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A.D. 1906. 60.-(1) Subject to any express provision in Construc

the policy, there is a constructive total loss

where the subject-matter insured is reasonably loss defined, abandoned on account of its actual total loss

appearing to be unavoidable, or because it could not be preserved from actual total loss without an expenditure which would exceed its value when the expenditure had been incurred.

(2) In particular, there is a constructive total loss (i) Where the assured is deprived of the

possession of his ship or goods by a peril insured against, and (a) it is unlikely that he can recover the ship or goods, as the case may be, or (b) the cost of recovering the ship or goods, as the case may be, would exceed their value when recovered ;

assured is entitled to a reasonable time to A.D. 1906. make inquiry.

(4) Where notice of abandonment is properly given, the rights of the assured are not prejudiced by the fact that the insurer refuses to accept the abandonment.

(5) The acceptance of an abandonment may be either express or implied from the conduct of the insurer. The mere silence of the insnrer after notice is not an acceptance.

(6) Where notice of abandoument is accepted the abandonment is irrevocable. The acceptance of tbe notice conclusively admits liability for the loss and the sufficiency of the notice.

(7) Notice of abandonment is unnecessary where, at the time when the assured receives information of the loss, there would be no possibility of benefit to the insurer if notice were given to him.

(8) Notice of abandonment may be waived by the insurer.

(9) Where an insurer has re-insured his risk, no notice of abandonment need be given

or

by him.

ment.

63.-(1) Where there is a valid abandonment Effect of the insurer is entitled to take over the interest abandon. of the assured in whatever may remain of the subject matter insured, and all proprietary rights incidental thereto.

(2) Upon the abandonment of a ship, the insurer thereof is entitled to any freight in course of being earned, and which is earned by her subsequent to the casualty causing the loss, less the expenses of earning it incurred after the casualty; and, where the ship is carrying the owner's goods, the insnrer is entitled to a reasonable remuneration for the carriage of them subsequent to the casualty causing the loss.

(ii) In the case of damage to a ship, where

she is so damaged by a peril insured against that the cost of repairing the damage would exceed the value of the ship when repaired.

In estimating the cost of repairs; no deduction is to be made in respect of general average contributions to those repairs payable by other interests, but account is to be taken of the expense of future salvage operations and of any future general average contributions to which the ship would be liable if

repaired; or (iii) In the case of damage to goods, where

the cost of repairing the damage and forwarding the goods to their destination

would exceed their value on arrival. Effect of 61. Where there is a constructive total loss constructive the assured may either treat the loss as a

partial loss, or abandou the subject-matter insured to the insurer and treat the loss as if

it were an actual total loss. Notice of 62.-(1) Subject to the provisions of this abandon- section, where the assured elects to abandon ment.

the subject matter insured to the insurer, he must give notice of abandonment. If he fails to do so the loss can only be treated as a partial loss.

(2) Notice of abandonment may be given in writing, or by word of mouth, or partly in writing and partly by word of mouth, and may be given in any terms which indicate the intention of the assured to abandon bis insured interest in the subject-matter insured unconditionally to the insurer.

(3) Notice of abandonment must be given with reasonable diligence after the receipt of reliable information of the loss, but where the information is of a doubtful character the

Partial Losses (including Salvage and General

Average and Particular Charges). 64.-(1) A particular average loss is a partial Particular loss of the subject-matter insured, caused by average lost. a peril insured against, and which is not a general average loss.

(2) Expenses incurred by or on behalf of the assured for the safety or preservation of the subject-matter insured, other than general average and salvage charges, are called particular charges. Particular charges are not included in particular average.

65.-(1) Subject to any express provision in Salvage the policy, salvage charges incurred in pro- charges, venting a loss by perils insured against may be recovered as a losy by those perils.

