# The Her Majesty v. Dadabhoy, 1865

[shipping, charter]

## Owners of Her Majesty v. Dadhaboy and Co.

##### Source: The North-China Herald, 28 January 1865

H.B.M. CONSULAR COURT.

Before Sir HARRY S. PARKES, K.C.B., H.B.M. Consul,

NICOL LATIMER, Esq., C. J. SKEGGS, Esq., Assessors.

OWNERS OF Her Majesty v. DADABHOY & Co.

January 24th, 1865.

The parties to this suit had agreed, by a charter-party dated Sept. 14th, 1864, that the ship Her Majesty should take on board at Shanghai a cargo of cotton or other merchandise, and therewith proceed to London of Liverpool as ordered by the charterers; the ship to have a lien on cargo for freight £3.10 per ton of 50 cubic feet. Seventy working days to be allowed, and demurrage beyond that time to be paid by the charterers at the rate of $80 a day. The plaintiffs had done every thing to entitle them to have the cargo on board the ship; but the defendants had not fulfilled their agreement, and the plaintiffs claimed £6,500 in consequence. The defendants replied that the time allowed for the loading of the vessel had not elapsed, and that the plaintiffs had wrongfully refused to receive cargo tendered by the defendants in pursuance of the agreement which had been concluded between them. The plaintiffs had thus discharged defendants from the performance of the charter-party. Mr. MYBURGH, in opening the case for the plaintiffs, said that this was an action for breach of charter-party in not loading the ship Her Majesty after she had been detailed a reasonable time on demurrage. By the charter-party, seventy working days were allowed for loading the ship. The time allowed the charterers to detain the ship on demurrage was not fixed by the charter-party. It was a well-known rule in law that when such an agreement as a charter-party is silent as to time, the law will imply that a reasonable time should be allowed. The plaintiff gave notice to the defendants, previous to the expiration of the lay-days, that he would not remain on demurrage for more than fifteen days, and also called the attention of the defendants to the fact that the loading of the ship had not commenced. At the expiration of the fifteen days the defendants received notice that, as the ship Her Majesty had been detained a reasonable time on demurrage and the loading had not commenced, they would be held liable for breach of charter-party. The questions for the Court to decide were, whether the plaintiff was entitled to sue the defendants for breach of charter-party on the 31st December when the plaint was filed, and, secondly, what was the amount if damages to which the plaintiff was entitled. G. F. SEYMOUR said: - I am master of the ship Her Majesty. Her register tonnage is 1,112 Tons, and she will carry not less than 1,000 tons of measurement cargo. On the 14th September I made this charter-party with Messrs. Dadabhoy & Co. lay-days commenced 24 hours after written notice was given to the charterers that the vessel was ready to receive cargo. I gave notice on the 17th through Gibb, Livingston & Co. to defendants, to remind them how nearly the lay-days had expired, and to ask them what they intended to do as there was not a single package on board up to that time. On the 8th December, I wrote again stating that the lay-days had expired and I should them claim for demurrage from ten to fifteen days. At the expiration of 15 days they had not commenced to load the ship. They had not on the 31st December when this action was commenced. Six days after this Dadabhoy & Co. sent 100 bales of compressed cotton alongside. I declined to receive it on board and wrote this letter. (Letter read) This is the letter I refer to in the one I have just read, written by Mr. Myburgh, my lawyer, to Mr. Cooper (letter reads.) This is Mr. Cooper's reply (letter read). The day before I refused to receive the 100 bales on board, I caused the letter I hand in to be written to Dadabhoy & Co. declining to receive further amounts in payment of demurrage. I hand in Dadabhoy & Co.'s reply (letter read.) While the working says were running, I have had conversations with Mr. Burjorjee of Dadabhoy & Co. on the subject of the charter-party. He asked me in his office what I would cancel the charter-party for. This occurred a week preceding the 21st November. This letter embodies the result of our conversations (letter read). The offer that I should go to Calcutta to load with rice amounted to an offer of$1.10 per bag.  I declined it as unremunerative.  They had previously offered to cancel the contract on payment of £2,000 which I also declined.  I received no answer to my letter of 21st November, but after a conversation on the 7th December, Dadabhoy & Co. wrote me this letter on that day, to which I replied on the 9th December.  (Letters read.)

The offer of £2,250 to cancel the contract was made by me about the 19th November.  The offer to re-charter was made at the same time £2.10 and 36 lay-days.  There were then about 12 lay-days of the old charter to run.  They made me this offer which I accepted, but it was afterwards withdrawn by Dadabhoy & Co.  In consequence of the defendants not loading my ship as per charter=-party, I estimate my loss at £6,000.  This is a statement of my estimate of loss.  We value the ship at £16,500 - not less.  The net earnings of the ship from August 1862 to 1863 were about £5,000.  The gross earnings were between £12,000 and £13,000.

TO THE COURT: - I cannot tell the net earnings in the succeeding year.

