a second Detention Notice. This was not taken on board the ship or sent to anyone at that time.
- The second notice is dated 28 May 2006. It is headed "Notice of the Detention of a Ship as Dangerously Unsafe". The notice then states:
"I, A Rudge, having inspected the above ship, am of the opinion that it is unfit to proceed to sea or on a voyage without serious danger to human life having regard to the nature of service for which the vessel is intended. In exercise of the powers in section 95 of the Merchant Shipping Act 1995, the ship is hereby prohibited from going to sea or on a voyage until released by an officer of the [MCA]. If applicable, the Chief Officer of Customs will withhold clearance until he receives advice from me that the ship has been released. The grounds of detention are."
- Below this, the grounds stated are:
"Outbreak of norovirus on two previous cruises. Over 100 passengers and crew affected on last seven day cruise. Director of Public Health advised that the vessel should remain docked for 48 hours to monitor crew and vessel."
The rubric at the bottom of the notice about arbitration was the same as on the first notice.
- Captain Rudge returned to the vessel two days later at about 15.20 hours on 30 May 2006. According to his Affidavit, in the passenger lounge shortly after arriving on board, he handed the Master a copy of the second notice and also the leaflet "Arbitration on Detention of Merchant Ships and Fishing Vessels" and its associated leaflet "Notice of Reference". Following his re-inspection of the ship and a review of the situation on board, he was satisfied that the detention could be lifted. He issued a Notice of Release to the Master and the ship's superintendent at about 19.45 hours and left the ship about twenty minutes later.
- Notwithstanding receipt of the leaflets concerning arbitration which made it clear that any arbitration has to be commenced within 21 days of receipt of the Detention Notice, the Claimant did not commence arbitration within that period. It is apparent that by 7 July 2006, the claimant had instructed Thomas Cooper & Stibbard to act on its behalf, since they wrote to the MCA on that date. I have not seen that letter but was invited to look at the reply from the MCA dated 21 July 2006, which I did de bene esse. It is clear from that letter that the MCA was saying that the detention had been justified because Captain Rudge had concluded that the ship was dangerously unsafe within sections 94 and 95 of the Merchant Shipping Act 1995 ("the Act"). It was not suggested in that letter that the detention had also been under Regulation 28 of the Merchant Shipping and Fishing Vessels (Health and Safety at Work) Regulations 1997 ("the 1997 Regulations"). Indeed, the first time that the Defendant sought to justify the detention by reference to those Regulations was when the Defence was served on 29 March 2007.
The relevant legislation
- It is convenient at this stage to set out the legislation which is relevant to the issues which I have to decide. Sections 94 to 97 of the Merchant Shipping Act 1995, as subsequently amended, provide so far as relevant as follows:
"94 Meaning of "dangerously unsafe ship"
(1) For the purposes of sections 95, 96, 97 and 98 a ship in port is "dangerously unsafe" if, having regard to the nature of the service for which it is intended, the ship is, by reason of the matters mentioned in subsection (2) below, unfit to go to sea without serious danger to human life.
…
(2) Those matters are—
(a) the condition, or the unsuitability for its purpose, of—
(i) the ship or its machinery or equipment, or
(ii) any part of the ship or its machinery or equipment;
(b) undermanning;
(c) overloading or unsafe or improper loading;
(d) any other matter relevant to the safety of the ship;
and are referred to in those sections, in relation to any ship, as "the matters relevant to its safety".
(3) Any reference in those sections to "going to sea" shall, in a case where the service for which the ship is intended consists of going on voyages or excursions that do not involve going to sea, be construed as a reference to going on such a voyage or excursion.
95 Power to detain dangerously unsafe ship
(1) Where a ship which is-
(a) in a port in the United Kingdom…
appears to a relevant inspector to be a dangerously unsafe ship the ship may be detained.
(2) …..The power of detention conferred by subsection (1) above is exercisable in relation to foreign ships as well as United Kingdom ships.
(3) The officer detaining the ship shall serve on the master of the ship a detention notice which shall—
(a) state that the relevant inspector is of the opinion that the ship is a dangerously unsafe ship;
(b) specify the matters which, in the relevant inspector's opinion, make the ship a dangerously unsafe ship; and
(c) require the ship to comply with the terms of the notice until it is released by a competent authority.
