Lamport & Holt Lines Ltd v Coubro & Scrutton (M. & I.) Ltd (Raphael)
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE DONALDSON,LORD JUSTICE STEPHENSON |
| Judgment Date | 01 April 1982 |
| Judgment citation (vLex) | [1982] EWCA Civ J0401-2 |
| Docket Number | 82/0107 |
| Court | Court of Appeal (Civil Division) |
| Date | 01 April 1982 |
and
[1982] EWCA Civ J0401-2
Lord Justice Stephenson
Lord Justice Donaldson
and
Lord Justice May
(Not Present When Judgment Delivered)
82/0107
1977 L No. 3426
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 ROBERT GOFF)
Royal Courts of Justice
MR. MICHAEL BELOFF Q.C. and MR. CHARLES HOLLANDER (instructed by Messrs. Alsop, Stevens, Batesons & Co., Solicitors, Liverpool L2 ONH) appeared on behalf of the Plaintiffs (Appellants).
MR. RICHARD AIKENS (instructed by Messrs. Ince & Co., Solicitors, London EC3R 5EN) appeared on behalf of the Defendants (Respondents)
I ask Lord Justice Donaldson to read the first judgment.
This is an appeal by Lamport & Holt Lines, the well known shipowners, against a judgment of Mr. Justice Robert Goff given on 22nd May 1981, whereby he dismissed their claim against the second defendants, Coubro & Scrutton (Riggers and Shipwrights) Ltd. He had also dismissed the claim against the first defendants, but that decision is accepted.
The point is a very short one, turning upon the true construction of the second defendants' conditions of business. The facts are even shorter. In September 1979 the plaintiffs employed the second defendants to do work which, inter alia, involved stowing a derrick on board their m.v. "Raphael" in order to make her ready for sea. Whilst this was being done, the derrick fell on to a hatch cover doing very considerable damage. For the purposes of the appeal, it is to be assumed that this incident resulted from the negligence of employees of the second defendants.
The second defendants rely upon their business conditions, and in particular upon clause 2, those business conditions being in the following terms:—
"1. GENERAL
No prior representation made by us or variation of these terms shall be recognised by us unless it is agreed and confirmed by us in writing. The terms or conditions that may be written or printed on your enquiry/order shall not apply to us so far as such terms and conditions are at variance with the terms and conditions stated herein.
"2. LIABILITY
Except as stated herein (a) we shall not be liable for any damage loss injury costs or expenses suffered by you or your servants or agents and which may arise from or be in any way connected with any act or omission of any person or corporation employed by us or by any sub-contractors or engaged in any capacity in connection herewith and (b) you shall indemnify us against all loss damages claims and expenses whatsoever incurred by us in relation to or arising out of the performance of our obligations.
"3. GUARANTEE
If within a period of 3 months of our supplying or fitting new material, such material needs replacement or repair, either by reason of such material being faulty or on account of our workmanship, we will effect such replacement or repair at our option but our liability shall be limited to such replacement or repair and we will not be liable for any further expense. Such material must be returned at your expense to our works. We hereby expressly exclude any other liability for any form of accident, consequential loss or damage whatsoever and howsoever arising. Except as expressly set out herein, every condition warranty or representation whatsoever, whether statutory or otherwise, is excluded.
"4. DELIVERY
(a) We will make every effort to deliver by any date quoted but any such date is approximate only and no liability can be accepted by us for failure to meet such date. Delays and possibly price increases will occur if we do not receive promptly all drawings and information to carry out the work.
(b) Prices quoted by us do not include parking or delivery charges unless specifically mentioned.
(c) Goods delivered by our transport will be at your risk immediately unloading commences. Those not delivered by our transport will be at your risk from the time of delivery to the carrier.
"5. REPAIRS
All goods sent to us for repairs or processing are at all times at your risk.
"6. GOODS ON APPROVAL
Such goods will be considered to be sold unless returned carriage paid to our works within two weeks of delivery to you.
"7. SPECIFICATION
In order that we may where possible conform to the relevant British Standard or accepted engineering practice all our designs and specifications are subject to change without notice as are all technical information, catalogues and drawings published or supplied by us.