(2) “ Salvage charges" means the charges recoverable under maritime law by a salvor

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General

A.D. 1906. independently of contract. They do not in- (2) Where there is a loss recoverable under A.D. 1906.

clude the expenses of services in the nature of the policy, the insurer, or each insurer if there
salvage rendered by the assured or his agents, be more than one, is liable for such proportion
or any person employed for hire by them, for of the measure of indemnity as the amount of
the purpose of averting a peril insured against. his subscription bears to the value fixed by the
Such-expenses, where properly incurred, may policy in the case of a valued policy, or to the
be recovered as particular charges or as a insurable value in the case of an unvalued
general average loss, according to the circum- policy.
stances under which they were incurred.

68. Subject to the provisions of this Act and Total loss. 66.—(1) A general average loss is a loss average loss. caused by or directly conseqnential on a general

to any, express provision in the policy, where

there is a total loss of the subject-matter in.
average act. It includes a general average ex- sured. -
penditure as well as a general average sacrifice. (1) If the policy be a valued policy, the

(2) There is a general average act where measure of indemnity is the som fixed
any extraordinary sacrifice or expenditure is by the policy:
voluntarily and reasonably made or incurred (2) If the policy be an unvalued policy, the
in time of peril for the purpose of preserving the measure of indemnity is the insurable
property imperilled in the common adventure. value of the subject matter insured.

(3) Where there is a general average loss, 69. Where a ship is damaged, but not Partial loss the party on whom it falls is entitled, subject totally lost, the measure of indemnity, subject

of ship.
to the conditions imposed by maritime law, to s to any express provision in the policy, is as
a rateable contribution from the other parties follows:-
interested, and such contribution is called a (1) Where the ship has been repaired, the
general average contribution.

assured is entitled to the reasonable cost
(4) Subject to any express provision in the

of the repairs, less the customary deducpolicy, where the assured has incurred a

tions, but not exceeding the sum insured
general average expenditure, he may recover

in l'espect of any one casualty:
from the insurer in respect of the proportion (2) Where the ship has been only partially
of the loss which falls upon him; and, in the repaired, the assured is entitled to the rea-
case of a general average sacrifice, he may sonable cost of such repairs, compated as
recover from the insurer in respect of the

above, and also to be indemnified for the
whole loss without having enforced his right reasonable depreciation, if any, arising
of contribution from the other parties liable from the unrepaired damage, provided
to contribute.

that the aggregate amount shall not exceed (5) Subject to any express provision in the the cost of repairing the whole damage, policy, where the assured has paid, or is liable

computed as above : to pay, a general average contribution in re.

(2) Where the ship has not been repaired, spect of the subject insured, he may recover and has not been sold in her dainaged therefor from the insurer.

state during the risk, tbe assured is entitled (6) In the absence of express stipulation, to be indemnified for the reasonable depre. the insurer is not liable for any general aver- ciation arising from the unrepaired dam. age loss or contribution where the loss was

age, but not exceeding the reasonable not incurred for the purpose of avoiding, or in cost of repairing such damage, computed connexion with the avoidance of, a perilinsured

as above. against. (7) Where ship, freight, and cargo, or any 70. Subject to any express provision in the Partial loss

of freight. two of those interests, are owned by the same policy, where there is a partial loss of freight, assured, the liability of the insurer in respect The measure of indemnity is such proportion of general average losses or contributions is of the sum fixed by the policy in the case of to be determined as if those subjects were a valued policy, or of the insurable value in owned by different persons.

the case of an unvalued policy, as the propor

tion of freight lost by the assured bears to the Measure of Indemnity:

whole freight at the risk of the assured under

the policy. 67.- (1) The sum which the assured can liability of

recover in respect of a loss on a policy by 71. Where there is a partial loss of goods, Partial loss which he is insured, in the case of an unvalued merchandise, or other moreables, the measure of goods,

merchanpolicy to the full extent of the insurable of indemnity, subject to any express provision dise &c. value, or, in the case of a valued policy in the policy, is as follows: to the full extent of the value fixed by the (1) Where part of the goods, merchandise or policy, is called the measure of indemnity.

other moveables insured by a valued policy

Extent of

insurer for loss.

