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Limitation of liability may be claimed by way of defence or counterclaim in a damage action, and for such purpose it seems it is not necessary to admit liability. The Clutha (1876), 45 L. J. Ad. 108; 35 L. T. 36; and cf. note (a) to s. 504. But the claim to limitation must be pleaded. Wahlberg v. Young (1876), 45 L. J. C. P. 783; 24 W. R. 847.

As to proceeding by separate action, see s. 504.

As to application of this section to cases arising under the Workmen's Compensation Act, 1906, see ibid. s. 7.

(a) "Owners."-This term is not confined to registered, but includes equitable, owners. The Spirit of the Ocean (1865), B. & L. 336; 34 L. J. Ad. 74. And charterers by demise. See M. S. A. 1906, s. 71, which was enacted to remove the effect of the decision in The Hopper, No. 66, 75 L. J. P. 22; [1906] P. 34. As to part-owners, see note (d).

The shipowners are not disentitled to limitation of liability by the fact that they are carriers, e.g., a railway company carrying passengers and goods by their own ships. London & S. W. Ry. v. James (1872), 42 L. J. Ch. App. 337; L. R. 8 Ch. 241; The Normandy (1870), 39 L. J. Ad. 48; L. R. 3 A. & E. 152. The liability of a person contracting to carry passengers or goods by sea and procuring a shipowner to carry them, is not limited, though his right of recourse to the shipowner is limited. Doolan v. Midland Ry. (1877), 2 App. Cas. 792, p. 808; 37 L. T. 317; see also note (e).

But as to the liability of a railway company procuring carriage in vessels not belonging to themselves, see 34 & 35 Vict. c. 78, s. 12.

(b) "Ship." See s. 508, and definition in s. 742, and notes thereto.

The word "sca-going" preceded "ship" in this provision prior to 1862.

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(e) British or foreign."-The section places British and foreign ships on the same footing, and applies to a foreign ship whether she was the wrongdoer or the injured party, and whether the collision took place in British waters or not. Thus, where a collision took place on the high seas between a British and a Belgian vessel, and the latter was sunk, it was held that the owner of the British vessel was entitled to have his liability limited. The Amalia (1863), 1 Moo. P. C. C. (N. S.) 471; 32 L. J. Ad. 191.

The limitation does not extend to a British ship which is not "recognised" as such; see s. 508. But does extend to a British ship lawfully exempt from registration under this Act, The Brunel, 69 L. J. P. 8 ; [1900] P. 24; and to unregistered ship from and including the launching until registration under M. S. A. 1894, s. 2; see Merchant Shipping (Liability of Shipowners) Act, 1898; M. S. A. 1906, s. 70; and to a British fishing boat registered under Part IV. and not under Part I., Couper v. M'Kenzie (1906), 43 Sc. L. R. 416, and such a vessel is entitled to deduct crew space which has been certified by a Board of Trade surveyor for the purposes of registration under Part I. of this Act (ibid.). (d)" Fault or privity."-The fact that the loss is occasioned by the fault of one of several part-owners, e.g., a master, does not deprive his co-owners of the right of limited liability. The Spirit of the Ocean (1865), 34 L. J. Ad. 74 ; B. & L. 336; The Cricket (1882), 48 L. T. 535, n.; 5 Asp. M. L. C. 53; The Obey (1866), L. R. 1 A. & E. 102; 12 Jur. (N. S.) 817.

As to the circumstances which may or may not constitute "fault or privity," see The Obey, supra; Kidston v. Mc Arthur (1878), 5 Ct. of Sess. Cas. (4th Ser.) 936; The Warkworth (1884), 53 L. J. Ad. 4; 9 P. D. 20; on appeal, 53 L. J. Ad. 65; 9 P. D. 145; The Satanita, infra; and The Diamond, 75 L. J. P. 90; [1906] P. 282.

As to the case of loss or damage being caused by a breach of contract by the owners, see note (g).

(e)" Other things whatsoever on board the ship" includes passengers' luggage. The Stella, [1900] P. 161.-After a collision the cargo of a vessel in fault was transhipped by the master into other vessels, which were lost owing to the negligence of their masters and crews. The owners of the first vessel obtained

a decree limiting their liability arising out of the collision. In an action against them for non-delivery of the cargo lost, it was held that the decree in the limitation action did not apply to the present claim, for the loss of the cargo did not occur on board the ship in respect of which the owners' liability was limited. The Bernina (1886), 56 L. J. P. 38; 12 P. D. 36. See also note (a) and note (b).

