Leyland Shipping Co Ltd v Norwich Union Fire Insurance Society Ltd

Lorp Finuay L.C. My Lords, this is an appeal from
a judgment of the Court of Appeal affirming the judgment of
Rowlatt J. in favour of the respondents, the defendants in the
action.

The action was brought by the appellants on a policy of marine
insurance upon the steamship Ikaria. This policy was in the
ordinary form, covering, inter alia, perils of the seas, but contained
the following clause: "' Warranted free of capture seizure and
detention and the consequences thereof or of any attempt thereat
piracy excepted, and also from all consequences of hostilities or
warlike operations whether before or after declaration of war."

The appellants (plaintiffs) alleged that the vessel was lost by perils
of the seas, while the respondents (defendants) contended that the

(1) (1883) 8 App. Cas. 393, (4) 12 App. Cas. 503.

399-401. (5) (1785) 1 T. R. 130, n.
(2) (1906) 11 Com. Cas. 153. (6) [1917] 2 K. B. 522, 525.
(3) 12 App. Cas. 518. (7) [1917] 2 K. B. 769.

(8) (1794) Peake, 278.

353

H. L. (E)
1918

—
LEYLAND
SHIPPING
COMPANY

v.
NORWICH
UNION FIRE
INSURANCE
SOCIETY,

354

H. L. (E.)
1918

LEYLAND
SHIPPING
COMPANY
ae
NORWICH
UNION FIRE
INSURANCE
SOCIETY.

Lord Finlay
L.C.

HOUSE OF LORDS [1918]

loss was in consequence of hostilities or warlike operations, and was
therefore excluded by the clause above quoted.

The Ikaria was on a voyage from South America to Havre and
London. When stopped on January 30, 1915 (Saturday), about
twenty-five miles north-west of Havre for the purpose of taking up
a pilot, she was struck abreast of No. 1 hatch by a torpedo fired by
a German submarine. Two large holes were made in the vessel,
and No. 1 hold filled with water. The crew went on board a tug,
fearing that the Ikaria might sink at once, but as she kept afloat
they returned to her and brought her into the outer harbour of
Havre. She was moored alongside the Quai d'Escale, where she
was always afloat and would have been saved if she had been
allowed to remain there. A gale sprang up on the 31st (Sunday),
causing the vessel to range and bump against the quay. The port
authorities were apprehensive that she might sink, blocking the quay
(which was urgently required for purposes connected with the war),
and ordered that she should leave the quay and either be beached
outside the harbour altogether, or anchored in the outer harbour
near the breakwater, spoken of in the evidence as the Batardeau.
The latter position was chosen, and the vessel was anchored with
her head towards the Batardeau. There was a good deal of wind
and sea. As the vessel was very much by the head in consequence
of the damage done by the torpedo, at each low tide the vessel took
the ground forward, while the-rest of her structure was water-borne.
She was thereby subjected to considerable strain, and, the bulkhead
between No. 1 and No. 2 holds having been weakened by the
explosion of the torpedo, the forward end crumpled up and she
became a total loss on Tuesday, February 2. The appellants
(plaintiffs) contended that her loss was due to the perils of the seas
at her anchorage in the outer harbour. The respondents (defen-
dants) contended that it was caused by hostilities. Both Courts
below have held that it was so caused by the torpedo, and that, as
the warranty applied, the respondents were not liable.

In my opinion Rowlatt J. and the Court of Appeal were right in
holding that the loss of this vessel was a consequence of hostilities,
and therefore not covered by the policy sued on.

The only chance of saving the vessel after she had been struck by
the torpedo was to take her into port, and Havre was obviously the

A.C. AND PRIVY COUNCIL.

proper port to take her to. The decision of the harbour authorities
that the vessel could not be permitted to remain at the Quai d'Escale
was final. That decision was given for very intelligible and weighty
reasons, and there is no ground for thinking that the port authorities
committed any error of judgment in ordering the removal, but those
in charge of the ship had to obey the order, right or wrong. The
Quai d'Escale consequently was no longer available for the vessel.
The case must be dealt with just as if the episode of the vessel's
being taken to that quay had not occurred and she had been taken
in the first instance straight to the anchorage near the Batardeau.
What was the cause of her becoming a total wreck there ? In my
opinion, in substance, it was the injury by the torpedo.

The injuries received from the torpedo made it impossible for the
vessel to keep the sea. She was taken into port. At the anchorage
to which she was ordered she took the ground forward at low tides
as her draught forward was 32 feet (owing to the injury caused by
the torpedo) as against 15 feet aft, and she was greatly strained by
the seas in this position. No. 1 bulkhead, which had been seriously
weakened by the explosion of the torpedo, gave way, the vessel
breaking her back, crumpling up forward and becoming a total
wreck. She was not lost by any new peril, but by the natural
consequences of the explosion of the torpedo.

