Datec Electronic Holdings Ltd v United Parcels Service Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Justice Richards,Lord Justice Sedley,Lord Justice Brooke |
| Judgment Date | 29 November 2005 |
| Neutral Citation | [2005] EWCA Civ 1418 |
| Docket Number | Case No: A3/2005/0597 |
| Court | Court of Appeal (Civil Division) |
| Date | 29 November 2005 |
[2005] EWCA Civ 1418
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 Andrew Smith
Lord Justice Brooke
Vice-President, Court of Appeal (Civil Division)
Lord Justice Sedley and
Lord Justice Richards
Case No: A3/2005/0597
A3/2005/0604
Matthew Reeve (instructed by Clyde & Co) for the Appellants
Julian Flaux QC and Charles Priday (instructed by Barlow Lyde & Gilbert) for the Respondent
This case concerns the loss of three packages of computer processors that were consigned to United Parcels Service Limited ("UPS") on 25 July 2002 for carriage from the United Kingdom to the Netherlands. The consignor was Datec Electronic Holdings Limited ("Datec") and the consignee was Incoparts BV ("Incoparts"), one of Datec's customers. Carriage was arranged by Tibbett and Britten Ltd. ("T&B"), Datec's distribution agents. The consignment was to be carried by road from Datec's warehouse at Bletchley to Luton, by air from Luton to Cologne, and by road from Cologne to UPS's premises in Amsterdam (referred to as UPS's "hub") and onward to the warehouse at Schipol of Incoparts' agent, L&A Freight BV ("L&A"). It was collected by a UPS driver from Datec's warehouse on 25 July for delivery in Schipol by 10.30 a.m. on 26 July. Datec and Incoparts alleged that it did not reach its destination, and they brought a claim for damages against UPS as carrier.
The claimants contended that carriage of the goods on the international leg of the journey between Cologne and the Netherlands was subject to the Convention on the Contract for the International Carriage of Goods by Road ("the CMR"), as set out in the schedule to the Carriage of Goods by Road Act 1965. Article 17.1 of the CMR provides for the liability of the carrier for the loss of, or damage to, the goods. Article 23 sets a limit on compensation by reference to the weight of the consignment. By article 29, however, that limit does not apply in a case of wilful misconduct by the carrier's agents or servants acting within the scope of their employment.
In this case the limit on compensation if article 23 applied was £657.73. The claimants contended, however, that the loss had been caused by wilful misconduct on the part of UPS's servants, in that the packages had been stolen by an employee or employees of UPS, so that the article 23 limit was disapplied by article 29. On that basis they sought to recover the full value of the goods, which was agreed to be £241,241.14.
UPS disputed liability altogether. It did not accept that it had failed to deliver the consignment to L&A. It also relied on its terms and conditions of carriage for a series of arguments to the effect that there was no contract of carriage falling within the CMR at all or, if there was, it was on terms that excluded any liability in the circumstances of this case. Those matters were said to provide a complete defence to the claim.
In a commendably clear and detailed judgment, Andrew Smith J found that the three packages had not been delivered to L&A but that the claimants had failed to prove that non-delivery was the result of theft by an employee or employees of UPS. Accordingly he held that the compensation recoverable under the CMR was subject to the limit in article 23. He rejected UPS's contention that the CMR did not apply at all and held that UPS could not rely on the relevant provisions of its terms and conditions of carriage since they derogated from the CMR and were rendered null and void by article 41 of the CMR. In the result he gave judgment in favour of the claimants in the sum of £657.73.
The claimants appeal against the judge's finding that the compensation was subject to the limit in article 23. UPS cross-appeals against the judge's rejection of the defences advanced by reference to UPS's terms and conditions of carriage.
I think it sensible to deal first with the issues raised by UPS's cross-appeal since they go to the question whether UPS is liable at all. If the cross-appeal fails, it will be necessary to consider the extent of UPS's liability as raised by the claimants' appeal.
