Lennox-King, Olivia --- "Laying the Mark to Port and Starboard:Salvage Under Duress and Economic Duress at Contract Law" [2007] ANZMarLawJl 5; (2007) 21(1) Australian and New Zealand Maritime Law Journal 32

* I wish to thank Paul Myburgh, Associate Professor of Law and Associate International Dean at the University of Auckland, for his invaluable help and support throughout the researching and writing of this paper.

[1] At the outset, it is important to clarify the terminology used in this paper. In jurisdictions belonging to the Anglo-Common law tradition, the nomenclatures ‘Admiralty’ and ‘maritime’ are often used interchangeably to refer to the law governing claims relating to the sea. Strictly speaking, maritime or shipping law comprises ‘the law that regulates navigation and commerce by sea’, and is the more expansive term, while the term ‘Admiralty’ refers to the issue of the jurisdictions of the courts, and the traditional rules exercised by the Admiralty courts of England. See Paul David, ‘Maritime Law: Admiralty’ in Law Book Company, Laws of New Zealand (at 5 January 2007) [1-1] (LexisNexis NZ Online, Commentary).

[2] See The Tojo Maru [1972] AC 242, 290-291 (Lord Diplock), where His Lordship refuted the existence of any such body of law. 3 In New Zealand, maritime law has been integrated into the common law legal system insofar as there exists no separate court for the administration of the Admiralty jurisdiction, and the High Court of New Zealand exercises the jurisdiction concurrently with the general jurisdictions of equity and common law. The separate Admiralty jurisdiction that was developed in England has been imported into the New Zealand context via various statutes, from the Colonial Courts of Admiralty Act 1890 (Imp), to the current Admiralty Act 1973. In addition, the provisions of the Maritime Transport Act 1994 enact various international maritime conventions as part of domestic law. For more detail see David, above n 1, para 1-2. The term ‘common law’ used here and elsewhere in this paper therefore refers to the rules of law not concerned with maritime law.

[4] International Convention on Salvage, opened for signature 28 April 1989 (entered into force 14 July 1996) (1989 Salvage Convention).

Law of Salvage (4th ed 2003) Chapter 2; and Francis D Rose (ed.), Kennedy and Rose, the law of salvage (6th ed 2002) Chapter 1.

[6] As mentioned above at n 1 and n 3, the terminology in this area is somewhat problematic. The reference to ‘common law Admiralty’ is to the rules of maritime law that exist in common law countries and have been developed from the English Admiralty inheritance, in many common law countries via the Colonial Courts of Admiralty Act 1890 (UK). However, the Admiralty law developed in England is of civil law heritage. After the Protestant Reformation of the 16th century, Admiralty law was been practiced by a body of practitioners descended from the medieval canon lawyers, who were influenced by the earlier arrival of the Romans in England. These practitioners congregated in the Doctors Commons, where Admiralty law developed and resided until the dissolution of the Commons in 1857. See Kennedy, above n 5, 51-54.

[7] For further detail, see Donald A. Kerr, ‘The Past and Future of ‘No Cure, No Pay’’ (1992) 23 JMCLQ 3, 411, 412-413.

[8] Admiralty Commissioners v Valvadera (Owners) [1938] AC 173, 200 (Lord Roche).

[9] Kerr, above n 7, 412. Salvage is one of a limited range of circumstances recognised by judicial doctrine that give rise to a maritime lien, a ‘privileged charge or claim upon property that arises by operation of law’. The resultant maritime lien allows the salvor to bring an in rem claim directly against the ship or property concerned; Aleka Mandaraka-Sheppard, Modern Admiralty Law (2002) 22.

[10] Kennedy, above n 5, 59-60.

[11] Rhys Clift and Robert Gay, ‘The Shifting Nature of Salvage Law: A View From a Distance’ (2005) 79 Tulane Law Review 1355, 1357-1358; see also Brandon J’s judgment in The Unique Mariner (No.1) [1974] 1 Lloyd’s Rep 555 (discussed below).

