The World of Maritime and Commercial Law

Essays in Honour of Francis Rose

Charles Mitchell, Stephen Watterson, Charles Mitchell, Stephen Watterson

• Publisher: Hart Publishing
• Year: 2020
• ISBN:
  9781509932405
• Edition: 1
• Topic: Law
• Subtopic: Maritime Law
• Index: Law

This collection of 20 essays contains recent work by legal scholars, practitioners and judges, all internationally renowned for their expertise in the fields of maritime and commercial law. For maritime lawyers, the book contains absorbing and important studies of the law governing maritime collisions, carriage of goods by sea (examining the meaning of 'actual carriage' in the Hamburg Rules, and the complex web of rules that governs multimodal carriage), and marine insurance (discussing the history of the doctrine of utmost good faith, and jurisdiction clauses in cargo policies). In the area of private international law, there are chapters on the choice of law rules affecting the ownership of ships, and on recent cases where conflict of laws issues have been decided by the Privy Council. For generalist commercial lawyers, there is a wealth of scholarship on the Sale of Goods Act 1979, its provisions and scope, and on the rules of contractual interpretation, their history, content and application in commercial settings. In addition, there are chapters on negotiating damages for breach of contract, illegality, tracing misapplied funds, the application of private law rules to disputes about cryptocurrencies and developments in the law of directors' duties. Taken as a whole, the essays in this collection stand out for their breadth of scholarship, analytical power, depth of understanding, and penetrating insights even into the knottiest problems of maritime and commercial law. They are essential reading for every maritime and commercial lawyer and a fitting tribute to a scholar who has led the way in both fields for many decades.

1

The Empress of Ireland and Mont Blanc Collisions: Then and Now

NICHOLAS GASKELL*

This is the story of two collisions that occurred in 1914 and 1917, and yielded cases that ended up in the Privy Council. They are fascinating in themselves to any reader about maritime disasters – involving as they do a tragic loss of life, incompetence and questionable political influences. They also illustrate the difficulties faced by maritime lawyers a century ago, some of which are long forgotten and others which still confront us today. The legal assumptions that would have been self-evident to practising maritime lawyers then may now seem puzzling to a modern reader. It is therefore interesting to examine some of the legal fallout from these collisions to illustrate principles that have shaped maritime law, but which have undergone significant change. The two particular examples happen to have a connection with Eastern Canada, but still have a resonance for UK maritime lawyers. It is impossible to set the scene in 1914, though, without mentioning the sinking of the Titanic in 1912.¹

I.The Titanic and Limitation of Liability

The Titanic is still the most famous maritime disaster of all time, and her story has been repeated in many books and films.² Some 1,517 souls were killed, 832 passengers and 685 crew; this represented 63 per cent of passengers being carried, but 73 per cent of the crew.³ The sinking also influenced maritime law, mainly through changes to safety regulations, eg as to the number of lifeboats to be carried.⁴ There were also civil claims brought by the passengers, many of which were litigated in the USA. This was hardly surprising, given the number of wealthy US passengers on board, but although the shipowner asserted that it had contractual defences to cargo and passenger claims, it in fact successfully petitioned to limit its liability under US law.⁵

There were 666 (mostly personal) claims submitted in the US proceedings and these amounted to US$16,925,687,⁶ but the shipowner was entitled to limit liability to only US$97,772 (plus interest of $119,525).⁷ This was because, at that time, the USA operated a limitation system based on the value of the ship, but calculated after the casualty. Although such a system represented in some measure the shipowner’s investment in the maritime adventure, the US Titanic litigation showed its drawbacks as the only property saved consisted of 14 lifeboats and some advance freight.⁸

The British Merchant Shipping Act 1854, section 504,⁹ had also based limitation on the value of ship and freight, but the MSA Amendment Act 1862¹⁰ adopted a new approach of fixing limits based on the tonnage of ships. The limits were set at £8 per ton for property claims¹¹ or £15 per ton for personal claims.¹² In fact, it seems that these figures were set at the then average values of general cargo ships (£8 per ton) or passenger ships (£15 per ton).¹³ Had the Titanic claims been subject to UK law, the shipowner would have been entitled to limit under the Merchant Shipping Act 1894, section 503, which re-enacted in substance the 1862 tonnage approach.