measure of

A.D. 1906. is totally lost, the measure of indemnity contributory value, and for which the insurer A.D. 1906.

is such proportion of the sum fixed by the is liable, that amount must be deducted from
policy as the insurable value of the part the insured value in order to ascertain what
lost bears to the insurable value of the the insurer is liable to contribute.
whole, ascertained as in the case of an (2) Where the insurer is liable for salvage
unvalued policy:

charges the extent of his liability must be
(2) Where part of the goods, merchandise, or determined on the like principle.

other moveables insured by an unvalued
policy is totally lost, the measure of in-

74. Where the assured has effected an Liabilities
demnity is the insurable value of the part
insurance in express terms against any liability

to third

parties. lost, ascertained as in case of total Joss:

to a third party, the measure of indemnity, (3) Where the whole or any part of the goods subject to any express provision in the policy, or merchandise insured has been delivered

is the amount paid or payable by him to such damaged at its destination, the measure

third party in respect of such liability. of indemnity is such proportion of the sum 75.-(1) Where there has been a loss in General profixed by the policy in the case of a valued

respect of any subject-matter not expressly visions as to policy, or of the insurable value in the provided for in the foregoing provisions of

indemnity. case of an unvalued policy, as the difference

this Act, the measure of indemnity shall be between the gross sound and damaged

ascertained, as nearly as may be, in accordance values at the place of arrival bears to the

with those provisions, in so far as applicable
gross sound value :

to the particular case.
(4) “Gross value” means the wholesale price (2) Nothing in the provisions of this Act

or, if there be no such price, the estimated relating to the measare of indemnity shall
value, with, in either case, freight, landing affect the rules relating to double insurance,
charges, and duty paid beforehand ; pro- or prohibit the insurer from disproving in-
vided that, in the case of goods or merchan-

terest wbolly or in part, or from showing that
dise customarily sold in bond, the bonded at the time of the loss the whole or any part
price is deemed to be the gross value. of the subject-matter insured was not at risk

Gross proceeds means the actual price under the policy.
obtained at a sale where all charges on sale
are paid by the sellers.

76.-(1) Where the subject-matter insured Particular Apportion- 72.-(1) Where different species of property

is warranted free from particular average, the average

warranties. ment of valuation. are insured under a single valuation, the valua.

assired cannot recover for a loss of part, other tion must be apportioned over the different

than a loss ir.carred by a general average sacri. species in proportion to their respective insur

fice, unless the contract contained in the policy able values, as in the case of an unvalued

be apportionable; but, if the contract be appor. policy. The insured value of any part of a

tionable, the assured may recover for a total

loss of any apportionable part.
species is such proportion of the total insured
value of the same as the insurable value of the

(2) Where the subject matter insured is
part bears to the insurable value of the whole,

warranted free from particular average, either ascertained in both cases as provided by this Act.

wholly or under a certain percentage, the (2) Where a valu ition has to be apportioned,

insurer is nevertheless liable for salvage and particulars of the prime cost of each sepa

charges, and for particular charges and other rate species, quality, or description of goods

expenses properly incurred pursuant to the
cannot be ascertained, the division of the valua.

provisions of the suing and labouring clause
tion may be made over the net arrived sound in order to avert a loss insured against.
values of the different species, qualities, or

(3) Unless the policy otherwise provides,
descriptions of goods.

where the subject matter insured is warranted

free from particular average under a specified General 73.-(1) Subject to any express provision in average contributhe policy, whøre the assured has paid, or is

percentage, a general average loss cannot be

added to a particular. average loss to make up tions and liable for, any general arerage contribution, salvage

the specified percentage. the measure of indemnity is the full amount of charges. such.coatribution, if the subject matter liable

(4) For the purpose of ascertaining whether

the specifi d percentage has been reached,
to contribution is insured for iis full contribu-

regard shall be had only to the actual loss
tory value; but, if such subject-matter be
not insured for its full contributory value,

suffered by the subject-matter insured. Par.

ticular charges and the expenses of and
or if only part of it be insored, 'the in-
demnity payable by the insurer must be re-

incidental to ascertaining and proving the loss

must be excluded. duced in proportion to the under insurance, and where there has been a particular average 77.—(1) Unless the policy otherwise provides, Successive loss which constitutes a deduction from the and subject to the provisions of this Act, the losses.

surance.