(4) In the case of a ship which is not a British ship the officer detaining the ship shall cause a copy of the detention notice to be sent as soon as practicable to the nearest consular officer for the country to which the ship belongs.
(5) In this section—
"competent authority" means any officer mentioned in section 284(1); and
"relevant inspector" means any person mentioned in paragraph (a), (b) or (c) of section 258(1).
96 References of detention notices to arbitration
(1) Any question as to whether any of the matters specified in relation to a ship in a detention notice in pursuance of section 95(3)(b) in connection with any opinion formed by the relevant inspector constituted a valid basis for that opinion shall, if the master or owner of the ship so requires by a notice given to the relevant inspector within 21 days from the service of the detention notice, be referred to a single arbitrator appointed by agreement between the parties for that question to be decided by him.
(2) Where a notice is given by the master or owner of the ship in accordance with subsection (1) above, the giving of the notice shall not suspend the operation of the detention notice unless, on the application of the person requiring the reference, the arbitrator so directs.
(3) The arbitrator shall have regard, in coming to his decision, to any other matters not specified in the detention notice which appear to him to be relevant to whether the ship was or was not a dangerously unsafe ship.
(4) Where on a reference under this section the arbitrator decides as respects any matter to which the reference relates, that in all the circumstances the matter did not constitute a valid basis for the inspector's opinion he shall either cancel the detention notice or affirm it with such modifications as he may in the circumstances think fit; and in any other case the arbitrator shall affirm the notice in its original form.
(5) The arbitrator shall include in his decision a finding whether there was or was not a valid basis for the detention of the ship as a dangerously unsafe ship.
97 Compensation in connection with invalid detention of ship
(1) If on a reference under section 96 relating to a detention notice in relation to a ship—
(a) the arbitrator decides that any matter did not constitute a valid basis for the relevant inspector's opinion, and
(b) it appears to him that there were no reasonable grounds for the inspector to form that opinion,
the arbitrator may award the owner of the ship such compensation in respect of any loss suffered by him in consequence of the detention of the ship as the arbitrator thinks fit.
(2) Any compensation awarded under this section shall be payable by the Secretary of State."
- Section 284 of the Act then provides that in certain circumstances, proceeding to sea or ordering the ship to sea otherwise than in accordance with a Detention Notice shall constitute a criminal offence by the Master or by the shipowner.
- The Merchant Shipping and Fishing Vessels (Health and Safety at Work) Regulations 1997 were made pursuant to powers conferred by sections 85 and 86 of the Merchant Shipping Act 1995. Section 85 as subsequently amended provides so far as relevant as follows:
"85 Safety and health on ships
(1) The Secretary of State may by regulations (in this Act referred to as "safety regulations") make such provision as he considers appropriate for all or any of the following purposes—
(a) for securing the safety of United Kingdom ships and persons on them, and for protecting the health of persons on United Kingdom ships;
(b) for securing the safety of other ships and persons on them while they are within United Kingdom waters and for protecting the health of persons on ships other than United Kingdom ships while they are within United Kingdom waters.
- Section 86 provides so far as relevant as relevant as follows:
"86 Provisions supplementary to section 85: general
(1) Safety regulations may—
(a) make different provision for different circumstances and, in particular, make provision for an individual case;
(b) be made so as to apply only in such circumstances as are prescribed by the regulations;
(c) be made so as to extend outside the United Kingdom."
- The relevant provisions in the 1997 Regulations are as follows:
"4— Persons on whom duties are imposed
(1) It shall be the duty of every–
(a) employer; and
(b) any other person upon whom a duty is imposed by these Regulations,
to comply with the provisions of these Regulations.
(2) Where a person in paragraph (1) does not have control of the matter to which the regulation relates because he does not have responsibility for the operation of the ship, then any duty imposed by that regulation shall also extend to any person who has control of that matter.
5.— General duties
(1) The employer shall ensure the health and safety of workers and other persons so far as is reasonably practicable, having regard to the following principles–
(a) the avoidance of risks, which among other things include the combating of risks at source and the replacement of dangerous practices, substances or equipment by non-dangerous or less dangerous practices, substances or equipment;
(b) the evaluation of unavoidable risks and the taking of action to reduce them;
….
(2) Without prejudice to the generality of the duty under paragraph (1), the matters to which [that] duty extend[s] shall include in particular–
..