On February 3, 1915, the captain, writing to his owners from
Havre, says that on February 2 the Nos. 1 and 2 bulkheads gave
out with a crash, and goes on to say : " Iam practically certain that
the vessel's back is broken in two places between the bridge and the
stem, viz., on the fore part of No. 2 hatch, and again abreast the
No. 1 hatch, and the side plating in both those places is very badly
buckled, and the sheer of the ship is quite broken from the bridge
forward to the forecastle hold, which is plainly visible from the
shore." Ina letter of February 4 he says: "'. . . . the ship from
forward to amidships has absolutely foundered. Apparently the
torpedo has wrecked the ribs and keelsons in the forward end, and
then her weight being water-borne aft and on the ground forward
has broken her back and opened her out forward. Her condition is
hopeless." In his letter of February 10 the following sentence
occurs: " It seems evident from the very sudden way in which the
forward end of the vessel crumpled up that her structure was so

855

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1918

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SHIPPING
COMPANY

Us

NoRwIcH

UNION FIRE

INSURANCE

SOCIETY.

Lord Finlay
L.C.

356 HOUSE OF LORDS [1918]

H.L.(E.) weakened by the terrific force of the explosion that there was no
1918 strength left to resist the additional strain imposed on her, firstly,

Levnanp by the great weight of water against the bulkheads and afterwards

SHIPPING by the bursting strain of the cargo as it swelled in the holds."

COMPANY

v. It was argued for the appellants that the torpedoing could not
NoRwWICH ;
Union Fire be regarded as the proximate cause of the loss of the vessel, as
Poe © there was a novus casus interveniens, namely, the grounding in
tort Finay He outer harbour and the breaking of the back of the vessel by

1-0. the consequent straining. Rowlatt J. deals with this contention
in the concluding passage of his judgment: " Was the grounding
a new thing supervening which caused the damages? I cannot
think so at all. Those were circumstances which, if you like,
thwarted the attempt to save the ship. I grant you that, but
they did not constitute a new departure as a casualty. I really
cannot say more upon the law than that. Here you have a tor-
pedoed ship which makes for harbour. She finds a berth where
she might be saved if she could stay there. She cannot stay there.
She has to move on again. She goes to a berth where she cannot
be saved, and in fact where, in the effort to keep her there, she
receives some slight further damage ; but all through she is under
the operation of the original torpedoing, and all the struggles that
she made, whether she received further injury in the course of them,
as she did to some extent undoubtedly, when she bumped on the
quay and took the ground at the Batardeau, and all the efforts she
made before she became a total loss, were merely efforts to escape
from that casualty in the grip of which she was throughout."
Swinfen Eady L.J. says (1): "As the policy against sea perils in
the present case contained a warranty against all consequences
of hostilities or warlike operations, the question arises, Was the
loss, assuming it to be by a peril of the sea, the proximate conse"
quence and effect of hostilities? The facts show that the vessel
was severely damaged by a torpedo, and that, although every
eflort was made to save her, she sank and was lost early on the
third day afterwards. If to prevent her sinking she had been run
ashore immediately after the accident and had become a total
loss, the loss would certainly have been the direct consequence of
hostilities. Does it make any difference that between two and

(1) [1917] 1 K. B. 878, 884,

A. C. AND PRIVY COUNCIL.

three days were spent in abortive and unavailing efforts to save
her? She was in imminent risk of sinking from the moment of
being injured; she was removed from the Quai d'Escale because
of the evident risk of her sinking there ; she was unable to remain
at that quay, and never was able to reach and remain in any place
of safety ; the fact that she was so much down by the head pre-
vented her removal to the inner harbour; she had the choice of
going outside the breakwater with a view to being beached, oF
of remaining within the outer harbour; the latter was chosen,
but, having regard to her draught, she was bound to ground at
every tide at the place where she was moored, unless she could
be considerably lightened and her draught lessened, which proved
to be impracticable. The risk of her grounding there was delibe-
rately incurred as part of the salvage operations. The train of
causation from the act of hostility to the loss was unbroken. She
was never out of immediate danger from the time she was first
injured to her final loss, and the efforts to save her were acts done
by way of salvage. There was not any new intervening cause of
loss after the injury by torpedo, no new casualty causing the
damage.' Scrutton L.J. was disposed to differ, although in con-
sequence of his view of the effect of the decision in Revscher v.
Borwick (1) he in the end concurred with the other members of
the Court of Appeal. After referring to Rowlatt J.'s finding that
the vessel was sunk from her bulkheads giving way, having been
weakened by the explosion, and from the strain of the grounding,
or, in other words, from grounding in her damaged condition,
Scrutton L.J. (2) goes on to say: " I agree with these findings, but
I think it also follows, whatever the legal effect may be, that the
sinking did not necessarily follow from the explosion; that is to
say, that with fine weather, and a stay in the first berth, the ship
would have been saved; with the weather she in fact met, and in
the berth to which in consequence of that weather she was ordered,
she was lost."

