SALVAGE CHARGES

Introduction

The philosophy behind this concept was adequately summed up as long ago as 1793 by Lord Eyre CJ, in Nicholson v Chapman, below, where the court had to differentiate between salvage and a claim for preserving mislaid property.

Nicholson v Chapman (1793) 2 H B1 254

A considerable quantity of timber, owned by the plaintiff, was placed in a dock on the bank of the Thames. However, the fastenings gave way, and the timber was carried by the tide to Putney, where it was recovered by the defendant. The defendant then refused to hand over the timber to the plaintiff until a suitable salvage award had been made by the plaintiff. The plaintiff refused such payment.

The court ruled that this was not a case of salvage, and then went on to show why it was not.

Lord Eyre CJ: [p 257] …The taking of goods left by the tide upon the banks of a navigable river, communicating with the sea, may in a vulgar sense be said to be salvage; but it has none of the qualities of salvage, in respect of which the laws of all civilised nations, the laws of Oleron, and our own laws in particular, have provided that a recompense is due for the saving, and that our law has also provided that this recompense should be a lien upon the goods which have been saved. Goods carried by sea are necessarily and unavoidably exposed to the perils which storms, tempest and accidents (far beyond the reach of human foresight to prevent) are hourly creating, and against which, it too often happens that the greatest diligence and the most strenuous exertions of the marine cannot protect them. When good are thus in imminent danger of being lost, it is most frequently at the hazard of the lives of those who save them, that they are saved. Principles of public policy dictate to civilised and commercial countries, not only the property, but even the absolute necessity of establishing a liberal recompense for the encouragement of those who engage in so dangerous a service.

Definition of salvage charges

The term ‘salvage charges’ is defined in s 65(2) of the Act thus:

‘Salvage charges’ means the charges recoverable under maritime law by a salvor independently of contract. They do not include the expenses of services in the nature of salvage rendered by the assured or his agents, or any person employed for hire by them, for the purpose of averting a peril insured against. Such expenses, where properly incurred, may be recovered as particular charges or as a general average loss, according to the circumstances under which they were incurred.

That salvage charges are recoverable under a policy of insurance is confirmed by cl 10.1 of the ITCH(95), which states:

Sir James Hannen: [p 116] …It seems to me that no primary liability rests on the ship or its owners to pay for the salvage of the cargo. It is laid down in Abbott on Shipping, title Salvage: ‘With respect to the parties liable to pay salvage, and the interest in respect of which it is payable, the rule is that the property actually benefited is alone chargeable with the salvage recovered.’ … The so called agreement, however, does not purport to extend the liability of the shipowners, or, indeed, to fix any liability on any one, except in so far as such liability may be created by the acknowledgment which it contains that the captain of Raisby had requested the captain of Gironde to tow his ship to St Nazaire. This part of the document in no way alters the position of the matter from what it would have been if the captain of Raisby had simply accepted the services of Gironde, in which case it has not been contended that a claim would have been maintained against the ship or its owners for salvage of the cargo… It appears to me, therefore, that the plaintiffs altogether fail to show any liability on the part of the defendants to pay for the salvage of the cargo.

Notes

Although, at first sight, s 544 still appears to link life salvage with the salvage of property, this is not, in fact, the case. Under statute, an award can be made for life salvage, even when it is made independently of salvage services to property. This was made abundantly clear by Lord Esher MR, in Nourse v Liverpool Sailing Ship Owners Mutual Protection and Indemnity Association, below. It is further emphasised that the statutory provision places the liability for life salvage upon the owner of the ship or the cargo saved, and not the insurer; a policy of insurance is a separate matter. As regards insurance, the court concluded that an insurer bore no liability for life salvage.

Nourse v Liverpool Sailing Ship Owners Mutual Protection and Indemnity Association (1879) 4 App Cas 755, CA

In March 1895, the sailing vessel Arno was in grave peril in mid-Atlantic when the master and crew were rescued by the steamer Normannia; Arno herself being salved later by another vessel. In due course, the Admiralty granted an award of life salvage to the owner, master and crew of Normannia, and the plaintiff owner of Arno paid the award before attempting to recover the amount so paid from their P & I Association. The defendant P & I Association rejected the claim, on the basis that, under cl 18 of their rules, they were not liable for any payment ‘…in respect of any loss which is capable of being insured against by the usual form of Lloyd’s policy…’ and that, under the clause, life salvage was the liability of the hull insurer, and not the P & I Association.

