Shaw Savill and Albion Co Ltd v Commonwealth

[1953] HCA 24

FoJJ

Bammfrda

Enterprises v O'Connor

1̂̂ 988] 1 QdR

164 HIGH COURT

[1953.

[HIGH COURT OF AUSTRALIA.]

SHAW SAVILL AND ALBION COMPANY\

P la in tiff ;

L I M

I T E D ............................................ /

AND

THE COMMONWEALTH OE AUSTRALIA .

D efen d a n t .

H.C. OF A. Admiralty—Collision between ships—Interest as part of the damages.

1953.The Admiralty rule that, in cases of collision, interest is to be included as jjart of the damages decreed, on the basis that the loss was not paid at the

S rD N E r.

proper time, is a rule of substantive law and not merely of procedure, and is,

April 15; accordingly, followed by the High Court.

May 4.

Dixon C.J.Special Case Stated

b y the P rincipal R egistrar ,

On 19th. November 1952 in a reference in an Admiralty action in the High Court of Australia between Shaw Savill and Albion Co. Ltd., as plaintiff, and the Commonwealth of Australia, as defendant, the Principal Registrar of the High Court of Australia, with the concurrence of the parties, stated the following special case for the opinion of the Court.

1. On 3rd September, 1940, a collision occurred between the plaintiff’s M.V. Coptic and the defendant’s H.M.A.S. Adelaide off the coast of New South Wales.

2. On 2nd October, 1940, the plaintiff issued a writ of summons out of this Court claiming £35,000 against the defendant for damage occasioned by the collision.

3. On 25th August, 1941, his Honour, Mr. Justice Dixon dismissed the suit and the defendant’s counterclaim without costs and without prejudice to the causes of action set up therein and without prejudice to such further proceedings as the plaintiff or the defendant might be advised to bring.

4. Both parties appealed to the Full Court of this Court from the order made by his Honour, Mr. Justice Dixon, on 25th August,

88 C.L.R.] OF AUSTRALIA.

165

5. On 28th. April, 1942, the Full Court {Rich, Starke and Williams

^

JJ.) discharged the lastmentioned order and stood over the suit

generally with liberty to either party to restore it to the list for Shaw

further hearing upon the conclusion of hostilities or such earlier

Savill

date as the evidence for which the defendant claimed privilege

AND Albion

Co.

Ltd .

could be given without prejudice to the safety of the Realm.

V.

The

6. On 13th November, 1947, his Honour Mr. Justice Dixon,

COMMON-

made a decree pronouncing the collision to have been occasioned wealth of by the fault of the defendant and the captain, and for the plaintiff’s ____ ' claim for damages and against the counterclaim, and condemning

the defendant in damages and costs.

7. His Honour by the said decree also referred the assessment of damages to the principal registrar of this Court to report the amount due to the plaintiff.

8. On 19th December, 1949, the plaintiff filed a claim for damages comprising ten items of particulars amounting to £26,268 Os. 2d. also interest and costs.

9. A time has not been appointed for the reference and it has not been proceeded with.

10. The plaintiff and the defendant, however, have agreed that the sum payable by the defendant to the plaintiff in respect of the said itemised particulars for damages is £24,263 7s. 7d. and payment of the damages was made by the defendant to the plaintiff as follows :—

£20,000 Os. Od. on 21st September, 1950.

£4,263 7s. 7d. on 31st October, 1951.

£24,263 7s. 7d. Total.

11. The parties have agreed that interest on the said sum, if payable, amounts to £8,320 6s. 5d. Australian currency.

12. The parties are at issue as to whether interest is payable.

13. At the request of the parties I therefore state the following

questions of law arising in this reference for the opinion of the

Court, namely :—“ Whether interest is payable on the said sum of

£24,263 7s. 7d. by way of damages or otherwise or at all ” .

K. A. Ferguson Q.C., and B. Burdekin, for the plaintiff.

H. J. H. Henchman, for the defendant.

Cur. adv. vult.

166 HIGH COURT

[1953.

H. C. OF A.

D ix o n C.J. delivered the following written judgm ent:—

1953.This matter comes before me as a reference from the principal

SlIAW

registrar.

