Scottish Court of Session Decisions

By charter-party dated 30th May 1900, entered into between Messrs Clark & Service, agents for the Ardan Steamship Company, Limited, owners of the steamship “Ardandearg,” and Andrew Weir & Company, merchants in Glasgow, the “Ardandearg” was chartered “to ‘proceed to such loading berth as freighters may name at Newcastle, N.S.W., and after being in loading berth as ordered,’ to ‘load in the usual and customary manner a full and complete cargo of Australian coals, as ordered by charterers, which they bind themselves to ship (except in the event of riot, commotion by keelmen, strike or lockout of shippers’ pitmen, or any hands striking work, frosts or floods, or any other accidents or causes beyond the control of the charterers, which may delay her loading).’ … Should steamer not arrive at the loading port and be ready to load on or before the 15th July charterers to have the option of cancelling this charter.” There was no provision as to the number of days for loading.

The “Ardandearg” arrived at Newcastle on 14th July 1900. Owing, however, to difficulties in obtaining a cargo and loading berth she was not ready to leave until the 23rd August following.

In these circumstances the Ardan Steamship Company, Limited, brought this action against Andrew Weir & Company, concluding for payment of £2170, which, as they averred, represented the loss to them by the detention of the “Ardandearg” at Newcastle for thirty-one days more than would have been necessary had the defenders duly fulfilled their contract to provide and load a cargo.

In their defences the defenders averred that they had duly ordered a cargo of coals from the Lambton Colliery in New South Wales, belonging to the Scottish Australian Mining Company, Limited, and that the delay of the “Ardandearg” arose from the impossibility of obtaining a cargo of coals owing to the congested state of the Australian coal trade at the time, a cause for which they denied that they were responsible.

The defenders also averred that had the “Ardandearg” arrived at Newcastle with all possible dispatch, under the terms of the charter-party, she would have reached the port before certain other ships which in fact arrived before her, and would then have obtained a cargo without delay.

The defenders pleaded, inter alia—“Any alleged delay in the loading having occurred through causes excepted in the charter-party, the defenders ought to be assoilzied.”

Proof was allowed and led. The import of the evidence is fully stated in the opinions of the Lord Ordinary ( Pearson) and the Lord President, infra.

On 2nd April 1903 the Lord Ordinary pronounced an interlocutor by which he ordained the defenders to make payment to the pursuers of the sum of £1612.

Opinion.—“This is an action by the owners of the steamship “Ardandearg” against the charterers for damage incurred through undue delay at the port of loading.

“The charter-party was signed in Glasgow on 30th May 1900 by the charterers and by Messrs Clark & Service, as agents for owners. It stipulated that the ship (which had a carrying capacity of about 4500) should ‘with all possible despatch proceed to such loading-berth as freighters may name at Newcastle, N.S.W., and after being in a loading-berth as ordered, wholly unballasted and ready to load … shall there load in the usual and customary manner a full and complete cargo of Australian coals as ordered by charterers, which they bind themselves to ship (except in the event of riot, commotion of keelmen, strike or lockout of shippers’ pitmen, or any hands striking work, frosts or floods, or any other causes beyond the control of the charterers which may delay her loading), ‘and should thereafter proceed to a port of discharge in Java. It was provided that if the ship should not arrive at her loading port and be ready to load on or before 15th July the charterers should have the option of cancelling the charter. No time for loading was specified, but the charter bears ‘lay-days not before 25th June.’

The ship, which was in Japan, arrived at Newcastle, N.S.W., on 14th July ready to load. She was, however, not berthed for loading until 13th August about noon. The loading was completed by the evening of the 23rd, and she sailed for Java on the morning of 24th August. There being no lay-days for loading specified in the charter it was the duty of the defenders to perform their part of the loading within a reasonable time, that is to say, reasonable time under the circumstances then existing, even though the circumstances were unusual. To a certain extent the charterer may (as here) protect himself from demurrage claims by an exception clause specifying certain impediments for which he is not to be responsible and ending with general words which, however, are held as restricted to matters ejusdem generis. But even beyond the exception clause the charterer, in contesting a claim for demurrage, may found

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upon all circumstances which in fact tended to delay or protract the loading unless they were within his own control or the control of those for whom he is responsible, or unless he could overcome them by the use of reasonable diligence.