[12] See Article 1(c) of the 1989 Salvage Convention, above n 4, where property is defined as ‘any property not permanently or intentionally attached to the shoreline, and includes freight at risk’, cf the decision in The Gas Float Whitton (No 2) [1897] UKLawRpAC 24; [1897] AC 337.

[13] For a modern example of the juxtaposition of the different concepts of salvage, the recent case of the grounding of the MSC Napoli is interesting see BBC, ‘700 Napoli Cargo Items Salvaged’, BBC News, 8 February 2007 <http://news.bbc.co.uk/2/hi/uk_news/england/devon/6344559.stm> 8 February 2007. 5 See for example William Tetley, International Maritime and Admiralty Law (2002) Chapter 1; John Reeder (ed), Brice on Maritime

[14] See for example, Nicholas Gaskell, ‘The Lloyd’s Open Form and contractual remedies’ (1986) Lloyd’s Maritime and Commercial Law Quarterly 306, 307 and S Stoljar, The Law of Quasi Contract (1964) 171-176.

[15] Convention for the Unification of Certain Rules of Law Relating to Assistance and Salvage at Sea, opened for signature 23 September 1910 (entered into force 1 March 1913) (1910 Salvage Convention).

[16] Kennedy, above n 5, 67.

[17] See the Comite Maritime International Report to the International Maritime Organisation, Antwerp, 6 April 1984, 12.

[18] The Tojo Maru, above n 2.

[19] Brice, above n 5, 59.

[20] See for example, The August Legembre [1902] p 123 and the following discussion at above n 137. 21 1989 Salvage Convention, above n 4, Article 12.

[22] See for example The Governor Raffles (1815) Adm. [1815] EngR 690; 2 Dod 14, 17 (Lord Stowell).

[23] Kennedy, above n 5, 8.

[24] This is dependent on the nature and scope of the salvage agreement at hand; if a service is conveyed in a way, or by a party, not strictly covered by the agreement, a salvage award might still be possible. Moreover, a salvor can be bound to perform a particular salvage without the agreement losing its character as a salvage agreement, provided that the contract is entered into after the salvage is necessary; see Martin Davis and Anthony Dickey, Shipping Law (3rd ed 2004) 628.

[25] Kerr, above n 7, 419-423.

[26] ‘Engaged services’ refers to services performed by another party at the request of the master of a casualty ship, for example, the provision of certain equipment (such as an anchor and chain). At traditional Admiralty law a reward was still due even where the service had no useful result; see Brice, above n 5, 117-119.

[27] The Unique Mariner (No. 2) [1979] 1 Lloyd’s Rep. 37, 49.

[28] Christopher Hill, Maritime Law, (6th ed 2003) 335; see also The Five Steel Barges [1890] UKLawRpPro 31; (1890) 15 PD 142, and The Unique Mariner (No. 2) above n 27, 49.

[29] The Hestia [1895] UKLawRpPro 10; [1895] P 193. 30 Francis D Rose, ‘Restitution for the Rescuer’ (1989) 9 Oxford Journal of Legal Studies 2, 167-204, 171.

[31] Although one of the traditional criteria is success, that there has been an erosion of the requirement for success in the traditional sense in salvage operations; see Kerr, above n 7, 411-427.

[32] Mason v The Blaireau 6 U.S. (2 Cranch) 177, 186 (1804) 188 (Marshall CJ)

[33] Kerr, above n 7, 418.

[34] Falcke v Scottish Imperial Assurance [1886] UKLawRpCh 230; (1887) 34 Ch D 234, 248.

[35] Kennedy, above n 5, 2.

[36] For greater detail, see F L Wiswall Jnr,. The Development of Admiralty Jurisdiction and Practice Since 1800 (1970) esp. Chapters 2 and 3.

[37] Ibid, 68.

[38] Ibid, 68-69; see also Gaskell, above n 14, 311. See also Kennedy’s discussion of Dr. Lushington’s judgment in The Henry (1851) 15 Jur 353, where his Honour held that a salvee’s misrepresentation as to the value of the cargo of the salved ship was immaterial to the price of the salvage agreement, a view that is wholly inconsistent with established case law; Kennedy, above n 5, 426-428.

