Law of Dire Peril

Sun (Auckland), Volume II, Issue 460, 15 September 1928, Page 12

Law of Dire Peril

Romance of “General Average”

Saint Paul to The Port Napier IX a romantic parade, from days ■when Mediterranean mariners, in dire straits, heaved over part of tlieir cargo to get to haven, down through the years of maritime endeavour, to the latest incident, the fire on the Port Napier, the history of the Act of General Average stretches—a record of strange happenings. Probably Roman shopkeepers were just as puzzled over the intricacies of the law governing it as many small merchants of New Zealand are to-day.

TN maritime law the term originally meant the contribution made by all to the loss suffered by one. The case arose when, to lighten a ship in a storm, certain goods had to be cast overboard to save the vessel and the rest of the cargo. The owners of the ship, freight and cargo saved had to contribute pro rata to make good the loss of the cargo jettisoned. The skipper of the ship in which St. Paul was sailing to Rome committed a general average act when he “lightened the ship and cast the wheat into the sea.” But even that and the many anchors did not save her. Now the meaning has widened out to include many kinds of marine misfortunes, or rather the steps taken to prevent them. A 3Q, per cent, general average has been declared on the Port Napier, which, sailing from Panama to Suva, had to put into Pago Pago, because of an explosion and fire. With fires double-banked the ship raced for the nearest port. The fire, which was put out with the aid of the American naval men, was limited *to the No. 4 shelter deck, where the cargo was destroyed. The ’tween deck cargo was charred and the No. 4 hold damaged by water. The act of the master, faced with imminent danger, in battening down and racing for a port, evidently constituted one of general average. AN ANCIENT LAW Writers on insurance are not agreed as to the etymology of the word “average,” but the term “avarie,” applied to the same uses, is found in the language of every maritime nation in Europe. It has survived with the men who go down to the sea in ships for 1,800 year?. The legal definition of the term reads, “the law relating to general average regards ship and cargo together as one combined adventure, comprising a variety of interests all exposed to the perils of the sea and equally concerned under a common danger in the averting of a total loss; and it prescribes, in case of sacrifice of part for the preservation of what remains of the common adventure, that the loss accruing by reason of the sacrifice shall be assessed upon the value of what remains, together wttth the value of the thing sacrificed, in order to recoup the loser and place him onc # e more on a footing with his co-adventurers.”

In practical life, general average is an indefinite phrase to denote three things which are distinguishable, the act of making the sacrifice, the loss sustained as the direct consequence of that act, and the contribution levied on the adventurer to recoup the loser. Under the Maritime Insurance Act, 1906, it is recognised (1) as a loss caused by or directly consequential on a general average act. It includes a general average expenditure as well as a general average sacrifice. (2) 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. (3) 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. “DELIBERATE SACRIFICE”

The law now universally observed is derived from the Rhodians, who had a form of marine insurance in 916 8.C., through the ancient Romans,

The act must be a voluntary act on the part of man, “a deliberate sacrifice to appease the exigency of the crisis, as distinguished from the chance result of the operation, say, of the natural elements.” Thus, if a storm arises and is making a clean breach over the ship or the ship is on her beam ends, the master, by casting part of the cargo overboard, or cutting away the masts, does a general average act to save the ship. But if the storm were to do the same thing by washing out the goods and snapping the masts, the loss resulting, although attended with benefit to the residue of the adventure, would fall upon the respective owners of the property carried away and would be called a particular average. It is also laid down that an act within the compass of the ordinary duties of the shipowners cannot be regarded as a general average act. Danger may be pressing and the efforts to escape it may be attended with loss; but if the means employed come within the shipowners’ contract to carry, the loss falls only upon himself. IN TIME OF WAR

If an armed merchantman, in time of war, engages an enemy and .suffers damage to hull, rigging, cargo or crew, the law says that it was her duty to engage the enemy and she must brave her misfortunes without recourse to the co-adventurers. Similarly, if she tries to escape and, under press of sail, suffers injury from straining or the loss of masts, she is only doing her duty. A ship which, disabled by the seaperils from carrying sail, came home under auxiliary screw at an increased cost of £1,400, was held by the Court not to have committed the act.

But the result was different in the case of a vessel which, after the coal, adequate for the voyage, had given out burnt cargo and spars to keep the donkey engine going and to hold a leak in check. The claim of general average for the cargo and spars was held good. Spars cut up to make a rudder or sails used to stop a leak have been held to be similar claims. A steamer, aground on a bank in a position of great danger, was got off by working her engines ahead and astern. The injury to the engines and the extra coal were good general average claims. There is a flavour of romance about the famous French skipper who created a precedent. Pursued all day by the enemy, he waited for nightfall to launch his long boat fitted with sail and lantern. Then, hauling down his own lights, he set off on another course, giving the enemy the slip. The loss of the long boat was held to be general average loss. There are some adamant rules about general. average acts. They must be done for the common benefit and they must be to avert a total loss. An intricate mass of detail is woven about them now, and “general average” is one of the most difficult things in marine insurance.

In the case of the Port Napier, the surveyors have estimated that the loss is 30 per cent, of the whole. An importer who has cargo, say of c.i.f. and e. value of £IOO on board,, pays to the shipping company a general average deposit of 30 per cent, on this amount, plus 10 per cent. The deposit is returned by the underwriters after a detailed survey has been made, if the goods are insured.

If the goods are so badly damaged as to be worthless, the merchant does not pay a deposit, but simply puts in his claim to the underwriters.