The Court of Appeal affirmed the decision of the trial judge, and ruled that a Lloyd’s policy did not cover life salvage. Furthermore, Lord Esher MR was of the opinion that an award for life salvage under statute did not have to be accompanied by the salvage of property.

However, in the much later case of Bosworth (No 3), below, where the crew were saved at the same time as the ship and cargo were saved, but by another vessel, the court was of the opinion that the life salvage could be included within the meaning of s 65(1) of the Act, even though it involved ‘a little stretching of the language’. Whether a court would take a similar wide view where life salvage stood entirely alone is much more debatable.

Grand Union Shipping Limited v London SS Owners’ Mutual Insurance Association Ltd, ‘Bosworth’ (No 3) [1962] 1 Lloyd’s Rep 483

On a voyage from Edinburgh to Norway, The Bosworth encountered severe weather and was in danger of sinking. Two trawlers and a merchant ship came to her aid, and she was eventually towed into Aberdeen. However, one of the trawlers, Wolverhampton Wanderers, was damaged whilst saving the entire crew, and her owners successfully claimed a life salvage award from the Admiralty Court. Having paid out this salvage award, the owners of Bosworth then sought to recoup this expenditure from their insurers, who denied liability for the life salvage and suggested that the whole salvage award for the ship and cargo should have been apportioned between the three salving vessels.

The court ruled against any such apportionment, and decided that Wolverhampton Wanderers was entitled to recover for the ‘enhanced’ award of saving life under the Lloyd’s policy because she had been involved in the saving of the ship and cargo.

McNair J: [p 490] …It needs possibly a little stretching of the language to say that a salvage award in so far as it reflects an element of life salvage gives rise to a charge incurred in preventing a loss by perils insured against. I think the answer to that is that by the practice of the Admiralty Court an award made in these circumstances is treated as being, and is in fact, an award for services rendered to the ship and cargo.

An enhanced award for preventing or minimising environmental damage

Clause 10.5 of the ITCH(95) categorically allows recovery from the insurer for the Vessel’s proportion of salvage charges. However, it fails to mention whether any additional sum included in the salvage award apportioned for preventing or minimising damage to the environment under Art 13(1)(b) of the International Convention on Salvage 1989 may be included in the claim. The position is clarified in cl 10.6 as follows:

Clause 10.5 shall not however exclude any sum which the Assured shall pay to salvors for or in respect of salvage remuneration in which the skill and efforts of the salvors in preventing or minimising damage to the environment as is referred to in Art 13(1)(b) of the International Convention on Salvage 1989 have been taken into account.

Thus, any enhancement of the award made under Art 13 is recoverable by the assured.

Incurred in preventing a loss by perils insured against

Like all forms of partial loss, salvage charges are only recoverable if, to quote s 65(1) of the Act, they are ‘…incurred in preventing a loss by perils insured against…’. This principle is reinforced by cl 10.4 of the ITCH(95), which states:

The Court of Appeal upheld the decision of the trial judge, and ruled that the underwriters were not liable for the salvage charges, as they had not arisen from a peril insured against.

AL Smith LJ: [p 459] …The Lord Chief Justice says [in the court of first instance]:

It was admitted by the plaintiff that there was no weather which rendered salvage assistance necessary, and that the need of assistance of the trawler and the tug was occasioned by the want of coal…Can it be said on the facts here stated that the salvage services were at all rendered necessary, or the salvage expenses incurred by reason of any peril insured against? In my judgment it cannot…that condition arose directly from the absence of fuel, and no damage or peril of the sea supervened. In other words, it was the unseaworthiness of the ship which caused the need—if need there were— of salvage aid, and no peril of the sea caused or contributed to the necessity for the aid.

[p 461] …As before stated, we agree with the Lord Chief Justice when he held upon the evidence before him that the loss sustained was not occasioned by a peril of the sea, for in our judgment the loss complained of arose solely by reason of the inherent vice of the subject matter insured: we mean the insufficiency of coal with which the ship started upon her voyage…

The same criterion was applied in Pyman Steamship Co v Lords Commissioners of the Admiralty [1919] 1 KB 49, CA. Although this was not an insurance case, the issue of salvage was raised with respect to a wartime requisition charter. On this occasion, the vessel in question broke her propeller shaft in severe weather close to a minefield. Salvage services were needed so that she could be towed to safety, away from the adjacent minefield, as well as to avert further damage by perils of the seas. Under the charterparty, the Admiralty were liable for ‘the consequences of hostilities or warlike operations’, but not sea risks; they were obliged to pay only for the proportion of salvage consequent on the war risk.

