Lloyd's Maritime and Commercial Law Quarterly
COST OF REPAIRS OR DIMINUTION IN VALUE: THE ROLE OF INTENTION
Eugene CHENG Jiankai*
JSD v Tri-Line
Following a collision, a claimant generally has a right to claim for the cost of repairs or the diminution in value of the ship. However, where there is clear proof that the diminution in value is substantially less than the cost of repairs, the claimant would be barred from recovering the cost of repairs.1 The question whether a claimant ought to choose between the cost of repairs or the diminution in value is determined by an objective reasonableness test, of which the claimant’s intention to carry out the repairs is a factor2 (“the Ruxley test”). However, some questions arise on the nature and role of such intention. Is such intention a prerequisite for claiming the cost of repairs or is it a mere factor in considering the reasonableness of choosing the cost of repairs?3 How important is intention as a factor in considering the reasonableness of choosing the cost of repairs? Are other factors, such as disproportionality, equally important in the assessment of reasonableness?4 These questions were answered in JSD Corp Pte Ltd v Tri-Line Express Pte Ltd,5 where the Singapore High Court laid out a comprehensive framework detailing the role of intention and other relevant factors in the Ruxley test.
Facts
In JSD, the claimant contracted with the respondent to deliver several vehicles and spare parts from Queensland, Australia to Singapore. The chattels were delivered but damaged because they had not been properly secured in their containers during transportation. The claimant claimed for the incurred and outstanding cost of repairs,
* Advocate and Solicitor, Supreme Court of Singapore.
1. The Argonaftis
[1989] 2 Lloyd’s Rep. 487, 493. See also The Maersk Colombo [2001] EWCA Civ 717; [2001] 2 Lloyd’s Rep. 275, [76].
2. Ruxley Electronics & Construction Ltd v Forsyth [1996] AC 344 (“Ruxley”).
3. In the cases leading up to Ruxley, the emphasis appeared to be on a claimant’s intention as a prerequisite for claiming the cost of repairs. See eg Tito v Waddell (No 2) [1977] Ch 106 (“Tito”), 327, 332–333 and Radford v De Frobervile [1977] 1 WLR 1262 (“Radford”), 1283. Although Tito and Radford were both approved by Ruxley, the role of intention was reduced and relegated to being a mere factor in assessing the reasonableness of choosing the cost of cure.
4. See Ruxley, 356–357.
5. [2022] SGHC 227 (“JSD”).
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