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Deviation Notes

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DEVIATION
Summary
Deviation
What is deviation, and when is it permitted?
- Deviation -> Deliberate departure of the carrier from the ordinary/customary route

If it's not deliberate, then you've just gotten lost

NOTE: negligent deviation -> excepted peril under H-V rules
- When is it permitted at common law?
o Where necessary to save life, or avoid damage to ship or cargo
- Does it matter that deviation is necessary due to initial unseaworthiness?
o NO (Kish v Taylor)
o Thus, even if the reason for the deviation is for a prior breach by the carrier, the deviation is still justified in those circumstances
- Three reasons for a duty not to deviate:
o Davis v Garrett: (1) to prevent delay; (2) because the risks associated with usual route were the only things the freighter could take into account when entering into a contract; and (3) because the effect of deviation by the carrier would be to avoid a freighter's policy insuring the goods for the declared voyage.
What is the effect of deviation?
- Clearly a breach of condition
- Clash between Thorley and Hain

In Thorley -> upon deviation, the contract is displaced automatically, without reference to the wishes of the innocent party
(condition precedent analysis)
 Exclusion clauses are displaced from the start of the voyage

In Hain, Lord Atkin makes the point that it's a repudiatory breach that entitles the innocent party to terminate the contract
(repudiatory breach analysis)
 i.e. The Hain analysis leaves it up to the choice of the innocent party
 Exclusion clauses are displaced from the moment of deviation
- Two difficulties with Thorley and Hain

(a) In Hain, the termination has retrospective effect
 This departs from the modern approach to termination
 Usually the effects of termination are prospective not retrospective
 That's one difficulty with reconciling Hain with a modern approach to termination
 Modern approach means they would only be entitled to terminate when they have knowledge, and most of the time they will only know upon arrival, so that they will still have to pay under the contract of carriage ->
termination only prospective
 Not many cases dealing with this

(b) ANOTHER difficulty: Both cases also seem to assume that the effect of termination is to wipe out the effect of exclusion clauses 1 -

But usually termination just wipes out primary obligations but not necessarily affecting any exclusion/limitation clauses

Effects of deviation

1) Carrier cannot rely on any exemption clauses
 Why does this happen?
 In Thorley -> upon deviation, the contract is displaced automatically
 In Hain -> the innocent party can opt to retrospectively terminate
 For e.g. it would exclude the H-V excepted perils
 On a modern view, you should look at the construction of the contract and parties intentions in deciding whether the exclusion and limitation clauses should still apply in the event of deviation
 It is still an open question whether the time-bar under HV
rules applies in cases of deviation
 On a strict Thorley view, we would say that all exclusion clauses cannot be relied on
 But on a modern construction approach, the time-bar could survive

Could argue that while deviation may increase the risk to the goods, it does not make it any more difficult to bring a claim within 12 months!
o Thus, cannot have been the parties' intentions to exclude the time-bar upon deviation

Could argue that the Courts are likely to adopt the modern approach once a suitable case comes before them -> as signalled by Antares

2) Freight
 Under traditional view, owner loses the right to freight from the point of deviation
 They may still be entitled for payment at an objective market rate for the service provided, assuming that they do get the cargo to the destination
 It is an open question whether the shipper/indorsee is still liable to pay remuneration for carriage if he chooses to claim his goods (Hain Steamship)
 Under a modern approach, this would all depend on the timing
 If you terminate before the obligation to pay freight arises, you don't have to pay
 But if you find out too late, and terminate after the obligation arises, you still have to pay
 DN: I think when a suitable case comes along, they will ditch the old cases and take the modern approach, similarly to the deck stowage cases
H-V Rules allow (1) deviation to save life or property at sea, and (2)
reasonable deviation

