DMC/S&T/08/01
Zarkovic Stanko v. Owners of the ‘Mara’
Singapore Court of Appeal: July, September 2000: [2000] 4 SLR 156
Case Note submitted by Ang & Partners, International Contributors for Singapore
ADMIRALTY JURISDICTION: PERSONAL INJURY SUSTAINED IN COURSE OF SHIPBOARD EMPLOYMENT: CLAIM FOR COMPENSATION UNDER EMPLOYMENT CONTRACT: WHETHER THAT CLAIM WITHIN ADMIRALTY JURISDICTION OF COURT
PERSONAL INJURY: DAMAGES IN BOTH CONTRACT & TORT: CLAIM IN TORT SETTLED: WHETHER CLAIMANT STILL ENTITLED TO CONTRACTUAL CLAIM

Summary
1. A claim for compensation under an employment contract negotiated between the shipowners and the claimant’s union lay within the Admiralty jurisdiction of the Singapore High Court under s.3(1)(f) of the High Court (Admiralty Jurisdiction) Act. To found admiralty jurisdiction under that section it was not necessary that the claim for loss of life or personal injury be based on fault.

Facts
Stanko was employed as a fitter on the ‘Mara’ under a contract of employment incorporating the terms of a collective agreement between the shipowners and the International Transport Workers Federation. Clause 15 of that agreement provided:
"Compensation for Disability
A seafarer who suffers an accident whilst in the employment on the Vessel through no fault of his own…… and whose ability to work is reduced as a result thereof, shall receive from the Vessel, in addition to his sick pay, an annual annuity calculated on his basic pay at the rate given in the table below….
The annuity may be converted into a lump sum if the injured party so agrees…. 
Any payment effected under this clause shall be without prejudice to any claim for compensation made in law."

In September 1992, Stanko was injured on board the ship, when he was pushed off an elevator landing in the engine room by an engine valve which dropped on him, causing him to fall some 5 or 6 metres to the engine room floor. Stanko was seriously injured and became permanently disabled. He alleged that the valve had not been properly secured due to the improper construction of the valve seat and that fellow crew members engaged in dismounting the valve had used unsafe work practices.

Stanko brought an action in rem in the Admiralty jurisdiction of the Singapore High Court claiming damages for the injuries he had sustained and in addition compensation under clause 15 of his contract of engagement. Shortly before trial, the claim for damages was settled, without any deduction to take account of the contractual compensation. The issue whether Stanko was entitled to the compensation in addition to the damages he had been paid was left for the court to decide.

Arguments
The shipowners maintained that:
1 the claim under the contract of employment was not within the admiralty jurisdiction of the court. The relevant provision of the High Court (Admiralty Jurisdiction) Act was section 3(1)(f), which read:
"The Admiralty jurisdiction of the High Court shall be as follows, that is to say, jurisdiction to hear and determine any of the following questions or claims…
(f) any claim for loss of life or personal injury sustained in consequence of any defect in a ship or in her apparel or equipment, or of the wrongful act, neglect or default of the owners….or of the master or crew thereof….. being an act, neglect or default in the navigation or management of the ship…..";
2 that, under the principle of ‘double recovery’, Stanko was not entitled to receive the compensation under his employment contract in addition to the damages he had received from the shipowners in settlement of his claim against them in tort.

The Decision
The judgment of the court was delivered LP Thean JA.
1 Jurisdiction.
Following the approach adopted in the English case of The Antonis P Lemos [1985] AC 711 and in a number of Singapore cases, in particular The Trade Fair [1994] 3 SLR 827, the court noted that "a broad and liberal construction" had been adopted to the statutory provisions conferring admiralty jurisdiction on the courts.

In analysing the wording of section 3(1)(f), the court concluded that, to found admiralty jurisdiction, it was not necessary that the claim be based on fault. The first leg of the section – ‘any claim for loss of life or personal injury sustained in consequence of any defect in an ship….’ was not necessarily based on fault, whereas the second leg – ‘any claim ….. sustained in consequence of the wrongful act, neglect or default of the owners….’ clearly was based on fault.

In reliance on The Trade Fair case, the court held that the words ‘any claim for loss of life or personal injury’ were to be construed as meaning ‘any claim arising out of loss of life or personal injury’. Stanko’s claim under the employment contract fell within this definition. The section covered ‘any claim’ and, in the court’s view, it did not matter ‘whether the claim is in the nature of damages or indemnity or compensation or even a contractual claim’. It was also, given the circumstances of Stanko’s accident, a claim sustained in consequence of either ‘a defect in the ‘Mara’, or in her apparel or equipment or of the wrongful act, neglect or default of persons’ for which the owners of the ‘Mara’ were responsible. Hence the claim fell within the admiralty jurisdiction of the court.

2 Double recovery
The court reiterated the basic rule ‘that damages in negligence are purely compensatory and, in assessing damages for the loss the injured claimant has sustained, any gain which is received by him, which he would not have but for the injury, prima facie will be taken into account.’ The court noted that there are two established exceptions to the basic rule:
a) where the claimant recovers money under an insurance policy for which he has paid the premiums;
b) where the claimant receives money from the benevolence of third parties, prompted by sympathy for his misfortune.

In neither of these cases will the money received by the claimant be deducted from any damages he is awarded.

The court continued: ‘The number of such exceptions is by no means closed and there are circumstances where payments made to the injured claimants do not fall precisely and squarely within either of the exceptions but are nonetheless not deductible in the assessment of recoverable loss.’

In examining article 15 of the employment contract, the court said:

‘It seems to us that the intent and purpose of art.15 is to provide the employee a kind of financial security in the form of an annuity for the rest of the employee’s natural life [not just for th in the event that he suffers any disability as a result of an accident whilst in the employment of the ship through no fault of his. Broadly speaking, it is analogous to a benefit derived from an insurance scheme arranged by or through the shipowners and it formed part of the employee’s remuneration as a benefit in kind.’

The court continued:
‘Even if the payment is not a benefit arising strictly from an insurance scheme, we think that the claimant is still entitled to recover this contractual sum on the ground that the payment was expressly provided by his employment contract……. It should be noted that art.15 is part of the collective agreement entered into between the shipowners and the trade union representing the crew members of the ‘Mara’ and it is quite apparent that it was intended to confer certain additional benefits to the crew members. It is also apparent to us that art.15 was drafted with the knowledge that a crew member who is injured through no fault of his own can also recover damages from a tortfeasor, and hence it expressly provides that any payment made under that article is without prejudice to any claim by the injured crew member against the tortfeasor.’

The court therefore held that the claimant was entitled to the payment under art.15 without having it deducted from the damages paid under the settlement of the tort claim against the shipowners.