Datec Electronic Holdings Ltd and Another and United Parcels Service Ltd and Another
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr Justice Andrew Smith |
| Judgment Date | 22 February 2005 |
| Neutral Citation | [2005] EWHC 221 (Comm) |
| Docket Number | Case No: 2002/531 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 22 February 2005 |
[2005] EWHC 221 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
The Hon. Mr Justice andrew Smith
Case No: 2002/531
Mr Matthew Reeve (instructed by Clyde & Co) for the Claimants
Mr Charles Priday (instructed by Barlow Lyde & Gilbert) for the Defendants
Hearing dates: 16, 17, 18, 24 and 25 November 2004
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
………………………..
Mr. Justice Andrew Smith:
The first claimants in these proceedings, Datec Electronic Holdings Limited ("Datec"), deal in computer processors and other parts, and the second claimants, Incoparts BV ("Incoparts"), a Dutch company based in Amsterdam, are one of Datec's customers. They were the consignors and the consignees of a shipment of computer processors, and they seek damages from the defendant carriers ("UPS") for their loss. The UPS group of companies are based in the United States, but have a worldwide operation and describe themselves as "the world's largest express package and document delivery company". The carriage was arranged on 25 July 2002 by Tibbett and Britten Ltd ("T&B"), Datec's distribution agents. The consignment was to be carried from Datec's warehouse at Bletchley, Milton Keynes via Luton, Cologne and UPS's premises in Amsterdam to the warehouse at Schipol of L&A Freight BV ("L&A"), who were Incoparts' agents. (UPS's premises have been called their "hub", and I shall use that term in this judgment.) It was collected by a UPS driver from Datec's warehouse on 25 July 2002 for delivery in Schipol by 10.30am on 26 July 2002.
The claimants' case is that the goods never arrived at L&A, and they claim damages in breach of contract, bailment and tort. They contend that the carriage of the goods from Cologne to L&A's premises was subject to the Convention on the Contract for the International Carriage of Goods by Road, the schedule to the Carriage of Goods by Road Act, 1965 ("CMR"), and that UPS are liable under it. Article 17.1 of the CMR provides,
"The carrier shall be liable for the total or partial loss of the goods and for damage occurring between the time when he takes over the goods and the time of delivery, as well as for any delay in delivery."
The claim is for the value of the goods, which is agreed, for the purposes of this litigation, to be £241,241.14, their invoice value of US$377,856 converted at an agreed rate of exchange.
3. The CMR provides, by article 23, for a limit upon the compensation for which a carrier is liable by reference to the weight of the consignment, and in this case the limit, if applicable, would be £657.73. However article 29 of the CMR provides as follows:
1. The carrier shall not be entitled to avail himself of the provisions of this chapter [which includes article 23] which exclude or limit his liability… if the damage was caused by his wilful misconduct or by such default on his part as, in accordance with the law of the court or tribunal seized of the case, is considered as equivalent to wilful misconduct.
2. The same provision shall apply if the wilful misconduct was committed by the agents or servants of the carrier or by any other persons of whose services he makes use for the performance of the carriage, when such agents, servants or other persons are acting within the scope of their employment. …"
The claimants contend that, the goods being stolen by an employee (or employees) of UPS, the loss was caused by wilful misconduct on the part of the servants of UPS acting within the scope of their employment, and therefore their claim is not limited by the provisions of Article 23.
4. UPS dispute that they are liable for the loss at all, not accepting that they failed to deliver the consignment to L&A and relying upon their standard terms and conditions (the "UPS terms"), and they also maintain that if they are liable at all, their liability is limited by article 23. Thus the issues between the parties are about (i) the arrangements under which the goods were carried and whether they defeat the claim, and (ii) whether the goods were delivered to L&A, and if not whether the goods were stolen by an employee (or employees) of UPS acting in the course of his (or their) employment.
