Gillespie Bros. & Company Ltd v Roy Bowles Transport Ltd

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeTHE MASTER OF THE ROLLS,LORD JUSTICE BUCKLEY,LORD JUSTICE ORR
Judgment Date24 Oct 1972
Judgment citation (vLex)[1972] EWCA Civ J1024-1

[1972] EWCA Civ J1024-1

In The Supreme Court of Judicature

Court of Appeal

Before:

The Master of The Rolls (Lord Denning),

Lord Justice Buckley

and

Lord Justice Orr.

Between
Gillespie Bros. & Company Limited
Plaintiffs
and
Ray Bowles Transport Limited
Defendants Appellants
and
Rennie Hogg Limited
Third party Respondents

Mr. RAYMOND KIDWELL, W.C., and Mr. NORMAN IRVINE (instructed by Messrs. Herbert Smith & Co.) appeared on behalf of the Appellant Defen dants.

Mr. R.S. ALEXANDER (Instructed by Messrs. Richards Butler & Co.) appeared on behalf of the Respondent Third Party.

The plaintiffs did not appear and were not represented.

THE MASTER OF THE ROLLS
1

On 7th March, 1969, a small parcel containing three gold watches was stolen at London Airport, at Heathrow. Who is to bear the loss? It may fall on one or other of three persons. Either (a) the owners of the watches; or (b) the forwarding agents; or (c) the carriers. I will describe them in turn.

2

(a) The owners of the watches were Gillespie Brothers, who carry on business in the City of London. They ordered the watches from Swiss manufacturers. The watches were for resale to buyers in Jamaica. The parcel containing the watches was sent by air from Basle to London Airport. It was to be sent on to Jamaica. It arrived at Heathrow on 26th February, 1969. It was placed in the Customs warehouse in bond. Customs duty would not be payable provided that a trans-shipment bon was given to the Customs. (b) The forwarding agents were. Ronnie Hogg Ltd. as soon as the parcel arrived at Heathrow, the owners, Gillespie Brothers, asked the forwarding agents, Rennis Hogg Ltd., to arrange for the transshipment and to put the parcel on the first flight to Jamaica. On 6th March 1969, the forwarding agents gave to the Customs authorities a trans-shipment bond in their own name. They filled in a trans-shipment shipping bill. They named themselves as exporters and also as the firm convoying the goods to the export flight. The Customs passed it as sufficient. They taped and sealed the parcel ready for collection. It was the duty of the forwarding agents to collect the parcel from the bonded warehouse and take it to their office, which was only a mile away: and thence to take it to the export shed for the flight to Jamaica.

3

(c) The carriers were Roy Bowles Transport Ltd. The forwarding agents did not have their own vans and drivers. They hired them from the carriers, Roy Bowles Transport Ltd. This particular van anddriver was hired on a monthly basis. During the period of hire it was exclusively at the disposal of the forwarding agents. On the morning of 7th March, 1969, the driver drove the van to the import shed of the bonded warehouse. He went to an office and got from a pigeon-hole the Jennie Hogg papers; that is, the cleared papers relating to the various goods being dealt with by Rennie Hogg. Amongst them were the papers for the parcel of three watches. The parcel was of such high value that it was in a security cage. The warehousemen got it out and handed it to the driver. He put the parcel in the back of his van and covered it up. He went back to sign the book. He signed it, came back, closed the van and drove to the office of the forwarding agents, Jennie Hogg, a mile away, when he got there, he looked for the parcel and found it was missing. It had been stolen whilst he was signing the book.

4

The Judge held that the driver had been at fault. He ought to have locked up the van before going back to sign. Although the driver was engaged in work for the forwarding agents, nevertheless the driver remained the servant of the carriers, see Mersey Docks v. Coggins (1947) A.C. 1. It was the carriers who, by their servant, had taken the parcel into their charge, and they were under a duty to take reasonable care of it - see Morris v. Martin (1966) 1 Q.B. 766 at page 728. There were two contracts underlying those transactions:

5

I. The contract between the goods owner and the forwarding agents.

6

First, there was the contract between the owner of the goods and the forwarding agents. It was made by correspondence on 27th February 1969. The owners asked the forwarding agents to arrange the transhipment

7

The position of a forwarding agent was described by Mr. JusticeRowlett in Jones v. European Estates Co. (1920) 25 Commercial Cases 296, applied by this Court in Marston Excelsior v. Arbuckle Smith & Co. 1971 Lloyds Rep. 306. They usually act as agents for the owners of the goods in arranging transport. But in this case there was one activity which they conducted as principals. They themselves were, by the usage of the trade, responsible for the transshipment of the goods from the customs warehouse to their office, and thence to the export shod for Jamaica. They employed the carriers, Roy Bowles, as sub-contractors to execute this activity.