There is, however, a distinction which must be kept in view between impediments to loading properly so called and impediments to providing the stipulated cargo. The obligation to provide a cargo is separate from and anterior to the obligation to load, and corresponds to the owner's obligation to provide the ship, and it by no means follows that because the loading may be delayed for a time reasonable in the circumstances the same rule will apply to delay or failure in providing the cargo. No doubt an exception clause might be found which should extend to circumstances that impede the providing of the cargo instead of being confined to circumstances which delay the loading. In the present case the exception of strike or lockout of shippers' pitmen points in that direction, and might possibly (if it had happened) have furnished the charterers with an excuse for not providing a cargo in due course. But the clause as framed bears reference to causes which may delay the loading.

The facts on which the general question of the defenders' liability turns are briefly these. Within ten days after the date of the charter-party the defenders entered into a contract with a mining company which owned two pits in the neighbourhood of Newcastle, N.S. W., known as the Lambton Colliery and Bur wood Colliery. The mining company undertook to ‘load the “Ardandearg” with a cargo of best screened Lambton coals at Newcastle, N.S.W. (5000 tons, 10 per cent. more or less) in regular colliery turn as customary, strikes, &c., excepted.’ These words, ‘in regular colliery turn as customary,’ might be founded on by either party to the contract. They gave the defenders the right to have the ship served in regular turn, but exposed them to the risk of having to wait for her turn until ships arriving earlier were loaded. This contract was not disclosed to the pursuers, who contracted with the defenders alone. The Lambton coal which was thus specified came from the smaller pit, which had an output of about 350 tons per day. There being no stock of Lambton coal at the colliery, the best that the mining company could do was to send down their output daily by rail to the harbour, and as the appliances at the port of Newcastle admit of a ship taking in 100 tons of coal per hour, the best possible for a 4500 ton ship would be to take twelve days to load at the rate of three and a-half hours per day.

But further, it turns out that the Dutch Government were at that time large buyers of coal for shipment to Java and had through their agents and contractors placed contracts with the colliery owners for the supply of 20,000 tons of Lambton coal. The ships chartered for the purpose were the ‘Palatinia,’ the ‘Timor,’ the ‘Ardandearg,’ and the ‘Borneo,’ and they arrived at Newcastle in that order on 10th, 12th and 14th July respectively. It would appear that the colliery took no pains to secure that the ships should arrive at proper intervals, but protected themselves by the stipulation that they should load in regular colliery turn. In the result the three first-named ships, having arrived within the space of four days, made demands on the colliery company for about 15,000 tons, which they could only supply by means of their daily output of 350 tons in the order of arrival. The ‘Palatinia’ was loaded by 1st August, and the ‘Timor’ (which took partly Burwood coal) by 10th August, both having to leave the cranes more than once to await further supplies of coal. Obviously, therefore, the cargo which the defenders had bound themselves to provide for the ‘Ardandearg,’ and to ship did not exist at the date of her arrival on 14th July, or of her berthing on 13th August, otherwise as unwrought coal in the mines.

