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Weekly Law Reports (ICLR)/1956/Volume 1/DIRPHYS (OWNERS) v. SOYA (OWNERS). THE SOYA. -
[1956] 1 WLR 714

[1956] 1 WLR 714

DIRPHYS (OWNERS) v. SOYA (OWNERS). THE SOYA.

[COURT OF APPEAL.]

[1953 D. No. 2543.]

1956 May 4, 7.

Lord Evershed M.R., Jenkins and Hodson L.JJ.

Shipping  Collision  Damages for detention  Vessel under charter  Rise in freight market during
detention of vessel  Vessel delayed from trading under enhanced freight rates in subsequent charter 
Measure of damages.

The plaintiffs' vessel Dirphys , while on a voyage to London for loading under a charter dated October 13,
1950, was in collision
[1956] 1 WLR 714 at 715
with the defendants' vessel Soya . The Dirphys was diverted to Rotterdam for repairs, which occupied a
period of 20 days. While the Dirphys was undergoing repairs, the plaintiffs fixed the vessel under a charter
dated January 18, 1951, for a subsequent voyage at a much enhanced freight rate, owing to a sharp rise in
the freight market. But for the collision, the Dirphys would have completed the earlier charter and entered
upon the subsequent charter 20 days earlier. The net rate of profit under the charter dated October 13, 1950,
was £144 3s. 10d. per day, and that under the subsequent charter was £819 17s. 4d. On the question of
the measure of damages to be awarded to the plaintiffs in respect of the detention of their vessel during the
period of repair:

Held , that in assessing damages for the detention of a vessel arising from a collision at sea, there is no rigid
and unalterable rule of practice or convenience limiting the measure of such damages to the profit which, but
for the collision, would have been earned under a charter existing at the time of detention; but that in the
present case the alleged loss, arising from delay in embarking on a subsequent and more profitable period of
trading was not proved with reasonable certainty and was too speculative and remote to be considered a
consequence in law of the detention; accordingly the proper measure of damages was the equivalent of 20
days' profit at the rate of £144 3s. 10d. per day.

The Argentino (1888) 13 P.D. 191; affd. sub nom. Gracie (Owners) v. Argentino (Owners) (1889) 14
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App.Cas. 519 applied.

Decision of Willmer J. [1955] 1 W.L.R. 1246; [1955] 3 All E.R. 621; [1955] 2 Lloyd's Rep. 376 affirmed.

APPEAL from Willmer J.1

The plaintiffs' vessel Dirphys was in collision with the defendants' vessel Soya on December 30,
1950. By an agreement of terms of settlement, the respective claims of the vessels were referred to
the Admiralty registrar. At the time of the collision, the Dirphys was under a charter whereby a net
profit of £144 3s. 10d. was earned per day. Owing to a sharp rise in the freight market during the
period of detention, the net profit earned by the Dirphys in the subsequent charter was £819 17s.
4d. per day.

Before the registrar and the judge, the plaintiffs claimed damages for 20 days' detention at the rate
of £819 17s. 4d. per day, contending that, as a result of the collision, they had been delayed by 20
days from engaging their vessel upon a voyage at the profitable rates existing at the beginning of
1951 in the Far East; or alternatively, 20 days' detention at a rate of profit arrived at by averaging
previous and subsequent voyages. The defendants contended that the rate should be that under
the charter dated October 13, 1950, or alternatively, the mean between that rate and the rate of the
voyage previous to the collision, being £203 10s. 9d. per day.

Willmer J. held, confirming the registrar's report, that the loss of profits arising from the detention of
a vessel was a question of fact to be proved with reasonable certainty, and was not a matter on
which the court was entitled to speculate. A
[1956] 1 WLR 714 at 716
claim for loss of profits at the enhanced rate was not proved with reasonable certainty, and was
thus a speculation and too remote to be considered a consequence in law of the detention. An
average of previous and subsequent voyages should not be resorted to, since it had not been
proved that, but for the collision, the plaintiffs would have had any use of their vessel during the
period of detention, other than that under the charter, dated October 30, 1950. Accordingly, the
measure of the plaintiffs' damages for loss of profits was the equivalent of 20 days' detention at the
rate of £144 3s. 10d. per day.

The plaintiffs appealed.