[39] The doctrine of stare decisis means that courts follow precedents as to the same legal issues, set in earlier cases, in courts at the same level or higher; The Liffey (1887) 6 Asp M.C. 255; The Teh Hu (1969) 2 Lloyds Rep. 365, 369 (Lord Denning). 40 A comprehensive survey of the English and New Zealand history is outside the scope of present discussion. It is enough to say that, following the changes of the 1873 and 1875 Judicature Acts and the subsequent changes in the latter half of the twentieth century, maritime law is now administered as a separate jurisdiction within the same court systems in both England and New Zealand. For a more detailed account, see David, above n 1, (3) 15-25.

[41] Note that in The Juliana [1822] EngR 235; (1822) 2 Dods 504, 520, Lord Stowell distinguished the more general equitable nature of Admiralty from the increasingly rigid equitable jurisdiction of the Courts of Chancery. However, as Kennedy has noted, with the amalgamation of the separate courts into a single High Court, maritime’s equitable nature has increasingly resembled that of the equity developed by Chancery; Kennedy, above n 5, 12.

[42] Five Steel Barges above n 42, 146.

[43] The Henry Ewbank (1883) 11 Fed. Cas. (Case No. 6376) 1166, 1170; cited in The Albion [1861] EngR 412; (1861) Lush. 282, 284, andThe Fusilier (1865) Br. Of Lush. 341.

[44] Nicholas Gaskell, ‘The 1989 Salvage Convention and the Lloyd’s Open Form (LOF) Salvage Agreement 1990’ (1991) 16 Tulane Law Journal 1, 14.

[45] Brice, above n 5, p. 2; 105-108.

[46] Since salvage is one of the recognised categories that attract a maritime lien, this is a necessary consequence of a claim in rem against the ship, as the possible quantum of award is limited by the value of the ship. The parties may, however, agree to a higher sum (or an assessment formula which results in a higher sum), and in the absence of inequity, this will be enforced; see for example The Inna, 148. In practice, however, a salvee is unlikely to agree to a higher sum, and indeed, such an excessive amount is likely to attract either the Admiralty Court’s discretionary power to set aside inequitable agreements, or the sanction of Article 7 of the 1989 Salvage Convention, above n 4.

[47] The St. Blane [1974] 1 Lloyd’s Rep 555, 408 (Brandon J). 48 This does not mean that a salvor will not be held liable for his negligence or failure to perform his salvage duties adequately; in addition to the general duty not to act negligently (The Cape Packet [1848] EngR 907; (1848) 3 W Rob 122, 125 (Dr. Lushington)), under the 1989 Salvage Convention (art 8.1(a)) salvors are under a duty to carry out salvage operations with due care. There may also be duties of care imposed by contractual agreement (for example, Lloyds Open Forms 1995 and 2000 specify that salvors are to use their ‘best endeavours’). See further Kennedy, above n 5, 501.

[49] The Glengyle [1898] UKLawRpAC 40; [1898] AC 519; see also The Industry [1835] EngR 660; (1835) 3 Hag Adm 203, 204 (Sir John Nicholl).

[50] The Makedonia [1958] 1 QB 365, 374. However, judicial attitude is not always so favourable towards salvors. In the shattering decision of Semco Salvage & Marine Pte. Ltd v Lancer Navigation Co. Ltd (The Nagasaki Spirit) [1997] AC 455, the House of Lords interpreted the reference to a ‘fair rate’ for the salvors in Article 13 of the 1989 Salvage Convention as meaning a fair rate of reimbursement for expenditure, and not a fair rate of remuneration. The resultant dissatisfaction in the salvage community has led to the development of SCOPIC, which stands for ‘special compensation protection and indemnity clause’ and is a contractual term that may be incorporated into the LOF 2000 by agreement between the parties. For more information on SCOPIC and its provisions, see Brice, above n 5, 614-620.

[51] Gaskell, above n 44, 14. But see above n 50.

[52] 1989 Salvage Convention, above n 4, Article 13, 14.

