BLANE STEAMSHIPS, LTD. v. MINISTER OF TRANSPORT.

[1951] 1 Lloyd's Rep. 121

KING'S BENCH DIVISION.

Before Mr. Justice Croom-Johnson.

Charter-party-Option to purchase-Hire to cease upon constructive total loss- Obligation upon charterers to insure -Policy moneys recoverable to be assigned to owner-Exercise of option by charterers - Grounding of ship resulting in constructive total loss - Effect upon option-Ship under time-charter from M.O.T. - Provisions of charter-party: 7. . . . The charterers shall throughout this charter-party insure the ship and keep her insured at the charterers' own expense against all the usual marine and war risks for and on a valuation of £130,000 sterling . . . and shall assign to the owner the current policies of insurance and all moneys insured by or to become payable under the said policies and the full benefit thereof . . . 8. . . . Should the ship become a constructive total loss, such loss shall be deemed to have occurred on and hire under this charter-party shall cease as from the day of the casualty resulting in such loss . . . 11. . . . The charterers shall have the option to be exercised by notice in writing given to the owner not later than three months before the expiration of this charter-party to purchase the ship as she then lies for the sum of £130,000 (basic price for purchase) less depreciation at the rate of 5 per cent. per annum for the period between the date of delivery hereunder and the date of transfer of the ship to the charterers.

Grounding of ship on Sept. 5, 1950- Notice of abandonment given to underwriters by charterers on Sept. 6, notice being confirmed by M.O.T. on Sept. 8- Abandonment not accepted-Option to purchase exercised by charterers on Sept. 7-Whether ship a constructive total loss at time option exercised, resulting in frustration of charter-party and consequently of option as one of its terms-Divisibility of charter-party terms-Subsequent payment by underwriters on basis of total loss- Claim by charterers for declaration that they were entitled to benefit of policy moneys - Merchant Shipping Act, 1894, Sect. 21-Marine Insurance Act, 1906, Sect. 60-Law of Property Act, 1925, Sect. 47.