Scottish Court of Session Decisions

By charter-party between Jesse Lilly and others, owners of the s.s. ‘Charles Steels,’ and D. M. Stevenson & Company, Leith, the charterers, it was contracted, inter alia, '‘that said ship being tight, staunch, and every way fitted for the voyage, shall proceed as soon as possible to Burntisland, Methil, Bo'ness, or Grangemouth, and there receive, in one or more lots as ordered, at the berth or berths pointed out by charterers' agents, if required, a full cargo of coals. The charterers hereby agree to supply the said cargo… . The coals to be loaded in sixty hours, and delivery to be taken at the rate of 300 tons per running day, weather permitting, and Sundays and holidays excepted in both cases. Receivers to have option of discharging cargo, ship paying the usual charge for same, but at Aarhus 6d. per ton only, and giving free use of winches and steam where customary. No bunker coal to be shipped in steamer's holds without consent of charterers. If longer detained, demurrage to be paid at 12/6 per hour, unless detention arises from a lockout, strike, restriction, accident, stoppage, idle time, or holidays at any works, mine, or mines with which vessel may be booked, railway strikes, breakdowns, or detentions, accidents to loading machinery, strikes, holidays, or idle time, or any cause beyond merchants; control, delaying the obtaining, providing, loading, or discharging of cargo. Lay-days to count from the time the master has got the ship reported, berthed, and ready to receive or deliver cargo, and given notice of same in writing to charterers or their agents during business hours, say between 9 a.m. and 5 p.m., but loading time not to count while bunkering or discharging inward cargo, nor during idle time or holidays, nor between 2 p.m. on Saturdays and 7 a.m. on Mondays, unless used, nor during time (if any) during which loading is stopped through ship being aground… .”

On 19th October 1893 the charterers ordered their agents at Bo'ness to book the ‘Charles Steels’ to be loaded at that port with coal from Longrigg Colliery, and thereafter the ship was ordered by the charterers to proceed to Bo'ness and there load her cargo. In accordance with the orders given the ‘Charles Steels’ proceeded to Bo'ness, where she arrived at 4 a.m. on Monday, 13th November 1893, and on the same day the master gave written intimation to the charterers' agents that the ship was ready to receive cargo. At 6 a.m. on Tuesday 14th November a berth was available for loading the cargo of the ‘Charles Steels,’ and the master gave notice in writing to the charterers' agents, “As a berth was available this morning at 6 o'clock, at which the s.s. ‘Charles Steels’ could load her cargo, that the lay-days for loading the s.s. ‘Charles Steels’ commenced at six o'clock this morning, the 14th day of November 1893, and will run and count as per charter-party.”

Notwithstanding this notice there were no coals forward for the ‘Charles Steels’, and according to the custom of the port of Bo'ness the berth was given to another vessel whose cargo was ready for shipment. On 20th or 22nd November coals were brought forward, and the ‘Charles Steels’ was berthed on the latter date.

On 23rd November a strike took place at Longrigg Colliery, which lasted till 11th December 1893, and it was not till Friday 15th December at 3·10 a.m. that the vessel was actually loaded.

In these circumstances the shipowners contended that the ship was, in terms of the charter-party, on demurrage from 16th November at 6 p.m. to Friday 15th December at 3 a.m., being a period of 677 hours, after deducting four hours during which the ship was occupied in bunkering. They therefore demanded demurrage from the charterers at the rate of 12s. 6d. per hour, amounting to £423, 2s. 6d. The charterers denied their liability under the charter-party, and the owners thereupon raised an action against the charterers for the above sum.

After proof the Lord Ordinary ( Wellwood) on 9th November 1894 decerned against the defenders for the sum of £408, 2s. 6d.

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“ Opinion.—[After narrating the facts and referring to the provisions of the charter-party.]—The pursuers now sue for demurrage at the stipulated rate, or alternatively, for damages for detention. They maintain that if the charterers had had a cargo forward on 14th November the ‘Charles Steels’ would have got a berth, and would have been loaded before the strike commenced.

