Scottish Court of Session Decisions

The Horsley Line, Limited (owners of the s.s. “Dalmally”), in January 1907 chartered the s.s. “Dalmally” to Roechling Brothers.

The charter-party bore—“That the said steamship … shall, after discharging present cargo, with all convenient speed proceed to Middlesbrough and there load … a full and complete cargo … and being so loaded, shall with all convenient speed proceed to Savona or Genoa, as ordered on signing bills of lading, and there deliver the same to the order of the said freighters or their assigns …

“Steamer not to be responsible for any loss, damage, or delay to cargo, caused by strikes, lockouts, and / or combinations of officers, engineers, crew, dock labourers, stevedores, lightermen, or any other hands or agencies connected with the loading or discharging of the steamer …

The cargo to be supplied at the port of loading as fast as the steamer can stow same, and received at the port of discharge at the rate of 400 tons per weather working day (Sundays and holidays excepted) except in cases of riot, or any hands striking work, or accidents to machinery which may impede the ordinary loading and discharging of the steamer, The reckoning for loading

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to commence when the steamer is berthed at the respective wharves, and notice given that she is ready to receive cargo.

Time for discharging to commence on being reported at the Custom House.

Demurrage at the rate of £25 per running day to be paid by the freighters or consignees for any detention in the loading and delivery, as above…

Finally this charter in all its clauses to be binding on both parties notwithstanding any and every custom of the port of discharge to the contrary …”

In October 1907 the owners raised the present action against the charterers, in which they sued for a sum of £175 as demurrage.

The pursuers averred and the defenders answered, inter alia, as follows:—“(Cond. 4) The ‘Dalmally’ loaded a cargo of pig-iron at Middlesborough under the said charter-party, and arrived at Savona and anchored in the roads there at 840 a.m. on Tuesday 12th February. The roads at Savona are situated about half-a-mile from the Custom House, which is on the inner harbour, about 100 yards from the discharging wharves. They are within the port of Savona, or at all events they are the place where vessels lie when they are unable to obtain a berth in the harbour owing to the harbour being full. According to the custom of the port, vessels on arrival in the roads are reported at the Custom House and are allotted berths in the harbour according to the order of reporting. The ‘Dalmally’ was duly reported at the Custom House at 3 o'clock on the afternoon of 12th February, but was unable to get a berth as the harbour was full. The master also gave notice of her arrival to the defenders' agent there, who acknowledged receipt thereof. The ‘Dalmally’ lay in the roads until 3.25 p.m. on Saturday, 16th February, when she was taken inside the harbour and moored stern on to the breakwater. She was placed in a berth at the quay on Tuesday, 19th February, at 10 a.m. (Ans. 4) Denied. The'Dalmally’ did not arrive in Savona till 16th February 1907, and she had not arrived where her cargo could be delivered till the evening of 19th February, and time did not begin to count under the charter till 20th February 1907. Admitted that prior to 16th February the master had given notice of arrival and readiness to deliver cargo, but at the time of this notice the vessel was not arrived and in a position to deliver her cargo under the charter, and until she had so arrived and or was in a position to deliver cargo, time could in no case begin to count. The roads where the ‘Dalmally’ anchored on 12th February are not within the port of Savona. (Cond. 5) The cargo, which weighed 2850 tons, was received by the defenders, whose agent, M. Bandini, acknowledged the several notices given by the captain. The defenders did not actually commence unloading until 19th February, and did not finish until 7.30 p.m. on 27th February. On account of bad weather, Wednesday, the 13th February was not a weather working day. (Ans. 5.) Admitted that the discharge was completed on 27th February, also that Wednesday was not a weather working day and does not count under the charter, and that the quantity of cargo was 2850 tons. Quoad ultra denied. Explained that the discharge commenced on 20th February. (Cond. 6) The time allowed by the charter-party, at the rate of 400 tons per day for 2850 tons, was 7 1 8 days or 7 days 3 hours. Reckoning from 3 p.m. on Tuesday, 12th February, when the ‘Dalmally’ was reported at the Custom House at Savona, and not counting Wednesday, the 13th, on account of the state of the weather, this time expired on Thursday, 21st February, at 6 p.m. From that time till 7·30 p.m. on 27th February, when the discharge was completed, the ‘Dalmally’ was on demurrage. She was therefore on demurrage for seven days. The demurrage at the rate of £25 per day is thus £175, being the sum now sued for. Denied that defenders were prevented by a combination of stevedores equivalent to a strike. In November. 1906 the presidents of the two co-operative societies of labour of the port of Savona published a declaration that from said month of November, until further notice, steamers were not to be discharged when moored end on to the quay. This declaration, which has been regularly acted upon since its date, was known to the defenders before entering into this charter-party. (Ans. 6) Denied. The defenders are entitled by the charter-party to complete days, and in no case can time be reckoned as pursuers propose. Explained that, assuming pursuers are entitled to say the vessel had arrived and that lay days had thus begun to run prior to 17th February, in respect that until the 20th February the defenders were prevented by a combination of the stevedores (being a strike within the provisions of the charter) from discharging the vessel, the defenders are entitled to have these days deducted in counting lay time.”