Before going to Newcastle the ‘Ardandearg’ put in to Sydney, and remained there for a week for purposes to which I will advert presently. While at Sydney, which is 65 miles south-west of Newcastle, the captain reported himself to Mr Pauss, the charterers’ agent, who told him that there was a great crowd of ships at Newcastle, and that he would lose his turn if he did not get away at once. Mr Pauss gave him a letter to Messrs Gibbs, Bright & Company, of Newcastle, which he delivered on arrival there on Saturday afternoon, the 14th July. From them he first learned that the cargo was to consist of Lambton coal, and on inquiring at the colliery office he was informed that there would be serious delay, amounting to forty-two or forty-five days. He protested, and afterwards sent demurrage notes. It seems clear that he did his best, and that if he could have obtained a coal order there would have been no difficulty on the side of the harbour authorities in assigning him a crane berth. On arrival he entered his ship with the berthing master as ready to receive cargo, but he could not obtain a coal order—that is, a loading order—from the company because the coal was not forward. As it was, even after he got to the loading berth, on 13th August, he had to leave it twice for want of coal. During the ten days from 13th to 23rd August he was only fifty-four hours actually taking cargo aboard. It clearly appears from the evidence of the captain, and also of Mr Knowles, the berthing master, that if coal had been ready for the ‘Ardandearg’ there would have been no difficulty in giving her a berth even on 14th July.

This being so, it is a fallacy on the part of the defenders to attribute the delay to the congested state of the port. There was undoubtedly a very large and exceptional demand for coal, and an exceptional accumulation of tonnage at Newcastle. This state of matters might quite well have furnished the charterers with a good defence if, for example, it had resulted in a scarcity of hands, or of railway waggons, or available

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crane berths or of any other of the loading appliances of the port. But that has no application here. Precisely the same thing would have happened as is here complained of had there been no ships there but the three I have named, and no colliery but the Lambton. It was not a case of waiting for berths but of waiting for cargo. And although the defenders indicate (statement 3) that but for the congestion they might have loaded the ‘Ardandearg’ with other Australian coal brought from some other colliery at Newcastle, and have sent her to Java with that, they could only have done so in breach of their contract with the mining company, who were protected by the clause as to ‘regular colliery turn.’

The controversy really turns on the true construction of the charter-party in view of the facts as proved. The defenders found two separate arguments on the words of the obligation to ‘load in the usual and customary maner a full and complete cargo of Australian coals, as ordered by charterers.’ In the first place, they say that these words import that the charterers fulfil their obligation by ordering the cargo, as distinguished from providing it, a construction which is quite inadmissible, and appears to be founded on a mere misreading of the clause. Then it is said that the expression to ‘load in the usual and customary manner’ includes the awaiting a regular colliery turn with the colliery from which the vessel is being loaded, and questions to that effect are being put to the witnesses, especially to those examined on commission, and receive an affirmative answer. To me it seems that the ‘colliery turn’ affects the time and not the manner of loading, and that all the ships at Newcastle load in the same manner when their turn comes. If so important a qualification as the ‘colliery turn’ is to be imported into a charter-party, I think it ought to be expressed and not introduced under the cover of an ordinary clause, which, prima facie, and according to its ordinary use, applies to something quite different. I say this on the assumption that the ‘colliery turn’ really forms part of the custom of this port, which I think very doubtful. I do not doubt it is part of the custom of the collieries, but the relative custom of the port seems merely to be (as one would expect) that the port authorities will not allow their loading appliances to be occupied by ships which are not in a position to make use of them. Then it is contended that the exception clause applies. I have already pointed out that it is limited to causes which may delay the loading, and that the failure to provide a cargo, though it results in the loading being delayed, does not prima facie fall within the application of the clause. Moreover, it is not an impediment ejusdem generis with any of those enumerated in the clause.

I hold then (1) that the delay was caused not by the exceptional congestion of shipping, but by the failure of the defenders to perform their primary duty of providing a cargo, and that the principle upon which a reasonable time is allowed to the charterers for loading does not apply to such a case; (2) that if it does apply, the time which elapsed after the ship arrived and was tendered to the defenders as ready to load was prima facie unreasonable, and that it lies on the defender to show that it was reasonable in the circumstances, which he has failed to do; and (3) that there were no clauses in the charter-party which on a sound construction will excuse the defenders or the delay.

