Scottish Court of Session Decisions

Robert Nicholson, Leith, the master, and William A. Gray and others, certain members of the crew of the steam tug “R. Nicholson,” pursuers, brought an action against the Leith Salvage and Towage Company, Limited, defenders; and also against John Williamson, marine engineer, Leith, and others, the remaining members of the crew for their interest, defenders, for payment of £1000 as their share of salvage money paid to the principal defenders, and for apportionment among the pursuers in such manner as the Court should deem just of the aforesaid sum of £1000.

The Leith Salvage and Towage Company, Limited, lodged defences.

The following narrative of the facts of the case is taken from the opinion of Lord Hunter infra:—“The pursuers were the master and some of the crew of the steam tug ‘R. Nicholson’ at a time when certain services were rendered by the said tug to the s.s. ‘Graciana.’ In this action they seek to recover from the owners of the ‘R. Nicholson’ a portion of the sum recovered by the latter under an award by an arbiter fixing the sum of £10,000 as payable by the owners of the s.s. ‘Graciana’ for salvage services rendered to that vessel. The ‘Graciana’ had in the early morning of Thursday, 27th May 1920, in a dense fog gone ashore on a reef of rocks near one of the Farne Islands lying off the Berwick coast. The defenders, who carry on the business of tug owners and salvors of vessels, employed three tugs, the ‘R. Nicholson,’ on which the pursuers were employed, the ‘Earl of Powis,’ and the ‘Flying Fish,’ in connection with the operations which were successful in pulling the ‘Graciana’ off the rocks and enabling her to dock in West Hartlepool on Wednesday, 2nd June 1920. These services were rendered under an agreement between the defenders and the

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master of the ‘Graciana’ on behalf of the owners and underwriters of that vessel dated 27th May 1920, under which it was provided that the services were to be rendered on “no cure no pay” terms—the amount of the remuneration to be settled by mutual agreement or arbitration. By a memorandum of agreement dated 9th November 1920, on the narrative that salvage services had been rendered by the defenders to the ‘Graciana,’ her cargo, and freight, in the month of May 1920, it was agreed between the defenders and the owners of the ‘Graciana,’ her cargo, and freight, that the amount of remuneration payable to the defenders for the said salvage services should be referred to the arbitration of Mr Bateson, K.C. In the claim put in by the defenders the claimants are described as the owners, masters, officers, and crews of the salvage steam tug ‘Earl of Powis’ and the steam tugs ‘R. Nicholson’ and ‘Flying Fish,’ who are said to have rendered salvage services to the respondents' steamship, her cargo, and freight off the Berwick coast in the North Sea during the months of May and June 1920.

The pursuers averred, inter alia—“(Cond. 1) The pursuer Robert Nicholson, master, the pursuer William A. Gray, mate, the pursuer Charles M'Gregor, second engineer, and the other two pursuers, formed five of the eight members of the crew of the steam tug ‘R. Nicholson’ belonging to the defenders when the salvage services after mentioned were rendered by the said tug to the s.s. ‘Graciana.’ The three defenders called for their interest were the other three members of the crew of the said tug on said occasion.”

The defenders averred, inter alia—( Ans. 2) “All of the vessels of the defenders' fleet of salvage and other tugs are, as and when required, used by them in connection with the salvage operations which the company may undertake under contract or otherwise. The masters, officers, and crews whom the defenders engage assist, as they are bound by their engagement to do, in such operations. It was well known to the pursuers that their duties were to include the carrying out of and assisting at salvage operations, and this was accepted by them as part of their ordinary duties when they entered the service of the defenders. It was further well known to and agreed to by the pursuers that apart from the remuneration paid to them for such duties they were not to be entitled to any further remuneration in the form of a salvage award. This arrangement has been acquiesced in and acted on by the pursuers, and in particular by the pursuer Robert Nicholson over a long number of years. The arrangement is also in accordance with the established custom prevailing between salvage contractors and their servants for the carrying out of all salvage operations. Denied that the pursuer Nicholson or any other employee of the defenders' company have ever shared in a salvage award either with the defenders or their predecessors. Further, as is well known to the pursuers, the ‘R. Nicholson’ and other tugs belonging to the defenders are fitted with a special steam valve available for use in connection with salvage pumps as and when required during salvage operations.”

