Compania Portorafti Commerciale S.A. v Ultramar Panama Inc. (Captain Gregos)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE BINGHAM,LORD JUSTICE STOCKER,LORD JUSTICE SLADE |
| Judgment Date | 14 December 1989 |
| Judgment citation (vLex) | [1989] EWCA Civ J1214-6 |
| Docket Number | 89/1221 |
| Court | Court of Appeal (Civil Division) |
| Date | 14 December 1989 |
[1989] EWCA Civ J1214-6
Lord Justice Slade
Lord Justice Stocker
Lord Justice Bingham
89/1221
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
(QUEEN'S BENCH DIVISION)
COMMERCIAL COURT
(MR JUSTICE HIRST)
Royal Courts of Justice
MR DAVID JOHNSON Q.C. and MR NIGEL TEARE, instructed by Messrs Lewis Moore, appeared for the Appellant (Plaintiff).
MR IAN MILLIGAN, instructed by Messrs Clyde & Co. appeared for the Respondents (Defendants).
In June 1984 the vessel CAPTAIN GREGOS carried a cargo of crude oil from Egypt to Rotterdam under bills of lading which incorporated the Hague-Visby Rules. Discharge at Rotterdam was completed on 17th June 1984.
In December 1985 Clyde & Co., who had recently been instructed by owners of the cargo, complained that the ship had made short delivery. The shipowners' P and I club replied that the claim was barred by the one year time limit in Article III rule 6 of the Hague-Visby Rules.
On 28th January 1987 the shipowners issued an originating summons in the Commercial Court seeking determination of the question
"whether a claim in tort by the owners of a cargo of crude oil carried on board the vessel CAPTAIN GREGOS pursuant to the contract of carriage contained in or evidenced by 2 bills of lading ref. no. LN-A-84–42 dated 31 May 1984 and 1 June 1984 which incorporate the Hague-Visby Rules for damages arising out of an alleged theft of part of the said cargo has been extinguished by Article III rule 6 of the said Rules on the grounds that suit was not brought within one year of the date when the cargo should have been delivered."
As later amended this summons was issued against Ultramar Panama Inc., Phibro Energy AG and BP Oil International Limited. Ultramar has never been served and has played no part in the proceedings. Phibro and BP contested the summons, which was heard by Hirst J. in December 1988. In a judgment reported at [1989] 2 L1. Rep 63 he determined the question in favour of the cargo owners and made a declaration "that the claim for wrong or misdelivery by the [ship] Owners….. for damages arising out of an alleged theft of part of the said cargo has not been extinguished by Article III rule 6 of the said Rules."
Mr Milligan, who appears for Phibro and BP, whom I shall together call "the cargo-owners," accepts that the expression "theft" used in the summons and the declaration does not properly describe his civil causes of action which must lie in conversion (or wrongful interference with goods) and negligence. To reflect this admission, leave was sought and given to re-amend the originating summons by deleting "theft" and substituting "conversion, or negligence resulting in the loss…" It is, however, the essence of the cargo-owners' case that the short delivery of which they complain was caused not by normal evaporation or wastage or inadvertent or accidental loss, but by deliberate misappropriation. In their counterclaim served on 30th January 1989 and the particulars given under it the cargo-owners allege that the shipowners used part of the cargo to bunker the vessel, transhipped part of the cargo during the voyage and deliberately omitted to discharge the full cargo at Rotterdam, concealing part of it in hidden recesses aboard the vessel and sailing away with that part of the cargo still on board for their own use. If it is necessary to do so, the cargo-owners stigmatise the shipowners' conduct as dishonest.
By virtue of section 35(1)(b) of the Limitation Act 1980 the cargo-owners' counterclaim is deemed to have been commenced on the same date as the shipowners' original action, 28th January 1987. But that was over 18 months after the expiry of the one year time limit in Article III rule 6. The shipowners now appeal against the judge's ruling that that time limit does not apply. Our first task is to decide whether it does or not. For purposes of this enquiry I assume that the shipowners and the cargo-owners were respectively parties to a bill of lading contract incorporating the Hague-Visby Rules.
