Evans (J.) & Son (Portsmouth) Ltd v Andrea Merzario Ltd (Ruhr)

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeTHE MASTER OF THE ROLLS,LORD JUSTICE ROSKILL,LORD JUSTICE GEOFFREY LANE
Judgment Date13 Nov 1975
Judgment citation (vLex)[1975] EWCA Civ J1113-7

[1975] EWCA Civ J1113-7

In The Supreme Court of Judicature

Court of Appeal

Appeal by Plaintiffs from judgment of Mr. Justice Kerr on 23rd October 1974.

Before:

The Master Of The Rolls (Lord Denning)

Lord Justice Roskill and

Lord Justice Geoffrey Lane

J. Evans & Son (Portsmouth) Limited
Plaintiffs
Appellants
and
and
Andrea Merzario Limited
Defendants
Respondents

MR. ROGER BUCKLEY (instructed by Messrs. Clyde & Co.) appeared on behalf of the Appellant Plaintiffs.

Mr. ANTHONY HALLGARTEN (instructed by Messrs. Crawley and de Reya) appeared on behalf of the Respondent Defendants.

THE MASTER OF THE ROLLS
1

We need not trouble you, Mr. Buckley.

2

Strangely enough, this is the first case we have had in this Court about container traffic. The motor vessel "The Ruhr" was not purpose built for containers. It was built as a merchant ship but it had been converted so as to carry containers. On 3rd November 1968 The Huhr was going from Rotterdam to Tilbury. 20 containers were under the deck. 8 containers were on deck. She met with a slight swell. Two containers fell off and went to the bottom of the water. One of them contained a special injection moulding machine of about £3,000 in value. It was completely lost.

3

No claim lies against the shipowners. They had issued a bill of lading which said "Shipped on deck at shippers risk".

4

The claim we have to consider is by the English importers against the forwarding agents. They claim that the containers ought not to have been carried on deck.

5

The importers were Evans of Portsmouth. They had bought the machines from an Italian manufacturer in Milan. The English importers employed forwarding agents to make all the transport arrangements. The forwarding agents were a company Andrea Merzario Ltd. They have an associated company in Holland and also their parent company in Italy. These forwarding agents made arrangements under which the goods were carried by rail from Milan to Rotterdam, then by ship for Tilbury, unloaded at Tilbury and carried to the destination in England. The forwarding agents had for some years previously arranged for these machines to be imported, but they had been packed in crates and not in containers. The forwarding agents had always arranged that these machines so packed in crates should be carried under deck: because they were liable to rust if carried on deck. When it was proposed to change over to packing them in containers, the forwarding agents talked to the English importers about it. Their manager, Mr. Spano, who wasvisiting Portsmouth, saw Mr. Leonard of the importers. He said that they proposed to use containers in future. Mr. Leonard said: "I have heard about these containers. I am afraid that our machines may get rusty if they are carried on deck. They must act be carried on deck." Mr. Spano assured Mr. Leonard "If we do use containers, they will not be carried on deck." The Judge accepted that that assurance was given. He said "Mr. Leonard was assured by Mr. Spano that in so far as the goods were subsequently to be transported in containers, they would be carried under deck in the case may as all goods transported by the defendants." On getting that assurance, Mr. Leonard was content. The forwarding agents gave a quotation for the new charges for carrying in containers. The English importers accepted it. The containers went forward on that basis. Invoices were sent and goods carried on the usual terms and conditions appearing on the form. Nothing was put in writing about being carried under deck.

6

Unfortunately there was some mistake made somewhere during the forwarding of this consignment from Italy to England. The Dutch company failed to ensure that the containers which contained these machines were loaded under deck at Rotterdam. They allowed them to be shipped on deck and accepted a bill of lading which contained the excepting clause "Shipped on deck at shippers risk".