[53] The Cuba (1860) Lush 15, 16. As an aside, this is doubtlessly one of the reasons that salvage agreements tend to specify a governing law, and why the Lloyds Open Form and its reference to London arbitration has achieved such success.

[54] See The Goring [1987] QB 687, 701, where Gibson LJ commented ‘there are at sea no neighbours, normally no public services such as fire brigades, and few passers-by to provide assistance either from moral obligation alone or from public duty’.

[55] Admiralty Commissioners v The Valvadera, above at n 8, 189.

[56] Kerr, above n 7, esp. 423-427.

[57] Ibid.

as to the ‘pay’ element and the question of whether the same policy considerations exist in rewarding a governmental agency, rather than a voluntary private salvor; ibid, 425-427.

[59] Lord Goff and Gareth Jones, The Law of Restitution (6th ed 2002) 5-12.

[60] Cf. submissions put forward in The Telemachus [1957] P47, 48.

[61] The Cargo ex Port Victor [1901] UKLawRpPro 23; [1901] P 243, 249.

[62] See, eg, Goff and Jones, above n 59, where Chapter 18 is devoted entirely to the discussion of salvage.

[63] Ibid, 171.

[64] Kennedy, above n 5, 19. Restitutionary principles have been applied in salvage cases; in The Winson [1982] AC 939, the plaintiff salvors recovered property and stored it, awaiting the owner’s instructions. They subsequently claimed the expenses they had incurred in storing the goods. The House of Lords, reversing the Court of Appeal, held that the salvors were entitled to restitution for the expenses they had incurred.

[65] Rose, above n 30, 170.

[66] Ibid, 193. A reasonable manner has been expressed as a duty to take such care as a businessman might be reasonably expected to take in similar circumstance.

[58] Ibid. See also Kerr’s suggestion that the formulation of salvage would necessarily change with governmental intervention, especially

[67] See above n 34 and accompanying text.

[68] Rose, above n 30, 169.

[69] Ibid, 171.

[70] Kennedy, above n 5, 332.

[71] Goff and Jones, above n 59, 470.

[72] Rose, above n 30, 178.

[73] Ibid, 171-172, where Rose asserts the fact that payment has been refused to a necessitous intervenor demonstrates a failure to meet the preconditions for relief, rather than an inherent resistance to restitutionary claims of this nature.

[74] See for example, The Tojo Maru, above n 2, 268 where Lord Reid (a judge with a background in Scots law, where the doctrine of negotiorum gestio still exists) denied the existence of a land-based law of salvage and made no mention of a restitutionary analysis of salvage.

[75] The Goring above n 54 (Court of Appeal); [1988] 1 AC 831,855.

[76] The Goring [1988] 1 AC 831, 855 (Lord Brandon).

[77] Ibid, 857.

[78] Peter Birks, An Introduction to the Law of Restitution (1985) 305.

[79] Discussed above n 47 and accompanying text.

[80] Fisher v The Oceanic Grandeur [1972] Lloyd’s Rep. 396, 408. Cf the requirement of the doctrine of negotiorum gestio that the actions of the gestor be in the interests of the owner, and not himself; Rose, above n 30, 170.

[81] The Henry Ewbank, above n 43.

[82] See above discussion at above n 50.

[83] Non-contractual salvage claims do still occur; in its 1984 report the CMI estimated that 80% of salvages are performed under a salvage contract, and Lloyds Open Form is by far the most frequently used; above n 17. In Sembawang Salvage Pte Ltd v Shell Todd Oil Services Ltd [1993] 2 NZLR 97 the claim by the plaintiffs was for non-contractual salvage.

[84] Council of Lloyds Standard Form of Salvage Agreement: ‘No Cure, No Pay’, 1 September 2000 (LOF 2000). General reference to the various versions of the Form shall be referred to by ‘Lloyds Open Form’. See also Gaskell, above n 44, 14.

[85] Ibid.

[86] Ibid, 15.