So much for what happened after the ship's arrival at Newcastle. But the defenders go further, and say that she was so late in arriving there as to be in breach of the charter-party, and her late arrival was the cause of the delay. She arrived four days after the ‘Palatinia’ and two days after the ‘Timor,’ and she ought (it is said) to have arrived before either of them, and thus have secured the first turn. I apprehend that the defenders, in order to succeed on this ground, must show that the delay in arrival was either a breach of contract or was so unreasonable as to carry responsibility for all its consequences. It was not prima facie a breach of the contract, for she arrived at Newcastle before the date mentioned in the cancelling clause. Still she was bound to proceed with all possible despatch, and it is suggested that she did not do so. It is said (1) that she ought to have made better speed on the voyage from Kobe by two or three days, but was prevented by the state of her boilers; and (2) that instead of proceeding with a cargo to Sydney and spending a week there, she ought to have gone in ballast from Kobe to Newcastle, and that all necessary repairs could have been done at that port. She would thus (it is said) have saved from eight to ten days, and would at all events have easily been in front of the ‘Palatina.’

The ship was at Yokohama on her way to Kobe with cargo when she got notice of her new charter. She arrived at Kobe on 4th June, and finished her discharge on the 9th. Instead of sand ballast she took on board a ballast cargo consisting partly of rice and partly of general merchandise, but it does not appear that this delayed her departure. She finished loading late on 11th June and left Kobe on the 12th. Before leaving it was arranged that she should go to Sydney to be dry-docked, it being about the proper time for it, as she had not been dry-docked since she had been in Cardiff six or seven months before, and there being no dry dock at Newcastle. About three days out from Kobe her boilers began to leak, which affected her speed, bringing it down from ten knots to about nine knots, and she thereby lost two or three days. Her engines and boilers had been surveyed and reported on by Lloyds’ surveyor at New York in February previous, who had reported that ‘the engines and boilers so far as seen are in safe working condition, ‘and eligible in my opinion to remain as classed without fresh record.’ But it would seem that some latent defect developed after leaving Kobe, which fell within one of the exceptions contained in

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the printed slip attached to the charter-party. The consequence was that she had to have her boilers repaired. This also was done at Sydney, and taking the evidence of the master and Mr Pauss together, I cannot hold it proved that it could have been done, or at least that it could have been so satisfactorily done, at Newcastle. At all events, the resolve to have this and the dry-docking done at Sydney seem to me a thing eminently within the discretion of the master, and I see no reason to doubt that his decision was reasonable and proper. The result was a week spent at Sydney, from 7th to 14th July, notwithstand the suggestion of Mr Pauss that she could be towed round light to Newcastle and repair the boilers there, and it was during this week that the ‘Palatinia’ and ‘Timor’ arrived. On the whole my opinion is, that having regard to the master's then state of knowledge, his whole actings at and after Kobe were reasonable, and are certainly not proved to have been in breach of the contract, or to have been so unreasonable as to make the owners liable for her losing the colliery turn.

It remains to assess the amount payable by the defenders. The claim made in the summons is for thirty-one days at £70, amounting to £2170. It appears to me that the thirty-one days is right, or at all events is not too long, being calculated on the footing that the loading should have been completed by 23rd July. The figure of £70 a day is I think excessive. On the other hand, I cannot adopt the suggestion made in the evidence that one should take into consideration the exceptional cost and delay which attended what is spoken of as the remainder of the round voyage, namely, from Java to New York and thence home. I think the choice lies between adopting the 6d. per nett register ton per day, which is stipulated in the charter-party as the demurrage on unloading, and accepting the view of the defenders founded on the accounts of the Kobe-Newcastle-Java voyage, which brings out £20, 2s. 1d., or on a more correct view, £24, 2s. 11d. per day. I do not think the latter furnishes a fair test of the worth of the ship to the owners at the time of the detention, and I prefer to take the sum mentioned in the contract, not because the rate stipulated for demurrage on discharge necessarily applies to loading also, but because it prima facie expresses the views of the contracting parties, and it is not displaced by any clear alternative. This brings out a sum of £52 per day, or £1612 in all.