8

The correspondence shows that the forwarding agents, in their contract with the goods owners, made this stipulation: "All goods carried or business undertaken is subject to the standard Terms and Conditions of the Institute of Shining and Forwarding Agents obtainable on application". Among those conditions were conditions to the effect that all goods were carried subject to the conditions. stipulated by carriers into whose possession or custody the goods may pass that the forwarding agents were not liable for loss, or damage to goods unless it happened whilst the goods were in their actual custody: and that in no case should the liability of the Company exceed a sum of £50 per ton. In view of those conditions, the goods owner did not sue the forwarding agents. They preferred to sue the carriers in tort - having a precedent in Lee Cooker v. C.H. Jenkins (1967) 2 Q.B.1.

9

II. THE CONTRACT BETWEEN THE FORWARDING AGENTS AND THE CARRIER

10

There was the contract between the forwarding agents and the carriers. This was made by a telephone conversation on 8th August 1968. The forwarding agents hired a three-ton van, with a driver, from the carriers on a month-to-month basis. The forwarding agentsused this van and driver much as if it was their own, telling him where to go, what to collect, and so forth. It was in pursuance of this contract that the driver of the van collected the parcel in this case. The correspondence shows that the carriers made their contract with the forwarding. agents "subject to the conditions of the Road Haulage Association". They sent copies of this to the forwarding agents from time to time.

11

Under the conditions of the Road haulage Association, the carriers are liable for loss or damage to goods in terms equivalent to the liability of a common carrier.

12

Condition 11 says:

"Subject to these Conditions the Carrier shall be liable for any loss, or misdelivery of or damage to goods occasioned during transit unless the Carrier shall prove that such loss, misdelivery or damage has arisen from:".

13

There follow in (a) to (j) several exceptions, such as, Act of God; act of foreign enemy; act or omission of Consignor; inherent vice; insufficient packing, nearly all or which are defences available to a common carrier.

14

But the Conditions go on to stipulate for a Limitation of Liability. Condition 12 says:

"Subject to these Conditions, the liability of the Carrier in respect of any one consignment shall in any case be limited:-

15

(i) Where the loss or damage however sustained is in respect of the whole of the consignment to a sum at the rate of £800 per ton…………

16

Provided that:

17

(a) nothing in these clause shall limit the Carrier's liability below the, sum of £10 in respect of any one consignment".

18

III. CAN THE LIMITATION AS AVOIDED?

19

If the carrier were sued by the customer who contracted with him, he would, no doubt, rely on the limitation: but in this casehe is sued, not by the contracting party but by the owner of the goods. As against the owner, the carrier has difficulty in setting up the limitation, because of Midland Silicones Ltd. v. Scruttons, 1962 A.C. 446. That case proceeds on the broad proposition that, on a contract of carriage, the conditions only apply as between the two parties to the contract. If an injured person can frame an action in tort - not between those two parties -the conditions, it is said, do not apply. That proposition is fair enough when it is a contract for the carriage of passengers - who do not usually insure their own safety by land or sea. But it has been the source of much trouble when applied to the carriage of goods. It has been the common practice of carriers - by land, sea or air - to make conditions limiting their liability to specific sums: and to leave the goods owner to insure if he wants greater cover. Carriers base their charges - and the insurers calculate their premiums - on the footing that the limitation is valid and effective between all concerned. The law should support this course of trade and uphold the limitation. But it has not done so. The effectiveness of the conditions was seriously undermined by Eidland Silicones v. Scruttons so in consequence many efforts have been made to get round the decision. One way is by inserting a clause expressly to protect persons who nanale the goods (such as stevedores) saying that the carrier is their agent, Such a clause was held effective by the Courts of New Zealand in Satterthwaito v. New Zealand Shipping Co. 1971 2 Lloyds 399. Another way is by holding that the owner of the goods (if he is not a party to the contract) is bound by the conditions if he impliedly consented to them as being in the usual form - see Morris v. Martin (1966) 1 Q.B. at pages 729/730. Yet another way is by way of an international Convention, which is made law byStatute. Thus, in the Carriage of Goods by Sea Act 1971, it is provided (Article III Bis.)

20

"The defences and limits of liability provided in these rules shall apply in any action against the carrier...

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