Geofizika DD & MMb International Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 10 July 2009 |
| Neutral Citation | [2009] EWHC 1675 (Comm) |
| Docket Number | Case No. 2008 Folio 294 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 10 July 2009 |
[2009] EWHC 1675 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
LONDON MERCANTILE COURT
His Honour Judge Mackie Qc,
(Sitting as a Judge of the High Court)
Case No. 2008 Folio 294
Mr Timothy Wormington (instructed by Keates Ferris) appeared for the Claimant
Mr John Russell (instructed by Hill Dickinson LLP) appeared for the Defendant
Ms Saira Paruk (instructed by Barlow Lyde & Gilbert) appeared for the Third Party
The Claimant buyer claims damages for breach of a “CIP” contract. The Defendant seller denies the breach and the amount of the alleged damage and asserts that if there is a liability it is the responsibility of the Part 20 Defendant, a freight forwarder.
The Claimant (“Geofizika”) is a Croatian company involved in geophysical and seismic work in the oil and gas industry. Geofizika had a need for three four-wheel drive ambulances to use at two camps in Libya where it was doing seismic work. The Defendant (“MMB”) is a company based in Macclesfield which specialises in manufacturing customised special vehicles mainly ambulances and mobile clinics. MMB has a substantial export trade. The Part 20 Defendant (“GSC”) is a long-established freight forwarder based in Sutton, Surrey.
This action has been hard, ably and fairly fought by all three parties who have raised a wide range of points at a cost which must have dwarfed the comparatively small sums in issue. There were originally two actions, one in this court and one in Manchester. At different times MMB applied unsuccessfully to strike out Geofizika's claim and GSC that of MMB. At the trial on 18 and 19 May 2009 I had, in addition to the bundles produced by the parties, the assistance of live evidence from Mr Ivica Milardovic, Head of Logistics at Geofizika and from Mr Keith Knox, Managing Director, and Ms Kellyjo Tapsell, Shipping and Logistics Manager, of GSC. Ms Mary O'Toole of MMB gave a witness statement but was not called as nothing she said was disputed by the other parties. All three witnesses were honest and truthful in what they said and the only dispute was a minor one about the recollection of Ms Tapsell.
Facts agreed or not much in dispute
In early October 2006 Geofizika agreed to buy from MMB three four-wheel drive Land Rover ambulances for delivery to Libya. After a slight hold-up the contract was made for a total price of £74,952 “CIP Tripoli” on the terms set out in three MMB invoices and Geofizika's purchase order on 10 and 11 October. The quotation which Geofizika accepted was subject amongst other things to “INCO TERMS 2000” and “BIFA trading terms 2006”. MMB approached GSC for a carriage and insurance quotation on 5 October 2006, in order to price the job. This quotation ticked the boxes “sea freight” and “CFR” and, of the options under “Sea”, “RORO”. GSC obtained a quote from Brointermed Lines Limited (“Brointermed”), a line which it had not used before, details of which it obtained from Lloyds' List. They obtained a second quote from their usual carrier Tuscor Lloyd but this was approximately 75% higher. The advertisement for Brointermed offered, amongst other things, “RORO service to Libya”. At that point GSC did not look at the vessels pictured on the Brointermed website, photographs of which indicate that they would be unlikely to provide a RORO service and that vehicles were, at least sometimes, strapped to other cargo carried on deck.
The matter was dealt with at GSC by Ms Phelan, Ms Tapsell and Mr Reynolds who between them took matters forward so that on 14 November Brointermed sent a booking confirmation with an ETS of 30 November. The confirmation recorded that vehicles were shipped in line with a series of Libyan regulations which were set out. It also stated:—
“ALL VEHICLES WILL BE SHIPPED WITH “ON DECK OPTION” this will be remarked on your original bills of lading …”.
“You will be asked to check and confirm that bills of lading are as per your instructions. Any amendments required after initial confirmation will result in additional charges.”
Communications from GSC were mainly concerned with questions of price. GSC were sent draft bills of lading on 28 and 29 November but these contained only the usual details of shippers, destination and so on. GSC had not dealt with Brointermed before but it did not see or seek copies of the printed terms to go on the back of the bills. Brointermed sent unsigned originals which GSC returned on 29 November. The Brointermed invoice of that date states “RORO cargo”. The bills when they arrived contained, amongst other entries in type, the following, which is relied upon by GSC “CARGO STORED ON OPEN AREA ON THE QUAY AND, THEREFORE, SUBJECT TO ADVERSE WEATHER CONDITIONS BEFORE LOADING”. On the back of the bill were the Standard Conditions of Carriage, clause 7 of which reads as follows:—
“7. Unitization, Optional Stowage
(1) Goods may be stowed by the Carrier in containers.