I agree with Rowlatt J. and the majority of the members of the
Court of Appeal in their view of the facts and of the legal effect
of these facts, and I cannot share the doubts expressed by Scrut-
ton L.J. The vessel could not remain at the Quai d'Escale, and

(1) [1894] 2 Q. B. 548, (2) [1917] 1 K. B. 891.

357

H. L, (E.)
1918

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LEYLAND
SHIPPING
COMPANY

v,
NORWICH
UNION FIRE
INSURANCE
SOCIETY.

Lord Finlay
L.C,

358

=H 1:.(E.)
1918

LEYLAND
SHIPPING
COMPANY

v.
NORWICH
UNION FIRE
INSURANCE
SOCIETY.

Lord Finlay
L.C.

HOUSE OF LORDS [1918]

her short stay there was merely an interlude which may be dis-
regarded. In taking the vessel to the anchorage near the Batardeau
the best practicable course was adopted to save her. The effort
was unsuccessful. She sustained further damage there owing to
the fact that in consequence of the injury by the torpedo she took
the ground forward at low tides. She was consequently strained
severely by the motion of the seas, and this, coupled with the
weakened condition of the bulkhead caused by the explosion, led
to her ultimate break-up. Such circumstances do not prevent
the injury by the torpedo from being the proximate cause of the
loss; indeed they appear to me to establish that the loss was a
direct consequence of hostilities.

A great many cases were cited to your Lordships. I do not
propose to deal with them in detail. The principles of law are
well settled, and the question here is really one of fact. A great
deal was said in the Court of Appeal about the case of Reischer v.
Borwick. (1) I cannot see that that case introduced any novelty
into the law of marine insurance. The policy was against damage
received in collision with any object. The ship ran against a
snag, which made a hole in her. The vessel was anchored and the
hole plugged, and a tug was sent to bring her to dock for repairs.
Owing to the motion through the water when being towed, the
plug came out and the ship sank. It was held that the loss of the
ship was covered by the policy. It is obvious that in that case
there was not the intervention of any new cause. The hole occa-
sioned by the collision was the cause of the loss. The fact that
ineflectual attempts had been made to stop the hole, and that the
plug came out, did not introduce any new element of causation.
We have hada good deal of discussion as to the decision in Hamilton
Fraser & Co. v. Pandorf & Co. (2), a case in which the damage was
caused by rats gnawing a hole in a pipe, through which sea water
entered and damaged the cargo of rice. There was an exception
in the charterparty and bill of lading of dangers and accidents of
the seas, and it was decided that the shipowners were not liable.
For the clear understanding of that case it is desirable to call
attention to a fact which was pointed out by Lord Dunedin in
the course of the argument of the present case, and which appears

(1) [1894] 2 Q. B. 548. (2) 12 App. Cas. 518.

A.C. AND PRIVY COUNCIL.

in the case for the appellants (Hamilton, Fraser & Co.) and the
evidence there referred to. The hole was in a supply pipe com-
municating with the sea below the water-line, through which sea
water was pumped up into a bath, and the hole made by the rats
during the voyage was at a point in the pipe above the water-line
when the vessel was fully loaded, but permitted the water to flow
into the vessel when she rolled in the course of her voyage.

I do not think that any observations are necessary upon the
other cases to which our attention was called.

In my opinion the appeal fails, and should be dismissed with
costs.

Viscount Hatpaner. (1) My Lords, many authorities were cited
at the Bar in the course of the arguments in this appeal. But I
do not think that the law applicable is obscure. The real ques-
tion turns out to be one of fact. The insurance included among
the perils which it covered those of the seas, but from these
were expressly excluded all consequences of hostilities or warlike
operations.

The ship insured, the Jkaria, was bound to Havre, and when
about twenty-five miles from that port on Saturday, January 30,
1915, was struck by a torpedo from a German submarine. The
impact was on the port side, and the explosion tore a large hole
there, 3°15 metres wide and 2°6 metres high, 4 feet below the water-
line. A column of water which was thrown up burst out the
bulwarks on the port side, No. 1 hold was filled with sea water, the
fore peak was similarly about half filled, and some water penetrated
into No. 2 hold. The vessel at once began to settle by the head and
the crew took to the boats. But the steamer did not sink, although
much down by the head, and they returned, and, with the aid of a
tug and a mine-sweeper and her own steam, she reached Havre.
She was then 17 feet down by the head, her draught being 32 feet
forward and 15 feet aft, while before she was torpedoed her draught
had been 23 feet 6 inches forward and 23 feet 9 inches aft. The
result of the increased draught forward was that she could not enter
the inner harbour at Havre or the dry dock, and she was berthed in
the outer harbour at the Quai d'Escale. This was a berth used for

(1) Read by Lord Dunedin.

359

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1918

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SHIPPING
COMPANY
VY
NoRWICH
UNION FIRE
INSURANCE
SOCIETY,

Lord Finlay
L.C,

360

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1918

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SHIPPING
CoMPANY

w.

NORWICH

UNION FIRE

INSURANCE
SOCIETY.