(ƒ) “ Vessel.”—See definition in s. 742. In sub-s. (1) (ii), “ vessels ” is used

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where the more limited term "ships" occurred in M. S. A. 1862; elsewhere in the section it is substituted for "ships or boats," &c.

(g) "Improper navigation.”—Those words are not to be restricted to negligent navigation by the master and crew, for the statute includes all damage wrongfully done by one ship to another whilst it is being navigated, where the wrongful action of the ship by which damage is done is due to the negligence of any person for whom the owner is responsible. The Warkworth (1884), 53 L. J. P. 65; 9 P. D. 145 (C. A.). Therefore when a vessel, owing to the negligence of a person on shore in overlooking the machinery, steered so badly that she came into collision with another vessel, limitation of liability was decreed. Ibid.

The section applies to loss of or damage to a ship caused by improper navigation of a tug which had her in tow. Wahlberg v. Young, supra. And is not excluded merely because the injury arose from a breach of contract. Ibid., citing the judgment of Lord Selborne, L. C., in The London & S. W. Ry. Co. v. James, supra.

Cf. also the following cases on policies of insurance and bills of lading: Carmichael v. Liverpool Indemnity, &c. Association (1887), 19 Q. B. D. 242; 56 L. J. Q. B. 428; 57 L. T. 550; 35 W. R. 793; 6 Asp. M. L. C. 184 (C. A.); _Canada Shipping Co. v. British Shipowners', &c. Association (1889), 58 L. J. Q. B. 462; 23 Q. B. D. 342 (C. A.); Laurie v. Douglas, 15 M. & W. 746 (getting adrift in dock).

(i) "Damages."-The statute simply limits the owner's liability in damages, and does not otherwise relieve him from the consequences of his wrongful act. Thus, where the ship was raised by the Thames Conservators at the expense of the owner, who had paid into court the statutory amount of liability, he was held not entitled to any contribution by way of salvage or general average from the cargo owner. The Ettrick (1881), 6 P. D. 127; 4 Asp. M. L. C. 465 (C. A.) ; affirming 50 L. J. Ad. 65.

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Where under yacht racing rules, infringement thereof entailed a liability on the owner of the yacht to all damages" arising from improper navigation, this was read to mean that the owner was not entitled to limitation of liability in respect of damage caused to a competing yacht by improper navigation. The Satanita, 68 L. J. P. 1; [1897] A. C. 59.

Where both ships are to blame, the Admiralty rule as to division of loss applies; and if in such case the owners of one ship limit their liability, and pay the amount into court, the owners of the other ship are entitled to a moiety of their damage, less a moiety of the damage sustained by the first ship, and to prove against the fund in court for the balance. The Khedive (Stoomvaart Maatschappy Nederland v. Peninsular and Oriental S. N. Co.) (No. 2) (1882), 52 L. J. Ad. 1; 7 App. Cas. 795; overruling Chapman v. Royal Netherlands S. N. Co. (1879), 48 L. J. Ad. 449; 4 P. D. 157. See also per Brett, M. R., and Cotton, L. J., in The Hector (No. 2) (1883), 52 L. J. Ad. 51; 8 P. D. 218 (C. A.).

The owner of cargo damaged on board the ship of the defendant in a limitation action is not precluded by the findings in the damage action to which he was no party, and in which no one could be heard who was concerned to protect his interest, from showing the real value of the ship. C. A. Van Eijct and Zoon v. Somerville (S.S. Anglia and S.S. Olga), [1906] A. C. 489.

In all cases where the owner's liability is limited he is liable for interest upon the amount awarded from the date of the collision, whether the vessel injured was or was not earning freight. The principle here adopted by the Court of Admiralty differs from the rule at Common Law. The Northumbria (1869), 39 L. J. Ad. 3; L. R. 3 A. & E. 6; The Amalia (No. 2) (1864), 34 L. J. Ad. 21; 13 W. R. 111; Straker v. Hartland (1864), 34 L. J. Ch. 122; 2 H. & M. 570. And this is so whether there are several claims or only one. Smith v. Kirby (1875), 1 Q. B. D. 131; 24 W. R. 207; Owners of S.S. Olga v. Owners of S.S. Anglia (1904), 7 Crt. of Sess. Cas. (5th Series), 739.