The pursuers pleaded, inter alia—“(2) On a sound construction of the charter-party the lay days commenced to count on 12th February, when the vessel was reported at the Custom House. (3) The sum sued for being due by the defenders to the pursuers as demurrage under the charter-party condescended on, decree should be pronounced as craved.”

The defenders pleaded, inter alia—“(1) The pursuers' averments are irrelevant and insufficient to support the conclusions of the summons. (3) The defenders fall to be assoilzied in respect that the ship, after being an arrived ship, was discharged within the lay days stipulated in the charter-party. (4) Upon a sound construction of the charter-party the lay days do not commence to count until the ship has arrived at a usual and recognised place of discharge in the port of destination. (5) Upon a sound construction of the charter-party the unit by which the time falls to be computed is a day. (6) Separatim, any delay in the discharge over and above the lay days having been occasioned by strikes or combinations of stevedores, the defenders fall to be assoilzied

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in respect of the exemption of their liability for these causes of delay in the charter-party.”

The following joint minute of admissions was made by the parties—“1. That the s.s. ‘Dalmally anchored in the roads at Savona at 8·40 a.m. on Tuesday, 12th February 1907. 2. That the s.s. ‘Dalmally’ was reported at the Custom House at Savona at 3 o'clock on the afternoon of 12th February 1907, and the same day was reported to the defenders' agents at Savona as having arrived in the roads. 3. That the roads at Savona where the s.s. ‘Dalmally’ was anchored is an ordinary place of anchorage for vessels to lie while unable owing to the harbour being full to get into same and preparatory to their entering the harbour of Savona, where alone discharging and unloading is effected. 4. That the roads at Savona are outside of the geographical limits of the port of Savona and of what is known commercially speaking as such port. 5. That it is not the custom at Savona to discharge cargo from vessels lying in the roads. 6. That the s.s. ‘Dalmally’ lay in the roads until 3.25 p.m. on Saturday, 16th February 1907, when she entered the harbour of Savona and moored stern on to a quay at a discharging berth in the inner harbour, and that it could not be moored in any other way. 7. That in November 1906 the presidents of the two co-operative societies of labour at the port of Savona published a declaration that from said month of November until further notice steamers were not to be discharged while moored end-on to the quay in said inner harbour. 8. That this declaration, which has been regularly acted upon since its date, was published in the Italian newspapers, and wide publicity was given to same. 9. That the s.s. ‘Dalmally’ did not discharge any of her cargo while she moored end-on to the quay as aforesaid.”

On 21st February 1908 the Lord Ordinary repelled the first and sixth pleas-in-law for the defenders, and allowed the parties a proof of their averments.

Opinion.—“In this action the pursuers, who are the owners of the s.s. ‘Dalmally,’ seek to recover from the defenders five days' demurrage. Various questions are raised which mainly depend on a construction of the charter-party entered into between the pursuers and defenders, but there are also some facts in dispute, and although the parties have put in a joint minute of admissions they have failed to come to an agreement as to what appears to me to be a vital part of the pursuers' case. The defenders, however, maintain that they have sufficient admissions from the pursuers to justify the action being dismissed as irrelevant, and I shall accordingly deal with the argument on this head.

