England and Wales High Court (Admiralty Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMIRALTY COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		16 July 2002

Mr Nigel Teare QC :

1. This is a claim for salvage by the Dover Harbour Board ("the Board") against the Owners of the vessel STAR MARIA. The Defendants were not represented at the hearing although they had been represented by solicitors and counsel until shortly before the trial. Indeed a defence was filed and disclosure was given by the Defendants. Civil Evidence Act Notices have also been served on their behalf. The date of this trial had been fixed in February 2002 when solicitors were still on the record for the Defendants. They have since come off the record Although the solicitors representing the Claimants have made unsuccessful attempts to communicate with the Defendants' agents I am satisfied that it is appropriate and fair to proceed with the trial in the absence of the Defendants. The Court has power to do so pursuant to CPR 39.3.
2. At the trial I heard oral evidence from Captain Jacques Vivian Billowes, the master of the Dover harbour tug DAUNTLESS. In addition reports, statements, records and a chart were put in evidence by the Board, including documents disclosed by the Defendants and statements which had been made the subject of Civil Evidence Act Notices by the Defendants.
3. Although the claim is brought in the name of the Board I have been provided with evidence that the master, officers and crew of the Board's tugs serve on salvage articles, that is, there is an agreement as to how a salvage award is to be apportioned between the Board and the master, officers and crew of the Board's tugs. It is therefore appropriate that any award of salvage to the Board is inclusive of the services of the master and crew of the Board's tugs.

The facts

4. STAR MARIA is a steel single screw motor general cargo vessel of 2386 dwt, 75.52 m. x 11.84 m. and built in 1974. At the material time she was laden with a cargo of 1300 tonnes of steel products in the course of a voyage from Grimsby to Gemlik in Turkey. (The Board's salvage claim against the owners of that cargo has been settled.) Shortly after midnight on 2 January 2001 she was involved in a collision with the UNDEN about 6 miles southeast of Dover. As a result of damage caused by the collision water entered the steering gear room and the vessel was effectively immobilised. The casualty requested tug assistance and her starboard anchor was dropped. Dover Coastguard issued a Mayday.
5. FAR TURBOT, an anchor handling tug with a bollard pull of 100 tonnes, which during the winter months is chartered to the Coastguard as an emergency towing vessel in the Dover Strait, was at anchor in Margate Roads. She was instructed by the Coastguard to proceed to the casualty. She was underway by 0058. At 0113 DOUGHTY, a steel twin screw tug with a bollard pull of 55 tonnes owned by the Board, also set out from Dover to the casualty.
6. The weather conditions were bad. The wind was south south westerly force 7-8 with rough seas and a swell of about 4 m. High water at Dover was predicted for 0309. The Dover lifeboat arrived at the casualty shortly after 0112 but was not prepared to put anyone on board because of the swell conditions. At about 0121 contact was established between DOUGHTY and the casualty by vhf. DOUGHTY offered her assistance on the terms of Lloyd's Standard Form of Salvage Agreement ("LOF") and that offer was accepted.
7. By about 0200 DOUGHTY was in the vicinity of the casualty and attempted to make fast. However, although a messenger line was put on board the casualty it parted and the tow wire fouled the tug's propeller. DOUGHTY was as a result unable to provide any assistance and returned to Dover.