The statute does not relieve the owner from liability to pay costs; as to which, see s. 504, and note (k) thereto.

As to the release of a vessel arrested in a damage action, upon payment into court of the amount of statutory liability, and a sum to cover interest and costs, see The Sisters (1875), 32 L. T. 837; 2 Asp. M. L. C. 589.

As to payment into court, bail, stay of proceedings, &c., see The Clutha, supra; The Alne Holme (No. 2) (1882), 47 L. T. 302; 4 Asp. M. L. C. 593; Milburn v. L. & S. W. Ry. Co. (1870), 40 L. J. Ex. 1; L. R. 6 Ex. 4; The

Expert (1877), 36 L. T. 258; 3 Asp. M. L. C. 381 (reference as to distribution, &c.).

As to practice generally, see also s. 504, and notes thereto.

The statute does not affect the jurisdiction of the court to arrest freight in a damage action. "It may turn out that the conjoint value of the ship and freight may not amount to the statutory measure of liability." The Orpheus (1871), 40 L. J. Ad. 24; L. R. 3 A. & E. 308, 312.

Under 53 Geo. 3, c. 159, which limited liability to the value of the ship, it was held that the owner's liability was not discharged by the sinking of his ship. Brown v. Wilkinson (1846), 15 M. & W. 391. The contrary appears to be the law in the United States. Norwich Co. v. Wright (1871), 13 Wall. 104.

As to competition between life and damage claims, see note (e) to s. 504.

(k) The section does not prevent owners from relieving themselves by their contract from all liability for negligence, or from contracting to be liable for an amount exceeding their statutory liability. The Stella, 69 L. J. Ad. 71; [1900] P. 161; The Satanita, supra.

(7) The words in clarendon are substituted for the words " gross tonnage without deduction on account of engine room by the M. S. A. 1906, s. 69.

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(m) "Tonnage."-For the provisions as to tonnage measurement, see ss. 77 et seq., and the 2nd and 6th Schedules.

The tonnage to be taken as the basis of the owner's liability is that appearing on the ship's register in force at the time of the collision, and neither party is entitled to the benefit of any subsequent register. The John McIntyre or The John Ormston (1881), 50 L. J. Adm. 76; 6 P. D. 200; The Dione (1885), 52 L. T. 61; 5 Asp. M. L. C. 347. But see The Recepta (1889), 58 L. J. P. 70; 14 P. D. 131, where evidence was admitted to show that the registered tonnage was not the correct tonnage at the time of collision. The copy of the register placed before the court must be a copy of the register at the time of the collision. The Rosslyn (1904), 10 Asp. M. L. C. 24; 92 L. T. 177. See also s. 82. And as to foreign registers, see note (n).

In the case of a sailing ship, master's and navigation spaces are to be deducted. The Pilgrim, 64 L. J. Ad. 78; [1895] P. 117.

"Registered tonnage with the addition of any engine room space deducted."-This amendment of this section has placed steamship and sailing ships on an equal footing, in so far that both classes of ships now may deduct navigation and other spaces from their tonnage in arriving at the amount of their liability. See 8. 79.

For the regulations as to these crew spaces, see s. 210 and the 6th Schedule, and M. S. A. 1906, s. 64.

(n) As to the tonnage of ships of a foreign country which has adopted the British tonnage regulations, see ss. 82, 84 (1862, ss. 60, 62, &c.), and the notes thereto, and M. S. A. 1906, ss. 54, 55.

(0) "On distinct occasions."-Where a ship comes into collision with two vessels one after the other, and the two collisions take place substantially at the same time and as the result of one act of improper navigation, the owner is entitled to limit his liability to one payment for the whole damage. The Rajah (1872), 41 L. J. Ad. 97; L. R. 3 A. & E. 539. The Creadon (1886), 54 L. T. 880; 5 Asp. M. L. C. 585. But where damage was caused to two vessels in succession by the improper starboarding of the ship in fault, it was held that as there was time between the two collisions to correct the mistake, the second collision took place on a "distinct occasion" from the first. The test is not the lapse of time but whether both collisions are the result of the same act of want of seamanship. The Schwan (The Albano), [1892] P. 419; 69 L. T. 34 (C. A.). In the case of damage caused by harbour docks or piers, &c., see Merchant Shipping (Liability of Shipowners and Others) Act, 1900, s. 3.