K. S. Carpmael Q.C. and R. F. Stone for the appellants.

H. V. Brandon and J. F. Willmer for the respondents.

The following cases and authorities were cited in argument: Roscoe's Measure of Damages in Maritime
Collisions, 3rd ed., pp. 80 and 99; The Argentino2; The Ikala3; Admiralty Commissioners v. S.S. Valeria.4

LORD EVERSHED M.R. These are proceedings for the assessment of damages to the plaintiff appellants'
vessel Dirphys , arising out of a collision between that steamship and the respondents' motor vessel Soya ,
which occurred at the entrance of the Baltic sea on December 30, 1950. It has now been agreed that both
vessels were to blame for the collision, and the proportions have also been agreed  30 per cent. to the
Dirphys , 70 per cent. to the Soya . When the collision occured, the Dirphys was proceeding in ballast to
London, being at the time subject to a voyage charter (which I will hereafter refer to as charter No. 3), dated
October 13, 1950. By the terms of that charter, the Dirphys was to proceed to London, and there load a
cargo of sugar for carriage to the Indian port of Bombay. The result of the collision was that the Dirphys had
to be diverted to the port of Rotterdam and she was there detained for a period, which again has been
agreed at 20 days, for the purpose of repairs, the 20 days being the first 20 days of January, 1951. The
Dirphys was, however, able to carry out her obligations under charter No. 3 and she was able to earn, and
she earned, the full freight of over £8,000 due to her in respect thereof. So far, therefore, as profits were
derived from charter No. 3, no damage or loss whatever was suffered by the Dirphys as a result of the
collision; but she arrived at Bombay on March 21, 1951, or thereabouts, later than she would have done had
it not been for the collision  though how much later is a matter I will discuss presently. At that time (that is
to say, from the month of December, 1950) there was a marked and remarkable rise in freights, whether as a
result of the Korean war or otherwise, especially in Far Eastern waters. On January 18, 1951, the agents for
the owners of the Dirphys made a new fixture for
[1956] 1 WLR 714 at 717
which the Dirphys was later nominated. That also was a voyage charter, and I will refer to it as charter No.
4, the obligation thereunder being to load, at the Malayan port of Dungun, a cargo of metal or metal ore and
bake it to a safe port in Japan. The freight under charter No. 4, expressed in the terms of the daily rate of
profit while engaged on the charter, was something like six times the daily rate earned under charter No. 3.
By the terms of charter No. 4, the ship was expressed to be expected ready to load about March 17. The
Dirphys was in fact ready to load some 14 days later or thereabouts; but, as in the case of charter No. 3,
again the full benefit, in terms of freight, of charter No. 4 was reaped by the owners. Therefore, again, no
damage from the collision can be attributable to any loss in the earnings of the Dirphys under charter No. 4.
According to the evidence, two more charters in immediate succession followed charter No. 4, and again
there was no loss attributable to the collision in respect of either of these two last charters. But, as I have
said, the ship spent 20 days at the port of Rotterdam, and therefore arrived later than she would, or could
otherwise have done, in these very profitable Far Eastern waters.

The case of the appellants before us, has been that the damage suffered should be treated as the loss of 20
days' trading in these profitable waters, at a rate equivalent to the rate of freight earned under charter No. 4,
or alternatively, at an average, taking all the charters which I have mentioned together. As was said in the
courts below, the appellants' case was attractively simple. On the other side it was said that since no loss
was suffered at all in respect of any of the charters which were proved in evidence, the rule (a rule of practice
and convenience) is that the loss ought to be estimated by multiplying the 20 days of detention by a daily
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rate of profit, based on the freight recoverable under charter No. 3, which was in fact the charter operative at
the date of the collision and at the date when the repairs were being done at the port of Rotterdam. Put more
specifically and arithmetically, what is said is: Had not the collision occurred, 62 days would have been
occupied in the performance of charter No. 3 instead of 82, and the freight recoverable under charter No. 3
being divided by 62 gives you a figure of approximately £144 per day. The damage, say the respondents,
should therefore be arrived at, according to this rule of convenience or practice, by multiplying the sum of
£144 odd by 20.