[87] Edgar Gold, ‘Maritime Salvage: Towards a New Regime’ (1989) 20 Journal of Maritime Law and Commerce 4, 487, 488. 88 LOF 2000, above n 84, Clause I.

[89] See for example the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, opened for signature 10 June 1958 (entered into force 7 July 1959), to which most of the developed world are signatories, which requires courts in signatory states to stay proceedings to allow arbitral proceedings to be conducted.

[90] Arbitration Act 1996 (UK), s. 7.

[91] This was the case in both The Unique Mariner (No. 2) above n 27, and The Tojo Maru, above n 2. In both cases the matter was referred back to arbitration for final consideration and award.

[92] Gold, above n 87, 488.

[93] Many writers have criticised the lack of publication of Lloyd’s arbitral awards on this basis; see Hill, above n 28, 337, and Justice Richard Cooper, ‘Between a Rock and a Hard Place: Illegitimate Pressure in Commercial Negotiations’ (1997) 71 Australian Law Journal 686, 690.

[94] This is not to say the terms of the contract are irrelevant from the enquiry; far from it, but a common law court will not require evidence of substantive unfairness to hold that duress or undue influence exists; see Rick Bigwood, ‘Conscience and the Liberal Conception of Contract: Observing Basic Distinctions (Part II)’ (2000) 16 Journal of Comparative Law 191.

[95] Hill has denied that such agreements should be referred to as contracts, as to do so is to ‘suggest we are in the ‘world of contract’, and not the law of salvage’, Hill, above n 28, 335. 96 In New Zealand, the position is complicated by the Contractual Mistakes Act 1977 (NZ), and the broad discretion conveyed upon the court via s. 7 in providing a remedy for a mistake of the kind covered by the Act. The conclusion that the parties' agreement is not genuine will therefore not always lead to a valid/void dichotomy.

[97] For greater discussion see Bigwood, above n 94, and Rick Bigwood, Exploitative Contracts (2003).

[98] Such as in claims of unconscionable bargains; see Mindy Chen-Wishart, Unconscionable Bargains (1989) Chapter 5.

[99] That is, the doctrines of undue influence, unconscionability and economic duress.

[100] National Westminster Bank Plc v Morgan [1985] UKHL 2; [1985] 1 A.C. 686, 708 (Lord Scarman); see also Dillon J’s comments in Alec Lobb (Garages) Ltd & Ors v Total Oil GB Ltd [1984] EWCA Civ 2; [1985] 1 All ER 303, 313.

[101] Moffat v Moffat [1984] 1 NZLR 600, 608; see also Commercial Bank of Australia v Amadio (1983) 46 ALR 404, 413 (Mason J).

[102] Chen-Wishart, above n 98, 35.

[103] John Cartwright, Unequal Bargaining: A Study of Vitiating Factors in the Formation of Contracts (1991) 170-171. 104 See, eg, Skeate v Beale [1841] EngR 142; (1840) 11 Ad & El 983.

[105] Pao On v Lau Yiu Long [1979] UKPC 2; [1980] AC 614, 626.

[106] Universal Tankships of Monrovia v International Transport Workers Federation (The Universe Sentinel) [1983] 1 AC 366 ( ‘The Universe Sentinel’).

[107] Barton v Armstrong [1976] AC 104, 121.

[108] Lynch v Director of Public Prosecutions of Northern Ireland [1975] UKHL 5; [1975] AC 653, 690-691 (Lord Simon). Note that although the case dealt with a defence of duress in a criminal case, Lord Simon and Lord Wilberforce drew specific analogy with the law of contract. Chitty also states that there is little difference between criminal and civil law on this point; HG Beale (ed.) Chitty on Contracts (Volume 1) (29th ed, 2004) 510.

[109] The Universe Sentinel, above n 106, 399.

[110] Ibid, 399-400.

[111] Goff and Jones, above n 59, 318.

[112] Ibid, 399. See also A-G for England and Wales v R CA 298/00, 29 November 2001, para 62 (Tipping J).