(2) Goods, whether or not packed in containers, may be carried on deck or under deck without notice to the Merchant. All such goods (other than live animals) whether carried on deck or under deck, shall participate in general average and shall be deemed to be within the definition of goods for the purpose of the Hague Rules and shall be carried subject to these rules.
Notwithstanding the foregoing in the case of goods which are stated on the face hereof as being carried on deck and which are so carried, the Hague Rules shall not apply and the Carrier shall be under no liability whatsoever for loss, damage or delay, howsoever arising.”
On 4 December GSC sent the usual documents to MMB which included an insurance certificate dated 29 November and an invoice for that cover dated 4 December. This reflected the fact that cover began on 29 November but insurance was not issued until 4 December by GSC under the terms of its long-established arrangement with Royal & Sun Alliance. The certificate has one “Additional condition” which is “Warranted shipped under deck”. Meanwhile the vessel had sailed, apparently on 29 November, and was due to reach Libya on about 16 December. The vehicles were stored on deck and, it seems, washed overboard during the turbulence of winter in the Bay of Biscay. It seems likely that the vehicles had been strapped to the top of the containers as shown in the photographs on its website. As Ms Paruk for GSC correctly points out however there is no clear evidence of what happened. It does not seem that anyone at GSC, in particular the insurance manager Mr Brandaw, did anything to check the accuracy of the warranty that the vehicles were shipped under deck before it was accepted. If Ms Tapsell of GSC had appreciated that the vehicles were being carried on deck she would have arranged, as the Royal & Sun Alliance facility apparently permitted, for additional but retrospective cover at an additional cost of about 50% of the premium. GSC would probably then have 'swallowed' that cost in the interest of customer relations.
The insured value of the two lost vehicles was £57,890. Geofizika hired alternative vehicles for a period up to 9 November 2007 at a cost of approximately £90,000. This came about because Geofizika, a Croatian company emerging from that country's troubled past, could not afford the cost of replacement and the revenue from its Libya contract was not in a convertible currency. No similar vehicles were available to buy in Libya so Geofizika was compelled to continue to hire until it was in a position to purchase new vehicles in 2008. Unsurprisingly, given their experiences in this saga, Geofizika switched to Toyota.
Geofizika pursued Brointermed and threatened proceedings in Libya and the prospect of Brointermed not being protected by the limits on liability imposed by the Hague Rules. Geofizika settled with Brointermed for £50,000 in September 2007 and incurred associated legal costs initially put at £24,600 but now the subject of controversy.
GSC contends that the shipment was arranged on the basis that this was a RORO cargo. GSC relies upon the booking confirmation and invoice which I have mentioned but also on what is inaccurately described as a “telephone attendance note” by Ms Tapsell. It transpired that this note was prepared by Ms Tapsell, some time after the loss coming to light, perhaps on 17 January 2007 at the request of those who were going to be dealing with any claim. It seems to me that it should have no more nor less weight than a witness statement prepared shortly after the events in dispute. The relevant parts of the note state “phoned Brointermed to make booking as per quotation for 3 vehicles on service to Tripoli. This was on the understanding that on a RORO service and this was mentioned”. “Also spoke to Laura … Brointermed as to separate bills of lading and also loading … to vessel on RORO service”. There is no evidence from Brointermed, through no fault of GSC, no correspondence and nothing in the contemporaneous documents, beyond those I have already identified, to suggest that the question of RORO was given much attention. In evidence Ms Tapsell regarded the 'on deck option' as quite usual. She also assumed from her understanding that this was a RORO vessel that there would be no storage on deck.
GSC relies on this material in support of its claim that RORO necessarily means carriage under deck. GSC witnesses claim this. Ms O'Toole of MMB says “My understanding indeed was that RORO and on-deck carriage are completely exclusive concepts”. Mr Wormington for Geofizika disputes this suggesting that it is everyday experience that RORO vessels, such as ferries, have storage on deck and that nothing in the language of this expression leads to a different conclusion. There is no relevant expert evidence and as the various...
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