The pursuers pleaded, inter alia—“1. The pursuers having voluntarily rendered the salvage services condescended on, are entitled to be compensated therefor. 4. The pursuers not having been engaged to perform the salvage services condescended on, as part of their ordinary employment, and for which the defenders have been paid, are entitled to be compensated therefor by the defenders.”

The defenders pleaded, inter alia—“1. The pursuers' averments being irrelevant and insufficient to support the conclusions of the summons, the action should be dismissed. 2. The services founded on having been rendered in the ordinary course of the pursuers' employment with the defenders, the pursuers are not entitled to a salvage award, and the defenders should be assoilzied. 3. The pursuers having been engaged and paid by the defenders to perform the services founded on as part of their ordinary employment, without any additional remuneration for salvage operations, are not entitled to any additional remuneration therefor, and the defenders should be assoilzied. 4. The defenders not having received any remuneration in which the pursuers are entitled to participate are entitled to be assoilzied.”

The agreement between the defenders and the owners of the s.s. “Graciana” was as follows:—

“1. No Cure No Pay’ Salvage Agreement between defenders and owners of s.s. ‘Graciana,’ made at Crimston Rocks.

“Crimston Rocks, 27/5/1920.

Salvage Agreement. No cure No pay.

Agreement entered into this day between Captain F. R. Park, master of the steamship ‘Graciana,’ acting for the owners and underwriters of the steamship ‘Graciana’ and her cargo, and Captain C. G. Bonner on behalf of the Leith Salvage and Towage Company, Limited, salvage contractors.

“(1) The said Captain C. G. Bonner, on behalf of the Leith Salvage and Towage Company, Limited, of Leith, agrees to refloat the s.s. ‘Graciana’ and her cargo and escort her to a port of safety. (2) It is mutually agreed that these services be rendered on no cure no pay terms, the amount of the remuneration for the above services to be settled by mutual agreement or arbitration.”

The claim lodged by the defenders in the arbitration was as follows:—

“ The ‘Graciana,’

Points of Claim.

1. The claimants are the owners, masters, officers, and crews of the salvage steam tug ‘Earl of Powis’ and the steam tugs ‘R. Nicholson’ and ‘Flying Fish,’ and rendered salvage services to the respondents' steamship ‘Graciana,’ her cargo and freight, off the Berwick coast in the North Sea, during the months of May and June

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1920, in the circumstances hereinafter appearing

The claimants ask for such an amount of salvage as may be just, and costs.”

On 7th December 1921 the Lord Ordinary ( Blackburn) before answer allowed the parties a proof of their averments so far as relevant to the terms on which the pursuers were employed by the defenders—the defenders to lead in the proof.

Thereafter on 15th March 1922 his Lordship pronounced an interlocutor in which he sustained the second plea-in-law for the compearing defenders and assoilzied them from the conclusions of the summons.

Opinion.—“The evidence which has been led in this case has at least satisfied me of the wisdom of the defenders in asking that the proof should at its initial stages be directed to the question of the employment of the pursuers, because I think by so doing a great deal of unnecessary time and a great waste of money has been avoided.

