Shaw Savill & Albion Co Ltd v Commonwealth [1953] HCA 24; (1953) 88 CLR 164 (4 May 1953)

HIGH COURT OF AUSTRALIA

SHAW SAVILL AND ALBION CO. LTD. v. THE COMMONWEALTH OF AUSTRALIA [1953] HCA 24; (1953) 88 CLR 164

Admiralty

High Court of Australia
Dixon C.J.(1)

CATCHWORDS

Admiralty - Collision between ships - Interest as part of the damages.

HEARING

Sydney, 1953, April 15; May 4. 4:5:1953
SPECIAL CASE STATED BY THE PRINCIPAL REGISTRAR.

DECISION

May 4.
DIXON C.J. delivered the following written judgment: -
This matter comes before me as a reference from the principal registrar. (at

2. The plaintiffs as the owners of the motor vessel Coptic brought this suit against the Commonwealth seeking a decree for the damage caused to that ship as a result of H.M.A.S. Adelaide colliding with her in the early hours of the morning of 3rd September 1940. The Court ultimately pronounced against the Commonwealth and a decree was made containing a reference to the registrar to assess the amount of the damage. The parties agreed on the amount of the damage which should thus be assessed except that the Commonwealth 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 pounds 7s. 7d. The question which has been referred is in substance whether interest on what otherwise is the agreed amount of the damage should be included in the assessment. (at p166)

3. "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 (1869) LR 3 Adm & Ecc 6, at p 10 . "Generally . . . the Court of Admiralty is governed by the civil law, the law marine, and law merchant", per Sir John Nicholl, The Neptune (1834) 3 Hagg (Adm) 129, at p 136 [1834] EngR 517; (166 ER 354, at p 356) . 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) (1922) P 213, at p 223 . "Upon what grounds, then, was interest given? Interest was not given by reason of indemnification 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 which has occurred by damage done at the moment of collision", per Dr. Lushington, The Amalia (1865) 5 NR 164 n; (1864) 34 LJ (PM & A) 21 . (at p167)

4. It is unnecessary to multiply the citation of authority but perhaps a reference should be given to The Berwickshire (1950) P 204 , as the latest case in which the authorities are cited and considered. How then is the Commonwealth able to escape the operation of the rule that interest is to be included as part of the damages? In my opinion there is no ground upon which it can do so. What is said is that the inclusion of damages is nothing but a practice, a matter of practice and procedure and that the rules of this Court 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 Commonwealth v. The Armadale [1947] HCA 18; (1947) 75 CLR 628 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. It is a matter of substantive right and liability. It 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 pounds 6s. 5d. I shall order that the question be answered that interest is payable on the sum of 24,263 pounds 7s. 7d. by way of damages. (at p167)

ORDER

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