1. The defenders' first proposition is that they were under no obligation to supply a cargo, and the lay-days did not begin to run until the ‘Charles Steels’ was berthed on 22nd November. The pursuers answer that they were prevented from getting the vessel berthed by the act of the defenders themselves, because, according to the custom of the port, the harbour-master will not allow a vessel to enter or remain in a berth unless its cargo is forward. The following is the evidence of the harbourmaster, Angus M'Intosh, in regard to the custom of the port—‘Vessels take their turn at the loading berth according to the time of their arrival in the dock or harbour, if there is cargo there for them. It is I who authorise the taking of the vessel to the berth under the crane—after I am asked for it. When I am asked I regulate the order by the regular turn of the vessel. If, when a vessel's turn to go into the loading berth comes, she has not cargo forward, I take the next vessel in turn if she has cargo there. According to usage a vessel waiting her turn is not allowed to go into the berth unless her cargo, or part of her cargo is there, or her bunker coals if she is a steamer. If a vessel misses her turn through her cargo not being there, when her cargo arrives she gets the first vacant berth. A vessel which gets the turn in place of one whose cargo is not forward is allowed to complete her cargo before leaving the berth, but as soon as the berth is vacant the vessel that has lost her turn is reinstated if in the meantime her cargo has arrived.’ And again—‘If the master or agent of a ship had told me on the 13th of November 1893 that his bunker coal was forward and he wanted to load it, I would have been bound to give him the berth if it was his turn. If the bunker coal of the ‘Charles Steels’ had been forward on the morning of the 14th November, and the agent had asked me for the berth, I would have given it. Messrs Stevenson & Cowie were the ship's agents.’ And lastly—‘If a vessel got into the berth to take in her bunker coal, if when it was in she had no cargo there, I would turn her out.’

The defenders maintain that even if the ‘Charles Steels’ failure to obtain a berth was due to their not having supplied a cargo, the condition must be taken literally, and that the pursuers must be held to have agreed to run the risk of not obtaining a berth until the cargo was forward, trusting to the defenders, in their own interest, supplying a cargo in good time. I am unable to sustain this contention. It would place the shipowner absolutely at the mercy of the charterers. The contract must be construed reasonably in the view of the custom of the port of loading, and so construed, I think that the expression ‘berthed’ in the charter-party must be read as meaning that a berth shall be available for the vessel, and the vessel ready to enter and receive the cargo. In this, as in other contracts where there is a condition-precedent which one party has been prevented from fulfilling through the fault of the other, the condition is held to have been satisfied— Mackay v. Dick & Stevenson, 8 R. (H. of L.) 37. If the ‘Charles Steels’ had been prevented from obtaining a berth through any fault of the pursuers, or through the crowded state of the docks in the port, or the action of the harbour authorities alone, the pursuers would have had no claim for demurrage. But the only reason why the vessel was not berthed was that (I assume meantime through the fault of the defenders) the cargo was not forward. The pursuers had done all that lay upon them; the vessel had reached the port of loading and entered the dock; its turn for a berth had arrived; the harbour-master was ready to assign a berth; and notice had been given in writing to the charterers' agents. In these circumstances the vessel must be held to have been berthed.

The defenders maintain that it is unreasonable that they should be expected to have a cargo waiting for a vessel whose turn may not arrive for many days. But that is one of the consequences of the rule of the port, as the defenders well knew. It is plain from their correspondence with the Longrigg Colliery that they fully recognised and strongly contended that vessels in the position of the ‘Charles Steels’ without cargo, and therefore without a berth, were on demurrage. I may refer, for instance, to their letter of 19th October 1893 to James Nimmo & Company, in which they say—‘We are sorely disappointed at not receiving any coal from you for the past few days for boats lying ready so long and demurrage accruing. In the face of our bookings and the quantity we have to get from you, we do not see why you should engage and give preference to other tonnage to gain a mere temporary benefit.’