Among other authorities to which I was referred in argument I may mention Little, 1895, 22 R. 796; Lilly, 1895, 22 R, 278; Gardiner, 1893, 20 R. 414; Stevens, Mawson & Company, 1891, 19 R. 38; Wyllie, 1895, 13 R. 92; Dall' Orso, 1876, 3 R. 419 (disapproved in Tharsis Company, 1891, 2 Q.B. 647); and also English cases of Dobell & Company, 1900, 1 Q.B. 526; Lyle Shipping Company, 1900, 2 Q.B. 638; Richardsons, 1898, 1 Q.B. 261; Monsen, 1895, 2 Q.B. 562; Hick, App. Cas., 1893, p. 22; Grant & Co., 1884, 9 App. Cas. 470. For the defenders I was further referred to Postlethwaite, 1880, 5 App. Cas. 599; Castlegate Steamship Co., 1892, 1 Q.B. 854; Hulthen, 1902, 2 K.B. 199; Ogmore Steamship Company, 6 Com. Cas. 104; Tapscott, 1872, L.R., 8 C.P. 46; Good, 1892, 2 Q.B. 555; Bulman, 1894, 1 Q.B. 179.” The defenders reclaimed, and argued—On the facts it was proved that the defenders did all that a reasonable business man could to provide a cargo. The pursuers were not entitled to object to the defenders' selection of a colliery, because that was a matter left to the defenders by the charter-party. But on the evidence no better result could have been obtained from any other colliery. If, then, it was established that the defenders had used all reasonable means to load in time they had fulfilled their obligation. They were not bound to have a cargo waiting on the quay on the chance of the arrival of the ship— Wyllie v. Harrison, October 29, 1885, 13 R. 92, 23 S.L.R. 52; Hick v. Raymond [1891], 2 Q.B. 626 [1893], App. Cas. 22; Postlethwaite v. Freeland, 1880, 5 App. Cas. 599; Little v. Stevenson & Co.. March 19, 1896, 23 R. (H.L.) 12, 33 S.L.R. 514; Lyle Shipping Company v. Corporation of Cardiff [1900], 2 Q.B. 638; Ogmore Steamship Company, 1901, 6 Comm. Cas. 104; Jones v. Green, 1903, 9 Comm. Cas. 20. The last cited case was a direct decision of the Court of Appeal on a question arising out of the same charter-party at the same port and under the same circumstances. The dicta of Lord Trayner in Gardiner v. Macfarlane, M'Crindell, & Company (“ The Lismore”), February 24, 1893, 20 R. 414, 30 S.L.R. 541, could not be supported in view of the opinions in the House of Lords in the cases cited above— Dall' Orso v. Mason & Co., February 4, 1876, 3 R. 419, 13 S.L.R. 270, was expressly disapproved in Tharsis Sulphur and Copper Company v. Morel Brothers & Company [1891], 2 Q.B. 647. Nor could the decision in Stevens, Mawson, & Goss v. Macleod & Company (“ The Cassia”), October 29, 1891, 19 R. 38, 29 S.L.R. 30, be reconciled with the later and higher authority. Both parties must be taken to have contracted in view of the harbour conditions at New castle— Harris v. Dreesman, 1854, 23 L.J., Ex, 270; Carlton Steamship Co. v. Castle Mail Packet Co. [1898], App. Cas. 486; Smith & Service v. Rosario Nitrate Company [1894], 1 Q.B. 174. On the evidence the shipowners were aware of it; even if they were not, they take the risk of port conditions, if, as was undoubtedly the case here, these conditions were well known in the trade— Hudson v. Ede, L.R., 2 Q.B. 566, and L.R., 3 Q.B. 412; King v. Hinde, 12 L.R., Ir. 113. The obligation of the charterers to load “as customary,” or “in the usual and customary manner,” meant in the usual and customary manner of the port— Castlegate Steamship Company v. Dempsey [1892], 1 Q.B. 54 and 854; Good & Company v. Isaacs [1892], 2 Q.B. 555. The charterer's obligation to load did not commence till the ship was berthed; until then she was not an “arrived” ship— Tapscott v. Balfour, L.R., 8 C.P. 46; Tharsis Sulphur and Copper Company v. Morel Brothers & Company [1891], 2 Q.B. 647; Bulman v. Fenwick & Company

