Scottish Court of Session Decisions

James Westoll, owner of the s.s. “Gladys Royle,” of Sunderland, pursuer, brought an action against W. N. Lindsay, grain merchant, Leith, defender, for £400 in name of demurrage.

The facts of the case appear from the opinion of the Lord Ordinary ( Dewar).

On 17th December 1914 the Lord Ordinary assoilzied the defender from the conclusions of the summons.

Opinion.—“The question in this case is whether a claim for demurrage is precluded by the clause of exemption in a charter-party, where a vessel was unable to obtain access to a discharging berth, and the unloading was consequently delayed, by congestion in the docks following on a strike of dock labourers at Leith. Some evidence has been led, but the facts are really not in dispute. They are contained in a joint minute of admission and are briefly as follows:—In the summer of 1913 there was a prolonged strike of dock labourers at Leith. It began on 26th June, and did not end until 18th August. When it terminated the docks were crowded with vessels awaiting their turn to discharge. The pursuer's vessel, the ‘Gladys Royle,’ arrived on the 25th August. She carried a consignment of grain for the defender, who was the holder of a bill of lading (which incorporates the charter-party by reference) for part of the cargo, and who for the purposes of this action represents certain other consignees. Although the strike had terminated seven days before the ‘Gladys Royle’ arrived, the docks were still so congested that she was unable to reach a discharging berth before 6th September. Discharging commenced on Monday, 8th September and was concluded on 18th September.

By the terms of the contract twenty-one running days were allowed for loading and unloading, and ten days on demurrage, over and above the lay-days, at the rate of £40 per day. Owing to the congestion in the docks, the vessel was not in fact discharged until ten days after the lay-days had expired. The pursuer accordingly claims £400 in respect of this delay. The defence is that the claim is excluded by clause 13 of the charter-party, which is in the following terms, viz.—‘If the cargo cannot be (loaded or) discharged by reason of a strike or lock-out of any class of workmen essential to the loading or discharge of the cargo, the days shall not count during the continuance of such strike or lock-out. A strike of the receiver's men only shall not exonerate him from any demurrage for which he may be liable under this charter if by the use of reasonable diligence he could have obtained other suitable labour, and in case of any delay by reason of the before-mentioned causes no claim for damages shall be made by the receivers of the cargo, the owners of the ship, or by any other party under this charter.’

No question arises under the first part of this clause. It is agreed that the delay did not arise ‘during the continuance of the strike.’ But the defender maintains that he is protected by the last portion of the clause. This action, he says, is really a claim for damages for delay by reason of the strike, and that such a claim is excluded. And I was referred to the Leonis Steamship Company, Limited v. Rank, Limited (1908), 13 Commercial Cases, 161 and 295, and The Moor Line, Limited v. Distillers Company, Limited, 1912 S.C. 514, 49 S.L.R. 407.

The pursuer on the other hand argued that clause 13 would not bear the construction which the defender seeks to put upon it. In the first place he contended that this was not a claim for damages but for ‘demurrage,’ that is to say, an agreed payment for the hire of the vessel beyond the period of the lay-days. He admitted, however, that this construction of the word demurrage had been negatived in the Moor Line case, and that I am bound to follow that decision. But assuming that a claim for ‘demurrage’ is covered by the words ‘claim for damages’ in the clause quoted, the pursuer's counsel went on to argue that the clause excepted only cases of delay occurring during the continuance of the strike. This contention, he said, had not been put forward in the case of the Moor Line, and in any event the present case was differentiated from that of the Moor Line in respect that the “Zurichmoor” had arrived at the port of discharge during the

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existence of the strike, whereas the “Gladys Royle” arrived several days after the strike was over. He further contended that the clause did not cover detention due to failure merely to get a berth, which was the sole cause of delay in this case. In this respect also the case of the Moor Line was different, because in it the detention was due to failure to get men and equipment for the purpose of discharge. These two elements had been distinguished in a decision by the Court of Appeal in England in the case of Marwood v. The Central Argentine Railway Company, Limited, 1915 A. C. 981, where failure to get a berth owing to congestion resulting from a strike was held not to fall within a similar clause of exception.

With regard to the Leonis case, the exemption clause specially provided for the case of ‘Obstruction on the railways or in the docks or other places beyond the control of the charterers,’ and accordingly it was not a decision which could be founded on in a case where the exception clause contained no such provision.

I am of opinion that the defender's contention is well founded. I think the Moor Line case is directly in point. The two cases appear to me to be indistinguishable. In both the delay had been caused by congestion following on a strike of dock labourers at Leith, and the terms of the exemption clause, upon the construction of which the decision depends, are identical. It is true that in the Moor Line case the vessel arrived while the strike was still in progress, but that does not appear to have been regarded as a matter of importance either in the pleadings or the judgment. The case the defender presented was that the vessel was detained, not owing to the continuance of the strike, but owing to congestion following on the termination of the strike. And it was held that the detention due to this congestion was ‘delay by reason of’ a strike, which excluded claims for damages, and that claims for damages for delay included claims for demurrage. That appears to me to cover the dispute in this case. And so far as I can judge from the report the argument presented in both cases was very much alike.

