Report No. 21
Clause 60
General.-This deals with the case of a missing ship. What the section embodies is a presumption that where the ship is missing and after reasonable time1 no news is received, an actual total loss may be presumed.
Cause of loss.-The section does not raise any presumption as to the cause of the total loss. This depends on the balance of probabilities. The question may become important, because it is only if the ship is lost by a peril insured against that the ship-owner can recover from the insurer.
Free of capture and seizure.-As has been pointed out,2 the question how the loss was caused becomes important in war time because of the F.C. and S. clause (free of capture and seizure), usually inserted in the policy to exclude risk from "capture, seizure, arrest, restraint or detainment consequences of hostilities or warlike operations" etc. When the ship is lost, the question naturally arises whether the ship was not lost by a war risk (in war-time, war risks are usually insured by the Government). The decision in such case depends on collateral circumstances, for example, the weather, the amount of enemy activity, the experience of other vessels, etc.
Coxwold Cases.-The wide form of the old F.C. & S. clause created unexpected consequences, Casualties such as stranding were held to be due to war risks in a case before the House of Lords.3 There, the ship was engaged in warlike operations at the time of loss, but the loss was actually due to stranding. The House of Lords held that the stranding was a consequence of the operations on which the ship was engaged, and therefore the ship was lost by a war peril, stressing the words "consequences of warlike operations". The new F.C. & S. clause provides that the warranty (i.e., the exclusion from risk of warlike operations) does not exclude "collision, contact with any fixed or floating object, stranding, heavy weather or fire unless caused directly by a hostile act.
1. As to "reasonable time", see section 88 of the English Act-clause 89.
2. Lord Chorley Shipping Law, 3rd Edn., p. 327.
3. Yorkshire Dale S.S. Co. v. Minister of War Transport (The Coxwold), 1942 AC 691: (1942) 2 All ER 6.
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