(e) maintenance of all places of work in the ship in a condition that is, so far as is reasonably practicable, safe and without risk to health;
….
(g) provision and maintenance of an environment for persons aboard ship that is, so far as is reasonably practicable, safe and without risk to health;
28.— Inspection and detention and other measures in respect of ships registered outside the United Kingdom
(1) A relevant inspector may inspect any ship which is not a United Kingdom ship when the ship is in a United Kingdom port, and if satisfied that the ship does not conform to the standards required of United Kingdom ships by these Regulations, may—
(a) send a report to the government of the country in which the ship is registered, and a copy thereof to the Director General of the International Labour Office; and
(b) where conditions on board are clearly hazardous to health and safety—
(i) take such measures as are necessary to rectify those conditions, or
(ii) detain the ship,
provided that the measures specified in sub-paragraph (a) and (b) may be taken only when the ship has called at a United Kingdom port in the normal course of business for operational reasons.
(2) If either of the measures specified in paragraphs (1)(b) are taken, the relevant inspector shall forthwith notify the nearest maritime, consular or diplomatic representative of the State whose flag the ship is entitled to fly.
(3) The relevant inspector shall not in exercise of his power under this regulation detain or delay the ship unreasonably.
29. Enforcement of detention
Where a ship is liable to be detained under these Regulations, section 284(1) to (5) and (8) of the Act (which relates to the detention of the ship) shall apply as if for the words "this Act", wherever they appear, there were substituted "the Merchant Shipping and Fishing Vessels (Health and Safety at Work) Regulations 1997".
30. Compensation
Sections 96 and 97 of the Act (Arbitration and Compensation) shall apply in relation to a detention notice or order under these Regulations as they apply to a detention notice under section 95(3) of the Act, and in such application, "relevant inspector" means a person making an inspection under these Regulations."
The preliminary issues
- The preliminary issues ordered by Aikens J are as follows:
i) If the statutory criteria set forth in the 1997 Regulations and/or Section 94 and 95 of the Merchant Shipping Act 1995 were satisfied such that the Defendant had power on the date of issue of the first notice to detain the ship pursuant to the powers conferred by Regulation 28 of the Regulations and/or Section 95 of the Act, was the form of the first notice sufficient in law for the purpose of a valid detention under Regulation 28 and/or Section 95?
ii) (To the extent that the question remains live in light of the answer given by the Court to issue (1)) was the detention valid if the Defendant did not at any time until after the release of the ship from detention specifically identify the 1997 Regulations as the source of the Defendant's power to detain the ship?
iii) Where it appears to an inspector that a ship is dangerously unsafe for the purposes of Section 95:
a) Must the inspector have reasonable grounds for any such opinion for any detention of the ship to be valid?
b) If yes, are the facts pleaded by the Defendant in paragraphs 17 to 21 of the Defence capable of constituting reasonable grounds in law?
iv) If the detention of the ship was invalid, did the Defendant wrongfully interfere with the ship?
v) Does the Court have power to order statutory compensation under section 97 of the Act?
Issues 1 and 2
- Issues 1 and 2 can conveniently be considered together. In their Skeleton Arguments both parties concentrated on Issue 1 and made no separate submissions on Issue 2. However, as often happens during oral argument, the case assumed a somewhat different complexion and it was to Issue 2 that the oral submissions were primarily addressed. The issue was also somewhat refined, it being agreed that the issue the Court could and should usefully decide was whether, if Captain Rudge did not have in mind or consider the 1997 Regulations when he issued the first notice, that invalidated any detention in so far as it was sought to be justified under those Regulations.
- On the material before the Court, it seems likely that at the time that he issued the first notice, Captain Rudge was intending to act under Sections 94 and 95 of the Act. I say this because, on his own evidence in his Affidavit, it is clear that once he went home and thought about it, he prepared the second notice specifically under those sections, using a special form of Notice applicable to those sections. It is also of some relevance that the MCA letter refers to the powers being exercised under those sections.