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[1894], 1 Q.B. 179. If a shipowner desired to avoid the risk of his being detained owing to difficulties at the port of loading, he could stipulate in the charter-party that the ship must be loaded within a certain time of her arrival. To make such a stipulation would diminish his chances of obtaining a charter. The effect of the Lord Ordinary's judgment was to read such a stipulation into the charter-party though it was not there, and thus to give the shipowner the benefit of a limit without the corresponding disadvantage.

Argued for the respondents—The charterer was liable here because he had failed to have a cargo ready. That was an absolute obligation— Stevens, Mawson, & Goss v. Macleod (The “Cassia”), October 29, 1891, 19 R. 38, 29 S.L.R. 30; Gardiner v. Macfarlane, M'Crindell, & Company ( The “Lismore”), February 24, 1893, 20 R. 414, 30 S.L.R. 541; Krog & Co. v. Burns & Lindemann, July 17, 1903, 40 S.L.R. 874; Postlethwaite v. Freeland, 5 App. Ca. 599, at p. 608; Grant v. Coverdale, 9 App. Ca. 470; Carver, Carriage at Sea, secs. 252, 628. The English cases cited by the reclaimers only established that the shipowner must take the risk of delays in loading due to the conditions or rules of the port, whereas the delay here was not due to want of loading facilities at Newcastle, but to the want of a cargo. Nor were cases about reasonable time in discharging a cargo in point— e.g., Wyllie v. Harrison, cit. supra. The discharge of a ship was recognised as a joint duty, in the performance of which each must take the circumstances as he found them, whereas the provision of a cargo was an obligation resting on the charterer alone. A purely local custom, such as was proved to exist at Newcastle, could not be imported by implication into the charter, at least unless both parties were aware of it, which (they submitted) was not proved— Milne v. Samson, 1843, 6 D. 355; Holman v. Peruvian Nitrate Company, February 6, 1878, 5 R. 657, 15 S.L.R. 349; Kirchner v. Venus, 1859, 12 Moore, P.C.C. 361; Lawson v. Burness, 1862, 1 H. & C. 396. The English case of Jones v. Green, 1903, 9 Comm. Cas. 20, was distinguishable. It was there found in fact that the shipowner was aware of the congested state of business in the Australian collieries. In that case he might fairly be held to have taken the risk of delay arising from a cause of which he was aware, but in the present case no such knowledge had been proved. The obligation to load “in the usual and customary manner” had been often construed. It implied an obligation to load in the manner customary in the port; it did not imply any waiver of the obligation to have a cargo ready for loading — Lamb v. Kaselack, Alsen, & Company, January 31, 1882, 9 R. 482, 19 S.L.R. 336; Lockhart v. Falk, L.R., 10 Ex. 132; Nelson v. Dahl, 12 Ch, Div. 568; Dunlop & Son v. Balfour, Williamson, & Company [1892], 1 Q.B. 507; Castlegate Steamship Company v. Dempsey [1892], 1 Q.B. 854. Monsen v. Macfarlane [1895], 2 Q.B. 562, and Breda v. Ellingsen, January 15, 1901, 8 S.L.T. 288, were also cited.

An argument was also submitted on both sides as to the proper measure of damages, but this, in the view taken by the Court, it is unnecessary to report.

At advising—