8. By about 0300, when DOUGHTY was attempting to make fast, FAR TURBOT arrived. When it was apparent that DOUGHTY was unable to assist FAR TURBOT offered her services under LOF which offer was accepted. Although there had earlier been concern on board the casualty that the engine room bulkhead might fail it was now reported that it was holding. The casualty's master was happy with the stability of the casualty and he did not require on board assistance. FAR TURBOT made fast a tow line and the casualty recovered her starboard anchor. By 0357 towage commenced to Dover.
9. At about 0441 FAR TURBOT and the casualty approached the eastern entrance to Dover Harbour. The master of FAR TURBOT requested the assistance of DAUNTLESS, a sister tug to DOUGHTY, to assist in the task of bringing the casualty into the harbour. In response DAUNTLESS left Dover harbour and came up with the casualty at about 0505. The master of DAUNTLESS, Captain Billowes, understood that he was required to make fast to the stern of the casualty and assist with steering the casualty through the harbour entrance. Such a service was one which he would have expected to be remunerated on the terms of the Board's commercial tariff rates. By about 0520 DAUNTLESS made fast to the stern of the casualty with a tow rope (not a heavy wire because all that was envisaged was steerage assistance). By this time the casualty was about 8 cables due east of the eastern entrance. The wind was force 8-9, there was a 4 m. swell and, it being over 1 hour after high water, the tidal current off the eastern entrance was running in a north easterly direction.
10. At 0529 the FAR TURBOT's tow line parted. Her master instructed Captain Billowes to take the stern of the casualty into the wind. At this time the casualty was about 4 cables east of the eastern entrance. Captain Billowes attempted to pull the casualty's stern into the wind but the task was extremely difficult and he did not succeed in doing so. He did not wish to put his own tug beam onto the seas and he had to be careful that his towage connection did not part as a result of snatching. By about 0534 the casualty had dropped her starboard anchor and FAR TURBOT instructed Captain Billowes to assist the casualty in heading into the wind and hold the casualty whilst FAR TURBOT established another towage connection.
11. Under the influence of the wind and tide, notwithstanding that she had her starboard anchor out and DOUGHTY was made fast, the casualty drifted in a north north easterly direction. By 0545 the casualty had drifted to a position about 2 cables off shore. She was just outside the 5m. sounding contour, inside which Captain Billowes knew there to be rocky outcrops. It was clear to Captain Billowes that the casualty's starboard anchor was not holding her and that he now had to pull the stern of the casualty out of the shallow water. He succeeded in pulling the casualty to a position about 1 cable to the south and to seaward of the 10 m. sounding contour. The casualty was advised by FAR TURBOT to drop her port anchor also which she did.
12. Holding the casualty in that position was a difficult task for Captain Billowes on DAUNTLESS. There were heavy seas and he had to be careful not to allow the towline to part as a result of snatching. This required extremely careful use of his engine power. But he was successful in doing so and I have no doubt that he displayed extremely high standards of seamanship.
13. By 0605 FAR TURBOT re-established her towage connection and the towage into Dover harbour re-commenced. By 0645 the casualty was inside the harbour and brought alongside a berth. DAUNTLESS was released. Later that day, at about 1242 FAR TURBOT left Dover and resumed her coastguard patrol duties.