DN: deviating to pick up extra cargo is clearly not reasonable

Deck Stowage
Authorised Deck Stowage 2

These goods will not be covered under the H-V rules, if (1) the CoC states that they will be carried on deck and (2) they are carried on deck (Art I(c)),
and (3) if the H-V rules apply automatically, and not by express provisionArt I(c) doesn't apply if contract of carriage expressly incorporates the H-V
rules

So Art I(c) only excludes the H-V rules if the H-V rules originally apply automatically by force of law
NOTE: the CoC must state that the goods will be carried on deck, not merely that they can be carried on deck
If the HV rules don't apply, then apply the common law rules from VolcafeUnauthorised Deck Stowage
- Deck stowage is not treated as a special case, subject to ordinary principles of contract (Antares)
o i.e. it is a question of construction whether exemption clauses apply, doctrine of fundamental breach does not apply

"The sole question therefore is whether, on its true construction,
art. III, r. 6 applies. It is clear that it does"Thus, time-bar still applies despite unauthorised deck stowage (Antares)
Art IV R5 HVR (package limitation rule) also applies (Kapitan Petko
Voivoda)
o This case concerned the Hague rules -> although likely to apply to
H-V rules as wellIn cases of unauthorised deck stowage, you can sue BOTH under (1) Art III
R2 and (2) breach of separate contractual term (assuming there is a contractual term that prohibits deck stowage)
o The benefit of the latter is that you can avoid the excepted perils!
Although the time bar and package limitations still apply

Kish v. Taylor [1912] A.C. 604
Facts
- Charterers failed to load a full cargo as required by the charterparty
- The master, to minimize the loss, procured a cargo from other sources and overloaded the deck to such an extent as to render the ship unseaworthy.
o In consequence of her unseaworthiness the ship was obliged to deviate from her course in order to put into a port of refuge for repairs, and, after repairing, she completed the voyage in safety.
- Shipowners brought a claim under the charterparty to a lien on the cargo for dead freight

The charterparty provided that the master or owners were to have an absolute lien upon the cargo for all freight, dead freight,
demurrage, or average.
- NOTE: shipowners did not seem to be trying to take advantage of their own wrong, but merely to claim the lien they would originally have been due if not for them overloading the ship and deviating

3 Charterers argued that the deviation constituted a new voyage, and therefore the B/L, charterparty, or both, were void ab initio
(Lord Atkinson, with whom the rest of the HL agreed)
1) Counsel for the cargo-owners made two arguments

(a) First, they contend that, as every shipowner is held to warrant the seaworthiness of his ship, the breach of that warranty puts an end to the contract of affreightment contained in the bill of lading,
which becomes, they say, void ab initio, and consequently that,
though the goods in specie have been duly carried to their destination undamaged, the indorsees of the bill of lading are only obliged to pay the shipowners for their service such sum as they may be entitled to as common carriers by sea instead of the remuneration stipulated for in the bill of lading."
o (b) Second, they contend that the deviation to the port of Halifax was unjustifiable in this respect, that however necessary it may have been in order to save the ship and cargo and the lives of her crew owing to the perilous condition to which the vessel was in fact reduced, yet, as that condition was in part due to the act of the master in overloading her with deck cargo to such an extent as to make her unseaworthy, the deviation must be treated as a deviation made without any necessity whatever, a gratuitous alteration of the voyage rendering the contract of affreightment contained in the bill of lading void ab initio 2) Lord Atkinson rejected the first submission

"No authorities were cited in support of this proposition. I think it is in conflict with the principles of English law."
o "Having regard, therefore, to the authorities I have cited and the absence of all authority to support the respondents' contention on their first point, it is, I think, unsound and unsustainable according to the law of this country."
3) With regards to the second submission, it is the prima facie duty of the master of a ship to deviate and seek a place of safety, if it is reasonably necessary to save his ship and the lives of his crew

"On the second point it is not disputed that it is prima facie not only the right but the duty of the master of a ship to deviate from the course of his voyage and seek a harbour or place of safety, if that be reasonably necessary in order to save his ship and the lives of his crew from the perils which beset them"
4) The question under dispute: if deviation became necessary because of a master's own culpable act or breach, did that avoid the contract of carriage