A.D. 1906. ipsurer is liable for successive losses, even

though the total amount of such losses may exceed the sum insured.

(2) Where, under the same policy, a partial loss, which has not been repaired or otherwise raade good, is followed by a total losa, the assured can only recover in respect of the total loss :

Provided that nothing in this section shall affect the liability of the insurer under the

suing and labouring clause. Suing and 78.--(1) Where the policy contains a saing labouring clause.

and labouring clause, the engagement thereby entered into is deemed to be supplementary to the contract of insurance, and the assured may recover from the insurer any expenses properly incurred pursuant tu the clause, notwithstand. ing that the insurer may have paid for a total loss, or that the subject-matter may have been warranted free from particular average, either wholly or under a certain percentage.

(2) General average losses and contributions and salvage charges, as defined by this Act, are not recoverable under the suing and labonring clause.

(3) Expenses incurred for the purpose of averting or diminishing any loss not covered by the policy are not recoverable under the suing and labouring clause.

(4) It is the duty of the assured and his agents, in all cases, to take such measures as may be reasonable for the purpose of averting or minimising a loss.

Rights of Insurer on Payment. Right of 79.-(1) Where the insurer pays for a total subrogation. loss, either of the whole, or in the case of goods

of any apportionable part, of the subjectmatter insured, be thereupon becomes entitled to take over the interest of the assured in what. ever may remain of the subject-matter so paid for, and he is thereby subrogated to all the rights and remedies of the assured in and in respect of that subject matter as from the time of the casualty causing the loss.

(2) Subject to the foregoing provisions, where the insurer pays for a partial loss, he acquires no title to the subject matter insured, or such part of it as may remain, but be is thereupon subrogated to all rights and reme. dies of the assured in and in respect of the subject-matter insured as from the time of the casualty causing the loss, in so far as the assured has been indemnitied, according

to tbis Act, by such payment for the loss. Right of

(2) If any insurer pays more than his pro- A.D. 1906. portion of the loss, he is entitled to maintain an action for contribution against the other insurers, and is entitled to the like remedies as a surety who bas paid more than his proportion of the debt.

81. Where the assured is insured for an Effect of amount less than the insurable valne or, in the under incase of a valued policy, for an amount less than the policy valuation, he is deemed to be his own insurer in respect of the uningured balance.

Return of Premium. 82. Where the premium, or a proportionate Enforce. part thereof is, by this Act, declared to be ment of

return. returnable,(a) If already paid, it may be recovered by

the assured from the insurer; and (b) If unpaid, it may be retained by the

assured or his agent. 83. Where the policy contains a stipulation Return hy for the return of the premium, or a propor

agreement. tiouate part thereof, on the happening of a certain event, and that event happens, the premium, or, as the case may be, the proportionate part thereof, is thereupon returnable to the assured.

84.-(1) Where the consideration for the Return for payment of the premium totally fails, and failure of there has been no fraud or illegality on the

considera

tion. part of the assured or his agents, the premium is thereapon returnable to the assured.

(2) Where the consideration for the payment
of the premium is apportionable and there
is a total failure of any apportionable part of
the consideration, a proportionate part of the
premium is, under the like conditions, there-
upon returnable to the assured.
(3) In particular-
(a) Where the policy is void, or is avoided
by the insurer as from the commence.
ment of the risk, the premium is return.
able, provided that there has been no
fraud or illegality on the part of the
assured ; but if the risk is not appor-
tionable, and has once attached, the

premium is not returnable :
(6) Where the subject-matter insured, or

part thereof, has never been imperilled,
the premium, or, as the case inay be,
a proportionate part thereof, is retorn-
able :

Provided that where the subject-
matter has been insured “lost or not
lost" and has arrived in safety at tha
time when the contract is concluded,
the premium is not returnable unless,
at such time, the insurer knew of
the safe arrival;

80.-(1) Where the assured is over-insured by double insurance, each insurer is bound, as between himself and the other insurers, to contribute rateably to the loss in proportion to the amount for which he is liable ander his contract.

contri bution.