UPS'S CROSS-APPEAL: DEFENCES TO LIABILITY
The applicability of UPS's terms
UPS's case on its cross-appeal is based on the UPS terms and conditions of carriage which came into effect on 4 February 2002 ("the UPS terms"). As explained below, the UPS terms include a restriction in respect of packages with an individual value in excess of US $50,000. Each of the three packages that made up the 25 July 2002 consignment had a value considerably in excess of that sum. UPS contends that in those circumstances the UPS terms provide it with a defence.
The UPS terms provide, in material part:
"1. Introduction
A. These terms and conditions ('terms') set out the basis on which United Parcel Service will transport packages, letters and freight ('packages'). These terms are supplemented by the service details in the current applicable UPS Service and Tariff Guide ('the Service and Tariff Guide') relating to the particular service the shipper has chosen. The Service and Tariff Guide contains important details about the services of UPS which the shipper should read and which form part of the agreement between UPS and the shipper.
B. … Notwithstanding any clause to the contrary, international carriage by road may be subject to the provisions of the Convention on the Contract for the International Carriage of Goods by Road ….
…
D. … In these terms, 'Waybill' shall mean a single UPS waybill/consignment note or the entries recorded against the same date, address and service level on a pick-up record ….
2. Scope of Service
Unless any special services are agreed, the service to be provided by UPS is limited to the pick-up, transportation, customs clearance where applicable and delivery of the shipment ….
3. Conditions of Carriage
This section sets out various restrictions and conditions which limit and govern the extent of the service UPS offers. It also explains what the consequences are of the shipper presenting packages for carriage which do not meet these requirements.
(a) Service Restrictions and Conditions
UPS does not offer carriage of packages which do not comply with the restrictions in paragraphs (i) to (iv) below.
(i) Packages must not weigh more than 70 kilograms (or 150lbs) or exceed 270 centimetres (or 108 inches) in length or a total of 330 centimetres (or 130 inches) in length and girth combined.
(ii) The value of any package may not exceed the local currency equivalent of USD 50,000. In addition the value of any jewellery, other than costume jewellery, in a package shall not exceed the local currency equivalent of USD 500.
(iii) Packages must not contain any of the prohibited articles listed in the Service and Tariff Guide including (but not limited to) articles of unusual value (such as works of art, antiques, precious stones, stamps, unique items, gold or silver), money or negotiable instruments (such as cheques, bills of exchange, bonds, savings books, share certificates or other securities) and dangerous goods.
(iv) Packages must not contain goods which might endanger human or animal life or any means of transportation, or which might otherwise taint or damage other goods being transported by UPS, or the carriage, export or import of which is prohibited by applicable law.
The shipper shall be responsible for the accuracy and completeness of the particulars inserted in the Waybill and for ensuring that all packages set out adequate contact details for the shipper and receiver of the package and that they are so packed, marked and labelled, their contents so described and classified and are accompanied by such documentation as may (in each case) be necessary to make them suitable for transportation and to comply with the requirements of the Service and Tariff guide and applicable law.
(b) Perishable and temperature sensitive goods will be transported provided that the shipper accepts that this is at its risk. UPS does not provide special handling for such packages.
(c) Refusal and Suspension of Carriage
(i) If it comes to the attention of UPS that any package does not meet any of the above restrictions or conditions or that any COD amount stated on a COD Waybill exceeds the limits specified in paragraph 8, UPS may refuse to transport the relevant package (or any shipment of which it is a part) and, if carriage is in progress, UPS may suspend carriage and hold the package or shipment to the shipper's order.
(ii) UPS may also suspend carriage if it cannot effect delivery at the third attempt, if the receiver refuses to accept delivery, if it is unable to effect delivery because of an incorrect address (having used all reasonable means to find the correct address) or because the correct address is found to be in another country from the set out on the package or Waybill or if it cannot collect amounts due from the receiver on delivery.
(iii) Where UPS is entitled to suspend carriage of a package or shipment, it is also entitled to return it to the shipper at its own discretion.
(d) The shipper will be responsible for the reasonable costs and expenses of UPS (including storage), for such losses, taxes and customs duties as UPS may suffer and for all claims made against UPS because a package does not meet any of the restrictions or conditions in paragraph (a) above or because of any refusal or suspension of carriage or...
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