St John Shipping v Joseph Rank Ltd - Summary

St John Shipping Corporation v Joseph Rank [1957] 1 QB 267

Illegal performance of a contract.

Facts:

The plaintiff, St John Shipping Corporation, owned a ship that was to sail from a port in the United States to the United Kingdom. The defendants held a bill of lading in respect of some of the ship’s cargo. Whilst the ship was in the United States the charterers took on additional cargo which overloaded the ship. On arrival in the United Kingdom the master was prosecuted under s.44 and 57 Merchant Shipping (Safety and Load Line Conventions) Act 1932 and fined. The defendants paid some of the amount owing on the contract of carriage but withheld some of the balance equal to the amount of cargo that had overloaded the ship. The plaintiffs sued for the remaining amount.

Issues:

The defendant argued that, as it was illegally performed, the plaintiffs could not enforce rights that resulted from their own crime and the contract could not be sued upon.

Held:

Devlin J found for the plaintiffs. Performing a contract illegally did not render the contract illegal unless the statute meant to prohibit that contract. Parliament had not intended the 1932 Act to prohibit all contracts for the carriage of goods which involved overloading a ship. He said (at 288) that many statutory regulations in commercial life could be broken in very trivial ways and without “wicked intent” and, therefore:

“a court should be very slow to gold that a statute intends to interfere with the rights and remedies given by the ordinary law of contract.”

Otherwise if a breach of a statute was very trivial the seller could lose a much larger sum than any penalty Parliament had intended to impose.