166. Reardon Smith Line Ltd V Australian Wheat Board (The “Houston City”) [1953] 1 Lloyd’s Rep 131; [1954] 2 Lloyd’s Rep 148

Safe port – berth temporarily unsafe – charterers liable

The facts

The vessel was chartered on the Australian Grain Charter for a voyage from one or two safe ports, Western Australia to load a full cargo of wheat in bulk destined for Europe in the Antwerp – Hamburg range.

The vessel was ordered to load at a berth in Geraldton which was temporarily unsafe by reason of the temporary absence of a hauling off buoy and a waling piece against the pier.

The berth in question was exposed to strong winds.

The vessel began to load in fair weather but prior to completion of loading, a northerly gale arose which caused the vessel to range against the pier. The combined absence of the hauling off buoy and the waling piece, meant to serve as a buffer, resulted in severe damage.

The owners claimed against the charterers.

Findings

Wolff J in the Supreme Court of Western Australia found that the port was unsafe and that by nominating an unsafe port, the charterers were guilty of a breach of contract.

The High Court of Australia (per Webb and Taylor JJ – Dixon CJ dissenting) overturned the decision.

The majority relying on such cases as West Ltd v Wrights (Colchester) Ltd and the Pass of Leny found no obligation on the charterers to nominate a safe berth within the harbour.

Dixon CJ preferred to follow the reasoning of Devlin J in Grace (GW) and Co Ltd v General Steam Navigation Company Ltd and found that the very giving of instructions to proceed to an unsafe port constituted a breach on the part of the charterers.

The Privy Council (speech by Lord Somerville of Harrow) restored the judgement of the court of first instance.

Commentary

Lord Somerville observed that the victim of a breach is entitled to continue with the contract and does not thereby lose his right to damages.

It was accepted that the master was entitled to refuse the orders to proceed to an unsafe port but that compliance did not constitute waiver.

The Privy Council left open the question of liability in the case where the port is safe at the time of nomination but becomes unsafe thereafter.

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