The present case concerns liability for damage caused to a ship and a dock during pilotage of a ship. The shipowner, Zim Integrated Shipping Services Ltd (Zim), repaired the damage caused to its ship, and demanded that the Ports and Railways Authority (the Authority) reimburse it for the cost of the repair. Zim based its demand on the negligence of the Authority and the negligence of the pilot for whose actions it alleged the Authority was vicariously liable. The two issues for the District Court were: does a shipowner have a cause of action against the employer of a pilot who caused damage to a ship in the course of piloting in the area of a port? And, if so, how is the liability to be distributed between the shipowner and the pilot's employer if the damage was caused by the joint fault of the pilot and the ship's crew? 

The District Court imposed two-thirds of the liability for the damage on the pilot, and the remaining third on the master. The court, basing its decision on vicarious liability principles, attributed the liability of the pilot to the Authority and the liability of the master to Zim. The Authority was therefore required to pay Zim two-thirds of the cost of repair of its ship. The Authority appealed to the Supreme Court.

Held: Respondent's appeal partially allowed.

The Pilotage Ordinance (Ordinance) obligates the shipowner (together with the master) to pay for damage caused during the course of pilotage of a ship, even if the pilotage was compulsory. This obligation appears in s 2 of the Ordinance, which states as follows:

Despite all that is said in any Ottoman law, or in any other law or ordinance, the owners or the master of any ship in pilotage, whether the pilotage is by compulsion or whether in another way, will be responsible for all loss or damage caused by the ship or by an error in driving the ship.

This provision establishes an exception to the regular law that should have applied to the liability of the shipowner for damages caused in pilotage. It also places vicarious liability on the shipowner for a tort caused by a compulsory pilot, although the regular tort law does not recognise such responsibility. Moreover, in 1939, when the Pilotage Ordinance was passed, the liability it placed on the shipowner and the master was an innovation, not only for a compulsory pilot, but also for a voluntary pilot. The explanation for this was that, until 1947, which is the year of commencement of the Torts Ordinance, Israeli tort law did not recognise the principle of vicarious liability, and as a result vicarious liability could not be attributed to the shipowner, even for the tort of a voluntary pilot.

The Ordinance is based on s 15 of the English Pilotage Law of 1913, which imposed vicarious liability for the acts and omissions of a compulsory pilot on a shipowner: prior to the English legislation it was not possible to attribute to the shipowner anything other than vicarious liability for torts of a voluntary pilot, and the owners were immune from liability for the torts of a compulsory pilot. This immunity caused significant difficulties, and weighed heavily upon both the execution of the pilotage and managing legal proceedings related to pilotage. Due to these difficulties various countries agreed in art 5 of the Brussels International Convention for the Unification of Certain Rules with Respect to Collision of Vessels 1910 to rescind this immunity. A year later a national committee in England decided to adopt the approach of the treaty and change the pilotage law in England accordingly. This recommendation was adopted in s 15(1) of the Pilotage Law of 1913, which came into force in 1918.

Applying the Ordinance to the facts of this case: the result is that the Ports Authority alone is liable to Zim by vicarious liability for the pilot's negligence. However, the pilot, were he to be sued to compensate Zim for the damage that was caused to the ship, would be obligated, in light of the contributory negligence of the captain, for only half the damage. The same applies to the Ports Authority. Accordingly, the appeal is to be partially affirmed in the sense that the Ports Authority must pay Zim for only half of the damage, and not two-thirds as the District Court had ruled.