The ship owners had not been paid two months of charter hire due to them, so the master took the cargo. The cargo did not belong to the defaulting charterer, however, but rather to an innocent third party. The insurance clause provided that ‘it is hereby agreed that this policy covers the risk of theft’.
Held: On the facts, the act of the ship master acting on the request of his masters, was not theft. the ship owners did not sell the cargo but raised money on it by way of mortgage. They may have had an honest but mistaken belief that they had some sort of lien on the cargo for their charter hire. If they honestly thought that they had a right to do what they did, no ordinary person would call it ‘theft’.
Lord Denning MR said: ‘The word ‘theft’ is not used here in the strict sense of the criminal law. It does not bring in all the eccentricities of the law of larceny. It means only what an ordinary commercial man would consider to be theft: and before finding theft, the court should be satisfied that it is an appropriate description of what took place. The court need not be satisfied beyond reasonable doubt (as in the criminal law) but it should find on balance that there is sufficient to warrant the serious imputation of ‘theft’.’
Edmund Davies LJ held that the ‘persons acting maliciously’ peril was inapplicable on the facts.
Phillimore LJ observed that the clause was ‘obviously intended to deal with damage effected in the course of some civil disturbance’.
Lord Denning MR, Edmund Davies LJ, Phillimore LJ
[1968] 1 WLR 1325, [1969] 2 QB 449, [1969] 2 All ER 776
England and Wales
Cited by:
Cited – Navigators Insurance Company Ltd and Others v Atlasnavios-Navegacao Lda SC 22-May-2018
The vessel had been taken by the authorities in Venezuela after drugs were found to have been attached to its hull by third parties. Six months later it was declared a constructive total loss. The ship owners now sought recovery of its value from . .
Lists of cited by and citing cases may be incomplete.
Updated: 26 July 2021; Ref: scu.666166 br>