[113] The Universe Sentinel, above n 106, 401. The confirmation in The Evia Luck [1992] 2 AC 152 that legal, non-tortious action (in that case, industrial action that was lawful in the country in which it occurred) may nevertheless constitute illegitimate pressure in an economic duress enquiry has attracted some consternation; see for example Richard O’Dair, ‘Restitution on the Grounds of Duress – Handle With Care: The Evia Luck’ (1992) Lloyd’s Maritime and Commercial Law Quarterly 145.

[114] The Evia Luck, above n 113, 165.

[115] Huyton S.A. v Peter Cremer GmbH & Co [1999] Lloyd’s Rep. 620, 636, where Mance J accepted the comments in The Evia Luck, but subsequently appears to have specified a more stringent test than merely ‘a significant cause’.

[116] Bigwood, above n 94, 16.

[117] Barton v Armstrong, above n 107, 121.

[118] Bigwood, above n 94, 12, citing J R Lucas, On Justice (1980), 10.

[119] Goff and Jones, above n 59, 20.

[120] Kennedy, above n 5, 28.

[121] 1989 Salvage Convention, above n 4, Article 19.

[122] The Evia Luck, above n 113, 164-165 (Lord Goff).

[123] This is a broad assertion, meant to characterise the nature of the enquiry and does not take into account the finer details of the doctrines; indeed, attempts to assimilate the three concepts under the single heading have proved to be unsuccessful. Undue influence, for example, cannot be explained or rationalised on the basis of inequality alone; see J Burrows, J Finn and S Todd, Law of Contract in New Zealand (2nd ed 2004) 368; see also Lloyds Bank Ltd v Bundy [1974] EWCA Civ 8; [1975] QB 326, 339 (Lord Denning); National Westminster Bank Plc v Morgan [1985] UKHL 2; [1985] AC 686, 708 (Lord Scarman). 124 The courts have had little difficulty in considering that certain circumstances give rise to practical compulsion; in The Medina the court held that the master of the eponymous steamer was practically compelled to agree to the salvors demands on account of his responsibility for the lives of the 550 passengers aboard; The Medina [1876] UKLawRpPro 58; (1876-77) LR 2 P D 5. See also Cooper, above n 93, 1-2.

[125] The Rialto [1891] 175; Akerblom v Price, Potter, Walker & Co [1881] UKLawRpKQB 103; (1880-81) LR 7 QBD 129; The Medina, above n 124.

[126] The Rialto above n 125, 177.

[127] Akerblom v Price, Potter, Walker & Co, above n 125, 132.

[128] Cooper, above n 93, 688.

[129] Wiswall, above n 36, 58.

[130] Cooper, above n 93, 688.

[131] Ibid.

[132] The Cargo ex Woosung [1866] UKLawRpPro 80; (1876) 1 PD 260, 265.

[133] Akerblom v Price, Potter, Walker & Co, above n 125, 132.

[134] Cooper, above n 93, 689; see also The Altair [1897] UKLawRpPro 10; [1897] P 105, 108. 135 Cooper, above n 93, 694-695.

[136] Fisher v The Oceanic Grandeur, above n 80, 408.

[137] The August Legembre, above n 20.

[138] Ibid, 128-129.

[139] The Vandyck (1882) 5 Asp MLC 17, where the Court of Appeal held that where salvage services are rendered to property in danger, without request or engagement by the recipient of those services, the recipient is nevertheless liable to pay a salvage reward where the vessel is in such circumstances that a prudent man would accept them.

[140] See for example The Kangaroo [1918] P 227, The Pretoria (1920) 5 Lloyd’s Rep 172, 176; see also Kennedy, above n 5, 31-32.

[141] See above n 121 and accompanying text.

[142] See The Homewood (1928) 31 Lloyd’s Rep 336, where the ‘salvors’ where denied the claimed salvage of a vessel that was anchored and unmanned. 143 See the Torrey Canyon Report, 1967 AMC 569, cited in Gold, above n 87, 488.

[144] Ibid, 488-493.

[145] The Tojo Maru, above n 2; see also D R Thomas, ‘Salvorial Negligence and Its Consequences’ (1977) Lloyd’s Maritime and Commercial Law Quarterly 167.