To this, James Nimmo & Company replied to the defenders in a letter dated 20th October 1893—‘We note what you say with reference to supplies of coal to you this month, but we must repudiate the remark you make as to our engaging and and giving preference to other tonnage to gain a temporary advantage. We are not doing so, because you know very well that the non-shipment of coal into your steamers at Bo'ness has arisen through their inability to secure berths, and we are satisfied that inquiry at Bo'ness will show that we have loaded any of your boats which have been in turn.’ The defenders replied by letter to James Nimmo & Company, of date 21st October 1893—‘Your favour of yesterday received. You are quite wrong in saying that the non-shipment of Longrigg coal into our ships is caused through their inability to secure berths. You know perfectly well that you have not sent us any coal to Bo'ness during the past few

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days, since 17th inst., while our boats would have got berthed long ago had you sent them, but instead of this you are keeping our ships out of berth by sending coal to load into other boats. There is no use trying to blink the fact that the steamers “Creto,” “River Avon,” and “George Fisher” have got the preference and the coal, keeping us short of our due supplies for days and weeks past, landing us into heavy demurrage, and yet you say we remain scatheless.’ Besides, it does not seem to have been the defenders' custom to order coals specially for any particular vessel. The vessels as they arrived got their share of the weekly supply which the colliery ‘poured into’ Bo'ness. It was the failure of this regular supply which led to the detention of the ‘Charles Steels.’

2. I have felt more difficulty in regard to the next question, whether, still assuming that the defenders were in fault in not having a cargo ready for the ‘Charles Steels’ the pursuers might not have satisfied the condition by getting the vessel berthed for the purpose of loading her bunkers. It is clear from the evidence that even if she had been allowed to enter the berth for that purpose it would have been useless, so far as loading the cargo was concerned, because the harbour—master would have turned her out as soon as her bunkers were loaded—that is in three or four hours—if her cargo was not then forward. At the same time, if the harbour-master's evidence is correct, he would, had he been asked, have allowed her to go into the berth for the purpose of loading her bunkers. It is somewhat strange that the master of the ‘Charles Steels’ and Stevenson & Cowie, the agents for the charterers as well as for the ship, were under the impression that as a matter of right the ‘Charles Steels’ was not entitled to get into a berth to load her bunkers, and the witnesses, Richard Mackie and William M'Taggart, men of experience in the shipping trade, entertained the same belief. But taking it that, strictly speaking, the ‘Charles Steels’ might have claimed the berth in order to load her bunkers, I am not prepared to hold that the pursuers were bound to do so for the purpose of satisfying the condition in the charter-party. It is the evidence of Mackie, a shipowner of experience, concurred in by M'Taggart, that it is the custom in the shipping trade not to berth a vessel to take in bunker coals if the cargo is not forward, and that the custom is not to load bunkers until part of the cargo has been loaded. Now, the expression 'berthed in the charter-party must, I think, be held as meaning berthed for the purpose of receiving cargo. The pursners were not bound to incur the expense and trouble of berthing the vessel merely for the purpose of loading bunkers out of the usual and convenient order. As I have said, even had they done so, detention would not have been avoided, because the vessel would have been turned out of the berth on the forenoon of 14th November after loading bunkers.

It must also be observed that the defenders' agents, who of course knew that no cargo was forthcoming, were fully as responsible as the defenders for not berthing the vessel if there was any neglect in the matter.