TO MR. MYBURGH; - To my knowledge all the items (as to working expense, &c.,) stated in the account (now in court) are correct.  My charter-party does not state the number of days my ship should be detained in demurrage.  I should certainly not have agreed to over fifteen lay-days.  In this ship I have been detained only once upon demurrage.  I was then detained for about five days.  Demurrage of $80 a day only pays my actual expenses. I have a crew of forty Europeans. I never consented in writing, or verbally, to any alteration in the terms of the charter-party. I did not discharge the defendant from loading the ship in the number of days mentioned in the charter-party. I consider ten to fifteen days a reasonable time to be detained on demurrage. To the best of my knowledge I have never signed a charter-party for more then ten days on demurrage. I have been captain for 12 years and during this time have signed several charter parties. TO MR. COOPER: - When a ship is under demurrage according to a charter-party, she is under trhe charter-party up to a reasonable time. I received demurrage under my charter-party up to the 6th January. The amount stipulated in the charter-party was paid to that date. I received the money in order to reimburse my owners for the expenses of the ship during her detention. After fifteen days under demurrage, I did not consider the ship at the service of the charterers. I believe I gave the charterers notice before the 6th January that the charter-party was at an end, (a letter written to the defendants by Mr. Myburgh to that effect, on the part of Captain Seymour, on the 24th December, was handed in and read). I am not aware that any notice was given to the charterers before Jan. 6th, that demurrage would not be received. On 6th Jan. Before the cotton came alongside, I gave notice to my agents that demurrage would not be received. I did not give notice to Dadabhoy & Co. I would not have received demurrage after the 15th day (23rd), but for the advice of my agents to do so. I left it to them. I did not consider that as long as I received demurrage I was bound to receive cargo. I declined to receive demurrage because I did not think it sufficient to pay the expenses of the ship. I consider that when a vessel receives demurrage she is bound to receive her cargo. I received demurrage on the 6th, but it was not by my consent. I only learned last Saturday that demurrage had been received on the 6th. I did not apply to Gibb, Livingston & Co. to enquire why they did not obey my injunctions. I believe the Sailor's Home has been longer on demurrage than I have been, but she had a considerable portion of her cargo on board before the lay-days had expired. I wanted$120 per day demurrage, and 1,000 bales of cotton as guarantee.  The current rate of freight is now £ 2.10 I believe.  I considered the charter-party at an end after the 15th day when action was commenced.  In any event I think my notice of the 6th put an end to the charter-party.  Gibb, Livingston & Co. Have shewn me the correspondence between themselves and Dadabhoy & Co.  During my last charter-party I received demurrage at Calcutta.  I received 100 rupees a day and port expenses were paid.  I don't know the amount of the port expenses.  My vessel is 8 years old.  Her original cost was between £30,000 and £40,000.  She was built in Calcutta.  Freights are stiffening now in Shanghai I believe.

TO THE COURT: - I first instructed Gibb, Livingston & Co. not to received demurrage on the 6th; I had a conversation with them on the subject previously, and they told me that the demurrage was taken as a reduction of damages.

To MR. MYBURGH:- By saying that when a ship-owner receives demurrage day by day the charter-party remains intact, I meant that it remained intact up to the time of the claim being made for breach.  Up to the 31st December the vessel had been 22 days on demurrage.  It is not usual to received demurrage after a claim for breach of charter-party has been made.  A 2,000 tons ship might be loaded in three weeks or a month, if kept well supplied with boats.

Some time previously, Dadabhoy had said - We'll keep your ship and pay demurrage as long as we keep it.  If ever there was a clear adherence to a charter-party, it was on the part of the defendants in this case.  The parties who had broken it were the plaintiffs, and if Dadabhoy wished to bring an action against them, he could do so.  The court would consider some time before it set aside the documents which had been put in evidence, and unless it held that the ship was not under charter to Dadabhoy & Co., on the 6th Jan, it would, he was sure, give judgment in favour of his client.

Mr. MYBURGH might remark that, on the 6th Jan., he had written to Mr. Cooper making the following offer - that Captain Seymour would stay until the end of February if Dadabhoy & Co. would pay demurrage at the rate of \$120 per diem and would furnish security for the amount.  This offer had been refused by Dadabhoy, who objected to finding security.  His client was willing to leave the case to the arbitration of assessors or of the court.

Mr. COOPER at first said his client preferred that the case should be proceeded with; but eventually agreed that the whole case should be left to the decision of the court.  He might call Mr. Dadabhoy; but the case was already sufficiently clear.  He begged, however, that an opinion might be recorded whether or not his clients had broken the charter-party.  He hoped that the court would not stint his clients in time, so long as demurrage were paid in advance.

In reply to the court, Mr. Dadabhoy affirmed that he distinctly intended to load the ship, and it was arranged that the court should determine - whether there had been a breach of charter-party; if so what damages were to be paid, and if not, on what terms the parties were to go on.

Judgment was delivered to the following effect:-

1. That the charter-party continue in force, and that under its conditions Messrs. Dadabhoy & Co. are to provide the ship Her Majesty with a full and complete cargo on or before the 15th of March next, so as to enable the ship to sail upon the following day.

2. That demurrage at the rate of 80 Mexican dollars per day for eighteen days, namely, from the 7th instant to the present date, both days inclusive, be paid by Messrs. Dadabhoy & Co.  Within one week from this date, and that after to-day demurrage at the rate of 100 dollars per day, the omission of any daily demurrage payment to be held to be a breach of the charter-party.

3. The above decision, as shown by the proceedings of the Consular Court of yesterday, is final.

Published by Centre for Comparative Law, History and Governance at Macquarie Law School