The rule of practice or convenience is said to be based on what fell from Bowen L.J. in The Argentino5 in this
court, and also from Lord Herschell in the same case in the House of Lords. Alternatively, it is said that any
loss which the owners of this vessel suffered is a matter of mere speculation; not a penny piece was lost in
respect of any of the charters 3 to 6 inclusive which I have mentioned, and to see what profit (if any) was
lost, one would have at least to go on examining the commercial history of
[1956] 1 WLR 714 at 718
the ship till the end of her life, a plainly impossible task. It is therefore said, in the terms of Willmer J.'s
judgment that it is at least doubtful whether really any damage was suffered at all. The judge said6:

It may very well be true that, but for the collision, the Dirphys would have started her profitable
Far Eastern trading, if I may so describe it, 20 days earlier than in fact she did; but whether in
the long run the plaintiffs would have been any better off has been left, as far as I can follow the
evidence, as a matter of complete speculation. If the plaintiffs could have proved that, because
of those 20 days' detention, they lost the opportunity of a complete voyage at those enhanced
rates, then that would have been a measure of damage which I could well understand. But I do
not know, on the evidence which has been given, what the ultimate outcome of this loss of 20
days may have been. For all that I know, that loss of 20 days may, in fact, have cost the
plaintiffs nothing at all. All the engagements to which the ship was committed were in fact
carried out. There is nothing to show, one way or the other, what would have been the result if
the programme had all been accelerated by 20 days.

Therefore, says Mr. Brandon, you must do the best you can, as in all cases of estimating damage, and it is
certainly not shown that the sum awarded is materially wrong, or based on any wrong principle. He also
says, as a further alternative, that one should resort to some averaging.

I should not myself wish to say that there was, on the special facts of this case, some rigid rule binding us,
and that that rule was laid down for us by what was said in The Argentino.7 The rule in marine collisions is,
as I understand it, the ordinary rule applicable in all cases of estimating damage. In The Argentino Bowen
L.J. said8:

The damages recoverable from a wrongdoer in cases of collision at sea must be measured
according to the ordinary principles of the common law.

It is, I think, important to have in mind what were the facts in The Argentino, having regard to the reliance
placed upon the language used in the case by Bowen L.J. and by Lord Herschell. It is stated briefly in the
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headnote thus:

Previous to a collision between two vessels, the owners of one of them  that is the
Argentino  had made an oral arrangement with a firm of shipbrokers that the vessel upon
the completion of the voyage upon which she was then engaged should go to Antwerp, and
there load a cargo in turn as one of a line of steamers, and proceed by a particular route to the
Black Sea. In consequence of repairs necessitated by the collision, the vessel was not ready to
start for Antwerp so as to load in turn, and, by arrangement, another smaller vessel was
substituted for the injured vessel, the latter vessel  that is the Argentino again  shortly
afterwards taking the place of the substituted vessel on a less remunerative route.

[1956] 1 WLR 714 at 719

It follows, therefore, that the Argentino , as a result of the collision, lost the opportunity (which was, though
not a matter of firm bargain, a matter of virtual certainty) of obtaining a particular profitable venture had she
taken her place in the line at Antwerp. Instead of that, she had to undertake, or did undertake, a less
profitable venture. On the face of it, therefore, the damage suffered was the difference between the greater
profit she would have made had she taken her turn at Antwerp, and the actual profit she made from the less
remunerative venture. The real point in the case was whether, in estimating the damage, it was right (as this
court and the House of Lords said it was not) to pay regard to the actual profit made, not by the Argentino at
all, but by the other smaller vessel which took her place in the line at Antwerp. It is in the light of those facts
that Bowen L.J. used this language9:

It remains, however, still to be considered what is the value at which this loss of employment
 that it, the loss of the Antwerp venture  is to be calculated in the case of a vessel which,
but for the accident, would have been serviceably used by her owner in a particular manner.
This is a difficult matter to calculate, but the difficulty is only, after all, one of fact. Where there
is an actual charterparty such difficulty is reduced to a minimum. Where there is no charterparty
but merely a reasonable certainty of employment, the matter is left more at large.

Then in the House of Lords, in reference to the same facts, Lord Herschell used the language also cited10:

