In the case of wooden or composite ships:—
When a ship is under one year old from date of original register, at the time of accident, no deduction “new for old” shall be made. After that period a deduction of one-third shall be made, with the following exceptions:—
Anchors shall be allowed in full. Chain cables shall be subject to a deduction of one-sixth only.
No deduction shall be made in respect of provisions and stores which had not been in use.
Metal sheathing shall be dealt with, by allowing in full the cost of a weight equal to the gross weight of metal sheathing stripped off, minus the proceeds of the old metal. Nails, felt and labour metalling are subject to a deduction of one-third.
In the case of ships generally:—
In the case of all ships, the expense of straightening bent ironwork, including labour of taking out and replacing it, shall be allowed in full.
Graving dock dues, including expenses of removals, cartages, use of shears, stages and graving dock materials, shall be allowed in full.
Rule XIV.—Temporary Repairs
No deductions “new for old” shall be made from the cost of temporary repairs of damage allowable as G.A.
Rule XV.—Loss of Freight
Loss of freight arising from damage to or loss of cargo shall be made good as G.A., either when caused by a G.A. act or when the damage to or loss of cargo is so made good.
Rule XVI.—Amount to be made good for Cargo Lost or Damaged by Sacrifice
The amount to be made good as G.A. for damage or loss of goods sacrificed shall be the loss which the owner of the goods has sustained thereby, based on the market values at the date of the arrival of the vessel or at the termination of the adventure.
Rule XVII.—Contributory Values
The contribution to a G.A. shall be made upon the actual values of the property at the termination of the adventure, to which shall be added the amount made good as G.A. for property sacrificed; deduction being made from the shipowner's freight and passage-money at risk, of such port charges and crew's wages as would not have been incurred had the ship and cargo been totally lost at the date of the G.A. act or sacrifice, and have not been allowed as G.A.; deduction being also made from the value of the property of all charges incurred in respect thereof subsequently to the G.A. act, except such charges as are allowed in G.A.
Passengers' luggage and personal effects, not shipped under bill of lading, shall not contribute to G.A.
Except as provided in the foregoing rules, the adjustment shall be drawn up in accordance with the law and practice that would have governed the adjustment had the contract of affreightment not contained a clause to pay G.A. according to these rules.
The above rules differ in some important respects from English common law, and from former English practice. They follow ideas upon the subject of G.A. which have prevailed in practice in foreign countries (though often in apparent opposition to the language of the codes), in preference to the more strict principle of the common law applied by English courts. That principle requires that, in order to have the character of G.A. a sacrifice or expenditure must be made for the common safety of the several interests in the adventure and under the pressure of a common risk. It is not enough that the sacrifice or expenditure is prudent, or even necessary to enable the common adventure to be completed. G.A., on the English view, only arises where the safety of the several interests is at stake. “The idea of a common commercial adventure, as distinguished from the common safety from the sea,” is not recognized. It is not sufficient “that an expenditure should have been made to benefit both cargo owner and shipowner.”
Thus expenses incurred after ship and cargo are in safety, say at Port of refuge expenses. a port of refuge, are not generally, by English law, to be treated as G.A.; although the putting into port may have been for safety, and therefore a G.A. act. If the putting into port has been necessitated by a G.A. sacrifice, as by cutting away the ship's masts, the case is different; the port expenses, the expenses of repairing the G.A. damage, and the incidental expenses of unloading, storing and reloading the cargo are, in such a case, treated as consequences of the original sacrifice, and therefore subjects for contribution. But where the reason for putting in is to avoid some danger, such as a storm or hostile cruiser, or to effect repairs necessitated by some accidental damage to the ship, the G.A. sacrifice is considered to be at an end when the port has been reached, if the ship and cargo are then in physical safety. The subsequent expenditure in the port is said not to flow from that sacrifice, but from the necessity of completing the voyage, and is incurred in performance of the shipowner's obligation under his contract. The practice of English average adjusters has indeed modified this strict view by treating the expense of unloading as G.A.; but it may well be doubted whether that practice can be legally supported. Moreover, expenditure in the port which is incurred in protecting the cargo as in warehousing it, is by English practice treated as a charge to be borne by the cargo for whose benefit it was incurred.