The starting point of this enquiry must lie in the Rules themselves, scheduled to the Carriage of Goods by Sea Act 1971 and having effect in this country as if part of directly enacted statute law ( The Hollandia [1983] 1 A.C. 565 at 572). The whole scheme and effect of the Rules is in some sense relevant to our task of construction, since the Rules represent a negotiated bargain between shipowners whose interest lies in maximum immunity and cargo-owners whose interest lies in maximum redress. But I must confine my citations to those provisions which appear to be most strictly germane to the present problem.
(e) 'Carriage of goods' covers the period from the time when the goods are loaded on to the time when they are discharged from the ship.
Subject to the provisions of Article VI, under every contract of carriage of goods by sea the carrier, in relation to the loading, handling, stowage, carriage, custody, care and discharge of such goods, shall be subject to the responsibilities and liabilities, and entitled to the rights and immunities hereinafter set forth.
2. Subject to the provisions of Article IV, the carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.
6. Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, or, if the loss or damage be not apparent, within three days, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading.
The notice in writing need not be given if the state of the goods has, at the time of their receipt, been the subject of joint survey or inspection.
Subject to paragraph 6 bis the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods, unless suit is brought within one year of their delivery or of the date when they should have been delivered. This period may, however, be extended if the parties so agree after the cause of action has arisen.
In the case of any actual or apprehended loss or damage the carrier and the receiver shall give all reasonable facilities to each other for inspecting and tallying the goods.
5.(a) Unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading, neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the goods in an amount exceeding…(e) Neither the carrier nor the ship shall be entitled to the benefit of the limitation of liability provided for in this paragraph if it is proved that the damage resulted from an act or omission of the carrier done with intent to cause damage, or recklessly and with knowledge that damage would probably result.
1. The defences and limits of liability provided for in these rules shall apply in any action against the carrier in respect of loss or damage to goods covered by a contract of carriage whether the action be founded in contract or in tort.
4. Nevertheless, a servant or agent shall not be entitled to avail himself of the provisions of this article, if it is proved that the damage resulted from an act or omission of the servant or agent done with intent to cause damage or recklessly and with knowledge that damage would probably result."
As compared with the Hague Rules scheduled to the 1924 Act, these Rules contain two changes relevant for present purposes:
(1) Whereas Article III rule 6 of the Hague Rules had provided "In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought…" the Hague-Visby Rules provide "…the carrier and the ship shall in any event be discharged from all liability whatsoever in respect of the goods, unless suit is brought…"
(2) Article IV bis is entirely new.
The learned judge summarised the respective arguments of the parties very fully in his judgment at pages 65 to 69 of the report and arguments to very much the same effect were addressed to us. The main thrust of the shipowners' argument was to this effect. The conduct alleged against the shipowners (if established) amounted to incontestable breaches of their duty under Article II and Article III rule 2. Article IV bis rule 1 showed clearly that a cargo owner could not improve his position by framing his claim in tort. Article III rule 6 discharges the shipowner from all liability whatsoever in respect of the goods unless suit is brought within one year. Reference to the travaux préparatoires which led to the amendment of Article III rule 6 showed that the object of the amendment (as defined by the chairman of the relevant subcommittee) was "to give the text a bearing as wide as possible, so as to embody within the scope of application of the one year period, even the claims grounded on the delivery of the goods to a person not entitled to them, i.e. even in the case of what we call a wrong delivery." Since the plain intention of Article III rule 6 was to achieve finality, the time limit would apply even if the conduct alleged against the shipowners did not amount to breaches of Hague-Visby obligations.
Mr Milligan for the cargo-owners accepted that there had on his case been some breaches by the shipowners of their obligations...
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