Where no claim is made in respect of loss arising from the owner having been deprived of the
earnings of a voyage which was in contemplation, and the engagement for which had been
secured,  as was not the case in The Argentino  it would be right, and is no doubt the
usual course, to award damages under the name of demurrage in respect of the loss of
earnings which it must reasonably have been anticipated would ensue during the time of
detention. But where such a claim is made as in the present case, the owner cannot, I think, be
allowed in addition, as a separate item, demurrage in respect of the time the vessel was under
repair.
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I venture to think that those observations were not made in reference to facts such as we have here. They
were plainly made in reference to the special facts in The Argentino.11 In this case the facts appear to be
unusual, at any rate to this extent, that, as we were informed, there is no case in the books where facts
comparable to the facts in this case have ever come before the court. But if that rule were a rigid unalterable
rule, it would appear to me at any rate that somewhat strange results might follow. Let it be supposed, for
example, that charter No. 3 was a charter under which the owners were obtaining an altogether unusual and
extravagant profit, and that at the time freights generally had greatly fallen, and that no similar profit could
[1956] 1 WLR 714 at 720
possibly be expected from any other fixture. It would seem strange in such a case if the damages were 20
multiplied by the extravagant daily profit; and Mr. Brandon, as I understood him, when I put the question,
somewhat resiled from suggesting that such a result would follow, though the logic of the rule would appear
to produce that result. Equally it would appear that if, by some mischance, charter No. 3 was not profitable at
all, it would seem contrary to the ordinary rules of common law to say that therefore there was necessarily no
loss of profit at all owing to the collision. But equally I cannot myself accept Mr. Carpmael's simple and
attractive suggested answer, for that seems to me to be no less artificial. It supposes, so far as I can see,
that for the 20 days, which I assume have been lost, the ship would have been employed in some additional
or different fixture at the rate exactly applicable to charter No. 4, and that everything else for ever after in her
life would have been exactly the same as it is. It seems to me that, even if allowance is made for
contingencies, that supposition is not in accordance with the facts or the evidence.

What, indeed, are the facts? Mr. Brandon says that the judge below and the registrar did not find or intend to
find that 20 days were in fact lost and that the ship did arrive 20 days late at Dungun. I cannot for myself
agree with that submission. I feel, for my own part, no doubt on the evidence that the judges did find and
were entitled to find, that if it had not been for the accident, the ship could and would if necessary have
arrived at Bombay and at Dungun 20 days earlier than she did in fact arrive; but it is here that the difficulty
seems to me to start. One does not, in this matter of making fixtures for ships, make an arrangement on
Monday for the vessel to do some work on the following day, on Tuesday. It was no doubt clear in January
1951 that the Far Eastern market was going to be a very profitable market. It is clear also from the evidence
that, when the plaintiffs' agent entered into charter No. 4 on January 18 for the Dungun market, he was doing
what he would in any case have done, whether or not there had been a collision. He waited until the proper
time for the opening of the March Dungun market  that is, the proper time for making fixtures for voyages
from Dungun in March. It is to be noted that, according to the terms of charter No. 4, the ship (which was
later, on February 1, nominated as the Dirphys ) was expressed to be expected ready for loading about
March 17. When the contract was made on January 18, the repairs at Rotterdam must have been very nearly
completed and, as I have already said, the nomination took place some 14 days later, on February 1. It is
not, therefore, to my mind, proved with reasonable certainty that, apart from the collision, this contract of
January 18, 1951, would have been different as to loading date or indeed in any other material respect; and,
even if the Dirphys could and would have loaded on or about March 10 or 11 at Dungun instead of March
31, it is not proved to my satisfaction
[1956] 1 WLR 714 at 721
what the difference in total profits would have been under charters Nos. 4, 5 and 6 and all that followed in the
end of all. I refer again to the language of Willmer J. which I have already read, though I do not take time by
repeating it.

In so speculative a matter, what is the court's duty?  to do, as it would in any case of damages arising at
common law, the best it can. It may well be, as Willmer J. said, that really no damages were proved
satisfactorily at all. But there is no cross-appeal before us, and it is sufficient for me to say that in such
circumstances, I am not satisfied that there was anything wrong or unfair to the plaintiffs in proceeding
arithmetically as the registrar and the judge did; that is to say, in giving to the plaintiffs the full benefit for
every day of the detention, namely, 20 days, and then applying to that period of time a figure of profit, which
was derived from the figure of profit which was being earned by the ship at the time when the accident
occurred, and when in fact the ship was being detained. It might be that a round figure rather more or rather
less could fairly have been arrived at by a tribunal of fact; but I cannot think, on general principles which
apply when this court is asked to consider matters of damages, that there is anything in the figure which was
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arrived at, or in the approach to that figure and the method adopted, which was wrong, or that we should
interfere with that figure.

I would therefore dismiss the appeal.

JENKINS L.J. I agree. This is an appeal from Willmer J., dated November 7, 1955, dismissing a motion in
objection to a decision of the registrar dated August 24, 1955.

The action arose out of a collision which took place in the entrance to the Baltic on December 30, 1950,
between the appellant plaintiffs' steamship Dirphys and the respondent defendants' steamship Soya .
Liability was settled by agreement as resting as to 30 per cent. on the Dirphys and 70 per cent. on the Soya
.