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504. Where any liability is alleged (a) to have been incurred Power of by the owner of a British or foreign ship (b) in respect of loss of courts to life, personal injury, or loss of or damage to vessels (c) or goods, claims against and several claims are made or apprehended in respect of that owners, &c. liability, then, the owner may apply in England and Ireland to [1854, s. 514; the High Court (d), or in Scotland to the Court of Session, or in 23 & 24 Vict.

Pt. VIII. 504.

24 & 25 Vict.

c. 10, s. 13;

30 & 31 Vict.

c. 114, s. 36;

J.A.; J.I.A.]

a British possession to any competent court, and that court may determine the amount of the owner's liability and may distribute that amount rateably (e) among the several claimants (ƒ), and may stay any proceedings pending (g) in any other court in relation to the same matter, and may proceed in such manner and subject to such regulations as to making persons interested parties to the proceedings, and as to the exclusion of any claimants who do not come in within a certain time (h), and as to requiring security (i) from the owner, and as to payment of any costs (), as the Court thinks just.

(a) A limitation action may be instituted by any owner without first admitting his liability. The Amalia (1863), 32 L. J. Ad. 191; 1 Moo. P. C. C. (N. S.) 471. The Sisters (1875), 32 L. T. 839; 2 Asp. M. L. C. 589; and see The Karo (1887), 57 L. J. P. 8; 13 P. D. 24; and cf. beginning of note to s. 503; but see Hill v. Audus (1855), 24 L. J. Ch. 229; 1 K. & J. 263.

Where he admits liability, but not otherwise, the court will stay actions brought for the purpose of establishing liability. See Miller v. Powell (1875) (Sc.), 2 Ct. of Sess. Cas. (3rd Ser.) 976.

(b) "Owner of a British or foreign ship" includes charterer by demise, see M. S. A. 1906, s. 71, and for the purposes of section 2 of the Merchant Shipping (Liability of Shipowners and Others) Act, 1900, a harbour or conservancy authority, and the owner of a canal or of a dock.

(c)" Vessels" has been substituted for "ships, boats "in M. S. A. 1854, s. 514. See definition, s. 742.

(d) See Rules of the Supreme Court (Merchant Shipping), 1894, R. 1, post, p. 763.

(e) "Rateably."-Where the amount paid into court, at the rate of 157. per ton, is insufficient to satisfy claims for loss of life and personal injuries, and for loss of goods, the court will marshal the assets; and the claimants in respect of loss of life, &c. are entitled to be paid first an amount equal to 77. per ton, and then to rank pari passu with the claimants in respect of loss of goods against the balance of 81. per ton. The Victoria (1888), 57 L. J. P. 103; 13 P. D. 125; and see The Khedive (Stoomvaart, &c. v. Peninsular and Oriental S. N. Co.) (No. 2), supra (s. 503, note (i)).

For the mode of distributing the amount among several life claimants, see Glaholm v. Barker (1866), 35 L. J. Ch. 657; L. R. 2 Eq. 598.

Where the owner has settled some of the claims out of court, he is entitled to have them taken into account in estimating the amount payable on the remaining claims. Rankine v. Raschen (1877) (Sc.), 4 Crt. of Sess. Cas. (4th Ser.) 725. And where all claims in respect of loss of life had been settled, an order was made, on payment into court of 81. per ton, restraining any action in respect of the collision. The Foscolino (1885), 5 Asp. M. L. C. 420; 52 L. T. 866. When the ship has been sold in an action abroad, claimants in a limitation action in this country must give credit for any sums recovered by them out of the proceeds of the sale abroad. The Crathie, infra.

(f) "Claimants."-The section applies to claims under Lord Campbell's Act. Glaholm v. Barker, supra; London & S. W. Ry. v. James, infra. Although the Admiralty Division has no jurisdiction in rem in cases under that Act. Per Brett, M. R., The Vera Cruz (1884), 53 L. J. P. 33; 9 P. D. 96.

As to claim by bottomry bondholder, see The Empusa (1879), 48 L. J. Ad. 36; 5 P. D. 6; by underwriter, Burrell v. Simpson (Sc.) (1876), 4 Ct. of Sess. Cas. (4th Ser.) 177; Sc. L. R. 120, 667; and by the Crown, The Zoe (1886), 55 L. J. P. 52; 11 P. D. 72.

