Italian State Railways v Mavrogordatos and Anor

[1919] 2 K.B. 305
[1917 I. 139.]

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(Decision by: Duke LJ)

Between: Italian State Railways
And: Mavrogordatos and Anor

Court:

Judges: Bankes LJ

Duke LJA.T. Lawrence J

Subject References:
SHIP
CHARTERPARTY
Hire payable in Advance
Default in Payment
Withdrawal of Ship
Redelivery
Apportionment of Freight

Hearing date: 19 March 1919
Judgment date: 20 March 1919

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Decision by:
Duke LJ

I agree. This case raises a novel question as to the liability for hire between January 11, 1917, the date of the notice given by the agents of the shipowner to the charterers, and January 23, when the ship reached Barry and the master began again to take orders as to the disposition of the ship from the owner. The owner claims that he is entitled to freight during that period by the express terms of the charterparty, and particularly by that clause which provides for hire at the rate of 28s. per ton on the steamer's dead weight per month

"commencing on the day of her delivery as aforesaid .... to continue from the time specified .... until her redelivery within the time mentioned above .... at a port in West Italy or in the United Kingdom at charterers' option."

I agree with Bankes L.J. that "redelivery" here means restoration of the power of disposal to the owner. There had never been a demise of this ship; she remained from first to last in the possession of the owner. "Delivery" and "redelivery" in this clause relate to the same thing, the power of disposition of the ship. When the power of disposition is restored to the owner there is a redelivery within the meaning of the clause. The owner says there was no such restoration until the ship was notionally handed over to him at Barry and came within his reach there. That contention ignores the effect of the notice of January 11, by which the owner declared that the charterparty was cancelled. That put an end to the charterers' right to issue orders to the master. It was a resumption by the owner of the right to dispose of the ship's services, and after that resumption of control any further obligation upon the charterers to surrender control was at an end.

Then it was said that the owner, if not entitled to freight under that clause, is entitled to damages to an equal amount for the charterers' breach of contract, the breach being the failure of the charterers to pay punctually the hire due on January 10, that this breach occurred while the ship was beyond the reach of the owner so that he could not resume effective control of her, and that therefore he is entitled as damages to an amount equal to hire for the period from January 11 to January 23 when he got possession of his ship at Barry. That argument is fallacious. The non-payment of the hire was not the cause of loss, if any, incurred by the owner through not getting possession of his ship till January 23. The real cause was his own act in withdrawing his ship of his own volition on January 11 when he was well able to make an advantageous choice between leaving control to the charterers and assuming it himself. Having done that act, presumably with a just view of his own interest, he cannot rely upon it as giving him a right to damages.

Mr. Wright contended that by the terms of the charterparty the withdrawal of the ship was without prejudice to any claim of the owner against the charterers, and that on January 10 there was a complete cause of action for a month's hire under the charterparty, of which the charterers could only avoid payment in full upon grounds of commercial fairness or equity. But he elected, no doubt on good grounds, not to challenge the decision of Channell J. in Wehner v. Dene Steam Shipping Co. ^[F3] that in a case like this where the owner has resumed control of the ship before the month has expired, he can only claim an apportioned part of the month's hire. Once that is admitted the claim for a full month's hire, tempered or modified though it be on grounds of fairness or equity, falls to the ground.

On these grounds the judgment of Sankey J. must be affirmed.