The defenders are a company carrying on the business of towage and salvage at Leith, and it is proved that the salvage work is the principal part of their business. The pursuers are men who have been employed by the defenders to serve them in the conduct of their business. The defenders necessarily possess a fleet of tugs, and an endeavour has been made in the course of the case to distinguish between what have been called towage tugs and what have been called salvage tugs. I confess I am unable to appreciate any such distinction, because in many cases of pure salvage nothing more is required than towage services, and therefore every one of these tugs kept by the defenders was capable of rendering under certain circumstances complete salvage service. I have no doubt that some of the tugs belonging to the defenders are specially equipped for use in salvage operations of some special character. Where pumping is required, and so on, some of the tugs may be more adapted for that purpose than tugs which are only used for towing purposes, but that does not mean that a tug which is not equipped with pumping facilities is incapable of doing salvage work. I think it was, perhaps, a little unfortunate that the defenders, probably with the view of strengthening their case, made any reference to the steam valve attached to the boiler of the tug the ‘R. Nicholson’ —which is the tug in question in this case. I have no doubt that the existence of that valve makes this particular tug available for certain salvage purposes which other tugs not fitted with a valve of that sort could not render. But it has not been part of the defenders' case that the ‘R. Nicholson’ has ever been used for the purpose of pumping in the course of salving derelict vessels. The fact that there apparently was no special adjustment to enable the pump hose to be attached to the valve shows that the tug could not have been used for that purpose in the past, but an adjustment of that sort is a simple matter, and there is no doubt that the tug, if required, might have been used for salvage operations of that character.

Now the pursuers were employed by the defenders to serve upon their vessels, and so far as the terms of their engagement are concerned, which are the terms laid down by their union, there is no difference between the terms on which men were engaged to serve on a tug specially adapted for a particular form of salvage and the terms on which men were engaged to serve on a tug only adapted for the purpose of towing. In each case the wages are the same for the 10-hours’ day, and the only distinction in the pay of the men employed for the time in salvage operations and the pay of those employed on towage operations which are not of the nature of salvage is that the men at salvage work are remunerated on a rather more generous overtime basis than the men employed on simple towage work, while the men on towage work get an extra allowance for work done at a distance from home. Now that being the position I have no hesitation in coming to the conclusion that when the pursuers were engaged they knew that they might be employed on salvage operations on behalf of the defenders and that they undertook to render such services as part of their employment.

It is said for the pursuers that to disentitle them to share in a salvage award which might result from salvage operations it was necessary that a renunciation of their right to share in any salvage award must have been expressly stipulated for in the agreement entered into between them and their employers—Merchant Shipping Act 1894, sec. 156 (1) (2). I think that raises directly the question whether the operations rendered in this case were truly of the nature of salvage services within the sense of section 156 of the Merchant Shipping Act. Now salvage services have been frequently defined. They are very well defined by Lord Ardwall in the ‘ Clan’ case ( 1908 S.C. at p. 658) to which I was referred, where he says they must be voluntary and spontaneous and not rendered in respect of any contractual or official duty. There was a remark made by the witness Robert Nicholson which emphasises this description of salvage services. Robert Nicholson said in the box that he had always understood that it was the duty of a seaman to render assistance in all cases of distress at sea. This is undoubtedly the case, and there is a passage in L. J. Kennedy's book on salvage where he says that no one except a freebooter would refrain from rendering such services. But services so rendered are a duty to the person or the ship which is assisted and to no one else. Clearly when a vessel manned by a crew which has only been engaged to navigate the ship from port to port meets a sister ship in distress and proceeds to render her assistance the services which are rendered by the crew of the salving vessel are rendered under their sense of duty to the ship in distress and not under any sense of duty to their employers or in terms of their contract with their employer. This seems to me to be the distinction between the salvage service contemplated in section 156 of the Merchant

