(Editor—Mavis M. D’Souza)

Subject heading with page numbers

82. ADMIRALTY PRACTICE — Interest — Accrued interest — Plaintiffs made payment into Court in respect of limitation action — Order made for payment to be distributed between defendants — No order made as to accrued interest — Whether defendants entitled to whole of accrued interest.

On Mar. 19, 1969, a collision occurred in the North Sea between the plaintiffs’ vessel, Zaglebie Dabrowski and the defendants’ vessel Garden City. Garden City sank and was a total loss, as was most of her cargo. In 1976 it was held in a collision action that Zaglebie Dabrowski and Garden City were respectively 60 per cent. and 40 per cent. to blame. In July, 1977, it was held that Garden City sank as a result of the collision and since the Garden City claims clearly exceeded by a considerable amount the limitation figure in s. 503 of the Merchant Shipping Act, 1894, as subsequently amended, the plaintiffs commenced a limitation action on Apr. 27, 1978.

On Apr. 28, the plaintiffs paid into Court the sum of £692,900.63 being, as to £395,341.40, the limitation figure correctly determined as at that date under s. 503, and as to the balance of £297,559.23 interest from the date of collision to Apr. 30, 1978, at 8.25 per cent. The amount paid in was, at the request of the plaintiffs, placed on short term interest account. On Mar. 2, 1982, it was held that the plaintiffs were entitled to limit their liability and on Nov. 18, 1982, the Registrar ordered that the total amount paid into Court by the plaintiffs, be paid out of Court on Dec. 1, 1982, and distributed in specified proportions to the defendants, the owners of Garden City and the owners of cargo lately laden on board Garden City. No order was made as to the accrued interest which at Nov. 30, 1982, amounted to £534,904.76. For the defendants it was contended that all accrued interest should be paid out to the defendants in the same proportions as the amount paid into Court either as a matter of entitlement or of discretion.

The plaintiffs argued that the defendants were only entitled to or as a matter of discretion should only be awarded that part of the accrued interest which represented (a) simple interest on the limitation figure from the date of payment in until date of decree and (b) short term investment account interest from date of decree to date of payment out on the total of the amount paid in and simple interest on the limitation figure from the date of payment in until date of decree.