The Dirphys was diverted to Rotterdam, where she arrived on January 1, 1951, and was there laid up for
19¾ days (treated for the purpose of the case as 20 days), undergoing repairs which were completed on
January 20, 1951. The Dirphys was thus out of action for 20 days; and the sole question in the appeal
concerns the figure at which her loss of profit due to this period of immobilization should be assessed.

At the time of the collision the Dirphys was on her way to London in ballast, under a charterparty, dated
October 13, 1950, which required her to proceed to London and there load a cargo of sugar for carriage to
Bombay. Notwithstanding the 20 days' delay, the Dirphys reached London just in time to prevent
cancellation of this charterparty, which was duly performed, but which took 20 days longer to perform than it
would have taken if there had been no collision and consequent immobilization of the vessel for that period.
The collision thus did not cause the
[1956] 1 WLR 714 at 722
Dirphys to lose the benefit of the charterparty of October 13, 1950, save in so far as it may be said to have
been rendered less beneficial by the addition to the time taken to perform it of the 20 days' immobilization
which the collision imposed. Nor was the Dirphys left idle by reason of the postponement for 20 days of her
arrival at Bombay, for immediately after discharging her cargo at that port, she set off again under a
charterparty concluded on January 18, 1951, for the carriage of iron ore from Dungun in Malaya to a port in
Japan.

On the facts as I have so far stated them, it would seem that prima facie, if the Dirphys suffered any loss of
profit from the 20 days' delay due to the collision, it could amount to no more than 20 times the daily rate of
net profit (agreed at £144 3s. 10d. ) which the charterparty of October 13, 1950, would have produced, if the
voyage under it had been performed in the normal time (agreed at 62 days) instead of the 82 days actually
taken; for, if the collision had not taken place, the Dirphys would during the 20 days in fact spent on repairs
have been proceeding on her voyage to Bombay and earning a net daily profit at that rate. On this basis, the
damages properly allowable for loss of profit due to the collision amount approximately to £2,884, and that
was the sum awarded by the registrar and approved by the judge.

Mr. Carpmael, for the plaintiffs, contends that this figure of £2,884 is very wide of the mark, and that the sum
properly allowable in respect of loss of profit, which he originally put at £17,009, is, according to the revised
calculation he invited us to adopt, of the order of £16,400, though he would, I think, be prepared to concede
a reasonable reduction for contingencies.

This remarkable divergence is due to an extraordinary rise in freight rates for voyages to and from the Far
East, which took place from December, 1950, onwards and reached its peak in May, 1951. Figures issued by
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the Chamber of Shipping of the United Kingdom, taking the rates in 1948 as equal to 100, show in 1950,
72.8 for January, 95.8 for October, 97.6 for November and 115.7 for December; and in 1951, 151.9 for
January, rising to 203.8 for May, with an intermediate drop from 180.6 for March to 176.8 for April. After May,
1951, there was (with certain fluctuations) a downward trend to 168.5 in December of that year. The state of
the market is well illustrated by the fact that, as compared with the £144 3s. 10d. net daily profit yielded
(apart from the 20 days' delay) by the charterparty of October 13, 1950, the charterparty of January 18, 1951,
showed a net daily profit of no less than £819 17s. 4d. The next two engagements, a voyage charter, dated
March 22, 1951, and a time charter, dated June 14, 1951, were even more profitable, showing net daily
profits of £892 1s. 9d. and £830 19s. 5d. respectively.

Mr. Carpmael submits that, in these circumstances, the £144 3s. 10d. net daily profit is not the right starting
figure for the calculation of damages under this head, and that the figure
[1956] 1 WLR 714 at 723
of £819 17s. 4d. , being the daily rate of net profit under the charterparty of January 18, 1951, should be
taken. That figure multiplied by 20 gives as the loss of profit for the 20 days' delay a total of approximately
£16,400, and Mr. Carpmael claims on this basis.

For the principles to be applied in the assessment of damages in a case of this sort we were referred to the
well-known cases of The Argentino12 and The Ikala.13

From The Argentino14 there was cited to us the following celebrated passage in the judgment of Bowen
L.J.15:

With this single modification or exception, which is one that applies only to cases of breach of
contract, the English law only permits the recovery of such damages as are produced
immediately and naturally by the act complained of.