Where a vessel sank another belonging to the same owner and he limited his liability as owner of the former, underwriters, who had paid him insurance upon the latter, were held not entitled to claim upon the fund, as the owner himself could not have done so and they were no more than his assignees. Simpson v. Thomson (Sc.), 5 Crt. of Sess. Cas. (4 Ser.), H. L. 40.

(g) "Proceedings pending, &c."-Thus, under the Act of 1854, an injunction was granted by the Court of Chancery staying proceedings in the Admiralty Court, in Leycester v. Logan (1857), 3 K. & J. 446; 26 L. J. Ch. 306.

And actions which had been brought at common law for breach of contract (except for loss by delay), and under Lord Campbell's Act, were restrained in London & S. W. Ry. v. James (1872), 42 L. J. Ch. 337; L. R. 8 Ch. 241; The Normandy (1870), 39 L. J. Ad. 48; L. R. 3 A. & E. 152; and see The Nereid, infra. The King's Bench Division can refuse to allow an action under Lord Campbell's Act to be transferred to the Admiralty Division, or to order a stay of the proceedings. Roche v. London & S. W. Ry. Co., 68 L. J. K. B. 1041; [1899] 2 Q. B. 502. An order to stay proceedings does not stop an action only for assessment of damages. Leadbetter v. Dublin Steam Packet Co. (1907), 44 Sc. L. R. 379.

(h) See The Zoe, supra. Where the usual advertisements have been issued, but all the life claims have not been entered within the limit of time specified in the advertisements, the court will order any unappropriated balance of the fund available for the life claims to be paid back to the plaintiffs in the limitation action. The Alma, 72 L. J. P. 21; [1903] P. 55.

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(i) Security." ."-On payment into court of 87. per ton actions for damage to ship and goods were stayed; but not actions for loss of life, though plaintiffs were ordered to give security for the difference between 87. and 15. per ton in respect of such claims. The Nereid (1889), 58 L. J. P. 51; 14 P. D. 78; and see The Dione (1885), 52 L. T. 61; 5 Asp. M. L. C. 347.

When bail has been given for the amount of possible life claims, interest at 4 per cent. is payable on the amount from the date of the collision until payment into court as part of the damages. The Crathie, 66 L. J. P. 93; [1897] P. 178.

() As to costs in actions for limitation of liability, see The Empusa (1879), 48 L. J. Adm. 36; 5 P. D. 6; The African S. S. Co. v. Swanzy and Kennedy (1856), 25 L. J. Ch. 870; 2 K. & J. 660; The Ponce (1879), 4 Asp. M. L. C. 185, n.; The Expert (1877), 3 Asp. M. L. C. 381; 36 L. T. 258; The Warkworth, supra; Carron v. Cayzer (1885) (Sc.), 13 Crt. of Sess. Cas. (4th Ser.) 114.

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505-507.

respect of

505. All sums paid for or on account of any loss or damage Part owners in respect whereof the liability of owners (a) is limited under the to account in provisions of this Part of this Act, and all costs incurred in damages. relation thereto, may be brought into account among part [1854, s. 515.] owners of the same ship in the same manner as money disbursed for the use thereof.

(a) “Owners” includes charterers by demise. M. S. A. 1906, s. 71.

risks not

506. An insurance effected against the happening, without Insurances the owner's actual fault or privity, of any or all of the events in of certain respect of which the liability of owners is limited under this invalid. Part of this Act shall not be invalid by reason of the nature of [1862, s. 55.] the risk.

Sect. 55 of 1862, which corresponds with this section, only referred to cases of limitation of liability now covered by s. 503 of this M. S. A. 1894; but s. 506 of M. S. A. 1894 in terms applies to cases under s. 502 of that Act. By the Stamp Act, 1891, s. 93 (1), contracts of insurance to which s. 55 of 1862 applied need not be made in a policy of an insurance. It is doubtful whether s. 38 of the Interpretation Act, 1889, which in effect substitutes for the reference to s. 55 of 1862 in the Stamp Act, 1891, s. 93 (1), a reference to s. 506 of M. S. A. 1894 has extended the provisions of s. 93 (1) of the Stamp Act, 1891, to cases of insurance of risks arising under s. 502 of M. S. A. 1891.

Cf. s. 335, as to similar provisions as to insurance of passage money.

507. In any proceeding under this Part of this Act against Proof of pasthe owner (a) of a ship or share therein with respect to loss of sengers on board ship. life, the passenger lists under the Third Part of this Act (b) [1862, s. 56.]

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