Raja Azlan Shah J:

A cargo of 668 steel pipes was insured free from particular average, on a voyage from Prai to Brunei by a barge towed by the tug "Selvaliant". In the course of the voyage, the vessel and cargo sustained damage by perils of the sea insured against and as a result all but 12 of the pipes fell into the sea. The vessel was obliged to put into the defendant No. 2's shipyard in Singapore. On visual inspection the surviving pipes appeared to have sustained damage. The plaintiffs who were the owners of the pipes brought this action against defendants No. 1, the underwriters, to recover the amount insured i.e. $938,702.49. The action against defendants No. 2, the owners of the vessel, was stayed because the writ was not served on them.

There is a great deal of common ground between the parties. First, English Law applied i.e. the English Marine Insurance Act, 1906 applied subject to any express terms in the contract of insurance. Secondly, the plaintiffs had entered into a contract with the Brunei Government to supply the latter with $8.5m worth of steel pipes. Most of the pipes were 36" pipes 30 ft long and three tons in weight and priced at $1,200 each. They had by March 1970 fulfilled their part of the contract. Thirdly, the plaintiffs had entered into a contract of carriage with the defendants No. 2 to ship the said pipes in not less than eight separate voyages. The first voyage reached its destination. The present claim is in respect of the second shipment. Lastly, in consequence of the perils of the sea insured against 98.30f the pipes went overboard.

The plaintiffs put their claim in one of two ways. First, they said the cargo was a constructive total loss. They said because the costs to recondition and forward the damaged pipes to Brunei would exceed their value on arrival, they, as an uninsured prudent owner would do in like circumstances, had no alternative but to abandon them, which they did by notice. It is not disputed that no joint survey was either called for or made. Such survey was rendered necessary under the policy in cases of loss or damage. Secondly, they said the cargo was an actual total loss by reason of the rule de minimis non curat lex.

The defence was a denial that the cargo which was insured under one single consignment was a total loss. They contended that under the policy they would be liable for a total loss only and the premium was calculated with reference to their liability for a total loss.

I will now consider the arguments advanced as regards constructive total loss. Mr. Gratiaen on behalf of the plaintiffs, submitted that here 98.30f the pipes fell into the sea and the rest was brought to Singapore, damaged. He submitted that the proper test to apply in a case like the present is the "prudent uninsured owner" test as explained by Lord Abinger in CB Roux v. Salvador 132 ER 413, at p. 421 and Vaugham Williams LJ in Angel v. Merchant's Marine Insurance Company [1903] 1 KB 811 at p. 816 Applying that test, he argues that because of the considerable damage sustained by the surviving pipes an uninsured businessman would really abandon them. I cannot subscribe to this view. In determining whether the cargo was a constructive total loss, the true test in the present case where the cargo could be looked at and the cost of repaid estimated, is whether the cost of recovering, reconditioning and forwarding the cargo arrival. The "prudent uninsured owner" test must be discarded. Nothing under the present policy would make the defendants liable as for a constructive total loss except the impossibility of recovering, reconditioning and forwarding the cargo to their destination at a cost greater than their value on arrival. I am fortified in this view by the express conditions of cl. 6 of the Institute Cargo Clauses (EPA) which is annexed to and forming part of the policy. Clause 6 is now reproduced:

No claim for Constructive Total Loss shall be recoverable hereunder unless the good