A collision at sea caused by the negligence of an offending vessel is a mere tort, and we have
only therefore to consider what has been in the particular case its direct and natural
consequence. This consequence (in the case of an innocent ship which is disabled by an
accident) is that its owner loses for a time the use which he otherwise would have had of his
vessel. There is no difference in principle between such a loss and the loss which the owner of
a serviceable threshing-machine suffers from an injury which incapacitates the machine, or the
loss which a workman suffers who is prevented from earning money by the wrongful detention
of plant which cannot at once be replaced. A ship is a thing by the use of which money may be
ordinarily earned, and the only question in case of a collision seems to me to be, what is the
use which the shipowner would, but for the accident, have had of his ship, and what (excluding
the element of uncertain and speculative and special profits) the shipowner, but for the
accident, would have earned by the use of her. It is on this principle alone that it is habitual to
allow in ordinary cases damages for the time during which the vessel is laid up under repair in
addition to the cost of the repairs themselves. But this is merely an application of the general
principle, and is not the measure in all cases of the loss. It might conceivably, upon the one
hand, be the fact that the damaged ship would not and could not have earned anything at all
while laid up for repairs, though such a case must necessarily be exceptional. In such
circumstances nothing ought to be allowed for demurrage. Upon the other hand the direct
consequence of the accident might be that the injured vessel was necessarily thrown out of her
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employment, not merely during the period of repair, but for a longer period still. In such a case
the loss could not properly be measured by the time taken in repairs alone.

From the same case in the House of Lords there was cited
[1956] 1 WLR 714 at 724
to us the following passage in the speech of Lord Herschell16:

I think that damages which flow directly and naturally, or in the ordinary course of things, from
the wrongful act, cannot be regarded as too remote. The loss of the use of a vessel and of the
earnings which would ordinarily be derived from its use during the time it is under repair, and
therefore not available for trading purposes, is certainly damage which directly and naturally
flows from a collision. But, further than this, I agree with the court below that the damage is not
necessarily limited to the money which could have been earned during the time the vessel was
actually under repair. It does not appear to me to be out of the ordinary course of things that a
steamship, whilst prosecuting her voyage, should have secured employment for another
adventure. And if at the time of a collision the damaged vessel had obtained such an
engagement for an ordinary maritime adventure, the loss of the fair and ordinary earnings of
such a vessel on such an adventure appear to me to be the direct and natural consequence of
the collision.

Finally, we were referred to the following passage from Lord Sumner's speech in The Ikala17:

I only wish to say two things. If, as was the case at the previous hearing, the appellants' case
is to be that the delay upset the general current of their trade, which had to be maintained in
spite of it, I think that the extent and cost of this upset must be proved and must be causally
connected with the collision in accordance with the ordinary rules of law as to damage. A ship's
day is not like a unit of currency, always good for so many shillings. It has to be proved that, in
doing the shipowner the wrong of laying his ship idle at the time in question, work, which she
would otherwise have done during the time, went undone to his measurable loss or was only
done by resorting to other expedients at a measurable outlay.

Mr. Carpmael submits that his claim is maintainable in accordance with these principles, and he puts his
case in this way: As a direct and natural consequence of the collision, the Dirphys was laid up for repairs for
20 days, and accordingly arrived at Bombay 20 days later than she would have done if there had been no
collision. Having arrived at Bombay 20 days late, the Dirphys , again as a direct and natural consequence of
the collision, left Bombay in pursuance of the charterparty of January 18, 1951, and arrived at Dungun, 20
days later than she would have done if there had been no collision. Thus, according to Mr. Carpmael's
submission, the Dirphys was, as a direct and natural consequence of the collision, 20 days late in beginning
to earn the highly remunerative freight rates, which the general rise in rates in the Far Eastern trade made it
possible to secure for charterparties negotiated in and after January 1951, and which the plaintiffs had in fact
secured for the charterparty of January 18,
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[1956] 1 WLR 714 at 725

Mr. Carpmael rightly observes that the measure of damages in a case of this sort is not necessarily confined
to what Bowen L.J. called18 the use which the shipowner would, but for the accident, have had of his ship
during the actual period for which the ship is detained for repairs, but may also include (for example) the loss
of earnings under any engagement for another voyage which the ship had secured at the time of the
collision, but was thereby prevented from performing: see per Lord Herschell,19 where he observed that the
loss of such earnings appeared to him to be the direct and natural consequence of the collision.