The claim of the Board

14. The Board puts its claim in two ways. Firstly, it claimed that the services of both tugs, DOUGHTY and DAUNTLESS, from 0110 until 0645 on 2 January 2001 were rendered pursuant to the terms of an agreement on the terms of Lloyd's Standard Form of Salvage Agreement. Secondly, in the event that the services of DAUNTLESS were not covered by that salvage agreement it was said that the services of that tug, from 0500 until 0645 on 2 January 2002 were in the nature of salvage. The Claimants submitted that however the case was put the Court should assess the salvage remuneration due to them. The LOF agreement, with its provisions for salvage to be assessed by arbitration, was said to be no obstacle to doing so because the Defendants had never sought a stay of the proceedings pursuant to section 9 of the Arbitration Act 1996 and accordingly the Court was able to determine the issue of salvage remuneration.

The claim under LOF

15. Although the master of the casualty said in his written statement that he thought the LOF which he agreed with Captain Billowes was some sort of towage agreement any misunderstanding of the casualty's master was not known to Captain Billowes. In those circumstances any mistake which the casualty's master made could not give rise to a defence to a claim for salvage under LOF; see The Unique Mariner [1978] 1 LR438 at p.451.
16. However, once DOUGHTY left the casualty at about 0300 unable to render assistance by reason of her propeller being fouled and FAR TURBOT obtained her own LOF I consider that the LOF with the Board came to an end because both the Board and the master of the casualty must have regarded it as an end. There was no scope for any further service by DOUGHTY and the master of the casualty did not look to the Board for any further service. Nor did the Board seek to provide any further service under the LOF. Although it was asserted in argument that the Board placed DAUNTLESS on standby once DOUGHTY had to leave the casualty there was no clear evidence that that was so. Indeed, when FAR TURBOT later requested DAUNTLESS to assist with steering whilst bringing the casualty through the eastern entrance Captain Billowes did not regard that request as anything other than a request for a normal port service to be remunerated on commercial tariff terms. It is clear therefore that DAUNTLESS was not standing by, pursuant to instructions from the Board, to render salvage services under the Board's LOF. For these reasons I have inferred that that both the Board and the master of the casualty must have regarded the LOF as at an end.
17. Thus in my judgment the claim under LOF fails because no benefit was conferred on the casualty by the services of DOUGHTY; it is a "no cure no pay" contract. No submission was made that an award could be made for engaged services (see Brice on Salvage 3^rd.ed. paras.1-393 – 398).

The alternative claim at common law in respect of the services of DAUNTLESS

18. This alternative claim was based upon the principles set out in the Homewood (1928) 31 Ll.L.Rep.336 at p.339

"To constitute a salvage service by a tug under contract to tow, two elements are necessary: (1) that the tow is in danger by reason of circumstances which could not reasonably have been contemplated by the parties; and (2) that risks are incurred or duties performed by the tug which could not reasonably be held to be within the scope of the contract."

19. I have no doubt that pursuant to those principles the services of DAUNTLESS became services in the nature of salvage when, at about 0529, the towage connection with FAR TURBOT parted. The casualty was then in danger of grounding which could not reasonably have been foreseen when DAUNTLESS was instructed to assist FAR TURBOT and the DAUNTLESS incurred risks and performed duties which could not reasonably be held to be within the scope of her contractual duty to act as a steering tug.
20. The services remained in the nature of salvage until 0605 when the towage connection with FAR TURBOT was re-established and all that DAUNTLESS then had to do was assist in steering the casualty into Dover harbour. That was the service originally requested of her by FAR TURBOT on behalf of the owners of the casualty.

Assessment of the salvage award

21. The International Convention on Salvage 1989 has the force of law; see section 224 of The Merchant Shipping Act 1995. Article 13 of the Convention provides that salvage awards shall be fixed with a view to encouraging salvage operations taking into account certain listed criteria.
22. I shall consider those criteria but not exactly in the order set out in the Convention.

(a) The salved value of the vessel and other property.

23. On the basis of the evidence which was placed before me I find that the values of the salved property were as follows:

i) Sound value of ship $337,500

ii) Deductions from ship value $176,075

iii) Salved value $161,425

iv) Sound and salved value of cargo $1,151,419.64

v) Total salved value $1,312,844.64

Or £870,875.35

(d) The nature and degree of danger

24. There is cogent evidence that when the towage connection with FAR TURBOT parted the casualty was in serious danger. The events were observed by Jeremy Evans, second officer of the P&O Stena Line ferry DOVER which was tied up in Dover Harbour. He is the holder of a Master's Certificate of Competency. He considered that but for the services of DAUNTLESS the casualty would have gone aground. He added that when the casualty's port anchor was dropped the casualty seemed to be anchored. Captain Billowes also considered that the casualty would have grounded and he feared that had the casualty grounded on a rocky outcrop within the 5 m. contour the casualty would have suffered severe damage. He very fairly accepted that, although the starboard anchor had not held the casualty, the use of the port anchor might have prevented grounding. I am satisfied that there was a serious and imminent risk that in the absence of DAUNTLESS the casualty would have grounded on rocky outcrop and suffered severe damage. Had that happened it would have taken longer and would have been more difficult to salve the casualty.
25. It is possible that the casualty's port anchor might have prevented a grounding but having regard to the weather, the state of the tide and the position of the casualty when the port anchor was dropped (2 cables off the shore) the possibility of the port anchor preventing a grounding must have been extremely slight.
26. Jeremy Evans considered that had the casualty grounded there could possibly have been a major disaster with loss of life. It was not submitted that there was a risk of loss of life but it was said that had the casualty grounded there was a risk of her breaking up with an attendant risk of pollution. Had the vessel grounded there was a risk that in time she would break up. One cannot be more specific than that. The casualty carried 60 tonnes of gas oil. In the event of damage to the casualty some or all of this was at risk of being lost to the sea and would have polluted the waters in the vicinity. However, it was accepted that gas oil would rapidly disperse.