The allegation against Mr Kadim
In their particulars of claim, the claimants plead that:
"Soon after the 26 July 2002, the Defendants' security officer, Arjan van Beusekom, reported the loss of the goods to the Police in the Netherlands as suspected theft by Mr Mouloud Kadim (a truck driver employed by the Defendants to whom the task of taking the goods from the Defendants' premises in Amsterdam to L&A Freight BV at Schipol was given) in the course of his employment. In a statement given by Mr van Beusekom on behalf of the Defendants to the Police it was stated, among other things, that, 'the person reporting the fact on behalf of UPS declares that … on Friday 26 July 2002 at 07.30 [am] at the [hub] the suspect committed the aforementioned embezzlement… UPS suffered damages by this embezzlement.'"
The claimants go on to plead that UPS's employees have "stolen and/or converted to their own use and/or wrongfully interfered with the Claimants' goods…". In his written opening Mr Matthew Reeve, who represented the claimants, made it clear that their case remained that on the balance of probabilities the goods were stolen by UPS's employees, and specifically referred to Mr Kadim.
Mr Kadim did not give evidence, although there is evidence about what he said to UPS on 26 July 2002 after finishing work and about what he later told the police. I was told that he had not been given notice before the trial that these allegations were being made against him. I was concerned about this for the reasons explained by Ackner J in Rustenburg Platinum Mines Ltd v South African Airways, [1977] 1 Lloyd's Rep 564 at p.570. At my suggestion and without the parties objecting, I asked Clyde & Co, the claimants' solicitors, to notify Mr Kadim by letter of the substance of the allegation against him in order to give him the opportunity to make any representations that he saw fit. A letter was sent, but returned undelivered, apparently because Mr. Kadim is no longer at his last address that is known to the parties. In view of the conclusions that I have reached, there was no need to take further steps to communicate with Mr. Kadim.
The Issue about the Delivery of the Goods
As for the issue about whether the consignment reached L&A, the claimants pleaded in their Particulars of Claim that "The goods were not delivered by the Defendants, on 26 July 2002 or at all and were lost", and this was admitted by UPS in their Particulars of Defence, which was served on 26 August 2003. However, UPS's evidence challenged the case that the goods were not delivered to L&A, in particular by a witness statement dated 28 May 2004 of Mr Arjan van Beusekom, their Security Investigator who investigated the loss. Furthermore, on 15 October 2004 Morison J permitted the parties each to call an expert witness about the most likely cause of the loss, and experts instructed by both parties, without referring to the admission pleaded by UPS, expressed views about how likely it was that the packages were delivered to L&A. At the start of the trial, therefore, I asked whether this was in issue between the parties, and Mr Charles Priday, who appeared for UPS, made it clear that despite the pleaded defence his clients did dispute the allegation of non-delivery. Shortly before the court sat on 17 November 2004, the second day of the trial, UPS delivered to the claimants a draft amended pleading withdrawing the admission (and making other amendments which in the end proved to be uncontroversial). On the third day of the trial, after the evidence of fact was concluded but before the expert witnesses were called, Mr Reeve told me that the claimants would not resist an application for permission to withdraw the admission, and, although after the expert evidence was concluded and before closing submissions Mr Reeve temporarily resiled from that position, in the end the claimants did not oppose the application and I allowed it. It was agreed that in these circumstances I should receive in evidence two further witness statements directed, at least principally, to whether the consignment was delivered: the claimants adduced a second statement of a Mr Harry Appelman, a director of L&A, whose first statement was already in evidence under the Civil Evidence Act; and UPS put in a further statement from Mr van Beusekom, who had already given oral evidence for them. Like Mr Appelman, he was not cross-examined on this further statement.
Disclosure
From time to time during the trial Mr Reeve complained about UPS's disclosure. However, no application for further disclosure was made, and when I permitted the amendment of UPS's pleadings, he expressly told me that the claimants did not apply for further disclosure. Despite the dearth of relevant documentation on some questions, I see no reason to suppose that UPS were improperly obstructive in making disclosure or that any further disclosed documents would have significantly affected my findings and conclusions.
The witnesses
The claimants called two witnesses of fact to give oral evidence: Mr Paresh Tailor, who gave evidence about whether the defendants could rely upon the UPS terms; and Mr John Worrall, an investigator whom the insurers of the goods instructed in July 2002 to investigate the loss, and who had concluded that it was most likely that Mr Kadim had stolen the...
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