Scottish Court of Session Decisions

On 17th April 1909 the Aberdeen Harbour Commissioners brought an action to recover £900 and £32, 6s. of interest from Thomas Adam, shipowner, Aberdeen.

The defender had, on 4th March 1907, granted in favour of the pursuers a bail bond, the material portion of which is quoted supra in rubric, for the purpose of obtaining the release of the s.s. “Andalusia” detained by them in connection with a claim of damages. The sum now sued for was the sum of damages which had in a preceding action been found due. In that preceding action the defender had, together with the owner and his trustee in bankruptcy, been found conjunctly and severally liable in expenses, and he had paid the taxed amount of these expenses, £402, 15s. 5d. He claimed to impute this sum against the obligation under the bail bond, leaving due thereunder only £597, 4s. 7d.

The facts are given in the opinion ( infra) of the Lord Ordinary ( Salvesen), who, on 28th October 1909, repelled the defences and decerned against the defender in terms of the conclusions of the summons.

Opinion—“This is a sequel to an action at the instance of the pursuers which arose out of a collision of the s.s. ‘Andalusia’ with a swing bridge in Aberdeen Harbour. The defenders in that action were the owner and master of the steamer, and the present defender was also called for his interest, but no operative conclusions were directed against him, except that expenses were asked in the event of his appearing and opposing the conclusions. Defences were lodged on behalf of all the defenders, and eventually I granted decree against the owner's estate for a sum of £900 and found his trustee in bankruptcy and Mr Adam liable conjunctly and severally to the pursuers in expenses. My recollection is that a decree was not sought against the master, as he alleged that defences had been lodged for him without his authority.

The present defender's only connection with the matter was that he had granted a bail bond to obtain the release of the vessel pending the ascertainment of the ship's liability. The question in this case relates to the construction of the bail bond. The defender maintains that he is entitled to impute towards extinction of his liability under the bond the sum of £402, 15s. 5d. which he paid to the pursuers under the decree for expenses already referred to.

The obligation in the bail bond is as follows:—‘I, the said Thomas Adam, do hereby bind myself … to pay to the Commissioners such sum, not exceeding One thousand pounds sterling, as may by any competent court of law be found due to the Commissioners for damages and costs in respect of said occurrence by the owner, master, or others having responsibility for said vessel’; and he argued that the costs incurred by the pursuers in obtaining the decree of a competent court were part of the sum for which he was liable under this obligation, and in so far as paid must be imputed towards its extinction. I think this would have been so if he had not intervened in the suit at all, in which case the taxed costs decerned

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for against the owner or master, so far as not recovered from them or their estates, would have been recoverable from the defender under the same limitations as the ascertained damages. He chose, however, to contest the action and so rendered himself personally liable in expenses. The decree against him for these expenses had no connection with the sum which he undertook to pay in the bail bond, although no doubt it was his ultimate liability under the bail bond that gave him an interest in resisting the ship's liability for damages or in endeavouring to minimise the claim. For all that appears the whole defence may have been instigated by Mr Adam, and indeed this appears very probable, as the master did not authorise it and the owner had become bankrupt. It would therefore seem inequitable that he should be entitled to reduce the pursuers' claim for reimbursement from him by the expenses which he caused them to incur by what proved to be an unfounded defence. Of course this would be no answer if the words relied on clearly provided for such a contingency. In my opinion, however, the costs referred to in the bail bond being ‘costs found due to the Commissioners by the owner, master, or others having responsibility for the vessel,’ do not include costs caused by the defender personally intervening in the action against the owner. I am therefore of opinion that the defences fall to be repelled, and that the pursuers are entitled to decree as concluded for.”

The defender reclaimed.