Savill

The jJaintiffs as the owners of the motor vessel Coptic brought

AND Albion

Co. Ltd.this suit against the Commonwealth seeking a decree for the

V.damage caused to that ship as a result of H.M.A.S. Adelaide

Tins

Common­colliding with her in the early hours of the morning of 3rd September

wealth OF 1940. The Court ultimately pronounced against the Commonwealth

Australia.and a decree was made containing a reference to the registrar to

May i.assess the amount of the damage. The parties agreed on the amount

of the damage which should thus be assessed except that the Com­ monwealth was not prepared to accept the view that the amount of the damage should bear interest. The amount agreed upon, which has now been paid, is £24,263 7s. 7d. The question which has been referred is in substance whether interest on what other­ wise is the agreed amount of the damage should be included in the assessment.

“ The principle adopted by the Admiralty Court has been that of the civil law, that interest was always due to the obligee when payment was not made, ex mora of the obligor ; and that, whether the obligation arose ex contractu or ex delicto ”, per Sir Robert Phillimore, The Northumbria (1); “ Generally . . . the Court of Admiralty is governed by the civil law, the law marine, and law merchant ”, per Sir John Nicholl, The Neptune (2). As a result it has long been settled that prima facie interest must be included in the assessment of damages decreed in the Admiralty jurisdiction in cases of collision. In cases of total loss if the ship is in ballast it is calculated from the casualty to the date of payment of the sum awarded. If freight is earned and paid or recovered, interest begins where freight ends. Where the ship is not sunk and the damage consists in the cost of repairs interest runs from the owner’s payment of the repair bill. “ The sum so calculated is given not as interest on a debt but as part of the damages ”, per Sir Henry Duke P., The Joannis Vatis {No. 2) (3). “ Upon what grounds, then, was interest given ? Interest was not given by reason of indemnifi­ cation for the loss, for the loss was the damage which had accrued ; but interest was given for this reason, namely, that the loss was not paid at the proper time. If a man is kept out of his money, it is a loss in the common sense of the word, but a loss of a totally different description, and clearly to be distinguished from a loss

(1) (1869) L.R. 3 Adm. & Ecc. 6, at

(2) (1834) 3 Hagg. (Adm.) 129, at

p. 10.

p. 136 [166 E.R. 354, atp. 356].

(3) (1922) P. 213, at p. 223.

88 C.L.R.] OF AUSTRALIA.

167

which has occurred by damage done at the moment of collision ” ,

H. C. OF A.

per Dr. Lushington, The Amalia (1).

1953.

I t is unnecessary to multiply the citation of authority but perhaps a reference should be given to The Berwickshire (2), as

Shaw

Savill

the latest case in which the authorities are cited and considered.

AND Albion

Co.

Ltd .

How then is the Commonwealth able to escape the operation of the

V.

T he ■

rule that interest is to be included as part of the damages ? In

Common­

my opinion there is no ground upon which it can do so. What is wealth OF

said is that the inclusion of damages is nothing but a practice, a Australia.

matter of practice and procedure and that the rules of this Court

Uixoii C.J.

in force at the time of the commencement of the suit do not carry it over into the Admiralty jurisdiction of this Court. These ruleS are said to have been exhaustive, a proposition for which Common­ wealth V. The Armadale (3) is cited, and thus to have operated to exclude the Admiralty practice of giving interest. Countless instances may be found of the use of the word “ practice ” in describing the course taken by Courts of Admiralty in awarding interest as part of the damages. The word is used, as often in courts, to describe the manner in which the law is habitually administered. But it is not a matter of procedure. I t is a matter of substantive right and liability. I t is easy to understand that the Commonwealth should desire that the award of a large sum for interest as part of the damages should be a judicial responsibility. But there cannot, I think, be any doubt that the damages must include interest. The calculation has been agreed at £8,320 6s. 5d. I shall order that the question be answered that interest is payable on the sum of £24,263 7s. 7d. by way of damages.

In answer to the question in the special case stated by way o f reference from the principal registrar determine that interest is payable on the sum of £24,263 7s. 7d. by way of damages. Defendant to pay the costs of the said reference.

Solicitors for the plaintiff, Norton Smith & Co.

Solicitor for the defendant, D. D. Bell, Crown Solicitor of the

Commonwealth of Australia. .

J. B.

(1) (1865) 5 N.R. 164 n ; (1864) 34

(2) (1950) P. 204.

L.J. (P.M. & A.) 21.

(3) (1947) 75 C.L.R. 628.