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Shipping Act and the services which were rendered in the present case. Services rendered as I have described, under a sense of duty to the ship or the people who are being assisted, are spontaneous, and they are voluntary, because no man is under any obligation except a moral obligation to render such services. But the services rendered in this case to the ‘Graciana’ were not services rendered by the pursuers under a sense of duty to the ‘Graciana’ or under anything except their sense of duty to their employers. I agree with the remark made by Mr Mitchell for the pursuers that the fact that services are rendered under contract does not necessarily prevent them from being both voluntary and spontaneous. It is quite common, where a ship in distress is assisted on the high seas, that before any salving operations are performed a contract is made between the salvors and the ship as to the terms of remuneration, and the fact that a contract of that sort is entered into does not make the salvage operations any less voluntary and spontaneous in their character. But the salvage operations in this case were something entirely different. The defenders had entered into a contract on dry land with the owners of a ship which was on the rocks at the Farne Islands to salve the ship off the rocks and take her to a place of safety. This contract was not entered into under any sense of duty to the stranded vessel but as a matter of the ordinary business carried on by the defenders, and the crew of the ‘R. Nicholson’ were acting under their contract of service with their masters and nothing else. No one can suggest for a moment that there is any duty on a tug lying at Granton or Leith to steam away to the Farne Islands in order to salve a ship off the rocks. It may be the duty of some one nearer to rescue the crew, but there can be no duty on a crew lying at Granton. Accordingly I think that the real distinction between the services rendered by the pursuers in this case and salvage services such as are contemplated in section 156 of the Merchant Shipping Act, are that these services were not rendered under any sense of duty to the ‘Graciana,’ but simply from a sense of duty to their employers, by whom they had been engaged to do such work as they might be required to do in the ordinary course of the defenders' business.

Now I am also satisfied on the evidence that it is well recognised in practice that in cases similar to this the crew of the salvors’ tugs are remunerated by the extra overtime wages which they get, and are not entitled to claim any part of the salvage award which their employers may obtain if the work of salvage is successful. At any rate no instance was cited of a salvage award earned by professional salvors in circumstances like the present being shared with the crews. But there was in the evidence reference to quite a different class of case to that with which we are dealing—cases which were referred to as ‘pick-up cases,’ where tugs have on their own initiative voluntarily and spontaneously gone to the assistance of a vessel in distress with whom their employers had had no negotiations and no contract whatever. The services rendered in these cases come, to my mind, very close to what I have tried to describe as proper salvage services, because they are rendered out of a sense of duty to the ship in distress and not necessarily under any sense of duty to their employers. The employers, of course, benefit in such cases if the salvage is successful, and it is to their interest to encourage their employees to undertake such voluntary and spontaneous duties. It is proved that in such cases the crews of the vessels always receive some extra remuneration for the job they have performed. The question whether that is to be regarded as a gratuity, to reward them for pushing their masters’ business, or as an award of salvage to which their services entitle them, is not raised in this case. It is a question of some nicety which may come up in another case, and on which I express no opinion. Nor, again, is the question which was mooted in the evidence properly raised in this case, namely, whether the pursuers were paid their proper wages in consideration of work done—that is to say, whether they were paid on the more generous scale for overtime appropriate to salvage operations, or on the less generous scale appropriate to towage operations. That is a matter not raised on record. The only question before me, and raised in this action, is whether the pursuers are entitled to a share of the salvage award in respect of the services rendered to the ‘Graciana.’ In my opinion they are not entitled to a share, on the ground that the services they rendered were not rendered out of any sense of duty to the ship salved, but under and in terms of their engagement with the defenders.

Accordingly I shall sustain the second plea-in-law for the defenders, and assoilzie them from the conclusions of the action, with expenses.”

The pursuers reclaimed, and argued—1. The defenders had failed to prove any agreement between the defenders and the pursuers that the latter would forego their right to salvage. The only agreement between them was an agreement by the crew to do towage work, and that was the only duty which the crew owed to the defenders. Salvage was not a duty owed to a master. It was a public duty. Salvage was a voluntary service rendered by ships at sea, which were not under a contract to render the service, e.g., a contract under which vessels were sailing as consorts for their mutual protection—Kennedy on Civil Salvage (2nd ed.), p. 84. A claim for salvage was not a contractual claim—Merchant Shipping Act 1894 (57 and 58 Vict. cap. 60), sec. 546. It did not originate in a written agreement. The contract which the defenders had entered into with the owners of the salved vessel as to the amount to be paid for the assistance to be given did not after the character of the service or of the reward—Kennedy on Civil Salvage (2nd ed.), p. 225. A contract such as that did not preclude a claim for salvage. In order to