"Is it the presence of the peril and not its cause which determines the character of the deviation, or must the master of every ship be left in this dilemma, that whenever, by his own culpable act, or a breach of contract by his owner, he finds his ship in a perilous position, he must continue on his voyage at all hazards, or only seek safety under the penalty of forfeiting the contract of affreightment?"
5) Allowing the charterer's contention would put lives and property at risk

"Nothing could, it would appear to me, tend more to increase the dangers to which life and property are exposed at sea than to hold that the law of England obliged the master of a merchant ship to choose between such alternatives."
o

Held--4 -6) Furthermore, the shipowners here were not trying to take advantage of their own wrong: they are merely trying to make a claim which arose even before their own wrongdoing

"The present case is wholly different. Here the claim of the appellants arose before they were in default at all. It does not spring from their default; it is entirely independent of their default"
o It is the "respondents, not the appellants, who seek to take advantage of the appellants' wrong"
7) Overall, a master is justified in making deviation to save his ship and the lives of his crew, whatever the cause of the peril

In so doing, the contract of affreightment does not come to an end,
and no rights of the shipowners are lost

"I am of opinion that a master, whose ship is, from whatever cause,
in a perilous position, does right in making such a deviation from his voyage as is necessary to save his ship and the lives of his crew,
and that while the right to recover damages from all breaches of contract, and all wrongful acts committed either by himself or by the owners of his ship, is preserved to those who are thereby wronged or injured, the contract of affreightment is not put an end to by such a deviation, nor are the rights of the owners under it lost."

Dockray, 'Deviation: a Doctrine all at Sea?' [2000] LMCLQ 76

1. Introduction
- The doctrine of deviation is a long-standing feature of English maritime law.
- Deviation, in this context, means the voluntary and unjustified departure of a ship from her agreed route.
- In the law of carriage of goods by sea, deviation is treated as a breach of contract which has special consequences.
o The House of Lords decided in Hain Steamship v. Tate & Lyle that,
however minor or harmless a deviation might be, a breach of this type always gives the innocent party the right to treat the contract of affreightment as having ended at the moment the deviation began.
o Where an election of this type is made, then, from the commencement of the deviation, the innocent party is not bound by exclusion clauses or by any other term in the contract in favour of the carrier, including the obligation to pay freight on delivery of the cargo.
 [note that the effect of termination following deviation is retrospective under Hain Steamship, which conflicts with the modern approach]
- The Hain approach to the effect of deviation on carriage contracts contributed to the development of the idea that a fundamental breach of contract had a special effect in English law.
o That general idea, however, was discarded by the House of Lords in
Suisse Atlantique and Photo Production v. Securicor

But the decision in Hain was not overruled so that the law relating to deviation in contracts for the carriage of goods in a ship is now hopelessly at odds with the general law of contract
- How did this happen? And does it matter? This article tries to answer these questions by looking at the origins and subsequent evolution of the doctrine.
5 It concentrates on three key decisions and argues that the present position was reached only in stages.
o Part I deals with origins and the case of Davis v. Garrett in 1830; it suggests that the roots of the doctrine are older than is usually supposed and lie in the law of bailment, admiralty law and the law merchant.
o Part II deals with the period 1890-1936 and suggests an explanation for the puzzling judgment of the Court of Appeal in
Balian v. Joly, Victoria, which triggered developments in this period.
o Part III deals with the way in which earlier doctrine was revised by the House of Lords in 1936 in Hain.
- The article concludes that the modern law relating to the effect of deviation on a carriage contract is unjustified

It also concludes that the law is sometimes unfair, could be changed without risk and therefore ought to be altered.