- Although there is no evidence about this, it would seem unlikely that Captain Rudge as a Principal Surveyor was unaware of the 1997 Regulations, but there is nothing in the material before the Court to suggest that he specifically considered those Regulations or thought that he was acting under Regulations 5 and 28, when he issued the notice. Mr Richard Lord QC, who appears for the Claimant, submits that the absence of subjective consideration of the 1997 Regulations is fatal to any attempt by the Defendant to justify now the detention under Regulation 28. Mr Lord submits that Captain Rudge can hardly have been exercising a power under the Regulation if he did not even have it in mind at the time and that it is not possible to validate what would otherwise be an invalid exercise of a power of detention under Sections 94 and 95, by seeking to say retrospectively that the power could have been exercised under Regulation 28, when it was not.
- It is important to note at this stage, in case there has to be a subsequent hearing at which evidence is called, that Mr Lord accepts that (at least so far as Issue 2 in isolation is concerned) if Captain Rudge did have the 1997 Regulations in mind when he issued the first notice and was intending to act under the Regulations (albeit in addition to Sections 94 and 95), it would not matter if he did not have the specific Regulation number to hand. At the moment though, there is no evidence that he had the Regulations in mind at all, let alone that he was purporting to act pursuant to them. Indeed, as I have said, the material before the Court suggests that he was only considering and acting pursuant to Sections 94 and 95.
- Mr David Goldstone QC for the Defendant submits that the question I have to consider is exclusively one of construction of Regulation 28, not one of constitutional law or principle. He submits that on its true construction, the Regulation does not require the surveyor to have the particular provision subjectively in mind, let alone refer to it in the Detention Notice. He submits that all that the Regulation requires is that the surveyor is satisfied that, on the facts, the ship does not "conform to the standards required of United Kingdom ships by these Regulations". He further submits that these words do not assist the Claimant's argument since they are equally consistent with either party's case.
- Thus, he submits that all that has to be shown to justify the detention under Regulation 28 is that, on the facts, the ship did not comply with the standards, namely that the ship was not safe and without risk to health and that there were reasonably practicable steps that could be taken to remedy the situation. On the assumption as to the facts which the Court is to make for the purposes of the preliminary issues, those matters are amply made out. It matters not that the surveyor did not have the Regulations in mind and was not purporting to act pursuant to them.
- Attractively though Mr Goldstone's submissions on this point were put, I cannot accept them. As a matter of construction of the Regulation, it seems to me that the words: "conform to the standards required of United Kingdom ships by these Regulations" are predicated upon the surveyor at a minimum having in his mind, at the time that he issues a Detention Notice for non-conformity, what standards the Regulations require. How otherwise can he form a reasonable view (as Regulation 28(3) in effect requires) that the ship does not conform with the relevant standards? Furthermore, whether viewed as a matter of construction of Regulation 28 or as a matter of broad principle, I do not see how it can be said that a detention can be justified retrospectively by reliance on a power under a Regulation which the surveyor neither had in mind when he acted to detain the ship, nor was purporting to exercise.
- I can see how if the matter were being arbitrated, the arbitrator might take account of the fact that an invalid detention purportedly effected under Sections 94 and 95 could in fact have been validly issued under Regulation 28, in determining how much compensation to award the claimant. However, I do not see how a notice which was invalid when issued could be retrospectively validated. Mr Goldstone relied in this context on section 96(3) of the Act, but in my judgment that only justifies the arbitrator in looking at the totality of the facts and not just those available to the surveyor in determining whether the ship was dangerously unsafe. It does not entitle the arbitrator to declare the notice valid on some other legal basis by reference to statutory powers which the surveyor had not purported to exercise.
- Turning to Issue 1, Mr Lord contends that the first notice was defective because it did not identify sufficiently or at all the legislation under which the power to detain was being exercised, the "power contained in the legislation listed below" to which the pro-forma notice refers. Mr Lord submits that the words inserted under "Statutory Requirement": "MS Shipping Legislation. MS Act 1995" are not sufficient in relation to either a power being exercised under Sections 94 and 95 or one being exercised under Regulation 28.
- In relation to the power under Sections 94 and 95, he submits that for the notice to be valid, it would have to specify the precise section being relied upon. A generic reference to the 1995 Act is not enough. He did not press this point hard in oral argument, with good reason in my judgment. It seems to me to be an impracticably technical approach to require a surveyor who is not a lawyer to identify in the Detention Notice the specific section of the Act under which the power is being exercised.