Viscount
Haldane.

HOUSE OF LORDS [1918]

railitary, and particularly for British Red Cross, purposes, and the
only reason for allowing the steamer to go there was to save her
if possible. Had she remained out at sea she would have sunk,
The next morning, on January 31, 1915, an effort was made to
pump the vessel and to lighten her cargo. But the wind rose and
a swell ensued, and the Ikaria began to bump and the dislocation
to increase. The port authorities therefore, fearing that she would
sink and block the quay, ordered her to be removed, and either to
be taken right outside the harbour and beached or to be moored
alongside a breakwater called the Batardeau. The latter alterna-
tive being chosen, she was moored alongside the breakwater.
But the bottom there was uneven and the water was only 30 feet
deep, while the head of the steamer was drawing 32 feet, and could
not be prevented from taking ground. This the ship did, and
finally sank by. the head as the tide rose on Tuesday, February 2,
only part of the cargo being salved.

The learned judge who tried the case, Rowlatt J., found the facts
broadly as I have stated them, and that the bulkhead between the
holds No. 1 and No. 2 had been seriously disrupted by the explosion.
He thought that if the Zkaria could have stayed at the Quai d'Escale
she might have been saved. But she could not stay there, and
partly because of the weakness of the bulkhead and partly because
of the grounding at the Batardeau she sank. He came to the
conclusion on the facts as proved before him that " it was not made
out if she had been a sound ship and had not met this torpedo, and
had suffered the same grounding in the same trim at the same spot,
that she would have suffered these injuries." In his view the
grounding was not a new thing supervening which caused damage.
The being moored as she was to the Batardeau merely thwarted
the attempt to save the ship. bs loss was therefore caused by the
explosion itself.

The Court of Appeal took substantially the same view of the facts
as Rowlatt J., and the findings of fact were therefore concurrent.
Swinfen Kady L.J. was of opinion that it could make no difference
to the conclusion that the loss of the ship was the direct consequence
of the explosion of the torpedo that " two or three days were spent
in abortive and unavailing efforts to save her. She was in imminent
risk of sinking from the moment of being injured." Bankes L.J,

A.C. AND PRIVY OOUNOIL.

took the same view. "' You do not reach a place of safety unless
you are allowed to remain there a sufficient time to ensure safety."
Scrutton L.J. did not differ from the finding of fact in the words I
have quoted from Rowlatt J., but thought that it might be held
that the sinking did not necessarily follow from the explosion as
described if, with fine weather and a stay in the first berth, the loss
would have been averted, and that this would:have been enough
to make a general peril of the sea, and not the explosion, the proxima
causa within the meaning of the policy. But he considered himself
bound to follow a previous decision of the Court of Appeal of the
correctness of which he intimated doubt. He thought that Reischer
v. Borwick (1) had established that, on the facts proved, the [karia
must be held to have been sunk as the immediate consequence of
the explosion. This inference he could not, in his opinion, refuse
to draw in view of what was held in Reischer v. Borwick (1), but he
thought it inconsistent with what he considered ought to follow
from the general principles affirmed by this House in Hamilton,
Fraser & Co. v. Pandorf & Co, (2)

My Lords, I cannot find any such inconsistency between these two
authorities as Scrutton L.J. thought to exist. In Reischer v.
Borwick (1) there was a policy which covered collision with any
object but excluded perils of the sea. The ship struck a snag which
made a hole in her. She was then anchored and the leak was
temporarily plugged, and she was towed towards the nearest dock
for repair. But while she was in course of being towed the water
burst through the hole and she had to be run aground and abandoned,
The Court of Appeal held that the causa proxima of the damage was
in reality the collision with the snag. In the words of Davey L.J. (3),
it was "the inrush of the water through the hole in the condenser.
What made the hole in the condenser ? The collision made the hole
in the condenser, and the broken condenser was a continuing source
of risk and danger. The failure of the attempt to mitigate or stop
the damage arising from the breach of the condenser cannot .. . .
justly be described as the cause of the ultimate damage." My
Lords, these words express what the common sense of mankind
would assert in such a case. They are in no way inconsistent with

(1) [1894] 2 Q. B. 548. (2) 12 App. Cas. 518.

(3) [1894] 2 Q. B. 553.
A. O. 1918. 3 2B

361

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Viscount
Haldane.

362

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1918

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SHIPPING
COMPANY

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NORWICH
UNION FIRE
INSURANCE
SOCIETY.

Viscount
Haldane.

HOUSE OF LORDS [1918]

what was laid down in Hamilton v. Pandorf. (1) There rice was
shipped under a charterparty, and bills of lading which excepted
"dangers and accidents of the sea." During the voyage rats
gnawed a hole in a pipe in the ship and sea water entered through
it and damaged the rice. There was no negligence. It was held
that the damage was within the exception, because whether it was
rats that had made the hole, or whether, for example, a porthole
had got open, the sea was in such a case not the less the immediate
cause of the damage. In Reischer v. Borwick (2), although perils
of the sea in general were excluded, a particular kind of such peril,
collision, was expressly included. In Hamilton v. Pandorf (1) all
dangers and accidents of the sea were excluded, and the inrush of
water which arose from the gnawing of the pipe by the rats during
the voyage was held to be excluded along with them as being a
case falling within the class so defined.