(c) The measure of success obtained by the salvor

27. DAUNTLESS succeeded in pulling the casualty a cable south beyond the 10 m.sounding contour and holding her there until FAR TURBOT re-established her towage connection. These actions successfully avoided the serious and imminent risk of grounding.

(e) The skill and efforts of the salvors in salving the vessel, other property and life.

28. I have already expressed my view that Captain Billowes displayed considerable seamanship in salving the casualty. This is an important feature of the service.

(b) The skill and efforts of the salvors in preventing or minimising damage to the environment.

29. Although the salvage of the casualty avoided the risk that gas oil might be lost this is not a case where it was said that there was a real and sensible risk of substantial damage to the environment. Nor is it a case where the services included, in addition to the services by which the casualty was salved, steps aimed at avoiding an apprehended risk of damage to the environment. The most that can be said is that by salving the casualty there was also removed the risk that 60 tons of diesel oil might have been spilled which, had it happened, would probably have given rise to concern that damage to the environment might have been caused.

(f) The time used and expenses and losses incurred by the salvors

30. The time spent was very short, 36 minutes from 0539 until 0605. Fuel was consumed by DAUNTLESS and in the course of performing the service the tow line was subjected to such wear and tear that it had to be condemned and two tyre fenders at the bow were so damaged that they too had to be replaced. The costs incurred in replacing the tow line and fenders were £1,360.20.

(g) The risk of liability and other risks run by the salvors or their equipment

31. DAUNTLESS had to work close to the 5 m. sounding contour. Her draft was 4.8m. There was about 3m. of tide but there was a swell of about 4m. There was therefore a risk that DAUNTLESS might strike the bottom and be damaged. She was a valuable tug. She had been built in 2000. She was a twin screw tug with engines of 4827 bhp. She was equipped with towing gear, fire fighting gear and bed levelling gear. Captain Billowes told me that she was also equipped with salvage pumps. Her value was pleaded at £3,000,000 but, although the pleading was verified by a statement of truth from the Board's solicitor, an explanation of that valuation was not in evidence. It can nevertheless be inferred from her particulars that she is a valuable tug. It is a most important feature of the case that she was put at risk in rendering the salvage service to the casualty.

(h) The promptness of the services rendered.

32. The required service was promptly provided. However, this was inevitable in circumstances where DAUNTLESS was already made fast to the casualty.

(i) The availability and use of vessels or other equipment intended for salvage operations; (j) The state of readiness and efficiency of the salvor's equipment and the value thereof.