Tonnage measurement for registration purposes is of volume, not weight, with gross tonnages generally reflecting the internal capacity of a ship and net tonnages representing the amount of ‘earning space’ – that is, after deducting space used, eg for accommodation, ballast, pumps, storage and propelling machinery. The Merchant Shipping Act 1894, section 503(2)¹⁴ adopted the wording for limitation of ‘registered tonnage with the addition of any engine room space deducted for the purpose of ascertaining that tonnage’.¹⁵ In effect, the figure for the engine room deduction appearing on the tonnage certificate was added to the net registered tonnage (nrt). It is not possible now to calculate the limitation tonnage of ships from a century ago without seeing their tonnage certificates, because the deduction could vary for each ship,¹⁶ but a rule of thumb was to assume a figure of 32 per cent of gross registered tonnage (grt) to be added to the nrt.¹⁷ Under the British tonnage limitation system, the Titanic’s limit can therefore be roughly estimated at about £549,839 (US$2,675,793).¹⁸

In fact, the claimants were later allowed to withdraw their claims against the US fund so as to be able to sue in the UK,¹⁹ and it appears that the claims were settled out of court.²⁰

II.Empress of Ireland

The British registered RMS Empress of Ireland²¹ had been launched from the Fairfield yard in Govan in 1906 and was the pride of the Canadian Pacific Railway (CPR) Line. On 29 May 1914, while on a voyage from Quebec to Liverpool with 1,057 passengers and 420 crew, she was sunk in the St Lawrence Seaway after a collision at 02:06 in fog with the Norwegian registered collier Storstad. The Storstad was under charter to the Dominion Coal Company and was inbound to Montreal on a voyage from Sydney, Nova Scotia, with a cargo of up to 11,000 tons of coal.

The RMS Empress of Ireland has been called the ‘forgotten Empress’,²² because her loss on 29 May 1914 has received relatively little international attention by comparison with that of the Titanic (in 1912) or of the Lusitania (torpedoed on 7 May 1915). Part of the reason for this is probably the outbreak of the First World War shortly after the sinking, yet more passengers (840)²³ were lost on the Empress of Ireland than on the Titanic (832)²⁴ or Lusitania (791).²⁵

A.Formal Investigation

One unifying factor between all three of these famous sinkings was that formal investigations into them were presided over by Lord Mersey,²⁶ not entirely without controversy at the time²⁷ and later.²⁸ The investigation into the loss of the Empress of Ireland was convened by the Canadian Minister of Marine and Fisheries and took place under the Canada Shipping Act 1906, Part X.²⁹

The vessels had sighted each other in the early morning from around four miles away, but their stories thereafter differed diametrically, both as to their respective courses and the action taken by each when the fog was sighted. The Investigation Report concluded that the Empress of Ireland’s account of her original course was probably right, but that on either vessel’s version there would have been no collision had the fog not intervened – that is, if they had kept their courses, they would have passed safely and they would not be ‘crossing so as to involve risk of collision’ within the Collision Regulations.³⁰ Thereafter, when the lights of the Storstad began to grow dim in the fog, the Empress of Ireland went full astern. The Commissioners considered that the master might have been better advised to steer away from the Storstad, but surprisingly did not consider that stopping was an unseamanlike act, nor that failure to give a wider berth was a contributory cause of the disaster. By contrast, they found that the Storstad had altered course to starboard, believing that the ships would pass port to port (red to red), whereas the Empress of Ireland was on a course to pass starboard to starboard (green to green).³¹ This led the Storstad to collide directly with the starboard side of the Empress of Ireland – causing what was a fatal blow, as a result of which the Empress of Ireland foundered and sank within about 15 minutes. The officer of the watch on Storstad was also criticised for not calling his master to the bridge as soon as the fog was seen.

The finding that exonerated the British ship in respect of its navigation was not without controversy. There was some evidence that there might have been steering problems with the Empress of Ireland,³² including testimony from her own quartermaster, James Galway, who had been on duty until a couple of hours before the collision. There were allegations at the time, which have continued, that the evidence of the Empress of Ireland had been manufactured and that CPR had attempted to get Galway out of the country so that he could not testify at the enquiry.³³ The Commissioners preferred the evidence of the pilot and officers of the Empress of Ireland, and allegations about physical defects are always difficult to establish when the ship has sunk.³⁴ With hindsight, it is possible to wonder whether Lord Mersey was unduly concerned to preserve the reputation of a major British shipowner³⁵ and less inclined to believe the testimony of a Liverpudlian quartermaster (with an Irish name) over the ships’ officers.³⁶

B.Civil Claims

Civil claims arising from the sinking of the Empress of Ireland amounted to Can$3,069,484. The majority of these claims were for property loss (eg Can$2 million for the value of the Empress of Ireland), with Can$469,468 in claims for loss of life.^3...