Herne Bay Steam Boat Co v Hutton

Herne Bay Steam Boat Co v Hutton [1903] 2 KB 683

CONTRACT OF HIRING, LIABILITY OF HIRER, FAILURE OF FUTURE EVENT, SUBJECT MATTER OF A CONTRACT, FOUNDATION OF A CONTRACT, RISK, DEMISE OF SHIP

Facts

A Royal naval review was planned to take place in Spithead on 28 June 1902. The plaintiff and the defendant agreed in writing that the plaintiff’s steamship Cynthia would be at the defendant’s disposal on 28 and 29 June to take passengers from HerneBay for the purposes of viewing the naval review and for a day’s cruise around the fleet.  This was subject to a specified deposit and rental fee. On signing of the agreement, the defendant paid the deposit. On 25 June, the review was cancelled. The plaintiffs contacted the defendant for instructions and informed him that the ship was ready to start and they demanded a payment. The plaintiffs received no reply, so they decided to use the ship for their own purposes on 28 and 29 June and made a profit from this use. On 29 June, the defendant repudiated the contract in whole. The plaintiffs took an action against the defendant to recover the balance for the rent less of the profits they made by the use of the ship during the two days.

Issue

Were the plaintiffs entitled to recover the rent due for the two days despite the fact that Royal naval review was cancelled?

Held

The decision was in favour of the plaintiffs.

The plaintiffs were entitled to recover the rent arrears since:

(1) the venture was the defendant’s and therefore, the risk was his alone;

(2) the taking place of the Royal naval review was not the sole basis of the contract, so there had been no total destruction of the subject matter of the contract.

It was held further that the contract did not operate as a demise of the ship.