Shaw Savill & Albion Co Ltd v The Commonwealth [1953] HCA 24

High Court of Australia Dixon C.J. Shaw Savill & Albion Co Ltd v The Commonwealth [1953] HCA 24

ORDER In answer to the question in the special case stated by way of reference from the principal registrar determine that interest is payable on the sum of £24,263 7s. 7d. by way of damages. Defendant to pay the costs of the said reference.

Cur. adv. vult.

Dixon C.J. delivered the following written judgment:—

May 4 Dixon C.J.

This matter comes before me as a reference from the principal registrar.

The plaintiffs as the owners of the motor vessel Coptic brought this suit against the Commonwealth seeking a decree for the damage caused to that ship as a result of H.M.A.S. Adelaide colliding with her in the early hours of the morning of 3rd September 1940. The Court ultimately pronounced against the Commonwealth and a decree was made containing a reference to the registrar to assess the amount of the damage. The parties agreed on the amount of the damage which should thus be assessed except that the Commonwealth was not prepared to accept the view that the amount of the damage should bear interest. The amount agreed upon, which has now been paid, is £24,263 7s. 7d. The question which has been referred is in substance whether interest on what otherwise is the agreed amount of the damage should be included in the assessment.

"The principle adopted by the Admiralty Court has been that of the civil law, that interest was always due to the obligee when payment was not made, ex mora of the obligor; and that, whether the obligation arose ex contractu or ex delicto", per Sir Robert Phillimore, The Northumbria [1] . "Generally the Court of Admiralty is governed by the civil law, the law marine, and law merchant", per Sir John Nicholl, The Neptune [2] . As a result it has long been settled that prima facie interest must be included in the assessment of damages decreed in the Admiralty jurisdiction in cases of collision. In cases of total loss if the ship is in ballast it is calculated from the casualty to the date of payment of the sum awarded. If freight is earned and paid or recovered, interest begins where freight ends. Where the ship is not sunk and the damage consists in the cost of repairs interest runs from the owner's payment of the repair bill. "The sum so calculated is given not as interest on a debt but as part of the damages", per Sir Henry Duke P., The Joannis Vatis (No. 2) [3] . "Upon what grounds, then, was interest given? Interest was not given by reason of indemnification for the loss, for the loss was the damage which had accrued; but interest was given for this reason, namely, that the loss was not paid at the proper time. If a man is kept out of his money, it is a loss in the common sense of the word, but a loss of a totally different description, and clearly to be distinguished from a loss which has occurred by damage done at the moment of collision", per Dr. Lushington, The Amalia [1] .