44. Dawson Line Ltd v Aktiengesellschaft “Adler” Fuer Chemische Industrie of Berlin (The “Lady Brenda”) 40 Ll.L Rep 237; (1931) 41 Li.L 75

Voyage Charterparty – Bill of Lading – charterers liable for supply of incorrect information to Master

The facts

Coal tar pitch was shipped from a port on the White Sea to Ghent under a voyage charterparty giving the charterers who were also the receivers the option to pay a fixed rate on the weighed cargo as landed or to pay the fixed rate on the weight stipulated in the bill of lading less 2% in lieu of weighing. The discount was given by the shipowner in return for time saved by not weighing.

The Master suspected that the weight reflected on the bill of lading presented by the charterers for signature was too low. On outturn the cargo was weighed and the master’s suspicions confirmed.

The charterers insisted on paying freight on the amended weight less 2% notwithstanding the cargo had been weighed.

Findings

The court of first instance (Rowlatt J) found that on, a proper interpretation of the contract, the charterers were entitled to deduct the 2% and that the shipowners were only entitled to the full rate where the charterers had exercised their option to weigh the cargo. The court found that the weighing of the goods at the shipowner’s option did not activate the operation of the clause in question.

The Court of Appeal (Scrutton, Greer and Slesser LJJ) found that on the authority of two earlier decisions, Elder, Dempster and Co v Dunn and Kruger & Co v Moel Tryvan Ship Company that the charterers were liable for incorrect information supplied to the master. As the shipowners had suffered a loss due to the incorrect information supplied, the charterers were held liable to indemnify the shipowners.

According to Scrutton LJ the two authorities mentioned proceeded on the basis that the indemnity flowed either from the terms of the charterparty or simply from the fact of the supply of the incorrect information.

Slesser LJ agreed with Greer LJ.

Commentary

It is doubtful whether this is a case of charterers’ indemnity. Because the charterers were also the receivers, the shipowners suffered no loss. The cargo was weighed and the correct freight was determinable and payable in terms of the contract. Which party asked for the weighing should have been of no consequence.

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