A.D. 1906.

(c) Where the assured has no insurable interest throughout the currency of the risk, the premium is return. able, provided that this rule does not apply to a policy effected by way of gaming or wagering; (d) Where the assured has a defeasible

interest which is terminated during the currency of the risk, the premium is not

returnable ; (e) Where the assured has over-insured under an unvalued policy, a proportionate part of the premium is return

able ; (f) Subject to the foregoing provisions,

where the assured has over-insured by double insurance, a proportionate part of the several premiums is returnable :

Provided that, if the policies are effected at different times, and any earlier policy bas at any time borne the entire risk, or if a claim has been paid on the policy in respect of the full sum insured thereby, no premium is returnable in respect of that policy, and when the double insurance effected knowingly by the assured no premium is returnable.

terms.

18

87.-(1) Where any right, duty, or liability A.D. 1906. would arise under a contract of marine insur.

Implied ance by implication of law, it may be negatived obligations or varied by express agreement, or by usage,

varied by

agreement if the usage be such as to bind both parties to or usage. the contract.

(2) The provisions of this section extend to any right, duty, or liability declared by this Act which may be lawfully modified by agree. ment.

88. Where by this Act ary reference is made Reasonable to reasonable time, reasonable premium, or time, &c. &

of reasonable diligence, the question what is fact. reasonable is a question of fact.

89. Where there is a duly stamped policy, slip as evi. reference may be made, as heretofore, to the dence. slip or covering note, in any legal proceeding.

90. In this Act, unless the context or sub- Interpre. ject-matter otherwise requires,

tation of Action includes counter-claim and set

off":
“ Freight” includes the profit derivable by

a shipowner from the employment of his
ship tu carry his own goods or moveables,
As well as freight payable by a third party,
but does not inclnde passage money :
Moveables” means any moveable tangible
property, other than the ship, and in-
cludes money, valuable securities, and
other documents :

Policy” means a marine policy. 91.-(1) Nothing in this Act, or in any repeal Savings. effected thereby, shall affect(a) The provisions of the Stamp Act, 1891, 54 & 55 Vict.

or any enactment for the time being in c. 39. force relating to the revenue ; (6) The provisions of the Companies Act, 25 & 26 Vici.

1862, or any enactment amending or sub- c. 89.

stituted for the same; (c) The provisions of any statute not ex.

pressly repealed by this Act. (2) The rules of the common law including the law mercbant, save in so far as they are inconsistent with the express provisions of this Act, sball continue to apply to contracts of marine insurance.

92. The enactments mentioned in the Second Repeals. Schedule to this Act are hereby repealed to the extent specified in that schedule.

93. This Act shall come into operation on Commencethe first day of January one thousand nine ment. hundred and seven.

94. This Act may be cited as the Marine Short title. Insurance Act, 1906.

case of

surance.

Muiual Insurance. Modification 85.--(1) Where two or more persons muof Act in

tually agree to insure each other against mutual in. marine losses there is said to be a mutual

insurance.

(2) The provisions of this Act relating to the premium do not apply to mutual insurance, but a guarantee, or such other arrangement as may be agreed upon, may be substituted for the premium.

(3) The provisions of this Act, in so far as they may be modified by the agreement of the parties, muy in the case of mutual insurance be modified by the terms of the policies issued by the association, or by the rules and regulations of the association.

(4) Subject to the exceptions mentioned in this section, the provisions of this Act apply to a mutual insurance.

Supplemental. Ratification 86. Wbero a contract of marine insurance by assured. is in good faith effected by one person on be.

half of another, the person on whose behalf it is effected may ratify the contract even after he is aware of a logs.

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