[146] In New Zealand, the 1989 Salvage Convention is part of domestic law by virtue of the Maritime Transport Act 1994 (NZ), Part XVII. Its operation was finally brought into effect by the requisite Order in Council on 16 October 2003. Part XVII incorporates the English text of the 1989 Salvage Convention (which is authoritative; Article 34, above n 4) into NZ domestic via Schedule 6 of the Act. For further information, see David, above n 1.

[147] Gaskell, above n 44, 4. Note that the Lloyd’s Open Form 1990 only incorporated certain Articles of the Convention, while the 1995 version incorporates the Convention as a whole; Richard Shaw, ‘The 1989 Salvage Convention and English Law’ (1996) Lloyd’s Maritime and Commercial Law Quarterly 202, 202-203.

[148] 1989 Salvage Convention, above n 4, Article 7.

[149] Kennedy, above n 5, 442

[150] Ibid.

[151] 1910 Salvage Convention, above n 15, Art 7.

[152] Brice, above n 5, 373.

[153] Kennedy, above n 5, 442.

[154] Ibid.

[155] Kennedy argues that the proper reading is that the terms should be judged at the outset of the contract, as inequitability is a different enquiry from the unfair operation of contractual terms; ibid, 444.

[156] Some writers see this provision as more favourable to salvors, who, being ‘eternal optimists’ are more likely to underestimate a job than to demand an excessive price, a somewhat different viewpoint to the operation of Article 7; see Donald A Kerr, ‘The 1989 Salvage Convention: Expediency or Equity?’ (1989) 20 Journal of Maritime Law and Commerce 4, 505, 511.

[157] Kennedy, above n 5, 443.

[158] Gaskell, above n 44, 14. 159 Clift and Gay, above n 11, 1369.

[160] Since by Clause D of the LOF 2000, above n 84, the contractor's services ‘shall be rendered and accepted as salvage services’, to agree to the use of Lloyd’s Open Form has the effect of invoking salvage law and the 1989 Salvage Convention.

[161] Gaskell, above n 44, 14. Gaskell also raises arguments against this contention, on the basis that the Lloyd’s Open Forum is internationally recognised, arbitration is commonplace in the shipping industry, and the convenience of the salvor should be a major influence on the court (in accordance with the policy of encouraging salvors).

[162] Ibid.

[163] The William Lushington (1850) 7 Notes on Cases 361, 362-363.

[164] Admiralty Commissioner v Valverda, above n 8, 202 (Lord Roche). 165 Kennedy, above n 5, 346.

[166] Admiralty Commissioner v Valvadera, above n 8, 197 (Lord Maughan), 202-203 (Lord Roche).

[167] The William Lushington, above n 163, 363.

[168] See later in the paper; see also The Rialto et al, above at n 125.

[169] Hill, above n 28, 335.

[170] The Tojo Maru, above n 2, 291.

[171] Ibid, 292.

[172] Ibid; see above n 18.

[173] Ibid, 292.

[174] Ibid.

[175] That is, the contractor will be liable for a sum that will put the other party in the same position that they would be in had the contract not been breached; ibid, 293.

[176] Ibid.

[177] Ibid, 293-294.

[178] Ibid, 294. Note that newer versions of Lloyd’s Open Form (e.g. the 1995 and 2000 versions) no longer include this clause, and the amount of salvage is now left entirely to a subsequent arbitration; Brice, above n 5, 539-549.

[179] The Tojo Maru, above n 2, 294.

[180] The Unique Mariner (No. 2) above n 27, 49-50.

[181] Ibid, 50.

[182] Ibid.

[183] Ibid, 51. Note that Brandon J’s comments were not confined to Lloyd’s Open Form, but apply to express salvage contracts made generally; this is clear from his later comments regarding The Valsesia (1926) 26 Lloyd’s Rep 22, 53.