Warrington LJ: [p 54] …Payments made to avert a peril may be recovered as a loss by the peril.

Scrutton LJ: [p 55] …Ever since the decision in Aitchison v Lohre, and long before that, it has been a commonplace in mercantile law that sums paid to avert a peril may be recovered as upon a loss by that peril, and as soon as it is established that this sum of £3,000 was paid partly to avert a sea peril and partly to avert a peril from enemy mines, it follows that there has been one loss by sea perils and another by war perils. The parties have agreed that the appellants shall not be liable for loss by sea perils, and shall be liable for loss by war perils.

Clause 10.1 of the ITCH(95) states that:

Aitchison v Lohre (1879) 4 App Cas 755

The plaintiffs’ vessel Crimea was insured with the defendants for £1,200, her value being £2,600. The policy contained the usual sue and labour clause. After running into difficulties, Crimea was rescued by the steamship Texas which was later granted a salvage award by the Irish Court of Admiralty amounting to £800. Because the measure of indemnity, including the cost of repairs and the salvage award, was limited by the insured value of £1,200, less one-third new for old, the owners sought to recover the £800 salvage award as sue and labour, as the latter was recoverable over and above the insured value.

The House of Lords ruled that the £800 award was salvage and not sue and labour. Therefore, the insurers were only liable for the cost of repairs, and any salvage expenses, up to the insured value of the vessel. The court then considered the whole relationship between salvage and sue and labour.

Lord Blackburn: [p 764] …With great deference to the judges of the Court of Appeal, I think that general average and salvage do not come within either the words or the object of the suing and labouring clause, and that there is no authority for saying that they do. The words of the clause are that in case of any misfortune it shall be lawful ‘for the assured, their factors, servants, and assigns, to sue, labour, and travel for, in, and about the defence, safeguard, and recovery of the subject of insurance, ‘without prejudice to this insurance, to the charges whereof we the insurers will contribute’. And, the object of this is to encourage and induce the insured to exert themselves, and, therefore, the insurers bind themselves to pay in proportion any expense incurred, whenever such expense is reasonably incurred for the preservation of the thing from loss, in consequence of the efforts of the assured or their agents. It is all one whether the labour is by the assured or their agents themselves, or by persons whom they have hired for the purpose, but the object was to encourage exertion on the part of the assured; not to provide an additional remedy for the recovery, by the assured, of indemnity for a loss which was, by the maritime law, a consequence of the peril.

[p 765] …The owners of Texas did the labour here, not as agents of the assured, and being paid by them wages for their labour, but as salvors acting on the maritime law.

Lord Hatherley: [p 768] …it is equally clear, as it seems to me, that the suing and labouring clause was inserted by the underwriters for the purpose of securing the benefit of any pains that the shipowner might be inclined to take in preserving, for their benefit, as much as he possibly could preserve. But that does not apply to a case like the present, where the salvage seems to have been an ordinary sort of salvage, namely, a ship perceiving another at a distance and in a state of distress comes to the rescue, no bargain being made. We were expressly told in the case that no bargain was made as to any remuneration which should be given, but it was rescued upon the simple and common principle of salvage.

However, one year later, in Dixon v Whitworth, below, a claim for salvage was again pursued as sue and labour because the policy of insurance was warranted ‘free from particular average’. Because salvage is a form of particular average loss, any claim for such would, under the common law, have been negated by the said clause.

Dixon v Whitworth (1880) 4 Asp MLC 326, CA

The appellants constructed a barge to transport an obelisk from Alexandria to London, and then insured both with the defendant underwriters against total loss only. Because of severe weather conditions in the Bay of Biscay, the barge was cast loose by the towing vessel, but was later rescued by another vessel. The salving vessel was awarded £2,000 by the Admiralty Court, which was duly paid by the appellants, who then sought to recover that sum from their insurers under the sue and labour clause in the policy. The underwriters denied liability, contending that the award had been for salvage, which, being a form of particular average, was not covered by the policy, which only insured the vessel against a total loss.

The Court of Appeal ruled that the rescue amounted to salvage charges, and not sue and labour, and, as the salvage charges were a type of particular average loss, the appellants could not recover, as, under the policy, only total losses were insured.

Notes

It is to be noted that Dixon v Whitworth was decided before the Act, and, therefore, has now to be read in the light of s 76(2), where salvage charges, though they are particular average losses, are, nevertheless, recoverable even in a policy containing a free from particular average warranty.