The ‘Dalmally’ was chartered on 14th January 1907 to load a cargo of pig-iron of about 2900 tons at Middlesborough, and to proceed to Savona and there deliver the same. The charter-party provided ‘that the cargo should be received at the port of discharge at the rate 400 tons per weather working day, except in cases of riot or any hands striking work, or accidents to machinery which might impede the ordinary loading and discharging of the steamer.… Time for discharging to commence on being reported at the Custom House.’ The facts admitted by the parties are as follows:—The ‘Dalmally’ anchored in the roads at Savona at 8·40 on Tuesday, 12th February 1907. She was reported at the Custom House at Savona at three o'clock on the afternoon of that day. The place where she anchored is an ordinary place of anchorage for vessels unable to get into the harbour, in which alone discharging is effected, but is outside the limits of the port. The pursuers further aver that according to the custom of the port, vessels on arrival in the roads at Savona are reported at the Custom House, and are allotted berths in the harbour according to the order of reporting. (1) The first question in the case is, Are these facts relevant to infer that the lay-days under the charter-party in question commenced to run from three o'clock on the afternoon of 12th February? In my opinion they are.

Practically the only argument submitted for the defenders was that the ‘Dalmally’ was not an arrived ship when she lay in the roads outside Savona, and they figured the case of a vessel being reported at the Custom House when she was still a long way from the port. I do not suppose such a thing would be commercially possible, but if it were I should of course not consider that the lay-days could possibly commence from the time of such reporting. The case is, however, quite different if it is the recognised custom of the port that vessels on arrival are reported at the Custom House, and are allotted berths according to the order of reporting, for I should then assume that the parties had this custom in view when they agreed on the terms of the charter-party. It may be noted that the defenders carry on business in Italy as well as in Glasgow; and shipowners, of course, make it their business to ascertain the customs of the ports to which they send their vessels. On this assumption, therefore, I think it is not a just implication that the running of the lay-days should be suspended until the vessel actually got into the harbour. I asked the defenders' counsel if the vessel was to report a second time at the Custom House after she had got into the harbour, and if there was any provision for such a report being received. I could get no satisfactory answer to either of these questions; but it appears to me that whatever assumption is made on these points the terms of the charter-party would be directly contradicted if the defenders' interpretation were adopted; for you would require to substitute for the quite unequivocal language used a clause such as this—‘The time of discharging to commence after vessel has arrived in the harbour and has been reported at the Custom House.’ I see no warrant for this. I recognise, of course, that if the contract does not state from what point of time the lay days shall commence to run, they will not run until the

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ship has arrived in the port, and may not run until she is actually in a discharging berth, or at all events until such a berth is available. But there is nothing to prevent parties agreeing that the risk of the vessel's detention through the harbour being full shall be thrown on the charterer, and this—if the pursuers prove their averments—is what I think the parties truly intended.

None of the reported cases seem to me to have any bearing on this question; but I note those to which I was referred— Jackson, 1838, 5 Bing, N.C. 71; ‘ The Machrihanish,’ Shipping Gazette, 4th April 1906; ‘ The Katy,’ P. 1895, p. 56; and La Cour, 1 R. 912.

(2) If I am right in this, it follows that the lay days commenced to run at 3 p.m. on 12th February and must be reckoned as periods of twenty-four hours. The obligation of the defenders was to take delivery at the rate of 400 tons per day. The cargo consisted of 2850 tons; and the defenders claim that they were entitled to eight weather working days for unloading it, as it exceeded by fifty tons what they were bound to take out in the seven days. The only Scotch case cited by the defenders was that of Christie, 1896, 3 S.L.T. 284; but it has only a superficial resemblance. On the other hand I was favoured with a citation of two decisions in England—one supporting the pursuers' contention ( Yeoman, 1904, 2 K.B. 429), and the other ( Houlder, 1905, 2 K.B. 267), which quite as clearly supports the defenders. The latter was the decision of a single judge, Channell, J., but was subsequent in date to the decision of the Court of Appeal in Yeoman's case, which it professed to distinguish. It was held by Channell, J., that if a fraction of a day is required for the completion of the discharge the charterer is entitled to the whole of that day.