- In so far as the first notice was being issued under Regulation 28 (which for the reasons I have discussed seems unlikely, but is not a matter which the Court has to decide conclusively at this stage), when I suggested to Mr Lord that the reference to "MS Act 1995" would encompass Sections 85 and 86, the sections under which the Secretary of State was able to enact the secondary legislation contained in the Regulations, he was not prepared to agree this. He submitted that, where the relevant power being exercised by the surveyor derives from subordinate legislation, this must be specifically referred to in the notice. I reject that submission. In my judgment, the reference to "MS Act 1995" is sufficient to encompass not only powers granted by sections of the Act, but powers granted under regulations which are made pursuant to other sections of the Act, as in the case of the 1997 Regulations.
- In relation to the second notice, Mr Lord submits that it is defective because, in contravention of section 95(3) (b) of the Act, the notice does not "specify the matters which, in the relevant inspector's opinion, make the ship a dangerously unsafe ship". Mr Goldstone submits in relation to any defects in this notice (and for that matter in the first notice, if contrary to my conclusions above, there were any) that it cannot have been the intention of Parliament that defects in the notice given to the Claimant would invalidate the exercise of the power of detention if it was otherwise valid.
- Mr Goldstone relies in support of this submission upon the authorities summarised in De Smith's Judicial Review 6th edition pages 251-8 and, in particular the decision of the House of Lords in R v Soneji [2006] 1 AC 340 and the decision of the Court of Appeal in R v Immigration Appeal Tribunal ex parte Jeyeanthan [2000] 1 WLR 354. Whilst not conceding the point, Mr Lord accepted that the weight of the authorities was against his submission that defects in the notices would invalidate the exercise of the power of detention, if it was otherwise valid.
- In my judgment Mr Goldstone is correct in his submissions on this aspect of the case. I consider that the correct approach is that summarised by Lord Steyn in R v Soneji at paragraph 15 of his opinion (page 349D-350D). Having set out a passage from the opinion of Lord Hailsham of St Marylebone in London & Clydeside Estates Ltd v Aberdeen District Council [1980] 1 WLR 182 at 189-190, Lord Steyn said this:
"This was an important and influential dictum. It led to the adoption of a more flexible approach of focusing intensely on the consequences of non-compliance, and posing the question, taking into account those consequences, whether Parliament intended the outcome to be total invalidity. In framing the question in this way it is necessary to have regard to the fact that Parliament ex hypothesi did not consider the point of the ultimate outcome. Inevitably one must be considering objectively what intention should be imputed to Parliament."
- Adopting that approach here, in my judgment Parliament cannot possibly have intended that, if there was some invalidity in the detention notice served on the shipowner, that would invalidate the exercise of the power. A contrary conclusion would mean the triumph of form over substance, which can hardly have been what was intended where the clear object of the power of detention conferred by the legislation is to ensure the safety and welfare of ships and those on board.
- Accordingly, although in relation to Issue 2, I have concluded on the material before me that the detention could not be justified under Regulation 28, if the detention was valid, my answer to Issue 1 is that the detention is not invalidated by any defects in the notices served on the Master.
Issue 3
- The first sub-issue is no longer contested. It is accepted by the Defendant that the inspector must have reasonable grounds for the opinion that the ship is dangerously unsafe for a detention under Section 95 to be valid. Accordingly, the only question which arises is whether, on the assumption that the facts were as I have summarised them in paragraph 7 above, those were capable of constituting reasonable grounds in law. I have some misgivings about dealing with this question on the basis of assumed facts, since it seems to me the reasonableness of Captain Rudge's decision and opinion may depend upon all sorts of factual variables occurring on the ground at the time, which would only emerge clearly after the giving of evidence at a full trial. I am concerned about reaching a conclusion that Captain Rudge (who it is to be assumed is a competent and conscientious surveyor in the absence of any evidence to the contrary) acted unreasonably (in effect over-reacted so far as Sections 94 and 95 are concerned) without having heard his evidence, in which he would no doubt seek to justify his actions.
- However, it is agreed that I should determine this issue on assumed facts, so despite my misgivings I will do so. Mr Goldstone submits that the assumed factual position as it appeared on 28 May 2006 was that there was a very high risk that the norovirus would recur on board which meant there was a real risk that members of the crew would be incapacitated such that they would be unable to respond to an emergency situation. As he points out, an emergency situation can occur on any ship at any time and I would accept that the essence of such situations is that they are unpredictable. Accordingly, he submits that it can reasonably be said of a cruise ship in that condition that it is dangerously unsafe. He drew the analogy with the liner which has insufficient lifeboats or liferafts and which subsequently hits an iceberg, no doubt an echo of the Titanic.