Primarily, sue and labour is a duty placed upon the assured under a policy of marine insurance to act in a responsible manner by ensuring that loss or damage to the subject matter insured is averted or minimised and, by so doing, lessens the liability of the insurer. Thus, any claim for sue and labour represents an expenditure which has taken place for the benefit of the underwriter, and such a claim may be recovered separately and independently from other partial losses under the head of particular charges.

Expenses incurred for suing and labouring are recoverable in addition to other claims for damage or loss, and, because of this, such a claim may be added to the primary claim, even though the insured value of the policy may then be surpassed.

Salvage charges and general average compared

That insurance cover against liability in general average does not alter that liability, but only provides an indemnity, for it was illustrated long ago by Abbott CJ in Simonds v White (1824) 2 B&C 805, where a ship lost her anchor cable whilst endeavouring to free herself from a reef. When the ship reached her destination, the cargo-owner had a general average charge levied against him for part of the cost of replacing the anchor cable.

Abbott CJ: [p 811] …The principle of general average, namely, that all whose property has been saved by the sacrifice of the property of another shall contribute to make good his loss, is of very ancient date, and of universal reception among commercial nations. The obligation to contribute, therefore, depends not so much upon the terms of any particular instrument, as upon a general rule of maritime law.

Since the introduction of the Marine Insurance Act 1906, the liability for general average, under the common law of the sea, has been replaced by statute. The Act, in s 66, in no way changes the situation regarding insurance; any insurance remains nothing more than indemnity for such.

This was summed up by Bailhache J in Brandeis Goldschmidt and Co v Economic Insurance Co Ltd (1922) 38 TLR 609, where a cargo-owner was unable to recover under a policy of insurance covering general average contributions, because there had been no average adjustment as expressly required by the policy. Bailhache J observed that: [p 610] ‘…The liability in general average before 1906 arose at common law, and since the Act of 1906 by statute. It did not arise under the policy, but the policy might contain express provisions, modifying or excluding it.’

Definition of general average loss

Section 66(2) then provides the statutory definition of a ‘general average act’:

There is a general average act where any extraordinary sacrifice or expenditure is voluntarily and reasonably made or incurred in time of peril for the purpose of preserving the property imperilled in the common adventure.

Thus, for there to be a general average act, certain criteria must be met. The act must be:

(a)   ‘extraordinary’;

(b)   ‘voluntarily and reasonably’ made;

(c)   ‘in time of peril’; and

(d)   for the purpose of preserving property imperilled in the ‘common adventure’.

The statutory definition is, in itself, a codification of the principles laid down in past cases, of which Birkley v Presgrave, below, is particularly noteworthy.

Birkley v Presgrave (1801) 1 East 220

The plaintiffs’ vessel was entering Sunderland harbour with a cargo of the defendant’s corn on board when she was hit by a violent squall. In order to save the ship and cargo, the master endeavoured to tie her up to the south pier. In this, he was successful but, during the process of manoeuvring the ship and saving the cargo, extra personnel were required for assistance. An anchor and its cable were deliberately sacrificed for safety reasons, and some hawsers were also lost. The owners claimed a general average contribution from the defendant cargo-owner.

The court ruled that the actions of the master amounted to general average acts, for which the defendant was liable by way of a contribution.

Lord Kenyon CJ: [p 227] …With respect to the other question, all ordinary losses and damage sustained by the ship happening immediately from the storm or perils of the sea must be borne by the shipowners. But, all those articles which were made use of by the master and crew upon the particular emergency, and out of the usual course, for the benefit of the whole concern, and the other expenses incurred, must be paid proportionately by the defendant as general average.

Lawrence J: [p 228] All loss which arises in consequence of extraordinary sacrifices made or expenses incurred for the preservation of the ship and cargo come within general average, and must be borne proportionately by all who are interested. Natural justice requires this.

Australian Coastal Shipping Commission v Green and Others [1971] 1 All ER 353, CA

Two separate cases, involving similar issues, came before the Court of Appeal. Both were claims for general average losses against the same underwriter, but under different policies.

(a)   Bulwarra was in port in New South Wales when a storm struck and put the ship in imminent danger. A tug was engaged to tow Bulwarra to safety, but, during the operation, a tow rope broke and wrapped itself around the tug’s propeller. Although Bulwarra reached safety, the tug drifted aground and became a total loss. The tug’s owners unsuccessfully claimed against Bulwarra’s owners under the contact of towage (UKSTC), but, in putting up a defence, legal costs were incurred. Bulwarra’s owners then claimed those legal costs from their insurers as a general average expenditure.