33. These criteria relate to what is known as the "status" of the salvor. If the salvor has invested in salvage craft and equipment which is maintained in a state of readiness so as to be able to respond to a call for assistance he is regarded as a professional salvor and entitled, so far as the fund and the other circumstances of the case allow, to an enhanced award. The classic example is that of a salvage tug maintained on salvage station, that is, incurring idle time whilst awaiting a call for assistance. Although the presence of salvage pumps on the Board's tugs manifests some investment in salvage there was no evidence before me that the Board has made any substantial investment in salvage craft for the purposes of providing salvage services. However, the Board has craft which are capable of performing salvage services and, as this case demonstrates, is willing to despatch their tugs, when they are available, to vessels which require salvage assistance and to provide such assistance on the terms of LOF. The fact that the master, officers and crew of the tugs are on salvage articles is an indication that the Board expects to perform salvage services from time to time. The despatch of DOUGHTY in this case brought no reward and caused the Board to incur losses amounting to £3,313 as a result of damage caused by the fouling of the tug's propeller. The willingness of the Board to provide salvage services and to run the risks of abortive sorties is worthy of encouragement but to a lesser extent than that which is appropriate in the case of a professional salvor.
34. An important principle to be taken into account when fixing a salvage award is that the award must not be altogether out of proportion to the services actually rendered; see The Amerique (1874) LR 6 PC 468. The principle is of particular importance in a case such as the present where the service is of very short duration. A further matter to be borne in mind in fixing the award in this case is that the salved fund also has to bear a salvage award to FAR TURBOT. If this is not taken into account the total sum paid in salvage to FAR TURBOT and DAUNTLESS might prove to be unjustly high having regard to the fact that both services arose out of the predicament in which the casualty found herself after the collision with UNDEN. In truth DAUNTLESS was assisting FAR TURBOT in performing her service under LOF.
35. I was asked to include in the award the sums which were due to DAUNTLESS under the commercial tariff rates for her services up until 0529 and for her services after 0605. The total time involved was between 1 and 2 hours. This would, by my reckoning, provide a charge, allowing for the deadship surcharge, of £816. This approach was said to be permissible having regard to certain dicta in The Minnehaha (1861) 15 Moo (PC) 133 at pp.152-154. That may possibly be a permissible approach where the Defendant is the person who would be liable to pay the tariff rate. But in this case the tug's services were requested by FAR TURBOT to assist it in performing a salvage service. There is no evidence that in requesting the tug's services FAR TURBOT was acting on behalf of the owners of STAR MARIA. On the contrary I would expect that it incurred the tug's services on its own account and would include the cost in its salvage claim as an out of pocket expense. Since the charge cannot to be shown to be a liability of the Defendants I have left it out of account.
36. It was submitted on behalf of the Board that a fair salvage award to the Board against the whole salved fund would have been "a very high proportion of the salved fund." It was further submitted that a fair award was in excess of the sum for which the owners of FAR TURBOT settled their claim. The owners of FAR TURBOT settled their salvage claim against the owners of STAR MARIA for the sum of £15,500 which, on the basis of my findings as to values, amounts to a notional award against the whole salved fund of £126,059. I do not know what values were used in settling the claim of FAR TURBOT or what if any special factors affected the level of settlement. Nevertheless the settlement figure gives some indication of the level of award which I was invited to make in this case.
37. I am unable to accept these submissions. FAR TURBOT salved the casualty from the predicament in which the casualty found herself after the collision with UNDEN. In the course of that salvage service the casualty was taken to the entrance to Dover harbour at which point the towage connection parted. Fortunately, DAUNTLESS, following a request from FAR TURBOT, was already made fast and was able to prevent the casualty from grounding. FAR TURBOT thereafter took the casualty in tow and towed the casualty away from the shallows and into port with steering assistance from DAUNTLESS. The casualty has to pay a salvage award to FAR TURBOT for her services. At the commencement of that service the casualty was not in danger of an imminent risk of grounding. That only came about by reason of an incident near the end of the service. The fact that it came about illustrates the degree of skill and care required to tow a dead ship safely into harbour in very poor weather and sea conditions. Whilst the danger of imminent grounding is a relevant feature of the service rendered by DAUNTLESS the context in which it arose must be kept well in mind. Otherwise the salved property may find itself paying an excessive amount in respect of the services required to salve it from the predicament in which it found itself after the collision.
38. Having taken into account the criteria listed in Article 13 and the other considerations which I have mentioned and having sought to fix an award with a view to encouraging salvage operations I have reached the conclusion that a fair salvage award to the Board in this case against the whole salved fund would have been £20,000 plus the costs of repairing damage sustained in providing the service, £1,360.20, making a total award of £21,360.20.
39. The claim in this case is against the owners of STAR MARIA only. Ship's proportion of the fund is 12.29%. The salvage remuneration payable by the owners of STAR MARIA is therefore £2,626.40.
40. I also award interest on that sum at the rate of base rate plus 1% from 3 January 2001.