My Lords, in the case before us all consequences of hostilities or
warlike operations are excluded from the perils of the seas insured
against. There is nothing in Hamilton v. Pandorf (1), or in the now
familiar rule, that the immediate cause of the accident is what is
taken to have been so in contemplation of the parties to a policy of
marine insurance, which prevents the explosion from being taken
to be in law, what it was in fact, the cause of the loss. The fact
that attempts were made to obviate the natural consequences of
the injury inflicted by the torpedo does not introduce any break in
the direct relation between the cause and its effect which culminated
in the damage sustained. I am therefore of opinion that the appeal
must fail.

Lorp Dunepin. My Lords, we have had a large citation of
authority in this case, and much discussion on what is the true
meaning of causa proxima. Yet I think the case turns on a pure
question of fact to be determined by common-sense principles
What was the cause of the loss of the ship? I do not think the
ordinary man would have any difficulty in. answering she was lost
because she was torpedoed. [ shall state my view very briefly
on the facts, but before I do so I wish to say a word as to the policy.
It seems to me that the possibility of the prolonged and ingenious

(1) 12 App. Cas. 518. (2) [1894] 2 Q. B. 548.

A.C. AND PRIVY COUNCIL.

argument we have had in the case really flows from the form of
the instrument and the opportunity it gives for looking at one
thing from different points of view. The policy, in time-honoured
form, first specifies as the perils and adventures which the under-
writers are content to bear, perils of the sea in general terms; and
then comes a detailed enumeration of certain perils. Now when
the f.c.s. clause is added certain enumerated perils are cut out
of the original insurance. When it is a case of one of the perils
acting solely and sufficiently, such as for instance the peril of
capture, no difficulty can arise. But there are certain perils which,
so to speak, pray in aid the perils of the sea. A man-of-war fires
a shot and hits the ship. If it only hits the top of the bulwark or
a bit of the rigging there will be at the worst only a partial average.
But if the shot strikes between wind and water and makes a hole,
the vessel will be sunk, and the reason of its sinking will not be
the mere existence of the hole, but the fact that the sea comes in
through the hole, and the vessel founders. Overwhelming by the
sea is a peril of the sea in a general sense, and accordingly in such
a case, if either the body of the policy or the exception were looked
at alone, the peril incurred could be held to fall under either. In
the exception it would fall under it, because the sinking was the
direct result of the action of the man-of-war. In the body of the
policy it would be immaterial whether it fell within the general
expression " perils of the sea'' or the particular expression "' man-
of-war." But the moment that the two clauses have to be
construed together it becomes vital to determine under which
expression it falls. The solution will always lie in settling as
a question of fact which of the two causes was what I will
venture to call (though I shrink from the multiplication of
epithets) the dominant cause of the two. In other words, you
seek for the causa proxima, if it is well understood that the
question of which is proxima is not solved by the mere point of
order in time.

In the illustration I have given no one would have the slightest
doubt the dominant cause was the shot of the man-of-war. I
would also like to remark that this class of competition between
causes can only truly arise when you have to deal with an exception.
I say this because of the great stress that was laid by the appellants'

3 2B 2

863

HL.)
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SHIPPING
COMPANY

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UNION FIRE
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SOCIETY.

Lord Dunedin.

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SHIPPING
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UNION FIRE
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Lord Dunedin,

HOUSE OF LORDS [1918]

counsel on the case of Hamilton, Fraser & Co. v. Pandorf & Co. (1)
There it was held that damage by sea water which came in through
a hole in a bath supply pipe was a peril of the sea, though the sea
would not have been admitted if a rat had not gnawed a hole in the
pipe. It was the sea that spoiled the cargo, and the precise way in
which it was admitted (putting aside negligence of the ship's servants,
which, as it was a bill of lading and not an insurance case, would have
altered the question) was immaterial, whether it was owing to rat,
iceberg, sunken rock, or swordfish. If in that case there had been
an exception of all dangers brought about by rats, then the decision,
I take it, would have been different. I say all dangers brought
about by rats, for if the exception had been merely against rats,
then as a question of construction it might have been held that
that only meant to refer to the predatory habits of the rat, and not
to anything so exceptional as what occurred. I am not, therefore,
pressed by the difficulty which was felt by Scrutton L.J. in recon-
ciling Rewscher's Case (2) with Hamulton's Case. (1)