[184] Presumably, here his Honour is referring to the fact that under Lloyd’s Open Form, a salvee is precluded from claiming the services were not in fact salvage services, and thereby avoiding salvage rules; without a salvage agreement, the owner of salved goods may dispute this, although a court may nevertheless hold that the services were in the nature of salvage, and reward is due. 185 The Unique Mariner (No. 2) above n 27, 51.

[186] Ibid, 52.

[187] Ibid, 53. This finding is consistent with the principles of damages for breach of contract; a party must choose the heads of damages under which they claim, but cannot claim both compensation and restitution, see Burrows, Finn and Todd, above n 124,746-748. This analysis reduces the agreement between the parties to the nature of a common law contract, and as the judgment makes clear, rejects the notion of a ‘salvage fund’, which would take account of the fact that the salvees had already paid the successful salvors for their services.

[188] The Tojo Maru, above n 2, 293.

[189] Ibid.

[190] Brice, above n 5, 359-360.

[191] Kennedy, above n 5, 415

[192] This view is supported by the views of Cooper J, above n 93, 689.

[193] Gold, above n 87, 487.

[194] As an aside, Admiralty cases often involve colourful factual situations that offer the onlooker a glimpse of the inner workings of the maritime salvage industry. See for example The Unique Mariner (No. 1), above n 11, 443-445, where Brandon J relates the code system employed by a salvage company to protect its salvage ‘prize’ from other enterprising salvors.

[195] See, eg, ibid where the case concerned the replacement of one salvor with another, and The Altair, above n 134, where the stricken vessel was rescued by four separate salvage operators at once.

[196] Lloyd’s Open Form 1995, above n 147, Clause 1(f).

[197] Lloyd’s Open Form 2000, above n 84, Clause J.

[198] This possibility is considered below, at C.

[199] See above at n 17 and accompanying discussion.

[200] In New Zealand, examples of such legislation include the New Zealand Credit Contracts and Consumer Finance Act 2003 (NZ), the Fair Trading Act 1986 (NZ) and the Consumer Guarantees Act 1993 (NZ).

[201] Gold, above n 87, 498.

[202] 1989 Salvage Convention, above n 4, Article 6(3).

[203] See above n 147 and accompanying text.

[204] Ibid.

[205] For instance, in the developing area of unconscionability as a legal concept capable of vitiating consent, disadvantageous terms are considered indicative of a defect in the capacity of one of the parties to consent to the contract; see Nicholas Bamforth, ‘Unconscionability as a Vitiating Factor’ (1995) Lloyd’s Maritime and Commercial Law Quarterly 538.

[206] See for example The Medina, above n 125, where the court awarded 1800 l instead of the 4000 l stipulated in the agreement. 207 Gaskell, above n 44, 13.

[208] See the provisions of the Lloyd’s Open Form 1995, discussed above n 196.

[209] See further Kennedy, above n 5, 415.

[210] Unique Mariner (No. 1), above n 11, 444.

[211] Ibid, 452. 212 The Kingalock (1854) 1 Spinks E & A 263, 265.

[213] Unique Mariner (No. 1), above n 11, 454-455.

[214] Ibid.

[215] Ibid, 454.

[216] Ibid.

[217] See generally Burrows, Finn and Todd, above n 124, Chapters 10 and 11.

[218] The Unique Mariner (No.1), above n 11, 455. 219 CMI Report 1984, above n 17, 16-17.

[220] Kennedy, above n 5, 418; see also 1989 Salvage Convention, above n 4, Article 12.

[221] Kennedy, above n 5, 418.

[222] Brice, above n 5, 326.

[223] Ibid, 354-356.

[224] 1989 Salvage Convention, above n 4, Article 6(2), which modifies general Admiralty law and gives the owner or master the power to enter into a salvage agreement, binding on both the owner of the ship and the cargo, without having to rely on common law concepts of implied authority, agency or necessity: see Brice, above n 5, 323.

[225] Kennedy, above n 5, 418.

[226] Ibid.

[227] The Unique Mariner (No.1), above n 11, 455.

[228] CMI Report, above n 17, 14. 229 Cooper, above n 93, 694.

[230] Gaskell, above n 14, 348.

[231] The Altair, above n 133, 108.