In the present case, the Dirphys lost no actual engagement existing at the time of the collision under which,
but for the collision, she would have been employed at the daily rate of profit claimed by Mr. Carpmael. But in
his submission the state of the market was such that, if the Dirphys had arrived at, and consequently left
Bombay 20 days earlier, it is for practical purposes certain that during the boom period, if I may so describe
it, she would have been employed at boom rates of remuneration for 20 days longer than she was in fact so
employed. It is not clear to me on the evidence that the Dirphys did in fact sustain any such loss, or, in other
words, that she did in fact profit less from the boom, to the extent of the equivalent of 20 days' employment
at upwards of £819 net profit per day, than she would have done if she hall arrived in Bombay 20 days
earlier. The charterparty of January 18, 1951, with its net daily profit of £819 17s. 4d. was, as already
mentioned, immediately succeeded by that of March 22, 1951, with its net daily profit of £892 1s. 9d. , and
that of March 22, 1951, was immediately succeeded by that of June 14, 1951, with its net daily profit of £830
19s. 5d. , which kept the vessel employed down to October 26, 1951. There is no evidence as to any
subsequent engagements, but it is difficult to discern any less so far. If the terms of the last engagement, of
which we have evidence had been negotiated on May 25, 1951, instead of June 14, 1951, it may be that
even better terms could have been secured. If that engagement had been completed on October 6, 1951,
instead of October 26, 1951, and the terms of the next following engagement had been agreed on a
correspondingly earlier date, it may be that such next following engagement would have been on more
favourable terms than those in fact obtained, whatever they may have been. But the evidence as it stands
seems to me to fall far short
[1956] 1 WLR 714 at 726
of showing that, during the period to which it extends, the Dirphys earned less by a sum equivalent to the
profit of 20 days' employment at upwards of £819 per day, than she would have done if she had arrived in
Bombay 20 days earlier; and I would point out that the charters brought to the notice of the court carry the
matter down to October 26, 1951, which was several months after the peak of the boom period. Moreover, I
cannot relate the loss alleged by Mr. Carpmael to any particular period of 20 days. It cannot be said that this
loss was sustained during the period of 20 days following the date on which the Dirphys would, but for the
collision, have arrived at Bombay; for the charterparty of January 18, 1951, had already been fixed, and it is
not suggested that, if its performance had been begun 20 days earlier, it would have produced a greater
profit. The only effect of the 20 days' postponement of the arrival of the Dirphys at Bombay thus appears to
have been to postpone by 20 days the realization of the profit on the charterparty of January 18, 1951.
Assuming in Mr. Carpmael's favour that there was a corresponding and consequential postponement of the
performance of each subsequent engagement, I cannot see that the plaintiffs could be said to have thereby
sustained the loss he claims on their behalf, or indeed any loss in the event of freight rates remaining
constant or continuing to rise. In the event of freight rates falling, a stage might be reached at which the
plaintiffs could point to a particular engagement and say: If this engagement had been negotiated 20 days
earlier, we could have had it on better terms. On the other hand, any fall in rates might have been
counteracted by the fixing of the terms of a charterparty for a long voyage while the rates were still high. It is
important to remember that the rate for a given voyage is determined at the date (up to perhaps two months
in advance) on which the terms of the charterparty are fixed, and not at the date when the voyage is begun.
Furthermore, in the event of freights continuing to rise, it might be to the advantage of a shipowner to
postpone for a time the conclusion of a charterparty for a given ship, in the expectation of an improvement in
 Page 11

the terms obtainable. Even if the plaintiffs should be regarded as having made out the loss, in the shape of
curtailment of profit, on which they rely, I do not think it can reasonably be held to be a direct and natural
consequence of the collision. It was the result of an unpredictable fall in the Far Eastern freight market, which
did not make itself felt until after the Dirphys had completed at least three highly remunerative voyages since
her arrival in Bombay. The contrary view, so far as I can see, must result in the postponement for an
indefinite period, perhaps to the end of the ship's career, of the point of time at which the loss, if any, due to
the 20 days' detention, could be ascertained, and the ultimate result in terms of profit or loss would
necessarily be influenced or indeed determined by causes and factors wholly independent of the collision.
[1956] 1 WLR 714 at 727
Surveying the position as matters stood on January 20, 1951, when the repairs were completed, would it
have been possible to say that, as a direct and natural consequence of the collision and resulting
immobilization of the Dirphys for repairs, she had lost or was bound to lose the equivalent of 20 days'
employment at a net daily profit of upwards of £819? I do not think so. I think the position then was, that she
might in the end earn more or less than she would have done or the same amount as she would have done
in the way of profit, apart from the delay of 20 days, the ultimate result depending upon the movements of
the market up or down, the freight rates ruling at the dates of any engagements made, and the duration of
any such engagements.