I now turn to the facts in the case. I concur with what has been
said by the Lord Chancellor, and do not think it necessary to
repeat. Summarized, the facts seem to me to come to this. After
the torpedo struck her she was a doomed ship, unless she could
get into a real place of safety. She nearly got to a place of safety,
but never quite did so. What happened was in the circumstances
the natural sequel to the injury by the torpedo. Water was
admitted, at first only so far. She was down by the head, and
therefore took the ground. The combined action of taking the
ground and rising and falling with the tide, together with the swelling
of the cargo, which had been wetted, strained her and broke her
up, so that she became a total wreck. There is no better or truer
account than that given by the master himself, soon after the event,
in his letter of February 10, when he writes to his owners and says :
'' There is no one here now who has the least knowledge of making
or fitting shields over fractures in ships' bottoms, and even had
there been it is very doubtful whether shields large enough to cover
the two large fractures made by the torpedo could have been
constructed and fitted in time to save her from sinking. It seems
evident from the very sudden way in which the forward end of

(1) 12 App. Cas. 518. (2) [1894] 2 Q. B. 548.

A. C. AND PRIVY COUNOIL.

the vessel crumpled up that her structure was so weakened by
the terrific force of the explosion that there was no strength left
to resist the additional strain imposed on her, firstly, by the great
weight of water against the bulkheads, and afterwards by the
bursting strain of the cargo as it swelled in the holds."

I agree with the judgment of the Court of Appeal.

Lorp Atkinson. My Lords, I concur.

The appellants by a policy of marine insurance dated June 8, 1914,
insured their steamship Ikaria against loss by perils of the sea. The
policy contained a warranty clause which ran as follows: " War-
ranted free of capture seizure and detention and the consequences
thereof or of any attempt thereat piracy excepted, and also from
all consequences of hostilities or warlike operations whether before
or after declaration of war." ;

According to the decision in Ionides v. Universal Marine Insurance
Co. (1), this clause is to be construed as if the assured had reinsured
against the events enumerated, and the word "' consequences "' must
accordingly be taken to mean proximate or direct or immediate
consequences only: see Willes J., approved of in Andersen
v. Marten. (2) The policy, therefore, effects an insurance against
perils of the sea other than those which are the direct and immediate
consequence of hostile and warlike operations. The rule that in
marine insurance policies the proximate, not the remote, causes are
to be regarded is supposed to be based upon the intention of the
contracting parties, to be gathered from the language of the contract
itself, taken in connection with the surrounding circumstances ; but
there is such a tendency in argument to treat concurrent causes as
preceding and succeeding causes, the latter proximate, the former
remote, and to split up complex causes into their components and
establish a sequence between them, that it is well always to bear
in mind the warning given by Lindley L.J. in Reischer v. Borwick (3),
that this rule of maritime insurance must be applied with good sense
to give effect to, and not to defeat the intention of the contracting
parties.

I asked Mr. Leslie Scott, when opening the appeal, if the torpedo

(1) 14 C. B. (N.S.) 259, 286, (2) [1908] A. C. 334, 340.
289, 290. (3) [1894] 2 Q. B. 548, 550.

365

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1918

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SHIPPING
COMPANY

%.
NoRWICH
UNION FIRE
INSURANCE
SOCIETY,

366

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1918

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SHIPPING
COMPANY

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UNION FIRE
INSURANCE
SOCIETY,

Lord Atkinson,

HOUSE OF LORDS [1918]

had opened such a rent in the Ikaria's side that the sea water rushed
into her hold and sank her, could he recover on the policy sued on
for a loss by perils of the sea ? Of course he replied in the negative.
Then the sea peril would be the direct and immediate consequence
of hostilities or warlike operations. I then asked him if the captain
of a torpedoed ship, having formed a judgment, found to be reason-
able in the circumstances, that his ship would, owing to her injuries,
sink if kept in deep water, beached her to prevent her total loss,
would the owner be entitled to recover on such a policy as the
present ? And I understood him also to reply in the negative. I
do not think the liability would be in the slightest degree altered
if the ship should, when beached, settle down upon a rock of the
existence of which the captain was not aware and had broken her
back.

On the whole of the evidence it is, I think, absolutely clear that
the vessel was so damaged by the torpedo that she could not keep
the sea, or at all events that there was no reasonable probability
of her being able to do so. Well, the captain, having got a choice
he was under the circumstances bound to take, of beaching her
outside the harbour, or anchoring herinside the breakwater in order
to continue the salvage operations he had already commenced at
the Quai d'Escale, brought her to the latter place. The ship's
taking the ground in her new anchorage was an obvious and neces-
sary result, as she was drawing 32 feet 6 inches forward, and the
depth of water at the anchorage was only 30 feet at low tide. The
risk of her grounding forward was deliberately but reasonably run,
and I really cannot see the difference in principle between taking
this risk and taking the risk of beaching her completely. It is quite ,
true that in the efforts to salve the cargo and the ship her injuries
may have been aggravated, but none the less, in my opinion, was
the loss the direct and immediate consequence of the torpedoing.
And I do not think any of the authorities cited are inconsistent
with this conclusion.

The appeal in my opinion fails, and should be dismissed with costs.