The clause here under construction is practically identical with that in Houlder's case. No reasons, however, are given for the judgment except that there is a general rule that for purposes of demurrage fractions of a day are not to be taken into consideration. That, however, must always yield to the intention of parties as deduced from the words used; and I am unable to see how a provision that a vessel shall be discharged ‘at the rate of 400 tons per weather working day’ is satisfied by the charterer receiving the cargo at the rate of 362 1 2 tons. In Yeoman's case there were no doubt words which are not here, for demurrage was to be paid at 4d. per net register ton per day ‘and pro rata;’ whereas here the corresponding clause is ‘demurrage at the rate of £25 per running day.’ So far as I can judge, however, the majority of the Court of Appeal would have reached the same result on the language of the clause with regard to the average rate of discharge alone. I agree with Romer, L. J., when he says—‘I do not see why because the average rate mentioned does not work out to an exact number of days it should therefore follow that it does not apply to a portion of a day.’ I think it also obvious that if the day is interrupted by bad weather—say, for three hours—the charterer would be entitled to the benefit of these three hours on the succeeding day; and the same with strikes or riots which interfered with the discharge of the vessel for less than a day. On the other view—that only whole days can be taken account of—either the charterer would fall to be debited with a whole lay day if discharging took place during any part of it, although it had to be stopped through an excepted cause; or the charterer might take up the position that no day on which there was an interruption could be reckoned as a lay day. In short, in my opinion, the only way in which a commercial contract like this can be expiscated is on the assumption of the parties having had in view lay days consisting of twenty-four consecutive hours, which would fall to be extended in proportion to the number of hours that the vessel's discharge was interrupted through the excepted causes.

(3) The third question relates to the construction of the clause, ‘except in case of riot or any hands striking work which might impede the ordinary discharging of the steamer.’ The ‘Dalmally’ was taken into the harbour of Savona at 3·25 on Saturday, 16th February, and was moored stern-on to a quay at a discharging berth—there being no discharging berth available for her. She lay in this position without discharging any cargo until Tuesday, 19th February, at 10 a.m., or—according to the defenders—till the morning of 20th February. The defenders claim to deduct this period from the 16th to the 20th in respect that until then they were prevented by a combination of stevedores from discharging the vessel. The facts upon which I am asked to decide this question are narrated in articles 7 and 8 of the joint minute of admissions, and come to this, that the presidents of the two co-operative societies of labour at Savona published a declaration in November 1906 that from that time steamers were not to be discharged while moored end-on to the quay in said harbour; and that this declaration, which has since been regularly acted upon, received wide publicity. The charter-party, however, was entered into on 14th January 1907, and I think it is impossible to hold that this declaration, which merely settled the custom of the port as to discharging of steamers for the future, can be held to come under the clause dealing with riots or hands striking work. I was referred to the case of Richardson, 1898, 1 Q.B. 261, where it was said that the exception as to strikes and lockouts applies generally to labour disputes. I daresay it does; but so far as this discharge is concerned I see no evidence that there was any dispute—certainly none of any dispute arising with reference to the discharge of the ‘Dalmally.’ In fact I should not wonder if the declaration of the labour presidents had been published at the suggestion of the receivers of cargo, for it is they alone who have an interest in reducing the expense of discharge.

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(4) The last question relates to a period of one and a-half hours on the 27th of February, for which the pursuers claim a whole day's demurrage. Assuming their calculations to be correct, the lay days expired on Thursday, 21st February, at 6 p.m., but the ‘Dalmally’ was not completely unloaded before 7.30 on the 27th. I should have been very glad if I could have given effect to the defenders' contention on this head, but I consider myself foreclosed by the decision in Hough v. Athya, 6 R. 961, by the First Division, approving of the decision of the English Courts in Commercial Steamship Company v. Boulton, L.R., 10 Q.B. 346, where it was held that in the case of demurrage a fraction of a day counts as a day. I do not think that the reasons assigned by the learned judges for the rule which they laid down at all accord with the more modern practice under which demurrage in the case of large steamers is generally reckoned by the hour. On the other hand, parties who still contract on the footing that the only unit which they provide for calculating demurrage is a day cannot complain if they be held to have so contracted in view of the rule laid down more than thirty years ago. In the case of the Branckelow s.s. Company, 1897, 1 Q.B. 570, Lord Russell of Killowen introduced a kind of rough and ready method of calculating weather working days when there had been an interruption from bad weather, and held that where substantial work was done, though not amounting to half a day, the charterers were to be charged with half a day; and where substantially a full day's work—though not amounting to twelve hours—was done, the charterers were to be charged a full day. I confess I see no merit in this except the simplicity of the arithmetic, and it has this disadvantage that the charterer is in both cases overcharged. It would seem much simpler as well as more equitable, to take the actual hours during which discharging was stopped by bad weather. But for the purposes of the present question Lord Russell's decision is also an authority for the proposition that after the loading days are exhausted every part of a day counts as a whole day's demurrage.

As already indicated, parties on more than one point are at serious variance as to the facts, and all therefore that I can do at present is to repel the defenders' first and sixth pleas-in-law and allow parties a proof of their averments.”

