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Unseaworthiness in a time policy may simply act as an uninsured peril and s 39(5) does not apply, for instance, where no privity of the assured has been established, and both perils of the sea and such unseaworthiness were causative of the loss; alternatively, where the policy explicitly indicates that some forms of unseaworthiness is insured against or excluded. Under such circumstances, the principle of proximity under s 55 subject to otherwise agreed
is revived and becomes determinant of the insurer’s liability. Returning to the question posed in the overview of the definition of seaworthiness, the meaning of seaworthiness unavoidably leads to a tangled relationship with perils of the sea, especially when both of them are acting as causes of a loss.
The Miss Jay Jay is the most relevant and direct authority on debility of the ship and perils of the sea jointly and proximately causing the loss of an insured yacht. Against the wording as to “solely caused by” contained in the time policy in The Miss Jay Jay, Lord Wright in Smith, Hogg v Black Sea & Baltic474 stated that unseaworthiness could never be the sole
cause. It must always be only one of several co-operating causes. Moreover, Lord Wright in a later case, A/B Karlshamns Oljefabriker v Monarch Steamship Co Ltd,475 reiterated that:
Seaworthiness as a cause cannot from its very nature operate by itself; it needs the "peril" in order to evince that the vessel, or some part or quality of it, is less fit than it should have been and would have been if it had been seaworthy, and hence the casualty ensues.
However, Lord Mance in The Cendor Mopu476 implied contributory causes of internal nature,
such as inherent defects of ships and cargo, ought not to be regarded as a concurrent proximate cause with perils of the sea. This proposition may affect the possibility of seaworthiness to apply the rules of “concurrent causes” thereafter. After all, as demonstrated in Chapter Four Inherent Vice, The Cendor Mopu may be deemed as an authority to reject the concurrency between internal risks and external ones. Thus, it seems doubtful whether unseaworthiness and perils of the sea can be concurrent proximate causes.
At the outset, a few observations and conditions need to be clarified and admitted. Firstly, “perils of the sea” is the peril defined under r 7 of the Schedule in the 1906 Act, as distinguished from perils at sea. Secondly, seaworthiness is not a warranty in the dispute and the doctrine of proximity applies in determining the recovery. Thirdly, (un)seaworthiness has to be testified by perils of the sea along with the factual evidence of defects, and thus in most cases these two causes coexist. The key question is remaining to be how to judge the efficiency in law. It seems that the definition of seaworthiness has already provided an answer, which is whether the “perils of the sea” in question is ordinary/reasonable or not.
(1) If there were no perils of the sea but merely an ordinary movement of the sea, the loss of an unseaworthy vessel should be regarded as solely caused by unseaworthiness. Therefore,
474 Supra 448
475 (1948-49) 82 Ll. L. Rep. 137, at p 156 476 Supra 7, p 577
unseaworthiness was the proximate cause. For instance, in E. D. Sassoon & Co. v Western Assurance Company477, the insured opium stored on a wooden hulk moored in a river was
damaged by water percolating through a leak caused by the rotten condition of the hulk unknown to the assured, the Privity Council recognised the loss was proximately caused by unseaworthiness of the vessel instead of perils of the sea.
(2) If perils of the sea were ordinary and the vessel was still lost due to its defect, it amounted to unseaworthiness and both perils were attributable to the loss. In this occasion, the two factors are likely to be concurrent proximate causes and The Miss Jay Jay rule should apply.
“Ordinary” in this context coincides with the “ordinary” in the statutory definition but describing “actions of wind and waves”. However, “ordinary” in the face of perils of the sea is the test of seaworthiness and also an insured peril in most policies, while the statutory definition is the test of existence of perils of the sea and uninsured. These two “ordinary” are somewhat confusing, which may be relative to and have affected the decisions of Mountain v Whittle478 and the Mayban case, in the way that the court held perils of the sea
should be exceptional in order to outweigh the causal effect of unseaworthiness and inherent vice of the goods insured for the voyage.
An effective manner in which to define whether perils of the sea is ordinary or not is whether the condition of the sea is foreseen or foreseeable based upon customary and seafaring common-sense and experience. A more specific and clear way is illustrated in the Garnat Trading & Shipping (Singapore) Pte Ltd v Baominh Insurance Corp,479 although the
argument concerning unseaworthiness primarily focused on the factual basis, both an Assessment of Strength, Stability and Unsinkability in Towage Plan and Instructions given to the Captain stated that the floating dock insured was only allowed for ocean towing on the basis of the permissible wave scale 5 at a maximum wave height of approximately 3.5 metres. The Court of Appeal held that, “We think that the correct analysis is that the adventure insured was one where it was contemplated by the parties that there would be a maximum wave height of 3.5 m, so that the Dock had to be fit in all respects to encounter the ordinary perils of the seas for that adventure, rather than some other voyage. In short, the contemplated voyage for insurance purposes was one where the maximum wave height would be 3.5 m.”
On applying The Miss Jay Jay rule, where an insured peril and an uninsured peril concurrently cause a loss, the insurer should be liable for that loss. This result is compatible with the House of Lord’s intention to broaden scope of perils of the sea and the insurer’s
477 Supra 233 478 [1921] AC 615 479 [2011] EWCA Civ 773
coverage. Also, it is consistent with the law that perils of the sea do not have to contain exceptional elements.
(3) On the contrary, where the perils of the sea were extraordinary and unseaworthiness is also proved, even if both factors had contributed to the loss, perils of the sea should outweigh unseaworthiness in efficiency, as the vessel was not expected to survive such perils and such perils of the sea are exactly what had been agreed to cover against under the policy. This is where the aim and commercial sense of the policy lie. Therefore, the proximate cause of loss should be perils of the sea and the loss should be recoverable. In conclusion, in conformity with the view expressed in Chapter Two Concurrent Causes, unlike internal risks of goods, it is legally possible that unseaworthiness and perils of the sea can be regarded as concurrent proximate causes when ascertaining the insurer’s liability.