If we turn now to York-Antwerp Rule X., it will be seen that a much broader view is adopted. Whatever the reason for putting into the port of refuge, provided it was necessary for the common safety, the expenses of going in, and the consequent expenses of getting out (if she sails again with all or part of her original cargo), are allowed as G.A., Rule X. (a). Further, the cost of discharging the cargo to enable damage to the ship to be repaired, whether caused by sacrifice or by accident during the voyage, is to be allowed as G.A., “if the repairs were necessary for the safe prosecution of the voyage,” Rule X. (b). And that is to be so even where such repairs are done at a port of call, as well as where done at a port of refuge. Again, when the cost of discharging is treated as G.A., so also are to be the expenses of storing the cargo on shore, and of reloading and stowing it on board, after the repairs have been done (Rule X. (c)), together with any damage or loss incidental to those operations (Rule XII.).
Further, by Rule XI. the wages of the master, officers and crew, and the cost of their maintenance, during the detention of a ship under the circumstances, or for the purpose of the repairs mentioned in Rule X., are to be allowed in G.A. It is questionable whether English law allows the wages and maintenance of the crew at a port of refuge in any case. Where the detention is to repair accidental damage it seems clear that they are not allowed. And in practice under common law, the allowance is never made; so that Rule XI. is an important concession to the shipowner. Like the changes introduced by Rule X., it is a change towards the practice in foreign countries.
It may be noted that the rules do not afford equal protection to a shipper in the comparatively infrequent case of his being put to expense by the delay at a port of refuge. Thus a shipper of cattle is not entitled to have the extra wages and provisions of his cattlemen on board, nor the extra fodder consumed by the cattle during the stay at a repairing port, made as good as G.A. under Rules XI. and X. (Anglo-Argentine &c. Agency v. Temperley Shipping Co., 1899, 2 Q.B. 403).
As to the acts which amount to G.A. sacrifices, as distinguished General average sacrifices. from expenditures, the York-Antwerp Rules do not much alter English common law. They do, however, make definite provisions upon some points on which authority was scanty or doubtful. (See Rules I.-IX.) And in Rule I., as to jettison of deck cargo, a change is made from the common law rule, for the jettison is not allowed as G.A. even though the cargo be carried on deck in accordance with an established custom of the particular trade.
Rule III. deals with damage done in extinguishing fire on board a ship. Modern decisions have cleared away the old doubts whether such damage to ship or cargo should, at law, be allowed in G.A. But recent cases in the United States have raised the question whether the allowance should be made where the fire occurs in port, and is extinguished, not by the master, but by a public authority acting in the interests of the public. The Supreme Court of the United States decided against the allowance in 1894 in a case of Ralli v. Troup (157 U.S. 386). The ship had there been scuttled to put out a fire on board, by the port authority, acting upon their own judgment, but with the assent of the master. It was held that the damage suffered by ship and cargo ought not to be made good by G.A. contributions; for the sacrifice had not been made "by some one specially charged with the control and safety of that adventure," but was the compulsory act of a public authority. On the other hand, in the English case of Papayanni v. Grampian S.S. Co. (I. Com. Ca. 448), Mathew, J., held that the scuttling of a ship at a port of refuge in Algeria, by orders of the captain of the port, was a G.A. act. It had been done in the interest of ship and cargo, and there was no evidence of any other motive.
Rule V. deals with the question whether, and under what conditions, a voluntary stranding of the ship is a G.A. act, in a manner which will probably be held to express the law in England when the matter comes up for decision.
Rules VI. and VII. deal with the damage sustained by the ship, or her appliances, in efforts to force her off the ground when she has stranded. Such efforts involve an abnormal use which is likely to cause damage to sails and spars, or to engines and boilers; and they are treated as acts of sacrifice. The case of “The Bona,” 1895 (P. 125) shows that the rules are in accord with English law upon the point. The court of appeal held that both the damage sustained by the engines while worked to get the ship off, and the coal and stores consumed, were subjects for G.A. contribution at common law.
- Per Bowen, L.J., in Svensden v. Wallace, 1883, 13 Q.B.D. at p. 84.