The defenders reclaimed, and argued—(1) The lay days could not commence to run until the vessel had got in to the port of Savona. This was plain, firstly, from the terms of the charter-party, the fundamental clause of which was that the vessel should “proceed to Savona and there deliver her cargo.” Accordingly until she had arrived at Savona, she was under no obligation to deliver, and it was admitted by both parties that the “roads” were not Savona. Secondly, the same result was arrived at by applying the well-known rules of law which applied to charter-parties. One of these, to which there was no exception, was that before the commencement of the lay days the ship must have arrived at her destination, and so be within the designation of an “arrived” ship— Leonis Steamship Company, Limited v. Rank Limited, [1908] 1 KB 499, L.J. Kennedy at 517; cf. La Cour, &c. v. Donaldson & Son, May 22, 1874, 1 R. 912, 11 S.L.R. 524. Here it was impossible to say that the ship was an “arrived” ship while she was still in the roads, where it was not suggested she could possibly discharge her cargo, and from which she might at any moment have to put to sea again through stress of weather. It was obvious that the clause upon which the pursuers mainly relied—“time for discharging to commence on being reported at Custom House”—must be read as qualified by the condition that the vessel had arrived. The time of her arrival was therefore 3.25 p.m. on 16th February, when she entered the harbour, and that was the earliest point of time at which, on any view, lay days could begin to run. In “ The Machrihanish” (Shipping Gazette, 4th April 1906), founded on by the pursuers, there was an express contract as to the time at which the ship was to be held to have arrived. (2) The defenders were entitled to eight complete lay days in which to receive the cargo, as it exceeded by fifty tons what they were bound to take out in the seven days, the rule being that days meant calendar days from midnight to midnight, and not periods of 24 hours—“ The Katy” [1895], P. 56—and that fractions of a day counted as whole days— Houlder v. Weir, [1905] 2 KB 267; Hough and Others v. Athya & Son, May 27, 1879, 6 R. 961, 16 S.L.R. 553. The only apparent authority to the contrary was Yeoman v. The King, [1904] 2 KB 429, which was distinguishable in that the parties there made it clear in their contract that the calculation was to be made by hours. (3) Lastly, the time for discharging did not begin to run until the vessel was properly berthed alongside the quay. Until then, and while lying end-on to the quay, the operation of unloading was prevented by “hands striking work, a delay for which, under the charter-party, the defenders were not responsible.

Argued for the pursuers (respondents)—The doctrine of the “arrived” ship had no place in a case like the present, where the parties had definitely fixed for themselves the time at which discharging was to begin, viz., “on being reported at the Custom House.” In fact the object of parties was to avoid the difficulties which had often arisen as to whether a ship had arrived or not, by fixing a definite punctum temporis from which the lay days were to run. They were prepared to prove that the roads at Savona were the customary and necessary place from which to report. There was no inherent difficulty in marking the lay days run from a period anterior to arrival in port, such a thing having often been done before. “ The Machrihanish,” Shipping Gazette, 4th April 1896; Jackson and Another v. Galloway, 5 Bingham, N.C. 71. (2) The defenders were only entitled to seven days and a fraction of a day, and not

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to eight days, as lay days in which to unload the cargo, days meaning periods of 24 hours, and not calendar days from midnight to midnight. The present case was ruled by Yeoman v. The King, cit. sup., from which it was indistinguishable— Hough v. Athya & Son, cit. sup., and Commercial Steamship Company v. Boulton, L. R. 10 Q. B. 346, were cases dealing with demurrage to which a different rule was applicable, and “ The Katy,” cit. sup., and Houlder v. Weir, cit. sup., were distinguishable, because in them there was no definite time fixed for the commencement of the discharge. (3) The lay days continued to run throughout the period during which the vessel lay end-on to the quay, the fact that she was not unloaded during that time being due to a custom of the port which must have been known to the parties when they entered into their contract, and which at anyrate could not be described as a “case of riot” or “hands striking work”— Stephens v. Harris, 1887, 57 L.T. 618. (4) The ship had been on demurrage for six days and a fraction. The pursuers were accordingly entitled to payment for seven days, the rule being settled that in calculating demurrage fractions of days counted as whole days— Commercial Steamship Company v. Boulton, cit. sup.; Hough v. Athya & Son, cit. sup. The fact that a different rule was applied in calculating lay days and demurrage was explained by the fact that the latter was of the nature of a penalty or fine, and was therefore calculated in the way most unfavourable to the offender.

At advising—