"8. FORCE MAJEURE
We shall under no circumstances be under any liability for delays or other failures or omission caused by or resulting from strikes lockouts or without prejudice to the generality of the foregoing any cause beyond our control. We shall be relieved of liability under the contract if and to the extent to which the fulfilment of any obligation is prevented or rendered impracticable as a direct or indirect consequence of war (including hostilities whether war has been declared or not) or of conforming to any statute or to any rules regulations orders or requisitions made by any Government Department or local or other competent authority and in such a case you shall pay for the work done or expenses incurred by us and the contract shall be at an end.
"9. CLAIMS OR COUNTERCLAIMS
A claim or counterclaim shall not be made the reason for you deferring or withholding payment of monies payable to us.
" 10. PRICE VARIATION
The charges and prices stated in our quotation are subject to variation without notice in accordance with any change thereafter in the market prices of materials to be supplied or in wage levels.
"11. PAYMENT TERMS
Net monthly account.
"12. LAW
Any contract arising herefrom shall be subject to English law".
The learned judge held that clause 2 of these conditions provided the second defendants with effective protection.
Mr. Beloff, for the plaintiffs, submits that the learned judge was in error because the first part of the clause is not sufficiently widely drawn to cover liability for negligence and the second part, containing the indemnity, must be confined to third party claims. Mr. Aikens, for the second defendants, does not rely upon the indemnity provisions and accordingly I need say no more about them as such, although they are part of the clause and have to be taken into account when construing the first part.
The starting point of the argument for both parties to the appeal is the opinion of the Judicial Committee of the Privy Council in Canada Steamship Lines v. The King, (1952) Appeal Cases, 192, which was delivered by Lord Morton of Henryton. At page 208 Lord Morton said:
"Their Lordships think that the duty of a court in approaching the consideration of such clauses may be summarised as follows:—
"(1) If the clause contains language which expressly exempts the person in whose favour it is made (hereafter called 'the proferens') from the consequence of the negligence of his own servants, effect must be given to that provision. (Any doubts which existed whether this was the law in the Province of Quebec were removed by the decision of the Supreme Court of Canada in The Glengoil Steamship Company v. Pilkington).
"(2) If there is no express reference to negligence, the court must consider whether the words used are wide enough, in their ordinary meaning, to cover negligence on the part of the servants of the proferens. If a doubt arises at this point, it must be resolved against the proferens (in accordance with article 1019 of the Civil Code of Lower Canada: 'In cases of doubt, the contract is interpreted against him who has stipulated and in favour of him who has contracted the obligation').
"(3) If the words used are wide enough for the above purpose, the court must then consider whether 'the head of damage may be based on some ground other than that of negligence', to quote again Lord Greene in the Alderslade case. The 'other ground' must not be so fanciful or remote that the proferens cannot be supposed to have desired protection against it; but subject to this qualification, which is no doubt to be implied from Lord Greene's words, the existence of a possible head of damage other than that of negligence is fatal to the proferens even if the words used are prima facie wide enough to cover negligence on the part of his servants".
Although the Judicial Committee was concerned with the law of Canada, Lord Morton's remarks are equally applicable to the law of England, and have indeed been applied by this court in Gillespie Bros, v. Roy Bowles Ltd., (1973) 1 Queen's Bench, 400, and by the House of Lords in Smith v. South Vales Switchgear Co. Ltd., (1978) 1 Weekly Law Reports, 165. On the other hand, it would be a fatal error to regard them as if they were the words of a codifying and, still worse an amending, statute. They provide a very lucid and useful summary of well settled law, but have to be construed in the light of that law. Thus Canada Steamships was cited to this court in Hollier v. Rambler Motors Ltd., (1972) 2 Queen's Bench, 79, but it is mentioned in none of the judgments. Instead reliance was placed upon the older cases of Price v. Union Lighterage, (1904) 1 King's Bench, 412; Rutter v. Palmer. (1922) 2 King's Bench, 87 and Alderslade v. Hendon Laundry, (1945) 1 King's Bench, 189. Lord Justice Salmon, giving the leading judgment, expressly said at page 80 that Lord Greene's judgment in Alderslade...
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