7

So, after these containers fell off the deck into the water, the English importers, through their insurers, claimed damages against the forwarding agents. In reply the forwarding agent said there was no contractual promise that the goods would be carried under deck. Alternatively, if therewas, they relied on the printed terms and conditions. The Judge held there was no contractual promise that these containers should be carried under deck. He thought that, in order to be binding, the initial conversation oughtto be contemporaneous; and that here it was too reacts in point of time from the actual transport. Furthermore, that, viewed objectively, it should not be considered binding. The Judge quoted largely from the well-known case of Hailbai Symons & Co. v. Buckleton 1913 A.C. 30, in which it was held that a person is not liable in damages for an innocent misrepresentation; and that the Courts should be slow to hold that there was a collateral contract. I must say that much of what was said in that case is entirely out of date. We have now the Misrepresentation Act 1967 under which damages can be obtained for innocent misrepresentation of fact. This Act does not apply here because we are concerned here with an assurance as to the future. But even in respect of promises is as to the future, we have a different approach nowadays to collateral contracts. When a person gives a promise, or an assurance to another, intending that he should act off it by entering into a contract, and he does act on it by entering into the contract, we hold that it is binding. See Dick Bentley v. Harold Smith Motors (1965) 1 W. L. R. 623. That case was concerned with a representation of fact, but it applies also to promises as to the future. Following this approach, it seems to me plain that Mr. Spanc gave an oral promise or assurance that the goods in this new container traffic would be carried under deck. He made the promise in order to induce Mr. Leonard to agree to the goods being carried in containers. On the faith of it, Mr. Leonard accepted the quotations and gave orders for transport. In those circumstances the promise was binding. There was a breach of that promise and the defendants are liable - unless they can rely on the printed conditions.

8

It is common ground that the course of dealing was on the standard conditions of the forwarding trade. Those conditions wererelied upon: Condition which gives the company complete freedom in respect of means, route and procedure in the transportation of goods. Condition 11 which says that the company will not be liable for loss or damage unless it occurs whilst in their actual custody and then only if they are guilty of wilful neglect or default. Condition 13 which says that their liability shall not exceed the value of the goods or a sum at the rate of £50 per ton of 20 cwt. The question is whether the company can rely on those exemptions. I do not think so. The cases are numerous in which oral promises have been held binding in spite of written exempting conditions: such as Couchman v. Hill 1947 1 K. B. 554; Harlink v. Eddy 1951 2 K. B. 739; City and Westminster Properties (1934) Ltd. v. Mudd 1959 Ch. 129. The most recent is Mendelssohn v. Normand 1970 1 Q. B. 177. where I said: "The printed condition is rejected because it is repugnant to the express oral promise or representation." During the argument Lord Justice Roskill put the case of the Hague Rules. If a carrier made a promise that goods would be shipped under deck, and, contar to that promise, they were carried on deck and there was a loss, the carrier could not rely on the limitation clause. Following these authorities, it seems to me that the forwarding agents cannot rely on the conditions. There was a plain breach of the oral promise by the defendants. I would allow the appeal.

LORD JUSTICE ROSKILL
9

I agree that this appeal should be allowed for the reasons which my Lord has given. I venture to add to those reasons out of respect for Mr. Justice Kerr, from whom in a matter of this kind I differ with hesitation. But this case has been put before us rather differently from the way it was put before the learned Judge, though, as Mr. Buckley said a moment ago, the point on which he succeeds was in fact...

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1 books & journal articles
  • Bridging the Gap: A Relational Approach to Contract Theory
    • United Kingdom
    • Journal of Law and Society Nbr. 41-4, December 2014
    • 1 December 2014
    ...H. Collins, Regulating Contracts (1999) 147, cited by Mitchell at p. 243.23 J Evans & Son (Portsmouth) Ltd v. Andrea Merzario Ltd [1976] 1 W.L.R. 1078(written document was not intended as a complete record of the agreement). Earliercases had sometimes taken the same approach, see Jacobs......

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