Carisbrooke Shp v. Bird Port
Richard Waller (instructed by Clyde & Co) for the claimant shipowners
Stewart Buckingham (instructed by Ince & Co) for the defendant port owners/operators
DAMAGE TO SHIP BY CONTACT WITH SUBMERGED OBJECT IN BERTH: NEGLIGENCE: DUTY OF CARE: REQUIREMENTS TO DISCHARGE DUTY OF CARE: QUANTIFICATION OF DAMAGES: LOSS OF FREIGHT: SUPERINTENDENT’S COSTS: "AGENCY" FEE OF 1% OF QUANTUM
The standard of the duty of care owed by NAABSA ("Not Always Afloat But Safe Aground") berth operators to berth users requires a regular and thorough inspection and dredging regime. The system should not be dictated by when operational requirements permitted inspection and dredging to take place, but by the need of berth users to be confident that taking the ground will not cause damage to their vessel due to the presence of dangerous objects in the berth’s silt or mud deposits.
The wages of a ships’ superintendent cannot be recovered as a head of damage, as the wages of a superintendent would still be payable in any event. However, if additional expenditure is incurred, such as appointing additional staff, travel expenses and overtime, it is recoverable as "expenditure loss". If the superintendent is diverted from his usual duties, the wages of the superintendent for that period may be recoverable as an approximation of the "revenue loss" caused to the shipowner by the diversion of the superintendent from his usual revenue-generating activities.
As damage to a vessel by a submerged object is analogous to a collision, shipowners may follow the Admiralty collision practice of adding 1 per cent to the proven claim to reflect the business disruption and expenditure of management time caused by the incident, provided it would not achieve an unreasonable result and it would otherwise be disproportionate to prove the actual cost, in terms of further cost and disruption.
DMC Category Rating: Confirmed
This case note was prepared by Jim Leighton, BSc (Hons) (University of Plymouth), LLM (Maritime Law) (University of Southampton), a Claims Consultant
The claimant shipowner alleged that its vessel had been damaged by a steel coil that had been negligently left at the bottom of the berth at Bird Port, Newport, by the defendant port’s servants and agents in breach of the duty of care owed by the port to its users. As a result, the shipowner had incurred a number of losses, including the loss of freight/hire due to the damage to the vessel, superintendency costs and disruption to business and expenditure of other management time in dealing with the incident.
The matters in issue were:
If the cause of the damage was proven on the facts:
Duty and Standard of Care
The duty upon the defendant required a regular system of dredging and inspection. It was not a proper discharge of that duty for the defendant to dredge only when operational requirements permitted. Such a practice meant that the busier the berth was, the less dredging would be done. This would plainly be an inadequate system in circumstances where the depth of mud or silt in the berth might be as much as 1.7m, so that dangerous objects could be hidden in the sediment.
The defendant’s expert’s report indicated that there was a need to dredge on a regular basis in order to ensure that there were no substantial obstructions on the bottom. Indeed this was so important that it should interrupt the commercial operation of the berth. The submission of the defendant, that it was unreasonable to expect the berth to be cleaned out more than once or perhaps twice a year, was rejected. The expert’s report indicated that the berth ought to be cleaned out every two or three weeks.
Safe operation of the berth required that the defendant and users of the berth could be confident that the sediment in the berth did not hide an obstruction capable of damaging a vessel using the berth. This could only be achieved by a daily system of careful inspection and regular dredging. This daily system of inspection had to be thorough. An inspection merely from the dockside could not be enough, as it could not ensure that objects in the mud were discovered. A system involving the use of a small boat to make a physical or sonar probe of the mud or of a cage attached to the crane, enabling two people to probe the mud, would have been thorough and effective.
In The Gudrun Maersk, an extra amount was allowed for the employed superintendent, as he performed a very large amount of work outside his normal duties, though Langton J expressly said that he could not lay down a general principle. The judge here was also unsure that any general principle could be extracted from The Gudrun Maersk.
In Admiral v Para-Protect the question of recovering damages for work done by an employee was considered in some detail. Stanley Burnton J held that it could be recovered where it was an expenditure which would not otherwise have been incurred, for example, where additional staff were employed or overtime was paid. He further held that it could be recovered where revenue had been lost as a result of the employee being unavailable to carry out revenue producing work. As it might be difficult to quantify any loss of revenue, the cost of the employee time might be taken as an approximation for the loss of revenue. But Stanley Burnton J held that claims for work done irrespective of any expenditure loss or loss of revenue were not recoverable in respect of salaries paid to the claimants’ employees during the period when they carried out work made necessary by the defendants’ tort, if those salaries would have been paid in any event.
On this basis, the judge held that the sums for meals and subsistence and for travel expenses were recoverable as expenditure loss. However, the sum claimed for the superintendent’s time could not be claimed as expenditure loss, because his wages as an employee would have been paid in any event.
On the facts, the superintendent involved in the incident was not usually involved with the Charlotte C. This incident took the superintendent away from his usual work. The work of the superintendent was likely to be of benefit to the claimant, so that the claimant lost that benefit while the superintendent was engaged elsewhere. However, it would probably be very difficult to identify the revenue which a superintendent would earn for his employer by his work as superintendent. This case seemed, therefore, to be one of those foreshadowed by Admiral v Para-Protect; accordingly, the judge allowed the claimed sum in respect of the superintendent’s services.
The judge considered that it was not possible to distinguish a case of contact with a submerged object with that of a collision, where the Admiralty practice referred to by Clarke J had been applied. As a matter of principle the cost of management time spent on dealing with the consequences of a collision could be recovered under the head of expenditure loss or revenue loss. The judge also did not consider that management time would be properly recoverable as such unless it was expenditure or revenue loss, despite Forbes J stating that it was a recoverable head of loss in Tate and Lyle Distribution v. GLC  1 WLR 149.
In this case it was obvious that the shipowner’s managers had expended time in dealing with the consequences of the Bird Port incident. It was more likely than not that, had the accident not occurred, the managers would have focused upon revenue generating activities. In general principle, the claimant must prove its loss, by adducing evidence of the loss. In this case no such evidence was adduced. It was, therefore, arguable as a matter of principle that the claimant’s claim should fail due to its failure to prove the quantum of the loss.
Instead of proving the loss, the shipowner sought to rely upon the Admiralty practice in collisions. As Clarke J had pointed out in The Kumanovo, the exercise of proving the actual loss would be likely to involve further cost and disruption. In the present case, where the sum was £1,565, there was undoubted force in that observation. The practice was also consistent with the principle of proportionality, which is now a feature of modern day court practice. It was more likely than not that the diversion caused to the shipowner’s managers by the incident was time that would otherwise have been used in profit generating activities. Even though it might be possible to record management time which was lost, it was probably difficult to prove how much profit was lost by that diversion. So long as there was no risk of the practice producing an unjust result, it seemed appropriate to adopt it as an approximation of the revenue loss caused by the disruption to the shipowner’s business arising from the accident.
As can be noted, the recovery of the superintendent’s costs and the applicability of an "agency" fee are somewhat entwined. The judgment indicates the potential difficulties of first identifying and then separating revenue loss and expenditure loss into watertight categories, due to the surrounding factual matrix. In allowing the claim for agency fee at 1% of proven quantum, by applying the Admiralty practice for collisions, and the recovery of the superintendent’s wages to approximate lost revenue-generating activities – in recognition of the difficulties of quantification and the impracticality of recording the use of all management time and costs – the judge has created a most welcome and practical cost-saving ‘shorthand’ for quantifying damages where relatively small sums are involved.
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