(b)   Wangara stranded on a voyage from Melbourne to Auckland, and two tugs were engaged to tow her to safety. During the operation, a tow rope parted and fouled a tug’s propeller. Both Wangara and the stricken tug were successfully rescued, the latter being towed by a local pilot vessel, which was then granted a salvage award. The tug’s owners then claimed to be indemnified by Wangara’s owners under the terms of the contract of towage (UKSTC). Wangara was held liable, and her owners then claimed for this loss to be indemnified by their underwriters as a general average loss.

The Court of Appeal ruled that, in both instances, the losses were general average losses. The towage contracts amounted to general average acts, and the expenses incurred were in direct consequence of those general average acts.

Lord Denning MR: [p 357] …The ‘general average act’ was, I think, the contract made by the plaintiffs with the tug. In each case, the vessel was in dire peril and the plaintiffs called on the tug for help…The next question is: what was the general average loss? If the towline had not parted, and the tug had completed her task in safety, the hiring charge would certainly have been a general average expenditure. But the towline did part. It wrapped itself round the propeller of the tug. The result was that, in the case of Bulwarra, the tug became a total loss; and, in the case of Wangara, the tug was salved at great expense. The plaintiffs have become bound under the indemnity clause to indemnify the tugowners. Is this expenditure, under the indemnity clause, a ‘general average loss’?

So, if, to avoid an impending danger, or to repair the damage occasioned by a storm, the ship be compelled to take refuge in a port to which it was not destined, and into which it cannot enter without taking out a part of her cargo, and the part taken out to lighten the ship on this occasion happen to be lost in the barges employed to convey it to the shore, this loss also, being occasioned by the removal of the goods for the general benefit, must be repaired by general contribution.

If, however, there is a subsequent incident which was only a remote possibility, it would be different. Thus, Lowndes gave the illustration of a sailing vessel, where the master cuts away the mast and thus reduces her speed; and afterwards she is captured by the enemy. Her loss is not the direct consequence of the general average act. It is due to the intervening capture. In both cases before us, the master, when he engaged the tug, should have envisaged that it was distinctly possible that the towline might break and foul the propeller. When it happened, therefore, it did not break the chain of causation.

General average contribution

The whole concept of a loss by general average is based upon the fact that the other parties to the common adventure who have benefited from the general average act will contribute towards that loss. This liability to contribute is confirmed by s 66(3) of the Act, which states:

Where there is a general average loss, the party on whom it falls is entitled, subject to the conditions imposed by maritime law, to a rateable contribution from the other parties interested, and such contribution is called a general average contribution.

Sacrifice or expenditure must be ‘extraordinary’

For there to be a general average loss, there must be an ‘extraordinary’ sacrifice or expenditure which is made for the benefit of all the parties to the common adventure. The former is a physical act, whilst the latter is a financial outlay, but both are losses in general average. The sacrifice may take the form of cargo or ship’s apparel being deliberately cast away for the benefit of the whole venture.

Lord Kenyon CJ: [p 227] …all ordinary losses and damage sustained by the ship happening immediately from the storm or perils of the sea must be borne by the shipowners. But all those articles which were made use of by the master and crew upon the particular emergency, and out of the usual course, for the benefit of the whole concern, and the other expenses incurred, must be paid proportionately by the defendant as general average.

However, unlike a physical sacrifice, it is often much more difficult to determine what, in general average, may be considered to be a relevant extraordinary expenditure. On this very point, in the Exchequer Chamber, Erie CJ raised the issue in Kemp v Halliday (1866) LR 1 QB 520, where a vessel which sank in Falmouth harbour was later salved and the issue of general average was foremost.

Erie CJ: [p 527] …We infer from the statement in the case that there was a common peril of destruction imminent over ship and cargo as they lay submerged; that the most convenient mode of saving either ship or cargo, or both, was by raising the ship together with the cargo; that the expense required for such raising would be an extraordinary expense for the common benefit of both; that the cargo would be liable to a general average contribution towards the expense; and the shipowner would have a lien on the cargo to secure the payment of that general average.

One year later, in Wilson v Bank of Victoria, below, the issue of what constituted an extraordinary expenditure arose again.

Wilson and Another v Bank of Victoria (1867) LR 2 QB 203

The plaintiffs’ vessel Royal Standard, whilst on a voyage from Australia to England, hit an iceberg in the southern ocean and her masts and rigging were so damaged that she had to continue to Rio de Janeiro under steam alone and, in so doing, exhausted her stocks of coal. Because of the cost of permanent repairs in Rio de Janeiro, the master carried out temporary repairs, replenished the bunkers and continued the voyage to England under steam alone. The Royal Standard’s owners then sought to recover some of the cost of the coal from the cargo-owners by way of a general average contribution.