- Mr Lord on the other hand submits that Sections 94 and 95 are essentially dealing with situations where the ships in question are "death traps", the obvious examples being the ship with a hole in her shell plating or the ship which has only one engineer in the engine room who could not possibly cope with all the incidents of a voyage. As he puts it, even if the Defendant can posit a large number of crew stricken with norovirus, that does not come anywhere near serious danger.
- In my judgment, the critical word in Sections 94 and 95 is "dangerously". I have no doubt on the material which I am asked to assume is correct for the purposes that the circumstances made the ship unsafe in the sense contemplated by Regulations 5 and 28 of the 1997 Regulations. However, as I have said in relation to Issue 2, Captain Rudge was not purporting to detain the ship under those Regulations but only under Sections 94 and 95 of the Act. Whilst I would not be prepared to accept Mr Lord's submission that the power to detain a ship under those sections of the Act only arises where the ship is a death trap, the adverb "dangerously" must add an important qualification to "unsafe". It does not seem to me possible to say the matters pleaded without more would render the ship dangerously unsafe. I emphasise "without more" since as I have already said, I have misgivings about reaching that conclusion without having heard evidence from Captain Rudge, but on the material before the Court the answer to Issue 3b is No.
Issue 4
- The fourth issue concerns whether, on the assumption that the detention was invalid, the Defendant committed the tort of wrongful interference with goods. Section 1 of the Torts (Interference with Goods) Act 1977 defines such wrongful interference as meaning, inter alia, conversion, and it is common ground that the relevant question here is whether the detention constituted a conversion of the ship pursuant to the common law as it stood both before and after the enactment of the 1977 Act.
- Finding a single all-encompassing definition of the tort of conversion is an elusive task, but a reasonable working definition can be found in the judgment of Atkin J (as he then was) in the Divisional Court in Lancs and Yorks Rly v McNicholl (1918) 88 LJKB 601 at 605:
"It appears to me plain that dealing with goods in a manner inconsistent with the right of the true owner amounts to a conversion, provided that it is also established that there is also an intention on the part of the defendant in so doing to deny the owner's right or to assert a right which is inconsistent with the owner's right. That intention is conclusively proved if the defendant has taken the goods as his own or used the goods as his own."
- That definition was adopted by Scrutton LJ in the Court of Appeal in Oakley v Lyster [1931] 1 KB 148 at 153 and by Lord Porter in the House of Lords in Caxton Publishing v Sutherland Publishing [1939] AC 178 at 201. In my judgment, there is nothing in the speeches in the House of Lords in the more recent case of Kuwait Airways Corporation v Iraqi Airways Co [2002] 2 AC 883 which is inconsistent with that definition.
- In paragraph 39 of his speech in that case, Lord Nicholls of Birkenhead identified three ingredients or "basic features" of the tort:
"Conversion of goods can occur in so many different circumstances that framing a precise definition of universal application is well nigh impossible. In general, the basic features of the tort are threefold. First, the defendant's conduct was inconsistent with the rights of the owner (or other person entitled to possession). Second, the conduct was deliberate, not accidental. Third, the conduct was so extensive an encroachment on the rights of the owner as to exclude him from use and possession of the goods. The contrast is with lesser acts of interference. If these cause damage they may give rise to claims for trespass or in negligence, but they do not constitute conversion."
- However, that is not intended to set out a wider more-embracing definition of the tort than in earlier cases, as is clear from the next three paragraphs of his speech, in which he states:
"40 The judicially approved description of the tort in Clerk & Lindsell encapsulates, in different language, these basic ingredients. The flaw in IAC's argument lies in its failure to appreciate what is meant in this context by "depriving" the owner of possession. This is not to be understood as meaning that the wrongdoer must himself actually take the goods from the possession of the owner. This will often be the case, but not always. It is not so in a case of successive conversions. For the purposes of this tort an owner is equally deprived of possession when he is excluded from possession, or possession is withheld from him by the wrongdoer.
