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T-2025-76
Owners, Master and Crew of the vessel Walther Herwig, being Bundesminister fuer Ernaehrung, Landwirtschaft and Forsten, Bonn, as a Minister of the Government of the Federal Republic of Germany (Owners), and Captain Theodor Fre- richs, of Hamburg, Federal Republic of Germany, (Master), for and on behalf of themselves and of the members of the crew of the vessel Walther Herwig (Plaintiffs)
v.
Fishery Products Limited and the vessel Zambezi (Defendants)
Trial Division, Marceau J.—Ottawa, May 16 and 25, 1977.
Maritime law — Salvage — Salvage vessel owned by for eign government — Whether that owner can claim salvage award — Whether interest payable on award — Canada Shipping Act, R.S.C. 1970, c. S-9, s. 531(1).
The owner, master and crew of the Walther Herwig, a research vessel owned by the West German Government, claim a salvage reward for salving the vessel Zambezi in 1973. The defendants, while admitting the entitlement of the master and crew to their share of the award, deny the entitlement of the owner to its share. The question of the owner's entitlement, and a question as to whether interest can be allowed on the awarded amount, the rate permitted and the period for which interest should be payable are submitted to the Court for adjudication in lieu of trial.
Held, the West German Government is entitled to its share, and interest is allowable from the date of the filing of the statement of claim, at the lowest prime rate since the time of salvage. The general rule is that the owner of a ship called upon to render salvage services is entitled to and has a right to claim a salvage reward. The defendants rely on the restriction with respect to salvage services rendered by Canadian ships, and the doctrine of sovereign immunity. The doctrine of immunity has nothing to do with the question raised here. There is no reason why State-owned ships should be excepted from the general rule and prescribed from claiming a well-deserved and fair reward in respect of salvage services. Salvors, in principle, are not allowed any interest since services are rendered voluntarily, without pre-existing contractual obligations or official duty to the owner of the salvaged vessel. But if, through no fault of the salvors, a long delay has occurred between the time of salvage and the date of the award, that delay may be taken into account. Since the services occurred three years ago, and in the absence of evidence about the cause of the delay, interest is allowed from the date of the filing of the statement of claim.
ADJUDICATION. COUNSEL:
R. G. Chauvin, Q. C., for plaintiffs. P. J. Lewis, Q. C., for defendants.
SOLICITORS:
Chauvin, Marler & Baudry, Montreal, for
plaintiffs.
Lewis & Sinnott, St. John's, for defendants.
The following are the reasons for judgment rendered in English by
MARCEAU J.: The plaintiff Bundesminister fuer Ernaehrung, Landwirtschaft and Forsten, Bonn, as a Minister of the Government of the Federal Republic of Germany ("Plaintiff the Bundesminis- ter") and the defendants in this action have con curred in stipulating and admitting the facts relat ing to their dispute herein and in stating the questions arising in the form of a special case for adjudication in lieu of trial.
The subject matter of the action is a claim for salvage reward.
In October 1973, while crossing the Atlantic Ocean from Norway to Newfoundland, the vessel Zambezi, property of the defendant company, became without motive power and in great danger of being lost. She was then assisted and salved by the Master and crew of the vessel Walther Herwig, a fishery research vessel owned by the plaintiff as Minister of the Government of the Federal Repub lic of Germany. From October 20 to October 25, the Walther Herwig towed the Zambezi from international into Canadian waters and to her originally intended destination. A salvage reward was thereafter claimed by the owner of the Walth- er Herwig, as well as by her Master and crew. Lengthy negotiations followed but they failed to bring any positive result. The action was finally instituted by the Bundesminister and the Master and crew.
Since the action was launched, the dispute be tween the parties became simplified. The value of the salvage services was assessed at $58,050 and it was agreed that the amount arrived at needed to be apportioned one third for the Master and crew and two thirds for the owner. While denying the right of the Bundesminister to claim any part of the amount, the defendants admitted that the Master and crew were entitled to remuneration for their services. They tendered and brought into Court the sum of $19,350 as final settlement for that part of the claim. The Master and crew accepted the tender without admission that they were not entitled to interest thereon and without prejudice to any right or recourse of the owner.
