The Court of Appeal, composed of Chief Justice Silvio Camilleri, Mr Justice Tonio Mallia and Mr Justice Joseph Azzopardi in the case ‘Charles Grech and Brian Galea v Paul Azzopardi’ on December 15, 2015, held, among other things, that compensation for salvage was due even if no notice was given to the ‘receiver of the wreck’.
On September 22, 1996, Charles Grech and Brian Galea discovered a boat called Ray Jay underwater in the limits of Mellieħa. They performed salvage works to resurface the boat, with the assistance of divers, a cabin cruiser and inflatable buoys and towed it to Għajn Tuffieħa. They also obtained the assistance of third parties against payment.
Grech and Galea demanded compensation for the salvage operation from the owner of the boat who refused to pay them. Faced with this situation, Grech and Galea proceeded to file legal proceedings against Paul Azzopardi, the owner, requesting the court:
• To declare that they were entitled to payment for their services for salvage;
• To liquidate the compensation due to them; and
• To condemn Azzopardi to pay such sum so liquidated together with legal interests.
In reply, Azzopardi contested the legal proceedings. He claimed that Grech and Galea’s motives were to appropriate the boat for themselves. Instead of notifying the owners of the salvage operation, they resurfaced the boat allegedly with the intention of keeping it and it was only by accident that he intervened to recover his boat.
Azzopardi claimed that Galea and Grech had caused damage to the boat, in respect of which there was a separate lawsuit.
It was not relevant that they did not give the police the registration number of the boat. They voluntarily tried to save the boat. If there was a valid reason, it was not necessary to notify the ‘receiver of the wreck’
It resulted that Azzopardi was the owner of the boat. On September 15 to 22, 1996, the boat, which was moored in Ġnejna Bay, broke loose and was later found underwater in the limits of Mellieħa.
Salvage had to be a voluntary act whereby a person rescued a seacraft in distress not out of any contractual relations nor to take the boat for himself.
Article 332 of Chapter 234 provides:
Where any person finds or takes possession of any wreck within the limits of Malta, or finds or takes possession of any wreck outside such limits and brings such wreck within the said limits, he shall:
(a) if he is the owner thereof, give notice to the receiver of wreck that he has found or taken possession of the same, and describing the marks by which the same may be recognised;
(b) if he is not the owner thereof, as soon as possible, deliver the same to the receiver of wreck;
And if any person fails, without reasonable cause, to comply with this article he shall for each offence be liable to a fine not exceeding 200 units and shall, in addition, forfeit any claim to salvage.
The court noted that compensation was due even if the wreck had sunk, or if it was a danger to navigation. It said that it did not appear that Grech and Galea failed to deliver the boat to the receiver of the wreck.
Article 343(1) Chapter 234 provides:
Where any vessel, whether Maltese or foreign, is wrecked, stranded or in distress at any place on or near the coasts within the territorial jurisdiction of Malta and services are rendered by any person in assisting that vessel or saving the cargo or apparel of that vessel or any part thereof, or where any services are rendered by any person other than a receiver of wreck in saving any wreck, they shall be payable to the salvor by the owner of the vessel, cargo, apparel, or wreck, a reasonable amount of salvage limited to the amount of the property saved.
The elements in a salvage operation were as follows:
• Rendering licit service to the boat or to its merchandise;
• The service had to be voluntary;
• The boat had to be in distress;
• The assistance had to consist in salvage work;
• The assistance had to be successful.
The court had no doubt that Grech and Galea had rescued the boat with their hard work. It did not result that they tried to steal the boat nor did they carry out the operation in hiding. They acted in broad daylight, in the presence of onlookers. Their intention was to recover the boat from the bottom of the sea; to raise it to the surface and to take it ashore and this constituted salvage.
The court said that the boat was in danger even if it sank. A boat could still be salvaged even if sunk, in order to prevent it from suffering greater damage.
The boat was in a reasonable condition despite what happened to it. It was shown that Grech and Galea had incurred expenses to resurface the boat from the bottom of the sea.
In absence of any agreement, compensation had to be liquidated by the court. Compensation had to be large and liberal if there existed all elements to claim salvage at the time when the vessel was in distress or passing through such danger. Compensation was due even if not requested.
Article 346(2) of Chapter 234 provides:
In determining the amount or the apportionment of salvage, the court shall have regard to:
• the measure of success obtained and the efforts and deserts of the salvor;
• the danger run by the vessel saved, by her passengers, crew and cargo;
• the danger run by the salvor and the salving vessel;
• the time expended, the expenses incurred and the losses suffered, and the risks of liability and other risks run by the salvors, and also the value of the property exposed to such risks, due regard being had to the special appropriation (if any) of the salvors vessel for salvage purposes;
• the value of the property saved.
In view of the value of the boat (€11,650) and the damage (€7,000-€8,000), the value of the boat after it was rescued was €4,500. The court awarded €2,000 compensation to be divided equally between each claimant, Grech and Galea.
Aggrieved by the decision of the First Hall of the Civil Court, Azzopardi entered an appeal calling for its revocation.
He reiterated his claim that Grech and Galea carried out such operation not to salvage it but to take it for themselves. They should have notified the receiver of the wreck and as they failed to do so, they forfeited their right to salvage, he claimed.
The Court of Appeal maintained that save for serious reasons it would not disturb the first court’s appreciation of facts.
As a general rule, each time a vessel was in danger and given assistance, there was a ground for compensation. In Chorley & Giles’s Shipping Law, the situation was explained by the English courts (Kennedy case 1985
“On the one hand, [the danger] must not be either fanciful or only vaguely possible or have passed by the time the service is rendered. On the other hand, it is not necessary that distress should be actual or immediate or that the danger should be imminent, it will be sufficient if, at the time at which assistance is rendered, the subject-matter has encountered any misfortune or likelihood of misfortune which might possibly expose it to loss or damage if the services were not rendered... [T]here must be such reasonable, present apprehension of danger that, in order to escape or avoid the danger, no reasonably prudent and skilful person in charge of the venture would refuse a salvor’s help if it were offered to him upon the condition of his paying a salvage reward.”
In this case the vessel sank and under article 343(1) of Chapter 234 the right for salvage existed even if the boat sank.
This Court of Appeal agreed with the first court, as regards the elements to qualify for salvage. The danger need not be absolute.
The court said that Grech and Galea carried out salvage work. They had no obligation to assist and did so voluntarily with the intention of either keeping the boat or to request compensation.
It was not relevant that they did not give the police the registration number of the boat. They voluntarily tried to save the boat. If there was a valid reason, it was not necessary to notify the ‘receiver of the wreck’, pointed out the court.
This was an issue which had to be determined in the discretion of the court, hearing the case. In this case the first court found that there was justification for this failure.
Grech and Galea cooperated with Azzopardi and the police. They agreed to release the boat immediately to Azzopardi and demanded compensation.
This court said that the first court exercised its discretion reasonably and it agreed with its decision.
Article 345(2) of Chapter 234 was considered by the first court when it liquidated compensation to amount to €2,000. The court agreed with the liquidation of damages by the first court.
For these reasons, on December 15, 2015, the Court of Appeal dismissed the appeal of Azzopardi and confirmed the decision of the first court of July 7, 2011.
Dr Karl Grech Orr is a shipping partner at Ganado Adovates.