The owner of the Athelbeach and the Athelqueen (the claimant) claimed against its insurer (the defendant) for insurance compensation in respect of the ship's contribution to general average expenditure. In November 1940, the two ships were covered against war risks. They were proceeding on a voyage from the West Indies to the UK, laden with molasses. The UK was then at war with the Axis Powers, which were destroying British merchant ships whenever the opportunity arose. In light of this, the UK government issued a decree that gave the British Admiralty complete control over the movement of all merchant ships. This control was exercised by means of routeing and sailing instructions, or through orders from naval commodores in command of convoys. The ships' masters were under a duty to follow these orders.

On 5 November 1940, the convoy preceding the one involving the claimant's ships was attacked, and several ships were sunk. Owing to knowledge that the enemy raiders operated in the North Atlantic, the Admiralty sent a signal to the naval ship escorting the claimant's ships to proceed back to Bermuda. The masters obeyed. As a result, the ship lost six days of voyage and incurred additional expenditure in the form of the costs of additional fuel and stores consumed, the wages of the masters, officers and crews, and the expenses of entering and leaving Bermuda.

The claimant argued that all these expenses were allowable under the York-Antwerp Rules 1924 incorporated into the insurance policies. The defendant denied all liability, but agreed that if the sums were due, the ships were entitled to general average recovery: for the Athelbeach policy, GBP 332 4s 9d; for the Athelqueen policy, GBP 365 13s 8d.

Held: Judgment for the defendant with costs.

Tucker J referred to s 66 of the Marine Insurance Act 1906 (UK) (the Act), which sets out the rules on compensation for general average contributions, and to s 87 of the Act. The Judge concluded that if the York-Antwerp Rules 1924 are incorporated into the contract, they take precedence over the provisions of the Act.

Regarding the York-Antwerp Rules 1924, Tucker J cited rr A, C, E, 10.a, and 11, with particular emphasis on r A. With reference to Vlassopoulos v British & Foreign Marine Insurance Co [1929] 1 KB 187, [1928] 31 Lloyd's Rep 313, Tucker J stated that the lettered Rules enunciated the general principles and the numbered Rules settled how the general principles were to be applied in situations that may raise questions.

To find that the sacrifice or expenditure was one of general average, this must be extraordinary, and be made or incurred intentionally and reasonably for common safety (r A).

In the present case, the masters followed the orders of the commodore. This could not be considered as their reasonable actions under the Rules. Therefore, this act did not bring the case within r A.

However, Tucker J considered that the actions of the commodore, rather than those of the master, could be assessed to establish the case for a general average act, although it was unclear whether the stranger's acts could serve as a basis for general average. The Judge found that the commodore's act did not form a general average act as prescribed by r A in any event. The reason was that the commodore gave the order, not for the common safety of the adventure in light of imminent danger, but because of an order received from the Admiralty.

The next question was therefore whether the Admiralty action could be considered as giving a right to general average. Tucker J declined this proposition. The Judge found that the inference that could be made was that the order was part of a general strategic disposition so as to minimise the risks posed by the enemy's activity in the North Atlantic. This was not covered by r A.

Judgment for the defendant.

The Judge emphasised that he considered the facts separately in so far as they affected the decisions of the master, the commodore, and the Admiralty. If this approach was not correct and they should have been considered as a whole, the conclusion appeared to be the same. Tucker J mentioned that he had not made any conclusion on whether the stranger's act could form a general average act and whether the English approach was any different from the US rule laid down in Ralli v Troop 157 US 386, 15 S Ct 657, 39 L Ed 742, in which connection Price v Noble (1811) 4 Taunt 123 and Papayanni v Grampian Steamship Co Ltd 1 Com Cas 448 were cited.