Lorp SHaw oF DunrerMuInE. My Lords, on January 30, 1915,
the Ikaria, bound from South American ports to Havre with a
general cargo, was, about twenty-five miles north-west of Havre,

A. C. AND PRIVY COUNCIL.

struck by a torpedo fired from a German submarine. She sustained
severe injuries ; but, assisted by a tug and a mine-sweeper, she
succeeded in making the port of Havre. She was then drawing
32 feet forward, the injuries and consequent filling being in the fore
part of the vessel: and her depth was too great to permit her entry
into the inner harbour. In the outer harbour she was berthed for
a time at the Quai d'Escale. There being, however, a fear that she
might sink there and so interrupt the traffic of the Red Cross
organization at that quay, she was taken to another portion of the
harbour. At the latter point, notwithstanding all efforts by pump-
ing and otherwise, she bumped, broke her back, and sank on the
afternoon of February 2.

It is admitted that from the time of her being torpedoed every-
thing was done to save her from the fatal effects of the collision,
and that after she entered the harbour her officers were bound to
obey the orders of the harbour-master. The weather was rough,
but not severely so.

I see no reason whatever to doubt that this happened, as Captain
Robertson, in his report of February 10, states. "' It seems evident,"
says he, '"' from the very sudden way in which the forward end of the
vessel crumpled up that her structure was so weakened by the
terrific force of the explosion that there was no strength left to resist
the additional strain imposed on her, firstly, by the great weight of
water against the bulkheads, and afterwards by the bursting strain
of the cargo as it swelled in the holds."

To the perils of the sea against which she was insured under the
policy founded on there was a warranty of exception—the words of
the warranty being "free . . . . from all consequences of hostilities
or warlike operations." The question in the appeal is whether the
loss of the vessel was proximately caused by such hostilities or
warlike operations. If so, the insurers stand free; if not, the
insured can recover under the policy against perils of the sea.

I am of opinion that the loss was caused because the vessel was
torpedoed, and that the warranted exception applies. If the case
were not complicated, or supposed to be complicated by legal deci-
sions, there would seem to be no answer to this view. Notwith-
standing the conclusion arrived at by Scrutton L.J., 1 understand
from his careful judgment that this would also be his opinion.

LEYLAND
SHIPPING
COMPANY
Vv.
NORWICH
UNION FIRE
INSURANCE
SOCIETY.

Lord Shaw of
Dunfermline.

368

H. L. (E.)
1918

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LEYLAND
SHIPPING
COMPANY

Vv.

NORWICH

UNION FIRE

INSURANCE
SOCIETY.

Lord Shaw of
Dunfermline.

HOUSE OF LORDS [1918]

My Lords, there was at one time an attempt to differentiate the
meaning of the same contractual words as used in a policy of marine
insurance from the meaning of the same expression as used in other
maritime contracts ; but in two judgments of your Lordships' House
in the year 1887 the practice was condemned. I refer to The
Xantho (1), in which the term under examination was " the perils of
the sea." In that case Lord Macnaghten dealt with the " error of
the Court of Appeal" thus: "' They start with the assumption that
the same words have different meanings when used in policies of
insurance and when used in bills of lading. For that assumption
there is not, I venture to think, any foundation." In the Pandorf
Case (2) the exceptions being considered was " dangers and accidents
of the sea" ; and Lord Watson observed: '' Your Lordships have
now disapproved of the novel doctrine that, in a contract of sea
calriage,a meaning must be attached to the expression ' dangers and
accidents of the sea ' different from that which it bears in a contract
insuring cargo against sea risks ; that, in the case of a charterparty
or bill of lading, the Court ought to look to what has been termed
the remote as distinguished from the proximate cause of damage,
whereas in the case of a policy the proximate cause can alone be
regarded." It would rather appear accordingly that this doctrine
of proximate cause will be considered in the same light whether
in contracts of marine insurance or in contracts of sea carriage,
and good sense suggests that it should be so.

By the Marine Insurance Act, 1906 (6 Edw. 7, c. 41), s. 55, the
expression has become statutory and "' the insurer is liable for any
loss proximately caused by a peril insured against, but, subject as
aforesaid, he is not liable for'any loss which is not proximately caused
by a peril insured against." In this way the discussion of the scope
of proxima causa is very relevant and its ascertainment vital.

In my opinion, my Lords, too much is made of refinements upon
this subject. The doctrine of cause has been, since the time of
Aristotle and the famous category of material, formal, efficient, and
final causes, one involving the subtlest of distinctions. The doctrine
applied in these to existences rather than to occurrences. But the
idea of the cause of an occurrence or the production of an event or
the bringing about of a result is an idea perfectly familiar to the

(1) 12 App. Cas. 503, 517. (2) 12 App. Cas. 518, 525.