41 Whether the owner is excluded from possession may sometimes depend upon whether the wrongdoer exercised dominion over the goods. Then the intention with which acts were done may be material. The ferryman who turned the plaintiff's horses off the Birkenhead to Liverpool ferry was guilty of conversion if he intended to exercise dominion over them, but not otherwise: see Fouldes v Willoughby (1841) 8 M & W 540.
42 Similarly, mere unauthorised retention of another's goods is not conversion of them. Mere possession of another's goods without title is not necessarily inconsistent with the rights of the owner. To constitute conversion detention must be adverse to the owner, excluding him from the goods. It must be accompanied by an intention to keep the goods. Whether the existence of this intention can properly be inferred depends on the circumstances of the case. A demand and refusal to deliver up the goods are the usual way of proving an intention to keep goods adverse to the owner, but this is not the only way."
- That their lordships were not intending to extend the tort of conversion is also apparent from the speech of Lord Steyn who stated at paragraph 119:
"119 Despite elaborate citation of authority, I am satisfied that the essential feature of the tort of conversion, and of usurpation under Iraqi law, is the denial by the defendant of the possessory interest or title of the plaintiff in the goods: see Todd, The Law of Torts in New Zealand, 3rd ed (2001), para 11.3 for an illuminating discussion. When a defendant manifests an assertion of rights or dominion over the goods which is inconsistent with the rights of the plaintiff he converts the goods to his own use. I am therefore in agreement with the legal analysis of the Court of Appeal."
- To like effect is Lord Hoffmann's speech at paragraph 129:
"129 In the case of conversion, the causal requirements follow from the nature of the tort. The tort exists to protect proprietary or possessory rights in property; it is committed by an act inconsistent with those rights and it is a tort of strict liability. So conversion is "a taking with the intent of exercising over the chattel an ownership inconsistent with the real owner's right of possession": per Rolfe B in Fouldes v Willoughby (1841) 8 M & W 540, 550."
- What is clear from a number of the authorities including the citation from Atkin J quoted above, despite submissions to the contrary by Mr Lord, is that a distinction is drawn between cases in which the tortfeasor has taken possession of the goods and those where he has not. The distinction was explained by Kelly CB in England v Cowley (1873) LR 8 Exch 126 at 131:
"Apart from mere dicta, no case, so far as I am aware, can be found where a man not in possession of the property has been held liable in trover unless he has absolutely denied the plaintiff's right, although, if in possession of the property, any dealing with it, inconsistent with the true owner's right, would be a conversion. A limited interference with the plaintiff's property, where all along the plaintiff is himself in possession, does not constitute conversion."
- This passage was cited with approval by both Scrutton LJ and Greer LJ in Oakley v Lyster [1931] 1KB 148. It seems to me that the principle which emerges from the cases is the one stated in Clerk & Lindsell on Torts 19th edition paragraph 17-31, that for someone not in possession of the goods to commit the tort of conversion, there must be a dealing or purported dealing with the goods which either denies absolutely the right of the true owner or which involves the assertion of a right which is inconsistent with the true owner's right.
- Mr Lord placed considerable reliance on the decision of Megarry V-C in Perry v British Railways Board [1980] 1 WLR 1375. However, quite apart from the fact that that was a case where the defendant was in possession of the goods, so that it is distinguishable from the present case in any event, I do not read the learned judge as having laid down any wider definition of conversion than that derived from the earlier cases. He concluded that the defendant had converted the goods because it was refusing to permit the plaintiff to collect the goods from the relevant railway depot. As the judge said, by that refusal, the defendant was denying the plaintiff of most of the rights of ownership, including that of possession:
"There is a detention of the steel which is consciously adverse to the plaintiffs' rights, and this seems to me to be of the essence of at least one form of conversion" (p 1380)
Thus, as I see it, that was a case where the defendant was dealing with the goods so as to deny absolutely the right of the plaintiff, the owner.
- Mr Goldstone submits that, in the present case, the requirement of a dealing or purported dealing with the ship by the Defendant is completely absent. Quite apart from the fact that the Claimant remained in possession throughout, which Mr Goldstone accepts is not determinative but is of some relevance to the question whether the Defendant's actions constituted conversion, he submits that the "detention" was not a physical detention as such. Rather it was an order which operated in personam against the Master and against the Claimant as disponent owner. They were not physically prevented from sailing the ship away on the next cruise, but to have done so would have potentially involved a criminal offence.
