A. MEREDITH JONES & CO. LTD. v. VANGEMAR SHIPPING CO. LTD. (THE “APOSTOLIS”) (NO. 2)

On a remission following an appellate decision, the lower court must implement the appellate court’s findings and determine their legal consequences. It must not reopen factual issues or conduct a fresh trial unless the order clearly requires that course.

Where competing causes of an event have both failed to be established, the remitted court must not treat one cause as proved merely because another was rejected. Contractual provisions must be construed as a whole. A clause requiring stevedore damage to be settled directly between carrier and stevedore may exclude a cargo owner’s liability for that damage, while leaving separate claims such as demurrage unaffected.

A cargo fire aboard the Apostolis led to a claim under the Hague-Visby Rules and a counterclaim by the owners for damage to the vessel, general average and demurrage. Tuckey J found welding to be the cause and entered judgment for the cargo interests.

The earlier Court of Appeal allowed the appeal, dismissed the cargo claim and remitted the counterclaim. It did not establish either welding or a stevedore’s discarded cigarette as the cause of the fire. On remission, Longmore J treated the cigarette as the probable cause, awarded damages for ship damage and rejected the demurrage defence. The present appeals concerned the scope of the remission, the contractual allocation of stevedore liability and the demurrage clause.

1. Scope of remission. The Merchant’s appeal was allowed in relation to the counterclaim for damage to the ship. The earlier Court of Appeal had found that welding was not established as a cause and that a stevedore’s discarded cigarette was also not established on the balance of probabilities. The Commercial Court was required to work out the legal consequences of those findings, not conduct a further fact-finding exercise. The contrary interpretation, that the cigarette had been positively established as the cause, was inconsistent with the language of the earlier judgments.
2. Because neither competing cause had been established, the owners’ claim for physical damage to the ship failed. The present court declined to review the earlier Court of Appeal’s factual findings or expressions of opinion.
3. Stevedore liability. The contractual provisions had to be construed as a whole. Clause 3 would ordinarily imply an obligation to load and stow with reasonable skill and care. However, clause 20 clearly required stevedore damage to be settled directly between carrier and stevedore, with the Merchant giving assistance. If a stevedore’s cigarette had been established as the cause, clause 20 would have answered the owners’ claim for damage to the ship. It did not necessarily exclude every possible claim connected with loading and stowage, and did not address demurrage.
4. Demurrage. The phrase in clause 3 referring to a cause beyond the Merchant’s control concerned causes which, under the contract, were outside the Merchant’s contractual control. The stevedores were treated as being under the Merchant’s control for that purpose. Since the court could not determine whether the fire was caused by welding or by a stevedore’s cigarette, the contractual defence was not made out and the owners’ demurrage claim succeeded.
5. The owners’ cross-appeal on demurrage was allowed. The court gave a provisional view that the recoverable diminution in the vessel’s value might have been only US$25,000 or US$50,000, but it was unnecessary to decide the damages issue finally. Costs were ordered substantially in favour of the Merchant, and leave to appeal to the House of Lords was refused.

• Court of Appeal (earlier decision) allowed the owners’ appeal, dismissed the cargo claim and remitted the counterclaim to the Commercial Court.
• Commercial Court Longmore J interpreted the remission as permitting consideration of causation, found a stevedore’s cigarette to be the probable cause, awarded damages for ship damage and rejected the demurrage claim.
• Court of Appeal (present decision) allowed the Merchant’s appeal on ship damage and the owners’ cross-appeal on demurrage, holding that the remission did not permit fresh fact-finding.