The first question for adjudication is therefore formulated for the parties in their stated case as follows:
Whether Plaintiff the Bundesminister, as owner of the vessel "WALTHER HERWIG", is entitled to a reward, and to judgment therefor, in respect of the salvage services rendered as hereina- bove stated, such reward, if he is entitled thereto, needing to be $38,700.00.
The defendants deny the right of the Bundes- minister (as owner) to any amount for salvage services rendered on the ground that the Walther Herwig being owned by a government and not being engaged in general trading but rather as a fishing research vessel, her owner is not entitled to such an award. By the Comity of Nations, they say, State-owned ships cannot claim award for salvage services rendered.
What would be the basis for such an important exception to the general rule that the owner of a ship called upon to render salvage services is en titled to and has a right to claim a salvage reward (sections 515 et seq. of the Canada Shipping Act, R.S.C. 1970, c. S-9)? Counsel for the defendants, as I understood his argument, relies on the overall picture, so to speak, drawn from the restriction which existed in England and still exists here
(section 531(1) of the Canada Shipping Act') with respect to salvage services rendered by ships belonging to Her Majesty, as well as from the well known doctrine of sovereign immunity recognized internationally and specially by our courts. But, I fail to see how the restriction referred to—which was abolished in England more than thirty years ago by the Crown Proceedings Act, 1947, c. 44, s. 8(2)—would be proof of the existence of any binding rule of international law, and, in my view, the doctrine of immunity, which concerns the pos sibility of impleading a foreign sovereign in the courts of a country, has nothing to do with the question raised here. I am unable to understand why State-owned ships should be excepted from the general rule and precluded from claiming a well deserved and fair award in respect of salvage services they have been called upon to render.
My answer to the first question is in the affirmative.
The second question is:
Whether Plaintiff the Bundesminister is entitled, if he is en titled to the salvage reward mentioned in the preceding ques tion, to interest on the said amount of $38,700.00, and if so, from what date and at what rate.
The right of a salvor to be rewarded for his salvage services, although formally recognized by the Canada Shipping Act, is a very peculiar one governed by traditional admiralty rules. It must be borne in mind that the services for which the award is claimed were rendered voluntarily and
531. (1) Where salvage services are rendered by a ship belonging to Her Majesty, other than a ship specially equipped with a salvage plant or a tug, or by the commander or crew thereof, no claim shall be allowed for any loss, damage, or risk caused to the ship or its stores, tackle, or furniture, or for the use of any stores or other articles belonging to Her Majesty, supplied in order to effect those services, or for any other expense or loss sustained by Her Majesty by reason of that service, and no claim for salvage services by the commander or crew, or part of the crew of a ship belonging to Her Majesty shall be finally adjudicated upon, unless the consent of the Governor in Council to the prosecution of that claim is proved; and such consent may be given at any time before final adjudication.
were not attributable to any pre-existing contrac tual or official duty owed to the owner of the salved property. That, in principle, salvors are not entitled to any allowance for interest is easily understandable (The "De Bay" (1883) 8 App. Cas. 559). It is recognized, however, that if, "through no fault of the salvors there has been a long interval between the date when the services terminated and the date when the award is to be made, such delay would be a matter to be taken into account" (Kennedy, Civil Salvage, 4th ed., p. 224). On that basis, in view of the fact that the services were rendered more than three years ago but in the absence of any evidence as to the cause of the delay prior to the action, I am prepared to grant interest from the date of the filing of the statement of claim, May 27, 1976, at the rate of 8.25% which is, according to the parties them selves, the minimum "prime rate" charged for loans by financial institutions to their clients be tween 1973 and 1977.
As to the third question submitted for adjudica tion, my answer is that I see no reason why the plaintiff should not be entitled to his costs in the present action.
Judgment will go accordingly.
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