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Lloyd's Maritime and Commercial Law Quarterly

LEGITIMATE LAST VOYAGE

The Peonia
A time charterer is under an obligation to redeliver the vessel by the end of the charter period.1 Where this consists of a period without any express tolerance (e.g., “six months”), a reasonable tolerance will be implied so that redelivery a few days late may not be a breach. But, where a tolerance is expressed in the charter (e.g., “six months 14 days more or less at charterer’s option”), it has been held that no further tolerance will be implied.2
It has, however, for some time been a well-established, if not the only, view that the law here was to be applied, not by looking to the actual date of redelivery, but rather to the last order for a voyage given by the charterer. It has been said that this must be “legitimate” in the sense that, when it was given, it must have appeared reasonable to think that the ship would be returned within the tolerance as above described. If it was, the voyage was a “legitimate last voyage”: and, if the ship was redelivered late, unless this was for reasons within the charterer’s responsibility, the charterer was not liable. If it was not, the owner could refuse the order and call for a fresh one: but, if he accepted it, in the absence of unusual circumstances he retained his right to damages. An example of this approach is the statement of Donaldson, J. (as he then was) in The Berge Tasta:3 “Against this background the law, with great good sense, concentrates upon the planning obligation.”
As regards damages where the ship is redelivered late as the result of a breach of contract, if the freight rate has gone up by the time of breach the damages will be calculated on the basis that the ship could have earned the higher rate after the final date. (If the charterer redelivers early, unless the owner waives all rights he must pay the freight up to the earliest time for redelivery.)
The requirement to apply the rule from the time of the last order was thought to derive from the decision of, or at any rate what was said by, the House of Lords in

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