The judge adverted to Bowen L.J.'s exclusion, in the passage I have quoted from his judgment in The
Argentino,20 of the element of uncertain and speculative and special profits and came to the conclusion, as
did the registrar, that the loss of profit claimed by Mr. Carpmael was21 too speculative and too remote to be
taken into consideration as a consequence in law of the detention in respect of which this claim arises. I fully
agree with that view, and am accordingly of opinion that Mr. Carpmael's main argument fails.

A subsidiary point was taken to the effect that the net daily profit lost by the Dirphys during the 20 days'
detention for repairs should be calculated by averaging the results of several voyages, rather than by taking
the £144 3s. 10d. rate of daily profit for the voyage covered by the charterparty of October 13, 1950. The
judge considered and rejected that contention, and I see no more reason for differing from him in his
conclusion on that part of the case than I do for differing from him in his view as to Mr. Carpmael's main
contention.

Accordingly, I would dismiss this appeal.

HODSON L.J. I agree with the judgment of the judge. This appeal concerns only one item of damages,
namely, loss of profit during the period when the Dirphys was undergoing repair. Damages were also
assessed in respect of the cost of running of the ship, but no question arises except upon this one matter,
which is, after all, a matter of fact for the judge to assess, the injured party having to prove what he has lost
by reason of the detention. The judge, I think, directed himself correctly by reference to Bowen L.J.'s
well-known judgment in The Argentino,22 which has already been read, and by reference to the speech of
Lord Herschell in the House of Lords23 in the same case.

The position in this case was that the loss of profit was calculated by the registrar and by the judge by
reference to the
[1956] 1 WLR 714 at 728
profits, which the ship would have earned during the same period of 20 days under the charterparty to which
it was then bound; and I think it is clearly consistent with the authority I have quoted, to limit the damages to
the loss of profit attributable to the particular venture on which the ship was actually engaged for the time
being in this case.

This is said to be a case which presented unusual features because of the remarkable rise in freight, so that
 Page 12

by reason of the delay of 20 days the ship was put behind in getting into the profitable market; but I agree
with the judge that there is an element of speculation in assessing the damages on that footing, for the
reasons which he gave. We have been directed by Bowen L.J.24 to exclude the element of uncertain and
speculative and special profits, and I think that that direction was rightly followed by the judge in confirming
the report of the registrar. Indeed, I agree with him that there is considerable doubt whether this 20 days'
delay was proved to have had any certain effect in putting back the ship's programme. As Mr. Brandon
pointed out in analysing the evidence which was given on this topic, the dates are not at all clear, and it may
be that, at the end of all, this ship caught up with the number of voyages which it could otherwise have
entered into.

Whatever way one looks at this matter, it seems to me quite impossible to find any valid criticism in the
judgment by which Willmer J. arrived at the result he did on this item of damages attributable to loss of profit.
I agree, therefore, that this appeal should be dismissed.

Appeal dismissed.

Solicitors: Holman, Fenwick & Willan; Thomas Cooper & Co.

A. SR.

1 [1955] 1 W.L.R. 1246; [1955] 3 All E.R. 621; [1955] 2 Lloyd's Rep. 376.

2 (1888) 13 P.D. 191; (1889) 14 App.Cas. 519.

3 [1929] A.C. 196.

4 [1922] 2 A.C. 242.

5 (1888) 13 P.D. 191; (1889) 14 App.Cas. 519.

6 [1955] 1 W.L.R. 1246, 1251.

7 13 P.D. 191; 14 App.Cas. 519.

8 13 P.D. 191, 200.

9 Ibid. 202.
 Page 14

10 14 App.Cas. 519, 523.

11 13 P.D. 191; 14 App.Cas. 519.

12 13 P.D. 191; 14 App.Cas. 519.

13 [1929] A.C. 196.

14 13 P.D. 191.

15 Ibid. 201.

16 (1889) 14 App.Cas. 519, 523.

17 [1929] A.C. 196, 205.

18 13 P.D. 191, 201.

19 14 App.Cas. 519, 523.

20 13 P.D. 191, 201.

21 [1955] 1 W.L.R. 1246, 1251.

22 13 P.D. 191, 200.

23 14 App.Cas. 519, 521.

24 13 P.D. 191, 201.