The case of Marwood v. The Central Argentine Railway Company, Limited, has recently been decided in the Court of Appeal, and I was furnished with a copy of the opinions delivered, and referred to certain passages in them which appear to support the pursuer's contention. But the facts upon which the opinions are based are not disclosed, and without a narrative of the facts it is very difficult to understand the case, and the terms of the exemption clause are very different from those used here. I have not therefore been able to derive much assistance from that case. And in any event the Moor Line case is, as I have said, directly in point, and it is an authority which I am bound to follow. I accordingly assoilzie the defender from the conclusions of the summons, with expenses.”

The pursuer, reclaiming, argued—The charter-party only excluded claims for damages. A claim for demurrage was a claim for a sum payable ex contractu, while damages were only due when there was a breach of contract— Gardiner v. Macfarlane, M'Crindell, & Company, 1889, 16 R. 658, per Lord Trayner at p. 660, 26 S.L.R. 492; Owners of the “Laristan” v. Wender&Company, Shipping and Mercantile Gazette, November 17, 1914; Nielsen & Company v. Wait, James, & Company, (1885) 16 Q.B.D. 67; Dunlop & Sons v. Balfour, Williamson, & Company, [1892] 1 QB 507, per Atkin, J. Moor Line, Limited v. Distillers Company, Limited, 1912 S.C. 514, 49 S.L.R. 407, was distinguished, for there the cause of delay was failure to obtain labour, but in any event it was inconsistent with the Owners of the “Marwood” v. Central Argentine Railway Company, 1915, A. C. 981; consequently the reclaimer's claim was not excluded. (2) But assuming that a claim for demurrage was covered by damages, clause 13 of the charter-party would not protect the respondent, for the cause of delay was failure to get a berth. The “Gladys Royle” was ready to unload some days after the strike had ended, consequently the days, i.e., the lay, demurrage, and following days, began to run as from that date, for clause 13 only suspended the running of the days during a strike. Further, there was no strike of any class of workmen essential to the loading or discharge of the cargo of the “Gladys Royle;” when she was ready to unload these workmen were working. The failure to get a berth was, no doubt, a consequence of the strike, but it was not one of the causes referred to in clause 13. To apply clause 13 to the after effects of a strike was quite unreasonable, and such a construction was negatived in the case of the “ Marwood” ( cit.), per Lord Parker at p. 985, per Lord Sumner at p. 989, and Lord Parmoor at p. 991, which showed that such a clause covered only the direct results of the strike not its after effects. The Leonis Steamship Company, Limited v. Joseph Rank, Limited, No. 2, 1908, 13 Com. Cas. 161 and 295, was not in point, for the strike clause was in different terms and covered what actually took place, i.e., a railway strike followed by congestion in the dock. In the Moor Line case the decision turned upon a strike clause suspending the running of the “days for discharging,” i.e., the lay-days and not demurrage days, and was not a decision to the effect that the after consequences of a strike were “by reason” of the strike; if it did so decide, then the decision was in contradiction of the case of the “ Marwood” ( cit.), which decided that the after consequences of a strike were not covered by such a clause as the present.

Argued for the respondent—The Lord Ordinary was right. Clause 13 must be construed from the business man's point of view, and in such a light it obviously was intended to cover causes of delay for which neither party was responsible. So regarded it fell into three divisions—(1) the first sentence referred to the days of loading or discharge,

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or, as suggested by Lord Johnston the days of delay caused by a strike—these days were not to run during the continuance of a strike; (2) next, the effect of a particular kind of strike upon the demurrage days was dealt with; and (3) lastly, the effect of a strike of the kind contemplated in the first and second divisions was applied to the days after the lay and demurrage days. Here the only requisite to bring the clause into operation was that the delay should be by reason of the strikes referred to; there was no limitation of this division to the continuance of the strike. A claim of damages did cover a claim for demurrage— The Moor Line case ( cit.); Scrutton on Charter-Parties, 7th ed. p. 143, and note ( n.). The case of Gardiner ( cit.) was distinguished, for there the question was, did a claim for demurrage include a claim for damages? The cases of the Leonis ( cit.) and the Moor Line( cit.) were exactly in point, for there the words “by reason of” were held to include such after effects as in this case. The case of the “ Marwood” was consistent with the Moor Line case ( cit.), and was distinguished from the present case, for there the question was whether the words “such time” referred to the continuance of the strike (which was not referred to in the contract) or to the period of actual delay, and they were held to refer to the latter.

At advising—