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exclude a claim for salvage the contract to give services must be one which was entered into before the wreck took place. The contract in the present case was not entered into until alter the wreck took place. Section 212 of the Merchant Shipping Act 1894 prohibited the assignment or sale of salvage payable to a seaman, and sub-section 1 of section 156 invalidated agreements by seamen to abandon their right to salvage, except such agreements as fell within sub-section 2 of the same section. Sub-section 2, however, only meant that all agreements by seamen to forego their right to salvage were not necessarily illegal— The “Ganges,” (1869) L.R., 2 A. & E. 370; Kennedy on Civil Salvage (2nd ed.), p. 260. The agreement between the owners and the crew in the present case did not fall within that sub-section. It did not satisfy the three conditions laid down by Dr Lushington in the “ Pride of Canada,” (1864) 9 L.T. (N.S.) 546, at p. 547. 2. Even if the agreement between the owners and the crew in the present case were an agreement which fell within sub-section 2, nevertheless it was an invalid agreement, because at the time when it was entered into the crew were unaware of its effect— The “Pride of Canada” ( cit.). 3. Even if the agreement between the owners and the crew in the present case were an agreement which fell within sub-section 2, nevertheless it was an invalid agreement because it was an inequitable agreement. The Court would examine an agreement to see whether it was equitable— The “Ganges” ( cit.); Kennedy on Civil Salvage (2nd ed.), pp. 257 and 261—and there was an onus on the party founding on an agreement to show that it was equitable. 4. The defenders had failed to prove any custom whereby the statutory requirements were dispensed with, and in any event no such custom could be recognised as a bar to salvage— The “John, 28th January 1846, Pritch. Adm. Dig. (3rd ed.), vol. ii, p. 1890. 5. Even if the tug were specially equipped with salvage plant, that circumstance should not invalidate the pursuers' claim to participate in the salvage award— The “Morgana,” [1920] P. 442, per Hill, J., at p. 445. In that case the claim was debarred by reason of the language of the Merchant Shipping (Salvage) Act 1916 (6 and 7 Geo. V, cap. 41), sec. 1, but that Act did not apply to the claim in the present case.

Argued for the respondents—1. Even if the services rendered by the defenders to the owners of the disabled vessel were salvage services as between these parties, nevertheless in so far as regards the pursuers the services were not salvage services properly so called, because so far as regards the pursuers the services were contractual and not voluntary— Clan Steam Trawling Company, Limited v. Aberdeen Steam Trawling and Fishing Company, Limited, 1908 S.C. 651, 45 S.L.R. 462, per Lord Justice-Clerk (Kingsburgh) at 1908 S.C. 657, 45 S.L.R. 466, and Lord Ardwall at 1908 S.C. 658, 45 S.L.R. 466’; The “Solway Prince,” [1896] P 120, per Sir F H. Jeune at p. 127; The “Sappho,” (1871) L.R., 3 P.C. 690, per Mellish, L. J., at p. 694–5; Kennedy on Civil Salvage (2nd ed.) pp. 2 and 28. There was proof that the pursuers had knowingly contracted to do salvage work for the defenders when called upon as part of their ordinary work, and to do it without any paid memento. Such a contract was not illegal, because sub-section (1) of section 156 of the Merchant Shipping Act 1894 did not apply to a case like the present, where no salvage services properly so called had been rendered by the master or crew. In any event the sub-section did not apply to the case of the master of a vessel— The “Wilhelm Tell,” [1892] P 337; Merchant Shipping Act 1894, sec. 742. 2. Even if the services rendered by the master and crew were to be regarded as salvage services, the contract which the pursuers entered into with the defenders excluded claims by the pursuers for salvage remuneration, and the contract was not illegal because it fell within subsection 2 of section 156. Moreover, it was not the custom to give salvage remuneration, and the defenders must be held to have known and acquiesced in the custom.