2. Origins
- The common law origin of the doctrine of deviation as it applies to carriage contracts is usually traced to the judgment of the Court of
Common Pleas in 1830 in the case of Davis v. Garrett

o Court held "the law does imply a duty in the owner of a vessel,
whether a general ship or hired for the special purpose of the voyage, to proceed without unnecessary deviation in the usual and customary course."
Doctrine and policy
- The decision in Davis v. Garrett is usually taken to be the starting point of the line of cases dealing with deviation.
o This is a natural reading of a judgment in which the court unequivocally recognized a legal duty not to deviate from route but cited no previous authority in support of its conclusion.
- This reading overlooks an older history.
o Some conduct which is treated as a deviation today was regarded as wrongful long before Davis was decided, as, for example, when a ship chartered to carry and discharge at one place, without lawful excuse discharges the cargo at another place or alternatively carries the cargo to and then beyond the agreed place
- And for many years before Davis, parties to contracts of affreightment and other maritime contracts chose on occasion to make an express agreement as to route

But the question for the court in Davis v. Garrett was whether an obligation to carry goods by a particular route was to be implied if not created expressly

In 1830, there was no clear authority in the law reports recognizing an implied general duty not to deviate from route.
o There were, however, statements in a number of published works in
English—starting with admiralty texts of the 17th century —which did recognize something approaching a general legal obligation.
-
- Nevertheless, the decision in Davis was not a foregone conclusion.
o For there were practical difficulties in requiring all carriers to follow the usual or customary route.
o No special problems existed in the case of contracts for carriage of a full cargo load to a single destination.
o

6 The difficulties arose in carriage of part cargoes in short sea and coastal trades
 In these branches of the shipping industry, it does not seem to have been unusual at the start of the last century for carriers to advertise a voyage and the final destination, and to fix the precise route and ports of call later, in accordance with whatever cargo eventually came forward.
 The pattern of at least some commercial activity was therefore inconsistent with a duty to each shipper to follow the direct, straight or shortest route.
o Perhaps the court in Davis assumed, correctly as it turned out, that most carriers who wanted to be able to depart from the "usual and customary course" would take care to contract on those terms.
A second element of novelty in Davis can be found in the terms in which the court dealt with the objection that the proximate cause of the loss, the storm, had no necessary connection with the deviation and might have caused the loss even if the barge had followed the usual course

The passage holding this is a passage of impressive ambiguity and circularity, which caused some difficulty to later generations of lawyers who were tempted to read it as a statement of broad general principle.
o But read in context, and against the version of the same passage reported in Lloyd & Welsby, it is clear that Tindal, C.J., meant no more than that, in an action by a cargo owner to recover for loss or damage to cargo which occurred during an unjustified deviation, the loss would be taken to be sufficiently connected with the deviation to make the defendant chargeable, whatever the immediate cause of the loss, unless, perhaps, the carrier could show that the loss would have happened on the proper route in any case.
Two further points have to be made about Davis.
o 1) First, the defendant did not argue in the reported post-trial proceedings that he was protected by the standard form exclusion of liability for "dangers and accidents of the seas".
 The reported judgment does not deal with this point at all. It seems probable that both the parties and the court thought that the contractual exclusion clause was irrelevant to the loss suffered and were agreed, as Serjeant Wilde put it during oral argument, that: "The exceptions of the act of God, the
King's enemies, fire…accidents of the sea…apply only to such dangers as are encountered in the due progress of the voyage…"
o 2) Secondly, the judgment in Davis is silent about the reasons that were thought to justify an implied legal duty not to deviate.
 A conflation of all the reported versions of the case reveals that Serjeant Wilde, for the plaintiff, argued that a duty not to deviate was necessary for three reasons: to prevent delay;
because the risks associated with usual route were the only things the freighter could take into account when entering into a contract; and because the effect of deviation by the carrier would be to avoid a freighter's policy insuring the goods for the declared voyage.
 It is this last point—the effect of a deviation on the cargo owner's insurance—which has most often been suggested to be the key reason for the creation of the carrier's implied o-

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