3. The next question is, whether the defenders are saved from the consequences of not timeously supplying a cargo by any of the exceptions in their favour in the charter-party. They maintain that the detention arose from a ‘cause beyond the merchant's control delaying the obtaining, providing, or loading … of cargo.’ I am of opinion that these words do not apply to the particular cause or causes which in this case led to a cargo not being supplied. It appears from the correspondence that the owners of the colliery, while they undertook to supply a certain quantity of coal before the end of the year, were not bound to supply, or at least did not admit that they were bound to supply, a cargo for any particular ship, or even to furnish any fixed quantity of coal in any particular month. Notwithstanding that the defenders were well aware of the contention of the colliery owners as to the terms of their contract, they continued to charter vessels, including the ‘Charles Steels,’ and book them with Longrigg Colliery against the remonstrances of the colliery owners. Now, at the time in question, in consequence of a strike in the coal trade in England, there was a great demand for Scotch coal, and high prices were obtained for it. It is not distinctly proved where the Longrigg Colliery's coal was going during November 1893, but it is clear that it was being sent to customers other than the defenders. Now, even if the Longrigg Colliery were in breach of their contract with the defenders in not sending more coal to Bo'ness, that is not a cause beyond the control of the defenders in the sense of the charter-party. I may refer to the case of Gardiner and Others v. M'Farlane, M'Crindell & Company, 20 R. 414, especially Lord Trayner's opinion at p. 427. The causes of detention contemplated in the charter-party as constituting exceptions are strikes, lock-outs, accidents, and so forth—causes preventing or restricting output, or preventing or delaying the transit of the coal to the port. Here the cause of delay was either the fault of the defenders themselves in failing to make a contract with the mine-owners which would effectually insure the coal being forward in time, or in booking more vessels than the colliery could be expected to supply, or it was the fault of their agents, the mine-owners, in supplying other customers, and not properly fulfilling their contract with the defenders. Such causes do not, in my opinion, fall within the exceptions. In either case the pursuers cannot be allowed to suffer.

4. The only other matter to be determined is the amount of demurrage or damages to be awarded. It is said that during the month of November there was a restricted output at Longrigg Colliery in consequence of the approach of the strike. I do not think that it is clearly and satisfactorily made out that at the time which is

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of importance, viz., between the beginning of November and the 20th of that month, there was any substantial restriction of output at Longrigg Colliery. Comparing, for instance, the output during the first eleven working days of November (1st to 17th) with that during the last eleven working days of October (17th to 31st), it will be found that there is only a difference in favour of October of 346 tons, or an average of 31 tons a-day. I am therefore not prepared to make any reduction on the head of restricted output, but the defenders will be entitled to have deducted four hours for loading bunkers, and twenty-four hours for Thursday, 16th November, taking it as an idle day—in all twenty-eight hours—which, being deducted from 681 hours, leaves 653 hours. Calculating demurrage at the rate of 12s. 6d. an hour, brings out £408, 2s. 6d., for which the pursuers are entitled to decree.”

The defenders reclaimed, and argued, inter alia—(1) In terms of the charter-party the lay-days did not commence till the master had got the ship berthed on 22nd November. The pursuers construed “Laydays to count from the time the master got ship berthed,” as meaning “Lay-days to count from the time that berth available.” This was not a fair construction. Under a fair reading of the charter-party the defenders had no duty to commence loading until the ship was berthed. In any event, even if no cargo was forward, the master might have berthed the ship on the 14th in order to get her bunkered, and the ship would thus have been berthed in terms of the charter-party. (2) Under the charter-party they were not liable for demurrage during the period of the strike at Longrigg Colliery. “If longer detained” meant “If detained longer than the lay-days.”

Argued, inter alia, for pursuers—(1) The lay-days commenced on 14th November. The ship on that date was in port and a berth was ready for her, and it was through the fault of the defenders in not having coals forward for loading that the ship was not allowed to get berthed. The defenders had not excused their failure to bring coals forward under any condition in the charter-party, and they were thus liable for the ship's failure to get berthed. The pursuers had fulfilled all that was required of them in order to get the ship berthed, and the defenders were alone in fault. (2) Demurrage must be paid for the period of the strike. The exemption did not apply in a case like this where no use had been made of the lay-days. If the lay-days had been used the ship would have been loaded before the strike commenced, and the pursuers should not be made to suffer on account of the negligence of the defenders. If it were decided otherwise, the charter-party would amount to a contract for the lease of the ship for any length of time at 12s. 6d. an hour subject to the exceptions specified. The Lord Ordinary's judgment Was right and should be affirmed.

At advising—