- Mr Lord submits that the detention was a dealing in the sense of an assumption of control by the Defendant, which was just as effective in detaining the ship in port, as if the Defendant had chained the ship to the quayside or placed a coastguard cutter in front of the ship. Of course if there had been actual physical restraint of the ship by chaining it to the quayside, that would have constituted the tort of trespass to goods (see Vine v Waltham Forest LBC [2000] 1 WLR 2383). Mr Lord argues that it would be odd if there were in effect a lacuna in the law of tort, so that no tort of conversion was committed where the restraint was just as effective as if physical means had been used. He submits that, by analogy with such cases, the Court should recognise that a tort was committed here.
- I do not consider that what the Defendant did here can be characterised as a dealing or purported dealing with the ship, but even if it was, in my judgment the critical element of the tort of conversion by someone not in possession is missing. The Detention Notice did not in any sense deny absolutely the right of the Claimant as disponent owner. Equally, the Defendant did not assert any right which was inconsistent with the claimant's right. Before there can be conversion, a defendant not in possession has to be asserting what some of the cases describe as "dominion" over the goods, that is, some right in relation to the goods which only an owner has: see Oakley v Lyster per Slesser LJ at 156. The judgment of Greer LJ is to like effect at 155.
- A good example of the sort of assertion of rights by someone not in possession which will amount to conversion is the decision of McNair J in Douglas Valley Finance v S Hughes (Hirers) Ltd [1969] 1 QB 738. The defendant had purported to buy two lorries from a third party to whom the plaintiff had let the lorries on hire purchase. The defendant then caused the valuable "A" haulage licences relating to the vehicles to be transferred to other vehicles and purported to sell them back to the third party. The learned judge held that although the defendant never had possession of the vehicles, this series of transactions constituted a "wrongful assumption of ownership by the defendants and a denial of the plaintiffs' right."
- In my judgment, even on the basis that the Detention Notice was invalid, nothing the MCA did here amounted to an assumption of ownership or of dominion over the ship. The intention of the Detention Notice was merely to prevent the Claimant from using the ship in a particular way (that is for the third May cruise) for a short period of time. That was not conversion. The position is analogous with that of the defendant landlord in Edwards v Cowley (1873) 8 Exch 126 whose actions did not amount to conversion.
- It does not seem to me that that conclusion means there is some lacuna in the law, just that this case falls the wrong side of the line. In terms of the analysis of Lord Nicholls in Kuwait Airways, the Detention Notice did not involve a sufficiently extensive encroachment on the Claimant's rights to constitute conversion, rather it was a lesser act of interference. Nor does this conclusion leave persons in the position of the Claimant without a remedy. Sections 96 and 97 of the Merchant Shipping Act 1995 set out an arbitration procedure (applicable to complaints about detention notices whether issued under sections 94 and 95 or under the 1997 Regulations).
- Under that procedure in an appropriate case where he is satisfied that there was no valid basis for the inspector's opinion and there were no reasonable grounds for the inspector to form that opinion, an arbitrator can award a claimant compensation under Section 97 even though the claimant may have no cause of action against the MCA at common law. On the assumed facts and on the basis of my conclusions on the other Issues, those criteria would have been satisfied and an arbitrator could have awarded compensation. The only reason why that remedy is not available to the Claimant here is that notwithstanding receipt of the leaflets about arbitration on 30 May 2006, the Claimant did not commence arbitration within the 21 day period prescribed by Section 96 of the Act.
Issue 5
- Mr Lord's submission in his written Skeleton Argument was that although Section 97 refers in terms to a power to award compensation conferred on an arbitrator, where the matter is before the Court then by implication the Court has the same power. In fairness to him, he did not really develop this submission orally, which is scarcely surprising. I consider Mr Goldstone was right to characterise this submission as hopeless. The statute confers a power on an arbitrator appointed under Section 96 of the Act to award statutory compensation, even in the absence of any cause of action at common law. There is no basis whatsoever for a construction of the statute, whether by implication or otherwise, which would confer that statutory power on the Court instead. Whilst Sections 96 and 97 do not affect the Court's jurisdiction in an appropriate case to award damages at common law, for example for conversion, they clearly do not confer on the Court any such power to award compensation in the absence of a cause of action at common law. The answer to Issue 5 is clearly No.