The court ruled that the expenditure on coal was not an extraordinary expenditure, but was really an expenditure which could have been envisaged as part of the operation of a vessel equipped with auxiliary power.

For there to be a general average loss caused by an extraordinary sacrifice or expenditure, that sacrifice or expenditure must be for the benefit of the whole adventure, and not just for the benefit of one interest.

In Hingston v Wendt (1876) 1 QBD 367, where the cargo was salved from the sunken wreck of a sailing vessel by an agent of the master, the court held that, although the agent held a lien on the cargo, the act of saving the cargo alone, though analogous to general average, was not in fact so.

Blackburn J: [p 370] …The plaintiff, a ship agent at Dartmouth, was put in possession of the wrecked vessel and cargo by the captain, with, as we understand the case, authority from the captain to do, as his agent, what was for the benefit of all concerned. The plaintiff did the work, and expended the money sued for in discharging the cargo, and he brought it to a place of safety, where he kept possession of it. The hull remained on shore, and ultimately broke up. And was sold as a wreck. We think we must take it on the statement to be the fact, that this expenditure was not incurred on behalf of the master as agent of the shipowner, performing on his contract to carry on the cargo to its destination and earn freight, but was an extraordinary expenditure for the purpose of saving the property at risk; and had the expenditure been for the purpose of saving the whole venture, ship as well as cargo, it would have constituted a general average, to which the owners of each part of the property saved must have contributed rateably, and the captain, and the plaintiff, as his agent, would have had a lien or right to retain each part of the property saved till the amount of the contribution due in respect of it was paid or secured.

Voluntarily and reasonably made

Section 66(2) of the Act affirms that ‘there is a general average act where any extraordinary sacrifice or expenditure is voluntarily and reasonably made in time of peril…’. However, Rule A of the York-Antwerp Rules 1994 states that ‘there is a general average act when, and only when, any extraordinary sacrifice or expenditure is intentionally and reasonably made…’.

Reasonably made

The Act, in s 66(2), qualifies both a general average sacrifice and a general average expenditure being ‘reasonably made’. Presumably, this infers that the master of a vessel must act reasonably when making a sacrifice for which others will eventually be partly liable. Similarly, any expense incurred must be governed by the same criteria of reasonableness. The issue of excessive or unreasonable expenditure was raised in Anderson, Tritton and Co v Ocean Steamship Co, below.

An arrangement existed between two shipping companies, the Ocean Steamship Company and the China Navigation Company, both of whom operated up the Yangtze River. This arrangement was such that, should either company’s vessels need assistance, the other company would provide that assistance for a fixed fee of £2,500. Thus, when the steamship Achilles ran aground in the river, Shanghai came to her assistance and towed her off for the fixed sum previously agreed. When the Ocean Steamship Company, the owners of Achilles, sought to recover from the cargo-owners in general average, the cargo-owners objected to the payment, as they contended that the price had been fixed by the owners and not the master, and that the fee was unreasonable.

The House of Lords reversed the decision of the Court of Appeal and ruled that, although the assistance amounted to general average, the sum charged was unreasonable and, with respect to the cargo-owners, should be reduced.

Lord Blackburn: [p 404] …I have come to the conclusion that, on the evidence given at the trial, it was not a simple issue whether the whole sum actually paid by the shipowners to the owners of Shanghai was chargeable to general average, and, if that was not made out, that nothing was to be recovered. I do not think that it would follow merely from the shipowner having become liable to pay and having paid that sum, that the whole of it was chargeable to general average. I think it might well be that, on this evidence, the proper conclusion was that something differing from that sum might be chargeable, and I think that, till it is ascertained whether any sum was chargeable, and what that sum was, the case is not ripe for decision.

…And though I quite agree that there is some evidence here that Achilles and her cargo were both in danger, and were both saved by the services of Shanghai, and though I also agree that it is not a question of law whether the amount of the sum charged as a disbursement was exorbitant or not, still I cannot find that any question as to the amount was submitted to the jury. It seems to me that if such a question had been submitted to a jury, there is much in the evidence that might make it very doubtful whether the jury would think this sum properly chargeable against the owners of the goods if uninsured.

Reasonableness under the York-Antwerp Rules 1994

In time of peril