Cases 2

Question 1

Magnus v Buttemer

Stranding

Answer 1

• Vessel proceeded to wharf to discharge cargo
• She floated and grounded with the rise and fall of the tide
• Every time she grounded, she took on a list and was later found to be damaged
• The owners claimed for a loss by a peril of the seas (stranding)
• Court had to consider whether the grounding during the normal rise and fall of the tide, constituted a stranding
• Court held it was not a stranding, as there was an absence of fortuity in the incident.

Question 2

The “Vancouver”

Simultaneous repairs

Answer 2

• Following a voyage, the vessel was found to have a foul bottom
• Dry dock was necessary to enable repairs and painting etc.
• During repairs, the stern post was found damaged due to a peril of the seas, so therefore such damage repairs were recoverable from hull insurers.
• The work was carried out simultaneously with owners works and completed within the 8 days.
• Court held that simultaneous works had saved time in the dry docking and so the costs should be divided equally over the common days saved.

Question 3

The “Ruabon”

Drydock expenses

Answer 3

• The vessel drydocked for grounding repairs, but owners took the opportunity to also effect maintenance and classification surveys.
• The owners claimed all dry-docking costs on their insurance
• Insurers argued that the repairs ought to be equally divided
• The court held that the whole of the dry-docking expenses should be paid by the underwriters.

Question 4

The “Knight of St. Michael”

GA sacrifice

Answer 4

• During a voyage, part of the cargo onboard began to heat and had to be discharged at a port of refuge
• The shipowner claimed for the loss of freight, but Insurers denied liability
• It was held reasonably certain that, if the voyage had continued, spontaneous combustion would have occurred, and the ship / cargo would have been destroyed.
• The court ruled that the assured could recover the lost freight, because loss suffered as a result of an action taken to mitigate an existing state of peril, is recoverable under a policy covering that peril.

Question 5

Agenoria Steamship v. Merchants’ Marine Insurance

Superintendent

Answer 5

• During a voyage, the vessel sustained damage
• Owners claimed for the cost of despatching a superintendent during repairs
• Insurers argued that the repairs could have been done in an equally efficient manner without the additional cost.
• The Court held that the owners were entitled to the cost of a surveyor, but that a local one would have sufficed in the circumstances.

Question 6

“The Makis”

2 GA’s

Answer 6

• Casualty 1: Whilst loading, the ship’s foremast broke off becoming damaged beyond repair. Repairs necessary for the safe prosecution of the voyage were carried out.
• Casualty 2: During continuation of voyage, the ship sustained damage to propeller blades, and put into a port of refuge.
• The owners sought GA contribution to all the expenditure incurred at the loading port and at the port of refuge.
• Casualty 1: Court held that owners could not recover for the expenditure incurred in the loading port, since they could not prove their claim under the lettered Rules.
• Casualty 2: Court held that for a GA act, it is not necessary to be actually in the grip of the disaster that may arise from a danger. It is sufficient to say that the ship must be in danger, or that the act must be done in order to preserve her from a real, substantial peril.

Question 7

Eurysthenes

Privity

Answer 7

• Whilst on a voyage the vessel grounded
• Cargo interests claimed against shipowners for their loss and shipowners sought indemnity from their P&I insurers.
• P&I Club argued that the ship had knowingly been sent to sea in an unseaworthy state
• The Court considered the meaning of the term ‘privity’ as per s.39(5) MIA
• Found that privity means ‘knowledge and consent’, and it is not necessarily the same as wilful misconduct
• And ‘knowledge’ includes knowing the truth and turning a blind eye, so as to not know it for certain, and would therefore be deemed to be privy to the unseaworthiness.

Question 8

Jackson v Mumford

Defect of material

Answer 8

• The court noted, obiter dicta, the phrase ‘defect in machinery’ means a defect of material, in respect of either its original or after-acquired composition.
• As a consequence, the view was held for many years the word ‘defect’ was limited to a ‘defect in material’ and that damage caused by a weakness or defect in design was not included within the term ‘latent defect’.

Question 9

Dimitrios N Rallias

Answer 9

• A latent defect = “A defect which could not be discovered by a person of competent skill and using ordinary care.” Not exhaustive or definitive.
• Considered whether those responsible for checking the vessel acted negligently
• And whether such negligence might affect the Court’s conclusion as to whether a defect was “latent” or not

Question 10

Brown v Nitrate Producers

Reasonable man

Answer 10

• In considering the definition of latent defect…
• Court held that a latent defect is latent not just to the eye but to all the senses
• The test to be carried out in order to identify such defect must be reasonable “such examination as a reasonably careful man skilled in that matter would make…”