A.C. | AND PRIVY COUNCIL.

mind and to the law, and it is in connection with that that the notion
of proxima causa is introduced. Of this, my Lords, I will venture to
remark that one must be careful not to lay the accent upon the word
"* proximate " in such a sense as to lose sight of or destroy altogether
the idea of cause itself. The true and the overruling principle is to
look at a contract as a whole and to ascertain what the parties to it
really meant. What was it which brought about the loss, the event,
the calamity, the accident ? And this not in an artificial sense, but
in that real sense which parties to a contract must have had in their
minds when they spoke of cause at all.

To treat proxima causa as the cause which is nearest in time is
out of the question. Causes are spoken of as if they were as distinct
from one another as beads in a row or links in a chain, but—if this
metaphysical topic has to be referred to—it is not wholly so. The
chain of causation is a handy expression, but the figure is inade-
quate. Causation is not a chain, buta net. At each point influences,
forces, events, precedent and simultaneous, meet ; and the radiation
from each point extends infinitely. At the point where these
various influences meet it is for the judgment as upon a matter
of fact to declare which of the causes thus joined at the point of
effect was the proximate and which was the remote cause.

What does "proximate" here mean? To treat proximate
cause as if it was the cause which is proximate in time is, as I have
said, out of the question. The cause which is truly proximate is
that which is proximate in efficiency. That efficiency may have
been preserved although other causes may meantime have sprung
up which have yet not destroyed it, or truly impaired it, and it
may culminate in a result of which it still remains the real efficient
cause to which the event can be ascribed.

I illustrate that by the present case. Did the vessel perish
because she was torpedoed or by a peril of the sea apart from that ?
It is replied: '"'She perished by a peril of the sea because sea
water entered the gash in her side which the torpedo made." Cer-
tainly the entry of sea water was a peril of the sea, and certainly
that entry of sea water was proximate in time to the sinking. But
how could there be any exception in the case of a vessel lost in
harbour or at sea to a loss by perils of the sea if the proximate
'cause in the sense of nearness in time to the result were the thing

869

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1918

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LEYLAND
SHIPPING
CoMPANY

v.
NORWICH
UNION FIRE
INSURANCE
SOCIETY.

Lord Shaw of
Dunfermline.

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1918

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SHIPPING
COMPANY

x.
NORWICH
UNION FIRE
INSURANCE
SOCIETY.

Lord Shaw of
Dunfermline.

"HOUSE OF LORDS [1918]

to be looked to? It is hardly possible for the mind to figure any
thing which would interfere with or be an exception to a cause
so proximate as the entry of sea water into or over the hull as the
vessel sinks in the waves. The result of this is that the consideration
of the exception of the consequences of hostilities, or indeed any
other exception so far as I can at present figure, if that consideration
be limited to a cause proximate in time, destroys the exception
altogether. It might as well never have been written. In my
opinion, accordingly, proximate cause is an expression referring
to the efficiency as an operating factor upon the result. Where
various factors or causes are concurrent, and one has to be selected,
the matter is determined as one of fact, and the choice falls upon
the one to which may be variously ascribed the qualities of reality,
predominance, efficiency. Fortunately this much would appear
to be in accordance with the principles of a plain business transac-
tion, and it is not at all foreign to the law.

In Reischer's Case (1) Lord Lindley (then Lord Justice), speaking
of causa proxima says, " this rule is based on the intention of the
parties as expressed in the contract into which they have entered ;
but the rule must be applied with good sense, so as to give effect
to, and not to defeat, those intentions." A second example, which
I here give, shows that although insurers may limit their liability
expressly to causa proxima and with elaborate astuteness may
enumerate other facts and circumstances which would not be
considered direct or proximate causes, the same result will follow,
namely, that the proximate cause will be found to be, to use the
words employed by Channell J. in Etherington's Case (2), '" the
real effective cause of what has happened." '' You must," said he,
"have something that may be called a new intervening cause, in
order to prevent the existing cause which is operating to produce
a well-known result from being said to be the real effective cause
of what has happened." Vaughan Williams L.J. thought this
view of Channell J. was quite right. So do I.

To apply this to the present case. In my opinion the real efficient
cause of the sinking of this vessel was that she was torpedoed.
Where an injury is received by a vessel, it may be fatal or it may
be cured : it has to be dealt with. In so dealing with it there may,

(1) [1894] 2 Q. B. 548, 550. (2) [1909] 1 K. B. 591, 598.

A.C. AND PRIVY COUNCIL.

it is true, be attendant circumstances which may aggravate or
possibly precipitate the result, but which are incidents flowing
from the injury, or receive from it an operative and disastrous
power. The vessel, in short, is all the time in the grip of the casualty.
The true efficient cause never loses its hold. The result is produced,
a result attributable in common language to the casualty as a
cause, and this result, proximate as well as continuousin its efficiency,
properly meets, whether under contract or under the statute, the
language of the expression " proximately caused."

I beg to express, my Lords, my sense of indebtedness to Mr.
Wright for the brief but most cogent argument with which he
assisted the House.

Order of the Court of Appeal affirmed and appeal
dismissed with costs.

Lords' Journals, January 31, 1918.